Online Business Models Explained: Online Courses

booksThis part of the series is going to be a little different. That’s because online courses are not a separate, individual business model on their own. Instead, they are a combination of other models.

What online courses are

Like you would imagine, it’s an educational product. One where the customer can learn a new skill by following the course.

What differs them from standard products like we discussed in one of the previous parts in this series is that online courses are much more than just a single item. They consist of different elements, delivered in different ways.

For example, an online course about web design might contain elements like: a PDF textbook containing all the theoretical information, a schedule of all the lessons and their topics, a printable PDF workbook with some exercises, a set of online quizzes, a weekly scheduled consultation via Skype, packages of software, packages of resources (like: icons, stock graphics, etc.), web design templates, a set of tutorial videos, some bonus subscriptions to web design magazines, and so on. You can take a look at some course listings to see common elements that are included in online schools.

As you can see, an online course can contain a lot of stuff. Of course, it’s up to you to decide how much or how little you want to include.

(But please, don’t start selling something and calling it an online course if it’s just one half-baked e-book. Oh yes, I know some people do this. STOP!)

There are two main types of online courses:

  • A complete, out-of-the-box course that isn’t time limited in any way. It’s simply a package of content and resources that the customer gets all at once, and can use whenever they want.
  • A time limited, subscription based (monthly rebill) course. This can be the same content, but delivered in parts over time, usually on a tight schedule. This forces the customer to participate in the course in a way that’s similar to a real world course, where you actually have to attend a class on an exact hour and day.

In essence, an online course should contain everything a customer might need to learn a particular skill. If you want to create a truly valuable course, nothing should be left out.

The main value in a course isn’t the content itself but the fact that it has been prepared by a professional who can take a customer by the hand and guide them through the whole topic in question. A well thought out process of teaching is the real value of any course.

Advantages of offering online courses

The first advantage is that online courses are usually expensive. And this goes for ones sold as one time offers as well as those that are subscription based.

If the topic is really attractive and touches upon an important issue for your customers, they can pay anything between $300 and $2000 for the course. It all depends on the kind of customers you’re marketing to, and your actual marketing skills.

Another advantage is that really good and quality courses have some aspect of virality to them. If your course is truly exceptional and helps your customers achieve their goals, then they will be happy to share this with other people. This can give you an additional boost.

That being said, if, by any way, your course ends up being not so good you can be sure that people will spread the word too. So be careful not to shoot yourself in the foot.

If you choose the topic of your course wisely, and make sure that it’s evergreen then you can sell it for years to come; more on this in a minute.

A good online course can define your brand and turn you into the market leader. Think about it, if you’re the one offering the best online course on {whatever} this makes you THE expert in that field. This creates a lot of other opportunities for making money.

If your course is truly good then you can also attract a lot of affiliates who will be happy to promote it. Affiliates are always looking for quality products they can honestly recommend to their audiences. Of course, you also have to offer a healthy affiliate commission if you want to get anyone interested.

Some downsides to online courses

There’s one really serious downside. Because of the standard size of such things it takes time to create them, and this time also costs money.

Actually, the most difficult situation you can find yourself in is when you spend months creating an online course only to find out that no one is that interested in it. Such a scenario might even mean the end of your business. Especially if you’ve invested a significant amount of money in the whole thing.

To be honest, this is something that’s truly difficult to protect against. Usually, only the biggest and most recognizable brands have such abilities. For a completely different example, if you decide to release a new MP3 player you never know if it’s truly going to work or not, but if Apple decides to launch a new iPod they can estimate the possible number of sales pretty accurately.

Unfortunately, for us (people who are not global massive brands) launching anything is always an unknown, and this is what makes it truly challenging. And it gets even more difficult if we’re deciding to spend months on creating something as big as a complete course.

That being said, there are always steps we can take to improve our chances of success.

start

Where to start if you want to create an online course

Research – the most important phase of creating an online course.

I know that sometimes we simply like to start working on something because we’ve had this idea and we think that it’s certain to work and make us rich. No, it’s not. It’s just our own impression and nobody else’s (at this point). To find out if other people are also that excited we need to do some research.

First of all, I’m sure you have some ideas so start with them. Try to come up with 3-5 ideas and do some research around them.

Things to look for/do:

  • Keyword research (Google Keyword Tool) to find out if people are searching for the keywords describing your course. For example, for web design courses simply start with, wait for it … “web design course,” or “web design online course.” If people are actively searching for these terms, it’s a good indicator.
  • Look for competition. Is there anyone else offering something similar? Competition is good. Don’t fall into a trap of following an nonexistent niche. If there’s competition it means that other people are already making money, so you can always join in and make money too.
  • Look for communities. Things like forums, message boards, blogs, etc. The presence of communities means that there are people actively interested in the topic.
  • Try to aim for a topic that’s evergreen. An evergreen topic is one that won’t fade into the past too quickly. For example, if you create a course on how to fix an XBOX 360 error, then very soon it can become insignificant when there’s a new XBOX around. Our example, a course on web design, may not be the best idea either. I mean, the principles remain the same, that’s true, but the trends change quite often.
  • Try to find affiliate programs for similar products. You can go to Clickbank or any other affiliate market. Some businesses offer their own in-house affiliate programs, so look around. Affiliate programs are a great indication that the niche and the topic are lively, and that people are engaged in them from both sides (customers and marketers).

The next thing to do is to join an affiliate program and pick a test product to promote yourself.

When you promote someone else’s product, you can estimate how much money can be made in the niche you’re in. You can also see how responsive people are to some marketing materials. This is all valuable knowledge before launching your own product.

After a while you can tell if there’s any real interest in the topic, and if the niche is worthy of launching your own product in it.

When it comes to the creation phase itself it’s good to start by brainstorming all the possible ingredients that would be valuable as part of the course.

Try to create a list of all possible elements, similar to the one that I shared as an example earlier in this post.

Some possibilities; things like: schedules, videos, audios, phone consultations, textbooks, workbooks, resources, software, quizzes, templates, subscriptions, etc.

Basically, and let me emphasize this again, everything your customer might need to get to the ultimate result of mastering a given skill.

Once you have your course ready it’s time to market it, promote it and essentially get some customers.

There’s one more part of this series waiting in line, and it’s about promoting various business models. Even though there are many ways of making money as an online business, the actual promotion is often very similar for most business models.

But for now, don’t hesitate to tell me what you think about the idea of selling online courses. Is it something that can work for you?