If you want to raise capital,
then you need a professional
business plan. This video
shows you how to finish your
business plan in 1 day.
to watch the video.
"The TRUTH About
Most entrepreneurs fail to raise
venture capital because they
make a really BIG mistake when
approaching investors. And on
the other hand, the entrepreneurs
who get funding all have one thing
in common. What makes the difference?
to watch the video.
The Internet has created great
opportunities for entrepreneurs.
Most recently, a new online funding
phenomenon allows you to quickly
raise money to start your business.
to watch the video.
"Barking orders" and other forms of
intimidating followers to get things
done just doesn't work any more.
So how do you lead your company
to success in the 21st century?
to watch the video.
Written by Dave Lavinsky on Tuesday, June 12, 2012
In the great movie "A Bronx Tale," protégé Colagero asks the gang leader Sonny, "Is it better to be loved or feared?" Sonny replies, "That's a good question. It's nice to be both but it's very difficult. But if I had my choice, I'd rather be feared. Fear lasts longer than love."
When running a business, some entrepreneurs don't know how to act. Some think they get the best results when they are feared. Others want to be loved, but are concerned with being seen and/or becoming a pushover.
In either case, including variations of each (e.g., you desire to be slightly feared), entrepreneurs who run companies must mentor their employees in order to get them to excel.
Typically, when people think of mentoring, two things come to mind-someone outside your company showing you the ropes, or some kind of apprenticeship program. However, I believe you can and should be a mentor and friend to your own employees and team, and not just a boss. This article will show you what mentoring is, why it works, and who in your organization you should spend time mentoring.
My favorite definition of mentoring was created by Bozeman and Feeney, who defined it as "a process for the informal transmission of knowledge, social capital, and the psychosocial support perceived by the recipient as relevant to work, career, or professional development...
...Mentoring entails informal communication, usually face-to-face and during a sustained period of time, between a person who is perceived to have greater relevant knowledge, wisdom, or experience (the mentor) and a person who is perceived to have less (the protégé)."
So How Do I Mentor My Team Members?
A leader who is also a mentor cares about their protégés and teammates, and approaches work from the eyes of a servant, not a commander. They know that educating and improving the skills of individual team members will help them and their company be happier, more productive, and more successful.
Mentoring also adds a degree of friendship and affection to the workplace. This makes work a lot more pleasant for all employees, and also makes for a work environment that is more conducive to learning, admitting mistakes, and personal growth.
To mentor someone, you should invest time with them one-on-one in order to:
1) Teach them their job position's skills
2) Assess what they need to improve and measure their growth
3) Infuse leadership in them, so they are more empowered to solve
problems and figure things out on their own without waiting for your answers
Why the Need for Mentoring?
Mentoring has been shown to have a positive effect on one's career. One study by Gerard Roche (1979) found that mentored employees were more satisfied with their work and careers than their non-mentored counterparts.
It has also been found that mentoring facilitates the socialization of new hires into the organization, reduces turnover, minimizes mid-career adjustments, and enhances the transfer of the entrepreneur or business owner's vision, knowledge, and values.
These are the exact things you want - better, happier, more skilled employees who are committed to the vision of your company! This is why mentoring is such a high-leverage practice to include in your leadership activities.
Who Should be Mentored?
The traditional wisdom is to invest the most support and training in your best and brightest employees. But Delong & Vijayaraghavan (2003) reported that it's a wiser move to support the large middle-base (your team's B-players):
"Like all prize-winning supporting actors, B-players bring depth and stability to the companies they work for, slowly but surely improving both corporate performance and organizational resilience... They will never garner the most revenue or the biggest clients, but they also will be less likely to embarrass the company or flunk out... these players inevitably end up being the backbone of the organization."
This makes sense to me, however, I prefer to invest more in the hiring process so you only hire "A" players. Then, you can mentor your "A" players and turn them into "A+" players that allow you to dominate your market.
As the leader of your business, you are more than just the boss, the visionary, the founder, and CEO. You also play the role of coach and mentor for your team. Because you cannot mentor everyone in your company, particularly as it grows, choose 5 or so employees that you can comfortably mentor. And then have them mentor 5 employees beneath them. Etc.
At times in your business, you'll have to be a player yourself in order to score points, win the game, and get results. But over time, you'll see your time allocation changing to include less time spent "playing," and more time spent coaching and mentoring your players to perform under your direction.
Written by Jay Turo on Monday, June 11, 2012
The recent defeat of the recall effort to oust Wisconsin Governor Scott Walker should hearten those that wish to see governments at all levels benefit from the efficiencies and accountabilities that businesses utilize every day to innovate, execute, and thrive.
While attaining these disciplines is painful at times for sure – think about how hard it is to lose weight or to stick to a workout regimen and multiply that challenge a thousandfold for organizations as complex and multi-stakeholdered as modern government – doing so is no longer an option given how intense and global the competition is for cities, states, and yes even countries to retain and attract the people and capital that pay the taxes that fund their governments.
This competition is fought on fronts including the quality of public education, and the simplicity, fairness, and reasonableness of regulatory and tax policies.
Now the really GREAT thing is that on all of these fronts, we are seeing agreement across the political spectrum that efficiency best practices ported from the world of business are no longer ideological choices, but just plain, modern common sense.
You see, because just like in the technology industry where decades of high efficiency competition have brought the cost of computers down over 99% in real terms, so too are market forces working their “tough love” magic on governmental effectiveness.
So ignore the side show that is politics as it is presented in our Drudge Report and our Huffington Post age.
The real game in government and politics these days is happening well below the radar.
It is happening in the little innovations, the little loosenings, little efficiencies that politicians and technocrats are implementing daily.
And it doesn’t matter whether they want to make these changes or not.
They have to because access to the spigot of deficit financing – after so many years of profligacy – has been turned off the world over.
They have to because of ongoing demographic changes – where as societies get wealthier they face worsening ratios of younger “inputters” into their tax systems.
And they HAVE to because if they don't people and capital will just vote with their feet and leave.
To less regulatory onerous pastures, to lower tax seas.
To places that just work better.
This is great cause for cheer and enthusiasm for entrepreneurs and executives looking to start and grow businesses.
Why? Because their partners in government – and whatever one’s political persuasion government is and will remain a key partner that must work well if business is to thrive (see Greece, Argentina, et al.) – have to and are working better.
The process is slow. It is painful. It is cynical-inducing.
But it is happening.
Hooray, Hooray, Hooray.
Written by Dave Lavinsky on Tuesday, June 5, 2012
Hopefully you collect your customers' (and prospective customers') email address so you can send them tips, announcements, and special offers. Because email marketing is a highly effective way to stay in touch with your customers and generate revenues.
Depending on what emails you send, they can lead to customers calling you, buying something online from you, walking into your store, telling a friend about you, becoming more interested in purchasing from you, etc.
But, most entrepreneurs don't achieve these results. Why? Because they don't methodically track and improve their email marketing tactics.
Rather, to succeed, you must track certain key metrics and modify your strategies based on what you learn. Fortunately, tracking these metrics is simple using most email delivery/management services like ConstantContact, iContact, aWeber, etc. These services all have a tracking section where you can look at previous emails to see their delivery rates, open rates, and clickthrough rates.
Here are certain elements you must track.
You might think that if you have 1,000 people's email addresses and press "Send," that 1,000 emails will all arrive in the Inboxes of those people. Unfortunately, it doesn't happen that way. Emails don't all get delivered because they get sent to Spam folders on accident, get lost in transit, and for other reasons.
Typically, 5-10% of your emails won't get delivered. To improve deliverability, make sure people get removed quickly (or automatically) when they unsubscribe from your list. Also, don't send out irrelevant emails. Both high unsubscribe and low open rates can hurt your email delivery through certain email providers that your subscribers use (e.g., Gmail, Yahoo mail, etc.).
Your email management service will tell you how many emails were opened, and what percentage of the total delivered emails that number represents.
Your open rate can vary a lot-mostly depending on the subject line. That's what people read in their inbox to decide if they want to open the email or not. You've only got about 55 characters (depending on the recipient's email provider), so choose your words carefully and persuasively.
If you send out 3 emails to promote a product of yours, and notice that more people opened one of the three than the others, it suggests that the headline was more effective. This would be a subject line to reuse in the future, or add as an autoresponder message that every new subscriber receives.
Or use the same language in your subject lines as in ads you run to generate leads. After all, you know it already gets the attention and interest of people in your target market.
Importantly, if you see your email open rates go down over time, it means you are not providing your subscribers with value in your emails. And as a result, people stop opening them. The ideal is for subscribers to be excited to open your emails each time they arrive.
Your email management service will also show you how many recipients clicked on a link (or links) that you placed in the email, and what percentage of opens and total recipients this represents (this "click" rate is known as the clickthrough rate).
You want to know your total clicks so you can estimate in advance how much traffic you'll get to the webpage you're promoting. And the percentage of people who click after opening is the main indicator of how persuasive the language was in your email body.
Another idea: Try sending an email with the same subject line to three groups of recipients, but use a different email body in each one. The open rates will probably be the same (because you used the same subject line), but the clickthrough rates will give you an apples-to-apples comparison of which email copy was more effective. Cool, huh?
When people click on your link, they will all visit the webpage to which you chose for them to be directed. What do you want to happen once they get there? Do you want them to read a blog post? Make a comment? Share on Facebook? Buy something?
Whatever you choose, there's a metric involved and a way to track it. You can use Google Analytics to see how much time visitors spent on your page (hopefully several minutes if you want them to read a post). You can count the comments on your blog. Your Facebook "share" button will tell you how many people shared your page. And your shopping cart service will tell you how many people made a purchase from that page. And if your goal was to get phone calls coming in, you can count the phone calls and ask what prompted them to call.
So know what actions to measure, because that's the whole purpose of sending your customers or readers email in the first place.
Importantly, if your goal was to generate sales, then you'll have a dollar amount for the revenue created as a result of sending out your email.
If you email 1,000 people and make $100...congratulations! You have revenue of $0.10 per subscriber. Now imagine if you had 10,000 and ask yourself if it's worth spending a few hundred or thousand dollars on building your email list.
In addition to these metrics, I track:
- New subscribers: how many new people have joined my email list
- Unsubscribes: how many people unsubscribed to my list (and then I look at the recent emails I've sent to see what may have caused this)
- Email revenue per subscriber per month: this is an important metric. If you know, for example, that the average email subscriber is worth $1 per month to you, and the average subscriber stays for 12 months, then you can consider marketing tactics to build your email list, and perhaps pay $1, $2 or even $6 or more per subscriber since you know you'll earn a good return on this investment.
Email marketing is a highly effective marketing tactic. But, you must track your results carefully and improve based on this market feedback.
Suggested Resource: Want to learn my complete strategy for methodically maximizing the success of your email marketing, plus get more online traffic, leads, sales and profits? Then check out my Ultimate Internet Marketing System.
Written by Jay Turo on Monday, June 4, 2012
Why the full future for Facebook and the performance of its stock is yet to be written, as of today it is selling at prices significantly less than at which it traded on popular, private secondary markets like SharesPost and Second Market as recently as three months ago.
This startling fact is just the latest example of the "existential" questions that have been raised for quite some time now regarding the whole purpose of traditional public equity markets for investors and companies alike.
For growing companies as recently as 15 years ago, whether or not to go public was a pretty easy decision: if you could go public, you did go public.
Why? Well, for starters, it was usually the purest and best way to raise growth capital.
Back then, equity finance was dominated by fundamental, long-term investors that had strong biases toward the clean and easy pricing of public stocks and the uniform reporting and disclosure requirements imposed by the major exchanges.
So lots of companies went public - 1,272 of them from 1990 to 1996 - and Wall Street was very much about "long" promotion of companies' growth potential and as "analog" distributors of their stocks.
Compare that to today's financial markets.
Fast, and high-volume computerized trading combined with the utilization of extremely high leverage has made Wall Street trading profits to be many multiples greater than those generated via traditional underwriting, promotion, and distribution of long positions in stocks.
To this, add-on ongoing onerous regulatory and civil litigation bias against stock promotion and distribution and what we have now is the double whammy of traditional equity underwriting not just being unprofitable, but highly risky as well.
So it should be no surprise that not a lot of companies go public anymore.
And when they do, the performance of their stocks has gotten mostly caught up in the malaise that that has seen the major indices trading at levels basically where they were 12 to 14 years ago.
Now, if the public markets are not good for companies nor for investors, then what really are they good for?
Well, the elephant in the room answer to this question is that those with big stakes in the existing order - i.e. Wall Street and the business media built around it - don't want anyone to know is not a whole heck of a lot.
It is not too much of a stretch to say that a good analogy for today’s public markets infrastructure is that of travel agencies in the 1990s.
As Internet-based travel bookings began to take hold and become more and more efficient and easy-to-use, travel buyers and sellers just one day looked up and said why do we need these guys anymore?
Now Wall Street and the business media that feeds off of it are a lot more powerful than travel agents ever were, but the tides of history and technological change are similarly not on their side.
While the Facebook IPO debacle is an extremely high profile example of the hollowness of their current value proposition, smart investors and companies seeking liquidity and growth capital have been voting with their feet for many years now.
They have been eschewing the public markets for liquidity via acquisition and for raising growth capital via private equity, hedge funds, and global funding sources.
And sophisticated buyers and sellers are increasingly getting together on the new, clean, and far less friction - filled private stock secondary exchanges like SharesPost and Second Market.
Look in the coming months and years for smart investors and entrepreneurs to do more and more of the same.
And the Facebook IPO debacle will only accelerate this sometimes disturbing but ultimately inevitable and yes welcome trend.
