Financial & Travel Musings

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Knowing whether or not your product is popular is a very important aspect of marketing, but how do you find out if it’s “popular”?

Consider a car for example. Whilst the car companies try to create a sexy image for their cars to sell them, most of us in reality are looking for a car that works, keeps working and which seems to give us a lot of car for our money. So, if you saw an average car priced at a price well below average that was from a manufacturer with a reasonable reputation then chances are that you’d buy it and so would a lot of other people too.

That would obviously create a backlog of orders for the car which might be taken by the manufacturer as an indication that it was very popular. They’d be right in this instance, of course. But what if they doubled the price? They might still have the backlog of orders but few people would actually buy it when their turn came up.

SocialSpark are doing the exact opposite of this at the moment and seem to be living in some other world divorced from reality. They’re advertising opportunities to write sponsored posts at quite good rates and thereby ending up with a waiting list on, seemingly, all of the opportunities that they offer. Their system is using the length of the waiting list as an indication of popularity (fair enough) and reducing the price paid based on the popularity (not a good move). So, for example, they had an offer on at $27.50 a couple of weeks ago (quite a reasonable payment for 250 words). Two weeks later when that queue was cleared the price was now $5.50. Thus, a lot of people who were interested at $27.50 were offered $5.50 for the same work (and, like me, turning it down).

Yes, you can use the waiting list as an indication of the popularity of your product, but don’t forget that one key aspect of that popularity is the price. Change the price significantly and the popularity can change dramatically.

Popularity: 57% [?]

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You might think that because there are thousands of companies running affiliate schemes around the world that there’s a lot of money to be made in it. There is, but not necessarily for you.

The problem with many of these schemes is that there are minimum payment amounts so in many ways it pays the companies running the schemes to have a thousand affiliates each bringing them one sale rather than one affiliate bringing them a thousand sales. In the first case the only cost to running the scheme is the administration as there’s often no sales commission to be paid whilst in the second case they’d end up paying out the commission at the highest band.

In general terms, that problem usually applies to companies running their own schemes therefore it’s usually better to sign up by way of one of the affiliate marketing companies such as TradeDoubler or CommissionJunction. They obviously take a slice of the commission that would otherwise go directly to you but at least you avoid the problem of having a series of small payments due yet none of them above the minimum for a payout.

Clearly there are some affiliates who go all-out in their marketing of the products and they do very well as you’d expect but it’s far from the easy job that many people seem to think. For example, even though I run a series of travel accommodation websites and religiously place affiliate links for car rental on pretty much every appropriate spot, in reality I get under $100/year from the affiliate links from those sites.

In fact, car rental doesn’t pay a massive amount (usually around $10/rental) but there are other affiliate links that pay quite substantial chunks of cash. Of those, probably among the most lucrative are house sales and online casinos.

The link on this page probably isn’t a fair test of the affiliate schemes but, on first sight, you’d think that at least some people would click on it and buy something. Frankly, I’d be very surprised if anyone did, but if they do, I’ll update this post. Go on… ruin my day and sign up for an Amex card (free to you, few dollars to me).

Popularity: 91% [?]

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One of the problems online is that people tend to use searches to find your product and that makes it a little more difficult to sell a product that has a higher value (and price) than the equivalent from your competitors. There are a number of ways to get around that though.

A very successful way for consumer products is to create a coolness about it. That’s worked many years for Apple products and those that produce the accessories for them too. The added price that you can pull in via this method can be very substantial: whereas a typical MP4 player was selling last year for around the $20 mark, Apple were selling a much less functional product for over five times that price. The difference? Simply that Apple created a “must-have” image for their iPod whereas the cheaper products just didn’t have the marketing budget for that.

Whilst that’ll work well for many consumer products and particularly those targeted at the young, it doesn’t work for all products so you need other approaches. Typically you can shift higher value products by repackaging the product as a lower value version with limited functionality but with the ability to upgrade the product. As you’re reading this, I’m sure you know very well how this works in computer sales outlets. There’s often a low ticket price but the salesman will say that you really need two or three times the memory to get a fast machine, that you really must have a Blu-Ray writer, and you definitely have to have extended warranty.

In the information age, there’s the possibility of using built-in obselesence. Perhaps the current best example of this is the new version of the TomTom satellite navigation unit. It’s priced quite low in comparison to their previous generation of products and comes with the maps for the area you buy it in. It looks like a great deal and it is but it doesn’t have the memory card slot that the previous version had therefore when you want to add more maps or even upgrade to the latest version, you need to buy a new unit. Naturally, the more expensive version doesn’t have this limitation.

So, think of using coolness, upgrades and limitations on the product to give your customer reasons to buy the higher end products that you have.

Popularity: 47% [?]

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