TOP THREE MISTAKES MADE BY DOT COMS GONE DOT BOMB
MISTAKE #1: Tried to be everything to everyone. Consider Pets.com, for a moment. Their target market of pet owners was HUGE! But so were the obstacles they needed to overcome to turn a profit — “pets” is a very general market. Marketing to and meeting the needs of all these groups of people, with all these different products and services, is no small undertaking. I’m not saying it can’t be done, I’m just pointing out that it costs money… A lot of money. And this leads us to the next mistake…
MISTAKE #2: Threw millions of dollars of venture capital at an unproven business plan that takes years to reach profitability. Creating a nationally recognized brand requires deep pockets and a whole lot of patience, and that means you need investors with really strong stomachs. Many of them became frustrated as the dot-coms continued to vacuum up millions of dollars of investment capital without any sign of turning profitable. Could these companies have succeeded with a continued infusion of capital? For many, definitely. But when investors withdrew their support, they never got their chance. So finally, we arrive at…
MISTAKE #3: Invested buckets of cash in unprofitable advertising. The simple truth is, banner advertising just isn’t as profitable as it once was. Ads that once pulled 5 to 10 percent click-throughs are now lucky to pull 0.6% to 0.8%. Unfortunately, many dot-coms just continued to blindly throw millions at unproven, often untargeted, advertising, which pulled extremely low returns. Sadly, they might as well have been lighting piles of cash on fire.
LEARN FROM THEIR MISTAKES AND BUILD LASTING, PROFITABLE SUCCESS WITH THE FOLLOWING RULES:
RULE #1: Focus on a well-defined niche market. Rather than trying to dominate a huge, general market like pet owners or car owners, narrow your focus to a targeted “niche,” like parrot owners and women interested in car repair. The truth is, running two or three web sites that each target a specific niche market is the EASIEST WAY TO MAKE MONEY on the Internet. Everyone is looking for the “big money” makers so, all too often, niche markets are ignored.
Find a niche market. Figure out what they want. Develop the product. Offer it to them. Automate the business. Then start another and diversify. That’s it. Sounds too easy to be worth millions, right? Wrong! I know from firsthand experience… There is a LOT of money to be made this way.
RULE #2: Develop a strong Unique Selling Proposition If you have a lot of competitors in your specific industry, then you need to develop a unique selling proposition (USP). You need to emphasize what makes you better than competitors. Explain to your customers exactly how and why they’ll benefit from doing business with you as opposed to someone else. What do YOU bring to the table that no one else does? For example: – Your product/service might cost less than others. – You may have a higher quality product or service. – You offer a better guarantee than anyone else. – You target a specific age group, industry, or person. – You provide special knowledge not available anywhere! – You offer special incentives that no one else does. – Your customer service is better than your competition’s. Whatever your angle, the key when promoting your product or service is to EMPHASIZE WHAT MAKES YOU SPECIAL OR UNIQUE. Find an obvious void in the marketplace and fill it! Adjust your company or product to meet a specific need. Then specialize!
RULE #3: Spend your advertising dollars wisely. Once you have defined your market and developed your unique selling proposition, figuring out who you’re advertising to and where they hang out online suddenly becomes way easier. And this means that you can strategically place your ads where they’ll PULL THE MOST TARGETED POTENTIAL CUSTOMERS. As e-business owners get tired of spending their limited advertising dollars on high priced CPM (cost per thousand ad impressions) that pull pitiful results, the demand for more performance-based advertising continues to increase. PAY FOR CUSTOMERS — NOT OVERPRICED, UNPROVEN ADVERTISING.
RULE #4: Model success. Obviously, there are a lot of steps involved in building a profitable e-business. You need a strategically designed web site, you need a quality product or service, you need killer sales copy, and you need a flawless sales process. You also need a cutting-edge marketing campaign designed to blow your competitors right out of the water! That’s why you’ll be far better off — and way ahead of your competition — if you TAKE THE TIME TO EDUCATE YOURSELF. Why reinvent the wheel when you can learn from someone who has been there, spent the cash, researched the techniques, and made the mistakes for you?
RULE #5: Have a well-developed business plan that includes a clear definition of how you plan to profit. Plan to profit. That probably seems obvious. Unfortunately, too many people get caught up in some plan or scheme and don’t take the time to research, test, and plan exactly how they’re going to make their money. An *idea* is NOT a business plan. It’s just that… an idea. It becomes a plan when you’ve researched it, defined your market, figured out exactly how you’re going to market yourself, and planned to PROFIT WITHIN A SET PERIOD OF TIME.
SO WHAT’S THE BOTTOM LINE?
Is there still money to be made on the Internet? Definitely! With online shopping having increased by an incredible 580% over the past two years, now is an excellent time to be starting or promoting your e-business. Think about it… The economy is correcting itself after a spurt of uncontrolled growth, giving you THE PERFECT OPPORTUNITY to learn from other’s mistakes and strengthen your own business plan. Now’s the time to get online and literally make a fortune.
- Take advantage of your competitor’s hesitation at this dramatic turning point!
- Scoop up your share of the market by going after a well- defined niche market!
- Develop your own unique selling proposition!
- Be smart with your advertising dollars and pay only for advertising that makes you money!
