By Veronica Belmont via Flickr
Not long ago I made a few hundred dollars while I was standing in Best Buy waiting to buy an iPad.
Let me tell you how I did it – so you can, too (5 tips below).
I didn’t close a new client… or coach someone on the phone.
In fact, I wasn’t working at all.
My website sold a copy of one of my information products. The beauty of it is, I haven’t done any work on this product for over a year. In fact, I’ve hardly even promoted it in the past two years; and yet it still ends up being around 10% of my business revenue every month!
That is the power of passive revenue. Work once… and profit over and over again for years.
I asked Andy Andrews, the brand and implementation coach from my Enlightened Marketing Million-Dollar Brand Makeover and Client Attraction Mastermind programs, to share the top 5 tips we’ve learned on our journey to passive income over the past 3 years. Here’s what he came up with:
5 Passive Income Lessons Learned
by Andy Andrews, Enlightened Marketing Europe
1. Start Simple
I think it’s important to tell you the complete, honest truth: setting up a stream of passive revenue can be complicated and difficult, but it does not have to be. So, while you might be thinking you have to model some guru’s fancy “home study kit” with videos, transcripts, CDs, a member forum and a bonus software, that is not the case at all. For your first information product, you can start with something as easy as a Word document you’ve saved as a PDF.
2. Go for Dollars, not Pennies
I have to admit that I learned this the hard way. I spent a lot of time, effort, and money chasing after 1000 x $1 before I realized that it was much easier to earn 10 x $100. Any passive revenue stream needs to be priced in such a way that you can reasonably expect to earn back what you invested in it in a reasonable period of time.
Pack enough value into whatever you create that you feel comfortable charging $47, $97 or even $197! Don’t worry about giving away secrets; that’s scarcity thinking.
3. Finish One Thing First!
Nobody wants to put all their eggs in one basket, especially when it comes to income. The failure rate is just too high when you are testing something new and unknown.
However, even a poor-selling product is a lot more profitable than 5 that are not finished. (Yes, that’s something else I’ve learned from experience!) Get started now, finish ONE product, and start offering it to your clients, subscribers and community.
4. Recurring Is Much Better
Remember how I said to go after dollars, not pennies? That does not mean you need to charge hundreds of dollars. In fact, I often recommend against it. The truth is that information products with a smaller price tag are easier to sell, especially as an intro to you and your business.
So, how do you turn this into real money? Amazingly, testing has shown that while cutting the price of a product from $197 to $97 quadrupled sales (resulting in twice the revenue), the product sold just as well at 2 x $97 (two payments of $97 apiece) as 1 x $97.
Smaller recurring payments mean affordability for your audience and steady cash flow for you, the business owner.
5. Leverage What You Have
Once they finish their first information product, the tendency of many is to promote it once, then forget about it. Not only should you consistently promote it; you should also keep in mind the many other ways to leverage it.
For example, the chapters of an eBook can become a membership program or a video training series. A workbook can be turned into a premium coaching program. The list goes on and on.
~*~*~*~*~*~*~*~
Hi! Samantha here again. A funny little story:
From goosmurf via Flickr
I couldn’t plant more in my garden this year due to travel commitments. One day in May I was futzing around with the place the garden had been – weeding and clearing – when I noticed a large number of “volunteers” from last year: strawberries and blueberries, flowers and herbs.
As I harvested an apron-full of strawberries for our morning cereal, I thought, “This is just like passive, recurring revenue! Work once and benefit year after year.”
Passive revenue has been such a game-changer for me and my business, that I urge you start adding it to your business now. Can I help you with that? Would you like to know more about this topic?
What’s your #1 question about getting started? Let me know in the comments section below.
* Money pic by Andrew Magill
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{ 6 comments… read them below or add one }
Geat article Samantha! I love how you related shopping at Best Buy, new business products, and your garden, all together to create the big picture. My question is not about the product but about the marketing schedule for the product. What’s a good rule of thumb for marketing (# of emails, how many days apart are the emails) any product/service.
Thanks!
Hi Rhonda,
You’re going to love this answer: it depends. (gag face)
Yesterday I was on a webinar with an Internet marketer I respect who emails daily from the time someone gets his freebie until they purchase or unsubscribe. It’s always valuable tips, but it is daily.
Most businesses like ours are going to be to be every few days (or more than once per week) during promotions and possibly more as you near the deadline (3 days left, just 2 hours left to enroll, etc.). But when promo periods are over they go back to weekly or twice-monthly formats.
Great article Samantha. I am just getting started with my first information product – an article and then a series of articles (which could then become an e-book, etc.) My question in getting started – how do you think about the breadth/depth of an article relative to the price/value? Better to have it short and focused on a single issue, or more expansive? What guidelines have you seen that might be useful?
Congratulations on getting started! It is often helpful to look and see what others products in your industry cost when making a decision on price. Remember that the length of the lessons or ebook are not a reliable indication of value.
One approach that has worked well for us as Enlightened Marketing is to price information products – such as Attracting Perfect Clients – so that they are a steal. If you have a topic that is broad, you can make the value proposition more attractive by spreading very low payments across a longer period of time.
Samantha,
Passive income is the buzz-word of the decade, isn’t it! :)
These five key areas are a great place to start.
I don’t want to rain on anyone’s parade, but I think it can be very misleading that creating a product, in and off itself, gets one the keys to the kingdom.
In my experience, even if you come up with a product, that gets you to the starting line. Then the real work begins: Marketing, marketing, marketing. Selling, selling, selling, selling, and selling.
Maybe I’ve jumped the gun here and this is going to be your next installment!?!
Hi George,
You’re absolutely right that marketing the thing is key. But being at the starting line sure makes it easier to start the race than sitting on the sidelines dreaming about running.
I most prefer marketing a thing before the product is complete, so you’re developing it as customers are paying. Being pre-sold, you know it’s an idea that will sell.
However, we’re talking here about a simple $27-47 product, or maybe a $27/mo program, which is what I started with. Not so much effort to create, and it’s a delight and relief to have something to offer when you speak or put up a website.