After the Product Launch
This article is just kind of loud thinking about marketing information products on the internet.
The old model was to produce an ebook, video series etc. and to market it then via the own website, using PayPal or Clickbank as systems for payment and delivery.
Promotion worked mostly via affiliate networks and creating buzz using product launch techniques. Most products, even excellent ones, were dead a short time after the launch because all attention of affiliates and target audience was going with the noise to the next launch.
The need to launch even for the most successful internet marketers several high profile products per year just to stay in business and pay for their overhead did no good..
- not for profitability
- not for the quality of the products
- not for value delivered to customers
Product Life Cycles without the Maturity Phase?
Even if we pretend for a moment that there was no quality problem with these many products released on a very tight schedule, the fact remains that the product life cycle was cut.
A normal product life cycle looks like this:
Here is a short explanation about the meaning and the function of the four product life cycle phases in terms of profitability:
- Development and testing naturally are investment phases, where you spend money. The cash flow is typically negative.
- After testing comes the launch. The goal is here fast and deep market penetration. This helps to establish the necessary scale to become highly profitable and to cement a competitive advantage over me-to products.
- A mature product should provide a stable positive cash flow over a reasonable time. This should make the whole project profitable, covering the cost incurred in the development phase and in the launch phase, pay for the cost of capital etc.
- The harvest phase is concerned with recovering as much as possible from the investment when the product becomes obsolete. This may be done by using assets as long as possible and not replacing them, by transferring resources to new projects and by transferring customer trust and brand recognition to a new project, if possible.
Now compare this to a graph I have drawn for a typical internet marketing product launch:
If you watch this graph you will see that the cash flow over the whole project is much smaller. In fact the cash flow is only positive in the final stage of the product launch and in the first part of the harvest phase. This means less profit, but it also means that you must strictly limit the expenses for product development and testing. The result is in diminished product quality.
Why Do Marketers Throw so Much Profit Away?
The shortcomings of this launch-and-run strategy are so obvious, that it begs an answer to the question: Why do people still use these aborted product life cycles?
I think there are several reasons for this. Some of them might be:
- The digital nature of information products sold through the internet means that these products can be copied without effort by anybody. And they will be copied, because there are more than enough people around who do not care about copy rights and intellectual property provided both belong to others.
- Affiliates will run after a launch. A successful launch means high market penetration. High market penetration means conversion rates will fall: Everybody will still buy only once, provided he likes the offer, whether 3 or 15 people tell him about the deal. And lower conversion rates mean less rewards for the same effort by an affiliate.
- Limited product support, caused by the anticipated early end of the product life cycle erodes the value for the customer further and damages the value of the producer’s brand. Sales are hurt even more and the product leaves the marketplace even faster.
- Limited resources for product development make for poor products. And poor products need pressure sales tactics, as they are accommodated in a product launch environment. Mature products do not accommodate pressure sales tactics, as products in the mature stage are readily available. Thus sales will break down after the launch.
- The aborted product life cycle strategy allows still for some profits.
Possible Solutions
I am not the first one to note this problem, or to think about solutions. In fact there have been many product launches promising by themself to provide such solutions. The main strategy in the internet marketing place has been up to now to extend the product life cycle via continuity programs. This means, as far as information products are concerned, to drop-feed the information through a membership website or via coaching programs to the customer. It is easier to detect and act against illicit sharing of passwords and usernames than against outright copying of ebooks, videos etc.
Others left – at least as far as own products are concerned – the information product market and moved to ongoing services like web hosting, audio streaming.
But I think there arises a new opportunity to solve that problem: Platforms such as app stores by Apple and Google, Amazon offers for Kindle devices; probably Microsoft will establish a similar system, and regional book dealers will also try to develop such platforms.
Why do these platforms help us to solve the problem? First of all, they control the content distribution, i.e. on which machine an app or ebook might be copied or not.
But there is more: You can update an app on a mobile device to keep the quality high and the information up to date. This adds an element of the drop-feeding to your product, as mentioned earlier. And it allows you to offer a high quality product to new customers, while keeping the existing ones happy.
A third aspect: The cost for the user of an information product has two components: The money spent on the product and the value of the time used to consume the product. A mobile product reduces the value of the time the customer needs to invest to use the product. He can read and listen while sitting in a train, plane, waiting at the doctor etc. He can spare his quality time for his family and his customers.
Please Share Your Thoughts
I invite you all to share your suggestions how to overcome this problems in information marketing. If you have an idea how to solve the matter, or if you want to add another aspect to the problem description, please leave a comment.
Webhosting Revisited
I am currently moving my websites back from a shared webhosting environment to a dedicated server. Why do I take this extra cost, generated not only by higher fees for the dedicated server, but also by increased workload when I have to administer a webserver in-house?
I had already a dedicated webserver a couple of years ago. I had abandoned it for three reasons: First of all the monthly payment is at least three times as much as a high end shared hosting account costs. But more importantly that old dedicated server used a Linux distribution which was less than stable, and I had to rebuild the server periodically. On top of that the support was less than perfect. If I had a question, the answer was mostly “We do only support the server in its standard configuration.” This meant a lot of work for me, and I spent way too much time administering my system.
I returned to a shared hosting plan. The deal was sweetened by many extras, like video hosting, a mailing list service and more. Considering it all, webhosting was almost for free. This was a great deal, at the first glance as it turned out.
I got what I had paid for.
But it did not too long until I realized that my websites were down for several hours, repeatedly. After complaining it turned out that the server was switched off because of system overload. But worse: I realized that spam links had been injected into all my Word Press blogs. Somebody had managed to access the blog database. I complained to the hosting company and repaired the blogs. Luckily I had backup copies available.
After a few days my sites were down, again. I called the hosting company immediately. It turned out that they are moving the whole shared server to a new machine, due to the prior problems. I was happy, for a while.
Soon after that I found that my traffic stats were gone. They had switched the statistics program from AW-Stats to Webalizer. And much worse, I then realized that my helpdesk installation was no longer accepting email, because some Perl modules had been removed from the server. All that happened without any communications about the changes from the side of the hosting company. I decided quickly to get my dedicated server back, but this time with a decent service package.
A Hosting plan implies more than renting space on a server
The lesson learned from both scenarios is clear: If you pay for hosting, you do pay first and foremost for the people who maintain the technical infrastructure. This applies to a shared hosting plan as well as for a dedicated server. It’s true that I pay for the machine running the website, for electricity and for bandwidth. But the main benefit is the people who are taking care of the infrastructure 7 days per week, 24 hours per day.
What makes a web hosting service excellent?
The term “service” implies that there is a human being either performing a task for me, or helping me to perform that task, and this is exactly what I need. This service people need to be available at the time I need them. Waiting for an answer from Friday evening until Monday morning might well mean that my website is down over the weekend. This is most important in a shared hosting environment, where my own options to correct a problem are very limited.
Of course the service people have to know their stuff. If I ask them whether I can edit a certain configuration file manually, or whether the automation system will overwrite my changes at the next opportunity, I do need an answer.
I award the crown of excellence to service people if they do communicate as appropriate. One example is the implementation of a major configuration change or software update. Such events might render web applications dysfunctional and lead to a loss of statistical data. I want to do a backup before such a change, and I need to do some testing of my applications after it is implemented. For this reasons I must hear from my Webhosting company in advance about planned software and configuration changes.
The Power of Mobile
Watch this speech given by Google’s Eric Smith recently in Berlin to get an idea about The Power of Mobile.
He mentions a few concepts providing me with quite a bit food for thought:
- The huge potential which becomes available whenever people connect cloud computing and mobile devices
- The concept of crowd sourcing. You can get almost instantly a picture of events thousands of kilometers away by receiving information from a magnitude of eye witnesses. Raw information is distributed before spin doctors had a chance to get their hands on it.
- How this changes the balance of power between buyers and sellers
- How this changes the balance of power between government and citizen.
We had the chance to witness The Power of Mobile, which develops whenever millions of people have the ability to access this huge pool of information and the ability to publish instantly what they see, hear and think. Propaganda generated by governments and organizations like Hezbollah can now be dissected. Then suddenly becomes visible that one and the same person was shown as a dying bombing victim on 3 pictures taken in different places on different days, and the same toys scattered in the ruins of buildings on a host of photos taken in different towns on different days. (Examples taken from Hezbollah propaganda during the last Lebanon war)
Even the mere access to mobile phones, without the extra power of instant multimedia publishing has proven remarkably powerful. If people see something in the TV they may call a friend in the area affected and ask. “Are you o.k.? And what is going on.” As a result protests against Israel’s military offensive against Hamas in 2008 were much stronger in Morocco compared to Jordan, Lebanon or Egypt. People could already differentiate between the truth and TV coverage, as long as they were not too far away from the scene.
Such thinking is not new, but still valid and also economically powerful. I remember an article published about 20 years ago in the Harvard Business Review explaining that in rural India at the time the lack of phones was not a mere symptom of poverty, but an important source of poverty. The reasoning: Small farmers had to sell their product for a very low price to wholesalers, because they did not have a chance to know what people were paying in town for food. With a phone they could have called shopkeepers in town and ask what the pay for rice, wheat, potatoes or corn, make an informed decision what to plant and almost immediately increase revenue substantially.
How to Use RSS Feeds with WordPress Blogs
RSS feeds with WordPress provide easy access to your blog content for your audience. A growing number of mobile phones have nowadays also a built in RSS feed reader.
As soon as the feed subscriber accesses his RSS reader or personalized Google homepage, he will find a list of the newest blog headlines. If he clicks on a symbol next to the headline, he gets your content in a text format. The headline acts also as link to the original content on your blog. This video gives a short demo showing ow to use the RSS feed:
Why to Use It
Why would you want to allow your readers to access your content as feed outside of the carefully crafted blog environment? The simple answer is: It is always a good idea to make it easy for your customer to access your message. And if a part of your message needs other formats like audio or video, which are not available via RSS feeds, there is still the link to the original blog post. In this case the text acts as a teaser to visit the blog and watch the video or to listen to the audio content.
And why would a reader of your blog add your content as feed to his RSS reader? Feeds are a very effective method to stay on top of a topic without browsing the web for hours to check favorite websites for changes and fresh information. This saves him a lot of time, and at places where he pays for bandwidth it saves him also a lot of money.
How to Use It
RSS feeds with WordPress provide easy access to your content. And the beauty is: It is already incorporated in your standard blogging software. WordPress automatically produces feeds with your posts, and then also a feed from the comments on every single post. Modern browsers show an icon listing the feeds in the address bar or on top of the webpage display window. But to make it easy for your readers you should add a link to your feeds to the sidebar of your blog.
Add More Features
I suggest you go one step further and use Google’s Feedburner service. This allows you to offer one single feed working with all feed readers. Feedburner gives you also statistics which allow you to gauge how many people read your feeds, and a feature to offer feeds via email to your audience.
In short:
RSS feeds with WordPress are a foolproof way to make your content easily accessible to your audience on a wide variety of platforms. It is already part of the standard WordPress blogging software. To make it easy to use, you should take care that your blog theme contains a link to the feeds. If you want to get stats about the use of your feeds and additional features, Feedburner is a good choice. It is free, makes your feed even more accessible and provides a simple set of stats about the use of your feed.
How to Clean-Up a WordPress Database
A lean database will help your WordPress site to load fast and to run smoothly.
This video will show how to add speed and stability to your blog by removing unneeded clutter from your WordPress database.
When I became aware of this little secret, I removed several hundreds of drafts for posts and pages. They were many months old, and absolutely useless. It took me quite some time to do this cleaning process.
But by good luck there is a way to tell your WordPress blogging software not to pile up these mountain of ols drafts. If you want to know how this is done, fill in your firstname and email address into the form below
If you want to know how to avoid an unneccessary bloated WordPress database in the first place, fill in your firstname and email address into the form below:
