You're listening to path to purchase a podcast for passionate and committed business owners and marketers, Oli Billson and Tom Breeze are here to give you the tools and knowledge you need to grow your business and take decisive action. Welcome to the episode.
Speaker 2: (00:14)
Everybody is Tom breeze here. And we have the mr Oli Billson, how is everyone saying hello boys and girls. It's not quite the right time. This must be the worst, podcast intros, I think out of every four of us now, I think we'll become famous for this, for really bad intros. The contents absolutely fabulous, but yeah, don't get me wrong. I have, it's amazing. Anyway, so, recently Oli, you wrote an article called you might as well tell me what the title was.
Speaker 3: (00:53)
Yeah, yeah, the tongue twister, I'm asking you to say what the total is. Yeah, yeah, sure. It was the sick, the sick [inaudible] not even say it. This is the worst, the six growth activators for recurring revenue riches, the six growth activators or recurring revenue riches. Okay. So basically, yeah, it was obviously such a compelling headline. I mean low, some people [inaudible] emails back. So yeah. Yeah. Well basically there's six things about recurring income, which, which is kind of like, well, I want to learn about basically. So I know I've read the article already found it fascinating and I know a joke about the title, it's just I couldn't remember it, but I know there's stuff that you shared was amazing and also, I want to continue the conversation about this because I'm very interested in the agency to introduce some level of training, continuity, mastermind mentoring type package. I'm interested in it. I'm not sure if I'm going to do it or not, but I'm, I'm, I'm keeping an eye on it, if that makes sense. We're doing pretty well in the agency and I got the blinkers on to a certain extent. That's what we want to do. But I'm also interested in potentially, is it right for me to do it? Will it be easy to do? What sort of things should I be thinking about if I am going to do it and things like that. So, Juno, let's kick off with like a few of like an overview to begin with and, and then let's dive in a little bit into each of these six areas and I'll ask questions as we go with us. Right?
Speaker 3: (02:31)
Yeah, definitely a yes, a dive in at any point so just ready for some context and anybody that sort of listened to the first part of the interview, obviously it's been an actually train wreck so far. So, I can absolutely promise you that this is going to be fantastic for you now for any of you that's listening to this and thinking to themselves, well, I didn't really, I don't run a subscription business, a business, this is still very relevant to you and that we can clear very soon for me, one of the things that is a profit activator in really any business, regardless, is to try and put some form of recurring revenue in that business. There's some kind of subscription model and it's surprising that, you know, despite what kind of industry, what type of business you're in, you know, there are opportunities for you to create, a membership base of some description that will pay you a monthly income.
Speaker 3: (03:41)
There's lots of models for it. I mean, naked wines have got a model where you, you essentially pay them, you don't get any wine, you build up a bank of money, they hold your money and then send you wine there is of course, you know, the graze boxes of this world there's you know, monthly newsletters that you can subscribe to really, I mean, this has been going on forever, but in, in, in, in our business, and in some of our client's businesses, we've been very effective in creating a, Amanda, some kind of recurring revenue, you know, one of our, one of the businesses that, that's one of, one of our clients, before I talk about my own is, in the, in the, the beauty kind of marketplace. And so, they've created a, a membership which gives, you know, preferential rates and discount and then kind of samples that they send out to people each month before they actually then, you know, have the, the, the products before they want to buy products.
Speaker 3: (04:45)
So, that's, that's a good model. We just started one in one of our other businesses called one of the car clubs, where they, they pay and they get preferential discount on services and also a service that they get delivered every month and everybody knows about the kind of the information marketing model and so on and so forth. So that is an ADA. There is a business within your business that you're not probably tapping into. There's an income stream now that you probably don't see, that you could potentially tap into. So that's a first
Speaker 2: (05:19)
I've seen it happen with coffee w these are surprising ones to me that I thought, wow, this is really crazy. So we've got coffee where you just pay a certain amount of money per month and you get your coffee and they give you different samples of stuff and then he can taste them. Some different types. I've seen them for boxer shorts, it's like, or briefs for gents so they send you a new pair of boxer shorts every month. I think you're meant to have your own as well. Don't just cite one pair per month. That'd be a bit dodgy. But then I've seen them for, some like sweaty Betty, which is a brand new car. I think it's worldwide in fact but they kind of like pay a certain amount per month and they'll put together an outfit for you each month and you can either say no to it or a yes to it and it'll get sent to you if you say yes to it, which is pretty cool. I'm not sure if the recurring income comes in like that, even if he's saying no, I don't know how that works, but yeah, loads and loads of like different businesses have all these different models here you've got dollar shave club and w dollar beard club as well as the result of that so there's some really clever models out there on the flip side of that, Oli, where do you see people going wrong? Cause I've seen so many people do or try membership sites and fail miserably and is there apart from the actual functionality of the membership and how it promoted it and all that sort of stuff, is there sometimes like a business is just, it just doesn't fit a membership model? Is there, is there any way that you think, right, this sort of thing is, is dedicated to this whole person and they're not interested in doing a membership site, their customers just wouldn't be right for that, is there anything like that that you think, yeah, these sorts of businesses wouldn't fit for membership?
Speaker 3: (06:59)
Yeah, I think you've always got to look at really what is going to work for the customer. What is it that's either going to make it more convenient for them, what is going to give value to them? What is that? What is that going to be perceived of being part of some things. So there's all of these things is, it's, you know, in some cases it's convenience, like your dollar shave club thing and [inaudible] value that they're getting in terms of monetary value. There's, there's a benefit to be part of that. But then there's, there's also some people that want a belonging. They want to be part of something. They want to be part of the community. You know, maybe it's a part of a community where the business owners or entrepreneurs or whatever it may be. And so, you know, that that's very relevant as well.
Speaker 3: (07:45)
So, you know, I, I find that that there is, you know, a lot of untapped potential in a lot of, a lot of any business really, you know, and I think if you look hard enough, you can, you can create something out of a really nothing really, if that makes sense. And we've actually done that in one of our businesses, the industry model. And the thing is that everybody looks inside their industry and is like, Oh, you know, nobody else is doing this. Obviously if it works then you know, other people would be doing it. Well, the sad fact is that, you know, you shouldn't always, you should look outside of your industry to look at what other businesses are doing and look at how you could mimic model and emulate those successes and that's what, often prevails to be quite successful.
Speaker 3: (08:36)
And, and that's what happened in our business one of our businesses, we had a, a business that we were selling our franchise, a business opportunity and the actual service deliverable, the actual thing that we were delivering to the franchisees was software. And it meant that, we can, we can supply them each month with a certain allotted amount of, software credits that they consume. That's how the mother works. And before that, what we used to do was sell these credits after discount we would sell them in bundles and they would buy so many and if they bought more, they got a discount. Well that kind of makes sense. And then one day I was just sort of looking actually at, I, I can't remember where it was that I, I originally got this, this idea from these credits and that we could put them on a subscription.
Speaker 3: (09:34)
So that meant that they pay us less money but with the last credits, but we got the recurring each month and there was still a discount and economies of scale built built into it. And we just quickly just transformed our business overnight from like having these sporadic spikes of revenue that were coming in and lows and plateaus to having this consistency, which really gave the stability that we wanted and gave us some confidence in reinvesting back into the business and doing a whole load of great things that actually added a lot of value to the end customer as well. And, you know, some of the things I'm going to share with you here and people that are on the, on the podcast listen to this are rarely some of the things that we've learned as a result of being part of that subscription business that, you really need to understand in order to make it work for you, which I think really is the meat and potatoes of what this is all about. I suppose really nice can be a bit of meat and potatoes. Cool. Okay. So I'm go, I'm going to be thinking about my business knowing that I've got several different products, like online trainings we've got a bit of software in there as well that people can use. And right now I don't really do that much promotion behind them. I am looking to do a lot of promotion behind them but it's also the sort of thing where it's like, if I've got several products each in the range of anywhere between a hundred dollars and $1,000, should that become a point in which you say, well, do you know what, if you just become a member, you can have access to everything ongoing and, and have access to a community for example, and things like that as well so that's kind of what I'm going to be thinking about as you go through these six. But, yeah, if you were given all the better, well, as I was mentioning in terms of your model, it's also worth mentioning that there's so many different ways probably to structure that kind of online content in terms of delivery you know, if it's drip fad, if it's all you can eat, if it's, you know, annual renewable monthly or whatever it may be. So there's a lot of things to think about that. But I think the key thing here to remember is that we focus a lot on marketing folks a lot on acquisition and one of the key things running a recurring revenue business, a subscription business of any kind is that it doesn't really matter how many people you're actually adding to your customer base. Eight months in terms of your growth rate. If you growth rate in your retention rates stay the same, okay, then your business is eventually going to plateau and it's never going to actually grow.
Speaker 3: (12:21)
And that can lead you into a very vulnerable situation, especially if your business is scaled up to accommodate a specific number of customers. And then suddenly it starts to plateau and you haven't got the kind of revenue to support that. And believe me, although you may think that having, you know, at the beginning of the month, having to not start the month from zero and build up, that start in the month with 30,000, 50,000, $60,000 in the bank would be a great place to be. It can also go wrong. And that, that leads us neatly into sort of our authors thing really, which is looking at attrition versus gut growth rate. So, we mean by that. And the way to calculate it is that we take the number of clients that we lost this month. Okay. So yeah, that canceled the membership. They canceled their subscription how many clients did we lose this month?
Speaker 3: (13:26)
And we divide that by the total number of clients that we had at the beginning of the month. Okay, got you. Okay. So, where would you want that percentage to be? It really does vary. It really varied varies but like, yeah, sure. And, and, and you know, that, that, that, that's an important metric to consider, because there will be for your business and acceptable churn, right that you'll become accustomed to in this nature of business because people will cancel. Okay and they will counsel for a number of different reasons, but overarching is we want to look at the attrition rate. The second thing that we want to consider is, how many people did we actually acquire? Okay. So we always look at the attrition before we look at the acquisition. So how many clients did we win this month?
Speaker 3: (14:29)
How many people started a new subscription. So got very simple math, how many people did we win? Okay. And then we can then take the reason why we do it this way and we take the attrition and we take the number of clients is because the key calculation that we want to know is actually the customer or client lifetime value. Now this is a very, very important metric and we can't calculate that without knowing the attrition rate and the acquisition and unites. This is all based on monthly. And so the calculation that you do for customer lifetime value is one, the number one divided by the attrition rate that we, that we've worked out previously times by the average monthly customer or client value. And what we mean by the average monthly customer value is what they, if you take, if you've got multiple if you've got one subscription level and that's all you've got, $97 a month or 97 pounds a month, that is the average monthly customer value because that's all it is, right but you may have varying different levels of membership. And so you want to take the average of those and so, you know, add them all up and divide them by, you know, how many you've got and to get the average monthly customer value. And that then will give you the, the customer lifetime value. So one divided by the attrition rate times by the average monthly customer value.
