The most-talked-about economic downturn of all time may be upon us — or not, depending on the day. Consumers keep spending despite high inflation, and the labor market is strong despite high-profile layoffs. As investors flock towards bonds and other markers of certainty, marketers should do the opposite and embrace the unproven.
Consumers are not behaving the way economic models say they should. They didn’t spend to expectation in December, but opened up their wallets more than usual in January. Core personal consumption inflation paced hot in January, but consumer sentiment was up in February, with Michigan’s Consumer Sentiment hitting a 13-month high. When consumers are acting weird, marketers need to open their minds to new markets.
Are you missing new segments because they don’t look like your core customer?
Like media consumption, and everything that requires choice, buying stuff is becoming increasingly individualistic. Marketers that have spent lots of time focusing on the perfect consumer profile should constantly check on who their customer is this month. Middle-class consumers, still with some healthy pandemic savings, are splurging on certain luxuries like travel. The Wall Street Journal is calling our current state a “Richsession” as assets drop and consumers who make more than $100K trade Whole Foods for Walmart groceries.
While machine learning has plenty of biases, PowerPoints of well-defined personas are not one of them. Machine learning and AI help us find lookalikes we might not consider. Testing new target demography like income can yield surprisingly positive results.
Are you looking at outsized opportunity in certain geos?
If pandemic marketing taught us anything, it’s that “national” marketing will have different responses based on local externalities. Sales ebb and flow came in regional waves. However, sales are a lagging indicator of marketing, and getting ahead of a local opportunity can require a crystal ball.
But sometimes the fish we are catching is more of a reflection of the pond we’re in than the product fit. Are there any places that have been less likely to hear about you because of your efforts or media mix? If so, there’s no better time to try a new geo or channel.
When economic activity is pretty unpredictable, personas can mislead us. “Frugal Fran” may have just dropped $5,000 on a luxury vacation and “Mover & Shaker Michelle” is buying private-label groceries. Let’s test as many new opportunities as we can.