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 alcohol is a stimulant. Noise and laughter are strong evidence of the stimulating effects of alcohol. However, 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 depressing a person’s inhibitions, alcohol acts as a stimulant.
Many marketing moves exhibit the same phenomenon. The long-term effects are often the exact opposite of the short-term effects.
Does a sale increase the business of a company or decrease it? Obviously, in the short term, a sale increases business. But there is growing evidence that upselling reduces 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 nearly 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 car rebate programs increased sales? The rise in auto rebates has coincided with a decline in auto sales. Vehicle sales in the US have been declining 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 up coupons, sales drop.
In other words, you keep those coupons displayed not to increase sales, but to prevent sales from falling if you stop. Coupons are a drug. You continue to do it because the withdrawal symptoms are too painful.
Any type of coupon, discount, or sale tends to educate consumers to only buy 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 companies that practice “everyday low pricing”; companies like Wal-mart and K Mart and the rapidly growing warehouse outlets.
However, almost everywhere you look, you’ll 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; You either earned $100,000 for a day’s 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), can bring joy to an economy in the short term, but in the long term, inflation leads to a recession or a Great Deflation like the one that is unfolding. experimenting in the US at the moment (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, using drugs, having sex), the long-term effects of your actions are often the opposite of the short-term effects. So why is it so difficult to understand that the effects of marketing 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; which today sells a quarter of the volume it sold.
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 happen 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 banks would lend him money for; hotels, casinos, condominiums, an airline and a shopping mall. 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 shrewd trader. The Donald has been on the cover of many magazines.
At various times, Trump has filed for bankruptcy. What made Donald successful in the short term is exactly what makes him unsuccessful in the long term: line extension.
It sounds easy, but marketing is not a hobbyist’s game.
It takes a while, but many internet marketing entrepreneurs 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 insight, 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 prospects 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. It’s all about the strategy you use to benefit from the Law of Perspective, as the effects of marketing take place over a long 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 of some of the material provided in this article.