The world of social media: Facebook here, there and everywhere.

Phillip Nones Branding, Media, Media Consumption, Social Commentary, Social Media , , , , , , , , , ,

If you think that Facebook has a hammerlock on social media across the world … you’re not off by much.

Facebook NetworkSocial media strategist Vincenzo Cosenza publishes a periodic world map of social networks in which he identifies the social networks that are the most popular in each of the 137 countries he tracks.

His evaluation is facilitated by a combination of website tracking data as aggregated by Alexa and other similar tools.

In viewing how the social media map has changed over time, what we see is that “Facebook blue” now dominates to such a major extent that the world map is looking more and more like a map of the British Empire – with the Spanish and Portuguese Empires thrown in for good measure.

In fact, according to Cosenza’s latest map, Facebook is the dominant social network in no fewer than 130 of the 137 countries being tracked.

That’s ~95% of them.

Not surprisingly considering their large populations, Facebook boasts the most members in the United States, followed by Brazil and then India.  (Brazil overtook India in the rankings in 2012.)

Each year, a few new counties are added to the Facebook column.  Sometimes the shifts are small (Moldova and Latvia are the latest), but this comparison between 2009 and 2014 maps certainly shows the overall trend towards Facebook, including such high-population countries as India, Brazil, Mexico and the Philippines:

 

global map of social media networks

Of course, a few of the non-Facebook countries are home to a big chunk of the world’s population:

  • China is dominated by QZone
  • VKontakte is the social platform of choice in Russia
  • Iran remains closed to Facebook or any other Western social media, although long-dominant Cloob has been replaced by Facenama as the largest social network there.

As for which social networks are vying for the #2 position after Facebook – in most cases, it’s LinkedIn, Badoo and Twitter.

But when it comes to true competition, it’s really just Facebook and then … all the rest.

America’s small businesses: Quite bullish on 2015 … but with no thanks to the government.

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Small Business Economic OutlookRecent reports on economic activity appear to show a continuation of a rather wobbly recovery of the U.S. economy since coming out of the Great Recession.

It’s a repeating pattern of one quarter of strong growth followed by the next one with weaker indices — sometimes with the stats from earlier quarters revised downward.

Still, things are still better for the U.S. economy as compared to many others around the world.

America’s small businesses appear to feel similarly about the U.S. economy.  Their perspective may be even more positive, in fact.

Illustrating this perspective, a January 2015 survey of ~850 U.S. businesses (ones that employ ten or fewer full-time or part-time workers) finds small business owners having a pretty bullish outlook on the year ahead.

In a survey conducted by web hosting company Endurance International Group (formerly Bizland), two-thirds of the respondents reported positive prospects for their businesses for 2015:

  • General business outlook is very positive: ~26% of respondents
  • Generally positive outlook: ~45%
  • Neutral outlook: ~25%
  • Negative outlook: ~5%

These findings align quite neatly with how these business owners see 2015 as compared to 2014’s performance:

  • 2015 will be positive compared to 2014: ~66% of respondents
  • 2015 will be about the same: ~29%
  • 2015 will be negative compared to 2014: ~5%

But … these positive impressions happen with no thanks to the government.  When asked if they felt that the U.S. Congress is effective in addressing the issues that are important to small businesses, a whopping 87% gave thumbs-down.

Even the changes in Congressional leadership that came about as a result of the 2014 midterm elections have done little to improve the perceptions of these business owners, as ~69% do not believe that the new leadership in Congress will be any more effective in addressing small business issues in 2015.

And what are those issues that are so important to small businesses?

They’re the usual things:  business taxes first and foremost … followed by the ability to obtain financing.

The next tier of issues includes the ability to hire workers with the appropriate skills, along with the ongoing healthcare coverage challenges.

Any other issues are basically just an asterisk at the bottom of the page …

More details on the survey results can be found here.

Which are America’s Most Disliked Companies?

