The Obama administration would have us all believe that stimulus is the key. If we spend close to a trillion dollars on government programs, we’ll create jobs and get people to buy stuff. Problem is, so far (at least), this stimulus stuff has been a huge flop. The $350 billion allocated under the TARP (Troubled Asset Relief Program) funds to financial institutions has gone from the Federal Reserve to the banks, who in turn, sent it right back to the Fed for safekeeping. Think of it as those bunch of squirrels storing their nuts for a long winter. The banks don’t want to lend the money (the original idea behind the bailout) because they are putting it away for a rainy day. This, in a nutshell (no pun intended) is why stimulus doesn’t work. It’s no surprise that the stats on personal savings show a dramatic uptick for savings accounts in the last quarter of 2008.

So how do we, as marketers, figure out what’s making people tick in this environment? The programs the Dems are pitching are (no matter what anybody says) socialism. It’s all about the government taking over and running things. Those on the right believe that Capitalism dictates when you free up the money supply, people will start buying things. While I am a capitalist, I can tell you, both sides are wrong. The answer? Objectivism.

Objectivism (a philosophy established by author Ayn Rand) holds that people will act in their own rational self-interest. Unstable economy? People will horde assets. Give them a handout? They’ll hang on to it for dear life. Companies act the same way. It’s human nature, and you can’t win against human nature…it’s like swimming upstream. Hard to do, and not much profit in it.

So what’s the answer? Well, I can tell you that the pork-laden “stimulus” bill before the Senate won’t work. When you see line items like $866,000 for Austin, Texas to build a 36-hole Frisbee golf course and $6 million to build  three aquatic centers (with water slides!) in my home town of Shreveport, Louisiana, you gotta figure this is one big government handout. Will projects like that create jobs? Nope.

What will work (but the government will be loathe to do) is to cut taxes. Permanently, and spend less. Government budgets aren’t really that different than personal budgets…when you’re in a hole, the first thing you should do is to stop digging. We don’t need to spend more – we need to have the government cut all non-essential spending. (The sticking point, of course, is what constitutes “non-essential.”)

Okay, but what does this mean for marketing? I mean, if you can’t buck human nature, and human nature is such that people want to horde their money rather than spend it, how can you market around that?

Simple. You either position your product or service as a necessity, you position it as something that will save people money to afford other essentials, or (if your product is strictly a luxury) you position it as a guilty pleasure, and pitch the idea that, every now and then, you owe it to yourself to splurge – just a little – and this is the guilty pleasure to buy as a diversion.

That’s it. That’s my advice. Oh, sure, there’s more to it than that – you have to flesh out the details. But essentially, you have to adapt if you’re going to survive. Recognize the reality of the New Economy, and go with the flow. And that, campers is how to market objectively. Class dismissed.

So far (cross my fingers) I’ve not seen any cancellations, but today I was told that one of my clients was delaying plans to start a new marketing push, at least until the new year.

That’s not unexpected, but it is a little scary.

So…rather than expound on the economy, and how I believe we’d all be better off to just take our medicines, let the companies fail that are unsound, pick ourselves up, dust ourselves off, and get the economy moving again…I’d rather hear what YOU have to say. If you’d rather not have your remarks exposed on the blog, write me (bkozak@grokmedia.com) and I’ll keep your comments anonymous. I’m particularly interested in personal stories regarding how the economic downturn is affecting your company – and your marketing.

More details soon.

One of my favorite stories involves a blind street vendor of hot dogs. One day, one his customers suggested that if business was good, he should consider expanding. The customer offered to help the blind vendor with introductions to a banker, and so the vendor ended up buying a second cart, and hiring someone to work for him. That worked out so well, that he was able to buy more carts, and hire more people. This gave him enough discretionary income that he was able to send his son to college. The son majored in business administration. When the kid graduated, he returned home to see that his dad had purchased a corner lot and an old diner trailer that he rennovated and opened as a freestanding restaurant. The son was horrified. “Dad…don’t you know the economy is lousy! You shouldn’t be expanding right now…you need to pull in your horns and hunker down for a long recessionary period. This has got “Depression” written all over it! You’d better be careful, or you’ll lose everything!”

The father thought, “Well…my son did go to college, which I’ve never done, and he did major in business, and he did get a degree. Maybe he’s right.” So he sold the restaurant, sold off the other carts, and went back to working a single street corner, selling hot dogs. He thought, “Boy, my son was right. The economy is lousy.”

I don’t mean to belittle the dangers we face from all the greedy mortgage companies, hedge fund operators, and politicians, but I can’t help but think that a lot of our economy is driven not by facts and figures, but by perception and personal experiences. Case in point: gasoline prices.

I have a friend that runs a local restaurant. Nice place. Your average meal is going to set you back around $20, a little more if you go for an adult beverage and a desert. I asked him if business was off. He told me that it had been off when gasoline was closing in on $4/gallon here, but now that it’s below $2/gallon (!), business is back up, and in fact is even better than it had been well before the September Panic.

Think about that. People vote with their wallets. When they don’t have enough money to buy a tank of gas, going out to eat is a luxury they can live without. When gas is cheap, dinner out is okay. Perception becomes Reality.

