My job is to look at the world and wonder... "How can we make things better?"
Everybody knows that information marketing can be super-profitable. And while it isn’t my intention to piss on anyone’s salad, I have a feeling deep down that something isn’t quite right.
Why is info-marketing so profitable? It’s simply because any digital product that is delivered electronically has practically no cost of production or cost of delivery. So the only cost of sale comes from advertising, meaning that gross profit = sale price – advertising costs.
These days you don’t even have to burn and mail a DVD. So whether you sell two units or twenty thousand, each one is just one more record on your membership area database.
No wonder so many people are drawn to this “easy money” and there are so many courses on the market (themselves info products) promising to show you how you can tap into it, with new ones coming out all the time.
My issues are twofold:
I’ve written about the second point at length before (including “Internet Marketing is Broken“) so let’s focus on the first point.
I’d like to compare what goes on in “info marketing” with established sectors like science, medicine, and academia.
There you get very smart people, who’ve spent a lifetime studying their particular niche. They come up with an idea, verify and validate it, get it reviewed by peers, and then finally publish it for the benefit of the whole world.
Here’s an example, taken from the Lancet (a UK-based medical journal).
Now, I don’t claim to understand exactly what this article is about, but just look at the number of professors and doctors who have been involved in the study! You can get a feel for the level of sheer excellence that has gone into this work — literally months or possibly years of research, testing, validation, and review.
There is a cost to access this report via the Lancet. A year’s single online access currently costs £151 (US$187). That’s for everything they produce – a whole library of potentially life-saving knowledge that has been rigorously tested before publication. I would argue that £3 per week is a fair price to justify the costs of maintaining the online library, making the information practically free.
Now, let’s compare something taken randomly from the info marketing space. Eben Pagan’s “Digital Product Blueprint” (sales page) costs $1997, over 1000% the cost of a subscription to an entire library of potentially life-saving knowledge.
Now, I’m sure that Eben’s product can deliver the goods. I’m sure it will take me step-by-step to creating a digital product in 90 days. (I’m not sure that will also guarantee my life is taken to the next level, but let’s let that slide.)
How and why can Eben’s 90-day programme possibly be worth ten times a Lancet subscription?!
Has DBP taken more work? Looking at the list of contributors to the Lancet article, I would say not, and certainly not 10x the work.
More expertise? No way.
Originality? Well, I’m sure DPB is based on many marketers’ previous work, probably including Brian Clark’s “Teaching Sells” (2009), Product Launch Formula, and many more.
And there’s absolutely nothing wrong with building on prior art! In fact, the vast majority of science, medicine, and technology necessarily does the same. That’s how we have made so much progress as a species!
The Lancet report will certainly reference a lot of previous work (although probably in a totally transparent way, as it’s very bad form to pass off any previous study as your own).
So let’s be generous and say there’s little difference between the two products in terms of originality. Both are built on decades of prior art, and have had taken at least months of original work to put together.
No case for a 10x price tag so far.
In fact, let’s cut to the chase and say that the ONLY case you can make for DPB’s $2000 price tag is… The promise to make you more money.
That’s the crux of the whole argument. The cost is justified by the promise… no, the implication, that you’ll not just make money using this, but that you’ll make so much more money that it will “take your life to the next level”.
Is it true? It may well be true. It may well be the case that, if you follow Eben’s 90-day plan, and you have the prerequisite assets and skills at your disposal, you could get more than your $1997 investment back.
Is it guaranteed?
Um… Er…Shit, no.
Actually, here’s Eben’s guarantee.
This marketer will guarantee that you get a digital product done in 3 months. That’s it. Not launched, not sold, not one penny of your $1997 investment recovered.
In fact, if you want to get really picky, the guarantee requires that you present your homework for the entire program, which I’ll bet actually necessitates that you’ll have actually created the product in order to reach the end. So in reality this could be no guarantee at all.
So Eben isn’t promising you’ll see your $1997 again. And why should he? He can’t drag you through to commercial success by the hair, ultimately it’s down to you to apply what he teaches you. That’s a fact.
BUT… We still come back to $1997. We still come back to TEN TIMES THE COST of a whole library of potentially life-saving knowledge of the highest calibre.
The copy says, “Why would I offer a guarantee this strong and let you go through the entire course at my risk?” (my italics). But how much is the provider actually risking here? The cost of sale, that’s all, which as we’ve seen should be minimal.
So, unless I’ve missed something, the fact is that the buyer is taking 100% of the risk here.
Note that I’m not setting out to say that Eben Pagan is doing anything wrong, or dishonest. Rather, this is the pattern across the entire information marketing sector.
Several people have accused me in comments of being jealous of “successful” Internet marketers.
I’m not. I have nothing against people making lots of money, and I myself have made lots of money in the past (six figures) selling information. So these articles are as much a journal of my personal journey as anything else.
Others will come out and accuse me of lacking “abundance mentality“.
I don’t think that charging exorbitant prices for digital information IS abundance mentality. In fact, I thin the contrary is true. It’s scarcity mentality, and it’s unnatural.
If you ever want to know how things can work optimally, just look to Nature. Nature is abundant. Flowers release their scent freely. Trees and bushes produce nuts and fruit freely. Yes, plants actually “trade” nectar for pollination and produce fruit in order to procreate, but here’s the difference…
In Nature, the giving is not tied to an up-front cost. Sure, a flower expects bees to carry its pollen to another flower, but it offers up its nectar anyway, in the hope of the reward. It does not require the bee to commit massively up-front in the transaction.
In fact, you could say it is the flower that takes the risk.
So why, in information marketing, should it be the buyer that takes all the risk?
I believe it is possible to give away practically all our information, and still make a good living. In fact, I’m proving this by giving away all products (that are all my own work) for free via Open Source Marketing and other channels.
I’m still at the early stages of these ideas, but here are a few thoughts to digest:
And that’s the crux, really. As I said at the start, if knowledge can be used to benefit others, why charge for it? Why follow scarcity thinking?
If you have specialised, advanced knowledge — if you’re the best — why not make your money by applying that knowledge? Here are some ideas for you.
There are plenty of ways to get paid for your knowledge by actually applying it in the real world.
What? You think that by refusing to share your knowledge with anyone unless they can pay makes you more valuable?
I disagree. When I look at the world, I see the very best sharing freely, creating abundance AND profiting well, while those who are stingy with their know-how are not among the best. They’re shysters and penny-pinchers who know the price of everything and the value of nothing.
So I guess what I’m saying is that, in terms of The Stack, the “DIY Paid” level should ideally be incorporated into “DIY Free”. That’s the way I’m running my business now, and I hope to show you how great it can be to follow the natural, divine model and to share freely. Want to join me?