First, it is true. So begin looking for that jump rope. According to a recent report by MetrixGlobal for a Fortune 500 company, executive coaching provided a 529% return on investment. This report is supported by other research including Dell Computers. Half of the 761 senior managers at Dell Computer Corporation recently received executive coaching within a two-year time period. Dell has been actively monitoring these managers through pre-determined measurements. One of these criterion indicates that executives who received coaching tended to be promoted more often than those who were not coached.

So, if you are now convinced that coaching is a viable strategy to enhance your bottom line, then what do you need to do as a business owner to implement a coaching program?

First, research any coach or coaching organization that you are considering. Ask for specific references where measurable results were put in place prior to the coaching. The coaching should be results focused with clearly identifiable measurements. Also, coaching certification should not be a limiting factor as many certified coaches fail to earn even mid five figures. The determining factor should be about the results that the coach has delivered with his or her clients.

Second, look for a coaching program that works with your company and can be quickly and affordably aligned to your company’s culture. This curriculum should also be easily adapted to other training and development group sessions as well as to the different roles within the organization including Executive Leadership, Management, Supervision and Leadership.

Third, coaching is a personal relationship between the coach and the client. Your employees must feel comfortable with the coach. Some preliminary communication should take place with your employees before the implementation of a coaching program.

Fourth, the coaching curriculum should be structured, proven and provide numerous opportunities for application and feedback.

Fifth, everyone in the organization needs to support and reinforce the coaching program. Management above those in the coaching program must understand and be in agreement with the program.

To be truly effective, an excellent coaching approach extends beyond the professional life into the personal life. For it is within each individual personally where the performance excellence evolves.

Coaching is a proven way to dramatically enhance your bottom line provided you incorporate at least these five strategies. By taking such action, you can achieve your goals quicker and leave your competition in the dust. That is unless of course they decide to enact a coaching initiative before you do. So what are you waiting for?

In Great Online Business Success,

Obe Pro

http://obepro.com

The answer to this question often comes in many forms from many different people. I was recently at an entrepreneurial conference and had the opportunity to discuss this matter with many rich entrepreneurs. The answers I was getting from them were vastly different from those that my family had given me. On the one side I was being told that college is only useful if you are getting something out of it, and that if I was serious my businesses should take priority over schooling. From the family side I was being told to stay in school no matter what, put schooling at the forefront – there will always be time for business and it will be good to have a safe backup. Both of these answers have their merits, but which one is right?. It became clear to me that it was my decision- not the other wealthy entrepreneurs, and not your family.

Why are you in college?
This question is the fundamental element in the decision to drop out of college. Entrepreneurs must figure out the reality of why they are in college before making a decision to drop out. Some business owners are in college because their parents told them to go there, or because they didn’t realize they had the choice. Other young entrepreneurs are in college because they find the information valuable and want to continue learning while they expand their business. Even more still had childhood dreams of one day being an engineer or architect and want to follow through with their early ideals. You must answer this question truthfully and honestly if you are going to make a choice about running your business full time or staying in college.

Why Do You Want to Drop Out?
It is very important to understand exactly why you want to drop out. Many business owners and entrepreneurs have vastly different reasons for dropping out of college and it is key that you understand yours. I have often fielded this question in conversation, and many times a young entrepreneur will want to drop out of college on pure speculation. This is never a good idea without a solid business plan. I recommend having a solid business plan and some backups in the least, as well as some plans for continued learning of business skills. Dropping out is a risky decision – entrepreneurs will understand and easily accept this fact. Understanding and accepting risk is part of being an entrepreneur and starting new businesses. I have also talked with many entrepreneurs who already have million dollar plus income, and are thinking about dropping out in order to focus more on their business. This instance presents an entirely new set of questions. Whatever your reasoning make sure that you understand and research your position.

