Wednesday, March 18, 2009

A Changing Economy

“Insanity is doing the same thing repeatedly and expecting a
different outcome” – Albert Einstein

In 1982 the unemployment rate was over 10%. Residential mortgages were loaded at 15-20% interest. Auto loans were – 14.8% – and – almost 30% of the automobiles and appliances sold in the United States were produced in Japan or Korea.

The media said it was the worst economy since the Great Depression. Home improvers claimed customers “were reluctant to buy until the economy changed.”

Companies who survived (and many thrived) effectuated change and stimulated prospects with themes such as “don’t move – improve” – or – “You auto buy now” (auto industry). Home improvers created outbound tele-marketing centers. They retrained their salespeople with more effective sales methods to convince home owners to buy now.

Check the record – replacement window sales soared. Double and triple pane units sold at a premium. It was the halcyon days of vinyl siding. Sunrooms had their biggest period of growth. Kitchen cabinet refacing became the option for kitchen remodeling.

Companies cut back on media advertising and yellow pages. In exchange, direct and marriage mail created abundant leads. Sears increased their SFI representation and fostered the (then) largest SFI program ($250 million annual sales) via a company called AMRE. Call centers properly developed without offensive call techniques became the low-cost lead form.

The critics and the nay-sayers lampooned the efforts of the more aggressive sales organization.Tele-marketing became the basis of joke and ridicule – so, what happened?

By grit and sustained effort, many companies sold more, found new ways to get low-cost leads, hired salespeople who did not come from the industry and trained them to be world-beaters.

It’s your choice. If the economy won’t change, it’s time for you to change. In the last month, Home Depot’s sales remained flat versus last year. Lowe’s had increases of about 1%. If this is sad news in the world of retailing, there’s a message. Consumers will spend less and maybe – just maybe – are reserving their spendable dollars for their most important investment – their home. Change ---- if it is to do, it’s up to you.

Dave Yoho

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