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.
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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