This article originally appeared in the December 2020 issue of WQP as "A Time of Transformation"
As we move into 2021, the way we market will be different since the way people behave has changed. There will be a time when we no longer refer to customer behavior as the “new normal.” It will become the way we do business. Let us review some of the things we have learned during the COVID-19 pandemic. For many businesses in the water treatment field, the pandemic necessitated many changes, including:
- Transformation in media consumption;
- Importance of customer retention;
- Heavy reliance on technology;
- Loss of home shows to generate leads;
- Fewer home visits;
- Different staffing patterns;
- New types of credit options; and
- Increased concern with fraud, both cyber and business.
Transformation in Media Consumption
A significant proportion of the world’s population has been under some form of lockdown to curtail the spread of COVID-19. Because of that, we are consuming more media to keep us informed and entertained. This has created an opportunity for media companies to engage a captive audience and for businesses to market their products.
We have seen an uptick in direct mail response. People have been home and are reading and acting on their mail. More businesses are using mail to drive people to their websites. Direct mail continues to provide high ROI. It is an excellent way for businesses to stand out and be noticed.
People are attached to their mobile phones for updates and information. Digital display advertising has taken off dramatically. New companies have emerged with different kinds of digital marketing platforms that offer marketers a wide range of marketing options. This has given advertisers new options and has made the process more affordable.
Some of the new trends in digital display include addressable geo-fencing and competitive marketing. Companies in the water quality industry have done well with both. Pricing typically ranges between $3.50 to $15 per thousand impressions. The pricing varies depending on the volume of impressions purchased and the types of targeting tactics used.
There are also opportunities to market on social media, including Facebook and Instagram. Facebook is not just for posting pictures of cute puppies. If you have a large Facebook following, this may be a good channel for your advertising. Facebook advertising generally costs between $4 and $15 per thousand impressions. All of these digital marketing efforts are great for brand awareness. You can also generate solid leads with digital marketing. Remember that if you want people to click on your ads, you need to provide a meaningful call to action.
We all know that it costs less to keep a customer than to acquire a new one. The pandemic has shown us how important customer retention has become. With that in mind for 2021, businesses need to set retention goals, not just sales goals. The goal is to protect your market share. Consider developing a relationship building plan that encourages and fosters virtual relationships. For example, many people have become comfortable with Zoom. You can schedule “virtual checkups” with your customers.
Be proactive. Think of how you can create benefits for your customers. For example, look at your infrastructure. How are you handling incoming calls? Think an upgraded customer call center with the technology that lets TSRs get a holistic picture of a customer. This way they can not only answer questions but can cross sell and up sell them on new products.
Technology separates the most successful businesses from those that are just making do. This goes for the technology that drives your business back end as well as the newest apps and advances that are forward facing. We know that the patterns of customer behavior have changed. More activity will take place online. This includes shopping and socializing, as well as virtual working environments, meetings and recruitment. For water treatment businesses, this may also become the new home visit.
In 2021, we will see more “as-a-service.” These are services that we need to live. They work through cloud-based, on-demand platforms. It is the reason why more advanced technology is a possibility for just about any business, regardless of their size or budget. Thanks to cloud offerings businesses in all fields can deploy cutting-edge technology with little up front investment in tools, equipment or specialized people. In the water treatment industry, many dealers are offering their customers cloud-based remote monitoring services. These services alert users to problems or prompt salt re-orders. These are very marketable.
We are not going to see home shows coming back until the second half of 2021. That means that those dealerships that relied on home shows for their leads must continue finding leads elsewhere. Trigger marketing continues to provide dealers with their most cost-effective prospects. Triggers include life-changing events like a home purchase, the birth of a new baby, a new marriage, a divorce. These events force people to buy. That is why they are so effective.
Year-after-year new homeowners continue to be the #1 market for new reverse osmosis (RO) sales. However, in 2021, businesses can reach new homeowners in a different way than ever before. In 2021, the new homeowner list takes on a digital signature. This can be done in conjunction with mail and phone or even as a standalone campaign. This utilizes the new technology of addressable geofencing. Since these new cloud-based platforms have dropped the cost for these campaigns, these digital campaigns are now affordable for most dealerships. With addressable geo-fencing, you are reaching the same new homeowners digitally that you may be mailing or calling. This way you are maximizing your outreach to the new homeowners on your list. By reaching them in another way, you are increasing your brand recognition and chance for response.
Another new trend is competitive marketing. In this case, businesses can show their digital ads to people in competitive businesses. For example, the 2019 WQA Consumer Opinion Study showed that 33% of water filtration buyers purchased their units at home improvement stores while 8% purchased from local dealers. Consider that you can serve ads to people who are walking out of the Lowes or Home Depot in your area. Since these programs have a fairly low cost per impression, this might be a new, unique way to expose dealerships to new prospects. As with all digital ads, the goal is to drive people to the website.
Marketing Credit Options
In the WQA Consumer Opinion Study, 58% of consumers felt that a water filtration system was a luxury. When dollars are an issue, businesses that offer credit options can counter that kind of objection. In the past, there have been two different ways to market credit options. These are using pre-screened credit data or using modeled credit data. Pre-screened credit data comes directly from the credit bureaus, such as Equifax or Trans Union. Dealers who use pre-screened data need to print very specific disclaimers on their marketing material. In addition, they are required to offer that credit when people respond. Pre-screened credit data is costly and often dealers need to jump through hoops to get approvals.
With modeled credit data, there are no such restrictions. That kind of data is also called “invitation to apply.” In other words, people are invited to apply for the credit. It is not a given. The lists are not expensive and dealers can overlay modeled credit on their other criteria. That is why most dealers use modeled credit to qualify their prospects.
A new form of credit has emerged as a result of the pandemic. These are buy now/pay later programs that are run through a whole host of new companies. These include companies like Affirm, QuadPay, Klarna, Sezzle, and AfterPay. Even PayPal is now offering this type of program. They call it Pay in 4. In this case, the consumer can make their purchase through PayPal and pay in four interest-free installments. The group most likely to use these Buy Now / Pay Later services is the Millennial cohort, age 35 to 44. They use these Buy Now / Pay Later programs to avoid paying interest charges. This way they can buy something today that is not in their budget. Like a water filter.
The bottom line here is that customers want options. Maybe it is time to market credit as part of your offer. In any kind of marketing, when you overcome people’s objections before they can make them, you are ahead of the game. I am optimistic that 2021 will be a year of growth and business success. Now that we have adapted to the new normal of 2020, it is time to move forward and make it work.