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Archive for April, 2011|Monthly archive page

Financial Freedom is in the Follow-up

In Uncategorized on April 29, 2011 at 11:30 pm

Written by Rod Nichols on Apr 4, 2011 2:47 pm

You’ve probably heard it before – network marketing is a numbers game.  The more people you present your products and opportunity to, the greater your success.  There is a catch to this theory – Years ago, I was with a company that promoted the use of video mail out.  I mailed out about 300 amazing video tapes to warm market prospects and then waited for them to call back and sign-up.  After about a week of no calls, I started calling them. Some never received the video, others hadn’t had a chance to view it, and the rest looked at it and weren’t interested.  After further follow-up on those who hadn’t had time, I was able to recruit some of them.  The key to my success was not the numbers, but rather the numbers combined with effective follow-up. So, financial freedom comes from the follow-up, not purely the numbers.

How do you create an effective follow-up system?  Here are some tips:

1.  Database – use a computer database to keep track of all your contacts.  Time activate your database for follow-ups.  Your database should include information about prospects – name, email address, mailing address, phone number, best times to call, fax number, background, marital status, kids, hobbies and interests, goals, network marketing experience, etc.  The more you know about a prospect, the easier it is to find their hot buttons.  Also, keep track of each contact, in detail, so you will know what information you have already presented.

2.  Tools – follow-up can be in-person, by phone, e-mail, text, or good old snail mail.  You want to have information packets on products, opportunity, network marketing, the product industry, and information that supports the need to have a home-based business.  Make up e-mail and hand-out packages, so you can provide information in the best way for each prospect.  Have follow-up phone and in-person scripts, so that you (and your downline members) will remember all the important things to say.

3.  When – let’s say you call a friend to invite him to a business briefing and just leave a message.  How long should you wait before calling back?  First, you should never invite someone to a business briefing by leaving a message.  They should receive information and have some interest, prior to inviting them.  Effective follow-up must be within 48 hours of the time they receive any type of information from you.  If you leave a message to call you and they don’t, call them back after 24 hours has elapsed.  If the timing is not right for them and they say “no”, check back with them every 90 days.  Call and update them on your progress and that of your company.

Follow-up will mean the difference between your success and failure.  So often distributors will do a great job of getting information out, but are afraid to follow-up.  Keep in mind that it doesn’t matter what they say – if they are interested, that’s great and if not, that’s ok too.  Your job is not to sell them on your company, but rather to present the information effectively and let them decide.  That is why it is so important to follow-up, because they may have questions or concerns.

If you are new and feel uncomfortable about the follow-up call, do a 3-way call with your sponsor or another upline leader. Effective follow-up is one of the primary differences between the BIG money earners and the rest of the network marketers. So, get information out there and then follow-up and watch your business skyrocket.

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The 5 Minute Guide To Cheap Startup Advertising

In Uncategorized on April 28, 2011 at 6:35 pm

The following is a guest post by Rob Walling.  Rob Walling has been an entrepreneur for most of his life and is author of the book Start Small, Stay Small: A Developer’s Guide to Launching a Startup.  He also authors the top 20 startup blog Software By Rob, that’s read by tens of thousands of startup entrepreneurs every month and he owns the leading ASP.NET invoicing software on the market in addition to a handful of profitable web properties.

Imagine that you’ve just completed version 1 of your product and you’re preparing for launch. You’ve greased the wheels with a few bloggers, targeted some keywords with SEO, created a bit of linkbait, and scheduled the press release to launch in the morning. At this point your co-founder turns to you and says: “What are we going to do with the $300 we have stashed away for advertising?” Consider this your lucky day. The goal of this article is to provide you with the core of what you need to know about cheap startup advertising as quickly as possible, so you can start spending that ad budget wisely. Let’s get started.

Two Key Advertising Strategies

The half-life of advertising traffic is zero. This means that the moment you stop shelling out cash, the traffic stops. The problem is that with typical conversion rates of 1-2% you’re paying for 98 or 99 out of every 100 people to walk away and never come back to your site. To combat this inherent wastefulness of advertising, I have two key strategies I recommend no matter which method of advertising you use.

Strategy #1: Try to Get Permission

Seriously consider offering something in exchange for a visitor’s email address. It can be a free trial, a free report, or maybe even a free book. But gaining the means and permission to contact that customer again will increase your conversion rate over time in most cases. There is great power in an email list.

Strategy #2: Use Advertising to Test

Use advertising as a testing tool rather than a long-term stream of customers. Very few startups can withstand the cash outlay required to turn advertising into a marketing activity with positive ROI. Even if you figure it out, advertising is a volatile marketing medium. Prices increase rapidly in online advertising as new competition crops up or prospects grow bored of your ad and your click through rate drops. When this happens, all of the time you invested in optimizing your ad campaign is *poof*…gone. So instead of relying on ad traffic as an ongoing stream, use it for what it’s best at: the ability to generate a slew of visitors very quickly, and to be turned off just as quickly. This kind of traffic source makes it great for split testing and user behavior testing using tools like Clicktale and Crazyegg. It also gives you insight into how certain traffic converts for you. With properly tracked conversions and an ad on Facebook, you can determine that men from 35-45 convert at a rate 15% lower than women of the same age. This is valuable information, especially early in your marketing effort when you’re still trying to figure out the ideal market for your application. Often this is not the largest market; it’s the one to whom you can market for the lowest cost. As another example, with AdWords you can learn in a hurry which keywords convert for you, and which don’t. This is insanely valuable as you invest the time and money on the long-haul of search engine optimization. Knowing the keywords that really convert for your business, as opposed to the ones that you think will convert, can save you piles of cash and many months of SEO effort.

The "First Five" Advertising Options

With the above strategies in mind, let’s look at the first five advertising options you should consider.

Option #1: Niche Advertising

As a startup, there are hundreds of general advertising options available, and thousands more niche opportunities. Depending on the niche you’re catering to you should be able to find a forum, blog, magazine or website in which to spend some ad dollars. The tighter the niche the better. Remember that niche sites tend to be cheaper to advertise on and drive more targeted traffic, which makes a huge difference in your conversion rate. (And if you’re not targeting a niche because you want your audience to be the "whole world," you’re going to need a lot more than $300 in your ad budget). In general, if you are marketing to a niche you will know the sites to target. If you don’t it’s time to pound the pavement and find out what they are. By "pound the pavement" I mean search on Google and contact people in the niche to find out where they hang out online. Two reputable niche ad networks I’ve worked with in the past are:

  • InfluAds – With an increasing number of advertising "communities" covering design & UX, startups and entrepreneurs, work & productivity and web development, InfluAds can work with budgets as small as the $300-400 range. They sell a minimum set of granted impressions, and if more traffic is available during a month then existing advertisers receive it for free. Image ads only.
  • BuySellAds – Though they’ve traditionally focused on the design & UX space, BuySellAds is in the process of branching into many other niches. This image-only ad network was the primary source of traffic for a design-oriented website I owned, and made the difference between a few hundred dollars a month in sales, and a few thousand. Advertising is purchased by impression or on a monthly basis from individual advertisers, meaning each offers different pricing. But the minimum buy is very cheap – in the $10-$20/month range.

Option #2: Google AdWords

  • Ad Format: Text or image
  • Ad Components (for text ads): 25-character deadline, 2 lines of body copy @ 35 characters each, 35-character display URL
  • Approval Process: Automated, with manual review if you trip a filter

A few years ago, Google AdWords was great for startups. Many niches were untouched, and 5 and 10 cent clicks were commonplace. But these days, the vast majority of niches worth pursuing have ever-escalating click prices as more advertising dollars move online, including dollars from large corporations that don’t blink an eye about spending $5 to produce a single visitor to their website. With a 1% conversion rate you need a $500 lifetime customer value to break even. This is more than a stretch for most startups who are scraping by on 0.5% conversion rates and sub-$100 lifetime customer values (at least to start with). But with Google carpet-bombing $75 AdWords coupons to every business in the civilized world, the number of advertisers, and thus the competition, is increasing. For the most part, the days of cheap clicks are over. The $1-2 per click I used to pay to advertise my invoicing software has become a negative ROI for me at $4-5 per click. But all is not lost. There is still a place in the backwoods of AdWords where the wild-west mentality (and cheap clicks) reign. That place is the content network. People traditionally think of Google AdWords as the ads that appear to the right of the search results. But the lesser known cousin of search ads are the ads that appear in every AdSense block you see around the web. These are ads placed through the Google AdWords content network. The content network is less targeted, higher volume, and typically much cheaper to advertise on, than the search results. While we don’t have time here to delve into specifics of how to place ads on the content network, the most consistent approach I’ve seen that works over the long-term is to use their cost-per-action tool called the Conversion Optimizer. There’s a great write-up of how it works from Patrick McKenzie of Bingo Card Creator fame, here. There are also some helpful tips on advertising on the content network here. And if you’re willing to drop a few bucks, by far the best AdWords book available is the Ultimate Guide to Google AdWords, which includes a section on using the content network.

