Monday, May 13, 2013

Impact of the Cyprus bailout on people there

The terms of the Cyprus bailout were unprecedented. In exchange for a €10 billion emergency aid package, Cyprus in March agreed to E.U. demands to effectively confiscate up to 60 percent of any depositor’s holdings above €100,000 held in two of the country’s largest banks, Bank of Cyprus and Laiki Bank. Now Germany claimed that this was to penalize the money launderers who had contributed to the crisis (itself questionable). As a result of this, many businesses have been plunged into immediate bankruptcy. They cannot pay suppliers, salaries, rents or running costs. Schools and hospitals are running out of money, farms cannot buy feed for animals and the country is being plunged into misery and a financial situation that will take up to ten years to recover from. Private citizens had wired money in to close on houses, only to see most of it disappear before the sale could close. Lawyers holding money in escrow have seen the money vanish while still being liable to pay their clients.

There has never been a bailout like this, and had the terms been applied to a larger country, it could have led to global chaos. It is as much of a "punish the innocent and uninvolved" plan as one that hits the mark of hurting the guilty.

Travels in Cyprus

I recently returned from Cyprus, where the banking crisis continues. While people have been hurt by having their bank accounts raided, businesses, schools, hospitals have been hurt even more. Driving in Cyprus, around 20-25% of shops are shuttered, many probably permanently. Yet, if the purpose was to eliminate Russian money laundering through Cyprus, I still saw 747s from Russia arriving at Paphos's tiny airport.

I also spent some time in Turkish occupied North Cyprus, which only Turkey recognizes (and subsidizes). Long poorer than the rest of Cyprus, it shows signs of pulling ahead. Cars are newer, commercial and residential development is moving fast. My forecast is that in ten years, the North will be wealthier and more separate from the South. Whereas in the South, virtually everyone speaks excellent English, in the North few and fewer do.

More to come!

Friday, May 03, 2013

Why do people not understand that lead generation is a key part of sales

Not recognizing the need for lead generation comes from a naive view of selling. Sales is not simply a transactional process where a buyer, who has spent the time to understand all the options, investigated each thoroughly, then makes a completely rational decision. Rather, it is a messy process, where many decision makers in a company, each with superficial knowledge of the options, make a subjective decision based on a brief and rarely complete trial, in a situation of having little time available. The final tie-breaker is trust, and sometimes it can be the biggest factor. Lead generation efforts are essential to complete these fully.