The Secret to Getting Rich during a Gold Rush

Why do so many people get into internet marketing and try to sell you systems to do internet marketing?  The reason lies in the answer to one simple question.

Who got rich during the California gold rush era? HINT: it wasn’t the gold miners.  The answer is: The people who sold the miners the tools and supplies they needed.

Millions of dollars of gold were extracted and the people who got rich were the ones who sold shovels and the other essentials that miners needed to find the gold.  This was especially true for the store owners who arrived at the California Gold Rush first.  Other successful entrepreneurs were people who provided services and other essentials the gold miners needed such as restaurants, saloons and hotels.

In a real sense the reason that so many people try to sell tools is because they are doing the number one thing that successful marketers do.  They are providing a solution to a problem.  If you are a marketer or a fledgling marketer trying to make money on the internet you are the proverbial miner looking for gold.  The internet marketer trying to sell you the tools to find that gold is following a proven method for helping people and being successful.

What happens though when there are, not one, not ten, but hundreds of people selling shovels?  The market becomes flooded with shovels.  There are so many people selling shovels that a price war breaks out.  Soon you can buy shovels for as little as $1.  That’s great for the miners.  They don’t care if the shovel is the best shovel ever made.  All they care about is “can you dig with this shovel?”  And “When I am 40 miles from town will this shovel break?”    So, the marketers with really good shovels can charge $2 or $3 for a shovel if they can convince the miner that the shovel won’t break. Otherwise you are stuck trying to make a profit on something you may not be able sell.

That’s the state of internet marketing today.  Lots of people selling shovels.  The ones that can convince the miners that they have the best shovels might be making a profit.  But, don’t bet on it.   Unless…. They sell more than shovels.

Yes, sir I understand you need a shovel.  Have you got a pick?  Why do you need a pick?  Because sir, when you dig here in California the dirt has rocks; BIG rocks.  Rocks that no shovel can move unless you loosen them up with a pick first.  You can dig for hours and break your back or… You can spend a few minutes using this here pick and loosen that rock up before its time for your next coffee break.   

Excuse me sir… How are you going to move all that dirt you are digging up away from the hole so it doesn’t get in your way?  You don’t know?  Allow me to assist you!  I have the finest wheel barrows in Gold Rush Land.  They are guaranteed to work reliably night and day to move that dirt out of your way faster so you can find gold.  And because you are already buying a shovel, a pick, and other items I can give you a really good discount on the wheelbarrow.   

You see where this is going don’t you?  If you want to sell something in a crowded field you have to create a higher value for your product or service than the other shovel seller offers.

Remember the #1 Secret to Internet Success: Find a Problem PLUS Provide the Solution PLUS tell people about it. 

How To Create Value

Offer to replace your product at no charge if it ever breaks.   No questions asked.  It breaks. You replace it.  Imagine that.  Costco did that for me with a pair of eyeglasses they sold me.  One of the ear pieces broke off.  I took the eyeglasses in and showed them the broken ear piece.  The customer service guy replaced the frames and had me on my way in less than 30 minutes.  No questions asked.  They added value to their product.   I will probably always buy my eyeglasses from Costco Optical.

Offer a money back guarantee.  One thing you can do with an information product is offer to refund the person’s money no matter how long it’s been since they bought it.  I have even seen some marketers offer to pay more than you paid if you are not 100% satisfied.  That sounds like a bad idea until you realize that the return rate for a good well written information product is very low.  The return on the perceived value of your product is bigger than the minimal refund rate you get.  Offering to pay more than you originally paid for something creates a true sense of increased value.

Yet, not many marketers do this.  They fear that too many people will take advantage of the cost plus guarantee.  Or perhaps they worry that their product is not really worth what they say it is.   Human nature also plays a part.  Psychologically, it’s difficult to re-imburse people more than they paid you for something.   This is why it’s such an effective tool.  You will stand out when you use this method.

Offer free shipping.  Free shipping is a really good value-added service; especially when shipping costs are going up.  The instinctive response to increased shipping costs for some marketers is to pass on those costs to the customer.  But, if you want to stand out in a crowded field then doing what everyone else is doing isn’t the way to do it.

