When your Western-based business isn’t doing so well, is moving overseas the answer? James Schramko and Timbo Reid address this knotty dilemma with clever, practical and not-so-obvious solutions.
05:13 – Can you really save money by moving overseas?
06:42 – Have you been unknowingly normalized?
09:55 – The two areas business owners tend to focus on and why they are probably WRONG!
11:56 – Would you agree to compromise?
18:06 – Training someone to take over
23:08 – Get paid to do this
27:26 – When you have two…
29:03 – Leaving money on the table?
30:05 – Do this and you beat 99% of your competition (It’s almost too easy)
32:49 – Reactivating whoever’s interested
35:13 – Boost lifetime customer value
37:32 – Gamify things
Are you trying to escape? [Click To Tweet]
Pay attention to what other people are doing. [Click To Tweet]
If someone’s going to eat your lunch, it might as well be you. [Click To Tweet]
Go outside your market. [Click To Tweet]
When you have two of something, invariably one’s better than the other. [Click To Tweet]
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Here you’ll find Tim and James have some things to help your business become more powerful.
Tim: Welcome back to the cool, motivating waters of the ocean. The Freedom Ocean – a place where you, the business owner, or would-be business owner, will discover how to run a business that doesn’t rely on you to show up each and every day. A business that just might make you a million bucks and give you a whole lot more freedom. I’m your host, Timbo Reid, and that, over there on the other hammock, just back from a bit of a surfing sesh, that’s Jimmy James Schramko. Ahoy, Jimmy.
James: OK, Timbo, how are you?
Tim: Mate, I am absolutely all the better for hearing your saltwater voice.
James: You now, the water’s warming up a little bit over here.
Tim: You loving that?
James: I am. It’s that time of the year when you can get out of the 3/2 wetsuit and just slip on a one and a half mil top and just go with boardies. It’s like the freedom of that is liberating.
Tim: Discussion for another time, but why wetsuits make you look like a seal is kind of beyond me. Probably could be sorted out at some point.
James and Tim’s credentials
Hey now, Jimmy, before we dive into today’s topic, which is all about less for more ideas, I just think it’s worth reminding people, convincing them why they should believe what we have to say. Why should they believe you? What do you do?
James: Well, I guess I’ve went through that transition of having the way that people go about life, which is a job, being paid by one person.
Tim: Just On Break-even, the acronym.
James: Yeah. Just Over Broke’s another one.
James: And having a limit on my income, which was a problem. And there were other limitations too, but I believe that if you really want to increase your wealth, generally, and whilst there might be some high-paid jobs, and it’s possible to make good money, generally you’d have your own business.
So I have my business, and I’ve taken advantage of some of the changes that are going on in the world, where technology is sort of enabling us to do some of the things that would have been harder to do in the old days. They were still possible, and to some extent my great grandfather was doing very similar things to what I do, but with old technology, and it was much more difficult.
And I’ve been able to create a business that is predominantly operating online, which means I don’t have a physical office to go to, I don’t have to be somewhere, my people aren’t all in one place. And my customers aren’t all in one market. It opens up all these infinite possibilities. It’s a very exciting time to be alive.
Tim: Yeah, I got you. Well, speaking of grandfathers, and having a job, I only yesterday, if I can drop a name, I had a chat with Michael Gerber on my other podcast, and he was very clear, very harsh, about the idea of having a job and why having a business, or what he calls a company of a thousand, is a much better idea. So you and him are singing from the same songbook by the sounds of it, mate. And by the way, listeners, Jimmy has a very successful business. As the opening of this show said, James has got a million bucks, Timbo’s got a million questions.
For me, I’m a curious small business owner myself, I’m a marketing guy through and through. I have another podcast called The Small Business, Big Marketing Show that finds its way on the Virgin Airlines around Australia. And I am always fascinated to find out what makes successful business owners tick, and how we combined, you and me the listeners, can grow a better business that gives us more freedom so that we can have the boardies on more often.
There you go Jimmy, that’d be a good start. And you can find James – I call him Jimmy, he’s James Schramko, but you know, I lovingly call you…
James: All my sailing friends call me Jimmy.
James: Yeah, I used to race, a lot. From when I was a kid.
Tim: Have you got polo friends?
James: No. No polo friends. The sailing was all-consuming before I was 10 right through to in my early 20’s, I was sailing most of the time except for a few years off around the end of the school, senior school, where I windsurfed every day.
Tim: I’d love to see you at the polo, Jimmy. Just with a boater, and one of those strange-looking blazers.
James: I can ride a horse, but I don’t know about trying to hit little balls with the stick while riding a horse. That looks pretty tough. And it seems like a logistically difficult sport.
Tim: Correct, correct. It looks awkward.
The main topic at hand
Now let’s get stuck into today’s topic, which came about, Jimmy, when you were telling me about some friends who run a fitness studio that’s not going as well as they’d hoped. A fitness studio in Australia. So in order to cut expenses, put a bit of dough in the bank, they have decided to move to a third world country for a year or so. That sounds pretty good to me, but you think it’s a flawed idea, right?
James: Well, it doesn’t matter what I think, but it matters what is important to them. So I wouldn’t necessarily say that I think it’s a flawed idea. The thing that struck me is that it’s an interesting approach.
Tim: You think there’s a better way.
James: Well, again, better depending on whose viewpoint. Like, you got to be careful when you have opinions and stuff that we’re not just overlaying our own values onto someone. Other people have their own reasons and contexts and stuff. But when I first found out about this, I just thought, well, that’s probably a different approach than what I would take, because of my own needs and scenario.
Like, one of the philosophies that I’ve had is that, if you can make it living in Sydney, then you can make it anywhere. And I once was a guest speaker for a conference called DCBKK, but it was a lot of entrepreneurs who were living overseas in Asia. It was especially Americans, and they’re expats living in Asia to have a lowered cost of living.
The phenomenon of recalibration
So I’ve actually thought about this in the past, and my whole point to them was, just be very careful that you don’t reset your whole parameters. What I found, a common theme amongst some of that community, is they had dropped their cost of living down to very, very low outgoings, but they had massive mindset issues around charging Western retail rates for things. Because they got recalibrated.
So I’d just be careful about recalibrating. Like, let’s say you’re paying for a mortgage or rent in Sydney. I’ve done both of those things. It’s not cheap. Even food, coffee, etc.
Tim: It’s not cheap, getting more expensive by the day.
James: Like, your basic cost of living is – apparently, we’re the second most expensive place to live other than Hong Kong. But we’re often up there with London, or Paris, or New York. So you get calibrated to that, and then you adjust. Just like you’re saying actually, jokingly, about a job, that people tend to spend exactly the amount that they make, or even a little more. So I think that things normalize.
I also experienced this phenomenon when I was working at Mercedes-Benz. It didn’t matter what car I was driving, for more than a few days, I would normalize to that car. So if I was normally driving Mercedes-Benz or BMWs, and I’d take my family on holidays, sometimes the boss would stick me in some trade-in that we got, and I would just drive that. Because they’d needed something that wasn’t required at the dealership, so they’d give me a trade-in, like a four-wheel drive Land Cruiser. Once I had this old Ford Falcon trade-in, had MX-5 for a while. The first time you drive, it’s kind of weird, and the second time it sort of normalizes. Then after a few days, it’s like, that’s just the standard. You get used to anything.
So my concern would be, if you’re going to approach the problem by reducing costs, I mean there’s one major flaw with that one, and we’ll come back to that. But the other thing is, my concern would be, you might normalize to a lower cost of living and never ever
be able to come back. That’s like a one-way street.
The two things people tend to focus on
But let’s just talk about why cost is one area that people focus on a lot. There’s two areas that people focus on most, and one of them’s cost. And the problem with focusing on costs is that you can only cut your costs by 100 percent. That’s it. You could eliminate all your costs by 100 percent, and that is the limit. So let’s just take an example here. Let’s say you have a business and you’re making $100,000 a year. If you eliminate 100 percent of your costs, what is the maximum you could make now?
Tim: A hundred grand.
James: That’s right. And the other thing that people focus on then is traffic. They’re always talking about getting more traffic, I need more customers, I need more customers. And sure, you could get twice as many customers. Let’s say $100,000 comes from your current customer base. If you doubled your customers, what might you end up making then?
Tim: Sorry, you tell me.
James: Well, you’d probably make 200 grand, if you had twice as many customers. This is just simple, we’re not making it too complicated, this case study. So that’s one way to approach it, just get more customers, and you could double. So even if your costs were, say, $50,000 a year and you’re earning $100,000, you go from a $50,000 profit up to probably a hundred and something thousand dollar profit, assuming that most of your costs are just food, rent, transport and stuff, and that those costs wouldn’t go up too much if you have more customers. There will be some costs that go up.
But I just think it’s usually easier to grow the business or to do the right business maneuvers than to take the path of reducing costs or the drastic measures of stepping backwards. Because it’s hard to step back up from then. The natural lead-on question from that is, well, if I were going to step back, if I was going to come back from the lower cost of living place back to a higher cost of living place, what would I have to do to fund that? And then whatever your answer to that is, that’s what you should probably do now and just skip that whole step.
Tim: OK, to avoid the normalizing. So what we’re saying so far is that you can only reduce your costs by 100 percent, your running costs, and that you run the risk, in moving to a place that is cheaper to live, you run the risk of normalizing your life so that that becomes the new status quo and coming back at some point to, in this case Australia, to Sydney, is going to be a whole lot harder.
James: Yeah, and so you’d hear this term, like “false economy” where the thing that you’re trying to do ends up not actually getting you the result that you want. Because then you won’t be able to go back. It’s a one-way move.
Tim: You said earlier that we got to be careful not to put our values and opinions on this. I think we have to overlay the filter of freedom on this discussion.
The issue of compromise
James: Yeah, that’s the next word that comes up on my little list is compromise.
James: To me, this is a huge compromise. I actually, I had another friend, separate example, who for many, many years lived in all different countries. He was in the shipping industry, and the shipping industry is pretty small in Australia. It’s pretty big in places like Korea, the UK, he worked in other Asian places as well. China. He basically spent most of his adult life working overseas, and he grew kids up, and they lived in a few different countries. And then eventually the kids were living here, in their house that they had left a decade ago, and going to school and university as boarders, and as they grew up and started becoming adults. So the parents were living overseas, because they’re making more money and they’re saving on tax and stuff. But they’re not actually living in the same country with their kids, so for me that seems like a compromise that I wouldn’t want to go through.
But it is a common approach, so there’s a couple of examples that I’ve seen. There’s three I’ve given you. I’ve given you the example of expat Americans living in Asia to save a few quid, the shipping guy living in Asian countries while the kids live here, and then the other business where they’re looking to go overseas and cut back on costs. And mind you, the weird dynamic about that one is that they’re not going together, they’re taking turns. So it’s like, very disruptive. And maybe there’s a lot of positives too. That’s why I think we have to be careful.
Tim: Yeah, I get we have to be careful, but I also think like, just on the premise of how does one create more freedom in their business, I think it’s valid to say there are some things they’re doing wrong. Now if they’re chasing lifestyle, I want to live in a third world country just because the food’s cheaper and it’s going to be a little bit exotic, then cool, happy days. Tick, tick, tick.
James: Well, cultural experience, kids get some different things.
Tim: But people are listening here in order to create a life of freedom. And that freedom should be able to be achieved no matter where they are.
James: That’s really our point. What is freedom? Some people cross the line of escape. They’re constantly on the lookout for how do I get out of the situation I’m in. And costs are an easy option. I actually went through this myself. When I was raising my family and we lived in Chatswood, which is an expensive suburb, there was often pressure to go out west, to go somewhere cheaper. You know, get a bigger place, more land, reduce our cost of living. But in my inner core values, I did not see myself as a rural dweller. I like being closer to the water. You know, I just mentioned before, I’ve been sailing and living near the sea since I was a kid.
