Insider Secrets of 7-Figure Launches
Alex Nghiem currently advises ecommerce companies, digital marketing agencies and SAAS companies on how to grow through acquisitions and how to exit. He’s also helped clients sell over $30 million via webinars and product launches.
He’s written 5 books including “Launch Now Or Die!” and “Growth Through Acquisitions: How To Grow 300% Faster Than Your Competitors”. He’s spoken on M&A and emerging technologies at leading institutions including University of California and Cornell University, and he’s been quoted in Forbes and Atlanta B2B Magazine.
In today’s interview, I interview him about hosting 7-figure product launches.
Watch the video of my interview with Alex or read the transcript below!
LinksAlex’s Book, “Expert Riches” Alex’s Facebook Alex’s LinkedIn Deadline Funnel
Jack Born: Hey everyone, this is Jack Born. I’m the founder of Deadline Funnel, and I’ve got a really special guest here today. Longtime friend of mine, a guy that I’ve kept in touch with for many, many years, a guy named Alex Nghiem. We’ll say hi to Alex in just a sec. But let me give you a little bit of background. So when I was working with Perry Marshall as his marketing manager, because I was high up in Perry’s organization, I actually, you know, constructed the marketing campaigns for most of what Perry put out. Perry went to some very high level masterminds, and one in particular, there were about six or seven people that would show up about three times a year in different locations across the country. And these were some really, really sharp marketers. One of those was Alex. And before I came to that first meeting, I had not heard of Alex, but I quickly realized from his introduction and some of the stories that he was telling us and his list of clients that Alex and his business partner at the time, were running launches and had run launches for some of the biggest launches around not just in the internet marketing space, but also quite a bit in the real estate space. And so whenever the topic of launches came up, everyone at the table, these very seasoned marketers would turn to Alex and say, “Alex, what’s the deal? What do you think?” And so I wanted to bring Alex into this because even though Alex is not currently actively, he doesn’t like to consider himself a launch manager anymore. He’s on to lots of different various things, but having done this for many, many years, and seeing the behind the scenes, the good, the bad, the ugly, and everything in between, I thought it’d be really great to ask Alex, and for you to hear it from him, the good, the bad, the ugly, and everything in between about launches. Because there’s a lot of, when people talk about launches a lot of times you just hear the positives, and I mean, I wanna give a balanced approach to this. So Alex, thanks for joining me on this call.
Alex Nghiem: Hey, it’s a pleasure Jack. And I’m actually thinking back how long we’ve known each other. It’s probably been going on 10 plus years now I think. Time flies, yeah.
Jack Born: Yeah, yeah. So I bumped into you at the MFA event put on by Todd Brown, and I said, “hey, would you be willing to share some of your relevant experience?” Why don’t we start with just a quick thumbnail sketch of, just give us the quick thumbnail version of why someone should believe that you know what you’re talking about with launches?
Alex Nghiem: Sure. So, as you mentioned briefly, yeah. So we ran, I believe, up to now maybe, probably to 18 and 20, you know, somewhere in that number, and more than half of them have done over seven figures. In fact, one of the launches we did did over seven figures per month. It was a, you know, continuity program. And, you know, and some of our clients here literally went from maybe a local player to a national player, you know, using the launch model. I believe at the time, we had the very, either the first or second launch agency, which I don’t wanna remotely misrepresent saying “we came up with that model”, but we basically were the only agency around that ran seven figure launches. That was our positioning, and that’s what people seek us out for. So we tell people, you’re running $50k, $100,000 launches, you know, there’s probably things that are fine. But if you talking about multi-million dollar launches, the dynamics, and the economics, dynamics and complexity goes up, not linearly. I came from running, you know, multi-million dollar software projects, and that’s a lot of parallels between running a launch and software projects. And my partner at the time, as you mentioned, he came from a background running, you know, very large scale, you know, projects in corporate America, you know, $50 million plus budgets. And so when clients would come to us and say, “well, how do we know you guys are doing?”, we say, “well, with all due respect, this is not on the high end of what we ran, you know, before.” And so that’s, you know, that creates a lot of reassurance. That’s how, you know, we, it’s a lot of this stuff that people are seeing now, we actually pioneered 10, 12 years ago. Like the idea of using webinars and live streaming not as part of launch, we were doing that way, way back, you know. And we still do it today, you know, in the, you know, modified format based upon the, you know, what’s happening right now in the marketplace.
Jack Born: So I wanna start with, okay, and by the way, I’m not gonna go into too much detail about “here’s all the wonderful things about launches.” You mentioned one of them, which I wanna just touch on real quickly, and that was that, it can generate lots of visibility for someone who’s (indistinct). However, since everyone else talks about, like all the great things about launches, I wanted to focus on the other side of things, not to bash launches, but just to give a realistic idea. So, with that context, let’s demystify the vanity metrics that sometimes feel (indistinct). Like, “hey”, you know, “hey, we did a $2 million launch!” So behind the scenes, what is actually going on?
