Episode 112: How to Optimize Products
Summary
Nick and Kai work through when to optimize an existing product versus build a new one, with funnel metrics and customer feedback as the deciding signals. They cover how to spot what inside a product needs work, and the tradeoffs between revising the main material, adding bonuses, or launching a related lower-priced product.
Highlights
- Kai prioritizes optimization by funnel drop-off: wherever conversion falls relative to surrounding steps is where to put effort first, not where it’s already performing well.
- Nick lists what’s optimizable in any product: content, the launch email sequence, marketing copy, and positioning, for example, narrowing ‘e-commerce course’ to ‘Shopify course’.
- Nick’s signal for a working flywheel is that you’re making more than you put in, counting both ad spend and the time spent on updates. At that point, figure out how to ramp up traffic and expand.
- Nick calls post-purchase surveys his primary tool for finding gaps inside a product. Ask buyers what value they got and what’s missing, then update accordingly.
- Kai separates the main product material from bonuses deliberately. Bonuses are easier to pull out and reuse across future products; revising the main material is more costly and harder to graft on later.
- Nick’s second edition of Cadence and Sling took two years because changing one thing cascaded into a full rewrite that doubled the book’s length.
- Kai names ‘product drift’ as the gap between what a product teaches and what buyers now need. Buyer feedback that material feels dated is the clearest signal an update is required.
Read the transcript
One of the questions that I often think about when it comes to products is how much time should be spent optimizing an existing product, like an ebook or a video course you put out, and how much time should be spent Creating a new product, whether it’s more important to create a version two and a version three and have updates coming out for something that already exists, or You should forge ahead and create a new product out there. And there’s not a lot of information out there on optimizing products, just like there’s not a lot of information out there on Marketing a podcast after you launch. There’s a ton on how to create a product and launch a product, but there’s not a lot about: hey, you have a thing. What are you supposed to do to take it to the next level? So, this is an episode for the two of us just to dive into how we’ve optimized products in the past and what to think about when you do it.
Let’s talk about the parameters of a product that you can optimize. The content, obviously. The launch campaign. And that can involve everything from the criteria that you use to qualify leads on an email list to the actual campaign itself. You can optimize the marketing copy for it, like on the actual marketing page. You can even optimize the positioning. So you can narrow its focus and say this isn’t just an e-commerce course, but this is a Shopify course. Something like that. Those are the levers you kind of have to pull, right? And there are other things that are like branding or like Extra content, collateral, stuff like that. But they all kind of fall into those buckets eventually. You’re either doing the public-facing thing, the thing that gets people to look at the public-facing thing, or the private actual content of the course, the product. And there’s a lot of stuff about optimizing the email sequences for the launch and defining those and trying to figure out ways to improve those. And not a whole lot on like when that’s appropriate. And like why you would want to go about doing that. So let’s talk about the criteria about what when you would want to go about optimizing something and when you would think you’re starting to get diminishing returns on optimization. Because I think correct me if I’m wrong, Kai, but like there’s a lot of times when you can optimize something and it won’t work. And you would think, oh, well, it’s plateaued, or it’s not worth doing, or I don’t know what to do now. And those aren’t helpful, right? Like, I’ve been in that position quite a bit. So, like, how do you know when something has successfully been optimized within an inch of its life?
I don’t know the answer to that question. What I do know is sort of the reverse. I know what to look at. By breaking down what my funnel is, or what that journey from subscriber to they’ve paid me money and now they’re engaging with the product. and looking at the metrics and seeing where there’s a drop-off or where there’s a fall-off point. And from there, we can flip it around and say, well, If the valleys are where we want to focus on optimizing, hey, we have a solid conversion rate up until this point, well, the peaks are where it’s been over-optimized or it’s been optimized already and there’s no value in focusing on it. To jump tracks for a second, we could think about it this way. Let’s say you’re really focused on optimizing your sales process, how you close leads, how you manage your pipeline, and you optimize that to an inch to within an inch of its life, but yet one lead a month. No matter how good your sales process has become, if you don’t have the necessary volume one step before that sales process, the leads coming in. Doesn’t matter how much optimization you do, it won’t have a meaningful difference. And if we look at products, I think we could see the same thing. If you don’t have enough people coming into your email sequence, Well, focusing on the email sequence or the sales page that’s downstream from that email sequence might not be the most valuable thing to focus on. So, for me, it really comes down to looking at the full funnel and seeing, okay. Where is there a drop-off? Where can I see something that is not performing in line with the other elements of this funnel? And If everything seems to be pretty equal in performance, then I’ll start saying, okay, if I could increase any one of these, which one would have the biggest impact on revenue? And I’ll use that as a criteria for where to focus on start optimizing and then apply that first rule again and see: okay, is one of these higher than the rest? What else could I focus on that’s downstream or upstream of it that would make sense to focus on optimizing?
Yeah, basically if something is underperforming and is step on your funnel, and to be abundantly clear, this funnel includes everything from your email list all the way up to conversion. you should be measuring all of those things, right? So click rate, open rate, on the mailing list, on subrate, all those things. But also Click through to the marketing page when it actually launches, and then click from the marketing page to check out, check out to thank you, right? And if it’s failing severely on any of those parts other than the part where they’re taking the money because it’s always going to fail there because people get weird at that point. That’s an opportunity for figuring out what’s wrong and attempting to address it.
I like that you said attempt because it’s all educated guesses. It’s all a hypothesis we’re taking and seeing how the market responds to it. This is part of the reason why I think a lot of the best practices that are out there where the things that are seen as a cargo cultism within launching a product or creating a product, it’s there’s Dogmas that need to be challenged because you can’t simply accept, oh, I see that, you know, product launch formula is the way to go. Let me just take that and use it. Well, it might not be the right thing to use for your audience or for your target market or for this product. All you could do is say, okay, we see what the situation is, we see what the scenario is. Let’s take a hypothesis, test it, and see if it works to improve it or not. If it does, great. Let’s move forward and continue optimizing. If it doesn’t, okay, what’s the next thing?
Yeah. So when everything starts to perform well, you’ll know via few criteria. One of them is obviously that you’re going to be making a lot of money. Great, wonderful. One of them is that you’re going to be making more than you put into it, right? Like both in terms of ad spend and in terms of resources updating and optimizing the thing. When you start to get more money back that you’re putting into it, you have what’s called a flywheel. continue hammering away at that thing. Figure out how to ramp up traffic, figure out how to expand it and grow it. You have something that approaches a successful business, and that is wonderful. Another thing is if you touch a nerf, so if you piss people off. Oh my God, pissing people off. Everybody’s got an opinion and yours is always wrong. So you got to double down on it. It’s going to be wonderful when you double down on your wrong opinions and everyone hates you for it. Because you’re going to find your kindred spirits who think you’re right. It’s going to be great. So pissing people off is a sign that you’re doing something right because you’re touching a nerve. That might not happen on the first try. You might have to. double back. Another thing that will probably is a good tactic is continue providing value, usually for free. The days, if they ever existed, of you just opening the doors and having people stampede through are dead and never coming back. You need to provide value and put as much effort into your free material as your paid material.
No, I agree with that wholeheartedly. So let’s shift the conversation for a second. We’ve been talking about sort of the entire ecosystem from start of the funnel through product, but Let’s shift the conversation for a second just to the product. So you have an existing product. Maybe it’s an e-book you put out, a small mini booklet. Maybe it’s a larger course. Maybe it’s your first product. Maybe it’s your 15th. But you want to optimize it just within the product itself. Let’s talk about that for a second. I’m curious what strategies you use to identify where those optimizations should happen and then how you go about incorporating them.
Post-purchase surveys. My favorite three words. Seriously. I thought it was free unlimited sushi, but no. Post-purchase surveys are basically after somebody has bought a product Sometime after, you ask them what kind of value they’ve gotten out of it and what might be missing. They’ll tell you, you know, like this wasn’t landing in this way or I was hoping I could get this or whatever have you. And that all is extremely useful for figuring out what to do next, because then you update the product and you’re like, there, are you happy? Hopefully, they are.
One way I’ve started thinking about products is as a collection of different sort of tiers or levels of materials. You have the essential material that actually teaches The buyer, what they need to know. And then you have optional or ancillary material that could go above and beyond. It might be bonuses, it might be additional worksheets, it might be additional resources, but It’s been valuable for me to focus on these two different classes of content. There might be, again, the core product and then these bonuses or ancillary content. And as I survey people, as I get feedback on where a product is strong, where a product is weak, what additional questions they have, I’ll start seeing: okay, does this match up with the core product or with the bonuses? Will it increase value to add this as part of the core product as I revise that core product or add it as an additional bonus? And in all honesty, I’m starting to lean more towards Creating it as a bonus or something that’s bundled in with that core product because there’s a lot of value in those bonuses and being able to reuse them. It’s pretty easy to pull them out of one product and say, oh, hey, you know, four of these apply to this new product I’m launching. They’re still valuable to those buyers. It’s not the core product itself, but it adds additional value. So I’m a big fan of identifying these opportunities for optimization within a product. And then figuring out what a bonus would make sense there, what we could add in that would take the product to the next level, but may not alter the core product itself. Am I explaining that? Yeah.
Yeah, that makes a lot of sense. Like, I mean, I don’t think that you should be too conservative on never updating the core product, although it’s a lot easier to create bonuses, right? the gravity of your personal practice is probably going to move much more in the direction of creating bonuses. That said, you’ll kind of know when you bonered up on the The core content, right? Like, you’ll know when you have to add some more core content and update it that way. And it’s, you probably didn’t get it right the first time. And you have to be okay with that. You have to understand, you have to create a framework for the product that allows it to accommodate new content, right? you should be planning for it to grow in the future. That’s a large part of this. And if you didn’t, like, congratulations, now you have way more work on your hands.
Why necessarily more work? I think this is an interesting sort of fork. Why is it necessarily more work to create a new product versus updating the existing product?
