8 steps to diversify your business with digital products
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As an online creator, you make a difference. You don’t just sell online courses, you contribute to the sprawling creator economy and making the world a better place.
But what kind of difference are you making in your own life and home?
Often, creators juggle everything from content development to marketing, monetization, and more. It can be overwhelming and intimidating. You’re chained to your laptop for hours, with little work-life balance, just to make sure your business stays profitable.
If you’re looking for growing your business and achieving real stability, the answer isn’t more hustle. It’s diversifying your business with knowledge products.
Keep reading to learn how to diversify your business, the types of digital products you can use to diversify your business, and an 8-step process for getting started.
Let's dig in.
What is diversification, and how to diversify your income streams
Diversification is a strategy that focuses on adding new products or entering new markets in order to grow your business.
According to Igor Ansoff, the father of strategic management, diversification is one of four keys to business growth, along with market penetration, market development, and product development.
Only by learning how to diversify your business by creating new income streams can you effectively increase your profits. And there’s no better way to do that than with digital products.
Why diversify your business?
Business diversification at its core is about increasing profitability and driving higher sales, either by introducing new products and services or expanding into untapped markets. Here are a few reasons why that should be a priority for your business.
Multiply your income streams. Having multiple sources of revenue is a tried and tested hedging strategy for any business. It’s a good practice to strengthen your top-performing products and add new ones over time.
Survival. Sometimes, the decision to diversify your business is based on little more than sheer survival. Changes, both personal and worldwide, can disrupt your business overnight. And the product that mints money for you today may become irrelevant in a few years.
By creating multiple income streams, you can build a moat around your business, protecting it from instability, market changes, and economic ups and downs. But it takes a forward-thinking mindset and a willingness to adapt to change.
Reduce dependence on brands. According to CB Insights, online creators depend heavily on brand deals to monetize their business. But deals don’t always work as planned. If they don’t align well with your core messaging and follower base, you can lose your loyal following. Diversification can help you diversify your income streams without relying on brand deals and uncertain partnerships.
Create new challenges and purpose. Creators today are more ambitious than ever. By diversifying your business with knowledge products, you can venture into new areas of growth that drive your learning and excellence. With each knowledge product you create, you provide more value to your followers, keeping them hooked.
Nim Stant: inspiration for business diversification
“At first, I thought I was the only one in the world who was suffering because I’m in the travel industry,” Nim said. “I did not have my plan B at all because I just kept focusing on my lane.”
Nim Stant, author of The Yoga Journey, runs an international yoga retreat business for leaders. In 2020, she expanded her business into new locations and scheduled multiple retreats. Because of the pandemic, a lot of those retreats had to be canceled.
For three days, she felt stressed and fearful. Then, with her never-give-up attitude, Nim started a new program to help women create an online business. She also started a membership called the Go All In Club, which focused on personal wellbeing.
You can read many such inspiring stories about resilient entrepreneurs who reinvented their businesses during the global crisis.
How to diversify your business with digital products
The sales of digital-only products are skyrocketing everywhere and only seem to be gaining popularity. Top creators, influencers, and bloggers all sell some form of digital product. Some even have built their entire business around them.
So, what makes digital products so appealing, and why should you strongly consider selling them to diversify your business? Here are a few good reasons:
Huge market potential. Online spending has grown year-over-year for the last decade. The pandemic has further pushed the growth rate. Selling digital products to tap into this market potential is one of the smartest moves you can make for your business.
Unparalleled profit margins. Digital profits offer a considerably higher profit margin per unit compared to any physical product you might sell. If maximizing profit has been a challenge for you, give digital products a shot.
Simple yet scalable distribution. Your audience doesn't need to wait for days to get their hands on your product, like they have to when they buy a physical product. You can offer them instant fulfillment in a few simple clicks. No shipping, No warehousing. No delays. You can’t beat that for customer satisfaction.
Low barrier to entry. Do you have a computer with an internet connection? Awesome! Start creating your first digital product now. In terms of capital investment to build a business, it’s as low as one can get.
Freedom and flexibility. Want to stop trading time for money with every transaction? Selling digital products is one of the few ways to earn a healthy passive income. Enjoy that trip with friends or family, the one you could never do because you were too busy working. Your digital product will keep clocking in the sales for you.
Some digital product ideas for you
Find below some of the popular digital products your peers are successfully selling online. You can also check out our comprehensive list of 17 digital products that you can sell online for even more inspiration.
Sell online courses
You can transform your knowledge on any subject into an online course that people can seamlessly access and consume from their smartphones or laptops. You can deliver it in any format you are comfortable with: text, audio, or video.
Voice Body Connection sells an online course that helps people build powerful, confident voices. This is a good example of a topic that, years ago, would have been considered impossible to teach online. Clearly, anything you’re good at can be turned into an online course.
Check out these Kajabi online courses to inspire you.
Offer paid memberships
If getting recurring revenue is important to your business, you can sell exclusive memberships to your audience. Membership sites allow you to share useful information with people on an ongoing basis, Members pay a monthly or annual subscription. Every time you release a new update, your members get notified and can consume fresh new content that may include premium articles, Q&A sessions, workshops, and more.
Jewel Education offers a powerful membership plan to photographers that opens up only twice a year. It is full of live masterminding sessions and more.
Coach people online
Online coaching can be a highly interactive way to connect with your audience in one-to-one or group coaching sessions. As a creator, you can share your specialized knowledge with others and empower them to achieve success using your unique methods. This type of digital product is not only lucrative but gratifying.
Tamsen Horton's Preneur Business Klub (PBK) offers an exclusive club for Kajabi users to help them run a successful online business with her legal expertise.
Sell templates
Google Sheets, Canva templates, Figma files, Airtable templates, Notion templates, or anything that is built on top of popular software can be sold as a template online. Templates can be a great time saver for your audience members who don’t want to start from scratch. You can offer them a base template that they can customize to meet their goals.
Jane Loi, designed a comprehensive system in Notion to help creators launch, manage, and grow their newsletters. She branded it as Newsletter OS and clocked $20k revenue in just 3 months.
By now you would be pretty convinced that business diversification is important and that digital products can be a great way to do so. You should also have some ideas on the types of digital products you’d like to launch.
Now let’s look at some useful tips and tricks for making your diversification strategy a success.
How to create and launch money-minting digital products for your business
Business diversity sounds complicated. But, it’s as simple as launching a digital product. Here’s an 8-step process for getting started.
Step 1: Define your target audience
If you don't know who your customer is, you’ll struggle to sell your product. Spend some time researching your market and defining your ideal customer’s persona. Not only will this help you build a better marketing plan, it will also inform your product development and iteration process.
Step 2: Validate your digital product idea
Before spending too much time producing your product and marketing, validate your idea. Whether creating an online course, template, or membership, it’s important to see whether the idea that you have in mind would be attractive to the end-user. The easiest way to do this is by asking people what they are looking for and if they would pay for your product.
Step 3: Create your digital product
Now that you’ve defined your target audience and validated your idea, it’s time to create your digital product. If you’ve never built a digital product before, start with something that leverages your core skills.
For example, if you’re a graphic designer, create an online design course. This is what Russ Perry did for his graphic design clients and made $20k in 5 days.
Step 4: Set up your landing page
Give your product a solid online presence with a beautiful landing page. You can get started with Kajabi's awesome landing page templates or build one from scratch without writing any code. If you are starting and don't have a website, you can build one with Kajabi's full website builder system.
Step 5: Mark your price
Setting the right price for your product can be tricky. Price it too low and you won’t be able to create a viable income stream. Price it too high and nobody may buy it at all.
Sometimes the best way to know the right price for your product is to do competitive research and use that as an anchor. Don't be afraid of testing. You can run an A/B test of two price points, collect conversion data, and optimize accordingly.
Step 6: Build and market to your audience
Even before launching your course, you should start building an audience for it. As a creator, you may already have a healthy follower base to market to. You can start a waiting list for them to subscribe to and get notified when the product is launched.
Market your product as much as possible. There’s likely a big audience outside your existing follower base that would benefit from your product.
Related Read: 36 Types of Marketing Strategies & Tactics to Grow Your Business
Step 7: Keep optimizing
The best way to grow your business is through informed feedback loops. Ask your customers to give their feedback on what can be improved. Do an internal assessment. With digital products, you can easily launch an updated version and further enhance the customer experience.
Step 8: Leverage tech for scale
Scaling any type of business can be hard. You may have built an awesome digital product but without the right tools and systems in place, you will struggle to scale it.
Here’s where Kajabi's business suite shines — especially for creator businesses like yours. With Kajabi, you get everything you need to grow your business in one single package. Start with a 14-day free trial and see for yourself how easy it is to add digital products to diversify your business.
Ready to diversify your business?
Selling digital products is one of the smartest and fastest ways to diversify your business and reach the highest goals you’ve set for yourself. No need to trade your time for money.
We at Kajabi have empowered thousands of creators like you to succeed in this digital economy, and we can't wait to see what you come up with.
You can register for our weekly Q&A webinars, Monday through Friday, and learn the tricks of the trade when it comes to becoming a successful digital entrepreneur. Many have benefitted. You would too. Register today.
Don't forget to check out the Kajabi Edge podcast as well!
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