10 great ways to avoid growing your business in 2012

Let’s hope it is your competitor, rather than you, that has made these strategic choices that can limit sales growth in 2012

1.   Don’t seek fresh consumer insights—you know a lot about your consumer already.  Why waste money getting fresh insights when consumer purchase behavior has changed in most categories in the last couple years.  Maybe the impact of the economy, ecommerce, social media, smartphones, etc. have not really changed the way your consumers think and shop.

2.   Don’t update your website—Websites cost money to update.  Your current online brochure of a website should be good enough for another year.  So your competitors have interactive websites with regular fresh content and aggressively sell their products through their website and/or multiple web partners.  You do not need to worry about integrating fresh content, social media or ecommerce.  You haven’t seen any proof that your website sells product.  Why invest more?

3.   Don’t go mobile—Sure a lot of people have smartphones.  But they mostly seem to be used for email, texting or checking Facebook.  You do not need to spend money this year making sure consumers can access your website or buy your product on a smartphone.  So what that 38% of consumers have made at least one purchase on their smartphone…that does not affect your products.

4.   Don’t worry about SEO—why spend money optimizing your search engine performance.  If you search your company’s name they can find you—even if you have to scroll down to find your listing.  You do not need to worry about any other kind of category search terms.  It does not matter that you come up on page 3 of a Google search and over 90% of consumers click through the listings on just the first page.  If someone really wants to find you, they will be willing to do the work rather than choose your competitor who is easier to find.

5.   Extend your advertising another year—Consumers loved your advertising when it launched.  You saw a nice sales bump.  So it makes sense to continue to run that same great advertising for another year or three.  It does not matter that consumers thought your ad was funny at first, but now the humor is stale—or that your message has less impact in light of your competitor’s new product and ads.  New advertising is expensive, so let’s stretch the current campaign for one more year.

6.   Assume your packaging is good enough—At least you do not need to worry about updating your packaging communication.  You tend to update your packaging couple years or when you have a new brand manager.  There is no need to freshen up your communication to educate shoppers or make sure your packaging is more engaging than your competitor. 

7.   Go with the same shopper marketing strategy this year—your promotions and in store communication worked well last year.  You are up against those sales numbers again this year.  It is safe to assume you can get the same results or better from repeating last year’s promotions and in store communication.  There is no need to engage your shopper in new ways this year.

8.   Don’t expect your competitors to innovate—in this economy, it is best to cut back and survive the downturn rather than risk investing in the future.  Everyone is affected, so your competitor will not innovate if you do not.  After all, you are the category leader.  When the market starts to rebound, you can begin to reinvest in the future.  Your competitor is sure to follow your lead.

9.   Sell only on price—with this economy, why give your consumers a reason to buy other than price.  A good enough product at a good enough price may be a good enough strategy to reach a good enough sales goal. 

10. Cut your marketing budget (again)—your competitors have been limiting their marketing spend so you can save money too.  After all, marketing spending is just a cost, not a strategic investment.  Who wants to gain share in a down market by outmarketing their competition.  And, if you time your budget cuts just right, you can reduce your spending and your sales.

These are great ways to avoid growing a business this year.  If some of these are in your company’s 2012 plan, consider another approach—but only if you want to accelerate your sales in the New Year.

GrowthSpring Group is a market research, marketing strategy and innovation firm focused on accelerating your sales and profit growth. We help you identify new business growth insights & opportunities and execute winning strategies & plans. www.GrowthSpringGroup.com

Part 2 – How and why consumers are giving retailers a Merry Christmas

This two-part blog looks at how much consumers are spending this holiday season and why are shoppers buying more this year than expected.

Total holiday spending is now expected to end around +3.8% according to the National Retail Federation.  Others are forecasting closer to 5% growth.  Why are consumers spending more than last year in a still tough economy? 

Based on news reports and recently reported consumer surveys, GrowthSpring sees six key catalysts for why consumers are spending more this holiday season.

