It’s extraordinary isn’t it how so much has been made of the emergence of China and India and of the impact of new technology on the world’s economic wellbeing – and yet a factor bigger than either of these dynamics has been comparatively ignored.
The rise in the participation of women in the economy through full-time work has contributed more to economic growth than either Asia or online globally. Some have noticed and commented – author and speaker Fara Warner has written an eye-opening and important book “The Power of the Purse”, Tom Peters has been on about this for years and in 2006 the Economist coined its own term ‘womenomics’ to describe this gender-based economic upswing – but by and large, the attention pales in comparison to the space writers and journalists have devoted to Silicon Valley, the rise of the subcontinent and the Red Dragon, and of course social media.
And yet, in the first world at least, while there has been little upheaval in the layout of the executive washroom, the social situation could not have become more different. In the US, the participation of women in the workforce has risen from just 20 percent in the early 20th century to close to 50 percent today, and it is still rising. The numbers around that speak for themselves. According to Gerry Myers, American women now earn, control, and spend trillions of dollars annually. In fact, they are responsible for a whopping 80 – 85 percent of all purchasing decisions. Since the Second World War, they have transformed from the “silent economy” spending ‘someone else’s money’ to an economic force to be reckoned with, very much in charge of their own spending power.
So it’s extraordinary that so many marketers still regard marketing to women as akin to catering to a niche market. As Fara Warner points out, when you recognize that women are not just the majority but actually the vast majority of consumers, and that their power is only going to increase, it completely changes the commercial urgency of getting to grips with women buyers. It also helps explain why and how brands have evolved in recent years, and why the “experience economy” can only become more important.
The buying power of women has soared, as women’s incomes have jumped 63 percent over the last 30 years. By contrast, the median income for men seems barely to have moved. Referring to several companies that have seen and responded to what is happening, Warner is quoted in a Tom Peters interview, “These companies have learned that it is no longer enough to know that women are their most important consumers with lots of money to spend … The future requires a deeper understanding of how the trends in women’s social and economic status will continue to transform women and the world around them for decades to come.”
This, women and gentlemen, is probably one of the biggest shifts we will ever see. It’s happening right before our eyes. And too many marketers seem to be too busy looking elsewhere to notice its depth, significance and resilience. Perhaps the most powerful implication, and the key focus of this paper, is what this shift in power will come to mean for how organizations must market, and the differences that femonomics must generate in the way we think about selling models.
Goodbye Selling To Budget
Let’s start with the way men like to sell. Intensely. Competitively. Combatively. Because that’s the way many of us have been taught to sell. Hard. Cast an eye across to Wall Street to see this philosophy allegedly hard at work. There, it is said, clients have been reduced to “muppets”. Most of the sales techniques we still use these days are based on an outmoded model, developed in the post-war period. This was a time when men still sold largely to men – and everything was about convincing, overcoming objectives, nailing the sale, making the budget. These techniques still work OK for men – for now anyway – because the way men buy has been transactional, price-based and testosterone-powered for so long.
Unfortunately, these techniques continue to fail with women, because they are aggressive, relatively unsophisticated and built around promises rather than sincerity.
It’s tempting perhaps to confuse a softer sell with an easier sale. Women often buy in a more considered, relationship-based way, but that doesn’t mean for one moment they’re going to be easier to convince. The wider implication is that femonomics demands not just products that address women’s priorities but also a complete rewrite of the sales process. (It is also becoming clearer, as Warner shows in the case of MacDonald’s in her book, that over time male consumers do follow where women lead.) And that must mean we’re heading away from transactional, hard-nosed, budget based, quarterly driven marketing models towards more relational, considerate, value driven marketing within a longer term, repeat business framework. Forget the old catchcry of lifetime value. Valuable relationships over the wider economy are going to be increasingly derived from their women-time value. A relationship that women feel comfortable giving their in-demand time to (before, during and after they part with their cash).
Sales, and therefore the marketing that generates those sales, is evolving from internally-facing “making budget” to externally driven “exceeding needs”. And the way brands monitor and evaluate sales and customer relationships will need to alter too to reflect that. The next era of CRM will stop plotting how customer relationships are managed – because let’s face it, who wants to be managed? – and increasingly focus on ways to ensure customer relationships, particularly the relationships that companies have with women, stay fascinating.
In other words, women are reshaping the sales funnel. It’s becoming more instinctual, more multi-dimensional and more rewards based (in the broadest interpretation of that word). CRM is increasingly about customer relationship motivation – monitoring the buying and experiential preferences of buyers and intelligently tracking, responding and proactively marketing to those changing inclinations through a mass-customization model in order to outwit, out-charm and out-motivate competitors.
A New Level Of Pitch
Men love to pigeon-hole women as impulsive and obsessive shoppers. What they often overlook is that women are also more sophisticated in their buying habits and much more brand and trend aware than their male counterparts. Much of the rise in the vaunted democratization of the luxury market, for example, can be attributed to the aspirations, tastes and spending power of women with more spending capacity. The rise in the appreciation of aesthetics has also seen more and more designers putting their names into high street lines. At the same time, prestige car manufacturers are changing their models and their price points to welcome in women consumers.
