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Creating Digital Product: Small Inexpensive or Comprehensive one?

by TrueStory
24 replies
For someone who has never created a digital product, who wants to start,

Would it be better to create something small (a simple guide, a video course) and sell it for 30-40 bucks to tread waters

OR

Enter arena with the bang and create multi-lesson, comprehensive training on a subject. Price it in the range of $200-500?

There is not shortage of content and useful knowledge. I fear that small guide wouldn't do the justice to fraction of knowledge I'd like to sell.

I do not have a list (not my own), which brings me to: I don't mind paying for advertising and using various marketing avenues to promote my high ticket product.

I understand that 200-500 dollar training course is not the most expensive training in my industry. But guys that charge 2000-5000 per training have made name for themselves.

Your thoughts:
Start small, test the market; probe interests; tailor product to market's needs, then create something big.
OR
Start big; deliver great product and enter arena with shit-load-of-value.
#comprehensive #creating #digital #inexpensive #product #small
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  • Profile picture of the author Jason Kanigan
    Validation is the first step.

    Have you heard the phrase "minimum viable product"?

    There's a reason why product developers use the MVP model. You do not want to sink a huge investment into product development only to find nobody wants it.

    Additionally, with the concept of laddering, you can continue to sell to buyers. The goal is maximizing Lifetime Customer Value (another term you should get familiar with, if you're not already) and a one shot sale is probably not the best way to achieve that.

    Does this answer your question?
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  • Profile picture of the author toydistrict
    When you launch your first product, it is a learning curve & equips you with experience. The second launch becomes easier & you know the pitfalls and mistakes to avoid.

    Going straight out with a high ticket course might not be a good idea. Especially if you are an unknown entity.

    Instead, build a funnel. Something cheap in the front end, then something else, then the high ticket course at the end.

    You will get mixed answers on here. But I say test the waters. There is no better experience than trying it out.
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  • Profile picture of the author IgorOMC
    Start small- according to psychology a consumer likes to try small before buying big.
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  • Profile picture of the author Shamim Ahamed
    Sustaining innovations which involve small improvements can be introduced at a faster rate, especially for high-tech consumers goods, such as laptops, digital cameras, etc.
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  • Profile picture of the author TrueStory
    Ok, kind of what I was thinking too, especially the MVP.

    I am afraid to come off cheap by offering 30 dollar product. Especially, if it's not packed with as much value as $300 might have.

    As far as time-cost investment, I guess it's a difference of medium. Instead of writing a guide and doing few tutorials, I'll be creating more video tutorials (in depth) and more in depth content.

    Realistically it's probably go for something cheap to collect a list. Thanks for re-affirming my thoughts!
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    • Profile picture of the author Jason Kanigan
      Originally Posted by TrueStory View Post

      Ok, kind of what I was thinking too, especially the MVP.

      I am afraid to come off cheap by offering 30 dollar product. Especially, if it's not packed with as much value as $300 might have.

      As far as time-cost investment, I guess it's a difference of medium. Instead of writing a guide and doing few tutorials, I'll be creating more video tutorials (in depth) and more in depth content.

      Realistically it's probably go for something cheap to collect a list. Thanks for re-affirming my thoughts!
      Depends on your target market and what problem you're solving for them.

      Some people think $300 is cheap.

      Some people think $300 is so cheap it "can't be very good."

      You are not your customer.
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      • Profile picture of the author TrueStory
        Good point.

        My target market small-midsize eCommerce store owners. Typically, above the break-even mark. The value of my complete product could triple their revenue, increase conversion rate, and possible be worth 2-3 grand. The 300-dollar product idea was intended to set the bottom line, that if you cannot afford $300 course - I don't want you as a customer.

        In consulting field, I've discovered that offering cheap services (and product) generally attract not only cheap clients, but a big pain in the ass clients. I've observed similar pattern in my clients' businesses as well.