Alex Nghiem: Sure. So before I break down the number, I just wanna kind of share with you my philosophy, right? We tell everybody right up front that a launch is a massive customer grab. It’s rarely, if ever, a profit center. And if our clients, you know, didn’t get that or didn’t subscribe to that, we pass on working with them. Exactly the reason you’re talking about. The money’s in the back end, right? So I’ll use a very specific, you know, we’ll look at a number here, we’ll break down, right? So line item, if you’re listening to this, you may wanna grab, just grab a yellow piece of paper and a pencil or pen, you know, or maybe a spreadsheet, whatever you wanna use to track the numbers, right? So let’s use a launch that’s doing, let’s be conservative, right? But basically, by the way, these numbers scale up roughly the same. So most of us I would say, you know, a million dollar launch is a, you know, a pretty significant milestone, even, you know, even today. So if a launch is say, there’s about a million, between a million and 1.2 million, right, one of the things that you have to realize, that during a launch, there’s a intense amount of pressure because of the scarcity, right? There’s nothing more that uses scarcity more than a launch. I know many clients and I have colleagues that use literally a launch, as like, “okay, look, this is the only time it’s ever opened all year”, right? So everybody rushes in, but because then you get into what’s called the “bonus war”, right? Where people, the affiliates then bonus on top of that. So what happens a lot of people buy because of the intensity and the euphoria, and you know, all the excitement, but then once the ether wears off, once the excitement wears off, the refund rate, you know, kicks in. So I’ve been on launches where, you know, it’s not uncommon where the refund rate is twice, or three times this. In fact, one of the things that a lot of, you know, after the first launch, we realized that the customer, not only does the refund rate goes up, the staffing goes up, too, because you have to hire additional customer service, or you basically have to ask them to work a lot longer hours ’cause there’s just an intense amount of, you know, a number of clients flying in, right? So, figure a refund rate 20, 30% is common. And by the way, most people say “oh, no, that’s not going to happen. My product’s so great.” Yes, your product may be phenomenal. In fact, we only launch stuff that had really, really high marketability and also had really good track record. However, because the affiliates are out there, they’re kind of driven by a set of conflicting dynamics, right? They wanna promote the thing and when (indistinct) you want them to do that, and so what happens is, they start bonusing this stuff, and they start, it’s just a lot of, you know, there’s a lot of scarcity, you know, driven. So we’ll leave it at that. If you want me to go further, I can.
Jack Born: Well, actually I want to, I wanna actually talk about the bonus war that you mentioned there. I haven’t heard you call it that before. I mean, that’s, I mean, I’ve seen leaderboards where the top prize is a car, or I mean, you’ve probably seen-
Alex Nghiem: Oh yeah. Well, there’s two bonus wars going on, right? And again, we’re trying to show you the underbelly of this. So behind the scenes what happens is that the affiliates are incentivized. There’s usually two types of-, well, there’s many, many contests, right? But there’s usually two types of contests. One is the opt in contest, and then one is what’s called the winner, you, know, the winner of the overall launch contest, right? It’s not uncommon for these large launches to have, you know, I lost track of how many Harley Davidsons we gave away. I’m not kidding. I think over the lifetime of that launch agency, I think we facilitated or we basically put together over $2.5 million dollars’ worth of prizes between the Harley Davidson, the, you know. So there’s a lot of incentives behind, you know, again, it’s a sales contest, right? Let’s call it what it is. And so, you know, and the product owner just wants to reward their top performers. And so the affiliates, if you notice, right, it’s very rare, in fact, I only know one launch, I studied hundreds of these things. I ran about, you know, several dozen. I’ve advised on probably another two dozen, and I’ve study hundreds of these things. But I only know one launch where the launch owner specifically said, “you’re not allowed to add bonuses in.” And in fact, you would disqualify yourself as an affiliate if you were to add any bonuses ’cause they wanted the product to sell on its own merit. However, that never happens any launch, any other launch I’ve seen. So when I talk about the bonus war, what’s happening is the affiliates are basically piling on a lot of bonuses to win that because behind the scenes there’s other prizes beyond the commission. So I don’t wanna basically paint any evil pictures. I’m just telling you the dynamics, you know, you and the listeners, the dynamics, right?
Jack Born: If there’s, and beyond that, I know that there’s some- winning those contests or ranking has other benefits. Why don’t you talk about that?
