In this chapter, I reveal the main secrets behind the biggest money-making programs currently available on the market today. I’m sure you’ll recognize many of these opportunities. You may have even invested in them. I truly hope that the information I reveal helps you (even though it may make me unpopular with the people selling these opportunities.)
Mail order marketing generates billions of dollars in cash for both large and small companies alike. One of my marketing friends in Kansas has a company that does 99% of its marketing through the mail and generates roughly $800,000 to $1 million dollars each and every month. That’s $9,600,000 to $12 million dollars a year by mail order. As a side note, in the late 1980’s this gentleman was a down-on-his-luck carpet cleaner who discovered information publishing, started his own mail order business with $300, and has since made over $100,000,000 selling information by mail.
Mail Order Secret #1:
To be completely frank, mail order is NOT a business.
Mail order is a delivery method for your marketing messages. It’s the same thing as calling a business on the Internet an “Internet business”. Even though the Merck pharmaceutical company advertises on television, most people don’t refer to them as a “Television Business”. And while most furniture stores advertise in the local newspaper very few of them are called “Newspaper Businesses”. You may want to promote your products or services by mail, but that doesn’t make it a mail order business. This is a clarification that’s important, because I’ll be talking about various business opportunities throughout this book that can ALL be promoted by mail.
Mail Order Secret #2:
There is a proven system to making money in mail order.
You find a specific niche market that can be reached by mail, and you sell them something for which they’re HUNGRY. For example, you can go online to SRDS.com (or to your area’s largest library) and find the Standard Rate and Data Services directory of direct mail lists. Inside that directory are mailing lists of all types of groups. You can find mailing lists for people interested in arts and crafts, dogs, cats, skydiving, mountain climbing, business opportunities, Karate, fly fishing, antiques, and painting. There are mailing lists of people who subscribe to certain magazines, have purchased items off of TV, who attend college, and who drive certain types of cars. There are literally thousands of different mailing lists available to you. The key is to find a mailing list of customers who WANT something and deliver that particular product or service to them.
Often, someone will come to me with a product that “Everyone needs”. That normally spells disaster. Why? Let’s take a look at products that “Everyone needs”. Maybe it’s dishwashing detergent, or laundry detergent or something along those lines. Where do these companies advertise? Do they mail out direct mail sales letters or place ads in small niche magazines? No. These companies spend millions upon millions of dollars selling their products to the masses. Their full-page ads (many costing $25,000 to $50,000 or more) in monthly magazines drive people to local grocery stores and discount chains to buy their products. That’s the problem with having a product that “Everyone needs”. You’re not able to focus your marketing efforts on a small niche market. You’re forced to spend millions of dollars promoting your product on TV, Radio, and in major magazines. And most people don’t have the deep pockets to do that. And if you DO have a hot “mass market” product, stand back because people with BIGGER, DEEPER pockets than you are likely to rush in, steal your basic idea, and launch it before you have a foothold in the market.
The secret to success with ANY mail order business is to target a smaller NICHE market
- a group of people who all have the same interest. Making money. Real Estate. Fishing. Weight Loss. Health. Whatever. Next, they MUST be easy to reach either through direct mail lists that you can purchase or magazines to which they all subscribe. And finally, you need to create or find a product that this niche group WANTS (not needs, WANTS), and sell it to them. It’s a simple formula for success, but one that many new mail order marketers don’t understand.
Now, here’s The ADVANCED Mail Order Marketing Formula: Whenever you’re starting your mail order campaign, you need to realize that the target market doesn’t know or trust you yet. So trying to get them to fork over $100, $250, even $500 for a product, course, service, whatever is going to be incredibly difficult. Most mail order marketers sell a low-cost or even free “Front-End Offer”... maybe a booklet, report, audio CD, trial subscription... so that the prospect has very little risk involved in their purchase. Because their risk is low, they’re more likely to take a chance with you. Then, once they’ve purchased from you, it’s important that you PROVE YOURSELF to them by giving them more than they expected. How you deliver the first product is going to give them an idea of the quality of ALL of your products and your customer service philosophy. Make sure to give a great impression. Then, once you’ve proven yourself to your buyers you can mail additional offers to them, selling them higher-priced products.
In direct response marketing, it’s known as the “Marketing Funnel”. Imagine a funnel. You “pour” in thousands of buyers at the top of the funnel using free or low-cost offers. Once they’re in the funnel, you sell them higher priced products. You’ll discover that fewer and fewer customers will buy as the price rises. So as your customers move DOWN your funnel, you’ll sift and sort until you get to the bottom of the funnel and have a small number of very, very highquality customers who may pay you thousands of dollars for seminars or live coaching. The products at the top of the funnel are free or inexpensive. The products at the bottom are very expensive. So as people move down the funnel, you get fewer and fewer people willing to shell out larger and larger amounts of money. But you also end up with a very high-quality group of buyers as they move through your marketing funnel.
Mail Order Secret #3:
Create (or find) a product or service ONLY AFTER you have
found a market that is easy-to-reach (usually via mailing lists or magazines). The biggest mistake that people make is finding or creating a product first and then trying to find a market to sell it to. Often the person believes (through very little or no actual research) that the product will sell because “everyone needs it” or “I’m sure people will buy it”. However, once the product has been completed, after much time, effort, and money invested, the entrepreneur discovers that either there’s no market for the product or that there might be a market that can’t be easily reached through a specific mailing list or magazine. Often it’s much better to do a little research, find a mailing list or magazine that reaches a target market, and then create a product that this market wants. Do that and you have a recipe for success.
How do you find out what a particular market wants? SEE what they’ve already bought. The mailing list companies will tell you what these customers have purchased before and how much they spent. Or you can look through the magazines at what your competition is selling. Make sure to check through old copies of these magazines and, if the same ads run year after year, it’s a pretty good bet that the ad works and the product being sold is popular. There’s nothing wrong with creating another product based on an already winning product. Just try to make yours better, easier, faster working, etc.
Mail Order Secret #4:
Many companies that sell by mail are willing to break even or even lose money selling what is normally known as a “front-end” product. A front-end product is the first product a new buyer purchases from you. It’s usually a low-cost or free product or service that gives the prospect the opportunity to buy something from you with very little risk and gives you the opportunity to prove to the new buyer that you’re a legitimate
company that delivers on its promises. The real secret behind most mail order companies is that they rely on the LIFETIME VALUE of a customer. Instead of trying to get rich selling a lowcost product or service, they’re happy to lose money on the first sale, because they realize if the customer is happy with their initial purchase, they’ll be back to purchase from them again and again and again. Some customers may continue to purchase from a company for many years, even decades. So losing $5 to gain a customer who ultimately purchases $50,000.00 in products or services from you over a 10-year lifetime is a very cheap investment. The most successful businesses that sell by mail understand the importance of a strong “back-end” marketing strategy and continue to mail their customers additional product offerings on a regular basis. In fact, it’s been said that mailing to your customer database more often (at least once a month) creates a bond with the customer and actually increases the chance they’ll purchase from you in the future.
Mail Order Secret #5:
Do not buy mailing lists from ads in opportunity or money-making magazines. Even though the prices might be cheaper and (as I’ve seen recently) you can double, triple, even quadruple your order FREE, you normally end up getting the lowest-quality names possible. And with what you’ll be investing in printing and postage to mail out your direct mail piece, you definitely want the best mailing lists possible. You can get very high-quality, reasonably-priced mailing lists from experienced mailing list brokers by going to SRDS.com or going to your area’s largest library and asking for the Standard Rate and Data Services Mailing List Directory. Do not skimp on your mailing list. It’ll be one of the best investments you’ll make.
Mail Order Secret #6:
Count money, not response rates or “undeliverables”.
“Undeliverables” are mail that the U.S. Post Office returns to you, because it can’t be delivered to the addressee, due to a bad address, forwarding order expired, etc. Often, people new to mail order marketing get caught up counting the wrong numbers, such as the number of undeliverables that are returned to you or the percentage of the people from the list who buy. Remember, you can’t deposit response rates. You can only deposit money. So, for example, let’s say that it costs you $5,000 to mail out 5,000 letters to a mailing list. And let’s say that you get 50% undeliverables – and only 1% of the people who receive your letter actually buy your product. Horrible, right? Not necessarily. Let’s say that your product sells for $500. A 1% response rate from 5,000 letters mailed, but only 2,500 delivered would pull in 25 orders. Do that math – and you’ll see that’s $12,500.00 in gross sales. Even if you subtract your $5,000 mailing cost, you’re still way ahead. It’s important to focus your time and energy on counting the numbers that matter. The dollars. The other numbers are interesting to measure, but you should always keep your eyes first and foremost on how much money your mailings are pulling in.
Mail Order Secret #7:
Know Your Math BEFORE Mailing and
Make it Work with SMALL NUMBERS!
