How to Turn Intellectual Property Into Passive Income for Your Agency

Want to build a passive revenue stream for your agency? Wondering where to start?

In this article, you’ll discover how to create intellectual property that generates passive income year-round.

How to Build a Scalable Agency Through Passive Income Streams 

In the digital age, monetizing your intellectual property by creating passive income channels presents a profitable path to wealth. Packaging knowledge, frameworks, and processes into products or services that sell themselves makes it possible to profit continuously from your expertise with little ongoing work.

Gini Dietrich, founder of integrated digital communications agency Arment Dietrich and public relations and marketing brand Spin Sucks, has skillfully executed this playbook over the past 15 years. After writing a celebrated book outlining her original public relations strategy, she turned this core intellectual property into multiple passive income channels.

Today, her integrated PESO Model drives paid certifications, courses, and speaking engagements, accounting for nearly half of her business's revenue.

Gini accidentally launched her agency after butting heads one too many times with bosses who didn’t understand PR. Working at an ad agency and finding repeated frustration in educating teammates about how PR operates, Gini eventually left to start her own firm.

Her business grew rapidly to $2 million in annual revenue in the early days. However, she had not yet established diverse income streams. So when the Great Recession hit in 2008, her agency’s reliance on clients caused it to immediately shed employees and drop from $2 million to $0 revenue almost overnight.

This crisis taught Gini an invaluable lesson about resilience: “You are never going to rely on one source of income ever again.”

In response, she gave herself a 10-year plan to develop at least 7 recurring revenue streams. Now, roughly half of the agency’s income comes from client work, while the other half stems from passive sources like online courses, books, speaking engagements, and more.

Rather than viewing the recession as a setback, Dietrich leveraged the experience to future-proof her business. When client budgets evaporated during the 2020 pandemic, her income diversity provided essential stability. She emphasizes that passive revenue offers similar insulation against future unknowns in perpetually uncertain economic times.

#1: Create Intellectual Property

Gini’s breakout intellectual property asset, the PESO Model, emerged organically from an internal framework. She first outlined it in her book, Spin Sucks to model integrated paid, earned, shared, and owned media strategies. Though originally nameless and graphic-free, her publisher pushed to brand and visualize “this model” for memorable impact.

On her book tour, Gini was surprised that attendees kept inquiring about this new PESO Model rather than asking her to sign copies. She realized she’d unintentionally created an intellectual property asset.

Over the next several years, Gini leveraged PESO’s momentum by expanding it into a comprehensive certification program. This included a robust partnership with Syracuse University to administer the official accreditation, adding tremendous credibility.

While formal trademarks and copyrights can eventually help protect assets like PESO, Gini didn’t legally safeguard it for years.

She organically demonstrated it was her well-known framework by building social proof and cementing her ownership of PESO through consistent use in books, courses, and speaking engagements. This emerging notoriety helped to deter some copycats.

The Power of Passive Income

Originally launched to help individuals learn PR strategies, PESO now also serves as an engine for passive income. 

The model has been widely adopted by businesses, allowing Gini to monetize her expertise through multiple channels, including a certification program, online courses, coaching and strategic consulting services, a podcast, books, and speaking engagements. 

Rather than continually selling one-off services, these diverse streams generate revenue. Some demand minimal involvement once established, while others offer scalable earning potential from Gini's personal brand. 

She estimates such passive channels drive 40-50% of her firm’s revenue. This income diversity proved invaluable when client work wavered during the pandemic. 

Ultimately, passive income lends crucial stability and optionality. Gini weathered storms that may have otherwise shattered her business not once but twice. Any agency leader should consider passive streams as a safety net and springboard.

#2: Cultivate an Audience and Passive Income Streams

Passive income potential relies heavily on audience cultivation, according to Gini. She underscores that people invest in themselves during financial uncertainty or professional transitions. Thus, economic instability can perversely drive demand for coaching, courses, and other expert-led development opportunities.

“The nice thing about passive income is, especially when things are tough, people invest in themselves because they have time. They have time to learn. They have time to do professional development,” Gini says. “So when you have that opportunity to give them that time for professional development, they'll spend the money.”

Gini has built her audience across a portfolio of channels, particularly email. She notes email newsletters have become a robust lead source compared to social media amidst crowded feeds and wavering algorithm favors.

Content also plays a crucial role, with Gini strategically packaging intellectual property assets like PESO into various self-service and high-touch formats. These include:

• Books codifying her signature frameworks
• Certification programs expanding on key concepts
• Online courses making guidance accessible
• Mastermind groups for peer learning
• One-on-one coaching for customization

This tiered approach puts Gini’s expertise into practice. Learners can opt for relatively inexpensive, automated self-study materials. Or they can pay premium rates for tailored guidance from Gini herself.

#3: Start Simple: Tips to Begin Generating Passive Revenue

Initial steps can be simple when seeking out passive revenue streams. “Just start,” she urges. “Just do something.”

First, document your processes. For example, Gini creates Loom video tutorials explaining the expected working methods for her employees. She has new hires get PESO Model certified within their first 60 days.

Next, consider how to package your internal processes into an external offering. Identify the precise problems you solve for clients. 

For example, Gini asked her blog subscribers if they could spend an hour together; what one question would you want to discuss?

The responses ranged from funny to thoughtful. Her team compiled all the serious answers into a spreadsheet. They identified people's most significant needs and challenges around connecting owned and earned media by tallying up common themes. Many agency owners said they need more time for content creation alongside their media relations work. 

Finally, develop a product from your process that packages up your solutions. It should be affordable for those who badly need but can't afford your full services. Selling your system as a stand-alone offering creates a scalable new revenue stream.

Gini designed a basic four-week live webinar series to address her subscribers’ pain points. She recorded each session and packaged the videos into her first digital product offering.

Despite not having a fancy design, the quick DIY “course” generated $250K in sales. This minimum viable model helped gauge demand and provided a framework to build upon.

Gini notes that agencies should develop processes that set them apart. These unique and repeatable ways of working create value. Strong processes allow agencies to create passive income by selling their methods to others. It also makes the agency valuable to future buyers—they can purchase the agency's system, not just the people.

Agencies should identify what makes their client onboarding, team onboarding, work delivery, etc different. That's the intellectual property buyers want. It addresses a pain point many experience: constantly reinventing the wheel.

Equally important is picking an idea and starting without delay or excuses. Gini produced webinars one hour per week. This deadline made it easy for her to show up and deliver valuable content on a defined schedule.

By identifying ways to codify and productize expertise, agencies can stimulate new income streams while serving more customers. The recurring nature of passive revenue enhances stability without proportionally growing overhead. 

After adversity struck, Gini built a multimillion-dollar agency by refusing to rely on a single income source. Her framework offers inspiration and tactical advice to assess where your differentiating insights and offerings may incubate similar passive income.

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