Noted 11/25: While reading this mornings news and alerts I came across the Executive Summary for an HBS Article entitled "Marketing Your Way Through a Recession" published in March '08. It's a great piece that just so happens to jibe with (and expand upon) my comments below. Take a moment to read it!
So, I'm totally jumping ahead of myself to even use KM 3.0 in the title of this post when I have yet to upload the post that inspired it, "KM 3.0 - The Return of Customer Service". Clearly, I'll have to launch that post ASAP, but it's about 6:40p and I really wanted to post this 'Quick & Dirty' before I leave the office and immerse myself in T-Day prep cooking.
So, I was reviewing news articles and posts this morning when I came across the umpteenth article on how businesses are dealing with the crappy economy (that's my official stance on our economy - you say recession, I say crappy...wait another decade and watch it become an actual economic indicator.)
Having exited my graduate program in December 2002 amidst a tidal wave of layoffs and joblessness that necessitated (me and friends across the world in similar situations) having to actually dumb down my resume and take a KM internship that - blessedly - became a full-time job (from which I was subsequently laid-off 2 years later) I'm extremely dumbfounded why the national media, our politicians, and even some businesses are all acting as if the current economy just cropped up over night like a thief in the night. Actually, it's been more like that whack-a-mole arcade game, popping up all over the place. Just ask the average American and they'll tell you, times didn't just get critical when AIG's mess exploded; it's been critical for a hot minute.
Anywho, the NYTimes posted an article about
how luxury brands are coping in the crappy economy, the second article I've read on the subject in the last week (the first I linked to in
last week's OOTB). Reading articles like these helps me to realize that I haven’t lost my gift for trend watching (even if I still don’t see the hype over
Twilight, but maybe – despite my Gossip Girl fixation – it’s just my general lack of interest in 'tween-oriented media).
Before I'd even finished the article I was back to wondering what bomb shelther these folks have been in not to have noticed the constant crappy-ness of our economy over the last 5 years!?!?
Contrary to popular opinion, I don't believe it's an issue of people not having money (for the most part; obviously too many Americans have barely enough to get by with these days), they're just being
highly selective about where they spend it, at least until a sense of normalcy returns to the economy. There's a reason why "old money" still has most of the money circulating around our country!
The fall of the banking industry does NOT instill a sense of normalcy.
My advice for purveyors of luxury goods is that this is not the time to cut back on advertisting...marketing will be your salvation as long as you are willing to re-brand luxury.
If cutbacks are necessary they should be made in the areas of production (reduce your output, which, consequently, makes your product more desirable due its limited availability) and focus/invest advertising dollars on smarter (i.e., newer, hip, more innovative) outlets for reaching both old and new consumers. An economic downturn is the time to (1) instill consumer confidence and (2) build and improve brand loyalty, displaying how well you know your customers to get at their safely guarded 'stacks' (that's a KM 3.0 thing).
One of the major problems with a lot of luxury items these days is that (on the advice of stupid marketing agencies - I know, I used to work for one) they've been pouring tons of money into business ideas that regard customer service as a premium service (instead of standard practice) and then selling that service to those capable of (and willing to) pay for it as opposed to treating all customers like 'gods' and building brand loyalty and equity. Now, those same businesses are going
out of business as keeping up with Joneses becomes an increasingly poor investment.
Sidebar: a good example of a company with fantastic customer service and a marketing strategy that hasn't seemed to change since I can remember: Publix. As much as I love this store, I readily admit it can be a bit pricey (not Whole Foods pricey, but not Kroger, Winn Dixie, Albertson's, or Piggly Wiggly inexpensive either). Still, I'm a loyal customer. I even have a Publix rule to which my tennis teams are made to adhere. Nowadays though, I spend more money at Wal-Mart for many of the the same products (there's a company that's exploiting the hell out of this crappy economy!) How has Publix weathered the economy? Despite
a 19% drop in profits that's likely been caused by eating some of their cost increases rather than passing them on to consumers, their sales have improved. That's why I continue to be a loyal customer.
When money is tight, everything not essential for living (fancy foreign bottled water is not essential; G5 jets, while hot as hell, are not essential) is considered a luxury (
Starbucks is now a luxury, get the picture???) and folks want more value for their buck, so the challenge is to focus efforts on re-branding what luxury means to people, particularly those who have the money to buy what they want. But be cautious, in a time when the tastefulness of a company holiday party is called into question (because so many folks are being laid off), excessively priced purchases can be a sign of one's lack of tact, not wealth.
In the meantime, for you consumers, remember back when thrift shopping was the thing? Well, I’m here to tell you (as my fabulous and fashionable BFF Min previously educated me) that you can still get brand names, dirt cheap (in some cases, that’s literal – invest in good laundry products y’all) at Goodwill and save those duckets for another day! Nobody needs to know how you are able afford your social calendar…unless they’re following the same advice. Maybe you'll want to shop 'thrift' a couple of zipcodes over wearing a baseball cap and some shades.
All right, time to race home for Gossip Girl. XOXO!
It's always nice when there are interesting and thought provoking articles to read and share - even if I don't always have the time to read or share them right away.
Quite coincidentally this week's reads seemed to provide a variety of ideas for KM practitioners looking to branch out into independent consulting or to expand your practice if you're already doing your own thing, as well as innovative marketing and branding tactics. 
