Recently I have been listening to a lot of Seth Godin audiobooks whilst driving. They are packed with gold!
Today I was listening to Meatball Sundae, which discusses the way marketing has been turned on its head and how to thrive in the new world of marketing.
Traditional Bell Curve
The traditional bell curve looks just like the shape of a bell. Small at the start, peaking in the middle and then dropping down to become small again at the end. In the past only a few people would purchase the cheap (and crap) and a few people would pay for the best. Most people were in the middle paying average prices for average things (think Jeans West and Target)
The New Inverted Bell Curve
With the changes in the web the bell curve is now inverted with most people either buying the most expensive and the best or the cheapest.
If I want a new phone charger for my car I can get one for $1 posted…I wouldn’t pay an average price ($10-$20) we I can get almost the same quality for cheap.
If I don’t care about the brand then I am going to go for the cheapest.
Take the other side of the spectrum. A lot of people will pay in excess of $400 for a pair of Ksubi jeans. The style and brand of the jeans demand a premium and people are willing to pay for it.
What This Means For Me
For me it proves what I knew all along, no one wants average. People either want the best or the cheapest.
In sales this means I either need to be the cheapest (and let’s face it someone is always cheaper) or I need to find a way to be the best. I want to set the bar so high that other companies will fail to reach it.
If I drop my brand new iPhone in the toilet and then drive over it I can take it to the apple store and get a brand new only for a couple of hundred dollars. This is excellent service and it will take Samsung a long time to win my business back.
I am still not 100% sure how I can provide something so excellent that people would be happy to pay a premium, but I intend to spend this year figuring it out.
Maybe I could provide phenomenal service, or find a way to get pharmacies their products faster than ever before. Maybe I can find a way to become so integral in their business and leave such an aftertaste of satisfaction that they wouldn’t want to risk going elsewhere.
I don’t have all the answers, and in the regulated industry of pharmaceuticals it won’t be easy to find a clear way to win. But I believe it is something the market is lacking, and something I would love to provide to them.
I was at work today (at the chemist) and some how we got talking about high school and the marks we got. In my final year I got a UAI of 94.65, which is very good (it means I’m smart) and the girls at work were saying I could do anything.
Trying to sound the least amount of cocky possible I know that I am very smart. If I wanted to I could do physics, psychology, pharmacy, Scientology, or any other kind of ology that needs a big brain and a fancy degree. But my response to the girls was that I am already doing what I want to be doing.
At heart I am a family man through and through. Instead of using my smarts (at this point in time) to get a degree and make a lot of money I am using my smarts to do exactly what I want to do, that is, starting a family.
Also, on the money side of things, I am using my smarts as an entrepreneur. I really enjoy starting businesses. Sure, I am not amazing at it yet…but I am learning heaps and constantly growing smart and smarter (and slowly earning more and more money from it). Currently I am freelance writing and copywriting full time. With the writing and working at the chemist I am earning decent money, not amazing but decent.
Why Don’t You Get A Career?
A lot of people ask (and if they don’t ask they wonder) why I haven’t gone and got myself a career. Because I easily could, I could go to uni and do almost any uni course I wanted and I could study to be something and then launch a good solid career and earn a bucket load of money (if I had to do this I would become a psychologist and they earn loads). Some might think I am scared, or maybe I am lazy, or maybe I am just odd.
The reason I do business is because it is a game, there is a huge element of fun to it. It is fun trying new things and new ways to make money, it is fun trying to turn an idea into a viable business, it is fun waking up (like I did this morning) and reading an email telling me I just earned $50 in my sleep.
I could do a career, but the element of the game isn’t there. I look at the old fart businessmen like Rupert Murdoch, Mr “Westfield Shopping Town”, James Packer and the other Billionaires and I can see they are in their element. Some are in their 70’s and 80’s and charging on. They don’t work for money, when you have 5 Billion to your name making more money isn’t a top priority. They do it because this is their fun, this is their game. That is where I can see myself when I am 70.
So in answer to the question “What Do I Want To Do With My Life?” the answer is three fold
1. Be a Family Man and have a bus load of kids and be an awesome dad and raise an awesome family. There is nothing more important than this.
