Build a Badass Business Podcast #19: Passive income strategies, changing business direction, and pricing a product or program

Build a Badass Business Podcast | Diane Sanfilippo

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Topics:

  1. Passive income strategies
  2. A change of heart in business direction
  3. Pricing your online product or program


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Build a Badass Business: Episode # 19: Passive income strategies, changing business direction, and pricing a product or program

Coming to you straight from her basement home office in suburban New Jersey, this is Build a Badass Business with Diane Sanfilippo. Diane is a New York Times bestselling author and serial entrepreneur. She’s here to teach you how to grow and develop a successful business you love, and how to create raving fans along the way. Here she is, your host: Diane Sanfilippo.

Diane Sanfilippo: In this episodes, I answer questions about passive income strategies, a change of heart in business direction, and pricing your online product or program.

Dr. Scott Mills: Tracy asks; “I absolutely loved your recent advice about making sure your income isn’t directly linked to your time. Can you provide a few samples of how a person can do this in different industries? It’s obvious to me how you do this as a blogger/author, where you’re producing content that lives on and generates income. Are there creative examples of people doing this in industries that have traditionally been billed hourly? I am a free lance writer for nonprofits and small businesses, and I almost always get paid at hourly rates. My business model has been wildly successful except for the fact that I can no longer take on more clients, so I have maxed out my earning potential. In fact, I’ve probably taken on more clients than is sustainable in an attempt to meet my financial goals. My hourly rate is fair to both me and the client, but being so tied to hours is not ideal and limits growth.”

Diane Sanfilippo: Alright Tracy, this is a great question and I think there are a couple of answers here that would be really helpful for you and anyone else who is curious about creating what we would call passive income. It doesn’t mean there’s no work involved with it; it just means that there’s a way to earn money without a direct exchange of your time for dollars.

So what I can say for you is, number one, it depends on what you’re interested in doing with your education and experience. So what I mean by that is, if you think training somebody else to do what you do, maybe it’s somebody who already has the experience and the credentials but you want to loop them into the network you’ve created around your work, or you think that you have so many referrals coming in but you don’t have enough people to do the work, which is kind of what you’re saying now. You have more than you can really handle. One approach might be to just bring somebody on to work side by side with you, and you could actually take a percentage of the amount that they’re making, because you made the referral. So that’s a really common thing to do amongst different types of practitioners.

Early on when I had offerings of coaching on my website, I would refer people to other people. I did not take a cut of that, but that was just because I had so many people coming in who needed nutrition support or some kind of functional medicine support and I wanted to refer them, but I could easily have said to anybody I was sending them to, I’d like 10% of whatever it is that you’re making on this client or patient or what have you. So that’s a totally viable approach to earn money without the work for your hours.

Another thing you could do in this case; and this really applies to almost any type of service or skill that you might have. So if you’re listening and you’re like, that’s not what I do, I don’t know if that would work for me, it really does work for anyone. So the whole referral thing, that’s a pretty obvious one to start out. But, another thing you could do, and I think Pat Flynn is a really good example of this. His podcast, which is widely popular, called Smart Passive Income; he has a website as well. He was, I believe he was an architect, and then he was taking an exam, an architectural exam that was really difficult, and he started documented how he studied for the exam and how he passed the exam with different studying tips and tools and things like that. You wouldn’t normally think an architect would create passive income online, because obviously their work is very specific and it’s not an online business, but he ended up later charging for his study guide.

So there could be a way that you talk about, either how to create a successful business in the market that you’re in, because obvious you’ve done that. You could create a tool that is maybe for the clients that you have that helps them do maybe part of the work that you do more easily. I don’t know if this totally makes sense, but as a writer for nonprofits and small businesses, I could see this as, if I were to hire you if I needed a writer, maybe you would have some kind of eBook that you would say, before you hire me go through these steps, because this is actually going to help be much more efficient when you hire a writer. You spend $10 or $50 or $100 on this eBook program that you’ve created, and myself and my team can get to a place where it’s actually going to cost us a lot less to work with you because we don’t need as many of your hours if we do some of the work ahead of time. So if that makes sense, I could see that as being another way.

I could also see, as I had mentioned, an eBook or some kind of program for other writers to build their business. There are a couple of different ways to always look at helping people, whether it’s directly with the service that you have or it’s teaching them something that you’ve learned about your industry or about how to get your business going in that industry. So, hopefully that helps. I think both of those; that’s almost 3 different directions, would be really good for you. I do think that even though you may not be what you would consider a blogger or author for a website or something like that, you should still have a website. Obviously you’ll have one with your services, so this is a great place to put some kind of program or eBook or what have you that’s related to your business and get it generating some income for you.

Dr. Scott Mills: Katie says, “You were speaking right to me when I listened last night on my walk. You were talking about being jazzed up about one thing for a while, and then finding yourself not as jazzed up about that anymore, but lit up by something else. I’m very much in that place right now. It’s not that I don’t care about nutrition or the biz I’ve been building being an NTP. I’m just way more into more mindset/spiritual side of things, and I’m feeling stuck. Yes, I can weave that into my work with clients, which I do, but at some point I wonder if I need to rebrand. And if so, what does that look like? That feels like an insurmountable task at this point, probably more than you wanted to hear. I would love your opinion. You’ve seen my shifts, yet to most I’m still the paleo girl. Thoughts? I’m a nurse practitioner who went back to school for her NTP but pretty much worked as a nutrition coach the entire time, including moderating and then becoming a 21-DSD coach. My work with eating psychology for my clients has lead to more of the mindset and spiritual side of things, which I’m completely obsessed about. You talk about vortex; I can’t consume the books’ content quickly enough. Yet I’m totally branded as the 21-DSD paleo nutritionist. As I shift my social media and newsletter blog content, I’m losing followers left and right, which I suppose is fine, they’re not interesting but it still stings a bit. I’m just not sure how to proceed.”

Diane Sanfilippo: Alright, Katie. This is a tricky one because I think, I talked about this one a little bit in a previous episode where I was talking about rebranding as my name versus Balanced Bites, which again my URL for the website is still Balanced Bites but you could also type in my name dot come, which I think my name is a little bit hard to spell for some people, so I didn’t want to get rid of that BalancedBites.com altogether. But I hate to say that I just don’t know the answer to this. I don’t know what will be the right thing to do for everyone, because honestly until you’ve built such a big following that people do just know you very easily for your name. Robb Wolf did this, and his website was always RobbWolf.com, but when you think of Robb Wolf, you think of paleo and all the things that he’s done in the paleo community, and then obviously he has other lines of sort of thought and things that he’s inspiring people about.

I’m not sure, Katie, and I’m not sure if you want me to share what your website and brand is, because obviously just going by your first name it’s a little bit more anonymous here. I don’t know if people really know you yet. You have a decent following, but I’m not sure what you’re doing is so big that one way or the other is the right way to go. So for example, doing the nutrition thing and teaching programs or teaching things like a paleo challenge or Sugar Detox, etc., that’s a really great way to grow your following, and the people that do those things, you know a huge percentage of them will be interested in mindset and everything that you are looking to do, so it’s kind of a really good way to get your foot in the door, and it’s a really good way to build your following.

Because, quite frankly, focusing on the mindset stuff first is harder. It is harder to break through to people that a shift in their perception and a shift in their thinking will be beneficial to them, because it’s so much easier to say, “change your nutrition.” That being said, there are plenty of folks out there who, that is their focus, and that’s what they build upon from the beginning. If you feel like you don’t still have something to offer people on the nutrition side because you’re just not burning for it, then you can’t do it. You can’t stay there; you can’t keep yourself there if you’re not still burning for it.

I talked about making this shift, and the truth is, yeah I have almost more of a passion now for going back to my own roots, which is marketing and business. But, I’m still passionate about food and nutrition. I know when you travel, you’re still excited to share what you’re eating and what you’re finding to eat, and it’s still a huge part of who you are and what you want to teach people about, even if you don’t have the same passion to continue to develop new programs and new followings just around that.

I think that it doesn’t have to be so serious of a divide. You don’t have to just abandon one thing to ignite something else, and I think that you can find that sweet spot where you’re still bringing enough people in that you can help. And this is almost; you know, there’s an element to this where you want to think about, you know, I don’t want to alienate people who I can help. If talking about nutrition is just a softer entry, and you’ll be able to get more people in the door, as I said, I think that’s a decent thing to do and I think it’s ok, and because what you have to offer them when it comes to talking about nutrition is so valuable and deep; it’s not this shallow, it’s not that you don’t have education and experience around that, so I wouldn’t just toss that aside. At the same time, again, it’s your job to redevelop who you are and what you want to talk about.

So if you want to talk about more of the mindset stuff, you can set the stage from the beginning, and say hey, my name is Kate, here’s what my whole program is about, I’ll take you through a nutrition program. If you want to see which of these seems like a good fit for you, or we can talk about which one is a good fit, then the second part of what I do is around mindset and spirituality, and here’s what I do. I think that’s totally fine to set the expectation up front with people who are coming to you for help that that’s part of what you do, and then people can turn around and walk the other way if that’s not something they’re interested in. They can leave their website if they’re like, eh, that’s not really for me. Then that’s fine, you don’t need them to come to you for help, and I think that’s totally fair, as well.

Now when it comes to the branding and social media and all that stuff, I do think it’s about integrating those things as much as possible. You see what I’m doing on the Instagram for my main account, Diane Sanfilippo. Again, I mentioned, I honestly believe the account has not grown faster because I changed the name of it. So people couldn’t identify very quickly that it was about nutrition, or health, or wellness when they just see @DianeSanfilippo. So if they don’t already know my name, then that’s already a barrier for them. But I made the decision, now I just have to live with it. It’s fine, I’m absolutely ok with having a greater depth in the type of relationship I have on social media than more followers. It’s ok. But I think that you can pepper in some of the stuff that you’re really passionate about, the same way I pepper in the marketing stuff.

I don’t know. I don’t know what the right answer is, I just know you have to do what feels right for you and you’ll attract the people who that feels right for them too, and you’ll lose the ones it doesn’t feel right for. I’ve lost followers over so many things; when the whole marriage equality came down and I posted a picture about that, because I have many friends who are now able to get married; I do not care at all that I lost fans and followers over that. Because it’s something that’s true to my heart. My business is me, and I’m ok with that. So if they don’t want to follow anymore, and they want to get upset about it, it’s not my problem. {laughs} I think that’s a totally realistic way to go, and just proceed with the things that you feel fill your heart up in the right way. But don’t abandon the stuff that you can still help people with, because remember that they can be a bridge to that next thing.

So if somebody really wants help with nutrition, as long as they know that this is another part of what you do and you’re not blindsiding them with this mindset approach, just remember that it’s important to be able to hold someone’s hand to help them cross over to what it is that you’re talking about, and then you can continue to guide them forward on the other things that you want to talk about.

Dr. Scott Mills: Last up, Deborah says, “Hi Diane! How did you decide on a coaching model for the Sugar Detox, and how do you make a profit from it? Thank you so much for creating this podcast and Facebook group. As a former graphic designer and Parson’s Grad School alum, I feel like I can relate to you in a lot of ways. I was very happy to meet you, Caitlyn, and Nabil when you came to my Barnes and Noble in Framingham, Massachusetts. I had purple hair, and forgot to take a picture with you. After many years as a UX designer and consultant, I’m now taking my experience to build a few products and services specifically in coaching eBooks, podcasts, and online courses for folks new to the industry. I realize there are many revenue models I could use and wondered how you determined the best method? Some things I’m considering are subscription models, a one-time fee, life time access to course and/or one time, sponsorships, etc.”

Diane Sanfilippo: Ok, so Deborah. I can tell you what I decided, but I can’t tell you what’s right for you because I just don’t know. Every time I do these things and create a new program, the question about how to charge, how much to charge, all of that, that’s a really hard part of it. Quite frankly, the harder part for me is that than it is what do I want to make, how do I want to create it and get it out there. That’s the easy part for me, and deciding how much to charge and how to do that and the timing and all of that is definitely tricky.

So what I decided on for the coaches’ program was a one-time up front and then an annual rebill at a much lower price, because when I looked at what we would be doing as a team to support the coaches, and how I was going to limit the enrollment. So we had only about 100 or 130 or so folks we let into the program initially, because I really wanted to manage very closely the number of people coming in and make sure it wasn’t too many for us to handle. And I mean that from a little bit of an administrative side, and also just the personal side. My team is not that big; there’s about 4-6 of us depending on looking at how much time everyone spends, and I knew that there was just going to be a lot of work involved in supporting everyone on the program just going through the test and certification and also creating graphics, and all of the support.

I know that program, I’m looking at a little bit of comparing it to similar programs, and seeing what the “going rate is”, but to give the introductory beta coaches a lower rate was something that I strongly wanted to do. I knew there were a ton of people ready to jump into this program, but we knew that we didn’t have everything completely figured out, and this is something that I do a lot of times. It’s almost what I’m doing with this podcast; it’s a little bit of a breeding ground for me of ideas and like, let me see what I want to throw out there, and what you guys are asking, and let’s make it a little bit more of like an organic living thing. I just don’t sit in a room and say, here’s what I want to teach people and now I’m going to make a program, and then I launch it and expect people to buy it.

No, my approach is, let’s create what it’s going to be sort of together, and that’s a little bit of what the beta program has been, and we are ready to launch the real program in September. Granted, we launched the initial beta program at the end of December; it was before New Years’. I was on vacation {laughs} and we thought we were going to launch the original new program to folks this spring or summer, and then it just didn’t happen. We had so much we were doing; we added more to it, what have you. So that was a little bit of the evolution there.

I did decide that an annual rebill at a much lower price would be reasonable because we will have a lot of ongoing support for the coaches; it’s almost like, it’s not just this coaching program, it’s almost a little bit of a business coaching program at the same time, so I get to use a lot of what I’m doing with Build a Badass Business with my coaches for the Sugar Detox and supporting them along the way. They really are kind of getting a business in a box, in a sense. And I knew that the website being able to search and filter and find coaches near you; again, this is something like I’m, last hopefully couple of days or weeks back and forth with our developer on this, but I knew that would be a powerful tool. And looking at some other certifications, like the CHEK certification and others to keep your certification up to date and keep yourself listed, there is an annual price.

I know some people balked at it; there was a little bit of, well it doesn’t cost me this much to keep my, whatever, medical certification or whatever it might be. I’m like, ok, you don’t have to do this. But this is what I feel myself and my team will need in order to continue to support that program from our side financially for all the development that we pay for for the website and everything else, as well as for the time that it takes to dedicate to not only creating materials, but supporting people just our hours back and forth of doing that. So that’s how I decided to set that up. I have it all set up through Clickbank, which is the same system that I sell the 21-Day Sugar Detox program through. They happen to have a rebill possibility or capability within them, so I use them.

I’m not saying it’s the most economical or best approach for everyone, but for me it’s easy and reliable and I know that it will work and I like that they have an affiliate set up, because eventually we may have a coach referral program where existing coaches can refer friends or colleagues or what have you to the program, and get a percentage of that as well. But the initial price for the coaches’ program will be much higher after the beta program kind of has ended, and we’re enrolling people.

I want to say I launched it at $297 or $197; I forget now, actually what the price was, and we will be launching early enrollment is what we’ll call it, it’s kind of the first round after beta, and I have a price for that of $697, but the program we’re anticipating will be either $997 or $1297 for a year, and then the rebill will be $197. I think the $197 a year for the support that we’re giving, I think it’s actually really cheap for what people will be getting if they want to be highly engaged and actually running this program. Obviously anybody who just decided, you know what, I’m not going to run it, I’m not doing it. I enrolled, I got the training and I decided not to do it, which I’ve done things like that. I’ve gotten certifications and then decided not to keep going with it; that’s totally fair, that’s fine. So then they’ll just drop out and not have that rebill.

That’s pretty much it. There’s no magic to it. You really just have to sit and think, what do I really need to make this worth my time, and what is it worth to someone else, and am I providing extreme value. Since I knew that the beta launch was not 100% to what we wanted it, I just knew that I didn’t want to charge the full amount yet. It didn’t make sense to me, we weren’t ready to do that. But honestly, we needed to be able to do some development. We needed to put time and resources and our own money into developing the program, developing the website, etc., and so the beta group, the reason that there was even a price for the beta group was to allow a lot of that development to happen. But we did want to welcome people in, and really engage them in developing the program because it’s for them. The program is not for us. So that was a really important part to me.

When you talk about something like a sponsorship; not a sponsorship, a subscription model, if you have something that’s being billed monthly, for example, I do think that there is a different level of commitment of delivery of content or some level of, if I’m paying every month I kind of expect there to be something that’s happening every month, if that even makes sense. Of course, services that consistently you’re using their resources, so something like a Mail Chimp service, or something that is being used on an ongoing basis, I think there’s something different. Webhosting, obviously, is billed usually monthly unless you pay for it annually. So I think you have to look at what type of service you’re offering. I would do the one where it feels like it makes the most sense, or it’s easiest for you to start out.

I wouldn’t say to create this huge program, with a ton of value, that people can download day 1 and then it’s a monthly subscription. Because what if you charge $9.95, or something like that, and the program is worth hundreds of dollars in value, and you charge a subscription model but they can download everything day 1; you’re not really going to get what you needed to get for that program.

I do like the idea of a one-time lifetime access. I did that with the 21-Day Sugar Detox for a long time, and I still have that, however when I changed the program significantly to offer a lot more, I had to kind of go back on what I had said about that, but that was because the program changed. So the lifetime access was to the program as it existed, and people did have access to download that and keep that forever. What we did was we offered; essentially we offered people their money back if they wanted to buy the new program. So the original program was $21; if they had that program and wanted to buy the new one that was initially priced, the entry price was $67, I gave that person a $21 discount. So they really still got what they had before if they wanted what was new. If that makes sense.

I do think it’s critical and extremely valuable and important if you decide something, and you change it going forward that you absolutely take into consideration everyone who supported you from the beginning, and make sure that you find a way to account for them and support them, because they were the ones who were there who bought the thing to start out. Every time I change something, my heart gets heavy because I try and figure out, what can I do for the people who already bought it. You’ll see that with my Sugar Detox program now.

Which, you know, it may change in the future as things continue to grow, evolve, and change, that I have an “already own something, click here” because I do feel it’s important to give respect to those people who got you started and really supported your work and your programs from the very beginning and not just abandon and ignore that they spent any money. It doesn’t matter that they spent $20 or $200, they were there to support you along the way and buy whatever it was that you have to sell

So that’s what I have for you on that one. I don’t know, hopefully that helped, but there is no clear answer. You just have to do what you think is best, and if you have to change it going forward, make sure you don’t forget about the people who were there from the beginning.

That’s all I’ve got for you guys today. Don’t forget to subscribe in iTunes so you don’t miss an episode. And drop me a review to let me know what’s speaking to you from the show. If you want to get in on the conversation and you haven’t yet joined the group already on Facebook, head on over there and join the Build a Badass Business group. I share insights and tips regularly, as well as answer your questions right there on the page. Do work that you love, and hustle to make your business grow like your life depends on it, because it does. Thanks for listening, and I’ll catch you on the next episode.

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