I’ve been reading the latest newsletter from Trendwatching. It’s all about Generation G and how we, as a society, are becoming more caring and generous. There was also some information about how businesses need to balance philanthropy and profit.
So how do you do that with the reports you intend to use as premiums?
Start by realising that you are NEVER going to use a free report.
What you are going to use is a report with an assigned value (a price) that you give away in exchange for something other than money. In most cases, the price you receive will be a name and e-mail address.
That changes the picture a little doesn’t it? Instead of worrying about how much you should give away for free, you can think about how much information belongs in a report priced at $19, or $29, or whatever you set the price at.
And here’s a quick way to work out a ratio of price to content.
Let’s say the price is set at $19. You want a short, attention getting report that’s useful and encourages prospects to follow up for more information. It also has to be well focussed on one aspect of your area of expertise.
Plan to charge your customers a penny per word for the information you supply. That means they get 1900 words for a $19 report – or about eight pages typed and double spaced. (Next time you buy a magazine, look at the cost and divide it by the number of words inside. You’ll see a penny per word is a high price.)
You can already see that 1900 words is not going to let you cover a lot, or go into great depth.
What it will let you do is show someone a number of steps to getting something done. Under each of those steps you will be able to give readers basic information about what to do, and point them to where they can find more information or instructions.
Have you noticed this is a little backward to what most folks are telling you? You usually get told to write a report, e-book or other information product and then put a price on it. Only the big problem so many of us have is not knowing what limits to set so we know when to stop writing and start selling.
Well, now you can set that limit.
And here’s the great secrect about this method…Setting your writing limit is just like writing an outline.
Set the limit – write the outline. And then if you want to make a change as you go along, just go ahead and make it. Because now you can balance adding another 1,000 words with knowing you have to bump up the price by $1.00.
Is it still worth adding that extra bit of material? Or is it better to write a separate, second report?
Here’s a peek inside the product funnel for you: In getting a customer, you give away four reports. Three priced at $19 and one priced at $29. Plus you have the set costs of maintaining your e-mail list and web site.
The customer you get has a lifetime value of $5300 when you add up prices for the products and services she will buy from you. Now you’re getting an idea of the return on you investment in acquiring that customer.
And, you’re seeing why a product funnel (a series of products and services to offer) is essential to the success of your business. After all, when is the last time you walked into a barber shop or hairdresser and all they offered was a haircut?
Tell everyone what you think. Post a comment or question and start a conversation.