Building the Foundation for Your Online Business Success
Welcome to the latest series from Inside eBiz: Six Steps to Sharing Your Inner Passion with the World.
Making the decision to share what you're passionate about, through your own online business, can be a life-changing moment. Six Steps to Sharing Your Inner Passion with the World takes a look at the foundational steps that will help you achieve personal online business success.
“All desirable things... are desirable either for the pleasure inherent in themselves, or as a means to the promotion of pleasure and the prevention of pain.”
John Stuart Mill
Step 5: Solutions Worth Investing In
In this step, we'll take a look at the importance of providing valuable products and/or services that people in your market want to invest in. You want to provide a solution that satisfies a need they have, moves them along their journey, and gets them closer to their goals.
Note: Hereafter, whenever we use the term “products”, we are referring to both products and services.
I highly recommend that you consider, from the beginning of your business development, some of the different types of products you might be able to offer your prospects.
Then, consider what types of products you might wish to offer in the beginning stages of your business, and what you might want to offer as you develop stronger relationships with your customers as they move further into your sales funnel. (See below for more information about sales funnels.)
Here's some possible income opportunities that are available to an online business:
• Guides and reports
• Video tutorials and courses
• Membership sites
• Affiliate products
• Coaching and consulting
• Advertising and sponsorships
Offer Your Own Products
Although there are affiliate marketing opportunities, Inside eBiz highly recommends that you eventually offer your own products. You can create your products yourself or hire someone else to do it for you. Look to solve the problems of your market and improve upon other products that already exist.
The benefit of creating your own products is that you have more control over their content, price, marketing, and support. And there’s no need to go it alone with your product creation. There are many third-party options such as Elance.com, Guru.com, and oDesk.com to help in the creation of your product ideas.
It's very important to know that for every product you create, you’re creating a business asset, something you own that can potentially help you earn money over the long term. Also, developing your own products can help brand you as an authority in your subject area, which can possibly lead to opportunities like book deals, speaking engagements, partnerships, and better product sales in the future.
When brainstorming about products to develop, make sure to get input from your market—get feedback about what their needs are. As you’ll see in step 6 in this series, there are many ways to tune-in to your audience to help grow your business and give them a great user experience.
Inside eBiz highly recommends business models built around the selling of digital products. Digital products include ebooks, online memberships and courses, software, audio and other products that are easily delivered via ecommerce mechanisms that handle the payment, checkout, and delivery process automatically.
Digital products have many advantages over physical products; they can be sold at higher margins, they require no inventory, they allow for easy and nearly free delivery to almost anywhere in the world, they can be reproduced instantly an unlimited number of times, and they are easier to change and update.
You can make digital product sales and delivery a painless process (both for you and your customers), with third-party tools and resources. This includes payment processing from PayPal and Stripe, to product delivery from tools like Gumroad.com or Easy Digital Downloads for WordPress.
One of the best features of digital products is their ability to provide residual income to your business. Residual income is a way to remove yourself from the following equation:
TIME = MONEY
With residual income, the money you make is no longer tied to the hours you put in to earn it, as it often is with a service-oriented business. With the residual income model, you create something once, and sell it over and over again, potentially selling it for an unlimited amount of time.
If you wanted to, you could set up one digital product, and then move on to create another, developing multiple channels of income that earn revenue for you on an ongoing basis.
Another very good method for creating revenue is by earning affiliate commissions through product recommendations to your market. In this case, the products aren’t your own—they’re products and services from other merchants.
As a knowledgeable person in your niche, it’s likely you are familiar with the most valuable products that are available to benefit your prospects and customers, and you can recommend the best tools for them to accomplish their goals.
When you recommend valuable tools and resources to your market, not only are you helping out your audience, but you’re also potentially earning extra revenue for yourself, without increasing the cost of the product to them. This is essentially a win-win for all parties: you’re able to help out your audience with a valuable recommendation, you feel good about doing so and can also potentially earn a small commission from the merchant, and the product owner gets a new customer.
So when possible, if you feel like you can help your market, let them know about the best tools available that can move them along their journey from where they are to where they want to go.
By the way, another big advantage for digital products is the existing infrastructure for allowing other affiliates to sell your products to their markets. This can be easily set up for you by companies that specialize in affiliate marketing, and gives you a potential sales team to help sell your own products. Also, there’s no risk to you because you don’t need to pay out commissions to your affiliates unless they’re making sales for you.
Sales Funnels and Product Pricing
A sales funnel uses a metaphor of a funnel to represent the process your market goes through, from initial contact to sale. Although I'm not a huge fan of the analogy, it's a well established business concept, so let's take a look at it.
First of all, by no means are all the parts of a sales funnel the same for all businesses, and many organizations use different terminology. That being said, Inside eBiz seeks to provide a simple understanding of the basic concept behind your sales funnel.
Here are the basic concepts behind a sales funnel:
- As you can see from the graphic above, the funnel represents different levels of engagement that your market has with your product offerings, from “cold” at the top (no engagement), to “hot” at the bottom (fully engaged).
- The goal of most businesses is to push as many people through the sales funnel as possible, moving them from leads to customers in the shortest time frame they can.
- Inside eBiz recommends that you focus your attempts for engagement to those people who can clearly benefit from your offerings, taking the time to develop mutually beneficial long-term relationships whenever possible.
- The main goal of your marketing and sales process should be to do whatever you can to create “fans” instead of just customers.
- You create fans by going “above and beyond”; by offering great value on a consistent basis, and doing for your audience what other businesses will not do.
- Customers can be short-lived, but if you can really bring them outstanding value, you can bring them to the ultimate level of engagement, and that's as fans of your offerings.
- Fans not only turn into longer-term relationships, but they often become evangelists for your business and its products, spreading the word about your offerings. For example, customers of Apple and Harley Davidson often become life-long fans of those companies.
- Fans not only stick around, they can't wait to see what your next product brings. And fans are always the first in line; they take the shortcut through your sales funnel when they dive back in as a hot prospect who's already interested in anything new you have to offer.
- So with fans, the lifetime value of your customer becomes much, much higher. Not only from their own investment, but from the investment of others they bring along with them.
How product pricing relates to your sales funnel
You want to let as many people as possible experience your offerings. That’s why it’s best to create a sales funnel that offers your products at different price points.
For instance, when people first get to know you, they’re likely to be more cautious about investing in your products. This shouldn’t be taken personally, as it’s usually a sign that they haven’t experienced enough of your content yet to establish trust in the quality of your offerings. For this reason, it can be best to establish your lowest price point for introductory products.
Beyond your introductory-level products are mid-level products. These products will generally move your customer beyond what they learned in the introductory product. Often, they have higher value because they’re created with different media—video, for example, can have a higher perceived value than an ebook.
At the top level are your high-end products. These might consist of more in-depth programs, membership sites, personal consultations, and more. Usually, they give even more value and require a deeper investment of time from the product creator, and because of that, also require a higher cost investment for the buyer.
Consider creating a sales funnel where you offer more introductory products at a lower cost so that your prospects can get a taste of your offerings without having to invest too much. Then, as they get to know, like, and trust you, you can introduce more advanced products in the middle, and finally your high-end products towards the end of the sales funnel.
Your aim should be to move them further along their journey and to always offer great value, no matter what the price point of your products may be.
Things to Consider:
• Do you have a money making plan? In what areas might you be able to create revenue for your business?
• Considering the three levels of product pricing (introductory, mid-level, high-end), what products might you provide for your customers to help solve their problems?
• What types of digital products could you potentially create for your market?
• Are there any third-party products in your area of business that would be valuable to recommend to your target market? Could you help your market by creating tutorials or guides for effectively using those products? Perhaps you could even sell such tutorials and guides as products of your own.
• Do you think you could benefit by getting involved in an affiliate program that allows others to market your products for you?
“Stop selling. Start helping.”
OK, that's it for step five—I hope you found it valuable! Next week in step six, we'll take a look at the important keys for developing mutually beneficial relationships with your market. Until next time, be well!
Wishing you all the best,
David B. Coleman
P.S. There are thousands of products and services that are aimed at people trying to succeed in the online business world. For a personal online business, there are just a few that rise to the top. If you're curious what Inside eBiz recommends, you can check out our Inside eBiz Tools page.