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More than a few perennial “favorites” … plus a couple newcomers.

yuck factorI’ve blogged before about the companies Americans love to hate.  And now, 24/7 Wall St. has published this year’s list of America’s most disliked companies.  As the equity investment data aggregator and investment firm describes it:

“To be truly hated, a company must alienate a large number of people.  It may irritate consumers with bad customer service, upset employees by paying low wages and disappoint Wall Street with underwhelming returns.   

For a small number of companies, such failures are intertwined.  These companies managed to antagonize more than just one group and have become widely disliked.”

In developing its list each year, 24/7 Wall St. reviews various metrics on customer service, employee satisfaction and share price performance.

Only companies with large customer bases are evaluated, based on the premise that for a company to be widely disliked, it needs to be known to a large number of people to begin with.

Among the sources reviewed by 24/7 Wall St. are the following:

This year’s list of the most disliked companies includes the following:

logo#1  General Motors — More than 30 million recalls pertaining to vehicular problems that have been linked to more than 40 deaths brings this company to the top of the list … along with a lot of dissembling about the issue.

#2  Sony — The hacking of the company’s computers and the resulting chaos surrounding the (non)-release of the movie The Interview was just the latest in a string of bad news, including a string of financial losses and fruitless reorganization attempts that seem more like rearranging the deck chairs on the Titanic than a recipe for righting the ship.

#3  DISH Network — Super-poor customer service ratings along with ongoing fights with the Fox network, leading to the blackout of popular programs that have done nothing but rile the customer base even more.

#4  McDonald’s — Its menu has lost favor with consumers — particularly when compared to competitors’ offerings.  Negative press about low employee wages doesn’t help, either.

#5  Bank of America — BofA can never seem to score above the average for its industry.  In fact, it’s been the least popular big bank in the ACSI surveys for years.  Even worse, Zogby Analytics has BofA with the second lowest share of “poor” reviews of any business in its 2014 customer service survey.  On top of that, the bank continues to have major problems in the mortgage sector, with a slew of fines levied to clean up mortgage practices that ran afoul of the U.S. regulators

#6  Uber — No doubt, this app-based ride sharing service is wildly popular with many users, even as it’s the bane of the traditional taxi business in major American and European urban centers.  But few companies so popular have faced as much controversy at the same time.  Perhaps it’s a natural side effect of being a disrupter in the market, but it’s caused many enemies for Uber in the process.

#7  Sprint Corporation — “The great disappearing phone service” might be one way to describe this firm.  Sprint has lost nearly 2.5 million customers in just the past two years.  In fact, it’s had 11 straight quarters of net decline in subscribers.  The result is lost employee jobs (2,000 and counting), along with reduced customer service and industry competitiveness.  And the share price of Sprint stock has fallen by half in the past year.

#8  Spirit Airlines — Imagine this list of maladies in the airline industry:  flight delays, long customer lines, invasive security, lost baggage, hidden fees.  Now imagine them all wrapped up in one air carrier and you have Spirit Airlines.  Enough said.

#9  Wal-Mart — According to ACSI, few companies have lower customer ratings than Wal-Mart.  It’s low even in comparison with other big-box discount and department stores, as well as supermarkets.  Its own employees also rate the company low — and there are 1.4 million of them, so their opinions really matter.  Meanwhile, some consumers see Wal-Mart as hurting or destroying local businesses wherever it chooses to open a store in a new community.

#10  Comcast — Whether we’re talking about its television or Internet services, this company comes in with really horrific customer satisfaction ratings.  They’re “standout bad” in an industry that’s infamous for poor customer care.  It didn’t help when a phone recording of a Comcast customer service representative went viral — the rep who took up nearly half an hour refusing to help a customer cancel his service.

[Interestingly a few companies that were on 24/7 Wall St.’s list last year no longer appear — notably retailers JCPenney and Abercrombie & Fitch.  For Penney’s in particular, it seemed a slam-dunk prediction that it would remain on the list this time around, but the company is actually in the midst of a modest turnaround — and consumers and investors have noticed.]

There’s another interesting and perhaps ironic factor about America’s “least liked” companies.  It’s that four of them also appear on the list of the ten most-advertised brands in the United States.

