$3.7m for FREE Information? Customer Email And My Reply…

Yesterday, I received an email from a customer who asked an excellent question:

“In researching product topics in my niche I find that there is free information on virtually everything I look for. How can I sell an information product on a topic when the internet already contains that information for free?”

In fact after I replied, I asked if it was ok to publish it here on the GHG blog because I think it is an issue that is well worth getting out in the open.

Kindly he agreed (thank you Pete!) so here it is….

My Reply:

“It’s a very good question. Let me ask you a question to help understand this:

Why would anyone pay for a $7,000 training course on property rental or forex trading when you can learn pretty much the same thing for $9.99 by purchasing a book (by an established millionaire expert) in the local bookstore?

It’s worth taking some time to think about that. The answer mainly is because people pay for the packaging of information rather than the information itself.

The “packaging” can be a step-by-step guide (or “blueprint” – a good word to use!), video series, expert audio interviews, live training session on a webinar or even live event in a hotel.

Let me give you an example (the best one I can think of off the top of my head right now):

You can learn how to do *anything* in Microsoft Excel by searching the free help files or elsewhere on the web.

But because this information has been repackaged into a step-by-step system the author of this information product has made a nice slice of the $3.7 million that it has generated in revenue (37,956 customers x $99). Check it out here: https://www.udemy.com/excel-tutorial/

So yes you need good information but the real value is mainly in the packaging!”

So that’s my take on this question in a nutshell. But what do you think? Please Tweet/Like if you found this helpful and let me know your thoughts or follow up questions below – I’ll reply personally to you… 🙂

43 Responses to $3.7m for FREE Information? Customer Email And My Reply…

  1. charles June 13, 2013 at 1:49 pm #

    gr8 response Rob

  2. Karen Skehel June 13, 2013 at 2:12 pm #

    There is a common behavioural trait I have noticed amongst my clients and they are no different from anyone else: The more we pay for something the better we think it is and the more we are invested in getting value from the product and implementing what we learn. When people pay for coaching, they also have a real live human being holding them accountable which is what I do for my clients.

    • Rob June 13, 2013 at 4:21 pm #

      Hi Karen,

      Very interesting to hear your view on this from the perspective of a coach. I agree: I think higher prices often make people consume and use the information plus this attracts higher quality more serious people.

      Cheers – Rob

  3. John Banks June 13, 2013 at 2:18 pm #

    Agreed – it has to come with the delivery of the product. Like you say, a video or audio series for example. I personally am a fan of the “over the shoulder” video products and this is what I have made and sold in the past. Sure – people could probably find hardback books on it (although i am not so sure actually….?) but would it be specific enough? Probably not….

    People also buy into the individual lets not forget – we become accustom to peoples writing styles and deliveries. This too is a contributing factor is us purchasing online products.

    Lets not forget too that it is instantly available.

    Regards,
    John

    • Rob June 13, 2013 at 4:22 pm #

      Hi John,

      All very good points – thanks for the input, always good to get your input 🙂

      Cheers!

      Rob.

  4. Erwin June 13, 2013 at 2:19 pm #

    Hi everyone,

    yes it is a great question and good answer Rob. We are lazy and need everything in a great and easy way. So if it is in a beautiful pacage we are more likely to buy it even if somewhere else it is for free but hard to find and not in a step by step guide.

    I wish you all a great day. And see you on top.

    Erwin.

    • Rob June 13, 2013 at 4:18 pm #

      Hi Erwin,

      Thanks for your input and a good point there. I think even if people aren’t lazy the same arguments we are using here apply.

      Cheers, Rob.

  5. Jennifer June 13, 2013 at 2:20 pm #

    Hi Rob

    I think you make an excellent point here especially with regard to, for example, spreadsheets – something I personally find very difficult to get my head round! What people will pay good money for is support, step-by-step instructions, blueprints as you say, guidance, mentoring etc etc. Even being ‘pointed in the right direction’. The more information there is available on the net, the harder it is to find the stuff that is most useful to us personally.

    • Rob June 13, 2013 at 4:16 pm #

      Hi Jennifer,

      Great to hear your thoughts on this. Totally agree. The support element is definitely a big one too – something you can’t get from a free eBook or Wikipedia of course!

      Cheers,

      Rob

  6. Ian Muir June 13, 2013 at 2:23 pm #

    Spot on Rob. Its also because the packaged product is from someone they think they “know” and trust, & perceived expertise rather than from an impersonal book.

    They also feel reassured that they will get follow-up support. This is SO important IMHO. Buyers are insecure.

    My business is property & I see it all the time. People trust the “gurus” but in many cases they know LESS than the writers of specialised books.

