Marketing Safari

The DIY Economy During Recession

Let’s skip the pro and save a few bucks. But we can’t really skip everything that needs to be done, so we try to do it our selves. That’s why DIY programs, tools and tutorials are really sought after these days. Whether people are renovating their home, fixing the car, making some clothes, baking a cake, designing a brochure or doing SEO on their website.

These are the days when people seek advice on how to solve it them selves and if you’re generous in giving advice, you’ll be building your brand as the expert to go to in the field and creating some valuable relationships. By applying this, you can still make a living. You teach people to do it themselves. And when they get into trouble, you can always help them out. All for a fee of course.

The DIY tendence during recession is not a threat unless you allow it to be. See it as an opportunity and make it your ally.

Let’s beat the recession.
Hjörtur

Is MLM The Way To Go During Recession?

The Internet is being bombarded with all sorts of offers to participate in different kinds of MLM programs. And I’m often asked about those programs, if they are a good thing or not, a good investment of time and money, or if they’re just a scheme, some sort of a pyramid scheme.

No, they’re not “some sort of a pyramid scheme”. They ARE a pyramid scheme. That’s just how it works. If you’re at the lowest level you’re going to have a hard time making any real money. You need to move up the ladder to do so, to recruit people. And the time comes when the market becomes fully saturated.

I wrote my BA-thesis in anthropology “Salesmen or Missionaries” on MLM companies, comparing them to NRM (New Religious Movements). The results were actually quite scary.

A morning "mass" - "It's a great gang that sells a Kirby". But at least they have a real product.

If you come across something where the focus is on selling you the system and all the benefits but the product seems almost irrelevant, you can be certain you will not make any money on it unless you are at the top of the chain. They’re not selling a product because there is no value in the product, they’re selling a program. That’s a pyramid scheme.

This is a classic, offering money, white beaches and fancy cars (images) but actually, no product.

The recession is a great time for MLM, because desperation drives many people to try it. It brings bunch of people into the lowest level who invests in the system and that’s what the top needs to survive. Both MLM and NRM target people that are vulnerable, people in difficulties, whether personal or financial. If the desperation is sufficient and paradise tempting enough, you can get people into anything. Just ask a suicide bomber.

My advice, after both participating in MLM and studying those systems academically, is just don't do it. Consider this: Even though you might be entering early enough and desperation be widespread meaning there’s a large market now, consider where the money comes from. Is it the value you create for the end customer, or by recruiting another level below you (read: exploiting others desperate for money). Invest your energy and money elsewhere and you are much more likely to succeed, no matter how tempting the MLM “paradise” may sound.

What's your experience?

Hjörtur

Certainty in Uncertain Times - Why Hyundai is Winning the US Automarket

Did you watch the Oscars last weekend? I didn't. Out of the 80 TV channels I've got, none was showing from the Oscars. But I always have Twitter :), so I followed the Oscars on Twitter.

And one thing I noticed is that the Hyundai commercial really got people talking, and most people loved them.



And their marketing is brilliant. They really get it!

It's a recession and it isn't easy for the car makers. In January sales dropped 37% in the US (which is pretty good compared to 88% here in Iceland). The American producers are leading the drop with 55% (Chrysler), 49% (GM) and 40% (Ford). But Hyundai didn't drop. They increased their sales 14%!

How comes? Why is Hyundai growing while everyone else is losing?
They are playing their cards according to the situation. These are uncertain times. People don't know how the economy will develop. More people are going to lose their jobs, and no one is safe. At times like that, people hesitate to make big commitments, like buying a new car. So to overcome that, Hyundai started their Assurance program, which you may have read about in my ebook on recession marketing. If you lose your job or income, you can just return your car. They've improved their offer even more, offering to pay for you up to three months if you can find another job within that time.



But it's Korean! Shouldn't people be buying American now?
People want to support their own. To keep the jobs in the US. Which means people should rather buy American cars than imported. They should buy "The North American Car of the Year 2009", shouldn't they? Guess what, that's a Hyundai Genesis. Not only that, but their factories are in Alabama and California. And Jeff Bridges does the voice over on the commercials. How American does it have to be?

