Are There Only 2 Ways to Be Successful in Business?
I was browsing through the Robb Report recently while in a cigar shop in Denver. One article caught my eye. It was a profile of a man who developed a line of five-star Asian resorts. In talking about his business, he said something like, "There are two ways to be successful in business. You can produce a very inexpensive product and sell it to a great many people. Or you can produce a very expensive product and sell it to a very limited number of people. I chose to do the latter."
I thought that was pretty good. And fledgling entrepreneurs should spend some time thinking about it before they decide what kind of business they want to get into.
Unless, that is, they want to be information publishers. Selling information gives you the opportunity to do both.
Here is how it works.
You create an information product that is, in some way, unique. You offer it for free by way of a website, blog, or e-letter. You build a list of qualified prospects that way. Then you introduce low-priced products to them, products that somehow provide them with benefits they can’t get from your free service.
The buyers of these inexpensive information products become your "house" or "core" file of customers. You treat them like gold by offering them other free benefits and plenty of opportunities to buy more inexpensive products.
When your house file is sufficiently large (say, 10,000), you develop an expensive product. You sell that product to your house file and achieve a response rate you couldn’t possibly get by going to outside files. If that goes well, you develop and sell a second and even a third expensive product. The buyers of these expensive products become your VIP file. During boom times, you can develop third-level, super-expensive products to sell to your VIPs. These people will obviously be a very elite group, the kind of people who would vacation at the luxury Asian resorts developed by that fellow profiled in the Robb Report.
What I’ve just described is the business model that is available to Internet information publishers today. It’s no wonder why so many ETR readers want to be involved in this growing field.
[Ed. Note: Don't be intimidated by the prospect of starting your own Internet business. It's easier than you think. If you want directions for getting your own online business off the ground, you might be interested in ETR's Magic Button program. Get the details here.]
This article is golden. Volumes of books could (and have) been written on this topic which Michael Masterson has so clearly explained. In fact, I think that it should be read several times to really understand the business model. Some might miss how profound this message is because he explains it in simple steps. At the surface it might seem simple as get a newsletter going, get readers, and then sell them products at higher and higher costs. Don’t misunderstand how important this is. Fortunes have been made with this formula.