The Economic World War.
Terrorism, kidnapping, fraud, spies, crooks, blackmail, natural disasters, murder, stolen identities, betrayals, secrets, drugs, prostitution, extortion, piracy, politics, and special interests – the War on Business has all the elements of the most gripping drama or thriller and plays out with new chapters live every day.
These are not just threats faced by our governments, they are faced by every day people and every day businesses, from local farmers to the biggest multinational corporations.
This isn’t about defending companies by arguing against issues of corporate responsibility. If anything, this is an argument to show that corporations have even more responsibilities than they have accepted in the past 30 years.
Businesses today can no longer justify hiding behind the curtain of ignorance as to what the real dangers and threats to their success and survival are. Those threats are hanging over their bottom lines but also over the livelihoods of their employees and the tax revenues of the nation.
No longer can the justification for all things business be the answer to the question, ‘What is the value-added of this?’ The global business model of sell, sell, sell, attack, attack, attack is on the tipping point of extinction. Just like the lemmings that lead the pack over the cliffs, modern leaders of all political and business stripes are leading us all into the path of economic extinction.
Survival is more than just what ‘sells,’ and survival of the fundamental basis of being able to do business is what’s under attack. And once that foundation crumbles, so too will unravel the tangled thread of the government funding formulas that depend on tax revenues, so the implication that these are just business issues is also out of context with reality. This is a threat to our entire social fabric from businesses to private people to governments; we’re all under direct attack whether you can see it or not.
Our entire economic structure is under constant attack by multiple opponents with weapons we have never seen before, technologies we’ve never had to deal with before, and alliances that can be timed with an egg timer.
Sean Sullivan, a security adviser at F-Secure, an Internet security firm, was quoted in an article recently as saying, “Last year there were more online bank robberies than there were actual on-site bank robberies."
The Internet Crime Complaint Center reported that Americans lost about $559 million to Internet thieves in 2009. And the unreported internet theft rate is estimated at over 4 times that much, and that is only the amount for private individuals, NOT corporations!
The most recent estimates I could find for the losses to the European airlines due to the volcanic activity in Iceland already far exceed $4 billion USD and are climbing daily with each new set of interruptions caused by the spewing ash clouds. That doesn’t reflect the impact on US or other carriers, just the EU airlines. Combined with the climbing costs of jet fuel, increased energy tax costs, oil speculation, arcane air traffic control systems, medieval international travel industry structures and regulations, international terrorism threats, heightened government enforced security regulations and protocols, reduced business travel and other direct, immediate challenges, the survival of every air carrier in the world, and literally millions of employees’ livelihoods is in real jeopardy. People won’t just see fares go up if the airlines collapse; they’ll see their ability to travel anywhere evaporate in a flash. Need to fly from New York to Chicago? Try a $1600 ticket in coach that you have to book 4-6 months in advance on for size. Sound outrageous? If you only have a couple of very financially weak airlines left, there won’t be enough seats to be able to go anywhere for less.
As if that were not enough, organized crime has targeted airlines as a weak link in the area of credit card fraud. It has also targeted virtually every other form of call center operation where a reasonably large amount of credit can be used and by one means or another converted into transferable liquid assets.
Online dating sites are also a hotbed for organized criminals to steal your money, your identity, or your social network resources. They lurk online pretending to be there like anyone else looking for romance only to steal everything you have, including your already fragile ability to trust a potential romantic match.
Companies trying to do ‘ethical business’ by employing African farmers to produce crafts and goods for fair trade sale here in the US and abroad are being put at increasing risk as their employees are hunted and targeted for kidnapping for ransom schemes by gangs of criminals, pirates, and thugs. No longer is it enough to pay a fair wage – now companies must also provide security forces and bodyguard services for local and traveling employees and their families.
The piracy issue along Africa’s east coast with shipping of every kind of product from oil to consumer goods and military equipment is another threat both to the supply of product in key markets but also to the lives of the employees of the shipping company, and to the livelihoods of each company involved in the products’ supply chain.
Leading directly to the crash in 2008 Goldman Sachs was taken in a corporate identity scam for over $600 million and has since had to admit over $1 billion in additional losses from scams, loose fiscal management and gross negligence in researching the bona fides of the companies they invested in and their ability to make good on the investments.
How are all these items related? Companies are being attacked financially and those costs are always passed on to the consumer. In this case, doubly so as we have seen not only the cost of doing business rise, and therefore the supplies of consumable goods decrease, but we have also been tasked with bailing out troubled companies through our taxes and through international loans to our government that we will have to repay from our taxes and whose interest payments will also be paid from our tax dollars. That means fewer services can be funded for things the country needs because a large portion of our budget will be dedicated to paying back the debt we have incurred to prop up troubled companies. And in every case the reason why the company is being attacked is because it is vulnerable, and it is always vulnerable because it keeps making bad decisions based on bad or lacking information. The right information can be used to predict problems before they manifest themselves as billion dollar disasters.
How could someone predict the impact of a volcanic eruption in Iceland, you may ask? Easy. According to the Global Volcanism Program more than 60 volcanoes erupt each year. Most of the dormant and active volcanoes on the planet have been identified and documented, excluding those under the oceans, which is a whole other topic. Although no one would be able to forecast the eruption of any individual volcano, it really is not challenging to deduce that some volcanic activity somewhere could get out of hand at any time– we have more than enough evidence in recorded recent history to accept that as given fact. Looking at basic geography, laying out where the most active volcanoes are and where other dormant volcanoes could have the most impact, an impact management plan can be designed with features to handle most of the worst and medium case scenarios involving an eruption.
This is not something governments are solely responsible for doing – companies each have to have their own response plans ready for natural disasters of every kind – fire, flood, power outages, ice storms, earthquakes, hurricanes, twisters, sinkholes… the whole 9 yards. Without it, every company is simply a sitting duck waiting to be served up on a platter with orange sauce.
Disaster recovery plans get pooh-poohed with that awful expression, “but really…. How likely is that?” Let’s see… this year alone? 1 major, ongoing volcano eruption, 6 or more major nation-changing earthquakes, 1 climate changing oil-spill, 1 record-breaking winter, 1 record breaking spring flood… and that’s just off the top of my head. How likely is it? It’s time to get real. These ‘unlikely’ events happen every day. It’s actually far more reasonable to ask yourself when will they not happen instead.
Count the number of incident free days as opposed to the number of incident days and you just might get the shock of your life.
And that’s just the short list of natural disasters, not including the 4 major mine disasters globally we’ve witnessed just in the last two months. Take a minute and think about the additional list of human incidents including terrorism, crime, political upheaval, and so on that create incident days as well.
Add in domestic and international financial collapses and currency fluctuations and add those to your list of incident days while you’re at it.
Throw in supplier shortages, power outages, computer viruses, employee strikes, credit crunches, internet attacks, computer network failures, IRS audits and other familiar incidents and add those to your list of incident days too.
How likely is it to have an incident day, really? How exposed are you really? What do you think?
It’s not good enough to have an incident recovery plan. You have to have some measure in place to reduce the number and lessen the impact of the incidents you do encounter. You have a responsibility – to your investors, to your suppliers, to your employees, to your creditors, and to your community to do what you must do to protect your company from incidents and to maintain long-term profitability.
Not to mention the fact that you deserve the extra flexibility, peace of mind, additional time in your day and stress reduction that comes from having a proactive incident prevention plan. Just like every medical person says we should do more to prevent injuries and illnesses by being proactive about our health, so too do we need to be proactive in looking after the health of our companies.
I hear no end of excuses about why companies and individuals don’t have to look out for sources of threats. ‘What are the odds? One in a million?’ Sure. And your company handles 40+ million transactions a year, so 40 times a year your company is in jeopardy of total collapse, and apparently that number sits well with you. 40 times a year your company could be exposed to the one individual who would do the one thing that would bring your company to a screeching halt. Not to mention the millions of potential cheap opportunists who really could care less about your company, they just see an easy target to steal from. Or the organized criminal enterprises who make their living from doing that one thing you don’t think anyone would ever do to you.
Yip, one in a million odds. Funny how often that million comes up to bite you in the butt.
And you still aren’t motivated to do anything about it?
Or how about the ex-employee that launched the virus that took out your network for 3 days last year and the months of headaches it caused trying to clean up the mess afterwards.
Enough.
Enough, I say. I’ve had enough. Enough of the excuses. Enough of the put downs from people who ultimately end up unemployed because the company they worked for didn’t see one more disaster, one more incident coming.
Enough excuses from the people who are paid to know better. Enough passing the buck. When you personally get into a financial jam, you can blame the economy, you can blame your job loss, you can blame anyone you want, but the responsibility for fixing the situation always stays the same regardless of who is to blame. The buck always stops with you.
The same is true with companies, and with governments.
It’s not the unions’ faults our governments spent too much. The governments had to agree to the union contracts in the first place. The governments had to grow big enough to be at risk of financial collapse during a disastrous down market.
It’s not company’s fault that the pirates stole their ship – the pirates did it. The fact that the company sailed an unprotected ship in pirate infested waters had absolutely nothing to do with it, I’m sure.
It’s not the airlines’ fault that the volcano in Iceland erupted and air travel has been interrupted time and again since then. And having routes that allowed for no alternative options built in with the governments, airports, and industry partners in question, having no back up crews and aircraft to reaccommodate to in a crisis as part of the financial plan and no means to use them to solve the backlog due to air traffic congestion has absolutely nothing to do with it either. Nope, no company or government responsibility there. No need for governments and industry to work together urgently to come up with a real working plan to solve the problem that could affect travelers and global economies for the next 2 years.
Enough. This isn’t rocket science but managing a company is a lot more than adding a three letter title to the end of your name and having an opinion. Managing a company involves a prime responsibility to that company, to its’ owners, to its’ employees, to its’ customers, and to its’ community. That responsibility is more than a vague mission/vision statement or company dream – it’s an every-minute-of-every-day-with-no-days-off-and-always-on-call fact.
Fact – there are Bad Guys out there.
Fact – natural disasters happen.
Fact – suppliers can fail.
Fact – employees can make mistakes.
Fact – governments can change the rules.
Fact – wars happen.
Fact – other countries’ governments actively try to conduct economic sabotage; that’s attacking companies they see as vulnerable, companies like yours!
Fact – equipment fails.
Fact – competition competes.
Fact – technology changes.
Fact – interest rates change.
Fact – money supply changes.
Fact – currency exchange rates change.
Fact – stocks go up and down.
Fact – you’re responsible for being proactive in defending and leading your company through all these situations. Your job is to ‘deal with it.’
And here’s one more fact – if you don’t have a competent Competitive Intelligence resource then you don’t have enough facts to do your job.
And last but not least… the number of companies with any Competitive Intelligence resources at their disposal? Precious few, perhaps less than 100 in the whole country, and fewer than 400 in the whole world.
Company after company spends fortunes getting the latest and greatest Business Intelligence applications, assuming that this is in fact a comprehensive Competitive Intelligence resource.
Business Intelligence, involving tracking trends for customers and supply chain info is great and helpful, but it’s still only 10% of the story that makes up Competitive Intelligence.
Business intelligence tells you nothing about Organized Crime’s roll in your industry. BI doesn’t proactively predict a management plan for natural disasters like volcanic eruptions. BI only goes so far.
Competitive Intelligence goes so much further, and without it you can’t have enough information to make your decisions, to guide your company in the current business environment.
Putting it very bluntly, relying on Business Intelligence to run your business without any Competitive Intelligence to put it in context and add validation is like building a mile long bridge using only a paving machine and no engineer. You might get a nice finish to your top coat of asphalt, but if there’s no actual properly engineered bridge under it, then it’s not terribly safe to drive across, is it? How safe are your decisions? Do they have CI behind them or just BI?
And will they stand up to the tests that natural disasters, national enemies, natural competitors, organized crime, economic predators, and others will throw at them day after day? Or are they just a band-aid to get you through the day with the hope that tomorrow you won’t have to deal with them any more?
When your country comes under the overwhelming plethora of attacks that I listed above, generally the country is at war with somebody. When the whole world is engaged in these kinds of all-out fights, that war turns global and we call that a World War. As we have discovered throughout history, the strongest alliances are the most likely victors in these kinds of conflicts, but inevitably the whole world loses because of the conflict. It then usually spurs tremendous industrial growth and innovation in its’ wake.
Here then we have all the root elements of a global war but between businesses. It’s also a war between businesses and criminals, businesses and other countries, and between businesses and Mother Nature. In truth, this is the first Economic World War.
Whether you want to be in it or not, you don’t get to have a say any more than the civilians impacted by the prior military conflicts of past World Wars had a say in the impacts to their families and lives. Everyone everywhere IS affected. Whether you’re in a Communist country outside of the Capitalist markets of the West or whether you’re a head of industry in the largest free-market in the world, it doesn’t matter. You are both impacted by this. Your governments, commodity supplies, prices, employment, retirement, health care treatment options, tax levels and family structure are all affected by the Economic World War, so putting your head in the sand, your fingers in your ears, and a sock in your mouth really isn’t doing you any good at all.
Your company is at war, and just like any war, you can give up now and let the enemy do whatever it likes, you can hide behind a bigger company or government and see if they can protect you, or you can stand up and fight.
You now know that you have many, many opposing forces to deal with, many of which you cannot detect at the moment. You need better resources, you need better information. You need better intelligence.
You need to know who your enemies are and you need to know which of your allies could sell you down the river tomorrow in the name of their own survival.
You need Competitive Intelligence, and you need it now.
Families even need their own version of it in order to plan their careers, finances and lives, so it isn’t just a corporate monolith issue here at play. Those same economic forces that are duke-ing it out in the global marketplace are the same ones that will tell you you don’t have a job tomorrow, so you’d better believe you have a vested interest in this stuff too.
CI is a big deal but its’ only as valuable as you’re prepared to make it by using it.
Buying important data and then not reading it, not using it to make better choices, not implementing those resulting choices… it won’t matter how much you spend on CI. If that’s the way you handle it, no amount of CI can help.
This is an Economic World War. You’re not a spectator any more, and this isn’t a spectator sport. This is a fight for your financial life and for your personal and economic freedoms. You can have all the legally enshrined freedoms you want, but if you have to give them up to someone stronger in order to survive, then what freedoms do you really have?
Think this through.
It will make all the difference in your investments, your employment, even with the amount of time you get to spend with your family. It isn’t just big picture here; you, of You Personally Inc., have a say in how this war unfolds. This is your time to act. Now. Not tomorrow, not next week, not after the next market meltdown. Now.
The time to stand and be counted isn’t when they start handing out the medals and ribbons and honours of distinctive service. The time to stand and be counted is when those honours are earned.
Now is your time to earn a better future, to stand up and fulfill your responsibility to your company, your colleagues and employees, your suppliers, customers and community. And most importantly, now is the time to stand up and fulfill your responsibility to yourself.
Build your company’s resources, tools and defenses by building your company’s Competitive Intelligence resource access. Use that intelligence to make better decisions. Hire the services of those who can meet your company’s real needs, not just what the latest trend data says would be a good idea.
Survive.
Plan for better days by planning for the bad ones too.
Educate yourself on all the data you’ve been missing by not getting enough of the right data in the first place.
Train your employees and colleagues to always look for opportunities to gain that data and use it proactively to prevent your firm’s vulnerabilities from being exploited.
Fight the fight that needs fighting. Win the Economic World War.
28 May, 2010
17 February, 2010
Travel Industry at Risk of Collapse in 2010-2011.
Major media have printed the tallies and have come to the conclusion that more flights have been cancelled in the last 2 weeks than in the 2 weeks following 9/11.
I need to admit here that I do work in the travel industry as my day job, but I’m not identifying with whom, and I’m not singling out any one element of the industry as being any harder hit than another. I’m not advocating government bailouts, and I’m not advocating investors flee the industry out of negative speculation.
What I am doing is providing an infrastructure and economic analysis of what has happened and what that means to both the US and the world economy as a whole.
The insensitivity of government funded insurance companies having monster bashes at big-time resorts notwithstanding, since 9/11 the travel industry, both business travel and tourism based, has been ever so slowly recovering these last 8 and a half years.
Oil prices drove airlines into cutting service levels and raising fares and ancillary revenues from the ever un-popular checked bag fees and on-board meals.
The economic downturns have curbed consumer and business travel spending to events and travel venues by massive degrees. Las Vegas is a comparative ghost town with over 50% of the flights there dropped from service in the last year or so alone.
Other tourism destinations like Laughlin and Reno are even harder hit while major airlines have generally curbed or stopped service altogether in some cases.
Mexico had the distinction of adding the H1N1 scare to the travel reduction causes as last spring the entire Mexican tourism industry unraveled.
Cruise lines are reporting massive reductions in the number of passengers this year, and even the perennial given, time-shares have become ever more available to rent as owners are unwilling or unable to travel.
The weather this winter in Florida has had a big impact on their tourism industry as well as their farming industry, producing a coordinated double-barreled attack on the Floridian state economy.
Between the industry losses from those who are unable to afford to travel, and the losses from those whose travel was curtailed by weather or business economic constraints, and those whose travel expenditures had to be refunded to them because of the weather, it’s pretty safe to say that the travel industry has lost perhaps as much as 40% or more of their revenues for the months of November to March.
Think about that number for a minute.
It’s a generalization, but it’s a reasonably educated guess.
Remember, if the airlines don’t bring in the passengers, then the hotels don’t get to resell the hotel rooms and don’t get the ancillary revenues they depend on like restaurant takes and guest services. And if the passengers don’t make it to the destination then the local retailers don’t do any business and the local entertainment venues have no customers. And if there are no travelers then there are no tourists filling up the local eateries, renting cars, or connecting to cruise ships. Connecting train and bus service loses passenger base, destination weddings get cancelled, conventions and events fail or cancel, and so much more.
In one fell swoop, the massive snow storms in Washington, D.C. leveled the boom on the national economy while we’re still in one of the largest economic downturns in a century.
The natural reaction is for everyone to tighten their belts yet another notch, stay home and save that family holiday for another year when things get a little rosier and everyone can see a little light at the end of the tunnel. And for most people, I’d advocate that approach to keeping yourself solvent in a crisis; but…on a national economic level the result of that belt tightening is going to have extreme long term consequences.
Here’s what you can already see coming down the pipeline in the coming year: airlines don’t have a big profit margin on their overall operations. No airline has the ability to absorb a 40% whack during a peak travel season, especially not when they are still reeling from a series of economic disasters including 9/11, extraordinary fuel prices, and international business travel collapse. By definition a company that might have between a 4% and a 7% profit margin is going to hit economic crisis when they suddenly lose 40% of their revenues over a 6 month or longer window. And when a company can’t handle that kind of crisis – it gets sold to someone else or it closes its’ doors. Here and now you can tell that one or more of the major domestic US carriers is going to be crippled as a result of this year’s weather and will face economically forced industry consolidation or final bankruptcy.
Similarly Las Vegas is in dire straits. Not just the resorts that were already in financial distress as a result of the state of the economy, but the city and the State of Nevada as well. The state and the city both depend on the revenues generated from the tourism industry, and a 40% or higher cut in those revenues is going to cause state-wide economic crisis. If you recognize what the destruction of the car industry did to Detroit, you’re about to see the same thing happen to Nevada unless something dramatic happens to change things there. And that’s a scary prospect.
Mexico’s tourism industry is still recovering from the lingering impact of the H1N1 issue last year on this year’s new travel bookings, and with the earth quakes in the Caribbean, Haiti and Grand Cayman in particular, the Caribbean is also in dire straits. Jamaica is still suffering from the negative publicity surrounding the high crime rates there, as are the Dominican Republic and other Caribbean nations. With 20-40% reductions in tourist dollars coming to their struggling economies, those nations will be pushed to the brink of disaster as well.
Major, successful sports franchises are almost universally offering reduced seasons-ticket prices and reduced single and multi-game package prices to lure customers who are not renewing as readily in the current financial downturn.
This means there is also a corresponding reduction in spending on team merchandise, advertising revenues, and sponsorships, even in an Olympic year.
All of this means again fewer people traveling to games, fewer hotel rooms being booked and reduced revenues at venues and retailers.
The final point? Expect to see hotel chains consolidate or go under too, as well as thousands of restaurants, retail outlets, and entertainment venues. Musicians, artists, waiters, servers, bar staff, taxis, limousine drivers, wholesalers, cashiers, stock clerks, retail managers, cleaners, call center employees and so on are going to hit the unemployment lines this year as a result of this winter’s economic wallop.
And when you do want to go somewhere next time? You can already expect the prices to be a lot higher once the number of suppliers drops to practically none.
So for those of you who think the travel industry’s troubles don’t affect them because you don’t really travel anywhere, give it another thought. When California, Florida, Arizona, Hawaii, Alaska, St. Thomas, Puerto Rico, Louisiana, New York, Pennsylvania, and Nevada all have a massive economic disaster on their hands due to suddenly and dramatically decreased tourism and travel revenues and the state governments lose 12-40% of their income and sales tax collections when they are already having a hard time making ends meet, think again as to whether travel impacts your life. When the Federal government loses an equivalent amount of its tax revenues on the same basis, think again about whether the state of our national travel infrastructure has an impact on you and your family. When costs for shipping goods, mail, skyrocket or the cost of seeing loved ones goes back to the rates of the 1970’s and 80’s where it was 2-5x what it is today, think again about the impact of the travel industry on your life. Even if you don’t happen to travel.