Tim: Well mate, when I met you all those years ago, you said, “Don’t go out to the barn, there are snakes.” So at that point in time, you were a bit of a rural dweller. It never suited you. I think I saw a pair of RMs inside, I think you always had the sneakers pretty handy, or no shoes, flip-flops.
James: Yeah. Although we had pythons and lizards and all that. But it didn’t sit with my inner happiness. I wasn’t happy with that. I needed to change and come back to the sea. And I’m a significantly happier person without compromise. I live in one of the most beautiful places in the entire world, and the test for me is when I go somewhere else, am I happy to come home? And overwhelmingly, when I come home, usually it’s like an upgrade in living conditions from wherever I’ve been. And nothing against places like Texas or whatever, but there’s not even a contest between living somewhere like that or living somewhere like this, in my mind.
Tim: Not too many big waves in Texas, from memory.
James: There are little ones in the wave pool, mate.
Tim: Little ones? You’ve checked it out?
James: Dude, they’ve got a wave pool now. A very good one, brand new. And by the way, that has significant ramifications for the surfing industry over time. When you have one of those in every inland American town, it’s going to be a very big sport. You watch this space. But anyway, I digress.
The main thing is, at what point do we start justifying to ourselves these compromises, telling ourselves that this is good, we want this, it’s amazing, or are we just kidding ourselves? Are we blind to the things that we could be doing? So there would be some things that I would do before I take that step, maybe they’re worth talking about.
Tim: Yeah, well I want to know what you would do. You can be critical and say, “If it was me, if I had a fitness business that was under-performing, my first thought wouldn’t be to move to a third world country to reduce costs.” Those kind of businesses sound a little bit like a job, like they are self-reliant on the owner to show up every day.
James: Yeah, that’s the thing. And then you think, well, if they’re not there, what are they going to do?
Tim: OK. So on the premise that we want to create a business where you’re not showing up, that remains local, that does create good income, what would you do?
James: And we should just qualify that. People know I’m doing coaching as part of my business thing, and that does require me to turn up. But at the same time, I have also built and sold businesses that did not rely on me to show up, in particular the SEO business. Listeners going back to our earlier episodes will have heard all about that. And the website development business. Both of those businesses did not require me to show up. And I’m now building another business that does not require me to show up. So I just want to clearly put that bubble, because someone might say, “What are you talking about? You show up to your forum every day.” I do. That’s by choice.
Letting someone else take over
So in this case, again, it’s like, what are they going to have to do to be able to go, they’re going to have to train someone to take over, so why wouldn’t you just do that anyway? That’s my first thought, is why don’t you list down everything that you are doing, and get someone else to do it? And invariably, the answer to this question, when I ask that question, is, “I just don’t have time. Don’t have time, don’t have the energy. I know what I’m supposed to do, just can’t get to it.”
Tim: Can I just add to that too, because I hear that a lot?”
James: Well, you’ve got to be the advocate for our listeners. Whatever they’re thinking, that’s really your role. You’re asking these questions on behalf of everyone.
Tim: Correct. So training someone to take over sounds hard, I haven’t got the time, where to start. One thing that I’ve seen, having interviewed 337 successful business owners on my other podcast, The Small Business Big Marketing Show, is that many of them have systemized, and that first step of systemizing appears to be the first step in also creating a blueprint that’s not only going to train someone to take over from you, but it’s going to train others to take over and build franchises, or licenses, or whatever business structure you want to follow, well into the future.
James: You’re absolutely right. I imagine of all the successful people that you interviewed, plenty of them would have a team.
Tim: Yeah, plenty. I could almost say all.
James: Unless they’re an Olympic athlete or something. And they’re still going to have a team. They’re going to have a coach.
Tim: Well, I have interviewed two Olympic athletes, funnily enough. Michael Klim and Steven Bradbury. And both business owners, both with teams.
James: Right. So it’s a common thing. And I was kind of even a little bit blind to this when I researched my own audience, and I found out what their biggest challenge is. One of the top four was team and scaling, and this is what we’re talking about.
Tim: What was the challenge, not having a team?
James: People are just not very good at hiring, leading, training, systemizing, building performance in their team. You hear the same complaints, right? Tell me if any of these strike a chord with what you think our listeners are thinking.
Tim: I’ll give you a “ding!”
James: [Laughs] I don’t know where to find someone.
James: I get someone, but they don’t know what to do, they can’t think for themselves.
Tim: Ding! Ding, ding, ding, ding, ding!”
James: They keep making the same mistakes.
Tim: Yeah. No one can do it better than me.
James: Yeah. I’m the only person that can do this.
James: I was kind of blind to how much of a problem this is. But then when you think about it, it makes sense. Because most people, they go to school, they might work a job or two at a lowish, sort of lower-rung level, maybe make it to a management role, maybe not. Maybe they’re an expert, or an author, or specialist, and they’re not really exposed to, some of them have never even worked in a company. A lot of the successful entrepreneurs never even had a job in a company. So why would they be good at running a team? And that’s where you got to nail things like systems.
I’ve interviewed people like Sam Carpenter, he’s got a book called “Work the System.” You’ve got to create standard operating procedures, and the first person to do that for is yourself. And we’ve talked on this show about having routines, about checklists and frameworks. It’s about getting into a routine of systematically doing the things that need to get done, and then over time, you list down all the tasks that you’re doing, and you do that task transfer. You hand it from you to someone else. And it’s easy at the beginning, but it gets really hard when you’re trying to outsource the things that you’re actually good at. For example, for you to outsource your podcast, Small Business Big Marketing, would be a really difficult transfer, wouldn’t it?
Tim: The actual hosting and the creative production of it, yeah.
James: That would be one of the hardest things for you to outsource.
Tim: Yeah. I don’t know whether I should.
James: Well you definitely probably shouldn’t, but it would be possible if it was required. Let’s say you were consulting a marketing customer, and you come up with a fantastic show premise for them, they really need to take advantage of the podcast medium, and then they get to this bit where, I just want to do the show, I think I’d be really good at it, I just don’t have the time or whatever. There’d be so many options for them to hire a host or to use even customers’ recordings as part of the show, for them to just bounce back in a really leveraged way. Actually, leverage is a great word that has to come up.
Get paid to train your new expert
Tim: Well, let’s get to step two. Well, not step two, but what’s another thing you’d do, Jimmy? So far, you’ve trained someone to take over this fitness business locally.
James: And I’d go so far as to say I would actually get paid to do that, too.
Tim: What do you mean?
James: Well, if you think about a fitness type business where there’s often experts like instructor types, right? There’s certification courses that people can do to be qualified to be able to do the training. So, for example, if this person’s the expert and they have to show up to do the class, and then you want to find someone to do that, you could source from existing pools of trainers or experts, or you could grow your own.
Tim: Yeah, right.
James: There’s a pretty good chance from a school that they’re going to have a customer base of people who are passionate about that topic. And from those passionate customers, there’s a good chance that some of them believe in you and trust in you enough that they would like to learn from you and get accredited or certified in some way, so that they could one day be the leader of the class.
Tim: Gee, that’s cheeky. So just to be clear there, you’re suggesting that as the owner of this fitness business, you could say, “Hey, people out there in the fitness industry who want to learn how to run a business, who’s willing to give me X amount of dollars for me to train them in running my own business, at which point there’ll be a job for you at the end?” Is that what you’re saying?
James: Yeah, you could even guarantee it.
James: And here’s the beautiful thing, you’re tapping into an existing database.
Tim: I love it when you say, “Here’s a beautiful thing,” because I know to you it’s like, here it is, here’s the secret sauce, guys.
James: It’s just so clever. It’s so simple. Like, your customers are right under your nose. They actually come in and pay you. They already pay you to learn what it is that you do. And some of them, a percentage, let’s call it 10 percent of your passionate, active customer base, probably would like to take that to the next level.
James: I don’t know whether it’s a kickboxing studio or whatever, if someone’s paying $500 a year to learn kickboxing, and they keep showing up, you’d have to think out of a class of 10 that one person might think that they could invest $500, or $1,000, or $5,000 to learn how to be a kickboxing instructor, and that they might do a certification course. They might actually pay you to teach them, and then you say, “You pass your test at the end of this course, and I’ll let you loose on your own class.”
Tim: Jimmy, there’s a few listeners who are getting a bit restless, saying that well, “I’m going to train this person, or be it they may well pay me to do it, so I’m not going to be out of pocket. I’m going to train this person up to run my business, and then they’re going to leave and start their own.”
James: They might do that. They might do that.
Tim: C’est la vie? A bit of French there.
James: Well, you know, this is one of those things that we’re talking about the risk of cannibalization. There’s a great saying, I’m not sure who said it, but if someone’s going to eat your lunch, it might as well be you.
Tim: Take that one. I’ve not heard it before. Quote, unquote, James Schramko.
James: I’m not sure about that. But the point is, it runs with that classic saying, you know, what if you train your staff up, and they leave? What if you don’t train them and they stay?
Tim: They stay. Yeah, love that one.
James: At least this way, you’re already getting paid, and why not do a group of them? Why not get five students or 10 and leverage your class? You want to go for gold. Why don’t you put out that little camcorder on a tripod and record it? Maybe you could do an online training class.
Tim: I am seeing a reality TV show in the making.
James: This is all basic stuff in our industry, but it’s unheard of in outside industry, which is why someone would consider leaving the country instead of doing these simple steps.
Tim: Is there a next thing you do? We haven’t exhausted, but I’m sure there are other things you do besides training someone to take over.
Next step: benchmark
James: In this case, they have two places, so I would basically benchmark between the two. I would compare what can you learn between the two separate places that you could instantly boost the other one with? Because when you have two of something, invariably one’s better than the other. So there’s usually quick wins there by balancing them out.
James: Does that make sense?
Tim: Yeah, it does. totally.
James: So like, you’d have a look at, “Hey, where do we get customers for this place? What’s our conversion rate? What’s the retention of people who come to class? What does some of our staff in this place do versus the other one that’s really good?” And then as soon as you find something good, you bring it into the other one. And bring it up, so you can level them up. Like a catamaran. Two hulls pointing in the same direction, when one’s performing then share it with the other one.
So that’s one thing. You can also cross-pollinate the actual staff, like try and get them to work in a different place. They’ll tell you all sorts of things really quickly, because they’ll notice the differences instantly that you might be blind to, because you’re too close to it. So that’s one thing you could do.
So so far, we’ve got, you get people to pay you to learn how to do what you do so that you can then put them in to take the classes that you can’t. I’d be also looking at what’s your actual capacity. Are you filling the available time? If you’re paying a fixed cost of rent per week for a studio, and you have X number of hours that you could sell that studio time back to group classes, how many classes are you filling?
Differentiate your offer
And then I’d come up with cool topics for the classes, like differentiate. Like again, if you were a kickboxing place, you might do a particular style or like, just an arms thing or just a legs thing or like, you know, like you’ve seen in gyms. They do spin cycle class or step classes.
Tim: What you’re suggesting is, look at your current product offering, and surely you’re leaving money on the table somewhere in there. You might be offering things that people don’t want, you might not be offering things that people do want. You might be packaging things up in a way that aren’t appealing, so apply a little bit of marketing now. Simply give things a funky name, you know, create story behind them so people are more engaged. Is that what you’re saying?
James: Absolutely. This is right up your alley, Timbo, some marketing genius stuff, if you pull the story out of it, you do your research with your customers, you pay attention to what other people are doing. Particularly, and this is something I really got from Jay Abraham, people are not in your industry. So if you’re a kickboxing class, I’d be going and having a look at, what are people doing at boot camp fitness classes? What are people doing in ballet classes?
James: How are people dealing with their students in dance studios?
Look outside your industry
Tim: Yeah. Too often, we look within our industry.
James: Yeah, we’re looking at other kickboxing studios. It doesn’t make any sense. Sure, we’ll get a couple of quick wins, but it will very quickly neutralize the market. You go outside the market.
That’s actually one of the greatest things that I bring to the table in my high-level mastermind, is I’m seeing 30 businesses at once, and I’m cross-pollinating the best practice. If I see something take off with one, I could share it with the other 29. Like, it’s a quick win for them. They’re never going to see it any other way.
Tim: Yeah, it’s a classic example. Like I have business owners, let’s say a jeweller comes to me and says, “Hey, do you know any marketing specialists that are really good with jewelry, in the jewelry industry? Well, maybe I do, but go and find some marketing you love from outside of your industry and see who did that. And maybe employ them instead, because I think once we get stuck in our industry, it’s hard to differentiate yourself. “Oh, they’re doing that, I’m going to do that.”
James: It’s like, you post those really fantastic pictures when you’re on your travels from wherever you see interesting ideas, and you put it on your Facebook, and they’re instructive for us. We can learn the dos and don’ts of marketing from some of the things that you share.
Tim: Yeah, correct.
James: And that’s why travel broadens your mind, and maybe that’s one of the great reasons for these people to go. That they might really reflect.
But let’s just have a quick recap. We’ve talked about focusing on what are the activities that you’re doing, and what are the things that would be harder to give away and like, really try to tackle that. And that’s get paid to train up people to take your spots and maximize the capacity through product differentiation. And of course, the biggest, easiest win of all is just emailing your existing prospects/customers with an offer. And I would use something like a Dean Jackson nine-word email, which is a very simple thing, it reminds people of what they are actually interested in the first place and just tuning in with them to find out if they’re still interested in that, and then having a conversation with them and leading them to the appropriate solution.
Reactivate your customers
And the main thing is, it’s called a reactivation, that is going back to people who’ve already put their hand up and said, oh, “I’m really interested in kickboxing. I want to learn how to be a great kickboxer.” You just go back to them and say, “Hey, Timbo, were you still interested in kickboxing? You know, learning about kickboxing?” And then they say, “Yeah, I am,” or, “No, I’m not.” Or whatever. But if they are, you say, “We’re getting together next week in the studio, we’re bringing in Ching Chong Cho, the kickboxing world champion. We’ve got a video screening of Ching Chong Cho, a special video we got from Red Bull or whatever, and we’re going to go through that. If you’d like to join us, you’re certainly welcome.”
And then there, you make a special offer. Join for a year, you get 40 percent off and you get a bonus of x,y,z, you get a special monogrammed towel or whatever. I don’t know the industry, obviously. But there’ll be things that the people in that industry are very excited about. You might get your own gloves or your own yoga mat, if you’re in a yoga studio or whatever. There’ll be things that you could use as bonuses that don’t cost you very much, that would be a significant reminder/anchor/value add that make it a compelling deal. You tap into that sort of groupon effect. It’s a good deal, I need it.
Tim: Yep, yep. Well, there’s plenty they could do, Jimmy, I think. And we probably haven’t covered it all, but it’s a great start. Team, training someone to take over, look at your capacity, look at your marketing. There’s so much they can do, just from a marketing point of view. How many businesses really undervalue the power of marketing? That would be a topic for another episode.
James: Probably very few are doing email capture or SMS properly. Lots of hairdressing salons, etc., they get your phone number, but they send out stupid promotions. Like I get a promotion from the hairdresser I went to, it’s like, “Hey, it’s Melbourne Cup special on curling and whatever.” I’m like, do they understand I don’t really even have hair? They should have like special messages for bald customers, like special on the crew cut this week. Yeah, I’m in. It should be segmented. So I’d be starting to segment your customer base.
Boost the value of your customers
And then the real gold for a business like this is to look at ‘How can I increase the lifetime customer value?’ And the answer to that question is going to come usually in the form of encouraging repeat visits. Like, getting them back into the place, and consuming, and enjoying, and helping them get success, showing them that they’re succeeding.
Something simple like, if you were a kickboxing studio and you did a before video and someone joins as part of the process, and like, you have a custom app for your own studio, a simple idea, where when they join, you just take a little video of them doing their best move, and then a month later, you take another video, just to show them their update in a little pictorial timeline or something. That would be gamifying it, and it’ll be orienting their goals with their actual results and achievement. And I think they’d be a lifetime member, and they’d be more inclined to want to learn how to be an instructor and so forth.
Tim: Hey, lifetime member, there you go! If this business is under the pump, instead of moving overseas to reduce expenses, the idea of maybe offering some lifetime memberships, pulling some money forward, getting people to sign up for 12 months instead of paying as they go, and incentivizing that, they’ll get some quick money in the bank, right?
James: Well, I think in their industry, there’s pretty heavy regulation about that, because there’s a lot of people being stung by buying lifetime memberships, and then the place goes broke. I would never join a gym or a membership for anything more than annual. But even then, I actually pay monthly for my gym, just because I’ve seen it happen a dozen times before. But I think recurring subscriptions are the key for these sort of businesses. Not selling like 10 packs.
Tim: Yeah, correct.
James: Those things suck, because people will buy them and they might take a year and a half to use up 10 tickets. Instead, go with the monthly subscription or an annual subscription or a six-monthly subscription, and that way you’ve got time to show them results.
Consider an app
Even my local gym for example, they give you a little swipe-chip to get in and out of the place, because it’s like, there’s no one there most of the time. And if they simply had a little scanner on each machine that I could just go, blip! And if they had their own app for that gym, that charted which machines I use and how often – you know, like your phone does with how many steps you take? If they synchronized it into the Apple device that lets you see your gym activity, just like people do for catching waves or doing their mountain bike rides or road things, that sort of stuff is how you would really build a strong…
James: You’d keep your customers coming back with that sort of stuff. It’s working with gamification and the addiction that people have to track and chart their progress. You can do that. You can get an app for a couple of thousand dollars now. We have a few for my own business. I’ve been doing this with several of my clients. That’s the quick win. And it’s so easy to have your own app for your own business, and you can gamify for your customers or make it easier for your customers to deal with your business, and keep them, and then you’re not scrounging for customers and you don’t have to move overseas.
Tim: Love it. There you go. There you go. Jimmy, loved it. Listeners, that is another episode of Freedom Ocean, done and dusted. We hope you got something from it. If you did, or maybe even if you didn’t, head over to FreedomOcean.com, and let us know your thoughts in the show notes for this episode, because we’d love to hear from you. We’d also love to hear from listeners, wouldn’t we, Jimmy, if they have a topic they’d like us to cover in an upcoming episode, and they can do that too by going to FreedomOcean.com and hitting us up via the contact form on the page. We respond to every email, we love to hear what you’ve got, what you want to talk about – this is your show.
James: Yeah. Just feed Tim the questions, he’s there to ask on your behalf.
Tim: Correct. I’m your representative, team.
James: We’ll keep answering as long as I possibly can.
Tim: Now if you want more of us, you can find James over at SuperFastBusiness.com, where he has a forum. Who would you describe the typical member off your forum, James? And then I’ll do the same for mine, because they are vastly different, aren’t they?
James: Yeah. Most of mine have got something going on, particularly with an online focus, and mostly business owners interested in getting some help from me. I coach people privately, and personally, pretty much every day. So that’s been going particularly well. Timbo, you can be found at SmallBusinessBigMarketing.com. What have you got cooking over there? Part from Australia’s best business podcast.
Tim: Yeah, well, it’s going alright. Which can now be found on Virgin Airlines, which I’m pretty happy about. And I also have a forum. My forum’s full of bricks and mortar business owners, so I think that’s where James’s and my offer differs, where I’ve got people in all sorts of industries but very much above the line. They’ve all got an online presence, and they’re all trying to improve it, but they’re my people. And I’ve just got a book there as well called The Boomerang Effect, which I launched about six months ago, so you can grab a personalized copy of that over at SmallBusinessBigMarketing.com.
Jimmy, it’s been a pleasure. This hammock’s getting a little bit sort of uncomfortable, I’m getting bed sores. So we might call it quits, but it’s been a pleasure, mate, and I’ll let you get back into the surf. See you next time.
James: See you, Timbo.