Will Your New Monetization Model Work?
New ideas are often brilliant ideas, but sometimes they get sabotaged by unforeseen events. If only we had a crystal ball to help determine how they would be received. Today, everything is driven by the bad economy and you really have to ask yourself whether your monetization model fits people who are being careful with their money and looking for high value at a low price.
I volunteer for an organization that had a brilliant idea to standardize the teaching methods of a particular, popular niche that has grown tremendously over the past few years due to reality television shows. The classes that are currently available teach people all different techniques and many of them are hodge podge classes that really don’t take the students step-by-step through the process of going through beginner technique to more advanced techniques.
The idea was well received, but the prices expensive. Offering discounts didn’t help because the discounted price still exceeded the competition’s. The thought process was that people would pay more for higher quality. As it turns out, another website came along promoting digitally delivered classes at a small fraction of the cost. The other site’s popularity and success was further propelled by offering an affiliate program. Had I not been involved with this organization, I would have utilized this affiliate program myself as a monetization model on my own website.
Now, the organization I’m with has to completely rethink their approach. It’s difficult to launch a high ticket product in a poor economy and when someone else comes along and decreases the value of what you offer, your monetization model will not fly. If people are to buy into why your product offers high value and your product is unlike others on the market, you have a big job to convince them why they need your product. You have the barrier of educating the public to overcome before they’ll consider making a purchase from you.
Your research must take many different things into consideration. The above scenario doesn’t mean to suggest that new ideas can’t work in a bad economy, only that you must have a plan to overcome it. If you’re providing an answer to something that’s missing in a niche, that’s a great start, but you need to get people in the door to try your product in order for them to recommend it. If your price is prohibitive of them taking that first step, you’ll never get your idea off the ground floor.
Before you even buy the domain for your website, you should put time into researching your niche thoroughly, gather demographic and sales information from small business websites that perform research. You might consider offering a more affordable version of your product with the plan of enticing those buyers to upgrade to the more expensive one. The key is to ensure you will be able to build a customer base – just get people in the door. Their recommendations will have more weight than your touting your own product.