Many big-box retailers this year are opening their stores on Thanksgiving Day itself to kick off the traditional after-turkey shopping rush.  Toys R Us is opening at 9 p.m., with Wal-Mart following soon after at 10 p.m.  Best Buy, Kohls, and Target are all opening at midnight.

The benefit of opening early seems clear: retailers hope that shoppers will head to their stores first and complete all of their holiday shopping in one fell swoop.  Also, opening on the night of Thanksgiving may attract shoppers who are bored after the turkey’s been eaten, the dishes have been washed, and the kids have been put to bed; an early opening may also attract those who love sleeping in (but are still awake at 9 or 10 at night).

And the demand may be there.  Brick-and-mortar retailers have increasingly more competition.  Amazon is offering daily deals leading up to Black Friday, and Amazon offers a lot more convenience than the hassle of dealing with Black Friday’s crowds, traffic, and sleep-deprivation.  In addition, consumers are retaining many of their recessionary behaviors, so they are more likely to hunt for the best deal.

This doesn’t mean that it is a good idea all around, though.  The early openings mean that employees have less time to spend with their families on Thanksgiving Day.  This early start to their Black Friday shifts means that many will have to duck out of Thanksgiving dinners early to sleep and prepare for work.

In a lot of ways, it’s a reflection on just how miserable the consumer economy in the US might be. Retailers know that they’re alienating their staffs by opening earlier and earlier each year, but it’s a clear effort to capture a greater percentage of consumer wallets. Retailers used to be able to do that by lowering prices, offering better products – that sort of thing – but as consumers fail to respond to those kinds of stimuli, stores are competing in other areas – like opening hours – instead.

Employees aren’t letting their bosses get off easy: A Target employee has launched an online petition to protest Target’s hours, and it has generated over 180,000 signatures as of Nov. 18.  A quick look through the comments suggests that consumers (as well as the employees) think Target has gone too far.  Many argue that Thanksgiving is a holiday that should be spent with family, and shopping should wait until about dawn on Black Friday.

Do you think consumers will relish shopping on Thanksgiving and adopt it as a new holiday tradition?  Or do you expect stores to be empty until the wee hours of Black Friday morning? Share your thoughts in the comment section below.

Think about that: consumers, when budget-constrained and given the choice between buying less food and buying food that clashes with their values, chose the former. It’s evidence for our assertion that shared values are among the most important differentiation and loyalty drivers available to brands – aligning your brand with higher-order needs is a great strategy to insulate your products from budget cutbacks.

But what are those values and higher-order needs, and how do they play into household decision-making process? To answer that question, we’re hosting a webinar next week that will dive into the evolving American family and present highlights from brands that have done the best job of engaging the modern family in recent months.

MLC members, for more, please register for the webinar or check out our research into accelerating loyalty with the use of shared values.

Why the sudden volatility?  Consumers haven’t suddenly changed spending behaviors, nor have business customers. And suppliers look healthier than in some time, beating earnings estimates and sitting on plenty of cash. Credit availability has drastically improved. Inflation is hardly threatening.

The answer seems to lie in the health of developed economies. While many appeared to be on the mend for the past year (albeit slowly), it’s become clear the recovery is far more fragile than was thought, especially in the US.  We’re not in a recession, but we’re also not in a recovery that is self-sustaining.

In such an unstable place, most signals (economic data) are too weak or confusing for investors to proceed with confidence.  Even small pieces of information have outsized impact and prices gyrate.  Markets, after all, are just groups of people trying to discern future value and in this case they are struggling.

So, what are executives doing in the face of this volatility?  Some are being tougher on discretionary spending.  Many are revisiting assumptions for 2012 planning.  But the executives we’ve spoken with are not deviating from the strategies and tactics they put in place following the recession.

There is one thing all executives should be doing right now – getting used to operating in an uncertain environment.  Fortunately, that doesn’t require telling the future.  It does require, however, a structured exploration of what could be, and flexibility to respond regardless what becomes.

Most companies can stand to improve in this area.  Want to learn more? Join your peers in our upcoming webinar, Taming Uncertainty, on 25 August at 11:00 am EDT.  We’ll clarify why volatility has become “normal” and how the best companies are working around it.

Recent activity in the financial markets – not to mention news trickling out of policy-making bodies like the US Congress, Federal Reserve, and the European Central Bank – strongly suggests (but does not guarantee) that at a minimum, a period of soft growth lies ahead for businesses. At worst, we could be facing down another recession; InTrade suggests a 44% chance of the US entering a negative-growth period in 2011, and in Europe, commercial bank exposure to bad sovereign debt might be contagious enough to tip many countries into recession.

So: that’s the bad news. And it’s pretty bad; it could even be catastrophic if policymakers can’t (or won’t) come up with the right answers. But here’s the thing: even in the darkest throes of the last crisis, business and consumer activity continued. Most people remained employed, even if they didn’t get their usual raises and bonuses. And there was still an opportunity for B2Bs to grow. But how?

In our recent B2B research, we identified four kinds of business buyers: Number Crunchers, Service Seekers, Innovators, and Risk Avoiders. We used these profiles to identify the kinds of marketing communications each was most likely to respond to, but each group also reacts differently to slowdowns in the growth environment.

For instance, we defined Innovators as buyers whose prime driver is growth: they make strategic purchases to improve their capabilities, and they’re more interested in learning opportunities provided by their supplier than any other group. But in many businesses, this profile will be inconsistent with diminished opportunities for growth; stronger bottom-line pressure on these buyers will leave many struggling to justify innovation-oriented purchases.

