How We Launch, Part 5: The “Mac and Cheese” launch. (Yes, seriously.)

This is part 5 of a 9-part behind the scenes series on how we ran our biggest launches. You can start at the beginning right here.

Yesterday I promised more weird changes of plan. Here goes.

In the late summer and early fall of 2011, I was getting ready to run a huge launch.

It was about upsells. I had been nerding out for months (and really, years) about the idea of upsells, and how the psychology of the upsell was different than the psychology of an initial purchase. My theory was that after money had changed hands – or even immediately prior to money changing hands, but after the final decision was made – there was a change in the way people thought, making normal marketing rules go quantum.

I had spent a long time interviewing and surveying people, trying to refine my academic and totally inaccessible opinions into something the mass market could reasonably consume. This took a long time, and eventually it became Same People, More Money.

Same People, More Money was going to be a monster of a product – big and intelligent and high level. It was gonna be huge.

Several days into the launch, The Scandal exploded. (If you have no idea what I’m talking about, assume it was a scandal.) Now, I have a pretty high scandal tolerance – it was obviously my childhood dream to become a Very Big Deal on the Internet, so I was prepared – but when Standard Military Issue Scandal became El Creepo Stalkers and Death Threats Scandal, things got a little out of hand.

I didn’t want to run my launch anymore, so I didn’t.

Flash forward a month or so, and most of the insanity is over. (Well, I’m back to getting fewer than 1000 emails a day, anyway, which was nice.)

But now my super fun, nerdy, academic love project feels… tainted. I don’t want to think about it anymore. So I need to do something else.

The Emergency Turnaround Clinic was the something else.

Here’s how it all came to be.

I read a book about turnaround situations in small businesses. Now, “small businesses” here refers to companies in the 75-500 employee range, so we’re not talking about ittybiz-sized operations. And I thought to myself, “Self, if companies that have been around and flourishing long enough to make it to hundreds of employees find themselves needing a turnaround, imagine how much good this could do for an ittybiz.”

(If you’re not familiar with the term, “turnaround” refers to a business that is in the red enough to be about to close down. Basically, turnarounds are for financial emergencies, the very last resort before you close the doors.)

We wanted to have something accessible from a pricing standpoint, and we wanted a scope of material that would apply to the greatest possible segment of our market. Figuring out the content wasn’t too tough – the problems person A has are very similar to the problems person B has, in general – and by this point, the audio and PDF combination we now use for all of our products had become second nature.

(We also decided to incorporate an old idea from our old membership site, the SpeakEasy, which was the daily Get Off Your Ass emails. We didn’t want to call them that because we didn’t want old SpeakEasy members thinking they were repeats. So they became “Quick Action Steps”. Easy tell Dave was involved in that decision.)

The biggest stumbling block we were having in the development phase was the pricing. Obviously it had to be affordable – I never really went in for the classic, “Oh, you’re screwed and on the verge of bankruptcy and you’ve already cleaned out your retirement fund? Then you’re looking at minimum four figures” strategy – but we didn’t want to undervalue the product.

One of the big problems that people run into when they want to give something the widest possible market is when the customer sees the price as commensurate with the value. (Hippies, listen up. I’m talking to you.)

If it’s free, it tends to get downloaded but skimmed. People tend to remain pretty uninvested in the process, and they don’t retain as much information as they do when they pay cash money, even nominal cash money. They’re also much less likely to do the exercises, workbooks, and homework assignments.

If it’s cheap – especially if you have other products that it will sit beside in your store – it looks like less than your other products. If your favorite author had a book for an everyday price of $19.95 and a book for an everyday price of $1.95 with no explanation of the difference, which one looks better?

Or perhaps more accurately, if your local college had a $4,000 accounting course and a $400 accounting course sitting right beside each other, and they were the same length and the same format, what would happen?

Well, either people would assume that the $400 was inferior but the $4000 was out of reach, and buy nothing, or they’d buy the $400 one and then never buy anything else because after $400, everything else feels overpriced.

Either way, the college loses.

So the question was, how do we make it accessible without undervaluing it?

So… what to do?

Go out for drinks, of course!

And there we were, at Wink’s on Richmond Row in London, Ontario, getting the last of the decent weather before we went down south for an onsite. It’s a popular student hangout, and the prices are medium to high, for the market. (Nachos are $18, not $14.)

That’s when we saw it, sitting there in plain sight.

“Pasta avec saucisse (Kraft Dinner with Hot Dogs) – $9, OBO.”

Perfect. If it’s good enough for a student bar, it’s good enough for IttyBiz.

When we’d first thought of Pay What You Can pricing for the Emergency Turnaround Clinic, it didn’t seem like it was going to be a feasible option. Pay What You Can traditionally works as either an across the board strategy offline – like the restaurant in Australia where everything is sold on a set your own price basis, or Pass The Hat at a fringe festival – or it’s for a limited time. Pay What You Can Day or Week or whatever.

(Aside: A lot of information sellers struggle with the idea of limited time Pay What You Can because they feel like it alienates existing customers who already paid full price. This only really tends to happen if the promotion is positioned badly or if your market feels like the product was overpriced to begin with. Your mileage may vary.)

So Pay What You Can is tough under the best of circumstances, and even for limited times. But permanent pay what you can, on only one product? That’s just weird.

And most importantly at launch, where’s the incentive to buy now? (We’ll get to that one in a minute.)

