What Dyson Taught Me About Product Development
Last week I bought the new Dyson V10 wireless vacuum cleaner.
This new toy has turned me into a complete clean freak. Seriously, I've started cleaning my house every day.
Because the new product makes it so easy. I've always loved a clean house and a clean office. I never vacuum more than once a week. Until now...
My new toy makes it so easy. My cleaning obsession is now on full display.
I considered buying the Dyson V11. This is the newer model. What's the difference between the two? The V11 has a digital display. It has a "more intelligent" head. It's £150 more money.
I chose the V10 over the V11 because I've bought 4 Dyson's in 10 years. So I know it doesn't need to 'last a lifetime'.
Buying a new Dyson every 2 or 3 years is crazy. What was wrong with the others?
The new products were so good that I wanted to upgrade!
What about your product portfolio? Are you developing new products that are so good that they make loyal customers want to upgrade?
When I say product, I mean services too.
If you're a consultant, you need to find new ways to dazzle your clients. New ways to make them rave about you. New ways to make them work with you for years.
Let's face it, there are always problems in business that you are not solving for your clients. This may be because you don't have the experience and expertise to do so.
It may be that you are not looking hard enough at the problems that you can solve.
I'm not going to lie. Creating new products and consulting services is hard. It can be months of work before you try and sell them.
That's months of grind that you need to put in. On top of the work that pays the bills.
Because in 5 years time, 50% of your income will come from products and services that you don't have now!
You run a small business. Yes. It might be a business you run alone. That does not mean you can think small. Here's the truth...
You Must Think Like A Big Business
The company 3M were the first to state that 50% of their income comes from products that didn't exist 5 years ago. 3M gave us Post-It notes and other products.
That's the argument for research and development.
That's a great argument when you've got venture capital funding.
When you're funding your business out of cash flow, it's more of a challenge.
That doesn't make it any less important.
Because of this simple truth...
The First Sale Is Always The Hardest!
The first sale is so hard that many companies lose money on the first sale. Not because they sell the product below cost.
They lose money on the first sale because the cost to buy a customer is higher than the profit margin.
Why would companies do that?
Because they will make a profit on the second sale. They will become wealthy on the third sale.
The first sale is always the hardest. Once you have made the first sale. You have the opportunity to delight your customers. Delighted customers come back repeated for years.
This is the model that McDonald's uses. They know they can lose money to buy a customer because the lifetime customer value is huge.
They know that a brand is a promise. And they have one of the strongest brands because of the consistency of their product. McDonald's deliver the same quality of food, in any restaurant, anywhere in the world.
McDonald's sell a consumable product so selling the second burger is relatively simple.
What does this have to do with your business?
Let's say you sell an information product. You've condensed 10 years of experience into a 3-day workshop. That's your core product.
If that's also your only product then you cannot lose money on the first sale. Because it is your only sale!
What if the cost of buying a customer means your business is running on fumes. You are working until your fingers bleed and barely cover your living expenses.
You find a cheaper way to buy customers
You create another product
#1. You Quit!
You wouldn't be reading this if you wanted to quit. So, the less said about this option the better.
#2. You Find A Cheaper Way To Buy Customers
You may be able to find a cheaper way to buy customers. I know business owners that find 90% of customers on Facebook for FREE.
They spend all day in different Facebook groups. They give value and earn trust. And that's how they find customers.
So, finding a cheaper way to buy customers is possible.
That needs a lot of time. It is also difficult to scale. You can't predict how many sales you will make each month.
That's why I prefer Facebook ads. The problem with Facebook ads is the click prices are soaring. The trend is not going to plateau any time soon.
That brings us to the final option.
#3. You Create Another Product
This is where the gold lies!
You see, if you delight your customers with your first product. Your customers will want you to help them solve other problems.
The second sale is easier than the first because you have earned the customer's trust. You have proved that you deliver on your promises.
So... keep loyal customers in your community and create new products for them.
That's the simple model to riches.
There are 2 different ways to sell a second product. You either sell a product after your Core Offer. Marketers call this a Back-End Product.
Or you sell a cheaper product before your Core Offer. Marketers call this a Front-End Product.
If your Core Product is £997, then a Front-End Product could be £97 or £27.
The purpose of the Front-End Product is to make it easier for potential customers to work with you. After all, an investment of £27 or £97 is much easier to find than £997.
The purpose of the Front-End Products are to make the cost of lead generation free. You are building a community of raving fans. People that have worked with you. People that know you can help them achieve their goals. Because they have used your products.
When you make lead generation free through the sale of your Front-End Product. You make 100% profit on your Core Offer. You make 100% profit on your Back-End Product.
Can you see the power of a product portfolio? Can you see why you must create new products?
What If You're A Consultant?
As a consultant, I'm sure you do not solve all your customers' problems.
You may solve all the problems that your skill and experience allow.
If you could wave a magic wand... what problems would you want to solve?
You see, as a consultant I help people monetise a business asset. That asset is their email database.
The bigger their database, the more money they make.
I've run campaigns that have made £672,989 in 9 days. I've run campaigns that have made £120,000 in 9 days.
What made the difference? The size of the database!
The bigger the database. The bigger the impact. The bigger the income.
So, I have a powerful system for a specific type of client.
There's just one problem!
The number of clients with large email databases is small. This means my pool of potential client is small.
How can I increase the size of my client pool?
I need to solve a different problem. I need to build email databases for free!
You see, building an email database is an expensive process that is often slow.
If I can make lead generation free by creating a Front-End Product that will pay for the advertising costs... then I can transform an unlimited number of businesses.
Do I know the 'theory' of how to make lead generation free?
Can I do it in the real world?
I'm getting closer... but I'm not there yet.
I've been working on this for 6 months!
I know that making lead generation free will transform my training businesses. I know that making lead generation free will transform my consulting business.
I know that if it's taken 6 months to not solve this puzzle... that the solution has a shark-infested moat that's a mile wide.
The shark-infested moat is security in my business. The wider the moat the more security. The more sharks in the moat. The more security I have in my business.
You see, I know that most people will not try and swim across the moat. Those that attempt to cross it are likely to die of exhaustion or become shark meat.
Exhaustion is failing to invest 6 months or 12 months in building a system to make lead generation free.
Becoming shark meat is the pain of advertising spend.
That's a competitive advantage that I'm happy to bleed for. That's a game-changing product that I will work to find with fanatical focus.
What is a similar consulting service that you could create?
What problem would your best customers pay you a fortune to solve?
Would that solution create a new market of clients?
If so, you've found your next product or service.
Yes. It may take you months to develop it.
You see, if you aren't growing then you standing still or dying. You are waiting for your competition to catch up and steal your lunch.
That's why you've got to look for new ways to delight your customers. That's why you've got to create new products and services.
That's the path to prosperity and a bulletproof business.
Now It's Your Turn
Decide if you will create a Front-End Product or a Back-End Product.
The simple way to make that decision is to look at your customer numbers. If you've got less than 100 customers, then create a Front-End Product.
If you are making a Front-End Product then make sure the problem you are solving has a huge audience. After all, your goal is to help as many people as possible. Your goal is to get your product in the hands of as many people as possible. That creates trust. Trust is the foundation of the second sale.
If you are making a Back-End Product. Ask yourself if you are solving a second tangible problem. Or if you are solving an intangible problem such as confidence to use your system.
Once you've decided what type of product you will create. Ask yourself what problem you want to solve. That's the foundation of every great product or service. Solving an immediate customer problem.
The second sale is the path to wealth.
The second sales is where security and a luxury lifestyle lies. So please don't nod in agreement and then do nothing.
Write down right now if you will create a Front-End or Back-End Product. Write down the problem you will solve. Then set yourself a deadline for creating the product.
If you've found this useful then please leave a comment below.
If you know a business owner that struggles to get their name out there then please share this with them.
P.S. if you'd like to build your dream business then you need a proven system to create customers on demand.
After many, many failures, I’ve created a simple 5-step system to create customers on demand.
This system made me £672,989 in just 9 days!
I’d like to give you a free ebook that reveals: how to use the simple 5-step system that made me £672,989 in 9 days!
To download your free copy click the link below: