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(This post is not meant to pick on any one candidate or party but illustrate a business point.)
They are already talking about an Obama victory and outlining his strategy: Obama kept one message. His team met each day to brainstorm how else they could drive home the message “the change we need.” McCain kept looking for something, anything to get attention. Often it was piggybacking on something Obama said, an acquaintance he had or a vote he’d cast.
In the end it appears Obama was cool and collected at delivering a consistent economic message. McCain seemed to look desperate as the presidency slipped through his fingers.
My guess is we’ll read more stories of how the people running the campaign banked on the words, “country first” and “maverick” but in the end, what did that mean? How did it resonate with people other than the party faithful? Not enough.
My point in this post is that you have got to be thinking what message you want to put out to your customers. Is it that you have “better products, better service”? That’s not much different than “maverick.” It’s too generic and the fact you are calling yourself that usually means you aren’t. For example, seen a hotel that touts “clean rooms,” do you trust that claim? I don’t. We already assume it is clean – why are you telling us that?
What is the compelling reason anyone should shop with you? If you can’t answer that, you are bound to bounce from discounts to coupons, to any of a 100 poor ways to attract money to your register. Desperate times do not require desperate measures.
Yes, in this recessionary economy, people will undoubtedly revert to coupons and discounts. They’ll hear it from the “experts.’ What a huge mistake.
Guess what? There are cheap people out there. And you’ll get them. But they won’t give you a profit. And once you become a discount whore, you often, just like a prostitute, get trapped in a lifestyle you can’t pull yourself out of.
For example, if $100 off coupons got people in your doors last year but it didn’t work this year, you are probably tempted to make it $150. The problem is you are destroying the actual price of the item.
Case in point, last month Chrysler who is going through a particularly devastating downward spiral, advertised all Ram trucks at 40% off sticker price in September. At that point, their dealers can no longer can say this truck is worth $35,000 when it went for $21,000 . And what did that do to their used truck market?
No wonder the automotive business is in the tank. Customers aren’t stupid – they’re waiting for what other desperate measures they’ll take to get us in the showroom. And when the auto manufacturers combine large discounts with 0% financing, we’ll step in the dealerships again. The only thing missing will be the profits to balance out the giveaways. Downward spiral indeed.
You have got to get the customers to pay what is needed to make your nut each month plus a salary for yourself. I get so mad when I hear economists saying small businesses have to “hold the line” on price increases. What a bunch of baloney. Really.
How is Jane’s Espresso Shop supposed to pay the bills if she can’t recoup the costs to operate her business? Take out an equity loan? She’s already done that talking heads. That’s only prolonged the agony. She has got to know her food cost percentages, labor percentages and profit percentages; otherwise she is a mini-welfare agency giving everything away. And we have a lot of them out there right now. Backs against the wall they have every reason to be scared of failing.
Struggling business owners, you have to honestly look at your numbers. If you want my seven indicators of a business’ health – send me an email and I’ll send it to you for free. It’s going to be part of my do-it-yourself business makeover system debuting in January 2009, but you can see it now. In the meantime, here are my seven thoughts on why coupons don’t work.
