Online Affiliated Marketing

Online Affiliate Marketing is a revenue sharing venture between a website owner and an online merchant. The website owner will place advertisements on his websites to either help sell the merchant’s products or to send potential customers to the merchant’s website, all in exchange for a share of the profits.

Affiliate Marketing Program
An affiliate marketing program is sometimes called an affiliate program, but also may be referred to as a pay-for-performance program or an associate program. An affiliate program is a marketing tool for the e-business that operates it, called merchant or advertiser and a source of revenue for the e-business that participates in it, called an affiliate or associate or publisher.

There are three ways to earn money through affiliate marketing:
1) Pay per Click or Cost-per-click affiliate programs: Every time a potential customer leaves the affiliate website by “clicking” on the link leading to the merchant’s website, a certain amount of money is deposited in the affiliate’s account. This amount can be pennies or dollars depending on the product and amount of the commission.
2) Pay per Lead or Cost-per-lead affiliate programs: The merchant pays the affiliate a set fee for each visitor who clicks through and takes and action at the merchant’s site, such as completing an online survey, registering at the site, or opting-in to receive e-mail.
3) Pay per Sale or Cost-per-sale affiliate programs: Every time a sale is made as a result of advertising on the affiliate’s website, a percentage, or commission, is deposited into the affiliate’s account.

The Amazon Story
The world’s biggest bookstore has one of the most successful examples of an affiliate program (called their associate program). Amazon now has well over 1 million affiliates! That is over 1 million websites actively promoting their products every single second of every single day. Amazon generates over 40% of its revenue through its affiliates program. That is over $3 billion in revenue every single year! As another (somewhat humble by comparison) example, Zeald generates over 50% of its revenue using its own unique affiliates program. Admittedly, not quite billions of dollars but that is definitely millions of dollars of revenue every single year.

Thousands of diverse e-businesses operate affiliate programs: E.g. barnes&nobale, dell,1-800-flowers, rackspace managed hosting etc.

Affiliate Programs as a Marketing Tool
The two major Advantages to merchant
1. Tie marketing effort directly to a lead or sales.
2. The merchant pays only for results.
The two major Advantages to affiliate
1. Additional source of revenue for affiliate who also sells products/services
2. Primary source of revenue for affiliate who offers entertainment or information
Two Approaches to Operating a Successful Affiliate Marketing
1. Acquire a huge and affiliate membership. e.g. The Amazon associates programs have over 1 million members as diverse as:
– RVPart – Sells parts for recreational vehicles and motor homes.
– Dilbert – Site for view cartoons, play games, send electronic greeting cards etc
– Books for Managers – Site for business reviews and lists of the currant top-selling business-related books provided by Business week, The New York Times, the Wall Street Journal, USA Today, and other publications.
– HaperCollins – Its site to promote its authors and their books. However, like many book publishers. HaperCollins sells its books through bookstores and not directly to the public.
2. Acquire a smaller number of highly effective affiliates that have a high volume of website traffic and offer web page content, products and services that are directly related to the merchant’s products and services.

Affiliate Programs as a Revenue Source
Participating in an affiliate program and then getting the most out of your participation involves:
– Selecting the appropriate merchant and affiliate program for your e-business
– Understand the terms of the affiliate agreement
– Add custom links to merchant’s site from affiliate Web pages
– Build traffic at affiliate site to increase click-troughs to merchant site.

Top 10 Tips for Choosing the Affiliate Program That Is Right for You
1. You have to identify a product or service for which there is a need. The product should be such that you would love and enjoy promoting it. You could start by searching for “Affiliate Programs” in the Search Engines.
2. The product or service should be relevant to your website.
3. It is always wise to join an affiliate program that is long standing, safe and secure and has a good reputation in the Internet world. This can be easily verified from the Better Business Bureau or other similar organizations. Visits to Forums and Discussion Groups will also provide you with a lot of useful information.
4. Most affiliate program providers provide a commission of 5% to 50%. The commission you earn for the sale of a product is your main income. So while choosing an affiliate program you should study the commission paid out and decide on a program that pays at least 35% for you to run your business successfully.
5. There should be a proper tracking system in place to record all the clicks and sales made through the text links and banners placed on your website, e-mails and other advertisements.
6. One important factor that is often overlooked is the “hits per sale ratio”. This indicates the number of hits that have to be made to a Text Link or Banner to generate a sale. This will give you an idea as to how much traffic is needed before a sale is made.
7. How often are commissions paid? This is another important matter that should be considered. Most reputed organizations pay their affiliates monthly or when they accumulate a minimum commission of $50 to $ 100 or as indicated by you. You should avoid any program that requires too many sales to reach the minimum amount.
8. Affiliate Programs are generally single tier or two tiers. A single tier program pays you for whatever business you have generated. On the other hand a two tier program pays you for the business you have generated and also a commission for the sales generated by a sub- affiliate, you have sponsored. A two tier program is always advantageous.
9. Long standing reputed organizations provide a whole range of tools and resources such as Banners, Text Links, Brochures, Websites and training for their affiliates. When choosing look out for such organizations because they certainly make life much easier and helps you grow your home based business.
10. Finally, you must read and understand the agreement before you join as an affiliate even if it happens to be the best organization in the world.

Understanding the Affiliate Agreement
The affiliate agreement created by the merchant and agreed by the affiliate, defines all aspects of the affiliate program and typically includes:
– Types of Web sites merchant will accept into the affiliate program
– Types of links allowed and guidelines regarding their use.
– Schedule and payments terms of fees and commissions
– Terms of usage of merchant logo, name and web content
– Technical specification that your web site must meet, if any
– Restrictions on types of content that may appear on affiliate sites
– Requirements for compliance with all government laws, ordinances, rules, and regulations.

Affiliate Tracking Systems
– Allow merchant to control how it credits click-throughs
– Monitor window of time in which affiliate can get credit for a click-through
– Record and store affiliate information
– Provide commission/fee reports

Affiliate management networks
An affiliate management network is a third-party entity that recruits affiliates, manages the registration process, tracks and properly credits all of the fee and commissions and arranges for payment. In return for these services, the affiliate management network collects from the merchant a percentage of each referral transaction’s fee or commission-perhaps as much 30 percent.

Well-established affiliate management networks: Example: Commission Junction, LinkShare [2]

Affiliate tracking technologies
To achieve this we develop a strategic online relationship with advertisers to improve the creation, management, and analysis of online marketing and sales activities. These activities are supported by a scalable and reliable tracking technology. Keeping track of the click-throughs and properly crediting the affiliates is a complex programming task. Companies such as BeFree and ClickTrade sell software that automatically monitors and credits all followed links resulting in a sale. Note that ClickTrade was acquired by Microsoft and is now co-branded as part of Microsoft bCentral.

Some tracking technologies are following:
– Custom links containing affiliate information or affiliate and merchant information
– Tracking cookies
– Third-party tracking software
– Application service provider tracking service
– Sub Domain tracking
– Database record matching.

Affiliate Marketing Risks and Challenges
Affiliate marketing is not without certain risks and challenges primarily form unethical affiliates and the negative perceptions online consumers have about tracking technologies.

Unethical Affiliates
– Cookie stuffing – Multiple cookies placed on visitor’s hard drive during a single visitor affiliate site.
– Spyware – General term used to describe software that has been installed on a personal computer without the owner’s permission, its unknowingly download and install spyware when you download games, screensavers, freeware utilities and so forth.
– Parasiteware – Redirects affiliate links and Replaces content of existing tracking cookies
– Spammers – Merchant is responsible if affiliates use spam to promote sites
– Negative perception of tracking cookies – Many consumers install and use blocking software which includes Block tracking cookies and Delete tracking cookies.

Why Affiliate Marketing Is Profitable for E-Business
If you have been considering an affiliate marketing venture, there are some very good reasons why you should go with this method of generating recurring revenue. Here are some of the ways that affiliate marketing can be a lucrative means of creating income that will be stable and allow you to grow exposure over time.
– One of the first advantages of affiliate marketing for the new entrepreneur is that the startup cost is very low. Most companies that offer affiliate marketing programs do not require any type of monetary investment on the part of the affiliate.
– The second expenses are limited to what you have to pay to connect with the Internet, the software you may need to load on your computer, and a web site where the ads associated with the affiliate marketing program can be placed. With web site hosting such an inexpensive service these days, setting up your own web site for the affiliate ads will be a breeze.
– Another reason that affiliate marketing is such a moneymaker is the fact that there are so many different types of ways to set up the program. You can go with the pay per click option, which works out great when it comes to promoting special offers. Ads that lead to product review sites often are a way to allow product users to go through your portal and leave comments on the items they purchase.

First Thing’s First-Avoid These Silly Affiliate Marketing Mistakes!
While affiliate marketing is a great way to earn a living, the fact is that many people become discouraged and drop out of programs. In many instances, the failure to be successful with affiliate marketing has to do with making a few simple mistakes. Here are some examples of those mistakes and why they should be avoided.
– A low-quality website with no original content and tossing in some affiliate links. While it is certainly true that you need to have a web site up and running in order to participate in an affiliate program, there is also the need to apply some effort to getting the word out about your site. Otherwise, the chances of people visiting your web site and clicking on one of the links are pretty slim.
– Another mistake many affiliate partners make is not choosing products that have some relevance to the content of your web site.
– Keeping your site content and the ads more or less relevant to one another will make it easier to generate revenue, and not fail as an affiliate marketer. Now, this may seem intuitive – but many make this mistake in subtle ways (i.e. they mismatch their customers with products).
– One final mistake that many affiliate marketers make is not sprucing up their web sites from time to time. Keeping the content fresh is one way of building and keeping a loyal reading audience because keeping the same old look and the same old text with nothing new to entice people back is a sure way to limit your chances at being a successful affiliate marketer. The fact is that you do have to proactively promote your site, keep the content fresh, and make sure the ads have some connection to the subject matter of your site.

What You Need Before Getting Started and Affiliated Marketing
While there is not a lot of expense in starting up as an affiliate marketer, there are a few things that you need to do if you really want to make money marketing other people’s products.
Here are some basic tips to help you line up all your things to do before you ever sign up for that first affiliate program.
– One of the basic needs for any successful affiliate program is to have a web site of your own. While it is possible to purchase ad space on sites and to advertise through Google Adwords, this is short term strategy setting up a basic web site that has a particular focus will make all the difference in the world to the success of your program. Keep in mind that your web site does not have to be complicated with a lot of flash media, animation or other fancy bells and whistles.
– In fact, if you plan on focusing your attention on affiliate marketing strategies that target the home consumer, you are better off with a basic site that will load quickly on a dial up connection. After all, dial-up is still extremely popular in a number of locations.
– Online payments are a great way to easily receive your affiliate payments and keep track of your earnings. From this angel, you may want to look into opening an account with one of the more popular online services that send and receive funds. i.g PayPal
– Another important aspect is determining just what your contact information will be, regarding communication with your affiliate program. This would include an email Address and physical mailing address. The email address should be one you have set aside specifically for your marketing business.

How to Pick the Best Product with the Best Payout and Great Demand
– One of the first things to think in terms of when it comes to affiliate marketing is determining where your talents and expertise happen to reside. One of the keys to picking the best products for your particular situation have to do with what you know and how much you know about it. As an example, a person that has worked in telecommunications for a number of years will probably know a great deal about telephony, related services, and technology that are used within that industry.
– Another aspect about setting up with the right products to promote has to do with where you see a niche to fill in. Finding a population or business sector that appears to be largely ignored in the marketing process can provide the inspiration you need to create a successful affiliate marketing program.
– Do not allow yourself to get discouraged simply because everything is not crystal clear as you begin this part of the process. Practicing some patience and giving yourself time to find the right products to promote as part of the program will only serve to make you more dedicated to the success of the program
In the end, you will find the products that will lead to a very successful affiliate marketing scheme and provide you with not only a handsome revenue stream, but also a lot of personal satisfaction.

Recommended Top Affiliate Networks on the Internet
When you decide to enter the world of affiliate marketing, there are a number of markets that are worthy of consideration. Here are three programs that have captured the attention of a lot of people, simply because of their stability and reliability.

1. Perhaps the best known of the three programs is Click Bank: clickbank. There a number of reasons why people find ClickBank such an attractive option when it comes to affiliate programs. One aspect is that the revenue generated by any purchase made through the ad portal is credited to your account within two minutes of the completion of the transaction. Because Click Bank provides such a comprehensive tracking program.
2. pavdotcom is also an excellent choice as an affiliate network. Just as with ClickBank, PayDotCom provides an easy to use affiliate interface that allows you to view your numbers in real time. You can easily track such data as the number of clicks on the ads and the amount of commissions you have made by directing visitors over to the marketplace through the portal on your web site. One of the advantages of PayDotCom is that this program will interface with your PayPal account, which means that vendors can send your monthly commission directly to your PayPal account. It is important to note that not all vendors will use PayPal as a payment method, so you may still receive payments by check as well.
3. shareasale is a third option that is rapidly gaining recognition among affiliate marketers. As a program that is designed to match up to the content of your existing web site, Share sale is free to join as an affiliate.

