Where are shops finding customers who have disposable income?
Our shop has struggled during the recession, but some shops in our area are flourishing. Where are they finding the customers who have disposable income?
Ron Ipach, President, CinRon Marketing Group
The reality is that in every economy, people are going to be doing well and people are going to be doing poorly. There’s this thing called the Perato Principle with the 80-20 rule. Using it for shops, if a shop owner was to run the numbers, he’d find that it’s pretty darn close, if not right on, that 80 percent of his profits come from 20 percent of his customers. I’m repeating this: 80 percent of your profits come from 20 percent of your customers. Remember that.
The same thing happens with the wealth and prosperity of customers. Even when the economy was great, we had 80 percent of the people saying they had no money. It’s no different right now. There are still 20 percent doing well, and the other 80 percent are complaining.
If a shop owner is only listening to that 80 percent, they think there’s no hope—nobody’s got any money.
It’s not true. Twenty percent of the people out there are ready, willing and able to spend money on you.
I talk with shop owners every day in one-on-one consultations, and I hear so often that “nobody has any money,” or “this economy has hit me so bad so we just have to wait until the economy gets better.”
There’s the real problem: They’re sitting and waiting.
The reality is that I have more clients doing better now than they ever have in their entire life ever since the economy got bad. That’s because they focus on the right thing. When the market gets bad, you need to focus on the stuff that will make you money.
It’s there. It’s just the mindset is all wrong. People need to get out of their way and do something, but they have to have the right information to move forward.