Back in 2008, Kevin Kelly, an Internet marketing expert with Wired, wrote a blog post that went viral in the business community. This blog post was titled “1,000 True Fans,” and the ideas it contained were so influential that it is still referenced regularly by marketers in many fields today.
The gist of the post is this: if you can offer enough value in your business to create just 1,000 “true fans,” you will be able to make a more than comfortable living. This is true for consultants focused more on providing services as well as for businesses that focus more on selling products; it’s true for B2B (business-to-business) companies as well as for B2C (business-to-consumer) companies; and it’s true in just about any field, including education.
The reason I want to revisit this classic blog post today is that, in this scary time of the coronavirus pandemic, many consultants are losing a significant part of their businesses and are being forced to reinvent how they do things in order to keep some money flowing in. Any change is scary and stressful, and when the change in question is costing you money, it’s doubly scary.
But not everyone is struggling. Those consultants who have a core group of loyal followers they can reach out to in such times with new offers will always be able to keep things running. And if you don’t have such a group, now is the perfect time to work on building it. After all, if you’re stuck at home, what else can you do? You can only binge watch so many Netflix series, work so many jigsaw puzzles, or read so many guilty pleasure books. Instead, read the information below and strategize how you can make your business bulletproof for the next pandemic.
The Value of a True Fan
OK, so what exactly is a “true fan”? Here’s Kelly’s definition: “a fan that will buy anything you produce.” So, they will buy your book, but not only that, they’ll buy the audio version and the Kindle version, too. They’ll read and comment on all your blog posts, read and comment on all your social media posts, and open and read all your e-newsletters. If they are people in a position to hire you to do virtual or in-person presentations, they’ll not only hire you that first time, but they’ll bring you back over and over.
How much is such a fan worth over the lifetime of your business? Well, obviously it varies. Someone in a position to hire you to do professional development in her school can be worth thousands of dollars to you in a year and many thousands over multiple years. Someone who reads your blog posts (free), newsletter (free), and buys your book ($20 or $30) isn’t worth nearly as much to your bottom line (not talking about their value as people–I’m sure they’re all fine folks–just strictly talking about their financial value to your business).
According to Kelly’s blog post, the goal is to earn $100 on average per year from each true fan. So, 1,000 X $100 = $100,000 a year. I think we can all agree that that’s a solid income, though of course if you can create more true fans, you have the potential to make much more.
Doing the Math, Part 1
OK, so how do you get to that $100 average per true fan? Let’s dig into the math a little bit more, because it can be tricky. For most educational consultants whose businesses have followed the traditional approach, the main source of income has been live presentations: workshops and keynote presentations in schools and at conferences.
Let’s say you’ve built up your name recognition in your field and you can get $4,000 per presentation. So, to make your $100,000 goal, you’d need 25 such gigs per year, an average of just over two per month. If you’re getting that many speaking gigs per year and getting $4,000 per gig, congratulations! You’re way ahead of the pack.
The other way most consultants have made money in the traditional approach is through book sales. But the amount of money book sales contribute to your bottom line (unless you’re a best-selling author) is probably miniscule in relation to what you make from presentations.
This is true for several reasons. First of all, you only need to convince one person to hire you to do a presentation to make $4,000 (if you’re getting that), but if your book costs $20, even if you got all of that purchase price (and you don’t), you’d have to convince 200 people to buy a book to equal that one $4,000 speaking gig.
And, of course, if you published your book through a traditional publisher, you probably get the standard 10% royalty per sale, so you only get $2 out of each $20 sale. Now you have to convince 2,000 people to buy a book to equal one presentation fee!
Now, that’s a simplistic explanation. And most consultants realize that they’re never going to make any significant money with book sales, but what those books do is give them credibility, and that raised status helps to get them noticed and hired for more speaking gigs. So, being a published author should absolutely be part of your strategy—it’s just that its financial contribution is indirect.
Of course, you might also have other ways to monetize your work. Maybe you’ve created an online course bringing in, say $49 per purchase, or $79, or maybe even $99. Much better than book sales, but not nearly as much as a workshop. But if you can market it successfully, you might be able to make as much with your online course as you do from speaking. Or maybe you have a podcast with paying subscribers, or a free podcast from which you get ad revenue. There are a lot of ways to make money, but most ways consultants make money fall somewhere between the high revenue of a workshop and the low returns of book sales.
Whatever monetization methods you have going, your true fans will buy into it. So, go back through your files and use your actual data to come up with a realistic figure for how much the average true fan means to your bottom line per year. That’s valuable information that you need to know.
Doing the Math, Part 2
OK, so now you have an idea about how much you can expect to make from your average “best of the best” customer—your true fans. But for most consultants, you have many more “regular fans” than true fans (regular fans being those who like your work but, at best, they might ask you to come do a one-day workshop once or maybe buy a single book). More likely, they’ll be content just to join your free mailing list and never make a purchase. So, it would also be a good idea to look at the math to figure out the lifetime value of a regular fan.
Again, as with true fans, there’s a wide range of income possibilities when it comes to regular fans. The difference is huge between a regular fan who likes you enough to bring you in to his school district to do a one-off workshop that pays $4,000 and one who never pays you a cent. There are many more of the latter than the former, and some number in between who will maybe buy a single book at some point.
Just as an example, out of 1,000 regular fans, let’s say that three bring you in to their districts to do a single workshop. $4,000 X 3 = $12,000. Now, let’s say that another 50 buy a single $20 book on which you make a $2 royalty. 50 X $2 = $100. And the other 947 never make a purchase. Again, this is just an example and your numbers could be (probably are) very different. But in this scenario, your average lifetime value for a “regular customer” is $12.10–$12,100 divided by 1,000. I don’t know what you calculated for the lifetime value of a true fan, but I’m pretty sure it was at least a hundred times more than what you can expect from a regular fan.
So do the math once more, this time for your regular fans. I know you probably don’t have all the data you need to be exact, but take what data you have, make some educated guesses, and come up with a figure that you feel pretty confident represents the lifetime value of a regular fan.
Again, this is useful information for you to have.
So, What Does the Math Mean?
I think the conclusion we should draw after doing such an analysis as the above on our consulting businesses is obvious, and it was the main point Kelly was making in his blog post: It makes a great deal of sense to spend the vast majority of our time focusing on our true fans and trying to get that group to become a “tribe” of like-minded people with us as the unifying factor.
The nice thing is that you won’t really lose anything by putting a laser-like focus on your true fans to the exclusion of the regular fans group. Regular fans are those who only feel a casual connection to you and your work, so they aren’t likely to be offended if you don’t communicate with them constantly. In fact, they might be put off if you communicated with them too often. And remember, at least financially, even if you lost all of your average fans at once (and you won’t), it wouldn’t impact your bottom line all that much.
The Good News, Part 1: Communication
OK, if everything above has convinced you that your best strategy for developing a solid income from your consulting business is to focus on creating and keeping satisfied as many “true fans” as you possibly can, the next question is obvious: how?
Well, I have good news for you. In Kelly’s blog post, he talks about how the business world has changed in the past 15-20 years due to technology, and these changes mean that independent consultants can now compete with big companies for attention and customers. Tools that used to be prohibitively expensive are now available to and affordable for anyone. The two main areas in which this is true are communication and payment systems.
In the area of communication, the tools available to you are mind-boggling. When I started my consulting business twenty years ago, only a small percentage of consultants even had websites. And if didn’t have one and you wanted one, you had to hire an expensive programmer to help you put it up. Now you can create your own website on a platform like WordPress without even knowing how to code.
In addition to websites, e-mail providers, blogging platforms, e-newsletter templates, and social media platforms like Facebook and Twitter give you a variety of ways to find and keep in touch with your true fans. Most of these platforms didn’t even exist when I started my consulting business.
The key is to choose a couple of these tools that you feel comfortable with and then use them to communicate consistently with your followers, providing them massive value from free content and then periodically sending them an offer to purchase one of your products or hire you to provide one of your services. Keep in constant communication with your true fans, and when you do send them an offer, they’ll buy it.
The Good News, Part 2: Self-Publishing and Payment Systems
In the area of payment systems, one of the biggest changes in recent years is the rise of self-publishing tools and payment software that allow you to bypass the old traditional publisher model entirely and establish yourself as a respected authority on your topic—all while making more money than going the traditional route.
Now, I’m not saying that you shouldn’t try to get a book contract with a traditional publisher. If you can do so, fantastic! Having your name on a physical book published by a big-name New York publishing house is still one of the fastest ways to establish your authority. But it probably won’t make you much money (except, as noted above, indirectly).
And let’s face it. Those publishers only publish a handful of books each year and the competition to be one of those few is daunting. That’s where self-publishing tools and platforms come in, and there are many good options available to you today.
You can write your book as an e-book and publish it on Amazon using their Kindle platform and Amazon will even help you promote your book (there’s a program called KDP Select that you can use to promote your book in the Kindle store).
