What Is the barbell effect and how does It work?
Do you work out with free weights? If you do, where do you grab the barbells? In the middle, right? In business, as in barbells, it’s the middle that gets squeezed and this has given rise to the phenomenon known as “the barbell effect.” The idea is that businesses on either extreme in a given niche will survive; it’s the poor guys in the middle who get squeezed out of business. And for further clarification, usually the extremes are the lowest cost providers and the highest costs providers. Writing for Gigaom not long ago, Mathew Ingram pointed to troubles SAY Media was having. One side of the online advertising barbell, Ingram pointed out, is being dominated by the super low-cost, high-volume providers, such as Google’s AdWords. On the other side are companies that specialize in custom-content, low-volume, high-cost advertising campaigns. Companies in the middle are “neither fish nor fowl” and are having a hard time making it. Get on the profitable side of the barbell The barbell effect applies to virtually every industry and for most small businesses, the challenge is to find a way to differentiate themselves so they can occupy a spot on the side of the barbell that commands higher prices. This is very important to consider as you initially plan your small business or begin to reevaluate your plans to boost your level of success. Ask yourself this question, “Am I trying to do business in the middle?” If you aren’t the low price leader and don’t have some attributes that clearly set you above your competition, you have allowed yourself to slide into the murky middle. In this article, I give some tips on how you can set yourself apart from your competitors. And remember, your customers must be able to associate your differentiating attributes to your business. This means that you need to clearly communicate and model these factors. Your marketing, advertising, and employees must all highlight the qualities that make your product or service distinctive, the best in its niche, and worth a premium price. Low cost = living dangerously If you’re striving to be the low-cost leader, know that you’re living on the edge. A well-financed competitor who is willing to lose money for a while can show up at any time and exert unbearable price pressure on you. Then it becomes a war of attrition. If you want to survive on the low-price side of the barbell, you need to be the most efficient operator and have the lowest overhead costs. This will often involve leveraging overseas contract workers and automation. There’s a good chance you’ll need to pay developers for software and that can cost a lot of money up front. I referenced Google’s AdWords program above. Why is it successful for Google? It’s huge. It was essentially the first of its kind. And, Google has invested millions of dollars developing it. Your assignment is to grab a sheet of paper or open a Word document and list the qualities that qualify you to charge higher prices. If you’re on the low-cost side of this discussion, then your assignment is to list ways you can further decrease your...
read moreHow to find allies and create marketing partnerships
We have discussed and published articles here before on forming alliances with other small business owners. One simple way to support each other is to do business with each other. But today I want to introduce you to a very simple way to start down the road toward creating some powerful content and social media marketing alliances with other businesses. If you don’t have a fairly aggressive social media marketing program now, this won’t help you very much. The first step is to establish your voice on the best social media platforms for your product or service. A healthy number of social media followers and friends will help you successfully pull off this strategy. With that said, you need to analyze who has a “share of the voice” within your area of publishing on your social media platforms. Let’s use me as an example. The main area where I publish could be easily categorized as “small business.” Therefore, I would want to take an “inventory” of others who publish social media content within the small business category. There are a number of ways to do this. Let me give you two websites where you can start your research for Twitter. Twazzup Followerwonk When you use Twazzup, the best strategy is to search for the hashtags or keywords that you most often use in your Tweets or other social media posts. On Followerwonk you can search Twitter bios by keyword to find those who are in the same niche as you are. You’re conducting this research to form a picture of the people or companies that have a share of the voice in your market niche. The next step is to find those who are not direct competitors with you. Continuing with using me as an example, I would find that all kinds of service providers publish to the small business community in the social media. CPAs, crowdfunding websites, even healthy snack food providers are sending their social media messages out to the small business market. I can then contact these companies directly and propose alliances in social media and content marketing. This strategy costs nothing but a small amount of time it takes to do the research, communicate with the other business and come up with the best ways to share marketing content with one another. ...
