In this episode of Freedom Ocean we discuss:
- The pros and cons of membership sites;
- Whether Google + is any good;
- The impending launch of James’s new training product – Wealthification.
Internet Marketing Products & Resources
Have you seen the Freedom Ocean Internet Marketing Products page? Everything we recommend lives here.
TIM: Welcome back, listeners, to Episode 34 of Freedom Ocean, and I am your host, Timbo Reid. And right there is James Schramko. Good day, mate!
JAMES: How are you going?
TIM: I’m very well! Hey, sometimes I think we should record the conversations we have before we hit the record button because they’re full of gold.
JAMES: What did we talk about today?
TIM: Well, just stuff, just what’s going on behind the scenes—
JAMES: That could be the episode then. Just stuff. The episode where we talk about stuff.
TIM: We could just hit record one day and forget it was on and then leave it to our fantastic editor guy, Liam, to make sense out of the nonsense. But there is good stuff there. But hey, mate, we’ve got a bit to cover really, today. Today’s the membership show, yeah?
JAMES: Ah, getting back to the themed episodes.
TIM: Well, no, but I like to think—I think it’s always good to set up, up front the meaty stuff that we’re going to talk about, but there’s plenty of other things we’re going to cover, yeah?
JAMES: Okay. I’m up for it.
TIM: Oh? Well, how’s your week been? More to the point, how’s it been since our last episode, more to the point?
JAMES: Just unbelievable. Like this huge snowball gathering momentum rolling through the village. Kind of exciting, I’m just about to release my newest product, so it would be out around about the same time this podcast goes to air. And this is my next mission, I guess, after the Traffic Grab success of last year. I’ve gone back to product creation mode and going through the same process of documenting and collating and putting together some really good type content, but this time around the topic of business growth and creating a business that you can actually generate cash from and sell.
And it’s basically how I created a business that funds my lifestyle and I call this the Wealthification process. So I know in different episodes we’ve talked about things that I’ve been doing in my business. And now what I’ve done is document them all into some really compact modules and I’m about to launch that. So that’s kind of exciting.
TIM: Yeah, it is! But Traffic Grab was the last time you did that, it was a significant product. So you must have put a few hours into pulling this together.
JAMES: I’ve done it differently this time. I have really reduced my batch sizes and increased my cycle. So I’m able to produce these modules very quickly compared to Traffic Grab. I’ve made each module shorter and really, really tight. And my process for releasing this product has been different as well. I’ve actually been drip-feeding the modules into my Silver Circle membership, which is exactly right in line with today’s topic.
I’ve been releasing these modules as I create them even before I had them transcribed. I literally straight off the press load them up to Amazon Creative Player and stick it inside my community and then I get on to the next one and I send it off to the team for transcriptions. I wasn’t even planning on doing transcriptions until the first module went up and the member said, “Hey, the slides are great as PDF, but I’d really love a transcription.” So I went straight back to the team and said could you please transcribe this. And then the next video, we automatically made transcription part of the process. And you can imagine now about 7 or 8 videos down the track. We’ve got a well-oiled system created where I create the content, the team wraps it up and creates the rest of it, and it’s up and running and then when I do the last 2 modules, which is all I have to do now. I’ve got to do literally the last modules in the series and then I go and create the intro. So the intro is actually the last module I create. I’ll have a look at everything I’ve created—
TIM: That’s a good idea. Yep!
JAMES: Yeah. I’ll have a look at everything I’ve created and then look at the last one and then I’ll go and make the front one, mirror that so that it’s a great explanation of what’s about to come through the modules and then I’ll wrap it all up and make a membership from it.
TIM: So tell me, mate, because you mentioned occasionally—I didn’t realize it was that close to launching it—so what’s the pitch for this product? Just explain it to our listeners again what is it and why it’s good.
JAMES: Okay, well a little bit of background.
JAMES: Most people who try this Internet marketing thing fall down because they have no idea about running a business. And I think a lot of our listeners have picked up, particularly the last episode, they really got some of our business ideas that if you want to be successful online, you have to understand that that is a marketing channel and you actually have to have a business that in some way interacts with that marketing channel. So of all the people that I’ve trained and coached and consulted for and given advice in memberships, the thing that they’re missing is general business knowledge.
So I’ve gone and compiled all the modules that they need to glue that together, they need to understand about people. All the things we’ve talked about in our podcast: people, systems, strategy, cash flow, asset management; these things are just not well understood. So I’ve gone and tied them together into the shortest possible content pieces I can to explain that so that now someone can come to Internet marketing and learn how to run it like a business and really grow it. So you apply these things, you should start to double, triple, quadruple an existing business. If you don’t have a business, it’s a great foundation. So I like to think of Wealthification as being the process of creating a profitable business that funds the lifestyle you want.
TIM: So would it be a profitable Internet marketing business or could this apply to anyone starting?
