I was watching an interview with Dan S. Kennedy yesterday on the internet. For those of you who have never heard of him, he is a legend in the direct marketing world and has sort of a cult following. Much of his philosophy and his ideas are now used by modern day internet marketers. Even though many of his books are getting sort of old now, they still offer great insights and are worth checking them out. You can get them on amazon for about five bucks each.
One of the most interesting points he brought up in the interview I was watching was the notion that businesses should focus on “assets over income”. What he meant by assets, however, was not hard assets like real estate or gold. He was essentially referring to client assets. For example, he used the example of how, when he does speaking engagements, he is less interested in the money he gets paid for speaking than he is in the number of clients he gains from such exposure. In his business, he calculated that each new client acquired at such speaking engagements meant an additional $3000 to his business over the next several years. He also applied his principles to restaurant businesses. He gave the example of how, by collecting client phone numbers and birth dates (for special promotions), he could predict how many additional clients and therefore revenue a given restaurant would gain over the next year on a per birthdate acquired basis.
Anyway, it is pretty neat stuff so I thought it would be worth mentioning here. Kennedy’s over-all take home point was that if you have a business now, you should try to focus not only on the revenue you are taking home this year, but that you should also simultaneously try to “deposit” money into your future bank account by doing something that will eventually translate into future customers and/or future revenue. Interestingly enough, when Kennedy started using these principles, attaining these assets was far more difficult. Just think how easy it is now whether you have your own business or work for someone else to accumulate email adresses. These are the assets that Kennedy was talking about. If you have email addresses of previous customers, you have an opportunity to convert them into repeat customers by staying in touch with them through periodic email contact and special offers. Even if you are doing something non-commercial like medicine, it is great way to remind patients of various health care issues and to remind them of tests and vaccinations they should have.
There are several email capture systems available including Mail Chimp, Constant contact, and Aweber. In case you are wondering, I use Aweber because I think it is easy to use. The bottom line is, if you are not collecting emails and doing periodic mailings, you are missing out on a great vehicle for ongoing business.
On a broader note, I think the idea of “assets over income” can be applied literally to the notion of hard assets. The first thing I thought about when Kennedy said these words was real estate investing. Essentially what you are doing when you purchase real estate is making an investment that yields both short and long term income. The short term income (and long term) are the passive income you receive when your rental income exceeds your expenses. At the same time, if you have a mortgage on your rental property, you are using rent that is paid to you in order to pay down your mortgage and build equity. So, in effect, you are doing exactly what Kennedy says to do–your putting something in the bank now and making sure that you are doing something to create income in the future.
These principles seem relatively simple and obvious, right? How do you or your business make sure that each business transaction today yields potential income in the future? How can you do better?