read moreThis Week in Small Business: Cash in on the extensive research of others…
Ride on the shoulders of others! Read what Archana Madhavan learned during four years of non-stop data analysis. Discover what Zz Twainy found when he reviewed some 600 pitch decks! Leadership, management and productivity Don’t fly blind. Connect with a mentor ASAP – technology makes it easy. Be sure you include these seven operational details whenever you write a business plan. Find out how Airbnb scales its organizational culture and customer experience. Both free and paid accounting software is available. Read this so you can make the right choice for your small business. More than a fourth of all websites are powered by WordPress. Find out how to prevent your WordPress site from getting hacked. Check out these three social media customer service tips to keep your customers smiling. Let Archana Madhavan do your data analysis for you. Here’s what he learned from four years of pouring over the numbers. Marketing and sales The web is getting crowded with content and marketers wanting to push people to a landing page. Find out why your strategy isn’t effective. With the right social media automation, you can multiply yourself. Rebekah Radice offers five smart ways to do it. Since almost everyone is on Facebook, these tips to increase your reach can be quite valuable. And while you’re at it, be sure you aren’t making the top five Facebook marketing mistakes. If you’re marketing to women, remember that age is just a number. Wharton professor David Bell gives tips on marketing your small business using Facebook, geofencing, and eBay in this Philly-dot-com article. Here are 17 simple growth tactics you can try implementing next month to fuel growth at your ecommerce business. Don’t miss these 10 Snapchat secrets every small business marketer should know. Do you get writer’s block when you sit down to knock out a blog? These six strategies will help you pump variety into your blog. Have you ever considered that split testing could help boost the performance of your content marketing campaigns? Need to know how to do it? Read this. Entrepreneurship, startups and innovation It looks like women entrepreneurs may be on the forefront of gender equality in the business world. Read this Venture Beat piece to see what Zz Twainy learned from reviewing 600 pitch decks. Politics, government and the economy It’s not every day you get to tell Congress about the problems facing small business owners. Here’s what I said when I had my...
read moreTake 10 Minutes to Build Your Backend Profits Strategy
You work hard to get prospects through your doors, or their contact information onto your email list – but are you getting all the value that’s available to you? In a moment, I’m going to use the opt-in email list as an example here because it’s an incredible asset all small business owners should be building, whether their business is online, offline, or a mix of both. However, the same principles apply to all the contacts you have with customers. Here’s the big idea: The real profits are in your backend sales. You spend time and money to get a prospect to buy something, or do another “action,” such as signing up for your email list. We can essentially assign your customer/prospect acquisition costs to that first action. Any money you make via follow-on actions is pure gravy. Backend sales propel auto dealer profits Let’s use a car dealership as an example. Savvy car dealers often make very little off the sale of a new car. That’s the front-end profit. However, when the dealer signs up a customer with financing, sells an extended warranty, and gets the buyer to pony up for undercoating, those are all backend profits. On average, they far exceed the front-end profits. One great thing about having a good email list is that it gives you a means to enjoy more backend profits. If you know the buying history of your customers or the specific interests of your prospects, you can design all kinds of backend offers to send to the names on your email list. Further, the growth of your email list can be viewed as the growth of your backend profit potential – and it’s the kind of growth that is totally in your control. In one of my recent newsletters, I was discussing passive income, and an affiliate marketing strategy I mentioned in that newsletter is ideal for generating additional backend profits: cost per action (CPA) opportunities. CPA programs as backend sales Maybe you have extended warranties, clearance items, or other related products or services you can offer after you’ve made a sale, or signed a new prospect on your email list. Some of these backend sales items require you to carry inventory. That’s fine in many cases, but when you can make money without having to carry inventory – especially if each additional sale is fairly substantial – it’s even better. Many CPA programs award affiliates with generous payouts. You’ll find many CPA opportunities at the following websites: CPA leads Clickbooth Max Bounty PeerFly W4 CPAWay If you enroll as an affiliate in one or more CPA programs that relate to your niche, you can present these opportunities via your mailing list in a variety of ways. You can: Present one or more offers at the end of the opt-in process, Present one or more offers via an email receipt when a customer makes a purchase, Present one or more offers in a targeted email to a list that has been segmented, and Present one or more offers in an auto-responder program to prospects who have shown interest in your small business. These are some of the basic approaches. If your small business model is more closely aligned with sales made in your location, you need to develop a menu of...
