After struggling to build an online business for three years, I can shamelessly admit that 99% of what I thought to be true about making money online turned out to be wrong.
I started my entrepreneurial career besides my studies and a full-time internship. And even though I had a full schedule, I managed to make enough time to explore the world of online business.
While this meant neglecting friends and canceling invitations to student parties, it also meant that I could try to make money online without any risks. Back then, I was living with my parents and didn’t have any fixed costs, so I had nothing to lose but everything to gain.
After consuming the books, videos, and podcasts of hundreds of self-proclaimed business coaches, I started to get annoyed by all the typical advice that didn’t seem to work for me.
However, I also realized that it was my fault to listen to anyone instead of being more careful about whose advice I take seriously.
At the beginning of 2020, I vowed to unfollow all hypocritical business gurus and instead learn from people who achieved what I want to achieve. Some of these people are Russel Brunson, Jim Edwards, and Pat Flynn.
In the past months, I invested more than $10,000 in courses, books, and tools. to automate and grow my business. Many of these investments seemed risky, but they helped me forget about all the nonsense information I consumed before, turn my business upside down by switching from the German to the English market, and build a 6-figure digital business in less than a year.
Here’s what I wish I’d known earlier about making money online:
Forget B2C or B2B; focus on P2P
This year, I’ve been on calls with more than 50 potential clients and business partners. Some of these people were representing million-dollar companies, others were 18-year old students.
What I learned by connecting with so many people is that every business relationship and decision comes down to one single thing: Human connection.
If you can connect with people on an emotional, humane level and if your energies match, you’ll be able to do business. If you’re, however, biased because of their position or social status, you’ll fail to build a genuine relationship.
This rule applies, no matter if you’re sitting in the same room or communicating via Zoom with thousands of miles in between you.
While the #1 rule most random business coaches teach is that you need to know your ideal customer's demographics, I learned that there’s something way more important: psychographics.
Demographics are all about the hard facts: Age, gender, location, income, social status, etc.
Psychographics, however, focus on who your ideal customer is deep inside.
By focusing on psychographics, you try to understand what your community feels, thinks, fears, is excited about, wants to learn more about, or wants to avoid. These things aren’t quantifiable, but it’s what really matters when we’re making a buying decision.
If you understand the emotional life of your potential customers and business partners, you’ll be able to sell way more than if you focus on the hard facts. That’s because an 18-year old student can have the same desires as a 50-year old who’s looking to reinvent himself.
Paying more attention to psychological factors helped me empathize with my community and tailor my marketing messages to their deepest desires.
You need to sell them what they want but give them what they need
Entrepreneurship is basically a synonym for solving problems.
Your life as an entrepreneur consists of solving problems and you’ll only make money if you solve other people’s problems.
And while trying to solve their problems, you’ll face a challenge: Most people think that they know what the solution to their problem is. As a consequence, they want to buy what they think they need.
If they’re right and you present the solution they expect and solve their problems, you win.
The problem, however, is that in most cases, what they really need is different from what they want. As a result, they think that your product or service can’t solve their issues.
Here’s how this might look like in a practical example:
Let’s say you’re selling digital information products (online courses, ebooks, etc.). You have an email list of 10,000 people, but only very few people buy your products.
As you want to increase your income, you’re looking for ways to make more sales. Your first thought is that if you had 20,000 people on your email list, you’d double your income. That’s why you look for new ways to generate email subscribers, e.g., by running ads on social sites.
While this might sound like a reasonable strategy, the reality is likely that your conversion problem could be solved by writing better copy for your sales pages and letters.
If your copy sucked, you could likely double or triple your conversion rate if you’d learn how to write sales pages that turn visitors into buyers.
In such a case, you need to sell what this person wants (I’ll help you to make more money by selling more products) and then give them the solution to their real problem (I’ll show you how to write better copy so that you sell more products).
The gist here is to convince them that you understand their problems and know what they need. That’s obviously going to be easier if you have a community of people who know and trust you rather than cold-messaging people.
If you give them what they want and it doesn’t help them solve their problems, they’ll be frustrated. But if you give them what they need, they’ll be satisfied, even if they didn’t know that’s what they needed in the first place.
Spending time on people is often more profitable than spending money on ads
If you know how to run profitable ads online, you’re basically sitting on a money-generating tool.
Yet, people online are becoming more and more conscious of random ads and are less likely to spend money just because they saw an ad.
If you’re selling a generic product that’s competing with dozens of similar products, you can’t beat your competition by merely running ads.
The truth is that most profitable digital businesses that sell information products are successful because they heavily invest in community building.
No amount of paid ads can replace a strong community that loves your brand and wants to support your mission.
Now, the downside is that spending time on people isn’t measurable.
If you run ads, you can analyze their performance, optimize, and scale.
If you’re, however, investing in building a genuine community, you’re not really able to track numbers and analyze data.
You can’t quantify how much your community feels connected to you or your brand and how strong relationships will influence sales and revenue.
However, if done correctly, spending time to understand your target audience and community can be your competitive advantage.
Here’s an example: I’m running the most engaged Facebook Group for Medium writers. With more than 2,000 members, I’m always up to date on the concerns, struggles, fears, and success of our community.
This helps me continuously improve my course for Medium writers and tailor my content to meet their needs as quickly as possible.
Through this community, I can reach and support more people than only those who can afford my course.
However, I’m also able to sell to more people because the group members know me and feel connected to me on a deeper level.
Apart from that, despite hundreds of potential marketing channels that you can use to promote your business, one of the most powerful ways of advertisement is the most underrated one: Word of mouth.
If someone trusts you and loves your product or service, they’ll make sure that other people hear of it too.
Just think of yourself when you’re thrilled about something you discovered lately. E.g., a new restaurant in your city, or a great book you finished lately.
If you enjoyed something, you’ll likely share it with your friends and family or even on your social media channels.
And if people love your products or brand so much that they talk about it, you can turn someone who’s never heard of you into a paying customer with ease and at zero costs.
The most crucial rule I learned about making money online in the past four years is that humane connections matter as much as well-thought sales copy, landing pages, and great click rates.
People don’t want to buy from companies they don’t trust. And the reality is that in most cases, they have lots of alternatives because millions of people are trying to sell products online.
If someone doesn’t trust you, they can mostly just look for the next offer. If you, however, connect with people on an emotional, humane level, they’ll be happier to pay you because they’ll believe in you.
As Simon Sinek preaches:
“The goal is not to do business with everybody who needs what you have. The goal is to do business with people who believe what you believe.”
As an entrepreneur, your goal should be being able to choose the people you sell to. Not everyone will understand your mission, but that’s not necessary anyway because there’s no greater satisfaction than working with people who believe what you believe.