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Episode Transcript
John Newtson:
All right, hey everybody, today we’re going to be talking about something that I think is a little bit different and a little bit interesting.
John Newtson:
I got Connor Lynch here with me and, as all of you know, connor was the publisher of a group that went from zero to about 50 million really, really fast.
John Newtson:
And then they had some regulatory issues and you know, connor’s moved on to other things and he’s launching a new company. What I think is fascinating is that what Connor originally did with his business was something that’s very, very, um, understandable to most people who have a newsletter publishing business, right, um, you have front end products to multiple backend products, the price points are things you’re all familiar with and things like that. But now, after having built a $15 million company, he’s launching something new and he’s not going to take that approach at all, and I think he’s going to do a different business model that is better math, better for this current environment and has a higher likelihood of reaching bigger numbers faster than kind of the traditional model that we think of a front-end newsletter product to back-end newsletter product, and so that’s what we’re going to be talking about today is what this model is, why he chose to go this route versus what worked before for him and kind of dig into the details. So, connor, thanks for being here.
Conor Lynch:
Absolutely. I love these, so excited to dive in.
John Newtson:
All right. So let’s start with kind of let’s go back to WealthPress and kind of do a review of what that approach was in terms of because what we’re about to talk about here is a difference in marketing and sales model and a difference in product model, and then with that comes a difference in copy model. So let’s go ahead and just kind of go back and look at like what was the basic business model, product model of WealthPress when you launched?
Conor Lynch:
Yeah, absolutely so. When we first launched, we didn’t actually have any front ends to start. We had a collection of backend offers and we introduced front ends because that’s the acquisition model that everyone in the space was using you run people to something low priced, under a hundred bucks, you convert them and then you sell backends to those people. Now we started doing that and we had a limited level of success and that was the sort of first year of our growth. And again, it was a traditional model. We would do lead gen to a front end and then we would sell not just to the front end buyers, we would sell to the entire lead pool back ends which some pubs at different points in the history of the industry didn’t even do. That they would sell back ends only to front end buyers. I mean, even in the last five years I’ve heard people say that they do that still, which blows my mind, because they didn’t think you could sell a backend directly to a free lead, much less to cold traffic. When we achieved our big breakthrough, part of it happened on the copy side, with the Blitz promo that Kyle Milligan wrote, but the bigger reason why that was a breakthrough for us was because we went up the value and price scale and we did that to external. So Blitz was, I think it was a $2,300 product and we sold that directly to cold traffic and I remember at the time everyone would tell me that that can’t work and it won’t work. I had pretty sophisticated media buyers saying like, if it is working for a bit it’s just a fluke. But we got that one to work. We did probably $5 million of external sales on that offer and realized that you could sell those backends directly to cold traffic.
Conor Lynch:
Now, that said, our model after that was very, very similar to what everybody else was doing, which is selling a basket of similar backends, different strategies, different big ideas to that audience. So an individual franchise might have three to five backend services and you were constantly in a cycle of killing services that you know weren’t getting a lot of interest, launching new ones, having to write a huge volume of copy across all of those different promotions, support all of those different services from a fulfillment perspective which is manpower intensive. And so in that sense, the WealthPress model beyond the acquisition step was pretty familiar to everybody in the space. It would look the same as what back-end monetization would look like for any of the Agora affiliates, and a lot of that we learned from working with Brett Holmes holmes, for example. He was an early consultant with us who kind of taught us that model. So we we built it that way.
Conor Lynch:
Our acquisition model was totally different. It was a bit innovative, but everything after that was what the whole industry essentially has been doing for years and years and years and years, which is you have a lead pool, some of whom are buyers, some of whom are non-buyers, and you’re marketing two thousand dollar products, one thousand to like, twenty2,500 products to those people, and each franchise has to have a catalog of these to work. You can’t make a franchise work on a single offer. So that’s how we did it at Wealthpress, and even leaving aside the regulatory issues that I mean but at this point everybody knows that story, so we won’t dive into that one again.
Conor Lynch:
Leaving aside that for a second, we hit other headwinds over that period that would have caused a significant trouble, even if, even leaving aside the FTC, the media costs everyone’s noticed this media costs across the industry have exploded. Tracking is worse, so the quality of the, of the traffic that you’re getting in, isn’t as good as it could have been in the past. The propensity for people to buy some of these backends, at least over the last year and a half two years, has not been what it was, I mean even before the 2000 boom. So the model as it stands now, especially with increased media costs, it just it’s tighter, it’s a lot harder to make it work, which puts more demand on copy, uh to to really hit above its weight class, which is admittedly somewhat harder with intense, much more intense regulatory scrutiny. So you’ve got this model that’s being squeezed from basically all sides and everyone’s still trying to make that model work.
Conor Lynch:
Well, I wouldn’t say everyone. There’s a few people who are doing what I’m sort of proposing to do, who have already made it a success. So I’m not exactly a full pioneer in that sense. But the existing model is under intense pressure and I mean the interesting thing to me is I don’t think it really has to be pressure. And I mean the interesting thing to me is I don’t think it really has to be. If you look at every other niche outside of financial publishing, even what’s isolated to just the other make money niches, real estate, investing, biz, op, career, op, spaces, things like that, make money online they’ve all shifted to a model that downplays selling front ends of any kind. Many of these businesses have no front end, nothing for sale even under a $5,000 price point, and they go direct to a sale at $5,000 or higher and have products that range in price up to $50,000, sometimes $100,000. And our space has been kind of the last to adopt a lot of marketing innovations.
John Newtson:
We’ve seen that with the VSL, with webinars, with the product launch structure, and so it’s not surprising that our space is the last to kind of move to make this transition, as well, I always laugh when I hear people who are like talking about a company in our space that innovated some big thing and you and you’re like right, really disconnected from the rest of the marketing community, because really everything you’ve listed is very much something that happened first, with possibly possibly the exception of, like the e-letter yeah well, other than that guys like like sam ovens had been doing this, this formula of high-ticket telesales thing for what 10 years and sold his business like three or four years ago, so he had the full career of this before we even discovered it as a niche.
