Many people in the hobby niches I hang out in seem to be successful in business but aren’t. Not really.
I’m including my own side projects in that right now, but I am hoping to correct this very soon.
You see, we associate one or two visible metrics with behind-the-scenes success, and in this article I would like to show you how a “real business” is built, versus what you might mistake for success.
Visibility versus viability
The obvious not-success-but-looks-like-it we all know about is the famous “influencer”.
We assume with such a large platform they must be rich, or at least doing very well financially, and with that large income of course they have put that surplus income into a thriving business.
But it’s not true for possibly most influencers that you see.
Visibility is not necessarily correlated with income.
A platform is a huge asset, having a lot of reach and visibility would definitely give you a head start, but a shocking number of big social media superstars are relying on either a day job or sponsorships/advertising, and not making as much as you would think.
Success is sustained
Another type of not-really-successful is where the person has “made it” with no follow up. Or was riding high and then not been able to sustain.
This is the category that Maker Hacks is in. During the 3D printer gold rush my site was doing very well, ranking first page and better for lots of $$$keywords$$$ and I was selling digital products around 3D printing … and then my main merchant went bankrupt, I failed to keep my products updated with the changes in the field, and my email vendor had issues …. blah. My fault.
I don’t even get sent much to review any longer, when before I had so much sent I used to give more of it away than made onto the site.
So while the site still makes some money, and I still rank fairly well for some still useful phrases, it is not a real business. Heck, if it wasn’t for my beloved Glowforge machines it would only really be described as a hobby.
A lot of Kickstarters are like this. Successful campaign, lots of income all at once, maybe deliver on promises, maybe even on time, then …
It’s kind of like the “difficult second album”. Not a given and harder than it looks.
How to turn your platform or product into a business
At the very least you need systems for these three things:
- Acquire customers – Unless you only ever want a one-time launch, then you need systems for constantly acquiring new, paying customers, and not just sales either, but customers. Visitors aren’t customers, email subscribers aren’t customers, and while cash is lovely, it’s better to have been paid AND know who your customer is. This is why my books on Amazon were good for my reputation but didn’t directly grow my customer list.
- Onboard the customers – One of the many, many ways the “get rich quick” crowd burned their reputations was by having massive launches and then leaving their customers to figure things out (or more likely get confused and demand refunds). Onboarding is a lot more than sending out a receipt or a welcome message.
- Keep the customers loyal – Onboarding is just the start of keeping your customers happy. People are MUCH more likely to write a bad review or tell someone bad things about you than spread good news. If you do the bare minimum when delivering on your promises you are even less likely to get those great testimonials, case studies, advocates and referrals. Want to get your customers to upgrade or spend more with you in other ways? You better deliver way more than promised.
What I didn’t say
Notice I didn’t say “immediately hit them with an up-sell”. If your foundations are shaky then you will just accelerate your business into a ditch.
I didn’t speak yet about multiple income streams or raising prices either. Raising your prices should be earned. By all means reduce your costs so long as your quality doesn’t take a hit.
Other than raising your prices and increasing margin, the main ways to grow are:
- Lifetime value and share of customer – Sell more to existing customers
- Share of market – Sell more to more new customers, grow your percentage of the addressable market pie.
It doesn’t matter if you have an Etsy, an email newsletter, a blog or a podcast, if all you have is a marketing channel and no customer database that you are actively nurturing, you need to get on that right now!