2257 compliance is the law if you do business in the United States. Not violating other people’s copyrights is also the law, as is paying your taxes on worldwide income if you are a U.S. citizen. Follow it or change it.These might seem obvious or goody two shoes, but these 20 practices have made Sex.Com very successful, as well as other companies:

1. Follow laws even if you do not like them.

2257 compliance is the law if you do business in the United States. Not violating other people’s copyrights is also the law, as is paying your taxes on worldwide income if you are a U.S. citizen. Follow it or change it. You will sleep better and not end up having a cellmate named Bubba.

2. Don’t invite Attorney General Ashcroft in to regulate the industry.

See the above, especially in regard to spamming children with adult material. The best way to handle mailers is to use double-opt-in email lists, and saving both IP addresses. Unsolicited mail is pissing off the powerful! When the government is upset, “fairness” goes out the window.

3. Do not rip off your partners.

Treat your partners as you expect to be treated. It’s much better NOT to have hidden bank accounts, hidden affiliate codes, unrecorded money transfers, etc. See the legal trouble Carolyn Tilga (formerly of WiredSolutions.Com) is in if you do not believe it.

4. Your customers should be treated well.

Follow these “do nots” and your customers will love you: a) Do not cross bill; b) Do not make it hard for customers to cancel; c) Do not have sneaky trial arrangements; d) Do not put them in pop-up hell; e) Do not download viruses and other junk upon them without clear permission; and f) Do not spam them without a way for them to get off the mailing list. Treating them well will definitely keep your charge back ratio lower.

5. When you treat customers well, retention improves.

At the same time follow these “dos”: a) Do ask your customers for feedback on your site; b) Do be available for customer service; c) Do make your site easy to use (follow the w3c.org standards); and d) Do change your content frequently. The better you treat your customers, the longer they will stay and the lower your customer acquisition costs. Following these “do” rules will also definitely keep down your charge back ratio.

6. Your affiliates are your most important vendors.

Don’t shave them, pay them late or treat them without the respect they deserve. The bigger ones know when they are being shaved, as they are sending traffic to multiple sites and will do something about it – like move to another provider. The smaller affiliates will also learn soon enough.

7. Know your affiliates well in more ways then one.

Be sure your affiliates are not child pornographers that are sending traffic to your site because your 18-year-old models look underage. Two solutions: a) Don’t have underage-looking content even if it IS legal and; b) Look at the sites of each and every affiliate you have. Also talk to them and do not accept blind signups of affiliates EVER. Know your customers!

8. Work on traffic as much as you work on affiliates.

Affiliates are not always your friends – be sure you know them very well! If they are sending you bad traffic (such as stolen credit cards to deliberately put you out of business), then get traffic from other sources such as PPC search engines, SEO work, double opt-in mailers and affiliates with reputations for honesty.

9. Try to mediate your disputes in private.

No need to air your grievances publicly on industry chat boards if they can be settled in private. Only when a problem can’t be settled by mediation, arbitration, or with a sit-down with an industry veteran should you consider taking it to the boards. Anything is better than court, especially the uninformed court of public opinion.

10. Build for the long term, not the quick score.

Schemes like BabeNet.com tend to proliferate in this industry. If everyone else is paying $25 per sign up and someone starts paying $50, something is wrong. Anyone who lost money in the BabeNet debacle should have seen it coming. Get-rich-quick schemes usually don’t work, and for good reason.

11. Shun the bad players.

Why is no one going after BabeNet legally as well as after its principals? And why not after those Australian scammers? By showing we live with laws, people will not get beat up in public as much and we will not have as many wars on the boards.

12. Stay humble and stay hungry.

Don’t get arrogant about your successes. Does anyone go out of their way to do business with those who insult them, shave them and rip them off? If someone has big displays at trade shows does it really mean that they know how to spend their money well in general? And whose money is it anyway?

13. Respect employees, they are not slaves.

If employees are not treated with respect, they will leave you and go someplace else. And despite what agreements they might have signed, they might take customer lists, email lists and affiliate lists with them as well as proprietary company knowledge. So respect them and give them commissions, profit sharing, raises, bonuses, parties and the like.

14. Prove yourself every day to the market.

The best ways to prove yourself are to answer your ICQ and emails rapidly, pay affiliates on time, offer competitive products and don’t be a cheater. The best proof of all is high conversion rates, high customer retention rates and happy affiliates or site owners.

15. Think long term – innovate and test.

Think about where the adult market will be two years from now. We know Visa and MasterCard are going to continue to crack down. Think of new revenue sources, new types of sites, new types of products and services and new content. Ron Levi of CyberErotica.com, who has been very successful from the phone sex days, is always changing his business models and trying new things. He is a good person to emulate.

16. Keep in the “gossip” loop of the industry.

Sites like YNOTMasters.com, AVNOnline.Com, Netpond.com and GoFuckYourself.com should be read every day. BoardTracker.com and AllOfEm.com are good ways to keep up with happenings as are YNOT News and the AVN newsletters. Yes, keeping in the loop does also include reading Luke Ford on SetGo.com.

17. Never use payments as working capital.

Sometimes you might not get paid on time from your credit card provider. Keep enough cash around so that in case the processor pays late, you can pay your affiliates on time. This will help you keep your reputation up. In fact, you should rotate your credit card processors to prevent having all your eggs in one basket. Use a respectable processor, such as CCBill.com or Epochsystems.com. If you have to get a personal line of credit or better, don’t blow all your cash on a new car. Save some working capital for a rainy day.

18. Communicate with all.

Answer email, phone and ICQs. Don’t hide behind offshore corporations in the era of the Patriot Act, even if you are not a U.S. citizen. It is an invitation get audited and maybe a criminal investigation.

19. Keep your site up and payment processing up all the time.

Sex.Com has over 2,600 customers. At any given time, at least 5% are down. That means that traffic being sent to them is being wasted – regardless of it being paid traffic, search engine traffic, or affiliate traffic. Keep your site up at all times – get managed DNS, multiple collocations, battery backups, alarms that go off if problems occur, more than one server, etc.

20. Test, test and test.

The adult market is always changing. What worked one day may not work the next. Surfers’ viewing habits change. Traffic mixes change. New countries come on line. Consider displaying different pages with different colors, styles and navigation elements to different surfers and see which convert better or have longer customer retention times. Use more than one dialer and see which one returns more. Do the same with payment processors, e-mail collectors, exit consoles and the like.

Send me your comments and questions to Gary@sex.com.

Gary Kremen runs Grant Media, LLC, the licensee of Sex.Com. He was the first to register the domain name in 1994. The name was stolen in 1995 and returned after years of litigation to him in 2001. For more information on Gary Kremen, see http://www.Kremen.Com. For more information on Sex.Com visit http://press.sex.com. To reach Gary Kremen and for comments on this article email gary@sex.com.

2257 compliance is the law if you do business in the United States. Not violating other people’s copyrights is also the law, as is paying your taxes on worldwide income if you are a U.S. citizen. Follow it or change it.These might seem obvious or goody two shoes, but these 20 practices have made Sex.Com very successful, as well as other companies:

1. Follow laws even if you do not like them.

2257 compliance is the law if you do business in the United States. Not violating other people’s copyrights is also the law, as is paying your taxes on worldwide income if you are a U.S. citizen. Follow it or change it. You will sleep better and not end up having a cellmate named Bubba.

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