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Pre-sales can be an effective way of getting something built that you might not have the capital for, but I think people often don’t consider the costs. I see a lot of people jumping to the pre-sale model without weighing the pros and cons.
You have to remember that the WHOLE experience is a part of your product. That includes wait time just as much as it includes the quality of materials that you use. We talk about bootstrapping and why it’s not just for people that already have large audiences.
- 04:36 “How do pre-sales affect customer experience and brand perception?”
- 05:37 Breaking down products into two different categories:
- Products that solve a problem and save people money
- Products that are nice-to-haves
- 07:05 People often use pre-selling to validate a market.
- 08:09 However, while pre-sales can validate a market, there are others ways to do it:
- Ask your audience what problems they are experiencing.
- Talk to people in person. Network or meet with businesses to find problems you can solve.
- Look in forums. You’ll find a lot of common issues posted there.
- Passively listen. Instead of being the one to ask, you can immerse yourself in an industry and look at what people are saying to each other.
- Put up a landing page. Create a value proposition and provide an incentive along with a way to subscribe to stay notified.
- 12:30 Viability for platforms like Kickstarter.
- 14:23 The risks of doing your own pre-sale and coming up short.
- 15:06 Why I don’t think pre-sales are good for brand perception and customer experience.
- 15:27 “But I don’t have as big of an audience as you do!”
- 16:02 When a customer buys a product from you pre-sale, it could be 3–4 weeks EASY (if not many months in some cases) before they receive the item. You can justify and explain this all you want, and you can set the expectations and make sure the buyer knows all of this, but it WILL affect the customer experience and the brand perception.
- 16:37 You cannot beat the experience of purchasing a product and having it arrive on your door step 2, or 3 days later. You cannot beat it. Plenty of other designers sell their work the other way, but I guarantee you my customers view me differently. They have a better experience with me and it plays a huge part (even if you can’t measure it) in brand loyalty.
- 17:10 I have a bootstrapping mentality. My philosophy with The Overlap Technique extends to products as well. If you are overlapping, you should have money that you’ve generated to fund the production of large product runs. You can either save money from your day job, or generate income from your side pursuits through one of the following from the Trifecta: Products, Client work, and Teaching. Any revenue from those should be extra if you have a day job that is paying bills. I propose using that income as your capital for building products.
- 18:43 The problem with automated product creation services.
- 20:36 The best time for someone to make a referral is shortly after they’ve made the purchase.
- 21:59 If you ever intend to make high quality products in the future, don’t cut corners in the beginning. The first impression you make is the most important. You’re going to spend a long time undoing that later on. It’s better to do it right the first time.
- 23:10 It does take a long-game mindset, but you will come out ahead if you plan to stick with this effort. If you’re only in it for the short term and you’re focused on making sure you cover your immediate expenses right away, then pre-sales are about the safest way to break even. But if you ever want to grow, you have to think long term, and you can’t run from investment. Investment is your friend.
- 26:35 If you haven’t done products before, you have to treat this as starting a new business (even if it’s under the same brand umbrella). When you’re starting a business, you shouldn’t be focused on making your money back immediately. You need to be thinking long-term. Everything in business should be a long-term investment, not short-term.
- 27:49 If you’re building a product, I would treat the money you’re putting into it as a 1-year investment, MINIMUM. Don’t worry about making your money back immediately. Think long-term.
- 27:57 Put money into this product that you don’t expect to get back for a year. Don’t allow yourself to be in a position where you need to get this money back right away to pay bills. That’s scarcity mindset. You’re never going to grow that way. You’re never going to have a successful business that way.
- 28:18 Create some space. Support yourself with a day job, save up some client money and invest, invest, invest. Don’t worry about getting the money back right away, right now you want to focus on making the best impression that you can. That first product is the gateway to your brand for your customers.
- 28:54 If you make a good impression, your customers will stick with you and support you and buy your future products.
- 29:11 Creating buzz for a product before you have it.
- 34:40 Art is an emotional thing. You want to share what you’ve made with other people and let them experience it. But this emotion can cause you to compromise in order to make it happen prematurely. Going the pre-sale route WILL cost you something.
- 36:07 Pre-sales cost someone something. You have to ask yourself: Do you want the cost of that to fall on your customer? Or do you want the cost to fall on you?
- 36:35 Building the product first and then selling it to the customer is about THEM.
- 36:49 Pre-sales are about YOU:
- YOU want to build this product
- YOU can’t do it without their money
- YOU need funding
- 36:57 The CUSTOMER is the one who loses when you either A) Spend less on the quality so you can get it out sooner, or B) Make the customer wait for a long time because of a pre-sale.
- 45:22 “Do you think one could reclaim better customer expectations after the initial pre-sale by only doing that once on the first product?”
- 45:39 Yes, however, you started out in the negative, and now you have an uphill battle. So you’re going to have to work hard to fix that. You’re going to have to work hard to set a new precedent for yourself. It will be the most difficult with your early adopters—which is a shame because those people tend to be your most loyal customers in the long run.
- 46:01 Ask yourself: If you have such dedication that you would work from your second product on to have an extremely high dedication to quality, why not back that up to the first product? Why not think less about yourself and save up a few more months and build up capital and start with the first product that way?
- 46:58 If you’re still absolutely set on doing pre-sales, here are some things to contemplate.
- 48:42 Operate how you wish to be treated when you interact with other brands.
- 51:01 This mindset and philosophy scales. You’re not just limited to hundred or thousand dollar projects. You can approach larger products the same way and create them without pre-sales.
- 53:09 When you pre-sell, you run the risk of losing interest. When you build the product first, you flip the pre-sale model over: You’re actually building UP interested and momentum up to the point where you release the product, and THEN you have the added bonus of your customer receiving what they purchased immediately.
- 56:24 “Have you ever had products that didn’t sell well?”
- 59:22 “Did your first product sell well?”
- 1:00:19 “What if you only have one product? Should you put some other products in your store that you haven’t made yet?”
- 1:01:22 You’re going to be scared. It’s normal. Just ship your first product. That’s the biggest hurdle.
3 years ago, I had 300 followers and I didn’t do pre-sales for my first product.
It’s not about the $20 or $30 you get from this one sale. Think about the lifetime value of that customer.
Pre-sales are about YOU.
The whole experience is a part of the product.