Join us for a unique episode. My guest, Josh Denning, and I speak very candidly about the information and podcasting business as it compares to running a business like a digital agency where you have clients and build a team. There are many myths out there about how to build an online business that gives you a lifestyle where you can live anywhere you want to and have a nice level of relatively passive income.
So many people who are looking for a business to start get fooled into believing that they can run an information products business and make over $100K /year. While it is possible. for 99%+ it is not probable. You will need MASSIVE amounts of traffic to make big income.
If you are considering the information products business or a podcasting business, listen as we share candidly how we learned that these businesses are much more difficult than they seem.
Questions Josh and I Answer in this episode:
- How did we get started?
- What is wrong with selling information products?
- What are some of the biggest mysths?
- What is the best business model to pursue?
- Why is having clients on retainer so important?
- How do you get your first 3 clients?
- How should you prospect for clients?
- Which parts can be outsourced?
More About This Episode
The Bright Ideas podcast is the podcast for business owners and marketers who want to discover how to use online marketing and sales automation tactics to massively grow their business.
It’s designed to help marketing agencies and small business owners discover which online marketing strategies are working most effectively today – all from the mouths of expert entrepreneurs who are already making it big.
Hey there bright idea hunters. Welcome back to episode 156 of the Bright Ideas Podcast, I am your host Trent Dyrsmid and this is the podcast where we help entrepreneurs to discover ways to use digital marketing and marketing automation to dramatically increase the growth of their businesses.
So if you’re looking for growth you’re listening to the right podcast. Now this is a very, very unique episode in that my guest and I speak very candidly about the information products and the podcasting business as a business, as it compares to running a business like a digital agency where you have clients and you build a team.
There is a lot of myths out there about how to build an online business that gives you this lifestyle that I am currently so fortunate to enjoy. And what I mean by that is you can live anywhere in the world where you want to, you can have a very nice level of relatively passive income.
No income is truly passive you know unless you own an oil ore or something where you don’t have to work but there is so much crap out there and I think that so many people who are looking for a business to start get fooled, conned, whatever word it is into believing that they can run an information product business out of their house and make $100 000 or $200 000 a year and while it is possible I am going to say to you that for 99.99% of the world it is surely not probable.
What is probable is that you can achieve the very same level of income and work even less than the information products business by properly building an agency that charges real business clients a monthly retainer. Now some of you may not have considered that as a business model. You might think, “Well I can’t do that.”
And to those of you that say, “I can’t do that.” You might be right but you also might be wrong. Maybe you can. And in this episode Josh and I are going to have a very frank, unscripted conversation about both of our experiences and we are going to dive into some specific tactics on how you can get your first one, two and three clients.
And if you get the right clients within three clients; you got more than enough income that you don’t need a job anymore. So there is a whole bunch of really good stuff to come in this episode and we are going to bust a few myths as well. So if you are struggling or you are dreaming about, “How do I have my own business one day?” This is not an episode that you want to miss.
Before we dive into it, a very quick announcement; I get a lot of emails from people saying, “Hey Trent, what software do you use to run your business?” And I use a lot of different software and so all of those are listed on a page and that page is GrabTrentsBonus.com and many of the links on that page are affiliate links so if you buy any of the software, I get paid an affiliate commission.
So as the URL GrabTrentsBonus.com would suggest, I give you a bonus. And some of my paid products are going to be available for free to you and all the instructions are on that page. So if you want to, go ahead and check it out. With that said please join me in welcoming Josh to the show.
Hey Josh, how are you doing man?
Yeah well Trent, it is good to be here, how are you man?
Very well thank you. So folks, this is an episode unlike any that Josh and I have ever done before. We are both going to publish this episode and this is going to be a very frank discussion. Honestly we came in to this interview; he was going to interview me about how I got started etc. and I was going to interview him. And in our conversation before we hit the record button; it became very quickly apparent that Josh and I had very similar business backgrounds.
We both tried to do the same thing, which we are going to talk about here in a few minutes and both found the same frustrations and I just threw this up, I said, “Hey Josh, let’s just scrap our interview agenda and let’s just have this frank conversation because this conversation is something that nobody is having. “
All the dream merchants out there are selling you on something that we are going to maybe talk you out of doing because it is not necessarily all rosy as you think it is going to be. And all this is going to make a little bit more sense here as we get going. But before we do that, Josh I just want to kick it over to you. Is there anything on your agenda that you want to make sure the audience knows that you want to talk about that maybe I don’t even know yet?
Yeah for sure Trent, aside from being interested and definitely hearing a little bit about your previous business that you sold for seven figures and what that exit was like and what selling the actual business was like; because that is a big objective of mine now; to actually go and take a company public over the next five years or do a really decent size private sale. I am very interested to see how this goes. It is totally off the cuff, I just want to tell my audience as well.
Trent and I literally had a ten minute chat before the interview, realized that we had both gone down the road of podcasting, thinking that it would be easier than running our digital agencies. We both had very big businesses; Trent had a Top Hundred Profit company in Canada, two years in a row.
And I was running one of the largest digital agencies in Western Australia and we thought it would be a holiday in a sense to go cruise off and run podcasts and interview people and have coaching clients and do info products and we both have discovered that it is actually a lot harder than running digital agencies that are doing millions of dollars in revenue each year with twenty or thirty employees to do this podcast alone.
It is just amazing that that is the case and we are going to chat about that.
Alright, so in respect of audiences that don’t know each one of us, Josh why don’t you just tell us a little about your digital agency and your experience and spend a couple of minutes on it so they have a deep understanding of who you are. And then I will do the same thing.
Sure, I have been in the digital agency industry for going on fifteen years now. It’s really about twelve I suppose, I was with Hit Wise, that was where my professional digital agency career started. I was with Hit Wise for a few years as a business development manager. Then I moved a bit to Bruce Clay where I was a SEO analyst for about a year. I ended up realizing that implementation, day to day was not exactly for me.
It was just to introverted, focused on the computer. I was people person and a strategy person, I preferred strategizing the campaign and actually speaking to business owners and helping them make decisions to improve their businesses. So there for a year, ran my own little agency called Quick For IQ in Australia for a little while. It never got to big, it was quite boutique, we ended up specializing in product launches.
A few personal things happened; a marriage that was about to happen did not happen. Exited that, moved to Thailand and long story short, ended up managing a white label in Divisions. I became the guts of what became the largest digital agency in Western Australia where I put on a team of thirty people. Which included SEO analysts, Pay Per Click marketers, lip phone lead generation people, phone closers or digital strategists, they weren’t just closers, they are very highly trained strategist really.
And there was offices in Australia as well and we just got all of the work done and worked for clients like Rio Tinto, Roses Only, some very large Australian clients and that is a twelve year progression, those three companies. The final company was Digital Monopoly. It is what they call it now and I was running the guts of it through a company called Smart ROI which is where we actually delivered all the implementation work and the sales was all branded as Digital Monopoly.
So that is it in a nutshell.
And so Josh did you get an actual exit out of that or did you just stop doing that?
It is a pretty crazy story actually Trent because I was offered 10% equity to stay in the mother company in Australia and a fairly hefty pay increase and unlimited resources to expand the sales team that I was operating here because the sales that had been delivered from my end of the business had grown to $150 000 a month in revenue. That is what my team had put on and because it was me deciding to leave I didn’t take any of the clients with me. I took the company with me, I took some money with me and I took some assets with me but I actually exited all that to chase this podcasting dream without getting an exit hit.
Okay and before I want to introduce myself I want to make sure that the audience really understands who this episode is for. If you are someone who is thinking, “Boy oh boy I would sure love to have my own information products business or I want to have a marketing podcast as well so that I can live this online passive income lifestyle.”
That is the exact person we are recording this episode for and what Josh and I want to convey to you, is we want to myth bust a lot of the (pardon my language) bullsh*t out that gets sold out there to you people who are looking for businesses like this thinking that it is just going to be a walk down the park.
In fact the reality is substantially different. So with that said, my business background, I was an employee, I was a sales guy. In 2001 I started an IT services company. Over the next eight years I built that up into a two million dollar business. I absolutely buried myself in debt along the way. Got out of debt by the end of it, had a very nice lifestyle; a couple of hundred thousand dollars per year income.
Then sold the business to the rest of the management team after my co founder and I had a big fight and I walked away with over a million bucks and so I took a mini retirement and didn’t know anything about internet marketing. Met this girl surfing, because that was all I was into at that point in time. Started to discover niche websites; I didn’t know my rear end from a hole in the ground at this point in time.
I started off building Adsense niche sites, did really well. I had a membership site, I had a blog, I had all these niche sites and then penguin and panda came out that completely ended that business overnight. And then I thought to myself I am just going to keep on podcasting because I love to do that so I started Bright Ideas and it has become a reasonably popular business; probably close to about 200 episodes now.
So I thought that I would sell a whole bunch of info products and the reality is that unless I was willing to write sales copy that was so filled with hype and BS I just was not going to be able to sell enough of these $97 products to ever make a couple of hundred grand a year. If you do the reverse conversion math, as in how much traffic do I need assuming three percent of my visitors convert to leads and let’s say then five percent of those leads convert to sales with an average of $97 each and I want to make $200 000 a year.
Folks let me tell you that it is a big, big number that you are going to need for traffic. And the way a lot of these folks do it is they list swap with other people and I have over the years had the opportunity to meet with quite a number of the industry and they will all say or do just about anything to sell you their info product. The reality is that the business opportunity is there, you can make money doing this.
But what Josh and I want to enlighten you to is if you work with clients and you build a team and you focus on creating an agency or some type of service business, you can make a lot more money and have a much better life. My personal journey has been an exact testament of that.
So after getting kind of frustrated with my primary source of income being information products; and I did okay, I did about $150 000 to $160 000 in that first year of which I kept about a third in profit. The one good thing about having a popular blog is of course people will come and they reach out to you and they follow you and they read your stuff and eventually they are going to call or email you up and say: “Hey I want to hire you.”
And so I very reluctantly went back into the service business. But as I continued to interview more and more agency owners, in particular content marketing agency owners, I realised that there was a really really good business there with really really good profit margins and so probably four or five months ago I decided to put Bright Ideas and its information products business as my second priority by quite a margin and make Groove Digital Marketing my highest priority.
Because as Josh would attest, it is quite a bit easier; the clients that I get find me and we have a couple of phone calls and then they say yes to a three or four thousand dollar a month retainer. My end goal has not changed: to build a business that provides me with a certain lifestyle.
So the dream of many info product marketers are that: “Well I’ll have all of these automated sales funnels and automated sales pages and people will just magically come to my site and they will buy my stuff and I won’t actually have to do anything. If you could get enough traffic, which I doubt most people can, you can make that a reality.
But here is the other thing that maybe the information marketing gurus aren’t telling you; it’s actually quite a bit easier to accomplish that same end goal and lifestyle by working with clients who are real businesses. And the ones that I target are actually fairly large; and when I say fairly large I mean five to ten million dollars per year in sales. And some circles that is not fairly large but you don’t want to go after businesses that are doing $500 000 a year because they just don’t have enough money.
If you get people who are paying you four, five, six or ten thousand dollars a month to do the things that we as digital agencies do and you build a team; the reality is that you can get your team to do the vast majority of the day to day if not all of the day to day operations. I’ll stop there, because I don’t want to monopolize this and it is suppose to be a conversation not a monologue.
So Josh if you want to chime in with some ideas, please feel free to do so.
Actually I just want to add to exactly that just by running through a little bit of my experience over the past five years with Smart ROI. It is really been only a couple of months now that the Tropical Entrepreneur has been going and I am a hundred interviews into it.
When I exited Smart ROI five months ago I had business development managers doing the sales that I had trained to the point that each of them were doing at least $15000 of recurring revenue contracts each month on retainer type campaigns; sometimes a little bit less but sometimes a little bit more. Sometimes they would pick up a deal for $20 000 a month. They were the real big ones, they were not very common to be honest. Then I had relationship managers that were looking after the campaigns for the sales people that were bringing them in.
And then there was SEO developers SEO analysts and Pay Per Click marketers. We used systems like SalesForce first and then we moved over to Affinity Live but it took a couple of years. I did two years working from 9am until 7pm to 10pm at night. I only worked five days a week, to be honest, most weeks but I thought about it on the weekend and how to make it better.
Within three years I had it to the point where other than occasionally getting on the phone to help business development manager get a deal across the line or to a relationship manager that had a disgruntled client that wasn’t quite seeing eye to eye; the communication wasn’t being delivered right or we weren’t hearing them right. I had to get on and take the communications to a higher level.
I could have really worked two hours a week, I was in the office but if I wanted to I could have easily left for three months and have a bigger business than when I left just because it was set up and it was systemized. It was a lot of work to get it there but the freedom that can be had from an agency or a traditional business where you are working with clients. And I have also done product launches, I have done Clickbank product launches and stuff a few years back and made big money out of that.
And just referencing back to that time again, I worked, to get one Clickbank product launched, just one launch; the first one. Me and my partner that I had at the time from Quick For IQ we literally slept three or four hours a night for eight to twelve weeks straight to get that product launch up and live.
You should never have to do that with a digital agency. To do the million dollar launches that you hear guys like Frank Kern and Jeff Walker and Jeff Johnson talking about you really have got to have done a lot of things like speaking, you got to be putting a lot of indoctrination content out, you got to have great relationships with your joint venture partners.
What I am getting at here is that it is much more likely for most people, not for all people but for most people to systematize an agency or a traditional business to the point where the freedom that you are seeking from your online business is more likely to happen more quickly than doing the internet marketing/ information style business.
Not for everyone, I think information marketing is a great business. I love the business and it will always be part of my model going forward now. But I also believe in the bigger part of information marketing; to really make it work is actually to be prepared to be a platform speaker which is something that is actually not revealed that often.
Trent, what would you say in terms of running digital agencies to get them systematized to the point where you get a significant number of freedom as opposed to an information marketing business?
Yeah, it’s a huge distinction because with the agency; I want to talk about that first. First of all you have to have this mindset that you should be the one building the systems and the procedures and so forth so that ultimately you are going to be using sub-contractors to execute all the little bits and pieces of the moving parts on an ongoing basis.
So let’s say for example that you are someone that has a job now or maybe for whatever reason you have quitted and you are struggling and you are doing information products. Man the road ahead of you trying to make enough money from information products; $47 or $97, it is going to be brutal, brutal to say the least. As an agency owner; and think of yourself just at the beginning as a consultant; not even as an agency owner. Just think, “I am just going to go out and get some clients.”
I run a mastermind full of other agency owners and so I have seen struggle in this space as well. The reason for the struggle is always the same. They don’t think like a business owner, they think like a working consultant. In other words, they do absolutely everything themselves right from the beginning.
That is a huge mistake and the great thing about today with the internet and places like Odesk and Freelancer.com and just all the places that you can network online, is that you do not have to be in a position where you can hire a bunch of full-time employees. My agency, aside from my wife and I, has no full-time employees. And that was very purposeful. Eventually there will be but we are going to wait until the point where the cash-flow is high enough where want to have some people that are dedicated.
But you can find people to do just about everything for you. So if you are willing to think about the big things you need to think about like: “What market am I going to target.” That is a super, super important choice and it is an area where I see people making a huge mistake because they think, “Well I am this new/small/inexperienced consultant so therefore I should probably just go after little clients.” Because that consultant doesn’t believe that they are an expert enough to get the bigger clients.
The bigger clients will pay more money. That is huge mistake number one because if you do that those little clients will eat you alive. You’ll never make any money, you’ll be slaving away fifteen to sixteen hours a day and you’ll never make enough profit to be able to build your bench. In other words add other people to your team. But think about it, choosing a target market, is that like a day to day operation?
No, that is a strategic decision, so that happens only once. Or maybe a couple of times a year if you get it wrong but ultimately that is not something that you are going to have to “do every single day.” So once you have chosen your target market you need to go get business. Well how do you do that? There is two ways you can do that, you can create content or you can prospect and I would suggest that you do a combination of both of those.
So again, think about this, can you write all this stuff yourself? Yeah you can, but that is not what I do. I do not write any of the blog posts that are on Groove. I pay other people to write them and I pay anywhere from $50 to $100 sometimes even a hundred and fifty dollars per post because I want really really high quality content.
And then if you are going to prospect the way that I am going to suggest you prospect is you really just use email and social media to make connections with people to get them to go and read you content.
You have identified this buyer persona and you have created content for this person or this buyer persona but they are not necessarily finding it so you start to get their attention so to speak, well that is really easy to outsource as well and you can that for like $3 or $4 dollars an hour if you get someone from the Philippines and you create all these templates and you say, here is the list. Or you even tell them to build the list for you.
In our case what we have done is there is a certain technology company and they have a tradeshow coming up and I
say that I want a list of every exhibitor at that tradeshow. And there is hundreds of them because this is a really big trade show.
So the virtual assistant builds that list, then I figure out what the prospecting system looks like and I build that system and I create a set of instructions that I give to the VA and I say, “Okay, I need you to send this particular email from my account” so she gets the login details for my account because if they reply I want it to come to me. Everybody gets this email, boom!
She sends them out one at a time because I don’t want it to look like an auto responder. I want it to look like it was sent one at a time. And trust me, people can tell because there is an unsubscribe link at the bottom of autoresponder email. My first email by the way has nothing to do with sales. It has nothing to do with me saying, “Hey do you want to buy my stuff?” I am asking a question about their industry.
So my response rate on those emails are very, very high. I just have this process that I go through. So let’s say for now let’s move off of prospecting so trust me it works, you will get conversations happening.
Then I have a three step sales process that largely I am the one that currently executes. I have those conversations but it is all documented so that over time I can hire the people to do it. And then when the customer says yes, here is the other big distinction. I am like Casper the ghost, as soon as they say yes I hand them over to our account manager who is someone who we hired as a part time contractor.
We pay her an hourly rate and she is someone that really values the ability to work from home. And there are lots of people out there who have corporate experience who have kids, who don’t want to go back and work the corporate gig. They love to work from home. So you can get someone who was making $120 000 a year for a lot, lot less because they value the freedom. They value the fact that they don’t have to work sixty hours a week anymore.
And so you can get far more talent than you think you can get. And so I build systems for, “Here’s how I want account management done” and I do training but the big thing is now when these customers say yes I don’t have to talk to them anymore.
Sure, I’ll check in with a “how are you, how are things going email” once every two, three or four weeks just to let them now that I am still paying attention and I am still thinking about them, which I actually am but I am not the one day to day having to do all of the calls and the emails and the project management and all that stuff. This is where I am trying to persuade you literally that by working with clients, if you build a team, you’ll actually have far more of a balanced lifestyle and passive income than if you try and go down the information products or podcasting business model because for example if you look at an entrepreneur on fire like Jonly Dumas, he has been super successful from a revenue perspective.
