Dial 1 900 For Profits

Would you like to​ start a​ business in​ which you don't have to​ make anything and your product is​ information, but can earn profits of​ more than 95 percent? Of course you would .​
Such a​ business does exist and is​ predicted to​ be a​ 20 billion dollar a​ year industry by the year 2000.
New technology in​ the telecommunication industry, now offers hundreds of​ ways that entrepreneurs can make huge profits operating a​ Pay-Per-Call business .​
This business will make hundreds of​ fast-track entrepreneurs rich during the 1990's .​
Why not you?
Several Information Providers (nicknamed IP's in​ industry circles) are now grossing between $5,000 and $50,000 a​ month by providing information on a​ pay-per-call basis .​
For a​ very select group of​ IP's, monthly income exceeds $100,000 .​
And for a​ few (mostly in​ the provocative sexually explicit field) monthly income has reached upwards to​ half a​ million dollars!
This very hot new business opportunity is, the fastest growing, most exciting, money-making opportunity of​ the 90's.
This business is​ the 900-number telephone information service .​
In this business, unlike toll-free 800 numbers, every time someone calls your 900 number, a​ charge appears on his phone bill, and you make a​ profit .​
The caller pays for the information or​ service he receives via his phone and the phone company acts as​ your collection agency.
The per-minute charge makes this business interesting and profitable .​
Charges range from as​ low as​ 50 cents to​ as​ high as​ $50 per minute; during his lunch hour, a​ stockbroker in​ New York charges $50 per minute to​ give hot stock tips to​ 900 number callers.
You may already be familiar with some types of​ 900 number services; sport updates, weather and traffic updates, romance and dating lines, and so forth .​
However, these common services only scratch the surface of​ the fascinating information you can provide through a​ 900-number program .​
Consider these two successes: Surf line and Alaska Men's Magazine .​
The former is​ a​ local Malibu, California-area, number that provides instant updates on surfing conditions .​
Surfing fans, who live for that perfect wave, often call this number several times a​ day and spend about $1 a​ minute for the privilege.
Alaska Men's Magazine's 900 number sells information about eligible bachelors who live in​ Alaska .​
It is​ an​ instant personal/mate wanted advertising service .​
It is​ successful because few women live in​ Alaska, so many Alaskan men are looking for spouses, and many women in​ the lower forty-eight states are looking for husbands.
America's Funniest Home Videos invited the nation to​ help select the winner of​ the $100,000 grand prize for the funniest american home video .​
One annoucement made by the host, Bob Saggett (lasting approximately five minutes), resulted in​ another $250,000 program grossing, by my calculations very nearly enough to​ pay the the $100,000 grand prize .​
This next example is​ the cream of​ the crop.
The Wheel Of Fortune ran a​ 21 day program .​
Each week Pat Sajack invited callers to​ call and play Wheel Of Fortune .​
The cost of​ the call was $2.00 per minute .​
Through the course of​ 21 days The Wheel Of Fortune received 4.7 million calls.
That's 4.7 million calls, not minutes .​
The average number of​ minutes each caller was on the line was five minutes and the average cost of​ a​ call was $10.
Forty-Seven Million dollars was grossed in​ less than 30 days.
This is​ only a​ small sampling of​ the many uses a​ 900 line can be used for
Dozens of​ categories for 900-number services exist, but they boil down to​ four basic concepts: romance, financial, maintenance, and entertainment.
Romance line- that is, true confession, dating, and similar topics--now earn about 80 percent of​ all industry revenues .​
However, like the video industry, that situation is​ changing rapidly as​ the business becomes more professional and offers stronger concepts to​ consumers.
Financial appeals to​ people's urges to​ make money, save money: stock and bond price lines, sports updates for gamblers, and horse racing lines .​
Maintenance refers to​ technical support lines .​
a​ computer operator, for example, must call a​ technical support number because they are having problems with either there software or​ hardware.
Entertainment refers to​ everything else, mostly for recreational purposes: miscellaneous products and services,soap opera updates, rock stars, and contest.
To satisfy these four basic concepts, you can offer one of​ the five methods which your target market can call:
* Interactive auditext--pre-recorded messages responds to​ caller's choice.
* Live audio: an​ operator or​ group discussion interacts with a​ caller .​
Obviously, this is​ more expensive for you to​ operate than pre-recorded messages.
* Interactive video: a​ caller's personal computer retrieves text and graphics from an​ on-line data base.
* Facsimile: sends pre-stored faxes of​ printed information in​ response to​ caller request .​
News reports, stock reports and so forth can be made available through pre-programmed computerized fax services.
* Messaging: callers leave recorded messages, such as​ their name, address, product specifications, order information, etc.
Once you choose a​ method that suits your concept, you have to​ decide whether to​ market it​ locally or​ nationally .​
a​ national line uses a​ 900 number offered through one of​ four national common carriers .​
Telesphere Information Services 900, AT&T, Sprint Gateways, and MCI .​
Or, if​ you want to​ start locally, you can contract with your local telephone company for a​ local or​ regional 976 line.
T .​
Harv Eker, a​ young California entrepreneur known as​ the Biz Opp Wiz, said in​ a​ recent report on 900-number service business, I​ recommend that a​ small infopreneur start with a​ local 976 number to​ learn the ins and outs of​ this risky business .​
You can study your target market and test your advertising and your service idea for far less than it​ costs to​ start a​ 900 service.
Experts show that eight or​ nine out of​ every ten 900 services fail .​
However, if​ your concept hits big, you can make phenomenal profits .​
And you can reduce your risk by following the experts' advice about how to​ choose and market the best idea.
Russ Blackwell, an​ executive with Microlog Corp., a​ major 900 service bureau explains, In 90 percent of​ the lines, call volumes do not reach anticipated levels .​
The services may still make money, but they often do not make as​ much as​ the infopreneurs expected.
The reasons this occurs are numerous.
First, people's profits fall short of​ their expectations because they got overly excited about this business and forecast profits far higher than any they should reasonably expect.
Second, people try to​ sell bad ideas .​
For example, Blackwell says, One service tried to​ sell insurance to​ the elderly .​
It was a​ legitimate application, but hardly anyone called because senior citizens rarely use 900 numbers .​
They think it​ has a​ stigma, and they prefer to​ make toll-free calls.
Instead, Blackwell asserts, the largest target market research young people between the ages of​ fifteen and twenty-five--in short, impulse buyers.
Other seemingly good 900 information ideas that flopped include quilting information and gardening information .​
Why did these ideas fail? They did not meet the essential criteria that experts have learned make a​ 900 number successful.
1 .​
PERCEIVED VALUE: People must believe they receive a​ high value from the information .​
They must think that the information is​ worth the price of​ 95 cents a​ minute, $25 a​ call, or​ whatever the service charges .​
If people can get the information for free or​ cheaper elsewhere, they will not use
your service.
Jim Coffee, General Manager of​ Audio Communications, Inc .​
(ACI), insists, You must carefully identify your target customer and offer very significant value .​
By target customer, he means you must analyze the demographics and buying habits of​ your potential callers.
He adds, The success of​ your program depends on two elements: first, your content, which is​ measured by the average hold time (AHT); and second, the quality of​ your marketing or​ your advertising measured by the number of​ connects or​ calls.
AHT means that your callers are willing to​ stay on the line and listen to​ the entire message or​ to​ interact with the program or​ the operator .​
Your content must encourage them to​ stay on the line and increase their charges.
2 .​
IMMEDIATE VALUE: Futhermore, your callers must perceive that they need the information you offer right now--IMMEDIATELY .​
This factor is​ why Surf Line succeeds--surfers want to​ hit the perfect wave right now-- and Quilt Line failed--quilters can mosey over to​ the library and lock up the right stitch when they feel like it.
3 .​
REPEAT CALLS: Once your callers reach your information service, they must call back again and again .​
Your content must repeatedly satisfy a​ continuing need .​
Stock prices change every day, the weather changes every hour, traffic conditions change often during rush hours, people often want to​ make contact with potential dates .​
Repeat calls make or​ break this business.
Eker notes that your 900 service must also make the information convenient and easy to​ reach .​
It must be far more convenient than any other method or​ medium .​
a​ caller should only push a​ few buttons to​ reach the desired information, or​ go only through one operator.
Your first task is​ to​ think of​ a​ concept that meets these criteria .​
Second, you must identify an​ easily reached target market .​
Eker advises that you start with a​ tried-and-true category at​ the local level .​
This could include sports line or​ conditions line-local beach, skiing, vacation, traffic, or​ similar line that affects people's leisure or​ driving time.
Most important, you must develop a​ highly targeted marketing plan to​ reach you audience .​
To do this, find out from your local media--newspapers, radio, TV, cable, magazines, etc.--about their audiences .​
Then, select the media and develop advertising that will reach your audience.
As one example, a​ traffic line will be most popular in​ the mornings and afternoons during prime drive times, so a​ local radio advertisement targeted at​ young workers who listen to​ a​ rock station may make sense .​
Unfortunately, in​ the radio business, drive time is​ prime time, and you pay higher rates .​
You could explore placing some less expensive radio ads just before prime drive times begins (about 7 a.m .​
and 3 to​ 4 p.m .​
in​ most markets) to​ reduce your costs .​
You should blend a​ series of​ ads, some before, some during, and some after drive time to​ reach the greatest number of​ people.
On the other hand, Eker says, sharing a​ little known secret, The best place to​ advertise a​ 900-number services may be your local cable TV channels .​
Although most people don't know this, you can buy local cable TV ads placed on national cable channels very, very inexpensively--as low as​ $1 per minute for local broadcast TV .​
Each local Tv company receives two minutes per hour for local advertising on each channel .​
So, for example, you could advertise a​ Sports Line on ESPN, WTBS, TNT, WOR, or​ WGN and reach almost all the sports fanatics in​ your area .​
And do so for as​ low as​ $12,000 a​ year.
In short, you must thoroughly, search for the best marketing alternatives and have the available financial resources to​ buy advertising.
Once you think you have a​ terrific, saleable idea, getting started in​ this business is​ very simple .​
Although you could buy your own equipment to​ hook up to​ the common carriers, that equipment can cost tens of​ thousands of​ dollars .​
Instead, use what is​ called a​ service bureau.
A service bureau handles all of​ the operational details .​
You simple pay its start-up charges and on-going fees and make your information available .​
You either provide cassette tapes or​ call in​ to​ change the information as​ you need to​ do so .​
It takes as​ few as​ two or​ three days to​ get your service on line.
Or, in​ an​ interesting variation, you can work with another information provider (IP) in​ a​ joint venture to​ sell a​ service that the other often larger IP cannot do .​
Many major newspapers and magazines are using joint ventures and partnerships to​ establish line services .​
In this case, you may receive a​ percentage of​ the profits, usually 25 percent, a​ royalty, or​ a​ continuing fee.
Coffee's ACI and other service bureaus that double as​ information providers also offer joint ventures and partnerships .​
If you don't have the money to​ carry a​ marketing program, this may be a​ good way to​ go and reduce your start-up costs, yet lets you get started in​ this lucrative opportunity.
Another secret to​ this business, says Eker, is​ that you must be prepared to​ cut your losses--FAST .​
You should also plan a​ to​ test a​ range of​ program concepts through various media .​
This business works like the direct mail and catalog business .​
You must test your services, prices, and advertising again and again to​ find the right formula .​
When you hit it​ big, you then should run with the winning combination .​
But if​ an​ ad doesn't draw many callers, or​ even if​ the call volumes are just not high enough to​ make the profit you want, discontinue the service quickly and try something else .​
Or better, have another services already underway.
When you hit, you can make amazing high profits .​
On average, 900 numbers charge $1 for the first minute and 75 cents for additional minutes .​
The average call lasts three to​ five minutes, so your revenues per call average $2.50 to​ $4 .​
If you invest $40,000 you only need 10,000 to​ 16,000 calls to​ break even.
Your cost on each call will equal $1.50, giving you a​ profit margin of​ about 40 percent per call before you deduct your overhead, operating costs, and taxes.
Here is​ what a​ typical month's revenues, expenses, and resulting profit might look like:
Monthly Revenues: $100,000 (25,000 calls at​ $4 per call)
Fees to​ the Carrier: $40,000 (average 40% of​ gross)
Fees to​ service: $3,000
Marketing: $40,000
Overhead: $10,000
Total expenses: $93,000
Monthly profit: $7,000
If you invest $60,000 in​ the total start-up, your return on your investment per month would equal 11.7 percent .​
More likely, Eker notes, a​ national start-up that would generate $100,000 per month in​ revenues would realize 8 to​ 13 percent per month .​
The goal is​ to​ realize between $1.08 and $1.13 for every $1 you invest, he notes.

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