Articles and Advice

Harnessing The Hype: Why You Can’t Ignore The Power of Pre-sales

Think of Apple and you think of a company that excels in delivering innovative tech devices. But what Apple does even better is generate hype. You know that frenzy of anticipation that’s generated whenever a new Apple product is announced? When the release of the iPhone6 was announced, Apple generated 4 million pre-orders in 24 hours. Not a bad way to generate some early cash flow.

Tesla took a leaf out of Apple’s book when it recently announced pre-orders for the new Tesla Model 3. The Model 3 is dubbed the ’everyman’ vehicle and is a far cry from Tesla’s earlier Roadster and Model S models, which retailed for US$109,000 and US$70,000 respectively. By putting down a $1,000 deposit, eager fans could secure their very own Model 3 when it becomes available in 2017. With a luxurious, sleek look, impressive battery performance, and a huge marketing campaign, Tesla’s pre-sales announcement was met with the kind of hype that would make Apple proud. 400,000 people handed over $1,000 to reserve their very own piece of electric car innovation. Not bad when you consider that most customers had not even seen the vehicle, let alone taken it for a test drive.

So, let’s do the maths. The vehicle will sell for US$35,000 to US$42,000. That should see Tesla’s projected sales hit US$15 billion. Pre-sales payments alone have generated US$400 million in revenue and have seen the company achieve a $25 billion valuation. Tesla has effectively created a crowd-funded car. Vitally important as it begins mass production of a vehicle that has never been built before.

Is it a testament to the innovation of Tesla? Or is it a testament to the incredible hype the Tesla pre-sales team was able to generate to achieve those orders?

In the world of innovation and startups, pre-sales is a vital strategy. Through early sales, you are able to make people aware of who you are and what you do.

How important are pre-sales?

The benefits of pre-sales go beyond generating early cash flow. Pre-sales validate a product or service to a wide range of stakeholders. Having a few runs on the board will give investors confidence and also help you attract top staff. Pre-sales help to generate a buzz that will raise your brand’s profile in the marketplace and help with ongoing sales. Once you have a gauge on the interest, you are in a better position to manage the risks of over-stocking or under-stocking.

Investors love pre-sales

Investors are understandably wary of a startup that has nothing more than an idea to present. Investors like to see prototypes, but even more, they like to see sales for that prototype. Pre-sales demonstrate that your product or service has validity and saleability. Even if your sales are nowhere near the level of Tesla or Apple, you can at least show that you have something consumers will buy.

Pre-orders offer a firm commitment. A customer saying they are interested in your product is one thing, but getting them to hand over their credit card demonstrates you are onto a winner.

Ways to generate pre-sales

Generate a sense of urgency

At the start, scarcity of your product or service may simply be a symptom of early days and a lack of resources. But it can be used to your advantage to help generate a sense of urgency. People love a sense of exclusivity.

Leverage social media

Get the product endorsed by the right people online. By allowing access to your product or service via pre-sales, you can generate online testimonials and discussions in the very early days. If there are opportunities to create a community of customers online, or customer support forums, this will also help to leverage social media channels.

Don’t forget who’s most important

Yes, your new product or idea may involve cutting edge technology that you sweated over for years. But that kind of detail is much more important to you than it is to your customer. When launching your product for pre-sales, make sure it’s all about the customer. Showing how a product or service will make the customer’s life better is something that Apple has well and truly mastered.

Get industry leaders on onboard, and get them onboard early

Get industry experts and thought leaders writing and blogging about your product before launch. It’s a great way to add further validation to your brand and help grow momentum.

Make it an Event

Take a leaf out of Steve Jobs’ book and make the launch an event (with a capital E). If you want to make an impact, you’re going to have to do more than put out a press release. Celebrate the event and make it the kind of party people want to come to.


Often, pre-orders are an over-looked part of a startup’s launch strategy.

If you can get your pricing right and present a market-ready product in the early days, then you have created a solid base for launch. And if your startup doesn’t sell a physical product, get customers to sign up to a database to register their interest. Build enthusiasm and harness it.

South Inc. has worked with many clients to devise marketing and launch strategies. Recognising who your market is and who will be your first buyers and securing their support is an essential step in the business incubation and acceleration process!!
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