You’d have to be living under a mushroom to not be aware of headlines that scream, “The Sky is Falling – Recession On Its Way!” and news of multi-billion dollar write-offs by major financial institutions.
This weekend, the Trickle-Down Effect kicked in.
Gold broke an all-time high barrier of $900 per ounce, and is predicted to continue to set new records in the foreseeable future.
Citigroup just added $4 billion to a reserve account for future losses on consumer loans, and J.P. Morgan followed suit. It’s not just about sub-prime mortgage losses anymore – it’s quickly becoming about consumer debt.
The “affordable luxury” category took a hit this past holiday, with solid performers like Tiffany, Coach, and Nordstrom admitting sluggish sales.
And when Costco says, “Our holiday sales were OK,” it’s time to sit up and pay attention.
If you do nothing else this week, do yourself a favor and read today’s Monday Morning Memo, titled "2008: Year of Transition" and written by Roy H. Williams. Nearly five years, ago, Roy wrote and talked about a pending seismic shift in our culture and economy – a change that has now arrived with the accuracy of Jack Bauer’s special-ops watch.
Roy offers a few guidelines for the next cycle of business that show you not only how to survive the rocky road ahead, but tell you exactly what you need to do in order to grow.
Monday Morning Memo readers already know that Roy is a brilliant writer and strategist. Whether you take his advice or not is up to you… but if you do, it could be the smartest thing you’ll ever do for the future of your business.
Good list. However, his first point about efficiency brings me to "efficient isn't the same as effective." Relationships are actually more important than ever due to word-of-mouth and all that increased communication. And, the less people have to spend - the more they'll want to make sure they're spending with the right people.
Perhaps he means companies can no longer indulge in simply talking about relationships - they gotta walk the talk (and at whatever speed the customer wants, can relate to.) At one "customer intimate" company I worked at back in the day we used to joke (internally and oh-so-cynically) "Yeah, we want to be a 'partner' with you, Mr. customer. Just give us all your money!" I think those faux commitments may have seen their day. (At least I hope so.)
Personally I think some reality is good for our society. After all, it reads "pursuit of happiness " not "guarantee of happiness." The really sad thing is that so many people have so much stuff (for which they're in hock up to their chins) and they're still not happy.
Posted by: Mary Schmidt | January 21, 2008 at 06:04 PM
Excellent point, Mary. I believe you're right - efficiency is the new relationship builder. I'm as guilty as the next person of talking about how women want strong "relationships," yet sometimes fail to explain what that really means. It's not all touchy-feely, oooh-i-love-you-i-really-love-you stuff. Sometimes a relationship and bond can be built on simply giving the customer an efficient experience in which to buy. Zappo's comes to mind - their no-hassle return policy is about as efficient - and bonding - as they come!
Posted by: Michele | January 22, 2008 at 05:59 AM
We as a nation are now making negative net income = Spending > Income! Can you say "Danger Will Robinson." We need to wakeup and not continue to wear this path down.
Suggestions- 1) Make a budget 2) Stick to the budget 3) Find a way to make a side income (copyrighting- Glyphius, sell your junk on Ebay, do part-time call center work, etc.) 4) Stick to the budget!
Posted by: Dan Ider | January 26, 2008 at 11:49 AM