Every person involved in a growing business needs to understand two crucial business concepts. On Monday, I talked about incremental degradation, which is when a cost-conscious entrepreneur makes small but cost-effective reductions in quality that are at first unnoticeable but eventually lead to a huge drop in sales. Understanding this concept helps you avoid a very common entrepreneurial mistake: eking out short-term profits by sacrificing long-term customer loyalty.
Today, let’s talk about an equally important concept that is related to incremental degradation. I call it incremental augmentation. The idea is simple: If you gradually improve your products – even when those products are perfectly good and there is no demand for improvements – your business will continue to grow and prosper even when your competitors are struggling.
Let me show you how incremental augmentation works with a real-life example.
Three weeks ago, I made keynote speeches at two back-to-back seminars in Delray Beach – ETR’s Info-Marketing Bootcamp and AWAI’s FastTrack to Success Bootcamp. They were, without doubt, the best conferences I have ever attended. The accommodations were first-class. The programs were exciting. The presentations were riveting. And the networking possibilities were worth 10 times the price of admission.
I spoke at both conferences several times, but I spent most of the rest of my time as an attendee, sitting in the back of the room and taking notes. There were so many amazing secrets to plunder… so many valuable ideas to "take away" and put to use… so much that I will be able to use to help my clients grow and improve their businesses.
From Richard Schefren, for example, I learned about the exciting developments of Web 2.0, the next generation of technology that will change the face of the Internet and how business is done online. From John Phillips, I learned detailed technical information concerning search engine optimization and pay-per-click ads.
Andrew Palmer talked about how important it is to build a community of customers who can interact with one another. Jeff Walker explained how crucial it is to overcome your customers’ objections to your product – before you actually launch it. And Herschell Gordon Lewis told AWAI Bootcamp attendees about the three things you need for an effective landing page.
And there was much, much more.
Yes, they were two really good programs. And I wasn’t the only one who thought so. Take a look at some of the things the seminar attendees said:
From Rebecca Eisele in Cincinnati, OH: "I cannot rave enough about this event. I’ve been to several bootcamps and several marketing seminars in the past, and this by far excels every event that I’ve attended."
From Lou Bettencourt of StreetAuthority.com: "[This conference] is one of the best experiences that we’ve had. I’ve been in the direct-marketing arena for about 25 years, and I’d highly recommend it to anybody who’s in the info-marketing arena. The presentation from Jeff Walker was absolutely fantastic. Actually, all the presentations were absolutely fantastic."
From Sharon O’Day in Hallandale, FL: "This was extremely professional, it was like getting a master’s degree in how to build a business on the Internet."
From Martha Celestino in Santa Ana, CA: "This event was fabulous. This is my second ETR event, and I’m always just blown away by the ideas, the concepts. The people presenting are leaders in their fields, and I couldn’t find this information in 10 years if I was just doing Internet searches. I expect to implement so many of the ideas that I’ve heard. I was especially taken with Rich Schefren and James Sheridan. Both of those presenters have thought and researched their areas and were just light years ahead of where I am and certainly the mass of the market is."
But the most exciting aspect of the experience for me was the fact that both ETR’s and AWAI’s conferences were noticeably better than last year’s. And last year’s conferences were very good!
But If It Ain’t Broke…?
There is an old axiom in business that comes to mind at this moment: "If it ain’t broke, don’t fix it." Like most axioms, it is profoundly true… as long as you understand how and when to apply it.
So while I’m trying to convince you that it makes sense to continue to improve ("fix") your perfectly good, ("unbroken") product, I also want to caution you that you can unnecessarily screw it up if you don’t know what you’re doing.
In Automatic Wealth, I explained how I did that 30 years ago when I was editorial director for a small newsletter-publishing company in Washington, DC.
The newsletters we published were subscribed to by businesses and embassies that wanted inside information on commercial investing and private-sector development in Latin America, Africa, and the Soviet Union. But then I decided I could "improve" them by giving them a left-leaning slant, emphasizing politics and diplomacy and cutting back on the business and investment news. And since I didn’t bother to ask our subscribers what they wanted, the result was that I managed to increase refunds and reduce renewals.
