This just in… If you’re a course creator, coach, service provider, or membership owner, you have a knowledge business. In this post, we'll break down what that means.
This just in… If you’re a course creator, coach, service provider, or membership owner, you have a knowledge business. That simply means you’re building your business based on your knowledge and expertise.
If you’re new in the online marketing space, you probably notice that a lot of the messaging is way too rosy. Some people make it sound so easy. Basically, if you know some stuff, you can go create a business based on that. But there’s A LOT more to it than that.
In this post, I’m sharing some important questions to help people think through what it takes to build a business based on knowledge and expertise.
The Difference Between Knowledge Businesses And Product Businesses
While knowledge businesses are different from product businesses, the concept of selling knowledge and expertise isn’t new. It’s been around for a long time. For example, books, printing presses, service providers, lawyers, or management consultants.
Let’s consider what makes these businesses different from traditional product businesses.
In a product business, one of the main strategies for pricing is standard markup pricing. There’s some standard percentage that you mark up your product and it’s tied to the actual cost of production. In a knowledge business, we can’t think like that because our products don’t have hard costs.
Yes, there are costs, such as having guest teachers, coaches within your program, or a team. There are also costs of technology, such as the software that you use.
But the real issue is that adding another person to most programs doesn’t have much of an added cost. So how do you think about pricing?
What we sell is less tangible because we’re not selling a physical thing. That makes our pricing something different.
When you think about a physical product, a car, for example, some of the messaging you get will be aspirational, about how this product will make you feel. But for the most part, you’re going to look at the features to make your decision.
For a knowledge business, features and product specs aren’t what sell things. Features can matter, but generally, we have to talk about the benefits and sell the benefits and intangible amorphous transformation that people will get by buying our product and service.
Compared to selling a physical product, personality matters quite a bit more in a knowledge business. If you get big enough in a certain category of knowledge and are attracting a wider audience, brand personality doesn’t matter as much.
If you’re a service provider, personality matters less. But for the rest of us, our personality and the feeling of connection to us as an individual matters. People want to know about the person behind the brand.
Inventory and Logistics
A knowledge business doesn’t have inventory, unlike a product business. Product businesses are also involved in logistics, but knowledge businesses don’t have to deal with the physical delivery of products.
While knowledge businesses are different in some ways, they’ve been around for a long time, which means we can learn from people outside the online space. We need to think about and learn from the example of offline knowledge brands.
3 Pillars of Building a Knowledge Brand
There’s more to building a business around your knowledge and expertise than following the step-by-step blueprint that the gurus swear by. Before you invest a lot of time in effort in trying to sell your knowledge, make sure you consider the following criteria.
Be an Expert
In the space that we operate in, your level of success, staying power, ability to consistently make money, and all that stuff, will be directly related to your level of expertise. There are multiple kinds of expertise at play here, such as expertise in your subject matter and expertise in marketing and business building.
If you’re a Facebook ads manager, you’ve got to have subject matter expertise in Facebook advertising. If you teach people gardening, you have to have subject matter expertise in that area.
You also need to build expertise around marketing and business building. We’re all marketers. If you’re in the online business space, you’re a marketer. If you can find an edge that’s not even related to your subject matter expertise but in business building, that can make a difference.
If you have that edge because you market better, you message better, or you’ve found a particular way to build a moat around your business, you have a leg up. The businesses that thrive have found the thing that makes them special.
Solve a Real Problem
It goes without saying, but ultimately, the amount of money that you will ever be able to make in your business is tied to the benefit. It’s the level of benefit that people get from what you sell times the number of people who have that problem.
It’s not just about the pricing but about the value. What is the benefit to people? How much is it worth to your customers to solve that problem?
If you’re selling a solution to a smaller problem that people aren’t willing to pay as much, then you need a larger audience who is willing to pay. If you solve a bigger problem, you need fewer people. The bigger the problem, the more money you can make. But no matter what you’re looking at, the problem that you’re going to solve has to be a real one.
If you solve something that’s not a big problem, it’s going to be a commodity. There will be all kinds of competition and prices are going to be driven down consistently, and you’re going to have a hard time building a consistent business.
If what you sell is information, that tends to be a smaller problem because getting access to information is easier today. But if you sell people something that will facilitate implementation, it’s not just information but it’s your eyes on their material, your guidance, your live coaching, and things like that, that solves a bigger problem because that’s harder to get.
Focus on the Quality of Service
In a knowledge business, the quality of the service and customer experience are paramount. Providing exceptional service and serving the heck out of your customers has a couple of huge advantages.
It will lead to repeat customers. People won’t put up with crappy services. If you’re a coach and you provide crappy service, people will find another one.
So you need to think about how to craft your solution so that it serves your people the best way possible. It’s critical to building your business because it will lead to repeat customers and social proof and brand advocates.
When you serve your people well, they’ll get results. Other people will see it and buy from you too. Happy customers will recommend you to other people.
Focus on the serve-first mentality. It’s important in building a brand based on knowledge and expertise over the long term. It will help you build a business that can support you and your family for years to come.
Selling knowledge and expertise is a well-established business model. Building a successful knowledge business depends on these three pillars. One, you have to be an expert (this isn’t something you can avoid). Two, you have to solve a real problem and recognize that the bigger the problem, the more money you can make solving it. Three, you need to adopt a serve-first approach and focus on serving your people so that you get repeat customers and brand advocates.
If you’re trying to build a business based on your knowledge and expertise, I’ve got good news. You can get access to my FREE training program, BADA$$ Online Marketing University. There are multiple courses, including online marketing foundations, online legal foundations, online financial foundations, list building, and more. Stop buying more courses and check out BOMU.