Archive for the ‘Business Management’ Category

The Art of Pricing

Wednesday, March 18th, 2009

Price signals are how people determine value… this is basic economics. While people are prone to complain when prices rise, it is the reflection of demand and/or scarcity. This is why it is so dangerous when the government intervenes in the economy – it distorts pricing signals. Just as important, however, is the way that prices trigger psychological reactions when purchasing.

While traveling around the country to meet with some of the world’s best internet marketers, they all told me the same thing: “You are giving WAY too much away for free.” At first, this seemed strange to me; after all, if I’m giving stuff away for free, shouldn’t that warm up prospective clients and make them more likely to purchase my stuff?

Nope.

While value in theory does determine price, the opposite is often true in the mind of the buyer: price determines value. In other words, a $100 product will be perceived as more valuable than a $10 product.

Therefore, what is the value of something that is free?

In the mind of the buyer, it is worthless.

As a result, giving something away for free not only diminishes the value of something in the mind of the buyer, but it reduces the perceived value of future products that you promote.

More importantly, giving too much away for free attracts the wrong crowd for a business setting. Those who are seeking to purchase a product will often be turned away from free information because their perceived value is eliminated.

Just recently, a business partner ran an idea by me: give away a fantastic piece of software in order to build a list. It’s a great strategy, but I told him to change it. Giving something very valuable in exchange for a name and an email will attract a large list of people looking for free stuff, and they become trained to expect stuff for free.

In order for this to work, you need a bridge…

Here’s the deal: I love to give away stuff for free. I do it the most in my internet marketing promotions just because I know how much crap there is out there. However, to actually PROFIT from giving stuff away for free, you absolutely must have a call to action built into your campaign. Sometimes, this is a product recommendation. Other times, it’s an upsell to your own program. Whatever it is, your prospect needs to be hit with an offer throughout the entire process of consuming the free product.

Consider this story: I sent out an email from Tampa explaining my experience there. To close the email, I offered to answer any question via email. Over one hundred emails came in, and I answered every single one of them. Some of them I answered while sitting in an airport getting ready to board a plane. The next day, I received an email from an irate business friend, saying (paraphrase): “How dare you answer my email while in an airport. Why didn’t you wait until you had enough time to answer my email properly? You just lost a customer.”

This caught my attention for a few reasons: first, I had gone out of my way to answer this guy’s question. Second, I sent him a personal email that answered his question directly. Third, I wasn’t selling anything. Fourth, he wasn’t a customer.

This person had been trained to expect me to deliver for him. He considered himself a “customer” because he had consumed what I distributed, even though it was free material. He expected me to give him more personal attention because my free stuff had helped him in the past.

He had been trained to expect more and more.

This is not to say that you should not give away free materials. You absolutely should, as long as your follow up process is one that is profitable for you. When recruiting free prospective customers, every step must lead them closer to a purchase, and this should be clear to the prospective. If he or she is completely aware that the “full package” cannot be gained without purchase, then he or she will intrinsically have a higher perceived value of both the free materials and the paid materials.

There are a few ways to do this:

- In your free content, refer to the “full package,” or an affiliate program that is related to the content that you are promoting.

- Tie the free material into a program that has to be purchased.

- Keep an aggressive autoresponder follow-up series that promotes your product or an affiliate offer.

What are you doing that is training your customers to be less profitable for you? What are you giving that is not leading towards a sale? If you are going at lengths to do anything that cannot be monetized, it is wasted energy (unless you are building a brand). Those that are lost along the “free” path are those that will cause the majority of your problems and are no true loss.

Consider your current business process: how are you leading your prospective customers to purchase? You must lead the horse to the water and give them a chance to drink. If the horse doesn’t drink, but you give it water anyway, then the horse will expect you to give it water every time.

Learning Sales Copy

Saturday, August 23rd, 2008

One of the big hindrances to the “next level” of success is identifying weaknesses and overcoming them. Unfortunately, few people are willing to learn new skills to overcome their weaknesses.

For example, when some people start out, they are reluctant to learn how to build web pages, be it through HTML, software, applications, or any of the other methods for building web content. Yet learning this small skill opens up a whole new realm of opportunities that do not exist when you can’t create a web page.

Recently, I discovered one of my weaknesses, and I am trying desperately to gain new knowledge to help me overcome it.

That weakness is in writing sales copy.