Service Seekers, on the other hand, are highly-satisfied, long term customers making smaller, more transactional purposes. Their biggest priorities are customer service and a great rapport with sales reps, and they tend to be very stable customers. Bottom-line pressure will also result in service seeking buyers struggling to justify their supplier relationships.

I think, if the worst predictions about the economy come true, we’ll see customers begin to crowd into the “Number Cruncher” and “Risk Avoider” categories: customers who are extremely focused on bottom lines and lifetime values, and who want to make absolutely sure that the supplier and products are reliable. They’ll do it because budget pressures will be up and tolerance for risk across the enterprise way down.

So how do you reach Number Crunchers and Risk Avoiders? Our discussions with marketers around the world have unearthed some hints on how to tailor marcoms to these groups. Autodesk enlists fellow customers to calm fears of supplier risk, FedEx uses a tool to quantify customer concerns, and our risk tool will help suppliers understand which risks they should message about.

But the most important element of staying afloat in a bad economy is psychological: resisting the urge to excessively scale back, keeping risks in perspective, and understanding that even in the worst economies, there’s still room to survive and thrive.

But recent activity in the financial markets – not to mention news trickling out of policy-making bodies like the US Congress, Federal Reserve, and the European Central Bank – strongly suggests that, at a minimum, a period of soft growth lies ahead for businesses. At worst, we could be facing down another recession; InTrade suggests a 44% chance of the US entering a negative-growth period in 2011, and in Europe, commercial bank exposure to bad sovereign debt might be contagious enough to tip many countries into recession.

So: that’s the bad news. And it’s pretty bad; it could even be catastrophic if policymakers can’t come up with the right answers. But here’s the thing: even in the darkest throes of the last crisis, consumer activity continued. Most people remained employed, even if they didn’t get their usual raises and bonuses. And there was still an opportunity for brands to grow if they could offer the right value and strike the right message for the times.

MLC’s 2011 B2C study focuses in on the overloaded, frazzled, easily-distracted consumer, and the consequences that overload has for brands. We noted that overloaded consumers are highly associated with brand-disloyal behaviors, and were less likely to recommend or advocate, even for brands that they like. The result for consumer brands is commodification and, increasingly, no purchase at all, as the purchase decision complicates itself to the point of indecision.

Bringing things back to economic instability, what effect does loss of income (or the threat thereof) have on consumer overload, stickiness, and ultimately the bottom lines of consumer brands? It’s not good. Consumers with less money, or who think they might have less money in the future, begin to view purchases as more important or involving significant tradeoffs, sending them on the research spiral:

And they aren’t wrong. Small purchases do take on an inflated importance in times of economic trouble. The best brands are the ones that recognize this and figure out how to communicate value without overloading an already-anxious consumer. Brands like DeBeers, P&G, and Netflix are returning control to consumers by providing transparent buying guides and schemas, allowing people to rest easy and know that a better deal isn’t readily available. Buy-back programs, like Best Buy’s and Hyundai’s, allow consumers to more easily face the buy now-buy later tradeoff, knowing that the decision is at least somewhat reversible if hard times strike.

But consumer brands have one silver lining – many recession-era behaviors have yet to recede, consumers are still buying an elevated amount of private label brands, and so the potential transition from slow to negative growth might not be as difficult as it was last time. Regardless, though, smart marketers with good products still have a chance to grow their brands in the coming months, even if the worst does happen.

With these shifts in the landscape becoming more apparent every day, Deloitte Research has come out with a timely look at the ways – especially on the consumer end – it expects the retail industry to change by 2020. It’s a great piece of research – worth reading in full – and its conclusion is that in the new environment, retailers will have to prioritize four things above all others: aligning value with values, driving sustainable consumption, going everywhere your consumers go, and taking care of your people.

Let’s take them one by one:

Aligning value with values. It’s been clear for awhile that the utility-maximizing rational actor model of the consumer is faulty, in that consumers are willing to pay more for functionally-identical goods that align well with their values, like environmental responsibility or fair trade practices. But “values” are actually even more important than just that; MLC’s research into consumer loyalty demonstrates that, by far, the biggest driver of repeat purchases and brand advocacy is value alignment and “emotional differentiation”.

We’ve created some tools to measure your company’s efforts on this front; find our which loyalty metrics matter most, and check out our Loyalty Program Effectiveness Diagnostic and our Loyalty Program ROI Calculator.

Driving sustainable consumption. Along the same lines as value alignment, retailers and other consumer-focused organizations need to think seriously about how to reduce waste in their supply and value chains. A lot of this activity will rely on business partners in functions like procurement and logistics, but marketers can take a lead role in “greening” business activity.

Check out our work on Scaling Green to find out how companies like Phillips and Timberland have done it.

Going everywhere your consumers go. Be careful with this one. Deloitte’s white paper describes this key activity as following the consumer through the informational and purchase decision chains, ensuring a “positive experience” and, presumably, a brand imprint at every stage. But MLC’s most recent research into purchase decisions indicates that simplicity, not omnipresence, is what consumers crave from brands – and that brands who don’t comply risk losing consumers to “information spirals” and indecision.

Learn more about how too much information can lead to poor brand experiences.

Taking care of your people. The Deloitte piece makes the point that the most effective brand ambassadors for your company are your employees, and that care must be taken to ensure that employees are treated well, and that the messages they’re putting into their communities and families about your brand are consistent with the larger strategy.

