In most any market, following the laws of supply and demand, a sale does not occur until we have both a willing seller and a willing buyer.  In short sales, however, a willing buyer and seller are not enough.  For a short sale to proceed, the seller’s bank must approve the deal after the buyer and seller have agreed to the terms.  Let me describe a recent sale to illustrate my point.

After the house had been on the market for 6 months with another company, the seller approached us and asked if we could help.  The short sale situation was pretty clear – the seller’s income had gone down significantly, he could no longer afford the house, and he was behind on his mortgage payments.  The value of the house had declined with the market, making it impossible to sell the house for a price that would cover the mortgage payoff.  We listed the house for sale and immediately began working with the lender on a short sale.

That spring we got a good offer from an interested buyer and put a deal together for the bank.  Not one of those “let’s offer $150,000 for a $700,000 house and see what happens” offer, but a good, solid offer, about as good an offer as you could expect for the market conditions.  The buyers were qualified, serious, and the price was good.  The bank said “no,” and refused to even give a counter offer.  The buyers did what most people would do – they bought another house.

The months passed, and the real estate market continued its decline.  That fall another serious buyer came along, with another good offer.  It was $45,000 below the spring offer, but right in line with the current value of the house.  Again, the bank said “no.”

By the next spring, the bank had not received a single mortgage payment in over 19 months.  The third offer came around that time, but this one was a real low-ball.  This time the bank made a good decision when they said “no.”  A short time later, the fourth offer came in, exactly $100,000 below the first offer from last spring, and the bank finally took the deal.

We could talk about the wisdom of the bank clerk 3000 miles away that made the decisions to hold on to the house during the entire price decline, and then sell only after prices stabilized, and we could talk about how badly the banks needed our bailout money, but this story is not about one house.  It’s about the market in general.  More and more, banks are finally letting go of their short sales and foreclosures, clearing out one of the final obstacles to recovery.

The vacant house gets painted, cleaned, lived-in, and cared-for again.  Flowers get planted, furniture gets purchased, and people get invited over, buying a bottle of wine as a gift on their way over.  One by one, in neighborhoods and cities across the country, that’s what pushes the economy back to recovery.

I was affected by this recession just like everyone else.  I experienced reduced sales, reduced income, evaporating profits, higher debt ratios and business losses.  In one case, the losses were enough that I chose to close one of my businesses.  These are not the sort of things I enjoy.

Most mornings I get outside, before the heat gets too intense, to excercise and meditate.  As a regular part of this ritual, I spend some time deliberately focusing on things that I’m grateful for.  Usually its things like my wife, my family, my health, the resources available to me, the friends and mentors in my life, my success, my business.  This morning, as I was going through these things in my mind, really feeling the gratitude growing inside, I started thinking about the recession.  I don’t know where it came from, but as I started thinking about all of the positive outcomes I’ve seen as a result of this recession, I realized there was quite a bit to be grateful for.  Here’s how I started my list.  What am I missing, and what would you add to this list?

I’m Grateful for this Recession because…

1. it prompted me to re-evaluate my priorities, giving me a clearer sense of which things are most important in my life, and helped me to re-focus on those areas.
2. it forced me to look for new opportunities in new places, opportunities I would never have seen otherwise.
3. it gave me a greater appreciation for what I have achieved.
4. it made the weaknesses in my businesses quite apparent, so I could address them.
5. it provided the stimulus I needed to learn and grow in areas where I had become complacent.
6. it reduced the competition in the marketplace, providing greater opportunity than before.

“Every adversity, every failure, every heartache carries with it the seed of an equal or greater benefit.” ~ Napolean Hill

I want you to think back to the spring of 2006. Imagine yourself going back in time. Before the election, before the recession, before the bailouts. Now imagine, in 2006, that you need a new bank. How do you choose one? For some people, it’s the convenient location of the nearest branch. For others, it’s the friendly, personal service. Maybe for you the extra half percent they offer on their savings accounts, or the number of branches in town, or the interest rates on their loans, or their ability to approve your loans is more important. Whatever it is, you have a specific strategy you use, a set of criteria, to choose which bank you do business with.

In fact, you have a list of criteria, somewhere in your mind, ranked in order of importance to you. When you choose a bank, you might only pay attention to the number one most important item on that list, while others might use the top 3, 4, or 5 criteria.

As I listened to the radio back in 2006, I heard a lot of commercials for local banks around town. Most of them, as far as I can remember, had something to do with mortgages or home equity loans. For example, a home equity loan from our bank can put your kids through college, or get you that boat or vacation you’ve been wanting. In other words, a loan from Bank X can make your dreams come true.

