I’ve used several different options to get logos throughout the years:

1. I’ve designed a logo myself.
2. I’ve hired a designer I knew personally.
3. I’ve hired a logo design company.
4. And, most recently, I’ve outsourced logo creation through both 99designs and Design Outpost.

In this post, I will run through each of the above four options in detail, and suggest the best course of action for getting you a great logo design at a low price–based on my own experience.

Option #1: Design It Yourself

Doing logo design yourself is cheapest, but good logo design is difficult, and your result will usually be sub-par.

You can see some of my work at the top of this page–I designed the logo for erica.biz. Though I like it, I’ll probably have it professionally redesigned at some point.

Example logo I created myself:

erica.biz, 2007.

Option #2: Hire Someone You Know

Hiring someone you know personally is great, especially if you are already familiar with his or her work. If you have seen the designer’s portfolio and spot several logos you love in it, this might be the right choice. I have done this before with a friend whose portfolio was fantastic and was 100% satisfied with the logo I received.

If you don’t like his/her portfolio, or the designer doesn’t have a portfolio, steer clear! It’s not worth the risk. The portfolio needs to have several logos in it that you fall in love with. Even if the designer comes highly recommended, if his or her “style” isn’t what you’re looking for, you won’t get a great logo.

Cons: Hiring someone who bills him/herself as a “logo designer” is frequently expensive, and if you don’t like the result, you may lose a friend as well as your money.

Example logos created by someone I knew:

Simpli Hosting, 2003. Created by friend (I think she comped this one in exchange for hosting.)

10for10.com, 2005. Created by the same friend who did the Simpli logo.

Option #3: Hire a Logo Design Company

Hiring a logo design company can be hit or miss. I hired one recently for Be The Authority–a new site I’ve been working on that I will unveil later this year. The company is well-known online and has several logo designers working at their location. I paid $395.00 for a logo with their “entry level” logo design package–a fair price.

Unfortunately, the designer who was assigned to me was terrible. She didn’t get the concept I wanted. I finally escalated it to a manager and had her removed from the project. The second designer was great and got me an excellent logo within a few days.

So, with reservations, I say this is a reasonable route, and will probably get you a nice logo. Just don’t be afraid to have the logo design company “fire” your designer if you get the short straw and your logo isn’t what you want!

Example logos created by design companies:

Be The Authority, 2009. Created by logo design company for $395. Most expensive logo I’ve bought to date.

Revamped Simpli.biz logo, 2006. Created by a design company–we won a “worst web hosting website” contest (yes, seriously!) and this was part of the prize!

Option #4: Crowdsource Your Logo Design

Finally, the subject of much controversy–”crowdsourcing” your logo. I’ve done this twice–once through Design Outpost and, more recently, through 99designs. Let’s walk through the experience.

What is crowdsourcing? Crowdsourcing refers to having an open contest for your logo and letting designers compete to win your business. With both 99designs and Design Outpost, you pay up front and set the price for your logo. You then create a “brief” — a description of what you want — and sit back and wait.

In a few days, designers from around the world submit their prospective designs. It’s your job to rank each design and give feedback to each designer.

Eventually, after a set time, your contest ends, and you pick an overall winner, who then sends you the logo in either PSD (Photoshop format; suitable for Web logos) or AI format (Adobe Illustrator–better for printing.)

Why Is Crowdsourcing Controversial?

Sounds great, right? It is–for those of us who are business owners. There is a huge community of designers who hate the concept. They call it “spec work”, meaning they do the work, but only get paid if they are the winner. In fact, some designers have even banded together to create No Spec, a website “[uniting] those who support the notion that spec work devalues the potential of design and ultimately does a disservice to the client.”

They state that many designers on 99designs and other crowdsourcing sites use stock images–images created by others. The images used are not licensed to be used in logos, and you (as the company owner and recipient of the logo) are responsible for making sure your logo doesn’t use any copyrighted work or illegally licensed images.

Of course, a designer you hire could very well use stock photography illegally as well, but it’s likely that a designer who is aware of No-Spec is also aware of how to properly use stock photography in a logo.

So, is a logo design just a logo design, or is it the heart of a “brand awareness strategy” where you will need to have 8-hour intensive “strategy sessions” with a high-priced team who then presents you with reams of paper on how to grow your brand?

There is a time and a place for both, but I’m going to take the stance that unless your company is already well into 7 figures a year and pushing 8 figures, that you don’t need the latter.

What you need is to ship (as Seth Godin would say), and you can do that with a logo. And if you want a great logo, done quickly, I recommend crowdsourcing it.

Having used both 99designs and DesignOutpost, I’d recommend 99designs. I paid less for my logo on DesignOutpost, but 99designs got me far more designers and designs to choose from.

Example logos created via design contests:

Inspiring Innovators, 2008. DesignOutpost contest. $250 to the winner, plus $25 to DesignOutpost. Total $275.

And, finally, my newest logo–for my upcoming startup company:

BestBlogs.net, 2010. 99designs contest. $310 to the winner, $70 fee to 99designs. Total $380.

How Does 99designs Work?

I strongly recommend you create an account and walk through the site as if you were a logo designer to get a feel for it. In particular, you’ll want to click “browse projects” and then “logo design” on the right, then sort by the “prize” column. This gives you a feel for how much others are paying.

After looking at this, I set my logo prize to $310. This is the “eBay mentality.” I saw a bunch of people who were at $300, and noted that my logo would be right above theirs when the contests were sorted by prize. (If you want to be really catty, you can set your logo prize at $311 or $351.)

The minimum prize is $150, but I don’t recommend this, as you won’t get a lot of choices. I’d recommend staying just above $300. (Never use a prize such as $295–there are a lot of people at $300 that your logo will be buried below.)

Writing Your Title and Subtitle

Once you set your price, you will need to write a title, subtitle, and “brief” for your contest.

The key with the title and subtitle is to market your logo contest to designers. The title should attract their attention and draw them in. Don’t use titles and subtitles like “We sell blah, blah, X, Y, and Z.” Boring!!

My title was: “BestBlogs.net = Hot new Web 2.0 startup needs bold logo!”
And my subtitle: “Designers: Looking for a high-profile branding project to put in your portfolio? This is it!”

Notice how my title, and especially my subtitle, catered to the designers instead of being all about me? This was one of the keys to having my contest be a huge success.

Writing Your Brief

Your brief is the most important part of your logo design contest. All of the designers will read it. It should contain:

• The colors you want in your logo
• Examples of other logos you like, and what you like and dislike about those logos
• Who your customers and target audience are (be specific!)
• Branding requirements (capitalization, spacing, etc.)
• What you do want (I wrote, in part: “Looking for a clean design that can easily scale down to a mobile website.”)
• What you don’t want (I wrote: “NO: cartoons; animals; stock photos; clipart; cheesy fonts”)

If you haven’t written a brief before, read several other contest briefs and pick and choose what you like from those.

There is a massive stash of great logos at logopond.com; go there, find at least 5 logos you like, and copy and paste each logo’s web address into your brief.

Should You Pay 99designs to “Promote” Your Logo Design?

Next, you get to choose some optional “promotion” methods that 99designs charges for, like making your listing bold. I didn’t choose any of these options and my contest still came out well, so I can’t say I recommend any of them.

Finally, pay your money to 99designs.

You’re all set at this point! Your contest is running.

Tips for After You’ve Submitted Your Logo

There is one thing you want to do at this point, and that’s to promote your logo contest to your fans and customers. I posted about mine several times on Twitter, for instance. Email your customers, Tweet about it, blog it, and let people know.

Guaranteeing Your Contest

Once you have received 10 logo designs, you can guarantee your contest. That means that you can no longer request a refund from 99designs, and that the winner will receive payment. This will greatly increase the number of logo designs you receive. If you have even a couple of decent logos submitted, you will definitely want to do this.

I did this when I had about 20 logos in, and 150 more logos poured in after I did it…so guaranteeing your contest is definitely effective.

Rating Designers’ Logos

Within a day or two, you will start to get logo submissions from designers, and then you can rate them. At the time my contest ended, my contest had 179 entries. Holy cow! I wasn’t expecting that many, and rating and giving feedback to each one takes time. Make sure to set aside some time each day to go through and give feedback–probably 20 minutes or so.

If you’re not sure how to rate logos, take a look at some logo design tips. Smashing Magazine has a good article on effective logo design. Also–ask your customers and potential customers. (If you have friends who aren’t potential customers, ask them, too, but weigh your decision heavily in favor of those who are or will be your customers.)

Ultimately, it’s up to you to pick a logo that looks decent and that others like, as well. Here’s my contest. Out of several logos I rated 5 stars, I ultimately picked the one I did because it was simple, straightforward, and scaled down to a mobile website easily. Your criteria may be different. (Remember, if you plan to use it in print, you probably don’t want it to have more than 2 colors plus black–make sure to specify this in your brief.)

Correspond with the designer whose logo you like most via the private message function at 99designs. Designers are required to state whether their logo violates any copyrights or uses any unlicensed stock art. If the designer says that his or her logo is original, go for it. Congratulations–your business has a logo!

Conclusion

In my opinion, 99designs and other “crowdsourcing” sites will give you a logo that is cheaper than a typical “logo designer” would charge that will be of similar quality.

It is also my strong opinion that a full-on “brand strategy” is much better saved for when you have already hit the $1 million mark. If you are running a small business, spend your money on something that will directly increase your bottom line and/or give you more time–hiring someone to do “time sink” work is a good choice, as is spending on equipment and direct marketing/sales.

Finally, a word of caution: don’t be cheap. Make the decision to invest at least $350-$400 in your logo. If you can’t afford that, it might be wisest to go without a logo for a few months. Then, make it a priority once your budget opens up a bit.

Try out 99designs for your next logo design. (Note: I don’t make any money from this link or any other link in this post.)

Recommended Reading:

• How I Turned My Mediocre Website Into A Million-Dollar Business. Can a terrible website actually make you a million dollars?
• 20 Scam-Free Ways to Make Money Online Fast. I look at 99designs and other sites from the perspective of a logo designer.
• Why Entrepreneurs Fail (Will You Avoid These Three Traps?) Trap #3 is particularly relevant for your logo design.

I bought erica.biz and moved my blog over to it in December 2007. At the time, I had negligible traffic and only 70 subscribers–mostly my real-life friends.

By December 2009, two short years later, I was getting over 15,000 visitors a month from Google alone–and over 30,000 unique visitors a month total.

Now, I’m going to show you exactly how to do the same thing–get a massive wave of traffic and visitors to your blog or website–for far less than you would pay for pay-per-click advertising!

I’ll show you how to get targeted traffic so you can make sure the people you get are interested in your product or service.

And I’ll show you how to use a simple strategy to rank #1 for Google for keywords that people are actually typing in…like “earn money online”, for which erica.biz ranked #1 out of over 24 million results for several months.

Best of all, I’m offering all of this at a groundbreaking price (to thank you for being a subscriber) so that you have absolutely no excuses to not take me up on this limited-time offer.

Introducing Guest Post Secrets

Here is a simple strategy, step by step, that shows you how to get top bloggers to not only link to your site, but feature your product or service.

I’ve used this same system to drive over 4,000 people to erica.biz in a single day. Another 2-day period using this system brought in over 700 new subscribers to my mailing list. In fact, if you found me from another popular blog like I Will Teach You to Be Rich or Get Rich Slowly, you’ve seen this strategy in action.

Best of all…you can use this whole strategy, over and over again, and it won’t cost you a dime to drive this traffic to your site. The top bloggers will happily help you for free. I show you how.

How much would it cost you on Google Adwords to drive that much traffic to your site? Even if you are only paying 10 cents per click (which, let’s face it, is pretty cheap these days!), it would cost you four hundred dollars to drive 4,000 visitors to your website or blog.

I did it for free, and you can do it, too, within 7 days of taking action and investing in Guest Post Secrets.

Take a look at Guest Post Secrets today and get a breakthrough introductory price!

Frequently Asked Questions

Q. Who is Guest Post Secrets designed for?
A. Anyone with a blog or website who would like to drive targeted traffic from the Internet’s hottest blogs to their site without paying a dime for that traffic!

Q. Who wouldn’t buy Guest Post Secrets?
A. If you don’t already have a blog or website, this isn’t for you. But if you do–and you want a massive wave of traffic to your site–buy it.

Q. Do I have to do any work?
A. You’ll need to write an article. But it’s not as hard as you think, even if you don’t fancy yourself as a writer. Once you are inside Guest Post Secrets, I’ll show you some great examples of easy articles you can write and exactly how to get the big bloggers to say “yes”.

Q. I really need someone to walk me through this step-by-step. Does Guest Post Secrets do that?
A. I include step-by-step email templates that are foolproof, so you can feel confident emailing even the biggest bloggers. I explain the entire process, including what to do if you get stuck.

Q. Do I need to be super-techie to do this?
A. Not at all! If you can write a document in Microsoft Word, you’ll do absolutely fine. If you’re already writing a blog, this will be a cinch. I walk you through it step-by-step.

Q. What if it doesn’t work?
A. I mentioned Guest Post Secrets earlier on erica.biz without even linking to it, and several people bought it. One of them, Katrina McQuarrie, wrote me back an (unsolicited) email that said this. I’ll let the results speak for themselves:

“I greatly enjoyed the videos in Guest Post Secrets. Not only did they sound and look professional, you have a very good speaking voice and a great way of breaking things down step by step. 

I especially liked how you called out specific resources and provided cut and paste email templates.  You made it so easy to start guest posting; all the tools were right there for me.  In the 6 days since I bought your product, I’ve already sent out one guest post (will be published Monday), received a request to guest post from a second blog, and queried a third site and been accepted to do 2 for them.  (I offered two possible topics and the blog author liked them both!)

Thanks for taking the time to make up such a helpful product. It was just what I needed."

-Unsolicited email from Katrina McQuarrie, who runs Kick-Ass Genealogy

If, for some reason, you aren’t 100% satisfied with Guest Post Secrets, you have a full year to request a no-hassle complete refund.

Q. I’ve heard of guest posting, and have read blog posts about it. What does Guest Post Secrets have that those blog posts don’t?
A. I go far more in-depth than anyone I’ve ever seen. In fact, I even bought another “guest posting” information product and it didn’t have the concrete information mine has. Just some of many examples:

• How to get your blog or website to rank highly in Google for search terms using guest posting
• The most important part of your guest post (something that every single post I’ve ever read about guest posting neglects to mention)
• How to find blogs in your niche to guest post on
• Exactly, word for word, what to say to get big bloggers to say “yes”
• What to do if you don’t have a blog

There’s no single blog post that will cover all of this information. In fact, the videos in Guest Post Secrets have over 30 minutes of content, plus downloadable step-by-step email templates. I’ve made this as foolproof as possible, because I want you all to have access to this fantastic source of waves of free traffic.

Guest Post Secrets is $67, but for you only, since you read my blog, use coupon ERICABIZ to get $20 off–just $47 for a limited time!

Don’t let the low price fool you–this is amazing, never-before-seen, high-quality video content. I want to give you the first access to this product. Imagine, in just one week (or less!), getting a huge wave of traffic to your blog or website without having to pay a dime for it. How liberating!

This is the #1 strategy I’ve used to grow erica.biz, and now it is yours. Only $47 with your special coupon.

Invest in Guest Post Secrets now.

