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The Transcript

Three Subscription Revenue Models for Digital Content and Services

Brian Clark: This is Rainmaker.FM, the digital marketing podcast network. It’s built on the Rainmaker Platform, which empowers you to build your own digital marketing and sales platform. Start your free 14-day trial at RainmakerPlatform.com.

Brian Clark: Hey, everyone, and welcome to another episode of New Rainmaker. I am Brian Clark, your host and the founder and CEO of Copyblogger Media.

We have a really cool episode today because I have a really cool co-host, as has been our practice lately. Instead of having to listen to me ramble on monologue-style, we get smart people to join us and talk about smart things.

Today, we’re talking about subscription revenue models. Last week, we kind of set the stage for the perfect online business model, which would be a combination of recurring revenue and digital products and services. We’re going to continue on that theme today with a guy who wrote the book on the topic of the power of subscription models in general.

Today, we’re going to focus on three models in the digital realm that are extremely powerful for any entrepreneur or business person looking to create a recurring revenue stream. Today’s guest is John Warrillow. He is the author of The Automatic Customer: Creating a Subscription Business in Any Industry.

John, thanks so much for joining me today.

John Warrillow: Thanks for having me, Brian. It’s a pleasure to be here.

Brian Clark: Yeah, absolutely. I know you currently run a successful subscription-based business, and I know that you had one prior to that, which is pretty good credibility, I would guess, for the book that you wrote. Tell us a little bit about how you got started as an entrepreneur, and take us through to how we got here to today.

The Only Business Model Investors Want to Talk About

John Warrillow: Yeah, sure. I used to run a subscription business. I sold it to a Fortune 500 company in 2008. I wrote a book called Built to Sell back in 2011, and the idea was, how do you structure a business and make it more sellable? One of the themes in the book was the importance of recurring revenue as it drives up the value of your business. With this book, I really wanted to do a deep dive into that idea of recurring revenue and how important it is to the overall value of your company.

Brian Clark: We talked last week. I had either the privilege or misfortune of having two months of conversation with private equity investors. It’s gotten to the point where all they want to hear about is recurring revenue. That, to me, is a remarkable shift given that most of the world still operates on a transactional basis.

The Priceless Value of Online Recurring Revenue

John Warrillow: Let me give you an example because my day job, what you mentioned, my current business, is called The Value Builder System, where we estimate and help business owners improve the value of their company. It’s a subscription business, but we have now 14,000 users that have gone through and filled out our questionnaire.

What we see is that the average business on that questionnaire gets an offer that’s around one times top-line revenue, but if you’ve got recurring revenue, you can get as much as six times top-line revenue. It’s a huge impact on the value of your business. Why? Because acquirers want to know, “Well, what’s this business going to do once the owner hits the beach?” They want to know that the revenue’s going to continue to go on.

How to Start a Bidding War for Your Business

Brian Clark: Yeah, absolutely. Of course, we’ve seen scenarios where that gets up to 10X revenue, which is amazing. If it’s the right company in the right market with recurring revenue, you can get into a strategic acquisition bidding war if you have more than one suitor, which of course is ideal. Still, five to six times revenue compared to one or two — huge difference in the capacity of that beach house that you end up in.

John Warrillow: The size and square footage, exactly.

Brian Clark: All right, as promised, I want to talk about a few different models here. We’re speaking specifically about digital products and services and with the advent of things like Netflix and other recurring models, based on purely, now, digital distribution. Of course, Netflix, at one point, did ship — or I guess they still do, but who does that anymore? — the actual DVDs, which was a smart play. They were in it for the long term, but I recall an interview with their CEO that says if you look at the brand itself of Netflix, it was always going to end up pure digital.

John Warrillow: It’s a very good point. The logistics of managing shipping stuff in a subscription business, you just have to ask the guys at Dollar Shave Club how difficult that is to actually ship a physical product on subscription. So they’re moving in the right direction making it digital.

Brian Clark: Now, I know one of your other models — and we joked around about it last week — not that it’s not amazing and viable, but the stuff in a box thing, I find this amazing that you have all these businesses popping up serving relatively affluent people with everything from a collection of cosmetics to an outfit for a guy.

John Warrillow: Right, yeah. BarkBox is one of my favorite. This is the one for dog parents where they send the dog parent — the dog owner, but they call them parents — a collection of dog treats. What’s really interesting about those models, Brian, is that the key to making them work is less the subscription and more the sales on the back of the subscription.

At Birchbox, as an example — $10 a month and you get a box full of cosmetic samples, mostly women who subscribe — half of their subscribers have now bought a full-size version on their website. The real opportunity that a lot of people are chasing is the back-end sales on the website, on the back of the subscription. The subscription in and of itself is a bit of a Trojan horse.

Brian Clark: Yeah, and that’s something we’ve been preaching forever, whether you call it a gateway product or acquiring a customer. It’s the continued sales, whether in a recurring model or on a one-off transactional model, but yeah, I did note that about Birchbox. I thought it was brilliant. It’s old-school direct marketing, but brought forward into the digital — the world we live in today where you have to be much more trustworthy and transparent in our marketing. Yet it’s still the same principle. When you acquire a customer and you take care of them, you’re going to get the opportunity for more revenue.

John Warrillow: Absolutely, yeah.

Brian Clark: Okay, so let’s talk about our first model today. This one is the first one that pops into many people’s minds when they think of the combination of digital and recurring revenue. That’s the tried-and-true membership website model, probably pioneered by people in the porn industry in the ’90s, but much more legitimate these days.

Why don’t you walk us through the model in your mind and, also, if you’ve got some off-kilter examples. Everyone knows that training people in marketing and these very meta business models are using the membership model, but there’s really just a broad range of people who are benefiting from the model.

How to Make a Membership Subscription Model Work

John Warrillow: You bet. To define it, the membership model is where you take your expertise, what you know better than 99.9 percent of the world, and put it behind a pay wall and charge people a subscription fee to access that.

A couple of good examples that are a little bit out of the ordinary would be DanceStudioOwner.com. If you own a dance studio, they’ll give you the templates and tools and insight on how to make that a profitable business. They were acquired recently by Revolution Dance, who are one of the fastest growing dance apparel companies, because it was a gateway product for revolution. That’s one example.

Another good example would be Mark over at The Wood Whisperer. At The Wood Whisperer, they teach hobby woodworkers how to build cabinets — again, very deep passion for a lot of people — and Mark delivers a great membership website over there for them.

The key is that you’ve got to find something that people are passionate about. The best membership websites, the ones with the most longevity, are actually helping you make money. It’s like RestaurantOwner.com, how to run a successful restaurant. Joe Crisara at Contractor Selling is helping plumbers and electricians be better sales and marketing individuals.

The ones that are a bit harder to make go are the real consumer-like ‘everything you wanted to know about Italy.’ Maybe there aren’t enough people that are really passionate about that topic, but it’s very hard to get them to break out their wallet if they don’t see a direct line to revenue.

Brian Clark: Yeah, and I think you’ve made the point that the membership site model works when you’re solving real problems, which is usually in a business or financial context, more or less. Of course, in any market, it’s either passion or a true problem, let’s say weight loss. Of course, there are many programs that do really well there because that’s a serious problem. You can at least keep the customer until they reach their goals and maybe even maintain beyond that.

The other side of it, like the woodworking thing, is passion. It’s got to be intense. You want to master whatever it is. I think maybe that’s the ingredient that separates something that’s going to work with that model and something that’s probably not going to go over as well.

John Warrillow: Yeah, and the degree of complexity of what you’re teaching and also the visual nature of what you’re teaching. If what you’re teaching requires screen-grabs and video tutorials, and for people to get it, they got to see it — that’s the perfect circumstance for a membership website. Obviously, with membership websites, you can usually upload video and show people screen grabs. The higher degree of complexity, the more need they have for the information.

Brian Clark: Excellent point. Before we move on from this model, you touch on this in the book. This is something we’ve advocated since 2007 with our Teaching Sells program with online training specifically — multiple modalities of content in that you provide text, you provide audio, you provide video, or some sort of visual when it’s necessary to communicate the ideas, but more or less serving all the different learning styles.

John Warrillow: Absolutely. That’s very, very important in a membership website where you do have people that are better at watching, better at reading, et cetera, et cetera.

Brian Clark: It’s also odd — and we’ll talk about the psychology of selling these things in a little bit — but when you transform something, say, from text into video, all of a sudden people want to pay more money for it, which is odd, but it’s a truth.

Okay, the next one that I want to talk about is the all-you-can-eat library model. That’s an interesting descriptor, but doesn’t that describe what we opened with, with Netflix?

What the ‘Netflix’ Model Can Do for Your Business

John Warrillow: You bet. Basically, the all-you-can-eat library model is where you take your digital content and you put it in the Cloud. You put it behind a pay wall, and you say, “Here it is. It’s in a library format, search for it, and use it.” It’s evergreen information, while Netflix is always adding new content, the base of its database, its library is these thousands of titles they have access to and that you get access to in real-time. Netflix is the ultimate all you can eat.

You don’t have to be Netflix, though, to use this. There’s an example in the book about New Masters Academy, and they’re an interesting business. They help people learn how to acquire a new skill in art, so if you want to become a watercolor painter or a pottery maker, et cetera, you can subscribe to New Masters Academy. I think it’s $30 or $35 a month, and you get access to literally hundreds of tutorials on how to learn a new discipline in the world of art. It’s all you can eat because the library is up there, and you can pick and choose like a Chinese menu. People are buying access to more content than they could ever possibly consume.

Brian Clark: To give another example of something we’ve been talking about quite a bit lately since LinkedIn spent a billion and a half, Lynda.com is this model as well. Do you have any behind-the-scenes insight on Lynda? I’ve been tracking that site for a decade, but I never quite figured out what their model was for paying contributors.

John Warrillow: I don’t. At New Masters Academy, for example, their model for paying contributors is interesting. There’s a pool of revenue that goes in that basically gets split up between all the contributors, but most people do that on a number of usage basis. So the people who have popular programs are getting paid more in the payout model than those that have obscure ones.

With New Masters, what they were interested in was depth of content as opposed to really just three really popular things. They wanted to be able to have lots of content, so they pay out based on number of submissions, number of tutorials you, as an artist, upload.

That’s the key point about these models like Uber and Facebook. They don’t necessarily own the content. They’re providing, basically, a platform. At New Masters, they don’t hire or employ all the artists. They’re hiring artists that are teaching at community colleges and so forth today and saying, “Hey listen, let me come and record you for a day or two. We’ll build out the tutorial, and then we’ll do a revenue share on the back-end.” That’s how they’ve accumulated lots and lots of content very, very quickly. They’re not buying it. They’re doing rev-share deals.

Brian Clark: Nice, and I suspect Lynda did something similar. What we’re talking about here with this all-you-can-eat library is massive amounts of content really beyond feasibility for a single person to create or even to hire a bunch of employees or even freelancers to create.

Going back to Netflix, that’s obviously a licensing situation. Now, of course, Netflix has gotten into original content, which I think is brilliant, but they laid the groundwork with a vast library of licensing deals. Give us some insight on how the everyday entrepreneur can use licensing in this model.

John Warrillow: What you want to do is first pick a very small and niche where you can own it. Like Lynda.com and the rest, the big, broad categories I think are already taken. You want to pick a very small niche. As New Masters did, go find the thoughtful contributors in that space who don’t necessarily have the same depth of knowledge around digital assets.

What you, as an entrepreneur, listening to this program being part of the Copyblogger community, you’re obviously knowledgeable of that digital marketing, digital assets, and how to structure these. You can bring that talent to the table. Let those individuals who have a unique expertise, but not necessarily the knowledge to sell information products, to market.

Again, the structure of the deals is typically a revenue-sharing agreement where you put their content into an all-you-can-eat library. Then on the back-end, you share a portion of that revenue. Then depending on the philosophy of the site, you can share revenue based on number of downloads, number of views, or as New Masters did, based on number of assets or number of tutorials uploaded. Again, that gets back to what you’re trying to achieve with your all-you-can-eat library.

Brian Clark: Just some insight, in another approach, there are content producers out there — let’s say you want to create a membership site for freelancers and you want to provide legal forms, checklists, documents like that. We know there’s an entire market out there of sites that sell that type of product. But you can also find a supplier where you could do a licensing deal. That becomes part of your content, which is somewhat stock. Then you augment it with your original content, and you’ve got quite the lucrative offering. Keep that in mind. Licensing can be powerful as long as you make the economics of it work.

John Warrillow: Well-said.

Brian Clark: Let’s move on to the third. This one is fascinating, and it’s tricky. We’ve got some examples here of people who created subscription models with network effects that just made ridiculous amounts of money coming and going. I’ll let you talk about that one, but the network model, what is this?

The Growth Power of the Network Subscription Model

John Warrillow: Essentially, the network model is a subscription model where the defining characteristic is the more people subscribe in your market, the more powerful the subscription becomes for everybody. To get your head around this one, go back to when the telephone was first introduced in the 1800s. At the time, when you first launched the telephone, the only people who had a telephone were the sheriff, the doctor in town, and maybe the post office. The utility of a telephone was somewhat minimal.

As people started to buy telephones and you could call not only the sheriff, but you could also call your neighbor or your mom or your kid, it started to accelerate the benefit for everybody to a point where it grew like wildfire because the benefits, the best sales people became the users of the system.

A more modern day example of that might be World of Warcraft, the online video game series, where you can game individually, but it’s way more fun if you get your friends and contacts to game with you. There’s an acceleration or network effect that happens when the more people opt in, the better it is for everybody.

Brian Clark: Yeah, the fax machine is my favorite example. One fax machine is worthless, two is interesting, but two million is something. That’s exactly what happened until it got replaced by digital.

John Warrillow: My co-host, you’re sounding very old by saying that kind of stuff.

Brian Clark: Oh I know. Fax machine? What’s that?

John Warrillow: Exactly.

Brian Clark: You talked about the telephone.

John Warrillow: Right, exactly.

Brian Clark: I got this computer in my pocket that also makes calls, so I don’t …

John Warrillow: Touché.

Brian Clark: We think about network effects a lot these days in terms of free things that spread, such as, of course, Twitter, Facebook, same concept, but there’s no money being charged. Talk to me a little bit about WhatsApp, which went with a nominal subscription fee that added up to a whole lot of money and a gigantic acquisition.

John Warrillow: Yeah, WhatsApp is probably the poster child for this network model where, as you know, before they were acquired by Facebook, you could subscribe to WhatsApp, and after a year of using it for free, they charged you $1 per year subscription. You think, what on earth do they care about a dollar? Well, the dollar helped them create the platform that would actually get rid of all the cheesy ads that were on all the competitive messaging platforms who chose to monetize their platform by advertising.

The guys at WhatsApp said, “You know what, we’re going to create a clean app, no ads, but you got to pay $1 a year.” Well, they were, at the time of the acquisition, acquiring a million new users a day — a million new users a day. More pictures were being exchanged on WhatsApp than were on the entire Facebook platform, and as you know the story ends, Facebook acquires WhatsApp for I can’t remember the number off the top of my head.

Brian Clark: $19 billion.

John Warrillow: Yeah, I was going to say $18 or $19 billion dollars. At the time, WhatsApp had about 50 employees.

Brian Clark: That’s the size of my company. I’m feeling a little inadequate at the moment, but it’s amazing because 250 million $1 subscriptions, is still $250 million dollars. Did Facebook end up killing the dollar subscription?

John Warrillow: To my knowledge, they have. They certainly said that that was part of their intent at the time.

Brian Clark: That means the original deal — Facebook is great at this — is going to be killed because they’re going to pollute it with ads.

John Warrillow: Right. Yeah, it wouldn’t be surprising. I haven’t followed the latest implementation.

Brian Clark: I don’t use it, so I don’t know. Anyway, still a fascinating story. The network model is intriguing. I think it’s the trickiest of the three that we’re talking about, but it’s always fodder for creativity to start thinking about these models.

John Warrillow: That’s what we try to do in the book, Brian. I say this in the section. I lay out these nine models, and I say, “Do me one favor. As you read these, don’t put your feet up and say, or put your hands up and say, ‘This would never work in my industry.’”

My hope is that when people read them, it’s go with an open mind, and they’re saying, “Well, what could I steal from this guy in this industry and apply, be the first to apply it to my business or my industry.” I think with that open mind, you can steal ideas and be the first to innovate in a different industry.

Brian Clark: Absolutely. That works almost for any business model. I love the stories of how Henry Ford created the auto assembly line by visiting a Chicago meatpacking plant. It’s always what the other person is doing in a non-competitive industry that sparks the most creative and innovative ideas.

John Warrillow: I’d never heard that example. That’s great.

Brian Clark: Oh, it’s a great one. There’s another one about the printing press was actually inspired by the grape press for creating wine. It’s always the weirdest place. I always tell people, “Go, get outside of your little world, and you’ll get a better idea than just staying inside the box,” to use a cliché.

John Warrillow: Yeah, well-said.

Brian Clark: Few tips here. I don’t want to keep you too long, but I’m having a lot of fun because this is one of my favorite topics.

John Warrillow: That’s great.

The Psychology of Selling a Recurring Subscription

Brian Clark: ‘Psychology Is Selling a Subscription’ is an entire chapter in the book. You also have some very useful chapters in the book about the math that you have to do to make it viable, so obviously, people, pick up the book. It’s a bargain.

Let’s talk a little bit about this. I love how you open the chapter with, “Selling a recurring subscription is different than selling a stick of deodorant,” which I thought was the understatement of the year, if not the decade. Let’s talk a little bit about it.

What are the primary considerations that you have to take into account when you’re trying to get a person to say, “Yes, it’s not only worth it for me to open my wallet, but for me to be charged on a periodic basis.”

John Warrillow: Think of it as the difference between a one-night stand and a marriage. One-night stand, both consensual parties go off and have a good time for an evening. Neither party is committed to the other and both can go their separate ways at the end of it, whereas a marriage arguably has a lot bigger benefits, a bigger value proposition for both parties over the lifetime — but it takes a bigger commitment.

A subscription is akin to a marriage. You’ve got to build trust and make a case that you’re going to look out for that person’s best interests. Unfortunately, I think, we’re getting a bit of subscription fatigue setting into the market, where all of us look down our credit statements now — I don’t know about you, but when I look down my credit card statement, instead of seeing my two or three lumpy purchases, I see 50 $10-, $20-, $40-a-month charges now from Netflix, Salesforce.com, and all the other folks that we subscribe to in our business.

How to Overcome Subscription Credit Card Fatigue

John Warrillow: The credit card statement is causing a bit of subscription fatigue, which increases the need to overcome this fatigue. One of the strategies I talk about is the psychology of selling a subscription. One of the strategies people should think about is thinking 10X versus 10 percent. Nobody is going to subscribe to what you do by offering a 10 percent discount.

I was having this conversation with a dentist the other day. I was speaking, and a dentist come up to me and said, “Well, how does this work in dentistry? Could I have people subscribe to dental cleaning?” I was like, “Yeah, absolutely you could.” So he’s like, “Well, maybe I could give them 5 or 10 percent off.” I stopped him. I said, “Nobody’s going to subscribe for cleaning just to save 10 percent. What you’ve got to imagine is, ‘How do I make this value proposition 10 times better than just buying on a one-off basis?’”

At New Masters Academy we were talking about earlier, for $30 a month, you can get access to a library of content, which each one of those courses might be $600 or $800 at a community college. There’s a 10X value proposition. You get Netflix, you could make a really strong argument that Netflix is a 10X value proposition. For $10 a month, you’re getting access to hundreds of thousands of titles. So think 10X versus 10 percent.

Brian Clark: Yeah, and I think it also goes back — because you’re right — about credit card fatigue. Now, in my business, I don’t think twice about it because the value is evident. Can I do without this and still deliver the same experience? No, I can’t. Okay, it’s good.

On the consumer side, Spotify, Netflix, I’m an entertainment junkie when I have the time, so those are definitely worth it to me to have access to pretty much any song or any movie that I’m really looking for, but the more superfluous stuff is where people might get into danger with churn and things like that.

John Warrillow: You’re absolutely right. If you look at the churn rates of B2B software, business-to-business software, where it’s mission critical, and particularly industry-specific software, the churn rates are less than one percent a year. They’re infinitesimal, which drives the huge multiples you’re seeing for those industry-specific recurring revenue businesses.

Whereas, I think you’re absolutely right. Some of the more consumer-oriented, take it or leave, discretionary, those are the ones where you’re seeing lots of very high churn rates. Again, speaking to the importance of sticking, if you can, into a business-to-business model where you’re going to get lower natural churn rates.

Brian Clark: Yeah, absolutely. Okay, value, obviously. Any language or copy tips? We’ve got a lot of copywriting people who listen. They’ll be interested in what are some of the points that you really have to get across to get people to rationalize and improve the purchase. You start with the emotional response, and then you got to justify it logically.

Copywriting Tips for Selling Recurring Subscriptions

John Warrillow: Right. Like any good copywriting, you’ve definitely got to make both a very rational, but also an emotional connection. On the rational side, ironically, Microsoft’s doing a pretty good job with Office 365. One of the rational value propositions is, “Look, when you subscribe, unlike when you install a set of CDs on a computer, you’re instantly, the moment you install them, you’re susceptible to viruses. Unlike that situation, with our software, as a subscriber, you will get instant patches and instant downloads for virus protection.” That instantaneous value proposition is always on.

Words like ‘instant access’ and ‘always on,’ and those sorts of words that imply a real-time connection — ‘On-demand,’ ‘as you need it’ — are all words that connect for sure. The emotional side of it is painting the picture of what it means to be a subscriber.

At BarkBox, I mentioned them earlier, they’ve got two, last time I checked, full-time employees whose only job is to drop happiness bombs on their subscribers. A ‘happiness bomb’ is when they send a spontaneous gift to a subscriber who has had a bad situation. Usually, it’s a dog owner who’s had a dog who’s gotten sick, and so they send a spontaneous gift. Now, why would they hire two full-time people to do that? Because that breeds a sense of spontaneity and romance into the relationship, which is what drives the lower churn.

Brian Clark: That’s brilliant. I love it. In the post-Zappo’s world, delighting people is what you have to strive for, not just adequately keeping your promise. That’s a challenge. That’s a great example. I like the Microsoft example, too. We found, from our standpoint with the Rainmaker Platform compared to WordPress, the fact that we update, manage, security, all of that was more of a selling point than we originally thought at the beginning. You just have to look where the pain is and adequately communicate that.

John Warrillow: Absolutely.

Brian Clark: All right, people. I highly recommend The Automatic Customer. It’s very concrete, yet I consider it an idea generation book like John mentioned. “How do I take bits from here and bits from there and create something new?” It’s not creativity that comes from staring out the window. It’s from observing what others are doing and then seeing the connection with what you’re already doing.

John, I’d like to thank you for joining us today. If I might be so bold, I’d love to have you back as a co-host from time to time, if you’re interested.

John Warrillow: Yeah, I’d love to do that, Brian, any time.

Brian Clark: Awesome. All right, everyone, take care. We will be back next week with more. As always, if you can find the time to head over to iTunes and leave a rating and review for us, I would greatly appreciate it. It definitely helps.

In any event, I will be back next week with more. Take care, everyone.

The Transcript

Two Components of the Perfect Online Business Model

Voiceover: This is Rainmaker FM, the digital marketing podcast network. It’s built on the Rainmaker Platform, which empowers you to build your own digital marketing and sales platform. Start your free, 14-day trial at RainmakerPlatform.com.

Jerod Morris: I’m recording as well.

Brian Clark: Right, Jerod’s got it because I can’t get out from under this towel. That’s staying in.

Jerod Morris: I’m multi-tasking under a blanket and recording.

Brian Clark: I’m in a closet. I’m under a towel held up by a robot piece of bound material art.

Jerod Morris: There is no glamour in podcasting.

Robert Bruce: Wait a minute. I thought this was a phone call. We’re recording this?

Jerod Morris: I ve been recording.

Robert Bruce: You re recording? I retired two episodes ago. And now you drag me back in.

Brian Clark: Nice work.

Robert Bruce: This is ridiculous.

Brian Clark: I knew you couldn’t stay away.

Robert Bruce: Oh I’m staying away. I’m here for, let’s see, 20 minutes. And then I’m retiring again.

Brian Clark: Which means 45.

Robert Bruce: Yeah, if I know anything about you.

Brian Clark: You never ever, ever accurately predicted the length of the podcast.

Robert Bruce: Right, right. Jerod’s here with us too, right?

Jerod Morris: I am. I’m here.

Brian Clark: All right. So this is what I’ve resorted to only one week into my revolving co-host thing. We make Robert come back and the drive poor Jerod in as well.

Robert Bruce: Yeah, nice work there.

Brian Clark: Whatever it takes, you know. You leave me on my own — I really can’t be choosy.

Robert Bruce: Brian, if you could have any business/revenue model going in the world, what would it be?

Brian Clark: The one I have.

Robert Bruce: And?

Brian Clark: Oh, would you like me to elaborate?

Robert Bruce: Maybe, since this is a podcast, that might be — yeah, please do.

Brian Clark: I would say, sitting here in 2015, that a recurring business model selling some form of digital product or service is the Holy Grail. Now, I’m not the only one who feels that way. I’ve spent the last six weeks talking to various people with large amounts of capital who don’t even want to hear about something that’s not a recurring subscription model. Which is odd, because that’s not — think about the history of business: someone has something, you’ve got some money, you give them the money, they give you the thing.

All of a sudden, that is completely unacceptable. Even though that’s still the vast majority of business as it’s transacted today. But that’s what people are obsessed with. Because recurring revenue is so much more stable. It’s predictable. You can extrapolate into the future. You’re not hunting and gathering constantly each month just to try to meet or exceed where you are at.

But think about it, this wasn’t a thing. Now we all pay for Netflix recurring. And maybe you’re a member of Dollar Shave Club and you get your razors that way because you’re too lazy to go to the store. What do you think about this?

Because when I was a kid utilities were the big recurring things. If you didn’t pay your water bill every month, you didn’t have water. I think the biggest shake-up in my childhood in my childhood years in this regard was cable TV. Not only did you go from paying for something that was free, but you paid for it every month or you didn’t get your MTV.

Robert Bruce: Jerod, I know you’re only 19 years old. We were talking earlier today about the Columbia House CD subscription business.

Brian Clark: Jerod, do you remember that? You know, when you were four?

Jerod Morris: I do actually. Yes, I do remember that.

Brian Clark: That was the irresistible offer, right?

Robert Bruce: It really was. That big fat catalogue —

Jerod Morris: It was like 10 CDs for a cent.

Brian Clark: Or 10 CDs for a penny. And this was pre-internet, so you had to tape a penny to a cardboard thing, find a stamp, drop it in the mail and you were never more excited than that. Because you were just cleaning up on Columbia House. Of course, that’s not how it turned out.

Robert Bruce: You were too young to read the fine print and the 25-page —

Brian Clark: Well, no, I knew the deal. What I was not old enough to have a feel for was my own lack of follow through. So you were committed to buy x amount of CDs in the future and I’m a music junkie so “Hey, no problem.” But then they send you that card in the mail every month and you had to open it up and look at it and see that it was Debbie Gibson and say, “No, hell no,” find a stamp and send it back.

Robert Bruce: It’s all right, you got the Debbie Gibson, it’s fine.

Brian Clark: That’s later. If you dig through my CD collection — “What’s with the Abba and Debbie Gibson,” and I’m like, “I didn’t return the card, okay?” And you know, contractually, if you didn’t return the card and it showed up, you had to pay for it. Now I’m sure there were people, just like there are now, who would send it back anyway. But that’s even more work than sending back a postcard.

But that wasn’t recurring revenue necessarily, it was a recurring obligation. Even then, the whole idea we kind of thought of as somewhat shady. It just wasn’t the norm. And now that’s the first thing — whether it be a fellow entrepreneur, a VC, or a private equity person they’re like, “Recurring revenue? No? I don’t want to talk to you.” As if there aren’t other valid business models. But I do have to say, it is one half of the Holy Grail of business models.

Robert Bruce: So back then — Columbia House, you’ve also got newspaper subscriptions, you’ve got magazine subscriptions, cable — it was not a prevalent model. Then we move in to the early days of the internet where it’s easier and easier to distribute digital goods, namely like ebooks.

The Legitimization of Subscription Revenue Models

Brian Clark: Yeah. So that’s the second half of digital, but before we leave the recurring thing, it really was the internet that exploded the concept. All of the sudden the precursor of what we now call the sharing economy was kind of predicted. I read this great book called “The Age of Access” that totally called all of this. The end of ownership and the rise of the Age of Access which you would pay for one-off or on a subscription basis. And now we have Uber, and we’ve got bike sharing and all of these things the kids are into these days. I still like to own my car.

Robert Bruce: It’s a pretty natural shift because you think back to the Columbia House, we had to have a lot more patience back then. We were willing to wait on the mail and send them back postcards. With the internet, it’s like our expectations have shifted. So we want access and we want convenience, which is why we’re willing, I think even as consumers to pay on this more recurring model. Because I want stuff when I want it and I want exactly what I want. So the trade-off is instead of paying one off, you’ve got to pay on a recurring basis so it’s there when you need it because you can’t predict when you’re going to want it.

Brian Clark: But think about Columbia House. It was such a fantastic deal that I got 10 free CDs so I could buy bad CDs on accident. Now, for ten bucks a month, I get pretty much every song in the world on Spotify and yet it’s still hard for someone my age to just … The first time I think, “Hey, I used to have that CD or LP or 8-track.” Robert, how’s the extensive 8-track collection of yours going?

Robert Bruce: It’s somewhere in a box in some storage unit.

Brian Clark: I still have that. I shifted, obviously, to iTunes early on. But my first impulse still, and I’ve done this many times, is I’ll say, “Man, I haven’t heard that Ramones album in forever,” and I go buy it. And then I’m like, “That’s on Spotify, oh my God.” It’s hard to shift, but the millenials in our company are like, “What are you doing?”

Jerod Morris: So both of you are still buying files? For music?

Brian Clark: I’m weaning myself of it. It’s just tricky because that’s your impulse that you’ve always — and I buy a lot of music, I buy a lot of books. I can’t train my brain. It’s not like I’m not paying for Spotify, I am. I just forget.

Robert Bruce: Jerod, are you buying files?

Jerod Morris: No, I stopped a couple of years ago and it just became all on demand. In fact, I had a really extensive collection of songs on iTunes and I was recently cleaning up my computer because I had memory issues and that was one of the first places I went to save room. I just said, “Well I paid for these, but I don’t really need because I don’t really come here and — ”

Brian Clark: You deleted your music? I could not do.

Jerod Morris: Yeah.

Brian Clark: I just buy another hard drive.

Jerod Morris: That was another option that I might have considered, but I figured I’m never in there listening though.

Brian Clark: So did you miss anything? Did you find everything on Spotify then?

Jerod Morris: Yeah. I mean, for the most part. I’ve never —

Brian Clark: Yeah there’s only a few, like AC/DC, and even I think they gave in. There’s a few holdouts and they’re all kind of coming in. But the internet is made for recurring. I can remember, when I started my real estate business, I was paying recurring for my email service. Email software as a service — those were the earliest models of that, at least at our level. I remember I had to pay a monthly subscription to get IDX which is how you display MLS listings on a website.

Businesses today are built around APIs. Mine was built around these recurring subscriptions that were really — even if it was a hundred bucks a month, that was nothing compared to the revenue that you could generate from those tools. It’s really kind of extrapolated from there.

Anyway, long and short, before we shift over to the second part. If you can devise a recurring revenue model, whether it be a membership site of some sort, whether it be some other kind of innovative subscription — all these things now that you can buy in a box. What is up with that? “You can’t dress yourself because you’re a man so here’s an outfit in a box,” and they send you a new one every month.

Robert Bruce: But that’s it. You take the thinking out of the equation. Same thing with razors.

Brian Clark: It is convenient..

Robert Bruce: Who wants to go to the store and buy razors? Whatever, it’s not that big a deal, but —

Brian Clark: You have wine clubs, where you subscribe —

Robert Bruce: — coffee. Well now Amazon has developed — I don’t know if it’s even still going, but a few weeks ago they announced that push button thing. A literal — they’re giving you a button —

Brian Clark: I made three purchases in the last week where that was an option. They are things that you run out of — whether it be facial cleanser or shaving cream or whatever. And there was that, “Every three months,” you get to choose a recurring interval. I just didn’t do it because that’s just another thing I’m going to have to adapt to, but I guess it makes sense. I even bought oil changes on subscription, basically. Like you buy a certain amount of oil changes at a bulk rate. Does that count?

Robert Bruce: Yeah.

Digital Goods: from Dubious to In-demand

Brian Clark: All right, so we’re talking about a bunch — from Columbia House to ham in a box — we’re talking about physical stuff, and that’s kind of a hassle. Because, again, if I wouldn’t return a Debbie Gibson CD, then I’m not the type who wants to pack boxes. Of course, they have fulfillment services and what-not, but I have to say that the fact that we also deal in end-to-end digital products and services, that to me is the second part of the ultimate business.

Robert Bruce: So what does that look like then? What types of things are we talking about? We talked ham in a box and all that. What types of things are we looking at on the digital side?

Brian Clark: Ebooks, online courses, software as a service, downloadable software like the Genesis Framework plus the themes that work with it. Even our hosting division is an end-to-end virtual transaction. Nothing shows up at your house. No one comes by. There’s no physical aspect of it because it’s a web service. But those are the big ones. It’s anything that can be digitized and/or fulfilled online. Reflecting back on all of our various lines of business, they’re all digital.

So there’s two things that have happened that I think a lot of younger people may not really appreciate because they just live this way. They’re digital natives. And we were talking about this earlier, that all of us on this podcast are digital natives even though we’re of another generation, but because we were weirdos. In the late 90s — early 2000s when I’m online all the time, do you think my friends thought I was cool? No, they thought I was a crazy person. But I’m laughing at them now.

Here’s what’s changed. I’ve been talking over the last few episodes about how online education has gone from this thing that was an outlier, not really trusted and greeted with skepticism, and now it’s a $15 trillion a year — trillion, that’s not much of a jump from billion! You know, when you’re at that level —

Robert Bruce: Hyperbole …

Brian Clark: But still, $15 billion is quite impressive. It’s a mainstream thing. I think we’ve hammered that point home. But so are ebooks. I mean, back in the day, an ebook was a shoddy .pdf that some internet marketer tried to scam you with. That’s a generalization, but that was the perception.

Now, ebooks are a huge publishing industry sector that’s growing much faster than the traditional book industry. We’ve got dedicated file formats. The Kindle Store on Amazon is just killing it. You’ve got entire legions of authorpreneurs. So again, that’s a legitimate thing that used to be illegitimate, kind of like online courses. There’s been downloadable software forever, but it was a highly geeky thing about 10 years ago. It was only the devs, and the coders, and the hardcore internet people that would dare whip out a credit card and download a piece of software that didn’t come on a shiny little disc, or a floppy disc before that.

That’s another thing. What about the attitudes about using credit cards online? I don’t think my parents will do it — they’re in their seventies. And yet, we were talking to our resident millennial, Caroline Early earlier — our associate producer, “Hi Caroline” — and they never think about it. They are the true digital natives in that they don’t remember pre-internet. Do you guys have any reservation whatsoever about using a credit card online?

Jerod Morris: Slightly, but not really. Kind of like we were talking about earlier, not like on Apple, Amazon, the big sites. No, none at all. But then, if it’s on an individual site it really just depends on how they’ve built the trust within the design and how much time I’ve spent with them. If it’s my first time there, the design looks a little shaky, I might feel a little shaky about it. But for the most part, no.

Robert Bruce: Yeah I’m the same. And Brian you brought up a good point. If I find something I want, what I’ll do is usually go try to find it on Amazon or iTunes or whatever —

Brian Clark: Yeah, absolutely. This is why another rule to take away here is if you are selling a commodity product that can be found elsewhere … So let me give you an example. I almost feel bad about this. There’s this doctor, he’s an MD. He’s a content marketer. He gives fantastic non-scammy advice, solid stuff. I was doing research on a certain supplement, and there was a link to buy the product that I wanted through his online store.

Now, I should be showing appreciation to him for educating me, especially given the business I’m in. But it was a supplement that can be found anywhere, and it was on Amazon. And this is the truth — because I can hit one click, and my credit card’s already there and, my shipping and billing information’s already there. I’m just lazy. That’s terrible, but I am. So we never sell anything that can be bought exactly the same elsewhere. Unique products and services. Amazon can’t take that away from you.

Jerod Morris: And as to quote Chris Garrett, “Whoever gets the credit card stored wins.”

Brian Clark: That’s true, that’s absolutely true. I think we’ll see — even on our end on the Rainmaker Platform — everything from social logins to payment options. You have to work to streamline that on behalf of you guys, our customers. So that, as long as you’re satisfying the other criteria of selling unique products and services, the barrier to transaction is as low as possible.

Robert Bruce: One thing — it’s a side note, and it’s probably a whole other episode — but in the future too, as we move towards things like Apple Pay where it’s, as far as we know, secure place where your … I have not jumped into this by the way, because I m kind of a freak.

Brian Clark: I use it for Whole Foods all the time, I love it. It’s weird, but it’s cool when you get to do it.

Robert Bruce: Your payment, essentially, at least in the perception of it, is in one place, right? Yes, you’re being charged by Whole Foods, you’re being charged by Starbucks or wherever you go. But the actual vehicle for the payment is in just one place. Much like swiping a card, it doesn’t take that out of it. But if, for instance, your doctor that you were getting this information from in the future wrapped his product or payment system in with Apple Pay, you might not have cared. You probably would have just done it right there.

Brian Clark: Oh of course. It wasn’t that I didn’t trust him, and it wasn’t that I didn’t want to buy from him because of course I would. It’s just that friction. And I think you’re right. Obviously Apple Pay at this point is a point of sale physical world type thing. But the digital solution for that should be certainly doable. With physical goods at Amazon, I still have to enter — I would imagine the payment technology would remove the billing address issue because they were being coded somehow in whatever it is.

Robert Bruce: Right, in that one place.

Brian Clark: So then it would come down to just, am I too lazy to enter my actual shipping address? It’s rough out there. I’m going back to the rule, which is “Don’t sell.” That’s the whole thing with advertising, AdWords, whatever. When you’re selling something that someone else is selling, it becomes a bidding war on two bad ends. Bid prices go up to AdWords, Google’s happy, and prices go down. I never want to be in that position.

I guess the whole point of all this is that, through the progression of time, things that were outliers like subscription business models and digital products and services, which were regarded as a little less trustworthy, are now actually the most desirable. That’s what people want.

Robert Bruce: Yeah it’s interesting that both sides want it. The bankers, as you mentioned earlier also —

Why You Should Aim for a Recurring Digital Model

Brian Clark: Yeah, that’s good business! If what people want is a subscription service that makes their lives easier, that gives you that amazing stability of income where your recurring revenue comes in every month. You get new customers. Some people leave, obviously, but you’re never just absolutely desolate the next month. So with that on one hand, and then of course we want instant gratification as we move more and more to a digital world.

I mean people are buying video game swords and gold. There are people getting rich selling digital goods inside apps and video games. What about Bitcoin? That’s a whole other can of worms that’s going to be something we all deal with. Can you poke any holes in my Holy Grail of business models?

Robert Bruce: Well I’m just looking forward to Bitcoin because that’s when I can truly disappear.

Brian Clark: Yeah, you keep talking about this and yet here you are.

Robert Bruce: I know, I know. I need a couple of years.

Brian Clark: You could be calling in from the Philippines, we don’t know.

Robert Bruce: You don’t know, you don’t —

Brian Clark: All right guys, thank you for filling the narrow seat of my revolving co-host. Mr. Bruce, it’s good to hear your voice again. I will trick you into coming on the show again despite your protestations.

Robert Bruce: Thank you, thank you for that.

Brian Clark: You’re Welcome. Jerod, you’re the man.

Jerod Morris: Thank you.

Brian Clark: Even though you’re only 19.

Jerod Morris: And even though it took two of us to not even equal one Sonia.

Brian Clark: Seriously, it’s a shame.

Robert Bruce: She’s smooth. She really is smooth isn’t she?

Brian Clark: Yeah, that’s why she always gets her way. Have you noticed? All right. That’s it for this week, people. Thank you as always for tuning in. If you’re digging what we’re doing here at New Rainmaker, a review or rating or both over at iTunes is much appreciated. Otherwise, we’ll be back next week. We’re going to talk more and more about subscription business models. We’re going to talk more and more about digital goods and services.

We’ve talked about it before, remember Robert? We did a couple of episodes on the whole digital commerce thing. It’s just kind of amazing to me reflect back on how things used to be — and I’m not trying to be nostalgic — I think this is an indication why getting in on something maybe before it’s a little too soon, or it is a little too soon, and yet you have a feeling. You can see that’s the direction things are going. Keep the faith. Stick with it. Build your audience. Do good things. Develop trust. And it could turn out to be a hugely winning situation for you. We’ll talk next week. Take care everyone.

Robert Bruce: Any of you are still listening here? This is Robert Bruce. I’m sneaking back on. Two new shows on the Rainmaker.FM podcast network. Check out MissingLink.FM, that’s Sean Jackson, our CFO. Brian, do you have any comments on Missing Link? I don’t know if you’ve gotten the chance to hear the first episode yet.

Brian Clark: Yeah, I did. And I called Sean today, no lie, and I said, “Sean, you’ve got quite the attitude on that show.” I think he’s expecting me to tell him to tone it down and I’m like, “No it’s okay, I like it because now the rest of the world knows what a jerk you are too.”

Robert Bruce: That’s MissingLink.fm, everybody. The other one we mentioned earlier: Jim Kukral is doing authorpreneur.fm. If you have a book, books, or want to write a book in the future. This is not about making direct revenue with your book — there is some of that in there — it’s more about what the book can do for your business as pure marketing and such.

Brian Clark: The ultimate business card, right?

Robert Bruce: The ultimate business card, as he puts it.

Brian Clark: Which I refuse to write.

Robert Bruce: Yeah, still. After all these years, nothing.

Brian Clark: At this point what am I going to do, backtrack?

Robert Bruce: That is a good point. One last note from Jerod, you got what from Sean on Missing Link?

Jerod Morris: Oh, a text message.

Robert Bruce: Sean’s shaking stuff up over there.

Brian Clark: He is. He explained how this works and it’s pretty cool. I’m not a big texter myself, but if we’re talking about a mobile world, what’s more urgent to you, an email or a text? I don’t know. I do know that because I don’t text a huge amount that I’ll notice and look at a text immediately, because it’s probably my wife with shopping instructions.

Robert Bruce: Right. Did you feel that way with Sean’s text coming up there?

Jerod Morris: Yeah. I checked it immediately. We were doing this so I couldn’t listen to the episode right away, but yeah, there’s an urgency to it. I’m the same way.

Brian Clark: It’s interesting. We are, as always, experimenting on ourselves first. Figuring things out. I’m not advocating that anyone leave email anytime soon. It’s still the transaction engine. It is where we expect for business to be conducted. This is not a transactional text, it’s a “Send a text to a certain number in order to receive a link to a private group that is made up of all my linked Missing Link listeners.” So I’ve got to give it to Sean. And I’m just joking about him, he’s a wonderful guy. He’s just got some attitude worked in. He’s having way more fun than he should.

Robert Bruce: He’s a classic AM radio host —

Brian Clark: He’s Rush Limbaugh.

Robert Bruce: He is Rush Limbaugh. That’s what it’s going to break out to, and it’s perfect. All right, sorry for hijacking things here. You can find all of our shows of course at rainmaker.fm and I’m going to shut up now.

The Transcript

Is Creating Online Training Programs a Viable Business Model?

Voiceover: This is Rainmaker.FM, the digital marketing podcast network. It’s built on the Rainmaker Platform, which empowers you to build your own digital marketing and sales platform. Start your free 14-day trial at Rainmaker.FM/Platform.

Brian Clark: Hey, everyone. Welcome to the show. I am Brian Clark, founder and CEO of Copyblogger Media. This week, instead of flying solo, I’ve decided to start at least a one-week tradition of having a rotating co-host. Today’s victim is Sonia Simone, chief content officer of Copyblogger Media, longtime co-conspirator way before we actually formed the company in 2010 — going back to Copyblogger, Teaching Sells, and all of that good stuff. Sonia, how are you doing today?

Sonia Simone: I am fantastic. Thank you for asking.

Brian Clark: It is wonderful to hear your velvety voice because you also have a great voice. That guy who also has a great voice

Sonia Simone: That traitor.

Brian Clark: Yeah. I don’t know how many weeks I’m going to keep talking about him ditching me, but it could be quite a few.

Sonia Simone: I think you could milk it. I think you are not even close to saturating that.

Brian Clark: Yeah, I feel that way, too.

Sonia Simone: Yeah.

Brian Clark: It’s evergreen really.

Sonia Simone: It is.

Brian Clark: All right, so as you know, your Copyblogger post today linked to my last podcast. I was honored.

Sonia Simone: It did indeed. Yes, it did.

The Prediction about Online Education That Came True

Brian Clark: Online courses, online education and training — obviously, we always love to tell the story that how we met was you were one of the first people with your credit card in hand saying, “Go ahead and sell me something already,” back in 2007.

Sonia Simone: That’s right.

Brian Clark: That was Teaching Sells, our instructional design meets direct marketing uber course. Do you remember that it was actually that course where someone gave us a review and they said it was ‘Internet marketing for smart people.’

Sonia Simone: I do.

Brian Clark: Not as a compliment, but we took it as a compliment because we were like “Yeah! Smart people only, please.”

Sonia Simone: You know what? You’re right actually.

Brian Clark: Instead of feeling shame and dumbing it down, we actually co-opted that, created another course called Internet Marketing for Smart People, which I thought was so us.

Sonia Simone: It is us. It’s a little offensive, but not very offensive — snarky.

Brian Clark: If you’re playing the populous card, like a lot of the Internet marketing crowd does, because, of course, they’re going, “You can do it.”

Sonia Simone: Right, and we’re like, “You can do it if you’re smart.”

Brian Clark: You ‘can’ do it — just like you can graduate from college — but maybe not if you can’t. It’s just amazing to revisit slightly to see the mainstreaming of this. I don’t like to sit there and say, “Hey, I called it.”

Sonia Simone: You did, though. You did call it, actually.

Brian Clark: It’s still one of those things where you’re right and you’re like, “Wow, I didn’t know I was going to be this right.”

Sonia Simone: I know. It’s true.

Brian Clark: It makes sense because on-demand — reacting to trends, to market, fluctuations, to disruptions — everything’s moving so quickly. I don’t think academia could keep up 10 years ago, much less now. That’s what’s really driving this, and it’s only going to accelerate. The whole concept in that Fast Company article — I don’t really like the terminology. I think it’s pretty weak. I think this futurist guy is dead on about this is a real gig. It is now, but only more so by the time we get to say 2020, 2025. The whole concept of the ‘freelance professor,’ how does that strike you?

Sonia Simone: I don’t love ‘freelance professor’ for a lot of reasons. I like your old term ‘entreproducer’ because I think you want to not forget that this is about a business. It is about teaching, but absolutely, equally, it is about business and about producing a result somebody else wants. Also, maybe because it’s just because too many people called me ‘Little Professor’ when I was a child. I have trauma from that, so that could be the source.

Brian Clark: Is that why you call me ‘Professor Clark’ when I get too esoteric?

Sonia Simone: It is. That’s right.

Brian Clark: That’s not a compliment, either — just in case there’s any confusion.

Sonia Simone: No, you have my story. That’s my story.

Brian Clark: Yeah, it is a business, and I did like that he said you need course materials, a plan, and a marketing plan. That’s what really set me off on this. You’re not going to get away from understanding the marketing component of it. The big thing about Teaching Sells, which was amazing to me when I was creating it, was that the intersection of direct marketing principles — which everything you sell online is direct marketing. Don’t think about junk mail. That’s not what it means. It means direct to the consumer, or customer, or client.

The principles, especially of copywriting, are applied in instructional design because that’s what gets adult learners to pay attention, to retain information, to stick with it — all of these things. Even if you say, “I don’t want to be a marketer,” or “I don’t care about selling,” creating great training is a component of exactly the same elements of retaining an audience and their attention in order to actually get some value out of it. It really is doing a great job of teaching people that builds your business in the long-term.

