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The Transcript

Native Commerce: Media That Makes Real Money

Voiceover: Rainmaker.FM is brought to you by The Showrunner Podcasting Course, your step-by-step guide to developing, launching and running a remarkable show. Registration for the course is open August 3rd through the 14th 2015. Go to ShowrunnerCourse.com to learn more.

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

Today’s special co-host is kind of a character, Mr. Ryan Deiss, DigitalMarketer.com. Smart guy, he does a lot of very smart, lucrative things. Ryan, why don’t you tell us a little bit about this collection of businesses built on media websites that fuels the Deiss empire, if you will?

Ryan Deiss: I’m just excited that I’m a co-host. I didn’t realize. Are we going to interview somebody else, too?

Brian Clark: No, no.

Ryan Deiss: Do I have to be prepared and stuff?

Brian Clark: No. I’m going to make you do all the work. If I said, “Here’s our host, Ryan Deiss, who’s doing all the work, and I’m just kind of here,” that’s not going to go very well.

Ryan Deiss: I thought I was the very special guest or the talent.

Brian Clark: We can edit this to be very special guest.

Ryan Deiss: Yeah, but let’s edit it in somebody else’s voice that way it’s not going to seem as dumb.

Brian Clark: You’re the kind of guy who would want your name not in alphabetical order. It would have to be and Ryan Deiss?

Ryan Deiss: Yeah, absolutely.

Brian Clark: Yeah.

Ryan Deiss: Let’s make sure we get that in post, please.

Brian Clark: Got you. Got you. As far as you know, we’re going to take care of that.

Ryan Deiss: Exactly. By the time you find out about it, it will be too late.

No, really, I’ve been listening to this podcast since the very first one, so — and I say this through gritted teeth because I never like to compliment a friend, certainly not with them around — this is easily in the top three of my favorite podcasts, so thank you for having me.

Why Advertising Alone Won t Support Media

Ryan Deiss: No, to answer the question about, as you’ve referred to it, the Deiss empire, which is very gracious, I have a lot of people on the team and partners, stuff like that, that have as much and in many cases more of a role to play in the success of the empire. We’re really fortunate that we’re in a lot of different markets.

You and I have the same perspective to this, this whole media first attitude, right? Like, Let’s go out there and build media properties and gather the crowd and aggregate the attention and do that first. That’s the way that my business has always been, and now we’re in I really don’t know how many different markets. But there’s obviously Digital Marketer, which I think I’m best-known for. Some of the more lucrative things that we’re in, we own MakeupTutorials.com, SurvivalLife.com, DIYReady.com, and PioneerSettler.com.

So we re in all these different, really cool markets where we get to play and dabble in a lot of different areas and then share and report on all the stuff at Digital Marketer. It’s a lot of fun. It keeps it interesting.

I don’t know, are you like me? I think most entrepreneurs are like this. If you’re forced to do the same thing every day, you will break it just so you can fix it. Right?

Brian Clark: Yes, yes, which is why I’ve started distracting myself with new projects so that I don’t break the thing that actually pays the bills.

Ryan Deiss: Bingo. There. And that’s how the empire happens. There you go.

Brian Clark: Yeah, that’s cool. Yes, I remember when we finally met, or maybe it was the second time we saw each other in Austin. But it was after we started this podcast, and you were like, “I’m completely down with your media not marketing approach.” That’s where we really started geeking out about things.

Now, it doesn’t take a genius in this day and age to realize that traditional media models are broken. I’ve also heard you say that e-commerce models are in trouble. What do you mean by that?

How to Deal with the Threat of the Walmarts of the Internet

Ryan Deiss: I mean, everybody is screwed, right? With the e-commerce companies that are out there, they are getting commoditized left and right by — I don’t know if you’ve heard of this little company called Amazon. They are going out there, and now most people, when they want to buy something, they just go to Amazon. I mean, Amazon has really become the search engine, so if you’re out there trying to launch your e-commerce site and we used to do this.

My business partner, he had a number of sites, the little e-commerce sites that sold dry-erase boards and different things, because people used to go to Google if they wanted to find something to buy. Now, they realize, “If I want to buy something, I’ll just go straight to Amazon.” Right? Their members have Prime.

The small e-commerce sites really can’t compete, and now you’ve got Alibaba coming over to the top on Amazon. And they are going to further commoditize it, because now Alibaba is going to allow the consumer to go directly to the manufacturer. Another piece of that supply chain is getting removed, which is great if you’re a consumer. It’s not so great if you’re an e-commerce player, because how do you get found anymore these days?

E-commerce sites are getting commoditized by the Walmarts of the Internet just the same way that local mom-and-pop shops on Main Street got commoditized and eventually pushed out of business by Walmart. At the same time, you’ve got these four media companies that can’t make any money either.

Brian Clark: Yeah, here’s a guilty admission on my part. I don’t even think it’s about getting found with the Amazon thing in that I forget what it was. A guy put out a great article about a certain supplement and gave me the information that I needed, and he’s got the little shop attached to his site so you can order supplements from him. Of course, I then copied the exact bottle and everything into Amazon so I could one-click it. They’ve got my credit card information, and they’ve got my delivery information. It’s pure laziness more than anything, because I actually did find it through this poor guy. He was doing everything right. My number-one rule is never sell anything that Amazon sells.

Ryan Deiss: Yeah, I think that’s a big part of it. I mean there are ways to get around it. There are ways to win even if you’re selling something that Amazon is, but you’ve got to completely change the model. I know for us, we spent a couple of years trying to figure out, How can we beat Amazon? How can we win? How do we make this happen? How do you beat, Walmart? Right? The answer is you can’t.

Brian Clark: That’s what I thought the answer was.

Ryan Deiss: You can’t. Right, that’s exactly the truth. You can’t, but here’s the other reality: you can’t beat them at their own game. But the other thing is, you really don’t want to. You don’t really even want to compete with them at what they are doing. You don’t want to be Walmart. Let me ask you: have you ever shopped at a Walmart?

Brian Clark: I try not to, but sometimes …

Ryan Deiss: Sometimes you have to, right?

Brian Clark: Yeah.

Ryan Deiss: You try not to, but sometimes you have to. That’s the general response that I hear from people, like, “Yeah, I go there because they have the best price.” I don’t think the web needs more Walmarts, right?

Brian Clark: Yeah.

Ryan Deiss: Another question, have you ever been to a Bass Pro Shop? Do they have those in your area?

Brian Clark: Yeah, absolutely. It’s just a big outdoorsperson, outdoorsman. Is that gender neutral? No it’s not, but you know what I m saying. You go in there, and it’s just like sports and fishing and boats and guns …

Ryan Deiss: With man, so no. Outdoorspeople.

If you’re outside of the States or if you’re in an area where they don’t have one of these Bass Pro Shops or Outdoor Worlds, let me describe it to you. I mean, you walk in, and it is about the size of a Walmart, maybe even bigger. But it’s just outdoor stuff. They literally — some of them — have a pond in the middle. You’re going around, and you’re picking up a fishing rod, and you’re saying, “I wonder if this is a good fishing rod.” The dude says, “Why don’t you just go try it right now? We’ve got a stocked pond in the middle of our freaking store.”

You have people fishing in the store. I went to one to see What is this whole thing about? I don’t like camping. I like hotels, room service, and stuff like that. I went because I wanted to see. This is a retail model that is working. This is a retail model that’s actually working, that is winning. What are they doing so well? I’m walking around and there’s people that showed up at this place wearing camo. They are not going hunting there. They showed up wearing camo. They showed up with duck calls around their necks, right?

It’s not like they bought shoes at a shoe store, and they re wearing them out. No, no, no. They showed up with the duck call. So what Bass Pro Shop has done is they’ve created this environment. They’ve created this movement. They’ve aggregated this audience.

Then a buddy of mine, who really gets e-commerce — his name is Ezra Firestone — he said, “Yeah, in the future, if e-commerce stores want to succeed — I think this is really profound, and I think this is any online seller — you need to have your property, your site, a whole lot less like Walmart and a whole lot more like Disney World.

If you think about Disney World, you go there for the rides, and you go there for the experience and for the fun and for just the whole package — but you exit through the gift shop. That’s when it hit. That’s when this whole reality struck, and that’s when I said, “Okay, what you’ve got to do is you have to combine the two.” Media and commerce shouldn’t be these separate things.

Media should be used to create the environment, to aggregate the audience, to gather the crowd of like-minded people who are excited to be there. Then you have the opportunity to sell them your stuff. They want to do it because they love you and they love your brand.

I mean, that’s what you’ve done with this podcast. You start out with the Rainmaker podcast, and then you come out with the Rainmaker Platform. The media, the gathering of the content, that’s what came first, so that’s our whole model. Everything that we do, it’s Let’s go out there, and let’s gather the audience.

Brian Clark: You’re a man after my own heart, obviously, in that regard. But you’re using a little bit different terminology, and this is what really caught my eye. Native commerce — where did that come from?

The Story behind the Term Native Commerce

Ryan Deiss: Native commerce is the new hipster-approved phrase for this thing that you and I have been doing and just didn’t give it a cool name. That is the new thing. Don’t confuse native commerce with native advertising. Native advertising is advertising that’s designed to look like content, which really, that’s just the hipster-approved name for an advertorial.

Brian Clark: Exactly. This is the hipster name for content marketing?

Ryan Deiss: I think this is about more than content marketing, right?

Brian Clark: Yeah.

Ryan Deiss: This is bigger. This is about creating community, right? It really is about establishing, in your world, the theme park. It’s about building your own private little Disneyland, your own private little Bass Pro Shop. Another area — do you have a Harley-Davidson dealership in your area?

Brian Clark: Yeah. Another cult brand. All right.

Ryan Deiss: They just show up. Another one would be the Apple Store. People go to the Apple Store just to hang out. I look at all these different companies, and I say, These are media companies. What they are doing is they have built media, and now they are selling them stuff. Yeah, the big phrase that’s out there right now — and you’re going to start hearing it a lot more — is this concept of native commerce.

The selling that is going on is directly aligned to the media property, which historically, those two things were kept separate. You had your editorial team, and you had your advertising team, and they didn’t talk. You had the wall up between them. Now, what’s happening is they are merging. It has to be done right, and it has to be very, very transparent, but when it’s done right, it’s powerful. Where I first heard this phrase — have you ever heard of Ben Lerer of Thrillist?

Brian Clark: Yeah. Thrillist, I actually subscribed to that in Denver for a while until I got beaten down by the frequency, but it’s really a well-done media property for local if you’re in the right demographic, which I think they are going after the 18-to-34 male. Right?

Ryan Deiss: Again, I’m using the word hipster a lot because it’s very appropriate, but it’s basically Esquire magazine for hipsters. I mean, that’s the whole thing. For the young guys, Esquire magazine skews a little bit older. They are really going for the 18 to maybe 24, but when you get up to in your 30s, they are like, “Ew, you re old, gross.”

Thrillist, which is definitely a property worth checking out, in 2009 — all right, check this out — did $8 million in revenues from ad sales, from advertising almost exclusively, which is pretty impressive. Right? They had this giant staff, this giant editorial team, all these people producing all this content, and it wasn t working. In 2010, they acquired JackThreads.com. Are you familiar with JackThreads?

Brian Clark: I remember when they did this transaction and turned effectively into, again, what we used to call a content marketing company, but I’m digging this native commerce thing, even if it is a hipster term.

Ryan Deiss: Yeah, I think it’s an important distinction, right? I think a lot of people who are doing content marketing see it as a separate activity. This is something that we do. This is the marketing component. It’s not built-in and really inbred into the actual I think it’s actually a part of the product.

Brian Clark: Yeah.

Ryan Deiss: You wouldn’t say that Disney is doing content marketing. No, the experience is all an aspect of their product and an aspect of what they deliver as a company. I think that’s a crucial distinction of really bringing these two together, fusing them, that makes it work. Thrillist did it. They acquired JackThreads. They made a big deal, and they said, “Hey, we now own this company.” Very transparent. They didn’t just start like, “We bought this company, and therefore, we’ve improved our margins in one of our top advertisers.”

No, they were very, very transparent about it, which, if you are a follower of Thrillist and you believed them and you really loved what they were about, you were totally cool with. They acquired JackThreads in 2010. Remember, I said in 2009, they did $8 million in revenue. In 2014, they grew to $100 million in revenue. From $8 million to $100 million in about five years, and 80 percent of that revenue was e-commerce, e-commerce sales for JackThreads.

How to Intelligently Aggregate Attention

Brian Clark: You know, it’s interesting about this, and we’ve touched on this in past conversations. The whole reason I tried to explain content and audience-building in terms of media not marketing is I saw a lot of light bulbs go off. I think what you just said is another light-bulb moment that I have taken for granted: that it’s an integrated thing.

We’ve always integrated. There is not marketing versus product development. We’ve always preached it s one seamless thing that the audience drives, and that’s exactly what Thrillist did when they made that acquisition. I think they had a pretty damn good idea what their audience was going to respond to.

Ryan Deiss: They knew because they’d already done the hard work. They had already gathered the crowd. And this is the thing. I just got back from a big podcasting conference. I know you weren’t there, but a lot of members of your team were there. I’m walking around talking to these podcasters who have a lot of downloads. They have a good following, and they are not making any money. I’m telling them, “You’ve already done the hard work. You’ve already gathered the crowd.” Companies don’t ordinarily go from $8 million to $100 million in five years. That’s big.

