A step-by-step guide to creating a growth strategy based on your current situation and future possibilities.
I'll - you think you already have a strategy.
And well you may, but strategy as a concept is just like love: much used and little understood. Many businesses (and that includes small entrepreneurs, large corporations, non-profits, community organizations, governments, NGOs?the works) neither know what strategy really is, nor how to get one.
And even if you do, in fact, have a strategy-is it the right one? The best one? This is so important-marketing guru Jay Abraham says-and I agree-a superior strategy badly executed will - a bad strategy well executed, any day.
It's easy to say, "This is big company stuff. We know what we need-why should we do all the extra work." While a "strategy-less" group of marketing tactics may work well and produce good results, is it taking your business in the best direction? You may be making money, but are you making the most money possible? Could another suite of tactics implementing a superior strategy produce far - ter results?
Which brings me to the point of this two-part article: how to formulate strategy. In the next 1500 words, I'm going to present the first half of a basic system for identifying high-impact strategies in your business. (Just the first half? Yes. While I strive to make this as simple as possible, it still takes a bit of explaining, and editors and readers alike detest long articles!) So Part 2 will finish the outline, and in future articles, I will discuss each system component in finer detail.
Let's begin with a working definition of strategy.
Strategy is the guiding principle on which are based a series of interlinked decisions regarding the selection and deployment of resources and tactics, whose purpose is realizing a vision and achieving decisive objectives in a competitive and changing environment.
This definition tells us a few things:
* The purpose of all strategic decisions is achieving your vision and "decisive" or critical-to-purpose objectives.
* Strategy is about selecting specific resources and tactics to get the desired result.
* Strategy is not static; it is decisions in a series, and evolves continuously over time.
* Strategy is broad and all-encompassing. With that in mind, here are the 8 steps to formulating strategy:
# Set your vision
# Gather environmental and competitive intelligence
# Take stock of your organization's strengths and weaknesses
# Select your "grand strategy"
# Establish decisive objectives
# Rate and rank your "SWOTs"
# Match your internal and external factors to identify strategic alternatives
# Select specific strategies for implementation
Of course, there is one last step: turning your strategy into tactics and game plans, and execute. We won't get into that in .
Step 1. Establish your vision.
People complicate the idea of vision. A vision is simply a story describing how you want things to be in the future. Some people can tell these stories easily-they know exactly where they want to be and what it will "look" like.
Others need help. The best approach is to answer a series of questions regarding what your organization does, who are it's clients or beneficiaries, what its impact is, how big it is, where it is, how it operates, when all these things will occur, and so on. As a result of answering these questions, your vision will emerge.
Of course, you may already have a vision. If so, now is the time to insure that it is relevant and powerful.
The test of a good vision is if it inspires; not only you and your management team, but all of your stakeholders: your partners, employees, clients, investors, vendors, lenders, your community, your government-and perhaps the public at large. A great vision inspires, and it also provides direction. Every action you take should further your vision. If it doesn't, don't do it.
Step 2. Gather environmental and competitive intelligence.
To develop the best strategies you must understand the world outside your organization. Quantify and qualify, not just absolutes, but trends. And importantly-identify changes in the status quo. Key areas for focus include competitors, technology, market size and trends, your clients' industry health, macroeconomic trends, availability of key resources (people and materials) government regulations and other political considerations, and changes in demographics and - graphics-like customer taste.
Devise relevant measures for each of these key external areas. For instance, examine your competitors for revenue, profit and market share growth (or decline), product and service changes, shifts in marketing and sales strategy, changes in geographic distribution, strategic alliances, and major customer announcements.
Macroeconomic factors include the obvious such as interest and employment rates and trends, production and consumption statistics, along with finer grained-industry issues such as new home buying-which impacts a wide variety of businesses, or defense spending-which impacts a completely different set of sectors.
Step 3. Take stock of your organization's strengths and weaknesses
Now it is time to shine the light on your organization. Examine each functional area looking for strengths and weaknesses. Identify strengths that will help the company realize its vision, and weaknesses that will impede its goals.
The following is a starter list of focus areas:
* Ability to get new prospects (Marketing)
* Ability to get new clients (Sales)
* Products and services, both existing and those in R&D.
* Finance or Money, including cash flow, access to capital, revenues, profits, ROI
* Leadership, including values and vision alignment, decisive objectives
* People, including skills inventory, staffing levels, employee loyalty, compensation
Other areas to examine include:
* Client satisfaction
* Client services
* Logistics
* Competitive positioning
* Unique Client Proposition
* Management team
* Administration
Step 4: Select your Grand Strategies.
This "grand strategy" approach is based upon industry/product revenue growth rates. It is specific to a business unit with one major industry and/or product focus. If your business is more complex, you may repeat the process for each focus sector.
First, consider your industry and product sector growth rate. Is it growing or declining?
Second, consider your competitive strength within that sector. For this analysis Competitive Strength has two components, the size and trend of your market share, and your organization's financial strength; specifically either cash flow from operations, or access to capital.
To simplify: strong market share + strong finances = strong competitive position. Either strong market share or strong finances = average competitive position. Neither strong market share nor strong finances = weak competitive position.
This defines a two-by-three matrix of strategic choices from which to select your grand strategy.
The exact choice you make will be dictated by the specifics of your situation: sector strength and competitive strength, along with your stated vision and purpose. Choose from the list which best describes your business:
Strong sector, strong competitive position.
This means that you are in a growing market, hold a commanding market position, and have cash with which to maneuver. Your strategic choices include:
* Market strategy to increase demand and sales for existing products and services, in existing and new markets
* Marketing strategy to increase market penetration for existing products and services and capture greater share.
* Enhance or extend existing products and services; add-ons, backends, strategic joint ventures.
* Gain control over distribution - bring external sales inside. Take sales from distributors.
* Gain control over suppliers Acquisition, merger, or joint-ventures with competitors
* Develop strategic partnerships to increase distribution, or gain new products.
* Develop related products and services for existing customer base - backend strategies.
Strong sector, average competitive position
Here you are in a growing market, but have either a commanding position, but limited cash-or vice versa. The exact choice available to you depend on your situation. You can:
* Seek underserved niches: move into small, defined and profitable markets.
* Marketing strategy to increase market penetration for existing products and services and capture greater share.
* Enhance or extend existing products and services; add-ons, backends, strategic joint ventures
* Strategic partnerships - seek products/services for existing customers
* Exploit assets via joint ventures and host-beneficiary relationships
* Develop related products and services for existing customer base - backend strategies.
* Increased marketing penetration via distributors and 3rd parties
* Get more money: raise capital via debt or equity
Strong sector, weak competitive position
You are in a strong sector, but have relatively small market share, and limited or no cash. Your choices include:
* Seek underserved niches: move into small, defined and profitable markets.
* Marketing strategy to increase market penetration for existing products and services and capture greater share.
* Strategic partnerships - seek products/services for existing customers
* Develop products and services for existing customer base - backend strategies.
* Sell your client base to a competitor or cooperator; or reposition your existing products to appeal to new customer types.
* Sell the product line and use cash to reposition remaining assets
* Sell the company
Weak sector, strong competitive position
In this case, you dominate a weak market and have cash to exploit your position. You should:
* Add related products and services for existing customer base - backend strategies.
* Add un-related products and services for existing customer base - backend strategies.
* Add new products and services for new customer base
* Create joint ventures in unrelated markets
Weak sector, average competitive position.
You are in a mediocre position in a weak market. Depending on your exact circumstances, you can retreat, use what's left of your cash to buy your way out with new products, or try to enroll a strong partner. Choices include:
# Reduce costs however you can.
# Add related products and services for existing customer base - backend strategies.
# Add new products and services for new customer base
# Seek to dominate the smallest definition of your market using low-cost / no-cost strategies.
# Create strategic partnerships and joint ventures
Weak sector, weak competitive position
Sorry to say, you are in a bad place. In a word-retreat! You can do this by:
# Reduce costs however you can.
# Sell product line
# Sell company
If you don't want to liquidate, seek to expand your marketing using low-cost / no-cost marketing strategies - but this may be a losing proposition.
