The Plunger

Americans are entrepreneurial by nature, hard working, and creative. While I’m confident that American ingenuity and entrepreneurship will once again lead us out of this economic downturn, it will no doubt be a painful process.

Warren Buffet once said the only way to go broke is on borrowed money.

We are at a point in time where we, in almost every sector of society, are over-leveraged. We read daily about the “need” for credit to sustain daily operations at businesses ranging in size from family-run service companies to International mega-corporations. We must separate ourselves from this financial heroin.

The biggest current challenge we see facing the industries we serve is liquidating on-hand inventories. Many sellers have too much inventory for their contracted market size. In addition to their bloated inventory position, that inventory is getting more expensive thanks to accruing interest and finance charges. On top of that, due to model year depreciation, inventory units are losing resale value every day.

Making matters worse, these same businesses rely heavily on their customer’s ability to borrow in order to purchase their products. Because of the credit freeze at the retail level, there are now fewer customers who have the ability to purchase these products.

Thusly, there are too many units for sale; that are getting more expensive; that are losing resale value; and now there are a fewer number of customers to sell them to. This is going to end up badly for a lot of people.

Now that dealers aren’t selling units at the retail level, they are not replenishing those inventories. Manufacturers are now unable to sell more units to dealers, and the vicious cycle begins.

In order to re-ignite the market we must plunge this aging inventory… fast! Like a clog stuck in a pipe, new units cannot start flowing again until the aged inventory is purged from the system. Once the aged inventory has been moved, builders must then carefully adjust their production output to match the contracted demand for product.

The good news is that customer interest hasn’t waned. People still want to live the boating lifestyle. People still want to drive nice cars. People still want modern appliances. People still want to move into bigger, newer, nicer homes. And renters want to take the step into home ownership.

Businesses with cash, less debt, and an ability to quickly contract their available inventory to the current market demand will be most likely to prosper through this downturn. Even if it means selling products at a loss, liquidating aged inventory will reduce overhead and free up cash that can be used for keeping the lights on. Those who can most aggressively reduce their inventory positions will be the ones to succeed in the long run. Unfortunately, to get there, a lot of painful and expensive decisions will have to be made.

Pop A Wheelie!

A single horse can pull six tons; but two horses working together can pull 36 tons. By working together, two horses are able to produce three-times the results as two horses working individually.

Whether it’s in the world of sports or business, working together as a cohesive team has been proven time and again to yield a result greater than the sum of its individual parts.

A productive team has players that share common goals, a common vision and have some level of interdependence that requires frequent and consistent interaction. Teams evolve through shared attitudes and feelings. Every member of the team has a unique role to play but is ultimately held accountable when it comes to teamwork.

With marketing budgets and teams being slashed at both the builder and dealer level, remaining team members are being asked to take on more and more responsibilities. This dilutes the amount of attention that can be attributed to various priorities and as a result, critical opportunities are being missed.

The good news is that there is hope out there. A 2008 Sterling Commerce study revealed that 81% of “High Value” consumers, those with annual household income exceeding $75,000, went on-line to conduct research before making an in-store purchase. 32% of those customers used a coupon or incentive found on-line to complete the off-line purchase. In addition, the cost of acquiring customers on-line has dramatically reduced in the last year.

Using the Web as your primary marketing, lead generation, and lead conversion tool has never been greater. With leaner and leaner budgets, the Internet has quickly become the most effective and efficient means for growing your business.

With that said however, expecting an entry-level marketing generalist, or even an administrative assistant, to design and execute a comprehensive Web, lead generation, and lead management initiative is overly ambitious. In essence, using the example above, we are asking a single horse to pull 36 tons.

Pro Lead Management was established to help clients exploit the Internet opportunity at a fraction of the cost of hiring full-time personnel. With a low fixed cost and pay for results compensation model, adding proven talent to your team has never been more affordable.

Are you ready to take advantage of the power of teamwork to produce exponential results? Inquire before the end of November and we’ll conduct a FREE e-business analysis and provide you with an outline that includes specific areas for improvement. Call 888.836.8567 or contact us by clicking here for your FREE analysis and consultation.

Stopping the Clock to Save Time

“A man who stops advertising to save money is like a man who stops a clock to save time.”
– Henry Ford

I recently spoke with several builders and dealers who have wholly eliminated their marketing budgets; some even shedding their marketing departments entirely. Whether these cuts were made simply to reduce fixed overhead or essential to ensuring the company’s survival through today’s market downturn, there is no doubt that investing in the right marketing initiatives now will yield dramatic returns. Now is not the time to cut and run on your marketing budget… now is the time to seek out and exploit the new opportunities created by these times.

Customers Are Hunting
When the economy dips and consumers move into a state of fear, product purchases get scrutinized and long-term brand loyalties are challenged. Now is the time for you to be visible, not hiding behind your desk.

Your Competition Is Hiding
When your competitors eliminate their marketing efforts, the landscape is no longer as crowded. This increases the probability of your marketing messages getting noticed. Now is the time to become the most recognized name in your category.

Bargains Abound
As more and more companies pull back on their advertising, marketing outlets feel the pinch and reduce their rates. This puts you in a position of strength to drive a harder bargain and get more for less. Now is the time to get more from your marketing investment.

Becoming Top of Mind
Being out of sight means you’re likely out of mind; and being out of mind today can mean out of business tomorrow. Familiarity breeds preference and preference leads to long term customer loyalty. Now is the time to more efficiently secure top of mind awareness and long term customer loyalty... for less.

These times may be tough but they are also opportunistic. Now is the time to crank up the volume!

We have defined and managed effective strategic marketing initiatives since 1997 realizing exponential growth and even greater returns on investment. Are you ready to take advantage of these opportunistic times? Then call 888.836.8567 or contact us by clicking here for a FREE consultation.