That is correct:  Based on 2013 U.S.-measured media ad spending as calculated by AdAge, Chevrolet (General Motors), McDonald’s, Walmart Stores and Sprint rank in the Top Ten list of the most-advertised brands:

  • untitled#1 AT&T
  • #2 Verizon
  • #3 GEICO
  • #4 Chevrolet (General Motors)
  • #5 McDonald’s
  • #6 Toyota
  • #7 Ford
  • #8 Walmart Stores
  • #9 Sprint
  • #10 Macy’s

Evidently, “all that advertising” isn’t doing “all that much” to burnish these brands’ image!

So Many Magazines … So Little Time?

Phillip Nones Business, Content Creation and Content Management, Media, Media Consumption , , , , , , , , , , ,

Who wants easy, unlimited access to thousands of publications?

magazinesYou might not, but millions of other people do, apparently.

And the crowd is getting ready to increase more, most likely.

As if there wasn’t enough material to read already, some online publication bundlers are making sure that people have unlimited access to the world’s most important periodicals for one low price.

This week, The Wall Street Journal blog reported that Magzter, a company that provides a single access point for more than 5,000 magazines published around the world, has now introduced a service plan it calls Magzter Gold.

logoIt’s an “all-you-can-read” option that gives subscribers online access to approximately 2,000 publications – many of them top-circulation magazines like ESPN, Maxim, New York Magazine and Forbes – for a flat rate of just $9.99 a month or $99.99 per year.

And access to this huge repository of publications is quick and easy via desktops, laptops and tablets, plus iOS and Android phone apps.

There’s also a plan called Magzter Gold Lite, allowing access to the subscriber’s choice of any five magazine titles (which can be changed from month to month).

The cost of that subscription?  $5 per month.

These two new programs are aimed at increasing Magzter’s subscriber base, which already numbers more than 4 million active monthly users.

Magzter isn’t the only company offering online access to a family of publications.  Other providers like Readly and Next Issue also offer programs encompassing the stable of magazine titles belonging to various different publishing arms (Condé Nast, Hearst, Meredith, Time).

But none of them have anything like the sheer number of titles Magzter is offering.

Readers of my generation (over the age of 50) grew up with print magazines and are preternaturally drawn to the tactile sensation of reading a physical magazine.  But I suspect that publication bundlers like Magzter represent the tip of the spear rather than simply a passing fancy.

The question is whether the changing mode of delivery ends up destroying the actual product that Magzter and others are able to peddle.  After all, were it not for the print magazines to begin with, what would these aggregators have to sell?

If what it boils down to is offering fee-based premium content that is no longer tied to a print magazine because the publication is no longer available in hard-copy form, will the quality of that content continue to be as high?

In many — perhaps most — cases, I think it’s doubtful.

If the print magazines that underlie the digital product offerings disappear, it wouldn’t surprise me if millions of readers fall away from subscription services in favor of trolling the Internet for similar content that’s easily available for the bargain price of … goose egg.

For those who are using access services like Magzter or Readly today, would you recommend them to others?  Is it the wave of the future?  Please share your perspectives with other readers here.

Online user reviews: People trust their own motives for posting … but not others’.

Phillip Nones Advertising, Branding, Business, Content Creation and Content Management, Marketing Communications, Marketing Research, Sales, Social Media , , , , , , , , , , ,

user reviewsOne of the most important uses of the web today is for people to seek out user reviews of products and services before they buy.

Research shows that people place a high value on these user reviews, and they are more likely to influence purchase decisions than brand advertising and other forms of promotion.

The famous 90-9-1 rule — of every 100 people, 1 creates content, 9 respond to created content and 90 simply are just lurkers — may no longer be accurate.  But even if the rule still holds, that still means quite a few people are engaging in the practice of posting customer reviews and comments.

For most people who post reviews, their reasons for doing so are positive, if the results from a recent YouGov survey of U.S. consumers are any guide.  The research was conducted in November 2014 among American respondents age 18 or older.

