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Monday
Sep212009

Marketing Nothing

I remember having a conversation with someone in the 1980s. I think the conversation arose out of the fact that I was producing a handmade product, which was becoming increasingly rare.

I can’t even remember who the person was, but I clearly remember what he said. Referring to The United States, he said:

“We will eventually become a Nation of People producing nothing; just selling insurance to each other.”

It seems to me this prediction looms ever closer to coming true; but by now the terminology has changed. No one is “Selling” anything anymore; it is now called “Marketing.”

The problem is whether you are selling or marketing, it only works if people are buying, and in today’s economic climate people do not have loads of spare cash lying around to buy much of anything.

Now the world is full of “Marketing Gurus.” These are people who can no longer make a living by selling stuff, because no one is buying. So now they are selling nothing more than an idea, that you can make a ton of money selling or marketing on the Internet.

Ask yourself this: If I found a way to make a lot of money, would I need to sell that idea to other people? No, I would be too busy making money.

There is an old story about a man in his neighbor’s garage when he notices a large amount of boxes containing cleaning products. He remarked, “You must sell a lot of cleaning supplies.”

The neighbor replied, “No, but the man who sells me this stuff, he sells a lot of cleaning supplies.” It is the Internet Marketing Gurus who are making money, not the poor suckers who buy their idea.

Over the years I attended my share of sales seminars, and read many books on the subject. What always troubled me was the messing with people’s minds, to convince that they needed what it was you were selling.

Often it was borderline trickery to convince them that having whatever it was you were selling would make them happier, and their lives better, than holding on to their hard earned cash. Although not illegal, it somehow seemed to me to be morally wrong.

Profit is not a dirty word, however, greed is. This whole mess we find ourselves in now was brought about by greed. People producing nothing and selling nothing tangible; just an idea that people could keep buying and selling real estate loans to make money.

Companies and corporations need to start thinking about the people who work for them as well as their bottom line. Is it really necessary to lay people off and send jobs overseas?

Okay, so your product may cost a little more, and you sell a little less. But there are always people who will pay the extra for a quality product, and some because of the fact it is home produced. Downsizing and cutting back on some employees is better than firing everyone and sending the entire production offshore.

I always bought British made automobiles when I lived in the UK; when I moved to the US I bought American. It is something I have always done on principal.

When I had my bike business I was competing head on with the large Italian bike builders, who would send over in one container shipment more than my entire year’s production. But I was able to compete because I didn’t have the shipping and wholesale costs that they had.

I didn’t have their advertising costs of my large competitors either, because I only needed to sell a fraction of what they did.

I think the good thing that will come out of this recession is that people will become used to getting by on a little less. They will live simpler lives, less dependent on all this material stuff.

And the people listening to these Internet Marketing Gurus, because it seems the only avenue open to them. Think again; they are selling nothing but an idea. False hope, or worse, a scam that will take what little you have, rather than make you money.

You cannot produce nothing and sell it indefinitely. What is needed is people producing worthwhile products, or providing worthwhile services that other people need. Provide that and the marketing will take care of itself.

 

Reader Comments (11)

You've sold me on that idea Dave, whatever it is. Where can I buy more like it?

September 21, 2009 | Unregistered Commentermike dimmock

For an interesting outlook on capitalism look up Minsky Economics, the man was brilliant, underrated and hit the nail on the head.

Unfortunately too many people shop price only which leads to:

"They know the price of everything but the value of nothing" and "There is scarcely anything in the world that some man cannot make a little worse, and sell a little more cheaply. The person who buys on price alone is this man's lawful prey._John Ruskin

I am one of the ones in Dave's corner. I am perfectly willing to pay a fair price for a quality product, rather than fill my house and life with cheap products from the lowest cost producer. I posses a lot fewer things that way, thus leading a less cluttered life.

Aaron

September 21, 2009 | Unregistered Commenter2whls3spds

Another thought-provoking article. The UK doesn't manufacture much anymore either.

September 21, 2009 | Unregistered CommenterStephen

Well this only goes to prove once again that great minds occupy the same rut.
Which is supposed to be funny.
I could not agree more Dave. It seems this country produces war products and pornography and little else. Yet, whenever we try to push through a "buy american" piece of legislation it gets put down as ...somehow...anti-American.

September 21, 2009 | Unregistered Commenterskylab

Great post. The U.S. is well on it's way to producing nothing, if we're not there already. The economy appears to be based on smoke and mirrors and as we all know - the magic show has ended.

