Preneur Marketing - The Blog of Entrepreneur Pete Williams

OK, so I’m a little behind the conversation.. like 3 months… but there’s been a lot of chatter recently about “moving the freeline”

Now, the “free line” concept comes from the sales funnel, where typically, the sales process begins with a free ebook, white-paper or audio download… in an effort to build trust with the prospect so they will buy from you further down the funnel. Nearly everyone online has experienced this - it’s what the industry was built on.

Moving the free line is the concept of giving even more stuff away for free and converting what previously were paid for products into free resources. So, what was previously a front end product you had to pay for, becomes a free resource now sitting above the free line.

Eben Pagan is the man who has been credited with coining the phrase and this is his take on “moving the free line:

“MY EXPERIENCES MOVING THE FREE LINE

… BUT that’s exactly it, and the point so many people are yet to articulate:

You are not giving away free resources - You are trading your resources for something of value that is perceived to be free.

As an business owner, online or off (there I go again; on my “you’re not an internet marketer, you are an internet business owner” rant) you never want to give anything away for free, you always need to get something of value in exchange for this “free”. Notice I said ’something of value’, not necessarily money.

An email subscriber (as Eben mentions) is something of value, that doesn’t cost the prospect anything out of their pocket.. but it does have an empirical value.

This empirical value can be calculated by working out how much profit you made last year, and divide that by the number of subscribers on your list…

And that right there folks, is what each subscriber is worth to you.

So in reality you are *selling* what is perceived as free, for a real $$ amount (in future income), because you are trading an ebook for an email address,… which in turn is worth $X to you.

So if by moving the free line you can exchange more email addresses for “free” stuff then, and only then, does the theory/concept/practice makes commercial sense.

So for those playing along at home…

No matter what form of business you are in;

Give a free ebook… get an email subscriber.
Give a discount.. demand a referral (or three).
Give an audio… extract a suggestion/feedback/response.
Give a bonus… require a testimonial.
Give X… insist on Y
Go above and beyond… get some value in return.

I’m so excited.. I just came across this website that appears to have embraced the phenomena known as web2.0

I can even picture how this forward thinking company came to have a crack at making their website more then just the typical brochure…

It was about an hour or two into the traditional end-of-month long lunch… Fueled by the company-charged pinot grigio and a belly full of confidence you get after 4 days on the job, a young marketing-intern who strategically weaseled his into the seat next to the marketing executive began to preach the gosbal that is web2.0

Equally under the influence of the aforementioned pinot, the “self-deluded-in-touch’ marketing manager starts to ramble on about his nightly struggle trying to drag his teenage daughter’s attention away from her shinny macbook air… and gives this pimply faced intern the project of “face-spacing” and “my-booking” their website.

So…

Fast foward two months…Beauty Addicts‘ has teamed up with iJustine and created a quisi-web 2.0 page on their site.

The page has distinct web 2.0 feel to it - Fans of iJustine can check out what BeautyADDICT products she uses, learn which products make which look, watch a video of her applying the products… PLUS it even intergrates her Twitter feed and Flickr roll into the page.

How cool is that, I here to say…. It’s about time, I hear to celebrate… Finally a business “get’s it”, I hear you scream…

Well here’s the kicker…

They haven’t opened it up to the public and began to make a community out of it….

This idea has so much potential as a really cool web 2.0 community… BeautyADDICTS customers (read: community) could share their favorite product combinations, display the products they have bought, upload photos of their favorite looks, interact and leave comments on each other pages… AND THEN INSTANTLY BUY THE PRODUCTS THEIR FRIENDS RECOMMEND.

Even the url is perfect for a web2.0 site, BeautyADDICTS.com… I can’t think of a better url - If they changed the focus of their site and made the community a primary focus of the site, with their products secondary I would almost guarantee they would shift more products - Which at the end of the day should be their SOLE focus of their website.

Speaking of web2.0…

Why hasn’t more businesses embraced the power of facebook and created applications like Apple Mac Addict…

It’s such an easy and effective way of allowing your customers to participate in your brand, generate some online-word-of-mouth, create some free over-the-shoulder advertising… all where their cusomters ‘hang-out’ most; online.

For a business to survive moving forward, it’s the participation element they need to focus their marketing on. The marketing mix no longer consists of just 4 P’s - product, price, place, promotion.

Participation is the 5th and most important element these days… and that’s why I am working on an entire post dedicated to it… Stay tuned for that.

P.S. For those following my twitter feed, the firefox plugin video has been delayed… please speak amoungst yourselves while I get use to this Mac.

P.P.S. If you know of any forward thinking businesses who have successfully embraced web2.0 please leave a comment below and let me know.

Technorati Tags: ijustine, beautyaddicts, beauty addicts, beauty, addicts, facebook, web2.0, web2, web, 2, maclover, mac, lover, apple

People act in line with their commitments. Cialdini in his great book Influence, states that we have a ‘nearly obsessive desire to be (and to appear) consistent with what we have already done.’ This is the theory behind those competitions that you’ve probably seen where you have to state in 25 words or less why you like a particular product. The rationale is that if you make people write down why they like you or your business, they will then subconsciously want to keep their word, so next time they have to choose they will select your product.

