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The Making of an Info-Product (Renegade Millionaire)
By Robert Skrob | September 29, 2011
For 6 years, select information marketers have been “by-invitation-only” subscribers to Dan Kennedy’s Information Marketing Special Reports and Info-Marketing Letters. Now, for a limited time, Dan has opened his vault to make these available to you.
If you’d like to find out more about the archives, visit www.DKArchive.com. Here is an excerpt from Volume 1, Issue 4 of the archives. I’m sure you’ll find it valuable and enlightening.
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There are a number of strategies illustrated by how I assembled my product The Renegade Millionaire System. I’ll discuss a few here.
1: Leverage. There aren’t that many points of leverage in our business. One is the customer base we acquire. Another can be capital. But a very, very important one is time. Your personal time. The time it takes to get from idea to product in the marketplace. While I am famously anti-employee, I have frequently involved others in my product development in order to gain time leverage. And a lot of people have missed noticing this before.
My most successful product, The Magnetic Marketing System, first published (in a different economy) as The Small Business Emergency Survival System, was put together by Gerry Ballinger (now deceased). He went through all my materials and wrote questions to interview me, and that produced the audio tapes. He pulled together the examples from my files, reformatted them. I paid him a nice royalty.
My Power Points product was completely put together by Kathy Tolleson. (She also created a Christian edition of that same product, which they have marketing rights to.) With this product I’ve again used a similar approach, having Lee Milteer review all my previously published works as well as unpublished material, build questions, conduct an interview. When I rewrote Psycho-Cybernetics, I used a freelance researcher to find the anecdotes needed. I rely on Steve Tyra to edit most of my audio, so I need not take the time to sit in an edit booth or do a pre-edit on paper.
2: Reverse Engineering. This product, like most of my info-products, was built backwards. I developed the sales pitch first, product second. This product began with the idea that I wanted to update, modify, correct and confirm certain principles and aspects of everything said and written previously, in one, condensed resource. But what wound up as the real focus of the product—the subject of ‘autonomy’—evolved as I wrote the first drafts of the sales letter.
3: Themes. The best info-products have one to several key themes, USPs, positioning, a viewpoint. The consumer needs a very concise way to pigeonhole and understand what the product is and does and why they want it. The great Hollywood impresario Mike Todd once said that any movie idea that couldn’t be written on the back of a matchbook was no good. In this case, I’ve built a product on several such premises, each able to fit on the back of a matchbook. One is the ‘Renegade’ positioning, a natural extension of my long-used ‘No B.S.’ and contrarian positioning. There are mountains of ‘millionaire’ programs, but only this one devoted to being a ‘renegade millionaire’ like me. Second, “3 Programs in One.” Third, the goal of “Autonomy.”
4: Recycling. This is another important point of leveraging in this business: recycling the intellectual property we create. I have done this frequently and consistently throughout my 25 years in this business. Virtually nothing has gone to waste, and almost everything has seen more than one reincarnation. This product is the ultimate recycle project; everything that came before was revisited and used. In addition, I included an ARCHIVES BOOK as one of the components, and it is entirely made up of “classic material” used with no new work whatsoever.
5: Price. Platinum Member Corey Rudl has the most sophisticated and accurate process for setting the “best” price for each new info-product he puts into the market—“best price” meaning the ‘sweet spot’ where selling the greatest number of units and getting the highest price possible without reducing number of units sold meet. Because Corey does all his marketing online, he’s able to easily and efficiently test different prices.
Marty Chenard has another system for setting price. I confess to less sophistication and no testing, but I do claim a great deal of understanding of my customers’ attitudes about price. The questions is: what is the highest price they will feel is lower than expected so they’ll respond in the greatest possible numbers? The other important point is that I establish my selling price first, based on the planned sales pitch, and then decide on the components that will go into the product. I build the product to the price; I do not build the product and then price it. In this particular case, I wanted a high enough price to support JVs, online affiliate marketing, but again, not a price so high it impedes sales.
6: Margin. You are supposed to get high, high margins with information products. This business should have very low overhead, but it can have high costs of sale, and you want sufficient margin to allow you to take advantage of any and every distribution opportunity you can find. If you sell by speaking, you may be giving as much as 60% to the seminar promoter/host/client, and incurring travel cost, and taking time away from other profit-producing activity to go and speak. If you sell by your own advertising, direct mail and other media, a 60% to 80% cost of sale should not be a surprise.
Over time, you may need to drop the price of a product as it ages or if you are in a finite market. You should consider all these factors. And you should never—never!—feel controlled in setting your price by some set multiple of manufactured cost. However, in direct-response marketing, you never want that margin to be less than an 8X markup; every dollar of cost is at least $8 at retail. In this case, the manufactured hard cost of this product is a tick under $90. Then there are royalties to Lee and to me. Because I produced a sizeable quantity, there are monthly warehousing charges. The product carries a $1,995 retail, and some will sell at that price, but most will be discounted. The average selling price will be about $1,500.
7: What’s Next? The single most important question in this business. Every product should set up the sale or actually make the sale of whatever’s next. In this case, for personal reasons, I chose not to tie a continuity tail to it, although I certainly could have. What I am doing is using the product to organize the ‘herd’ that will want to attend a once a year boot camp/retreat featuring expanded discussions of topics introduced in the product.
8: Actual Production. I think you have to be efficient in actually producing your info-products. Elsewhere in this Issue, I talk about mistakes made in being too cheap with vendors. Lee and I marathon-recorded this product in 2-1/2 days at my house. The editing was entirely delegated to Steve Tyra. I had it produced by Protocol (formerly Cassette Productions Unlimited) because they are a one-stop shop, even though I’m certain I could have shaved the cost by $8 to $10 by using multiple vendors or using a lesser quality vendor. I had Pete Lillo prepare all the graphics and handle the transfer to Protocol, so it got done right, on time, without me.
Including narrowing down the questions prepared by Lee, preparing for the interview, assembling the written material, everything, I had less than 15 days invested in the development and production of the product. To many people, that sounds like high speed, little investment. But think it through. Let’s assume we wind up selling a million dollars of this product. If much of that is sold with revenue splits, assume $500,000. Divided by 30 days = $16,600 a day. I can make no less the $7,800 a day doing other things, including consulting—with no capital investment in inventory. I average $10,000 the days I work. So if this required an investment of 60 days, it’d arguably not be worth doing.
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If you enjoyed this excerpt, you may want to review the entire Dan Kennedy archive. It is available for a limited time at www.DKArchive.com. Every one of the 72 issues is packed with advanced, specialized, experience-tested insights into what it takes to succeed within the info-marketing business. Visit www.DKArchive.com to reserve your copy.
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