        I know about MVP and list building and LCV, however, from what I observed in Internet Marketing space, most start with "freebie" then follow up with eBook, and funnel through to sell something higher value.

        I don't mind giving freebie, but what I don't necessarily agree with is "the middle product". I think it keeps an audience of "can't afforders" that will NEVER buy anything of value from you. On other hand, the higher end products will sell to customers regardless whether they bought middle product or not.

        Like you said, those who think $300 is cheap, would be my ideal market.

        It takes about same effort to sell one $300 product as it does 10 x $30. But with those 10, you've gotten 10 customers that will require support, time commitment answering follow up questions and other follow up procedures. While 300-dollar customer will probably ask for stronger support but it will be "one" vs "ten".
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        • Profile picture of the author Jason Kanigan
          Originally Posted by TrueStory View Post

          It takes about same effort to sell one $300 product as it does 10 x $30. But with those 10, you've gotten 10 customers that will require support, time commitment answering follow up questions and other follow up procedures. While 300-dollar customer will probably ask for stronger support but it will be "one" vs "ten".
          I have not had this experience with my statistics. In my world, it takes less effort to sell the $300 as the $30. The people who have money have money; those who do not, do not.
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          • Profile picture of the author TrueStory
            I meant, selling something above 100 bucks usually takes longer and call for extra proofs rather than selling something a person can buy on emotional whim.

            I can only speak from eCommerce (products), generally, people buy cheaper items readily without comparison shopping. Anything over 100 bucks (again, in eCommerce) tends to be a little longer process.

            Might not be same for digital goods.
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          • Profile picture of the author shmeeko69
            Originally Posted by Jason Kanigan View Post

            I have not had this experience with my statistics. In my world, it takes less effort to sell the $300 as the $30. The people who have money have money; those who do not, do not.
            Exactly right fella. People have perceived thoughts and if you're selling what looks to be a top-end product then, that's the audience you'll attract and a specific one at that. Whereas, if you're selling a $10 product or service then, you'll attract a lot of tyre-kickers who want you to jump through hoops for very little money.
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  • Profile picture of the author Steve B
    Originally Posted by TrueStory View Post

    Your thoughts:
    Start small, test the market; probe interests; tailor product to market's needs, then create something big.
    OR
    Start big; deliver great product and enter arena with shit-load-of-value.

    True Story,

    You're looking in the wrong place for feedback. Neither you nor I know the best way to proceed. It's your target market that needs to be polled.

    They are the ones that will tell you what they want, how they want it, and what they will pay for it. You can guess what is best, but profitable marketers usually do some study first so they are selling into demand.

    Before you make assumptions about what buyers want ... it's always best to research your target market and the competition to see where the demand is, what it looks like, how it is currently being met, and where there are gaps or holes in the demand that you might fill.

    Most new marketers overlook this step and later, after a lot of work and expense, wonder why no one is buying their offering.

    Whichever way you decide to go, verify first that your product is being sought by buyers in your niche.

    The very best to you,

    Steve
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  • Profile picture of the author Randall Magwood
    Originally Posted by TrueStory View Post

    Would it be better to create something small (a simple guide, a video course) and sell it for 30-40 bucks to tread waters....?
    Since you've never created a digital product (small ebook), create one and sell it for $7 and see if it sells. If you can't successfully sell it at $7, then there's a good possibility that you wont be able to sell it successfully at $27-$47.... and especially "comprehensive" courses that sell for $200+.
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  • Profile picture of the author jbsmith
    I've entered markets both ways and they can both work. I do prefer these days to enter with a training program (course, seminar, online training, etc...) that I use to prove the concept, show huge value and then tweak with a "beta" group. Develop a lesson-by-lesson outline, some key points/steps/exercises around each module/lesson - find yourself a beta group of at least 10-ppl and offer this high-end product for a "first-mover" rate so you can test, obtain feedback, gain some early champions, etc...

    Lower-end products tend to fall into one of two camps:

    1. A lead-gen tool like the many FREE + shipping products out there today OR
    2. A paid product that you know will sell at scale and so you may only clear 10-20% ROI after putting money into marketing - but you will sell high volumes where that becomes a business itself

    Think through your entire marketing effort -to really scale you will want a higher-ticket item so you can spend serious dollars on customer acquisition and really scale your business fast.
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  • Profile picture of the author TrueStory
    Alright, i've gotten a mixture of points. My experience is that of eCommerce and applying same logic here doesn't work. Generally, if you open a store with cheap-(ish) products, you tend to attract bargain seekers. If your store positions itself as luxury (higher priced products), you tend to create a community of wealthy people around those products. That was my reasoning for opening with higher priced product.

    First thing first: my "cheaper" product, would be on the same topic as more expensive one. Just less in-depth.
    Second, creating digital products isn't costly for me. Other than time and more editing costs, it's a price difference of couple hundred bucks. And time-wise would be difference of couple weeks. (For example, 3 guides and 5 videos vs 7 guides and 10 videos). I can do them quickly (I have access to great copy writer, video editors, etc.)

    What I learned from researching more into this (digital products and eCourses):

    - I should focus more on the funnel. In eCommerce (especially single-brand products) we rarely funnel. Most people buy because they need the product. In digital training that's not the case. People drip into purchase.

    - Create tiered products for every income level. I never thought of this, but in the future, having a "starter kit" doesn't necessarily prevent me from marketing the "advanced series". I've seen big guys do both.

    - My ROI on those products isn't a priority. I need more consulting clients in the long run. If I can sell couple thousand dollars worth of products - it's fine. The real money is in consulting (training).

    So

    1) I'll start with creating something on the cheaper end (like jbsmith said), to cover my production costs and acquire potential clients.
    2) spend more time on high ticket product (up the price significantly) and delivery a lot more value based on feedback.
    3) provide valuable content meanwhile (via blog, podcasts, youtube channel) thus creating social proof to sell high price ticket.

    It's funny how one can be proficient in one type of marketing and completely behind on another.

    Thanks for feedback!
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  • Profile picture of the author SixFigureGrind
    I would definitely go with the smaller, more focused product. That doesn't mean it needs to be cheap or inexpensive. I just did a pre-sale to my first course for this relatively new brand I'm building (<6mo) and did $1000+ in sales to a list of 135.

    This is the first iteration. I started at $47, then $77, and then $97. Most of the sales came in at $47 but I got some $77s and $97s too. The eventual course price will be $297-$497, but I'm working my way there step by step as I grow the quality of the course.

    Basically, you can get paid to create your product.

    Even still, I would stay focused with your product. It can be problematic to try and create a product that does too many things or covers too much.

    Hope that helps.
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  • Profile picture of the author Jamel Hassell
    Test the market and probe.Build your product in phases. Customer approval is vital. The way of doing that is to engage with your prospective audience via polls and surveys.
    This the way to build minimum viable product and save yourself from excessive spending.
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  • Profile picture of the author hoangcf
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    oh ,Some people think $300 is cheap
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  • Profile picture of the author pheonix44
    I wonder if the model of selling low in order to build a customer base still works. For some they say to start with low prices, build trust and then upsell. The issue is that if one isn't careful they can get locked into those low prices their selling their digital products for.
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    • Profile picture of the author GordonJ
      Originally Posted by pheonix44 View Post

      I wonder if the model of selling low in order to build a customer base still works. For some they say to start with low prices, build trust and then upsell. The issue is that if one isn't careful they can get locked into those low prices their selling their digital products for.
      NO. That is not the issue, not at all. Can you cite some examples from your real life experience? Can you point to anyone who got "locked in" to low prices?

      Simply more of your inexperience shared, isnt' it?

      Being careful, as I bet you know, leads to inactivity and doing nothing.