2. Be a businessman and entrepreneur. Start businesses, build businesses, run businesses and sell businesses. Business is the game and money is how you keep score.
3. Ministry. I am a christian and serving God is extremely important to me. I want to use my skills as a family man and entrepreneur to impact my community and make a positive impact. How positive an impact do you think you could make with $5 Billion?
I wonder what you want to do with your life.
Sometimes my head gets so full that I just need to get all my thoughts out onto paper. Sometimes my drawers and desks fill up with so many notes that I just need to read them, summarise them and write them down. That is what this is.
Recently I went to a business conference with my friend. I wrote a lot of notes and now they are cluttering up my life, so it is time to go through them, get them onto paper and share them with the world. There was some really great stuff said at this conference, that is why I don’t want to forget it.
Business Formula For Success
The goal in any business is profit. So how can you achieve that? Here is the formula I learned for achieving success
Leads x Conversion Rates = Number of Customers
Number of Customers x Average Dollar Sale x Frequency of Transaction = Turnover
Turnover x Margin = Profit
If you are starting a business from scratch then you want to focus on your conversion rates, average cost of sale and frequency of transaction and improve those things. Many people focus on getting more and more leads/customers, but instead you should focus on taking your current customers and getting the most from them.
How To Get The Most From Your Customers
- Keep Regular Contact – 7 touches leads to a sale, so keep the contact going
- Have Some Sort of Loyalty Program – You want customers to stay for the long term, so give them long term incentives
- Create and Keep A Database – I do this by building up email subscribers through Aweber
- Inform Your Customers of Your Entire Range – If they trust you enough to buy one thing off you, they might buy another thing off you. I have just started doing this and I had 5.5% of customers from my property newsletter covert to a free course on how to generate a passive income online
How To Improve Your Average Dollar Sale
- First learn what your average dollar sale is
- Cross sell, but make sure you have the big sale first
- Scarcity sells! It always has and always will. Make your product scarce. I have done this with CashFlow Investor by limiting the service to 100 members
- Have the courage and guts to increase your prices. Create value so people won’t be focused on price.
The market is never hard to get into. It is only hard if your products don’t meet the market
– Murray Priestly
Old Media and New Media
People these days are getting ad resistant. The average consumer is exposed to over 3,000 ads per day…no wonder they are numb to advertising. The world is changing, and the old media form of advertising (bombarding people with one way ads) doesn’t work as well anymore.
Did you know that 96% of Gen Y’s have joined a social network? That tells you something about the way things are changing.
Many people treat new media like old media by bombarding people with advertising. Instead of putting an ad on facebook how can you make people fell connected? You need to create ideas that people can gather around.
Weaknesses and Strenths
Did you know your weaknesses can be your strengths? Your weaknesses can be what set you apart from your competitors. Your weakness could be your Unique Selling Proposition (USP).
Leading In Business
- Take A Leadership on Price – Sometimes cheap is good, sometime you need to be expensive to stand out. Take leadership and make the right decision on price. Don’t be swayed by your competitors pricing.
- Offer Quality, and An Image of Quality – People want to buy quality and they want to think they are buying quality. They get enjoyment out of buying quality. So make sure you present an image of quality.
- Create Mass Appeal – Make your product fun and accessible to everyone
- Focus – Focus on what makes you stand out from the crowd and do that well.
Income Producing Activities
There are only some things you do each day that actually produce income. I need to focus my time on the income producing activities that PUT MONEY IN THE BANK.
Until you are making $1,000,000 with your business then 80% of your time needs to be focused on sales and marketing.
Focus
In order to break through the wall of success it is important to focus your efforts. There are 3 ways to successful focus
- Message/Product – Focus your product for a niche
- Market – Focus into a niche market
- Method – Focus on the method you use to market and get your product to your people
There you have it. A bit jumbled up, but as I said I just needed to get it written down so it can stop clogging up my life.
The other day, after a semi-frustrating joint venture meeting, I was forced to completely rethink my product. I am a property investor and previously my product was a joint venture on positive cashflow property.
