Financial worries causing a decline in consumer WOM
Despite an explosion in consumer conversation technology, Americans have cut back substantially since 2008 on the opinions they share by word-of-mouth (WOM) about companies and their offerings, according to research from Cincinnati loyalty marketing company Colloquy. Fifty-eight percent of respondents said they often have conversations with family, friends and co-workers about products and services they’ve used. That’s down from 73 percent in 2008.
Additionally, 57 percent of respondents said they often recommend products and services to others, compared to 75 percent in 2008 - a 24 percent decline. The reduction in WOM activity can’t be attributed to a shortage of ways for WOM views to spread. There are face-to-face conversations, landlines, cell phones, e-mail, instant messaging, texting, blogs, micro-blogs like Twitter, review sites and, of course, Facebook.
The tough economy over the last two years may be to blame for the dampened willingness to engage in brand WOM. For example, of respondents who reported their households are doing better economically this year than last, 71 percent said they often have conversations with others about the products and services they use. That’s very similar to what Colloquy found two years ago, before the recession became the meltdown. Yet, among those who now see themselves as worse off, just 56 percent reported having brand conversations and 55 percent said they make product recommendations. For more information visit www.colloquy.com.
Discount airlines find favor in the eyes of flyers
US Airways scored the worst of 10 major airlines while discount airlines Southwest Airlines Co. and JetBlue Airways topped the ratings on comfort and extra fees in a customer survey conducted by Consumer Reports, Yonkers, N.Y. Uncomfortable seats and excessive fees are the top gripes of air travelers and a reason many said they are flying less.
US Airways was at the bottom based on responses from 14,861 Consumer Reports subscribers taken between January 2010 and January 2011. The survey covered 29,720 domestic round-trip flights. The 10 airlines were scored based on overall satisfaction, check-in ease, cabin-crew service, cabin cleanliness, baggage handling, seating comfort and in-flight entertainment.
Consumer Reports also asked questions about charging fees for checked bags, choice seats and pillows and blankets. Southwest and JetBlue had the best scores for overall satisfaction. Southwest was the only airline to receive top marks for check-in ease and the cabin-crew service. Passengers also gave Southwest high marks for cabin cleanliness and baggage handling. The survey was conducted before Southwest’s problems in April 2011 with cracks in several of its Boeing 737 planes.
JetBlue was the only airline to earn top scores for in-flight entertainment - its seat-back television screens offer passengers 36 channels. Eight of the 10 major airlines received low marks for seat comfort. US Airways ranked last in its overall score, the same unenviable spot it held in Consumer Reports’ last airline report in 2007. Survey respondents gave US Airways the worst marks of any airline for cabin-crew service.
The proliferation of added fees at, or after, check-in by many carriers contributes to passengers’ low opinion of flying and even to their decision of whether to fly at all. Forty percent said they were flying less and cited increased fees as the major reason - more than flight delays, poor service or any other reason.
Low-cost airlines took the five top spots, while traditional large network airlines ranked at the bottom of the Consumer Reports rankings. Airlines were scored on a zero-to-100 scale: Southwest - 87; JetBlue - 84; Alaska - 79; Frontier - 78; AirTran - 74; Continental - 72; American - 65; Delta - 64; United - 63; and US Airways - 61. For more information visit www.consumerreports.org.
Sacrifice: What are high gas prices costing Americans?
While gas prices have dropped a bit from their late-spring highs, the year-long climb in fuel costs has Americans hunting for ways to compensate for the rise by making cuts in other areas of their household budgets. On the chopping block, in order of likelihood, are meals at restaurants; new clothes and shoes; summer driving vacations; and movies and concerts, according to survey findings from Encino, Calif., research company uSamp.
The findings reflect widespread anxiety about where pump prices are and where they may be headed. Ninety-five percent of respondents reported that they are very or somewhat concerned with rising gas prices. And they don’t see price increases ending anytime soon. Fifty-five percent of respondents expect fuel prices to rise more than 50 cents; 23 percent anticipate a jump of 30-50 cents; and 14 percent predict an increase of 10-30 cents. Only 8 percent think prices will level off or decline.
When asked how they’ll make up for this hit to the family budget, respondents were clear: A substantial majority said they are willing to cut their expenses on various types of discretionary spending. Cutbacks are most likely to affect eating meals out, with 59 percent saying they would cook at home more. Half of those surveyed said they would delay purchases of new clothes or shoes. Nearly half (48 percent) are rethinking summer vacation plans to hit the highways. Also up for reconsideration: attendance at movies and concerts (45 percent); charitable contributions (38 percent); and morning coffees out (30 percent).
At the same time, to make up for the increased cost of gasoline, respondents don’t intend to sacrifice expenditures that they view as necessities or part of long-term goals. Less than 15 percent said they plan to reduce spending on groceries, insurance premiums or retirement fund contributions.
The gas price spike is forcing Americans to reexamine their transportation options as well. In addition to the nearly 70 percent who plan to limit car trips, a quarter of survey respondents are now considering carpooling; 23 percent are looking at getting a more fuel-efficient vehicle; 20 percent are thinking about taking mass transit; and 15 percent may buy a hybrid or electric vehicle. Eighteen percent have fingers crossed as they wait out the current trend and hope for a return to 2010 prices.
