Because of the recent poor economical climate through out the globe millions of people are thinking really hard about starting their own profitable online business. If you find your self to be one of those individuals, then this article may be of great interest to you.Many people want to start a online business but have no idea where to start, what it’s about, or what they will need to get their business up and running. Finding the right information and instruction is not always a easy task. I intend to at least point you in the right direction with the information in this article.First let me say that there is no reason for anyone to start out with the idea that there will be no hard work involved when starting your business online. I want you to accept the fact that there are no easy fixes, no get rich quick solutions, and no magic potions for your success. It’s just the opposite, you should prepare yourself to be willing to learn to make some changes as well as sacrifices in your life if you want to truly be successful online.Even though there are no strict online business building methods that are written in stone on how to start your online business you will do well to begin by first:• Finding, then making up your mind on exactly what it is you want to do! You will need to discover what it is that you are interested in doing, what your marketable strengths are. You will also want to take into account is this interest something that others will want to know about, is your interest marketable? Will it have value to others? You will be able to get some ideas about this by doing some internet research on your chosen interest to see if other people are showing an interest. I suggest that you start by using free online keyword search tools such as, Freewords.wordtracker.com, adwords.google.com/select/KeywordToolExternal, keyworddiscovery.com/search.html, wordstream.com/keywords these are just a few of the online resources that are available that you can use to help determine the popularity of your chosen online business idea or niche.If you can’t come up with any ideas for a product or service to base your online business on, don’t despair there is a excellent alternative. There is the great option for you to promote and sell other peoples products or services. This is called affiliate marketing, it is a very popular method of having your own business online with out having to develop the product, service or promotional tools related to selling your own products or service online. Many successful internet marketers started out this way, because it can generate a great income they continue to incorporate affiliate marketing into their own business.Because affiliate marketing is an extensive subject all on it’s own and deserves it own article, I will be directing this article more towards starting your business with your own product or service. Even though many of the methods are easily interchangeable.• Next you will want to make a physical map or index of the things that you need to accomplish. Get a pen and paper and write down simple tasks or goals that you will want to complete in reasonable time limits. For example you will want to have a great website for your business so write down the steps that you plan to take to get it up and operational. for instance:1. Write down what you may want your website to look like2. How many web pages will you want or need?3. What kind of information will you show on your website to show your visitors that you are proficient in your online business field or niche.4. Will you create your own website? Or will you spend a fee to have a professional do it for you?5. Get yourself a domain name.6. Find a web hosting service that fits your needs to put your business website.7. Set up your domain name.8. Upload your website to your web host. When you have your completed list, you should have a clear map as to how you will go about getting your website up and running. It would be a good idea to then put this information in your computer so that you will have a permanent record of this valuable information.• Now that your website is uploaded to your web host and running you will want to begin to find ways to get targeted traffic to that site so that your potential customers can view you great offers or what you have to say about your chosen niche.It is a good idea to first start by beginning to build a list of potential customers that will be interested in purchasing your chosen product or service. You can do this by finding a good reliable autoresponder service that will automate the filing and tracking of all the website visitors that choose to give their names and email addresses or opt in to a special offer you will set up for them at your website.A simple web form that has boxes where the visitor can leave his or her name and email address can be easily created by you at your autoresponder service website for use on your web site. This makes it easy for people who visit your site to help you automatically build your all important opt in or email list.Because website traffic to your site is crucial for your online business success, you will also want to get website traffic in other ways. You can get free traffic by means of putting your website on the major search engines such as Google, Yahoo, and MSN, just to mention a few.Remember the truth about getting the best traffic to your website will be a combination of methods, article submission, having a lot of incoming links to your website are a few.So don’ just rely on one way to accomplish this vital operation.