The Market Coalition

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California Energy Crisis Heats Up

The match of deregulation lit the firestorm of rate increases and blackouts in California. Here is a look at the key issues building this climax. These same issues are smoldering across the United States.

The partial deregulation in 1996 in California of electric power has its roots in, of all things, the earth satellite business. You see, the long distance telephone business was efficiently and properly deregulated about fifteen years ago as earth satellites allowed many new companies to under-price the protected utilities (AT&T).

About six years ago a growing body of utility analysis suggested that the combination of a nearly national, interconnected power grid along with a growing number of small power generating companies would result in electric utility price competition similar to the long distance telephone case.

A California legislative committee, led by State Senator Steve Peace of San Diego, worked nearly two years crafting a master plan for power. In reality the legislation was crafted nearly single handedly by Sen. Peace. Other legislators recently commented, “It was so complex, we barely looked at the legislation. We just took Senator Peace’s word it would work.”

Each participating interest got part of the pie. Utilities wanted to divest nuclear power and some older plants as being financially non-competitive. Consumer groups wanted caps on prices and to foster multi-vendor competition. A couple of legislators wanted their name on showpiece legislation with national exposure. Academics wanted their theoretical auction pricing models validated.

The plan was authorized in 1996. The market was split into power producers, transmission companies and local delivery. Local utilities would sell their power plants and receive above market, subsidized compensation until they recovered their cost of sold facilities. The public got a 10% price reduction.

So why do we face the prospect of rolling blackouts? 1) Only a few power suppliers have the major portion of generation capacity and can “game” the system, 2) local utilities many not buy power on long term contracts, 3) they must pay the highest daily rate offered rather than the lowest, 4) power usage grew at 4% a year rather than the forecast 2%, 5) local utilities pay a floating rate for electricity they buy but must sell at a fixed price to the consumer, 6) continued tightening of environmental limits forces new power plants to use natural gas.

Governor Davis compounded the problem with an eight point program targeted at imposing pain on the utilities. Not one of his proposals increases power availability nor reduces consumption. The confirmation of seriousness is that Intel has blocked all further expansion in California.

Well, we are now into our second series of rolling blackouts. I hope you all saved your Y2K bottled water, packaged food and candles (just joking, but I do carry a small flashlight on my belt).

In the last month the situation became 1) the two major state utilities are technically bankrupt, 2) their cash and credit have been exhausted, 3) PG&E did petition for bankruptcy, 4) their debt is “junk” rated blocking refinancing, 5) the state legislature authorized $800,000,000 to buy power for resale to the utilities and 5) this emergency funding lasted a few weeks and 6) subsequent authorizations now threaten the solvency of the state. Our legislature now sees why the utilities ran through $8 billion dollars in six months.

I have never seen such a lack of leadership in a situation affecting so many people at once. Our Senator Dianne Feinstein advocates converting PG&E debt into bonds, selling them to some suckers and continuing business a usual. Maybe her financier husband, Robert Blum, will syndicate the bonds and take the fiduciary liability.

Oregon Senator Gordon Smith was resolute, “You folks are entitled to your life-style. But I think my state in being turned into an energy farm for California. I think Washington state feels the same.”

Governor Davis went to Washington, D.C., hat in hand as a supplicant. The outgoing and incoming Federal folks said, “You got into this trouble on your own; work it out.”

The local utility executives have become invisible. The CEO of PG&E should be on national TV news saying, “The way out of this mess is X, Y and Z. We have an answer; support us.” Instead we see only the system network control room operators phoning neighboring states begging for supply. Then PG&E declares insolvency.

The worst example of a pea-brained politician is San Francisco City Attorney Louise Renne. At the time others are scrambling to court out of state providers to “please, please, cooperate and support us,” she describes the coordinated lawsuits she is filing against key firms accusing them of collusion. I might see prosperous companies colluding for market share and pricing power; it totally escapes my ability to fantasize to see CEOs colluding their way into bankruptcy.

Consumers are now subsidized by state money and have no incentive to conserve. The present pricing shortfall amounts to $24 monthly per Californian; rather than bust the system the short-term solution is to recover the true costs and motivate conservation by a power bill surcharge. The long term solution is a coordinated commitment to both new supply and conservation.

Bill Ragsdale
http://www.fundsystem.com
Bill Ragsdale has edited the Good Fortune advisory for eleven years, managed a mutual fund for three years and for 25 years was the CEO of an electronics manufacturer. He has an MS degree from the Stanford Graduate School of Business.

Customer Lifetime Value (CLV) can get a little tricky, but I’ll try to make it simple. By now you’ve probably heard the term yet may not fully understand how to use it effectively, if at all. That’s because every “Tom, Dick and Mary Marketer” have done their best to make it more complicated than necessary.

The hardest part of calculating CLV is figuring out exactly what your customers’ “lifetime” really is…. and the only accurate way to arrive at that number is by getting, storing and analyzing your customers’ data. Period. If you’ve been in business for a while, this should be easy to get, but if you’re a start-up you’re going to have to estimate this based on industry standards.

Although there are several ways to arrive at CLV, the easiest is to calculate:

1. The average length of time a customer stays your customer

2. The number of transactions that an average customer will have with you during that time and

3. The average dollar amount per transaction

Multiply these together and you’ll arrive at a usable number. But remember, junk in, junk out… so make sure your original numbers are accurate!

Once established, you can use your CLV as a benchmark for developing a realistic customer acquisition (or retention for that matter) budget. For example, let’s say you find out that your average customer:

1. Stays with you for 5 months

2. Purchases something from you 3 times per month

3. Spends an average of $2 per transaction

In this case your average CLV would be $30. Based on this, it would be foolish to spend even $20 to gain one customer… you’d be left with little, or no, profit (unless of course, your margins are outrageously high). On the other hand, your customers may hang in there for 22 months, spend $20 per transaction and purchase from you a greater number of times. Since your CLV would be much higher, you could afford to pay more to gain a customer. Again, the specifics differ widely and there are many factors to consider, Also note that this does not include any costs associated with preserving this customer relationship. In the real world these must be included.

It is crucial that you understand your CLV and use it to guide your communication decisions! (A good book on this subject is Donald Lehmann and Sunil Gupta’s, “Managing Customers as Investments”… visit our website, www.StrategicMarketingAdvisors.com for a review and ordering information.)

3. Your specific goals, such as: * Acquiring “x” numbers of new customers * Increasing the number of current customer transactions * Increasing the length of time your customers remain your customers

4. Proposed media costs and actual/forecast response and sale rates (you can find these out online or from any reputable advertiser)

Once armed with this information, you’ll be in a good position to choose. Here’s an example of how this might work. Let’s assume the following:

* I am a widget retailer

* My goal is to get 1,000 new customers this year

* I will get 200 customers whether I do “anything” or not… (for example word-of-mouth, walk- ins, etc.)

* That means, I need to acquire the remaining 800 using some form(s) of advertising

* I can spend $40,000 to “buy” these 800 new customers

* My CLV is $40

* After careful consideration, I decide to conduct a direct mail campaign

* Based on my careful research and experience, I know that I can sensibly assume that 1% of my audience will respond by calling (called a “response rate”) and that 80% of the responders will become new customers.

* Given this forecast and my goal of 800 new customers, I know that I’m going to have to mail out 100,000 sales letters.

* As luck would have it, the cost to create, print and mail one letter is 37 cents (using 3rd class postal rates) which comes to $37,000… leaving me with a $3,000 “fudge factor”

So, let’s see where I stand…

1. The campaign cost is well within my budgeted amount of $40,000, my forecasts are reasonable based on industry standards and experience, and can realistically accomplish my goals. So everything is perfect, right? Wrong.

2. 800 customers with a CLV of $40 will result in revenues (over time no less) of only $32,000! That’s called a losing proposition!

What should I do?

1. In the short term, find out if there are less expensive advertising vehicles that may bring you similar results.

2. Find ways to reduce the direct mail costs without sacrificing response and sale rates (e.g. one color vs. four; lighter paper stock).

3. Identify ways of increasing the sales rates (for example beef up the offer; send to more people - you’ll get economies of scale this way so the per piece price will drop dramatically and you’ll acquire more customers)

4. Offer added products to increase your customer’s average transaction amount

5. Institute robust retention programs aimed at increasing the longevity of your average customer

Although this is a very simple example of how CLV works, it clearly demonstrates how important understanding it is to your business. Without considering CLV, you’ll be shooting in the dark - potentially wasting thousands of dollars and commiting serious, or even devastating, blunders.

Copyright 2005 Mary Eule

Mary Eule specializes in helping small and medium-sized businesses get and keep profitable customers. Formerly a Fortune 500 marketing executive; founder of two successful small businesses and award-winning speaker, Ms. Eule is President of Strategic Marketing Advisors, LLC. and co-author of a new book, “Mandatory Marketing: Small Business Edition”.
She has a BA in Journalism/English from the University of Maryland and earned her a master’s degree in marketing from Johns Hopkins University. Log onto her website: http://www.StrategicMarketingAdvisors.com for free articles, newsletter and helpful marketing tools, tips and templates… and/or to purchase the book.

When I came upon that little word — Niche — I wondered, “what is this thing called a Niche — and most importantly, can I find my own niche too?

What is A Niche

Well, A niche, is a service or product , that fills an unmet customer’s need — that is more of a speciality. You are not competing with the masses for a sale on an ebook or an affiliate tool. Instead, you carve out a small corner of the market for yourself on the Internet.

Well, the definition was simple, however, finding a niche that I felt comfortable with was going to be a chore, because I wanted to avoid the affiliate programs — and if possible find a company that privately carried their own affiliate program — without the quota’s and the many rules.

How to Find A Niche

When I started looking for a niche market, I started to make a list of my hobbies, what I liked to do, what I was interested in and what I was familiar with — to help me brainstorm. If this little task does nothing else, it will definitely give you an eye-opener to who you are.

Anyway, when the dust finally settled I realized that I wanted a niche where it would assist others — perform a service of some sort, and would compliment my current website. Not very decisive, but I had a direction.

Then it happened, just by chance, or maybe it was divine intercession — anyway, I received a personal email from one of the assistant manager’s from DentalPlans — stating that she liked my website and wondered if I would be interested in becoming an affiliate.

I looked at their website and the affiliate plan — and I knew that this affiliate program was for me.

Here’s What DentalPlan Offers

1. High conversion rate — 1-5% percent conversion ratio from click thrus.

2. Commission — $40 to $50.

3. Extremely high EPC.

4. Partner through DentalPlans private network — Your affiliate manager will answer any questions you may have — one on one assistance.

5. You can promote on-line or off-line or both.

6. Full 365-day cookie. (If you go through DentalPlans program)

7. Paid monthly.

8. They work with affiliates more closely — will create custom creatives such as: landing pages, banners, pop-unders, emails, editable templates to fit on your website.

9. Free Web templates (standard and editable), banners, affiliate links

10. On-line tracking of stats

11. Multi-tier possibilities (Need to ask about it)

This is what I or any affiliate is looking for in a program! If you would like to join, you can go to my website at http://www.myaffiliateplace.biz/Affiliate_More_Affiliate_Opp.htm or if you
would like to look at one of their editable website’s go to
http://www.myaffiliateplace.biz/Affiliate_mydentalwebsite.htm and look around.

Anyway, I found my niche — it compliments my affiliate website.

So yes, you can find your small corner of the Internet and find a niche product. But always remember — even though this may have seemed difficult — your chore is not over — you must market, market and market.

To you success.

Vickie J. Scanlon

Vickie J Scanlon has a BBA degree in Administrative Management and Marketing. Visit her site at: www.myaffiliateplace.biz for free tools, articles, ebooks, how to info, affiliate opportunities and dell products - to meet your budget and needs.

What is the secret to selling online? This is a significant question on the mind of anyone who has ever attempted to market a product or service via the Internet. Some say that communication is the key factor in making a sale, while others argue that finding the right product should be the primary goal. In reality, both of these options are correct, and there are additionally a few more tips that can be practiced to help you succeed in the world of online sales.

The user-friendly website is essential for those who intend on selling online. Navigation should be smooth, and categories featuring your products, clearly identified and easy to browse. Top websites are praised for their clean design and organization. Fonts should be large and simple to read. Provide your customers with crisp, quality images equipped with descriptive details. Also make sure that the images load quickly; customers will leave if they get bored and tired of waiting. It is crucial for you to display your privacy policy, usually on the homepage, of your website. This assures customers that you will never sell or trade the information they have given you with a third party. You should also provide a link on your categories section for your shipping and return policies, as well.

Selling online revolves around a viable marketing plan. There are numerous ways to market your product online, with many of these choices very reasonably priced. To sell, you must advertise. Buy links on high traffic websites that are similar to yours. Advertisements that target a specific group of individuals are a certain way to build sales. You may also want to consider purchasing banner ads. These ads are expensive, but are a proven method of leading customers to your online store. Your advertising campaign does not have to be entirely devoted to the web. Make your venture known through newspaper ads, newsletters, and brochures. Your website address should be clearly posted with a brief description of your product, and a catchy title enticing customers to visit.

Excellent customer service is a necessity for selling online. Supplying your customers with the highest caliber of service is extremely important, especially on the web. Inquiries from customers should be answered quickly, within a few hours if feasible. It is beneficial to have a frequently asked questions (FAQ) page on your site for queries requested often. It is up to you as the seller to make sure that guests to your website have all the information they need, and that the data is delivered instantly.

With Internet sales booming, selling online is fantastic choice if you are hoping to make some extra cash. The right tools, a marketable plan, and just a few secrets can get you farther than you ever imagined.

Dr. J. Elisha Burke

Copyright 2005 Burke Publications All Rights Reserved

Copyright 2005 Elisha Burke

Dr. J. E. Burke, an educator and entrepreneur, has been involved in various business enterprises. Dr. Burke is an educator, writer and motivational speaker on a variety of topics. Dr. Burke can be contacted at http://burkepublications.com or jeb@burkepublications.com

Publishing Guidelines: You have permission to publish this
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as the bylines and the resource box at end of article are
included. A courtesy copy of your publication would be
appreciated but is not required.

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TITLE: 10 Quick Tips To Boost Your Affiliate Commissions!
AUTHOR: Marcus Schroefel
CONTACT: ms.journey@freenet.de
WEBSITE: http://www.mindclicking.com
COPYRIGHT: © 2004 by Marcus Schroefel. All rights reserved.

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“10 Quick Tips To Boost Your Affiliate Commissions!”

Are you having trouble making money from affiliate
programs, or are you looking for some *alternative* ways to
increase your existing income from them?

Then here is a quick list to get you going:

1. Write your own affiliate program ads. If every other
affiliate uses the same ads you do, that does not give you
an edge over your competition.

Be different! And let people know WHO you are! This will
give yourself an massive advantage over all the other
affiliates.

2. Did you ever try to create an ebook? No? Then just do
it! It is easier than you think. Then give it away for free
to your visitors. They will love you for it!

Put your advertisement and the links to your affiliate
programs in it and submit it to some ebook directories.

3. Start your own affiliate program directory. Join a large
number of affiliate programs and list them all in a
directory format on your web site. Then just advertise your
free affiliate program directory.

4. Participate in chat rooms related to the product you’re
reselling. Start a conversation with a person without
trying to sell to them. Later on, while you are chatting,
mention the product you’re reselling.

5. Use a personal endorsement ad. For sure only use one if
you’ve actually bought and know the product or service for
the affiliate program.

Share your own experience and tell people what kind of
benefits and results you’ve received using the product.

6. Use your signature file to advertise the products you’re
reselling. With an attention grabbing headline and a good
reason for them to visit people will come to your affiliate
site. But make sure your sig file doesn’t go over 5 lines.

7. Join a web ring. It should attract the same type of
people that would be interested in buying the product
you’re reselling. You could also trade links on your own
with other related web sites.

8. Participate on web discussion boards. Post your
comments, answer other people’s questions, and ask your own
questions. Include your affiliate text link in your sig
file under each message you post.

9. Create your own free ezine. Then use it to advertise the
affiliate programs you’ve joined. Submit your ezine to
online ezine directories and promote it on your web site.

10. If you are more advanced then why not start a private
membership site? Use it as a free bonus if people buy the
product you resell.

You see, the list is endless and I could go on and on with
even more tips…

If you just be creative on your own and think up some other
ways I’m sure you will increase your affiliate commissions.

Don’t forget that, no matter what you recommend will
reflect directly on you. If your recommendation is a good
quality product or service that is reasonably priced, your
customers will continue to trust you.

And further on they will be interested in your future
recommendations. This way you will easily be able to build
a trustful relationship between you and your costumers -
which truly is one of the keys to success!

About the author:

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Marcus Schroefel is an Author, Publisher and Success Coach.
Visit: http://www.mindclicking.comYou can get more proven
affiliate marketing tips delivered to your e-mail box just
5 minutes away — for FREE by sending a blank e-mail to:
affiliatemarketersecrets@robotreply.com
***********************************************************
© 2004 Marcus Schroefel. All rights reserved.

What can Mother Theresa and Charles Schwab teach you about marketing online.

Certainly these two historical figures saw two vastly different worlds in their lifetimes. Mother Theresa spent hers with the poorest of the poor, while Charles Schwab spent his with the richest of the rich.

But look at these two famous quotes.

“There is more hunger in this world for love and appreciation than for bread” Mother Teresa

“I have yet to find a man, however exalted his station, who did not do better work and put forth greater effort under a spirit of approval than under a spirit of criticism.” Charles Schwab

Do you see the underlying thread?

Regardless of who you are selling to, from one end of the social spectrum to the other, and everywhere in between, human beings are looking for appreciation, and approval, above all else.

Show your customers how the use of your product yields a sense of importance, and recognition, or how it helps them avoid embarrassment and indifference, and you will make many more sales than if you simply describe the qualities of your product.

But it takes a certain kind of selling to pull this off.

While your advertising can speak directly about the features of your product, and explain what those features do for your customer, it is much more difficult to transfer emotional meaning with the same directness.

Yet it is the emotions that trigger desire in the buyer. As an advertiser, it is your job to bring those desires that already exist in the buyers mind to the fore. To stir them to life, so to speak. And the best way to do that is through indirection.

By wrapping your sales message up in a story, you give your prospect permission to imagine. You’re not telling them how they should feel. They instinctively project themselves into the tale. They can’t help themselves. It’s what we all learnt to do as little children.

Remember this. Without imagination, there is no desire, and without desire, there is no action.

When someone comes to your website and reads your copy, do they see themselves using your product? Do they see themselves living the results of using it? Even more importantly, do they see others approving of them, and appreciating them for having done so?

That may sound like a strange way of thinking about a product, but let me give you an example of what I’m talking about.

Let’s say you’re selling a diet plan. How do you use indirection and storytelling to trigger your prospect’s desire for it?

You might talk to your overweight potential client like this…
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Imagine yourself walking briskly along a hot, sandy, sun drenched beach. An azure haze hangs over the skyline as the warm wind caresses your bare skin.

As you stride confidently to your favorite spot, your breathing is normal, and your body relaxed. You smile to yourself, knowing you could walk for miles like this without becoming fatigued.

The beach is busy, and as you glance around you catch the eye of someone of the opposite sex. They smile at you, and you smile back.
You walk assuredly into the water, and swim a couple of hundred yards out and back with ease. Lying back on your towel you can’t help but think…

‘Life Has Never Been So Good’

OK, now stop dreaming, and answer this question. Did you have a little trouble seeing yourself in that picture? If so, then take heart.

A slim, sexy figure and abundant self-esteem can now be yours, thanks to the amazingly simple and easy to follow…

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Do you see how indirection works? You don’t have to come right out and tell your potential client people will appreciate them, and approve of them as a result of what your product can do. You don’t have to tell them they’ll no longer feel embarrassed by their weight in social situations.

The story does it for you. Now you’ve got their undivided attention, and a real chance to prove your product is unique and that it works.

Copyright 2005 Daniel Levis

Daniel Levis is a top marketing consultant & direct response copywriter based in Toronto Canada. Recently, Daniel & world-renowned publicist & copywriter Joe Vitale teamed up to co author “Million Dollar Online Advertising Strategies - From The Greatest Letter Writer Of The 20th Century!”, a tribute to the late, great Robert Collier.

Let the legendary Robert Collier show you how to write words that sell…Visit the below site & get 3 FREE Chapters!
http://www.Advertising-Online-Strategies.com/ad-strategies.html