Charter puts bad economy to good use
EmptyRecession fears and high gas prices generally are seen as holding back consumer spending these days. But cable operator Charter Communications has referenced the tough economy in a special marketing offer that launched in May — and with some success.
Consumers signing up online for additional Charter services — from digital TV and broadband to telephony — get gasoline cards worth $25, $50 or even $100 depending on how many services they add.
Charter senior vp consumer marketing Barbara Hedges said the company controlled by Paul Allen has long used gift-card offers for people who sign up for services online, but this one has been particularly successful. "We have seen an increase in our conversion rate online and have seen more people going for gift cards move to the gas card," she said.
Since the gas promo's launch, Charter has seen a conversion-rate increase of up to 27% compared with the usual online conversion average, Hedges said without disclosing additional details.
Charter is in good company with its recession marketing approach as corporate America has referenced the current economic blues in messages for cars, retailers and other industries.
Beyond Charter, though, media and entertainment companies don't use such promotions in a broad way, likely because of their reputation for having fairly recession-resistant products.
"Traditionally, certain industries — film, gambling, alcohol — tend to fare better in recessions," Bentley College assistant professor of strategy Scott Latham said. "The intuitive thought is they allow for escape; the research supports such a view."
Experts said referencing economic pressures in marketing and ad messages can be successful if done right.
"The underlying message is that we feel your pain, and this product/service will be kind to your wallet, provide you good value," marketing consultant Nan Andrews Amish said.
Benjamin Carlson, chief strategy officer at ad agency Bradley and Montgomery, has been working on a new campaign for Microsoft that also is a reaction to the economy.
"By offering tips and suggestions for how small businesses can navigate a weak economy, we will be able to drive traffic, support a key audience and boost sales" of select Microsoft products, he said. "Campaigns that offer alternatives that help consumers respond to new financial pressures can help advertisers advance in a down economy."
Latham cites research showing that companies often lose about one-fifth of their customers in times of economic decline.
"In a recession, people change their behavior" due to economic pressures, he said. "And after it ends, they don't come back." (partialdiff)