Just creating an online course, a digital template, or other passive income products doesn't mean a customer will buy them.

As a content creator, it's your job to think of your target audience and understand their needs and problems. Your digital product business can only thrive when you've done the foundational work.

But fear not! That work isn't too difficult and we're going to share specific steps so you can generate income as a digital creator and have extremely happy customers.

Understanding Your Target Audience

Knowing WHO your digital product idea is for is the name of the game. You're likely already creating digital content for your potential customers, the next step is to identify the specific scalable product someone can purchase from you.

How To Identify Your Target Audience for Your Digital Product

Identifying your target audience involves understanding demographic segments such as age, gender, location, and psychographic details like interests and lifestyles.

For example, if you're creating digital planners, you might target an audience that values organization and productivity. To go one step further, you would identify your specific customer is a stay-at-home Mom who wants to better organize her family's schedule and loves journaling.

For digital art or stock photos, your audience might include graphic designers and small business owners.

By defining your target market, you focus on a specific group more likely to buy from you. You should build buyer personas that represent potential customers while think of them as real people with concrete needs and purchasing behaviors.

Conducting Market Research to Understand Your Target Audience

Once you have a rough idea of your target audience, validate and deepen your understanding through market research.

Methods to perform market research include:

• Online Surveys and Questionnaires: Gather information about customer preferences and behaviors from your existing email newsletter or social media audience.

• Analytics: Use data from your website or social media platforms to gain insights into who interacts with your brand.

• Customer Feedback: If you've sold previous digital products, interview your customers to find out more about them.

• Competitor Analysis: Understand what your competitors are offering to wider audiences in your niche.

Combining these methods gives you a holistic view of your target audience. Market research is an ongoing process that keeps your digital product relevant and desirable!

Validating Your Digital Product Idea

We don't want you to waste time creating a digital product that no one wants. You should validate that your concept has real-world appeal and viability.

Validating your product idea confirms there's a market for your product before significant investment. If there are competitors offering coaching services, digital templates, blog posts, video courses, etc around your product idea then it's already validated!

Strategies to Validate Your Digital Product Idea

• Pre-Sell Your Product Before It's Created: We'll talk more about this later on in this article. The quick version is to use your audience and a sales page to see if people are willing to purchase your product before it's fully developed. If they are, you're on the right path!

• Keyword Research: Investigate search volumes for solutions your product provides. Tools like Ubersuggest, Ahrefs, SEMrush, and Sparktoro can help discover relevant keywords.

• Build In Public: Share the journey of building the MVP (more in a second) of your digital product. Creating exclusive content for your audience that goes behind the scenes can quickly help validate product interest.

• Soft (Beta) Launch: Release your product to a smaller, controlled beta group for valuable insights without the pressures of a full-scale launch.

These validation strategies refine your product idea and build a foundation for a thriving educational product business.

Create a Minimum Viable Product (MVP) for Testing

An MVP is the most basic version of your online course, downloadable template, printable planners, digital file vault, social media post checklist, etc, that still delivers key features.

The primary goal of an MVP is to test your product hypothesis with minimal time invested for you. It provides the earliest opportunity to start the feedback loop with customers and iteratively improve the product.

To create an MVP, focus on core features that solve the primary problem for users. Your MVP should be the "best first version" of your product and should solve at least one or two of your core product problems for your target audience. An easy way to think about an MVP is it should be no more than 50% of your full product.

When your MVP is ready, deliver it to a small group of beta testers who can help validate product-market fit, share critical insights, and create a community of early adopters who may champion and help promote your full product.

Gather Feedback on Your MVP from Potential Customers

Once your MVP is in the hands of potential customers, collect and analyze their feedback to refine your product.

Effective ways to gather feedback include:

• Surveys and Questionnaires: Post-use surveys provide quantifiable data on user satisfaction and areas for improvement.

• Interviews: One-on-one conversations uncover deeper insights and suggestions.

• Feedback Forms: Integrate these into the product experience for continuous feedback collection.

The initial feedback on your MVP will help you create the best possible digital product and customer experience using your product.

Determining the Pricing Strategy for Your Digital Product

Deciding on a pricing strategy can be overwhelming for a digital product. A well-thought-out pricing strategy positions your product effectively in the market and drives business growth.

When choosing a pricing model, consider your business objectives, the value your product offers, production costs, and the price point your target audience is willing to pay.

Competitor Analysis and Pricing Comparison

Conducting a competitor analysis informs your pricing decisions. Investigate and monitor how similar products are priced and positioned in the market. Note their specific offerings, differences in features or services, and unique selling points.

Create a comparison table to organize findings:

• Competitor's Name

• Product Offering

• Price Point

• Unique Features

• Target Audience

One important part of competitor analysis is to compare apples to apples products. If you are selling Notion Templates and a competitor is selling Stock Photography Packs, your products don't match and pricing shouldn't be compared.

Choose the right competitors to evaluate your pricing strategy and then decide if your digital product should be priced similarly, lower, or higher.

Testing Different Pricing Models and Strategies

Before finalizing your strategy, you can also test various prices OR strategies to see which resonates best with prospective customers.

Strategies to test include:

• Freemium Model: Offer a base product for free with premium features at a cost.

• Tiered Pricing: Create multiple levels of product offerings with incrementally more features. (Example: Add a 1-on-1 Coaching option at a higher tier.)

• Subscription-Based: Charge a recurring fee for ongoing use or access.

• Pay-What-You-Want: Allow customers to set their price, generating interest and adoption.

Testing different pricing structures reveals customer preferences and spending thresholds. It's likely that you'll change your prices over time, but that the actual strategy will be similar due to the specific type of product you sell (no one wants to pay a recurring fee to get access to Printable Downloads).

With the right pricing strategy and insights from market research and testing, your digital product can secure a strong position in the competitive online business landscape.

Running a Pre-Sale or Beta Test for Your Product

Before a full-fledged product launch, we highly recommend running a pre-sale or beta test to collect feedback, improve your product, and generate early interest. A pre-sale is also one of the best motivators as any amount of money for the effort you're spending on your digital product business will feel gratifying!

What's the difference between a pre-sale and beta testing?

Pre-selling: This is offering your product to a select group at a special price

Beta testing: Typically this option is free but requires feedback from participants. You CAN have paid beta testers if you feel your audience is used to that.

Both approaches aim to engage potential customers and refine your product offering.

When running a pre-sale or beta test, consider these steps:

• Identify Objectives: Are you testing the market, seeking product feedback, or both?

• Choose the Right Group: Beta testers should represent your target audience.

• Set Clear Guidelines: Explain what's expected from beta testers or pre-sale customers before they buy or get access. Make it EASY for these folks to give you feedback by having a survey or line of direct communication to you.

• Interviews are Great: Hopping on Zoom is never fun, but it can be very enlightening to hear directly from customers and testers. Pay attention to the words they use when talking about your product (that's how your core customer thinks about what you sell and the problem it solves).

• Consider the Scale: Keep the testing group manageable to handle feedback effectively. Use the smallness as a sense of urgency to join.

Data from beta tests and pre-sales can adjust your final pricing strategy and overall quality of your product. Some of the best sales page and sales copy will come from the feedback you get from pre-sales and beta testers.

Simple 2-Week Digital Product Pre-Sale Plan

If you're planning a two-week pre-sale, here’s a simple approach:

• 2-3 Weeks Before: Build anticipation weekly through email marketing and content marketing on your social channels

• Days 1-2 of the pre-sale: Open the pre-sale and make it exclusive with a special 48-hour only early bird price (ex: 50% off). Send emails on both days and post on social both days.

• Days 3-7: Continue to promote the pre-sale and offer a discount, but one that isn't quite as good as the early bird price. (ex: 30% off)

• Days 7-13: Send reminders and updates about the pre-sale. If you have a 3rd discount (ex: 20% off), be very clear it's the last discount.

• Day 14: Close the pre-sale with a final call to action, emphasizing the end date and exclusivity. You can send a morning and evening email with multiple social media posts, ensuring that your audience knows your digital product won't be available for sale for awhile after the pre-sale ends.

Things you want to do during the pre-sale:

• Track Sales: Monitor daily sales and pat yourself on the back with each one that comes in.

• Gather Feedback: Engage with early buyers for their thoughts on the purchase process and their initial reactions to the product.

• Adjust Messaging: Modify your copy and digital product content based on early feedback.

• Final Push: Increase marketing efforts in the last 48 hours to maximize sales!

A focused pre-sale emphasizes urgency and exclusivity to drive interest and sales. Keep your communication concise, your calls to action clear, and remember to focus on the benefits of your digital product (the problems it solves) not just the features (the things inside it).

Monitoring and Adjusting Your Digital Product Strategy

While everyone wants the dream of passive income, the reality is you need to hone your product, your message, your sales strategy, and your content marketing. All of those things contribute to a healthy digital product business that can last.

As a digital product creator, you need to be ready for change, willing to accept customer feedback, and open to changing digital product types while always thinking of your ideal audience and their needs.

Track Customer Sentiment Over Analytics Early On

Once your product is launched, keep a pulse on how your customers are receiving it. Tracking and analyzing sales is straightforward but you shouldn't stress too much about it too early on. Focus less on email or sales page conversion rates, and focus more on getting your customers to their first "ah-ha!" moment with your product.

Be proactive in collecting customer reviews, survey responses, and direct feedback to understand satisfaction and areas for improvement. Engage with customers who left feedback to show you value their opinion.

Remember, you're busy and your customers are busy, so don't be afraid to follow-up with requests for feedback and survey responses.

Continuously Improve and Update Your Digital Product

No digital product is ever truly complete. Successful ones evolve through continuous improvements and updates, ensuring they consistently meet customer expectations.

Spend time in online communities around your digital product and keep an ear out for what people are most interested in and the change in trends. Create an update schedule for your product and if you're building a product around a specific platform (ex: Online Course Teaching Canva Video), plan to update your product when the platform makes updates.

By constantly refreshing and improving your product, you'll keep existing customers happy and entice new customers to buy.

Make Sure to Have Fun!

Running a digital product business should be enjoyable! You are in full control of the product you create, the market you exist in, the customer you help, and your day-to-day work schedule.

Being a digital creator gives you the freedom and flexibility you simply can't get with a standard job or by working with clients. Embrace the unique knowledge, be open to experimentation, and enjoy the ride!