ideasarehere

A German marketing research association held a conference last month where several experts analyzed current trends in economics with regard to consumption and marketing. It’s quite interesting to look at their points of view from a different angle.

• “The middle class still exists.” — Professor Wagner from the German Institute of Economics Research said that although the layer of middle income has diverged to either side of the edge, there are no more rich people than a few years ago. This is obvious as long as people keep spending more money the more money they earn. Who doesn’t save or invest won’t become wealthy. Still, it’s important to note that the symbols of wealth haven’t changed over the years. One generation back, when you had a Mercedes, you had to be rich. That’s not the case today, but people still assume it were. It’s important to be clear about the context you’re measuring.
• “There is a market for middle brands.” — Dr Adlwarth from the GfK Group pointed out that in the last years the competition in consuming goods was between major brands at the pricing top end and no-brand products on the bottom end. Consumers went for either-or, and there was not a lot of middle ground. This trend, he went on, changed in 2009, when suddenly they saw a trend in rising market share of middle brands, which are characterized as regional and rich in tradition.
  Here’s a different point of view: There’s 3 kinds of stuff you can buy: Commodities, which are cheap and don’t help improve your image. Premium goods, which are expensive and for that reason they raise your image (see Mercedes example above). And then there’s stuff you care about. Things you buy because you like them regardless of cost. This is the niche category. Products that are not for everyone, the manufacturers of which have understood they can’t please everyone and they don’t have to. Vita Cola is successful in the eastern regions of Germany, but not in the west. Blackwood Forest ham sells most successfully in the southern regions but not in the north. There’s an infinite number of products with only a small market share but each of them has enough margin so the companies still make a solid profit. This has nothing to do with middle. Middle is just a convenient, yet useless wrapper because Dr Adlwarth does not seem to acknowledge the existence and power of passion and tribes.
• “The digital middle” — This is actually a false label for the talk by the Global Director Consumer Electronics of the GfK Group. He analyzed the market for TV sets. Not quite a surprise that it turned out that when LCD and plasma TV were introduced, they were very expensive, but the more the overall market share grew, the pricing range diverged. Honestly, I have no idea why I would have anyone talk about the mechanics of the adoption curve these days. It’s not leading edge science any more.
• “Communication for middle market brands” — I won’t comment on this talk by an advertiser because it makes me throw up. As usual, a wrong concept leads to wrong conclusions that, if presented conclusively, will appeal to an uneducated audience.

So why all this obsessing about the middle? Because it’s an easy concept. It’s less scary to think of high, middle and low instead being on a knife’s edge. It allows settling for less — if you’re not a superstar, you’re not automatically a loser, because there’s still the middle. Middle sounds good, it’s not too much in any direction.

But middle also artificially creates a new battlefield which in reality doesn’t exist. It’s easier for analysts to look at a large plane than an infinite number of small planes, because only on a large plane there can be a battle and therefore a winner. But there is no large plane and no battle for the middle. Middle is a transitional state: You’re either on your way up or the way down, no place where you can stay for long, because the winners are automatically promoted to the top end and the losers go out of business. No matter if it’s in the overall market or in a niche.

Yesterday I came across an article on heise resale, a news service for IT resellers. It was the latest feature in their series “Caution, cutomer!” that made me wonder (again). Long story short: Someone buys an HP computer from a reseller with a 3-year warranty for HP service by the next working day, machine keeps freezing, HP call center screws up, HP technician arrives 3 days later and screws up, problem is fixed one week later after heise intervened.

Now I’m not surprised that the HP people screwed up by sticking to the manual. What I’m surprised about is that the reseller missed the opportunity to be remarkable and actually help their customer. Instead of saying “You know what, we will take care of this. We’ll give you a new machine with all your data transferred, sort this thing with HP and when it’s fixed, we’ll change it back” they just passed the buck to HP. Because they could. The customer has the service agreement with HP, not them, their thinking is.

