A feature is a property of a property of service. A product may come in red, green, blue or orange.  The service may be delivered morning, noon or night. Those characteristics are features of the product.

As a product or service developer, you may be competing with a dozen products and they may have hundreds of features. Adding any or all of those features to your offering may deliver no value at all to your customers.  So you need to figure out which features do matter to your target market and what advantages those customers see in those features.

You can then modify your product to deliver those advantages using the minimum number of features required, and sell your product not on a feature by feature comparison but on the basis of the advantages you actually deliver.

Some of the most elegant and widely used products and services have very few features and all kinds of advantages.

Google, for example, just lets you search a database of websites with a keyword. It’s listings are fairly simple and its algorithms aren’t overly complex. But people go to that site billions of times a day and Google Inc has grown from a dorm room startup into one of the largest companies on earth in under two decades because that simple product was so very advantagous to its customers.

The iPod doesn’t have a CD changer, a transistor radio or a cassette tape player built in, but it does hold more than a thousand songs and you can get access to millions songs via the internet.

Customers buy products and services based on the advantages they offer, so focus on delivering advantages to your customers and market your products based on those advantages.

Related posts:

1. An Entrepreneur’s Guide to Making Products and Services That Sell Themselves
2. How to Set the Price of a Product or Service
3. An Entrepreneur’s Guide to How To Price Your Products And Services

For example, someone interested in purchasing a motorcycle will become aware of brands like Kawasaki, Harley-Davidson, Suzuki and Yamaha. They will, over time, begin to choose the brand that is most consistent with their requirements. When it is time to buy a bike, their choice will not be from the whole range of possible motorcycles, but from the one or two brands they’ve come to like best.

Until recently, only large businesses were thought to have the collateral required to participate in brand advertising which promotes products and services long before a purchase is contemplated. Compelling viral media, carried through social media tools like Twitter, Facebook, Linked-In and Google Plus make it possible, to reach millions with brand messages that are widely shared.

Creating branded content, including ebooks, podcasts and video, that effectively sell a company’s products and services requires an indepth understanding of their target market and the channels they use to communicate. The cost of creating this content is less than creating and broadcasting content vira mass media. Making this investment can generate sales for months or years to come.

Even startups and small businesses can use brand marketing techniques to define their offerings to their target markets. If you are not currently creating viral marketing materials of interest to your target market, now is a good time to begin.

Related posts:

1. An Entrepreneurs Guide to Understanding Why We Buy What We Buy. Understanding Consumers.
2. An Entrepreneur’s Guide to Making Products and Services That Sell Themselves
3. An Entrepreneur’s Guide To ‘Give it Away’ Business Models

Q: Are there different business models between a service based firm and a production firm/sales firm?

A:Generally speaking, yes. A company that manufactures products almost always has fixed costs (equipment, people, etc) and enjoys returns to scale (which means the more they produce, the lower their cost of production). A service-based business may have very low, or no, fixed costs, but their costs remain relatively constant over time. A sales-based business (which sells the products and services of others) may have few or no fixed costs, but they may also find over time that their margins fall (as new people begin to sell the products they made popular). Internet businesses, which sell an online service or downloadable deliverable, may enjoy very low startup costs and great returns to scale. They can be extremely low cost to start and become extremely profitable which is why many investors find them interesting. It really pays to understand your business model and it’s industry.

Q: Is it ok to sell your products cheap in order to spread them all around the world?

A: Is it OK to make a loss on products by giving them away in order to get branding and market position for your new business? Not really. You may sell products and services at cost, in rare cases, as a relatively cheap and effective form of advertising. You may distribute part of a product at cost or just below cost (like razors) in order to sell something else (razor blades) that you make more on. But the object of enterprise is to produce/sell something that people will actually pay for. You must generate real revenue from some source, even if it is not the person who is using the product. For example, people may not pay to use Facebook, but advertises do pay for those eyes on their ads.

Q: I want to take a contract with a big firm. Is a good idea to provide free services to the manager?

A: Are you talking about bribes? If so, it depends on the company you are working with and the country you are in and its laws. In some places that’s how business is done. If you are exposing yourself to liability because you are committing a crime in the country your business is in, and if such crimes are frequently prosecuted, it is not at all a good idea to engage in bribery.

Q: How can we properly establish that pricing curve for a new product or service ?

A: We have a bunch of articles on price discovery strategies in the Library on our website. Go read them all. It won’t take you long. The truth is, you usually have to find customers and talk to them to figure out pricing. You may find a starting point by taking a look at competitors (if you have any) to see how they price. If you are selling a robotic vacuum cleaner, your ballpark price will be around that of a vacuum cleaner, plus a differential for the added value the robot provides. If you are selling “dress kilts” which men wear to replace trousers, then you are going to price your product around the cost of trousers. If you are selling a new product that solves a problem in a new way (like Google) the price and who pays for the service may have to be derived from the value of the problem you solve. Finally, if you have no competition, you need to realize you have a problem. Because people may not see the value in what you have. For example, if you have the only “brown bear laundering solution in the world” its probably because no one is really interested in washing brown bears.

Q: Is it ok to take an order and give it to a subcontractor just to be able to say “YES” to a client

A: Sometimes it makes sense to take an order for something you don’t sell normally just to block a competitor. You have to analyze the costs of doing that relative to the rest of your business. If that problem happens often, you need to consider that service part of an expanded business, or change enterprises, or change customers.

Q: Can you give me an advice regarding which will be the proper aproach for attracting new clients?

A: We have several dozen articles in our library that talk about marketing, branding and sales. Read all of them and you will find things are much easier. If you approach sales correctly, it is very, very, very straight forward. If you do not understand the fundamentals outlined in our articles, you will struggle.

Q: How many times is it ok to lower the price in order to still be considered as a serious service provider?

A: If you are lowering your price over and over again to keep customers, you need to think about your pricing, your products/services and your customers. Some industries (like publishing) are bad industries in that the price/value of what you sell can fall to 0. If that’s happening, you need to figure out how to take what you’re selling and move it into another industry (stop selling books, start selling courseware for use in classes for example).

Q: I provide HR services. It is OK to offer 50% discount to a customer who brings me 10 other clients

A: Yes, but generally you do that after someone actually brings you the clients, not before, and you factor the discount over several transactions.

Q: If your client doesn’t accept your price is ok to dump it? Is better to win less than win nothing?

A: For a given customer, you can modify a price. But if you’re doing that all the time, and your price is falling below your cost . . . you have a problem you have to address. Go read the marketing, branding and sales articles in the Library. You may not understand your core value, and may not really have found your customers. You may want to go answer the 20 Questions to really evaluate your company’s business model.

Q: Travel audioguides for iPhone, iPad, Android: How can I efficiently promote them without an advertising budget?

A: Pick locations, do audio guides, put them on the Apple Appstore. Run free press releases, setup a Twitter for them, offer them free from time to time (but not all the time). Consider producing them free and getting sponsorship in each city because free apps get lots of downloads. There are a million ways to produce those profitably.

Q: As an ecommerce site, should I worry if biggest romanian online retailer started selling toys?

A: Not really. You’re already competing with Amazon because they sell toys worldwide. So people who buy from you are looking for something Amazon and larger folks can’t provide. Figure out what that is (unique selection, more support, better gift wrapping/gift baskets, etc). In fact, you may find you sell through Amazon too.

Q: If the initial price for a product or service is too high and word spreads, what happends when you start lowering it?

A: That’s why you have to get your pricing right before you start telling the whole world about it .This means test marketing, interviewing customers, looking at the competition, making absolutely sure you are making something people really want, etc. Don’t tell the world about pricing you haven’t really researched carefully. You can get past a huge pricing mistake but its a drag. Sometimes you have to rebrand the whole product and your company in order to realign your pricing strategy.

Q: It’s good I am focusing only on HR service in the first 6 months so I can bring in maximum revenue before changing the focus of my business?

A: Sounds fine to us. Cash in the bank is always a good thing to have if you are going to be launching something new.

Related posts:

1. Text: Prices are discovered . . .
2. An Entrepreneur’s Guide to How To Price Your Products And Services
3. An Entrepreneur’s Guide to Marketing Well At Little Expense

• The vast majority of people do not provide their phone number or their email address on their profile, and indeed it is against the LinkedIn terms of service to do so for some reason. So finding someone you want to talk to on LinkedIn still means you have to track them down in the real world unless you can find a way to message them through the site.
• You can connect to people through LinkedIn Groups, but the vast majority become so overloaded with spam within a few weeks of launching that few people want to visit them or much less read the daily digests.
• You can answer questions in the LinkedIn Answer foums, but that rarely seems to generate any leads because the people who want to talk to you also have only a few In Mail credits to spend each month and because blatant promotion of your business will get your posts deleted.

Given all that, how is it possible to actually use LinkedIn to get any work done at all? Some useful answers appear below.

• Make sure your profile is accurate, up to date, and has links to your websites.  It is a defacto resume that people will review prior to working with you.  Most business professionals check Google when they are thinking of working with someone new on any project of value. Google will direct people, almost always, directly to your LinkedIn page.  If your profile is well designed, and you have a few references, it will be quite helpful to you.
• Join a lot of LinkedIn Groups. You can join up to fifty groups even with a free subscription. Why? Because when you share a group with someone, you can contact them without using an In Mail credit.
• Spend a few bucks a month to upgrade to the lowest paid account.  This will let you see the names of most of the first and second degree connections (friends and friends of friends) who drop by your profile.  If they are interesting you can contact them through a LinkedIn message or In Mai.
• Upgrading to the lowest paid account will also get you a longer list of contats when you search LinkedIn for people or companies by keyword. You’ll also be able to specify title, industry and seniority requirements if desired.  This makes it much easier to find all the Marketing Vice-Presidents or the Entrepreneur CEOs.
• Do send In Mails and free messages to group members when you think you can be of service to them.  Keep it very simple and straight forward.  Lay out quickly and clearly how you think you can help them. Often LinkedIn messages get directly to the person you’re trying to contact, bypassing secretaries and other intermediaries completely, so it is a good way to contact them. But, you must be polite, honest and terse when drafting your fact-packed email message. Do provide your phone number and your email address in every message you send. If you send anything like spam, you may have your account deleted.
• Despite what you may have heard, LinkedIn Ads do work, but you have to know how to use them correctly. Always set up your ad to point to your LinkedIn profile not to a page off the LinkedIn Site.
  • Why? Because it is much easier to see who is clicking through to your page, and to provide them with a correct follow up.
  • On your profile have a quick description of what you sell, a link to your site and a link to your personal contact page. This makes it easy for them to contact you if they are so inclined.  If you decide to contact them based on a visit to your profiel, Just send them a message or InMail that starts something like, “LinkedIn said you dropped by my page today, and I wanted to contact you because . . .”
  • When you create a LinkedIn Ad, consider tarketing only a few hundred or a few thousand people.  And consider running your ads as Pay Per Impression ads.  If your ad text is well designed to communicate your key benefit to potentional customers, and you are targteing a very small group of people, it doesn’t cost much to make sure they see your ad several dozen times. The tighter your targeting, and the better your research into your target market, the more likely this is to succeed. If, for example, you’re targeting local dry cleaning businesses with a new advertising solution, it is more powerful to say “London Dry Cleaning” than to day “Advertise in London”.
  • It is better to run several tightly targeted ads with carefully written ads that really sum up your value to that market, than to try and reach millions.  Actually, that’s always the case with PPC and CPM Ads.
• It is a good idea to ask questions on LinkedIn in their oddly named Answers forum.  Asking the right kind of questions will generate a lot of interest in your profile.
  • What are the right kind of questions? They are the questions your customers should be asking.
    • Lawyers, what’s the easiest way to find new customers?
    • How do you reduce tax costs when you get most of your sales in December?
    • Where you do hire the best airplane mechanics?
  • When you reply to people who reply to you, you can ask further questions and make further statements that indicate you’re an expert.
  • Why do this instead of just answering questions? Because it lets you create a comfortable Q&A session where your voice is heard more often than anyone else’s, and and it lets you play a role in helping lots of customers quickly and for free. It identifies you as an expert.
  • Always be polite, professional and friendly.  Give no attention at all, ever, to people who are rude. Do feel free to report them to LinkedIn.

There are other things you can do to make LinkedIn work better as a networking solution, and as a way to let people who need your products and services find you, but the techniques listed above should help you sidestep most of the hassles that drive newbies away from the site.

Related posts:

1. Using LinkedIn to Connect to People Quickly & Cheaply
2. LinkedIn Answers, Yahoo Answers & Organic Page Rank
3. How to Network Effectively: For the Shy & Polite

Most people who can’t describe their business in one great sentence have one of the following problems:

• They have several businesses they are trying to squish into one business because they don’t know they can have more than one running at once. You may have a babysitting business, a dog sitting business and a house sitting business.  Those are three businesses and they do not need to be marketed as single enterprise.  If you try to describe a business that does all three you will probably end up with a very vague and strange promise like “We take care of everything important in your life so you don’t have to,” or “Kids, Dogs and Houses . . . we take care of them all”.  Are you likely to leave your child, dog or house in the care of someone that makes that promise? Most people don’t want to work with businesses that don’t seem to have 100% focus on the product or service they are delivering.
  That said, there are some returns to scale in trading as multiple businesses.  For example, you may start a limited company called HappyU, and it may trade under DogsRus, KidsRus, HousesRus. It may have three websites. It may share marketing expenses and other costs across all three enterprises.  But to the world at large, there are three separate businesses that happen to have a single owner, not one business that does three things.  Whether it makes sense to do this depends on the resources you can bring to bear on your enterprises.
• You really have no business.  You have a hobby. A business has customers it wants to help.  You may be a painter, and you may sell paintings, but if you never market or sell your paintings and if you never find anyone who ever wants to buy one . . . you have a hobby. Many painters and other artists do have a business. They figure out how to identify the type of customer that likes their work (hipsters, neo-bohemians, football moms), how to tell those customers about their work, and how to get paid for the work they sell.  Your business has to fulfill a promise to customers . . . and that statement has to be entirely about the benefit you deliver, not the benefits you derive from running your business.  Picasso, Johnny Depp and hundreds of other working artists have created connections to their audiences, they’ve developed “brands” people love, and they enjoy a great deal of creative freedom due to that connection.  If you don’t have that connection to your customers, you must acquire it . . . That means getting your work out where people can see it and analyzing how your “audience” responds.
• Your business has multiple types of customers and you can’t find a single promise that embodies the needs of both. A magazine that sells subscriptions makes one promise to its readers and another to its advertisers.  Really that’s two businesses making money off the same intellectual property.  In describing your business, you need to make two mission statements and you only tell both to investors, funders and your team members.  For example, a magazine tells its subscribers “We tell you everything you need to know about social enterprise every month” and to advertisers it says “We help you reach those interested in social enterprise in every issue.”

The most profitable startups are usually the easiest to describe.   “Our search engine lets people find any website on the internet based on keywords” or “Our service lets you share your life, your pictures, and your relationship status with your friends.”

Over time, as a company grows it does become more complex. It adds more products, more types of customers, more complexity to its mission.  For example, General Electric no longer just runs generators to power lights.

But a startup really has to keep it simple because it doesn’t have a good connection to hundreds or thousands of customers. It usually doesn’t have the marketing budget to capture enough attention to explain something complex. It must be clear to be heard.

If you really hate to describe your business, and your elevator speech never seems to result in people taking more of an interest in your new enterprise, you need to step back and think.

What “one thing” am I going to get completely right for my customers that no one else does.

“We’re going to deliver the best house sitting service in London”, “We’re going to be the cheapest way to buy a new cell phone in the UK”, “We’re going to sell the cutest “hippy” baby clothes on earth” are all simple statements that identify who you are going to make happy and exactly how you will deliver something they want.

Related posts:

1. Naked Business: A Startup & A Small Business are Two Different Things
2. Every Startup Needs An Advantage: What’s Special About You?
3. An Entrepreneur’s Guide to Letting Go: A Survival Skill for Startup Owners

The Global Network for Entrepreneurs with Disabilities is an association dedicated to helping People with Disabilities (PwD) start and run their own businesses.  The GNED works as an advocate for disabled business owners worldwide, and serves as an information resource for disabled business owners, disabled people starting their own businesses, local communities,  national and international governmental bodies. Most recently, for example, GNED gave presentations to the US Business Leadership Network at their annual conference in Chicago.

Simon Cox, a founder of the GNED, says ““ The GNED is a very exciting and unique opportunity for disabled people in business to network, share ideas and learning and develop business opportunities.  We want to encourage as wide a community as possible to lever support for the development of accessible and empowering resources that will lead to greater business success for people with disabilities and our allies.”  Simon Cox,www.successfulcv.co.uk

According to Founding Member John Little, CEO of the worldwide Successful Resumes organization and a member of GNED there are many good reasons to support People with Disabilities (PwD) as business owners. “Always assuming the PwD is competent and provides good products or services, doing business with them will contribute to another PwD being successful in business, as opposed to being another unemployment statistic. That person as a successful business owner will also pay their local and federal taxes, they may employ others and generally, doing business with them will broaden their and their employees/families’ economic participation in the wealth of the community, when they may otherwise be sidelined.“

The GNED accepts corporate sponsorship to assist in its education, advocacy and activism programs.  Participation as a sponsor helps sponsors enhance their brand reputation, image and value.  Increased customer loyalty, employee loyalty, and an improved culture of empowerment within the organization.

For more information on joining GNED go to entrepreneurswithdisabilities.org.  You should also drop by their website to take a look at their blog which features educational articles, resources for communities, articles on funding, news about events, and links to relevant resources.

Related posts:

1. How to Network Effectively: For the Shy & Polite
2. Social Network Buys Good Ideas with PayPal: £100 Each
3. Kevin Farrar, IBM Global Entrepreneur Lead, UK & Ireland

What is a Brand and Why Do You Want One?

If Coca Cola released a new beverage, how likely do you think you would be to try it? If Apple announced a mysterious new product that it said would combine the features of the iPad and iPhone, how likely do you think you would be to place an order for the product even without a working demo to look at? If Google came out with a new Customer Relationship Manager application that cost $10 a month, how likely do you think you would be to try it out?

In most of the cases outlined above, millions of people would respond in the affirmative. Why? Because Coca Cola, Apple and Google all have great reputations for delivering exceptional value to their customers.

How did they develop these brands? By understanding their customers well enough to know what products and services would most please them. The source of a strong brand is in the understanding an enterprise has of:

• Who their customers are from a demographic standpoint
• Where their customers find solutions for a given problem, or products for a given use
• What problems their customers have
• What solutions are available for those customers
• How much customers are willing to pay for those solutions
• What emotional reasons drive customers to purchase a given product
• What pleasant associations customers have for a given product
• What unpleasant associations customers have for a given need the product meets

When a company fully understands its customers, and develop and sells the products and services that meet their needs over, and over, and over again, they develop a “brand” that they become known for. People’s attachment to the brand is emotional, not intellectual. The brand becomes a guarantee of value for its customers, and that emotional attachment to the product spurs a large percentage of a well-branded company’s sales.

What does this mean to you?

Every time you sell a product or service to a customer, you are defining your brand. The promises you make to customers you understand well, and your ability to deliver on those promises, determine how happy a customer is, how likely he is to buy the next product you sell and how likely he is to refer other customers to you.

If you want to develop a good brand, start by looking at your best customers and finding out why they buy what they buy. Ask them what improvements they would like to see. Follow their advice and develop a product that flies off the shelves and delivers great value to it’s customers. You will, in short order, have a brand that makes people like you and your business enough to buy products even before they are completely sure they need or want them.

If you want to learn more about branding and marketing, join us at the Made in 48 Hours bootcamp next week. We’ll teach you how to build or strengthen a brand quickly and cost effectively, and you will learn marketing techniques that use brand to buy customers. See you there.

Related posts:

1. Entrepreneurs Guide to Brand Advertising
2. Successful Startups Almost Never Compete On Price
3. An Entrepreneur’s Guide To ‘Give it Away’ Business Models

Well, they are wrong.  You can absolutely create products and services that meet this requirement.  It requires that you spend more time in marketing research and product development than you might otherwise, and often it requires a fundamental change in how you perceive your business and your customers.  In short, making “high probability of a referral” a design constraint has an impact on how you sell and what you produce.  But it is an investment that pays off . . .

Why Make Products & Services That Sell Themselves?

Before we dive into the techniques required to make a product or service self-selling, lets start with a quick review of why that’s an important characteristic for a product.

• The cheapest sale you can make is to an existing customer.  If you sell one product to a customer, you’d like him to come back to you with more money as soon as possible.  He’s proven that he wants what you have and that he likes it.  If your product or service is designed correctly, a customer always remembers where to find it, and he can place his next order in a matter of minutes. He may elect to buy your product or service as a gift.  He may elect to simply re-acquire the benefits for himself.  He may just place an order to get the newest version of something he loves.  You should give that happy customer every reason on earth to make that second profitable purchase from  you when he’s ready.
• The second cheapest sale you can make is to a person an existing customer talks to.  People who have interests, locations and other properties in common tend to hang out together.  So if your product or service makes one customer very happy, and if its easy for him to communicate his joy to others along with where they can buy it, the result is a raft of very cheap sales.

If you get this form of marketing right, every dollar you put into advertising turns into hundreds or thousands of dollars in sales.  This phenomenon is responsible for the rise of giants like iPOD, iPHONE, Google Adwords, Netflix, NIKE and Avatar.  It is the true secret to success in business, and no matter what anyone tells you . . . it’s not magic or happenstance when folks get it right.  Mostly its insight, innovation, intelligence and a little hard work.

If Creating Products and Services that Sell Themselves is Easy, Why Don’t People Do it?

People make the choice to optimize their products and services in a way that doesn’t guarantee they’ll sell themselves for a variety of reasons. Most of them are fairly silly.

• They don’t know that making a product or service sell itself is something they should be doing so they never attempt to do it.
• They don’t want to spend the time required to get the “package of benefits” they are offering to the customer exactly right.
• They don’t want to please the customer. They want to give the customer what he “needs”.  This is a common problem for educators and artists. Their notion of what the customer should have is usually altruistic, occasionally abusive, and often disinteresting to the customer who has to spend the money.
• They don’t know how to do market research, or how to translate research into design requirements for their product or service.

If you want to be successful, assume that you can make a great product that people love and recommend, then set out to do it.  Educators should remember that Carl Sagan brought many people to love science as much as he did.  Artists should remember that some of the most effective pieces are those people love enough to study.  It is worth every business owner’s time and effort to make great products and services.

Connect Customers to Innovation

The heart of creating products and services that sell themselves is to connect a customer into an innovation he desperately needs or wants. In some cases you start with a collection of potential customers and you create something they purchase.  In other cases you start with a innovation, or the solution to a problem, that you will find a market for.  In either circumstance, your objective is to plug the two pieces together.

If you are starting with a collection of potential customers, your market research should answer the following kinds of questions:

• What products and services do these people currently buy?
• What problems do they have?
• What do they enjoy?
• What do they find new and exciting?

As an example . . . If your objective is to service a population of retired people living in a resort community, your research might reveal that this population spends more money than most on travel and health care.  As they age, a growing percentage move into a facility that offers living assistance that maintains their independence.  They enjoy travel, spending time with family and friends, and dining out.  They find technology as exciting as the rest of us. Communicating with others through creating and sharing their own media are topical matters of interest.  They care for one another, their children and grandchildren.

So you will probably do well if you define a product or service that is:

• Travel or assisted living related.
• That enhances their ability to spend time with friends and family.
• Takes advantage of technology in a way friendly to new computer users.
• Gives them some benefit they can share with one another, children and grandchildren.

This might lead you to offer a series of friendly courses in capturing, editing and uploading content to the internet at local assisted living facilities. Once you have created a proposal, or perhaps some brochures for such a course, you might take it to some of the local facilities to request thoughts from the administrator who has to allow you to deliver the course, and from the people who will take it.  Based on their initial reactions and suggestions for refinement you will know how and if the product will sell well. You can continue to refine and improve your offering until people are asking for copies of your brochure to give to friends.  Once that begins you will know you have a product that sells itself.

If you are starting with an innovation instead of a collection of potential customers, your job is to figure out how to cost effectively identify a pool of people that need that innovation.  You will determine:

• What products or services they currently buy because they don’t have your innovation
• What specific benefits your offering delivers

For example, you may create slightly sticky glue.  You may find that in offices, people are using cello tape to add annotations to documents.  But, unfortunately, this results in much torn paper which has to be replaced or repaired.  So you apply slightly sticky glue to bits of paper, and you take that to offices.  And you see if it is widely used and adopted.  If not, you find out why not.  Once people begin losing track of their slightly sticky pads of paper, now called post it notes, and ordering more, you know you have a successful product that sells itself.

Its That Simple . . .

Crazy as it sounds, that is how you make products that sell themselves. The process of matching markets to the packages of innovations we call products sometimes requires several iterations, but the cost of each iteration is cheap.  Usually a document or a prototype is enough to show people in this early design phase.  You will probably have to hire outside expertise to get the job done.  But it is not a hard series of tasks to complete. When you do this “prototyping” right you will find that once a customer learns of your project, his first instinct is to share it with others.

You can accelerate this process, when appropriate, by making your product or service point to your website.  If every iPHONE identifies itself as an Apple, customers who see an iPHONE and want to buy one will visit www.apple.com.  Your product or service can also connect people to others.  If you make clothes for babies, selling gift baskets not only solves a problem for customers, it gives them a cheap and easy way to tell more potential customers about you.  The links to Facebook and Twitter you see on every eStore are designed to let customers who find a product they like tell other customers about it.

Related posts:

1. An Entrepreneur’s Guide to How To Price Your Products And Services
2. Sell Your Products & Services with Advantages Not Features
3. An Entrepreneur’s Guide to Getting High Value Products & Services in Front of Key Individuals in Large Companies

You really have to put your time and money into the right stuff if you want mailings of any kind to pay off, and every business needs effective marketing to thrive and grow. So, in the spirit of returning to the fundamentals lets talk about the 40-40-20 rule.

The Basic Marketing Equation is 40 + 40 + 20 = Success

Generally speaking, the success of any advertising or promotional campaign depends on three elements in the following order of importance:

• 40% of a campaign’s success is determined by the quality of the list used
• 40% is determined by the offer made to the reader
• 20% is based on “creative” which is to say the appearance of the piece

Quality of the List

If you are trying to sell sports cars and you are targeting all you promotional efforts at parents of preschool children, your failure is assured.  This seems apparent when one is seeing the campaign as a bulk mailed advertisement or an ad in a newspaper.

But the insight is just as important when marketing and selling products online.  Most people executing online search ads and SEO campaigns pull their keywords out of a hat.  They guess what people search for when they want to buy a given product or service.  They assume that the words with the highest click thrus will generate the most sales.  They are often wrong.

A website that sells dolls might get lots of clicks from people who search for “dolls” on google.  But, folks who search for “birthday present for girl” probably buy more.  The first group of people have an “interest” the second group of people have a “need”.

Your ad campaigns need to be targeted at people who want to buy what you sell and correctly targeting that population is key.

Quality of the Offer

The secret of a good offer is to make something people want.  There is no quicker path to success for most entrepreneurs. A bad product has to be sold over and over again.  A good product sells itself.  People merely have to see or hear about it in order to decide to buy.

For example, Harry Potter books flew off the shelves for many years.  People who bought the first book raved about it to their friends. More books were sold. Those people raved . . . and now JK Rowling is one of the richest women in the world.

Her success is not really based on the best marketing, although of course it came to be very good.  Her success is based on writing books people love.   If your product doesn’t have a significant impact on people, its time to do some marketing research and analysis to find out how to make it something that good.

When you have a product that sells itself, to sell it, you just have to tell or show the right people what you have to give them. Your description of that product or service is the Offer.

A clear, concise, illustrated description of a great product or service,  a taste of the benefit it provides, and a short order form will usually be sufficient to close sales for that product or service.

Quality of the the Creative Elements

In marketing, more is not always better.  Marketing generally requires you to capture the mind of a prospect in order to deliver an incentive to take action.  The bigger the message, the longer it takes to deliver, the more chance one has of losing the prospect’s attention.  That said, one must describe the product or service adequately enough to close the sale.  That balance between short and complete is crucial.

Successful marketing professionals communicate with customers in very persuasive, very short, bursts.

This means that the creative elements used to package content need to make the marketing message attractive enough to capture the eye and mind of a prospect, but they can’t distract people from the offer. Great art in promotion is useful only in so far as it serves the message the sales message it packages.

What this means to you . . .

New entrepreneurs often spend far more time on the appearance of their promotional materials, ranging from websites to bulk mail ads, than they do on getting that message to exactly the right list, and ensuring their offer presented face to face closes sales.

Before you design any promotional material, identify the target market who will purchase what you are selling first.  Contact them and test your offer.  Then produce an ad with good creative elements.  If you follow this plan, you will find you have great success in marketing your products and services because you are directing your attention at the factors that most influence sales.

Related posts:

1. An Entrepreneur’s Guide to Marketing Well At Little Expense
2. An Entrepreneur’s Guide to Search Engine Marketing & Your Company’s Name
3. An Entrepreneur’s Guide to Getting High Value Products & Services in Front of Key Individuals in Large Companies

Are entrepreneurs born or made? — Bryan

Entrepreneurs are always made.

People don’t come out of the womb knowing how to pitch, to sell, to design. One may make the case that some folks seem to want to be entrepreneurs more than others.  But that may be because they learn, sooner than others, what entrepreneurs do.  In a larger sense . . . no one “is” any profession or skill. That’s a convenient fiction. No one is a writer or is a salesman.  People write and sell.  You can master entrepreneurship by caring enough to acquire and master the skills you need to build businesses.  Get to work

How can you detach yourself from a venture? How to you evaluate a business that you’ve been emotionally attached to? — Keith

Actually, we have a great article about that. You can find it here.  But the short answer is that lots of entrepreneurs start businesses because they have “missions” they are passionate about.

Perhaps they want to bring clean water to villages. Perhaps they want to open the world of computers to senior citizens.  Maybe they want to teach people to dance.

Sometimes their vision of how to achieve that objective is so narrow and so flawed, they have a hard time of making a business of it.  When this happens they start a business and it fails to thrive.

The Market is a great educator.

The visionary entrepreneur has to realize that businesses are ephemeral.  They come and go. Your commitment to your mission can go on as long as you like.

Within that context, any business you create to support your mission is ephemeral.  You can reformulate an existing business in a new way, or close an existing business in order to start a new one based on a different financial model.  For those with very philanthropic objectives, you may even consider creating a social enterprise, cooperative or charity . . . .

Or perhaps you will find that the best way to achieve your mission is not starting an enterprise, but joining an existing one that is doing what you’d like to do.

I think you’ll find, given this perspective, it’s easy to let go of a business. It’s like letting go of business cards you don’t use anymore, or dropping that fax number you no longer need.  If it’s the work you really care about . . . you probably don’t have to give that up just cause a given business proves unfeasible.

Is the reason for focusing on internet based businesses because that’s where the future is or because it’s the type of venture the Cambridge set are likely to be ‘into’ and as such is the best fit for the attendees. — Martin

Well, actually, neither of those reasons are why we focus on the Internet.

Basically, folks who have a business need customers.  Very broadly speaking, there are two ways to get them.

• You can call people and knock on their doors and try to tell them about your product.
• You can put your product where people who are looking for it are likely to find it.

The second option, sometimes called “in-bound marketing” is very cheap and cost effective, and the Internet is the cheapest “in-bound” marketing solution around.  If you do your job right, you can put your product where people who want to buy what you sell can find it.

So . . . we focus on how to put your products and services on the Internet.  In most cases it is the cheapest and fastest way for many of our entrepreneurs to get access to hundreds, thousands or millions of customers.  The Build Your Business Now toolkit that we built to support the course explains how ot create the simple site you need in just a few hours.

Market segment analysis. Instead of searching on Google, are there any specific places to retrieve this type of information? — Katherine

Well, we think you’ll be happier looking on Google (and perhaps other search engines) for information on market segments because getting the data there is fast and easy and you know it is timely.

For most businesses, the easiest to reach market of “ready to buy” customers are those who are looking for your service on Google because they are ready to buy.  If someone goes to Google and types in “Dog Grooming”, chances are its not an academic search.  They actually want a Dog Groomer.  If some customers search for “Sidcup Dog Groomers” others search for “Chislehurst Dog Groomer” and still others search for “Organic Dog Groomers South East”, that’s a person who is almost certainly ready to buy.

You can also look at sites that you think offer competing services and see how Google sees them from a keyword standpoint.  Go to http://www.google.com/sktool/ and http://www.google.com/trends to explore your market segments and related keywords.

Pricing: how much is it worth to them? … I recognize that the price of a product should be set to what a person will pay, not set to what they say they might be willing to pay. There could potentially be a large gap between how different entities value a product or service. Apart from asking prospects, apart from only looking at competitors’ pricing, what other tips would you suggest for setting price? (coming from the perspective of an internet based, B2B SaaS model with a product attempting to resegment an existing market with a niche strategy) – Steve

Pricing is always a matter of trial and error and you’ll almost always leave some money on the table. If you check out the Build Your Business Now Toolkit that was distributed after the class, you’ll see some practical advice and steps for figuring out price.

Basically you have to identify your target markets, see what they are paying for competing solutions, and price yourself in that zone.  If there are no real competing solutions, you have to look at what NOT having your solution costs them.  Using those two “ballparking” procedures will usually get you in your zone pricewise for each market segment . . . and then the issue is making sure each segment sees the right pricing.

Related posts:

1. Practical Q&A With Doug Richard: Mentoring, Recruiting & Seeing Opportunities
2. Start Here! STARTING & GROWING A SUCCESSFUL BUSINESS
3. Starting a Business: The 3 Things I Really Believe