Texas Outperforms US Economy

The recently-released 2010 Census results echoed our regular message that Texas continues to outperform the broader U.S. economy. The April 1 head count revealed that the state’s population leapt by more than 4 million in the last decade to 25.1 million residents. Texas added more citizens than any other state. And the state accounted for its biggest share ever –15.7 percent—of U.S. inter-census population growth. To be sure, the state still trailed almost 12 million behind California in total population. But, its strong gain narrowed the gap by almost a million bodies over the past decade.

The state’s population growth did dip by roughly two percentage points—to 20.6 percent—from the pace in the 1990s (see chart). But in percentage terms, its gain was the fifth strongest among the 50 states. Texas grew 2.5 times faster than the rest of the nation. Even more impressive, it expanded fifty percent faster than the South and the West (excluding Texas). These two regions are the fastest growing in the nation as they benefit from the continuing influx of snowbirds and migrants.

Population growth provides a building block for economic growth. It delivers such growth, however, only when this

This solid hiring has continued since the census was taken in April. In the seven months ended November Texas employers added another 120,000 jobs—or roughly one in every three jobs added nationwide. The District of Columbia (2.2 percent) and New Hampshire (1.6 percent) managed to beat Texas’ 1.2 percent job gain. But none of the other five largest states even managed meaningful job growth; two states even saw payrolls shrink further.

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Texas’ relatively robust hiring helped to fuel a 42 percent gain in the state’s inflation-adjusted personal income between the 2000 and the 2010 Census. Only four states bested that gain, while national personal income advanced only about half as much (23 percent) in the period. The upshot was that Texas climbed four slots in the state per capita income rankings over the past 10 years—from 28^{th to 24th}people power is converted into jobs and thus, into spending power. Texas has managed this transition reasonably well. As with population, Texas created more jobs—941,000—in the 10-year census interval than any other state. Even in percentage terms, the state’s job creation trailed only five other substantially smaller states. Among the other five largest states, only Florida managed to expand jobs over the decade, and only by one quarter as much as Texas employment grew.

Smart Phones May Make for Smarter Shopping, According to Survey

Consumers see smart phones as future personal, coupon-clipping shopper assistants, a global survey released recently by Accenture found. According to the survey, 79% of smart phone users would find it useful to download money-off coupons to their phones, and 73% of those shoppers would be receptive to being pinged with instant money-off coupons as they passed by an item in a store.

It may become the new way for marketers who didn't make the kitchen table shopping list to reach shoppers at the shelf. "Smart phones will permanently change the relationship between the store and the shopper," stated Janet Hoffman, managing director of Accenture's retail practice. "Today’s tech-savvy consumer wants a seamless shopping experience across store, mobile or online at a time that suits (him or her). Ultimately, this trend will lead to a new definition of the store; purpose, place and size are all up for debate. Already we are seeing some shoppers treating stores more like a showroom to test products and then making their purchase online."

The results of the survey indicated that smart phone technology is changing the relationship between customers and retailers. Many smart phone users said that they preferred using their mobile device rather than interacting with a store employee for simple tasks. According to the survey, 73% favored using their smart phone to handle simple tasks compared with 15% who favored interaction with an employee. Similarly, 71% favored using their smart phone to identify a store with a desired item in stock, while 17% would have preferred to get that information by speaking to an employee.

Almost half (48%) of conventional cell phone users planned to buy a smart phone in the next 12 months, the survey found.

Privacy, however, remained a key concern of consumers and could have a negative impact on the growing use of smart phones for shopping. More than half of respondents (54%) worried that using smart phones would erode their privacy. Among the other smart phone shopping concerns voiced, 59% of respondents feared losing the personal touch from store employees and 39% believed that products would get more expensive.

"The greater use of smart phones for shopping creates opportunities and challenges for retailers in equal measure," Hoffman said. "Companies need to use all of their customer information to better understand how and when their customers want to engage with them, ask them questions or just check some basic product details. Only then can they deliver a personalized and enjoyable experience while lessening the risk of alienating customers through unwanted approaches."

According to Andy Zimmerman, global managing director of mobility services at Accenture, these survey results are an early indicator that mobile applications will transform how businesses compete with one another and interact with their customers. "Companies that successfully integrate the location-based services, commerce, payment and other capabilities of the smart phone into their traditional businesses stand to gain significant competitive advantage over the coming years," he said.

Among the survey findings:

• 69% of smart phone users are aware of smart phone applications from large retailers, and 48% have downloaded at least one application.
• 90% of consumers who have downloaded an application from a large retailer found it "very useful" or "useful."
• 56% believed smart phones will make the shopping experience more enjoyable.

14 Million in 2011? It Could Happen

Figure on a slow and steady recovery in U.S. auto sales next year -- a rise of about 10 percent, according to the consensus of analysts surveyed by Automotive News. But one outlier predicts a much bigger jump in 2011 and offers some compelling data to back it up.

The consensus is for 2011 volume of 12.7 million sales, a 10 percent increase if this year ends at 11.5 million units. All but one of the seven analysts predicted a market of 12.5 to 12.9 million.

But Morgan Stanley says consumer creditworthiness is improving so rapidly that lenders are about to loosen credit dramatically -- and that will rocket the market to 14 million units in 2011.

"The catalyst is credit availability -- a bigger impediment to auto sales than tight inventories or low demand," says Ravi Shanker, Morgan Stanley's lead analyst for North America.

Morgan Stanley is far from other forecasters on 2011, but less so after that. In 2012, Morgan Stanley sees 15 million sales. IHS Automotive predicts 14.8 million, which is close to the others.

"Everybody gets to the same place," Shanker says. "We just get there faster."

Analysts simply don't agree on whether auto sales will recover as fast as they fell. So far sales have not snapped back, and most analysts say we won't get a V-shaped recovery. But Shanker thinks otherwise, citing Morgan Stanley proprietary indices of credit quality and availability.

"Credit quality and availability always move in lockstep, with availability trailing quality by three months," he says. "Now credit quality is rising quickly and is near historic highs. Even a small change in lender attitude means more auto loans and more affordable terms."

But too many fundamental economic factors are weak for one improvement to break the logjam, counters senior analyst George Magliano of IHS Automotive. Jobs, housing and credit are all huge drags on auto sales.

"There will be no massive surge in the short term," he says.

Magliano says there could even be a first-half dip before sales improve in the second half.

Jesse Toprak, vice president of industry trends for TrueCar.com, says this crisis is different from previous auto sales slumps and recoveries.

"This recovery has been slower than ones we have seen in other industries, and it will stay that way," he says.

"The auto industry needs time to recover from a decade of overproducing and selling on the deal instead of the merits of the vehicle."

Brightening a bit, Toprak says automakers have not reverted to overproducing and excessive incentives to grab market share because they have fresh memories of where they went too far.

Dan Montague, senior analyst at PricewaterhouseCoopers Automotive Institute, is the most pessimistic of those surveyed, forecasting a market of 12.5 million for 2011.

"We still have a good bit of downside risk, perhaps as low as 12 million," he says. "I just don't see an environment healthy enough to put the car buyer back in the game."

Jeremy Anwyl, CEO of Edmunds.com, says uncertainty over jobs, housing and the economic stability of Europe and emerging markets keeps prospective buyers on edge.

"None of these factors have any certainty," he says. "It's a lot of wild cards."

Even the lower incentives being offered by automakers hurts unit sales because they effectively raise prices, Anwyl says. And lower volume doesn't generate positive headlines, he adds.

"If there's good news, confidence feeds on itself," Anwyl says. "That's why recoveries tend to be very steep. I'm not sure it'll happen that way this time."

Even if the analysts do not agree on the pace of the recovery, all expect higher sales next year.

TrueCar's Toprak says three traditional factors -- jobs, housing and consumer confidence -- have been strongly linked to sales the past three years. But since January 2007, he says, the strongest predictor is the Dow Jones Industrial Average.

And the Dow has risen sharply since mid-September.

"It's what you hear," Toprak says. "It sets the public mood for consumption. If the Dow is up, it's a green light for the consumer to buy."

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A brighter 2011
U.S. auto sales forecasts, in millions:
Morgan Stanley -- 14.0
Edmunds.com -- 12.9
IHS Automotive -- 12.8
J.D. Power -- 12.8
TrueCar.com -- 12.7
KeyBanc Capital -- 12.6
PricewaterhouseCoopers Automotive -- 12.5

(Source: Automotive News, 12/13/10)

This Holiday, Military Causes Stand Out

WBAP's "Hal's Angels for the Holiday's" brings Cheer to Texas Military Families in Need!  WBAP directs listeners to bid on holiday gift items from WBAP sponsors on Hal-bay. The proceeds from Hal-bay will be donated to our wounded soldiers and their families for their holiday needs.

