Here’s a Product Launch Cost/Benefit Analysis, Just Look at The ROI

BeProduct Launch Cost/Benefit Analysisnefit of the Doubt

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A lot has been written or said about the value of doing a product launch. But Google as much as you like, there is actually nothing out there that clearly shows how much you could make from your first launch. Not to mention, subsequent launches… In dollars and cents, I mean

 

Well, that is about to change in the interest of transparency. And to clearly show why stacking one product launch on top of another will do things for your business that you may never have fully realized.

 

In this case study, the actually niche is irrelevant. You can change the top line sales figure as you wish but the long term value added to your business will always be phenomenal.

 

So let’s run some numbers…

 

Launch Budget
Notes
Top Line Sales $500,000
Merchant Fees $17,500 4%
#1 Affiliate Commission $200,000 40%
Product Cost $25,000 5%
Server Cost $2,500 1%
Returns $50,000 10%
#2 Bad Debts $25,000 5%
Misc Costs $25,000 5%
Cost of Doing Business $345,000
Gross Profit
$155,000
Launch Management $75,000 15%
Net Profit $80,000
Long Term Value Added
#3 Prospect List Build 10,000
#4 Value per Subscriber $10
#5 New Buyers 1,000
#6 Lifetime Value of each client $500
#7 JV Partner Acquisition 3
#8 JV Partner Value $250,000
#9 Value of Prospect List $100,000
#10 Value of new Clients $500,000
#11 Value of new JV Partners $750,000 3
Value of re-launches $240,000 3
#12 Value of new launch ideas $160,000 2
#13 Momentum $160,000 2
#14 Added Positioning $160,000 2
Longterm Value Added $2,070,000

 

Notes on this product launch cost/benefit analysis case study

#1. Affiliate Commission – This assumes that you have a built a prospect list of your own so that you are not wholly reliant on JV partners to promote your launch

#2. Bad Debts – Offering a multi-pay option means that you may not receive all of the payments due. Having said that, recent testing shows that by offering a multi-pay option you will boost your conversion rate by 3 in some cases.

#3. Prospect List Build – Mailing to a warm and responsive list may increase this number but here we are anticipating that you will be mailing to a list of 50,000 people.

#4. Value per Subscriber – This is set deliberately low but for the sake of this exercise, if you are mailing 50,000 subscribers and your top line sales are $500,000 that implies a value per subscriber of $10

#5. New Buyers – Again this is a low percentage considering the number of people on the mailing list but it’s always better to be conservative when budgeting

#6. Lifetime Value of Each New Client – This has been calculated based on the $500 which is the cost of the original product

#7. JV Partner Acquisition – Just acquiring 3 affiliates from one product launch is not ambitious. No doubt you have quite a few lurking on your list already. They are keeping tabs on you… Just like you should be keeping an eye on them

#8.  JV Partner Value – This is the lifetime value of a partner. Here I am assuming that you will do 3 product launches together.

#9. Value of Prospect list – I have simply multiplied #3 and #4 together here. If your product launch has gone well, even the people on your prospect list will be warm and friendly. Just because they did not buy from you the first time does not mean that they won’t buy from you in the future so keep delivering value and you never know how many will turn into future buyers.

#10. Value of New Clients – Again a simple piece of multiplication achieved by taking the number from #5 and #6 and assuming  that you only manage to sell them one other product of the same value as the original purchase… Not a big ambition

#11. Value of Your New JV Partners – With 3 new partners to promote 3 product launches each for you quickly get a net sales value of $750,000

#12. Value of Re-Launches – I have anticipated that you are only going to do 2 follow up launches of the same product before you introduce a major upgrade and equally only assumed that the 2nd and 3rd time you do a relaunch you will only make the same net return because I have shown figures for ‘momentum’ – #13 – and  ‘added positioning’ seperately

 

What’s pretty clear from running these product launch numbers is that although you ‘only’ make $80,000 on your first launch the potential longterm value going forward is more than 22 times that number. I think that you will agree that that is a stunning value multiple for any small business to achieve. And it all flows from just one launch.

 

Quantifying what a product launch could mean to your business like this really drive the value of stacking one on top of another. Each one feeding off the success of the last. Each one building momentum and each one boosting your positioning even further. And once you have optimized your launch systems toolbox, you will be able to pull it out and use it as often as you like

 

I have only anticipated that from all this money spinning activity, you will come up with just 2 new ideas from which your ROI will not be any more than on your very first product launch… An unlikely scenario if ever I heard one…

 

You may be wondering how much hiring a product launch manager will cost and the quick answer is not as much as you might expect. Our aim is to structure a win-win sort of a deal with clients.  We get paid when you get paid. That is we work on a percentage of the ‘pre-return’s gross’ revenue that your product launch makes. Naturally, you have to pay a fee to get on our calendar. We can only take on 2 or 3 clients per year so our time is valuable and we must know what our schedule is well in advance. It would be unfair on our other clients if we didn’t insist on this. Find out more by booking a free consultation with me now

 

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Rory Ramsden

Specialist focusing on getting new products ready to launch and re-launching ever-green products to the online community. What can a Product launch marketing do for you? - Significantly increase your ROI - Explode the size of both prospects and client email lists - Build strong rapport between your clients and your company - Dramatically increase the number and quality of your JV partners and affiliates - Make your business the 800lbs Gorilla in your market - Leverage your newly found cash flow and positioning to accelerate your growth - Send employee morale soaring to new undreamed of levels To get these benefits, we'll assist you to develop a strategic and tactical plan for your coordinated launch…There are a myriad of tools and tactics to use in an online product launch including - email lists - blogs - surveys - special reports - sales letters - autoresponders - video and audio presentations - webinars - squeeze pages - Social Media - Networking As professional product launch manager, we will help you select the most appropriate for your needs. Remember Product Launches work for all types of products and services, evergreen or new so contact me to find out more +33637500988 Specialties The Launch Systems Toolbox This limited consultancy will assess your state of readiness in 6 key areas. The fee is typically set against our fees for piloting your complete launch. [http://www.prolaunchmanager.com/launch-ready]