The Hedgehog Concept has been around for a number of years in business circles. I was introduced to it when I read Jim Collin’s books Good To Great and Built To Last.

My blog aims to introduce business concepts that work in the business world to the blogging world so an article on the Hedgehog Concept fits perfectly with my blog’s message and the needs of my readers.

I was surprised a few years ago when I bought an internet marketing course (which will remain nameless!) which was essentially a series of videos from a conference aimed at internet marketers. I watched as they did a one hour session on the Hedgehog Concept and it appeared to be a totally new concept to the audience. I couldn’t believe that none of them had heard of it before!

If you’ve never heard of the Hedgehog Concept, then read through this article to get a feel for it, and then go and buy Good To Great by Jim Collins and learn more. It’s well worth it!

If you’ve never heard of Good To Great and Built To Last, they’re a series of books that are based on years of research of successful companies. The authors set out to determine what makes some companies perform substantially better than their peers over the long term. The Hedgehog Concept is one of the discoveries they made.

What is the Hedgehog Concept?

The concept is a way of developing your blogging (or business) strategy.

Jim Collins says it this way:

The essence of a Hedgehog Concept is to attain piercing clarity about how to produce the best long-term results, and then exercising the relentless discipline to say, “No thank you” to opportunities that fail the hedgehog test.

It looks at three concepts and how they mesh together:

1. What are you passionate about?
2. What can you be the best in the world at?
3. What drives your economic engine?

It’s best demonstrated in a diagram like this:

There’s a place where these three circles intersect, and that’s the place you want to be.

Let’s go through each of the three questions and learn more about the Hedgehog Principle.

What are you passionate about?

The number 1 piece of advice I give new bloggers is to blog about something they’re passionate about. You must be passionate about something!

For me, I love learning more about running successful businesses and passing that knowledge on to other people. I also enjoy playing guitar and I coach my son’s soccer team.

So I could blog about a number of things.

But what about you? Stop reading for a minute and write down the answer to this question:

What are you passionate about?

Now that you’ve done that, let’s move on to the next question.

What can you be the best in the world at?

This is where you begin to filter through your answers to the first question.

Whilst I love soccer and coaching my son’s team, I know I’ll never be the best in the world at it! But it is possible to break this passion down a bit and look at a niche within it. So I’ll never be as good as Sir Alex Ferguson or Arsene Wegner, but maybe I don’t need to compete in that niche. Perhaps there are opportunities to blog about coaching junior soccer teams or a particular age group?

When it comes to this blog, I knew right from the start that there were many blogs that aimed to teach others how to make money on the internet. It’s a saturated market! But within this market are many niches, and that’s the strategy I’ve chosen to take.

My niche is aimed at people who have blogs that are currently hobbies, but they’d like to turn them into successful businesses that provide sufficient income so the blog can support their chosen lifestyle. There’s a lot less competition in this market, and I’m well qualified to help people in this area.

So can I be the best in the world at it? That’s an aspirational goal and some people would feel that it’s only suitable for big companies to consider. The reality is that those big companies were once little companies who dreamed big.

So if the concept of ‘best in the world’ is a bit daunting for you, change it to ‘can I be recognised as an expert in this area?’ – it’s a bit simpler, but still serves the purpose.

Don’t underestimate the power of the niche! I’m working on an article about this, but differentiating your business is a great strategy to consider. And one of the best ways to differentiate is to find a niche and focus on it.

So again, stop what you’re doing, grab your notepad again and work through your list, looking a niches that you can be the best at.

Now it’s time to bring it together and move onto the third question in the Hedgehog Concept.

What drives your economic engine?

This question may not be relevant to you. If you only want to blog for the joy it brings you, and you have no desire to make money from it, then the answer here doesn’t matter. But if you want to make money from blogging, this question is very important.

Can you make money from it? That’s the question that needs to be answered.

The best thing about the internet is that it enables you to reach a huge amount of people globally. Are there enough bloggers in my hometown who want to turn their blog from a hobby into a business? I don’t think so. But I know that globally there are more than enough people who fit that criteria. So my blog ticks all three boxes. Yay!

This is a crucial question to answer. You need to be very clear about how you’ll make money from your blog.

And you need to be realistic about the answer. You must make sure that within your chosen niche there are enough people who are willing to buy whatever products you create that can help them. And, not only do you need to sell these products, but you need to make a profit in the process.

Go back to the Jim Collins quote I posted earlier – he talks about being able to say ‘no’ to things that fall outside the hedgehog concept. So in your business you need to sell products that are profitable and stay away from ones that are not (unless there’s a deliberate strategy there to up-sell those customers).