Speaker 2: (16:07)
Okay. So, the way that I've, I've seen it in workout before, I think it's the same thing, but it might be slightly different is when you look at, the number of people that have ever joined the membership, right? And it goes through the numbers and look at how long they've been a part of it for and then make an average of that to say, all right, we've got, let's say 500 members. On average, they'd been there for four months and so then you can work out the lifetime value of that. Could, it'd be the four months times of 500 people times the value of each month subscription. That'd be the similar thing.
Speaker 3: (16:42)
It would be the reason why we do one divided by the attrition rate is because if we're measuring the attrition rate monthly, it can, it can change depending upon, you know, what activities we're doing to probably try and keep people as well as it was. We are actually get people and so and also as well if you're, if you're kind of monthly average customer value has changed as well, then you likely to be dealing with things that are a little bit more current than you are where you lie your business model was maybe previously. So it's trying to be occurring as possible with with the attrition rate and also the average monthly customer value to really understand on a rolling basis the web client lifetime value is, and that's fascinating because I suppose, yeah, over time that will rate will differ. And do you work out the attrition rate on each month? If it's drip fed content? So say for example, it's automated drip fed content. Would you say like right and month one nutrition rate is very low. Month two it's gone up a little bit. Month three, kind of a little bit on thought shot up, do then be like, alright, we need to sell out something a month, three months.
Speaker 3: (17:55)
Yeah. So when, when we're looking at attrition rate, we're looking at as an overall metric. Okay, so we're looking at, you know, those clients that we had as our, as our base at the beginning of the month and how many then by the end of the month have we lost, right? Which client clients that we've lost this month. So when we do that, really that's an, that's an a company KPI. Rarely, what, you can of course measuring performance indicator by the way, what you can of course measure is knowing those, that the attrition rate of those that go through a drip fed program theS is those that are on a, you know, everything's loaded into your membership area and you've got everything that access to everything and you can, you can pick those against each pit, those against each other. And you can also look at, you know, what's the, the, the client lifetime value, of those that, or you know, the attrition rate and, and work backwards from everybody that prepays for a year versus those that pay monthly.
Speaker 3: (19:02)
So, you know, there's, there's, there's all sorts of things that you can play with the key thing really in, in, in, in any of these businesses and, and a great book for an, a great resource for anybody that wants to start considering this and a bit more detail would be the automatic customer great book and I, I'd highly endorsed that to anybody looking at looking at getting into this kind of business really. But, customer lifetime value is important. And the reason why that's important is because we know what we can spend to acquire it. We know what customer's worth to us, right? And we know what we can typically spend then to start acquiring customers and, if that client lifetime value starts to change and go in the right direction as we start to reduce the churn, right. You know, we may, we, maybe we're, we're putting into some additional steps to try and keep customers. Maybe they're going through like a 30 or 60 day wow. Kind of experience, you know, onboarding experience as part of that your program. Then you'll start to see, of course, when we're calculating it, at like this each month. W w w well, you know, we know, if that's having an impact pretty much immediately. So, okay, so in terms of this first point then what we're looking to do is find out the lifetime customer value of a, of a member knowing that number, you then know, right? What your money you've got to play with in order to get them to become a customer in the first place on average. Right? And then obviously on your job then to make profit of this membership is to get someone to come in for less than the price that they are actually worth what, what is the implication of someone being a member decided to leave as a member and what impact does that have on the future of that customer with that business? Do you, do you have any stats on that? Because one of the things I always think is like, right, say for example your attrition rate is four months, five months, something around that area and while you may have made a bit of profit from them in that kind of four or five month period, are they likely because they've said no to, you know, stopped becoming a subscription, are they likely to then, cause they've said no to you for whatever reason they made a decision to say no.
Speaker 2: (21:29)
Is that a big hindrance for them to ever become a different type of customer in that, in a company again or is it the sort of thing? Cause if, because your earlier you talked about like the fact they want to belong and it'd be part of this identity by saying I'm out of the identity because I'm not going to pay for any longer. Does that change the psychology of that customer to that brand?
Speaker 3: (21:50)
Well, it's very interesting because that's actually one of the profit activators. You're already, you already have some gain. This is good at this on a natural CA, anything, you know, we'll come, we'll come to that. Say it's actually, it's actually one of the most important things to know and how to pivot, your offerings in order to maximize client lifetime value and how to understand, the profiles of those customers to be able to engage with them more appropriately to what they actually need as well as what they want. So, I'm, I'm going to come back to that because it's so that is so pivotal to this okay, cool.
Speaker 2: (22:36)
I love, I like the way you've, you've, you've seeded that story that, and we're gonna have to [inaudible] it's an open loop. You know, what may this, so, you know, number two is installing tracking and you know, as any business grows, especially one that's, it's based around recurring revenue, you need to have confidence in accurate reporting and accurate data. And it might seem pretty obvious but you got to know where you're losing customers. You've got to know where the dropping off and, and, and how it's affecting that attrition rate so with a leaving in month one, are they leaving in month four and then month six, where are they leaving and a good place to start is actually, kind of just understanding the customer behavior before. Well, the telltale signs before they cancel. Okay. So what this means is we, in terms of tracking is actually putting some indicators in place to know, what are the things that might give us an indication that they're going to leave? So I'll get on.
Speaker 2: (23:54)
So let me hazard a guess. Is it something like an email open rate or a membership sign in rate or that sort of shepherds? They're not opening their emails. Okay.
Speaker 3: (24:05)
Oh, like all, are they not opening any emails have they not consumed the welcome video in the intro introductory series? I mean, you know, if they sign up for a free trial or like a test drive that human-machine yet or you or your subscription program and they don't log into the membership site to watch the welcome video, then you know that, you know, that's not a good sign because they're not engaging with you. It's like the most basic thing ever, but they're not actually doing it or when was the last time they logged in? So more kind of a recent see kind of when was the last time they logged in to kind of consume content so we can measure that and they also as well, like if you're running a business that's like a coaching business where, you know, they've prepaid for coaching or coaching in some description is part of what they're paying for then are they not turning up to the coaching calls?
Speaker 3: (25:02)
I mean, quite simple or have they sent a, if they reply to one of your automated newsletters and come back into your support system to complain about something and you don't know about it, I mean, that happens a lot. You know, you've got a customer, they're paying you, they reply to something and you don't handle it. The indicator that they sent something in as a support ticket that gives us some idea of what kind of thing we need to kind of have in place or reacted, create contingencies to keep customer retention the way that we want it to. So really when we call this kind of installing sensors in the business, which really just look out for all this kind of lack of engagement and how you can kind of plug any kind of leaky holes rarely in the book yet so what sort of things do you do to plug those holes to say, for example, someone's not logged in for more than 30 days. That's it. They haven't logged in for a month. What would you do at that stage? Does that sort of like, you'd send an email, you'd send a video or do it?
Speaker 3: (26:11)
It's really a, so the logical thing to do is reach out and a medium that can get to them quite quickly. So, you know, works well. But we also know that not everybody's, you know, opening emails. And if they're not opening emails from you, that might be an underlying reason. It might be going into spam, you know, even though they're a member, that can be a problem so, you know, you might want to use, mix up the media, send them an SMS, even just trigger an outbound call to try and reach out to them even a voice broadcast can reignite the, the relationship even though it's prerecorded so really anything, I mean, even at it's, you know, in our business, when we know that some of these kind of built up that subscription for some time and haven't been using our service, we actually go to the extent of sending a direct mail piece out because we know that that kind of loss and we need to get them back.
Speaker 3: (27:09)
They may well be paying us, but it's still an indicator. So it's kind of important. And we've kinda got a list of different kinds of advanced sensors that we look for when we help people implement this genuinely in our agency so we look at things in terms of frequency, so things like are they clicking, are they opening? Have they logged in, even page visits. So, you know, how many pages have they visited? How long have they been, how long have they been on the pages for all like sending out, are they filling out forms that we want them to? Maybe at the end of each video series or program, we're wanting them to fill in a survey about what they've done in order for them to progress to the next step. Are they doing that even down to if like we're looking at referral rate inside the membership, if somebody is not referring us, are we doing a good enough job?
Speaker 3: (28:06)
Is there a reason why they're not being very promotional about us to other people videos they've watched or even consecutive actions they've taken. This goes a little bit, you know, it goes a bit far, but like we will, Daisy chain a number of different actions that they must have taken in order for us to qualify them. Still being quite active in consuming things. So we'll be like, did they log in? Did they watch the video to like 25%? Did they then take an action to go to another page? And all of that kind of gives us some kind of indication of how engaged that person is. But also at a higher level, it can be things like number of subscription cycle. So how many times have they been through our subscription? Obviously the longer that they've been through it, the better for us. How many videos have they watched? How many inbound calls that they have, how many declined payments have they had because, and credit cards expire, you know, there can be problems with billing so if you're tracking, let's say for example, we, you don't have the tech, well you don't have to do well you do have a bit of seats, but you kind of like 80, 20 in this situation and you're saying, right, what one thing can I track? It'd be like, all right, let's track that. If they fail to do this, here's, I'm going to do instead. What if there's one thing, if there was like a priority thing to focus on with the tracking, what would that or do you track and what would you do?
Speaker 3: (29:36)
Simply put, if it's a membership site, I would be looking at a number of logins in 30 days because that's between subscription cycles. So yeah, the rule would be if they haven't logged in for more than 30 days, send an email or what?
Speaker 3: (29:52)
Yeah, probably 28 days because you want to get them before the next subscription goes out. I'm trying to engage them and then we have it on a counter so it just resets itself once they've logged, then, that's the best way to do it. But it could be, you know, if we, if we see in our business, we've got this funky kind of credit system, if they haven't consumed, more than half of those credits in a month, we know that they're not actually using the service as well as they could be using it. And that obviously indicates lack of engagement, which you want to get beneath the surface of those reasons so that you can actually be proactive and reach out and in some cases have something that's congruent to actually sell them into. So typically in our business, the biggest issue for them is getting customers, well guess what? We've got a training on an accelerator program on how to get more customers online. So that's a great thing to sell them into, but it doesn't really feel like selling cause they've already got the problem anyway. They're already a customer, so it's an obvious cross-sale to get them into something that can add value.
Speaker 2: (31:03)
Got it. Okay. Cool. Alrighty. Alright, so no one looking at a lifetime value, making sure you can get the, the customers in and working profitably for you. And number two is gonna be looking at tracking the right things and having contingency plans in place to be like, if they do this like a lot, not log in for 30 days, here's what I'm gonna do to resolve that situation. Or 28 days prior to the sale, then what would be your, what's number three?
Speaker 3: (31:30)
Number three is, actually, looking at surveys and, a specific type of survey that we'll talk about called an NPS survey which really looks at NPS. Yes. And for P for Papa S for Sierra properly. Yeah, yeah, yeah, sure, that stands for Net Promoter scoring and it's widely regarded to be the number one indicator of customer loyalty. So, basically the, the, the, the question that you're actually asking your, your customers is quite simple. On a scale of one to 10, how likely are you to recommend us to a friend or colleague? Rarely. And the wording can sometimes vary a little bit from that, but basically, it's, it gives you a very quick indication of, somebody's satisfaction with your service. And it's literally the quickest and easiest way and the cheapest way of increasing customer retention and refunds and to reduce refunds because obviously you're going to be proactive in your, in, in, in your, in your approach to people that obviously, or you at a very low level to those that actually are saying, you know, I'm loving this is fantastic.
Speaker 3: (33:03)
You're going to have a very different message, you're going to react to it very differently and so we generally run the surveys immediately or pretty much immediately after somebody first purchased, and then we run it in 90 days and then another 180 days from the purchase date. So what that allows us to do every quarter, if there's a sliding scale or, or change in that customer, that, you know, we need to be proactive about taking care of so you know, the way, the way that this works. And, I actually wrote quite a long blog article because it's kind of like a cornerstone campaign that we often create for virtually every business, not even subscription businesses for new welcome, a new outcome campaign and NPS score campaign is what we have in there and so I'll just very, very high level just how you, if they score between zero to six okay.
Speaker 3: (34:10)
That classified as a detractor. Okay. So typically we will proactively reach out to these people because they are not happy. Okay. We classify them as not happy. If they score seven or eight, we classify them as being passive, meaning that, you know, kind of we might have done an okay job, we'll maybe send them an email and say, Oh thanks for letting us know your opinion. We'd really like to know how we can improve our service. And then if they're a promoter, a nine or a 10, these are the people that we really want to push for. Hey great. Or how can we really maximize now that you love us, how can we maximize your experience with us? What are the things you're interested in or do you know, somebody else might be interested in this. So really about segmenting, those up and then proactively reaching out to them accordingly.
Speaker 2: (35:00)
That's clever. I like that. Cause I, I like, I don't find the people that needs a bit of love and attention in order to make them feel good again and also the people that are passive to get them more active and also love the fact that the people that are all loving it. I'll confirming that fact, and stating that fact to you so they know that you're listening and it's like a public announcement really isn't it? Just to you. And then really just to say, Hey, I'm loving this. And the chance of retention increasing as a result of that and confirming to themselves, it's like once you've said it, you kind of, you tend to behave in a way that's congruent and necessary cycle. So like the idea, that's cool.
Speaker 3: (35:41)
And it's that easy if you're running a membership site. I mean just, I was thinking about your business air, is you know, you do that after, you know, the first time they log in because they're going to have an experience. You know, maybe after they've watched the welcome video they're going to have an experience up until that point, you know, because you have, you push them through your sales process or have you pulled them through your sales process, right? Because they're two completely different things. If you've pushed them and you know, you've been really high pay and everything else, which definitely wouldn't come from you, but, you know, your refunds, cancellations are going to go up. They might not be happy on joining and, and you know, maybe you haven't actually delivered much at that point. So you definitely, sometimes we've met online membership.
Speaker 3: (36:29)
You may want to stagger that first initial MPS, whereas other businesses, if you fulfill the service then you actually then want to follow up with them very quickly you know, in different kinds of situations. But this leads us quite well into profit activating before, which is actually segmenting your customers. And clients and actually knowing who is who so that you can change and pivot the conversation based on them. So you know, if you've got different genders, different ages or different business types and sizes, you need to be able to change the conversation so that depending upon where they are in the life cycle of that business, you, you're delivering the right value at the right time to them so that it makes the most impact on their business. And without really segmenting, clients and customers, you might just be sending them additional offers or, you know, additional things into the membership provision or deliverable, that actually they don't need or want. And actually just makes it more confusing for them because they're just not at that stage. So it's really important that you quickly start to profile the people that are on your list, on your, your membership or your customer, your inner circle, whatever you might call it, to actually know then what you can begin to offer them and so not begin to offer them, but so what you're offering them is actually going to be, is actually fulfilling their needs as things go do. Would you have a scenario whereby if you segmented them, realize there's two very different types of audience or probably more than that, but it's two different, very different types of audience, some of which are looking for more help, let's say. And some of them just like, do you know what, I'm consuming the content, it's working well, but something like, you know, I'm not really getting to the grips of this, I really want to do it, but I need some help if you were to do that, would you, I mean, you could obviously upsells into some sort of consultancy level if that was the case but, do you ever have a scenario where maybe like, let's say for example, I'm selling YouTube, like a training on that and then it's training on Facebook video advertising and based on the fact that someone might say, do you know what, I'm just loving the Facebook stuff would you have a contingency where you buy like right months five, which is all about Facebook for example. Would you bring that early, for example to those people? Is that, is that just getting a bit too complicated or is that it can, it definitely can do, but I think it's important to also get a general feeling for those people that are sticking around who are your ideal client or prospects as a client customer for that subscription model because there will be some common traits of their size type, demographic, psychographic, and actually then shapes the sort of avatar for the people that then you actually ultimately want to get in through your lead generation. So actually it actually just two things is it does the part that, you know, knowing where people are, what they look like and what you can then do to get more of those people in. But then it can also then be the, well do we need to shape the program differently because we know that if they like this, then we can add more value by adding this. And if we have that, then it's going to increase the retention.
Speaker 3: (39:53)
So it can definitely do that for sure. Or you, you know, you might realize that, you know, the cheapest customers that you get in actually don't stay for very long. That lifetime value isn't, isn't great. And that can skew the numbers where some of the more expensive customers actually stick for longer on an initial acquisition, cost of acquisition, can actually, you know, be higher for some than others, but they stick for longer and that can vary on lead source and everything else. So there's a whole load of things that, that, that you can really debt game and play around with it. That gets very interesting. And, actually, these actually leads very neatly on that and answers your earlier question actually, which are very perceptive of in terms of this topic, which is actually being able to evolve the, your product, your, your subscription and your service offering.
Speaker 3: (40:56)
Because the truth is if you've done a really good job let's say your business way, you've trained somebody very effectively online to, to start to create then for the scale YouTube advertising and maybe Facebook they came to you at a certain level they had a certain level of appreciation for, what, what it was about the ultimately they probably came to you to get more leads and more, but maybe they now are getting more customers and more leads. So what they, what they came to you for. It's important to distinguish that customers don't buy features, they buy value and they buy the solutions to the problems and they buy the path to how they're actually going to achieve that goals as a business. So what they originally came to you for changes. So in the [inaudible], so hopefully like if I'm selling, here's how to get more leads from, YouTube ads, for example. They go and do that, start getting leads. And a natural next question is like, well, how would I get more of it? How do I start scaling up this bad boy in and seeing that well so I can do, yeah. So, you know, in six months time, or even three months time, those kinds of priorities have changed for them because now they've actually got laid. Now they've got a problem with conversion. So now it's about, well how do I maximize those leads? You know, and they'd grown as evolved as a business to a different level and so they've got a different need and so, if you haven't done a good job, you're going to start losing people because now you're not delivering the right value for them at this very time. Yup. You've fulfilled what they wanted. Now they're onto the next marketer. They're onto the next thing to try and get what they need when actually you've already got a relationship with them. If you understand that phase of business that they're in, you can pivot and change to be able to accommodate them, and ultimately retain them. And also, something that will probably be very evident for me is that I'm not a general market's arm like a, an advertiser. That's really good at a couple of things in terms of how to advertise a business when it comes to someone saying, well, I really want to run a webinar really effectively, I'll be at, I'll be then in a position to be like, okay, we're going to do a JV with this particular customer or become an affiliate or someone's programs be like, I really trust in this person's stuff, go and buy that, as an, as a natural kind of like on the sell of that customer. And so that could be a really nice way of building an out as well.
Speaker 3: (43:42)
So, the, the, the sixth and final profit accurate, the fifth was understanding the second or the fourth of the segmentation. Right. And the fifth was evolving. Evolving. Yeah, for sure. Okay, perfect. And the sixth and final and just like everything that's just, I've self anointed this kind of, there are only six prime. Yeah. I was never sound just like, there's never a seventh, but if I decide to release a book later down the line, I might release the seventh element. I notice there's not child, Amy, it's prevalent or you couldn't, you couldn't survive without this [inaudible], right?
Speaker 3: (44:17)
Yeah, yeah, yeah. So there are only so many principles of influence, but in a few years time, I might want my wait one more. Yeah. So it's a good job. This content for free. Yeah but this time next year, you never know. So, it's completely different. They, yeah. It's just that they, I mean, so, but it's, it's important that although we joke, these things are like the, the cornerstone, the cornerstones of there's only one cornerstone, so there can't be cornerstones that.
Speaker 1: (44:50)
About six priorities. It's low priority means there's one. Exactly. Yeah so you know, for me, all of these things are super relevant as super important in terms of starting growing and sustaining a profitable, subscription type business and recurring revenue business. A lot of these things, businesses like SAS businesses are things that they, they really dial into to make sure that they are growing as they, as they need to be. But I'm interested in listening to SAS is software as a service. I like the way that you can kind of just jog and fray it. It's, do you know what? I'm just trying to make it easy to listen to. And whenever I listen to anything and someone says something, if I don't understand what that is, my mind then goes to that place and spends an hour on that thing. They just switch off. I mean, we might, you know, SAS, SAS is software as a service ability on number six or eight.
Speaker 2: (45:37)
So, so the key here in number six is assigning some form of accountability for retention because we know that retention is so important. And if retention is so important, then [inaudible] and the, you know, it's, it's actually more important than growth rate in a lot of ways. So, what you need to do to keep on scaling is to, to, to have some sort of ownership over that retention. And so having somebody on your team, having somebody that is responsible for it, that's actually not an in terms of responsibility in terms of reporting on it. They need, they are able to report on it weekly at that consistently on the ball so that, you know, that they're fully on top of, you know, this, this, the cycles of, the, that we go through as a subscription type business and the, the key thing that always comes up is, is retention. So why not assign that re you know, that, that, that level of responsibilities to somebody to make it, that's that, that's our thing. And so you can then have them look at, okay, great. So we know now that we're having some problems in month two, why are we having some problems in month two? You know, what are we sending? Maybe we should send two bits of direct mail in the post and we'll what that looked like, or let's think about those contingencies, you know. Okay. So they haven't logged in. What do we do? You know, I'll, well, we'll assign, you know, mechanical to go out to them. Great idea. Why happens if they don't consume, the welcome video you know, let's, let's be proactive in, in, in, in, in, in seeking out those indicators and sensors, that tellers that we're potentially losing somebody.
Speaker 2: (46:03)
And so you need to have somebody on that. You need to have it. And in some cases, as businesses grow, you will, teams of people doing this, it'll go from one to 10 to three people. And so they become, if you want, like kind of account managers, but, they are being held accountable for the retention of those customers because, you know, in a lot of subscription businesses, the money is in the tail, meaning in the back end, you know, in some cases we can actually go, the cost of acquisition is higher than, than, than the money that we're getting in. So, you know, w w it can be that we can go negative on the front end and actually all of our revenues in the back. But that's because we know our numbers, we know our retention, we know our retention rate and so, you know, we know our lifetime value, so we're happy to do that. And so it's super important to be able to, to make sure that we have somebody that's held accountable for it. Would you, would you normally employ someone as that that'd be their one job or would you say they'll just be, there'll be working the business as well as having as a, as another, aspects of their other was their role?
Speaker 2: (46:53)
Well to be Frank, all I really like to have, ma, everybody in our business has metrics. So they have three individual metrics that they look after. And unfortunately the retention rate, attrition rate, number of clients, one, that's all. Like that's somebody's metrics, right? You can't just say what's our retention rate cause it only tells you part of the story and so, you know, for me, I think important when you get to a certain level, even if that's like a part time PA, VA, whatever it may be to begin with that, if you set your systems up right and this is the problem of in, you know, just going back to what you said before, it's like, Oh, you know, people want to get involved with a membership business and you know, they, you know, maybe we want to do an online membership site and they just don't work and they don't have the right systems set up in order to make sure that that is going to be sustainable and they will lose and they will lose heart. And generally they're the people that spent loads of time actually creating the product probably not enough time marketing yet or not in finding out what people actually want. That's another mistake people make but it's supposing that, you know, the product's gray and that's what people want, then they haven't and the next step is, well they actually haven't got they the right systems and tracking and measurement in place to pull this all together effectively.
Speaker 1: (47:42)
Yup. Got it. Okay. So let's, let's quickly ask you if you were in my situation knowing the products, they're already there. They all the payment processing is all set up. I can drip feed stuff. I can set up as a monthly membership. I can do a one time fee, I can do a part payment I can do bundles and all that sort of stuff. Knowing that I've got courses on YouTube, advertising, Facebook advertising, remarketing, video creation, but of software in there as well. What, I know that you haven't seen the business kind of about that side of things completely what would you as a gut call knowing that the agency is my main focus and I don't want to spend a huge amount of time on it. I can put, I can put someone full time on that, on that measurement of that but it's for me, any agency, we don't have something that's low cost right now. We just don't have that but that's where a membership might come in. Not low cost but a lower than the kind of like high end clients and speak what, what would you say, would you say first of all, membership yes or no and if you said no Y and if he said yes, how would, how would you structure it? How would you recommend that?
Speaker 2: (48:57)
There's probably a bigger question that's more underlying, which is really about what's the overall priorities of the business as a whole. Because I know how successful you are with the agency and I know that's such a big focus for you. So, sometimes it's a case of is that revenue and it's that time and is that effort worthwhile to create that lower end membership, which, you know, for you, you've already got such a wildly successful business. You know, it's, it's sometimes always the case you know, the, the, that people don't have that yet you're actually looking at it the other way. But the thing is I think you're coming from a place of, you know, how much value that you can have to people and what really, what difference I can really make by them just consuming some of those resources is, is that, you should, you know, certainly, have them that that premium is premium content.
Speaker 2: (49:58)
It's, it's, it's good stuff I would probably take, I'd probably survey your, your database first and I'd find out what are they most interested in, what, what their biggest challenges, you know what, what are the biggest problems that they're facing right now? What are they most interested in? And it might just be that it's maybe one microcosm of what you're actually got. They might be just remarketing. I just want to know how to remark it on YouTube or I just want to know the basics of Facebook advertising or have you got, you know, I just want to watch some videos of you on stage, you know, whatever it may be and I think from there you can then shape that thing. Oh, that's interesting. Okay. So what I could probably do here is make maybe part of the course available to give them a bit of a taster and maybe, you know, actually proactively them a few modules to get them started and then from there they can get access to the full course. So that's certainly a typical model where it's like a free, like a freemium or a low barrier to entry. They can consume part of it and then they can get access to the full course cause that's the, everything else is locked unless they pay for the premium content. Generally though, I think, you know, most people in, in, in some of the things that, that we're w w you know, you've got, especially they just want just give me the, you know, just give me it all. And it might be case through survey and get people maybe don't want it all. So it goes back to what I just said before. We might be, yeah, I, you know, I like, I want it all.
Speaker 2: (50:43)
That's perfect. I just want to know how to do this and I want all of that. Great. Well really I think it's, it's a case of thinking about funnel, how much time that's going to take you and and then, if you feel that, you know, none of these things could be sold you know, they could be sold very intentionally through different funnels or it could just be very much like a down sell. So actually a lot of things we haven't really talked about this was that actually some people will come to you, they're not a good fit for you and we, we both have that a lot with the agency. There's just not a good fit for us, but actually you just don't want to just, you know, you don't want to continue the relationship but just not in it. It's not profitable for you to do it and all, and it's not feasible for them to do over here.
Speaker 2: (51:25)
Well, let's give them that opportunity. So actually that bring all of those people that did come to us into like, Hey look, you know, I've got a lower end. I usually try, you know, for us, we charge like, you know, five to 12,000 pounds a month, what we do, and it can go higher but actually I've got like something at 300 pounds a month that gives you everything, all of our courses, or we give you one course every month or something like that, that they can step into. So it's so high value, you remember shit and they might then that phase of business might mean that then, you know, they actually implement, they actually do something and then they come back to you and say, actually, you know what, this has been working pretty well. You can definitely amplify in the agency. What do you think? I mean I just took your advice and we've done it and it's working. Is that something you can help us with now? And we've definitely seen that be the case with us and it's a nice thing to offer, you know, for, for, for speaking and and generally just downselling people from, from your, the programs that I'm not a good fit as well.
Speaker 1: (52:34)
It's interesting, really interesting. I think, I think I did definitely take on board the servo idea. I think like, I think a lot of people in my industry who are a level kind of feel like, ah, another membership, you know what I mean? They are already a member. She was like five different things already and so there's and called me because they won't be, I don't have a huge to build a huge community or anything like that but I do know that the content of God is very, very high quality and it will really help people and so I feel like there's a, there's part of me that's feeling like people can go and do it and get amazing results but, how we structure the financials behind that and what sort of support they would expect. Off the back of that is there a big question Mark for me as well? Yeah, I mean, the other thing just thinking about it and I mean, I know we have a lot of shots like this when we're not and, you know, doing the [inaudible] podcast, but yeah, the may, you know, there's something to be sad and it's a scary thing because, you know, we all got to, you know, you've got to value that information and, and the top w that went into it. But I would say the other option is to be very intentional about giving that away giving it away to really capture a big audience of people towards that, that content, but then know what that pain point is after they have gone through that content. So definitely don't give that all to them an idiot. That's like the worst thing ever.
Speaker 2: (53:03)
You want them, if you did the whole free thing, then you could just give them some and then slowly drip feed that out over six months, 12 months, whatever it might be. So that is digestible but then lead them and still be free. But just drip fed over like, yeah. Okay. And then what you could do is say, well okay, I know what their problem is. Once they've had, you know, they'd been through YouTube, cause I know what it is. That problem is that they actually then want somebody to look over their shoulder to make sure it's set up properly. Well that's interesting because I've got somebody on my team that, you know, for an hour, for 250 pounds, they could jump on or for 45 minutes or half an hour, they could jump on and they could book that call and pay for that call.
Speaker 2: (53:48)
Well that's a revenue then. Or maybe we can invite them to like an intensive workshop like one day where then you know, you've got these people that really engage with your content anyway. They just want some more help with actually implementing, get more help with that offers or like, you know, you crafting down moments for them. So the moment workshop is what you could take them to because you already know you've given your best stuff away anyway. So all of that content creation that people do say, wow, like digital marketer is splinted content from other things that they do. You know, so, you know, it could be a great way to transcribe some of that stuff, really pump out lots of content and be a content machine, be such an authority. And then, with the intent of taking people not to the agency, but to actually a middle ground where you can help with further implement things. And, what I love about that is like, say for example, we did a 30 day challenge, for example, where it's like each day is five minutes worth of just like, Hey, we'll be five minutes today. They want to be five minutes tomorrow, so be five minute video with five minutes, works with 10 minutes in a day. Anyone can put that aside to do it. I mean, it wouldn't be huge aspects of size edge if you like, right? Write this down, what are you going to say and then, do five minutes for 30 days. So it gives you that regular kind of like exposure to it. And then that 30 days you should be in a place where you've got everything set up, you're ready to go. And then it's just a couple cases like, right, what strategies do we have? And then they can either upsells those strategies, we'll have consultancy calls off the back of it, but the conversations we'll be having will be people that know how to speak the lingo nother, a certain stage already. And also what kind of like ready to start promoting as well. So that could be a really, really interesting way of bringing it all about, yeah. Like a 30 day challenge off the back of that.
Speaker 2: (59:40)
Yeah, definitely I think that's a great way to, you know, to get people to consume things, and to bring people, our business is all about relationships and it's, it's the relationship that we have with the people that we don't know. You know, we're in a one to many situation in terms of our lists great way to bring people towards us, not necessarily just to monetize people, but to, to, to genuinely create connections, generally create relationships and generally how people to create a better business for themselves so, so, you know, get more leads, get more customers, make more profit, whatever it is that that means something to them, can often not, you know, those people may know that they're not your ideal customer. You know, they may be aspirational to me in terms of an agency client, perhaps. Maybe that's just not the right fit for everybody as well. So, you know, that definitely all things that we can all do. And, and it's really just about really understanding the markets and really knowing how we can, we can help people. And how we can solve their problems.
Speaker 1: (01:01:54)
I think I'm a crack tip. Oh, as I me, I think you might have cracked it for me, which is nice. I like this. I like this. That's good. Yeah. Well hopefully it's been useful for people on the call as well. I mean this is one of those episodes where we do things slightly differently. So we just have a general chat about each one of our businesses as well. So anyone listening to this or watching the videos right now, what I'd love you to do, and this is the kind of get out of the woodwork of get the kind of conversation going a little bit ping us an email or post a message on Facebook and tag us in it or anything like that. Say, Hey look, listen to this episode with the six six cornerstones or whatever, we're going to call them the six prop activators for any recurring revenue stream and let us know what you think. Let's know if you've got any questions because I'd love to, this is a conversation that I'm going through in my own head right now and it's a, it's a really interesting topic I think. And it's nice to read that back into our own businesses as well. So, this might be a time to kind of like do a bit of a kind of like a connection on Facebook, let's know about it. And, yeah, let's know, feedback on other episodes as well. It'd be good to get your feedback and hear what you're thinking and see if there's any other any other topics you'd like us to talk about as well so if you're listening, give us that feedback. Tug us in on Facebook and I was asked Oli Billson and Tom Breeze and, yeah, we'll see you in a very an episode very soon. Awesome. Thanks Tom.