This is a great question. Many bloggers–myself included–run promotions for both our own and other products on a regular basis. Some blogs are heavily promotional, with an affiliate link in nearly every post, whereas other bloggers make their money mostly through advertising and only rarely include affiliate links in their posts.

First, let’s look at things from a blogger’s perspective. Then, I’ll give you a few metrics to help you decide which marketers to follow online.

From a blogger’s perspective, affiliate revenue is often the only way to make a full-time income from a blog. My blog, as ranked by Alexa, is in the top 0.1% of all websites by traffic. Yet, as you’ve seen from my revenue numbers, I only make about $83/month from placing Google ads on my site.

So, for 99.99% of bloggers and website owners, ad revenue isn’t enough to even cover expenses, let alone provide a full-time income.

Enter affiliate marketing.

How Does Affiliate Marketing Work?

With affiliate marketing, you get paid when you refer someone who buys something. With ads, you get paid every time someone clicks on the ad. Referring someone who buys something is often a better deal all around: the affiliate gets paid more; the product owner only has to pay when a sale is made; and the customer gets a product that he or she will hopefully love.

There are all kinds of affiliate programs: big ones like Amazon pay 4-8% for any product purchased through their site, and thousands of other ones pay out for anything from web hosting to ebooks to coaching programs. Pretty much anything you can think of that is sold online has some sort of affiliate program.

The reason affiliate programs are so popular on blogs is that the commissions on big products can add up fast. Often, information products that sell from anywhere from $200 to $2,000 or more pay out a whopping 50%–and that doesn’t include bonuses. If you’ve seen Internet marketing websites promoting big $2,000 products from well-known names like Jeff Walker or Eben Pagan, they’re getting paid more than $1,000 per sale!

There isn’t anything inherently bad about affiliate marketing. It allows website owners and bloggers to make a full-time income online without having to drive millions of visitors to their websites every month. And it drives a whole lot of sales for publishers, manufacturers, and service companies.

But affiliate marketing does have its dark side. Take my most recent income numbers, for example. I made a list of the top affiliates for Profit Instruments, and immediately my email inbox got pounded by other marketers looking for me to promote their “make money online” products.

The Big Problem with Affiliate Marketing

Right on the heels of a successful promotion, you suddenly become aware of how much money there is to be made. This is where most marketers lose their integrity. I’ve seen it time and time again. Someone gets a nice list going of thousands of people who really listen to his or her advice. The list owner promotes a good product. All of a sudden, 5 figures of income rolls in.

Unfortunately, that income is mostly one-time income. Next month, the list owner starts back over at 0. So what does he or she do? Promote again, of course! And since he’s been inundated with new offers, it’s easy to promote something in the same niche. Rinse and repeat.

The problem with constant promotion is it “burns your list.” People who were used to receiving good content suddenly get hammered with sales pitches. So they stop opening your emails. And now you, as the affiliate marketer/list owner, are in a race. You have to constantly find more people to join your list so you can continue your sales pitches and make more money.

Internet Marketing’s Dirty Secret

Here is the Internet marketing world’s dirty secret: Replicable success is hard. A one-time success–selling something and making 5 or 6 figures–is easier than doing it repeatedly. Most marketers only see dollar signs and don’t have any clue how to build a relationship with their list. And building a relationship with your list–delivering good content again and again, without constantly asking for the sale–is difficult.

The relationship you have with your list is the cornerstone of building a successful business. As a blogger, it’s about learning to say “no” 99 times out of 100 to people who ask you to promote a product. It’s about giving up some money now in order to build the relationship down the road. And if you want to know why most Internet marketers, over time, don’t make it, this is why: They go for the quick buck over the relationship.

Finding the Genuine Marketers

So, to go back to Richard’s question: How do you tell when someone is all about making money vs. truly helping someone? You have to look at the persona they project. When you opt in to their email list, what sort of emails do you get from them on a regular basis? What percentage of the emails that you receive from them contain nothing but a sales pitch? If it’s 80% or more, I suggest unsubscribing from that list.

Yes, what I just said may annoy some Internet marketers. But if the list owner doesn’t take the time to write real content, deliver free teleseminars or webinars to help you, and if every email is a sales pitch, where is the value? You might as well be subscribed to an email list of the latest Google ads. Unsubscribe from those lists. Let’s collectively raise the bar on who we allow to sell products to us.

A good marketer acts as a filter between his or her audience and the product pushers. He turns down most products people ask him to promote. She promotes only the best products–those she truly believes will help her audience. And his emails to you are mostly good, thoughtful content.

There are thousands of bloggers and marketers who fit this profile. A majority of their content is helpful. Some of their content has sales pitches, but the sales pitches show a true interest in the product, not a copy-and-paste “XYZ made 20 zillion dollars and you can too…by tomorrow!” sort of pitch. They don’t promote every “big” launch. In general, they put relationships over sales–without forgetting that sales is what puts food on the table.

These are the people I encourage you to do business with.

Your Challenge for Today

Your challenge for today: If you’re subscribed to any email lists where you haven’t received any real content in months–just sales pitches–I encourage you to unsubscribe. Yes, even if you like the product or person. Raise the bar on who you do business with. Your credit card will thank you.

And if you’re a marketer: Today is the day you should write some real content, or shoot a video, that has NO sales pitch whatsoever. Maybe you can take the time to publicly answer a reader’s question, or share a quick tip you’ve learned that you know will help your list. Tell your list “Thank you” and let your readers know that you honor them. Your readers will appreciate you that much more.

Recommended Reading:

• Rosalind Gardner’s Super Affiliate Handbook. Looking to get started with affiliate marketing? Rosalind’s book is the definitive guide. (I’ll be doing a full review soon.) Check it out now!
• How Do All Those “Idiots” Make So Much Money? Does it drive you nuts that some idiot with a terrible product seems to be constantly making sales, when you know your product is better? What’s the difference between you and that “idiot”?
• 20 Scam-Free Ways to Make Money Online Fast. My huge list of real ways to make money online.

Increase web site traffic with these simple tips.

If you crank out piece after piece of great content, yet no one reads it, it can be demoralizing. (This, I think, is why most bloggers quit after a few months.)

If you have a great product or service that you know can help a lot of people, but no one knows about it, and you’re on a limited budget, it can seem impossible to get your business off the ground.

I understand. I’ve been in both of those places, and in both of those cases, traffic can help. Today, I’ll take you “behind the scenes” and show you one of the big ways I grew a business in a highly competitive industry to the $1 million mark, and also how I grew this blog to one that gets massive traffic every month–in the top 0.1% of all websites by traffic, according to Alexa.

Then I’ll show you how you can do the same thing…and grow your business by leaps and bounds without killing your wallet by buying advertisements.

The Big Myth: Just Write Great Content, and the Search Engines Will Love You

This big myth gets uttered all the time. It might have been true years ago. The theory behind this is, interestingly, never explained. Basically, it goes like this: Good content gets links from other sites. Those links count as “votes” for that content, which naturally drives your content to the top of the search engines for relevant terms.

There are all sorts of holes in this theory. The biggest problem is that most content creators really haven’t matched their content to what people are searching for in Google or other search engines. You can write a really awesome article about the best hotels for people traveling with dogs, but if your article title is “How Cutesi the Chihuahua and I Traveled the Country In Style”, well, no one will find it through Google because no one is searching for those words!

So, the first step in getting Google and other search engines to recognize your content as “good content” and send you free traffic is to title your blog posts and home page appropriately. Use the free Google Keyword Tool to find what people are searching for in Google, and target those phrases.

The second step is to get backlinks.

Getting Backlinks

What are backlinks? Backlinks are simply a link from another site to your site. You might have heard that links are important, but the real key is the anchor text: the text people use in their links back to your site.

That anchor text on the other site counts as a “vote” in Google for that phrase, for your site. Here’s a real-world example: This site is named Erica.biz. So, when someone links back to my site, they often use the text erica.biz. The link looks like this: erica.biz

Unfortunately, this is nearly worthless for me in Google, because Google is counting this as a vote for the keyword “erica.biz”. I’m already ranked #1 for that keyword. Even worse, people typing in that keyword already know who I am, so it’s not a great keyword to optimize for.

People who have sites named around popular keyphrases have a built-in advantage. For instance, ever wondered how popular personal development blogger Steve Pavlina gets so much traffic? I actually don’t even think he realizes this–either that or he’s pretty coy about it–but he named his site, stevepavlina.com, “Personal Development for Smart People.”

That means a lot of people link to his site with the keywords “personal development”–so much so that he’s ranked #1 in Google for the term! That term gets tens of thousands of searches per month, driving massive traffic to his site.

He’s also ranked #2 for “polyphasic sleep”. Steve’s secret is something I doubt he even realizes: his simplistic blog titles. Instead of some fancy title like “How to get more hours out of your day”, he named his article on polyphasic sleep “Polyphasic sleep.” Then, of course, people linked out to his article, driving it to the top of the search engines.

So, if you really want to rank well in the search engines, stay away from cutesy titles and stick to short, sweet, and simple titles.

By implementing these simple strategies on my own blog, erica.biz now gets over 10,000 visitors a month from Google. About 2% of them opt in to my email list. This means I don’t have to keep posting new content to get visitors and email list subscribers. My “evergreen” content does a lot of work for me.

What If You Don’t Have (and Don’t Want) A Blog?

But what if you don’t have a blog and/or don’t want one? If you just want to sell products online, getting free traffic from Google and other search engines will possibly boost your bottom line by 6 figures or more.

You probably know that I started a web hosting company in 2001 and sold it in 2007. Before that, though, I worked for a search engine optimization company for a few years–from 1997 to 1999. Although my job didn’t require me to understand the intricacies of search engines, I learned them anyway. Back then, Google didn’t exist, and it was mostly about just getting listed in search engines–Yahoo! being one of the more important ones.

I continued my study of search engines and their mysterious traffic-directing powers, and a couple of years into running my hosting company, I decided to run an experiment. I spent 3 hours tweaking my company’s website to optimize for two simple keyphrases: bay area colocation and san jose colocation. Back then, there was no Google keyword tool, so I used the Overture tool to find that these two phrases were searched about 300 times a month total.

Then I started backlink building to my hosting company site using those terms. A few months later, Google did its PageRank update and awarded my little hosting company site a PageRank 7. (For those of you who know how PageRank works, you know how rare a 7 is.)

We ranked #1 for those two search terms pretty quickly.

Keep in mind, I didn’t blog or do anything “fancy” to get those #1 ranks. My site was static HTML, built by hand. I rearranged the text on the pages every couple months, but didn’t do anything else–except build backlinks.

I always asked our customers where they found us, and about 30% of our new customers said “Google”. But the real gold mine was one customer who found us through Google and started out with colocating one server. His company grew by leaps and bounds, and every month, he colocated a few more servers with us to keep up with demand.

When I sold the business, he was our largest customer, paying us over $12,000/month! Including the other customers who signed up with us from that ranking, that’s over a quarter of a million dollars a year of verifiable revenue from the initial 3 hours of work.

Here’s How To Do This Yourself

Here’s a summary of what works when going for a #1 rank in the search engines:

• Don’t overlook “tiny” keywords that get a few hundred searches a month–if you can easily convert those visitors into buyers.
• Backlinks are more important than great content. Good content with great backlinks trumps great content with no backlinks or few backlinks every time.
• What you put in your homepage’s title and what you title your blog posts or site’s pages is of paramount importance.
• Screwing up search engine optimization or not understanding its importance can cost you 6 figures a year or more.

Now, the really good news: I’m set to release what will become one of my flagship products for 2010. It’s called Maximum Clients, Minimum Time, and in it, I explain how you can do the same thing I’ve just described above. It’s designed for everyone who is tired of going to “networking events” and doing endless followup to get new clients. It will work for you whether you have a website right now or not–and no matter what you want to sell online.

For those of you who are still struggling with an idea, it will show you which idea to pursue. And for those of you with a website already, it will show you how to spend a little bit of time and get Google and other search engines to send you leads and clients effortlessly, month after month–without paying for ads.

In short, it’s the same procedure I used to grow my last business to a million-dollar business and the same procedure I’ve used to grow this blog to the top 0.1% of all websites on the Internet by traffic (as ranked by Alexa.)

Once you start down this path, you will realize there are a lot of nuances. For instance: Which keywords do you optimize for? How do you optimize your site for them? Once you’ve optimized your site, how do you build backlinks? I’ll be there to help you, step by step, as you get your business working for you, instead of the other way around. Best of all, Maximum Clients, Minimum Time will be easily affordable.

Look for my product launch later this month. Until then, start with the Google Keyword Tool, and figure out what keywords you want to use with your blog or business website!

Have questions? Want more information? Please leave a comment below.

Starting your own business: The definitive guide.

First: I hear from many of you who have heard the advice that business should be about your “passion”. If I hear the words “find your passion” or “follow your passion” one more time, I’m going to stick a fork in the eye of the person who says it.

Starting your own business isn’t necessarily about “following your passion”, and you don’t have to “find your passion” before you start a business. Stop beating yourself up for not having a passion that people will pay you large sums of cash for, and follow this four-step process to starting your own business instead:

1. Figure out who your customers are.

Most aspiring business owners start from the wrong place. They start from “What do I know how to do?” or “What’s my passion?” That’s where a lot of people get stuck. They don’t know what their passion is, or how to monetize it.

I start from the opposite end. I listen to people having conversations, and my most common questions when talking to others are “What do you want?” or “What do you need?” That way, I find out what is missing in their lives, and then figure out if I can build a product or service around that.

I love watching reality TV, but I don’t expect someone to come dump 5 figures a month in my lap for me to do so! Instead, I start out looking at what customers will pay for. Then I create products and/or services that I know people want and charge people for them.

The benefit of looking at business from this perspective is that it’s not hard to find customers. You already know there is a market segment that is asking–no, begging–for this product or service. You don’t have to create a market. Just find the people who need what you have to offer and cater to them.

2. Survey some potential customers to see if they are interested in what you want to offer.

Again, this starts with the customers, not with what you want. Ask them what their thoughts are on your upcoming product or service. (This isn’t the right time to pitch them.) Ask them if they would use it. Ask them what you can do to help them make a decision.

This is your time to write down all the questions they have. “Is x included?” “Would I have to…?” You need to be able to understand what questions your customers have, then answer those questions in your website copy or when you pitch potential customers later on.

3. Once you get some “Yes” answers, sketch out what you have to offer.

Regardless of whether you’re selling a product or service, customers generally hate open-ended offers. You want to be able to offer a few packages of services or products and let them choose.

Imagine going into a restaurant and having the waiter say, “Okay, what would you like to eat tonight?” You reply, “Well, what’s good here?” The waiter says, “Everything, sir!”

At that point, you’d probably be stymied. Do you order a hamburger, a steak, or a salad? You’d also probably never come back to that restaurant again.

Now compare that to your sales process. If you’re a web designer or other service professional, you’re probably used to asking the client what they want first. That’s a good sales tactic. But then most people make the mistake of leaving it open-ended, or worse, letting the client decide what he or she wants. (Hint: Most people have no idea what they want. “Um, a website. That gets us business.”)

After you ascertain what the client is looking for generally, you pull out the menu of services that you provide. If the client wants something outside the scope of your menu, you can figure that out with him or her. But your menu sets up some “ground rules” when working with your client, and it also allows you the freedom of being able to systematize some parts of your labor later on.

Always have a menu.

4. Sign a few clients and make sure this is what you really want to do.

In some cases, you will sign some clients and then feel pulled in a totally different direction. When I started Simpli (my web hosting company), I originally planned for it to be a content management system–like WordPress is today. I developed the system myself, putting countless hours into it, and deployed it for several clients.

My clients all needed a really good web hosting company, and I had terrible experiences with web hosting in the past–including having my server, with all my data on it, stolen right out of a datacenter! I didn’t have a company I felt comfortable recommending, so I started my own.

Pretty soon, the web hosting side was growing faster than my content management system side, even though I was putting 80% of my time into my development work. I could tell it was time to switch gears, so over the course of several months, I wound down my content management system business and went full-time into web hosting. And the rest, as they say, is history.

It’s totally fine if you get a few clients and then say “This isn’t for me.” If this happens to you, find someone you feel comfortable referring your clients to and then refer them out. Then do something else. That isn’t “failure” at all. In fact, be proud of yourself for taking the step most people don’t have the guts to take: starting your own business!

A Totally Different Way of Looking at Business

This procedure is totally different from the way most people start businesses. Most people start with “I”. “I can do web design.” “I know how to knit.”

I challenge you, instead, to start with “You.” Who are your customers? What do they want or need in their lives? How can you help them achieve their goals?

Starting your business from what customers want or need will not only free you from the burden of discovering your “passion”, but it will also help you grow your business exponentially faster. Look around–the answers to which business you should start are right around you, in the conversations of others.

What do you wish you would have known when you were starting your own business? What advice would you give to other aspiring business owners? Feel free to share in the comments!

Choosing a domain name: Your difficult
questions answered!

In this post, I’ll answer these questions and more, and make some recommendations to help you choose the right domain name. Some of my suggestions may be controversial!

Short and Catchy, or Longer?

There are basically two types of domain names: short and catchy or long and keyword-filled. (I define “short” as anything with fewer than 8 characters before the dot.) Which type of domain name you use depends on how you plan to attract visitors to your site. If you plan to mostly attract people by word of mouth, use something short and catchy.

I tend to build sites that get most of their traffic from Google. In that case, a keyword-filled domain is preferable. What do I mean by that? Let’s say you own Snazzy Sandwiches in Saskatoon. You’d probably lean toward snazzysandwiches.com or snazzysandwiches.ca (since Saskatoon is in Saskatchewan, Canada.)

But you may also want to consider buying a keyword-driven domain name. In this case, more people are probably searching for “sandwiches in Saskatoon” or “sandwiches Saskatoon” than your business name. Unless you are the only sandwich shop in town, one of the best ways to capture this traffic is to also pick up the keyword-driven name–in this case, sandwichessaskatoon.com or .ca.

The key here is to find out exactly what people are searching for in Google and other search engines, and picking up the “exact match” keyword domain name. That means no “the”, “a”, hyphens, or any other extraneous words. So, if people are typing in sandwiches Saskatoon, you want sandwichessaskatoon as the first part of your domain name.

How Do You Find Out What People Are Typing Into Google?

I’m a big fan of using the free Google Keyword Tool to figure out domain names. Find a keyword that is searched between 10,000 and 50,000 times per month, and see if the exact match domain name is available.

Every once in a while, you’ll hit a home run. I had a client once who did marketing for a certain type of business. He paid me for consulting time to figure out how to get more business from his website.

I ran the Google keyword tool for him and found out that business owners were actually typing in the type of the business followed by “marketing” about 800 times a month! Better yet, the exact match .com domain name was available! With some savvy tricks, I helped him conquer 2 of the top 3 slots in Google for those keywords. It added 5 figures a year to the bottom line of his business…and took about three hours of work.

What if the .Com Isn’t Available?

But more often, the exact match .com is not available. It’s either in use or for sale for hundreds or thousands of dollars.

Let’s say you’re setting up a site to sell home remedies. You hit up the Google keyword tool and see that “home remedies for acne” is searched 40,500 times a month. (This is true, by the way.) That’s a huge avalanche of traffic if you get ranked #1 for that keyword, and domain names with the keyword in them naturally rank higher than domain names without.

But all the domains are taken. The .com, .net, and .org are all parked–meaning they don’t have any real content on them, and may be for sale. You know the owners will probably want hundreds of dollars for them. The .biz looks like a scam site.

So what do you do? This is a pretty common quandary. Do you go for one of the weird extensions like .cc or .tv, or try to buy one of the more common domains like .com or .net? Or do you just start over from scratch?

First, let’s talk about what all those weird extensions are. Any two-letter extension, like .cc, .ws, and .tv, are actually country codes. Some countries, like Tuvalu, a tiny island nation of just 12,000 people, got extraordinarily lucky in the “domain name lottery”. Tuvalu licensed the .tv extension to Verisign, a top domain name registrar, for “not less than $1 million per quarter.” Wow! (Here’s the entire list of country codes.)

I tread very carefully with these two-letter extensions. Except for ones that have been widely adopted, like .tv and .us, I tend to avoid them. I also tend to avoid .org, unless you just want to set up a blog on it and you’re not selling anything, because .org is, in many people’s minds, still associated with its original purpose of serving non-profit organizations.

In order, I prefer: .com; .net; .biz; .us. Since none of those are available, if you were my client, I would advise you to go back to Google at this point, and search for similar keywords. Sure enough, a similar keyword, acne home remedy, with 27,100 searches per month, has the .biz available, and in this case, I’d advise you to buy that.

But Don’t You Need a .Com?

There’s a myth floating around that you need a .com to rank better in Google. That’s a complete myth, I assure you. For Google, it’s more important to have proper keywords in your domain name than to have the .com.

The reason to get a .com is because people tend to assume that your site is the .com. So, if you don’t have the .com and someone else does, that other site will pick up some traffic that would otherwise go to your site.

If the .com is available for registration, go ahead and get it. I recently found a keyword that had 27,100 searches per month, and the .com was available. I immediately snagged it and plan to use it as an advertising-driven niche site. But more commonly, you’ll find the .com is for sale for a few hundred dollars.

In this case, I recommend that you use an alternative extension, set up your website, and then reinvest your profits. That’s what I did with Blog Set Up. I used the Google keyword tool to figure out which domain I wanted, and then bought the .us. The site was profitable immediately, and I reinvested the profits back in to buying the .com version of the domain name. The acquisition closed this week, so blogsetup.us is now blogsetup.com!

In conclusion, I only recommend buying an expensive domain name if you’ve already launched your business and are making money. It’s perfectly acceptable to start your business on a .biz or .us, especially if you’re getting most of your traffic via Google. Then buy the .com with your first profits. If your business isn’t profitable, then, you’re not out hundreds or thousands of dollars with the .com. But if your business is profitable, I recommend snagging the .com as soon as you can afford it.

Do you have thoughts or suggestions on choosing a domain name? Let me hear them in the comments!

Recommended Reading:

• Namecheap. I recommend Namecheap as a good domain name registrar. Never use Go Daddy to register domains.
• Go Daddy. The link here is to a site called nodaddy.com, which was set up by a friend of mine after Go Daddy screwed up his entire business by shutting his domain name down for days. I know another person this happened to, as well. Never use Go Daddy for anything–not hosting, not domain name registration, anything. Again, I recommend NameCheap (above).

I was at a local high-end grocery store buying meat, produce, and a pile of gluten-free goodies. Richard, who has recently gotten into cooking, decided to make organic hamburgers for dinner. We were out of cheese, so I walked over to the cheese section to pick up some cheddar slices.

I was confronted with a variety of gourmet cheeses. And they were pricey–running about $4.50 for 8 slices!

I picked one at random that said “cheddar” and looked at it. And that’s when I noticed something odd:

Right there, at the top of the package, in the “money spot” — the spot where my eyes went right after reading the brand — it said “Rennet Free.”

What in the world, I wondered, was “rennet”?

My brain immediately came up with this image:

(Oops, that’s a ferret!)

I buy a fair amount of expensive cheese, and I love cheese. As determined by willingness to spend $4.50 on 8 slices of organic cheese instead of going to a mass-market store and buying a block of Velveeta, I’m definitely in this company’s target demographic. But I have no idea what “rennet” is or why it’s important that the cheese be “rennet free.”

As cheesemakers, Horizon is probably well aware of what rennet is. But their customers probably aren’t. In that regard, most of us are “stupider” than Horizon.