JAMES: This actually, it really would apply to any business owner. And the bulk of the lessons are things that I’ve learned running a car dealership and a lawn mowing round and working at timber yard and debt collection. All these lessons through my life I’ve pulled together into this consolidated effort. So it applies to any business. Any business has to understand the marketing cycles.
TIM: And James, do you actually get then into you talk around Internet marketing within the product, but do you actually then go into the different Internet marketing business models or is that where it stops?
JAMES: I don’t talk specifically about Internet marketing. It just so happens that a huge slice of my audience is Internet marketing based and it’s the number one marketing channel for my current business or collection of business divisions. So it’s a relevant discussion, but the lessons apply to anything. I mean, I’ve got people in my Silver Circle group who have very little involvement with the online side of things. I actually have retail stores. And I can talk turkey to someone about a retail store just as much as I can about websites because I spent 20 years in the retail store environment with Mercedes Benz dealerships and BMW. That’s essentially what it is. It is a big retail store.
TIM: Mate, well that’s exciting! So when does that come out?
JAMES: Well I think it’ll be out around about now. Two modules, yeah!
TIM: By the time this show gets out, which is about a week away. Generally, the turnaround it will be out. So we might talk about over the course the next few episodes. Maybe we’ll just grab a little — give me time to absorb what’s in it and we might talk about different aspects of it, eh?
JAMES: Well I think the things that would be worth revisiting that we may have already discussed. The things like the product creation cycles, the launching or introduction of it to the market, price points, what happens to it after I launch it and how it takes off, so we can talk about those things for sure.
TIM: Love it! Love it! Now mate, we’ve got plenty of other stuff to cover. In fact, if people want to get that, by the way, how do they get it?
JAMES: Well they should go to FreedomOcean.com and have a look for our products page where we recommend products that we like.
TIM: Exactly right! Now, I want to just have a quick discussion, before we get stuck into our discussion around memberships, around Google+. I just noticed Google+ has been around long enough now that people are starting to maybe accept it and I’ve started using it of recent weeks, hesitantly. I say hesitantly because there’s already enough to do besides adding another channel to what it is we’re doing. Are you using Google+?
JAMES: Not really. I actually changed all of my Google from my Gmail account to a Google Apps account and I’ve kind of got two profiles now in my old one, which I started working on when it came out, and I got the new one, so I’ve just ignored the old one and I’ve ignored the new one. I really don’t think Google+ is that useful at all.
JAMES: Complete bomb. And the only people using it are probably Internet marketing savvy or blogger arty types at this point. So this is what my Google+ process is right now: it is simply a case of whenever I do a blog post, I’ll hit the +1 tag on my post and I’ll publish it to whomever. I don’t even log in to Google+, currently it’s useless, and that’s because my wife isn’t interested in it and my kids aren’t interested in it. And that for me is a good barometer. Because my kids are tech savvy, my wife is very Facebook savvy and digitally capable. She loves Evernote, so there’s a good indicator. My kids use Evernote for their homework, but they’re not using Google+, so I think, for me, I’m not interested at this point.
JAMES: But I do have a +1 symbol on all of my websites because that is important.
JAMES: Because Google have to pretend at least that there is a social measurement for SEO rather than just links, but the reality is links is still very important.
TIM: Yep. Do you think that’s—we’ve tested that before, but do you think is the balance sort of becoming less towards links and more towards social?
JAMES: Not from our experience with hundreds of SEO customers. We can manipulate the search results instantly as good as any other time.
TIM: How do you see, in terms of Google+, because I don’t even know how to—it’s a difficult beast to even sum up in a few words. Like it’s—
JAMES: Ah, I’d say Google’s aborted attempt to try and get some market share back from Facebook. There’s probably a better term for it.
TIM: (laughs) I don’t think that’s—
JAMES: It’s basically they’re just trying to—I mean they’re going to have problems with control, like they literally force it on to people. And here’s what I think the subscription rate they claim is more than likely just anyone who creates a Gmail account because it’s kind of bundled in a little bit like Explorer used to be forced on to Microsoft, like on to every PC. They kind of count that as an install. It doesn’t mean someone’s actually using it.
TIM: One part of it I like, or at least I can see it being variable, is the Circles, which is fundamental to it but it’s like the idea of having a Circle for family and having a Circle for a particular interest group, friends, business, all that. But then carving it up off and carving up so many Circles, it just requires management.
JAMES: But who’s using it other than people who you know that are into Internet marketing?
TIM: Yeah, yeah.
JAMES: Anybody? Any of your family or friends?
JAMES: I think it’s a dead duck.
TIM: Amazing, isn’t it? I mean, Google are good at search and they’re good at advertising. And those two are linked and I wonder where they should at some point learn their lesson. Because they’ve launched a few things: Buzz—
JAMES: They’re not good at those things. Buzz, Wave, and Google+. They suck at social, they’re good at apps. They make good apps, they make good search and pay-per-click, but now they’re starting to get under threat for Bing for search for having more relevant results apparently. So it will be interesting to see if they can stick to their knitting and focus on what’s important to them.
TIM: Well I tend to agree with you. I stand a bit corrected about Google+. I don’t get it yet. I’m going to give it time. I’m not sure it’s Google’s core business. Do you stand a bit corrected or are you just going to flatly say it’s a waste of time?
JAMES: Well, part of innovation is always being open to change and not having to be right. So if Google+ takes off next month, I still stand by my current comments as I see Google+ right now, knowing what I know, and I have to be open to the possibility that there’s things that I don’t know that I don’t know. So my point right now is I’m not putting any energy into Google+. I’m only making sure that the +1 metrics on my sites, and I do think that is important for search engine optimization, but Google+ is not on my list of—I haven’t even logged in to Pinterest, for example. I couldn’t care less about that stuff yet. I’ll wait until it goes past early adopter phase.
TIM: Well, I’m just going to say Pinterest because that seems to be all of a sudden, like literally, familiar in the last two weeks. I’m seeing that brand name appear throughout my Facebook and Twitter feeds.
JAMES: I’m seeing it everywhere!
JAMES: Apparently made up of all females. Apparently the demographic. And I’ll wait until all the buzz dies down and see if there is actually anything behind it.
TIM: An online pin board is what they call it.
JAMES: Great. I have still not even logged on. I’m just resisting. I’ll wait until I can’t afford to ignore it any longer. That’s my philosophy.
TIM: They’re not listening to you, mate. What about the online whiteboard? This is online pin board. I mean, really. They just need to be tuning in to the ocean to realize that it’s the whiteboard, not the pin board that is where the action is.
JAMES: Just for the benefit of listeners, I want to tell you that this year my business is just going unbelievably well, like super profitable, and it is because I’m sticking to the fundamentals that everyone else is ignoring. Just keeping it simple and having less stuff. All this stuff is noise and don’t feel like you have to be involved. Don’t feel like you have to know everything about it because all that matters is acquiring a customer and keeping the customer, that’s it! And most people are ignoring number two, keep the customer. That part there is actually the easiest thing to do and the most often ignored thing in business.
TIM: Well, I reckon that’s a pretty good segue, really, because what we’re going to talk about now is—well, we’ll have a bit of discussion about membership sites, aren’t we? But specifically how you retain a member within a membership site, yeah? But in particular, a forum.
JAMES: Okay. Well, there’s a lot of forums popping out lately.
TIM: Well, before we do that, well, forums. I’ve got some feedback because I’m thinking of starting a forum for a small business crowd, but it’s part of my other podcast, with my other lover, James. And someone was saying the other day, whose opinion I do respect. There’s a lot of forums out there that are ghost towns.
JAMES: True. Tumbleweeds.
JAMES: That’s, the death a forum is not being active.
TIM: So what makes a good forum?
JAMES: Delivering value beyond the amount that you charge, when it comes down to it. You’ve got to think people are selfish; this is the default position of most people. They’re not going to become a member of your forum because you need money. They’re going to become a member of the forum because they get something for being a member that is beyond the value that you charge. That’s the bottom line.
TIM: Marketing 101.
JAMES: Yeah. Well and it seems to be not that obvious to other people. Remember that most forums will probably be started because the owner sat around and thought I need money. I’m seeing right now there’s this Internet marketer who used to be something special, maybe 7 years ago, went on a 5-year bender of $2,000 launch affiliate promotions, lost all of his money and other niches outside the Internet space, and probably now needs money in his comeback, and the old one-trick pony rolls out to town and set up a forum. It won’t be around a year from now or two years, like the last three that this guy put out. Seems very popular. The idea sounds simple: I’ll get a bunch of members paying me a small amount and I’ll have this huge recurring thing. But it is work having a forum. The best analogy I can say is like having a child. You are responsible for this thing being up, you have to continually create value to have someone stay on board. It’s a perpetual machine. It’s not a one-time thing.
TIM: And daily. You even find yourself there daily, yeah?
JAMES: I’d say daily if you’ve—there are different types of memberships. Like depends on what the promise is. If it’s an interview of the month club, that type of subscription or membership probably doesn’t need you to turn up every day. If it’s a coaching type community, then you may need to respond to it every day. Because if you don’t moderate it or have moderation in place and if you don’t continually juice it up with new content, then it will fade and people get the recurring subscription and they say, “Why am I a member of this again?”
TIM: Where’s the value?
JAMES: Yeah. This is just a waste of money. So you really have to think carefully before you set one up. I’ve seen plenty of people set them up and fall flat on their face. And they forget how hard it is to fill in the first place. And unless you’ve got a good starting strategy, you are probably doomed. If your only reason to start it is because you think it’s a good idea and you’d like to make some money, that’s not enough. If you’ve got a bunch of people pestering you in your helpdesk or reply to your email saying, “Tim, when are you going to set up a forum so I can talk to you every day because I want more!” If that’s what you’ve got on your plate, then that’s a good sign.
