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Archive for November 19th, 2007

Lemonade.com deserves to succeed

I’ll tell you why. Last week I checked out their site and was impressed by their product, their site and their plan of action. What I didn’t like was the business model. It wasn’t solely based on affiliate marketing but enough of it was to throw it in that direction. I wasn’t so much railing on their business model as I was the whole notion of affiliate marketing in general as a business model. I just have never been wild about having to rely on other peoples traffic for the success of my product or business.

Well after saying as much, about an hour later or so I received the following email from Thomas Zawacki the Co-founder and CEO of Lemonade.com:

I read your blog and appreciate your opinion. Like you, I have been in the internet marketing industry for a long time. I agree with you that relying on an affiliate program as your sole source of income is a very difficult business to be in. That is exactly why we have built the Lemonade Social Commerce Server to be able to receive data feeds from a variety of revenue generating opportunities. Currently, we have integrated revenue from commissions from sales (affiliate deals), cost per acquisition offers (CPA deals), cost per click ads (CPC) and cost per thousand online advertising offers (CPM deals). The Lemonade Social Commerce Server also has the flexibility to add auction based revenue streams (e.g., Ebay) and revenue a user might get from selling their own products. All coming soon. In addition to aggregating revenue streams in our flexible back-end, the user experience must allow for three things to happen: 1) easy to join and set up the application (e.g., widget or Lemonade Stand); 2) easy for the consumer find what they want and interact with; and 3) the Lemonade Stand owner must make a significant amount of money per month to make it worth while – this is a combination of impression levels, click-through rates, conversion rates, etc.It takes under 3 minutes to set up a Lemonade Stand. Lemonade Stands live at http://www.lemonade.com and/or as a widget/application on Facebook, Blogger, and other key distribution points. This means that there is a built in amount of traffic to the stands that our users can monetize. Lemonade Stand owners can then make money via four different revenue streams, commissions from sales, CPA deals, CPC or CPM ads. This aggregated revenue is what makes it worth it to the user, not solely the returns from affiliate deals.Thank you for validating our model. We hope millions of people have fun setting up their Lemonade Stands, enjoy the social community aspects of http://www.lemonade.com, and make a bit of money along the way to pay their cell phone bills, donate to a good cause, or buy that gift for the holidays that their loved one really wants.

TRZ

So riddle me this. Here is the CEO of a company, taking time out from his busy daily schedule to actually reply with thought, meaning and honesty on a) why I was partially right and b) why I might be wrong. And yet, he feels that it is worth his while to respond.

This tells me a few things. First, here is someone that knows what the viral effect of blogs can have on a company. Second, rather than getting defensive, he decides to point out why he thinks their product will bet better. So now, instead of me saying, “boy what a jerk”, he gets, “Boy, what a class act”!

I don’t know if his widget will set Web 2.0 on it’s ear, but if I were to teach how to be the CEO of a company, what he did would certainly be a lesson.  he took the time to address a blog that mentioned his company, spun it in his favor and didn’t burn a bridge in the process. He made an ally.  So what if he only responds to one a day, or whatever. The fact is, he took time out, to handle a little guerilla marketing on his own. A little hand to hand, if you will. Good Job TZ.

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Marc Meyer is a Digital and Social Media Strategist at DRMG. This is my personal blog where I share observations, thoughts and opinions that are all my own.

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