In case you missed it, BusinessWeek just ran a terrific article, The New Abnormal, on the current state of consumer spending and psychology.

The teaser sub-head says it all: “Americans are broke and depressed — and also swilling $3 lattes and waiting in lines for iPhones. Welcome to the schizophrenic economy.”

It’s a marvelous article, with some intriguing theories and wonderful examples of individual consumers engaging in their schizophrenic behavior … like the couple who buy towels at a discount store on their way to a spa vacation in Oregon! It seems like American consumers are genetically wired to spend.

Interestingly, companies with “premium” brands like Mercedes, Starbucks and Apple are doing very well in 2010, whereas household goods marketers like Proctor & Gamble are still in the doldrums, as their “name” brands are abandoned for generics. The explanation seems to be that where consumers perceive real differentiating value, they will still pay for the premium brand, but where they perceive a commodity product, they go for the cheapest.

Is there a fundraising point to all this?

In the broadest sense, I’d posit that marketers (of which fundraisers are a subset) should always be avid students of consumer psychology and behavior. As consumers, individuals choose to devote some share of wallet (or none at all) to charitable contributions, making that decision in the full context of their other spending. I think it’s useful to have some understanding of the full context, and consider whatever questions that might raise for you.

For example, accepting the picture painted by this article, would you want your nonprofit to be perceived as a premium brand or the commodity product? What should you do about it?

Or, during this economic downturn, should you be hesitant about asking for donations (perhaps even yourself viewing the donation as an indulgence), or might your prospects actually see the opportunity to give as an aspect of their determination to be “normal” — expressing, even rewarding, themselves? Does the tone of your fundraising signal hesitancy or affirmation?

I say, understand and engage your donors as the consumers they are.

Tom

This article was posted in: Communications, Nonprofit branding.
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