Acquiring My Money As Your Customer

August 6, 2009 by

To balance out a How to NOT get a customer, here are some guidelines for you, the software vendor, service provider or internet marketer, for acquiring my money, perhaps on a regular basis.

NOTE: these are my experiences as a customer.

How to ask me for money

Ask me for money after you demonstrate your value to me. One way to do this is to give me something I can use right now, for free. Show me, demonstrate to me, or tell me something I really need to know, that I can put into practice immediately. Make a short list of your “best-of-the-best” material, explain in bullet point form. In short, give me enough value in actionable material, up front, such that if I never, ever came back, I would still have materially benefited from reading your material.

The reason this works:

  1. No matter who you are or what you know, if you sell information products there is almost 100% certainty that whatever you’re selling on the internet, someone else is giving it away for free. If I don’t know you personally, or you haven’t demonstrated that understand what I am looking for, and I do not have the technical expertise to evaluate your material, I’m not going to buy.
  2. When I benefit from your free material, I am much more inclined to purchase other products from you. It’s called upselling, and it works really, really well, provided your products have value to me.
  3. Full money back guarantee, no questions asked. This reduces my perceived risk considerably.
  4. If you’re selling services, I want a similar guarantee. I put deposits down last year for two different projects, which were only half completed, and neither provider refunded my unused deposit. I didn’t follow up at the time because the projects were small enough that the opportunity cost of dealing with the issue was greater than blowing it off in favor of billable work. I won’t use either provider in the future though, nor will I provide them with testimonials. Nothing personal, I’m sure they’re great folks, so I’m not going to be a hater and I won’t call them out by name.

Time bombs are so 1990s

If you’re a software vendor, don’t time bomb your product such that if I don’t spend the next month of my life dedicated to your product, I’m locked. Do something a little more intelligent… like a 100 hours of use or something. Enough to get me addicted. At this point, I am reluctant to either sign up for any service or download any software using wall clock time bombing. The only track I’ll leave on your web site is an IP address and a bounce.

You should consider offering money back guarantees as well.

A contact is a prospect

Consider treating anyone that contacts you as a prospect. Not a lead. Especially not a cost. Treat them as a prospect and sell them something.

Here’s the deal: if I take the time to contact your business, I’m probably interested in buying. I’m definitely interested in qualifying either myself as your customer or you as a vendor. Sure, it may turn out I’m a “tire kicker,” but have I’ve given you my attention. If we’re a bad match, send me off to someone who can help me out. I’ll still be a prospect for future sales. You have nothing to lose, and a customer to gain.

I contact maybe 10% of all the businesses I investigate. Probably less. Note that I am a software professional, and that when I provide technical feedback, even complaints concerning your product, I am giving you the gift of my time. You can view me as a pain in the butt, or you can say to yourself “My product/software caused an emotional reaction in this person… let’s see why that happened… and how I can benefit from such passion.” Think about it.

Furthermore…

If I have a question or a comment concerning something you regard as a core business element (perhaps concerning some operational detail of your web service), it’s safe to assume that many other people have had a similar experience and have not taken the time to contact you about it. Not responding to such queries may cost you. Ignore all such queries… it will cost you.

Customers are so inconvenient

For example, consider Intuit with their Quickbooks product. Inspires loathing in users. So much so that at least one accountant I contacted last year (who is also a tax attorney) categorically refused to examine my small business accounts. The accountant I did use doesn’t like it either, but it’s what her customers use, so she deals with it.

Some relevant facts here:

  1. I have never contacted Intuit, and never plan to. Their whole business model of customer lockin resembles Microsoft, Adobe, Autodesk and other corporations who regard customers as inconveniences. Why waste my time given horrible experiences with similar companies?
  2. I do not want to purchase QB 2008/2009, even though I may be forced to sooner than later. I will resent this purchase at least as much as I resent Microsoft forcing me to purchase Vista. QB 2006 doesn’t run on Vista, so I have to keep an old laptop in service, just to do my accounting. Or spend money to upgrade Quickbooks. That’s a bunch of crap. I resent it. I’d gladly pay a small fee for a 2006 upgrade for Vista instead.
  3. IIRC Inuit lost a pile of money last year.

I don’t know if these facts are related, but if I were running Intuit, you better believe I would be looking into it. And if the CEO of a fast-growing company like PBWiki can find my random blog post and contact me personally, someone in customer service at Intuit should easily be able to do the same.

As a result, I am actively investigating alternatives to Quickbooks, and will switch as soon as I can.