Rising to the Super Affiliate Level – What Constitutes a Super Affiliate?
A super affiliate is a marketing affiliate that has created a network that provides a high volume of traffic to affiliate products and a high percentage of completed sales from that traffic. The super affiliate is not one who reaches this level once, or even once in a great while.
– Creativity is an hallmark of a super affiliate. The ability to present the same old information is new ways will keep people interested. Super affiliates know how to look at products from a variety of different angles, determine a series of ways to present the product, and then go out and find an audience to match up with each one of those ways. For the super affiliate, there is always one more way to draw attention to a product, and find a larger audience than ever before.
– Another characteristic of a super affiliate is the desire and ability to master technology. This does not necessarily involve becoming an expert in information technology. But it does involve learning enough about existing technology to make good use of avenues already open on the Internet to promote products.
– Making the most of your status as a super affiliate means enjoying the opportunities that come to you through word of mouth; additionally, it means taking matters into your own hands and promoting your status in such a way that you increase your visibility.

The Super Affiliate Marketing Tactics Exposed!
So what is it that allows a super affiliate to make hundreds or even thousands of sales when you struggle to make 5 sales of the same product? Why is that super affiliates rake in the cash while you struggle to get by? Think about this carefully: you are both selling the exact same product. The only possible difference is the tactics you use to market it. Below, we have included a couple tactics that we should use to sell more like super affiliates. Try to incorporate them into your strategy.

Tactic #1: Play the Long Game
Whenever some new launch is coming up, they will throw together a promotional website; and try to direct traffic to it using pay per click search engine advertisements or solo ads. But there is a major flaw with this approach: almost without exception, people will purchase a “big launch” product from an Internet marketer they already know this is why you have to play the long game, rather than focusing on each individual launch, prepare an approach that will work consistently for years to make more sales.
Tactic #2: Steal from Super Affiliates Whenever Possible
Many super affiliates are also big name Internet marketers. They have public personas that we can follow quite easily. We can find their user ld’s, blogs, mailing lists and their web site’s. Through this approach we can learn from each of them.
Tactic #3: Ignore Talk; Look for Revealed Preference
Talk is just that: talk. Many Internet marketers will talk about all sorts of different methods you can use to make money. They will tell you to advertise using Google AdWords or to build a list or to create viral reports. While some of this information may be useful and legitimate, we should ignore what they say and watch what they do. This is called “revealed preference.
Tactic #4: Make Friends with the Seller
Believe it or not, the seller wants you to be successful, too. So contact him ahead of time, make friends with him; and see if he has any particular advice for you on selling the product. Keep in mind that he talks to a lot of affiliates on a regular basis (especially around big launches) and has the best understanding of the tactics they actually use.

Become a Supreme Affiliate Marketing: Additional Supreme Affiliate Marketing Tips
If you want to make a six figure income – and possibly a seven figure income – then you have to do something that is truly different than what you are doing now. The big question is “how can I do this”? Here’s following suggestion:

Tip #1: Start Acting Like a Business Owner
If you want to be a successful affiliate product marketer, you have to find people who can augment your weakness (and, trust me, no matter how smart you are, you have plenty of weaknesses). Additionally, affiliate marketers do not work in isolation. Most of them are friends with the marketers they sell products for; and this gives them far more leverage and information than you have access to. So start thinking of yourself as a business owner, rather than a completely self-sufficient Internet marketer.
Tip #2: Concentrate on Regular Sales
Regular sales are easier to quantify and predict; and, for this reason, it is far easier to continually ramp up small, regular sales until you are making hundreds of thousands or millions of dollars each year. So don’t worry if you’re the top affiliate for some major new product launch. Instead, focus on regular sales and regular increases in sales.
Tip #3: Do What They Do – Not What They Say
Observe the channels of marketer through which he promotes his product. Watch carefully to determine what methods he’s using to make sales, so you can replicate his successes, rather than chasing after dreams he’s written about.