Written by Dave Lavinsky on Thursday, May 31, 2012
There are some marketing methods that take continual effort and persistence in order to pay off someday. This is NOT one of those. And for those of you without a website or for whom internet marketing can seem overwhelming at times...you don't even need a website to use this lead generation method.
I want to give you a quick tip today on listing your website (or just your contact information) in business directories so that people can find you online in ways they otherwise couldn't.
I'm not talking about ranking your site in the search engines, or paying for online ads. I'm talking about going to a website like Yelp.com, Manta.com, MerchantCircle.com, or other sites that list businesses by category with their contact information.
Not everyone searching for something on the internet is necessarily typing in a search for it in Google, Yahoo, or Bing. Sometimes people go to these directory sites and scan for local businesses there. Your goal is for them to find you!
And sometimes the pages about you in a business directory will come up in search results when people are searching for your keywords.
Not as good as having your actual website in the first page of results, I know, but getting your name and contact info in front of people's eyes is definitely a good thing.
Plus, being listed in an official directory can add credibility to your company in the same way that being listed in the yellow pages can set a local business apart from fly-by-night operations.
So without any further ado, here's the quick-and-dirty way to help prospective customers find you through this unique online marketing method:
Step #1: Determine your outcome
You've got to begin with the end in mind. Why are you going to list your business profile on these websites-for backlinks? Or do you want direct traffic from the sites' visitors?
Let me explain...If you list your business information on a directory (I'll describe how in a minute), you will be asked at some point to type in your website address (URL).
Your goal might be to have people find you in the directory and then visit your site at some special page for visitors (called your "money" page, which could be your homepage, your best-selling product's page, or a page designed to collect email addresses or elicit a phone call). If this is the case, then just enter in the URL of that specific page.
But, if you're listing your business in directories to get links to your site to rank higher in the search engines, then you would want to use the keyword you're trying to rank for in the business profile, the tags, and in the link to your website.
This latter method is done assuming you have a search engine optimization (SEO) plan in place, and know what keywords to rank your site for, and how. I can't explain all of that here, so if you're not currently trying to do SEO, then I suggest you just enter the URL of your "money page."
Step #2: Create a list of directories to submit to
I've already done this for you. I put together the below list for you of the Top 23 business directories for local marketing. Copy them into a spreadsheet, or print them out and check them off as you list your business information on each of them.
1. Yahoo Local Listings (listings.local.yahoo.com)
2. Switchboard Super Pages
5. Bing / MSN Local Listings (bing.com/businessportal)
19. Google Profiles (profiles.google.com/me)
Step #3: Enter your business profile into each directory
The task now is to list your business' information manually into each directory, one at a time. This is as straightforward as it sounds-find each site and look for a "list your business" section on it somewhere. Then follow their directions to set up your profile.
You'll enter your business name, address, phone numbers, emails, website, business category, and can often write a description of what you do. I would store these in a Word document somewhere and paste them the same way each time.
This is very simple to do but also very tedious in large amounts, to be perfectly frank. That's why I gave you a list of the top 23 to start with (there are over 200 total). Take 5 minutes after reading this to pick a free one and list your business there.
That wasn't so bad, was it? Now, for the rest of them, you can block out some time to knock them all out in one sitting, do one a day for a month or so, or pay an assistant or contractor to set them up for you by pasting in the business information you give them.
Step #4: Track your results over a few months
When you've listed your business on these 23 directories, you can sit back and do nothing and will probably see some great results within a few months.
Or, you can add to your list of directories and list your site on more of them. It's up to you. But whatever you determined your desired outcome to be, find a way to measure it. If your goal was direct traffic, then you'll want to use Google Analytics or your website's tracking software to see how many visitors came from each of the directories over time.
If it was worth it, go get listed in some more directories. Then evaluate if they were worth it. Keep this up until you start to experience diminished returns-meaning that the directories you're getting listed on have very little traffic and are no longer worth the time to get set up on them.
But worst case, follow these directions and in a few hours, you'll be visible in 23 more high-traffic places on the web than before. No need making it more complicated than it is...just do it!
Suggested Resource: Want to learn my complete strategy for methodically maximizing your online traffic, leads, sales and profits? Then check out my Ultimate Internet Marketing System.
Written by Jay Turo on Tuesday, May 29, 2012
Unfortunately, lost in too much of the "dramatic" coverage of the Facebook IPO has been the real lessons to be learned for those interested in successful technology and growth company investing.
Part of the confusion is understandable. An IPO is a purposely dramatic event - made so by Wall Street needing both to justify fees and to "arouse" investors from their varying states of boredom, apathy, discouragement, and distraction.
And for a uniquely high profile deal like Facebook, the media also plays a less than "innocent" role.
Let's call this the Oprah Winfrey Network effect - or the idea that a good majority of the public just isn’t all that interested in hearing the "mom, peaches and cream" Mark Zuckerberg success story over and over again.
Rather, tales of trading "irregularities" and of the "little guy" being taken advantage of by “big banks” makes strangely addictive and popular TV viewing and blogging and tweeting.
And, as long as we recognize it for what it is, a classic "bread and circus" distraction, a little bit of is mostly harmless.
But, when it rises to a level where this is where most of the coverage is focused, well that is both a problem and a huge lost opportunity to communicate the essence of value and wealth creation in a capitalistic economy.
It is that the value of a company is solely based on the quality and quantity of its future growth prospects.
This is what has been playing itself in the mostly downward gyrations of Facebook stock since its IPO - sophisticated reviewers deeply questioning whether the company can fulfill on its insanely high growth expectations.
So high, in fact, that for investors in at the IPO price to realize even a market rate of return that Facebook’s future growth expectations will have to be such as to value the company greater than that of any company in the history of the world.
This, of course seems like way too tall a mountain for any company to climb, to say nothing of one majority managed and controlled by a very bright but also very inexperienced 28-year-old.
From this perspective, the central investment lesson of the Facebook IPO should be that earning alpha returns requires identifying and investing in companies that are priced below their true growth expectations.
Now, most unbiased observers - i.e. those not making markets in or commissions on trading stocks - argue almost unrefutedly that doing so is impossible in a high profile, high valuation stock like Facebook.
And that the same can be said for virtually any public company part of a major index - Dow, S&P, NASDAQ 100, etc.
Luckily however, there is now a wide, deep, and increasingly liquid world of investable companies that can be bought at prices below “true” expectations.
They exist within the legion of start-up, small business and middle market companies that make up the beating heart of entrepreneurial America.
Once, a long time ago (in terms of development, if not years) Facebook was one of these companies.
And those that invested in it then made returns beyond any and all expectations.
This, identifying and investing in companies with growth prospects to the moon but priced only to go to the corner market, is the game worth playing, isn’t it?
Hard to do? Of course.
But as the story of Facebook's dramatic rise should teach us so well, far from impossible.
Written by Dave Lavinsky on Sunday, May 27, 2012
To help you to be more productive (and stress-free) during this new era of "crowdsourcing," I put together a list of 23 websites and services that let you harness the power of the crowd, or otherwise help people more effectively work together through the Internet.
Most of these are hubs that brings a wide variety of people together from around the world with some sort of value to exchange. It's amazing to see how this has been done in matching freelance service providers, and now business funding from multiple donors online.
What's also interesting is to see how specialized a lot of these sites are. It used to be that Elance and Guru were the only two places to go to hire people. Now it seems there is a site for every specific kind of niche freelance needs, as you'll see.
So here are 23 virtual platforms and tools that are gaining in popularity and also stand out for their uniqueness, ideas they provoke, or just plain being cool.
- Elance, Guru, and Odesk - These are the 3 old favorites for finding contractors that still got it. I suggest posting a project on each of these and hiring the best from among the total responses.
- OnlineJobs.ph - A subscription site that gives you access to hiring skilled workers in the Philippines directly, often for $300-400 per month full-time!
- Amazon's Mechanical Turk - this is a marketplace where you can request tasks requiring human intelligence-tasks from getting questions answered to writing product descriptions for you.
- Fiverr - It amazes me all of the things you can get from people here for just $5. Professional voiceovers, fast logo designs, and all kinds of writing and search engine marketing gigs are available here.
- 99Designs - a great place to get multiple designs or logos made BEFORE choosing a provider to pay. This is valuable if you've ever paid someone to make a design you didn't like.
- Hatchwise - This site is nearly the same as 99Designs. I've used them both but have no real preference. Both are worth checking out.
- Etsy - this is the "Ebay" of handmade goods. Many entrepreneurs and small businesses test-market new products here first to see what sells better before investing more in promoting it elsewhere.
- Kickstarter - The largest crowdfunding platform for creative projects and endeavors. It uses an all-or-nothing funding system, where donors' funds will not be transferred until you reach your funding goal, and reimbursed if it isn't.
- IndieGogo, RocketHub, FansNextDoor - These sites operate just like Kickstarter.
- DonorsChoose - Backed by Oprah Winfrey and Stephen Colbert, this site makes it easy to donate (as little as one dollar) to any one of a long list of charities, with total transparency.
- 8-bit funding - a crowd funding site specifically for video game developers. Probably not your specialty, but see how there's a niche for everything? Google "your industry + crowdfunding" and see what's out there. Appbackr is a similar site, but is specifically for mobile phone apps.