For this operation, "Hal's Angels for the Holidays", the proceeds from WBAP's Hal-bay online auction will help local military families by providing food for the holidays, toys, and necessary items.  Many of our troops families have struggled financially with their main family provider away at war, or just returning from war and rehabilitating from a life threatening injury.  This is a great way for listeners to show their appreciation for our troops.  Tax Deductible donations for hal-bay will be donated to wounded soldiers and their families adopted and processed

Other businesses have adopted Military Causes this holiday season. Whole Foods Market says it is offering free shipping on its holiday gift boxes to soldiers deployed overseas. Sears -- already a big military supporter through its Heroes at Home program -- recently launched a "Baking for the Troops" program to send cookies to military personnel. And longtime supporters -- like Pitney Bowes, with the Holiday Mail for Heroes it sponsors through the American Red Cross -- are ratcheting up their efforts.

To a degree, soldier-supporting causes have become holiday perennials, along with food drives and red-kettle giving. But some experts think we may be seeing a little spike in cause efforts focused on service members and their families. "In these tough economic times, the number and diversity of holiday giving campaigns at retail continues to expand, as does competition for prime store real estate," David Hessekiel, president of Cause Marketing Forum, tells Marketing Daily.

"The conflicts in Iraq and Afghanistan have been going on for so long that supporting the troops -- and groups that support the troops -- has matured from being a "crisis reaction" cause. I expect this and other patriotic causes to grow even more next year -- the 10th anniversary of September 11."

"We always seem to see a surge of efforts supporting the military this time of year," Sarah Kerkian, insights supervisor at Cone Inc., a Boston-based cause-marketing firm, says, adding that 85% of Americans think it is important for companies to financially support nonprofit organizations that serve military veterans. "There are usually numerous corporate promotions beginning with Veterans Day in November and then the patriotism carries right through the holidays. Many seem to be short-term promotions, but some companies, such as Walmart, are actually making longer-term commitments to veterans."

But the bigger trend, she says, is toward anything traditional. "Companies and nonprofits return to their annual campaigns, and consumers find comfort in supporting recognizable efforts year-in and year-out, which explains why Salvation Army Red Kettle and the U.S. Marine's Toys for Tots program are by far the leading holiday campaigns Americans plan to support this year," she says. "It's probably not the time of year for super trendy campaigns."

Majority of Holiday Shoppers Still Have Gifts to Buy

Hard to pass up holiday sales helped motivate holiday shoppers a little earlier this year, though most agree they still have quite a dent to make in their list. According to the National Retail Federation's 2010 Holiday Consumer Intentions and Actions Survey, conducted by BIGresearch, the average person had completed 49.5 percent of their holiday shopping by the second week of December, up from 46.7 percent at same time last holiday season.

"It's well-known that at least half of the shopping that occurs during the holiday season happens during the last few weeks, making the final stretch of utmost importance to retailers," said NRF President and CEO Matthew Shay. "With the big day falling on a Saturday this year and a lot of shopping left to be done, retailers will continue to push aggressive promotions in the weekdays leading up to it, hoping to remind shoppers they only have one more weekend to shop."

According to the survey, 37 million people (16.9%) had not even started their shopping as of late last week, lower than the estimated 42 million people who said so during same point last year. Additionally, 22 million go-getters (10.1%) say they have already finished, up from 8.6 percent who had finished by this time last year. Though they started the season with a bang, men admit to having completed slightly less than women at this point (48.5% vs. 50.4% respectively).

It seems many shoppers are well aware they only have one big weekend left to shop. According to the survey, most holiday shoppers (32.4%) plan to complete their list prior to Saturday, December 18. Though, Friday, December 24 (11.9%) is expected to be the second busiest day between the 18th and Christmas Day.

Of the people who say they have used their smartphone to shop this holiday season, more than one-quarter (26.0%) have used the phone to make an actual purchase. Nearly one-third (32.5%) are specifically using their phone to receive text messages with special offers and 34.6 percent are reading what their peers are saying in customer reviews. It seems locating store hours or locations (50.7%) and perusing their options by browsing for gifts (60.2%) are the most popular ways shoppers have used their phones thus far.

"Just as we saw with the emergence of Internet shopping, mobile shopping, too, is already starting to catch on in terms of being a generator of sales for retailers," said Phil Rist, Executive Vice President, Strategic Initiatives, BIGresearch. "Tracking down mobile coupons and reading customer reviews remain extremely popular options for shoppers as they look for the best price, product and even store location."

Department stores can expect the larger share of traffic over the next few weeks (38.4%), though online retailers (37.6%) and discount stores (36.5%) will also be popular shopping destinations for last-minute shoppers. Electronics stores (19.4%), clothing or accessories stores (18.8%) and outlet stores (10.8%) will also see their share of procrastinators in the coming days.

When it comes to gifts that have been bought so far, most say they have purchased clothes or clothing accessories (43.9%). Though books, CDs, DVDs, videos or video games (38.1%) have also been popular purchases. Consumers also bought toys (35.3%), gift cards (29.9%), consumer electronics (21.3%), food or candy (20.0%), and home décor (15.2%).

When asked which payment method they have used the most, four out of ten (40.9%) have used their debit or check cards most often. Nearly one-third (31.1%) have used their credit cards and nearly one-quarter (24.4%) have used cash. A mere 3.6 percent have relied on checks.

Christmas Day itself will largely serve as a day for consumers to cook (45.6%), visit friends and family (66.0%) and watch TV (52.8%), but nearly one-quarter (24.1%) will browse the Internet as well. NRF has revised its holiday sales forecast to 3.3 percent, or $451.5 billion, up from the original 2.3 percent expected increase.

(Source: National Retail Federation, 12/15/10)

The Fun is Back in the Driver's Seat

Forget resale value. People who have just bought new cars and trucks say fun is what makes them loyal to the brands they like, and it's also what makes them go elsewhere. So which brands benefit from the syllogism: "If most fun equals most loyal, and brand X has the most loyal customers, then brand X has all the fun cars?" The new J.D. Power and Associates 2010 Customer Retention Study, released last week, says that would be Ford. To be fair, Honda is also number one in the study, but for more practical reasons.

In the study -- based on responses from 123,601 new-vehicle buyers and lessees, of which 81,350 replaced a vehicle that was previously acquired new -- Ford and Honda rank highest in a tie among automotive brands in retaining vehicle owners, with each retaining 62%.

Fielded between February and May, and August and October this year, the study measures the reasons for -- and the rate at which -- automotive brands retain their existing customers and gain them from competitors. For the latter, importance of a fun-to-drive and styling have also gotten more important among the reasons customers are switching to a different brand.

Raffi Festekjian, director of automotive product research at J.D. Power, says as the economy improves, consumers are responding more to emotional -- versus purely practical -- reasons for staying with their vehicle brand or switching to a different one. "We are seeing more emotional characteristics creep in," he says. "Ford is pleasing their current buyer base, producing models that resonate well. We had our Initial Quality Study in June, and in that Ford specifically ranked the highest they have ever ranked. So they are continuing to have good news with products that connect with consumers."

He says the fact that emotional factors are driving loyalty and conquest partly reflects the fact that big differences in vehicle quality and fit and finish no longer exist. "Good quality is a price of entry now."

The study finds that the importance of fun-to-drive vehicles as a reason for owner loyalty has increased by eight percentage points in 2010, compared with 2009. Meanwhile, the importance of resale value as a reason to stay loyal has decreased by 10 percentage points from 2009.

The firm says Ford's retention rate is primarily driven by the Edge, F-Series and Fusion models -- while for Honda, retention is driven by the Accord, CR-V and Pilot.

The study says Ford has an edge on fun, as owners are more likely than Honda owners to say they have remained with their brand due to the perception that their new vehicle is fun to drive or has good styling, per J.D. Power. Honda owners are more likely than Ford owners to cite resale value and safety as reasons for repurchasing the brand.

Hyundai, Lexus and Toyota are tied for third place, each getting 60% of customers to stick with the brands. The biggest improvement is from Kia, improving 21 percentage points from last year to 58% in 2010.

The firm says that this year 16 of the 34 ranked brands have improved their customer retention rates versus last year, while 14 have declined and four have remained flat. Across the industry, the rate at which customers are staying loyal to car brands hasn't changed from 2009; 48% of U.S. car and truck buyers are loyal, per the firm. Domestics are doing better at keeping their customers: this year, according to the study, 69% of owners who traded in a vehicle from a domestic brand purchased another domestic vehicle, compared with 68% last year.

Shoppers Look to Rewards for Holiday Spending

Consumers are looking to stretch their holiday dollars with benefits from the various rewards programs they belong to, according to research from LoyaltyOne and Epsilon Targeting.