John Newtson:
You have some people like Zach and Tim who’ve built a business around a telesales model, and that’s kind of what we’re going to talk about here is the difference in building a telesales-focused marketing funnel on the front than a product front-end to back-end, and how this really pulls through every aspect of your business. It has a very different experience as a business owner of the business. There are issues, there are limitations in terms of where it could possibly go, but I think that the limitations on it are much higher than people might expect, and so, yeah, sorry to interject that there, but no, no.
Conor Lynch:
Those are good points. Where do you think we should take the conversation next?
John Newtson:
Well, I think the thing is is that what I really want to highlight here in the front is that there is an existing acquisition marketing funnel model, right, that then pulls through, like when we think of a direct response business. Right, a direct response business is built around an acquisition model, fundamentally because you are going that is the customer generation. Right, you’re not a retail business that is relying on foot traffic. You’re not doing like all your advertising and all of your marketing is essentially, how do you proactively go out and find customers, bring them in and sell them more stuff? And so the business is like we talk about publishing, but it is first and foremost a direct response marketing business. That’s like the info pub business. And there are unique things to financial, for sure, but I think sometimes we’ve spent a lot of time focusing on those unique things and we need to step back sometimes and be like wait a second. This is info marketing in the sense of direct response marketing and with that, your choice of acquisition model kind of determines your structure in your business. And that means like your product model.
John Newtson:
In some product models like, I would say, the current newsletter product model is very, very, very copy intense because you have a constant need of promotions.
John Newtson:
Um uh, it’s very, very um like the new ideas constantly, um, the products you’re in order to expand, like each product, like however good your business is at acquiring customers and bringing them in, you kind of have a limitation on the size of any particular product.
John Newtson:
You’ll have an average size of what a good product is in your business, and bigger companies have a bigger average size, but a smaller company will have a smaller average size, and so then, in order to grow, you need to then add more product, which puts more work on both your editorial teams, your production teams, your copy teams. You have to find new gurus, maybe you have to add more products, and then you have this constant kind of churn on your product model as well as, kind of on your customer base, because products work and they don’t work, and so one of the very normal things in the business is this idea that you have to close a couple of products every year in order to relaunch a new thing, because the new products are the things that are most profitable, which is entirely a different type of experience than what we’re going to talk about next.
Conor Lynch:
Yeah, absolutely. And if you think about it for a second before talking about what comes next, that whole model of launching, supporting and then killing services over time is so problematic across multiple dimensions. One just in terms of the internal resources the cost to support that is extremely expensive. You need copy for each of those offers. You need an editorial support staff for each of those offers. There’s a customer support cost to maintain each of those offers. There’s a customer support cost to maintain each of those offers. I mean, anyone who’s worked with a guru who has to support five different offers knows that it strains the guru and it means that their fulfillment across the basket of stuff that they’re doing is probably not as good as it would be if it was focused on one thing or one or two things. So that’s the internal support cost side.
Conor Lynch:
Then the fact that you’re constantly killing offers that people got excited about and purchased. Sometimes if you launch a new product in some cases and it bombs completely and they’re not able to figure out a way to sell it within six months, that thing might not even survive a year. So someone got excited, spent real money, got into the service, was trading it. Maybe they enjoy it, maybe not, who knows, but they were excited at one point and they got in, and now, six months later, they’re killed and they’re being moved over to some other offer that they weren’t necessarily enthusiastic about, and so that’s a bad customer experience. It’s also not a great customer experience in the sense that people come in, they want to get proximity with the guru that’s a big thing that we know is attractive to the customer base and they find out that they have to buy like 12 things in order to do that Also not a great customer experience.
Conor Lynch:
Whereas you could get them to spend the same average amount of money on a single offer and have them be thrilled to do it, as opposed to being like fuck, another offer I have to purchase. And. And have them be thrilled to do it, as opposed to being like fuck, another offer I have to purchase. Um then the third dimension where it’s like really not ideal is on the regulatory side. Like, if you’re constantly killing offers, the perspective on the part of a regulator is going to be like well, how, how legitimate can these services be if you’re constantly killing them? So it it’s. It’s bad for a number of reasons beyond just the economics, right right and there’s a lot there with that.
John Newtson:
And then one of the things that I remember, like it was a frame that Porter Stansbury put forward in 2005, I think it was when there was a big kind of Agora marketing conference. And he got up there and he’s like there is no Agora model because we’re all different businesses and this is I’m gonna tell you my view of things. And he’s like I don’t think you’re paying attention to me. If you subscribe to a freebie letter, like you opted in, you were interested, but you’re not really listening. And so he talks to his Ascension model and he goes through like you know the front end product, okay, you’re paying attention a little bit, but not really, you’re not really listening. And he goes up and it’s not until you get to that $25,000 Atlas Club that he’s like I have your attention, you’re really paying attention to what we’re doing, you’re really engaged in the business, like that’s my customer.
John Newtson:
And so there’s this really cool perspective he had on the business was essentially what all of us know is that the front end product exists to do two things right.
John Newtson:
Normally it’s there to subsidize the media costs to acquire a customer and to identify who that paying customer is so that you can sell the higher price products, because someone who’s going to put some money out is likely to put more money out, and so that’s the initial purpose of the front end product.
John Newtson:
In terms of just the marketing math not like part of that is building a relationship is huge there, and that’s why the front end product has to be amazing, because you have to build a great relationship in order to be able to keep them. But what he was saying was more that the perspective is like. My real business is having a system to find that $25,000 buyer right, and that view on the business is, I think, a little bit different than a lot of people have, because we don’t think about it as much is that the lower price products are there to find the really great buyers, the hyper buyers, at the higher price point, and if you have a model that can identify that guy at a cheaper cost more effectively with less work, maybe that’s something that’s worth exploring and that’s kind of where we’re going to go here next.
