Is there ever a reason to build a product that doesn’t focus on profit maximization?
I know what you’re thinking. You’re thinking I’m crazy. I get it. After all, it’s stupid to build or sell a product where you’re not focused on profit, right?
Or maybe you’re thinking that I’m going to suggest building social products – products with a social agenda (not social like Facebook, but social as in missional).
Nope, not talking about that.
First, let’s talk yearly numbers.
Number of people who stop by my site (in a year): 450,000
Number of people who come more than once: 200,000
Number of people who share via twitter: 15,000
Number of people who get email posts: 2,100
Notice the narrowing of that funnel? It starts wide and shrinks.
I don’t have exact data for the middle part of the funnel, but it goes something like this:
Number of slide presentations where my site is referenced (on slideshare): hundreds
Number of WordCamp speakers that reference my site: tens
See how the funnel keeps narrowing?
And let’s then look at the last groups.
Number of people who buy my ebooks: hundreds
Number of people who buy one-time phone calls: 40
Number of people who buy coaching: 20
Do you see the funnel?
It’s how I monitor engagement. I know better than to sell expensive coaching to a person who has only read a single post on my site.
So I pay attention to:
who visits more than once
who shares my content
who references my content in their content
who wants a lot of my content in their email
who buys my eBooks
who wants phone calls
And when I know what segment they’re in, I can evaluate if it makes sense to leave them in that segment or help them consider moving to the next one.
This is not a strategy for the hard-sell. It’s simply an awareness of this truth:
The people who will buy my most expensive offerings are the people who have invested already.
Here’s another take on it
So, might there be a reason to build/sell a product that isn’t focused on profit maximization?
I think the answer is yes.
When the product (and its purchase) allow you to leverage it as a simple way to create flow in a segmentation strategy that helps you identify those segments most ready and willing to invest greater amounts of money on your more expensive products.
I sell a $10 eBook. And I don’t do it to make money. I do it to help me isolate parts of my market that are willing to spend more than $1 with me. And that takes my audience from hundreds of thousands to hundreds. It’s a remarkably helpful segmentation
Am I crazy? What do you think?