According to the companies' research, which involved a nine-question survey sent to more than 700 U.S. households, 11% of consumers said they planned to use reward points or miles to augment their holiday spending this year. Of that group, 70% said they would use those points on purchases for other people, rather than for themselves.

According to the survey, more than 70% of consumers said they were occasional or frequent users of rewards programs. Of those users, 8.1% of them said they planned on spending more on holiday purchases this year, compared with 6.6% of the total respondents.

"Retailers who use data from their reward programs to respond to customers' most pressing concerns at critical times like the holiday gift giving season can enhance the shopper experience and leverage relationships in a way that deepens loyalty to their store or their brand," said Epsilon Loyalty Solutions Vice President John Bartold, in a statement.

Meanwhile, a separate survey found that Canadians are much more likely to use rewards programs than Americans. According to the Air Miles and American Express Holiday Rewards survey, 91% of Canadians use rewards programs, compared with 72% of Americans. Eighteen percent of Canadians said they plan to use those programs for holiday purchases, compared with 8% of Americans.

Americans, on the other hand, are more likely to shop online than Canadians, at a rate of 73% vs. 44% for general sites. However, when the online shopping involves a loyalty or rewards site, Canadians are three times more likely to shop online.

Consumer Indulgences Making a Comeback

Few companies were clobbered harder than Starbucks in the recession. The coffee chain with outposts on every corner came to represent all that was wrong with American businesses and shoppers: unchecked expansion, self-indulgence and mindless credit-card swiping.

But now customers who swore off frivolous spending during the recession are lining up again for their $4 caffeine fix. The company's net income nearly doubled and revenue rose 17 percent in the most recent quarter compared with a year earlier, as more Americans allowed themselves a small treat.

After seeing their retirement funds and home equity shrink severely, consumers tightened their belts in a shift some economists dubbed the New Frugality. Fortunately for the world's largest latte purveyor and other peddlers of small luxuries, Americans have a short memory when it comes to the economy.

Affordable luxury goods like gourmet coffee, lingerie and high-end skin cream have been enjoying a comeback since the stock market began to rally in August and higher-income Americans started feeling better about their finances.

At Estee Lauder Cos., whose brands include Clinique and MAC cosmetics, CEO Fabrizio Freda says customers who traded down to drug store brands when times were tough are returning. Revenue was up 14 percent last quarter, driven by brisk sales of high-end moisturizers and eye creams.

Specialty items like the "Miraculous" push-up bra have buoyed the company that owns Victoria's Secret and Bath and Body Works. Revenue rose 12 percent last quarter at Limited Brands Inc. as shoppers treated themselves to its stock in trade.

"People didn't feel good about having little indulgences" in recent years, says David Palmer, an analyst with UBS Investment Research. "The Suze Orman-type talk shows were telling you to kick your Starbucks habit."

Now, he says, austerity fatigue may be setting in.

For Michele Burkhammer, a nurse clinician for the Montgomery County Fire and Rescue Service in Rockville, Md., austerity was the only option after she was furloughed and her husband lost his job. She started buying groceries at Walmart and pared her list to the essentials.

These days, her husband is back to work, and she's fed up with pinching pennies. She still doesn't splurge on herself, but she recently bought Ralph Lauren khakis and other high-end items for her 3-year-old son. She's also returning to upscale and organic grocers.

"Shopping is starting to be enjoyable again," Burkhammer says.

Trading back up has raised hopes for the holiday season. Research firm ShopperTrak bumped up its holiday sales growth forecast to 3.2 percent from 2.9 percent after a solid start in November.

The recession technically ended in June 2009, but the recovery has been fitful. Manufacturing has been stronger, though hiring has not. Home prices have stabilized somewhat since bottoming out in the spring of 2009. A 17 percent gain in the Standard & Poor's 500 stock index since the end of August has helped raise consumer confidence, and with it spending, particularly among the upper class.

"When people feel their household wealth rising, they're more confident and that has a dramatic impact on consumption," says Chris Christopher, an economist with IHS Global Insight.

Still, it's unclear whether this signals the beginning of a broader retreat from thrift. Shoppers still are making lists and, for the most part, sticking to them. The unemployment rate rose to 9.8 percent in November, holding a damper on spending in millions of households.

Frank Mangini, who lives in the Queens borough of New York, is back to making regular trips to Whole Foods, but only for specialty items he can't find at his local supermarket.

"I was trying to lay off a little bit" during the recession, he says. Even with the economy picking up, he says he's "trying not to overdo it." But he's happy to shell out for his favorite organic green tea.

After taking a drubbing during the recession, Whole Foods Market Inc. has been luring back shoppers. Revenue rose 15 percent last quarter. The company, the biggest national seller of organic and natural groceries, says shoppers are buying more higher-priced brands and trading up on pricey items like seafood, cheese and housewares.

"Middle-class people want to make these little splurges on basic luxuries like Victoria's Secret so that they're not breaking the bank or the wallet but are getting out of the doldrums of the recession," said Sherif Mityas, a partner in the retail consultancy firm A.T. Kearney.

These small splurges are unlikely to spark a broader recovery. After all, Starbucks or Whole Foods binges set shoppers back just a few extra dollars.

You'd have to see sales of bigger-ticket items like automobiles, designer handbags and extravagant vacations rebounding -- and see people racking up credit-card debt again -- to say Americans' frugality has ended, says Kenneth Goldstein, an economist at the Conference Board. And that's unlikely as long as unemployment remains stuck above 9 percent. Even with car sales improving, the industry will sell 4 million fewer cars in the U.S. than it did in 2007.

Alan Levenson, chief economist at T. Rowe Price, says Americans couldn't revert to old spending patterns even if they wanted to because banks aren't willing to lend. The personal savings rate remains high, and although consumer spending rose an annualized 2.8 percent in the third quarter, the biggest bump since 2006, that's not enough to rev up the overall economy.

Certainly there's pent-up demand, Levenson says, but shoppers are "not blowing anybody's doors off."

(Source: The Associated Press, 12/09/10)

Radio Gains More Than 3 Million Listeners

Arbitron Inc.'s RADAR 107 National Radio Listening Report, which was released yesterday, shows an increase of 3.3 million radio listeners age twelve and older per week, versus the December 2009 report. The number of persons twelve and older listening to radio each week now reaches an estimated 239.8 million -- 93.2 percent of all Americans twelve and older.

In addition to persons twelve and older, radio listening increased year-over-year across major demographic groups, with adults aged 18 to 34 showing the biggest gains. The number of adults aged 18 to 34 who are weekly radio listeners increased nearly 960,000 in the past year, and adults aged 25 to 54 gained more than 750,000 in the same period. Meanwhile, teens aged 12 to 17 continue to embrace radio broadcasts with an average weekly increase of 365,000 versus last year's report.

Despite the proliferation of competing media platforms, radio continues to reach just about everyone on a regular basis. RADAR 107 indicates that, over the course of a week, radio is listened to by over 92 percent of all teens aged 12 to 17, 94 percent of adults aged 18 to 34, and 95 percent of adults in the 18 to 49 and 25 to 54 age brackets.

Super Bowl 2011: Maximizing Yardage During the Pre-Game Drive Period

While economic woes linger on for many Americans, football season is a perfectly affordable antidote, offering great in-home entertainment with friends and family, the opportunity to try satisfying recipes, and (maybe) an excuse to splurge on some cool new digital hardware.

Hovering like a beacon at the culmination of the season is the Super Bowl, the single biggest party event of the year. Over 43 million Americans participate in Super Bowl parties each year, with host families spending $70 on average -- second only to Thanksgiving.

As the pre-game drive period approaches, here are some important merchandising and promotional ideas for the retail playbook.

2011 Super Bowl Playbook

1. The game day crowd is converging on the couch...and Mom makes the calls!
According to Nielsen, nine out of 10 U.S. households will be watching Super Bowl XLIV at home, or at a friend's or relative's house -- instead of at a restaurant or bar. In making it all happen, Mom makes 69 percent of all Super Bowl-related purchase decisions and, according to research, loves the highly social, shared-viewing experience of the NFL.

2. Partnering with brands gets game time favorites onto shopping lists and into baskets to help maximize the retailer's sell-in period.
Brands such as Campbell are putting substantial resources behind game time favorites. The company spotlights Chunky Soups, Pace Salsa and Pepperidge Farm Goldfish Snacks as its game time "power brands." There will be full Path to Purchase shopper marketing coverage for all three brand portfolios.

3. Think tailgating in the kitchen.
Event-related cooking culture is on fire in America. Tailgaters will be bringing it indoors and looking for smoking hot recipe recommendations -- anything with "chili", "picante", "buffalo", "nacho" or "salsa" in the name will do. Retailers should broadcast recipes in e-newsletters and rotos. A single irresistible appetizer idea can influence an entire shopping trip decision.