TIM: Well both Freedom Ocean and Small Business, Big Marketing, which is my other podcast, we get a lot of email asking questions. They’re not saying set up a forum, but we’re getting a lot of email asking questions or those marketing-related questions, so Luke and I are going to send and add them to our list and ask the question, which is kind of funny because I’m not a big one for market research or like that Henry Ford saying that we spoke about last episode. You know, if he had asked people what they wanted, they would have said a faster horse. And I feel the same way.
JAMES: Just on that. It’s just a couple of things I always like to remind the listeners about the preference versus performance. You may well get people to say, “Ah yeah, I’d definitely be interested in that,” and then when you roll it out, nothing happens.
JAMES: Remember in the last episode, I was talking about the listener of ours we contacted me and they have built something quite substantial but didn’t pan out? They kind of suffered from that preference and performance thing. Would you like to know what I’d advise them to do?
JAMES: I said to send out a one question survey, an open ended survey, to the people who did not buy and just ask them why they didn’t go ahead. And also send out a one question survey to the people who did buy it and say why did you join the membership. And the results that came back were stunning. They were amazing because now you’ve given people an open box to write whatever they want and the ugly truth comes out and you can start to form clusters of reasons why or reasons they think, but inevitably you’ll be right with some of them, but you won’t have picked up some of the other ones. The reasons that come out can be quite astounding and you just never thought about it. Because when you ask a preference question, people aren’t really thinking about it because it’s too hard, because you’re not really saying I want you to dig into your wallet right now. You’re just saying well, if we did this, would you be interested. They’re just going to say yes, they’re not committing to much.
TIM: So you’re saying there, James, that you’re better off launching it and then sending out a note saying you’re ready to join, and then seeing what comes of that, and then to those that did join, ask why, and to those who didn’t, ask why instead of sending out a note before you even create this thing, asking would you join.
JAMES: I’m not saying that. I’m saying that if you happen to have made the mistake of launching it without asking anybody or testing the minimum viable product, that would be your rescue mission.
JAMES: That’s last case scenario. I’m saying if you’re going to launch it, you have to have a strong vehicle to launch it with. This is my main point. The way that you would test that is you would have a small one that you can scale. So going back to my example, when I learned that people wanted my original affiliate bonus as a stand-alone product, if you recall one of my original stories, people kept emailing me saying, “Can I buy this bonus because I already have the product that you’re making as a bonus for. I just want the bonus,” that was the market saying to me we want your product. We want to pay money for it. And I actually created my first membership around that product. It was a one-time purchase membership, but something I did really well was keep sending them updates. And this, mind you, is in 1997 and I still, as recently as yesterday, got email from a customer saying back in ’98 I bought your product and you used to send updates quite often. I’m just wondering if you still have updates because I have the latest version of the software. Now how strong a bond have we created there?
JAMES: And I instantly emailed the customer back and he was delighted to hear from me and I gave him an update, told him what’s happening with relation to that product and what I now prefer, etc. So that’s the sort of bond you can create. But what I’m saying to you is if you go back to your other podcast—which is an excellent podcast, by the way, and I listen to it every single episode—
TIM: Very kind.
JAMES: You need to think are people banging your door down saying we want a membership and cast your mind back to the last time you had a membership and what happened at that time that would be different this time.
TIM: Yep! Yep! Well, the last time we had a membership was the slow release of a whole variety of marketing information for the small business owner. And this time—and it didn’t allow people to network and to share idea amongst each other, whereas the forum that I’ve got in mind this time does.
JAMES: Right. So you’ve actually done one of the steps I’ve mentioned.
JAMES: You’ve gone and identified why people left.
JAMES: They’re the most valuable asset you own. It’s the people who already used to be a customer and are no longer a customer anymore.
JAMES: Aside from the one that still is a customer. Because they’ll tell you why they were a customer and why they weren’t a customer.
TIM: So tell me with the setting up of the forum, our intention is to, if we do populate it with a whole lot of good quality information that we already have that we may have already been selling individually but actually put in to the forum, how do you go about getting—because it’s the chicken or the egg stuff. How do you go about populating it with people? Because now you’re saying—
JAMES: I’m saying unless you get at least 50 or 60 or 100 people in there, it’s going to be a flop.
TIM: Yeah, I know. That’s right. When I say how do I populate it with people, I don’t mean that. That’s why I do marketing. It’s to drive people to it. But in the first instance that you actually got to have, what is it? I don’t know what the number is. 10 or 20 people, but what’s the terminology that you grandfather into the program for free in return for them helping to create content, ask questions, answer questions, yeah?
JAMES: Well, when you say yeah, that’s one strategy, but I think you’re missing my subtlety here. If you want this thing to work, you should devise a way to have 50 people arrive all at once, otherwise it’s going to flop. And however you do that, it’s up to you. You could have a sale, a launch, which is pretty common. In the case of my most successful forum, the first time around, the first time I really got off the ground was bringing in 7 people, I think it was, all at once. And I gave them a credit period and had to work my tail off to make sure a good portion of them stuck. And when we say stuck, it’s not meant to be a demeaning term, but that’s actually the marketing reference. The stick factor, the stickiness. So you want to try and make sure that after the trial period expires that they stick, and you need enough people to stick that it gets traction and survives. So that’s what happened the first time. The second time I created a forum, I actually again went back to an already existing customer base, created a new format and incentivized a reduced founding rates. Another thing was my Silver Circle community and that’s been incredibly successful under the latest iteration of that, so this isn’t the founding version but the current version where I switched from base camp across to combined forum. I’ve just reached 3 months with that. And from 32 members, guess how many members stayed 3 months?
TIM: I’ll guess 32.
JAMES: Yeah. So that is a testimony to the power of getting the formula just right. And this is not a low price point community either. That’s pretty much a $999 per month community. So it is possible to create a good price point community for you and for the customer that has a high retention factor. And now I’m just about to write my third significant community, which is the Fast Web Formula 1, and I’m doing what you suggested before. I’m putting in my products. But let’s put this in context. I’m actually taking the course from 7 of my live events. So it’s Fast Web Formula 1, 2, and 3 plus I’m putting in there Underground Profit System and Business InternetFormula, plus I’m putting in TrafficGrab and I’ll be adding extra courses. So they’ll end up getting about 7 different tracks in time. So it’s a substantial amount of content. But here’s the thing: to run each of those events were big exercises. They were six figure events there were people paying thousands or a thousand dollars for a ticket price. I had to go and speak on platforms all around Australia, Dubai, the UK, to fill these events in the first place and then turn them into recording. So I’m sort of into a mature phase with this, but I do have a customer base of hundreds of people who have already given me hundreds of thousands of dollars, and I’ll be going to that list and inviting them to come to this community and to see that if you’d like to start the community. So I’ve got some momentum. If I didn’t have that, I would be very concerned about starting a new community right now, just off the back of traditional marketing, be very hard to get traction.
TIM: Interesting. Interesting. So tell me, once you’ve got them, mate, retaining them is the challenge. Clearly having that amount of content, that amount of quality content’s a good start. But what—
JAMES: It’s not necessary, though, because you can have too much content. My trick will be to manage that amount of content without overwhelming someone. So I have to create tracks inside the community to help people find the things they need. Because I mean it would eventually take them days just to even watch the content. It would actually take them days to even download the content, let alone watch it. So it’s not about having the most content. The first forum that I had, there was very little stuff. The same with Silver Circle, I started with like 3 posts, that was it. And there are other factors. What you might want to do is combine a few different elements, so it could be partly forum, could be partly webinars, could be partly individual coaching benefits, there might be tools or resources that are only available in your community. So I do that with my new Fast Web Formula community. I’ve got a WordPress web building tool that allows people to build a website in just a minute. I’ve got all of the courses in one place for the first time ever. And I answer questions every single day. That’s partly my commitment to make that thing work, but no one else can offer that. No one else can be me and answer questions everyday as me. And that is a true benefit for my customers. If they’re interested in learning how to build a seven-figure business predominantly using online marketing, then that is definitely a good value place to be. So try and find what it is that is special about your thing that people would miss if they don’t have it. And that term is called a pain of disconnect.
TIM: Yep! Yep, nice! And you mentioned webinars before, do you bring the community together every now and then for a live webinar?
JAMES: I do. And in Silver Circle, I do it weekly. In my current other community, I do it once a month. And in Fast Web Formula, I’ll do it at least once a month but I’ll probably have also some local meet ups and try and attend in different states. So I’ll literally fly to Melbourne or Queensland and catch up with people every month or two because I want to create that personal touch and again, it’s very hard for people to compete with me unless they have enough free time or capital to do that, they’re not going to be able to sustain that.
TIM: What’s the format of the webinars, mate? Is it a question and answer or do you identify topic that everyone seems to be asking about? What do you do?
JAMES: Well definitely it’s consumer-led, so we see what people need. Well I analyze what people are continually asking and I’d zoom in on that topic and I’ll answer that. So this is helping them consume your material, is you create the material that is of most interest to them. I know this is perfectly sensible, but what a lot of other people do wrong is they just go for that pitch-fest thing and they bring in experts and pitch every month to their already paying customers. And that might work for a while but you burn out your members, so we don’t do that. We just create actual content now. So every week for Silver Circle on the calls, I do just a pure reaction call. I ask them what their challenge is and I solve it on the spot, and again that’s a special skill that not everyone can do, and I also ask ideas and things that are going well for their business that they can share.
So it’s the Master Mind format. For Fast Web Formula, they’ll be Q&A ones where people can ask anything they want and have an answer on the spot. And then there’ll be topic-themed ones. So the latest webinar that I ran was actually pre-delivering one of the Wealthification modules on strategy because that seems to be a weak point, but also take note of a special marketing technique there called cross-promotion. That’s one of my release strategies, is to make people in my sales funnel aware of an upcoming product by giving them an advanced preview.
JAMES: So it’s good value for them and it’s a good value for me.
TIM: Within Forbes, do you see people whilst you’re going in and responding to questions, over time do you start to see the members also answering each other’s questions?
JAMES: Oh definitely! If you get the right culture created, then you have user-generated content. And that is the stickiness, is people actually bond. And the thing that’s probably surprised me the most is that occasionally someone will leave the community and a lot of the time we see them come back. They come back through support and they say could I please have a link to rejoin the membership, and they come back. So they obviously missed and they couldn’t find what they’re looking for anywhere else. So I even get people say I started with you, I got side-tracked and went off with all different people, which was the biggest mistake ever. I got ripped off, blindsided, manipulated, cheated, and I now realize that you are actually the real deal in the beginning and I should never have left in the first place. But maybe sometimes people just have to go and find out for themselves. But it’s good that we have created a community. Now the first one I’ve actually been running for over three years, so I’ve been very consistent with my daily attendance. So I’ve logged 8 or 9 thousand posts in that first one. That’s not easy money, but it’s creating value on a sustained basis and you need to be consistent and it’s not a flash in the pan, one-time money grab. It is a business that grows like a snowball and you can grow it big and strong. But you have to keep adding to it, it’s just like fuel for a rocket ship, especially when taking off in the beginning. You’re going to need both boosters burning hard to get to that thing to move away from Earth’s gravity. Finally when you’re in space, you still have to throttle on a bit to keep momentum.
TIM: Somewhat like George Jetson. Tell me—
JAMES: Maybe. It’s probably the Internet equivalent, isn’t it?
TIM: Yeah, yeah, absolutely it is! Absolutely it is! So clearly a lot of work. Clearly can be rewarding. Tell me, pricing forums or pricing generally—we need to do a show on pricing, James—but the idea of pricing a forum to attract those early adopters. Do you price it a point that is relatively low to where you intended to finish the price end up finishing? And do you allow those people to have that price for life?
JAMES: Yes and yes.
TIM: Yeah. Okay. So low entry—
JAMES: That’s one thing going to your favorite. It really does help stick. If the idea is in the mind of the customer, if they were to leave and come back, there would be a penalty. That is often enough to let someone stick around long enough to get the value from it or to help them consume more to actually justify using it. If you can show people how to use your community and get the best value from it, you’re not only helping yourself, but you’re actually helping the customer, which I hope is the original reason that you decided to set up a community in the first place, which again tends to be lost by the majority of the marketers. The whole point of setting up a community is to get the power of a centralized ideas and resource that can be leveraged for people. And ideally they’ll be accessing you and look for less than it would cost an individually. That’s supposed to be the benefit for them.
TIM: Well, for a lot less. And tell me, one of the things I’ve noticed you’ve done recently then with a new forum, you’re going to launch, is you are stacking it with product that you used to sell individually, which makes sense to me. But then what does that do? Is that your strategy for selling product going in to the future by simply making it a value add in the forum? So is forum the primary goal or are you going to have product that you buy individually as well?
JAMES: Well originally I had these stand-alone products and this new community, I guess, is what I should have had in my own product line up. I made a strategic error and only through analysis have I figured it out.
TIM: You heard it first, listeners! Just say that again.
JAMES: Yep. I was just saying—can you still hear me Tim?
JAMES: The microphone was cutting out.
TIM: No, no! It was loud and clear, mate!
JAMES: Yeah! No, okay. So you know I did what I tell other people to do in my business, which by the way is the main reason that I still run Silver Circle, even though I don’t do individual consulting anymore and even though someone would happily pay me $10,000 a month for me to help them in the business. I’m not interested because I’m not learning enough with one customer. But with 30 customers, I can learn a lot about business just because I’m exposed to it every week. So side note, I’m here telling these 32 people every single week, pull out your numbers, have a good hard look at it and see what it tells you. And I realized that I had created a situation for myself that was not optimal.
So I thought the best thing to do to move people from my single products is to move them into a community that I have 100 percent ownership of, which is the most important point of all here, and something that you’ll learn about. Partnerships, they might go well but you end up with a percentage of it. So I’ve got all these front-end products and I need to hook them up to my 100 percent owned membership. And the easiest way to do that is to just put them all in there to start with and then go and create fresh front-end products. I have a lot of front-end to my business. I’ve got podcasts, multiple podcasts, I’ve got multiple blogs, I’ve got about 10 YouTube channels all feeding my system. And plus I’ve got affiliates and social media and press releases.
So there’s so many things that can drive the leads into the business that it makes sense to me to put most of my effort into the middle part which has the recurring system. So of course that’s one of the most important steps we can do is to look for recurring components for your products and services. And a good slice of my business is the recurring product or service, with all my services have the ability to either be a one-time with a by-product or be a recurring product in its own right.
TIM: Well the phone companies are pretty good at doing that as well, aren’t they?
JAMES: Yeah! It just makes sense! So when I release a new product, what I’ll probably do is I will put a front-end product out there with an introductory path into the recurring, like literally give them the same value of the product as a coupon to join the community. And I’ll also load it into the community at no charge as part of my stick strategy. So the longer the people are there, the more products they’ll get exposed to.
TIM: Can we just go back to the question earlier about attracting that initial group of forum members? We talked about a low price strategy that they’d get for lifetime if they join early. But is there also the idea of bringing in people for free to just be in there and to start populating it with content asking questions and answering questions? Is that also part of the strategy?
JAMES: Well I’ve done that before and it’s okay, but I mean, again, I wouldn’t be obsessed about price. People aren’t necessarily going to value free—
TIM: No, I’m not being system price, but I’m interested in—
JAMES: Unless there’s something in it for them, if they’re experts, yes, because it’s in your favor.
JAMES: If they’re not experts, no, because they probably would buy access if you said a low price perhaps. So my community is occasionally I’ve brought in experts, I’ve given them no charge access to the community, I think I’ve even given you access to one of our communities. As an expert and the quid pro quo there is that you’ve got free access therefore saving a thousand dollars a year and ideally you would answer a couple of questions people have in a topic that you’re a specialist at, so they get value as a member and you get value as an expert, but also it will lead to people exploring and finding out more about your products and services. So everyone’s a winner.
TIM: Yep! Yep. But not so much being obsessed about price, but the idea of let’s say you go and launch a forum and for the first 50 people it’s going to be $20 and you’re going to have the $20 a month for life. But once each of those 50 people get there, there’s nothing there—well, besides content, by the way—
JAMES: There at the same time.
TIM: Well, right, okay.
JAMES: You need a fire starter. It’s like starting a raging bush fire. You’re going to have to start the first little twigs in the magnifying glass, you know?
TIM: Yep, yep.
JAMES: So you want to get some petrol and tip it on this thing early. So what you can do is start them all as close to the same time as possible and ideally have some sort of thread starter that is igniting the fire. It’s like, “Okay, introduce yourself.” That’s a nice one.
TIM: Yeah, yeah.
JAMES: Because you get your commitment and consistency elements there and people, when they go to these communities, they tend to lurk and sit back and they’re scared of getting in. It’s like going to a new dinner party where you don’t know anybody. So you’ve got to try and get them involved. As soon as they’re involved, they’re away! They love it! And they’d miss it if they weren’t a member anymore and that’s what happens. And when you get a more mature environment, the people who are established will actually be very welcoming to new members. They’ll come in and the new members will say, “Hi, it’s Fred from Perth here,” and everyone will go, “Hi Fred! Welcome! You’re in the right place!” If you get 9 or 10 of those, they start to feel like okay, this is a good place.
TIM: Yep. Yep. We love those voluntary moderators.
JAMES: Well I do! I mean, I don’t have any paid moderators in any of my—because I’ve seen the paid moderator model like the StomperNet faculty and that business model sucked. Basically this doesn’t work for them because they didn’t get enough members staying to pay for the wages, from what I can tell. And that is the high stakes game. If you want to set up a membership on a more organic basis wherein less forced, then have a reasonable membership rate, have people who are really deeply committed and passionate about the members involved in it and really match the targeted traffic source and know who your customer is.
I know who my perfect customer is for my memberships and I work really tightly to those criteria. So the first community that I had was a $97 price point. It started at $67, by the way, but it went to $97 to grandfather the first members in. And we deliberately didn’t want a free forum and I did not want the $20 a month customer because as the old car saying goes, “The less gross the more ghost.” The less people pay, the more they’re a pain in the ass they tend to be. And so price itself can actually be a quality controller.
TIM: Yeah. Yeah.
JAMES: And to tell you, the caliber of people I get a thousand dollars a month in Silver Circle is exceptional and they are unbelievably awesome people who are motivated and have huge integrity and share really, really good business tips with each other and they’re just so passionate, it’s heartwarming and it’s a pleasure to be involved with these people. So just the mere fact that we’ve really been quite specific about who can come in and participate, it’s quite a filter to get into an environment like that and that is because you have to protect the members who are already there. And I actually haven’t even opened that out for 3 months, I’ve not let a single person in because I want to preserve what’s there, and that’s the key. And when I do open it up, which is actually this week, it will open for about 3 minutes and it’s on the same day. It’ll probably be closed, I only need 3 or 4 people, maybe 5 at the most, and then we close it again and I won’t open up for another 3 months. So when you can create that sort of community, it’s well worthwhile. So here’s the other flipside. If you price it too low, you’ll look at it and go this sucks for all the amount of effort for this little reward, I’m not interested anymore. And so now you stop creating new content, stop giving it attention, 3 or 4 months later everyone leaves, tumbleweeds comes through.
TIM: Yeah. Balancing act, huh?
JAMES: And I have never closed a community because I’ve been good at keeping them open.
TIM: Brilliant, mate! Well, that is a pretty good round of view of membership, really. I’ll let you know if I do it.
JAMES: Only do it. Can you summarize for our listeners what you’ve learned today because this is absolutely critical.
TIM: Sorry. You want me to summarize?
JAMES: Yeah. I want you to summarize. I know the answer I want to see if you know it. Come on, have you been taking notes?
TIM: No I haven’t been taking notes. I’ve been listening. I’ve been listening intently and—
JAMES: What are your key points? What’s the most shocking thing?
TIM: I think for me, looking at opening a forum, looking at starting a forum, is getting the traction. But the point you make about pricing and pricing it too low and then you go, then you’re in there every day, you’re providing value and content and answering stuff and you’re getting paid nothing to do it, and on the flip side, pricing it too high and that being a detractor for anyone joining. I think that’s a real balancing act. What I love about it and you mentioned that word community, the whole reason, I just love the idea. Because one of the things I see in both the podcasts that I do is the amount of interaction Luke and I have and you and I have, one on one with our listeners, right? We get lots of emails that our listeners don’t see and we respond to them. But I would love to see that brought together in a forum atmosphere where people are seeing the questions, are seeing the answers, and sharing the love. I love the idea of that.
JAMES: Yeah. And so you just got to keep in mind that there needs to be enough market to spread across all of these forums. A lot of the members who send us notes, private emails, I noticed are already in my community, so that’s definitely been a positive. But remember, for me, Freedom Ocean is traffic, not a product, because Freedom Ocean leads to products. And the goal is to have a well-rounded product lineup and that central membership hub is a great thing to build, but make sure you’re very, very clear on who is your target customer, make sure there is demand that you can meet and satisfy and reach and that they will actually stomp up and that you can create some kind of reason or event or bundle that gets quite a few people in there at once. That’s critical to jumpstart a forum. And I’m assuming you don’t want to go down the path of creating these fake profiles and having dummy conversations with each other.
TIM: Ah, no. No.
JAMES: That’s like most people’s basic approach to it, which is I think lacks integrity.
TIM: Yep. Yep. I like that idea of loading the fire. Loading the fire.
JAMES: Yeah. I think you could actually create an event around it, but the best way to do it is to back end a live event or an already existing customer list with a compelling trial offer and give them a credit period. A credit period with billing cutting in is probably more effective than a lifetime free or lifetime very low membership.
TIM: I like the idea, just as you’re talking, I like the idea. I don’t have a live event coming up for my other show, but could quite easily put on a webinar and I’ve been meaning to do that for a while now.
JAMES: If you do the live event for your other show, that’s the real indicator of how many people you actually have. As you know, when I run a live event, I can easily get a couple of hundred people in a room who will pay to be there from the customer list that I’m drawing. And based on that, then I know that I could get a couple of hundred people interested in joining a community. And I think the numbers will be very similar as a starting point. So however many people you can get to a live event is probably a good indicator of who would pay you each month to belong to a paid community.
TIM: Hey, good discussion, mate! And speaking, I’m going to digress here, but you’d be interested in the next guest that I have coming up on Small Business, Big Marketing. I won’t say too much, but this guy in December just gone on so we were in the—
JAMES: I saw the sign for the 500-person event. Just saw that.
TIM: (laughs) how did you know that?
JAMES: I listen to the podcast!
TIM: Oh yeah. I telegraphed it in the last show, didn’t I?
JAMES: Yeah. But thanks for the quiet insider tip. I feel special!
TIM: Oh stop it! Stop it! But amazing! I mean, literally in a month you got 500 bums on seats for an event in the Australian summer, where every professional event organizer said you’re mad. So—
JAMES: You know, most professional event organizers are running a very outdated business model. It’s not that hard to fill an event if you have a good message to the market match. Was it a paid or a free event?
TIM: It’s paid.
JAMES: There you go! So you hear people say, “Oh, the market is down,” or whatever, but I can tell you there’s plenty going on in the right spots.
TIM: Always. Always. Hey mate, it’s been a pleasure as always. We’re going to wrap it up because I think we’re into sort of the 45-minute mark or thereabout. So thanks for sharing all that, James. I know there’s a few of our listeners on the Freedom Ocean that already have forums, so they’re going to benefit greatly and there’s probably a few out there still tossing around what Internet marketing business model to adopt. And whilst forums that I don’t think are for the beginner, it’s certainly a good one. So thanks, mate! And you’ll be the first to know when I launch the other one, my forum.
JAMES: Thank you very much!
TIM: Pleasure! Mate, we’ll see you out in the ocean.
TIM: See you!