November 1998 Links to Sales Journal:
The Insider Perspective

The Insider Perspective is a monthly column for insights and innovation. You are invited to participate. Email declan@linkstosales.com with your suggestions.

How To Turn Your Customers Into Affiliates

What makes the Internet so different is that the customer is in control. Unlike advertising in television, print, or radio, where the goal is to get the viewer to pay attention to what is in front of them, the Internet offers them many, many choices.

This is one of the most difficult parts of online marketing, the amount of choices. Lots of choices confuse people, often blurring one item with another. The real goal of an affiliate program is to get your customer focused on a specific purchase decision and guide them down that path.

The biggest mistake companies make with affiliate programs, and Web Site marketing in general, is to get sucked into the mechanics of their business. They try to define themselves as a specific kind of e-commerce shop (HINT: When you use the word e-commerce, it means you don't know what you really want to do with your customers...but it sure makes people who know the Internet smile ;-).

This internal focus creates a business model, projections, and assumptions about their customers. The goal of such a business is to make the customer understand how their operation works. The assumption is simple; if I can show that dumb consumer how to work my e-commerce system, I'll make tons of money.

Your customers don't want to figure you out. They have lives of their own, which not surprisingly, they care more about than your business. They are at your site for a variety of reasons, and may not be in the purchase decision mode. So all your convincing and systematizing of your business is fruitless if you do not address their specific needs.

For example, Amazon.com has a policy that prohibits affiliates from ordering books from their own Web Sites. If I am an Amazon.com affiliate, I cannot get the discount my visitors get. On the surface this may seem logical, yet wouldn't most affiliates try this anyway? (See the last section, Repeat Business, for the secret of how this may be the strongest weapon for affiliate networks.) Amazon.com is actually trying to stop people from doing what they normally would do, instead of enhancing a natural consumer behavior into a long term, buying loyalty program.

Your goal is to find out how your customers want to shop and reward them for doing so. Customers need to gather information about your company, proof that you are reliable and worth extending their trust - their hard earned money - into your business.

Your goal is even simpler:

A. Customer-centered marketing: Gather as much information as possible about the customer without intruding on their privacy

B. Personalization: Determine how close to buying the customer is

C. Define how big the potential purchase is.

D. Repeat Business: Create ways to quickly and conveniently follow up with your customer.

Affiliate programs are usually bogged down by an over reliance on hardware and software solutions. Let's focus on the real solution, your "customerware", and put a specific idea on how to turn them into your real affiliates.

Customer Centered Marketing

Gathering information is usually defined as giving a customer a bunch of questions to answer, and hoping they answer them. If you focus on making the customer work, the results will be minimal.

For example, a company called BonusMail wanted to gather information about its consumers. BonusMail offers paid email, by rewarding its customers with points that can be redeemed for travel, dinners, movies, and many other items (http://www.bonusmail.com). Their goal is to learn about their customer and send them offers tailored to the customer's specific needs.

The problem BonusMail had was common; they asked too many questions up front. It was like someone meeting you on the street and getting personal. The questions became an intrusion. So BonusMail developed a system that asked these questions over time. They dramatically reduced the initial number of questions and increased their customer base. In fact, they are one of the fastest growing sites online. It's easier to ask questions after someone gets to know you.

Remember that your customer's comfort is most important, and you are really introducing yourself to them. To get the most out of your customer-centered marketing, focus on the following:

1. Define what kind of information you really need to get and the time frame for getting it. If you need to know simply who your customer is and where they are located, you can ask just for name and zip code. If you want to know what sort of products they buy, or important demographic information (such as, do they own their own home? Do they have children? How much is their yearly income?), you need to develop these questions over time and reward people for responding.

2. Instead of always asking questions, what if you measured behavior? Set up a system that invites people to take actions. Affiliate programs are an excellent way to measure behavior. Set up a page of related products and see which ones your customers go for. Measure this by clickthroughs on your advertising, by responses to your email forms and surveys, and by actual buying behavior, the SellThrough ratio we talk about in the book. Use affiliate programs as a testing mechanism.

3. Be sure you let your customers give you feedback about what they want. Tailor the shopping experience to them by rewarding them for input outside of your common sales process. If they take the extra steps, give them a discount or add bonuses to each purchase. Make it profitable for them to buy from you again and again, and pay attention to them.

Personalization

This term is the most over used on the Internet, for a good reason. The real goal of online business is to create a customer base that always buys from you. This is the promise of one to one marketing, of being a direct connect to the buying behavior of your customer base. To do this, you have to personalize the shopping experience.

Many think that by simply splashing up someone's name on a Web Page, they've made it personal. The problem is that your business can only offer a limited number of products and services. Many Web Sites have attempted to personalize shopping by asking a bunch of questions, or setting up password protected areas where customers fill in enormous amounts of data.

Once again, if your customer has to work to work with you, the approach is doomed. Personalization is about consumer behavior, tracking it and delivering suggestions. Here's some examples:

1. Build an email list with consumer advice and the latest news in your specific business. Create cooperative advertising with related products and services who deliver information about their specific business. If you try to do this all by yourself, you will run out of things to say. Broaden your effect by targeting more than just your business; target the specific interests that revolve around your product/service line.

2. Take advantage of the glut of content online and make joint venture deals to supply good content to your customer base. A successful Web business operates much like an infomercial; a bit of content, a bit of sales, a bit of content, and a little bit more sales. There is so much great content you can deliver to your customers. One idea is to contact online experts and use your affiliate program to sponsor a specific section of their site. They get traffic and build sales for your affiliate program, while getting paid for each sale they generate.

3. Create a special system to remind your customers of new products and services related to their interests. For example, I buy business-related books and history books from Amazon; why don't I get a book of the month recommendation for business and for history?

