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Marketing - creating need and the inner circle strategy

In a previous article, I summarized the mindset of highly successful web marketers and ecommerce site owners engaged in small business ventures. In this article we'll examine some of the "killer" strategies some use to further develop a successful online businesses into truly amazing money-makers. 

Creating needs and starting trends

The movers and shakers of the ecommerce world don't just address needs, they create them.

I've seen a many very successful marketers/site owners use this approach and in a nutshell, here's how it works:

  • They build up a client base with a product that addresses a real need.

  • It gets to a point where those current clients have had their needs addressed or the revenue flow isn't allowing the merchant to continue to build their business.

  • Trust has been established between client and merchant through quality service and support over a period of time.

  • A new product is introduced, or a repackaged existing product available elsewhere to create a new need, even if the need doesn't really exist - yet.

  • By relaying the new product to their client base as something that is required and will definitely assist them in whatever purpose, sales are generated purely upon trust.

  • As more people purchase the product, others notice and a trend is begun that has the potential to spread outside of the current client base. The non-existent need the product addresses now becomes real.

A good example of "creating need" are the plethora of products related to search engine optimization. Good SEO boils down to a number of basic, ethical optimization strategies, but the market is continually bombarded with "bleeding edge" tools and services to help you gain a number 1 ranking.

Many who create and market these products know that these tools have a very limited shelf life - as more people buy them and employ them, the less effective they become. Search engine companies wisen up to the strategies and tweak their algorithms to dampen the effects of these tools. Then we're back to the basic principles of search engine optimization again. 

The short term success the tool brings pales into insignificance in comparison to if the client had instead just focused on the basics of optimization and steadily built traffic. But because the tool *did* work for a while and traffic has now dropped, the client is then receptive again for the next tool that comes along that the vendor offers. 

As the client is always looking for the "next big thing" and shortcuts, and implicitly trusts the vendor to provide it, the client never actually gets around to trying the basics and discovering that those strategies work equally as well - and for longer. The shortcuts they've purchased are no longer a time saver in reality as they need to change these tools continuously.

Need to learn about  search engine ranking and optimization strategies or want to monitor the SEO health of your web sites (and those of your competitors)? One of the most comprehensive set of online search engine optimization tools around -  SEOMOZ.

The inner circle strategy

In order to expand a client base, competitor merchants within an industry will often collaborate - benefiting each other financially. Here's how what I call "The Inner Circle strategy" works, again using the example of web marketing tools, products and services.

The inner circle strategy example

Marketing Tool Vendor A develops a product and introduces it to his client base, not only to sell to them directly, but also inciting them to promote it to others via the in-house affiliate program. At the same time he approaches Marketing Tool Vendor B and offers a generous revenue share if Vendor B will introduce the product to his client list.

Vendor B then advertises it to his clients in such a way:

"I've just heard from my good buddy A, a highly successful marketer, who has developed the most amazing marketing tool known to mankind. I used it last week and it's generated 8 million visitors to my site in the last 10 seconds - this has got to be seen to be believed! My buddy has generated x dollars from using this during the first month. I told him that he is crazy to want to release it to others; but as you are one of my clients, I can get you a special discount.. blah blah blah. Act quickly before he changes his mind!"

.. well, something similar anyway - I'm sure you've seen blurbs like this hit your inbox. Using this strategy, Vendor A doesn't have to struggle to achieve credibility with Vendor B's clients. Vendor B has done it for him. In these cases, if you go out to Marketing Tool Vendor A's site, you'll also see a testimonial from Marketing Tool Vendor B there.

Then, Marketing Tool Vendor C may pay a visit to Vendor A's site, notice the new product, also notice Vendor B extolling it's virtues. Vendor C thinks to himself "hmm, Vendor A has a new tool, Vendor B is promoting it, therefore there's dollars to be made if I promote it to my clients as well".

This process then repeats itself, until dozens of  Marketing Tool Vendors are promoting the product and offering testimonials on Vendor A's site. Given this much coverage from industry identities, a trend is generated and sales skyrocket :). 

Of course, the ones who benefit the most from this tool are The Inner Circle, particularly Vendor A. Because so many Vendors are linking to A's site, A's search engine rankings also climb, given Vendor A a swathe of extra coverage, sales and affiliate signups at no real cost to him whatsoever.

After Vendor A's product has ended it's high volume sales life cycle, Vendor B comes up with a new product and the cycle repeats with all the "usual suspects" involved. Skeptical? Run a few searches on marketing tools targeting small business and you'll see what I mean. 

This is a classic example of why, in some industries, your "competitor" shouldn't be seen as a threat, but a great resource. Don't get too paranoid about your competitors, get to know them on a fairly friendly basis if you can. The synergy can really pay off.

Similar strategies are also used widely in the upper echelons of MLM and franchising in the bricks and mortar world. It sounds a little unethical, but if the product does deliver results then it just boils down to good business and marketing. 

There you go - these are a couple strategies of how some of these guys make the "X thousand dollars in X days while they sleep" - and I haven't charged you a cent for the knowledge :). But before you try anything like this, you first need to build a client base and to have those clients trust you. As you can imagine, the Inner Circle strategy is *very* powerful and wide open to abuse, so please use it wisely. If you've worked hard to gain credibility, don't blow it for the sake of a few fast bucks.

Further learning resources

Marketing: traits of successful small online business entrepreneurs 

Successful affiliate marketing

Developing an ecommerce site - part 1

Developing an ecommerce site - part 2 

Michael Bloch
Taming the Beast
Tutorials, web content, tools and software.
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