I looked up rennet on Wikipedia, and it turns out that rennet is made from calves’ stomachs and is used to turn milk into cheese. Killing baby cows to use their stomach enzymes to make cheese is a bit disturbing. But the Wikipedia article also says that “by 2008, approximately 80-90% of commercially made cheeses in the United States were made utilizing GMO-based (non-cow) rennet.”

Surprisingly, the back of the package doesn’t go into any detail on what rennet is. Horizon missed an opportunity to educate their customers on why it’s important to buy rennet-free cheese.

I bought the cheese, but I didn’t become brand-loyal–I won’t go looking for Horizon again. Horizon missed an opportunity to gain a long-term customer with their label.

Are your labels (or your websites) doing the same thing to potential customers? Let’s take a look at the flip side…

The Flip Side: A Great Label

Here’s an example of a product wrapper that encouraged me to buy a product based on the label alone:

This is Skippy natural peanut butter. This jar is a bit old, but shows exactly why I bought it.

The first thing that motivated me to pick up the jar was the award. It says “2008 Chef’s Best – Best Taste.” This is important to me. I can’t tell you how many brands of peanut butter I’ve tried that don’t taste that great–especially the “natural” variants. The award provides fantastic social proof–other people have liked it, so you will too!

The second thing that got me to put the peanut butter in my cart was the big “No Need to Stir!” headline. Another problem with “natural” peanut butters is that they tend to separate. Skippy has managed to (mostly) fix this. I find myself still needing to stir it sometimes, but it certainly doesn’t separate like a lot of other peanut butters.

Skippy’s label has gotten me to buy at least 10 jars of its peanut butter over the past 2 years. In fact, I now look for their brand first when I buy peanut butter.

Getting Your Customers to Become Brand-Loyal

Skippy really nailed exactly what their customers wanted, whereas Horizon didn’t. Skippy’s jar speaks in easy-to-understand language that even small children would be able to read. Horizon’s package doesn’t.

What would I do if I were Horizon–and what lessons can you take from this?

1. I’d survey my customers. In the survey, I would ask what values were most important to them. (Here’s my step-by-step video walkthrough on how to survey your customers for free.)
2. I’d redesign my label to get customers to buy. The top value from the survey would get the most prominent placement on my label. I’d remove “rennet free” (or relegate it to the back of the wrapper in the ingredients.) I would make sure even kids understood everything on my label.
3. I would consider adding a testimonial from a satisfied customer on the front of the package. Of course, this would need to comply with any legal requirements regarding testimonials. (Consult an attorney in your area to make sure any testimonials you feature are in compliance.)
4. As an alternate or addition to #3, I would enter contests to win awards with my product, and then seek permission to display those awards prominently on my packaging.

Even if you aren’t selling a physical product, it’s important to consider what message you are sending to your customers. For instance, is your website reflecting the top values of your customers, or is it all about you and your company?

I went through this exercise a few years ago with my web hosting company and realized I needed to completely redesign our website. I blogged about what I discovered here…it’s worth reading if you’re currently selling products online.

How will you take this lesson to heart and change your website and/or product packaging? Feel free to post in the comments.

Recommended Reading:

• Here’s How to Become Rich: Deliver Value. Change the World. An epic post from 2007 where I apply this concept to my web hosting company’s website. Definitely read this one if you’re doing business online.
• Sharing My Journey To One Million Dollars. Written just after I sold my business, but when I was still in the “embargo period” and couldn’t speak publicly about the sale. I write candidly about the ups and downs of building a $1 million business.
• You Are Worth More Than You Think: Overcoming The Key Reason Entrepreneurs Fail. If you have ever said, “I just don’t have enough time to do [an activity I love]“, this advice is for you…

But all the “how to” information in the world won’t help your business succeed. Your own ingrained beliefs are stopping you without you even knowing it. In fact, the biggest obstacle to your success (I hate to say it) may be you.

We all have a set of beliefs about how the world operates. We form many of these beliefs to protect ourselves: we know that a fire will burn us, for instance. But there are some insidious beliefs–perhaps beliefs we don’t even know we have–that can seriously damage our earning potential.

One belief that is incredibly common is the belief that money is scarce–that there is only so much of it to go around. I was reading a friend’s blog recently and came across this paragraph:

“In the end, there is only so much of the almighty dollar to go around…somebody has got to sit in cattle class and it isn’t always the lazy arses. Quite often it’s those people who are ‘making stuff that matters, even if it seems stupid because it feels good and important.’”

Whenever I read, hear, or see someone say that, I know they’re broke.

Is Money Truly Scarce?

Scarcity happens in real life, and it starts at a young age. Your parents probably told you “no” when you asked for something when you were younger. Maybe you reached for that last can of soda in the fridge or apple on the counter only to find out it was gone. You wanted another helping of dinner, but it wasn’t available…the bowls and plates were empty.

That’s scarcity in action, and it’s easy to think that applies to money, too. For someone to be rich, someone else has to be poor, right?

Not at all.

Money is being created and distributed all the time. (If you want the technical details, read up on fractional reserve lending.) Our world has more money, that is worth more than it ever has been before. We live in staggering luxury compared to those only 50 years ago.

Consider this:
In 1950, only 9% of U.S. households had a TV.
In 1970, less than 1% of households in the U.S. owned a microwave.
In 1990, only 0.25% of the world population owned a cell phone.
This year, in 2010, only 26.6% of the world population will use the Internet.

We are unimaginably rich. And the best thing is that the trend will likely continue. There is no shortage of dollars to be earned (or spent!)

Who Are The Unsuccessful People?

I tried coaching people in a monthly program in 2009. I launched quietly–most reading this wouldn’t even know I did it. I took 20 students. I figured I’d be able to easily help them see their first online success.

Some of my coaching students have done really well. But many floundered. At first I wondered what I was doing wrong. Then I talked to some other coaches, and found out this is pretty normal.

One of my coaching students, J, wanted to set up a blog and be making $10,000/month within 30 days. He stated to me in our first 1-on-1 call that this was his goal. I told him I appreciated his enthusiasm, but that his goal wasn’t realistic. I explained he would have to work hard, probably for several months, before he saw much income at all. And only then, after he pushed through The Dip, would he see any real success.

He dropped out of the program. It wasn’t the answer he wanted to hear.

I now understand why many people don’t make it in business. They assume that they can start with 2 hours a week of spare time and no previous online business experience and be making 5 figures a month online within a month or two.

That’s the extreme case. Then there are many more in the “fat middle” who muddle their way through it for about 3-6 months before giving up. In the first two weeks, they have huge enthusiasm. They’re ready to take this on! It’s going to be great! Amazing! And then they fizzle. Slowly but surely, they stop working on their projects. Their blogs fall by the wayside. They get preoccupied with the “next big thing”. They give up.

I can’t tell you how many people I know who made anywhere from $30 to $100 a month and then gave up. The number astounds me. What they don’t understand is that $30 a month to $10,000 a month or more is about 24 months in the making of figuring out the systems that work and replicating them. They only see $30 a month and give up, thinking it’s a waste of time.

So, the honest truth, is that those who “sit in cattle class”, as my friend wrote it, really aren’t lazy. They just give up too soon.

Or they have another harmful belief: They’re uncomfortable with selling.

“Sales is For Slimy People”

Going deeper, we find a strong concern with many budding entrepreneurs: that if you sell something to someone, they are left with less than what they had before. If you sell them a $20 book, they’re suddenly $20 poorer.

To get over this feeling, you just have to be confident that what you’re selling them is worth far, far more than the money they paid to acquire it. Perhaps the knowledge in the $20 book you sell them will enable them to make far more than the $20 they paid for it. Perhaps it will help them find the romantic love of their dreams, or lose weight, or be happier.

It’s that confidence that many of us are lacking. We write the story for our potential customers, making assumptions and judging them. We assume they can’t afford something, so we don’t bother trying to sell it to them. Or we remember other stories similar potential customers have told us about how they can’t afford it, and assume this potential customer is similar.

