Living Radically Ambitious

photo by Chiot’s Run

I’ve been doing way too much thinking about business models lately. Whether working in my own business, thinking about the new music economy or looking into some of my clients’ businesses, their long term goals and models are what has been fascinating me the most.

What concerns me most (and I am guilty as well) is that we all think about “the right now”. How can I pay my bills this week, month, quarter. Many businesses lost in this economy due to this short-sightedness. They laid off workers to make quarterly margins. They stopped advertising to hit budget. They may have even looked to social media as a new broadcast channel.

Most businesses that are starting online, the lifestyle businesses you see, and even the business models from bloggers, freelancers and small agencies all have one thing in common. They are running a garage sale. And we all know what garage sales are…

Garage Sale Businesses

A garage sale business is a marketing plan designed to make money once. It involves a one time transaction. It makes both parties happy and everyone goes on their separate ways. You create a website and let it into the wild for a client. You build a great eBook and sell it to some customers. You drive traffic to click on ads and affiliate links. You bargain, have sales and free for alls.

This is what I have been studying and looking into as a not so good business model. You spend time, money and effort marketing something great, creating a transaction and then…

Nothing

When the traffic stops, when the marketing stops, when the websites get old or you stop working - so does the money. When the garage sale ends, the garage sale ends.

It is very hard to scale a business built on one time transactions. It’s also hard to live the freedom lifestyle when you need to tend to your business at all hours, working for the next transaction. In order to have the ideal business, the dreams and ideals of the internet lifestyle you need to create a business that allows you to continue to grow while putting in less and less effort. But how?

Continual Transactions and a Followup System

You can complicate things as much as you want, read every online course or book and listen to speakers at conferences, but essentially your business comes down to 2 things that you not only need to do, but you need to do them great.

The first is to create continual transactions. This can be in the form of memberships sites, recurring billing of a client, help desk suport, software, advanced training, loyalty rewards and anything else that can help you bill your most important people every month (or other billing cycle).

Some great examples from the real world include:

• Your gym membership
• Netflix
• Threadless 12 Month Tee Club
• Old School Cigarette Rewards Networks (or maybe you remember Kool Aid Points)
• Panchero’s Loyalty Card (Buy 10 Burritos, get the 11th on us)

The second key is a follow up system. You work so hard to turn window shoppers into buyers only to never talk to them again. Creating a relationship with the people that open their wallets, or email accounts or phones for you is one of the most vital business principles you can master. If this is true, why do so many small and web based businesses fail at this?

They either…

• forget to ask
• are scared to ask
• afraid that people will unsubscribe

Let’s tackle each problem head on.

Forgetting to Ask

This is actually one of the most common problems I see. You buy something and there is no way to stay in touch. Think about books. Most do not ask you to join a follow up community or more information. What if on the 4 Hour Work Week back cover Tim Ferriss said, text 4hww to 1234 and I’ll send you a lifestyle tip of the week! (hint - we have this coming very soon!)

Imagine all the Ferriss followers - they would go nuts and Tim would now have a group to promote his next book to that have an intimate connection with him, a permission based marketing relationship.

Restaurants have similar issues. When we have consulted with them in the past, we try to use all contact points as ways of branding and marketing for a future sale. Rewards cards, websites and twitter info on receipts with a huge call to action, on the spot surverys for instant discounts (not on your next visit if you do this ridiculously long over the phone survey) and other things.

So the important lesson here is to ask for permission to followup. The next lesson is to know how your customers and fans want to be contacted - that will be another day!

Scared To Ask

I run into small businesses that are scared to ask for contact information for fear that people won’t give it. There was a hip-hop artist that I was working with who was releasing a mixtape, had extreme buzz and a catalog of local and regional success. When it came time to release the new mixtape he was scared to ask for an email in exchange for the download because then people wouldn’t download it. I told him that if people wouldn’t give you an email for an entire album of material, then they aren’t a fan that you can build with anyway.

Other businesses are the same way. If we ask for something, people will get defensive and leave. If you are an ass and overly persistent, than yes, they will. If you are providing value and in your follow up you can provide value, then you have nothing to lose by asking. If they buy and don’t give you their info, well then you accomplished your garage sale goal.

Afraid People Will Unsubscribe

This can be unsubscribes, ignores or whatever you want to call it. I’d rather have someone unsubscribe that is never going to buy than waste an email, a text or a phone call to someone that will come back and become an advocate. I had one person write me a personal email the other day that said - “I decided to unsubscribe because I will never pull my credit card out, so I wanted to save us both some time.” That’s honesty and honestly it is great for my business.

People are going to unsubscibe. Every broadcast is not going to yield huge sales. But, if you are following up with people that loved your brand, it will make your sales process that much easier. It is hard (and expensive) as hell to recruit a new customer. It is much easier to send an advocate an email. If they unsubscribe it means someone else loved it and will be sharing the news with their friends.

So Do It

Now that we talked about adding continuity and following up to your marketing and sales funnel, do it. Go grab Aweber (affiliate link), start collecting emails. Use text messages. Get a call center or some customer support if you need to.

If you know you need to do it to grow your business, then will, just do it. Since I have shifted to this model, my business, my advocates and now friends are helping me grow by leaps and bounds every month. Every time I send an email it gets forwarded to another person or retweeted to a new legion of Twitter peeps. And you know what, I stay up late and wake up early and provide them with killer value, then I follow up. It’s working pretty well and I’ll take it any day over a garage sale.

Oh and if you want to join the cool people in my community, we have a pre-launch list for the new Rock Star Series that is launching Dec 1. If you give us your email you will also get some cool stuff.

Let’s talk - what does your business model look like and how can it be improved. Let’s hold each other accountable and see how much we can grow together.

-Greg Rollett