Here is the Secret to Making the Decision
It all comes down to balancing the two sides of the argument. If you’ve figured out both your reasons for being in college and your reasons for dropping out and starting a business, then you can easily make a decision. The trick is to look at a list of both sides: your reasons for being in college and your reasons for going out and becoming an entrepreneur. If either side has reasons that aren’t your own, or that have doubt in them, then you will most likely pick the other side. Here is an example situation, look at the two lists and decide what the student should do.

Student A – Reasons to Stay in College:
- My parents are paying for it, and they would flip if I left
- Everyone I know is in college, it would be weird to leave.
- A degree might give me some security later on.

Student A – Reasons to Drop Out and Pursue Business
- I have a solid business plan and have been working on it for months
- My income is almost half of my parents already
- Having more time to work on business would let me expand faster

I think it is fairly clear in this setup that we have an entrepreneur at heart. There is doubt in the reasoning behind college, and he also doubts that he will even need the security of a degree. The second list is much more profound and certain. This student knows he will be successful as an entrepreneur and he only wants to build his business more. There is certainty and understanding in his tone. With this situation it seems very likely that the student would be far better off dropping out of college and pursuing his business goals.

The case is almost never as cut and dry as the situation above, most young businessmen have far more complicated setups. Even with the complications, the end result is always the same. Follow the path that you are sure of in your heart. If you are an entrepreneur in the right position then you will know exactly why you want to drop out and that it will be better for you. Or, you will know that staying in college will teach you more about business and let you grow faster out of college. I will leave you with one last thing.

Listen to your own thoughts, and pick the path that you know is better for you.

In Great Online Business Success,

Obe Pro

http://obepro.com

A value proposition has three primary elements that you should focus on. The first of these elements is the target market segment. Who are you trying to sell your product to? Who do you believe that your customer base is? These are easy questions to answer for some while difficult for others. If you are selling men’s hair coloring to remove gray hair then it is easy to identify your target market. You are looking for men over 40 years old primarily. If you are selling make-up then you are focusing on women only. However some products make it more difficult to define the target market segment. If for example, you are selling automobiles then you want to appeal to a vast array of people, men, women, various age groups, etc. You need to spend time thinking about which target market segment that you want to buy your product or service and whom you think will actually purchase it. If you are selling high dollar furniture, you do not want to market to a lower socioeconomic customer base. If you are selling low priced automobiles, you will want to focus on that market segment instead of the more affluent market.

The second element to a successful value proposition is the reasons why a customer would buy your product or service. This is a point of differentiation amongst your competitors. Put simply, why would a potential customer choose your product or service over a competitor? Depending on your marketing strategy there are a variety of reasons that a customer may choose you over a competitor. Some of these reasons may include, price differentiation, quality, brand name, customer service, etc. As a business owner you need to decide which of these factors you want to focus on the most. Do you want to set your product apart from others because of the price? Do you want to draw a customer base that is focused on quality? Of course in a perfect world we would offer the customer the best of all these categories, but that is very hard to achieve. Appealing to both the cost conscience and the person looking for name brands is quite challenging and may very well be impractical.

The third element of a successful value proposition is comparison with other products. This is similar to defining why customers would choose your product or service over others. This is a frame of reference for you and for potential customers. If you sell Kia automobiles your frame of reference will likely be on the value of the vehicle. Conversely, if you sell Mercedes automobiles your frame of reference will be on the prestige associated with it and the quality of the vehicle. Volvo is often associated with being the leader in safety in the automobile industry so their frame of reference is different from both Kia and Mercedes. Understand that all of these automakers are extremely successful in their individual target markets. You too must choose what approach you want to take with your product or service line. Do you want to position your product as a value, a prestige product, a higher quality, etc.? Once you have decided what your frame of reference is you can begin your marketing campaign.

It is critical that you choose a marketing position that you can defend. Much like Kia is able to defend their claim to be inexpensive, Volvo has numbers to back up their safety claims. Positioning involves making a clear choice of the target segment to be served, the points of difference compared to the competitors and the frame of reference for the customers. A successful business offers more than one single benefit and appeals to more than one segment of the market while staying focused on the key benefit of that product or service while identifying to whom it has the greatest appeal. Positioning allows the business to choose with whom it competes.

Now look at your product or service and start thinking carefully about what you want your value proposition to be. It is quite difficult to change that value proposition once it has been implemented. For example, consider if Kia tried to compete with the customer base that Mercedes has. It would be quite difficult to implement, although not impossible. So get started today in developing that value proposition before throwing away money on misdirected advertisements.

In Great Online Business Success,

Obe Pro

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Cold calling is also called blind calling. The marketer in this case calls up or contacts a ‘random’ person who might, if the marketer is lucky, want the product or service want to buy into what the marketer is offering. Cold calling is pretty much like blind guessing who your next customer will be. The caller then does his pitch talk to this person even if he or she has not been referred to by anyone.

This method of marketing has also been used by honest marketers and has also resulted in good customer relationships. However, cold calling has fallen out of fashion due to the fact that it has been well abused by many an unscrupulous marketer.

Advantages? It allows you to tap into a potentially unsaturated market. It allows you to create a new network of referrals, especially if yours is running dry. But do the advantages outweigh the disadvantages?

1. Irritates the investor

Cold calling has gained the ire of many a customer. This is because many of the cold callers usually conduct their business at nighttime. This is very inconvenient to potential clients because they generally want this time to be private. And dragging a person out of bed in their pajamas to talk about business is as irritating as it gets.

Many marketing firms employ boiler rooms to conduct cold calling. Boiler rooms are a team of cold callers whose specialty is spewing out very persuasive scripts on why you should buy into their product. Unfortunately, these callers tend to be abusive, and pugnacious. Many of the clients they get only took up their offer because they were coerced into doing so. Their motto is: as long as the person is on the line, there is still a chance to badger him or her. This is not the kind of marketing that gains mutual trust and respect.

2. Unfocused Marketing

Cold calling marketing is unfocused marketing. If you cannot focus your energies on better prospects, you might find yourself using up resources on people who are not really interested in your product. It would be better to use mailing lists or profiling to know which customers would most likely avail of your offers.

Cold calling sometimes relies on pure luck or stubbornness to get their clients. Unscientific. Unreliable.

3. The law

Believe it or not the law has made steps to safeguard clients from the wrath of cold callers. Law dictates that cold callers only call during working hours. They are no longer allowed to call from 8:00 P.M. onwards. Clients can now submit complaints to the authorities if your cold callers become abusive or disrespectful. For a business to be successful, you would like to avoid tangles with the law such as this.

Unfortunately there have been many reported scams in regards to cold calling marketers. As said in the first reason. These callers are usually annoying and abusive. The people you call may take offense at this and report your company to the authorities.

4. Loss of Trust

Since cold calling already has a bad reputation, affiliating with this kind of service could have a negative effect on the image of your business. If you want your business to be reputable, you will have to use reputable methods to gain the confidence of your customers. Remember that you are not merely wishing to siphon money off of them, you are also trying to establish a mutually beneficial relationship with them.

The Verdict

Cold calling can still be a good way to broaden your client network. However, the intrinsic dangers that it displays may not be very appealing to many companies. Before even considering cold calling as an option, take a look at the other marketing strategies that are in existence.

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Obe Pro

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1. Know your product/service
Know it inside and out, backwards and forwards. You should know its strengths, weaknesses, and any proprietary features. Also understand the factors that influence its supply and demand. All of these will strengthen your presentation and help the skeptic make a more informed purchasing decision. There should be nothing that anyone can tell you about what you solicit. You will definitely be asked questions, so be prepared to demonstrate all aspects of your product/service in response.

