How can internet marketing be compared to running a “normal” business ?

Don’t try to fit in if you are born to stand out. Don’t join the rat race.....

All you need is a computer and an internet connection to make money online, right? Well, I am afraid it’s not that simple. In my opinion anybody with a tiny little bit of business acumen and common sense can make money on the internet. A person with a lot of business attitude and business knowledge has a slightly better chance of making it. The buying attitudes, reasons and motives of customers buying on the web are very similar to the ones buying on the high street. A lot of business principles can be applied to marketing online and off-line so people who are aware of these business principles are just one step ahead of others. Having said that, you certainly do not need business knowledge to make it. It is just an advantage and not a necessity.

The traditional elements of marketing are the “four Ps”. These also apply to the IM business. The point I want to get across here is that IM is comparable to doing business outside the internet. An internet business is like running a normal business; it will need your full-time attention to succeed.Here are some business terms that are very well known in the marketing/business world outside the internet and can also be applied to the IM environment.

a) The 4 Ps are :

- Product.  Your product is whatever you are selling, online or offline.

- Price. Your price needs to be realistic compared to comparable products on the       

   market,  in our case on the web.

- Placement is about your distribution channels. Where and when are your products going to be available? There is one big difference here with normal marketing because products are available online 24/7.

- Promotion is your channels of communication with your customers and prospects.
If there is a problem somewhere with your sales, on the web or outside the web, you need to investigate each P to see which is causing the problem.

b) AIDA

A = Attention. Get your visitor’s attention, in our case by building a website with various sources of potential interest.

I = Interest. Get your visitors interested in what is on your site.

D = Desire. Give your visitors the desire to click on something on your website. In our case we are trying to make the visitor click on something that makes you money.

A = Action. Your visitor takes action and clicks on one of the links on your website. All links are links that make you money, so the principle you need to follow when designing your website is to include as many money-making links as possible.

c) 80/20 rule

80% of your sales come from 20% of your customers applies very often in any business environment. This also applies in keyword research, as 80% of your sales will come from 20% of your keywords that are used in, for instance, an adword campaign. It is therefore important to look after that 20% of your customers and to focus on the 20% of your good keywords.

d) Rule of 10

A sales representative can get 100 prospects gathered at an exhibition. Out of these 100 prospects he might get ten more interesting leads, and out of those ten leads one person will buy his product. If he is lucky, the sales rep could get between 2% and 5% of sales out of his 100 prospects. That is a principle that I have always applied in all my businesses.

How does this work in IM? If 100 people click on your ad and one person buys your product, you have a conversion rate of 1%, which is acceptable in IM. A realistic IM conversion rate (discussed later in more detail) is between 1% and 5%.

e) Know your competitors

Knowing your competition is vital whatever business you are in. Further in the book I will give you some tools to “spy” on your competition.

f) Supply and demand – pricing policy

If a manufacturer makes a product and there is a large demand and no competition, they will probably sell the product with a high profit margin as there is no competition. If other manufacturers start to produce similar products and bring them to market, the first manufacturer will probably have to reduce his price, as it is likely that the other manufacturers will have a lower selling price.

The same applies for the pricing of eBooks: if you find a niche and there is no competition you can sell your eBook for a high price. If five other people publish an eBook in the same niche, chances are you will sell less, and have to lower your price to stay competitive in the market.

g) Benefits, benefits, benefits...

When selling any products, you HAVE to concentrate on what the benefits are for the customer when purchasing the product. If you are selling a product online, exactly the same applies: benefits, benefits, benefits. Don’t say “We make good quality chairs” but instead say “Your back pain could disappear forever with our chairs”.

h) Only two sales

There are only two reasons for sales in any sales environment, on the web or outside the web:
- A solution to a problem
- A fulfilment of a need or dream
i) Put on other shoes
If you want to be in business you need to put yourself in your customer’s shoes. What would you like to see if you were a potential customer? Look at the world, your product, your sales letter, your eBook, etc… as a potential customer. If you visit a website, what would you like to see ? Develop the website in that way.

j) KPI indicators

 KPI stands for Key Performance Indicators – also called Key Success Indicators and are used a lot in businesses outside the web environment. As an internet marketer you also need to analyse as many aspects of your website as possible and try to improve it all the time. Just like the giant supermarkets know more about your spending habits than you do, you need to try to find out what the searching habits of your customers are. The purpose of a KPI is to measure a certain activity, analyse the data and learn or improve.

k) Last but not least: Your USP =Unique Selling Point. What is unique about your product? How do you stand out from your competition?