In the podcast:

04:04 – Three core pillars to building a successful online business
04:59 – Offer that converts
10:50 – Effective Hourly Rate (EHR)
20:20 – Best way to find core offering
23:37 – What is a Racecourse
28:44 – Segmentation from a traffic perspective
36:39 – Core business principles that James applied offline that can be applied online
40:30 – Biggest mistake that people make when it comes to hiring team members

James Schramko and I talk about the 3 core principles to building a successful online business which he had done numerous times. We also talk about his new book “Work Less Make More” which covers these principles and how you can apply these to your business.

Ilana: Ilana Wechsler here with another episode Teach Traffic. So today I’m interviewing someone who I’ve actually been following for a long time. He is an interesting character who has been successful in business offline and I guess that’s what I find interesting about him is that he has applied his offline learnings into a completely online environment.

So his name is James Schramko and he was previously the general manager of a Mercedes Benz dealership and it was really there that he cut his teeth into business and marketing and he tested a lot of what he was studying online at the time and he tested it into the offline world and was very successful at building that Mercedes Benz dealership using these strategies.

And in fact in this episode we discussed this specific example of how he built a database of over 10,000 subscribers while spending zero dollars on marketing purely because he was not given a marketing budget but it’s a strategy which you could absolutely apply to your business whether it’s online or offline. These are sort of core and fundamental strategies which you can apply to every single business.

So I’ve been following James for many years and have no doubt heard it learnt a huge amount of information from him. Information which has been collated beautifully into his new book called Work Less, Make More. And in this episode we discuss the book and the three core pillars to building a successful online business which James has done many times. So let’s jump right in to today’s episode. So welcome to today’s episode of Teach Traffic. I have a very special guest today, James Schramko welcome to today’s episode.

James: Thank you for inviting me, Ilana.

Ilana: It’s a pleasure to have you here. I’ve been a long time follower of all that you do onliners and all the insights you share from your offline world and you’ve recently launched a new book called Work Less Make More which you’ve come on today’s show to talk about. And I have read this book cover to cover and as I said as a longtime follower of all that you’ve talked about I find all that you’ve been talking about collated in such a sequential form beautifully in this book so congrats. Firstly congratulations on this book.

James: Thank you. And I have to acknowledge I got some help making the structure right from a friend of mine Kelly Exeter who suggested the book and it really to go was just to try and encapsulate all the things that I’ve been talking about for the last decade and put them into a two hour read.

Ilana: And I think you’ve done exactly that. You and her have done exactly that which is great and it’s I think as I said like I’ve a lot of messages and findings I’ve heard before but collated in such a way in that sequential format is fantastic for someone who’s never heard of you before to really download a lot of the insights that you have been sharing over the last decade and it’s been a really good job and you’ve touched on so many points of business both online and offline and staring back and kind of getting a bit of a helicopter view of it.

Three core pillars to building a successful online business

Ilana: I really think that it kind of comes down to three main pillars that you touch on which I want to talk about in today’s episode which is:

• First being your offer and importantly as you say your offer that converts and it’s so unspoken about in the industry the importance of having an offer that converts.
• Second pillar being traffic which we also want to touch on.
• And the third being team.

And all these three elements so critical to building an online and a successful online business. So we’re going to touch on these three pillars today. So let’s start with the first one being your offer that converts and as I said like it’s so not spoken about very often the importance of having an offer that converts because it’s a kind of like the analogy of you putting lipstick on a pig in the day it’s still a pig. You can’t sell it. Would you agree with that statement.

James: Yeah. I haven’t really experimented with pigs in lipstick but i get the metaphor.

Offer that converts

It’s really common to see people trying to sell something and they haven’t put too much consideration into their target audience or the needs of their market. They’re more focused on their great idea or their product and then they try and fit a customer around that product and that’s really doing it the difficult way it can be done. Could argue that someone like Steve Jobs was telling people what they should be looking for when he makes an iPhone but there was still a market demand. People wanted to have songs in their pocket. They just didn’t know it.

So he was more of a visionary but there are ways that you can survey and test a market or even just research what they’re already buying and use that as a guideline as to what sort of things are likely to be offers that are appealing to that audience and it really is everything. I think there’s really only two stages to being successful in business.

One is finding an offer that converts and two once you’ve found that offer is doing more of that offer scaling it which is why you’ve got traffic and team there is your back up to that but if you can’t find that offer that converts it causes a lot of problems because now you’re spending money you’re literally throwing money at a product or an offer that you can’t convert so you don’t get any sales which means you don’t have you’re not liquidating that spend you’re not getting the money back you’re losing the money and the more you throw at it the more you lose and it becomes very frustrating and eventually you give up and you fail.

And I think this is really the Mt. Everest for people when they’re starting out is just trying to find that off that converts if you can find it then the whole game changes into that second mode which is just selling more of it and scaling it and that’s the more exciting and fun and relaxing part. The first part is very stressful and difficult.

Ilana: I completely agree. And as somebody who when I originally didn’t start out online I was a victim of trying to sell something which people didn’t really want and even having my agency at people come to me all the time where you know they’ve had bad experiences with other agencies in the past or even trying to run ads themselves and at the end of the day they’re trying to sell something that people don’t really want.

And I think time not necessary time hasn’t been taken to really understand what it is that people are after and it’s such a critical part of the market research process. I think people fall in love with their ideas themselves rather than their customers.

James: Yeah I’m sure they’re happy to make see the bad guy in the equation. They feel that some agency can wave a magical wand and suddenly make their product more appealing and people will line up to buy it. But the reality is they could go to 10 more agencies and not get a better result because the offer stinks.

Ilana: Yes and I think you’ve kind of been quite contrary in this space in terms of you know having an offer and scaling that offer like there’s lots of kind of other marketers in the space who kind of have this whole ascension model building up to your offer. That old, the main offer that is what people are offering but you’ve been quite contrarian saying there’s often no need for this ascension model of this whole trip wire and selling lower priced products in the lead up to high priced offer and you know you’ve proven this yourself with your own high priced membership.

James: Yeah. If someone’s ready for a high level solution if they’re in that buying window and they recognize their problem and they are actively seeking a solution and you can present that solution to them in a way that they completely resonate with and they can have it now. Then you might make a high ticket sales straight out of the gate. You don’t have to warm people up.

In fact it actually will frustrate a buyer if you take them through more steps than they want to go through. And in my experience and probably some of this comes from working with brands like Mercedes Benz, the high level buyer doesn’t want to get mucked around. They just know what they want and they want it. And if you can supply it quickly and efficiently then they will buy it and they are a great customer to have. And I think people waste a lot of time on the low ticket stuff on the free stuff. The small ticket $7 type products try to build up a groundswell to find their high ticket buyers. Well you can go straight for the high ticket buyers if you want.

Ilana: That’s right and I think there in lies the power of having that offer that people want. That there’s no need to build them up to it and warm them up if it’s that compelling for people. Then as you say people go straight for the high ticket price.

James: Yes. So I know someone who sells packages for $50,000 and he’s very cleverly included all of the fundamental elements that would make that offer extremely appealing for a buyer who knows what they want or in fact he can even take them through a small education process to help them understand what they want to want. Maybe they have an innate frustration but when he reveals to them the solution they immediately recognize this is what they want and they want to buy and they sign up at a very high conversion rate.

So his effort is really just placing himself in front of the right people who are ready for that high ticket item and it’s the same amount of energy for him to sell a $50,000 program as it is to sell a 50 dollar e-book.

Ilana: Exactly. Interesting. So one thing you touch on in the book is this concept of effective hourly rate which ultimately does kind of come down to what is your effective hourly rate for your offer. Do you want to kind of touch on what EHR is and how you can work it out for your business?

Effective Hourly Rate (EHR)

James: It’s actually a great life calculation but it’s it simply working out. Well it’s a way of measuring if something is very useful for you or not. So in a simple terms let’s say we were an employee and we get paid a wage we take the wage and divide it by the number of hours that we work and we end up with an hourly rate.

So most employees know that a little bit, a lot of employers or business owners don’t know their effective hourly rate which is simply in their case it’s their revenue minus all of their costs fixed and variables not including any wage or drawings that they have for themselves because effectively that’s what the business owner is left with.

So you divide your net profit divide it by the number of hours worked and that’s that’s your effective hourly rate. Now if for some entrepreneurs when they work this out the rate is so low that they would be better to have a job might be under 10 dollars an hour especially if they’re starting out and especially if they don’t have very well leverage business model now where it gets interesting is you could start using this calculation within your different divisions.

Let’s say you have a business and maybe even a business like yours Ilana where you have an agency side of the business where you have done for you service and then you have a coaching side of the business where you have it done with you or do it yourself sort of education platform.

You could actually start dividing up the profit from each product line and working out how many hours you spend on each business unit and you might find that one is spectacularly rewarding and the other one is not as exciting. And then you’ve got choices to make.

-You can either hire someone to do some of the time which will actually reduce the amount of time you spend on the business.

-You could decide not to do a business division but you could make changes to your pricing or the amount of time that you need to deliver your services for that particular division.

But I tell you what it even applies to a parent. You know if you were to take your kid to school every day and it took 30 minutes in the morning 30 minutes in the evening you could say well that’s one hour per day that’s five hours per week of taking my kid to school. You know and if you know that you’re effectively hourly rate is let’s say 100 dollars an hour you might end up saying well gosh for less than 500 dollars a week I could probably hire a driver to take my kid to school.

I mean this is an extreme example but we already do this in other areas of our life. Have you ever decided not to go and grow your own vegetables and peel and cut them and cook them and prepare them for dinner instead just opting to go into someone else’s place and sit down and they bring it to you on a plate?

Ilana: Like a restaurant? Absolutely.

James: So we do this you know but we forget do this in our own business and there’s lots of leverage for us to get once we become aware of where our time is spent and if it’s effective or not.

Ilana: Yeah and I think it’s kind of like shining a lens on the really core driver of your business which is a necessary process and I would imagine some people might feel a little bit scared to do. For fear of what actually that number might be.

James: It’s better to be honest about it and confront yourself because as soon as you can start tracking this it brings a whole lot of focus. So I’ve got quite a few people who have read the book have come back to me and they’ve made significant changes to their routine. They’ve found 10 or 20 hours a week by becoming aware that they’re spending a lot of time on a low value task.

For example it’s quite common when people are at the stage that you’re dealing with them and that I’m dealing with them that they’re messing around with funnel software. This is a classic. Where they buy software that builds funnels and they spend a lot of time on the layouts and formats and colours and fonts and button colours. Yeah logging into these tools and trying to make it all talk to each other.

Now unless they’re a website developer or some kind of CRM expert probably shouldn’t be spending too much time on that because you can hire really clever people to build those things and let you focus on the thing that is your high level expertise. Almost all of them have some kind of product or service that they’re hoping to sell with this software.

The sooner they can get to making sales, the sooner they get money to reinvest back into the experts. So my advice there is to go with a low resolution version of it in the first place which is just fancy talk for what is the simplest offer that you could make even if it is face to face or over the phone.

You might be able to describe your service and someone might say yes that’s exactly what I would like. How do I pay you? And then you accept the money over the phone via card or they could do a direct deposit. Now you are funded and you can go and hire your expert and build out your website. So a lot of the online world could actually benefit from a face to face start.

Ilana: One thing you’ve also been a master of still kind of touching on this concept of your offer is cross pollination. So you know being an existing customer of yours for so many years you’ve been so good at sort of providing many different solutions for the one customer. I know this myself. I’m dealing with so many business owners so many business owners are focused on getting new customers and building their business that way.

But what I think you’ve been so good at in another way you are contrary into many marketers is that not really focused on getting so many new customers but offering different products to the same customers that cross pollination.

James: Yeah I think this is probably stemming from my time in the car industry where most car sales people are looking for a new customer all the time but within two years 50% of my sales were to repeat referral customers so building those relationships.