4. Recognize what your customer wants and record all behavior in a database. You can track this via cookies for clicks, and via orders for shopping behavior. How often do they buy? Is it seasonal? What is their birthday and why don't you send them a card on this and other important holidays? Where do they live? If I know someone's sex, zip code, and their date of birth, I'm armed with significant information to personalize their shopping experience.

Define How Big the Potential Purchase Can Be

One of the most crucial factors you need to understand about your customer is their capability to buy what you have to offer. If you don't have the right price for the right product, to the right audience, your business will fail.

Establishing how big a potential purchase can be is not that hard. Here's a technique for determining the possible buying behavior by using a survey to open the doors.

The Direct Response Survey

Surveys are an excellent way to measure customer interest before they buy. The two major oppositions of buying online are price and security. Use these to your advantage to determine if your target audience will buy what you have to offer. Send a direct mail or direct email to your current customer base, or ask prospects as they get situated into your business what they would like.

Begin the process by creating an immense reward for their input. You can define this in a number of ways; give them a free report, free access to your password protected information online, discounts, coupons, special bonuses (buy one, get one free), and added incentives. Set three levels of pricing for what you offer (high, your price, and low price). Then ask them five simple questions as follows:

1. When you are looking for information about (your product), what Web Sites, magazines, and other resources to you go to find what you are looking for?

2. If you were to buy (your product) today, would you consider (insert your high price here):

   Too expensive   The Right Price   Too Cheap

3. If you were to buy (your product) today, would you consider (insert your target price here):

   Too expensive   The Right Price   Too Cheap

4. If you were to buy (your product) today, would you consider (insert your cheap price here):

   Too expensive   The Right Price   Too Cheap

5. When is a likely time for you to make such a purchase?

   Now   1-3 months from now   6-12 months from now   Not Sure

Repeat Business

The core of any business is its repeat customer business. Affiliate programs should be a way to encourage repeat behavior. Yet many businesses are, unknowingly, fighting this.

Most Internet businesses focus on the first sale and little, if any, on the back end and repeat business. Affiliate programs are a means to generate an initial sale, but the real gold is in mining the customer's behavior and encouraging them to work with you.

Earlier in this article I mentioned how Amazon.com prohibits affiliates from ordering books from their own Web Sites, ie getting the discount on buying books through their own program. Amazon tries to monitor this, but it is practically impossible unless the person is ordering many, many books.

Please understand that I'm not recommending that Amazon.com extend an extra 15% discount to every affiliate. But I am suggesting that this behavior should be expected, is natural, and in fact should be encouraged with perhaps a 5% discount on any book they buy.

What better way to get customers buying than to turn an affiliate program into a customer loyalty system? If I buy my books through my own affiliate program (and remember, Amazon.com has over 100,000 affiliates) and get a 5% discount, the affiliate becomes a loyal customer. How many stores have tried to put customer loyalty programs in terms of discounted prices to their repeat customers?

Amazon.com is trying to fight a natural behavior, instead of encourage it. Their lesson should be yours; to encourage repeat business, give them a good reason to always buy from you.

As affiliate programs evolve, it is becoming clear that the customer is the ultimate affiliate. Extend the concept of affiliate programs into customer loyalty programs and give people a reason to always return to your store to buy.

If we take the Amazon.com affiliate model, you understand that most affiliates will not create the HTML code for every book they want to buy. They may buy a few books and gain the benefit, but long term they will plug into Amazon.com to buy their books immediately. After all, 5% is not that much to save in terms of time on a $20 book (the customer is really facing a $1.50 decision; is it worth it to save a $1.50 on every book I buy, or to buy now?).

Affiliate programs should not only be a way to generate leads from other businesses, but can be integrated into Internet businesses to make customers loyal. Imagine if you went to a bookstore that promised you 5% off of any purchase you made at the store by becoming an affiliate? And that reminded you to come back to visit?

The secrets of affiliate programs are not only generating leads and sales from other Web Sites, but in building up a loyal customer base. Reward programs and customer loyalty systems will be critical factors in developing a long term customer base.

Watch as many businesses fail online because they fail to recognize that the most important asset is not the sale, but the long term customer who buys from you again and again.

Case Study: Habitat

This month Habitat, Inc. is rolling out its online affiliate program to target niche markets. In order to better understand how to roll out an affiliate network, we're going inside the program to show you the decisions that have been made to maximize the value of this affiliate network.

Habitat, Inc. has a catalog of over 300 items which we broke down into specific categories of special interest based on the following research. They offered affiliates the ability to link directly to the home page, or to a specific entry page based on their Web Sites special interest.

Click here for discounts and savings...
Habitat clothing, mugs, stationery and t-shirts

By following the process here, you will understand a simple, direct way to test your affiliate network online. Habitat, Inc. offers nature related apparel, with hand painted artwork. In order to further the reach of this company, they had to define the target sites to affiliate with. We begin with the keywords.

Keywords

The first job of targeting your affiliates is to determine those words, those categories, of business that apply to this particular market. Habitat, Inc. has a wide selection of apparel with retailers primarily located in outdoor recreation areas of the United States like Maine and Wyoming.

The goal is to take a natural selection of keywords, look for who is offering similar products, and where their customers are going to fulfill their interests. Here's what we began with:

The next step was to go to the search engines and look for these keywords. The goal was to find the leading directories of outdoor-related interests, products, and services that could lead us to the best sites. Finally, we went to ezine lists and Web Sites that rate the amount of traffic a site gets (http://www.hitbox.com, http://www.top100.com). Frankly most of the sites measuring traffic did not give an accurate picture of the Internet; only those who ranked their sites at these directories were registered. Many people don't know about them. But the results were fascinating.

The goal was to find sites with a good following (at least 5,000 visitors a month) and a subject people were passionate about. What we found was far greater than what we were initially looking for.