If you own a blog or a website and need more targeted traffic to it, don’t pass up this opportunity. There won’t ever be a lower price for Guest Post Secrets (and frankly, I should charge a lot more!)

Invest Now!

Stop throwing your money away on AdWords, advertising, and other paid traffic strategies.

Purchase Guest Post Secrets now.

Questions? Post them as comments below, or contact me directly.

Please note: Your credit card statement will show “Inspiring Innovators.” That’s my company’s name.

I look forward to seeing you on the inside of Guest Post Secrets!

Purchase Guest Post Secrets now.

My Upcoming Product

In January, I will formally release my first information product! It’s called Guest Post Secrets, and it’s designed to help up-and-coming bloggers get a massive wave of thousands of targeted visitors and subscribers to their blog. Guest Post Secrets will sell for under $50, which will be well worth it when you consider how much it will grow your blog.

Guest Post Secrets consists of approximately thirty minutes of video content that I created using Camtasia–a piece of software that records your computer screen while you talk into an attached microphone.

In Guest Post Secrets, I explain what a guest post is and how much traffic it can drive to your blog. A typical guest post I write sends me about 4,000 new visitors. Over half of my 7,000 subscribers have found me through guest posts I’ve done, and my last guest post brought me over 700 new subscribers. I believe anyone can grow a huge blog by guest posting, but most bloggers don’t know how to guest post or aren’t getting responses when they email other bloggers for guest posts.

The current guest posting guides that are out there aren’t very deep. Guest Post Secrets goes crazy deep–showing you the exact email I send to top bloggers to get them to say “yes”, exactly what you need to say in your followup email, how to format your guest post, and examples of guest posts anyone can write to drive tons of traffic back to their blog.

All told, it’s about 30 minutes of video content, plus a “10 Mistakes” PDF that goes over the most common guest post mistakes, plus the email text that you can download and send to top bloggers–and some as-yet-unnanounced bonuses that are going to absolutely rock!

Earlier, I wrote about a four-step process I use whenever I create a new product. I used this method to create Guest Post Secrets. Now, I’ll run it through with you, show you the cost breakdown, as well as showing you each step I took to make my three videos into a product.

The Breakdown–Step 1: Determine A Market

I created my Blog Success Manifesto and released it for free. With over 2,000 downloads in the first few months, plus rave reviews and tons of people asking me for more information, I quickly determined that there was a market of bloggers who wanted more traffic to their blogs.

But a lingering question remained: Would up-and-coming bloggers pay for quality information, or did they all only want free stuff?

Step 2: Decide What Your Product Will Be

Earlier in 2009, I quietly took on a few clients who paid a monthly fee and got personal access to me. They were all interested in learning about blogging.

I created many videos before finally creating three videos, in a series, that I felt summed up the best way to quickly get traffic and grow a blog–no matter whether you were starting from scratch or just wanted to grow your community faster.

I had a decision to make: Should I release this now, as a less expensive product, or keep adding to it and making it a bigger, more expensive product?

I’ve heard conflicting advice from this from other Internet marketers. Some say releasing a less expensive product undercuts your value and time spent creating the product. Others say it helps establish you and get your name out there.

Finally, I decided I needed to get a product out there. I couldn’t know whether people were willing to pay for this information without releasing a product into the market. Releasing a quality, yet inexpensive, product, would allow me to test the market quickly and either poll my customers to create a larger product later or–if it bombed–to move on to a different, more lucrative market.

Step 3: Actually Create the Product

I sent my unpolished videos off to a fantastic video editor in the Philippines, who, for $3/hour, edited out all my pauses, “um”s, and mistakes, and sent them back to me as Flash video files.

Total spent:
Camtasia: $292 at Amazon (cheaper than Camtasia’s website)–but get the 30-day free trial to start out.
Video editing: Under $10.

Next step: I needed a name! I brainstormed several names in my trusty notebook, finally deciding on Guest Post Secrets. I registered guestpostsecrets.com through eNom–my chosen domain name reseller. I already have hosting through ServInt.

Total cost to register the domain name: $10.

I’ve been a web designer since 1996, but design is one of the easiest things to outsource–if you know where to look. I had some good recommendations in this area, and decided quickly on Killer Covers.

I immediately ordered a Killer Website Brand Pack from Killer Covers, and they turned around a fantastic mini-site design in a couple days, complete with HTML files I could edit myself and insert my sales letter into. I also had a professional-looking cover graphic for my product. (If you’ve ever wondered how product creators get those graphics that look like product boxes, CD cases, or book covers, Killer Covers does exactly that!)

Total cost for Killer Covers website and e-cover design: $297. (Note: If you just want a cover, that’s a lot cheaper…check Killer Covers for more information.)

Meanwhile, Lisa, my primary VA, was building out the back end of the product. She installed Wishlist Member, set up Wordpress with the correct plugins, and inserted the videos into the site. She configured Wishlist Member to work with my shopping cart and merchant account. I could now accept payments!

I added some minor site tweaks, and the back end was ready in just a couple days.

Total costs: Merchant account: Powerpay = $10/month (plus transaction fees)
Shopping cart: 1ShoppingCart = $99/month
Lisa’s time: 5 hours @ $26/hour = $130
Wishlist Member: $97 for a 1-site license

I also had another VA work on what would become an amazing upsell product: a list of 100+ blogs that accept guest posts. He spent 12 hours compiling a great list of blogs, complete with Alexa rankings, categories, etc. This has already been worth its weight in gold to me alone; I’ve discovered several popular blogs I was unaware of that I can write guest posts for.

I’ll sell this as an optional add-on for a low price.

Cost: 12.5 hours at $3.33/hour: $41.63.

Step 4: Sell Your Product

Creating a sales letter can definitely be outsourced, but as a writer, this was one thing I decided to take on myself.

I’m going to be frank: Writing a sales letter, especially if you haven’t done it before, isn’t easy. It’s also absolutely nothing like writing a blog post or a newspaper article–the two writing jobs I have a lot of experience with.

The best way to write a sales letter is to download a swipe file of other great sales letters and copy them, sentence for sentence, making them work with your product. Changing from the “voice” of a blog post, where most of the writing is about me, to the voice of a sales letter, which is all about you and your desires, is hard.

I believe copywriting is a skill that can be learned, but it’s not something you’re going to learn overnight. It is probably worth it to pay a professional copywriter for a “copy critique.” I did this and had two copywriters basically rip my sales letter apart. It was a huge blow to my ego, but I have to admit the revised letter cleaned up nicely.

There’s still more work to do on my sales letter, but it’s already far better than my first draft. Ironically, you will probably find that writing the sales letter will take you as much or more time than creating the actual product. That’s to be expected.

I did shoot a video for the sales letter, too, remembering to put myself in my buyers’ position. I uploaded it to YouTube. Then, when a copywriter said it was too long (at 7 minutes), I cut a minute out of it and uploaded it again today.

Hardware and Other Supplies

I needed a microphone to do the audio recording part of the product with Camtasia. I picked up an Audio-Technica AT2020 USB microphone and a pop filter, plus a better microphone stand. This makes the audio portion of the videos sound fantastic.

Total cost for microphone, pop filter and stand: ~$135.

For the sales letter video, I used my Canon HG10 camcorder (which has since been supplanted by the Canon HG21) on a tripod mount, and shot in HD. I also recently invested in a wireless lavalier microphone so I don’t sound so “echo-y” on video.

This setup will not only help me with this product, but with many future products. Of course, if you don’t have the budget for a full-blown video setup, start with an inexpensive Flip HD camera. I do recommend budgeting for the above microphone setup, however; it’s well worth the cost.

Total Costs

At this point, I’d say I have well over 40 hours of personal time invested in this product, in addition to the costs above.

My total costs were $2618.63, not including copy critiques or my swipe file.

My recurring costs are $107/month for my shopping cart and merchant account.

