Spinning This Economy

I have to admit that I have an addiction to reading online news stories. Every night, I come home from work and surf between MSNBC.com, CNN.com & FoxNews.com to read the same stories and the different spins from each news organization. At first, I thought this was a relatively safe habit, not nearly as dangerous as being hooked on drugs, alcohol or some other vice. Yet I am starting to worry that my mental health is at risk and before long I will actually start believing the negative blather populated in those headlines rather than taking the time to understand the true story of what is happening in our economy.

Here is a perfect example of what I am blogging about. The below link is to a story on CNN.com with the title, For Stores, a Very Unmerry Holiday.

http://money.cnn.com/2008/12/26/news/economy/holidaysales_finalnumbers/index.htm?postversion=2008122611

I will let my readers peruse this link on their own time and make their own judgment whether these sales figures really represent a reason to be unhappy, or worse yet, whether this is a sign of Economic Armageddon. I'm sorry, I take that back. I can't let this one slide by without some commentary.

$470 Billion in projected sales for a holiday season and we are upset? In a nation of about 305 million people, that equates to about $1,540 per person. That's not yearly, that is just for the holidays. Hey Mom and Dad, I know I am over 18, but you gave me less than average gifts this year. Luckily, my children don't pay attention to my blog, because I am also below average in gift giving. Thanks CNN for highlighting another one of my inadequacies!

It really is all about spin. But when it comes down to it, there is no denying the statistics show that reality is not nearly as dire as what the headlines implicate. People are still earning money and people are still spending money. Our economy is a fast moving animal and trying to take a snapshot of where it stands now requires some high speed analysis that will be outdated the moment it makes it to the presses.

Here is a little thought that I would like to throw out there. Every year consumer buying habits will fluctuate. And while the spinmeisters will give global economic theories on what is happening, the basic fact is that they just don't have a clear understanding of the emotions of the American consumer as a whole. Furthermore, what our emotions were yesterday, will change tomorrow. We are all complex individuals with complicated and fickle emotions that influence us to make purchasing decisions.

Don't believe me. Explain to me the past fervor over Atari? Cabbage Patch Dolls? Tickle Me Elmo? Wii? Every year there are hot items that consumers want that defy all logic for the mass demand and often includes pricing that just defies economic theories on demand elasticity. Remember the bidding wars for some of these items? Those events also defy logic, but it happened in the past and some new magic item will warrant this type of spending frenzy in the future.

In the aforementioned CNN article, I found a line that just shows how little the experts understand the psyche of the American public. The reporter refers to a discussion with a consumer strategist with Global Hunter Securities. She notes in her article that Richard Hasting said, “there's no enthusiasm to shop if you really don't need anything.” I dare anyone to take an inventory of all our holiday gifts that we actually needed. Insert your own fruitcake or soap on a rope joke here! With apologies to Mr. Hastings, his comment was probably one line taken out of context from a discussion, but it still shows how the media chooses to spin their understanding of our consumer's psychology.

To all the small business owners who are looking for a ray of hope to weather this economic storm, remember that purchasing is not about needing. It is about wanting! Find out how to deliver at a profit what everyone wants and you can rule the world. Excuse the hyperbole, but obviously, this is impossible. Still, we can aspire to sell at a profit what some of the market wants.

Every year during the holiday season consumers buy things that are not necessary staples of sustenance. This season was no exception. I still encountered throngs of holiday shoppers as I defiantly ignored the gloom and doom prognosis for our economic future and went to the mall to get my daughter the purple, Chuck Connor's Converse sneakers that she absolutely needed. (I was all for spending that money on a practical pair of snow boots, but hey, we really don't need that in the North Country according to the logic of my daughter).

To all the small business owners out there who are reading the news, I encourage you to get past the negative spin and figure out what you can do to be more successful next year. You can spin this economy any way you want, but spin is reactionary. Demand will change all the time and there may be no logical reason. Ultimately, you will only succeed if you think about your existing and potential customers and fulfilling their wants. Be proactive and position your business to meet the fluctuating market demands.

People will always want things. Those wants are based on the emotional state of the consumer. That also changes over time. It is obvious that all the spin in the media is sparking some fears in consumers and this in itself is changing demand. Can you figure out how to fight this?

So the challenge is how can you convince your customers that they still want what you sell? Can you create an emotional message to help maintain the demand for your products or services? Can you sell something else that they want if you your demand falters with existing product or service lines? I'm asking more questions and my answers are sparse. But I am not the one running your business and it is your responsibility to find the path to success.

I do add this bit of advice. People talk about bear and bull markets. Now is not the time to feed the bears! If a product or service line is not producing, consider making a change.

It's obviously easier said than done, but in a competitive marketplace, those who move to meet the demand will ultimately succeed. Just remember that in our marketplace, emotion will always trump logic. Now, more than ever, you have to develop a compelling marketing strategy. I would love to tell you what the marketplace will want in the coming months or years, but I refer you to this Bertrand Russell quote, “The demand for certainty is one which is natural to humans, but is nevertheless an intellectual vice.”