If one were to pick an ideal profession, trend watcher might be in the top three on many people’s lists. Everyone is basically a trend watcher in one way or another, whether watching people at the local Starbucks, surfing the Web at 2 a.m., or walking through an airport terminal. To be a professional trend spotter, well, that means making yourself one. And so, as a college professor who every day gets visual input on tech, fashion, e-cigarettes, and cars, and as the parent of two teens – and that is basically 24/7/365 trend watching (and stopping) – I would of course say to any consumer company, call me, and I’ll be your trend spotter (and one with a PhD).
Now, after poking fun at the “trend industry” (well, one more jab - one of the original trend spotters, Faith Popcorn, is still out there and predicting away), I must say that one of my favorite email subscriptions - for real - is from a firm called Trendwatching.com. The June global trend briefing from the firm arrived in my inbox a few days ago. The trend of the month was “sympathetic pricing,” and I was intrigued by both the moniker that Trendwatching.com came up with for the concept and their reasoning behind it. In reading the report, I saw applications of their consumer-marketing concept that would be equally applicable in the business-to-business market and the public sector market.
In a nutshell, the company found that today’s consumers are highly cynical. Despite all the feel-good advertising campaigns designed to enhance corporate images today, spotlighting companies’ good deeds in the community and on the environmental front and corporate responses to consumers’ struggles with tough economic times and natural disasters, these PR campaigns are falling flat. As the observers at Trendwatching.com put it bluntly: “Consumers have tuned out the white noise issued by a multitude of brands on how much they care about people, society and the planet.”
And so companies are not just seeing a lack of ROI on their marketing and public relations expenditures aimed at touting their social responsibility expenditures, but on the underlying spending (and discounting) in these areas. This is no doubt a troubling trend, as the report cites that even in an era when we see so much of corporate marketing and positioning based on caring for their communities and their customers, fewer than 10 percent of U.S. consumers (and fewer than 20 percent globally) think that brands really “make a meaningful difference in people's lives.”
And so in an era of fickle consumers and companies that are realizing that “feel good” marketing may not be working nearly as well as it did in the past, what is to be done? The market observers at Trendwatching.com suggest the idea of sympathetic pricing, which they defined as: “Flexible and imaginative discounts that help ease lifestyle pain points, lend a helping hand in difficult times, or support a shared value.” They proposed three forms of sympathetic pricing and gave examples for each:
1. Painkiller Pricing: Discounts that target lifestyle pain points.
Example:Uber, the mobile app matching consumers with transportation options in an increasing number of major cities, offered discounts to consumers during brief transit strikes in both Boston (October 2013) and London (April 2014).
2. Compassionate Pricing: Discounts that offer a helping hand at a difficult time.
Example:Marks & Spencer, Tesco, Asda and Tetley are among the firms providing surplus and discounted stock to a British supermarket, the Community Shop, which opened late last year. The new store caters to less affluent British consumers, many of whom are on government assistance.
3. Purposeful Pricing: Discounts in support of a shared value or belief.
Example: A Dutch airline, Corendon, offered half price fares for anyone willing to travel to Sochi and protest the Russian government’s policies in regards to gay rights.
In all, the Trendwatching.com report presents more than a dozen examples of companies imaginatively employing the idea of sympathetic pricing today, even if the companies involved were not knowingly pursuing a marketing strategy under that heading. The report concluded by urging companies to consider how they could imaginatively use sympathetic pricing tied to specific events and triggers - even to positive lifestyle changes - in their marketing strategies. And the trend observers astutely observed that in an era of bigger and bigger data, much of it consumer-generated, the idea of brands targeting consumers having a bad day (think how companies selling everything from beer to bath salts could capitalize in that way) and rewarding those who might make small victories in their lives is not that off. Imagine, your exercise app records that you’ve walked five miles and you get a free sports drink, or your weight loss app measures that you lost a pound this week and you get a free salad or doughnut. While some may see this as scary and Big-Brother-like, marketers have indeed been moving more and more to targeted, personalized ads, and promotions - both in the store and online. Dynamic pricing has long been proposed to be a viable marketing strategy based on “pain” (Coca-Cola drew the ire of media and consumers when it proposed some years ago to tie vending machine prices for cold drinks to temperatures in the summertime).
As mentioned earlier, my take on the sympathetic pricing concept is that it need not be limited to the consumer market. Indeed, I believe that all three sympathetic pricing strategies - painkiller pricing, compassionate pricing, and purposeful pricing - have wide and immediate applicability in the B2B market. This is because corporate buyers and governmental acquisition staff members have much of the same mind frame in their professional lives as they do in their personal lives. They have the same skeptical mindset when it comes to the corporate marketing pushes that tout how green, how socially responsible, and how community-involved a seller might be. And so, as one who has been part of the growing use of reverse auctions, we know that companies both large and small will respond favorably to “the deal” - I get your best price and you get my organization’s contract. Price does sell, and thus the sympathetic pricing idea challenges those selling to the corporate and small business markets alike to use imaginative strategies to ease pain points, help out in times of need, and support their fellow businesspeople - all of which can be done both flexibly and profitably. And the concept works in selling to all levels of government as well, especially at the state and local levels. This is because each state, town, and even school or specialty district has its own unique challenges - indeed, more today than ever.
How can your company use sympathetic pricing to its advantage? I would say the next time your marketing, advertising, and PR departments get together, you should discuss this new trend and explore how to make the cynicism of consumers - and corporate/governmental buyers - work to your advantage.