Also, as above, attempt to create strategic partnerships and joint ventures, but it may be difficult to attract partners to a market with poor fundamentals. At this point you might say, "?sell the customers? Sell the company? No way. I'm holding on." That just isn't a strategic point of view.
Strategy says you can make more money doing something else-so you best start thinking about it.
In general, these choices are listed from most attractive to least. Your organization's best choices will be based on your particular circumstances.
By now you have formulated a vision, gathered analyzed your external environment and organization, identified relevant strengths, weaknesses, opportunities and threats, and begun to zero in on a grand strategy. That should keep you busy for a while.
In The Secrets of Strategy, Part II, we'll complete the process.
Remember-you don't need a strategy. But having one increases your chances of generating the greatest profits from your resources. After all, that is the whole point of strategy.
Sabtu, 10 November 2007
The Beginners Mail Order Business Guide.
No claim is made that the steps outlined would be successful for someone else. Each individual should obtain whatever professional advice may be
necessary for his particular operation.
INTRODUCTION
The following is designed to provide a check list for new entrants into the mail order field. Each mail order business is different, but there are common elements that apply to most mail order businesses, as well as some specific characteristics that may vary from business to business. The following suggestions were developed to assist you in avoiding costly mistakes. Apply the various points as they relate to your specific business.
COMPANY NAME
* Select a short, easily remembered name.
* Unless you are using your own name, it is required in most jurisdictions that a trade name is either registered with the county or the state.
* Before you spend money for printing material, make sure that the name you choose is not already registered to another company. You can usually conduct a name search with an office of the appropriate jurisdiction by telephone.
* You may consider using a name that describes your product.
COMPANY ADDRESS
* Most newly established mail order businesses will operate out of their home until the volume of the business requires larger space.
* Most mail order businesses prefer not to use their home address as their company address. If you do, you will advertise your home address in regional and national publications. You have two other choices, a Post Office Box(POB) or a postal box located in a commercial enterprise which rents out mail boxes.
* A POB is generally the least expensive, both to rent and for advertising purposes. (See below) Some mail order operators claim that it reduces business because people do not trust a POB address. Yet there are just as many mail order operators who disprove this notion. The decision is yours.
* If you rent a mail box in a commercial enterprise, your box number usually becomes a suite number in the address.
* Almost all publications will charge you a full word charge for each component of your address, except the Zip Code and State which is counted as one word, Example:
Information Books, 300 Main Street, Suite 611, Centerville,
Md 20910 Or:
Information Books, Box 1000, Centerville, Md 20910.
* The first address is counted as 9 words, the second one as 6 words. Since advertising costs anywhere from 50 cents to $10.00 per word (classified advertising) you could save a substantial amount of money at the end of the year if you use a post office box.
TELEPHONE
* Some mail order companies do not show their phone numbers on their stationery, others do. It gives the customer some comfort to see a telephone number, although he may never use it.
* You can show your residence phone number in the appropriate printed material, or you can obtain a business listing for your home.
* The residence phone is fine, for starters, if it is answered in a professional manner at all times.
* If you plan to sell higher priced ticket items, however,
(over $15.00) a business listing would be advantageous since a prospective customer may pick up the phone and check with the information operator whether "Company X" is listed.
BASIC SUPPLIES
* Be conservative and frugal in your acquisition of items that you feel are needed. It's always wise to start small, and as inexpensively as possible, and as you build profits, you can
buy more and - ter items.
* The basics are a good quality computer, Business stationery, business envelopes (#10's), and return envelopes, either #6 or #9 is fine. All items should have your business name and address
imprinted on them.
* You will also need some mailing labels and some miscellaneous office supplies.
PRODUCT
* If possible, choose a product or products that people need
on an ongoing basis.
* Be sure the product is of acceptable quality. Know the
product before you sell it.
* If feasible, choose an item that is not widely available
from retailers.
* Develop a line of merchandise. It is rarely possible to make money with just one or two items. The availability of a line of related products is paramount to mail order success.
* The more specialized your products are, the easier your marketing becomes.
* If you are selling books, for example, it would be impossible, except for a very large company, to sell all types of books. You may decide to specialize in books pertaining to sports, and may want to go even further by zeroing in on football or baseball.
SUPPLIERS
* Your suppliers should provide you with reliable, quality,
and reasonable pricing.
* Since you probably should provide some type of a money back
guarantee (30 days is standard) you should expect the same guarantee from your suppliers.
* When buying from out of town suppliers, be sure to include the shipping charge in comparing prices to local suppliers.
DROP-SHIPMENTS
* Under a drop-ship agreement which is available from many suppliers for a variety of products, the supplier ships your customers' orders directly under your shipping label.
(Suggested reading: "American-Drop-Shippers Directory".)
* It is customary that the supplier guarantees not to include any of his promotional materials with the shipment; or to use your customer's name for any future mailings.
* Drop-shipping arrangements are suitable for people just getting started. It allows you not to have to carry a costly inventory.
* As your business increases and you develop a sense of what sells well, you can stock limited supplies of certain fast selling items, and continue utilizing drop-shipments for slower products. Eventually, as your business flourishes, you can carry an inventory of everything you sell.
* Handling your own shipments is advantageous for the following reasons: It cuts down on your shipping expenses, it decreases the shipping time, and it allows you to include promotional material directly with the shipment.
* When you do utilize drop-shipments, be sure to send your customer a note that his order is being processed and he can expect it by, or around a certain date.
* It is unnecessary to make your customer aware of the fact that the item is being drop-shipped. Include some promotional material with your letter or note.
PRICING
* Buy at a price that allows you an adequate mark-up. In setting your prices, allow for all costs:
* Cost of product, shipping cost and postage, bank charges including credit card charges, wrapping, bad debts, rejects, refunds, etc. In addition, the other normal overhead costs need to be considered,. Lastly, there is the substantial marketing cost for advertising, and for printing of
promotional items. (See following paragraphs)
* Your prices of course, have to be fair and in line with your competition.
* It is not necessary that you make a big profit on each and every item. the real profit in mail order comes from follow-up orders.
* THE 3 BIGGEST EXPENSE CATEGORIES IN MAIL ORDER ARE:
ADVERTISING, PRINTING COST, AND POSTAGE. Over 80% of your total expenses are in this area. Watch these expenses very carefully.
ADVERTISING EXPENSE
* Start with classified ads. As you test them and know what
is successful, you can switch to display ads.
* To test an offering and a specific ad, run it once in a specific publication and you should get a reading that could be very positive or very negative. It might also be inconclusive. If that is the case, simply run it again.
* It is best to test an ad by running it in different publications.
* Advertise in publications that advertise similar products.
* If you have a sure seller, buy larger space.
* Special interest products should be advertised in special interest publications.
* Keep on changing the ad and offering until you are satisfied
it is right.
* Examples of changes you can make are: size of ad, copy,appeal, special gimmicks such as discounts, free gifts or reports, etc.
* Remember that a given ad can be 20 or 30 times more successful than another ad advertising the same product. It pays, therefore, to continue testing until it is just right.
* Repeat a successful ad until you no longer get a satisfactory return.
* The conventional advertising cost is 15% of sales or more in
mail order.
* To evaluate your advertising cost, think in terms of cost per inquiry. This is calculated by dividing the number of inquiries into the cost of the ad. that cost may vary from about $$0.80 to $2.00 or more.
* Be careful when you allocate advertising funds to small mail order publications. The ad may appear to be very inexpensive. However, a $15.00 ad that gets no response is a lot more expensive than a $150.00 ad that gets over 100 inquiries.
* Stay away from those publications that have no news or editorial content, and also those that have poor printing quality.
* There are a number of quality mail order publications, but it takes time to find the right publication for your product.
ADVERTISING COPY
* Write tight copy.
* Write as you speak. You are generally appealing to a mass market.
* Prepare your copy carefully. It must fit your specific medium.
* The emphasis should be on YOU rather than I, the company.
* Be sincere and don't make unreasonable claims, but remember that you are selling.
* Try to convince the reader that you are reliable and
trustworthy.
* Give simple specific instruction.
* Key all ads to test their effectiveness.
* Check and double check, and have someone else check your ad to make sure everything is correct and easy to understand.
* Watch where your competitors are advertising.