Conclusion

We may conclude that choosing an Affiliate Program that is right for you might be time consuming but a worth while process. Going through the above whole process will also be a learning curve for new entrepreneurs who are serious about starting a successful home based business. So there is an opportunity for business students and young entrepreneur to develop a simple website with limited budget that can be arranged easily through their own personal savings. This website can be developed with only $100 to $200 (Approximately). You can increase your business growth through adopting the approach where you can affiliate your business with different websites having relevancy with your business and internet heavy traffic as well.

Finally there’s no single path to affiliate marketing riches – and that’s a good thing. Instead, there are many pathways through which you can make your millions. So scout carefully, look for functional methods you can use, and implement them in your own efforts. You may be surprised with the results. But whatever you do – don’t continue to use strategies that haven’t worked in the past. Always think like super affiliates because they use a range of tactics and adopt different ways in order to consistently outperform other affiliates. But one thing you should always play the long game and build lists, create forums, and secure a captive audience in advance of product releases.

Aknowledgement

The Author indebted to Ms.Umera Imtinan, Lecturer Comsats Unversity,Lahore for her suggestion to write this article.

References

1. Napier Albert. “Book: Creating a Winning E-Business”, 2nd edition, p256-257
2. Article, “Affiliate marketing”,zeald.com/Services”.
3. Article, “Affiliate Marketing Strategy for E-Business”, “resources.alibaba.com”.
4. Article, “Affiliate tracking”, “kleindesigns.com”.
5. Online Book, “Super Affiliate Marketing Secrets: Gain the Edge You Need to Become a Super Affiliate Marketer” “free-ebooks”.
6. Internet Article, “Top 10 Tips for Choosing the Affiliate Program That Is Right for You”,” articlesbase.com”

Best Affiliate Program – Black Belt Marketing Success Secrets

If you search the internet you’ll find millions of free and also paid online affiliate programs.

Most people have signed up in these online affiliate programs and tried to make money from them but failed miserably.

They don’t know why.

Are you one of them?

If yes, read on to find out how to locate the right top affiliate program and how to promote it to start making money.

All affiliate programs are not created equal.

Some will make you money if properly promoted and others will not, no matter what you do.

Why?

Below are some reasons why.

(1) The Right Affiliate Programs To Promote

Most people are under the mistaken notion that just because an affiliate program is free that they can promote it and get rich.

Nothing can be farther away from the truth.

The bitter reality is that if an affiliate program is free, then most likely thousands of people will want to sign up to promote it.

Since thousands of people are promoting it, competition will be stiff and so the likelihood of getting rich from it will be slim because there will be more people promoting it than people who wish to buy it.

When supply is greater than demand, profitability will nose dive.

This is economics 101.

So stay away from free online affiliate programs which hundreds of thousands of people are already promoting!

The best online affiliate program which will likely make you rich will be the one that very few people are promoting and which is in great demand. The demand MUST be greater than supply.

Most likely, such an affiliate program will not be offered free!

You will have to pay for it to promote it.

When people are required to pay to promote an affiliate program, then most people will not sign up for it, so only few people will promote it.

This will then guarantee that the demand for it will be greater than the number of people who promote it and this means that the profitability for it will skyrocket.

This is the kind of online affiliate program which can make you rich!

There are few people online who are getting rich from online affiliate marketing and this is one of their sacred hidden secrets of success!

(2) Build Landing Pages For Your Online Affiliate Programs

You must create a landing page at your website for any affiliate program which you desire to promote.

At the landing page, you will then include a short introduction of the affiliate program, preferably, your own personal experience of using the program or a short review.

Then at the bottom, include the link to the affiliate program website.

This affiliate program landing page must be optimized also.

You may also add Google AdSense ads and other pay per click ads as well as Clickbank products on this page to monetize it.

This way, if your customer doesn’t click and go to the affiliate program, they may click on any of the pay per click ads such as AdSense or Clickbankbuddy or pay per click ad and you’ll make money.

If you don’t know how to monetize your website with Google Adsense, Clickbankbuddy ads and pay per click products and ads, please contact us for free help.

By having a landing page for your affiliate programs at your website, you have the advantage of not losing all the traffic you’ve built up if the affiliate program is stopped.

If the affiliate program which you’re promoting is discontinued, you may replace it with another similar affiliate program and continue generating income from it.

(3) Secret To Promote Your Online Affiliate Program

Online marketing has become more difficult than rocket science.

