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 While it’s rarely mentioned, I do most of my consulting around one particular information marketing business model. For the first time, I will reveal the business model in the new edition of the Official Get Rich Guide to Information Marketing I’m writing for my publisher, Entrepreneur Press. I thought I’d give you a preview in today’s issue of Information Marketing Insiders’ Update.
This business model is for someone in business today selling high-priced services. These can be personal services such as cosmetic surgery or housing remodels. Or it can be business to business with high-priced consulting engagements or large systems design. When you are marketing high-priced services or consulting, it is terribly difficult to make sales calls and push for clients to invest in high-priced services. One of the challenges is you have no way of determining who within your prospect list sees themselves as having the type of problem you can fix.
This means that while your profit margins on your services may be high, you end up spending a lot of that profit on the marketing necessary to generate a customer. And as is often the case with these services, there isn’t a lot of recurring revenue from your customers, so you must continue acquiring new customers to maintain your cash flow. For instance, once someone buys a $25,000. 00 cosmetic surgery procedure,comparatively there isn’t a lot of revenue in inviting that person to participate in a $99. 00 a month continuity program. Instead, it’s much more profitable to go out and find the next $25,000. 00 case.
While I had created information products for clients for many years, the first information product I created for my own business taught associations how to implement all of the membership marketing strategies that I was producing for my association clients through my consulting services. I assembled my processes in a step-by-step fashion together with some examples and made that available to the same prospects to whomI had been selling my own consulting services.
But wait, doesn’t that reduce the number of consulting clients? No, in fact, it does just the reverse.
Yes, it seems like you would lose clients if you taught them exactly what you planned to do in your services and then provided them with examples and step-by-step processes for doing it. However, it generates more clients for you. And the clients this process generates are better clients because they understand the process you are going through and have taken the time to learn what they need to provide you.
I was simply following this info-marketing business model, using an info-marketing business as a customer lead generation tool for my service business. So, rather than promoting myself as a membership marketing consultant, I began promoting my membership marketing information product. The revenue from the product sales paid for my advertising. Then I was able to promote my consulting services to my product buyers with little cost. I was making a profit on the info-marketing business and earning much better margins on my consulting business because my client acquisition costs were reduced dramatically.
While it is important to me to reduce my marketing expenses, in some cases it may make sense to operate an info-marketing business without charging for the products. Recently, I worked with a client whose minimum consulting client generated $1 million or more. In these cases, the expense of client marketing plus the non-billable time doing prospecting work and sales calls was extremely large.
We were able to create an info-marketing business by mailing a monthly newsletter to his 1,100 best client prospects. This newsletter credentialized him as an expert in his field and provided short client examples to demonstrate that expertise. Then, every quarter he offered a webinar to encourage his readers to become engaged for more information. At the end of each webinar, we invited the participants to complete a self-assessment of their own operations based on the content of the webinar. Once they completed the self-assessment, they submitted it for grading. It was graded and personally delivered by one of his client development managers, who had everything she needed to turn that prospect into customer — because the results of the self-assessment told her exactly where the prospect needed help to improve his operations. Plus, because the prospect had experienced the newsletter and the webinar, he already knew about the consultant’s expertise, qualifications and other client success stories. All that was left was asking for the sale.
Of course, this isn’t for everybody. The investment of delivering the newsletter each month is $2,500. 00, and each webinar costs about $2,000. 00 to market and deliver. However, on an annual basis, this adds up to $25,000. 00 a year, which is a lot less than my client was investing in marketing before, and it’s generating many more new clients.
Trying to offer high-priced consulting services without an info-marketing business is a lot like proposing marriage without dating. While some clients came ready to buy, most are reluctant about whether they really need your services or whether you are the right supplier.
Since Dan Kennedy, Bill Glazer and I created the Information Marketing Association in 1996, I’ve always talked about info-marketing in the context of starting a new business. But as you can see, it has a lot of power as an “add on” to an existing business. In fact, it’s so powerful that in some cases, you don’t even need to charge for the products.
Do you have any examples of info-marketing as an add-on to an existing business that you’ve used in your business or witnessed in others? Join the discussion at A Rarely Discussed Business Model. I read all your comments and reply when appropriate.
Best wishes,
Robert Skrob
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