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The opinions of the employees of s You are personal.
Almost a decade ago, a strategic leadership writer named Chunka Mui said, “Customers don’t know what they want.” The columnist quoted Apple CEO Steve Jobs as saying, “Often people don’t know what they want until they show it to them.”
I add a conclusion that has become crucial during this pandemic: “Often people don’t know what they have until they show it to them.”
In my case, although I don’t make the latest generation computers like Steve Jobs, I help people get out of debt. Due to dealing with many Americans who have spent too much on iPhones and hundreds of consumer goods, I dare to say that I have a perspective that Steve Jobs never had.
Debts are paid
In December I wrote for Forbes about my predictions for the next recession. He was not optimistic about the Americans’ chances of coping with another recession, and that was only a few months before the pandemic.
“If you add up the debt of an average American with no mortgages, that’s the sum: $ 29,800.”, I have written. “Worse, 12% of Americans always pay the minimum on their credit cards, which of course means they’ll go into more debt every month.”
You don’t have to be an auditor to know that this means trouble. Eight weeks later, however, a Gallup poll was titled: “Record for Optimism in Personal Finance in the US”.
“About three in four American adults (74%) predict that they will be financially better off within a year. This is the highest Gallup trend since 1977,” the survey said.
Record debt and record optimism. You could repeat one poll after the other, showing that Americans are in debt but have only doubts about it and no deep concern. Another example: In March 2019, Experian reported the following:
“When the US economy entered its eleventh year in a row, consumer confidence was almost at a record level. At the same time, debt rose, surpassed the pre-recession level, and peaked. Historically.”
If that’s certainly bad for consumers, it’s even worse for business owners.
What this means for business
At the moment, consumers are behaving like smokers who survive a heart attack and promise never to smoke again. But a few months later they smoke again because they can’t resist the temptation.
So when you listen to your customers now, you make decisions based on your fear of making smart purchases. After a few months, however, they will again benefit from cheap long-term loans. You will shop again soon.
This worries me because if your customers are bankrupt you can offer them loans. But at some point the calculation expires.
I’m a CPA, not a sociologist, so I don’t know exactly what would change our culture financially. All I know is that recessions, terrorism and natural disasters have not affected the way most Americans handle their money. I doubt that this pandemic will have more than a short-term impact on your spending habits.
You should definitely change your tactics at short notice to explain the catastrophic recession we are already in, even if it is not yet official. However, this will also go away, and Americans will reuse their credit cards to meet the needs of their consumers.