* Experiment with new publications.
* It is generally considered impossible to sell something that costs more than $2.00 - $3.00 direct from either a classified ad or a small display ad. This is because there just is not enough space to convince someone to part with $10.00 or $20.00, for example. It takes a full page ad to do that.
* If you use an agency, use one that specializes in mail order, even if it is located out of town.
RESPONDING TO INQUIRIES
* Each inquiry you receive in response to an ad should be answered via First Class, if at all possible, within 24 hours.
* The contents of the envelope going to the prospective customer should contain: a circular, promotional flier, or mini-brochure, a sales letter, an order form (the order form can be part of the circular), a return envelope, and other appropriate information, such as a fact sheet, a free report, etc.
* In general, circulars should be limited to one 8 1/2 x 11 page.
* A sales letter, on the other hand, can be as long as it takes to say everything you need to say to a prospective customer in order to sell him the product.
* Sales letters should have an attention getting opening. The idea of the opening is to get him to read the rest of the letter.
POSTAGE AND SHIPPING COST
* Answer inquiries to your advertising immediately and via First Class Mail. Use Bulk Mail for future mailings.
* You can save a great deal of money by getting a Bulk Mail permit. Mail must be sorted by zip code. Get more specific information from your Post
Office.
* Keep your mailing lists clean - updated.
* Utilize all of the various mail classes, such as Printed Mail and Book rate.
* Compare costs of shippers other than the Post Office.
* Guarantee return postage.
* Watch your shipping weight. A fraction of an ounce can make a big difference in a large mailing.
PRINTING COST
* Very large printers will not be interested in your business. Very small ones, quick printers and instant printers although convenient, are generally too expensive. Their equipment is not large enough to be competitive.
* There are many medium sized printers that will give you good pricing and quality printing. Often they have the capability to help you with layout and design.
* Don't hesitate to use out of town printers. If you live in a high cost-of -living area, you can probably save a substantial amount of money. Many of these printers advertise in mail order publications.
* Utilize the promotional material available from your supplier.
* Until you know what sells, print small quantities, even if it is more expensive.
* Use colored paper for your promotional flyers to spice up your offer. Use white paper, blue or black ink for everything else.
CUSTOMER PAYMENTS, REFUNDS AND COMPLAINTS
* Accept money orders and checks.
* Some mail order companies state in their material that they will not ship for 10 days to 2 weeks when payment is made with an out of town check. This may be an unwise practice because, it can create - feelings with your customers. NSF checks are rare.
* An increasing number of mail order companies accept credit cards - Visa and MasterCard - for payment. It is generally felt that it does increase sales.
* If you cannot obtain a credit card merchant agreement with your bank work through a credit card clearing house. A number of these companies advertise in mail order publications. Since these companies generally charge - ween 6-9%, it may be wise to set a minimum amount such as $15.00 for credit card orders.
* Remember, "the customer" is always right. An argument won,is usually a customer lost.
* If you receive an order with an underpayment, ship the order and bill the customer for the difference.
* Make refunds on overpayments quickly.
* Most mail order companies offer a 30 day money back guarantee. Some offer 90 days and even more.
* It is unwise to offer money back guarantees on items priced very inexpensively, for example, a $3.00 report.
RECORD KEEPING
* As in any business, it is important to keep records.
* You need records to tell you what is going on in your business; to evaluate both your revenues and your expenses.
* It is also required by law that you keep certain records.
* Keep especially good records of your advertising expenses so you can evaluate your advertising on an ongoing basis.
MAILING LISTS
* It is recommended that you do no direct mailings, except to your own list of customers and inquirers, until you have
thoroughly tested a specific product through advertising.
* Stay away from inexpensive mailing lists, under $40.00 -$50.00 per 1000.
* Avoid mailing lists whose owners make unrealistic claims.
* Work with a list broker who wants to see your product before he will rent you a list. Lists are rented for one time use.
* Lists from professional list brokers rent from $60.00 and
up, per thousand names.
* The general consensus is that you need to mail a minimum of 1000 names to get a fair reading. 5000 names would give you a more accurate test.
* Buyer' names are - ter than names of inquiries.
* The best mailing list is your own list of buyers. Second best is your own list of inquirers.
FOLLOW UP
* The most important factor in mail order is FOLLOW-UP
Substantial profits can be generated from this segment, if it is properly handled.
* You can generate a lot of sales by including promotional material when filling orders for customers. Other orders are generated from mailings that are made to former customers, as well as individuals who inquired about an offer in the past.
* Send out regular mailings to your customers. At a minimum,
four times per year. However, you can send out mailings as often as every 6 weeks or so, if you have a new product to offer.
* As you build your mailing lists and you send out regular
mailings, your orders will start flowing in.
RESEARCH AND EDUCATION
* Whether you are new to this field or not, to stay on top, you must continue your education by reading books and reports on mail order and subscribing to mail order publications.
* Always be on the lookout for new products you can offer your customers.
* Study the advertising of your competitors. Request their
material and study it.
* Study all mailings you receive.
Continue to learn about mail order by reading, experimenting, and talking with other mail order operators. Have patience. Success will not come overnight. It takes time to build a successful business. Start slowly and expand your business from your profits.
necessary for his particular operation.
INTRODUCTION
The following is designed to provide a check list for new entrants into the mail order field. Each mail order business is different, but there are common elements that apply to most mail order businesses, as well as some specific characteristics that may vary from business to business. The following suggestions were developed to assist you in avoiding costly mistakes. Apply the various points as they relate to your specific business.
COMPANY NAME
* Select a short, easily remembered name.
* Unless you are using your own name, it is required in most jurisdictions that a trade name is either registered with the county or the state.
* Before you spend money for printing material, make sure that the name you choose is not already registered to another company. You can usually conduct a name search with an office of the appropriate jurisdiction by telephone.
* You may consider using a name that describes your product.
COMPANY ADDRESS
* Most newly established mail order businesses will operate out of their home until the volume of the business requires larger space.
* Most mail order businesses prefer not to use their home address as their company address. If you do, you will advertise your home address in regional and national publications. You have two other choices, a Post Office Box(POB) or a postal box located in a commercial enterprise which rents out mail boxes.
* A POB is generally the least expensive, both to rent and for advertising purposes. (See below) Some mail order operators claim that it reduces business because people do not trust a POB address. Yet there are just as many mail order operators who disprove this notion. The decision is yours.
* If you rent a mail box in a commercial enterprise, your box number usually becomes a suite number in the address.
* Almost all publications will charge you a full word charge for each component of your address, except the Zip Code and State which is counted as one word, Example:
Information Books, 300 Main Street, Suite 611, Centerville,
Md 20910 Or:
Information Books, Box 1000, Centerville, Md 20910.
* The first address is counted as 9 words, the second one as 6 words. Since advertising costs anywhere from 50 cents to $10.00 per word (classified advertising) you could save a substantial amount of money at the end of the year if you use a post office box.
TELEPHONE
* Some mail order companies do not show their phone numbers on their stationery, others do. It gives the customer some comfort to see a telephone number, although he may never use it.
* You can show your residence phone number in the appropriate printed material, or you can obtain a business listing for your home.
* The residence phone is fine, for starters, if it is answered in a professional manner at all times.
* If you plan to sell higher priced ticket items, however,
(over $15.00) a business listing would be advantageous since a prospective customer may pick up the phone and check with the information operator whether "Company X" is listed.
BASIC SUPPLIES
* Be conservative and frugal in your acquisition of items that you feel are needed. It's always wise to start small, and as inexpensively as possible, and as you build profits, you can
buy more and - ter items.
* The basics are a good quality computer, Business stationery, business envelopes (#10's), and return envelopes, either #6 or #9 is fine. All items should have your business name and address
imprinted on them.
* You will also need some mailing labels and some miscellaneous office supplies.
PRODUCT
* If possible, choose a product or products that people need
on an ongoing basis.
* Be sure the product is of acceptable quality. Know the
product before you sell it.
* If feasible, choose an item that is not widely available
from retailers.
* Develop a line of merchandise. It is rarely possible to make money with just one or two items. The availability of a line of related products is paramount to mail order success.
* The more specialized your products are, the easier your marketing becomes.