Here’s an extreme example: Your friend is dying from a disease. Coincidentally, you happen to have had this same disease earlier in your life, and you’re now cured. It took you a lot of time and effort to find the cure, but you finally found a $2,000 pill that worked.

Could you convince your friend to part with the $2,000 to save her life?

That’s selling.

If you wimp out on this question with an answer like “If it really worked, I’d buy it for her!”, I suggest you do not start or attempt to run a business. I’m serious about that point. Go find someone who wants to sell and work for them…or make it your #1 priority to learn how to sell to someone who truly needs your product.

Sales: The Key Ingredient to Success?

When you start a business, it’s your job to sell like your prospects’ lives depend on it. And, to take this even further, it’s an equally important job to only sell products that are really worth it to your prospects, in order to engender goodwill.

To take a recent example from my own playbook, I was comfortable promoting the crap out of Profit Instruments both here on my blog and to my email list. I personally reviewed Profit Instruments, thought it was worth it, and even offered amazing bonuses to those who bought through me to help people succeed. I really believe that if you follow the system in Profit Instruments, you can be successful online. (Note: I’m not selling it right now, because Profit Instruments is sold out. I write this because I truly believe it.)

As a result of my genuine belief in Profit Instruments, 183 of you bought it through my link. That is an incredible number. It’s so huge in part because I don’t promote something different every week. I pick a few things that work well and promote them hard.

I was a driven salesperson in the web hosting industry. The more commoditized and cutthroat the industry you are in is, the more sales skills matter. Contrary to popular belief, though, sales isn’t all about skeezy convincin’ and fast talkin’. The biggest sales skill is also one of the hardest to learn: listening. The key is getting to know your prospect’s story first and then fitting what you’re selling to their needs…and being honest if what you’re selling doesn’t fit their needs.

You must be a closer in order to succeed in business. That means, if your prospect really needs what you have to offer, you have to ask for the sale and then get them to take action. Sell something that matters and that will truly help your prospects. Get your friend in the hospital to buy the $2,000 miracle pill. Get creative if that’s what it takes. But close the sale.

Using Your Business Skills to Make a Difference

Lydia, one of my four foster kittens. I sell people what I believe in and what they want to buy. Then I use that money to do awesome things in the world, like help foster kittens. I partnered with a nonprofit no-kill shelter here in San Diego: The Rescue House.

Rescue House gave me four kittens that had been abandoned by their mother. I bottle-fed them, took them to the vet, and loved on them for hours at a time. I’ll have the foster kittens for a few more months, at which time they will go to a permanent, adoptive home. My goal is to foster another set of kittens again next year when “kitten season” comes up, as well.

The foster kittens are just one of my nonprofit, charity activities. Without sales skills, and without believing that what I offer is the best, I wouldn’t be able to fund these charity activities. (Kitten food alone runs $6-7 a day!)

The market speaks for itself. I wouldn’t get paid a lot of money to foster kittens all day. But the market pays a lot for products on how to make more money, so that’s what I sell. I don’t fight the market or beg for it to be different. I don’t whine about inequitable distribution of money. I simply sell what works, and use the money I make to feed four hungry–but very cute!–kittens.

Did you fail the “friend test” above? Buy this book and read it cover to cover: Getting Everything You Can Out of All You’ve Got: 21 Ways You Can Out-Think, Out-Perform, and Out-Earn the Competition by Jay Abraham. I’ve read it and it’s one of the few books I go back to again and again for business advice.

Her response: “Well, these people are just starting out…they don’t have a whole lot of money, right?”

I replied: “Be careful. Don’t write the story for your potential customers.”

What Does “Writing the Story” Mean?

We all have a story: a compilation of thoughts and beliefs that got us to where we are today. Where we go wrong is that we tend to assume that everyone else’s story is the same as our story. Case in point: my friend started her business from basically nothing, and wouldn’t have had thousands of dollars to throw at a workshop teaching her how to start her type of business.

But there are plenty of people out there who have several thousand extra dollars and want to use that to create a sustainable income doing something they love. Some of those people will become her customers. She can’t write the story that everyone starting her type of business doesn’t have the money to invest in a workshop on how to run a business the right way.

We often “write the story” for others when we are afraid of doing something. Here’s one that happened to me recently. As you know, I’ve been helping review Profit Instruments. I’ve also been guest posting a lot, and as it happened, two guest posts of mine ran this week on two other popular blogs, resulting in a huge influx of new traffic and brand-new subscribers.

As I sent the launch emails yesterday and the day before, I wondered if I should somehow not send the emails to people who had just subscribed to my list. Here was the story I wrote for them: “They just subscribed in order to receive great content, and the first thing I’m going to send them is a pitch. My long-time subscribers know pitching is incredibly rare for me, but new subscribers won’t, and I may alienate them.”

Wow…that’s quite a story! Ultimately, I realized I couldn’t, and shouldn’t, write this story for them. It may be true that I alienated a few subscribers. However, it would probably also be true that I would lose sales by not sending that email to new subscribers. When in doubt, do what’s best for your business. I sent the email even to new subscribers.

Where Are You Writing the Story?

Are you “writing the story” for potential customers of yours? Are you afraid to send out a pitch for something that’s amazing and would help many of them, because you fear you may alienate a few of them? How about writing the story about how they wouldn’t be able to afford increased prices?

Ultimately, all stories have a root in your own fears–rejection and/or not being liked by others are two of the most common ones. It’s true that when you pitch a product (any product!), some people will complain. But others will buy it. Same with raising your prices…there will be some complaints, but most of your customers will stick around, assuming they enjoy doing business with you and you deliver great value to them.

Overcoming the stories we write in our heads is one of the most difficult tasks in any business. We all want to be loved and accepted, and the stories we write are an “easy way out”–a way to tell ourselves it’s okay to not rock the boat. But rocking the boat, making pitches, and raising prices are what you have to do to run a successful business.

Even seasoned entrepreneurs struggle with this, so you’re not alone. I catch myself writing the story constantly. Once you’re aware of the fact that you’re writing the story, however, you can stop the process in its tracks, recognize your inner fear behind it, and boldly do the right thing anyway.

Where has writing the story for your customers held you back in your business? What are you doing to overcome it? Let me know in the comments!

Recommended Reading:
Here are the guest posts I wrote for other blogs recently. Read them all; they’re all worth your time:

• Video: How to Get Thousands of Visitors from Google. A how-to video blog post I wrote that ran at Daily Blog Tips yesterday. Step-by-step instructions on how to get Google to send your website tons of traffic.
• Struggling With Your Blog? Try These Three Simple Tips. This post ran at JohnChow.com. Straightforward tips, but many bloggers, especially new ones, don’t do these…
• Would You Hire This Freelancer? Another controversial post. This one ran at Freelance Folder and has over 100 comments that debate my conclusion.

My friends Pace and Kyeli wrote a whole book about how we assume everyone else’s story is the same as our story. I own it and it’s a great read. Check it out: The Usual Error.

But today, I bought one. And for some of you, I think it might be the right decision, too. Hear me out, and you may be on your way to making money online, too:

The product first caught my eye because it’s a fairly straightforward way to make a significant amount of money online with small “niche” sites. It’s simple, really, and that’s the beauty of it. Each site he creates is a simple review site of a top-selling product. He teaches you how to get massive amounts of traffic for free by ranking for certain keywords. Then you set up a site, get traffic, and some number of people every month buy that product, making you completely passive income.

What’s awesome about this system:

• Requires no technical experience (he walks you through every step)
• Doesn’t require you to keep writing content every day
• Doesn’t even require you to set up a mailing list!
• Doesn’t require you to have a mailing list

Basically, even if you’re a beginner, you can make money with this system. And the system owner shows some nice proof…he’s making over $20,000 a month with this system. (I checked his traffic stats for myself, and he’s for real. First BS meter test passed.)

Of course, those big numbers are sales letter hype. He’s been running a “pre-launch” for a week, and I’ve watched all the videos, but I wanted to hold off on promoting it until I got my hands on it. I wanted to see for myself whether this was really possible.

