Recession creates new job markets

Image source: www.biojobblog.com

No matter how strange it may sound, but this recession is giving birth to new markets and new jobs, which would have never come into being before.

Take Japan as an example. This country is known for greatly dedicated employees, who do overtime chronically, which is taken for granted by them and their employers. But the recession causing shutdowns and hour cuts has given Japanese workers more time off. The government also strongly recommends that companies insist that employees take their full-time vacations. As mentioned by the travel website Expedia, almost every Japanese takes only half of their two-week vacations allotted by the law. Now that they will be made to take their full two weeks, that may boost spending on vacations, which will create over 1 million jobs in the country.

In France, for instance, recession has caused a lot of upheaval with unionized workers. This country known for its regular strikes organized by unions all over the place. With recession at the doorstep, international companies attempt to close up factories and reduce working hours. So, as a reply to it, French workers take their bosses hostage. Usually, that means that top managers are isolated in their offices for a number of days without being able to go home. The army of local consultants saw an opportunity in this conflict. Now the most popular consulting service consists of offering expert advice of how to avoid boss-napping. The consulting includes courses of how to initiate a slowdown of production and how to avoid physical interference.

These are just two examples. I guess there will be more…

Buyers’ attention is costlier than gold

Source: dericbownds.net

Anyone of us has been or is a buyer and a seller at the same time. Even if you are not part of a private business, you are still a buyer and seller. We buy food, clothes, cars, travel, homes and sell homes, cars, unnecessary things. Being a buyer and a seller makes us involved in this interactive process, whose first utmost step is to grasp somebody’s attention (if selling) or be attracted by a product or service (if buying). It is all about attention.

For sellers it is important to find ways to get through various shields to get to the potential buyers’ eye, mind and, finally, heart. Not that easy in the present-day ocean of terrorizingly omnipresent messages sent through all possibly imaginable media channels. Going a couple of decades back, this task would have been easier as businesses were practicing the push method of getting the message across to the customer’s eye or ear. Now the times have drastically changed: buyers are immune up to 99% of all messages sent to them. They have adopted the pull strategy in opposition to the push one. Now it’s them who sieve through the information flows.

Companies and not only need to reitinerate their communication strategies through a set of steps, which are really down-to-earth and do not require much investment.

Know your buyer

There is no wonder that even now there are plenty of companies who simply squander their marketing budgets out in vain hope of getting to customers through wrong channels or, which is worse, getting to an inexistent audience. Why, for instance, deliver millions of printed catalogues to every single household in the city if it gives an increase of 1% in sales? See what Yves Rocher (they are in cosmetics) does: sales assistants always ask if buyers want to sign up for promotions and newsletters. By collecting this information they will not send coupons and promo information to Dick, Tom and Harry. They’d rather direct it to ladies who shop with them frequently: my wife, for example

Deliver quality

Quality of the offer product should not be doubtful and should be in line with the promises. Back to Yves Rocher (I will refer to them at least once more here): the quality of their cosmetics is higher than medium, but not outstanding. But their key advantage is that their product is of the same good quality every time you buy it.

Offer consistency

The message delivered to potential buyers need to be consistent. If the information comes from different channels the customer needs to be able to recognize it. The wording of the ads and promos as well as design and styling differing from each other every week may create confusion with customers. To me if it’s red today, it should be red tomorrow to think its features has not changed.

Be regular

Regularity is also an important point to consider to attract attention. But the touchy thing here is not to overdo it. I got subscribed to a business magazine last year and got bombarded with renewal notes every second week after the first subscription month. Come on, guys, I have 4 more months to go… Sorry for them I discontinued my subscription, asking myself why they sent me 6 reminders (0.50 cent postage every time) for the subscription of 25 dollars year – 12% of the total cost of the subscription?

Be accurate

Accurate data collection is not to be disregarded. Data processing people are not too much motivated by the monotonous job they are doing. As a result, errors come in place. Getting back to the magazine subscription topic, my friend refused a subscription after waiting for 3 months for the first magazine to come. After calling them 3 times and asking to correct the address (change the unit number) his patience was lost as well as the subscription for the publishing house, which had to send him the refund check.

Customize

I hate receiving generic message starting with Dear Sir/Madame (you cannot determine whether I am a Sir or a Madame – a bad beginning!). But I pleasantly read messages addressed to me by, at least, my first name.

By the way, the already-mentioned Yves Rocher, uses these ways of attracting potential buyers’ attention quite well. My wife buys way too often from them

How did we get there?

All that glitters is not gold. Proverb

The new 2009 is already here, but the mood is somewhat gloomy. Instead of asking family and friends where they are heading this summer for vacations, the question goes “How did/does the crisis affect you?” or “Are you ok?” sounding “did you have time to stash some money away?” or “is your 401 sound enough?” or even more bitterly “yep, I know your pension flew away as mine did so”.

Once this year set in, I keep asking myself how on earth we got in this terrible state.

There are plenty of details making up a fully-fledged answer explaining the situation. To me, growth would be the dominant factor here.

Growth in its perverse interpretation.

A couple of years ago while organizing a marketing event, which turned out to be smaller by size than the one previously organized, I was told by a company rep, there should be a positive dynamics – every new year should show better results, which would be more visitors and participants. My reply was: it’s true, but if we keep on growing every year there would be no room for growth in 5 years. To console him, I explained how we were planning to diversify and change the format.

But this idea of constantly growing is stuck in so many minds. Business needs to grow to show better results for stock holders, investors, etc. etc. customers come last in this list Growth must be in place no matter if it is controlled or not. Portfolio of customers, turnover, balance sheet need to be reflecting “how well the business does”,

Stop…Here comes the problem. One cannot grow forever – there will be a critical moment when the growth is stopped just because the pick was reached. The key word here is “stop” or “when to stop”.

The financial crisis comes from the assumption that growth/positive dynamics can last forever. Or the self-lying thought “we will know when to stop”.

Crave and hunger for better results/more earnings/positive dynamics triggered uncontrolled growth in volume in any sphere: oil, computers, etc. Banking and finance people do or, better to say, did need growth, too. So, they gave money all around without thorough analysis of how the money will come back…

The bubble was blown up actively with huge pumps until 2007, then it burst…

Welcome now to new economic conditions, when people save and do not squander, when unreal-planned demand vanishes and companies disappear, when having a job is a privilege.

Guerrilla Marketing Vide0

A nice video with guerrilla marketing and advertising + nice music = a good viral video.

The case of the missing clicks (from The Economist)

Apr 3rd 2008 | From The Economist print edition

What does it mean when people click on Google’s ads less often?

DID Google, the world’s largest web-search engine, peak last November 6th, when its share price hit an all time high of $742? Some people on Wall Street seem to think so. They now value the firm at around 40% less. Part of the blame belongs to the general turmoil in the stockmarket. But the bigger part, investors fear, is that Google, at the ripe old age of nine, might already be over the hill.

The scare started when comScore, a research firm, reported in late February that Google’s “paid clicks” had decreased by 7% during January, and were flat compared with the same month a year earlier. In other words, surfers who searched the web via Google itself, or who visited websites that belong to Google’s advertising network, clicked slightly less frequently on the little text advertisements that Google often places on these pages. The idea that this disappointment was some sort of seasonal blip faded on March 26th when comScore reported that the numbers for February were no better.

Direct Sales Techniques

Having had some experience in direct sales and having observed a number of people showing up at my door to sell a product, here are some techniques used to promoted the product and make the prospect want to buy the product:

SMILE:
Smile is the door-opener and ice-breaker. An honest smile is what make people continue speaking with the sales rep.

PASSION:
Passion about the product, that’s what a rep is to show. Being passionate about the job makes us believe the salesman is good. We, as buyers, do not focus on a pimple on the rep’s face or on any other part of the person, which sticks out (I usually do when I see no passion in the salesman’s eyes).

EYE-CONTACT:
Eye contact is very important as it shows confidence and allows to observe the prospect’s behaviour.

Good salesmen master these techniques to perfection. Prospective buyers (the majority of us) should be also aware of these as it’s them who pay for falling for it.

Lying is Not a Good Sales Technique

Yesterday I went to a local ML store to buy a washer. The idea was not to buy but to compare prices and see how it works with washers here. At the same time I wanted to have a look at how they sell and what techniques are used to make the customer want to buy an expensive product (a set of a washer and a drier is over $1000, which is still expensive for me ).

