Archive | July, 2006

Viral Marketing – The Good, The Bad and The Ugly

Posted on 26 July 2006 by SonHouse

Have you ever seen that ad where the guys are sitting around a computer waiting for their first order to come in and all of sudden they start pouring in faster than they ever expected and the guys begin to panic?. I was lucky and fortunate enough to experience that over 7 years ago, well…sort of, in one of my first ever online marketing campaigns.

Well..I mentioned in my first post that my family had owned and operated an educational supply store in south Texas for some time. I moved to Austin in 1996 to open my own retail location in the same industry. Business was ok at first, but I was always trying to find ways to make more money. I quickly discovered that I could do just that online. So, I learned some HTML and built my first website in 1997. My online business moved along for the rest of 1997, 1998 and in 1999 I decided to really focus on online sales as my brick and mortar store was not doing well and I was thinking about closing it. Sales were relatively slow at first, but with some early SEO, before it was fashionable, some cpc through, and the help of ebay driving traffic to my store and the fact that I could process credit cards through my business, I was able to make additional revenue each day. This was before paypal, so I would get the customers to email or call in their credit card number..I even thought about accepting payments for other ebay members using my setup and taking a small cut for the trouble, missed that one..huh?

Anyway, I was pretty aggressive in my marketing efforts for the online store but noticed only a few products were selling well online. The same ones week after week. So I decided to dump all but a few best selling categories and see how that would work. I also decided to try something different, well different at the time. I thought about offering a small free sample of one of the was a consumable type product, light weight, easy to ship that I could put together myself. My thinking was, sell the customer with a web page for this one product, offer the free sample, request the customer info, send it out, and sit back and wait for the orders to pour in. So, I learned how to submit a custom form to my email address and then I just waited. The first week, I received a few sample orders a day and would send them out with an order form, website info, etc. My cost on each sample was about .80 including the postage. This goes on for a few days, then I notice one morning, I get about 120 emails requesting the sample. I started to get a little excited…I quickly sent them all out that same day. I updated my form to ask where people were learning about the free sample so I could track what was going on. Well the next day I came in and checked my email and I could not believe what I saw. I hit the send and receive and watched an avalanche of email, over 5,000, rain down on me. Well I was excited to say the least but totally unprepared for the response. Over the next few weeks, I managed to rack up over 80,000 requests for samples of this one particular product. After looking through the emails I learned that “word of mouth” was the top entry in the field asking the user how they discovered our promotion.

Well, needless to say, I neither had the cash, $64,000, the samples or the staff to fill that many orders in a timely manner. To make matters worse, I had set up an autoresponder that would email the customer after about 2 weeks to see what they thought of the sample and if they would place an order. This same autoresponder would check in again every few weeks to “encourage” the customer to place an order, which was all fine and dandy for the first few thousand I managed to get out…for the rest of them, well..I had a lot of angry people replying to all those emails even though the sample was free. I was working as fast as I could to get the samples out, but it was not fast enough. I even put a statement on the site that free samples would take 6-8 weeks to deliver but the complaints started pouring in. People wanted to know where their free sample was and when were they going to get it.

Anyway, after a few weeks of trying to scrape together some cash, and send out as many samples as I could, I had to finally pull the plug on the whole thing, take the page down, kill the autoresponder and email the other 75,000 people telling them that the response was so overwhelming that I could not afford it and was not going to be able to send out the freebies.

I did start to receive some orders from the first few batches of samples that were sent out but it was not enough to really tell if the promotion would have worked.

What did I learn from this experiment? Well..the power of the internet is awesome and the power of viral “word of mouth” marketing is even more awesome Things happened fast and furious and if only I had had the financial resources to tweak that program, things might have turned out differently.

I’m currently working on reviving this product offering and have figured out a way to manufacture it myself. Stay tuned!

Viral! Be prepared! you might just get what you asked for.

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In the beginning….

Posted on 25 July 2006 by SonHouse

Well…I’ve been thinking about building an online marketing blog for a while, and after reading a bunch of them and finding out that people may in fact be interested in what is happening with yet another web marketer, I figured I’d give it a shot.  So here goes….

A little history:

My experience in the high tech world dates back to my days in high school in the early 80’s.  My family owned and operated an educational supply store at the time in a small town in south Texas for over 10 years.

We were in desperate need of a computer system to handle our billing so we decided to purchase the most bad ass system available at the time, a CPM MONSTER desktop.  We paid $17k for that soon to be dinosaur which consisted of a cpu/hard drive, that was as big as my entire desk, weighed a ton and would grind away while crunching the data, a black and white monitor, (2) 5 1/4″ drive combo, and one satellite monitor that plugged into the cpu so it was only about 6ft away.

By the mid 80’s that system was dead of course, and we upgraded to an IBM system.  I graduated from high school in 1985 and went to the University of Texas for my freshman year.  I took that old CPM machine with me to do papers and things on, I used Wordstar and would have to run the app on one floppy and save the data to the other, pretty funny.

I knew a few friends that were starting to get macs but I couldn’t afford the $3000 price tag.  So, I tried to make due with my old piece of crap CPM machine.  I even convinced some prof to give me a copy of Kermit which was a communication program that would allow me to dial out to the university’s computer network.

I recall it took him months to copy the disks, a stack of 5 1/4″ floppies that I would have to load one at a time to get the program to run.  I dabbled with that some but soon discovered that my machine was so outdated and ultimately would not cut it in the new world of computing that was just around the corner.

A friend of mine and I used to sit around and talk about building our own computers.  While skipping class, and before heading to the lake to catch some fish, we would buy computer shopper catalogs and fantasize about building our own machines.  I was too broke at the time but my buddy was able to order the parts and build a machine.

Low and behold, the thing worked.  One thing he was real into and got me interested in, at the time, was all of the BBS networks that were out there.  You would simply dial up and connect to another machine and download some applications, if your modem was fast enough, I remember waiting all night to get a few small applications.

Anyway, he would let me get on these boards from his machine and I would chat a bit, they had these crude chat boards where you could post a message, but you would have to check back later for a response.

I graduated in 1989 from UT and was finally able to purchase my own machine, a 286 from that same friend of mine that build his own box.  He had started his own computer business selling clones.

The machine was great, I started playing around with it, there was no such thing as windows in those days, just a fancy shell that that would allow you to highlight the apps you wanted to run.  I had wordperfect, lotus 123 and corel draw on there, a few games, leisure suit larry and tetris of course, and that was about it.

My harddrive space was 20mb so space was tight.  I was always saving things to a tape drive I bought so I could free up space to run some new apps.  I finally got my hands on a copy of Windows 3.0 and the rest as they is history….

Fast forward another few years to 1993.  My brother and I had installed an entire network of new machines at my family’s business.  Complete with point of purchase terminals, scanners, order processing, accounting and shipping and receiving terminals.

I think we had over 17 in all.  We also built a few more personal machines for our own enjoyment.  My brother kept on hearing about this new thing going around called email. Neither one of us really understood it all, but my brother knew enough to know we needed to connect to a local ISP so we could send in receive these so called “emails”.

We didn’t have a browser of any kind, but we connected using a UNIX box and were able to send and receive emails finally.  My brother was quite accomplished as a UNIX admin and managed to write some scripts that would sort through our inventory every night and build html pages that would be served up for anyone to view…only problem was, nobody was really online yet.

We did manage to get some email orders though as we printed our email and domain name on the back of our main source of marketing, our 250 page color catalog that we mailed out every year.

Now, it’s 1994 and I had left the family business to pursue a job in sales as a rep in that same industry.  My brother sent me a copy of mozaic, netscape’s first browser, I wasn’t really sure what to do with it and after letting it sit around for months I finally loaded it up, got a dial up connection and started messing around on the internet for the first time.

In 1996 my wife and I moved to Austin Texas to open an educational supply store which we did in 1997.  I started dabbling with online sales at that time and had some success with my first website.  Unfortunately, after 3 years of giving it a go with the brick and mortar store, I decided to close.