Option #3: Facebook

  • Ad Format: Text with required image
  • Ad Components: 110×80 image, 25 character headline, 135 characters of body copy
  • Approval Process: Manual (sometimes slow)

Facebook is still viable for startups with its ability to deliver 10-15 cent clicks under the right circumstances. But it’s a bit like the Wild West: if you approach Facebook advertising incorrectly you will pay a premium, around 75-90 cents per click. The value of Facebook is its ability to show your ads to exactly who you want to see it based on information in a user’s profile. You can easily segment on gender, age, location, relationship status and a number of other fixed parameters, along with thousands of interests and occupations you can target using keywords. The key to low cost Facebook clicks is having a high click through rate (CTR). The key to a high CTR is a combination of a powerful image, an engaging headline, and laser-focused targeting. Due to space constraints we’re not going to cover the basics of choosing a powerful image or writing an engaging headline. Not when there are perfectly good articles already written on the subject for those who would like to know more: choosing an image / writing a headline. But once your ad is written, there is a trick to achieving those 10 cent clicks. Based on a tip from my friend JD, I now use the following method with Facebook ads:

  1. Target your demographic information so tightly that you can write a headline that addresses them specifically. Example: if you are selling shoes online to the U.S. market, create 10 different versions of the ad, one for each of the major metro areas in the U.S. Also include the qualifying "interests" keyword: shoes. Now make each ad headline address its group specifically, using a formula like "Need Shoes in [city name]?"
  2. Start the ads with a modest budget of, say, $5-10 per ad per day.
  3. After 12-24 hours review the ads. Some will have high CTRs and costs per click around 10-15 cents. Others will have low CTRs and clicks in the 80-90 cent range.
  4. Pause the higher cost ads and increase the budget for the low cost ads to whatever you can afford; $100 per day or more per ad.
  5. For a few days you will receive extremely low-cost, targeted traffic. But since you’ve chosen a small group of people, they will start to tune out the ad rather quickly. At this point your CTR will drop and your cost will climb. Pause the ad, and start over with new cities, new images or new headlines.

This approach requires ongoing maintenance but if you can generate targeted, 10-cent clicks it’s worth the effort.

Option #4: StumbleUpon

  • Ad Format: not applicable
  • Ad Components: just your URL
  • Approval Process: Manual

I recently advertised my developer’s guide to launching a startup on StumbleUpon. The plus side of StumbleUpon is that all clicks are 5 cents. The downside is the bounce rate is high since people are basically channel surfing. I achieved a 96.88% bounce rate in my experiment, with an average stay of 2 seconds. I wonder if it was something I said? In my test, only 25 visitors stayed longer than 5 seconds. I paid $50 for 1000 clicks, but since only 25 of them stayed long enough to read anything, I effectively paid $2 per click. Your mileage may vary, but through this and other experiments I’ve gathered the following tips for advertising on StumbleUpon:

  • Your #1 goal is to get stumblers to stay longer than 5 seconds. Your #2 goal is to get them to up-vote your page. Paying $50 for 1000 clicks is one thing. Having it go viral and receiving 10,000 clicks for the same price is another.
  • Don’t send StumbleUpon traffic to a landing page that asks for an email address. StumbleUpon users are notoriously fickle about providing their email.
  • People stumble to be entertained, so if your page doesn’t have the potential to go viral or turn into linkbait, you will not likely fare well.
  • Blog-like content and videos seem to work best. Anything that resembles a traditional landing page will bomb.

Option #5: Reddit

  • Ad Format: Text with optional image
  • Ad Components: 70×70 image, title, URL
  • Approval Process: Manual (two-day lead time)

Reddit uses an interesting approach for their ad pricing: advertisers bid a certain amount per day, all of the money goes into one big pot, and each advertiser receives their share of the impressions based on the percetage of funds they contributed. It’s a simple system, but it means there’s a bit of uncertainty about what you’re going to get for your money. However, Reddit has the potential to provide some very cheap clicks – I’ve seen as low as 3 cents – if you play your card right. Similar to StumbleUpon, Reddit provides your ad with the potential to go viral. Gabriel Weinberg has a great write-up of the 20,700 clicks he scored for 3.14 cents each for his new search engine Duck Duck Go. His eye-catching image and tech-focused startup served him well with the audience. As he says:

First, a search engine ad is a good fit for reddit ads in general. It has broad market appeal and redditters in general like trying out new technology. Second, I think the ad is particularly well structured. The circular duck icon draws your attention, is contrasting to site colors, and sticks out because it is a circle (as most images are square). I believe the title also has appeal.

