What's Up With The Economy?

Last week I attended a seminar put on by Lee McPheters with the W.P. Carey School of Business at Arizona State. I took this seminar as part of my continuing education to maintain my C.P.A certification. Although he started the session saying that the outlook is not doom and gloom, when I left 2 hours later, I was significantly depressed. As most people know, economists agree that the U.S is now in recovery mode. Here is a graph showing the GDP growth rate for the last several quarters.

So, if our GDP is growing, why the doom and gloom.  Well, to start with his projections show a .5% increase in unemployment for the year in the U.S. (-1.0% in Arizona). So it looks like the recovery is not going to be employment based. His overall GDP growth rate for 2010 for the U.S. is predicted to be about 2.5%.  This tells me that the sales that we experienced in 2009 will repeat, at best, in 2010.  If you are planning on significant growth in 2010, you are fooling yourself.

Lee also discussed the lost decade.

 That's right, the S&P 500 Index is where it was in 1999. All of the stock market gains we experienced in the 2000 decade have all disappeared.

How has employment held up for the last decade?

We have fewer people employed at the end of 2009 when compared to the end of 2000. That's why we feel that we are struggling.

Lee also spoke about the U.S. savings rate.  Our savings rate over the last couple of years has increased to 5.9% of earnings, which sounds great.  However, 70% of our economy is consumer driven.  For each 1% increase in the savings rate, about $100 billion is removed from the economy.  We need the consumer to become comfortable with their position in life and start spending again.

How do you feel about the recovery.  Well, 65% of people who were polled stated that the recession is not over.  In fact, what a lot of economists have stated is that the increases in the GDP that we have seen have been caused by two main reasons.  First, manufacturers have decided to bring their inventory levels back up to pre-recession levels and that is thought to be a temporary measure.  The second reason stated is that the stimulus monies are having a temporary effect on business activity (though you could not tell it by me).

When Will the Full Recovery Happen?

So what is the timeframe for a full recovery?  Can you believe 4-5 years.  2014 is the year we may be able to celebrate and say that everything is back to pre-recession levels.  The official recession lasted 21 months where the average recession in the past has lasted 10 months.

The recession in Arizona has been significantly worse than the rest of the U.S. and the recovery will follow the U.S. In the past, Arizona has shown significantly wider variations in growth and contraction rates and will probably show a higher growth rate when we finally start to come out of this.

My Thoughts

After hearing all of this (and more), I have the following thoughts about going forward as a small business in Arizona:

Everything that you wished you had done to make 2009 a better year, do it in 2010:
If you wished that you had reduced your costs sooner or to a greater extent, make sure you make those reductions now.  2010 will not show a significant increase in revenues and your expenses will continue to grow if you do not take measures to control them.

Hire back slowly:
Be slow to fill new or empty positions with full-time staff.  Now is the time to have a plan on hiring temporary and part-time employees.  Have a good agency ready to fill temporary needs.

Explore alternative financing options:
The availability of conventional credit lines will continue to dry up for small businesses.  Even though there is a great amount of discussion about having the banks open up their lending, they still have to deal with financials that reflect two years of losses and reduced balance sheet health.  It is time to start looking into the SBA programs again and what they may have.

Start innovating again:
It seems that lately, Google and Apple are the only companies that continue to innovate (if you call the iPad an innovation considering it looks like an oversized iPhone without calling capabilities). Its time to look at your business and figure out what it is going to take to make it a profitable enterprise in this next decade. I know its hard to think about the future when you are fighting the current battles, but it is imperative to the future of your business and the economy that we start innovating again.

Make the hard decisions:
You know which ones they are.  From letting people go, to closing down an unprofitable branch, to selling off an unproductive asset or to getting another job.  These are hard times and the people who are able to make the hardest decisions are the people who come out ahead at the finish line.

There you are.  Now doesn't everyone feel better?

You can reach us at AlphaGraphics at the following websites:

AlphaGraphics Mesa on Baseline 480-844-2222
AlphaGraphics Tempe on Elliot 480-413-1900
AlphaGraphics Phoenix - Northwest Valley 602-234-2944

Follow me on Twitter at: Steve's Twitter Account

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The New AlphaGraphics Customer

As I mentioned in my last post, I just got back from the Alphagraphics Gold Circle meeting in Naples, Florida. One of our speakers was Liz Brohan of Colman Brohan Davis a company specializing in brand strategy and creative marketing. The first part of Liz's presentation to us was explaining to us what the new Gen Y customer was like. In a nutshell, here is some of the things she asked us to consider.

First, Gen Y is defined as those young adults born between 1980 and 2000, essentially children of the baby boomers. They, in fact, do not like to be called Gen Y'ers but would rather be called "Millennials". The millennials have high expectations, they feel special, they are connected 24/7, they are very technical and, quite suprisingly, they want to serve their community. Liz also said that they feel indispensible, they love a challenge, they work best with friends, they are good with finances, they are goal oriented and they want recognition for what they contribute.