Barring some extraordinary market turnaround, that’s where we’re headed, and apparently even winter weather alone can take us there. It might be time for us as individuals to think a little more about the role travel has in our lives and how we as citizens plan to handle it going forward.
I need to admit here that I do work in the travel industry as my day job, but I’m not identifying with whom, and I’m not singling out any one element of the industry as being any harder hit than another. I’m not advocating government bailouts, and I’m not advocating investors flee the industry out of negative speculation.
What I am doing is providing an infrastructure and economic analysis of what has happened and what that means to both the US and the world economy as a whole.
The insensitivity of government funded insurance companies having monster bashes at big-time resorts notwithstanding, since 9/11 the travel industry, both business travel and tourism based, has been ever so slowly recovering these last 8 and a half years.
Oil prices drove airlines into cutting service levels and raising fares and ancillary revenues from the ever un-popular checked bag fees and on-board meals.
The economic downturns have curbed consumer and business travel spending to events and travel venues by massive degrees. Las Vegas is a comparative ghost town with over 50% of the flights there dropped from service in the last year or so alone.
Other tourism destinations like Laughlin and Reno are even harder hit while major airlines have generally curbed or stopped service altogether in some cases.
Mexico had the distinction of adding the H1N1 scare to the travel reduction causes as last spring the entire Mexican tourism industry unraveled.
Cruise lines are reporting massive reductions in the number of passengers this year, and even the perennial given, time-shares have become ever more available to rent as owners are unwilling or unable to travel.
The weather this winter in Florida has had a big impact on their tourism industry as well as their farming industry, producing a coordinated double-barreled attack on the Floridian state economy.
Between the industry losses from those who are unable to afford to travel, and the losses from those whose travel was curtailed by weather or business economic constraints, and those whose travel expenditures had to be refunded to them because of the weather, it’s pretty safe to say that the travel industry has lost perhaps as much as 40% or more of their revenues for the months of November to March.
Think about that number for a minute.
It’s a generalization, but it’s a reasonably educated guess.
Remember, if the airlines don’t bring in the passengers, then the hotels don’t get to resell the hotel rooms and don’t get the ancillary revenues they depend on like restaurant takes and guest services. And if the passengers don’t make it to the destination then the local retailers don’t do any business and the local entertainment venues have no customers. And if there are no travelers then there are no tourists filling up the local eateries, renting cars, or connecting to cruise ships. Connecting train and bus service loses passenger base, destination weddings get cancelled, conventions and events fail or cancel, and so much more.
In one fell swoop, the massive snow storms in Washington, D.C. leveled the boom on the national economy while we’re still in one of the largest economic downturns in a century.
The natural reaction is for everyone to tighten their belts yet another notch, stay home and save that family holiday for another year when things get a little rosier and everyone can see a little light at the end of the tunnel. And for most people, I’d advocate that approach to keeping yourself solvent in a crisis; but…on a national economic level the result of that belt tightening is going to have extreme long term consequences.
Here’s what you can already see coming down the pipeline in the coming year: airlines don’t have a big profit margin on their overall operations. No airline has the ability to absorb a 40% whack during a peak travel season, especially not when they are still reeling from a series of economic disasters including 9/11, extraordinary fuel prices, and international business travel collapse. By definition a company that might have between a 4% and a 7% profit margin is going to hit economic crisis when they suddenly lose 40% of their revenues over a 6 month or longer window. And when a company can’t handle that kind of crisis – it gets sold to someone else or it closes its’ doors. Here and now you can tell that one or more of the major domestic US carriers is going to be crippled as a result of this year’s weather and will face economically forced industry consolidation or final bankruptcy.
Similarly Las Vegas is in dire straits. Not just the resorts that were already in financial distress as a result of the state of the economy, but the city and the State of Nevada as well. The state and the city both depend on the revenues generated from the tourism industry, and a 40% or higher cut in those revenues is going to cause state-wide economic crisis. If you recognize what the destruction of the car industry did to Detroit, you’re about to see the same thing happen to Nevada unless something dramatic happens to change things there. And that’s a scary prospect.
Mexico’s tourism industry is still recovering from the lingering impact of the H1N1 issue last year on this year’s new travel bookings, and with the earth quakes in the Caribbean, Haiti and Grand Cayman in particular, the Caribbean is also in dire straits. Jamaica is still suffering from the negative publicity surrounding the high crime rates there, as are the Dominican Republic and other Caribbean nations. With 20-40% reductions in tourist dollars coming to their struggling economies, those nations will be pushed to the brink of disaster as well.
Major, successful sports franchises are almost universally offering reduced seasons-ticket prices and reduced single and multi-game package prices to lure customers who are not renewing as readily in the current financial downturn.
This means there is also a corresponding reduction in spending on team merchandise, advertising revenues, and sponsorships, even in an Olympic year.
All of this means again fewer people traveling to games, fewer hotel rooms being booked and reduced revenues at venues and retailers.
The final point? Expect to see hotel chains consolidate or go under too, as well as thousands of restaurants, retail outlets, and entertainment venues. Musicians, artists, waiters, servers, bar staff, taxis, limousine drivers, wholesalers, cashiers, stock clerks, retail managers, cleaners, call center employees and so on are going to hit the unemployment lines this year as a result of this winter’s economic wallop.
And when you do want to go somewhere next time? You can already expect the prices to be a lot higher once the number of suppliers drops to practically none.
So for those of you who think the travel industry’s troubles don’t affect them because you don’t really travel anywhere, give it another thought. When California, Florida, Arizona, Hawaii, Alaska, St. Thomas, Puerto Rico, Louisiana, New York, Pennsylvania, and Nevada all have a massive economic disaster on their hands due to suddenly and dramatically decreased tourism and travel revenues and the state governments lose 12-40% of their income and sales tax collections when they are already having a hard time making ends meet, think again as to whether travel impacts your life. When the Federal government loses an equivalent amount of its tax revenues on the same basis, think again about whether the state of our national travel infrastructure has an impact on you and your family. When costs for shipping goods, mail, skyrocket or the cost of seeing loved ones goes back to the rates of the 1970’s and 80’s where it was 2-5x what it is today, think again about the impact of the travel industry on your life. Even if you don’t happen to travel.
Barring some extraordinary market turnaround, that’s where we’re headed, and apparently even winter weather alone can take us there. It might be time for us as individuals to think a little more about the role travel has in our lives and how we as citizens plan to handle it going forward.
07 January, 2010
Those who have been following my blogs will note that the last few months I have been very quiet.
Shortly after my last blog about the world not spinning anymore, the world instead erupted with volcano-like qualities.
Life has NOT been boring.
Work in the travel industry during the last several weeks has been a nearly Herculean feat, trying to reaccommodate hundreds of thousands of global travelers affected by horrific weather, massive extra holiday traffic, flooding at major airports, new security issues and regulations, enhanced screenings and extraordinary lines – it’s been a zoo with a LOT of extra hours.
Christmas itself was an unqualified disaster – I’m not sure how I could have screwed it up more, looking back at it now. It started off with exhaustion so bad that I seriously considered going to the hospital just to get some sleep and fluids in me. That led to my system being run down to the point of developing laryngitis and a flare up of whatever bug it was I had this past fall. And I still have some of those effects lingering today where my breathing is somewhat restricted with even the slightest exertion.
I spent most of Christmas bouncing through it doing my best to stay conscious, let alone paying any attention to my family or respect to the holiday that was being observed.
Those are still just excuses though as I had a responsibility to my family (Tracey and my mother) to handle it better, plan for it better, and treat the holiday and them with more respect.
That’s the bulk of the bad news in a nutshell. There’s more in the aftermath of Christmas, but that’s just an extension of the original problems.
The good news is every bit as momentous.
I’m very close to making an announcement regarding a change to my work environment. I don’t want to jinx anything, but there are a number of opportunities that I’m looking at and that stand a good chance of becoming offers. I’m not letting up my foot off the gas though… this year I’m making a serious change, and it will happen sooner rather than later. I still have a Race to finish. :)
In fact I've already started to make a change in some ways. I have a new contract position with a training company that looks like it will fill in some down time with much needed revenue and networking opportunities.
My art projects are taking some shape and getting some acclaim. The two shows last year have showed that my gem-media trees are very popular and I will soon be adding a new line of gem-media fish that I'll show off in my next show in February.
My 3-D floral works are slow to materialize but I expect to have a spectacular field of 3-D flowers painted some time this spring.
I’m now working with a couple of other artists to bring regular art events to the greater Phoenix area – we’re going to add a whole slough of special new art features and special events that you *really* won’t want to miss. I don’t want to give anything away but I have about 6 special events that will *REALLY* rock Phoenix and I can’t wait ‘til I can release the details.
I’m still working on my websites too. The master site is going to rock out some time this spring. You’re going to be amazed by what you’ll be able to see and do once I get it rolled out. For instance, you’ll be able to….oh…no…mustn’t…tell… you… the … secret…yet…
My books are still being re-written for the umpteenth hundredth time. Call me a perfectionist, I can take it. But this year really is going to be different as I have a whole new network of people I’m working with to get them finished, produced, published and distributed, along with a kick-ass speaking tour to go with their release.
Just so you don’t worry though, I will also be releasing a few white papers this year as well. They can be released much more easily and you’ll get your hands on some cutting edge info, tools, and analysis that you’ll *wish* you had had before. The business world is in for some earth-shaking news when I let those out of the bag, and you will have the first kick at that breaking news when it comes out.
My new games are still in development – again, I want to make sure they aren’t just good, I want to make sure they reinvent the industry. Those of you who know me, you know I’m bringing the “boom” to games – whole new ideas in magic, skills, weaponry, plot-lining, character development, advancement, world view, monsters, traps, religion… the whole concept of gaming is going to be bounced on its’ ear when I’m through. Since I put them back into development their release is obviously delayed, but I’m so confident that the product is getting better and better that I know you’ll be thrilled with it when I’m done.
I have a start on a release for my Necromancer Bob series, and I have a whole other series that I'm starting to hash out the details for this week. You will probably see one or the other unleashed by the end of the year.
I'm working with some friends of mine in music and comedy as well as a few in video production to launch a couple of special live entertainment events for Phoenix as well, which will probably get some media coverage and maybe a little national and international exposure. Maybe I'll share those details with you soon too. Maybe. We'll see.
And that’s just the tip of the iceberg, so keep posted and I’ll try to keep up and keep pushing the limits of what I can accomplish.
2010’s going to be fun.
Shortly after my last blog about the world not spinning anymore, the world instead erupted with volcano-like qualities.
Life has NOT been boring.
Work in the travel industry during the last several weeks has been a nearly Herculean feat, trying to reaccommodate hundreds of thousands of global travelers affected by horrific weather, massive extra holiday traffic, flooding at major airports, new security issues and regulations, enhanced screenings and extraordinary lines – it’s been a zoo with a LOT of extra hours.
Christmas itself was an unqualified disaster – I’m not sure how I could have screwed it up more, looking back at it now. It started off with exhaustion so bad that I seriously considered going to the hospital just to get some sleep and fluids in me. That led to my system being run down to the point of developing laryngitis and a flare up of whatever bug it was I had this past fall. And I still have some of those effects lingering today where my breathing is somewhat restricted with even the slightest exertion.
I spent most of Christmas bouncing through it doing my best to stay conscious, let alone paying any attention to my family or respect to the holiday that was being observed.
Those are still just excuses though as I had a responsibility to my family (Tracey and my mother) to handle it better, plan for it better, and treat the holiday and them with more respect.
That’s the bulk of the bad news in a nutshell. There’s more in the aftermath of Christmas, but that’s just an extension of the original problems.
The good news is every bit as momentous.
I’m very close to making an announcement regarding a change to my work environment. I don’t want to jinx anything, but there are a number of opportunities that I’m looking at and that stand a good chance of becoming offers. I’m not letting up my foot off the gas though… this year I’m making a serious change, and it will happen sooner rather than later. I still have a Race to finish. :)
In fact I've already started to make a change in some ways. I have a new contract position with a training company that looks like it will fill in some down time with much needed revenue and networking opportunities.
My art projects are taking some shape and getting some acclaim. The two shows last year have showed that my gem-media trees are very popular and I will soon be adding a new line of gem-media fish that I'll show off in my next show in February.
My 3-D floral works are slow to materialize but I expect to have a spectacular field of 3-D flowers painted some time this spring.
I’m now working with a couple of other artists to bring regular art events to the greater Phoenix area – we’re going to add a whole slough of special new art features and special events that you *really* won’t want to miss. I don’t want to give anything away but I have about 6 special events that will *REALLY* rock Phoenix and I can’t wait ‘til I can release the details.
I’m still working on my websites too. The master site is going to rock out some time this spring. You’re going to be amazed by what you’ll be able to see and do once I get it rolled out. For instance, you’ll be able to….oh…no…mustn’t…tell… you… the … secret…yet…
My books are still being re-written for the umpteenth hundredth time. Call me a perfectionist, I can take it. But this year really is going to be different as I have a whole new network of people I’m working with to get them finished, produced, published and distributed, along with a kick-ass speaking tour to go with their release.
Just so you don’t worry though, I will also be releasing a few white papers this year as well. They can be released much more easily and you’ll get your hands on some cutting edge info, tools, and analysis that you’ll *wish* you had had before. The business world is in for some earth-shaking news when I let those out of the bag, and you will have the first kick at that breaking news when it comes out.
My new games are still in development – again, I want to make sure they aren’t just good, I want to make sure they reinvent the industry. Those of you who know me, you know I’m bringing the “boom” to games – whole new ideas in magic, skills, weaponry, plot-lining, character development, advancement, world view, monsters, traps, religion… the whole concept of gaming is going to be bounced on its’ ear when I’m through. Since I put them back into development their release is obviously delayed, but I’m so confident that the product is getting better and better that I know you’ll be thrilled with it when I’m done.
I have a start on a release for my Necromancer Bob series, and I have a whole other series that I'm starting to hash out the details for this week. You will probably see one or the other unleashed by the end of the year.
I'm working with some friends of mine in music and comedy as well as a few in video production to launch a couple of special live entertainment events for Phoenix as well, which will probably get some media coverage and maybe a little national and international exposure. Maybe I'll share those details with you soon too. Maybe. We'll see.
And that’s just the tip of the iceberg, so keep posted and I’ll try to keep up and keep pushing the limits of what I can accomplish.
2010’s going to be fun.
14 December, 2009
The Day The World Stopped Spinning.
The day the world stopped spinning.
Saturday, 12 December, 2009, the world stopped spinning. For me at any rate.
There are those days that happen in each of our lives when through the experience of being a living, moderately normal human, we acknowledge that the daily progress of change has added a soupçon of challenge each day to our lives more than it had the day before, and that as those morsels of life challenges accrue, inertia and complacency are bestowed not just to our broad shoulders, but to our very souls as well.
If one has any ambition about them whatsoever then this realization only comes to us when all of our forward progress finally comes to a screeching halt over the least of trivialities and usually at a mission critical moment.
That moment when all forward progress stops is usually replaced by that first momentary sensation of regression – the feeling that somehow things are not just slowing down anymore but starting, in effect, to go backwards. And as the momentum builds in reverse we struggle and fight to regain control. Like a driver who has lost their power steering on an icy road, we fight, struggle and wrench the wheel in the earnest demand for supremacy and domination of our environment – we *will* bend it to our will. We will regain control of the car, and guide it safely forward and out of harms’ way once more.
Like the driver, sometimes we are successful and we regain control. We regain the momentum forward and continue on, having shaken loose some of the weighty issues that have led us into a dangerous driving situation. In other cases we lose control and through reaction or over-reaction we actually make things worse, endangering not only us but those who depend on us and those for whom we care.
And then in some very few cases we relinquish control and simply urge the car to come to a quiet rest, neither fighting for control nor recklessly throwing ourselves into a panic of pride and incompetence but rather gently observing the situation and resolving to act rationally when the first opportunity to make a difference becomes available.
A friend recently mentioned that wisdom is gained from experience; experience is gained through learning from errors; and errors occur from making choices. Wisdom, then, comes from making choices and learning from our errors. And one of the lessons is that although decisive action is critical to solving a tenacious and overwhelming problem, more important still is having the patience to make the right decision at the right *time*.
And so we revise our hypothesis and learn once more that the path to wisdom isn’t simply being a decider, nor is it simply observing life, but it is the considered timely action that yields the best results.
And so as the mass and inertia of accumulated challenges have sent my life spinning for several years now, I have observed closely. I have watched the dangers flash by: the dangers of economic instability, career jeopardy, family instability, political instability, and personal safety and well-being – all these and more have slid past me at warp speed, just as the car spins on the black ice.
I have resisted the urge to reach out to that steering wheel and yank it in the opposite direction; to fight the spin and force friction and my will to battle the wild inertia of a spin on treacherous terrain, and by that resistance I have bided, waiting for the right opportunity to act, preparing my response for the occasion when the car has faced the right direction once more and by carefully turning into and then out of the spin I can guide the car back onto the road and actually use the momentum to regain control and guide my car and person safely on my way once more.
I redirected the stress from the challenges I bear to the stress of patience, and in so doing was able to see the stresses of my cares more clearly for what they truly are - the accumulation of thousands of days of cares, worries and frets belonging to choices that have long since passed added together with the worries , fears and hopes of today.
Those past issues were playing far too big a role in defining and directing my reactions to what is facing me now, and like with the driver, they represented distractions and pot holes that could easily tip the balance from a safe recovery to a dangerous crash. Patience allowed me to avoid taking the wrong reaction and still act in a timely manner to steer my life away from the dangerous, risky habit of trying to control for control's sake and allowed me the space to breathe and calmly guide my life to safety and return to forward progress.
By following that fundamental premise of considered timely action, the spinning has stopped and safety and control have been regained. The world stopped spinning for me on Saturday.
I'm still shaken up, worried and concerned that I carried all that extra baggage with me, but now I have a chance to deliver on my promises, achieve my objectives and I no longer have that overwhelming level of stress inhibiting my ability to live the way I want to.
All because the spinning stopped.
Saturday, 12 December, 2009, the world stopped spinning. For me at any rate.
There are those days that happen in each of our lives when through the experience of being a living, moderately normal human, we acknowledge that the daily progress of change has added a soupçon of challenge each day to our lives more than it had the day before, and that as those morsels of life challenges accrue, inertia and complacency are bestowed not just to our broad shoulders, but to our very souls as well.
If one has any ambition about them whatsoever then this realization only comes to us when all of our forward progress finally comes to a screeching halt over the least of trivialities and usually at a mission critical moment.
That moment when all forward progress stops is usually replaced by that first momentary sensation of regression – the feeling that somehow things are not just slowing down anymore but starting, in effect, to go backwards. And as the momentum builds in reverse we struggle and fight to regain control. Like a driver who has lost their power steering on an icy road, we fight, struggle and wrench the wheel in the earnest demand for supremacy and domination of our environment – we *will* bend it to our will. We will regain control of the car, and guide it safely forward and out of harms’ way once more.
Like the driver, sometimes we are successful and we regain control. We regain the momentum forward and continue on, having shaken loose some of the weighty issues that have led us into a dangerous driving situation. In other cases we lose control and through reaction or over-reaction we actually make things worse, endangering not only us but those who depend on us and those for whom we care.
And then in some very few cases we relinquish control and simply urge the car to come to a quiet rest, neither fighting for control nor recklessly throwing ourselves into a panic of pride and incompetence but rather gently observing the situation and resolving to act rationally when the first opportunity to make a difference becomes available.
A friend recently mentioned that wisdom is gained from experience; experience is gained through learning from errors; and errors occur from making choices. Wisdom, then, comes from making choices and learning from our errors. And one of the lessons is that although decisive action is critical to solving a tenacious and overwhelming problem, more important still is having the patience to make the right decision at the right *time*.
And so we revise our hypothesis and learn once more that the path to wisdom isn’t simply being a decider, nor is it simply observing life, but it is the considered timely action that yields the best results.
And so as the mass and inertia of accumulated challenges have sent my life spinning for several years now, I have observed closely. I have watched the dangers flash by: the dangers of economic instability, career jeopardy, family instability, political instability, and personal safety and well-being – all these and more have slid past me at warp speed, just as the car spins on the black ice.
I have resisted the urge to reach out to that steering wheel and yank it in the opposite direction; to fight the spin and force friction and my will to battle the wild inertia of a spin on treacherous terrain, and by that resistance I have bided, waiting for the right opportunity to act, preparing my response for the occasion when the car has faced the right direction once more and by carefully turning into and then out of the spin I can guide the car back onto the road and actually use the momentum to regain control and guide my car and person safely on my way once more.
I redirected the stress from the challenges I bear to the stress of patience, and in so doing was able to see the stresses of my cares more clearly for what they truly are - the accumulation of thousands of days of cares, worries and frets belonging to choices that have long since passed added together with the worries , fears and hopes of today.
Those past issues were playing far too big a role in defining and directing my reactions to what is facing me now, and like with the driver, they represented distractions and pot holes that could easily tip the balance from a safe recovery to a dangerous crash. Patience allowed me to avoid taking the wrong reaction and still act in a timely manner to steer my life away from the dangerous, risky habit of trying to control for control's sake and allowed me the space to breathe and calmly guide my life to safety and return to forward progress.
By following that fundamental premise of considered timely action, the spinning has stopped and safety and control have been regained. The world stopped spinning for me on Saturday.
I'm still shaken up, worried and concerned that I carried all that extra baggage with me, but now I have a chance to deliver on my promises, achieve my objectives and I no longer have that overwhelming level of stress inhibiting my ability to live the way I want to.
All because the spinning stopped.
31 August, 2009
Launch Day!
Launch Day for The Millionaires' Race to 2010.
Today’s the big day! The start of The Millionaires Race to 2010! And there is a *lot* of work to do. Our web site’s still under construction and will be up a bit later with lots of neat new features, but that shouldn’t slow you down from getting started in the Race to 2010! Now’s the time for you to launch yourself into a brand new project that will help both you and your country get back into the innovating, economic growth spurt that we really need to get this country back on track. And we’re going to help you!
Throughout the year we’re going to be landing in cities right across Canada and the US promoting the Race and the income generating projects of our participants. We’ll help you sell your products, your books, your services – we’ll go the whole nine yards on our road trip across the nation(s).
As we stop in various cities we’ll also work directly with a number of you to help make your dreams of success a reality.
So take time today to put your plans on paper, and get to dotting the I’s and crossing the T’s so you can get your project under weigh. And maybe a year from now we’ll be showing you off to the country as one of the continent’s newest millionaires!
Throughout the day today I will be posting new stories, new blogs, new tools and a whole lot more to get you revved up, excited and rolling on your way to financial freedom. Opportunities will be made available to come on tour with us or to help you get rolling, so don’t be shy – check back frequently throughout the day, as new updates will be released all day long!
Cheers and have a great Race Day!
C./
Today’s the big day! The start of The Millionaires Race to 2010! And there is a *lot* of work to do. Our web site’s still under construction and will be up a bit later with lots of neat new features, but that shouldn’t slow you down from getting started in the Race to 2010! Now’s the time for you to launch yourself into a brand new project that will help both you and your country get back into the innovating, economic growth spurt that we really need to get this country back on track. And we’re going to help you!
Throughout the year we’re going to be landing in cities right across Canada and the US promoting the Race and the income generating projects of our participants. We’ll help you sell your products, your books, your services – we’ll go the whole nine yards on our road trip across the nation(s).
As we stop in various cities we’ll also work directly with a number of you to help make your dreams of success a reality.
So take time today to put your plans on paper, and get to dotting the I’s and crossing the T’s so you can get your project under weigh. And maybe a year from now we’ll be showing you off to the country as one of the continent’s newest millionaires!
Throughout the day today I will be posting new stories, new blogs, new tools and a whole lot more to get you revved up, excited and rolling on your way to financial freedom. Opportunities will be made available to come on tour with us or to help you get rolling, so don’t be shy – check back frequently throughout the day, as new updates will be released all day long!
Cheers and have a great Race Day!
C./
09 August, 2009
Couponing and Cash for Clunkers.
One of the biggest lessons I learned about marketing came at the expense of The Hudson's Bay Company in Canada. It's the oldest company in the continent dating back from the discovery of North America, and as one of the very first trading post companies it has been in operation since the year 1670.
It is still in operation today but under American ownership as a result of numerous management mistakes and fiduciary failures which needed to be corrected by someone with deeper pockets and a better management team. I'm not 100% sure that their owners (the holding company that owns Lord and Taylor's) are necessarily that team, but they will certainly do no worse.
How does the Hudson's Bay Company of Canada have anything to do with our government's Cash for Clunkers program? Good question. I have a great answer.
The Hudson's Bay Company (HBC) went through tumultuous financial times in the 80's and 90's like most retailers. They tried to buy a number of other chains in order to diversify their market reach and expand market dominance of the hard-fought department chain consumer market and to reposition their products for re-sale as they went through their product aging cycle/ Clothes that were unable to sell in HBC would be sold at a discount through their lower cost Zellers subsidiary and so on.
So far so good. But things go off the rails in this story right about....now.
The department store industry during this era was faced with a massive change in consumer spending thanks to the evolution of box stores and mass market retail sales clubs. Now the all-in-one stop department stores were no longer competitive on pricing and their product lines were being put in direct competition with good quality, low cost substitutes. Throw in a recession or two in Canada and you have the makings of financial disaster.
Right about then there was a management philosophy that was prevailing over experience and common sense in businesses around the world that hit the company in several key and devastating ways. Over time I'll go into other aspects and applications, but one of them was inflicted on/by their marketing department in specific that applies to this story.
There are certain words that will always draw attention in any piece of advertising: New, Sale, Half-Off. Those kinds of things always get attention and almost always draw in customers looking for a great deal.
The new philosophy at the marketing department was implemented post-haste. Once a month the company would have a blockbuster sale and advertise it extensively using each of those key, top-draw advertising bell-ringers.
Inventory flowed, sales figures climbed, Hallelujah's were said. Monster sales volumes occured as thousands thronged to get the best deals of the season. Profit margins were low, but volume made it profitable.
Then sales trickled off. No one seemed to need the products they had just bought in such massive quantities once the sale wore off. Sales figures for the rest of the month were down, but since they had had such a great sale to start the period, their overall numbers still looked good. The sale to start the next month again was a huge hit - throngs came by the thousands and staff simply could not keep up with demand. Again, a big success and a big sigh of relief as the month started off so well.
But again the numbers for the rest of the month were off. They still were not gaining any real market penetration and the overall numbers were still down as they kept losing marketshare to the box stores and Walmarts that kept popping up all over the place.
Well, if it's working on a monthly basis, let's see if it will work on a weekly basis?
So they did. The big sales started to show up every weekend, tailored to meet the needs of their biggest customers - the families who needed the one-stop convenience that a department store offered.
Again the company was rewarded - the public loved the idea of being able to go get stuff every weekend at huge discounts, and for a few months the volumes on the weekends soared outrageously, even leading the company to believe that they might be able to recoup some of that lost marketshare and start gaining it back.
But the company next noticed a horrible trend - no one was shopping during the week! The customers now shopped only on weekends - literally! Some stores that ordinarily would do $50-100 k in business on a weekday would be lucky to do $1000 for the entire store in total. But the costs of running the stores stayed constant - they still had to staff every department, keep the inventory on the floor, clean the facilities, etc because of the long term rental agreements that the malls they were located in had included in their rental contracts. And the properties were far too valuable to give up. So those stores *had* to lose money 5 days a week so that they could make money on the other two. Hmmmm.....not so good.
And then came the kicker - the consumer had learned the drill. They now knew that HBC would continue to offer these sales days because they had to in order to move inventory and keep from financial crisis from lousy cash flow. Now the consumer could relax their spending and only shop for the quantities they needed in the short term and only on sales days.
HBC's sales volumes plummeted, even on their big sales weekends. And now their customers were trained by the company not to shop the rest of the week either and sales volumes there were almost non-existant. What idiot would pay double for a fridge, shirt, lawn mower or vacuum on a Monday when they could go one day earlier or 5 days later and buy it half-off?
Worse still, they had sold the customers all that the customers would need for months to come in advance and now they didn't need the store anymore. They *could* shop, but there was no incentive that said they *had* to shop.
The company was in panic mode. It was so stressed out it took little time to learn the lessons of the day then and went straight to desperation mode. If the customer was driven by sales prices, then that must be where the solution lay. Now once a month 80% off days showed up. Couponing, discounting, desperation set in. The company was heading straight to disaster.
Sooner or later the day came when their maximum discounts were no longer enough to lure in customers. Combined with crippling overstocking of unmovable inventory the company faced financial collapse. Stores were sold off, the company shrank in desperate cost cutting measures...layoffs, angry creditors...you know the drill.
Again, the question applies - how does this apply to the Cash for Clunkers deal?
Car sales to domestic manufacturers have been sliding for years. The big three did all the financing and discounting deals they were prepared to do and again had spikes and collapses in sales that left them holding millions of vehicles in inventory and empty bags of profit. The solution? A huge discount to drive a selling spree, in this case sponsored by the federal government. And as soon as that incentive ends, just precisely when do you expect anyone will need to buy a car again? The drought that follows the big sale may just be the last nail needed to seal the coffin on our domestic car industry the way improperly planned sales spikes nearly destroyed the oldest company on the continent.
Add to that an energy tax that will punitively increase the cost of gas and a requirement to increase the manufacturing cost of vehicles to meet the arbitrary mileage requirements of new legislation concerning vehicle manufacturing and the pitifully weak domestic industry as a whole faces extinction.
There is no doubt that the industry needs a boost or faces catastrophic failure, but so did the department store industry in Canada in the 80's and 90's. The solution wasn't to spike sales at the cost of future sales then any more than it will be for our car industry today.
The solution is finding the right products that people want to buy and offering them with better wuality and better pricing. Oh, and get rid of the dealerships that are eating up your profit margins and giving the industry a perpetual black eye. Make car buying a thing people want to do, not something people abhorr more than having a root canal and quadruple bypass 2-for-1 special. In other words, run your business properly and you won't need to have the massive sales except when you have surpluss inventory that you need to clear out. Which is what sales were designed for in the first place.
It is still in operation today but under American ownership as a result of numerous management mistakes and fiduciary failures which needed to be corrected by someone with deeper pockets and a better management team. I'm not 100% sure that their owners (the holding company that owns Lord and Taylor's) are necessarily that team, but they will certainly do no worse.
How does the Hudson's Bay Company of Canada have anything to do with our government's Cash for Clunkers program? Good question. I have a great answer.
The Hudson's Bay Company (HBC) went through tumultuous financial times in the 80's and 90's like most retailers. They tried to buy a number of other chains in order to diversify their market reach and expand market dominance of the hard-fought department chain consumer market and to reposition their products for re-sale as they went through their product aging cycle/ Clothes that were unable to sell in HBC would be sold at a discount through their lower cost Zellers subsidiary and so on.
So far so good. But things go off the rails in this story right about....now.
The department store industry during this era was faced with a massive change in consumer spending thanks to the evolution of box stores and mass market retail sales clubs. Now the all-in-one stop department stores were no longer competitive on pricing and their product lines were being put in direct competition with good quality, low cost substitutes. Throw in a recession or two in Canada and you have the makings of financial disaster.
Right about then there was a management philosophy that was prevailing over experience and common sense in businesses around the world that hit the company in several key and devastating ways. Over time I'll go into other aspects and applications, but one of them was inflicted on/by their marketing department in specific that applies to this story.
There are certain words that will always draw attention in any piece of advertising: New, Sale, Half-Off. Those kinds of things always get attention and almost always draw in customers looking for a great deal.
The new philosophy at the marketing department was implemented post-haste. Once a month the company would have a blockbuster sale and advertise it extensively using each of those key, top-draw advertising bell-ringers.
Inventory flowed, sales figures climbed, Hallelujah's were said. Monster sales volumes occured as thousands thronged to get the best deals of the season. Profit margins were low, but volume made it profitable.
Then sales trickled off. No one seemed to need the products they had just bought in such massive quantities once the sale wore off. Sales figures for the rest of the month were down, but since they had had such a great sale to start the period, their overall numbers still looked good. The sale to start the next month again was a huge hit - throngs came by the thousands and staff simply could not keep up with demand. Again, a big success and a big sigh of relief as the month started off so well.
But again the numbers for the rest of the month were off. They still were not gaining any real market penetration and the overall numbers were still down as they kept losing marketshare to the box stores and Walmarts that kept popping up all over the place.
Well, if it's working on a monthly basis, let's see if it will work on a weekly basis?
So they did. The big sales started to show up every weekend, tailored to meet the needs of their biggest customers - the families who needed the one-stop convenience that a department store offered.
Again the company was rewarded - the public loved the idea of being able to go get stuff every weekend at huge discounts, and for a few months the volumes on the weekends soared outrageously, even leading the company to believe that they might be able to recoup some of that lost marketshare and start gaining it back.
But the company next noticed a horrible trend - no one was shopping during the week! The customers now shopped only on weekends - literally! Some stores that ordinarily would do $50-100 k in business on a weekday would be lucky to do $1000 for the entire store in total. But the costs of running the stores stayed constant - they still had to staff every department, keep the inventory on the floor, clean the facilities, etc because of the long term rental agreements that the malls they were located in had included in their rental contracts. And the properties were far too valuable to give up. So those stores *had* to lose money 5 days a week so that they could make money on the other two. Hmmmm.....not so good.
And then came the kicker - the consumer had learned the drill. They now knew that HBC would continue to offer these sales days because they had to in order to move inventory and keep from financial crisis from lousy cash flow. Now the consumer could relax their spending and only shop for the quantities they needed in the short term and only on sales days.
HBC's sales volumes plummeted, even on their big sales weekends. And now their customers were trained by the company not to shop the rest of the week either and sales volumes there were almost non-existant. What idiot would pay double for a fridge, shirt, lawn mower or vacuum on a Monday when they could go one day earlier or 5 days later and buy it half-off?
Worse still, they had sold the customers all that the customers would need for months to come in advance and now they didn't need the store anymore. They *could* shop, but there was no incentive that said they *had* to shop.
The company was in panic mode. It was so stressed out it took little time to learn the lessons of the day then and went straight to desperation mode. If the customer was driven by sales prices, then that must be where the solution lay. Now once a month 80% off days showed up. Couponing, discounting, desperation set in. The company was heading straight to disaster.
Sooner or later the day came when their maximum discounts were no longer enough to lure in customers. Combined with crippling overstocking of unmovable inventory the company faced financial collapse. Stores were sold off, the company shrank in desperate cost cutting measures...layoffs, angry creditors...you know the drill.
Again, the question applies - how does this apply to the Cash for Clunkers deal?
Car sales to domestic manufacturers have been sliding for years. The big three did all the financing and discounting deals they were prepared to do and again had spikes and collapses in sales that left them holding millions of vehicles in inventory and empty bags of profit. The solution? A huge discount to drive a selling spree, in this case sponsored by the federal government. And as soon as that incentive ends, just precisely when do you expect anyone will need to buy a car again? The drought that follows the big sale may just be the last nail needed to seal the coffin on our domestic car industry the way improperly planned sales spikes nearly destroyed the oldest company on the continent.
Add to that an energy tax that will punitively increase the cost of gas and a requirement to increase the manufacturing cost of vehicles to meet the arbitrary mileage requirements of new legislation concerning vehicle manufacturing and the pitifully weak domestic industry as a whole faces extinction.
There is no doubt that the industry needs a boost or faces catastrophic failure, but so did the department store industry in Canada in the 80's and 90's. The solution wasn't to spike sales at the cost of future sales then any more than it will be for our car industry today.
The solution is finding the right products that people want to buy and offering them with better wuality and better pricing. Oh, and get rid of the dealerships that are eating up your profit margins and giving the industry a perpetual black eye. Make car buying a thing people want to do, not something people abhorr more than having a root canal and quadruple bypass 2-for-1 special. In other words, run your business properly and you won't need to have the massive sales except when you have surpluss inventory that you need to clear out. Which is what sales were designed for in the first place.
Marketing to sell a Million by September next year.
I shared a rough outline of what you can do to make a lot of money fairly easily, and a little bit of how it could work. Now I am going to get to one of the two subjects that determine whether you’re going to be successful at it –how to get your customers to notice you.
This is the difference between Marketing and Advertising.
Advertising is sending a message out to attract customers. Marketing is making sure your product and your customers have a great meeting.
‘Sales’ is what happens when that great meeting results in a buying decision.
I do not pretend to have the penultimate sales advice – I’m good, very good, but it isn’t what I focus on. My focus is almost exclusively on Marketing because if it is done properly then every sales professional will tell you that they *love* working for you because 90-95% of their job is done for them. Their leads are all warmed up, the customer already is familiar and educated about the product, the pricing is already structured to be affordable but valued by the customer, all the upkeep and service agreements are all thought out and work for everyone – the complete package is buying-decision-ready. The sales pro then really just needs to tip the scales, collect the orders and keep in contact with the customer to make sure they are happy while leaving the door open for any follow-up orders or referrals.
So if I do my job properly, my team’s job is made much, much easier, and everyone makes a *lot* more money and everyone, including the customer, is a lot happier about it.
So recently I told you to build a product that allows you to share a knowledge base or skill that you have with others who can benefit from it. Whether it’s crafting, cooking, cleaning, carpentry, plumbing, computers, electronics assembly, shopping, history, music, entertainment or anything else, there is an infinite supply of topics that your personal take on could be of value and interest to others.
I also told you that you could format it in a way that you could give courses on how to do what you know how to do. Those courses could add a whole new revenue stream and introduce your products to whole new audiences.
I then told you that a second product in that field could just be what you need to go over the top.
But I didn’t tell you how to do the Marketing to get it in your customers’ hands.
Here’s one approach you could use – remember, just like I described in my earlier blog, there are literally thousands of ways to market your products and services. This is just one example.
Let’s say you’ve written a book on negotiating contracts. It’s pretty safe to bet that not *everyone* you meet in a department or book store is going to want or need to read that book.
Who does need that information? I can think of dozens of groups that would benefit tremendously from it and from a presentation that tailors the interpretation of the book to their needs. Chambers of Commerce, union reps, sales professional development associations, business students at university and college, law students, legal firms, insurance companies, realtors, and many, many more groups and organizations need that kind of information. So do the spouses who run the households, by the way. They do all the negotiating within the family, with suppliers for services and products for the home, work out the insurance policies and coverage, negotiate and organize schedules, and so on. Ever notice that no one has set up professional development days for those who professionally manage our families and our homes? We might want to work on fixing that. Just a thought.
So if you targeted each of those groups above in each neighbourhood near where you live then you should be able to build a pretty decent list of groups that would be interested in hearing what you have to say.
Your next step is to put together the most enticing invitation you can possibly come up with for each group. You want to find a way to present to them and get paid for doing it. Send invitations to every member, to the Chambers, to the local media, to any relevant people. Send reminder notices as the days get closer. Do follow up calls to anyone who calls to ask info about the event. Try and get on local radio or TV to talk about the event. Send letters to the editor and articles to your local papers discussing what's going to happen at the event or why the subject is very topical and important right now. Once you have the list of attendees, this will also give you the opportunity to sell your product – in this case the book on negotiating contracts.
Or you could combine the two and sell your courses and include a copy of the book for free by factoring your profit margin into the cost of the course.
You could also team up with others in your neighbourhood or subject matter and sell the courses or books in package deals to widen the reach of customer base and minimize your per presentation costs by splitting it between the various presenters.
So let’s take some specific examples and do the math, shall we?
Your local Chamber of Commerce has a list of member companies, usually several thousand long and for a nominal fee or free you should be able to send an invitation to all member companies as a special opportunity just for their members. Out of that list, if you have a successful invitation, you should probably expect to get about 5% response rate or at least 50-150 calls, of which you’ll probably close about 1/3 as sales. (These numbers I’m using are industry standards for moderately successful mail campaigns.)
That means that you should be able to expect between 16 and 50 sales by inviting your local CoC. Assuming each other group listed above produced similar results, then you could roughly multiply that number by the number of groups you invite. If you invite 10 groups, you’ll probably end up with approximately 300 paying customers for an event or a book sale.
If you make $25 in profit from each sale, then one event should have a single payout of $7500 or more in your pocket before taxes.
If you want to earn $1,000,000 on that basis, you only need to host 134 events.
If you were able to make as much as $50 in profit per sale, you would only need to host 67 events to make your target income.
That means having an average of a little more than one event per week.
That’s the kind of schedule that most people can handle.
Sure, most of the events will probably be out of town because you’ll run out of local options fairly quickly, but think about it. The only day you really have penciled in each week is the one you deliver your presentation on. Everything else in your life suddenly became a *lot* more flexible.
And don’t forget the $7,500+ per week incentive.
See, what happens here is that you find your customers in an environment in which they see your product for the value it brings to them. If you try and pitch a pool cleaning company to a branch manager at Intel at the office, I can guarantee they won’t be interested. If you pitch them the same option at a pool supplies or patio furniture retailer you are far more likely to get the sale. It’s the same potential customer – but the environment, the circumstances, the sales logic are all completely different.
It’s the ability to meet the customer’s needs that matters. In one environment, they don’t need a pool cleaner. In another it’s a perfectly natural fit. In one case they see no value at all – how is a clean residential pool going to make the world’s largest computer chip manufacturer more profitable? But in the other environment the value makes sense – it’s safer and healthier for your family, it frees up more time to spend with your family, it’s less expensive, better quality…whatever the benefits are, this is where they make *sense.*
By attacking your market in the right environments, where it is natural to the customer to want to do that kind of business, they are already interested in making a buying decision. From there on you add to it by adding in opportunities to reach out to new kinds of customers as well, blending both traditional customer types (busy working business pros for example) with entirely new markets (launching the first PD days for household managers) and offering new products to extend the sales cycle while you’re at it.
In one fell swoop you’ve managed to sell to your traditional client base, a new client base, and to sell add-on revenue.
And if you’re lucky and smart enough to combine your events with those of a couple of other people whose products match up well with yours, then you can shave your costs down and increase your profitability. Of course the more profitable each event is, the fewer events you have to have to achieve your objective of $1,000,000 in new revenue this coming year.
In another blog I’ll start sharing some tips and tricks on how to increase your profitability per event in order to make your goals easier to attain – I just wanted to give you the basic outline of how this can work for now.
Of course there are any number of challenges with this approach. What happens if you don’t like public speaking? You could split the proceeds with someone who is – you write the content, they deliver the show. What if you can’t sell to save your life? Same thing. You split the proceeds with someone who can. What if you can’t write very well. You deliver the show, and have someone work with you to write what you know.
There is usually a way to make this idea work for just about anybody, if you really want to try it, but as I said before, it’s nowhere near the only way to go to accomplish your dreams.
Find your own path and borrow from what you can learn here to make your path more rewarding and productive. That’s what we’re here for.
This is the difference between Marketing and Advertising.
Advertising is sending a message out to attract customers. Marketing is making sure your product and your customers have a great meeting.
‘Sales’ is what happens when that great meeting results in a buying decision.
I do not pretend to have the penultimate sales advice – I’m good, very good, but it isn’t what I focus on. My focus is almost exclusively on Marketing because if it is done properly then every sales professional will tell you that they *love* working for you because 90-95% of their job is done for them. Their leads are all warmed up, the customer already is familiar and educated about the product, the pricing is already structured to be affordable but valued by the customer, all the upkeep and service agreements are all thought out and work for everyone – the complete package is buying-decision-ready. The sales pro then really just needs to tip the scales, collect the orders and keep in contact with the customer to make sure they are happy while leaving the door open for any follow-up orders or referrals.
So if I do my job properly, my team’s job is made much, much easier, and everyone makes a *lot* more money and everyone, including the customer, is a lot happier about it.
So recently I told you to build a product that allows you to share a knowledge base or skill that you have with others who can benefit from it. Whether it’s crafting, cooking, cleaning, carpentry, plumbing, computers, electronics assembly, shopping, history, music, entertainment or anything else, there is an infinite supply of topics that your personal take on could be of value and interest to others.
I also told you that you could format it in a way that you could give courses on how to do what you know how to do. Those courses could add a whole new revenue stream and introduce your products to whole new audiences.
I then told you that a second product in that field could just be what you need to go over the top.
But I didn’t tell you how to do the Marketing to get it in your customers’ hands.
Here’s one approach you could use – remember, just like I described in my earlier blog, there are literally thousands of ways to market your products and services. This is just one example.
Let’s say you’ve written a book on negotiating contracts. It’s pretty safe to bet that not *everyone* you meet in a department or book store is going to want or need to read that book.
Who does need that information? I can think of dozens of groups that would benefit tremendously from it and from a presentation that tailors the interpretation of the book to their needs. Chambers of Commerce, union reps, sales professional development associations, business students at university and college, law students, legal firms, insurance companies, realtors, and many, many more groups and organizations need that kind of information. So do the spouses who run the households, by the way. They do all the negotiating within the family, with suppliers for services and products for the home, work out the insurance policies and coverage, negotiate and organize schedules, and so on. Ever notice that no one has set up professional development days for those who professionally manage our families and our homes? We might want to work on fixing that. Just a thought.
So if you targeted each of those groups above in each neighbourhood near where you live then you should be able to build a pretty decent list of groups that would be interested in hearing what you have to say.
Your next step is to put together the most enticing invitation you can possibly come up with for each group. You want to find a way to present to them and get paid for doing it. Send invitations to every member, to the Chambers, to the local media, to any relevant people. Send reminder notices as the days get closer. Do follow up calls to anyone who calls to ask info about the event. Try and get on local radio or TV to talk about the event. Send letters to the editor and articles to your local papers discussing what's going to happen at the event or why the subject is very topical and important right now. Once you have the list of attendees, this will also give you the opportunity to sell your product – in this case the book on negotiating contracts.
Or you could combine the two and sell your courses and include a copy of the book for free by factoring your profit margin into the cost of the course.
You could also team up with others in your neighbourhood or subject matter and sell the courses or books in package deals to widen the reach of customer base and minimize your per presentation costs by splitting it between the various presenters.
So let’s take some specific examples and do the math, shall we?
Your local Chamber of Commerce has a list of member companies, usually several thousand long and for a nominal fee or free you should be able to send an invitation to all member companies as a special opportunity just for their members. Out of that list, if you have a successful invitation, you should probably expect to get about 5% response rate or at least 50-150 calls, of which you’ll probably close about 1/3 as sales. (These numbers I’m using are industry standards for moderately successful mail campaigns.)
That means that you should be able to expect between 16 and 50 sales by inviting your local CoC. Assuming each other group listed above produced similar results, then you could roughly multiply that number by the number of groups you invite. If you invite 10 groups, you’ll probably end up with approximately 300 paying customers for an event or a book sale.
If you make $25 in profit from each sale, then one event should have a single payout of $7500 or more in your pocket before taxes.
If you want to earn $1,000,000 on that basis, you only need to host 134 events.
If you were able to make as much as $50 in profit per sale, you would only need to host 67 events to make your target income.
That means having an average of a little more than one event per week.
That’s the kind of schedule that most people can handle.
Sure, most of the events will probably be out of town because you’ll run out of local options fairly quickly, but think about it. The only day you really have penciled in each week is the one you deliver your presentation on. Everything else in your life suddenly became a *lot* more flexible.
And don’t forget the $7,500+ per week incentive.
See, what happens here is that you find your customers in an environment in which they see your product for the value it brings to them. If you try and pitch a pool cleaning company to a branch manager at Intel at the office, I can guarantee they won’t be interested. If you pitch them the same option at a pool supplies or patio furniture retailer you are far more likely to get the sale. It’s the same potential customer – but the environment, the circumstances, the sales logic are all completely different.
It’s the ability to meet the customer’s needs that matters. In one environment, they don’t need a pool cleaner. In another it’s a perfectly natural fit. In one case they see no value at all – how is a clean residential pool going to make the world’s largest computer chip manufacturer more profitable? But in the other environment the value makes sense – it’s safer and healthier for your family, it frees up more time to spend with your family, it’s less expensive, better quality…whatever the benefits are, this is where they make *sense.*
By attacking your market in the right environments, where it is natural to the customer to want to do that kind of business, they are already interested in making a buying decision. From there on you add to it by adding in opportunities to reach out to new kinds of customers as well, blending both traditional customer types (busy working business pros for example) with entirely new markets (launching the first PD days for household managers) and offering new products to extend the sales cycle while you’re at it.
In one fell swoop you’ve managed to sell to your traditional client base, a new client base, and to sell add-on revenue.
And if you’re lucky and smart enough to combine your events with those of a couple of other people whose products match up well with yours, then you can shave your costs down and increase your profitability. Of course the more profitable each event is, the fewer events you have to have to achieve your objective of $1,000,000 in new revenue this coming year.
In another blog I’ll start sharing some tips and tricks on how to increase your profitability per event in order to make your goals easier to attain – I just wanted to give you the basic outline of how this can work for now.
Of course there are any number of challenges with this approach. What happens if you don’t like public speaking? You could split the proceeds with someone who is – you write the content, they deliver the show. What if you can’t sell to save your life? Same thing. You split the proceeds with someone who can. What if you can’t write very well. You deliver the show, and have someone work with you to write what you know.
There is usually a way to make this idea work for just about anybody, if you really want to try it, but as I said before, it’s nowhere near the only way to go to accomplish your dreams.
Find your own path and borrow from what you can learn here to make your path more rewarding and productive. That’s what we’re here for.
05 August, 2009
The Unreachable Stars.
Of course life always catches us when we least expect it. The rainy day fund is always sucked dry just before it actually rains, the insurance on the other driver's vehicle lapsed two days before the accident, the money runs out before the month does - whatever the circumstance, the point remains the same. We are often subject to those whims and fates that are just a tad oustide our circle of immediate control.
We often ask for it by the lives we lead. I know *exactly* why I have a back problem - I went asking for it by doing a lot of things no sane person should put their backs through during those early years known as 'the invincible years.'
This week has been little different. Work is work - the hours are long, and the pay is perhaps not what one would like, but it's my job and I'm proud of it. My projects always beckon, and I always wish I had more time for them. And home had the blissfull scenario of having a rush job to prevent an attack of seasonal bugs and rodents from deciding to invade my home which ate up my entire weekend outside in the hot, hot sun.
But what sustains me, outside of the love of my family and friends, is my ever-insatiable quest to achieve my dreams by helping others. Seems weird, probably, I know, but it's true nonetheless.
Most of my friends are doing reasonably well and the best help I can give them is a friendly smile and a sincere interest in their lives and well-being. Some deserve a shoulder and warm hearted word to help them keep their world together during their truly heartbreaking trials.
And others, like me, aim to reach for the stars, and so by striving, change them.
It's not just ambition, and it's not idle pride that drives them. There's an element of curiosity, true, but in reality we strive to accomplish something worthwhile, something greater than ourselves.
No matter whether lasting a moment in time or an eternity in stone, there are accomplishments and achievements that stand out in a life, in a lifetime, in an era. I fully believe that in each and every person lies the ability to accomplish those kinds of achievements but I also know that the vast majority of us never really take the chance to achieve them.
I read recently where 8/10 people plan to and desire to write a book. Of those people, less than 20 % will try, and of that 20% less than 20% will complete the book, and less than 20% of those will ever send their work to be published. That means that less than 0.0064 % of the population will ever write the books which they have in their hearts desire to write and see it through to publication.
How many other dreams in society are left un-reached for? How many advancements in society are left unachieved because they were never started? How many lives will be lost because no one tried to solve the unsolvable enigmas of science? How many lives could be changed if more people reached the unreachable stars?
We often ask for it by the lives we lead. I know *exactly* why I have a back problem - I went asking for it by doing a lot of things no sane person should put their backs through during those early years known as 'the invincible years.'
This week has been little different. Work is work - the hours are long, and the pay is perhaps not what one would like, but it's my job and I'm proud of it. My projects always beckon, and I always wish I had more time for them. And home had the blissfull scenario of having a rush job to prevent an attack of seasonal bugs and rodents from deciding to invade my home which ate up my entire weekend outside in the hot, hot sun.
But what sustains me, outside of the love of my family and friends, is my ever-insatiable quest to achieve my dreams by helping others. Seems weird, probably, I know, but it's true nonetheless.
Most of my friends are doing reasonably well and the best help I can give them is a friendly smile and a sincere interest in their lives and well-being. Some deserve a shoulder and warm hearted word to help them keep their world together during their truly heartbreaking trials.
And others, like me, aim to reach for the stars, and so by striving, change them.
It's not just ambition, and it's not idle pride that drives them. There's an element of curiosity, true, but in reality we strive to accomplish something worthwhile, something greater than ourselves.
No matter whether lasting a moment in time or an eternity in stone, there are accomplishments and achievements that stand out in a life, in a lifetime, in an era. I fully believe that in each and every person lies the ability to accomplish those kinds of achievements but I also know that the vast majority of us never really take the chance to achieve them.
I read recently where 8/10 people plan to and desire to write a book. Of those people, less than 20 % will try, and of that 20% less than 20% will complete the book, and less than 20% of those will ever send their work to be published. That means that less than 0.0064 % of the population will ever write the books which they have in their hearts desire to write and see it through to publication.
How many other dreams in society are left un-reached for? How many advancements in society are left unachieved because they were never started? How many lives will be lost because no one tried to solve the unsolvable enigmas of science? How many lives could be changed if more people reached the unreachable stars?
30 July, 2009
So you're not a Carpenter...so what?
I get asked by businesses how they can add revenues and 'pick up business.' I'm always amazed that the answers aren't obvious - offer something new that will attract customers or that will get your current customers to buy more often from you.
Ok, smartie pants. I know, "That and a buck will maybe get you a cup of cheap coffee."
No, really. Here's an example.
Suppose you own a restaurant. Most restaurants have a certain seasonality to their customer base. If you run a restaurant near a university or college, then your season depends on when the students are in town. If you operate near a major employer, then your traffic is going to depend on their financial health and their work schedules. If you work out doors, you are dependent on the weather. in other words, you have high and low periods, and you want to find a way to generate more sales in the low periods too.
Fair enough.
I can't count the number of times I've seen this stat, but I know it to be true: The cost of getting a sale from 1 new customer is 7 times as much as getting a sale from a retourning customer.
What that means is that you must advertise, discount, promote, introduce, etc. in order to get a new customer. A returning customer already knows about you and knows what they are most likely to want to buy from you before they start.
So if you want to grow your customer base, it only makes sense to encourage your existing customers to bring new customers with them, thereby doubling your sales and introducing new customers to your business. It's far cheaper and faster than trying to go get new customers from scratch. Honest.
So how do you do *that*, then?
Simple - give them something new when they bring a new customer on board and give them the best experience they've had with you and your sales will go up.
And yes, 2-for-1's do work to a degree, but that doesn't create buzz or lasting interest. It only creates a temporary boost at a dramatic cost.
No, I mean come up with a new product that your existing customers will go nuts for and encourage them to bring in new customers to buy them too.
For restaurants you could try a new cocktail of the week special and a course on making cocktails and a recipe book to sell with it.
For clothing stores, have a retro fashion show and sell a book on your store's history of fashion, along with a whole rack of retro clothes for sale. It'll clear out old inventory, and bring a feeling of belonging to the store to its customers.
For electronics stores sell an E-book on how to wire electronics gizmos when you get them home. We all know those stupid instructions booklets are utterly useless!
The list is endless - really.
The question isn't can you get more sales, the question is what are you prepared to offer to get them? Are you simply going to do a couponing, or are you going to give the customer something they'll remember, talk about and come back with friends to buy something else from you next time?
Ok, smartie pants. I know, "That and a buck will maybe get you a cup of cheap coffee."
No, really. Here's an example.
Suppose you own a restaurant. Most restaurants have a certain seasonality to their customer base. If you run a restaurant near a university or college, then your season depends on when the students are in town. If you operate near a major employer, then your traffic is going to depend on their financial health and their work schedules. If you work out doors, you are dependent on the weather. in other words, you have high and low periods, and you want to find a way to generate more sales in the low periods too.
Fair enough.
I can't count the number of times I've seen this stat, but I know it to be true: The cost of getting a sale from 1 new customer is 7 times as much as getting a sale from a retourning customer.
What that means is that you must advertise, discount, promote, introduce, etc. in order to get a new customer. A returning customer already knows about you and knows what they are most likely to want to buy from you before they start.
So if you want to grow your customer base, it only makes sense to encourage your existing customers to bring new customers with them, thereby doubling your sales and introducing new customers to your business. It's far cheaper and faster than trying to go get new customers from scratch. Honest.
So how do you do *that*, then?
Simple - give them something new when they bring a new customer on board and give them the best experience they've had with you and your sales will go up.
And yes, 2-for-1's do work to a degree, but that doesn't create buzz or lasting interest. It only creates a temporary boost at a dramatic cost.
No, I mean come up with a new product that your existing customers will go nuts for and encourage them to bring in new customers to buy them too.
For restaurants you could try a new cocktail of the week special and a course on making cocktails and a recipe book to sell with it.
For clothing stores, have a retro fashion show and sell a book on your store's history of fashion, along with a whole rack of retro clothes for sale. It'll clear out old inventory, and bring a feeling of belonging to the store to its customers.
For electronics stores sell an E-book on how to wire electronics gizmos when you get them home. We all know those stupid instructions booklets are utterly useless!
The list is endless - really.
The question isn't can you get more sales, the question is what are you prepared to offer to get them? Are you simply going to do a couponing, or are you going to give the customer something they'll remember, talk about and come back with friends to buy something else from you next time?
How to make a Million Dollars.
So you've been patiently reading along, waiting for the day when I tell you step by step how you make a lot of money in less than a year, preferably more than a million dollars, right?
Ok, I will. First, know that this is not the only way to do it, and I have about a hundred other ideas that are every bit as likely to make a lot of money on any given day. This is just ONE way to do it so you know I'm not full of crap.
If you've read any of my prior blogs in preparation for the Race to 2010 and you actually filled out any of the Baselines then you should already have a good idea or two of what skills or knowledge base you may have that others might find interesting. That's your starting point, right there.
The trick is to find a way to share that knowledge or skill with others, this way you can share it over and over again, getting paid each time for the benefit of your talents or expertise.
You can give courses, you can make a DVD/CD-ROM, write a book, develop a website - whatever fits your personality, skills and budget. Then you sell that product to the people who'll use it (and pay for it!)
Simple, right? So why isn't everyone who does that kind of thing filthy rich?
Usually it's a combination of not knowing how to sell their product, where to sell it, or what kind of product is needed by the consumer. Basically it's inexperience in running a business, not in your product itself.
Here's one example:
A carpenter who lost his job building houses in the current economy could write up a book full of step by step instructions on how to make things - bird houses, composters, shelves, armoires, furniture, dining room tables, cabinetry - whatever floats your boat. Then have them published by an on-demand publisher who will charge by the book. You find them online and go for one that gives you the most tools and lowest priced copies for the most minimal investment on your part. You should be able to find it for $50 or less.
Set up a demonstration booth just about anywhere the public passes by that you can legally set one up. Hopefully where you think a lot of potential customers would be likely to be. Have copies of your books and sign up sheets for your courses available for sale and start raking in the dough. You should be able to sell 10-50 copies a day in a reasonable location while demonstrating, plus sell the demo products and sell another 5-20 training class fees per day as well.
If you make $25 profit per book and another $25 per class and another $200 in demo product sales, then you're looking at approx $1450 per day, $7250 per week, $350k per year. Or better.
If your book sells well online or you get a sponsorship to do your demos in home reno stores across the country then you can expect that number to climb quickly.
If you can put together a second book you could add another $700-$1250 per day right there, and you'd be heading up closer to the $700k mark very quickly.
See where I'm going here?
Virtually any area of knowledge or talent or skill can be reproduced and sold. It's how you manage the selling and the quality and value of the product that makes you the money.
I can help you figure out your product, help you design a serious marketing and sales strategy to make it profitable, and help get you launched on your way to making some serious cash - but you have to take the first few steps.
Ok, I will. First, know that this is not the only way to do it, and I have about a hundred other ideas that are every bit as likely to make a lot of money on any given day. This is just ONE way to do it so you know I'm not full of crap.
If you've read any of my prior blogs in preparation for the Race to 2010 and you actually filled out any of the Baselines then you should already have a good idea or two of what skills or knowledge base you may have that others might find interesting. That's your starting point, right there.
The trick is to find a way to share that knowledge or skill with others, this way you can share it over and over again, getting paid each time for the benefit of your talents or expertise.
You can give courses, you can make a DVD/CD-ROM, write a book, develop a website - whatever fits your personality, skills and budget. Then you sell that product to the people who'll use it (and pay for it!)
Simple, right? So why isn't everyone who does that kind of thing filthy rich?
Usually it's a combination of not knowing how to sell their product, where to sell it, or what kind of product is needed by the consumer. Basically it's inexperience in running a business, not in your product itself.
Here's one example:
A carpenter who lost his job building houses in the current economy could write up a book full of step by step instructions on how to make things - bird houses, composters, shelves, armoires, furniture, dining room tables, cabinetry - whatever floats your boat. Then have them published by an on-demand publisher who will charge by the book. You find them online and go for one that gives you the most tools and lowest priced copies for the most minimal investment on your part. You should be able to find it for $50 or less.
Set up a demonstration booth just about anywhere the public passes by that you can legally set one up. Hopefully where you think a lot of potential customers would be likely to be. Have copies of your books and sign up sheets for your courses available for sale and start raking in the dough. You should be able to sell 10-50 copies a day in a reasonable location while demonstrating, plus sell the demo products and sell another 5-20 training class fees per day as well.
If you make $25 profit per book and another $25 per class and another $200 in demo product sales, then you're looking at approx $1450 per day, $7250 per week, $350k per year. Or better.
If your book sells well online or you get a sponsorship to do your demos in home reno stores across the country then you can expect that number to climb quickly.
If you can put together a second book you could add another $700-$1250 per day right there, and you'd be heading up closer to the $700k mark very quickly.
See where I'm going here?
Virtually any area of knowledge or talent or skill can be reproduced and sold. It's how you manage the selling and the quality and value of the product that makes you the money.
I can help you figure out your product, help you design a serious marketing and sales strategy to make it profitable, and help get you launched on your way to making some serious cash - but you have to take the first few steps.
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