On the other hand, there are several really good forums out there for getting Quickbooks help. Intuit is smart to sponsor these, and I appreciate that.

If you, as service vendor, software producer, or internet marketer think all of the above is pure crap, I suggest you to do a little research on the Attention Crash. Then think again how to capture enough of my time to persuade me to purchase.

Filed Under: Marketing Tagged With: ,

Internet Marketing Is Hard to Master — So is everything else

June 30, 2009 by

This article comes as a response to a comment on Erica Douglass’s forum.

Dean, a commenter, notes he seems to be missing something something with respect to success in Internet Marketing.

I’m missing something too, but I think I know what it is.

Successful internet marketers are marketers first, and internet second. If there was no internet, they would still be successful marketers.

Here’s a few other things to keep in mind:

  • All marketing of any product anywhere is essentially a pyramid scheme of who can get in first and either lock up the market, leaving the crumbs for everyone else, or commoditising the money completely out of it. You can see this in IM with stupendously valuable products now being given away for the cost of monthly memberships. But it works the same way with laundry detergent, etc. (Think about starting a new laundry detergent company)
  • Related to the previous comment is that there is an implicit MLM — multi-level-marketing scheme — built into all of this. The first person that gets ahead, stays ahead, everyone else falls into line behind them, getting a radically smaller share of the market at each step.
  • The rich get richer. The internet is just exposing this at a much more rapid pace. This includes things like blog links, they all flow pretty much one way: from the lesser to the greater, or sideways to peers. Very rarely will someone “bleed their link juice” to an unranked or unknown blog, no matter how technically good the content. I link to provide value to readers, and as far as I know, there is not one single contextual link to any of my blogs anywhere on the whole web. I don’t worry about it, and I don’t attempt to trade links with people.
  • Quitters never succeed. If you’ve only been doing this 2 years, you need to listen to Brad Fallon on one of Eben’s videos: “We’ve been working on this almost 20 years… it’s nice to finally see a payoff.” (After a $13M launch IIRC).
  • EVERYTHING is difficult to master. If it wasn’t difficult, anyone could do it.

I’m in it for long haul myself. All of my blogs exist primarily as advertisement providing me with technical credibility.

Feedback welcome, let me know what you think.

Filed Under: Marketing Tagged With: , ,

The Small California C Corp — An Infinitely Deep Well of Cash

June 6, 2009 by

Among my many absolutely fascinating activities, such as watching exotic tropical milkweeds attempt to take over my apartment, I own (and have owned) in part or in whole a couple of small businesses, including sole proprietorships, LLCs and California C corporations. It’s been fun and interesting, and definitely an education.

First C corporation

One of the most interesting aspects of owning and operating a corporation is that the state of California apparently regards corporations as having bottomless pits of cash. As if “corporation” were some magic utterance by which cash magically appears. Thus, we got offers from various state agencies boasting “opportunities” to learn more about how to better comply with various regulations (that means sending cash or paperwork to the state). Such workshops have both direct and opportunity costs associated with them, over and above the regulatory compliance.

Then there’s whole notion that businesses pay taxes. They do not. They collect money from their customers, then give part of that money to the government. C corporations are taxed as an entity, then disbursements to the owners or shareholders are taxed again. At the small business level, this proved not viable, and when that corporation was dissolved, I went forward with an LLC. If the LLC really takes off, where “Eye Pee Oh!” makes sense, it won’t be that expensive to restructure the business appropriately. Sarbanes Oxley compliance will be the much greater expense in that case.

Business spam is still spam

We also got a phenomenal amount of business spam. Business spam is similar to regular spam in two ways:

  1. The spammer obtained our email address from a third party list which we were most likely involuntarily listed. That is, we gave some company your email address (so a salesperson could call, perhaps), and that company sold, traded or otherwise monetized our email address as a prospect. Exactly like all those “enlargement” (!) or “make money fast” schemes in your personal inbox. Completely and totally unsolicited.
  2. Getting off such lists generally requires doing more work than the common double optin marketing lists. You may need to call, log in, or otherwise alert the spammer that there’s a real live person at the other end of the email. Whence, they have a qualified prospect to move to a different list, and the spam continues. Since these outfits aren’t running confirmed optin marketing lists. I just report them as spam. I haven’t checked, but I suspect that “legitimate” advertisers got themselves exempted from CAN-SPAM because they had the lobbying muscle when the CAN-SPAM act was proposed, and email marketing was “new.” The immediate effect, of course, hammers the email marketers. The long term effect is blow back on business spammers hard, as all consumers become much more aware of the much higher standards required for email and internet marketing. As I said, any email I get not coming from an opt-in list I report as spam.

