New Revenue from Old Customers

After tapping the Internet newbie market and diverting a stream of your competitors' subscribers into your pond, your next road to growth is upping your average ticket price.

by Doug McDonald Director, Affiliate Programs, The TUCOWS Network courtesy of HowToSell.net [November 12, 1999]

With your subscriber-acquisition rate soaring due to your flawless execution of marketing and sales programs to capture both the new user market and to drive your competitors' churn through the roof, it's time to address the issue of how to grow your revenues from within. It's easier to make a new customer out of an old customer than it is to go find yourself a new one. This adage has held true through generations and across innumerable industries and operations. The Internet is no different.

One of the dangers you must always be aware of is wandering so far from your core business (and revenues) that you lose sight of them. Relying on your business plan to guide your core activities will help keep you on track, but a close eye on the books will keep you keenly focussed on it as well. With this in mind, lets look at my favorite sources for additional and incremental revenues.

Affiliate programs
Given my day job, I'd be remiss if I didn't start with affiliate programs. I believe that if your customers are going to spend their money on the Internet, you should earn a commission or referral fee for some part of that transaction, if you can. If they're going to buy it anyway, they might as well buy it from or through you.

Ranging from the Amazon-like affiliate programs, where the revenue stream is easily identified, tracked, or otherwise monitored, to some of the less straightforward programs, where earnings or savings are somewhat less predictable or quantified, all affiliate programs have merit.

Since you are supposed to know everything about the Internet, your customers will attach a higher value to the services and retailers that you endorse. Consequently, you must be sure to do proper research on any companies that you wish to partner with. There's nothing wrong with having multiple affiliate programs. Even having some that are overlapping is not a bad thing. But blindly adding a page full of links and images for every affiliate program you can find is not the answer.

A link to every online toy store just in time for the holidays is not a good thing if half of them can't handle their traffic and don't fill your customers' orders. These problems would of course be your fault in your customers' eyes. This was a problem with some of the online stores last holiday season. I suspect that history is unlikely to repeat itself with the larger retail operations this year, but be mindful of the prospective risks and perceived liabilities.

Stretching existing services
Perhaps the easiest and most natural first deployment of additional revenue generating services is to focus on expanding your current core business. Additional service offerings might include multiple email accounts, a Web mail option, or national and international roaming accounts. All are sources of incremental revenue increases—in addition to being valued services.

Marketing additional Web space for those customers who just want to put together a large and image-intensive site is pretty easily done, and I suspect that most of you are already doing something along these lines. But how many of you are offering multiple smaller hosting spaces instead of the traditional single x-Mbyte Web space allotment? Combined with multiple email accounts—for a small additional fee of course—each member of the family could not only have their own email address but could also have there own Web site. That is an excellent additional service to offer your "family" accounts.

On top of these generic Web-space options and upgrades you can add and promote your domain-name registration and Web-design services. Keep in mind that almost all your consumer subscribers also have a day job. Following the statistics for North America at least, 80 percent of them work for a small business. Given that information, it's not unreasonable to assume that a good proportion of them will have at least the opportunity to make recommendations for providers and hosting solutions. If you don't handle your own Web design-don't have the infrastructure to handle these requests or the desire to expand to include it—outsource it for a referral fee or commission. This gets back to the simple philosophy that if your customers are going to spend money on it anyway, you might as well try to get some of it to stick to you.

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