If you’d like to find out more about the archives, visit www.DKArchive.com. Here is an excerpt from Volume V, Number 4 of the archives. I’m sure you’ll find it valuable and enlightening.

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As I discussed in the last issue, most of the trend news regarding Internet marketing is, these days, gloomy. Online commerce is still growing but not nearly as quickly as it once did; in the U.S., total retail sales for 1st quarter of ’08 came in at about $990 billion with Internet sales at about $30 billion, just 3% of the total … and growth for the most recent 3 calendar quarters has been about 3%. From 2003 to 2004, sales growth was 25% from 2007 to 2008, its forecast as low as 5%. E-mailers can expect to see their open rates continue to fail as Road Runner, AOL, and Yahoo continue to increase spam screening. The bright spots are for those interested in or focused on doing business outside U.S. borders. The U.S. is home to only 19% of all Internet users, and the growth and growth potential is elsewhere. While about 75% of the U.S. population is already using the Internet in one way or another (= saturation), only 12% of China’s population is—although that is 160 million; and only 4% of India’s population—42 million. These explosively growing economies and business communities have gigantic populations, thus enormous numbers of new users arriving and yet to arrive, and a thirst for ‘made in America’ information and entertainment. (Source: The Futurist). As I see it, the greatest virtue of the Internet as media: near zero barriers to entry, business start-up costs under $500.00, and nominal cost of use (although somewhat illusory, if you consider buying traffic or manual labor) is also its greatest drawback, producing massive clutter, confusion, consumer overwhelm, and price-cutting competition. One of its current uses in our industry that is most interesting is not in selling things but in being the deliverable itself, with interactive community sites as the business. Another trend to be aware of is the increasing willingness of Internet users to be actively engaged in dialogue … for example, visits to ‘question and answer websites’ are up 118% from a year ago, although visitors to Yahoo Answers accounted for 74% of that activity. (Source: Research Alert, Hitwise). Finally, in the bad news department: more on my long argued position that counting clicks is silly. Recent studies by AOL and other research groups found that just 6% of Internet users account for more than 50% of all clicks on display ads/banner ads … and the heaviest clickers earn less than $40,000.00 a year and account for less than 15% of online commerce. The relationship between clicks and sales just isn’t there, and is becoming harder to predict or substantiate. Microsoft’s ad network and Google—which earns most of its income from pay per click—are busy devising different payment models for search engine advertising. (Source: Business Week, 3/10/08).

ABOUT THE AFOREMENTIONED SOCIAL NETWORKING & COMMUNITY SITES … AND BUSINESS STRATEGY … Marc Bell brought Penthouse Media out of bankruptcy just 4 years ago for $52 million. Its magazine, once the racier, edgier rival to Playboy, has been made over with a less explicit approach, its newsstand covers now akin to the Sports Illustrated bathing suit issue (or many women’s magazine covers!). But it’s a tame front for a carefully constructed portfolio of 20+ adult social networking sites, assembled or purchased at a cost of over $500 million, including AdultFriendFinder—boasting 22 million active members. Think of it as Match.com. for people seeking sexual hook-ups, searchable by activity preference or fetish, chock full of more interesting photos than at Match. It alone brought in $285 million last year. Surprisingly, Penthouse Media also recently acquired BigChurch.com, a site for Christians seeking ‘prayer mates’ and ‘friends,’ it with 45 million active users. Next up, going public with hope of raising $250 million in the IPO, to retire debt used for these acquisitions, to free up cash flow to acquire more. Life Tupperware, PM is far from a sex magazine publisher; now a process expertise company simultaneously seeking to dominate its original niche with offline/online cross selling but also branch out to other product and audience categories. Whether PM can prosper as a public company is questionable—Playboy hasn’t. But its directions are, well, provocative.

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If you enjoyed this excerpt, you may want to review the entire Dan Kennedy archive. It is available for a limited time at www.DKArchive.com. Every one of the 72 issues is packed with advanced, specialized, experience-tested insights into what it takes to succeed within the info-marketing business. Visit www.DKArchive.com to reserve your copy.

