The Online Marketing Show

Continuity or recurring revenue is a great way to add predictable monthly income to your bottom line. In this episode Joseph Bushnell talks to the king of continuity Ryan Lee with membership sites, coaching programs, newsletters and other recurring revenue models.

Ryan Lee is an internet entrepreneur and the creator of some of internet marketing's most famous training programs and live events.

One of his hugely popular live events is... The Continuity Summit

In this interview Ryan shows how you can add continuity income (AKA recurring revenue) to your business model so that once you make a sale, you then get paid over and over again, with no extra work involved.

You can listen to the interview or you can read the entire transcript. Enjoy...

Joey Bushnell: Hey everyone, this is Joey Bushnell, today I have with me one of the worlds top online marketers, his name is Ryan Lee. Ryan thank you so much for being on the call with me today.

Ryan Lee: Joey it is my pleasure and I’m excited.

Joey Bushnell: Thank you! Ryan how did you get into online marketing?

Ryan Lee: That is a great question and the answer is I don’t really remember! It was back in 1998/1999 and at that time I was working in a children’s rehab hospital doing all the recreational therapy, aquatics and fitness programs. I had a personal training business on the side.

The internet was starting to become popular and I thought it would be good if I had a website to promote my personal training business. So I hired my 12 year old neighbor Jonathan and paid him $20-$25 and he helped me put my page up. I was using front page 98 at the time. That was it, that’s how it got started.

I was living at home in my parents basement and I started the site with just a bunch of training articles. I would train a lot of young athletes, I worked with hockey players, figure skaters, baseball players and soccer players. It was just a place for me to put articles for myself and my friends who were trying to get to see coaches and that was the beginning, that’s where it all started.

Joey Bushnell: Brilliant! So Ryan, as an internet entrepreneur, I know that you cover a lot of different topics of online marketing. One of those is continuity, I know you have a very famous event "The Continuity Summit" which you hold every so often. I’d like the focus of the call to be on continuity, is that alright?

Ryan Lee: Joey it is my pleasure.

Joey Bushnell: Great, so my first question is... If someone hasn’t heard the term "continuity" before, what is continuity and why is it a good idea?

Ryan Lee: Continuity in layman's terms is recurring revenue. Some people say annuity income, reoccurring revenue. Essentially it’s just money that comes in every month.

Now traditionally in the marketing world we do monthly billing so it’s like a membership site that charges $10, $20 a month or your shopping cart that you pay $20-$30 a year for, or your phone bill is continuity, your cable bill, electrical bill, gym memberships and health clubs that’s been really popular forever. For $10, $50 or $80 a month you can come to the gym as often as you want.

However continuity can be quarterly billing, every 6 months or yearly billing. There is a lot of ways you do could do continuity billing but that’s pretty much what it is. If you think about it, it really is the holy grail.

So Joey, name any topic, any niche or market anything, let’s see how nimble we can be on our feet?

Joey Bushnell: OK, Testosterone or how to increase your testosterone

Ryan Lee: Testosterone. So there’s two ways we can do it.

We can either do a physical product like a testosterone boosting supplement or we can do an information product teaching them how to naturally improve their testosterone.

You pick one, let’s see which way we are going to go with this.

Joey Bushnell: Let’s go with an info product.

Ryan Lee: So, 2 ways you can do it...

You can say... "I have this great system, I’m a personal trainer or a 60 year old male and I learned how to increase my own testosterone by doing this method".

You can either sell it as a one-time digital product. Let’s say it’s an eBook and you sell it for $20. You work really hard and follow all of the marketing strategies that I teach and all the people you interview teach, whether it’s facebook, pay-per-click ads, media buys or whatever and you sell 100 a month.

So month 1, you have $20 a sale X $100 sales, that's $2,000 gross. I’m not going to say net because I don’t know what you’d spend but let’s just use that number. It’s $2,000 you’ve made which is great. So you had a good month but now, come the first of the next month you’re back at zero and you have to repeat the process and work just as hard to get another 100 people. That is model 1 and that’s what a lot of people do.

However if you say, "I’m not going to create just one info product, I’m going to create the testosterone boosting inner circle. Where every month I’m going to interview a different expert about different ways to increase your testosterone". Maybe this months it’s a nutritionist and next month it’s a personal trainer and the month after that it’s a doctor. There’s different content and now you’re talking $20 a month.

If you’ve got those same 100 people, you got $2,000 for the first month but for the next month you’re still at $2,000. Whereas with option A, you’re at zero, now you’re at $2,000.

Let’s say you work as hard again and you get another 100 people and you’re now at $4,000 for the month. You get $2,000 from your existing customers and another $2,000 from you’re new subscribers versus the other way, if you worked as hard you have $2,000.

So with the same amount of effort your income can rise exponentially.

I’m not even talking about retention and all the other things that can happen along the way but that is really a general idea of the income potential. I personally won't touch a business now unless there is some kind of recurring revenue on the back end.

Here’s the thing too, psychologically it’s a shift, so if you are doing a content based continuity like a membership site, you get away from “I got to get more customers, more, more!” and you shift to “OK, now I have 200 people, I’m going to take care of them. Now I’m going to deliver incredible content and connect with them.” It’s a subtle shift but it’s so much better to do business that way, at least I feel it is.

I’m a huge fan and plus there is a saleability factor. Down the road if you want to exit, it’s a lot easier to sell a business saying “We have $30,000 in recurring revenue each month, are you interested in buying the business?” versus “Well, we had a good month last month but now we are back at zero.”

Joey Bushnell: So specifically Ryan, for online marketers, what types of products and services lend themselves well to the continuity model? We’ve already mentioned membership sites, are there any other options where we can get recurring income from it?

Ryan Lee: Absolutely, well there is the other side, if we want Testosterone the supplements, so there is physical products delivered every month. Now there are a couple of ways to do that.

Let’s say it’s a supplement, and again using testosterone, every month they are going to get a new supply and they will never run out and they don’t have to worry about going out to the store. Every month they are going to receive this same thing. Supplements lend themselves well to that. Or there is a popular site now called the dollar shave club so every month they are getting the same thing, they are getting more razors, so that is one model.

Another model which is becoming really popular now is more like a surprise when you don’t know what you’re going to get. Birch box is a great example of this. They have about 200,000 people paying $10 a month. Every month they get samples of health and beauty supplies. So there could be a sample of lipstick, moisturizing lotion and eyeliner. So it’s like a little surprise every month.

These used to be popular, the book of the month club, my friend signed me up for a beer of the month club or the wine of the month club. Then there is other physical stuff where it’s similar like DVD of the month. So you don’t know what the content is going to be but it’s the same format. Every month they get a new DVD with new trainings, or maybe it’s an audio CD or in a print newsletter. Those are more continuity models to look at.

There is software, the App on tap type thing, where it’s a service. Maybe it’s a web based shopping cart solution or an email auto responder solution. Or a software that let’s you do keyword search to see what other people have been using. There are so many opportunities in the software space. I’ve had one for over 10 years that helps personal trainers to create online fitness programs. Those tend to be the best.

Then like I said, there is a membership site and you take it to the next level, it’s higher priced coaching. I have a program now where it’s $5,000 and people have access to me through a private Facebook group. That is how it is delivered through Facebook.

There are lots and lots of options to create recurring revenue but I do believe that every business should have some kind of continuity program.

Joey Bushnell: Sure, I think you may have already answered my next question Ryan, I was going to ask what is the best way to offer high ticket continuity is. Would you say that the coaching and mastermind model is a good option for that?

Ryan Lee: Bigger ticket in general doesn’t necessarily mean more content. That is where people make a mistake. They assume “I’m going to charge them $200 a month so I have to give them 100 articles”. Which, it’s actually the opposite. Often, the more you charge the less you give.

I don’t mean less in terms of quality, you want to give higher quality but they usually pay for access to a person, coach, guru, an expert or something. So the higher up you go it tends to be less content but higher quality and better access to whoever this person is, that is the figure head of the company.

Joey Bushnell: My next question was around membership sites. Do you have any good tips for running a really good membership site, that is ideally, making us a lot of money?

Ryan Lee: Here is the overall thing, it’ a question you are going to have to ask yourself at the beginning and it’s a bit of a mind shift. This is what a lot of people do but instead of saying “What is the least amount of work and effort I have to do to create a $97 a month program?” That is the idea they come in with “How do I put it on auto pilot, how do I set it and forget it?”, “What is the least amount I have to give to charge $97?”

That’s one way but here’s what I recommend instead of saying that, you say to yourself “You know what I have this program that is $97 a month, how can I deliver so much value that my members feel like it’s worth $,1,000 a month and they become my biggest marketing source because they can’t wait to tell everybody.” That is the shift.

Now when you start thinking like that in terms of the latter, in terms of how much more can I deliver to them in terms of value, connecting and showing how much I care about them and their success. That is when people have real businesses not just a product at $17 a month and then it fades away after 3 months and then they have to start something new.

Everything has to be run through that filter so whether it’s going to be a surprise bonus webinar, an in person meet up, a free coaching call for everyone, or you just got a discount on this software so they only have to pay this much for it. Things such as that which people don’t expect that you are going above and beyond.

It’s the old saying, people don’t care how much you yell until they know how much you care. That is the key and if you truly treat them like your family and friends and show them that we are here for you, they’re not just there for you to fill your wallets with more cash, they’re going to be there in the long run. I’ve had people who have been paying members with me for over a decade because they know I care about them.

That is really the key, it doesn’t have to do with technology and upsells and look at this cool  plugin. All of those bells and whistles are cool and they are great to add on but unless you have that base and you are building that real solid business, everything else doesn’t matter. Everyone gets it wrong and they focus on the bells and whistles, a cool button and all that crap that doesn’t matter unless you get the core right. That has been my mission to show that “Hey idiots, you’re focusing on the wrong stuff!”

When I first started in the fitness industry all my trainers who were the most successful now in the industry they get it. The ones who struggle are the ones who don’t get it.

Joey Bushnell: In terms of front end offers for things like membership sites and software Ryan, I’ve seen different ways to get people in the door.

Some people offer a free trial, some offer a dollar trial so it’s low price but they have given their credit card details. Some just offer the full price from the beginning.

Do you test different things or do you find that one of these approaches works better?

Ryan Lee: Yeah I’m always trying different things. It depends on your goal.

In general what I’ve seen across different markets is that if you are offering a trial, let’s say a dollar trial for 14 days which seems to work pretty well, again depending on how much content you have and what the model is you are going to get more people in to try. You are going to get some tyre-kickers but at the end of the day you’re going to get more people in. It’s always good if you can offer some type of trial.

What I’ve been doing lately is offering one year memberships to show that people come in and they’re committed as opposed to just monthly.

Those are two things but what I’ve done which doesn’t work quite as well is charge a sign up fee and then a monthly fee. Those tend not to work as well people don’t ant to have to pay more upfront, they want to try something and if they don’t like it after a couple of weeks they are out and they only lost a buck so it’s not a big deal.

Joey Bushnell: What’s your opinion of forced continuity? Is that fair game or slightly unethical in your book, Ryan?

Ryan Lee: It used to be the big thing then what happened was people became really sleazy with it. This was maybe 2 or 3 years ago, all the credit card processors started black listing all the marketers because they would sneak it in.

They would say “You’re going to get this free CD and your bonus number 1 is this info product, bonus number 2 is a coaching call and then in really small letters, bonus number 3 you’re going to get a free membership to my newsletter and then in small print, after the first month it’s only $97” and the people don’t even know that is the only time they mention it so people don’t know they are going in for recurring billing. That is bad.

If you are completely upfront about it and say “You can try this free CD because I’m offering it to you as an ethical bribe for you to try my $97 a month program.” If you are completely upfront about it then it’s fine. But you have to say it 3 or 4 times, put it near the checkout button, on the email and everything.

But I don’t like the term forced. If you think about it words mean a lot, so if someone forces you to do something how do you feel about that transaction? Not very good. “Join this program, Joey is going to force you in to pay” who the heck wants to do business with that guy?

I’ve done optional, I had one big launch where you were able to do a dollar to download this whole program and it would give you for $97 my newsletter however on the checkout you were able to remove that $97 a month. I had about 20% of the people just do the dollar for all the videos and then remove the $97 a month, which was fine because they were going to cancel anyway. Less customer support and less headaches. If you are going to go that route be completely upfront or at least make it an option.

Joey Bushnell: So how do we retain people for as long as possible?

Ryan Lee: That is really the big question. How do you? Because if you don’t have good retention, you don’t have a continuity program. If everyone stays for one month you basically just did a one-time deal, it’s not recurring revenue.

What I found that works well is curiosity, peaking their curiosity and teasing. The two most powerful words in recurring revenue and continuity income are “Coming Soon”. Telling them what is coming.

Using that testosterone example if someone is in a Testosterone boosting club and you say “Coming next week or next month we are going to do an interview with a doctor whose patient gained 17lbs of muscle in 3 days by eating this natural supplement. Stay tuned that is coming next month.” If you were thinking of canceling now you’re thinking "I’ve got to stay for another month I have to see what this is".

All the other things like using points, values and contests, all of that stuff helps a little bit. But I like to focus on the big stuff which is curiosity and getting them excited by what’s coming next.

Joey Bushnell: So in a membership site Ryan, do you like the model where people put all the information in there and anyone can access it at anytime or do you prefer the route of drip feeding the content with a set timer and whenever people enter no matter when they enter, it’s drip fed. Do you know what’s the best option there?

Ryan Lee: There are two things you are talking about because it depends if you are talking about evergreen content or content that is always updated. So when I say evergreen content and then is it a fixed term, so give me another topic Joey.

Joey Bushnell: OK let's go with what we know, let’s go with marketing funnels.

Ryan Lee: Let’s say it’s "how to get more traffic to your website" and let’s say it’s an evergreen topic that has an end date. So it’s a six month program and every week the are going to get a different video lesson. It’s $29.95 a month for 6 months so the first day they come in everyone is getting that first video I don’t care if you come today or 2 months from now everyone is getting video 1. So that is ever green and that is fixed content and that’s fine.

If you give it to them all at once they might get overwhelmed, however if it’s new stuff that’s coming on, let’s go a little bit deeper and say it’s all about "social media traffic". You know how it is, everyday something is changing. Everyday there’s a new rule on Facebook, Youtube or LinkedIn so it's always changing. You can’t have that same content, it’s got to always change.

So if someone comes in are they going to have access to everything that you’ve done in the past and now? Or are you just going to give them all of the latest stuff?

There are some people on one side who say just give them the new stuff and others who say give them everything. I still go back and forth. I see the value in giving them everything.

I like to put myself in my members shoes so let me ask you Joey, if there were 2 memberships about social media traffic and they were both $29.95 a month. One of them says come in and you don’t only get access to the latest stuff but you’ll get access to every single thing we’ve done in the past, that is option A.

Option B is it’s $29.95 a month and you get this newsletter, this update and all the latest ones but you don’t have access to the archives. Same price which one are you going to take?

Joey Bushnell: I’d take the first one.

Ryan Lee: So that’s the big thing we all struggle with. There is what’s best for the members and the member experience and what would you want? Then there is the business sense if you give it to them all at once are they going to get overwhelmed. Is it going to lead to more cancellations because they have access to 50 hours of training video and you add a new one and they just can’t keep up so they cancel.

It depends on where you want to go with it. I still don’t know the answer. Personally I like to put myself in the shoes of the clients and give more and if it’s too much, it’s too much, but I try not to overwhelm them I try to make it simple to consume.

Joey Bushnell: For membership sites do you have a membership site software that you recommend?

Ryan Lee: I’ve used member gate for a long time. I’ve been using wishlist lately and I’ve literally just signed up with a new software program 2 days ago but I don’t want to mention it yet because I want to test it before I fully recommend it. But it looks really cool and I literally was on the phone last night with the tech person going through it and there’s some really cool things. But I don’t want to say it yet until I’m fully in and decide if it’s really good or crap. So stay tuned.

Joey Bushnell: I know what you're referring to Ryan I bought it as well and I’m hoping it's going to be as good as it looks as well! (Sidenote: I can't speak for Ryan but I was referring to OptimizePress 2)

My final question was how can we make money on the back end? Assuming someone has been a customer of ours for a set period of time how can we monetize them further? Upsell them perhaps, maybe get them into a different program, do you have any tips for that?

Ryan Lee: There really is no specific tips it’s making sure you are delivering on the first things they buy. If you’re into memberships or you have some type of program to buy you have to make sure it’s a great experience for them because if not I don’t care how good your sales process is you are not going to sell them again. It’s like fool me once shame on you, fool me twice shame on me.

You need to make sure, again without the risk of sounding repetitive, you’re now in it from the start. But with that being said, let’s assume you do and you are doing a good job, the beauty of that is you’ve already built trust and a relationship. It’s much easier to sell on the back end.

I did a video recently for selling an event, it was me sitting by the pool then 2 of my kids came into the middle of it during the video. They were playing ball and said “Oh Daddy what are you doing?” It almost doesn’t matter but I will say the big money will happen and the way you get to the next level is by creating more and more products and by being more prolific.

I’ve made the mistake in the past saying "I don’t want to offer too many products or feel like I’m always selling stuff" but if you are just giving them options by offering this program and that program then give people more chances to buy. They will buy what they want and they won’t buy what they don’t want and that’s fine. That was a little internal barrier I had to get over.

But the bottom line is create sales processes for the buyers that are honest and full of integrity. It could be as simple as you saying in a video “Hey it’s Joey, thanks for being one of my loyal members. It’s a great new program and it’s going to help you with this, this and this. If you are interested click the button below and if not that’s fine too". That’s it. You’ve already built trust, you've shown that you are here to help them and then the back end sales is easy but again be prolific and create a lot. That is my advice create a lot.

Joey Bushnell: Would you have a range of prices in there as well? Maybe someone comes in at low ticket, you deliver on that first thing. Then you try selling them to a medium ticket then a big ticket?

Ryan Lee: Yeah but it doesn’t have to be so linear, in other words I’ve had people come into my funnel at a free email, at $100 product, a $500 product and people come in at $2,000. They come to a $2,000 workshop and say this is the first time I’ve ever bought any of your products and it's a big investment right from the beginning.

That is why you have to be prolific and create a lot of different stuff because you just don’t know what is going to work. Something you might think of as a throw away program might fly off the shelves. Something you put 2 months into might just bomb. You can’t be afraid to fail, you have to put yourself out there.

Joey Bushnell: Brilliant, well thank you Ryan for taking time with me today and giving us some really great information. Hopefully everyone is really excited, if they have not tried it already to get some continuity going in their business. If they are already doing it then they have some tips to improve and make it better. Thank you so much for your time. Where can people find out more about you and get more of your great information?

Ryan Lee: The best way is probably my site Ryanlee.com, I have a free newsletter I put out, blog posts and content almost every day. Quality stuff I hope, I think a couple 100,000 people would agree!

Joey Bushnell: Great, I’ll put a link for everyone to go and check that out, Ryan thank you once again for taking this time out with me today.

Ryan Lee: My pleasure, thank you for having me.

Direct download: 20132911-TOMS-004-Ryan_Lee.mp3
Category:Continuity -- posted at: 1:28pm PDT

Sam Carpenter is the author of the book Work the System: The Simple Mechanics of Making More and Working Less which outlines his simple methodology of making your life and business run smoothly and efficiently by getting systems in place.

If you are feeling trapped or overwhelmed inside of your own business, listen to this interview because it will change your life.

It will help you to stop procrastinating and instead get things get done quicker and with ruthless efficiency

You set up the system...

Then you work less, you make more money, you spend time doing what you want to do, not what you have to do.

You can listen to the interview or you can read the full transcript below...

Joey Bushnell: Hi everyone, this is Joey Bushnell, today I have with me a fantastic guest. He is the author of the world famous book “Work the System” his name is Sam Carpenter. Sam, thank you so much for being with me today.

Sam Carpenter: Glad to be here Joey, thanks.

Joey Bushnell: Sam, what is your book “Work the System” all about?

Sam Carpenter: Well, it’s about taking a business that is chaotic and turning it into a calm, peaceful and profitable organism. It is an organism one way or the other, there are systems working and processes happening.

The question is... Are those processes and systems being managed?

This is for the small to mid-sized business owner and they can take the book and it’s actually a step beyond Michael Gerber’s book “The E-Myth” in that it shows you just what to do.  It’s not at all a copy of his book in the first instance but it does share the commonality of working on your business rather than in your business.

Any business owner without exception, unless they are crazy, would like their business to be independent of them so they can go on vacations, get sick and still be profitable and pretty much a money machine and a place you can go because you love to do, what you do and you love the people you work with, and it doesn’t demand that you be there 80 hours a week. So the book is about fixing that problem.

Joey Bushnell: How was it you came to write this book Sam? Where were you in your life, that prompted you that you had to write this book?

Sam Carpenter: I talk about it in the book, that my life history is one of chaos up to the age of 50 and I’m 63 now.

But at 50 I’d had this call center business. Just a regular nuts and bolts business where we take incoming emergency calls for doctors, funeral homes and half a dozen different vertical markets of business where you want a human being to answer the phone. We take the emergency call and pass them on to the appropriate emergency personnel for that particular business.

We have about 1,000 accounts and I have been running it since the age of 35, so for a decade and a half I have been running this business which is so error prone. Just here in the United States not to mention the UK and the rest of the world but here in the US we have about 2,000 competitors. Everyone of them is chaotic because every account is different, there is so much that can go wrong. It’s what I call a “Cauldron for chaos.”

At 15 years I was going to finally, absolutely, without question, miss a payroll. If I missed a payroll everyone would walk out. Despite myself, that business had then grown over that decade and a half about 6 times over. I think we were doing about $5,000 per month and we were up to $30,000-$35,000 a month. We had grown but it was killing me physically, financially. I was a single parent of 2 kids with just barely enough to survive. My physical health and mental health was going down hill and I was going to miss this payroll.

There is a chapter in my book called “Gun to the head enlightenment”, so I lay in bed one night and realized that I was going to absolutely lose the business and why don’t I just ask myself the question... "What did I do wrong in all this time?" I don't get an answer, I lay in bed awake I think, or sleeping, maybe half way in between and I got a vision of a table in front of me. All of the pieces of my business were laid out in front of me on top of the table.

There were two very important insights I got from that vision that night...

One was... The pieces were separate from each other, they were not connected. Even though I had this business called Centratel. Centratel is a collection of things that go on. These things that went on were separate from each other and they weren’t just objects in my dream, there were objects as processes.

What I realized that night was my business and my entire life, of course, we’re getting down to real mechanical reality, if my business is a certain way, probably my life is that way too. Every part of my life and business was not a big conglomeration of sights, sounds and events. But was actually a collection of independent systems and processes.

That was 13 years ago and that night I realized that my business was a collection of independent processes and the logical thing to do would be to pick the process out of the business that was the most problematic and fix it. Fix it with the documentation which came to me instantaneously, if I’m going to get them help me do things the right way, have them help me create the perfect way to do those things. I talk about this extensively in the book but what happened was, I went down to the office the next day and found a way to make the payroll.

Then we fixed the biggest problem first. Documented it, sorry, boring but true, on planet earth you have to document your processes if you ever want your business to grow and get out from being in the middle of it. Then we did the next process and the next then the next.

The key here was that I saw my business was not something that could be fixed by another loan, a consultant or the hand of God or I could take some magic pill that would get me to do everything right all of a sudden. What I needed to do was just take my business apart because mechanically that’s what it is, just a collection of parts. It’s a primary system that is a collection of sub-systems. Then take each sub-system apart, fix it and document it.

Most of our businesses are the same thing happening over and over again. What I call recurring systems and recurring processes. What we wanted was for every process to be executed perfectly or as close to perfect 100% of the time.

I asked myself that night, I can still feel my insecurity in this question... "What would happen if I could get all the pieces of my business to execute perfectly 100% of the time? Would I have a perfect business?" I honestly 13 years ago on that night didn’t know the answer to that question.

I’m here to tell you, if you have all the components of your business working perfectly and you have a direction, and that’s easy to establish if you have some goals, you will have a perfect business.

I was working 80-100 hours a week, now I work 2 hours a week. My gross and my net income is approximately 30 times what it use to be. So it's a great way to go and I highly recommend that everyone take a look at their lives and their business and see that they are truly a collection of separate processes.

Let me finish up by saying, when you see your business as a collection of separate processes, it get’s real easy to fix things if you are willing to fix the pieces one at a time. That is where I spend all of my time and the people we consult too. I have an international consulting operation, coaching, the book and an online product, it all goes back to being able to see the world as a collection of processes and then going after them one after the other. It’s not rocket science it’s just simple methodology that you do over and over again, and it works.

Joey Bushnell: Brilliant, we can see that it works Sam but for people who are small business owners like myself, what are the consequences of failing to get systems in place? What is likely to happen?

Sam Carpenter: What is absolutely likely to happen if you don’t get documents and systems in place, is you will never grow past a certain point. You can’t.

Now you’re an artist in a sense Joey, and I am too to a degree, and everyone reading this has a special talent that they do. But you’ve got to find a way to extricate yourself from the machinery of the every day world if you want to grow.

The way you do that, is work with your people, document things and train other people to do what you do. Now you need to do these interviews Joey and I have to do my writing and so forth but 99% of what everybody out there does, can be done by other people, even very creative things. So you’re going to limit your growth, you’re going to be in the middle of things all of the time, you’re going to go crazy, not have a personal life and ultimately you are not going to have much money because there’s a million other people out there doing the same things.

This is a bold thing to say but I’m confident that 9 out of 10 people reading this are in a little bit of chaos with what they do or a lot of chaos. 9 out of 10 small businesses are mismanaged in the sense that the owner is doing everything because they somehow think they have magical powers and they are the only one who can do it. They are not thinking about the processes.

Let me do one thing, if this was a video I would show this but I’ll try to illustrate it in everyone's head...

Imagine a flip chart as I’m talking and I’m going to write this on top of the flip chart. The number 1 on the left side with an arrow going over to the right to the number 2. Then an arrow going over to the number 3 and an arrow going over to the number 4. Then an equals sign on the right side and out of that the word “Result”. I’m only doing 4 steps but there could be 10,000 or only 2 steps. Usually there’s 10-50 steps in a typical business process.

Most people don’t realize the results over on the right hand side don’t have anything to do with their IQ, wonderful personality, their heroic willingness to work 80 hours a week, their smile, good looks or whatever. It has to do with the process.

That’s why people we know just aren’t that smart can have a lot of money and a lot of freedom. Or someone with a terrible personality has a lot of time, a lot of freedom and a lot of money. They are spending their time over in the 1-2-3-4 part working on the systems that equal the results.

Most people are over at the right hand side next to results. They are shuffling around the bad results of unmanaged systems, in other words the 1-2-3-4 part over on the left side of the equation.

So my insight that night and what I tell everybody no matter what forum I’m using, is you need to spend your time working the processes hence the title of the book. Work the System: The Simple Mechanics of Making More and Working Less. You need to spend your whole day over on the left side of the equation making the systems better and better.

If you do that, again there is a little bit of documentation at the beginning about direction, goals and how you make decisions and so forth, as long as you do that then you spend all of your time over working on the systems, the results will take care of themselves. Does that make sense?

Joey Bushnell: Makes absolute sense, I guess what you are saying there is there’s no respecter of persons here. Doesn’t matter if you’re clever with a lovely personality, basically if you are not getting these systems in place you're going to have a really hard time.

Sam Carpenter: If you don’t spend your time working the systems you’re never going to get the results you want. I’ll tell you what, Richard Branson, Oprah Winfrey some of the big names everyone knows out there, that is what they are good at. They naturally know how to work their systems. They have other people do the documentation and so forth but they are finger pointers and implementers and they see precisely that they need to work on the processes and the systems of their lives to get the results they want. Then the results just come spontaneously.

I’m not a big one to measure "we want to do these many dollars next year in sales". I hear that all the time. You need a plan for how much you are going to make and where you’re going to be. That is nonsense. What you have to do is find the way to spend your time working on the processes, and those numbers will be there whatever they are. I’m not a big balance sheet kind of guy, I’m an income statement kind of a guy. As far as financials go I spend very little time looking at numbers. All I do is work on the processes.

At my call center here in Oregon USA, my processes have to do with people. Having short meetings with them, them coming to me and using me as a resource. My people create all of the processes, I don’t have to do any documentation anymore, I just make sure the machine is headed in the right direction and it doesn’t get off track, that is my job. So I spend 2 hours a week down here. I spend more than that in my office here but it’s just hanging out and bothering people most likely. Or doing an interview like this with you which has nothing to do with my call center.

Then I have 6 other businesses that are related to the book and I do a lot of creative stuff. I never do the same thing twice Joey. The closest thing I come to doing the same thing twice is an interview. As we talked about before the interview, I decline most of them and don’t do a lot of speaking engagements. I have other things I want to do that I’ve never done before that I want to do in a creative way. My whole day is one creative day and the people who work with me are that way too.

In fact let me interject a little advertisement, if people go to workthesystem.com down in the lower right hand corner on that front page is a little icon that says "Work The System Testimonials". Click on that, I’ve had some fun with that with my IT guy, I put it to music. But that will give you an idea in the change in life that a person can have if they start living in the processes rather than shuffling around the bad results of unseen processes. There’s hundreds of testimonials and they’ll all go down the same road I’ve been going down so far. This changes lives and gives a life a whole new trajectory upward of freedom and money.

Joey Bushnell: Brilliant, I’ll put mine on there as well Sam! I didn’t know that was there but I can say for myself that my life changed after reading the book as well. I used to get things outsourced but on a small scale. I’d try but was just in this small mindset of “I can’t afford to do it at that level and employ someone full time.” Thinking very small basically.

But I realized after reading the book what I needed to do and things really picked up when I started getting help and getting systems in place. Like you said, I think it's impossible to grow when you are trying to do it all on your own, it just can’t happen.

So my next question Sam was, in the book you talk about 3 stages of the “Work the system” method. Could you let us know what those 3 stages are please?

Sam Carpenter: Sure let me put those into a configuration that’s a little different then I’ve done before...

The first stage would be documentation. We have 3 documents one is a strategic objective, it’s all explained in the book, but that is what you do, how you do it and generally how you are going to get where you want to go, what you don’t want to get involved with and what your strengths are. That is a single type written page.

Then the second document is a series of items and at Centratel ours is called “The 30 principles” another term for that is guidelines for decision making. In other words when you are faced with what I call a grey area decision, you don’t really have a definite answer for it, how do you decide?

Well, these principles that I came up with and all these documents came to my head that night. These principles are how I believe the world mechanically works and what works best. I always use this illustration, one of the principles is to do it now, well a new employee comes in here and says “Why? I can do it next Thursday” we say “No, if you can do it now or next Thursday, do it now.” They ask “Why” and I say “That’s how we do things round here and I’m giving you money to do things the way we do them. But more importantly that is what works best.” Sam Carpenter believes that doing things now is a better way to go 9 out of 10 times.

We have another one which is “In the office no rats nests, literally or figuratively.” So no one has a cluttered desk and it’s clean. These things I believe that I have written down and have incorporated in here. So people who come to work here look at those and I ask “Do you agree with those pretty much?” If they do, great, we are good to go. I always say if you want to adjust any of these or add some talk to me, even with a strategic objective. So we have a directional document, we have guide lines for decision making and that’s were we spend most of our time with a consulting account for example.

We are working with a $50 million company right now and we are just finishing up our 6 month gig, we are done they are now on their own. What we have helped them with most of the time we were there, was this 3rd set of documents called working procedures. Most people call them SOPs, standard operation procedures, written documentation of the various processes, so everyone is on board. Guess what? In this very intensive documentation of working procedures we use a bottom up philosophy where the people who actually do the procedures and execute the procedures are the ones writing them up and making them work. Then you have total buy in.

Let me back up a bit, the first stage is really about getting this mindset. The second stage would then be about the documentation. The third stage would be about maintenance. So you get this tweak in your head that your life is a collection of systems then number 2 you do the documentation and then number 3 you maintain the processes and you spend all of your time in the processes. Those would be the 3 steps in the work the system process.

Joey Bushnell: Is it enough Sam to just have these in your head? Or what is the power of documenting these things?

Sam Carpenter: First of all there is the bottom up thing with your front line people and presuming you have a business with 2-4 people in it or more of course, is that you have your people completely bought in, it’s not a military top down like ”You are going to do these 10 steps on this process no matter what.” Guess what they’re not going to. They just won’t in most cases. But if they create those 10 steps then the manager authorizes them as being OK and everyone agrees they are going to be brutal about making sure those steps are followed.

I haven’t said this yet but always remember, that if someone is executing a documented process and they see a better way of doing step 5, for example, out of a 10 step process they can go back to the manager and the manager will immediately make that tweak. So the working procedure, the SLP is a living thing. It changes day to day, it’s not a military top down type thing.

So you’ve got your total buy in by your people and the other thing, you’ve got is everyone is doing things the same way. I go back to my little narration of my life's story, and that is, you want every process in your business executed perfectly 100% of the time.

I use the example of the front desk, so somebody is at the front desk answering incoming calls. A possible new clients calls in and asks to speak to the sales person about the service. Mary might answer the phone one way and if Mary is busy, John will answer the phone and he’ll answer it a different way. Maybe John’s got a hang over and when he answers it, he won’t answer it very well.

So what if you could get the phone answering at the front desk with potential clients, and our potential clients is a $16,000-$20,000 sale here, over a period of 6 years.  What if you could have it answered perfectly every time a new person called in for a service? Do you think we would end up closing more deals? Oh yes we would! Then you do that through all of your business.

Centratel has about 400 different processes. We execute those processes as near perfectly as we can 100% of the time. That is why we have a huge margin, that’s why I can run 7 businesses instead of just this one. On this primary business, the one I wrote the book about I work 2 hours a week. It runs itself and everybody in here gets it.

So step one of getting it, is critical for the owner and the staff. There will be staff turnover as a company grows to find the correct people who do see things see things as separate systems. I’m a little bit nit picky about details and aren’t afraid of doing documentation, you’ve got to get the right people.

We do drug testing, we are ruthless with our drug testing. I get all kinds of arguments about that like “Well. it’s my life I’ll smoke dope if I want”  Well, no you are part of the process here and we need you to be clear thinking. If you want to smoke dope go up to the sandwich shop up here and earn $7 an hour and make sandwiches. Or you can come here and earn $20 an hour and not smoke dope. Every element of our business has to do with perfecting our processes including everybody’s ability to think.

The result is we don’t have any turnover here, everyone is paid highly, we are just examining the processes all the time. It might sound militaristic but it’s not that at all, if you walk in my office it’s quite a fun place to be. Everybody likes being here, people have their ups and downs of course but there is very little turnover, there is no stress in the office and nobody works over 40 hours. We don’t have any of our middle managers working 80 hours a week no one works over 80 hours a week.

35-40 hours a week is the number one answering service in the United States with 2,000 competitors measured on a variety of very objective scales including profitability.It makes for a beautiful synchronized swing machine of a business and the owner doesn’t have to be there. What more could you want as a business owner?

Joey Bushnell: Absolutely. My next question was, why is delegation so important and do you have any advice to us for efficiently delegating tasks?

Sam Carpenter: The owner or manager of the business should think 3 words on every decision that is made as they convert their business to a work the system business to an efficient business. Can I with this task... automate it, delegate it or discard it all together?

Most tasks you can’t automate, some tasks you can discard so that leaves most of the tasks to be delegated to other people. I’ve already gone through how to make that happen efficiently, you need to document. For inventory you need to document your processes and delegate stuff away. That is what I have managed to do enough of. Looking down from 40,000 feet if I had to really summarize things, I have found a way to delegate my expertise downward so other people can do it so I don’t have to do it anymore.

Joey Bushnell: How can we make the most out of our own personal time?

Sam Carpenter:  Let’s go back to step one of getting it. My book is three parts, coincidentally, the first part is “Getting it”. So what the readers can do right now is look around the room, the car or wherever they are and see the separate systems. That is the thing to do with your personal time right now, right this minute.

I’m looking around my room... there is a copier here, there is a monitor, a chair over there, there is a light switch on a wall and those are all separate from each other, they have nothing to do with each other. If someone walks in the front door here, it has nothing to do with someone answering the phone in the back room, they are separate.

Walking down the street there’s a tree, there is a fire hydrant, (if that is what they call them in the UK, you used to have phone booths the red metal and glass phone booths) but there are cars, a dog, power lines over the street. All of those things have nothing to do with each other. They exist in your world as separate. They’re all connected because you are seeing them at the same time but they are separate.

You go into your business and as soon as you can see the separate processes of your business the rest of it comes naturally. So if you are asking me what’s the best use of my time right now, that is what you can do. Download the book, read part 1, get the separateness and then it will all make sense, you almost don’t need the rest of my book once you get the separateness of your business and of your life.

That is a mechanical fact, we want to think we are all one and everything is connected. I’m sure on an atomic level we are but that is useless information. Once you can start segregating your life into the separate components that it is, you can start to fix them one after the other.

Ultimately your time will be spent working on those separate processes 100% percent of the time. Except for the fun part, Joey I know you like to interview people and I like to give interviews and I like to write. We do certain recurring things but 95% of our time should be on one time, creative system improvement tasks and system improvement is a great phrase to carry around. 12 inches in front of your face all day long. System improvement, system improvement that is where we should be spending our time.

Joey Bushnell: If we are doing this right Sam, like you said, you have a 2 hour work week which is the dream for most people. I guess the rest of the time you are enjoying yourself?

Sam Carpenter: I am. I have a friend who I am going to do some climbing with this afternoon. I had the decision this morning to drive my new car or my old beater, climber car as I call it. I took my climber car went out and had some coffee with another friend, now I’m doing this interview with you and remember you asked when I could fit this in and I said I don’t care, anytime with me and you picked the time, it didn’t matter to me. I saw a movie last night and I’ve got a date Friday, I can do whatever I want with my time and the things I want to do.

Here’s something, let me just mention it quickly because people find this interesting. So I’m a mountain climber and I have friends who want to be mountain guides. I have a friend who has climbed Mount Rainier, up here it’s a pretty tall peak in the cascades, 300 times because he loves to climb. I have to ask him, do you really enjoy this? Has it really got you anywhere? And there are amateur bicycle racers who say “I want to go to Tour De France. Maybe someday they’ll go but probably not. But then what? People have these things they love to do and they think they need to make it a vocation and that is a big mistake.

I love to mountain climb but I realized I can set up a machine to provide me all the time and money I want to go anywhere in the world and mountain climb on my own time and not drag somebody up there who has never been up the mountain before, that is not fun! It's not fun to work 6 hours a day on a bicycle saddle because you like to race bicycles. So I really caution people about narrowing their scope of what they can do with their lives to what they like to do.

There’s all kinds of interesting businesses out there and not just internet businesses, not just online stuff but all kinds of crazy little businesses, an answering service or even a restaurant that can be automated and made to be run their own. Then they become an ATM or a money machine then go ride your bike and climb your mountains or go watch movies all the time if that's what you want.

I really caution to people not to go down that road that seems to be in our culture, we should be able to do in our life what we love to do, you are just narrowing your prospects. There is all kinds of opportunity out there in business that can be fixed. I go back to what I said at the beginning, 9 out of 10 businesses are mismanaged.

9 out of 10 businesses have no bottom line and can be picked up for a song and a dance that is how I bought this call center for nothing at all. I think I paid $21,000 for it and $5,000 down back in late 1984. It’s a $5million business, it’s worth $5million and it has no debt, and I love it for that reason and I love it because I only work 2 hours a week, it's a money machine. There is all kinds of opportunity out there.

Joey Bushnell: And it’s all thanks to getting your systems in place. The first 50 Years of your life Sam, the freedom you now have, just wasn’t there. But now that you have the systems in place, you have the time and freedom to do what you want with your life, which is like I said for most people, it’s almost a paradigm shift that most people don’t think is possible but actually it can be when the systems are in place.

Sam Carpenter: There are a lot of people out there who are doing this and it has a lot to do with mechanics. It has nothing to do with emotion, your IQ, how good looking you are it has nothing to do with any of that, it has to do with the machinery which has no emotion or expectations, is it running efficiently or not? That is the question and it has nothing to do with if you are a good person, if you go to church everyday or anything like that. It has to do with... Is the machinery operating properly?

This comes down to our readers looking at their lives and saying "what mechanically works in your life and what mechanically happens?". If I go down to my car right now and turn the key will the motor of the car start? In all probability, it will. If I skip dinner tonight will I be hungry at 10pm, yes I will. There are certain things we know absolutely about our mechanical lives and that is what we go back to.

Emotion is fine but not in what I’m talking about, this all boils down to let’s get the mechanics correct in our lives and what we will find is the happiness and emotionally satisfying part will come along naturally afterwards.

You mentioned the word paradigm and the paradigm most people have is, "I have to do the right things, work hard, get the right education, have the right smile on my face and then all the good things will come". No, actually you have to get the machine fixed and operating properly.

It's amazing when you have a lot of time and money and you get to do creative stuff all day long and you get to do the stuff you want to all day long, guess what? You become a happier person.

You are helping the people around you, so I have this non profit in Pakistan in all places, that I just sent $1,000 over to the small school yesterday. I get huge satisfaction out of that and I’m able to help the people, the people who work here get double what they make anywhere else. That is the supreme satisfaction. I’ve got more money in the bank than I need honestly for my lifestyle. The satisfaction comes after fixing the machine.

Joey Bushnell: Brilliant. My next question is, sometimes as a small business owner we suffer from, or we do it to ourselves, procrastination. How can we beat procrastination?

Sam Carpenter: Let’s go through a typical scenario, the testimonials on the website. What those people did was they read a book, they got the concept of separate systems and then they applied it, and I try to be very careful about recommending this but if you are going to apply this methodology to your business, find a process that can be easily fixed and you can see results with straight away.

In a perfect place, say you have a business with 10 people in it, I know a lot of people out there are internet people and may only have one or two people but understand what I’m trying to say, if you had a business of 10 people, 3 people are answering the phone put them together and find out among you as the leader and the 3 people, the best way to answer the phone.

Write it down maybe in seven steps, step one pick up the phone, step two say "ABC company this is Janice" on to 3,4,5 through the whole process. Get everyone to do that every single time and you will notice an improvement in how your incoming people and their comportment will be happier.Then you take a little bigger process and maybe now you’re going after one that is really problematic.

I talk about very specifically in the book about one, how we went through and there were 53 steps. I never had to do the process again, my first 15 years I was spending 2 hours a week doing this process and I haven’t done it in 13 years. So I saved 2 hours a week for the last 13 years, do the math, it’s about a year of 40 hour work weeks. Now that process has been performed perfectly for 13 years as we tweak it and make it a little better every day.

So what you want to do in summary is find a couple of little processes that you can improve relatively quickly. This one process that I haven’t done in 13 years took us 8 hours of time fix. 8 hours of my time, maybe an hour of two other peoples time to help me put the process together.

You find something that is relatively easy to fix that will have some what of a dramatic impact and now you will not procrastinate. You will not procrastinate because the results are so awesome. Usually what procrastination is “No I can’t do this now, I don’t want to do this now because I have this fire to kill over here” that is really what people are saying. Or “I’ve got to recover from my 16 hour day yesterday.”

Pretty soon your hours of the day shorten up and procrastination disappears because you are not living a life of fire killing, there aren’t anymore fires to kill and you are down to a minimal amount of work per week and you are making a lot of money, you get excited and procrastination is just gone.

Joey Bushnell: I like the analogy in your book Sam of Whack-a-mole.

Sam Carpenter: Yeah, go to Google if you don’t know what whack-a-mole is and they’ll see it's just getting better and better at killing fires, but they will get you in the end.

Joey Bushnell: Yeah, a game you can’t win! So my last question is, should we be aiming for perfection or does that just hold us back?

Sam Carpenter: Yes we should be aiming for perfection however let me redefine perfection. Let’s say we are trying to create a process which has a lot of steps in it and it's 98% perfect, well subjectively what we call 95%-98% perfect. In order to get 100% perfect we are going to spend a huge amount of time to get that extra 5% or 2% to make it absolutely perfect, in this very subjective world so I would question if you could make any process working.

Perfect is getting it just about, almost perfect without wasting time making it too perfect. In a way I could answer your question by saying strive for perfection but know that if you get to 100% perfection in the colloquial sense or in a classical sense, you have probably spent too much time doing it and that in itself is imperfection.

We allow for mistakes around here, mistakes happen but we don’t get all bogged down in bureaucracy and going crazy with these processes trying to get them just perfect. That goes with everything, how you ride your bike, your marriage, how you take care of your dog. You need to be consistent and congruent but it doesn’t have to be perfect every minute or you turn in to this person we call a control freak. You don’t want to be that.

Joey Bushnell: So you apply a 98% rule to that Sam?

Sam Carpenter:  I like 98% it feels about right to me. If you are in high school or college and you get 98% on an exam, you now you did damn well. You didn’t get it perfect but it was certainly well enough. Maybe getting 100% on every exam would make you a little weird.

Joey Bushnell: Sam, thank you so much for doing this interview with me today it’s been absolutely fantastic. For those who haven't read this and currently do not have the books, where can they get it because they need it, there is a lot more than just what we have spoken about.

Sam Carpenter: Workthesystem.com is the place to start. There is all kinds of resources take a look at the testimonials. Read the front page, there is a little video I do there, be sure to look at the FAQ’s. The FAQ’s sum up all that we have talked about today and I’m quite proud of those. I have tweaked those over several years and I think they are really good.

That website will lead over to the work the system academy website where we have an online program and then we do one on one consulting. We have some very large international clients and we have some very small clients we do a coaching to. So under the products and services tab people can look at that.

The second most important thing would be to follow directions. You can download the entire PDF of the book and the audio of the entire book as reported by me. I own the manuscript so that’s different from 99% of publishing deals I do have a legitimate publisher, it’s not self published. So we are able to do with it what we want. Interestingly I got a wire from a publishing company in china yesterday and it looks like we are going into china with the book now which is pretty cool.

Joey Bushnell: So people can go straight there and download the full version for free in either PDF or Audio?

Sam Carpenter: Yes, it is available in various companies in hard copy and it’s on amazon as hard copy and the website you can buy it as hard copy too. As a hard copy book it's a very nice book, it makes a great gift for someone who is working more than 80 hours a week.

Joey Bushnell: I’ll put links for everyone to click them and go download it, thank you that's an incredible offer. If applied it will change lives. Thank you once again Sam for spending time with me today and sharing this great information with us all.

Sam Carpenter: No problem Joey my pleasure, we love you Brits! Keep up the good work over there. Thanks Joey, take care.

Joey Bushnell: Thank you take care.

Direct download: 20132811-TOMS-003-Sam_Carpenter.mp3
Category:Systems -- posted at: 1:28pm PDT

Todd Brown is one of the worlds leading authorities on building highly profitable marketing funnels. He’s the creator of several training programs including “Marketing Funnel Automation Partnership Coaching Program, 26 Advanced Marketing Funnel Conversion Tactics and The Marketing Funnels Uncensored Newsletter”. He helped Rich Schefren grow Strategic Profits into the company it is today by implementing these strategies and tactics.

What we talk about in this interview is easy to understand but it's advanced money making advice. It's all about Marketing Funnel Optimization.

I promise you there is no joke, no hype in this next sentence... acting on what Todd teaches in this interview could easily multiply your online sales by double, triple or much more.

Why? Because your marketing funnel is the core of your online business. You have to get it right and you have to keep optimizing it if you want to make the most money possible.

In this interview Todd reveals...

* The must-have tool to run your marketing funnel

* Why straight, linear funnels are dead! (Hint: Dynamic, segmented funnels are what's working now)

* How to have a high converting, front-end funnel that pays for all your traffic

* How to create content in your funnel that does no selling, but still makes you a lot of money

* How many steps a funnel should have

* 3 back-end marketing sequences that will raise the lifetime value of your customers

* And a lot more! Trust me, this content is gold, invest the next hour to listen to it, it will pay off

Either listen to the interview or read the entire transcript below...

Joey Bushnell: Hello, welcome to The Online Marketing Show! I’m your host Joey Bushnell

Today’s special guest is Todd Brown... who is without question, one of the worlds leading experts when it comes to marketing funnels.

He’s the creator of several training programs including “Marketing Funnel Automation Partnership Coaching Program, 26 Advanced Marketing Funnel Conversion Tactics and The Marketing Funnels Uncensored Newsletter”. I highly recommend you go check out his blog over at marketingfunnelautomation.com

Todd, thank you so much for being on the call with me today.

Todd Brown: You’re welcome man! I’m excited to be here.

Joey Bushnell: Thank you. Todd, how did you become an online marketer and become known as the go-to-guy for marketing funnels?

Todd Brown: I’ll give you the shortened version of how I first got online. Basically I was working for a company that owned about a dozen health clubs in New Jersey, in the US. I got a direct mail piece, a letter in the mail that was selling a direct response marketing training program for fitness professionals. It was about $300 odd dollars and I thought it was perfectly fit for what I was doing with this health club company.

So I went to the owner and asked the owner if I could buy this thing and expense it, he said :”Yeah go ahead.” I bought this course for $300 odd dollars, got it sent to me and that was my first exposure to direct response marketing, copywriting and the world that we operate in within the online marketing community.

I was immediately engrossed with this training program and got sucked in, so I decided I’m going to pick up the phone I’m going to call the dude who put this training program together and I’m going to ask him who he learned from, what did he study. That’s what I did and he mentioned Dan Kennedy. So of course, I immediately went out and bought everything I could get my hands on from Dan Kennedy, at the time most of what I was buying was on eBay and I dove in and was going through the Dan Kennedy stuff like crazy.

That very quickly led to me starting my first information marketing venture online. Knowing nothing about the internet, technology or websites, I barely knew how to send an email, this is about ten years ago now. The rest is history in terms of online, eventually the business started making a lot more money than what my job was paying so I eventually left that gig and moved down to south Florida and the rest is history.

How did I become the go-to-guy for so many top marketers in terms of marketing funnels? Well, two things really happened. One, I was originally a client of Rich Schefren's when I decided to leave my job and go full time online, the skill set that I knew I was missing was business systematization. It wasn’t the marketing, copy or marketing strategy it was the actual systematization of the business. At the time I knew that and still to this day, Rich is the absolute best at teaching that side of things.

I became a client of his, we hit it off and became really good friends then Rich asked me to come aboard as a partner at Strategic Profits and run the marketing for him. So for about 2 years I was juggling, running all of the marketing for Strategic Profits, launching 15/16 different front end products, big internal launches, JV’s, affiliate promotions and campaigns along with my own companies. It was through my running of the marketing there that I got to work on projects with Jay Abraham, Clayton Makepeace, John Carlton and then became friends with Michael Masterson. Then worked on and co-ordinated projects, launches and campaigns with JV partners like Mike Filsame, Russell Brunson, Frank Kern and Ryan Deiss.

So I got to see 2 different sides of the marketing funnel world. I got to see what the online guys were doing and how they were applying direct response marketing techniques to their funnels online. I also got to see how the original “old school”, if you will, direct marketing guys did it offline. So how was Jay Abraham with his clients? How was he getting new customers? How was he multiplying their front end or back end? The same thing with Michael Masterson at Agora and the best franchises and divisions if you will at Agora, What were they doing? How were they doing it? Eventually that carried on over into application at Strategic Profits and we launched a whole bunch of killer front end products.

We launched the Founders Club Membership which is still thriving and growing today. We did about 3 quarters of a million dollars in 7 days in an internal relaunch of a particular product applying some of the things I have learned.

Just to wrap this up because I want to get into some meat and potatoes for everyone listening, what happened as about a year ago was a good buddy of mine Chris Brisson from Call Loop which is great application for SMS and voice broadcast, he was constantly giving me access to all of his software, application and all of this great stuff. So I said to him one day “What can I do for you?” and he said to me “Look, do a webinar for my customers.”

We had one funnel at the time which was doing 24 dollars for every opt-in and so I did this 90 minute webinar for his customers. He has a lot of savvy big name marketers on there. It was pure content, no pitch at the end and after that webinar Chris’s partner texted me within 20 minutes and said “People are freaking out they loved the webinar and they were disappointed you didn’t have something to share with them in terms of coaching, courses or training.”

Then we came back 2 months later and opened up  Marketing Funnel Automation, the partnership coaching program and the rest has been history.

But enough about me man let's talk about funnels what have you got next for me?

Joey Bushnell: My first question for you Todd, was for someone who maybe hasn’t heard the term before what exactly is a marketing funnel?

Todd Brown: A marketing funnel is a strategic process. A strategic set of steps that you bring a prospect through with the ultimate objective being... at the end of the process they desire your product and they are ready to buy. They see the need and value of your product as the solution to their problem and situation above anything and everything else.

Let me make an important point that I want everyone to get... When I first launched this Marketing Funnel Automation brand I specifically refer to it as a marketing funnel, not a sales funnel. Most people talk about it as a sales funnel but there is a distinct difference between marketing and sales.

I think it was Peter Drucker who said that the whole purpose of marketing is to make selling superfluous. When you do marketing the right way, you are leading the prospect to the make the decision on their own that your product or service is the best choice for them, the perfect fit and perfect solution for their problem or situation. People love to buy they hate being sold.

There is a massive difference in the way we approach a marketing funnel. Our job again, is to give the prospect this feeling of freedom of choice and freedom of decision so they feel at the end that they’ve come to the conclusion on their own and they weren’t sold. So there is a very specific way that we do that. I’m sure you and I are going to get to how we actually do that and how are we marketing and not selling. How are we leading them to the conclusion.

But again a marketing funnel is just a series of steps, it’s a strategic process and I say strategic because so many marketers get caught up in the tactics of the marketing funnel.

Most marketers, especially newbie marketers that get online and start learning about marketing funnels, when they think of a marketing funnel they think “OK, I’m going to have a squeeze page to a sale letter or one time offer to the order form to the up sell, if they don’t take the up sell it goes to a down sell, if they do take the up sell it goes to another up sell". That is all the tactical components if you will, of a marketing funnel.

I refer to that as a an offer sequence. You have the main offer then you have the up sell offer or down sell offer or an OTO and so on and so forth. But what’s more important is the strategy behind the marketing funnel... What are you saying? When are you saying it? How are you saying it? Why are you saying it? What are you actually communicating through each of the steps of your marketing funnel?

Whether your marketing funnel is 8 steps, 4 steps or 2 steps, whatever it is... it’s the strategy behind the marketing funnel that’s more important than the tactics. You have to have both but you build it on the foundation of strategy.

Let me give you just 2 examples so that this makes sense. When we are putting together marketing funnels, there are a few things that we look at but 2 of the main things we look at are Market Sophistication and Prospect Awareness Level.

Market sophistication is basically what promises, claims and benefits have your prospects seen from competitors? What are your competitors promising to your prospects? What claims have they made about their own products, about the benefits of their products to your prospects? There are 5 different levels of sophistication if you will, in a market and depending on the sophistication level of the market, that needs to change the sophistication of your marketing.

The example that I give which comes straight from Eugene Schwartz and “Break Through Advertising” one of the greatest copywriters of all time, is this idea when weight loss supplements first hit the market, one day there weren’t any weight loss supplements then the next day there was a supplement the advertising only had to say “Take this pill and you’ll loose weight.” That’s it. That was because nobody had made any similar claim before, there was nothing like it on the market. It was a totally fresh and really you could call it a "level 1 sophisticated market".

But as more and more competitors came out and were saying similar things, the market became more sophisticated and those same claims didn’t work to the same level that they previously did.

Now the marketing had to go up a sophistication level. So then it became “Take this pill and lose 7 pounds.”

Then when the market reached that sophistication level because more and more marketers were making a similar claim like that, then it was “Take this pill and loose 7 pounds in 7 days.”

Then it went on to “Take this pill that contains some crazy rain forest bark that blocks the absorption of fat in your intestinal track.”

They go through these different levels of sophistication. If you think about that one example then, today you couldn’t release a weight loss or fat burning supplement and say just “Take this pill and you’ll loose weight” Why?  Because the market is too sophisticated for that.

So that's just an example of how the strategy behind the campaign is more important, behind the funnel is more important than the tactics. It’s not about having a front end offer, an up sell, a down sell or an OTO.

If you don’t take into consideration for example, market sophistication you could come into that with all of the right tactics and the whole offer sequence but your message is not sophisticated enough for the market. It’s too “Unsophisticated” for the level they are at then it will fall completely flat. That is what happens to a lot of marketers and that is what I mean when I say strategy. Does that make sense?

Joey Bushnell: Yes, it makes perfect sense. I think we’ve seen that happen in the internet marketing world. I remember back in 2007, where people were selling push button riches, and all sorts of other shenanigans which we all know now, are total BS. Fast forward to 2013 and the market has really matured, they don’t fall for these things like they used to. So I can totally see your point there and I’m guessing that would carry over to any niche wouldn’t it?

Todd Brown: Absolutely, every niche will go through this and mature. They mature based on the marketing claims and promises that they are exposed to from the market place and from competitors. All we are saying is, if you could go into a niche and you could make a completely unique promise that they’ve never seen before, man you are going to crush it!

I’m not saying if you can go into a niche that no one has ever marketed to before. I’m saying if you can go in with a unique promise you are operating at that level 1 sophistication, so your marketing message doesn’t have to be that sophisticated. But in all niches eventually as competitors see you making money or as individuals see you making money and doing well competitors are going to come in. Usually what happens is you see lots of copy cats and so similar messages get put out to the market place. Then I don’t care what geography you are operating within, every niche matures and gets sophisticated over time.

It's your job as a marketer before you begin crafting your marketing funnel, before you begin engineering it or start thinking about one word of copy, it’s your job to understand where your market is at on that scale of market sophistication.

Joey Bushnell: Todd that’s a great explanation, thank you.

Before we talk about strategy and some of the marketing principles that go into a marketing funnel, I want to first of all just talk about the automation part. We can do all of this, as the name of your website marketingfunnelautomation.com suggests, on auto pilot. So there’s lots of autoresponders and CRM tools out there that can help us to automate things.

In your opinion what is the best one?

Todd Brown: My opinion is that Infusionsoft is the best CRM. I don’t get paid anything by Infusionsoft for thinking that, if something better came along, better meaning it would allow me to do more things than Infusionsoft allows me to do for myself, coaching students and my consulting clients, I would go to that. I am always keeping my eye out for a better CRM but the thing that Infusionsoft allows you to do that makes it so invaluable is that you can auto segment prospects based on their engagement or lack thereof with your content.

What I mean by that and I think it will be incredibly valuable for everyone reading is... The days of bringing all prospects through a straight, linear funnel are dead.

What I mean by a straight, linear funnel is, the days of sending everybody to a squeeze page and then sending them through a 4 part video series, where 3 of the videos are educational, another one is a sales video... So day 1, you send an email to prospects who have opted in saying “Video 1 has been posted.” Then day 2, you send everyone an email that says "Video 2 has been posted", day 3, send them an email saying "Video 3 has been posted" and day 4, an email saying "Video 4 has been posted".

Those days are long dead of sending people straight through regardless of their engagement.

Some people that opt-in to that type of funnel will immediately on day one go and watch video 1 and day 2 go and watch video 2 and day 3 and 4 and so on. But what about the people who opt-in go watch video 1 then on the next day when they are sent an email about video 2, they don’t watch video 2?

Now if your entire video series makes up your entire marketing funnel, if it’s one big overriding message, that means every video in that example funnel is valuable and serves a purpose. Everything that we do, say and everything that happens in a marketing funnel is done strategically. It's there for a reason, it serves a bigger strategic or tactical purpose. If It doesn’t then it shouldn’t be in the funnel.

We have to assume that in a 4 part video funnel, every video has a reason for being in there. Obviously, if it didn’t we wouldn’t keep it in there. Does it make sense to take a prospect who let’s say... gets an email about video 2, doesn't click the link to watch video 2, doesn’t actually watch it, should we the next day send them an email about video 3 which sends them straight to video 3 without them even watching video 2? Does that make any sense?

No of course not.

That is like us taking a 1 hour sales presentation so to speak, and letting them skip a 15 minute chunk of that sale presentation. We might say something crucial in there or cover one objection or two objections, highlight a benefit or a feature that is critical to making the sale at the end, in that 15 minute chunk.

What Infusionsoft allows you to do, is move people through your funnel based on their engagement.

The people that are consuming the videos in this example... if they consume video 1, tomorrow we are giving them video 2. If they consume video 2, the next day we are giving them video 3 and so on.

The person who doesn’t, we are going to continue to drive them back to where they left off. So people can go through your funnel at the appropriate speed.

It’s like if you were selling “face to face” with somebody and they said they had to go to the bathroom, you would stop your presentation, you’d let them go, wait until they got back then pick up where you left off. It’s the same thing, we wouldn’t just carry on speaking. Infusionsoft allows you to do that and a whole bunch of other auto segmenting.

Segmentation is critical in the marketing funnel process because it allows you to communicate more targeted messages to your prospects. The more targeted you can be in terms of their engagement, needs, their response and their interaction with your content, the better your conversion rate is going to be for all the different segments.

Joey Bushnell: So in that situation Todd, where someone has a 4 part video series as part of their funnel and they watch video one and then they don’t click the link for video 2. So would you send them an email again saying here’s video two, you wouldn’t let them see video 3 until they’ve clicked the link and consumed video 2?

Todd Brown: Yes and No. What I mean by that is, yes I’m going to send another email about video 2, I’m going to take an additional 3 days to do everything in my power to get them to consume video 2 before I send them on to video 3.

At some point you’ve got to send them on to video 3 in hopes that they will re-engage and go back through video 2 as well.

If they go and watch video 1 then the next day we send them an email about video 2 and they don’t click the link or go to consume video 2. The day after I’m going to send them an email about video 2 that is going to present a different benefit, a different hook or angle as to why they should consume video 2. Remember people desire things for different reasons.

So sometimes the hook you present or the main benefit that you represent as to why they should watch video 2, it might resonate with some people but not with others. So the next email that we send out is going to be a different angle or hook.

Then finally, the day after that is going to be another angle and hook, ultimately again, trying to get consumption of video 2 and our marketing message.

After about 3 additional days we are going to drive them on to video 3 but they are now in a different follow up sequence, meaning that the people who are actively engaged in the funnel, the people that went to watch video 1 went to watch video 2 are in a follow up sequence that acknowledges their engagement. It acknowledges their engagement, it's a funnel that’s designed for people that are hot and engaged with your content.

Whereas the people who didn’t consume video 2 that we eventually have to move them on to video 3 they are in a different video 3 sequence then that communicates differently with them than the other video 3 sequence that is communicating with the other “hot” prospects.

Joey Bushnell: So basically there’s no such thing as a one size fits all funnel anymore. Every funnel should be tailored to how the individual engages with the funnel.

Todd Brown: Yeah so if you are thinking big, operating big and you want to play like the big boys play, then you go the distance with your marketing funnel when you are engineering it because a single, phenomenal front end marketing funnel could revolutionize your business. It could revolutionize your business, a front end meaning customer acquiring.

The funnel or funnels you have that acquire new customers for you, when you have one that allows you to generate new customers at break even, meaning you spend $1000 and you get $1000 worth of new customers in your business, the sky is the limit. You’ve just reached the promise land because at that point it’s no longer about marketing it becomes a scale issue.

I mention that within this context because is it work for you to set up a funnel like this? Yes absolutely. But anybody that tells you that you can have a 7 or 8 figure business without putting in the work is lying to you.

The reality is, there is no fast way to sustainable riches online, that’s all bull crap. I’ve been around this game a long time, I wish it was true. I wish there was a fast and easy way to make crazy money online but the reality is, there is a big difference between having an income stream online or making money online and having a business online.

When people go after just income online, they are constantly having to hustle month in, month out. Eventually when that hustle breaks them they have to move on to something else.

Whereas what we are doing is building a business, a long term sustainable business that grows and grows every month. In order to have something like this you have to have a rock solid funnel that allows you to pay for traffic, do paid media and break even on the front. In order to be able to do that with the cost of media today, you need a funnel like what we just went through with multiple paths all based on engagement not a one size fits all cookie cutter approach.

Joey Bushnell: So with this type of funnel, you’ve already said Infusionsoft is your weapon of choice, it’s mine as well. Am I right in thinking that if there is anyone listening to this interview that has Office Autopilot, they can do it on there as well?

Todd Brown: Yes, that’s right.

Joey Bushnell: And tools such as Aweber, Get Response, Icontact, Constant Contact and MailChimp those types of auto responders, can’t do these extra things?

Todd Brown: With Aweber you can do certain things with AW Pro Tools.

The reality is that we shouldn’t even compare Aweber or Get Response with things like Office AutoPilot or Infusionsoft because Aweber is a tool to send out email broadcasts and email autoresponders. It is not a marketing automation tool, it’s an email automation tool.

So when we talk about segmenting on the fly and you and I could talk about tracking links, using interest tags and crazy marketing automation stuff in InfusionSoft. Aweber isn’t set up to do that, it’s not a tool to do that.

So to me the reality is, I have a lot of coaching students who use things like Aweber and Get Response, I’ll say the same thing to your audience as I do to my clients, I say “That’s where you’re at right now and we are going to set up the funnel with what it is you have right now, to the best of our ability. We are going to max out the tool that you currently have and get it as close to where I know it should be. But we are going to do that knowing that ultimately in the near future we want to move over to Infusionsoft" because done right, a tool like InfusionSoft or Office Autopilot will give you a positive return on investment month 1 when you use it.

So we are going to set it up right now with whatever you have, that goes for everybody. I don’t care whatever it is that you’ve got, you use what you have and you use it to the max. You don’t use a lack of tools, a lack of technology or a lack of capital as an excuse, ever!

I’ll tell you very quickly, I started my business over 10 years ago with $850 - that was it! For that $850 I think we formed a corporation there in the States, like a legal entity. We got a merchant account, I think we paid out $200 for that. We bought a domain name, some hosting and that was it. I never to this day invested another dime of my money into any of my online ventures. That $850 grew our first company, then the money from the first company grew the second company and the third company.

The point is... you can never let technology, tools and resources be the excuse because we just set it up the best we can, with what you've got then we go from there.

Joey Bushnell: So Todd, what are the main steps of a marketing funnel? I know that this is going to be different depending on the product, the offer and the niche but are there some core steps, core components, that you think should be in most marketing funnels?

Todd Brown: I’m going to answer that question a little bit differently than the way you were asking it. What I’m going to say is... First of all you were right in that every funnel is different.

Every funnel and the complexity of the funnel, the steps and the length is all dependent on the complexity of the product that you are ultimately going to present, such as how many features and benefits there are.

Also the number of steps in the funnel, the length and complexity of the funnel is based on the objections the market has, the sophistication level of the market, what competitors are doing in terms of, are all competitors using video or PDF’s? So there are a lot of these to take into consideration.

I spend a lot of time on with our coaching clients, it’s something that I call EBM content. EBM stands for Education Based Marketing. The bulk of a marketing funnel should be EBM content.

The way we are able to come up with the content, what you communicate and what order you say it is by asking one main question. There is a bunch of little questions but we start with this main question which is “What do prospects need to believe to buy?

The way I want you to think about this, is I want you to think of yourself as an attorney, lawyer or prosecutor if you will, and you are presenting a case to a court room and jury. In this case, the jury are your prospects and there are certain things that they need to believe.

If you were prosecuting a case where the gentleman was being charged with murder, you would know that the ultimate objective is that you want the jury to believe that this guy committed murder. From that we can work backwards and we can say what do they need to believe in order to believe that. What do they need to believe he committed murder? That he was there, that he had motive, that his finger prints where there, that he is a shady character, whatever it is they need to believe.

Our entire court case as prosecutors would be presenting that information in a linear, logical progression, making sure that everything they need to believe in order to come up with a guilty verdict at the end we are presenting. To simplify it, if we were prosecuting we make a statement of what we want them to believe and then we back it up with a preponderance of proof.

Proof in marketing, proof throughout your marketing funnel for all of your claims is one of the most critical aspects of a high converting marketing funnel. Without proof all you have is a claim - that’s it. So as a prosecutor you can’t just say "He was there at the scene of the crime" that’s not enough. You need to say he was there and here is proof his finger prints were there, there was an eye witness, he was caught on camera and it become a preponderance of proof.

Making the claim is the easy part, any marketer can make a claim but the difficult part is presenting the preponderance of proof. So every point you would want that jury to believe, we present in the right order, like he had motive, here are the reasons, why the reasons are the proof. He was there at the scene here is the proof, he committed the murder here is the proof, his finger prints were on the knife, the knife has the victims blood on it. So we are presenting it in a logical, linear order and for everything we want them to believe, we are making a statement, a claim, a promise and then we are backing it up with a preponderance of proof.

That is EBM content. That is education based marketing and before I give you an example let me say this... all of this happens without talking about the product. We are not talking about the product, we are educating and educating them in a way that leads them closer and closer to the sale and increases their desire for the end result, even before we present the product.

So when we present the product, they want to buy rather then us selling. We are educating them in a way where we are pre-selling them on our product or service. So when we present our product or service, it’s exactly what they want and they are grateful that we presented them with an opportunity to get it.

An example is one of the early companies that I started, was a company that worked with chiropractors. We used to teach chiropractors and even create funnels for them and what it would do is offer a free video to prospective patients. The free video would be "How to relieve back pain naturally with no drugs, surgery or crazy treatments". The video would be educational and what it would do is walk people through all of the different options that they had to relieve back pain.

All of the options where the other choices or alternatives to chiropractic that they had. But when they presented each of the alternatives one at a time, we would give them the negatives of those alternatives. We might give a weak benefit but we would go through such as they could go and get a massage, physical therapy, hire a personal fitness trainer, they could take natural herbal supplements and for each one of the alternatives we would tell them about the negatives.

Then when we finally got to chiropractic we would give them all of the positives. Now we weren’t talking about chiropractor care with the doctor we were just talking about chiropractic care in general. We educated them the whole way so at the end when we were done talking about chiropractic they got value from that marketing message and they reached the conclusion on their own that these other options suck, the best option is chiropractic care and I have to do it.

So when we transition from EBM content to the introduction of their service (chiropractic care) then it became “Yes, this is great I want this!” There was no hard selling needed or hardcore sale pitch, there was no fake scarcity needed, none of that. This was because we educated them in a way that led to the sale. We pre-sold them on the idea of chiropractic care with education based marketing content.

So whether that EBM content gets delivered by PDF, video, audio, a combination of those, a webinar or evergreen webinar or Google hangouts. Whether it’s done in 3 steps, 6 steps that is all dependent on how much information you have to present. It’s just like the question of how long should a sales letter be? Well, a sales letter should be as long as necessary to make the sale and no longer. Whether that is 3 pages, 1 page or 25 pages there is no arbitrary length, just like there is no arbitrary number of steps for the ideal marketing funnel or no ideal length for the perfect marketing funnel, it’s all dependent on what you have to communicate.

Joey Bushnell: So Todd, if we were to picture this front end marketing funnel, am I right in thinking it’s an opt-in or squeeze page of some kind, then they are delivered the EBM content then you are sending them to a video sales letter or sales page to make the sale but only after they have consumed the content?

Todd Brown: Yes, I think that is fair. For most marketers online, the majority of their conversions and front end revenue will come from the follow up steps in the marketing funnel. Whereas companies like Agora or take Stansberry research for example, one of their divisions they send people directly to a sales video or sales page. They are able to do that without an opt-in because of the quality of their copy. The quality of their copy is so good that they don’t need to generate a list of prospects, they can just send people directly to a sales message, generate enough sales to pay for their marketing and only a customers list.

For the average marketer online, yeah at a bare minimum, more than likely they should send people straight to a squeeze page. Then from a squeeze page have some kind of sequence behind that. The sequence then depends, in some cases you might have an immediate one time offer that you present right off the back of the opt-in depending on the niche and the product and so on. Or depending on the price point you might have a lengthier funnel, where you have one or more videos. There is no one tactical way to set up a marketing funnel. There is one right strategic way to set up a marketing funnel but the tactics of how you deliver your message, well there’s more than one way to skin a cat.

Joey Bushnell: With our front end marketing funnel, are we looking to make a profit on the front end? Or is this just something we are looking to break even with and make money later on?

Todd Brown: The right way to do it and the way the big boys operate (when I say big boys, I mean real big boys, the Agora’s, Boardrooms, etc) is that you look at your marketing in two different categories...

Marketing to prospects in order to make the first sale and get the first transaction with them, that is what we call front end.

The other category of marketing, is all the marketing that we do to existing customers, people who have one or more transactions with your company and that is what we call the back end.

The purpose of the front end is to acquire the maximum number of new customers at break even. That is ultimately the goal, maximum new customers and for the average marketer, it’s at break even. We won’t even get in to the more advanced "going negative" on the front when you have the cash flow, we’ll just say the goal is... maximum new customers at break even.

There are 2 components there... One is of course, at break even, that means if you spend $1,000 in media buy, your goal is to get $1,000 back in the form of new customers. That’s really like acquiring customers for free, there is no expense. If you invest $1,000 and get $1,000 back plus you get new customers on that front end transaction, that’s not an expense, that’s an investment and you should be willing to do that all day.

The second thing and this is where a lot of people seem to misunderstand, is that the goal is not just to break even, the goal is maximum new customer acquisition. I hear a lot of marketers say, they will teach from theory this idea of why have a $1 trial on the front? Why not sell an expensive product?

For you, if you are selling a $1 product, let’s say you have to generate 1,000 sale,s where as if I'm selling a $1,000 product, I only have to generate one sale. The difference is I would much rather take 1,000 new customers at $1 a piece than one new customer at $1,000 because now even though on the front end they both break even and both put out in the same financial situation, if I have 1,000 new customers and you only have 1, I have the ability to put those 1,000 new customers into a back end funnel and sequence that sells them on my premium offer.

Now we could bring them from $1 to a $97 a month continuity program or a $500 offer or to a coaching offer, a $2,00 or $5000 offer. I have 1,000 people to work with and you only have one. The goal is maximum new customers on the front end at break even. 

The purpose of the back end, all your marketing to your existing customers is to maximize lifetime customer value, is to build the value of your customer.

So if you know that every $1 customer you get is currently worth $300 to you, our goal is to increase that so your average customer goes from being worth $300 to being worth $350, $400, $500 and eventually to being worth more and more. The marketer with the highest lifetime customer value can dominate.

If my customers were worth $3,000 to me and your customer is worth $300 to you, I can afford to spend $1,000 to acquire a new customer if I really wanted. Whereas that would put you out of business but for me it would still give me $2,000 of profit over the life of that customer if I wanted to, so lifetime customer value that’s all back end.

Joey Bushnell: My last question was, I’ve seen on your blog, you talk about 3 back end marketing sequences that can help you maximize the lifetime value of a customer, can you let us know a little bit about those 3 sequences?

Todd Brown: There are more than 3 but these 3 that I'm referring to are the resell sequence, the retention sequence and the reactivation sequence.

The resell sequence is what most marketers online call their fulfillment sequence or thank you sequence. So somebody buys a product and most marketers fulfill the product, they will deliver the product whether it’s physical or digital. That sequence really should be used to resell them on their purchase, sell them on consumption of the product.

In other words don’t just deliver the video course or eBook, it should resell them on the wise decision that they made. It should also deliver a phenomenal customer experience, make them feel valued and give them access to whatever training materials they need. It should also build a relationship with these people because ultimately your goal is to continue to sell to customers by delivering more and more value. Deliver more value in exchange for their investment in you so you build a relationship but it should also be used to generate testimonials and referrals. These are all things that need to be built in to the reselling sequence, that is number one.

The retention sequence is really more of a sequence that is applied to continuity. What are you doing to retain your members or subscribers above and beyond just delivering the content that they expect to get. So if you have a newsletter, membership site or CD of the month or book of the month club, it's a sequence that is designed to remind your customers of the return of investment that they are getting from their subscription. It’s telling them, reminding them and refreshing them on the benefits they are getting, the community that they belong to and the value they are reaping from this continuity program.

In terms of keeping them around long term, one of your goals with this retention sequence is to tease future content. Tease what is coming up, what is going to happen next and what you are going to miss out on if you are not a member. In the retention marketing sequence, it’s rewarding your members with little gifts, trinkets and unexpected surprises recognizing that there is a value to each subscriber.

If you realize after looking at your metrics that a significant percentage of subscribers or members drop off at month 5 then you know in month 4 it would benefit you to send out a little something extra. Spend the $10 or $12 to send them a little gift tapping into the whole law of reciprocity the month before the big drop off point because if that helps you boost up your retention rate and you’re charging $47 a month you could very easily, very quickly see a positive return on your investment. So a strategic use of expected gifts is extremely valuable.

Then the last one, the reactivation sequence is just about not giving up on customers that either asked for a refund or cancelled their membership with you. But recognize that with the right reactivation campaign, in the right setting, you could activate up to 50% of the people that go inactive.

If you have a membership site for example, credit cards decline because of balances or expiration dates on them and I learned from Jay Abraham a majority of people that go inactive in any business, don’t go inactive because of anything harsh or negative from the business or business owner did but they go inactive for one of many different “Life reasons”.

With a certain reminding them, that there are no hard feelings, these things happen, come on back with different custom offers for inactive, cancelled or old clients. You can re-engage with them and bring them back. Remember that a customer at one point has the potential to be a customer in the future and it’s your job to continue to try to make that happen. So that is the reactivation marketing sequence.

These 3 sequences are of course in addition to the big back end sequences that are designed to sell your customers on bigger and more valuable products and services with you. Your job with your customers is to deliver more value at higher and higher price points to your customers. The key being deliver more value, don’t just have the mindset of what can I sell to them today. I learned from Jay Abraham... fall in love with your customers, value the customer and be a true customer resource and advocate for your customer. Put their needs at the forefront of your mind and you can’t go wrong with that.

Joey Bushnell: Todd, you said you were going to give us some meat and potatoes and there it is! Absolutely brilliant, so thank you. Where can we find out more about you and where can we get more of this first class information which is going to help us build our own first class marketing funnel?

Todd Brown: The website you mentioned earlier, go to marketingfunnelautomation.com. Put your name and email address into the form and you will get our email newsletter when we put out new blog posts and have webinars you will get notifications on those things.

We have a couple of different programs right now that marketers can participate in and they’ll learn more about when get on that email list. We have a print publication called Marketing Funnels Uncensored it includes analysis, dissection, explanation of a player money marketing, money making marketing funnels. There is a newsletter with that, a blue print report that gets mailed to them.

There is also of course, the Marketing Funnel Automation Partnership coaching program when that opens up.

We have a product called “26 advanced marketing funnel conversion strategies”.

But more than anything everyone, go over to marketingfunnelautomation.com, get on the list and I strive to always put out some great content so you’ll find value if nothing else just being on that list.

Joey Bushnell: Brilliant, Todd I want to thank you so much for your time today and thank you for being so generous with your information it’s been absolutely first class. Thank you every body for listening in, get on Todd’s free newsletter and you’ll be able to continue your marketing funnel education.

Todd Brown: You are very welcome, thank you so much Joey, talk soon.

Direct download: todd_brown_images_FINAL_NEW.mp3
Category:Marketing Funnels -- posted at: 5:50pm PDT

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