Category: Marketing/Business

I first wrote a business plan last year. I used Steve Pavlina’s article To Plan or Not to Plan as a starting point. While I did not have a lot of details, I thought it would help me to focus my energy on the tasks that would help me reach my business goals. Having a plan, even if it is off-target, is better than settling for chaos.

I did not write a 50 or 100 page document. It was short and easy to read. The idea was that it would be something that I could look at periodically to verify that I was on course. It was also meant to be easy to update, and I did update it periodically. The last update, however, was in February.

For months, I have wanted to update this plan. The dates and figures are wrong, especially since I know that I will not accomplish my goal of selling my own game in November. Each aspect of my business plan can get a healthy update of reality. Maybe update isn’t the correct word. Overhaul might be more appropriate. While I would like to say that I had checked it every month, I have not, and I stopped focusing on the things that could help my business. My plan was becoming irrelevant, and for some reason updating it was just a task on my todo list.

I know more now than I did in March, so naturally I am in a better position to address what can go in a business plan. I actually removed a number of items because I realized that to include them would mean that I am giving myself one more responsibility to distract me from making games. I added some more items, such as the fact that I am using Google AdSense and have just signed up as a Barnes & Noble Affiliate, as you can see in the Reading Books in 2006 page. With actual figures, I can project at least some of my income, whereas before I left most of my income and expense fields blank.

I feel much better with an updated plan. I hope that I learn from the past year and do a much better job of making time for my business. If a month goes by and I do not check my plan, it should be an indication that something is wrong. An important purpose of a plan is to tell me what I should be doing at any given moment. If I am not following the plan, then what am I doing instead? Should I be doing it? Sometimes the answer will be yes, but often I can probably find a better way to spend my time.

Thanks to Pag on Games, I found this interesting wiki article called Where the Money Goes.

The article summarizes where the money comes from and goes to for a successful next-gen game. The assumptions are that the game will cost $20 million to develop, and if so, selling only 100,000 units will result in losing over $20 million. On the other hand, if you sell 2 million copies, you can stand to make a lot of money.

The interesting part: “carefully controlling the factors that affect profits can have a big effect on the profitability of a game.” The Dream Scenario demonstrates that adjusting certain costs can result in significant profit potential. While it is a dream scenario, the point is that a lot of money can be thrown away if care isn’t taken.

But what does it mean for an indie developer selling games online? What can an indie do with this information to improve the chances of being successful?

There is no such thing as Markdown Reserve or Wholesale Price, or at least they should be quite negligible. There are other costs, of course, but there is no need to worry about manufacturing the right number of units or liquidating unsold copies, and negotiating royalty rates for consoles isn’t likely to be a possibility for those developers that have a deal with console manufacturers in the first place. Perhaps the cost for using game portals could be substituted for the cost of having a publisher.

Obviously marketing can get quite a bit more focus, and it should. Without retail deals, customers need to find out about your game before they can even think to buy it. If your game was available at the store, you might benefit from impulse purchases, as well as the advertising for just having a box with the game’s name on it on a shelf. Since an indie will most likely sell everything online, there needs to be a way to get in front of more eyeballs.

We can drop the development costs from millions to possibly hundreds or thousands. My own expenses probably won’t exceed a few thousand needed to outsource art and sound to actual artists and composers.

100,000 copies sold would no longer be a catastrophe with those kinds of numbers. In fact, one hundred wouldn’t be too bad either. Also, lifetime sales can actually mean a lifetime as opposed to the months before a game hits the bargain bin and disappears. When talking about copies sold, we’d need to limit the scope to a specific time range, such as a month or a year. Otherwise, it can be difficult to keep things in perspective.

100 units sold over the course of a month would be great for many indies. Over the course of a year, not so much. We’ll use the term catastrophe if those sales were made over the course of an actual lifetime, but even then that game could bring in potential customers for the developer’s next project, which we can hope will take into account the lessons learned from the previous project.

When you think about the numbers in this way, what’s the risk for an indie? I suppose the biggest risk is the time investment. If an indie spends three months on a game that doesn’t sell well, it isn’t as bad as the developer who spent two years. If lost time in development is such a big risk, then I suppose the next biggest focus for an indie are development practices.

Since time is money, we can still ask the money where it is going when talking about what a developer does. How focused is the project? Does the developer spend every waking hour working towards completion of the project, or does he/she manage to work a couple of hours every other month? Is there an opportunity cost for not working on the project, delaying its release and potential sales revenue? Are there development practices that might make the developer more effective? Spending 40 hours making a significant component of a game is fine, but if you can do so in five hours, you can finish the game faster.

Marketing can get the resulting game in front of more potential customers, but an indie may want to invest in learning how to do things more efficiently. The more important the skill, the better the benefit you would receive for improving it.

If I happen to turn on the television early in the morning, I will see an infomercial for Total Gym. Chuck Norris and Christie Brinkley endorse it, as well as Wesley Snipes. It sounds like a great compact setup, and with space in my apartment, I would need to be able to put it away under the bed or in a closet, just as the commercial says. It was one of the features hyped in the infomercial, and it was a selling point I cared about as a potential customer. If I didn’t care about having a huge system of gym equipment out in the middle of my bedroom floor, Total Gym wouldn’t have appealed to me any more than Bowflex or some other system.

I’ve never bought any infomercial product before, let alone exercise equipment, and I’ve learned my lesson about buying something without researching it, so I did some quick searches. I immediately found a summary of all of the reviews out there for home gym systems, and it helped me make my decision not to get the Total Gym, at least not until I determine it really is the best value. I think it sounded too expensive compared to similar systems, and I should be able to find something else. While looking for more opinions, I found a section for Total Gym at infomercialscams.com.

There are only five complaints, and apparently the last two are from October of last year. Generally the complaints are that storage isn’t as easy as the commercial claims. I also didn’t like reading about one customer’s experience with customer service. Then I checked the Defenses. It was there that I read something that made me want to post about it.

From a business point of view, Total Gym has some fanatic supporters. I thought some of them were jerks, making fun of the people who would complain about things like getting hit in the head or almost getting their fingers cut off while putting it away. Seriously! Someone actually loves the system enough to say that you can get badly hurt, but you can get badly hurt doing other things, too. Someone else referred to the complainers in derogatory terms. Tear down those who would dare to complain against this great product! It’s like listening to talk radio!

But guess who ruins it? Guess who ruins any kind of good opinion I can have about the company? Jeremy.

Jeremy makes it sound like he works for Total Gym, and while I can’t claim he DOES, it does NOT matter what I think as I write this post. What matters is that potential Total Gym customers might read what he has to say and assume that he DOES represent Total Gym. Perception matters, and Jeremy has basically made Total Gym out to be uncaring towards just those people who would most likely want to be customers.

there are low end retail versions for those of you too out of shape to pick up a 67 pound total gym.

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you are the same type of people who sue mcdonalds for serving you fattening food or coffee that is too hot. stop blaming are quality construcion on your inability to safely follow directions in the first 10 minutes of the instructional video.The system practically walks itself out for your set up and folds up just as easily if you do it the right way.

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What do we have to do? Come to your house and lift you onto the machine? Grow up and find a real problem with this produt before you try to degrade it for everyone else.

I can lift 67 lbs, but I wouldn’t claim that doing so is as easy as letting the weight walk itself. I don’t have anything to go by but what the users have said, and even the defenders will argue that it can be dangerous and isn’t as easy to put away as the infomercial would have you believe. One of the complaints was about the hassle the customer had when trying to get the money back after returning the equipment. Jeremy just makes it more believable that no one at the company cares about you past your wallet.

Who is Jeremy? He could be anyone. He could be a C-level employee, he could be in sales, he could be in support. It doesn’t matter. When he wrote what he did, it was the same as if Total Gym wrote it. at least as far as potential customers are concerned. Chuck Norris might have persuaded someone to want to buy the system, but whoever Jeremy is, he is making it difficult for someone to justify giving money to the company.

If your entire experience with Total Gym is learning that your friend had been hurt or complained about the weight of the “easy” system, the last thing you want to know is that Total Gym itself is blasting your friend for being lazy and whining. Perception matters.

It is why visiting certain fast food restaurants or grocery stores is always weird. There can be pictures of smiling employees somewhere on the wall, but if the actual employees are mindlessly going through the motions, asking the required-for-customer-service question “How are you today?” without caring about your answer, it’s weird. Who wants to go there? Who WANTS to go there? If you perceive that an employee doesn’t care about you, it’s as good as believing that the company doesn’t care about you. The management can be happy and the CEO can talk about great customer service, but if the front lines of the company aren’t acting like the representatives they should, who would want to give money to that company?

If your business interacts with customers in any way, you need to ensure that your business presents itself the way you want customers to see it. If you respond to an email from a customer, make the effort to ensure that the receiver will not have to wonder if you are professional enough to be sell anything. Does your website have misspellings and grammatical mistakes? Can someone find a Jeremy representing you out on other websites? Are YOU a Jeremy, sabotaging your own image? Drop your pride, stop trying to prove that you are right, and let your customers know that you care. If your customer doesn’t know you care, you might as well not.

Perception matters. Is there anything your company is doing that might be scaring customers away?