When the floodgates open

Here’s an interesting fact about the global economic meltdown of 2020:

In the USA, the personal savings rate, which measures the percentage of savings people have against disposable income, doubled.

Put simply, people saved a lot more money than they normally do. That is not supposed to happen in a recession.

They saved because in many cases (although obviously not all) peoples’ income either stayed the same or dropped slightly, while their living costs plummeted. They didn’t have to pay to travel to work. They didn’t have to pay to go to restaurants, pubs and bars, or go on vacation. In many cases, the shops where we would normally spend our cash were closed for months on end.

So, we find ourselves in the very unusual situation of emerging from a serious global economic downturn, with large numbers of people and businesses having large amounts of disposable cash to spend. In addition, we now have the impact of the vaccine on customer behaviour.

The media is very bad at looking ahead at good news. While the TV news is obsessed with the daily dramas of vaccine delays, virus variants etc, they are mostly ignoring the big picture about the months ahead.

The big picture is that from a national perspective, barring an unpredicted disaster, the pandemic crisis is a few weeks from being over. By ‘national perspective’ I mean the interests of each country as a whole. The lockdowns have not been put in place primarily to keep you healthy. If they had, our governments wouldn’t have spent weeks saying it was ok to hang out at Christmas, despite the fact that it would, and did kill thousands. The lockdowns are in place to stop our hospitals being overwhelmed. Simple as that.

Once everyone over 70 is vaccinated, that problem is basically solved. End of national crisis. End of lockdowns. It’s over.

(Obviously that does not mean the personal health threat to you and those you care about is over and please bear that in mind as you see things opening up. Be smart.)

So, this is likely to end fast and as it does, the spending floodgates will open. The pent-up cash that’s had nowhere to go will have everywhere to go. Layered onto that, your customers’ psychology will change. They will feel liberated. They will be ready to spend. If you sell to businesses, a similar psychological optimism will be in place.

The question is, will you be there, front of your customers’ minds, when the floodgates open?

There’s a theory around money and wealth that all you need to do to get rich is ‘get in front of the money’. It’s an oversimplification but it’s also profoundly accurate. Many people make their business lives far too difficult by doing everything except just getting in front of the money.

So, here are some ways for you to make sure you’re in front of the cash when the floodgates open:

1.
Customer contact
If for any reason you’ve not implemented the regular customer contact that has to be at the heart of all good Marketing, now is definitely the time. That means 2–3 emails per week, ideally regular direct mail and calls with customers where appropriate.
2.
An irresistible offer that doesn’t involve reducing prices
If you can offer something compelling to your customers when they’re back in spending mode, you’ll increase your sales. But try to avoid price reductions. It shouldn’t be necessary in the climate ahead. There are smart ways of making a great offer to your customers that offer ‘savings’ but actually get them to spend more, such as the ‘3 for 2’ offer. Buy 2 of what we sell, get a third free. This enables you to have a compelling offer without reducing your core prices.
3.
Celebrate and get personal
Don’t ignore the conversation in your customers’ heads. They’re only thinking about one thing and they’ve only been thinking about one thing and its consequences for the last year.
There are a couple of ways to do this. The first is to celebrate any good news, you can tie that in with the offer above. Offers are even better when you give a good reason for them. So, yours could be ‘To celebrate the end of Lockdown’ or ‘To Celebrate XX Million Vaccines.’
The second is to get personal in your communication with your customers. I did it briefly above by touching on some of my opinions about the situation. I did it a year ago before the lockdown even started when I talked about persuading my mum to stay in, 2 weeks before the politicians suddenly decided it was a good idea. You will have your own personal stories and experiences. I urge you to consider sharing these with your customers, it will elevate your relationship with them to a totally new level.
4.
Get on the phone
As part of the above, how about actually TALKING to your customers? How many of the people who you give money to have called you over the last year, just to see how you’re doing? My number is zero. Just imagine how you could set yourself apart from the rest by just taking some time to connect with your customers.
5.
Increase your prices
Now. Before the spending starts again. The customer with the cash to spend will be far less price resistant than normal.
6.
Plan for in-person get-togethers with your customers
Along with the pent-up demand to spend money, there’s obviously an even bigger pent-up demand to hang out with other human beings and socialise. Don’t underestimate your customers’ desire to do this and how much you could benefit from making it happen.
That could be face to face meetings to catch up with them and review their needs, perhaps in a nice spacious environment. How about afternoon tea at a classy hotel? And don’t buy into this nonsense of ‘the new normal’ that your competitors are hopefully buying into. The fact that your customers have been willing to do sales calls on Zoom is a good thing. The idea that you want that to replace personal contact with them forever is business insanity.
Also, corporate hospitality is widely used by big companies but widely underused by smaller businesses. It’s very effective and extremely cost effective. Start thinking about (safe) options for the months ahead. Maybe a box at the races?
Just make sure you test them at the door!