* If you are selling books, for example, it would be impossible, except for a very large company, to sell all types of books. You may decide to specialize in books pertaining to sports, and may want to go even further by zeroing in on football or baseball.
SUPPLIERS
* Your suppliers should provide you with reliable, quality,
and reasonable pricing.
* Since you probably should provide some type of a money back
guarantee (30 days is standard) you should expect the same guarantee from your suppliers.
* When buying from out of town suppliers, be sure to include the shipping charge in comparing prices to local suppliers.
DROP-SHIPMENTS
* Under a drop-ship agreement which is available from many suppliers for a variety of products, the supplier ships your customers' orders directly under your shipping label.
(Suggested reading: "American-Drop-Shippers Directory".)
* It is customary that the supplier guarantees not to include any of his promotional materials with the shipment; or to use your customer's name for any future mailings.
* Drop-shipping arrangements are suitable for people just getting started. It allows you not to have to carry a costly inventory.
* As your business increases and you develop a sense of what sells well, you can stock limited supplies of certain fast selling items, and continue utilizing drop-shipments for slower products. Eventually, as your business flourishes, you can carry an inventory of everything you sell.
* Handling your own shipments is advantageous for the following reasons: It cuts down on your shipping expenses, it decreases the shipping time, and it allows you to include promotional material directly with the shipment.
* When you do utilize drop-shipments, be sure to send your customer a note that his order is being processed and he can expect it by, or around a certain date.
* It is unnecessary to make your customer aware of the fact that the item is being drop-shipped. Include some promotional material with your letter or note.
PRICING
* Buy at a price that allows you an adequate mark-up. In setting your prices, allow for all costs:
* Cost of product, shipping cost and postage, bank charges including credit card charges, wrapping, bad debts, rejects, refunds, etc. In addition, the other normal overhead costs need to be considered,. Lastly, there is the substantial marketing cost for advertising, and for printing of
promotional items. (See following paragraphs)
* Your prices of course, have to be fair and in line with your competition.
* It is not necessary that you make a big profit on each and every item. the real profit in mail order comes from follow-up orders.
* THE 3 BIGGEST EXPENSE CATEGORIES IN MAIL ORDER ARE:
ADVERTISING, PRINTING COST, AND POSTAGE. Over 80% of your total expenses are in this area. Watch these expenses very carefully.
ADVERTISING EXPENSE
* Start with classified ads. As you test them and know what
is successful, you can switch to display ads.
* To test an offering and a specific ad, run it once in a specific publication and you should get a reading that could be very positive or very negative. It might also be inconclusive. If that is the case, simply run it again.
* It is best to test an ad by running it in different publications.
* Advertise in publications that advertise similar products.
* If you have a sure seller, buy larger space.
* Special interest products should be advertised in special interest publications.
* Keep on changing the ad and offering until you are satisfied
it is right.
* Examples of changes you can make are: size of ad, copy,appeal, special gimmicks such as discounts, free gifts or reports, etc.
* Remember that a given ad can be 20 or 30 times more successful than another ad advertising the same product. It pays, therefore, to continue testing until it is just right.
* Repeat a successful ad until you no longer get a satisfactory return.
* The conventional advertising cost is 15% of sales or more in
mail order.
* To evaluate your advertising cost, think in terms of cost per inquiry. This is calculated by dividing the number of inquiries into the cost of the ad. that cost may vary from about $$0.80 to $2.00 or more.
* Be careful when you allocate advertising funds to small mail order publications. The ad may appear to be very inexpensive. However, a $15.00 ad that gets no response is a lot more expensive than a $150.00 ad that gets over 100 inquiries.
* Stay away from those publications that have no news or editorial content, and also those that have poor printing quality.
* There are a number of quality mail order publications, but it takes time to find the right publication for your product.
ADVERTISING COPY
* Write tight copy.
* Write as you speak. You are generally appealing to a mass market.
* Prepare your copy carefully. It must fit your specific medium.
* The emphasis should be on YOU rather than I, the company.
* Be sincere and don't make unreasonable claims, but remember that you are selling.
* Try to convince the reader that you are reliable and
trustworthy.
* Give simple specific instruction.
* Key all ads to test their effectiveness.
* Check and double check, and have someone else check your ad to make sure everything is correct and easy to understand.
* Watch where your competitors are advertising.
* Experiment with new publications.
* It is generally considered impossible to sell something that costs more than $2.00 - $3.00 direct from either a classified ad or a small display ad. This is because there just is not enough space to convince someone to part with $10.00 or $20.00, for example. It takes a full page ad to do that.
* If you use an agency, use one that specializes in mail order, even if it is located out of town.
RESPONDING TO INQUIRIES
* Each inquiry you receive in response to an ad should be answered via First Class, if at all possible, within 24 hours.
* The contents of the envelope going to the prospective customer should contain: a circular, promotional flier, or mini-brochure, a sales letter, an order form (the order form can be part of the circular), a return envelope, and other appropriate information, such as a fact sheet, a free report, etc.
* In general, circulars should be limited to one 8 1/2 x 11 page.
* A sales letter, on the other hand, can be as long as it takes to say everything you need to say to a prospective customer in order to sell him the product.
* Sales letters should have an attention getting opening. The idea of the opening is to get him to read the rest of the letter.
POSTAGE AND SHIPPING COST
* Answer inquiries to your advertising immediately and via First Class Mail. Use Bulk Mail for future mailings.
* You can save a great deal of money by getting a Bulk Mail permit. Mail must be sorted by zip code. Get more specific information from your Post
Office.
* Keep your mailing lists clean - updated.
* Utilize all of the various mail classes, such as Printed Mail and Book rate.
* Compare costs of shippers other than the Post Office.
* Guarantee return postage.
* Watch your shipping weight. A fraction of an ounce can make a big difference in a large mailing.
PRINTING COST
* Very large printers will not be interested in your business. Very small ones, quick printers and instant printers although convenient, are generally too expensive. Their equipment is not large enough to be competitive.
* There are many medium sized printers that will give you good pricing and quality printing. Often they have the capability to help you with layout and design.
* Don't hesitate to use out of town printers. If you live in a high cost-of -living area, you can probably save a substantial amount of money. Many of these printers advertise in mail order publications.
* Utilize the promotional material available from your supplier.
* Until you know what sells, print small quantities, even if it is more expensive.
* Use colored paper for your promotional flyers to spice up your offer. Use white paper, blue or black ink for everything else.
CUSTOMER PAYMENTS, REFUNDS AND COMPLAINTS
* Accept money orders and checks.
* Some mail order companies state in their material that they will not ship for 10 days to 2 weeks when payment is made with an out of town check. This may be an unwise practice because, it can create - feelings with your customers. NSF checks are rare.
* An increasing number of mail order companies accept credit cards - Visa and MasterCard - for payment. It is generally felt that it does increase sales.
* If you cannot obtain a credit card merchant agreement with your bank work through a credit card clearing house. A number of these companies advertise in mail order publications. Since these companies generally charge - ween 6-9%, it may be wise to set a minimum amount such as $15.00 for credit card orders.
* Remember, "the customer" is always right. An argument won,is usually a customer lost.
* If you receive an order with an underpayment, ship the order and bill the customer for the difference.
* Make refunds on overpayments quickly.
* Most mail order companies offer a 30 day money back guarantee. Some offer 90 days and even more.
* It is unwise to offer money back guarantees on items priced very inexpensively, for example, a $3.00 report.
RECORD KEEPING
* As in any business, it is important to keep records.
* You need records to tell you what is going on in your business; to evaluate both your revenues and your expenses.
* It is also required by law that you keep certain records.
* Keep especially good records of your advertising expenses so you can evaluate your advertising on an ongoing basis.
MAILING LISTS
* It is recommended that you do no direct mailings, except to your own list of customers and inquirers, until you have
thoroughly tested a specific product through advertising.
* Stay away from inexpensive mailing lists, under $40.00 -$50.00 per 1000.
* Avoid mailing lists whose owners make unrealistic claims.
* Work with a list broker who wants to see your product before he will rent you a list. Lists are rented for one time use.
* Lists from professional list brokers rent from $60.00 and
up, per thousand names.