When it comes to making sacrifices, age matters. By a wide margin, respondents 55+ are least likely to curtail spending on items deemed discretionary and essential. In every category except charitable contributions, seniors indicated significant reluctance to change their behavior; nearly a quarter selected “none of the above.” For more information visit www.usamp.com.
Consumers realistic about aging but still try to fight it
While the massive anti-aging industry provides a ray of hope for some consumers, many have a practical outlook on the realities of growing older. Nearly 70 percent of consumers believe how you age is mostly genetic and external products are more hope than help, according to data from Chicago research company Mintel.
Additionally, eight in 10 consumers think diet and exercise are the most important factors associated with aging skin and 78 percent say using sunscreen is the real key to preventing visible signs of aging. While many consumers say aging is controlled by diet, exercise and genetics 69 percent also report that the earlier you start using age prevention remedies, the better off you are.
“There’s a sizable gap between opinion and practice,” says Kat Fay, senior beauty analyst, Mintel. “While there are no guarantees when it comes to anti-aging skincare purchases, many women buy the products anyway with the hope of achieving visible results. They adopt the ‘it’s better to try something than do nothing’ approach.”
The $832 million anti-aging skincare market has experienced decelerated growth in the past year but sales are expected to increase 46 percent in current prices from 2010-15. It seems even when times are tough, women are still reluctant to cut back on their favorite anti-aging and beauty products.
As it stands, just 24 percent of consumers report using anti-aging skincare products. Another 21 percent have used wrinkle-reducing facial skincare products in the past year and 18 percent report using skin-rejuvenating products. Meanwhile, 39 percent of consumers who are concerned with aging have not taken any action to prevent or reverse the signs of aging. For consumers who are concerned about aging, the entire face is the biggest concern (48 percent) followed by the eye area (41 percent), the stomach (40 percent) and the neck (31 percent). For more information visit www.mintel.com.
Green automotive concerns outweigh potential savings at the pump
High gas prices haven’t translated into good news for environmentally-friendly/friendlier vehicles, according to Westlake Village, Calif., research company J.D. Power and Associates’ 2011 U.S. Green Automotive Study. Despite a rapid increase in the number of alternative powertrain vehicle models projected for the next several years, automakers will be fighting over the relatively few consumers who are willing to drive green. Growth of alternative powertrain vehicles sales are expected to be limited by consumer concerns about costs as well as functionality, the study says.
The study examines attitudes of U.S. consumers toward four primary alternative powertrain technologies: hybrid electric vehicles; clean diesel engines; plug-in hybrid electric vehicles; and battery electric vehicles.
While consumers often cite saving money on fuel as the primary benefit of owning an alternative powertrain vehicle, the reality for many is that the initial cost of these vehicles is too high, even as fuel prices in the U.S. approach record levels. Reduced expenditure on fuel is the predominant benefit cited by considerers for each of the primary alternative powertrain technologies. Although the environmental benefits of these vehicles are recognized, they are mentioned far less frequently than saving money on fuel. For example, 75 percent of consumers who indicate they would consider a hybrid electric vehicle cite lower fuel costs as a main benefit. In contrast only 50 percent cite “better for the environment” as a main benefit of these vehicles.
Consumers who are not considering an alternative powertrain vehicle also recognize the fuel-cost savings these vehicles can offer. However, they cite significant perceived or actual impediments to ownership in addition to purchase price, including driving range, increased maintenance costs and compromised vehicle performance. These consumers are far more likely to switch into a more fuel-efficient vehicle powered by a traditional internal combustion engine than an alternative powertrain vehicle.
Although there are also significant price premiums for battery electric vehicles, functional concerns are more likely to limit consideration rates for this powertrain. Driving range and the availability of charging sites away from home are the two concerns cited most often by those not considering this powertrain. This “range anxiety” contributes to the lowest consideration levels of the primary alternative powertrain technologies.
For clean diesel engines, fuel prices and availability - factors largely out of the control of vehicle manufacturers - have long impeded acceptance of the technology. Furthermore, negative perceptions of older diesel-powered vehicles continue to affect perceptions of clean diesel vehicles, as concerns about emissions and exhaust odor are mentioned frequently. For more information visit www.jdpower.com.
Dr. Mom uses social technology to gather, share information
Moms are taking on more responsibilities than they ever have, including health-related and caregiving roles. They need immediate solutions from trusted sources and they are turning to online social mediums to connect with family, close friends and other moms. Technology that connects friends is a top choice for moms seeking health-related information, according to lucid marketing, an Allentown, N.J., marketing agency.
As part of her caregiver role, Mom is using the expanding online community to talk, share and learn. For moms who share health information often, e-mail and Facebook are their top choices, at 84 percent and 69 percent, respectively.
Moms who share health information are sharing their knowledge and opinions about products and services with family, friends and other parents. These moms also are at the center of the technological growth that continues to transform society, which means they are connecting with the world outside close friends and family - a global community of tech-savvy moms who also are ready to share and listen. E-mail (83 percent) and Facebook (76 percent) are also the places where they most often hear about the new things. Only 65 percent choose television. For more information visit www.momreports.com.