Will sluggish economy impact your economy?

Most people know that buying repossessed “REO” property from a bank is a good financial move. After all, the real estate market will rebound someday. When it does, the person who bought “sub-value” homes will make a fortune.

If only ...

If only … many businesses weren’t surviving from invoice to invoice, just as many employees are living from paycheck to paycheck.

If only … there was enough financial cushion to survive a month’s loss of income, let alone invest a few month’s profit in real estate or the deflated stock market.

If only … I had a little more money.

During a recent session with my think tank, a visitor asked one of the most difficult questions they have ever fielded. “Is it possible to profit from the current sluggish economy, without the cash reserves to buy real estate or stock?”

The answer is YES.

However, the full answer is a little more complicated than that one syllable affirmation. Here’s the bullet points they suggested.

1. Don’t scoff at a mere $100.00 a month.

2. A little improvement can save the day.

3. Lots of little bits can make a lot.

4. Secondary economies are resilient and tax advantaged.

To see the “blood and guts” behind these bullet points, go to www.symbiosis4u.us/Newsletter/UncommonCommonSenseEZ.pdf (An EZ.pdf file has been reformatted for easier reading on your computer screen. No more scrolling down and losing your place in the text. EZ lets you turn pages like in a book.)

Since each small business, each family, indeed each individual will perceive and respond to “Uncommon Common Sense” differently, the following ideas were suggested for specific groups of people.

A young couple, struggling to survive in Silicon Valley will understand this scenario. www.symbiosis4u.us/Newsletter/AccidentalBusiness.pdf

If you know anyone with an Adjustable Rate Mortgage, ask them to review this www.symbiosis4u.us/Newsletter/ARMsolution.pdf as a potential solution.

If you are mostly curious, but without any specific distress that needs resolution, may I invite you to one of our webinars? On most Mondays beginning at 7:30 pm PST, my marketing team hosts a webinar. You have to be registered (no charge) to attend. Nothing is for sale. Not political. Not presenting just one business or product. Each week a different person explains their understanding of how a little rudder can turn a big ship. To sign up for this webinar, go to www.importantlink.com

As you review this concept, you can easily imagine an employee’s ship is like a water ski boat. These speedy little boats can move quickly, make changes rapidly, so picking up a few hundred dollars a month EXTRA … becomes just a slight adjustment the compass that guides their economic map.

Continuing the analogy, a small business could be likened to a cabin cruiser with live aboard facilities. Improving the economy for a small business is a little more complicated, but still achievable … once you have learned the basics for ski boats.

Big businesses, like big ships, are even more difficult to turn. Therefore, if the ship of your economy has “Titanic” written on the side …

Is TRUST alive and well in your business?

A recent BBB-Gallop poll indicates a 24% decrease in trust of business during the past year. This was before the current financial crisis. Steven Cole, President and CEO, National Council of Better Business Bureaus, asserts, “The continuing decline of consumer trust is just not sustainable for businesses, but, interestingly, the issue highlights a clear opportunity for competitive advantage among businesses that embrace consumer demand for trust in the marketplace.”

That term, “competitive advantage”, caused me to start this newsletter with the intent of using the BBB study as a reason for you to buy business relationship enhancing gift albums from me. As I started writing, I realized that there is much more on the table than just making a sale. The ramifications of the BBB study are staggering.

Speculation is rampant about the cause, or causes, of this rather dramatic decline. Economists blame the sky rocketing cost of gasoline as the straw that broke the camel’s back. Democrats blame the Republicans, and vice versa. However, confidence extends beyond specific businesses to business in general.

Even the Girl Scout who knocks on your door to sell Girl Scout cookies has to overcome the public’s loss of confidence in eating high fat, high sugar foods.

Jason McClain, founder of Evolutionary Sales in San Francisco, would probably use self esteem to explain how to interpret the BBB study. www.symbiosis4u.us/MP3/SelfEsteem.mp3

Perhaps Seth Godin, former VP at Yahoo, would identify a loss of consumer confidence as a reaction to an inundation of sales messages. www.symbiosis4u.us/Newsletter/ManipulatorsBySeth Godin.pdf

Because my previous business was repeatedly impacted by outsourcing, I assumed the primary cause would be loss of jobs, and/or loss of job security, due to off shore competition.

As I thought about the BBB report, I could see that each of these diverse answers held some element of cause-effect. However, not even the combined answers could encapsulate the whole problem. Something was missing. What did I not see?

I was discussing this issue with my think tank when one of them mentioned that that the BBB report does not refer to the past, but expectations of the future. All of the probable causes which had been postulated, each with some element of validity, were all based on the past, not probable futures.

