079: The First Two Steps To Creating Leveraged Passive Income With Digital Products
Let’s begin with a pop-quiz!
Pop-Quiz: If you want to create a passive income stream with digital products, which of the following do you think would be your first two steps?
Drafting an outline of your online course
Deciding which format your digital product should take (audio, video, course, membership, etc)
Break writer’s block by just start writing your first chapter of your course
Review which online course platforms are the best for your business?List of equipment you need to buy for creating your digital product
Which third-party integrations will you need on your Squarespace website for selling your course?
Figure out how to price your digital product
Should you go on launch mode or evergreen it?
Yes, you will need do invest time and thought into these areas before you create your digital product. But none of these makes up the first two steps. Before you do any of the above steps, you first need to 1. find out what problems your own clients are asking you to solve for them and 2. find out if someone will pay for your digital product.
Step 1: Figure out what solutions my clients want
Step 2: Find out if someone will pay for your digital product
Let’s dive into each of these one by one.
Step 1: Find out what your clients want
You see, you have so much to teach and share that you could probably begin drafting an outline for an online course in a single afternoon, if you really wanted to. But what I found out from my year and half of online course making adventure several years ago is that, as much as you need to teach what you know, you also need to align it with what the market wants. I am not saying that the thing you want to make needs to be already have existed because with that logic the light bulb would never have been invented, nor would have the airplane. Or any of the millions of new innovations that continuously come into being. But they all came into being because there was a need for it, a yearning for it in some form or the other. The end result or the product that you create doesn’t necessarily need to be existing previously. But the problem that your product solves, now that, that does need to be existing previously.
The end result or the product that you create doesn’t necessarily need to be existing previously.
But the problem that your product solves needs to be existing previously.
So when it comes to creating your first online course, it is important that you know what problems exist. And more importantly, what problems your own paying clients are asking you to solve. That information is evident in the kind of things people are paying you for because a service provide you are closely aware of what you are getting hired for. This not only will help you for example to create a customized service package but it is very useful for another reason. And that’s this: if there are folks who are paying you for a custom solution, then there are surely multiple others who want that as well but cannot ask for a customized solution for it. That’s where you can create leverage with a leveraged product.
Example 1: For example, let’s take the example of a web designer, named Sophia (…see my head nodding). For every one person who hires me to custom design their website there are many others who are learning how to build their own site DIY (Do-It-Yourself) style. So if you are web designer, can you think of a solution that serves the DIY people and can instantly leverage your time and efforts? Perhaps, a 4-week mastermind to build their website or an online course that walks them through each part of the website building process. Now, you can serve a lot more people and you have leveraged your time and efforts while increasing the business’ bottomline.
Example 2: Take another example: a programmer, named Alex, who is hired to create high-end custom code for individuals. How about a portfolio of standard code products that are at a lower price point than the custom solution but can be used by more than one person. Instant leverage!
Example 3: Or think of a master hand lettering artist, named Shawna, who gets commissioned by big corporations to come in and create hand made unique art on large walls in their lobby. She can think of teaching other hand-lettering artists on how to get commissioned by big corporates. This could be a six month online coaching program that may even be a high-end offer but has instantly leveraged her time, while attracting very serious artists who want to take their art career to the next level. And it’s all digital with pre-recorded sessions interspersed with some live laser coaching.
Example 4: A piano teacher, named Robin, does live three-week group courses to teach beginners how to play the piano. They then move on to an intermediate course where they have established themselves further in their piano skills. Now she knows that she has students who love her teaching style and have already come to her for beginner and intermediate group courses. She knows they are hungry to get good at their craft with HER help. This is where the digital product leverage kicks in: she can create a VIP three-month deep immersion course to help build up their repertoire. This immersion course could be designed as an online course with three modules over three months. Each month they master one module, with a video per week that contains short weekly assignments to complete/practice. At the end of each month, they come together in a live zoom meeting to ask questions and to demonstrate how far they have come with their skills. And they repeat this for each module. At the end, they have three distinct pieces mastered, say one from Bach, one from Mozart and one from Beethoven. Or let’s say the whole three months is about Bach and then the can go to Mozart in yet another three month program and then Beethoven in another three month program. And now you have a 9 month immersion program! This could even evolve into high-end in-person retreat type offering eventually.
Now do you can see what I mean? We need to understand what we are already being paid to create and then extrapolate from there. Take whatever you are already doing for your current clients who are paying you big bucks to do it and then think of how you can translate that into a digital product that can be purchased by a lot more people, thus, leveraging your time (you make the thing once) and generate on-going revenue from it (launch it or do it evergreen).
Actionable Task 1: Take Inventory of Your Past Client Projects
So alright, you may ask, ”What is the actionable step from this?” Well, the actionable step is to answer this question: What are your clients paying you for?” Take inventory. Make a list of past client projects that you got hired for. Then see what they look like. Now you if you are a business coach, you may say, “all my clients hired me to help their business get to the next level.” If you are web designer, you may say, “all my clients hired me to design websites”, or if you are a piano teacher you may say, “my students hired me to get good at their technique”. Okay, that’s a nice response. Perhaps I should specify and articulate my question better:
Q: What common thread do you see in the projects you got hired for in the last six months?
Maybe your coaching sessions were all about figuring out a niche, or on how to create a service package to attract clients.
Maybe your piano students were all self-learned students who now wanted to develop their technique, or some wanted to master reading music or they are mostly high-school students wanting to prepare to get into advanced music school.
Maybe you designed a string of websites for non-profits, or authors and coaches, or yoga and wellness instructors.
Action Step: Make a list of past client projects that you got hired for. And see what common thread you see in the projects you got hired for in the last six months. Circle, highlight, or underline similar projects and you will get your answer.
What to do if you don’t have paying clients yet?
Now, if you are at the start of your entrepreneurial journey, the main goal then is to get clients and get paid for your services. Digital products can come but they may not take center stage right away because you still need to validate your business and see if there’s any traction. An avenue for research for those just starting out is to see what people are writing in the comments of your own blogs or of your colleagues, what are they asking you on your social media channels or on others channels in your niche, and you can even search what questions people are asking on forums like Quora or Reddit or Facebook groups. Are there people wanting to pay for your particular service offering at all? You need that to happen first, right?
The bills gotta get paid and in my experience, the fastest way to create revenue from an online business is to offer a customized one-to-one service for clients. Now, if you create physical products, that’s a whole different ballgame and I have no experience in that area, so I will leave that topic for another expert to talk about. But what I do know from my own experience as an online business owner who started offering services first, is that when I got my first $90 to setup a ConvertKit account back in 2016 for my very first client (majorly underpriced, but hey it was a start), that’s when my business was born. Getting the revenue doing services for individual clients then created the momentum for me where I could then begin to think of leveraging.
The fastest way to create revenue from an online business is to offer
a customized one-to-one service for clients.
Are you on a hamster wheel of serving clients?
As satisfying as working with clients can be, it also made me realize that I was still trading hours for dollars. Nothing wrong with that, at all. But as soon as I was finished working for a client, I was back in client acquisitions-mode which often felt like starting from scratch. And I’d wonder if this is the point in the journey of a business owner that the thought aries, “How long can I sustain this? What if I could leverage my time and create new ways to generate passive income?” It certainly was for me.
Even a $1000/per month of passive income can mean a huge boost for any business that is under six figures. And that’s when we start dreaming of digitizing. Is that how you feel? Well, my friend, I know exactly how you feel. So if you don’t yet have paying clients, roll up your sleeves and get that first client. If you already have clients but feel you are stuck in the never-ending cycle of serving clients then working on acquiring clients, then serving clients and back again on the hamster wheel, I’d say try to find an outlet of time, a window of time, during the day when you plan your exit from this exhausting cycle. Yes, it’s great that you are running your own business and doing what you love but you also built your business for time-freedom not just money-freedom, right? So be patient while you are in it, but start scheming your digital leveraged product adventure at any free moment you get. Serve one-to-one clients now but keep in mind the big picture of where you want to go with your business and consider how serving one-to-many digitally can be a viable route for your entrepreneurial journey. Alright, now let’s continue with step no. 2.
Step 2: Find out if someone will pay for your digital product
Okay, so back to the steps you need to take for your leveraged digital product creation. Let’s say, you have identified your most common projects you got hired for. For the sake of example, let’s look at the piano teacher, Robin, who offers individual piano trainings. Now she does the actionable task from step 1 (see above) and finds out that 70% of her students are high school seniors wanting to prepare their college application audition video to get into music school. She still has a good percentage of self-learned adults who always wanted to learn piano from a trained instructor and that’s a good bulk of her clients. But the 70% of college-wannabes is a good segment that she can start thinking about specifically.
Robin could start strategizing what type of a digital product she should create for the 70% of her students who want to prep an audition video that shows their piano skills for their college application. Her digital product could be a summer intensive that students join during the summer before they begin college applications. It could be made up of modules in which she helps them to pick out the music pieces that they would include in their audition video, guides them on practice habits and how to create a schedule of practice, guides them on the right recording equipment they need, and all the way to finally recording the application video and getting it ready to send out come September.
An alternate approach would be for her to first create a series of live online workshops for each module. With a live audience you can tune in (no pun intended) to what the piano students are asking. Then after the live session are over, she can get back to her desk, review the recordings and then create clean video modules. By the way, this is exactly how I created my Host Your Online Course program in 2019. This approach turned out to have so much less pressure for me because now I could create the content as I went instead of having all the videos pre-recorded. Watch this video where I explain how and why I decided to take this route.
Now at this stage where she has come up with an idea for an online workshop or course, it can be tempting for Robin to jump into actually creating the digital program. But this is exactly what she should avoid. The next step would be to write up a sales page that articulates all that her program would contain. Now for me, I go straight to the backend of my Squarespace website and start creating the sales page. For some others, it may be best to take a notebook or open up a word/pages file on their computer and start writing. The idea here is to get the details on to paper and then on to your website. This also gives you an idea of how you want to price it because you see all the components of the offer laid out in front of you. Then, send an email to your students either individually or if you have built an email list, send an email to the people on your email list with an early bird invitation. Again, the format could be an online course or a series of live workshops.
You’ll notice, that at this stage, you have not created a single module. You are simply pre-selling your course/workshop before you create a single slide, any other digital component of it. The only thing you will have created is the sales page with the offer expressed in detail.
This method is not new and I am not the first one to be using it. I discovered it through my own trials and errors of course-creation, where I jumped right into creating a massive course and then painfully found out that there were no-takers. Pre-selling is an easier and much faster and low-risk way to find out if there’s traction for your idea. Create the sales page with an early-bird pricing offer and send it to your audience. If no one purchases, you need to get back to finding out what you need to change. It doesn’t mean that your idea was not useful or good, may be your audience is not big enough or your sales page was not impactful or you may need to tweak some other aspect of understanding what your audience wants. Once you have real people putting out real money for your offer, that’s when you have real evidence that what you are offering is wanted by your audience and it goes beyond just an interest in your offering.
Pre-selling is an easier way to find out if there’s traction for your idea.
Create the sales page with an early-bird pricing offer and send it to your audience.
Actionable Task 2: Validate your idea by pre-selling
After you’ve taken inventory of the common thread of hired projects in the last six months, think of what is the main challenge that your clients have asked your help for. Now, you can brainstorm a way to leverage that solution so that you can serve many people by creating something once. This could be a series of live group workshops as I hinted in the earlier section. But it could also be an online course. What’s important though is to see if someone will pay for it. And the way to find out is to make the offer to your audience (current clients or folks on your email list). Now if it will be an online course, make sure to plan your time wisely and clearly say on your sales page when the course will be released. And remember things often take longer than we had planned, so add in a good buffer of extra time.
Action Step: Write out what your digital product will consist of and what it will achieve for your clients. Create a pre-sell sales pages and add it to your website with early-bird pricing. Invite your your students individually or send the invitation to your email list.
How to create a pre-sell sales page
I think when people hear the term, “sales page”, they get a bit uncomfortable. First, because the idea of selling can be uncomfortable, and second they may not know what to put on a sales page. Now I should perhaps write another blog all about how to write and design a sales page, but for starters, let’s not complicate it. The sales page that you write to test your new product needs to have at least the following six things:
1. Tell clearly what the program/digital product will do for them: the benefits
2. Outline the different modules and what it contains: the features (videos, pdfs, action plans, worksheets, audios)
3. Note any timelines if it’s a live workshop, example: The program starts on July 15th. Early-bird ends on July 1st, etc.
4. Clearly state what it costs $$ and how they can purchase: purchase button, or by application.
5. What some other students have said: testimonials (if it is a first launch, add testimonials of your other trainings, services or offerings).
6. An official bio and a nice smiling photo of yours.
You can always embellish this but start with the basics and then build upon it. I have myself fallen in this trap of perfection. This really is a mental vice, not exaggerating here. To fall in the trap of perfection is a game of the ego that only causes you hurdles on your path to progress, under the guise that it only wants to make sure you look good to others. Dare to look bad, look imperfect: that’s better than not have anything created at all. (Okay, I am finished giving a pep talk, but more than you, it’s mostly likely, me who needs to hear this right now).
To fall in the trap of perfection is a game of the ego that only causes you hurdles on your path to progress, under the guise that it, the ego, only wants to make sure you look good to others.
Vanity ≠ Progress
Your path to creating leveraged passive income starts now
So I’ve outlined for you a possible path that you can take for creating your leveraged passive income. It’s now time for you to take action on it. It begins with first figuring out what kind of solutions your clients want, finding the common thread in the type of projects you were hired for, then translating that into a solution that will serve many in a leveraged way, and finally creating a sales page and inviting your potential and current clients to benefit from it.
Let me know in the comments what questions come up for you when you read this post and also share with me where in the passive income journey you are in right now.
Peace,
Sophia
Related:
073: Sell your course before creating it:
www.sophiaojha.com/blog/073-sell-your-course-before-creating-it
067: Three things you should know about doing a live workshop series
www.sophiaojha.com/blog/067-three-things-about-live-workshops
053: How to build a landing page on Squarespace for a "survey"
www.sophiaojha.com/blog/053-landing-page-on-squarespace
052: Do this One thing to get to know the real needs of your audience
www.sophiaojha.com/blog/052-ask-the-audience
031: How to Create an Evergreen Sales Funnel Using Visual Automation in ConvertKit
www.sophiaojha.com/blog/031-how-to-create-an-evergreen-sales-funnel-using-visual-automation-in-convertkit