How would you have reacted to a commercial for a bank that basically said “let us take care of your money, so you know it will be safe.” I you’re like most people, the criteria “A safe bank that is not at risk of going out of business soon” was way down on your list, like number 462. Back in 2006, everyone thought every bank was so safe that most people never even considered the possibility of a bank going under.

Even in early 2008, when the Federal Reserve stepped in to help prevent Bear Sterns from collapsing, the average American paid little attention. It wasn’t until October that everything changed, when the effects of the recession were front page news every day, and the President of the US announced a $700 Billion bailout package. That’s when every Joe and Jane in the US suddenly realized just how serious the recession was, and how real the risks facing American businesses were. That’s when every American consumer started re-prioritizing their list.

If you were choosing a bank at the end of 2008, your most important criteria was probably the stability of the bank itself, and therefore, the safety of your money. The extra half percent interest you looked for a few years ago was not important anymore. So what happens when Bank X continues to advertise that extra half percent interest?

In early 2009, I heard a new commercial on the radio for Suntrust Bank, unlike any banking commercial I had ever heard. The entire commercial was build around a single word – SOLID. Someone at Suntrust was obviously paying attention. They knew that their typical customer, now filled with fear about the economy, had re-prioritized their list. Potential customers were using a completely different criteria to choose a bank, which rendered Suntrust’s old commercials, as well as every other bank’s, completely irrelevant. “Suntrust – Live Solid. Bank Solid.” The implied message, always more powerful than a message stated outright, cuts right to the center of the consumer’s fear. Suntrust figured out what was relevant to consumers TODAY, updated their marketing message accordingly, and moved ahead with a very successful marketing campaign.

So how do you keep up with your customers’ purchasing criteria, and when do you change your marketing? Just ask your customers. Run surveys regularly. Pay attention to what they say, and more importantly, what they do. If a marketing message is performing well, and providing a nice return, don’t change it. If it lasts for 20 or 30 years, and keeps working, great! When it ceases to work as effectively as it should, find out why. Measure the criteria people are using in the current market, and update your message accordingly. If your message does not address at least one of the top three criteria people in your target market use to choose your product or service, then don’t waste your money advertising that message. Make every advertising dollar count.

After looking at dozens of businesses and talking with their owners, I saw a particular “economic” situation far too frequently. These businesses were struggling with reduced profits, or in some cases serious losses, due in part to a steep decline in sales. In every case, the owners told me this decline in sales was due to the economy. That’s where they’re missing the boat. What’s more, it’s the unspoken implications of this statement that make it so dangerous.

Let me ask you this. If your business has, say, a 3% market share in your region, and you maintain that same market share while the overall economy declines, then you would expect your business to decline, right? If the economy in your region, and in your industry, declined by 22%, and you maintained the same 3% market share, then I would expect your business to decline by 22%. And if the business in this example did decline by 22%, then it’s fair to say that is due to the economy. It’s fair, but still dangerous. More on that in a minute.

So what if your business, in this example, declined by 48%? It’s very simple. If the sector of the economy that your business serves declined by 22%, and your sales declined by 48%, then you did not maintain your market share. That means that more consumers are choosing to buy from your competitors instead of buying from you. You lost more business than the overall economic decline, while at least some of your competitors lost less. As the economy got worse, they offset all, or at least some of their losses by increasing their market share, and they accomplished that by taking it away from you.

That’s why blaming the economy is so dangerous. “It’s the economy” means that this situation is not your fault, and implies that there is nothing you can do about it. It’s a great excuse, but oftentimes hides the real problem – your declining market share. Your 48% lost sales breaks down to 22% due to the shrinking economy, and 26% due to lost market share. Lost market share is always a competition problem, not an “economy” problem. And you can ALWAYS do something about a competition problem.

So what can you do about it?

• First of all, stick to the facts. If you don’t know what your market share is, and you don’t have any facts about the economy in your industry for your business’ region, then admit that you have no clue regarding how much the recession is actually affecting your business.

• Recognize that some things, like the economy, are not under your control, and stop worrying about them.

• Recognize all of the things in your business that are within your control. Take some time out, and brainstorm a list. Write them down. What is under your control, or at least subject to your influence? Your attitude. Your work ethic. Your marketing message. Your position in the marketplace. Your branding. Your market share. Your product line. Your diversity. (You can take it from here, right?)

• Take an honest look at why you’re losing market share, and fix it. If you can’t be competitive, in any economy, then you won’t be in business for long.

• Being competitive doesn’t mean simply lowering prices, although that may be a part of your strategy. Don’t forget about lowering costs, renegotiating or partnering with suppliers, adding value, diversifying, etc. You still need to make a profit.

• Recognize that there is always opportunity in the marketplace. It might not be the same opportunity you’re used to serving, but its still opportunity. There were more millionaires created during the great depression in the US than during any other 12 year period in our history. Your job is to be open to it.