WDIFY still has a long way to go.

Procter & Gamble is about to launch a new version of it’s highest turnover product, the disposable diaper, in Germany. They already introduced it to the US market in March, and what happened was that parents started complaining their toddlers were getting a rash, assuming it came from the new product. In no time, a total of 14,000 people started to ask P&G to return to the old version of the diaper.

What did P&G do? VP Jodi Allen said:

“For a number of weeks, Pampers has been a subject of growing but completely false rumors fueled by social media that its new Dry Max diaper causes rashes and other skin irritations. These rumors are being perpetuated by a small number of parents, some of whom are unhappy that we replaced our older Cruisers and Swaddlers products while others support competitive products and the use of cloth diapers. [..]” (find the full statement here)

Which means: You, the concerned parents, our customers, the people we wouldn’t be here without, are wrong. Go away.

And guess what? That’s what people do when you tell them. And they tell other parents too.

The smart thing to do is to embrace the customers and their concerns. If P&G had said: “We are very sorry. Your baby’s health and well-being is most important to us. Though we have done extensive testing, and the Consumer Product Safety Commission has confirmed that our product does not harm, it is possible that babies’ skin is irritated from time to time. The doctors we work with have said that this is not necessarily caused by the diaper. They advise to monitor the skin condition for 10 days, and if it’s not getting better, to have your doctor examine this. However, we do understand that you’re not fully satisfied with our product, that’s why we will do 2 things to improve the situation: First, we will give you a full refund for the new diapers. Just send an e-mail. Second, we kindly ask of you to stay in touch and tell us how your baby is getting better. All of your information will be kept confidential and only be used to help us improve our product. Thank you.”

Different message. Different result.

WTF? Here’s the story: Last friday we decided to get a new cupboard for our kitchen, so we went to the Swedish furniture store. We knew we would have to go to a DIY store too, to have them cut the lower bezel board because it was too long and a bit too high (or wide, depending on which way you hold it).

So we went to Bauhaus, one of two DIY stores nearby, and asked the woman at the info counter if they’d cut our board. “No, we don’t do that.” Since we needed a plain wooden board from the DIY store too, we asked “If we get a board from you, you’d cut that?” “Yes.” “…and ours too?” “No.” “Thanks, bye.” So we grabbed our board and went to OBI, which has a reputation for being expensive (but Bauhaus isn’t cheaper). As we approached the info counter, the woman laughed, “Okay, I can already see the IKEA print on the board. You wanna go straight ahead.” Next thing you know, they sliced the board just as we wanted it, and even though there was a “Please consider that due to technical reasons cuts can’t be less than 10 cm from the board’s edge” sign, they managed to cut 1 cm off the edge, just as we needed it to be.

DIY is no future business model anymore. “We do it for you (no questions asked)” is the new standard. (Of course, if IKEA cut the boards the way you need them, it’d be even better.)

Chances are you’ve never heard of it, but you might have experienced in a very harmless form. That salesperson who was so nice when you spent the money to buy your new gadget — now it’s broken, you ask for an exchange and he tells you to call customer support. That customer who was the Über-geek when he came to buy his gadget has transformed to a grumpy buffoon.

It happens all the time. People are being exchanged by their evil twins. Of course they aren’t, there are only pivotal points at which the game changes, and sometimes to a non-pleasant turn. A customer converts to a pain in the neck once she has bought the item, because now she can ask for repair, exchange, or refund, even claim punitive damages and so forth. And on the other side, the salesperson does his best to shun people who need his assistance, support and, foremost, understanding.

After all, it’s a question of posture. No matter how entitled you feel to receive a certain treatment, the person on the other side needs at least one chance to take action. When you corner them straight away, they will very likely become upset and angry. This applies for every party involved. Only when we bring good to the table, good will come out, and it will spread. Ill will only causes harm and sometimes long-term damage. Which, sadly enough, spreads too.

(Find the explanation of real Capgras here.)