It’s Nearly Always Better To Sell A Consultancy PROJECT Than A Consultancy PRODUCT.

Don't productise your expertise too soon - and don't think subscriptions and course revenue will generate much income if you don't already have a strong consultancy practice.

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A few times over the past year I’ve noticed new consultants enter a sector and immediately begin developing a product line.

They create paid courses, events, books, private communities, or subscription newsletters. Then they begin promoting this on their social media feeds for a few weeks/months. Sometimes they even buy social ads.

It’s hard to judge the success of these, but given how quickly their promotion seems to fizzle out I’m guessing these efforts haven’t proven very fruitful.

There’s a reason for that.

The Hard Reality of Productising Your Expertise

Everyone wants to sell products with low marginal costs — that’s what makes it so difficult

Productising your expertise contains an obvious allure. The marginal cost of each additional customer is practically zero. In theory, you create a product, promote it, and watch the money roll in. If any of your products are a huge hit, you will be rolling in money.

It’s easy to do the math in your head.

“if I charge just $500 for my course and attract 200 people, I’ll make an additional $100k per year!”

Or, perhaps more commonly:

“If I ONLY attract 300 people willing to pay $10 per month for my newsletter, I’ll be making an extra $36k per year!”

Here’s the brutal reality though.

It’s not going to happen.

It could theoretically happen if you’re in the top 1%. But it almost certainly won’t happen - at least not yet.

That’s because of two reasons.

1. You haven’t built up your reputation yet. If you don’t have an audience of at least 5k mailing list subscribers (or 50k followers on social media), you shouldn’t be thinking about productising your expertise yet. I even think 5k might be a little too low. Not enough people know who you are. You need a huge number of people to know you, trust you, and see you as a major thought leader before you can even begin doing this.

2. The competition is fierce. Selling paid courses or productising your expertise is an incredibly competitive space to be in. The allure of riches (combined with a handful of outlier examples) sucks in a lot of people to attempt this. Those who are successful then begin creating courses on how to do it - which creates a vicious cycle. The bar to having a truly high-quality product is high and becoming higher every day.

But even this misses the most important point.

If you’re just starting as a consultant, you don’t want to limit the reach of your expertise!

You want your expertise to reach as many people as possible.

The Economics of Consulting

It’s nearly always better to sell a consultancy PROJECT than a consultancy PRODUCT.

The profit you will earn from a consulting client is almost always many orders of magnitude larger than you will earn from any product you’re trying to sell. So it nearly always makes more sense to use your products to attract more clients.

I recall having an odd negotiation with my publisher about whether my book royalty should be £2k or £2.5k. The difference to me doesn’t matter when a consulting client is worth anything from $20k to $150k. The only thing that mattered to me was how they were going to help me get my book into the hands of as many people as possible.

They were focused on squeezing an extra £500 from the deal. I was focused on getting guarantees on the promotion they would put behind the book. I’d have been happy for them to put the entire royalties figure into advertising to promote the book to the right people.

Productising Your Knowledge Is Still A Great Idea

But there is a much better way to use it.

The moment you charge for your expertise, you’re putting a limit on the number of people who will see it.

Worse yet, if you’re just starting, creating products to sell is a terrible idea.

Why would anyone pay for a product from someone they don’t know yet? It’s not like there isn’t plenty of free advice on the internet. Until you have a legion of people who trust you and love your stuff - you shouldn’t be trying to sell anything.

The best way to build an audience is to create amazing products that are easily worth a decent amount of money and then give them away for free.

The goal isn’t to sell your first product for a lot of money - the goal is to sell your 4th, 5th, and 6th products for a lot of money.

Imagine what happens when you create an amazing course on a topic and then give it away for free. You will collect hundreds (potentially thousands) of email addresses and your audience will become familiar with you.

Once You Have Products You Can Do Interesting Things With It

Having free products is a great way to build a mailing list

In 2010, I published a free 90-page eBook (which still exists today).

Instead of selling it for $5 to $10 as many others were doing at the time, I gave it away for free. This attracted thousands of people to subscribe to my mailing list.

The next year I launched a paid course. We had around 20 people sign up at $2,100 per person - earning around $40k. About half of that group came via the initial eBook giveaway. That’s the way these things work.

A more interesting approach might’ve been to give that course away for free in favour of a bigger course the following year.

Likewise, I’ve recently been testing giving away one of my books for free.

At the end of every talk, I share a QR code people can use to enter their email addresses and download a book for free. I’ve also been trying to create win-win opportunities where people can nominate friends to get a product of mine for free. This is a win-win. People receive a book for free and I get to increase the size of my audience.

In the past, I’ve also launched free private communities people can join. This again helps build the mailing list and awareness of our services.

I could have charged for each of these (and I’ve dabbled with this at times), but ultimately earning a few thousand dollars for a product doesn’t come close to the far higher amount you earn from a consultancy client. Everything which increases the odds of gaining a client is worth more than a smaller sale.

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Why You Should Reconsider Refusing To Speak For Free

It’s time to accept the simple reality of supply and demand.

I know some people in my sector who refuse to speak for free at industry events.

That’s a noble stand to make, but it’s an incredibly short-sighted one. Industry events are one of the best ways to get in front of the right people. The people who can afford to pay $500+ to attend an event are the type of people you want to be in front of.

You can argue that speakers deserve to be paid (and that’s a completely valid stand to make). However (and I say this as someone who has hosted industry events), event organisers assume all the risk. If a pandemic happens or audiences don’t sign up - they’re the ones who suffer. They incur all the costs, all the risk, and do nearly all the work. They’re going to put you on stage in front of the people most likely to become your clients.

How much would you pay to have an audience of target ICPs watch a 30 to 60-minute ad by you and then be able to speak with you directly afterwards?

(obviously, your talk isn’t an ad, but if your talk is good it serves the same purpose).

But this is why many people are willing to speak for free (and some even pay to speak) - they know the value of the opportunity. And it is an incredible opportunity.

The irony is the larger the event, the more willing you should be to speak for free. But this depends entirely on the speaking slot you get and whether you’re on the main stage or in a side room etc….

Small, private, events are nearly always the ones I charge for - because the benefits to me of being on stage are far smaller.

If you want to get paid for speaking, then you need to make an economic argument, not a morality argument. If you build your audience to a point where you can promote the event to tens of thousands of people and attract dozens of registrations, you suddenly become a speaker that’s worth paying.

But that’s far less likely to happen if you refuse to speak for free today.

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When Should You Charge For Things?

In the early days, almost all the content you produce should be free. This is how you build an audience. The thing which will separate you from everyone else is your ability to produce unique, engaging, content which solves other people’s problems.

As your audience begins to grow, then you typically want to create productised expertise which people usually have to register to access.

eBooks used to be pretty common, but are less popular these days. More likely options should:

• Courses.

• Online events.

• Industry reports and analysis.

• Case studies.

• Lists of examples etc…

The best way to promote these is to feature people with a large audience within them.

This is fundamentally how you grow your audience and begin to expand.

Once you have an audience of 5k to 10k+ email subscribers (or 25k to 50k followers), then you can consider a paid project. Courses tend to work well, but they’re not the only option. Paid membership sites can also work at this level.

But the key is you should only charge for things once you’ve got a successful practice and a large audience. The products are add-ons to the main consultancy service you’re offering.

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Thanks for reading

Richard Millington