With US inflation at a 26-year high and no end in sight, the economy is setting off alarms for businesses and consumers. Both have to be more mindful of how and where they invest their dollars. Most everyone is thinking twice before going to the lake, driving across town to spend time with friends or family, or even buying groceries at the supermarket. All aspects of our lives have been altered due to the rising cost of fuel.
This economic crunch gives businesses two paths to follow:
Pinch those Pennies - The penny-pinching company shovels all the money it can into savings, hoping they can ride out the downtimes and live the good life again soon. These companies cut back on all marketing dollars and slow the efforts put forth to grow their business until the economy stabilizes. The majority of companies that will use this tatic are larger companies or those that have a large base of returning customers.
Capitalize and Innovate - However, the greatest rewards await the company that decides to capitalize on new, innovative ways to reach their customers. These leaders have the vision and focus to build a customer loyalty base by capturing a percentage of the penny-pincher's audience.
The Internet has given the latter company a distinct advantage by reaching audiences at their leisure. It's available 24 hours a day and 7 days a week. With everything from groceries to shopping at your favorite stores, it's no wonder consumers are shopping online instead of burning up gas on the way to brick and mortar buildings. According to Neilson Research, the number of people using the Internet jumped from 9% in June/July of 2007 to 15% in December of 2007 as a result of rising costs.
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Impact of Higher Gas Prices on Consumer Spending and Driving Habits (% of respondents)
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|
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June/July '05
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June/July '06
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June/July '07
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Dec '07
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|
Combine errands/trips
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61%
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68%
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68%
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70%
|
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Eat out less
|
31
|
39
|
38
|
41
|
|
Do more at home
|
30
|
39
|
39
|
39
|
|
Reduce spending a little
|
26
|
33
|
29
|
31
|
|
Reduce spending a lot
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10
|
15
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16
|
18
|
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Shop more on the Internet
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5
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9
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9
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15
|
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Shop more at supercenters
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22
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26
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23
|
27
|
|
Switch to lower priced gas stations
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30
|
31
|
26
|
26
|
|
Use more coupons
|
20
|
24
|
21
|
25
|
|
Buy less expensive grocery brands
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17
|
22
|
19
|
23
|
|
Use lower grade gas
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16
|
18
|
14
|
15
|
|
Source: Nielsen Homescan Survey, December 2007
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As more people use the Internet for their shopping, businesses have to be ready to provide an experience that will keep customers coming back. The performance of your website compared to the other competitors' sites should be a key focus in your business's marketing strategy. Here are a few questions to ask yourself to determine if your website is creating a superior experience:
- Are the prices of your products or services competitive?
- Can people find enough information to know if you are what they are looking for?
- Can people find your site on the search engines?
- Do you update your site through a blog or other type of news feature?
- Does your site portray the type of product/service you provide? If you aren't sure, surf the Internet for other sites in and related to your industry.
If you would like to hear more about how to compete successfully online please contact one of our Internet Consultants and start building your online identity today!
Posted on
Wednesday, May 21, 2008
by Justin Boeckman