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1. A falling market - and it's nearly always falling after your first few adverts. 2. A diminishing market share due to everyone else piling-in. 3. Rising advertising rates (sometimes steeply) due to papers 'locking-on' to fact that you have a winner.
Most direct marketing successes are quick 'in and out' jobs. You know this is true, because you rarely see exactly same product advertised week after week, month after month and year after year. You want to be in there, and out within a few weeks. Then you can sit back and smile as everyone else piles-in and tries to emulate your success in a falling market against stiff competition. Sure, you'll lose a few orders, sure, you might have been able to milk it a little bit more before diving out, but at least you creamed off most profitable share of market, and kept all of it. This is what it's all about. Don't learn these lessons hard way.
There is nothing more heartbreaking than making £100,000 clear profit in first two months of a campaign, and then handing £50,000 of it back to media over next six months of hard slog. In other words, you work hard for two months and make £100,000, then you slog for a further SIX months and LOSE £50,000. I have seen this happen time after time after time. To get rich in this business, you must develop a sense of timing. Knowing when to get in, and more importantly, knowing when to get out.
For this reason, I advise against trying to follow crowd into a product idea. If papers are full of adverts for steering-wheel locks, naive player thinks: "Great. This must be thing to get into." So they rush around like crazy trying to source a product - often at too high a price because they are desperate to get into market. They then advertise this product in a falling market which is fiercely competitive and at extortionate advertising rates (because papers have 'locked-on' to 'success' of this product). The result is that they lose big money.
My favourite strategy for mail-order is as follows:
1. Come up with your own, unique product idea. I don't mean 'invent' a product and have it tooled and manufactured. I mean source a product which YOU believe will sell, and that you can't recall seeing in a newspaper or magazine as a mail-order item.
2. Test product in a suitable cheap advert. If it flops, drop it.
3. If it looks good, then buy a single insertion in a big-league paper like Mirror, or Sun.
4. If this works, then plan a campaign which ramps up quickly over (say) three weeks, holds steady for (about) four weeks, then ramps down over (say) three weeks. Aim to be out of product in three months maximum.
In this strategy, 'me too' brigade will only start piling-in as you are ramping down your campaign. This is perfect. If your product is 'paper and ink', then it will take much, much longer for competition to copy you. It takes quite a while to write a book or a course. Also, general mail-order chaps aren't very keen on this type of product. They prefer plastic gizmos and 'real' products. A book or a course can have a much longer life - often years if you are subtle about it. Also, if you have a great 'back-end' product and are buying advertising at low, low rates, then you can go on for years and be untouchable. People will try and copy you (periodically, I see 'Midas' type adverts coming and going), but they soon die because they are paying twice money you are paying, and they are not exploiting 'back-end' - where most of money is made.
They retire broke, puzzled and confused. They wonder at how you can possibly keep advertising when they know that product only takes half of advert cost. You know secret. You are buying distressed-rate space, and you have a great follow-up product which makes more than original sale of book.
Nick James is a UK based direct marketer and product developer. During the last 3 years Nick has sold in excess of £1 Million of products and services. Subscribe to his Free Tip Of The Week email at: www.Nick-James.com