Tuesday, January 10, 2012

Buying profitable customers

As small business owners we often wrongly believe the most important thing in our business is our product. We spend so many hours, so much blood (and tears) building, refining, polishing and admiring our products, we are seduced into believing that our product is so good, customers will beat down our doors to get their hands on it. We invest ourselves in our own products. We love our own dog food.

 But product love is a mermaid song that will seduce your ship onto the rocks. If your navigation is set on product, rather than on gaining customers, your business will surely sink. You cannot make a profit without customers.

 Do you like dog food?

 If you like making dog food, you better find some dogs, or you`re going to eat it yourself.

 Gaining customers are the objective. Using products to do so is part of the strategy to reach your objective...merely a tool.

 Strictly speaking you don`t even have to have a product at all: You can sell other people`s products. You can even sell an idea for a product...if you have the customers.

 So lets look at the problem of gaining customers logically, soberly and calmly:

 Many, many, many small businesses say they market "by word of mouth." That "strategy" is slow motion death for a business. It is the result of product love: when one becomes obsessed with making the worlds best mouse trap shinier - instead of investing time, energy and money to find customers who will buy it.

 "Word of month" is not marketing. It is abdication. A non-strategy where you rely on fewer and fewer customers to sell your product on your behalf.

 Buy a customer

 So, rather than endless tinkering with a product, why not BUY a customer?

 Like big business does.

 They spend millions on advertising, branding and marketing. Effectively, they are spending money, to buy a customer, who will buy their (or someone else`s product) - which will make them a profit.

 You and I can do the same - without spending millions. Did you know we can buy a qualified lead (aka potential customer) for a few Rands from Google? Anyone (with a budget of R 10.00 per day) can set up an ad campaign on Google and buy clicks - ie a person to come visit a web site. You pay only when the lead arrives at your web site.

 Naturally you need an effective web site before you start buying clicks: A site designed with a carefully considered most wanted response, and with clear and powerful calls to action. Why would you want to waste money and effort to buy clicks to a non existent or ineffective web site, right? It works like this:

 3 Steps to buying customers (profit)

 1. Get (buy) the qualified lead:
 Pay attention to demographics like where the person lives, gender, age, language, time of day, day of week, etc.

 2. Use your web site to convince the lead to make contact with you:
 Understand your objective and use quality, original content to guide the lead to a most wanted response and then convince him/her (with a clear call to action) to give that response - fill in a form, download information, give his/her contact info, request a quote, etc.

 3. Contact the lead and make a sale:
 Follow up on the lead generated: make contact, discuss requirements, answer questions, build trust. Make a profit.

 (See our web designer service for more info and help)

 Which brings us to the question of how much to pay for a customer.

 Fortunately, that is quite easy to calculate. It is called ROI or Return On Investment.

 Without boring you with long formulas, it comes down to this:

 How to calculate return on investment

 1. Conversion rate: How many visitors to your site do you need to convince one to make contact? (The better designed your site, the higher this will be)

 2. Closing rate: How many contacts do you need to make a sale?

 3. Profit: How much profit do you make per sale.

 Example: If you need 100 clicks to make 1 sale and make R 100 profit from that sale, then paying R 1.00 per lead (click) is break even - waste of time because you are not making any money. So, I would offer R 0.50 (or less) per click...which translates into 100% profit (on your R 50.00 investment)...which is starting to look like good business.

 The bottom line
 

 In the final analysis a business exists to make a profit. If it does not, it wont.

 We can get all emotional about it and cry ourselves to sleep when we see our bank statement, but business is best done logically, calmly and soberly. Tears will not increase liquidity. Not even when expertly delivered in the bank manager`s office...on your knees.

 Buying clicks and using an effective web site to turn them into customers is a sure way of having a super successful year...so...good luck!

Friday, July 22, 2011

Is Facebook becoming obsolete?

If you think Facebook is "unsinkable" because it has more than 700 million members, both the Titanic and MySpace have lessons to offer. 

As recently as 2008, MySpace was the internet's biggest and most popular social media site.  The company was valued at US$ 12 billion at the time.

In June 2011 MySpace was sold for US$ 35 million.  MySpace was the fly.  Facebook was the windscreen.

It looks like history can repeat itself:

Google is in the process of slowly rolling out a new service called "Google plus" (Google+).  All indications are the superpower of the internet is about to make social media a lot more relevant and usable.

