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Obamacare and marketing: the little foxes that are ruining the vine
6/21/2012 8:03:50 AM
There have been a couple of foxes roaming my neighborhood lately. They lurk in the shadows and come out about dusk every night. I was sitting on my front porch just the other night when the two of them appeared in my yard. They stopped for a second and looked at me. Despite the fact that I was moving around, they did not appear to be frightened of me or what I might do, and proceeded to trot to my neighbor’s yard, uninterested in my presence. I think they knew that they were free to be as menacing as they pleased and there was nothing I could do about it. They knew I dare not wield a deadly weapon – be it a gun, a bow and arrow or a slingshot - in a residential neighborhood. The other night, one of my neighbor’s cats went missing. Do you think there is a connection?

In a matter of days, the U.S. Supreme Court will announce its decision on the constitutionality of the Patient Protection and Affordable Care Act, also known as Obamacare. In many ways, the answer to the legality of this legislation will determine whether we can move forward in business or not. It will also determine if you can effectively market your goods and services. How so? Since Obamacare was signed into law in 2010, the health benefits offered by employers have been in flux. The legislation essentially mandates that all people have health insurance. At the same time it limits any kind of creative choices that companies have offered in the past to keep health insurance affordable, such as self-insurance plans. The government becomes the insurer and companies are on the hook to provide for all of their employees and their families. What is the cost of doing this? No one is really sure, but by all estimates, very costly. (What has the government ever done in a cost-effective manner?) The uncertainty of the cost of the program has had corporations preparing for the worst-case scenario and holding on to cash they might need in order to meet their payroll benefits obligations. Those corporations are in limbo, waiting to find out what their true costs of employment will be. Are they inclined to hire people when so much is undecided about employee benefits? No they are not. Employee compensation is typically the largest expense in business. So here we sit with a sluggish economy and high unemployment while the fate of Obamacare rests in the hands of the justices of the Supreme Court. Do you think there is a connection?

 How does this health insurance overhaul impact you from a marketing perspective? No doubt the lack of free-flowing cash in our system has had a great impact on marketing plans. Lean times have a way of making all of us take a second look at where we are spending our money and a bit averse to spend what we have. So everyone has less money to spend. That impacts the way you market your goods and services. If you aren’t selling an essential of life, you are more than likely finding it an uphill battle to get people to turn loose of what little cash they have to buy your products. If you are responsible for your company’s marketing, you are aware of the need to convert every marketing dollar spent towards turning sales quickly. The ROI drum is being beaten louder than ever. However, there is another reason why many marketing efforts are not working right now which is directly tied to the uncertainty of the marketplace. Regardless of what you try, businesses, especially larger corporations that feed small business, are bracing for a change and will not turn loose of cash right now. So the large corporation won’t hire the small business, who cannot afford to keep their employees, which contributes to the malaise where we find ourselves. I was talking to a peer in business recently and he said, "I have never seen a time in my business career when our marketing efforts have come back empty of sales.” This is a man who has spent the past twenty years in marketing. There is a clog in the system.

How do you navigate these unusual times in which we are living? First, keep your eye on the news and be prepared to contact your congressman. If the Obamacare laws are thrown out, there are many who believe our elected officials will try to take some of the more popular ideas of it and write new legislation. There is an old proverb that says it is the little foxes that ruin the vine. Remember that it is our elected officials who put us in this position in the first place. Also remember that this is an election year. Make sure they hear from you and that you cast a ballot. Secondly, if Obamacare is found to be illegal at the end of June, don’t expect the cash flow faucet to be turned on full blast by the Fourth of July. That’s not how economic recovery typically works. However, do anticipate that it will be turned back on. Ramp up your marketing plans once again. Refresh the old proposals and get ready to move. Those who can hit the road quickly will have an advantage over those who are still reluctant to put marketing dollars to work after the decision comes down from the high court.

What if the Supreme Court rules in favor of Obamacare? I’m not an economist, but I would anticipate that companies will have the ability to move forward, knowing what it will cost them to keep an employee. With their benefits costs going up, however, they won’t be hiring many people back any time soon. Let’s hope there is still some semblance of sanity on the part of the justices at the high court.

Note: On June 28, the U.S. Supreme Court announced that Obamacare, for the most part, was upheld as law and the individual mandate was legal as a tax imposed by Congress. This fight does not appear to be over, as Mitt Romney and many Republicans have vowed to overturn the law if they gain control of the Executive and Legislative Branches in the fall elections. What does that mean for the near future of business? It means we cannot move very far forward until the issue is resolved. It appears that will be decided at the ballot box.

________________________________________

Insider poll: Legal experts now expect Supreme Court to strike down individual mandate, By Chris Moody, Yahoo! News, June 20, 2012

Patient Protection and Affordable Care Act, http://en.wikipedia.org/wiki/Patient_Protection_and_Affordable_Care_Act
Photo by Gary Blakeley
 

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