I've provided IT support for two different manufacturing companies over the years (and now for a large retailer). I've watched the manufacturing areas turn into storage areas after production was moved to China. Did it make business sense? Yeah, I guess so - otherwise why is this so common? Did the companies lose "something" along with the change? Sure - without a doubt.

Should we all buy products made in the U.S.A. just because its made here? Of course not. But we should buy quality items made in the U.S. - provided we have that choice. It gets harder and harder to do that. What percentage of goods are still made in the U.S.? It must be amazingly small. I buy stuff based on the product itself, not where it was made. When it comes down to it, a lot of times, a U.S. version doesn't exist. True?

Economic genius I'm not - but I refuse to believe you can't make quality goods here in the U.S. at reasonable prices. Many people would buy U.S. goods if given a fair choice - me included.

As far as marketing - good products don't start with a marketing idea. The marketing is byproduct of the product itself. I've always considered bicycles a good thing - they go beyond being a "product". If used, they truly improve a persons life, so any "marketing" is for the good. Being a cyclist, of course I'm biased.

But compare marketing and selling bikes - against bottled water, $300 jeans, $2000 hand bags, etc. See what I mean?

Thanks for reading my little rant - here on your great blog.

September 21, 2009 | Unregistered CommenterDan O

Dave,

Let me step back to your previous post and use a regionalised term- snake oil salesman. That sums up the practices you describe to a tee. I knew a woman desperate to improve her lot, went to all the get rich quick seminars, only to be poorer after each one. Guess who got rich?

Now then, allow me to pass on my own observations on the business model. There are but two types of business, goods and services. I have been involved with the later for many years and yet what service is provided, it is really irrelevant. The service must be of quality and at a reasonable price. Herein lies the paradox that management places us into, quality versus quantity. New companies often excell on quality but as they mature, more emphasis is put on quantity at a given cost so as to satisfy the shareholder. This is the Achiles' heel, becoming the downfall of the company when the original service is compromised in the name of efficiency. <soapbox> There is a middle ground as long as management is drawn from within and not from the hallowed schools of snake oil salesmen and bean counters. Quality before quantity!

September 22, 2009 | Unregistered CommenterJim

There is more to the subject of sales vs marketing than just taking peoples money. I absolutely agree that a majority of the problem with our economy was caused by greed at all levels of the food chain. Having been a marketing "guy" running the info tech operations at two of the largest aerospace companies in the US for the last 25 years I have seen my share of layoffs attributed to outsourcing jobs overseas. And my largest concerns have been the loss of our intellectual properties, our edge on technology, as well as, the loss of american jobs. When we decided to outsource application development to India I had to layoff several hundred people and these were good paying jobs in the 50K to 90K range. Over 50% of the code that came back had to be reworked. And as we all know it costs more money to have to do a job twice than if it was done correctly the first time. I went the marketing route instead of business admin through post graduate education because of the psychological aspect of understanding what drives people to act and make decisions as they do. Marketing is about understanding what the consumer is more likely to buy based upon "price - value relationship," the need for the product, the most likely demographic of the products intended market, the products competition, the life-cycle of the product, emerging technologies, packaging of the product, and on and on. To me these people doing infomercials or internet get rich schemes are not marketeers they are as someone said above "snake-oil-salesmen" preying on the hard economic times and also the greed of those who do not want to work hard and reap the financial benefits of that hard work. I can go on and on about this subject as it is a very interesting one to me - but I will save you all from the fire and brimstone of what's wrong with our current economic situation.

Let me just finish with my simple view on getting the US out of its current recession and building a sustaining economic environment for the future.

Stop the bail outs and stimulus packages to the top of the economic pyramid - this is just a bandaid on a bullet wound. Recovery will only work if we get the people back to work with good paying, secure jobs. Our economic turnaround MUST be built from the bottom up, giving the american worker the ability to purchase goods and services with the purchasing power he/she has earned. Bring back to america the jobs that have been outsourced over the past two decades. Safeguard our intellectual properties - what's left of them. And finally keep government on a short leash when it comes to regulating our free enterprise system. I know I am not the first to present these simple principles for economic turn around but the more often we share the more often we grow.

September 22, 2009 | Unregistered CommenterTim - the Fuso MTB guy

Dave,

I think the more intelligent of us know why exactly we should keep away from such "guru" marketing material. But its when the middle man comes and tell you to read them which is even more pathetic.

