Be Smart - Learn From Your Business Mistakes
by Kevin Sinclair

e) Ensure you have sufficient profit margin in your product to be able to survive should your response be very poor - especially in direct marketing activities.

Today, the lessons I learnt are applied to my online business activities in the following ways.

Solo mailings to lists of newsletter subscribers are done with caution. Some list owners will inflate their subscriber numbers to encourage advertisers to use their services. The first thing I do is subscribe to the newsletter to see the quality of content and what others are advertising via solo ads.

Then I run a classified ad in the newsletter to test the responsiveness of the subscribers. This also gives me an indication of whether the stated size of the list is true or not. I have had better response from a list of 20,000 than what I received from a list of over 200,000. Many factors can influence such a result.

While you should receive a far better response from solo ads than classified ads, it still pays to test wherever you can. If a classified ad in the newsletter did not result in responses, I would not advertise using the solo ads. However, I might test a few different classified ads to see if the initial results were correct before moving on to other possibilities.

It is worthwhile to "do the numbers" before spending on advertising. While many marketing experts talk about the 'lifetime value of a customer' concept, those whose business activities centre on promoting the products of affiliate programs should regard this with caution. Instead, determine how many must be sold so that the commission you receive will cover the cost of your advertising.

The higher the percentage response to your offer you need to cover your advertising cost, the greater the chance you will make a loss. Do not rely on industry statistics or averages to make your decisions. Keep careful records of your activities so you know what works, what is to be avoided and what to expect from future promotional activities.

Finally, exercise caution when considering safe-lists and any type of email address lists that can be purchased. My experience is that there are NO truly safe-lists available other than having your own opt-in list. Any form of bulk email to people who have not agreed to receive your message will damage your business reputation and your prospects of making a decent living on the Internet.

Article by Kevin Sinclair, CPA, of Be Successful! Business & Personal Success Resources ( http://www.ksinclair.com/ ). He is the author of 2 free ebooks: "Success Secrets" & "How To Choose A Home Based Business". Kevin is also the publisher of "Be Successful News" - a free ezine dedicated to your online business success - to subscribe, visit http://www.ksinclair.com/pbs_news.htm

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