Work At Home Businesses That Guarantee Customers
Some Home Businesses Provide Customers and Income, Not Just a System
Jun 25, 2009
Multi-level (MLM), affiliate and network marketing opportunities abound. Get-rich-quick schemes seldom pan out for lack of actual customers and sales. Low owner commitment, unrealistic short term goals, and stiff competition may also contribute to failure. Here are some guidelines to ponder in deciding whether a stay-at-home opportunity will likely be lucrative, and have long-term viability:
How Are Customers Obtained?
All enterprises require a steady flow of new customers, to expand and to compensate for those who inevitably defect.
New clients are usually expensive for any business. A successful experienced marketer like Netflix spends between $29 and $44 for each new subscriber addition. Start-ups typically spend more. According to internal studies by a major insurance company the author of this article served with, on average each new customer cost the firm several hundred dollars.
Consider these customer-related issues and expenses:
- Does the offering company help attract customers or will that be solely the affiliate's obligation? A unique model called cooperative marketing generates a guaranteed customer base for business owners and affiliates by sharing the costs of client acquisition (infomercials, radio, print and TV ads) and retention (followup mailings and cross-promotional materials).
- Does it aggressively promote its products?
- Does the company provide marketing tools and materials? At what cost?
- What will it take to acquire a customer, either in terms of dollars or time spent?
- How will customer retention and its associated expenses be allocated: relationship management (CRM) costs, customer service, returns, complaints? Who will send clients follow-up and cross marketing materials (brochures, emails, special offers, new product announcements, etc)?
- Does the opportunity require one be a sales and marketing wizard? Will a large network of friends, or coworkers and family, play a major role in launching the home business? Will aggressive or pushy sales approaches be needed to succeed? If pestering everyone in one's circle of influence is distasteful, what other ways are there to expand the business?
- If customers think highly of products, and refer others to the business, do they (and the owner) reap any financial rewards?
- Are there sales quotas? Are there consequences if an affiliate does not achieve them?
- Must an affiliate purchase and inventory product minimums and resell or distribute them?
- Is the primary focus of the home business opportunity to recruit other affiliates (downlines) and expand a network? Products or services—not a multi-tier or level network—should be the focus of the business model.
- Are consultants and affiliates for the opportunity so numerous that they're inordinately competing with one another?
Is The Offering Company Sound and Legitimate?
If the business behind a home business is weak or burdened with its own problems, success will be difficult to obtain.
- How long has the offering company been in business? What is its track record?
- Does the company compete with its own affiliates by selling online or in stores?
- Is it ethical? Are its products or services legal and do they have good reputations?
- Does the company hide behind "teaser" ads that promise quick riches but don't reveal what the business is about? Beware vague opportunities that charge a fee to learn more.
- What are the company's beliefs and principles? What are its mission and organizational culture?
- Does it guide, support and train its members and affiliates?
- Is it a market leader or follower?
- Does it have a demonstrated, fine-tuned business system affiliates can implement with relative confidence of success?
- Does it guarantee its products?
- Is it creative, entrepreneurial, and growing?
- Is it leaning just on past successes, or is it introducing new items?
- Are its leadership teams reputable and experienced? Is management visionary and inspiring?
- What is the firm's financial condition? Is it in debt, or making a profit? Will it still be in business one, five and ten years from now?
- Is it easy to get unbiased information about the company and its products or services, and perform due diligence?
- Does it offer more than one level of financial participation? Can a new member or affiliate start out inexpensively and later expand the investment? Or are there only high-price take-it-or-leave-it financial commitments?
- Does the company use high pressure sales tactics and "closers" to convince prospects to sign up?
Evaluate a home based business opportunity as objectively as any financial or career proposition. Besides these issues, also consider product quality, operations, and affiliates' payout plan.
For information on cooperative marketing, please contact the author.