When asked why they post consumer reviews online, the survey respondents cited the following reasons:

  • To help other people make better purchase decisions: ~62% cited as a reason why they post
  • It’s polite to leave feedback: ~35% of respondents cited
  • It’s a way to share a positive experience: ~27%
  • To make sure good vendors get more business: ~25%
  • To warn others about a bad experience: ~13%
  • To expose bad vendors: ~12%

Interestingly, the older the age of reviewers, the more likely it is that they upload reviews for the reasons listed above:  Respondents age 55 or older cited all but one of the six reasons in greater percentages than the average for all age groups.

What about the flip side of the equation?  Do those who post feel that others are posting reviews for the same reason?

thumbs up and downThat’s where the picture gets a bit murkier.  It appears that those who post do so for positive reasons … but they don’t necessarily think others are posting for similarly positive purposes.

In fact, about two-thirds of the survey respondents felt that some reviews are written by people who haven’t actually purchased the product or service.

A large portion — 80% — think that businesses write positive online review about themselves.

And nearly 70% believe that businesses post negative feedback about competitors’ products.

So it’s interesting:  People see themselves participating in online ratings and reviews for the right reasons, yet they suspect that other posters may not be playing fairly — or maybe even gaming the system.

It’s an indication that while user reviews are welcomed in practice, there are also nagging doubts about the veracity of what people are reading.

Still, surveys find that many consumers cast those doubts to the side, and continue to read user reviews and be influenced by them.

B-to-B Buyers: Who’s Engaging with What Content?

Phillip Nones Advertising, Business, Content Creation and Content Management, Manufacturing, Marketing Communications, Media Consumption, Social Commentary, Social Media , , , , , , , , ,

Different Types of ContentIn my work with manufacturing companies and other B-to-B firms, I’m often asked what type of informational content is the most worthwhile and valuable from a marketing standpoint and for attracting and converting customers.

The question is relevant for most companies because there are limits on marketing resources (both time and dollars), while the methods companies can use to communicate with their target audiences are far more extensive and varied than they were in the not-too-distant past.

The answer to the question about the best information content is always one of “degree” … because the most valuable piece of content for any single prospect or customer is the one that sparks him or her to buy.

And that one piece of critical content could be one of many things.

Helpfully, we now have a new survey that can help with a bit more quantification.  The research, which was conducted by content marketing firm Eccolo Media, surveyed technical buyers (engineers, managers and directors).

It’s a relatively small sample (fewer than 200 respondents), but the directional results are worth consideration.  I also think that the results can be applied to other B-to-B buyer types as well.

One finding that came as a bit of a surprise to me was that most buyers read just two to five pieces of content before making their decisions.

What kind of content do they consult most often?  Here’s what these respondents reported:

  • Product brochures and data sheets: ~57% consult this type of content
  • E-mail communiqués: ~52% consult
  • White papers: ~52%
  • Competitive vendor worksheets: ~42%
  • Case studies/success stories: ~42%
  • Technical guides: ~35%
  • Custom magazines/publications: ~35%
  • Video content: ~35%
  • Social media content: ~34%
  • Webinars: ~34% 

As for which of these types of content are considered the most worthwhile and influential to buyers, the ranking is somewhat different:

  • Product brochures and data sheets: ~39% rate as highly influential content (top five resources)
  • White papers: ~33%
  • Case studies/success stories: ~31%
  • Technical guides: ~23%
  • Competitive vendor worksheets: ~22%
  • Videos:  ~17%
  • E-mail communiqués: ~15% 
  • Social media content:  ~14%
  • Custom magazines/publications:  ~14%

The Eccolo Media report draws this conclusion from its research:

“Marketers have been good at producing large volumes of content, but not quality content and not the right type of content … The more content we produce, the more likely it is to fail.”

One thing the research clearlyshows is that companies need to spend more effort in collecting and publishing customer case examples and success stories, because those appear to have a disproportionately higher degree of influence over potential buyers — if only they are available to consult.

More broadly, the types of content that are of greater value to buyers tend to be the ones that require more time and effort to prepare.  The adage that “success is 20% inspiration and 80% perspiration” appears to apply to marketing content development as well.

More summary findings from Eccolo Media’s 2015 B2B Technology Content Survey Report can be accessed here.

What are your thoughts as to the relative merits of different types of content?  Whether you’re a B-to-B marketer or a B-to-B buyer, please share your thoughts with other readers here.

The 2015 Marketing Buzz-Meter Kicks into Gear

Phillip Nones Advertising, Branding, Business, Content Creation and Content Management, Marketing Communications, Social Commentary, Social Media , , , , , , , , , , , , , , , , , ,

We’re only a few weeks into 2015, and already the marketing buzz-meter is operating at full force.

amplificationThe latest marketing buzz phrases are always interesting because, while they surely relate to trends and tactics that are taking on greater importance, they can also be short-hand references that “everyone” uses but “no one” really understands.

Consider one popular buzz-phrase example from 2014:  “Big Data.”

I don’t think I’ve heard the same definition of what “big data” is from any two people.  Yet it’s a term that was bandied about throughout the entire year.

No doubt, “big data” will continue to be a popular buzz phrase in 2015 as well.  But you can be sure it’ll be joined by a number of others.  As Natasha Smith, editor of Direct Marketing News magazine reports, get ready to hear many of mentions of these buzz terms as well this year:

Dark Social:

This references online content, information or traffic that’s hard to measure because it occurs in messaging apps, chat and e-mail communications.  Purportedly first coined by Atlantic magazine, it’s a term whose very name conjures up all sorts of mysterious and vaguely sinister connotations about behaviors that are at work below the surface – thereby making it an irresistible phrase for some people to use.

Viewability:

This term is becoming increasingly popular due to people’s concerns that much of what makes up “viewed” online content turns out to be hardly that.  For instance, there’s a difference between a simple video impression (merely an open) and a “viewable” one (opened and staying open for at least a few seconds).

More than likely, over the coming year the Interactive Advertising Bureau and other “great experts” will be debating over what actually constitutes a “viewable” impression.  All the while, you can be sure that marketers will be referencing the term with abandon.

Attention Metrics:

Dovetailing “viewability” is the idea that traditional online marketing metrics such as unique visitors, clickthroughs, and page views are too shallow in that they don’t really measure the true consumption of content.

Enter the buzz term “attention metrics.”  No doubt, marketers will be all over this one in 2015 as they focus more on the time and attention people are spending with content, not merely the fact that some form of engagement happened.

The Internet of Things:

This term started appearing on the radar screen in 2014 but is really coming into its own now.  It even has its own Wikipedia page entry.  While the commercialization of data-collecting devices such as wearable sensors and sensors embedded in appliances and other electronics is an undeniably significant development, this term has to be one of the most pretentious-sounding phrases ever coined.

… Which makes it an irresistible entry in the buzz-meter lexicon, of course.

Conscious Capitalism:

Rounding out the 2015 list – at least for now – is a buzz phrase that captures the essence of what every socially aware marketer wishes his or her company to be.  “Conscious capitalism” refers to companies and brands that are purportedly socially responsible and “in sync” with the needs of the community and the world.

This is considered important because so much survey research shows that people respond positively to companies that “do well by doing good.”

what's all the buzz aboutExpect many people to embrace this approach – and the accompanying buzz phrase – because it sounds so perfect.

[Never mind that things often come crashing down to earth if and when consumers are asked to pay more for the “socially responsible” products and services, or to make unpleasant or unexpected adjustments to their routine in the event.]

Do you have any other examples of marketing buzz terms that you think are poised for stardom (or notoriety) in 2015?  Please share your thoughts with other readers here.

E-mail response time expectations: “The faster the better.”

Phillip Nones Business, Employment, Human Resources, Social Commentary , , , , , , , , , , , ,

e-mail inbox managementEver since the advent of e-mail communications, there’s tended to be a feeling that correspondence sent via this mode of delivery is generally more “pressing” than correspondence delivered the old-fashioned way via postal mail.

After all, people don’t call postal mail “snail mail” for nothing.

