Revisiting social media: Reddit

Picking up where I left off, "Learning to market all over again," I am again exploring how social media could be useful to me and possibly to you. Specifically I'm looking into, and posting on, Reddit and my posts have already generated some positive feedback.

After years of mostly ignoring it, I am taking a serious look at social media. Yes, I've recommended it to others but my own reason for letting it slide has been simply lack of time and the attention it would take away from projects that are important to me. Social media involves constant interaction with others. Now, having cleared away the time consuming, attention stealing projects such as book writing and perfume making, I'm free for a while to devote serious time to social media. Reddit is my current focus. On Reddit I'm quickly finding people with whom I can interact and who, I hope, may someday (soon) direct people to my new product, a non-perfume related book on Amazon.

Reddit is not for everyone. There are some very serious limitations one of which being language. English is its only language. If you are not fluent in English, Reddit is not for you. Another problem is advertising. Although Reddit sells advertising I'm told that "nobody" buys from ads on Reddit. Reddit people are very anti-advertising. So how can you use Reddit?

Look into Reddit and you will see signs of intelligent life. Reddit is full of thoughtful posts, begging interaction. Reddit also has a very good search utility so it's quite easy to fined "Redditors" with interests similar to yours, if there are any. If you do several searches and don't come up with anyone within your area of interest, Reddit won't be for you.

Personally I seem to have found the people I'm looking for. What do I do about it? I can't just say "here's a link to my new product." That may break rules against self-promotion or it may just turn off readers. Either way, this is not the way to use Reddit.

What I see as my opportunity is to engage in conversations where I can add something intelligent to the discussion. Gradually, I hope, opportunities will emerge to make comments about my product -- that fit the thread -- and might be for interest to others. All the while I will be honing my Reddit skills and, hopefully, getting noticed by a SMALL number of people who I can influence. Always the touch must be light and never brazenly self-serving. Ideally I would like to direct the discussions so that it is OTHERS who point to my product and link to where it can be purchased.

While I think this strategy may be effective, it will not be easy to execute. Signs of progress along the way may be few. Discouragement may test my willingness to continue putting daily attention into Reddit. But this is the problem with any new promotional program. Coming from zero in name recognition I have to establish some credibility and trust.

Reddit, while lacking in "selling my own perfume" posts does have followers of cosmetics and makeup and, from what I have seen some posts asking what ingredients to add to a homemade perfume. I don't see these are particularly promising but you may have the touch needed to engage with the writers and then turn some of the discussions to your own effort to make and sell perfume. And, what is important, you may get some good feedback on what people are thinking, what trends are developing, and what various demographics are looking for in fragrance beyond the offerings of the global fragrance marketers.

Learning to market all over again

I just finished developing a new product -- a book not related to perfume -- and I want to promote it. How should I go about it?

My situation is not all that different than yours if you have just created a new perfume. What do you do to sell it? Let's think this through together.

First, let's eliminate all the thoughts that will not be helpful -- "the economy is bad, no one can sell anything just now" ... "people don't want to take a chance on a new produce"" -- stuff like that, things you can't change. Like it or not, this is the world we live in and, within this world we need to find buyers for our products. Time is passing us by. We need to act now, to present our case to people who do have money and the urge to buy. Forget about everyone else.

My market, at least initially, is very small. But it exists. Your market, initially, might also be quite small but, if you are going to sell your perfume, you have to believe that your market exists and, if you try hard -- very hard -- you can find it. We get the ball rolling by making some sales. Keep at it and more sales are made. No, it's not easy.

I'm a believer in paid advertising, but only when I have data that will support it. Paid advertising is great when you can get a return on your advertising dollars. In this case, for me, it won't be practical. I don't have a hot, pin-point target media and even if I did, I don't believe I could sell enough units to get my money back much less make a profit. You'll find your perfume will likely have the same problem.

