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Sunday, April 1, 2012

The Real American Consumer

A little over 20 years ago I was called in to a meeting. Agency staffers were reviewing work for an upcoming new business presentation. I was asked my opinion and said, “Two of the executions seem way too upscale for the target demographic.” The writer, took offense, and asked me to define the target. Briefly, I outlined what market and media research indicated. “Some 70% of the people who would buy this product live in households making less than $50,000 per year”. The young writer laughed in my face and said, “no one could live on that.” Trying to maintain my composure I responded that most people do. He dragged me in to see his boss who told me that something was wrong with my figures. I responded that they were not my figures and ticked off top line income estimates from the U.S. Census, Department of Labor, Merrill Lynch, Mediamark Research, Inc. and Simmons. The upscale executions were kept in the presentation and we did not get the business. I talked briefly at the pitch but my income data were not part of the slide show.

After this event, I turned my annoyance into action. I put together a presentation that I dubbed “The Real American Consumer” that tried to impress upon clients and prospects that everyone in the U.S (and now the world) does not live as all of us do. I update it every year and it holds up well.

The presentation is built on the premise that people who work in marketing, advertising, broadcasting, cable, and publishing tend to lead comfortable lives. As we get older, unless we have very bad habits or get married and divorced too often, we tend to become affluent and, a few, wealthy. Yet, as we grow in wealth, we get more detached from the people who have bought our products and gave us our pleasant lifestyles.

Each year, the Gallup organization does a survey of American opinion. And, the results almost always indicate that some 89% of Americans view themselves as middle class. That is fine but for a marketer it can be a deadly assumption. If senior executives see themselves as “everyman”, then some bad decisions are often made. Once a client rejected a creative campaign because he said that his golf buddies at the club did not like the storyboards that he presented. Another client, a fast food maven worth millions with many stores owned outright, told me that my media buy was no good because he was “not seeing the commercials.” I told him that was good as he was not the target. His response was that he was just a regular guy and he should see his spots. He did admit that sales were up nicely but felt something was wrong.

Well. The moral here is not to lose contact with your target audience and respect them as well. According to the latest government data, the median household income in the US is $51,914. Remember what a median is? Statistically, it is the 50th percentile so approximately half of America earns below that benchmark and the other half above it.

Here are some other quick facts that show how far you may be from the average American:

22% of Americans have a passport. Well, then 78% do not. I bet virtually all of you and your friends have a valid passport.

30% of Americans have no credit card

18% are completely unbanked

17% are functionally illiterate

8% live in mobile homes. In some counties, the figure is 26%

3% use a library each year even though the library has free books and movies

20% at the bottom have an effective net worth of zero. The next 20% are worth about $15,000

Can you, as a marketer, relate to all this? If you want to be effective as a marketer, you do not have to live as your customers do, but you need to know a lot about them.

Sam Walton was the most successful retailer of the 20th century. Shortly before his death and suffering from bone cancer, Mr. Sam, as he liked to be called by associates, would still fly in for every new Wal-Mart store opening. When he met with the manager just prior to the ribbon cutting, it was not uncommon for him to observe that he had visited the grocery store down the street and that Wal-Mart was charging 2 cents more for a half gallon of milk. The smile would disappear as he told the manager to get the price below the competition. Walton, by then a billionaire, was said to live on $200 a day, wear clothes sold at Wal-Mart and spent his free time tooling around Bentonville, Arkansas in an aging pickup truck. How much of that is truth or folklore is irrelevant. What he did do was constantly talk to and LISTEN to his customers. He may have been the wealthiest man on earth for a few months in the late 1980’s but he never forgot who put him there.

Several years ago, my CEO told all of us to visit one of our client’s retail locations every couple of weeks at a minimum. Few did it but I was a good soldier and always complied. Once, I entered the fast food restaurant on a Sunday, bought a cup of coffee, and sat in the back of the dining area and watched and listened. I was reading a copy of the New York Times Book Review but kept the cover page concealed. At one point, I saw a lady arrive with three children. As they were eating she raised her voice to one of the children and said, “Finish your sandwich. If you don’t, next month we are going to McDonald’s.” What a wake-up call that was for me. This was a special and expensive treat in her eyes. The next day I told a few colleagues about it. Most got the point, one’s eyes filled up, but one young fellow said, “Who cares about those people.”

Tonight when many of you open a nice bottle of cabernet or pour yourself a single malt scotch, remember who is giving you that pleasant lifestyle. They buy fast food, beer, Coke and Pepsi, cigarettes, pickup trucks, soap, razor blades, and Kraft macaroni and cheese while you grill the swordfish. Don’t lose touch with the Real American Consumer. They deserve your respect and understanding.

If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com

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