Learn about the best ways to motivate hourly workers in a retail setting, and how to give employees the tools to comply with brand standards.

What’s more, we’ve observed that consumers typically retain habits they form in bad times for a significant period of time after the economic situation improves. The longer this goes on, the longer consumers will remain austere.

So what’s the outlook? We don’t pretend to have a crystal ball, but I think it’s fair to say that the prognosis is mediocre at best. A number of indicators of consumer health are trending up, but others suggest some risk of problems in the mid to long term. In all, the data suggest that, at best, the consumer spending pie is growing very, very slowly, and may in fact be stagnant or shrinking.

Brands can grow in a recession or consumer spending downturn, but it’s generally zero-sum growth, coming at the expense of other brands. Making product and brand messaging as simple as possible is one way to maintain share of wallet during downturns, and we’ve also got some thoughts on resource allocation and optimization during recessions, as well as some ideas on how coupons and incentives in particular can shore up market share in bad times.

Here are three indicators that suggest consumers might be holding their own, as well as two that suggest trouble ahead:

Retail sales. Minus a slight blip last month – a blip that can largely be explained by structural issues in the auto and energy markets -  retail sales have generally been getting stronger since the official end of recession in the U.S.:

Total consumer spending. Tracking retail sales, this indicator has largely been positive since the end of the recession, almost two years ago – and is nearly back on the pre-recession trend:

Be wary of this graph, however: it includes fuel and food spending, which are taking up more wallet share.

Accelerating household deleveraging. American households are generally retreating from the high levels of debt that characterized the pre-recession years:

Decreased debt service payments mean a greater percentage of household income is available for discretionary purposes.

We’ve analyzed the good – now, we’ll take a look at the bad:

Unemployment. Here’s where the real pain lies. First, there’s the “headline” unemployment rate – the rate of adults looking for work who haven’t yet found it:

That’s more or less constant – and abnormally high, given that since mid-2009 we’ve technically been out of recession. This graph doesn’t count underemployment – people who aren’t working as many hours as they’d like, or those who would like to switch jobs, but cannot – which is significantly higher.

Finally, there’s the ratio of employed people to the rest of the population:

What do these graphs tell us? They say that the unemployment is more or less remaining constant, despite the return to slow rates of post-recession economic growth; that many people are in part-time employment situations out of necessity; and that we’re not adding new jobs fast enough to keep pace with population growth.

Food and energy prices. Competing with concerning levels of unemployment for the “nastiest economic indicator award” are rising food and energy prices in America and around the world, stemming mostly from increasing demand in emerging markets. Here’s a visualization of food and energy price increases since mid-2009 (food is in blue, fuel in red):

Food and energy prices are shrinking the share of consumer wallets available for other marketers.

All in all, these data indicate that – at least at this very moment – there’s a declining pool of money available for consumer marketers, that more individual consumers are hurting due to being un-or-underemployed, and that for all those consumers, that declining pool of money is cut into even further by higher energy and food prices.

MLC members, for more on brand growth in tough times, please consider attending one of our upcoming executive retreats. This year, they focus on the theme of decision simplicity – giving overloaded consumers a break from tough-to-understand marketing messages.

First, Clorox needed to know what makes a brand achieve great growth even when it is mature.  They first identified 10 “high-flying” brands by looking at 289 categories, and then filtered most brands (such as eliminating all who don’t have a growth rate around 3%).  Clorox then identified several attributes held by all high-flying brands, including: a single-minded growth idea, product superiority, a strong value proposition and consistent positioning.  From this filtering process, they learned that the most significant elements of execution success are committing to a strategy, having the right capabilities, and integrating all activities around a single idea.

Clorox decided to focus on the most important “high-flying” brand attribute – a single-minded growth idea.  To do this, Team High Flyer – a team trained to guide brands to becoming high-flyers – leads the brand strategy team through an intense, 4-month process to create a new branding strategy.  To do this, the team first leads the brand to understand why the brand has stalled in the past.  It uses these insights to figure out how the brand can tackle these obstacles, helping to fight “doom loops” in which a brand self-perpetuates the reasons why its growth has stagnated.

Once misconceptions about the brand’s inability to achieve high growth have been cleared, Team High Flyer starts to identify strategic alternatives by looking at the brand’s competencies and those of its competitors.  After the brand has developed a number of strong alternatives, Team High Flyer guides them through the difficult process of agreeing on one single-minded growth idea.  The most important thing about the single-minded growth strategy is that it is so differentiated and unique that the brand could fax the strategy to a competitor and not fear imitation (For example, Hidden Valley’s single-minded growth idea is that ranch dressing is a healthy snack when paired with vegetables.).   After the growth idea is selected, the team doesn’t change it until its underlying assumptions change.

Once the single-minded growth idea is selected, the team then translates it into four imperatives: brand promise, product holy grail, value proposition, and customer promise.  These four imperatives ensure that brands are differentiated, that the brand’s aspirations are aligned, that the brands are priced correctly (either a premium product at a premium price or a parity product at a discount), and that the brand will be able to influence customers in key demographics.

This strategy helped Clorox brands find success.  Clorox Bleach reversed negative growth and increased market share in just one quarter, though not without struggles: “It was an arduous process that pushed our brand to the breaking point … But, in the end, we created a strategy that is far superior to anything we’ve had in recent years and, importantly, that the entire team understands and supports,” a brand manager for Clorox said.

