Business Coaching

Paul Lemberg Formula Five or Formula 5

Paul Lemberg is famous in the business coaching world for creating Quantum Business Coaching, (now called Axcelus) and is also the author of a number of business improvement books.

In collaboration with Internet training company StomperNet he is bringing to the market a new business development/profit improvement program - Formula Five.

The Formula Five slogan is "The system is brilliant so you don't have to be" and Paul Lemberg is famous for systematising the business development process.

The launch starts with a free 73 minute video of Paul Lemberg introducing Formula Five. It is excellent and packed with ideas.

Paul Lemberg Formula Five - just sign up for the video over on the right hand side of the page.

Here is the promotional email copy for this first Paul Lemberg Formula Five video written for Internet marketers which is why it emphasises StomperNet and Andy Jenkins who have huge reputations in that area.

Subject: 62% of you are going out of business

That's a REAL statistic from the Small Business Association.  

62.8% (to be exact) of businesses will fail.

Kind of depressing.  Vegas has better odds.

All business owners should watch this video right now.

Paul Lemberg Formula Five

That's from Andy Jenkins and the StomperNet guys, and he's doing a little math.  WHAT?!  Math!?  I know, but all you have to do is pay attention.

Even in this recession, some businesses are going to step up and grow.  They're going to expand their customer bases AND increase profits.

How are they going to do it?

Simple - watch the video.  They are going to follow a PROVEN Formula for success.  This formula has been honed over 15 years by Paul Lemberg, one of the most respected (and expensive) business consultants around.  But you get his expertise today for FREE.  And get this...

It works on 93% of ALL businesses that try it.

Go watch this video right now.  You won't regret it.

Paul Lemberg Formula Five

Once you do, odds are your 2009 will be looking VERY good.

YOUR NAME

P.S. Seriously, with just this video, you'll be taking pages of notes and can actually start making MORE money today.  Don't forget to opt-in and get to download a FULL presentation on this secret formula delivered by Paul Lemberg himself.

Paul Lemberg Formula Five

My Thoughts On The Andy Jenkins Formula Five Email And Video

I would have preferred less of a play on the FUD factors - fear, uncertainty and doubt.

I couldn't imagine sending out an email or letter to my clients or prospects with the headline "62% of you are going out of business" even if that's what the statistics show.

When you go to the Formula Five website you are immediately greeted with a 32 minute "Dead Simple" video from StomperNet CEO Andy Jenkins.

It is packed with information, some social proof and Andy is certainly very enthusiastic as he introduces Formula Five and then takes you through some of the ideas in the first module - Margin Magnifier.

He is making Formula Five relevant to the traditional StomperNet audience and the beta testers have certainly had some great results in about 60 days but don't think that Formula Five is just for Internet marketing. Far from it.

Andy takes you through a price increase example which could have you scratching your head in amazement at his maths since, unlike in most businesses, a price increase does not all flow down to the bottom line because cost of good sold increase.

Certainly unusual for off-line marketers where variable costs are linked to volume and not selling price but I believe, on reflection - and after stopping myself emailing Andy and telling him he'd got it wrong - that it reflects the Internet marketing model of affiliate commissions which are a percentage of the total sales price.

There were one or two other things I could take issue with but the real jewel is when you give up your email address since you then get to hear from the developer of Formula Five, Paul Lemberg. Don't delay - get the Paul Lemberg video now. It can be streaming while you continue to read this.

Thoughts On The Paul Lemberg Formula Five Video (After Sign Up)

The Paul Lemberg video itself is long (and especially if you have just watched Andy for 32 minutes) - at 73 minutes - but is fascinating.

It starts with the business failure statistics and shows that the odds of success at gambling are often better than owning a business which is certainly an interesting take.

The video then highlights eight factors which unsuccessful business owners have identified as the causes of their problems and Paul Lemberg discusses his concept of the "rescue fantasy" along the lines of "things will get better if only we can..."

But business success comes from doing things a little bit better.

Whatever price you charge, what if you could charge a little bit more?

However many leads you get, what if you could attract a few more?

If your conversion rate of leads to customers is low, what if you could bump it up just a little bit - for example improving from one in ten to one in nine?

All these little things add up because of the law of compounding and I have said it before, small changes create a big effect because your profit is the difference between much bigger numbers.

This Formula Five video is solid content as Paul Lemberg will make you reflect on your own business and then introduces each of the success formulas in Formula Five.

Highly recommended - sign up to get your download version because you should probably watch it several times - Paul Lemberg Formula Five

Internet marketing examples are used in the video to make it relevant to the StomperNet community but this product is really targeted at the off-line world of service providers, distributors, manufacturers and retailers.

So What Is Paul Lemberg's Formula Five?

It is a 15 week coaching program that comes in five stages.

• Formula 5 Step 1 - Increase your margins
   
  
• Formula 5 Step 2 - Increase how much your customers buy
   
  
• Formula 5 Step 3 - Increasing the number of leads for your business
   
  
• Formula 5 Step 4 - Maximize your customer conversions
   
  
• Formula 5 Step 5 - Increasing the productivity (of you and your team).
  

But at this stage enjoy the free top quality content provided by the Formula Five launch.

Is Profit Really This Sensitive To Selling Price?

In the Formula Five video, Paul Lemberg shows you a simple business with a Profit and Loss account and what happens if price increases or decreases by a little more than 10% - profit falls away to nothing or doubles. Many people are amazed when they see how sensitive profit is to price changes - sometimes thrilled at the opportunities to make more money and sometimes horrified at the decisions they've made when they didn't realise the importance.

If you want to try other changes in price, I have written a very simple little Excel spreadsheet using the same Formula Five example which allows you to see what happens to Profit and the break even point.

Download Formula_Five_Dynamics

Customising The Model To Your Numbers

I have also written a more advanced spreadsheet which lets you turn Paul Lemberg's example into your business based on the key profit drivers of:

1. Unit selling price
2. Unit costs
3. Fixed costs, overheads or SG&A
4. Sales volume in terms of units sold.  

Just like the example in the Formula Five video this will show, when set with your numbers, your base Profit & Loss account and break even position and it will calculate revised "what-if" numbers based on your assumptions.

Just fill in the form below and you will receive an email with the link to download the Excel spreadsheet.

Name:

Email:

Remember these are your numbers based on you achieving your set performance on the key profit drivers.

Formula Five Review

I am very lucky to have an excellent relationship with StomperNet who have joint ventured with Paul Lemberg to market Formula Five and I have a review copy.

The first module - Margin Magnifier - has been delivered to me physically, the second is on its way and I have been given access to the online community with the extra modules.

However this is a meaty product which will take a significant amount of time to work through.

My main Formula Five review is on my Online Profits blog because I had not realised just how much Formula Five was targeted to the mainstream of small businesses. The Internet is seen as just one method of attracting and servicing customers.

Paul Lemberg Formula Five Review

Have You Experienced The Paul Lemberg Magic?

I would be very interested to hear your experience with Paul Lemberg if you have been a client or heard him speak at a conference.

While Paul and I have exchanged emails and we follow each other on Twitter, Formula Five is my first significant contact with Paul's ideas although I have been aware of Quantum coaching for many years.         

Marketing In A Recession: Do You Increase Your Investment?

I read a blog today on mistakes made in advertising and whilst I agreed with much of the contents since it drew on proven direct marketing principles, there was one statement I disagreed with strongly.

"Businesses that thrive during a recession double or triple their usual advertising budget"

It seems to me that potentially we have the classic cause and effect confusion and faulty logic suppositions.

Statement 1 - some business thrive during a recession

Statement 2 - some businesses that thrive double or triple advertising

Conclusion - therefore if you want to thrive in the recession, you must double or triple your advertising.

No, No, No

Don't fall into this trap and think that all advertising / marketing is a good and wise investment.

It's not.

So let me introduce you to a simple rule of thumb.

Marketing that makes you money is good but marketing that loses you money is bad. You do more of the good and stop the bad.

There is no need to overcomplicate marketing.

Use Direct Response Marketing If You Are A Small Business

The marketing and advertising techniques you learn by watching what the huge international companies do will lead you astray.

Much of it is very poor but they have money to burn. If you are lucky, it will help communicate the brand and create brand personality and associations but it won't have you rushing out to buy.

So you need to stop trying to promote your brand name and start thinking about giving prospective customers a strong enough reason to take action and contact you when they see your advert or other marketing communication.

And to do that you need to use direct response marketing so that you a) make sales and b) you can measure your results.

There is a huge body of work in direct response area from giants of marketing like Jay Abraham and Dan Kennedy to a wide variety of copywriters.

Adjusting Your Marketing For The Recession

Remember my simple rule of good and bad marketing?

If it makes you money, then you want to do it again.

If it costs you money (and isn't an early stage of a sequential marketing campaign) then you want you want to stop doing it.

[Note - a sequential campaign is designed to take a prospect who has never heard of you and turn a good proportion into buyers but it takes time to build up trust so the early stages of the sequence are unlikely on give you an immediate return on your money]

This basic rule applies as much in the recession as it does in good times unless you receive a perverse pleasure from wasting your money.

If you spend £1,000 on a marketing campaign and it brings you £5,000 back in profit, it doesn't matter whether the economy is booming or slumping, you run the campaign again.

What May Change In Difficult Times Is Your Definition Of Making Money

An essential point I emphasise is the importance on focusing on the lifetime value of a customer in terms of the total profit they bring to you over the relationship because many of my ideas are based around helping you to increase the relationship profit.

So I encourage you to think of your marketing along three time horizons:

1. The profit on the first transaction
   
2. The profit in the first year
3. The lifetime relationship profit

So in good times, if you earn £10,000 over the life of the relationship, it doesn't matter that it costs you £1,000 to create that customer. You still get a huge return.

But in bad times things are less certain and you have fewer resources you can risk investing in your customers.

So if it costs you £1,000 to win a customer and the profit on the first transaction is only £200, then it doesn't look so clever. This is especially the case if your average profit stream from a customer is heavily weighted to later years so average first year profits are still less than the £1,000 acquisition cost.

Every new customer costs you money which you don't get back for more than a year and the old saying "cash is king" is never truer than in a recession. In the short term every customer you win means you have less cash in the bank.

So in the long term you may be "making money" but in the short term you are not.

Adapting Your Marketing Campaigns To The Recession

1. Stop all image or brand advertising. If you can't show that it is making you money, it almost certainly isn't.
    
   
2. Calculate your acquisition cost per customer for each of your marketing methods. Look at leads created, leads converted and the cost of converting as well as attracting the prospective customers.
    
   
3. Calculate your average profit for first transactions, first year and lifetime relationships.
    
   
4. Decide your own acceptable marketing payback period. Is it first transaction only or expected profits over the first three months or longer? It depends on how much you need to generate immediate cash.
    
   
5. Compare your marketing results with your marketing payback and reduce/stop marketing that does not meet your criteria and do more marketing where your payback is bettered.
    
   
6. Continually improve your marketing by controlled testing - better headlines, stronger offers, more compelling copy and bullet point benefits and all the other proven techniques - and measuring the results against your control. Make the changes one at a time and don't stop using a marketing method that works.

How Will Paybacks Change During The Recession?

The recession creates a period of change so the old rules of thumb no longer apply. 
 
Depending on what you sell, customers may be much less willing to buy. Look at the problems the car industry is having at the moment with car sales down by around 35% in the UK.

Competitors actions will change. If some stop marketing to save money then you can expect your activities to have more success but if your competitors triple their marketing (because that's what businesses who thrive in the recession do), then it will be more difficult depending on the effectiveness of their marketing.

If prices are being driven down and the product is turning into a commodity, then margins will be squeezed and payback periods will extend and especially if usage is down as well.
 
Conclusion: The Market Will Tell You

There is no hard and fast rule about whether you should increase or decrease your marketing in a recession.

Marketing that gives you the right payback or better needs to be continued.

Marketing that doesn't pay its way needs to be stopped immediately.   

Wake Up Productive

I heard overnight that Eben Pagan is opening up his time management program - Wake Up Productive - for one day - January 5th 2009.

Wake Up Productive

I am currently on this program from the late October intake and whilst I am not ready to write my full review, I can tell you that it is life changing stuff provided you take action.

This is by no means your average time management course which you may have tried and found that it has no effect. My advice is to give it a go by at least watching the free video you get when you sign up.                

Excellent Customer Service Is Even More Important In Tough Times

My Business Coaching Blog came a long way in 2008 but one of my regrets is that I did not focus enough on on bringing you articles about creating excellent customer service.

All my ideas for increasing your sales to and through your existing customers rely on you delivering the excellent customer service your customers can depend on and confidently build into their own business strategies.

And when it comes to customer service, one customer service guru stands out and that is Ron Kaufman.

Here is an article that I publish with his permission.

In Challenging Times, Service Matters Most!

As the wind of economic cycles blows hard, some businesses try to contain costs by cutting corners on customer service. This is exactly the wrong thing to do, because service matters now more than ever. Here’s why:

• A. When people buy during an economic downturn they are extremely conscious of the hard-earned money that they spend. Customers want more attention, more appreciation and more recognition when making their purchases with you, not less.

• B. Customers want to be sure they get maximum value for the money they spend. They want assistance, education, training, installation, modifications and support. The basic product may remain the same, but they want more service.

• C. Customers want firmer guarantees that their purchase was the right thing to do. In good times, a single bad purchase can be quickly overlooked or forgotten, but in tough times, every expenditure is scrutinized. Provide the assurance your customers seek with generous service guarantees, regular follow-up and speedy follow-through on all queries and complaints.

• D. In difficult economic times, people spend less time traveling and ‘wining and dining’, and more time carefully shopping for each and every purchase. Giving great service enhances the customer’s shopping experience and boosts your own company’s image.
   
  When times are good, people move fast and sometimes don’t notice your efforts. In tougher times, people move more cautiously and notice every extra effort you make.

• E. When money is tight, many people experience a sense of lower self-esteem. When they get good service from your business, it boosts their self-image. And when they feel good about themselves, they feel good about you. And when they feel good about you, they buy.

• F. In tough times, people talk more with each other about saving money and getting good value. Positive word-of-mouth is a powerful force at any time. In difficult times, even more ears will be listening. Be sure the words spoken about your business are good ones!

The Secrets of Superior Service

Giving good service in tough times makes good business sense. But how do you actually achieve it? Here are eight proven principles you can use. I call them The Secrets of Superior Service.

• 1. Understand how your customers’ expectations are rising and changing over time.
   
  What was good enough last year may not be good enough now. Use customer surveys, interviews and focus groups to understand what your customers really want, what they value and what they believe they are getting (or not getting) from your business.

• 2. Use quality service to differentiate your business from your competition.
  
  Your products may be reliable and up-to-date – but your competitors’ goods are, too. Your delivery systems may be fast and user-friendly, but so are your competitors’!
   
  You can make a more lasting difference by providing personalized, responsive and extra-mile service that stands out in a unique way your customers will appreciate – and remember.

• 3. Set and achieve high service standards.
   
  You can go beyond basic and expected levels of service to provide your customers with desired and even surprising service interactions. Determine the standard for service in your industry, and then find a way to go beyond it. Give more choice than ‘the usual’, be more flexible than ‘normal’, be faster than ‘the average’, and extend a better warranty than all the others.
  
  Your customers will notice your higher standards. But eventually those standards will be copied by your competitors, too. So don’t slow down. Keep stepping up!

• 4. Learn to manage your customers’ expectations.
   
  You can’t always give customers everything their hearts desire. Sometimes you need to bring their expectations into line with what you know you can deliver.
   
  The best way to do this is by first building a reputation for making and keeping clear promises. Once you have established a base of trust and good reputation, you only need to ask your customers for their patience in the rare instances when you cannot meet their first requests. Nine times out of ten they will extend the understanding and the leeway that you need.
  
  The second way to manage customers’ expectations is to ‘under promise, then over deliver’. Here’s an example: you know your customer wants something done fast. You know it will take an hour to complete. Don’t tell your customer it will take an hour. Instead, let them know you will rush on their behalf, but promise a 90-minute timeframe.
  
  Then, when you finish in just one hour (as you knew you would all along), your customer will be delighted to find that you finished the job ‘so quickly’. That’s ‘under promise, then over deliver’.

• 5. Bounce back with effective service recovery.
   
  Sometimes things do go wrong. When it happens to your customers, do everything you can to set things right. Fix the problem and show sincere concern for any discomfort, frustration or inconvenience. Then do a little bit more by giving your customer something positive to remember – a token of goodwill, a gift of appreciation, a discount on future orders, an upgrade to a higher class of product.
   
  This is not the time to assign blame for what went wrong or to calculate the costs of repair. Restoring customer goodwill is worth the price in positive word-of-mouth and new business.

• 6. Appreciate your complaining customers.
   
  Customers with complaints can be your best allies in building and improving your business. They point out where your system is faulty or your procedures are weak and problematic. They show where your products or services are below expectations. They point out areas where your competitors are getting ahead or where your staff is falling behind. These are the same insights and conclusions companies pay consultants to provide. But a complainer gives them to you free!
  
  And remember, for every person who complains, there are many more who don’t bother to tell you. The others just take their business elsewhere...and speak badly about you. At least the complainer gives you a chance to reply and set things right.

• 7. Take personal responsibility.
   
  In many organizations, people are quick to blame others for problems or difficulties at work: managers blame staff, staff blame managers, Engineering blames Sales, Sales blames Marketing and everyone blames Finance. This does not help. In fact, all the finger-pointing make things much worse.
  
  Blaming yourself doesn’t work, either. No matter how many mistakes you may have made, tomorrow is another chance to do better. You need high self-esteem to give good service. Feeling ashamed doesn’t help.
   
  It doesn’t make sense to make excuses and blame the computers, the system or the budget, either. This kind of justification only prolongs the pain before the necessary changes can take place.
  
  The most reliable way to bring about constructive change in your organization is to take personal responsibility and help make good things happen. When you see something that needs to be done, do it. If you see something that needs to be done in another department, recommend it. Be the person who makes suggestions, proposes new ideas and volunteers to help on problem solving teams, projects and solutions.

• 8. See the world from each customer’s point of view.
   
  We often get so caught up in our own world that we lose sight of what our customers actually experience.
   
  Make time to stand on the other side of the counter or listen on the other end of the phone. Be a ‘mystery shopper’ at your own place of business. Or become a customer of your best competition. What you notice when you look from the ‘other side’ is what your customers experience every day.

Finally, always remember that service is the currency that keeps our economy moving. I serve you in one business, you serve me in another. When either of us improves, the economy gets a little better. When both of us improve, people are sure to take notice. When everyone improves, the whole world grows stronger and closer together.

The time to make it happen is now.

Copyright, Ron Kaufman. Used with permission.
Ron Kaufman is an internationally acclaimed customer service training educator for quality service. He is author of the bestselling series "UP Your Service!" and founder of "UP Your Service College". To enjoy more customer service training articles, visit www.RonKaufman.com and www.UpYourService.com 

Thanks Ron. This is a great start to 2009 and I like the idea that better customer service makes the world a better place.

I know that businesses have been encouraged to provide excellent customer service for many years. In fact it is such an obvious thing to do that it often gets overlooked and replaced by making the business convenient for the owner or employees.

If you don't believe me, just take a look at the service you receive when you buy, both business to consumer and business to business. In my experience much of it is unsatisfactory or at least provides big opportunities for customer service improvement.

As Ron says, your buyers are much more cautious in tough times so they will notice the little things your business and your competitors do - or don't do.

This is your time to stand out by providing excellent customer service and I will be bring you more customer service ideas from Ron Kaufman but this article is a very comprehensive introduction.

Marketing Professional Services - Book Yourself Solid

Michael Port, author of one of my favourite books "Book Yourself Solid" has announced that he is starting his next intensive small business coaching program based on the book on January 20th.

Well worth taking a good look at this program if you market professional services and it is a chance to be coached by Michael Port himself in group sessions.

Michael Port Book Yourself Solid Business Coaching Program

There are some early bird discounts but you may prefer to buy the book first and then decide that you want or need coaching support.

Because of Michael's latest books and the development of his certified Book Yourself Solid Coaching program, he only did one of these courses in 2008 and it might be the same in 2009.

Of course if you are in the UK, you may want to try out my Guerrilla Marketing one to one coaching program instead. It works well for professional service providers or even take some of the relevant modules in my Hidden Profit Coaching.  

Spike Humer Business Turnaround Model

Some months ago I reviewed the Seven Day Business Turnaround Kit from  Mark Joyner and Simpleology.

One of the best videos from the turnaround experts Mark Joyner brought in was Spike Humer and he delivered this exceptional practical advice for any business - no matter what size - on this business turnaround 14 minute video.

   

Overall I thought the 7 Day Business Turnaround program was very good for generating turnaround through information marketing over the Internet.

I believe that most businesses have opportunities in this area because of the impact that "marketing as education" can have but I also know that many businesses will reject the idea, especially those without significant interest in Internet marketing.

The problem is that if you are in your last few days, you have very little else you can do. The Internet gives entrepreneurs with knowledge to create very quick gains provided they have an opportunity mindset and take action.

Jay Abraham Joint Venture Power Partnering Summit

Jay Abraham's COO, Spike Humer has posted on of his presentations from the Joint Venture Power Partnering Summit in October 2008.

In fact Spike addresses the issue of presentation, persuasion and negotiation and whilst it is notionally about your discussions with joint venture partners, the advice given is relevant to any situation where you are trying to persuade someone to share your perspective and take the action you want.

This video is 28 minutes long and highly recommended.

If you enjoy this video, then I know you will also enjoy 17 Stratagems of Success featuring Spike Humer at the Jay Abraham Brain Trust / Reunion Event

Why I Want A Big Back End For Christmas

Question: What is the most important secret to making more money in your business? Answer: You need a big back end.

Let me explain.

The front end in marketing is the sales and profit you make on the first transaction you sell to a new customer and it has to fund all your customer acquisition costs.

The back end in marketing is the sales and profit you make on all the following transactions you sell to that customer plus any extra revenue and profit that comes from sustaining the relationship through referrals and third party endorsements.

To make the difference to clear to you, let's work through an example.

Front End Marketing

You have a product that you sell for £1,000 and you make 40% margin on it. So each extra sale creates a profit of £400.

But it costs you to attract and convert customers.

So you add up all your sales and marketing costs and divide it by the number of customers you have won in a period to calculate the average acquisition cost of a customer.

It works out at £150.

So when you deduct your customer acquisition cost from your profit on the front end sale, you make a net profit of £250 for every new customer who appears.

If you attract 100 customers, then you make £25,000 before your general and administration overheads.

That's nice but it is the hard way to grow your business because advertising, marketing and promotion - even with the best tactics and copywriting - can be risky.

Back End Marketing 

But see how exiting it is if you introduce a back end to your business, either by offering your customer the chance to buy the same item again or by introducing them to extra services you can provide.

Some businesses are needs that naturally recur e.g. hair dressers, supermarkets while in other businesses you may need to be more imaginative. If you are a plumber and you provide a house with a new central heating system, you have the option of offering annual servicing, troubleshooting repairs and extra one-off purchases like a new bathroom.

So let's just say that you can make just one extra sale to your customer each year on average at the same £1,000 value at 40% margin.

This next transaction adds another £400 profit but you don't have the huge acquisition costs.

It is often said that it costs between 500% and 1,000% more to sell to a new customer than an existing customer.

So instead of thinking about £150 customer acquisition costs, we have say 20% or £30 as a transaction selling cost.

That means that this second transaction nets out at £370.

Or to put it another way, you have increased your profit per customer from £250 to £620 (250 plus 370) - a massive increase of 148%.

But your back end marketing doesn't stop there.

What about if the buy two items in the second year as well repeating the back end arithmetic.

That's another 2 times £370 profit or £740.

And takes your customer lifetime value of profit to £1,360 (620 plus 740).

So you are still marketing to your prospects and bringing in new businesses into the pipeline but you also focus on the needs of your existing customers to continually buy services.

If You Already Have Some Back End Sales

First of all, that is great because you know the idea works.

Customers generally like to buy from businesses they have dealt with in the past and been treated well.

But don't think "I already know and do this."

Ask yourself:

1. What proportion of your customers come back and buy again? And most importantly could it be higher if you started a back end marketing campaign?
    
   
2. Have you focused on developing back end products? Are there more opportunities to offer and promote additional products and services you can offer?
   

Can you see how your business has the opportunity for hidden profit, sitting in your customer list?

Turn Your Marketing Funnel Into A Marketing Hourglass

Are you familiar with the idea of a marketing funnel that starts with the suspects and turns a proportion into prospects and then customers?

If so, then I think that you will find the Marketing Hourglass concept that I have borrowed from John Jantsch and Duct Tape Marketing. I would have liked John to go further with the concept but I believe that it is so right to see the creation of the customer as the end of your customer acquisition process but also the start of a brand new customer extension process.

This is what I mean by hidden profit. You have done the hard work and attracted customers to you but too often, huge amounts of money are lost because the business is so pre-occupied bringing people into the top of the funnel that they don't see the profit opportunities in the second part of the marketing hourglass open up.

Still it does give me an area to specialise.  

Special Hidden Profit Webinars

Don't miss the chance to learn from some of the world's leading experts (and me) in finding hidden profits in a series of webinars starting on January 15th 2009. See Hidden Profit Webinars for more details.

So while I want a big back end for Christmas, I also wish you one too. Join me on these calls and discover how you can make more profit from your existing business. 

Social Networking For Business: Mistakes To Avoid

I believe an essential key to business is helping people to know, like and trust you and that's why networking is so important. But networking can now be face to face or online in all the different social networking sites.

So how can you use social networking for business - and in particular, how can you avoid making social networking mistakes which will stop you achieving what you want?

This is not a question I can answer but I know a man who can. Below is an article from Rick Itzkowich, VP Marketing Productive Leaning & Leisure and author of the Social Networking For Newbies Blog.

5 Deadly Mistakes You Can't Afford to Make While Social Networking

If you haven't received the results that you hoped for after joining and participating in various Social Networking (SN) sites, there's a good possibility it's because you've made one or more of these mistakes. I've made everyone of these mistakes and paid the price. On the flip side, I've also corrected these mistakes and the results have been phenomenal.

Mistake # 1: Not having the right mindset.

If you go into SN with a sales mentality, you will fail. Sales is about closing transactions. Networking is about building relationships. There's a time where selling is appropriate in a relationship. However nothing damages a relationship faster than selling without first building a relationship.

The Referral Institute™ teaches the VCP model. VCP stands for Visibility - Credibility - Profitability. In simple terms, this means that people need to first know who you are. Then they need to trust you. It's only when they both know and trust you that they comfortably buy from you. Trying to move from visibility to profitability without earning credibility doesn't work.

To correct Mistake #1 shift your focus from selling to building relationships.

Mistake #2: Not having a strategy.

Going into the SN arena without having a strategy is like going to the grocery store without a list, and to make matters even worse, going when you're starving. Odds are you will forget to buy some of the items you truly needed, and you will bring home some junk instead.

Using the VCP model, you must have a strategy to increase both your visibility and your credibility. When you accomplish this, generating business will be much easier. So what would be an example of a strategy to build your visibility? At Biznik.com you can easily do this by writing articles, hosting events, posting comments, answering questions, welcoming people and more. It means getting involved in the SN community. The more involved you are, the more visibility you gain.

One easy way to build credibility is to have people who already trust you give you a testimonial or third party endorsement. Look for people you know who are already members on the site and ask them for a testimonial. Better yet, offer a testimonial for them first. If you don't have anyone you know on the network, invite them to join. Once you start building your relationships with others on the network, they too will be able to give you testimonials.

To correct Mistake #2 come up with a strategic plan to gain visibility and credibility.

Mistake #3: Not having patience.

We live in a fast-paced society--one with very little patience. We eat fast food. We drive fast cars. We multitask. We all have been conditioned to expect immediate results. So we usually give our social networking a few weeks or months. If we don't get any sales, we quit.

Steven Covey tells a story about what it takes for the bamboo plant to grow. He states that there are certain types of bamboo plants that take up to four years before they come out of the ground. Prior to them coming out of the ground, the plants are growing by spreading their roots underground. If you didn't know this, it looks like nothing is happening. On the other hand, once they break ground, they surge upward from 12-36 inches in a 24-hour period!

Networking is very similar to this. I'm not saying that it will take four years before you see results, but it certainly won't be immediate. So building your visibility and your credibility takes time. It is like the bamboo plant spreading its roots. Eventually you will start generating business. You just have to be patient.

To correct Mistake #3 give yourself twice as much time as you think you will need before you evaluate whether your efforts are paying off.

Mistake #4: Not having any free products to give away.

My wife is from Sweden. In her country it's very common for people who visit other people's homes to always bring a gift. It's not about bringing a gift on a special occasion. It's about the principle of gratitude. If someone is inviting you to their home, you express your gratitude by bringing a gift.

In networking this principle is very powerful as well. Showing someone gratitude and appreciation is a great way to build the relationship. However, nowadays free does not carry the punch that it once did. This is because very seldom is "free" truly free. My dad jokes that "free" is the most expensive word in the dictionary. So offering a free gift is often viewed with suspicion - especially when the gift is connected with the product or service you are selling.

On the other hand, if the intent behind the gift is to truly express appreciation for connecting, it brings you closer to the other person. When it takes on a "pay it forward" approach, the results can be remarkable.

One of the best tactics you can use in your SN strategy is to find or develop a gift you can offer to prospects for free—one that's not directly related to what you sell. After trying different things myself, I finally created a product that accomplished the above goal. Since I've incorporated this product, I've been generating 8-10 new qualified prospects every week.

To correct Mistake #4 develop a product or service that has value in the eyes of your prospects. Make sure that it's not related to your core offering and give it away for free. If you can't come up with a product of your own, or you just don't feel like reinventing the wheel, please contact me. I'll be glad to talk about how you can use my product.

Mistake #5: Focusing on numbers vs. relationships.

Joining many sites and adding lots of friends or people to your network is not a strategy. It may be good for your ego, but it will not result in you doing business. Remember networking is about relationships--not about numbers.

You're better off building a smaller network of people with whom you have a relationship, than a larger group of people you don't know or interact with. Remember in order to gain visibility, you will have to get involved and participate in the community.

To correct mistake #5 limit the number of sites you belong to. Ideally choose no more than three or four -- depending on the amount of time that you are willing to devote to your overall strategy. Deeper is better than wider. Try a site, get involved and see how you like it. Most networking sites give you access to a free version so that you can try it out before you commit money and start paying for additional features. New Social Networking sites are being added every week. Don't go chasing for the "latest, greatest" or the one that your friend invited you to. Stick to a few and work them. If one doesn't work, then go ahead and add a new one.

Rick Itzkowich

The Social Networking For Newbies blog gives the strategies, tools and tactics to help the people just getting started with Social Networking  

Thanks Rick.

Even if you don't take part in social networking sites like Facebook, Twitter and Ecademy - the main three I use - much of the advice applies to face to face networking as well. In fact the people who seem to get the best out of Ecademy combine online and offline networking to strengthen their relationships.

Social networking has been very fashionably in 2008 and it is likely to become even more so in 2009.

But anyone who has tried it, knows that social networking can be extremely time consuming and often unproductive.

So once again you need to give thought to some upfront planning to work out what you want to achieve from social networking and how you are going to get it.

Scott Hallman Webinar - Increase Profits By At Least $5000

Join me on a live webinar call January 15th 2009 at 6:00 pm GMT (1:00 pm EST. 10:00 am PST) with a world’s leading entrepreneur and small business coach, Scott Hallman.

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Plus, he is going to share his inside method for converting high paying clients, and show you how to modify this technique to get more customers, that pay you more money.

Scott's companies have twice been named to the INC 500 list of the fastest growing private companies in America (#59 and #106), and he (and his co-founder)  also built another company to a $1 billion market value in just 21 months!

During this business growth training webinar, Scott will provide specific profit generation strategies to help you optimize your profits.

Best of all, you'll learn HOW to put at least $5,000 in your pocket just from what you will learn in this one hour call!

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Register for this exclusive profit generating event and Scott will gift you, just for attending the call, his powerful client generation referral audio workshop called, “The 16 Reasons Referral Systems Fail – How to Finally Get, Convert, and Keep Referral Clients ($97 value).
 

• Learn How to Get A Consistent Flood of Referrals (without embarrassment)
   
  
• Learn How to Convert These Referrals to Clients Systematically
   
• Learn How to Maximize the Value of These Clients Effortlessly

In working with thousands of business owners, Scott has identified 16 common mistakes that keep referral programs from being successful.  Scott originally created this only for his $30,000+ retainer clients…and now you get access to the complete workshop FREE…just for attending the Webinar.

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Let's face it: there's only one guaranteed way to succeed in business, and that is to find someone who has successfully done what you want to do and have them teach you the exact same techniques that helped them achieve massive profit and growth breakthroughs in their business. Scott Hallman is a seasoned coach who routinely gets paid $1,250 an hour (and clients must commit to a full year!).

If you have ever dreamed of taking your business to the next level, and building upon that success year after year - predictably - then join me on this webinar with Scott  Hallman on January 15th 2009 at 6:00 pm GMT (1:00 pm EST. 10:00 am PST)

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Cheers,

Paul Simister
 
P.S. Scott will share real world examples to help you to be able to instantly apply what you learn during the call.  So come ready to take action notes and learn about how to get super-low cost 'mentoring' on demand. Imagine being able to be guided by a two-time INC 500 CEO on the step-by-step procedures for implementing your greatest profit opportunities!

To meet my obligation to Scott I need to have at least 100 people registered for the call.