If you subtract out the video camera and the wireless lavalier microphone that goes with it, and instead buy a $149 Flip camera, and create your product within Camtasia’s 30-day free trial window, your total costs would be $1176.63.

Will This Product Make Money?

This is the fun (and somewhat scary!) part of being an entrepreneur. You invest tons of time, and at least a bit of money. Unlike a job, you’re not guaranteed payment for that time. You may release a product and it totally bombs–or you may release a product where your total earnings make you an hourly wage that would make any bigwig CEO proud.

The only way to truly know if your product will be successful is to sell it. Don’t let yourself get overwhelmed, or think “I don’t have thousands of dollars to spend!” If you have more time than money, use your time to hone your copywriting and content creation skills. If you have some money, as little as a few hundred dollars is all you’ll probably need to develop a great product.

What to Do With A Minimal Budget?

Assuming you already know what product you plan to create, and have a name for it…

If I only had $300 to spend, no question, I’d spend it on a Killer Covers web design. You can borrow a microphone and get a free trial of Camtasia–but web design is harder to do yourself, and it’s worth it to pay Killer Covers instead of spending hours doing it yourself. (This, coming from someone who made her living as a full-time Web designer and developer for years!)

Recommended Reading:

• My Instant Swipe File. Very useful product, especially with its current low price. I purchased it and am using the template inside it to help develop my sales letter.

Are you planning to create an information product in 2010? Have questions about creating a product? Let me know in the comments!

Loyalty card schemes may be costing you cash.

There are two grocery stores I shop at regularly: Albertsons and Ralphs.

Albertsons is a SuperValu store, which those of you in other parts of the United States may know as a Lucky, Bigg’s, Cub Foods, or Jewel-Osco. Ralphs is a Kroger brand. (And both of them seem to have abandoned their apostrophes for branding purposes, but I digress.)

Ralphs is a 7.1-mile round trip from my house. Albertsons is 0.8mi and easily walkable. Yet I almost always go to Ralphs.

I finally figured out why the other day, and promptly became supremely irritated with myself. I was in Albertsons, about to buy $30 worth of groceries. Then my brain screamed, “You could be getting cash back for these if you had gone to Ralphs!”

You see, Ralphs has a loyalty card. (Those of you who shop at Kroger know it as the Kroger Plus Card.) Once you spend $500, they mail you a $5 gift certificate. Then, every time you spend another $100, they mail you another $1. They calculate these discounts four times a year. I have seen people in the store redeeming certificates worth as much as $16. That’s $1600 in groceries in 3 months! So, clearly, the card works.

Are Loyalty Cards Really a “Deal”?

Let’s do the math. Is Ralphs loyalty card actually a deal for me?

My car gets just under 30mpg — let’s say 28mpg for easy math. So I’m burning a quarter of a gallon of fuel every time I choose Ralphs. I burn only 7% of 1 gallon to drive to Albertsons.

Assuming a gallon costs $3, it costs me 21.4 cents to drive to Albertsons (and I could easily walk, saving even that.) It costs me 75 cents to drive to Ralphs. I’m saving 53.6 cents every time I go to Albertsons.

Assuming (for the sake of argument) that their prices are the same, I’d need to spend at least $50 every time I go to Ralph’s…just to break even on the gas money I spent to get there!

Does Ralphs have lower prices? I don’t think so. In my comparison, the prices between the two stores are nearly identical, and are only offset by specials. Ralphs loyalty card only makes it appear that Ralphs has lower prices.

It’s the mental mindf*** that makes me so upset; that irrational nag I get in my brain every time I shop at a store other than Ralphs. The one that says, “You could be saving money, and you’re not!” That same nag ignores hidden costs like gas money.

What Can We Learn From This?

The point of this post isn’t to show you how you, too, could save 53.6 cents. The point is to understand that we are often driven by emotional impulses that we truly believe are rational decisions.

“I save money by shopping at Ralphs” would be a statement that, on its surface, appears to be correct. Doing the math and unearthing the hidden costs proves it false. (I didn’t even calculate extra car wear and tear, and extra time on my part spent driving there and back!)

Loyalty card schemes are designed for people who want to feel good about saving money. In most cases, however, I doubt they actually save us much money.

Loyalty card schemes reward you for buying a full-price item at one store instead of finding the cheaper one somewhere else. They reward you for shopping at the same place every week instead of looking at the specials and deciding where is best to shop that particular week. And they do this by inserting an insidious nag into our heads; one that says, “If only I had shopped there instead…”

As Henry Hazlitt wrote in Economics in One Lesson, “The bad economist sees only what immediately strikes the eye; the good economist also looks beyond.” Looking beyond and calculating the real cost may show you that what you thought were some of your most rational decisions were really just rationalizations.

Next time you shop at a particular store or buy a particular item, think about why you are doing it. Are the prices really lower, or do you just think they are? Have you taken the time to seriously compare? Are you driving out of your way to save a few pennies when you could shop closer to home…or maybe even leave the car in the garage?

Are your choices rational, or rationalizations?

Recommended Reading:

• Economics in One Lesson by Henry Hazlitt. I strongly believe that if everyone in the U.S. read and understood this book, we wouldn’t be in the economic crisis we are now. It’s absolutely worth reading, and it’s also an easy read.
• What Can You Do to Help Solve the Credit Crisis? Spending money isn’t the right way to help our country. What is? I give specific details.
• Why You Don’t Save for Retirement. Does saving for retirement seem pointless to you? I felt that way, too, until I figured this out…

Loyalty card schemes photo credit: joelogon

What’s the difference between you and that “idiot”?

Why Many “Idiots” Are So Successful

Idiots Successful entrepreneurs truly believe in their products/services, and aren’t afraid to show it.

When I was young, my dad told me, “Erica, no one wants to hear about your success.” What he meant was, “Don’t brag about all your stuff.” (For many of his cohorts, “stuff” equaled success; he’s an attorney.) Unfortunately, I took his comment literally. I almost never talked about my business.

I finally opened up at a conference several years ago. I talked about hiring my first employee, about how my business had hit 6 figures in annual revenue, and how we were growing like gangbusters. People’s jaws dropped. “How old are you?” they said over and over again. (I was 24 at the time.)

“But it’s no big deal, right?” I said. “Anyone can do this.” I truly believed that at the time.

Now, I know that’s not true. Very few people have what it takes to start and grow a successful business. Most of the people I met at that conference are still tinkering away, not really getting anywhere. Some of them gave up and got jobs. Only a few are true standouts.

Step 1: Be Confident in Yourself and Your Product

Not long after that, I was at another conference for up-and-coming entrepreneurs. The guy putting on the conference brought up an entrepreneur a year younger than me on stage and started talking about how great this guy’s product was.

I was infuriated! I had just started to believe in myself and stop believing that anyone could do what I do, and here was this “kid” on stage talking about how awesome he was. His company didn’t even sound that great! Unhappy about the situation, I resolved to corner the guy who ran the conference and talk to him about my business. I figured the problem was that he just didn’t know me, and I intended to resolve that.

I plopped down next to him at lunch, but he was swamped with conference logistics. He didn’t even give me the time of day, despite me waiting patiently for nearly an hour for him to finish lunch. In the meantime, other people kept coming up to him, and frankly, he looked exhausted. At the end of the hour, he walked away in conversation with someone else who was helping him run the conference.

I was so mad that I went straight to the elevator, intending to go up to my room and have a good cry! Instead, another conference attendee stopped the elevator door just as it was closing and noticed the tears running down my face. “What’s wrong?” he asked.

I blurted out the whole story, about how I had waited an hour for this guy and he completely ignored me the whole time. I was so angry that he hadn’t recognized me or my business. I mean, I was supposed to be this awesome young kid, right? So why was that dolt on stage while I was having to struggle to get this guy to even remember my name?

