Lately, there have been some rumblings in the internet marketing community about a certain sales model being employed by some very well known marketers. This model is almost universally being viewed by the IM community as "shady" at best. What model? The technical name is a "forced continuity" program. Here’s how it works:
You enter the marketer’s sales funnel through a low priced product or inexpensive trial. When you get to the sales page, you are paying for the product or trial, BUT, there is also some additional information there you must be aware of - the continuity piece. So, what’s the continuity piece? It’s the part where you are also agreeing to a monthly subscription - usually to their printed newsletter, sent by postal mail. Various marketer’s newsletters include CDs or DVDs and the monthly fees range from $9.99 to $97.00 and up. In this recent case, it was Matt Bacak’s launch of his new "retirement" product. He’s offering access to the recordings of his famous, tried and true internet marketing seminar for $1 dollar. People paid $5,500 to attend the seminar in person, so having access to all of the material is clearly worth one measly buck.
And in the wonderful word of marketing, that’s called a "loss leader". Meaning, he’s willing to take a big loss up front, knowing full well that the majority of people unconsciously follow the law of reciprocity. And what a powerful law it is… In other words, he knows that a significant percentage of people who access his seminar, and who receive his newsletter (the 1st one is gratis) will stay subscribed at $29.97 a month - for at least one month. I’m sure the content is great, but the main reason why many people will stay subscribed for at least one billing cycle is to reciprocate Matt’s generosity. After all, they just got access to a $5,500 seminar in it’s entirety for a measly buck. So how is an additional $29.97 going to kill them? They are still waay ahead of the game… And that, my friend, is where the real money is made!
Joel Comm did almost the same thing as Matt just a few days later. Only his loss leader is his recently updated Adsense Secrets ebook - previously sold for $97.00 - now a mere $9.95. And Joel’s newsletter is also $29.97, with the first month free. Now, a lot of people got upset about Matt’s sales model. Originally, I guess it was not readily apparent that the buyer was also commiting to a monthly subscription of $29.97. And some got peeved with Joel’s setup as well. Since then, both Matt and Joel have changed their sales and payment pages to better reflect the ENTIRE commitment of the buyer. In fact, Joel went one step further by adding the newsletter subscription as an optional add-on line item on the payment page. Way to respond to market feedback, Joel! I reviewed both offers. And I saw the built-in forced continuity program in both of them without any trouble.
I bought Joel’s ebook, Adsense Secrets V4 and will wait to see whether his newsletter delivers the value he says it does. If I don’t want to continue with it, I can easily cancel before I am billed. I will probably buy Matt’s package as well. I can’t imagine not being able to extract my dollar’s worth from the info. Same goes with his newsletter, too. I will say I’ve been burned by a forced continuity program before. A couple of months ago, in fact. Not because I didn’t know what I was getting into, but because I was not able to contact the marketer to cancel before I was billed. In fact, of the tens of thousands of dollars I’ve spent online over the years, this was the single worst experience I’ve ever had. The marketer is Nick Marks and I will NEVER do business with him again. I recommend you avoid doing business with him, too.
Initially, I subscribed to his program through his loss leader of a free Rapid Business Growth DVD and printed newsletter. But after receiving the material and reviewing it, I quickly realized it was of poor quality and I didn’t want to continue with the subscription. I spent weeks trying to contact him to cancel - both through the emails he provided for that purpose as well as through his helpdesk. I actually had to Google him to find his helpdesk and when I finally found it, it was broken - and stayed that way for about two weeks. When they finally fixed it, I requested my subscription be canceled and a refund be issued. But all I got was the cancellation. I ended getting billed twice at $48.00 before I finally extricated myself from his organization.
Fortunately, I have an outstanding bank that was kind enough to credit my account with the two charges (under the heading of "fraud"). I sure hope they went after his payment processor to get their funds back, though. So yes, forced continuity programs CAN be a nightmare. But most aren’t. And the fact that some senior internet marketers were upset with these techniques puzzled me quite a bit. I mean, Dan Kennedy, Jay Abraham, Harv Eker and Joe Vitale have such programs, so what’s the big deal? In fact, pretty much all of the biggest of the big names in marketing do. Why the heck not? 1,000 people times $29.95 a month. You do the math. I guess it’s all about ethics. It’s HOW the offer is presented and whether or not there is any fine print or not. But let’s face it, if we fail to read the entire sales agreement, who’s fault is it?
Bottom line, this type of system is perfectly acceptable, proven over time, used by the who’s who of marketing and is extremely profitable. And if we as marketers are planning to use such a model, we must be especially vigilant to ensure our potential customers know exactly what they are paying for and exactly what ELSE they are getting themselves into! Further, we should NEVER rope someone into a forced continuity program and then make it near impossible for them to change their mind and cancel. That’s more like a hostage situation ( I call it financial rape) and is a sure way to have your business crash and burn - fast. Did you catch that, Mr. Marks?