4. Kick-off the excitement in-store.
Look to major brands from Campbell for great game time-themed display materials that will not only build incremental sales excitement for those particular products but remind shoppers to stock up on all the game day items they'll need. During the critical weeks in January, retailers that have the space should consider constructing a game time alcove of modular displays to interrupt usual shopping patterns.

(Source: Retail Wire, 12/09/10)

Consumers Are Buying For Themselves This Christmas

Consumers are adding a very important name back to their holiday shopping lists this year: their own.

The percentage of shoppers who say they plan to indulge in a little something extra for themselves has risen four points since last year to more than 57 percent -- the biggest jump in at least six years, according to an industry survey. Sales of jewelry, apparel and consumer electronics are up so far this holiday season from last year, and experts attribute part of the boost to what has become known as "self-gifting."

You didn't think Dad was going to give that 50-inch flat-panel TV to someone else, did you?

"The consumer really is sitting there saying, 'I'm going to take advantage of these deals,' " said Marshal Cohen, senior analyst for NPD Group, a consumer research firm. "This consumer is saying that there really is some pent-up demand."

During the nation's economic downturn, consumers saved money by whittling down their Christmas lists. Spending on gifts for babysitters, co-workers and teachers were slashed, and, in the ultimate act of self-sacrifice, shoppers cut back on themselves.

According to the National Retail Federation, the number of self-gifting shoppers began to fall in 2007 -- the year the recession began -- after steadily increasing for several holiday seasons. Though the number ticked up in 2008, it plunged last year to under 53 percent of shoppers. The amount they intended to spend last year also fell nearly 5 percent to $101.37.

This year, both measures have rebounded along with consumer confidence. And shoppers reported plans to spend an average of $107.50 this Christmas on themselves, the NRF said.

"The economy is picking up a little bit," said Lisa Bennett, as she sipped a Bellini on a recent evening at a cocktail party at Bliss Spa in downtown Washington, D.C. for its top customers.

Bennett said the sense that the recovery is on track made her feel a little less guilty about spending $200 online at Ann Taylor for herself while she was scouring the Internet for gifts for her teen cousins. They got Best Buy gift certificates and J. Crew sweaters; she got two new tops and a dress and then booked an oxygen facial for herself at the spa.

General manager Michelle Caron said customers are not only booking "maintenance" appointments -- the manicures and waxing counted as necessities among some women -- but also reserving more indulgent services such as facials and massages. This holiday, the spa launched a new service dubbed Shopper's Delight, a lower leg massage and exfoliating treatment for $70.

"We've only been getting busier and busier," Caron said.

Industry experts say the return of self-gifting is a telling indicator of consumer health. Over the past two years, as consumers have grappled with high unemployment, falling home prices and a volatile stock market, spending was primarily driven by necessity. Retailers that sold staples such as groceries held up better during the recession than those that stocked discretionary items.

But if shoppers are now willing to buy for themselves, that could mean the big freeze on consumer spending is starting to thaw.

Cohen said self-gifting helped drive the strong sales and shopper traffic over the post-Thanksgiving weekend. His research showed 35 percent of shoppers bought something for themselves, more than he expected.

Self-gifting could also prove lucrative for retailers because it rarely occurs by itself, Cohen said. Shoppers may reward themselves after spending on others or, on the flip side, justify their own purchases by buying a few gifts.

"It's like it becomes a fever," he said. "For every self-gifted item, there's generally another item that gets added to the assortment as well."

At Fair Oaks Mall in the Washington, D.C. area, general manager Robbie Stark said self-shopping dominated the Black Friday weekend, including one four-hour line of teen boys waiting to buy $10 T-shirts at Elite Board Shop, which sells skateboard gear. He said retailers welcome the business to pad holiday sales.

"The more self-buying that goes on, that's good because they're still going to get the gift-buying," he said.

Still, New England Consulting Group founder and chief executive Gary Stibel said any increase in self-gifting is incremental at best. Shoppers put their kids first and their pets second, he said. Parents and spouses take the back seats, leaving only a tiny portion of discretionary income left over for personal indulgences.

"She's trying to take care of everybody, but she more often than not puts herself last," Stibel said of the typical female shopper. "She's too damn conscientious for her own good."

So which actually makes us happier: self-sacrifice or self-indulgence? A study by Harvard Business School associate professor Michael Norton and two colleagues from the University of British Columbia in 2008 examined whether shoppers derived greater pleasure from spending on themselves or on others.

The researchers gave up to $20 away to shoppers with instructions to spend it on themselves or on other people -- perhaps through a gift for a friend or a donation to a homeless shelter. Though most people expected to enjoy keeping the money, Norton said that at the end of the day, those who bought for someone else reported feeling significantly happier.

Of course, devoting a day of shopping for someone else is one thing. But the holiday shopping season is two full months of making a list, checking it twice, then trying to balance your checkbook. Norton said his research did not examine whether the drawn-out process of gift-giving can overwhelm the joy of giving, but he is clearly no Grinch.

"In the moment of giving," he said, "it's still nice to have given a gift to someone."

(Source: The Washington Post, 12/06/10)

A Checklist of Best Practices in Sales

Selling is probably the most important contributor to business health, even more important than products and services. It's a difficult art to master. So it pays to develop good mechanisms to support and guide the sales effort. Here are five "Best Practices" that can help sales managers and their staffs:

Create an Ideal Customer Profile
Develop this profile on customers with whom you have had success in the past. Detail not only the facts (demographics, company size, annual revenues, SIC codes), but the qualitative characteristics as well, those elements that represent the value they seek when doing business with your company.

Set Clear Expectations
Give your salespeople clear and quantifiable performance expectations for all stages of the sales process. Don't simply throw a quota and a territory map at them. Tell them you expect them to convert so many leads to suspects, suspects to prospects, prospects to contracts, contracts to repeat business. And follow up with them.

Track Performance and Share the Data
Stop managing your sales force by anecdote, those traditional sales meetings where each salesperson fills up time telling about why this or that deal hasn't closed yet. Instead, focus on collective performance against those expectations you laid out above. Build sales meetings around a review of the data. Now you're dealing with facts.

Work on the Process to Improve Results
If sales are down this month, don't panic. Instead, examine the underlying processes to see where the slowdown occurred and why. Maybe sales are down because there's an operational glitch, or an unexpected trend in the local market.

Give Great Support
Everybody likes nice bosses better than mean bosses, but great sales support means more than that. It means removing obstacles to performance wherever possible, smoothing the way, and leaving people alone when that's appropriate.

The Changing Approval Process

Many decision-makers no longer have the ability to sign-off on the same level of expenses or purchases that they were once accustomed to. This has significant ramifications.

The ego issue. Picture yourself in the executive office, perhaps a VP of Sales or Marketing. Until last year you could approve any purchase under $20,000. Now, you need to get approval from a purchasing committee for any expense over $5,000. Although you understand the philosophy behind this policy, it is challenging to deal with because in your eight-year history with the company you have never made a poor buying decision.

The buying committee. You may now have to deal with buying committees, and if you're not careful, you won't even get the chance to meet them. That means the decision to use your product, service or solution could be vetoed.

No approval. Some purchases simply won't be approved because of the extent or nature of the expense. Even though your solution may benefit the company, the organization may choose not to move forward simply because they know they won't get approval for the expense. It's not fair but it is a fact of business.

Once again, this means that you need to ask more questions to uncover the approval process. Be sensitive to the decision-maker's position if you discover that they no longer have the authority to sign-off on your product or service. Look for ways to help them facilitate their decision.

Why Automotive Dealers are Combining F&I, Sales

Some dealerships are doing away with traditional F&I departments in favor of salespeople who can wear both hats.

“I really like it; the sales folks really, really like it; the customers like it,” said John Chalfant, general manager of Edmark Superstore, which sells Chevrolet, Buick, Cadillac, GMC, and Kia in Nampa, Idaho.

It's not a new concept, but it is timely because dealerships are working to cut costs, said dealer management consultant Mark Rikess, who advocates the concept. He is CEO of Rikess Group of Los Angeles.

The recent 2010 J.D. Power and Associates Sales Satisfaction Index confirms that customer satisfaction goes up when customers deal with only one person in the sales process.

Dave Robertson, executive director of the Association of Finance & Insurance Professionals, of Colleyville, Texas, says it is a theoretically sound idea to have the same person handle the entire transaction, including F&I.

But he says it could be “ill-timed” to move away from an F&I specialist because there are so many different aftermarket products on the market and because F&I is subject to so much regulation.