At the same time, one would think that the proliferation of e-mail volumes and the today’s reality of groaning inboxes might be causing an adjustment of thinking.

Surely, most of the e-mail doesn’t need a quick response, does it?

If 80% or more of today’s e-mail is the equivalent of the junk mail that used to fill our inbox trays in the office in the “bad old days,” why wouldn’t we begin to think of e-mail in the same terms?

But a new survey of workers appears to throw cold water on that notion.

The survey of ~1,500 adults was conducted by MailTime, Inc., the developer of a smartphone e-mail app of the same name.  The survey found that a majority of respondents (~52%) expect a response to their work-related e-mail communiqués within 24 hours of hitting the send button.

Moreover, nearly 20% expect a response in 12 hours or less.

While the survey encompassed just users of MailTime’s app, the findings are likely not all that different for office workers as a whole.

Why is that?  I think it’s because, in recent years, the e-mail stream has become more “instant” rather than less.

Back in the early days of e-mail, I can recall that many of my work colleagues checked their e-mail inboxes three times during the day:  early in the morning, over the lunch hour, and as they were wrapping up their workday.

That’s all out the window now.  Most people have their e-mail alerts set for “instantaneous” or for every five or ten minutes.

With practices like that being so commonplace, it’s little wonder that people expect to hear a response in short order.

And if a response isn’t forthcoming, it’s only natural to think one of three things:

  • The e-mail never made it to the recipient’s inbox.
  • The recipient is on vacation, out sick, or otherwise indisposed.
  • The recipient is ignoring you.

I think there’s an additional dynamic at work, too.  In my years in business, I’ve seen e-mail evolve to becoming the “first line of contact” — even among colleagues who are situated in the same office.  Younger workers especially eschew personal interaction — and even phone contact — as modes of communication that are needlessly inefficient.

Of course, I can think of many instances where e-communications can actually contribute to inefficiencies, whereas a good, old-fashioned phone call would have cut to the chase so much more easily and quickly.

But even with that negative aspect, there’s no denying the value of having a record of communications, which e-mail automatically provides.

And here’s another thing:  MailTime estimates that around two-thirds of all e-mails are first opened on a smartphone or tablet device — so message deliverability is just as easy “on the go” as it is in the office.

It’s yet another reason why so many people expect that their communiqués will be opened and read quickly.

I agree that e-mails are easy and convenient to open and read on a mobile device.  But sometimes the response isn’t nearly so easy to generate without turning to a laptop or desktop computer.

So as a courtesy, I’ll acknowledge receipt of the message, but a “substantive” response may not be forthcoming until later.

… And then, when others don’t show a similar kind of courtesy, I think many of us notice!

Some larger companies with employees who are more geographically far-flung have actually adopted guidelines for e-mail etiquette, and they’ve applied them across every level of the company.

It seems like a good idea to get everyone’s expectations on the same page like that.

Incidentally, the preferred scenario for responding to personal e-mails isn’t really all that different from work-related expectations, even though personal communiqués aren’t usually as time-sensitive.  Respondents in the MailTime survey said that they expect to receive a response to a personal e-mail within 48 hours.  For nearly everyone, waiting a week is far too long.

In the U.S. Postal Service’s own words: “Letters are going away.”

Phillip Nones Business, Economics, Government, Social Commentary , , , , , , , ,

Actually, the pronouncement isn’t really all that earth-shattering.

USPS Mail DeliveryBut the fact that “letters are going away” has been stated by a spokesperson for the United States Postal Service speaks volumes.

The comment came after a not-for-profit interest group calling itself the “Taxpayers Protection Alliance” released a video that admonishes the USPS to “stick to delivering our letters.”

In the cartoon video, a girl is mailing a holiday card to her grandmother while complaining that it’s getting harder and harder to send First Class mail.

TPA videoReferring to the package delivery and grocery delivery services that the USPS now offers, the cartoon character pleads for the USPS “stop cutting mail services in favor of these other costly things and stick to what we really need them to do:  deliver our letters.”

The Postal Service’s response can be summed up in two words:  “Dream on.”