While, at the moment when our products are new, paid advertising is not likely to be worth the investment, shooting off a press release to the right people at the right media makes solid good sense. There are a number of companies that can provide distribution lists and even arrange to distribute your press release for you. This could be helpful for you. But before you even begin to research list providers (through a Google search) think about the ACTION you want to trigger. You'll need a distribution point -- a retail store, website or some such where you can take orders. Also, when you send out a press release it will go to media people, not consumers. This means if interest is shown in your perfume, you may be asked to provide samples. Keep this possibility in mind and the potential cost to you -- your production cost per bottle plus packing and postage. I've been calculating how many copies of my (non-perfume) book I'd be willing to send out for reviews -- but reviews are not sales.

What I am going to do, and you might do too, is to personally give some copies (bottles for you) to people, friends, who might be able to promote some sales if they like my book (or your perfume.) These would not be reviewers but people I know who know others with the same interest. Hopefully some word of mouth pressure will be generated but I'm not so naive as to think this word of mouth stuff will go viral. No, I'll have to prime a lot of pumps and that will take effort, energy, time, and a belief in what I'm selling. You should be in love with your new perfume and have confidence in it's appeal. Then you can talk well about it.

There has to be more we can do. There is more we can do. Give me another week or so to explore some practical possibilities. I'll report back to you.

-- Phil

How, with so many perfumes crowding the market, can there be room for so many more?

This over saturated market practically DEMANDS your perfume!

The other day my wife commented that there seemed to be a lot of new perfumes out there and she had been without television or magazines for over two weeks. But she had been online. Internet was our sole reach into the wide world of international commerce from our vacation home in Canada, and we were on vacation. The thought struck me that, as long as I can remember, there was always talk of the perfume market being saturated — too many fragrances already being sold, no room for more. Too many new fragrances being launched, each cannibalizing the sales of the others. New launches stealing sales away from market leaders. This happened year after year.

And that's the point. We already have more than enough perfume for everybody, enough perfumes to choose from, and there seems to be no shortage of variety, but there is no end to these new launches. Every year dozens upon dozens of new fragrances make their way into the maerket. What gives?

Those who launch these new perfumes know exactly what gives. They know that perfume is a fashion business. Would any clothing designer say "I think I have enough of my stuff on the market. I don't see the need to create more."

The fact, like it or not (and some traditionalists do NOT like it!) is that every year designers must produce their spring collections and their fall collections, just as automakers must introduce new models each year. Fashion demands constant innovation, newness, change. Without this ongoing demand for something new, major industries would collapse.

So never fear. Not only is there room in the market for your new perfume, the market wants your new perfume. The market churns. Much goes in; much gets spit out. That's how it works. The trick is to get in, make your money (enough to make your project profitable) and then, when your fifteen minutes of fame have expired, quickly throttle back your promotional budget and go on to your next fragrance. That's how successful companies make their money.

Not every fragrance that says 'here I am" makes it off the launchpad.

There are some conditions that determine whether your perfume makes it into the churn. Have you ever watched rowers trying to launch a boat from a beach into a heavy surf? Their timing and execution has to be perfect, otherwise the surf will drive them back and perhaps capsize their boat. They have to get past those pounding waves at the shore and out into the deeper waters where they can begin to row. The perfume entrepreneur has to get past the launch, at which the project can be sunk, and out into the market where sales can be made.

Once your fragrance is accepted into this highly competitive, over saturated market, the question is, can you make money before people lose interest in your perfume and are drawn away by something newer?

There are guidelines that will improve your fragrance's market potential: be a little bit better, be a little bit different, have just a little better story to tell, and have just a little better graphic presentation. It seems obvious but is so often ignored.

The reality is you have to work at it. In each of these areas you have to innovate a little better, work a little harder, press on a little longer, both in preparing your fragrance for the launching pad and then, when you have gotten through that heavy surf at launch time, sustaining interest in your fragrance by sustaining your own interest in promoting it.

The market will always be crowded. The market will always look fully saturated. But wise heads know there is plenty of room for a new perfume — their perfume. And, if you do it right, there is room for yours too.

Something important got left out but maybe we can put it back in ... (the money machine!)

Yesterday I was reading about a political fund raising project. An unknown candidate with very little money raised more than $8 million in a very short time. How did she do it? She worked with outside experts and was overwhelmed by the sudden name recognition they achieved for her and the bundles of money that came in.

The story made me think I had left something out when I wrote How To Launch Your Own Perfume Company: A Simple Business Plan but now I'll give you my correction. The book outlines a practical, solid plan for launching your own perfume company with minimal capital. But I left out the part of the equation that put our political friend into the clover. Besides an experienced company that molded and shaped a political image for her, she had another firm that took what the first firm had done and ran the promotion everywhere they knew it could bring in money. Working with experts is what made the difference. Now here is what's missing from my story.

In How To Launch Your Own Perfume Company: A Simple Business Plan I describe a program whereby you can start your own perfume business by producing fragrances for marketers who will pay you up front. This relieves you of the need for substantial capital. If the fragrance sells well you continue to make money by providing the fragrance. For you this business is profitable right from the beginning, at least minimally so.

But for a big payday sales must really take off. How to achieve this was not part of the book but I think it should be a companion volume. What was missing was the introduction of a promotional team. This is what made the difference for our aspiring politician. One team created her advertising -- just as our book will help you do the "create perfume" portion of the business -- while another team took that advertising and placed it where it would do the most good, including in the hands of some very powerful influencers.

So my amended program would be this: set up your business as I describe in How To Launch Your Own Perfume Company: A Simple Business Plan. But find that special business partner who, in a relationship with you, will promote the sales of the fragrances you have developed for your clients. This business partner will be paid some costs but also a motivating commission on sales. And, as those sales come in, you will be making more and more money through your sales of the fragrances to the marketers.

Once you find good promotional people to work with hang onto them. As a team you will be able to take on one marketer after another as a client and both you and your promotional team will flourish.

Rules to follow when setting a price for your perfume

In brief --

#1 The price of a perfume depends on the environment in which it is sold.

#2 The price must cover all costs and leave you with a profit.

#3 Working backward, you discover what you can afford to pay to produce your perfume -- and if you can't produce it for this cost or less, profit becomes impossible.

    There is a formula for setting a retail price for your perfume. This formula won't give you an exact retail price but it will give you a tight range within which to set your price. To work this formula you first must gather up some data.

Lesson # 1 -- The retail price you can set for your perfume is limited by the environment in which is will be sold

    This means you have to look at where your perfume will be sold and what fragrances are being sold in that same retailing environment. If your perfume is being developed for high end boutiques, you have to look at how others are pricing their fragrances in this market. Your price should fall somewhere in the range of what others are charging. Why? Because this is what buyers expect.
    If you're selling in a middle market or a bargain shopper market, again you must look at what others are charging. This tells you the price range buyers find acceptable. Pricing your fragrance higher or lower puzzles buyers. They start feeling you're doing something wrong, that you don't understand what you're doing, and they become suspicious. This hurts sales.

Lesson # 2 -- Selling environment is just the starting point

    From your planned retailing environment you can make an estimate of how your perfume should be priced. But this is only an estimate. Now you have to work backwards from that estimate to establish the most you can afford to pay to produce a bottle of your perfume.
    To get this number you start with your anticipated retail price. Then you subtract the portion of that price that you will not receive, the discount that will be given to retailers, which should range from 40 to 60 percent, depending on the relationship you are able to develop with stores. Don't count on everyone paying you the same price. You may want certain stores to take your fragrance for the prestige. In other cases you'll just offer a "standard" discount and hope that you can get it. Now for distributors.
    If you plan to distribute your fragrance widely, you will use various distributors and jobbers. Now you must allow for the discounts they will want. Then -- take a deep breath -- you'll want to allow yourself some money for advertising, administrative costs, and returns. After these considerations you must still allow for the cost of producing your perfume -- and your profit.
    As you take each of these costs into consideration, you begin to understand just how important your production cost has become. Now looking at these obligations, you begin to ask yourself, "Can I do it? Is it even possible for me to make a profit?"

