A New Economy…A New Customer Mindset
There is more substantiation that it will not be business as usual as we transition out of this recession. Insight for this posting comes from Reshma Kapadia, writing for Smart Money magazine, August 2009. He says, ” It’s hard to ignore signs of improvement in the economy, however tentative. Consumer confidence has rebounded, stocks have moved off their lows, and even the battered financial industry is regaining some of its old swagger. But not everything will return to normal. The economic crisis has already led to significant shifts in both consumer and corporate behavior that will create headaches for many firms - but opportunities for a handful of others.”
He continues to say “that even as the economy recovers, a new kind of thriftiness will rule the day.” He reports that “the national savings rate has already risen to 5.7%, from zero a year ago“.
In the same article, Ravi Dhar, Director of Yale’s Center For Consumer Insights says, “…shoppers are hunting for values and ’stayvacations’ are on the rise.”
It is evident that marketing and sales people need to gear up and be ready for this much more conservative, thrifty, bargain hunter. I think it is also appropriate to surmise that as the customers return they are going to be less swayed by overly emotional appeals. They will have to see the economic sense in their purchase and a compelling value proposition. Their tendancy is going to be toward staying home or very close to home as an integral part of their leisure lifestyle. When you take into consideration economic sense, high value proposition and close to home, Fractional Ownership fits the bill. The most successful Fractional projects are within 3 hours drive time of home. There may be tremendous opportunity for Fractional Ownership, priced right and in the right location, to lead out of the recession.
In the new economy, the timeshare buyer may hold the same notion about staying close to home in order to save money. A generation ago in the timeshare industry, an importance was placed on buying a timeshare at a resort that one really liked and where the primary motivation was to return each year. Even RCI advised that such should be the case and that the exchange opportunity was to be considered an add-on value. That idea prety much went by the wayside in the 80’s when the exchange became the primary reason for buying. In terms of economic sense and value proposition, timeshare salespeople in some areas are going to face challenges. In Orlando, Las Vegas and maybe elsewhere, where hotel rooms are available for as little as $59 a night, the value proposition of timeshare at well over $100 a night is going to be hard to sell in a truly economic sense. The value in timeshare has not been economic, in most areas, for many years. The value is in lifestyle and the decision is based on priorites.
The point of this is to emphasize that if we market and sell our products the same way we did as little as two years ago, we’ll not be resonating with old buyers with a new mindset in a dramatically new economy. The answer is to re-think, re-invent and re-train. We are going to have to think outside the box, with new products and new ways of enjoying a high value yet frugal leisure lifestyle. As a consultant I’d like to be in on developing new ideas and new products, but as a trainer I have a more immediate approach. I have developed a sales training program called “Sales In The New Economy” targeting consumers who are more savvy, more thrifty, more conservative, less trusting, and with new vacation patterns. Who really knows what the future holds? We are in uncharted waters, but to continue to do things the way in which we have become comfortable is not the answer.
Chime in. Leave a comment. How do you see it?
Until next time,
Tom