Whom Do You Serve: Customers Or Advertisers?

If your online business depends on relationships with your visitors or customers, ask yourself this question…

Are the relationships you create built on the needs of your customers? Or are they driven by the demands of your revenue model?

To show what I mean, let’s say you have an information site aimed at farmers:

Your site is rich in content but also pushes information to an opt-in subscriber base through a “Farmer Alert” service. If I’m a grain farmer from the Midwest, I might sign up for your weather alert, fertilizer price alert, and grain price alert.

This is good for you, because I’ve opted in to receive quite a bit of information from you via email. Naturally, you’ll find a sponsor for each alert sent out.

For instance, you can carry an ad for a crop insurance company with the weather alert. An agrochemical company can support the fertilizer alert. And one of the seed companies can advertise within the grain price alert.

Nice model. Everyone benefits.

Now let’s say that the money generated by these sponsored alerts makes up a significant proportion of your revenue. As your company grows, so do your costs, and the pressure is on to increase the number of alerts going out. After all, you have a lineup of willing sponsors and a limited number of subscribers. The easiest way to increase your revenue is to increase the number of emails going out.

This is where the problems can start.

Instead of receiving two emails a week (each containing very valuable information), now I’m getting five emails a week, and the quality of the information is falling a little. After all, you have to find something that can count as an “alert” to justify those extra, revenue-generating emails.

Back when you planned this model, you likely figured that it would be driven by the needs of your customers. Goodness knows farmers need a lot of timely information.

But now you are changing things based on the demands of your revenue model. You’re sending out more alerts than your farmers really need, because you can make a lot more money if you do.

For the first little while, most of your subscribers probably won’t notice what’s happening. In fact, they may be pleased to see that they are receiving even more information. And almost none of your subscribers will say, “Gee, those greedy alert folks. They’re padding their alerts to increase their sponsorship revenues.”

But they will sniff you out.

Customers may not be able to put their finger on what is happening in a circumstance like this, but never underestimate their ability to sense when something is not quite right. They’ll know it when the model shifts from serving their needs to serving the needs of the revenue model. And when that happens, the relationships you have created with your subscribers will begin to suffer. They won’t trust and respect you as much anymore. They won’t trust the importance of the information you provide to the same degree.

And when trusts fades, so does loyalty.

You lose customers.

And then some smart fella in your marketing department will think, “Hmmm, how can I make up the revenue I’m losing because of my shrinking subscriber base? I know! I’ll send out two alerts a day instead of just one!”

Dumber things have happened.

The moral of the story is, never forget that at the very end of the day, it’s the relationships you have with your customers that pay the bills.

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