As a start-up, Twitter raised $55 million of venture capital and now has an estimated value somewhere in the region of half a billion dollars. Even your own Twitter account could be worth something: according to TweetValue.com, sitepointdotcom is worth $10,991 and Stephen Fry is $42,542. Even my own paltry effort is worth $25 (all bids considered!).

It’s not bad for a company that is yet to earn a penny. So why is Twitter worth so much, especially during an economic downturn?

One possible reason is that Twitter captures the very essence of people’s interests and aspirations the moment they have them. Let’s say I’m considering buying a Foozle. I’ve looked around, tweeted about it, got a few responses, and found a best price of $100. At that very moment, Foozle Corp contacts me directly and offers their top-of-the-range model for $80. They have caught me at my most vulnerable time; I’m actively considering a purchase and will probably proceed without looking at alternatives. I’m also likely to rave about my savings in subsequent tweets.

Dell is one company that is already benefiting from this type of marketing; they recently announced revenues of $3 million as a direct result of Twitter posts.

Twitter’s value owes much to the data-mining possibilities:

1. The service is unbiased, independent, and free.
2. Users represent a broad cross-section of society.
3. Twitter usage is growing at an exponential rate.

However, Twitter cannot survive on potential alone. They need income and are reportedly looking into ways of monetizing the site. CEO Evan Williams has stated that he is not opposed to banner advertising, but was unenthusiastic as it would be “the least interesting thing to do.”

One option being considered is an authentication service; companies would pay to ensure impostors do not send messages in their name. Technically, that could be a tough one to implement.

But Twitter must be careful. If they start charging for any aspect of their service, they will reduce the number of existing users and new sign-ups. It could also skew membership toward those who have the biggest financial benefits: the corporations.

I can’t see many options other than:

• Advertising. Unfortunately, adverts would probably need to be added to tweets since many people use third-party services rather than Twitter.com.
• Data-mining tools. Companies might pay for Analytics-like tools, although many are already available since much of Twitter’s data is exposed via their API.
• A better API. Perhaps they could charge for improved data access?

Speculation will remain rife until a final decision is announced. Can Twitter raise revenue without losing members?

The concept of incentivizing other people to promote your product is actually one that works remarkably well for us, in fact (our own affiliate program offers individuals $8 per book sold — far more generous than that of other publishers or resellers). In fact, our marketing manager, Shayne Tilley, is even capturing some of the wisdom behind that program (and others like it) in an upcoming book about Online Marketing.

There’s also no shortage of visitors to SitePoint who have discovered that affiliate marketing can work very well. The success of the SitePoint Marketplace is testament to the number of web entrepreneurs who spend their days building sites in order to monetize them through advertising or affiliate programs. It’s an exciting area to be in, and also one that in recent times has its challenges as online advertising dollars get scarce.

It’s no surprise, then, that SitePoint has signed on as a media partner for the inaugural Affiliate Convention in Denver, Colorado next month. What’s unique about this conference is the fact that the organizers are taking the concept of benefiting from an affiliate partnership to a whole new level — affiliates for the event are actually invited to attend for free! For a ticket that would normally set you back $675, this is definitely an interesting move by the organizers (and obviously a great deal for those who are interested in learning more about affiliate marketing).

The event runs from June 17-20, in Denver Colorado. Register as a sponsored affiliate to take advantage of the offer to attend for free.

You can provide analytic tools, such as those listed by Rick Tansun, but few clients will understand those applications or the reports they generate. What clients really need is help to make sense of the figures.

Statistical Pitfalls

In my experience, the loudness or frequency of a person’s request for web statistics is inversely proportional to their understanding of them. Confusion often arises because:

1. Statistical terms are misunderstood
Many people equate hits with unique users even though a “hit” is a single file request. One view of this SitePoint page generates more than 50 hits. You can understand why press releases refer to 50,000 hits rather than 1,000 page views or 100 unique users.

2. Statistics are assumed to be accurate
Computers are independent number-crunching machines so reports must be correct? If that were true, the figures generated by different analytic tools would be identical – but they rarely are:

• Different methods of data collection are employed. For example, AWStats analyses web server log files whereas Google Analytics uses client-side JavaScript code.
• No data collection method is perfect. Log files do not contain requests for files cached on the user’s browser or proxy servers. Similarly, people who disable JavaScript are invisible to Google Analytics.
• Each tool makes different assumptions. For example, one system could assume that a single visitor session will time out after 20 minutes of website inactivity. Another might choose 15 minutes or add 5% to figures to account for people with JavaScript disabled.

3. Statistics cannot be gathered retrospectively
Statistics are only as good as the data collected. Clients often ask for information that sounds reasonable, e.g. “how many of my customers are female?”, but it is impossible to determine that figure unless you have captured the appropriate information first.

Statistical Services

Statistics can be offered as a separate service or included as a value-added feature within your website quotations. Typical services that raise your level above competitors include:

1. Cheat sheets
Documents are provided which:

• explain terms such as hits, unique visitors, visits, page views, bounce rates, depth of visit, landing pages, campaigns, goals, etc.
• help the client use and understand the reporting tool.

2. Training and Support
One or two hours training is usually enough to explain web statistics, technical issues, and how the client can make best use of the reporting system. You could also provide ongoing support, refresher courses, or advanced training adapted to the client’s requirements.

3. Summary Reports and Analysis
Whilst statistics may be interesting, what the client really needs is concise, solid marketing information, e.g. product X sells better at the weekend, articles about topic Y receive 50% more visitors, marketing campaign Z resulted in 100 sales. Gathering that information requires technical expertise and could be worth thousands to your client.

These services may be time consuming, but they also provide further opportunities to meet your client and help them increase sales. Your business relationship will grow stronger and, the more successful they become, the more work they will put your way.

Do you sell statistical services? Are you considering it? Are your clients making the most of the information?

(CC) Randy Stewart, blog.stewtopia.com.

One of the highlights of SxSW for me was a keynote delivered by Zappos CEO, Tony Hseh, who also runs a very insightful business blog.

Las Vegas-based Zappos started in 1999 by selling shoes online, and has since grown to a $US1 billion per year retailer. It has expanded into clothing, handbags, sunglasses, and numerous other categories.

Early on in its life, Zappos made a deliberate decision to re-direct its marketing budget towards delivering exceptional customer service with a great company culture, helping the business to thrive where others have failed. Tony highlighted many deliberate decisions that the company made with the long-term view in mind, such as:

• encouraging customers to order as many products as they wanted in order to “try them on,” then offering free return shipping for a full 365 days
• only listing products on the site when stock was in their own warehouse (which actually lowered sales by 25% at a time when the company was still in the red)
• deciding to run their warehouse operation 24/7 to deliver super-fast turnaround on orders, despite it being an inefficient way to manage fulfillment
• encouraging customers to call them about nearly everything. Their call center takes 5,000 calls per day, and employees work independent of scripts, quotas, or call time limits. The longest call to date has been four hours. Zappos views the phone experience as a branding device, and speaks to virtually every customer at least once.
• deciding to invest in “surprise” (free) upgrades to overnight shipping for most customers. This means that most orders are delivered within 24 hours, despite the web site indicating it will take 2-5 business days.

Decisions like these are rarely undertaken today in corporate America. Instead, many businesses compete on price instead of service, reign-in customer service expenses as tightly as possible by outsourcing to call centers, and implement key performance metrics like upsell percentages and average call times that agents are expected to meet.

Tony shared the story of a late-night outing with a few vendors, where one of their clients had a craving for pizza and decided to half-jokingly call Zappos customer service for help. After a brief pause, the customer service agent researched and provided a list of nearby pizza parlors that were still open.

Company Culture

Company culture is important from the start. Zappos conducts two separate interviews — one focusing on the applicant’s background and experience, and the second one on cultural fit. Over the years, Zappos has passed on numerous experienced employees for the simple reason that they were wrong for the company culturally.

The emphasis on cultural fit extends to the training process, where new employees cycle through work in the Kentucky warehouse and call center, and receive lessons on company history and core values.

What are Zappos’ core values?

1. Deliver WOW through service
2. Embrace and drive change
3. Create fun and a little weirdness
4. Be adventurous, creative, and open-minded
5. Pursue growth and learning
6. Build open and honest relationships with communication
7. Build a positive team and family spirit
8. Do more with less
9. Be passionate and determined
10. Be humble

Nothing on the list is particularly unique, but what makes Zappos different from thousands of other companies is that they live those values, instead of just hanging them on the wall. For example, to exercise their open and honest relationship value, the company opened its extranet to 1,500 outside vendors who can now view what products are in stock, how many are selling, and even what the profit margins are.

“Once a company compromises too many times on its core values, the entire culture goes downhill,” says Tony Hseh. Every year, the company reinforces its core values by publishing a 500-page culture book with unedited contributions made by employees and vendors. They distribute it company-wide, as well as to anyone who wants to purchase a copy. The company even opens up its Las Vegas offices for free tours, and welcomes companies like Southwest Airlines to spend time watching Zappos’s call center operations, recruitment practices, and training.

Jim Collins, author of Good to Great quotes, “It doesn’t matter what your core values are, as long as you have them and everyone is aligned, moving in the same direction.”

If you’re a regular in our marketplace then you’ll want to keep an eye on this competition — the World Championships of Web Site Flipping are happening (a first for the site flipping industry, I believe), proudly sponsored by SitePoint.

Check out all of the contenders that have been spotlighted on the site — nothing really in there to suggest the talents of these flipping warriors, but fun if only to put some real faces to names in the site flipping industry.

There are a stack of prizes on offer — up to $20,000 worth, and that includes a copy of SitePoint’s Web Site Revenue Maximizer kit.

Watch the SiteFlipAcademy blog for more details as they come.

I’m a bit late reporting this, as the date for registering to compete has passed.Chaunna from SiteFlipAcademy informs me that it’s not too late to register and be involved. “You have until July 12th to flip like crazy and the score cards (that you’ll receive in the contender kit) need to be submitted by the 16th.” So if you’re interested in getting involved, get flipping!

But here’s one simple reason why you can never EVER forget why site performance is so important.

In the last few weeks we’ve upgraded our our blogs and moved our forum to the latest version of vBulletin. Very quickly our sys admin became concerned with the growing pressure on our servers. I’m no expert, but even I could see the dramatic shift in some of the utilization graphs I was shown…

The tipping point was Wednesday and we raised the priority of some longer term plans as well as implemented a quick upgrade to our server hardware (a couple of shiny new AMD Opteron Dual Core CPU’s.)

The effect was instantaneous and dramatic. Our response times were better than before the upgrades…

Result: The next day, bang, a 33% increase in our forum traffic!

So you can search engine optimize to your heart’s content, run A/B split testing, run advertising campaigns, made sure your design is accessible and usable, but it your servers can’t deal with the traffic, you’re slamming the door in visitors faces. And with so much choice these days, they’re not going to wait in the cold outside - they’re off to visit your competitors.

But if you’re yet to find that killer strategy to earn a profit from the Web, I’d like to introduce you to a brand new product that’s going to make your journey to online prosperity simpler, easier, and oh so much faster…

The Web Site Revenue Maximizer

By Peter T. Davis & Georgina Laidlaw

Niche sites with the right content and monetization strategy are extremely valuable assets and this new SitePoint kit will walk you through, step-by-step, how to generate profit from the Web. You’ll learn from the pros just how easy it is to plan, build, and earn a steady income from your online portfolio.

Then, when you’re ready to cash out, you’ll learn how to flip your sites for profit.

It doesn’t matter if you’re new to the Web, or you already own a couple of sites. You’re sure to find some amazing nuggets of wisdom which will ensure this kit pays for itself again and again…

Here’s a just snippet of what you’ll learn:

• Turn small sites into a growing income.
• How to achieve affiliate marketing success.
• Use your online content to generate revenue.
• Flourish in the competitive ecommerce market.
• Learn how to buy, renovate, then flip your site for profit.
• Build a web estate portfolio for a steady income.
• And much much more…

So go order a copy and discover how niche sites with the right content and monetization strategy can become extremely valuable assets.

Well, the site is now for sale with a minimum bid of $50,000 and a Buy It Now price of $100,000.

While the concept of playing chess on the computer is not new, what makes CrowdChess different is its approach to team games — rather than your standard one-on-one fare, games of chess are played by groups of people who vote each hour, digg-style, on the next move to be played. In what some consider to be the ultimate duel of the mind, this popular web application is also the ultimate test of whether the “wisdom of the crowd” can improve or hinder the decision-making process.

In fact, the featured game on CrowdChess at the moment is between Grand Master Gawain Jones and everyone else. By that, I mean that literally anyone can become part of the team and cast votes on the moves made against this high profile opponent. If you’d like be to be part of the team that defeats (or loses to) a grand master, it’s not too late to get in on the action.

CrowdChess’s sellers are offering to include a business plan as well as consulting to ensure a smooth transition to the successful buyer. If you’ve got a mind for this kind of duel (and a cheque book to match) then check out the auction page.

Send your customers an offer they can’t accept

There nothing quite like sending a customer a letter, or an email with an offer so wonderful that they’re ready to buy. Only to find out “sorry - we don’t ship there” or “that service isn’t available at your address”. Don’t make promises you can’t keep!

Give customers a call to action that doesn’t work

The main purpose of a direct mail piece is to get a customer to act. That action might be to click a link, visit web address, or dial a phone number. If your direct mail achieves that – its done its job. So when that action is completed, you better be ready for it! Nothing converts quite like a 404 page or a phone number that’s disconnected.

Send your customers better deal on a product they already own

Talk about rubbing your customer’s noses in it. These days people are aware that offers change over time. How many of us have bought a TV, only to find it on sale the next week, or Apple’s price drop on the iPhone. So if they see an ad on your site, or hear something on the radio, most people will feel unlucky, but not angry. Send them a direct mail, with their name on it, offering them a better price something you should know they already own — now you’re asking for trouble.

Don’t unsubscribe your customers when they ask

When a customer asks not to hear from you about a particular product, or to not hear from you at all, then act on that request. I don’t like your chances of selling a product to someone who’s clearly nominated they’re not interested – nor will you sell anything to the 10 other people they tell “they just couldn’t get you to go away!”

If a customer asks you a question, don’t respond, they don’t deserve it

If a direct marketing piece prompts a customer to ask a question, then the sales 90% complete. Don’t answer and I can guarantee it’s lost, answer promptly, comprehensively, and courteously, there’s a pretty good chance you’ll make the sale.

Unfortunately over my many years as a marketer I can associate myself with just about all of the above. But the best thing about making mistakes is that you learn from them, so perhaps you can learn from mine…

Feel free to add your own direct marketing tragedies.

As is the case with many markets, online and off, there exists a healthy competition between the owners of these two competing sites. And as is often the case with individuals who enjoy talking about the money they make, this translates into a bunch of trash talk, teasing and a fair amount of back-and-forthing. For the readers of the blogs, this is no doubt highly entertaining, and probably drives traffic to both sites in question.

This latest stunt caught my attention — a competition to build a blog from scratch in a designated niche in 30 days, and see who can sell it for the highest price on the SitePoint Marketplace:

Instead of seeing who can make the most money with the blogs, lets invest 30 days into developing, marketing and building the blog and then list them for sale in SitePoint and see who can get the highest successful winning bid on selling it? The person who can sell their niche blog for the highest amount in a NO RESERVE Sitepoint auction wins the game. Both sites will end up selling and the runner up who sells for less, transfers their earnings to the winner of the game.

Details surrounding the rules of the competition are still being fleshed out, but I’m watching this one with a keen eye! In fact, I think I’ll start taking bets around the office on who will be victorious.

Pick a team and follow the action (either at JohnCow.com or GarryConn.com).