The idea of something versus the reality: This HUGE problem is like an anchor on your business (but it’s also an opportunity)

I recently posted on Facebook that I wished I liked pesto as much as I like the idea of pesto. Pesto sauce on pasta sounds so good but I’ve never had a pesto I enjoyed; I always leave the table disappointed, regardless of how skilled the chef was who prepared the meal. But I look at pesto recipes and I order it restaurants anyway.

We all have that feeling about different aspects of our lives: We are caught between the idea of something and the thing itself, and those aren’t always the same. Often, the idea is much rosier than the reality.

This reminds me of a saying I heard once that “people don’t want to write a book, they want to have written a book”. There’s a distinction here between the idea of having written a book and the reality of having to write a book. Any author will tell you that it’s a painful process to write a book and people discover that when they try. (By the way, I tried to find the source of the saying but can’t find it; so if you know, please contact me so I can update this blog post).

Many of my real estate investing clients see this when they mentor aspiring real estate investors. People come to them with a desire to learn how to invest but few actually act on it because they perceive a ton of risk and the challenges of navigating through the unknown is so difficult for them that they fail to act. Once again, people like the idea of being real estate investors but they don’t like the reality of real estate investing.

And among novice equity investors we see something similar: People love the idea of being edge-of-the-seat investors who accept risk and are rewarded handsomely but in reality people hate it and they stick their money under a mattress or in a a low-risk, low-return fund. (But there’s tension between the idea and the reality, which is why sometimes some people choose the crappiest investment imaginable because their neighbor’s friend knows someone who made some money in the stock a few years ago — even if those people are usually risk averse. It’s because the idea of being risk-loving is appealing).

Buyer’s remorse might be a related result: We like the idea of owning something more than the reality of actually owning it, which we only discover after having paid for it.

I suspect we also see it in other areas of our lives: Relationships, home ownership, political and religious positions, hobbies, entertainment.

WHY THE DISPARITY?

We see this disparity between the idea of something and the much less enjoyable reality. But why does it happen, and why does it happen so consistently in so many areas of our lives?

I’m just guessing, of course, but I believe we can draw a clue from two of the examples I gave above — the example of writing a book and the example of being a real estate investor.

In both cases, the result (from which we draw our rose-colored ideal) is rewarding. With a book, the end result is that you have “proof” that you are an authority on a topic and it’s packaged into a coherent, nice-looking book worthy of becoming a New York Times bestseller; it’s something you can point to as an enviable accomplishment. With a real estate deal, the end result is that you have an asset that is generating regular monthly rental income while you sit back and light cigars with $100 bills.

But in both cases, the way to get there (from which we realize the harsh reality of the situation) is much more difficult. A book takes a lot of time and effort — time and effort that needs to come from somewhere else in our already-packed schedules — and you’ll be surprised at how hard it is to write 100,000 words on a topic and maintain coherence all the way through. With a real estate deal, the way to get there seems complicated with steps that require financial investment and a bit of sales ability and TON of rejection.

In all cases, the idea is an attractive end-result while the reality is a lot of hard work (or financial expense or time required) to get there.

So people avoid the work or they work around it or try to do half-assed solutions that minimize the work (unfortunately, this can often lead to even less satisfying results).

HOW THIS IS AN OPPORTUNITY FOR YOUR BUSINESS

You can build off of this idea-versus-reality disparity to grow your business in the following ways:

  • Identify the ideas that people have in which the reality is too difficult for them to achieve… and sell a product or service that delivers the dream and allows them to avoid the harsh reality. (This is why there are lots of freelance ghostwriters who are hired out to write books for clients, and it’s why there are so many real estate investing mentors out there who are making big bucks showing other people how to invest).
  • When faced with do-it-yourselfers who think they can ignore or ameliorate their problems rather than pay for a solution, outline the true costs of those decisions as part of your sales funnel in order to illustrate how the DIY option is the challenging reality.
  • When competing against low-priced competition, position your offering as being a fuller solution that completely eliminates all headaches and costs associated with the problem it solves. (In other words, your solution offers a clearer way to get the idea and avoid the reality than your low-cost competitor).
  • After people have bought from you, help them avoid buyer’s remorse by surprising them with additional post-purchase value that helps to ease the reality and elevate the idea.

Now the question is: Are you going to go through the harsh reality of implementing this or are you going to click away from this post, merely in love with the idea of it?

Case Study (part 1): Looking for opportunities in the sales funnel

In a previous blog post, I showed you how to draw your sales funnel. I led you through an example and we ended up with a fictional sales funnel that looks like this. (Even though it’s fictional, it’s pretty close to many real businesses… but just simplified a bit).

Opportunities in the sales funnel

In the next few blog posts, I’m going to show you how you can examine the sales funnel you’ve drawn to find new opportunities to run a more successful, profitable business.

One of the first things we can ask as we look at our sales funnel is:

What do we do with someone AFTER they become a Customer?

Our example sales funnel doesn’t do anything with these Customers. But customers have already decided that you can solve their problems and they have seen the value you provide them. So you should follow up with your Customers and offer them new products and services.

New products and services might come in the form of…

  • Ancillary products and services that are sold at the time of the sale
  • Upselling the Customer into bigger and better versions of the products or services they just bought
  • Cross-promoting the products and services of complementary service providers using affiliate marketing
  • Selling additional products and services in a follow-up sequence

A great place to start is to use the tool I describe I this blog post: Product development, pricing, and sales funnel strategy made easy. It’s a simple way to find new products and services that fit within your existing offering!

To use the example that we’ve been working on: Perhaps the business can offer basic, intermediate, and advanced ebooks instead of just one ebook; or perhaps the business can sell the coaching and offer the ebook plus a workbook for a slight additional cost; or maybe the business owner can turn the ebook into a print book and sell it at the back of the room during the seminar; or maybe if the business owner presents several different seminars on different topics, they can record them and offer them as a package to ebook buyers.

Another thing you can do in your sales funnel is turn your Customers into Evangelists. For the same reasons that they might buy from you again, they might also tell their friends about your business, too. You can make it easier for them by asking them to tell their friends or even by asking for their friend’s contact information. And you can make it even easier for them by incentivizing your customers with kickbacks if their referred friends buy from you.

Stayed tuned. There are many more ways to find new opportunities in your sales funnel.

The emporium of monetization

When starting up a business, the entrepreneur usually has a couple of monetization options in mind. A consultant might offer one-on-one coaching OR team-participation workshops, for example. In my business, I offer written content for businesses to use in their marketing and sales efforts, plus I sell my content in other ways as well (i.e., books and ebooks).

And as a business grows, it should seek out additional opportunities to make more money. These opportunities should be related to the core business in some way; I don’t mean that a barber shop should start selling used cars. So the consultant I mentioned above might add a book and seminars and some affiliate marketing to their business.

These additional monetization opportunities have two benefits:

  • They offer additional ways for existing customers to spend more in the business
  • They offer new ways to attract new customers into the business

A LESSON IN CREATIVE MONETIZATION

Recently, while searching for bookstores online, we stumbled across a bookstore in England that we will definitely visit next time we’re in the UK. And this bookstore, in my opinion, has mastered the art of monetization.

When you think of a bookstore, what monetization possibilities do you have in mind? There are the books, obviously, plus a lot of bookstores are adding coffee. Those are the two top-of-mind monetization possibilities.

But Mr. B’s Emporium of Reading Delights (which should win an award for awesomest bookstore name ever) rocks in the monetization department.

Along with books (and perhaps food; I couldn’t tell from their site), they offer:

  • Two “reading spa” packages where booklovers chat about reading with a member of the staff, they read in a “Bibliotherapy room”, they eat cakes and cookies, they get a bag of treats, and they get a voucher to buy books.
  • A year-long reading plan package where you pay some money to the Emporium and they send you books that they think you’ll like.
  • They also have an impressive array of literary events that might not be monetized themselves but are a great way to bring customers into the shop.

Non-book-lovers might look at this list and wonder why anyone would ever want to spend money on this stuff. But my wife and I are pretty avid book collectors and we both remarked about how much we would love living near a place like this.

And you don’t have to be a book-lover to admire the creative ways that Mr. B’s Emporium of Reading Delights has branched into creative monetization.

HOW CAN YOU CREATE MORE MONETIZATION OPPORTUNITIES?

When I set up businesses for myself or for my clients, monetization is usually part of the early conversation. And quite often I find myself relying on some of the most common forms of monetization. But there’s a lesson we can learn from Mr. B’s: Get creative about your monetization!

How can you get creative about your monetization? What can you do that will get people experiencing your business in new ways? What are some new and unexpected ways that you can repackage your products and services that would attract new customers or get existing customers to buy more from you?

Here are a couple of places to start:

I’d like to hear from you: In the comments, why not tell us about the creative monetization ideas have you seen or that you’ve developed in your business…