Pity the Foolish Small Business Owner

By: Dan Kennedy on: September 22nd, 2009 10 Comments

Any moron can make money with new media where only little folks play.

But when the big, dumb, brand advertisers arrive – as they have in PPC advertising – the media cost skyrockets and that’s that. This should never be a sudden surprise – or a gradual one, either – to anybody with even small quantities of small business marketing knowledge, historical perspective and common sense.

The Big Lesson is what immature, under-priced media giveth, mature, over-priced media taketh away.

For a while, independent specialty retailers in jewelry, handbags, shoes, spicy foods, even electronics had this space to themselves, so search ads that popped up when someone typed “diamond necklace” or “DVD player” worked.

Now that BestBuy, Zales’ Jewelers, etc. have arrived in those categories, buying with little regard to direct ROI, the price per click on such ads has risen to unprofiable numbers. And that will continue to worsen as even bigger, dumber companies cheerfully pay more.

Google’s not worried. While the small fry search advertisers may be leaving them, General Motors and Wal-Mart are moving in, and that gold glitters brightly to owners of media. Little does Google know how that can eventually destroy your media prices and margins; when a media becomes dependent on a small cadre of giant ad buyers, the power shifts and the buyer sets price, not the seller. The big fish will eventually refuse to pay per click at all and insist on fixed rate advertising – once the small fish are gone.)

But the Bigger Lesson here is NOT about search ads and pay-per-click advertising or the Internet. It isn’t even about the ways of media.

The Bigger Lesson is about the utter foolishness of operating a business (or living) as if things are going to stay the same.

They aren’t.

Not globally, not locally, not in any way whatsoever. Certainly not with whatever means you use of acquiring customers that is generous to you at the moment.

The smartest entrepreneurs I’ve ever known react to something working wonderfully with nearly instant fear and even loathing, as the success is their mandate to urgently seek its replacement for the day when it comes apart at the seams. Worse yet, they are so visionary they can see why and how it will, that others cannot.

If you can’t stand the thought of living with such extreme paranoia, then the only other intelligent option available to you is the one I usually preach: profit from having many doors open through which customers walk, be dependent on none of them. If you now get more than 20% of your customers from any one source or any one ad media or any one anything, you should be very afraid, very, very afraid. And doing something about it, before it’s necessitated by a sudden surprise.

The savvy retailer or restaurant owner who finds he’s in an exceptional location immediately strives to extend his lease for a longer term at the fixed rate or buy the building or buy a building near-by, because he can see the big chains and development arriving to skyrocket rents. (Ask Bill about the financial value of very long leases and getting paid just to leave.)

The company with success in infomercials does what Guthy-Renker did; invests profits in developing non-TV methods of selling the same products; moving from one category to a different one where continuity can be had.

The successful online merchant does as 1-800-Flowers did; seeks success offline. The successful offline merchant, vice-versa. For the smart, these moves are not just opportunistic; they are paranoid. For the real leaders, every celebration is marred by the guy marching around with ‘The End Is Near’ sign observed out the corner of one eye, through the distant window.

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    Dan Kennedy is internationally recognized as the 'Millionaire Maker,' helping people in just about every category of business turn their ideas into fortunes. Dan's "No B.S." approach is refreshing amidst a world of small business marketing hype and enriches those who act on his advice. For more money-making marketing tips, tactics and strategies, go to www.GKIC.com

    10 Responses

    1. Brian Horn says:

      Love Mr. T! Another great post Dan!

    2. Great insight, as usual, Dan. Thanks!

      We have a great group of small business owners here in Chicagoland who have decided to stop being foolish.

    3. I live in Las Vegas. Astonishingly in just the last year, the visible results of business operators closing up shop and running for the hills are everywhere. What they didn’t know what that the recession did not kill them; they committed suicide by not being OUTRAGEOUS in their ADVERTISING.

      Look, everybody has to do things differently now, or DIE trying.

      …and guess what, there is no try, only DO IT!


      Go get you some.

      Happy to help. Email me at hypnatrix@hotmail.com (publish worldwide, I love attention) and ask for gifts. I have some for you.

      Stage Hypnotist Simone
      Las Vegas.
      Go see my Outrageous Advertising Book Contest Video on YouTube. You’ll find it top ranked in YouTube and in Google search results for “Outrageous Advertising Bill Glazer”

    4. Rob Anspach says:

      newspapers got complacent… now they are going under
      or are struggling to adapt to technologies they dont understand

      I’ve seen older companies (those that have been in the marketplace for 50 plus years) lose out to newer companies (less than 5 years) not on price, but on knowing your market better – adapting to the market and using newer marketing techniques (internet, social media, blogs) to capture clientele.

    5. I am reminded to check my limiting beliefs at the door. Las Vegas was hit by an atom bomb. Billions of square feet of retail and office space vacated. 35,000 empty homes–many mansions included. Where did everyone go?– to bermuda with their laptops and internet biz? nnnnnyyyot.

      The challenge may be that, while we positive-minded folk “choose” to not participate in the recession, it still kicks us in the butt.

      That said (and, yes, it’s a limiting belief–transferable or not–for me or you), if we will agree to simply think a little differently, get outside the box, it’s not a giant leap to find other ways of money getting.

      Huge deals are still being made. Many little deals are being made. Money is transfering hands. It’s all just energy. Go get some. Online. Offline. Sideline. New Lines.

      The World is YOURS!

      Stage Hypnotist Simone
      Las Vegas.

    6. Jim Rowe says:

      Thanks Dan for the teachings, I wondered why they started selling these product in retail stores when they were doing so well with infomercials. I also just bought one location as they develop expensive space across the street and sign a long term lease for business #1 at a lower rate because the landlord reads the paper and thought the economy was bad. I would have paid more “Ouch”

    7. Here’s a hot idea you can run with if you want to open or buy a brick and mortar store:

      Consignment Fashions (High End).

      Vegas got hit by an atom bomb. All the retail shops closed and went away. The ones that remain are thinking and acting differently.

      A top success in Vegas is little Consignment Stores that take Designer Brands only on consignment or even buy and sell. These shops could actually double sales with an added marketing campaign in social media, including video!

      Stage Hypnotist Simone
      Las Vegas

    8. Rob Anspach says:

      ” I pity the fool who doesn’t learn social media marketing!”

    9. Exactly what happened to Rubbermaid.

      started selling to Wal Mart, got too dependent on same Wal Mart as single major client with 80% or so revenue dependent on them, Wal Mart squeezed em, bankrupt they went.

      Great Post!

    10. Rob Anspach says:

      walmart has forced many so-called big companies into bankruptcy- I refuse to shop there!

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