2. Know your prospect
Along with knowing your product comes knowing your prospect. Strive to know all you can about your target demographic and potential clients. Make sure you deal with the decision maker. You should know their purchasing habits, what motivation determines their choice, and how long a buying decision takes. You must understand how your product fits into their overall purchasing strategy. When you know the buying habits of your prospect, you can use it to develop a longer-term sales plan—that means repeat business. Put yourself in the most favorable position to get a “yes” by focusing on what most concerns your prospect.

3. Believe in your own words
You will never be effective selling something you do not believe in, particularly to someone who is already skeptical. Your lack of enthusiasm will be an obvious as you attempt to convince your potential buyer. When you emanate passion and confidence, you break down the wall of doubt the cynic has built. To not be a pillar of strength during your presentation is a sure-fire ticket to an abrupt “no.” If you are lucky enough to sell a product you do not believe in, you still lose because you risk killing referral business and losing the trust of your customer.

4. Be transparent
Too often, we give strong pitches with lots of hype and little information. We will say, “If you want these benefits, buy my product.” This is done with the hope that a prospect’s curiosity about your bold claims will be enough to convince them to purchase. The idea that if you divulge too much information, you could dissuade your prospect is a far too common falsehood. Be prepared to give as much information as needed to convince the potential buyer to make a purchase. Transparency builds trust. Things people do not understand will always be greeted with “no.” The more information available when making a purchasing decision, the more likely they are to say “yes.” Another benefit of being transparent is the more resources you divulge free of charge, the more likely you are to generate interest in your product/service.

5. Gain trust by associating yourself with things they respect
By offering endorsements and testimonials, especially from well-known sources that your target market respects, you strike the chord of “trust.” Many a skeptic has purchased based on the recommendations of individuals they respect. Secure associations along these lines and look to align yourself with trusted agencies through strategic partnerships. Major endorsements mean less resistance and lots of sales.

6. Offer a free trial, incentive, bargain, or guarantee
The structure of your offer can play a key role in building trust and enticing your prospect to buy. There are many variations of each, but incentives and guarantees are great ways to gain your potential buyer’s confidence. Guarantees and free trails allow the skeptic to try the product/service before determining if your offer is a good fit. Incentives and discounts are also valuable tactics as they make the cynic feel they are getting a value. People always love the feeling of getting something for free and buying when it is a low/no-risk transaction. By guaranteeing the quality of your product/service, you disarm the skeptic and encourage them to buy. You also communicate an important message that you are confident in what you sell.

7. Compare and differentiate yourself from your competitors
Know the nature of your business. Is it commodity based, where the low price bidder wins? Is the strength of your brand a factor? Is there something unique about your offer? You must understand your competitors and their advantages and disadvantages. Once you have both the knowledge of your competitors and an understanding of the skeptic’s needs, you can choose the most effective marketing angle. We offer such phrases as:

“The lowest cost”…you play to the desire for value
“The official”…you validate for authenticity
“The best”…you show superiority
“The only”…you offer exclusivity

If possible, demonstrate the differences that make your product/service unique or superior.

8. Sell the relationship, not the product
Contrary to popular belief, the best salespeople not only close deals, they foster relationships. Relationships are more valuable to both you and the prospect than a one-time transaction. For the salesperson, relationships bring repeat business and the ability to cross-market your offerings; increased referrals because you gain access to the prospect’s network base, and the ability to charge a premium because of the higher perceived value of your relationship. For the skeptic, relationships help build trust. These bonds let them know they will not be abandoned after the transaction is finished. Ultimately, they are buying a relationship with you and your firm, not the product/service, so approach selling that way.

9. Focus on benefits offered and value delivered
Self-interest is the skeptic’s primary concern, so focus on how your product/service solves their problem, fulfills their need, or satisfies their desire. If your prospect is solely bottom-line focused, your presentation should be centered on how your product or service will make or save them money. If your product satisfies a desire, focus on how it fills an emotional void. Emotional selling differs from bottom-line selling because it focuses on feelings rather than metrics. Remember to focus on the benefits that concern your potential buyer; anything else will make a skeptic lose interest and you lose the sale.

10. Isolate their objection
In life and business, two of the greatest challenges are making intelligent decisions and properly following through on them. One of your fundamental goals as a salesperson is to help people make informed decisions. To do so, ask two types of questions: those to better understand your potential buyer and his/her needs, and questions designed to lead your prospect to buy. A series of well-placed questions will allow you to isolate any objections. You should brainstorm every possible reason a skeptic will not buy from you and comprise an effective solution or rebuttal for each. Any other question should be crafted in a way that allows for only one reasonable answer, and that answer should compel your prospect to agree with you.

11. Don’t seem desperate!
Your emotional state will be apparent to a skeptic. Never appear as though you “need” a sale. Everyone avoids a hard-pressed individual. Often we are conditioned to give to and buy from those who do not need our money. It is the same principle that makes us more likely give a rich man fifty-cents to make phone call because he has no change, than to a homeless man in need who makes the same request. Therefore, it is imperative that you operate from a mindset of abundance. Understand there is always a bigger sale out there, so you need not be pressed for this one. Your confidence will put the cynic at ease and make them more likely to buy from you.

Once internalized, these 11 points will mesh into an effective sales strategy. You will begin to think of them not as individual points to be mastered, but one comprehensive selling technique. They are designed to compliment each other and give you a thorough footing for selling to those who are naturally doubtful about you and your service. Master them and win!

In Great Online Business Success,

Obe Pro

http://obepro.com

The easiest way to do this, both on- and off-line, is through a content newsletter. There is no doubt that content sells. Useful content builds trust and credibility, and over time turns your customer from a stranger to a friend.

An online newsletter is easy to begin–all you need is an autoresponder.  You can advertise your newsletter on your website, on forums, on your business card, in articles you write, on traffic exchanges, and in your email signature. If you faithfully do these marketing tasks, your email list will grow over time.

You must provide useful and informative content in your newsletter. If you want subscribers to read it and (eventually) buy from you, do not offer them junk. I define “junk” as opt-in spam. Don’t fall into the habit of sending out advertisements veiled as “articles.” Don’t send only solo ads. Instead, research topics for your newsletter and write quality articles. Subscribers who are impressed with your newsletter will buy from you. But it will take time to build trust. Trust is not built through junk.

There are three phases to this process: 1) Get a lead; 2) Convert that lead into a customer; and 3) Convert that customer into a super-customer. Your newsletter will help you accomplish all three tasks.

If you sell or market a product or service, and you are driving traffic to your website, you typically have only one shot at capturing the interest of a prospect. If I go to your site and click away, I may never come back. You need some sort of follow-up system. A newsletter is the perfect vehicle for follow-up.

If you are sending targeted traffic to your site (any other type of traffic is a waste), visitors will be interested in the content of what you are offering. To keep their interest, and to keep your name in front of them, offer a f-re-e newsletter. Even a simple, once-a-month newsletter will do.

If they sign up, you then have a chance to build a relationship. This is done through your content. Many people don’t buy something the first time they see it, but as they come to know you and your product through your newsletter, they become more willing to purchase. Over time, just by offering a newsletter, you can convert more leads into customers.

You turn those customers into super-customers also through your newsletter. If the product or service they bought from you was quality, you have built even more credibility with them. Perhaps now they will make repeat purchases, or join a membership site you offer, or even become an affiliate for your product or service.

But the key is to offer useful, informative content. If the premier issue of your newsletter is nothing but an ad similar to your site, you will lose that lead. Build relationships through high-quality content, and you will convert leads into paying customers into paying super-customers.

In Great Online Business Success,

Obe Pro

http://obepro.com

The MLM Consultant receives a commission on each sale, and so does the sponsor who referred that consultant to the company in the first place. There are people making great money in MLM using a variety of methods. Some work exclusively online. Others work exclusively offline. Some lead with the products. Others lead with the business. But they all have one thing in common– they found something they love to do and they started doing a lot of it!

