It’s one thing to build an audience — it’s another to monetize your audience.
There are infinite products and services you can sell, but success in doing so ultimately hinges on one thing: Alignment.
The audience you target, products you offer, and ways you position them must be in alignment with each other.
To ensure your efforts to monetize your audience are not mismatched, consider the following six questions…
1. Will you monetize an audience of the many or the few?
Let’s say your initial goal is to make $10,000 on a product.
Here are three different ways you can accomplish that:
- Sell a $10 product to 1,000 people
- Sell a $100 product to 100 people
- Sell a $1,000 product to 10 people
Each requires a different type of product, approach, and audience.
To sell to the many, you’ll need massive audience reach.
It varies with every product and market, but assume if you do everything right you still might only convert 2% of your audience into buyers.
That means to make 1,000 sales, you’d need to effectively reach 50,000 people.
Another thing to keep in mind if you pursue the “many” route is the more people you sell to, the less customized your offering can likely be.
To sell to a large audience, you’ll need to offer a product or service that scales and is broad enough to deliver value to lots of different people.
But the “many” approach also has some advantages.
It enables you to sell at a lower price point which may make each individual sale easier to capture. And because your offering is likely to be more one-size-fits-all, your potential sales upside is relatively unlimited.
If you choose to sell to “the few,” you wind up with the opposite advantages and disadvantages.
Because you need fewer sales, it requires smaller overall audience reach.
Based on that hypothetical 2% conversion rate, you’d only need a total audience of 500 people to generate 10 sales at $1,000 each and hit your goal.
However, in order to pull that off you’ll need a more elaborate product or service, one that may involve customization and a greater time commitment.
Plus, your ability to scale may be limited which can reduce your overall earning potential.
2. Will you sell to an audience seeking a solution or an audience who doesn’t know they have a problem?
Let’s say you want to sell a book about how to master Twitter.
There are two potential audiences: People who use Twitter and are actively looking for ways to get more out of it, and people who either don’t use Twitter or think they’ve already mastered it.
One audience is looking for a solution — the other doesn’t even know they have a problem.
You can sell to either audience and position your product to speak directly to them, but one will obviously be easier than the other.
For people looking for a solution, it’s easy —you just have to convince them your product is the solution they seek.
For people who don’t know they even have a problem, it’s more complicated.
You first must convince them they have a problem, and then convince them your product is the solution.
It may seem obvious to target your product to people who are actively looking for a solution and that’s generally correct.
The real point of this question is it forces you to be honest with yourself about whether there’s an existing audience out there looking for your solution.
It’s not enough to consider whether or not people will benefit from your product — you also have to consider whether or not they know they have a problem!
If they don’t, you can still sell the solution and succeed, but it’s going to be more difficult and you’re going to have to first find ways to make them realize they have a problem that needs solving.
This is particularly important when it comes to positioning and the language you use to describe your product or service.
A quick example from a conversation I recently had with someone launching a new business.
He hoped to sell brands a service in which he helped them “tell narrative stories” about their company and products.
That’s fine, and probably valuable, but it’s unlikely many brands currently believe they have a “narrative stories” problem.
But the method through which this entrepreneur planned to help brand owners tell their stories was through Instagram and social media — now THAT’S a problem lots of brands know they have and are actively trying to solve.
Simply repositioning the service as a way to help brands get more out of social media by telling narrative stories as opposed to just selling the narrative stories angle shifted his offering to something that will likely be much easier to sell to an audience with a problem they’re already looking to solve.
Look for ways to do the same.
And by the way, sometimes the right positioning can even allow you to charge eight times as much money!
3. Will you teach people how to do something or do it for them?
Let’s say you’re an expert in resume writing and want to monetize your audience.
There are two ways you can package your expertise for an audience:
You can sell advice and templates people can use to create a better resume, or you can let them pay you to write their resume for them.
Both options solve a problem for a specific audience, but each one requires a different approach and appeals to a different subset of that audience.
If you choose to teach people how to do things themselves, the results of your service become somewhat dependent on your clients’ ability to execute and follow through.
It also means you have to sell the service at a price that’s less than they could pay someone else to do it for them.
Choosing this route means part of your sales pitch will likely be that if they learn to do this themselves, the results will ultimately be better and/or cheaper than if they hired someone to do it for them.
If you offer a done-for-you service, you make the opposite argument.
In this scenario, you’re saving the customer the time and hassle it takes to learn and do a thing, but likely charging them more money than it would cost them to learn how to do it themselves.
When you do the work for a client, you’re 100% on the hook to deliver the promised results, but you have more control over how it turns out in the end.
Neither of these options is inherently better than the other, but it’s important to choose which you want to offer and tailor your approach because each audience is different.
People looking to learn to do it themselves will typically be more price sensitive and people looking for you to do it for them will typically be more time sensitive — pitch your offer accordingly.
4. Will you sell something that earns or costs?
This might be the most important decision you make and it’s certainly the most important concept to understand when you want to monetize your audience.
Everything you sell will either help buyers earn/save money, time, and attention, or it will cost them money, time, and attention.
A few examples:
- An app that makes it easy to create custom graphics for social media helps buyers earn attention and save time.
- A comedy album costs buyers money, time, and attention because they have to listen to it.
- A paid newsletter like my This Is How I Do It newsletter is designed to help people earn money and save time.
- A paid newsletter with essays about life or commentary about last week’s football games costs buyers money, time and attention.
It’s significantly easier to sell products that earn or save people money, time, and attention than it is to sell ones that cost those precious resources.
In a perfect world, you’d offer a product or service that essentially pays for itself by earning or saving people more than they spend to buy it.
You can still succeed by selling products that cost people, but when you do you compete with everything else they spend time, money, or attention on.
This is why it’s so much more difficult to monetize “entertainment” offerings than it is educational or business-related creations.
In most cases, it’s not the price of your entertainment product that’s tough to overcome — it’s the competition for attention.
It’s not a big deal to pay $15 to buy a book— it’s a big deal to choose to read that book instead of watching Netflix, surfing Instagram, playing a video game, or doing any of the million other things competing for our attention.
This is not to suggest you can’t or shouldn’t try to sell creations that are purely designed to entertain people.
But understand what you’re up against when you do so and to try to find ways in to package your entertainment value with things that will ALSO save or earn buyers money, time, or attention.
5. Will you target new money or existing spend?
Let’s say you want to sell paid subscriptions to a newsletter about the restaurant industry.
Your target audience is restaurant owners who benefit from the news you share in that it helps them grow their business.
There’s a key question to ask yourself:
Are you trying to get restaurant owners to spend “new” money on your product or are you trying to get them to shift money they already spend on other restaurant industry news products?
Either can work as a way to monetize your audience, but there’s a huge difference.
If you go after new spend, you need to convince your audience the return on their investment will be enough to make it worth purchasing.
But if you go after existing spend, you only need to convince them your product is a better solution to their problem than what they currently buy.
In this hypothetical scenario, that means showing people your newsletter is better than that industry trade publication they subscribed to a while ago.
It’s always easier to get people to shift their existing spend than it is to get them to spend new money, so consider what other products in the market your target audience already pays for and how you might be able to convince them to shift their spend.
6. Will you sell to people once or over and over again?
Creators are obsessed with recurring revenue subscription models these days and it makes sense — who wouldn’t rather have money come in every month as opposed to one-and-done payments?
Well, I bet a lot of actual customers wouldn’t.
Subscription models are a great way to monetize your audience, but many consumers are starting to burn out on them and subscription fatigue has set in.
It’s worth considering the pros and cons of a subscription monetization model before you jump in.
Subscription can deliver you automated recurring payments, but don’t fool yourself —they also force you to re-sell your audience every month because they can unsubscribe at any moment.
Recurring subscriptions also allow you to charge lower prices up front which makes it easier to get buyers in the door, but if those people don’t stick around all that long it can be fool’s gold.
On the flip side, one-time payments (or longer subscription windows such as an annual subscription as opposed to monthly) may be a tougher initial sell because of their higher price point, but they often ultimately lead to more revenue.
Plus, customers who purchase tend to enjoy them more because the pain of that buying decision and payment is made only once.
That frees them to simply enjoy the product or service afterwards and not have to be in decision and assessment mode each month when a payment is made.
At the end of the day, the question of whether to choose one-time or recurring payments is like all the others I’ve mentioned in this post:
The only wrong answer is to not consider the question in the first place.