The consumer protest of the summer of 2011 revealed that for all their pretensions, Israeli executives do not know the Israeli consumer. The impotence and frustration that triggered the cost-of-living protests that wracked Israel this last summer took them by complete surprise.
Bewildered and bemused, they're groping for new ways to speak to the people. For the nonce, many are nursing their perplexity underground, lying low until the storm passes or until they gain new understandings about consumers. While they lick their wounds and retrench, a large chunk of the companies' marketing activity has been postponed or aborted. Launches of new products have been canceled, events and press conferences have been downplayed and a sweeping prohibition has been imposed on interviews to the media.
At the Shiluv Millward Brown Market Research Group they say the social protest revealed the fact that local companies did not have a clear and defined profile of the Israeli customer, his characteristics, his preferences and his anxieties.
The studies, the surveys and the focus groups the companies have conducted until now tended to focus on a particular product or topic. They never produced (or tried to produce ) a comprehensive map of the customer to gain a deeper understanding of his needs.
Now this very thing has been done: Millward Brown conducted a comprehensive study, based on interviews and focus groups with representatives of all sectors of the population. The aim: to map out the issues companies should know about the new Israeli consumer of 2012. Here are some of the insights gained from the study.
Losing control in the culture of plenty
The insight: From the study it emerges that the Israeli consumer has a love-hate relationship with the culture of plenty in which he lives. He wants to consume more, yet the more he is granted this wish, the more he feels the "noose" tightening around his neck. The abundance is perceived as scary, as confusing, as necessitating endless further consumption. And at the end of the process there is always a feeling of having missed out, since the consumer has neither enough time nor enough money to enjoy the profuse offerings.
The sheer abundance creates pressure on the consumer to try everything - a task that becomes harder and more exhausting over time.
Certain consumers deal with the plenty by honing in on a number of familiar and beloved products as a way of protecting themselves from getting swept away while others are swept away into the world of technological and product innovations and lose control.
How should companies proceed? They should be less aggressive when addressing the consumer, counsels the study. They must give him the feeling that they are providing information that could be useful to him.
Companies would act wisely if they give the consumer a sense that he is not losing control after signing a contract with them, or after buying a product. Thus, for example, if a company allows the consumer to change his mind, return a product or exchange it, he will feel that the risk he is taking is smaller and he will feel more confident about purchasing the product or the service that is offered to him.
"According to the forecast, in 2012 the consumer's confidence will be undermined even further," says Israel Oleinik, the CEO and owner of Millward Brown. "Companies need to give the consumer the feeling that they are giving him control and are helping him control his expenditures. Thus, for example, mortgage banks would do wisely if they promise their clients they will not be thrown out of their homes, even if they are not working for a certain period."
He thinks he's rational. Guess again
The insight: The Israeli consumer thinks and avers that he is calculating economically but in fact he is no more than an impulsive adolescent.
In most of the focus groups, the participants said they are not tempted into paying in installments. They claimed to act in a completely rational way in their consumer decisions, both with respect to planning the purchase and in their behavior at the sales point.
Nevertheless, the participants also testified to making purchases for which they had not budgeted and not deferring gratifications even in situations of limited economic means.
When confronted with this dissonance, the participants in the survey suddenly sounded like teenagers. Even their body language took on an adolescent impulsiveness. "You only live once," seemed to be the general statement.
The researchers concluded that the Israeli consumer likes to depict himself as a "wise consumer," calculated, rational and balanced, who knows how to delay gratification, restricts himself to a budget and sticks to it. In actuality, however, his typical economic behavior is adolescent.
There is no realistic connection between the level of his income and the desired level of expenditure. How should the companies proceed? When companies address consumers, they should use expression like "you deserve" and not use imperatives like "you must" or "you need." In this way the consumer will feel he controls the situation and is not being swept up into irrational behavior. Additionally, it is worth suggesting to the consumer that he stop the race and pamper himself a bit.
He believes his 'friends', not the ads
The insight: The communications possibilities of Internet have dimmed the appeal of classical advertising in the eyes of the Israeli consumer.
The participants in the study say they rely more on friends and acquaintances on social networks and in forums for information, not on advertising. Many say social networks contributed to decisions on whether or not to purchase a product. Some said they rejected a brand on the basis of just one opinion from an authoritative acquaintance.
As for traditional advertising, the consumers who participated in the study waxed cynical. They don't believe the messages the advertisers are trying to sell, said the respondents. Efforts to create an atmosphere in classic advertising, for instance ads by the mobile phone companies, leave them clammy.
