Lesson #1.2: Failure of the $7 product (Scary!)
Before I explain this in detail, I need you to do me a
big favor, ok? (Seriously!)
At this moment…
We are going to have a moment of silence for those folks
who are focusing on $7 products and expecting to make
$10,000 - $20,000 per month. Feel sad for them. Feel
their pain on counting $7 with the expectation that
they MUST sell 2,857 products per month.
We know for a FACT that it is hard to get traffic.
We know for a FACT that it is hard to get 100 sales.
However, with the anticipation to sell 2,857 products
per month, how much traffic do you need to get that
type of traffic? How many marketers will be interested
to promote?
“How many customers will take your
business seriously?”
Think about this. Let’s say, you are selling a product
for $7. Regardless of how great your product is, your
potential customers have already made the assumption
that your products SUCKS big time!
I don’t care how much time you put into.
I don’t care how GREAT you think your products are.
The assumption itself is the MAJOR factors on the
failure in your business. Now, let’s reverse it, ok?
Let’s say…
You do make a great product, ok? And your selling point
is $7. As you come out with a product that is priced at
$70, people EXPECT the quality has to be 10 TIMES
BETTER than before.
“What if your product is ONLY two times
better than before?”
Do you think your customers will APPRECIATE you?
HECK! NO. They will KICK DOWN YOUR DOOR and ask for
refunds for sure. So, why set yourself up for failure?
Why NOT get a higher profit margin? You can use the
money to REINVEST in your customers. You can use the
funding to serve the customers more in the future.
In fact, you can even DO MORE THAN THAT!
The solution: Stop selling $7 product.
(Not ONLY is this a warning, it is the sign on WHY
business has fallen off the roof)
Here is WHAT you need to do:
1. FOCUS on the Quality of each product.
NOTHING BEATS QUALITY. Focus on what people want,
not what they need. Remember, to stay the HECK out
of the RED ZONE. The sharks are waiting to use
you as bait, you need to be unique.
What do I mean by unique?
Become a MIND-READER. If you have read lesson #1,
you will know exactly what your customers really
want. Then, keep feeding them what they are looking
for. That’s it!
WARNING: Don’t FOCUS on quantity either. Focusing
on what they want will make your products sell
like hotcakes. PERIOD.
For Example:
iPOD and iPHONE kept selling like CRAZY. even today.
WHY? Do they focus on buy one get one free?
Absolutely NOT!
Instead, they FOCUS on what customers WANT and they
work very hard to make sure that the product itself
is top-notch. In other words, they KNOW that the
product will become a best-seller even before Apple
introduced each one of them to the market.
2. Anything that is worth less than $47, give it away.
PERIOD.
Repeat after me, ok?
“ANY INFORMATION THAT IS WORTH $47 OR LESS,
JUST GIVE IT AWAY”
Think about this. When you are giving away value
to people over and over again, will they BOOKMARK
your site without you asking them?
Absolutely! In fact, it is the nature of human being
that everything that is valueable to them will NEED
to be stored. In other words, when you give them
what they want, they will come back for more.
In other words…
Everything that is NOT worth more than $47 in your
eyes, just give it away. WHY?
(A) Shake Your Competitors.
What is WORSE than giving things away? Your
so-called competitors are struggling to make
the $7. By shaking their grounds, you motivate
them to COMPETE with you head-to-head.
While they are struggling with low margins, you
build a relationship with your readers.
(B) Momentum For Quality Products.
As you keep building a great relationship with
your readers through free information you are
giving away, your readers know that whatever it
is you are selling is WORTH THE GOLD.
It means that when you release quality products
to your followers, they are more than willing to
pay premium price, even though it is higher than
your competitors.
3. Let Your Competitors Kill Each Other and GRAB The
Market By Storm.
How many sales do you need to make $10,000, when your
product price is at $100? 100 sales
How many sales do you need to make $10,000, when your
product price is at $7? 1,429 sales
In other words…
Work less, make more, and kill your competitors.
Instead of struggling to sell 1,429 sales, all you
need to focus on would be:
(A) Build a relationship
(B) Develop high quality products
(C) Sell 100 products per month.
What happens when you do this?
Think about this. When your competitors FOCUS on
cheap prices, they are competing with other amateur
marketers at that price level as well.
It means that if A sells his product at $7, the
other guy will start to sell it at $5, what happens
to A’s business? Going under for sure!
What happens when other marketers start selling them
for $4? $3? or even $1? They are OUT of business for
sure, right?
As a marketer who understands the market, what you
can do differently (waiting on the sidelines) is to
see what products your competitors come out with,
find out if it is profitable or not, then USE their
ideas as your NEXT quality products.
NOTE: I know it sounds like an EVIL plan. However,
it is the reality of business. Either you stay and
keep growing or die. — You can read my other blog
post about bold leadership at here.
As you know the ENTIRE truth, I encourage you to stop
selling $7 products. Focus your heart on quality products.
This allows you to BUILD your brand as well as quality
on every product you introduce to the market.
Also, remember…
When you price your product at $100 vs $7, you are
able to develop more high quality products for your
customers. (Compared to marketers who just barely break
even in the business)
In the end, your customers are happy. Your alliances
are more than willing to sell your products (more
commission for them). Your employees are happy (Higher
salary and compensation).
What are you going to do differently in your business?
Survival is the key.
Growth is inevitable.
Quality products are what you need.
Regardless of what your concern is… This is exactly
what I will be teaching you on http://117secret.com
Success is YOURS,
Henry Gold
The JV Giveaway Legend
If you enjoy this post, subscribe to the Free Henry Gold Newsletter
Related Posts:
Lesson #5: Freebie Seekers vs. Potential Buyers
Lesson #4: Why marketers FAIL with giveaways? (Nasty...)
Lesson #3.1: FORCE Any Marketer to Promote Every Product You Want Them to SELL. (Nasty!)
Q&A: About 200,000 unique visitors (Important)
Lesson #3: Traffic Strategy With Joint Venture (200,000 Unique Visitors)
richard said,
April 10, 2008 @ 1:22 pm
hi henry
i have been selling an ebook as a product. for the past year, i have tried various promotional ideas through the web including google base, shopzilla, etc. the only market that seems to buy product is within ebay. i have tested my product at $20 but no one bought. they are buying at $6 but i get no sales if i sell above $6. it seems ebayers are trained to buy product at lower prices like at $7. it seems ebay is the only place to sell product and it is proven there is a demand for my product.
i have another site with over 1600 people, i did a test email contest with only 6 responses. it seems i have tried a lot of things but still not able to sell at the price i should be able to ie. >$50. there seems to be a major disconnect for me on what you say. i agree higher prices deem higher quality but how do you find and promote successfully to that market?
thanks and great information as usual
Paul said,
April 10, 2008 @ 2:46 pm
Hey Henry,
There seem to be two schools of thought with regards to giving information away . . .
The first is the one you present here — give quality information away for free to build a relationship. Then when you sell something, people will expect it to be much better than what you’re giving away, and will buy.
The 2nd opinion I’ve seen promoted by some very successful and credible marketers is that when you give products away for free, you condition your list to expect free stuff.
And then when you try to sell them something, they won’t buy because they’re accustomed to getting information for free.
Both arguments seem to have merit — is there a middle ground, and if so, what is the line separating the two?
Thanks,
Paul
Henry Gold said,
April 10, 2008 @ 5:17 pm
Products and quality information are two different ground. When you give products for free, they will expect more free products.
However, when you focus on high quality information for free, they know whether you are just BSing around or truly know your industry.
Henry,
Andrew Cavanagh said,
April 10, 2008 @ 7:21 pm
I agree that you should focus on creating higher priced products.
In fact if you stop at just $97 you’re leaving a pile of money on the table.
You need a product funnel hitting multiple price points from free to $5,000 and higher.
I also agree that generally speaking $7 is a sucky price point.
But that doesn’t mean low price points aren’t an effective lead generator.
Keep in mind that if you have a high converting product priced from $10 to $20 and you give away 100% commissions that can give you a whole pile of happy affiliates and a whole pile of new clients who’ve actually paid to buy one of your products.
You can immediately upsell these new clients to your higher priced related products.
The immediate upsell is the real power of the $7 scripts which most newbies completely overlook.
It’s not about selling products cheap or selling cheap products.
You sell high quality products, give away 100% commissions on the front end which helps to create an army of affiliates.
Then you upsell to higher priced, high quality products.
I’ve used free giveaways and I’ve used lower priced ($19.99) products with 100% commissions to attract affiliates.
The second strategy seems to be far more effective based on my testing.
Of course your results may be different based on your niche and your product.
I would also agree wholeheartedly that if you’re selling products mainly to your own in house list you should focus on creating higher priced products.
Kindest regards,
Andrew Cavanagh
Chuck Madere said,
April 11, 2008 @ 12:28 am
You make perfect sense. We all know that it is better to get $199.00 10 times then $7.00 10 times, but I guess I need to read lesson 2 to gain a little more confidence.
Chuck Madere
Serban Stanescu said,
April 11, 2008 @ 8:36 am
Hello everybody!
I live in Romania, Alexandria, a small southern town with about 40,000 people. I have studied the local market and I am in business (offline, computers) since 1998, as a freelancer. Internet, seems to be the only valuable choice under such conditions. So, in 2006, I started to study IM and online business. In 2007, I started my own VRE, I’m writing in social networks, I published my first book online, I wrote many articles. The result was in about 8 months, a steady grownig traffic for my company’s site,
www.mediafctory.com
So, what is my point?
Henry, as a marketing tactics, thinking BIG, really is the key. It is too obvious to discuss that 10 sales of $200 is better than 100 sales of $20.
But the facts show that building a BRAND, takes years. I am a brand now in my country, but it took me to become known about 2 years. So, speaking in terms of business, do you expect anyone to have means for living for two long years, just to build a brand?
Most people join IM and online business, working hard to get out of the rat’s race. That is, they can’t afford spending more than say… $3 - $10 on products they do not know much how they can use. They just want to learn, and they’re affraid to spend money on something very new.
I know it very well since it was my own case, and there are hundred of thousands of such people all round the world.
On the other hand, after you got a pretty good idea what’s all about in online business, you slightly move your focus towards other type of products, and you start buying. I know that, since i did it. And, belive me guys, I really don’t have money to throw away, just for fun, or just for the sake of a salespage. NO MATTER HOW GOOD might that page be.
That is why I agree both with you, Henry, and Andrew Cavanaugh.
Andrew pointed out a very important feature that any type of entrepreneur should develop in the first place –> flexibility.
So, main goal, HAS to be QUALITY PRODUCTS.
Next, is another…
The real money, IS NOT IN THE LIST!!
The real money, IS INSIDE YOU!
That is the key to quality!
And when you achieve QUALITY, well, you get SALES!
Now, let’s think it a little further:
1. You make your first product. Launch it let’s say, free. People get to know you.
2. You get feedback. Workout the free product, get a better one, and you sale it.
Now, you get MORE FEEDBACK!
But this time, is a different feedback. From buyers, not from freebie collectors.
3. Workout again the product, get a higher priced version with more info, more quality, keep the previous 2 products and update them according to feedback. That is, you improve your products, but you cover 3 types of market:
a. Entry point - free products;
b. Midpoint - low prices;
c. High-end - higher prices.
I know, that may seem a little Sysyphus job to be done, but let me ask you guys a question:
DO YOU REALLY BELIVE in the “30 days millionaire on the internet” myth?
Yes, you can become millionaire in 30 days, but NOT in your first 30 days of Internet business. That is a fact. If you feel that I’m wrong, please, go to my blog and leave your opinions.
I will write an article on the same subject and I will post it there. I really want to know what you think, since I operate on a very different market and Romanian market is a market with over 10,000,000 potential buyers, and far more than that!
Best regards,
Serban Stanescu
http://www.serbans.com
http://www.mysitereview.ro
http://www.mediafctory.com
http://www.mediafctory.com/forum
http://ro.netlog.com/sserbanro
http://serbanstanescu.weblog.ro/
http://mediaf.weblog.ro/
Bernice Howe said,
April 11, 2008 @ 11:19 am
It appears to me that I have received Lesson No. 2;;;just in time. My product.. a book..is, in fact, worth thousands of dollars to the first people who recieve it..whether that is a church raising funds, or an individual who got stung with “The Secret”. In my book, I provide date that has been missed …. from the Bible. The definition of “Science” is …. ‘to take someting apart to understand how and why it works”…But the Scientists cannot take anything apart until they know what is there to be taken apart…. What is “There” to be looked at or “Discovered” is clearly presented in the Bible…for those who have “Eyes that can see”.
What I have “Seen” and written about..is worth much, much more than its weight in gold. ….. I have thought of even giving it away….rather than selling it for less than $1,000.00…..provided it went into hands that would USE it… to the benefit of many others…especially during this time of turmoil.
But, thanks for Lesson #2.. It is fun to know that I was right when I rated Henry Gold as a First rate genius….
Great Love, Bernice Howe..
Ronnie said,
April 15, 2008 @ 10:41 am
I agree that the free thing is very iffy
although i my self have downloaded free products that have helped me immensly.
THe $7 thing i always just delete to be frank because you know it will be free next week in the next givaway if i think that way then how many others do?
with regards everything under x should be free well i would love to agree with that however if you are working to a tight budget
and not yet a big earner then $10 is exciting infact it is a fantastic ammount of cash if its your first payment therfore people will continue to go for it no matter the cost to them, i am not supporting it but it seems to be true.
There are just to many givaways and free products now the only way to go is up in price as the advice from many guru types and resell rights this and that for free is build your list givaway crap and totaly saturate the market and by doing this people are devaluing products services and information and creating there own list of free product seekers.
It is up to the givaway guys to say no your product has no real value therfore it is not accepted and resale rights should be restricted then we would all be better off.
sorry to go on i do like a free item now and then hahaha two faced or what hahaha
Take care
Ron
Azlan Hussain (online business ideas & opportunities) said,
April 15, 2008 @ 12:02 pm
what a great topic. it has given me lots of ideas on how to approach my next product launch.
I believe in one thing, be a leader in your own community, the sale will come by itself.
cheers