This principle means that people will feel a sense of obligation to you if they have told you they like your product or that they would find it useful. Once people make a commitment, especially in public, they will usually make an effort to stick to it.

Using commitment and consistency in your business

You can use the type of competition mentioned above to create a sense of commitment to your business. Run a competition where entrants have to state in 30 words or fewer why your frozen yoghurt is better than all the other frozen yoghurts on the market. This makes them think about why they like your product, and will also encourage them to buy from you because they feel they have decided that your yoghurt is the best and they will want to be consistent with this. Use the entries as testimonials — with permission, of course.

You also now know the reasoning behind running such a competition, rather than just doing it because you’ve seen others do it — which is never a path to success. Here’s an example of a business that doesn’t seem to understand why these types of competitions are run. At the time of writing, a book publisher is having a competition that asks readers to do the following: ‘In 25 words or less, describe your favourite place to read in winter and why.’ What’s the point in that? Why not create positive feelings towards the books you publish? For example, ‘Describe in 25 words or less your favourite book published by us.’ This is an example of a business using a promotional tool without really understanding why. Don’t make this you!

You can also use this principle when talking to clients. As you discuss with them the benefits of what you are selling, get an agreement from them each step of the way. Don’t just bombard them with the information. So, if you are trying to sell a mobile phone, you would say: ‘This phone lasts 20% longer than most others on each charge. Would you find that useful?’ Then, ‘This phone can also play music through headphones. Do you think you could use that?’ And so on. Then, if the customer has replied yes to all or most of these, when it is time to say ‘Yes I’ll take it’, they have almost talked themselves into buying the phone by agreeing that they would find the benefits useful. This approach will give you more success than simply reading a list of features to the customer.

Use the concept of commitment and consistency to encourage people to make a written or verbal commitment to your company. They are then more likely to purchase from you.



HEY, did you know i’m running a contest while I am away…
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So how do you add a back-end to your business? Well, the first step is to start seeing your business as a back-end business. Think like HP, or like a mobile phone provider. Don’t think that once you have achieved the first sale, that’s it. A lot of businesses look at it this way: they try and get a customer to make a sale — that’s singular SALE. How you should be looking at it is; you make a sale to get a customer — where this customer will repeatedly come back to you and purchase more and more.

Have a look at your products or services to see how they can be used to create a back-end. This doesn’t necessarily mean adding something after your main products or services; you can add something before and make your main items the back end… It’s all about attracting people with one item and then leading them on to the next.

You should also investigate how you could add residual income to your business systems. Can you sign people up to a contract? Rent your product out? If your business is mowing lawns, perhaps you could sign people up to a program where you go back and give the lawn a quick tidy up once a month, and mow it every three months.

A good back-end offering will either be an essential requirement for what was originally purchased — such as the ink cartridges — or it will improve on or add to the item — such as the extra computer memory and the software. Here are a few questions that might help you find your back-end:

• What can you offer at a low price that will attract people to your business, secure a sale, and get people on to your mail list? We offered the certificates and small pieces of timber with the aim of finding people who might also buy the frames.
• What can you offer people that will help them with what they have already bought? For example, if you sell computers, can you also sell computer manuals? Or offer tutorials?
• Does your product require any consumables? For example, the ink in a printer, or bags for a vacuum cleaner.
• After people have bought your product or service, what else might they be interested in? If your business is mowing lawns, you can send your clients a brochure for your landscape gardening services when you send them the bill.
• Can you offer products to go with your services? For example, if you are an accountant, perhaps you can back-end people into buying accounting books or software.
• Can you offer upgrades for your product? People might not buy this at the time, but after owning the product for six months, they might then feel the need to make it bigger, faster, stronger, quieter …
• Can you offer customers a subscription to a magazine or newsletter? This can create a great back-end when people re-new each year.

Selling computer software is a great way to create a back-end, as people want the upgrades that usually come out every year or two — give them a 5% discount if they buy the upgrade from you. This should be enough to stop them going elsewhere.

HEY, did you know i’m running a contest while I am away…
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Risk reversal is all about removing any ‘risk’ that the prospect might be feeling and transferring it to your business. For example, I bought an expensive new computer recently, and I wanted to buy an industrial strength surge protector to go with it. The one I choose offered a guarantee that they would pay for up $70,000 worth of new equipment to replace anything damaged by an electrical surge while connected to their surge protector. So instead of me taking on the risk that their product doesn’t do what it should, they have taken this on.

Marketing expert Jay Abraham is generally credited with creating ‘risk reversal’, but in fact the original marketing guru Claude C. Hopkins in his 1923 book Scientific Advertising introduced the concept. He talks about the difference between selling your products and offering a refund for dissatisfied customers and offering a trial for a week and paying at the end if the product is acceptable. The risk is transferred from the buyer to the seller.

He gives the example of a man buying a horse. The first salesman said take it for a week, and if you’re not happy I’ll refund your money. The second salesman said take the horse for a week, and come and pay me then.

The second salesman got the sale.

HEY, did you know i’m running a contest while I am away…
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