Depending on which news service or economist you listen to, the recession is officially over. That means that business is now going forward, albeit slowly and certainly not painlessly.
In examining the effects of the worst economic times since the Great Depression, I have noticed a definitive pattern change in buyer behavior. The fact that fewer people are buying and purchasing less when they do buy doesn’t come as any shock, but the shift in the motivating factors for buying is significant.
There have always been three motivating factors for buying: greed, logic and fear. Sadly logic is the weakest, and one only needs to examine the commercials of the recent election to understand that fear is the most powerful of the three.
Greed was the driving force for the last two decades until the financial crisis turned everything upside down. People had plenty of resources and felt secure that business would be stable or growing so they focused on buying what they wanted with little concern. Today, the concerns are big, so very little is bought from greed.
Fear is now the driving force causing what could be referred to as “the new austerity.” Consumers and businesses alike have built-in fear about parting with their money. They have three fears that will keep them from spending today.
Fear of waste In this economy, every dollar counts, and guilt sets in when we buy something that doesn’t work or collects dust on the shelf from lack of use.
Fear of extravagance Excess is no longer the fad for most people and few want to be seen as ostentatious when so many are hurting. Companies have greatly reduced the way they spend on visible items, such as parties and travel, so as not to upset their shareholders. Some are promoting their frugality as a way of showing that their margins are slim enough to justify their pricing.
Fear of poverty Hoarding resources is the order of the day since we still operate in an uncertain economy. No one wants to deplete the bank account when another downturn may be right around the corner. Buyers are keeping their balances as flush as possible to make sure they can weather the unforeseen cash issues that may be ahead.
The challenge for a business today is providing an offering that is more compelling than the established fears. Unless a company appeals to a more powerful fear than waste, extravagance or poverty, a prospect won’t likely part with cash and no sale will occur.
As one who experienced the crisis personally, I subscribe to all of these fears and it’s tough to get me to buy today unless I have a strong need causing me pain. In my recent relocation to Cleveland, I was overwhelmed by such a need. I love to bike but dreaded cycling in the Midwestern cold.
But then I heard of a definite “awesome experience.” The world’s first indoor mountain bike park! I was more than happy to overcome my fears and part with $300 for a season pass.
Years ago, contractor Ray Petro needed a winter home to practice his mountain-biking tricks. He searched Cleveland for warehouse space to rent and was constantly turned down. Finally, he rented 20,000-plus square feet in an old industrial complex. He built ramps and jumps and charged his friends a small fee to help pay the rent. Flash forward years later and now Petro’s MTB occupies more than 125,000 square feet hosting more than 20,000 visitors every year.
Petro’s business has become so successful that the company was bought this year by Trek Bicycle Corp. and is now opening a second park in Milwaukee.
The park is a perfect example of meeting the need of winter bikers as well as an inspired reuse of dying industrial space worthy of consideration in other snow-belt manufacturing towns. There is no shortage of entertainment, whether it’s watching the tricksters from safe viewing areas, listening to head banging rock or trying out the latest Trek demo bikes. Petro has set a high bar for constantly exciting his customers and overcoming the new austerity.
Here are some considerations for you to do the same:
1. What pain do you solve that is more powerful than the new austerity fears?
2. How can you communicate your solution in a compelling manner?
3. What creative niche can you identify and solve within your current capabilities?
4. What creative ways can you benefit your community that makes you money?
5. How can you make your service entertaining beyond resolving the basic need?
Not every company leader can leverage his or her passion like Petro, but using a little creativity will help to appeal to customers at a passionate level and overcome their fears and austere attitudes.
KEVIN DAUM is the principal of TAE International and the best-selling author of the Amazon No. 1 best-sellers “ROAR! Get Heard in the Sales and Marketing Jungle” and “Green$ense For the Home: Rating the Real Payoff on 50 Green Home Projects” both in bookstores now. He is also a speaker and marketing consultant. Reach him at [email protected]. Check out Kevin’s Quest for the Jewish Super Bowl Ring at www.AwesomeRoar.com.