Yahoo

Yahoo is excellent for breaking down your keywords into categories; as we clicked through the lists for outdoors, for example, we came to a huge listing of sub-directories. Part of the problem with Yahoo is that it is like the Chinese box within a box problem; you keep clicking and never seem to get anywhere.

But once we got to outdoors, we found listings of all the type of activities people engage in. There was hiking, fishing, national parks, and a whole bunch of others. Next to the directories is a number in parentheses, indicating how many listings are housed within. For hiking, there were only about 30 or so. For fishing, there were much, much more. Common sense showed that fishing was a prime interest online, which it is.

We went to the sites, identified Subject Matter Experts (SMEs), ie people who knew what they were talking about with Web Sites that had high traffic, and invited them to join our affiliate network. Going to a trusted resource for a highly trafficked item is an excellent way to begin.

In order for this to succeed, we personally evaluated each Web Site for content, credibility, traffic, and agreed to contact them after evaluating their site. Our inquiry message included references to their site we liked, to show them it wasn't a cold call. We had done our homework to carefully select those we wanted to work with. No one opposed this approach, because it was highly selective, and personalized. Most of all, it was an invitation.

Excite

Excite shares interesting results because it lists associated keywords with the search you went to. This actually helped narrow the focus of our affiliate search. We also looked for those sites who bought banner advertising subject to the keywords we put in. If the banner ad had nothing to do with the search phrase, we assumed that this keyword had little advertising, ie dead advertising space.

Excite was a good resource to help move beyond the initial phrasing of our keywords, but we were not able to find that many good sites with it.

Infoseek

Infoseek takes an approach that can benefit your affiliate network. They rank sites subject to the number of links that site has to it. While this may not yield a totally accurate picture, it does give you good reason to contact the top listed sites.

One interesting fact; we searched on the phrase "wolves" and found little related advertising. This important niche was later identified to approach Infoseek for a commission banner program.

The results of our search engine work were a number of directories that covered an important interest people had online. We identified the market as outdoors and environmentally related sites, with passionate interests and communities developed around preserving the natural environment. For example, a site called The Web directory (http://www.webdirectory.com) has many outdoor related sites. Specific hobbies like fishing and skiing were highly visited, although skiing did not really fit in with our current goals for Habitat.

Ezines were also a poor resource because we couldn't find any related to these specific topics. There were many mailing lists and newsgroups, but none were really commercially minded and it did not seem to be an appropriate way to reach these groups.

Competition

Apparel is still an open market online. Only a few major retailers like Lands End and Eddie Bauer were found, whose sites were not integrally linked to any of the high traffic Web Sites we found. These sites act as a destination point, as if you can only buy within their store.

They left the entire apparel market open online to a wise company who would position itself within selected target markets and empower the trust the Web Site owner had with their audience. It is funny how many of the big companies will spend money on print and banner ads, but will never think to go to the sites where their audience is currently meeting.

Since apparel can be sold via a catalog and is one of the best sellers on AOL during last year's Christmas season, it is a good test for Habitat to get their feet wet online.

Targeted Affiliates and Strategic Portal Sites

From the search engine results, as well as research via the leading directories, newsgroups, and mailing lists, we nailed down the following categories of Web Sites as being good, target affiliates:

Outdoors
Fishing
Wolves
Sharks
Dolphins
Puppies and Pets
Environment
Non-Profits

We targeted the top trafficked sites and contacted them personally. Initially we contacted first by an email inquiry after researching their site; this proved effective for small Internet efforts. But to get into the doors of the bigger portal players, such as large non-profits and sites with more than 5 employees, we had to pick up the phone and call them.

For the larger portal Web Sites we targeted as fitting for our program, email was an ineffective way to make contact. It is amazing how few businesses respond to email inquiries of any kind. To email a larger business is like throwing away a lead into a black hole. The phone is still the most effective tool and our inquiries were handled quickly and directly.

Most companies favored us contacting them by phone because their Internet email boxes were stuffed with so much business info and bulk email, they barely had enough time to sift through it all. This lesson led to many critical relationships being formed.

The non-profits were particularly noticeable; how many non-profits do you know of that are dedicated to protecting the environment? Many had affiliate type programs already, and in their own terms "cause related marketing" is an important part of fund raising. We contacted non-profits to offer them an ongoing source of donations that would go beyond the one shot donations they were use to.

Many of the non-profits were open to the idea; it was a good way to test their efforts and donate to a worthy cause, which is part of Habitat's mission anyway. Talk about a great way to mix philanthropic efforts with affiliate networks; non-profits are an untapped and needy source of leads and sales.

One of the most amazing discoveries we had was the tremendous market for pets online. Almost anything related to dogs and cats has a huge following; one site had over half a million visitors a month, while another had a million actual visits per year. These are so micro-targeted that you would need to have specific breeds of animals to really offer products here.

Exotic animals and wildlife appeared to be better fits for Habitat, although some general information sites about pets definitely fit the bill. In fact, many of the owners contacted us to extend their thanks. They had tons of traffic, but no ability to sell advertising on a month to month basis.

The Internet is full of dead advertising space; your affiliate network can really take advantage of this.

Promotion

We have created a series of banner ads for people to post at their Web Sites and given them suggestions of how to optimize their profits by strategic placement of banner ads, personal recommendations, and direct emails to their opt-in lists.

AdNet International (http://www.adnetintl.com) was also able to use its close relationship to the search engines to test out banner advertising at Infoseek. By testing a commission banner approach for keywords that were not being purchased by traditional advertisers, the ability to penetrate and test a market was created.

NOTE: One of the amazing things we found is that sharks was searched for ten times as much as dolphins. Wolves was another heavily searched for term.

We have also set up specific entry pages to the Habitat catalog via our application form; you can fill in the application and choose a specific interest for your Web Site (for example, you can choose a wolf-related entry page, a fishing-related entry page, or a general page to drive people to the home page of the catalog).