People were like, “I can’t believe they grew so fast.” It’s because they’d already gathered the crowd. The hard work was done. If you’re out there and you’ve got a blog property you’ve been posting to for a while or a podcast, and you have listeners and you have readers, and you’re just not making what you want to make, just know: don t stop doing what you’re doing. You’re doing the hard work. You’re doing the important work.

Brian Clark: Yeah, this is such a common story of the audience without the revenue. I think it’s a lack of integration thinking, frankly. All right.

Ryan Deiss: Yeah, it’s integration thinking. But also — I heard this because I went to this conference — they were talking about Midroll. You know Midroll, the podcasts?

Brian Clark: Yeah, absolutely.

Ryan Deiss: I don’t want to dive too much into podcasts. There’s a lot of parallels between podcasting and blogging because it’s all just media. What they were saying, one of the questions was, “Where do I need to be before you’ll consider selling space on my podcast?” talking to Midroll. I think their number was something like, “We really want to see you getting at least 50,000 downloads a month.” Fifty thousand. And you just heard, in that room, everybody went, Ohhhh. Right? Because that’s the problem with advertising.

Brian Clark: It’s always been a problem.

Ryan Deiss: Advertising, it only works at critical mass, but the problem is now, even when you get critical mass, it still doesn’t work.

Brian Clark: That’s why I gave up right from the beginning in ’98 when I was building audiences — the classic case you were just talking about and not making any money. It s because the numbers you need to make money from advertising are immense, but the amount of money I had to make when I figured out that the Internet was a direct marketing medium You could have an audience of 1,000 and make a fortune if you’re selling the right thing. That was the beginning of my entire career, and I still find that it s somewhat odd that we’re still struggling with getting people to understand that at this point.

Ryan Deiss: Yeah. I think you go back to the article — I’m sure you’ve read it — but if some of the listeners haven’t, Google 1,000 True Fans.

Brian Clark: It’s a classic.

Ryan Deiss: It makes a point that if you ve got 1,000 people that really love you, congratulations. You re set. You’re maybe not popping champagne bottles for breakfast — not that you should do that anyway. I don’t know why I even went straight to that, but if it s mimosas, I guess it s appropriate. But you’re doing well. It shows the math of how 1,000 true fans can really support you if you’re not just reliant upon advertising.

Brian Clark: Yeah, okay. I’m going to put you on the spot here. Give me the Deiss three-step process for making this happen. Can you do it?

Ryan Deiss: Yeah. We’ve been looking, because it’s actually quite simple. It really is. So the first thing that you ve got to do, which, this is why I love talking to content marketers, because they get this. They get that this is step one. Content marketers and podcasters. Just anybody out there. Bloggers. This first step is to aggregate the attention. Start building the audience, but you don’t have to start building the audience to a point of critical mass.

I think people don’t realize, if you get 100 people that come and read your blog or that subscribe to your newsletter, people will look at that and be like, “That’s nothing.” If you are offered a speaking opportunity to come and speak in front of 100 people, most people would jump at that. We forget that these numbers that we’re talking about online, those are all still people. You can do well for that. Start and do that. But here’s the key: when you’re aggregating that attention, it must be market-centric.

This is why you hear a lot of people saying, “Media is in trouble.” Usually, what they mean is, when you dig into the articles, they are talking about some news site. This news site isn’t making it. I think the reason is because most news sites are not market-centric. They don’t advocate for a particular market, for a particular avatar. You look at political news sites, and typically, most of those are doing a little bit better. Why? Because they are advocating for a particular market: people who are politics junkies.

A lot of celebrity news sites, they do, because they are entertainment junkies. You’ve got to be able to — when you’re building your audience — say, “Okay, this is my person. This is who they are.” Going back to it, like for Disney. Disney can say, “This is who our market is. It s, for the most part, families.” You get people who are Disney buffs. They have additional market of the people who just love Disney, and they are just Disney nuts. But their market is families.

You look at Apple. Apple has always been about the crazy ones, the technology nerds. Part of Apple’s problem as they are growing is when it’s everyone, the nerds start to go elsewhere. Whether the watch is a big success or not I think has more to do with the product, but if Apple were to come out with a car — I know there were some mutterings that they were talking about it — would that be successful? Yeah, because if you define yourself as an Apple person, you want Apple stuff. Harley-Davidson is the same way. They are media. They advocate for a specific person, for a specific market.

That’s why I think we need to start thinking about, if you can’t say, “Okay, this is who my person is. This is who I’m advocating for. This is who I’m talking to, then I don’t think this is going to work very well for you. You need to know specifically, “Yup, this is who I got, right here.” That’s the first step. Knowing your who and starting to really advocate and to serve that particular market.

Brian Clark: It’s interesting. The hard problem of saving journalism, I think, boils down to exactly what you’re saying, because the idealism of objectivity, which we can argue about whether it was ever there or not, is what keeps news companies from becoming Fox News, which is what? Still the most lucrative news organization in the world, even though a good chunk of the world can’t stand it. They know exactly who they are talking to. Flip side, go to MSNBC, and it’s the other side of that very broad right and left dichotomy.

Ryan Deiss: Exactly. So when you’re aggregating this attention, you’re not selling information, even if what you’re giving is content. I think I’ve heard you say this before: content comes in two categories. It s information and entertainment. You must be entertainment. Okay? You must be entertainment. Now, does that mean that you need to get on there and start singing and stuff like that? No.

Brian Clark: No.

Ryan Deiss: Of course not.

Brian Clark: It’s coming up with the interesting analogy. I became notorious for using pop-culture references to try to teach people everything from copywriting to email marketing, right? Then, that became a thing, so I stopped doing it. But that was the principle at the time. Make it educational, but also bring a smile to someone’s face so that they actually make it through the article.

Ryan Deiss: Of course. Let them find someone who says, “Yeah, that’s my person.” You’re right. Fox News is a great example of that. Fox News is not information. I’m not saying this in a political sense. It’s entertainment. MSNBC, when you go and tune in — if you’re a liberal and you watch Rachel Maddow I don’t want to make this overly Americanized, because I know you ve got listeners all over the world, but this is the case for all aspects of politics. People find their person. It’s the case for business people.

You’ve got folks that really love Richard Branson, and you ve got people who really love Trump still. And you ve got all these people who have their person that they want to follow, and it’s because they find them not merely informative, but also entertaining. Offering a unique perspective, right?

That’s how you’re going to aggregate attention for your people. You’re not trying to do it for everyone. All right, there’s people I know for an absolutely fact who do not like me, but they love you, Brian. Now, maybe we can start to share them. There’s people who they think that I’m a douchebag or whatever, but they think that you’re really nice. Little do they know

Brian Clark: When I suggested that we lead with the question of whether or not you truly were a douchebag, you didn’t seem to be fond of that.

Ryan Deiss: No, the answer is yes.

Brian Clark: I’m your spin doctor.

Ryan Deiss: Yes, absolutely. Thank you.

Brian Clark: I know you’re solid.

Ryan Deiss: He’s my PR guy.

Brian Clark: Yeah.

Ryan Deiss: No, but you get around. There’s people that like me, and there’s people that don’t. There’s people that like you, and there’s people that don’t. At the best, all you can be is you, and I know that sounds cliché, but it’s true.

Brian Clark: No, it’s true.

Ryan Deiss: When you’re aggregating that attention, remember that you’re an entertainer. You’re not an informer. The people in the evening reading the national news, I’m sure they get paid well. If they are on ABC or whatever, they don’t get paid anywhere near as well as entertainers at the top of their game and get paid. You’re an entertainer. You’re a story teller.

You have perspective, and you have opinion, and that s why people are going to tune in and continue tune in. That s step one, to start aggregating that attention, whether you aggregate it through a blog or through a podcast or whatever medium you re most comfortable with. And you shouldn t limit it to just one. Wherever you start, though, just remember that s what you re doing. Have that market.

Why Advertising Is Market Research More Than Monetization

Brian Clark: The next step, which is the one people struggle with, is figuring out what people want to buy, and you have a very interesting perspective on this. We both believe in building audiences, the warm relationship, the know, like, and trust, yet you advocate using advertising or cold traffic to actually figure out what people want to buy. Am I getting that right?

Ryan Deiss: Specifically advertising on your site to figure out what they want to buy. I think that you should advertise. Really, the big mistake that a lot of content marketers run into is — and I hear them brag about it. They re like, We don t allow any advertising on our site. That s fine. We don t really allow any outside advertising on Digital Marketer either. And others are saying, We don t really do any promotions or anything like that. We don t allow any third-party offerings.

It s okay. It s just that you re limited. You re limited to what you can guess the market wants to buy. While I don t believe that advertising is a great monetization strategy long-term for a media property, I do think that advertising, whether you re doing it by just opening it up and allowing advertisers to come in or whether you re advertising stuff as an affiliate, I think that advertising it s great for market research.

Brian Clark: I got you now, okay.

Ryan Deiss: This is how you figure it out. How did Thrillist know that JackThreads would be a good acquisition?

Brian Clark: Right.

Ryan Deiss: JackThreads had advertised on their site and kept renewing.

Brian Clark: Yeah.

Ryan Deiss: That was always my point. If they keep buying, then clearly they re making more off of this than I m charging. Maybe I should be them. Maybe I should do that. And I love advertising for market research. I love advertising for figuring out what people want to buy over surveys, for example. I ve heard a lot of people say, Oh, survey your list and ask them, but there s two big problems with that. Number one, surveys give you the opinion of people who are willing to take surveys.

Brian Clark: Yeah.

Ryan Deiss: Me? If somebody is like, Oh, take a survey, I m like, Oh, that s okay, I have

Brian Clark: Never. I don t have time.

Ryan Deiss: I have a life, right?

Brian Clark: Yeah, and it s interesting. I just had Darren Rowse, who comes firmly from the blogging world, but he was talking about making affiliate offers. And that s something I did in the early days of Copyblogger, too. Because you re right. It s not until they actually buy. I ve never surveyed my audience one time, ever, to figure out what they buy. I do a lot of weird observational stuff, and then I see if they buy things.

Ryan Deiss: We have surveyed, and some of our biggest flops have come because we gave people what they wanted, what they thought they wanted. And the second way I said it was actually more accurate. The reality is, most people don t know what they want. The more important reality is that it s not their job to figure that out. It s yours.

Brian Clark: Right.

Ryan Deiss: That s the value that you provide. You re the expert. You re the authority. You tell them, Hey, you should want this. Even if you don t realize it right now, we ve done the research. We ve done the testing. We figured it out. You re going to like this if you buy it.

Now, a lot of people are very uncomfortable with that positioning, and they re like, Oh, no, let them tell you what they want.

I think that s one of those logical lies. That s one of those things where I get accused of being douchey, in the, You re selling people stuff and they haven t asked for it yet. I was like, I know. That s also what every great product and business has done. They ve given people something ahead of when they knew they needed it. There s always a place for filling those. There s obvious stuff. You know you should be doing this because it s working, but I would just be very leery of just putting it back on your customers and saying, You tell me what you want. It s like, Are you going to do some of the work, Mr. Website Owner? Would you do some of that?

I think people vote with their wallets. If you have a media property right now and you re not taking advertising and you re not monetizing through other ways but you ve got this just staunch approach that, No, we re ad free, you re missing your greatest market research opportunity.

If just the idea of accepting money does it, then I guess place ads for free. At least get some data from it or run it as an affiliate. Go out there. Find offers. If you re in a market worth being in, there will be someone selling something to your people. If you truly can t find anyone else out there serving the market, then you ve unfortunately chosen very poorly, or you re just not looking hard enough, because it s out there.

How to Develop Proven Products and Services

Brian Clark: This reminds me of, remember the old copywriters advice that If you see the same piece of direct mail in your mailbox month after month after month, study it, because it s working?

Ryan Deiss: Yeah.

Brian Clark: Yeah, that s where copywriters would draw some of their inspiration, because they knew it was actually being paid to be mailed over and over and over again. Therefore, it s probably a control, which means there s good stuff in there. It s the same concept, but this is even more direct. Your exact audience is, for example, buying from JackThreads enough to make it worth advertising over and over and over again. Thrillist says, Why don t we acquire that company? It s simple, but it s brilliant.

Ryan Deiss: You re a student of copywriting and marketing. You ll really appreciate the story. Have you heard of Troy-Bilt?

Brian Clark: No.

Ryan Deiss: They sell rototillers and gardening things.

Brian Clark: Okay, yeah.

Ryan Deiss: They ve run short-form infomercials and have been in catalogs forever. You ve got the Troy-Bilt tiller. Here you are, and you ve got this land, and you want to plant a garden. So you buy this rototiller thing, and you go out there, and you chunk it all up. The owner, I think he s long since passed away, but the eventual owner of Troy-Bilt: do you know how he made his riches the first time around?

Brian Clark: No.

Ryan Deiss: Selling rabbits feet.

Brian Clark: Really?

