(Source: Everyone’s Blog Posts – Bowling Industry)
I speak to allot of business people every day.
From bowling and entertainment industry people to automotive dealers
to software developers, to restaurant owners to distributors and
manufacturers of high tech and low tech products.
Not one of these folks has indicated that business is good or at least
improving. There is almost a quiet (but angry) acceptance, grudgingly so
may I add, that this “new normal” is here to stay and that the future
isn’t all that bright.
Smarter minds than mine have dissected the reasons for all this, but in my
simple point of view. I think its all about housing. Even when the stock
market went into the tank during the “tech crunch”‘, people still had their
housing “asset” and that was continuing to increase. So if we felt less
wealthy because our portfolios went down, we secretly knew that our house
was “our safe” place; our last bastion of economic solidarity.
With the hosing meltdown of 2008 to present, consumers looked around and
found they were naked, out in the cold with no back up asset. Not only did
their 401k’s take a major hit, but their homes (THEIR HOMES, FOR
CRISSAKE!!) lost value.
In fact, according to a recent Standard & Poor report the ratio of total
mortgage debt to property value now stands at 69.8%. In some areas like
Las Vegas NV and Orlando, FL this ratio is 119% and 100% respectively. In
Warren MI, its 88.4% in Nassau and Suffolk County NY, it is 45.4%.
Further reports indicate that for every $1,000 lost in property value, each
individual consumer cuts back anywhere from $20 to $70 a year in spending.
Doesn’t sound like much, but if you put it all together, from 2005 to 2009,
consumer spending decreased by $240 BILLION DOLLARS.
This decrease represents about 1.7% of annual economic activity, enough to
be the difference between mediocre economic growth and healthy growth.
What has happened is that people have realized that the economy is not
going to get better any time soon, so they have stopped spending. Period.
I hear it every day from bowling proprietors. They tell me how their open
play and bar business has taken a big hit, especially liquor. Even beer
companies like Bud and Miller report very soft sales with some markets
being off as much as 50%.
So what are you supposed to do?
In good times and bad, customers are first and foremost people.
And people always want to do business with people they trust and who they
believe really care about them. In this economy, your number one job is to
prove to your customer that you are a member of the community who cares
about the community. (Why would you not?)
Simply stated. Be their friend and continue to build on the relationships
you have with them. Here’s seven (7) actions you can take right now
Go back to your existing customers and invite them in with your
very best offers. Best beer offers, liquor specials…all within
the confines of your state laws of course
Communicate with them about ways to save money and live better. Be
a resource they can trust for helpful information.
Be more visible in the community. sponsor local events, get
involved in fund raising, put out the “Christmas Toys for Tots”
cans early.
Work with area merchants to co-promote. Distribute other merchants
coupons that will save your customers money and time.
Give free games away to get people to bowl paid games
Create frequency programs where they can get premiums for bowling
more.
Make sure your people respect and honor the customer and treat him
with more dignity than ever.
As people settle into lives of believing they are less prosperous,
discretionary income is the first thing to go
But if you show them that having quality family time in a safe and clean
environment is something that IS vital to their well being and can prove
your center’s “value proposition”, you can survive this cycle
For more information on what you can do to retain and grow customers,
please email me at fredkaplowitz@gmail.com
Lets talk.
Good luck and good hunting
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