The discomfort the consumers feel is directed especially at advertisements serving organizations that suffer from a negative image to begin with, like the insurance companies.
How should the companies proceed? Consumers want suitable recompense for their time: they do not like atmosphere commercials and ads they feel are leading them astray. To grab consumers, advertisements need to be informative, like ads offering attractive deals and benefits. The consumer will also accept advertising that helps him make a purchasing decision (in this context mention was made of Bank Mizrahi-Tefahot's series of "moving Dvir" commercials ). Then there's the genre of entertaining commercials the viewer enjoys watching more than once (in this context they made favorable mention of the HOT and Yes! commercials ).
"The weight of commercials as motivators is declining to a certain extent. Today there are forums online that are satisfying the customers, and the companies have to be there and learn to influence these forums," adds Oleinik.
Preserving personal space on Facebook
The insight: Marketing on Facebook is the hot trend nowadays in Israel. But apparently the companies haven't figure out how to work in this medium.
The study indicates that while the consumer is interested in building up his own personal brand on this platform, he is hesitant about the enabling businesses to do this in his Facebook space.
The consumer's attitude towards commercial companies offering him special deals or marketing content in the social networks arena is ambivalent. On the one hand, this is an unofficial channel. Therefore the consumer does not relate to a marketing presence on Facebook as pure advertising, but rather as a means of direct access to conversing with the company and the decision-makers there. He may see it as a means of keeping up to date with special deals and events and as a means of directing complaints and requests.
The study indicates that a communications medium of this sort helps the consumer connect to the brand and feel he has influence over the decisions taken about it. On the other hand, the customer perceives marketing on Facebook as a violation of the rules of the game; this is the consumer's private arena, his intimate space in which he chooses whom to let in and with whom to share. The invasion of this space arouses in the consumer an uncomfortable feeling of invasion of his privacy.
How should the companies proceed? In contrast to television and the Internet, where banners leap out from every direction, the consumer would want to keep his Facebook page clean and free of advertisements and marketing content, or alternatively full of content he himself has chosen. Finding the right formula for communication between the marketer and the consumer is critical and the correct and well-thought-out dosage can leverage this medium. The companies should be careful not to give the consumer the sense that they are forcefully invading his space but rather that they are giving him added value.
Hostile to commercial companies
The insight: The Israeli consumer lives with a sense of injustice, be this out of a constant sense that the companies are cheating him - a suspicion based on a basic Israeli value of not "being a sucker," or out of frustration that he cannot realize his desires fully in the way it seems to him others are living, or out of a sense of little control over his life. Therefore, he tends to relate with suspicion or even hostility towards commercial companies, especially towards large ones - a feeling that erupted and was translated into practical measures in the social protest last summer.
Surprisingly, the research found that despite the complaints about the high prices, one of the Israeli consumer's effective psychological ways to assuage the internal feeling of being the victim of injustice is self-compensation by means of purchases, with the thought that "I am unfortunate so I deserve to pamper myself a bit."
How should the companies proceed? "Today more than ever, the consumer is not only angry but he also has the ability to unite with others, and he is doing this," says Oleinik. "The companies should try to minimize the hatred, increase the positive feeling towards them and restore the faith in them and in the close relationship with the consumers.
"The consumer feels that the companies are creating a dependency in him and then exploiting it by raising prices and he is very angry and frustrated by this. The participants in the study spoke a lot about their basic need for transparency on the part of the companies, about a need for security and a need for control. Companies that are smart enough to supply these needs among the consumers will be the first to increase their market share."
Coupons are no longer enough
The research identifies a slowdown in the coupon trend that burst into our lives in recent years. According to the study, coupons create in the consumer a sense of "unrealized plenty." He blames the coupons for stimulating his impulsiveness and sweeping him into purchases that are unnecessary luxuries, like going out, restaurants, vacations and body care. Another kind of dissatisfaction has to do with the lack of enough time to cash in the coupons. The consumer does not want to miss the deal, he does not want to "come out of it a sucker," and therefore he buys coupons that he does not manage to use before they expire.
How should the companies proceed? It is essential to find a formula that will create in the consumer a feeling that he is decreasing the risk. A possibility that came up in the focus groups in the study is prolonging the validity of the coupon, even in return for payment. Moreover, the consumer wants to get the feeling that the coupons are helping him and not causing him to spend money on products and services he does not really need. In this context Alona Ashkenazi, a senior researcher who led the project, notes that the participants in the study said they like coupons that come in the mail from the marketing companies, since they feel these are relevant and practical coupons and not coupons offering luxuries.
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