To better understand what a Third Stage Business is, let’s talk about what it isn’t. It’s probably more that you think.
A Third Stage Business is not “just a membership program”, it is not a “continuity program” or even a “forced continuity program”. It is not a way to make more money from people through taking advantage of their intelligence, lack of knowledge or time.
My biggest objections with almost all these so called “continuity programs” is fundamentally it comes down to a “marketing scam”. Sorry for being rude or harsh. I call them as I see them. One day, some body thought, “jeeze, instead of selling my stuff on a DVD, why not do the same thing but put it online and make people pay me for that knowledge in a membership area. This would be a good way to make a residual income. Some people might be stupid enough to stay for months because they forget.”
The rule for a Third Stage Business is, if it is the same content people can get from your DVD set and you’re forcing people to join your membership program and force them to pay a continuity program…you are not offering additional value. It violates the First Rule of business: “Offering to your client more value than what they are paying you”. Simple as that. Unless it is built on this principle, it is not built to last. It is near sighted and short term.
Another thing I’ve seen recently is to sell something of high value at at a ridiculous price, and then trick people into joining a “continuity program” in the hopes that they forget…thus making money from people from their lack of time to implement what you have to offer. These sorts of practices are why people object to marketers and what common people refer to as “marketing scams”. When you stick to the First Rule of business, then this sort of accusations would never happen.
If you are one of these people, then I only hope that you will continue reading this series and adjust your approach.
What is a “Third Stage Business”?
A Third Stage Business is a company that offers genuine ongoing value for the client’s continued patronage. It is a business philosophy and a set of methodology that builds mutual benefits both to the business and the client that come to depend on that business.
Let’s apply the above definition to the previous example of some so called “continuity programs” you’ve seen or may be practicing. If your members are paying you a monthly fee, are you offering them genuine ongoing value/benefit for that patronage or is it self serving. If it is self serving, then it is not a Third Stage Business. Simple as that. What you have is a money making scheme.
Let’s take a look at some classic Third Stage Businesses.
Your telephone company. As business people, we need to communicate with our clients, our friends, vendors and employees. If we don’t pay our telephone bills, our telephone goes offline…we stop communicating….we stop doing business.
Does the telephone company satisfy the above definition of a Third Stage Business? Yes.
Let’s take my previous company 1Shoppingcart.com. 1Shop is a e-commerce service provider. It makes it easy for clients to conduct commerce and offers ongoing support, improvements and the ability for its clients to make money online using their system. If you stop paying your service bill with 1Shop, they discontinue your service…you can’t conduct business.
Does 1Shop satisfy the definition? Yes. The key is; ongoing mutual benefit. The benefit is to the client for being able to conduct commerce, and for 1Shop because it enjoys a residual income from the patronage.
What about an MLM independent distributor? Typically, these companies are tied to some sort of nutritional products. ie. Vitamins, weight loss product or meal replacement product. ie. Every day consumerables. Clients continue to buy from the MLM distributor month after month…thus providing a mutual beneficial relationship.
Let’s now take something closer to home: information marketing.
How can we transform an information marketing business into a Third Stage Business? In order to understand how this works, let’s go back to basics. Information marketing works based on these very simple techniques:
A guru did it.
Her followers did it.
She can TEACH ME how to do it…so I can do it too.
One fundamental shift between a traditional Second Stage Business to a Third Stage Business is very subtle but very profound. It goes like this:
A guru did it.
Her followers did it.
She can COACH ME how to do it…so I can do it too.
Not all businesses are well suited to become a Third Stage Business. For example, if you sell jewelry, furniture or plants, then you are likely not ever going to be a Third Stage Business.
Why Be a Third Stage Business?
As we are talking about a Third Stage Business, we need to understand the underlying motivation behind being a Third Stage Business. It’s not as obvious as you might think.
A Third Stage Business is not just about creating residual income. Creating residual income is in fact a consequence of following the methodology of a Third Stage. It is also about the methodology through which we deliver our content to our customers. It’s a way of reinventing ourselves for the era of New Media.
A Third Stage Business is about bring more people into your circle of influence through conversation and adding value. It is about giving more value than focusing on being self serving. For example, if you are a consultant or a coach, often times, you follow a specific set of methodology or processes you provide every new client; often for free. Using our methodology, we can show you how to offer your clients more value through automation such that it will require you spending less time on the phone with your clients.
If you are a speaker who is used to sending direct mail to your clients to invite them to a live presentation with the hopes of closing them on a larger ticket live event; I’m sure you are experiencing a dramatic drop in attendees. We can show you how you can use our Third Stage Business methodology to re-invent yourself to take advantage of Social Media and increase the reach of your audience.
Ultimately, the reason you would want to become a Third Stage Business is simply a matter of survival. If you continue to do what you’ve always done and expect different results…it’s called insanity. If you continue to do what others have done, you will continue to get the same result as everyone else. By reinventing yourself, you will have the opportunity of leapfrogging your competitors and thrive in the new economy; in New Media. That’s why you want to be a Third Stage Business.
In the next installment, we will go into the characteristics of a Third Stage Business as applied to Information Marketing. Please refer this article to your friends. As soon as I receive 1000 unique visitors to this article, I will release the next installment.
Sincerely
George Tran
Author of “The Social Marketing Manifesto”
Success Strategies for Small Businesses using Social Media
www.socialmarketingman.com
www.twitter.com/georgetran
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