So, how do millennials go about making a decision to buy. In case anyone has not noticed, they go online. They go to the company website, they go to blogs, they go to business directories, they go to wikipedia, they ask their friends (online of course), they search out comments on the business in the social media networks of FaceBook, Twitter, LinkedIn and YouTube. Only when they have found out as much as possible about a business or product will they actually try and contact the business. One of the surprises in Liz's presentation was that the millennials will also look at printed items to help in their selection. The other aspect of how the millennials are doing their searches is that they are increasingly using their mobile device to do all of the research.

In the business-to-business environment, the millennial will probably present their decision to their boss, a baby boomer or a Gen X'er who will make the final decision. In the near future, the millennial will make the decision. Then, once the decision is made and the transaction is completed, the millennial will go back online, and will rate the quality of the service and product by going to sites such as Yelp, Merchant Circle, City Search, Google Maps, Bing Local, etc. In addition, they will post a comment on FaceBook, Twitter or probably Google Buzz.

So what is a business to do to help the millennials along on their search? We need to be active in the Social Media arena. We need to have our websites in good order so that when we are found, we can answer what they are looking for. Our websites need to have a mobile phone presentation. We need to blog. We need to have a presence on FaceBook, Twitter, LinkedIn and the ratings sites.

I am commonly asked. What has all of the work that you do in the social media area gotten you? My answer is that the rewards come slow, but they come. Just this week, I had a inquiry on Twitter about signs and posters and I had a customer compliment me on how high I ranked in their mobile Google search which got them into my door.

My thanks to Liz Brohan for her insight into our new customers and I hope that when she checks in with the AlphaGraphics owners in the future that she will see that all of our social media work has benefited us greatly.

You can reach us at AlphaGraphics at the following websites:
AlphaGraphics Mesa on Baseline 480-844-2222
AlphaGraphics Tempe on Elliot 480-413-1900
AlphaGraphics Phoenix - Northwest Valley 602-234-2944

Follow me on Twitter at: Steve's Twitter Account

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What I Learned at the AlphaGraphics Gold Circle Meeting

Last week was our annual Gold Circle meeting of the top revenue owners in the AlphaGraphics system. We held the meeting in Naples, Florida. There were 31 owner groups represented. Contrary to what a lot of businesses are doing in this economy, AlphaGraphics continues to have these meetings of top performers and also having our annual conference each summer. The location was not as exotic as in the past, but the company was, again, outstanding. Thank you to Kevin Cushing, AlphaGraphics CEO and the rest of the AlphaGraphics staff in having the foresight in continuing these meetings in these difficult times.

So what did I learn?

From the group as a whole...Yes these are hard times and many of us have experienced revenue declines from the prior year, but we still need to laugh and enjoy ourselves. We had several discussions about how to improve our businesses and how to gradually change ourselves to adapt to the changing business climate. There was a lot of laughter in our meetings and dinners.

From Grant Richey in Bountiful, UT...maybe its time to hire a person who devotes themselves to the marketing aspects of our business, especially for SEO and social media

From Butch Clarke in Dallas...the best way to transition into becoming marketing and communications experts is to bite the bullet and start having conversations with our clients

From Rodrigo Abreu in Brasil...being an expert in marketing does not mean we have to be on the bleeding edge. Man, this guy really knows his marketing stuff. Good choice Kevin.

From Chuck Stempler in Seattle...maybe we can make money in this marketing and communications consulting gig. Great work on the Humane Society.

From Rob Johnson in West Valley City, UT...there is plenty of money to be made in the large format arena. I'm going to take a look at vehicle wraps.

From Clair Meehan in Pittsburgh...If you have a creative mind, our customers will seek us out for their most important projects.

From Bill Meehan, her husband...before we can present ourselves as experts, we need to market our own businesses in the way that we preach.

From John and Karen Bickers in Madison...if you want to get into litigation support, you need to right business structure and the right software.

From Keith and Shelly Hermanson in Billings...we need to invest in new types of people in order to make this transition and we have to plan to maybe fail before we succeed.

From Mike Sparaco and Darin Osborne in Tempe...keep investing in the business, become an expert in everything we try to do, and have passion for the business.

From Jeff and Jill Lerner in Sunnyvale, CA...Being active in the community is where its at. Also, when you check your airline tickets for departing time, also check the departing airport :-)

From Sally McKenzie with Ecommerceconsulting.com...Google is taking over the world and our personal lives.

From Karen Brinker in Greenwich, Connecticut...starting another AlphaGraphics can be exciting and hopefully rewarding. I hope they learned a few things from me in that regard.

From Larry Furlong in Phoenix...continue to have a marketing mind. We need to continuously promote our businesses by direct mail, on the internet and wherever our propective customers' eyes might fall. And, as Kevin Cushing said, he continues to do God's work (love you Kathy!)

From Liz Brohan of Colman Brohan Davis...our customers do not want us to find them, they want to find us by researching and getting recommendations online. The Millenials are going to rule the world and we need to adapt to this change. However, we can still teach them about the benefits of direct mail.

And for all of the other Gold Circle owners and presenters I did not mention above, thanks for the most enjoyable and instructive meeting I have had in a long time.

