- May 27, 2017
- Posted by: Graham Onak
- Category: Business
Businesses are always looking to grow, and the traditional path to growing a business is very linear: you add more clients and you add more employees to handle the work those clients generate. This is pretty standard, and it’s usually the first path most businesses take toward growing their revenues. But just because you have more clients, more work and you’re busier than you were the previous year does not mean you’re making more profits. Adding more contractors or employees to do work for your organization adds a lot of chaos, and if you are not careful your profits will not be worth the effort involved in doing the work.
Another path to growing your business is to focus on fewer clients, but ones who also have more money to spend on your services. These often are considered your better clients. The hesitation here is that you will be turning away revenue that you’re used to receiving from clients who do not pay as much. A great answer to this problem is to develop a digital product, which will allow you to scale your business while limiting your overhead and give you the opportunity to focus on bigger clients.
Use Your Services to Create Digital Tools
The first step in developing a digital product is to look at services you perform that people are willing to pay for and figure out a way to turn those services into tools. A tool can be a learning resource; it also can be a piece of software. The important thing to know is how to turn services that require your time into tools that can be created once and then be marketed to multiple individuals.
For example, there was a point when we were installing mobile call buttons on websites very frequently. These buttons would show up at the bottom of our clients’ websites on mobile devices, allowing visitors to easily click and call our clients’ businesses. One digital tool we created involved taking the files used to create the buttons, formatting them in a way that made it easy to understand the installation process, and having the files available for purchase on our website. Creating this product called for creating instructions, packaging the files into a folder and creating a set price for the coordination of the e-commerce functionality. The upsell is that we will install and customize buttons for an additional fee. This is a very simple digital product, but it illustrates the method used to create such products. Apply this methodology to your services; look at what you are doing for your existing clients that provides value and package those things into products.
Keep in Mind Who You Are Developing Tools For
Another example of a digital tool you could create for your service business is a piece of software that automates tasks in place of manual labor. This could be applied to the website audits we do, which take a fair amount of time. There are website audit tools out there that automate the procedure, but those tools are less efficient and provide inferior results. However, results provided by an automated audit tool may be satisfactory for businesses that are just looking for some simple information about their website and do not want to spend the money for a fully detailed website audit. For that matter, if we built an automated tool that created a less detailed website audit and offered it for $29.99 / month on our website, that could bring revenue into our company that we are not already getting.
Focus on Creating a Tool You Know Will Sell
When you are developing your first digital tool, you want to focus on which services you perform that are both valuable and time consuming that people are buying. Those are the services that already have a market of people who also are willing to spend money on your products, which can free up your time to focus on your feature services. This can be especially valuable for consultants who are looking to scale their businesses; there is only one of you, which means your time has a finite cap. You can hire additional consultants or junior members of your team, but at the end of the day there is only so much of your specialized work that can be done because there is only so much of you.
Your Insight May Be Valuable to Other Businesses
A common digital product consultants use to scale their businesses is an e-learning course. If you’re a consultant and you spend your time teaching the same things to different organizations, you could invest in high-quality video recordings of you explaining your lessons in a very organized way and market them as a consulting learning course. This is especially effective if you are in a niche industry or if you develop the courses to target niche sectors within larger industries.
I work with one business, a brick-and-mortar meditation center, who’s owner wanted to scale the business because he already was hitting his hourly cap. He could hire more meditation instructors, but his end goal was to scale his business in a way that did not require adding more costs to his bottom line. There also is only so much time he can book at his one location, so if he continued adding instructors he would eventually need to add locations or expand his building. Both those options would require capital and increase his costs. And although he technically would be scaling his business, he would be doing it in a way that does not line up with his vision for the company. For this reason, he started building out online video courses for his meditation lessons and promoting the courses to his list of members. There are several platforms that instructors can use to host courses, and most offer features to help customize content and connect with new students.
Boost the Effectiveness of Your Course by Targeting a Specific Audience
This methodology can easily be applied to more mainstream industries as well. For example, take someone who helps fast food franchises expand into new markets. They could create a video course focused on expanding fast food franchises, specifically, into new markets. In that case, you have a very targeted learning course, which would be be more effective than if you created a vague learning course called “How to Expand Your Business Into New Markets,” or if it was just called “Growing Your Business.” Those courses are a little too open-ended to be successful.
Maximize Your Business’s Potential Market
Businesses often hesitate to build out digital products because they’re worried those products will cut into their existing services. In the case of the meditation instructor, it may seem like building out a course and selling it for $9 a month would bring in less revenue than having people come into the meditation center for $50 a session. But there are other benefits to creating digital tools, such as reaching a larger audience that is not constrained by physical location. Nobody is flying into the guy’s meditation center from out of state, and at some point he’s going to reach the maximum number of people in his area who are interested in meditation and are willing to commute to his location. But a digital product frees up the limitations created by location boundaries and allows him to generate revenue from different areas of the world he was not generating revenue from previously.
Save Your Feature Services for Bigger Clients
With that being said, there’s always going to be a client out there who will pay you more money to have custom work done. A company that is going to make a $5 million investment is simply not going to replace a consultant’s advice with a $49 learning course; they are going to hire that business consultant for $20,000 or more. But your e-learning course will be applicable to other business owners who do not have that type of capital available, are making less critical decisions or just want to understand more about their industry without committing to hiring a more cost-intensive business consultant. Keep in mind that the purpose of a digital product is to free up time so that you can focus more on bigger clients.
Selling Your Digital Product is the Easy Part
After putting together your first digital tool, you need to sell it. Assuming you already have a website, there are several different ways to add e-commerce functionality to it. Alternatively, you can look at launching your product on an e-commerce specific site, such as Shopify or BigCommerce, and adding it to your existing website as a subdomain. You also can use simple e-commerce integrations that allow you to manage your products in a separate system and integrate them into your website through embedded code. Regardless which method you decide to use, you’ll find that the “how do I sell this product online?” question is easily answered and is a matter of technicalities. The more difficult question is, “what do I sell online?”