Now, I’ve won awards for my writing before – but sales copy is a whole new ballgame. Writing for the purpose of selling is something that I’ve never done before, and I believe that learning it will open me up to a whole new level of success.

After all, just about everything is sales copy. The way you speak is sales copy. The articles that funnel traffic to your web pages are sales copy. Your videos are sales copy. Everything that you do can be classified as a lead-up to a sale.

And while I am not yet an expert at copy, I have improved drastically since I start to buckle down and practice it. Here are some cliff notes that you can use and implement immediately into your writing behaviors:

1) Get to know your prospect. Learn the innermost feelings of your target audience. What is he like? What are his objections? What has he purchased before? The more you know about your prospect, the better you can reach him. Online, you can learn about your audience from browsing forums, reading blogs, or answer customer emails.

2) Identify your prospects desires in your copy. Restate the outcomes that he or she is looking for. Describe them in detail and paint a picture in your prospect’s mind so that he or she can visualize what the end looks like.

3) Push benefits. For a long time, I got caught in the trap of selling the FEATURES of a product instead of the benefits of a product. Instead of listing all the features that a product has, explain what those features will DO for the customer. People won’t care what a product is unless it can DO something for them.

In the last week, I’ve simply been implementing these three elements to my copy, and I have seen significantly higher response rates. However, I am just scratching the surface of getting to know sales copy, and I’m excited to see what it can do to my business.

To close, I feel important to suggest that you are never too old or too successful to learn a new skill that will take you to a new level of success. While it is never easy to learn something that is new, I have never heard someone say, “Man, I wish I hadn’t bettered myself by learning that skill.” This is especially true with running your own business; if you want to be successful and keep up with your competition, you better get used to training yourself to stay on top.

The Only Business Model

Wednesday, July 23rd, 2008

I was reading Jason Moffatt’s blog today, and he did an entire post on healthy eating. Health is somewhat of a passion of mine, and while I’m not hardcore, I do much better than your average 20-year old.

He recommended another web site, and when I visited it, I noticed the pure marketing that was all over the site. It was a membership site that you paid for on a monthly basis, and the owner was using some of the same strategies that I use in my campaigns.

Strangely, though, I was drawn in by the product. This is worth nothing, because I can catch myself falling into buyer mode – ESPECIALLY on non-internet marketing related products. When buying something educational for business, I just chock it up as a business expense and think nothing of it. But when it’s about health, or baseball, or my passions… well, I fall into buyer mode.

Allow me to switch gears a bit… I routinely get emails from people who want to know the way to make money by tomorrow. It’s frustrating to me, because I am a BUSINESS man. I don’t care to look at the blackhat methods that will generate all this cash quickly – that’s not what I’m into. I own a business… I’m a twenty year old kid that owns a successful corporation, so do you think that I like business?

When I look at something like this health site, I am drawn in by the product. The owner is running a business, and he draws me in by offering me something that I want. He didn’t spam me, he didn’t do any blackhat SEO… he offers something that I want. And I found out about him through word of mouth.

This is why asking what the “quickest way to make $100 a day” is a flawed perspective. If you don’t want to go the blackhat route and you want to start a BUSINESS, then you have to offer something that people want. Sometimes this is a review of a product. Sometimes this is a helpful article. Sometimes it is a membership site. And sometimes it’s an 8 oz. bag of goji berries, which I purchased today from the site that Moffatt linked me to.

Recently, I decided to do it and give it away for free on my new video site TheAffiliateGod.com. I’m doing it for this very reason – there are people that want this stuff more than anything, and I am simply giving it to them. I’m doing it for free because it will reach the maximum amount of people, and it will build me a brand. While I hope it to be a money producer at some point (although I’m not quite sure how), the FIRST step is to give people what they want.

In this business, we talk a lot about finding a “hungry crowd.” Frank Kern talks about finding people’s “cocaine.” This simply means finding what they are passionate about and what they spend money on. If you can provide them what they want, then you make easy money. Brian Owens told me once that there’s “plenty of traffic out there; you just need to step in front of it.” Likewise, there are plenty of people spending money on their passions; you just have to be the one with something to offer.

This doesn’t even mean that you have to own your own product. If you write up an EzineArticle that gives people what they want, they will check out the link back to your website. If you have a squeeze page that gives away a 10-page ebook about weight loss, they will read it if they are passionate about it. And as you do that, you build your list, you get traffic, you build exposure, you set yourself up as an authority, and you make the sales and the money.

And you did it by just giving people what they want. THAT is the only business model.