But somehow, for whatever reason, OBO felt different than PWYC. People are used to OBO from garage sales and eBay and Craigslist and classified ads. OBO is about empowering the buyer, not condescending to them. It felt different, somehow workable.

So giving an actual, sticker price, but adding an OBO (Or Best Offer) on the end?

Screw it. Why not?

(For reference, sticker price ended up being $375.)

Yes, but why now?

Another challenge we faced during this promotion was the position of the launch timing itself.

A promotion is generally going to have at least one of two scarcity elements – price or quantity, and they’re both going to be based on a deadline. Either the price is going up at a certain time, or there is a limited quantity available. In this case, the price didn’t even really exist, so it couldn’t go up, and we weren’t limiting the quantity.

We ended up deciding to create the feel of a live class without the live element. For many ittybiz owners with small lists, live classes sell well because the scarcity element is inherent – class starts when class starts, and if you snooze, you lose. This wasn’t a live class, and none of it was done in real time. But the course material was being released on a certain day each week, just like a class, so we ended up creating the feel that it was live, without it being live. We said that the first class was going to be available on Monday, and based the promotion around that.

That’s a risky strategy, because if it’s not positioned right, it’s going to look ridiculous.

Last minute addition!

We also ended up adding a piece of promotional content very late in the process. We had our standard-style launch content planned out as usual, and then we noticed something interesting.

We were getting TONS of emails from people – and notes to seller in our PayPal logs – from people saying, “No, seriously, I really don’t have a lot of money at all. I only have…” and they’d tell me how much money they had. Like, exactly how much money they had.

We got literally hundreds of these messages. People in PayPal were apologizing for how little they could pay, and people in email were saying that they felt they couldn’t buy because they could only pay so little.

Sales had been very strong, but if this many people were getting in touch with the same sentiment, we had a feeling that sales could be a lot stronger if we addressed the low payment issue.

We ended up sending an email out on the Sunday with the subject line, “A message for the dirt, crazy broke.” In it we explained that Pay What You Can is pay what you can – there was no such thing as too little. It was a very emotional message, and one that really came from my heart.

I had so much compassion for the people who had emailed, and so much love for them being so concerned with my bottom line, of all things. So I went all out and told them, no, seriously. Go get the change out of the cupholder in your car and send me the equivalent of that. Got $7.11 in your PayPal account? That’s FINE. That’s why it’s Pay What You Can. It’s called the Emergency Turnaround Clinic, for God’s sake. We’re not here to gouge you.

For the first time in the history of any launch I’ve ever seen – mine or anybody else’s – the highest sales didn’t come on the last day. We sold more on a Sunday in the middle of the launch than we did on the last day. (It was close, but the Sunday still won out.)

(It was also the highest open rate we’ve ever had on an email.)

So, what happened?

Sales for this product at launch were over 500% higher than any other product we’ve ever launched before. MAJOR success.

One side note: One thing that I did notice with this promotion was that, for the first time, the vast majority of buyers were not existing customers. That’s good news and bad news. Good news is our customer list exploded. Bad news is that a lot of our existing customers who would have loved it, didn’t get it.

Later, I surveyed, and it seemed like the people who knew me already were more likely to feel nervous sending less than full price. So I went to a lot of existing customers who didn’t get this one and emailed them personally – like, personally, personally – and said, “Seriously, honey. A dollar is fine. Get the course. It’s great.” That led to a big spike after the launch.

In my opinion, the Emergency Turnaround Clinic was the best thing that ever happened to IttyBiz. Because so many sales were for $100, $50, $2.31 or whatever, the dollar figure for the launch wasn’t as high as Failproof or Online Business School. But our customer list exploded, people poured their hearts out in their intake questionnaires, and we got a chance to see what our customers were really feeling. This was a massive pivot point for us.

So what are the takeaways?

1. Sometimes weird works. (Also, sometimes it doesn’t.) Weird doesn’t mean a death sentence, though. We all sit around talking about innovation and how the absence of it is the death knell of business, and society, and life itself, for that matter. But innovation means different and different is a synonym of weird. Take some risks, for God’s sake. They might not pan out. They probably won’t pan out. But those that do pan out make you an innovator. Then they write books about you and stuff.

2. Don’t be afraid to go intimate and raw. Part of why this sold so well was our willingness to come out and say, “So… you’re broke, huh? Like, really, really broke? Yeah. That sucks.” We didn’t try and make this shiny and flashy, we tried to make it real and honest. That seemed to work in our favor.

3. Timeliness and scarcity don’t have to be Mean And Evil. Sure, it takes a bit of a fine hand to pull something like this off, but it’s not flying an F-15. It doesn’t take THAT fine a hand. If you’re lacking any kind of scarcity or timeliness element in your launch, see if you can add something live, or live-lite.

4. Despite what the gods will tell you, people do open email on weekends. (We’ve tested this since, by the way, and open rate is always higher on a Sunday than on a Saturday.)

Next up in our series of More Than You Ever Wanted To Know About Launches, we’re talking about the anti-launch, the quietest little sneeze of a launch we ever did. For those who are freaked out by launching, you may want to try this approach. You can read about it right now by clicking here.

Naomi writes more things like this in The Letter. Get it for free today. (It also comes with free marketing courses. You can’t move for free here.)

About the author: Naomi Dunford started IttyBiz in 2006. In her free time, she likes to… ha! Free time. You’re adorable. Learn more about her here and catch up with her on Twitter or Facebook.