Building Your Podcast Business - PTC 028

EPISODE 28 – BUILDING YOUR PODCAST BUSINESS

Most every podcaster has the desire to turn their podcast into a business. Though some podcasters treat their show as a hobby and an outlet for their passion, many reach a point where they wish to monetize their efforts. Podcast profits are possible in many forms when podcasters get creative.

Most podcasts do not generate enough cash to stand alone as a business. There are ways to generate revenue from the podcast, such as advertising and sponsorships. These methods typically bring in money in direct relation to the size of the audience. It is traditionally called CPM, or cost per thousand. (M is mille - Latin for thousand, M is also the Roman numeral for thousand.)

There are two primary issues with relying on advertising as your primary revenue source.

The first downside of CPM is the direct relation of hours to dollars. When you stop putting in hours, you stop taking out dollars. When you stop creating the podcast, the revenue stream stops as well. When you exchange hours for dollars, that is called a job. When you create something one time and it generates a continuous stream of income, that becomes a business.

Limited inventory and revenue is the second problem with advertising. There is a limit to the amount of sponsorship time possible within any particular episode. If your podcast is an hour in length, how much advertising could the show possibly contain? Two sponsors? Four sponsors?

At some point, the adverting becomes a negative to the audience. This is the issue terrestrial radio is facing. The commercial time has expanded to a level that is negatively affecting time spent listening to radio. Stations are hoping listeners will sit through 12 minutes of commercials on music stations and nearly 20 minutes on talk stations. People are looking for other content that does not force feed them content they do not desire. This is where your podcast will thrive.

You can turn your podcast into a business by developing a suite of products. Brendon Burchard, the author of "The Millionaire Messenger" and creator of Experts Academy, describes it as an integrated product suite. The podcast attracts a group of followers without wasting their time. Your content and message builds a friendships. Listeners begin to know, like and trust you.

Once you have built a loyal group of listeners that trusts you and your message, you can ask them to join your list in exchange for something free. This gets people to take the next step to become engaged with your brand. I use this with free worksheets, videos and other content. Fans give me permission to e-mail them pertinent, valuable content. The additional free content continues to build the relationship.

After delivering content over time, you can begin to monetize the trust you've built. Start by asking your fans to purchase a low end product, such as this workbook. The low end product doesn't cost much. It is simply a purchase to break the barrier to make your fan comfortable doing business with you. Your listener can risk $20 to see if your products are as good as you say. Again, we are building more trust.

If you could sell 1,000 e-books at $20 each to your audience of 10,000 listeners, you would generate $20,000 in revenue.

Let's compare that to the CPM model. The average CPM in podcasting is around $25. Using that same 10,000 listeners, your CPM factor would be 10, because you have ten “thousands”. $25 CPM x 10 “thousands” equals $250 per episode sponsorship. Two sponsors per episode would generate $500 per episode. Producing 50 episodes per year would then bring in $25,000 annually. That is just a little better than the e-book model.

There is a big difference between the two methods. With the e-book, you write it once. It then continues to generate revenue. You must create your podcast every week to keep the revenue flowing. At the beginning of the next year, your podcast starts over again. Your e-book continues to sell with little additional effort. You can also write another book to begin doubling your revenue.

The next step is a mid-range product. This would be something in the $200 range. While you continue to deliver great, free content and your book continues to sell and build trust, you can then produce your mid-level product. At some point, you will ask for that sale. Convincing 100 of your 10,000 fans to purchase your $200 product will generate $20,000. We are talking about converting one percent of your audience at this level.

This style of product layering continues as you build your business. It is all based on the relationships you are creating with your podcast. You are building trust with your podcast. The fantastic, free content allows your fans to know, like and trust you. Your podcast is the foundation of your business.

Your podcast is not your income generator. The relationships you have build with your audience becomes the conduit to create income. Your friendships will be the basis on which your business is built. We will turn those relationships into a suite of great products centered around your content.

“Entrepreneur on Fire” with John Lee Dumas is arguably one of the most successful recent podcasts in terms of revenue generation. John releases a daily podcast 365 days a year. He has been able to monetize his podcast at a high level using sponsorships. In fact, he posts his monthly income report at www.EntrepreneurOnFire.com/income. According to his site, Dumas generated $39,400 from sponsorships in December 2013.

Even at that level of success, John Lee Dumas has other products. At nearly $40,000 a month, his show is bringing in almost half a million dollars in annual sponsorship revenue. If you examine the income report, advertising within the show isn't even the largest source of income during the month of December. Entrepreneur on Fire generated $52,763 with John's “Podcasters' Paradise” program.

In total, Dumas lists 7 different revenue sources on his income report. These include a mastermind, sponsorships, an ebook, an audiobook, his program, one-on-one mentoring and affiliates. This is a great example of a suite of products. The entire program is built on the foundation laid by his podcast.

If you hope to build a business around your podcast, begin by developing your product suite. Brainstorm the various products and services you can create. Make a list of five to ten products that will begin to generate revenue for you. Then, start creating the one that will be quick and easy. This is where your business will begin to take shape.

Your entire business will be built around your podcast. This is where people will begin to trust you. Everything described in this workbook up to this point has been designed to get your audience to know, like and trust you. Only when we reach that point can we begin to monetize the show.

You are creating a relationship with your audience. The more you reveal about yourself on your show, the more you create influence through friendship. Your sales will be built on the trust you are developing.

Help your audience. In sports coaching it is often said that players will not care how much the coach knows until they know how much the coach cares. Show your listeners you care by helping them solve their problems. Develop that friendship.

Once your friendship is built, your listeners will begin to move through your product funnel.

Your product funnel is just as it sounds. We bring many people into the big end of the funnel. As they move through, the price goes up until only a few come out the small end. Your podcast and other free content is at the big end of the funnel. As we move to the low-tier $20 product, we lose a group of listeners. We then lose another group when we progress to the $200 product. Listeners continue to move along the funnel until we have a few dedicated listeners playing thousands of dollars at the small end of the funnel.

You cannot begin at the middle of the funnel. People do not begin by buying your $200 without knowing anything about you. The entire funnel is based around your podcast and the relationships you are creating.

Though your podcast will not be your primary revenue generator, it will be the foundation for your business. This is where it all begins. Make it great. Tell the truth. Make it matter. Have fun. Before you know it, you will be building great friendships on the way to an amazing business.

This week:

• Develop your free bonus content

• Launch an e-mail database like Aweber or Mail Chimp

• Brainstorm a low-tier and mid-tier product you can create

I'd love to help you with your podcast. E-mail any questions or comments you might have to Coach@PodcastTalentCoach.com.

You can also find tools to help you create great content at www.PodcastTalentCoach.com.

Let's turn your information into engaging entertainment.