Consumer Confidence
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As we are now embroiled in a major economic recession, we are
hearing a lot about plant closings, worker layoffs, restructuring of companies,
tightening of credit, and government stimulus packages. But as you listen to the
news and talking heads on television, everything seems to come back to "consumer
confidence" or the lack thereof to purchase anything. It appears our disposable
income has been disposed of. I don't hear anyone addressing this problem, so
I'll take a shot at it. I may not be an economist, but as a businessman who has
been around the block a few times, I would do the following:
First, the consumer wants confidence that the companies they
buy from will stand behind their products; that they will be there tomorrow.
This means companies have to do some soul searching and manage themselves
better. In other words, take out the bloated bureaucracies, eliminate the
inflated salaries and greed, become more organized and systematic in their
operations, and offer products at reduced, yet fair, prices.
Companies also have to learn to adapt to the needs of the
consumer, not the other way around. Perhaps the best example of this currently
is the Hyundai Assurance program whereby the company advertises, "to show
you the faith we have in you. Right now, finance or lease any new Hyundai, and
if in the next year you lose your income, we'll let you return it." There
are, of course, restrictions to avoid abuse, but it's a sharp idea and consumers
are beginning to flock to them.
It is time for companies to challenge the marketing status
quo and, like Hyundai, devise new programs that will turn the heads of the
consumer. Companies can ill-afford to conduct business as usual.
Second, the government has a role here as well, but I balk at
the stimulus package being proposed. People do not need pseudo "make work" jobs
created by and for the government. Nor do we need more checks from the
government which will primarily be used to pay off existing debts, not
necessarily to purchase new goods. Instead, they want tax credits that support
their way of life, like financing homes and sending kids to school. I realize
such things already exist, but the government has to become more aggressive in
such programs to allow the consumers to save a buck or two. Wouldn't it be nice
to see the government encourage the saving of money as opposed to spending it?
Even better, to invest it in key companies who are trying to conquer our energy
crisis, or who perform medical research, or help the environment.
If you really want the consumer to have "disposable income,"
arrest inflation NOW! Government can do a lot for companies by simply leading
them with a carrot and stick. Give tax credits to companies as incentives to go
in new directions, such as research and development, or for companies who
promote job security, for companies who help curtail the rising cost of living,
and for creating real and meaningful jobs. In other words, reward companies for
better management.
Third, the consumer has to learn to regain his own
confidence. Instead of waiting for someone else to bail us out, we need to
develop an entrepreneurial spirit and take the bull by the horns. Confidence
begins in the mirror, not in our government.
Such is my Pet Peeve of the Week.
Note: All trademarks both marked and unmarked belong to their
respective companies.
Copyright © 2009 by Tim Bryce. All rights reserved.
About the Author
Tim Bryce is the Managing Director of
M. Bryce & Associates
(MBA) of Palm Harbor, Florida and has over 30 years of experience in the
management consulting field. He can be reached at
timb001@phmainstreet.com
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Article Published/Sorted/Amended on Scopulus 2009-02-22 11:44:12 in Economic Articles
