Building the Relationship with a New Dialogue

Seismic…catastrophic…epic. However we choose to describe it, the financial downturn that began in December 2007 has had such a significant impact on all of our lives that it now even has its own name. As recently reported on Bloomberg.net, the “Great Recession” has been added as a term of reference in the Associated Press Stylebook Online.¹

While the term has been used before for other economic downturns, many experts agree that this one deserves special recognition. Adding the term to the online stylebook in March 2010 and to the print edition to be published later this year is a big step toward official recognition of the term and inclusion in dictionaries. As the lexicographer Orin Hargreaves points out in the article, “It clearly is a shift in everyone’s perception of their financial and economic life.”

Although there are signs that we are now slowly moving past this period, we recognize this paradigm shift and acknowledge that it has altered the way we act as consumers. A recent report published by PricewaterhouseCoopers demonstrates just how much our shopping behavior has changed due to the economic downturn.²

“The economic shocks of the past two years have created greater urgency for retailers and their suppliers to understand and respond to the new marketplace realities—not the least of which is the fact that the recession has changed shopping behavior: 72% of all shoppers recently indicated that their shopping behavior has changed significantly or somewhat as a result of the economic environment, and only 7% have made no changes at all.”

Has our purchasing behavior changed forever? Some believe that when the recession is finally over, consumers will go right back into spending mode. But how many of the 72% will rejoin the 7% with no changes at all? Whereas before these difficult times many people viewed a “big ticket” purchase as almost an entitlement, now there’s a sense that it’s an indulgence—something to be enjoyed every now and then, but not every week.

The Great Recession has undoubtedly changed the attitudes and behaviors of consumers in many ways. But one thing has not changed at all. That is the need for us, as marketers, to respond and adapt to these new purchasing patterns and to continue to connect with existing and new consumers. Our relationships with our consumers are all still built on meaningful and relevant connections, but this time there’s a new type of dialogue.

The key today is understanding the impact on individual customers who have lived through this financial crisis. In previous recessions, this was harder to measure. With the tools we have today, we have much better ways to capture information and respond to what we have learned. With our pre-recession information already becoming out of date, we have a great opportunity to gain valuable insights and apply new marketing strategies.

So, what should we do with it?

• Listen to what our customers are saying and create a way for them to participate in a two-way dialogue.
• Leverage these new opportunities to capture the information that consumers are willing to provide on how to improve our products and services for them.
• Append this data to enlarge our customers’ profiles, which will allow us to engage them on a deeper level.
• Build a new and improved relationship and continue to enhance this into a long-lasting partnership.
• Treat product development as a collaboration.
• Communicate on a one-to-one basis with our customers, now that we know what they want.
• Use new channels as they emerge to connect with our customers in a way that lets them know we are responding specifically to their individual needs.

Easy enough, right? Customer Relationship Management (CRM) experts have been using technology to organize and automate business strategies for years. The difference today is that social media has entered the picture and is here to stay as Social CRM.

As an extension of traditional CRM and not a replacement for it, Social CRM can be described as a collaborative conversation between a brand and the customer in which social media channels offer the opportunity for mutually beneficial gain. Networks, blogs, and online communities, etc., give the consumer a voice in the marketplace to share opinions and experiences about companies, products, and services, while the company gains valuable feedback and insight.

As social media is frequently un-moderated, individuals can truly speak their minds about a product or brand, both good and bad. Loved the most recent Toy Story film? Post a User Review on Yahoo! Movies. Don’t like your new digital camera? Tell everyone about it on Twitter. Like it or not, organizations that ignore conversations about themselves or their products are doing so at their peril.

Although Social CRM is still relatively in its infancy, there is no doubt that companies clearly recognize the power of social media channels to engage consumers, strengthen relationships, and ultimately drive revenue. As a result, firms are increasingly looking for ways to become part of the dialogue and integrate Social CRM into their marketing strategies. To dig deeper into the topic, please read “Social CRM: What Is It and Why Should You Care?”

As we continue to react to the current financial and economic crisis and the momentous changes it has brought about in consumer behavior, it is important to remember that the relationship with each customer is a continuous cycle. As our customers evolve over time and pass through several life stages, the relationship cycle evolves, too. The need to respond and adapt in new and more authentic ways will continue to progress even further.

Developing a long-lasting relationship is not just about capturing customer preferences at a certain stage within a relationship. It’s about creating a dialogue with customers individually based on a deep understanding of their changing preferences during their lifetimes. We need to keep changing with them—however and whenever they do.

If we continue to adapt to the consumers’ wants, needs, reactions, and behavior, our businesses, products, and brands will continue to flourish and thrive far into the future.

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¹ “Great Recession” Gets Recognition as Entry in AP Stylebook,
Courtney Schlisserman, Bloomberg.net, Feb. 23, 2010,
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=ayojB2KWQG4k

² “The New Consumer Behavior Paradigm: Permanent or Fleeting?”
PricewaterhouseCoopers LLP and Kantar Retail, March 2010.