Gyutae Park also has a nice write-up of the 434 clicks he purchased for 9 cents each here. One of my recent experiments was a bit more pricey: 187 clicks at 40 cents each. My lackluster performance was a combination of landing on a competitive advertising day, and using a poor-quality header image. In retrospect, I have no idea what I was thinking using this unreadable image: Reddit ads are so simple (just two visible components) that the only tip I have is self-evident: your image has to rock, and so does your title. It’s all about choosing an image and headline that makes people click.

Conclusion

To conclude, I want to reiterate what I said early in this article: unless you have deep pockets think of advertising not as a long-term traffic strategy, but as a testing tool to improve your website and find out more about your ideal visitor. Few bootstrapped startups can withstand the cash outlay required to turn advertising into a marketing activity with a positive ROI, but that shouldn’t keep you from testing the waters to find out for yourself. I look forward to hearing about your advertising experience and recommendations in the comments.Like this site?  Help spread the word. 

Posted by Dharmesh Shah on Fri, Mar 18, 2011

10 Ideas For Those Critical Early Startup Sales

In Uncategorized on April 28, 2011 at 4:59 pm

 

Closing your initial sales at a startup is one of the most challenging parts of building a company. Many startups die before they ever close a deal.

Unless you’re entering a well established market there will be uncertainty with your product, approach, and timing until you have enough customers to prove that you have a good business model.

When Brendan and I started Wistia, we had questions about how the sales process should work, what kinds of documents we needed in place, how long things should take, and where we should look for potential customers. Through sheer will, conviction, and lots of failure, we found our way to where we are today. Here are the 10 principles we learned along the way.moneygrow

1. Don’t wait to sell

You should start selling as early as you possibly can. Do not wait until your product is polished and launched. We changed direction and started heading towards Wistia about a year into startup life. How’d we know to head towards Wistia? Because we had a real potential customer that was interested when we had NO PRODUCT. We talked to them about what we thought Wistia could be. They liked the concept and we built the first version of Wistia in two weeks. A month later and we had our first customer.

We had just spent seven months building a portfolio website and four months trying to get people on board while our bank accounts shrank and our time to live decreased. In the course of a month we sold our first customer, decreased our burn, and realized that selling early was possible.

2. Do things that don’t scale

We learned an enormous amount from our first customer. That first sale gave us a benchmark for what people were willing to pay, how long it would take to close a deal, and how easy it was to use the product.

We made a point of going to our first customer’s office every couple of weeks to talk about the challenges that they were seeing and how we could make the product better suited to their needs. We could never spend as much time with every customer as we spent working with customer numero uno but we magnified all the extra learning upfront across the customer base.

Trying things that seem like they can’t scale is not just okay, it’s imperative as long as you are actively learning from every interaction.

3. Get inside your customer’s head

What books and magazines would your customers read? What conferences would they go to? What search terms would they use? Who would they follow on twitter? Once you have an idea of where your customers hang out, you need to go there. The more time you spend where your customers are, the more you’ll learn about how they think and whether or not you’re focused on the right group.

We thought some of our early customers would want to use Wistia for training, so we went to learning conferences. When that didn’t work we focused on talking to people from big companies that went to tech events. As we got better at figuring out where our customers could be we had more opportunities to learn from the right audience.

4. Focus on the buyer

Sometimes, especially with enterprise sales, the buyer of your product will be different from the user. That’s why it’s critical that you focus on the buyer.

CRMs are an excellent example of this phenomenon: a product is sold to the VP of Sales that will be used by the sales team. If you focus only on making an amazing experience for the sales team while ignoring the high level dashboards of how the sales team is doing, the VP of Sales will have trouble buying.

Look at Salesforce.com; their application can be an ardous one to setup. In fact, there are companies like OpFocus, whose main business is working with companies to optimize the Salesforce.com system already purchased. But Salesforce.com does have a great set of dashboards for the executives. The buyer, the VP of Sales, is happy and Salesforce is a $18B company with a product that has a terrible UI. All because they focus on the buyer.

5. Don’t price against cost

Cost matters when markets are mature and products are well defined. All that matters to customers is value. Should we charge our customers based on how many servers they’re using or how much video bandwidth they’re pushing because those are our costs? No.

Our customers don’t care how much we’re paying Slicehost or any of our other providers. They want to know if their videos are effective, they want to close more deals, and they want to provide a better experience for their customers. These needs could not be more divorced from our costs.

6. Position against complimentary products

For some reason, competitive startups tend to think that they need to position themselves against each other. But as my good friend David Cancel likes to say:

I believe a startup only has one real competitor, indifference.

People not caring enough about your product is your true competition, not some other startup.

David Cancel

When you’re thinking about how to position yourself, look at the complimentary products, not the competitive ones. Ask yourself two questions: How much value can I create for my customer? And how much value are they getting from the other products they use?

Say your customers are spending $50 a month on Mailchimp, and they get an email platform they use every week that allows them to design, manage, and market to 5,000 recipients. Don’t try to sell them a video hosting solution for $1,000 a month that they’re going to use once a quarter to train 200 people. We made this mistake, and it’s an important one to learn from. Be honest about how much value you create and how much value your customers are getting from other products.

7. It’s only the beginning

When you first start selling a new product every new customer feels hugely important, and they are. It becomes easy to put a crippling amount of pressure on yourself to close deals and get people interested. While this can be a good motivator, it can also cause you to make mistakes.

When we were first getting going sometimes we’d say things like “Maybe we should wait a bit until feature XYZ is launched. Then they won’t be able to say no.” or “If we can just get company ABC to sign up, then it’ll be way easier to get that other guy too.” Here’s the problem with this: unless you’re dealing with a market in which there are less than 100 customers, the customers you’re trying to sign up should only be floating on the surface of your pool of potential customers.

You should not be afraid of scaring people away with a high price, the wrong messaging, or an initial email that’s too short. You need to try all of these things and more to figure out what’s going to work for your sales process. You need to be able to take risks and push forward quickly. This can be impossible if you structure your plans around closing each and every individual potential customer.

8. Focus on every customer

Even though no one customer should define your business model, you should leave yourself the flexibility to cater to each individual customers in specific ways. The most likely way to get customers to close is to spend a little time on each individual target. You need to personalize the correspondence as much as possible. This is true if you’re sending an email or if you’re meeting with someone in person. Figure out why they’re successful, what their hobbies are, and what conferences they like going to. The more you can understand them the more likely you are to speak in their language.

It takes time to prepare and learn about every target. But as you get more customers you’ll quickly learn what similarities and differences your customers have. It becomes easier to figure out where to focus and how to craft your message.

9. Act your size

When you’re first getting started it’s easy to fall into the trap of trying to act bigger than you are. Common pitfalls include trying to demand exorbitantly high prices, positioning to have more customers than you have, and promising more than your product can deliver. Yes, I’ve made all these mistakes.

When you’re trying to act big, it often highlights just how small you are. Pretend like you have more customers than you do and when someone asks you who your customers are you’ll be left speechless. Position your price too highly like your more entrenched comparables and people will stop responding to you.

The secret is: the right customers will gladly pay startups for services. They’ll think they can get a deal because they’re early to the party, which is likely true. They’ll be excited about using cutting edge technology to get a leg up — again true. And if they pick right and your product rocks they get to tell the world that they were first — how can this benefit even be measured!

10. Just keep going

The hardest part of bootstrapping your sales is sticking with the process. It can take a very long time to get your first deal. But each deal comes faster with practice and more information.

Your initial hit rate will probably be terrible. If it isn’t, you’re doing something right. I have some friends who run a company called Usable Health that just closed their second deal in a complex and emerging space: kiosk-style self checkout at mid-sized restaurant franchises. They’ve been selling for one and a half years and pivoted three times in the process. Now they have a pattern, happy customers, a model that looks like it could scale, and real tangible revenue.

Not giving up is the most important part. Give yourself time to build you business model. Once you’ve done that, you’re golden.

What do you think?  Any tips on getting those early sales?

The Struggle for the Right “Business Model”: Distraction or Imperative for Creating and Sustaining the Business?

In Uncategorized on April 28, 2011 at 3:56 pm

“Past success stories are generally not applicable to new situations. We must continually reinvent ourselves, responding to changing times with innovative new business models.” ~Akira Mori

A business model describes the rationale of how an organization creates, delivers, and captures value; economic, social, or other forms of value. Whenever a business is established, it either explicitly or implicitly employs a particular business model that describes the design or architecture of the value creation, delivery, and capture mechanisms employed by the business enterprise. The essence of a business model is that it defines the manner by which the business enterprise delivers value to customers, entices customers to pay for value, and converts those payments to profit. This reflects management’s hypothesis about what customers want and how they want it, and how the enterprise is organized and how it makes a profit.

The popularity of the term “business model” is a relatively new phenomenon and it rose to prominence only towards the end of the 1990s. This surge coincidences with the advent of the Internet in the business world and the steep rise of the NASDAQ stock market for technology-heavy companies. Oddly, the number of times the term “business model” appeared in business journals follows a pattern that resembles the shape of the NASDAQ market index. It is not quite clear what to conclude from this observation besides the fact that the topic of business models probably has a relationship with technology.

In the article “Business Models on the Web” by Michael Rappa writes: Business models are perhaps the most discussed and least understood aspect of the web. There is so much talk about how the web changes traditional business models. But there is little clear-cut evidence of exactly what this means. In the most basic sense, a business model is the method of doing business by which a company can sustain itself — that is, generate revenue. The business model spells-out how a company makes money by specifying where it is positioned in the value chain…

“… all too often, a successful new business model becomes the business model for companies who are not creative enough to invent their own. ~ Gary Hamel

In the article “Focus on Business Model Innovation and Increase Growth” by Gunjan Bhardwaj writes: Business model innovations come from new entrants, but incumbent firms can also reinvent their business model to stay competitive and to outperform competitors. What is a business model? A business model can be defined as the combination of “who”, “what”, “when”, “where”, “why”, and “how” a company provides its customers with its products. Business model innovation is the discovery of a new way to do business in an already existing business, or in a new start-up business.  Creating a new business model means to discover new sources of revenues; thanks to new technology, changing demographics or consumer behaviours…

According to the observations of ‘Mitchell & Coles’, who have studied several successful public companies, the most effective firms were making important business model shifts every 2 to 4 years. Continuing business model innovation is essential because it can help companies to prosper… Firms should learn to cannibalize their own businesses before the competitors do. In addition, when a firm changes several aspects of its business model, it makes its business model innovation very hard to duplicate by competitors and benefits from significant growth and increasing profitability.

In the article “Free: a Tactic, not a Business Model” by Anne Zelenka writes: Every time an economic bubble develops, many will tell you how “this time it’s different,” how “this time the rules have changed.” The lie of the Web 2.0 bubble is that ‘free is the way to succeed in the new economy’: That’s not true. The rules of economics have not changed. The best way to make money in the new economy, in the Web 2.0 economy, comes down to the same fundamental business model that has always existed: create something of value for people who will pay for it.

Fred Wilson, venture capitalist(VC), wrote in defense of free: “free is a great way to make money. You just have to know how you are going to get paid for being free”. To be fair to VCs, they’re not advocating doing everything without pay. They’re suggesting ‘free as a tactic’ towards getting paid in other ways; through advertising, or by premium services (as in a freemium model), or maybe even through being acquired by another  company. “Free is only a tactic, not a business model”.

In the article “5 Business Models for Social Media Startups” by Jun Loayza writes: During the first Internet boom, the most common business model was probably, “get a ton of traffic, then figure out how to make money”. Today’s social media startups are finding unique ways of generating revenue from the very beginning. Here are a few of the revenue models:

  • Freemium Model: Offer a basic service for free, while charging for a premium service with advanced features to paying members.
  • Affiliate Model: Drive traffic, leads, or sales to another affiliated company’s website.
  • Subscription Model: User pays a fee, generally, monthly or yearly to access a product or service.
  • Virtual Goods Model: User pays for virtual goods, such as upgrades, points, gifts, on a website or in a game.
  • Advertising Model: Sell advertisements against their traffic; the more traffic and the more you can charge for ads.

In the article “Business Models” by Dick writes: Focusing on business model too early can hurt a company’s prospects. When asked about Google’s lack of a clear business model, when he  originally backed the company, John Doerr is said to have responded “With this kind of traffic, we’ll figure it out”… Be laser focused on having your company be passionate about product and passionate about customers, you don’t need to be passionate about revenue until the business model reveals itself. You try different things…. So, we come to this curious world in which some people say “sure that’s great, but what’s the business model” while other people are saying “don’t worry about the business model right now, grow, grow, grow”…

In the article “What is a Business Model?” by Audience Dialogue writes: When designing a new business, the model it uses is likely to be a crucial factor in its success. The other type of business that needs to worry about a business model is a business in a steadily declining market. ‘Chesbrough & Rosenbloom’ point out that “while the term ‘business model’ is often used these days, it is seldom defined explicitly“… Roger Clarke created a framework for e-business models with four questions, and answers to these questions would form a business model:

  • Who pays? (e.g. consumer, producer, or third parties?)
  • What for? (e.g goods, services, expertise, assurances of quality or security.)
  • How much? (e.g. currency)
  • Why? (e.g. perceived value)

In the article “What is Business Model?” by Umair Haque writes: Business model converts innovation to economic value for the business. The business model spells-out how a company makes money by specifying where it is positioned in the value chain. Simply put, a business model describes how a business positions itself within the value chain of its industry and how it intends to sustain itself; that is, generate revenue. “The classic business model that has dictated the structure of traditional companies is so at odds with contemporary economic currents that is must and will disappear”…

In the article “The Best Business Model in the World” by Robert Pozen writes: The best business model is also the simplest: make stuff that’s insanely great: That is, it amazes, enriches, and inspires. That kind of stuff doesn’t need a hard sell, a new market, or a convoluted product range. It just needs — to be. Business model innovation is often self-defeating and self-destructive. The real problem with business model innovation is that it dilutes the incentives to make good stuff in the first place…

In the article “Reinventing Your Business Model” by Mark W. Johnson, Clayton M. Christensen, and Henning Kagermann writes:  One secret to maintaining a thriving business is recognizing when it needs a fundamental change. Apple introduced the iPod with the iTunes store, revolutionizing portable entertainment, creating a new market, and transforming the company. Apple did something far smarter than take a good technology and wrap it in a snazzy design. It took a good technology and wrapped it in a great business model. This model defined value in a new way and provided game-changing convenience to the consumer.

Business model innovations have reshaped entire industries and redistributed billions of dollars of value. Retail discounters such as Wal-Mart and Target, which entered the market with pioneering business models, now account for 75% of the total valuation of the retail sector. Low-cost  airlines grew from a blip on the radar screen to 55% of the market value of all carriers. Fully 11 of the 27 companies born in the last quarter century that grew their way into the Fortune 500 in the past 10 years did so through business model innovation…

“In all enterprises, it’s the business model that deserves detailed attention and understanding”. ~ Mitch Thrower

In the article “5 Influential Business Models” by Jane McGrath writes:  A business model can make or break a company, no matter whether its product is fantastic or just mediocre.  Henry Ford, famous for using the assembly line in his car factories, neither founded the world’s first car company nor invented the assembly line. Borrowing the idea originally used in the meat-pa­cking industries, Ford was able to go after a new market in his industry to great success. It goes to show that in the dog-eat-dog world of business, it’s often not as much about the product as it is about the process.

Bu­siness strategy may not be a science, but using the right method with the right materials in the right place at the right time can create explosive results. What’s particularly fascinating is how companies ride to success largely on the strength of their business models. Some of the most interesting business models are: Dell [‘just-in-time’ manufacturing]; Amazon.com [direct-to-consumer service];  McDonald’s Corporation [ real estate, fast-food assembly-line, franchising];  Microsoft [operating system, personal computer, non-techie-community, Office suite]; Wal-Mart [retailer, no-frills-low prices, rural areas]…

Getting the business model right is often the difference between surviving or not, between being truly transformational or simply incremental. Many business models in the private sector must demonstrate simplicity, precision, and focus that can be communicated in just a few words… Business models are as relevant to the public sector as they are to the private sector…

“This leads to the question of whether business model innovation and strategy is really just the same thing. Certainly successful business models should also have sound strategic principles behind them and one of these is the central concept of ‘fit’. This is an old idea made popular by Michael Porter in the 1980s and it is really about lining up all of your business operations behind a central logic of value creation” ~Tim Kastelle and John Steen

Unique Marketing Techniques for your Home Business

In Uncategorized on April 28, 2011 at 3:04 pm

 

Jay Conrad Levenson stated in one of his books something to the effect that the internet was a guerilla marketers paradise.
In fact I recommend reading one of his ‘guerilla marketing guide’ books because, being a home-based business owner you probably do not have a sizeable marketing budget set aside for the online promotion of your site. Actually the vast majority of small business owners have no budget at all for these types of activities. With this in mind, you will want to use the built in advantages of the world wide web which can provide a more or less level playing field for the “little guy”. It’s when you begin to promote your home business online that you need to activate your guerilla marketers instinct and use some of the free methods available for bringing eyeballs to your home-based business site.

As you probably already are aware, your website is essentially useless until people see it so this is the arena you need to focus your efforts. The net is getting more and more competitive all the time so you will definitely want to use it particular marketing advantages. After all, if you were to market your home business in print magazines ot TV spots the cost would almost certainly be prohibitive. But compare that to the internet where there are a plethora of promotional activities which are either free or cheap. What has worked the best for me in the past is to spend a little extra time preparing my web pages for the search engine spiders. This process, sometimes called SEO, is just a matter of making certain that the keywords you are trying to rank high for are in your title and body of your website, as well as in your domain name itself if you can. There are also free resources on the internet which let you research keywords (overture term checker tool for example) to help you in deciding which ones are best for your site. This area of research is completely free, except for your time of course. Once you have your site “optimized” or search engine ready you may spend time on free activities like link building and submitting your site to the many general or niche directories.

Trading web links is a time intensive activity that many of your better financed competitors will neglect to fully take advantage of. You simply need to seek out other related yet non-competing websites that are willing to trade. You will have to sift through a number of uninterested sites to find ones that will link to you but it is worth your time. Just don’t overdo it. Google now only wants to see a lesser percentage of your incoming links to be the reciprocal kind so only use this method for maybe a quarter of your overall incoming links. Also keep in mind that your own pages which link back to your homepage count for link popularity as well, so you should spend time producing original content pages.

I also suggest that you spend some extra time submitting not just to the primary web Directories like Goguides the open directory project, but also to the smaller niche directories as well. It would also be a good idea to write an article on your area of expertise and submit it to the many content providers that are out there such as articlecity.com. Webmasters may post these articles in return for your “byline”, which contains your URL. This is extremely effective and is often overlooked by your competitors. Posting to the Usenet, bulletin boards and free classifieds such as craigslist.org are time consuming tasks yet can help give you an edge. Also use the “sig file” in your e-mail to help promote your URL.

LinkedIn can actually explode your internet/network marketing business

In Uncategorized on April 28, 2011 at 2:47 pm

 

There are many social marketing tools out there, but for MLM recruiting nothing beats LinkedIn. I learned these techniques from my friend Larry Beacham, the “King of LinkedIn”.

First, always think about the marketing platform and the people who use it: why do they use it and what do they want to achieve. You can’t go on LinkedIn with the idea that you are going to tell everyone how great your business is and they’ll all jump on board. You can’t invite strangers to connect with you, because they will send up red flags against you.

LinkedIn is primarily a giant network of business professionals. So the people who are on LinkedIn are looking to connect with other professionals to grow their business networks, and find people who can assist them in their business or career. Think about the mindset of someone using LinkedIn. Generally they are there to learn tips, strategies, and tools for success. In all your marketing make sure you position your business and yourself in a way that will appeal to the person on that platform. With that in mind here are a few success tips that will help launch your LinkedIn Network Marketing success:

Position Yourself
Now on Facebook or MySpace it might be appropriate to put a photo of you on the beach, update your profile with the great lifestyle you are leading, but on LinkedIn you must always be professional. Put up a good professional looking photo of yourself, talk about your experience and your business opportunity in a professional way. You are establishing yourself as someone who can truly assist others in achieving their goals, so discuss your role as a business owner from that aspect. Who do you assist? What sets you apart as someone who has their solution? It certainly doesn’t need to be unfriendly or stiff, but always professional.

How are you already Helping?
As always: provide great relevant content! Most people use the discussion boards to mastermind and learn. This strategy is simple: choose a target market and then join any related groups. Write an informative article everyday. Information they can actually take away and apply. Put that article as a discussion on each of your groups. It’s fine to have the same article on multiple discussion pages, as long as it’s good content. Put your name, phone number and your website as a signature to the article, and people will visit your site.

How are you Connecting?
You need to make sure you don’t rush to connect to people in LinkedIn. How you connect is very important. Some people send connection invitations to people they have had no interaction with before. Once you’ve connected to someone on LinkedIn you have access to their personal contact details and their network of people, so people are a lot more guarded about who they connect with. Don’t ask for a connection until you have had a conversation or some contact with them. If someone comments on your article, then invite them to join your network and remind them with a personal note that you shared a discussion. If you take the time and have the patience to work this way the people you do connect with will be more targeted, they will know who you are and are a lot more likely to check your profile, sites, etc.

As with all marketing you must remain consistent. You have to build a reputation and show people that you truly are a leader. Taking the time to do this will generate leads that actually want to work directly with you, that know and trust you, and understand that you can truly provide assistance. Apply this everyday Mon-Fri, and you will find that people come to know that what you are providing is beneficial and that you really are a leader in your field.

Remember in Network Marketing, the leaders always win. Everyone wants to work with someone who can truly assist them in their success. Build a strong reputation (and it only takes a few weeks consistent work, I had several leads from this strategy the FIRST DAY I implemented it) and the rewards will be never ending.

This is just the beginning of how you can explode your business with LinkedIn. Get educated, start creating content, and take your MLM business to the next level