Marketing White Belt: Basic Methods of Making Money

At the end of the day, you have to make money in order to pay the bills and stay in business. There’s no avoiding that reality: somewhere, resources must be provided in order for you to do what you do, whether you’re a Little League baseball team or a Fortune 50 mega-brand.

In order to make money, you have to provide something in exchange. As marketers, it’s incumbent on us to understand how our businesses work so that we can understand where and how we provide value, then help share that value proposition with our customers.

While there are nearly limitless ways to provide value, most business strategies fall into four big categories:

1. Product. You make something and sell it. This could be your bestselling social media book, clay pottery, aged cheese, whatever. It can be polished goods or raw commodities, but whatever it is, it’s a thing you sell. In exchange for the goods, you receive money. For most of human history, people made stuff and sold it, and their business fit into this category.
2. Reseller. Someone else makes something and you buy it from them, then resell it. You’re not actually making anything, but chances are you package up the product or provide additional value-added services for it. For example, Walmart buys stuff from manufacturers and resells it to you. Their value-add is ubiquitous locations from which to buy stuff. Amazon does the same online.
3. Service Provider. You do something for someone. Maybe you’re a virtual assistant, a life coach, an email service provider, a stripper, a hotel, a stock broker, or an enterprise CRM in the cloud. You do something for someone, but don’t make any tangible good that you can hand over. In exchange for the service you provide, you receive a fee.
4. Media. While this could be considered a service, what makes the media model different is that the person you’re providing a service to isn’t necessarily the person who is paying you, and you’re not reselling something else. The word media is derived from Latin and literally means in between. In the media model, you aggregate the attention of an audience and then sell access to that audience, standing between buyers and sellers. Broadcast media, affiliate marketers, bloggers, and social media outlets all fit in this category.

Why are these basic archetypes important? Understanding where you’re starting from will lend insight as to where your business can go next and how you as a marketer can help illuminate your value. Businesses have ways to transform the value they provide, including customization and service. Understanding where you’re starting from can guide you where you need to go.

Customization is the act of taking something and giving customers the ability to add or remove things from it based on their needs. How would this look with these archetypes?

1. Product: You can order an iPad with a variety of different features, then add or remove apps to suit your needs.
2. Reseller: Customization is really hard for resellers because you’re not making the products. About the best you can do is package and bundle products together, offering different combinations of other people’s stuff.
3. Service Provider: Add or remove services you need or don’t need. Mobile phone companies have menus of different services that match the size and scope of fast food restaurants these days.
4. Media: As an audience member, you can customize the content and delivery you want, and as an advertiser, you can customize which audience you want to interact with.

Service is the act of taking something and providing helpful interaction with your business. Customer service is most often the basic service use case, but other services like education and training equally apply. How would service apply to the different archetypes?

1. Product: Obviously, customer service applies to fix broken products, but you can also provide education and training. Apple does this especially well with classes, the Genius Bar, and 1-to-1 training.
2. Reseller: Here’s where resellers can make their money – teaching people how to use and get the most out of other people’s products. Stores like Lowes do this especially well, with clinics on how to garden, paint, etc.
3. Service Provider: Service can exist on top of service. Blue Sky Factory, as an example, provides software as a service but adds a ton of customer service, strategy, and training on top of its software service.
4. Media: Most often, media doesn’t do much at all in the way of service, which is a critical mistake. Help your audience understand better what is available and how to make the most of the content you create, and help your advertisers be more strategic and effective in leveraging the audience you aggregate. As part of standing in between two parties, you can help both communicate more effectively with each other.

Finally, it’s important to note that few companies are pure plays in any one archetype. You can make your own products and resell others, or you can make a product and sell a service alongside it. You can be a media outlet and have product to sell directly to your audience. You can be a service provider and resell other services with yours.

The important part isn’t trying to pigeonhole your business into one category alone, but to try and understand which archetypes and models drive the most value for your business. Once you understand your core value propositions, you can be a much more effective marketer for your business.

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