David vs. Goliath – with the use of the internet, David is winning in a big way!
Premise: Savvy Internet Entrepreneurs vs. Corporate America. These smart, young entrepreneurs are cream skimming the most profitable products and services away from the bottom line of Corporate America. How are they doing it and how can corporate America position itself against such a threat?
Below are ten things Corporate America can learn from the new wave of Internet Entrepreneurs and Internet Marketing Firms. It’s a classic David vs. Goliath story and David, armed with the latest tools, APPs, Websites and the reach and speed of the internet is quickly stealing market share away from Corporate America.
1. Faster Product Creation. Internet Marketing entrepreneurs taught me an amazing concept. They will interview me today, send the audio tape of that interview to India for transcription or even translation and have a completed transcription of the interview in their inbox by 7:00 a.m. the next morning! They immediately post that interview as an audio, video or Webinar online and are able to make money with it less than 24 hours after the initial interview.
2. CRM & Database Marketing. Corporations have invested millions of dollars in setting up systems and infrastructure. They have invested in sophisticated CRM or Customer Relationship Management programs to manage every “touch point” with the customer. Where there was once a huge competitive advantage in corporate America with their sophisticated CRM tools, it has all but disappeared. While firms invested tens of thousands in complicated CRM products, the technologies of today allow small 1 and 2 person firms to compete by efficiently and quickly meeting the demands of the customer! They use software such as InfusionSoft, Constant Contact or aWeber and have most of the CRM functionality that your CRM product delivers for a small fraction of the cost.
3. Technology Savvy: Internet entrepreneurs use technology at every level of their company – even if they are a one person company working from their apartment. Many have nothing more than a laptop, a cell phone and an apartment. Sorry, some have no cell phone and borrow a friend’s laptop. Add to that a digital camera and knowing the right websites to help them create a simple website (or sell products via their Facebook or Twitter Page) and they are armed and ready to go to market! As the former Ma Bell executives will attest to, an alarming number of these young people don’t even have a home telephone anymore electing instead to use their cell phone for all communications.
4. Cellular Phone and PDA Savvy. I have 5 teenage daughters, and I learned the hard way- talk to any person under the age of 25 and you see they often can’t talk for a long period of time without turning to their PDA or cell phone for one reason or another. These young people are ALL comfortable with surfing, texting, buying and communicating via their PDA – and do these things much more often than using a phone to make a phone call. My daughters and their contemporaries all grew up with these ever changing and evolving instruments and utilize Facebook and Twitter to share new ideas and the latest “cool APP” on an hourly if not minute by minute basis. They are also not afraid of change, which is often a hurdle for those of us “set in our ways” or many large corporations with set practices and old school methodology.
5. Sell Your Products or Someone Else’s: Internet Entrepreneurs learn quickly. They have learned that the best time to increase their margins is to do it at the time of sale. Hence, they sell, upsell and cross-sell when that first order is being taken. They have learned that once a sale is made, they get that name into their database, which is often more valuable than the product itself. They are coded as a “buyer” and then the real fun begins- finding ways to get more blood from the turnip. Savvy Entrepreneurs either create more products to sell, private label someone else’s product or service or have an “Affiliate” relationship with another website or service provider where they receive a commission for the sale and have zero investment at risk.
6. Outsourcing, Less Infrastructure & No Risk: Most internet based firms have far fewer people and infrastructure than traditional firms. They often turn to Websites like 99Design.com for logo, graphics and website creation, and Guru.com or eLance.com for outsourcing any number of tasks such as accounting, bookkeeping or even virtual assistants. Smart entrepreneurs often have ZERO inventory and sell online from nothing more than a photo. Once the sale is made, they often have the product “dropshipped” directly to the buyer and pay the supplier 30 days later eliminating any inventory risk.
7. Quick Answers & Surveys: While a corporation could take weeks or months to choose the best name for a product or the best headline for an ad, savvy internet entrepreneurs will take the different names or headlines today, run ads on Facebook or Google AdSense tonight and have hundreds if not thousands of “clicks” that show them which ones worked best and which ones failed the next morning! Many turn to sites like SurveyMonkey.com or SurveySpot.com or post the questions to their internet marketing friends on their Facebook or LinkedIn page to get answers quickly to their marketing, advertising, promotion or sales questions.
8. Digital Based Products. Many internet based marketing firms create and/or sell digital based products and services. They turn to firms like Clickbank.com to manage such offerings. With a digital based product, these sales machines have almost no cost of sales so the item can have a 50%, 60% even an 80% commission to the selling firm or website! Clickbank.com manages that offer, sends the buyer their commission then sends the seller the difference less a small fee for handling the transaction.
9. PayPerClick and LeadGen. These entrepreneurs quickly become experts in how to make a sale or get leads via the internet. They are savvy in how to use search engines like Google and Yahoo or sites like Facebook and YouTube to get large quantities of highly targeted leads at a very low cost. These entrepreneurs don’t spend much money to learn the game, know how to get the leads inexpensively and convert those leads into sales quickly turning prospects into clients. Of course, they also know that the moment they sell them something, that buyers name goes into the database and from then on, that customer will receive offers for a slew of products and services the entrepreneur hopes to sell them in the future.
10. Domain Names and Keywords – FACT #1 – “Domain Names are Internet Real Estate”. FACT #2 – Marketing via the internet is driven by “Keywords.” Many marketing executives have figured out that instead of continually buying the proper Keywords for their internet marketing efforts, they also buy a host of related domain names for their products, services or industry category and simply point those eyeballs or “traffic” to their website. Think of it this way. How many sales a year does your firm need to make to pay for a $7.95 domain name? Consider buying as many “keyword centric” domain names as you can find in the marketplace and if you get the opportunity to buy a one or two word, “generic” domain name for your industry like MutualFunds.com, Photographer.com or BeautyProducts.com, you might want your accounting department to run the numbers because the firm gets 100% of the traffic, it can depreciate the asset and best of all, by owning the digital asset (domain name), the firm keeps its competitors from getting that customer.