Conor Lynch:
That’s a really great perspective and I think that that is sort of the transition that I’ve made in terms of my thinking. But also a number of other pubs in the space have done the idea that there is a core customer you’re looking for. They spend a lot of money. You want to create a very high level, very expensive core customer experience for them. Now how do you find someone to buy that? Now you could sell 500,000 front ends and then sell those people some $2,000 back ends and then sell those people into an alliance program or something akin to that.
Conor Lynch:
But it turns out you don’t have to do all those things. You can actually find people, relatively cold, who are willing to make that higher ticket commitment almost right off the hop. And I think that goes back to again that parallel with WealthPress where people didn’t think that people would spend $2,000 off the hop from cold to 40 minutes later they’ve given you two grand. Well, they will. We know that they will, and so I think a lot of pubs still think that people won’t necessarily come in and spend that kind of money within a week of knowing you $5,000, $6,000, $7,000 within a week of knowing you. But the reality is they will and we see it in these other niches. We see it with a few examples within our niche Tim Sykes, for example, and Zach. That’s the number one example. But there are other pubs doing it Stock Navigators they’ve got a pretty decent size business doing this. I saw Funnel today, prosper prosper trading.
John Newtson:
They’ve got a funnel that does exactly this now they’ve been doing this version that prospers, new inversion of this for 20 years.
Conor Lynch:
Well, there you go so it’s um, it definitely does work, and it’s working in niches like make money online where, frankly, people are a lot poorer than in our niche. The reality is people have a lot of money to spend on financial information. If you look at the skew of people within our audience and how much money they have to invest and how valuable good information, good insight, good intelligenceences for those people it’s extremely power law concentrated. So you have this chunk of people who, for them, $5,000 is amazing value to be able to get the right investment advice.
John Newtson:
And well, it’s not investment advice, right, investment research information. I think this is interesting because this is like there is this continuum of education to advice, right, yeah, and it’s where you kind of place the product on the continuum. We should get into that, I think, a little bit later here, yeah, but first let’s just lay this out, because what I want to do is like, let’s, let’s lay out what the what the model is, um for people, and then I want to talk through through a few things on it. One is the idea of the relationship building that you do with the customer. Two, the copy model. That is most effective here, why I think it’s so effective and I think I’d like to get your take on that. And then also how this changes the acquisition math. And then, finally, how this affects the staffing issues around running a business here. And I think those four areas are pretty much where this gets really, really interesting. And so why don’t you go ahead and describe what the model looks like? Sure, why don’t?
Conor Lynch:
you go ahead and describe what the model looks like. Sure, so the way the model kind of works is you’re buying cold media into a short lead capture page with, typically, to do it well, you want a really really high quality lead magnet, like something that would be more valuable, higher perceived value than what people would normally expect to find on a lead capture page. And I’ll explain why in just a second. Because you’re using the lead magnet in more ways than just at the lead capture step. So someone will opt in, they’ll land on a page where there’s a video between sort of 10 and 30 minutes in length. Most of them kind of land around 20 minutes, and the purpose of this video is a couple of things. I mean, the final call to action you’re getting here is not for them to buy the program, but for them to complete a qualifying survey and schedule a phone call with a phone sales rep. Now the reason that you want to have a really really high perceived value giveaway on the lead capture step is in the opening of the video. You’re using that in another way. You’re not immediately giving that lead magnet out in an email fulfillment. As soon as they opt in, they land in the video there’s the opening promise of the lead. However, you’re opening it and then you’re telling them, if they watch through to the end of the video, they’ll get instructions on how to claim their lead magnet. They watch through the promo structure We’ll get a little bit more into promo structure in a second and how to claim their lead magnet. They watch through the promo structure We’ll get a little bit more into promo structure in a second and how the copy works a little bit differently.
Conor Lynch:
Towards the end, in the call to action for them to schedule the call, they’re told hey, when you get on the call, we’re going to evaluate to see if you’re fit up for the program, but we’re also going to give you this free lead magnet. So that’s how you collect it. So that’s how you collect it, so that and so that, that. So that’s the reason you want something very high quality, high perceived value, because it’s not just for capturing the lead, it’s to get them to watch the video and to get them to schedule and then show up for the for the call. Okay, and then it’s close. And so, in terms of economics or through economics a little bit, actually, yeah, typically you’re trying to get a CPL somewhere in the $5 to $15 range. You want to get somewhere like 5% to 10% of the viewers of leads, basically to complete the survey and schedule a call.
John Newtson:
And then you’re hoping for like 30% to 50% show up rate and 25% close rate on the call itself, right, okay, so it’s basically a very qualifying opt-in page to a video that’s selling the idea and the conception of your sales call on the program. So you’re selling a big idea of the program essentially, but you’re not closing them. You’re trying to get basically just it’s almost like with a normal lead gen funnel. There’s this issue of friction, right, like that always uses a measure. So more friction is more qualifying, less friction. You get more people to opt in and friction is more things they have to do, more things they have to consume, and every time they consume something and keep going, they are more and more qualified.
John Newtson:
And then so it’s kind of like the simplest version of this is there a link above the fold in the email or a link below the fold in the email, right Like there’s more intent on the. If someone had to scroll down, they actually were paying attention more theoretically to click on it. Same thing with opt-in, like opt-in to get this thing versus just click here to see it. Like the person who opted in to get something had to go through a higher level of friction to get it. So they are therefore more qualified, they’re more interested, they’re paying attention a little bit more than the person on average who just clicked through. And so here you have click through to video. You’re going to lose a lot of people. I’m imagining here who will not schedule a phone call. Yeah Right, because that’s a very high friction step.
Conor Lynch:
So the person who 90 to 95% you lose.
