Is alcohol a stimulant or is it a depressant?
If you visit almost any bar and grill on a Friday night after work, you’ll think of alcohol as a pick-me-up. Noise and laughter are strong evidence of the stimulating effects of alcohol. Yet at 4:00 in the morning, when you see some happy hour patrons sleeping on the streets, you’d swear alcohol is a depressant.
Chemically, alcohol is a strong depressant. But in the short term, by lowering a person’s inhibitions, alcohol acts as a stimulant.
Many marketing movements exhibit the same phenomenon. Long-term effects are often the exact opposite of short-term effects.
Does a sale increase a company’s business or decrease it? Obviously, in the short term, a sale increases business. But there is growing evidence that sales reduce business in the long run by educating customers not to buy at “regular” prices.
Aside from the fact that you can buy something for less, what does a sale tell a prospect? He says his regular prices are too high. After the sale is over, customers tend to avoid a store with a “deal” reputation.
To maintain volume, retail outlets must make near-continuous sales. It’s not unusual to walk down a retail block and find a dozen stores lined up with “Sale” signs in their windows.
Have auto rebate programs increased sales? The rise in car rebates has coincided with a decline in car sales. US vehicle sales have declined for five years in a row.
There is no evidence that coupons increase sales in the long run. Many businesses find that they need a quarterly dose of coupons to keep sales steady. Once they stop putting out coupons, sales drop.
In other words, you keep those coupons displayed not to increase sales, but to prevent sales from dropping if you stop. Coupons are a drug. You keep doing it because the withdrawal symptoms are too painful.
Any type of coupon, discount, or sale tends to educate consumers to buy only when they can get a deal. What if a business never started using coupons in the first place? In the retail arena, the big winners are the companies that practice “every day low prices”; companies like Wal-mart and K Mart and the rapidly growing warehouse outlets.
However, almost everywhere you look, you will see yo-yo prices. Airlines and supermarkets are two examples. Recently, however, Procter & Gamble made a bold move to set uniform prices that could become the start of a trend.
In everyday life there are many examples of short-term gains and long-term losses, crime being one example. If you rob a bank for $100,000 and end up spending 10 years in jail; or you earned $100,000 for a day of work or $10,000 a year for 10 years of work. It all depends on your point of view.
Inflation, or recent government stimulus (junk cash comes to mind), may bring joy to an economy in the short term, but in the long term, inflation leads to a recession or Great Deflation like the one being discussed. experiencing in the US right now (circa 2010).
In the short term, overeating satisfies the psyche, but in the long run it leads to obesity and depression.
In many other areas of life (spending money, doing drugs, having sex), the long-term effects of your actions are often the opposite of the short-term effects. So why is it so hard to understand that marketing effects take place over a long period of time?
Take line extension. In the short term, line extension invariably increases sales. The brewing industry clearly illustrates this effect.
Look what happened to Coors. The introduction of Coors Light caused the collapse of Coors regular; that today sells a quarter of the volume it used to sell.
In the short term, both brands can coexist and do well. But in the long run, the line extension was bound to undermine one or the other of the two brands. Once the decline begins, it is almost impossible to stop it.
Unless you know what to look for, it’s hard to see the effects of line extension, especially for managers focused on their next quarterly report. (If it took five years for a bullet to hit its target, very few criminals would be convicted of murder.
In other areas of marketing, short/long term line extension effects occur much more quickly. Let’s see what happened to Donald Trump. At first, The Donald was successful. Then he branched out and put his name on anything the banks would lend him money for; hotels, casinos, condominiums, an airline and a shopping center. Many asked, what is a Trump? What does Trump mean?
Fortune magazine called Trump an investor with an eye for cash flow and asset values, a savvy salesman, a canny trader. The Donald has been on the cover of many magazines.
At various times, Trump has declared bankruptcy. What made Donald successful in the short term is exactly what makes him fail in the long term: the extension of the line.
It sounds easy, but marketing is not a game for amateurs.
It takes a while, but many internet marketers recognize that the effects of marketing take place over a long period of time, and as a result, they use various methods and tools to build relationships with their prospects and customers. They build websites that build trust. They collect names and email addresses using an optin form on a landing page. They use email systems with autoresponders and broadcast capabilities to send messages to their leads and customers. These emails typically send information, provide insights, and sometimes promote an offer. Many internet marketers learn that prospects and customers don’t like being sold to no matter how they browse and buy. Over an extended period of time, Internet marketers can use hypnotic writing skills in their marketing campaigns to get leads and customers to take the action they want. This is how they learn to add value and succeed in the world that includes the Law of Perspective.
Marketing is not a battle of products. This is the strategy you use to benefit from the Law of Perspective, as the effects of marketing take place over an extended period of time and require not only perspective but also persistence.
You can learn more about internet marketing and home-based businesses by reading the updates that will be posted on my blog over the next few weeks.
Finally, a great book to read is “The 22 Immutable Laws of Marketing” by Ries & Trout. It is the source for some of the material provided in this article.