Dec 16, 2022
Canmore, Canada – “You’re not worried animals will come and grab some of the
food?”
Can’t read the full email – click here for the online version.
Since our arrival back in Canada, my wife has been furiously cooking and baking up a storm. All in anticipation of the arrival of
our daughter and a friend, both of whom play rugby for their university.
She wants to make sure we don’t have to run out, last minute, looking to pick up this or that. Back on this point in a
moment.
So, the house is smelling great, with the aroma wafting throughout, from the kitchen.
The good news is, she is giving me tidbits – fresh from the oven. The bad news is most items are being packed up into containers to be frozen. This activity very quickly overwhelmed the small freezer upstairs, then the larger one in the basement.
Which is why my friend asked about the animals. I had called him to help me move a small freezer that was stored in a studio building in the back yard, to our deck.
This way, my wife could continue her production, with easy access to a freezer unit just outside the dining room.
With current daytime temperatures well below freezing, there is no need to even plug it in. The food will be frozen – that’s a certainty. The unit seals well and frozen food hasn’t much of a smell. Animals are not going to be a problem.
But not being able to purchase what you might want, last minute, during the Christmas rush, might be.
Take the other morning for instance.
We popped into Shopper Drug
Mart, a large Canadian national chain, to pick up some items. (Like 8 lbs of butter!)
It was interesting and a little eerie to see some shelves devoid of
products.
Such has been the dislocation of resources, caused by government interference, that even large companies have yet to rebound to pre-pandemic levels.
With interest rate increases and recession looming, the middle class is going to be squeezed. This is important if your business relies on that group.
Basically, there are 5 categories of buyers.
- The top 1% - in income and wealth
- Another 4% - who are “modestly” wealthy and doing very, very well.
- Then there is the 15% who are still above par - income terms, six figures, but not high six figures.
These three comprise the top 20%.
The bottom 80 percent, in a normal or buoyant economy might be split
40/40
The upper part of this group contains the “middle” in terms of income. Think mid to high 5 figures.
The bottom group – which contains the most people, are the poor. Dependent upon retirement on social security, government subsidies etc.
Now, during good economic times, many businesses do great, serving the vast multitude of people in the middle. But, when the economy turns down, folks in this middle group, stop spending on anything but the essentials.
To ensure you survive this coming downturn, you must move your focus to serving at a minimum, the top 20%. Even better if you can focus on the top 5.
All spending comes down to two key factors.
- Their ability to buy
- Their willingness to
buy
Ability is practical, pragmatic, and financial. The more you have, the more able you are to make a purchase.
Willingness to buy boils down to emotional and psychological factors.
When the middle group begins to
have no ability to buy beyond the essentials, forget about emotional or psychological reasoning.
With the forecast that the average household will spend $5,500
more this year, than last, purely on essential goods and services – this group will surely stop making all other purchases.
The number one question for you then is:
Why should someone buy from you, versus all the other choices that are available – including, not buying at all?!
Until next week,
Stay healthy and focus on profit!
- Hugh
The “Profit Accelerator” Expert
P.S. Helping ensure customers decide to buy from our clients, is one of the first things we focus on. Which is why the first 4 weeks of our Virtual MBA, inside our business academy, are laser-focused on helping you build this. Take a look here.
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