Did you know AC/DC uses essentially the same four chords in ALL their songs? And that this four-chord formula has earned them over $200,000,000.00? In this intriguing interview with the Fabulous Dr. Jacobson, we’ll talk about focusing in and finding your own four-chord formula. Click play now… if for no other reason than there’s nothing better to do in August than to spend a half hour listening to two old doctors chatting about marketing.
G 🙂
Bob Serling may have been the very first direct response marketer to whom I was ever exposed. I think it was in the year 2,000… or maybe even in the 90s I bought one of his early set of tapes on copywriting.
So I was totally honored to get an email from him (through Perry Marshall) wanting to debate me about something I put in my auto-responder sequence several years back! What ensued was a very intriguing 40 minute conversation in which we actually did NOT need a referee 🙂
(Even though we had somewhat dissimilar points of view going into it)
I hope you enjoy it, I know I did!
There are a just a few insights into the nature of REAL businesses vs. BULL CRAP internet business ideas I’d like to share with you today…
1. REAL BUSINESSES SELL LOTS OF PRODUCTS (AND SERVICES) AND RUN VOLUME ON UNDER-OPTIMIZED FRONT ENDS. (Bull-crap internet businesses, on the other hand, spend all their resources waiting to perfectly optimize their front end. This is based on the very faulty belief that a well optimized front end will make the whole business profitable in the long turn.)
This one’s a little tough to grasp, because intuitively we all know optimization is a good thing. I mean, I’ve spent the last several years studying and teaching RESEARCH AND CONVERSION, all in the name of optimization, and I’ve been trying to hammer home the notion there’s no such thing as a traffic problem, only a conversion problem.
It’s all true.
But what’s equally true is, it can take a LOT of time, money, and labor to optimize your front end…
And once you’ve got a customer who trusts you, that customer is likely to be interested in buying LOTS of products and services from you…IF you’ve got them available to purchase! (One of the most common complaints from MY customers, for example, is “I wish you had more for me to buy, Glenn.”)
Once a REAL business has a semi-manageable front end, they turn their focus to creating a multitude of back end products. A WHOLE CATALOG of things to sell. They say “good enough is good enough” (to quote someone we all know) and just run with the damn front end conversions…
SHOULD they keep optimizing the front end? Sure….
But it’s often easier, faster, and more economical to add visitor value by pumping out back end products and services…
And the overall profits in the business get maximized not so much by the efficiency of front end acquisition, but by the VOLUME of customers acquired who then go on to buy lots of back ends.
Short story? Once you’ve got the ability to build a list of buyers, build baby, build! (And add LOTS of products and services). You can fix the front end ROI later.
Another way to look at this is, what if you had to make a business work with crappy front end conversions? It’s a good exercise to model out in a spreadsheet for your business because several of the 8 figure businesses I’ve run into recently are built on really crappy front end conversion numbers! (Seriously… even some really famous ones you’d recognize in a heartbeat if confidentiality didn’t prevent me from revealing them are running 0.5% front-end conversion or worse)
2. REAL BUSINESSES HAVE LONGER TIME HORIZONS. (Bull-crap internet marketing businesses, on the other hand, start out with the question “how can I make money quickly without a lot of work”)
It’s become fashionable to make fun of the “Wall Street” business model. You know the one I mean… let’s go raise $50,000,000 and burn through it at a million a month while we talk about lots of ideas and make lots of spreadsheets. We’ll get profitable in 3 to 5 years…
So in many ways it’s only natural for the pendulum to have swung the other way…
We internet marketers HAD to say “that’s silly and wasteful, you should hold yourself to profitable results MUCH sooner, perhaps immediately”…
But you know what? Thinking you’ve got to be profitable immediately is probably the best way to fail!
In my experience the sweet spot is in-between. REAL businesses make a realistic plan for achieving profitability in 12 to 18 months. Sometimes it takes them longer to achieve that profitability but it’s clearly worthwhile to keep going because the path is so well laid out and progress in that direction is obvious.
Real businesses also figure out how to FUND this time horizon so that the members of the business are financially calm and focused on achieving it.
Food for thought, right?
3. REAL BUSINESS PEOPLE WORK LIKE *$#*&%!! MANIACS (AND THEY LOVE IT!). Bull crap internet-marketing people work as little as they can get away with, and only do so in order to be able to not work later on.
My apologies… it’s pretty rare for me to curse, but I wanted to underscore the point!