The difference between business and personal spam is (supposed to be) that business spammers actually represent real companies selling real products and services. I wouldn’t know, we didn’t use any.

But I really don’t know how the business spammers can be in compliance with the CAN-SPAM act. Can anyone enlighten me here?

Employees… not a chance!

The biggest eye-opener was the cost of employees. I now know why companies lay off instead of reduce salaries: it’s cheaper to lay off or fire. When you lay off an employee, you get rid of all the state and federal overhead costs associated with that employee. Those costs run about what salaries cost. That is, if your company pays you $75,000/yr, you cost them at least $150,000/yr.

For larger companies, this isn’t that much of a problem. It turns into a problem when you want to hire someone unskilled to lick envelopes, and it costs you $30+/hr. That’s untenable. Which is unfortunate, because my intellectual time is worth a lot more than that. And if the envelope licker cuts his or her tongue, there’s whole ‘nother can of worms I don’t want to deal with.

Which small business type for you?

Choosing the structure most suited for your business can seem challenging, but it’s much easier when you have the right information available. I used several of the great business books from Nolo Press to help me decide. Here’s a couple of things I would do different had I known (this is not business or investment advice):

  1. Consider making an agreement with your partners to use the cheapest business service you can find to handle the incorporation details… such that when you find you need to dissolve or start over, you’re only out $200, and you can try again with more knowledge for another $200. With my first C corporation, we hired a lawyer, and it set us back a large chunk of change. We could have have experimented with a dozen different ways to structure the company for that cost.
  2. If you’re physically mainly in California, feel free to incorporate anywhere, but you are going to be taxed as if you were incorporated in California. It’s kind of a racket, but it works well for the state: we incorporated in California instead of elsewhere.

Currently, no more C corporations. I’m staying strictly with LLCs and sole proprietorships.

What’s your experience?

Filed Under: small business Tagged With: , , , ,

Really Dumb Marketing Technique to Ensure Losing a Prospect

May 13, 2009 by

Ok, no nap for me, just rattled out of bed by an M3 earthquake… let’s see what’s in the Inbox since I’m up.

Here’s an email marketing newsletter from a web application company (let’s call them “XYZ”) I’ve been following. XYZ’s web application looks like it might be really cool (== replace Quickbooks), but I haven’t quite seen the benefits yet.

Now, I’m always on the lookout to find a Better Way to make and save money, to save time, etc., and like to test drive new software to see how I benefit. So let’s read on…

…long email…

…scan scan scan scan…

I don’t see anything immediately beneficial to me.

[Update for people unfamiliar with direct response marketing: No benefits to me means sucky marketing. Either they haven't targeted their list very well, they are listing features instead of benefits, or their sales copy just generally sucks.

If you don't have any knowledge of direct response, either buying from direct response or selling to direct response, you are not in my audience for this article.]

Until I get to the end and find this little pearl:

Please Note:
Your XYZ account is removed if you have not upgraded to a paying package and you have not logged into it after two consecutive months.

If you didn’t want to receive this email message click here to manage your contact preferences or click here to unsubscribe.

I saved them the trouble and unsubscribed. Now they are free to delete my test account at their leisure without troubling either of us further! Wow!

Within a couple of months, I doubt I’ll remember the name of this company.

I went from being a really good prospect, to being legally invisible to them (thank you CAN-SPAM). I had a demonstrated interest in the product: I signed up for an account, and I opted in to their monthly newsletter! Inspiring someone to opt out isn’t just leaving money on the table, that’s destroying potential revenue, deliberately!

Sell to me. I’m a good buyer. Ask all my friends. It’s easy:

  1. Tell me how I benefit.
  2. Don’t threaten me.

Easy peasy.

Filed Under: Marketing Tagged With: , , , , , , ,

Filing WithOut Reading: Subscribe to everything, FWORing for later search and perusal

March 16, 2009 by

For many popular search terms, search engines suck, and suck badly. For example, I just did a search on Google for a pinyin translation of money. Now, I’m Old Skool, and think pinyin is for p^Hwussies. Real Men use Yale system…

[Read more...]

Filed Under: Productivity Tagged With: , , , , ,

Speed of Implementation — How fast is “fast,” anyway?

March 11, 2009 by

Speed of implementation is the notion that successful business people implement new ideas very quickly, immediately if possible.

