Be Smart - Learn From Your Business Mistakes
by Kevin Sinclair

We all make mistakes in business. The important issue is that we learn from them and apply the lessons in both our online and off-line business activities. One of my most costly mistakes happened about twelve years ago in the off-line business world. However, the lessons I learnt are just as applicable online as they are off-line.

Having established a small mail order business part-time, I decided to expand the business using direct mail techniques. I had read all the books and attended a course and it seemed like the best approach to achieve my goals. After approaching various mailing list providers, I decided I had found the perfect list to reach my target market.

Pricing was obtained from the list owner and he was happy to provide me with small quantities of names initially so that I could test his list. These tests were successful enough for me to decide to undertake two large mail campaigns one after the other. I was very confident that I would be receiving countless orders and soon leaving my full-time job.

Disaster struck with the first mailing and the second mailing was too far progressed to stop. The initial sign was a significant increase in the dead letter rate. Then the quantity of orders was less than half what I expected. The second mailing had similar results. I was significantly out of pocket and I had to stay in my full-time job to repay the debts I had created.

Shortly thereafter, I began to read reports that the list owner was being investigated for fraud and other criminal charges. All in all, a sorry state of affairs.

The key lessons I learnt from this experience were:

a) Always check the integrity of who you are doing business with - especially if you have not had previous dealings with them.

b) Never assume that limited test results will be duplicated in larger scale tests.

c) Never over-commit to promotional activity - it is better to grow slower than to lose your hard earned money.

d) The stated size and quality of a mailing list should be regarded with caution.

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