In fact, here’s what a USPS spokesperson stated to Target Marketing magazine about single-piece First Class mail, which includes personal correspondence and bill payments:

“[It] historically has funded the organization, since we do not receive tax dollars.  Package volume is growing exponentially … The mail mix is changing and the Postal Service welcomes that change.”

Indeed, First Class mail volume — and particularly single-piece First Class mail — has been declining rapidly, as can be seen in the USPS’s annual volume figures shown below:

First Class Mail Volume Trends
First Class Mail Volume Trends: 2005 – 2014. (Source: U.S. Postal Service)

By comparison, package delivery has grown by nearly 20% over the past five years.

Target Marketing and others have done a bit of digging to learn more about the “Taxpayers Protection Alliance” … and they’ve discovered that the group is particularly perturbed about the USPS getting into the grocery products delivery business.

“Expanding services into the private market is not only wrong because it undercuts private competitors,” the TPA organization’s president David Williams complains, “but because it is coming at the expense of its government-granted monopoly – mail delivery.”

TPA logoAll of which makes it intriguing to speculate who is actually behind the “Taxpayers Protection Alliance” and what particular agenda they may have.  Hint:  private companies that offer grocery delivery services, perhaps?

But the bigger news is this:  The USPS is no longer even pretending to claim that First Class mail is a central part of its business model looking to the future.  And that’s a huge change from only a couple of years ago.

Americans and the economy as 2015 begins: Caution continues.

Phillip Nones Business, Economics, Employment, Social Commentary , , , , , , , ,

As we’ve closed out the year 2014, more than a few people – from politicians to business leaders and business journalists – have sought to reassure us that the American economy is not only on the right track, it’s back in a big way.

Bronx CheerBut evidently, word hasn’t trickled down to “John Q. Public.”  Or if it has, it’s been greeted by a gigantic Bronx Cheer.

We have the latest evidence of this in management consulting firm McKinsey & Company’s most recent annual Consumer Sentiment Survey, which was conducted in September 2014 with results released last month.

The bottom-line on consumer sentiment is that despite the recent spate of decent economic news and higher employment figures, people are still reluctant to increase spending, and thriftiness remains the order of the day.

While people don’t think things are deteriorating … they don’t think they’re becoming much better, either.

So … treading water is about all.

It’s not too difficult to figure out why sentiment continues to be so skittish.  After all, median household income for Americans, adjusted for inflation, actually declined in recent years and hasn’t rebounded.

With people still feeling the earnings squeeze, it’s only natural that McKinsey’s findings show consumer sentiment still in the doldrums, with only ~23% feeling optimistic about America’s economy.

Consider these further findings from the research:

  • About 40% of respondents report that they are living “paycheck to paycheck”
  • Around 39% are at least somewhat worried about losing their job
  • Approximately 34% feel they have decreased ability to make ends meet financially

Not surprisingly, respondents with lower family incomes (under $75,000 per year) have higher concerns, and roughly 40% of those households report cutting back or delaying purchases as a result.

[Even among people living in households earning $150,000+ per year, one in five say that they’ve cut back or delayed purchases because of financial uncertainty.]

Activities we commonly associate with recessionary eras continue to be practiced by consumers.  According to McKinsey’s research, those practices include:

  • Looking for ways to save money (comparison shopping, coupon use, etc.): ~55 of respondents report doing so
  • Purchasing more products online to save money: ~48%
  • Cutting spending over the past year: ~40%
  • Doing more shopping at “dollar stores”: ~34%
  • No longer preferring/buying more expensive product brands over private-label substitutes: ~33%

Where things really look different “on the ground” than in the economists’ forecasts is what the public is saying about their future behaviors:  McKinsey logoMcKinsey believes that consumers and their attitudes have been permanently changed by the years of austerity.

The strongest indication of this?  Nearly 40% of the survey respondents say that they’ll likely never go back to their pre-recession approaches to buying and spending.

As McKinsey concludes in its report:  Cautious is the new normal … and it’s unlikely to change anytime soon.

More details on McKinsey’s survey findings can be viewed here.