* The general consensus is that you need to mail a minimum of 1000 names to get a fair reading. 5000 names would give you a more accurate test.
* Buyer' names are - ter than names of inquiries.
* The best mailing list is your own list of buyers. Second best is your own list of inquirers.
FOLLOW UP
* The most important factor in mail order is FOLLOW-UP
Substantial profits can be generated from this segment, if it is properly handled.
* You can generate a lot of sales by including promotional material when filling orders for customers. Other orders are generated from mailings that are made to former customers, as well as individuals who inquired about an offer in the past.
* Send out regular mailings to your customers. At a minimum,
four times per year. However, you can send out mailings as often as every 6 weeks or so, if you have a new product to offer.
* As you build your mailing lists and you send out regular
mailings, your orders will start flowing in.
RESEARCH AND EDUCATION
* Whether you are new to this field or not, to stay on top, you must continue your education by reading books and reports on mail order and subscribing to mail order publications.
* Always be on the lookout for new products you can offer your customers.
* Study the advertising of your competitors. Request their
material and study it.
* Study all mailings you receive.
Continue to learn about mail order by reading, experimenting, and talking with other mail order operators. Have patience. Success will not come overnight. It takes time to build a successful business. Start slowly and expand your business from your profits.
How To Achieve Success With Your Own Money Making Newsletter.
Writing and publishing a successful newsletter is perhaps the most competitive of all the different areas of mail order and direct marketing. You can still publish newsletter through regular mail. With Internet's help, you can publish your newsletter online. You can reach hundreds of subcribers without costing any postage - it is called eZine publishing.
Five years ago, there were 1500 different newsletters in this country. Today there are well over 10,000 with new ones being started every day. It's also interesting to note that for every new one that's started, some disappear just as quickly as they are started...lack of operating capital and marketing know how being the principal causes of failure.
To be successful with newsletter, you have to specialize. Your best - will be with new information on a subject not already covered by an established newsletter.
Regardless of the frustrations involved in launching your own newsletter, never forget this truth; There are people from all walks of life, in all parts of this country, many of them with no writing ability what so ever, who are making incredible profits with simple two-four- and six page newsletters.
Your first step should be to subscribe to as many different newsletters and mail order publications as you can afford. Analyze and study how the others are doing it. Attend as many workshops and seminars on your subject as possible. Learn from the pros. Learn how the successful newsletter publishers are doing it, and why they are making money. Adapt their success methods to your own newsletter, but determine to recognize where they are weak, and make yours - ter in every way.
Plan your newsletter before launching it. Know the basic premise for its being, your editorial position, the layout, art work, type style, subscription price, distribution methods, and every other detail necessary to make it look, sound and feel like the end result you have envisioned.
Lay out your start up needs; detail the length of time it's going to take to become established, and what will be involved in becoming established. Set a date as a milestone of accomplishment for each phase of your development; A date for breaking even, a date attaining a certain paid subscription figure, and a monetary goal for each of your first five years in business. And all this must be done before publishing your first issue.
Most newsletter publishers do all the work themselves, and are impatient to get the first issue into print. As a result, they neglect to devote the proper amount of time to the market research and distribution. Don't start your newsletter without first having accomplished this task!
Market research is simply determining who the people are who will be interested in buying and reading your newsletter, and the kind of information these people want to see in your newsletter as a reason for continuing to buy it. You have to determine what it is they want form your newsletter.
Your market research must give you unbiased answers about your newsletter's capabilities of fulfilling your prospective buyer's need for information; how much he's willing to pay for it, and an overall profile of his status in life. The questions of why he needs your information, and how he'll use it should be answered. Make sure you have the answers to these questions, publish you newsletter as a vehicle of fulfilment to these needs, and you're on your way!
You're going to be in trouble unless your newsletter has a real point of difference that can easily be perceived by your prospective buyer. The design and graphics of your newsletter, plus what you say and how you say it, will help in giving your newsletter this vital difference.
Be sure your newsletter works with the personality you're trying to build for it. Make sure it reflects the wants of your subscribers. Include your advertising promise within the heading, on the title page, and in the same words your advertising uses. And above all else, don't skimp on design or graphics!
The name of your newsletter should also help to set it apart form similar newsletters, and spell out its advertising promise. A good name reinforces your advertising. Choose a name that defines the direction and scope of your newsletter.
Opportunity Knocking, Money Making Magic, Extra Income Tip Sheet, and Mail Order Up Date are prime examples of this type of philosophy...as opposed to the Johnson Report, The Association Newsletter, or Clubhouse Confidential.
Try to make your newsletter's name memorable...one that flows automatically. Don't pick a name that's so vague it could apply to almost anything. The name should identify your newsletter and its subject quickly and positively.
Pricing your newsletter should be consistent with the image you're trying to build. If you're starting a "Me-too" newsletter, never price it above the competition. In most instances, the consumer associates higher prices with quality, so if you give your readers - ter quality information in an expensive looking package, don't hesitate to ask for a premium price. However, if your information is gathered from most of the other newsletters on the subject, you will do well to keep your prices in line with theirs.
One of the best selling points of a newsletter is in the degree of audience involvement instance, how much it talks about, and uses the names of its readers.
People like to see things written about themselves. They resort to all kinds of things to get their names in print, and they pay big money to read what's been written about them. You should understand this fact of human nature, and decide if and how you want to capitalize upon it-- then plan your newsletter accordingly.
Almost as important as names in your newsletter are pictures. The readers will generally accept a newsletter faster if the publisher's picture is presented or included as part of the newsletter. Whether you use pictures of the people, events, locations or products you write about is a policy decision; but the use of pictures will set your publication apart from the others and give it an individual image, which is precisely what you want.
The decision as to whether to carry paid advertising, and if so, how much, is another policy decision that should be made while your newsletter is still in the planning stages. Some purists feel that advertising corrupts the image of the newsletter and may influence editorial policy. Most people accept advertising as a part of everyday life, and don't care one way or the other.
Many newsletter publishers,faced with rising production costs, and viewing advertising as a means of offsetting those costs, welcome paid advertising. Generally the advertisers see the newsletter as a vehicle to captive audience, and well worth the costs.
The only problem with accepting advertising in your newsletter would appear to be that as your circulation grows, so will the number of advertisers, until you'll have to increase the size of your newsletter to accommodate the advertisers. At this point, the basic premise or philosophy of the newsletter often changes from news and practical information to one of an advertiser's showcase.
Promoting your newsletter, finding prospective buyers and converting these prospects into loyal subscribers, will be the most difficult task of your entire undertaking. It takes detailed planning, persistence and patience.
You'll need a sales letter. Check the sales letter you receive in the mail; analyze how these are written and pattern yours along the same lines. You'll find all of them---all those worthy of being called sales letters---following the same formula: Attention, Interest, Desire, and Action on the part of the reader---AIDA.
Jump right in at beginning and tell the reader how he's going to benefit from your newsletter, and keep emphasizing right on thru your "PS", the many and different benefits he'll gain from subscribing to your newsletter. Elaborate on your listing of benefits with examples of what you have, or you intend to include, in your newsletter.
Follow these examples with endorsements or testimonials from reviewers and satisfied subscribers. Make the recipient of your sales letter feel that you're offering him the answer to all his problems on the subject of your newsletter.
You have to make your prospect feel that "this is the insider's secret" to the success he wants. Present it to him as his own personal key to success, and then tell him how far behind his contemporaries he is going to be if he doesn't act upon your offer immediately.
Always include a "PS' in your sales letter. This should quickly restate to the reader that he can start enjoying the benefits of your newsletter by acting immediately, and very subtly suggesting that he may not get another chance to get the kind of "success help" you're offering him with this sales letter.
Don't worry about the length of your sales letter---most are four pages or more; however, it must flow logically and smoothly. Use short sentences, short paragraphs, indented paragraphs, and lots of sub-heads for the people who will be "scanning thru" your sales letter.
In addition to the sales letter, your promotion package should include a return reply order card or coupon. This can be either a self addresses business reply postcard, or a separate coupon, in which case you'll have to include a self-addressed return reply envelope. In every mailing piece you send out, always include one or the other; either a self-addressed business reply postcard or a self-addressed return reply envelope for the recipient to use to send your order form and his remittance back to you.
