You can treat the Internet like some print advertising medium and base your success only on sales. Considering that Forrester Research currently pegs Internet online sales as a $500 million market in 1996, growing to $6 billion by the year 2000, it's likely a sales-only approach will undermine your efforts. A Web site is an investment that should gain value each year; unlike print advertising, which loses value quickly as time passes (how long is your one-month magazine ad valuable?), a Web site increases in value by applying the Seven Revenue Streams available.

The choice is clear: either adapt to what the Internet has to offer, or try to force your way down the throats of those visiting your storefront on the Internet. If you force, you will fail. And you will complain. But if you learn about the Internet business models, which have more to do with the evolution of business than technology, you'll discover the real secret: keeping in contact with your customer base, expanding it, and giving them more and more reasons to conduct business with you.

Create an advantage for your business by thinking about how you will save and generate revenue now. Not five years in the future, and not in a few months, but right now. This special report will show you the business models that are working online, with case studies of sites that are applying these techniques and making money. Some are making tens of millions of dollars, like Industry.net; some are small entrepreneurs adding significantly to their bottom line and building a long-term business. In such a young market, you should know the business models that are working and apply them to your own venture. Start building your Revenue Streams by focusing on results.

Revenue Stream 1: Generating Leads

Generating leads is the most realistic and immediate source of benefits online. If you are selling products and services to consumers, measure how you can expand the reach of your business from a local to regional, regional to national, and national to international audience. How can you keep in touch with your audience? Most of all, how can you use the site to generate more leads?

Many businesses with catalogs contact me, talking about putting up some search engine cum Java intranet mumbo-jumbo. I ask them directly, what do you want to do with this expensive, four-color catalog? Incur more expense by putting it online immediately or generate leads by getting your catalog mailed to target customers? The answer is simple: I can easily generate new customers and inquiries for the products.

Do you care if they buy online or from an 800 number or by fax? Money is money, no matter where it comes from; leads are leads, and the Web is a terrific place to generate them for your business and for related businesses. What's a lead? Contact by telephone, fax, or email, which the business can close. The Web site can be a central referral point for a group of businesses, with success measured by leads generated. Compare the costs of generating leads for a business and offer cheaper leads online, at least testing to see if the medium is valid for that business. (Advertising is more often about generating leads than actual sales; it's what you do with the lead, your follow-up and close, that makes the difference.)

Charge by the lead or charge by the actual sale, but whatever you do, track it well. Find out where the orders are coming from. If they are getting leads from you, ones that buy, they'll pursue the Web with you. If not, they've been able to try out a business online based on the simple model of lead generation. One Web seller actually guarantees leads because they are the most immediate and measurable response from a Web site.

Check out Edmund's Automobile Buyer's Guides for a site that not only has customers, but generates leads for other businesses. They have an incredible book of automobile information (that's been published since 1966); instead of selling the book, they've given away the content and base their business on generating leads for an insurance company, one of the leading online auto dealers, and an automobile parts store. Sounds like a free magazine with advertising, doesn't it? Adding customers and lowering lead costs can contribute at least $5,000 for a business in a calendar year.

Suggestions

1. Test a specific product or service, counting Internet-created leads to see what works.

2. Find related businesses for which your Web site can generate leads. Create an incentive plan based on leads generated and percentage of sales from those leads.

3. Create a referral network among noncompetitive, related businesses to generate leads. Even better—put them under one online network with a common goal.

Revenue Stream 2: Developing Mailing Lists and Testing Print Materials Online

When all the big companies test their latest products, they find some rich suburb to test the approach on. You can do the same thing online. The Web is like a rich suburb (how many poor people have $2,000 computers?). Test your headlines and sales letters online first and find which ones work.

If I did a direct mail test, I would likely run several different mailings—each one costing me money and, even worse, time—and see which ones worked. This is a time-intensive approach, based on costly print materials for each individual to be reached. Why not try it out online, seeing which sales letter works and which doesn't?

When I started my newsletter, I put a free issue on America Online; the headline was so pathetic ("Web Letter's Guide to the World Wide Web") that it received only 100 downloads. I changed the headline to "How To Create a Web Page," and that has resulted in over 16,000 downloads. If I tried this only in print, I would have spent thousands of dollars and months and months of mailings. This took me one month and only cost my time. It helped me focus my business on what worked, and allowed me to save time and money when I went to print.

An excellent example of testing direct mail pieces online and building mailing lists is Jonathan Mizel's Cyberwave Media Online Marketing. He gives away free reports and samples of his newsletter in exchange for email and physical addresses. Not only has he built up an enormous mailing list for his products and services, he has tested it and knows what offers work. Now he can use this as a valuable business asset year after year, offering joint ventures or endorsed mailings to a group of people who value what he does.

Another example is Amazon.com, a bookstore generating over $10 million in sales (read about them in the Wall Street Journal); their direct sales (you can't measure success today in only sales—it's the ongoing contact and development of your audience base that counts) aren't as important as their mailing list. They sell books and ask you for your feedback on the books. They give you ways to get email about what you are interested in. Let's say you search for a particular subject; you can be automatically notified, via email, of all new books relating to that subject.

What they are developing is a continual base of contact and a way to keep reminding people to come back for a visit. But even more importantly they are asking you to judge them on their merits and give them feedback, along with your email address. Publishers are busting down Amazon's door for this list. Think of it like Microsoft: are they powerful because they sell software, or because they own the most amazing computer mailing list in existence, the Windows operating system? If you want to reach 80% of computer users, you have to go through Mr. Gates.

The moral of this revenue stream is, if you don't ask for an email address and keep in touch with your customers by offering monthly tips, special reports, news from your Web site, updates, special bargains and offers, you are cheating yourself and them. If you don't give away something to mail to them physically, so they can hold it in their hands, you'll never know where they live. The more you know about your customers and the more they want to keep in touch with you, the more powerful you are. Testing direct mail and print ads online, along with mailing lists, are an untapped resource of long-term revenues.

Suggestions

1. Give away a catalog, newsletter, or special report to gain email/mailing lists.

2. Provide a way to keep in touch via email by providing monthly updates, an online newsletter, or weekly tips to promote awareness of your Web site.

3. Before your next print campaign, test out the headlines and text online; compare this test to your efforts in print in terms of cost.

Revenue Stream 3: Market Research

Imagine if you were to find a focus group to study. You'd have to pay them and set up a time to get them in a physical location. You'd have to hire a professional to run it and study the results. What you study are generalizations of one expert about a group, drawn by a scientific cross section. Online you can find people interested in what you are selling and ask them what they need, adapt your approach to their likes and dislikes, and make your customers an active part of building your business.

Why not visit the online discussion groups and conduct your own market research? Or even better, start contests and surveys that make your site a center for market research? I don't mean study the trends that exist, but listen to your audience and have them give you the trends. Let them guide you to what they need. Use this to create products and services or, even better, adapt your current approach to fit their needs.

By being in direct contact with your customers, you learn the trends as they are happening. They provide the ideas via email feedback; you create the product. Compare the cost of this to a focus group study or hiring a market researcher to pore over numerous publications trying to figure out what the competition is doing. Online you can find that out immediately and, even better, stay ahead of the competition by watching what they do as well.

Market research will save you money, not only by keeping up with your competition, but by letting your business set the trends according to what your customers want. Think of the Netscape model; they built a browser and developed it around what people wanted. A bunch of academics sat around a table with another browser, Mosaic, hoping to build standards over time. Meanwhile the market demanded, and built, the standards, making Netscape the premier browser...for now.

Suggestions

1. Run a survey, or explore a specific niche and how the Internet applies to it. For instance, a survey on how printing companies are reacting to online publishing. What are the advantages and disadvantages? Share your findings and build credibility.

2. Give away a prize for the best ideas and/or feedback about your product or service.

3. Conduct a treasure hunt on the Internet, putting strategic prizes in related Web sites, generating traffic for all and market research by giving clues in exchange for customer information.

Revenue Stream 4: Public Relations

A Web site is an important public relations tool. A company's image is enhanced by simply having a Web site address. Talking to print media, radio, and television becomes easier when you talk about what you are doing online with your business. I've received thousands of dollars in free publicity by getting interviewed, having articles published in different trade journals, and focusing all my publicity on what I do online. Press releases may get read and followed up on; the Web is a way to open up doors to markets just because of what you are doing online.

A Web site is an excellent starting point for any marketing campaign. Use it as a central referral resource, such as: "For more information visit www.writething.com 24 hours a day. We're always open." Free publicity is still available; don't forget to include your Web site and email address on all promotional materials, like business cards.

Suggestions

1. Announce via a press release the opening of your Web site and your target goals for making it convenient for customers to work with you.

2. Approach the Internet marketplace and provide insight via a survey into a specific niche, like dentists online. Share your results online and off-line.

3. Develop a promotion that requires people to go online and register; encourage people to communicate online at a specific time and promote the event with various countries to show an international aspect. I had 15 people participate in a free WebChat online; over 3,000 other people visited because of what those 15 people actually did.

Revenue Stream 5: Customer Service

This boring word is fast becoming the most important part of any business. Trying to start your own customer service department is difficult. Depending on a telephone limits access because of busy signals and the inability of personnel to be able to address the vast number of questions. Customers want 24-hour access, which is beyond most small businesses. Training, evaluation, and overhead costs with managing such an operation can easily go into tens of thousands of dollars.

Online customer service is the wave of the future because it's always open and subject to email for inquiries, with the benefits of an 800 number, but not the costs. When people write, they have to focus their questions; you can respond in a few minutes, rather than a twenty- or thirty-minute phone call in which money is being paid for simply communicating (your phone charges you by the minute; online it's usually one flat fee for access). What could be quicker than writing a note? Compare that to a telephone call, where the talk continues and it's tough to save time. When people ask questions via email, they are brief. Use this to your advantage.

Suggestions

1. Provide customer support materials, frequently asked questions (FAQs), print manuals, and a place to write to your office at your Web site.

