Ignore the Economy
Yesterday, a friend called. He is president of a vibrant, growing company that sells a very high-end, luxury-priced product. He wanted to brainstorm about his upcoming sales meeting, and how he can motivate his sales team.
He told me that he was planning to open the meeting by talking about the economy, focusing on the looming debt crisis and waning consumer confidence.
“Why?” I asked.
“I want my sales team to be prepared for a tough situation.”
I asked him how 2012 turned out for his company. “Great,” he said, “We had a fabulous year.”
I replied, “Great news. Interestingly, all of my consulting clients performed better in 2012 than they did in 2011, and I know many people whose businesses are booming. I’m not claiming this is a trend across the entire market, but what I do know is that there are many people who are feeling good about their personal economic situations. I suggest you tell your sales people to build on their success by ignoring the macro and focusing on the micro.”
Macro vs. Micro
Macroeconomics is the study of overall trends in the economy. Macroeconomists talk about currency rates, overall unemployment rates, GDP growth rates, etc.
Microeconomics is the study of how individual people and companies make economic decisions for themselves.
My suggestion to my friend’s sales team is good advice for most of us: Don’t let the macroeconomic issues become an excuse for you. Sure, they matter. But for most of us, the microeconomic decisions our customers make have a much bigger impact on our businesses than the overall economy does.
Think of my friend’s business. Unemployment is high, which is a human tragedy for millions of people. Social security is underfunded, which will present many problems in the future. But, right now, thousands of people, who are getting good paychecks and bonuses, are buying his product. His sales people will succeed in 2013 not by studying the macro-economy, but by focusing on getting individual customers to make individual microeconomic decisions that favor his company.
So, how do I focus on the micro?
Your business generates its results one customer at a time.
- Understand the brand stories that will motivate your important customers.
- Create customer experiences that communicate those brand stories.
- Concentrate on relationship-building encounters, as opposed to relationship-eroding transactions, when you interact with your customers.
- Ensure that everyone in your company understands the importance of “focusing on the micro,” and recognizes the personal role they have in doing this.
But what if the economy gets worse?
Yes, the macro-economy could get worse, and if it does, it will hurt all of our businesses. But the key to success if that happens will continue to be encouraging individual customers to make individual decisions in your favor. You can’t change the macro-economy, but you can influence your customers’ microeconomic decisions.
AdAge.com just ran a story titled, “Marketers, Retailers to Feel Sting of Consumer Paycheck Pinch,” which, despite its title, described many businesses that are poised to succeed as paychecks shrink with the end of the “payroll tax holiday.” One fact from the article that caught my eye: 62% of consumers who buy Nike Air Jordans earn below the median income. Nike knows that even people with limited funds make microeconomic purchase decisions. In their case, they have successfully persuaded people to allocate scarce resources to their high-priced, premium product.
Focusing on the micro is the best protection you have if the economy slides.
Reasons vs. Excuses
Over the years, I’ve had to sell and market around many forces out of my control. From selling travel during the United Airlines strike of 1985 to marketing vacations to Mexico in 2012, and all of the crazy times in between, I’ve had plenty of opportunities for marketing excuses.
It occurred to me early in my career that reasons don’t have to be excuses. Forces out of your control can be reasons that your business is under pressure, but what really counts– always– is persuading customers to make microeconomic decisions that favor you. The reasons may help you determine how to react, but it is important not to let them become excuses.
Ignore the economy