Don’t get me wrong, the guy shot the lights out if he is telling the truth in his income reports. Which I suspect he is but you know what, he is the talent on the mic. That means every Monday he has got to do seven interviews and I’ll tell you coming from a guy that has done 200 interviews, Josh and I were joking about this earlier, it gets boring.
When you’ve interviewed enough people the answers start to become fairly similar. You find people who are interesting but as I said to Josh I don’t find seven people a week that I am dying to talk to, which is why I do not produce seven podcasts a week. So if you think about the longevity of Jon’s model, he is got to be that guy that does all seven interviews and that is exhausting, every week, all the follow-up and so forth.
And does he have a business that he can ever sell? I don’t know, it is arguable, I’d say probably not because it is so tightly wrapped around his name, his brand, he is the interviewer. Whereas the way Josh and I do it with an agency especially when you build more people into your team and I have already done this. I sold my last company because I wasn’t the one that all the customers dealt with.
The point that I really wanted to make is when you deal with people who can pay you thousands of dollars instead of a hundred dollars, your ability to generate profit is much higher. You don’t need as many of them, with the profit that you generate you can hire people, you can build training systems and you can get people to execute those systems for you.
It is the way a franchise business works. People don’t go into McDonalds and wonder how long should I wait until I flip the burger. Their manager says, “When that little red light goes on, you flip the burger.” And a service business, if you are focused enough, can be done in the right way.
There is a great book; and I’ll end here and then see if I can come up with a question to ask Josh; it’s called Built To Sell and it is literally about an agency owner who is struggling and got too many irons in the fire, is not focused enough and really hates his lifestyle and wants desperately to sell the business. You can read the book in about two or three hours and it is absolutely brilliant.
E-myth is another one. It is the model that Josh and I are following and we are doing this episode with the hopes
of preventing some of you wasting a year of two or three or however many trying to get rich on this “I’m going to get rich trying to sell information products” business. I am going to keep selling information products, don’t get me wrong. But it is not my primary business. My information products are all about how to grow an agency because I am growing an agency.
I am actually doing what I am selling. And if people want help with prospecting, well I’ve got systems for that and so we can make that available. Or if they want help with content marketing, I’ve got a book for that.
Alright, Josh, after hearing me ramble on for that long you must have a few ideas that you would like to contribute to the podcast. So why don’t I just leave that as my question.
I do and that was all really great stuff that you shared there Trent. There is a huge amount of value for people. There are a couple of areas that I want to add to. I’ll just summarize what they will be. First is around the prospecting because I think that is something that a lot of people are not sure how they are going to be able to get clients.
I just want to tell them that it is relatively easy and I’ll go into a bit more about that in a minute. And with the podcasting and information products, you can still keep that as part of your model but you just got to be more strategic about it I believe now and I will go into that as well.
So let’s start with prospecting. A lot of people; and I just hear people everywhere say it, “The phone is dead, telemarketing is dead, you can’t cold call anymore it is too difficult, too painful, you shouldn’t do it and anyone who does it is an idiot” etc. I have to say that I want to blow that out of the water.
Yeah I agree.
That is absolute BS. One of the fastest ways to build a business I believe in the world is the phone, the phone is one of the best weapons with building a business. You got to get the right script and you got to get your mindset right with the way that you come at it. So if you ring up a business and you say, “It’s John Smith from ABC company calling and the purpose of the call is bla bla bla.” They instantly know it is a sales call and their resistance goes straight up.
But if you can come in a little bit sharper, a little bit perhaps smarter, “Hi it is Josh calling I am just trying to get the owner’s name, I was just after John please.” I am trying to come up with a script off the top of my head.
I’ve got one if you want to hear it.
I’ll quickly give this one so the one I use is, “It’s Josh calling from the SEO company and we are actually working with a business in your industry, we got them ranked in position, one, or we got them ranked in the top three. We are looking for one other business to do the same thing for. We only work with two or three businesses for ethical purposes as I am sure you can understand. I just want to know if you would be open to exploring. We are looking for two businesses to work with.”
And we found with that script in Australia, don’t know if it would work in the States or in Canada but we had a 20% to 30% open rate with that but let’s here, what do you say Trent?
Well hang on, you said open rate, is what you just said, is that a phone call or is that an email?
That is a phone call.
Okay, so I am really pulling back the covers here on my own system but that is okay. I focus on technology VAR’s. Value added resellers, it is the kind of company that I used to own, we were a Microsoft VAR and there’s lots of big technology companies, half a dozen huge ones and they all have thousands of VAR’s so I understand that their space really well.
And there is a thing called MDF, marketing development funds and all that means is that the big technology company will give their VAR’s some money to spend on approved marketing activities. So my first email has the words MDF in the subject line and this gets sent to the CMO. And CMO’s they know what MDF is and they are going to open that sucker because they are thinking, “Whoo, somebody want to give me MDF?”
And it basically just says, “Hey I am doing some research on your space because I am curious bla bla bla.” I am actually going to see if I can pull up the exact email.
While you are pulling that I just wonder, I know you are doing very well with that but have you found that going in, asking a question about their industry, that creates some interest to get them to see you as someone that is not just trying to sell them something but is a fellow person who is interested in the same industry.
I am interested to hear how you then turn that to a more sales focused scenario.
Sure, so all that I am trying to do is get a conversation started and I do not care how it starts because once I build trust and rapport I earn the right to ask questions because you can think about this two ways, I can go straight in, two guns shooting with my sales guy hat on and I will probably get rejected.
Or I can go in with the conversation hat on and my reporter hat on and I can start to ask them questions about their business and I might get rejected. But I think the chances are much, much less. The first email I’ll basically just ask them to tell me if they know anything about the MDF program for this particular program because I couldn’t find the info on the website.
I probably get about a 70% response rate to that cold email. 70%! 60-70, I haven’t calculated exactly but it is very, very high. Guess what else I get when they reply to me. What is in their auto signature? Their direct line, do you know how hard it is to get a direct line? And do you know how hard it is to get through to somebody without a direct line?
Are you in Canada or are you in the US Trent?
I’m in the US. So that first email really only has one goal. I want the direct line. And in my second email, this is where I leverage having a podcast, as a reply to them could be one of two things. It could be, “Hey I’ve had a look at your site and I see some really low hanging fruit on how you can improve your conversions, are you interested in hearing my thoughts?”
That is a reply to their reply. So I already have a conversation going. And if they say, “Yeah, I’d like to know what it is, I call them, and it is not a cold call anymore. They know who I am, they know why I am calling. So I call them up and I say, “You don’t have any calls to action on your blog posts and bla bla bla. And then I just jump right into question mode.
And then I go, “Is your website a really important part of lead generation? What do you do to generate leads now and what is working for you?”
And that is where, when you do digital marketing where you can really take the typical sales pain away from selling because you are not just presenting a product. The whole features, benefits, trying to sell me, me, me. It is more, “Tell me about your business. What is your main product that you sell? Who are your main competitors? What’s the big plan over the next few years?” Are you asking all those kind of questions as well?
Yeah, the first call; I call it a connect call. It has one goal, for me to figure out if they are a qualified prospect and if they are, for me to ask them if they want to invest an hour in a longer more structured conversation. Which is step two, called the exploratory call; so step two, I now have more trust and rapport because they have already had a conversation with me, they have already said yes to me once.
The exploratory call I dive a whole lot deeper, I ask them all sorts of questions. You know, “how much traffic are you getting, what are your conversion ratios, how many leads, what type of client are you going after, how many clients do you need this year to make your numbers, how may sales people do you have, what is their close rate?”
I dive in deep to all these numbers, number, numbers. And I the end of that again I’ll ask them, “I think we can help you fix your problem or your results” or whatever benefit I would say relative to that conversation.
And I qualify them on budget and if it is all green lights again across the board then I would say, “Look I’d like to have another call with you where I want to give you a customized inbound marketing presentation that outlines the strategy that I think that you need to execute. And whether you hire us or not you are going to get value from this strategy (and I call the third call a strategy call) that I am going to give you and if at the end of this you want to hire us well great, we can have a conversation about that.”
But it is always about delivering value first. It is what I call the Give-Give Formula. And I just made that up right now I’m actually going to call it the Give-Give Formula but you get the idea. Jay Baer wrote a book called Utility, the point is you want to be so helpful with your marketing that people would pay for it.
Everybody has problems, every business has problems. And here is the thing that I really want people to understand.
If you’re talking to a ten million dollar a year business and you can help them to get a 10% increase in sales because you have got a way better way of generating leads than what they are doing; you can charge a fair amount of money for that because it is about value.
I don’t ever charge per hour for anything that we do and our gross margins on our retainers start at 65% and go up from there. With the larger retainers it goes as high as 85% gross margin. So if you build the right systems and you make use of overseas talent this can be a wonderful cash-flow business.
And here is the other really great thing (I am taking a tangent of sales but I won’t go far). Every business needs marketing forever. No matter what algorithm change comes next, no matter what social media platform comes or dies or whatever. It’s always changing; they always need help with marketing.
That is a really good point too, most info product type membership sites; they’ve got a continuity bolt on. Their average lifetime of a client in a continuity program is somewhere between three to six months; six months on the really good side. In our agency, our average lifetime of a client was three years with an average spending of $2000 Australian per month.
The total value of our average lifetime of a client was $2000 x 12 x 3 so we were getting $36 000 on a lifetime value for a client with a fifty percent profit margin on average. You can actually do much better than that in information marketing but it is nowhere near as easy to do better than that. That business is fairly simple to build.
It is and our first client is paying us $3000 dollars per month. Our second client is paying us another $3000 per month so I got two clients in my business gross revenue. Just from those two clients, actually it is a little but more than that $6000 because they also bought some software and we get commissions of that software as well. That is two clients that is already doing about $6500 to $6600 a month in revenue.
Do you realize if you do the reverse conversion math that I talked about earlier and how much I am involved in executing that work for those clients? Zip, the account manager handles everything; I do nothing, absolutely nothing. She does the weekly calls, the project management, works with the writers, does everything.
So that is total passive income, yeah I have to pay her of course but that cost is much less than the gross revenue so the profit is definitely there. To get even to that level with information products, wow, you’re going to need a ton of traffic. Where are you going to get it all?
When you send your emails Trent, how do you find the right direct email address contact?
There is a couple of ways to do it. Let me tell you the way that I do it, I’m in the Hubspot CRM Beta program and let me just tell you how bad ass this is, there is a extension that I have installed in Chrome, I can go to anybody’s website, it is called Signals Insight. I click a little button it tells me the amount of revenue the company has, it tells me the number of employees and then it tells me who the key employees are and it gives me their email addresses.
That is sick.
That product is going to be publicly available in another couple of months. Now if you can’t get that, which you probably can’t, what you can do is use Reportive. And I think I have written blog posts that cover how to do all of this.
There is “Something Six” that I was using for a while. Is it Radiant Six or Cloud Six. Reportive is great but have you noticed that it is playing up a little bit at length.
Yeah it has. LinkedIn has been making some changes. I think if people don’t have a LinkedIn profile it doesn’t pull them up but most people do. Worst case scenario, go into Odesk spend $500 on a coder and get them to write you a little app to go to find email addresses. This is a solvable problem folks. If you are thinking, “I can’t get their email address” just give up and go home. This is a totally solvable problem.
You can reach out to them on Twitter. You can reach out to them on Facebook, you can reach out to them on LinkedIn. There are ways to get a hold of people. If you are on LinkedIn and you don’t want to pay a premium account, find out what groups they are in by looking at their profile, join the group, you can send them a free email.
You can get a hold of people if you want to. Email though is the best.
Just going back to the point of our podcasting and information marketing earlier; we don’t want to steal your dream out there. Information marketing is great, podcasting is great; the thing that Trent and I really want to get out to you, into the market and into the listeners is that there is a way to be more strategic.
If you can focus on your core revenue stream coming from a client base whereby those clients on retainers with high margin; even if it takes you two months of prospecting to get one client paying you $3000 a month and another month to get your second, you now have $6000 coming in potentially. Even if it is a 50% margin you now got $3000 coming in. In many cases you can survive on that.
Get another and then you have improved your skills so it is going to start to get easier to get clients faster. Get four or five so now you are on $15 000 a month with $7500 net profit. Now you have taken the beast off your back of being worried that your savings are going to dry up, you don’t have any money, you are scratching around. When you are in that state it becomes very hard to attract wealth because you are worrying about money.
Whenever you are worried about money, you are not naturally attracting it; you are naturally repelling it because of the internal state.
So we’re just saying if you can be more strategic about your income generation consider looking at retainer based clients as a way to get your revenue up much higher, much faster and then look at your podcast and your information marketing as you continue on as strategic vehicles just to get your positioning higher, to get your name out more, to build trust with your market.
For example you have Trent on your podcast you have me on your podcast; go out and get some other big agency people on your podcast and then if you have a look at Trent’s site and mine soon you’ll see it’s got all of the experts we have interviewed and these are big people in the IM space. That skyrockets his trust in the marketplace because if you go and interview ten major experts then the one who interviewed them is expert eleven.
So if you can be strategic about your income generation, more strategic about what your podcast is actually doing; it is building trust. It is creating relationships in your network that got high value and can open doors for you; more strategic products in the sense that they are actually adding value to your main revenue source which is your clients but also again another sell that you can either throw in as a bonus to win a retainer base client or you can actually sell to someone that may not be ready to move in as a retainer or wants to do it for themselves.
It’s a much better way in my opinion and also Trent’s opinion as well for you to get into serious income that you can actually live off of in a very good lifestyle and automate and then you can go off on your information products and podcasting if you want to.
I’m glad you brought that up Josh and just to give some context to that. My first business; this was going back to 2001, that technology company; in the first year, all we did was cold call. We did $200,000 in revenue in our first year. Here is a great script. Role play with me Josh, you are the recipient, just show people how easy this can be.
Ring, ring, ring:
Hey Josh, this is Trent and this is a sales call. If I can just have 60 seconds to explain to you why I am calling then you can decide if we need to keep talking. Does that sound fair?
Sure, sounds fair.
Alright, the reason I am calling is that I help CMO’s in the Microsoft partner community to generate more interest from potential customers. And I typically work with companies who struggle to predictably generate leads for their sales reps or their sales reps are having a hard time closing the leads that they have. Do you ever deal with any of these issues?
Yeah we do occasionally.
There, the hardest part of a cold call is the first minute, so if you just say (and I want to give Wes Scheiffer credit for that) “Hey this is Trent and this is a sales call.” How much more honest can you be? And if I can have just sixty seconds, “If you’ll listen to me for sixty seconds you can decide if you want to hang up and I’ll just hang up if you want to hang up.”
There is a couple of really important hooks that I developed over time. I have really been in telemarketing since I left school. Since I was fifteen years old I started telemarketing straight away, sold advertising on the phone, like traditional advertising, sold insurance, sold finance, sold mortgages, sold credit cards and finally found digital marketing as the profession that I really loved.
Exactly what Trent said, it is so absolutely true; it’s those first few seconds where the tone of your voice; you have got to come in with authority. What you say, you must create value in that first few seconds of the call.
You have got to demonstrate results in advance so to speak and the way that I do that is by saying: “We have already got a business that is in your industry ranked in the top three on page one and we have doubled their revenue over the last eighteen months.” So that is how I kind of give that results in advance. Frank Kern talks about having things exclusivity, Jeff Walker talks about it as well.
And so I say, “We only work with a few businesses for ethical purposes as I am sure you can understand.” So I have demonstrated that I have already got a result for businesses, the result that they are looking for, that it is limited in availability and because we are ethical I am demonstrating trust.
We are ethical, we only do it for ethical purposes and then when I ask I don’t say would you be interested in that, I always say would you be open to explore. Because people like to be open, they don’t like to be closed. And it is still a yes/no question which is not good but it is just that I find that people are much more willing to be open than willing to be interested.
So you are demonstrating results in advance, looking to create exclusivity, looking to demonstrate trust and specificity. There are a couple of other hooks, I can’t remember exactly, it’s been a while since I’ve been training my sales team but those are a few things only and if you can get those into your script and a really strong hook that demonstrates huge value to the client then you are going to win on the phone.
Having an authoritive tone as well, not being coy. Have you found that’s very important, like having that authoritive voice on the phone Trent?
Yeah, confidence is everything, for the fellas in the audience, it is just like going up to a girl. If you go up to a girl and you are like “Hi, uhm would you like to talk to…” They are not going to be interested. So you need to have confidence. The other thing that I was going to say is having a podcast; here is a great way to getting people on the phone with you.
“I’m interested in talking to you about being a guest on my show.” Send them an email or a tweet that says that. I get CMO’s on the phone with me who don’t know me from Adam all the time, just with that. It’s not rocket science guys.
If you’re thinking about podcasting one of the best things about a podcast is being able to open doors. Once you got ten interviews in the can you can open almost any door you want and you can really meet anyone that you want to meet and that network that you are building is probably the most valuable thing about a podcast.
Alright, from me, let me just finish up by say folks every two weeks I write an update on my Bright Ideas blog, on everything that I am doing to grow my digital agency and it is all free. So if you want to literally be able to look over my shoulder and see what I am doing and just literally copy me, all you got to do is just come read BrightIdeas.co.
And if you want to get anymore advice from me about cold calling in the agency space or winning your first few clients just feel free to email me at firstname.lastname@example.org and I’ll be more than happy to help you out however I can with advice, tips and ideas with any questions you got.
Alright, well Josh I think this went well. I hope the audience agrees. I thoroughly enjoyed the chat and getting to know you so thanks for making some time.
Yeah me too Trent, I mean it was off the cut, unexpected we just kind of set it up on the spot at the start of the call and really happy we did it. It was a fabulous call and I am really honored to have spent some time with you it’s been great Trent.
Alright to get to the show notes for that episode go to BrightIdeas.co/156 and if you enjoyed the episode please do me a favor and help me spread the word by going to BrightIdeas.co/love where there is a pre populated tweet awaiting the click of your mouse. So that is it for this episode, I am your host Trent Dyrsmid. Thank you so much for tuning in, I look forward to having you back for another one soon.
Take care, bye-bye.
About Josh Denning
Josh Denning is the founder of the Tropical Entrepreneur Show.
He is the mentee and protege of John Lee Dumas from Entrepreneur On Fire; a huge debt of gratitude is owed to John for his care and dedication while mentoring Josh in the art of delivering value through a podcast.
Josh is also an avid student of Frank Kern, Dan Kennedy, Jay Abraham, Eban Pagan, Ryan Deiss, Perry Belcher, Earl Nightingale, Jim Rohn, Napoleon Hill, Dale Carnegie, Yanik Silver, Jeff Walker, Jeff Johnson, Mike Filsaime, much of the Nightingale-Conant Library and on and on
Josh Denning is an expert at using internet marketing including: search, social, adwords and conversion optimisation to drive leads, phone calls, inquiry submissions, sales and increasing the number of visitors that convert to sales or leads.