1.    Families are working to create the “ideal” Christmas.  Each year adults hope for and work to achieve a family Christmas experience that is ideal—an experience just like the holidays pictured in so many TV Christmas movies. The family is together, happy, cheerful and filled with Christmas spirit.  In a year when so much has been beyond the control of the average family (the economy, job security, higher food and gas prices, global instability, dysfunctional U.S. government, etc.), families can still influence/create their family Christmas experience.  Families are working hard to ensure their family has a special time together and are spending to give their kids a nice Christmas at the end of a tough year.

2.   Consumer confidence is up.  With recent favorable economic reports on declining unemployment, a dip in gas prices, and efforts to stabilize global financial markets, consumer confidence among Americans with full-time jobs reached its highest level in almost five months (according to the Bloomberg Consumer Comfort Index).  

3.   This season has featured deep retail discounts from start to finish.  From starting Black Friday the night of Thanksgiving to the record-setting shopping events of Shop Local Saturday, Cyber Monday, Green Monday and Free Shipping Friday, as well as retailer specific sales, shoppers have had great values offered to them on this season’s hottest gifts.  Shoppers have responded to take advantage of discounts.

4.   Shoppers are shopping for themselves as well as for gifts.  NRF surveys show that while early holiday spending was up, as of mid-December, shoppers lag last year in how much of their shopping is completed.  It appears that some of the Black Friday weekend shopping was to satisfy pent up consumer demand for items wanted and needed by shoppers for the home and for themselves.  They took advantage of Black Friday pricing to shop and buy non-gift items at great prices while also shopping for the holidays.  Many shoppers are also buying more practical gifts and smaller indulgences for their family and friends allowing them to buy more gifts but stay on budget.

5.   The Internet continues to change how consumers shop—and pre-shop.  A Shopper Sciences study showed that 42% of shoppers planning to spend more time doing online research prior to buying this year.  According to a Shop.org survey, 122.9M consumers said they would shop on Cyber Monday this year.  Retailers participated too—over 92% of online retailers offered a special promotion over the Thanksgiving weekend.

    Online shopping with free shipping is now playing an increasingly important role in the last two weeks before Christmas—especially among the 41% of consumers who expect to shop for last minute gifts (Source:  Price Grabber).  Over $1 billion was spent on Free Shipping Day (Friday, December 16).  Last week saw YTD online holiday shopping approach $31B and 4 individual days top $1B.  Overall, online holiday shopping is up 15% YTD.

6.   Mobile has further enabled holiday shoppers to find deals and the products they want.  Mobile phones, social media and shopping aps are making it easier to shop and are helping consumers find what they need while staying on budget.  Consumers are increasingly locating products, comparing prices and shopping on their smart phones.  According to the NRF study, 31.2% of smartphone users will use their phone to compare prices and research holiday items with their smartphone.  The Shop.org study revealed 17.8 million consumers planned to use their smartphone to make a holiday purchase—up from just 3.6 million in 2009.  Mobile-commerce sales are expected to reach $6.7 billion in 2011 according to online-marketing firm eMarket.  And, with Walmart launching its first social-shopping ap, Shopycat, other retailers will rush to do the same in 2012.

These six catalysts provide valuable insights into shopping purchases this year.  In the coming weeks, we will continue to learn more about how shoppers behaved this holiday season and why.  In the mean time, consumers are giving the gift of a good Christmas season to retailers.  It is a welcome gift this year.

How and why consumers are giving retailers a Merry Christmas – Part 1

This two-part blog looks at how much consumers are spending this holiday season and why are shoppers buying more than expected.

In October, the National Retail Federation forecasted a 2.8% increase for 2011 holiday shopping and stood by their forecast even after a strong Black Friday weekend suggesting that shoppers were just spending their money early this year. 

It turns out consumers were not listening to the NRF.  This week, following continued strong shopping trends, the NRF raised their forecast to 3.8% increase for the season and reported that November spending was up 4.5% YOY.  The 3.8% forecast is lower than last year’s 5.2% holiday spending increase, but more robust than expected.  Consumers continue to spend as Christmas approaches. 

NRF’s most recent spending survey released this week revealed shoppers have completed less holiday shopping to date than in previous years.  That suggests that much of consumers’ November shopping was for themselves, and there is still a good bit of holiday shopping to come.  Big news and good news for retailers.

