In Murray Rothbard’s book, America’s Great Depression, he says… “Entrepreneurs are largely in the business of forecasting.”
Today’s entrepreneurs are largely being killed by an inability to forecast. Rothbard shows that what caused the last Great Depression” of the 1930′s was the easy credit of the 1920′s. Easy credit and the free flow of freshly printed money backed by nothing causes entrepreneurs to make stupid investment decisions. Malinvestment.
Way back in the 1970′s I owned a shoe repair store in California. I learned that in the 1950′s it took a population of just 2,000 people to support one shoe repair shop. By the 1980′s it took some 20,000 people to support a shoe repair shop. Shoes had become cheap to make and tennis shoes were a throw-away item. Shoe repair was then for expensive shoes owned by penny pinchers.
Years later I bought a rock hound magazine and struggled to increase circulation and thus profits. I finally learned that nothing I could do was going to wildly increase interest in geology and gemstones. I was fighting against the s-curve. I was fighting against the market. Marketers must follow markets. Not lead them.
Forecasting today is becoming very tough. Almost every industry is hampered by excessive regulation… let alone the wrong signals created by loose credit and easy money floating into one industry or another.
In the late 90′s newly printed money flowed into the tech bubble. It popped in 2000. Then newly printed money drove housing prices to the moon. I missed both bubbles. But I didn’t get popped either.
Now, like many entrepreneurs I’m wondering where the next great expansion is. It seems to be in the swelling of government services. This does not bode well for industrial activity. More regulations are coming and will not help.
The marketer must always look over his shoulder to see which helpful regulator will be breathing down his neck, telling him he must hire this kind of person, don’t fire that kind of person, install this kind of toilet, add blue paint to that parking spot, etc.
If one is not going to make billions selling services or hammers to the government, one must find a market that is growing and try to make a few shillings servicing that market. Most businesses are servicing a stagnant market at best.
Even the old standby markets of weight loss, get-rich-quick and sex appeal, are hard pressed to find a true growth angle. (Viagra being one exception.) Double pun intended.
As our Great Depression deepens, more marketers will have to revert to classical direct marketing methods. Direct and targeted sales, long copy ads, a bonus for ordering now, story appeal, easy payment offers, etc.
Gone are the days of easy credit for the rest of us schmucks. Layaways are coming back.
If you want to be a good forecaster, you must, must, must, stop what you’re doing and bone up on Gene Schwartz’s Breakthrough Advertising. Markets are fickled. But you can follow Schwartz’s 5-stages of market awareness and at least stay one-step ahead of your competition. Even if you’re competing against a forthcoming regulation.
We must pace ourselves to plan and act in our marketing and plan and act even in the event of bank holidays, hyper-inflation, wage and price controls, labor strikes, currency exchanges and empty store shelves.
It’s amazing how a government action can have long ranging tidal wave effects… like a one point change in interest rates can swell or shrink the ranks of mortgage brokers and real estate salesmen. Just a few years ago, the home appraisal industry felt pressured to inflate the value of a home. Now they fell pressured to deflate the same home’s appraisal even if there is a clear offer to buy at a higher price.
Government regulation causes a lot of needless “CYA” (cover your ass) busywork.
Forecasting using direct marketing models will be key to future prosperity. Direct marketing says to test small before a big roll out. Dry-testing a product or service before committing to product development is smart marketing.
Splitting your marketing efforts to cover both high end and low end products also seems a smart way to go.
Here are some things that have timeless appeal. Use them in your marketing efforts:
1. Something new.
2. Something curious.
3. Something improved.
4. Something using the word YOU.
5. Something promising more time.
6. And more sex appeal.
7. Something with a guarantee.
8. Something with testimonials.
9. Something with a limited time offer.
10. Something that solves more than one problem.
11. Something that adds value to their lives.
12. Something endorsed by a higher authority.
13. Something that has proof.
14. Something exclusive.
15. Something that’s easy.
Rothbard was right. Entrepreneurs are in the business of forecasting. You must ask… Will my effort pay off and by how much? Will the opportunity costs, exceed my known costs of doing what I’m doing now. Or doing nothing. When entrepreneurs see nothing but mountains of headaches on the road ahead… They tend to take a different road.
Or as David Avrick once said to me, when I discussed with him a certain business opportunity, “Too much risk, too little reward.”
What business are you in?
Use these batch of marketing tools to help you promote your business: