Here’s an overdue tip I should have shared with you earlier. I was reminded of it when I ran one of my regular Web Academy courses recently. This was an advanced course, and promoted as such, but I kept getting asked questions about some pretty basic stuff. Now, I never mind going over the basics with my delegates, but it occured to me that my readers may be in a similar position with their customers.

We often tend to believe that our customers know more than they actually do. We become so immersed in our own industry and take so much for granted that we forget that what we consider everyday knowledge is completely new and valuable to others.

I’ve often shared information that I considered common knowledge, only to find that it was just what a very grateful customer needed right then!

There are a number of lessons here and a couple of ways to profit from this. The main lesson is – Never Assume the customer knows what you or your product does. Never Assume that you know what the customer wants. In both cases check – research your customers and your marketplace and find out what they need and what they don’t know.

And the two ways to profit?

1. Keeping customers informed of information that could help them or is even vital to them always leads to more business, either directly or via recommendation.

2. The information you have that you could or should share may be so valuable that it is worth money. People would gladly buy it if it was packaged and promoted correctly. The ‘Information Business’ in this world is worth billions. Could you pick up your share with what you know?

In my last article on mail order I left you thinking about what gets you really excited and enthusiastic. I asked you to think also about things you know or are skilled at that would be of interest to other people who are excited about the same things you are. I also suggested that you would need to get some idea of how popular this area of interest is in order to establish the market potential.

If you completed this task you should now have at least one idea, probably more, about what you could sell and who might be interested in buying it. The really great thing about turning your passion into a product, or range of products, is that you will already be familiar with your market. You will know what people like you are looking for and what will really excite them. This knowledge should put you well ahead of those who are less personally involved in this area of business.

The benefits of mail order are that you don’t need retail premises, a small mail order business can easily operate from home – many do! You can target a readily identifiable market based on the ideas you’ve evolved. Your main costs are product production, packaging, delivery and marketing. The key areas focus on are, Product, Price, Positioning, Promotion, Packaging and People!

PRODUCT

If you know your market as well as you should you will know what features to incorporate into your product in order to appeal to and satisfy your customers. Whether you create a product of your own or source one from someone else is a decision you need to take.

The simple way is to look for an existing product that you know will appeal to your market, and then negotiate a deal with the producer to supply you at wholesale giving you a good profit margin on the resale price. The advantage to this is that you can bring a product to market more quickly than having to design and produce it yourself. A major drawback is that the product may already be being sold in the marketplace. The customer may already be familiar with it and even be aware of the value according to the price being charged by others. This limits your pricing options which in turn may mean that the profit margin available may not be enough to cover marketing and delivery costs and still leave something for your trouble.

Creating you own product, whilst slower and more expensive initially, gives you the opportunity to offer something new to the market on which you can put your own price. Your own product cannot be obtained from any one else so you will not be competing with others selling exactly the same thing. You also have the opportunity to establish your own brand.

This does not have to be an either/or choice. To be successful in mail order you need a range of products. It is almost impossible to succeed in mail order with a single product as the cost of making the first (only) sale to a customer is very high. Most mail order profit is made on what is known as the ‘back end’, the additional products you are able to sell to customers in the future. Therefore you could have a mix of your own and externally sourced products.

PRICE

The price you charge for your product is critical to your success. It needs to be acceptable to the customer in exchange for the value that you deliver. It also needs to be high enough to cover all your costs, including marketing, and return a profit sufficient to make your business viable. Price too high and the customer may not buy, price too low and you will not make a profit, or even make a loss. One key thing to remember is that price is perceived as a measure of quality. Pricing too low can often devalue the product and lead the customer to believe that it is less valuable than it really is!

POSITIONING

Product positioning aligns very closely with price. Positioning your product as uniquely valuable, luxurious, rare or of a specialist nature will command a higher price. Positioning it as a budget or commodity item available to many will devalue the product and reduce the price it will command. Mail order works best for high margin, high value items that people cannot get anywhere else.