Here is a summary of what I cover on this program:

• The best ways to get your customers to buy from you more frequently
• Referral programs to get your customers to refer new customers to you.
• How increasing profits can boost your profits faster than any other strategy.
• What you can do to increase prices even if you are in a highly competitive industry.
• Robert’s strategy for transforming a $400 sale to a $5,200 sale.

Business Profits Radio is a weekly radio show dedicated to helping business owners make more money and go home earlier to spend more time with their families. Enter your email address in the box at the right so you are notified when new shows are posted.

If you’d like to find out more about the archives, visit www.DKArchive.com. Here is an excerpt from Volume V, Number 2 of the archives. I’m sure you’ll find it valuable and enlightening.

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Recently, the writer and publisher of a good marketing newsletter which I’ve enjoyed reading ceased printing and mailing issues to his subscribers——after 6 years——and has substituted only an online blog version. In his case, most readers got their subscriptions as bonuses with other stuff, but that’s really not the point. Had he asked, I could have proffered considerable empirical evidence of this proving suicidal for at least five info-marketers I know of. If you think you can sustain a relationship that produces quick response to offers including pricey ones, high seminar attendance, etc., merely by putting stuff up at a site and——as he did——telling them, if they insist on having it in print, to print it out for themselves, bubba, you’re sadly deluded. Maybe the time for this will come. Most hope so. And I do understand its lure and its temptation. I too am tempted. But I resist. Because it is stupid and cheap. It eliminates a very significant segment of very affluent customers (just like me) who will have nothing whatsoever to do with it. I’ll never read another word he writes. Another newsletter publisher refunded $4,995.00 to me because of this. And for everybody except true Internet geeks ’n freaks under age 35, it ruins the relationship. It takes all the fun out of receiving and opening a package each month, of physically handling the goodies. It takes away convenience, a way of jotting notes, filing. It is hard enough to get people to read what we send them, let alone telling them to play fetch. They won’t. If you blog and nobody reads, has anything been written? And it is insulting. It is the equal of a birthday greeting or thank you note via cold e-mail vs. getting a nice card somebody took trouble to pick out, jot a handwritten note in and mail. Ours are not really information businesses; they are relationship businesses. Phone sex, e-mail sex may be tolerated for a while, maybe even seem cool in the very short-term. But over time, everyone loses interest: everyone seeks flesh. (Point: the Internet, plethora of over a million porn sites including fully interactive sites did not wipe actual prostitution or blind dating or other humans-seeking-humans off the earth. Instead, the Internet has created a boom in prostitution as well as facilitating fortunes made via dating and find-a-mate e-businesses.)

An info-marketer will gradually see his entire relationship with his customers disappear into ether without offline deliverables, without frequent goodies delivered physically, even without seminars and events. Always sorry to see somebody shooting bullets into their own foot. Some succumb to this temptation because they simply can’t keep subscribers and make money——and in these cases, their list and livelihood disintegrates at an even faster pace upon switching to the less costly e-deliverables. Others simply opt for cheaper and easier absent economic necessity, as preference. But the preferences of people who give you money can’t just be ignored.

THE PROFESSOR OF HARSH REALITY’S’ DIRTY LITTLE SECRETS OF E-COMMERCE. 12% of the total number of e-commerce web sites are in the Adult-Entertainment industry, encompassing 4.2 million sites, fed by a mind-boggling 58 million search engine queries per day … roughly 25% of all search activity. No other category can claim comparable concentration and dominance. And the 12% number is of sites; the percentage of actual commerce, higher. A payment processing company created just to be “the PayPal of adult sites” went from zero to $73 million in revenues its first six months. You then have to look at eBay, Amazon and the giant community sites like Facebook, MySpace, etc. As you strip out these big chunks of online commerce, you arrive at the arena in which most readers of this Letter as well as most consumer goods and services marketers play in——and you realize just how small it really is. There, you might further subtract the big national chains’ bricks/clicks combos; the Wal-Marts and Barnes & Nobles of the world. The e-commerce arena gets even smaller. This reality should not be ignored. Thinking about it leads down two important paths. First, away from the Internet, to the space that is still much, much bigger, where much more commerce is done, where many more businesses prosper: print media and direct mail. If you do a bit of research and compare the numbers of successful direct marketers as well as the revenues generated, you will find_“online” a teeny-tiny player vs. “offline.” And that may affect your decisions, about weighting of your investments of time, energy and money. Second, to the true online opportunities and sensible uses, which I would prioritize as follows:

