First, a video of Seth Godin talking about standing out. Some of you might remember a previous newsletter on this topic. Well, I don’t think I ever included this video. It’s worth watching just to find out how Silk brand soy milk tripled its sales. Running time: 17 minutes Seth Godin on Sliced Bread & Soy Milk

This next one is a bit off topic. It’s an interview with Richard Stallman. Never heard of him? I’m not surprised. He’s sort of an underground hero. You see, when he was a student at Harvard and working in the MIT artificial intelligence lab, he started creating free software so that academics could freely modify it to suit their needs. What he started back then, in 1983, was called the GNU project. You’re probably familiar with it. Most people just call it Linux. The correct title is GNU/Linux, as it’s a combination of Stallman’s work and a kernel by Linus Torvalds. Anyhow, Stallman recently gave an interview to Mashable that I think should be required viewing. Running time 3 minutes Stallman on Software Freedom

Finally, for you copywriting geeks out there, here’s a video presentation by Drayton Bird, who, according to David Ogilvy, “knows more about direct marketing than anyone in the world.” In it he breaks down and analyses four advertisements — two by him, one by David Ogilvy and one by Claude Hopkins. If you’re a student of the persuasive power of language then you’ll love this one. The link is to a summary, just click through to watch the video. They won’t try to sell you anything. Running time 50 minutes Drayton Bird’s Ad Crunch

Sorry, I can’t embed this last one, and I don’t think it will be available forever. It seems kind of hypocritical to post this non-free video after Richard Stallman, but hey – I’m not perfect.

Think about it.  When you pick up a newspaper you glance at 80% of the headlines and read about 20% of the articles.  Why?  All those unread stories weren’t what you were looking for, and you decided that in a few seconds.  So, in the newspaper business headlines are vital… actually in every business.

Websites have a lot more going on than just the headlines.  So does a brochure or a full-color mailing.  There are colors, photos, graphics, and even video (on websites, not on brochures yet.)  All of it can contribute to a prospect’s decision to stay or leave.  All of it, but I’m just going to talk about colors for now.

Colors can convey information, along with being pleasant or not.  Have you ever seen a red pickle jar?  No, they’re green.  So, when you want pickles you look for the green jar.

Is there a fast food chain that doesn’t use red in its logo?  I can think of only one: Subway.  Even their colors tell us that they’re totally different from those greasy burger/pizza/chicken joints, which all use red in their logo.

Beyond the information in colors there is color preference.  Everyone has a favorite color or two.    What’s interesting is our choice in colors might not be totally random.   USA Today gave a color test to its panel of 877 CEOs.  The results were that the CEOs “were three times more likely to favor magenta than the public at large.”  They were also less likely to opt for yellow or red.

Am I saying that if you use magenta and not yellow or red on your website you’ll convert more CEOs?  No, but I’m thinking it pretty loudly.  Who knows.  There doesn’t seem to be enough published research to say whether there’s anything to this notion that color preference and personality are linked.  If you’re getting enough traffic to your site, you could test it for yourself.

Now, I took this color test too and was surprised by the results.  It’s a personality test, where all you do is click on colors.  It decided my personality type was The Creative, with a secondary type of The Persuader.  Yes, it suggested I pursue a career in advertising, marketing, writing, or web design.  That’s what I do all right, weird.

You can take the test too, it doesn’t take long.  At the bottom of your results page you can click to see a list of 50 careers that suit you.  Ignore it, it’ll cost you ten bucks to see the top 25.  Let me know what you thought of your results.

One last thing about color.  Color combinations can be harmonious or not.  If you’re looking to pick out a color scheme then it’s worth using a tool to be sure you get colors that work with each other.  The tool I’ve used for years is ColorSchemeDesigner.com.  Adobe also now has one that’s integrated into all their design software at kuler.adobe.com.

Got any interesting ideas about color? Share them below!