Another source of good news is this year’s holiday spending growth online.  Those selling online are having a great holiday season.  Online sales as reported by ComScore have reached $268B for the holiday season to date ending December 12.  This is an increase of over 15% vs. last year.  http://lnkd.in/3xcBTE   

This trend reveals that companies that did not participate in holiday ecommerce have missed key sales opportunities this year.  If you have not started building ecommerce capabilities on your website or at least your retail partner’s websites, you are missing sales and likely losing market share.

Why are consumers spending more and changing their shopping behavior? 

We will discuss that in Part 2.

New Product Review of Dole Fruit Crisp

Product:   Dole Fruit Crisp

Manufacturer:  Dole Foods
Variety tested:  Apple Cinnamon and Apple Pear
Varieties available:  Apple Cinnamon, Apple Pear and Peach
Innovation:  Microwave fruit crisp by packing the crunchy topping separate from the fruit

Thoughts:  Simple concept well executed.  We have seen this kind of crunchy topic packed on yogurt before, but not a fruit bowl.  Makes a tasty fruit treat with good flavor and crunchy texture.  At 160 calories and 20g of sugar, it is not as healthy as fresh fruit, but it tastes good—especially when you warm the fruit.  At $1.98 each at Walmart, you may not serve this every day, but it makes a quick and easy snack or dessert.

Rating: (out of a possible 5 Sprouts)

Innovation Concept:       ÎÎ

Performance:                 ÎÎÎÎ

Sprouts Key:

Innovation Concept:

Nothing really new =                           Î

Fresh approach (idea or tech) = ÎÎÎ

Breakthrough idea =                            ÎÎÎÎÎ

Performance:

Awful =                                                       Î

Average =                             ÎÎÎ

Outstanding =                                       ÎÎÎÎÎ

Your Brand – A Promise Kept?

What a difference it makes when we keep a promise vs. break one.  Kids and loved ones expect us to keep our promises.  Keeping a promise feels good.  All are happy.  The result can be as simple as a met expectation or a big emotional payoff of delivering on a big promise.  Repeated kept promises strengthen a relationship and trust.

Breaking a promise disappoints all parties.  You let someone down—even if there was a reason to do so.  The person on the other side of the broken promise is disappointed, hurt, perhaps event angry.  You fell short of what you promised.  You risk losing their trust in the future.  Repeated broken promises destroy trust.

Keep this in mind when you think of your brand.  Your brand is your promise.  People buy your brand because of what it represents—and the emotional bond they have built with your brand because of the consistent experience you deliver.  It is a promise of expected consistency, quality, timeliness, value and experience.  It is the promise of their ongoing relationship with you and your products or services.  If you change your product or service delivery in a way that is perceived to be less than expected, you have broken your brand promise.  Your customer will decide whether or not to give your relationship another chance and buy from you again.  Can they trust you in the future?

You will look at your brand differently if you view your customers as those you to whom you have made promises.  Keep your promise, build your relationship and trust and you will often be rewarded.

Why? Why? Why? What a 3 Year Old Can Teach Us About Market Insights

Why? This is the favorite question of 3-4 year olds. Why? It is asked over and over until they get an acceptable answer...or the cliché parent response “because I said so." While I am certain that some days my kids asked me this question just to annoy me, most of the time they asked to better understand their world and how it worked. They were building their knowledge to help them know the right actions to take and/or why they should not behave in a certain way.

Marketers can learn a lot by going back to this simple question. Why do consumers buy from us? Why do they buy more from our competitor when we think our product is better? Why did this customers buy so much more than last year? Why can’t we get the best position on shelf? Why don’t our promotions perform better? Why did our last new product fail? Why does a new product launched under one brand outperform new products on another? Why? Why? Why?

Don’t settle for the quick answer—it may not be correct. Keep asking why. You may be surprised at the real answer—and the answer may provide insights for new opportunities.

New Product Review of Planters NUT•rition Bars

Product:  Planters NUT•rition Bars

Manufacturer:  Kraft Foods

Variety tested:  Antioxidant Bars

Varieties available:  Antioxidant, Bone Health, Energy and Heart Healthy

Innovation:  Planters brings its NUT-rition to energy bars.