And I think the reason why it’s hard for some marketers to do it is that they don’t have a great product or they’re just not appealing to be around for any long period of time usually because they make themselves inaccessible. They won’t communicate with you or follow up after a sale. They are often not accountable for results for their products and they’re so busy trying to win trophies and be the number one launch star of whatever launch group they’re in that their egos spiral out of control and they’re no longer that interested in their customer.

And I’ve taken this approach where I want a lifetime customer and my customer is going to have sustained needs and as I helped them grow throughout their journey and I think you’re a classic case of this Ilana because you started from scratch you know wondering what to do and as you’ve followed that sort of magician’s handkerchief you feel like you keep pulling out keeps coming more and more opportunities and more and more different avenues for you to pursue and it gets more and more exciting and you can help people.

As your needs change then the solutions will change around you as well. But if you have that constant trusted source where you can get information from who’s never led you astray and who actually cares. Then you will continue to do business in that fashion and that’s really all I’ve done and I think it’s a much easier model. It’s a simpler model to have let’s say have a core of a thousand people who will continue to buy from you forever as long as you deliver results for them and you’re the custodian I suppose. And we’ll talk about that being their pre-eminent person in their marketing sphere.

Ilana: Yeah and I guess you’ve created that through what something you’ve had for close to a decade and a membership that does become that recurring customer by then the effect of providing that ongoing support through membership and being a student of yours for so long of course I’ve got my membership now I wouldn’t be a student of yours without a membership.

Possibly been around for too long but that does kind of create that lack of need to constantly find new customers and just look after the people who currently have and look after them well. I think as you say it doesn’t take much to stand out in the current market.

James: Yeah there’s a few elements to creating a community. It’s a very popular topic now. It’s become a popular thing now but it wasn’t so popular 10 years ago. There was a couple of people talking about it and of note probably Ryan Deiss was one of them talking about continuity 10 years ago and happens to have one of the bigger communities online now which is no coincidence and I think there is a bit of extra effort involved in that if you really want to build community especially in the face of innovations that came after I started like Facebook groups.

You have to be very committed to that audience. You have to show up. And I’ve also built a heavy live component into that where I will literally travel to other countries to meet my customers whether it’s the UK or Asia or North America and even New Zealand like I’ve been to.

Well you know I like New Zealand they’ve got good food and lovely surf. I think you have to turn up I mean I go to a local meet ups all around Australia as often as practical and that’s where the extra thing and running live events are supplemented that I think I’ve run about 12 live events to bring together communities.

So there’s a fair bit of work involved. However it directing your energy into one place and you get to have such a fantastic relationship as you watch these people over the long haul.

I see some of my very earliest students such as James Dyson who you know he’s still only like 31 years old and I think he’s still you know I’ve been dealing with him for over a decade. He was just a kid when I met him and to see him build out an empire and grow and serve so many people it’s really quite inspiring to see what people can do with sustained nurturing.

Best way to find core offering

Ilana: Interesting. Okay so for listeners who let’s say are struggling to find their core offer that is so compelling that people just that can’t help but by what would you say is the best place to kind of try and find these sort of touched on before like finding what current offers are selling. What’s the best way for people to analyse that to really find their core offering?

James: I wouldn’t say I’m an expert in this phase. A lot of people talk about it as if they’re doing it all the time but I suspect not. They say you know go and look at Buzzsumo, go and see Amazon, have a look at Clickbank all of this stuff. I don’t know if they actually do that for me. I started with my own needs my big gold strike was finding software that made building websites easy which is how I was able to get my first hundred thousand dollars of affiliate commission.

Affiliate commissions just a fancy way of saying that I got paid if someone bought from me through my link or selling someone else’s product. So I was a commission only sales person. But I used this product and I really liked it and I couldn’t stop raving about it and I wanted to share it with the world and everyone who purchased it via my website generated a commission for me.

So I was selling a lot of this software and from there I got customers who were building websites and as you said I’m able to supply them other solutions. It didn’t take too long for me to start helping them with other things like email software and then eventually teaching them about search engine optimization and driving traffic to their website and using content marketing and then building a membership was just a natural evolution of that to be able to help them ongoing.

So perhaps start with your own credit card list. What products or services do you buy. Because that is an indicator you already know the product or service enough to be able to communicate that to someone else and some of these products or services probably have an affiliate program. It’s not realistic for you to go and set up your own email service provider.

However it is realistic for you to join their affiliate program and to talk about it online even if it’s just in on Facebook or Twitter or if you happen to have a blog in a more advanced versions of it. It would be that you start a podcast or that you create your own group around a particular need or topic in the market but definitely start with yourself. What needs did you have that you were able to solve that you could share with someone just like you?

What is a Racecourse?

Ilana: Yeah I guess you know you sort of bring up a good point in that if you are the customer then you have an innate understanding of the needs and desires pains and frustrations of that particular customer since it doesn’t take much to kind of come up with those concepts and therefore if you’re a customer of it then others are most likely to be as well.

But you’re kind of in that in your journey of finding that affiliate software that worked and then people just had to go to your website to claim that particular software that kind of leads me to the next point of the traffic component that one of the earliest products that I bought of yours was traffic grabs going back and my God how many years and I think more recently it’s morphed into your next version of traffic grab which is on the racecourse.

So you certainly have earned your stripes and the traffic component of online marketing. Do you want to maybe touch on I guess you feel like you’ve morphed into all on the racecourse what it is for people who’ve never heard of it and go about it now?

James: Sure. I think a few things happened there I was able to through the process of developing things like traffic grab which was a very comprehensive traffic course it sort of documented a number of different traffic techniques. Everything from forum posting through to running paid ads on different platforms and all the things in-between affiliate programs in content marketing. I think I was able to see which traffic channels worked well for me and the ones that I enjoyed the most.

And when I think back to my days as a super affiliate whereas driving a lot of paid traffic every single day at around about 2 o’clock in the afternoon I’d sit down with this huge A3 sized pad, A3 like two letter sizes and I’d list out every traffic channel that I was running ads with.

I was running ads from Facebook, AdWords, Adbrite, 7Search, Clicksaw, ADDON media, all these different sources everything from PPC through to media channels where I was CPV and I would sit there and I’d work out how much should I spend in the last 24 hours and how much did I sell and I was spending around three or four thousand dollars a day and I was very active and hands on and as you would appreciate even just managing one or two platforms if you were just doing Facebook or just doing Google Adwords it’s quite complicated.

And then I’d wake up some days and I’d see someone’s replicated my Adwords ads that exact same ads bidding on the exact same keywords like copying me and destroying my conversions. And I realized that this is like day trading and it’s not for me. So I started outsourcing my paid traffic to someone else for my client work and then I changed my business model from the day trading Super Affiliate Marketing more to this recurring subscription coaching model.

And I found that my content marketing was getting very strong and by building on my own website I was building this asset that is still powerful to this day. That still drives a lot of traffic. It’s actually alleviated the need for me to worry too much about paid traffic or doing big launches or having affiliates. These are all optional extras if I want to do them but I don’t need to do them if I just do a podcast every week. That will sustain a seven figure revenue for my business and that through this process of combining a little bit of good relevant content that resonates with my audience.

Having a way to reach my audience via multiple channels whether it’s email whether it’s iTunes subscriptions whether it’s YouTube, Facebook, Instagram, or Twitter these are our primary sort of channels. We also have an app which has pushed notifications and we have a desktop notification.

So the combination of those things along with getting people finding us in Google through natural search engine optimization and through word of mouth referrals is enough to drive our business so on the racecourse is really just a way of saying do not be single platform or single traffic source dependent because if you lose that and you probably will at some point you go into panic mode. So I’m not reliant on anyone place for my traffic anymore. I could get by with just my email list or just my iTunes subscription or just my SEO if I had to.

Ilana: But the key is though with the way you structure it in such a way that it does all point to your core asset which is your main website business which I think is the mistake that so many other business owners make is that they might build out a couple of platforms but they don’t have a way of integrating that external platform to go back to their own core asset and therefore not a traffic channel it’s their building their business somewhere else. Would you agree with that?

