Unless you’ve been living in a bomb shelter for the past  year, you must know that the world is suffering a deep recession that, in many economist’s opinion, is the worst such economic slump since the 1930s. We are listening and we hear you. You’re talking about tight budgets – especially for smaller companies – with a greater emphasis on demonstrating ROI for every dollar you spend on research.

Uncle Sam is helping out the big banks, the car companies and even mortgage holders with some economic stimulus plans. We’re still waiting for our checks, but it seems like they are lost in the mail or something…

We have a special offer we’d like to tell you about.

But first, how about a little inspiration and maybe even some positive news that you won’t see on TV?

Why Smart Companies Invest In Research And Marketing Even In Bad Times

I recently read an article in the New Yorker about the battle between Kellogg’s and Post for domination of the cereal market. In the late 1920′s these two companies dominated the packaged cereal market. When the Great Depression hit, Post did the predictable thing – they cut their expenses and cut back on research and advertising. But Kellogg’s doubled its ad budget and moved aggressively into radio advertising to push its new cereal, Rice Krispies. By 1933, as the economy was cratering, Kellogg’s profits had risen nearly 30%.

Kellogg’s effectively leveraged the situation to edge out Post and become the most dominant player in its market – a position it still holds 60+ years later!

Locally, here in Seattle, Starbucks has been having a difficult time. They are facing challenges on all fronts – like McDonald’s selling coffee and opening McCafe’s, Dunkin’ Donuts moving aggressively to promote coffee, and many more challenges. Things are so bad in fact that they announced they are closing 600 stores this year, something that affects thousands of employees.

So it is really bad for Starbucks – but are are they giving up and rolling over? Hardly…even amidst their turbulent economic times, they continue to invest in product development and research new concepts. With little fanfare, and even unbeknownst to most Seattleites, their product development and marketing teams have been testing a new “retro” store concept to reposition the Starbucks coffee experience.

At a time when everyone is presumed to be “price sensitive,” one of the many things that is different about the new store concept is that there are NO PRICES on the menu!

And I recently saw this same price display at a 2nd Starbucks store…

(Pictures and analysis of the Starbucks store concetp from an expert on strategic branding –  http://blog.girvin.com/?p=2677)

Why Investing In Research During Economic Downturns Is Critical To Your Success

During tough times, most companies behave like Post did during the Great Depression. They cut spending. They cut projects. They cut advertising budgets. They reduce acquisitions. They cut employees…and they wait for the “good times” to return.  Their fearful mindset is best summed up as “Preserve what you have” and don’t invest in research & development.

And it makes sense, especially when you’re scared. However, research seems to indicate that this status quo mindset is actually riskier for your business.

Economic Research Has Shown That Companies That Invest In R & D (And Other Things) During Tough Times, Do Significantly Better Than Those Who Make Big Cuts.

Research examples:

• An economist who studied companies that kept their ad spending stable (or increased it) during the 1921-1922 recession saw their sales hold up significantly better when compared to those who cut their investment.
• A study of the 1981-1982 recession showed that sales at companies who stayed the course or increased their spending outpaced performance of the companies who slashed their budgets.
• A McKinsey study of the 1990-1991 recession found that companies that remained market leaders (or emerged as serious challengers) increased their acquisitions and R & D spending.

Recessions Create Opportunities – and Here’s an Opportunity

If you are in the category that thinks to yourself “That sounds good. I’d like too, but I can’t afford it”, then you might find yourself finally moving forward this time.

If cost has been holding you back, we are offering a special LIMITED-TIME-OFFER “Research Stimulus” Incentive Plan.

What better time then right now to conduct some research to improve your online customer experience? Perhaps a usability test to identify some website problems that are causing issues for your customers and losing money for your company? Or perhaps some focus group style research using our next generation research platform to improve your message to market match? Or how about identifying other product and/or brand improvements you can make to strengthen your customer retention and satisfaction so you emerge even stronger on the other side of this recession?

This research might be the thing that puts you ahead of your competitors. While your competitors are foolishly cutting research, staying the same and treading water, you can move forward and leapfrog past them.

Take Action Now!

This really is a limited time offer. So if you are interested, please reach out and fill out the contact form or email jay at customerexperiencelabs.com.

Here’s to stimulating research!

-Your friends at Customer Experience Labs

********************************************SPECIAL OFFER TERMS***************************************

The Customer Experience Labs 2009 “Research Stimulus” Incentive Plan (21 day LIMITED-TIME-OFFER)

• Valid for NEW customers only (We’re taking a loss here as a marketing expense to generate a few new customers – we know you understand that). Feel free to forward this to your friends at other companies and SHARE THIS EMAIL with others.
• 20% off of your FIRST new research project with us.
• Statement of work must be signed by Monday, August 3rd.
• Project is payable upon signing of SOW.

Note: This offer is subject to removal at any time and definitely will vanish by midnight on Monday, August 3rd

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Update (August 1, 2009): This special offer has expired.

In 2004, we started working together on a regular basis – Jay on the inside (as the Director of the User Experience Research Team at Expedia) and Steve on the outside (as the innovative consultant and President of Customer Relevance). After pushing the research limits on many projects together, we started doing some unique hybrid research – for example, combining online usability testing with online focus groups and eye tracking in one project. Over the years from 2004 to 2008, we worked on many projects together. This lead to numerous sushi dinners at Ototo Sushi in Queen Anne where Jay convinced Steve to try shellfish previously deemed inedible at Ototo in Queen Anne.

Over the years we developed a strong bond as researchers interested in looking for a better way to do things. We realized we shared a unique vision not typically held in our discipline. We saw gaps in the field, and knew we could fill them with fresh approaches that would add value for our clients.

In 2008, Jay had to take a medical leave from Expedia to have surgery on his jaw. If you’re the type of person that pauses to look at traffic accidents, then you might enjoy the gruesome pictures here – **warning – blood, guts and more** As his longer than expected recovery dragged on and he neared the time he was scheduled to return to work, he decided it was time to leave his 7+ year stint at Expedia and spend more time with his father who was experiencing health problems.

After some time off, we met up in San Diego to discuss building a future company together and subsequently decided to join forces to build a new company that would focus on providing the highest quality consumer research services available. The mission was clear – to deliver deeper customer insights, more accurate research, and add greater value for our clients.

The end result is Customer Experience Labs – a customer experience consulting and research firm we formally launched in June 2009. Sabrina and Gretchen are seasoned consultants working with us on the Customer Experience Labs Team and we expect our team to grow larger next year.  Our new company offers a wide range of services, including  eye tracking, usability testing, focus groups plus some things that are unique to the industry. We also have a next generation research platform that allows us to conduct web based research in the US as well as internationally.

Thanks for joining us on this journey – and we appreciate the many, many email replies from all of you plus the follow-up meetings we’ve already been having.

We don’t make “sales calls” and we don’t like to pester people, so if we can help you with anything, please let us know – you can use the contact form on our website.

Jay, Steve, Sabrina and Gretchen (aka the Team at Customer Experience Labs, LLC)

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