MLC members, for more on coaxing growth out of mature categories, check out our HighFlyer toolkit, as well as our webinar, “Drivers of Breakout Growth”.

(this is a guest post by Mandy Levenberg of Iconoculture, our sister program that tracks and analyzes consumer trends)

A recent study on cause marketing and its effectiveness has been getting some attention and begs for our response.  Recent research from the University of Michigan suggests that consumers who buy products benefiting a cause are less likely to donate directly to that cause. In addition to the sample size, 300 college students, not being wholly reflective of the general population, the conclusions are contrary to a few noteworthy studies (Cone et al) and observations we’ve seen over the last several years regarding consumers and cause. When students are on a limited budget, they may stop at the cause purchase, but generally this is not the case and certainly not with a broader consumer group. Consumers may have turned to cause buying–we refer to this as “pragmactivism”–more than in the past, but we often see this activity lead to a more holistic connection with the cause in the form of future donations, hands-on volunteering, cause ambassadorship, and much more.  From our vantage point, cause marketing—the dollars non-profits receive, the potential “halo” effect on brands, and the connections consumers make with causes—is very much alive and well.

As we move through this recession, I often get asked if price cutting is paramount and cause marketing has moved to the sidelines. We’re finding the opposite to be true. Consumers are grasping for meaning in all things, including consumption. If they are parting with their dollars, they want to feel like they are handing them over to a trusted company that shares their values. They also enjoy knowing that their purchase does double duty—ensures them a positive consumption experience and makes their community better simultaneously; pleasure with a purpose.

So, if you are considering launching a cause campaign, creating a product in the name of a cause, or exploring the space, don’t hesitate. Do your research–know your consumer and what causes resonate with them, know your competitors and what causes they are engaged in, and, if you’ve already got cause initiatives in place, re-consider your messaging hierarchy.  Consumers crave connection, authenticity, and meaning and attaching a cause to a consumption experience offers them all of that and more.

A few of our favorite examples from recent campaigns:

• Kellogg’s “Share Your Breakfast” campaign–a logical fit for the product, a cause that resonates with moms & kids, leverages consumer obsession with sharing via social media channels.
• Tom’s Shoes: One for One–for each pair of shoes purchased Toms donates one, a “you buy, we give” program that has given away over 1 million pairs of shoes (and sold that many too!)
• Pepsi Refresh–consumers get to nominate and advocate for their causes and help Pepsi determine how to distribute $20million. Pepsi involves (and engages) the consumer all along the way.

Please feel free to contact me for further discussions about best practices we’ve seen and how your company can successfully connect with causes and consumers via the right cause marketing campaign.

Here are our picks for the best and worst ads of this year’s big game. Agree/disagree? Let us know in comments.

1) Volkswagen – Darth Vader

As someone who dreamed of Force-like powers as a child (and who didn’t?) this commercial was my favorite of the night. The kid in the comically oversized Darth Vader helmet will be, I think, this year’s E-Trade baby – the iconic, lasting image of what was, overall, a pretty good crop of ads.

The commercial works, I think, because of the juxtaposition of the car and magical, supernatural abilities; the Passat shown in the commercial is a luxury model. The dramatic camerawork doesn’t hurt, either. Great job, VW!

2) Doritos – House Sitting

Hilarious, irreverent – it’s a Doritos ad, alright! Obviously, the joke is that the chip is so flavorful it’ll wake the dead – animal, plant or human. The ashes billowing from Grandpa’s back? Priceless.

3) Coca-Cola – Siege

From one of the oldest brands in America comes a bit of nerdy fun, as an army of belligerent orcs led by a fearsome fire-breathing dragon is neutered by wise bear-warriors wielding nothing but The Real Thing.

Now, there was some dissent within the team here as to whether this ad was any good; I was one of the few to argue that it was. Maybe it’s just my geeky upbringing, but not only did I love the fantasy angle, I also liked the metaphor; for many Americans, the worst of the recession isn’t over, and simple pleasures (like a Coke!) can help shift perspectives.

And now for the worst:

1) Chrysler – Imported From Detroit

I know this might be a controversial pick, but hear me out. Eminem’s second appearance of the night came in this 2-minute (!) spot from Chrsyler, ostensibly an ad for the Chrysler 200, but really an encomium to the fighting spirit of the city of Detroit. Featuring Detroit landmarks like the “Fist of a Champion” monument, the Fox Theatre, and Diego Rivera’s “Detroit Industry“, the ad works on the level of juxtaposition – art, sculpture and theatre presented next to what looks like a pretty snazzy vehicle.

Now, here’s what doesn’t work. I say this as a person who’s spent a lot of time in Michigan, who’s worked for a rival automaker that fell on nearly-as-hard times as Chrysler, and who is overall quite sympathetic to the American auto industry: the tone in this ad is emblematic of everything that’s wrong with that industry. It’s defiant, divisive and most of all presents the main value prop as “support our city”, rather than “buy our cars, because they’re the best”. There was maybe a time for this kind of advertising (2008-2009, perhaps), but it’s long past: note that Ford and GM presented positive, product-focused ads.

Also? The Rivera mural depicts a factory scene at Ford, and was commissioned by Henry Ford himself, and a number of shots feature GM’s headquarters, the Renaissance Center. Totally avoidable gaffes.

2) Sony – Android is Ready to Play

Dear Sony,

Hi. That little Android guy? It’s cute. I like how it bounces around in ads for other companies. It makes me think of an efficient, yet aesthetically pleasing robot handling the most important details of my life (contacts, calendars, etc.)

