I am beginning to believe that even if the economy rebounds in a significant way this year (and after yesterday's drubbing on Wall Street??), America’s relationship with savings, deals, discounts, and coupons may be set in stone for a generation.
Our Tech Surveys indicate that, in fact, most consumers are worried less about the economy than they were last year or the year before. And yet, the discount momentum has not slowed. In fact, it has amped up as looking for deals has become a cool pursuit.
The NCH Resource Center claims that through the first six months of this year, U.S. consumers saved $2 billion dollars using coupons – an increase of more than 5% over the first half of 2010.
This suggests that even as jobs slowly come back and consumers aren’t as stressed as they were just a couple of years ago, coupon redemption volume continues to soar.
As we have consistently argued in this blog, a viable, current, and strategically sound coupon plan for local radio isn’t just a good idea – it’s essential.
But now we are seriously wondering whether the retail business mindset hasn’t been altered as well. Remember that it is just regular folks who own and manage the companies that dot your local landscape.
While they may have become addicted to the Yellow Pages, the newspaper, and even radio over these many decades, the coupon wave has struck them, too. The seductiveness of being able to track new and old business, store traffic, and the sales of highlighted merchandise is impacting the way in which they think about their own marketing strategies.
The leap of faith that traditional media have always espoused about the effectiveness of advertising may be a bit shaky in light of the direct results of couponing. This suggests that radio doesn’t just need coupon programs, but has to come up with ways for small businesses (the ones who supposedly “can’t afford to be on the radio”) to participate.
In short, local radio stations need to solve problems – not just sell spots. Today, retailers expect a reaction to their stimulus. With Groupon or Living Social or any of the other deal sites that are popping up in market after market, they can truly measure results.
Once again, the half-full view is that radio has assets that cannot be matched by Groupon. Station cumes, the use of other support platforms, live reads by influential announcers, and the ability to be on-site are all part of strategic packaging concepts that radio needs to create – not to mention the great, well-known and trusted brands that are in every local market.
Project Small Biz ought to be in the planning process at every radio station in America. It’s time for general sales managers to do more than head up sales meetings and publish rate cards. Creative, clever, effective strategies are what’s needed – and they’re needed now.
And by the way, this isn’t just a good idea to play some much-needed defense against coupon sites. Creative solutions to attracting smaller businesses to radio are the pathway to growing radio’s share of the pie which has been shrinking for several years.
It’s time to get serious about making deals.
Kudos, Fred. Well reasoned and well said. Thanks for again bringing up this important subject.
My sense is small businesses are preoccupied with the weak consumer demand. As John Bussey writes in Friday's Wall Street Journal, in some cases "their sales are so weak they can't justify taking on debt to expand operations."
Radio has the opportunity to innovate, to put imagination and creativity to work and help spark demand for local businesses. You're spot-on about what retailers want, it's measurable results, traffic and register rings.
Perhaps the biggest upside for radio today is to re-imagine the client experience and pull away from the growing herd of media sellers. Your earlier thoughts on CX set the stage. What if radio sales people became known as developers of solution sets for small businesses?
In these times of profound and dramatic change Lincoln's second annual address to Congress comes to mind...
"The dogmas of the quiet past are inadequate to the stormy present. The occasion is piled high with difficulty. As our case is new, so we must think anew and act anew. We must disenthrall ourselves and then we shall save our country."
We can do this but it will take breaking from the past, thinking and acting anew.
Posted by: David Martin | Saturday, August 06, 2011 at 08:45 AM
Dave, thanks so much for the perspective. I continue to see sales departments struggle as they call on a dwindling number of "usual suspects." Meanwhile, hundreds - if not thousands - of local businesses need marketing programs that lead to solutions. When we only had :30s and :60s, it was in fact a matter of client affordability and supply of inventory. Today, digital tool kits provide more avails, more avenues, and more channels to help small businesses succeed. But these sales aren't transactional and a "a good book" isn't going to produce results. As you note, it requires creativity and solution development - something that is all too lacking in the cubicles. Thanks again for contributing.
Posted by: Fred | Saturday, August 06, 2011 at 09:19 AM