In MLM business when you refer people to your business they go on and refer others. You get paid commissions on the sales of everyone you ever refer to your MLM Company. When the people you refer go on and refer other people you get paid commissions on those orders too!

The secret of success in MLM business lies in networking. So much so that MLM is now referred to as Network Marketing. All you have to do is get people interested in not only buying the product but also selling it. Finding such people is crucial to the business. Don’t worry though. It doesn’t take many. Don’t just think of the people you know; instead think of all the people each one of them knows.

When you join any company your sponsor will ask you to get 3 people. And you will, in turn, tell each of the three to get 3 people and so on. Soon you’ll be sitting on top of a pyramid. The three in your down-line will make three each, and their nine will make three each and so it will go on multiplying. And, with every sale down the line you earn a commission. Thus, your MLM business can generate earnings for you long after your involvement in the initial sale.

That simple little business right there would be a six-figure income in just about any MLM or Network Marketing company. The fact is that once you become a member of a Network Marketing Company you’ll need to find others that want to join you. This is one of the reasons why you need to make sure you find a company you really believe in. You should be able to believe in the products you promote in order to convince people to buy them. There’s a million ways to build your MLM business. Basically, you need to tap all your sources to find the right people who could be people you know or those who are interested in the product. The best MLM Consultants teach you how to do the business in a way that you like. Multi-Level Marketing is the last real chance the average person may ever have to change their financial future and live a life with the free time and money they could only dream about before.

In Great Online Business Success,

Obe Pro

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By now you may be asking yourself, “What should my prices be?”

Before you go start changing prices, you need to clarify a core part of your overall positioning. You need a pricing perspective.

Do you want to be a low priced provider, or would you rather sell the premium product? There are good reasons for being a low priced seller. Just as Michael Dell – that’s where he started, although he certainly isn’t there now. Or look at Costco, or Amazon. If you look to these models for inspiration, make sure you have three things: a firm grasp on your margins, deep pockets, and the ability to do lots of volume. Without all of these three, you will surely go broke.

Where are you personally more comfortable? If you sell at the high end of your price spectrum, you are likely to attract higher end clients, and it would help to be comfortable in that rarefied atmosphere. On the other hand, you may feel better on the low end. It’s a choice and you have to make it.

What will attract the type of clients or customers you want? Your price is a signal to your potential clients telling them who you are in the marketplace. And if your goal is to raise the quality of your clientele, the easiest way to do so is increase your prices.

Do you want a low service, volume business, or would you prefer fewer, select clients and give them “high-touch”? High-volume, low-touch businesses can be very profitable, and can generally scale more easily, but require more planning. Low volume, high-touch (select always means high-touch) businesses, may be easier to build and require less overhead. If you are thinking of a lifestyle business, go the latter route.

Do you want a quick in-and-out transactional business, or would you rather develop long-term, nurturing client relationships? If you want to build something easy to scale and perhaps sell down the road, high-volume, low touch may fill the bill. If you are developing a life style business to carry you into old age, or a “professional” business with a strong public image, think long-term and nurturing. Higher prices usually go hand-in-hand.

Develop a pricing perspective that fits your goals. Your decision will go a long way to determine who you do business with and how you do it, and will also effect how you can dispose of your business. There are no clear guides to the right choice. It’s more a matter of preference and positioning.

But perspective is not the only element to pricing. By itself it will tell you how to price (high, low, middle of the road), but not the exact price itself. Before I share with you how to do that, let’s examine a few common approaches to pricing.

As nuts as this may sound, lots of people price to pay the bills. No kidding. I’ve seen this advice in more than one article for professional service companies. “How much money do you want to earn? Divide that by how many hours you have to sell…” And so on. (By the way, cost-plus pricing is just as crazy.)

Price to time. This is what most services people do. They set their prices by the hour, or by the day. The biggest problem is this makes it way too easy for prospects to compare your price. It also puts them in control of your time if they do buy.

