How Great is Your Product?
February 12, 2008 by Isabel Isidro · 3 Comments
Ryan Allis, CEO of the marketing and online communications firm iContact Corp., in his book “Zero to One Million: How I Built a Company to 1 Million in Sales … And How You Can Do” has a great section on what makes a product great.
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According to Allis, the perfect product has the following attributes:
- It fulfills a need or want
- It has either niche market appeal or mass market appeal
- It has at least a 2:1 markup ratio; 5:1 or higher is optimal
- It has a high perceived value
- It must be replenished or repurchased by the consumer often
- It is easily up sold and cross-sold
- It has a related backend product
So how do you know if your product is great? To find out, you need to assess your product against two factors: inherent qualities of the product and the state of the marketplace.
Inherent Qualities of a Product
- Is the product of high quality?
- Is the product effective?
- How valuable are the benefits the product gives to the consumer?
- Does the product increase pleasure, increase utility, or reduce pain?
- Must the product be reordered?
- Can the product be developed easily?
The State of the Marketplace
- Can it be obtained or produced for a low cost so as to support a high margin?
- What is the current demand for the product?
- How many other competitors are selling the same or a similar product?
- How many serious competitors are there?
- What are the sales figures of these competitors?
- What are the product’s substitutes?
- Are there any factors that might increase or decrease sales of substitutes?
- How hard will it be to differentiate the product from competing products?
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Isabel Isidro is the co-founder of PowerHomeBiz.com. A mom of three boys, avid vintage postcard collector, frustrated scrapbooker, she also manages Women Home Business and Learning from Big Boys.
How do you feel about information products? My mentor James Brausch always talks about them because the markups are insanely high. What’s your take on that?
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There’s a lot of great advice in this post on planning your product.
But there’s an important point not mentioned in this post.
In the online world, testing is king.
Everything is testable, and (with enough traffic) you can get meaningful results quickly.
We typically think of testing our pages for their ability to convert traffic to buy a product.
And testing is BORING.
(That’s why testing software such as Muvar is essential to getting this done without going crazy.)
But there’s another use for testing when we’re thinking about developing a product.
Many marketers use testing to discover what the market will buy so they can refine some of the details of an information product before the product is finished.
We can and should be extremely thoughtful in designing a product, but we can’t be seduced by all of our logic. We need to let the marketplace tell us what it wants.
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Neil … I agree with you about information products. You write the content, repurpose it in any shape or form you want (publish it in your site, compile them in an eboo, put them together in a book) and earn from the same content again and again. That’s why we are in the information business.
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