Let’s take mine, for example. If I have to update video, I have to get all of the people back in to reshoot the video, right? I have to get the crew. It’s going to be expensive. It’s going to take a lot of time. It’s not going to look the same as the rest of the video. Well, the answer is reshoot the whole course. Well, that’s even more expensive. Or just say, okay, now it’s bonus material. Well, why is it bonus material when it should be core material? People are going to have those kinds of objections, and you’ll know when something’s been grafted on. That’s why the second edition of Cadence and Sling took two years to make. It was because I changed one thing and then found myself rewriting the book wholesale and doubling its length. I think that’s the way to do it right, and with a sense of craft and consideration for your customer. Mm-hmm. Mm-hmm.
Now, I don’t disagree with you there. I’m just thinking through it. There’s so many variables when it comes to this. I mean, one of the ways I could see it going is When you create a new product, it gives you an opportunity blue sky just to create something new, solve a new problem, or solve the same problem in a new way. So let’s use Conversion Rate Academy again as an example. You have that as a video course, and we just discussed the constraints inherent in updating a video course. But you could say, Well, I’m going to launch a new product. What would a $49 book version of this material be like or look like? And you wouldn’t necessarily answer the same questions or solve the same problems in the same way. In that format, but it could be an interesting way to take something that you know is a good product that your target market is buying. And now add a second product to your lineup, getting you to a product ladder or a product orbit where you say, okay, these are related. They both address the same core problem. But they’re different types, they’re different formats. If somebody doesn’t like video, hey, here’s a book. If somebody doesn’t want to spend, you know, three or four figures on the course, they’re able to spend two to three figures on this book, and it gives that natural ladder between Two different product types, but within that same core problem area.
Yeah. But then you’re downgrading to a book and it’s probably not going to generate as much revenue for you, right? Like you need to figure out a way to update the video course, right? Like. Build an SOP for it.
Yes, and no. But one of the things I keep coming back to is there are more people with less money than there are less people with more money. Are we necessarily going to make less money with a lower-priced book? Possibly. Revenue per sale might be lower, but are there more people who are going to be able to buy a $50 book than a $500 video course? Possibly that might take care of some of the difference. And are there people who will first buy the $50 book and then three or six months later say, Okay, I’ve gone through the book, I like the material. This let me build trust. Now I’m ready to buy the $500 video course.
Yeah, yeah. I like this line of thinking, but I would also kind of put a finer point on it by being like, well, if the video course and the book. Let’s assume a weird world wherein they have materially similar content, right? That’s not physically possible because it’s a video course and a book. So false equivalency, a clock, et cetera. But if you are promising like a similar amount of value out of them, do you price the book at $500?
That’s a good question.
I think it’s a genuine question. I think that’s a large part of why people make video courses. It’s because they know that they have significant outsized value. And so they respond by making a giant video course and selling to those payers because the addressable market is fundamentally similar, right? And so those people would have that money. They would think, oh, cool, a bargain. Or they would undervalue you if they saw the $50 book. And that’s my concern with that. And I don’t know There’s no right answer here. I think we’re just kind of batting around some Socratic inquiry about this. But I think that’s something you need to be thinking about when you’re thinking about the longevity and durability of the product you’re making. Because it’s got to have that. You’re going to be in business for longer than six months. Yeah.
Now, and that’s a fascinating point as well. When you create a product, again, the first or the 15th. Does it what sort of longevity are you able to make for that product? There’s always going to be some risk of update or something changing and the material you wrote about or the content you shared no longer applies perfectly, where let’s call this drift, just to have a term for it. So as your product drifts from where it was or from what somebody actually needs, there’s a spectrum of where it no longer has value. If your product has drifted 100% away, it Is no longer valuable at all. If the product is drifted 1% away, it’s still pretty much on point. It might not necessarily need that update there. So I think you’re right to call out longevity and durability. There are things that definitely should be monitored for. I don’t know really of any way to monitor for that aside from feedback from buyers. If buyers are saying, hey, you know what, this content seems a little dated, or these lessons don’t apply anymore, or the ecosystem has changed. that’s a strong sign that you have reached sort of the lifespan of the product and an update is required or an optimization is required. But until you start getting to that feedback point, is there another way to know that an update is necessary?
I think it’s possible to know that an update is necessary by keeping lines of communication open with your customers. Hopefully, it has customers. If it doesn’t have customers, then there’s something wrong with your marketing materials, and you need to update that. But you have to come in knowing that you put out something great and you’re very proud of it, and you’re going to be very hyperbolic about it and you’re marketing copy, but also you know it’s not perfect because you are not perfect and the tech industry is a shifting pile of quicksand. So, what do you do with that? Am I being too glib about it?
I don’t know. No, no. I think it’s a challenging question, and It’s one that naturally comes as you start to create products and optimize those products. And over time, you start to look at it and say, well, what are the best practices I should be following here? Or what is the framework I should be following here? Jumping back a couple of threads, you mentioned the value in coming up with a standard operating procedure or a framework for creating products, and I just want to second that incredibly hard. It’s a very, very valuable step to take if you break down that outline of, okay, a product includes these elements. And then when you’re creating a product, you’re almost able to paint by numbers and say, okay. I need these three bonuses. I need this core material. This is what the core material is like. Essentially, outlining and then writing to that outline, but it makes it a hell of a lot easier to ship a product or ship products consistently.