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The Temptation of the Cheap
By Robert Skrob | March 10, 2010
For 6 years, select information marketers have been “by-invitation-only” subscribers to Dan Kennedy’s Information Marketing Special Reports and Info-Marketing Letters. Now, for a limited time, Dan has opened his vault to make these available to you.
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.
Topics: Information Marketing | 2 Comments »
March 11th, 2010 at 3:40 PM
Hi Dan,
However, the barriers to entry are tiny compared with off line. And small to Barnes and Noble is big enough for me. There is lots of room for people who want to be freelancers to make very very good incomes. You can keep big and the big headaches, small is beautiful and easy. I don’t need to big I want to be happy and have a fulfilling and easy life. Dedicating my life to business sounds dull and empty – work to live don’t live to work.
March 14th, 2010 at 1:51 PM
I enjoyed reading this article. I don’t often reply to internet marketers’ email newsletters, but…
The overall size of the market in any particular niche is not as important to your success online as simply working in your strengths.
Dan Miller of http://www.48days.com has a podcast and he often features people making 6-figure incomes in really odd niches you wouldn’t necessarily have thought of, some online and some off-line, but the key to success is working in your strengths, not just choosing a really big target. If you really drill down into your interests and passions first, you might find a really tiny niche that can support an online income easily.
It’s about really knowing what you want your life to be like, and what kind of work you love, not just where is the biggest marketplace.