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Wallet Half Shut

Understanding the post-recession consumer is a hot topic in the press. Recently, we released a study done in partnership with Ogilvy on this very topic. The study, Eyes Wide Open, Wallet Half Shut, provides a holistic look at consumers in the aftermath of one of the worst economic crises of our time. Next week, Manila Austin and Graceann Bennett will be presenting our detailed findings at an ANA conference for financial services professionals in Boca Raton.  In advance of the conference, I asked them about the research and its implications for companies and brands in the financial sector.

What did you find most surprising when you were digging through all the data and research?
As stressed out as people are about money—homes being devalued, losing jobs, no raises—that consumers seemed much less interested in the pursuit of money.  They are drawing clear lines and have fallen out of love with the rat race.  They’d trade upward mobility for a secure job, they’d rather work less and have less junk (but more time with their family).  People have realized that striving for money is exhausting, doesn’t always pay out and is not necessarily worth it.

Have people changed the way they relate to money?
Yes; most definitely. They’re thinking much more on a macro and holistic level when it comes to money and how they spend it.  It’s macro in terms of the purchase decisions that go way beyond traditional category decisions—so we see people doing things like putting off buying a new car to support their Starbucks habit in the short term (as opposed to looking more narrowly at how to “trade down” by brewing coffee at home or switching to Dunkin’ Donuts).

What are the new values we see emerging from the “Great Recession,” if any?
The big one is the notion of sustainability on a personal level—people are figuring out how to live more sustainable lives.  The shift we are seeing is people seeking relative peace of mind in making choices that don’t bankrupt the ecosystem, their finances, their health and what matters most.

What advice would you give the financial institutions who survived this ordeal?
One of the things we found is that Americans are even more distrustful of banks than before the recession (which is no surprise), but they also see the media and other Americans as contributing to the mess we’re in and not trustworthy either. The circle of trust has really shrunk.  What is going to matter to people the most is what companies are doing at local and tangible levels.  If banks, investment firms, insurance agencies and other financial institutions can show people they are making a positive impact within local communities then they can rebuild that lost trust (so spending money on local programs that people can see and touch vs. a more abstract communication like a national brand advertising campaign).

Looking down the road five years…do you think the lessons learned from 2009 will still be relevant?
Yes, in the way that we learn to appreciate all those experiences that end up making us who we are.  People are people and will, inevitably, slip back into some bad habits.  However, the new awareness they have won will still be there. And the money-management smarts and strategies people have learned will also continue to serve them (being much less inclined to take on large debt or buying things that don’t add value beyond simple novelty or entertainment, for example).  After all, it isn’t really possible to “un-know” something; and so we don’t see people returning 100 percent to the folly of their old ways.

To learn more about this report don’t miss the Eyes Wide Open, Wallet Half Shut Webinar on Thursday, May 6th 2010.

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