My last post on earning the confidence of your lender touched a nerve for some… which confirms yet again what we all know to be true: People get emotional about marketing. And taking emotion out of your marketing is one of a few time-tested keys to marketing success.
To be a successful marketer, you need to lay out your strategies in advance in an unemotional way. Imagine all the possible scenarios:
“If the market goes up a little, I’ll do A.”
“If the market goes up a lot, I’ll do B.”
“If the market goes down a little, I’ll do C.”
“If the market goes down a lot, I’ll do D.”
A strategic approach includes detailed plans to act in each of these scenarios. It’s best to do all this groundwork when the market is closed. This helps you focus on the longer-term perspective and avoid the emotions and anxiety of market action hour to hour, or even daily swings. Making decisions during trading hours fuels emotion and causes knee-jerk reactions.
Once you’ve decided what you want to do, just get it done.
Too often, people spend months planning to use a certain trigger signal to make a sale or a repurchase. Then, when the signal is hit, they look at the market and decide to wait until the next day’s open to see if it opens higher or lower. If it’s up, they decide to do one thing. Down? They do another. My recommendation: When your sell signal triggers, place your order on the next day’s open, at the market. Just get it done!
Think about it. Let’s say a sell signal triggers on a Tuesday at close. Wednesday, you’re going to go short futures. If on Wednesday the market opens lower, is it a poor place to get short? Or is the market bearish, meaning you should get in immediately? Or, let’s say the market opens higher and your plan was to sell. Should you wait? Will it go higher? Is the higher open a temporary gift? You can’t know for sure.
The point is, no matter what the open, if you’ve made a prior decision—in an unemotional way when the market is closed—then execute. Get it done. Statistically, if you consistently place your order immediately on the open, regardless of a higher or lower opening call or opening price, on average you’ll get the average.
If you consistently do this, in the end you should be fine. If you inconsistently apply your strategy and try to outguess the market action, emotion takes over. When the market is most bearish (and you need to be sold), you won’t sell because you won’t like the lower open. When the market opens higher, stalls and then collapses, you’ll freeze, waiting for a higher price to return. If the market continues collapsing, you’ll keep waiting.
I get all worked up over this because I know this happens all the time. When asked, producers admit to doing it, and they’re frustrated. Here’s evidence:
- Look at Top Producer’s survey of Marketing Sins in the December 2008 issue: Consistently, more than 30 percent of respondents tended toward inaction during market movements because they thought the price would go higher, or lower.
- Consider the survey we did at a seminar in Iowa last week. When we asked attendees what they wanted to improve about their marketing, “Adding more discipline” and “Taking out emotion” were the top responses.
In summary, lay out your marketing strategies in advance and when the market is closed. Then when your buy or sell signal is triggered, get it done. Don’t allow emotion to guide your marketing decisions. You'll feel better about your marketing and position yourself to succeed.