The demand for online education is booming right now
According to Forbes, online learning became a $100 billion per year industry in 2015, and it still shows no signs of slowing down. Millions of people are purchasing online courses, inside and outside of the traditional education system, in order to upgrade their knowledge and skills.
It comes as no surprise that in response to this demand, entrepreneurs and industry experts from all over the world have started creating and selling online courses to share their knowledge with others.
At Thinkific, we’ve felt the effects of this demand first hand as thousands of individuals and organizations have started using our platform to create their online courses.
Many of our customers are established organizations and entrepreneurs. For them, creating and selling online courses is a viable way to create an additional source of revenue for their business. We also have several organizations (like Hootsuite, for example) creating free courses to provide training to their customers, and in other cases, to their employees.
But for many of our customers, creating and selling online courses is their first step into the exciting world of online entrepreneurship, and their primary business model and focus.
And while we are proud to say that many of these people have been able to build a successful online course business (meaning they are enrolling students and generating revenue on a regular basis), there are other course creators that are not yet achieving their goals.
This isn’t unique to Thinkific, and it certainly isn’t unique to online course creators. This is the Pareto Principle (aka the 80/20 Rule) in action:
In every industry – from real estate sales, to financial services, to professional sports – the majority of the income (roughly 80%) is earned by the minority of the people in those industries (roughly 20%).
After looking at the data from thousands of customers, it is clear that for every person that has published an online course in the past year and is successfully getting new students, there is at least one other person that is struggling to get their enrolments up.
More often than not, it’s not because they didn’t create a great course. It’s because creating an online course is just one part of building an online course business. Building a business is the other part.
But let’s be real here. If you ask ANY type of business owner if it was easy for them to build their business, they will tell you that it wasn’t.
Rome wasn’t built in a day, and neither is an online course business
A close friend of mine recently opened his own barbershop. It took him 3 months of work and tens of thousands of dollars just to get his barbershop ready and be able to welcome his first customer through the front door. (I was his second customer, by the way. Someone else beat me to the grand opening by about 5 minutes!).
For my friend, those 3 months of prep work was just the beginning. Now, as a new business owner, he is working 7 days per week, with no other barbers on staff, to build up his clientele and recoup his startup costs before he hires more barbers. Why is he doing this? Because that’s the kind of work it takes to start a barbershop.
What does this have to do with building an online course business?
The point of this story is that it takes a lot work upfront to build a business. It doesn’t happen overnight, and building an online course business is no exception. There is a lot of work you will have to do, both before and after you create your course, in order to succeed.
Unfortunately, most course creators give up on their business before putting in the work required to ensure they will be successful. They stop digging for gold before they experience the big payoff that makes all the hard work worth it.
Okay, now for some good news…
Even though it takes a lot of work to build a successful online course business, there are plenty of other people that have done it before (check out our Success Stories if you’d like to see some examples). And because other people have done it before, there is a proven path for you to follow. You don’t have to learn from trial and error.
As self-help guru Tony Robbins (also an online course creator!) once said: success leaves clues.
Searching for those clues is what led us to reach out to over 30 experts and entrepreneurs and ask them what it takes to build a profitable and sustainable online course business.
We interviewed New York Times bestselling authors, bloggers, podcast hosts, serial entrepreneurs, business coaches, marketing consultants, and online course creators. These people have literally built their careers by sharing their knowledge with others, many of them selling millions of dollars worth of information products and online courses in the process.
After reviewing all of the valuable insights these experts and entrepreneurs shared with us, we managed to distill the process of building a successful online course business into 7 specific steps (well, more like phases, since each one of these phases has several steps involved).
I’ve done my best to summarize these steps in this article, and I’ve even included a few quotes from these experts throughout this article. That being said, if you’d like to learn directly from the experts themselves, I highly recommend checking out our online course From Passion to Profit.
With over 20 training videos, downloadable lesson summaries, action plans and helpful resources, this course will give you the in-depth training you need to build a successful online course business. But I digress..How to Build a Successful Online Course Business (Advice from 30+ Experts & Entrepreneurs) Click To Tweet
7 Steps to Building a Successful Online Course Business
Before we jump into Step 1, there is something very important that you need to understand:
By itself, an online course is NOT a business
Without an online course to sell, you can’t exactly build an online course business. But an online course is just one part of a business (the product). It’s not the entire business.
As you can see from the graphic below, a typical online course business has many other parts as well:
This may surprise you, but creating an online course isn’t even the first step in the process of building an online course business. Out of the 7 steps we’re about to go through, creating a course is Step #5.
You’re welcome to skip steps 1-4 if you want to, but I would advise against it and here’s why:
If you jump straight to creating a course without strategically choosing a topic to teach (Step 1) and validating demand for that topic (Step 2), you could end up creating a course that no one wants to sign up for.
Secondly, if you don’t build your brand (Step 3) and audience (Step 4) before you launch your course, you won’t have a way to stand out among your competition, or have anyone to promote your course to.
Even if you have the “perfect” course created today, without a compelling brand and an audience to promote it to, it will be very difficult to generate sales. No sales means no business.
So to save yourself many hours of effort and (potentially) thousands of dollars in course creation and marketing costs, don’t skip these steps.
Okay, let’s dive in…7 Steps to Building a Successful Online Course Business (Advice from 30+ Experts & Entrepreneurs Click To Tweet
Step 1: Decide what to teach
The first step in building an online course business is deciding what you will teach. What topic do you want to become known for? What topic are you expert enough to teach to others?
To be an expert at something, you just have to know more about your topic than the person you are teaching. That’s it. To that person, you’re an expert. Don’t overthink this.
Choosing your topic
Between the combination of your life experience and your professional experience, there are likely several topics that you know enough about to create a course on.
To help narrow down a specific topic, we recommend completing the following exercise:
On a piece of paper, draw 2 vertical lines to create 3 columns. Label the first column Passions & Interests. Label the second column Skills. Label the third column Experience & Achievements.
Next, start adding as many things as you can think of to each column (aim for at least 20 per column).
Once you’ve done this, identify the top 2-3 topics where your passions/interests, your skills, and your experience/achievements intersect.
For example, if you like science fiction (passion/interest), you’re a great writer (skill), and you’ve written several science fiction novels (experience/achievement), then “how to write a science fiction novel” is a viable topic to consider to teaching to others.
Identify a specific target audience
Once you’ve identified a specific topic to teach, the next step is to identify a specific target audience (aka a target market) that is interested in that topic.
Don’t make the mistake of thinking that your topic (and therefore your course) will appeal to everyone. If you try to create a course that appeals to everyone, it will likely appeal to no one. I know it’s counter intuitive, but trust me on this.
To give you an example, one of our customers (Lizzie Lasater) is a yoga practitioner and instructor. When she decided to create online courses, naturally, she decided to created courses about yoga.
Instead of creating courses to teach people how to practice yoga (a very broad and highly competitive topic) she decided to narrow her target audience to other yoga instructors (more specific). With other yoga instructors as her target audience, she created courses that are specifically about how to become a better yoga teacher.
Step 2: Validate market demand
Once you’ve identified a specific topic to teach, the next step is to validate the demand for that topic.
As a course creator, is absolutely sucks to spend several weeks, maybe even months (or years?!), creating an online course about a topic that you find out there is no demand for.
It’s a lot more efficient to validate demand for your topic upfront before you invest time, effort and money creating a course.
Here are 2 ways you can validate the demand for your course topic:
Research your competition
See if you can find other people or companies that are selling courses and other forms of training about your topic (or a similar one), or who serve your target audience.
- Bestselling books on Amazon
- Other online courses
- Popular blogs and forums
- Top podcasts on iTunes
- In-person seminars, conferences, workshops
- Online events (virtual summits, webinars)
- Networking groups on Meetup
- Coaches and consultants
If you can’t find anyone that is profitably teaching your topic to others, that is a red flag that there isn’t enough market demand for that topic to justify creating an online course (or building a business). Competition is proof of market demand.
What if there is no competition?!
On the rare occasion that you can’t find any competing products or services about your topic, that could mean one of two things:
- There is demand, but no one is serving that market yet (rare), or
- There is no demand, and you should pick a different topic
Either way, there is still one more step you should take before you pull the trigger and decide to create (or not create) your course.
A great way to gauge demand for your topic is to use Google’s Keyword Planner to see how many people are searching for your topic per month. The higher the search volume, the higher the demand.
Ask your target audience what they want to learn
If you access to your target audience, whether online or offline, the best way to find out what they want to learn (and would be willing to pay to learn) is to ask them directly!
Here are a few ways you can ask your audience what they want to learn:
- Ask your list of email subscribers
- Ask your fans/followers on social media
- Ask your past and/or existing clients
With each of these options, you can send people a link to a survey, ask them open ended questions directly, or ask them to have a quick call with you.
Another option is direct outreach (aka cold calling) to your target audience by phone, email or social media. Do this in a polite, non-spammy way of course.
If you can’t find anyone that wants to learn the topic that you’re thinking of teaching, you should probably move onto another topic.
The ideal scenario is you choose a topic that there is obviously a demand for (proven by competing products and services about that topic), but nothing that is for your specific target audience.
Facebook marketing, for example, is a broad topic with strong market demand (proven by all of the blogs, books, courses, consultants, seminars, etc. about this topic).
Assuming we want to create a course about Facebook marketing, let’s see what topics we come up with as we hone in on a specific target audience:
- Topic 1: Facebook marketing 101 (very broad)
- Topic 2: Facebook marketing for business owners (more specific, still pretty broad)
- Topic 3: Facebook marketing for local businesses (not bad)
- Topic 4: Facebook marketing for real estate agents (very specific)
- Topic 5: How to use Facebook to get more listings (ding ding ding, we have a winner!)
If you are a real estate agent and you want to learn how to use Facebook to get more listings, which course topic is going to appeal to you the most? Which topic would you pay the most money for? Probably #5, because it is the most specific. It is exactly what you want to learn.
Step 3: Create a compelling and unique brand
Once you’ve decided on a specific topic to teach, it’s time to start building your brand.
Don’t jump straight to getting your logo, website, and business cards designed. Those things do play a role in representing your brand, but they are not the starting point.
The starting point to creating a compelling and unique brand is making a conscious decision about how you want to be positioned in your industry. Branding is about positioning.
Your brand should position you as the go-to expert on your topic. Unless you’re positioned as an expert and a trusted authority on your topic, it will be hard to convince someone to buy a course (or any product or service) from you.
Even though we’re told not to, we do judge a book by its cover. Think of your brand as the “book cover” for your business.
Be strategic with your positioning
The biggest mistake that people (and organizations) make with their branding is trying to appeal to everyone. Don’t do that. Be strategic with your positioning.
Build a brand that appeals to your specific target audience. Don’t try to appeal to everyone, because everyone is not your ideal customer/client.
Here are some questions to consider as you create your brand:
How do you want to be positioned and perceived in your marketplace? What do you want people to think of when they think of you? Who do you want to attract? Who do you NOT want to attract? What do you stand for? What do you stand against? Why do you do what you do?
When your target audience is searching for information about your topic, you want them to find you and immediately feel like they’ve come to the right place. They should feel like they’ve found the exact person (or company) that can help them overcome a specific problem or achieve a specific outcome.
Identify your Unique Value Proposition
An exercise that we recommend all course creators complete is creating a Unique Value Proposition (UVP). Your UVP is what will help you differentiate yourself from your competition.
To create your UVP, answer these questions:
- Who do you help?
- What do you help them do?
- Why is that beneficial for them?
Once you have the answers to these questions, tie them together in a single sentence.
To give you an example, one of our customers (Elizabeth Rider) is a leading nutrition & whole living expert that teaches women around the world how to become the healthiest, most successful people they know (pretty good UVP right?).
Here is a screenshot of her website’s homepage:
As you can see, anyone who visits her website will be able to instantly figure out who she is, what she does, and who her target audience is. She has a clear and compelling brand. If you’re a woman who wants to become healthier and more successful, and you visit her website for the first time, chances are you’re going to feel like you’ve come to the right place. That’s what good branding does.Good branding makes your target audience feel like they’ve come to the right place. Click To Tweet
Step 4: Build your audience
Once you’ve decided how you want to be positioned in your market, it’s time to start building your audience.
Your audience is the sum total of all the people that you have the ability to communicate with through various distribution channels (your blog, social media, email list, personal network, etc.).
Why is it important to build an audience?
Without an audience that knows you, likes you, and trusts you, it will be very difficult to sell your course for the simple reason that you don’t have anyone to sell it to!
So the sooner you start building your audience, the better.
Size is important (but not the most important)
The size of your audience is important, but not as important as you might think. The obvious benefit of having a large audience is the ability to reach more people. If you have 10,000 fans on Facebook for example, your posts will probably be seen by more people than if you had 1,000 fans (all else being equal).
But the size of your audience is not as important as the relationship you build with your audience.
It’s more valuable to have 100 people on your email list that open and read every email you send them than it is to have 1,000 followers on Twitter that rarely see your Tweets or engage with you in any way.
When it comes to building an audience, loyalty and engagement are the most important.
Here are some of the most common ways that online course creators are building their audience:
1. Social media
Set up profiles and/or pages on the social network networks that your target audience spends time on. You don’t need a presence on every social media network. Choose the top 2-3 that make the most sense for you and focus your efforts there. Share your content, join relevant groups, start your own group, and engage in conversations. The goal here is to build real relationships with other people that are interested in your course topic.
2. Content marketing
Publish free content about your course topic as often as you can. Free content helps you build trust and authority in your industry. Common types of content that you can create are articles, videos, podcast episodes, images and infographics.
The more content you publish on your website and other platforms (like YouTube), the more likely your target audience will find you as they are searching for information about your topic.
3. Publicity & PR
One of the quickest ways to build your audience is to get in front of existing audiences. Writing articles for popular publications in your industry, getting interviewed as a guest expert on podcasts, and getting featured in traditional media (TV, radio, newspapers, print magazines, etc.) are all great ways to increase your exposure and build authority in your industry.
4. Networking & joint ventures
Build relationships with other experts and influencers in your industry. It doesn’t happen overnight, but building mutually beneficial relationships with others can lead to a number of opportunities including guest blogging, interviews, joint ventures, partnerships, and customer referrals.
5. Public speaking
Reach out to event hosts and organizers of conferences and seminars that your target audience attends. Offer to give a presentation about your topic. Some events will even let you sell your course directly to their audience, in exchange for a percentage of your sales. A major advantage of public speaking is you have the undivided attention of everyone in the room during your presentation, and that can be very hard to get online.
6. Email marketing
When it comes to marketing your online course (or any product or service online for that matter), email marketing is hands down the most effective way to generate sales. An email list of people that have expressed interest in your course topic and have given you permission to communicate with them will likely be your most valuable asset as an online course creator.
Start building your email list as soon as possible. Stay in touch with your subscribers by sending them helpful emails and links to your content on a regular basis. This is a great way to earn their trust before you ask them to buy from you.6 Ways to Build an Audience for Your Online Course Business Click To Tweet
Step 5: Create an online course
Creating an online course is definitely one of the more exciting steps in this entire process, but it can also be the most time consuming one if you’re not careful.
Most people spend several weeks (or months, depending on the course) creating their online course. Other, more experienced course creators have perfected this process and can create an entire online course in one weekend.
But regardless of how long it takes you to create your course, the process that you go through will most likely look a lot like this:
- Choose your course title and subtitle
- Create a lesson plan / course outline
- Choose your lesson types (audio, video, text, etc.)
- Create/record your lesson content
- Edit your lesson content
- Set up your course website
- Choose a price for your course
- Create assignments, worksheets, quizzes, and/or discussion boards for your students
- Customize welcome emails and completion emails for your students
- Create a sales page for your course
Instead of going through each of these steps in more detail right here in this article (which would make it wayyy longer than it already is!), I’m going to share a few of the most important lessons we’ve learned about course creation from the experts we interviewed.
For a more detailed overview of how to create an online course on Thinkific, you can watch this free video tutorial on our YouTube channel.
Create a “Minimum Viable Course”
A concept that has been popularized by American writer and entrepreneur Eric Ries in his book Lean Startup is the concept of Minimum Viable Product (MVP).
An MVP is a development technique used by organizations (especially startups) in which a new product is developed with sufficient features to satisfy early adopters. The final, complete set of features is only designed and developed after considering feedback from the product’s initial users.
Applying this concept to creating online courses, that means that you should not try to create the perfect course the first time. Instead, create a Minimum Viable Course (MVC).
The problem with trying to create the “perfect” course before you show it or sell it to anyone is that “perfect” is a very subjective term. What you think is perfect is probably not the same as what your customers/students think is perfect. Even if it is, your course does not have to be perfect in order to be valuable.
Perfectionism has stopped more people from creating and publishing their online courses than anything else. Don’t let this happen to you. If your course (imperfect as it may be) is good enough to help someone, then it is good enough to publish. Done is better than perfect.
Create a MVC as quickly as possible so you can publish it and get real feedback from real students. Based on their feedback and other important data (such as course completion and engagement rates) you can remove training, add training, and make revisions to your course to make it better.
Course length ≠ course value
Another big mistake to avoid is trying to teach everything that you know about your topic in a single course. Doing this will most likely result in a super long course that your students won’t complete and that takes a ridiculous amount of time to create in the first place. Wrong approach!!
Your online course is the shortcut
The purpose of your course is to teach your student how to get from Point A to Point B as quickly and as efficiently as possible. It’s the shortcut.Your online course is the shortcut. Help your students get from A to B as quickly as possible. Click To Tweet
You absolutely should not overwhelm your students by brain dumping everything that you know about your topic into your course. Your course should be as short as possible without sacrificing the key concepts in your training.
Don’t create 8 hours of training if you can teach your students what they need to know with 3 hours of training. As long as they learn what you promised to teach them, they won’t complain that your course was “too short”. Instead, they’ll probably thank you for not wasting their time with fluff or filler content.
Launch to a small test group first
Another important lesson we learned from the experts we interviewed is not to launch the first version of your course (your MVC!) to your entire audience.
Instead, you should promote your course to a small segment of your audience at a lower price than what you eventually want to charge for your course. If you do promote your course to your entire audience, consider imposing a limit on the number of students that can enrol in it. Once you hit your goal, you temporarily close enrolment for your course.
This strategy is often called a beta launch. The goal with this type of launch is to get your course into the hands of a small number of students who will “test” your course. In exchange for accessing your course at a reduced price, you ask your students to provide you with feedback to help you improve the course and testimonials to use in your future marketing.
Based on the feedback of your students, you can make changes to improve your course. When you have a revised version of your course that is better than the first and positive student testimonials to use in your marketing, you re-open enrolment for your course and sell it a higher price.
If you’re ready to start marketing your course, check out these 55 online course marketing ideas here.
Step 6: Focus on customer success
Okay, let’s pretend that you’ve already completed Steps 1 to 5.
- You’ve decided what topic you’re going to teach. It’s not too broad, and it appeals to a specific target audience.
- You’ve validated market demand for your topic. Thousands of people around the world are interested in it, and they’re already spending money to learn it.
- You’ve crafted a compelling brand. You are known in your industry as an expert on your topic. When your target audience finds you, they trust that you can help them.
- You’ve built an audience. You have followers on social media. You have people on your email list. You have relationships with other experts in your industry. You’ve been featured on other publications, podcasts, and media outlets.
- You’ve created an online course. And after promoting your course to your audience, you are proud to say that you have customers. Your business is generating revenue.
What do you do now?!
The happy dance, of course…
… just kidding.
Even though it is a HUGE accomplishment to get this far (and yes, you deserve to celebrate at this point!), there is still work to be done.
Acquiring customers is just the beginning. Now your job is to deliver on the promise you made to your customers.
Think of any local business you are customer of. A restaurant. A nail salon. A coffee shop. A convenience store.
These businesses don’t stay in business because they are constantly attracting new customers. They stay in business because their existing customers come back more than once, often bringing their friends and family with them. This same rule applies to your online course business.
It’s a lot cheaper to keep a customer than acquire a new one
If you are constantly investing in marketing and promotion to attract new customers, but you’re doing nothing to ensure the success of those customers, it will be very difficult (and expensive!) for you to build a profitable and sustainable business.
When a customer purchases your online course, this should not be the end of your relationship with them. This should be the beginning.
Your customers should be so thrilled with the training and overall experience that you provide to them that they purchase additional courses from you in the future, and they tell others about your courses too.
Here are a few ways you can increase your student engagement and retention rates:
1. Gamify the learning experience
Create incentives and offer rewards to your students for achieving specific milestones in your course.
2. Help your students be accountable
Pair them up with an accountability partner, offer 1-on-1 or group coaching calls with your students, or create a private group or discussion board for them to interact with each other.
3. Appeal to different learning styles
Don’t create training that appeals to just one learning style. Utilize different media types to deliver your content (text, video, audio, worksheets, quizzes, etc.).
4. Create small, bite sized lessons
Shorter lessons are more likely to be completed by students than longer ones. If it takes you a while to teach a specific concept, try breaking up the concept into several shorter lessons.
5. Send reminder emails to your students
If you notice that a student isn’t accessing or completing the training in your course, send them a polite reminder email to re-engage them. Show them that you care.
Step 7: Scale your business
The final step in building a successful online course business is to scale your business by creating systems and/or hiring people to ensure that it continues to grow.
According to Greg Smith, CEO of Thinkific, you should only scale something that works.
The 6 steps that came before this one are your chance to do just that. To prove that your online course business works. Once you have a business that works, it’s time to shift from spending the majority of your time working in your business to working on it.
This is accomplished by creating systems and hiring people to handle the repetitive, day-to-day tasks involved in running your business. The goal is to free yourself up to focus the majority of your time on activities that move your business forward, such as:
- Building your audience
- Building your network
- Creating sales funnels to acquire new customers
- Creating additional courses and/or services to sell to your customers
Here are a few of the key lessons we learned about scaling an online course business from the expert we interviewed:
1. Automate repetitive tasks
Identify the tasks in your business that are highly repetitive and not the best use of your time as an entrepreneur. Document the process for those tasks and delegate them to someone else, or use technology/software to automate that task for you. Every repetitive task that you automate today buys you more time to focus on other activities tomorrow.
2. Build a team as early as possible
To grow an online course business to 6 or even 7 figures in annual revenue and beyond, you’re going to need some help. Very few entrepreneurs are able to build successful and sustainable businesses without a team of people to help them make it happen. There is simply too much to learn and do, and not enough hours in the day for one person to do it all.
Hiring a virtual assistant or a personal assistant is a great starting point. From there, consider hiring help for other areas of your business including content creation and editing, marketing and advertising, branding, accounting, etc. These do not have to be full-time employees. Many course creators have teams that consist of freelancers and independent contractors from around the world.
“If you want to go fast, go alone. If you want to go far, go together.” – African Proverb
3. Tie your business to greater purpose
Sharing your knowledge by creating online courses is a great way to empower others through education and move humanity forward. But creating online courses is certainly not the only way to make a positive impact in the world.
There are countless organizations that are doing incredible things to make the world a better place. By partnering with other organizations and tying your business to a greater purpose, you ensure that as your business grows, so does the impact you make in the world.
Don’t forget to check out our new course!
I hope this article was helpful for you. I tried my best to summarize all of the amazing insights we captured from over 30 experts and entrepreneurs in our online course From Passion to Profit.
If you’d like to dive into each of the steps outlined in the article in more detail, then I highly recommend signing up for our course and learning directly from the experts we featured in each lesson. There are also downloadable worksheets at the end of each module to help you implement all of the concepts covered in the course.
100% of the proceeds from our course go directly to Pencils of Promise, a nonprofit organization that builds schools for children in developing countries. By signing up for this course, you will not only be helping us to achieve our goal of helping businesses through online education, you will also be helping children in developing countries get access to education. You will help to change lives.
There’s a free trial option if you’d like to check out some of the training, and we’d love to hear what you think of the course once you’ve watched a few lessons.
7 Steps to Building a Successful Online Course Business (Advice from 30+ Experts & Entrepreneurs) Click To Tweet
Tyler Basu is the Content Manager at Thinkific. When he’s not creating content to help people create and sell online courses, you can find him writing articles and interviewing lifestyle entrepreneurs for Lifestyle Business Magazine.
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