(Especially if you want to generate recurring revenue)
Whenever I get into a discussion with a trusted advisor business owner about productizing their business and generating recurring revenue, their first idea is to create an online course based on their expertise and know-how.
I can appreciate this.
For years, the primary way to convert your know-how into a digital offer so that you could disseminate your expertise in a one-to-many model rather than sell one/do one model, was an online course.
But we've come a long way baby.
While the appeal to create one is undeniable ...
scalability,
the allure of serving one-to-many vs. one-to-one,
the ability to package expertise into a digital format,
if the aim is to generate recurring revenue, courses may not be the optimal choice.
Here's why:
Market saturation makes it challenging to stand out
One-time purchase model limits recurring revenue potential
High drop-out rates can lead to dissatisfaction and refund requests
A large lead generation data base is needed to make it profitable long-term
With an online course, you have two marketing options:
Open cart/closed cart marketing approach, only letting participants in 2 or 3 times a year requiring a complex launch mechanism.
Evergreen - requiring constant marketing to fill your program.
The biggest negative to online courses is the missing and most desirable component:
Recurring Revenue
Selling a course is a once and done offer.
How can you make your online course a valuable recurring revenue subscription?
Membership Sites: Offer ongoing access to exclusive content, resources, and community support for a recurring fee.
Subscription-based Coaching: Provide regular group or one-on-one coaching sessions on a subscription basis. (this removes the passive part of recurring revenue unless you hire other service providers)
Add in technology: Add in a software as a service (SaaS) component: Develop tools or platforms that solve specific problems for your students for which you can charge monthly access fees.
Recurring revenue models offer numerous benefits:
Predictable Income: Steady cash flow enables better business planning and growth
Sticky Client Relationships: Ongoing engagement leads to higher retention and lifetime value
Opportunities for Upsells
Scalability: Serve more clients without proportionally increasing workload
Increased business valuation: Having a recurring revenue offer raises your business' value if you decide to sell
But how do you transition to a recurring revenue model?
That's what everyone asked so we created a Add A Subscription Offer To Your Service Business Playbook.
While online courses can still play a role in your product mix, resist the temptation to create it and then try to sell it.
Make your plan to package your education with back end continuous, perpetual pipeline.
The key to successful productization lies not in the most common route but in understanding your clients' long-term needs and structuring your offerings to meet them consistently. By doing so, you'll create a win-win situation: stable, predictable revenue for your business, and ongoing, valuable support for your clients.
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The Product WYZE Platform helps consulting & fractional exec firms increase predictable recurring revenue with subscription-based productized offers to earn even when not working.