This is a BIG SECRET! Many mail order marketers understand that no matter how incredible your sales letter is and no matter how wonderful the mailing list broker says their list is, your response rate for any offer might only be 1% or LESS! Smart marketers change their pricing to work with small numbers. For example, let’s say it costs you $5,000 to mail out 5,000 letters to a mailing list you’ve purchased. That covers the cost of renting the list (most lists are rented for one-time-use only), postage, and printing the sales piece and envelope. Now let’s say that you only get 1% to purchase your product. If your product is $25, you’ve only made $1,250. You’ve just lost $3,750. If your product is $100, you’ve made $5,000. You’re at break even. (Actually, you will have some cost to fulfill your product, but for this example, let’s assume you have $0 product cost). But, if your product is $250, the exact same 1% response rate pulls in $12,500. Subtract your $5,000 mailing cost and you’re ahead by $7,500! It’s the same list, the same cost to mail all 5,000 people but by changing your pricing you’ve gone from losing money to making money. In the past I’ve sold products for up to $1,000, where I could cover all of my marketing costs with as little as ½ of a 1% response rate. Before you mail your first letter, make sure you’ve done the math. If it doesn’t work out make any necessary changes until the math does work out. Smart marketers price their products and set up their marketing systems to be successful with the smallest response possible. Then, if response is bad, they’ve made money. And if response is great, they’ve made a big PILE of money. Either way, they’ve reduced their risk to almost nothing.
Mail Order Secret #8:
Your best list is your HOUSE LIST!
No matter what mailing list broker you rent lists from, your best list will always be your in-house list of BUYERS. The people who have purchased from you before are more likely to purchase from you again (providing that you’ve given them good value for their money), rather than people from a “cold list” who have never heard of you before. You’ll always get a better response by mailing new product or service offers to your in-house list of buyers than a new list you rent. In fact, many smart mail order marketers will test new product offers on their in-house list before mailing it to an outside list. If the product isn’t a success being mailed to the in-house list, the marketer knows it will probably sell poorly to an outside list. Always remember to go back to your own customer list again and again on a regular basis with new offers.
Here are two books on mail order marketing that I highly recommend. You can find them at your local bookstore or online at Amazon.com
How I Made $1,000,000 in Mail Order-and You Can Too! By E. Joseph Cossman
Information marketing is, in my opinion, one of the best, most exciting, most profitable businesses you can run. An information marketing business sells products (books, courses, booklets, manuals, DVD’s, CD’s, seminars, workshops, coaching, etc.) to a specific niche market (i.e. opportunity seekers, gardeners, business owners, hobbyists, etc.).
There are many, many benefits to running an information marketing company. First are the high profit margins of information products. Most info-marketers mark-up their products 8 to 10 times. If a book and 6 audio CD’s cost $30 to print and duplicate, the marketer will normally sell it for $250 to $300. Because people value the INFORMATION inside an info-product and not the value of how it’s delivered, it’s easy to sell low-cost info-products for very high dollar amounts. And if you deliver high-quality information, your customer won’t argue with the fact that the info-product was relatively cheap to produce.
Another benefit is the fact that information is easy to ship. It’s easy to box and mail, around the country or around the world. Online, it’s even easier. You can create and sell an infoproduct that the customer downloads directly from your website so there’s no printing or shipping costs for you. One of my Internet websites, at www.inforiches.com, sells a book that I wrote years ago called The Ultimate Million Dollar Idea Generator. When someone purchases that book, money is deposited into my account instantly and the customer is taken to a webpage where they can download the e-book. I never have to stock or ship the product. This has been a great extra income stream for my business.
Most of my marketing friends are information marketers. Many of them are millionaires or multi-millionaires. Why? It’s because the demand for quality information in a variety of areas is at an all-time high. We’re smack-dab in the middle of the “Information Age” and the demand for information doesn’t seem to be slowing down.
For example, let’s take infomercials. At the time I’m writing this book there are a number of info-products being sold on television. Carlton Sheets is selling his “No Money Down” course on how to get rich in Real Estate. Russ Whitney, John Beck, and Ron LeGrand are also selling real estate info-products on TV. There’s a guy selling a course on how to make money on eBay. And another guy, Jeff Paul, showing people how to make money by... guess what... SELLING INFORMATION PRODUCTS!
There are other marketers selling information products on the Internet and by mail.Yanik Silver makes millions of dollars every year showing people how to get rich on the Internet. John Reese, another Internet marketing expert, made over $1 million dollars in just ONE DAY, selling a $1,000 info-course on how to get traffic to your website.
Sydney Johnston sells information on how to make money on eBay – and pulls in money daily from her website business.John Lyons sells information on how to train horses – and has become one of the most highly respected horse training experts in his field.
Adam Katz sells information on how to train your dog. He’s been doing this for years – and pulls in a considerable amount of cash from dog owners every single year.