Your best response will come from a business reply postcard on which you allow your prospect to charge the subscription to his credit card, request that you bill him, or send his payment with the subscription start order.
For makeup of this subscription order card or coupon, simply start saving all the order cards and coupons you receive during the next month or so. Choose the one you like best, modify according to your needs, and have it typeset, pasted up and border fit.
Next, you'll need a Subscription Order Acknowledgment card or letter. This is simply a short note thanking your new subscriber for his order, and promising to keep him up to date with everything relating to the subject of your newsletter.
An acknowledgment letter, in an envelope, will cost more postage to mail than an simple postcard; however when you send the letter you have the opportunity to enclose additional material. A circular listing items available through you will produce additional orders.
Thus far, you've prepared the layout and copy for your newsletter. Go ahead and have a hundred copies printed, undated. You've written a sales letter and prepared a return reply subscription order card or coupon; go ahead and have a hundred of these printed, also undated, of course. You'll need letterhead mailing envelopes, and don't forget the return reply envelopes if you choose to use the coupons instead of the business reply postcard. Go ahead and have a thousand mailing envelopes printed. You also need subscription order acknowledgement cards or notes; have a hundred of these printed, and of course don't forget the imprinted reply envelopes if you're going along with the idea of using a note instead of a postcard. This will be a basic supply for "testing" your material so far.
Now you're ready for the big move... The Advertising Campaign.
Start by placing a small classified ad in one of your local newspaper. You should place your ad in an weekend or Sunday paper that will reach as many people as possible, and of course, do everything you can to keep your costs as low as possible. However, do not skimp on your advertising budget. To be successful--- to make as much money as is possible with your idea--- you'll have to reach as many people as you can afford, and as often as you can.
Over the years we have launched several hundred advertising campaigns. We always ran new ads for a minimum of three issues and kept close tabs on the returns. So long as the returns kept coming in, we continued running that ad in that publication, while adding a new publication to test for results. To our way of thinking, this is the best way to go, regardless of the product, to successfully multiply your customer list.
Move slowly. Start with a local, far-reaching and widely read paper, and with the profits or returns from that ad, go to the regional magazines, or one of the smaller national magazines, and continue plowing your returns into more advertising in different publications. By taking your time, and building your acceptance in this manner, you won't lose too much if one of your ads should prove to be a dud. Stay with the advertising. Do not abandon it in favor of direct mail. We would not recommend direct mail until you are well established, and your national classified advertising program is bringing in a healthy profit for you.
Do not become overly ambitious and go out on a limb with expensive full page advertising until you're very well established. When you do buy full page advertising, start with the smaller publications, and build from those results. Have patience keep close tabs on your costs per subscriber, and build from the profits of your advertising. Always test the advertising medium you want to use with a classified ad, and if it pulls well for you, go on to a larger display type ad.
Classified advertising is the least expensive way to go, so long as you use the "inquiry method". You can easily and quickly build your subscriber list with this type of advertisement.
We would not recommend any attempts to sell subscriptions, or any product from classified ads, or even from small display ads. There just isn't enough space to describe the product adequately, and seeing the cost of your item, many possible subscribers will not bother to inquire for the full story.
When you do expand your efforts into direct mail, go straight to a national list broker. You can find their names and addresses in the yellow pages section of your local telephone directory. Show the list broker your product and your mailing piece, and explain what type people you want to reach, and allow them to help you.
Once you've decided on a list to use, go slowly. Start with a sampling of 5,00 names. If the returns are favorable, go to 10,000 names, and then 15,000 and so on through the entire list.
Never rent the entire list based upon the returns from your first couple of samplings. The variables are just too many, and too complicated, and too conductive to your losing your shirt when you "roll out an entire list" based upon returns from a controlled sampling.
There are a number of other methods for finding new subscribers, which we'll explore for you here, detailing the good and the bad as we have researched them.
One method is that of contracting with what is known as a "cash field" agency. These are soliciting agencies who hire people to sell door-to-door and via the phone, almost always using a high pressure sales approach. The publishers usually makes only about 5% from each subscription sold by one of these agencies. That speaks for itself.
Then, there are several major catalog sales companies that sell subscriptions to school libraries, government agencies and large corporations. These people usually buy through these catalog sales companies rather than direct form the publisher. The publisher makes about 10% on each subscription sold for him by one of these agencies.
Co-Op Mailings are generally piggy-back mailings of your subscription offer along with numerous other business offers in the same envelope. Smaller mail order entrepreneurs do this under the name of Big Mail Offers. Coming into vogue now are the Postcard Mailers. You submit your offer on a business reply postcard; the packager then prints and mails your postcard in a package with 40 or 50 similar postcards via third class mail to a mailing list that could number 100,00 or more. You pay a premium price for this type of mailing---usually $1000 To $1500 per mailing, but the returns are very good and you keep all the incoming money.
Another form of co-op mailing is that where you supply a charge card company or department store with your subscription offer as a "statement mailing stuffer". Your offer goes out with the monthly statements; new subscriptions are returned to the mailer and billed to the customer's charge card. The publisher usually makes about 50% on each subscription. This is one of the most lucrative, but expensive methods of bringing in new customers.
Direct mail agencies such as Publishers Clearing House can be a very lucrative source of new subscriptions, in that they mail out more than 60 million pieces of mail each year, all of which are built around an opportunity for the recipient to win a gigantic cash sweepstakes. The only problem with this type of subscription agency is the very low percentage of the total subscription price the publisher receives from these subscriptions, plus the fact that the publishers are required to charge a lower subscription rate than they normally charge.
There are also several agencies that offer Introductory, Sample Copy and Trail Subscription offers, such as Select Information Exchange and Publishers Exchange. With this kind of agency, details about your publication are listed along with similar publications, in full page ads inviting the readers to send $10 or $20 for trail subscriptions to those of his choice. The publishers receive no money from these inquires list of names of people interested in receiving trail subscription. How the publisher follows up and is able to convert these into full term, and paying subscribers is entirely dependent upon his own efforts.
Most major newspapers will carry small, lightweight brochures or oversized reply cards as inserts in their Sunday papers. The publisher supplies the total number of inserts, pays the newspaper $20 per thousand for the number of newspapers he wants his order form carried in, and then retains all the money generated. But the high costs of printing the inserts, plus the $20 per thousand for distribution, make this an extremely costly method of obtaining new subscribers.
Schools, civic groups and other fun raising organizations work in about the same manner as the cash-field agencies. They supply the solicitor and the publisher gets 25% or less for each new subscription sold.
Attempting to sell subscriptions via radio or TV is very expensive and works - ter in generating sales at the news stands than new subscriptions. PI (Per Inquiry) sales is a very popular way of getting radio or TV exposure and advertising for your newsletter or other publication, but again, the number of sales brought in by the broadcast media is very small when compared with the number of times the "invitation commercial" has to be "aired" to elicit a response.
A new idea beginning to surface on the cable TV scene is "Product Shows". This is the kind of show where the originator of the product or his representative appears on TV and gives a complete sales presentation lasting from five minutes to fifteen minutes. Overall, these programs generally run - ween midnight and 2 AM, with the whole program a series of sales presentations for different products. They operate on the basis of the product owner paying a fee to appear and show his product, and also from an arrangement where the product owner pays a certain percentage from each sale generated from this exposure.
Newsletter publishers often run exchange publicity endorsements with non-competing publishers. Generally, these endorsements invite the reader of newsletter "A" to send for a sample copy of newsletter "B" for a look at what somebody else is doing that might be of especial help etc. This can be very good source of new subscriptions, and certainly the least expensive.
Last, but not least, is the enlistment of your own subscribers to send you names of people they think might be interested in receiving a sample copy of your publication. Some publishers ask their readers to pass along these names out of loyalty, while others offer a monetary incentive or a special bonus for names of people sent in who become subscribers.
By studying and understanding the information in this report, you should encounter fewer serious problems in launching your own successful specialized newsletter that will be the source of on going monetary rewards for you. However, there is an important point to remember about doing business by mail---particularly within the confines of selling information by mail---that is, Mail Order is ONLY another way of doing business. You have to learn all there is to know about this way of doing business, and then keep on learning, changing, observing and adapting to stay on top.
