Finding Success with your Utah Company Using Online Marketing Means Choosing the Right Business Model
Many people think that starting a company in the 21st century means building a website, and magically customers will appear. It doesn’t work that way. Online marketing is a more complex and expensive process. If you are an entrepreneur in Utah and considering starting a venture, think about these few facts before jumping into the business.
01: Building an Online Store is Expensive
If you think you’re building an online store, understand the process is not easy. It’s expensive, and you’ll not immediately find customers. So think this through before investing. Building an online store is a very time consuming and technical process. Marketing that store is even more challenging. How will people even know your website exists? Also, consider the fact that when you build an online store, you also have to have a real store to supply customers with products, so there are legitimate back-end expenses. The best online stores supplement existing businesses that already have a client base and revenue stream.
You will have to invest in SEO for many months to strategically target your products and services to rank for whatever it is that you’re trying to sell online. Ranking nationally for specific phrases can take many months, even years.
There’s a reason people often sell their products on platforms like Amazon when they first start selling online. Using a large, easy to use online store designed to sell lots of products may be a smarter place to sell your product or service at first, depending on what you’re trying to sell.
02: Consider the Price Point
We’ve had many conversations with people who are inspired to sell a great product or service. And maybe that’s what’s exciting you about your big idea. After all, we all need inexpensive things in our lives. But this can make selling that big idea very challenging because the less expensive the product, the more of that thing you must sell to make a profit.
In today’s marketplace, don’t think about selling a thing. Think about selling to a person. For every person you sell to, there are potential costs and rewards. Ideally, profitable companies spend a little bit of money to make an initial connection with a client. They then make revenue over and over again, selling to that person after they’ve made the initial connection.
The higher the price point of your products or services, the more potentially profitable your business. If you are selling something expensive, you justify spending money to make that initial connection with clients.
Many companies have figured out how to add additional services to what they already offer. For example, if you’re an attorney and primarily provide bankruptcy service, you could offer an add-on service. You could start selling a monthly resource where customers can call you anytime to ask for advice on dealing with disputes or creditors. We’re seeing these types of services being offered all of the time now by smart entrepreneurs.
Shift Your Model From a Product to a Service
You may consider shifting how you bill your clients, changing your model entirely. Many companies once offered a one-time product with a large transaction but are now convincing clients to sign up for monthly services where they access their products indefinitely.
We Prefer Fixed Expenses
We’re seeing this trend all across many different industries, where companies that once relied on large transactions from one time customers have shifted customers to ongoing customers. A good example would be Adobe, a company that sold graphic design software for several thousand dollars. Customers’ problem is they would have to purchase this software every few years every time they bought a new computer. This was an expensive endeavor and not really in the best interest of both the consumer and producer. In this case, the buyer and seller are companies, and from an accounting point of view, companies prefer small fixed expenses rather than large variable ones.
Families prefer fixed expenses too. We’re seeing this model affect the way we consume media. Why buy a Disney on Buy-Ray movie when you can stream it any time you want on Disney Plus? It makes more sense for families to allocate a small portion of their budget every month to access these movies digitally than invest in owning the entire Disney library on some permanent media.
Your Model Counts if You’re Going to Market Online
What does this teach you as a business owner? Don’t sell something inexpensive? You’re going to invest a lot of time and money to get your first customer. You need to make money from each customer every month. If you have a grand idea, but it usually sells at a small price point, is there a way to tweak the model, so you’re selling it at a higher price point? For example, if you have a great product idea, but it’s a relatively inexpensive product, great. Do not sell it through retail. Is there a way to sell it commercially? Is there an unconventional way to sell your product at a higher price point over and over again to the same customer?
This is why we typically focus on working with mental health clinics with our marketing agency. They offer ongoing services to customers rather than selling a product one time to a customer. But there are a lot of Utah companies that can use this model to find profitable marketing strategies.
Marketing online isn’t cheap. So, when you go down that route with your Utah company, choose your model wisely. If you need advice about how to find the right business model, reach out to us. We’re happy to help you find the solutions for the best model for your business to make it a successful venture.