Joe Polish sells information to carpet cleaners that teaches them how to generate more money through smart marketing. He’s made millions of dollars – and continues to pull in money hand-over-fist. In fact, he currently sells a carpet cleaning coaching program that costs about $10,000.00 a year – and it’s very popular!
Dan Kennedy sells information to direct response marketers that shows them how to be more effective and make more money. Dan has not only made millions himself, but many of his students are also multi-millionaires in the information marketing field. One such success story is Jeff Paul, a struggling financial planner who went from living in the basement of his relative’s home – to making $200,000 a month in his own info-publishing business. Today, he’s a multimillionaire... having even sold his info-products on home-shopping powerhouse, QVC!
Jerry Baker sells information to gardeners on how to create and keep a beautiful garden. His information empire pulls in money for him like steel to a magnet.And these are just a few “Success Stories” of people getting very wealthy selling indemand information products. The information marketing is huge – and growing by leaps and bounds. We’re in the middle of the information age – and people are willing to spend big bucks for the right information. In this section, I’ll reveal secrets that will help you create your own information marketing business.
Information Marketing Secret #1:
You do not want to sell bookstore books.
To make any decent money selling information products, you must sell larger info-products, like courses, toolkits, audio CD or DVD sets. There is really very little, if any, money in creating a book for a bookstore. Unless you’re the next Stephen King, your chances of becoming a multimillion dollar author with mass-market books is pretty unlikely. Your best opportunity for success in selling information products is to create higher-end products ($250 to $500 courses or $500 to $1,000 CD or DVD packages) and sell them to a niche market. Joe Polish has made millions of dollars selling an expensive, high-dollar course to carpet cleaners teaching them how to effectively market their services and generate more income. Chauncey Hutter has made millions of dollars selling a high-dollar course teaching “Mom and Pop” tax preparers how to create more revenue. If you’re going to sell information products, you want to keep away from the $15 to $20 books (unless that’s your front-end product – that leads them to buying your larger, high-dollar back-end product) and focus primarily on more expensive information products.
IMPORTANT NOTE: $15 to $20 books are normally “loss leaders” that can be used to pull people into your marketing funnel. They’re tools to draw people into your business – so you can then sell them higher-priced products. Bookstore books can also be used as another way to generate free leads that you can then convert to higher-dollar buyers. Dan Kennedy, for example, has marketing books in all of the major bookstores. However, Dan uses them as a way to create an initial bond with his readers and gets them to take action and purchase more expensive information products directly from him. They’re not a major income stream but simply a tool to drive new prospects into his marketing funnel.
Information Marketing Secret #2:
You DO NOT have to create the information product yourself. Often the reason people don’t get involved in the highly lucrative information marketing business is that they don’t think they’re an expert in anything, so they have nothing to write about. The biggest myth in the information marketing business is that you have to be an expert in a field and write the product yourself. You don’t. In fact, I’m part of a group called the $100 Million Dollar Roundtable. It’s a group of about 10 marketers who have collectively generated over $100 million dollars in sales. Every week we do a teleconference and interview other experts and record the calls. Currently we’re interviewing real estate experts. At the end of our recordings (which take a few weeks), we’ll have 8 to 12 audio recordings of our group interviewing experts in real estate. We’ll have a completed audio product (with printed transcripts) that we can easily sell for $500 to $1,000. And none of us in the group have to be experts in real estate. We simply find the experts, ask for just one hour of their time for an interview, and, like magic, we have a product.
You can do the same thing. Find an expert, interview them by phone, and record the interview. With a cheap tape recorder, a connector that attaches your phone to your recorder, and some blank tapes, you can start creating products in no time flat. (NOTE: While some experts will let you interview them out of ego alone [Yes, we all want to feel important], other experts will only do the interview if you allow them to talk about their products toward the end of the interview and give their contact information. Since this information is usually provided within the last 5 minutes of your interview, it doesn’t distract from the quality of the overall discussion. It’s a small gesture to get a valuable product created that you can sell for years and years to come. Ultimately, it’s a win-win situation for both yourself and the expert you’re interviewing.
Another way to get instant products is to purchase the reprint or resale rights for existing products. I personally like this method of getting new products because reprint and resale right products normally come with proven sales materials. Instead of having to write your own (or hire someone to write a letter for you), you can get a ready-to-go, tested and proven sales letter that works. The only challenge with purchasing reprint and resale rights to a product is that they can be expensive. Some companies charge as much as $10,000 for the license to their products. However, if you have a clear idea of how a particular product will be used in your business and you know it will generate more income than the cost of the license, it may be a good investment.