Women in other words have hugely influenced the rise of design as a consumer phenomenon – from the way products are packaged to the environments within which sales take place.
But it’s more complex than just taking everything universally upmarket. According to Michael Silverstein of Boston Consulting Group, women shop differently, very differently, from men. They research more extensively and are less likely to be influenced by ads. All of which makes for a very different marketing style. And a very different sense of what’s valuable.
Heavy media campaigns alone won’t cut it either, because women increasingly look for endorsement of the products they prefer through the magazines they read and the sites they visit rather than just awareness. They want detail before committing. And they are more interested in the indirect selling style of product placement, sponsorships, and editorial. In other words, they are looking for messages and ideas they identify with rather than tradition repetition and interruption-based advertising. Then, once they are motivated to buy, these time pressured buyers want experiences that mirror their enjoyment of surprise, recognition and reward and their status as senior decision maker at home and, increasingly, at work.
Those shifts in purchase consideration are reconfiguring how advertising works. They also represent a huge opportunity for social media and of course for content marketing. In her post “Social Media Trends Among Female Consumers in 2012”, Susan Gunelius points to a study by BlogHer and Vision Critical that shows women trust the information and opinions they read on blogs and social media sites, and they make purchase decisions based on that information. This, says Gunelius, is data that brands need to pay attention to.
What’s more, she says, there is still plenty of room for growth in this more consultative model and the proliferation of mobile devices could be a key catalyst for that. While men prefer to keep things brief, women like to converse. And marketers need to recognize that by building relationships with their customers that are increasingly talkative. Gunelius quotes BlogHer, “Content helps deliver value, not distraction. Content assets deliver long-term value. Online media is delivering inspiration, not just information. Deeper trust drives better conversion into action.”
But before people will listen, brands need to earn their interest. For me, that means more careful building of brand equity, a greater degree of emotional intelligence in the way companies position products, greater reliance on diverse media to lift awareness, an increasingly content-focused strategy and much more thought-through, holistic and engaging shopping experiences generally. It’s been fascinating to watch retail outlets that used to sell purely on price make a conscious move to lift their environment so that they are more conducive to lingering, and more aligned with what (women) shoppers expect to get with their purchase.
Longer is the ongoing black. Waist-high bargain bins and price cutting may work wonders for males with attention deficit, but they fail to impress knowing women shoppers – and more and more, shopping environments and the relationship cultivated between supplier and buyer need to reflect that. In a day and age when everyone can buy almost anything from anywhere, the “feelgood” factor at every customer touchpoint has never been more important.
Youth Is Not What It Appears To Be
While many marketers still seem obsessed with talking to Gen X and Y consumers, and still think of them as the longest term market worth tapping, the most powerful women financially are often past their youth. Baby boomers are the largest generational demographic in the world, and, amongst this group, women outnumber men and often financially outmuscle them. That makes them an extraordinary marketing opportunity – and not just for age-defying beauty products.
It’s easy to forget, for example, that this same group account for more than half of the total US consumer electronics spend. That’s around $55 – 60 billion a year! Yet many of these women buyers still feel unacknowledged in terms of product design, advertising and customer support.
A study of women shoppers in the UK showed 35 percent of female internet users polled said they would increase their spending on consumer electronics if marketers and retailers thought harder about how they approach them and offered more guidance in stores and on e-commerce sites. The same study showed one in two women walk out of shops and leave websites without buying anything because they’re unable to find what they want. One third of women do not feel confident enough to ask questions in technology stores. Almost one in three women do not consider technology advertising relevant to them.
These figures represent an extraordinarily large and valuable group of disenfranchised buyers, and therefore potentially swing buyers, who believe their needs are not being recognized, never mind met. Securing just a tiny fraction more of that market would be a coup worth millions and millions of dollars in a sector renowned for its competitiveness.
The implications for interaction, both online and offline, are obvious.
Women baby boomers are a group who, trendspotters say, will continue to travel more, who are highly motived to continue working and therefore earning after retirement, that are amongst the highest proportion of internet users, and who are likely to be in charge of unprecedented wealth.
All of this makes them a substantial force to be reckoned with, and an audience that marketers need to be talking to with enthusiasm and intelligence. It’s time marketers woke up to the fact that “older” women’s wallets are a huge influence in almost every sector, and that many of these buyers have been marketed to for long enough periods of time to have seen, and grown tired of, the tricks that used to work. New times and new dynamics require fresh approaches. These are not “old ladies”. They are young-at-heart market drivers looking to get more out of every ounce of life.
This is also a group with strong community motivations and a much more ethical take on what they will purchase. Responsibility continues to assert more and more influence, as consumers become increasingly aware and politicized around their spending dollar and look to spend money with brands that express points of view that they concur with.
Marketers need to recognize that more and more they are dealing with morally motivated consumers who want the world to be a safer, fairer, cleaner, more stable place, and want to see that vision reflected in the products and services they buy and the opinions articulated by the companies they buy from. Cause is an increasingly powerful motivation because it appeals to women’s inspiring sense of fairness and social justice – something Anita Roddick recognized literally decades ahead of most.
In more recent times, it’s been fascinating to witness more and more people – women, generally – in my workshops saying that products are about more than just what they get. Just as brands say something about who they are as a buyer in terms of personality, so choice of product is coming more and more to be a statement about a person’s wider awareness. Consumers are increasingly asking new questions – ethical questions, source questions, environmental questions – and manufacturers must address these, not as a compliance requirement but as a competitive opportunity.
It’s easy, in the light of various debacles, to see these only as purity concerns. Food miles and country of origin labeling are two examples of how buyers are demanding to know more about what they buy for themselves and those they love, and to satisfy themselves that in doing so, they are not condoning child labor or slavery. You can be sure though that what may be happening now in the supermarket will soon spread to the wider high street as women use the power of the purse to push for issues that matter to them, like fairer trade.
But I think it actually goes further than that. In an insightful post on HBR, Nilofer Merchant makes the point that purpose also pulls people into communities, and that these communities, powered by social media, are also shifting the relationship between organizations and individuals. Perhaps they are rightsizing it – in the sense that consumers have now found a simple and immediate way to galvanize, achieving a critical mass that noticeably increases their influence. As Merchant points out, “The social era will reward those organizations that understand they can create more value with communities than they can on their own.”
She goes on to identify five types of community: communities of proximity, where participants share a geographic location; communities of passion, brought together by common interest; communities of purpose, who want to build or change something together; communities of practice, where people share a career or participate in the same type of business; and communities of providence that allow people to discover connections with others.
This concept of working with consumers as communities represents not just a change in the dynamics of the relationship but potentially new ways for brands to collaborate with buyers. It’s moot as to whether social media generated this shift in power or facilitated a change already put in play by the increasing influence of women in the economy. However it happened, it’s important.
Beyond Clichés
No-one’s suggesting for one moment that things are perfect. Far from it. Women are still paid less for the same or more work, and a robust, fair, working mother business model is still just a dream for many women even in supposedly advanced economies. But the sheer numbers of women in or returning to the workplace, and the influence they have over the wider economy, gives me confidence that tipping point dynamics will prevail over the medium term.
In their advertising, marketers should be applauding and celebrating the versatility, flexibility, organizational skills, productivity and multi-tasking abilities of women – not looking backwards to convenient clichés. Why, for example, do so many of them believe that the only way to talk to women in the home is to fill their ads with women in “traditional” roles, and why do they assume that the woman who is home looking after her sick child this morning won’t be in a boardroom, or on the phone this afternoon making decisions worth thousands, perhaps millions, of dollars?
They continue to cram their marketing messages with images that are increasingly at odds with reality in the mistaken belief that by doing this, they’re being safe and uncontroversial. In point of fact though, formulaic, predictable, glib marketing is a blunted tool, and the audience turn-off rates reflect that. Women, quite rightly, feel they have earned the right to be represented in ways that show the extraordinary economic gains they are making.
More importantly, the aspiration and loyalty opportunity for smart marketers is huge. Showing women of all ages and sizes in their advertising, showing women in leadership roles, showing women as entrepreneurs, women of different races, even different religions – these are all examples of how smart marketers can not only celebrate and endorse their biggest market, but also telegraph empathy, commitment and confidence.
Time For A Rethink
Many brands remain curiously out of step. Banks, insurance companies, credit card companies and financial planners should be targeting women far better and far more specifically than they currently do. Power companies and phone companies aren’t even across the idea for the most part (and yet women are the very people paying their bills). There should be many more women in the building industry. The computing industry is still a mainly-male business. The list goes on.
There can be little doubt that as women become even more aware of their financial influence and economic strength that the ‘push’ dynamics of a few will become the ‘pull’ dynamics of the many, as women demand more respect, attention and business done their way. Organizations will have no choice but to regear their cultures and adjust their decision-making when pressure turns to shove on the bottom line. That means not just new attitudes to female customers, but new service models and ways of selling that gel with the way women like to buy.
Fara Warner again – “A lot of companies have paid lip service and said the right things about what they were going to do for women. But they never really followed through with what had to be done in terms of corporate culture to get the company to really re-think the way it sees women. Not just how one or two people inside the company see women, but how the whole company focuses differently on this market.”
Gunelius’ comment about how to appeal better to women online seems to me to have a wider application that all marketers should be listening to. “Building brand trust is critical to brand success, and social media gives companies the ability to do exactly that. It’s an opportunity that can also drive sales that still has room to grow. Brand managers should focus on creating diverse content that’s useful, trustworthy, transparent, and visual …”
The influence of women on almost all aspects of branding is there for those that care to look. There’s nothing to suggest it won’t continue at a pace. That’s why organizations in my view need to address the economic power of women astutely and smartly, and respond to femonomics with even more enthusiasm and resource commitment than they have thrown at globalization.
That’s about a whole lot more than adding a new range of pretty colors to the product lines.
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