By doing a bit of footwork, we spent about a week identifying sites and another week signing them up. Now it is part of our ongoing marketing and development to insure that these sites get the materials they need. We will track the results as well during the Christmas season, a top one for apparel makers.

Important News On Affiliate Programs

CDNow Increases Their Affiliate Commissions Based on Sales Generated

CDNow recently announced that affiliates who sell more than $2,500 of product in a month will receive up to 20% commissions. If you sell less than that, they offer 10% commissions. This kind of scaleable affiliate program is crucial, because your best salespeople should reap the benefits of their efforts.

Online Marketing Insanity or Good Business:
What is Your Loss Leader? Reel.com gains 300,000 Customers By Losing Money

Reel.com is a site offering videos. To build instant market share, they offered the Titanic video for $9.95, losing money on a product that retails for $19.95. Is this online marketing insanity?

If you look at it like most Internet businesses, in terms of one product sales, it is insane. If you look at it like Reel.com, it is their loss leader to build market share. They have sold over 300,000 videos, and an estimated 60% of those buyers are women.

Women control 80% of buying power in most U.S. households. Online, most sales are dominated by men. Reel.com has found a product women are interested in and has a database with 300,000 plus buyers. They can turn this database into gold.

Don't think so? Hollywood Entertainment in Oregon does. They put $100 million into this company that lost money selling its first product. They know market share when they see it.

The morale of this story is simple; your first product sale is not the most important one. Your back end and ongoing sales are most important. And if you are an affiliate, consider the products you offer as "loss leaders", or small profit generators. Build your list and sell more expensive products by using affiliate programs to measure what people want to buy, and give them more of what they want.

The power is all in the list. Reel.com could go out of business tomorrow and be able to open the next day, because it has 300,000 buying customers. If you don't have a list, you don't have a business.

The Little Affiliate Who Beat Amazon.com At Its Own Game

I recently interviewed a pet-related Web Site owner, who had close to half a million unique visits to his Web Site a month. He has been an extremely successful Amazon.com affiliate, selling hundreds of books a month.

He realized that 15% wasn't that great a deal, so on a whim he contacted the leading publisher of the books he was selling. This distributor told him that Amazon.com had a deal, but if he wanted one himself, his volume justified it.

The Web Site owner will now be selling direct to his customers, eliminating Amazon.com. After all, a direct connection and full margins beats paying a middleman. Most sites would not generate the kind of volume to do this deal, but it shows that the Internet model is penetrating the distribution networks.

CNET's Shopper.com; A New Model for Affiliate Programs?

CNET has developed an interesting approach at http://www.shopper.com What they did is list 62 computer retailers. They keep a database of over 100,000 products. Buyers select a product and compare price, shipping, and availability. When interested, they click a "buyinfo" button.

Each retailer pays a per inquiry, or lead cost, per click. This pricing is different than flat clickthroughs, because the customer being sent there is assumed to be an interested buyer, so lead prices differ depending on product, profit margin, amount of sales to be likely be generated, etc. Since the buyer has gone through the process of selecting a product and price, the assumption is that they are more likely to buy.

CNET's program is an interesting model for affiliate networks. Merely posting a banner ad and measuring clickthroughs is valued at anywhere from 1-20 cents a clickthrough, because this is not targeted, and you don't know if people are interested. CNET can charge much more for qualified leads.

Qualified leads are what affiliate networks are all about. By building up a consumer buying behavior, they can charge more per lead.

Affiliates should take this same strategy when integrating products into their Web Sites; by giving information which promotes a buying behavior, your sales will likely increase. And for those providing affiliate networks, shouldn't this strategy be part of your program, encouraging your affiliates to do more than just post a banner ad at their Web Site?

Unreasonable Affiliate Expectations?

It is amazing how much complaining Amazon.com is getting from its affiliate network. Actually this is a good sign for Amazon.com; one way to measure your success is when people criticize you. If you do not get criticism, you are likely not reaching your optimal market share. This is a simple law of averages; when you get popular, a small percentage of people will not like you, and may even attack you.

Recently many people have attacked Amazon.com online. But are these affiliate expectations justified? Many affiliates generate a lead for another Web Site, and do nothing else. Good marketing results means following up and servicing the customer. If they affiliate took the time to do this, they would still reap many more sales for everything they offer. Yet too many just send a customer to another Web Site and forget about it, then complain that they don't get paid again and again.

If Amazon.com does all the work on a continual basis, then should its affiliates get paid for every purchase a customer makes, if they just send them there once? Perhaps a new model is developing; affiliates who do continual marketing with another Web Site get paid for each resulting purchase, while those who are simply lead generators get paid once.

One of the funniest things about Amazon.com's complaints are the basic economics. You sell a book at $20, you may $3. That's tip money. Is it Amazon's fault, or mine as the affiliate, for not understanding I'll have to sell a ton of books to make any money?

After all, making money is not what affiliate programs are all about. I sell 100 books a quarter for Amazon.com via one of my Web Sites. These purchases show me what my customers are interested in buying and I adapt my product line subject to their interests.

I see Amazon.com's program as paid market research; if you see if as a central revenue source, it's unlikely you will be very happy. Find higher profit margin items if you want to make money.

P.S. Amazon.com is improving; my sales have tripled in the last quarter because of their tracking. I'm only getting 5% of the sales, but at least I'm getting something. I knew this was happening when a guy bought a book about Prostate Cancer at my history site.

Going Beyond the Banner Ad: "Rich Media" Banner Ads, Sponsorships, and List Building

Banner ads clickthroughs have nose dived. Fewer than 1% of people click on the pretty pictures. So why do some many affiliate programs depend on these weak tools?