IMPORTANT NOTE: I cover the “secrets” behind reprint rights later on in this book. Please read it carefully before purchasing any reprint rights.Information Marketing Secret #3:
There’s a simple system to making money by selling information. I described it in detail in the section on mail order marketing, but it’s so important I’m going to cover it again here.
Imagine a funnel. It’s wide at the top and narrow at the bottom. Your information marketing business is like this funnel. You fill up your funnel with prospects by offering lowcost (or even free) products or services. A booklet, a trial subscription, a 10-minute coaching call, whatever. You offer this low-cost or free “front-end” product or service to get as many interested prospects into your marketing funnel as possible. Then, your business “sifts and sorts” your prospects – as you offer them more products.
For example, as you go back to your mailing list with higher-priced offers you’ll find that fewer people will buy them. The people who DO buy them are your higher-quality customers.Let’s say that you fill your funnel with 1,000 people by offering a free report. Then, when you go back to your prospects with a $250 offer, only 250 of those people make the purchase. You’ve just “sifted out” your best prospects – and made $62,500. Now let’s say that you go back to the 250 people who bought your $250 offer and you make them an offer for a $1,000 live seminar. This time only 75 people buy. These 75 people are now even better customers and you’ve generated $75,000. Go back to those 75 people with a $2,500 offer (maybe 6 months of personal coaching) and you may find only 25 people take you up on your offer. Now, at the BOTTOM of your funnel, you have the best-of-the-best customers – and you’ve made an additional $62,500.
You started with 1,000 people at the TOP of your funnel, sifted and sorted them with various offers, and at the BOTTOM of your funnel you have 25 amazing customers and you’ve made a total of $200,000.00 in gross sales. Now you simply keep the process going. You continue “pouring” people into the top of your funnel, understanding that only a certain percentage will buy each additional product from you until only the best customers reach the bottom of your funnel and buy your most expensive product. These customers will normally buy anything and everything from you as long as you continue to deliver value.
Marketers like Dan Kennedy, who have an incredibly loyal following, have customers who have been with him for years and years and buy everything he produces. At a recent seminar he mentioned that he has a few customers who have asked him to keep their credit cards on file and anytime he comes out with a new product, he has permission to charge their card automatically and send the product to them, sight unseen. Now those are LOYAL customers!
ADVANCED MARKETING SECRET:
In the marketing funnel example explained in the previous section, you “poured” 1,000 people into your business and by offering them 3 individual products you generated $200,000.00 in sales. Obviously, with these numbers, you’ll want to continue pouring people into your marketing funnel non-stop. After all, just 5,000 prospects in this example would equal $1 million in total sales.
However, there’s another lesson to be learned here that I discovered from the guy I call the “$100 Million Dollar Man”, T.J. Rohleder. Let’s do some simple math and divide the amount of gross sales from our example by the number of prospects. So we divide $200,000 by 1,000 – and come up with $200. Basically, on average, each new prospect is worth roughly $200. (Of course, this is a very basic example, because it doesn’t take into account any additional marketing or fulfillment costs. But for the sake of getting the basic concept across, let’s forget these additional expenses). If the overall value of each new customer is $200 from your first 3 sales, HOW MUCH MONEY are you willing to spend to get ONE NEW PROSPECT???
Many marketers make the mistake of going cheap and trying to get prospects with little or no investment. They end up shooting themselves in the foot, because they end up with very few new prospects. If you know over time that the average value of a prospect is consistently $200, you can easily spend $50, $100, even $200 to get a NEW PROSPECT! (Yes, you can spend ALL of the profit IF you plan on selling them additional items while they’re on your mailing list). If you accept this idea, you can NOW do marketing that other marketers simply won’t do.
Imagine being able to send a special letter OVERNIGHT FEDEX! Attaching a $10, $20, even $50 bill to a letter! Sending an Audio CD... or a DVD... or a set of them... to grab the customer’s attention.
In the late 1980’s, I knew of a company that sent out a HUGE Information Package to all prospects, with over 6 HOURS of audio recordings. The packages must have easily cost $10 to $15 each to send. But they were selling a very high-end package. So they knew the numbers and realized they could spend A LOT OF MONEY on prospects to create a new customer. If YOU know your numbers and you think this way, you can do a lot of marketing that your competition doesn’t realize it can do.
Information Marketing Secret #4:
Continuity Profits must be a component of your business.
In just the last 10 years or so information marketers have discovered the importance of creating a continuity income in their businesses. A “continuity” product (or service) is something that you’re billed for on a regular basis, usually monthly or quarterly. For example, some newsletter subscriptions charge you every month. On the Internet, autoresponder services and website hosting services are normally charged every single month. These products and services ar