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[Real World Analysis] How a Business with 12 Million Followers Went Bankrupt

[Real World Analysis] How a Business with 12 Million Followers Went Bankrupt

Before I get to the story about the business with 12 Million followers, I want to start by discussing a Facebook ad about the “truth around building an audience” that drives me bonkers every time I see it, so I decided to share my analysis around why I think it’s extremely misleading (and could even be dangerous to your financial and business health).

In a nutshell, the ad makes the claim that if you have a business, building an audience is a waste of time. You should immediately stop all of that blogging and podcasting and shooting videos nonsense, and instead, just follow this particular guru’s simple formula to immediately fill your business with high-paying clients. No audience required.

Simple as that. No mess, no fuss.

Now, a few disclaimers before I get into my analysis. First off, while yes, I’ve obviously read the ad, I have not actually watched this person’s webinar, so I don’t know what his simple formula actually is. If I were to guess, I would assume he teaches how to use some form of paid ads (most likely Facebook ads) to attract prospects into a funnel that ends in a sales call.

If that’s what he’s teaching, it’s perfectly legitimate, and I’m sure it does work.

I’m also a big believer that businesses should be profitable and make money for their owner. If his system works as advertised, the fact that he’s selling it isn’t the problem.

It drives me bonkers because it’s incomplete. And because the claim the ad makes is incomplete, it has the potential to hurt entrepreneurs.

Here’s the truth:

In order to have a successful, profitable business, you need both long-term and short-term marketing strategies.

Long-term marketing strategies are for audience and platform building. That includes those pesky tactics such as blogging and list building.

Short-term strategies are to generate cash now. So, any type of sale emails or, in the case of this Facebook ad, a paid advertising strategy designed to generate prospects so you can close them on a sales call.

Focusing mostly on long-term strategies (especially before you’ve built up a big platform) could lead to big time cash flow challenges.

Focusing on short-term strategies could lead to a massive feast/famine financial cycle. Plus, if your short-term marketing strategy stops working for some reason, you could lose your entire business.

The Internet is littered with stories about entrepreneurs who built their platform around (or had most of their income coming from) one source, and when that source dried up, their business tanked—sometimes as fast as overnight.

This is especially true if your short-term marketing strategy is linked to something you don’t control. For instance, let’s look at this strategy of using Facebook ads to close high-ticket clients.

* What if Facebook suddenly jacks up the rate of those ads overnight. How will you then get a high enough return on your investment, to make this particular strategy worth it? (Yes, I’ve seen this happen.)

* What if Facebook bans you from advertising? (Yes, I’ve seen this happen.)

* What if something happens to Facebook? (As I write this, Mark Zuckenburg is testifying in front of Congress about Facebook’s privacy policy. What if Congress decides to regulate? What if Facebook becomes less popular?)

Now, maybe none of these “what ifs” actually happen, but the point here is that you don’t know.

Things change at lightning speed in the age of the Internet, which means if you aren’t spending time building your presence on a platform you control (such as a blog or website) in addition to building your audience and growing your subscriber list, the more vulnerable you are.

It doesn’t matter if you have thousands of followers on your Facebook page or YouTube channel. You have no way of contacting them if Facebook or YouTube changes the rules.

Which means, if the rules DO get changed, you’ve just lost your audience.

For example, there was once a little publishing company that built up a Facebook following of 12 MILLION followers. They posted daily videos that were liked and shared and followed.

Then one day, Facebook changed their algorithms to show more posts from personal contacts than businesses, and they lost over 75% of their organic traffic.

Just. Like. That.

That little publishing company didn’t recover. It went out of business.

The worst part of this story is it didn’t have to happen. This company had a ton of content. Why wasn’t it posted on YouTube? (At least then there would have been a second platform to turn to.) Why wasn’t it posted on a company blog?

In this case, the work was already done. It wouldn’t have taken much effort at all to put a little love into building up a couple of other platforms. It wouldn’t have taken much to invite their Facebook fans to opt in to an email list.

But, it wasn’t a priority for them to build a platform outside of Facebook. Likely, the owners never even considered that Facebook would change the rules overnight. Maybe they even thought it was a waste of time and energy to do anything else, when they were getting so much traction and momentum from Facebook.

Anyway, let’s get back to you.

As a busy entrepreneur (who maybe doesn’t even like marketing all that much), you may be reading this right now while experiencing sinking feeling in your stomach.

Where will you find the time and energy to create both long-term AND short-term marketing strategies?

Well, here’s my answer—you get help.

I’m a big believer in focusing your time, energy, and love on what you most enjoy. Find the marketing tactic you love and do that. (My “Love-Based Online Marketing” book includes a “Love Your Marketing Assessment” that can help.)

You also may need to put some time into the cash flow part of your business as well, to make sure it’s running smoothly.

Then, hire a team member (or members) to help with the long-term marketing strategies.

You don’t have to do it fast, or dedicate a lot of time to it. If all you can handle right now is a weekly article, then do a weekly article (or a weekly podcast or video).

Commit to what you can. And budget what you can to get help.

And, take a deep breath. You’re in this for the long haul, right? So, know the long-term marketing strategy may take a little longer to see results, but at the end of the day, you WILL have a stronger, more stable and more profitable business because of it.

And, if you’d like to dig more deeply into online marketing, including putting together an online marketing plan, my “Love-Based Online Marketing” book may be perfect for you.

[Video] Flip It! Where is the Magic Website Traffic Bullet?

[Video] Flip It! Where is the Magic Website Traffic Bullet?

How many of you are secretly looking for the website traffic button?

I mean, all you have to do is take a quick view of your Facebook feed to see tons of ads from gurus promising to teach you where that that magic website traffic bullet is.

It’s Facebook ads!

No, it’s Instagram!

Pinterest is the missing secret.

Maybe you should post videos or do a podcast.

No, go back to good old fashioned SEO.

Ahhhh! Overwhelm alert!

So, chances are you’re either running around like a nut trying to do EVERY website traffic strategy under the sun or you do nothing because you have no idea where to turn or which one would be the best one.

You probably already know what I’m going to say, which is there is no secret magic website traffic bullet. Not even if you buy it.

So, what’s the answer? Just give up? Resign yourself to not getting enough traffic to your site or blog?

Not at all. In fact, I’m going to share two very powerful strategies for creating your own magic traffic bullet.

  • Whatever strategy or strategies you pick to attract visitors to your website or blog, decide right now you’re in it for the long term. In other words, this isn’t a “do it for a month and expect you’re going to get thousands of visitors and be set for life. That’s just not the case. It can take weeks or even months before you build enough momentum to start getting some traction, and once you’re got it started, you’re going to have to maintain it. So, having a plan in place to make sure you are consistently using that strategy is key.
  • Whatever strategy you do, always put out your very best work. This also includes if you post regular blog posts or videos or a podcast. If you’re writing blogs, then don’t just race through it and slap something up. Take the time to do the best job you can on everything you create. While this isn’t necessarily the fastest way to attract visitors to your site, I guarantee this is the key to standing out. If you put out really good content, your people WILL find you.

I share more in the video — check it out:

(And if you’re wondering exactly how you can get everything you want simply by flipping your perspective? Check out the first episode here.)

If you liked this episode, you may also like my “Love-Based Online Marketing” book — you can check it out here.