One thing that I’m not interested in seeing is this little creature having thumbs grafted onto it in a back alley operating room.

Thanks,

Corey

3) E*Trade – Tailor

I think E*Trade misunderstands what made the talking baby such a great commercial. It wasn’t just that it was a cute baby (although that helped) – it was the whole shtick, the bravura personified in the kid that made the ads so popular.

This is a phoned-in effort to squeeze the last bit of juice out of this character (note: MLC does not advocate baby-squeezing). Yes, we get it, it’s a rich baby. Time to figure out something new.

MLC members, if you’re looking to hit the next Super Bowl home run, first, check your encyclopedia – there are no home runs in football. Second, head over to our resources on driving great creative and maximizing the value of your agency relationships.

But that doesn’t mean that people stop driving, and the extra miles piled on those old cars add up. That’s why, as individual economic circumstances improve, consumers often respond by buying new vehicles. And this year, that’s just what American consumers did – auto sales are up across the board despite tighter financing and lingering unemployment.

Realizing that a recovery would bring significant increases in consumers, however, auto marketers brought their A-games in terms of advertising across the last year – and they’ve turned out one of the best crops of TV ads in years. So, here’s a look at the 5 best, as determined by the crack MLC ad review team:

1) Kia Soul – “Hamsters (featuring Black Sheep)”

What’s not to like about this one? Anthropomorphized rodents, urban atmospherics, and a great old school hip-hop vibe combine to form one of the industry’s most memorable attempts in recent memory to connect with a young audience. And am I the only one who noticed the pun in the car’s name?

All joking aside, Kia’s position as an insurgent brand in the US auto market means that it needs spots like these to break through – and this is a great one.

2) Dodge Challenger – “Freedom”

Okay, let’s get the criticism out of the way first. The ad’s soundtrack is kind of off – shouldn’t it switch to something a little more triumphant once George Washington arrives in his Challenger to scatter the redcoats? Also, isn’t this just affirming the worst stereotypes of Americans – that we don’t play fair? (The British Army, although the world’s finest in the late 18th century, certainly couldn’t deal with 3.5 L, 250 hp V6 engine-powered behemoths like these)

So, that aside, what works about this ad? Well, to start with, large numbers of people in the United States have rediscovered their passion for the Revolutionary War and three-cornered hats. On a deeper level, though, the ad delivers a soothing (although slightly tongue-in-cheek)  message to American consumers at a time when anxiety over their country’s future runs high.

3) Nissan Leaf – “Polar Bear”

Slightly smug environmental message aside, here’s a great example of an ad aimed at a cause consumer. Beautiful photography reels you in to start the ad, as the polar bear undergoes a solitary journey from his Arctic home to thank a Leaf driver, baying at gas guzzling semis and trash trucks along the way. Arresting and slightly urgent music completes the cue: the message is, whatever you’re driving now is a threat to this friendly bear.

With a price of around $33,000 and a range of 100 miles, this electric car is probably not yet a candidate for most car consumers, which makes it essential to play on the moral aspect of driving a low-impact vehicle. This one tugs at the heartstrings pretty well, I think.

4) Ford Fiesta – “Big Deal”

Competing for the same demographic as the Kia Soul, Ford unsurprisingly does a lot of what Kia did in their spot – emphasize an urban identity and cool technological features, and throw in a little whimsy to top it off. A great encapsulation of a quirky, high-tech, and affordable small car aimed at young folks.

It should be mentioned that Ford has done some great work promoting this car in the social space, and any evaluation of a traditional ad spot should have that in mind – much of the branding legwork here was done by the social effort.

5) Chevy Cruze – “Dear Civic”

It’s a little odd to think about, but one of America’s most venerable car brands, Chevrolet, finds itself squarely in the “insurgent” category in the small car market. So they’re taking aim at the incumbents; one ad aimed at the Toyota Corolla, and the other at this car, the Honda Civic.

Again, I’m struck by how this ad uses the urban setting (in this case, Chicago’s Marina City) and several of the trappings of hipster culture (an iPhone and an independent film fest make cameo appearances). And it delivers the message – it’s a car that’s gunning for the incumbents.

MLC members – how can you tell if your ad spending is effective? Here’s how Ford evaluates its marketing spend and maximizes for ROI.

As we talk to heads of Sales, Marketing and Communications about 2011, I see a swing back to handling a common enemy – this time, ongoing uncertainty.  Uncertainty isn’t terribly attractive to most, but executives seem to be accepting it as part of the new normal and are trying to figure out ways to live alongside it.  That presents a little differently depending on your role in the organization.

• In Sales for example, the problem is that deals are getting “stuck” with customers whose response to uncertainty is indecision. But it looks like most sales teams aren’t doing enough to make deals easy for customers, abandoning them prematurely in the sales cycle.

• For marketers, the challenge lies in figuring out – and then using to their advantage – changes in the way customers think about purchasing (triggered by the uncertainty customers face).  Coping mechanisms like in-the-moment comparison and peer feedback are driving psychology few companies fully understand, but must.

• Communicators are trying to help their organizations deal with uncertainty.  Specifically, as companies try to become more agile and responsive, the premium on moving information and aligning the organization increases.  But those are new-ish areas to most Communications teams.

How is uncertainty affecting you and your organization?  What are you planning to do about it?  Our research makes it clear that early movers in moments like this stand to gain disproportionately. I hope you’re one of them.