With this new perspective, I asked myself how a highly regarded futurist would interpret the BBB news?

Alvin Toffler, author of Future Shock and other best selling books about the near future, in an interview with Wired Magazine said …
“I once had a class of 15-year-old high school kids and I gave them index cards, and I said, ‘Write down seven things that will happen in the future.’

“They said there would be revolutions and presidents would be assassinated, and we would all drown in ecological sludge. A very dramatic series of events. But I noticed that of the 198 items that they handed in, only six used the word ‘I.’ So I gave them another set of cards, and I said, ‘Now I want you to write down seven things that are going to happen to you.’

“Back came, "I will be married when I'm 21,’ ‘I will live in the same neighborhood,’ ‘I will have a dog." And the disjuncture between the world that they were seeing out there and their own presuppositions was amazing.

“We thought about this, and concluded on the basis of just guesswork that the image of reality that they're getting from the media is one of high-speed rapid change, and the image that they're getting in their classrooms is one of no change at all.”

Could this be the main reason for the loss of consumer confidence in business … nothing has changed … past tense? Or is it that consumers, most of whom are employees, do not believe that anything will improve tomorrow or next year … future tense?

We humans are creatures of habit. We predict the near future (next month or next year) based upon what has happened in the near past (last month or last year). When our expectations in the near past were not realized, we do not expect our expectations in the near future to be realized. Hence, no expectations for the future. No confidence in the future.

Since future expectations are typically linked to employment, then a lack of expectations could easily translate into a 24% decrease in trust in business.

Could the BBB study mean that many consumers (employees) feel they are just a number on the company’s employee list … and fear it will change for the worse … by not being listed as an employee at all?

Could we interpret the study to mean that many consumers (employees) feel that their employer controls their lives, and a loss of confidence means they expect their quality of life will be less in the future?

After study, and some really enlightening conversations, I have a different understanding of the BBB study. When you boil all the diverse reasons, past or future, employee or consumer, it comes down to a simple statement. Consumers, employees, voters, and families do not believe that anyone cares.

Consumers don’t believe anyone cares … because nobody can control the rising price of everything … of which gasoline is just the most obvious. No company, no CEO, no HR Manager, not even the President of the United States can give what they do not have … control over inflation.

Employees don’t believe that anyone cares … because there is no job security … because the company cannot see beyond the next year, let alone beyond the next decade. Bill Gates put this concept in a nutshell when he said that Microsoft could become a defunct business within two years of whenever someone comes up with a better operating system, at less price. Because Microsoft is like an apple ripe for picking, not even Microsoft has a vision of the future. No company, no CEO, no HR Manager, not even the Founding Father of Microsoft can give what they do not have … job security.

Voters do not believe anyone cares … because of the Golden Rule. The Golden Rule is to “Do unto others as you would have them do unto you”. However, Joe Taxpayer believes the Golden Rule has been politically massaged into , “He who has the gold, makes the rules.” Since Joe Taxpayer does not have the gold, he cannot make the rules. Ergo, he chooses to not participate in elections because … neither his vote … nor his life … are significant.

Napoleon once described foot soldiers as “canon fodder” … food for canons. Is it possible that voters feel like they are like disposable assets, nothing more than “canon fodder”?

If the antithesis of “canon fodder” is … significance … then no company, no CEO, no HR Manager, no five star general, (not even the Emperor Napoleon) can give what they do not have … significance.

Or can they?

(Listen to leadership guru Robin Sharma www.symbiosis4u.us/MP3/PutPeopleFirst.mp3 )

For millennia, the main source of significance has been in the family unit. Fathers realized significance by providing for their family. Mothers personified significance by raising children to become self-sufficient, caring adults who also sought significance. Grandfathers and grandmothers found significance through wise counseling for the extended family.

Then the Industrial Revolution fractured thousands of years of family unity. The nuclear family almost ceased to exist. Because humans need to feel significant, and because the primary source for feeling significant had nearly disappeared, the nuclear family was gradually replaced with the nuclear work group. The extended family was slowly replaced by the company. The community was sometimes replaced by the large corporation.

Consider the following.

Does not the average employee spend more waking hours with their co-workers than with their family?

Do not co-workers develop bonds of friendship that are frequently closer than bonds with biological siblings?

Do not some managers function as if they were the patriarch of a family, in contrast to those who manage by intimidation?

As you can see from these limited examples, large corporations, companies, and work groups have a significant amount of influence over an employee’s feelings of “significance”.

However, they only have that influence … AFTER they realize that employment means more than just earning a paycheck.

The “significance” an employee feels is directly proportional to the personal recognition they receive from their immediate (or higher) supervisor … not just from the size of their paycheck … nor just how big their office is … nor even the size of the rubber tree plant in the corner. Because significance has its root in the family relationships, then significance is primarily about relationships, not money. Which is best expressed through the old adage …

Money will buy a fine dog, but only kindness will make him wag his tail.

An employee’s feeling of significance is an emotional state that is developed, not bought or sold.
Only a person who has significance can give it away (you cannot give what you do not have).
Expressed inversely, significance cannot be given by a person who is not significant in the eyes of the intended recipient.

Let me close this newsletter with the question that my research caused me to ask myself …
WHO … HAS TO DO WHAT … IN ORDER TO MAKE ME FEEL SIGNIFICANT?

WHO OR WHAT CONSISITENTLY CAUSES MY TAIL TO WAG?

As I thought about my answers to that question, I realized that one of those people … is you.

I hope you realize that your reply to my newsletter is actually your gift of significance to me.

As a “thank you” for your reply, I will send you a copy of Wallace Wattle’s classic “The Science of Greatness”. I reformatted this 100 year old classic into an easy to read EZ eBook so you can turn pages on your computer screen (or PDA) similar to the way you turn pages in a book. If you don’t have any comments on the BBB article, just send me an email with “great” in the subject line and I will send you the eBook … for free … because you are significant to me.

What is personal franchising?

Lean back in your chair, take your hand off the mouse, and think seriously about this next sentence.

THE INTERNET ALLOWS DIRECT SALES FROM THE MANUFACTURER TO THE CONSUMER.

If that’s true, then why did consumers spend $8.4 Trillion last year at brick and mortar stores? In contrast, only $145 Billion was spent (2007 figures) in click and order stores, which is less than 2% of the total consumer dollars spent.

More confusing facts.

Currently any home that has broadband internet access will watch 25% less television. A manufacturer’s TV advertising budget just lost 25% of its effectiveness. Yet, 25% of consumer spending has not shifted to the internet. Where will the advertising dollar be spent that used to be spent on television?

The internet has already put many newspapers out of business. The printed page is not as efficient as the digital page for current events. As you may have guessed, newspapers earn most of their money by selling advertising. Where is the advertising dollar going that used to go to newspapers?

The typical commuter has a minimum of 200 different radio stations to listen to while driving to or from work. How can a company know which one would be best for their product line? If a company makes the wrong choice, the advertising produces no sales.

Remember Webvan, a local digital grocery store? Before Webvan went belly up, they advertised on a bill board at the intersection of Highway 101 and Highway 17. Perhaps 100,000 people a day passed in front of that bill board … which is why that bill board cost $100,000.00 a month. After one year, Webvan had spent more than a million dollars on advertising with that the one bill board. How much cream cheese and bagels, Oreos and milk, Coke and Pepsi would they have to sell in order for the profits to exceed $1 Million? http://www.symbiosis4u.us/MP3/CokePepsi.mp3

Television, newspaper, radio, and bill board advertising are losing effectiveness. Consequently, many companies are asking, “How can we reach new customers and sustain old customers if the type of advertising we have always used is not working?” How can a company advertise without taking any risk?

Personal franchising is the answer.

Personal franchising creates a direct connection between a company with something to sell and consumers who buy.

True story: a few years ago a small company in LA invented a healthy energy drink that actually tasted good. They wanted to market it nationwide.

At that point in time, most people had never heard of an energy drink (other than coffee), let alone tasted one. How could they market a product when people did not have a basic category for the product?

Historically, the default solution would have been a nation wide advertising blitz so people would have a deja –vu moment when they saw a can of this new energy drink in the store. The small company in LA could buy a coast to coast advertising blitz … for a mere $100 Million.

Of course, there was no guarantee that the blitz would work since it would have been almost impossible to target those consumers who already drank energy drinks. Energy drinks did not have a “consumer profile”.

Most products have a clearly defined consumer profile. If you make a fishing rod, you could target fishermen by advertising on fishing shows on TV, in fishing magazines, etc. You would not advertise your new bamboo fly rod in Cosmopolitan or Rolling Stones magazines. If you make a toy for toddlers, you would not advertise in prime time on TV because your target audience would be sound asleep in their cribs. There is a good reason that late night info-mercials do not air on Saturday morning.

