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Free lunch?

In a market where audience savvy has grown, can adding a free component build loyalty and entice behaviour change?

A dog sat up begging for a bone-shaped biscuit dangling from a string above itThe extraordinary thing about this global recession is not its sheer scale, or the sound of all those bubbles bursting, but its systemic connectedness. The recession is a contagion and its speed of transmission has been overwhelming. We find ourselves in a period of accelerated change (not a slow down as recessions are often dubbed).

As the governor of the Bank of England put it, the 'nice' decade (non-inflation, constant expansion) is over and now we must adjust as we enter a period of extraordinary uncertainty.

The recession has become the lens through which we must examine trends in 2009 and, as communicators, we should be looking for the opportunities that have facilitated such rapid change.

There was no internet, no mobile telephony and no social networking in previous recessions, meaning the butterfly effect was no more than a theory. Now the actions of a bank in New York do affect UK consumers instantaneously, and this has particular ramifications for audience trends. We live in a time of truly contagious communications and marketers need to use this to their benefit.

Critical conversations
Whether your target audience consists of healthcare professionals or patients, you will be facing similar issues. Information overloaded, time poor, disillusioned and wary, they turn to the one source of information they still trust – each other. People have conversations, and some of those conversations should concern you, in both senses of the word.

In a recession, when people seek to mitigate risk, this behaviour is further exacerbated.

Millions of conversations are taking place offline and online at any given time, but only a few of them really matter to your business. Only a few of them are 'critical conversations' that could affect your brand.

Research shows that 50 per cent of people who would recommend your brand, haven't done so yet. How do you activate the people having these conversations to advocate on your behalf? How do you put trust back in to the communications mix?

Our internal, bespoke research – coupled with our interpretation of other research findings – indicates that the three key trend drivers in 2009 are value, trust and 'free'.

Value
Superior value pays off during a recession. Marketing 'guru' Professor Patrick Barwise, demonstrated that the brands that consumers perceive as providing better value for money are more profitable and grow more during the recession and recovery period.

2008 and 2009 are watershed years. Audience perceptions of value have significantly changed and their behaviour has followed suit. We have seen a shift from relatively carefree to 'savvy' consumption.

When audiences learn new habits, such as automatic recourse to recommendation sites or forums, price comparison, or mass purchase sites, brands reliant on asymmetry of information will struggle. Disloyalty among all audiences is increasingly rewarded and some brands are becoming commoditised.

Accelerated and supported by technology, this value trend will create a psychological meta trend – audiences with perfect market knowledge. Value isn't just about price.

Our research into health and wellness and its manifestation as 'health esteem' shows an increasing number of audiences are allocating a larger proportion of their income to retaining a youthful appearance (by fair means or foul).

This is a value call as much as a vanity call.

Recessionary periods cause anxiety, insecurity and feelings of risk for consumers that are all strong emotional hooks for marketers and brands to explore. Research in the UK has shown that emotion-based models of communication are more effective and more likely to yield strong business results than rationality-based models. This means that emotion should be placed at the core of any communications campaign.

We know we are all going to be working for longer (especially if you thought your property was going to be your pension) and there is a workplace culture of youth over experience – partly driven by the new technologies.

People now, more than ever, need to 'stay in the game' and that means not only looking the part, but having the right mental attitude to act it too. Most are striving for a 'physical' age that tracks at least 10 years behind their chronological age. This new breed is separating itself from the binge-drinking, bling wearing, label loving masses with an almost puritanical desire to project the appearance of health and the emotional wellness that is linked to a life well-lived.

There are many ways in which brands can reframe perceptions of value in their communications.

Trust
In a market where audience savvy has grown and deference has declined, there has been a major erosion of trust in organisations. The general sentiment is that it is no longer acceptable to have our futures  determined by people we don't know and can't judge.

