The Secret To A Growing Income Stream - Nothing To Do With Cryptos
What I am going to talk about has nothing to do with Cryptos. I just used this picture because it represents money and it exudes wealth!
I was reviewing a product from Clickbank and was intrigued by the philosophy they used to imply it was a secret. When I tell you about it you decide it is really a secret or not.
Micro-Commitment Consistency-Bias Compounding-Revenue Algorithm (MCCA)
Quite a mouthful of words. Right? Those who have reviewed this digital product will know where this term came from.
As crazy as MCCA sounds, I thought the meaning behind this was sufficiently important to discuss it in a blog post.
What do you think this title means?
When I first saw it, I had no clue. After I read the sales pitch, it eventually made sense. I don't think this is any secret as it is being used by many successful entrepreneurs and companies all the time.
Some use it better than others. Netflix, Amazon, and Apple among others, generate billions of dollars in passive income.
The Trade-Off Between A One Time Large Sale And Recurring Small Sales
According to behavioral experts, it is easy to find customers who are willing to make a commitment to part with a small amount of money instead of a large lump sum amount.
For example, if a product cost $1000 the chances that you would open your wallet would be slim.
However, if the cost could be split up into $25 monthly installments, that would be an easier sell. This is what is declined as a Micro-Commitment.
The Consistency Bias is demonstrated by the willingness to make that small payment on a monthly basis.
Compounding comes into focus when a salesperson is successful in attracting more and more customers to part with that $25 monthly payment.
Subscription Example
Taken this a step further. Consider a subscription service that costs $250 annually.
If the customer was given the option of paying $25 a month for 12 months the total cost would be $300.
Clearly, the annual payment of $250 would be the better deal.
However, most people would initially go for the monthly option for many reasons. It appeared more affordable.
And it may be hard to come up with a lump sum of $250 When the customer reached a point when they could afford the $250 annual payment, they could always switch payment plans.
Recurring Income
This is the basis to create a recurring income stream. It is easier to find 1000 customers who are willing to part with $25 a month compared to $1000 a year.
Hence, the foundation of recurring income would be easier to establish. Having a steady, growing stream of customers making those monthly payments is a good thing.
No doubt, there will be some customers who will opt for the annual payment plan, and that is great too.
Can You See Where I Am Heading?
This algorithm is what Wealthy Affiliate has in place in its affiliate program. They are not alone either. There are numerous subscription programs around.
Have you noticed that most software is sold today on a subscription basis? Entities like Microsoft and Adobe had long figured that this MCCA approach works great for them.
As you are building your affiliate marketing business I want to suggest having a mix of products where some are one-time purchases while others are subscription-based.
One-time purchases can qualify in the recurring income category when they are consumables. Like beauty products. In fact, customers who agree to make recurring purchases to make sure they never run out of product are called preferred customers.
Preferred customers are often given a price break in exchange for making that recurring commitment.
Residual Or Passive Income
What I have illustrated above is the basis for a residual income, also called passive income. It is called passive because the sale is made only once, but the income keeps coming in over and over again.
Sure, eventually some customers will end their subscription. By that time there would be a sufficient number of customers in the pipeline to mitigate those losses.
What Are Your Thoughts?
What do you think about this subject matter? Would you lie to be earning income that was passive based on a monthly commitment? If you are, please share what the products are.
Can you figure out what product introduced me to the term MCCA, please let me know in the comments section below if you have?
All the best in your affiliate marketing journey.
Edwin
Recent Comments
18
I know exactly what ClickBank product you are talking about and I do agree that it's not a secret. It's just a fancy name (and a sophisticated sales pitch) that the creator has "invented" to make believe he has found the holy grail for making money online.
Even though the product that you were looking at is worthless (in my opinion - and review for that matter), the analysis that you have just written gives this "MCCA" value! 🙂
I totally agree that recurring income is the way to go when it comes to any kind of business, and recurring revenue provides a baseline of revenue as a starting point for each month. Therefore, financial planning is also a lot easier than one-time sales.
Great article Edwin!
Hello Denis,
They are very skillful in their marketing approach. Most people who are naive will fall for their tactics. That is how they have become very successful.
I find their approach sad since their founded is a very smart guy. Perhaps he is street smart and knows how to trick people into parting with their money.
He preys on a basic human flaw. Want an easy way to make money and feel that others are doing most of the work for you.
It's great for us though since we can show how WA is a far better approach to create a business that can be sustained.
Cheers.
Edwin
That's exactly my sales pitch. I let people know that the product is nothing "new" and that it's just a sales tactic and then redirect them to my WA affiliate link 😉
One-time purchase vs. subscription purchase is an interesting idea. Now to figure out what to offer as a subscription. Any suggestions?
It's always good to see you on here, Edwin. Hope all goes well with you.
Fran
Hi Fran,
Thanks for commenting. I'm working on writing more posts so I don't write here as often.
The obvious one is a WA subscription. Many other courses are offered as a subscription. Software is also sold that way.
Does that help at all?
Cheers.
Edwin
Oh, good idea! I could just put up a little box where they can subscribe, right? Thanks, Edwin.
Was it WA that introduced you to this, Edwin? Many instances, IF I have the money, I will go for the one payment and save a little coin in the future, but I also have MCCAs in place for things like Amazon Prine, etc. Thanks for this instructional post, my friend!
Jeff
Hi Jeff, the product is offered on Clickbank. It’s called Perpetual Income 366. Thanks for the comment.
Edwin
I think you mean Perpetual Income 365, Edwin (unless they've upgraded it by a day since I last looked at it). I have a negative review of it on one of my websites.
Yes, and Yes Phil. I totally agree with you. They prey on people who love it when others promise they will do most of the work for them. How flawed is that?
Cheers.
Edwin
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It is like getting clients, I believe, because it is easier to get 1000 clients who will buy $20 each rather than 1 client who will pay $20,000 .It is also safer. I would rather lose 1 $20 client and still have 999clients than 1 $20,000 client. As long as you are doing right by the customer.
Also with the MCCA customer…my dear old dad used to say b.s. baffles brains. If it can’t be explained clearly and easily then the the big red bs flashing lights should be an indicator of where this is going.
CB should be looking after their clients not their own passive wallet.
Regards
Stephen
P.S. I have warbled on a bit but hopefully it makes sense..
Hi Stephen,
You make perfect sense. In fact, I am having fun with the acronym MCCA in my review post. This company uses a lot of BS that I bring attention to. Kind of fun.
Of course, the punchline will be to invite readers to consider a better option. WA of course voila!
Thanks for commenting.
Edwin