- RetailMeNot - this is a site where you can get (or post) coupon codes for business services and supplies at significant discounts, like office supplies or even press release submission services.
- ChaCha - A question answering service you can text your questions to get answers on your mobile phone in a few minutes. It's helpful when you're super-busy and don't feel like looking something up.
- 37signals - Probably the simplest and best Customer Relations Management software I've seen for the price (Highrise) and also project management (Basecamp). With everyone on your team able to make and access notes, files, tasks, and emails about a customer or prospect, it makes life a lot easier.
- Skype - a must-download if you hire anyone overseas, for their audio or video chat feature, but also because their Instant Messaging system is just plain handy. It's nice having a record of every conversation with someone in one place, as opposed to a bunch of archived emails.
- TomsPlanner - A good way to manage projects if you're visually-oriented without having to learn to use Microsoft Project. By the way-if you're in business, you manage projects. It allows you to list action items and schedule them in order, in a printable Gantt chart that gets everyone on the same page about who does what and when.
- Quickbooks Online - If you're still using an older version of Quickbooks, consider getting the online version. The monthly cost isn't fun but it's worth it with the time you save. It imports your online bank transactions right into the register so there's not a lot of re-typing.
- SaneBox - This one will change your email experience by making it sane again-a lot faster than by organizing and checking a bunch of folders yourself. There are even timed folders like @SaneNextWeek and @SaneTomorrow that will make your emails re-appear when you're ready to deal with them.
Written by Dave Lavinsky on Friday, May 25, 2012
If you've been following the crowdfunding phenomenon, you've seen the swift rise of small businesses and entrepreneurs that have been getting funded by everyday people-through specific sites on the Internet that put it all together, like Kickstarter.com.
Instead of trying to find the one donor to contribute 100% of your funding, you can post your project online, spread the word about it, and may end up getting smaller donation amounts from tens, hundreds or even thousands of people.
The overall trend is that the people who fund or invest in crowdfunding ventures want transparency in their investments. They don't want to be far removed from their money as with stock market investing, where they have very little control, and insider information is not allowed in the decision-making process.
With a crowdfunding campaign, people of all incomes will be checking out your project and assessing whatever opportunity you offer to them in exchange. Importantly, just as you want to know the demographics of your customers, you also want to know exactly who your "typical" or "ideal" crowdfunding prospect is, so you can attract and influence them to invest in your company.
It's all marketing - identify your target market, position your offering properly, seal the deal!
So here are some interesting facts about what types of individuals are more likely to invest in your company via crowdfunding, according to an ADCI survey asking thousands of Americans asking them just that (FYI, ADCI stand for The American Dream Composite Index(tm), which is a survey conducted by Xavier University's Williams College of Business).
Keep these survey answers in mind when planning your funding campaign:
- People over 34 are less likely to provide crowdfunding dollars.
While those in their 40s and 50s are now getting on Facebook and social networks like never before, and making plenty of purchases online, they're not using it for social connecting like younger generations are - which crowdfunding is very similar.
- Females typically evaluate businesses themselves before investing, while men take greater risks and often invest based on the suggestion of a third party.
To me, this means that it's better to put all the information up for potential crowdfunders to see, for those who want to know the complete facts to analyze themselves.
- On a percentage basis, Caucasians are less likely to provide crowdfunding than other ethnic groups in the US. Also, Caucasians and Asians are more likely to invest in businesses they don't have an existing relationship with than African-Americans and Hispanics.
- People with incomes of $100,000 or more are most likely to engage in crowdfunding. [This does seem to contradict a little with the first statistic that crowdfunders are younger, but does point to the fact that young (aged 25-34), affluent people are the ideal crowdfunding candidates.]
But plenty of people with incomes closer to median ($40,000 or more) will still contribute, and there are many more of these individuals to reach through the Internet.
Now compare this demographic information with what you know about your existing or target customers. If they're people in their 20s and 30s, they may be perfect for crowdfunding your venture.
If not, it doesn't hurt to announce it to them anyway when the time comes. You also know people within your own personal and business network that you can announce your project to, as well.
And you might use it to determine the types of ads that you run and for whom they appear, should you promote your funding project with any kind of paid advertising. Or, you may find that the opposite is true - this is why we always test and track our marketing.
Suggested Resource: I hope you found the results of this survey on crowdfunding prospects' preferences to be helpful. I've identified even more strategies and tips to ensure you succeed with your Crowdfunding raise. I put them all together in a simple-to-follow program called "Crowdfunding Formula."