I tried to focus my efforts solely online at that point but the fact that I was unemployed was no help, so I had to put things aside and go and find a real job.  This was during the tech bubble and I had friends getting rich left and right in .com companies.  So, I talked with some guys at a small start up and went with them in 1999 to do some basic SEO stuff, wasn’t really called that at the time, and account management.

After the bubble burst, I was laid off with about 60% of the company, and tried again to make a living online.  I was always able to make a little bit, enough to keep going, but not enough to make a back to the salt mines I went.  Keep in mind this the summer of 2001 and on Sep 10th, I decided I better get a job within the next 2 weeks, and then the next day, all hell broke loose.

Needless to say, I wasn’t able to find work for about 6 weeks after 9/11.  By then, I had all but abandoned my online efforts as money was very tight and the focus was on finding a job in this town after 1/2 the town had been laid off it seemed.  All my leads in the tech sector dried up so I was forced to take a job selling mobile homes of all things…I had a friend that made a ton of money doing that, so I figured I could stabilize a bit financially, and once the dust settled, I would be able to build up my online business.

Well, after a rough start, I soon was the top sales person in our office and was able to relax a bit and focus back on some online ventures.  It was pretty difficult though, as that industry was way behind the times, and my office didn’t even have an internet connection, so I installed a little dial up account in my office that I piggy backed on the company bill, so I could at least check email and do a little bit of work.

I was with that company until January of 2003, at which time the company went bankrupt after 50 years in the business and we all lost our jobs.

So here I was again, unemployed and trying to make a dime online, AdSense was not around at the time, that I knew of, so I was trying to sell products, anything that could make a buck.  It seemed I always under so much financial pressure, I could never focus completely on my online efforts, very frustrating indeed.

I sold educational supplies for a while as an independent rep but that didn’t work out either and then my wife got this job offer in Cincinnati that was too good to turn down.  So, we moved away in 2004 and I finally had the chance to focus on my online ventures.

I starting writing small utilities in Visual Basic 6 for the educational market and began to distribute them online.  I hadn’t had a site in a few years, but it didn’t take long to get back in the swing of things.  Well, turns out my wife’s boss was a tool and we were totally misled, the old bait and switch.

Luckily, we had not sold our house in Austin, so in the middle of the night, we packed up our things and hit the road, leaving a note for the tool telling him to, “take his job and shove it!”  Not really sure how smart that was, but it sure felt good at the time.

We found ourselves back in Austin with no jobs and no cash.  So, my online ventures suffered a bit again as we were forced to focus on bringing in some dollars.  My wife has had over 18 years of experience in the Insurance Industry as an underwriter so she was able to land a job pretty quickly.  After another few months I finally got a job as a teacher at a local elementary school.

Now that we both had jobs, and since my workday is over by 2pm, I was able to focus some energy back in the online world.  I continued to design, develop and code small applications for teachers and a few casual games to sell online using the “try before you buy” model and while trying to figure out how to market these apps, I discovered Adwords.  From there I discovered Adsense in early 2005, and then YPN.

I was blown away that these companies had decided to share in the revenue they made from advertisers and I just went Adsense crazy.  That led me to Digital Point, Webmasterworld, and all the SEO blogs out there.  I started building other sites and registering more domain names.  Which brings me to 2006.

Now I’m working on building affiliate relationships, websites, and landing pages to help drive that revenue and between Adsense, YPN, Affiliate Marketing, Shareware and Product sales, I’m finally piecing together a decent revenue stream.

I still teach, in fact I go back to school in a few weeks, but hope to be able to do this full time very soon.  We just had our first child in April of this year, so things have been crazy around here for the last few months, but I am able to work a bit and with the help of the blogs, forums and webmaster radio, which I listen to all day long, I feel really good about making it happen.

Well..there you go, kind of long, I know, but that’s what happened.  Oh, and what do I teach, do you ask? I’m a gym teacher, drop and give me 20!

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