The CEO Refresher Websites for Professionals
Take control of your online presence
with your own professional website!

How to Determine Whether You Have a Winner or a Loser Before You Invest a Dime in Product Development
by Dominic Wright


Dear Fellow Entrepreneur,

Rich people have one secret.

They do not invest money before they know that invested money will make them more money in return.

In this article, I am going to show you how to precisely determine if your campaign will be a success before you invest any money in the development of your new product. And exactly how much profit you should expect.

…precise up to one decimal point.

If you’ve read my last article, I have revealed to you the secret of successful advertising. It is in using scientific ads that are written using years-tested response-boosting concepts.

These ads are called direct-response advertisements.

One of the key strengths in direct-response advertising is that you can measure exactly what kind of response you are getting (or not getting) and calculate precisely how profitable each campaign is. And that’s where my strategy comes into play…

I’ve seen dozens of entrepreneurs doing good campaigns one after another and then lose almost all of that money on one product launch that fails miserably.

And that failure has a name…

It is not-testing.

The market is too complex, too saturated for one person, no matter how smart he is, to predict if he has a winner or money-burner. Instead, smart entrepreneurs test before making any serious investments.


Let me show you. A few months ago, a client of mine, an owner of a big Ukrainian software company, contacted me to create a campaign for his two new products. When I asked him if he had tested the market, he said: “yes”. Then I asked: “how?” and he replied: “We asked a  few of our clients what they think about it”… and that was it.

This client has invested over $500,000 in development of each product, only to risk a huge loss if the market shows no interest for the product.

When client contacted me, his products were about 80% done, but he wanted to wait until they were complete before creating a campaign. Instead, I suggested that he first test the market and find out if his project was profitable or not.

Although 80% done, testing, even at this late point, could save him $100,000 on each product if it shows as a failure.

He agreed.

Less than twenty days later, we realized that one product was a total disaster. Although my advertisement was more than breaking even for him, he had no chance in continuing the promotion as the biggest newspapers, which he believed were right for his promotion, were making a loss.

On the other hand, his other product was much, much more successful…

Actually, it was a winner from the start.

In one media, he was better than breaking even, in another, he was better than DOUBLING the advertisement costs… and in one… after one little “tweak” to his ad, we managed to get a ROI of 4.76% on his full page ads. He is currently buying as much ad space as he can get in those medias.
Had he tested a year ago, he would have saved himself a half million dollars that he spent on product that is hard to make profit on and invest those resources into his winning product. Yes, he will make a profit even on this loser thanks to the good ad and smart strategy, but he would definitely decide to save the efforts if he knew it is such a hard sell and focus on his winning product instead.

And that’s what I suggest to you.

Do not waste a single dime into product development, instead…

Test The Idea – Not The Product

When I had decided to launch a weight-loss direct mail campaign in the US, I had no product and no market experience whatsoever. Instead I had a good story to tell.

I had a $7,247,028 big story to tell.

I’ve identified magazines, lists and medias that have access to my targeted clients. And I was ready for some hard work. And not one to develop a product. Instead, one to develop an advertisement.
It took me three weeks before the ad was ready for testing. I took small samples of direct-mail lists and quarter-page lead generation ads to test the headline and the interest… Less than a month later I had very precise figures. Out of seven different media I tested… six were making a profit, one was breaking even and one was quite a bit below the break-even point.

When you get one media that fails miserably and others work well, it is the problem in the media, not in your ad. So now I knew I had a winner.

I was ready for the next step. Product development?

Well, not yet.

FREE Product Development

First I had to pre-sell some products in order to develop a product without investing my own money.

Yes, I started to look for the-best resources and experts when it came to weight-loss, talked with gurus in the field and did some research, but I actually didn’t pay a cent for product development yet.

I ran an ad in the best pulling media from my previous test, it was a bi-monthly diet magazine. The purpose of my ad launch was not primarily to get some money for product development, although it is a nice reason as well, but to make SURE I had a winner.

Let me explain.

First I launched in eight different media, lead-generation ads… those are ads that are offering some free information (like a free report in this case) in exchange for their mailing address and a phone number.

I ran that because it required less media space, it was cheaper and I had an opportunity to test 8 different media for the price of one full-page ad.

Once I knew the market was hot and they are responding to my lead-gen ads, I had to test the actual product itself so I ran one ad, just to see if I can manage a break-even.

At this point, break even is more than fine with me. While I am developing a product, I’ll have a plenty of time to “tweak” the ad for better response.

In the ad I wrote it is a “pre-order” so customers knew they will have to wait at least 2 months before they get their package. This decreases response heavily so even a little-below break-even point would be a good result for me.

The result – break even. For $15,000 ad I earned about $15,200.

Although $200 is not the profit I was expecting from this venture, knowing from experience that pre-launches like that decrease the response and that we have yet to test the headlines… and make ad improvements, I was happy enough.

Long story short, when this supplement package was introduced to the market I had to make one tweak in my approach… I had to make it more believable and more limited (creating urgency).

After some consultation with a supplement manufacturer, I had found out that one really helpful sea algae is growing only 3 months a year and it is hard to get in the off-season. So I decided to put this helpful algae in the mix. It has increased the production price just slightly (maybe 15 cents per bottle) and I had a story to tell… why they should order now.

Now I had a winner.

The same ad that was breaking even two months ago, now was making $10,000 in profit.

Direct mail campaigns were making me an average $400 in profit per thousand mailed. Universe (total list count) was about 2.5 million. Plus I had magazines.

In total, within just eight months from the initial idea, this campaign has generated $7.2 million in profits. And the biggest profit (more than half of that) was generated after I added one line in the advertisement. A line responsible for more-than-doubling the profits without any additional advertising investment.

I’ll tell you about it in my next article showing you how to get the max value out of your customers while keeping them happier. One concept that requires no time and no additional investments. So stay tuned.

For marketing that makes fortunes ...


The Author

Dominic Wright is cited by many independent researchers as the most effective advertisement writer you could hire when it comes to direct-marketing promotions. This best selling author and consultant has no agency experience whatsoever. He started as an entrepreneur. Paying out of his own pocket, every marketing mistake forced him to quickly advance in his career and become one of the highest-paid advertisement writers today. Dominic is famous for his bold offers like "I'll outpull your best ad by at least 10% or you pay me nothing". He can be reached at
Many more articles in Marketing Insight in The CEO Refresher Archives
The CEO Refresher

Copyright 2009 by Dominic Wright. All rights reserved.

Current Issue - Archives - CEO Links - News - Conferences - Recommended Reading

Refresher Publications