Chalfant and Rikess say giving salespeople responsibility for F&I puts a heavy emphasis on recruiting highly qualified salespeople. In addition, Rikess said dealerships need to create a new position, “document processor,” to help customers through the paperwork process, including required F&I disclosures.

Edmark Superstore adopted the approach a year ago, but it took about four months before the system was performing well, Chalfant said.

He said the hardest part was getting salespeople acquainted with which lenders would approve which deals, and how to correctly interpret a customer's credit report.

 

Jim Henry - Automotive News -- December 8, 2010

 

Daily Sales Tip: Keeping It Positive

The old sales axiom that people buy from people they like is true; buying is a very emotional experience. Having a negative attitude makes you less likeable and approachable as a salesperson. Sometimes the biggest sales challenges can be overcome with the proper attitude.

That said, how do you maintain a positive attitude when times are tough? Sure, it's easy to maintain a positive attitude when you're over quota and things are going well; anyone can do this. But a true sales professional maintains a positive attitude despite thier challenges and setbacks. The consummate sales professional knows that maintaining a positive attitude will help him to overcome adversity and achieve his objectives.

Here are 5 simple tips to maintain a positive attitude in difficult times:

1. Don't dwell on your losses. Realize that you will win some and lose some and the next opportunity is around the bend. Dwelling on the past keeps you from living in the present and achieving your goals.

2. Recognize that you bring value to your clients. It's more than your product or service. It's the benefit of doing business with YOU. Help your customers to understand why they should do business with YOU and not someone else.

3. Remember your successes. Realize that you can achieve excellence by repeating positive behaviors and actions. Pay attention to what you did in the past when you experienced success. Harness those behaviors.

4. Avoid time wasters. Don't waste your precious time on naysayers and negative thinking. Associate with those who have similar goals and ambitions. It's amazing what like-minded individuals can achieve when they combine forces.

5. Be genuine. By being genuine and putting others' needs before your own you will benefit from sales. Take the time to genuinely understand your clients' goals, fears and ambitions. It's your job to help them to succeed.

Guerilla Marketing...Great Example from NY Times Article

Marketers Discover Trucks Can Deliver More Than Food
When the Heavenly Mountain Resort in Lake Tahoe, Nev., wanted to promote its ski passes this season, it bypassed the usual advertising media like billboards, radio and print ads and instead chose a truck filled with snow cones driven by two improv actors to publicize its message.

For Heavenly, the idea to distribute snow cones from a truck was simple: "We're going to give you a little bit of the mountain," said Michael Chamberlin, the executive vice president and director of client services at BBDO San Francisco, which created the campaign for the resort.

That strategy -- pairing a brand’s message with of all things, a food truck -- has been increasingly employed in recent months, with major advertisers using trucks as rolling sandwich boards while advertising agencies issue the call to independent food truck operators to participate in brand-sponsored events.

Food trucks selling things like falafels and waffles have grown in popularity in cities like New York, Los Angeles and San Francisco, and advertisers now see them as a vehicle for delivering their message directly to consumers.

"All the companies that are involved in this understand the power of this guerrilla-type marketing, being on the street, being very hands-on with the consumer that's walking around," said Beth Lawrence, the chief marketing officer of La Cense Beef, whose La Cense Beef Burger Truck has been used in many events in Manhattan since the summer.

The challenge with buying traditional media, said John Wagnon, the vice president for marketing at Heavenly, one of the properties of the Vail Resorts group, is "paying for eyeballs of people who have no interest in what you're trying to sell."

The food truck campaign is the first assignment by Heavenly for BBDO San Francisco, part of the BBDO West unit of BBDO Worldwide, owned by the Omnicom Group.

The resort's truck, outfitted with iPads and large televisions showing skiing and snowboarding films, will promote a $379 ski season pass at locations around the San Francisco Bay Area through Dec. 15.

Visitors can buy a pass at the truck itself or they can collect a card and visit a Web site for more information. The actors driving the truck will also create video content that will be posted to a blog and Facebook page associated with the campaign.

"It's like a mobile billboard on steroids," Mr. Chamberlin said.

Ms. Lawrence said that La Cense Beef started getting calls from advertising agencies at the end of the summer and credited it to the media attention food trucks have gotten, including a mention in New York Magazine's list of 25 of its favorite food trucks in New York City. According to the 2011 Zagat New York City restaurants survey, 26 percent of respondents reported eating from gourmet food trucks while 40 percent expressed interest in trying them.

In November, the La Cense Beef Burger truck was hired by Team One, a division of Saatchi and Saatchi, for a private event on behalf of Lexus. In October, it was hired by IAC to participate in the Vimeo Festival + Awards event. In June, the 94x50 agency used the truck for a private event on behalf of Nike.

"They like the brand, they like the positioning and they like the fact that the meat is coming from the ranch," William Kriegel, owner and founder of La Cense Beef, said of the grass-fed beef used to make the hamburgers sold on the truck.

At the 11th annual New Yorker festival this fall, HSBC bank used six independent food trucks to promote its first sponsorship of the event.

The trucks -- Rickshaw Dumpling, Schnitzel & Things, Wafels & Dinges, Bistro, NYC Cravings and Van Leeuwen -- were wrapped almost entirely in an HSBC ad campaign and each featured a special dish created for the event. Rickshaw Dumpling, for example, created a Peking duck dumpling, while Van Leeuwen offered pumpkin ice cream to visitors.

HSBC customers who showed their bank cards at any of the trucks were given special treats like a free drink of Moroccan mint tea at the Bistro truck and a free scoop of ice cream on a waffle at Wafels & Dinges. HSBC also branded the napkins used in the trucks.

But some brands prefer to create their own food truck instead of hiring an independent operator.

To promote its new product, Heinz Dip & Squeeze Ketchup, the H.J. Heinz Company bought a used truck and added a custom kitchen that included double-stacked convection ovens, food warmers, sinks and a freezer. The truck was then branded with a custom wrapping that displayed the "Heinz Ketchup Road Trip" message along with the related Twitter handle and Facebook page address.

The company hopes to capitalize on the growing familiarity with food trucks, said Jessica Jackson, the group head of public relations and communications at Heinz North America. The redesigned ketchup packets were also a perfect fit for a food truck, Ms. Jackson said.

"Since it was really made for eating on the go, we wanted to create an environment where people could experience it on the go," she said.

The road trip began in mid-November in Pittsburgh, the company's hometown, spent the Thanksgiving holiday in New York City and will make its way to Philadelphia with a final stop in Dallas. At each stop, visitors get a free serving of Ore-Ida crinkle cut fries or Ore-Ida sweet potato fries and a packet of the Dip & Squeeze Ketchup.

The company will also give away promotional T-shirts to people who have participated in one of the social media parts of the campaign. For example, the first 20 people who arrive at the truck showing on their smartphone that they have "checked in" to the "Ketchup Road Trip" on Foursquare or who post their preference as "dippers" or "squeezers" on Facebook or use the Twitter handle @DipAndSqeeze to announce their preference are also eligible for a free T-shirt.

Most food trucks, corporate or not, use social media tools like Twitter to post their location to their followers, and now Zagat, the restaurant guide, has gotten into the game. In early November, Zagat announced a food truck Web site that features a map with the location of the food trucks that it partners with. They are also conducting a survey of the best food trucks in New York.

"Now we're starting to get calls about Christmas parties," said Ms. Lawrence, of La Cense Beef. "It's just going to continue to be on the rise."

(Source: The New York Times, 11/29/10)

11 Restaurant Industry Trends to Watch For in 2011

Restaurant operators can't be certain about much for 2011, as recent improvements in guest traffic, same-store sales and hiring are far from guaranteed to continue. About the only thing they can expect as they hope for traction in the economy's wobbly recovery is that the industry will continue to look different than it does today.

In forecasting what changes may lie ahead, Chicago-based market research firm Technomic Inc. identified 11 restaurant industry trends for next year.

1. Action in adult beverages

Technomic predicts that as optimism grows in 2011, consumers will want to celebrate with some higher-end alcoholic drinks. As such, retro cocktails and high-end spirits may get more play at fine-dining and independent establishments, craft beers could gain in popularity against their mass-market counterparts, and fast-casual concepts could turn to alcohol as a way to differentiate themselves. Casual-dining chain Ruby Tuesday already has positioned itself to get ahead of this trend, offering $5 premium-well cocktails and craft beers as part of an expanded beverage program that debuted with a rebranding. There also are several smart-phone apps like Find Craft Beer and Happy Houred that will list nearby restaurants offering specialty microbrews.

2. Beyond bricks and mortar

Food trucks are poised to move beyond New York and Los Angeles into more U.S. cities. Not only will gourmet food trucks proliferate, Technomic said, but traditional restaurants also will begin using the tactic as a way to extend their brands into new areas or add revenue streams like catering. Chains like Qdoba, Sizzler, Dairy Queen and Gold Star Chili already have done this. Regulatory agencies in cities with a new food truck presence will be scrambling to keep up.

3. Farmers as celebrities

The era of the celebrity chef may soon give way to that of the star farmer. Look for more attention to be paid to producers and suppliers on menus across the nation as a growing back-to-the-source mentality takes hold in the industry, Technomic said. Farmers and producers may soon be high-profile spokesmen for restaurants and host more special events and dinners. At the chain level, Chipotle Mexican Grill and Domino's Pizza have made their sourcing integral to their marketing -- Chipotle with its "Food With Integrity" campaign and Domino's with its commercials taking place on a dairy farm.

4. Social media and technology: evolutionary spurt

Look for more restaurants to gain a competitive edge with new technologies and applications, including kiosks for ordering and displaying nutritional information, iPads containing wine lists, and hand-held devices for tableside payments. Widespread adoption of location-based social media has a lot of room for scale, indicated not only by megachains Starbucks and McDonald's piloting uses for Facebook Deals, but also by CKE Restaurants' development of its own location-based mobile app, Happy Star Rewards.

5. Korean and beyond

"The Korean taco -- an only-in-America synthesis of Korean-style fillings and a Mexican format -- signals the rise of Korean barbecue and Korean food in general," Technomic writes. While that item made famous by Los Angeles food truck Kogi Korean BBQ-to-Go has the potential to touch off a proliferation of street foods and small plates across the industry, other restaurant dishes may incorporate traditional Korean flavors like kimchee and short rib.

6. Frugality fatigue

Consumers who are able to treat themselves again in 2011 will do so -- meaning that restaurants with a few indulgent menu items or experiences could see an uptick in orders of high-margin and high-price-point dishes. This could spell opportunity not only for casual-dining chains to entice diners with more premium dishes like the Flavor-Loaded Steaks at Applebee's, but also for higher-end chains like Fleming's Prime and Morton's to attract new customers with their bar menus, as they've done throughout the downturn. Technomic also predicted that more gastropubs would pop up next year.

7. How low can you go?

On the other hand, customers will continue to demand everyday value when dining out, Technomic said. As part of any balanced-menu strategy, restaurants should have permanent value fixtures available, not just limited-time offers. In its most recent earnings call, quick-service chain Wendy's said its value-driven LTOs did well with marketing support, but dropped off when advertising was pulled back, which necessitated the reformulation and promotion of its latest everyday-value lineup, "My 99," with seven items for 99 cents.

8. Carefully calibrated brand action

More restaurant concepts will update brand positioning through remodels and new formats, Technomic predicted. Many chains have begun on that front already, beginning with the debut this month of a fast-casual café variant for family dining brand Denny's, which also foresees future growth in nontraditional locations on college campuses. In a move to bolster carryout sales, Bob Evans has added a "Taste of the Farm" grab-and-go area to five of its locations, and plans to remodel 30 to 35 more units over the next six months. McDonald's also plans to remodel hundreds of units this year and next, continuing its image update featuring highlights like the McCafe beverage lineup and free Wi-Fi in its stores.

9. Back to our roots

Consumers will continue to turn to comfort foods when dining out, Technomic projected, creating demand for traditional Southern foods, retro Italian favorites like meatballs, or gourmet updates to nostalgic favorites like doughnuts and popsicles. There also could be more opportunities for family-style service and family-size portions, like the fare offered at Italian dinnerhouse Buca di Beppo, especially if more families have reasons to celebrate in the new year.

10. New competition from C-stores

"Retailers have been encroaching on restaurant turf for some time," Technomic said, "but now the hottest action is among convenience-store operators upgrading their foodservice, where margins are 40 percent to 60 percent instead of the 5 percent typical for gas." Restaurants can prevent customer defection to C-stores by focusing on their differentiated menu items, ambience and service, Technomic said, while other can fight back by taking some of their signatures into grocery stores, as Starbucks, California Pizza Kitchen and P.F. Chang’s have done.

11. Healthful versus indulgent: The little angel says one thing, the little devil another

The balance that restaurants usually strike between healthful and not-so-healthful food items could get complicated in 2011 when many menu-labeling requirements take effect. One possible trend emerging from the new regulations could be an upswing in limited-time offers, which are exempt from nutritional data-disclosure requirements. Technomic also predicted more moves to reformulate entire menus with an eye toward health, like Taco Bell's recent test of a lower-sodium menu, and more menus advertised as under a certain number of calories, similar to Applebee's under-550-calorie lineup.

(Source: Nation's Restaurant News, 11/18/10)

Ford, GM, VW & Subaru post double digit US salesincreases in Nov.

Ford Motor Co., General Motors Co., Volkswagen and Subaru of America posted double-digit U.S. sales increases in November, a sign that the market's positive momentum in October is continuing.

Ford sales jumped 20 percent to 146,956 light vehicles last month from November a year earlier. GM sales rose 12 percent to 168,670 units. Subaru gained 22 percent to 20,792.

The results from the first automakers to report support analysts' predictions that the U.S. seasonally annual adjusted selling rate would remain above 12 million. October's SAAR of 12.2 million was the industry's first month above 12 million since the cash-for-clunkers-fed sales flurry in August 2009.

“GM's sales were better than we expected,” said Rebecca Lindland, director of strategic review for IHS Automotive, which forecast GM sales to be 162,000 for the month. “They aren't blowing the doors out, but it's a slow, steady recovery.”

Ford's 20 percent gain factored November 2009 sales from Volvo. Without the Swedish unit Ford has since sold, the year-over-year increase in November for the Ford, Mercury and Lincoln brands was 24 percent.

At GM, Buick led the way with a 36 percent increase, and GMC advanced 30 percent. Cadillac gained 21 percent and Chevrolet was up 18 percent, GM said in a statement today. The four brands combined were up 21 percent.

Through November, those brands have sold nearly 103,014 more vehicles than GM sold for the same period in 2009, when it had eight brands.

Nearly all GM vehicles sold in November were 2011 models, allowing the brands to continue to increase average transaction prices, said Don Johnson, GM vice president of U.S. sales operations. Through November, the average price is up $1,300 from a year ago.

Incentives averaged 10.4 percent of GM transaction prices, about the same percentage as the rest of the industry, Johnson said.

GM sales are in line with analysts' earlier forecasts that overall November U.S. sales would rise about 10 percent from a year ago, driven by month-end discounts and a slow rebound in consumer demand.

“The pace of light vehicle sales appears to have remained above the important psychological level of 12 million units in November,” Barclays analyst Brian Johnson said in a note to clients last week.

Volkswagen AG reported a 24.2 percent increase in VW brand sales last month. Jetta sedan sales climbed 49 percent.

Barclays expects sales to reach about a 12.1 million on a SAAR basis. That would be strong enough to show that “the consumer is crawling back, particularly in the more affluent and higher quality credit segments.”

Barclays predicted that Ford and Hyundai Motor Co. would have the biggest sales gains among major players, continuing a trend that has seen the two automakers take share from rivals in 2010.

The final weekend of November sales were lifted by Thanksgiving holiday deals sponsored by individual dealers and manufacturers, including Toyota Motor Corp. and Nissan Motor Co., analysts said.

“We're starting to feel better about how the market is going,” said Jessica Caldwell, an analyst at auto sales tracking and shopping service Edmunds.com. “It looks like we're in that slow recovery pattern.”

Economists surveyed by Reuters forecast a November SAAR of about 12 million vehicles. Bloomberg's average of eight analysts' predictions was slightly higher, at 12.2 million.

Toyota is expected to report a 2 percent sales drop in November from a year earlier, according to Edmunds.com and TrueCar.com forecasts. This will make Toyota the only major automaker with a decline in that period, despite having increased spending on incentives from a year earlier.

It illustrates the difficulties Toyota still faces in winning back U.S. consumers, more than a year after starting recalls that rocked its reputation for quality and safety.

Reuters and Bloomberg contributed to this report.

Daily Sales Tip: Great Sellers Take the Longer View

Great sellers are not immune to lousy meetings. They sometimes miss a cue, get distracted, make decisions to abort the effort too soon, or too late. Sometimes they mis-target, short change the research effort or just come across a prospect who's there to win the session, which usually means to lose the opportunity.

So great sellers experience what the rest of us do as well, episodic failure. The difference between the remarkable sellers and the rest of the pack is that the exceptional performer doesn't judge himself by an unfortunate outcome. That is to say, he doesn't become that failed visit. That's just not who he is.

The great seller takes a much longer view. The bad call was an occurrence; an event, rather than an inevitable outcome in the absence of sheer luck. He sees it for what it is; a moment in time...a short moment over a long time period. So, he doesn't get down. His self-image doesn't take a "hit." He either has an immediate take on what fell through or makes an artful analysis. If no answer satisfies in either case, he moves on, comfortable in the knowledge that, "hey, stuff happens." It's not a defining moment. There are lots of folks out there to meet with and help. Tomorrow's another day, as is the day after.

Great sellers don't get down and lose time. They get challenged. They never stop learning and growing and trying to make life/business better for all with whom they come in contact.

They take a longer view.

4 in 10 Seek American-Made Vehicles First

Here's a bit of good news for those venturesome souls who are buying up stock in the back-from-the-dead General Motors: A Rasmussen Reports poll fielded this month finds 41 percent of respondents saying they look for an American-built car first when they're in the market for a vehicle.

That nearly equals the 44 percent who said they look for "the best possible deal regardless of where it was manufactured." Just 12 percent said they look first for a foreign-built car.

The buy-American constituency has risen significantly since a similar Rasmussen poll in June 2008, when it stood at 32 percent. And the best-possible-deal vote has declined from its June figure of 51 percent.

Of course, with factories that build foreign-based brands having proliferated in the U.S., it's more complicated now to decide just what constitutes an American-made car. Forty-one percent of respondents subscribed to the view that buying a foreign brand of car that's manufactured in the U.S. is "the same as buying an 'American' product." Forty-two percent dissented from that notion, and the rest were unsure.

Looking at the matter another way, the poll found 59 percent saying they "consider just the Detroit Big Three -- Ford, General Motors and Chrysler -- to be American car companies."

(Source: Adweek, 11/19/10)

Consumers Set High Bar for Cause Marketing

It wasn't long ago that "cause-related marketing" was a novelty. Then it turned into a necessity -- something companies had to do if they wished to be welcome in polite society. Now, as the new edition of Edelman's annual Goodpurpose study makes clear, consumer expectations have evolved in such a way that companies must make sure their involvement with causes amounts to much more than a marketing ploy.

These days, found Edelman, consumers set the bar high for companies when it comes to their involvement in social issues. Among respondents to polling in the U.S. (fielded in August), 87 percent agreed that "business needs to place at least equal weight on society's interests" as it does on its own interests. And this can't be just a matter of handing one of those oversized checks to some charity: 62 percent said it's "no longer enough for corporations to give money; they must integrate good causes into their everyday business." Of course, this doesn't mean money is a trivial aspect of corporate commitment to good purposes, as 63 percent of respondents also said they "expect brands to donate a portion of their profits to support a good cause."

According to Mitch Markson, chief creative officer at Edelman and founder of its Goodpurpose study, "It's a matter of brands ingraining the cause into their DNA." And that, in turn, means the cause should have some plausible connection to the brand's own business. "I think it speaks to the need for a company to ask what its business purpose is and to find its cause through that purpose. If you go back to what is the purpose of the brand or company, I think there's a natural pathway to finding a cause," he says.

Mitch Baranowski, principal and chief creative officer at BBMG (a firm whose specialties include analyzing consumer interest in corporate behavior vis-à-vis environmental and other issues), concurs on the importance of choosing a cause that truly fits the company's core identity. Speaking of "conscious consumers" who are alert to matters like corporate social responsibility, he says, "They see companies and causes in a holistic sense. While they often see the benefit of more traditional cause-related marketing, they are candidly more interested in seeing companies be the cause -- for example, Tom's Shoes and Newman's Own -- rather than engage in 'stick-on' cause-related marketing that risks being inauthentic if done poorly." Drawing the implication of this for companies, he says, "If you are to engage in cause marketing, do so in a way that is authentic to your brand. The cause should be relevant to your consumer set and align with who you are and what you do. It shouldn't be an order dictated by the C-suite for no apparent reason."

'A UNIQUELY POWERFUL POSITION'

If consumers expect a lot from business in committing to good causes, it's because they think it's capable of a lot -- and perhaps all the more so in an era of skepticism about what government can and should do. Eighty percent of Edelman's respondents agreed that "corporations are in a uniquely powerful position to make a positive impact on good causes."

Happily for marketers, it's not purely a matter of imposing obligations on companies. Consumers will also reward a company that makes engagement with good causes an integral part of the way it does business: 72 percent in the Edelman polling said they're "more likely to purchase a product from a company that supports good causes and has fair prices than a company that simply offers deep discounts." And while a willingness to pay a premium for cause-supporting products is less than universal, 34 percent said that, in the past six months, they've "purchased a brand that supports a good cause even if it was not the cheapest." That dovetails with the findings of recent polling by BBMG in which 81 percent of respondents said they bought more "socially and environmentally friendly products and services" in the past year than they'd done in the preceding year.

Consumers will also enlist as unpaid spokespeople for brands they believe have a purpose beyond just making profits. Sixty-six percent of Edelman's respondents subscribed to the statement, "I would help a brand promote their products or services if there is a good cause behind them." Surprisingly, given the foibles of human nature, the impulse to reward good corporate deeds seems more common than the inclination to punish bad ones. If a company failed to engage with worthy causes, 34 percent "would criticize it to others" and 36 percent would "refuse to buy its products/services."

CONSUMERS AS PARTICIPANTS

If a company does integrate cause-supporting behavior into its normal operations, rather than making it a conspicuous add-on, does this raise a danger that consumers won't notice its good deeds and give credit for them? Not if the company makes a point of involving consumers in the cause-supporting action -- as, for instance, Pepsi (an Edelman client) has done with its Pepsi Refresh project, which invites consumer input in choosing causes to be funded. In the social networking era, people expect and seek such participation, especially since they feel it will yield the most benefit for good causes. Edelman found 74 percent of respondents agreeing that "brands and consumers could do more to support good causes by working together."

Says Markson: "To me, it's about whether the consumer is partnering with and participating with companies to do something good. If you're involving consumers in your community of cause, we'll all get the credit."

This also empowers consumers to affect the corporate world in a way they normally cannot. Says Markson of such corporate-consumer cooperation on behalf of causes: "It allows consumers to put their mark on it. They can't be involved in setting price or developing product, but they can be involved in defining a company's engagement with a cause."

The long economic downturn has lent a greater urgency to this. Markson notes that the overseas portion of the Goodpurpose polling found people in emerging markets "have higher expectations of companies on social issues than we do in the West, because they're closer to social need." The bad economy here may be creating a kind of global convergence in that regard as economic hardship bites harder for many in the developed countries. This also blurs the divide between self-interest and social interest. Says Markson: "Thinking about 'me' may also be thinking about a social issue, because it might affect 'me.'"

When Edelman asked respondents in the U.S. to identify the causes they'd like to see companies engage in, "alleviating hunger and homelessness" topped the list, cited by 89 percent. "Maybe we're getting closer to the need here, too," Markson says.

(Source: Brandweek, 11/16/10)

Used-car shortage strains dealers, boosts lenders

An industrywide shortage of newer, more desirable used cars is a hardship for dealers looking for used inventory and for customers looking for a bargain, but it's a windfall for auto lenders, which have stopped losing millions of dollars on depreciated off-lease cars and trucks.

For example, the volume of off-lease vehicles coming back to Ford Motor Credit Co. will fall in 2011, echoing a drop in retail volume in 2008 and 2009.

Ford Credit expects only around 230,000 lease terminations in 2011, down from 400,000 this year, says CFO K.R. Kent. That's a decline of 43 percent.

For dealerships, a shortage of off-lease cars, trade-ins and former rental cars has retailers scrambling to buy newer used vehicles. As a result, those vehicles are more expensive. And dealerships are buying more off-lease units instead of sending them back to the lender to be auctioned off.

“As auction values have improved, we have seen lease return rates decline,” Kent said this month at a conference sponsored by Bank of America Merrill Lynch in New York.

Fewer returns
In the third quarter, 61 percent of Ford Credit lease terminations came back to Ford Credit, down from 70 percent a year ago. Ford Credit's average 3-year-old off-lease vehicle fetched $16,235 at auction in the third quarter, up from $15,615 a year earlier.

The shortage of off-lease units is helping to drive up used-car prices for the whole industry.

Auction firm Adesa Inc. reported that the average wholesale used vehicle was $9,768 in October, up 3.2 percent from a year earlier. Tom Kontos, Adesa executive vice president, said auction prices may vary seasonally, but overall, tight supplies of used vehicles should continue to support used-vehicle prices for the rest of 2010 and into 2011.

Better results
That's generating much better auction results on off-lease units for auto lenders such as Ford Credit. Instead of more or less automatically losing money on lease returns, in some cases auto lenders can actually come out ahead on off-lease cars and trucks that retained their value better than expected.

Adam Berger, vice president of sales for Milwaukee-based Doering Leasing Co., told a recent finance summit that his company's corporate lease clients are recovering up to $5,000 each on off-lease cars because the cars have appreciated so much in value. His clients include big corporations that lease fleets of cars for the use of their employees.

Most leases are closed-ended. That means the lender bears the risk that the car may be worth less than the residual value that is set at the beginning of the lease. Of course, the lender also can reap the reward if the actual value of the off-lease unit turns out to be greater than expected. That rarely happened before this year, but the rise in used-car values has made it happen for several auto lenders.

In contrast, Doering clients have so-called open-ended leases. In their case, the fleet customer bears the residual risk — and reaps the reward, Berger said.

At Ford Credit, improved residual values in the third quarter accounted for an improvement in pretax earnings of about $100 million, the company said last week.

Digital Advertising Is Driving Growth of Traditional Media

Traditional advertising investments in television, print, radio and out-of-home are projected to grow only 1.8% but digital advertising investments in these media will grow by an estimated 28%, spurring total 3.6% growth in traditional media categories, according to Jack Myers Media Business Report's Media Vision 2020: Media, Advertising and Marketing Economic Health Report 2010-2020. The Report projects total 2010 U.S. marketing communications and advertising investments will grow 3.2% to $601.5 billion. The newly recalibrated data includes 57 media and marketing categories and, for the first time in any advertising analysis, breaks down digital and traditional investments for 14 traditional media and marketing categories.

Consumer print magazine advertising is projected to increase 1.0%, but magazine publishers' digital advertising is estimated to increase 8.5% to nearly one billion dollars, driving magazine publishers' combined growth to 1.4%.

The new Myers Report includes detailed data on advertiser investments in Online Originated Display Advertising, Online Originated Video Content & Advertising, Mobile & Apps Advertising, Satellite/Internet Radio Advertising, Interactive/VOD/Addressable TV Advertising, Point-of-Influence/GPS Advertising, Videogame Advertising, Social Media/Word-of-Mouth/Conversational Marketing, Offline Public Relations, Branded Entertainment/Product Placement, Search Marketing (Online/Mobile), Experiential/Event Marketing, Cinema Advertising and Out-of-Home/Place-Based Advertising.

The report eliminates the traditional barriers between above and below-the-line marketing budgets. Marketers are integrating their budget allocations to reflect the increasing cross-over between their marketing and sales functions, which have historically been separated. This trend is especially apparent in social media, which is growing 50% to $1.2 billion in 2010. (Most Facebook advertising is accounted for within the new Online Originated Display Advertising category, is which increasing 9.2%.)

Small Business Saturday Planned for November 27

U.S. Consumers Encouraged to Join the Movement and Spread the Word

First there was Black Friday, then Cyber Monday. Now, on November 27, comes Small Business Saturday, a day to support the local businesses that create jobs, boost the economy and preserve neighborhoods around the country. Small Business Saturday is a national movement to drive shoppers to local merchants across the U.S.

Joining American Express OPEN, the small business unit of American Express, in declaring the Saturday after Thanksgiving as Small Business Saturday, are an initial group of more than a dozen advocacy, public and private organizations. To support Small Business Saturday, American Express has launched a comprehensive national advertising campaign that includes a heavy Radio component.

Small businesses are critical to the nation's overall economy. According to the U.S. Small Business Administration, there were nearly 28 million small businesses in the United States last year. Over the past two decades, they created 65 percent of net new jobs. Their importance to local communities extends even further. For every $100 spent in locally-owned, independent stores, $68 returns to the community through taxes, payroll and other expenditures, according to the small business advocacy group The 3/50 Project.

"Small business is the engine of job creation in the US economy," said Kenneth I. Chenault, chairman and chief executive officer, American Express. "It is also among the sectors hardest hit by the recession. By spreading the word about Small Business Saturday, we can help raise awareness about the critical role small businesses play in cities and towns across the country at a time when they need support the most."

"Small businesses are the backbone of our economy and the glue that holds communities together, and we've always sought new ways to support them -- something that became even more important when the national economic downturn began," said New York City Mayor Michael R. Bloomberg. "When Ken Chenault told me about his idea for Small Business Saturday, I jumped at the opportunity to participate. We've all heard about Black Friday and Cyber Monday. This year, if you have the opportunity to shop on the Saturday after Thanksgiving, make it a point to visit local small businesses. It really can make an enormous difference for merchants trying to succeed."

"When we invest in small businesses, we are investing in Main Streets -- the places that give our towns and cities a unique sense of place," said Stephanie Meeks, president of the National Trust for Historic Preservation, which includes the National Trust Main Street Center. "By celebrating Small Business Saturday and shopping at independent businesses, everyone can play a part in strengthening our economy and supporting revitalization on our Main Streets."

(Source: American Express, 11/08/10)

Daily Sales Tip: The Shorter the Better

You have to ask questions that truly engage the customer. However, this doesn't mean you need to develop complex questions.

Instead, the best tactic is to ask shorter ones. Long questions tend to result in short answers, while short questions will generally result in long answers.

An example of a great short question is, "Why?" In my opinion, there isn't a better follow-up question you can ask after the customer has shared with you some information.

Consider how your customers would respond to other short examples like, "Can you elaborate on that?" and "Could you explain more?" These shorter questions elicit detailed responses and that's just what you want.

On the other hand, asking complex questions often tends to perplex customers. Because they are not sure what you are looking for, they respond with the universal answer representing total confusion, "What did you say?"

Questions should not be your means of showing your customers that you are an expert. Save that for your statements.

Moving Beyond Banners

As most everybody connected with the industry has seen, domestic ad spending is on the rebound in 2010 with a nearly 6% increase during the first half of the year alone. A September report from research firm Kantar Media only broke out display spending for digital, but overall as a category, display was up nearly 6%. AOL also announced that it was increasing the size of the banners it runs, further providing testament to this statistic.

While the trend appears to be "bigger is better," I'd like to believe that the industry has evolved "beyond the banner" in online advertising. Storytelling through integrated sponsorships is far more effective at enhancing awareness, preference, and ultimately, purchase intent for the product or service being advertised.

Organically integrating a brand into site content provides a level of interaction that is nearly impossible to achieve with a standard (or nonstandard) media unit. Users are sure to rebel against these larger ad formats, whereas seamless integration of a brand into the content that users already want and consume means you are far more likely to actually engage them.

In a community setting, similar to social networks like Facebook, the power of word of mouth is magnified exponentially. Users are far more likely to trust their friends or people they know over those that they do not. This trust can help virally spread the word regarding an advertised product or service more easily. By "pulling" rather than "pushing" users into this type of messaging, the results are even more amplified.

Of course, there are inherent costs associated with integrated brands but it is difficult to argue with the overall effectiveness of these campaigns. They involve multiple departments within an organization; creative, development, engineering, sales, and account management, to name a few.

The team needs a full understanding of what a client's objectives for the advertised brand are, and it helps to understand the offline marketing initiatives of the brand in order to effectively connect the dots between linear and digital. If you properly achieve this, the results speak for themselves.

It takes a lot of work to get this right. However, isn't this what we should be accomplishing for our partners anyway? Sure, the results related to display speak for itself -- advertisers are spending more money on these ad units, which is good for all of us connected to the industry. That does not mean, however, that this money is being spent as wisely as it could be, or better yet, that the money being spent and the clicks generated are leading to increased sales.

I am aware of the reports out there suggesting the obvious impacts on consumer behavior as it relates to display units, but also realize that CTRs (click-through rates) are declining. The larger and more obtrusive these ad units become, the more frustration web users are going to experience, which in turn will lead to even more "banner blindness", a term that is becoming increasingly popular, based on the declining CTR's experienced throughout the industry.

As a result, we get innovation such as AOL's "Project Devil" or other advances that really do not improve a site user's experience. Is that really what is needed in an increasingly fragmented and more socially-connected Internet experience?

I would prefer to think that web users are more likely to accept sponsorships and other forms of integrated advertising that actually align with their overall experience on the site being visited. In essence, by doing this we are actually "listening" to them, and making the experience more relevant.

It's certainly no secret that "interaction" and "engagement" are two of the most over-utilized terms associated with online advertising this century. But if we can get members of a community to spend more time with brands within more integrated environments, we are improving the overall experience and putting the brand in a more favorable light with users who would previously only see banners and largely ignore them.

I do believe we can do better as an industry. We need more innovation in this area. Sites like Twitter, Facebook and Foursquare obviously realize this, and are aiming to innovate consistently. Other sites in the social networking/virtual world space are also engaging users in a manner that is more consistent with a brand's ultimate goal -- whether it is awareness or a myriad of other ad effectiveness metrics.

I think that this trend will continue and I'd like to hope that we don't end up in a zero sum game of "bigger is better." Nobody actually wins in that scenario.