The Approach in Action
The economic problems of today demonstrates the impact of appealing to consumers who are motivated by more than just achieving the lowest price. How has Apple been able to radically increase its sales and profitability, when every media article was telling us that consumers were cutting back on discretionary spending and required huge discounts to motivate them? Have you ever seen a 70% off poster at an Apple store? Similar stories exist with Lululemon, Anthropologie and Zappos – all of whom clearly appeal to NEO consumers. Conversely, how was Wal-Mart able to keep posting revenue gains when Circuit City, Bennigans and so many other companies who were offering “value” were filing for Chapter 11?
Understanding the distinction between different types of consumers is the key between success and failure. In a boom, the sheer tide of money carries everyone forward, but those who fail to learn the lessons crash against the rocks when the tide rolls back out. We are strong believers in the resolute nature of the US and Canadian people, but recognize that our economies face a long road ahead of them to reach previous levels.
If you wish to preserve or grow margins you need to understand how the people who will pay them think. If you can accept low margins and can become the lowest price provider, then traditional commodity marketing techniques can still work. If you want to stay in business, you had better learn the difference!
This has never been more important than it is right now.
