Today I want to talk about a different type of online business model. One that may very well turn out to be a perfect fit for the current economic climate. This is especially true if you’re a solopreneur or freelancer. This concept was very popular back in 2008 when Kevin Kelly of Wired Magazine first wrote about it.
To make a great living, you don’t need tens of thousands of followers, fans, or subscribers. At least, not with the 1,000 true fan approach. Before I go into the details, I think it’s worth mentioning how many people are striving for what amounts to celebrity or influencer status.
YouTubers celebrate hitting the 100k subscriber milestone.
In one sense, that’s great. It takes time and effort to do so. It’s not right to take anything away from those who’ve paid the price to build huge mailing lists, generate tens of thousands of fans or followers, and so on.
It’s a mistake, however, to assume that big numbers are translating into big dollars. Recently, I read about an Instagram Influencer (2.6-million followers) who was unable to sell more than 36 t-shirts when she launched her clothing line.
Her story isn’t an anomaly, either.
Not every “fan” fits the “true fan” criteria.
The true fan is someone who will buy anything you produce. If a true fan is willing to spend $100 a year with you, you’d need 1,000 of them to make $100,000 per year.
With this approach, you’d concentrate on acquiring a true fan in favor of a general (or traditional) follower or subscriber.
Building Big Lists
If you want to build a big mailing list (almost everyone does), your mindset is probably the polar opposite of what it would be if you were using the true fan strategy. With the traditional model, each subscriber represents potential. That goes for each software or app purchase, too. Is potential overrated?
Consider this, out of 1,000 subscribers, what percentage are true fans of yours? You can ask that question regardless of the number. What percentage would spend $100 (or thereabout) with you a year? What about everyone else? Do you hope to “convert” them one day? Of course. Still, to get another thousand subs (and another, and another), you may have to broaden your appeal a bit?
Over the course of a few years (and many topics later), you’ll find that certain topics have greater appeal than others. So, you create content and do your thing. Still, you’re driven more or less by numbers, aren’t you? If your product fails to generate sales, you blame the product, the timing, the sales process (and probably yourself). Most people up the price of their product because they believe, for example, that it’s easier to make a hundred bucks by selling one person a $100 product than it is to sell 10 people a $10 product. Both paths lead to the same destination, but one seems to be highly favored over the other. “Flavoured” for my UK friends.
If you get a 5% response from a list of 1,000 people, that’s considered good by the classical direct marketing standards. If you can inch up to 8% or 10% that’s a fantastic result.
Let’s change the context before we go any further. Here’s a visual for you…
Imagine this – you haul up a net of 1,000 literal fish into your boat. Out of that 1,000 fish, only 80 are edible. Only 80 (8%) can be sold in the marketplace. Only 80 will end up on a plate at a restaurant. The other 920 are inedible.
Suddenly, 8% doesn’t look so great anymore, does it?
Maybe we’ve confused the numbers of followers, fans, and subscribers with profits? Maybe the lines have become blurred because we’ve celebrated the bigger numbers for so long, we’ve drawn false assumptions without even being conscious of doing so.
Does the Above Approach Work for the Average Solopreneur?
Let’s consider the single mom. Or, the person living on their own, freelancing and struggling to build a full-time income. Does the traditional list build, follower building approach work for them? Are they able to get the big numbers, on average?
Those who do break through usually admit that it took them years to do so. What if you can’t afford to toil away for years? What if you DO build a list, but hardly anyone buys? You can have 4,000 friends for life on Facebook, but most of them won’t send you a dime until you’re living out of your car. C’mon, you know it’s true!
Go ahead and laugh a little. No one is watching.
Thankfully, there has always been an alternative to achieving success without having blockbuster celebrity status. You can build a loyal following of customers, and serve their specific needs in a way that’s not easily replicated by larger, broader brands.
Big brands ultimately service larger, broader markets.
Most smaller brands, however, have been trained to focus on selling premium-based products. It’s almost as though they’ve been trained to think in terms of making fewer sales?
That said, some of the biggest companies out there today report that 50-60% of their total income is generated by their lower-priced products. The remaining income is generated by their top-sellers. What does that tell you about the nature of the economy in general?
Maybe your customer base could be increased by 40-50% by offering lower-priced products? This brings us back to the true-fan business model. A thousand people paying you $100 a year is a template that can be configured to fit your specific needs.
Accounting for your overhead, what would be the most cost-effective way for you to find and serve 1,000 true fans?
