Me: A few months ago you made a decision to increase your prices and ramp up your marketing efforts. You did both of these things in a down economy in hopes of increasing sales and preventing layoffs. Most business can probably understand the logic of increasing marking efforts, but increasing prices, that was a very strategic decision. What steps did you take to implement those changes and how quickly did you see results?

Eric at Gnosis Arts: First we had a meeting with key staff to come up with a new pricing level. (The Business Development Manager, PR Manager, COO, and myself). We listened to each others arguments for or against.

Second, I trusted the judgment of Suzan Pleva, the business development manager. She has a background in sales. It was her idea to raise prices. She comes from a sales background, so her main argument was: “Listen, we have an excellent service, we dominate the market for it (Wikipedia writing services) – we can charge much higher for this and I believe customers will pay it because I believe in the service and I believe that I can convince them to believe in us.” Going through this process, I found that sometimes just doing market research and trying to figure out what the market will bear can leave you shortsighted.

Finally, we did some research and found that top freelance writers, e.g., those that wrote for pubs like the NY Times, etc – were commanding close to $100/hr for their writing services. We were initially charging $36. We felt it we had paid our dues, so to speak, and had delivered an outstanding service to many clients. In addition, we can arguable be considered authorities in the field of technical online writing – so we raised rates to $70/hr and we felt this was fair pricing for our customers.

Me: In the NYtimes.com video you mentioned that sometimes you have to take risks in order to find the reward. Other than your recent business decision to increase prices and marketing efforts, what risks have you taken in your business?

Eric at Gnosis Arts: Well, it was a risk to keep our two main staff – Suzan Pleva and Susan Marie Kovalinsky, even though we didn’t fully see how we were going to justify their wages. And I think anytime you hire someone, you take a bit of a risk. I’ve hired several people who turned out to cost the firm money in the end, and so I had to let them go. I think the key for an entrepreneur is not to take no risks at all, but to take calculated risks.

Me: Do you use your financial data to make decisions? If so, what data do you use? How does it help you make decisions in your business?

Eric at Gnosis Arts: I mainly use the P & L statement to make decisions. It tells me where we might be spending too much on certain services. It also shows me precisely how much we’re spending on staff wages – typically this will be your largest expense. Knowing that helps me with sales forecasting.

I am also a big proponent of using CPA (Cost Per Acquisition). We track our advertising spend and compare it with sales generated to determine the CPA ratio. For example, if I know that it costs $37 in ad spend to generate 1 Wikipedia customer, I can use this data to try to come up with creative ways to reduce that dollar amount. This type of information determines where we will advertise, which ad services we will use, and how much we will spend on advertising in a given month.

Me: What is one mistake business owners make when consider an online marketing strategy?

Eric at Gnosis Arts: One of the biggest mistakes is not getting your tracking right from the beginning. You need to be able to evaluate the effectiveness of a particular online marketing channel in terms of generating leads and sales. Without proper tracking mechanism, detailed web analytics, it is difficult to measure this.

Another mistake I see a lot is focusing too much on only one or two online channels. For example, some people only do social media. Others only do organic SEO. But to be really effective, an online marketing strategy should utilize several online channels, and try to create a synergy among them: email, PPC, online PR, mobile, social media, B2B/B2C freelance sites (e.g., craigslist, elance), etc.

A third common mistake is mistaking correlational data for causal data. For example, we consulted with a novelist who swore up and down that she generates tons of book sales from using Twitter alone. After drilling down into it a little deeper, however, the truth was only that people were purchasing her books elsewhere, and then later found her on twitter and commented that they liked this or that book. She was mistaking this for “Twitter generating the sales.” Though this is a simple example, there are many variations on this theme.

Me: What prompted you to start Gnosis Arts?

Originally, I had no intention of starting a business. I was just following after the things I was passionate about and enjoyed: Internet marketing, writing, music, multimedia. After it became apparent that I offered services that people really wanted and needed, I began seriously thinking about making Gnosis Arts a legitimate, profitable business in 2007. I suppose I wanted to do it, mainly just to see if I could. I didn’t even really think much about profit or prices. When I first began, we used to sell some services for $5! It gave me such a thrill, conceiving a service, doing market research, SEO-ing my website, negotiating a deal – that I decided to make it a business.

Me: Describe the services offered by Gnosis Arts.

Eric at Gnosis Arts:
Writing & Communications
• Wikipedia Writing
• Article Marketing
• News & Press Releases
• Writing Research Tools

Multimedia Web Promotion
• Audio/Video Web Applications
• Upload Photos/Videos
• Mobile Website Conversion
• Mobile Applications
• Chat Box Deployment

Internet Marketing
• Search Engine Optimization
• Submit A Free Press Release
• Get Our Latest Social Media Marketing eBook
• NEW! Twtsynd: Twitter Syndication Network

To learn more about Gnosis Arts visit their website. Follow Eric on Twitter at: @slashcareer.
To be considered for a Small Business Owner interview, please leave a comment on this post.

The debate is out on whether or not social media generates revenues. There are entrepreneurs and businesses that have seen monetary benefits from the use of Facebook, Twitter and LinkedIn. There are also those businesses where the benefit of social media is not about money, at least directly. They benefit from these tools by creating brand awareness or by offering free advice thereby creating goodwill in the marketplace. At some point these non-monetary benefits will generate paying clients; similar to any other marketing method.

In conversations with my business coach I have mentioned how I take a conservative approach to following back followers on Twitter. People will judge you by who you follow or who is following you. In Scott Crytron’s article Just a Tweet Away: Social Media in Accounting Firms, one CPA firms discusses their social networking strategy. While their strategy is very conservative, it fits their business ideals. It is important to develop a strategy that fits you and your business.

Regardless of the industry you work in or the type of business, social media is here to stay. If you are not using these tools, it is time to consider how you can incorporate them into your current marketing plan.

Some business owners feel hesitant to ask their clients for a testimonial, but once you learn this system, this is easy to master. It doesn’t have to be contrived at all. If someone says that they liked your work, just simply ask if you could write that down and use it in your marketing materials. You can also let them know that their testimonial is a great way for them to get visibility as well. (In fact, in the internet marketing world, many people use giving testimonials as a way to get their names out in front of more people.)

Another great way to gather powerful testimonials is to write them yourself. Because your clients may be busy, you can offer to write down what they said and send it back for their approval. This can insure that it will get done, and if you have a good relationship with your client, it will make it easier for them to help you.

What elements make for a great testimonial? Let’s start by talking about what you don’t want to do. Listen to how generic this one is:

“Working with John has been a good experience. John has a great program and I am quite satisfied with the results.” –T.G., California

That’s usually the first kind of testimonial your clients will give you, so you have to coach them a bit to be clear and more precise about how they benefitted from working with you.

The following questions make for a great format for them to answer-

1. Where were you before we started working together? (You want to focus on their pain or what wasn’t working for them)

2. Because you were there, what wasn’t working?

3. What had you tried?

4. During our work together, what did we do?

5. What was the result of that? (Be as specific as possible! If you can monetize or quantify the result, that’s even better)

6. And now what’s different?

So if we take those points and rework the watered-down testimonial, it can be like this:

“John, you were a lifesaver! Before I started coaching with you, my business was not generating enough revenue for me to even pay my employees. I was frustrated and felt like throwing in the towel. I had tried other coaches and had attended a few seminars, but couldn’t find the key to turn things around. Then my friend Amy recommended you, and I’m glad she did. You put me through your 12-week “Business Turn Around” program and wow…the results are amazing. Since being in your program, I have been able to create my marketing message in a way that attracts the right customers to me. As a result of this, my business has increased 30% and I’m not only making a profit, but feel so much more credible as a business own er. And thanks to you, I am now working on two more product offerings, so will have an even more leveraged business. I’d recommend you to anyone who wants to get great results – quick!”

-Tom Gannon – www.thegannongroup.com (name and domain are fictitious)

Want to make it even more powerful? Get a photo, audio, or even video. That’s the #1 way to have people feel like you are the go-to person in your industry!

Now it’s your turn. Think about your top five clients. Do you have their comments recorded? If not, just create a plan to get what they love about you captured and onto your marketing materials. You’ll be glad you did.

(c) 2009 Therese Skelly. Discover a simple, yet surprising secret to getting unstuck in your small business by visiting www.HappyInBusiness.com and signing up for her next free workshop