You Can Only Coast Downhill

What are you doing to build your business right now?

It’s a question I ask when I am in front of a business owner.

Sadly, many don’t have a plan.

Or some are afraid of what the future might hold and they are behaving very cautiously.

Too cautious I dare to say.

“Oh, we’re going to take a few months off from advertising and see what happens”, is something I hear by many. 

Good luck with that I say.  Sometimes I say it to their face.  Sometimes I say it to myself and write them off.

We are going thru a time of uncertainty that some of you are experiencing for the very first time.  However there is plenty of history in the recent past that points to a positive outcome for those who are willing to step out instead of retreat.

About 14 years ago, in 2008 our economy was seeing economic collapse that created panic and downturns that were just as scary to the casual observer.  For years, lenders were taking us down a path that was going to create a crash, and basically in 2008, it all came crumbling down.  In a nutshell, lenders had been told to make it easier for people to buy a house.  Sub-prime loans were a part of this along with no-doc mortgages.

I saw first hand how the no-doc mortgage loan was abused.  I had a client that was running a mortgage company and we were supposed to meet about 1 o’clock one afternoon in 2008.  I got to his office before he returned from lunch and overheard one of his mortgage guys reviewing an application with a client over the phone.  As their customer told them their monthly income, the mortgage guy said, we’re going to bump that up so we can get you a lower interest rate. 

Afterward, I spoke to the owner of the mortgage company about what I heard and he told me that was common practice now since they didn’t need to provide any documentation to back up the figures they were putting on the loan applications.  Also they could get people into bigger, more expensive homes this way and the mortgage lender would make more money without risk because they were just a broker and these questionable loans were sold off and he had no liability as the mortgage broker.

I decided not to renew his advertising contract when it expired a few weeks later because I had a gut feeling that this was not right and I didn’t want my radio listeners to be taken advantage off by this company that was putting people’s finances in jeopardy in this manner.

When things took a crash in 2009, this guy’s mortgage company went out of business. That was a good thing.

There were other companies that went under back then but it wasn’t because they were crooked.  Many of them did what I see going on right now and they decided to be conservative and act like a scared turtle and hide in their shell, waiting for things to get better.

They decided to coast for awhile.

Problem is, you can only coast downhill.

Sure if you have enough momentum you will continue to be fine for a bit.

But if you stop inviting people to do business with you, eventually they will stop doing business with you.

And that’s all that advertising really is… a paid invitation from you and your company to potential customers to consider you when they are going to buy.

Some of your best customers will eventually decrease their spending or stop.  It may have nothing to do with you, just circumstances in their life.  For this reason alone, the average business will need to replace 20% of last years customers with brand new customers just to stay even.

That 20% number fluctuates greatly depending on the type of business you are in.

We have roofers advertising on my radio station that offer lifetime warranties.  That means they will never be able to sell that customer another roof until the customer moves to a new house.  Roofers like that have to replace nearly 100% of their customers every year!

Besides the business owners that say they are going to coast for awhile, there are others that are in the start-up or growth phase of their business plan and those are going to advertise.  They are going to earn the trust of your potential customers now and once a consumer buys from someone else, they are out of the market to buy from you.

I actually don’t mind the fact that some businesses are going to coast for now because it makes room for those that want to grow and those are the ones me and my team enjoy working with.

I’ll boil it down to this:

If you want to grow, contact me.

If you are considering coasting, contact me and we’ll continue this discussion.

If you have already made up your mind to pull back and coast, thank you for making it easier for your competition that I’ll be working with to take your place.