Category Archives: Running Your Business

Steve’s Marketing Rule

Steve's Law of MarketingAs our business grew, we made a real effort to measure each marketing program to find out how much of a return it provided. We carefully monitored our online campaigns, and used incentives like coupons to test the effectiveness of print ads.

Because we measured the return on every dollar spent on marketing, we learned a simple rule that’s proven true virtually 100% of the time.

Steve’s Marketing Rule:

Never trust anyone who tries to sell you anything marketing related.

In other words, never trust someone who is making the slightest effort to sell you online ads; print advertising in magazines, newspaper or flyers; search engine optimization (SEO) services; TV or radio ads; customer email lists; or any other marketing-related service you can imagine. This also holds true as your company grows and providers that you have used successfully in the past approach you to sell add-on offerings.

Here’s Why

The truth is that the better the marketing-related service, the less it needs telephone salespeople, email Spam, and other kinds of outbound promotion.

Any advertising or marketing-related service that can show a positive return is quickly adopted by companies who are hungry for better sales, and a little positive word-of-mouth spreads rapidly among prospective clients. So if a marketing service or advertising media is any good they’ll almost never make any real effort to approach a small company like yours first.

Choose Your Marketing Programs Carefully

Our QuickBooks reports show that advertising and promotion are always a very big part of our expenses, and choosing the right marketing programs was critical to our success. I’ve found that the most reliable way to create productive new marketing campaigns is to:

  1. Figure out what media your prospective customers are most likely see; this could include online searches, targeted magazines or newspapers, YouTube videos, and so on.
  2. In each case, look for how other companies who appeal to your same target audience are using the media, and consider starting out by matching their style of ad.
  3. Measure the effectiveness of every campaign, and keep working to improve your results over time.

It can also be a big help to share your advertising experiences – good and bad – with people at non-competing online stores.

Steve’s Marketing Rule is really just a corollary of Steve’s First Rule of Money, discussed in the next article.

Next: Steve’s First Rule of Money

Steve’s First Rule of Money

Steve's First Rule of Money

Steve’s Marketing Rule, discussed in the previous story, is really just a corollary to a general rule that I’ve always found to be true.

While this general rule doesn’t have much to do with selling online, I think it’s worth sharing.

Steve’s First Rule of Money:

Never trust anyone who tries to sell you anything with a measurable monetary return.

Specifically, this rule says that you should be very skeptical of anyone who is making the slightest effort to sell you financial investments, insurance, marketing services, or anything else with a monetary return that someone could possibly measure or predict.

Proof

There are plenty of professionals who can analyze the expected return of just about any investment. And, smart marketers know how to measure the return of almost any ad campaign or marketing service.

You can be sure that if experts believe that an investment is likely to deliver even a slight advantage  (or, in the case of insurance, slightly lower costs than the competition) word will get out, people will rush to buy the offering, and there’s hardly a need to promote it.

Friends in Need

Of course, this also holds true of anyone who asks to borrow money. Individuals who pose an acceptable risk can find ways to secure a loan, whether from a bank or a pawn shop. If you value your relationship with that person, give them money instead of loaning it.

Next, we’ll talk about a costly marketing trap that I discovered the hard way.

Next: Amazon Is No Friend

Amazon Is No Friend

Amazon Is No FriendAs a consumer it’s hard to imagine a better online shopping experience than you get with Amazon. The company does an outstanding job selling and delivering products, while also promoting items that are shipped to you by other retailers.

I’ve always found transactions on Amazon to be fast and trouble-free, and I’ve been satisfied with their customer service for as long as I can remember.

However, because of their market power – and some behaviors that I feel are outright irresponsible – I think that you should approach Amazon with great suspicion when it comes to your online business.

Fierce Competitor

Let’s face it: many consumers would be happy to buy a slightly inferior or more expensive product from Amazon than a comparable product from your website. Amazon makes it so easy to buy and return items – and there’s so much trust in their store – that the risk is practically zero.

This is the natural and deserved advantage that Amazon gets from its good customer service. But it also means that you should think twice about starting an online store if Amazon sells even somewhat competitive items.

Our Mistake

Knowing that customers feel comfortable with items they find on Amazon, we signed up for their Seller Central program to display our ads whenever Amazon visitors searched for items like ours. People who clicked the ads were taken to our website, where they found detailed information and accurate shipping rates quoted in real-time by UPS and others.

Shocked, then Angry

Amazon Affiliate Ad
Soon after we started advertising on Amazon, websites offering fake discounts on our products appeared

Soon after joining the program we found ads appearing on websites all over the Internet, offering bogus discounts and nonexistent free shipping on our products. It turns out that the ads are published by Amazon affiliates, who Amazon pays a commission to bring buyers to its website regardless of the products sold.

So many affiliate websites offer bogus discounts on our products that people who search for our company name on Google often click the results that show enticing fake offers. We know because frustrated shoppers contact our customer service staff, demanding that we make good on the bogus ads.

Amazon Affiliate Paid Search Ad
Affiliates ran ads above the Google search results, showing our trademark alongside the bogus offers

Next, the affiliates began running large ads above Google’s search results, showing our company name and the bogus offers.

Feeling confident that Amazon would handle the issue fairly, we contacted the company to ask that they stop the affiliates’ ads that offer fake discounts on our products. Amazon’s reply was a real surprise.

It Gets Much Worse

Instead of putting a stop to fake offers published by its affiliates, the email reply from Amazon seems to blame our company with the odd pretext that our website, like many stores, offers our customers accurate shipping rates calculated in real time by UPS and others.

We concluded that Amazon makes a thin excuse for paying its affiliates to act irresponsibly. Not wanting to reward that behavior, we stopped our Amazon Seller Central ads.

And then things got really ugly.

The affiliate ads with bogus offers on our products continued after we stopped advertising with Amazon, of course. But now when you search for our product name and click the big ads with the fake offers, you’re taken to Amazon’s web page that displays our product images and names, with the misleading message that they are all “Currently unavailable” and a list of cheap alternatives you can buy from Amazon.

Lesson Learned

Early-on another business owner told us that fulfilling products through Amazon can be a big mistake, too, since Amazon has a reputation for using the data they collect to seek out and replace successful products with their own, aggressively undercutting the original sellers on price.

We could have saved a great deal of time, money and frustration if we’d only heeded those early warnings about doing business with Amazon.

Thank goodness our company’s products have positive word of mouth. It seems certain that Amazon harms our business, but more and more customers still find our products without being lured away by bogus ads.

Next: Focus On Customer Service

Focus on Customer Service

Focus on Customer ServiceFor your business to succeed, you’ll need to build your online reputation like it’s your most valued asset. Achieving positive word of mouth requires you to respect customers’ money and time, and allows for very few mistakes.

Dealing with a constant flow of questions, feedback and criticism isn’t for everyone. Among other things, giving good customer service should require you to:

  • Respond to each customer message right away, with courtesy and enough detail to solve the issue – regardless of whether the request seems courteous or well thought out. It can sometimes take reading or listening to a message several times to determine how best to answer.
  • Fulfill orders promptly, and provide plenty of communication about order status. The right shopping cart can help automate this process, sending personalized emails as orders are received and then shipped.
  • Always be on the lookout for valid feedback that could indicate you’re not providing the right information on your website or enough communication after the sale; start with the assumption that customers are the experts on how your business looks to the rest of the world.
  • As soon as you can, publish a toll-free telephone number for customer service. You can start by getting a low-cost service that forwards the number to your cell phone, and then eventually forward those calls to trained staff that you contract, say, at an outsourcing service.
  • Provide a sensible money-back warranty and fast, hassle-free refunds.

You’ll find that some emails requiring individual answers – for example, requests for exchanges or returns – are repeated many times. For these questions, save examples of your best replies to paste into new messages.

Above all, start with the understanding that your real job is to make customers happy. Never allow a service issue to stay unresolved long enough to result in bad word of mouth or a customer calling the payment card issuer.

Our next article about problem customers talks about a few special cases.

Next: Problem Customers

Email Is Dangerous

Email Is DangerousEven though our online store publishes a toll-free number on every page of our website, we still find that most people prefer to communicate by email before and after a sale.

Email definitely has advantages, but we’ve found that it can present so many potential problems that you need to use special care with your messages to avoid misunderstandings and bad word of mouth.

For all of your business and personal email, we recommend that you always start by following one primary rule.

First Rule of Email:

Never write anything in any email that you wouldn’t want the whole world to see.

Because email creates a permanent record that can be forwarded to anyone on the Internet, it’s important to write only clear, courteous messages that reflect positively on you and your company. People we don’t know have published excerpts of our emails online, so we’ve learned that every sentence we write, even if taken out of context, must sound positive and professional.

Here are some other guidelines for writing customer emails.

  • Say something positive to start. Even if it’s only to say thank you or we’re sorry, setting the right tone will encourage readers to give you the benefit of the doubt as they read your text.
  • Put action items very near the beginning. If you need, say, for a customer to provide more information, make your request within the first few lines to improve the odds that it will be read.
  • Be as brief as you possibly can, while taking care to fully answer all of the customer’s questions.
  • Say that your company will take responsibility for any problem without blaming suppliers or individuals, using the word “we” instead of “I” whenever possible to help your company look bigger than you are.
  • Don’t assume that a person is combative just because their email sounds harsh. The tone of email is difficult to control when writing, and even harder to interpret when reading. If an email sounds argumentative, consider responding with a helpful phone call. Regardless of how you follow up, be prompt and polite.

It’s perfectly OK to monitor your business inbox by forwarding messages to a personal web mail account (like Gmail or Yahoo!) but you should only reply using the company email account provided by your web host.

Email Scams

Be on the lookout for email scams, of course. Fraudsters constantly evolve their tactics, and as noted in our story about keeping your money safe, it’s essential to treat all email links and attachments with utmost suspicion, even if the message appears to be from someone you know.

As your business grows, you’re likely to encounter one especially annoying email scam that starts with an innocent sounding product inquiry. Often the message is poorly written, and the writer might use a web mail account with a common, domestic sounding name.

Once you reply to that first inquiry, you’re likely to get an urgent request for pricing on a large quantity of your product. You also might get the feeling that the writer is copying text from your website with no idea what your product does. These are clues that you could be dealing with a fraudster. A Google search for that email address might reveal that others have seen similar requests from that account. If so, stop the communication right away.

What’s Next?

As your online business grows you’ll need to balance the demands of your day job with your new business. We’ll talk more about this topic in the next article about moonlighting tips.

Next: Moonlighting Tips