The best way of learning about and keeping up with this field of endeavor is by buying and reading books by the people who have succeeded in making money via the mails; by subscribing to several of the - ter periodic journals and - to people in mail order, and by joining some of the mail order trade associations for a free exchange od ideas, advice and help.
To learn more about how to publish newsletter and get valuable contents free, you can visit www.about-internet.com
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------------------------------------------------------
Julia Tang publishes Smart Online Business Tips, a fresh
and informative newsletter dedicated to supporting people
like you! To find out the best online business opportunities,
and to discover hundreds more proven and practical internet
marketing secrets, plus FREE internet marketing products
worth over $200, visit: www.about-internet.com
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----------------------------------------------------
Note: Feel free to publish it with the resource box and content unchanged
Five years ago, there were 1500 different newsletters in this country. Today there are well over 10,000 with new ones being started every day. It's also interesting to note that for every new one that's started, some disappear just as quickly as they are started...lack of operating capital and marketing know how being the principal causes of failure.
To be successful with newsletter, you have to specialize. Your best - will be with new information on a subject not already covered by an established newsletter.
Regardless of the frustrations involved in launching your own newsletter, never forget this truth; There are people from all walks of life, in all parts of this country, many of them with no writing ability what so ever, who are making incredible profits with simple two-four- and six page newsletters.
Your first step should be to subscribe to as many different newsletters and mail order publications as you can afford. Analyze and study how the others are doing it. Attend as many workshops and seminars on your subject as possible. Learn from the pros. Learn how the successful newsletter publishers are doing it, and why they are making money. Adapt their success methods to your own newsletter, but determine to recognize where they are weak, and make yours - ter in every way.
Plan your newsletter before launching it. Know the basic premise for its being, your editorial position, the layout, art work, type style, subscription price, distribution methods, and every other detail necessary to make it look, sound and feel like the end result you have envisioned.
Lay out your start up needs; detail the length of time it's going to take to become established, and what will be involved in becoming established. Set a date as a milestone of accomplishment for each phase of your development; A date for breaking even, a date attaining a certain paid subscription figure, and a monetary goal for each of your first five years in business. And all this must be done before publishing your first issue.
Most newsletter publishers do all the work themselves, and are impatient to get the first issue into print. As a result, they neglect to devote the proper amount of time to the market research and distribution. Don't start your newsletter without first having accomplished this task!
Market research is simply determining who the people are who will be interested in buying and reading your newsletter, and the kind of information these people want to see in your newsletter as a reason for continuing to buy it. You have to determine what it is they want form your newsletter.
Your market research must give you unbiased answers about your newsletter's capabilities of fulfilling your prospective buyer's need for information; how much he's willing to pay for it, and an overall profile of his status in life. The questions of why he needs your information, and how he'll use it should be answered. Make sure you have the answers to these questions, publish you newsletter as a vehicle of fulfilment to these needs, and you're on your way!
You're going to be in trouble unless your newsletter has a real point of difference that can easily be perceived by your prospective buyer. The design and graphics of your newsletter, plus what you say and how you say it, will help in giving your newsletter this vital difference.
Be sure your newsletter works with the personality you're trying to build for it. Make sure it reflects the wants of your subscribers. Include your advertising promise within the heading, on the title page, and in the same words your advertising uses. And above all else, don't skimp on design or graphics!
The name of your newsletter should also help to set it apart form similar newsletters, and spell out its advertising promise. A good name reinforces your advertising. Choose a name that defines the direction and scope of your newsletter.
Opportunity Knocking, Money Making Magic, Extra Income Tip Sheet, and Mail Order Up Date are prime examples of this type of philosophy...as opposed to the Johnson Report, The Association Newsletter, or Clubhouse Confidential.
Try to make your newsletter's name memorable...one that flows automatically. Don't pick a name that's so vague it could apply to almost anything. The name should identify your newsletter and its subject quickly and positively.
Pricing your newsletter should be consistent with the image you're trying to build. If you're starting a "Me-too" newsletter, never price it above the competition. In most instances, the consumer associates higher prices with quality, so if you give your readers - ter quality information in an expensive looking package, don't hesitate to ask for a premium price. However, if your information is gathered from most of the other newsletters on the subject, you will do well to keep your prices in line with theirs.
One of the best selling points of a newsletter is in the degree of audience involvement instance, how much it talks about, and uses the names of its readers.
People like to see things written about themselves. They resort to all kinds of things to get their names in print, and they pay big money to read what's been written about them. You should understand this fact of human nature, and decide if and how you want to capitalize upon it-- then plan your newsletter accordingly.
Almost as important as names in your newsletter are pictures. The readers will generally accept a newsletter faster if the publisher's picture is presented or included as part of the newsletter. Whether you use pictures of the people, events, locations or products you write about is a policy decision; but the use of pictures will set your publication apart from the others and give it an individual image, which is precisely what you want.
The decision as to whether to carry paid advertising, and if so, how much, is another policy decision that should be made while your newsletter is still in the planning stages. Some purists feel that advertising corrupts the image of the newsletter and may influence editorial policy. Most people accept advertising as a part of everyday life, and don't care one way or the other.
Many newsletter publishers,faced with rising production costs, and viewing advertising as a means of offsetting those costs, welcome paid advertising. Generally the advertisers see the newsletter as a vehicle to captive audience, and well worth the costs.
The only problem with accepting advertising in your newsletter would appear to be that as your circulation grows, so will the number of advertisers, until you'll have to increase the size of your newsletter to accommodate the advertisers. At this point, the basic premise or philosophy of the newsletter often changes from news and practical information to one of an advertiser's showcase.
Promoting your newsletter, finding prospective buyers and converting these prospects into loyal subscribers, will be the most difficult task of your entire undertaking. It takes detailed planning, persistence and patience.
You'll need a sales letter. Check the sales letter you receive in the mail; analyze how these are written and pattern yours along the same lines. You'll find all of them---all those worthy of being called sales letters---following the same formula: Attention, Interest, Desire, and Action on the part of the reader---AIDA.
Jump right in at beginning and tell the reader how he's going to benefit from your newsletter, and keep emphasizing right on thru your "PS", the many and different benefits he'll gain from subscribing to your newsletter. Elaborate on your listing of benefits with examples of what you have, or you intend to include, in your newsletter.
Follow these examples with endorsements or testimonials from reviewers and satisfied subscribers. Make the recipient of your sales letter feel that you're offering him the answer to all his problems on the subject of your newsletter.
You have to make your prospect feel that "this is the insider's secret" to the success he wants. Present it to him as his own personal key to success, and then tell him how far behind his contemporaries he is going to be if he doesn't act upon your offer immediately.
Always include a "PS' in your sales letter. This should quickly restate to the reader that he can start enjoying the benefits of your newsletter by acting immediately, and very subtly suggesting that he may not get another chance to get the kind of "success help" you're offering him with this sales letter.
Don't worry about the length of your sales letter---most are four pages or more; however, it must flow logically and smoothly. Use short sentences, short paragraphs, indented paragraphs, and lots of sub-heads for the people who will be "scanning thru" your sales letter.
In addition to the sales letter, your promotion package should include a return reply order card or coupon. This can be either a self addresses business reply postcard, or a separate coupon, in which case you'll have to include a self-addressed return reply envelope. In every mailing piece you send out, always include one or the other; either a self-addressed business reply postcard or a self-addressed return reply envelope for the recipient to use to send your order form and his remittance back to you.
Your best response will come from a business reply postcard on which you allow your prospect to charge the subscription to his credit card, request that you bill him, or send his payment with the subscription start order.
For makeup of this subscription order card or coupon, simply start saving all the order cards and coupons you receive during the next month or so. Choose the one you like best, modify according to your needs, and have it typeset, pasted up and border fit.
Next, you'll need a Subscription Order Acknowledgment card or letter. This is simply a short note thanking your new subscriber for his order, and promising to keep him up to date with everything relating to the subject of your newsletter.
An acknowledgment letter, in an envelope, will cost more postage to mail than an simple postcard; however when you send the letter you have the opportunity to enclose additional material. A circular listing items available through you will produce additional orders.
