A Better Recession Effort = Better Marketing
by Sid Raisch
Part 5 of a Series with the Theme “A Better _______ = Better Marketing”
[Go to Part 6 "A Better Brand Execution = Better Marketing" - HERE]
Marketing is an important part of the job of everyone in a company. It’s everything a company and everyone in it does within, outside, around, and beyond. In this series of articles, we’ll be discussing how different views of marketing make a huge difference in choosing, taking, and owning our position now and in the future.
YES, there is good and valid CONCERN about the economy and what will happen by Spring. It is apparent that a recession is emerging even if inflation is held at bay. There’s greater concern if we aren’t PREPARED for it by taking the right actions now.
It’s an interesting concept that a recession has anything at all, especially something positive, to do with marketing. It does. In fact, it has everything to do with it. Too often, with good intentions, the wrong action is taken especially with marketing in a desperate attempt to drive traffic and revenue with promotions, lower prices, discounts, gimmicks, and so on. The marketer’s go-to of a stronger offer creates more problems when so many other retailers are doing the same thing to attract the same people. The trouble this bear market time around is that those people are not the same ones or not the same as they were. Before we get into that let’s step back and gain some perspective on the situation we’re about to encounter full-on because it is very likely going to get much rougher in the greater economy before it gets any better. That doesn’t mean it can’t get better in OUR economy right now.
What are Bull and Bear Markets? A bull market or a bear market – there’s money made in both.
Bull and Bear Markets are known in the public company stock market arena where investors are challenged to make money in all markets, but the exact same concept applies to our family-owned businesses. In the public markets, investors find companies that are defying market pressure to move more of their money. This article is going to be an oversimplified perspective. You can get more background and depth on Bull and Bear Markets here: https://www.forbes.com/advisor/investing/bear-market-vs-bull-market/
But Sid, our business is not publicly traded.
Family-owned businesses typically have all or nearly all of our financial assets tied up in our business and therefore have to learn to ride it through cycles of the marketplace (until they decide to diversify some of their equity). Contrary to popular opinion bear markets do not always mean the business will close or that it will suffer. Most family businesses do suffer in downturns, largely because of decisions they make based on this ill-founded opinion. Conversely, a bull market does not equal financial gain to the level anywhere near popular opinion that this would be true.
How is money made in a Bull Market?
Most of us agree, but some need to understand better what “making money” really means. I’m not talking about increasing sales. I’m talking about bottom-line profit and growth in balance sheet equity. Investors look for companies that are growing not only their top-line revenue, but also and more importantly they are building, positioning, and managing with discipline, creating long-term stability needed to grow through the bear market downturns. Distributed profit is expected and not a plus, but as we saw with the 20-year Amazon run, there are exceptions. We should not be the exception because hey, we’re not becoming an Amazon either.
How is money made in a Bear Market?
How is money made through a recession? Companies that do well in bear market downturns are in growth segments (such as technology) that defy the economic condition or produce or sell goods that tend to do better when consumers trade down. Discount stores tend to do better in bear markets, and this is showing as Walmart is gaining revenue and market share away from traditional grocery retailers, and also from department stores.
The question is, which type of retailer are you? The answer to this question is the bedrock of perspective necessary for healthy growth through all market cycles so you never go backward in balance sheet equity. If we have this perspective wrong we’re not going to do it right.
The Answer:
Knowing who we are is the foundation to operating in our lane going the right direction – forward, in all weather. Any business that is confused, or confuses its associates or its customers as to who they are is not one type of business, they are a wandering generality. That’s not all bad, but it is far from all good. An example of a wandering generality of a business was Sears/Kmart. When Kmart bought Sears (and called the entity Sears Holdings) they propped up their balance sheet, but a deep death spiral of both brands accelerated. Both were in trouble already and combining them under one administrative umbrella didn’t help even with cashing in under performing assets to stay afloat. This is primarily because neither Sears nor Kmart really knew who they were anymore. They were both living their legacy of past successes and failed to adapt to decades of changes in their marketplace. (Read more on that HERE).
Many garden centers have been suffering the same issues as Sears Holdings, however, they have lately been propped up by the Covid surge. They’ve been given a reprieve or short-term cure for what ailed them, which is sure to turn into a relapse of the systemic sickness.
Garden Retailers are not a Cost-Plus, Promotional, Competitive Price, Membership, or Antique Store retailer, but many operate as if they’re several if not all of those at once. In my opinion, Garden Retailers should be Value-Added Specialty Retailers primarily. However, too many operate in such a way that their associates and customers can’t tell who they really are because they’re using a mixed bag of tactics of the other formats and are just as confused as Sears/Kmart but just maybe not as far gone – yet, and are vulnerable to the emerging bear market. And hey, if you’ve been a pretty well-defined version of yourself just hold that sigh of relief because it’s going to be a rough road ahead for everyone.
So this perspective is not the whole answer, but the first part of it. Read on.
Beyond Perspective
All of that perspective-building was necessary to figure out what to do in the bear market that is emerging. The answer is to Discipline Up! We need to DECIDE and focus on the one type of retailer we are destined to become. First, though we must clearly identify for our associates, customers, and supplier partners which we are NOT so we aren’t dazed and confused wandering generality any longer – THEN and only then – double-down on becoming the ONE that we have decided to be our very best at. This is the core idea of MASTERING YOUR MARKETING.
Bear markets are typically shorter than bull markets, lasting on average only about 10 months and occurring every 5.4 years. This bear market is long overdue and could be the biggest and longest-lasting one yet. There is a lot of civil unrest, a depleted national treasury with a huge 9-11 bond load to pay off soon, debt bubbles, and a quickly stalling economy.
Mastering marketing means mastering our business model because when we’re confusing everyone it's like driving on black ice on a bridge. The lines on the pavement mean nothing. We’re slipping and sliding around with the other vehicles, and are bound to pile up into an out-of-control bear market tailspin. Get a grip and get it fast. It’s getting crazy around here.
There is hope but it lies within our resources, and we’re going to have to get focused on the right actions and act fast to make sure Spring is all it could have become if we had. More on that in the next and last article in this “A Better _______ = Better Marketing” series.
Yes, it is time we talked. Send a text or call 937-302-0423.
Before procrastination or other busyness steals another year from you Text or Call 937-302-0423 or send an email to [email protected] .
Sid Raisch is an advocate for family business leading growth, change, and results throughout US horticulture. Redefining the business future for consumer horticulture by understanding how the end-to-end supply chain needs to be redirected is a skill Sid has honed into an art. He has understanding and insight through inquisitive observations and extensive experience and has served as a trusted advisor helping transform both national and local businesses into more profitable and sustainable businesses. Developing national and international educational programs that create change in culture, community and company provides Sid venues with a front row seat creating effective and innovative business models.
Sid is a Certified Value Builder System Advisor, and currently serves as Chief Strategist and the Swiss Army Knife of Consultants to The Garden Center Group clients. Contact Sid at [email protected] or call or text 937-302-0423.
REMEMBER: Your interaction (by phone and email) with Group Service Providers such as Sid Raisch, Tim Quebedeaux, Jean Seawright, John Kennedy, and of course Danny Summers are included in your retainer!