If you’re in the right business, you’ll know it because you won’t want to stop working…
Instead of looking at your workload and saying “I have to do this work today”, you look at it with a kind of perverse excitement and say “Oh good, I get to work on this today”…
Not every moment of every day…
But there’s a general feeling of passion, interest, and excitement for the business…
The essence of your being gets poured into it. You burn the ships at the shore and fully commit to conquering the territory…
You feel in your heart it’s not a matter of IF the business succeeds but WHEN it will…
And because of this you’d rather be working on the business than almost anything else…
In your “free” time your head is constantly running with thoughts, images, and feelings about the business…
You feel thrilled with the littlest successes, and heartbroken with the smallest defeats…
Much the way a mother might about their child. (The best description of having a child I’ve ever heard was “It’s like having your heart outside of you”)
What does this all mean for YOU?
1. Do the math. Set up a spreadsheet with at least a half dozen products and services in the mix, and see if you can make it work with a low front end conversion.
2. Once you’ve achieved escape velocity and you have a catalog of products, buy as many customers as you can as fast as you can (provided your business systems can withstand the load.) The cost of advertising almost always rises over time, so get them in your funnel while it’s most profitable to do so.
3. Keep developing your conversion and optimization skills, but recognize these are NOT the only skills required to build a real business, and that because optimization is a resource-intensive activity, keep thinking about whether optimizing a particular front end (especially) is the “highest and best use” of your available time, capital, and labor.
4. If you can’t see your way to becoming passionate about your business so you’ll actually WANT to work like a “*&$#*!! maniac”, think about how the business would have to be transformed to make this possible, or how to safely transition to something where that motivation would exist. Because SOMEONE’s going to have to provide that driving force or else, in my experience, escape velocity eludes you.
Onwards!
Dr. G 🙂
PS – In a mood today I guess!
PPS – I’ll be opening my business coaching practice for perhaps the LAST time on January 1st, 2016…for one day only. (It’s been closed to NEW clients for almost three full years.) If you’ve got any interest in working with me personally, now’s the time to sign on. Read the letter and get on the priority notifications list please.
So, I’m pretty well known for the formula for choosing profitable worldwide niche markets…
But what if you want to choose a profitable LOCAL niche?
Ryan Levesque to the rescue. Listen, learn, and enjoy 🙂
PS – At the end of the year last I exhaustively combed the detailed notes from my live webinars club to find the TEN BEST CONVERSION SECRETS most people were omitting from their websites. Through Friday this week you can pick this up as a separate product here. (As a bonus, I asked Perry Marshall to do an hour long interview with me about the 3 most important things he’s learned in his entire marketing career… I was shocked at how much I personally learned from this! Exclusively available in this product… coming down on Friday night)
Been cataloging and organizing the last 5 years of MP3 interviews, PDF Cheat Sheets, and Conversion Videos…
Thought I might as well give you the benefits of that too 🙂
Right click the image above and you’ll get a PDF full of links to my BEST Cheat Sheets, Interviews, and Conversion Videos…
It’s all my best stuff, all in one place!
(Don’t say I never gave you anything)
Now go turn some visitors into buyers, would you?
Dr. G 🙂
PS – If you haven’t already joined the LIVE CONVERSION WEBINARS club, you should do so now. If for no other reason than (a) the “best conversion secrets of 2012” video is about to scroll out of the archived club recordings and become a $67 product in it’s own right; (b) the “Persuasion Architecture” bonus audio contains the crowning jewel of all my work for the past 8 years and (c) today you can still download both of these for less than five dollars
PPS – If you’ve been through the hyper-responsive club but never got around to implementing the work (or not quite as thoroughly as you wanted to)–OR–if you’re servicing clients and think whitelabeling Glenn’s hyper-responsive bulls eye research behind you might make you look stronger to your client… get your tuchas over to BullsEyeMaster.com
PPPS – If you’re spending more than $20K/month in paid advertising and would like my team to start optimizing your landing pages and conversion funnel FOR you, well, you may be in luck!
PPPPS – If you’ve got a system that converts really well online but you’ve got NO telephone follow up in place, you really ought to consider letting this funny looking phone genius do it for you on commission.
A ZILLION Ps S: Would much appreciate you SHARING this page, posting it in your forums, passing around the PDF by email to ALL your contacts, and telling your mama’s how cool it is to have Dr. Glenn’s stuff. (Not particularly modest, but hey, I’m too old for that)
Ever feel like it’s next to impossible to get the simplest of your entrepreneurial projects out the door? Wonder why projects which SEEM like they should take a week wind up taking six, and projects which seem like they should take six weeks can take you half a year or more?
Better yet, what if I told you there really was a POWERFUL SOLUTION for your evil procrastination demons?
There is, but it’s NOT what you think…
Listen to this short interview for a few key insights that’ll last you a lifetime (I promise).
OR… you could always come back later, right?
G 🙂
Is it possible you’re literally sitting on a fortune without knowing it?
In the past few months I put out a very weird offer to help market people’s businesses using my own money.
Turned out I couldn’t quite find one which matched my criteria, but I learned something fascinating in the process…
Something which highlighted a major opportunity for virtually all marketers in a very concrete way…
And gave me an even greater “gut level” feeling for the natural ceiling of most advertising auctions (including but not limited to AdWords)
Here’s the deal…
There are MANY, many people floating around out there who could double, triple, or even 10x their businesses if they only had two things: CONFIDENCE AND CASH FLOW!
You see, when I dug into the finances of many marketers’ systems I found myself scratching my head at their very conservative bidding position…
For example, many of them were making back 6 to 10 times their investment in advertising over the course of a year.
So why then, weren’t they opening the flood gates?
I mean, sure, acquiring a higher volume of traffic usually means bidding more and increasing your cost per sale…
But 10,000 sales x $10 profit leaves a LOT more money in your bank account than 1,000 sales at $20 profit ($100,000 vs. $20,000)
See what I mean?
When I asked these marketers why they weren’t just “letting loose” and buying up the traffic they stumbled and couldn’t quite answer me…
Until I eventually learned the reasons:
1) LACK OF CONFIDENCE IN LONGER TERM CUSTOMER VALUE: They only had a rough sense of customer value over the course of the year. They hadn’t bothered to set up the tracking and reporting systems to map it out with statistical reliability. Simply put, they only THOUGHT the customers were worth what they were telling me, but they hadn’t seen the evidence in black and white, staring them in the face.
2) LACK OF CASH FLOW: Even amongst those who really WERE confident in their numbers, there were few who were willing to open up the flood gates and go into the red for a few months in order to acquire the customers. When I asked why they said something like “because I’d be bankrupt before I made the profits back”. In other words, they simply didn’t have the cash flow to fund the roll-out, even though they knew it would come back to them in spades.
And then it hit me…
These two forces are omnipresent…
And they’re creating a kind of hard ceiling on the bidding price for any advertising auction…
Because they lack confidence and cash flow, the vast majority of advertisers are simply unwilling to bid more than they can make back before their credit card statement comes due.
And this creates a MAJOR opportunity…
Not just a market gap, but a GREAT BIG GAPING HOLE in most markets…
IF you’re willing to do the research, track your systems, and develop confidence in your LONGER TERM customer value…
And IF you’re able to develop the spreadsheets that predict with reasonable precision exactly how much money you’ll need to ride out the early period when you MUST GO NEGATIVE to buy customers in volume…
And you raise the cash (and the nerve) to carry this out…
Then 99% of your competitors will sit and watch, trembling to their cores while you proceed to dominate the market.
How could it be otherwise?
Now here’s the main point…
At SOME point in all of our marketing futures, if you’re going to achieve hyper-success, every marketer MUST face this wall of fear with courage…
At some point if you want to dominate your market, you’ll HAVE TO develop the confidence and the cash flow to brazenly go negative for several months while everyone around you looks on with amazement…
Confucius once said “Faced with what is right, to leave it undone shows a lack of courage”.. and I couldn’t agree more.
Of course, there’s also a fine line between bravery and foolishness…
I think that line is drawn on a spreadsheet with statistically reliable customer data, and in a bank account with money you can afford to lose…
But it’s a line we all owe it to ourselves to paint brightly, lest we wind up cowering in a corner while the fortune deserved us passes by.
What do you all think?
Let me know,
Dr. G 🙂
PS – In month #8 of the hyper-responsive club I provide a very detailed spreadsheet for developing confidence in the cash flow of your whole advertising system over time.