They say when starting a business you should find the market first, and then create a product for the market. Well I have discovered that the market does not want a joint venture on smaller positive cashflow properties. For the business person joint venture is difficult because people tend to fall into 2 categories
- They know nothing about property and investing and don’t want to learn anything. They lack the knowledge and therefore are afraid to invest.
- People who know about property investing. These people want to know everything about their investment and want to have a say in everything. This micro-management makes closing a deal painful.
So I have come up with a business idea that is created specifically for the market. I am not trying to create a product and find a market, instead I am reading the market and trying to deliver exactly what they are asking for.
With the ability to outsource most of my work, the potential for creating an automated business is huge. The only problem I have is capital to start with. To get my business up and running it would cost me around $500 and ongoing costs of around $200/month. That is money I can’t really afford to lose. I don’t even know if my business model will work yet.
But there is a great way around the problem and it is called microtesting. I got this idea from the 4 hour work week.
Basically is works like this. Create the front end of your business. This is the sales page that sells your product for you. For me I need to create a website to explain my product. I can create this website for $15, the cost of the domain, and about a week’s work. So you create the front end and the sales systems but no product…yet
Second step is you begin to market your product without making it publicly known. You can do this through Google Adwords PPC (Pay Per Click) Marketing. The goal is two fold.
- To test whether you can make more money in sales than you pay in advertising
- To test different ads and to see which ads work the best
To do this you set up ads that point to your sales page. For me I am creating a sales page that has a complete form to collect all their information. In order to create this form I am using Aweber, which is the best in the business for email marketing.
People will be directed to my sales page and if they want to purchase my product they will fill out the required information and click buy. They will then be redirected to a page saying that the product is out of stock, or is currently on back order. I will tell them I have collected their information and will email them when it becomes available. There will also be a link they can click if they choose to not receive information.
Note: It is illegal to charge people for something that is not yet being manufactured. So I do not charge them. I believe it is also illegal to keep people’s credit card information if they cannot purchase, so I get around this by keeping their details but NOT their credit card info.
Each person that fills out the form and clicks ‘buy’ counts as a sale in my test. So I can effectively work out if my product is profitable or not. If I spend $200 on advertising and make one sale worth $100, then chances are my product won’t be profitable (unless I can lower my marketing costs). This is a great way to test whether or not there is a market for my product and whether or not I think I can make a profit. All I had to do was create a sales page and some PPC campaigns. I didn’t have to spend months of work and money creating the product.
Microtesting also gives you the ability to test different variables in your ads. Look at the two ads below (examples taken from The 4-Hour Work Week):
SAILOR SHIRTS FROM FRANCE REAL FRENCH SAILOR SHIRTS
French Quality, Shipped From US French Quality, Shipped From US
Lifetime Guarantee! Lifetime Guarantee!
www.shirtsfromfrance.com – www.shirtsfromfrance.com
By changing only one thing, you can test which works best. As long as you disable the feature that serves only the best serving ad. Create different ad campaigns changing just one section to see which works best. In the end you can combine the best aspects to make an effective ad campaign.
Microtesting allows you to test the profitability of a business without needing to put money and time into creating the product. If your business is a dud then cut your losses and move onto the next one. If your business model works then take it to the next step and create your product and start selling it.
The best thing about using Aweber in all of this is that those fake ‘sales’ you made in the testing phase can be turned into real sales. Instead of the person clicking the buy button and then disappearing because you are unable to sell them anything, their details are collected and stored in your Aweber service. When your product is finally up and running you can email these people and turn that fake sale into a real sale. So you $200 of testing might actually make you money in the end anyway.
This idea of microtesting is genius. Just make sure you don’t break any laws by not actually charging people or storing their credit card data and you should be fine. This is the ultimate way to test a business idea without outlaying a lot of time or money on product creation.
I have created many ebooks to sell before and never microtested them. I didn’t lose a lot of money (usually I would lose about $80 and a week to a month of my life), but by microtesting I could have saved a lot of time and saved the feeling of failure a few times over. So why not think about microtesting your idea.