Learn From Your Past Business Mistakes
Latest posts by Silke Jager (see all)
- 5 Topic Ideas For Small Business Bloggers - December 2, 2015
- Is Negative SEO Bad For Small Business - November 20, 2015
- 3 Effective, Easy Website Tips For Higher Google Rankings - August 13, 2015
We all make mistakes, in our personal life as well as in business. The important issue is that we learn from them and apply the lessons we learned.
The following newsletter marketing article has been written by Kevin Sinclair of BeSuccessfulNews.com. Kevin is the publisher of a free ezine dedicated to helping small and home based business people succeed in business on the internet. and has written two ebooks “Success Secrets: How To Be More Successful” and “How To Choose A Home Based Business”.
One of my most costly mistakes happened about twelve years ago in the off-line business world. However, the lessons I learnt are just as applicable online as they are off-line.
Having established a small mail order business part-time, I decided to expand the business using direct mail techniques. I had read all the recommended books and attended a course, and it seemed like the best approach to achieve my goals. After approaching various mailing list providers, I decided I had found the perfect list to reach my target market.
Pricing was obtained from the list owner and he was happy to provide me with small quantities of names initially so that I could test his list. These tests were successful enough for me to decide to undertake two large mail campaigns, one right after the other. I was very confident that I would be receiving countless orders and soon leaving my full-time job.
Disaster struck with the first mailing and the second mailing was too far progressed to stop. The initial sign was a significant increase in the dead letter rate. Then the quantity of orders was less than half what I expected. The second mailing had similar results. I was significantly out of pocket and I had to stay in my full-time job to repay the debts I had created.
Shortly thereafter, I began to read reports that the list owner was being investigated for fraud and other criminal charges. All in all, a sorry state of affairs.
The key lessons I learnt from this experience were:
1) Always check the integrity of who you are doing business with – especially if you have not had previous dealings with them.
2) Never assume that limited test results will be duplicated in larger scale tests.
3) Never over-commit to promotional activity – it is better to grow slower than to lose your hard earned money.
4) The stated size and quality of a mailing list should be regarded with caution.
5) Ensure you have sufficient profit margin in your product to be able to survive should your response be very poor – especially in direct marketing activities.
Today, the lessons I learnt are applied to my online business activities in the following ways.
Solo mailings to lists of newsletter subscribers are done with caution. Some list owners will inflate their subscriber numbers to encourage advertisers to use their services. The first thing I do is subscribe to the newsletter to see the quality of content and what others are advertising via solo ads.
Then I run a classified ad in the newsletter to test the responsiveness of the subscribers. This also gives me an indication of whether the stated size of the list is true or not. I have had better response from a list of 20,000 than what I received from a list of over 200,000. Many factors can influence such a result.
While you should receive a far better response from solo ads than classified ads, it still pays to test wherever you can. If a classified ad in the newsletter did not result in responses, I would not advertise using the solo ads. However, I might test a few different classified ads to see if the initial results were correct before moving on to other possibilities.
It is worthwhile to “do the numbers” before spending on advertising. While many marketing experts talk about the ‘lifetime value of a customer’ concept, those whose business activities center on promoting the products of affiliate programs should regard this with caution. Instead, determine how many must be sold so that the commission you receive will cover the cost of your advertising.
The higher the percentage response to your offer you need to cover your advertising cost, the greater the chance you will make a loss. Do not rely on industry statistics or averages to make your decisions. Keep careful records of your activities so you know what works, what is to be avoided and what to expect from future promotional activities.
Finally, exercise caution when considering safe-lists and any type of email address lists that can be purchased. My experience is that there are NO truly safe-lists available other than having your own opt-in list. (There are numerous low cost email newsletter providers available for small business owners, the best in my opinion are Aweber, Constant Contact and MailChimp. – Silke)
Any form of bulk email to people who have not agreed to receive your message will damage your business reputation and your prospects of making a decent living on the Internet.
A man must be big enough to admit his mistakes, smart enough to profit from them, and strong enough to correct them. John C. Maxwell
Well said! Like I stated at the beginning of this article, we all make mistakes, some times at a very costly price like it was in Kevin’s case. Newsletter marketing is extremely important these days, it needs to meet your company’s unique needs and grow your business as well as provide valuable information for your customers. When Newsletter Marketing is done correctly it will connect you with your customers on a personal level – establishing trust, authority and credibility.
What are some business mistakes you have made in the past? Leave me a comment below.
Before you move on… sign up for my Newsletter, simply click here!
You will never miss another marketing article again. Rest assured, I respect your privacy and will never spam or give your email address to anyone.