In the 2004 epic “The Day After Tomorrow,” we get a glimpse at what the end of the world might look like. After ignoring the effects of global warming for decades, the environment itself decides to exact revenge on mankind through a series of simultaneous atmospheric catastrophes including hurricanes, floods, tornadoes, and of course, the start of the next ice age. Scientist/Professor Jack Hall (Dennis Quaid) volunteers to try and save the world while simultaneously trying to rescue his teenage son from New York City. By the end of the movie Professor Hall finds his son (an amazing feat in and of itself), realizes that he can’t change the earth’s forces, and defies logic by heading north to safety instead of south, where most of the survivors are fleeing (toward warmer climates that no longer exist). What you realize by the time the credits are rolling - and the surviving cast members are hugging each other - is that you haven’t witnessed the end of the world after all; you just witnessed the end of the world as you knew it. Life would be different going forward, but life would continue.
I can’t help but see the similarities between “The Day After Tomorrow” and what’s happening in reaction to the price of gasoline as we speak. Yes, the price per gallon dropped in August to under $4.00 (visualize celebratory mixing bowl dance move here) but don’t get sucked in, my friends. We’re not on our way to $1.15 a gallon (1995 average price). In fact, you have a better chance of seeing $5.00 a gallon in the next twelve months than seeing the Toronto Blue Jays win a World Series in the next five years (sorry Toronto). Do the math and you’re probably flirting with 10% of your net income going into your gas tank (assuming you come close to the mileage that my family will log in their cars in 2008 - and I haven’t even talked about home heating oil, light, and electricity!
So what do we as consumers do? It’s obviously the end of the world.
Or is it? Clearly, this unexpected and rapid increase in gasoline and related utilities prices is creating a significant hardship for some. A recent a&g consumer panel revealed stories of folks who are buying less food and eating less because of new-found cash flow difficulties. But for most of us caught up in the panic, $4-a-gallon is simply disturbing, disruptive, and downright intrusive. Forces beyond our control (overt movie connection here) are forcing lifestyle changes on us and we don’t like it. Those forces are changing the way we shop as well as what we shop for, but they aren’t preventing us from shopping. These forces are encroaching on our God-given freedom to use an electronic car starter, to sit in line at the drive-through ATM and to drive around alone all day in a Chevy Suburban–but they aren’t preventing us from driving.
Yes, life as we knew it may be over, but just like in the movie, life will go on. Short term there will be some winners (Walmart) and some losers (casual dining eateries) but we as consumers are “course correcting on the fly.” We all had household budgets that were based on gasoline costing $X a gallon and now it costs $Y. Order will be restored and life will go on.
How do we move on to the epilogue? Here’s some friendly advice: first, to the marketing community–settle down folks. Be patient and tell those venture capitalists on your boards to be patient too. Are they liquidating their personal portfolios because the market is down? That’s what reputable investment managers are urging their clients NOT to do. Your customers will be back. They have to come back because they need you. The problem is, you lost sight of that fact in all the panic. You put aside everything you know about the power of the brand and moved directly to panic/discount mode. If all your competitors lower their prices simultaneously (and guess what, they have) then why should consumers buy your product? It’s absolutely appropriate for you to be enhancing your value offering to the consumer in times like these; but since when is value only defined as lower price? Go ahead and lower your price (trust me, they’ll appreciate it) but what else can you do to add value to your product? And don’t lose sight of your brand. It’s why your customers are your customers. That hasn’t changed. Remind them what you stand for and why they chose you in the first place. I know what you’re thinking: you’re thinking this guy is talking about branding and you need to drive sales. Well, who says that branding and sales building are mutually exclusive? Great advertising should do both.
To the consumers out there, this is your time (I know it may be hard to believe that if you’re trying to sell a house). Marketers think you’ll never be back, as if you’ll never buy a pair of pants, or eat a restaurant meal, or purchase a telephone solution for your regional office again. They’re scared and it shows. Life going forward will be different (can you spell woodstove?), but life will go on. Yes, it’s a little scary because we’ve never been here before, but this is the very nature of a free market system. So, seize the moment and wallow in the incentives, discounts, rebates, and freebies that are falling from the sky–before Dennis Quaid shows up and restores calm.
