Fear Insurance: How a couple of guys got rich by selling bomb shelters and why I love this economy! By Nathan J. Reis
Just after the banking crisis hit in October of 2008, everyone thought the world was coming to an end. As the crisis peaked, our sales staff of 60 people started hearing a new objection from the field, and nobody knew how to handle it. Now my world was coming to an end...
On a quick conference call with 10 of our best salespeople the feedback was the same. Prospects were saying, "I don't want to do anything because the economy is bad..." I honestly sat bewildered. My company is in the credit card processing business. While we offer great service and a slew of added benefits, our basic value proposition boils down to saving a merchant 20-30% of the cost of accepting credit cards. In a bad economy, wouldn't everybody want to save money? This crisis was made to order for our business and we should have been gobbling up market share. So again, I sat bewildered as my prospects sat on their collective hands immobilized by fear.
"If the economy is bad, doesn't the logical person want to save money?"
Finally, a light bulb went off in my head... I remembered the old "duck and cover" service announcements produced at the height of the 1950's cold war and saw a parallel to the current financial meltdown. You probably remember seeing these announcements... except for the blinding flash of light and footage of nuclear explosions, the message was almost comical by the time I saw them in middle school in the 1980's. School children see a huge mushroom cloud out of their classroom window, and the announcer tells us that preparation is the key to being safe in the event of a nuclear explosion. You just need to know to "duck and cover" in place, and make sure to cover the back of your neck.
Now, I'm not a nuclear engineer, but from what I gather, if I see a bright flash and a plume of nuclear death headed my way, the only thing I'm going to see next is the High Almighty. No amount of "ducking and covering" is going to make the rest of the week turn out okay. I understood this when I was 13 in the 1980's, and I'm guessing people in the 50's and 60's understood it too. But, they were scared, and more importantly, they felt helpless against the threat of a nuclear attack.
As ridiculous as they were in hindsight, the "Duck and Cover" announcements restored a little bit of our sense of control. There was something we could do, and everything would be alright. But then, along came a couple of marketing geniuses.
I saw evidence of this genius when I was growing up in rural Wisconsin. We had a concrete igloo in our backyard. I did a little digging and it turned out a few of my friends had Igloo's at their places too. Growing up I thought it was the coolest thing. All the kids had their own little forts, and we could play Eskimo, G.I. Joe, and whatever else was cool at the time. It wasn't until I saw the "Duck and Cover" announcements that I realized my Igloo wasn't for playing G.I. Joe, it was a bomb shelter for the day Armageddon came.
Now, I mentioned before that I'm not a nuclear engineer, but in the event of a nuclear war, that thing in my backyard growing up might as well have been an igloo. The last thing I want to do is try to avoid the grim reaper by cooking myself in a concrete oven, and then wake up the next day to nuclear fall out followed by a slow death by radiation poisoning...
And that brings us to today. The past year hasn't been much different than the 1950's nuclear threat. If you watch the news or read a paper, you'd think the world has come to an end. Our economy is on the brink of disaster, we're in a recession, everybody's home is being foreclosed... And people are immobilized by fear because they don't know what to do and how to regain control.
So I asked myself, "Were these Igloo guys really selling bomb shelters, or were they selling something else?".
People weren't buying shelter, they were buying "Fear Insurance"... Buy this, and you don't have to be scared anymore... I repeat, "Buy _________ and you don't have to be scared anymore..."
After telling this story I asked one of my sales reps to please help me with a rebuttal to our prospects fears. He blurted out "So, we're throwing in a bomb shelters with every credit card machine... How does that work?"
His line earned him a chuckle, but it's closer to this: "I'm calling you today because of the recent financial crisis. Purchase my widget, and you are taking the best steps available to insure yourself against these unpredictable times. Great businesses take decisive action in a crisis, and now is the time to take action."
