I was recently given access to the latest version of Jeff Walker’s Product Launch Formula course (Jeff was kind of enough to grant me access as a top affiliate and buyer of a previous version of the course).
As is typical for me, I went straight in looking for any audios I could download and stick on my phone (I’m on a HTC One X in case you are interested) for listening to when I go for morning skates or while traveling in the car or by bus.
The first section I went to was recordings of previous live events. I love presentations from events, but because I live in Australia I usually don’t travel to the events since they are in the USA. I prefer to listen to them in one or two hour chunks rather than full days, so recordings suit me perfectly.
A very old photo of Rich, a long-haired Yaro and Mike Filsaime
The audio I just finished listening to is from Rich Schefren and a presentation he did at Product Launch Formula Live in 2011. I was very keen to listen to this particular audio because I haven’t heard much from Rich in recent years and he hadn’t done any launches during that time either, as far as I could tell. Considering it was a presentation from an event all about doing launches, I was curious what he would talk about.
Rich and Eben Pagan are my favorite trainers when it comes to selling information products online. I like how cerebral both guys are, they both think deeply about subjects and are two of the most well read guys around when it comes to marketing and business. Plus they have multi-million dollar businesses, so clearly they can walk the walk.
This presentation from Rich had a handful of useful nuggets, as always. Today I want to share with you two of the most interesting topics as they relate to us bloggers and information marketers.
What Is The Key Determinant For A Million Dollar Launch?
Rich talked quite a bit about launches, as you would expect. There was however one topic he touched on briefly that really piqued my interest.
He explained his opinion for what sets apart a million dollar launch and “the rest”, all those launches that might make thousands of dollars, but not quite break the really big time.
I have long pondered this subject myself and have discussed it with Gideon Shalwick before and after our own launches. Gideon and I have had plenty of six figure launches, and I’ve had a few on my own too, but I’ve never come close to a million dollar launch.
When I began preparation for my first ever launch I followed the formula. I even went so far as to hire people that I ended up not really needing, like a JV manager.
Initially I planned to launch at a pricing point around the same as the big launches I had seen recently in my industry at the time – around the $1,000 mark for a home study program. Later I changed my mind because putting together the product in advance was slowing me down.
Instead I decided to go with the membership model so I could build the majority of the product after I sold it. As a result of this I priced my offer much lower. The first iteration was $47 a month, with no preset end time, though I did eventually decide on a six month course.
My result was good, about 400 initial sign-ups, although at that stage I had high attrition, so it dropped to around 300 after the first two months, with more dropping each month as the rebill periods hit. Despite my attrition I made over $100,000 from that first product launch, not a bad result.
Consider though, if I had charged $1,000 for the product, or as has become more common in my industry, $2,000 for the product. At 400 units, that $800,000 or $400,000 at $1,000 each.
I concluded at this point that the key to a million dollar launch was to charge in the four figure area for each unit. Obviously you have to sell fewer units to make big money and the marketing isn’t all that different regardless of what you charge.
That being said, you need the right justification for charging what you charge. You also need access to the kind of people who are financially able to spend that kind of money.
My thinking has always been along these lines for the justification behind what it takes to break the million dollar mark when doing a launch –
- Charge at least $1,000 for the product. No doubt there are examples of low priced products selling in the tens of thousands to break a million dollars in revenue, but as far as I can tell, that’s not as common, and certainly not in my industry.
- Have access to people who spend that kind of money. You need these people on your own list or access to affiliates who have these kinds of people.
- Have the proof to back up the price. If your best examples and case studies, especially from your own personal background or your client’s examples are from making $10,000, it’s harder to justify a higher price, compared to being able to talk about how you have made millions and helped others do the same.
So in summary, the right offer, to the right people with the right proof, are key for a million dollar launch. At least, that was my assumption as someone who has only seen them happen and not done one myself.
Innovation In Your Launch
According to Rich, he hasn’t done a launch that has made less than $2 million. That’s a pretty good track record.
Of course Rich has some quality friends who have massive email lists, guys who he reached out to as a coach, mentor and friend before doing his first launch. When the time came to do a launch the right support was there ready to go.
He also has plenty of million dollar business success stories behind him, from the days before he was an internet entrepreneur and had brick and mortar businesses (a fashion store in New York and an hypnosis chain are two prominent examples). There’s plenty of proof of his business acumen.
Rich already had in place what I considered the most important ingredients for a million dollar launch. However he said there is another key differentiator, which leaders apply that separates them from the pack and increases their financial return.
Rich stated that he believes the key to a million dollar launch is innovation. Doing what has been done before isn’t going to make you a leader or more importantly, garner the attention you need to make the big sales.
Rich has practiced this principle, first by releasing some incredible free reports before it was common practice, and doing other things like broadcasting a live stream from an event (I was actually at that particular event in Florida), where he made a pitch to purchase access to watch the rest of the event that sold out in 3 minutes.
More recently he did a live 24 hour stream from his office as part of the launch of another product. He answered questions live from the audience, had guest come on and managed to stay awake the whole time. Again, this was something no one in our industry had done, so just seeing what a guy looks like after 23 straight hours broadcasting was a compelling story.
These were Rich’s attempts to innovate and get attention, using new methods each time. Doing just another report or a video sequence in an industry flooded with new reports and video sequences is not enough to get you the big successes. You can still do well with these methods, but according to Rich, the innovators who use new ideas to get attention, they will be the people who make millions in future launches.
The key word here is “attention”. You can continue to deliver great value using the same formats and you will have a loyal following. However if you want rapid growth and the truly big success stories, you need the attention of new people. You can reach a heck of a lot of new people in a short time frame thanks to the viral nature of the Internet, if your idea catches fire.
At the end of the presentation Rich explained why he stopped doing launches. I was very interested to hear about this because as many people in my industry know, there is a sense of “launch fatigue” setting in.
Anyone who has ever done a launch knows the drawbacks. You get a nice big boost of cash, customers and exposure in a short period of time, but then it’s over. You don’t have an ongoing cash flow source, you can’t test and tweak much because what you have for sale is only available for a couple of weeks.
Rich explained that launches helped him bring in several million dollars, cement his position in our industry and created an instant list – a following of thousands of people who now care about what he stands for (I wouldn’t be writing this about him right now if it wasn’t for the impact his first launch/report/product had on me).
He then went on to build a business, hiring people and creating new products which were subsequently launched. The problem was that he had created a “monster” that needed to be fed all the time. That monster refers to his company and all the expenses that came with it, especially all the salaries.
Rich said they became addicted to launches because he needed to keep feeding the monster. Unfortunately as a result, he gained a lot of weight and certainly didn’t have balance in his life. I’ve met a lot of internet marketers who have this issue. They work too hard and feel they need to make sure their business is always growing.
Rich made a decision to break free from this habit by attempting to set up a business based on a sustainable cash flow model, and not launches. He thought that if he couldn’t change the model, pay his bills and profit, then he could keep doing launches, but he’d scale down his company considerably so he could keep more of the launch profits.
Jeff Walker is a good example of a guy who makes the launch model work well because he keeps his cost base so low. One launch a year that brings in a couple of million probably leaves him with somewhere around $800 to $1 Million in profit. He doesn’t have many staff to pay, and keeps his operations lean, so it works.
Rich on the other hand wanted something where he knew every month money was coming in at a dependable rate and there were elements his staff could work on to improve performance.
To do this, he moved away from launches and set up an evergreen selling process using webinars. His webinars and products are always available. He knows what an opt-in is worth to him, so his company can spend a lot of time buying traffic knowing they will make a profit in return. From there they just work on the standard metrics that matter most – traffic and conversion.
This is the traditional sales funnel model, one that Eben Pagan, who also does launches, uses in his businesses too.
Launches, Evergreen Products, Which Is Best?
I’ve enjoyed making some solid income from launches and also some fairly dependable, but perhaps not as significant income from having products stay on the market.
In terms of work load, doing a launch is a lot of work, but once it is done, doing subsequent launches or relaunches of the same product is a lot easier. It’s also fairly easy to do a launch, then later set your product up as available on an ongoing basis (this is what Leslie has done recently with Become A Blogger Premium).
The key step, which I have to be honest I have never executed, is to properly establish a sales funnel. The process, if done right, is to set up some kind of consistent income stream from a product (or really a sequence of products) you have on the market that keeps paying you something, which may or may not be “launched”.
Once left on the market, testing and tweaking is performed to improve conversion and determine how much each lead is worth to you. Once that number is established, you know you can spend up to that amount to bring in new leads. If you make on average $10 per lead, then you know you can spend up to that amount to buy new leads using whatever traffic sources you want to (PPC, SEO, Facebook, Display Ads, etc).
The hard part, and the reason why I have never really established a proper sales funnel and worked out my visitor value (lead value), is that the testing process does not float my boat. I find creating product fun, and launching is fun too because it’s new and it only takes a few weeks to get a bunch of customers.
Testing your copy, your offer, traffic flows and all the other elements is not nearly as exciting, but it’s where the real value is generated if you want to establish reliable cash flow. Some people love this stuff, but if you don’t, you’re going to need to find someone else to do it for you, or just force yourself to do the work knowing the reward is worth it.
The Entrepreneur’s Dream
You can do really well without ever having an evergreen heavily tested sales funnel business, but guys like Rich and Eben prove that there is much value in setting up the systems that leverage the sales funnel model.
If you have people doing all the testing and tweaking for you, then you can settle back and do what you enjoy, just as Rich does. He spends his time reading books and keeping on top of all the latest ideas and trends, and then processes and teaches these ideas to his clients.
Every time Rich learns something he wants to try in his business, he can just tell his team to go investigate it and then test it. That’s a pretty awesome place to be as an entrepreneur: Have an idea and then have other people see if it works for you.
If you’re keen to see exactly how Rich manages to sell so much of his product you can see it all in action by watching one of his webinars.
Listening to talks like what Rich delivered at Jeff’s event makes me excited about information marketing again. I’m keen to get something on the market so I can begin to finally build a proper funnel and deliver value to the people who want more from me.
That’s something I’m working on right now. If you’re thinking information marketing is the way to go too, but you’re not sure about doing launches, experiencing what Rich does is definitely worth the effort. Perhaps an evergreen product that you sell through webinars is the path you want to take too.