Building a million dollar information marketing business doesn’t start with buying the latest article or blog submitting gizmo or list of 5 million subscribers for $27! It also doesn’t start by investing in ever more popular fly-by-night tactics that work today and are obsolete (or banned) tomorrow.
Instead, information marketing millionaires first build strong foundations for success by focusing on developing an effective business model that allows fast growth.
There are five key components this business model must include. All of them are equally important for long term success, stability, and profitability of your business.
Once you have a specific business model mapped out you can identify the specific strategies you want to focus on. This in turn will dictate what specific tactics you need to employ, and what action steps to take to reach your objective of building a million dollar information marketing business.
So let’s explore those five key components of an effective business model.
Component 1 – Generate Traffic
The first step on this model is to generate traffic. You’ve got to have “duplicate-able”, repeatable, sustainable ways to generate traffic.
You can get your traffic for free – but it will take a bit longer to get it. Or you can buy it and have people visiting your website in a matter of minutes.
Some of the free traffic generation strategies include article submissions, blogging, social media presence, like video and audio podcasts and accounts with popular online networking sites including LinkedIn, MySpace, Facebook, or Twitter.
And let’s not forget something as simple as a “Tell a friend” button somewhere on each page of your website.
The fastest way to get traffic to your website is to buy it. Bying PPC (pay per click) like Google’s AdWords is probably one of the most known paid traffic strategy, but there are many others.
You can also buy text links, banner advertising, display ads on other people’s sites and blogs. You can also buy classified ads in other people’s ezines and even solo-mailings to other people’s lists of subscribers.
A lot of savvy marketers also use strategic alliances or JVs (Joined Ventured) to quickly drive massive traffic to their websites. While it’s a very effective strategy, it’s not free. Your JV partners will typically want to get a hefty percentage of the sales they generate with their promotions of your site. But – it will be quick!
Component 2 – Lead Generation
One of the biggest mistakes most people make is they try to get a sale too soon! Instead, a much better approach is to generate a lead first, then convert that lead into a paid first-time customer.
Let’s take this one step at a time – converting visitors into subscribers of some sort – a.k.a. “leads”! This is a critical step because it will allow you to continue communicating with people interested in your products or services.
You’ve probably heard that in any business your money and success are in your list, in your database of subscribers and your relationship with them. It’s very important to learn how to get people to come to your site and then entice them to want to give you their name and email.
It used to be enough to just say something like “subscribe to my newsletter,” or “get updates about my business,” somewhere on your website to get people to opt-in to your database. But those days are long gone.
Today you must be really good at presenting great value fast and making irresistible first offers to your visitors to persuade them to give up their contact information. Strategies that still work great include giving your web visitors access to special reports, audio downloads, or informative video and audio presentations.
Obviously the better the quality of your “carrot” and the better your presentation of it, the better your conversion will be. (Conversion is the comparison of the number of people that take you up on your offer and subscribe to your list to the total number of people that visit your website.)
Component 3 – Lead Conversion
Now that you have a list of subscribers – a.k.a. database of leads – how do you convert them into paid customers, someone who would actually gives you a few dollars? Generating that first sale is your lead conversion.
Just like lead generation, lead conversion strategies will vary from business to business, depending on what you are selling and who your customers are. But the key to your success is to systemize and automate this process as much as possible. Let me give you an example.
Think of a service business, for example some like a professional life coach.
Most likely they have no systems in place. Every new client is gained a different way. A conversation with each new prospect is different from others. Every lead is generated a different way. Every lead is converted differently. It’s no wonder their businesses are overwhelming them and generating very little money. There are no systems in place.
Now let’s look at a different professional and scenario; someone like an orthodontist.
Everything is systemized. From the same lead generation mechanisms to how patients get introduced to the doctor’s office to the first experience when they come in, to how they get to meet the doctor, how their initial evaluation is presented and delivered, how the price is quoted and how the treatment is initiated.
Everything is identical for each new patient! Everything is done the same way over and over and over. Everything is a system. And that’s what you are looking for in successful information marketing business model – systemized and automated lead conversion strategies.
Component 4 – Profit Multipliers
Once you generate the first sale, you will sell more products or services to your new customer. It’s important for two reasons. First, you probably have more products and services that can help that client much more beyond what they initially received from you. And second, that’s the way to maximize the success and profitability of your business!
Here are few examples of profit multipliers.
First there is down-selling. Basically what it means is that if someone comes to your website and says, “I don’t think I’m willing to pay $97you’re your multi-media course – and I’m leaving your website,” you present them with another opportunity to purchase a similar product that sells for $47 or even less and say, “Maybe $97 is too much for your budget right now. Can I interest you in getting a similar highly quality course that costs only $20?”
A different down-sale would be to offer a payment plan. You’d say something like this, “If $97 is too much right now, can I make it more affordable for you by letting you pay in three payments of $33?”
Next, there is a cross-sale. If they pay $97 for your first program, maybe they like to add another program that will help them get more value out of their initial purchase, especially if it’s priced attractively. It’s an effective way to immediately increase the size of each initial transaction.
Then there are continuity programs. For instance, if you are a coach you can have a system in place where after the initial first sale of some type of a home study course the customer receives an invitation to join a group coaching and support program for which they would then pay monthly.
And these are just a few simple ideas of what you can do to multiply your sales and profits.
Component 5 -Scalability
Your ultimate goal is to systemize and automate your business so that its growth can be expended beyond your own efforts.
Once you have all of the key components in place, focus on simplifying, systemizing, automating, delegating – in short, you want to optimize your business for maximum performance with minimum efforts.
Then simply start driving more traffic through this “profit machine”, and, if you designed it well, it will work like a charm and continue making you more money. It’s like of like turn the faucet knob on full blast.
So to have an effective business model first you need to generate traffic to your website, then you need a way to convert that traffic into leads, then convert leads into first-time customers, and then use profit multipliers to maximize your sales and profits.