You can reach us at AlphaGraphics at the following websites and phone numbers:
AlphaGraphics Mesa on Baseline 480-844-2222 FaceBook
AlphaGraphics Tempe on Elliot 480-413-1900 FaceBook
AlphaGraphics Phoenix-Northwest Valley 602-234-2944 FaceBook
Follow us on Twitter

New Rules...

In the last couple of months, I have been reading a lot of books on marketing, advertising, public relations, SEO and email marketing. The two books that stand out as it pertains to my AlphaGraphics business are David Meerman Scott's book "The New Rules of Marketing and PR" and John Jantch's book "Duct Tape Marketing-The World's Most Practical Small Business Marketing Guide". Both of these books have valuable insights and advice on how to market in this new Web 2.0 environment and how to save money in this area over traditional methods. I now follow both of these authors on their blogs and twitter postings.

I have been reading all of these books for two reasons: I want to be the best in marketing my three AlphaGraphics centers and I want to be able to consult with my customers on how to market their businesses in this environment. As I stated in my last blog posting, quick printing businesses are becoming more marketing consulting oriented and to become so means to learn all the tricks of the trade.

In this posting, I want to discuss David Meerman Scott's book and how it has effected my marketing thus far. My timing on this book could not be any worse. Just after I finished reading his 2007 edition, he released the second addition last week. David's first book was very heavily oriented in the blogging area with additional discussions about social media, video and podcasting which he admitted were areas he needed to spend more time. Well since that published date, he has expanded these areas and I am sure that the new edition has significant additions to these areas.

With apologies to David for copying the following section, I believe that he said it best in his book. In the first couple of chapters, David described the Old Rules of Marketing and PR, namely,

"-Marketing simply meant advertising and branding

-Advertising needed to appeal to the masses

-Advertising relied on interrupting people to get them to pay attention to the message

-Advertising was one way-company to consumer

-Advertising was exclusively about selling products

-Advertising was based on campaigns that had limited life

-Creativity was deemed the most important component to advertising

-It was more important for the ad agency to win advertising awards than for the client to win new customers"

"-The only way to get ink was through the media

-Companies communicated to journalists via press releases

-Nobody saw the actual press release except a handful of reporters and editors

-Companies had to have significant news before they were allowed to write a press release

-Jargon was okay because the journalists all understood it

-You weren't supposed to send a release unless it included quotes from third parties, such as customers, analysts, and experts.

-The only way buyers would learn about the press releases' content was if the media wrote a story about it

-The only way to measure the effectiveness of press releases was through "clip books," which noted each time the media deigned to pick up a company's release"

David then went on to talk about the new rules of marketing and PR, namely:

"-Marketing is more than just advertising

-PR is for more than just a mainstream media audience

-You are what you publish

-People want authenticity, not spin

-People want participation, not propaganda

-Instead of causing one-way interruption, marketing is about delivering content at just the precise moment your audience needs it

-Marketers must shift their thinking from mainstream marketing to the masses to a strategy of reaching vast numbers of under served audiences via the Web

-PR is not about your boss seeing your company on TV. It's about your buyers seeing your company on the Web

-Marketing is not about your agency winning awards. It's about your organization winning business

-The Internet has made public relations public again, after years of almost exclusive focus on media

-Companies must drive people into the purchasing process with great online content

-Blogs, podcasts e-books, news releases, and other forms of online content let organizations communicate directly with buyers in a form they appreciate

-On the Web, the lines between marketing and PR have blurred"

In "The New Rules of Marketing and PR" David discussed that determining the various persona's of your buyer was very significant in designing your website and delivering your "thought leadership" message through blogs, emails, new releases, white papers, wiki's webinars, e-books, podcasts and videos. He also discussed re-purposing content to fit into these various avenues since the customer is now going to the Web to seek out content and information, not to see an advertisement.

So what have I done for my three AlphaGraphics center since I read this book?

-First, I started this blog. I have written on a number of marketing concepts and thoughts. Some of my postings, I am very proud of, some were just postings.

-From these postings, I have submitted three of them as ezinearticles.com publishings. The first attempt was brutal, but I finally got the hang of it and am was able to publish on my first attempt the last two times.

-I re-purposed two postings into news releases. One about the Top 10 Ways to Market a Business in 2010" and the other about the benefits of Direct Mail. I also post these news releases as separate pages on my website.

-I issue a monthly email newsletter to my customers using some of the information in my blogs. I now archive the past issues of my e-mail newsletters on an off site website that links into my main website.

-I've improved the keywords on my website.

-I've become active in the blogging community, commenting on blog postings and reading as much marketing information from this source as possible.

I would whole-heartedly endorse this book for all my fellow AlphaGraphics owners (the second edition, of course) and to any small business owner. It really cleared my head about what I needed to do to expand my marketing effort.

So what has this done for my businesses since I started this effort? Well, that is a subject for a later posting.

You can reach us at the following websites;

AlphaGraphics Mesa 480-844-2222

AlphaGraphics Tempe 480-413-1900

AlphaGraphics Phoenix 602-234-2944

Follow us on Twitter: @steveadams291

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