Twelve Very Common Pitfalls
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Below are some of the Common Pitfalls which business owners confront.
They can all have an impact on your business, whether it is sapping your savings or earnings, your time, your energy, your credibility, or your motivation.
There are examples provided in many ... examples which highlight in some cases that even so called astute operators can fall prey to these Common Pitfalls.
There are also opportunities highlighted - because for every problem, there is always a solution!
Go over these time and time again so you can learn from mistakes made by many others so hopefully you don't fall for the same traps.
Do NOT Proceed Without A Budget
With few exceptions (e.g. marketing other people’s products to your list as an Affiliate), nearly all forms of marketing require you to spend some money.
It may be only $100.00 – but you should have that in place well and truly before putting any time and effort into anything.
I’ve known marketers who were so confident that their program would work, have managed to gain terms from their suppliers and then found that returns were so terrible that they were down significantly … and unable to pay their bills.
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Now getting credit (terms) is wonderful, but if you can’t pay your suppliers promptly afterwards, then your reputation becomes mud and may take you considerable time to turn around people’s perceptions.
There are obvious benefits in using Other People’s Money (credit / terms) to support your cash flow … but you still need to make sure you’ve got all covered under a worst case scenario.
I’ve worked for service companies with customers who could not pay their bills and also one UK publicly listed company who I found out afterwards were unable to do so.
The difficulties and constraints these groups confront are enormous and any chance of turning things around and shooting for the stars thereafter is generally nigh impossible. (There are exceptions ... but not many!)
Do NOT Ignore Scalability
Scalability is very important when producing your product / service … and particularly if you want to explode your profits.
You need scale at multiple levels….
- Market-size - the market must be sufficiently large to warrant targeting.
Many product developers overlook this – they are more into the technology and market size does not enter their minds.
There are some niches (particularly in the B2B sector) where often you may have less than 100 companies as potential clients. That is OK if your product / service has sufficient margin to warrant focus and you believe you can secure enough business to run a profitable operation. - Production – you need to be able to scale up quickly in case your sales overshoot your projections.
Selecting the right suppliers is therefore imperative! Make sure you look beyond price in your selection process. - Fulfillment – you need the right office space, production and warehouse facilities, office equipment etc.
There is no point trying to run a “physical product” business which generates 2,000 orders a month from your garage. The lack of proper fulfillment systems will simply add to your cost / unit ... and divert your energy away from more marketing (and hence more sales).
If you wish to maintain a small operation, look for a suitable outsourced fulfillment operation to handle all on our behalf. Many successful direct marketers over the years have run
multi-million dollar operations with no more than 6 staff simply by outsourcing functions such as design, fullfillment, and even back-room processing. It does work! - Promotion – you need to know that you can reach your market, and that you can scale your promotions upwards if and when required.
Sometimes you have no choice but to run with a promotion to say 1,000 names because they are the only ones which target your audience.
However, if your product / service selection process was right, then there will ideally be additional options to run with as well -- e.g. a list of 30,000 names where you can do an initial test of 5,000 and then roll-outs to the balance of the names on a progressive basis.
Do NOT Let Ego Rule
Some marketers make a lot of money from a particular promotion and suddenly think they are the bees-knees, that they are so clever, that anything they touch will turn to gold.
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Their egos are so strong that you can’t tell them they’re wrong … they simply will not listen.
As a result, they charge forth into a new area / promotion which goes sour and drains all their hard earned profits – sometimes drags their business down totally.
I saw this happen with a major retailer who appointed a domineering personality to start up a new Division. He had success in a previous role and therefore “knew what had to be done”.
He was adamant that general television advertising was the solution. We vainly tried to convince this person that his approach was wrong, that he should be using direct marketing to test all first, that the sector he was trying to reach (senior business executives) was predominantly a DM sector.
$3 million later, he was gone and a new team came in which re-focused the business into a direct marketing operation.
Situations like this have happened many times over the years – and one which dominated during the Dotcom days when egos were rampant and money flowed at will.
There’s always been one simple truth about marketing (and business):
Not everything will work!
So you MUST at all times follow the processes we have outlined in this program, particularly the ones relating to testing.
If you follow a structured approach to everything – and don’t let EGO rule – then you can control your risks and maximize your returns.
By retaining a humble nature about your successes, you also retain credibility when a promotion fails.
Every marketer has failed campaigns. Some just don’t admit to them! All successful marketers / business people learn from their failures!
There are no absolute Gurus out there - i.e. people who get it right every time. It's impossible because each situation involves a different set of circumstances.
To reinforce this, Bill Gates / Microsoft have not won with every new direction / product they've launched and Warren Buffet, the world's most successful investor doesn't always come out a winner on every investment he makes.
Do NOT Underestimate Anyone's Input
There's always been a perception that Mentors need to be people who have been around a bit and have the sort of background Joe and I do.
Well that's a fallacy!
In todays rapidly constantly changing world, some of the people who inspire new ideas and directions may in fact be 20+ years younger than you.
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And they may right now be sitting at a computer - IN YOUR HOME.
Yes, you should...
NEVER under-estimate what you can
learn from your children
They are alot more attuned to what is happening on the Internet than many parents and so invariably can give you insights which could be very valuable in your business.
For example, my 17 year old son - without any input from me - has generated 4.841 MILLION views of two videos on You Tube since early 2007 to June 2008.
As marketers, we bend over backwards to achieve results like that and yet here is a student who's attracting significant interest - including from documentary and TV news people - with ease!
Now he did have some insider knowledge! He's a moderator on a forum and so he was aware of what others were discussing and so he decided to test what was being said -- "for experience" as he puts it.
By listening and respecting every bit of input you can get, you just might find a winning formula which has eluded you to date or can take your business onto a new level.
Do NOT Procrastinate
We mentioned earlier the importance of being first-to-market.
Now you don’t have to be first-to-market to succeed, but you can’t be too far behind either.
If you’ve got ideas you would like to implement, then schedule them to HAPPEN.
Don’t sit on any plan. By the time you get around to making it happen, the market may have moved on … and whatever opportunity was identified may be gone.
Do NOT Undervalue ANY Relationship
Every relationship you have has a value.
It’s a principle which applies in any industry … and is particularly important when you do any form of direct marketing.
My first role in the Direct Marketing Industry was in 1987 with Datamail, the dominant service provider at that time to the Australian DM industry.
It was a vibrant learning environment for me, with some exceptional people on staff, including Darrel Haberecht (former Managing Director of EMI Records Club and a former Australian Rugby Union Coach) and Joe Lipton (former mail order king who introduced the Bull Worker body building product to the Australian public way back in the late 60’s).
Both were seasoned direct marketers with a wealth of knowledge … and a track history in understanding and applying direct marketing principles.
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One of their favorite sayings whenever we discussed sales / marketing options was a very important fact about direct marketing (indeed any business) …
Small Fish Are Sweet
You should never lose sight of the fact that a $10.00 buyer today could become a buyer of a $300 product in 6 months.
So the quality of service (and respect) you accord them should be exactly the same you accord to someone whose purchase was 10 times greater.
There's an associated benefit...
You are more likely to attract a lot more $10.00 buyers than $300 buyers and so when you release a new product, you will have a much bigger pool of potential buyers for your new product.
Handling these different buyer segments will most likely require a different set of promotions / offers for each segment – e.g. with regular high priced buyers you may offer deeper discounts.
Still, the principle of providing comparable service (and respect) should always apply.
The same applies with Affiliates. Everyone’s circumstances change in business and a small Affiliate today could become one of your Super Affiliates down the track.
Plus, when appointing suppliers, you should ensure selection of ones which will give you quality service irrespective of your spend.
Do NOT Forget To Make Time To "Think"
We all get so engrossed in our work and often fail to allocate time to just straight thinking.
Your success - or failure - is often driven by an idea sparked maybe by someone else, or invariably something which has been germinating in your mind over time but the pieces never really hung together. It needs time - to be thought through properly!
By allocating time to just thinking things through without the day-to-day dramas of running a business, that idea can be progressively expanded upon to the point where you can either reject it or start getting the wheels in motion to go to the next step.
Unless you allocate "thinking time", it just won't happen!
Do NOT Over-Promise
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It’s absolutely imperative that every claim you make can be fulfilled and validated.
If your copy oversells or your product features are not as stated, then you'll end up with a high rate of returns / refunds … and, more importantly, a lot of customers who will never purchase from you again.
Quality of packaging, speed of fulfillment, customer service – they all play a very important role in minimizing returns as well.
Do NOT Limit Your Thinking To “Local”
As a current day marketer, the world is your market thanks to the Internet, something marketers in previous generations did not have at their disposal.
Still, many marketers are not taking advantage of this … and limiting themselves in the process.
At the beginning of this program, we mentioned a website called DIYwebtools.com.
Now in 2001, this domain was registered by a web design / development business in Australia which had its own unique DIY tools … and used as a basis for creation of a mini portal featuring this companies DIY tools alongside those of other local software developers.
The initial objective: To convert their business from a local to international focus!
All participating software houses were rapt and convinced it would be huge.
Just prior to launch the web business changed their minds – they wanted to focus on tying their DIY software solutions to their web development and web hosting service on a “local” basis only.
According to Domain registration details, the Domain is now owned by a USA resident and is tied into a Search facility.
That mini site (and DIYwebtools link) – purely an Adsense site – now has an Alexa ranking of less than 1,000 which is exceptional.
I’m sure the original owners are successful – and happy - in what they are doing.
BUT that Alexa ranking reinforces what “could” have been an exceptional business for them if they didn’t have a “local” mindset.
[Opportunities to grab great expired domain names like this, ones which suit your concept / business to a tee, come up quite often. Don’t overlook the expiring domain listings when looking for a domain name for your business!]
Do NOT Give Up Prematurely
You have a great idea, one which you feel is going to take your niche by storm … well maybe not by storm, but certainly produce a very tidy return.
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So you go ahead, produce a web site and do a test as we recommend in this program.
The test fails - so maybe you’re idea is not that good at all. That’s it, you decide not to waste too much more time on that and move on. At most, you may leave the web site you produced online, but not updated.
Two months later, you see a similar promotion copying many of your ideas – maybe with a few new ones as well - and suddenly you hear that they are “taking your niche by storm”.
It’s a tale you’ll hear quite often amongst people who have been online for some time where people are profiting big time from other people's initial idea.
In some cases, people who have given up prematurely sell their original web site ‘for peanuts” and the new buyer comes in, re-invigorates the concept and takes it to a new level … and then sells the business at a huge profit. It’s a well documented strategy for success on the Internet for those with the skill to turnaround a web site.
It’s no different to what has happened in traditional businesses for years.
Premature withdrawal of focus means that you leave the door open for someone else to profit from your ideas.
If you have a passion for what you started, stick with it – you just may find that with time something spurs you to make that little change that takes an initial loser to a big winner!
Do NOT Stop "Looking Ahead"
There is only one sure thing you can count on, and that is your market WILL change.
Many business owners achieve success and become complacent, overlooking this important fact.
As a result, they go from being an innovator in their industry to a lower rung player … and sometimes disappearing all together.
So staying attuned to consumer needs / wants, competitor activity and industry trends is absolutely critical.
But even more critical is absorbing all this knowledge and constantly reinvigorating your own business so it remains at the forefront.
Sometimes, you start out at one point – e.g. a broad information service within your niche – and then decide to narrow your focus to the most profitable segment within your niche.
That can actually be a smart way to go – because your focus is on “profit".
The classic example of this is IBM, once the answer for almost every conceivable computing need, but now a highly focused specialist in select areas where they enjoy market leadership and dominance ... and where the old adage of "You won't lose your job by buying an IBM" still applies.
Do NOT Become a Junkie
It's vital that you continue expanding your knowledge and absorbing new ideas and techniques.
However, you must do this in a way which delivers benefits to you.
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I have met many marketers who have undertaken every course there is and have credentials the length of your arm … yet do not achieve the results their product / service warrants.
The problem is that they have listened to so many people that they have all this information in their heads and cannot decipher which of the alternative methods may be best for them.
When seeking external input, always do so one-at-a-time, analyze what is provided and make a note of the points which you feel will be relevant to your business. After you have done this comprehensively on the one category, then move onto the next category.
Every info product promoter has something to offer so the best option is to select the one you regard as the best in a particular category (e.g. How To Write an eBook) and put their theories and processes into play.
It’s unlikely that the same promoter will be as strong in other areas so find the expert in those areas and follow their processes.
You should apply this process to any educational program – not just marketing related materials.
Now this is harder than it seems for some who are targeted (and attracted) by offers promising (example) $1,000 / week for 2 hours work. Now those systems do work for some ... but not everyone.
If you are attracted by those sorts of offers, then do ONE-at-a-time. It's the only way you're going to really find out if it's for you!
Please go back and look at some of the direction (also words of caution) we have provided in other Guides to ensure your selection process is thorough. Wasting even 2 hours a week on something which does not fit with you is something you should not accept.