By Whitney Satin

Thinking Caps is a new series on Wide Angle, where we’ll digest an academic study on marketing and give you the top takeaways. Look for it every other Wednesday!

The ups and downs can be hard to stomach (and by that I’m referring to both the economic recovery and Brett Favre’s performance).  But one question plagues marketers regardless of the economic outlook: how do I get customers to focus on more than just price?

HBR had an interesting take in the article How to Stop Customers from Fixating on Price published earlier this year.  Authors Marco Bertini and Luc Wathieu set a familiar stage: while marketers recognize the worlds of difference between their products and those offered by competitors, that appreciation fails to trickle down to customers, who instead focus largely on price.  Marketing needs to establish a deeper connection with customers in order to prove that the product justifies the price in the first place.

Interestingly, Bertini and Wathieu suggest that how a company structures its pricing can actually go a long way as far as clarifying this value.  They outline four pricing strategies that ultimately moderate the power cost has in the final purchase decision:

• Strategy 1: Use price structure to clarify your advantage. Call attention to the value your product or service delivers rather than the cost per given unit.  When Goodyear priced its tires according to the number of miles they could last, customers were much more willing to consider paying for a premium.
• Strategy 2: Willfully overprice to stimulate curiosity. If comparable goods share a comparable price, a lone expensive standout may cause customers to take a second look.  Good ol’ human psychology predicts that customers will at least want to know what about that particular product warrants the higher price tag, opening the door for Marketing to expose customers to benefits they hadn’t previously considered.  Think Burt’s Bees: suddenly, lip balm was about social responsibility, not just preventing chapped lips.
• Strategy 3: Partition prices to highlight overlooked benefits. Breaking a price out into its component pieces can allow Marketing to explicitly call out a source of differentiation whose value was previously underappreciated.  IKEA prices its table tops and legs separately, drawing attention to the modularity of its products.
• Strategy 4: Equalize price points to crystallize personal relevance. When product options involve the same production costs, applying the same price allows customers to focus on which option best meets their needs—not the initial price.  Swatch demonstrated the effectiveness of this approach in the 1980s when, by offering its entire line at the same price, it mitigated price-based competition from Asia by making the selection of a watch a matter of self-expression.

The success of each of these tactics stems from their ability to make competition about the personal relevance products or services have to customers, something we hold as a fundamental truth at MLC.  MLC members can view our resources on negating price-based competition by highlighting unique benefits and showing that products and services help customers achieve their desired outcomes.

I’m usually intrigued with lists like these – I’m always eager to indulge in a little marketing schadenfreude. But looking at these ads, a number of them aren’t that bad. In fact, many of them do a great job of reinforcing key pieces of brand imaging and competitive differentiators.

Here are the 5 Worst Ads in America, according to Consumerist readers, and our thoughts on each:

1) Staples – “Wow! That’s a Low Price!”

Okay, so this one’s a little grating. The vocal inflection of the characters isn’t joy or excitement over Staples’ low prices, it’s actually kind of scary. But Staples sells to consumers and businesses, and they recognize a key issue: in a recession, price is the major determinant of buying decisions. With the buying power to offer market-beating prices, Staples can afford this messaging – and what better way to make it stick than have it screamed directly into the TV? In an hour, you’ll forget the grating, slightly horrifying yells of the characters – but you’ll remember the low-price message.

2) Quiznos – “Singimals”

I’m just not really sure what to say about this one. It fits in nicely with the Quiznos tradition of running quirky ads (remember these little guys?), but the cats are a little creepy. The pricing scheme of the subs sticks after viewing, but did they have to make it so weird?

3) Honda – “Mr. Opportunity Meets the Paparazzi”

I’m not sure why this ad drew the ire of Consumerist readers. Perhaps the interaction between cartoon characters and  humans is a little off-putting, but I can’t think of much else.  From where I sit, the strength of this ad lies in juxtaposition – the staid, but slightly snazzily-dressed Mr. Opportunity, contrasted with the glitz and glamour of the paparazzi and his date. This fits in nicely with Honda’s messaging around their automobiles – dependable, reliable, and practical cars with an edge of style. In a recession, that’s exactly the tone you want to strike – and Toyota and Subaru have launched similar campaigns aimed at longevity and reliability in recent months.

4) Progressive Insurance – “Flo”

I can understand why people find Flo’s mannerisms annoying, but the character is one of the longest-lived in advertising for a reason – it works. The spots match Progressive’s image of exuberantly friendly service well – no one’s more exuberantly friendly than Flo. And they echo that image while evoking, for Americans, a simpler time. Everything from Flo’s name (which would have last been popular in the middle of last century), to the set, reminiscent of a 1950’s grocery store reminds of Americans of what is remembered as a simpler, more secure time. That’s a winning message in a recession.

5) State Farm – “Pocket Agent”

I suppose it’s a little outlandish that an insurance agent would be that friendly with their customers, but I liked this ad. It’s not particularly sticky, but it does a good job of pairing the company’s new iPhone app with the personal attention of an live agent. The message? This software will make your life easier, but a real agent will always be there to help, as well. It assuages the fears of those without smartphones, as well as those who think the app will lead to a reduction in attention from their live agents.

What did you think about the Consumerist list? Are there any ads you’d add to the list?