During the past couple of years, most affiliate marketing strategies which used to work 6 yrs ago don’t work anymore.

E-mail marketing has been dead for many years now.

And the ISPs have added salt to the injury by creating so many filters which filter away your e-mail offers and so they don’t reach their destinations.

Besides, most people don’t read their e-mails anymore.

Most people have been bombarded by thousands of spams and offers and they just don’t have time to read these offers anymore.

So e-mail marketing is completely dead.

Free For All, FFA promotion is dead too.

Banner advertising is dead too, unless you have thousands of dollars to promote it at highly trafficked sites.

Search engine marketing, SEM doesn’t work any more because the search engines are constantly changing their optimization rules.

It takes both Google and Yahoo several weeks to even index your page and include it in their system.

You may optimize your website properly and attain a top ten position in a few keywords.

But they never last long.

In a few months when they update their search ranking, all your positions may likely disappear and your traffic will be gone too.

You may try to promote through Google Adword campaign.

But the truth is that not all programs can succeed in getting traffic from Google Adword or any other pay per click advertising.

If you try to promote an online affiliate program, which hundreds of thousands of others are already promoting using Google Adword and pay per click advertising, you’ll end up squandering thousands of dollars! This has happened to many people already.

So stop squandering your money in pay per click advertising.
(There is a better way. To learn more contact us for free help.)

You may also try to use article writing to promote your affiliate programs.

But very few people know the “SECRET” on how to write a highly optimized interesting article which will attain top ranking in the search engines and therefore produce traffic and sales for your online affiliate program.

To succeed in doing this, you must know how to optimize the article, it must be interesting and you must post it where many people will read it.

If you write and post an article but it can’t be found in the search engines when people search for the affiliate program which you’re promoting and if people are not reading it at the article directories where you posted it, you’ll not generate any traffic or sales!

This is what many people are doing and among the TOP reasons why they are not making any money in their online affiliate marketing.

(4) Traffic Is The Lifeblood Of Success In Online Affiliate Marketing Program

There are so many naïve people who have spent tons of dollars buying internet marketing e-books, programs and videos from so called internet marketing gurus and as if that is not enough, they have been suckered into squandering thousands of dollars attending seminars organized by these so called gurus only to find out that what they are peddling are outdated and archaic internet marketing strategies which don’t work any more.

These suckers never to think about the truth.

The truth is that no right thinking businessman will sell a secret on how to generate thousands of traffic daily to you for $50, when he knows he can keep his secret, use them to promote hundreds of affiliate programs and make millions.

The real truth is that these so called gurus have no secret that really work. But what they have is a large e-mail list which they have built through e-zine and newsletter publishing for many years.

So they make their money by marketing their e-books and affiliate programs to these mailing lists.

If you have 50,000-100,000 e-mail lists which you have generated over 6 yrs, you’ll always manage to make a few thousands of dollars marketing any program to them especially if it is about internet marketing!

In conclusion, there are still a few online affiliate programs which are easy to market and generate obscene income and there are still many jealously guarded traffic generating secrets which work and which can explode your website traffic and sales and so make you rich instantly.

But they are not free. They will cost you some money.

If you’re ready to pay to sign up in any of these few online affiliate programs, and to get the powerful traffic generating secrets of millionaire webmasters, then you’re serious about getting rich from online affiliate programs.

May these insights about affiliate program, best affiliate program, free affiliate program, affiliate marketing program, top affiliate program, free online affiliate program, best free online affiliate program, online affiliate program, make money with affiliate program help you to attain success in your online business.

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Market Concept Testing – Guerrilla Style

Marketing new products and services is vital for most companies. Many marketers, however, are unaware that fast, low cost guerrilla techniques for market concept testing can easily replace cumbersome market research, saving lots of money and time in the process.

A Simple Model For Strategic Thinking

In order to test a new market concept you need to have one, right? Use this simple, intuitive strategy model for understanding the dynamics in the marketplace you’re considering. At first you simply work through the model applying what you already know or strongly suspect is true about the market. Then you go back and support each and every assumption you’re holding with market data.

– What are the trends in my industry?
– What’s driving these trends?
– What are we currently doing about the trends?
– What are our competitors doing about the trends?
– What could we be doing about the trends to increase our profits?

During this process you’re squarely in the analytical phase of marketing. You’re creating ties between your idea and a market that will welcome or reject it. Do your work carefully at this stage or you’ll wind up with every marketer’s nightmare…a product or service that’s an answer to a question nobody’s asked!

Collecting Unbiased Customer Data
There are a couple of ways to approach this task. It’s recommended that you use both methods so that your information will be balanced between primary (straight from the customer) and secondary (conclusions from experts). The objective here is to clearly understand your WOW! and how you’ll prove it.

The first thing to understand (and many marketers don’t) is that business is a social process. Which means, to do this successfully, you’ll be spending the bulk of your time dialoguing with people…not noodling around on the internet. If the thought of this provokes anxiety you’re in good company. Most people don’t relish talking to strangers but successful people in just about every profession just bite the bullet and do it any way.

Step 1: The Internet Part
To establish a beachhead, and not duplicate effort, spend about 10% of the time you’ve allocated for this project internet research. The objective is to gain a baseline understanding of available information about current offerings and substitutes in this market space. You also want to understand the various marketing and sales channels. It’s especially good to know about substitute choices your prospects could make instead of buying your product. It’s good to look at the whole chessboard, not just the squares immediately surrounding your next-move.

At this stage we’re looking for available industry reports and similar expert analysis of:

• What are the trends in my industry?
• What’s driving these trends?
• What are our competitors doing about the trends?

You’ll find out what’s available by doing these searches:

1. [industry name] or [product/service] or [major competitor], financial analysts
2. [industry name] or [product/service] or [major competitor], market research
3. [industry name] or [product/service] or [major competitor], Hoover’s
4. [industry name] or [product/service] or [major competitor], [name of local newspaper]
5. [industry name] or [product/service] or [major competitor], business news
6. [industry name] or [product/service] or [major competitor], industry news
7. [industry name] or [product/service] or [major competitor], industry experts
8. Run similar searches on your favorite social media in case those entries were not picked up by the search engines.

If something about your subject has been written, pod casted, YouTube’d, tweeted, blogged or discussed at a conference you will find it with these searches. Sift through what you find and plug each piece of key information into the 5-point strategy planning model we’re using. Now you’ll see a shape starting to form around your strategy model.

Step 2: Create A Discussion Guideline
This is what you will use as a guideline in talking with potential purchasers of your market concept. In essence this is the heart and soul of your project. The care and accuracy you put into this step will determine whether your market concept test results are accurate.

These are the objectives:

1. Understand whether your WOW! is really a WOW!
2. Understand industry and purchasing trends related to your market concept…and what’s driving those trends.
3. Establish a view on growth opportunities for your company or division.

We recommend that you structure your guide so that it results in a discussion. People are more likely to loosen up and talk freely about your market concept, and the alternatives, if you’re not reading questions verbatim as in a market research survey. Sketch out five key areas of information that you want. These might include:

• What do you think about the concept I’ve presented?
• Steer them toward their thoughts on advantages and disadvantages.
• Ask them what would make it even better.
• What are the substitutes or alternatives including do-it-yourself and in-house solutions?
• How, when and where do you like to receive information on new products and services such as this?
• Digital
• Traditional (print ads, trade shows, telesales, etc.)
• Colleagues, friends & family
• Where and how would you most like to purchase something like this market concept?
• Steer them toward what’s the ideal venue for them, not just where alternatives are available today.
• You’re seeking every competitive advantage you can get.
• Would terms such as financing influence their purchase decision?
• Who is the final decision maker and who else is involved in making a purchase decision? Refer to your notes on complex sales and remember that large consumer purchases can often involve multiple decision makers and influencers.

It is critical that you not approach this exercise with pre-conceived notions of what your company can or can’t do. You simply want to visualize the best possible purchasing scenario for your new market concept. You can parse internal strengths and weaknesses later. Do not base a go/no-go decision on your weaknesses!

You may think of many other categories of questions. Just remember that most people will limit your time with them to 15-30 minutes so keep the number of categories low and focus on going deep in each category. You can always substitute different categories in subsequent calls with different people. Again, after three or four calls you’ll have a much better idea of which categories of information are the best for your purposes.

Step 3: Create A List of Potential Customers
The next is interacting directly with your market. This is a hugely valuable exercise for product managers, marketing managers and marketing leaders. You’ll learn more about your market concept in a day of doing this than just about anything else you might choose to do, including conjoint analysis and focus groups.