Without a consumer profile, how could the energy drink company know if an energy drink consumer ever watched television, read the newspaper, or listened to the radio? How could they create product awareness (advertise) for a consumer they could not identify? Were potential consumers young or old, male or female, rich or poor, athletes or couch potatoes? The company did not know.

What if typical energy drink drinkers used TV only to watch DVD movies, got the latest news online, and listened to CDS during commute, how could a blitz advertising campaign reach them? With regard to energy drinks, there really was no consumer profile, with one exception.

The only exception had been an Austrian company called Red Bull. Red Bull identified their most probable consumer as “party hardy college students”. Red Bull actually created a market, and ultimately a customer base, by giving away their energy drinks at college fraternity parties. Apparently “party hardy college students” liked the idea of being a wide awake drunk all night long. Red Bull could afford to give away massive amounts of samples, because they had already formed a large customer base in Europe. Red Bull was not a startup company when they entered the American market.
Since the small company in LA was a startup company, money was tight. Giving away hundreds of thousands of dollars of sample products to poor college students, who could not afford to buy energy drinks, did not seem like a viable solution. Besides, Red Bull had already cornered the poor college student market, such as it was.

That’s when the small company in LA heard about personal franchising. Personal franchising was as unknown to this small company, as healthy energy drinks were to the general populace. Here’s how the energy drink company used personal franchising in lieu of blitz advertising.

The energy drink company put product pictures, explanations of the ingredients, and the benefits from those ingredients, on the personal franchising company’s website. They did not pay for this advertising immediately. They paid for the advertising AFTER energy drinks were sold. And here is the really mind boggling part … as much as 25% of the advertising paid AFTER the sale, when to the person who made the purchase.

In the first six weeks, the company sold more energy drinks than they had in the previous year. After one year they had become the second largest energy drink in the USA, flashing past Coke and Pepsi energy drinks, while nipping at the heels of Red Bull. Massive growth, in one year, without TV spots, banner ads, bill boards, direct mailings, EBay, radio ads, celebrity endorsements, or Google Adsense ads. http://www.symbiosis4u.us/MP3/EnergyDrink.mp3

Did the energy drink company ever discover a consumer profile for energy drink drinkers?

Yes.

The energy drink consumer profile is described as any person who wants to make some money after buying something that makes then feel good ... and makes them healthy.

Which does not make sense because the energy drink consumer profile also describes people who buy computers, books, toys, car parts, ham, Mickey Mouse ears, flowers, landscaping, TVs, and office supplies, just to name a few. Which is why Dell, Barnes and Noble, KB Toys, Kragen Auto, Hickory Farms, Disney, Flora Gift, Landscape USA, IBM (Lenovo), Circuit City, Office Depot, and hundreds more, participate in this “pay for the advertising after the sale” system.

http://www.symbiosis4u.us/MP3/dotscam.mp3

So who was buying all those energy drinks?

Grandparents bought the energy drinks so they could play longer and sleep better. Frazzled parents of teenagers bought the energy drinks to compensate for months of long days and short nights. Corporate employees in cubicles guzzled one of the dozen or so flavors of energy drinks to prevent afternoon energy slumps. Athletes drank the energy drinks before a competition (not a stimulant, just adaptogenic herbs and vitamins).

Kids with ADHD bought the energy drinks (actually their parents did http://www.symbiosis4u.us/MP3/ADHD.mp3 ) because they did better in school. People, who had never heard of an energy drink, were buying some just to find out what they were like. Apparently, the only people who did not buy the energy drinks were … poor college students.

Did the energy drink company ever discover a consumer profile for energy drink drinkers?

Yes.

The energy drink consumer profile is described as any person who wants to make some money after buying something.

Which does not make sense because the energy drink consumer profile also describes people who buy computers, books, toys, car parts, ham, Mickey Mouse ears, flowers, landscaping, TVs, and office supplies, just to name a few. Which is why Dell, Barnes and Noble, KB Toys, Kragen Auto, Hickory Farms, Disney, Flora Gift, Landscape USA, IBM (Lenovo), Circuit City, Office Depot, and hundreds more, participate in this “pay for the advertising after the sale” system. http://www.symbiosis4u.us/MP3/dotscam.mp3

I wonder if these companies might be envisioning last year’s $8.4 Trillion in consumer spending shifting from brick and mortar stores to this type of click and order, no risk, sales format?

Maybe, only time will tell.

In the meantime, I am not completely satisfied with the energy drink company’s consumer profile. Their answer simply spawned another question.

If you have any insight into a possible solution to this question, I would really appreciate your comments. Here’s the question.

What is the consumer profile for people who want to make some money after buying something?