So, back to your pen and notepad and answer this question:

How will you make money from your chosen niche or idea?

How the Hedgehog Concept has helped me

I’ve used this blog as an example in this article to show you how I’ve applied the Hedgehog Concept to this business. But I’ve also applied it elsewhere.

Around 18 months ago I was thinking about this concept as I was engaging in one of my passions – playing guitar. It got me thinking about starting a blog on guitar playing. It’s something I’m passionate about, with my web marketing knowledge I’m sure I can become well known in the guitar blogging sphere, and I can make money from it. Note that I didn’t say I could be the best guitar player – that’s not the area I’m in. I do think I can become one of the best guitar bloggers – I’ve been playing for over 30 years, I can write and I know enough about internet marketing and social media to promote my blog.

So I’ve been working on a guitar blog. At the moment I’m just concentrating on adding content, but I’m also looking at product creation and promotion as a means to make money from it.

The point is, that playing guitar is something I love doing. If I could quit my job today, I’d happily sit at home in my home studio playing guitar and recording. I’m passionate about it.

• What are the things that you’re passionate about?
• Are you blogging about the right things, or do you need to stop doing things you’re not passionate about and change?

What do you think about the Hedgehog Concept? Please leave a comment below and let me know if Jim Collins’ Hedgehog Concept is something you can use as part of your blog strategy.

I read this great article today called ‘Cupcake Calamity‘ about a baker in the UK who had an offer in Groupon that worked a little too well!

Rachel Brown runs a business called Need A Cake that makes great looking cakes for all occasions. She wanted to grow her business, so decided to publish an offer on Groupon. This is where the trouble begins.

She offered a 75% discount on a box of her cupcakes – selling them for £6.50 instead of the usual price of £26. Here’s the problem – she was making a loss on every box she sold at the discounted price. The article I read said she was losing £2.50 per order.

As you can guess, she was swamped with orders and had to stop the Groupon deal once 8,500 orders were received. If you’re making a loss of £2.50 per order, that’s a lot of money you’ve just lost.

In addition, she had trouble keeping up with the demand and had to hire 25 extra staff to work around the clock making the cakes.

So, what can we learn from this story, and how does it apply to bloggers?

Lesson 1 – Understand your profit margins

Rachel seems to have understood that she was selling these boxes of cupcakes at a loss. I’ll cover the pros and cons of selling at a loss in the next point, but the important take-away here is that she knew what it cost her to produce her product.

The process of working out the true cost of a product can be a bit easier in a manufacturing environment like baking, where you’re very aware of the cost of the ingredients and the labour. It’s more difficult in blogging, where the cost is more time-based.

Whatever you do, make sure you’re aware of the importance of making a profit and understanding the true cost of your product.

photo credit: ms.Tea

Lesson 2 – Loss leaders are okay, but you need a strategy to make money

My local supermarket frequently has specials where it sells products at a loss. Why does it do this? To get people in the shop!

That’s the carrot they’re dangling in front of you to get you in their store. Once you’re in the store, you may buy the item that’s being sold at a loss, but you’ll probably buy more things that they’re making a nice profit on.

So, they’re happy to make a loss on one item because they know they offset that loss from the profits they make from other products.

They have a strategy to make money!

I have no idea why Rachel decided to sell her cupcakes at such a deep discount. I’m sure a 75% discount sounds great, but surely a 50% discount would also have been attractive, albeit to a smaller number of people.

What concerns me is that there appears to be no strategy in place to sell more products to these people at a profit.

You must have a strategic plan in your business that details how you will make money.

Lesson 3 – Build loyalty and repeat business

photo credit: scatteredView

From what I can understand, Rachel has no strategy to build loyalty from these customers.

The way I see it, she’s spent money to acquire these new customers, and at the moment she’s spent more than the profit she’s made from them. But that can change.

If you take a view of the lifetime value of a client, you’ll begin to understand that sometimes it’s ok to make an initial loss if that’s made up over the lifetime of a customer.

Rachel’s business has a great looking website and I understand these orders were lodged over the internet. The article says she sold 8,500 boxes of cupcakes, so now she has 8,500 email addresses from people who have bought once from her.

If I were her, I’d send an email up now saying thanks for your order. I’d then offer a follow up offer of 50% off the price of their next order. I’d be making a profit from this. The email costs nothing, unlike advertising through Groupon. The email is sent to hot prospects – people who’ve just made a purchase from you.

I’d then look to develop some sort of loyalty program – perhaps a discount after a certain number of purchases. Maybe she could use a Facebook page and feature pictures of her creations. What about a regular email newsletter that highlights her cakes and special offers?

The way I see it, she’s spent a significant amount of money on acquiring some new customers. Whilst she’s made a loss, she has the opportunity to increase the loyalty of these customers and make them into very profitable customers.

Lessons for Bloggers

You know that I’m passionate about helping bloggers turn their blogs from hobbies into businesses. To do that you need to think like a business.

• What are you currently doing that you’re making a loss on? For me, it’s writing articles like this that are free.
  
• Is there a strategy to make money? How will you make money from people attracted to ‘free’?
• If you make a mistake, how can you leverage it?

I’m interested in your feedback on this story. What other ways do you think Rachel can leverage this opportunity and begin to make money from it?

photo credit: clevercupcakes

You’re probably familiar about the bible story of David and Goliath. It’s one of those stories you learn about in Sunday school and never forget.

But what’s it got to do with blogging?

It’s not the obvious answer. This isn’t a post about how the little guy can take on the big guy and win. That’s boring. This post it about another partof the story.

In the story, David comes to bring lunch to his brothers and sees the fear that Goliath has placed in the hearts of the Israel soldiers. He decides to fight Goliath because no-one else is brave enough. The king thinks this is pretty cool and tells David to do it. David gets five smooth stones, puts one in his sling and kills Goliath.

Here’s the bit you probably didn’t learn about in Sunday school.

After David makes his decision to fight Goliath, he’s taken to King Saul. The king is so excited that David wants to fight that he offers him his armour. David tries it on but realises he can’t move around in it and declines the offer. He decides to fight Goliath his way – he doesn’t want to wear someone else’s armour.

Who’s Armour Are You Wearing?

I read this bit of the story years ago and it really spoke to me. As we go through life we are tempted to wear other people’s armour. It’s important to take a step back and think about what we’re doing and whether we want to wear other people’s armour, or wear our own.

In the blogging world a great example of this is the multitude of internet marketing courses that are available. Most of them make promises of easy money just by following a system that’s supposedly worked for someone else. Here’s what I’ve learnt over the past five years of blogging – what’s worked for someone else may not work for you.

I’ve been experimenting with PPC advertising for a few years and I’ve read a number of blogs and ebooks about how to do PPC effectively. But I’ve never stuck to just one method. I’ve taken ideas from different places and put them together to create something that works for me. I’m happy to tell others about the system that works for me, but I’d never suggest that the things that work for me are the best for them.

I’ve recently been experimenting with advertising on Facebook. I’ve read one e-book that suggested bidding in one way. The person who wrote the book says he’s been getting 1 penny clicks. Well, it didn’t work for me. The concept of Facebook ads is still something I’m pursuing and working on, but I’m trying other ways to do it. I’ll still do some of the things this person has suggested, but I’ll put the Allan twist on it to come up with something that works for me.

I’m a guitarist, and this concept comes easy to me. I’m used to listening to other guitarists and analysing what they’re playing and learning how to play it myself. But if that was all I did, I wouldn’t be a good player. I’d just be good at copying someone else’s style. I love John Mayer’s playing, and in the past I’ve spent time learning some of his songs. But then I’ve taken his ideas and incorporated them into my playing, along with ideas I’ve grabbed from Ian Moss, Jimi Hendrix, Larry Carlton, Mike Landau and many others. So instead of being a clone, I’m an original, with bits borrowed from many different guitarists.

In business my approach has been similar. When I did my MBA I learnt about a lot of different approaches to management. I then took the bits that I felt were suitable for me and I’ve used them over the past few years. I’ve also ignored some of the things I’ve learnt because they haven’t been relevant to me.

Over the years I’ve developed my own armour – a set of values and a way of doing business that I’m comfortable with. It doesn’t mean I’m not open to new ideas or that I’ve stopped learning. I’m always learning and changing things. But my core values remain the same, and rather than jumping around from one new fad to another, I’ve remained focussed on a few strategic tasks that get me closer to my goals.

How to wear your own armour

• Firstly, think about what armour you’re wearing. Why are you doing the things that you’re doing? What values do you have that aren’t really your values, they’re just things you’ve inherited from other people?
• Secondly, decide on the things you’re comfortable with. The interesting point in the David and Goliath story is that the king was very well-intentioned in his offer to David – he genuinely believed his armour would be helpful. David realised that whilst the concept was ok, it wasn’t right for him. In your life, have a think about the things you’re doing or saying that you really don’t identify with. Think of all the things you’ve learnt about blogging and question them. Look at how you run your blog and ask yourself ‘Is there a better way to do this’?
• Thirdly, take action and be prepared to fail sometimes. Life is one big experiment – learn from the little mistakes you make along the way.

What do you think about this concept of wearing your own armour rather than someone else’s? Is it relevant for you? Leave a comment below and let me know what you think.

Photo Credit EllenM

I often see questions on forums asking ‘How can I make $100,000 online’? Sometimes the amount of money in the question changes, and frequently the people asking the questions want to make it in one month. But the bottom line is that these questions are from people who are desperate to make money and have  believed the lie that it’s easy to make money online.

So, I thought I’d write an article with a headline that was deliberately provocative to promote some discussion and show you that it is possible to make money online, just usually not in the way that many people imagine.

It costs money to make money

Whilst it is relatively cheap to buy a domain and some hosting, you need more than that.

You need a strategy – a plan!

And you can’t have a plan unless you have some knowledge about the business you’re trying to run.

Forget the claims of making thousands of dollars online with no experience. To build any lasting online business, you need a plan and you need to know what you’re doing.

And there’s a cost involved in doing this. There’s a monetary cost – things like hosting your domain, buying a WordPress Theme, setting up an autoresponder etc, and there are non-monetary costs such as the time you’ll spend learning how to do things and making lots of mistakes.

If you’ve got a dream of making money online with no effort- forget it. It won’t happen.

You wouldn’t expect to open up a shop without some plan as to how you’ll make money, so don’t do it with your online business.

There are no shortcuts

Whilst I believe that marketing on the internet is a major business opportunity, it’s hard work.

• There’s no magic formula to get to number one on Google.
• You can’t make video go viral – people do that for you.
• Getting traffic to your site is hard work. You can write the best content, but people still need to find you.
• Once you get traffic to your site, getting them to comment is the next step.
• Blogging is time consuming. You’re not setting up an affiliate site and doing nothing – you’re constantly writing, commenting on other blogs, reading etc.
• There’s no magic formula for success (at least not one available for less than $1,997!).

So here’s how to make $100,000 online

OK – there are numerous ways to make money online – PPC advertising, flipping domains, selling Amazon products etc. This article isn’t about that.

If you’re like a lot of people you looked at the title and thought to yourself “I’d love to make $100,000 from blogging, but I can’t see how I’d be able to do it.”

The point of the article is this – it’s possible to make lots of money if you break it down into multiple ways of making smaller amounts of money.

I do this exercise with some of my consulting clients and it always gets them thinking about different ways to make money.

So, to make $100,000 online you need to:

• Find one client who will pay you $100,000.

If that’s too hard how about:

• Find two clients who’ll pay you $50,000.

OK, maybe that’s not possible….yet. How about these options:

• Find 10 clients who will pay $10,000.
• Find 20 clients who will pay $5,000
• Find 50 clients who will pay $2,000
• Find 100 clients who will pay $1,000
• Find 1,000 clients who will pay $100
• Find 2,000 clients who will pay $50
• Find 5,000 clients who will pay $20

You may even find this list a bit daunting at this stage in your blogging life. That’s fine. Your goal may not be to make $100,000. You may just want to make $1,000 this year. How will you do that?  Do you need to sell 50 products at $20 each? That’s slightly less than 1 a week. Is that possible?

What to sell

What you sell is almost as important as the quantities you need to sell.

I firmly believe that the way to add value as a blogger is to create your own products. Package up the knowledge that’s in your head and create products that are valuable to people.

I suggest you create two levels of products:

1. Lower cost products such as e-books, videos etc that cover particular topics. With these products most of your effort goes into creating them. Once they’re created, you don’t need to put in much more personal exertion other than promoting them.
2. Higher cost / tailored products. Examples include 1-on-1 consulting or group training. This is more specialised to the individual needs and allows you to differentiate your product more. Because it’s more differentiated, it becomes more valuable to your clients and you can charge more for it. There’s more effort involved in creating and delivering these products – for consulting work you need to physically deliver the training.

I’m also very comfortable in promoting other peoples’ products as an affiliate. If you haven’t got products to sell now, find ones you believe in and start selling them.

You can make $100,000

So, back to our examples above.

Maybe at this stage you don’t have a $50,000 product.

You possibly don’t even have a $5,000 product.

But you should be able to create a $20 product. Or find someone else’s product that you can sell as an affiliate.

Take some time to map out ideas for products that you can create at various price points. Although it may take you a few years to actually get them to market, it gives you a plan and a strategy, and enables you to break down your big goal into a series of small steps.

One of my online goals for this year is to substantially increase my online income over my previous year’s income. But if I do the same things I did last year to make money, I’ll end up with last year’s results.

My plan is to create a product that I can release later this year and sell directly via the blog, and through affiliates. This should provide the extra income I need to reach my revenue goals.

What about you?

Do you have other ideas on how to make $100,000 online.

Do you disagree with my view that there’s no easy way to internet riches?

Leave a comment below and let me know your thoughts.

Photo Credit Ed Callow

photo credit: wwarby

Do you have a blogging routine?

You may write regular blog posts, but are there other tasks that you also do regularly?

I’ve always maintained that blogging is like running a business. And no matter what business you’re in, there are some exciting parts to your job, and some not-so-glamorous parts to it.

And, like any business, there are some necessary things to do, that your clients may never see you doing.

So it is with blogging. Writing articles is only one facet.

Why You Need A Blogging Routine

In the middle of 2010 I started working harder on my blog. But I didn’t write more articles.

I sat back and took some time to decide on some important priorities for the rest of the year, and then wrote out a to-do list that I followed for the rest of the year.

This list helped me focus on the important tasks that I needed to do, so when I was sitting down at my computer, I was focussed on doing the important tasks, not just the easy ones.

The list helped me prioritise the things I was doing, and helped me see exactly what I needed to do each day, week and month.

No matter how much time you have in your week to blog, you’ll be more effective if you have a clear list of the things you want to achieve, and a regular routine.

My Blogging Routine

I’ll be honest here – I’m not able to do these things every day, but I do try.

If I can allocate an hour a day, here are the key things I do:

• Make 3 forum posts. I’m over on Warrior Forum a lot, but I’ll also post on other forums. The aim here is to help other people out by providing an answer or comment of value, and to receive a backlink from my forum signature.
• Comment on at least 3 blogs. I’ve got a list of blogs that I like to read and comment on. I’ve set up a category in Google Reader called ‘Blogs to Comment On’ and all their RSS feeds go there. When I see there’s a new post, I’ll head over to their site and comment. This helps me build relationships with other bloggers, I also learn a lot from reading their articles, and it provides backlinks to my site.
• Use Tweet Adder. Part of my Twitter strategy is to use a program called Tweet Adder. Tweet Adder helps me manage my followers, un-follow people who don’t follow me, and search for new followers. Part of my daily blogging routine is to have Tweet Adder running in the background, helping me grow my Twitter followers.
• Interact on Twitter. I’ll spend around 15-30 minutes a day on Twitter, usually split between the start and end of the day. Using HootSuite I’ll re-tweet interesting tweets, thank people for re-tweeting my tweets and interact with people.
• Plan and write articles. I’m always on the lookout for new article ideas. If I’m not writing an article, I’m researching for future articles. As part of my daily routine I’ll spend some time writing or planning and article. Included in this time is guest-posting – I’ll either be planning a guest post or researching guest-post ideas.

That’s it – that’s my simple daily routine. I print out a small sheet that’s divided up into 7 days, and lists the three main tasks of forum commenting, blog commenting and article writing under each day. I put a tick in each day’s section for every comment I make, and a tick in the article section for every 15 minutes I spend on article writing. This sheet helps me focus on the key tasks that I have to do daily, and helps me see my progress.

Weekly and Monthly Tasks

There’s other tasks that I do as well as what I’ve described above.

• Planning and tracking my progress. Since my blog is all about turning your blog into a business, you’d expect me to do some planning. I break my long term goals down into manageable tasks that I fit into my week. Every month I review my progress to my goals and make adjustments where necessary.
• Learning more. There’s a stack of internet marketing courses and books available and it’s very easy to get sidetracked into trying to watch or read them all, without ever actually doing anything. For this reason I allocate some time to my personal development, but I make sure my daily tasks are done first. Right now I’m going through a new internet marketing course (more on this in future weeks) and I’m reading a couple of interesting business books.
• Other projects. I’ve got a couple of other projects on the go at the moment. I’m starting a niche site aimed at selling affiliate products. I’m also running a couple of Pay Per Click (PPC) campaigns on Google. This week I also started planning my first e-book.

Your blogging routine will probably be a bit different to mine. You may have more (or less) time. You may have different goals and priorities. The purpose of this article is not for you to copy my routine, but to get you thinking about how you can become more focussed in the time that you allocate to your blog.

So what’s your blogging routine? What are the things that you view as being essential?

I wrote recently about three business strategies you can use for your blogging. Out of the three strategies I looked at, the differentiation strategy lends itself best to bloggers.  In this article I’ll look at the benefits of being able to differentiate yourself from your competitors.

Why differentiate?

As a blogger, we’re fortunate that we’re in a business where we can differentiate our products or services from others.

Let’s pretend we all sell TV’s, and pretend for a moment that there’s only one brand and one model of TV available. If we’re all selling the same thing, why will someone buy their TV from you instead of from me?  There are two approaches you can take.

1. Compete on price
2. Offer something extra

Competing on price erodes your profits. If you try and sell at a lower price to me, but we’re both buying the TV at the same wholesale price, then your profit per sale could be lower than mine (although this also depends on your costs).

Another option is to offer something extra, preferably something no-one else offers. For a TV, maybe it’s free delivery or set-up. Maybe it’s extra cables. Or maybe you can create a service or product that’s unique to your business.

You’ll see a lot of internet marketers take this approach when they’re selling a high price product as an affiliate. If you look at all the big guru product launches this year, all the major affiliates offered bonuses as an incentive to buy through their link. They couldn’t control the price, so they offered a unique bonus that was only available through their link.

If you can differentiate yourself from your competitors by offering something of value, then price becomes less of an issue in the purchasing decision.

How To Differentiate

If you’ve been following my blog for a while, you’ll know that part of my business planning process looks at who your target market is, what their issues or concerns are, and how your product or service meets their needs.

The great thing about service-based businesses like blogging is that no-one delivers the same service the same way.

A great example is Dave Navarro and Jeff Walker, both of whom sell products about how to launch products. They’re teaching people to do the same thing, but both approach it differently – they’ve differentiated.

Blogging is a great platform for differentiation because most bloggers have their individual personalities and voices which come across in their blogs. This is the first step of differentiation.

The next step is taking your message and making it unique to you. You want to blog about making money online? That’s fine, just do it differently to everyone else out there.

Have a good look at what your competitors are doing (or not doing) and see what opportunities exist in the marketplace.

How I Differentiate My Blog

I’ve chosen to target my blog at a specific target market – bloggers who want to turn their blog into a viable online business.

The make money online world is very crowded with lots of people saying the same things. I don’t feel it’s worthwhile trying to compete with such a broad market. For a while I looked at helping people who were involved in any form of internet marketing and wanted to build a sustainable business for themselves, but again that space is very crowded and it’s hard to stand out from the crowd.

I’ve decided it’s best to focus on helping bloggers implement business strategy ideas from the offline world that are proven to work.  There’s enough people out there who need my help, so the size of the market isn’t a problem.

And there’s not too many people out there who offer the service I offer.

I’m not about teaching people how to do Pay Per Click advertising, or how to do article marketing or podcasting. Those are all strategies I use with people, but they’re not the service I’m offering.

The service I offer is advice based on my years of experience as a financial planner and business coach. No-one else has the background that I have. This doesn’t mean that no-one else can do the things I do, it just means that I’ll do it differently to others.

Benefits of Differentiation

Differentiation helps you stand out from the crowd by offering something unique.

And when you offer something unique, the price becomes less relevant. And another thing happens – it becomes harder to compare your product or service to someone else’s.  Think back to the TV example. When we’re selling the same thing, it’s easier to compare offers – it’s primarily based on price.

When you sell something unique that no-one else offers, it’s harder to compare.

And differentiation helps you become an authority in your field. In the financial planning industry there are scores of examples of planners who specialise in one niche.  When a journalist is looking for comment on a topic specific to that niche, those planners get the phone calls.  You can do the same with your blogging. Become famous for something that no-one else is doing.

How Are You Different?

So what makes you different? Think hard about this to make sure it really is something that makes you different.

In the financial planning world a lot of planners tell me they differentiate their services by offering tailored advice. The problem with this is that everyone says they offer that, so it becomes something that’s expected, not something unique. Maybe you have a unique way to deliver that tailored advice – that could be a point of differentiation.

In the retail sector you can differentiate by offering different products i.e. a fruit shop offering locally grown produce as a way to differentiate itself from the larger supermarkets.

As a blogger you can differentiate by offering unique content, products and services.

How do you differentiate? Leave a comment below and let’s talk about different strategies we can use to stand out from the crowd.

photo credit: the sea the sea

When I was studying my MBA I was introduced to the ideas of Michael Porter who wrote a book called Competitive Strategy. In this article I’ll look at one of the main concepts from that book – the three types of Competitive Strategy.

Firstly, I’ll give a quick overview of the book. Porter places a lot of emphasis on doing your research on your competitors and the environment your business exists in. By looking externally and knowing about the competitive factors that are present in your markets, you can make better decisions about your strategies.

Porter suggests there are three types of competitive strategies your business can adopt:

1. Overall cost leadership
2. Differentiation, and
3. Focus

Overall Cost Leadership

This is a pretty simple strategy – create a product with low costs so you can make more profit. You can choose to sell it with a low price, or at the same price as everyone else, but make more profit on the sales.

You see this a lot in retail markets, particularly where the product being sold is a common, generic product. Think about television sets. Go into any retailer and look at their range of large screen TVs.  You’ll seen TVs with the same size screen at a range of different price points. Some manufacturers will take a low-cost position in this market, creating the product for a lower cost then their competitors and usually selling it at a lower price.

The dangers of trying a low-cost strategy is the risk of someone else coming in and undercutting your prices or cost structure.

This type of strategy can work effectively, but in my opinion the other two strategies are more suited to bloggers looking to build an online business.

Differentiation

I like the Differentiation strategy. It’s all about creating something unique that sets you apart from your competitors. I believe blogging gives you an amazing opportunity to do this.

Differentiation helps you on two levels – by being unique you’re creating a group of loyal fans – your tribe. This brand loyalty makes them less likely to switch to someone else. Also, by providing unique products or services you can command a higher profit margin – if you’ve got a product that can only be bought from you, you can set the price!

If you sell a generic product that has a lot of competition and alternate products, you’re more likely to compete on price. If you can differentiate and create something that’s different from everything else that’s out there you become less price-driven.

Focus

In a focus strategy, you concentrate on a particular sector. You narrow your market by zeroing in on a particular group.

The focus can be geographic (in a particular town or region), it can be based on certain industries or it can be based on demographics i.e. people interested in knitting.

You can adapt the Focus strategy to either differentiate within your niche, or take a low-cost position within the niche.

I see this in the financial planning world where planners focus on a particular target market i.e. retirees. By specialising in this area the planner is seen as an expert in that niche. Because of this they can command higher prices and can do the work more efficiently.

Competitive Strategy for Bloggers

So how do you apply this to your blogging?

As part of the business planning process I help bloggers analyse the markets they’re in, and look at what their competitors are doing. When you define who your target market is, what their issues or concerns are, and how your product meets their needs, you’re in a good position to look at the appropriate strategy.

I believe that blogging makes it easy to make your services or products unique – every blogger has a different (and unique) opinion or experience. Because of this, I’m not a fan of taking a low cost approach over the long term.

For many bloggers, having a Focus strategy can be a powerful approach to growing your business. Assuming you have a product that can be sold worldwide, there’s probably enough people in your target-market in the world who could purchase your product.

A great example is guitar lessons. Targeting the broad ‘guitar lessons’ niche may be a bit hard – there’s already plenty of people in that area. But maybe you can focus on a particular area – maybe ‘Blues Guitar Lessons’.  There’s a lot less competition in this market and it’s easier to become seen as an authority in this area.

Also, by specialising in this niche you don’t need to become an expert in other guitar styles and you can instead focus all your efforts in learning (and teaching) this one style.

A Differentiation strategy is also suitable for bloggers. If your niche is still broad, think about how you can set yourself apart from your competitors. We take for granted our individual skills and talents and don’t spend enough time thinking about ways to use them to differentiate ourselves.

Applying The Strategies To Your Blog

Take some time to think about the concepts I’ve introduced here and look at how you can apply them to your blog.

Do you know enough about your niche to be able to decide on a strategy, or do you need to do more competitive analysis?

Have you been competing on price rather than differentiating yourself?

Let me know what you think by leaving a comment below. Also, I recommend the Competitive Strategy book by Michael Porter – if this article has been valuable you’ll probably love the book.

Photo Credit - hikingartist/

What tools do you need? Image: hmboo

If you’re interested in internet marketing you’ve probably heard a fair bit about Kajabi over the past few weeks. I know I’ve received a lot of emails from people suggesting I head over to the Kajabi site and take up the free trial.

What is Kajabi?

Kajabi is a system from Andy Jenkins, formally of Stompernet. From what I understand it’s a turnkey platform that allows you to set up product launches using video and blogs, covers the whole payment process, and provides a back end that enables you to set up membership sites and forums. Within these sites you can schedule the release of videos and articles, so you could set up an online course and schedule the lessons at regular intervals.

Kajabi has been used in a bunch of high-profile product launches over this year – Frank Kern, Jeff Walker, and Andy’s own Video Boss to name a few.

Do You Need Kajabi?

Here’s the problem as I see it.

A lot of people are getting excited about the Kajabi launch, probably for the wrong reasons. I read one post on the Kajabi blog where the person said something like ‘I can’t wait to get Kajabi so I can produce videos like yours’. Now, Andy Jenkins produces great looking videos, but that’s what he does for a living. He’s good at it.

Let me spell this out for you…

Buying Kajabi won’t help you make great videos.