    • Rob June 13, 2013 at 4:14 pm #

      Hi Ian,

      Good point and thanks for commenting. The big people on stage, radio or TV are usually not the best people in their profession. I am reluctant to mention names in public but there are many property experts, financial experts and doctors on TV shows. They all have massive followings but it doesn’t mean they are the best in their professions – sometimes we forget this I think!

      Cheers, Rob

  7. Mark Salmon June 13, 2013 at 2:43 pm #

    Hi Rob,

    The other thing is that each of us is unique in their life experience, skills, insights etc and we can each bring that unique point of differentiation to our products. I’m willing to bet that, given the same information, we would each produce an entirely different product.

    (Great to meet you at Alex Jeffreys Live by the way – I told you I read all your stuff!)

    kind regards

    Mark

    • Rob June 13, 2013 at 4:10 pm #

      Hi Mark,

      Great to see you here on the blog and it was nice to meet you too 🙂

      You make a very solid point, people prefer different styles and personalities, whether it’s the guitar, Excel teaching or web-business stuff!

      Cheers,

      Rob

  8. Michael Gorman June 13, 2013 at 2:50 pm #

    I think you are absolutely right Rob. I would add that the packaging of information can also be the organization of the information too-you could for instance trawl through Youtube and collect Guitar lessons, if you spend a week every day, you could compile a good course for yourself-but you don’t really know the best sequence, or consecutive order to go in(if you are just starting). An information product can be more useful because it is easier to learn from-whatever the topic. Plus, the trustworthiness of the information can be questionable from Free sources.
    Cheers

    • Rob June 13, 2013 at 4:08 pm #

      Hi Michael,

      As a guitar player myself I can very much relate to that!

      Good point well made 🙂

      Cheers,

      Rob

  9. Simon Harris June 13, 2013 at 2:55 pm #

    I purchased a book called ‘How To Write Your Will’ for £2.95 in 1970, because I was interested in writing my Will (in the R.A.F. visiting a hot spot where soldiers and airmen were at high risk). By 1986 I had left the Air Force and it occurred to me that no one anywhere among my friends or family seemed to have written their will. In fact hardly anyone anywhere! ‘Just not got around to it’ they would say. I was at a loose end so I decided I would put the Amstrad PC I had been learning Basic on to good use, and write a Willwriting program to help me do it quickly and effortlessly, and then offer to write peoples wills. A year and a hundred or so wills later my accountant said you should franchise this.
    I knew nothing about franchising. So I bought a Franchise magazine for £1.99 and developed a £3,000 franchise package.
    By the end of the first year this, the first ever Willwriting Business and Franchise in the world had sold one hundred franchises, and the price grew to £15,000. That was because people wanted a full ‘uniform’.
    By 1990 we had 500 franchisees spread throughout the UK and had master Franchises in Ireland, Australia, and Canada. Many people, very sensibly, would much rather pay £15,000 to buy a ‘full uniform’, with everything organised and in place, and demonstrably successful – than ‘hope’ they could start their business as I had with a £2.95 book – having to learn each step of the way. Many saw what we were doing and tried that, never to be heard of again.
    Most franchisees were much better Willwriters’ than me because they were patient and concerned for people.
    They could be successful if someone held their hand and showed them how to do it – in their area – advertising in their locality etc. If this same fact did not apply to everything under the sun and people everywhere there would not be a franchise industry. But there is, and it is huge. You do not have to be trained by MacDonalds to be able to cook a burger!
    Whatever it is you have to offer, if it is genuinely worthwhile as a product or a business – it need not matter if there are books on the subject, or similar but not so good competitors, (we had 60,000 solicitor competitors!) you must focus on who will want to pay for your product at the price you want and why – and go and get those folk to be your customers.

    • Rob June 13, 2013 at 8:15 pm #

      Hi Simon,

      That’s a fascinating story 🙂

      Thank you very much for taking the time to share it with us and great to see you here on the blog!!!

      All the best,

      Rob

  10. Kirk June 13, 2013 at 2:59 pm #

    I felt that way after purchasing SpyBar. I really thought I was getting something until I realized that I could get most (if not all) of this information by looking at the source code of a website for free! The link information requires a paid subscription to Alexa to get the results I saw in the video! So what was I paying for?

    We pay for convenience and organization as well as repackaging because repackaged products save us time (which equals money … for most of us).
    Time is too critical to waste and it’s worth paying extra when someone has done the dirty work of gathering and organizing the information for us in a pretty package. SpyBar is a pretty package that is convenient and saves me time, even if only a few minutes!

    • Rob June 13, 2013 at 4:07 pm #

      Hi Kirk,

      You’re exactly right: SpyBar is just like this. There isn’t anything that it does which you can’t do for free. But to do it for free involves visiting lots of different websites and entering different information each time. So the value in SpyBar is not that it provides premium/paid information but that all the tasks can be done in 2 seconds with a single click. Some of the sites do have paid subscriptions but also offer free information as well – of course whether to subscribe or not is a personal choice (personally, I don’t but I still use the tool 5-6 times per day).

      Thanks for the comment and input!

      Rob

      • Kirk June 13, 2013 at 4:39 pm #

        Yes, even the subscription services have value … who wants to go searching for links manually? Better yet, who has time? SpyBot is Great!!!

  11. spode June 13, 2013 at 3:49 pm #

    Great info! Yes, this day in age everyone wants everything handed to them on a silver platter. It’s the same as “why do people go out to eat and order a $50 steak when you can have the same thing at home for $10. Because the consumer isn’t doing the work and still gets the product. People don’t care how much things cost these days. They would rather pay for it to have it immediately, than take 4 hours to compile it all for free.

    • Rob June 13, 2013 at 4:02 pm #

      Hi Spode,

      Great analogy – I should have thought of that in my email and post! Thanks for your comment 🙂

      Cheers!

      Rob

  12. Stephanie June 13, 2013 at 4:02 pm #

    Hi Rob,

    That was a very good question and as you say we can all gather the information we want online at no cost and yet we still pay dearly for it!

    When learning something new I think we all like a bit of hand holding, and a step by step plan always makes the process seem easier even if at times it’s not!

    • Rob June 13, 2013 at 8:19 pm #

      Absolutely Stephanie and thank you for taking the time to comment 🙂

      Step-by-step and hand holding means a fast track to achieving our goals which has a lot of value. In this respect it makes sense that we pay for it!

      Cheers,

      Rob

  13. Declan June 13, 2013 at 4:46 pm #

    It’s a very good question – and also a great reply from you Rob.

    The way I see it, is people do not pay for information, rather they pay for transformation.

    If a person scoured the web for info on how to lose weight (for example) they will be met with hundreds of different ways to achieve that goal (information) – now, if I researched this topic extensively and created an information product on the absolute best way to lose weight – and then packaged it into a “to the point” actionable step by step guide that delivers the content in such a way that forces the reader to take action, well now that information becomes (transformational) and well worth the price tag the customer pays for it.

    Sure, information is widely scattered across the web for free – but rarely is that information structured into a step by step actionable and cohesive structure that helps the reader put it to use and see results.

    Just an example.

    I like this post Rob, have a great day.

    Declan.

    • Rob June 13, 2013 at 8:13 pm #

      Hi Declan,

      “Transformational” – That’s an excellent way of putting it.

      Thanks for your thoughts on this 🙂

      Cheers,

      Rob

  14. Trevor June 13, 2013 at 9:48 pm #

    Hi Rob,

    I absolutely agree. ( quite spooky actually, I’m just putting together my next product and make almost an identical point to you in the chapter I’ve just written before jumping on here).

    Yes, anyone can search the Internet for anything but invariably it will take them more time than they have to spare, they will end up with lots of disparate bits of information much of which will contradict each other and they will end up more confused than when they started.

    So, if in their searching they come across your ebook, that is well written, laid out in a clear and easily understandable way and appears to understand their pain and shows promise of easing it, they will grab it with both hands.

    That’s why information has been the number one seller for something like 100 years and probably a lot longer.

    Good post Rob.

    Trevor

    • Rob June 14, 2013 at 4:21 pm #

      Hi Trevor,

      Great to hear from you and excellent point espcially about information being a best seller for so long 🙂

      Thanks for sharing!

      Cheers,

      Rob.

  15. Mike Hardy June 14, 2013 at 10:33 pm #

    I am just starting with all of this so early days as an internet business.
    Everyone seems to have made valid points on this topic. All of this comes down to time management and quick impulses in my experience. As the saying goes ‘ the world is full of experts but do they what they are talking about? It is so easy to be hoodwinked into anything if the gloss is there. Quick and easy but the pooh traps are abundant!
    I get the best results from research and talking to contacts I trust in order to arrive at a point where I become my own expert, whom I trust in!
    Mike

    • Rob June 16, 2013 at 8:15 am #

      Hi Mike,

      Talking to contacts you trust is a massive point here! One of the best things people can do is to network and make friends so this becomes possible. Part of the reason I often bang on about going to live events and meetups… 🙂

      Thanks for your thoughts Mike!

      Cheers,

      rob

  16. Ken June 15, 2013 at 3:29 pm #

    Hi Rob
    A lot of marketers are publishing products which cover items such as website building, squeeze pages, sales pages, email communication, traffic etc. etc.
    Those looking for information may only be interested in one specific aspect of the business but are disappointed to find that the product they buy doesn’t cover this very well. So what do they do?
    Often they empty their pockets by paying over and over again for similar products dispensing the same tired old repeated information but still not finding what they want!
    I personally think that the internet should be scoured for the precise info required and then, all else being acceptable, purchase the product that contains it, so that the complete picture is available at the touch of one or two buttons.

