Sales and Sales Management Blog

January 25, 2008

Economic Stimulus? Don’t Bet on It


Democrats, Republicans and President Bush agree on an economic stimulus package that appears to be headed for quick approval.  That in itself is scary enough.  Seems as though when all are in agreement in DC something bad is about to happen.  This time, however, the agreement is on a package of rebates and business tax incentives that will, hopefully, turn the tide and head off what appears to be a coming recession—or worse.

I’m not an economist by any means but it appears that a 150 billion dollar package to head off an expected recession in a 14 trillion dollar economy is much like taking aspirin to head off pneumonia—you’re still really sick, you just don’t feel quite as bad as you would have without the pills.  Already economists are predicting the package will prove to be too little, too late.

For those of us in sales and sales management, the course of action we must take is one of aggressively preparing for a serious economic downturn. 

Many of the sales managers I’ve spoken to over the past couple of days have heaved a sigh of relief—the cavalry is coming to save the day, the economy will continue as is and the fear of tough times ahead are behind us. 

They’ve heard the wrong message.  The message they’ve heard is the one touted by politicians during an election year, not the message of reality.  Reality says the housing market is in a mess.  Credit markets are in dire shape.  Unemployment, while still historically low, is rising with a great many more layoffs likely in the mortgage and real estate, home building and related industries.  The stock market is volatile to the point that no one knows whether today will be dominated by the bulls or the bears—or which will ultimately win the market war—although the trend has been continually down with upward blips along the way. 

To date, we’ve relied on money from Europe, Asia and the Middle East and massive infusions of money by the government to prop up our banks—and they are still hurting.  The largest mortgage company in the country had to be saved from bankruptcy by Bank of America.  Over 200 other national mortgage companies have either closed or closed major parts of their business. 

The job market is flooded with former mortgage and real estate people. 

Will a $300 or even $1,200 dollar rebate encourage people to storm stores in mass?  For many families the rebate equates to only a couple of trips to the food store, a couple of tanks of gas and maybe a family night out at the movies.  Many will take those dollars and try to get their debt a little more in line, paying off some credit card debt, not making new purchases.  Others, fearful of what might be coming will simply stick the money in savings instead of spending it.

Certainly, we all hope the economy can absorb the tremendous hits it is taking. 

Hopefully, the President and Congress are right and the stimulus package does what it is intended to do. 

Yet, betting that we avoid a recession is irresponsible.  Taking action now to prepare for a much more difficult selling environment is the only responsible course of action salespeople and companies can take.  Investing the time and money to prepare yourself or your sales team by getting the necessary training on how to use more sophisticated marketing methods only makes sense. 

Consumers, both individuals and businesses, are increasingly becoming resistant to the traditional marketing methods of cold calling, direct mail, and advertising.  They no longer wish to be communicated to through those impersonal, mass marketing techniques. 

Today’s consumer has immediate access to far more information about every subject imaginable than ever before.  They no longer must rely on a salesperson to “sell” them the products and services they want and need.  Rather than being sold, consumers are increasingly doing their own research and making their decisions based on the “objective” and “expert” information they find through articles written by and interviews with “experts.” 

This new consumer must be approached and communicated with in a different manner than previously.  For salespeople to be relevant to this new consumer, they must be perceived as an expert by the prospect.  And prospects assume that true experts aren’t cold calling, flooding their mailbox with direct mail offers, or advertising.  They assume that true experts get their clients in more sophisticated ways, such as through referrals and networking.

As the economy slows and consumers find their dollars getting tighter, this trend towards rejecting traditional marketing approaches will continue to grow, increasing the pressure on salespeople and companies to find new and more effective ways to connect with prospects.

Preparing for a downturn in the economy is the prudent course of action.  Learning and implementing those marketing strategies that consumers respect and respond to is more crucial now than in the past few years when the economy was strong and vibrant. 

What happens if the politicians are right and the economy avoids any negatives?  If you’ve learned better ways to connect with your prospects you will simply make more money.  But if the signs of economic hardship prove to be accurate, those who have prepared and adjusted to the consumer’s new purchasing habits will not only survive an economic downturn, they will thrive as their competitors struggle to survive.

Advertisements

2 Comments »

  1. I found your site on google blog search and read a few of your other posts. Keep up the good work. Just added your RSS feed to my feed reader. Look forward to reading more from you.

    – Sue.

    Comment by Sue Massey — January 25, 2008 @ 9:40 am | Reply

  2. […] Here’s another interesting post I read today by Sales and Sales Management Blog […]

    Pingback by Stock Market » Economic Stimulus? Don’t Bet on It — January 25, 2008 @ 9:53 am | Reply


RSS feed for comments on this post. TrackBack URI

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Create a free website or blog at WordPress.com.

%d bloggers like this: