Building a Business on a Shaky Foundation
I got an Email from Perry Marshall today which really struck a chord with me.
Why?
Because something like this happened to me when I first got into this business approx. 5 years ago.
I went from $7k/month down to $1200/month overnight (due to a Google dance).
I'm reposting part of this message here and then explain my reasons for doing so:
"Bill McClure, founder of xxxx is a serial online
entrepreneur, going all the way back to xxxx and
xxxx which he sold in '02.
When Bill investigated the xxxx market, he considered several
existing websites that were available for sale.
One of them was doing $3 million per year in sales with a tiny staff
and strong profitability. On paper, it was a superb business.
Only two problems:
1) Almost all the traffic was from free organic "Search Engine
Optimization" traffic. The left side of Google.
Now that SOUNDS really great. Free traffic from Google? Great
SEO? What's not to like about that?
The problem with it is, what happens when the free traffic goes away?
Notice that I said "when" it goes away not "if" it goes away. It's an
eventuality that there'll be some Google Dance and one sad morning,
the guy's showing up on page 6 of Google instead of page 1.
The traffic dries up and suddenly a $3M business becomes a $300K
business.
2) There was no benchmark of being able to buy traffic AT WILL (i.e.
with paid advertising) and make convert to sales profitably.
Which is to say:
That business, even though on paper it was worth several million
dollars, was not even a real business. It relied on the availability
of free customers - which is a foundation of sand. Temporary
success at best.
(As a matter of fact the owner was afraid to even TOUCH the
website, which was clearly out of date - because he was afraid
changing something might ruin his great SEO rankings.)
If your business is dependent on free customers, you do not
have a business. You do not have any kind of "real" business
until you have the ability to buy advertising from a variety of
available sources and transform that traffic into sales and profits.
Instead Bill bought the domain xxxx and in cooperation
with my other Mastermind members, is building it into a traffic
conversion machine and an established brand (Miss Elly's
Coffee - a southern twist on America's favorite morning beverage).
The kicker is, once you have solved the conversion puzzle, ALL
forms of qualified traffic convert. You dominate your market in
multiple dimensions and you become nearly impossible to displace
by other competitors. You are feared in your market. A force to
reckon with.
Bill is feared in several markets, not just coffee. Once you've
mastered this in one market, you can take it to others."
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Now, the reason why I felt compelled to post this here is because I see too
many people trying to do everything for free - especially traffic and article
marketing.
While the latter is a GREAT GREAT GREAT way to drive traffic and convert
leads into sales (oftentimes much better than PPC, banners, or any other form
of paid advertising) it, along with other free traffic techniques, should not be
the sole way of bringing potential customers in contact with your business.
Paid advertising should account for a significant part of your traffic/sales/profits.
That way, if the sh*t ever hits the fan (e.g. a Google dance, loss of affiliates,
etc.) you are still in control of a large part of your business and you can recover.
Another reason is that paid advertising is probably the best "teacher." Nothing
will drive you more to learn how to convert traffic into sales than money pouring
out of your pocket.
As mentioned at the beginning of this message this happened to me... and to be
honest, it was the BEST thing that could have happened. It forced me to conquer
paid advertising in a very short amount of time. It was either that or go back to
the job (which I wanted to avoid at all costs). Fast forward a few years later and
my business has grown by leaps and bounds.
And who knows... if my site never lost rank I probably would still be in my comfort
zone, making the same amount of money, or at least much less than I currently do.
But worst of all, I'd never be able to get an easy night's rest for fear of worrying
about what tomorrow might bring.
Why?
Because something like this happened to me when I first got into this business approx. 5 years ago.
I went from $7k/month down to $1200/month overnight (due to a Google dance).
I'm reposting part of this message here and then explain my reasons for doing so:
"Bill McClure, founder of xxxx is a serial online
entrepreneur, going all the way back to xxxx and
xxxx which he sold in '02.
When Bill investigated the xxxx market, he considered several
existing websites that were available for sale.
One of them was doing $3 million per year in sales with a tiny staff
and strong profitability. On paper, it was a superb business.
Only two problems:
1) Almost all the traffic was from free organic "Search Engine
Optimization" traffic. The left side of Google.
Now that SOUNDS really great. Free traffic from Google? Great
SEO? What's not to like about that?
The problem with it is, what happens when the free traffic goes away?
Notice that I said "when" it goes away not "if" it goes away. It's an
eventuality that there'll be some Google Dance and one sad morning,
the guy's showing up on page 6 of Google instead of page 1.
The traffic dries up and suddenly a $3M business becomes a $300K
business.
2) There was no benchmark of being able to buy traffic AT WILL (i.e.
with paid advertising) and make convert to sales profitably.
Which is to say:
That business, even though on paper it was worth several million
dollars, was not even a real business. It relied on the availability
of free customers - which is a foundation of sand. Temporary
success at best.
(As a matter of fact the owner was afraid to even TOUCH the
website, which was clearly out of date - because he was afraid
changing something might ruin his great SEO rankings.)
If your business is dependent on free customers, you do not
have a business. You do not have any kind of "real" business
until you have the ability to buy advertising from a variety of
available sources and transform that traffic into sales and profits.
Instead Bill bought the domain xxxx and in cooperation
with my other Mastermind members, is building it into a traffic
conversion machine and an established brand (Miss Elly's
Coffee - a southern twist on America's favorite morning beverage).
The kicker is, once you have solved the conversion puzzle, ALL
forms of qualified traffic convert. You dominate your market in
multiple dimensions and you become nearly impossible to displace
by other competitors. You are feared in your market. A force to
reckon with.
Bill is feared in several markets, not just coffee. Once you've
mastered this in one market, you can take it to others."
+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-+
Now, the reason why I felt compelled to post this here is because I see too
many people trying to do everything for free - especially traffic and article
marketing.
While the latter is a GREAT GREAT GREAT way to drive traffic and convert
leads into sales (oftentimes much better than PPC, banners, or any other form
of paid advertising) it, along with other free traffic techniques, should not be
the sole way of bringing potential customers in contact with your business.
Paid advertising should account for a significant part of your traffic/sales/profits.
That way, if the sh*t ever hits the fan (e.g. a Google dance, loss of affiliates,
etc.) you are still in control of a large part of your business and you can recover.
Another reason is that paid advertising is probably the best "teacher." Nothing
will drive you more to learn how to convert traffic into sales than money pouring
out of your pocket.
As mentioned at the beginning of this message this happened to me... and to be
honest, it was the BEST thing that could have happened. It forced me to conquer
paid advertising in a very short amount of time. It was either that or go back to
the job (which I wanted to avoid at all costs). Fast forward a few years later and
my business has grown by leaps and bounds.
And who knows... if my site never lost rank I probably would still be in my comfort
zone, making the same amount of money, or at least much less than I currently do.
But worst of all, I'd never be able to get an easy night's rest for fear of worrying
about what tomorrow might bring.
Roger Davis
Do not get between a wombat and a chocolate biscuit; you will regret it dearly!