“Petrol (gasoline) prices per liter in Euro at Childerley Gate (UK). A historical record of fuel prices in mid-2005!” (Photo credit: Wikipedia)
What you value most could include valuing a particular kind of customer (or any order for a particular service that provides an excellent profit margin). What you value most could also include valuing a particular amount of customers (or a specific increase of profit). Of course, what an individual values most can change as they change, as their household changes, and as the community around them changes, like as gasoline prices quickly double or drop by a dollar or two.
What the people around us value can be labeled “the local economy.” What people value includes how they choose their priorities of what to spend money on, how to select which businesses to use, and every part of the process of choosing to either do business with you or do business with someone else instead.
“Business development” is a broad term that includes planning, marketing, generating leads, and converting leads in to transactions. Many small businesses are generally familiar with the basic idea of business development. Realistically, most small business owners are very familiar from personal experience with converting leads in to transactions, yet they are just as surprised as the general population by major economic changes.
Certainly, many businesses have major increases in their profits by reviewing and refining the process used for converting leads to transactions. Some business owners recognize that as an issue in which a major improvement is possible. However, in the 13 years that I have been consulting with business owners, the vast majority have, in my opinion, vastly underestimated the value of competent economic forecasting.
Phoenix Arizona 24th Street & Camelback Road from the Phoenix Mountain Preserve (Photo credit: Al_HikesAZ)
In the area of Phoenix (Arizona), the economic shifts of the last decade have substantially altered almost every local business. As energy prices rose (including for gasoline), two factors made Phoenix more sensitive to that change: the heat of the desert (which creates extremely high electricity bills in the summer for cooling) and the sprawl of the suburbs (which creates unusually high costs for commuting across long distances, including when the auto’s AC is constantly on high to keep the inside of the vehicle cool when it is well over 100 degrees outside).
I published forecasts in 2004 alerting my readers to the issue of gasoline prices rising so much that it would effect the budgets and spending patterns (including investing patterns) of businesses and consumers within the US in particular, but also in places even more dependent on importing fuel, such as Greece, Italy, the UK, and Japan (which has been in a “recession” for the last 23 years). I published warnings in 2003 of the emerging instability in real estate and stock markets, but it was not until 2004 that I recognized rising fuel costs as the underlying issue. In mid-2005, when the real estate market in Phoenix shifted (as well as in another sprawling desert suburbia, Las Vegas), I had already been watching for the shift and published my recognition of the first stages of the shift that eventually spread to the rest of the US real estate market and then the financial stocks (companies that had been gambling on extreme concentrations of risk exposure in real estate, such as AIG, FNMA, FDMC, Countrywide, Washington Mutual, Merrill Lynch, Bear Stearns, and then even Bank of America, JP Morgan Chase, and so on).
Bank of America recently acquired Merrill Lynch, saving Merrill Lynch from going out of business (Photo credit: Wikipedia)
The Washington Mutual logo prior to its acquisition by JPMorgan Chase. (Photo credit: Wikipedia)
(In the late 1920s, Charles Merrill, the co-founder of Merrill Lynch, repeatedly warned his clients in advance of the emerging risk in the US stock market. In recent years, apparently the company was not so committed to competence analysis of emerging trends.)
Merrill Lynch & Co. (Photo credit: Wikipedia)
Many local small businesses have been challenged by the decreasing tide of people moving to the sprawling desert suburbs. New construction in the Phoenix area is a small fraction of what it was in 2004. New people moving to the area had been so high that many local businesses had been extremely successful without ever advertising. However, cultivating customer loyalty is a huge issue now for many businesses. Further, even with word-of-mouth, there is a transition away from spoken recommendations toward the broadcasting of typed electronic messages like “can any of you recommend a really good ____?”
Since I have been in the advertising field for 13 years, my work history shows that I have been part of the shift away from print and radio toward the internet. Obviously, the shift toward the internet is far better known by most people than the causes of the economic shift that has slowed the economies of Greece, Phoenix, Japan, and other areas most sensitive to rising fuel prices. (In fact, in this piece, I am not even addressing WHY global fuel prices reversed a long-term trend in 1999, but that has been the main focus of my forecasting publications since my 2004 use of the term www.TheDominOILeffect.com.)
So, almost everyone who has studied business trends at all in the last 10 or 15 years knows about the huge shift toward the internet and growing electronic resources like google, facebook, blogs, and things like verified reviews and ratings. The shift of business toward the internet is almost as obvious as how computers altered how business is conducted or how the telephone altered how business is conducted or even calculators and adding machines and credit cards and checkbooks and currency.
Next year, the most popular currency in the world, the Federal Reserve’s “US Dollar” note will be 100 years old. It simply did not exist in 1912.
100 years ago, the technologies altering the world of business were things like the use of residential phones (“landlines” were still replacing telegraphs in remote parts of the US). Automobiles were still extremely rare, kind of like owning a private jet is very rare today. There was no such thing as TV advertising or cable TV or even television sets.
Now, millions of people are walking around with new mobile phones that have computing power that might have cost a million dollars in 1999. Most business owners are only vaguely aware of the growing waves of business flowing in to the internet.
As fuel prices continue to rise relative to most other items such as real estate and computers, people are going to value their time newly. As technology allows growing numbers of people an extremely fast access to extremely relevant information, people are not going to drive around all day shopping for deals to save $20 or even $50. People will save time and money by using the internet.
Imagine businesses that clung to using a telegraph instead of getting a telephone. Imagine businesses that favored typewriters over word processors. What happened to those businesses? They mostly disappeared, right?
I know some farmers who only recently bought a telephone and do not own a computer. They are Amish. I do business with them regularly.
However, they are farmers. They may not use automobiles personally, but they sure appreciate that UPS and Federal Express will deliver their products for them.
Image via CrunchBase
Is your business ready for the future today? How would you be sure?
In 2004, were you planning for the coming economic changes like rising fuel prices and a huge decrease in borrowing and lending? Most business owners may have no idea how far they are from the reality of the business trends that are coming to their industry and their local economy (as in the changing values of their customer base).
I have talked to many confident millionaires in the last 10 years. A lot of confidence was not enough to keep them out of foreclosure and bankruptcy.
Government committees across the world have also been profoundly confident in their projections of tax revenues. Myself and others have warned them that their projections were “approaching the ridiculous.” They sometimes called us ridiculous.
There may have been some excessive pessimism as well as some excessive optimism. Consider that there is no such thing as an excess of realism.
English: Damage to the JP Morgan Chase Tower after Hurricane Ike, Houston, Texas (Photo credit: Wikipedia)
If you are open to a realistic assessment of what are the most valuable refinements that you can make to the way you conduct business, then you may realize that sometimes a single change can make a huge difference, though a series of small changes is often what leads to the most historic breakthroughs. Those who are willing to benefit from changing economies and changing technologies are welcome to contact me now. From realism about the changing economic trends to realism about the changing technology of how your future customers are selecting which business to use, how much realism are you willing to value?
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Tags: advertising, change, fuel prices, future, gasoline prices, internet, local economy, phoenix, prices, real estate, realism, rising fuel prices, small business, trends, what you value
