The following conversation was conducted between Dr. Philip Kotler and Dr. Karl Hellman (representing Sales Insights) in early April 2020.
Sales Insights: Professor Kotler, you have written, “When the COVID-19 crisis is over, Capitalism will have moved to a new stage. Consumers will be more thoughtful about what they consume and how much they need to consume.” How should sales and marketing professionals adjust to this new reality?
Professor Kotler: I predict that this period of anxiety and radically reduced consumer spending will usher in new attitudes and behaviors that will change the nature of today’s Capitalism. Smart companies will rework their offerings to fit new consumer needs. They will add messages to show their concern with public problems facing their customers. Consumers will want brands that spell out their greater purpose and how each is serving the common good.
Changing Consumer Attitudes
Sales Insights: What are some of the new consumer attitudes we’re likely to see?
Professor Kotler: The sudden loss of jobs will remain a trauma even after workers get jobs back. They will spend and save their money more carefully. Consumers will probably decide to spend less and save more. They have seen or personally experienced numerous failures of the health system to meet their needs. Many will stress their need for healthier and safer products and brands. Trust in government my erode further. I expect some will embrace anti-consumerist behaviors.
The coronavirus pandemic is emphasizing critical needs in our economy. It makes us aware of how fragile our health is. We can catch colds easily in crowds. We need to eat more healthy foods to have a greater resistance to germs and flus. Our health and medical system must be substantially improved. Too many citizens can be financially devastated by medical problems. Our shortage of low-income housing is a serious problem. Many citizens lack basic skills all the way from vocational to digital and scientific skills. The nation needs a much stronger public education system from kindergarten all the way up to and including college.
New Market Segments
Sales Insights: Given these forecasted shifts in consumer attitudes and behavior, what new markets or segments can be identified that are suddenly poorly served and could be targeted by sales and marketing efforts?
Professor Kotler: I see five new consumer segments emerging out of the coronavirus pandemic. some of them were already trends, and they will now be accelerated.
1. Life Simplifiers
First, “shelter in place” has led a number of consumers to become life simplifiers, persons who want to eat less and buy less. They are reacting to the clutter of “stuff”. They want to downsize their possessions, many of which lie around unused and unnecessary. Some life-simplifiers are less interested in owning goods such as cars or even homes; they prefer renting to buying and owning.
2. Degrowth Activists
Another group consists of degrowth activists who feel that too much time and effort is allocated to consuming. This feeling is captured in William Wordsworth’s poem,
The world is too much with us …
Getting and spending, we lay waste our powers:
Little we see in Nature that is ours;
We have given our hearts away, a sordid boon!
Degrowth activists worry that consumption will outpace the carrying capacity of the earth. The amount of arable land is limited, and the topsoil is increasingly depleted. The nightmare would be that the earth cannot feed its many people. Degrowth activists call for conservation and reducing our material needs. They see greedy producers doing their best to create “false and unsustainable needs.”
3. Climate Activists
Climate activists worry about the harm and risk that consumerism is doing to our planet by generating heavy carbon footprints that pollute our air and water. The impact of global warming is increasingly obvious, most recently because sheltering in place quickly created clear skies in the world’s largest cities. Climate activists carry a healthy respect for nature and science and have genuine concerns about the future of our planet.
4. Sane Food Choosers
There is a rapidly growing group, sane food choosers, who have turned into vegetarians and vegans. They are upset with how we kill animals to get our food. Everyone could eat well and nutritiously on a plant, vegetable, and fruit diet. Livestock managers fatten up their cows and chickens to grow fast and then kill them to sell animal parts in the pursuit of profits. Meanwhile, cows are a major emitter of methane that heats our earth and leads to higher temperatures, faster glacial melting, and flooding of cities. To produce one kilogram of beef requires between 15,000 and 20,000 liters of water as well as so much roughage to feed the animals.
5. Conservation Activists
We hear about conservation activists who plead not to destroy existing goods but to reuse, repair, redecorate them, or give them to needy people. Conservationists want companies to develop better and fewer goods that last longer. They criticize a company such as Zara that every two weeks produces a new set of women’s clothing styles that would only be available for two weeks. Conservationists oppose any acts of planned obsolescence. They are hostile to the luxury goods industry. Many are environmentalists and anti-globalists.
New Sales Best Practices
Sales Insights: What are some possible implications for sales and marketing organizations?
Professor Kotler: More sales and marketing activities will be conducted digitally rather than in-person. Face to face will continue, but it will be done digitally through Skype, Zoom, and other communication tools. Sales training will increasingly be remote. “Work from home” is teaching us new skills that are significantly more effective (independent of constraints of time and space) and much less expensive.
Sales Insights: Can we leverage sales efforts in ways that sustain or even build customer trust without face-to-face contact?
Professor Kotler: Of course, salespeople can best build trustful relations with customers who they can meet in person, take out to dinner or sports events, and take an interest in the customer’s family and friends. Short of this, salespeople will need to increase their ability to problem-solve, persuade and create consensus during video meetings. This is a new challenge, and it creates considerable opportunity for companies to innovate and create new and improved sales techniques and skills.
Sales Insights: Does it make sense to focus sales efforts on current customers and customer retention? As we would have in a traditional recession?
Professor Kotler: The first rule is always keep your current customers happy. During a recession, serving current customers costs less than hunting for new customers. At the same time, if strong customer leads surface, of course you pursue them as well.
Sales Insights: Can salespeople be deployed as “field market researchers” to investigate and gather data on possible new markets, offerings, or sales approaches? What would you have them ask?
Professor Kotler: Top salespeople, without being asked, will do field market research on existing and new markets. On those occasions when the company asks them to put a little time in market research, they are likely to ignore this. The average salesperson will see this as competing with meeting their quotas and probably not comply.
Sales Insights: What are the most significant risks to companies in these times?
Professor Kotler: Perhaps the greatest risk is not doing anything differently. Such companies are choosing a death sentence. The other is to do the wrong things, such as raising prices, reducing service levels, exaggerating the performance of product offerings, and so on. Companies need to track the effects of all their actions and reactions to the new environment. And they need to quickly discern unexpected outcomes and make course corrections.
Sales Insights: What is your overall assessment of the COVID-19 crisis?
Professor Kotler: I’m hopeful that the current crisis is so dramatic and puts us in such extreme situations that it unearths the entrenched shortcomings of Capitalism: the inadequate health care system, the inequity of income and wealth distribution, the unconscionable degradation of the environment, and others, that we finally are in a position to make needed change. If we take corrective action as firms and as society as a whole, it will be Schumpeter’s “creative destruction” at its best. We can emerge from this terrible period with a new, more equitable and viable form of Capitalism.