Brand Development | Finch Sells

How To Build A Diversified Online Business

Jul 05 2011

Diversify, diversify, diversify.

The three coolest words in an Internet Entrepreneur’s vocabulary. But what does it mean in practical terms?

Most entrepreneurs appreciate that with competitive markets and rapidly changing technologies, placing all your profitable eggs in one basket is a risky tactic.

If you don’t want your online business to end in a flood of tears and bitter resentment, then you better learn to diversify and create several avenues of profit. MySpace has shown, quite spectacularly, that it’s possible to fall from grace in 18 months. And you would do well to assume that so can pretty much any profit spinning website in your portfolio.

What Makes a Strong Portfolio of Online Assets?

In no particular order, here are some of my favourite business cornerstones.

Profitable affiliate marketing campaigns

Who would have guessed it? An affiliate marketer recommending affiliate marketing! Stable it is not, but an important staple of my business it will remain.

CPA campaigns provide enormous earning potential, and although short term in nature, can be used to fund investments in to more long term business models. I advertise affiliate offers using various PPV traffic sources, Plentyoffish and Facebook.

Effective affiliate campaigns require only part-time management, making them key contributers to your bottom line, without swallowing up all of your time.

The information resources for Tomorrow’s Next Trend…

Forget about the monetization, and ask yourself, “What is going to be really talked about in 2012?”, then build a website that provides top quality content on that topic. Does anybody remember the crazy market for backgrounds and add-ons when MySpace peaked? These exploded in popularity, and those who were ready to meet the demand, profited immensely.

Predict what is about to become hot, rather than attempting to monetize yesterday’s news, then build a website that delivers outstanding content on the topic. If you do this well, the monetization will take care of itself. Being first matters.

How about a home bizopp site for Greeks? Smell the demand, jump on it.

Having an online store

Drop-shipping and digital download stores are two areas I’ve been exploring closely over the last few months. I have a turnkey download store that produces a steady flow of revenue, and it’s inspired me to look further afield.

One of the great benefits of selling your own products is a conspicuous lack of anal manhandling by Google if you later decide to use their Adwords platform. Yes, owning your own product takes away the title of Internet Middleman, which Google unfortunately associates with Aids and Rabies.

For those with aspirations of something more legitimate than a digital product store, feel free to get utterly lost in the possibilities of drop-shipping. Sites like Alibaba make it possible to purchase, via wholesale, just about any product imaginable, and then sell it on for [sometimes] healthy profits. This is a step away from simple sideways diversification, but worth a look.

The branded blog

You may have noticed my soft spot for blogging. And you may have noticed my particular style of blog branding. I believe that it’s possible to become an authority in your industry, making good money as a blogger, without selling out in the eyes of your readers.

But the formula is murky.

Some bloggers use their platforms too eagerly to push any affiliate product with a commission attached. Others, I feel, are guilty of under-monetizing their blogs. I prefer to ignore writing about products, and instead focus my efforts on establishing relationships of similarity with my readers.

For my Internet Marketing blogs, I like to use humour, sarcasm and an occasionally self-deprecating tone. These are excellent weapons for building bridges of trust with a notoriously cynical market, but they’re not always as effective elsewhere. If you’re going to diversify in to becoming a blogger, step one is to understand your market.

And no, that’s not just some useless Quantcast demographics. But understanding what makes them laugh, what makes them smile, what content are they known to devour, and most importantly, what do they aspire to be? It sounds straightforward, but is often forgotten. The secret to running a popular blog is to know exactly what the “end goal” is for your average reader…and then to position yourself as the lifestyle rainmaker who can deliver that golden egg.

I have developed a collection of popular blogs that rake in $5-10K per month through direct banner buys alone. Many affiliates would laugh at those numbers, but hey – it’s diversified income. Most of my money traditionally comes from affiliate marketing, but if it were to disappear overnight, I make more than enough through publishing crap like this to live comfortably within my means.

The coupon haven

Consumers love coupons. It’s an addiction that has been passed down through generations and is now more exploitable than ever thanks to the reach of the web.

When people ask me what kind of website would make a good first addition to their portfolio, I tell them to go find some niche coupons for products with affiliate programs, then build a website around them. If you’re smart, you’ll do this in such a way that the website doesn’t die with each coupon period that expires.

Your own personal page

Even if you don’t want to become a blogger, I don’t think it’s ever a bad idea to have a personal presence on the web. Some of the most exciting opportunities I’ve had would never have found my inbox if I hadn’t made the decision to promote myself, and what I do, through a personal site.

Obviously, a portfolio is not going to attract money in the diversification sense. But you shouldn’t underestimate the opportunities that can fall your way if you tell the world what you’re good at.

A collection of mailing lists

They say the money is in the list, and although that statement is being challenged by the arrival of fan pages and enormous Twatter followings, I believe it still rings true. Mailing lists are fantastic assets to have. The ability to land effortlessly in the inbox of 50000 potential customers at the snap of your fingers should not be discounted.

I like to use Facebook and PPV sources to build highly targeted mailing lists that can be sold various products. For a brilliant illustration of how this works, get your IMGrind on and read this.

Understand there are Internet Gazillionaires who make money through no other means than by mailing the hell out of some very large lists. Contrary to popular belief, those lists do not last forever, especially if you’re the kind of prick who buys them from the unsolicited scrapheap. However, put to the right use, mailing lists can deliver lots of return customers and cross-selling opportunities.

The acquisition of good products

As perfectionists, we sometimes doubt what others are capable of achieving. One of the best ways to diversify an online business is to invest in somebody else’s good work. You can’t give 110% of your attention to every brainfart that occupies the mind… but somebody else can.

Stable businesses make a habit of innovating and investing in equal measures. While I enjoy the creative thrill of building websites from scratch, it makes just as much business sense to buy websites and digital products straight off the shelf if the standard is high. You might want to avoid marketplaces like Flippa which are about as buyer-friendly as a fist in the balls for your money back.

I recommend buying re-sellable digital products, or privately seeking out under-monetized blogs for the best chance of adding a nice juicy investment to your portfolio. If you can monetize better than 95% of other webmasters, you can have an absolute field day profiting from their hard work.

What Are The Areas I Don’t Like Diversifying In To?

Are there any projects to avoid? This is likely to provoke an angry response from those who dedicate their careers to the work I’m about to mention, and with good reason. Entrepreneurs are driven by different motives with different objectives. But for me personally, the areas I don’t like diversifying in to include…

Anything driven solely by SEO. I can’t control it, therefore I don’t pretend to understand it. SEO is an afterthought for all of my projects. If you build it, they will come. Only a complete bumberclart wastes his time trying to compensate for Google’s next move.

Web design and programming. I have the skills from my background as a programmer, but it’s far too time consuming to “diversify” in to client work. And it’s not so much a diversification, but rather a complete veering from the racetrack. In short, client based programming work can suck a donkey chode. I always get the shivers when friends or family contact me asking for a “quick website built”. And that’s without the duty of actually being paid for it.

Web hosting services. They will consume your entire working day, unless they’re entirely modularised and outsourced. I’ve seen many examples on Flippa of small web hosting services boasting respectable profits, but when you factor in that time is money, those profits suddenly start to look very small. Committing to be somebody else’s 99.9% uptime bitch would push me to insanity.

Customer subscription services. You will find that once again, unless you outsource everything, another service will usually beat you to the market by dedicating 100% of it’s time and doing a better job. A good example of such a subscription service is the pay-to-access forum. Many of these forums are emerging (PPV Playbook, IMGrind…), and it’s tough to knock the earning potential when you look at the numbers. 500 members paying $60/month is a healthy $30000/month in revenue.

However, forums are also notorious time-vacuums. Unless you can dedicate significant time to them everyday, they will never blossom in to healthy communities. Even once they’re established, you still need to engage and interact on a daily basis. This is perfect if the forum is your primary business. But as a diversification strategy? Be prepared to double your current workload, or get eaten by the competition.

Niches I know nothing about. If I can’t understand what I’m selling, I have no hope of guessing my customer’s next move. I’ve made the mistake far too often of developing websites on niche topics that I don’t “get”, and although I can motivate myself for the build phase, they often sit derelict after the site is launched.

Whatever You Do, Do It Well

It goes without saying that diversifying a business is irrelevant if you do a half-arsed job of it. We can go back to the MySpace example as a prime example of this. The examples above are merely my own professional choices, based on my own skillset and the talents of those I work with. You may have a very different vision.

As long as the vision is clear, and the planning is sound, diversification can only ever be a good thing.

Recommended This Week:

If you’re not already registered on PPV Playbook, you are missing a beat sunshine. Easily the BEST place to learn from marketers who are actually making money. It has some awesome case studies. The catch is that you will need to pay some of your hard earned pesos to access it. I swear from the bottom of my black heart, joining is worth every penny
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What You Can Learn From Microsoft And Starbucks

May 30 2011

Pricing our products, services and time can be a tricky business. I’ve spent many hours scratching my head and wondering what a “fair price” would be for my latest products. In reality, there is no such thing as a fair price.

It’s impossible to set a price point that satisfies the maximum amount each of your customers would be willing to pay. You are always going to have customers who scoff at the price. And you are always going to lose money by failing to ask enough of those who have personal valuations higher than yours.

Most of us try to find a middle ground.

We have to balance the advantages of securing many low value sales against making fewer sales at a much healthier margin. The conventional persuasion suggests that more sales is better business. So we lower the prices. This may produce the increased sales, but how many of those customers would have paid much more had we simply asked them to do so?

If the answer is “too many”, it’s time to start taking price targeting seriously. Price targeting is the art of setting different prices for different markets to maximise profits and increase sales in one efficient swoop.

Sounds Pretty Cool, But Who Else Is Price Targeting?

One of my favourite examples comes courtesy of The Undercover Economist, an excellent must-have book that really sheds some light on the relationship between consumers and their purchases.

The book dissects price-targeting by using the example of a cup of coffee.

How much is a cup of coffee worth? Some people will pay $2, others will happily hand over $3. The difficult decision is how to price the coffee in such a way that it’s cheap enough to attract maximum sales at a profitable margin, but expensive enough to milk maximum profit from those who are less money-conscious about their caffeine fix.

Price the coffee too high and you’ll lose sales. Price it too low and you’re leaving money on the table. To find the middle ground, they would have to establish a price that balances the best of both worlds. But there’s actually a much better way of doing business.

So what does the coffee house do?

Take a look at the drinks menu and you’ll see exactly what they do. They use a staggered pricing model.

An ordinary no thrills latte can be picked up for a couple of dollars. This satisfies the customers who would go elsewhere if the coffee became too expensive. And then you have the shit that my girlfriend orders. The premium chilled white mochawhatever blend at over $3. These drinks appeal to the luxury seekers. Those who can justify spending more because they place a higher value on good coffee, and will pay the premium to get their fix.

Many of us assume that because the lavish coffee at the bottom of the menu costs twice as much as a regular latte, it must be twice as expensive to produce. This is actually a textbook demonstration of price targeting.

Realistically, it only costs a few extra cents to produce the luxury drink. But the mark up value could have you believe that the shop is sourcing ingredients from a distant organic paradise. This is rarely ever the case.

The lavish coffee shows how much the shop WANTS to charge, and the budget coffee is what it can AFFORD to charge. The shop has the means to sell the luxury coffee at a few cents more than the ordinary latte and still make the same margin of profit. But to do so would be to set a uniform price for all coffee lovers, when some are quite happy to pay the premium.

How Price Targeting Can Work For You

How can we spin the coffee example in to something that an online entrepreneur would be familiar with? Well how about we start with the notorious “full support” upgrade that comes with many online services?

How many times have you compared prices for a digital product only to find that the biggest price hiker is 24/7 support?

Your web server might only cost $50/month with the regular plan. This is a price point that is designed to attract the budget brigade. But your hosting provider knows full well that not every professional is budget conscious when it comes to his web hosting. For those who are prepared to pay more, why leave the money on the table?

If throwing in unlimited 24/7 support allows the provider to charge $75/month instead of $50, they have found a way of appealing to both those who are happy to pay more (extra value, peace of mind), and those who can only justify the budget option.

But then you have to ask yourself; What is the true cost of providing 24/7 customer support? Most of the companies who offer this upsell ALREADY provide 24/7 support for their budget customers. But it doesn’t make sense to campaign on this information. You can’t expect your premium customers to pay the extra $25/month if the budget customers are enjoying the same quality of service for less money.

Many companies will actually make a conscious effort to devalue their “starter packages”, knowing full well that they can’t allow the difference in service to become so marginal that a high paying customer would realise there is little to gain in paying more.

Is there really a need for so many different versions of Windows? We have Home, Professional and Ultimate. Microsoft could quite easily bundle all the capabilities of Ultimate in to EVERY installation. But if my Home edition were as powerful as the Ultimate edition, how could Microsoft possibly charge corporate companies through the nose for the same product? So, of course, Microsoft takes it’s carefully designed software and sabotages it.

They remove enough features to create three very different markets that price themselves accordingly. Crazily enough, the cost of rolling out the weaker product is often greater than the premium version. The additional effort of stripping away functionality can incur extra costs. But it’s worth it for Microsoft because the cream of the crop will be handing over an extra $100 per installation.

When you board an airplane in economy class, do you really think your legs are cramped because the massive profit spinning airline couldn’t afford to specify a few extra cms of room when designing the aircraft? The experience is designed to be marginally uncomfortable so that these companies can still milk money from the picky flyers who are willing to pay extra for first class.

Examples of effective price targeting are all around you. From the trains you board, to the groceries you buy, to the clothes you wear. We make decisions everyday on the value of these items. You should give your own customers every opportunity to find a deal they agree with.

Price Targeting Is Just Plain Smart

When you look at your own products and services, ask yourself what could you be doing differently to effectively price target your customers. Developing a fantastic solution gives you enormous control. You may be selling your product at $150 and attracting sales from both the budget spenders and the corporate ties and suits.

Think about what could be added to the product that would allow you to charge $250. And what could be removed that would allow you to capture more customers at $100?

Structured price targeting gives you the ability to place the ball in the customer’s court and ask: “How much are you willing to pay?” If you never ask this question, you will never realise your maximum sales OR your maximum profit margins.

Recommended This Week:

Check out Filthy Rich Mind, a brand new project I’m collaborating on with a couple of other writers in the self-improvement market. It’s a fun project and if you like off-the-wall advice for improving your lifestyle, subscribe here for updates.
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How To Disappear Completely (And Still Make Money)

Apr 26 2011

For those of you familiar with ViperChill, you may have recently read his excellent post on the benefits of email blogging. There aren’t many bloggers who consistently drop good information in this industry, but Glen is one of them. And this topic, I can tell you from my own experience, is worth a hell of a lot of money.

What is email blogging? Sounds like a more long-winded version of email marketing, right? I’ve always had an itch with the way most email marketers operate. Blessed with a sixth sense for detecting salesman tricks, my gut instinct rarely allows for me to stay opted-in to any mailing list for longer than the first message.

But is that because I’m a cynical bastard, or because most email marketers follow the same trodden path towards their goal of selling a product?

Forget blog subscriptions. Email is the most direct medium of communicating with your readership. It’s also the best way to generate sales and leads. As long as you’re prepared to temper your mailing campaigns with enough useful information to keep them relevant and non-spammy, you can bank a fortune from collecting email addresses.

So if a mailing list is the most profitable asset for generating profit, why do so many of us bother with blogs in the first place? Part of the reason screams ego (“Look, I’ve got a WordPress, I’m famous Mummy!”), and another suggests the following of convention.

Email blogging, as Glen calls it, involves removing the need for an active web presence and delivering 100% of your content via email. The idea being that by using a simple squeeze page to collect your opt-ins, you can save your best written blogs for the reader’s inbox where they are most likely to be seen – and acted on – in the most profitable way.

This isn’t a new tactic. I can think of a hundred marketers who follow the same principle of promoting their products and affiliate programs via email, without stopping to develop a full blog. But how many email marketers actually treat their mailshots with the same care and brand loyalty that they’d be forced in to conveying on an open blog?

No, most of the time, each email is treated as a stepping stone to the next. A chapter in a series with the end goal being a clearly defined conversion for Product X.

If you strip away the aggressive marketing edge, there are many benefits to be gained through distributing your content solely via email.

How many times a day do people check your site? How about their email? There’s a reason many affiliate programs offer higher payouts for their email marketers. The conversions are better. Period.

The problem, as Glen pointed out but didn’t entirely elaborate on, is that driving traffic to a squeeze page is so very 2006. The usual methods of Adwords whoring, and even Facebook targeting, are now riddled with complications such as Quality Score and the much maligned “gateway page” factor.

Nobody is going to want to deliver their content via email if they can’t attract the readership to give it a purpose. And this is a shame, because think about it.

Think about those early stages in the lifecycle of your blog. There’s nothing more disheartening than seeing a small trickle of 30 visitors a day with a flatlining growth chart. The only thing more disheartening is to notice that not a single one of those users is a returning reader. How are you supposed to get a blog off the ground if nobody ever comes back?

Your content may be to blame, but it’s often the simple reality that growing a new blog is a colossal pain in the balls. Like shoving shit up a hill, my new favourite phrase.

In contrast, if all of your efforts are concentrated on channeling visitors to your squeeze page, there is a clear and easy currency for measuring your progress. Each and every subscriber gained is one more reader that you can guarantee will at least see the headline of your next blog, even if he or she doesn’t decide to read it.

The post on ViperChill suggests article marketing, list trading and direct advertising buys as the best methods of driving traffic to your squeeze page. These are valid methods. But in my opinion, the single biggest weapon at your disposal – post Google and Facebook – is the freedom of PPV advertising on networks such as Traffic Vance and Media Traffic.

If you’re not familiar with PPV advertising (pay per view), you should probably get familiar real fast. It’s one of the cheapest methods of delivering laser targeted eyeballs to your website. And it’s the easiest way to massively increase the number of subscribers by putting your squeeze page out there on a large scale.

You can grab new subscribers for as little as $0.01 by advertising your squeeze page in pop-up form on other highly relevant URLs. There is no limit to the creativity that PPV advertising affords. And it’s a match made in heaven for any of you looking to create content distributed solely by email.

Once again, I highly recommend you read How To Build a Six Figure Blog Without Anyone Knowing on ViperChill. And once you’ve found the inspiration for email blogging, pair it up with the power of PPV advertising to create the perfect moneymaking scheme.

Recommended This Week:

Before you can run an email blog, you need mailing software. For this, I recommend Aweber. There are other solutions, but Aweber is unparalleled in my opinion. Take a chance elsewhere if you dare.
If you’re not already registered on PPV Playbook, you are missing a beat sunshine. Easily the BEST place to learn from marketers who are actually making money. It has some awesome case studies. The catch is that you will need to pay some of your hard earned pesos to access it. I swear from the bottom of my black heart, joining is worth every penny
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