Recession-Era Advice
Doug Wood has been watching TV very carefully, and has advice for marketers fielding promotions after the Sept. 11 attacks: Don’t cut corners.
“In past recessions, we’ve found ourselves busier” vetting shady promotional offers, says the partner at Hall Dickler Kent Goldstein and Wood, New York City. “Consumers are fickle, and marketers try different tacks to get their attention. This [episode] is a weird situation. It’s not only a recession, but consumers just don’t feel like buying. It’s a malaise.”
That may prompt marketers to field more aggressive price incentives, some potentially questionable. That, in turn, will spur attorneys general to crack down.
“Just because we’re in recession, the AGs won’t become nice guys,” says Wood. “They’ll scrutinize offers as they always would.”
Wood expects AGs to start eyeing promos — especially discount offers such as zero-percent financing — by January. “There may be a lower level of scrutiny now [as people are thinking about other things], but the more abusive offers get, the more swiftly regulation will resume.”
In the weeks after Sept. 11, Hall Dickler saw “marginal” promos and some unclear disclosures, says Wood, citing an auto maker TV spot offering zero-percent financing for “very qualified buyers.” “What does that mean?” he asks. “What are the restrictions? I see offers on TV and wonder what’s behind them.”
Wood’s advice: Make sure your offer is legitimate, and make all proper disclosures clearly. Don’t offer a discount that’s only good for two days, then jack up the price. Don’t confuse consumers.
“In an environment with a boat-load of offers out there, we’ll hear more noise from disgruntled consumers. That has a ripple effect with regulators,” he says.
The bright side is, the recession could turn by second-quarter 2002. In the meantime, promotion veterans should maintain high standards and novices unused to fielding dramatic price deals should seek legal guidance from experts.