I bought his product this afternoon and am already creating my first site. I found a product right under my nose that fits his criteria for promotion. It’s a product I already own and use. This made me excited…I didn’t want to have to promote scummy crap offers to make money.

I’ve already registered the domain name and set up the blog, and I’m looking forward to seeing how well I can rank and how many hundreds of dollars a month in passive income I will make with his system.

So, is it right for you? That depends. My policy is to be 100% honest, so here’s who I recommend this for:

• If you’re ready to make passive income online and don’t have your own product, this is a good fit!
• If you’ve set up a blog before, this is an excellent fit and I wouldn’t hesitate to put down the cash right now…you should be well on your way to making thousands of dollars a month within 30-60 days!
• If you’re looking for a good way to make money without developing your own product, this is a good fit.

Who is it NOT for?

• If you’re down to the last $200 in your bank account and need money tomorrow, do not buy this product. This product will take 30-60 days to return income. (Most affiliate programs take 30-60 days to pay out commissions.)
• If you have your hands full with 100 other products or don’t have a few hours to really dig into this product, don’t buy it.

 I can tell you for sure, despite the hype-y sales letter:

• I paid full price for the product and think it’s worth every penny
• This is a legitimate technique that should work in ANY niche, not just promoting “make money online” products
• He has proof it works in niches as diverse as health and fitness, finance, Farmville and Mafia Wars strategy guides, “how to” ebooks, digital cameras, tour guides, products on Amazon.com…pretty much anything you can think of!

If you know me, you know I do NOT promote B.S. I strive to test every product I promote. This passes my test with flying colors. I decline 99% of the products people ask me to promote. This product is in the other 1%. It’s worth it, and I feel strongly enough about it to stake my reputation on it.

It will work for you (or there’s a double your money back guarantee in case it doesn’t.)

Here’s my thinly-disguised affiliate link:

http://profitinstruments.com/812.html

I make a few dollars when you buy the product through this link. So, in order to thank you for ordering, here’s what I’d like to do for you:

Once you order, forward me your receipt (erica@erica.biz) and I will send you an invite to a free bonus online 1-hour workshop I’ll hold just for people who order through me.

In the workshop, I will reveal to you the website I’m creating as a part of this project. I’ll hold the workshop 30-60 days out so we can see together how much it’s earning and where it is in the search engines. And I’ll answer your questions about the sites you’re building through this product, and help you get them ranked higher in the search engines.

I will also reveal the names and oDesk links of the virtual assistants I’m using to create my site. This will save you hours of time and help your sites rank more quickly. That will be part of the workshop.

If you’re looking to start making money online, this is it. This is the only product in this niche I’ve recommended in months. Again, I’ve paid full price, gone through most of the product, and believe in it. Take action now, and I’ll be here to help you with my exclusive online workshop:

Order now or find out more information:

http://profitinstruments.com/812.html

Important note: This is a launch. This offer will close down in a day or two. DO NOT WAIT. I have waited in the past and regretted it. Don’t make the same mistake. If you’re ready to take a huge step toward earning passive income, and get my personal support and assistance on the workshop, go for it!

One caveat: Once I ordered, for some reason, I didn’t get the download link. If you have the same issue, please contact Ritoban’s helpdesk at http://customerhelp.in/. They responded to me pretty quickly and got everything straightened out, so please contact them directly.

Don’t forget to forward your receipt to me once you order!

Thanks, and I look forward to seeing you on the workshop in a month or so!

-Erica

P.S. Don’t pass this up. If you’re ready…go for it: http://profitinstruments.com/812.html

UPDATE: Wow, the response has been amazing! I sent this out to my email list last night and already nearly 40 people have signed up via my link! I really want you to succeed, so here’s what I’m going to do:

Assuming you buy through my link, I’ll hold not one, but two online workshops for you:

The first workshop, in 7-14 days, will be to walk you through the Profit Instruments method step by step and help you pick your niche. We’ll be going through the system, live, and I’ll answer your questions. (We’ll also record it in case you can’t make it.) In this webinar, I will reveal my own review site and show you what I’ve done so far with Profit Instruments.

The second workshop, in ~45 days, will help you make sure you’re getting the most traction in the search engines. I’ll go over some of my advanced SEO strategies so you can ensure you’re going to make money with this system.

I’m working this system to make money, and I encourage you to join me. I’ll be here to help you via these two workshops. Don’t hesitate…this launch will close down soon!

-> Click here to join us and start making money!

oDesk review from a real user. Does oDesk work?

I’ve definitely had success outsourcing jobs online. In this blog post, I’ll show you which tasks I recommend you outsource, how much you can expect to pay, and where to find good workers. When you’ve read this post, you can immediately take action and start taking some work off your own shoulders.

Step 1: Determine What Your Priorities Are.

As a blogger, my #1 priority is content creation. Though some people outsource content creation, I don’t. Every post you see on erica.biz (that isn’t a guest post) is written by me, and I star in all my own videos!

That’s what I don’t outsource. But around that, there are hundreds of hours of work I do outsource.

If you’re a blogger and feel overworked, the first thing I would recommend you outsource are menial blog tasks. You shouldn’t be upgrading your own plugins, tweaking themes, or upgrading WordPress to a new version. Let a worker handle that for you. I outsource all of that for $30/hour, though you can find workers to do it for even less.

If you’re still moderating comments by hand as a blogger, the first thing I’d do is to kick yourself. Ouch! There. This is one of the easiest tasks to outsource. Your time as a blogger is far more valuable than that!

Other things I outsource include video editing, audio editing (especially important for podcasters!), bookkeeping (keeps those accountant fees down!), transcription, Internet research (great for “10 ways to…” content), and programming tasks.

Thinking about what your priorities are should allow you to see at least one routine task you can outsource. Start there.

Which Freelancing Site is Better?

I’ve used eLance, RentACoder, and oDesk. Of the three, I vastly prefer oDesk.

Elance charges a minimum of $50 for project tasks, and a $5 minimum per hour. This alone makes eLance a complete waste of time for me. Often the tasks I want to outsource will only take 30 minutes or so, and many of the bids are far lower than $5 per hour.

RentACoder is great for finding talented programmers, but the interface is cumbersome and they encourage you to make the bids per-project instead of hourly. My preference is to pay hourly. I have used RentACoder successfully, but the interface bugs bothered me.

They also force you to communicate through their buggy system. For instance, when I was using it, every time I wrote a comma, it would delete the rest of my post. For a system written by programmers, I was amazed it had those bugs. They fixed that bug a few days later, but I was already used to editing out all my commas. Blech!

After using both those sites, as well as oDesk, I found myself coming back to oDesk repeatedly for a few reasons:

1. oDesk lets you see what your employee is doing–it takes screenshots of their computer every so often, and shows their level of activity (i.e. are they idle or actually working?) That way you know you’re getting someone who is actually motivated to work.
2. There’s no minimum bid or minimum per-project amount. I’ve hired freelancers who have billed me $7 for a couple hours of work. oDesk bills your credit card once a week, and manages all the payments to providers. If you have a dispute, there is a dispute resolution process. I used their dispute resolution process once and managed to get all my money back, so I’m happy with that.

Step 2: Write Your Job Description.

When you first set up oDesk, it will charge your credit card $10.00. That’s to make sure you’re legit. You can then use that $10.00 credit to hire your first employee!

The next step is to post a job. Keep in mind that the more specific you are in your job request, the better off you will be. A common mistake is to want to hire one person for everything. Hire for a specific, small job first. Then, when you’ve found the right person for that job, either expand what you want that hire to work on or hire another person for your next task.

In your job description, explain the task, then ask the provider to do something specific to make sure he or she has understood what is involved.

Here’s one I posted a couple months ago:

“Looking for someone who can do some research online and generate a list of 50 blogs that accept guest posts.

You MUST understand what a guest post is and how to tell which blogs accept them in order to be hired for this task!

To be considered, please send with your application one blog URL that accepts guest posts. Can be any blog — any topic — it is just so that we are both clear that you understand what the assignment is.

Assignment will need to be completed within 14 days; please do not apply if you are not available at this time.

Thank you,
-Erica”

I stated my requirements specifically, and asked them to prove that they had read the job description and were qualified for the job by giving me an example.

The great thing about oDesk is that applicants start coming in in just a few minutes. For simple jobs, you’ll get 15-20 qualified people in 20 minutes. For more complex jobs, you’ll likely have a qualified person or two within a day!

Typically, for the less complex jobs, I hire someone within an hour.

Step 3: Picking the Right Person

Since you’ve added a requirement in your job description, anyone who doesn’t meet the requirement should immediately be out. I also look at previous tasks the person has performed. I don’t take a risk on a new oDesk person; I want to see that he or she has done similar tasks in the past.

Ratings can be staged a bit, so a person who has all 5-star ratings still may not do a great job. However, the more similar jobs the person has done in the past and the better ratings he/she has, the more likely he or she will do your job well.

I usually look for someone who writes English pretty well in the application and who has met my specific requirements. I don’t usually pick the cheapest or the most expensive. And I tend to be biased toward the Philippines since I’ve hired so many amazing workers from there.

Step 4: Communicating with Your Employee

I usually hit “Interview” with 2-3 people and ask for their Skype usernames and whether they can interview right away. I communicate with all my employees via Skype text chat. I love Skype because it shows me what time it is in their time zone. It’s a free download, so there’s no excuse to not have it.

Whoever replies back the fastest and I can get on Skype gets the job. Usually, the person can start right away. I relay the job description again and make sure he/she understands. I remind the employee that I am available for questions if needed. I then send any files that are required either via email or Skype.

If it’s a long task, I ask for the employee to do one piece first, and then send it to me, so I can make sure it’s being done properly. For instance, for the above task, I asked my employee to send me 10 blogs, formatted in a spreadsheet as I requested, first. Once he had sent those, I gave the green light for the rest of the project.

Step 5: Closing and Leaving Feedback

Once the employee has completed the task, it’s time to close the task and leave feedback. If you have any issues with the employee, try to bring it up first instead of just leaving negative feedback.

In general, the employee will complete the task. Your next step is to close the task on oDesk. oDesk makes it simple to re-hire someone, so don’t hesitate to close the task unless you immediately have more work for the person.

To close a task, go to My Jobs -> Assignments, then click on the task and click End Assignment. Then rate the person. I like to add a bit of feedback as to what they did to help future providers, too. For instance, I might write “Great work inputting all the data into the Excel spreadsheet and then emailing it to my clients!” This lets future providers know that this person knows how to work with spreadsheets and email.

Conclusion: Is Outsourcing Worth It?

In general, using oDesk has worked out great! I’ve found many amazing workers, and only one truly bad one (a PHP programmer I fired after he had spent just a few hours working with me.)

I’ve hired people for a total of 387 hours of work on oDesk–that’s a lot of time I’ve saved!

It’s definitely worth a shot. You don’t have a whole lot to lose–since you can expect to pay $3-$10/hour for most basic work, it’s low-risk if you hire someone and he/she doesn’t work out. Since you’re starting with basic tasks and expanding from there, you can quickly gauge if a person is competent. And, if someone doesn’t work out for whatever reason, you can simply “End Assignment” and start a new job with new candidates.

I encourage you to try this route if you have any rote work that needs to be done that you’re currently doing yourself.

“But Isn’t This Exploitation?”

I’ve posted about outsourcing before, and I always tend to get comments about how I’m “exploiting” workers.

oDesk, and other outsourcing sites, are not exploitation. A worker has to actively apply for a job. No one is putting a gun to that worker’s head and saying “Apply for jobs online, darn it!”

A lot of the background of this theory, though, is that $3/hour (or less in some cases) “seems” exploitative to us. After all, most Americans couldn’t live on that wage.

To illustrate my point of view, let’s take a typical American named Craig and give him a $30,000/year salary. Now let’s place him in my hometown of Brookville, Indiana. Craig can live pretty well on $30,000/year. He can buy a 3BR, 2ba house on 1/4 acre of land (~$80,000), go out to the Dairy Cottage for some good fried chicken, and afford a decent car–you need one there, because the nearest Wal-Mart is 20 miles away. But overall, Craig will live a pretty happy life!

In fact, Craig’s salary is pretty close to the median household income of folks who live in Brookville: $32,670/year.

Now let’s put Craig in San Francisco. $30,000/year is painful to live on in San Francisco–I speak from personal experience! Tax rates are much higher, including a whopping 9.5% sales tax. Craig won’t be able to afford a house on 1/4 acre; he’s probably stuck sleeping on someone’s couch or living in a bedroom that was once a closet and sharing a house with several others. He probably won’t be able to afford a car–fortunately, he probably won’t need one. With lunch costing $9.25 for a sandwich, he’ll probably learn to cook. Craig probably feels poor compared to his other friends in San Francisco; San Francisco’s median income is $65,519.

In the Philippines, the median annual income is 111,000php, or about $2,450/year in U.S. dollars. Our friend Craig could live like a king there (and, in fact, many Americans do choose to retire to lower-cost countries like the Philippines and Thailand.) Divide it out into an hourly rate, and you’ll find it’s about $1.18/hour–which means people earning $3/hour are similar to folks earning $60,000-$90,000 annually in the U.S.

Of course, “middle class” means different things to different people, and you’ll likely find a “middle-class” lifestyle in the Philippines to be far different than here in the U.S. But the important thing to note is that none of these people feel exploited. In fact, they’re thrilled to have the opportunity to prove their worth, and they are some of the nicest people you’ll ever have the pleasure of working with.

I know outsourcing can be a touchy subject, but I use this story to help you break through your own barriers. We know you wouldn’t work for $3/hour, but a sandwich doesn’t cost $6 in the Philippines, either. It’s all a matter of perspective. Should you still have concerns, I encourage you to spend time in third-world countries. See for yourself the type of people you’re giving opportunities to. It will change your perspective entirely.

Outsourcing is great for you, but equally great is giving other people an opportunity to share in your success. It will help you double the amount of work you can do and deliver even more to your clients and prospects. And when you find the right people, you’ll wonder how you ever lived without them!

Give outsourcing a shot today. You have nothing to lose. Get started with oDesk.

Have a question on outsourcing? Ask me in the comments!

Recommended Reading:

• Five Steps to Freedom: How to Outsource. In my earlier post on outsourcing, I show how to outsource common household tasks, like cooking and cleaning, to make your life easier.
• oDesk. Set up an account today and get started outsourcing. It’s painless.

Here’s the truth: You probably don’t need to lower your price! In actuality, you can tweak your sales presentation or website by adding just a couple sentences, and that will close significantly more sales.

Read on for more details…

Why They Didn’t Buy: What Is Happening in Your Customer’s Mind?

Something I’ve probably never talked about on this blog is that I have a lot of issues with my teeth. I have big teeth and a small mouth, which has caused numerous problems over the years.

I’ve had pretty much everything done to my mouth, including several pulled teeth, retainers, a bionator, braces for 9 years, Invisalign, and five (!) gum grafts (which are major surgeries.) My teeth have been a mess ever since I was a kid, and my parents and I collectively have spent a small fortune trying to fix them.

I recently attended the Longevity Conference in Costa Mesa, CA. One of the speakers there was pretty interesting; she mentioned one of my specific problems–gum recession and regular gum grafts–as a common issue. And she said, as my dentist had mentioned, that gum grafts only last about 10 years. She claims to have found a way to cure this issue. If you follow her procedures every day, not only would you not have to have gum grafts, but you also wouldn’t have to go to the dentist all the time.

If You Don’t Set the Anchor, Someone Else Will

I was at the conference with a friend of mine, Wendi. During the talk, Wendi whispered to me that her son had a similar problem to mine and bought a Water-Pik to help his gums. It really helped clear out all the bacteria that were irritating his gums. I wondered idly how much a Water-Pik would cost, and came up with a number: $75.

In the meantime, the woman on stage was talking about a blend of essential oils that she had developed that, when put on floss, killed all the bacteria between your teeth and helped your gums out. She held the bottle up. A thought wandered through my mind: I’ve bought bottles of essential oils before that were a similar size. And the bottles cost between $8 and $16.

At the end of her presentation, I was pretty excited about the possibilities of not having to deal with gum grafts and constant dentist visits, so I got up and went to her booth to see what she was offering.

She presented me with a small pouch of various items. It included a toothbrush, a bottle of the essential oils that kill all of the bacteria, a tongue scraper, some dental floss, and a couple other miscellaneous items. She also handed me a laminated sheet of paper with bullet points describing each item.

I started the conversation being very interested in what she had to offer. But I also had a number in my head: $75. $75 just seemed “reasonable” to me for what was in the pouch.

Then I asked her how much it was. She said, “$200.”

At that point, I put the pouch and the sheet of paper down and walked away.

The Answer (It’s Not Lowering Your Price!)

From the salesperson’s perspective, this loss is a big deal. Here was someone–me!–who perfectly fit her target demographic: teeth problems; lots of surgeries; the prospect of more annoying surgeries. This kit could potentially fix all of that. It would seem, on the surface, to be a perfect fit. What happened?

You may have had this happen, too. When you meet certain potential customers, you think, “Ah, this is exactly who I envisioned would buy this product.” Yet, they don’t buy.

And you may think your answer is to lower your price. Here, I’m going to surprise you: It’s not the price itself, that mattered. You didn’t fail because your price was too high.

You failed to connect with that person because you didn’t set an anchor.

Here’s what happens. In our brains, we are constantly comparing what you have to offer with other stuff that we’ve either bought in the past or are thinking about buying. And, whether we know it or not, we have numbers in our heads of what we expect to pay.

Quick: What would you pay per month for a standard web hosting package? $8/month? $10? Yep, that’s your anchor.

How Starbucks Reset Anchors for Millions of People

What would you pay for a cup of coffee? $1.50? $3.00?

Aha–now here’s where it gets tricky. Starbucks managed to reset our anchors for a cup of coffee, didn’t they? We were all used to paying $0.99 or $1.50 or so at Dunkin’ Donuts or the local place. Suddenly, Starbucks came in, and now $3.00 (or more!) is the new normal.

How did they do that? I watched Dan Ariely’s presentation at South by Southwest, where he explained the concept of anchors and how Starbucks managed to reset our anchor for something many people drink every day–not an easy feat!

The first trick they used was to make their stores completely unlike a typical “coffee shop.” They ripped out the fluorescent lighting and piles of donuts and sold fancy pastries instead. Then, you had to learn a new lingo to order. Instead of a “small coffee”, you now order a “venti latte.”

They added comfy chairs, wi-fi, interesting music (that they then sold in the store!), and gourmet drinks like the Frappucino. The first time you walked into a Starbucks, you may have thought people were crazy to pay $3 for a cup of coffee. But, as Starbucks emphasizes, it’s not just a coffee you’re buying. You’re buying into an experience–a far more upscale experience than the Dunkin’ Donuts down the street could provide. You can feel safe meeting people and hanging out at a Starbucks, but you probably would grab a coffee and go at the other place.

Starbucks became a profit machine because they completely destroyed the anchor we had for “cup of coffee” and created a new anchor of “upscale experience”.

As a business owner, you have to understand that if you don’t create the anchor for someone, they’re going to create it themselves. In the dental hygiene workshop I attended, the speaker failed to create an anchor of “buy this or you’ll likely be subject to a $4,000 surgery, only a small portion of which will be covered by insurance.”

She set no anchor, and the anchor I had for “Water-Pik”, which my friend said had helped her son, was $75. Where did I come up with $75? No idea–but it was her lack of setting an anchor that killed the sale.

Are Anchors Rational?

Dan Ariely wrote a book called Predictably Irrational: The Hidden Forces That Shape Our Decisions–which is really a must-read for business owners. In it, he reveals an eye-opening study of setting anchors.

A professor asked students to think of the last two digits of their Social Security number. Then he asked them to bid on various items in an auction. Each person was asked to write down the last two digits of their Social Security number, plus their bid, and hand it in. The highest bidder would pay their bid and take the object home.

Here are the results:

“The students enjoyed this class exercise, but when I asked them if they felt that writing down the last two digits of their social security numbers had influenced their final bids, they quickly dismissed my suggestion. No way!

When I got back to my office, I analyzed the data. Did the digits from the social security numbers serve as anchors? Remarkably, they did: the students with the highest- ending social security digits (from 80 to 99) bid highest, while those with the lowest- ending numbers (1 to 20) bid lowest.

The top 20 percent, for instance, bid an average of $56 for the cordless keyboard; the bottom 20 percent bid an average of $16. In the end, we could see that students with social security numbers ending in the upper 20 percent placed bids that were 216 to 346 percent higher than those of the students with social security numbers ending in the lowest 20 percent.” (emphasis mine)

Do you now see how setting an anchor is important? Obviously, you don’t want to ask people to write down the last two digits of their Social Security numbers…but you can set anchors in your sales presentations.

How to Set Anchors

Here’s how I set two anchors for Guest Post Secrets:

I compared it to pay-per-click, and used the word “Imagine.” I wrote: “Imagine…thousands of targeted visitors showing up to your website, ordering your products, and sending you letters of appreciation…at no charge.

Do the math: Even at 10 cents per click (which is a pretty great rate, these days!) 4,000 visitors to your website would cost you $400. Or you can get super-targeted visitors absolutely free using this step-by-step system.

It’s your choice.”

Right there, I’ve set up a framework: This system works better than pay-per-click, and it’s not going to cost you $400 to send 4000 people to your website. In fact, this method is free.

Here’s another anchor from the same sales letter for Guest Post Secrets:

“In fact, if you called me on the phone right now and requested an hour of my time so I could teach you this, it would easily set you back more than $500…and you would have gotten more than your money’s worth! In Guest Post Secrets, you are getting three videos with a total of over 30 minutes of step-by-step content that you can play again and again…as long as you like until you are one of the Internet’s top bloggers! To think you get all this for less than the price of a single 1-hour session!”

Now I’m comparing it to an hour of my time, on which I set a value of $500.

Then the person sees that the price is just $67 (and sometimes, they have a coupon code that brings Guest Post Secrets down to $47), and the decision becomes a lot easier.

To set an anchor, compare what you’re offering to something that costs a lot more. A web design company I worked for many years ago had this text featured prominently on their website:

“The services that [company] provides allows you or your organization to utilize the ‘Information Super Highway’ at a fraction of the cost that it would take for you to do it on your own. For your organization to duplicate the services of [company], you would have to rent 6 DS3 lines ($12,000 / month), hire a systems administrator ($60,000 / year), get a programming staff ($150,000 / year), a graphic design staff ($150,000 / year), and buy the server and support hardware ($20,000). [company] has all of these items already in place and distributes the cost over many organizations while maintaining excellent performance.”

This was in 1998–and at the time, this company was one of the premier design and development organizations in my local area.

Remember: regardless of whether you’re setting the anchor or not, the anchor is being set. As the salesperson (business owner), you need to make sure you’re the one setting it. Otherwise, you will sell far less of your product–regardless of the merits of your product.

Don’t lower your price to compete with others. Focus on resetting your potential customers’ hidden anchors instead.

Recommended Reading:

• Predictably Irrational: The Hidden Forces That Shape Our Decisions. Dan Ariely–who has an amazing personal story that he shares with you in the book–takes a look at why we really buy products.
• How to Read People’s Minds (And Then Create the Product They Most Desire) Two methods by which you can (almost) read your potential customers’ minds.
• How Do All Those “Idiots” Make So Much Money? Does it drive you nuts that some idiot with a terrible product seems to be constantly making sales, when you know your product is better? What’s the difference between you and that “idiot”?