How to Become #1 as a Result of This Financial Downturn

You, me, and every artist on earth is wondering the same things right now. How do we survive this virus shutdown? How do we survive this economic downturn?

Today I’d like to suggest some ideas you may want to consider. I have had the benefit of surviving three recessions before this one (whether this is a recession, a depression, or a temporary downturn). Survival was not easy. But I came out on the other side ahead. Here are a few ideas. I’m sure I’ll have more later.

Be smart. Don’t close your doors for business.

I’ve been in the media business (mostly radio and TV) for decades, and I have deep experience in this. Though you want to react, if you overreact, you’ll be out of business forever. I’ve probably seen it happen to a few dozen companies. If you’re selling art, you as an artist are a businessperson or a company. The same things apply to you. Let me explain.

The first thing we all do when there is no money coming in the door is trim expenses. It’s a must, of course. Yet when I held a company meeting this week, I outlined what we were going to do and not do. One of the things we’re not going to do is turn off the income faucet.

Few people understand that the income faucet is their lifeline. This faucet may not have as much “water” coming out as before, but if you turn it off, there is no water at all.

The income faucet is marketing and advertising.

I’m sure you’re thinking, “Of course you’re going to say that, Eric, because you’re in the magazine business.” No doubt. But I’ve lived it, which is why I told my team we’re making cuts in all areas, but we’re actually increasing advertising.

Why? Why increase advertising and increase risk?

I’ll give you two gallery examples. I’ll not mention names, but you can figure out who they are if you know galleries from around 1998, when another big recession hit.

Gallery A called me and said, “We have to cancel our advertising. Things are really bad.” I talked to them about the income faucet, but they cancelled their ads with us and everyone else. They also stopped all other forms of marketing. They stayed open, but that was it. About six months later, they announced bankruptcy and eventually disappeared.

Gallery B called me and said, “We’re starting up a new gallery and we want to buy a bunch of advertising. Several pages in each issue.” Within one year they became one of the top galleries in America, and they still are.

One day I had lunch with Gallery B’s founders and asked what their strategy was at the time. What they told me was something like this: “I’ve studied recessions and what happens to businesses because I was a business consultant. We knew we were going to start a gallery, we had our artists lined up, but we wanted to wait for the recession to start. I knew all our competitors would stop advertising. And I knew that though their businesses were soft, they would still be selling art because rich people always buy. They buy less, but they keep buying.”

He went on, “But I knew if they did not keep advertising, they would soon be out of business — and there were about eight big galleries that went under. Had they kept spending in advertising and made deeper cuts elsewhere, they would have survived. Instead, they handed their customers to me.

“I was advertising, and even though I was new, I looked strong because we had big ads, in some cases several in a row. And I stood out because there were not as many people advertising. I started hearing from customers, sold them art, and they were then on my list. I’ve sold many of them millions in art over the past years, and we’re now their go-to gallery. This is exactly what I was counting on.”

As I probed deeper, he told me he did not buy wide, meaning he didn’t buy in six or 10 publications, but he bought deep in about three. In his case, he picked my magazine Fine Art Connoisseur because he knew we had lots of ultra wealthy readers, and a couple of other publications. He told me, “Always follow the money.”

I have a saying I use in my marketing classes for artists: Always stand in the river where money is flowing.

It’s no secret that money won’t be flowing as well. But consider this.

Let’s say there are 10 galleries (or 10 artists) who have a strong customer base and who have been advertising. Now let’s assume each is only getting 20 percent of the sales they normally get — but five of the 10 stop advertising. That 20 percent of continued spending will go to those who remain visible. In the case of Gallery B, eight galleries stopped advertising, and Gallery B couldn’t keep up with the business.

There is another important principle, and that is to prime the pump for when things get better. All the people who love and buy art are not going to stop loving it. They will continue to read their favorite magazines. They need to see you the entire time. The reason is that when the money faucet turns back on, some galleries or artists will have stayed visible, branded themselves, and stood out when others had gone away, and they created interest and demand. Buyers may never have noticed you before, but now you stand out, and you are soon on the “eventual buy” list in their heads.

As a business owner, I know every dime spent is painful. But a visibility strategy is important to retain customers.

So is social media the answer? Of course it will be helpful, but there are a couple of things few people realize. If you have 5,000 Facebook friends and you do a post, only 2 percent are fed that post. So you think you’re reaching 5,000 people, and you’re really reaching 100. And just because you posted something does not mean those 100 saw it: Only 3 percent actually see or notice a post, based on their browsing habits, how the post looks, and how attention-getting it is. So you’re being seen by about three people.

You also have to remember that the people who follow you may not be people who buy art. Maybe some do, but chances are most are other artists. To reach people who spend money on art, you need to find a place that has a concentrated audience of known buyers.

Even if you can’t do what Gallery B did and buy several ads, some presence, any presence, will keep the money flowing in, though more slowly. No presence is like turning off the money faucet.

If you’re new and have not been an advertiser, there is no better time to launch a campaign and be seen and stand out. This is when kings and queens are made.

Case in point… during the Great Depression, Post Cereal was number one in America by a landslide. Because they were so confident that everyone knew them and loved them, the board made a decision to stop all advertising. Meanwhile a young startup called Kellogg’s launched during the Great Depression. The Post board still did not advertise, believing Kellogg’s could not possibly hurt them. By the end of the Depression, Kellogg’s was the number one cereal brand in America and had taken away more than 50 percent of Post’s business. They remain the leader to this day. Post tried everything but could never catch up. That’s why recessions and depressions are kingmakers.

You and I are faced with difficult decisions. Every dollar counts. We don’t know how long this will last, or when things will get better. But just because we’re frightened, we shouldn’t be foolish and assume nothing is selling. Just today a friend told me he sold a big, expensive painting, and earlier this week another friend told me she’d sold a painting.

In the Depression there was a money shift. Lots of millionaires were made during the Depression, and they were spending. In fact, the bankruptcy lawyers and others who made a lot at that time bought up real estate and businesses for pennies on the dollar, and many became the barons of the time. There is still money out there, and people are still buying.

This virus containment time can be an advantage to you. People are spending a lot of time in their homes, and many are focusing on redecorating or rearranging. This will reveal needs for new art. Also, they have lots of time on their hands, and they will read more. We’re seeing massive, bigger-than-ever open rates on our newsletters and websites, and others tell me the same. I’m assuming they will spend more time with the print magazines like PleinAir and Fine Art Connoisseur as well.

With every downturn, there is an advantage. Be smart, don’t turn off the faucet. Turning it off could turn off your business forever.

Oh, one more thing …. there is a principle in advertising called momentum. If you’ve been visible issue after issue for years and you suddenly stop, you kill your momentum. Though everyone thinks, “People know me they will remember me,” it’s simply not true. Out of sight, out of mind happens fast. I could name artists who were big brands making a lot of money who are not selling at all now because they were resting on their past brands. People no longer know who they are. Only the artists or galleries who stay visible will survive this long-term.

Food for thought. I hope it’s helpful. Please let me know what you need and how we can help you.

Eric