Sometimes It’s Easier In The “Bad Times”

There’s a new marketing buzzword on the launch pad for 2009: luxury shame.

Consumers who couldn’t get enough of the good stuff as recently as a few months ago can’t get rid of it fast enough now. Profligacy is out, contrition is in. This is especially bad news for purveyors of luxury goods, but it isn’t helpful for other marketers, either.

So marketers and their agencies are scrambling to revamp strategies to reflect the dramatic and swift change in consumer sentiment. And while this is no easy task, I would argue that it’s far simpler than adjusting to changes in customer behavior that surface more slowly and are more difficult to perceive.

When the stock market crashed in 1987 and after 9/11, there was a palpable shift in attitudes toward consumption. The former marked the end of nearly a decade of decadence, and the latter punctuated the definitive end of those heady dot-com days and the onset of a recession. It doesn’t take a marketing guru to detect and react to those changes. Picking the correct reaction to a new marketing climate is another matter.

When consumers change their minds gradually and do so in ways that aren’t easily explained, many companies react too slowly, improperly, or not at all. There is no shortage of venerable brands that lost their customer connection and simply could not regain it. Companies like Bennigan’s Restaurants, America Online, Pier 1 Imports, and Circuit City are just a few we’ve watched struggle or fail outright recently for reasons that have nothing to do with the current economic crisis.

And while there are certainly many reasons for failure, it generally comes down to something that causes a company to slowly disconnect with its customers—to lose touch with its own relevance in the lives of the very people who once loved and favored it.

At least during times of crisis we can point directly to concepts like “luxury shame” and an increased interest in value as universally significant drivers for customer behavior. It’s not always so easy in the good times.