Lesson #3 -- Eliminate all non-essential production costs

    Some of the lessons: alcohol costs less than perfume oil. Don’t go overboard using oil when you could be using alcohol (In most cases this will please your buyers. They don't really want a heavy fragrance!) Water is less costly than alcohol. Don't use pure alcohol when you can use a pleasant alcohol/water blend. Don't aspire to a custom bottle when so many good stock designs are available. Women will prefer a spray pump over a splash bottle. For men, splash is a good choice and a cap is a good deal cheaper than a spray pump (although a sprinkler neck bottle may cost you a few pennies extra.)
    And the fragrance itself. "All natural" is good but presents some challenges. Some natural ingredients are cheap but the really lovely ones are quite expensive. That is why the industry has struggled to develop excellent synthetic substitutes. That may sound like heresy to you but, unless you're marketing your fragrance to a very aware, picky audience of people who will pay more, avoid those beautiful expensive naturals or blend just a tiny bit with your synthetics to give them more character.
    When you've finally got it together and whittled your cost down to something reasonable, look at where you stand on potential profit. After you've covered the cost to produce your fragrance and all the costs mentioned above, how much profit are you going to squeeze out of every bottle you sell? That's the number you have to look at when you decide whether or not to go ahead with your project.
    If you want to read more about trimming costs and producing your fragrance at a cost that will give you a good markup, read Creating Your Own Perfume With A 1700 Percent Markup! It's available as an instant pdf download and, as a photo-illustrated softcover at Amazon.

What is a new customer worth to you?

     When you spend money to advertise, a critical issue is the value of a new customer. The "game" is to make more money from your ads than you paid for your ads. If you spend $50 in advertising to sell a bottle of perfume that yields a $45 profit, have you won or lost? You can't tell unless you know the customer's LIFETIME VALUE.

    In brief, if you spend $50 in advertising to make a "$45 in profit" sale to a new customer who will never buy from you again, you've lost $5. You would have done better not to have advertised.

    But, if your new "$45" customer makes a second purchase from you which yields  another $45 in profit, you've made $40 in profit off this customer. If he or she buys from you again, your profit from that customer will be even greater and the $50 you spent to acquire this customer has more than paid out. This "customer value" metric is what guides your advertising program.

    This issue of "customer lifetime value" is shouted by bloggers and ebook writers all over the internet. But their wisdom may be of little value to you. One issue stands in the way of your using customer value to accurately guide your advertising program: your lack of data. New in business, you don't yet have the customer histories you need to establish the lifetime value of a customer.

    So what can you do?

    The first essential step is to develop a purposeful customer database. This, in time -- maybe in just a few months -- will allow you to begin to establish the lifetime value of your customers. Here's how I've done it and how you can do it.

    Every order you get goes into a database. You'll want it to be on a computer so you can sort and manipulate it. Every order that you post is posted with the product purchased and the revenue received. From the product you can extract what amount of the selling price is profit. Every entry will also include a customer name, address (when possible and practical) and some sort of unique customer identifier.

    This customer identifier is essential as gradually you will develop two databases -- one of individual invoices (sales) and the second of the customer's cumulative history. This second database will show the total amount of money the customer has spent with you, the sum of individual purchases. This second database may also be able to show how often each customer has ordered from you.

    The "trick" to setting up this system is to find a unique identifier to allow you to aggregate each customer's individual purchases into their cumulative history.

    In the past I have assigned a unique customer number of each new customer based on name, address and zip or postal code. If you're selling digital goods, you might not get a name and address but you will get an email and that can become your unique identifier.

    If you are a retailer, you'll ask for a phone number. Most people today have their personal mobile phone and thus a unique phone number.

    I realize that for the average new marketer, setting up this sort of system can seem overwhelming. I came to it from the advantage of having IT people to do the programming so all I had to do was specify what data I wanted captured and what manipulations I wanted to be able to make on that data. If you're just starting out you'll probably be reluctant to spend time setting up systems when, at present, you're just desperate to make sales.

    But keep this in mind. As you begin to collect orders, by organizing them into at least an invoice (sales) database you'll be making a start. And, for this database, collect at least one identifier be it cell phone number or personal email.

    Don't wait too long before you do it. Your data will start to show you what each new customer is worth to you and that number will begin to show how much you can spend on advertising, to acquire a new customers.

FOOTNOTE: If the concept of a database is new to you, here are some ads for databases you can look over. Looking costs you nothing. And, if you are going to become a marketer, you'll find databases are an essential tool. I've developed my own marketing database but before I could do it, I learned a lot from our IT professionals. Regardless of timing, a database for your business is an important "something" to keep in mind.

When is the time right to spend money on advertising? When should you launch an ad campaign?

    Everywhere you look you see advertising. Every media bombards you. Could this tool -- advertising -- help make businesses more profitable? Could advertising be helping you? If you are reluctant to spend money on advertising, it may be because you haven't asked yourself, and answered, these three questions:

    (1) When should I advertise?
    (2) What should I advertise?
    (3) How should I advertise?

When should you advertise?

    The answer is easy: “when you have something to advertise." But “having something” requires your taking a hard look at your business and asking yourself, "Do I have at lest one product or service that is selling profitably now and might get even more orders if I were to advertise it?"

    In spite of stories you might have heard about advertising selling the unsellable, advertising rarely can make an unwanted product profitable. Don't advertise until you have proof that a product or service you offer can -- and has -- made sales.     If you don't yet have at least one product or service that sells profitably, you're not ready to spend money to run advertising.

    You may ask, "how can I make sales without advertising?" but there are many ways to expose your products to the public without paid advertising and, if no amount of exposure results in sales, you're not ready to spend money on advertising. First you have to get your act together and make your product desirable. This may mean writing a more compelling description for it, or showing it off with a better photograph, or getting enthusiastic testimonials for it, even if you have to give away a few bottles of your fragrance to get those testimonials.

    Before you begin to spend money on advertising, be confident you have a product that will sell.

What should you advertise?

    For some, under some circumstances, just advertising your business could make sense. For most of us advertising a single product from our business makes more sense.

    If, from experience, you can predict that a new customer will buy from you again and again, consider advertising a "loss leader," a popular product you can offer at a conspicuously low price. This strategy attracts as many new customers as possible and you do it with the knowledge that the additional business you receive from them will more than offset the minimal profit or small loss you get from their initial orders.

    Before you experiment with a loss leader, make some estimate of the profit that will be produced by future orders from these customers. This is a long range strategy and one that calls for record keeping that will allow you to estimate what a customer is worth to you in profit over the weeks, months, or years they continue to shop with you.

    But suppose you have a small number of products to offer and experience shows that most new customers don't give you a second order or, if they do, it's a long time in coming. In this situation you'll want to maximize your profit on the first and possibly only order. Look for a product that sells well and yields a generous profit from each sale. This will probably be your "best" product and it's the one you want to advertise.

How should you advertise?

    Ideally you will begin by running test ads in several media with several messages to see what works best for you. If your budget is extremely limited you may do better to put all your eggs in one basket rather than spreading the money so thin that any results you get will be too small to analyze. For starters, go with the media that can give you the most bang for your buck. You don't yet know what it is so you must take a shot in the dark with an advertising program you can comfortably afford and where you can quickly cut your spending if necessary. Give consideration to Google Ads, Amazon Advertising, YouTube, Facebook, Twitter, Instagram, and Reddit. Think about media where you see ads that are most closely related to what you are selling.

    Set up a budget that will allow your ads to run over a period of weeks but won't break you should the program prove a  failure.

    Study at the media you have selected. Look at the product you have selected. Write about it just using the ideas you would use if you were selling it in person. Keep it simple. Keep your focus on how the product could help someone.

    If advertising is new to you, the two most important points are selecting appropriate media -- placing your ads in media that makes sense for your offer -- and the offer itself. A good offer made in the right media can sell a product far better than all the work of "creative" advertising people when they promote a poor offer in the wrong media. Writing and photography skills are secondary to common sense selling.

    Keep these two points in mind. My own current advertising program is focused on selling a single product: this book.