Price to competition. This is the most common form of pricing, and is the core of all prices based on market research. And it makes sense if your offer is comparable to that of your competitors.

One last common pricing structure is front-end or loss-leader pricing. Loss-leader pricing is not designed to generate operating profits. Its purpose is either to take market share from competitors or create customers to whom you will later sell other things.

If your goal is to drive your competitors out of business, and you have deep pockets to sustain an unprofitable price war, this can work brilliantly. Many big box retailers, including Staples and Home Depot have followed this strategy. Long years of low prices eventually crushed their competitors, and both raised prices when their markets thinned out.

If you have a profitable and expensive product or service, an effective approach is to sell something that is cheap. For instance, if you have a high-end seminar, a low end ebook or free consultation can bring in all the customers you want.

There are other considerations to pricing besides the bottom line. But if you want to understand how to increase your profits, stay tuned for Part 3.

In Great Online Business Success,

Obe Pro

http://obepro.com

How did you decide on your current pricing? Did you conduct market research to understand what prospects would pay? Or did you compare yourself to your competitors and base your price on that? Or was it a crapshoot, and random shot in the dark?

These are the ways most people do it, and they are all wrong. Because the price you set for your products and services is more important than you think.

The following few paragraphs are a bit number heavy, but stay with me because this will be really valuable for you to understand.

Let’s say you sell a high margin product – information products and software are two good examples. Your price is $60, and your costs are $10 – that means your gross margin (selling price – your costs) is $50 each time you sell one unit. Let’s say further that your overhead is $5,000 per month. If you sell 100 units you’ll break even, right?

Now you want to sell more, and decide you can take some business from a competitor by lowering your price – temporarily. You lower it to $40 – a 33% price cut, and not uncommon.

Your costs remain $10 and your overhead is still $5,000, only now your gross margin is $30 – 60% of what it was before. And how many units do you need to break even now? 166! That’s 66% more unit sales required to make up for the 33% price cut!

But what if you’re feeling very aggressive and you cut your price in half (also not unheard of) to $30. Now you have to sell 250 units – just to break even! That’s 2-1/2 times as many as before. How easy do you think that’s going to be?

Let’s use a different example – something that has real manufacturing costs. This time, your product sells for $100, and your cost of goods are $50 per unit, for a gross profit of $50. Same $5000 overhead, same number of units to break even. Now imagine you cut your price 20%, to $80, leaving you with $30 of gross margin. You need to sell 66% more units. Ouch!

What if you cut the price to $70. This 30% price cut means you have to sell 2-1/2 times more units – just to stay even.

Let’s go further…

Competition is really heating up and you think that matching them cut for cut is the way to go. The price for this amazing widget of yours is now a bargain basement $60.

(Shucks, that’s only 40% off your original price. Salespeople and business owners do this every day.)

How many units do you need to break even? 500.

Five hundred? That’s five times your original number.

Do you really think you can sell five times what you did before – at least without significantly raising your overhead and your variable cost of sale?

How many times have you done just this in response to competitive pressures?

How many times have you cut prices because you thought it would help you sell more?

:(:(

What we’ve just done is a simplified version of what’s called margin analysis, and I hope it gives you a glimmer of what can happen when you mis-price.

For the most part, your price cuts don’t automatically enable you to sell 66% more than you did before, and generally – at least not in this universe – you don’t sell 250% more, and never, ever do you sell 500% more with this kind of price cutting.

But there is some good news – and it’s very good.

Let’s look at what happens when you raise your prices.

Remember your high-margin product. It sells for $60 and costs $10 to make.

Through good product positioning and excellent marketing you raise the price to $70. That’s only a 15% increase. Now you only have to sell 83 units to break even, and if you sell the same 100 units, your profits go from $0 to $1000. Nice increase…

And that “hard” product – the one with $50 of costs? Raise the price tag 20% to $120, your margins increase to $70, and now your breakeven drops 71, and you make $2000 if you sell the same number of them.