So I got to the store and started looking for my dream washer. From the very beginning I was outraged of too much attention to me from the salesmen. At the very entry one came up to me and said: Hey, I am X, call me when you want to buy something here.

Spoiled Customer or How Discounts Change the Market

Going to WalMart I am eagerly looking for red labels with discounts and comparing the discounted price with the regular one. Once the price seems low enough I decide to buy the product. When I come home I understand I do not need the product and I go back to WalMart and return it. I got my money back. I go back home… I am a really spoiled customer like many of us.

Today’s retailers are involved in such ferocious competition that they agree to go lower the bottom line in profit and be in loss just to keep the customer coming and buying. Once the customer is accustomed to regular discounts and returns plus refunds, it’s extremely difficult to do otherwise. If a retailer stops its return program, customers will be outraged and they may simply turn their heads away and switch to competition. So, retailers are facing a spoiled customer willing to have lower prices, to use the product up to 30 days (in Canada) and return it back with the pretext s/he does not like it. Not quite easy to make profit in such a situation…

Still, retailers manage to survive and have good profit. How come? The answer is more than simple: everything is due to the volume of sales and flexible pricing.

First, around 0,02% or less of all buys made at WalMart are returned. This figure is so insignificant and it does not reflect on the benefit at all. Second, the volume is the word: the more you sell with a very small margin on each product, the more you get in profit. That’s why big retailers afford having return-and-refund services and regular discounts…The discounted product sells fast, thus freeing valuable place and storage for other product to come and generate more volume in sales.

Unfortunately, what is good for big retailers is death for small shops, which have to go into niches to be able to survive. Competition with retailers in doomed to loss.

Principles of the New Marketing Era

Here are some Sergio Zyman’s principles for the new marketing coming in place these years:

The only goal of marketing is to sell more to more people at a higher cost. There is no other reason to practice marketing.

Marketing is a serious business and, what is much oftener, a serious business is marketing.

Marketing is no magic. There is no mystery in it.

Marketing is done by professionals. It cannot be done by Uncle Willy or anyone else from his club.

Plan your goal. Determine what you want to achieve and where you want to reach.

Once the goal is set, make up a strategy to get it.

European Trademarks: A Money Mountain /from The Economist/

Mar 6th 2008
From The Economist print edition

THE European Union has known its share of surpluses: wine lakes, butter mountains and so on. But an unwanted pile of money is a first. The total stands at around €300m ($460m) and is going up by over €1m a week. The pile is accumulating in Alicante, at the European trademark agency, OHIM, and its existence is revealed in the agency’s latest annual report, published on March 6th.

A non-profit body, OHIM has the monopoly to grant trademarks that offer intellectual-property protection across the EU. These have been granted to hundreds of thousands of firms around the world, despite costing more and taking longer to obtain than local trademarks. This success has generated more in fees than the agency needs to cover its costs. (OHIM offers a streamlined, paperless operation and does much of its business online, keeping costs down and speeding up the processing of applications.) Today a European trademark costs €1,600, but Wubbo de Boer, head of OHIM, thinks that should be cut to €1,000. Fees fell by 25% in 2005 and last year, after much angry debate among ministers from member states who sit on its governing body, another cut was agreed on in principle. But the European Commission seems to be blocking it.

The trouble is that OHIM is ruffling the feathers of some national trademark offices, with which it competes. National governments use trademarks as a form of tax, and lower rates for the European version would undercut them. Until recently there was a sleepy coexistence between the OHIM and its national counterparts. But now that more and more companies are opting for European trademarks rather than national ones, a number of national governments, mainly in new EU member states, have been lobbying for OHIM’s fees to stay the same and for its surplus to be shared out among them.

Mr de Boer simply wants to cut prices, so that firms do not have to pay any more than necessary for intellectual-property protection. “I don’t want to be a tax collector,” he says—unlike the national offices. He thinks some of the surplus could be held as a reserve, and some could be used to fund joint technology projects with national bodies; but most should be handed over to Brussels, while charges are reduced to stop a surplus from ever building up again.