Jobless claims lurch to 500,000, time to adopt sale2.0

August 20th, 2010 by

By Pat Hinds,

The jobless rate in the US was up for the third weekly increase in a row. There were 12,000 more claims filed last week over a revised 488,000 the previous week, the Labor Department said. This is a clear sign that the economy continues to settle into the state of “new normal” and should be a motivator for companies to adopt sale2.0.

I have two examples beyond the jobless rate that are a reflection of the economy.

Banks are not Lending

My wife owns some property with her brothers and to maximize the value of the property it needs to get some changes to the zoning. There is a cost to the zoning process; as a result, the family went to the bank to secure a small line of credit using the value of the property and the current rental revenue to support the application. To our surprise the bank did not approve the loan. In any other type of economic environment this loan would have been a “no brainer”, but in the “new normal” environment the banks do not want to take any risks.

The impact of this decision is the property is in a holding pattern; as result it will not be zoned for new development, no new houses will be built, no workers put to work and no new equipment is being bought.

Competition Increases (Globalization)

In one week two American companies have either announced or opened retail locations in Calgary.
Buffalo Wild Wings, the Minneapolis-based company that has successfully mixed chicken wings, beer and sports into one of the Top 10 fastest growing restaurant chains in the United States, is running out of room to expand on its home turf and coming to Canada. On Tuesday, American clothier Brooks Brothers opened its third Canadian location in Calgary — a three-storey retail store as part of the redevelopment of the downtown CORE shopping centre.

These companies are now opening its locations in markets that would be considered small and they are going to use processes, buying power and marketing to put a lot of economic stress on local restaurants and clothing retailers.

Companies to Embrace Change

Companies need to realize access to cash is going to be tight and competition is increasing; now is the time to lower your cost of sales through improved processes, training staff and investing in technology.

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Topics: Sales Consulting