See how this works?

:):)

You can do this same analysis in a bit more sophisticated way, considering your marketing costs, sales or affiliate commissions, travel expenses if you have them, and so on. You can see the actual pricing effect varies quite a bit depending on these details.

If you have a high-leverage, pay-only-for-results affiliate model, a very high gross margin and almost no fixed overhead, you have a lot of price flexibility. You can cut the price 25% and only need to sell 15% more! That’s not too bad at all.

But only in that type of model. If you have a office, some staff, and a physical product – in other words, fixed overhead – lower prices can kill you – and you won’t even see it coming.

And higher prices?

They can make you rich.

By now you are starting to see the tragic effects of mis-pricing on the downside, and the marvelously enriching possibilities of raising your prices.

This only works, of course, when you can also increase your value proposition…

Stay tuned for part 2.

In Great Online Business Success,

Obe Pro

http://obepro.com

Here are some killer examples for you to gain more subscribers:

1. Make Them An Offer They Can’t Refuse.

“I’m going to make you an offer you can’t refuse”. Remember that saying? The first step to consider is what to offer your subscribers. Find out what people want and create a free product, ebook or report around that topic.

When Google changed their Algorithm, immediately people were asking, what went wrong? How can I get my positions back?

I retained my positions on Google and proceeded to run various tests to see what had changed. I quickly figured out what was needed to get top 10 positions and created a free report called “The Google Shake-UP”. A FREE ECourse on Getting Top 10 Positions On Google – Even After The Florida Update.

…Offer people what they want and they will not ignore your message.

2. Writing Compelling Articles and Reports.

Write and submit articles to ‘article directories’ with a compelling resource box at the end of your report. If you have a website about Dog’s, you could write a report called “How To Train You Dog In 7 Easy Steps, Without Hiring a Pro-fessional Dog Trainer”. Then you just add a compelling resource box at the end. You can see mine at the bottom of this article. This is by far the best way to grow your opt in list.

3. Posting To Online Forums.

This is a great way to get recognised. Actively participating in online forums and message boards will build credibility for you around your chosen subject. Just make sure you always post your signature at the bottom of the posting or report, with a link to your newsletter address and or signup email.

To build up more interest you could write a ‘3-day’ course on your chosen subject and submit ‘day-1’ to the online forums. All you do to build up anticipation is this:

At the bottom of your post in you signature or a P.S you can add the following:

To get ‘day-2’ of this special report, please send a blank email to: yournewsletter@yourautoresponder.com – This points to your newsletter with ‘day 2’ preloaded to send out.

You get the idea.. This builds great anticipation and will generate a lot of interest. Just make sure your initial report is compelling enough for them to want the second edition.

4. Run a Reward Scheme To Existing Subscribers.

If you have an existing list of over 500 subscribers, you could send out an announcement to them saying that you are running a special promotion for the next 30 days, and you are going to offer them a reward for sending you the most subscribers.

You could send them a cash bonus or a free program at the end of the month. This can all be tracked by simple affiliate script software.

5. Submit To Ezine Publishers.

There will be many existing email list owners on your chosen topic. You could approach them and ask politely to use your article in their ezine.

Publishers are always on the lookout for new content to send to their lists. Don’t forget the resource box to sign up for your ezine.

If you write them an email, just follow these points and they should have no reason to reject your offer.

a. Subscribe to their ezine for a couple of editions and get to know the way they do things.
b. When your report is ready, email them with a positive comment about their newsletter.
c. Make sure you article or report is helpful and ask them to publish it in their ezine.
d. In return offer them something for free. Ie. A report you have written around that chosen topic.

As long as your report is useful and you approach them politely and positively, you should be able to get your article published in various ezines. This is a killer way to get more subscriber to your opt in list.

In Great Online Business Success,

Obe Pro

http://obepro.com