But what does that mean?

Does it mean having an idea in the morning and making it work by close of business? (Does “close of business” even mean anything for an entrepreneur? I digress…)

Maybe.

[Read more...]

Filed Under: Productivity Tagged With: , , ,

Speed of Implementation: The #1 principle determining business success

January 23, 2009 by

From inspiration to implementation, people who take action now succeed much more than people who postpone taking action.

We all have a story where we hesitated and lost, and sometimes lost big. Here’s mine.

Snoozers Are Losers

I used to do a lot of caving. I got pretty good at it. My ambition was large, larger than my capacity to achieve. Once, back in 1983, I was visiting some friends who were caving near Huautla de Jimenez in Oaxaca, Mexico. It was winter and I was fleeing an Austin cold snap, and recovering from flu. Now, the caves near Huautla are deep, really deep… but not the deepest… the discussion went more or less like this:

Dave: “So, where are there other areas that have deep caves?”
Gerald: “Look over there” (He points to the south) “You can see the mountains over there are higher, and it’s all cave country.”
Dave: “How far away is it?” (What a wuss I was, already looking for excuses!)
Gerald: “You have to go back down the mountain from Huautla, than back up further down the Tehuacan Valley. You should go over there.”
Dave: “I guess so…”

And that was the end of that… for me. A total failure to take action!

Two years later, some adventurous cavers from Los Angeles did walk up there… and found Cueva Cheve, potentially the deepest cave in the world!

That Was Then, This Is Now.

This morning (January 23, 2009), I had an idea: post 1 minute action items to my twitter feed, little tasks that everyone needs to do but procrastinates away. 30 minutes later, I launched 1-minute-do-it-now.com.

I have absolutely no idea how much traction 1-minute-do-it-now will get, nor how long I will be interested in pursuing it, but being able to move quickly from inspiration to implementation allows me to “fail faster” in the worst case. And that’s a good thing!

Fast Implementation a Critical Factor

In his Altitude marketing course, Eben Pagan notes that most successful entrepreneurs share an ability to rapidly execute, to take an idea from inspiration to implementation very quickly. This can be thought of as a “Speed of Implementation” strategy. Since strategy is useless without tactics, here are some tactics:

  1. If you don’t have a business yet, implementing better marketing or more efficient fulfillment doesn’t really apply. What you can do instead is “take the next step.” If you can’t implement the exact idea you have, implement something that takes you in the appropriate direction. For example, you can’t change the copy in your newsletters if you aren’t sending newsletters. So purchase an account from aweber.com and teach yourself to write newsletters.

    Tactical principle: Take the next step (Inspiration from Dan Simmon’s fantastic Hyperion novels).

  2. For some things, for example the “business instrumentation dashboard” advocated by Eben may not fit your business directly. You may not need daily balances because you take in revenue 1-2 times per month. Expenses the same way. However, just implement the dashboard exactly like the example and use it until you can figure out something a little more relevant.

    Tactical principle: Do it anyway.

  3. A personal example: my motivation for purchasing Eben’s product was to learn more about creating and operating a internet-oriented business. At the time, I was really busy doing something else for a client as part of my consulting business. However, the marketing principles from one business venture can be modified to apply to another.

    Tactical principle: Move in a parallel direction.

Adopting a “speed of implementation” strategy with the above tactics allows building a general infrastructure as you go. Very likely, whatever the original idea was, may never actually be implemented. And that’s fine. Because I am anticipating a point where I have enough infrastructure built that implementing a good idea requires no more than an evening’s work.

Some links

  1. John Furst provides more tactics for fast implementation:
    • You don’t have the skills to implement it?
      Find someone who has.
    • You don’t have the money?

      Improve something you’re already doing. Little improvements add up to some respectable results.

    • You don’t have the time?

      Learn more effective time management.

  2. Cheryl Clausen provides unique perspective on speed of implementation:

    The best time to take action on something that will move you closer to success is always now.

  3. Erin Blaskie credits Eben in this post on her secrets to success.

And here is Eben’s speed of implementation video, hosted at youtube:


httpv://www.youtube.com/watch?v=9C488d_tCrc

What about you?

Do you have a horror story to share? A story that wasn’t a story because you failed to take action now? Share it and let’s all learn!

What about success? What are your secrets to fast implementation?

[Published: Mar 27, 2008]
[Updated: Jan 23, 2009]

Filed Under: Marketing, small business Tagged With: , , ,