Alex Nghiem: Sure. So, there’s also a slightly, you know, not often talked about dynamic, which is the reciprocation, right? So in other words, it wasn’t uncommon that if you win, by the way, listen, I’m not acting as a whistleblower here, right? We still run launches, you know, under certain conditions. So I don’t want people to say, “oh, well, this guy’s left the industry. Now he’s, you know, he’s talking about something that-“. Look, I’m just giving a fairly objective here. So having said that, the idea is that it’s a very common dynamic that if you’re basically, this is why you see this kind of little carousel, right? If you’re basically usually the top five, in some cases the top 10 affiliate, then what would happen is, contractually, the product owner is obligated to reciprocate. That’s actually a big reason why a lot of affiliates, even over the cars and all that other fun stuff, that’s the big reason why the affiliates really go all out to win that, because then they know that then they have, you know, a certain amount of promotion scheduled for next six to 12 months.
Jack Born: Right, right. And the other, so I thought you’re gonna go in another direction. that’s a great one. But the other one is that there’s a bit of an ego war?
Alex Nghiem: Oh, yeah. Yeah, very much so. Yeah, yeah, bragging rights and all that. That’s another reason why people, right, yeah. But let me take it back to the numbers here, right? So that’s the only reason why, that’s the only reason why you see such intense promotion, right? So you have a refund by, let’s say, 20%, okay? So let’s use a million here, just so for round numbers, right? So you have refund of 20%, that’s $200,000 or, you know, $800,000. Affiliates, it’s quite common to pay 50%, okay? So that’s 20% and 50%, that’s 70%. So again, down 300%, $300,000. A good JV manager would charge you 10% minimum, okay? So that’s $100,000 right there, right? Unless you already are such a superstar that you don’t need an affiliate manager; that’s unlikely, okay? And by the way, these numbers I’m looking at here, I wanna make a distinction, just so you know, you’re doing the math, okay? There’s a distinction that JV broker and a JV manager. The JV broker act as like a rainmaker and a person that’s recruiting affiliates on your behalf. The JV manager acts more as like somebody that’s basically more like a quasi project manager. There’s a launch manager, which I’ll get to in a minute, too. So when you add those two up, it’s not uncommon for that combined amount to be 15 to 20%. So we use 15%, okay, as kind of a round number, right? So you got 20% going to refunds, 50% go to affiliate, 15% go to affiliate manager/JV broker. You’re now, let’s see, that’s 75%. Is that right? 85% of the money.
Jack Born: Well, let me ask you this, so you did 20%, 20 to 30% refunds, which I totally agree with, but wouldn’t the affiliate commission be a 50% of the net? Or is it…?
Alex Nghiem: Well, it’s 50% of gross, but sometimes what will happen is, you know, depending on who you are, some folks will adjust the refund, others will eat it.
Jack Born: Okay.
Alex Nghiem: Yeah, so let’s make a conservative-, let’s just drop the affiliate down just to adjust. Let’s just call it 40% of your gross, okay? So a million, 20% of refund is $800,000. 40% to the affiliate. So now we’re down to like maybe what, 60%, $400,000, right? Another say 15% of the original is 150. We’re down to maybe about the $200k-250k range, right? Again, at a million dollar launch, you better set aside around 100,000 in prizes, otherwise you’ll feel like you’re gonna, I literally had an affiliate tell me like, “your prizes suck.” I’m like, “I’m sorry, what?” Your prizes suck. I’m like, “what are you talking about?” “Well, your number one prize. It sucks.” And I’m just like dumbfounded, like, “really?” And then ever since then, you know, that’s now, again, if you ever have a chance to look behind the board, anybody’s ever been an affiliate, super affiliate, they know what I’m talking about. So maybe $100,000 for that, right? So [indistinct], it’s not uncommon to basically have maybe 10 or 15% net. And that if you’re doing every damn thing right. If the launch go sideways in any fashion, I’ve watched more than one company – how do I put this, you know, be diplomatic – go sideways, or in some cases go massively upside down. In some cases never recover. Because it’s like a movie premiere. That’s why I tell people, “look, this is a movie premiere, okay?” And if you ever watch a movie premiere basically not open strong, the movie is over. You can’t prop it up after that. So this is very high risk stakes you’re playing here. And again, we’re not talking about the emotional costs on the team. Because you’re working, I mean, I’m not gonna sugarcoat it, okay? Anybody who tells you otherwise, “oh, we have a process”, call out on it, right? When we were running lunches, it wasn’t uncommon to work 12, 15 hour days for long, long periods. And everybody keeps saying, “well that’s because”. No. Look, I’m a systems guy. I know processes. I know you know processes well, Jack, but you’re taking the equivalent, like roughly a year or two years’ worth of work, you’re trying to cram it down to three to six months. I don’t care how efficient you are. That’s just an insane amount of work, and that assumes you have a built out team.
Jack Born: And let me, okay. So let me ask this. So I wanna be clear, so it’s a lot of work for you, the launch agency.
Alex Nghiem: Oh, no, no, no, no. We tell the client the same thing, too. In fact, one of my clients told me this afterwards, said, “I wish you guys had told me,” right, you know, you know, ’cause we told them. [They] said, “I know you guys told us. I didn’t realize what you guys really meant.” And so we did a post you know, we did a post-launch interview, right? He said, I said, “you know, what are lessons learned?” ‘Cause we want them to share, right? ‘Cause we have our perspective. He’s like, said, “you know, anybody’s doing a launch, I would basically advise them to go have a conversation with their loved ones that for the next several months that they may not see much of me.” And in fact, I actually published an interview years ago, and I actually had folks who are contemplating a launch, and when they heard that, they said, “the cost is too high.” Not the financial cost, but the emotional, financial and familial cost is too high. Because you literally are not gonna be that available. And everybody says, “I’m gonna take weekends off”. Pretty much consider weekends and long nights a given. There’s just so much that has to happen. You know, and by the way, just so, and this is one of reasons I love, you know, what you have going on, Jack. Most of the lunches out there, they’re just throwaways. Meaning that it’s very tough to reuse a lot of it the next time.
Jack Born: Hm, why is that?
Alex Nghiem: Because what happens is, is that a lot of the launches, a lot of what happens is the recency of it, right? So if you actually follow some folks, there’s two schools of thought, right? There’s one that says, well, basically have it all done ahead of time, then basically release it. And then there’s the other one, which is like, well, you actually engage with the audience, right? So what tends to happen is with a launch, you know, at that scale, what typically happens, there’s usually a theme that tied together kind of thing that’s relatively current that’s going on at the marketplace. And so for it to really have all the effects that it has, it’s usually somewhat, you know, timely, for lack of a better word, and so, it’s just, very few people actually reuse a lot of the assets.
Jack Born: Okay, go ahead, go ahead.
Alex Nghiem: Yeah, and by the way, one thing I forgot to mention in this, is also that we didn’t, you know, we didn’t even put in this, folks, is just the video, the cost of the production video, or whatever. I tell people this, and again, I don’t like to sugarcoat ’cause, you know, it’s a very large investment. I said, “look, if you’re scared of a $30k to $50,000 bill for the video, then you’re not ready for this.”
And by the way, that wasn’t our fee, that’s the video crew and everything. Because what’s happening is in a traditional style launch, it’s now getting to the point where a lot of people, because when you’re doing a launch of this type, it’s really a big bang thing. You wanna grab everybody’s attention for it to work. Right? Which is one of the reasons I’m not a big fan of what we call a big bang launch. I prefer much more of a rolling, or basically evergreen launch, which is you know, the whole point of what you have, right? Because at that, when you try to make a splash like that, you don’t have the luxury of doing, “well, I think I’ll go subpar on the video.” You just completely torched the launch at that point. So as a launch agency, we never said, “no, no, you have to go spend $30k, $50,000 on the video.” What we were telling them was like that’s the reality. If you wanna make a big splash, that’s what it takes. So we were like, my point is that we weren’t doing that because we had invested interest in making money on the video production. We never got involved in the video production. We would manage it. We would help script it, but the video is something they had to do obviously ’cause, you know, a lot of our clients weren’t necessarily in our same country, you know, or in the city or state at times. So that’s the other thing that a lot of folks overlook is, you know, they get this giant bill for the video. Anyway.
Jack Born: So speaking of bills, what is typical for someone, for an entrepreneur to spend before cart open? Because there’s a lot of, I mean, there’s a lot of build out before. So what is someone looking at?
Alex Nghiem: Conservatively, about $150,000. Conservatively. Yeah, because you have to, so let’s kind of map out what that looks like, right? So you wanna hire like a high, okay, so here’s the some of the key roles, okay? And by the way, as you pointed out, Jack, you know, a lot of people go back to read, you know, I just had a call the other day with somebody, right? I did a little, you know, they heard through the grapevine I’ve done it before. Saying, “Oh my god, am I do something wrong? There’s so much work.” It’s like, “no, the fact you haven’t jumped off, you know, the fact you haven’t, you know, the fact you’re still sane is a testament to that, ’cause you’re 5% short.” They thought they could do this with two people. I said, “no, you have a copywriter.” Figure a good copywriter’s 30, 50 grand. Unless you’re like a really, really great at copy, you wanna hire a high end copywriter, right? A launch team. This includes a project manager. A launch architect. Now what’s the difference? A project manager is the one that runs the timeline, makes sure everybody’s doing everything on time. And this is not a small team. Usually on the low end, eight to 10 people. On the high end, about 15 plus people. Not all full time, but you know, there’s different roles, right? So the project manager. The launch architect is usually the one that basically architects the launch, right? They work with the copywriter. Figure out what’s the theme? What’s the angle? What’s the lead magnet and all of that. ‘Cause they’re, you know, there’s a lot of nuances with a launch that a project manager may not be, you know, familiar with, right? The graphic designers, okay? So at this point, figure that alone is $100k to $150,000. But doesn’t include the copy yet, right? So if you wanna be more pragmatic, let’s be on the low end. Copywriter’s 30 grand. The launch team, let’s just say $125k to go middle of the road. Okay, so you’re now up to $155k. Video, very common, $30k, $50,000. So, my number of $150,000 was actually on the low end. You’re probably looking at in today’s time more like $200k. And, like you said, this is up front.
Jack Born: So I know there’s gonna be quite a few people listening to this and saying, “well, this is really interesting, but I’m not personally gonna be doing a seven figure launch. I wanna start with like a, you know, I’d be happy with a $200,000 launch or a $100,000 launch.” So I know that you didn’t personally do a whole lot of those, but I know that, you know, you were in the, or you’re still are, you’re in the industry. Some of these costs are still gonna be, is it gonna be just…?
Alex Nghiem: It doesn’t go down, it doesn’t go downward that much. Like the video fees, unless you’re willing to just go with a low – Now, again, at some point, it’s not economical to do that, right? So if you do more like $100k-$200,000 launches, the videos are probably gonna run more like $5k to $15k. ‘Cause I talked to somebody the other day. They did an $80,000 launch, and their video fees were 12 grand. $12k or $15,000. What’s the math on that? Let’s just say $12,000 over $80,000. That’s what? 17% of the overall budget? Just on the video. And I asked them, “who did your copywriting?” “I did.” I said, “so what was that like?” Said, “it sucked.” Because they had to do the product and do the copy ’cause they couldn’t afford a copywriter. So that’s where it gets really, so that creates a different form of stress, ’cause now you’re trying to wear 18 hats ’cause you can’t afford all the fees. ‘Cause I mean even a decent copywriter, you know, is gonna cost $10k, $15,000.
Jack Born: Yeah, ’cause it’s not just a website copy, it’s-
Alex Nghiem: Oh, yeah. Oh my god, the amount of email copy. Here’s the other thing a lot of people don’t realize, right? There is, just the unbelievable amount of email copy there is, okay? And this, by the way it’s not the full blown, I’m just giving you a tip of the iceberg, okay? You have all the emails for the launch, right? Okay, for like, to promote the product. Then you got all the emails to keep the affiliates engaged, okay? And then here’s the part that will really blow people’s minds. You will spend tens of thousands dollars on the copy, or unless you know, you’re willing to put in, you know, hundreds of hours yourself. And by the way, that’s not an exaggeration, okay? If you think I’m basing off my, you know, like, “oh my god, he’s crazy. It’s gonna take 10 to -“. No, no, no. If you don’t have a couple hundred hours to set aside for writing this copy, you’re not preparing properly, okay? So let’s just assume it’s 80. My experience would be 80 to 100 hours. How do I know this? Because we hire professional copywriters, and even they are overwhelmed. I have to step in and backfill some of the copy ’cause they were overwhelmed. With a professional copywriter, okay? So that’s how I know how many hours it takes. So that aside, you got the email for the product. You got the email for the, basically, the affiliates to mail to their list, right? And then you also have the email to then actually engage affiliates so they continue mailing. If you think that the affiliates say, “oh, hey, I’m on board”, and they’re gonna do everything to do possible to mail, no. You don’t understand affiliate psychology. Many of them will mail as minimal as possible, and then you have to basically have an email thread going on to the affiliate and pumping them up. That’s sometimes there’s two or three emails a day, right? Then, here’s the other part that’ll blow your mind. There’s basically the email you’ll give to the, for lack of better word, maybe, again, at the risk of stepping on some toes, what we call “B affiliates”, okay? This is lingo, by the way. This is all industry lingo, okay? Behind the scenes. “B affiliates”, meaning they’re not the big players, right? They’re good, but they’re not like the big, big dogs, right? The big, big dogs, one of two things will happen. They’ll take your email then say, “yeah, it looks good, but I think I’ll write my own.” You just spent $10,000 on this email. They’re never gonna use it. Great. Or the other thing that happens is like, “well, we don’t wanna use the generic email ’cause then we’re gonna sound like everybody else. You need to create a customized email for me.” “I’m sorry, excuse me?” Yeah. So now you have a choice, right? ‘Cause say well this person could probably drive 10% to 15% of your sales. And by the way, I’ve seen cases where the top three affiliates drive you know, a good portion of the sales. So you have a choice. You say, you know, if you’re an affiliate, you would do the same thing right, Jack? You don’t wanna be, send out the same email like the other 20, 30 affiliates, right?
Jack Born: Yeah, I mean, it just, case and point, Perry usually, like not, actually more like 19 out of 20 launch, launch opportunities he just didn’t do it because, and his reason was, like number one, I don’t, you know, we don’t have a relationship. And number two, even if we do, I don’t wanna sound like 15 other people. Like that was his, and I’m not saying good or bad. I’m just saying that was his philosophy. But I have seen lots and lots of times when other people wanted to promote Perry’s stuff, like they wanted their own custom email. They didn’t wanna sound like the other person landing in the same inbox, because how does it look when I’m opening up my inbox and I’ve got three emails promoting the same launch. I mean, that’s kind of okay, ’cause everyone, that’s kind of what you want. You want buzz, but if all the emails are basically the same except the sender is, it doesn’t look good.
Alex Nghiem: Right, and of course, you know, you’re the product owner, right? Are you gonna go to like, you know, who you think are your top affiliates and say, “well, why don’t you take on the $5k, $10k, right, to do the email copy?” Like, are you insane, right? So guess what? So the copywriting alone, that’s where that number $30k, $50,000 comes from. And on a small launch, even that number is not that much lower. You don’t really, you can’t really get it done for under $10k to $20,000, right? So there’s some costs you can reduce based upon like the number of dollars you’re willing to do, but actually at a certain point, it becomes, doesn’t become economical to do, when you’re doing these kind of launches, right, where you get a bunch of people together. Now the evergreen model is very different, which we’ll talk about, you know, right? Because you have different dynamics going on there.
Jack Born: Well, and maybe that’s a good time to compare. So one of the things, so you tell me this: what was your experience with regards to any sort of A/B testing? Because I know that A/B testing is tried and true for evergreen, you know, businesses that are getting clients day after day after day, with more of an evergreen model. You look for things that are gonna give your copy a lift, your sales a lift. But with a launch, everything’s compressed into –
Alex Nghiem: Oh, yeah, that’s the other side. I’m glad you brought it up. With a launch, you don’t have the luxury of doing A/B testing because it only lasts for a week.
Jack Born: Or anything that you learned, you have to wait until the next launch.
Alex Nghiem: Right, basically, yeah. So you have to be, you know, you know, that’s why, you know, there’s just so, now, what we do is we manage the risk. Okay, so it’s not like, “oh my god”, like, you know, we’re shooting for the moon, you know, we basically don’t have any, you know- We’ve distributed things so that way it’s not all on the sales letter. That’s what we do is we do webinars, right? We customize webinars for super affiliates. We do live streams. We’re, in fact, I think, as far as I know, we’re the first, we were the first people to do live stream. To give you a sense of how long ago this was, we did a live stream, back then we were charging per minute per attendee. We did a live stream. It was like, three, four hours, the bill was $9,000. Now it’s almost you know, it’s almost free, right? Facebook Live. But to give you a sense of how long ago, you know, some of the stuff that people are doing now that we’ve done ahead of time. So there are ways to manage, you know, to balance that risk. So it’s not all, okay, we open and then you know, crickets or whatever. So we don’t just open the thing and you know, cross our fingers and hope it works out. But like you said, because it’s not like you can, you know, you can isolate that thing and say, “hey, we’re doing this way.” Now, one of the terms I believe we came up with is this concept called a rolling launch, which is we would tell people like, “let’s not do a full blown all out, you know, assault”, right? “Let’s do a very controlled launch first to make sure the offer works out, okay?” So we do stage that way, but that only defers, you know, this for so long. You still couldn’t do the kind of testing you could do with an evergreen launch where you actually have very, very controlled data and you can kind of scale up or down, right, depending on what’s happening. With a launch, it was pretty much an all or nothing to proposition. Because it’s just the nature of the beast.
Jack Born: Now, you mentioned this before, but I didn’t wanna interrupt you. So way back, in our beginning of the conversation, you were talking about staffing resources, and how, I mean, just imagine if you’ve got this, if you’re launching a new product, and you’ve done everything that we’ve talked about, you’ve spent three to six months, etc. You’ve spent the money. But all of a sudden, you’ve got a flood of new clients expecting service, having questions need to be answered. I mean, you’ve got to basically staff up really quick.
Alex Nghiem: Oh, very, very fast. Yeah, that’s actually the very first launch that we did, we were so naive, you know. You know, ’cause at the time, that’s what happened. I mean, basically they had to flood, I think that launch did 3,200… What was the number? No, I’m sorry. That one did 1,800. Yeah, 1,800 new customers. Guess what? Your customer service is not used to that, right? Even if you have basically, you know, like, you know, [indistinct] or whatever, you know, it’s called these days, you know. Like those, you know, web-based, you know, trouble support ticket system, if you have a phone number, you’re gonna get calls. And by the way, a lot of the calls you’re gonna get, it’s not about your products. Because remember, when the person is buying it, they can’t differentiate between you and affiliate. So guess what you just took on? Being customer service, you know, for your affiliates. A lot of calls are like, “well, when do I get bonus X, Y and Z?” “But that’s not even our product.” “Yeah, but are they part of your staff?” How do you explain to buyers that well, no, there are no-. You can’t, right? So you got to coordinate with the affiliate, say, “well this person is looking for their bonus. Can you take care of it?” Because a lot of times they bought because of the bonus. Because they didn’t have a relationship with the product owner. They had a relationship with the affiliate.
Jack Born: So I know that you used to tell us that, if you’re gonna do a launch, you need to have a plan of like what’s gonna come next. So I know that one of the things that you used to teach clients to do or strongly suggest, would be that they do a live event. And there’d be some pretty large, something to be pitched at the event in order to make up I mean, in order to make up for you know, you’ve got all these people coming to this event. You didn’t make percentage wise, you didn’t make very much on the launch, if anything.
Alex Nghiem: Net-wise, Right.
Jack Born: Yeah. So what are some other things that you saw clients do to make up for the economics of the launch?
Alex Nghiem: Sure. So again, as I mentioned, like, you know, near the beginning of the call, you know, what we philosophically, we tell our client, and how we practice this is at the launch is a basic, it’s a very wonderful way of grabbing a lot of customers. There’s a lot of breakage and whatnot, but you know, that’s what happens when you scale quickly. But then unless you have a back end, economics doesn’t make sense, as you alluded to, right? So I’ll give you an extreme version, and then you know, why on the surface, like, what in the world were they thinking? You know, we had a client. Not a, you know, didn’t have as much pull with some of the bigger affiliates, so they wanna give them on a higher, you know, a much more generous commission. I think they gave them 70% on $1,000 product. So you can see where the math is going, right? Okay, well, this guy sounds like he’s suicidal, right? So I think the net on that was like maybe 3%, on a $1.1 million launch. You’re like, “God, the guy must have been completely delusional.” However, the full story is that if you just look at the launch economically, it didn’t make sense. But then, within six months of that, we showed him how to put together an event with a very large back end. In his case between $10,000 and… His back end was like $10k or $15k. He had one at $10,000, one at $15,000. He had all of these people that are now buyers, and by basically putting them through this process, you know, basically, two live events, offering these programs… To make a long story short, he went from a local player to a national player in about a span of 10 months. In fact, that was one of the biggest benefits that he told us later, you know. He went from somebody that’s relatively unknown to, you know, a major player. But to your point, the two live events that he basically put the buyers through, and because, you know, he had a really, really solid process of converting them, he made $900-and-some thousand, and a gross profit on that was like, you know… Because a lot of the costs had already been absorbed by the launch, he kept most of that in house.
Jack Born: By the way that brings a question in my mind, how do you see things structured in terms of affiliate commission with back end sales? In other words…
Alex Nghiem: Great question. So, if there’s, um, there’s no universal, okay. It’s more common than not, to not pay the back end. Unless it’s an immediate upsell, right? If there’s an immediate sale, then, you know, usually there’s a [commission]. On the back end most of the time, there was not an expectation to pay that. Now, having said that, we did have a couple clients, that again, that wanted to incentivize the affiliates more. They would pay them a small amount, usually, maybe three, no more than 5%. And so that was a way to differentiate yourself, you know, ’cause you have to remember the affiliates, especially the high profile, they get approached a lot.
Jack Born: Yeah, so, my mantra that I’ve been putting out to the marketplace is look, you should really strive towards a business model where you launch when it’s right for you, when it makes sense for you, not because you have to. Because there’s a lot of people out there that are just going, you know, the ups and downs, I call it the “launch revenue roller coaster”, you know.
Alex Nghiem: Oh, yes.
Jack Born: You know, quarter one is huge, and then quarter two, you’re eating ramen noodles type of thing. So can you talk about your philosophy on that?
Alex Nghiem: Yeah. The book is not available anymore, but I wrote the very first book on launches. And I ended up, I talked about, like, get off the gravy train, and basically build out and you know. At the time, you know, this was years ago, like, you know, and the technology that existed back, and you know, shortly after that, you know, Rich Schefren came out with the evergreen thing. But the points that I talked about in there, I said take the money you made and invest it in paid traffic. Basically diversify away from risk, ’cause it’s not a business model. But it’s so seductive, right? I used to call it “crack”, you know, because people would get addicted to it. They’re like, “we just did this. Let’s do it again.” I’m like, “you can’t do it again. First off, everybody’s exhausted, right? That’s the one, but two, your affiliates have been pushing this like crazy for you for the last two to four weeks. They’re not gonna mail for you again for another good, you know, six to 12 months. Well usually more like nine to 12 months.” They said, “huh. So what I’m gonna do?” I said, “build another evergreen version of this.” “That sounds like a lot of work. I don’t like that.” And guess what happened? Like you said, you know, you have this giant peak, right? And they think that’s gonna last forever, and because there wasn’t a willingness to build out the infrastructure to make this evergreen, the business then basically slowly kind of slid downwards. You know, and so that’s why these things tend to, you know, that’s why you tend to see spikes in this thing or people come out. You almost equate it kind of like a comet, right? You know, sometime in Hollywood, you know, somebody will make a big splash, and then you know, then they’re not around.
Jack Born: Right, or in the music industry, the one hit wonder.
Alex Nghiem: Exactly.
Jack Born: Yeah. So I mean, the healthy model that I’ve seen is where the core base of what you’ve got is you’ve got an evergreen model. You can do A/B split test, trying different things, you know, and you’re gonna try a lot of stuff that doesn’t work, but you’re gonna find some things that work and you’re gonna improve and improve and improve. And when it makes sense for you, you know, when it’s right for you, and you’re doing it for various reasons, yeah, go do that launch. Whether it’s an internal launch, or the type of launch that you were talking about. You know, but that bumps everything, that raises the water level for an existing healthy, you know, client intake funnel. And you already have, just imagine this, I mean, if you have that evergreen system, you have some staff on board. It’s not like one of those, the picture in my mind is either the desert wasteland with the tumbleweed or the office with, you know, where the boiler room was, but like, every, you know, the feds came, and like now there’s nothing in the room. You know, but you’re not going from like basically ghost town to, “gosh we need 200 people in here now to handle all this”.
Alex Nghiem: Yeah, it’s very much a feast or famine thing. And like I said, you know, I think it’s a great model, as long as you understand. And I think, you know, I think there’s too much, like you said, you know, euphoria around it. Does it work? Of course, but you need to know, like you said, you know, that’s one reason why I think we you know, we’re so good, such good friends, and you know, we have such enormous professional respect for each other, there’s a balanced view that quite honestly a lot of people don’t talk about. You know, like I said, I tell people right out the front, if you don’t have a back end, you shouldn’t launch, end of story. You know, for the kind of launch we’re talking about here. Now if you’re doing incrementally that’s different, but for these kind of big solid launches, which everybody loves bragging about those vanity metrics, if you don’t have a back end, you pretty much have no net or very little net, right? And of course, you can’t lease it, you can’t grow a business based on growth, right? You wanna make sure you honor everybody’s [indistinct], or whatever. And at the end of the day as a business owner, you got to deal with what’s left, so you can continue to grow the business. Like you said, the combination is really cool.
Jack Born: You cannot take either optins or gross revenue to the bank. Hey, Alex, great conversation. If you’ve got anything that you feel that we missed, you know, you can add it in now. But also, I wanna give you the opportunity, if you want to tell people what you’re up to now.
Alex Nghiem: Yeah, sure. So they can reach out to me on Facebook, my full name is Alex, last name is spelled, NGHIEM. N as a Nancy. G as in Gary. H, I, E as in Edward. M as a Mary. And then now, Jack, I also mentioned I have a yeah, I have a website that they can download a book that talks about this, about how to create big ticket programs. And that’s at expertriches.com/book. Expertriches.com/book. The reason I think that book will be of great interest to anybody listening to this is because, as we mentioned, one of the best ways to make sure that a launch, evergreen or live or you know, rolling however you wanna do it, that one of the best way to create a massive ROI of your business, is to have a back end, and a back end usually means a big ticket program. And so that book talks a lot about different types of back end programs, and then the pros and cons of each one, and which one is the fit for you know, your situation. So most folks usually default to a coaching program, but that may not always be the best choice. For most folks it is, but I wanted to at least bring it to people’s attention. There are other ways to do it, other than just doing a coaching program.
Jack Born: Very cool. All right, and that was expertriches.com/book. So listen, Alex, I really appreciate you taking the time to share your extensive experience and expertise and wisdom, and really peeling back the curtain so that anyone looking to do a launch has at least all the information to be able to make a decision.
Alex Nghiem: Yep, yep. I enjoyed this conversation, Jack. It was a great pleasure sharing this with your community.