Thoughts:  How do you create a new and different energy bar in an already overcrowded category?  Planters brings its brand, good tasting nuts and NUT-rition in 3 new bars. While the “Energy” variety is standard fare, the Antioxidant, Bone Health and Heart Healthy are more differentiated—and a good extension of their NUT-rition nut mixes. Antioxidants come from almonds, blueberries and dark chocolate.  Bone Health delivers calcium and magnesium.  They taste much better than some other nutrition focused bars.  A good addition to a busy category.

Rating: (out of a possible 5 Sprouts)

Innovation Concept:            ÎÎÎ

Performance:                       ÎÎÎΠ

Sprouts Key:Innovation Concept:

Nothing really new =                       Î

Fresh approach (idea or tech) =   ÎÎÎ

Breakthrough idea =                           ÎÎÎÎÎ

Performance:

Awful =                                                      Î

Average =                                ÎÎÎ

Outstanding =                                       ÎÎÎÎÎ

New Product Review of Orville Redenbacher Pop Up Bowl

Product:  Orville Redenbacher Pop Up Bowl

Manufacturer:  ConAgra Foods

Variety tested:  Movie Theater Butter

Varieties available: Butter, Movie Theatre Butter, Ultimate Butter

Innovation:  Packaging converts to a stand-up bowl

Thoughts:  What a great concept—microwave popcorn without a dirty dish.  Unfortunately, the product experience fell short of the concept.  The cooking time on the box was longer than needed, so the consumer will have to learn the best cooking time for their microwave.  The side clear plastic seam (where you would open the bag) blew out while cooking in the microwave spreading butter and kernels across the floor of the oven.   The top of the bag was not easy to open.  However, the popcorn did taste great. 

There are some issues that will turn away consumers after trying a box, but the concept shows promise if they quickly work the bugs out.

Rating: (out of a possible 5 Sprouts)

Innovation Concept:           ÎÎÎÎÎ

Performance:                         ÎÎ

Sprouts Key:

Innovation Concept:

Nothing really new =                        Î

Fresh approach (idea or tech) =    ÎÎÎ

Breakthrough idea =                             ÎÎÎÎÎ

Performance:

Awful =                                                       Î

Average =                                 ÎÎÎ

Outstanding =                                        ÎÎÎÎÎ

Repurchase…The Best Brand Experience Wins

Few purchases are purely fact based.  Even fewer re-purchases are.  Consumers try new products and services.  Consumers explore competitive products and services.  Other than price discounts, how do you keep consumers coming back to your brand once they try it?   How do you win their hearts and minds vs. all the other choices in the market?

It’s the experience that counts.  At the end of the day, you are more likely to win the repurchase of products and services if the consumer has a great experience buying and using your brand.  Great marketing, merchandising and promotion can get your product purchased.  The experience with product and service get you repurchased.

Brand experiences are about the senses, the emotions, connecting.  To win consistently, your brand needs to move beyond delivering a functional benefit to understanding and engaging the multisensory experience that triggers your consumer’s emotions. 

Brands that provide experiences that connect with emotions and senses usually win high market share and fierce brand loyalty.  Examples?  Coca Cola, Heinz Ketchup, Swiffer, Apple, Harley Davidson, McDonalds, Bass Pro Shops, Disney World.

You say your category is not that involved?  Look again.  Some initial purchase decisions are not that involved.  Buying frozen vegetables is a simpler decision that buying a new cell phone, but both deliver multi-sensory experiences in their use.  Every category offers the opportunity to differentiate on experience.

Delivering that differentiating brand experience involves all three moments of truth—the shopping experience online and in store as they research your product, the decision experience in store and online when they choose to purchase your product and when they use your product at home on or on the go.  It is the aggregation of those experiences and the related logical and emotion responses triggered by those experiences that will lead consumers to buy your product again and again…or not.

Do you deliver a differentiating brand experience?  Do you know?

GrowthSpring Group is a market research, marketing strategy and innovation firm focused on accelerating your sales and profit growth. We help you identify new business growth insights & opportunities and execute winning strategies & plans. www.GrowthSpringGroup.com