The Passing Lane: Passing the Competition Online by Marnie Perhson

Issue #5 Monday, Oct. 12,1998

About the Author:

Marnie Perhson
Marnie Pehrson, founder of C.E.S. Business Consultants and the
International Association of Computer Professionals, develops products that help computer professionals market and manage their businesses.

She is author of
How to Run a Successful Computer Training Business,

How to Get & Keep Customers for Your Computer-based Business


and
Keeping Your Sanity in a Home Business.

Marnie also develops business plans, marketing strategies, financial projections, & proposals for Internet projects. Her plans and strategies have garnered clients an average of $100,000 each in seed capital.

Marnie lives on a Georgia farm with her husband and their six children.

Contact:
C.E.S. Business Consultants
Ringgold, Georgia
http://www.pwgroup.com
mailto:marniep@pwgroup.com
TEL: 706-866-2295

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Model the Best for Web Success

Most of us plod along with our Web sites using them to gather leads, disseminate information, or sell products/services. We may reach our goals in a meager to moderate way. But what about sites that generate millions or even billions in revenue? How do they do it? There are several factors that come into play: product type, speed to market, financial backing, strategic focus, technical excellence, outstanding management, etc.

Even if we do not have financial funding or technical expertise, there are two key elements of the best that we can analyze and mimic -- their revenue and marketing models.

Revenue Models

A revenue model tells us how the site makes money. Here are five major revenue models used:

  • Direct Sales Model - this model is probably the most popular model for the average Web site owner. Revenue is generated by selling products or services to visitors.
  • Advertising Model - this is a common model used for high traffic Web sites. It includes selling banner ads, classified ads, sponsor ads, pop-up ads, etc. Revenue at Yahoo, Webcrawler, and Geocities is generated this way.
  • Pay for Content Model - this is where visitors pay for viewing information. Many find difficulty using this model successfully, but a few sites are generating profits this way: Wall Street Journal and Dun & Bradstreet. I also use this model with success on the International Association of Computer Professionals.
  • Content Provider Model - these sites/services usually stream content (i.e. news stories, articles, horoscopes, etc.) directly onto other Web sites for a monthly licensing fee. For example, Reuters is a content provider for My Excite.
  • Private Label Model - sites or services that generate their revenue in this way develop personalized versions of their Internet tools, sites, or Web technology for other Web site owners and charge a licensing fee for their development and/or use.

Marketing Models

A marketing model is the way the products/services are promoted. Four common marketing models follow:

  • Traditional Marketing Model - this model includes methods you're probably using like e-mail, banner advertising, e-zine advertising, direct mail, word of mouth, press releases, and print advertising.
  • Affiliate Model - this is where you build a network of other Web sites that resell for you. This may be in the form of a custom-designed e-commerce store that lets people order your products while they stay on another site. Or it can be a simple hyperlink to a form on your site that gives the sending site credit for the sale. This is the model used by Digital River (for software), Amazon (for books), Music Boulevard (for music), and LearningUniversity (for software training).
  • Point System Model - this is a system where visitors or members are paid in points for viewing Web sites, viewing ads, or filling out surveys. The points earn visitors cash, free services, or discounts on products and services. Prolaunch, Juno, and CyberGold employ this model.
  • Free Web Site Model - sites using this model give people free web sites in order to build traffic or sell products. For example, Geocities offers free web sites and then shows banner ads or pop-up ads on all "free" web sites.

Successful Web sites combine different revenue and marketing models to produce results. For example, Amazon uses the Affiliate Marketing and Traditional Marketing Models combined with the Direct Sales Revenue Model to sell books. Geocities uses the Free Web Site Marketing Model combined with an Advertising Revenue Model. On my Web site, I combine the Direct Sales, Pay for Content and Advertising Revenue Models with Traditional Direct Marketing.

Study these models and decide which combinations will work best for you. By combining one or more revenue models with one or more marketing models, you can leverage your Web site to produce greater results than ever before.


Text Copyright © 1998, Marnie Pehrson. Part of the original Sideroad.
The new Sideroad is now receiving traffic at www.sideroad.com.