James: I do. I send everyone to this one site where I can now as you know I can do cool things like tag them and reactivate them back on social media platforms through a remarketing cookie. But I could also embed a Facebook video on my own website and still create custom audiences of people who visit my website through search engine optimization if they also happen to be on Facebook then I could reach them with a targeted ad because they watched a certain amount of my video.

So there’s still lots of ways that you can take advantage of other people’s platforms but it really does make sense to integrate it with something that you own which is generally sitting on your domain and that you bring people to for extra value.

Ilana: That’s right and I think you also touched on as well for the concept of leveraging one form of content into many different forms which is you know having studied your philosophy on this is at the core of kind of the on the racecourse mentality that rather than recreating all different forms of content for the different platforms leveraging one piece of content in many different forms which therefore enables you to kind of just start creating more content rather than regurgitating or regenerating the same.

James: Yeah and one of the most powerful things to do is to create an enhanced version of that or a supplementary additional extra that people can opt in for. And that’s a great way to build a list but it also makes every single blog post on your website a little sales page or a pre-sales page. And that’s how I get warm traffic to my office.

Ilana: So you also touched on as well the concept of segmentation and you know there’s a lot of talk in the market about segmenting your audience. How do you kind of do that from a traffic perspective?

James: So what I did is I researched my audience because I had access to my own database. I could send a survey and I could understand what their core challenges were and I could break them down into four main areas which means that we can make sure that all the topics that we cover are fitting into one of those four areas and then we can actually communicate to people who are most interested in that particular topic if we want.

So that’s one way but it can also tune things depending on traffic source. If we want we can you know when we put a piece economy on our site then wherever we’re syndicating that to we can put a natural sort of lead into that content.

So for example if you’re doing this podcast and you talk about certain topics you’ve talked about the offer and the traffic in the team then when it comes time to syndicate this podcast you could really make that relevant for an audience member by putting a Facebook post saying if you’re struggling with your offer that converts if you’re not sure how to have an orchestrated traffic campaign or if you’re not sure how to build a team then you should definitely listen to this recent podcast and then you can send people over to your website where they could get access to how they can subscribe on iTunes or stitcher or whatever you happen to stream at soundcloud.

They could also maybe opt in for an upgrade where they might get a transcription or a handy checklist or a self audit guide where they could tick boxes to see what sort of shape they’re in. You know do they have Facebook, YouTube, Instagram, Twitter and their own blog that can be like a five step checklist that people could download and exchange an email for and that gives you an opportunity then to ask them other questions like: are they needing help with their campaigns being done for them or they like to learn how to do them themselves? And from there you really start to get very targeted with what you could offer someone.

Ilana: Which really lies at the core of converting PPC campaigns is having the right conversations with the right people and that.

James: Right conversation and right time. All about relevancy and having good context. This is not a new Internet only philosophy. When we were in the Mercedes-Benz showroom they’d trained us on a segmentation called spaced and the goal was as quickly as possible we had to find out what was driving a buyers interest when they were looking at a Mercedes Benz. Was it safety? Was it performance? Was it appearance? Was it comfort? Was it economy? Was it durability? Whichever one of those was the driver.

That’s what we would focus on when we do the presentation of the vehicle and ignore the other five and that’s where we should be doing online. We shouldn’t be trying to treat everybody the same. We should find out what’s interesting to them and then remove everything else.

Ilana: That’s exactly right and I have heard you also mention from your time in the Mercedes Benz dealership you know various related and offline campaigns that you ran to generate traffic and maybe you want to share some insights on that? And I think it just the same applies online in that that’s a great kind of way of generating additional traffic is some kind of javy with a related party that you know have your customer they don’t have the same product as you and that ability for cross pollination. Do you want to maybe touch on how you did that offline because I think the same applies online?

James: You know I had this pretty absent boss for the last four years and he was the owner of the business and he wasn’t there that often he often overseas. And I had no marketing budget. There was just no no money. Some people said this guy kept his pocket money from school like pretty tight. He is a lovely guy by the way if he’s listening just a big shout out. Thanks so much. I had to come up with innovative ways to market the business with no budget.

