Making Your First Million.pdf - Association of Net Entrepreneurs and ...

Making Your First Million
Chapter 19 - How Do I Promote my
Business Without Spending More
Than I Get?
In my computer mail-order business of 20 years I started out mailing simple brochures
which I roneoed on the school's duplicator. At the time there was no competition to speak
of and so I had an open field and mostly made buckets of money each day. It was easy in
those early days. Later on I experimented with a catalog and with full-color brochures
and the strangest thing started happening. The return on the dollars spent started
diminishing as the competition got smarter. All the old "smash and grab" techniques that
had served me so well previously no longer worked. Some brochures cost more than they
returned.
I had to look at cost-effective marketing which meant I had to think outside of the
"Some's Good, More's Better" square and start tracking the results. Adding unique codes
to each brochure meant I could see what worked and what didn't. Most direct-mail
advertising worked. Most broadcast advertising didn't. I had started out in business
selling one-off products. Even when my sales peaked in the late 80's I only had 36
products but one product, the 5.25" floppy disk, represented 55% of my sales. Brochures
were fine for this. All I had to do was mail out another sale brochure with a lower price
on my top selling product.
But the market started changing. Suddenly no one product could be relied on to keep our
sales going. Discounting no longer worked. Competitors were selling cheaper than I
could buy the product. What my customers wanted was a range of products, so I
dramatically expanded our product range and our brochures began to grow in size. So we
bit the bullet and employed a full-time graphic designer and it took 9 months of full-time
effort to produce our first major catalog. This first 64 page catalog returned $3.60 in
profit for every dollar spent, while our next 84 page catalog returned $6 and our third,
which was a 100 pager returned $4.50.
A catalog is a huge investment of time and money compared to brochures, outbound
single-page fax brochures, and newsletters. But catalogs outpull all our other advertising.
If you have a wide range of products you want to sell, a 100 page catalog adds credibility
that no brochure can produce. Think of sale brochures as artificial fertilizer and a catalog
as organic fertilizer. The sale brochure produces a quick flush of sales but effectively
depletes the soil whereas the catalog lasts a year and improves the fertility and tilth of our
market's "soil".
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