The Consumer Mindset

Consumer spending is falling toward its lowest level since 1942.

Consumer confidence is falling toward depths not seen since the 1990-91 recession.
Both are good reasons to take another look at the workings of the consumer mind.
We are caught up (or down) in what economists call "the paradox of thrift." As consumers worry more and spend less during times of financial strife, their collective cutbacks keep money out of the economy and make matters worse for everyone.
Two main forces trigger consumer purchases: feelings and logic. As marketers, we provide sensory, tactile and emotional stimuli to attract consumers and their business. We also promote rational criteria such as performance, convenience and pricing. The mix, of course, varies according to the product or service. But when the feeling turns to fear for the future and the logic to financial self-preservation, all bets are off.
Research has demonstrated that emotions are the essential catalysts in the purchasing process. People who have lost emotional function due to brain injury can experience a total impairment of their ability to make decisions about purchases. They simply cannot shop.
The vital role of emotion has led marketing researchers toward medical investigation. Consumer subjects now undergo functional MRIs to detect their cognitive versus emotional brain activity as they react to descriptions of brands, products and services. Increased activity in the brain's pleasure centers is thought to reveal a propensity to purchase. EEGs are also being considered as a more portable technology for "reading consumers' minds."
Other more conventional studies reflect consumers' need for logic. With new and unfamiliar products, consumers seek categorization. The opportunity to choose from smaller, better-defined subsets improves decision-making and ultimately satisfaction with their purchase.
Consumers who already have an emotional bond to a company, product or service spend much less time in the shopping mode. They proceed directly to purchase without lag time or additional consideration. Their choice is already "precategorized" and in a sense preprogrammed. That is the power of branding.
When consumer spending and confidence are down, the importance of making a strong emotional connection with consumers is paramount. Unfortunately, marketers' spending and confidence seem to careen down the same slippery, treacherous slope as consumers'. Our emotion turns to fear and our logic to self-preservation. 
Let's not lose heart or lose our heads. Instead we must use them both to develop innovative, highly practical ways to retain our customers' loyalty and empower them to choose our products and services. 
Some economists are talking about a full recovery around 2010. That's too long to wait. When the chips are down, it's time to fall up.
—Tom DeSanto

Sources: The Christian Science Monitor,; Penton Media,Inc.; The Economist, December 20. Image: Cover of Shel Silverstein's book of poems and drawings, "Falling Up"

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