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Establishing a Productocracy - PULLing rather than PUSHing

Discussion in 'Ideas, Needs, Concept Feedback' started by amp0193, May 19, 2017.

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  1. amp0193
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    amp0193 Legendary Contributor Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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    An eye-opening section of Unscripted is when @MJ DeMarco speaks of the power of the Productocracy, and how when you do it right, it PULLS customers to you, rather than you having to PUSH them into buying (with heavy ads & marketing).

    My last business required PUSH, my new business is generating PULL (and I don't even have product for sale yet).

    Let me show you some of the differences:


    Old business (Commodity, PUSH):
    • Product was a commodity. No difference between my product and competitor's product.
    • Required fancy packaging to differentiate (ate into margins)
    • Required bundling to differentiate, for only a slight price increase (ate into margins)
    • Required $15k+ ad spend a month, for only 100k/mo in sales. If I didn't advertise, they weren't buying. If I didn't advertise, I'd lose my search rank. I had no CONTROL, because a $0.50 increase in cpc would ruin everything.
    • relative value was low. The price I was selling at was 40% less than what I think the product was intrinsically worth. But, intrinsic value doesn't matter, when everyone around you is willing to sell a similar quality product for less.
    • Retailers ask me "how is your product better than X Brand?", and the only answer was to deflect away from the product and say "we're cheaper and ship faster!".
    • I struggled to authentically sell the product, and found myself half-assing the business, because I knew it deep-down that it wasn't relatively valuable.

    New Business (Productocracy, PULL)
    • Product is unique to this country. There are no competitors with similar products.
    • No fancy packaging necessary. The product speaks for itself.
    • No similar products in the market, so I can charge what I want.
    • Because I can charge what I want, I can put in slightly higher quality parts and components, without having to cut into margin. I'll just charge a little more to make up for it, and then communicate the perceived value of those upgrades to the customer.
    • People who see my prototype ask me for the privilege of taking a picture of it, and then share it on Social Media... tagging my business.
    • People's eyes light up with wonder and excitement when they see my product, because it is cool, new, and exciting.
    • My friends are telling their friends about it, and I never asked them to. They never told anyone about my last business...
    • There is no competition, so any advertising I choose to do, should be dirt cheap.
    • Even with a prototype product, that won't be perfect on the first iteration, the relative value is a 10 out of 10, because there is almost nothing in the market to compare it against.
    • I don't plan to include retailers in the distribution of this product, because I think it has so much PULL, that customers will flock to me, and I won't need to sacrifice the margin to achieve growth.
    • I should be able to pre-sale my product before it's even available. Customers will want to buy early because of scarcity. (At least I think so... I'll let you know in a couple of months).
    • You can't shut me up when I'm talking about this product, because there is literally so much value to communicate. My voice was hoarse for 2 days after a local industry event a few weeks ago.


    Share your experiences selling PULL vs. PUSH products. How have you established your own Productocracy?

     
    Last edited: May 19, 2017
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  2. MJ DeMarco
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    MJ DeMarco Raving Lunatic Staff Member Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR Summit Attendee

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    Admin Post
    Thanks for posting.

    Glad to see that some of the UNSCRIPTED concepts are starting to trickle out into the forum. (Yea ya'll -- the gag order on anything in the book has been removed!)
     
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  3. CareCPA
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    CareCPA Silver Contributor FASTLANE INSIDER Speedway Pass

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    I don't have my own product, but I will speak to the effectiveness of this with @amp0193 's product.

    I have a friend who owns the exact product he sells. I asked them where they got it, and they said Amazon. I asked if they knew who sold it, and they had no idea.
    I showed my wife the product he's bringing to market, and the first words out of her mouth were "that's so cool! I wish we could use that where we live!"

    In my opinion, I don't think you can compete just on price. It gets brought up in every thread on ecommerce that someone is going to undercut you and be willing to take a smaller profit margin. The product @amp0193 is bringing to market fills a need, and is unique - he's not just selling the same trinket for $0.05 less than the next person.
    The value is in innovation, service, and differentiation, and I just don't believe price should be considered a differentiation when everyone is purchasing from the same handful of overseas manufacturers.

    I will be following this thread with interest - I hope some people chime in with examples in the service industries, as well as physical goods.
     
  4. MJ DeMarco
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    MJ DeMarco Raving Lunatic Staff Member Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR Summit Attendee

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    Relative value exposed thru the value array...

    Gonna enjoy talking about new book stuffs!
     
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  5. amp0193
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    amp0193 Legendary Contributor Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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    O Rly?

    In the last 6 months this product has not existed on Amazon in any form, and I've gone deep into the search results. Maybe at one time it did, but it may have been a one-off offering, or from a no name competitor that didn't last. There are very high entry barriers with this product.

    I'm excited to achieve the #1 organic search rank on Amazon by doing absolutely nothing, for a change. Currently Page 1 is a bunch of irrelevant results.
     
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  6. CareCPA
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    CareCPA Silver Contributor FASTLANE INSIDER Speedway Pass

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    I think you misunderstood me. They have the product you currently sell (the business you're looking to sell), not the one you're bringing to market now.
    I was attempting to speak to how quickly you get lost in the shuffle if you're just re-badging an item that anyone can sell easily. Apparently I didn't do it very eloquently...
     
  7. amp0193
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    amp0193 Legendary Contributor Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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    No that makes complete sense, sorry for misunderstanding you.

    My old business was a commodity. As @CareCPA said, the customer didn't even know the brand of the product they chose to buy.

    My new products don't even exist yet in the marketplace.
     
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  8. MidwestLandlord
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    MidwestLandlord Legendary Contributor Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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    I really hope people take this part of your comment, and Unscripted, seriously.

    It will save SO MUCH frustration and lost time/money if people actually understand this.

    I'll give a B&M example of how selling a commodity goes in my business:

    April 2017 Gross Sales: $2,106,925

    Net Income: ($53,546)

    Don't sell the same product as everyone else!

    There is always someone with deeper pockets that is more than willing to sell under cost to gain market share, and there is NO customer loyalty.

    (I'm just lucky interest rates are low. My competitors are much more willing to sell under cost when rates are high and they can live off the float between revenue generation and paying their wholesaler.)
     
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  9. BradD
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    BradD Bronze Contributor I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass

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    +1 on selling commodities- selling books, you're almost completely dependent on price- literally no points of differentiation on the product itself (and not just any commodity, one that depreciates faster than your fancy new car). On Amazon, it's a race to the bottom on another level- you run pricing scripts against the market all day that will discount .01, $1, $2 on the lowest price.

    The most recent innovation in textbooks has been rentals, which have taken off, but few companies have been able to figure out the pricing/profitability (many VC backed companies have crashed/burned).

    Good times!
     
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  10. amp0193
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    amp0193 Legendary Contributor Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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    The trap is: selling a commodity appears to save SO MUCH time and frustration up front.

    It's fun and easy to bring the product to market!


    After which point, the frustration begins... and you realize you just wasted your money, and more importantly, your time.


    If it's easy, it's not worth doing. Sucks, but that's the truth.
     
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  11. ZF Lee
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    ZF Lee Gold Contributor Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass

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    I do some copywriting, and I'm going to say that it's actually EASIER to market a product that is vastly unique and different to the market!
    If I were doing copy for a commodity, it would be damn hard to not use the same old words and sweeten shit without telling lies. Worst task ever.

    People always say that viral marketing is a hack and is dead, pretty much like luck. However, a good USP is more likely to encourage a positive feedback mechanism of happy customers, astounded expectations and good reviews. I mean, just look at the UNSCRIPTED Amazon page. Just a few weeks and there are 12 positive reviews! With no ads or marketing costs! Lmao!

    It's easier to ask for people to spread the word when you have helped them. It's all about reciprocating.
     
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  12. Scot
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    Scot Ductus Exemplo Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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    I left the bullet points in I can definitely identify with. My product is pre-sales, but from the validation I've done, I'm right there with you.

    Having a niche and knowing that it's wide open is a liberating feeling. You know you can do almost anything without any real expectation and still win. Why? Because people are begging for an answer. They're begging for something better.

    The best part of the wide open niche, no one is hitting AdWords with it, so I know I won't have to fight over CPC. And in my niche, if someone likes your product, or if it's even half decent, it's shared in a heart beat.

    Being in a Productocracy is an exciting feeling.
     
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  13. amp0193
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    amp0193 Legendary Contributor Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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    It's also scary, in the pre-sale phase.

    It's like jumping off a cliff, and you're not sure whether or not there's rocks beneath the surface of the water.
     
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  14. Scot
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    Scot Ductus Exemplo Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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    You've done the math, you've built the wings, you're sure it will fly...

    But you won't know for sure until you take that first jump.
     
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  15. amp0193
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    amp0193 Legendary Contributor Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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    Yeah, that's a better way to put it.

    Or maybe even, "you've built an incredible plane, but you aren't sure you know how to fly it."

    I think the only thing that could mess this up is poor execution.
     
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  16. Scot
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    This is 100% how I feel.

    Let's hope it's not a sense of invincibility.
     
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