The objectives for this stage are:

• understand who holds the knowledge you need
• understand the role each influencer will play in a complex sale
• understand where, when, how and from whom they get their decision influencing information

The people you need to talk with can hold one or more of the following roles:

• Decision maker
• Influencer
• Approver
• User
• Deal killer

With some products and services, mostly consumer products and B2B products costing less than $1,000, you’ll be talking straight to the decision maker. With most other products and services you’ll be talking to the decision maker plus one or more of the other types of buyer. If you’re not familiar with the mechanics of a complex sale you’ll need to pause the project until you’re caught up. Just do a search on ‘complex sale’ and you’ll find what you need to know. This is critical for B2B and higher-end or more complex consumer products and services.

Your objective is to talk to at least 100 people who have direct influence on the purchase of this market concept you’re testing. If you’re testing a consumer concept (for example tax preparation software) start talking with people in your circle of influence including friends, family members, colleagues and professional contacts. You will qualify your research participants based on who prepares his/her own taxes and whether a software product is used. Once you have the list and their telephone numbers you’re ready to move on to Step 3.

If you are testing a B2B market concept you must go straight to the companies to whom you’ll be selling your products or services. You may have a few contacts in these companies but you’ll spend the bulk of your time talking to people you don’t know. Be up front about your mission and never disguise yourself as a student doing research for a term paper or project. Just be yourself and be honest in describing what you’re doing.

If you’re cold calling a company start where you can get a foothold. If your market concept is a new and better alternative to traditional inventory control systems in mid-tier manufacturing companies, likely you will be talking to people in logistics, purchasing, operations and accounting. Go to the company’s website and list the names of key people in those functions if they’re identified. Then call the main number or department number, if listed, and ask to speak to that person. You may get through or you may not. Regardless of whom you talk with, even if it’s the main switchboard operator, just give him/her your 25 word elevator pitch on what you’re doing and ask who they’d recommend speaking with.

You will find that after calling three or four companies your comfort level will rise dramatically and you’ll start getting through more often to people who have the information you need.

Summary
This sounds like odd work for marketing people doesn’t it? However the advantages of this approach are many.

First, it gets marketing people immersed in the marketplace. This is far better than the superficial practice of having marketing people shadow a sales person for a day or two once a year.

Second, it gives marketing people an affinity for the role of the sales team. It helps them understand selling so they, in turn, can work with salespeople on devising strategies to overcome resistance and objections.

Third it gives marketing people solid confidence and much more enthusiasm for introducing new concepts if they have discovered the marketplace dynamics and purchaser habits and practices. This confidence will spread to other areas of the company, giving the marketing and product teams more support than they would have otherwise.

So yes, it’s a truly different approach but it’s highly effective and takes a lot less time and money than traditional market research.

Case Study
A startup company in California has a new market concept for virus protection solutions for iApp (applets for Apple’s iPhones) vendors. This startup is reluctant to spend $50-100K on formal market research so they’ve decided to do the project in-house.

They plan to assess the current competitive landscape for iApp virus protection by:
• Conducting a search for iApp virus protection vendors, if any
• Interviewing a small number of current iApp creators
o Do the trends they’re seeing suggest a market opportunity for our concept?
o What do they know about current solutions on the market?
o How would our offering solve a current problem or pain point better than other offerings?
o What would they pay to solve that problem or pain point?
o What level of disruption or complexity can the organization handle for installation and testing?

Next, the startup will assess current substitutes for their concept. They’ll do this by conducting a search and gathering product specifications, distribution models and other key information for each of their potential competitors. Some of this information they will already have from collecting customer data from the internet and other resources they used. The rest of it they will need to go after using the same information gathering techniques. These are some possible insights gained from their efforts:

• Their new market concept would need feature adjustments
• Their new market concept would be targeted at iAPP creators only
• They can lean heavily on digital marketing rather than traditional marketing
• A utility pricing model (pay based on consumption) would give them a strategic advantage
• A unique guarantee would give them a strategic advantage
• Acquisitions would not be a source of competitive advantage near term

The team now has enough information to make a go or no-go decision. If it’s a “go” the next step is to make sure there’s plenty of money in the bank, or coming in, to fund development and commercialization. Before the software writers kick in, though, the team needs to create a marketing requirements document and a commercial release process to make sure they won’t run out of money before sales revenue kicks in.