Consumers' perception of how a business is doing

[SuzanneDIngram]

I just read about new study out by Ad-ology that demonstrates:

"More than 48% of U.S. adults believe that a lack of advertising by a retail store, bank or auto dealership during a recession indicates the business must be struggling. Likewise, a vast majority perceives businesses that continue to advertise as being competitive or committed to doing business."

(Quoted from New Ad-ology Study: Reduced Advertising During Recession Negatively Impacts Consumer Perception)

What do you think?

I know there are studies that show that companies who continue to do marketing in a down economy have far greater chance of success during the following 2-5 years (compared to those do who not do any marketing). But I think this study into consumers' preception is quite interesting.

Any thoughts?

[vangogh]

Interesting. I can't say I've ever thought about advertising or lack of advertising specifically tied to a recession, but I do think something similar when looking in the phone book. I usually assume that the businesses with ads in a phone book are doing well and those that only list their phone number aren't doing as well. I've always been more likely to call a business with an ad than without one. Part is the more info the ad can deliver, but part is the thought that the business that can afford to advertise must be doing something right.

Makes sense that companies that continue to market in the down economy do better once the economy picks up. They've kept their brand out there in front of people. Besides it should cost less to advertise when the economy is bad. Less people advertising reduces demand which reduces price.

[KristineS]

I saw that study too and I thought it was interesting. I think there's something to be said for their results. I know if I see a lot of advertising from a business and then suddenly it's gone, I wonder what happened.

I think companies that advertise are always perceived as more robust and viable than companies that don't advertise. The theory seems to be if you have money to advertise you probably have money to do everything else. Not sure if that's always true, but I believe a lot of people think that way.

[vangogh]

I've usually thought of it as if a company can afford advertising they must have money to pay for the advertising and consequently they must be doing something right to make that money. Granted none of those things have to be true. For all I know a company mortgaged their entire future to buy the one ad I see, but the connection between advertising and a successful company is still there for me.

[orion_joel]

I think the problem is that perception can often be very tainted. For example, that study may have had leading questions, and simply by mentioning recession in the questions if they did could have gained different answers to otherwise.

I think the biggest problem for businesses lies in that consumer's impressions are often wrong.

The yellow pages is a great example, recently there has been some real bad weather and at home we had two very big trees come down. We called almost every tree lopping company with a display ad in the yellow pages. and only one answered the phone. Then after searching on google we found one, who answered the phone and came out to have a look in under an hour. look back all he has is a name and number in the yellow pages. He would have got the job as well except for the way the insurance company handled things.

Now this may not and probably isn't mirrored in all areas of the yellow pages, but companies that advertise 24/7, storm cleanup you would think would at least make an effort to answer the phone at 4.30 pm in the afternoon

[vangogh]

I think the biggest problem for businesses lies in that consumer's impressions are often wrong.

I'm going to disagree, though you might have meant what I'm about to say, and if so, my bad for misinterpreting your statement. A consumer's impression of a business is never wrong for them. If you think company A provides good customer service, they do. You'll forgive small things and see those small things as the exception. By contrast if someone else sees that same company as having poor customer service, they do. Those same small things that the first person forgave, the second person sees as proof of poor service.

It's up to us as businesses to give people a favorable impression of us from before they hire or buy to long after. That's branding. You want people to think of you in a good light and have positive associations with your company. Naturally it's easiest to give that favorable impression if it's who you really are. The best way to give a favorable impression about your customer service is to actually have good customer service.

[KristineS]

I think consumers may attach different motives to a company's action that might be entirely different than what the company actually intended. So perception may have a huge impact on how consumers react to a particular move by a company. The message can get tangled, and often does.

I agree with Vangogh, businesses must manage their brands, and it must be a full time job. Business owners also need to be aware that everything impacts the brand.

[vangogh]

consumers may attach different motives to a company's action that might be entirely different than what the company actually intended.

Yep. My thought is that it's always the company's responsibility when that happens and not the customer's. The customer may have an impression of you that's completely different than who you are, but if that's the case then it's you not doing a good enough job of getting across who you are. Customer's aren't going to change, just because you want them to. You have to adapt to meet them.

[KristineS]

I think a lot of business owners also forget that everything action and word can impact the brand, even when it's not intended to do so. Say, for instance, that you claim your company is environmentally responsible. You reuse boxes. You reduce packaging, You print all your sales materials on recycled paper. Your company makes a lot of money and you get a lot of publicity and suddenly you buy a Hummer. Your environmentally friendly reputation takes a hit. Even though the car you choose to drive as your personal vehicle has nothing to do with the business, what you drive still has an impact on the message your business sends. Everything matters, even if it really doesn't seem to have any connection at all.

[vangogh]

Yep. A very large part of branding is consistency in your message and your actions. You're right that a lot of people miss how what they do impacts what you believe about what they say. Think of all the companies that claim good customer service and yet never respond to an email. Everything you do or say in public can and will affect people's perceptions of you personally and your brand.