So as a Mercedes-Benz product is at a certain level in the marketplace of perception and quality products I approached an art gallery and I said to them, would you like to put your art on our wall in the showroom and invite your customers along for a nice wine night. And they could see your art in the showroom and we’ll invite our customers for the Mercedes-Benz customers and they’ll probably buy some of the art. Now you can keep whatever they buy as the sales and they said that sounds great.

Then I went to the Wine Company and I said you’ve got premium wines, would you like Mercedes-Benz style customers. All you need to do is come along to our showroom. We’re having an art exhibition and you just supply the red wine. And if people order wine you can keep whatever sales you make and we will have the art customers in the Mercedes customers.

And then I went to Bang and Olufsen and the local music store and I said you’ve got the same customers as us. Would you like to put some Bang and Olufsen music in our art and one night and if people buy anything from it that’s all yours and we’ll invite our customers we’ll have wine customers will have art customers.

And then I went to a private banking firm and I said, would you like to bring your high net worth customers to our art wine and music night. And you just stacked on stacked on stacked and everyone invited their customers and lots of sales were made for all the different things and it was a great way for us to swell our database.

And on that night I had a little competition which is fill in the blank. It was like Mercedes B space NZ had to fill in the gap and ticket box to say it was okay to receive email communications and using this one form and by the way the prize was to win a Mercedes for a weekend. So something that cost me nothing to supply we already had like 60 demonstrator cars and often the person who won it which would draw once a month would actually buy something.

And I was able to build an email database of 10000 people using this form from scratch. It cost me nothing. Zero. We’re just using only things we already had and ideas so it was very exciting to be able to make these sort of deals and I would probably credit Abraham for the original inspiration in these sort of triangulation deals. That’s where I got the seed of the idea but I was the one executing it.

And then on the next sort of level stage of sophistication I started doing product launches in the dealership. So I went to the head office and I said I want you to send every AMG model that we have for a weekend and I have an AMG weekend. So that was our hook. I knew that that’s the aspirational model that most of our customers aspire to have won and it was an exciting and interesting thing for them.

And then I got a did a direct response letter campaign to our existing customer base which is bring this letter when you buy a car present it to a salesperson and we’ll give you a case of red wine and people would hand us. I think we sold 12 from that direct response flyer. We also emailed our database. We sent an sms broadcast and I ran ads for every AMG model in Google Adwords, landing on landing page that had the AMG model that was in the ad that had a YouTube video embed of the model that’s in the ad with a call to action to book a test drive on the weekend.

This is why we’re talking 10 years ago so this is pretty sophisticated stuff in Australia at that time. You’ll probably be shuddering but I think when I started Adwords would have been about maybe nine maybe 2004 or so by very early days and I was paying like $7 or $8 to bid on the word Mercedes Benz. It was a little bit untargeted in the very very beginning but of course we all pay that Google tax. But over time I segmented it down by model line and we had really successful campaigns.

Ilana: Amazing and I think you know so many of those core business principles that you applied so successfully offline can absolutely be applied online. I think a lot of people kind of lose their way a little bit just because it’s online but really the same principles apply.

James: Yeah. Multi-channel, multi touch, highly targeted it works. And I still do that. I’ve got a very leverage business model that is quite targeted because if someone goes to my home page I’ll ask them to select their biggest challenge which is one segmentation and then I’ll ask them where they’re at in business and that’s the second segmentation depending on what they select. They’ll now be presented a very relevant solution for their challenge at their level of business and that increases sales.

Ilana: Kind of like choose your own adventure book.

James: It is like choose your own adventure. All right so let’s touch on the third point because you know we’ve touch on the traffic part and I’m mindful of the time which is the team aspect and obviously there’s no way any of us could do what we do online in such a leveraged way without the people behind us supporting us. And you know you know at one point you’ve had a team of 80 or something?

James: It was only 65.

Ilana: So I think you can definitely share some insights. This is on the best way to build a team, the best place to start if you haven’t started at all and what some I guess common tasks you could outsource.

James: I will try to start out by ourselves. That’s a pretty common thing and I did. It was just me in the beginning but we run out of capacity. You get tired and also you’ll be doing tasks that aren’t that useful for you to be doing so some of the early things that I outsourced were support.