      GordonJ
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  • Profile picture of the author JohnMcCabe
    Originally Posted by TrueStory View Post

    Ok, kind of what I was thinking too, especially the MVP.

    I am afraid to come off cheap by offering 30 dollar product. Especially, if it's not packed with as much value as $300 might have.

    As far as time-cost investment, I guess it's a difference of medium. Instead of writing a guide and doing few tutorials, I'll be creating more video tutorials (in depth) and more in depth content.

    Realistically it's probably go for something cheap to collect a list. Thanks for re-affirming my thoughts!
    Copywriters have a concept that may help you here. It's called "reason-why" marketing.

    In this case, you have a couple of potential reasons-why.

    First, you said you don't have a 'name' when it comes to selling a course.

    Second, you want to test the waters with a MVP and develop your course around what your initial group of students want/need to learn.

    So you offer the initial test run of the course at a low price. Personally, if you want to shoot for $2k-$3k eventually, starting at $300 makes more sense than starting at $30. Offer the initial course at the lower price point, stipulating that this price will only be available until the course is ready for general release.

    Participants are trading a lower price for the chance that there may be blips or glitches, or holes in the content which you will fix.

    Some course creators have said that your initial beta group often turn out to be your best referral sources, since they had a role in creating the final product.
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    • Profile picture of the author TrueStory
      Good point on doing alpha (or beta) release. I am coming from soft-dev and we used to do this ALL THE TIME. Extremely expensive CRM systems would be given for next-to-nothing to handful of small private clients to "test".

      And 110% on them being the most loyal ones. It's amazing how much people get excited (and even pay money) to be the "outsourced QA" (or we called them Black-Boxers from "black box testing").

      I might actually do that. Right now I am focusing on content (I want to have some articles, vlogs and tutorials on stand by). I need more social proof and brand myself a little bit. So whenever someone types in my name, something comes up on Google other than my website.

      In eCommerce we would do that before launch. We'd start a buzz about a product that wasn't live yet. Got influencers talking about it, got social media set with valuable content, guest blog posts, etc. Then when we rolled out with full blown adverts (I plan on buying ads) - we were social proofed through the ass.

      thank you! And yes, so many conflicting opinions. But it's generally easy to say who's got product out and is making money and who's armchair marketeer.
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  • Profile picture of the author FreedomBlogger
    Originally Posted by TrueStory View Post

    For someone who has never created a digital product, who wants to start,

    Would it be better to create something small (a simple guide, a video course) and sell it for 30-40 bucks to tread waters

    OR

    Enter arena with the bang and create multi-lesson, comprehensive training on a subject. Price it in the range of $200-500?

    There is not shortage of content and useful knowledge. I fear that small guide wouldn't do the justice to fraction of knowledge I'd like to sell.

    I do not have a list (not my own), which brings me to: I don't mind paying for advertising and using various marketing avenues to promote my high ticket product.

    I understand that 200-500 dollar training course is not the most expensive training in my industry. But guys that charge 2000-5000 per training have made name for themselves.

    Your thoughts:
    Start small, test the market; probe interests; tailor product to market's needs, then create something big.
    OR
    Start big; deliver great product and enter arena with shit-load-of-value.

    My best advice would be this; if you are going to be paying for traffic, you have to have high ticket products if you want to make your money back and actually be in profits. You will not make it with low ticket products when you are paying for traffic unless you are a super expert in paid advertisement and know how to get really cheap high quality traffic.

    What you can do;     is have a low ticket product on the front end and a have upsells in the back end. So, you need a proven marketing funnel with upsells. You gotta be smart here!

    Combine both, low price products with high price products. Put them together in a smart way and you should do good!

    Most successful digital marketers would tell you that they make their most money on the back end products (upsells, upgrades, addons, etc.) And in most cases they only break even on the front end offer, because they trust their back end offers.

    Hope this helps!
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    • Profile picture of the author TrueStory
      Ok, I see what you are saying. Yes, I am not "the super expert in paid ads".....I am actually selling products on how to setup paid ads to gain cheapest targeted traffic for eCommerce stores. So I'd like to say, I know a thing or two about "paid traffic" haha

      Which seaways me into the problem at hand:

      What I offer isn't beneficial to a guy who's contemplating spending $50 bucks on a product. To see results of my methods, one must have an outstanding budget in -insert-favorite-advertising-platform of at least $1000-2000/month (often more). Even though I start most of my campaigns with less than that, the end goal is to be way above that number.

      Making money immediately isn't #1 priority. Most businesses don't break even within first year of business. But, hell, if I can, why not.

      Start cheap and upsell expensive doesn't work with the targeted audience. First, they will not even look at product at that price. To them, it's a "jэrk off product that rehashes same sh!t already available online" (I quote my client, did research, fully aware of this phenomena).

      Start expensive without having a known trusted brand behind, is risky but eventually is what I am going to do. But more on that later.

      What you describe (funnel) is a working model and has been used throughout 2000-on, but has been slowly losing its steam. I can stipulate on the reasons, but one is that people read promotional newsletters less and less.

      Industry leaders, like Frank Kern, have jumped onto FB advertising, because, email open rate has plummeted. "Money is in the list" has been touted too many times and is overused by every Jack, John, Rashid, Viktor and Sanjats of the world. Open your "promotions" tab in Gmail to see my point. How many are actually read?

      The money is in YouTube, Social Media and remarketing. This is what has proven me and my clients sell physical products. Newsletters? Great blog content? Still good, but not so much. Leveraging influencers is replacing affiliate marketing. In product marketing - this has also been the case, especially, in fashion industry.

      A funnel can start at $5 bucks, $30 bucks or even $1000 bucks. And what I've been observing is, you either give away something for FREE and sell expensive product, or you don't tier. Kissmetrics have been playing with pricing for as long as they existed, and their cheapest product start at $500/mo. Also, with Frank Kern, you will not find find any product less than $100. While we all know the guy, I know younger marketing professionals that have never heard of him.

      Another good example of no-cheap-pricing is InfusionSoft. Small Business CRM starts at couple hundred bucks "fraternization fee" and roughly 100 bucks per month. What they offer, could be Frankensteined together with 2-3 services (AgileCRM, Zappier, GetResponse, etc.) for the "budget seekers". But for anyone seeking a REAL solution - InfusionSoft isn't shy about charging (they used to charge $999 for training).

      Why? Because, budget seekers are insane customer support headache. For every $29/month cheap-o business owner, you get 5 or more man-hour of support. In clothing eCommerce, we call products under $75 a "loss leader" even with markup 500%. Because, exchange rates are higher and people just like to f*ck your brain for 50-dollar shirt they bought online.

      once again, a lot of good words of wisdom. I can talk about physical products all day, I know software and SaaS model, but when it comes to training products, digital material, I've got stuck behind the time curve.
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  • Profile picture of the author JohnMcCabe
    I can see that you are very familiar with the IM definition of 'funnel', which used to be called a 'product ladder' in one of my past lives. Start with an inexpensive teaser product, now often referred to as a 'tripwire.' Move up to more expensive versions or related products until you max out your average customer value.

    You may want to take a step back and look at a more traditional version of the sales funnel, named because its shape resembles a funnel. Start with anyone who may be vaguely interested, and allow them to flow through your processes. At each stage, some people lose interest and drop out, while others make the effort to take the next step and move down the funnel. Finally, at the end, you have the relative handful of actual buyers.

    At each stage of the funnel, you need a fair amount of content, especially with something like an expensive B2B training course. Each piece of content serves one purpose -- move the consumer of that content down the funnel. Things like special reports (aka 'white papers'), case studies, demos, etc all have their place. Done well, and with the B2B audience in mind, webinars can be very effective.

    Consider building a traditional sales funnel. You can use it launch your beta version, and later to sell the finished course.
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