True, you can’t sell an e-book for nearly as much as you can a physical book (typical prices are in the $4.95 to $9.95 range), but you also get to keep a much higher percentage of the sale price than you do with a traditional publisher—often 70%–so it more than evens out. Many e-book authors actually make more per sale of their e-books (even with the substantially lower purchase price) than they would if they sold a traditionally-published physical book.
And if you want to have a physical book, you can do that through Amazon, as well. Their former print-on-demand service, CreateSpace, is merging with Kindle Direct Publishing so that now you can offer your book in both digital and print-on-demand versions by going through the same service.
Bottom line, the barriers to entry for becoming a published author have become almost non-existent. You still need a good idea, of course, and you still need to write the book (though, for that, you could even hire a ghostwriter if writing’s not your jam), but then it’s just a matter of going through the steps to get it published through Amazon. Then Amazon acts as your shopping cart, collects the money, and sends you a check.
And book platforms aren’t the only publishing options you can tap into today. Online courses have become more popular each year, and having an evergreen course on your website can give you another stream of income. And, if you’re willing to climb a bit of a learning curve, you can do it all yourself—add shopping cart software to your site, put up a landing page, drive traffic to the page through a Google ad or Facebook ad, and collect all the profits. The great thing about an online course hosted on your own website is that you do the work once to get it all set up, and then it makes money for you 24/7, even while you sleep—and you get to keep 100% of it!
How COVID-19 Has Changed the Game
Now, everything I’ve said above was true a few months ago, and it’s all still true today. But in a way, everything above is even more important today than it was just a few months ago.
That’s because, with the global impact of the novel coronavirus pandemic, most consultants have had their businesses turned upside down. Suddenly, many consultants who have made live presentations their bread and butter over the years have had to learn how to switch everything over to virtual platforms. It has been a massive learning curve for just about everyone, and all that learning and conversion time is time spent not actually making any money.
So, what can you do about the situation? Well, in addition to making the live-to-virtual shift, there are other things you can do right now to bring in enough money to keep the lights on. And this is where your true fans come in.
How? Well, could you take a kernel from a previous book or one of your workshops and turn it into some sort of short digital product like a checklist or infographic that you can offer for sale for a small fee ($5-$10)? You might not have ever done this because you thought to yourself, “Who would pay money for that?” You know who would pay money for it? Your true fans, that’s who! All you have to do is create the product, then e-mail your true fans and say, “I have this new thing for you. Go here to get it.”
Or maybe you’ve been working on something with a bigger scope—an e-book, book, or online course, for example. Now’s the perfect time to finish that up and do a launch. Again, start with your core group of true fans. You can even send a handful of these people your pre-publication draft and ask for feedback to help you round it into shape. Offer to give this small group a free copy when it comes out as your thanks—in return for giving the final draft a glowing review and recommending it to their friends. Many e-book authors have been using this strategy over the past five years to make a big splash (and a hefty sum) on launch day. Why not you?
And then there’s live webinars, either free or paid. If you’re comfortable with webinar software and have a great presentation you can teach through that format (or a topic you can retrofit to be a webinar), this is another great avenue to pursue right now. You could offer the webinar for free to everyone on your list (true fans and regular), give them some great content, and then pitch an offer for a paid product or service at the end. Or you could put all the value into the webinar that you can and charge a fee to bring in some quick cash. Again, your true fans will pay money to attend, and some of your regular fans might join them, as well.
Conclusion
As I mentioned at the beginning of this post, Kevin Kelly’s article, “1,000 True Fans,” has become a classic in the marketing world. And that’s because it contains several kernels of truth about business. The big takeaway point is that a small group of hard-core fans will constitute the bulk of your sales and profits, and it therefore makes a great deal of sense to focus on these true fans in everything you do and to try to increase the size of this group.
But there’s another key point in Kelly’s article that bears mentioning: that focusing on your true fans is also ultimately a more satisfying and fun way to do business. They obviously resonate with your ideas or they wouldn’t be buying all of your products. They’re also the ones who will interact with you on all your social media channels. And when you interact with your true fans, you quickly find out that you’re a like-minded group of people who enjoy talking to each other. So, the very same people who mean the most to your bottom line also turn out to be the people you enjoy spending time with. You can’t beat that!
In the final analysis, if your business is going through major turmoil due to the pandemic, the most profitable use of your quarantine time is to focus on your true fans, communicate with them more, make a new offer or two to them, and try to grow the size of this core group. It will pay off in both the short-term and the long-term.
