6 Profitability Models Using the Internet
Rather than focusing only on what you’re going to sell, focus on what profit model you are going to use to create business profits. The main idea is to create diverse revenue streams that can work for you in an automated way while providing significant value to your customers.
The three basic models of internet marketing are:
1. Sell a product on your web site (make sure fulfillment is handled in advance).
2. Sell a service on your website (geography not an issue but your time can only go so far).
3. Generate leads on your web site (the money comes from converting visitors to taking action).
Go beyond these three kinds of transactions by using a system or model that can repeatedly generate profits. Here are six models to consider for your business results.
#1 – Have A Recurring Revenue Model
Sell a product or service that will generate steady income for you over time. Examples: a continuity program or a membership site. Sell renewable or “re-fill” products, such as annual subscriptions, modules or supplements (think consumables, like vitamins). Sell an ‘ascension’ product, where there are different levels of income. Example: a basic membership, a silver membership, and a titanium level of membership with increasing levels of benefits. This allows people to ‘taste-test’ your product and you get to develop long-term relationships with your customers.
#2 – Increase the Purchases of First-Time Customers Immediately
This is called ‘up-selling’ the customer while they are in the energy of buying from you already. Make sure your upsell offer is something that relates to what they’ve purchased already. Example: they’ve purchased an audio program, the upsell being the companion workbook or a monthly membership program.
#3 – Maximize Your Current Customers With Follow-Up
Build a relationship with your current customers by offering sequential offers. Examples: thank your customer for their order via email, ask them if they have questions, and offer a related product OR send a special ‘thank you’ to your long-term repeat customers with an upgrade offer, information that improves their use of the product or even to share a new product you are promoting with someone else (a joint venture product). Send your follow-up emails a few times (over the course of the first two weeks) after the initial purchase.
#4 – Offer An Affiliate Program
Having an affiliate program means that other people can promote your products or services to their contacts, and you pay them a percentage or flat fee for any sales that come from their marketing efforts. Make sure you support your affiliates with marketing tools and information.
#5 – Strategic Alliances
An alliance can be for a specific project, product or initiative, and can be both short- and long-term in nature. You are, essentially, combing your skills and resources to market with another business. This helps you both expand into new markets and offer high-quality products that you wouldn’t be able to share otherwise.
#6 – Offer Info Products
The knowledge, experience and expertise that you have is valuable. Take what you have, put it into an ebook, audio or video program with a companion guide, and you have something that you create once but that you are paid for repeatedly while providing substantial value to your customers. These can be offered in a one-time download or over time. And it leverages your time and reach in working with your customers.