"The Only Thing We Have to Fear Is Fear Itself"

Kethyr's CAMEL Report
Mountain View, California
Saturday, November 1, 2008

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I am an old man and have known a great many troubles, but most of them never happened.
— Mark Twain

Unless you've been lost at sea on a life raft or desert island, you surely know that the world's markets have gotten slammed in the last few weeks, and the U.S. economy is facing a crisis the likes of which may not have been seen since the Great Depression. However, the words of FDR's first inaugural address are just as relevant today as they were in 1933: "The only thing we have to fear is fear itself."

While I'm far too young to share any personal experiences regarding preparing for and surviving the next Great Depression (if and when it comes), I have learned that when we give into panic we act hastily. And, by doing so, we often undermine our long-term goals.

So today, let's put to rest some pressing concerns and make sure that doesn't happen.

Every crisis brings opportunity. The trick is not only to recognize that there's a lot of fear in the current economic environment, but to understand its origins and to look for the opportunities it presents.

While many of the firms that played "fast-and-loose" with the system are going under, these companies relied on cheap money and ready access to easy credit, which has been gratefully provided by our politicians over the past couple of decades.

In fact, the recent $700 billion bailout (excuse me, "rescue") is a continuation of the same practices that have gotten us into the mess we're in. And until the companies that should have failed are allowed to do so, and the economy is allowed to sweat out the fever it is currently experiencing, the patient that is our financial system is likely to remain sick in bed.

Unfortunately, regardless of who is elected this coming Tuesday, I see little reason to believe the U.S. has the political will necessary to take the economic medicine of higher interest rates and more business failures that is so badly needed to shake out the excesses that have built up in the economic system.

What all of this means to you, the small business owner, is that there is a shortage of credit and liquidity in the system. The government is letting some companies fail while it bails out others, financial firms don't know who to trust and are unwilling to lend money as they write off bad debts and rebuild their capital bases, and the entire financial system is being reorganized for better or for worse.

We may be in for some near-term deflation as the credit markets continue to contract. But I wouldn't be surprised to see inflation rear its head again, sooner rather than later, as all of the extra money the government's printing makes its way into the economy.

If your business requires regular injections of credit, you may still be in for a rough ride ahead. However, solid businesses who've maintained sound management practices and fiscal discipline, and offer necessary products and services, have little to worry about in the long run and a wealth of opportunities to take advantage of in preparation for the eventual rebound.

And if you're offering valuable and necessary products and services, have practiced sound business and fiscal management, and know how to market your products and services to those who want and need them, you should have nothing to fear.

So, instead of worrying, take some time to sit back and look at the long-term. Look for the opportunities in the current market and see how your products and services can be used to fulfill people's needs.

For example, if you offer psychotherapy and counseling services, consider offering career counseling services or seminars for people who find themselves up all night worrying about money and their financial future. If you sell fine Italian suits, consider marketing your suits as a way for your customers to distinguish themselves at the office, or as a way to make an unforgettable impression at a job interview. If you're a real estate agent or mortgage broker, consider offering products or services tailored to those who are looking to renegotiate their mortgage or who are facing a default or foreclosure and want to save their credit or their home.

No matter what business you're in, there's always an opportunity somewhere. And you can find it if you're willing to put aside your apprehensions and examine the situation objectively and creatively.

Another question I often receive is whether or not "fears" should be addressed directly in marketing endeavors…

Fear vs. "Comfort Marketing"

No passion so effectually robs the mind of all its powers of acting and reasoning as fear.
— Edmund Burke

Direct-marketing gurus may tell you that people buy products or services for one of two reasons: greed or fear. I try to dispel that myth for my clients by pointing out all the other feelings that are involved in buying and selling (e.g., pride, shame, anxiety, loneliness, etc.).

The subject came up recently in a conversation with one of my associates, a man who has already managed to build a couple of successful businesses. We were talking about marketing a service that would help people through the times ahead, which he sees as very bleak. When the conversation turned to how to write the promotion, he said, "One thing you don't want to do is spend too much time trying to scare people."

He went on to say that his success in selling fear-based products (any kind of problem-avoidance or problem-solution product) increased geometrically when he realized that "fear paralyzes people."

Scaring people, briefly, might be a good way to get their attention, he acknowledged, "but the business owner or marketer who leaves his customer too long in fear will end up with very low response rates."

I believe this is a major insight and it corresponds to what I've learned about selling health-oriented products over the years.

You don't want to dwell too long on the problems of eating disorders, or depression, or cancer, etc. Your prospects understand this stuff. What you need to do is offer solutions — or "comfort," as my associate put it.

I've always strived to create win-win situations for my clients and their customers — in fact, I've tried to create win-win-win situations for my clients, their customers, and myself — and I've always believed that optimism is far more powerful than pessimism, not to mention a whole lot more fun.

But when I think about all the fear-related products and services I've helped sell over the years and mentally inventory the successful and failed promotions I've worked on, I kick myself for not having discovered this simple but powerful marketing secret sooner.

Now it's yours.

So, spend some time figuring out how your products and services can be tailored to solve the problems your prospects are experiencing (or are worried about experiencing), learn to "comfort" their fears in your marketing messages, and you'll find you truly have nothing to be afraid of!

Yours in success,

Sean Eric Armstrong
Kethyr's CAMEL Report

P.S. Please send your questions and comments to editor@kethyr.com. For more information on how you can turn the current economic environment into opportunities for your business, contact info@kethyrsolutions.com.

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