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Increase Your Market Share–Invest in the Poor

October 13, 2008

Laura reminded me the other day that millions upon millions of Americans are barely affected by the recent collapse of banks and stock markets–America’s poor.  For them, Recession is Life.

Read this carefully:  one-third of America’s households (39 million) exist on less than $30,000/year. Less than half of them own houses.  They don’t have retirement accounts.  Credit, investments–are you kidding?

But they still consume.  They have to eat, clothe and educate their children, transport to work, buy school supplies and birthday presents.

One-third of America.

And unless you’ve been doing it intentionally, you likely haven’t targeted the “working poor” or any kind of poor.  But even though the poor are plenty plentiful, most businesses build their models on the abilities and preferences of the middle class and the rich.  They leave the poor for the non-profits, churches, and government.  Neat, isn’t it?

Question:  if you want to make your business recession-resistant, where do you go?  I say, invest in the poor. Invest in making their lives better and increase your market share while you are at it.

During a recession, it’s the middle class that slips into the domain of the the poor.  When they drop “below the line,” they learn to navigate like the poor have been navigating for years.  They go where they go, consume where they consume, buy what they buy.  They learn about dollar stores, consignment shops, libraries and Aldis grocery stores.

And now, like during any recession, is the time to increase market share.  Don’t hold back.  Invest.

Know what Dollar General–the nation’s largest retailer–is doing right now?  Answer:  running a contest that will give $1 million to the grand prize winner–$1 million–plus tons of other prizes, and all the while touting savings, great selection, affordable every day prices, and at least a million reasons to keep coming back into their 8350 stores.  After the recession they will likely have convinced millions of new customers that Dollar General is a better option than Wal-Mart for consuming, even in the good times.  If they can get their current customers to spend one less dollar a week at Wal-Mart and spend it at Dollar General, they have won.  And that doesn’t count new customers from the sliding middle class.

So what is your company doing?

  • Are you finally releasing that inexpensive version of your widget so the poor can now have it?
  • Are you re-doubling efforts to move your products into the extreme discount channels where the poor are?
  • Are you attaching your company heart and name to the organizations that the poor rely on–like Habitat for Humanity or Second Harvest Food Bank?
  • Are you creating promotions that actually help the lower economic classes and minorities?

It’s a recession.  Throw out your strong-economy models and go make a difference.  Diversify your portfolio:  create stuff for the rich; create stuff for the poor.  Become recession-resistant.

Go make more than stuff for the middle class.  Make a difference.  The money will follow.

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2 Comments leave one →
  1. heldengalerie permalink
    October 24, 2008 2:05 pm

    I really like your view point. I am in the process of starting building a Non-profit it is named “Helden Galerie” The idea is to sell donated fine art photography allowing the photographer as well aas the Art Buyer to direct which charities get the a split of 50% of the proceeds from the sale of each Image. 25% to the charity or non-profit the photographer chooses and 25% to the charity or non-profit the Buyer chooses.

    “Helden Galerie” is entered in the Google, Project 10 to the 100th contest. we a not relying on being chosen as on of the winners as even with a good idea it may be easier to win the lottery. So we are going forward searching out photographer who will donate Fine Art Photo Images. We are in the process of registering as a non profit corp. A web gallery is being designed.

    http://www.project10tothe100.com

    Although our main customers will be middle to upper class & corporate buying power. I believe the the tax write off and the PR opportunity for something they are buying anyway will bring them to “Helden Galerie”

    “Helden Galerie” will also be a grate tool to inform the general public about the more obscure charities and non-profits and there missions.

    Will you help by mentioning “Helden Galerie” on you blog. Will you write something on the “Helden Galerie” blog. It only takes a few minutes and a few words to become a Hero. Oh and by the way “Helden Galerie” in English means “Hero’s Gallery”. The name was chosen because each person photographer, Art Buyer become Hero’s simply by doing what they love to do.

    I also consider everyone who supports “Helden galerie” with comments to be a Hero.

    Peace & creativity to you.

    Christopher St. John
    Founder,”Helden Galerie”
    “The Art of Compasion.”
    http://heldengalerie.wordpress.com/

  2. November 9, 2008 7:58 pm

    Damn, Brother Dave, things have gotten mighty big since my last visit, almost Broadway revival of My Fair Lady big (or whatever else might qualify as big: certainly not Plantless Led Zep reunions, let’s hope). ANYWAY, though not poor, I must agree with my eminent sister’s observation. As I watched all the brouhaha a while back and began researching beyond all the sound-byte and/or standard mentality, my less than compassionate for the rich part of me kept thinking, ya know, for a lot of y’all out there, it’s a “privilege” to be recessed. Most of us cannot afford the privilege. It didn’t help my deliberations and attempts at openheartedness to watch the Wall Street marketeers flop and lurch in the mosh pit of their own making. It has always boggled my mind that a pit full of humans yelling and flapping arms (in the old days) could in any rational way have anything to do with a sane and guided market. Digital age version no better, it would seem. Invisible hand, indeed. Invisible head, mayhaps.

    But, as to Consequential Value: beautiful weather in the Sign of Scorpio. Now, there’s CV for you, and the only flapping arms should be ours, as we fly into that gorgeous blue.

    Happy Birthday Month to you.

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