What is a Product Splinter? (HINT: It’s an Easy Way For You to Acquire New Clients)
"You can observe a lot just by watching.” – Yogi Berra
I recently re-watched the “Wolf of Wall Street.”
The first time I watched it my reaction was “Pretty good, a very over-the-top story.”
However, this time I saw it in a different light: while it’s absolutely not a model for any business to follow from an ethics perspective, it was powerful and inspirational from a sales and money-making point of view.
After all, good, honest people can learn a lot of practical things from criminals.
I know that sounds weird and ironic, right? But it's true, and I'll give you a great example in a minute...
By the way, if you’re not familiar with the story, the movie is the true story of how one Wall St. broker built a mini empire knowingly selling junk stocks to investors and reaping huge profits in commissions.
The scenes where the main character is making sales pitches are the most fascinating.
For instance, in one scene, Jordan Belforte (Leo Dicaprio’s character), is teaching his newly formed sales team about the sales script he’s put together. (The full video of this scene is embedded below—NSFW)
Jordan tells them about a common objection people have before buying. To paraphrase the scene:
The customer being pitched responds: “Uh I don’t know, I really have to give it some thought. I have to talk to my wife about it. Can I call you back?”
{ scene cuts back to Jordan teaching his team }
Jordan says: “They don’t know right? They have to talk to their wives, they gotta talk to the tooth fairy – point is, it doesn’t matter. The only real objection that they have is that they don’t trust you guys.”
This is a nearly universal objection that people have whenever it comes time to buy.
I have it, you have it, we’re all skeptical. It’s part of human nature to make decisions out of fear—specifically, the fear of loss.
We’re all afraid. Afraid of lost time, lost money, lost prestige in the eyes of others—you know what I’m saying.
This is a real problem for you, Mr. or Ms. Business owner. Because this objection is where the majority of businesses lose the sale.
They lose the sale because they’re not prepared with a strategy to deal with this type of objection where the client is indirectly saying,
“Hey, I’m afraid to buy because I don’t trust you.”
So what’s the solution?
Enter: The Product Splinter.
The product splinter is a low-risk way for businesses to acquire new customers. It’s low-risk because the price of the offer is significantly lower in comparison to your core offer, though the value delivered is less too.
In other words, let’s say your core offer is a $100 purchase of a e-course that shows people how to get a 4-week, all-inclusive, expenses paid vacation from your 9-5 job. In this case you can offer a $1 report showing people one key tip along with a case study on how to get the end result they want.
So what’s the point of a product splinter? The point is that it is usually easier to sell to an existing client than it is to someone who has never bought from you before.
According to research published in the book Marketing Metrics, it’s about 50% easier to sell to an existing customer than to acquire a new one.
Plus, we also know from the Power Curve rule (as discussed in Perry Marshall’s book, 80/20 Sales & Marketing) that as the price of anything approaches $0 in a market, the number of people willing to buy that product increases exponentially.
So with a product splinter, all we’re doing is tearing off a little piece of value from the core offer and giving it to the client at a price that’s much more affordable.
For instance, if you didn’t know me, and I called you pitching a $5,000 marketing solution vs. a $500 one – which are you more likely to buy—even if you ultimately wanted the $5,000 core offer?
This was the strategy pursued by Jordan Belforte and his team in the 90s—an incredibly practical sales process innovation learned from an incredibly predatory company.
In the movie, here’s how the sales team applied the product splinter concept:
- Offer new clients trusted-name stock investments to start (IBM, Disney, AT&T)
- The amount requested for an initial investment was always a fraction of what their core offer would be later on. Again, the idea was a gain trust via a small, low risk initial investment.
- Later, make and close on the core offer, which would require a substantially larger investment.
In real-life, here’s how you can apply this in an ethical way to grow your sales and acquire new client for less:
- Split off a “piece of value” directly related to your core offer.
- Make sure that it is its own separate offer and that you charge something for it.
- Immediately offer to upsell on the core offer after the “slice of value” for the initial purchase decision is made. If the core offer isn’t immediately taken, follow-up later on and offer it again.
To give you more reasons for how effective this can be, listen to what another successful marketer had to say about the product splinter tactic.
“We’ve found that on average someone who buys our product splinter for $9 is about 10X more likely to buy our core offer later on.” – Ryan Deiss, Founder, DigitalMarketer & SurvivalLife.com
And in case you don't know him, Ryan has started several multi-million dollar web properties like those named above. So I'd say he's an authority on this topic.
How to Create a Product Splinter If Your Core Offer is an Info Product
I recently met with a friend of mine and fellow Mastermind member, Brennan Dunn. Brennan is currently working to increase conversions for his online course at DoubleYourFreelancing.com.
I recommended this strategy to him the last time our group met. Here’s how it would work for his info product:
- His core offer is several hundred dollars.
- A product splinter can be anything from $1 to $50
- In Brennan’s case he does not want to devalue of his core offer by offering something seen as cheap, which makes sense. For this reason, a $50 product splinter makes sense.
- But what to offer? Well, since I’m familiar with some of his course material, I’d recommend he splinter off his Proposal Template with an example or two of how to implement it. Once implemented into the sales process, the template is designed to instantly increase the buy-rate.
- How should it be positioned? It should be positioned as something that will pay for itself in 1 hour or less of additional billable work. Alternatively, he could position it as something that will pay for itself easily 50x over with just one project sale which would be a true statement if we assume the minimum project size is a couple thousand dollars in revenue.
The trick is to choose the right portion of your core offer to split off. It needs to be able to stand on its own, yet at the same time be relevant and directly related to the core offer.
If you run a service business, you might be saying at this point:
“Yeah Matt, I get it, sounds all well and good. BUT I run a service business and this concept doesn’t make sense for me.”
That’s a great point, but it is not a true statement and I’ll explain why below.
How to Apply the Product Splinter Concept to a Service Business Model
Introducing, the “Service Slice.” And yes, I just invented that name for it.
This is the same exact concept of as a product splinter. The only difference is that the value is provided in the form of a small service delivered to the client, which has that element of low perceived risk.
I’ll illustrate with two examples from our own business, Growbo…
Example #1:
Let’s say that you want to work with Growbo and you’re interested in our web marketing funnel services.
After we understand a little bit about your business and if we’re a fit for helping you achieve your goals, we would then recommend that we do a Project Roadmap. This includes us doing a deep dive on your business model, your target market, your positioning to that market, web conversion goals, risks, recommendations, project scope, and more. In other words, the Project Roadmap would be our blueprint for your entire project and show you how to get it done the right way.
For this, we charge a small fee which can later be applied towards the total project budget.
We do this for three important reasons:
- Anyone who isn’t serious about working with us and just wants to “kick the tires” will not buy the Roadmap.
- We position ourselves as professionals and we don’t give away our expertise and time for free.
- Finally, we know from studying a number of other types of sales funnels that if someone commits to spending something with us – even if it’s a small amount – the likelihood of us working together on that project is significantly higher. This is because there’s a mental threshold that’s crossed in the client’s mind when we exchange their money for our value PLUS for $200, there’s not much risk in his eyes compared to spending 5-50X that amount.
The Project Roadmap is an example of a service slice for these reasons.
Example #2
Right now at Growbo, we’re hard at work on some “project acceleration software” that will streamline and productize our service experience for clients.
Here’s a quick video preview:
A big part of our strategy with introducing this into our sales funnel is to not just give clients an even better, more transparent experience. The goal to also make it easier to sample our services with little to no risk i.e. the product splinter concept.
In other words, before the end of this year a client will be able to come to the Growbo.com website and buy one of our “service slices.”
Here are a few examples of the types of “slices” we might provide:
- Custom Exit Detection Pop-up design and implementation on Wordpress
- Retargeting Ad designs set
- Setup, install and rollout LeadPages.net on Wordpress
- Implement sales funnel goal tracking in Google Analytics
- Call-to-Action button variation design
- Individual landing page design
All of these services would be significantly less than our core offers and work as a nice stepping stone for clients who want to test-drive our done-for-your web marketing services.
Using this product splinter technique, we’re excited to grow our market appeal and conversion rates.
And you should be excited too because a basic product splinter won’t take you much time or energy to get setup.
Conclusion
Interested in taking our marketing services for a test drive? You can click here now to learn how we can help you and your business create a high-converting sales funnel.
- Yes, you can learn a lot about how to sell and market effectively from convicted criminals like Jordan Belfort. Obviously though, leave out the unethical and illegal elements.
- The Product Splinter is a “slice of value” that you charge for which is directly related to your core offer.
- You can use it to grow your revenue and increase conversions on your core offers with info products, SaaS products, as well as with a service business.
- In a service business, it’s an easy way for you to filter out non-serious clients, as well as acquire more clients who might see your core offer as “too risky” from a financial perspective. The Product Splinter provides these clients an easy “stepping stone” to sample your services.
What type of product splinter will you create for your business? Leave a comment below and let me know.
If you already have one, post a link to it as an example below.
Finally, if you enjoyed this article, please consider sharing it on LinkedIn, Facebook, Twitter, and Google+ for the benefit of others.