a) Being in the adult entertainment business (which I am not and have resisted all invitations and sane economic arguments for entering, and do not personally suggest or endorse [or criticize either], but purely from the standpoint of economic reality, somebody infatuated with and highly skilled at “Internet marketing” would quite obviously consider).

b) Trying to create the next mega-sensation that leads to some big dumb company buying you or going public. Interesting. Doable. The kid behind Facebook is 29. But. Far, far far from easy. Or more formulaic: creation and/or acquisition of many very niched, special interest versions of MySpace or Facebook or eBay, etc., that, in aggregate, make up a big business. This, too, is going on as we speak.

c) Bricks and clicks: using web sites and online marketing to support retail stores or showrooms or other physical businesses and, in closed loop, using those businesses’ ability to acquire and organize customers to feed the online businesses. This is actually what we hope to develop with the DentistryForDiabetics® business I’ve helped develop and launch, with Platinum Member Dr. Charley Martin … and another business I’m involved with, in the invention stage.

d) Lead generation mechanism, for offline marketing and sales follow-up. Web site addresses as alternate phone numbers; web sites as expanded ads, lead capture develops and, in some cases, sales process support (e.g.: webinars, online infomercials); e-mail as instant and on-going lead nurturing. This is the most common and sensible use for the Internet in most info-marketing businesses.

e) Fulfillment media, such as information or entertainment content, extensive archives of information, automated and illustrated customer service and problem-—solving (the video that shows the customer how to assemble the toy), etc.,—with caution not to make it 100% of the fulfillment.

Unless you pursue (a) or (b)——and arguably even then——thinking in terms of being an “Internet business” or “e-commerce business” is, in truth, very, very, very small thinking, and very dangerous and naïve thinking. It’s small thinking because you restrict yourself to one media pond, the smallest of the ponds, where the least amount of money is made, excepting, again, (a) or (b). It’s dangerous for so many reasons. A biggie: zero barriers to entry or knock-off, so whatever you go to great pains to create on the Internet can be copycatted in hours for pennies. Nutri-Systems, for example, has some defenses against rapid replication by hordes of look alike, cheaper priced competitors because their marketing encompasses TV, print, direct-mail, package inserts and the Internet, and requires capital, infrastructure, organization discipline and multi-media expertise to clone. EDiet.com has no such defenses.

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If you enjoyed this excerpt you may want to review the entire Dan Kennedy archive. It is available for a limited time at www.DKArchive.com. Every one of the 72 issues is packed with advanced, specialized, experience-tested insights into what it takes to succeed within the info-marketing business. Visit www.DKArchive.com to reserve your copy.

Here is a summary of what I cover on this program:

• How to use the power of your customer’s habits to get them to choose you, over and over again.
• The real reason customers choose someone else other than you.
• The single best way to overcome sales objections.
• Making your company irresistible in an environment where many customers are afraid to make a purchase decision.
• The secret desires your customers have that you may not be addressing.

Business Profits Radio is a weekly radio show dedicated to helping business owners make more money and go home earlier to spend more time with their families. Enter your email address in the box at the right so you are notified when new shows are posted.

If you’d like to find out more about the archives, visit www.DKArchive.com. Here is an excerpt from Volume V, Number 1 of the archives. I’m sure you’ll find it valuable and enlightening.

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The list of present, evolving and potential “problematic changes” confronting info-marketers is far too long for this space. It includes rising front end sale costs, rising difficulty and cost of filling seminars, rising dropout numbers in continuity, clutter and competition, intellectual property theft, aforementioned regulatory interference and threats, changing consumer/client demands with emphasis on services vs. education, and many, many more. Too many of these things are a plague upon us—for which fear and loathing are the only responses. For others, these very same things are golden opportunities to reinvent, to erect enormous barriers to entry or competition, to thin the competitive herd, to build iron cages around customers. No man has the exclusive right to building an ark this time around. Every info-marketer has the same opportunities and choices.