One of the reasons I lost my job with company X in the economic downturn was because I had a huge problem with company X's management who were trying to shove down the bestseller "From Good to Great" by Jim Collins down everyone's throat, asking them to read it and mug up its concepts to prepare for a discussion. I took that book and basically critiqued from head to toe, the nonsensical research its first chapter was polluted with and warned people not to believe in fairy tales. Top management didn't like it so sooner or later, it was 'goodbye employee' to me.

The people who like to read such material and endorse them are the ones who hardly have any time themselves to understand the complex world of business. While I don't' care what they want to believe in, its when they force you to read and believe in such whimsical terminologies and "success formulas" that really bugs the hell out of me.

September 23, 2009 | Unregistered CommenterRon

"Okay, so your product may cost a little more, and you sell a little less. But there are always people who will pay the extra for a quality product, and some because of the fact it is home produced."


If this were true, Wal-mart wouldn't be the largest company in the world.

People want a bargain, whatever the ultimate social and environmental cost.

September 23, 2009 | Unregistered CommenterTireux de Roche

I discovered this blog about two months ago and I have read it on a regular basis ever since. One of the reasons that it has held my attention is that I feel the opinions are well thought and for the most part fair. This entry is no exception.

However I do take exception with one part of the argument. Specifically the part “Often it was borderline trickery to convince them that having whatever it was you were selling would make them happier, and their lives better, than holding on to their hard earned cash.

This implies that people are victims of marketing when in fact they are in most cases complicit. Turning on the television, or the radio, or getting on the internet is a choice—not a requirement. Subscribing to a magazine or a newspaper is a choice. You have to invite all of these things into your home.

I have been in marketing/advertising ever since I graduated from college which is now just over 20 years ago. I’m not nearly as happy with my career choice as I was then for many of the reasons you mention, but I stay in this business because; 1) It’s the best way that I know to provide for my family. 2) On occasion I am able to apply my skills to a good cause. 3) I take solace in the fact that people have a choice when it comes to consuming mass media and exposing themselves to marketing.

If after a couple of years of not saving any money, racking up credit card debt, filling up their closets and expanding their waistlines people can’t seem to figure out that they shouldn’t scratch every itch, then I have little sympathy for them. Self control must be learned or external forces will define your world for you.

As your blog entry suggests I have been paid handsomely for my services to help companies market their wares. In the last 10 years I have earned well over six figures a year. Instead of having the trappings that many people think would go along with such earning power, my wife and I choose to live a modest life style. She drives a ten year old car that cost less than $30,000 when we bought it new. I drive a 40 year old pick-up truck without air conditioning in one of the most miserably hot climates in the U.S. There isn’t a flat screen TV in our house. We didn’t even have a home computer until 2003. And when we bought our house, we took out a mortgage that was 40% of what the bank told us we could afford.

All of those choices were ones that we made and we take responsibility for them. Others should take responsibility for their choices as well. They make a choice to turn on the TV and then another choice to go out and purchase the product that was advertised to them.

Years ago while I was on a vacation in Portugal I visited Cabo de Roca—the western most point of the European continent. I was a bit surprised when the cape had sheer cliffs but no railing or fence as there would be here in the states. Apparently several times a year a careless person will wander too close to the edge and they meet their untimely demise. The authorities there refuse to erect a barrier though because they don’t want to ruin the natural beauty and, save for a few individuals, people manage the situation just fine. If someone is careless enough about their exposure to mass media—and the marketing forces that come with it—and they don’t have any self control—and they wander off the edge of the financial cliff then it’s an event that came about of their own decisions. Unlike the people who stepped off of the cliff though, it’s not too late for them to change their habits.

September 24, 2009 | Unregistered CommenterMatt

Hey Dave,

I've been reading all your archived blogs. Based on what I've seen and from this post I think you might like these lyrics from the Avett Brothers talking about how our obsession with owning things here in America is a real problem that doesn't bring happiness.

"Cause blue birds don't fly without their wings
And when we put them in a cage the world can't hear them sing
So selfish when greed sets in
Possession, the king of sin"

I'm also wondering if you still regularly check Ebay and have seen your frame that is currently for sale. It is apparently the first Dave Moutlon frame built, and its starting price is $2,500. I know in the past you've said you would want your bikes to be ridden and enjoyed. But as much of a following as you have I'd be surprised if someone who wanted to ride would spend that much money on one of your frames. I guess you have truly reached the point of collectibility.

heres the link: http://cgi.ebay.com/dave-moulton-fuso-serial-001-/140432311793?cmd=ViewItem&pt=Road_Bikes&hash=item20b26b05f1

July 31, 2010 | Unregistered CommenterMitchL
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