read more19 Tips to Get and Stay Motivated
It can be lonely at the top! And in the long run, that can be a major de-motivator for the small business owner. Of course, the stress and the long hours can also make it difficult to maintain your enthusiasm or commitment to your small business. So if you’re wondering how to get motivation back, here are 19 different tips for you to try out. They range from concrete tactics that require actions on your part for them to work for you, to attitudes you need to adopt to keep motivated at work…and life. None of them are difficult, but for many of us, they take a conscious effort to adopt and to stay with over the long term. Feed your brain each day – read. Motivation starts upstairs. New ideas and new ways of looking at things will keep you fresh. Regularly revisit and write down realistic goals, both short term and long term. You need to know where this race is taking you and be on board with the destination(s). Work on your main, big goal each day. Don’t let the big obstacles become too daunting for you. Master them, little by little. Focus individually – No multi-tasking! – on smaller goals and knock them out. Despite what people think, we are lousy multitaskers and it ends up costing us dearly in our efficiency. Take breaks during the workday, à la Pomodoro technique. Short breaks to refresh your brain and even stretch your legs a bit will keep your mind and body in tone. Keep personal contact with customers. This keeps you grounded. What you’re doing matters to people. That should always help you at keeping motivated. Network with encouraging peers. There is strength in numbers. As a kid, you probably had the courage to do things with your friends that you wouldn’t dare try alone. Meet regularly with a coach or mentor. Sometimes you’ll need direction and feel like you’re in over your head. A good mentor or coach will have the guidance and perspective that you need to forge on successfully. Recognize and work to increase the value you’re creating for customers/clients. You are creating something real that makes people’s lives better and helps them accomplish their goals. This is positive reinforcement. Stay or get organized. You don’t have time to be looking for “those papers” over and over again. Make life easier on yourself. Start your day strong. Knock off tasks in the morning. When you make this a habit and start to enjoy the results, you’ll have a strong motivation to get out of bed and get at it. Pull the trigger. Be action oriented. Don’t just sit there; do something! You can correct mistakes. You can’t correct actions never taken. Be just as serious about your time away from work. You know what they say about “all work and no play.” Set aside time for yourself and your loved ones to travel, relax, and enjoy new experiences. Maintain your health, body, and mind. Meditate. Grow stronger physically, spiritually and mentally. Get new perspectives. Change your routines. Habits that create efficiency are good things. Habits that become ruts are bad things. Switch things up every so often. Move your office or desk. Take public transit instead of driving to work. Be an expert...
read moreHow to create a passive income stream from your blog
I recently shared five highly actionable, but mostly unrelated, tips with you in this space. Today I want to elaborate on one of those tips. I suggested that you could create a stream of passive income your blog by adding some up-sell items. The general principle is that you write an informative blog on a topic and then offer an additional resource that takes the topic even further or adds other elements that the reader will find useful. For example, I know an online marketer who is working on an article about the power of inspirational quote graphics in the social media. He has been creating and using these for some time. Each time he creates one of these graphics with his logo on it, he creates another one where he omits the logo. He plans to sell these “unbranded” graphics when he publishes his article on the topic. If readers are convinced of the usefulness of publishing inspirational quote graphics and they want some graphics where all they have to do is paste on their branding, this little set of graphics will the available for them. Another good idea is to write an article that outlines a strategy and then sell a white paper or e-book that is a “how-to” on the ways to implement the strategy. Below is a short list of content items you can create that can be used as up-sells in conjunction with one of your blog posts. They all have the potential to create a good stream of passive income from your blog or website in general. More passive income ideas Checklists. If there are specific items that must be done to accomplish something, or there are certain steps that have to be done in a given order, a checklist can be useful Worksheets. If you’re explaining a concept or perhaps a process, creating a worksheet to lead your reader through it can be beneficial. A worksheet is preferable over a checklist when steps must be “thought out” when implementing the process. Templates. You could consider my friend’s unbranded graphics as a kind of template. Others would include useful “semi-blank” documents. Scroll through the templates provided by various commercial word processing, graphics and spreadsheet software for ideas. Excel files. Maybe you’ve created a killer inventory control spreadsheet or prospect follow-up spreadsheet. Make it look pretty and sell it in conjunction with related content on your website. Calendars, planners or to-do lists. If you’re in the B2B field, for example, and your clients are retailers, you could put together a planner or calendar that helps them get prepared for the various holidays and special events that happen throughout the year. Resource lists. Think of a master list of free resources, best books on a niche topic, or where to get difficult-to-find items. The possibilities are endless. Webinar Recordings. Follow up a webinar with an article that provides a “high altitude overview,” but also allow people who missed the webinar view a recording for a small fee. Case Studies. Case studies are powerful and very engaging. As with the webinar, you can provide a useful summary in the article, but go in-depth with a white paper case study. With these ideas in mind, here’s what you should do right now to monetize your blog using...
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