I was so angry I don’t remember the exact words he said to me, but later, in my room, as I cooled off, I got the gist of it. No one knew me because I wasn’t confident in my own abilities. I wasn’t showing this guy, or anyone else, for that matter, why my company was different and awesome. I was playing my cards like I was running just another web hosting company, instead of having a groundbreaking, Earth-changing idea.

I had brought this on myself. I was not happy.

I resolved then and there that I was going to be confident. I was going to have to act it, even if I didn’t believe it inside just yet.

Over the next year, I started to articulate why my business was better than every other web hosting company. I had to take on that role. I had to believe it myself. We weren’t just another web hosting company, we were changing the whole shitty web hosting industry by offering better service, a real office where our customers could hang out, top-of-the-line bandwidth, and real, personal relationships with our customers.

The company took off and soared. We were doubling in size every year.

Step 2: Stop Thinking of Sales as Manipulative

A side effect of this was that I no longer thought of sales as manipulative. Manipulation was when you had crap that you were trying to package as gold. Nope, we had the best stuff, and you either wanted the best or you didn’t. If price was your main objective when buying web hosting, we no longer wanted you as a customer. Go somewhere else and put up with their crap. We were for the people who wanted to run businesses and not have to deal with outsourced support, “What’s your customer ID?” as the first words out of a tech’s mouth when they called, and a staff who didn’t have a clue about your business. In short, we were the opposite of most cost-cutting, bureaucratic, run-by-robots hosting companies.

I closed 90% of the people who walked in the door. I gave each of them at least half an hour to just talk about their businesses without me interrupting them at all. Then I explained how we would be their partner, a part of their team, and there to support them as they grew. Their faces lit up. Most of them signed contracts and handed me the first month’s payment on the spot.

When I internalized that we were the best web hosting company out there in terms of dedicated servers and colocation, my business went from 6 figures to 7 figures.

Unsuccessful people either don’t have the best product, or they don’t believe they have the best. You have to have both to be really successful. The great news is that your best product can be for a tiny niche at the beginning. You can always grow it later.

Were there other great web hosting companies out there? Could my customers have gone with another one and have been just as happy? In some cases, sure. Was there another hosting company as good as mine in the San Jose metro area? To this day, I don’t believe there was. We had cornered the market on true personal service.

Make the best-in-class product, then believe it. Go out there and show people what you have. With confidence on the front end and a great product behind it, you won’t need to manipulate anyone into buying it. Instead, you will bring in happy customers for life.

“No fear or doubt; there’s one way out — you’ve got to believe.” DB Boulevard, “Believe”

Recommended Reading:

• Sharing My Journey to $1 Million. I wrote this just after selling my company, but I was still under embargo from the sale, so I had to write it as if I still owned it. I was coming to terms with what had just happened.
• Web Site Copywriting Secrets. What’s the difference between web sites where visitors buy products consistently — and web sites where visitors don’t buy at all?
• It’s Time To Completely Change Your Marketing Strategy. Our customers are speaking a different language than they were last year. The sales tactics that worked then won’t work now without major tweaking.

Web site copywriting secrets; how to get your
web site visitors to buy.

Many times, it’s not your product, price, or site design that make your visitors whip out their credit cards. Instead, your web site’s copywriting — the words used on your site — make all the difference.

Marketing gurus charge a lot of money to tell you how to write better web site copy. In fact, I recently paid copywriting guru Chris Haddad 5 figures to help me write sales copy for Inspiring Innovators and Be The Authority, my two upcoming membership sites.

Today, I’m grateful to be able to share with you two web site copywriting secrets I paid a ton of money to learn — and that will probably make your business a truckload of easy extra money. These work on any web site, by the way, not just on those lo-o-o-ng sales letter sites. After reading them, take a look at your web site. How can you update its copywriting to fit these guidelines?

Web Site Copywriting Secret #1: The Copywriting “Kiss of Death”

Over 90% of small business websites fail this simple test: Who does your home page talk about? If it’s about you, the company, you have failed.

The ironic thing is, as a consultant, if I were to come in to your business and implore you to change your home page from “Welcome to XYZ Blah Blah Company, the leader in the ZYX industry” to something like “XYZ Company helped Maria X of ABC Company deliver 57% more whatchabobs in 2008…learn how we can help you, too”, you might be quite resistant to that! (Another good reason why I don’t want to do big consulting gigs.)

There are two key points why Maria’s story is so much more effective than the stuff about you. One, it gets people interested. How, exactly, did you help Maria deliver 57% more whatchabobs? (If you put a picture of Maria — the real Maria — up, it’s even more effective.) Two, it draws people into your story as a company without hitting them over the head with how great you are.

No one cares how awesome you are, the bulleted list of services you provide, and where you are located. All of that information should be moved off of your front page and onto your About or Contact page. The main information on your home page should be how you helped a customer.

Specific is better. More people are interested in Maria’s story than in the fact that you helped 497 companies last year. Why is that? Whenever people read a story, they unconsciously put themselves in the other person’s shoes. People can’t really picture “497 companies”, but they can picture themselves as Maria, running around like a crazy person until you helped her.

Web Site Copywriting Secret #2: Envision Your Customer — Down to Their Eye and Hair Color!

When I talk to small business owners, I usually ask, “What is your target market?” I am surprised at how often they have some vague, grandiose answer. One friend I talked to recently said, “Women.” When prompted for more information, she said “Ages 18-65. Well, and maybe younger girls too. And moms. Moms who want their kids involved in the program. But maybe moms who don’t want to be in this program with their kids, too.”

She is certainly not the only one who has no idea what her target audience is! I would say at least 50% of new web hosting companies define their target market as “small businesses.” Recently, some of them got a little more savvy and said “Local small businesses.”

None of these answers are acceptable!

Learn from Trader Joe’s and the “unemployed college professor”
Recently, I was reading Made to Stick. Its authors mentioned that Trader Joe’s had done this exercise. (If you haven’t been to Trader Joe’s, it’s a grocery store that is rather kitschy and sells good food that’s inexpensive and healthy. in fact, I am eating some of their Baked Cheese Crunchies as I write this.)

The good folks at Trader Joe’s decided their market was an “unemployed college professor who drives a very, very used Volvo.” They gave the guy a name (let’s call him Don for this blog post), a location, an age, named what kind of car he drove, wrote out his career path, and filled in as many details as they possibly could about him. Then they passed this guy’s profile around to all their decision makers.

This made Trader Joe’s decisions easy. What kind of food should they stock? Well, what would Don eat? What would he want in his fridge and freezer?

Where should they open a new location? Well, where does Don live? Probably in suburbia…so let’s open a location there. Maybe near a college…so let’s open in those areas.

What should their marketing be like? What would Don read? (Trader Joe’s delivers a “newspaper” to all their loyal customers every couple of weeks, full of goofy stories about food instead of the typical full-color spread of specials.)

What should their promotions be? What would Don enjoy? (Currently running at my local Trader Joe’s is a weekly drawing that you can only enter if you bring your own reusable grocery bags.)

It’s Scary to Do This!
Most people are scared to do this because they are afraid it will exclude customers. On the contrary — I doubt you’d find too many people who exactly fit Don’s profile walking around your local Trader Joe’s at any given moment. But knowing an exact person that you are marketing to helps you quickly make decisions.

I really thought about this one for Inspiring Innovators. Finally, I decided my target market was me at age 21. I had started Simpli (my hosting company), but it wasn’t really going anywhere, and I doubted it would make it. I wanted to start a different web business, but I just didn’t know anyone who had created a successful online business.

I was struggling to figure out who I was and where I fit in this life. I didn’t have a whole lot of friends and I certainly didn’t have access to any millionaires. Yet I was pretty sure that this Web thing held the key to both a lot of money and a far better job than the one I had just left at Sun Microsystems.