John Newtson:
Right. So there’s a very large number of those people who will be gone, but the people who do schedule the phone call are extraordinarily interested in this, which speaks to one thing that we do know in this business is there’s a lot of price elasticity and that sometimes you’ll have a bit. You’ll have a product two thousand dollars. It’s not converting super well, so you’ll make the thing oh, I’m gonna drop it down to a hundred dollars or two. You know. You know, cut the price down and you don’t really get that much more.
John Newtson:
You get a bonus of people, but it’s not that many more to make it worthwhile the reality is, the people who were interested in it were willing to pay way more, but there’s not as many people interested in it. Um, yeah, and that’s what you’re looking for is those people here who are super interested in this program because they’re willing to get on a phone call to get this lead magnet and go through this very high friction process to what they probably know is a sales call. They kind of get that um in order to um, continue, continue down this path because they’re so interested, and so from that then, do you do anything with the loss leads?
Conor Lynch:
Yeah, so you do Typically. So I’m working with a guy who has built a lot of these funnels and niches outside of financial. He’s not experienced in the financial publishing space, but literally every other niche that runs this funnel structure like. He’s built these for Frank Kerr and he ran this program internally at GKIC for Dan Kennedy. He said that typically when they roll one of these funnels you don’t really think about the email follow ups or setters or any of those pieces at first. You want the economics to work literally on first run through the thing and if it’s not working there then you probably have to go back to the drawing board. But then once that is working there’s a lot you can do with those names Because again there are some people who are not ready to spend five or six thousand dollars right off the top.
Conor Lynch:
So there there’s typically a sequence that they build that that runs over about 30 days, that that tries to sweep more of that audience in. Some people do things like try, like try to sell a qualifying front end to then push them into it, but not as the initial touch point, usually like after someone scheduled a call, or deeper into that 30-day sequence. Some of them don’t do that at all. But the other big piece that they use is something that is not super common in most of the newsletter space, which is what’s called a setter. And for those of you who are not familiar with what a setter does, setter looks at lead scoring and that could be things like a lead that comes in maybe watch the video. You have data on how much of it they watched.
Conor Lynch:
They didn’t schedule a call, but they’re continuing to open emails and engage, so they have a high enough lead score that this person manually reaches out and says hey, I see you’re interacting with our stuff. I’d really love to set you up with a demo of the program, or I’d really love to set up a call with our team to answer your questions. And then they kind of help close the gap between some people who, for whatever reason, there’s something keeping them from taking action, but they’re engaged enough to be interested. So that piece usually gets added at a certain point. So there are a lot of layers to this and the sophistication can get quite complicated over time. But again, the model should work with just that sort of first pass right and then.
John Newtson:
So there’s a lot of things you can do to move people from those leads to get a higher percentage of them. And then if you’re an existing publishing business with an existing model, you’re using this. You would, of course, after a certain you could probably just push your other stuff and you get some success there too with that. So the I guess the next thing to talk about then, I think, would be, um, the product model itself, and then we’ll get to the copy, because I think those are two very interesting things to kind of get into. And so, um, what does a product look like? Because you’re coming in at a five thousand dollar price point, what does the product look like? Um, for that. And and I guess I’m going to back up one thing is, generally speaking, is the the concept for the call, essentially a demo of the program?
Conor Lynch:
It can be. It often is. It’s usually structured in a way so it feels like the person has already started on the call and it’s it’s not like here’s a sales pitch and then if you agree and give us money, then we start. It’s like, no, let’s start. We’re giving you this lead magnet, the value. We’ll probably get a demo you through that and and and kind of future pace experience of the program. So it feels like you’ve started and then it’s like, if you wish to, continue, then you must pay.
John Newtson:
So that’s, that’s okay. Once it works well that way, right? So once you’re moving, then that’s like lowering friction on the commitment level that they have. Like, you’re getting on the call, you’re not. You’re starting the program. We’re giving you some of the elements of it for free. You just have to kind of get on here to consume it with us, and then then we’ll move to a higher friction point of like to kind of get on here to consume it with us, and then then we’ll move to a higher friction point of like give us money, which is the ultimate friction point. Um, all right, so what does the product look like?
Conor Lynch:
so, I can answer that a couple ways, like across the the full sort of space where they’re using this funnel structure. There’s two broad categories of things that I see. One is some sort of educational course that’s packaged usually across an eight or 12 week bootcamp period. That I mean it’s a la carte, so people can go in and go through all 12 weeks or whatever in the first week if they literally just do that. But there’s that component. There’s usually a community component and there’s usually a live component, that’s you know two to you know one to three times a week, I would say where you’re live with the guru, you have proximity, you’re able to ask questions and that proximity is a big piece.
Conor Lynch:
Frankly, the community is a big piece and that’s something that a lot of newsletter products have shied away from the idea. I know there’s probably people who are going to watch and listen to this and think like holy shit, the idea of a forum where my customers can talk to each other sounds terrifying. But it’s like these products are built in a way where they’re good fucking products and, because it’s the core of the business, product development doesn’t end at the point of launch. It continues on an ongoing basis. So the version of the product that you launch, compared to the version that exists in six months to 12 months, continues to develop and respond to the customer feedback in the community. So it becomes a stronger thing over time.
John Newtson:
And these are not fundamental. Go ahead finish.
Conor Lynch:
Yeah, sorry. The other model, which may or may not be applicable to our space, is the commoditized service model, which is more of a B2B thing. But I’ve seen B2C versions of it where there’s some service. It’s not an educational thing. People aren’t expecting to get educated, they’re expecting to get a result or deliverable of some kind and again, a lot of this is B2B. So you see, agencies do commoditized service packages that they sell this way developers, that kind of thing. I suspect that if you created a really high quality done for you service in certain categories, in financial, you could do this, like the one that stands out to me as obvious is private equity, so venture capital stuff, so an early stage private placement done for you service where you have direct proximity to like. If Marin Katusa did a funnel like this, it would definitely fucking work, um, so I think that there’s a space for that kind too, but for the most part, what we have seen so far is the educational version.
John Newtson:
Uh, and at least in our space right, and I think that’s where I’m gonna go next is is kind of so. One of the problems with a lot of community things in our space would be it’s with products that are that are pick based um, you’re only as good as your last pick when people are talking, yeah, education based is, and so if you’re on that continuum of like this is how to do it, versus it’s done for you, which traditionally you would think of as the more done for you, it is the higher price. It is um, which is why a wealth advisor is paying. You know you’re getting a percentage of your portfolio which is insane in and of itself, um, but um, with education right on the other.
John Newtson:
On the other end, it’s like here’s how to do it, um, and you would normally think of education as being, uh, it’s like a book. It’s, it’s less intense until you, until you frame it in the context of like college, university course, um, really like highly skilled things, and I think this is where we go into the copy approach, um, because from what I’ve seen, you tell me if this is, this is the way you see it too is that these are fundamentally guru funnels. It’s very much about the person and building up the credibility and expertise that you can only get this exact version of this education from this person, because it’s his method, his model, his unique strategy.
Conor Lynch:
Yeah, you see it, that’s 100% the case. It is much more guru driven. One thing that comes up in copy in our space quite a bit with new copywriters who come in from outside the space. They come from niches where virtually every promo is some version of Hero’s Journey and then they come and they try to write that kind of copy for a newsletter and it bombs completely because that historically doesn’t really work that well. For 99% of newsletter ideas it doesn’t. And for these sorts of funnels Hero’s Journey does work because the person buying has an aspirational desire to become a trader, become, you know, learn that investment skill set, learn that trading skill set, master it themselves. So the idea of following in the path blazed by the guru, that’s important. So Hero’s Journey copy not only works but is dominant in in this category.
John Newtson:
And so I think that that’s where it’s hero’s journey. But also like the, the proof and credibility element of the guru. Like yes, this is harder, the the, the the weaker the credibility and element of the guru. Like yes, this is harder, the the the weaker the credibility and story of the guru, the harder this is to do.
Conor Lynch:
And so, like this this is a business model for some, for gurus who are solid and who can stand on on their own laurels uh, without without you know the embellishment that sometimes happens in this space guys who who could go into a room and actually talk shop on this stuff, and the other guys who know how to talk shop will be like yeah, this, this, this guy gets it Right.
John Newtson:
Right, and so I think that’s that’s an. That’s a key. Key component is you need to have somebody who’s really good, um, in terms of, like their, maybe their track record, their professional history, their connections, like whatever it is. They have to have a strategy that they use. It’s fundamental to how they approach the markets, and the interesting thing to me when I was thinking about this and going back is how, you know, one of the best versions of this has always been Tim Sykes’ millionaire challenge in my mind, and how Tim has consistently said, like this is how I do it, this is what I do. You could probably do it better than I could. In fact, lots of my students have outperformed me once I taught them how to do this, because, while I know everything that I how to do it, like you’re still a trader and your miles may vary. Miles may vary. Like you can be better than me, you could be worse than me. Um, it’s the same approach and that always was interesting to me.
John Newtson:
It’s such an interesting point, right, because, uh and he does have that one guy who I think, tim grittani, who crushed, crushed, uh, sykes’s results and is in a lot of yeah, and he has a bunch of students who have gotten up to a million dollars in profits and real money, so he can really put.
John Newtson:
He has his own track record which is proven and phenomenally as a statements for Then he has students’ track records now and so that’s very active trading in what he does, but it’s a very niche, niche, niche niche service but they’ve sold hundreds of millions of dollars right, so they’re amazing at that. And so I think that’s the thing is that you need that guy who is kind of unquestionably good at what he does and if someone tried to punk him out and say this is bs, he’d be able to kind of slam him right, and so I think that’s the. That’s the key difference in this space, um, versus kind of how a newsletter guru right now in community, right now, like you keep community away because, like you have so many editors and things like that who you know.
Conor Lynch:
There’s editors who are really good analysts but they’ve never really managed money, they’ve never really traded successfully, but they’re really good at doing this piece manage money They’ve never really traded successfully, but they’re really good at doing this piece, yeah, or even I mean there could be editors who are good and have a good track record, but they know that, just because of the way that statistical distribution works, eventually they’re going to have a bad run. And so if it’s an entirely picks-based service, if you have a community in there and people buy during a period right before a bad run begins which statistically is going to happen, no matter how good you are then all of a sudden the vibe in that room is going to be apocalyptic for some period of time.
John Newtson:
Yeah, exactly, and that’s the risk of the community model with a lot of these things. But I think education-based, and I think that the education market in this space is very underdeveloped, because there’s a couple of arguments against it that I’ve heard. One is it’s purely trader education, because there’s no investment in education, which I think is a huge hole actually in the market. I do too. Two is that there’s no A lot of the publishing business is generally in its, I’d say, best form, is a renewals based business, and there’s a lack of renewals on the lower products, sometimes because it’s a 12 month bootcamp or 12 week bootcamp, and so the lack of renewal revenue is less attractive. When you’re selling lower price education products, I would say that at the $5,000 price point you’re already at a price point where you’re getting more money. Your LTV on that one purchase is higher than your LTV on your other customer. It’s a question of how many you have.
Conor Lynch:
I would definitely interject on. That purchase is higher than your other customer and the question of how many you have, I’ll interject on that. Usually when you buy it’s not lifetime access to that community, it’s usually like 12 months and the renewal is usually at the full price. So there is quite a lot of renewal activity. I mean it’s probably similar, on a percentage basis, that you would see with products in the newsletter category. It may even be higher because the community engagement is so intense, but your revenue definitely doesn’t end at that $5,000 purchase, right.
John Newtson:
Nice. And so then from a copy like a funnel here, then you were telling me this offline was that a promo here? Like that, um, you were telling me this offline was that a promo here? Like that 20 minute video is the is the heaviest lift on the copy side. Yeah, um, and that is a 4,000 word video. It’s not like a 15,000, 20,000 word promo hour long video that has to do all the heavy lifting, and so the copy approach is actually um easier in that sense.
Conor Lynch:
Once the offer in Vuru, it’s not only that when you have one that works, they tend to. Because here’s the thing, like if you do a promo around. I just reviewed on a copy call with Oxford James Altucher’s recent launch around the Apple Vision Pro launch and literally this promo went live and was deadlined the next morning, which was the Apple Vision Pro launch. And literally this promo went live and was deadlined the next morning, which was the time of the launch. So this entire promo was like the launch period, where it was active and relevant, was 12 hours, so you need to then write a new promo, whereas these promos they tend to run for much longer minor release changes on the landing page, but the core promo could last years, which is unheard of in the financial space. It’s much more common in other categories, especially outside of make money. But even in like real estate, investment, biz, op copy lasts longer investment and biz op copy lasts longer than.
John Newtson:
But the reason is is that it’s it’s focused on the guru more than it is on the market, because it’s more important to sell the person than it is to sell what’s happening in the marketplace. That’s exactly why and I think just just just to interject on this real quick I think one of the things that I find interesting about this and exciting for especially smaller publishers is, like, the hardest point of competition in this industry is finding copywriters high performing copywriters. Despite all the copy education that’s been out there and the number of people who have tried to be financial copywriters, the actual talent pool continues to be extraordinarily small. Actual talent pool continues to be extraordinarily small. And once somebody gets good enough, they go to, they go to market wise. They go to the larger publishers because they can get much higher bonuses, because those companies have much larger scale, so their promo can run farther they can. They can make more money.
John Newtson:
They also get stability, which is a freelancer stability. It’s not something that a freelance copywriter has, generally speaking, um and so, uh, finding, finding like great copywriters is the constant struggle of um every publisher, and the smaller the publisher is, the harder it is, and it’s a huge pain point across the industry. And what’s interesting about this model is because you don’t need as many copy packages. The copy package doesn’t have to do the entire lift because you have a sales process, that kind of erases. I mean, frankly, I think it erases that pain point almost entirely.
Conor Lynch:
Yeah, if you are a smaller pub and instead of having to write six packages that are good over the course of a year, or 12 or whatever it is, because even a single small franchise could easily need six promotions over the course of a year and either you’re writing those internally yourself or you have to find other writers. It’s expensive, it’s hard to do With this. It’s one offer that could work for multiple years and you can, you know, with the same resources that you’re going after six promotions that you know are going to be dead within 18 months. You could write, you could take multiple shots of something that could last years and be a core of your business for that entire period of time, for both acquisitions and internal monetization.
John Newtson:
Right, and so then the other main difference is then is that, like, the amount of production you need to do on a weekly basis drops, I mean? I mean it’s cutting not in half, it’s cutting probably to a tenth of what it was. Yeah, um, you need the sales team, which there’s a lot more um setter sales groups out there than there are um copywriters. So your, your marketing calendar is different.
Conor Lynch:
Yeah, the other thing to just note on, like it used to be that finding telesales, people and setters was challenging because it was such a niche thing. But over the last five or six years that became a career op in the make money space to become a high ticket closer and most of the people who sell that as a biz op have a flywheel business where they also take their own graduates and then position them with other companies. So there are a lot more sources for trained closers and setters than there ever was prior to now.
John Newtson:
Yeah, and I have Zach. He made great contact who he uses to. He basically specializes in this and he can specialize in building, helping you build out a team yourself, also referring people for outsource. Then when you’re ready to do it like in-house, he can help there. And so there’s a lot of good contacts I can share with people who are interested in that. I’m actually do a call with him like this and talk about his process on that quite a bit too soon, cause I think it’s it’s a growing area and it’s not and I’m not saying I’m not saying that this should replace necessarily all the newsletter approaches. It’s, but it’s such an effective model that if you have the right guru and the right approach like this, is an amazing business. Um, that is a lot less production work.
Conor Lynch:
It’s a lot less um copy about less production if you have a franchise with just one of these offers, compared to a franchise with four or five offers. It’s a lot less editorial support. It’s a lot less um, you know, the mail volume, just like the time it takes to queue up and send fulfillment emails across five services versus one. There’s a lot of extra effort there. I mean the cost in manpower and production in terms of production and broadcast alone to support these more traditional style franchises. I know I’ve done it. It is is expensive, uh, and for a lot of smaller pubs.
Conor Lynch:
They see, I think this is a mistake a lot of people make. They look at Agora, for example, and they think, wow, like Agora got so big and even now market-wise it’s still relatively big, not as big as it once was, but very big. And they look at that model and they say, okay, I’m going to emulate that because that’s what the big guys do. But the reality is the guys who are looking at that and trying to copy that are sub-million dollar businesses or sub-$2 million businesses, and the upper limits of scale for this kind of group mentorship, group coaching funnel, where it’s a single offer franchise, be 10 or 20 million dollars a year in sales, with better unit economics, better media economics. Uh, so it’s like okay, uh, maybe you shouldn’t emulate what the what the biggest guys are doing, cause maybe there’s a reason that they’re able to make that work, that that you’re not.
John Newtson:
Right and and and it’s still like you know, there’s a. My view is that the industry is in an ongoing state of transformation that we’re not going to be done with for a few years at best, and product models are changing, marketing models are changing. The other thing about the really large businesses is I’ve yet to well, not yet. I can think of maybe one person I know who’s pushed over a hundred to 200 million. Um, who’s happy to get it. Everybody else hits a hundred and they’re like what a mistake. It is so rough this way. Um, once you get to a certain size size, you’re constantly dealing with lawsuits from this manager down here did something inappropriate to this staff employee and now you have a lawsuit. You’re just dealing with all kinds of garbage.
John Newtson:
That happier business is actually in that $20 to $50 million range from a business owner’s perspective. They’re all pretty happy when they’re hit $10 million, or $10 to 10, to 30 to 40. Like, yeah, there’s problems, there’s always issues, there’s constant problems, but like they’re generally a lot of stress, there’s great money and and it’s a great place to be. And then I would say the other thing about and this is a much bigger conversation that I keep meaning to do with, but, like I don’t know how many people, it’s more interesting than it is useful for most of us and it has to do with looking at the actual, like ecosystem models that have been used to build large companies and that what you have is there’s a marketing acquisition model for a franchise and then there’s a business model for having multiple franchises, and there are two different business model for having multiple franchises and there are two different things that are obviously related. But to get to the large scale groups like MarketWise and Agora, there is a model there that is being used to create multiple franchises, and those franchises are going to range from X to X.
John Newtson:
Sometimes they get really big, like they did in the 2021 period and leading up to it, um, and sometimes they’re smaller and what that is. But that’s, you know, for an individual publisher, it’s like most guys have like, hey, I want a stable business at 20, like that would be great, maybe 30, maybe push up, but, like you know, uh, and with that, like this kind of approach is really interesting, yeah, because there’s a lot of people in a lot of niches who are making this work, you know, and with that, like this kind of approach is really interesting. Yeah, because there’s a lot of people in a lot of niches who are making this work to that to 20 to 50 to even a hundred in some cases, with essentially one or two product lines like this.
Conor Lynch:
Yeah, outside of our outside, I mean even within our space. You know, sykes, I don’t know what their top year on this model would have been, but it I mean, do you have a sense of that ballpark?
John Newtson:
I’m not gonna I, out of respect for zach and tim, I’m not gonna say like what they’ve told me, if you actually have it, it’s, it’s substantial, they’re, they’re, they’re, they’re a substantial business. They have done substantial numbers for a very long time. Yeah, um, and so, even within our space.
Conor Lynch:
There’ve been significant results that way. But if you look outside of our space, you know there’s, there’s, you know real estate investment businesses and career op businesses that you’ve never even heard of that are doing 20, 30, $40 million a year in sales on this model and know frankly, with with worse copy than is is standard for our space. Like, even the shittier copywriters in our space are better than a lot of the writers in other spaces, just because the gauntlet of financial copy having to come up with new promos so often to beat. Uh, you know prior controls because, like all of a AI isn’t as hot as it was six weeks ago, it creates rapid iteration for writers. So, even using not the best writers in our space to create a funnel like this, you got shot at having pretty substantial business.
John Newtson:
Well, that’s the thing is that in a lot of spaces like you talk about the hero’s journey copy there’s copywriters in other industries who never write a different type of promo.
John Newtson:
Yeah, they write the same, that’s all they ever, that’s all they’ve ever written, and it’s the same version of the same promo with a few different changes that they do and that’s just what they do. And so, like, the copy muscles of the of writers in this space are actually pretty phenomenal. Um, because it’s constant ideas, constant approaches, changes and approaches. There’s so many different types of packages and so much that can be applied within a guru model, guru approach, because it’s still a guru thing.
John Newtson:
It’s a question of is this trend idea leading? Is it this, is it that there’s? It’s such a like, you know, I think of like the, the great financial copywriters are kind of like the super athletes of copy. Um, and uh, you’re only competing in the hardest market there is because of that. And so when you switch to like hey, we’re gonna just like make the most perfect guru um funnel possible, like that’s a, that’s a really interesting challenge for a copywriter. Um, because it is. It’s about building the relationship really fast around this guy and highlighting the you know, and that’s much easier than trying to time a trend with your ideas, which is what you’re doing fundamentally with most other copy in the space. So, yeah, it’s, and that’s why I thought this was important to do is that it is such a solid model that it’s worth being explored explored, for there’s a lot of publishers who could add a significant amount of revenue really fast. On a relative basis, that is less of a workload than what they’re, what they’re used to doing
Conor Lynch:
right now, and so I would say, even even if you don’t want to put together this particular model, a useful exercise.
Conor Lynch:
Exercise to say, okay, let’s assume that Porter’s right, and the best version of this business is to have a structure of some kind to find your $25,000 buyer, $20,000 buyer, whatever it is, that very high ticket person, who? Those are the guys who are really paying attention. All right, if our business goal is to find that person, is the model that you’re using right now the only way to find that person? Ok, is it the best way to find that person? And I bet you the answer is no. I bet you that there are a multitude of other pathways to find that very, very high ticket buyer who, from a power law perspective, represents a huge proportion of your overall revenue. And this is one of them, and this is one of the ways to do it that involves the least complexity in terms of number of products in a franchise, in terms of frequency of putting out new promos, and it offers, at first touch, some of the best media economics. So it’s definitely worth taking a crack.
John Newtson:
Well, I think that too, so like your media economics. So let’s just come back to that for a few minutes too, just to kind of wrap this up, because, other than staff costs, media costs are the highest percentage of your spend that you’re going to have in the business your overhead goes to. If you can’t spend on media, your business dies and like that is where, like when things are working, you you ramp up the spend and things like that. So, um, like if you were going to compare, like wealth, press, media spend, when you and you guys caught youtube at the right time, when YouTube was really cheap and productive, it’s gotten more expensive. How would you look at the two models in terms of your economics you mentioned earlier, but let’s dive into a little bit more of it.
Conor Lynch:
So we never made the front-end acquisition model work. The front end acquisition model work. We couldn’t get promos that converted at a high enough level at those price points for it to back out. So we not because we’re marketing geniuses but because we literally couldn’t make front ends work shifted to selling back ends direct to cold traffic and our copy was strong there. But really like the biggest advantage was because of the higher price point and price elasticity in our space. Like there are pockets of people who, for them, spending $2,000 for an alert service is nothing like it like literally doesn’t phase them it. It meant that it was much easier to have these things back out, even if the copy wasn’t like AAA tier and sometimes it was. But we had promos that were not even that great, that still backed out and we were looking for stuff to back out in a 72-hour period positive ROAS in 72 hours and that was more aggressive than I think a lot of different pubs even now, especially on front-end acquisitions. I talked to people who are like 90 days if it backs up by then we’re feeling good about it. For us we were targeting 72 hours and we could make that work with copy that was sometimes very good and sometimes was just more mediocre, but still make it work because of that $2,000 price point work because of that $2,000 price point.
Conor Lynch:
Once you get up to a $5,000 or $6,000 or $7,000 price point, that elasticity effect is still there. So you’re not seeing like. If this was all normally distributed, the drop-off would be so pronounced that there wouldn’t really be an advantage to going up the price curve versus a lower price point product. The conversion rate would decline in proportion with price. But as you know, and as I think most people in space know, that’s not how it works. So the conversion rate decline doesn’t completely offset the increase in price. So the economics again get better to the point where, even with higher media costs today and worse targeting, you can get this to back out in that first pass period. And some people, especially outside of this niche, are running these funnels where cold traffic goes in and 72 hours later they’ve doubled their money.
John Newtson:
And that’s not like that’s like early 2000s internet marketing numbers.
Conor Lynch:
People are seeing this outside of this niche In real estate investment. I know people who are doing this outside of this niche in real estate investment. Like I know, I know people who are doing this outside of this niche where if they start running a funnel like this and if on their initial traffic they aren’t seeing that like a double or better, um cause they know it would decline a bit as they scale, but if they aren’t seeing that off the hop, they consider that a failed funnel. So so I see that I’m like, oh you, sweet summer child, that’s amazing, that’s amazing. But uh, but so you know, the economics is just way, way better.
John Newtson:
Uh, right, and and you know I want to go back to something you said when you started this part is that you said you know you could make front-end work, and that’s true for everybody. Like at the best I’m like I don’t care the best publishers in the space. I’ve had conversations yeah, we haven’t had a front end working in a year and a half at different points. Right, like that’s. The hardest part of the business is making that front end work. And even when you have the money and the staff and the best copywriters in the business, it’s still the hardest part of this business to make that front end work. Now, when it works, it’s phenomenal because you get this huge influx of paying customers and then your back ends all explode and so it’s a fantastic model, but it’s hard as hell.
Conor Lynch:
Yeah, and it comes with other costs. When you’re selling a front end, you really need to maximize the conversion, right. You don’t necessarily need to do that with a $5,. You really need to maximize the conversion rate. You don’t necessarily need to do that with a $5,000 or $6,000 product. So in the copy for the $6,000 product you can have a lot of hedging, qualifying language. That makes, frankly, the copy a lot more compliant and balances expectations with likely results.
Conor Lynch:
A lot of front end copy. The incentive is there, the market incentive is there for you to get as aggressive and up to the line as you possibly can within the regulatory framework. And that is fundamentally dangerous because, as we know, where that regulatory line sits can change at any time and we don’t control that. So that’s a problem. And then, because you’re selling to a large volume of units, the volume of complaints is necessarily going to be higher, just as a function of scale. And we know that those complaints drive all kinds of things, from reputation issues to lawsuit issues, from your own customer base to regulatory issues. So front ends, leaving aside the more challenging economics, have that whole other basket of issues that come with them that you know. No matter, no matter, no matter what you do, like you can’t you can’t eliminate those sorts of risks.
John Newtson:
Right, right, and so that’s that’s. Yeah, I mean the the way this is sold by them not everybody, but I know some people that this is more like buying a car. You have a contract, um have different approaches to how they do the clothes, but you have a higher price customer who tends to be less of a pain in the butt than low price products customers. You tend to have a better customer base because they’re much more qualified.
John Newtson:
They’re much more engaged and much more interested specifically in this person in his approach. Um, and so lower refund rate too right, that’s the that’s. The fascinating thing is that the refund rate is not like these crazy high refund numbers. They’re actually relatively low compared, like what you would expect from a front end in some cases.
Conor Lynch:
I mean well, front ends often have higher refund rates than these products.
John Newtson:
Well, I mean, like I’ve seen guys with like 12 refund rates on this stuff, yeah, and that’s ridiculously low compared to like your average $2,000 back end, $3,000 back end.
Conor Lynch:
Whereas if you’re selling a front end with a money back guarantee, I can virtually assure you, especially in cold traffic, your refund rate is going to be higher than 12%. It doesn’t matter how good the service is. It’s going to be higher than 12%.
John Newtson:
Right. So I think for everybody who hasn’t considered this model, it’s worth talking about, and I’m trying to pull together more resources for everybody. I’m going to do another conversation like this with somebody who helps build these phone teams or talk to some other publishers who are doing this, but I thought this is a great way to talk because I think that you know kind of your, your, your experience building a more traditional fin pub, um, and switching to this, I think, is a sign of the times right now. I think it’s a sign of where things are going um, and also because the economics are so good that if you can make this model work, you can have a much more enjoyable business, both in terms of the total, the top end numbers, and in terms of, like how much work it takes it to run the business.
Conor Lynch:
Yeah, so thanks for doing this. And just as a final note real quick, as a publisher, if you have a one product franchise and you know that you can put all of your creativity on the product side into making this one experience better for the customers, honestly I I just feel better about putting putting out a product that I know is going to be solid and we’ll continue to get more and more solid over time and that that there’s. You can’t put a price or economics on that part of it.
John Newtson:
That’s a that reminds me of a recent post who Brett Holmes made about basically, your products suck. People Like you’ve gotten used to accepting lower quality products over the years and I’m not saying everybody’s product sucks but there are definitely people whose products are lower quality than, or some of their products are lower quality than, others, and there are people in the business who are like the product doesn’t matter. That’s increasingly problematic, I think, in this environment. Totally so awesome. Thanks, man, this has been fantastic.
Conor Lynch:
Yeah, this is good, I love doing these. All right, take care. Bye.
John Newtson:
Cheers.
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