Recent developments have shown that Internet business is moving beyond the banner to more lucrative forms of advertising. The problem with banner ads is that they pop up everywhere and often generate an unqualified lead. The real goal is to put them in front of interestedcustomers and to generate more qualified leads. Here's three examples of how the Internet is moving beyond banners:

1. ActiveBanner (http://www.activebanner.com):

ActiveBanners are a new concept in banner advertising that add audio to the banner ad being clicked on. By incorporating RealAudio technology, AdNet International has released a banner ad program that makes a banner more like a radio or television advertisement.

The ActiveBanner concept is simple; you click on the banner ad and an audio message plays as the Web Page you are sent to opens. The narrator tells you what you are reading about, and invites you into the advertisement. Rich media like audio, video, and interactive pages that respond to customers have shown an increased response rate in direct emails and banner advertising.

The best thing about ActiveBanners is that they rely on audio, which right now is the only thing that works consistently. Banner ads are moving beyond display advertising into a richer environment that promises much more response to the ad being shown.

Other forms of ActiveBanners include Click to Hear, banner ads that directly dial up a customer service or sales department via the Internet, and commission banners, which like affiliate programs pay a percentage of sales to the highly targeted advertiser.

Click here for discounts and savings...
Habitat clothing, mugs, stationery and t-shirts

2. Sponsorships

Instead of simply posing your affiliate network as a banner ad that is placed on another Web Site with many other advertisers, why not promote sponsorships? If you have a particular target site you'd like to add to your network, invite them to put your banner ads in an exclusive area of their Web Site.

This strategy will focus customers on your specific offer and can reward affiliates for their efforts. The advertising is focused and not put on a page with tons of others affiliate programs.

If you are an affiliate, why not turn your specific affiliate networks into "sponsors" of different sections of your Web site by exclusively featuring their product offers? If this product doesn't pull, change the sponsor. You can improve sales by providing related content, or recommendations, for specific product lines instead of lumping them all together on one page. The mall concept of advertising is tricky at best and done well by just a few companies. Target specific marketing is much more effective for sales.

Sponsorship of a site can be equated to a single recommendation. To optimize your profits, you have to make sure that the affiliate presents your company well. Sponsorships can be paid for at larger Web Sites, or can simply be a way to assure that your marketing is the only thing a customer sees in an important section of a related Web Site.

3. List Building via Banner Ad Forms

If you are really trying to build your business, build your email mailing lists. One of the most effective ways to build your list is through banner ad forms, which are increasing response rates by 30% and more at some Web Sites.

Banner ad forms merge the power of a visual banner with the email list building of a form. Yahoo and many other prominent sites have been using banner ad forms to generate more leads. The email form is housed in a few graphics; for example, a top graphic might hold the headline or call to action; below that is the form to put in your name and email. Below that is another graphic, inviting them to "Click Here" or offering a special bonus for entering information.

A more common type of Banner Ad Forms is a simple pull down menu of choices. For example, a book might be advertised with a top graphic, a middle pull down menu of various chapters or problems this books solves, and a "Go" or "Click Here" graphic may complete the picture. The visitor is then simply sent to another Web Page, but feels like they are actually getting more than just a banner.

An interesting way to use banner forms is to incoporate the Aweber (http://www.aweber.com) technology; you can track leads via hidden fields in a form (ask your techie, it's quite easy). Each email inquiry becomes a tracked lead, a cheap, easy way to set up an affiliate network. You download the emails and affiliate codes to your database, then compare them to your orders. You can even build long term, residual affiliate programs because you have the order tracked from first contact.

Either way, banner ad forms are increasing responses. Smart affiliates will see this as a way to encourage email inquiries as well as forwarding people to the specific programs they are working with. What better way to track and generate leads?

The Truth About Internet Merchant Accounts and Real Time Credit Card Processing

All over the Internet, businesses are flocking to sign up for real time credit card processing. The idea is so appealing; give an immediate approval of a credit card online. Your customer gets the same sort of immediate feedback they would in the "real world", and you get the sale.

"It may sound great in theory, but real time credit card processing has many dangers that are not really necessary," says Joe Kamenar, a merchant account provider who sets up these systems for companies online. His site, http://webmall.net, is full of information about credit card processing, CyberCash, and the ins and outs of setting up your online business.

Kamenar sees the allure of a high tech ordering system, where you don't have to do anything, as the main appeal of real time credit card processing. He has set up many businesses online using these systems. Yet any business should look at its real needs and the reality of what is involved in simply processing an order. Often, the expense does not add convenience for you or your customer.

"It's simply a case of numbers. If you are shipping real goods like a book, why bother? You still have to take the order, send it to your warehouse, and in most cases, post-authorize the order off-line. In fact, many real time order processing systems are difficult to configure with your own system off-line, so you may actually have to key in the orders by hand.

"CyberCash is an exception to this rule. But you pay $40 month or so for CyberCash's real time order processing service. You pay $40 a month as an access fee, or they charge a 25 cent per transaction surcharge, with a $40 monthly minimum. Unless you are generating enough volume of orders, it doesn't make sense. The problem is, most people set up the system without thinking about whether it will really save them time and money. If it does, then it is definitely worth it."

Right now, getting an order from the Internet to your bank requires a middle person. If you do real time processing online, the middle person is an entity like CyberCash, who processes the order safely. In this case, you have to pay the middle person. If you do the order processing off-line, there is no added cost except your time.

The question you face is, do your customers really need to get their order approved online quickly, or do you just like the idea that you can do it? Most often, the need is not that important, since shipping is still involved and is hardly done as quickly if you ship real goods.

Credit card processors have a pre-authorization and post-authorization requirements; you submit the order, it gets approved, then you batch process your orders at the end of the day. Many real time order services just do the pre-authorization online, which forces you to really process the orders offline anyway. CyberCash does offer post-authorization, so your orders are automatically transferred to your bank. Yet you still have to keep a careful eye on what your customers are doing.

