Credit Card Usage is Down; Spending is Different!

We won’t be buying the same way we did before.

As the economy waivers between recovery and recession, people are spending less on their credit cards and using cash and debit cards more. 

The recent recession has changed many consumer’s buying habits.  The last time credit card use increased was August 2008.  The Federal Reserve Board reported earlier this month that credit card borrowing fell at a 6.3-percent annual rate in July.  A survey by Javelin Strategy & Research, published in USA Today, cites economic uncertainty, less available credit, and incentives to use debit over credit. 

This is great for many who ran up debt in past years and fell victim to the recent credit crunch.  Consumer buying habtis have changed.

Forever.

Financial guru Dave Ramsey has advocated the elimination of all credit card spending by consumers.  He has seen an uptick in attendees at his seminars (which will NOT accept credit cards for online payment).  His mantra is: “Act your wage!”

The bottom line is: we won’t be buying the same way we did before.  Dan Celia, host of “Financial Issues” on American Family Radio says, “People realize that this debt will come back to haunt them in times of troubles like we’re going through now.”  Baby boomers are too close to their retirement to go through another dip in their finances.  They won’t do it again.  They are buying only what they need and paying for it with cash or debit cards, where the money exists – not on credit with months and years of payments.

Their habits are influencing their children’s and grand children’s spending habits as well.

Some industries have failed to adjust for the change in spending.  Just as many were beginning to accept credit cards, the bottom fell out.  They were caught unawares for the difference in consumer habits.

This change begs several questions to us today:

• What is your business doing to make it easier for people to pay less through credit and accept good old cash or debit cards? 
• Are you prepared to assist customers who don’t want to make hefty payments on credit card interest?  
• If spending is different, how are you adjusting differently?

One thing is certain: we won’t be spending the same way we have before!

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Losers Are Down; Leaders Are Different!

I have said for a long time that the economy isn’t down; it’s different.   I’ll add a corollary to that statement:

Losers are down; leaders are different!

If you view the economy as down then you view everything as being down.  Your spending is down; your activity is down; your budget is down; your people are down;  your customers are down (or gone); and (of course) your business is down.

On the other hand, if you see the economy as different, then you are doing different things.  Your spending is different; your activity is different; your budgeting process is different; your people are different; your customers are different; and your business is different.

Blockbuster is down; Netflix and Redbox are different.  Palm, Inc. is down.  Is Apple down?  No, they are different.   Corn syrup is down; organic is different.  Borders is down; Amazon is different.

I work with a lot of state, national and international trade associations and I see this truth every day.

How else can you explain how some trade associations in small states are filling conventions and getting top name presenters; while  associations in the same industry in larger states can’t get anyone to commit to showing up?  I see it in their leadership.

How else can you explain middle car companies like Pontiac and Mercury going out of business and Lexus, Lincoln and Buick surviving?  It is in their leadership.

Leaders see things differently and act accordingly.  They not only watch their competition, they get closer to their customers and improve or overhaul their services to meet changing needs.  Leaders inspire their people to serve others in the best way possible.  They get up everyday and make things happen.  They don’t wait for an upturn, a recovery, a bailout/handout…  They seize the moment and grab the business.  Losers flounder, whine, seek pity and crawl into a shell waiting for everything around them to improve before acting.

How are you being different from what you were just two years ago?  How are you being different from everyone else in your association or industry?  How are your customers buying and acting different from what they were when times were better?  The answer is in YOU and your world view.

Experts Say: The Recession Is Over! Is It for You?

According to a panel of leading economic experts, the Great Recession ended in June 2009.  They say that is when the economy of the US had hit bottom and began “recovering.”  Did you miss it?

If you did, don’t worry. Most people missed it. In fact, 14.9 million unemployed Americans missed it with you.

In some ways, the recession has ended.  The market is up and outlooks seem more hopeful than six months ago.

In many ways, it will go on forever.  I have always said that recessions never end.  They change business, our culture and your life forever in some way.  This most recent one has changed global business so much that it will never look the same again.

Seth Godin points out that the industrial age of manufacturing has been changed forever.  No longer do we buy products because they are local.  More and more people are seeking, buying and selling globally.  If you can’t meet that demand, the recession, for you, has never ended (and probably never will).

The question is:   What changed in your region/industry/business/customers in the past two and a half years since all of this began?  Have your customers changed their buying habits?  Has your competition changed its marketing habits?  Are people looking for something different from you and your services?  Have you just sat and waited for things to “get better?”

If you answered yes, your reinvention is just beginning.  It is a new day.  With or without a recovery, business will never be the same again.  So much has changed since decmber 2007 you are left out if you haven’t kept up with actions

It’s not about how you are prepared for the difference, but:  How prepared are you for the differences?

What Business Are You In? Ask Your Loyal Customers.

Customer complaints are your loyal people telling you the business they wish you were in.

Comcast (now Xfinity) Cable has earned the distinction of being one of the worst cable companies when it comes to customer evaluations.  Comcast is known for blaming the customer’s equipment.  I was loyal because I kept calling to get them to fix my problems. As long as I kept talking to them I was their loyal cusotmer.

In February, I quit complaining to Comcast…for the rest of my life.  I was over their voice loop requiring my telephone number and account number – then asking for the same information when a live person answered. I was over the poorly trained representatives arguing with me.  I was over their supervisors ignoring my requests for call-backs.  I was over their lack of service. 

So, after months of calling their so-called customer service to report outages in internet and television services, I switched to Dish Satellite TV and my local telephone provider for internet.

I wish they had provided uninterrupted service.  I wish they took responsibility for their faulty service.  I wish they responded by calling me back when they said they would. I wish I didn’t have to enter useless numbers on the phone to a computer that didn’t record the information.  I wish they were in the “Make Our Customers Happy With Us” business.  But they weren’t.  So I fired them.

If more companies veiwed customer complaints as their loyal people telling them the business they wish they were in, then their mistakes could be excused. But they didn’t so I fired them. 

You choose your customers.  The ones willing to put up with your faulty service like you as long as you make them happy.  As long as you respond to their calls they are loyal to you.  The day you decide it is all about you and not them, they stop being loyal, they stop calling and complaining.   Allow them to tell you the business they wish you were in.  Then do for them. 

Reinvent yourself for the new world of customer service…before you get fired, too.

The Umpire Strikes Back!

As a small business owner I receive a fair amount of telemarketing calls on a daily basis – usually from telemarketers that don’t have a clue.  Being a tele-master at sales, I know a good call from a bad pitch.  I have become a strict umpire at this game.

Confession: I have little or no patience for the bad pitches. 

There is one group who calls weekly –  various credit card processing companies.  They have one of the worst pitches I have ever heard.  They open by asking for me by my formal name – not the name everyone under the sun knows me by.  When identified they want to know if I take Visa or MasterCard.  Saying “yes” opens the door to “free” information and a visit to our “office” (I almost took one up on this last month, since my office address is at a UPS Store). We rent a mailbox to keep personal mail separate from business.

Today, customers want ideas and answers – not a crummy sales pitch.  It isn’t about your product or service – it’s about them.  If you don’t learn what they want, what they need, what their problem is that you can solve, they aren’t interested.  As SPAM increases and more and more desperate companies try failed techniques to make more sales, the irritation level among buyers grows. The batters are waiting for “their” pitch.  Sadly for most, it isn’t coming.

Are you using methods that worked bad or mildly in a good economy in today’s highly competitive market?  Do you think more of that is better? 

It isn’t.

If a batter has a bad swing, practicing that bad swing more only produces a worse swing.  He needs to reinvent his swing and do it differently (and better).  If a pitcher can’t throw accurately, he doesn’t keep the same mechanics.  He changes his pitching.

What are you doing that isn’t working (but you are hoping it will)?  Are you hanging onto a pitch that isn’t crossing the strike zone?  What else has changed in the past two years?  Better learn a new approach before you get tossed out.

Oh, the credit card processing company called back this week (again) and asked if I take Visa or MasterCard.  This time I told them, “Sure!  Do you want the 5 CDs and my book for $100?  I just need your card number, expiration date and the billing zip code…”

The tele-flunkie hung up.

Starbucks Reverses – Gives “Tall” Customers What They Want

If the customer wants something you have, why wouldn’t you give it to them? Starbucks recently announced it was eliminating “Tall” (their small sized drinks) from its drive-thru menu.  The backlash was swift and strong. “We want Tall!” their customers said, through tweets and in person complaints.

You could still order a “tall,” but Starbucks wasn’t going to advertise that fact to drivers.

Huh?  Yeah, treat your customers like mushrooms – keep them in the dark on your product line and feed them manure.

Today, the company said, “It never left, but based on feedback, we’re updating our new drive-thru menus to remind you that the Tall size is always available.”

I say, if the customer demands something that you can give them, will make them happy and will profit you, why wouldn’t you want them to have it?

If not, your customers are over you.

We Won’t be Buying a Car the Same Way

Recently, we bought a car for our son. We looked on the internet, visited private car lots and one dealership. He found a suitable vehicle after days of searching. The dealership was a nightmare of lying, sleezy sales staff/managers and bait-and-switch tactics. We found what we wanted on the internet through an independent dealer who doesn’t sell in the conventional way. It was a great experience to buy from this place. It was different.

The automobile business has changed forever.

Recent events in the economy and the world of manufacturing have changed the car buying experience for customers, dealers and automakers. It isn’t going back to the way it was just two years ago.

More consumers are trying to keep their cars going longer, creating more demand for after-market parts (if you are smart enough to advertise your parts store to those who want to maintain their present cars).  If they choose to trade in, they have more options than ever before, locally and globally on the internet. They aren’t satisfied with failing automakers who thought they could dictate what people wanted (Pontiac, Saturn, Mercury, Hummer, etc.).

The public is demanding more fuel effieciency, but not willing to pay too much more for it. They have no interest in car companies who claim to be safe, but constantly lie about (and recall) their faulty products.  They won’t tolerate tactics that put them at odds with the sales person. They have no patience for unethical, sleezy practices. In short, what worked in the past to the dealer’s advantage isn’t working any more.

The auto industry isn’t down; it’s different. Everything has changed…forever. The customer is smarter, more savvy and more aware of Blue Book values, CarFax reports and OTHER choices on the internet.

We won’t be buying a car the same way ever again.