Thus far, you've prepared the layout and copy for your newsletter. Go ahead and have a hundred copies printed, undated. You've written a sales letter and prepared a return reply subscription order card or coupon; go ahead and have a hundred of these printed, also undated, of course. You'll need letterhead mailing envelopes, and don't forget the return reply envelopes if you choose to use the coupons instead of the business reply postcard. Go ahead and have a thousand mailing envelopes printed. You also need subscription order acknowledgement cards or notes; have a hundred of these printed, and of course don't forget the imprinted reply envelopes if you're going along with the idea of using a note instead of a postcard. This will be a basic supply for "testing" your material so far.
Now you're ready for the big move... The Advertising Campaign.
Start by placing a small classified ad in one of your local newspaper. You should place your ad in an weekend or Sunday paper that will reach as many people as possible, and of course, do everything you can to keep your costs as low as possible. However, do not skimp on your advertising budget. To be successful--- to make as much money as is possible with your idea--- you'll have to reach as many people as you can afford, and as often as you can.
Over the years we have launched several hundred advertising campaigns. We always ran new ads for a minimum of three issues and kept close tabs on the returns. So long as the returns kept coming in, we continued running that ad in that publication, while adding a new publication to test for results. To our way of thinking, this is the best way to go, regardless of the product, to successfully multiply your customer list.
Move slowly. Start with a local, far-reaching and widely read paper, and with the profits or returns from that ad, go to the regional magazines, or one of the smaller national magazines, and continue plowing your returns into more advertising in different publications. By taking your time, and building your acceptance in this manner, you won't lose too much if one of your ads should prove to be a dud. Stay with the advertising. Do not abandon it in favor of direct mail. We would not recommend direct mail until you are well established, and your national classified advertising program is bringing in a healthy profit for you.
Do not become overly ambitious and go out on a limb with expensive full page advertising until you're very well established. When you do buy full page advertising, start with the smaller publications, and build from those results. Have patience keep close tabs on your costs per subscriber, and build from the profits of your advertising. Always test the advertising medium you want to use with a classified ad, and if it pulls well for you, go on to a larger display type ad.
Classified advertising is the least expensive way to go, so long as you use the "inquiry method". You can easily and quickly build your subscriber list with this type of advertisement.
We would not recommend any attempts to sell subscriptions, or any product from classified ads, or even from small display ads. There just isn't enough space to describe the product adequately, and seeing the cost of your item, many possible subscribers will not bother to inquire for the full story.
When you do expand your efforts into direct mail, go straight to a national list broker. You can find their names and addresses in the yellow pages section of your local telephone directory. Show the list broker your product and your mailing piece, and explain what type people you want to reach, and allow them to help you.
Once you've decided on a list to use, go slowly. Start with a sampling of 5,00 names. If the returns are favorable, go to 10,000 names, and then 15,000 and so on through the entire list.
Never rent the entire list based upon the returns from your first couple of samplings. The variables are just too many, and too complicated, and too conductive to your losing your shirt when you "roll out an entire list" based upon returns from a controlled sampling.
There are a number of other methods for finding new subscribers, which we'll explore for you here, detailing the good and the bad as we have researched them.
One method is that of contracting with what is known as a "cash field" agency. These are soliciting agencies who hire people to sell door-to-door and via the phone, almost always using a high pressure sales approach. The publishers usually makes only about 5% from each subscription sold by one of these agencies. That speaks for itself.
Then, there are several major catalog sales companies that sell subscriptions to school libraries, government agencies and large corporations. These people usually buy through these catalog sales companies rather than direct form the publisher. The publisher makes about 10% on each subscription sold for him by one of these agencies.
Co-Op Mailings are generally piggy-back mailings of your subscription offer along with numerous other business offers in the same envelope. Smaller mail order entrepreneurs do this under the name of Big Mail Offers. Coming into vogue now are the Postcard Mailers. You submit your offer on a business reply postcard; the packager then prints and mails your postcard in a package with 40 or 50 similar postcards via third class mail to a mailing list that could number 100,00 or more. You pay a premium price for this type of mailing---usually $1000 To $1500 per mailing, but the returns are very good and you keep all the incoming money.
Another form of co-op mailing is that where you supply a charge card company or department store with your subscription offer as a "statement mailing stuffer". Your offer goes out with the monthly statements; new subscriptions are returned to the mailer and billed to the customer's charge card. The publisher usually makes about 50% on each subscription. This is one of the most lucrative, but expensive methods of bringing in new customers.
Direct mail agencies such as Publishers Clearing House can be a very lucrative source of new subscriptions, in that they mail out more than 60 million pieces of mail each year, all of which are built around an opportunity for the recipient to win a gigantic cash sweepstakes. The only problem with this type of subscription agency is the very low percentage of the total subscription price the publisher receives from these subscriptions, plus the fact that the publishers are required to charge a lower subscription rate than they normally charge.
There are also several agencies that offer Introductory, Sample Copy and Trail Subscription offers, such as Select Information Exchange and Publishers Exchange. With this kind of agency, details about your publication are listed along with similar publications, in full page ads inviting the readers to send $10 or $20 for trail subscriptions to those of his choice. The publishers receive no money from these inquires list of names of people interested in receiving trail subscription. How the publisher follows up and is able to convert these into full term, and paying subscribers is entirely dependent upon his own efforts.
Most major newspapers will carry small, lightweight brochures or oversized reply cards as inserts in their Sunday papers. The publisher supplies the total number of inserts, pays the newspaper $20 per thousand for the number of newspapers he wants his order form carried in, and then retains all the money generated. But the high costs of printing the inserts, plus the $20 per thousand for distribution, make this an extremely costly method of obtaining new subscribers.
Schools, civic groups and other fun raising organizations work in about the same manner as the cash-field agencies. They supply the solicitor and the publisher gets 25% or less for each new subscription sold.
Attempting to sell subscriptions via radio or TV is very expensive and works - ter in generating sales at the news stands than new subscriptions. PI (Per Inquiry) sales is a very popular way of getting radio or TV exposure and advertising for your newsletter or other publication, but again, the number of sales brought in by the broadcast media is very small when compared with the number of times the "invitation commercial" has to be "aired" to elicit a response.
A new idea beginning to surface on the cable TV scene is "Product Shows". This is the kind of show where the originator of the product or his representative appears on TV and gives a complete sales presentation lasting from five minutes to fifteen minutes. Overall, these programs generally run - ween midnight and 2 AM, with the whole program a series of sales presentations for different products. They operate on the basis of the product owner paying a fee to appear and show his product, and also from an arrangement where the product owner pays a certain percentage from each sale generated from this exposure.
Newsletter publishers often run exchange publicity endorsements with non-competing publishers. Generally, these endorsements invite the reader of newsletter "A" to send for a sample copy of newsletter "B" for a look at what somebody else is doing that might be of especial help etc. This can be very good source of new subscriptions, and certainly the least expensive.
Last, but not least, is the enlistment of your own subscribers to send you names of people they think might be interested in receiving a sample copy of your publication. Some publishers ask their readers to pass along these names out of loyalty, while others offer a monetary incentive or a special bonus for names of people sent in who become subscribers.
By studying and understanding the information in this report, you should encounter fewer serious problems in launching your own successful specialized newsletter that will be the source of on going monetary rewards for you. However, there is an important point to remember about doing business by mail---particularly within the confines of selling information by mail---that is, Mail Order is ONLY another way of doing business. You have to learn all there is to know about this way of doing business, and then keep on learning, changing, observing and adapting to stay on top.
The best way of learning about and keeping up with this field of endeavor is by buying and reading books by the people who have succeeded in making money via the mails; by subscribing to several of the - ter periodic journals and - to people in mail order, and by joining some of the mail order trade associations for a free exchange od ideas, advice and help.
To learn more about how to publish newsletter and get valuable contents free, you can visit www.about-internet.com
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Julia Tang publishes Smart Online Business Tips, a fresh
and informative newsletter dedicated to supporting people
like you! To find out the best online business opportunities,
and to discover hundreds more proven and practical internet
marketing secrets, plus FREE internet marketing products
worth over $200, visit: www.about-internet.com
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