If the number “1,000” seems to be unrealistic to you, consider lowering the number to 500 to start with. Are there 500 people across the entire world that you can help? Do you think you could find 500 people willing to spend $100 a year with you?
What if your business is more or less entertainment-oriented? For example, let’s say you talk about a specific topic but do not have a specific product or service to sell?
Would a true fan be willing to support your show for $10/month? Or $100 a year?
Consider this, some people may be willing to invest MORE than that. You could connect to one of the many fundraiser platform options out there and that’s your business blueprint from start to finish.
Build Something New Alongside of Whatever You Currently Have
Yes, the sky is the limit when you’re in brainstorming mode, but let’s come back down to earth for a minute and look at some of the details.
If your current business structure is working (even a little bit), you don’t want to abandon it completely. Not yet, anyway. You may want to start by experimenting with this approach as a side project. In other words, keep your existing digital business going. Build this on the side and experience the results firsthand for yourself.
This may mean setting up a new blog, YouTube channel, Instagram page, etc. to test out your idea. Remember, we’re talking about finding a specific, underserved group of people. You may find a few in every crowd. You’re not looking for the “crowd,” you’re looking for the few within the crowd.
Rinse and repeat.
Within several months you’ll have a better idea of whether or not this is doable for you.
Also, consider how the pricing plays into this.
The objective here isn’t to reduce the price of your existing $1,000 product or service to $100 so it fits into the new strategy. This is an alternative approach, that’s all. If your current pricing strategy isn’t working very well for you, this is an option to consider.
Creating and selling lower-cost products isn’t an all or nothing proposition. A few years from now, 40% of your income may come from this approach and 60% from another. Or, the percentages may be reversed?
When it comes to business, there are a lot of gray areas. If everything were black and white (e.g. this works – this doesn’t), building a business would be a whole lot easier. The point is, it’s easier to part with lower dollar amounts and to do so more frequently than it is to part with a large chunk all at once.
You’ll Finally Have Easily Measurable Goals
I’m not a huge fan of setting goals. For me, I prefer structuring my day according to objectives. In other words, to-do lists aside, certain activities bring me closer where I want to be than others. That’s how I like to see it, but that’s just me. You may look at things differently, and that’s fine.
What a GOAL-BASED APPROACH will do for you with the 1,000 true fan approach is to provide a better context to your everyday activities. First, the basic direction of the business becomes time-bound. You’re looking to generate a specific number during a calendar year.
The everyday goal moves from “building a list” to “what can I do to reach 1,000 people this year?” This one aspect alone will help people struggling with what to cut out and/or what to keep in their daily schedule.
Second, the basic direction of the business now carries measurable activities. There is a metric to determine if a day’s actions have been successful or not. How close are you to having 1,000 loyal, repeat customers? How many of those customers are spending $100 per calendar year with you?
What needs to be built to accomplish this?
These constraints will also help you determine what additional tools and training you may need. Instead of bouncing around from activity to activity, you’ll enjoy greater clarity as to where you should be spending your time. This one point alone can have a transformative effect on your life and business.
Not Easily Duplicated
In the early day of my own business, I more or less “copied success.” In other words, I watched and learned from others. There’s nothing wrong with that. That’s basically how we learn how to walk and talk, right? We watch and imitate the people around us. That said, we’re all unique, too.
In order to attract the right people, you need to have secured a position in the market that matters to your audience. One that isn’t easily duplicated by other people. We’re talking about identifying your sustainable competitive advantage.
This is my definition of what true, personal branding is. It takes into account your age, your background, your experience – all the things that enable you to make a difference in another person’s life. You take all of that and pour it into a business context. Some people will love you, others won’t. Hardly anyone will feel indifferent about you.
If they do, you’re doing it wrong. You’re suppressing your real thoughts, insights, and perceptions. Be real, be yourself, and yes – you’ll be loved and hated. Yes, that sounds dramatic, but take a look around you.
This is the world you’re living in today. Disagree and a certain portion of people will see you as an enemy. It’s sad, but it’s true.
One final point, you probably already have some true fans if you’ve been in business for at least a year or so.
You may not recognize them because you’re busy focusing on different metrics. These are the people showing up in your inbox and engaging you in conversation. These are the people who truly value what you’re bringing to the table.
Build with them in mind and 1,000 true fan business model will be more than just another “cool idea” to think about.
Anyway, I supposed this is as good a place as any to put in the bookmark and wrap this up.
BOOKMARK fits – because I’m never really finished.
I hope this has helped you? Feel free to send me an email and let me know or share your thoughts below.