Entrepreneur and Finance Nerd Making Money Online

Category — Changing Your Mindset

My Mantra and The Value Equation

The Value EquationI’ve had a mantra for a while now: “The value you provide to your customers is directly proportional to your income potential.”

Value = Income

The idea is that any successful business provides value to its customers. Or to put it another way…a business is successful because of the value it provides to its customers.

Think about any successful company – Amazon, Wal-Mart, Apple – all provide value to their customers. Amazon provides competitive prices with the convenience of shopping online. Wal-Mart is the Amazon of the retail world – competitive prices and the convenience of a one-stop shop. Apple provides innovative and trendy products that you can’t get anywhere else. They all provide value to the consumer.

In the world of internet marketing, it’s easy to think that you can make money without providing any value. Actually a more true statement might be that most people don’t think about providing value when they want to make money.

Just look at all of the made-for-AdSense sites. The MFA sites only exist to rank for a specific term in the search engine. The content is marginal quality at best and the site is designed to get people to click on ads.

The same can be said about a lot of Amazon, eBay or other made-for-affiliate sites.

These are the very sites that Google hates!

Am I saying that you can’t monetize your website? That you can’t have ads or use affiliate links? No, that’s not what I’m saying.

Here’s The Problem…

The problem is, these sites don’t provide any value. They don’t offer information that can’t be found elsewhere. They don’t have original research or legitimate reviews. They just have the bare minimum needed to rank for whatever keyword their targeting.

More often than not, these types of sites make very little money. I think it’s a fair statement to say that most people who are struggling to break that magic $100/month barrier are building worthless sites.

Earlier today, I read Lis Sowerbutts’ latest post: Indie Non-Fiction v. InfoProducts. She mentioned people trying to sell PLR on Kindle Direct Publishing. It pinched a nerve since this all of this has been on my mind the last few weeks.

That led me to thinking about how insanely popular money-making products are. Whether that’s in the traditional internet MMO space or the Carlton Sheets type infomercial millionaire products. Millions and millions of dollars have been spent on these products, most of which are totally worthless.

How in the world do these products sell? Can’t people see through their cheesy marketing?

Obviously my philosophy of value being tied to revenue is wrong if people are spending millions on worthless products.

The Secret Lies in Perceived Value

A friend of mine once said “You can sell dog poo if you package it right, doesn’t mean it will taste good or that your customer will be satisfied, but you can! You can also have a hard time giving FREE GOLD away if it’s covered in dog poo or not packaged right”.

That is why the whole marketing industry exists…to give a product perceived value.

With that said, maybe my mantra should be: “The ‘perceived’ value you provide to your customers is directly proportional to your income potential.”

Perceived Value = Income

Why is there so much money in the illegal drug market? Illicit drugs have a high perceived value when you are addicted. You will do anything for that next high if you are addicted badly enough. They don’t give you the first one free for no reason.

The most successful internet marketers in the world aren’t successful because there’s something special about them or because they have some super secret knowledge. Why can Frank Kern, the guru or gurus, sell products for $2,000 or more? Because he is darn good at making people believe that his information is worth $2,000 or more.

Perceived value isn’t the be-all end-all though. I think there is an additional layer to this puzzle.

It’s More Than Just Perceived Value

The real formula is perceived value over cost. Cost can be time lost, opportunity cost or the actual dollar cost.

[Perceived Value / Cost ]  = Income

Hypothetical Scenario: You want to lose weight. You’re making your new years resolution to lose 30 pounds by summer. This is the 5th year in a row that you’ve made this resolution, but you’re serious this time….

Now, in our hypothetical scenario you have two choices:

You can pick The Realistic Fitness Plan – a complete workout system that says you have to count your calories, work out an hour a day for 3 months straight and you will lose 30 pounds.

Or you can pick The Lose Weight, Become A Body Builder and Marry a Super Model Overnight Plan – a little pill that you take right before eat you large a supreme pizza for dinner each night.

Sadly, the majority of consumers would pick The Lose Weight, Become A Body Builder and Marry a Super Model Overnight Plan (TLWBABBAMASMOP for short). They buy into the idea that you can get insane over the top results with no effort. TLWBABBAMASMOP has a higher perceived value to cost ratio.

When an someone wants to sell you a product that can make you rich beyond your wildest dreams and all you have to do one “simple” little thing, people eat it up. They love the idea of getting this huge value for minimal cost.

What does this mean?

It means a few things

1) Don’t expect to make money off a product that people perceive as worthless

It doesn’t matter what it actually is worth. It’s all about how people perceive it.

Can you sell a product that is worthless? Absolutely. It’s all in how you market it. You can hype a product to the moon and give it an extremely high perceived value. But if the product truly is worthless…expect very unhappy customers. That means loads of refunds and essentially zero potential for future revenue from these customers.

If all you want to do is scam people then you make money off a worthless product you just have to make them believe the benefit is greater than the cost. Just don’t expect it to be a long-term income stream. And don’t be offended when people call you a scam artist…

2) Expect to make money off a product that people perceive as “worthfull.”

Like I said above, it doesn’t matter what it actually is worth. It’s all about how people perceive it.

You can also have a hard time giving FREE GOLD away if it’s covered in dog poo…”

This is why sales copy is so important. You may have the greatest product in the world that truly is worth every penny that you are selling it for. However, if your customers don’t perceive that value…it will never sell well.

This is an area that I am pretty weak in. I have never been great at hard selling anything. That is why the majority of my sites are currently monetized with CPA or AdSense. I have a really tough time pushing a hard sell.

The new project that I mentioned in my last income report will be new ground for me. I am really pushing a hard sell with this site. I am trying to really give the produce perceived value. It really is a great product, I just have to communicate that before they lose interest.

So here’s the new mantra: ”The perceived value you provide to your customers compared to the cost is directly proportional to your income potential.”

Hmm…that one doesn’t roll off the tongue as well. May have to work on that.

July 6, 2011   2 Comments

Solution to the Current Economic Crisis

 

Unknown source. Found via Digg

October 2, 2008   No Comments

How To Make Your Blog Different

“Be daring, be different, be impractical, be anything that will assert integrity of purpose and imaginative vision against the play-it-safers, the creatures of the commonplace, the slaves of the ordinary.” – Cecil Beaton

There are millions of blogs in the blogosphere and, unless your blogging about teaching your parrot advanced calculus, thousands in your niche. Right now, the market is flooded with other blogs just like yours. What is it that makes your different? Why should I follow your blog on making money/SEO/funny videos/whatever over the next guy (or gal)? Like the wise Cecil Beaton says above (actually I’m not really sure if he was wise, but that’s a darn good quote up there) you don’t want to be a play-it-safer. Make your blog different.

Take a controversial position – 2+2 = 7?

It’s easy to follow the crowd. It’s easy to find some popular topic and blog about it just like everyone else. You love twitter? So does everyone else…including me >blush<. Try standing out. Write about the 10 things you hate about twitter or tell people how they can get rich by dropping out of high school to flip burgers.

People don’t want to hear the same thing from you that they’ve heard from everyone else. (Let me throw a marginally off-topic nugget of wisdom in here also – if you are regurgitating news you’ve read somewhere else, spice it up – add your thoughts, add a video on or find a complementing post from a fellow blogger. That’s what I did in my post a few weeks ago on how expensive text messaging is.)

Make your design unique

To the first time visitor to your blog, it doesn’t matter how great your content is. I don’t care if you’re Agatha Christie (world’s best selling fiction author, BTW), if your site is ugly, people won’t stick around to read your potential award winning post on the sleep patterns of sheep.

Upon starting a blog, most people set-up WordPress and begin blogging with the default theme (very boring mind you.) Some get a little more adventurous and Google “WordPress Themes” and grab the coolest looking one from the first site they come to. So now you and 6 million people are using the same template (look at you, you’re so unique now!)

This leaves you with two viable options – purchase one or customize one that someone else has done most of the hard work on. Purchasing a template is a great idea, but not always an option for the low-income, part-time blogger. I prefer to customize a pre-made template. I find a template that I like and modify some of the images and formatting to fit what I’m looking for (that’s a whole other topic, more on this in a future post.)

The point is, most first time visitors will only glance at your page for a few seconds before moving on. Be sure to grab their attention with a unique blog design.

Make your blog you

When it comes down to it, your blog has to be your blog. Why is blogging so popular? Because people are interested in getting information from real people, not a faceless news site. Whatever your topic is, your blog is really all about you – your interests, your writing style (voice) and your personality. You is what will make your blog stand out from the crowd – even if you have the dullest blog in the world. This is a huge reason that the biggest bloggers are the biggest bloggers. People like them – their interests, their writing style and their personality. I hope my personality shines though on WallerBlog dot Com (I feel like it does anyways.) I like to be a little snarky, a little nerdy and a little outside-of-the-proverbial-box in my ramblings.

If your goal is to have a blog where you’re the only reader (family doesn’t count) then be the same as every other blogger out there. Otherwise, you have to be different. These ideas above are by no means a complete list on how to make your blog stand out from the millions of others out there, but it’s a starting point. Go, be different!

June 9, 2008   No Comments