Anyway, in this issue, I decided to focus on “Big Things.” Big ideas, big issues. Hope you find them valuable.

BIG THING #1: CONSTANCY, Hard to believe I’m entering the 5th year with this newsletter. I was working on it the morning of my 53rd birthday and stopped to give a little thought to the role newsletters have played in my life. In 1973, I got my first (and only) job as an in-field ‘traveling salesman’ covering an impossibly sized five-state territory for a book publisher, to call on every bookstore, college bookstore, gift shop, toy store, supermarket chain, drugstore and drugstore chain. The first thing I did was create and mail a monthly newsletter to all the accounts. While I never visited half of them and never once set foot in one of the five states, I got mail orders from old and new accounts via my little newsletter. And it made me more welcome where I did physically appear. At the time, I not only had to write it but prepare its body copy on IBM typewriters, set its headlines manually with peel and stick type and an X-Acto knife, paste it up on art boards at a drawing board and take it to a print shop for production. My first business newsletter was ‘Marketing Your Services’ (for a niche market, speakers), starting in 1978. Since 1978, I’ve never been without the task of preparing at least one monthly newsletter. Never. There’s never been a Christmas season when I haven’t been working on my January issue or issues. It got easier when computers came along and Carla took over the prep. It’s even easier now that Bill produces and mails them——all I now do is pull together content and write. It strikes me that the info-marketers I’ve studied or been fortunate enough to get to know or work with, who have not only been phenomenally successful and wealthy, but sustained themselves over multiple decades, all have had one thing in common: consistency. By that I mean, there has been one thing they’ve always done, never stopped doing, stuck with. A different thing for different ones. But something they’ve had as their work that they never interrupted, set aside, got lazy about, became inconsistent about. In Melvin Powers’ case, it was a set number of 1” display and classified ads in a myriad of magazines every single month. In Napoleon Hill’s case, it was a new book every year——an example I’ve also nearly emulated. In Earl Nightingale’s case, a daily radio broadcast——today’s comparable might be the daily email. In many, the newsletter has, specifically, been a constant. It seems to me you need a constant of your own.

BIG THING #2: STEP UP. On our year-end conference call for my Platinum Members, one, Michael Gravette, told of a $900,000.00 increase in sales in 2007 vs. 2006, against best prior year increases of $200,000.00 or so. The biggest contributor: his stepping up from small, fractional ads in the back of the magazines reaching his prospects to consistently running full-page, copy intensive ads. Pleased to say I had some influence on the ad itself, so you may find the copy interesting and instructive. Of more interest to me, there are a number of opportunity marketers who have been running the very same, small, fractional ads in these same magazines for 20, 30, 40 years——who have never stepped up. I’m convinced, from experience, that I could take any one of them and produce more growth (and NET PROFIT) in just 12 months than they’ve had in the prior 12 years by getting them to step up to big ads, aggressive direct-mail, effective online marketing, comprehensive follow-up. Did it with ‘Gold by The Inch.’ Of course, there’s nothing wrong with staying small and somewhat invisible and just chugging along, making a nice income, and playing a lot of golf or indulging in whatever non-business interests you have, if that’s what you truly want. I got there once myself, and am headed there again. But should you want more, it’s actually pretty simple: you can’t be big being small. Joe Sugarman built his original direct marketing giant JS&A (the forerunner to The Sharper Image) by dominating the media he advertised in … full-page ads when others ran tiny little ads even in one magazine, going from one to two to eight to twelve.

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If you enjoyed this excerpt, you may want to review the entire Dan Kennedy archive. It is available for a limited time at www.DKArchive.com. Every one of the 72 issues is packed with advanced, specialized, experience-tested insights into what it takes to succeed within the info-marketing business. Visit www.DKArchive.com to reserve your copy.