2. Use autoresponders to give immediate feedback to your inquiries. Indicate that it is an automated response noting that the message has been received. Use this approach to sift through qualified leads and develop automated online marketing.

3. Provide links to specific software and businesses online that can benefit your public, then promote working relationships with those sites via links and possibly paid banner advertising. Become the resource for your sector by using your judgment; don't link to hundreds of sites, link to those you recommend and limit them.

Revenue Stream 6: Creating an Online Network of Resellers, Advertisers, and Joint Ventures

With so many Web sites around now, this niche will quickly become the most profitable way to create and maintain a site. Many companies have groups of businesses, such as vendors, with which they work. The Web site should be a focal point for their network, their circle of influence. The hardest thing for people to do now and in the future is find specific Web sites. Set up alliances, almost like mini Chambers of Commerce, where people can visit and be referred to related businesses that fulfill their interests.

A company could use the Dell Computer model and use its site as the central meeting place for a network of agents nationwide or worldwide. Franchises can use it as a central reference center for all of their franchisees. Advertising and promotions can be shown at the site from allied businesses. Joint ventures with other countries, other businesses, distributors, and consumers are becoming the fastest-growing business model online.

Off-line, the fastest-growing markets worldwide are now in Asia. Online ventures can penetrate those markets, possibly create joint ventures, and expand the influence of any small company to a multinational level simply through cooperative agreements and a Web site. The cost savings and revenue-generating possibilities are limitless.

Suggestions

1. Set up a network of one specific market sector. For instance, printing companies could be located on one site, with each company acting in a different state. They wouldn't compete, and could provide a central point that would make each small business a part of a national network, or group of businesses. Make it easy for small businesses to get online by providing a network that meets their interests, then generate revenue through leads generated, sales, or advertising. Hook up with national magazines or organizations to increase exposure.

2. Turn any business into a network by making your visitors, whether they are consumers or distributors, the hub of the Web site. Let them register to be in your network and give them bonuses for participating. For instance, I met one gentleman who had original drawings from the movie King Kong. I would suggest he create the King Kong fan club and invite visitors to join. What would they want to buy? His drawings, T-shirts, and whatever products he could joint venture from others to access his network. But they'd visit for the fan club.

3. I've set up a telephone company, an appraiser's network, and an artist online. All of these received immediate inquiries for joint ventures from Asian countries like the Philippines, Singapore, Japan, and even China. Not one of these companies did a thing to promote themselves to these markets. Imagine if they did. Why not start networking with individuals, agents, and businesses in foreign countries who can sell your products and services there?

Revenue Stream 7: Bartering

Trading space online for print advertising is a surefire way to generate advertising dollars. Exchange empty space or even a Web page as an advertisement with a newsletter or trade journal. Use space as a way to introduce people to the online world. One Web publisher on the West Coast created a Web site for a radio station in exchange for radio advertising and a link from their heavily trafficked home page. A roughly $5,000 investment of time and resources to create the Web site was multiplied exponentially into radio ad time and Web advertising time.

Trade value for value online, not only with other companies online with whom you might exchange banner ads, links, or even content, but with companies who are not yet online. Ask them for content and a small fee to test-promote their efforts at your site.

Suggestions

1. Create a system of trading to develop your online niche, measured by participation in content development, or generating traffic; the Internet Link Exchange has an interesting model where banner ads are exchanged. The more your site shows ads from others, the more yours is shown at other sites.

2. Look at traditional advertising like newspapers, magazines, trade journals, newsletters, and offer to publish their materials online in exchange for an advertisement, interview, or promotion. Trade a Web site or Web advertising space for an endorsed mailing. Why not find someone with a large group of clients, or a network of business associates, and suggest an alliance? You become the online expert in exchange for access to their audience; offer financial incentives and you'll open doors.

What About Sales?

Notice that I didn't even include sales? That's the mysterious eighth revenue stream—just a trickle right now. It is growing, but in the short term, focus on what is really saving and generating money. Savings increase revenue. Sales will come, but the Seven Revenue Streams can create immediate returns.

Many people come online thinking they will just hawk their wares, but the Web is much more than an advertising medium; it is a means to keep in touch with your audience, to offer them more products and services, and to give them reasons to keep in touch with you. Why waste your time on one revenue stream—sales—like everyone else? You can use the Seven Revenue Streams to generate money now and if the sales come, that will be another stream.

The true goal is not to think of your business in terms of one product or service, but to diversify so you have alternative revenue resources. If one dries up, another compensates. A Web site offers a multitude of values that can solve a variety of problems. The Seven Revenue Streams are also a consulting tool to teach people how to use their Web sites. If you are selling Web sites, what better way to open doors than to counter the traditional online approach of selling technological tricks no one understands and the advertising aspect of the Internet? Why not sell the real benefits that can help people start making and saving money right now?

The World Wide Web is moving beyond the pioneer stage. We've seen the brave leaders jump into the business, crash and burn. How many companies have you read about losing money? High tech is a business based on losses for a few years, but online, the entrepreneurs making money don't look at it that way. We apply the Seven Revenue Streams to milk our sites for money. We're not high tech—we're for profit.

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