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Better Business Idea #33

"Never Underestimate The Difficulty Of The Task"

© 2000 by Michael C. Gray

January 26, 2000


As businesspeople, sometimes our egos get in the way of dealing with reality. For example, we may be unable to accept or comprehend that a small percentage of the people who receive our sales message will respond to it.

Those experienced with direct response marketing know that, realistically, only a small percentage will respond to even a successful sales message. Many of the mailings that you receive for magazines or other offers may only get a response of ½%! If 1%, 2% or 3% respond, it may be time to break out the champagne!

This is the reason marketing guru Dan Kennedy repeatedly reminds his students, "Never underestimate the difficulty of the task!"

Some people say television advertising is the most difficult medium, because the prospective customer is sitting on the couch with the remote control, ready to change the channel whenever he or she is bored or not interested in the message on the screen. The fact is, every time we present a sales message, the prospective customer has a "remote control" in his or her head that he or she uses to decide whether or not to "tune us out." Prospective customers have to do this or be overwhelmed with the thousands of sales messages they receive every day.

So before you proceed with your campaign, figure what your results might be under pessimistic assumptions. If you can make money in that scenario, then you have a viable opportunity. Then you can work at improving response. And remember to test your assumptions before making a full rollout!

Many businesses are built by acquiring customers at an initial loss, and then make their income by continuing to sell to the acquired customers or by renting the list of customers to other marketers. (See our articles "The Lifetime Value Of A Customer" and "Use Your ‘Back End’ to Build Business Profits.") You must have adequate financing to pursue this strategy or your business won’t survive. (See our article "How To Sell Your Way Into Bankruptcy.")

When you are promoting to your own list, you can realistically hope for a better percentage response, because your customers already know you and hopefully trust you, and have bought from you before or expressed an interest in the type of product or service you offer.

Be realistic in your response assumptions for your promotional efforts and your chances of business survival and success will be dramatically enhanced.

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When tracking your marketing articles, it is important to know what percentages to look for.


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Michael Gray, CPA
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San Jose, California 95128
(408) 918-3162
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email: info@profitadvisors.com
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