Terrorism, War, and the Economy

By Marian Friestad

Marian Friestad is an associate professor of marketing at the Charles H. Lundquist College of Business, Associate Dean of the UO's Graduate School, and president of the Society for Consumer Psychology. Professor Friestad has been called on by national media as a resource to understand consumer behavior in the aftermath of the September 11 terrorist attacks and America's military response.

Terrorism, war, and the economy have been on most of our minds since September 11. So, what does business need to understand about consumers' thoughts, feelings, and behaviors?

First, consumers are smart. They have years of experience in making decisions about what they need and want to purchase.

This experience and knowledge means advertising that artificially links a product with themes of patriotism, or businesses that try to sell products that exploit feelings of fear and anxiety will fail.

Businesses that appreciate the intelligence of their customers will demonstrate a genuine sense of respect. This may include discounts because consumers are rightfully concerned about their finances; or an advertising campaign showing people striving to overcome obstacles; or in a decision to focus on ways to deal effectively with customer complaints.

Second, businesses must understand that consumers are coping with a variety of negative emotions. Fortunately, the vast majority are going to work, taking care of their families, helping friends, and generally living life, even though they may be feeling anxious, worried, or sad.

This means people are paying even less attention than ever to advertising. They are thinking less about discretionary purchases and relying more heavily on familiar, trusted brands. In addition, they have less energy for searching out information about new products or doing extensive comparison-shopping. And it's more likely that the simple pleasure of "going shopping" for its own sake doesn't come so easily. Shopping for big-ticket luxury items will be one of the last areas of consumer behavior to recover.

Third, businesses must understand consumers are not likely to complain about inconveniences associated with increased security. However, they will remember how businesses handle other types of problems. I would suspect that in the immediate aftermath of September 11th, customer complaints dropped off substantially for many businesses. Consumers just didn't feel right complaining about a problem with a new coffee maker or a less than friendly store clerk. However, as time passes, people may become decidedly impatient with businesses who are urging them to spend money, but who argue about a refund because a new coat was purchased thirty-two days ago instead of thirty.

Businesses with good customer satisfaction programs always enjoy higher levels of customer satisfaction and loyalty than those without such programs. The importance of this aspect of businesses will only increase during the weeks and months ahead. Consumers may have a newfound sense of importance in the role they play in the economy's recovery and will not be in the mood to be treated poorly.

Finally, businesses must remember that their employees, who are also experiencing the current emotional turmoil, powerfully affect customers. This point is critically important for service businesses where satisfaction and loyalty to a company or brand are often determined through the quality of their interpersonal interaction with customers. Further, employees are consumers themselves, and how they are treated in the work place will have a significant effect on when they will feel good about returning to the marketplace.

At the core of marketing are the customer's needs and wants. Everything from product design, to pricing, to having the product in stock, to the style of advertising and promotion, evolves directly from thinking about the customer first. For businesses that have given most of their attention to their stock prices, the current situation crystallizes the reasons why they should focus more of their attention on customers, the one group without whom they cannot survive.

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