To figure out your conversion rate you need two numbers.  You need to know how many total times you had the opportunity to make a conversion – e.g. website visitors, phone calls, or walk-in customers.  I’ll refer to this number as impressions for the sake of clarity.  You also need to know the number of successful conversions.

Note: Be sure to measure these over the same time period!

Then there’s a little math.  Don’t worry, I’m a professional.  Whip out your calculator and key in:

That will give you your conversion rate.  Bump the decimal place to the right two spaces and you’ll have it as a percentage.

Example: Your website got 328 visits and you made 16 sales.  16 divided by 328 equals 0.04878.  Bump the decimal over and you have a 4.878% conversion rate.

Okay, that’s the math.  What about getting those numbers?  Obviously, if you have an ecommerce site it’s pretty easy to figure out the number of visitors and the number of sales.  It’s a little trickier if customers visit your website, then call in an order or visit the store.

The answer here is training.  Train your staff to ask callers how they found you.  Train your clerks to ask while they ring someone up.  You can keep a clipboard by the register and the phone where your staff can mark down the answers.  Heck, you could even use a fancy spreadsheet.

Spend some time figuring out how to phrase your question.  Be specific.  You probably don’t want to ask your regulars “How did you hear about us?”  You’ll do better with “How did you find us today?”

If you’re tracking phone conversions be sure to tally how many total calls there were in addition to the number of sales made on the phone and how people found your number.

Another option is to get an 800 number that forwards to your main line.  Then put that number on your website instead of your regular number.  Now you can track the number of calls that came from your website.  Of course, that’s another monthly expense.

Now, on the web there are a lot of ways to track conversions.  For instance, you can define goals and funnels in Google Analytics or use Google Conversion Tracking. There are great click-tracking systems you can install like Crazy Egg or ClickTale. That’s a separate article though.

This post first appeared in my e-mail newsletter.

A conversion is when someone looking at your offerings decides to take the action you want them to take, i.e. making a purchase or providing you with their contact information.  On a website, the conversion rate is the percentage of visitors who make a purchase or give you their e-mail address.

When you know what your conversion rate is and what the average value of a conversion is, you can calculate return on investment, ROI, very accurately.  When you know your ROI you can make the most informed and profitable decisions about the allocation of your marketing budget.  The higher your conversion rate the greater your ROI.

Next month I’ll get into measuring conversion rates, and I’ll have a special offer for newsletter subscribers who want some help getting a system in place to provide these metrics.  Now, I want to tell you about how to increase that conversion rate.

The most effective, simple way of conversion optimization is to simply put yourself in the shoes of your customers, clients or donors.  Walk through the process you expect them to use when they do business with you.  This could mean walking into your store and trying to see it as a customer would.  If you do e-commerce then you need to go to your website, browse a bit and make a purchase.

Every business transaction follows this model: Visit, Obstacle, Goal.  You have visitors and you have a goal you want them to perform.  In between is what keeps them from converting, obstacles.

What obstacles do your put between your visitors and them taking your desired action?  Obviously, some obstacles can’t be removed, like having to reach for their wallet.  If they have to fill out a form on your website then too many fields to fill out can be an unnecessary obstacle.  Every click and every keystroke a visitor makes is an obstacle.  Try to make your website require as little clicking and typing as possible to carry out a transaction.

In a store there are many possible obstacles.  The organization of your products might create obstacles.  If people can’t find what they need quickly they’re less likely to follow through with a purchase.  Your employees might seem disinterested, unhelpful, or even rude.  Poor people create obstacles not just to making a purchase, but to feeling comfortable in a store.

Service providers often create a big obstacle with their price tag.  It’s a lot of money to agree to up front.  So, many of us change the goal.  Instead of going for the sale right off the bat we offer a free consultation or free estimate.  This gives us an opportunity to chip away at the price-tag-obstacle before the client has to face that decision.  Plus, a no-risk goal will always convert better than a goal with a price tag.

