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Never assume anything.
When you think about it, there really is no excuse to have a financial
disaster in direct mail marketing, because you would never invest in a
large mailing until you have test results.
If TEST is the most important word in direct marketing,  ASSUME is
the most dangerous word.
ASSUME is a word that leads to financial ruin.
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Chapter Twenty-Five
Narrow is the gate to paradise
The easiest way to make money is to have no competitors.
That s so obvious it s hardly worth stating.
The easiest way to improve your chances of having no competitor, or
very few competitors, is to identify a small market niche that you can
dominate. It s better to be a big fish in a small pond than a small, strug-
gling fish in a big pond. In the big pond, you will likely be eaten alive
very quickly.
In a small pond, you will live a very happy, nearly stress-free, com-
fortable life.
Let s look again at my very first enterprise, the Dartmouth Review.
This small conservative renegade and independent student paper was the
only source of reporting and commentary on events at Dartmouth written
and produced entirely by students. Talk about a refined and narrow
product!
So not only was the Dartmouth Review different, it had staked out a
monopoly. The truth is, the Review could have raised $500,000 a year,
$1,000,000 a year, or even $10,000,000 a year.
There was almost no limit to the amount of money we, as mere stu-
dents, could have brought in if we had run the paper like a business in-
stead of as a part-time hobby.
But we were just students. We did not need more than about $150,000
or $200,000 a year to publish the paper and have some money left over for
parties. So we just stopped there, sending out a fundraising letter when-
ever we ran out of money, about four times a year.
So when you think about your product and marketing strategy, think
of ways you can give your customers something they can t get anywhere
else. And it s best if your market is small and highly specialized, because
then the big boys are not as likely to come in and crush you.
Highly specialized information for a niche audience is always great,
especially if your niche audience is relatively easy to find. The more spe-
cialized, the smaller your potential audience but also the more commit-
193
Automatic Marketing
ted your audience, and the more you can charge for your newsletter or
magazine.
A newsletter with just one editor can do well with 1,000 or even a few
hundred subscribers . . . if the cost of a subscription is $95 a month.
SEMICONDUCTOR NEWS would be a good candidate for such a busi-
ness model, or maybe get even more specialized than that. Maybe your
publication would do best by focusing on a specific kind of semiconduc-
tor. Of course, it s critically important for the information to be really
good, essential insider news that semiconductor manufacturers and de-
velopers cannot get anywhere else.
The big mistake businesses make is to try to be all things to all people.
For example, the temptation for the editor and publisher of our hypo-
thetical Semiconductor News will always be to expand the reach of the pub-
lication to cover the entire high-tech industry. The assumption here is
that Semiconductor News will reach a wider audience and gain more read-
ers if it becomes High-Tech News.
But then the publication is no longer unique. The publication is no
longer as valuable to anyone. Your marketing costs will skyrocket as you
try to reach this wider audience, and you will have to drop your subscrip-
tion price radically to have any chance to gain readers, because you will
be competing with dozens of other generalist magazines covering the
high-tech industry. You will have become a commodity, always compet-
ing on price.
Time magazine can never charge much for a subscription because it s a
general news magazine. It wants to be all things to all people. As a re-
sult, gaining a single subscriber is a Herculean task for Time and enor-
mously costly. It takes Time about two years on average to pay for acquir-
ing a new subscriber that is, for the revenue generated by the new sub-
scriber to cover the acquisition cost of that subscriber.
Not many enterprises, especially start-up enterprises, can afford
Time s business model. In fact, Time is having difficulty affording Time s
business model.
Who makes more money in medicine, the general practitioner (who
knows something about every health problem) or the neurosurgeon?
The specialist will always earn more.
Narrow is the gate to paradise in marketing.
194
Benjamin Hart
When you think about it, the path to wealth is not to become bigger, it s to
become smaller. The smaller the audience and narrower the focus, the
better off most of us will be.
My brother Matt had a rock band. It was pretty good. Very good, ac-
tually. Matt is a terrific musician.
The band was getting a solid following in San Francisco. He then de-
cided to take his band nationwide. I advised Matt not to try that. Become
big in San Francisco. Maybe just become big in your neighborhood, a
subset of San Francisco. If you re good, and I mean really great, you ll
break out of your neighborhood when the time is right, when you have a
big enough following, and when you have enough cash in your pocket.
He did not listen, of course. The band launched its nationwide tour,
mostly doing warm-up acts for other bigger-name bands. Everything that
could go wrong went wrong, just like in the movie  Spinal Tap. They
ran out of money. Their bus broke down. Arguments broke out. Band
members quit. Soon there was no band.
The lesson here: Become big in your own neighborhood before you go
nationwide. Remember, McDonald s started as just one restaurant serv-
ing one neighborhood. Find your niche, become master of your small
pond. Because unless you have a billion-dollar marketing budget, you
will almost certainly be eaten alive in the ocean.
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Chapter Twenty-Six
How to find the money in your
customer list
The #1 business blunder
I am stunned and amazed at how few businesses pay much attention
at all to their existing customers those who have actually bought some-
thing.
Some businesses don t even keep a customer list!
But it s the first sale that s the toughest. It s much easier to make a sale
to someone who has bought from you before than to someone who has
never bought from you, might never have heard of you. The reasons are
many and should be obvious. [ Pobierz całość w formacie PDF ]