PROMOTION

Advertising and marketing costs can be very high in mail order. It is the only way you bring your product to the attention of your market. Great care needs to be taken to promote the benefits and advantages of the product to the right people at the right time. In most businesses a high proportion of advertising costs are often wasted, getting very little return in the way of custom. The high costs of mail order promotion mean that you cannot afford too much wasted advertising.

There are four main ways of promoting your product to your market place, each with their own range of options.

Conventional Media Advertising

These include Options such as newspapers, magazines, radio, TV, leaflet distribution. They can be national or local in all cases. For specialist mail order products highly targeted magazines are often the best. For products with a wider public appeal the Sunday newspapers are often popular. The only way to determine the right options are by research followed by careful testing.

Direct Mail

Many mail order marketers prefer this method of promotion as it can be easier to send the right marketing message directly to a targeted list of potential buyers. This involves initially acquiring a mailing list of prospects. The simple way is by renting or buying mailing lists from approved mail list brokers. (You can get more information on list brokers from the Direct Mail Association). Another way is by using low cost classified ‘teaser’ ads to generate enquiries and develop your own list. Promoting your product to the customer list of other businesses on a profit share basis is yet another option. The secret to success is to choose the right lists, those which have been proven to produce sales of similar or related products.

As your business grows you will develop your own list of customers to whom you can mail follow up offers whenever you want to bring a new product to market. Look after these customers extremely well, they are the life blood of your business.

Internet Marketing

Increasingly these days, mail order marketers are turning to the internet. Web marketing, online marketing, internet marketing, email marketing are all terms you will see describing their activities. The internet opens up a huge market enabling businesses to reach many more customers than before at generally lower cost than traditional marketing methods. However, as its popularity grows so does the competition which means it is getting harder and more costly to reach this market. Fortunately for you, many businesses are still unfamiliar with the new marketing techniques and are making big mistakes. If you take the trouble to learn how to do it properly, internet marketing can be very successful, even for the smaller or newer business. The internet has leveled the playing field. I will be writing a separate series of articles on internet marketing as we go forward.

Referral Marketing

Word of Mouth marketing has been the way most businesses have grown naturally over the years. Referral marketing is simply taking control of word of mouth marketing rather than letting it happen haphazardly. It can be used by any business whether conventional or mail order and it can be used both offline and online (internet). Referral marketing can be achieved in a number of ways:

• Incentives for existing customers to recommend you to others e.g. vouchers towards future purchases, free gifts for referring others etc.
• Network Marketing – growing a network of people who will actively promote your product to friends and contacts, and encourage others to do the same, in return for a share in the profits from resulting sales.
• Associate or Affiliate Marketing – building a sales team, working on a commission basis, to sell your products. Self Employed Sales associates have been used by many businesses over the years to sell their products and services. In fact I began my sales career as a self employed sales associate back in 1978! Catalogue agents who deliver catalogues to households and take orders for products to be delivered to them are a version of this familiar to the mail order industry. The term ‘Affiliate’ is being used to describe the same type of activity on the internet. In fact Affiliate Marketing online is a huge growth area at present.

PACKAGING

Packaging is a very important component of a mail order business. The design of the product pack carries the BRANDING of the product. It needs to promote the quality of the product, highlight the benefits and advantages and satisfy the customer as soon as they receive it that they have bought exactly what they want before they even open it! The packaging also has to protect the product in transit to the customer to ensure that it arrives undamaged and in pristine condition. It also has to meet any specifications of the delivery carrier in terms of size and weight. Getting this right can save you money on delivery costs. It also needs to enable the product to be easily repackaged securely in the event that the customer needs to return it.

PEOPLE

By people I mean customers, the people you need to please the most who will decide the fate of your businesses. Keep them happy and they will keep buying and recommend your services to others. Upset them and they will desert you and tell the whole world about it!

FINALLY!

When you send a purchase to a customer they are already in a pleasant frame of mind towards you, you have delivered on your promise. In addition you have already paid for this delivery, so don’t waste these two key benefits to your business. Make sure you include quality promotional literature on other products in your range in the delivery package. You will be pleasantly surprised at how soon the customer re-orders. This is FREE marketing and it is where you will make most of your profits.

Good Fortune!