Sonia Simone: Yeah, most, maybe all smart marketers and salespeople have known for a long, long time, well over 100 years, that in order to have something that is marketable or sellable, you need to have a transformation that you can offer the person you’re selling to, while teaching has the transformation baked into it. The whole point of teaching is to create a transformation. That’s one of the reasons it’s such a strong model. It’s very easy to explain to somebody, “I am going to teach you to do something you want to know how to do.”

Brian Clark: Also something we talk about a lot, ‘baking in’ — it’s not just knowledge. It’s the benefits.

Sonia Simone: The benefits of knowledge, yeah.

Brian Clark: Guess what? Those are the same benefits that go on a sales page.

Sonia Simone: Yeah.

Brian Clark: You really can’t separate the two. I always was proud of Teaching Sells and how well it integrated it together because humans just naturally compartmentalize things. “This is that, and this is the other.” No, it’s really one thing, and it’s all related anyway.

Sonia Simone: Yeah.

Brian Clark: You and I have created many courses together. I still remember that time we created that freelance X Factor course, and I had to rent a room in Durango, Colorado, because I was there for the summer. My kids were little maniacs running around the place we actually were staying in, so in order to have quiet

Sonia Simone: You were in a closet in an office building or something crazy.

Brian Clark: I know. But, hey, we got it done.

Sonia Simone: Yeah, that was a good course.

Sonia’s Move from Freelance Copywriter to Course Creator

Brian Clark: Many years of education courses and all that. I want to talk to you a little bit, because you created in the time that we’ve known each other — this was before Copyblogger Media, though — you created your own course called Remarkable Marketing Blueprint. Is that correct?

Sonia Simone: That’s right.

Brian Clark: Oh I got it. You did that all by yourself. I remember you just went off, and then a long time later it was done.

Sonia Simone: I did, yes.

Brian Clark: Talk about that process as tackling what was a really big project. That was a good-sized course.

Sonia Simone: It was. What I wanted to do when I left the corporate world — and I have talked to other places about my serious post-corporate traumatic syndrome — I left the corporate world. I needed to make money. My husband stays at home full-time with my son, so it was all on me. My idea was I was going to be a freelance writer. That was okay.

I did moderately well at being a freelance writer, but I hated the ‘you don’t kill, you don’t eat’ mentality. It was not emotionally a great fit for me where I had to close all these new clients, and I was always prospecting. It wasn’t well-suited to me, so I did take Teaching Sells. I was one of those people who messes up your server by refreshing the order page two times a minute trying to wait for it to open — don’t do that, guys. It’s annoying.

I put this course together to teach people some of the things that I had, had to teach myself in order to be a good marketing writer — how to market stuff, how to sell things if you’re not the $10 million marketing budget company. It was revolutionary for me. It completely transformed who I was as an independent professional. Instead of constantly prospecting and talking to people who weren’t ready to move forward and closing people and all this stuff, I said, “Here’s a thing. Here’s what it will do for you. Here’s what to do next.” A bunch of people bought it, and then they gave me whatever it was, $27 a month.

It was a great deal. It really changed my business. It really changed my relationship with my customers. They created this whole identity. They called themselves the ‘Remarkables,’ and the first group were the ‘Remarkable and Originals.’ That was an identity that they had that many of them carry.

There will be people listening to this podcast who’ll say, “I’m a Remarkable.” It was really a great experience professionally and personally in terms of satisfaction, in terms of my ability to help people. It was just cool, and fun, and awesome.

Brian Clark: I remember the community you built there

Sonia Simone: It was intense.

Brian Clark: was rapidly pro-Sonia.

Sonia Simone: As they should be.

Brian Clark: You have that effect on lots of people. You come across so nice, but behind the scenes

Sonia Simone: Brian knows how evil I really am, but I do get [inaudible 0:11:22] very nice.

Brian Clark: When Sonia goes on a rant, just duck. What was the hard part about it? Again, it seems to me the content was so right up your alley. Was producing it the biggest challenge?

Sonia Simone: Producing it was great. I had to get my act together, but that was fine. That was all good. The site was really tough. I’m still so grateful to this day for the wonderful developer who was able to help me out with it. But even so, I think it took us about two months to get the site together before I could make any money. I was spending money.

Brian Clark: This was WordPress plus plugins?

Sonia Simone: WordPress plus proprietary membership plugins was what this was.

Brian Clark: Yeah, we won’t name which one.

Sonia Simone: No, we won’t name. There were a couple at the time. They all had issues, and I encountered the issues. It took a long time to get it together. During that time, I was spending money developing the site, but I wasn’t getting any revenue. We had security issues. Some kind of creepy Russian hackers were putting porn into my member library. I don’t know why. To this day, I’m not sure why — “Why are you doing that?” — but they did. That was great. We were playing whack-a-mole with security.

It didn’t work the way I wanted it to work. There was a lot of manual work to make sure that, if people left the course, like stopped paying for it, that we would stop giving them access to it. Just things like that, that today we have some tools — you know, cough, Rainmaker Platform — that make that really easy. It was not easy.

Brian Clark: That’s such a familiar story. When it was just me and Tony — and then later you joined us with Teaching Sells — Tony was gluing together, duct taping. No one would ever tell me just how fragile these sites were. They looked pretty, but they were built out of all these different parts. Also, in the original version of Teaching Sells, remember how Tony had to try to teach people to build an LMS out of what was it, Joomla and Moodle?

Sonia Simone: Moodle, right.

Brian Clark: Later we could finally get it done with WordPress, pretty much with the stuff you use, but of course, there were issues. People were always asking us, “Oh my gosh, you’ve taught me things that I didn’t even imagine I could know about creating instructional content and about marketing it. Just give me the technology platform.”

Sonia Simone: Right.

Brian Clark: That’s going to take a while. In fact, it took, oh, I can’t even do the math, seven years.

Sonia Simone: Yeah. There have been platforms, and those platforms had issues because it’s hard. It turns out when we set out to build it, it’s like, “Oh, this is actually really hard.”

Brian Clark: It took a while. It either takes a ton of money or it takes time. We were bootstrapped, so it took some time. Anyway, I mentioned that last week. At least, at this point, Rainmaker takes care of those headaches, and now it’s become essentially a part of the Teaching Sells experience that we’ll be doing next month.

Sonia Simone: Yes.

Brian Clark: Anyway, I think one objection people have when they hear us talk about creating the marketing blueprint, or a Copyblogger course, or even the New Rainmaker training course that is a lead generator for Rainmaker.FM. Like, “Yeah, that’s fine. You’re selling courses, marketing about marketing, blogging about blogging, content marketing about ” — you know, very meta.

That is something we’ve been dealing with for a long time. Sometimes it’s frustrating to always feel you’re being self-referential, but the real opportunities, business is going to remain a very big on-demand training realm.

I remember back in 2007 when we talked about the three big areas. They were business, personal development, and technology. I think that remains the case today. There’s so many other topical areas that people are making not only money, but a living, a good living.

Sonia Simone: A good living, yeah.

Brian Clark: Yeah. You’re like the curator of online education and membership sites that shouldn’t work — or at least that they’re real topics for real people that don’t involve this meta aspect to it. Give us a few of your favorite examples.

The Improbable Sports Training Program That’s Killing It

Sonia Simone: One of my favorites, he was a member of one of our early communities, The Third Tribe. That was the first marketing thing he ever bought, so I claim all credit for his success. That’s not fair or reasonable. I’m just making a joke. His name is Will Hamilton, and he has a site called FuzzyYellowBalls.com.

The thing I love about this site is it was a long-time truism in direct response that you could sell all kinds of things to golfers, but there was no money in tennis. You could not do tennis education. You couldn’t do tennis direct response because tennis players didn’t spend money. Will’s doing unbelievable things with this site. It’s opened all kinds of doors. He makes a great living off this business.

Brian Clark: It’s always the one that I’m like really? Tennis?

Sonia Simone: Yeah. Since Will showed it could be done, I think that other people have come up as well in tennis, but really remarkable story with that.

Other Examples of ‘Non-Meta’ Training Programs

Sonia Simone: Another one was one of my Remarkables, a woman named Wardee Harmon. She put together a natural cooking site. She had a real interest in — very on-trend today, she was ahead of the curve at that time — organic food and respecting the dignity of the food.

Brian Clark: I wouldn’t be surprised if my wife was a member.

Sonia Simone: Yeah, and if she’s not, she should be because it is so up her alley. But she did this natural cooking class online, and we all thought, “Well that’s a good idea.” From the beginning, we were all a little startled at how well it did. People were waiting for it. She was an early presence, and she just destroyed it with that.

My friend Ruth heads an institute called the National Institute for the Clinical Application of Behavioral Medicine, so straight-up, hardcore Internet marketing, right? They do extremely well with courses, and Ruth — I know Ruth, she’s a friend of mine — has a very businesslike approach to teaching courses in behavioral medicine. She just did a course on meditation with Tara Brach, who’s a wonderful meditation practitioner.

They just do really, really well with these courses with a businesslike approach to teaching. It’s a combination, in their case, of professional development for therapists, but also, a lot of non-medical professionals like me will take these courses because we want to know more about trauma or the science of the brain or meditation.

Membership Sites for Kids? (It’s All About the Parents)

Sonia Simone: I’ll wrap up with one that my son encountered that was very cool, which is a company called Youth Digital. They teach kids my son’s age — my son’s almost 10 — how to code in Java in order to make Minecraft modifications.

Brian Clark: Yeah, my kids, I don’t know if it’s the same course, it may be. But both of my kids all of a sudden have figured out that you can make the stuff that is Minecraft.

Sonia Simone: Right.

Brian Clark: They’re just fascinated by it. It’s like Legos in digital world.

Sonia Simone: Yeah. That’s a real case where people would tell you, “Oh, you can’t make any money with Minecraft education because there’s so many YouTube videos.” These guys, I don’t have any connection to them other than my kid is a junky for this course. He can’t wait to get home and start learning Java, but it’s very well done. It’s done for kids. It’s got great sense of humor. It’s comprehensive. They have good support, and they’re just selling the heck out of this course. I think it’s $200 a pop for something for kids, so kids can play with a toy.

Brian Clark: It’s educational and that type of purchase — this is valid actually because learning to code is awesome — but we all bought Baby Einstein CDs to make us feel better about parking the kids somewhere. You’re selling to the parents.

Sonia Simone: Yes, exactly. You’re saying, “No, it’s a good thing that they spend all day every day on Minecraft. It’s education.”

Brian Clark: I will say that out of all the games my kids try to play, Minecraft is actually probably the best for them.

Sonia Simone: Yeah.

Brian Clark: I’m telling myself that story.

Sonia Simone: Yes, I am, too. I’m right there with you.

Brian Clark: Alright, I don’t know, Sonia. You being on here made this very easy. In fact, easier than Robert. Now I’m going to just change my story and say good riddance to Mr. Bruce. I may just hit up Sonia Simone. You’re like, “Wait, what?! You’re giving me more work to do?”

Sonia Simone: Bring it, bring it.

Brian Clark: We’ll see. If I can’t find other victims, though, you’re going to be my default.

Sonia Simone: I’ll be the default victim. That seems congruent with my general role in the company.

A Free Webinar for Creating Online Courses

Brian Clark: So you and Chris Garrett have a webinar coming up. Is that related to

Sonia Simone: Yeah, the webinar, it is an educational webinar designed to give you what you need to know to become a customer. I’m not going to hide that. That would be silly. It’s a webinar about the things that we have seen — Chris also was an early Teaching Sells customer — but we have been teaching people for quite a few years now how to do this.

It’s a webinar-based on some of the things we’ve seen people do that slow them down — so mistakes people make when they’re trying to build an online product or an online service. The things people do that make it very unlikely that they’re going to be able to have this popular, successful, easy, fun, sustainable business. We’re going to be talking about the mistakes people make when creating products online. It’s going to be, well, it’s coming up, so it’ll be June 16th at noon Eastern.

Brian Clark: Well, we’ve got still a couple of weeks, but we will put a link to that in the show notes, so you can sign up from there. That sounds pretty interesting because the webinar, of course, is going to give you a lot of high-value content with respect to things to avoid, especially if this is your first rodeo in this arena.

Sonia Simone: Right, right.

Brian Clark: Whether you decide to go with Teaching Sells or not, it’s going to be solid, but of course, I’m sure that the benefits of the whole course will be demonstrated at some point.

Sonia Simone: Exactly.

Brian Clark: All right, Sonia, thank you so much for coming. Enjoy the rest of your day, and to all of you out there, thanks for tuning in. If you have a chance to drop by iTunes and give me a review or a rating, you can even talk about how much cooler Sonia is than me. I will take it as long as it’s on this show. Thank you very much, Sonia.

Sonia Simone: Thanks. It was fun. Thank you.

The Transcript

The Transcript

Behind the Scenes: Authority Rainmaker, the Next Wave of Rainmaker.FM Shows, and the Departure of Robert Bruce

Voiceover: This is Rainmaker.FM, the digital marketing podcast network. It’s built on the Rainmaker Platform, which empowers you to build your own digital marketing and sales platform. Start your free 14-day trial at Rainmaker.FM/Platform.

Robert Bruce: Sometimes I think I’ve had it with this computer stuff.

Brian Clark: It’s going to make your job difficult to do.

Robert Bruce: I know. That is the only problem. I got an email from somebody this morning saying something. Then an hour and a half, two hours later, I got another email from this person saying, “I know you opened my email. Why haven’t you written back?”

Brian Clark: Seriously?

Robert Bruce: Yeah. It’s one of these tracking things. These little tracking dots that everybody uses now.

Brian Clark: That’s awful.

Robert Bruce: I’m sitting there thinking, “How, in what universe do you think that makes me want to email you back now?”

Brian Clark: Exactly.

Robert Bruce: Right? I don’t know.

Brian Clark: Do I know this person?

Robert Bruce: No. It was something else. Someday I am going to end up in the mountains of the Oregon Coast Range. Well, we can take it offline, but we need to figure out how to do that.

Brian Clark: Well, do they have Internet in the mountains?

Robert Bruce: I’m sure they do. I’m sure it’s expensive, but I’m sure they do.

A Look Back at Authority Rainmaker 2015

Brian Clark: I think it’s doable if that’s really what you want. You’re not worn out from sharing emcee duties from last week’s event are you?

Robert Bruce: Oh yes. I’m running on fumes.

Brian Clark: I’m a little, definitely felt good that Saturday morning. I woke up at 5 as usual. I’m like, “What are you doing? Go back to bed.” Next thing I knew, it was 9:45, which never happens. But I didn’t feel as bad as last year when I did it all myself, so thank you, Robert.

Robert Bruce: You’re welcome. It’s odd because it’s not like breaking rocks, obviously, but it’s the intensity of always waiting for the next thing. Wanting to do a good job, hoping you can pull it off, but you’re sitting back there waiting for your next queue, thinking about what you’re going to say — all of that stuff. Everybody is running around. It was fun.

I felt bad, though, because throughout on both days, I’d be running through the lobby or whatever and someone would stop me, and we’d get into a brief conversation. I was like, “I’m sorry. I got to go. Literally, I got to be backstage like right now, or somebody’s not going to get introduced.”

Hopefully, those of you who were in Denver, first of all, thank you for coming. Secondly, if I seemed rude — hopefully that was not the case — but I was being called backstage at all times for two days straight.

Brian Clark: You also were probably exhausted from the intensity of laughter after you watched Michael King try to slide across the stage in his socks and then wipe out — five seconds after I said, “Michael, don’t wipe out.”

Robert Bruce: Yeah, that was something. You called it.

Brian Clark: You got the video. It’s hilarious. “I got it, I got it. No problem.”

Robert Bruce: That’s the only reason I saw it. It was your video actually because I was coming on as he was actually doing it. I was in the wings when he went down.

Brian Clark: That was so great. Thank God he wasn’t hurt. He did break his mic pack or whatever, but that was one of the many highlights. But, yes, let me thank everyone who came out. It was a whirlwind, but it all just seemed positive. People were happy, and Jessica and Kim pulled it off without a hitch. Dan Pink was amazing. Sally Hogshead was amazing, Chris Brogan. Then, of course, Rollins comes in at the end. It was so interesting to see the mixed reaction of the crowd. The reaction was uniformly the same, but it depended on who you were.

The Amazing Henry Rollins Experience

Brian Clark: If you are a Henry Rollins fan, a Black Flag fan, a Rollins Band fan, whatever the case may be — like me — then you knew what you were in for, yet your expectations were still exceeded. I thought it was more amazing to see the people who were like, “You know, I knew who he was, but I didn’t really get it. Of course I was looking forward to hearing it because everyone said how awesome it was going to be.” Those were the people whose minds were blown.

Robert Bruce: Then, of course, his epic after greeting time. I think it was two and a half hours — I think it went, somebody said almost 8:00 — he was out there.

Brian Clark: I couldn’t believe it because I figured we got to get him backstage and get him to a car or whatever because the poor guy is going to get mobbed. Nope, he announces from the stage. “I will be out front, and I will talk to every single person who wants to talk to me.” I got to escort him out front, and I’m like, “Here we go.”

When you and I walked down the hall, we’ll constantly get stopped, and that’s very flattering and everything. But this was an entire mass of people. I got him far enough to where it could reach critical mass, and he’s just sitting there holding court — signing autographs, taking pictures.

He even for one guy, he said, “Record a message on my phone for my kids.” It was just the most perfect Rollins message. It said, “Don’t follow the rules, and do what you want to do and make your dad insane.” And the dad was like, “That’s the coolest thing that’s ever happened to me.”

Robert Bruce: That’s great.

Brian Clark: I’m like, “Are you sure?” Overall, it was a good thing. The first year we did it had this kind of special thing to it. In part, I think because we tried to produce a different event from the larger, multi-track events. We have a flare for theatrics this year with the stage setting.

The comments we got all the time were, “You are playing the coolest music throughout the entire show.” A little bit of that was me, but a lot of that was just Jessica. You can’t really touch her. She’s a former DJ. She knows her obscure hipster music fairly well.

I’m still reflecting on it, but it’s been cool to see various people doing wrap ups and reflection pieces. It’s all got that same vibe. People kept saying, “I found my people.” We heard that the first year, but to put on a little bit bigger event and have, still, people come away with that feeling I think is pretty cool. I think I need to do some thinking about how big do we ever want to make this thing. Do you at some point you lose that? What would be the point?

Robert Bruce: Yeah, because you hear it all the time. Things get too big and unwieldy and out of control, and people longing for the good old days when it was a small deal.

Brian Clark: We don’t do it to make money. I’ve said that over and over. We do it to break even, if we’re lucky, because we don’t skimp on food or AV or the experience at any case. If it’s really just to have people have that feeling of “I belong here, and that was fantastic. I’m inspired to go take it to the next level.” It seems to me that it makes sense that we don’t let it get too much bigger.

Anyway, I’m trying not to think about it right now. I can’t think about next year right now. I’m thinking about summer. I want to sit down. I want to stay at home. I want to write. I want to record. I want to create. And, of course, that’s how you set the stage for next year. That’s what you do, but it’s time to lay some new groundwork. I feel that way, and that’s, in part, coming away from my own conference as inspired and fired up as anyone. It’s not like I’m immune from it.

The fact that I got to drive Rollins the next day from Denver to Boulder for his show at the Boulder Theater. Me and Jerod and his fiance got to be Henry’s guests in the VIP sections. Only one there, velvet rope and everything, and you think his presentation at Authority Rainmaker was amazing. He went two and a half hours at the Boulder Theater. I don’t think he took a breath, and it was hilarious. When he’s unrestrained topically, he’s hilarious. He just meanders, tells stories, but it’s all perfectly orchestrated.

Robert Bruce: Yeah, it is incredible. I’ve never seen him live, but I’ve seen various versions of his shows over the years — the ‘talking show’ as he calls it — and it is really incredible. He’s got a really great thing going now because he travels the world. He has all these experiences. He sees all these places, and he goes to some pretty incredible places — both in the sense of culturally, crazy political things going on.

He doesn’t call himself a journalist. But he comes and he reports back, and he uses all that material in these live shows. But you’re right, to go two and a half hours without a stop, it’s just like a freight train.

Brian Clark: He doesn’t even really move. He stands in one place. He’s got the microphone cord wrapped around his hand. Anyway, let’s move off of this, but one last thing. During his presentation at the event, he made a reference to Henry Miller and said, “This guy just lives life and then writes about it.” And that’s what Henry does.

When I’m in the car with him for 45 minutes and he’s telling me stories about David Lee Roth and the Ramones and he’s got this great Guns N’ Roses … Black Flag loaned Guns N’ Roses their PA equipment. He said they were the most scruffy, attitude-laden, smelly people he’s ever met in his entire life. And he said 15 minutes into their set there are 35 people in the room — he said they’re going to be huge. I think he was right a little bit about that one.

That’s his whole life. What he does becomes his material. He just delivers it with a lot of amazing wit and showmanship that I don’t think people realize — just go online and look at Henry Rollins’ Spoken Word, and you’ll get some videos. I suggest the one where he talks about trying to compete with Iggy Pop on tour. That’s the funniest thing you’ll ever hear.

A Quick Rundown of What’s Coming on Rainmaker.FM

OK, what else do we have today? We’re already talking 10 minutes, and we haven’t got out of the intro. We’ve got more podcasts coming to Rainmaker.FM. Why don’t we talk about that?

Robert Bruce: We got a whole list of stuff. So right now we have 13 distinct shows live over at Rainmaker.FM, and that is not including, of course, the crowd favorite, the all shows feed. Yeah, we’ve got a number of things coming up here. I’m just going to list them out. We can talk about it, talk about the hosts a little bit, and then keep going.

In no particular order, we’ll start with Andrea Rennick is going to be doing a show called Humans of WordPress, and this will be interesting. A little bit different than anything that’s on Rainmaker.FM right now, but she’s going to be talking about WordPress, talking to big WordPress people, what’s going on in the WordPress universe, and as that relates to, of course, the DIY side of our business with StudioPress and all of that.

So that’s coming up. All of these, actually, this whole list is going to be coming out within the next month, month and a half, but that’s Humans of WordPress with Andrea Rennick. Then Mr. Sean Jackson– I think you still call him Action Jackson.

Brian Clark: Action Jackson. Absolutely.

Robert Bruce: He’s doing a show called The Missing Link. This is something that we went back and forth on, and you hit upon this idea of Sean — true to his nature and his interests — really focusing on the LinkedIn experience and as it relates to digital marketing and talking to people within LinkedIn, talking about strategy, of course, and using it. We’ve often said this is one of the most powerful social networks in the world.

Brian Clark: It really is given that it’s the only one that’s primarily business focused. I keep looking at LinkedIn. I’m seeing more and more original content being published over there. I’m not sure how I feel about it, but the smart ones are always pointing back to home base.

Really, it’s guest posting, yet instead of doing it at Forbes, Entrepreneur, or Inc., what have you — nothing against writing there, obviously — but it’s within a social network where people congregate to get smarter about their careers and about business. Then you’ve got all these content. Then, of course, that content is fueling the traffic back to their own site. It seems to me to be a fairly direct guest posting strategy. I’m looking into it more, but obviously I’m going to be listening to Sean’s show.

Robert Bruce: Jessica Commins and Kim Clark are going to be doing a show called Misbehavior. Love this show title. Jessica is a serious data nerd, and Kim is on the support — many, many different sides of this — but mainly the support side of our business. She runs things over there.

They’re going to be talking about all things data as it applies to business. One cool little tweak is, on a regular basis, talking about how deceptive certain statistics or certain numbers can be or the way in which people use them and what things really mean when it comes down to business.

Brian Clark: Lies. Damn lies and statistics.

Robert Bruce: Yeah, correct. That’s exactly right. It’s been around for a while. There’s one here that I’m not going to talk about, Brian. The only reason I’m not going to talk about it is because you, just a few moments ago, told me not to talk about it. Anything you want to say about that thing that I won’t talk about?

Brian Clark: Yeah, why do you always do that to me?

Robert Bruce: Wait, we’ll come back to this.

My New, New Podcast (Yes, I’m Starting Something Else)

Brian Clark: I am working on a new project, everyone’s like, “Wait, didn’t you just do that Further thing?” Further to me, at least now, is like my once a week personal blog. I’d write it if no one were paying attention because it helps me learn. Thankfully, I’ve got a nice email list that pays attention to me, but I have no idea about selling people anything or whatever. I hope to demonstrate the Rainmaker Platform a little bit more with my ideas that I have over there. Hopefully, again, this summer, I’m going to have the time to implement that stuff.

I think there’s something that’s more congruent with what I’m really good at. What do I have actual expertise in that I really want to do another podcast on. It’s not about just marketing. I really just intellectually need the ability to address a greater range of topics that are still relevant to the people I want to talk to — people like me, at whatever stage you’re at, that is essentially entrepreneurs of all stripe.

I’m not one of these people that thinks, “Well, freelancers are some lower life form compared to a ‘true entrepreneur.’” That’s BS. Anyone who’s making a living outside the system, they’re an independent economic agent. Hey, you got my respect, and 15, 16 years ago, my first success alone without a net was really a freelance attorney when you want to think about it. They don’t call them freelancers. But a solo attorney, it’s basically the same thing. You’re a gun for hire.

Now, somehow, I’m the CEO of an eight-figure software company. That seems like a gigantic leap unless you lived it, step by tiny step by tiny step. Anyway, I’m doing a podcast for those people. It could be a much larger project than that. I’m working out some details, so how about, I’ll talk to you guys about that one-on-one in a future episode.

More About What’s Coming on Rainmaker.FM

Robert Bruce: Books, books, digital books, print books, this idea of putting a book together to build your business, we have touched on this topic throughout the years, of course, but we’re bringing somebody in, a gentleman named Jim Kukral, which many of you will know. You guys go way back, Brian, I think.

Brian Clark: Yeah, I’ve known Jim forever.

Robert Bruce: I’ve known Jim for a couple of years. He’s going to do a show called Authorpreneur, focusing on the book business and as it applies to building your business with digital marketing from that angle. I’m looking forward to that one. I actually got a thing for some of these book podcasts that are going around. Of course, it’s been a number of years now, but with the ongoing evolution of the self-publishing revolution, as it relates to ebooks specifically, is really cool.

It’s kind of neat to see. It reminds me of the whole Napster era of everything in music changing. It’s now taken a few years — and it’s been going for a number of years, of course — but we’re still right in the thick of everything, of all of these changes happening in the book world. So Jim is going to do that one.

Then a friend of yours from Boulder, a gentleman named Doyle Albee, who I just had the pleasure of meeting a couple of weeks ago. Then I got to briefly meet him, sorry Doyle, a couple of times in Denver this last week — really, really cool guy, interesting guy. He runs a public relations company there.

He’s going to be doing a show called PR is Dead, which will be another of the great show titles in the Rainmaker.FM podcast network. Let’s talk a little bit about Doyle’s story, Brian, since you know him much better than I do.

Brian Clark: Doyle is like an old school. He’s been in the PR business forever, but of course, over the last five or so years, he’s really embraced content, audience, being able to circumvent the media by becoming the media. He’s actually going to write a book called PR is Dead: Long Live Public Relations. That distinction is the relations you have with the public is because they’re your audience, right?

When I first met him, I said, “You know, man, we never get mainstream coverage.” And he’s like, “So what? You have 300,000 people that pay attention to what you say. My clients would kill for that.” Of course, that doesn’t make me happy because I want everything.

Robert Bruce: You sound like a Millennial.

Brian Clark: But that’s the point. Of course, that’s been the point all along. Yes, we get ignored by the tech press because we never took venture capital. It’s just the way it works, but does it matter? Did it stop us from growing to $10 million a year? No. Anyway, that’s going to be a great show.

Robert Bruce: He told me he’s going to be looking at what PR means in this century and in the next decades coming up here because, traditional PR itself, the game has changed in terms of what is working and what people need in that context. I’m really looking forward to that one.

Scott Ellis, he is coming on to do a show called Technology Translated. Scott and you go way back as well, Brian, right?

Brian Clark: Yeah. He was in Dallas, or still is actually. He was always doing stuff on his own. I remember he came to our AgentPress workshop and he now has his own hyperlocal site. He worked with the people over at GeekBrief — Cali Lewis and John P. when they were working together. He’s highly steeped in serious media production from the video angle with GeekBrief and just from the hyperlocal text angle. All of that stuff, and he does great consulting work as well.

Robert Bruce: Next up is our very own Lauren Mancke. She runs things over at StudioPress. She is one of our great designers between her and Rafal Tomal. The title we’re still working on, but the concept is, again, the idea of the DIY side of our business, StudioPress synthesis, hosting your own site using WordPress and Genesis in a StudioPress theme on the Synthesis side.

She’s going to be talking about digital DIY issues, running a business, which she’s done for years, and putting the pieces together to do it yourself in the context of digital business and digital marketing. Of course, there’s going to be a lot of design-related stuff in there and how to make things work with your website, but mainly that big idea of doing it yourself online. This is kind of a recurring theme. There’s more and more of these shows popping up and interest in these shows. I’m looking forward to that one.

Our two friends, Tim Hayden and Greg Hickman, are going to be coming together to work on a show called Mobile Friendly. That is something that we’ve been working on for some time. Greg actually started this show, and they’re going to bring it into the network and work together on it. I’ve got a few things to work out there, but this one has the potential just because of the topic to be a pretty big show, and both of those guys know what they’re talking about.

Brian Clark: Yeah, it’s not, “Mobile is coming.” Mobile’s here, and it’s rolling over everyone. To a certain degree, responsive design and being mobile friendly to your users is a criteria that they’re going to judge you on. Google now judges you on it, but I think there’s a whole lot. You talk to Tim Hayden — he just lives and breathes thinking about the consequences and the ramifications of mobile first — and it will blow your mind. I’m serious. This is going to be a great show that I’ll definitely be tuning in to.

Robert Bruce: It’s been Rainmaker.FM all the time for some time here, at least you and I Brian, but we are getting to Copyblogger. We’re bringing Copyblogger over here in the form of what we’re calling The Portable Copyblogger. This is an idea that Pamela Wilson brought up. I think it’s great. We’re going to take select Copyblogger posts from the archive and newer stuff. We’re going to record them. Basically, do a voiceover, but we’re not just going to just do a quick and dirty thing.

We’ll rework those posts so that they actually work for audio. If it is something from the archives and stuff needs to be changed up or updated, we’re going to be doing that and putting it into a nice audio format. I like to think of it as hyper-mini audio books maybe.

Brian Clark: Hyper-mini.

Robert Bruce: Maybe something in there. Super short, because a lot of these, a thousand words can be read in what, seven, five, seven minutes depending on the speed? This will be a cool one. For those of you who would rather get Copyblogger native material in audio form as opposed to text, this one will be for you.

Then we’ve got a couple that will be a little bit later, probably the next two months or so. There are actually a number of these, but I’ll just go through one or two here.

The FAQ, this is something we’re just going to do a basic, really simple Q&A. We’re going to set up a system by which people can either call in or leave messages, leave questions for — somebody will host this. I don’t know yet who — but leave your questions for basically anyone in the Copyblogger organization. We’ll do quick Q&A show there.

Probably the big one of all, which I hesitate to even mention, but we’re going to do it in one form or another, the Rainmaker Roadshow. That’s going to have its own channel on Rainmaker.FM, but basically live shows. We haven’t worked out all the details yet, but we’re talking about basically sending shows out on the road to do live in very small places, live venues.

Brian Clark: It’s interesting because there was a podcasting table set up right in the front of Authority Rainmaker. What was his name? Clark something. Nice guy. Then, of course, we had Kelton and our video crew set up on the side of the house doing high-production video interviews, professional lighting, all that. It’s completely doable. Even if we — the conferences we go to — just set up shop. Talk to who’s there. I don’t know.

It’s an interesting concept. Again, I can’t think about going on the road right now because I don’t want to. Eventually, that will change. It is an interesting thing. We’ve been talking about this for a while. We just haven’t figured out how it’s going to work, but of course, it’s doable.

Robert Bruce: Yep. Then there are probably another ten or so in various forms of gestation shows that are coming up, but that puts us right between 25 to 30 shows. Frankly, that is about where I think I want to be for the moment — and really for the foreseeable future. Things will change. New stuff will come on, and as we get to moving toward — we’re not even close to it yet — but the one-year mark here, we’ll see where we stand in all kinds of ways. But that 25 to 30 number is pretty good.

You and I haven’t had that conversation yet. In one sense, it’s arbitrary. In another sense, I really want this first six months, even year, is to get to a really foundational, stable place with the network. Then, of course, along the way, but also you at some point really want to slow down, see where you are, and make those shows even better, the shows that are there. That’s the conversations I’ve been having with Jerod on the host relations, talent side and then on the production side with Kelton. There’s a lot of moving parts.

Brian Clark: We’ve only been doing this two months so …

Robert Bruce: Has it only been two months?

Brian Clark: It feels like a lifetime, doesn’t it?

Robert Bruce: Yeah.

Brian Clark: Just two months. Finding things out just like we always talk about. Put it out there. See what works. See what doesn’t. You expand. You retract. The answers will make themselves.

I tend to agree with you at least for phase one, 25 to 30 really solid shows — that’s quite an achievement, and it’s a lot to choose from. From people we’ve already seen that some people are like, “I want to listen to all of them, but there is too much.”

I didn’t really anticipate that because the reason you have all these different niche topics and slightly different position shows is that you find the handful of them that really work for you. It’s a testament to maybe we’re hitting it pretty well and that we’ve got people who really do want to consume it all. And that’s hard.

The Showrunner course — just in its short pilot program — it did exceptionally well. I think our other theory that, yes, people want portable, on-demand podcast-level education, insight, advice — all that good stuff. But they’re also very hungry for in-depth, highly detailed, dripped-out courses that really drill down, take it to the next level where it’s not about, “Oh, that’s a good idea.” It’s more like, “Oh wait. OK. I got this blueprint for how to do this.”

It made sense to start with podcasting, especially with the experience Jerod and Jon have. I would expect to see more of that because we’re already getting requests for it.

Why Robert Is Betraying Me and What I’m Doing About It

Brian Clark: OK, so we only have a little bit of time left. I guess we should close with a dramatic announcement that you are a quitter.

Robert Bruce: Dammit. I was trying to do a drop the mic sound effect. Maybe I’ll drop something in there. I’m out.

Brian Clark: You are really taking my advice to heart. You’re just like, “I’m a producer, dammit.”

Robert Bruce: That’s right.

Brian Clark: “I m behind the scenes, I make more money than the talent. Therefore, I will not mingle with you little people anymore. ” Is that where you’re coming from with this?

Robert Bruce: Almost 100 percent wrong. No, actually it will be more. I’ll be mingling more with, as you say, the talent and the hosts. What was I thinking the other night? I feel like I’m more Rick Rubin than I am Jay Z these days. This whole putting this thing together …

Brian Clark: You actually look like Rick Rubin.

Robert Bruce: Well, I need to grow the hair out again, but maybe we can work that out — and the beard, too.

Brian Clark: I would agree with that. Yet, at the same time, listen to that voice. Listen to the insight, so your whole argument that, “I’m not good at this. Blah blah blah.” I don’t buy that at all. I, of course, do respect your wishes, but I can’t believe you’re leaving me to fly solo. All right, here’s the question we need to ask the audience.

Robert Bruce: Yeah, shoot. Oh, the audience — you don’t care about asking me anything.

Brian Clark: You’re gone. What do I care? Going forward, I can either just fire up Garage Band and just sit here and talk — which I find very difficult. We’ve talked about this for years. If it’s just me, I have a very hard time starting this show. I know we did it a year ago January when we started this podcast, and it was challenging. I think the output was good. We’ve had lots of compliments over time. I either go back to that, or I get another co-host. I’m not sure who that would be given that everyone is just as busy as anyone else. Maybe we should take comments on it.

Robert Bruce: Can I give my two cents here? Definitely take comments.

Brian Clark: Here’s your last meaningful statement on my show, Robert.

Robert Bruce: I think you could go either way. But I’d like to see you try the short-form monologue bit for at least a good number of episodes.

Brian Clark: We’ll see. Okay. This is my request to the audience now. Since Robert is ditching me and making my life more difficult as he always has, but not to this degree. I’m really going to ask that you go over to iTunes, give me a rating or a review as encouragement to carry on, feeling a bit weepy. Did that sound sincere at all?

Robert Bruce: Not at all. I was going to ask if you needed a hug, but that wasn’t going to come down sincerely, either.

Brian Clark: Okay, anyway. I’d still appreciate a rating or review.

Robert Bruce: You’re fine.

Brian Clark: I will be back next week without the traitorous Robert Bruce.

The Transcript

Will Millennials Kill Email Marketing?

Voiceover: This is Rainmaker.FM, the digital marketing podcast network. It’s built on the Rainmaker Platform, which empowers you to build your own digital marketing and sales platform. Start your free 14-day trial at RainmakerPlatform.com.

How to Be in Two Places at Once

Brian Clark: Robert, you realize as this show goes live, you’re probably standing on a magnificent stage in Denver, Colorado. Dan Pink just left, and you’re introducing Scott Brinker. Yet, here we are in your ear.

Robert Bruce: Don’t you want to know how I’ve accomplished this amazing feat?

Brian Clark: Well, I know how.

Robert Bruce: How? No, it is extraordinary. It’s an extraordinary thing, Brian. We’re in Denver, and we’re also in your ear.

Brian Clark: On the air.

Robert Bruce: On the air.

Brian Clark: It s the magic of on-demand content. Who knows when we recorded this?

Robert Bruce: You think there’s some appointment viewing going on?

Brian Clark: Appointment viewing?

Robert Bruce: Listening, rather?

Brian Clark: I don’t know. I do know that as soon as it hits the feed, there are listeners, but usually the big chunk of people come when we send out an email. The conference will be long over by that time.

Robert Bruce: Yeah. Speaking of appointment viewing, listening, and things like that, you sent me an article this morning, and it has to do with one of my favorite people groups, which is our dear Millennials, and their email habits.

The Key to Email Success with Millennials

Brian Clark: Yeah, absolutely. I saw I think Ann Handley, another one of our conference speakers — this is all getting quite congruent — but she Tweeted this. It’s a Marketing Profs article, and the title is Your Email Marketing Campaign Isn’t Attracting Millennials (for Good Reasons).

Now, I click over, hoping that this isn’t one of those silly pieces about how Millennials don’t use email. Thankfully, that is not even addressed, because that’s ridiculous. Millennials do use email, and they are power users, actually, of email compared to older generations. I think our habits as online people, publishers, and marketers, are more similar to Millennials than, say, some of our peers. Does that make sense?

Robert Bruce: Yeah.

Brian Clark: We’re constantly plugged in, and of course, we’ve been talking about lately how that’s probably not even a good idea for us. Anyway, so I Retweeted this article, and it got a lot of interest, but like clockwork, someone responded with, They don’t use email.

But it’s not true. They do use email. They’re checking their email constantly throughout the day. Here’s an interesting, fascinating statistic: 38 percent of all Millennials are freelancers. Is that amazing or what? Are you telling me that these people are doing business as freelancers of whatever stripe over WhatsApp, or text messages?

Robert Bruce: Right.

Brian Clark: No. Email is the medium of business, which I offer is the reason why it remains and will remain the primary sales channel for online. Because that’s where people go to do business.

Why the Logged-in Experience Is the Answer

Robert Bruce: Yeah. That’s not just some abstract philosophy. Think about it. What is the one thing you need to sign up for WhatsApp? Certainly, there’s some different login options now. Sometimes, you’ll run into something where it’s only by Twitter or Facebook login, but the vast majority of services and products and business services that we use, you need an email to log in. Those services, those hot social services, all are run on email.

By the way, for those who think that Millennials are lost down the rabbit hole of the app economy forever and email marketing is irrelevant, just remember that email, on the phone, is an app.

Brian Clark: Email s always been a software application.

Robert Bruce: Right.

Brian Clark: On the phone, you’re right. It is an app. You can use whatever one is standard with your iPhone or your Android, or there are other email apps out there. Yes, it is an app, but that doesn’t mean that they’re not using email messaging. Because again, to interact with the world to any degree, but especially in a business sense, you have to use email.

The difference, or at least different from perhaps other generations for the most part, is that Millennials are constantly checking email as part of their daily life workflow. It’s more of a mash-up than a segregation between life and work. I think you and I probably resemble that, again, just because of the type of business that we’re in.

The Absolute Necessity of Mobile-Friendliness

Brian Clark: One of the primary reasons that’s pointed out in this article that people are not being affected by email marketing among other things, is that they’re not mobile responsive. We’ve talked about this before — that Google had to swing the big bat of Your rankings are going to drop in mobile if you don’t become mobile-friendly. Again, what is the actual point? The point is user-friendly so that people can actually consume your content and your messages. The fact that you had to be threatened with a ranking penalty doesn’t make any sense. The problem is that people can’t interact with your content in their preferred way.

Email Marketing 101

Brian Clark: According to the article, the Millennials are constantly on their phone. They’re constantly plugged in looking for relevant messages to them — not to you — to them: Marketing 101. Yet there are a lot of people that are still doing the spam-and-jam thing. They’re buying email lists. They’re sending unsolicited messages.

One thing that the article talked about that I don’t know is as crucial as they’re making it — and you kind of alluded to it — is consistent delivery, always showing up at the same time or scheduling an appointment.

Do Consistent Email Delivery Times Make a Difference?

Robert Bruce: Yeah.

Brian Clark: How do you feel about that?

Robert Bruce: I may be too old for this because now, all this talk of appointment viewing and the reality of the world we live in with Netflix and Amazon and iTunes and being able to watch what I want when I want, maybe just kind of rubbed me the wrong way. I have no evidence of this.

Rachel Burger, who wrote this article, is saying — back to your point, 38 percent of Millennials are freelancers — but of those working regular hours, 89 percent check their email long after the workday has ended. They’re practicing what she calls work-life blending, mixing play and work, so they become almost indistinguishable.

She makes a connection there that Millennials would prefer to have their emails delivered, that they have signed up for, consistently at a specific time. I don’t know about this. Consistently, obviously, is huge in anything you’re doing, but the specific time thing I guess I could see it, so I’m not going to rage against it.

Brian Clark: I know we aim for it. Of course, sometimes messages come when they come because that’s what needs to be communicated at that time. As far as content, for example, with the Further newsletter, I’ve never missed a Monday. I aim for around 10:00 a.m. Mountain time. But, for example, the last issue was a little bit later than that just because I’m abnormally busy right now in the run-up to the event and a lot of other stuff that we’ve got going on. I haven’t received any complaints if there is a window of time. I would imagine if I just totally missed a week or showed up on another day, people might start to wonder. I’m not convinced, necessarily, if I think that’s a good sign.

This is really going to get to the heart of the matter. If your content, your email, whatever the case may be, is anticipated, that is a damn good thing. It’s when something keeps showing up and it never gets read and finally they’re like, Uh, I’ve got to get off this list. It happens. You’re never going to connect 100 percent with people, but by and large, you know if your unsubscribe rate, your open rates, et cetera are healthy or not. That’s the key. What are you sending to people, Millennials or not, but especially, I think, Millennials? It’s interesting reading this article because I feel like it could be speaking about me.

We are digital natives of the first generation, even though we are older people now. Millennials are digital natives by birth, and that’s the difference. I don’t feel alien or very different from a Millennial in my online practices. It’s the same thing. If I’m seeing messages that I consider to be spam, or just not useful to me, yeah, I’m unsubscribing. That’s how it works. We people who have spent a lot of time online are very savvy about avoiding or routing around the damage of the Internet, which has been referred to in terms of censorship, but it’s also in terms of spam. We know how to avoid it.

Going back to the theme that we’ve had about creating an experience, specifically a registration and access, logged-in experience, which lends itself to all these great personalization techniques that Millennials also appreciate. People appreciate a more targeted one-on-one, feeling type message, right? Isn’t that just human nature, Robert?

Robert Bruce: Yeah, and this goes to one of the core issues of business and life in general. It s Ms. Burger’s number three. Don’t assume you know someone, right? When we make assumptions about somebody’s life or somebody’s story, we are prone to make grave errors, both in business and in life.

Brian Clark: Has there been a more stereotyped generation than the Millennials since Generation X was stereotyped?

Robert Bruce: Right, slacker.

Why Millennials and Gen X Aren t So Different

Brian Clark: We were stereotyped. It happens to every generation, but I think more than anyone, the Millennials have been unfairly characterized in a stereotypical fashion. You’re right –that is the death of audience. That is the death of business, when you think someone is, some very shallow transparent stereotype, instead of a richly nuanced human being. We have generational characteristics. I argued that the Millennials are more like Gen X than people would like to admit — or is that the right word? I don’t know. All I know is that we went through a recession, and we were all upset and angry, and that’s where grunge came from. Then the Millennials have a recession that makes ours look like a day at the beach.

They should be the ones who are angry. I admire them because they’re optimistic to a degree, but they’re savvy, too. You know what I’m saying? They’re not going to put up with your BS, but they’re not necessarily raging angry about everything either. I think serving any generation, but especially the Millennial generation, well is just truly understanding who you’re trying to talk to and providing real value and experience. Whether it’s an educational, Here let me teach you this and I’m going to need you to register for it and you’re going to come back here into this training area, which is becoming ubiquitous with these larger learning programs.

I’m going to deliver you something that you value, that you look forward to. I’ll do my damnedest to be consistent and show up on the same day and time or whatever the case may be. I think if they’re anticipating hearing from me, or the organization as it would be, I think that’s the win.

Robert Bruce: Yeah, right.

Brian Clark: If someone is looking forward to getting your email and you’re a few minutes late, I don’t think they’re going to get mad at you, but I think when you show up randomly with a message that isn’t anticipated or desired, that’s when you get marked as spam because it’s just easier.

Robert Bruce: The newsletters that I want to get, trust me — I always read them. It doesn’t matter what time, what place. But I think this is a good point: consistency, scheduled time, and specifically within the context of talking to Millennials. You’re right. If it’s something that I want, I’m going to read it, no question.

Brian Clark: Yeah, and that’s the secret. I don’t know how many times lately I’ve said it: It’s simple, maybe just not easy. It is simple. Everyone wants to take shortcuts, or they just want to send as many unsolicited spam messages as possible and hope something sticks.

Robert Bruce: It’s all about relevance.

Brian Clark: Yeah, and it’s interesting, because I talk to a lot of people that are in more traditional business sectors, and they don’t understand. They understand the concept of, if you have a bunch of people that you can reach by email, that’s a good promotional tool, but what they don’t get is actually how valuable that audience is and how much you should be focused on delivering value to get the sign-up in the first place. Being consistent with value is more important than being consistent on time. Isn’t that really what we’re both saying here? You’ve got to nurture that list. You’ve got to earn the right to send that offer.

Robert Bruce: No, it’s real simple. You’re right. It is simple, but it’s not easy. You’re sending really great education or entertainment, or whatever your thing is, to people that want to receive it. You know what? That can be a long, fruitful relationship for both sides, but then as you mentioned before, when the unsubscribes do come, you look at that as feedback, really.

Unsubscribes are a great thing because it tells you something, sometimes. You’ve got to look at the context of why and how and who. Don’t fear the unsubscribe because that person has decided at this point in time to take off. Well, they weren’t going to do any kind of business with you anyway, so it’s a good thing.

Brian Clark: Unsubscribes are a natural part of the process. What you look for is an alarming rate of people marking you as spam instead of scrolling down and hitting unsubscribe.

You may say that people just don’t care and they’ll just mark it as spam to get rid of it faster. But I’ve found that when a complaint happens, I’m always shocked. Like Really? Come on now. That was a pure content email. But it’s so rare that you don’t even think about it. That was just a person taking a shortcut. If you saw a lot of that behavior, that’s feedback you need to pay attention to, but unsubscribes in the normal course, as long as you’re not losing half your audience every time you mail, it should be a tiny percentage. But the bigger your list gets, the bigger that number is. It’s okay. It’s normal.

Let me leave you with this. Think about what kind of experience — educational, motivational, what have you — can you offer that is above and beyond just Sign-up for my newsletter. Even something like Further would benefit from me creating a front-end experience, a goal, a challenge of some sort that, Oh, and also you will continue to receive this great content weekly.

That’s the way to do it, and that’s the next step. If I make it through this conference alive, I may have some time this summer to do some projects, and we do have some stuff coming? Right.

Robert Bruce: Yeah we do. Let’s do this. Go to NewRainmaker.FM. Sign up for the email list there. You won’t miss a thing in terms of what’s coming.

Brian Clark: All right everyone, thanks for tuning in, and if you did happen to make it to Denver, you’re not listening to this right now.

Robert Bruce: You better not be.

Brian Clark: I will be talking to you in another context.