Getting Into the Mind of Your Customer
I took several deep breaths and plunged back in time to that full-of-doubt younger me. I was angry that my boss at my previous job had no respect for me. I was making crap wages and was scared to give my consulting clients my bills. The driver who drove the train I took to work had a higher salary than me. I couldn’t seem to make ends meet.

It was the middle of a recession and there were no jobs. I had just interviewed for a job, aced the freakin’ interview, and then they declined to hire me because they said I would just leave to start my own business. But at that point, I would have happily given up my business for the $74,000/year salary they were paying.

I let all that sink in, and then I started writing. And it all came out…all the emotions went right down there on the page. So frustrated because I knew this web thing would work, but didn’t have anyone to talk to about it. No one I knew was successful. The successful people were hidden far away from me, and I didn’t even have enough money to take them out to dinner!

These case studies Inspiring Innovators was selling were awesome because there I could finally learn from the experts with money that I had available. I could scrounge up the few dollars a month to pay for the interviews and listen to these folks. I was convinced that one of them (or more than one) would hold the key to me getting out of debt and making my life better.

The Big Shift
As soon as I put myself in my own younger shoes and wrote from that perspective, something shifted. I was no longer writing a sales letter. I was writing a story. I knew it would resonate with so many of you, because I knew who my customer was. I was doing this all for that lost, frustrated 21-year-old, and it was an amazing gift for her.

This exercise isn’t easy. Sometimes your target audience won’t immediately be clear. It took me over an hour to get the courage to think that maybe my target for Inspiring Innovators was me at a younger age. I had a lot of doubts — shouldn’t it be someone else? But the younger me fit so perfectly that I couldn’t shake it, and I ended up writing the sales letter with a fervent passion.

Your target may be you. But it probably won’t be. Who do you know who could benefit from your business? Take them out to lunch and listen to their fears and frustrations. Then write the sales letter for them…just them. Even if they don’t buy, if you have the picture of them clear, someone else will. Better yet, they will feel like your web site copywriting was made just for them, and they will be more likely to be loyal customers.

Inspiring Innovators launches next week! Make sure you are subscribed to erica.biz, as I have some amazing free videos, a free Blog Success Manifesto, and even a free case study for you! Stay tuned…

Recommended Reading:

• Here’s how to become rich: Deliver value. Change the world. How I decided to change Simpli’s website to better reflect what our customers wanted. A real-world example of some of the concepts in this post.
• Hypnotic Writing: How to Seduce and Persuade Customers with Only Your Words by Joe Vitale. This is an excellent copywriting resource; I have been referring to it as I write for Inspiring Innovators.
• Why Your Business Isn’t Doing As Well As It Could Be. Why most bloggers and web business owners don’t make a lot of money.

Frank Kern shows off his Porsche.

Frank, like many of the Internet marketing “gurus”, got his start in the old days of Internet marketing — which was actually something like 1998, or maybe 1999. Back when, as Frank and the other gurus will tell it, nobody thought it was possible to make more than $100,000 in a day. Now that record has been shattered, and Frank and many of the others who speak at these conferences have made $2 million, $3 million, or even $5 million in a single day from a product launch. Typically, they also all promote other gurus’ products to their huge mailing lists.

As you listen to Frank, or any of the other “gurus”, recount their stories, you can’t help but notice two things: All of the gurus seem to be male, and pretty much all of them are white. At Mass Control, for instance, there aren’t any female speakers, and probably 85% or 90% of the attendees are male.

Today, I was speaking to one of the attendees, and, in a moment of attempted bonding, he asked me the following question:

“Erica, don’t you think Internet marketing is just an old boys’ club?”

I looked at him, surprised. “No, I don’t think so,” I said. “But you have to remember, I came from web hosting.” As I state in my speaking gigs, as far as I know, my company was the only female-owned web hosting company to make over $600,000 in revenue in the first nine months of 2007.

As I thought about it more, however, I realized how insidious his comment was. It would only be said by someone who 1) isn’t successful in this industry and 2) wants to bond by commiserating with someone else of a like mind. His comment is a “mind trap” designed to let him off the hook for his own failure.

The Real “Sucker Punch” That Causes Most of Us to Fail

Frank talked this weekend about negative influences: the news, for instance, which constantly reminds us that we’re in a recession and that people are getting laid off. But there is another, deeper influence that many of us have to deal with, and that is the voice in our own heads that constantly reminds us how terrible we are at whatever we attempt.

That voice is the real sucker punch that causes most of us to fail. It reels you in with “You can’t be like [insert guru's name here] because you’re not [whatever they have already accomplished.]” It can be as simple as “You couldn’t have won the race because you can’t bike like Lance Armstrong” or as deep as “I don’t need to make a million dollars because I don’t want to sacrifice my entire life to my work.” (News flash: Most millionaires don’t, either!)

Whatever your version of these thoughts are — and I guarantee you either have them now or have had them at some point — they stop you cold when you attempt to achieve your goals. If you really want to make a million dollars, travel to 60 different countries, or quit your job, the primary thing holding you down isn’t “The Man”, but your own thoughts and fears.

So, What About Internet Marketing?

Is Internet marketing just an “old boys’ club”? Well, there is sure a preponderance of evidence that it is. All of the speakers here are male. They have already bonded with each other. They all promote each others’ products. They love to sell high-ticket items, shutting out those who don’t have an extra $2,000 to $5,000 laying around.

That’s the story you could tell yourself, and it would be “true” in a sense. But I choose not to participate in telling myself that story, because I choose to make my success or failure my own problem. Instead of using this story as a crutch, I choose to let it empower me. There are no female speakers here? Great: I choose to be the first. No woman has done a multi-million dollar launch in the Internet marketing industry? Thank you; I accept your challenge.

It is an honor for me to be a part of this industry. When I discovered Internet marketing last year, and signed up for Mass Control, I had no idea what I was getting myself into. Later, as I spoke at two Internet marketing conferences, I realized what an amazing group of people had found each other. Here were people with similar life goals to mine: work less; make more money; work from anywhere; enjoy life. I have met some of my closest friends and mentors via Internet marketing.

Here is just a partial list of people whom I consider friends. All of the people on this list have made at least several hundred thousand dollars in Internet marketing, and many of them are millionaires. Yet, they are amazingly approachable, friendly, and considerate:

• Pat O’Bryan
• Ken McArthur
• Ben Mack
• Chris Haddad
• Simon Leung
• Eric Farewell
• Adam Urbanski
• Bob “the Teacher” Jenkins
• Carrie Wilkerson
• Steven Wagenheim
• Elmer Hurlstone
• Willie Crawford
• Ross Goldberg
• Jason Moffatt
• Dr. Mike Woo-Ming
• Travis Sago

I am continuously awed by the generosity this community provides. Last year at this time, I remember turning to the person next to me at Mass Control 1 and asking, “What is a continuity program?” (Turns out it’s what us web hosting folks call MRR, or monthly recurring revenue.)

This year, I have built a list, added over 1,000 new subscribers to my blog, and am getting ready to launch my own continuity program, Inspiring Innovators. When I have a question, I call these guys, or ask them on Twitter. If I need help, they are there for me. When I speak with them, I know they are committed to helping me make my next million dollars in this industry. They want me to succeed even when I am down on myself. And really, that’s all I could ask for from any friend.

Shaking Out Your Own Story

There was probably at least one person who read this blog post and is now thinking “Yeah, but Erica, they like you because you’re already a millionaire” or “Yeah, but you’re a cute girl,” or something else that you aren’t. Clearly, that’s why I’m successful and you’re not.

Or maybe it’s just a story you tell yourself to make your failure okay with you. I choose to not accept failure. My story says, “These people are my friends because we can help each other. I am there to support and listen to them, and they are there for me. We enjoy sharing in our mutual successes and encouraging each other to get up and try again when we get knocked down.” Which one is “true”? Well, does it matter?

The real question is: Which story will help you achieve your goals?

Recommended Reading:

• Perfectionism is Your Worst Enemy. My most recent update on achieving my goal of making $1,000,000.00 a year in Internet marketing.
• You Are Worth More Than You Think. Think you can’t afford to hire other people? Think again.
• Finding Time to Pursue Your Dreams: Free Up 750 Hours A Year With One Simple Change. Don’t have time to start a business? Try this on for size.

How do you envision your future retirement?

Some shocking statistics recently caught my eye. The median IRA balance is just $55,000, and the median 401(k) balance is just $15,000. Baby boomers are working longer, since most do not have enough saved to retire comfortably. And, given the statistics, it’s likely you are in the same boat.

Why is it that so few of us save enough for retirement? Why are we so woefully underprepared?

I usually search for answers for these thought-provoking questions in marketing books. Often I find that lack of good marketing is underneath a lot of personal finance problems. Car manufacturers are great at showing off the sleek curves of their latest model, but “retirement” typically doesn’t have flashy commercials. But is it really that simple?

While reading the book Made to Stick recently, I came across an interesting principle: concreteness. The authors, Chip Heath and Dan Heath, describe it as one of the features necessary to make an idea stick in your mind. They cite an example of The Nature Conservancy, a nonprofit organization dedicated to preserving land. When they touted how many acres of land they wanted to save, people simply weren’t interested. But when they showed a particular piece of land they wanted to save, and named it “Mount Hamilton Wilderness” (after a local mountain), people flocked to help them.

Why is this? Our brains aren’t wired to have a tangible picture of “1,000 acres”, but they are wired to understand “Mount Hamilton Wildnerness.” Making something tangible — giving us the picture in our minds — makes it meaningful.

How does this relate to retirement?

One huge factor in why we don’t save for retirement might simply be that we lack a visual anchor in our minds for the word “retirement.” In other words, if I ask you to define “retirement”, you probably won’t have a quick answer. You may visualize some old person fishing or sipping a Mai-Tai on the beach, but you probably won’t relate that to yourself.

But if I ask you to define “watermelon”, you can probably visualize not only the fruit itself, but one or more times where you’ve eaten it, smelled it, or seen it.

How do you avoid the trap of buying tangible objects such as houses and cars instead of saving for retirement and investing? You start by making the things you desire tangible.

Making Retirement Tangible

There is probably something you spend $5 a day on that you could do without. A daily coffee; a Coke or two from the vending machine; a lunch out instead of brown-bagging it; premium cable TV and video games. Whatever it is, no matter how silly–write it down. Chances are you can easily visualize whatever it is. You can probably remember the last time you used it (especially since it probably hasn’t been that long ago!)

$5 a day, invested at an 8% annual return for 30 years, is over $228,000. (It’s actually even more than that, since you’re investing daily or monthly instead of annually.)

The problem is that’s where most personal finance authors stop. They show you a latte vs. $228,000 and expect you to be in awe. They expect that you will do the logical thing and cut out the latte.

Since Starbucks is still in business, that obviously doesn’t work.

Why don’t you pick the money? Simple: $228,000 is not tangible. It doesn’t have meaning or value to you. Those lattes hold an emotional significance and a value to you, but $228,000 does not.

Our next step, then, is to make $228,000 actually worth something to you.

What $228,000 is worth to you will be different for every person. Let’s assume for now that you plan to retire with your newly found $228,000. (By the way, if you plan to retire in 40 years instead of 30, that $228,000 becomes nearly $535,000!)

Now that you have visualized the video games, coffee, movies, or whatever you’re spending money on now, the next thing to do is visualize what you want out of retirement. So you have your $228,000 (or $535,000.) What are you going to do with it?

If you write down some lame one-word answer like “fishing”, by the way, I will kick you.

Visualizing Your Retirement

How about this retirement option? “For my retirement, I’m going to sell some of my possessions, take 4 years and travel the world. During those 4 years, I plan to see Paris and buy a designer dress, go to Switzerland and ski the Alps, and head to Australia and try a vegemite sandwich. I’ll save some money by living cheaply, and I will learn to speak at least one other language.”

Or this? “I plan to move to Mexico and rent a gorgeous beach house. I will enjoy living in a community with multi-cultural folks who love a warm, sunny climate. I’ll learn how to wrap a burrito so the stuff inside it doesn’t fall out, and I will teach music–particularly piano–to others to make a little pocket change.”

What’s happening here? Suddenly, your retirement is becoming real. If you do this right (look at travel magazines and talk to others for ideas), you’ll feel a shift in your thinking. Suddenly that latte doesn’t seem appealing…not when your dream is put off another day into the future!

Want to seal the deal? Find a picture or two that you feel represents your future retirement and place them where you will see them every day. If you feel so inclined, write something inspirational on the pictures. Maybe you can even think of a catchy saying to remind yourself of what’s really important. What about “A Coke a day keeps my retirement at bay?”

Most of us haven’t even taken a few minutes to think about what we really want out of retirement. No wonder, then, that nearly 50% of us choose to cash out our 401(k)s instead of rolling them over. It’s not just about how much money you will need to retire and when you can afford to retire; it’s about making retirement tangible. Real. Beautiful, even.

On Buying a House

This same line of thinking helps us understand why people buy a house, even at their own financial peril. Even when they know that renting and investing the difference could make them a millionaire, they still choose to buy.

Why? Simple: “Investing” isn’t tangible. Neither is “a million dollars.” (You can’t picture “a million dollars” as easily as you can a watermelon.) But a house is tangible. You can see it, walk around in it, live in it. I could just have easily named this article “Why Most People Buy A House Instead of Becoming a Millionaire.”

If you have a spouse or significant other who is interested in buying a house — or there is even part of you that desires it — numbers probably won’t change your mind. But what if you consciously decide to rent for less money every month and invest the difference? Remember to make it tangible. “If we choose to rent our current place instead of buying a house, we can afford to go on a vacation to Europe this year.” Maybe you can retire five years earlier than if you owned a house. (But remember to plan out exactly what you’re going to do once you do retire!)

Once you add in property taxes, home maintenance, water, garbage, and HOA or Mello Roos fees, renting a home typically comes out ahead. In fact, a recent study showed that middle-age renters in 2004 were more wealthy than the equivalent homeowners. Use this to your advantage and enjoy your rich life!

Take a few minutes now to sketch out and visualize your dream retirement. Discuss your plans with your spouse or significant other. Make it as tangible as possible. Maybe you can even start working toward it in other ways (learning the language of a country you want to live in, for instance, or planning a small trip to a potential place to live.) The more real you make it, the more likely you will be to save for it.

And remember: An indulgence today will lead your retirement astray!

Recommended Reading:

• Made to Stick. If you are selling a product, or if you are interested in why certain stories and commercials seem to stick in your head better than others, this is the book. Well worth reading.
• The Impending Retirement Crisis at MoneyNing. David does a good job of breaking down why our country is facing a retirement crisis.
• One Decision That Can Make Anyone a Millionaire.Can buying a used car instead of a new one really make you $1 million? I break it down.
• Carnival of Personal Finance #199. This post was an Editor’s Choice!

Here are four reasons why you should consider starting a blog:

1. Building relationships with a community of supportive readers.

One of my favorite examples of a blogger building a devoted following is Jim Klinge. Jim is a real estate agent with a specific focus — North County San Diego, CA. His office is based in Oceanside, a small city about 60 miles north of San Diego. He’s managed to build a following of several thousand subscribers, which has translated into countless commissions for his real estate agency.

What makes Jim different from all of the other real estate agents? First of all, most real estate agents don’t blog, so they miss out on the opportunity to attract people who don’t live nearby. Since I live in San Jose (about 8 hours north of San Diego by car), it’s unlikely I would ever meet a San Diego real estate agent. But through Jim’s blog, I can get to know him.

Jim has a unique personality that, in my opinion, is the epitome of a successful businessperson. He’s blunt and straight-shooting, yet obviously cares about his business and his clients. When potential clients come to him and want to sell a house, he gives them a range of prices to list in. If the client thinks their house is worth more, and refuses to compromise, Jim declines the sale offer. How many agents do you know who value honesty that much?

Jim’s blog is entertaining. He does funny video tours of houses, waxes philosophical about how he’d change the real estate business, and posts listings. He’s upfront about how much he thinks properties will sell for. The camaraderie on his blog shows — he has regular commenters, holds contests, and is patient with those who say they won’t buy yet.

Many business owners are aware of how important it is to develop a personal connection, but the key that many are missing is that it’s critical to be transparent. That means admitting that you, your company, and your industry aren’t perfect. Being a cheerleader won’t get you as much business as simply being honest and truthful will. Jim gets this, with the result being that if I ever want to buy a house in or near San Diego, he will be the first one I call.

2. Connections.

One of the biggest successes I’ve had from my blog is the ability to more easily land public speaking gigs. When I request a speaking gig, I simply point the people who run the conference to this blog, showing them posts like How I Turned My Mediocre Website Into a Million-Dollar Business. (I typically speak about building a successful business.) More often than not, I get the gig.

It’s also huge to build connections with other bloggers by guest-posting on their blogs. I save some of my best posts for guest posts on other blogs so I can gain exposure to a new audience. Building a relationship by writing great guest posts means that when it comes time to promote a new product I’m creating, I email these bloggers and they recognize me as someone who has helped them by guest posting on their site — not just another PR flack or face in the crowd.

These relationships will make me a lot more money in the future, and I also get an “in” to talk to others who wouldn’t otherwise be that interested in me!

3. Influence.

Having a blog is like owning your own small media outlet. Post your opinions on just about anything and you have a ready audience who will listen. Whether they agree or disagree, if your post provokes a reaction in them, you will get feedback.

You can easily build this influence into something bigger. Besides parlaying it into guest posts, you can write articles for magazines, get quoted in press releases, and — what may be the biggest benefit of being a successful blogger — use it to motivate others to change their lives in some useful way.

For instance, I know that many of you currently reading found my blog through patrick.net. I posted several articles about real estate (and will continue to post them!) that made it onto that website. From the visibility that I received from those articles, I estimate I’ve helped to convince over 1,000 people to save money by not buying a house. I have received many thank-you letters from those who saved thousands of dollars by waiting to buy a house. My website helped convince them — or, in some cases, their significant others! — to wait.

4. Money.

It should be obvious that having a blog will help you make more money — but the methods of making money with a blog may not be so obvious. You can use Google Adsense (the tiny text ads you see on many blogs) to make pennies a day, promote affiliate products that have a per-sale commission and make a few dollars a day, or create your own products and make tens or hundreds of dollars a day.

In all cases, having a blog with great free content — and being honest and picky about the products you choose to promote — will help convince others that you are trustworthy and that your recommendations can be taken seriously.

Two of the products that have been successful on my blog are ZipRealty and the Entertainment book. ZipRealty enables you to receive email updates on specific houses. Their search is also great; you can save a search like “foreclosures in these three cities with at least 3 bedrooms and 1500 square feet for less than $300,000″ and get email updates. It’s all point and click, and quite easy to use. I use it as a research tool and log in to their website at least once a week to view my saved searches.

For every person that signs up through ZipRealty on my website, I get $5. Since I use it, and know how useful it is, I have no problem recommending it.

I have a similar experience with the Entertainment book. My mom bought them when I was a kid; now I buy them for the American Airlines discount (5% off any fare, even the cheapest ones!) and the $5 of $50 coupons at Safeway. These two discounts alone pay for the purchase price of the book every year. Since I use it, I enthusiastically recommend it. Every time you buy an Entertainment book from this site, I get $4.

These small commissions add up. In my case, I don’t mention them much, but I still earn about $70-80/month from them. No small feat!

In my next post in this series, I’ll address how to become a successful blogger. Not setting up WordPress and a hosting account — that’s been covered ad infinitum on other blogs — but how to engage your audience and write more interesting posts, so you, too, can grow your blog readership and influence.

Feel free to leave your comments on why you do or don’t blog!

Recommended Reading:

• How I Turned My Mediocre Website Into a Million-Dollar Business. Website design isn’t as important as how you treat your customers.
• How Much Money Do Bloggers Make? on Problogger. Informal survey: Most make less than $500/month.
• ZipRealty. Sign up for an account and start tracking real estate prices in your area!
• The Entertainment book. Huge discounts at local restaurants and stores. Even if you only umse the grocery store coupons, it still pays for itself and saves you money. I buy one every year!

Your customers are speaking
a different language than they were
a few months ago…

Our customers are speaking a different language than they were even 3 months ago. The sales tactics that worked a few months ago won’t work now without major tweaking. Furthermore, I don’t see any business that has really picked up on our customers’ new language.

This came to light when I wrote a sales letter for a new product I released today. So far, the product hasn’t sold as well as my last one (which I released in September) did, even though in my opinion it’s as good or better than my last product.

In analyzing my sales copy, I felt there was something big I was missing. Then, in a flash, it hit me:

I wasn’t acknowledging the effect the recession is having on customers’ thinking.

I tend to blow off the negativity in the media; scoffing since the malls are still crowded and sales are only down a few percent from last year. I shrug it off. But that’s a mistake — because it’s causing a disconnect between my customers and me.

The New Story Your Customers Are Telling Themselves

A few months ago, in September, many business owners had this mindset: “I’m happy to invest in pretty much anything that is guaranteed to increase my business in some way.”

Now, what are business owners saying? “I’m going to be really cautious. The product or service not only has to increase my business, but it has to be cost-effective. And even then, I may skip it, since I’m interested in conserving my cash and making sure I can pay all my bills in 2009.”

It’s even worse if you’re selling direct to consumers. Their story has changed from “I’ll buy just about anything to make me or my family happy” to “I’m only buying the things we really need.” Or worse…”I’m simply not buying anything that can possibly wait until next year.”

Our customers’ underlying attitude has shifted to fear. Yet our marketing messages are still the same, parroting how customers can make more money, have more fun, or be happier.

We haven’t changed our marketing to account for many who are worried about losing jobs, having a business that will make less next year than it did this year, or who simply don’t know whether they will be able to pay their mortgage. We haven’t acknowledged our customers’ fear.

I have seen some banks attempt to acknowledge customer fear by running ads saying they won’t go out of business since they are well-capitalized. While on the right track, that marketing falls short, too. Going out of business is a story about you, not your customer. Your customer is likely less worried about you going out of business than they are about being able to pay their own bills.

How To Identify With Your Customers Today

It’s time to acknowledge where your customers are today. They’re worried. They don’t know what the future holds. They’re not sure if next year will be better or worse than this year, but they privately think it may be worse.

You must state all of this clearly in your marketing and communications, or you risk losing your customer base.

More than ever, our customers need hope. Take their fear and move them to a higher level. Build them a bridge to a better tomorrow. Show them, step by step, a path to make themselves better in some way. Reassure them that no matter what happens in the world around them, they can still be happy themselves. We all need to hear more of that right now.

This type of marketing and customer communications, done sincerely, will be the difference between the successful companies in 2009 and the ones that fall by the wayside. Start by letting your customers know you feel their pain. It’s time to step up.

Recommended Reading:

• Delivering the Best Customer Experience. Is emulating the “big boys” really a key to success?
• Three Business Ideas That Will Thrive In A Recession. Three specific ideas you can use to start a new business or expand your existing business during a recession.
• Worksheet Your Way to a More Profitable Client Base. An innovative idea to help you increase your profits.