They are living the American dream. Came to the US with "an empty brand" and are now beating all the competition.



So, not everyone is buying it. But nobody is expecting 100% market share. According to Twitter that night, the majority is loving Hyundai for what they're doing, and how they are presenting it.



Hyundai is obviously going after the opportunities the recession is offering them. They've got cheap but reliable cars with very low failure rate. They were already offering 10 years warranty, the best on the market. Now they've added Assurance and it really works, so they're increasing their advertising. They ran some ads during Super Bowl and again during the Oscars, and they had loads of them. According to Edmunds.com, they saw an increase of 27% for Hyundai the following day, so we might be seeing even more impressive sales numbers for Hyundai for February.

I've been a car enthusiast for as long as I remember and in my mind, Hyundai has stood for cheap, crappy cars. But I have to admit, they keep showing me numbers that contradict my prejudices. They really mean business and they're doing a great job. This is a brand to watch.

Hjörtur

Disclaimer: I am in no way affiliated with Hyundai or any of their agencies or partners and am not getting any payments or benefits for writing this.

ps. If you want to learn more about marketing in a recession, you can download my ebook "The Marketer's Magic Chest - Marketing tips, tricks and tools to unlock the chains of recession" for free!

Opportunities in a Recession

Tables are turning, games are changing. It's recession which means different economy, different lifestyle and different opportunities. But there are actually more opportunities than ever before.

Here in Iceland we've been hit harder than most other countries. The currency has collapsed. Inflation is about 18%. All loans were either in foreign currency or tight to the inflation so they grow 18% a year. Housing prices are dropping. Unemployment rate is skyrocketing, now at over 7% (used to be less than 2%) and expected to exceed 10%. The government resigned last Monday. Things have been better here in Iceland. A lot better.

So what do all those changes mean? It depends on your situation, but one thing it means is chances. Opportunities. Every change comes with a chance. Those who survive through the recession are those who realize what chances come with the changes and manage to grab them.

I'll give you a few examples:
- when the competition withdraws, they leave a vacuum. Fill it.
- generally lower service lever. Improve your service.
- easier to be outstanding. Be outstanding and your customers will love you for it and spread the word.

Most see unemployment as a negative thing (and usually is for the one that is unemployed). But it also means opportunities. You can get more qualified people for the job that needs to be done. It has been a problem here in Iceland finding skilled people. For smaller companies, it's been impossible to compete with the large banks in salaries. Now this has changed and a lot of skilled people with valuable knowledge and experience is available for reasonable salaries.

We've already heard numbers that reflect the lifestyle changes following the recession, both from the US and from Iceland. McDonalds announced estimated 70% increase in profits in 2009. Don't expect the same from Starbucks. Amazon also announced an increase. Here in Iceland, the benefits of a cheap Krona is increase in tourism. In December, we saw 43% more tourists than Dec last year and 400% increase in Tax Free shopping. Not bad.

Export has also exceeded import for the first time in a long time. That means we are no longer spending more than we make in International trade. That helps.

Regarding the general public, people buy cheap, buy used and do-it-themselves. This means
- cheaper shops grow and more expensive ones don't (McDonalds / Starbucks).
- Used items sell better, whether they are used cars, used clothes, items on garage sales or other stuff.
- Accessories sell better and even cosmetics. You see, if you can't buy a new dress, you buy a new necklace and a new lipstick. If you can't buy a new car, you fix the old one and try to improve it. If you can't buy a new home or a bigger one, you'll just have to make the best of your present one. Paint and screws don't cost much.
- Do it yourself. If you're doing something bigger, it's tempting to do-it-youself rather than finding someone else to do it and save money that way. So offer tips on how to DIY and sell the tools and materials for that.

And of course, if you have money, there are loads of buying opportunities.

This is why it is important to keep your business flexible. So that you can adapt to those changes and grab the opportunities that are out there.

Carpe recession ;)
Hjörtur

If you want to learn more about how to beat the recession, then check out my ebook The Marketer’s Magic Chest which is full of marketing tactics and strategies to beat the recession.

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