This is part 3 of a 6-part series on how to price your digital products.
I’ve worked with a lot of budding online entrepreneurs who are working out the details of their first product. And all too often, they end up wanting to allow a few people into it for free in order to get their feedback.
That’s a mistake.
The only valid form of product validation is if somebody yanks out their wallet and hands you money for it.
Many, many times, I have seen (and experienced) prospects give all kinds of validation for a product. They’ll tell you how awesome it is, that they’d buy it – blah blah blah. But, then when it comes time for them to actually purchase what they said they would purchase, it is crickets.
There are two things going on here:
- If they don’t pay for it, they’re not invested in the outcome. They won’t value it and they just won’t take it seriously.
- They don’t want to disappoint you. And because they’re not invested it in, it is all too easy for them to extend platitudes to you. Sure, they like your product. Because you gave it to them for free! But, there’s no value exchange so therefore it means absolutely nothing.
There can be a time and place to give away your product for free. For instance, if you would like a review from an opinion leader in your market, hooking them up with the product for free makes sense. However, don’t use freebies and the feedback they get as any form of product validation.
So, how do you validate and test a product?
Here’s the abbreviated version…
- Put together the offer (before the product exists).
- Pre-sell it.
That’s right. Take orders for your product even though you haven’t made it yet.
If this is going to be a digital course, then it’s awesome. You can teach the course in real-time with any customers you get, record the whole thing, and you’ll actually complete your product quickly.
If you want to offer a discount to them because they know they’re in the “first run”, then so be it. That’s fine. But, do NOT give it to them for free.
And if nobody buys it, you just saved yourself a lot of hassle. Iterate. Make some adjustments to the offer and try again. Don’t go “all in” and make the product until you have an offer which converts.
If you only get 1 or 2 sales, then make a judgement call. Either tweak the offer and see if you can get more, or simply refund their money and move onto the next idea.
Don’t Have A Product Yet? Do This…
You’re not even really in the game unless you have an offer of your own. So, if you don’t have one, you need to make that a priority.
At the same time, the last thing I’d want you to do is go out and make some big honker of a product or course without any real validation of the idea.
The beauty of digital marketing of intangibles (information, coaching or services) is that you can pretty much make an offer without any ramp-up time. You can pretty much create value out of thin air. It barely takes any time at all!
So, here’s what you do…
- Really nail down what you believe would be a killer offer for your audience. Think of the offer which is going to get them interested. Remember, it doesn’t matter that you haven’t made it yet. In fact, its better that way.
- Outline that offer. Make damn sure you’re not promising anything you can’t deliver.
- Write the offer letter (or sales page, whatever you want to call it).
- Take it to your market. The point is to drive traffic to this offer and see what kind of conversion you get. Do people buy?
- If people buy to a point where you’re happy with it, pat yourself on the back. Finish out the marketing campaign for it, then shut it down and get busy delivering to those new customers.
- If people don’t buy (and you had enough people see the offer to have a decent sample size), then it wasn’t the right offer. Go back to #1 and find the offer which they want.
- If you get a trickle of sales, but not nearly what you would have hoped… then look at it as a potential sign of life. This is time to make some iterative changes to the offer. Find those tweaks that will raise your sales. If you can’t pull it off (or don’t want to), then refund those people who bought and then go back to #1.
See you on the next post. 🙂
Your Monetization Coach,