Written by Jay Turo on Monday, May 21, 2012
Obviously the Facebook IPO has absolutely dominated the business news this past week, and for very good reason.
Not only was it the biggest technology IPO in history, but the company in just a few short years has embedded itself into the very fabric of the lives of hundreds of millions of people worldwide.
And the tale of Mark Zuckerberg and that of the founding and the beyond supersonic growth of the business is exactly the kind of feel good, incredibly inspirational entrepreneurial success story that America and the world desperately need.
So yes, the Facebook IPO is greatly inspirational.
And its product is off the charts awesome - intuitive, fast, elegant, user-friendly software as a service that allows networks of people to share and connect with a speed, ease, and breadth like never before in history.
So Facebook is great. Facebook is cool. I have and regularly use my Facebook account as do a lot of people (though by no means most) I know.
But moving forward, as a business with real big legs, of that I am not so sure.
You see, Facebook falls into that category of things that are nice and interesting and kind of fun - all of which of course are very good things and ones on which you can build a very nice business.
Think fashion, music, and most forms of entertainment.
But does Facebook really feel like something that anyone really needs?
And it goes deeper than that.
You see, Facebook, for lack of a better word, for too many people, even its most active users, is actually quite annoying.
Now I admit that a lot of my evidence and thought process here is anecdotal, but really when was the last time that you asked someone their opinion of Facebook they came back with anything other than some variation of the below:
"I have an account but I don't really use it”
“I just don't get what the big deal is"
Or yes, the bane of all of our Facebook’s existence: "I just can't stand people on Facebook who just brag incessantly about how great their lives are and do so like 42,000 times per day!”
Okay, so there is a strong argument, like with many new technologies that all of us just really don't know how to use Facebook yet.
And as we do, the value of the product will naturally increase and the annoyance factor will go down.
But in the case of Facebook, I am not so sure.
The best analogy I have to make on this point - and not coincidentally, the company that Facebook is most often compared to - is Google.
Google, from its first days, gave users an experience that was both incredibly exhilarating and useful.
How many times have you interfaced with a Google search and just been blown away by the speed and accuracy of the results?
And here is the key point - how many times have you done so in an "economic" frame of mind - i.e. searching for a product or service for which you were in a buying mode?
This strong intent of most Google searches is at the heart of the unique usefulness for advertisers and thus the vast and awe-inspiring profitability for Google's business model.
Now let's compare this to Facebook.
Sure, it is interesting to see what some long-lost and distant connections are up to.
And yes, this "voyeuristic pleasure" does make the Facebook experience strangely and uniquely addictive.
But, is so doing really solving an obvious and pressing problem?
It is fine if it doesn't, but at the level of current valuation of the company, the assumption is that Facebook will be solving the kinds of problems that people would pay far more for than the very obvious, pressing, and actionable ones that Google search does.
My gut tells me this won't happen.
Facebook will remain a cultural icon, but as a big, public company its monetization prospects will most likely resemble that of other "nice to have" technology services that inevitably disappoint on their so very high expectations.
Written by Dave Lavinsky on Sunday, May 20, 2012
To be effective, your marketing efforts depend on targeting the specific customers (and potential customers) who will produce the best results for your business.
No company, no matter how big their budget, can afford to spend precious marketing dollars on too wide of a group of people. You just can't be everything to everyone.
You can create fast and cost-effective growth however by identifying your core customers and focusing your marketing activities on them - attracting them, selling to them, and providing the right customer support and retention.
This doesn't necessarily mean to focus on customers who buy the most, though that is the most important criteria in a top customer. There are also the "Influencers" who are the most vocal or respected, and spread the word about you to others - very valuable, even if they don't buy more than other customers.
Who are Your Top Customers?
It's easy enough to tell which customers of yours buy the most. Look at sales receipts or customer information to see who has made the most purchases, or the largest dollar amounts.
Sort out the 20% of customers who have bought the most from you over time, and that's your target group to which you want to focus your marketing (mainly to find more potential customers like them).
Then gather whatever other information you have about these customers and see what they have in common. While every customer is different, you'll notice there are certain trends and common characteristics among your target customers.
The easiest and primary information to get about these customers is their demographics - the directly observable characteristics that describe them (as opposed to psychological characteristics such as preferences, needs, motivations, self image, etc.).
Find out their basic demographic information
This includes basic facts:
- City/Zip Code
And also some less apparent information:
- Marital status
And if you serve business to business customers, demographic information will include information such as:
- Size of their business (in revenues and/or personnel)
- Purchasing/decision-making authority
How to turn your customer knowledge into gold
Time for a little alchemy...suppose you're going through your list of top customers and find that the majority are married women in their thirties who live within 5 miles of your store.
What can you do with these four demographic facts? To me, this information could be used in the following ways:
1. Running ads on Facebook that only appear for women, age 30-39, within your city or town. By knowing this information you won't have to pay for clicks and traffic from people who are less likely to buy.
2. Using signs, flyers, or some other kind of print advertising just within the 5-mile radius of your store. This would further saturate your business area and make your potential customers more likely to buy (as it takes 7 contacts with your company or ads on average to get a response).
3. Running an offer that specifically appeals to younger married women; for example, an offer to bring in one's husband and receive a discount, if this is applicable to what you do.
4. Selecting photos for your ads of people who closely match your target customers. In this case, you'd show women in their thirties who look like they live in your city, however that can be represented. Or pictures of happy couples, if appropriate.
5. Using direct mail to target potential customers. Chances are the 5-mile radius around your store is all in 1-2 zip codes. This information is very helpful if you're doing a direct mail promotion. When you buy a mailing list through a service like MelissaData or Listsource, you can select only addresses of women within your zip code. Why spend $.50-$1.00 or more per person if they're not as likely to respond, purchase, or love you?
6. Finding out where these women congregate and then going there or sponsoring and event. For example, if you determine that most of your target customers belong to the local PTA (Parent Teacher Association), sponsor a PTA meeting or event. As a related note, this is why I love airport lounges. Yes, it's nice to stay in a comfortable environment when waiting for a plane, but I love the marketing implications. That is, virtually all of the people I see in these lounges are corporate executives and salespeople that travel a lot. If your business' core customers fit this demographic, then hanging out in these lounges could be a goldmine.
7. Designing your store's appearance and layout with these women in mind. Your store would probably be colorful, aesthetically pleasing, and perhaps "hipper" and less formal than if most of your visitors were Baby Boomers.
8. Conducting research to learn what has been discovered about these women's preferences. Did you know there have been tests showing that women prefer ovals over squares, or purple over red? This information would be very useful when creating a logo, designing your store's outside and inside, and all of your promotional materials.
See all the ways you could utilize this information? This is why big companies spend a LOT on market research and surveys, and ask this information of customers when they buy online, etc. The more you know about them, the better marketing decisions you can make.
But what if I don't have this information about your customers?
Start with what you know
If you're interacting with customers face-to-face, you know their gender and can guess their ages. Your sales receipts will probably tell you customer addresses, so there's the city and zip code.
If you have collected business cards or know your top customers' demographics from memory, write that up as a working profile for now until you can do it more formally.
Then, start collecting their information
The best way to do this is to ask for it! Have a jar on your counter for business cards and a drawing/raffle. Or hand them a short survey form to fill out with 5-8 questions.
Or you can make simple online surveys using SurveyMonkey, SurveyGizmo, or Zoomerang, and then promote the web address where people can fill it out. It helps if you offer them some incentive, like a free gift or chance to win something.
It seems like fast food restaurants are getting pretty systematic now about encouraging customers to rate their experience online or by calling into a hotline.
And last time I went to a new doctor, they had me fill out a "Patient Information Sheet" asking for quite a bit about me medically, as well as about my demographics. See how doctors and dentists collect this so routinely? Make it a part of the way you do things and you won't have to remember.
Have you ever registered for something online and they ask for your company name, company type, your job title within the company, and so on? That's a great example of collecting demographics about a business, for B-to-B sales.
Make a demographic profile
Take your findings and summarize them on one page, for easy reference.
I know several copywriters who have told me that the best way to "get through" to people reading their sales letter or persuasive copy is to sit down to write with a photo of their "ideal" or "typical" person from their target market, and write as if speaking directly to that person.
Photo or not, at least write what you know about your top customers' common characteristics and print it out on a sheet of paper.
Make this profile a quick snapshot to reference that will represent them, rather than going about your marketing haphazardly, or in a less focused manner.
Lastly, do some research
As I said, you should also look for studies and reports online about how people of certain ages, genders, or marital statuses behave differently (from a marketer's perspective).
Lastly, in order to prevent false assumptions, if your main customers fit a certain demographic, for example they are mostly of a lower income, ask yourself if this was intentional, or if your previous marketing efforts just happened to attract them.
Executing on the ideas above will shed light on exactly whom you're working hard to serve, and will aid you in your efforts to find more of them and treat them the way they want to be treated.
Otherwise, it's "Round peg...meet Square Hole."
Here's to focused, targeted marketing...good luck!
Suggested Resource: Growthink's Ultimate Marketing Plan Template allows you to expertly create your marketing plan. Importantly, it allows you to quickly and easily build your target customer profile as explained above, and much, much more in order to dominate your market. Click here to learn more.