"We feel your pain" doesn't pack much punch as a sales slogan. But it's proving to be a timely business mantra for companies like Ford ( F), General Motors ( GM) and Walgreens ( WAG). Corporate America is bursting with sympathy for downsized, demoralized consumers, people too broke or frightened to buy cars or homes. Who wants to take on a five- or six-figure loan when companies are cutting jobs and stocks are tanking? Enter "empathy marketing." To calm nervous shoppers, more companies are offering financial guarantees to customers who lose their jobs. Before you can bring in new buyers, you have to reassure them. You must find the cause of their worries and figure out ways to make them feel secure. The auto industry has been at the forefront of this new movement. This week, Ford and GM reached out to scared shoppers by offering to cover loan payments for buyers who lose their jobs. Ford will pay up to $700 a month for up to a year. GM, which is undergoing its own corporate reshuffling, will make up to nine payments for as much as $500 per month. Both programs are modeled on Hyundai's "assurance" plan, introduced in January. Under the program, the company agrees to pay up to three months for buyers who lose their jobs. Anyone still unemployed after that period can return the car without penalties. The company reported that sales declined only 2% in February, a loss that would have been far higher without the program.
Luxury home builder Toll Brothers ( TOL) has made a similar offer to lure jittery home-buyers. Its lending arm is giving new buyers an insurance plan that covers up to $2,500 a month of loan payments for six months if the homeowner loses his job within two years of closing. You have to get your mortgage through Toll Brothers to qualify. Walgreens ( WAG) has also jumped in, offering unemployed and uninsured customers free treatment for minor problems, such as allergies and skin conditions, at its in-store clinics. The company acknowledges it doesn't know how much the program will cost or how long it will run. But as a goodwill gesture, it's a marketing home run. Revenue-sapping offers like these are impractical for most small businesses. But showing the same concern for nervous customers may set your company apart and build loyalty. "Small companies probably can't afford to cut prices or forgo payment to help strapped customers, like some of these larger companies," says Tim Berry, president of Palo Alto Software, which produces business-planning software. "But they're normally quicker and more nimble about modifying the business itself to make it more suitable to tough times." That doesn't mean businesses should cut their prices so low they bargain themselves out of business. But they could cut smaller corners through discounts, special offers and cheaper versions of their services. They could also offer more payment options. "People who can't afford the whole enchilada might want to buy half an enchilada instead," Berry says. "A restaurant can offer some cheaper specials. A dry cleaner can offer cut-rate cleaning without the pressing."
If you're running a café, adding "recession specials" to your menu won't do much to solve the economic crisis. But giving job hunters an affordable cup of coffee and a sympathetic ear, you can lift the spirits of your customers and neighborhood. And that's good for business.