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You hit the nail on the head with this one. How come all of the junk products like the miracle weight loss pill need a 30 minute infomercial at 3am every morning to sell their product. It certainly isn;t because it is a good product.

This is clearly SethGodin-bait.


:)

I was researching vehicles for a product we made, and on a whim looked at infomercials.

I found out that because infomercials are very effective (low $ per minute rate because it's at odd hours, but higher return on impression) the typical markup for a product sold on an infomercial is at least 4 times the cost per unit. That's a 400% markup.

I have not bought an infomercial product since.

BTW - By vehicles I meant venues. Sorry, that probably made it really confusing.

Right on target...as usual!

Ooh, "anti-marketing dollar. That's a good market".

I'll tell my people to contact your people about exciting advertising opportunities on your blog.

hi there! I like the design of your blog.. anyway, i just stubled upon here from google.. you draw well!

"Purple Cow".

Time Shares!

Its not that simple :)

You never see advertisements for Ferraris...

This blog is right where the curve hits the x-axis. I love it.

I guess that's why I never see advertisements for Boons Farm wine.

I've noticed this a lot with movie releases.

Oh, thanks a lot. Just throw the secret right out there for everbody.

Warranty v. Quality also works

just ask Billy Mays

Brilliant. And so true!

Its cute, I like it, but it is absolute nonsense. Plenty of companies make quality products but need advertising and marketing to explain and persuade busy customers to buy or use. Sure word of mouth is a massive driver but advertising and word of mouth live side by side, they don't replace each other. Sales = f(advertising, wom, price, availability etc.) finding the right balance to optimise sales is the key ...

I wish this were actually true, some products are quality or gold, and hardly anyone hears about it. I agree with simon. Though, perhaps all that you could do to fix this were to make it a much sharper curve.

Surely with a comment like that, Simon should have been Siimon

The first thing that came to mind when I read this was Nalgene water bottles. We had a discussion on this very topic (long before all the outdoor/camping stores starting making their own): Everyone had one, but no one ever saw a single ad for it. There was no need. Word got around that these things were awesome 99% indestructable (we tried to destruct it...seriously) containers.
No need for ads.

Ferraris were "advertised" like crazy for decades via Motor Racing, till they became legendary. Still going at it in Formula 1, too, by the way. So, there is advertising, and there is advertising...

Same logic applies to websites. :)

To Simon -

This is not nonsense. Note that the curve never hits either axis. Which means you never completely replace advertising with word-of-mouth, or vice-versa.

And you never have a completely perfect product, or completely trashy one.

Very good graph.

Other clarifying point - perhaps instead of "Quality" it should be "Perceived Quality".

So with the Ferrari example, the product was always great, but people didn't know that at first.

So heavy advertising and product interaction was necessary, to demonstrate the quality.

Over time, the perceived value became really high. While they still advertise a lot, their word-of-mouth is probably through the roof.

Same with Harley-Davidson. :)

"Warranty vs Quality"
Wouldn't work as well.

In developing country, one case is Indonesia. There isn't such a thing called Warranty.

Warranty is cost. And in developing country, price war is prevalent, so in order to attract more customer, sell lower than your competitor; in other words, lower cost price than your competitor.

What does this say about the Obama Campaign flooding the airwaves? :-(