Thu, February 19th, 2009 - 5:31 am - By Gordon Basichis
Years ago, my grandfather, who did pretty well in the Great Depression, advised me that in tough times you need to find either one of two types of customers. You find the guy with the million dollars or a million guys with the dollar. What did he mean by this? Quite simply, you find either the large scale customer and service him, or the multitudes who need an inexpensive something for, largely, entertainment or diversion.
In a recent newsletter from Media Post I read about the “Lipstick Effect” and thought about my grandfather and his perception. The Lipstick Effect is about consumers, in a bad economy, inexpensive products or services to lift their spirits. The title comes from the Great Depression when women bought cheap lipstick in bright colors to cheer themselves up. Outgrowths of the lipstick effect are comparison shopping, same item for same item, and measuring the value of one product against another.
So in this insanely poor economy as a business it is time to wonder how to avail yourself of the Lipstick Effect. My grandfather, a furrier by trade, among other things, sold cheaper bags and hats to customers who needed them for the cold. Since he was selling them fur, politically correct back then, his customers felt good about themselves, as if they were stepping out, for very little money.
To redirect toward the Lipstick Effect, you will need the kind of forward thinking people who can take advantage of modern sourcing and cutting edge technology. But you also need in the mix serious managers who have experienced economic downturns before and are aware of how to roll out products and services that have entertainment and psychological value. Your team must be comprised of both elements.
A thorough preemployment screening program is a necessity. You should be conducting education verification checks as well as professional reference checks, besides the usual criminal background checks and Social Security Traces. Professional Reference checks will better help you evaluate your employment candidate’s skill sets and how he will fit in to your plans.
I guess another way to approach this situation is to think big about the small stuff. And check them out before you hire.