Incremental augmentation isn’t that kind of fixing. It means adding value to your product – useful value that your customers are clamoring for – even when the existing product is doing well and keeping them happy. It means adding features and benefits on a regular basis that surprise and delight them. It means getting them accustomed to being delighted every time they buy a product from you.
This is exactly what the people at ETR and AWAI have been doing since they started producing conferences. Since that first AWAI conference in 1999, when 25 brave souls showed up to the Colony Hotel in Delray Beach only to find the AC broken and the conference room set in the middle of the lobby, things have been improving every year.
This year, a combined total of 600 people attended these two conferences, and I probably asked at least 100 of them, "Did this conference meet your expectations?" And the answer that was given to me over and over again was the same: "It not only met my expectations. It far exceeded them."
In the early days, a lot of mistakes were made, and the conference staff tried their best to make up for those mistakes by giving attendees lots of personal attention. These past few years, the mistakes have been few and far between, yet the personal attention has been greater than ever.
When AWAI put on their first conference, the revenue stream was small – less than $25,000 – and the profits were nonexistent. Now their revenues are getting close to the seven-figure mark and the profits are strong. ETR had even faster success with their conferences, because they were able to learn from the augmentations that AWAI initiated. Now both businesses are learning from each other. The potential for further growth is almost certain.
But it’s not the income growth that excites me. It’s the experience of attending these seminars and seeing how they are getting better and better.
This year, for example, I was amazed to watch Alex Mandossian in action. As emcee for the entire event, he brought up the energy level every single time he was at the microphone. And he was able to focus the audience on what they had learned during each previous session by stressing the main points that had been discussed.
Plus, by giving featured speakers more time both for presentations and questions from the audience, the amount of useful information that attendees took away at the end of each session was increased.
Plus, ETR’s best customers got VIP treatment at this year’s conference, including special seating, opportunities to speak one-on-one about their businesses with speakers at after-hours events, and increased attention from the ETR staff.
Plus, greater focus was put on providing networking opportunities for attendees than in previous years. Working out affiliate deals and joint ventures with potential competitors might seem counterintuitive, but it’s actually one of the best ways to grow your business.
Plus, ETR’s breakthrough Internet Money Club was introduced at this year’s conference. It is not only a complete program for starting your own Internet business from scratch (this club really has EVERYTHING you need to become an Internet master), but also an exclusive behind-the-scenes pass to the inner workings of Early to Rise (including a Golden Ticket that entitles members to sit in on ETR’s marketing meetings).
If you are in the information business and haven’t yet put on a conference, I recommend that you do so. It is the best way to meet your customers and see, firsthand, their reaction to your products and services. But whether you pursue a conference business or not, you should implement the concept of incremental augmentation in your organization right away.
Start by calling a meeting to critique your biggest-selling product. Ask: "How can we make this better?" Don’t worry about how much the improvements will cost. Just get them all them down on paper. With those in hand, interview your customers. Ask them "How can we do a better job?" And "What can we do for you that we aren’t doing now?"
Gather together dozens of ideas and then put your thinking cap on. Ask your team: "Which of these good ideas can we implement immediately and without cost (or risk)?" Make those your first priorities. Be sure to investigate the costs of each change you make and test the value of the change (if there is reason to believe your customers might not appreciate it) by incorporating it into your advertising.
My best clients make it a policy to improve their best-selling products every year. They don’t have to, but they do. That demonstrates to their customers that they are truly committed to increasing the value of their relationship. It increases trust and appreciation, which enhances back-end sales.
Making incremental augmentation an annual goal will have an amazingly positive impact on your business. Your customers will see your commitment to the quality of their experience with you… and you will be able to come back to them every year with a "new and improved" product.
[Ed. Note: Michael Masterson is one of the core contributors behind the Internet Money Club, ETR’s new Internet business-building program. It gives you an all-inclusive, A-to-Z blueprint for starting your own powerhouse Internet business - from learning how to pick a product and set up a website to discovering copywriting secrets from the masters, techniques to help you create an e-mail list, the best ways to market your product, and more. We’ve limited the number of spots to 250, and, as of today, we’ve only got a few spots left. So sign up now to be part of this exciting new program.]
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