It used to be that only certain professions and businesses had to really listen closely with empathy to their client's needs. Retail businesses in more prosperous times weren't in the business of playing counselor, coach, or advocate. That's all changed as consumers around the country are struggling with a bad economy, causing them to change their previously unquestioning consumer mentality to one of careful frugality. In an environment like this, the only way to customize your marketing and business strategies is to pay close attention to your customer's needs and try to meet them.
The Big Three Components of Consumer Demand
Many of the issues that customers are going to face in this recession are the same: Reduced income, increased expenses, and solutions that don't meet their immediate needs. As we know from business theories, consumer demand is comprised of three components: Income level, personal preference, and price. There is not much a business can do about customers’ falling income levels. There are some things that can be done with pricing; however, downward pricing can create a risk to the bottom line profitability of the business, so the only other way to influence consumer demand is through preference.
Retailers Phasing Out Choices
It makes sense for big retailers who must carry inventory to phase out choices that aren't in wide demand and to cater to mass tastes. That's where online businesses can have an edge in this economy as they can offer the choice without necessarily inventorying it. If they listen to many of their customers who are having difficulty finding a particular solution that can only be bought online, they can offer this and raise the demand for their services by using this strategy.
Understand The Nature of Consumer Demand
Yes, people will have less to spend and become more frugal, but this doesn't mean that consumers will naturally gravitate to the cheapest choice. In fact, value becomes more important as the length of the recession is anyone's guess. A purchase that lasts longer is of better value than a great product that crashes, breaks, or looks worn a few months down the line. Consumers are becoming more sophisticated on buying not only things that solve their personal problems and preferences, but they are now demanding that they stand up to the test of time. If you can meet both of these needs, you will have clients for life, long after this recession is over.