Instead of going after Facebook directly, Google is using its phenomenal power as search engine to plant a glancing blow on the Facebook chin.  A blow that might very well turn out to be the beginning of the end for Facebook.  At first glance the "blow" seems more like a girly slap with tissue paper rather than a Rocky you're going down punch.

It is a simple little +1 button.  A graphic button people can add to their sites and is shown in a list of Google search results.


Don't be fooled.  This aint no girly.  This is Google.

The little +1 button works like this: When you like a web site you click the +1 button on the site, or, if you see it in a list of search results, you click +1 next to it.  Exactly like the Facebook "like" button.

Boring? Can't blame the Facebook guys for snoring?

But.  Here a very clever plan comes together: by clicking that button, you tell Google you like that site and it should be moved up in your search results.  Just like an instant bookmark - Google will keep track of all the sites you like, so that, when you search for the same subject again, the most relevant ones will pop to the top.  You build your own "library" of the internet on the fly, with one single simple click at a time.  Your own version of the internet.


Cool, right?

But wait.   That's not all.  Not only will Google improve the rank of that site in your personal search results, it will also highlight that same site in all your online contact's (friends, acquaintances, colleagues, family, etc) search results.  You help them by showing them sites you think are good - when they are searching for it.

So what?

Then let's compare +1 with Facebook's "like":  When you "like" a site, it is published on your Facebook feed for all your fiends to see.  Cool.  Problem is, your geyser just developed a leak and you are looking for a plumber.  Two years ago, you can vaguely remember one of your Facebook "friends" liking a plumber's page, but that is gone in the grey mist of time...buried under a virtual Everest of constant status updates by everyone and his dog.  Gone.  Like it never happened.


Facebook's Achilles heel is that it has the "memory" of a teenager...about 15 seconds.  Everything is transient:  A torrent of never ending activity drowns out all but the present.

Now let's replay this scenario with Google+:  A friend finds a good plumber and clicks the +1 button on the site or on Google search results.  A link is placed in his feed, and, like Facebook it moves down the list as more updates are done.  BUT.  And this is the "Oh-oh!" moment for Facebook, when you conduct a search on Google two years later, the site that was +1'ed by yourself or a contact will now pop to the top of your search results - including a little picture of who +1'ed the site.


Web site recommendations when you need it, by people you trust.

Think about that a bit.

Are the Facebook fans pale yet?

No?

Ok, let's go on:  With your Google+ account you also set up a profile - much like Facebook, which also include profile pictures, photo's, and all the usual...including...your location.

So?

Google is now able to show you all the recommended plumbers (your own or those your contacts +1'ed), in your own area.  No need to contact a plumber in Llanfairpwllgwyngyllgogerychwyrndrobwllllantysiliogogogoch.  Bham!  Your search results just became a whole lot more relevant - tailor made by yourself, your friends and where you live.
Social networks just became a whole lot more useful.


I cannot think of a business that will not be impacted by this.

The rest of Google plus, is much like Facebook with profiles, photo albums, status updates, news feeds, chats and so on.  The major difference is that it is much cleaner and neater.  There are no applications buying or selling virtual pigs, calculating your love score or predicting your future based on the letter count in your name.  Major plus in my opinion.

One of the big differences between Google+ and Facebook are how "friends" are handled.  In Facebook (having originated in a university) a friend relationship is reciprocal...both parties agree to the "friendship".  You can group friends ("contacts" is a better description) in lists, but the implementation of lists are not obvious and most people do not use them.

Google+ approaches the connections in your virtual life from a whole new angle: they use "circles".  Essentially you have circles like "friends", "family", "colleagues", "hiking-buddies", "idjits", "ex-bosses" and so on.  You can place a contact in one or more circle and you can make new circles yourself.

Whenever you make a post: ie status update, photo upload, etc, you decide which circle(s) will see the update...or everyone on the internet.


Separate your lives:

With Google+ it becomes simple to post about your professional, personal and public lives without getting the whole lot embarrassingly mixed up.  The best part of circles?  It is one-sided, so you can add a person to one of your circles without the other person's permission.  For instance, I am watching Larry Page's (Google's founder and CEO) Google+ public updates whether or not he damn well likes it.  Next time I have a few minutes and a glass of red wine in hand, I'll hunt down more interesting people to stalk: I'm thinking people like Bill Gates, Pamela Anderson and ...well...whoever blows your hair back.

Why is this a plus?  Because, like twitter, you can follow people or companies you are interested in for news, views or, if that's your thing, what's on the braai.

(Tip: add the Cozahost Helpdesk to one of your circles, you will see all the sites we +1'ed when you search...so you benefit from all the work we do to find valuable resources online.)

Larry,  you know, my buddy on Google+, said there are 10 million people on Google+ already.  The service is still in test phase and you can only join by invitation.  Pretty impressive.  I'll bet the Facebook guys have trouble sleeping round about now.


Start using it:

If you are a Cozahost client and would like an invite to join Google+, email us at the helpdesk with your domain name and we'll get you on the A-list and in the front seat to witness this historic event of Google+ taking it's first steps on a journey to change the internet - again.

As for the +1 button: we will be adding it to all our clients sites we manage immediately.  We suggest you do the same.

And finally, you can visit my Google+ profile here (pretty much still under construction) - stalkers are welcome if you are entertained by my not so humble point of view and esoteric +1's on the internet.

If you like this post, please hit the 1+ button below this line: you'll win the lotto, your nose won't fall off and you'll pay less taxes.   

Friday, June 10, 2011

Do not try to sell on your web site

Is it a requirement for a business to have a well designed web site? My answer is: No, not really. It is as optional as combing your business's hair or brushing it's teeth.

Optional at your peril.

Consider your business cell phone: Would you say it is an essential part of your marketing? How much time do you spend on it? How much does it cost? How do you get prospects to call you on your number?

Now ask exactly the same questions about your business web site. How much does it cost, how much time do you spend on it? What do you do to get people to visit your site?

You can only talk to one person at a time on your phone. You have to sleep sometime. You are not always in a good mood, eloquent and persuasive.

On your web site you can "talk" to hundreds of people at a time. It never sleeps. It is always in a good mood, eloquent and persuasive. If you like you can publish sound clips or videos of you talking on your cell phone.

A no brainer if you ask me.

First, note this is the year 2011. Not 1999. Simply having a web site today is as expected as having a cell phone. It is no longer a competitive advantage, but rather an entry ticket. A basic requirement. Personal hygiene. If you expect millions of internet users will flock to your web site and throw their money at you, you will be sadly disappointed.

To see how unrealistic your expectations of your web site bringing you untold riches are, visit Google and type the the search words you think describe your business. Note the number of pages returned. That is your competition. Even if you beat them and make it to the first page, you still have to be effective in turning that web visitor into a lead.

Note I say "lead" and not customer. This is because, for the vast majority of sites, sales are NOT often concluded on a web site.

Making a sale online is very, very difficult - just like making a cold sale on a first phone conversation.

So, yes, you heard me right: sales are NOT concluded. Sales are INITIATED. Seldom concluded. Your web site exists mainly to educate potential customers about how your products and services can benefit them. To make contact with them and give them more information. In other words, to generate qualified leads which you will follow up to eventually conclude a sale.

In most cases I'd advise to not even TRY to sell on your web site. Instead, produce detail and quality content that describes in detail what PROBLEMS you SOLVE. Focus on the needs of your customer, because nobody wants to be sold. People want to buy - when they want something. Being "sold" is when someone wants your money, and none of us like that.

Lot's and lots of content on your web site attracts visors (via search engines). Your web site is how a prospect will see your company for the first time. The lasting impression you want to make is one of a friendly, neat and highly competent company. You PROVE you have this prospect (and your customer's) best interest at heart by providing information and by describing the problem in so much detail and clarity you show that not only do you understand the issue, you are also an expert on the subject.

And then, instead of trying to relieve your web visitor from his money as quickly as possible, suggest a harmless trade: His or her contact details in return for more quality information.

The higher the quality of your content, the higher the likelihood the visitor will be convinced you know what you are talking about and will WANT to make further contact.

After you (automatically) processed the request for more information, you can follow up on this - now qualified lead - to listen, to learn, to refine and to communicate. NOT to sell. Your objective is to find out if your product and your business matches the requirements of the lead.

If it does, he will buy FROM you. Be patient, nobody wants to be steamrolled and besides, do you really want to make a sale to a person who only will be dissatisfied afterwards? Of course not. So listen and communicate. If there is a match, the lead will become a customer.

You'd not be in business (anymore) if you did not genuinely care about your customers. So show your love.