The other day my wife and son were reading Tomie de Paola’s wonderful children’s book Strega Nona, an Italian retelling of the Sorcerer’s Apprentice story. In this version, Big Anthony comes to work for Strega Nona and overhears her incantation over her magic pasta pot. The result: he learns the spell for endless pasta making, memorizing the chant to turn the pot off, but because he is hiding, he misses the visual accompaniment to the "stop-the-pot" spell: blowing three kisses.
The pasta pot produces relentlessly, threatening the whole town, until Strega Nona returns and solves the problem by invoking the correct words and gestures. (Sorry for the spoiler.)
Online marketing is a lot like a magic pasta pot.
Big Anthony see a competitor’s ad running for several weeks, and naturally makes the assumption that they’re making money.
He visits their landing page (by typing in the URL, of course, since it wouldn’t be fair to make them pay for your competitive research) and see their front end offer. A $39 widget. A $19 ebook. A $3500 seminar. Whatever.
Big Anthony assumes that he understands their business model, and so copies it. But somehow the numbers don’t turn out right. He spends $100 on clicks for every $25 in sales. He’s going broke fast by emulating what he sees.
Keep Your Eye on the Back End
Big Anthony’s mistake, of course, was assuming that what he could perceive was all there was. Blowing three kisses was invisible, and so is the value-exchange that takes place between merchant and customer following the initial sale. His competitor may also be working with a negative ROI on the front end, and making it up with a high priced upsell, or a series of emails promoting affiliate programs, or a robust continuity program.
If you’re serious about emulating your successful competitors, then you must become their customer. Pay for the privilege of watching the whole spell, so you don’t end up drowing in spaghetti like Big Anthony.