Stay in touch with consumers during recession via socnets

New research has found that economic woes are causing consumers to change the way they spend their time, as well as their money. Social networking continues to play a big part in their lives and savvy businesses will be forging relationships now ready for when the economy recovers.

by Helen Leggatt

The recently released whitepaper, "Changing Consumer Priorities in Tough Times", from the University of Maryland's Robert H. Smith School of Business and Rockbridge Associates, Inc., found that nearly three-quarters of consumers believe the U.S. to be in recession and just over a quarter (27%) believe the country is currently in a depression. Just 1% of the 529 U.S. adults surveyed believed the economy to be stable.

Unsurprisingly, consumers are cutting back. Almost 60% are postponing the purchase of luxury electronic devices such as computers and high-definition televisions, 56% are putting off furniture purchases and 55% have put home-improvements to the bottom of the list of things to do.

But there's something that many aren't cutting back on, in fact they're increasing their activity, and that's social networking. While around half are using social networks to communicate with friends and family about the same as they did last year, 33% are using it more. Why is this?

According to the whitepaper (.pdf), one likely explanation is that "these services are increasing exponentially as more people, including older adults, are signing on to social networking. It is also possible that difficult times create a need to seek out and interact with loved ones for emotional support and survival advice".

"Devising ways to continue the relationship with customers even as they seek to scale back will be a key strategy for providers of these non-essential services," said P.K. Kannan, professor and director of the Center for Excellence in Service at the Robert H. Smith School of Business.

Kannan added that businesses could be in a favorable position to recoup revenues lost in the recession providing they spend time right now reaching out and conversing with consumers. "By focusing on nurturing and maintaining their customer relationships - by offering discounts, installment payment plans or bundle deals - firms can stand ready to recoup lost revenue when the economy recovers," he said.

Tags: communications, depression, recession, relationships, social networking, socnets