Improving your conversion rate is the the process of making it easier to do business with you.  There are more rigorous methods of going about it, such as split-testing, but I bet you can figure out some ways to improve just by putting yourself in your customers’ shoes.

Don’t miss the follow-up to this post, Conversion Tracking You Can Do Yourself, Cheap.

This post first appeared in my e-mail newsletter.

The sky's the limit when you expand toward the horizon.

There are two directions to grow your business, vertically and horizontally.  Vertical growth is selling more to your existing market and expanding your share of that market.  Horizontal growth is selling new products or services experiences to your existing market and adapting your offerings to fit new markets.  At least that’s the way I look at it.  An MBA would tell you that horizontal growth is all about acquiring companies in other sectors.  That’s not very useful to most small businesses.

When you start thinking about growing your business horizontally it’s really helpful to properly understand what it is you’re selling.  Don’t get me wrong.  I’m sure you have a masterful understanding of your products and the services you offer.  

That’s not what you’re selling though.  People don’t buy a drill because they want a drill.  They don’t buy cold medicine because they want cold medicine.  People buy drills because they want holes.  They buy cold medicine because they want to stop coughing and be able to breath clearly.

You’re not selling products and services.  You’re selling experiences.  If you happen to sell drills  you’re selling the experience of hole creation.  That experience has real value to a variety of markets.  Drills can be marketed to construction companies, whose work depends on making holes.  They can be marketed to the do-it-yourself enthusiast, who finds great value in the freedom to create holes.  As a final example, drills are valued by arts and crafts types because drills allow them to adapt and create new things that just needed a hole or two.

Each of these groups buys drills, but they respond to different packaging.  The foreman wants commercial grade reliability and power.  The do-it-yourselfer seeks economy and versatility.  The crafts person might desire the ability to make small holes in delicate materials.

OK, enough about drills.  What experience do you sell?

Restaurants sell a dining experience, where someone else does the cooking, cleaning and worrying.  Consultants sell learning experiences that result in some sort of improvement.  Cafes sell a variety of experiences without even thinking about it.  They sell a social experience, a morning caffeine experience, a warm studying experience and more.

So, how do you turn that into horizontal growth?  Package it.

A restaurant could offer a romantic dinner package, with champagne and a private candlelit table.  For lunch they could offer a business lunch package with two lunch dishes, two sides, and two drinks, plus you get to sit at a four-person table even though you only have two.

Give it some thought, and I bet you can think of a way to package what you already sell so that it appeals to a type of person that isn’t already shopping with you as much as you’d like.

Another opportunity for horizontal growth is selling something you already have, but don’t sell.  There may be a byproduct of your operation that has value to someone.  For example, when coffee is decaffeinated the extracted caffeine is sold to make caffeine pills.

More likely, you have knowledge that you aren’t leveraging.  If you own a plant shop then you should offer weekend gardening classes.  Once you have that down, why not write a book or make an instructional DVD?  It’s insanely easy to self-publish these days.

Whatever you end up discovering and packaging, you’ll need to market it.  Email marketing remains the most cost effective method of reaching out directly to people.  Direct mail still works, but can get very costly, especially if you want to purchase a mailing list based on demographics.  Direct mail is pretty affordable if you just do a standard postcard.  You can send a custom color postcard out to your customer base for about $0.50 per person.  E-mail is more like 2 or 3 cents per person.  Either way, when you launch a new package send out a limited-time discount or coupon to your list to get things rolling.

If you find a package that’s popular you can try repackaging it as a continuity program.  You know, a something-of-the-month club.  You could create a romantic dinner club, with easy monthly billing.  Something-of-the-month clubs have been around a long time.  The first that I know of is the Book Of The Month Club, which started in 1926.  Today, if you google “of the month club” you’ll get 10.2 million results.  Be sure to treat your customers fairly in your continuity programs.  Do that, and it shouldn’t be hard to at least break even, assuming you already have the ’something’ to sell each month.

This post first appeared in my monthly small business newsletter.