Ryan Deiss: Check this out. The original offer for the rabbit s foot — it s like the scammiest thing in the world. It was basically, This is a magical rabbit s foot, if you wish I mean, you remember rabbits feet, right, when we were kids.

Brian Clark: Yeah.

Ryan Deiss: You could buy them. They were real feet of rabbits. Disgusting. No one would even come close to accepting this. Back in the day, everybody was like, Yeah, sure, I m going to walk around with a rabbit s foot on my keys. This makes tons of sense, apparently.

The original rabbit s foot offer was basically just, If you wish upon this rabbit s foot, all your wildest dreams will come true right now. Understandably, the government stepped in and said, Hey, homie. Um, you can t say that. Now, he tried to get around it, being like, It s a religion, and then this and that, but it was like, No, dude. You re just lying to people. Stop.

His business, appropriately so, was done. But he was able to rent his mailing list. He found that there was this person who had this rototiller that kept renting the list over and over and over and over again. He reached out to that person and acquired the company. Reached out to the person, acquired the company, and the Troy-Bilt company — which is now a gigantic company who employs hundreds if not thousands of people, giant, giant company — was built on the back of that one offer.

Now, again, I don t suggest that you go out there and sell a bunch of scammy stuff to build an audience.

Brian Clark: No, but the principle is, though, that he determined something that was selling off an audience he already had.

All right, step three — and this is another place that other people get stuck — we ve talked in a couple of different contexts just now about acquiring companies, obviously not something that is open to everyone right out of the gate. I ve talked a lot about how I used partnerships and collaboration to get products done, and we build a few here and there.

What s your favorite approach? I know you guys create your original courses and membership sites. What do you do for your more physical-oriented companies to get those products to exist?

Ryan Deiss: If it s an individual product, we would always rather acquire if we can get it. If we find that this particular thing is selling really, really well, then we ll try to acquire it. But like you said, that could be expensive. To go to somebody and say, Hey, I want to buy your company can be tough.

I ll also say this: don t assume that you can t do it. If it s a good company, if it is a good company with good financials — solid financials that a banker would look at and say, Okay, and it has good cash flows — what we ve been able to do in the past is purchase companies with a fairly small down payment and using debt, bank debt or from a high-net-worth individual and just paying them interest on it.

Brian Clark: Right.

Ryan Deiss: We ve been able to acquire companies on the cash flow that is currently coming out of that company.

Brian Clark: Right, makes sense.

Ryan Deiss: You go, and you buy the company for a little bit down, and then the cash flow that the company is creating today is basically what pays for the company. As soon as you turn your media toward it, it s going to go up.

And there are some other things, so that works out well. Not every company is for sale. It could take a while. It could be really difficult. Joint venturing is another way to do it, and I know you ve done that a lot. You go to somebody who s got it, and you say, Hey, let s get in this thing together. I ll put my media muscle behind it, and you handle this part.

Maybe your partners or maybe you just get a preferred royalty or commission or something like that. The other thing that you do is just create it or source it. So we ll go, if we know something is selling really well, and get it sourced. We ll go to China if we need to, and we ll source something. Or if it s an information-based product, which we sell a lot of those in the crafting space.

We have a product on how to make cheese. We don t know how to make cheese. We found someone who knows how to make a cheese and do other types of crafting. We just put out a casting call: Hey, who knows how to make cheese? We found somebody that does, hired a production company. The whole thing cost us I think between $15,000 and $20,000 to put together. A lot of people would say, Oh my gosh! How could you spend that much? Because we know it would work. We had already tested it. We already knew it would convert. It was already there.

When you no longer are guessing, when you re no longer saying, Well, I guess I m going to create this product and hoped that people buy it, when that s no longer what you re doing, you can make investments like that in these different products with great confidence. The idea is just get it, and then when you have it, be transparent that it s yours. A lot of people say, Don t you have to disclose? whereas if it s advertising you don t really have to disclose. But if it s yours, you re receiving commission, and you have to disclose it?

My thing is yes, you do, and you should. If you ve done a good job aggregating the attention, gathering the crowd, and they know, like, and trust you, then they re going to be excited that you have it.

One of my favorite examples is this: we do a big event every year called Traffic and Conversion Summit. It s a bunch of small business owners talking about traffic and conversion, as the name would suggest. Last year at Traffic and Conversion Summit, we gave a booth to a company that we had started called Hong Kong Tailors, and Hong Kong Tailors makes custom suits.

I get up on stage, and I say, Hey, by the way, one of our sponsors isn t so much a sponsor. We actually own them: it s Hong Kong Tailors. If you want to go out there and get fitted for a suit, you can. By the way, if when your suit comes you ve got three arms, hey, my bad. Please don t be mad at me or anything like that. People laughed and rushed out, but they wanted to get the suit, even though what do I know about suits? Nothing. They know me. They know Digital Marketer. They like it, and they trust it, that no matter what, we were going to do right by them.

And we kept hearing that again and again and again and again. The same was true with Thrillist and JackThreads. If you love Thrillist, you d wanted to now buy from JackThreads. They had created Disney World.

Brian Clark: Yeah, absolutely. I mean, if you ve done it correctly, not only should you be proud to announce that it s yours, but you should get that type of reception. And again, you re way safer. If we re still in the realm of any sort of guesswork, it s about as highly educated a guess as you can get when you re actually serving an audience of real people as opposed to some idea you had that you ran out and built and then try to figure out how to sell.

Ryan Deiss: Yup, and we ve done it in, like I said, the crafting space. We ve done it in the makeup space, all these different markets that we know nothing about, because the market tells us, This is what we want. Okay, we ll get it for you. We ll get it for you.

Brian Clark: You may be infallible, but I ve made about 100,000 mistakes over the last 17 years. If you can find that you have made a few, could you share them with us?

Mistakes and Misconceptions to Avoid

Ryan Deiss: Yeah, this one time I thought I made a mistake, but it turned out I didn t.

Brian Clark: Ba-dum-bum.

Ryan Deiss: Now, we ve screwed up a lot, tons, tons and tons and tons, in fact. Yeah, here are some of the things that we ve figured out along the way. We were really successful early on when we were doing this in having a subscription component as one of the things that we are offering. Whether it was a higher level of the property or an association or a thing-of-the-month that you re going to get. We tried to force-feed that into every market that we went into, and we found that it just flat-out it didn t work in a lot of them.

I think that not every market is going to lend itself to subscription, and that s the thing that a lot of people in the media space want to do. They want to create, Oh, we ve got this club, or this higher level. We ve got this pay wall for the stuff in there. We have it with Digital Marketer Lab, which is the higher level of Digital Marketer. You have it with Authority, which is the higher level of Copyblogger.

It works in a lot of markets. It doesn t work in a lot of markets, too. Don t necessarily try to force that. Don t necessarily try to force the subscription side of it. Just figure out what they want.

And that s the thing. In a lot of these markets, if we had gone out and tested or just acknowledged why there s no really other subscription offerings in the space, maybe there s a reason for that. They re just buying a lot of stuff. Let s just give them what they want. That s the first thing that we learned. We wasted so much time and money really trying to force subscription.

Brian Clark: Yeah, let me share something on that, because you re about to see the next ridiculous VC and private equity bubble. We went out and talked to a few people, and again, we ended up going with debt. We took out a couple million bucks instead of taking someone else s money, because we have a good relationship with our bank, and we re highly profitable, all those things that investors apparently hate. But all they want is recurring revenue. Like every company in the world is going to be recurring. I m just like, Oh, Lord, but that how it works. It s the next trend, and then there s nothing but that.

Ryan Deiss: Yup, and what you re starting to see is people not wanting it, not wanting to sign up for it, and when they re in it, canceling like crazy because they look at their credit card statement, and they re just inundated with all the subscription offerings. I don t need a subscription service for toilet paper and a different one for razor blades and a different one for this. It s just kind of like, God dang, guys. I think you re still going to have it in premium areas and associations.

Brian Clark: It makes a lot of sense. Like your site and Authority, these are continuing education for professionals, and they re reasonably priced. The return you get on that it makes absolute sense. And maybe the razor thing. I ve actually contemplated that because the razors in the store are outrageously expensive. Maybe that kind of recurring commodity thing when you don t want to think about it and you don t want to go shopping and you don t want to run out, maybe. I don t know.

There is a limit to it, especially when you start seeing your credit card statement, and you re like, I don t need all this stuff.

Ryan Deiss: Yeah, I m not saying, Don t do it, but don t force it. If it s not there, if you re not seeing it, don t force it. We had that in the beauty space, because we re like, Oh, Birchbox.

Brian Clark: Yeah.

Ryan Deiss: What we found is that type of thing, people really aren t wanting that. Now, in some other aspects of beauty, we can pull it off, but when it came to makeup samples and stuff like that, it wasn t jiving.

The other thing I would say is, Don t overvalue product. People spend so much time creating their product. People will spend years working on their products. People will invest lots of money, or they ll try to buy a business that has a product that they think is really, really cool, but without aggregating the attention first.

It s just so exhausting. I ve seen this happen to friends of mine, where they ve just spent a lot of time creating a product, creating a product, creating a product. Now it s done, and they re like, Okay, it s done. Now what do I do? It s like, Well, now the hard work starts, so yeah. And it s going to be a while. Whereas when you aggregated the audience and you know what you re doing then you go and you create the product, it s exciting, because when it launches, boom: you just announce it to the audience that you already have, and you don t have to wait.

Just remember: for us, and I think this is important, a product does not a business make. For us, the market defines our business not the product. You have these people that are here and then they re gone. They re one-hit wonders. That s like a singer that had their one great song. That was their one product. That s the piano key tie.

I want to be Chanel. I want to know, Okay, this is the Chanel woman. We need to make her this type of person, this type of dress. And as long we re always advocating for this type of woman, the styles may change, but we ll always be here.

That s the other thing. I think if you re media-first, then that s kind of innate. You never get tied to a product. But just be careful: no sacred cows out there with the products. Then finally, don t limit yourself to what you know or to what you are passionate about.

I see people all the time doing this. They re like, I m really passionate about this. I m like, That s really adorable. Do you know that other people are, too? Are they willing to pay? Like, Do you have a reason to exist there? Think like a publisher. Think like a producer.

I mentioned before, I m not really into outdoors. One of our markets is Survival Life, right? We re in the survival and preparedness space, which now, it s really more outdoors. We sell a lot more camping gear and stuff like that. We actually have one of the top-selling tactical knife brands in the U.S. because of the media that we own. I m not passionate about that, but I don t have to be passionate about that, because I m the publisher. Publishers aren t passionate about everything they put out. I m certainly not passionate about makeup.

Brian Clark: It s the producer mentality. But eventually, producers make all the money if you think in terms of the Hollywood model, and they re not necessarily passionate about every film. They are definitely following that methodology.

I think it s hard when people start because if you re the content creator, it takes something to get you to show up every day. If you change your model, then it s much easier not to have to need that subject matter passion in order to show up at work. That again, it goes full circle to what we said, which is that entrepreneurs tend to get bored, and you re going to break the thing if you re in it too closely. Maybe step back a little bit, and think about more of a business/producer mentality.

Ryan Deiss: I m not saying there shouldn t be passion on the team. I m not passionate about makeup, but we have somebody on the team who is. There needs to be that passion there.

What I m suggesting is, if you re content marketing about content marketing because you love content marketing and all you want to do is talk about content marketing, then maybe and it s not working out and you re having a hard time breaking through because of jerkfaces like Brian Clark who are gobbling up all the content marketing real estate. Maybe what you should do is deploy your content marketing expertise and skills as a publisher, as the — what I would argue — more important half of a business partnership with someone who is passionate about a subject, who can be the expert, who can bring that passion, who can bring that enthusiasm.

What you bring is the enthusiasm for the thing that you re great at, which is content marketing, which is publishing. Just don t limit yourself and your market to what you know. There s so many out there and so many that are underserved that want to be served. Certainly, they want to be served in this model where you re giving them that one-stop-shop, Disney-World experience.

Brian Clark: Well said, and a great place to stop, I think. Tell people where they can find you. And I just found out that you have finally entered the world of podcasting. Tell us a little bit about that.

Ryan Deiss: Yeah, you can find me you want me to just give them my home address so they can just come and swing by?

Brian Clark: Yeah, I m parked out in front of your house right now.

Ryan Deiss: Yeah, 1439 Elm Street. No, I m just kidding.

DigitalMarketer.com is where we do that voodoo that we do, and hopefully you go to Digital Marketer and read some stuff that we ve got on our blog there. Maybe you like it and you want to sign up so we can inundate you with email and offers unapologetically. DigitalMarketer.com is where you can definitely find us.

And yeah, Digital Marketer just launched its first podcast. It s called Perpetual Traffic. We debuted at number one in business. I think we got up to like number seven in all podcasts. We were able to hang out there for a good little bit.

We re still doing really well on the business and the marketing categories, but everyone s like, How did you do that? Simple. We own media, and so when we launched it, we were just able to tell all of our 500,000 closest friends that we just launched a podcast. That s the power of already gathering the crowd. When you own media, and not only can you do native commerce, but you can also birth other media. That s why I think everybody who s here, we re totally preaching to the choir if you re listening to this, but just know that you re starting at the right place.

Be thankful that you found this world when you did, because you re doing it the right way. You re definitely starting at the right place. Once you ve aggregated the attention, then you can go out to all those people who started at the product phase and are weeping and gnashing teeth because they spent all their time on their product and they don t know how to sell it, and you can go and really help them out one day.

Brian Clark: Yup, in its early days. Everyone wants to say, Well, if I would have started 10 years ago. It s still early, I think, in this particular transition, if you will, from the way media used to work. And it s kind of falling apart in front of our eyes. We re inventing the future, which, not to be grandiose, but it feels pretty good.

Ryan Deiss: We were born in a wonderful place and time because yeah, I agree. The fact that no one can agree even on what to call certain things tells you that we re early — really, really early — but it s going to happen fast, so I wouldn t hang around too long.

Brian Clark: Yup. Ryan, thanks for stopping by today. This has been a fairly substantial conversation, but it s also right up my alley. I love your perspectives. I m going to kick around this native commerce term a little bit. I m always really slow to adopt new terminology, but it makes sense.

Ryan Deiss: It does, and I agree. Thank you so much for having me. Really, that means a lot.

Brian Clark: Yeah, no problem at all. All right everyone, we will be back next week with more, but hang in there, keep going, and we ll talk soon.

The Transcript

Behind the Scenes: The Reimagining of Copyblogger.com

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.

Brian Clark: Hey, rainmakers. Welcome to another episode of the show that talks all about creating digital products and services for growing your own online empire. I’m your host, Brian Clark, founder and CEO of Copyblogger Media, and as has been the case lately, I have a co-host, a new voice to listen to, a very smart person, Pamela Wilson.

Many of you may know Pamela as, I think, the longest running guest poster on Copyblogger. She contributed from the outside, had her own business for many, many years, and I’m proud to say that now she is on the inside. Pamela, how are you doing?

Pamela Wilson: I’m doing great. I’m happy to be here.

Brian Clark: I’m happy you’re here, too. All right. Tell everyone what your official title is. I’m actually losing track. We’re growing so fast lately.

Pamela Wilson: My official title at the moment is vice president of educational content. It’s specific enough to sound really interesting, but not specific enough to tell you exactly all the little pies I have my fingers in.

Brian Clark: You do. When you first came on with us, you were very, very much entrenched helping us out with Rainmaker and getting the onboarding into a better process, and then knowledge base, the video — all of that great stuff. Then you shifted over.

Now, that title actually makes sense. We just got together last week in Nashville and had a great meeting. At some point, I think that’s a very descriptive job title for you, but right now, I think it’s easiest to say that Pamela runs Copyblogger.com. She’s the latest in a long line of people.

First there was me. Then there was me and Sonia. Then there was Sonia, then Robert. Then Jerod did a year before he transitioned, and now Pamela has taken over that role. The best thing that I could say about this, Pamela, is that everyone who has run Copyblogger is still with the company and in upper management. So congratulations, or don’t screw up — which one do you prefer?

Pamela Wilson: That’s a relief that people are sticking around after they’ve gone through what I’m going through right now.

Brian Clark: Trial by fire?

Pamela Wilson: That’s right. That’s a good sign.

Brian Clark: Yeah. I want to talk a little bit about the things we covered at the meeting. It was super productive and, for me, at least, super exciting. Copyblogger’s nine and half years old now. It’s kind of crazy to think about it. We’ve always been good about evolving, both in terms of content, types of content, design especially. We’ve had the same one for a while. We’ll talk about that. I just feel like this one is a really big one. There’s been a lot of things that I’ve wanted to see done over at Copyblogger.com that we just didn’t have time for, so they got put to the side a little bit.

Then you came on board, and you said, “I want to do this, this, this, this, and this.” I’m like, “Yes.” You’re like, “Wait a minute. I was expecting more feedback than that.” I’m like, “No, it’s like you read my mind.” It’s so funny that you complain that you would have an idea, you’ll send it to me, I’ll say, “Sounds good,” and then you’re like, “I don’t think he’s even paying attention to me.” But no, you’re on target.

Then the funny story here is that we had a little bit of a screw up. You got a three-paragraph email from me, and you’re like, “Okay, he’s paying attention, number one, and number two, I think I like those two-word answers better.”

Pamela Wilson: Right. I was giving you a hard time. This was last week. We were all sitting at a big table eating dinner. I said, “If you get an email from Brian that has two or three words, that’s great. If it has two or three paragraphs, you need to sit down and take a deep breath before you start reading it.”

Brian Clark: It wasn’t that bad.

Pamela Wilson: No, it wasn’t bad at all.

Brian Clark: I think I ended with a smiley face. Come on now.

Pamela Wilson: No, and honestly, it was well-deserved. It was something we should have caught. Yeah, I’ve had a lot of ideas, and the interesting thing is, having been a reader for so many years, it feels like a tremendous honor to be in a position to make some of the changes that I would have loved to have experienced as a reader. It’s a wonderful position to be in. I’m excited about all the things we’re talking about doing going forward.

Brian Clark: Yeah, I think that’s the perspective that matters and why you were so on point. I don’t know that these things were obvious to everyone, but that’s why they were gnawing at me. The fact that you keyed in on them was just a good sign for me. It just validated that we both were on the same path.

Our Multi-Content Platform Future

Brian Clark: Talking about Copyblogger just a bit, Copyblogger is what started it all, Copyblogger.com. It’s the mother ship of the company and has been. It’s interesting because it’s more important than ever, yet we’re really trying to balance things out between Rainmaker.FM, Copyblogger, and StudioPress going forward, which might lead some to believe that, “Okay, so Copyblogger’s less important.” No, it just means the other two sites need to become as important. Copyblogger will continue to set the standard.

That’s really how I view the work you’re about to do. In some sense, we’re trying to take some of that load off of Copyblogger and let it become what it is at its core. Sometimes people don’t realize it, because we talk about StudioPress, Synthesis, and Rainmaker Platform, but at its heart, Copyblogger is a membership site.

It’s a particular model that we started two years ago and then we let stay while we worked on other things. This is an overarching membership model site approach that we’ll be talking about more in the future. It is something that scales, and you can replicate this model. So more on that later.

Coming in to Copyblogger, you had to think about even more than that. Any good membership site has its attraction content. It’s got its email capture process, which is in place. It’s got the back-end sale and all that. You’re able to come with some infrastructure built in, yet still have to reimagine how that all works.

Let’s talk about content. I think people have been noticing that Copyblogger has rejuvenated a bit in many ways — images, the content, different types of posts that we’ve never done before. I’ll shut up, and you tell us a little bit about what you’ve implemented so far.

Re-Focusing on Copyblogger s Core Audience

Pamela Wilson: The first thing to know is that my background is publication design. I’ve done that for decades, publication design and putting together publications. I very much see Copyblogger as a publication. It doesn’t have pages that you turn with your fingers, but it’s definitely a publication. I approach it that way in terms of the content that we put on the blog and the way we treat our images. All the elements, in my opinion, are elements of a really good publication. That’s my angle. That’s my approach to everything.

The one thing that we have been trying to do lately is to become very clear about the audience that we’re serving. As a business, we’re seeing that the Rainmaker Platform and Rainmaker.FM serve one specific audience, StudioPress serves a slightly different audience, and then Copyblogger serves its own audience.

Our audience is people who identify themselves as professional content marketers. They either identify themselves as professional content marketers because 1) they have that as their business and they offer that as a service, 2) they identify themselves as professional content marketers because they are business people who use content marketing in their businesses, or 3) maybe they’re in a large organization and they’re working in the content marketing field.

They self-identify as someone who takes content marketing seriously and who uses it within a business context. Those are the people we’re really trying to serve with our content.

Brian Clark: Yeah. That’s dead-on. I think that’s been the case, yet we meandered a little. We got a little fuzzy on that. Also, with your background, when I started Copyblogger, it quickly was one of the first people to ever take outside writers, which wasn’t done in blogging at that time. I saw it as a magazine, not a blog, despite the name, yet I had no magazine experience whatsoever.

I think that’s part of the reason why we just seem to see eye to eye on this. You have the specific philosophical and conceptual understanding of what I’m struggling with all along, which is, “Yeah, it’s a magazine.”

Why a History in Print Magazines Helps

Pamela Wilson: It is. It’s a magazine. There are elements from the magazine world that we can use when we talk about how we put content on Copyblogger. For example, one thing that you see in magazines is, typically toward the front of the magazine, you have columnists. These are people who write for the magazine every month. They have specific voices that people cue into, they relate to, and they enjoy reading.

That’s one of the things that we’re trying to feature on Copyblogger — these specific voices. This is our new philosophy about guest posting. We are going away from this model of just taking guest posts from anyone. Instead, we’re trying to develop specific voices that people get to know over time.

We’re helping those people to develop voices around topics that they really have expertise in, topics that they’re known for. We’re working with them personally so that we can feature their best knowledge on the blog and develop those voices so that people get to know them over time.

Brian Clark: Absolutely. We’ve always been selective about guest posting. Again, going back to that magazine style, not only did I accept them early on, I edited every one myself. Sometimes — dirty little secret — I rewrote certain people’s complete post. These are really well-known people, but they were just a little off.

Pamela Wilson: I know.

Brian Clark: That’s not a scalable solution.

Pamela Wilson: No.

Brian Clark: So you’ve got to have an editorial approach that says, “Okay, if it’s that far off the mark, then we can’t do it,” right?

Pamela Wilson: Right. There’s a style to Copyblogger posts that does well, and that’s what we’re always aiming for. There are times that, if you’re just accepting guest posts from anywhere, you end up with this post that you do so much more work on than if you’d just written it yourself from scratch. We need to figure out how to best use our resources.

When we thought about it, it seemed to work better to just develop a small group of writers whose work we knew and who had expertise in specific areas that we wanted to be able to share with our readers. Then just work with those people, put them on a schedule so that they knew when they would need to get their piece in. That’s worked really well.

Brian Clark: Yeah. Let’s talk a little bit about the new images that we’re using. You weren’t involved in this conversation until it came to execution, I guess, but I was grumping out at Robert, saying, “We need better images.” Robert’s been complaining about image. He knew that, but I kept saying, “Okay, it’s not that big a deal with the talent we have in this company to produce these images.”

He pushed back a little bit, and he said, “Well, this, that,” and I’m like, “No, we got to do something.” I think that was the last I was in it. Then you showed up. Tell us the story. Once it gets turned over and I see that something great happened, I’m happy. I don’t necessarily know how the sausage was made to get to that point.

The Power of the Right Images and Colors

Pamela Wilson: It was interesting because we decided early on that, if we’re going to do these images, we wanted to make them look very custom. The thing that happens with blogs occasionally, especially if it’s a big site like Copyblogger, is you’ll buy an image, you put it up on your site, and then people just pull it off your site. It’s not branded with your name or anything like that. People just pull the image and use it on their own sites or grab the URL to the image if you’re not doing it right and put it on their own sites. It’s not a good idea.

We wanted to do something branded. We also wanted those images to be able to stand by themselves in social media and always look like they came from Copyblogger. From a visual standpoint, the way that sausage is made is you choose a set of brand colors. You choose from the colors that you’ve always used on your site, and you choose specific fonts. You do not stray from those two choices. You stick to those colors. You stick to those fonts.

It’s just a matter of working within those limitations. When you do that, everything that you put together looks like it came from the same organization. It’s amazing actually.

Brian Clark: Branding 101, on one hand, yet not a lot of people were doing it for many, many years.

Pamela Wilson: Yes, and that’s something I talked about all the time on Big Brand System. Those are basic building blocks of putting together a visual brand that’s recognizable. We made that decision early on. We have the Copyblogger red, the Copyblogger green, and the Copyblogger blue. We do not vary from those three colors. Then we have our font that we’ve used very consistently. Then, it’s just a matter of picking images that add shades of meaning to the words that are already on the page.

You’ll see occasionally we go for humor. You can’t do that every single time, but we go for humor once in a while just to keep them interesting. We try to make them visually interesting and try to get the reader to think a little bit by looking at the image. For example, the one we ran just this past week was talking about landing pages. We have this big jet coming in for a landing. It’s just like a slight shade of meaning that you’re adding to the words. It makes it interesting.

Then the other thing that we do — this part I’m doing basically — I’m coming up with text for those images. It’s an opportunity to almost have a second headline at the top of the post. You know how it is. When you choose a headline, you’re choosing a headline, but there are all these other headlines that you’ve had to eliminate. That can be kind of painful.

You look at some of these alternate headlines that you didn’t run, and you think, “You know, I wish I’d been able to use that word or that phrase.” This is an opportunity to use an alternate headline and give an additional shade of meaning to the post as well. You’re just adding a little extra text at the top.

Brian Clark: Yeah. When I adopted a similar image strategy in the early days of my newsletter, Further, I figured out that I was using these quotes in the content, and then I had my headline. Then I went back to old school with David Ogilvy and then made the image complement the headline with a quote that was relevant. It’s amazing how better it did on social media. It’s not even close. Sometimes 50 times better. That’s crazy. Images matter. I’m a word guy. I tend to neglect that, but I’m definitely being convinced.

Let me ask you this before we move on. It’s a natural segue to the site redesign. I noticed that you are using images and maybe the headline, but no link. You’ve got a hashtag that says ‘seen on Copyblogger’ or something like that. You got to tell me about this. Honestly, this is the first time I’m asking her this even though I noticed it. I’m like, “You always have to have a link.” What’s the thinking behind that?

Pamela Wilson: Okay. I think what you’re seeing is something that I just started doing recently, and it’s on my personal Instagram account.

Brian Clark: Oh, and it’s also posting to Twitter. I got it. Okay.

Pamela Wilson: And it’s posting to Twitter, and it’s posting to Facebook, your favorite place. That’s just something I’m doing on my personal account. The thing about Instagram is, on Instagram, you cannot put a link. It’s not an active link. I’m doing those from my phone, so I developed this hashtag, #readitoncopyblogger.

What I’m trying to do when I post those is to train people to go to the Copyblogger blog every day to read that day’s fresh posts. That’s a completely separate stream of images that I’m just doing for fun. I apparently can’t get enough of images, so I have to create an extra one. Those are not the post images. That’s a separate thing.

The post images go out on Twitter. They look great on social media because we’ve developed a size that crosses all the different social media platforms, doesn’t get chopped up, doesn’t look cropped off, or anything like that. That size seems to work pretty well, and those images stand by themselves. They do have the Copyblogger logo on them. Those always go out with a link.

When to Functionally Restructure Your Site

Brian Clark: Okay, makes perfect sense. Okay, design. I would say that the other thing Copyblogger has been known for throughout the years, other than content, obviously, has been design because it’s really important to me. I’m not a designer. I can’t do it, but I can spot it. When I see it, I know it’s good.

Back to 2006, with Chris Pearson’s first Copyblogger design, which kind of made his career — and that’s credit to him — it was not like anything else that was being seen in the blogging space. That set a standard. Of course, every design Rafal has done has been amazing and right there at the edge. Maybe not with the coolest hipster designers, but for the rest of us, it’s cutting edge.

This is the first time that you took over this project, along with Lauren Mancke. Rafal’s working with me on the Rainmaker side, and we’re redesigning those sites as well. We’ve got our hands full.

I got to admit, I saw the mock-ups, and we went through the why and how it all works. Copyblogger’s a complex site. You have Copyblogger, which is the outside. Then you have My Copyblogger, which is the free member area. Then you have Authority, which is the paid member area. It’s not an easy task. We had more mock-ups than I think most ‘blog redesigns’ would ever have.

Pamela Wilson: Yeah.

Brian Clark: Give us just a feel for what you’re thinking. What were the challenges that you saw with where we’re at and how you decided to try to fix them?

Pamela Wilson: First of all, the current design is amazing. I think most people would be very happy to have a site that looked as good as Copyblogger looks now. That’s the initial challenge –taking a site that is not terrible and then trying to improve on it. The new site is going to be super clean. One of the things that we were trying to accomplish was to make it a really nice reading experience. Rainmaker.FM is all about audio. Copyblogger is all about text.

We want our readers to be happy and to have a really good online reading experience. It’s going to be a beautiful online reading experience. I can’t wait for that to go live. One change from what we’re doing now is that Copyblogger content is going to have its own page, and then Rainmaker.FM audio content is going to have its own page.

Brian Clark: Yeah. I was about to say, we’re publishing more content by far than we’ve ever published, but that’s because we added in audio. The way that the site infrastructure is now, we do have some mechanisms to keep the article at the top of the stream and this other kind of stuff.

Trust me, going back to that mother ship comment, it’s been very good for Rainmaker.FM to get that kind of exposure from an established site like Copyblogger, but even I was getting a little stressed out about the flow of it. Separate audio channel, separate article channel. Very simple fix, but it’s all in the execution.

Pamela Wilson: Right. I just think that’s going to be a nice reader experience. There are some people who like both. God bless them. I don’t know how they have time to consume both, but there are some people who like both the audio content and the reading, text content. For the most part, people prefer one or the other.

This is going to make it very easy for them to find whatever kind of content they want to consume on Copyblogger and just go directly to it. There’s going to be a lot to love about the new design. There’s going to be an easy way to filter through our content and learn about something that you’re specifically interested in.

If you’re interested in conversion, for example, you can sign up for materials that we are going to put together for you that are all about conversion, that will teach you about conversion, give you all the information you need from our archives, basically to help you understand everything you need to know about conversion. We’ll have segmented information so that people can grab what they need and what they’re most interested in. It’s going to allow us to serve up more targeted content.

The one thing I hear from people all the time when I talk to them is, “I went into Copyblogger, and you can tell there’s so much information there. It’s just amazing, but I don’t know how to find it.” It’s like being lost in the New York Public Library and not having a Dewey Decimal System or something. You just know there’s a lot there, but you really don’t know where to find what you’re looking for. That’s one of the things that we’re trying to improve on, to make that experience better.

Brian Clark: Yeah, two years ago, we did some pretty meticulous planning. We had all these different pathways into My Copyblogger, which is the content library of ebooks, a course, and all this high-value stuff. We had all these content landing pages that were drawing in search traffic, and then we had sidebar navigation. It worked. It was a vast improvement over before. Our email opt-in rate went up 400 percent, so yeah, “Yay!”

But the approach we’re going with now is just so smart on the topical pathway. Ultimately, you may end up in that vast library of great stuff, but it’s also a pathway that allows us to tailor the experience better for you. That’s something we’ve been talking about a lot — the logged in experience, adaptive content, all of that stuff. There is no doubt that we are drinking our own Kool-Aid here.

Pamela Wilson: Right. It’s just a better user experience. One of the things that we would like to be able to do is, for example, if somebody raises their hand on the frontend of Copyblogger and says, “I want to learn more about design,” and they give us their email address, we will send them targeted information about design. If, for example, they decide to join our community, Authority, we will give them a targeted experience with all of the paid content that we have inside Authority.

When they first log into Authority, we’ll have a lot of audio and webinar content lined up and waiting for them about this topic that they are most interested in. That doesn’t mean that they can’t access the rest of it. It’s just we’re going to create this nice silver platter and hand them over the content that they’ve said they most want to learn.

The Beauty of Abundant White Space

Brian Clark: Yeah. As you can tell, this is going to be a big project. It’s got marketing intelligence, automation involved on the backend, but I just can’t wait to see the new site. It’s beautiful.

Pamela Wilson: I know. I can’t wait either.

Brian Clark: If only we could just have that first and then work on it. But, I know, we need to do it all at once.

Pamela Wilson: Yeah.

Brian Clark: It’s interesting because I don’t know if Rafal saw what Lauren and you had done, but his new designs for Rainmaker.FM and Rainmaker Platform, they’re not the same. But that use of white space, oh my gosh, it’s just striking.

Pamela Wilson: Yeah, it’s like they’re speaking the same design language. I don’t know if they saw it either. I don’t think that they did, though.

Brian Clark: I don’t think so. That’s what’s amazing to me because it’s kind of like parallel thinking without talking.

Pamela Wilson: We got some design telepathy happening here.

Brian Clark: Exactly.

Pamela Wilson: Good stuff.

Brian Clark: As a business unit, separate from everything else, again, Copyblogger is effectively a membership site. There are free open materials. There’s free behind-the-wall materials, and then there’s 250 hours now of training inside Authority. Plus we do two new webinars every month, and we do Q&As every month. It’s always growing. I know you have some ideas for Authority. We kicked around quite a bit. I’m not going to put you too much on the spot, but give us a general idea. What’s going on with Authority?

The Evolution of Our Authority Training Program

Pamela Wilson: I have a lot of ideas, and we’ll have to see how we can implement them over time. They involve having maybe slightly more compact information — so easier to digest, faster to digest, more targeted content. Maybe doing things like member hot seats. Every time we do anything that is remotely like a website review or really focus on one person’s business, I notice that people get a lot out of it — not just the person whose business you’re focusing on, but everyone else who’s watching.

They always take some kind of nugget of information from what that person’s business is going through, or what they’re asking about, and what they’re confused about. I’ve thought about ideas like that. I have a lot of ideas kicking around. I’ve spent a lot of time in mastermind groups. There are elements to those groups that I think that we might be able to apply to Authority that I would love to have a chance to explore.

Brian Clark: Yeah. Absolutely. Good closing note here. Pamela lives in Nashville, but I was there for Donald Miller’s StoryBrand workshop, which is fantastic, by the way. We’ll talk about that in the future. Maybe have Donald on the show.

But I just launched Unemployable with basically the most basic one-page website in the world. I just threw it up there for the site critiques in a room full of digital marketers just because I love to hear that kind of stuff. Lots of great ideas. Listening to all those website critiques, just to talk about what you just mentioned, about how everyone gets something out of it, it’s true, absolutely. I don’t know if you’ve looked, but I already redesigned the site with Rafal.

Pamela Wilson: Oh, I haven’t looked again. That’s great.

Brian Clark: I didn’t waste a day until I got started on that. Good stuff. All right, Pamela. Maybe people didn’t even know exactly what you were up to because you’ve been head down since you started working. Obviously, you would have to be to come up with this much output so far, but I think people have a little bit better idea of what you’re up to. When all of this goes fantastically well, make sure you take all the credit.

Pamela Wilson: I will. Thanks for giving me a chance to talk about it.

Brian Clark: Oh, I’m excited. We had a great meeting, and I just figured there’s a lot of stuff in here that I think, just like a site review of someone else’s site, it just gives people ideas about, “Oh yeah, maybe that’s something I need to look at.” I think it was a good discussion.

All right, everyone. Thank you for joining us again this week. We will be back with more soon. Until then, leave us a comment if you have anything to add or ask. Otherwise, Pamela, thank you so much.

Pamela Wilson: Thank you.

Brian Clark: All right, everyone, take care.

The Transcript

The Membership Imperative and the Persistence of Audio Content

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.

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

Today, in the co-host chair is a guy many of you know and hear a lot of on Rainmaker.FM. It’s his birthday, so I said, “What the heck? Let’s have Jerod Morris come on the show, and we’ll chat about some stuff that’s been of particular interest to us.” First of all, Jerod, happy birthday! How young are we?

Jerod Morris: Thank you very much. I am 34 years young today.

Brian Clark: Ah, still a babe. Just a child.

Jerod Morris: I don’t know, every year I’m starting to feel less and less like that.

Brian Clark: It’s funny because, when you’re 18, 34 sounds like the most ancient thing you’ve ever heard.

Jerod Morris: I know. Then you get here, and it’s like, “Oh.”

Brian Clark: The sprint from 18 to 34 is like, “Wait a minute!”

Jerod Morris: Yeah. “What happened?”

Brian Clark: Wait till you wake up and you’re 48. I still feel 20, so I don’t know. Except you tend to creak a little more.

Jerod Morris: Yeah. That’s already happening.

Brian Clark: Okay. Today, we’ve got just some stuff around the news that’s been interesting. I know we both tend to find stuff that we’re reading and share it with whomever it may be appropriate for, but especially among the Rainmaker group we’ve got going here. You actually found a really interesting article over at FiveThirtyEight. That was a dude at ESPN, Nate Silver, right?

Jerod Morris: Yeah, Nate Silver.

Brian Clark: Very bright people over there, very data driven. This was an article that was right up the alley of something we’ve been talking about, but it doesn’t surprise me because it’s a real issue. It’s a real problem on many fronts, from stats to marketing automation to web experience in general. Tell us a little bit about that article.

The Statistical Power of the ‘Logged In Experience’

Jerod Morris: Yeah. What if I told you that we have no earthly idea how many people are visiting websites, for the most part. Literally, we have some basic estimates. Some are a little bit better than others, but as the article points out, estimates that you’ll get from a comScore or one of those other big rating sites can vary vastly from what actual websites report, what their internal traffic reports are. It really just comes back to the nature of cookies. That’s what this article is talking about is how little we actually understand about how many people are visiting our website.

It even has some crazy stats about the proportion of traffic that is actually bots, which are mindboggling. The big takeaway for me was where the passage says, “Unless you have a serious paywall, and therefore have users who are logged in a 100 percent of the time, there’s just no way to know for sure how many individual real-life people visit your site in a month, week or day” — which struck me as just another huge benefit of what we’ve been talking about with this ‘logged in experience.’

When people aren’t logged in, you really don’t know who they are. You don’t know how many real uniques you have because it could be the same person visiting your site on four or five different devices. There’s all these different variables, but you eliminate so many of those variables when people are actually logged in.

It talks about the trends with Facebook now, basically presenting content from The New York Times, from BuzzFeed directly on Facebook, and publishers going along with this. For Facebook, the big benefit, of course, is they know exactly how many people are reading those articles. They’ve got actual logged-in people with faces.

We’ll see Google and Apple going down this road. It’s just further confirmation of the trend that we’ve been talking about — the power of a membership site and the information that it gives you — which is actually accurate, unlike the estimates that we’re basically relying on for traffic data.

Brian Clark: Yeah, when we say a membership site — and we’ve talked about those before — Facebook is a membership interface. You’re either in or out. A paywall is a membership interface, whether you charge money for it or not. We started using the term, when we’re talking to people who may not be as sophisticated, we just call it a ‘free paywall.’ You register. You get access to information, but then all of a sudden, you’re having an access-based, logged in experience.