Kajabi is just a tool, like WordPress. It enables you to do things.

So the real question is not ‘Do I need Kajabi’.

The real question is ‘What tools do I need to achieve my business strategy’?

What Tools Do You Need?

If you’ve read my articles before, you’ll know I’m a big believer in having clear goals and strategies for your blog.

Having goals and strategies stops you from getting distracted (Kajabi anyone!).

The problem I see in the internet marketing world is the number of people who jump from the latest fad to the next, and don’t stop to think about what’s right for them.

And they get so caught up in learning about the latest fad, that they don’t implement anything.

So, take a deep breath and think for a minute.

What are your top 5 goals for your blog?

What are the strategies you’re going to do to achieve those goals?

What tools and what tactics will you need to work on to achieve your goals?

Perhaps it’s simple things like getting traffic to your blog, learning how to write better or learning more about keyword research.

Maybe you’re at a more advanced stage where you’re developing new products and looking for JV partners.

Whatever stage of blogging you’re at, remember this:

Always think about what tool is required for the job, instead of trying to make up a job to fit the tool.

There’s a phrase I heard many years ago – to a man with a hammer, everything looks like a nail.

And this is the problem in the internet marketing world. We’ve got it the wrong way around.  We buy products and then try and build a business around them.

Try the reverse.

Work out what you need for your business, and see what products suit.

You may find that Kajabi fits perfectly. But if you don’t have a product launch strategy, or content for your members site, Kajabi isn’t the magic pill. It won’t do the hard work for you.

You can’t polish a turd. You can dress it up, but it’s still a turd.

Same with Kajabi.  If you don’t have a decent product, Kajabi will be an expensive mistake. It’ll make your turd look nice, but it’s still a turd.

And there are other tools out there that can do many of the things Kajabi does.

So, have a think about your plans for your blog.

What are your goals, strategies and tactics for your blog?

What tools or teaching will you need to achieve them?

Once you’ve answered these questions, you can go looking for the things that are right for you.

What do you think?

Do you need Kajabi? Have you been guilty of buying tools that you don’t need?

Leave a comment below and let me know.

photo credit: Kyle May

I’ve been spending a lot of time this month updating the web page for my financial planning business.  I’ve decided to move it completely across to WordPress using the Headway theme.  This should help me with the SEO, and makes it a lot easier for me to add extra pages when I need to.

I’ve also been speaking with a couple of other financial planners about web sites.  Usually the conversation goes something like this:

• They start off by telling me they have an existing web site but they don’t like it.  Usually this is a templated web site provided by the financial planning business they’re associated with.
• They want to build a web site that’s more personalised.
• If they do this, they’ll magically get more clients overnight.

I then have to explain to them that it’s not that easy!

I’ve learnt a lot over the past three years about marketing on the internet.  I’ve set up a few blogs, and worked hard to get my financial planning website ranking well for certain keywords. But getting traffic to your site is only one piece of the puzzle.

When people come to your site, what do you want them to do?

This comes back to the post title – What is the purpose of your web site? When I ask planners this question, many of them can’t answer it.

When it comes to my financial planning website, I know exactly what the purpose of the site is and what I want people to do.

The web site exists for two reasons:

1. To stay connected with existing clients and pass on information to them.
2. To provide potential new clients with enough information on our business so they pick up the phone and call me to make an appointment.

So when people come to our website, our phone number is very prominently displayed on every page.  At the end of every article is a call to action, suggesting that they call us to make an appointment.  The website message is geared around providing information, but encouraging people to take the next step and contact me.

That’s Plan A. Plan B comes into play of people don’t want to pick up the phone at that point. If people don’t want to make an appointment, that’s fine, but I’d like to be able to keep in touch with them.  To do this I have a sign-up box on every page for our Aweber email list. When people sign up we’ll send them regular, topical information that helps them learn more about our business. As they learn more about us, hopefully they’ll get in touch with us when they’re ready to get financial advice.

But the important thing is that the web site provides relevant content to our readers. And they can see that it’s updated regularly so they need to come back.

So when I speak with financial planners about their websites, I want to know what the purpose of their site is. A site built to generate leads could look very different to one that’s aimed at existing clients.

So what’s the purpose of your web site?

Are you blogging because you enjoy it, and just want to share information with people.  Profit may not be your main goal.

On the other hand are you trying to make a living from blogging and marketing on the internet?  The purpose of your web site may be quite different.

There’s no one ‘right’ answer – it’s whatever is right for you.  The important thing is to take the time to decide on why your website exists.

Leave a comment below and let me know what the purpose of your website is.