Are Your Customers Tightening Their Belts?

April 2nd, 2009 by Bob Bly

Yes, according to a March 2009 survey of 2,005 U.S. adults (DM News, 3/30/09, p. 7).

Of those surveyed, 84% said they are concerned abou the economic recession and have cut back their spending.

Only 14% of consumers said they are not concerned about the economy (and 1% said they didn’t know).

In my little online publishing business, we hear our customers voicing similar concerns.

These days they overwhelmingly favor our low-priced (under $100) information products, although we still sell respectable amounts of mid and even high-priced items.

Customers also demand that our products deliver the value they paid for. While our refund rates on mid and high-priced products are still low (less than 5%), they are triple what they were a year ago (1.5% then vs. 4.5% today).

Instead of keeping the audio or DVD album, the customer now considers that he has already listened to or watched the program once and may not ever again. By returning the item, he can save $100 or more. And in today’s economy, that’s more tempting than when folks were flush.

Tell me how the recession is affecting your business, and I’ll give you a free copy of my special report “15 Recession-Proof Business Strategies” (value: $29). Just click here to get started:

This entry was posted on Thursday, April 2nd, 2009 at 1:53 pm and is filed under General. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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  1. Dream Big/Take Action said:

    (Survey wasn’t working when I clicked on it.)

    My company has seen subscription-based products suffer for the past 16 months or so. When renewal times come around, a lot more people are passing than in the past. And with those that do want to renew, a lot more cards are bouncing, which I think it pretty telling. NEW subscriptions are also way down compared to the past.

    Meanwhile, one-time order infoproducts have actually picked up, which I think shows that people are willing to pay for a solution to their problems, but much less likely to enter into a longer term financial commitment. I haven’t seen a real noticeable change in refund requests.

    I think this is a good lesson. A lot of info-product marketing “gurus” go out of their way to tell clients that subscriptions are the key to long-term, recession-proof cash flow. At least for my business, I’m EXTREMELY glad that we don’t rely solely on subscription-based products.

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