    With respect and regards
    Ken

    • Rob June 16, 2013 at 8:17 am #

      Hi Ken,

      Yes, there so much information so I agree it’s a very good approach to stay as focused as you can.

      Always great to get your input – thanks for commenting!

      All the best,

      Rob

  17. Rod Hoar June 16, 2013 at 11:27 am #

    Hi Rob, I guess it is the old answer of any product is worth what the buyer is willing to pay and others will go that little bit further to research the lowest price possible . It applies to property and almost all goods for sale .Also some people are lazier than others . I have sold photos on Ebay some for 99p others the same for £30 . The value is in the eye of the beholder . Rod

  18. Ben June 24, 2013 at 7:01 am #

    I used to sell an information on eBay for £17.99 on a branded CD and much of the response I got was;

    ‘You can find this info on the internet for free, don’t buy!’

    So I took it off eBay and sold it for £97 from my own website and packaged it as a 6 part training series and delivered it through email and all of a sudden the feedback changed.

    People loved it!

    So yeah, if you structure and package information in an attractive way, it becomes valuable – and by charging higher prices you do in fact get a higher caliber of client.

    Ben

    • Rob June 24, 2013 at 7:05 am #

      Hi Ben,

      That’s very interesting indeed and and a great “case study” to prove the principles we are discussing here. Thank you for sharing!

      Kind regards,

      Rob.

  19. PeterD June 24, 2013 at 7:58 am #

    Hi Rob

    A couple of points. The first is that I believe that much of the “free” information on the Web (your Excel example is a good one) is written by programmers, geeks, and other experts, who assume that their audience have the same knowledge and jargon base that they, themselves, do. I remember when the first edition of Word was issued by Microsoft. The manual started (I kid you not) something like this: “Boot up your system and insert the disk into the A-drive”. For users who were terrified by the very prospect of using a PC at that time, this was seriously disconcerting, their systems were in a state of nervous meltdown, anyway, and the thought of “booting” the computer as a physical release outlet was very appealing !

    Contrast that with the way you teach – which is to assume (without being patronising about it!) that at least some of your students need to be led into new fields of experience on a step-by- baby-step basis. That’s worth paying money for!

    The second point is that a lot of people don’t know the real value of their time. If you’re going to take, say, twelve hours to research the “free” info on any particular topic, or sub-topic, on the Web, and you value your productive time at, say, just $15 an hour, then the “time value” of your research is $180. Most (top-rate) teaching products aimed at both bundling and organising twelve hours worth of research cost way less than that. They filter out the dross, and they generally introduce something new, and insightful, as well. So one needs to weigh up the time value of one’s time against the utility value of what one’s buying.

    Thanks, as always, for your thought-provoking article.

  20. jan schets June 28, 2013 at 11:23 am #

    Hey Rob,

    Great article, thanks for that. I had the exact same questions when I just started out in this business.

    I just couldn’t wrap my head around the fact that people are paying for information that is freely available on the internet, if you know where to look.
    That is mainly because of my background as an IT specialist who learned everything through self-study. IT people are so used to trod through extensive manuals and whitebooks on the internet, it’s like a second nature.

    But I soon learned it is indeed in the packaging and trust a certain seller creates around him. And of course the convenience it creates for a buyer. No need to do research at all, just buy this product!

    Cheers,
    Jan

    PS: I think I missed you on Alex Jeffreys event. Thought I’d met most people at the bar though 🙂

    • Rob July 2, 2013 at 3:31 pm #

      Hi Jan,

      Excellent! Glad you liked this one and thanks for your time in making a comment.

      Cheers, Rob.

      P.S. I didn’t hang around too long at that event but I’m sure we’ll get to meet at another event soon!

  21. Lenin August 1, 2013 at 1:30 pm #

    Hey Rob,

    Very interesting post… After reading it I decided to go to Udemy and take a look at the possibilities it offers, and lo and behold, I realized that you can use it in several ways, even if you want to spread a viral report and target an audience outside the IM world.

    Keep this kind of emails coming.

    Lenin

    • Rob August 1, 2013 at 1:36 pm #

      Hi Lenin,

      Glad you enjoyed this and found it useful. Great to see you here on the blog 🙂

      Cheers,

      Rob

  22. Mikaeri Russell February 11, 2014 at 8:28 am #

    That’s and interesting way of looking at how we get information on the net for free and how it’s packaged..so true and great post Rob

  23. roger July 14, 2016 at 10:44 am #

    Thanks Rob, I think you may have just given me the juice for product #1 !! 🙂

    • Rob July 14, 2016 at 10:58 am #

      Excellent… thanks for your comment Roger 🙂

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