Our sister program Iconoculture has been tracking consumer behavior in the travel sector, and several observations from this summer indicate that consumers are not quite ready to return to their free-spending vacation ways. A few examples:

• Flexitravel – the practice of scheduling travel around long weekends, camping or other low-cost alternatives to high-priced vacations – is continuing to be popular, with consumers around the world booking weekends in lake cabins rather than weeks at the beach.
• Others are choosing to eschew travel entirely. The summer 2009, the “Summer of Staycations”, may have changed leisure travel as we know it. While consumers have been exploring their own backyards in lieu of fancier trips for some time, they’re now applying the concept to cautious adventures beyond driving distance.
• According to a survey from the Adventure Travel Trade Association (ATTA), over half of respondents are interested in shorter-haul trips (no surprise there), but 70% place cultural activities at the top on their list. In other words, they’re tripping for photo albums filled with relationship and experience rather than souvenir-y spectacles.

So what does this mean for business? It’s evidence of a few value consumer value shifts. The recession forced consumers to have their fun closer to home, lowering the value of an exotic vacation; consumers realize that every place can be fun. Consumers are also embracing the peace of mind that comes from traveling with a smaller footprint. Whether exploring by bike or foot in a far-off place or traveling within a day’s drive, small-scale expeditions keep travel budget-friendly and simple, enabling consumers to connect with what matters to them, like family members and friends — or their own peace of mind.

MLC members, for more Iconoculture insights on travel, please visit this week’s insight series.

Given post-recessionary optimism about the global economy, the question may seem a little passé. However, I recently responded to a member who wanted council on this topic in advance of her annual budgeting process – and this member is not alone. In an uncertain world it would be unwise not to ask the question.

A ton of stats suggest counter-cyclical marketing investment pays off. An HBR article in 1927 tracked 200 companies’ actions during the 1923 recession and found that those that advertised the most during the downturn experienced the largest sales increase. A Buchen Advertising Agency study of recessions across the mid-20th century  showed that companies that reduced marketing spend experienced a profit slump during the recession, and continued lagging behind when the economy later picked up. The same trend was observed in the early 1990’s recession, where a survey found that firms that spent heaviest on marketing made the greatest gains in market share, and continued to make gains in market share in the recovery. For more historical depth see MLC’s Justifying Marketing Expenditures in a Down Economy.

More generally, the Council’s 2009 Executive Guidance: Avoiding Mistakes in an Economic Crisis highlights research showing that downturns radically re-shuffle the competitive landscape, and that ‘firms that make it into the top quartile during a downturn sustain their market premium for an average of three years.’

However, it is mainly large firms and market leaders that are positioned to capitalize on these opportunities. Taking the most recent recession, MLC’s benchmarks show that the typical play is to cut the marketing budget with only the largest firms bucking the trend (see graph below). Similarly, McKinsey’s 2009 Marketing Survey found that only 20% of companies planned to increase marketing investment with B2C firms and firms with more robust marketing metrics more likely to increase spend.

The rationale for boosting marketing spend is various: in uncertain economic times the consumer needs reassurance from their brands; when the competition is contracting aggressors will have strong bargaining power when buying advertising space and can secure favorable long-term deals; in a recession it is cheaper to win market share (albeit of a contracting market) through marketing than in growth periods. Enthusiastic support of this theoretical position can be found on the HBR blogspot (one post recommends that ‘in a recession, everyone should be in marketing’). As Mike Ganey of Howard, Merrell and Partners puts it ‘market leaders market their way through a recession; all other companies try to save their way through a recession.’

Fortune spends a lot of ink (or pixels, I suppose) analyzing aspects of Trader Joe’s success. It’s a good article, but what has made TJ’s such a cultural phenomenon isn’t too difficult to discern. I’d separate it into a few key buckets:

1) Take care of your people

At the large grocery store around the corner from my apartment, pay starts in the low teens per hour. Not so at Trader Joe’s, where full-time associates start between $40,000 and $60,000, and store management can earn salaries in the low six figures. The company also contributes over 15% of employees’ gross income into a retirement account.

But the benefits go beyond pay. TJ’s stores are small, and don’t require multiple layers of management. According to a study done in Los Angeles-area TJ’s stores, employees are trained in many aspects of store operation and feel empowered to make decisions – leading to a collaborative and energetic in-store culture. The results are easy to see – TJ’s has an estimated full-time turnover rate of 4%, much lower than traditional supermarkets.

2) Take care of the customer

When you take care of your people, they’re much more likely to take care of the customer – and that’s just what happens at TJ’s. The depth of the company’s customer orientation is impressive – listening to the customer is much more than a slogan. TJ’s gives no-questions-asked refunds, gives out cookies at store openings, hands out baskets to customers with their hands full, and indicates popular products with in-store signage. Store employees aren’t told the margin on their products, so placement is based on customer needs, rather than profitability. The cross-training mentioned above means that every employee knows where everything is – and will walk you there when you ask, rather than pointing. The result is a fun, casual atmosphere where shopping is enjoyable, rather than a chore.

What’s perhaps more important, though, is that TJ’s knows who its customers are – doing seriously innovative market research to determine if a given area will be open to its freewheeling gourmet ethos. Beyond the typical variables like population density and educational level, TJ’s looks at things like subscriptions to high-end cooking and culture magazines to find critical masses of foodie customers.

3) Keep it simple

What’s perhaps most notable about TJ’s is the size of the stores – typically much, much smaller than the average supermarket. Inventories reflect this: while many grocery stores stock 50,000+ SKUs, TJ’s carries around 4,000, most of which are private labels. Fewer SKUs and fewer brands means less customer effort, something our sister program, the Customer Contact Council, has found leads to better results in a call center setting.

But it also matters that parent company Aldi, which bought TJ’s in 1979, hasn’t tried to micromanage the brand or the culture and has instead let it grow organically (hah!). TJ’s corporate parents visit their US headquarters once a year.

Make no mistake – Trader Joe’s has a very favorable market condition. A major recession has left consumers cash-strapped, while concerns over health and the environment have inspired high-end eaters to embrace nutritious, organic, and locally-sourced foods. Any retailer combining the two would have succeeded in this climate, but the depth of Trader Joe’s success speaks to a serious marketing strategy executed well.

What else do you think TJ’s has done right in generating this kind of cultural cachet? What has parent company Aldi done right in making sure the brand is protected?

MLC members, for more on how your peers have managed the kinds of challenges Trader Joe’s faces, please visit our customer experience and product management topic centers.

And that is exactly where our manufacturing members find today’s economy – a late summer afternoon, with limited predictive ability as to coming market conditions. They’ve seen the sun peek through the clouds (11 straight months of sector expansion per ISM’s Report on Business) but with markedly slower growth in June’s new orders, that grey cloud seeps back into the picture. With a consumer-driven economy, manufacturers can’t be too pleased that June housing starts also dropped 5.0%, while consumer confidence hit a low not seen since August 2009.

I’ve harped on uncertainty in markets since the genesis of Wide Angle (see here and here, shameless promotion, I know), yet it continues to dominate the mind of forward-thinking B2B marketers, manufacturers in particular. Manufacturing to a high degree is based on certainty and predictability – large capital requirements force long-term assumptions that must hold true for profitability to result. Senior marketers’ assumptions as to projected customer inventory levels, market size, and overarching GDP growth rates can make or break a company.

But with uncertainty comes opportunity for those manufacturing marketers savvy enough to push forward. Just because the market halts for the occasional thunderstorm doesn’t mean the marketing discipline required to produce growth stops as well. Manufacturing has never been the sexiest of marketing industries (for better or worse), but it does provide opportunities for incredible experimentation to assist in leapfrogging the competition:

1. Utilize social media to develop deeper individual customer relationships – Too often, manufacturers internalize the business-to-business aspect of industrial marketing. Social media offers the chance to build individual advocates on a 1-to-1 basis, rallying support across the customer organization. At the core of every B2B sale is a collective group of B2C customers, all with different motivations; social media can quickly shine a light on how to use those differences to your advantage in the sale.

2. Experiment with Discovery-Driven Planning – Designed to drive certainty from uncertainty, this planning methodology enables constant assumption testing, moving forward with projects only as data collection turns known unknowns into facts. Our sister program, the Corporate Strategy Board, has published some great research from Air Products utilizing this method.

3. Refine your Insight Marketing strategy – Markets may be uncertain, but members still control their ability to teach customers new insights that link explicitly to their differentiators. Learn more about how to embed this strategy in your organization.

Perhaps one day in the not too distant future the skies will fully clear. But until then, the cloud of uncertainty will reign supreme. And I promise, no more bad metaphors in subsequent posts.

(photo courtesy of mikebaird)

One of the sharpest subversive ads of the year (a humble opinion) is available at http://www.tubgin.com/, and click on “A short, short story”.

These brands offer just a few examples of a broader trend in tapping directly into the edgier, snarkier sentiments of today’s consumer (Whitney had to tell me what snarky means).

Iconoculture—MLC’s new partner for bringing real-time consumer insights to our members—has picked up on this trend in its most recent research on “Subversive Branding.”  Iconoculture’s findings point marketers in an interesting direction: while subversive branding can breathe new life into our marketing messages, it also runs the risk of alienating consumers.

Iconoculture offers a few simple factors to consider before integrating subversion into your brand strategy:

• Category Norms: Is subversion common in your category? Is it rare? If you’re the only subversive brand in the category, that may offer an incredible opportunity to reach a niche, but it also may be a warning sign—anyone raising their hand to be the first “angry” life insurance provider?
• Target Audience: Will subversive marketing be novel or familiar to your target audience?  Will it connect with their values and attitudes? Will it pull in more consumers than it turns off?
• Consumer Involvement: Are consumers already doing subversive things with your brand? Can you embrace or build on what’s happening?  If so, it may be a sign that consumers are ready to see your brand’s dark side.

For more on subversive branding strategies, and the consumer values that are opening the door for marketers to show their dark side, MLC Members can tune into our upcoming webinar on subversive branding hosted by Iconoculture’s consumer strategist team.

By Laura Morris

Susan Wassel, PR Manager at Sharpie, launched a social media campaign with the help of a single fellow employee and now manages the project singlehandedly – with a $2,000 budget.  Her work exemplifies how your team can move forward even if you lack the resources necessary to bring on external support.

Video: Social Media on a Shoestring

Slidedeck: Social Media on a Shoestring

“Sharpie Susan’s” goal was increase brand loyalty by leveraging brand advocates they termed “bold expressionmakers,” who are Sharpie uber-users that gravitate toward new media.  To achieve this objective, Sharpie decided to showcase content from these “bold expressionmakers” that demonstrated creative ways to use Sharpie pens in daily life.

Investment:

• $1,000 for Blog Masthead
• $20 for Blog Theme
• $895 for eLancer
• Free:  monitoring tools to listen for brand mentions

Measurement:

At the time of Susan’s presentation, Sharpie measured Total Visits, RSS Subscribers, Blog Links, Google Friends, and Comments.

Here’s what Sharpie would like to measure moving forward: