the goose

I’m fascinated by price points.  I think they are a great place to start thinking about building a ‘value proposition’.  “What would you pay €10 for?” is a great question to get the creative juices flowing.  FREE is a price point I have never had much luck with.  We are constantly debating whether to introduce it at piehole.  It seems as though if it ain’t broke we shouldn’t try and fix it.  I did want to experiment however.  These guys seem to have mastered the art of offering something for ‘free’ in return for publicity.   Qwitter has been wildly successful and yet so far devoid of profit.

Or has it?  They seem to be busier than ever and I’m sure the good karma has something to do with that.  In an effort to experiement with the model myself, and as a means of finally getting on the social media bandwagon, I’ve produced agweet.com as a personal sprint.  It allows you to update your twitter status by sending a text to an Irish mobile number.  This is something our neighbours in the UK have been able to do since the get go.

Doubtless Twitter will introduce and Irish text number eventually but until then there is a nice little opportunity to give away a little bit of value for free.  Thanks for Ciaran McCarthy for digging us out with a layout and a logo.  Also thanks to piehole for letting me get this going on company time.

I said something rather rash while on the recent bizcamp limerick panel.

“You don’t need funding to start a web business”

At the time I said it was thinking of the small businesses I had come across while I was working with the BNI to build chapters around Dublin.  The BNI is made up of hundreds of small businesses in Ireland and possible hundreds of thousands worldwide.  My experience has been that the vast majority started up ‘boot strapping’ without any bank, let alone EI funding.  95% of all those employed in the private sector in Ireland are employed in businesses like these.  So is ‘funding’ really necessary to start a business?  For some businesses – absolutely.  For others … Read the rest of this entry »

My favorite book, The Four Hour Work Week, extols the virtues of outsourcing – but it wasn’t until this weekend that I had met someone who had seemed to master it. On Wednesday we will have an introduction to outsourcing work to lower cost economies. This simply means using the internet to find people who can at a lower cost than is often possible here in Ireland. It is sometimes described as geoarbitrage. I personally have been outsourcing various tasks throughout the years and have made my fair share of mistakes. There will be a panel of people there ready to share their experience and we will cover

• What tasks can be oursourced?
• Which websites to use?
• A walk-through of outsourcing a job
• How to specify a job correctly
• What sort of savings can be made?
• What are the common mistakes?

While I was at the excellent bizcamp event at the weekend, a multi-level marketing (MLM) affiliate stodd up during the final session and proceeded to pitch to the audience on the benefits of her particular product. She was well scripted and despite an audible intake of breath as the audience realised there were about to be sold to with both barrells, she steamed on regardless. The facilitator eventually managed to stop her in her tracks but only after a good minute of ‘discussion’. It was all a bit hairy.

On the train back to Dublin we got talking about her little outburst. Apparently she had attempted the same thing in several of the talks on the day and had succeeded in hi-jacking a good 15 minutes of fame in at least one. My traveling companions were disgusted with this blatant attempt to force a marketing message down the unwilling necks of the bizcamp attendees. I can see why she attended however. MLM schemes do offer a means for ordinary people to start a business of their own without any capital outlay. There are millionaires out there who have managed to achieve their own financial freedom by selling these products. I’ve never met an Irish MLM millionaire but I’ve met an American or two. Read the rest of this entry »

Irish-Story.com was one of the first sprint events we ran. We set off on what proved to be a rather ambitious project – to record and sell mp3’s of traditional Irish Stories online. As we had a voiceover actor on our team we knew that we would be able to produce something good. We certainly didn’t understand how long it would take to put the stories together. Several months later we finally had a set of four high quality stories – almost in time for Paddy’s day.

Our original strategy was to optimise the site for web traffic and climb the google rankings. This hadn’t provided any sales at the time but as Patricks Day came around we steadily started to see our traffic rise.

A few days before the big day itself we changed the template from a wordpress style blog with about 8 pages of content to a straight ’sales letter’ style single page. There was a mess up during this process and the analytics code was dropped from the site for a day or so as you can see from the dip in traffic. It did pick up however and pretty quickly upon changing the copy we had a sale – $9 worth. Not great but at least this project had finally achieved some sales. Alas, although traffic climbed, and eventually ebbed after Paddy’s day, that was the only sale we had. We did have a 14 people sign up for the newsletter and these might provide a sale down the line.

Having heard Caelen talk a little about A/B testing on his site, I decided to finally have a go for myself. The results were cringe-inducing for two reasons. The first reason is that you get to see exactly how important copy is on your site. The second is that what works isn’t necessarily what your mother would have wished for you. I decided to A/B test our Piehole ebook/newsletter page. The page had some pretty straight talking copy on it so I dug out some ’sales copy’ that I had left over from the Commission Blueprint course I bought a couple of weeks ago. The difference in the copy is as clear as night and day. Our original version was pretty understated …

Uploaded with plasq’s Skitch!

The second ‘new’ version was hardcore. There was more than a little controversy amongst the piehole team when I posted it up.

Uploaded with plasq’s Skitch!

I really thought that the original – less salesy copy might do the trick. But …

the new variation seems to be beating the crap out of our clever copy.

UPDATE:  Caelen reminded me this morning of the importance of sample size when it comes to A/B testing.  I cheked back on my A/B test this morning and the results are not as clear cut as they first appeared.  You can see below that the ’scary’ copy is still working better but by a far lower margin.  I still haven’t collected enough data for a ‘high confidence’ result though.

I’m talking tomorrow to a small group of people about building an online business. If I could write a recipe for success – this is what it might look like.

1. Establish how much monthly income would create financial independence

When ‘automated’ or so-called ‘passive’ income exceeds expenses – you no longer have to go to work to pay the mortgage. Your time is your own and you can chose to focus on anything you want to focus on (saving the world, spending time with the kids, creating the fourth reich). Figure out your ideal lifestyle costing here…

The four hour work week lifestyle costing.

2. Set a target number of customers you would like to sell to.

The smaller the number, the easier the sale, the higher the price, the harder the sell. Decide on a number of people bearing in mind that €9 a month for a consumer and €24 a month for a business offering is the psychological sweet spot. At these prices, peole are willing to pay a little bit of money for a little bit of value.

Use this map to pick your price point.

For example, you may decide that your ideal lifestyle might cost €125,000 a year. You could decide to break this down to 400 customers paying you €25 a month for ’some service’. A web business should run at 85 – 95% profit so most of that money will come straight to you.

This figure is now your goal. Not to build a business. Not to have a product. Not to hire staff. Your goal is to fine 400 people who will pay €25 a month for something.

So how do we find 400 people who will pay €25 a month for some service?

3. Audit your contacts. Look at your own contact lists. Start generating lists of people you know. Generate a few ideas here.

4. Brainstorm their problems

Write each group of people down on sticky post it notes and start to think about the problems that those groups experience. What challenges do the mothers in your contact sphere face? What challenges to the solicitors/football players/networkers/programmers/salespeople/residents come up against? What challenges do you you come up against?

Take another sticky (I prefer a different colour) and start to write the problems down against each. In the corner of the sticky, estimate how many people have that same problem, in your existing contact sphere (eg: for people you have phone numbers and email addresses for).

5. Learn about the styles of online business that are out there.

Start to find out exactly how people make money online. These people are making money by providing a solution to a problem. Don’t look at the product they offer, but the problem they solve. Ask yourself, “do any of the problems these guys solve look similar to the problems I am aware of in my contact sphere?”.

There are four basic ways in which people make money online:

• – Provide s ’specialised yellow pages’, like DAFT or myhome.ie
• – Sell a physical product or service (amazon.com, ebay)
• – Provide an online service (gmail, blinksale.com, smartnote.ie)
• – Provide information in the form of an ‘information product’ (online ebooks, videos, howtos)

Map the solutions you learn about to the problems in your contact sphere.

6. Evaluate

You now have the three components you need to build your online business.

1. The market (your list of contacts who have that problem)
2. The problem they experience.
3. A possible solution to that problem.

Identify 10 possible products which inlude a combination of the three above. Your formula for success should now look like this.

(size of market) x ( marketing hit rate %) x price point = 400 customers x €25 / month

7. Bone up on your marketing

Learn about the various ways of marketing online (and offline) and their success rates. A ’success’ is a sale. Different marketing strategies yield different hit rates. For example

Check out

Read Brad Sugar’s Instant cashflow

for ideas on how to market.

8. For your top ideas, detail out the opportunity with extra information on the potential market size.

Estimate your marketing cost (the major component of a lot of online businesses) by understanding the cost of aquisition by marketing approach. Comparing one against another you can start to see where the best bang for your buck lies.

9. Go build it.

I just got asked what did and did not work when building up www.piehole.ie. Here is what came to mind in my reply.

Hey Derek

Thanks for getting in touch. What did and did not work is my favorite topic. I could go on for ages. I was actually thinking this morning that it would be great to share stories with people to see if we could all figure out what works. The highlights for me would be.

WHAT DIDN”T WORK

* Sucking up: We had a major agency all signed up on our site so we decided to throw them a party, inviting them along to a wine evening. It was a good night but most of them didnt turn up -and as it happens they decided to leave us the next week anyway.

* Business Cards: We gave out business cards for free to a few members we thought were movers and shakers. The cards were 50 quid a shot and we didn’t really measure any positive feedback other than some appreciation.

* Wimpy telesales: we hired an actor to do some telesales work for us but we knew in our heart of hearts she didn’t really have the gumption for sales. We hired her anyway but it didn’t really pan out on the sales front. She did help with keeping our members happy though and she is a great gal to have on board.

* Bad grant applications: I was slopping filling out a grant application and forgot a form. The application got bounced back to me and now we have to wait another few months for the money.

* Competition: Maybe our market is too small but we tried a few competitions for both advertising agencies and actors. We got no measureable feedback on these. We ran one competition to get people to subscribe to our podcast but they all just unsubscribed afterwards.

WHAT WORKED

* Tracking: Setting up a spreadsheet tracking our marketing activities against our metrics (sign ups, hits, payments) has really helped to identify which activities reap rewards.

* Telesales: With the right girl or guy behind the phone this is a great way to ‘drive’ sales rather than waiting for organic growth. We are at about a 1 in 10 hit rate right now.

* Upgraded plans: For a long time we just had a basic 145 / year plan. We added 399 and 1899 plans – and fuck me – someone bought them. A lot. Just having a higher price plan available makes a big difference.

* Blogging: The blog has really helped increase our traffic. We launched a .ca site a few weeks ago and only recently started adding blogs to it. Doing that alone has pushed us to page 2 in carada for some keywords.

THE JURY IS OUT ON

Affliates: We have just started signing up a few affliates and we have to see how they will get on. We manage it using a simple coupon system. The affiliates get €20 per sign up.

Printed books: We have a printed copy of our free ebook and we are distributing this to sound studios. We’ll wait and see if this helps.

Airmiles for producers We have set up a special affiliate program for people who hire VO’s. If they recommend us and someone signs up with send them for a facial or some other little treat.

Enough food makes you happy.
Enough booze makes you merry.
Enough time lets you relax.
Enough sunshine makes you brown.
Enough exercise makes you energetic.
Enough friends keep you company.
Enough travel makes an open mind.

Why don’t business plans shoot for enough money? Fresh from the excellent bizcamp.ie I was struck by how many people there were stuck on investment as a model for building their business. Along with investment comes almost inevitable gesticulation when it comes to market size and potential revenue generated.

Is it not cool to generate enough money so you can have enough of all of the above?

It seems that anyone can get on. In fact. I did.

A couple of weeks ago I was on “The Internet Without Fear” – a local radio show dedicated to website businesses. You can have a listen for yourself over at 3r’s website. I was being interviewed over two weeks about a Sprint event I had held. Its a pity I didn’t have the actual sales figures to hand for the second interview!