Online Marketing Beyond Traditional Search

MoreVisibility.com has an interesting paper that summarizes options for marketing on the Web other than the traditional search, and these are:

• Contextual advertising = using pay per click at search engines partner sites (e.g. Google Adsense publishers) which are driven by theme or relevancy to keywords
• Second tier search engines = pay per click at the top 3 search engines (Google, Yahoo and MSN) is getting expensive, so check out other search engines such as Ask, Miva, FindWhat, Looksmart, etc. While the traffic may be of lower quality and conversions tend to be lower, the price difference makes these second tier search engines worth trying
• Local search = local clicks tend to be better in terms of conversions and leads
• Vertical search = search engines that focuses on specific types of businesses such as Business.com, Move.com or WebMD.com
• Affiliate marketing = promote your online business by signing up affiliates and rewarding them for the desired action achieved (sales, leads, signups, etc); the downside though is that it requires more resources in terms of management of the affiliate program
• Display advertising = the use of banner and interactive ads combines well with paid search advertising
• Broadband advertising = try video ads, which can be seen before a user can watch the video of their choice
• Rich media = allows for a more interactive experience with the user (just hope that it doesn't border into intrusiveness)
• Email marketing = should revolve around a specific call to action

There's nothing new to the list, but it can remind us of other options to use to reach our target audiences. Read the full paper

12 Characteristics of the Ideal Business Opportunity

According to the book The Maui Millionaires for Business, below are the 12 characteristics you should look for when choosing your business :

1. Something you are passionate about = the starting point of any ideal business is passion
2. Specific market niche = find a niche where your business can be top dog; do not become jack of all trades
3. Low start-up cost = having a low startup cost means you can use your money to start the business and bootstrap your business growth
4. Low fixed costs = the higher the fixed costs, the more you have to sell before you can break even on your costs
5. Deep funnel = work to build real connection with your clients and take them deeper into your business funnel
6. Recurring sales to your clients = the easiest sale you'll ever make is to an existing happy customer
7. Collect money before you fulfill your product or service = don't make the mistake of not having enough cash to operate
8. Power of pre-eminence = there are 2 ways to make your mark in the market: by being the best or being the cheapest
9. No perceived competition = have a clear, distinct position in the marketplace that jumps to your clients' and prospective clients' minds
10. Maximize the unique talents of you and your team = spend more time doing what you love and you will become more effective in your role in your business
11. Scalability = a business that can grow fast
12. Create intellectual property = the business consistently generates valuable intellectual property that you can sell or license
    

How Important is College Education to Entrepreneurial Success?

How important is college education to entrepreneurial success? How much does educational background and knowledge contribute to success as a business owner? Do you have to enroll in an Ivy League school to be successful in business?

Colleges and universities offer solid education, social network and access to resources to complement your studies. They take pride in helping ensure their graduates land top jobs, and much of the focus seems to be grooming young people for the corporate world and climbing the proverbial corporate ladder.

BusinessWeek had an article ("Who Needs the Ivies?") that looked at the correlation of education and entrepreneurial success. One of the studies the article mentioned was that of Jim Duggan, a senior technology industry analyst. The article states that Duggan's findings was

"... Attendance at top-tier schools might even be inversely correlated with
entrepreneurial success. These schools often focus on producing the next generation of research scientists and academics—not entrepreneurs. He believes that the elitism and confidence these schools nurture may work well in large corporations, but not in tech startups."

Personally, I think deciding to be an entrepreneur instead of a corporate worker is an individual's choice, though enhanced by the environment including schools. A risk averse person will still find solace in the steady paycheck of a job, even after attending one or two entrepreneurial classes.

Family and how entrepreneurship is viewed by the parents is a better gauge of whether a person will want to start and grow their own ventures rather than be employed by someone else. Children who see their parents enjoying the challenge, excitement and disappointments of starting a business are more likely to become entrepreneurs themselves.

But my hats off to the rare breed of entrepreneurs, who made it really big without college education. For these individuals, college education is not a prerequisite for attaining success. Here are some people from Forbes' list of the richest in the world who never completed their college education:

• Sheldon Anderson dropped out of City College in New York City to become court reporter.
• Lawrence Ellison is a drop out at the University of Illinois
• Bill Gates dropped out of Harvard
• Kirk Kerkorian is an 8th grade dropout
• Michael Dell dropped out from University of Texas
• Steve Jobs dropped out of Reed College
• Roman Abramovich is also a college drop out
• Amancio Ortega is also a self made man and dropped out of high school
• Li Ka-shing is also a high school drop out

Their stories can inspire you and give you confidence that you don't really need a degree to succeed in life -- as long as you are willing to work hard to make your business a success.

Most Effective Web Tools for Online Selling

Catalog Success magazine has an interesting article on the web tools and features that can bring the most returns for your ecommerce website.

According to the article "Maximize Your Web Tools" by Larry Kavanagh, here are the tools that your website must have in order to sell more (however, the article fails to mention vendors for these tools):

1. Customer rate and review feature increases product conversion 42 percent:

• Visitors to pages with highly rated products (between 4-5 stars) are 42 percent more likely to buy the product; while visitors to low rated products are only half as likely to buy
• Drive traffic to highly rated products by featuring them in your emails, placing them on the homepage and using them as landing pages for paid search.

2. Wish list helps you acquire new customers inexpensively

• Allows you to cross sell more effectively to help customers add more items to their wish list easily
• If the wish list tool allows customers to email and share their wish list to friends, it could be a way to entice new customers into the site.
• It also increases sale as friends and family of customers who created wish lists can now find the task of gift buying easier

3. Guest checkout which makes the shopping experience faster and better by giving shoppers the option of buying without creating accounts

• By allowing people to buy without asking them first to create accounts, you can boost sales by as much as 24%

4. Triggered emails result to 3-10x the response rate of bulk emails

• There are tools that integrate browsing behavior of the user on the site with emailing that proves to be significant revenue generator
• The downside is that these tools have premier prices, which may be out of reach by small online sellers

5. Personalized recommendations

• Use your shopper's past history to populate parts of your homepage with items the shopper may be interested in

6. Making full use of AJAX

• AJAX can make customers' shopping easier through quick orders

The above are tools that bigger businesses employ in their online stores to increase sales and improve conversion. Alas, many of these tools may be beyond the budget of small online ecommerce owners. But nonetheless, if you can afford to splurge on a web app for your store, consider the above tools.

Read the full article at Catalog Success magazine

Money vs. Control: What Do Entrepreneurs Want

What is your goal as an entrepreneur? Do you want to get rich, even if that means getting investors on board? Or do you want control, meaning you grow your business by yourself albeit slowly as long as you control the business? Or do you want a little of both?

This is a dilemma often faced by business owners. I know of entrepreneurs who welcome investors, even actively seek them, because they have grand plans for their business and know that they can only grow the business faster if they get outside help. There are also people who prefer their businesses to be small as long as they remain "masters of the ship."

Harvard professor Noam Wasserman explores this question in his papers, the most notable of which is "Rich vs. King: The Entrepreneur's Dilemma" . Wasserman recognizes that entrepreneurs are motivated by the profit potential in starting a business, but the profit motive often runs counter to other motives particularly the issue of control.

According to Wasserman's research, this dilemma typically happens when the business reaches the point where external resources may be needed to help push it to the new level. Getting outside funding from investors will help the entrepreneur build a more valuable business. Alas, the infusion of capital from investors is never free: often, the entrepreneur has to give up control in the company to get the funds.

The paper is relatively easy to chew (there's no regression or any mathematical formula). If you have nothing better to do this weekend, check out the paper. Also visit Wasserman's blog for updates on his study http://founderresearch.blogspot.com/

10 Biggest Business Blunders

The authors of the book The Maui Millionaires, David Finkel and Diane Kennedy, continue their exploration for amassing wealth in their new book "The Maui Millionaires for Business. The publishers sent me an excerpt of the book, which focused on how entrepreneurs and business-people can successfully solve wealth challenges.

According to the book, here are the top 10 biggest blunders committed by entrepreneurs and freelancers:

1. Taking Your Eye Off of Your Cash Flow
2. Improper Management of Accounts Receivable
3. Over Expansion
4. Too Much Time Setting Up Instead of Getting Business
5. Selling by the Hour
6. Giving Your Expertise Away in a Way that Has No Perceived Value
7. Requiring Payment Before You Give any Value
8. Ignoring Window Shoppers in Favor of Customers
9. Hiring "Warm Bodies"
10. Failure to Fulfill Sales Promises

For strategies on how to solve the above blunders, read the book excerpt of The Maui Millionaires for Business

Startup Grant for New Entrepreneurs: Intuit Contest

If you are thinking of starting a business and looking for startup funds, you may want to try your luck in the ""Just Start" campaign of Intuit, makers of the accounting software Quickbooks. The grand prize is $50,000 in cash

Here's the description of the contest from the Intuit website www.IWillJustStart.com

Intuit Just Start Contest ... is a skill contest in which participants can submit ideas on how they would resign from their job and what dreams they have for starting their own company for a chance to win the Grand Prize of $50,000 in cash and consulting services ($40,000 in cash & $10,000 in consulting and service fees) or one of two First Prizes of $5,000 cash. Entry to the Contest is free. The Contest begins 12:00:01 a.m. Pacific Time (PT) on October 9, 2007 and ends 11:59:59 p.m. PT on December 15, 2007

In order to join, you must either submit a 2-minute video or a 250-words essay answering these questions:

• What’s your idea for starting your own company?
• What you will resign from?
• What you would do with the winning to pursue starting a business?
• OR if you have already started your own company, please describe your experiences getting started in your entry and also answer the question, What did you resign from?

You may also be interested in downloading their free accounting software QuickBooks Simple Start 2008 at http://www.simplestart.com/.

Is There a Demand for Your Product?

One of the cardinal rules of starting a business is to first determine whether there exists a market for your product. Then you can determine how big the market is, and if it is worth all the investment that you will put into the business.

I came across this article on MIT's Technology Review where a UK based company is about to launch a chewing gum that is easy to wash off any surface.

I could just imagine how much the company spent for the research to develop this product, considering that the article stated that gum manufacturer Wrigley has tried to develop a biodegradable chewing gum to the tune of $10 million on research alone!

Upon reading the article, the first thing that popped into my mind was: Will buyers of chewing gum really care and buy this product? It seems to me that this is a product that looks good in concept, but may not be what users want. Afterall, throwing the gum on the street or sticking it to just about anywhere is part of the charm of the chewing gum (not that I do it myself as I don't buy chewing gums) -- its users simply do not care that they stick it anywhere after using it.

What bothers me is the company's reasoning that millions of dollars are spent by the city government to clean up chewing gums that end up in the subway trains and stations. Well and good -- but how can the savings of the local government resulting from this new product translate to sales for the company? It's not as if for every $1 the local government saves due to this product, 50 cents are given back to the company. There seems to be a big disconnect between the usefulness of the product and what the consumers want from this product.

Are those workers cleaning up the trains and stations the target market of this company? Are people who chew gum really thinking about the expense and labor needed to clean off the gums they left on the subway and stuck under the chairs of the train (apparently not, since they left the gums in places other than the trash cans)? How many chewing gum buyers actually think about the pollution that their gums cause?

I don't know how this product will be accepted by the market, and whether it will work. Maybe if the company embark on an education campaign to inform chewing gum buyers of the hazards of chewing gum (which means millions of dollars more in advertising and marketing spend).

But there are a lot of seemingly good products that failed because the market simply did not need it. And if you don't have millions of dollars to spend to change the behavior of consumers, then you have a significant obstacle in your way.

Sometimes, as business owners, we need to step back away from the business to get an objective view of our products. And yes, talk, talk and talk to your customers about what they want -- and give that to them.

Is Your Product Ready for the Primetime?

With a newborn in the household, I get to watch a lot of late-night infomercials and shopping channels. I have since developed a fascination for these types of shows and the products featured, particularly after reading an article that QVC’s base target sales rate is in the range of $6,000 per minute!


If you have a new product or want to reach the largest possible audience, TV is an extremely good medium, with infomercials delivering an effective cost-effective advertising. Both infomercials and shopping shows can significantly increase sales of your product, build brand names, and are the best way to introduce new products to the market.

But before you start contacting the producers of these shows, you need to ask yourself these questions:

• Does your product show well on TV?
• Does your product address a need or solve a problem?
• Have you thought how you will demonstrate your product to show its usefulness to the audience?
• Does your product appeal to a mass audience?
• Are your products ready for shipping?
• Are your scripts ready?
• For infomercials, are the mechanisms such as call center in place to accept the orders?
• Do you have testimonials to further convince viewers that your product delivers what it promises?

Showing your products on TV is hard work, and takes an enormous amount of time and preparation. But the results can be well worth it -- if you have the right products to show

How to Create Effective Calls to Action in Your Website

A "call to action" is defined as an activity requested of a consumer. It could be purchasing a product, requesting for information, completing a survey, or subscribing to an online newsletter. Call to action is your signal for communicating to visitors or users what you expect them to do.

An effective call to action can increase your conversion rates, whether that means sales, leads or however you define the end-goal. Examples of call to action include:

• "Order today before supply runs out!"
• "Click here to subscribe!"
• "Sign up now and get your free gift!"
• "Join our affiliate program."
• "Add to your shopping cart."

But how do you craft an effective call to action? Here are some strategies for improving your call to action:

• Instill a sense of urgency. The sooner you can make them respond, the better. Otherwise they can forget or be distracted by other matters.
• Consider using exclamation marks -- just don't use them excessively where every sentence ends with an exclamation mark.
• Be specific about what you want the visitors to do. "Click here" or anything as vague as this phrase just won't do.
• Pump it up: there are no rules that "call to action" signals need only be 1 sentence. Explain why the person has to do what you want them to do in a paragraph or even more.
• If you are using buttons or graphics, make it stand out in terms of its design and colors. Make it stand out from the page.
• If you are not using buttons, highlight the text by using colors, underlines, even arrows to make the call to action distinguishable and attention-calling.
• Don't put your call to action for the last, especially if the visitor will scroll down just to see it. Put the call to action above the fold.
• D0 a test to see which phrase, manner of presentation, and location within the site works the best.
  

Loyalty Marketing: Strategies that Work

Loyalty marketing is defined as "the effort to identify, maintain, and increase the yield from best customers through long-term, interactive, value-added relationships." It is basically the creation of programs that aim to recognize and reward customers based on their value to the company.

For big businesses, loyalty marketing is an integral part of their marketing programs. But not for small businesses. Many small businesses, while recognizing the benefits of having a loyalty program, are typically overwhelmed by the effort of identifying customers and tracking loyalty programs. They also lack the prerequisite ability to slice and dice the customer purchasing history; and many do not even have databases of their customers. More importantly, they lack the capability to implement loyalty programs

But if you are thinking of launching a loyalty program for your business, loyalty marketing firm Colloquy has an important study entitled "The Difference Engine A Comparison of Loyalty Marketing Perceptions Among Specific U.S. Consumer Segments" that looked at the response rates to various loyalty programs among the general population and specific customer groups.

According to the study, the following are the average response rates of the general population to various loyalty programs

• Cash back = 54.7%
• Points for free travel = 39.1%
• Points for in-store redemption = 32.6%
• Certificates = 28.2%
• Points for web/catalog redemption = 25.2%
  
• Discounts = 47.9%
• Upgrades = 20.8%
• Members only information = 19.7%
• Members only access = 13.7%

You can read the study by first registering at Colloquy

Trends of the Future: Understand the Opportunities that Lie Ahead

Whether you are thinking of a new product to introduce or to find market opportunities for your products, it is important to study social and business trends. New social trends transform how goods are built and sold. Business opportunities grow out of the changes in the social order.

I just got a copy of the book "Microtrends: The Small Forces Behind Tomorrow's Big Changes" by Mark Penn and it is proving to be a very compelling read. The book identifies relatively small patterns of behavior in our culture, which the author calls "microtrends" -- trends that have great influence on business, politics, and our personal lives.

Some of the trends identified in the book include:

Stay-at-home workers

• Stay at home workers -- whether running their own businesses or working for companies -- need a way to build community in a collaborative kind of way. There is also a market for teaching people how to run and participate in tele-enabled meetings.
• As more people work from home, opportunities arise in ensuring home office safety, comfort and design.
• For stay-at-homers, there is a need for better health insurance system and retirement savings than the current employer-based one.

Neglected Dads

• More and more dads are actively raising their kids, but unlike the Soccer Mom, are ignored by marketers.
• Potential for Daddy-and-me relationships are untapped -- e.g. more dads changing diapers, spending time with kids, buying gifts for the kids, and contributing more to household chores. Marketers remain focused on the Moms.

Other Trends

• People are retiring but continuing to work.
• Teens are turning to knitting.
• Geeks are becoming the most sociable people around.
• Women are driving technology.
• Dads are older than ever and spending more time with their kids than in the past.

Press Mention

This is totally not my style, but I suppose one can be excused for bragging once in a while :o)

PowerHomeBiz.com is mentioned in a New York Times article published today, October 2, entitled "Getting Paid, One Way or Another" written by Paul Brown. It feels good to be noticed -- flashing ads and all -- by the big boys occasionally.

How to Estimate the Potential Advertising Revenues of Your Website

When starting a new website, it is good to have an idea of the potential income you can get from the website (well, if you're going to invite investors you actually need financial projections when writing a business plan).

But how can you estimate how much income you can get, especially for an advertising-based website? What kind of income can you get from the site that will allow you to make a living off your website?

It's not easy to determine potential income, but here are the variables you need to consider:

• What is the traffic potential of your site given its topic?
• What are your goals for the site: are you thinking of turning your website into a 800-lb. gorilla or just one of the small sites in your niche?
• What kind of revenue model are you planning to use -- purely cost per impression (CPM), or purely cost per click (CPC), purely pay for action (CPA) or a combination of all three?
• What ad types are you going to offer -- e.g. image ads, text link, newsletter advertising, etc?
• What kind of ad formats are you going to sell particularly for image ads -- banner ads, leaderboard, skyscrapers, rectangle boxes, etc?
• What is the average CPM being charged by your competitors?
• What marketing strategies are you planning to implement, and how aggressive these are, to get traffic to the site?
• Are you going to use third party providers such as banner or contextual advertising networks (e.g Google Adsense) or will you sell all advertising yourself? Or are you going to use a combination of both?