This business model is definitely NOT for the faint of heart…
As you’ll see in the video below, this “Loss Leader” strategy involves a lot of risk and it definitely shouldn’t be attempted by newer marketers or anyone selling crap. (In fact, that goes TRIPLE for folks in that last group.)
That said, it’s a great marketing lesson and a great example of a guy who’s proud of his content and willing to put his money where his mouth is. Watch this video and you’ll see what I mean:
CLICK HERE to see an example of this “dangerous” business model in action…
UPDATE (August 15, 2008 - 3:05pm Central):
Obviously there’s something to this model. I just talked to Frank and he sold out all 2000 units in about 30-minutes. That’s freakin’ insane!
I’m gonna go on record now and say this will probably be the new launch strategy that will dominate the rest of 2008 and probably most of 2009.
You heard it here, first!! 
August 15th, 2008 at 2:29 pm
Hey Ryan,
Thanks for another great video!
I have seen a lot of low cost or even free frontend offers by marketers hoping that their backend offers will stick.
I feel that we marketers really need to focus on creating great products/services and if we do then we don’t have to worry as much about the backend sticking.
~Brett
http://www.FreeTrafficBigProfits.com
August 15th, 2008 at 2:37 pm
Great video
I’m sure like most marketers the goal is to get to that point where we can do it ourselves.
August 15th, 2008 at 2:40 pm
Anyone whoes followed Frank’s stuff for more than a few hours worth of video content knows that he is an absolute evil genius of marketing…
He’s actually giving away about 16 hours of dvd footage and over $2000 of “stuff” for free! I’ll definitely be jumping onto that bandwagon, Of course Frank probably payed me to post this comment so don’t listen to a word I’m saying..
cheers,dima
August 15th, 2008 at 2:53 pm
This is referring to his launch today @ 12pm PST?
August 15th, 2008 at 2:58 pm
You did a great job of explaining the concept and while I listened, I thought to myself, Wow! what a great way of making a unique presention as an affiliate marketer…wonder if he’ll give us a link to buy this stuff. Sure enough you did! Great idea! Let me know if I’m wrong!
August 15th, 2008 at 3:18 pm
Hello Ryan,
I do believe that this is a risky business model, but at the same time, it can pile huge sums of money into your pocket if you do it right.
A lot of marketers that do this successfully have a sophisticated sales process where the customer takes up the free trial offer with a forced continuity plan, and then have a variety of different upsells and downsells to ensure profits. And in the end, they come out really well!
So in other words, it is all about the sales process.
If your sales process is right, then you would not have to worry about losing money on the front end….because you’ll make a bunch of money off the upsells and downsells….and eventually some money off of the forced continuity program.
Melvin
http://www.list-building-videos.com
August 15th, 2008 at 3:58 pm
Nice simple video Ryan to drive the point home.
August 15th, 2008 at 4:08 pm
Nice work Ryan!
I can personally vouch for Frank’s stuff he’s giving away. . .it’s worth much more than the $2k value listed. It’s made me a lot more. . .
Frank’s stuff is the highest quality, and the content in this package is gonna have people sticking around his continuity program for quite a while. . .but let’s say worst case scenario. . .
50% of people cancel before first billing. . . and the other 50% only stick for one month. . .here’s the numbers:
1,000 x $250 = $250K - ($25k in cost to Frank). . . net $225k. Not bad for a “free loss leader promo”. . .
Definitely not for newbies, but great way for experienced quality marketers to get more subscribers and increase members to a continuity program. ..
Great stuff as always Ryan!
Cheers,
Sean
p.s. btw, the whole 50% will cancel, and the other 50% will only stick around for 1 month. . .is not even close to what will happen. . .so i’m pretty sure Frank will make a bit more money than that. .. but his stuff’s worth it!
August 15th, 2008 at 4:15 pm
Hey Ryan
Thanks for a great presentation on this strategy, all about moving the free line, and almost throw products after people, just to getting them to buy your stuff. This industry is called internet marketing, but it is really not good marketing, and if the marketing word is weeded out by these sometimes almost insane offers, the whole industry is going to suffer from these methods.
Regards
Peder Andersen
http://www.pederandersen.com/blog
August 15th, 2008 at 4:50 pm
Ryan,
Solid video…I liked the handwriting touch…were you using a tablet pc?
It seems that the continuity programs are becoming a trend…at least amongst many of the big names. Those who show their cards ahead of time because they got a nut-hand will do well. They’ll get a larger number of people to stick than had they placed a big-dollar figure to get in the door. To me, this has a higher upside to get more people to stick in the continuity program which is where the BIG dollars can be made.
Keep up the great content!
-John
http://www.TopMentorSecrets.com
August 15th, 2008 at 4:52 pm
Hi Ryan,
thank you for your nice illustration.
Following Frank’s arguments and your explanation seems to promise a new approach to marketing and customers.
They almost let me hope for a new age of upcoming honesty among marketers aiming at the innumerous newcomers on the net during the next decade.
The method depicted here and practised by Frank will hopefully help to separate the wheat from the chaff.
and wouldn’t you aggree that there’s a lot of chaff around?
The exciting question is what marketing methods will turn up next?
Alex Goad seems to be ready to offer a new one exactly these days.
(We’ll see)
Anyhow - watching the changing scene offers a lot of inspiring infotainment
Mara
August 15th, 2008 at 5:34 pm
Hi Ryan,
This is a classic risk reversal tactic taken to extreme and is hardly revolutionary, just not seen very often. As Frank himself explains on his last video it is one of the seven classic offers to ensure success in a continuity launch
It seems to me there is pretty much no risk to Frank with this offer, despite it appearing so. He has a proven record of selling out his (high value) stuff in a very short time.
If my math is correct he stands to make a maximium of 2000 x $297 per month = $594,000 or $7,128,000 per year. Even if he only gets 25% of that its a no brainer to spend $20,000 in fullfilment costs to get $1,782,000 in gross revenue in just one year. And Frank will be no doubt very confident of achieving this based on past results.
The genius with this launch and with Frank in general is his ability to reinvent proven marketing strategies and present them in a new and exciting way to the latest generation of marketers. And good luck to him - I think he’s great and a brilliant natural communicator.
Simon Beck
CareHomeMarketingExpert.com
August 15th, 2008 at 6:40 pm
Hi,
Not so much brass balls as Golden balls. Of course he is just using a new spin on an old technique, which works for him, because he the brand image and awareness which many people will aspire to.
Ohhh, and by the way, he IS Gifted, some people will say a Genius, and will refer to him as the Go 2 Guy.
Furthermore, I do NOT require any balls in the new and unique lotto style lucky numbers game, WHERE EVERYONE WINS.
In fact, NO balls are allowed. lol. (not even the Golden ones). Gr8.
Good luck
August 15th, 2008 at 7:10 pm
Ryan, I am a customer of yours. If your videos, like this one, were half as long, then you would be doing us all a huge service. Not to mention that you would be the only internet guru with short, info-packed, videos.
REPLY FROM RYAN: Thanks for the feedback, but I’m not entirely sure what you’re saying…
Are you saying you like this video (as opposed to my other ones) because it was short, or are you saying this one needed to be even shorter?
I guess things could always be tightened up, but you get to a point where “info-packed” and “short” start to go at odds with one another.
Continued feedback on this topic (not just from ulu but from everyone) would be greatly appreciated.
-Ryan
August 15th, 2008 at 9:38 pm
Ryan,
Well done. Loss leader Gen Explanation. Frank has enough Money to absorb these costs. Long customer value will easily 4 X in future profits. i, myself did not buy his offer. Was not near my PC. So C’est La Vie..
Yes am on Frank’s list. I watch his videos.
Good trophy fro Frank.
Kev
August 16th, 2008 at 6:59 am
Great heads up Ryan.
It is going to make it harder for the rest of us to compete if this model takes control as you predict.
I wonder how it will change the face of internet marketing.
Dean.
August 18th, 2008 at 5:01 am
Hi Ryan,
It is surely a good business model even though it is daaaaaaaaangerous.
This kind of business model is not for everyone cause there is high cost involve upfront and you need some sort of status in the marketing niche before you can do that.
Btw you have a unique way of promoting products as an affiliate.
Great info.
John Tan
August 26th, 2008 at 11:27 am
Ryan,
You dared to challenge Frank Kern? I’m still pondering whether this wasn’t in fact a promo for him - you know, along the line of that BAD NEWS copyright approach - to garner attention for his latest launch.
I think you did a good job of explaining the pitfalls for those of us not Frank Kern, but believe you left out a significant point: The Internet is filled with freebies. Frugal people (myself included)use that to our advantage. We pick up all the nuggets scattered along the path to the gold mine without ever intending to actually dig for the motherload. No matter how good the content, no future sale will be forthcoming. It’s not in our budget. IM’ers need to understand that.
I appreciate your contributions (which is what each freebie actually is) to my eventual (she says hopefully) success, and pray not too many frugals hit your doorstep. Re:ulu’s comment, I like short, punchy, to-the-point videos. Around 10 minutes is good (thank you!) under 7, GREAT! After all, do you know how much free content I have to absorb each day
Regards,
Annie