The thousand days of pain

photo credit: Aliya Hallim-Byne

Last week I had the honor of participating in a panel at the New York Times building and the opportunity to talk about “Marketing in a Recession.”

The event was sponsored by outprofessionals.org, moderated by Stuart Elliott of the New York Times, and featured panelists Rachel Sklar (photo: right), editor-in-large at Mediaite, and Stephanie Blackwood (photo: left), co-founder of Double Platinum.

When the first question was thrown out and I was asked “how’s the recession impacting the consumer?” – there was one thought I just couldn’t get out of my mind. In responding to the question, weighing up the social and economic trends related to this new era of fiscal responsibility – and in thinking about the extensive research we’ve conducted around the country, there was only one thing I could say on behalf of the consumer:

“It feels like a thousand days of pain.”

What I was thinking about harkens back to the “unofficial” beginning of the Great Recession in August 2007 when the news about the sub-prime crisis first broke – and when consumer sentiment began its rapid descent. And in looking into the foreseeable future my thoughts about the consumer were projected through to around May 2010, when perhaps, consumers might universally start to feel better about life again.

But to be clear, I wasn’t just talking about the one-out-of ten Americans who are without work, or the nearly one-out-of-five homeowners who are at/or near “underwater mortgage” levels. I had every consumer segment in mind, including the wealthy, middle and lower income groups – across a diverse spectrum of consumer segments, including Caucasian, Hispanic, African American, even GLBT consumers – and beyond.

I was thinking about how the consumer feels about today’s everyday reality and their diminished discretionary spending power, as compared to the “old days” of liberal consumption fueled by easily attainable credit. By contrast, I was contemplating the emergence of the “new normal” – where frugality rules (yes even among millionaires!) and almost all purchase decisions become a considered consumption. Even despite the recent early signs of economic hope, I talked about how “prudence” as a shopping behavior is more likely to linger for another 6-9 months, even after consumer sentiment begins to rebound.

I projected forward in how I believe consumers are likely to continue exhibiting “spending paralysis” and “unconsumer” like behavioral characteristics. For example, in the year ahead, I suspect that consumers will continue to be more likely to save and reduce their personal debt levels, than spend. Or consumers may look for ways to renew and renovate, as opposed to always buying new. And if they do spend, they’ll rather trade down, or make more distressed purchases only when absolutely necessary – and perhaps at best, splurge on the smaller and more affordable every day luxuries.

But rather than commiserate with the challenges – my thinking transitioned onto the opportunities for marketers during this Great Recession. In striking a more optimistic tone, I argued that consumers might occasionally break out of their spending malaise, but to do so, they would have to feel that the purchase “is really worth it.” I echoed the sentiment that a brand will have to go out of its way to engage consumers in a highly relevant way for this to happen – but that it won’t just occur by applying the same old tricks of traditional mass marketing.

With all this in mind and following a spirited debate among the panel members, the Q & A commenced and the conversation focused on the potential for marketers and agencies to successfully navigate the days of pain ahead. Based on my observations, here’s where I think the collective power of wisdom netted out, in identifying seven key themes to winning in a recession:

1. Innovation is a prerequisite
2. Take a risk: not taking one is more risky
3. Focus is key, differentiate or die
4. Deliver more value through enhanced benefits, not lower price
5. Don’t forget the fundamentals – trust and authenticity
6. Targeting precision beats mass efficiency
7. Communicate your brand’s values

Hopefully, the attendees left the event with a renewed sense of optimism and perhaps a better understanding of how to navigate the recession. Although at a minimum, I suspect many had made a mental note of May 2010 in calculating there are now only 250 days of pain to go!

Either way, what was clear to all – is that the thousand days of pain will have a profound impact on the consumer and that will likely change their purchasing behavior forever more.