Again, technology has exacerbated this issue and, for the first time, it is not just industry that is being scrutinised but professionals too. Most interesting to the pharmaceutical industry is the growth of sites such as PatientsLikeMe (www.patientslikeme.com), which "empowers patients to manage their care and share information." The website states that it enables collaboration between patients, doctors, pharmaceutical companies, medical device companies, research organisations and non-profits, and that its operating costs are covered by partnerships with healthcare providers who use anonymous data from the PatientsLikeMe community to drive treatment research and improve medical care.

Not new, but more powerful than ever, communities like PatientsLikeMe present tremendous opportunities and threats to the pharmaceutical industry.

In another example of how technology is intervening in the lives of audiences and driving a new state of openness, www.23andme.com sells $399 kits that use DNA analysis technologies and web-based tools to inform customers of how markers in their genomes affect their propensity for over 90 health conditions and inherited traits. It also traces customers' genetic roots back to the origin of the human species, and allows customers all over the world to compare their genomes to those of family and friends. Customers can contribute to the company's advanced, personalised medical research by filling out online surveys for the 23andme research programme, formed in collaboration with the Parkinson's Institute.

The more audiences share information about themselves, the more they will come to expect the same kind of openness from companies. Organisations must, thus, shift communications away from 'self congratulatory' to 'trusted intermediary' by being real. Many brands command little to no respect from consumers.

Free
What does 'free' mean to you? If I offered you something for free and you didn't know me, I suspect you might decline the offer. Unfortunately the notion of 'free' has become devalued and distrusted through its misuse – audiences tend to believe that they will have to pay a price at some point in the proceedings. As such, to most people a 'free gift' is perceived as worthless these days.

But the good news is the situation is starting to change. The generation aged under 25 has come to expect things like information, entertainment, communications, news, community, software, hardware to be free. Even air travel is nearly free these days. This expectation for 'free' has reached such a pinnacle that it has enabled Google to become a media behemoth, and has forced radical changes in the music and newspaper industries. 'Free' is arguably the most powerful communication in marketing these days, and the economies of the internet its greatest enabler.

When referring to the digital economy, leading 'free' thinker, Chris Anderson, editor-in-chief of Wired and author of the highly influential Long Tail World noted, "Today we have the first ever industrial model where everything gets cheaper over time."

Because of the nature of the ever-declining costs associated with computing power it is now really possible to give things away, and the effect this can have on audiences is profound. Free inherently reduces customer risk in exploring the new or improved, and bestows competitive advantage on a business seeking to accelerate the diffusion of innovation.

Free and the pharma industry
We know 'free' can be an extremely important component of activating advocacy, which is key in launch and adoption. The pharmaceutical industry has been offering stakeholders 'free' with value for decades: facilitating information exchange and educational programmes for healthcare professionals, patient groups and individuals, thus creating advocacy networks.

But what does 'free' mean in the longer term for the healthcare sector?

In the UK, our belief that the NHS should offer treatment "free at the point of access to all" is hardwired across age groups and social classes. The rise of a parallel culture of 'free' will only reinforce this. As such, managing the UK's expanding health bill will remain a key political issue and one that citizens have a passionate response to. Governments will need to look elsewhere to support budgets and manage costs if they are to keep voters on-side.

'Free' will be key in encouraging individuals to take responsibility for their own health. Whether it is an insurance company offering cheaper premiums for those who exercise regularly, or SHAs offering cigarette quitters on state benefits extra vouchers for foods if they stay clean, 'free' will become an incentive to change behaviour; a 'nudge' from organisations looking to reward the right kind of lifestyle. Those who fail to manage their wellbeing will pay through losing out on some state rewards and face private sector penalties, such as higher prices and limited access to services.

We believe that if your communications reframe value, add trust and have a free component, you will deliver remarkable communications and remarkable communications will deliver positive results in even the toughest of economic climates.

The Author
Dominic Payling is planning director of MS&L
To comment on this article, email pm@pmlive.com

16th March 2009

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