Ryan Deiss - Funnel blueprint

[csalvato]

I have been reading a lot by Ryan Diess for the past couple of months, but haven't purchased his training.

I feel like I "get it" from his free material for a while, but also feel like a lot of the tactics apply a lot better to shady products with free trials.

It exploits commitment and consistency, which is great. But people who generally drive the profits for things like the Survival Knife don't understand the LEVEL of commitment they are facing by just clicking an "add to cart" button.

The truth of the matter, though, is that there are only about 5-6 ways to scale a business to infinity. This article sums up 4 of them nicely. I quote from there:

1. Paid acquisition. If your users give you money, then you can buy users directly through ads. Usually companies try to maintain a 3:1 CLV:CAC ratio to keep their margins reasonable after other costs. (eBay, Match, Fab, etc.)
2. Virality. If your users love your product, then you can get major “word of mouth” virality driven by a high Net Promoter Score. If you can get your product to spread as a result of users engaging with the product, you can further optimize the viral loops using A/B tests to generate even more virality. People often measure “viral factor” to see how effectively existing users attract new users, and of course, you want your viral factor to exceed 1.0. (Facebook, Instagram, Twitter)
3. SEO. If your product creates a ton of unique content, in the form of Q&A, articles, long-form reviews, etc., you might end up with millions of unique pages that can in turn attract hundreds of millions of new users who are searching for content via search engines. (Yelp, Rap Genius, Stack Overflow, etc.)
4. Sales. For startups targeting SMBs or the enterprise, you’ll end up fielding a large sales org to handle both inbound and outbound. This is especially true for companies targeting local SMBs, where telesales becomes the only option. Of course, to make this work, you’ll need to generate a multiple in revenue of what you pay them.
5. Other. There’s the odd partnership, like Yahoo/Google, that can help make or break a startup – but these are rare and situational. But sometimes it happens!

Realistically, paid acquisition on a high-population ad network (Facebook, GDN, direct buys, TV ads, etc.) is probably the most reliable means of all of these channels that applies to just about any vertical.

So when you go that route, it's good to have an understanding of how funnels work overall...but you need to have the bank roll to fund all your mistakes. And, chances are, you can hit profitability and sustainable growth before you try to blast open such a high-risk-high-reward channel.

F*&K, maybe I was just completely off topic here. But I felt like it needed to be said.

 

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[csalvato]

Fact is, nobody likes marketers... we're liked as well as salesmen... but maybe not as bad as lawyers.

Amen to that. I have been a salesman and marketer for about 8 years now in one way or another. I was educated as an engineer, and was upset when I realized I had become a marketer/salesperson

Everyone hates us until they realize we are the sole reason for their bad businesses being successful. From @MJ DeMarco in Millionaire Fastlane :

"Have you ever bought a product from television, and when you used it, it sucked and didn't perform as advertised? Then, in dissatisfaction, you tried to return it and got the runaround from a guy who sounded like he had a double-digit IQ? That is the power of marketing: bad people, bad service, and bad product, but AWESOME MARKETING. If you have an OK product (a weak knight), poor customer service (drunk bishops),
and incompetent people (a castle full of idiots), you can survive with a powerful queen.

The queen is the most powerful piece in chess and it is also in business. Marketing can convince people to buy mediocre products. Marketing can hide or disguise service flaws. Marketing can shadow incompetence, and marketing can keep convicted felons disparate from their product. The power of marketing is that a powerful ad campaign can move products, regardless of the cockroaches hiding underneath. Marketing is a game of perceptions, and whatever the perception is, that's the reality."
​

Funny how in a world where marketing is so important (and has been so important for millenia) startup founders are still willing to spend 4-5x more on engineers and designers than they are on their marketing.

I interviewed with 3 startups in the past month, and all three had 3-5 engineers/designers before hiring their marketing guy...then they want to hire the guy who will MAKE ALL CRUCIAL BUSINESS DECISIONS for less than half they pay their development teams.

Then people wonder why 85%+ of startups that receive seed funding fail. All that money, and no idea how to use it to get sales.

 

[randomnumber314]

What makes a "re-bill" unethical, and what makes it ethical?

Honestly, each individual's perception. I ran a software company that operated on subscription. Every day we would get angry emails about the second month's payment. Those people surely felt we were being unethical, even when our conversion page had three boxes clearly stating $xx/month subscription.

I think the re-bill is ethical as long as you make an honest effort to notify the customer that there is a recurring charge, and you make an honest effort to refund/cancel subscriptions when the customer somehow misses that fact. Caveat venditor and all that.

 

[limitup]

If that's the case, Survival life is okay because they tell you what you're getting and when you're getting it.

Steve - are you really suggesting that you think Ryan's funnel as described by AllenCrawley in post #40 of this thread is "ethical?" (It's actually worse than AllenCrawley described, but he revealed enough for now).

 

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[Vigilante]

I realized in reviewing this another difference in language and thought process.

Some direct marketers calculate the lifetime value of a customer as in how much cash they can extract from a customer over a lifetime.

Lifetime value to me is equal to how much value my business can provide to the customer over a lifetime.

 

[csalvato]

Lifetime value to me is equal to how much value my business can provide to the customer over a lifetime.

+1

Couldn't agree more. Easier said than done sometimes, too.

 

[Burt A]

How to win in the survival niche:

1) Create one of these three ads for PPC
--Obama is evil
--The economy will collapse and thus riots will ensue
--You think you're prepared but your not

2) Give away some kind of neat Chinese-made tool
--Knife that looks like credit card
--Paracord with 'Murican colors
--Firestarter

*Don't forget to charge shipping and handling
**Don't forget to advertise on all war-related holidays
***Don't forget to say you support the troops

3) Run customer through no less than 5 upsells

4) Get Asian outsourcer to write advertorials for "news" site to build community and longtail traffic

5) Send traffic to advertorials between pitches, tag those who click through

*Don't forget adsense, links to affiliate offers and own products

6) Send click throughs from 5 to follow up sequences

7) Release new report every six months about the REAL pending economic collapse and send to buyers for new product/course launch that coincide with it

8) Repeat #5 and #6 and #7 for buyers, and start 1 again for new traffic and retargeting


Jokes aside and all due respect, of the three businesses in the survival niche I've written ads for, they CRUSH it because they can drill the fear into the souls of their customers and their customers love it. I think some of the most skilled marketers are in this niche--they can squeeze every penny out of their customers.

 

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[Kung Fu Steve]

Steve - are you really suggesting that you think Ryan's funnel as described by AllenCrawley in post #40 of this thread is "ethical?" (It's actually worse than AllenCrawley described, but he revealed enough for now).

I'm extremely familiar with that funnel. I've dissected it with his staff and him multiple times.

So my answer is yes. If you give me a chance I'd like to share why I perceive it that way and see if you agree or disagree and then maybe you can give me something specific as to why you think it's unethical?

If I were to point out any one thing that would be somewhat "unethical" about it is the headline after the initial front end sale which says "STOP! Your order is not yet complete!"

It somewhat forces people to sit through the presentation until they click "add to my order" or "no thank you"

But when you purchase anything from a business do they not ask you if you'd like something else? If you were face to face this wouldn't be an odd thing -- why is it different online? Because not many people have seen it before? Maybe in an online model but Amazon says "you might also like this and this, would you like to add that to your order?" why is that ethical and this is not?

If you were truly interested in survival stuff wouldn't you be glad they offered all of this cool stuff? Is it unethical to you because you're not interested in survival stuff? Hell, I'm not. I wouldn't ever be a customer. My idea of roughing it is the old Days Inn in Scottsdale where @LightHouse and I took too many of the complimentary bagels from the breakfast table.

Once again just because I disagree doesn't mean I want to attack you or anybody else (I think it sometimes comes off that way through forums) but tell me what you're thinking here:

1.) Why is it unethical?
2.) What specific parts of it are unethical -- or is ALL of it unethical?
3.) Would you ever be a customer?
4.) Have you dealt with their customer service ever and have a personal experience of how it was hard/impossible to cancel?
5.) Have you seen or consumed any of the products?

There have been several people in this thread that have said "all of this is UNETHICAL!" well it's such a blanket term. Educate me here, what's unethical and why do you feel that way?

 

[Kung Fu Steve]

I realized in reviewing this another difference in language and thought process.

Some direct marketers calculate the lifetime value of a customer as in how much cash they can extract from a customer over a lifetime.

Lifetime value to me is equal to how much value my business can provide to the customer over a lifetime.

I totally agree. Maybe we're not so far apart here? It's not about GETTING, it's only about getting what it's worth. And I whole-heartedly believe in providing way more value than what a product costs no matter the industry.

 

[bensonj]

Lifetime value to me is equal to how much value my business can provide to the customer over a lifetime.

THIS right here…

Rep $$ Transferred

 

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[Harley]

Great discussion and hopefully teaches others to fully explore anything before handing over hard cash.
Just to clarify again, the purpose of starting this thread wasn't in support of Ryan Deiss, or his program. It was merely from an educational standpoint for some who may be curious as to what an on-line funnel was. Either for, or against this program, we can't deny that the process is well explained. Hopefully most on this board would have the common sense to dig deep and decide if this company and its practices are indeed ethical before deciding on any commitment. He even states that some of these tactics are extreme and you may not want to employ some methods used in the examples. Doesn't mean an ethical business couldn't use a platform similar to this to get results in an honest way and many do.
As others have stated, there is nothing revolutionary here and this funnel, or variations of it are used in just about any business.
In the corporate sales world, they are often as complex as this and I have used many over the years with great (ethical) end results.

Enjoying reading others thoughts on this subject - Not the attacks so much though

 

[Vigilante]

I took the link from the OP. I listened to the first 10 minutes (setting the stage) and the last 5 minutes (the hard close).

Trying to put a pencil to the model.

Just one long infomercial for his fully optimized five step sales funnel program. "This investment should pay for itself in no time."

FunnelBluePrint.com/join

$958 for the course, and then you still have to build the funnel and source the products.

If your web site costs you $5k to build, and your product net margins are 25%, you need to sell

$25,000 worth of merchandise to hit your break-even point, not including the front loaded costs of any paid advertising.

($25,000 X 25% net margin = $6250 gross profit. Web site costs you $5k, so you're down to $1250. Course costs you a grand so your net is $250 available for paid advertising. Plus, you have to have the cash to buy the merchandise that you are selling.)

Not sure how long it will take the average venture to produce their first $25k in sales, but that is what you should be looking at to hit the break even point, assuming you don't buy any additional courses, materials, or tools along the way.

@Kung Fu Steve help me with the math here. How much do you need to spend on the front side to reach a break even?

I think you need to

• buy the course
• buy the build out of the web site
• buy the product and
• buy the traffic

Spending a grand on the course makes no sense unless you can pay to have the web site built, source the products, and buy the traffic.

Is that accurate? Wild a$$ guess says you need somewhere between $25k - $50k to play. I might be wrong.

Hopefully your margins can be much stronger on the initial sell of what the customer puts in the basket.

 

[Kung Fu Steve]

Not sure how long it will take the average venture to produce their first $25k in sales, but that is what you should be looking at to hit the break even point, assuming you don't buy any additional courses, materials, or tools along the way.

@Kung Fu Steve help me with the math here. How much do you need to spend on the front side to reach a break even?

I think you need to

• buy the course
• buy the build out of the web site
• buy the product and
• buy the traffic

I'm not sure what you're asking here. Every business is different of course but I *think* what you're asking is whether or not a completely new person could buy this program and build a business out of it, yes?

If that's the question than no, absolutely not. So many people think they can build a business out of nothing these days and it just isn't true.

I believe this is a marketing blueprint being sold... not a made-for-you business or MLM or anything else. I would personally think that you would first need a business to need a marketing plan... but maybe you're upset that complete beginners have purchased this plan in the hopes that it will make them rich? If that's the case isn't that the fault of the customer not the malicious marketer?

Spending a grand on the course makes no sense unless you can pay to have the web site built, source the products, and buy the traffic.

Absolutely right. Why do you need a marketing plan for a non-existent business? Sure business really is only innovation and marketing but you can't really have one without the other -- am I right?

Is that accurate? Wild a$$ guess says you need somewhere between $25k - $50k to play.

Accurate for what? Once again I think you're asking an odd question. Does it always take 25k-50k to create a business? I don't think so. Maybe I'm old-fashioned.

But other than that I'm the wrong person to ask... I've spent hundreds of thousands of dollars on courses and seminars and coaching and books that have been out of print for a 100 years and all sorts of stuff.

Hopefully your margins can be much stronger on the initial sell of what the customer puts in the basket.

In my consulting practice I've noticed businesses really only have 3 problems: low sales, low margins, or low cashflow.

Regardless of the "funnel" these problems need to be addressed to make the business grow. I'll use every tool at my disposal to do so (and by that I mean ideas from Ryan, ideas from Jay Abraham, Chet Holmes, Dan Kennedy, Frank Kern, David Ogilvy, Robert Collier, Gary Halbert, and all the other people I've spent so much money learning from and applying)

 

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[Vigilante]

I'm not upset about anything. Just studying this, and helping break it down into bite sized morsels.

I am pointing out what might be the obvious to some (including you) but that this is a system intended to take a business that exists, and deploy a new marketing strategy for it to optimize customers and conversions of paid traffic in a different way.

This isn't a business in and of itself (and I am not suggesting it is being marketed as such.)

I am just pointing out that what this ISN'T is a way for someone to start a business and create a funnel to sell stuff (although, I suppose they could technically if properly funded.)

This is a marketing strategy that can be purchased and implemented. As such, buying this course would be relevant to those with an existing business, some cash flow available to deploy the strategy, and meet the other cash related requirements.

This has been my first deep dive into this, so I am just sharing my kindergarten level observations for others like me that have casually watched this.

This type of funnel isn't akin to sourcing a product, sticking it on eBay, and seeing what happens. This is a high level deployment of a marketing sales platform for businesses with products, development cash, and paid traffic generation knowledge and cash.

This is marketing 2.0 - not a game for beginners.

I know people that are at the very front end of bootstrapped businesses. They might have invested $2k into products for test market resale on Amazon, eBay, and perhaps their own off the shelf web site. They're not candidates (today) to build a sales funnel. The cost of entry is much more significant.

 

[Kung Fu Steve]

I'm not upset about anything. Just studying this, and helping break it down into bite sized morsels.

I like to make things as simple as possible and if I were to wrap up this whole "program" into one idea it's this:

How to increase the lifetime value of a customer.

I guess when I read that I could see how people might think that's the same as "sucking out as much as possible"

But I'm not quite sure I think it's the same. It's not like they are nickel and diming their customers. They are just offering more products.

I used this example in one of my silly little marketing reports the other day

It was on upsells and add-on sales. How the difference between appreciation for the offer and pissing someone off is:

1.) the relevancy -- something related to what they just bought (if not related, they get pissed off)
2.) if it is required -- when I was working for the shack years and years ago Hewlett-Packard came out with this low-tier printer that was priced ridiculously low. Great deal right? Except it didn't come with the power cord or the cord to attach it to the computer... so we had some very angry returns... and when we all finally knew it didn't have the cords in it we had to tell them "hey this will only work if you buy this thing, too"
... annnnnd now everyone is angry.

 

[Kung Fu Steve]

I'm not upset about anything. Just studying this, and helping break it down into bite sized morsels.

I am pointing out what might be the obvious to some (including you) but that this is a system intended to take a business that exists, and deploy a new marketing strategy for it to optimize customers and conversions of paid traffic in a different way.

This isn't a business in and of itself (and I am not suggesting it is being marketed as such.)

I am just pointing out that what this ISN'T is a way for someone to start a business and create a funnel to sell stuff (although, I suppose they could technically if properly funded.)

This is a marketing strategy that can be purchased and implemented. As such, buying this course would be relevant to those with an existing business, some cash flow available to deploy the strategy, and meet the other cash related requirements.

This has been my first deep dive into this, so I am just sharing my kindergarten level observations for others like me that have casually watched this.

This type of funnel isn't akin to sourcing a product, sticking it on eBay, and seeing what happens. This is a high level deployment of a marketing sales platform for businesses with products, development cash, and paid traffic generation knowledge and cash.

This is marketing 2.0 - not a game for beginners.

I know people that are at the very front end of bootstrapped businesses. They might have invested $2k into products for test market resale on Amazon, eBay, and perhaps their own off the shelf web site. They're not candidates (today) to build a sales funnel. The cost of entry is much more significant.

Brilliantly said

 

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[AndrewNC]

Obviously I didn't mean any of it as an attack on your business and I don't expect you to share your details.

I am slightly biased because I've been working with those guys for approximately the past two years. I'm not going to reveal their business model on the forum but we can chat in private if you'd like

My thought is that maybe you're trying to fit every business into "Ryan's" thing (and maybe that was the whole point of this discussion), but it's obviously gimmickized (... new word!) for the mass market.

But up-sells, down-sells, cross-sells, loss-leaders, monthly programs, inquiries, etc, etc. the stuff that make up a "funnel" is nothing new and IS used in every consumer brand.

Once again -- maybe we're discussing if a consumer brand has used every step in the "ryan deiss funnel program" -- so I could be way off here.

Anyways; I have some serious questions:

And these popped up in my head as I read this because I don't quite have an answer.

You mentioned capturing credit card billing -- what makes it ethical and what makes it not?

I asked this question in the shower after I read this (yes I was thinking about you in the shower) and I'm going back and forth. You think Survival Life's monthly rebill is unethical -- so I said "okay, let me assume that's true than what other companies do I know that do rebills like this?"

There are a few people on this forum that do rebills like this that in the public eye are seen as MORE unethical.

Than I thought "okay, if THIS one is unethical, which ones WOULD be ehtical?"

But besides Acai berries and other Dr. Oz crap the only other one I could think of was Proactiv ... are they unethical?

Then I looked at all my monthly bills, auto responders, hosting, etc etc.

Then I thought "is it only unethical if I'm not okay with signing up for it?

Then I thought that's silly because I wouldn't sign up for it if I wasn't okay with it.

Okay, so there are some that don't TELL you you're signed up for it -- could this be key?

If that's the case, Survival life is okay because they tell you what you're getting and when you're getting it.

But what about other factors? Easy to cancel?

I guess I'm okay with my hosting and autoresponder because it's quick and easy to cancel if I want...

I'm honestly looking for some feedback here because this subject seems to bring up some very passionate opinions.
Tell me your thoughts?

What makes a "re-bill" unethical, and what makes it ethical?

I'll start this with saying that I haven't been trough their funnel myself...so correct me if I'm wrong with what I heard.

It sounds to me that there is an "add to cart" button during the upsell videos or "add to my order".... Which, most commonly trough online businesses means they can review the items in their cart before finalizing their order. From what I heard, there is no finalize option and processes the payment right away.

 

[MikeC]

Awesome discussion.

Just throwing this out there..

Selling information products on how to make money online is basically the same thing as creating a product in a different niche. IMO though, it's easier to do, once you have a lot of success already making money.

I don't see it as being shady that someone would make $$,$$$,$$$ in one market, then switch to teaching people how to make money. I don't think that just because someone teaches others how to make money for money, it disqualifies their other business success (although I do agree with skepticism).

This trend is pretty common, make a bunch of money in something, sell a product teaching others how to do it. MJ did it, and that's why we're all here.

For better or worse, the "make money online" niche is full of people ready to spend money, and if you've made a lot of money, you already have their attention. Might just be a path of least resistance thing to sell to that market, instead of creating a new product in a brand new niche.

Plus, unlike creating a new product in a different niche, it also offers the opportunity to "give back".

 

[csalvato]

So many people think they can build a business out of nothing these days and it just isn't true.

F*ck. You just stomped on my dream, bro.

 

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[Andy Black]

Great thread. I learned a lot. Thanks.

Also very civil.

Here's my personal 2 min view of a funnel:

 

[JasonR]

I'll start this with saying that I haven't been trough their funnel myself...so correct me if I'm wrong with what I heard.
It sounds to me that there is an "add to cart" button during the upsell videos or "add to my order".... Which, most commonly trough online businesses means they can review the items in their cart before finalizing their order. From what I heard, there is no finalize option and processes the payment right away.

You guys be the judge. When I went through their funnel I recorded everything.

Mods - if this isn't ok, feel free to remove the links - but it's all free info if you spend some time going through it.

I spent $180 and about an hour of my time going through this. Give me a rep if it helps you.

Landing Page
https://www.dropbox.com/s/spi0fhssjx9z8je/Knife Funnel Start.jpg

Funnel after you enter your CC Info:
https://www.dropbox.com/s/n1s1r970obp9iuu/2014-01-22_2237.swf
https://www.dropbox.com/s/0ajksxoj2v89s89/2014-01-22_2243.swf
https://www.dropbox.com/s/b4cbuinfszm7530/2014-01-22_2248.swf
https://www.dropbox.com/s/t399jng0ne92439/2014-01-22_2254.swf
https://www.dropbox.com/s/mwbhamutmmw0bfk/2014-01-22_2259.swf
https://www.dropbox.com/s/id2kjfj1kburca1/2014-01-22_2302.swf

Very Simple Diagram of it (You can see its out there for public consumption)
Keep in mind, they have a system of downsells as well, so it can get quite complex.

For example, if you say no to LL, they have a free trial of it (or at least used to)
http://www.gliffy.com/publish/5928276/

 

[MJ DeMarco]

Why is it unethical?

Steve,

Being as old as I am, and having been running this forum for 7+ years. nothing shocks me any longer, especially when money is apart of deliberation. IMO, if you want to expose someone's character, all you need to do is add in a little money into the mix. What are they willing to sell? Overlook? Keep sacred? Words don't reflect character, actions do. So character is not something to be discussed, but something to be judged based upon actions, or inactions. Introduce money into a relationship and make it apart of a deliberative process, and sit back and watch. You'll see someone's true character come into the limelight.

It appears you want to redirect the discussion into a conversation of sales funnels which is IMO, is a distortion. This isn't about sales funnels. This isn't about acquiring leads and maximizing customer value. This is about explicit use of DECEPTION and CONFUSION as a marketing strategy.

I call it "magicians marketing".

You know how magicians fools us?

They use our cognitive psychology and cognitive inferences against us. Yup, they use our own minds AGAINST us to fool us, craft illusion, and deceive. You may have heard the term "slight of hand".

And now we have it as a marketing strategy. One in which, you are clearly advocating.

You see, in the marketer's world, it's common knowledge that people do not READ on the web, they scan. When they see BLOCKS OF TEXT, they ignore it. They skip it.

In the marketer's world it's also known that users DO NOT READ Terms of Services, or User Agreements.

Well it didn't take long for a scammy marketer to figure out that that's a great place to hide whatever you want. Perhaps a continuity clause? Or maybe an upsell after an expiring trial? Or perhaps a sub-clause that disclaims you agree to sell your first born daughter to human traffickers?

In the marketer's world it's also known that people will click on "ADD TO CART" knowing that they can review the order before accepting and moving forward. It's a CART right? CART implies a CART must be wheeled into a checkout. Well guess what? There is no law that says YOU need to provide an order preview page, or a checkout, so why do it? We can just take advantage of our customer's cognitive inferences and cognitive assumptions to drain more cash from their pocket.

It's also common knowledge that most people don't even know how to charge back their credit card. Many just chalk up these "oversights" to making a mistake, and even, feeling foolish. Damn, I was tricked! Then they move on with life. Meanwhile, the scammy marketer makes money. Oh he's doing $2M a month! As I said above, I don't give a f*ck what they're doing monthly if they're magicians. Magicians don't impress me. Great products selling wildly, minus the magic, impresses me.

You see these are cheap magician tricks. I expect to find them in Las Vegas, not online when I'm trying to buy something that will make my life easier.

By all means, lets discuss customer optimization, lifetime customer value, and sales funnels. These strategies as posted by @Vagabond 007 are great marketing angles.

1. Lead Magnet - Something offered in exchange for a person's contact info (nothing new)
2. Tripwire Sale - Something offered at a very low cost (usually $7, but it can be anything you want). The MAIN point of the TW is to get a someone from being a prospect to a buyer. The relationship changes when someone spends money, even if it's just a few bucks
3. Core Offer - This is the main thing you want to sell. Not low priced, but not high priced either.
4. Profit Maximizers - Basically, these are the up sells and cross sells. These are where you can make a lot of extra money. This is because you already spent money to get the first sale, so any additional money here REALLY helps.
5. Return Path - This is where autoresponders come in. Of course you can stay in touch other ways as well. The point here is to form a relationship with your customers so they keep buying from you. This sales is always easier and more profitable than the first sale.

But please do me and the forum a favor, leave the magic wands at home.

We won't be advocating them here, or will we be advocating those who sell them.

 

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[Wuz]

F*ck. You just stomped on my dream, bro.

you may not be able to build a business from nothing , but you can perfectly gain some side money online that can fund a business/brand.

Go read some AMA´s from this forum.

 

[Vigilante]

 

[splok]

Seems like there's a lot of arguing in different directions here. Almost all marketing is using slight-of-hand to some degree, and sometimes the line can be a bit fuzzy. However, it the crux of this one doesn't seem fuzzy at all...

Educate me here, what's unethical and why do you feel that way?

Well, how about this:

What you don't realize is (and Jason's mentioned this before) is that the credit card knife that you filled out the credit card form for actually billed you and now every time you click 'add to cart' your card is charged again. All the while you're expecting a final checkout page to review your cart's contents before you click 'pay now'.

If the process causes people to buy without realizing they're buying, then it's pretty hard to argue that the process is ethical, isn't it? It's sales by deception. Surely some people are stupid and will buy unintentionally on even the most obvious process, but how many stupid people do you get to take advantage of before it becomes your problem and not theirs?

I am questioning as to whether or not any top tier consumer products brands have deployed tactics similar to those strategies used by the Survival Life funnel. In doing a little bit of side research on that since posting the question, the answer is seemingly no. Companies like Nike, Coca-Cola, and Zappos aren't bringing you in to the top of an online funnel, capturing your credit card, and then adding dozens of affiliated hooks into you hoping that you don't generate chargebacks.

How about Zynga? (and probably lots of other social/mobile companies)

Through 2009, Zynga made money from lead generation advertising schemes, whereby game participants would earn game points by signing up for featured credit cards or video-rental services. These were criticized as being less cost-effective than simply buying game points, and in some cases, being outright scams that would download unwanted software or unwittingly sign up for a recurring subscription.[89] One ad signed up players for subscriptions to expensive and unwanted text-messaging services.[90]

On October 31, 2009, Michael Arrington of TechCrunch said that Zynga intentionally worked with scam advertisers, and that lead generation made up a third of Zynga's revenue.[110] Arrington also alleged that Facebook was complicit in this.[111] On November 2, 2009, former CEO Mark Pincus announced a reform in its offers: Tatto Media, a major offer provider that enrolled users into recurring cell phone subscriptions, would be banned, all mobile offers would be removed, and offer providers would be required to pre-screen offers.[112]

Arrington continued to question Pincus' role in the scams, republishing a video of a speech by Pincus.[113] In the speech, Pincus said:

So I funded [Zynga] myself but I did every horrible thing in the book to, just to get revenues right away. I mean we gave our users poker chips if they downloaded this Zwinky toolbar which was like, I don't know, I downloaded it once and couldn’t get rid of it. *laughs* We did anything possible just to just get revenues so that we could grow and be a real business.

—Mark Pincus, Speech from Startup@Berkeley

or Dell? (source: I worked there, and ya, it was F*cking shady)

Maybe not using exactly the same tactics that you mention, but close enough conceptually. Companies can do some pretty foul things to carve out market share. Once they're big enough, sure, they should probably start behaving themselves, but do you really think Coke has never done anything unethical in it's 100+ year history? (not even considering that they're marketing an unhealthy, addictive product to children!)

 

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[Milkanic]

Interesting thread. This is basically the entire supplement/diet pill industry.

Life time customer value = months of recurring billing until the spouse checks the credit card bill and cancels.

 

[RogueInnovation]

Unethical:
I feel MJ nailed it

But my add is that ethics are distorted when you assume the customers end goal is to pay you as much money as possible, involve as many friends as possible, and talk about you as hyper as possible without considering what they actually want.

Its called brushing over the facts.

You can see it here as Vig illustrates facts of the models, looks at it and remains stoic.
He is waiting for a value proposition, but is hit with air and flailing arms.

The problem is that this is puppeted as credibility.
And figures are thrown around after the fact to refute experts' criticisms.

It attempts to usurp critical components to authority.


When we usurp the principles of credible business we are on the slope towards unethical action, and even with naive intent will start "making mistakes".
Like "oh I misworded that, and now its percieved as fraud".

The fact is, you don't have to be naive to unethical stuff sprouting in your business model, just remove the smoke and mirrors.


If you are using unsafe practice, that uses smoke and mirrors to create credibility, you are not technically fraudulent, but do customers care about technicality or do they care about whether they feel they are getting screwed or not?

If you are firefighting and dousing flames with more hype, more smoke and mirrors, all you are doing is being territorial and cordoning of the smart from the foolish to herd the foolish against their later gained good judgement into a circle of purchases thats primary purpose is not to provide results but POPULARITY. As if popularity improves the product results (no).


If you are not focused on the results for your customers, then amidst all this popularity, who is enhancing their results? While you are distracted hyping their is only stagnation in your model and an enhancing confirmation bias forming about the effectiveness of what you are doing.
- See how many showed up! We are boss!
- Wow we got 30m! How booooss!
- Omg a few flame wars, pssht these silly people

You can't recall success based off of honest indicators cuz you don't have them
- We gave x business the model, and this was how it worked for him and the benefits
- We changed y because we found that z businesses function better with it
- We have 30 000 successful launches (not hype, not out of context)

You are ignoring the utility... Of honesty. And all because the pressure of delivery on promises is percieved as "their problem"

THEIR PROBLEM models are not ethical, they are also a slippery slope that leads to mistakes that will break into fraud if your business goes under stress.
If you build a business that way its eventually going to snap.


I've spent years focusing on results for clients, so it is clear to me, when others don't.
We can all laugh and joke and blow it off, but thats stupid.
Business isn't a joke, and neither is properly implementing this stuff to get results.
You'd know that if you spent time building results not just fapping over money in ideas.


And btw, these are just IDEAS, they are not confirmed to be used by the best companies in the same spirit.
You insisting they are is bs because you DON'T KNOW and don't spend time consulting with them or studying them.
You are playing pin the tail on the donkey and then selling the crossword solution you came up with for an inordinant amount of cash that isnt at all justified as a business consultancy cost for a startup.

What does that make you then?
You are unaware of the end results of your business, giving people debt, they won't pay off after applying the product.

You have no evidence to suggest the client will even break even on the cost.
You place all the blame on them and say "if you were a marketting genius then it would work".
It isn't about this ego sidestep bs, its about you not even getting people to a minimum value, with the excuse of arguing about the intangible (being "wildly" successful)


So YES its not ethical, legitimised or lacking exploitation of its users.
Because you are the exception to the rule.
Not a provider of genuine support.

I see no reason why anyone should support the model until it shapes up and has a use outside of excessively overpriced infotainment

 

[Kung Fu Steve]

It appears you want to redirect the discussion into a conversation of sales funnels which is IMO, is a distortion. This isn't about sales funnels. This isn't about acquiring leads and maximizing customer value. This is about explicit use of DECEPTION and CONFUSION as a marketing strategy.

*I* was talking about acquiring leads and maximizing customer value. Trying to pull out the core of what this whole "funnel" craze is all about and my answer was "nothing new"

On the ethics side I simply posed the question: what is unethical, and what makes it unethical?

@AndrewNC mentioned that the add to cart button auto-charges your credit card before reviewing the order -- that wasn't the case before but if that is the case now I would agree that's pretty shady.

And now we have it as a marketing strategy. One in which, you are clearly advocating.

Hey now, I don't think that's fair of you to say.

Of course I'm not advocating "deception" and "confusion". I thought I was adding to our conversation here about this by giving 7 examples of how some of the principals were used -- but in a different vocabulary.

I think you of all people know that my heart is in the right place -- why not make that assumption as we are having this conversation?

By all means, lets discuss customer optimization, lifetime customer value, and sales funnels. These strategies as posted by @Vagabond 007 are great marketing angles.

... I thought that's what we were doing?

No big deal. Just thought I would show things from a different point of view and ask questions to understand the other. What you're not taking into account is that I actually do care about people and would never take advantage of someone.

So let's just call it case closed and try again another day

 

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[MJ DeMarco]

Hey now, I don't think that's fair of you to say.

survival life is OK

That's were I drew my assumption on your advocation. If I'm in error, then my apologies.

 

[Kung Fu Steve]

That's were I drew my assumption on your advocation. If I'm in error, then my apologies.

That one phrase was completely taken out of context... This was the full part of that post:

Anyways; I have some serious questions:

And these popped up in my head as I read this because I don't quite have an answer.

You mentioned capturing credit card billing -- what makes it ethical and what makes it not?

I asked this question in the shower after I read this (yes I was thinking about you in the shower) and I'm going back and forth. You think Survival Life's monthly rebill is unethical -- so I said "okay, let me assume that's true than what other companies do I know that do rebills like this?"

There are a few people on this forum that do rebills like this that in the public eye are seen as MORE unethical.

Than I thought "okay, if THIS one is unethical, which ones WOULD be ehtical?"

But besides Acai berries and other Dr. Oz crap the only other one I could think of was Proactiv ... are they unethical?

Then I looked at all my monthly bills, auto responders, hosting, etc etc.

Then I thought "is it only unethical if I'm not okay with signing up for it?

Then I thought that's silly because I wouldn't sign up for it if I wasn't okay with it.

Okay, so there are some that don't TELL you you're signed up for it -- could this be key?

If that's the case, Survival life is okay because they tell you what you're getting and when you're getting it.

But what about other factors? Easy to cancel?

So yes, it wasn't quite fair to jump to the conclusion that I advocate deceptive and confusing tactics off of one sentence taken out of context -- that's silly! But give me a chance to clarify:

1.) I was asking questions about ethics particularly to the people who were questioning AND myself. I was posing philosophical questions about what makes rebills unethical, why are we okay with our hosting monthly bill and not okay with dr. oz diet pills super weight loss formula acai stuff and I was trying to ASK what was the differentiating points.

2.) Once again, Andrew brought up that inside this funnel currently it's possible your credit card is being billed in a weird way. I don't know if that's true that's why I kept asking "what is unethical about this" and that answered my question. I asked a simple question for clarification.

New information changes opinions. But you can only get new information by asking clarifying questions. Everyone seemed to attack these guys and my simple question was "why?"

I admitted I was a little biased towards these guys because I know them. But on the other hand I was completely open to new information. Tell me why instead of attacking for no reason. "This is what I think, and this is why i think this" Interesting - tell me more!