As far as the particular focus here of traffic numbers, comScore or whatever, their estimates of Copyblogger’s traffic are way off as far as what we see internally, but this is exactly why. It’s not just stats, but that’s a pretty huge thing, obviously, for being able to do any sort of data analysis of what’s happening with your audience. We’ve talked about in the past before, the whole marketing automation and adaptive content experience, the problem with cookies. It’s the same thing, cross platform. You’re losing the cookie. You’re losing your automation because we live in a mobile to desktop to whatever world.

The ‘logged in’ aspect of it allows you to say. “Yup, okay. It’s you.” It doesn’t matter if you’re on your phone, your iPad, or your desktop. Now, we’re able to give you this more personalized experience, give you the content that you want instead of just trying to feed everyone the same experience and hope that it’s relevant to a certain percentage. It’s just another move towards having some incentive, something great that prompts people to register for access, as opposed to the old school, “Opt-in to our email newsletter,” or whatever the case may be. It really is interesting. You’re seeing more and more of this.

Speaking of publishers that are caving into Facebook, as an aside, I read this great article about Gawker, of all businesses, and Nick Denton. I’m not a huge fan, but I have respect for Nick and what he’s done. Obviously, I just wouldn’t want to be in that nasty business. But I do respect the fact that he’s standing up and saying, “You’re crazy to publish your stuff on Facebook. Are you a publisher? Are you in control of your business or not?”

It was a really interesting article. I’ll have to pull that up for the show notes. A lot of it has nothing to do with this, but I did notice, in the middle, he took a fairly principled stand against turning everything over to Facebook — of course, we’ve been warning that since 2007.

The Folly of Looking at the Wrong Metrics

Jerod Morris: Yeah, exactly. One other thing, too, that I wanted to point out about that article is it’s further confirmation of the folly of looking at the wrong metrics. Jonny and I answered a lot of questions about this with Showrunner with people asking, “What metrics should I look at?” “How important are downloads?” — and this kind of thing.

It’s similar to people who look at their site and just look at page views or just look at unique visitors. Obviously, you want those numbers to be growing. Trends can be important, but the actual numbers themselves mean so little. What really matters is engagement. Not just how many uniques are coming to the site, but how many you can convert to actually doing something and to getting them into a place where you can, as you talked about, use marketing automation. Or get them into some logged in experience where you can just learn more about them.

I hope that articles like this and people understanding just how little those big overview numbers mean and really dig in to the numbers and the kind of data that will actually drive results for you.

Brian Clark: I think the whole one-size-fits-all web experience is going extinct. It’s the membership interface that allows you to provide a truly rock-solid, personalized thing. I should mention that, if you’re interested in the intersection of the logged in experience or a membership interface, content, email, and marketing automation, Jerod and I are actually doing a webinar in couple of weeks, 10 days, something like that.

Jerod Morris: Yup.

Brian Clark: That will be in the show notes as well. It was announced on Copyblogger, but we’ll link that up for you. We’re going to — it’s half and half — explain the strategy of the intersection of all those things to build a really responsive and high-converting email list. Then Jerod is going to show you how to actually execute on that using the Rainmaker Platform if, in fact, that’s the tool set of choice that you would like to use. Of course, we’re rather fond of it.

Jerod Morris: Actually, the other day my dog woke me up at 3:00 in the morning, and I couldn’t get back to sleep. Do you ever have those times where you can’t get to sleep? So you either spend three hours just sitting there wishing you could sleep, but you don’t. You end up just wasting the time?

Brian Clark: All the time.

Jerod Morris: I said, “Screw it,” and just decided to get up. I was actually really excited. There’s some Rainmaker features that I wanted to dig in to and play with, so I got to spend the first three hours of the morning in total quiet, total seclusion, no distractions just playing with some of the new features. It was really entertaining, really educational. I’m excited to share some of the things I’ve learned and some of the different fun things Rainmaker can do on these webinars. Those are really fun.

Brian Clark: I would like to commend you for being productive. I do that, too. Sometimes I wake up at 3:30, and I’m like, “You know you’re not going back to sleep. Just get up, put on the coffee.” Those are always fun days around 4:30 in the afternoon — “Oh my God, I’m tired.”

All right, what else we got to look at today?

The Most Powerful Form of Media on Earth

Jerod Morris: I have a question for you because you used to live in Dallas. Did you ever listen to The Ticket when you lived in Dallas?

Brian Clark: It would be on here and there. The funny thing is, it’s my wife who listens to sports radio.

Jerod Morris: Really?

Brian Clark: She used to listen to The Ticket. She’s fanatic about listening to ESPN, and now, of course, she has satellite radio in the car and in the house. I’m just like, “Who are you?” In many ways, she’s the dude in the family, yet I have all the bad characteristics of a man as well. But, as an aside, yes, I am familiar with the program.

Jerod Morris: I’m not from Dallas, and when I moved here, I would always listen to ESPN radio. I’m a big sports fan. I would start to listen to The Ticket, but it’s very inside-Dallas type talk. They’ll talk about sports, but you have to live here for a while to get some of the jokes. I remember talking to someone who lived here for a while, and he’s like, “Just keep listening.” He’s like, “You’ll eventually get it, and you’ll become a dedicated listener.” I was thinking about it, and over the last two years, maybe three years, I bet I have spent more time listening to The Ticket than consuming any other type of media in total.

I say that to preface the discussion of this article that you sent, which is from The Observer, entitled Radio — Yes, Terrestrial Radio — Is the No. 1 Medium in Terms of Reach. We often here about how radio is dying. It’s just this dead medium, yet while it’s changing — the stations that are doing it right, and The Ticket is certainly one of them. They were first sports talk radio station that consistently wins Marconis. The ones who do it well continue to not just survive, but thrive. How is that when we’re supposed to be in this era when radio is dying because there’s so many threats to its existence?

Brian Clark: Yeah, it was a fascinating thing. It caught me off guard when I saw the headline and I read the story. Obviously, we’re very interested in audio from a podcasting, on-demand type approach, and obviously, this is a huge justification that people really, really enjoy audio content. I’ve got several interesting things about this that popped in my head when I read this. First of all, before you read this article and I sent it to you, did you know what the first video ever played on MTV was?

Jerod Morris: I did. That I did know, yes.

Brian Clark: For anyone who doesn’t know, it was The Buggles’s song Video Killed the Radio Star. There was a bit of irony that in 2015 no? Not yet? Okay, number one, people love audio. It is ingrained in our culture from a media standpoint. There’s a lot of reason for that. I don’t know about you because you just said you are a heavy Ticket listener, and I don’t know what the context of that is. But to me, it seems that radio continues to dominate because of the car. The radio in the vehicle is technology that everyone understands. Agree or disagree?

Jerod Morris: I think in part because that’s when I got into it, but what the smart stations have done is allow their feeds to be picked up by programs like iHeartRadio and, more importantly, create their own apps. I don’t drive that much because I work from home, and probably 95 percent of the time I’m listening to The Ticket is just on an app on my phone. I just have it on. It’ll be in my pocket. It’ll just be kind of around and on. I think, certainly, the car helped, but I think what radio stations have done to grow and evolve to make sure that they can be accessed the places where people otherwise access music I think has also really helped.

Brian Clark: Yeah, that’s valid. Now, does that qualify anymore as terrestrial radio once it goes into an app or into podcast format?

Jerod Morris: That’s a good question.

Brian Clark: I mean the way they’re quantifying it.

Jerod Morris: Yeah. I think of podcast format as it’s already done, they’ve got it posted, and you’re not listening to it live. On the app, you’re actually streaming it live. I do think of that as still the terrestrial format because I suppose I could just turn a radio on. It’s just so much easier for me to use my phone as the radio instead.

The Future of Independent Audio Content

Brian Clark: Yeah, of course, the rise of the smartphone and smarter options within cars for streaming Internet radio — all of that good stuff. You can’t ignore that. That’s where all the growth is in media consumption, yet I still think of all these people in their normal car. I think of my parents, you know? My parents are not tech savvy, but I guarantee you they’re listening to the radio. I think we’re at this intersection of the advancement of audio streaming and formats for on-demand and all that kind of stuff. But there’s this entire legacy population out there who the radio is the stand by.

It just makes you wonder — which we’ve commented on several times — that podcasting took a long time to catch on because the tech was too damn hard. It’s still probably too hard for a lot of people, but it’s better. Now, new vehicles are getting podcast functionality and all of that stuff. It’s interesting.

You extrapolate into the future, and you hear all the talk about self-driving cars. They’re coming faster than anyone thinks. The changes in attitudes with Millennials about sharing as opposed to ownership — all these kinds of stuff. When you don’t have to drive the car anymore, do you opt for video at that point?

Jerod Morris: That’s a good question. What I think will be interesting, I was thinking about this last week actually, because they’ll do something on The Ticket. When the regular hosts are on vacation, they’ll have the other guys in. Part of what has allowed the really good terrestrial radio stations to stay successful is the people — their actual talent, their ability to tell stories. A lot of these guys have been doing it for 15, 20 years, and they’re still able to succeed in this new era because our desire for stories and for good storytelling to be ‘in’ on an ‘in’ crowd conversation is never going to go away.

I wonder as the new crop of people comes up, not just on The Ticket but on radio stations all over the place, if they’ll have those same sensibilities and the same long-standing connections that make the guys right now so good. It will be interesting because that could present another shift for radio as you move forward. I don’t know the answer to it. It will be interesting to watch.

Brian Clark: No, it’s all fascinating. We’re seeing the way things have been done change and change more rapidly than it seems like things have changed in the recent past. I think the main takeaway here is, as a content creator, people love audio. If you’re not producing audio content, you’re missing out on a huge segment — maybe the largest segment of the population.

Jerod Morris: Those align in there. It’s the same line I think I used in my Authority Rainmaker presentation and I’ve used on several episodes of The Showrunner. “Audio is right there in your ears, and it follows you around. It gets inside and changes you.” That’s a quote directly from the article from Laura Walker. It talks about how part of the reason why radio has endured is because you can take your radio with you to places where other content can’t go. It’s the same thing with podcasting. When we talk about the connection and the benefits of podcasting and why it’s getting so big, that is why.

Brian Clark: Yeah, without a doubt. I’m loving it as a content creator. It’s interesting. It took us a while to really commit, and then when we did commit, we way committed with an entire network. I just have launched a new show. I’d love to do more, but I don’t even know how you keep up with your podcasting schedule in addition to everything else you do. That’s the one thing. You get excited about it. The format is really amazing because people do really connect with you at a different level than even the best writers can do in text.

How Jerod Produces Multiple Podcasts

Jerod Morris: You know what’s interesting, you ask how to keep up with the schedule. I’ve actually found that by increasing my output by getting on a regular schedule has helped. There were a couple of side projects I was doing where it was very irregular when I was putting out episodes. But I found that it really weighed on me — just the planning, thinking about when, and scheduling. It took up a lot of time and mental energy. Actually just getting it down to, “Okay, new episode goes out on Wednesday. We record on Tuesday come hell or high water,” actually simplified it, has made it a lot easier, and made me more efficient.

Somehow, I get more done just having it scheduled like that — even though I was producing fewer episodes before. I think it’s more of a mentality thing, but it just goes to the whole idea of treating a podcast just like the radio show. You know if you tune-in to radio at noon, here’s the noon guys. There’s the afternoon drive guys. Being at a certain place at a certain time when the audience expects you, not only does that help the audience, but getting on that schedule can help you, too, and help you produce more and produce better.

Brian Clark: That brings to mind, read an article and it mirrored what I’ve been trying to do over the last year or so. I think it was called Millionaires Don’t Use To-Do Lists — which I think some people would argue with. The gist of it was that you don’t make to-do lists. You use your calendar as your to-do list. You just schedule out every part of the day. I’ve started doing that with regard to podcasting. Even if I don’t have something lined up, there is that air time.

It hasn’t worked perfectly because you have to change an old dog. It’s harder than changing a calendar but in practice, the calendar, the editorial calendar, and then just the, “Here’s what I’m doing today. Here’s when I’m doing each thing. I don’t have time to goof around,” has been helpful to me. I agree that the busier I am, the more output I actually produce. You’re definitely more exhausted at the end of the day.

Jerod Morris: Yes. Speaking of output, I was on Rainmaker.FM earlier and scrolling through the list of shows, and I saw this show with really cool art but a great name. It’s Unemployable. Can you tell me about that show?

A Brief Intro to Brian s New Show Unemployable

Brian Clark: Yeah, that was the new podcast that I eluded to, but it’s also more than that. It is a show on Rainmaker.FM. I also own the domain Unemployable.com. It is a great word. The story behind the title is that I did this exercise when working with a speaking coach actually. It was weird because it wasn’t about presentation skills. It was about story telling.

The first exercise was, “What’s the one word that sums up your life philosophy?” I ended up coming up with the word ‘further,’ which you know is a project I started about six months ago just to do an email newsletter about personal development and stuff that I’m reading and just sharing it.

But the immediate word that came to mind, which was met by a room full of laughter, was ‘unemployable.’ I was like, “Dude, no, I’m not kidding. I can’t have a job.” That resonates with people. It’s mainly aimed at people who are out there — freelancers solopreneurs, startups. I’m not trying to convince anyone to quit their job. I’m sure there will be people that tuned in that are thinking about it or thinking about making the leap. I’m not going to try to convince you. If you’re truly unemployable, you’re going to do it. At that point, I’ll be there for you.

Basically, 17 years ago, the first success I had on my own was as a freelancer, for better or worse. They call them solo attorneys when you’re a lawyer. It’s the same job, right? You got to get clients. You got to serve clients. You got to collect the money. You got to keep your sanity.

Then I evolved into more of these entrepreneurial type, although I was really bad at processes. Then, the Copyblogger years, then the Copyblogger media years, so it’s basically solo to CEO. I think I’ve seen almost every situation. That’s really my passion. Everyone thinks of me as a content guy or marketing guy, and yeah, that’s all part of it. But I love anyone who just feels like I really would prefer or just have to be on my own. Now, I know Chris Garrett is like, “No one in the company can listen to this show. We’re going to lose everyone.”

I’m like, “No, this is why we work so hard to make a non-standard employment.” You work where you want, when you want. As long as you get your work done, you’re fine. It’s been amazing to me that we’ve been able to find people like that because, certain people, they won’t fit in. It’s not enough structure. We’re almost like the anti-job job. That’s my saving grace, but I feel like I’m going to have to talk several of you down off the ledge.

Jerod Morris: Yeah. I was going to ask you about that, if you’re worried about what you might create or inspire because you’re the CEO of a company with 50 plus people, many of whom are self-starters who have done their own projects. That’s what’s interesting about Copyblogger, though. It’s almost a place where unemployable people can be employed in a strange way and still feel comfortable.

Brian Clark: Yeah. On one hand, we try to create that environment. Therefore, we have to hire certain types of people. I do worry about that. If we had to scale up to a 100 pretty quickly, and we might, you’re not going to only be able to find ‘unemployable types’ that actually fit in. Otherwise, no, I don’t worry about it. If someone comes to me and says, “I’m leaving,” I’m going to try to keep you, very hard. If that doesn’t work, I’m going to help you, and I’m going to encourage you — how could I not? I would be the ultimate hypocrite. I’m always prepared for the eventuality, but I’m also top of mind that I hope we can do everything we can, so no one splits.

Jerod Morris: Yes. Well, I listened to the first three episodes, and I really enjoyed it. I highly recommend it to everybody to listen.

Brian Clark: Cool. All right.

Jerod Morris: It’s good.

Brian Clark: That’s Unemployable.com. In addition to the podcast episodes, there is going to be a webinar series for registered members only. There’s this really cool function for members that you can record a question with audio software, and then I’ll pick several of these to answer on the show. It’s cool because I get to play the person on the show, which is what I love about … what’s his name on ESPN, Colin?

Jerod Morris: Colin Cowherd.

Brian Clark: Cowherd, yeah, that’s it. I like that guy’s style. He’ll just rant for a long time, and then he takes his long pauses and then just starts talking again. Have you noticed that about his style?

Jerod Morris: Yes. Oh, he definitely does.

Brian Clark: It’s interesting. Anyway, he’ll have people call in, and I guess that’s more or less live. He’s got a studio team, production team there that screens calls and all that. We do the next best thing — get people to leave recorded messages, listen to them, and then pick those that we’re going to answer on air. I’m really looking forward to that. That, to me, sounds more like the classic radio that we all come to grow up on and love.

Jerod Morris: You went ‘.com’ instead of ‘.FM.’ Does that suggest that it’s bigger than just a show? There’s something bigger going on there, or it’s just because the .com was there?

Brian Clark: .com was not there. There’s not a single dictionary word .com in the world.

Jerod Morris: I didn’t think so.

Brian Clark: I did have Unemployable.FM because I wanted to do the podcast. Then I started thinking of it as a bigger project with the webinars and the Q&A and maybe community going forward. The site is built on Rainmaker, of course, so it shows you that membership functionality even with free content.

It’s a case study for the ‘logged in’ experience as well. I paid a decent chunk of change for the .com, but it was way less than I thought it would have been. Further.net cost me more than Unemployable.com. I think this guy was just sitting on it, and he accepted an amount that I thought was a steal. That’s all I’m going to say. All right, well, I think that’s good for the day. Again, happy birthday. By the time this airs, you’ll be 34 and two days old, but that’s okay.

Jerod Morris: Thank you very much.

Brian Clark: It’s been fun having you, man. I may have to drag you back here again. I still can’t believe we let Robert just … the poet becomes a production and operations guy. That’s all he wants to do.

Jerod Morris: I know, I know. I’m getting more comfortable sitting in his seat even though the voice can’t compare. I get a little more comfortable each time.

Brian Clark: It’s not bad, but no one compares to Robert.

Jerod Morris: No, nobody.

Brian Clark: Not even Sonia, who has a fantastic voice.

Jerod Morris: Yes.

Brian Clark: All right, man. Take care. Everyone out there, I will see you again next week. Thanks for tuning in.

The Transcript

Darren Rowse on the Intersection of Blogging and Digital Commerce

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.

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

Today, my extra special co-host, and my revolving co-host chair, is a gentleman who I’m quite fond of. He’s been an inspiration for me in a lot of ways to even begin this crazy journey that began in 2006. He’s a friend. He’s been a business partner. He’s an all-around great guy, Mr. Darren Rowse.

Let’s go ahead and ask. Darren, how is it in the morning over there in Melbourne, because it’s nighttime here in the States?

Darren Rowse: Yeah, Monday morning here, so I thank you for a Sunday night podcast from your side of things. Well, we’re heading into winter. We’re in winter. It’s the school holidays day one today, so it’s gray and noisy here, although I just sent the kids out for an hour.

Brian Clark: I’m actually awake more on Sunday night than Monday morning, so I figured it was not too bad. It is winter in Australia. I just dropped my kids off at summer camp. It’s just completely opposite experience, but more of the same in many ways.

Brian Clark: All right, so you’re up to a lot of stuff, which always makes for a good podcast because we have plenty to talk about. One thing that I want to kick around with you, because it has been, for me, nine and a half years — I can’t believe that — that I started Copyblogger in January of 2006. Some people may get or know, but Copyblogger was a play on, or a complement of another term that had been established fairly recently back in those days. That was ProBlogger, which of course many people know you as ProBlogger. You’re that guy. Wait, did you start in 2005 or before?

Darren Rowse: ProBlogger was September 2004.

Brian Clark: That’s amazing. We’re working on 11 years for you for that site.

Darren Rowse: Yeah, it’s hard to believe. I think I started blogging in 2002, so it’s coming up on 13 years now.

Brian Clark: It’s been all right to you, though, right?

Darren Rowse: Yeah, it’s just changed my life.

Brian Clark: Radically. All of us, right?

Darren Rowse: Radically.

Brian Clark: I’m curious, because it has been a decade or so, what do you call the state of blogging today? When I put the spin on it with Copyblogger, that was basically just saying, “Hey, this is a way to look at it that’s a little different in that you sell products and services instead of advertising.” Now that’s known as content marketing.

The world has changed amazingly from back in the day when we were trying to convince kumbaya bloggers that it was okay to make money, which you took on, head on. Then I came along and said, “Let’s sell stuff.” A few people thought I was evil to say that. Now, you look at today, and it’s not like we live on the same planet. Blogging’s still relevant even though not everyone uses that term I suppose.

The State of Blogging in 2015

Darren Rowse: I guess that’s the main thing that I usually talk about. A lot of people are still doing it, but they may not even call it that or even know they’re doing it. But it’s still central to a lot of businesses today. I don’t think it’s going away any time soon. There’s certainly a whole heap of other things you can be doing with your time now as well. I guess it makes sense to look at it as part of a mix rather than just the only thing you do these days.

Brian Clark: It is odd. As a medium, the Internet was text heavy right from the beginning. That’s what search engines could see. That’s what people could produce. The people that were drawn, as creators or producers as opposed to consumers, were a lot of writers.

Now, obviously, video is huge, just like offline. Audio is huge, which we’ll talk about in just a bit. More people consume content visually or auditorily than we’ve got readers in the world. Yet, it persists. The whole idea of being able to repurpose audio, or even start with text and then go visual with it, that’s been a major theme that I’ve seen really come on strong — the whole idea of making your content really work for you.

The Long-Term Power of Evergreen Content

Darren Rowse: Yeah, for me, I heard Tim Ferriss speak recently. His argument is that long-form evergreen content is still probably the best investment that you can make for a business today in terms of building your platform and growing rates. I think that extends across the different channels, whether it be video, audio, or text. That’s certainly been my story. Long-form evergreen is what I spend 99 percent of my time trying to create.

Brian Clark: That’s what got me here. I remember when I started blogging and broke some of the, not your rules necessarily, but the Scobles and the other old-guard type, Steve Rubel, you know, those guys — 250 words max. Blog every day. It’s your personal opinions — so I wrote 1000-word evergreen educational articles. To me, that was where the value was at. Both of us differentiated and succeeded with that type of content, and it’s still incredibly valuable.

Darren Rowse: It pays off over and over. A lot of the content that I created in 2004 on ProBlogger is still the best-read content on ProBlogger today — 11 years later. It’s forced me to go back and update it. The same on Digital Photography School. To this day, I guarantee you that there’s 10 articles right now that are in the top 20 articles being read on Google Analytics, and they’re old, long-form evergreen content. That two or three hours I put into creating that post 11 years ago is paying off today many times over.

Brian Clark: That’s amazing. I always say that building an audience is an unfair advantage as long as you continue to serve them. You just continue to reap the rewards. The content that you created in the first place to get the audience is bringing you new audience. That may be the truly unfair part, but in a good way — a fantastic way if you’re a long-term thinker, I would suppose.

I do want to talk about Digital Photography School. You know how fond I am of that business. A lot of people know that’s kind of your main gig. A lot of people just know you for ProBlogger. It’s interesting. I do want to touch on that.

Speaking of audio, you’ve stopped your holdout against podcasting. It’s 2015, and Darren says, “Yeah I think it’s ripe now to go ahead and launch a podcast.” Tell us a little bit about that. Why’d you pull the trigger?

Why Darren Is Getting into Podcasting

Darren Rowse: There’s probably two or three reasons that all come together. One, I became a fairly avid podcast listener myself. That all happened because I started to take walks in the afternoons. I was bored on my walks, but I had to start exercising. That was a part of a whole health kick for me. I filled up that time with podcasts. It just dawned on me — like it’s probably dawned on millions of people before me — how effective they are, how personal they are, and how fantastic they are for bringing about change in people.

A lot of the podcasts I’ve listened to have been more health-related. They’ve really inspired and motivated me to make huge changes in my own health journey. As I’m listening to them, I’m thinking, “I could do this.” That’s what I’m all about. I’m all about bringing change in people’s life. What more effective and personal way to do it than to speak one on one, in some ways, to them through auditory? That’s been the big part.

The other part is my first love with communications has always been speaking and presenting. Podcasting is just doing that into a microphone. It gives me an opportunity to exercise those passions for communication that I had only really been able to do two or three times a year when I get to travel and speak at conferences. They’re the big parts. There’s also been a little bit of a nagging from a few friends as well, who all have said, “You know you really should start a podcast. It’s been four years since they’ve taken off.”

Brian Clark: And you’ve got that great accent, Darren. You’ve got to factor that in. I know you take it for granted, but the rest of the world is like, “Wow, he sounds really cool.”

Darren Rowse: I’m not sure about that.

Brian Clark: Oh, no, trust me. That’s what everyone says behind your back. But yeah, it, it is. It’s so personal. You touched on portability and on-demand. The ability to do something else without looking at a screen. This is a personal thing, but I am just over staring at screens. We’ve been doing this for a long time. They talk about the Millennials being digital natives. Some of us, we’re older, but we fit that profile because, for whatever reason, we gravitated toward online.

Audio to me has been somewhat liberating in my quest to keep my phone tucked away somewhere, not looking at it constantly. I love to go for walks and hikes as well. I’m a reader, but I’ve become an audio consumer as well because it just makes so much sense.

Tell us a little bit about the new podcast and where we can find it. We’ll make sure to put a link in the show notes, but let us know what it is and what it’s about.

Darren Rowse: It’s simply called ProBlogger. You can search in iTunes, or I’ve added it to Stitcher and all those other directories. It’s gradually being approved across a lot of those. In many ways, it’s taking a lot of the ideas and content that we’ve got on ProBlogger, the blog, and putting it into more of a discussion format and a presentation as such. It’s kicking off with my 31 Days to Build a Better Blog series, which has been participated in by 30-40,000 people over the years and turned into an ebook. Really taking those challenges every day is a little bit of teaching and little challenge that you can go away and do on your blog.

So it’s daily for the first 31 days, starting Wednesday of this week. By the time this podcast is live, I presume it will be live. After that, I’m not really sure. It’ll at least be weekly after the first month, possibly couple times a week depending on how inspired I am by podcasting. So far, it’s been just amazing. I’ve loved the producing of it. Not so much the editing. I think I might get someone to help me with that. The producing of it and the creation of it has been something that’s just given me heaps of energy.

Brian Clark: Absolutely. I’ve been watching on Twitter, and I went over to iTunes and left a review and all that. It’s cool because your existing audience is excited — even though I think perhaps your crowd is similar to ours in that they’re predominantly readers. They’d like to scan an article and figure out if they want to dive in deeper. Sometimes, those types of people are not a fan of audio because it’s not the right context for them.

Your existing audience is coming along. They’re your base. They’re your catalysts. They get you rolling in iTunes and get you that great start in New and Noteworthy, which is really cool, that you’ll see over the next two months.

But the real cool thing is that you’re going to reach people that may have never heard of you because it is in audio, and that may be their dominant consumption preference. Was that a big part of your decision, or is that more just a nice thing to have?

Darren Rowse: It probably wasn’t a major motivation for me, but it’s certainly something of, in talking to plenty of people who have podcasted before, that’s been their story. I’m interested to see that. In fact, I got an email this morning from someone who fit that category. I wasn’t even meaning to have this launched by today — iTunes put it in so quickly. It took 12 hours to get approved. It got found, and then I thought, “I better share it on Twitter.” It’s already found one new reader, which is amazingly quick for me. That’ll be something I’ll get to measure over the next few days particularly.

Brian Clark: It is fairly fascinating. It’s an audience expansion technique, even if you’re not thinking about it. We preach, again, relying too much on someone else’s property, but iTunes as an audio search engine can be hugely beneficial. Of course, you’ve still got home base, which is point number one of any good blogging strategy. Well, best of wishes with the new show. I know it’s going to be fantastic. The series itself that you’ve been doing for years, it’s 31 days for it?

Darren Rowse: Yeah, 31 Days to Build a Better Blog.

Brian Clark: I remember when you first launched that. I thought it was brilliant. It’s become an institution at this point. You do it over and over. There’s always new people coming in, and some people actually want to revisit the whole process.

Darren Rowse: Yeah, a lot of the people who bought the book do it on a monthly or bimonthly basis. It’s about creating habits. In my first episode — great bloggers are action takers — they’re also the actions I take that are normal, small things, so a lot of the 31 things are things that you can build into your daily or weekly rhythm of blogging that can bring a lot of life to what you do.

Brian Clark: Cool. Let’s shift gears just a little bit. I’m correct, I assume, in that Digital Photography School is still the bulk of your business?

Darren Rowse: Yeah, it’s about 10 times bigger than ProBlogger to this day.

Brian Clark: Do you still find people that are somewhat surprised that they don’t realize that ProBlogger’s not the main jewel in the crown?

Darren Rowse: Always, always. Then again, I always come across people who go, “I just discovered ProBlogger, what’s this other thing?” It goes both ways. I get a lot of, “My wife reads Digital Photography School, and I never realized it was the same person.”

Brian Clark: To me, it’s just a great business period. It’s admirable and amazing what you’ve built over there. The thing that gets me about it, the old business opportunity style, Internet marketers, always had the same pitch: “Turn your hobby or passion into a business. It’s easy. We’ll show you how for $97.” A lot of people got burnt by that because it’s not that simple. Yes, it can be done, but that’s what you did.

You weren’t even a professional photographer. This was your passion. This was your hobby. Now, this is a formidable business that continues to grow year after year after year. Take us back a little bit, and give us the history. I still love hearing this story, so I’m sure everyone else will.

How a Hobby Became a Multimillion Dollar Business

Darren Rowse: My first commercial blog was a photography blog. That was a reviews blog. It was on a horrible domain. I made so many mistakes with it, but it still got to the point where I was bringing in a full-time living from blogging. The thing I didn’t enjoy about that blog was that it was very much a reader’s come for one day, they research which camera they buy, and then they never come back again, or at least don’t come back for three years until they buy their next camera.

I always wanted to have something that had an ongoing relationship with those readers and that aligned more with my passion. My passion is taking photos rather than just talking about cameras. It was very much about, “Let’s take the model from ProBlogger, which is teaching people how to do something, and apply it to photography.”

I started Digital Photography School, I think it was 2005. It originally was me answering the questions that my friends used to ask me about how to use these digital cameras they had. I really took the frequently asked questions — What’s this aperture thing? What’s shutter speed? Really basic things, how to hold a camera — and just wrote what I knew about those topics. It was probably two or three articles a week on a horrible, free template.

There was no StudioPress or anything like that back then. Got it out there. It very quickly took off. A few readers came across from ProBlogger. A few readers came across from the other photography blog that I had already started. That was probably enough to seed it out there. It grew from there. It became a daily exercise for me. Then, gradually, over time, went to two times a day as well in the early days.

Gradually, over time, I began to monetize it, largely through advertising to start with. That certainly transitioned around the same time that I created the 31 Days to Build a Better Blog ebook. I wrote an ebook for that blog as well, which was really just re-purposing the content on the blog and putting it into a more logically ordered, up-to-date ebook.

Brian Clark: It’s interesting that — I’m sure at the beginning, it was more of a blog feel to it — but if you go to Digital Photography School today, again this link is in the show notes as well, but it’s Digital-Photography-School.com, but separated by hyphens between the words.

Darren Rowse: Right, because that’s catchy.

Brian Clark: Those were a different time, Darren. You can’t say it’s not keyword rich, right? If you look at it today, there’s nothing about this that says ‘blog.’ This is a hard-core entertainment, no, not entertainment, educational center — tips and tutorials, cameras and equipment, post production, and then you get down to books, courses, and forums. This is a destination for the digital photography hobbyist, or beyond actually. I know you guys have various levels of sophistication that you cater to. That’s a natural evolution, I suppose.

Much like when we changed the Copyblogger home page away from the normal blog format. Everyone had a conniption, but it was a business. You had to evolve in line with the business, not staying true to some sort of blog philosophy, right? How much did that play into the evolution of DPS?

The Evolution of a Digital Commerce Community

Darren Rowse: It’s just chalk and cheese in some ways. Our readership could care less whether it looks like a blog or not. That’s the beauty of it. If I change ProBlogger, I get a lot of feedback about, “It’s not a blog anymore.”

Brian Clark: That’s such a generous term.

Darren Rowse: I always say, Digital Photography School readers are real readers, and ProBlogger readers are largely bloggers. They’re a different kettle of fish in many ways. It was definitely an evolution, though. Like I said, I started out very much on focusing on beginners, two or three tips a week. Now, it’s become a lot more sophisticated in terms of our publishing rhythms, promotion, and the whole production of what we’re creating now. A lot of people come to a blog like DPS and think, “That’s what I need to create,” but you can’t start there. You’ve got to start somewhere simpler.

Brian Clark: That is such an excellent point. Often, I’ll be talking about a certain strategy or tactic and then use Copyblogger as an example, but then I have to say, “Hold on! Don’t look at it the way it is now. Look at it the way it was and how we got here,” because that’s year after year after year of, as you mentioned, evolving blog content into higher value content — whether that be a PDF ebook, a free ebook, a paid ebook, or a course, whatever the case may be. That’s the, I won’t say luxury, but it’s the benefit of consistency and putting in the time. You’ve developed these assets that, all of a sudden, you’ve got something that the beginner doesn’t have, yet we were all beginners at one point.

Darren Rowse: That’s right. For us, we’ve taught our readers how to go beyond being beginners. Then it forced us to create intermediate content and then more advanced content as well, and to expand the topics from just being how to take photos to how to process those photos. We’ve really focused on, “Where are the bulk of our readers now, and where do we want them to be next?” By identifying that change we’re trying to bring, it forces us to expand and make the site more sophisticated in terms of the kind of content and the way we deliver that content as well. It’s definitely been a journey, but that journey’s very much based upon where we’re trying to take our readers.

Brian Clark: It’s interesting. A couple years ago, if I remember correctly, it was ebooks that were the paid products that you offered. Now, you’re offering a selection of courses — little bit higher price tag, a little more intensive value — is that fairly recent?

How Ebooks and Online Courses Drive Revenue

Darren Rowse: Yeah.

Brian Clark: Okay. Tell us a little bit how you took that step.

Darren Rowse: Ebooks have always done really well for us. We’ve always been open to the idea of doing a course, but we wanted to see whether our readers would go there. One of the ways we’d been monitoring it is through affiliate promotions. Every year at Christmas and in the middle of the year, we do a seasonal promotion. At Christmas, it’s 12 days of Christmas. We promote a different deal every day, and they’re a mix of our products as well as other people’s products. We do the same thing in the middle of the year. In fact, it starts in two day’s time.

That’s partly a money-making exercise, but it’s also a testing exercise where we test different products we’re promoting of other people’s. Partly to make money, but also to see is this format relevant to our audience. So we’ve promoted courses probably for five or six years now at Christmas time.

Last year, the courses took off. That was a signal to us — we need to start getting into courses as well. We created our first course the start of this year. It did well, not as well as ebooks, but it was certainly enough that we thought there was a growing market there for us. We’ve just commissioned two more, and they’re in development at the moment.

We also noticed this year, presets, Lightroom presets. Little plugins for Lightroom and Photoshop have worked well, so we’re working on our first preset collection, too. The same thing happened last year when we promoted some printable stuff. Last year, we created printables. So, very much using affiliate promotions to test what we should publish next.

Smart Market Research for Creating Digital Products

Brian Clark: That is such an excellent point. I want to go ahead and point it out again even though you said it twice. That is so important. Some people think of affiliate marketing as a way to make money — and it is. It can be very lucrative. Some people, that’s their entire model. For me, I always used it to see what people would buy. That informs your product development strategy in a way that goes well beyond pray and guess, and hope for the best.

We talk about, in the startup world, minimum viable product and everything — well, selling someone else’s product to your audience and them buying it, you’re missing out on acquiring a customer, which is huge.

But if you’re finding that your type of people buy that type of thing, that is incredibly valuable information. Please take that away with you today and think about it. I know a lot of you are working on developing, specifically, digital products and services, but you don’t know exactly what’s going to work. Well, that is a very, very effective way to go about it because what someone will actually open up their wallet and pull out a credit card for is better market research than any survey, any questionnaire, any amount of listening, observation whatsoever. Darren, thanks for that.

Darren Rowse: Can I just make one more point on that?

Brian Clark: Yes, please do.

Darren Rowse: There’s two other things we’ve learned from this. One, it’s the type of products, or courses or ebooks or printables. Two, it’s the topic. We’re testing products on a whole heap of topics. The other one is, who’s producing those products? They can become potential collaborators. We have another site called SnapnDeals, which is where we do two or three affiliate promotions a week. They’re all photography related. It’s been interesting. Of those deals and the affiliate stuff that we do, the people who we’re promoting, if they take off, that’s also another hint for us. Some of those have turned into ebook authors or course producers or presets producers as well.

Brian Clark: Cool.

Darren Rowse: It’s just great on all kinds of levels.

Brian Clark: The collaboration angle is also gold. Being able to figure out, “Hey, looks like we can make some money together in a more meaningful way than just affiliate and merchant,” that kind of thing.

Darren Rowse: Yeah, we’ve certainly. With the presets, for instance, we promoted a guy’s presets. He had created a great product, so we were like, “Well, can you create one of those for us? We know if it’ll have our name on it as well as being a great product, it’ll sell even more to our audience.”

Brian Clark: Yes. Absolutely. I wanted to close with your advice for starting or would-be digital entrepreneurs. I think you gave some, but can you pull something else here to close this off?

Why the Success of Digital Entrepreneurs Depends the Ability to Change People’s Lives

Darren Rowse: I’ve spoken about this quite a bit lately. You’ve got to do something that’s meaningful for your audience. I know people have said that for years, “Do something that changes people’s lives.” It’s just so true. I’ve seen it with what you’ve built. You’ve literally changed people’s lives in giving them tools and teaching to build businesses. When you do that, they’re just so grateful for it. I see that on ProBlogger and Digital Photography School all the time.

People who, if you change their life in some way, you give them something that they didn’t have before, then they not only buy from you, but they tell others about you as well. Very much that’s been our focus across both of the businesses that we have. Change people’s lives. Do something meaningful to them. Do something that matters. Out of that emerges all kinds of opportunity.

Brian Clark: Yeah, it may seem trite or flowery, but if it’s just about money, there’s a good chance you’re just not going to make it. It can’t just be that. When you’re thinking about money, you’re thinking about yourself. The people who make the most money are thinking about the other people more — or most fanatically. Excellent advice.

Darren, I’m going to let you carry on with your Monday morning. I guess I should probably wind down so that my Monday morning has something productive about it. I want to thank you again for joining us. Do look for the podcast, everyone. That’s ProBlogger podcast on iTunes. I’m sure there’s going to be a mention on ProBlogger I hope this week as well. Of course, ProBlogger.net. Are you still doing the ProBlogger.com community?

Darren Rowse: That’s just changing at the moment. In fact, I just saw the new front page, which is coming along. The front page has become more of a portal. The community, we ended it about three or four months ago, but there’s new stuff coming there, too. If you go to ProBlogger.com, you’ll find all the different properties now.

Brian Clark: Cool. Then also Digital Photography School. Check that out if you have any interest whatsoever in photography. Also, though, if you just have an interest in seeing a very fantastically run, community-oriented, but highly profitable business, Darren does it right.

Darren, thanks so much for joining us.

Darren Rowse: Thanks, Brian.

Brian Clark: All right, everyone, we will see you next week. Take care.

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.