Note:  Free Shipping is almost the standard these days on the internet.   Not offering free shipping will cause you to stand out. But, not in a good way.   You can try different ways of offering shipping options that let you stand out and get the sale.  Amazon, for example, offers gift cards or credits towards digital products if you are willing to accept slower shipping options.   You might see what your competitors are doing and tailor your offer to be better than theirs.  For example, if your competitors are offering free shipping on all purchases over $75 you might consider free shipping on all purchases over $50.

Give them a bonus product.  If you are selling them a shovel you might throw in an inexpensive brush for cleaning the shovel with.  Or if they buy the shovel, the pick and the wheelbarrow give them the pick and shovel sharpener for free or even at a greatly reduced price.   Have you noticed how all the internet marketers today are throwing in a free report or something of value as part of their offer.  They are giving you a bonus product. Some of them are giving away 5,6, or even 10 extra bonuses with their original product.  It’s not uncommon for them to package a set of bonuses worth several hundred dollars to entice you to buy their $39 product.

Offer additional Savings.  Buy One Get One or BOGO is a really great way to increase sales.  One popular vitamin shop always has some variation of BOGO going on.  Buy One Vitamin Product at regular price and get the second one for 50% off is a really frequent promotion they offer.  I usually wait to get my multi-vitamins when they have a BOGO on them.   The value goes up because I am buying more product for less money.  And they make a point of pointing out how much money I saved on the sales receipt.  It never hurts to make a point of telling the customer how much value they are receiving for doing business with you.

Gold Nugget Tip:  If you are in a crowded field do something to stand out and give more than the other marketers are giving.  Create value.  Prove that you have the best shovels.   Give more or do more than your competitors do.  Don’t be afraid to tell your clients how much they are saving or how much the additional benefits are worth. 

Additional Ways To Create Value

There are lot of different ways you can increase the value of what you are selling without increasing your costs and cutting your profits.

If you are an expert in your field you can offer a free 30 or 60-minute mentoring session to the first 25 people who buy your product or service.

You can offer a basic product, a plus product, and a premium product.  For example, your basic product might come with 5-10 features and benefits and be modestly priced at $7.99.  A plus product can have between 15-20 products and sell for $14.99.  Fill your premium product with 30,40 or even 50 benefits and features and sell it for $29.99.  If you consider that the basic product has 10 features you are pricing it at about eighty cents per feature.  Be sure to point out that the premium product has 50 benefits that are only sixty cents each!

Example:  Cable Television Bundles

For the perfect example of how to use a tiered upselling system to sell more and increase your profits look no farther than your local cable company.  You can buy basic cable for around $40 per month.  But, if you want HBO, Internet Service, sports channels, and more then get ready to buy the bundle that costs $150.   I am not trying to suggest it’s a bad deal.  You actually save a considerable amount of money on the package vs buying each channel or service individually.

You can bundle several products together and create a package deal that creates a real value for your clients.    Using our gold miner analogy, the idea is to sell them the shovel, a shovel sharpener, shovel brush, and a shovel carrying case.

Another way to create bundles is to sell tools that complement each other.  Sell the shovel, the pick, the wheelbarrow, and the dynamite together.   A shovel is $10.  A package with all the tools you need is $100.   Sure, you make $5 on every shovel.  But, the bundle of tools earns you $25 on every sale.  And it doesn’t take 5x the effort to sell the bundle.

Another way to stand out from the crowd is to offer a “Turn Key” solution.  You are the expert on how to set up websites that sell Blue Widgets.  You have a video training series that shows people how to build a website selling Blue Widgets.   You include an upsell offer in the videos that is a service that builds the website for them and lets them run the site, promote the site, and sell Blue Widgets.  You might even offer an ongoing service that backs up the site, keeps software updated, and lets the site be totally maintenance free for them.  It’s a “Turn Key” operation.  All they have to do is buy the site/product/service, turn the key, and drive away.

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