YOU CAN'T SAVE YOUR WAY TO SUCCESS
Every business owner understands that, in addition to the many internal factors which can make or break a business, the cyclical state of the economy itself can also have a material impact on the success of your company. To a certain extent, it's like the weather - we can bitch about it all we want and blame those no-good politicians, but - in the end - we have only a limited ability to change these external market conditions. However, that doesn't mean that anyone should be sitting around feeling sorry for themselves and waiting for their life to get better.
I love the old Chinese saying: “Man stand for long time with mouth open before roast duck fly in”. Good things in business don’t happen by themselves (except perhaps in the movies) and, if you aren’t making things happen and moving forward, you’ll always be losing ground. So, in my world, we don't whine about politics, circumstances or greener grass. We believe that the people who succeed in today’s hyper-competitive marketplace are the ones who get up and look for the right “circumstances” and, if they can’t find them, they make them. Everyone thinks about changing the world, but no one thinks about changing themselves or their business. But, as I’ve said before, if you don’t do it, someone will come right along who’ll be very happy to do it for you or to you.
We’ve been treading water for too long and FUD (fear, uncertainty and doubt) has made us way too conservative. The big guys have been cutting back on their R & D budgets for years to protect pennies of earnings and thereby killing any prospects for new ideas and real innovation. And the little guys (like us) have been saving our shekels and not advertising or promoting our businesses. We need to start investing aggressively in the future (like we really mean it) or many of us won’t have a future to worry about.
Now’s the time to push our products and services and to demonstrate to everyone that we have the courage of our convictions. Not when the whole world finally wakes up and jumps back into the fray. I like to think of this running ahead of the pack as “getting ready to get lucky”.
And, when you press your bets and bet on yourself and your future, you actually accomplish three other important objectives:
(1) You effectively set the pace for the rest of the market and you can become the market leader even if you’re a tiny company;
(2) You reassure not only your customers, but your employees and your vendors as well; and
(3) You can grow your business at the expense of your competition without spending a lot of money since they’ve pretty much left the playing field to you.
Keep in mind this simple fact: increased market share is taken and grown NOT in good times, but in difficult times when everyone else is sitting on the sidelines and nursing their wounds. In good times, people want to advertise. In bad times, they have to advertise. If you don’t, you die. The minute you hit the brakes, you start to slide down the sales slope.
Here’s a case in point concerning Saturn.
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When sales dipped a tiny amount at the start of 1995, they started to cut their ad spending and that flattened 1995 and 1996 sales. Then they tried to get back into the game heading into 1997, but panicked when the sales didn’t immediately recover and they cut back again on the ad spend. This killed not only 1997 results, but 1998 and 1999 sales as well even though they really accelerated their spend in mid-98. The bottom line (as the chart clearly shows) is that trying to “save your way to success” (or even to improved bottom line results) is like trying to catch a knife. Most of the time, you just can’t do it and it’s very painful even when you do.
And here’s a little survey of 600 U.S. companies whose revenues increased after the 1981-82 recession and what they did with their advertising during the recession.
Companies Increasing Advertising – VOLUME UP 275%
Companies Decreasing Advertising – VOLUME UP 19%
It couldn’t be much clearer. Ya gotta spend real money to make money. Doing business without advertising is like winking at a girl in the dark – you know what you’re doing, but no one else does. And please don’t try to do a bunch of things cheaply that you shouldn’t do at all.
Bottom line: get going. There are a number of things – large and small - that every business should do right now (especially if you believe that there's even a glimmer of light at the end of this long dark tunnel) to prepare for the better days to come. But there's one thing that is absolutely critical to understand - in good times to be sure, but even more so in tough times - you can’t save your way to success.
PP: “You Get What You Work for, Not What You Wish for”
