Recent polls show that only 26% of Americans think the government’s plan to bail out GM is a good idea, and only 42% of GM car owners are even “somewhat likely” to buy GM again. Clearly, most of us don’t think we’re on the right track for fixing this mess. But there are things that can be done, and the industry can survive and progress without massive government meddling, spending, and regulation.

So here’s my 7-step plan for addressing the auto industry/environment/energy situation. Amazingly, there’s not one single step that requires new regulation or money for the auto industry.

1) Don’t try to “fix it now.” It can’t be fixed now, and everything done to make it better now just makes it worse. You can’t mandate this, that, or the other thing because no one knows at this stage what is going to work. And, as we may have finally learned with the bailouts, just throwing billions at something does not fix it.  The big pain associated with surging fuel prices is severely damaging, but it’s the only way we’re going to get people working hard on viable solutions to the energy/fuel problem. Trying to artificially raise fuel prices via taxes is unworkable, because it hurts people for no reason and no benefit when real prices are low, and it blows the lid off when real prices skyrocket (which they will again.)

2) Don’t try to fix it like Europe. This isn’t Europe. You can’t listen to people in countries the size of Connecticut telling you how things should be in the U.S. — where it takes four full days to get from one side to the other. The vast majority of Europeans are completely clueless about what needs to happen here, and so is anyone who proposes Euro-style taxes for us.

3) Create significant income tax incentives for individuals to purchase fuel efficient vehicles. By significant I mean $5,000 or more per year. DON’T tell them what kind of vehicle. DON’T tell them what technology. DON’T tell them what they can and can’t do. DON’T tell them anything, except it must have an EPA rating of more than XX mpg (or equivalent.) Give them the incentive every year they own the vehicle, not just for buying it. Make it a long-term benefit. Stop the incentive when they sell the car – it’s non-transferrable. Raise the MPG requirement every few years until we get it to 50-60 mpg. DO the same thing for businesses, but with lower standards for commercial vehicles that have to tow/haul stuff. Might have to have tiers for this, based on vehicle classification. DON’T give manufacturers a dime. DON’T make any law mandating they make vehicles with certain mileage. Just give people real incentive to buy such vehicles and I assure you the market will figure it out.

4) Create significant incentives for business to build out alternative fuel distribution infrastructure. DON’T tell them what kind of fuel. DON’T tell them what kind of distribution. DON’T pay them anything. DON’T give them any government money. But give them major tax breaks for money they spend to do this. Make all alternatives equal. Anything as long as it’s not gasoline. There is absolutely no sense in trying to ignore fossil fuels and focus on freaking solar cars or hydrogen or crap that’s 50-100 years in the future.

5) Stop assuming that everyone needs to drive a sardine-can econobox. It’s one thing to cram your family into a little econobox for a 30-minute jaunt to the train station or whatever. Entirely another to cram them in like sardines for a 6-hour trip to Grandma’s. You cannot start out with an assumption that consumers here can be coerced into acting like Europeans.

6) Do not try and tell people what to do. Do not start down the road of what is and is not a wasteful activity. What seems “unnecessary” to me may be extremely valuable to you. Whenever you setup judgments about what is and is not “right” to do in this situation you create the potential for enormous backlash and lots of energy wasted on not solving the problem. Just create incentives for what we want to achieve — high mileage vehicles and easy access to alternatives to gasoline. Leave everything else alone.

7) We should never have public-funded works projects, but since the Democrats can’t stop themselves (like drug addicts going to a crack house) at least put the work into alternative fuel distribution infrastructure. I don’t know how, but at least build pipelines or something. Lease them out until they are paid for then sell them.

We badly need a meaningful energy policy that addresses real world issues and not eco-freak bullshit. We need to address energy as a comprehensive whole, not just cars. For example: Hydrogen cars are dumb. I can’t believe this idea is even being discussed. There is no free hydrogen on earth, for pete’s sake, and hydrogen is just an energy carrier — it doesn’t create energy, it just carries it. You get free hydrogen by electrolysis — pumping electricity into water. You get exactly as much hydrogen out as you pump electricity in. You may as well be running your “clean” hydrogen car off a direct connection to coal-fired power plant. The overall efficiency of coal-to-steam-to-turbine-to-powerline-to-hydrogen generator-to-fueling station-to-car is about 20%. Pretty much the same (or worse) than gasoline. Same thing will all these electric cars. Geez.

In 75 years, when you can run your Hydro-car off a super-efficient wind or solar farm, things will be different. But not today.

Even though we should not mirror the Euros, there are a *few* lessons we can learn from them.

We have lousy infrastructure for alternative fuel distribution. In Europe, 50% of the consumer autos are diesel. Modern diesels are as clean (in some cases cleaner) than gasoline engines, produce more power, and get better mileage. A gallon of diesel contains 15% more energy than a gallon of gas, and cost less to refine. Diesels also run on more bio-alternatives than gasoline engines.

But diesels don’t sell in the US because you can’t get diesel on every corner, and the lack of distribution makes it more expensive than gas, even though it’s a lot cheaper to make. Also US manufacturers have, for the most part, built very poor quality diesels and consumers have reacted accordingly. Euros still don’t sell their modern diesels here because the market doesn’t support it.

Same situation with Compressed Natural Gas. CNG is not very efficient in terms of equivalent miles per gallon — it doesn’t carry much energy. But it’s very cheap, abundant, and clean. Again, there is no infrastructure. The market has delivered very poor alternatives for consumer use of CNG.

If we had decent infrastructure you can build efficient vehicles that combine these technologies. Just like the big three are building E85 hybrids (which has caused increasing food prices because farmers now grow crap corn for ethanol instead of food corn for food) you can have clean diesels with CNG or water/methanol that increase mpg of diesel by 5% to 20%. Imagine a “gas-guzzler” truck getting 20-30 mpg on a combination of diesel and CNG, with a lower carbon footprint than the Chevy Impala. Now that’s a viable alternative for the next 10-20 years.

And maybe there are other combinations that work better. But all this stuff has to be convenient and affordable. Give Average Joe a reason and the option to buy something different that is actually a functional equivalent to what he has now. He’s not going from his 4×4 SUV to some sardine can. But he will go from his 9mpg gas burner to a slightly smaller, comparable, version getting 20mpg-30mpg off a mix of alt fuels. As long as he doesn’t have to turn his life upside-down to get the fuels or pay three prices for the vehicle.

Of course, peak oil fanatics will cry about this, claiming “That won’t help! It just delays the inevitable!” Of course it helps. And of course it delays the inevitable. Until we have a realistic way of getting from the current point A to the end game Point G by folding space-time or somesuch we have to make some incremental steps. Better to have a plan that might actually work than one that is built on “hope”. Hope is not a strategy.

I don’t think the clients in that last video would enjoy negotiating with Harlan…

The conversation turned to resource constraints — time, effort, money, etc. – and the need to spend some portion of time on futuristic efforts as well. He estimated that he needs to spend 5%-10% of his time on long-term futures thinking and planning. I think that’s realistic – 100-200 hours per year. I asked if he was spending an equal amount of time on product development. His answer was that he spent about 200 hours this year on developing new seminar materials, and 300-500 hours on his blog.

I was surprised by this, as the ratio seemed upside down to me. So I asked another question, “Do you track leads/sales generated from the blog?” His response, paraphrased, was that he only tracks it loosely, but it helps.

What we have here is a misallocation of resources. 15%-25% of his time is spent on a marketing vehicle that he cannot connect to any specific improvement in sales or leads. This is an inappropriate, and potentially damaging, strategy over the long run and could be very detrimental to his firm’s growth unless he makes one, or both, of the following changes:

• Refocus the blog to have a specific, trackable, purpose
• Ensure that content developed for the blog can be leveraged through multiple use

Why You Blog

This next sentence is very important:

The only purpose for a small business blog is to turn Looky-Loos into Prospects.

That’s it. That is the one and only function of a small business blog. That is the one and only reason to spend time blogging. If you are spending time blogging for any other reason then you have a hobby blog, not a business blog.

You can find lots of articles on the internet espousing the value of blogs for business – build your brand, demonstrate your expertise, provide content for search engines so people can find you more easily, etc. All those things are true. But I ask you, what is the purpose of those things? The purpose is to convert lookers and seekers into prospects. What do you care how many people find you if they are never going to buy? So if you’re not blogging to actively convert readers to prospects you’re writing a… what is it again? That’s right, a hobby blog.

So, how do you make your blog a trackable lead-generation tool?

You start an Email List and use the blog as a mechanism to attract subscribers. You put an opt-in form on the blog, create a compelling offer to induce interested readers to subscribe, and you track the results. That’s it. Once you do this you have a useful business metric, The Prospect Ratio, for determining how effective your blog is. It looks like this:

Calculating your prospect ratio

As an example, if you get 1,000 Unique Visitors per month, and 35 of those visitors subscribe to your mail list you have a 3.5% Prospect Ratio. Simple, right?

Now we need to figure out how much each of these prospect conversions is worth. The way to do that is to track the number of sales that come from these prospects, as follows:

Calculating your sales conversions

If you have 500 subscribers to your mail list, a reasonable number to shoot for in a year, and you know that you have made 22 sales to this group, you have a 4.4% sales conversion ratio. Now you know that for however many Unique Visitors you attract to your blog, 3.5% will become subscribers (aka qualified leads) and 4.4% of those will become customers.

These two ratios alone will give you valuable insights into where to put your efforts. Which is the best use of time – getting more Unique Visitors to the blog, creating a more compelling offer to increase your Prospect Ratio, or refining your email sales strategy to increase your Sales Conversion Ratio?

But there is still one piece missing – value. We need to know how much each point increase, for each ratio, is worth. We start by calculating our average sale value. This calculation is easy – Total Sales/No. of Customers. Let’s assume that last year (or quarter, or month) you sold $42,000 of business to 25 clients. Your average sale is $1,680. This gives us some interesting data points. First, the average value of a Unique Visitor to your site:

Calculating unique visitor value

Using our example above, we can see that every Unique Visitor to the site is worth an average of $3.98. Now let’s calculate the value of each email list subscriber:

Calculating subscriber value

Again using our example above, we can see that the average value of each subscriber to our email list is $76. This assumes, of course, that you have an effective email marketing strategy that nurtures prospects and converts them to customers (more on that in a future post.)

Using these metrics you can now plot a business plan for your blog. You can assign a value to the time you spend developing the blog and developing your mail list, and you can compare the return to other prospecting and lead generation  methods.

This process, called conversion tracking, is a key analytic that can and should be applied not just to your blog and email list, but to every sales and landing page on your site. Otherwise you don’t know whether your efforts are paying off, and you don’t know whether you are spending too much, or too little, time on your site.

Further, you can now get a clear indicator of the ROI for your blogging time. If, for example, you spend 500 hours per year to get 3,000 Unique Visitors, and each visitor is worth $3.98, you can reasonably estimate $12,000 of revenue from that effort – or $25/hour. Is that good? On the other hand, if you can get 500 new subscribers to your mail list you can reasonably project $38,000 in revenue. Which seems more promising?

Are there other ways to spend your time that can make you even more money? Or are there changes you can make to your blogging or email strategies to drive those revenue numbers up? Can you create entry-level products or services that will lower your average sale but drive up the number of conversions and give you more customers rather than more prospects? Now you can begin to answer these questions. But you can’t answer any of them until you have metrics.

Getting maximum leverage from your blog content

The other key to managing your blogging time is to be sure the material you create for your blog can be reused for other purposes. If you can reuse half your blog content – either before or after posting – you have effectively reduced your time expenditure by 50% – 250 hours rather than 500. If you apply this intelligently it’s the single biggest boost you can give to your blogging ROI.

Reuse it how? First, understand that very few people will ever go through all your blog archives to read everything you’ve posted. At best, readers will find specific pages via search engines and then scroll around for similar posts. But rarely will they invest time in finding everything you have written on a topic.

You need to feed it to them again, in multiple channels. Research indicates that the average customer needs to see something 5-6 times before it really sinks in. This gives you a half-dozen opportunities to present your message in different ways.

Your blog posts can be summarizations of key white papers or reports that you already published. Or your posts can be used as the basis for new reports. These reports can be used as incentives for Readers to subscribe to your mail list. Or they can be converted into entry-level products that your prospects want to purchase to better understand the problems you solve.

Some consultants prefer to use their email newsletters to simply point to a variety of new blog posts on specific topics. Others will mine previous posts and expand them into articles for trade journals or online magazines. Don’t discount the value of audio and video. Webinars, teleconferences, and other forms of presentation can be captured and reused as well. The possibilities are almost endless.

The idea is to get your blogging time to at least pay for itself in new revenue and, preferably, become an income generator on its own. This is certainly not easy, but having a plan and metrics to track your progress is far better than expending a lot of time with a completely unknown ROI.

The value of information product marketing

In my own experience I have worked for three firms that started and grew their business through the marketing of information – both before and after the internet era. One is now quite large, with nearly 50 employees and $10 million dollars in annual revenues. It was sold a few years ago to a major consulting and information marketing firm. The second is also quite large now – 20+ employees and $4-$5 million in revenues. The third is much younger and smaller but is doing quite the job of marketing it’s research, reports, and information products to build a brand.

And this is just in my experience. There is an enormous body of work, as far back as the 1960s, indicating that the development of information products is the cornerstone of building a successful consulting practice. Authors like Howard Shenson, Robert Mancuso, and Herman Holtz have written about this phenomenon as far back as the 1970s. Today there is an entirely new generation of people focused on marketing information products via the internet.

As an independent consultant or small firm you are simply a problem solver. Your value to clients is in helping them understand the problem you solve, the impact it has on their business, and teaching them how to mitigate it. To get business you have to prove that you can do these things.

Capturing your ideas, philosophy, approach, tools, methodology, and understanding in information products is the fastest, best way to communicate you value to a broad audience. The internet has brought Direct Marketing – one-on-one, personalized communications to your prospects – within reach of every small business. And Direct Marketing is still the Number 1 way small consultancies can promote themselves. But to use it effectively you must have a message that educates your prospects about your value. And you must track, test, and improve that message based on real metrics that give you a clear picture of your progress.

I’ll be checking this out. Health care in the US clearly needs an overhaul, and Euro-style social medicine is equally clearly not a useful answer. Government never, ever, runs anything like health care (or education, welfare, or anything else) effectively, instead creating an ever-growing bureaucracy that produces less and less for more and more dollars. Hopefully Perrin and Rooney and provided a roadmap to a system that gets people the health care they need with the proper incentives to keep costs under control.