There’s huge profit in this business model…
Shortly after I got into copywriting and direct marketing, in 2005, I had a stroke of luck.
I was about to get married and move across the country, from Nebraska to Oregon. And I needed a job. I knew I wanted it to be a marketing job, where I could get paid to get good at copywriting. But I didn’t know much more.
So I was scouring the want ads for pretty much any position that would let me develop my skills. I applied for a handful of jobs.
But of all the jobs that were available, and of the ones I applied for, I had the good fortune to land at a company that was creating and selling IT training videos.
The product was a catalog of highly-specialized, highly-valuable skills, taught by top trainers from around the country. The training was packaged in video format, sold on DVD, and eventually online.
Suddenly I was selling DVDs at an effective COGS (cost of goods sold) of maybe $10 each, on the high end. And yet we were selling that training for $199, $299, or more… With bundles of DVDs going for as much as $999.
Do the math.
You spend $10 on the product. You sell it for even just $199. That’s a margin of 95%.
The reality of running the business is that we weren’t making 95% on every training going out the door. I had to get paid after all. And we had to keep the lights on. And we bought sushi — lots of sushi. Plus the actual costs of getting the customers. And on and on, the costs of running the business.
But even in an office where we seemingly couldn’t stop spending money, the profit margin was still somewhere north of 40%, in bad years. Which meant that for every $199 sold, the owner was taking home about $80.
I learned to love information products — and I’ve been in the business ever since…
Today is Mailbox Monday, and I got a question about building and selling online courses…
Which is right up my alley, as you can see from the above.
The question and answer in a moment, but first…
If YOU have a pressing question you’d like to have answered in an upcoming Mailbox Monday issue of Breakthrough Marketing Secrets, click here.
Here’s today’s question…
I want to create a digital course about social media marketing. The thing is, there is much information about social media marketing and that’s confusing. Basically I’m having hard time where to start and where to finish.
What would you advise me to cover in this course? Thank you in advance for your help.
I’m NOT going to talk about social media marketing…
On one level, here’s how I read this question…
“Roy, I know a little bit about social media marketing and I want to make money selling an online course. Can you please outline for me what I need to say in the course so people will buy from me?”
I’m NOT going to answer that question.
That would be dumb on many levels. For one, I’m not a social media marketing expert.
But on a deeper level, I’d be dumb to answer that question because it wouldn’t be most useful to the most number of people, including our friend N.S. who asked the question in the first place.
You’re far better off understanding the principles and strategies behind creating a course that sells, rather than having me do the work for you.
So let’s get into all the thinking and principles and strategy behind building an selling an online course.
Know your market, and their challenges…
First and foremost, you have to know who you’re serving.
Are you serving internet entrepreneurs who want to do their own social media? Are you serving social media consultants who want to sell the service to clients? Are you serving newbies in the field who want to get their first job in social media marketing?
Depending on who you serve, what you include is going to be very different.
(We’ll talk about big picture planning in a minute, which impacts who you choose to serve.)
Once you know who you’re serving, do you know how to reach them in a way that’s scalable and fits within the finances of your business? Is that through your own social media marketing? Through paid advertising?
You need to know who you’re reaching and how you’re going to reach them as a good starting ground for planning any course.
But we’re just getting started.
Because assuming you’re serving a market with a pulse, this next question is…
The single-most important question to answer for the success of your online course…
I’ve written many times about Ryan Levesque’s Ask Formula.
At its core is one critical question you ask members of your target market…
“What’s your single most important question about XYZ?”
As in, “What’s your single-most important question about launching an online course?”
You can ask it in a lot of ways. I like using the word challenge. As in, “What’s your single-biggest challenge in getting your online course launched?”
No matter how you ask it, you’re asking your market to reveal to you where they’re stuck. What their problem is (but never ask them “What’s your problem, bub?”). What obstacles they face, and what challenges are holding them back.
A great online course (or a great offer of any type) will help them overcome their single-biggest challenge. It will solve their urgent problem.
Find a group of people with an urgent problem, who are willing to pay to fix it, and build your offer around that — and your online course is likely to succeed. (At least as long as you charge enough for it that you can recoup costs, with margin.)
More thoughts on solving their single-biggest challenge…
Build your course in a way that gets at least some of the desired results, fast. What kind of fast-start guide can you work in, to get quick gratification? This will help with both selling it, and with the customers feeling satisfied and sticking.
Make it easy. The harder you work to make their success simple, the more you’ll be rewarded. Complex and unusable systems don’t get used, and you won’t end up with satisfied customers. Instead, break everything down into easy-to-follow templates and formulas and action plans.
Consider what they want versus what they need. Your course can give them what they need, from your perspective as the expert. But to make sure they want to buy it and will be happy after they do, you have to show them how get what they want. In social media, this may be something like showing them how to get a ton of followers and likes, because they want that, but then showing them how to do it all to create profit using direct marketing best practices, because that’s what they need.
Hitch your wagon to something the prospect is already interested in…
This is a HUGE shortcut.
In hindsight, I’ve realized how incredibly easy it was to sell IT training videos. In fact, our marketing was not very good at all. And yet we made millions of dollars. Why? Because someone else was pulling the wagon.
The companies doing the certifications were selling the need for certifications. Plus they were selling employers on hiring certified employees. So everyone was already sold on the need for certification. But they needed to prepare for the certification exams. So they needed training. That was an urgent problem. And the payoff was they’d be able to do the work their employer needed them to do, with a payoff of career advancement.
We simply had to step up and offer a good solution to that problem.
Likewise — and I say this with all due respect — a big reason my friend and client Perry Marshall got huge from the early growth of AdWords was hitching his wagon to that train. He was among the first to step up and establish expertise when AdWords was new. Advertisers had a problem of figuring out this new system, and he offered a solution. It was an easy sell.
This happens over and over again. A changing market creates a problem that a lot of people want to have solved. The people who step in to figure it out and provide the solution are giving themselves a huge advantage.
So what’s the equivalent in social media right now?
What clear problem already exists in the mind of your prospect? What are they already paying attention to, that you can make yourself a part of? What are they already doing, that you can help them do better?
Making this at least a part of your offer will make it easier to attract attention and make sales.
But don’t spend too much time planning…
Money favors speed…
With all of this, don’t let yourself spend too much time preparing or planning, or producing the training.
Get your beta to market as soon as possible. Launch version 1.0, and see if people buy it. Then make it better, and better, and better — fueled by the revenue and feedback from early adopters.
Dean Jackson has a process outlined in the acronym BORE: Brainstorm, Outline, Record, Edit.
Brainstorm: use the above, plus your own expertise, plus conversations with your market to brainstorm all the things that could go into the training.
Outline: turn your brainstorm into a cohesive outline, eliminating the unnecessary, and fleshing out to fill any holes.
Record: get in front of the microphone or camera and turn your outline into media.
Edit: Put a little polish on it, but not too much (remembering that money favors speed).
Then, you must launch. Create marketing that tells the prospect you understand their pressing problems. Tell stories to show you know the agitation of dealing with it. Explain why other methods have been invalid or incomplete solutions to their problem. Show them what a real solution to their problem looks like, based on what you’ve put them in the training. Then ask them to sign up based on what you’ve laid out. (Can you spot the PAISA formula?)
Once you’ve launched, be responsive to feedback. And iterate. Add lessons. Edit or re-record any mistakes. Get feedback, to improve. Then launch version 2.0, and 3.0, and so on.
(And if your training fails? Well, you’ll be glad you didn’t spend too much time. But also, you can try to learn from it. Test different messages. Break the training into components and see if they want less. Add components, to see if they want more. Pivot and train on something different but related. Every launch is a test, and failure is simply a lesson in what not to do next time.)
Consider the big picture…
Considering all of the above, it’s rare when a single training title creates a business. And even then, it usually doesn’t last.
Here are some important questions to ask yourself…
How does this fit into your product line?
On a broader basis, is this one of many training titles? Is this your big training, and you have a number of smaller trainings that feed into it? Or is this your 101 course, with a number of others to come?
And importantly, how does all of that fit into the customer journey? What problem do they need to have solved before this training is relevant? What problem will they want solved after they go through this training and solve their current problem?
When someone is attracted to this training and they go through it, what else do they need? And how can you use this to maximize customer lifetime value?
How does this fit into a funnel?
On a smaller, more tactical level, consider where this training fits in the scheme of the short-term customer journey.
Do you have a entry-level product such as a free book, a paid webinar, or some other low-priced (under $20) product that will get them to whip out their credit card? (Often this is a breakout of the quickest, most actionable part of the training. Or the core concepts of the training in report form, versus a multimedia demo performed in the training itself.)
And once they’ve bought the training, do you have another product or service that’s much higher priced, that will be a fit for the customers most ready to go deep? (Coaching, consulting, group work, more hands-on, more access.)
All of this will profoundly impact the scalability and profitability of your business, and should be considered when developing the training. Even if it’s just a plan to address it after you launch the initial training.
How does this fit into your bigger business?
What do you want to get out of this? Do you want to launch a training business? Do you want to get clients for your social media services? Do you want to partner with a social media software tool company?
How does this training fit into those bigger plans? This goes all the way back to what you want to include in the training, who you want to serve, and so on.
If you want to sell social media consulting services on the back end but you are training people to get their first social media marketing job, there’s a disconnect in who you’re serving. Buyers of one are not buyers of the other.
But if your course is about what a marketing executive needs to know about social media to effectively hire and supervise a freelance social media consultant, and you are a freelance social media consultant, there’s a clear path from training to hiring you.
The technical and tactical decisions of building and selling your course…
I’m not going to go into all the details here, except to tell you that people often get lost in these details and never launch.
So I want to give you permission to move fast and be imperfect.
First off, bootstrap. Find cheap solutions in launching your earliest versions, knowing you can always roll out the red carpet later. Linking to private YouTube videos from a private Google Doc you share manually by email after you get a PayPal payment has ZERO up-front cost. If you sell a few that way, you can roll that money into a better system. If you can’t sell it that way, you’ll be glad you didn’t sink a bunch of cash in up front.
Ugly works. Again, a good course is about the value of the content. If your content is incredible, most people won’t care that it comes in an ugly or imperfect package. Yes, it’s becoming easier to make things look good, and you can definitely put things in a nicer package as you grow. But you might be surprised to find that ugly worked as well or better.
Most of all, remember this…
Prove, then improve. Create SOMETHING. Put it out into the market. Sell it. Then, make it better and better. You’ll have all the time in the world PLUS resources once you have something that’s selling. But if you’re not selling anything yet, all time and effort could be wasted in perfecting a product nobody wants. (I’ve seen this happen too many times!)
Yours for bigger breakthroughs,