• Once you have interested visitors regularly coming to your website, you will want to have interesting and valuable information there describing the benefits of your online businesses products or service. From your attention grabbing headline to the main content on your site you will want to be laying the grounds for your visitors to make a purchase of your product or service.It will be the benefits that your product or service provides that will make your customers life easier or solve a specific need that will sell your product. Make sure to elaborate on the benefits more so than the features of the product. Although the features of the product may have some importance the benefits outweigh them in the minds of the customer.Learning this very important art or science, what ever you choose to call it, is vital to starting your online business in a positive direction. There is all kinds of information online to help you master this task. keep in mind that practice makes perfect, so do try your hand at writing your own sales copy as much as possible to make it easier for you to recognize when you have done it correctly.• A outstanding method that all internet marketers who have built their own successful online business used to get that success have learned that by providing your opt in list with top quality free information on the subject of your chosen niche will build a great re pore, relationship, and loyalty from those of your customers that join in. It also shows them that you know what you are talking about, proving you to be a reliable source of helpful instruction and information. Believe me having the reputation as an expert in your niche goes a long way to building a profitable online business.• Make sure that your chosen product, niche, service, of your online business will fulfill a need, solves a problem or answers a question that your potential customer may have. Find out what it is that your visitor wants and then provide it to them.• You are now receiving visitors to your website that are anxious to buy your products or services, now you will need a way to get paid or collect the purchase price for them. How do you set up this part of your online business? you will be happy to find that this is just a simple task of finding the right payment gateway for your online business. Their are many online payment services that you can use to do your online billing and payment collections. Some of them are free of charge depending what level of service you want to use. Some will charge a small fee to be figured out by a percentage of the total cost of the product or service or the number of transactions that your business does in a certain time cycle. Some of the better known free online payment processing services are, (PayPal.com, 2checkout.com, Authorize.net, and Merchantexpress.com).Always use your autoresponder to send follow up email to make sure that your customer is satisfied after the sale. Show them that you take a interest in what they think of your product, service or business..• The last but not less important of building your own online business that I will say a little about today is you will want to have a great online customer service department. This is extremely important. Why? Because it is a fact that all businesses will have a customer that for any reason will need to get some kind of help from you. It could be the product was defective, it could be the wrong product delivered, it could be that they need more instruction on how to use your products correctly or to find out more about it. whatever the reason you will want to have a quick and efficient way of resolving any given problem.Just starting out you may want to handle all of your customer help request or tickets by your self with the help of a easy to install helpdesk software that keeps all inquiries in easy to manage format. As your internet business begins to grow this may prove to be a time consuming, overwhelming and tedious task, in that instance you may choose to outsource your customer support to online professionals that will take over that aspect of your online business for a fee. What ever you do make sure that you do handle your customer service or helpdesk in a courteous and mannerable way. You don’t want to loose a return customer because you dropped the ball in this area. How you handle your customer service will also determine if that customer will come back to your site to do business with you down the line.There is really no way for me to go into or list here everything or every aspect of how you will start a successful online business. I hope the information that I have listed will be of some help and at least point you to the right paths that you will need to walk down to succeed.Now it is up to you, choose your business, pick your profitable niche, get your website up and running and promote your online business with gusto. Keeping yourself motivated is the key to your success!
In this Part 3 article on Small Business Marketing, I am going to explore Marketing Research and Target Marketing. Both are very important in marketing your small business, and the quality of the market research process will define your targeted marketing. See my previous article for information on Marketing Methods and Strategies.MARKETING RESEARCHQuestions to Ask:- Is a combination of goods and services a better, more competitive offering for the market than just a product or service?
– What is your advantage? Price? Superior Product or Service? Timing? Barriers to entry?
– What should you emphasize? Quality, Selection, Location, Service, Your Expert Status or the History of the business?
– Can you effectively compete?
– Define your Competition. What’s their Edge?
– Who are your best customers? Why?
* What are their Demographics? Psychographics?
* Why do they buy?
* What media do they interact with?
* What is their spouse doing for a living?
* What is their purchasing outlook for the next year?
– What are the best aspects of your business in the customer’s view?
* What improvements do customers want?
* Do they want more free interaction like a Newsletter, E-book, Articles, Forums, etc? Customers, whether current or prospective, offer the very best marketing info. Prepare a questionnaire for them! Put surveys on your website. These are excellent ways to fully define your “best” customer, and what makes them decide to buy.
– Gives invaluable information on your competition and how you stack up. Marketing Research Bonanza is the Wide World Web!
– Use multiple Search Engines.
– Use Chat Rooms and Forums. They can search as Focus Groups and provide invaluable Marketing Research. Determine your Marketing Appeals or your customers’ hot buttons.At the conclusion of your initial Marketing Research, ask yourself:- What customer needs, wants and niches translate into “x” amount of profitability?
– What improvements are needed for your biz?
– How can your competitors hinder your growth?
– How can you lose current customers?
– What measures need to be taken to ensure your Products and Services don’t become obsolete?
– What changing Trends affect your business?
– Who do you need to advise you about running your business? Spark new ideas?Remember: The Quality and Source of your Marketing Information define the efficacy of your Research. You need High Quality and Reliable Information, and these two variables are the key to your future success.TARGETED MARKETINGTargeted Marketing doesn’t have to be expensive, rather, it is the focused and personalized nature of inexpensive Targeted Marketing which make it worth considering. Some examples include:- Email: Opt In
– Online Boards and Groups
– Free Offline & Online Ads
– Increase response rates with Toll Free Numbers
– 900 Numbers
– Inexpensive Regional Magazine Editions: great credibility builder!
– Newspapers offer low-cost targeted geographic zones and neighborhoods.
– TV Ads are much cheaper and targeted now.
– Home Shopping Networks can be highly targeted and great to advertise around.
– Cell phone text messaging: Opt In only!
– Video Brochure: the paper brochure is a harder sell now days. Bring your Business, Products and Services alive with Video and/or Audio.
– Look at targeted media like airplanes, airports, taxis, buses, checkout counters, restrooms, banks, etc.
– Marketing messages on a Telephone “Hold” Session.
– Use low cost special effects to appear to have a bigger look on TV advertising.Targeted Marketing MethodsCanvassing/Cold Calling: I am not a huge fan of Canvassing or Cold Calling but it can be effective/required in the early stages of your business, especially when money is tight. You can enhance your method by:- Putting out flyers/mailings prior to initiating contact
– Go to Networking Events (i.e. Chamber of Commerce or a Professional Network Group) as a Guest of a member for free and make it count.
– Be direct; look people in the eye; and most importantly, offer value. Never hesitate to respectfully ask for the sale.
– Free Demonstration, a Sample or leaving a Product behind for free use can be very effective, if your product is highly effective and can sell itself.
– Try to quickly qualify the prospect and always ask for a Referral regardless if a sale was made.
– Look for ways to reference another mutual relationship to warm up a cold prospect
– Make the prospective customer feel important
– Educate your prospects; empower them and they will buy from you
– Identify your unique benefits and advantages, giving the prospect a great reason to buy
– Do your homework prior to contact and tailor your presentation for a particular prospect
– Mention your current customers, show testimonials and talk about your past successes.
– Show pride in your product/service offering
– Know the prospect will buy from you and always try to close at different points in your presentation
– If the sale isn’t consummated, ask why. Use the answers to tailor your presentation, rework your product/service offering or alter your pricing/credit structure
– The presentation should be brief and engage the prospect along the way.If you follow the above pointers, Canvassing can be very effective and inexpensive. However, it demands a lot of time, discipline and consistency.Biz Cards: Use both sides of your card, and it should sell something, offer something and point to your website for a special offer. It is a Sales Tool – use it as such!Letters: Personalized letters are a thing of the past, but an art form which is worth using today. Why? Simple: no one else is and you will appear unique. The letter should solve a prospective customer’s problem or point to a website presentation that does. Use online or offline questionnaires to capture valuable information which you can use to sell the prospect – it sets up your sale. Some tips:- Follow up the first letter with a second letter and then a phone call. All this should be done in 10 day’s time. Follow up letters and calls should offer new information.
– Always ask for the sale! Often, the third time is the charm.
– Include personal references, people you know in common and testimonials in your letters.
– Combine a letter with a Questionnaire, which asks a prospect to provide an Opt In Email address. Send all further communications via email for cost effectiveness and immediate yet convenient to the prospect contact. Remember, an email can be a Newsletter, Audio or Video Recording, a Power Point Presentation – the sky is the limit!
– Remember: Confidence, Quality, Selection and Price. Address all four in your contact; a sale is eminent, provided the prospect is qualified.
– Letters are an easy, cost-effective way to stay in contact with customers whether you make a sale or not.
– Personalize it: Address to a particular person, hand sign it and write a personal P.S. by hand. You can even follow a sales letter with a hand written note in a second mailing before or after a follow up phone call. This can be very effective!
– Your letters should not ask the prospect to respond. Rather, it will tell the prospect when you will call to set up an appointment and/or answer questions leading to a sale. Either way, on the phone call, Always ask for the sale.
– Stick with just a short letter. No other enclosures. You have a better chance to be read. You can always email (save postage) a brochure once you have retained the interest.
– If the prospect cannot wait for your follow up phone call, have a website address with an exclusive offer that points to a well crafted Sales Web Page (see my Online Marketing Article for more details).
– Sign your name in Blue color, along with the P.S. The Reader will read the P.S. first so put some thought into it.
– State your offering’s benefits to the specific prospect without really saying what it is. This will drive the prospect to check out your Sales web page.
– Include a short Customer Testimonial with the Customer’s contact info. Let your current Customers do the selling for you!
– The numbers: Mass Mailings are deemed successful with a 1-2% Response Rate. If a personal letter is done right, a 10-20% sales rate (not Response Rate!) can be achieved!
* If you do Mass Mailings, a Personal Letter as stage 2 to your responses can be highly effective as well!
– On your Online Sales Page always give the prospect the opportunity to Opt In their email address so you can automatically send them Newsletters, Articles, Special Offers, Bonafides and the such.
– How to get a sale? Simple: Eliminate all risks of doing business with you and make sure the prospect understands the benefits and value of your offering. Pair that with passion and straight forward ethics and you will close again and again. You will have to ask for the sale at a minimum of three times on average; so ask!
– Partner up with other ethically sound business people to pair your offering and make a truly unique offering and/or tap the partner’s customer base. An experienced partner can add a lot of credibility to your offering.
– Ask for Referrals from the beginning, whether or not the prospect buys from you. If they don’t, make sure you offer them an Opt In so you can continue to stay in front of them with Specials, Newsletter, Company News and Events, Articles and the such.
– If targeting businesses, ALWAYS send you letter to the President and then follow up with a phone call after you sent a hand written note two days later. Two things will happen, you have his/her attention, and your initial call will be routed to the right decision maker in the company.
– Remember, letters are all about psychology so keep the emotional sale in mind when preparing the letter.Note: A lot of these methods and strategies described under “Letters” can be applied to many different marketing tools – use them!Telemarketing: I am not a huge fan of cold calls (and this coming from someone who built initial sales and companies on cold calling). Now, a professional telephone campaign linked to a mailing of some sort (letter, brochure, marketing piece) can be quite effective. In-bound telemarketing can be profitable if done properly. The bottom line: 51% listen to telemarketers when called, so it can be a worthwhile strategy. Here are some keys toward running a successful telemarketing campaign:- Research the prospect: know the important things about your prospect and how they relate to your business.
– Link your telemarketing with a personalized letter so your call is a follow up from an expected source, verses a pure cold call.
– I hate scripts. Your telemarketing should come naturally and lead to pre-planned destinations and decisions (i.e. more info, website link, a free analysis, newsletter or article, or a sale).
– Know your hot-button words, such as, “profitability, increase profits, lower costs and expenses, increase cash flow, money and time savings, competitive advantage and edge, market share” and so forth.
– Remember, an Objection is a faster way to a yes. Address an Objection adequately; you are one objection closer to the sale (typically 3 objection average per sale).
– Keep it simple: Contact, Warm Up, Present, Answer Questions/Address Objections and Close (try to close twice before your final close).
– Ask the prospect questions and clearly understand his or her issues/problems so you can provide a solution.
– When you close and ask for the sale, always state the benefits prior.
– A close doesn’t have to be a sale. It could be you ask for the sale and the prospect isn’t convinced. Do not destroy your sales opportunity by trying over and over for a final close. Rather, set up an Appointment and send follow up information and a Sales Webpage link. Stay in front of the prospect (I am assuming this is a well qualified prospect).
– Keep a Special Offer in your back pocket and only use it if you think the prospect is more motivated by price than your value added benefits.
– The hard numbers:
* 100 calls to close a sale
* 5 minutes average per call = @ 8 hours for a sale
* 5 sales = @ 40 hours of time
* The average call transaction when one business telemarkets to another is @ $550, which means telemarketing can be quite profitable
– You can certainly increase the before mentioned odds/percentages to the better by developing and implementing a warm-up campaign that involves a personal letter, other type of mailing, email, etc. Warming up the prospect really pays off for the follow on Telemarketing.Fliers/Circulars/Brochures: Fliers and Circulars are a short, concentrated, single message, specialty piece while a brochure is more detailed and longer. I am not a big fan of any of these business promotion mediums, unless they are used in a well thought out, targeted system. Here are some tips to draw clarity on what I mean:Fliers & Circulars:- If you need to distribute a large volume, in conjunction (as a follow on) with a Mass Mailing, use Circulars.
– Gets Instant action if implemented correctly.
– Clear Offer
– Straight to the Point
– Instruct Prospect what to do Next
– Clearly Ties in to a Previously Established Identity
– Content is very important, as well as, Process.
– Help a Prospect visualize your Content with a Picture
– Use Headlines & Bullet Points
* List the greatest benefits for the particular audience
– Test out your Brochure with a Circular/Flier for cost effective Test Marketing
– Use Action Words
– Learn Desktop publishing and produce your own materials at a fraction of the price. Get a Graphic Design Student intern to create your Artwork for a small fee.
– Color and Gloss are expensive. If you aren’t selling a luxury, premium product, consider colored ink and colored stock to bring your piece to life. However, if you self produce, I prefer Gloss and Colored Pictures – it is worth the added cost but mitigated when self produced.
– ROI: One Sale/one job should handily pay for your entire creation and distribution costs, otherwise, reconsider your campaign.Brochures: More expensive, more detailed, larger pieces which instill confidence and credibility. Moreover, it provides a more finesse, elaborate sales process. As a mailing, I prefer a Circular. For customer location placement, I like a Flier. Brochures are great for in-house advertising; give to existing clients with a referral section; perfect to use online in combination with Website Marketing. I like all my referral sources to have a replenishable stack of brochures that contain a referral section. Also if you don’t make a sale, send a few brochures and ask the prospect to give out for a referral fee (and to stay in front of the prospect).- The best use of brochures in my opinion is online and as a PDF product, as well as, a Video and/or Power Point product.
– Color is good. It increases your retention rate by over 50% and affects the buying attitude by 40%.
– A brochure that costs a $1 to produce can have 8 pages, so use them wisely. Tell a story, build credibility, make it personal and keep a professional, clean look.
– If you have products that change rapidly, consider using a pocket brochure for product update inserts. Great for price lists too!
– Customer testimonials are a must.
– Have the brochure point to specific web sales pages for more information.
– Call for Action in your brochure. Direct the prospect.
– A low cost way of producing a brochure is having a magazine, which you advertise in or publish in, produce the ads / story as a brochure for you.
– A great combination if money is a premium (it always is with a small business, isn’t it?) is to run small print ads in many publications which point to a FREE Brochure, which could be an Online Brochure. Give people a reason to request the FREE Brochure.
– You can personalize a Brochure Request by including a handwritten sticky note on it (this can be done digitally as well).
– Be sure to follow up with the Brochure Requester within five days.
– Brochures should only go to interested prospects. Circulars can be more mass market. Brochures should bring you a closing rate of about 30%.
– An Online Brochure can have links to Video, Power Point and Audio Presentations. These really increase your chances to make a sale.Classified Ads: These types of ads can be low cost, cover a specific region or even neighborhood or take you national and international. For a targeted audience, concentrate on Magazines. An important stat: 60% of Americans read a magazine entirely but from back to front. So, your ad has a good chance of being read.- Consider Classified Network for targeted, multimedia ads at a great price.
– Use a short Headline in all CAPS. Only use abbreviations people will understand.
– Personalize it
– Direct the reader to a Web Sales Page
– Consider putting your phone number
– Read the other ads in your advertising section and write an ad that contrasts
– A great way to sell a Book, offer a FREE E-book or Article
– Use Facts in the AD
– Create momentum and call the reader to Act
– Accentuate benefits
– Classified Ads are short and sweet but you need quality of message. Start with a bigger AD and cut it down to the lines you need for the small Ad. You need very tight copy. Study competitors Ads to spark ideas and angles.
– I am not a fan of online classifieds. I think they get lost on the websites which they are displayed. For this reason, I recommend Print. If you find a Classified Online Forum or Service or Directory you like, the downside is you have to resubmit the Ad daily to keep visibility.
– Offer something FREE!Gift Certificates: This can be an overlooked area for many businesses. Promote your Gift Certificates on the Home Page of your website. Do not have an expiration date. Specialize for Holidays. Put a link in your email address highlighting your certificate offerings. It is a great way to Brand your name.Signs: Signage can be quite expensive so pick a business location which requires minimum outdoor signage exposure. Indoor or Sidewalk Signage is much less expensive and can be quite effective. Be sure to keep your signs consistent with your logo, meme, advertising message and branding. Consistency in identity and image across the board in all the media types you are employing is paramount to converting a Prospect to a Customer.- Keep the sign short, concise and use persuasive, action words. Have a visible, identifiable logo.
– Sidewalk signs should be designed to stop the pedestrian, for that person to pause. Then a sign and/or merchandise in the window has a chance of pulling that prospect in to your business. Better yet, put your best priced merchandise outside your door. It can cause an impulse buy and/or create an invitation to visit your business.
– Promote Cross Selling OpportunitiesUse Brochures, Biz Cards, Gift Certificate and Coupon Displays with your signage. At the very least, a non-buying prospect can leave with something, if not a Gift Certificate. This creates great viral based, inexpensive advertising.- Remember, Ads can become a sign – just blow it up!
– Use point of purchase signs to get the instant gratification sale.
– Check out your competition and see what they successfully use.Free Bulletin Boards: Depends on your type of business. For instance, if you deliver pizza to a college, then Bulletin Boards can be your best advertising. Bulletin Boards are very time consuming as you need to check the board and refresh your offering at least twice per week. Hire a part time student to manage your Bulletin Boards so you can spend your time more wisely.- Everywhere has a Bulletin Board. Try to choose those that are well maintained (so you remain visible) and have the right prospect traffic.
– You can use your Circulars to post on the Bulletin Boards. Always have precut strips or peel offs for prospects to take your information with them.Yellow Pages: One question: Why? Print Yellow Pages are expensive, and in the Internet world, hold much less influence and utility. If you feel that you must advertise in the Yellow Pages, put tracking devices on the Ad so you can measure its effectiveness. Moreover, one Ad may not do it as people may search in more than one category to find you.- Is the answer online Yellow Pages? No! Consider Google Local with Google Maps verses using the online Yellow Pages.
– The largest Ad wins in Print Advertising. So, instead of paying the extra bucks for one large Ad on a page put two smaller ones to prevent being overshadowed by a large ad
– Color pays. Spend the extra bucks for it.
– Offer something for FREE
– Make your AD personal – address that person looking at your AdUse the Power of Desktop Publishing: Learn to use graphic design software and design your own logo, brochures, circulars, ads, business cards for a fraction of the cost. Take a class on the software you will be using so you can create professional looking materials. Then you can always hire a pro to clean up your designs. There is no need to spend thousands of dollars on your designs using a graphic designer – you can use a pro when you are successful and the cash flow is there.In my next blog post I will discuss the Power of Mass Media. Stay tuned!
The Pareto Principle applies to a variety of economic and business situations and states that roughly 80% of the outputs are directly attributable to only 20% of the inputs. This concept is also frequently referred to as the “80/20 Principle” or the “Law of the Vital Few.”The Pareto Principle is named for Italian economist, Vilfredo Federico Damaso Pareto who, in 1906, discovered that 80% of the land in Italy was owned by only 20% of the people. Later he recognized that same lop-sided relationship applied to other things as well (e.g., gardening).Note that the 80% and 20% are not absolute values; rather, it is simply the unequal distribution that is significant.1. Individual Considerations:The Pareto Principle reminds you to stay constantly focused on the 20% of the possible daily activities that really matter. Given the complexity of modern society, and especially the information overload introduced by the internet, it is very easy to become distracted and start spending time on things that (although they may be “urgent”) are not really important in determining your business success or your ROI.Simplify Your “To-Do List”
Of all the items on your “To-Do List,” only 20% really matter.
Eliminate those that are simply time wasters and need never be done.
Concentrate on Your Strengths, Not Your Weaknesses
20% of your time will generate 80% of your results.
Automate those things that can readily be automated.
Stay Focused on the 20%
Identifying the critical 20% helps you allocate your time efficiently.
If “fires” come up, and something has to slip, make sure it isn’t one of the critical 20%.
The “80/20 Individual” takes the Pareto Principle to heart and applies its findings to everyday life and everyday decisions. S/he concentrates on – and capitalizes on – individual strengths.2. Customer/Product/Service Implications:Consider the term “Product” to include both tangible (i.e., physical) products as well as services and evaluate how the following rule-of-thumb statistics might impact your business.Identify Key Customers & Best Performing Products
20% of customers account for 80% of profits.
20% of products account for 80% of sales.
Fix or Discontinue Product and Service Problems 80% of customer complaints cluster around the same 20% of products or services.Weed out “customers” that are really just window shopping and don’t dilute your time and resources on products and services that have a negative effect on your bottom line – draining time, energy, and money that could be better utilized elsewhere.3. Website Considerations:Distribution is about getting the products to the customer, and in an online world, much of that distribution happens via one or more of your websites.Identify Your Critical 20% Websites 20% of websites account for 80% of the hits.Determine Critical Traffic Patterns Roughly 80% of your visitors see only 20% of your website pages. (This stat holds true for both B2B and B2C, but may not hold true for pure content sites.)Check Your Web Traffic Logs You’ll find that a small number of keywords, search engines & websites give you the lion’s share of your traffic. The Pareto Principle can provide guidance as you apply SEO to your pages and optimize traffic patterns.4. Management Implications:Small companies, such as the bulk of internet businesses, drive the nation’s economy. Your small business will benefit if you understand how Pareto’s Principle affects your results.Evaluate Your Sales Force (Including Affiliates)
20% of a sales force produces 80% of the annual results.
The best 20% of any group is typically at least 16 times as valuable as the remaining 80 percent.
Just as major corporations need to manage their employees, you’ll need to identify key performers, nurture them, and encourage them if you want your business to be profitable.5. Advertising/Marketing Considerations:Use Pareto’s Principle to help you make good decisions about your marketing and advertising campaigns.Identify Your Best-Performing Ads and Marketing Campaigns
20% of your advertising will produce 80% of your campaign’s results.
20% of a marketing campaign will generate 80% of the responses, etc.
Identify your winning ads, and the placements that produce the best results, then test – test – test, constantly refining them to make them even better.If you’re running a small, online business, you’ve probably already discovered that there are many things demanding your attention at any given moment. One of the greatest challenges you’ll face each and every day is deciding how to invest your limited resources.Consistent application of Pareto’s Principle will help you increase your business’ productivity and overall efficiency, thus maximizing your profits.