"Not everybody is perfect, and I don't think we should be looking for perfect people."
Simon Cowell
Simon Cowell is a celebrity from the American Idol show, and he is famous for saying the
truth even if it’s not very kind or flattering. Wizard of Ads Partners are the same way when
people ask what will work in advertising and what won’t - what is a good business strategy,
and what is not. Sometimes, just like on American Idol, business owners don’t want to hear the truth.
The Frugal Folks
What kind of businesses are surviving and thriving in the current economy and why?
Used Cars and Auto Repair – People are keeping their cars longer and taking care of them; and doing
regular maintenance.
We bought a Nissan Altima 6 years ago. We paid $3600 cash for it. We had a few minor repairs and maintenance on it; but very little besides regular maintenance. We just recently bought another Nissan Altima (because that’s what my wife wanted.) It was 7 years newer and we paid $7000 for it. ($5500 cash plus $1500 for our old Nissan.) We drove that little Nissan 140,000 miles in 6 years and still got $1500 trade in for it. By the way it still ran great!
More and more people, in this economy, are seeing the value in paying cash for a good used car and not having payments. Had we bought a new car, and made the average Americans’ monthly payments of $350 a month for 6 years, that would have totaled over $25,000 and then the car be worth a couple thousand bucks today.
Instead we bought a used car, paid cash, and put $150 aside each month for paying cash on another car, and then we paid $200 a month extra on our house. We paid that in principal over and above our regular house payment. Thus we saved well over $10,000 in interest money on our house.
OK - so call us weird. But a millions of Americans are thinking this way, in this economy. If you own a
business you need to be looking for ways to accommodate these kinds of frugal folks. There are more and more people
who are thinking like this.
Consignment Stores - My wife and her friend Karen recently planned a day of “shopping.” I
didn’t know where they were going and when they got back I was surprised that they had gone “consignment
store shopping.” She bought very nice, name brand clothes, at ridiculously low prices. She said, “Look at
all these clothes! They retailed for over $500. Guess how much I spent.”
I said, “I don’t have a clue.”
She said, “$75.00
I said, “You are kidding. Wow. My wife the bargain hunter!”
I was kidding her and told her some day she would come home with an escalator. (Because it’s marked down - ha! ha!) The thing is, she knows, that I know, that she knows that she could go spend a few hundred dollars on new clothes and I would be OK with that. Like many other families in this economy, they are being more frugal with spending, and making wiser choices with their money. As a result, many business are trying, unsuccessfully, to lure shoppers to continue with spending habits of 2-3 years ago and many of the frugal folks in America are just not going to do it!
Escape Business-Any type of business that offers people a bit of an escape from the reality of this economy will prosper now. With the stock market that lost a lot of money, people losing jobs, stimulus this, stimulus that, possibility of higher taxes to pay for the Obama Health Care Plan, the Auto Dealers Bail out plans, and the Insurance Company bailout outs, the common folks out in the work-a-day world want some escape.
The Movies. Theatres. Plays. The Grand Ole Opry. Golf. Massage Therapists. Spas. Going out to eat. Going camping. Some are staying home and having a “staycation” instead of a vacation. Businesses that want to prosper must accommodate this growing number of folks.
I own a business that is a tourist attraction as well as a local place to go for a night of escape. We offer music , comedy and fun in a family atmosphere and our business is up 25%-30% over last year. Go figure. Remember in the days that Bill Clinton first ran for President? His advisors came up with a plan that every time they were asked a question about an issues other that the economy; they’d say, “It’s the economy stupid.”
Well, “It’s the economy stupid.” Not that YOU are stupid but that we business owners must be about thinking in new and different ways than we thought before to deal with this new trend of frugal folks. Business owners, United States wide, must develop more creative ideas to deal with people like me that have the money to buy a new car, but choose to buy a used one. We gotta figure ways to attract customers like my wife; she has the money to go to Target or Dillards and buy all new clothes but she chooses to go “consignment store shopping.”
To survive in this economy, you must learn to deal with the frugal folks, they are not going away.
Perhaps now would be a good time to have a complimentary meeting with a Wizard of Ads Partner. Links to their websites and blogs are listed down the right side of The Wizard Times. Hundreds of their articles with free insightful advice can been seen at www.americansmallbusiness.com 2009 would be a great year to attend a class at the Wizard Academy 21st Century Business School in Austin Texas. What is the Wizard Academy?
See you next week.
Clay Campbell
Wizard of Ads
PS. Need help to attract more customers and grow your business?