I hired someone part time to man actually to set up and then man a support desk and answer about three to five tickets a day giving people bonuses that they were claiming for me. The next thing that I hired someone to do was an article writer on a per article basis to write articles on the software that I was promoting.

And I did the calculations that if I paid $10 per article and I had 10 articles it was $100 and I needed to make two sales from those 10 articles. Break even in I knew that I could make more than that if I published them on easy articles or on my website. So I got it. I think I had hundreds of articles written so I spent thousands on content. I made tens of thousands in sales from it.

So it simply working out what tasks are you doing that you could get someone else to do and then start bringing people in and then you’re literally buying back time and then you can reinvest that time on something higher level.

So when you record a podcast like this you could either spend three hours editing a one hour podcast or you could hire someone to edit the podcast for you while you get on to serving a customer who might pay hundreds of dollars and if you can make these little deals with yourself you’ll end up building a small army of team around you to support you.

So these days I have five people in my business and that’s because we sold our search engine optimization agency and we sold our website development business so I’ve just got this little team of five. They are full time working just for me in the Philippines from their own home with flexible hours and they’re just tremendous. They’re so talented and loyal. They’ve been with me for nine years almost.

I think we’re up to nine years now the longest serving in seven years for the most recent person. And they are just didn’t good. They’re just so good. And now when I do things I just handed over to them and they take over and sort of do all the things that need to get done which they’ve got very heavily documented and they know how to do because I train them in the beginning and then they just took over and this is a long term process.

If you want to go down that path but it’s tremendously powerful it’s like building an airplane and then you get to fly it all the time. You know you get the leverage of it but it’s not easy at the beginning. So put a little more effort up front when you’re taking on team members. Go full time when you possibly can where it makes sense to have ongoing tasks that you’ll be doing forever and put your energy into those people because you’ll get such a great reward from developing people.

Biggest mistake that people make when building a team

Ilana: What would you say in your experience are the biggest mistakes that you see people make when it comes to hiring team members or outsourcing some tasks?

James: Well task sourcing is a mistake in a way that’s like people who spend five hours on five to find a five dollar supplier for a task they could have done the whole task in like 20 minutes. So it’s like stepping over 10 dollar notes to find 10 cent pieces I don’t understand that one. I’ve never used an outsourcing task service like that ever in the last since I’ve been online like over 10 years. It’s not how I roll.

I think the mistake people make is they really expect someone to bring everything in their table that will require no training that can think for themselves that knows how to do every single task and they’re going to pay like two dollars an hour for that. And this is where they’re going to be set up for failure.

Ilana: I guess it sometimes always looking for a replacement of themselves in some ways.

James: Yeah it’s just like you can’t expect to just buy a computer and it’s already got all the stuff on it and it knows everything that you do like generally go to start with a little bit of set up. A bit of formatting, a bit of putting in passwords and preferences and tuning it to make it work well for you and that’s how I’ve gone for inexperienced staff and I’ve trained them and got them good without bad habits and without assuming that they can do something unless you know we’ve given them appropriate resource or time to develop that skill.

Ilana: Okay. Well we’ve touched on those three core elements. I believe that we have covered a lot of the content that’s in your book. Thank you so much for coming on today’s show. I’m mindful of the time so I know you’re a busy person. The surface calling you.

James: Those things don’t sound well if you put them together.

Ilana: I just want to thank you so much for coming on today show it’s been an absolute pleasure having you on. And where can people find out a little bit more information about you.

James: Well look I mean the book Work Less, Make More is available on Amazon by James Schramko. That’s a great foundational star. And if you want to check out my podcasts and Ilana you’ve been a guest multiple times on there. That’s over http://superfastbusiness.com” rel=”nofollow”>http://superfastbusiness.com“>superfastbusiness.com.

Ilana: Awesome. Thank you again James. And no doubt I’ll talk to you soon.

James: Thank you Ilana.

You’ve been listening to the talking marketing podcast. For more information on today’s episode head on over to http://talkingwebmarketing.com” rel=”nofollow”>http://talkingwebmarketing.com“>talkingwebmarketing.com.