For instance, what if a customer fills in an order and has to wait? Sometimes these online orders can take over a minute to process. Your average surfer might get nervous and hit the stop button on the browser, then resend the order. They get billed twice by you, and you will likely not notice it until the order has already been processed. Or until your customer complains.

Cost is not the only problem involved in real time credit card processing. Services can be slow and setting them up can take weeks. Even then, the system is imperfect. For example, one merchant reports processing three declined orders in a day from his Web Site, doing it all off-line. He called the customers, who corrected the errors.

He would have been out $300 if the real time processing had been in effect, because they would have turned all his clients down. And he would never have known what happened. His customers would have left disappointed, because when a computer tells you it doesn't work, you tend to trust it. Besides, there is no one to talk to, so your customer may get alienated.

Transactions outside of your geographic area and customer error are also important problems that should be considered. Non U.S. transactions cannot be approved easily online. Most credit card order processing does not conceive of the global access the Internet provides. That zip code (if there is one) from the Ukraine may not translate and if it does, there is no guarantee that the order is good.

Customer error can also be a threat. Kamenar relates the story of one client who offers a $97 product and allows the customer to fill in the dollar amount to be ordered. If the customer types in $970 and sends it in, the order may be processed even though it exceeds the limit the credit card provider allows you to charge per order. Real time processing has no way of tracking this and you could run into problems simply because someone had a typo.

You should protect yourself if you do online, real time credit card processing by:

1. Giving order forms that have checkboxes to indicate approval of product or services. Make sure that the button that actually submits the order has wording like, "I accept" or "Please send my order in" to indicate approval. Believe it or not, some newcomers do not understand that they are actually ordering if they simply hit an order button that says "OK".

2. Making sure to check all your orders by hand no matter what you do. It is just common sense; errors can happen, and the person entering the order is a customer who does not understand anything except ordering.

3. See if you can get declined order information as well; it helps to follow up.

4. Making sure your order system works online. Online ordering systems are intolerant of errors; if people type in the wrong name or miss a single digit in a long credit card number, they may be declined.

5. Measuring the cost per order versus the effectiveness. If you are shipping real goods, you can often take orders online, process them, and get in touch with customers the next day if anything is wrong. Don't feel pressured into immediate service and approval when it is not necessarily needed.

6. Making sure you work with a reputable company that you can trust. One merchant set up an account and lost $2,000 because the company was so disorganized, they could never find his orders. They also charged some customers 2 or 3 times until the bugs were worked out of the system.

7. Being careful; if your merchant account has many "Internet" glitches, it may affect your credit rating. If you process orders over your limit, or have many problems because of Internet processing, you can ultimately end up with your account shut down. If that happens, it is very hard to open it again. Many credit card account providers are wary of the Internet, so don't add to the problems if you can avoid it.

8. If you have affiliates, real time order processing should not affect their payments either, since you still wait a certain time period - often once a month - to pay them.

Online order processing is a big benefit of the Internet, but often the human touch is needed to make sure that everything goes right. If your customer has troubles, it is unlikely they will return to you. Also remember that in most businesses, error and fraud are a minor part of the entire transaction process. You will always run into some problems; just make sure that online order processing is not a bigger problem than a benefit.

If you would like to learn more about online order processing, or setting up you own merchant account, visit Joe Kamenar at http://webmall.net]. He has a wealth of information on running your merchant account both online and off-line, including in-depth articles that will explain the challenges your merchant account may face.

Key 1. Save Time and you Save Money:
Time is the Most Precious Commodity

You have 30 seconds to make a sale at your Web Site. Make sure that your home page text and graphics do not add up to more than a total of 40K (just look on your computer at the file sizes). That will take about 15 seconds to open up, which means you have to hit them with your message immediately.

Think of your site as having three reasons for your customer to visit. Focus on those three reasons and answer them quickly with headlines that link to specific pages. There is an old rule of design called the "Rules of 7"; never give them more than 7 perceived choices to make, or you will confuse them.

Keep it simple, and minimize your links. You can embellish on your other Web Pages, but at your front door, your Home Page, orient and:

A. Focus your customer on exactly what you offer, and why it will benefit them. Everything else is just commentary.

B. Show why they should believe what you are offering. Back up what you say with testimonials, what other people say about you. Have a page where you introduce the owner, with a picture, or show the track record of the business. If you are new and have no testimonials, focus on success stories and show why you follow the same model.

C. Make your site believable. Credibility is 50% of the reason anyone will stay at your site. Prove you can do what you say, and show the results. Put it in percentages, dollars saved or earned, leads, and compare it to your industry. Make the examples so concrete that there are no questions left. If you are beginning, partner with others so you can benefit from their experience as well. After all, every business began some time; don't let this stand in your way.

D. Get them to contact you immediately. Put your free report on an autoresponder, and get them to fill in a small form on your home page immediately. Do not create a home page without such a simple form.

Those Who Predict the Future, Don't Necessarily See It... "Looking into the future in 1990 I would have missed the importance of the Internet. In 1980 I might have missed the emergence of the PC."    Gordon Moore, cofounder, Intel: Red Herring, April 1998

Key 2. Color

The Web brings color printing to anyone; this is a scary proposition. People put so many colors up, it distracts. Adapt the following rules and you'll be safe:

1. Use just a few colors on your Web Page. One trick I use is to focus on the color blue for my links, dark blue for a new link, and then a lighter blue after they have clicked on it.

Try to use just 3 colors on your page; after all, computer screens are based on an RGB (red, green, blue) model for a reason. These three colors are the most reliable ones for looking the same on most screens Too much color just turns people off.

2. No more than 20 percent of your Web Page should be in color. Use white backgrounds, black text, one color for links, and keep your colors simple. Avoid fancy patterns or gradients, because while it may look good on your computer, it can look awful on others. Use color for your left hand border. For areas with extensive text, use white; it works.

Black is a good alternative for a high tech, entertainment, or "cool" site. Minimize the text you use on such backgrounds. Make the text light gray and yellow so it is easy to read. Avoid red text on a black background, it is tough on the eyes.

3. Use simple color lines at the top or bottom of the page to separate sections. If you use text as a graphic, make it a different color to separate sections of your Web Page.

4. Use your color to accent what you are doing, for key points of action, links, and places you want people to go to immediately. Have one main color for your page, and use the other two sparingly.

5. Color affects people psychologically, for example:

Yellow promotes optimism, but too much makes people uneasy.
White is associated with truth.
Orange is associated with fun, while red promotes appetite.
Black is the most dramatic color for backgrounds.
Blue implies authority, financial responsibility, and security.
Green means health and tranquillity.
Blue is the most popular color.

Key 3. Consistency

The style of your Web site should be consistent from page to page. Select a background and colors, then stick with them.

Web pages comes in one, two, or three columns. Ninety percent of the time, a two column format works best. Make your Web Pages about 600 pixels wide, with 20% (120 pixels) for a left hand border. This is where you put your table of contents, or listings. Use the rest to put your text, headlines, banner ads, and key offers.

Most of all, don't change your formatting from page to page. Use the same colors and standard look so people don't think about where things are. It should be easy to get around your site.

If you use a two column format, stick with it. Each time a Web Page looks different, your visitor will be distracted. Get them to focus on your text by being direct, using the same sets of colors on each page, and formatting it the same way.

HINT: The best way to test this is to create your Web Site and invite people to go through it in person. Watch what they do and most of all, don't say anything to them. Sit them down to the Web Site and observe, do not talk. You will find out what works and what doesn't quickly, if you don't show them what to do. At your Web site, no one is there to guide them. Make sure you watch what they do.

Business Success Has Three Keys:    1. Operations, the ability to generate products and services    2. Sales, the ability to sell what you offer    3. Finance, the ability to keep paying for your business.

Key 4. Ad Copy and Testing

Like every other medium (print, radio, and television), it all comes down to your ad copy. Words are what make people respond and react.

Spend your time with your ad copy and test what works. See which headlines pull at your Web Site, and via email. Test and change these most of all, especially on your home page. Don't think of updating, think of testing your ad copy.

Key 5. Design

A Web Site should be easy to navigate, which simply means breaking down your offer into its own logical structure. Try to make everything accessible with one or two clicks of a mouse.

Write an outline of your ideas, then for each of your major subjects, write the name on a piece of paper. Put these on the floor in front of you, and circle them around your home page. If you find yourself branching out so much that there is little floor space, try to reorganize it.

The further you get from the home page, the more you need to edit. If you can make everything available in one or two clicks, you will make it easy for your visitor to quickly get through your site.

Make your files names descriptive as well, so people know what they are looking at. If you focus on writing a site simply, you will find that most sites break down into:

1. The Home Page, i.e. Table of Contents, to center everything around
2. Content that shows what you are doing, and that you know what you are doing;
3. Credibility building pages, like resumes, testimonials, and company information
4. Places to contact the business for emails, faxes, inquires, and phone calls
5. Points of Sales, where they decide to buy or not
6. Products/Service pages, to outline what you offer, the benefits, and the costs.

1. Selling To Everyone Means You Sell to No One

If you do not target your offer, it will confuse your customers. People are not patient. In a recent survey, 73% of people claimed to be "insanely busy". If you do not develop a target customer profile and appeal directly to them, you will lose customers. And they will never come back to your site again.

Visit www.inetdesign.com for my latest version of this approach. I found that people visited for 3 reasons. I define those reasons and get them to contact me immediately via telephone. I met a real estate agent who took the same, lead generating approach with his Web Site. He made 18 sales in one year, not because of the Web Site, but because of the phone calls that came from his Web Site. Like most real estate professionals, he knows that a phone call is more powerful than a "virtual" contact.

2. Web Flea Market: Buy a Web Site or Get a Grocery Coupon

These Web Sites are quickly dying out. You can find them by going to the search engines. People are selling Web Sites, classified advertising, pre-paid legal services, long distance phone cards, and reminder services...All on the same Web Page!

Think about this the next time you go to your grocery store. Do they offer to sell you a Web Site with your pickles? Flea markets diminish the value of what you are selling. Most people who own these sites tell me they depend on selling a high volume of low price items. How do I know this is a doomed approach? Visit their sites and see if there is any life there.

3. Huge graphics that make your site take 30 seconds to open, which is all the time you have to sell your customer on staying.

The worst thing about computers is that they enable us to do things we just should not be doing. Graphic design is a skill; most people get some Paint program and have absolutely no sense of size, or what the graphic makes them look like. If you want to SCREAM AT YOUR AUDIENCE AND BE OBNOXIOUS, then use big graphics.

The average screen is about 600 wide X 440 high (pixels). Keep your graphics down to less than 25% of this screen at most, 150X110 as a general guideline. You can make them wider, just beware of making them too tall. At some sites, all you see on the first screen is a huge company logo.

This is one job you should definitely outsource, especially if your Web developer is a techie...techies often know little about graphic design.

4. Great Gobs of Content.
Remember the early days of the Web, when everyone screamed how content was king? Visitors do not equate into value, unless you convert them. Focus on your marketing copy and give them enough, but not too much.

5. This site has XXXX number of visitors (How many bought?)
Does it really matter to anyone how many people visit your store? The sure sign that a store is visited often is the success and profits of the owner. All the rest is empty bragging.