Now if you’re a layoff victim, I’m sure you see the economy as a disaster. Here in Amarillo (so far, anyway) we’ve been largely immune from the effects of the recession. No idea why – but I’m glad. I’m certainly sympathetic to people who are suddenly without jobs, and I think there’s lots of blame to go around – blame for people like Barney Frank, Chris Dodd and Company, that got us into this mess by trying to game the system for their own benefit. However, I can’t help but think that if you can look at things with a positive attitude, the economy will improve – and improve faster than it would if we all rely on the folks in Washington, no matter WHO is running things.

Can we use what Norman Vincent Peale called “the Power of Positive Thinking” to turn a recession into a great economy? Probably not, but we can use it to keep a recession from turning into a depression, and help us turn things around faster. Of that much…I’m positive.

Time. 

Everybody gets the same 24 hours in a day. No exceptions. Everyone’s time is valuable – at least to them. Some people’s time is, admittedly, more valuable than others. My attorney’s time is worth $5/minute. Mine gets billed out at around $1.67/minute. Your results may vary. The trick is, nobody gets more than 24 hours in a day, no matter how much their time is worth. So let’s follow the logical rabbit trail here. Time is precious. Time is money. To grab someone’s attention, requires that they spend time listening to/looking at/thinking about your message. Therefore, attention is the real coin of the realm. 

To get Bill Gates to pay attention to your message is a lot more difficult than getting some kid who watches TV while surfing the net all day. After all, Gates is a busy guy, and parcels out his time carefully. Attracting a heavy hitter like that to your message can be costly. But then again, the reward may be worth that cost. 

Not that it’s that easy to get Joe Average to pay attention (there’s that phrase again) to your message. You see, with upteen different cable/satellite channels, an infinite possibilities on the web, satradio, terrestrial radio, newspapers, magazines, instant messaging, et cetera – competition is brisk. You have to find a way to get your message heard. Once upon a time, it was enough to throw up a giant billboard. Then TV was the answer. Direct mail, webvertising, Spam – all have had their shot. Some worked. Some didn’t. Most worked at least a little, for a short period of time. Then they wore out their welcome with the public – or more accurately, they weren’t unique enough on their own any longer, to get a sizable audience just by their nature alone. 

What’s the answer? Here’s the secret: There is no answer, if by “answer” you mean a foolproof way to reach potential customers successfully without having to think. On the other hand, if by “answer” you mean “how do I combine all the known marketing techniques, media, and plans to cut through the noise and reach my customers, the answer is…every product/company/project is different. There is no “one-size-fits-all” answer. Period. No shortcuts. No easy cheat-sheets. There’s logic and it’s kissing cousins reason, research and testing, there’s blind luck, and there’s the tempting (but ultimately fatal) combination of voodoo, snowjobs, and B.S. – those are your choices. The smoke and mirrors stuff only looks like it’s working. It never does, at least not for long. The blind luck thing can carry you for a while, but the temptation is to start to believe your own P.R. That will eventually leave you with a failed marketing plan and a “what happened?” look on your face. The only truly successful way to market is through a combination of knowledge, research, testing, instinct, creative talent, and a willingness to try something just past “tried and true,” living in the danger zone of “boldly going where no marketing plan has quite gone before.” 

I’m here to tell you, it can be scarry out there on the ledge, with nothing to comfort you but the courage of your convictions. But it’s the only way to break through the “me-too” marketers and craft a campaign that gets the kind of results that turn prospects into loyal customers.

Now that we have a grip on reality, how’s your marketing looking? If you’re like me, you’re in the process of rethinking everything. I count among my clients a restaurateur. He thinks nothing will change, the old “people gotta eat” theory. That may as well be true, but the truth is, when people don’t have money they do still eat – but they don’t eat out, at least not as much. I have another client, a sporting goods shop. Will a recession threaten his business? You bet, if we’re talking about the price of ammo. I used to shoot 50 rounds a week, minimum, just to keep my skills up. Not now. I’m looking at buying a 22 pistol, just because the ammo is so much cheaper. I’ll bet his charter vacation business, ammo sales, and big-ticket items will be down. 

So what’s a marketeer to do?

Ladies and gentlemen, it’s times like these that separate the truly great marketing minds from the also-rans. Anybody can do at least a passable job of marketing a good product, company, or service in good times. In bad times, you actually have to know what you’re doing. 

So get out your tablets, sharpen your pencils and put on your thinking caps. Warm up your crystal balls, and if you’ve been keeping a notebook with good ideas that were not-ready-for-prime-time (you HAVE been, haven’t you?), now’s the time to get them out. 

From where I sit, the race will be not to the swift, but to the ones able to read the prevailing winds of change, and turn on a dime. Forget about “business as usual.” You need to be out there looking at any change in the market, no matter how small, and try to interpolate what it will mean for you. Read the blogs. Read the papers. Diversify your data sources. Network. Most of all, keep thinking. In this economy, you’re going to need every edge, and every advantage you can find. 

Good marketing, and good luck.