This is my second post in a series on “How to Profit from Your Own Bad Advertising”…
And today I’ve got a short (18 minute) mp3 interview with none other than THE Ryan Levesque illustrating several very specific examples…
Along with a free spreadsheet to help you implement this in your own market! (IMPORTANT: Listen to the interview first or the spreadsheet won’t make any sense)
Last thing…
You might have noticed the new club where you can interact with me LIVE 2x/mo. (There are also video recordings of course)
It’s selling quickly, and I’m going to raise the price next week, so you definitely should lock in your rate now (it’s only $5 for the first month!)
Honestly, this is the best deal you’re EVER going to get from me…
I’m doing it so I can bond more with my audience in a group environment without costing you a fortune. (People keep asking for a forum, but honestly I hate those… people get so yucky-ass-stupid on them, and there’s just SO much nonsense to deal with!)
Anyway, if you’ve been around GlennWorld for a while, you know that I introduce my products and services at a low price in order to prove the concept, gather market intelligence about the buyers quickly, and then I steadily raise the price. (You might wanna copy this philosophy by the way… because it frickin works)
You also get two crushing bonuses immediately when you join (1) Maximum Sales Bumps in Minimum Time – a collection of the BEST sales bumping techniques which I’ve identified as working across markets and (2) Building Your Persuasion Architecture(tm) – How to Focus on a Two Minute Verbal Sales Pitch Before You Publish a Single Page.
Anyway, why anyone would read this deep into a blog post of mine without spending $5 for live interaction AND those two bonuses is beyond me 🙂 But hey, you know, with the recession and all, you could almost buy a whole gallon of gas for that money! (Not in Europe of course)
But seriously, if this isn’t worth $5, I don’t know what is.
All my best,
Glenn 🙂
Glenn Livingston, Ph.D.
Q: When is crappy advertising the MOST profitable route you can take?
A: When it’s working–AND–you have bigger fish to fry!
Today’s insight is for the more sophisticated marketer…
(At least I like to think it is because I didn’t realize this until I had already burned through a LOT of cash, and the alternative is that I’m just an idiot!)
You see, when I first started building my own advertising systems, I really thought it was possible to have a perfectly optimized system.
I figured I knew how to split test, and I understood what consumers responded to in advertising…
So all I needed to do was aggressively split test every last part of my system until it was a perfectly tuned machine, making more money than anyone else’s machine on the market, and thereby becoming an unlimited traffic magnet. (Because due to the “Unlimited Traffic Theorem”, if I’m making $3 per visitor and you’re only making $1 per visitor, I can pay you $1.50 per visitor and eliminate your reason for competing… you should just start sending all your traffic to me!)
Here’s what I didn’t take into account…
RESOURCES AND OPPORTUNITIES IN THE REAL WORLD OF BUSINESS!
I really started understanding this when I started Rocket Clicks with Jeff Hughes about 4 years ago. (As a side note, time goes SO fast and I’m SO fricking old! I wish I could remember which comedian said this first but when I look at my receding hairline I think “that’s not a forehead, that’s a fivehead!)…
Anyway, way back in 2008 I was talking to all these entrepreneurs, constantly astounded at how much money they were making with relatively crappy advertising, seriously under-optimized AdWords accounts, and landing pages which had conversion leaks in them the size of Kentucky!
When I interviewed these people about their business, I was kind of shocked to find out that it wasn’t that they didn’t KNOW there was a problem…
They all kind of “hung their heads in shame” (metaphorically over our GoToMeeting conferences), dropped their voices and said “I know, I feel so guilty but I’ve been so busy with other things I just can’t get to it!”
But the more people I interviewed, the more I started to realize these people weren’t stupid by a long shot…
In fact, they were making BETTER prioritization decisions in their business than I was. Because the kinds of things they were attending to were making them a whole lot more money than doubling their conversion on the front end would… at least at the moment.
How could that possibly be? Let me give you a few examples:
Consider someone selling a supplement for prostate health with a just barely profitable front end. Maybe they’re spending $2 per click and making back $2.10, all things considered. Now, suppose they’re a one man shop, and so far they’re able to sell 10,000 customers per month. Might sound like a lot, but because of the margins it’s just $1000 profit. Certainly not enough to hire a PPC agency or conversion expert. And worse yet, he’s at the mercy of ONE supplier with limited capacity. So even if he COULD ramp up his sales, the supplier can’t keep up! And he’s got customer service problems (e.g. he can’t afford to hire a team but he can’t afford not to!) so refunds are climbing. What do to?
With seriously limited time and resources, this person’s got several options for where to put his time and resources. He could:
Now, it’s not that there’s no money in the optimization…
And it should be done EVENTUALLY…
But the hard reality is that the other problems really take precedence given his capital resources and available time. Because what good will the extra 20% to 30% be if his supplier drops out of the game, can’t keep up with capacity, or if he loses his merchant account due to too many chargebacks (from lousy customer service?)
This is why all businesses develop a long list of “guilty projects” which they KNOW would make them more money if they could only find the time and resources to do it.
And sure, you can make joint venture arrangements to solve a lot of these problems, but you can’t choose these partners randomly… finding JVs itself takes time and effort. (You’ve also gotta vet the prospective partners or you could be making more trouble than it’s worth… trust me, I learned the hard way!)
JUST BECAUSE YOU CAN FIX SOMETHING DOESN’T MEAN YOU SHOULD.
The reality of business is that it’s a constant game of priorities.
“What is the highest and best use of your time and resources this week?”
As much as I hate to say it, sometimes optimizing this or that part of your advertising system just isn’t the answer.
And even when it is, it’s rare that you have the time and resources to optimize the WHOLE THING. Rather, you usually need to pick the point of greatest leverage where you’ve got the greatest potential for increasing your profit volume…
Like your highest end product…
Or often it IS the front end, because that increases the value of the whole system. (Hint: most people totally ignore their email follow up system when it comes to optimization… but you can often quadruple your site traffic with a well optimized long follow up system without spending another penny on traffic!)
But there’s a bright side…
Because when you KNOW and UNDERSTAND this essential business reality…
You also know that everyone else is going through it too…
And that the best we can ever do is (as Stephen Covey taught me) is to “organize and execute around priorities”
So throw away the “guilt” from that “guilty project list” you’ve got building in Outlook…
And just put your head down and ask yourself “What’s Next?”
Dr. G 🙂
PS – we’ve got some new options and services I’d like you to check out:
Yesterday we started talking about the kinds of “traffic demons” people become vulnerable when they don’t understand the essence of converting visitors into customers. Because when you just don’t know what makes a site sell, you’re extremely susceptible to thinking all you need is more traffic (or cheaper traffic). And this is how evil creatures like seo scorpions, ppc piranhas, and social media snakes are able to make a good living.
Unfortunately there are many more internet demons you’ll face if you don’t know the 5 simple underlying principles of conversion. So today, let’s face off against…
Villian: Analysis Paralysis Man
Evil Motto: “I’ve never met a problem more data couldn’t solve. (Give me some money and I’ll be happy to waste weeks generating countless charts, graphs, and tables which will lead to an ever expanding list of questions, which of course will require more data to solve, etc.)”
Solution: Listen, I (Glenn) love data more than the next guy. In fact, I spent a semester supervising graduate students at Yeshiva University on the “multivariate analysis of human behavior” via computer models. But when it comes to internet sales you’ve REALLY got to be careful. Because the ability to scientifically measure internet activity can create a dangerous vortex which sucks you into a paralyzing maze of meaningless numbers.
What you want are BIG SIMPLE TESTS with PRACTICAL IMPLICATIONS. Tests that focus on the fundamental elements of conversion. What are they? (1) The way you describe the problem you solve; (2) the unique selling proposition you make; (3) the amount of proof you provide (and the way you present it); (4) the specific offer you make, and; (5) the type of scarcity or reason to act now you’re using.
Screw the fancy analytics, heat maps, live-chats, uber-complex multivariate analyses, etc. UNLESS they’re designed to support a big simple test with a very clear and meaningful hypothesis. At least until until you’ve exhausted conversion bumps from testing the fundamental elements.
Read that again (I just saved you a good year of wasted time and/or money to pay for data gathering and analysis experts!)
Listen, you can clear away SO much confusion–and easily defeat a myriad of evil internet villains–if you just master a few simple principles. And now you can watch me do it LIVE on site after site. (Get started as of the time of this post for less than $5)
Onwards and Upwards My Fine Marketing Friends!
NEW: Live Conversion Webinars 2x/mo with Glenn.
Watch me fix conversion holes in site after site.
Get started as of the time of this post for only $5
PPC Piranha(tm), SEO Scorpion(tm), Social Media Snake(tm)
and Analysis Paralysis Man(tm) are trademarks of Psy Tech Inc.
PPS – New “Done For You” Marketing Opportunities from Glenn…
(1) Let Us Get You More Compelling Proof
(2) The Weirdest Opportunity in the World (listen to the audio)