6. Explaining what technology you use, frames, etc.
To this day it amazes me how people explain the technical design of their Web Page. If you use any reference to technology, you are distracting your customer. Keep it simple.

7. Download the following plug-ins to get this site working.
No one will spend ten minutes downloading the plug-in to see your cutesy message. Avoid plug-ins, with the possible exception of RealAudio.

8. You need a screen 800X600 wide to view this.
You need to get a clue. Don't sell to customers based on their screen size, sell to them based on the benefits you deliver.

9. No place to send an email, or gain a free report.
After spending all this time to create a site, most people forget to ask for inquiries. They just think people will work hard to contact them. Assume that a person will visit your site once, and never return....unless you remind them to via email.

10. Look at all the awards we've won.
Best of the Web awards are nice for entertainment and education, but for business they are just another boring promo of someone else's site. No one knows who gives the awards, and it isn't like an Oscar. Awards have no credibility.

Summing Up

The reason most Web Sites fail is that they fall in love with an idea, and never think of what their customers want. Be sure you focus on:

1. Researching your customer base and finding those select places they go for information and entertainment. Find a way to drive them to your site.

2. Study your competition continuously. Always be on the look out for people to partner with. As one Silicon Valley exec puts it, partner with as many people as possible, because you do not know which ones will succeed.

3. Commit to increasing sales AND decreasing costs. A sales only approach means you miss half the value of the Internet. Create a Web marketing plan and apply it, step by step. Evaluate your cash flow monthly, find out which promotions work, then sink your money into the one or two best places to generate leads and sales for your specific niche.

4. Keep on training and improving your skills. After all, people can always buy a product or service some place else. The reason they work with you is the value you add, and the service you back it with.

Good customer service and attention to your customers is the best, long term, marketing of all. Having the water, sun, and soil is important, but remember that through bad weather and good, your customers are what keep your business alive.

Make sure you do your best to benefit them.

How to Harvest Online Mailing Lists From Your Web Site

1. Establish as Many Points of Contact Possible on Your Home Page

Never expect a visitor to return to your Web Site. Bank on the fact that they will never return. Use your home page as a place to generate emails, phone calls, faxes, and inquiries. Use your autoresponders wisely; get them set up to answer a basic guestbook (tell us why you visited), surveys, sales letters, special announcements, mailing lists, and contests. The more ways you give them to contact you, the better your chances are for understanding who is visiting. Gathering email addresses is really the name of the game.

A Web Site has a few hot spots which will literally triple your response rates if you use it right. The screen a visitor looks at is wider than it is tall. If you want a hint, take a look at the computer interfaces on the two most popular machines, Windows and Macintosh. Most of the places to click on are located on the top and bottom of the screen; the left hand margin in particular is a favorite place to put your intial offers on a Web Site.

Both place all the action points, the points for people to click, in the frame of the screen. The hottest spot to put your words is the upper left hand corner. People who read English read left to right. Their eye naturally drops on the upper left hand corner.

Place your first point of contact in the upper left hand corner. Develop your important sections down the left hand side. Use the bottom of your screen as well, especially the lower right hand corner. This is where their eyes scan.

Example: By placing banner ads at the lower, right hand corner of the screen, a survey found that responses to these banners increased by 200+% over banners in the middle of the screen. Bank on years of experience and put your headlines on top, on the left hand side, and towards the bottom of your screen. Use the middle of the screen for graphics and for listings of areas to visit in your Web Site, as well as more headlines.

3. 10% of Visitors Will Explore your Site: Give Them Enough, but not too much

You will find that people visit about 20% of your entire site, and ignore the rest. This is normal. At a successful business site, people will spend about 7 minutes. For chats, games, entertainment, and high priced news media, these rules may differ. But few people can afford to play that high risk, low return game.

If you focus on updating your site and making it fancy, you will lose marketing time. You will also be out of business quickly. Give them enough information to make the sale, and follow up via traditional means as well. Telemarketing is an excellent tool to use with a Web Site. After all, the Web all revolves around different ways to use the phone.

You can use more than your home page to get people exploring. If you want to promote a specific product, you can direct them to that page. Then give them a place to contact you and make it clear how they can explore further.

The Four-Page Web Site Formula

Many people get overwhelmed thinking about what it takes to create a Web Site. The goal is to create the home page only, a one page document in a word processor. To achieve this, you need to define the four other Web pages using the Formula:

Define these four steps to a Web site for your own business. Use current marketing materials to enhance what you are doing in print and get the Web site going. You can always add more later. What's most important is to make the shopping process easy by having your order form always available, as well as your sales letter.

A successful Web Site is built around the sales letter and order form. You want to direct your customer to your sales letter to get them to buy; content is used to develop interest, believability, credibility, and understanding why they should buy from you. That's why they say that "Content is Advertising"; content is the advertisement that leads them to the sale.

Remember to always link to your order form from your pages; use your links to elicit interest, encourage exploration, and develop curiousity and interest in your product or service. Then give them a link to your sales letter and/or order form to close the deal.

 
1. Label Each Page with its own title.

2. Simple design makes it easy to reach any page; you are never more than 2 clicks away. The customer has two choices; return to the home page or go to a new page in your sales process.

3. This is the easiest way to get your message across, and people won't get lost in your site.

4. At the top of each page, just put a "Return to Home Page" link and a link to your Order Page. Every page lets them go to the home page, the Table of Contents, or to finish up by ordering online.

As you prepare your Home Page, remember to create it as a "Satellite Structure", in which all your information revolves around the central home page.

• Headlines: Use Headlines to spark interest and get people to directly respond to your message by clicking on them as Links.

• Text: Provide information that fulfills your reader's interest and makes them want to come back again and again.

• Graphics: Keep them simple; decorate don't dominate. Too many graphics make a page slow to open and will limit visitors.

• Links: Links let you move around the Web Site and take you three places: