PreneurCast is a business podcast. Each week, author and marketer Pete Williams and digital media producer Dom Goucher discuss entrepreneurship, business, internet marketing and productivity.
Pete and Dom continue the If I Was… series with a discussion around Yoga Teachers and Yoga Studios, and how the 7 Levers of Business can be used as a framework to improve those specific kinds of businesses (or any other kind of business, really).
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Pete and Dom continue the If I Was series and how the 7 Levers can improve your type of business
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If I Was A… Yoga Teacher
Dom Goucher: Hi, everyone, and welcome to another fine episode of PreneurCast with me, Dom Goucher, and him, Pete Williams.
Pete Williams: Howdy, howdy.
Dom: Hey, hey. Sounding wide awake, bright and bushy tailed there, Mr. Williams.
Pete: Absolutely. Daylight savings has kicked in and there’s been some slight changes to the time zones, obviously. But all very good and ready to kick in with another episode of PreneurCast.
Dom: Yeah, I’d like to say something about it being that crazy time of year with the clocks changing this, that and the other. But really, it makes absolutely no difference to me whatsoever. I’ve so many people in so many different countries, it’s always going to be crazy. Let’s just live with it now.
Pete: The joys of living on the coast of Spain and being a global, digital media producer.
Dom: Indeed, indeed.
Pete: The trials and tribulations.
Dom: Do you know what? I was actually interviewed. It was a point of interest recently that I was interviewed. We’ll talk about it when it comes out. But I was interviewed recently for another podcast.
Dom: Because somebody was interested in the fact that I was in fact a digital nomad. Not so much from the media production side of things, but just for being somebody who does what I do, but in a little fishing village on the coast of Spain.
Pete: Very cool. I hadn’t heard about that one. You’re off dancing on other shows and leaving me here by myself, two-timer.
Dom: I was going to tell you, as they say.
Pete: I found out like this.
Dom: Yeah, you see? It’s not just you that gets called in to do interviews. It’s me as well.
Pete: I love it. I’m very excited, very proud.
Dom: Yeah, yeah, I’ll have a little rider under the show notes. Available for weddings and bar mitzvahs, and podcast interviews. So what have you been up to then?
Pete: I was going to say, speaking of pimping ourselves out in a weird kind of way, I’ve just been working a little bit over the last couple of months with the team at 1-800-REPAIRS and 1-800-CLEANING [sic] which is a new start-up here in Australia that’s doing lead generation for people in the repairs and cleaning industry.
They look like they’re going to be doing some really cool stuff there. But as part of their add-on bonus and support for their clients, we actually did a mini 7 Levers course all around how to double the profit of your business if you’re in this repair or cleaning and tradesman-type industry.
That’s been really cool working over there at the start of the year. They’re just about to launch that and get that going full speed ahead. Very excited to be helping those tradies, and cleaners, and repair shops people help grow their business. I’m sure some of them are now coming across and listening to the podcast too.
If you’ve come from that little world, welcome to the show from Dom and I. But yes, that’s been really cool doing that customized training just for that community. So if you are a tradesperson, or a cleaner, or something like, in Australia, definitely go and check out 1-800-REPAIRS and 1-800-CLEANING.
Those guys are doing some very cool stuff, and can be a great source of traffic and also somewhat opt-ins for you, depending how your 7 Levers funnel works. These guys are a great plugin to help drive some prequalified traffic to your business, which is perfect.
Dom: Indeed, indeed. In fact in the general 7 Levers course, we talk about having prequalified traffic if you can get it. Not every industry has these sites available. So yeah, that’s a great business model those guys have got. And yeah, we did enjoy just making a completely specific version of the 7 Levers of Business course just for them.
So that was quite a nice little project to do there. We enjoyed that. So, a shout-out to those guys. And yeah, welcome to anybody who’s just joined us on the podcast if you’re new, for whatever reason. Welcome, and hopefully, you’ll stick with us. On the specifics idea, Pete, I’ve got a little kind of a test for you again.
Every now and then, we do these episodes of ‘If I Was A…’ this, that or the other. We’ve done a few recently. And I’ve got one. I’m going to pull this one. No warning, no planning. I’m going to pull this one. Completely left field you and see how we get on.
Because people do this to us when we talk about 7 Levers. We regularly get people come to us and say, “The 7 Levers doesn’t apply to everything and it doesn’t apply to my business,” or whatever. Usually, between us, we can come up with lots of different ideas in fact for the ways that the 7 Levers apply. And that’s how this ‘If I Was A…’ series popped up. So I’m going to put you to the test.
Dom: What about if I was, and no jokes, a yoga teacher or a yoga instructor?
Pete: The first thing that pops into my mind is you in spandex, which is not good.
Dom: I really did hope you weren’t going to go there. But it was, I do know you too well and it was a false hope. Oh, well. So what do you think? Do you need any more information or do you think you can pop something out?
Pete: Well, I actually almost became a yoga instructor back at university. That’s a bit of a strange, random topic. But when I first started racing triathlons, I used to do yoga once a week to build up the flexibility. I was going so often that I actually enrolled for a yoga teaching course one weekend.
But then a race came up, so I canned the course and went and raced. But that’s a completely random, irrelevant point. It doesn’t really help anybody out there listening. Let’s work through the 7 Levers as we usually do on these ‘If I Was A…’ calls and give, hopefully, people some seeds of ideas of how they should be going about growing their business.
Whether they are a yoga studio or something completely different, the whole idea is to start thinking through yourself, if you were a yoga studio, how would you try and grow these 7 Levers and double the profit of the yoga studio? The whole idea is you swipe and deploy both ways.
You can look at other businesses and work out what you would do there. You can help see those creative thoughts that you can then apply to your business. But hopefully, again, most importantly before we dive down that rabbit hole, is if you do have a business right now, I’m assuming if you are listening to the PreneurCast show you have a business, these 7 Levers are so important.
These are the only seven things that you should really be focusing on when you it comes to generating profit in your business. They’re the seven drivers of profit. So if you’re not habitually going through this, whether it’s one week on one Lever, the next week on the next, and continually rotating through that in a seven-week cycle.
Or you do it at a grander scale. Or you do whatever, a seven-month cycle. If you’ve got an online-based business where you’re selling information products online, then you could be doing this whole 7 Levers thing on a week. It only takes a couple of hours to set up an AdWords campaign to drive traffic or a Facebook campaign.
You could be doing and implementing a different thing on each of these Levers every week. So one day a week. You could very literally be putting some very powerful leverage systems in place to skyrocket the profits of a web-based business because it’s just all systemized and rinse and repeatable.
It’s not having to worry about staff turning up and learning the sales scripts and stuff like that. But let’s get into it. Let’s talk about what we’d do and how we’d grow a yoga studio if that’s what you’re trying to mold these 7 Levers for. So traffic, traffic’s the first one.
Pete: There’s some default stuff that everyone should be testing if they are a “local business”. That, I guess, seems to be the hot word of the minute in this internet marketing space. That if you are a business that has a retail front, so to speak, and you service a local community, you are a local business.
So things like AdWords, with a geographical target, is definitely worth testing. Because you know that most people to your studio are going to live within a 10-mile radius or a five-kilometer radius. You can do the AdWords campaign around that. Definitely Google Local for sure.
They’re the Google Maps stuff to actually show yourself on the map when people do search for “yoga studio Santa Monica” or “yoga studio Fremantle,” whatever it might be. You want to have your studio appear in that geographical region on the map. That’s really, really important to make sure you, again, link that to your website.
Add all the details to really enhance your listing there. They’re two of the very much low-lying, must-do fruit. I also think there’s a lot of associations and accreditations in that yoga space. A lot of directories about health and wellness.
So the type of person who’s going to go to yoga is going to be someone who is interested in this whole wellness space, for want of a better term. So having your studio listed in as many of these online directories as possible, not to online SEO directories.
If people who understand SEO or the history of SEO, when you hear “online directories,” you might go thinking Yahoo! Directories and Best of the Web. That’s not what I’m talking about. I’m talking about actual directories that people visit and look at.
MindBodyGreen for example, is a great website that I do enjoy, US-based though, about health and wellness. They have a directory of services on there. If you’re in that area, you could list your studio on MindBodyGreen’s website to get some traffic and some awareness that way. That’s the kind of stuff that I’d be doing for a very high-level perspective around traffic generation for your yoga studio.
Dom: Cool. Now I’m just going to use a little bit of insider knowledge here. One of the things that not everybody knows about, depending on where they met you or where they’ve come across you from; one of the things you’re really, really, really good at is actually offline promotion and promoting a business through traditional means and offline means.
A lot of the stuff that people will come across, if anybody tries to do anything to promote their business now, they’re being hammered and hammered, and hammered, to go online and do pay for advertising. Go here. Go here. Go here. And yet there’s so much opportunity still with the offline stuff.
Is there any kind of, somebody might say, it might even be obvious. But is there anything really basic, really straight-forward and offline that you might go to do the traffic? I know we’re dwelling on traffic here and I don’t want to dwell on one of all seven.
Pete: Yeah, I think there’s plenty of stuff. Again, some pretty obvious stuff is like a sign right in front of your studio. Like actually say what it is and make an offer of something that will get the opt-in which we can talk about in a moment. But yeah, a sign right in front of your little studio’s important. Also, understanding your target market.
This is something that I was dealing with quite a lot last week with a couple of consulting clients, getting really clear on who the target markets are, who is that person and what do they do. Because in this scenario as a yoga studio, in certain Lululemon and Lorna Jane-type, female demographic-based yoga studio, yoga pants, yoga clothing-type attire, these retail stores that are in the big malls, they often have notice boards.
You could go and put some flyers, or some business cards, or some promotional material on their notice board. So when people do go into Lululemon to buy their yoga pants, they can— and they quite often do, stop and look at these notice boards to see where this is happening.
And if you have a good enough offer and a good spin on your marketing and your leads in, your opt-ins, then you’re going to get people into the studio. I’ve seen letterbox shops work really well. I’ve seen them work exceptionally poorly as well. You can do a letterbox shop within a region.
But the problem with that is it’s more of a scattered kind of approach. You’re not targeting your exact target market. You’re going to be hitting people who are in their 70s and 80s, as well as people that are family and people who are overweight who have no interest in yoga and stuff like that. You want to try and get targeted.
So stuff like scattered letterbox drops don’t work overly well. In the area where we used to live before we moved out to the ‘burbs recently for when Eli was born and to be closer to Fleur’s family; we lived in an inner-city suburb here in Melbourne, in Elwood. There was a laundromat because lot of people don’t have laundries at home in the area we lived.
A very nice, well-to-do area, but just for whatever reason, laundries are kind of still quite popular. And they had a huge notice board there as well. There was quite regularly pins-up, notices for yoga studios and massage. Because the demographic was 20-something, executive couples, that does appeal.
The yoga appeals to that demographics. So reaching people when they’re doing that and they’re washing their yoga pants, for example, and they’re sitting there looking around. It’s a perfect demographic to have that pull-off notice pin board about some offer and things like that as well.
Dom: Cool. Just to bridge us to the next Lever which is opt-ins. Getting people to take that step from just looking at stuff to actually doing something so you can reach them. One of the things I like in what you said there was to understand the market.
Understand your target audience and then find out where they might be going. And your example was a clothing store. And another example, certainly of I think one that is another opportunity is for example, the health food stores themselves.
Dom: You identify these people as being interested in wellbeing, so a health food store is another place that you could look to advertise. But this really does bridge us to the opt-in because what you put on your flyer is crucial, right?
Pete: Yeah. Something I’d also say too is depending on how you want to position your yoga studio, is going for places to get referrals. To give you an example, back in The Athlete’s Foot retail shoe days of my previous life, we aligned ourselves exceptionally well with doctors and orthopedics and podiatrists to get a lot referrals into the store because of the training we do for our staff.
I didn’t own the stores. I was mainly kind of quite high up in the management stuff. But in that scenario, what we do with training is all about pronation and control, and the foot creation, and the shoe creation. So, we were seen very much in our local areas where we had the stores as the educated shoe reseller.
Obviously, if someone goes in to get some orthotics or is just needing some adjustment stuff done, they’d refer them to us to get shoes that would support what they’d just done. So that was really quite important. That was a great referral system.
So in yoga, yoga can be very rewarding, so to speak, from a health perspective. Align yourselves, as you said, with those types of health food stores. Naturopaths, massage studios, I was going to use the word parlors, but I think that has a bit of a different connotation.
Dom: I wouldn’t know what you mean.
Pete: Even doctors, if you find the right doctors. Advertising and promoting in those areas is again a great way to start generating some of that traffic and referral-based traffic as well.
Dom: I like it. I really do. You could segment what you do with a doctor’s surgery. You’re not just looking for people from the exercise point of view, you could look at it from a stress management thing for example. You could position it as an opportunity there.
Pete: Yeah. The next thing that’s blindly obvious to me unfortunately I didn’t say anything is there’s a yoga studio here in Melbourne that aligns itself with our triathlon squad. They sponsor the triathlon squad, which generates exposure and leads for them, which is another great way to align yourself with healthy people who want to live that “better lifestyle.”
Dom: Excellent. I definitely think we’ve dealt with the traffic aspect there. If you can, there’s plenty of ideas there not just if you’re a yoga studio, but if you’re basically any kind of business. There’s a huge bunch of tips there. So I think it’s the latter things where we’re really going to add some value here. Can we get back to this, to what you put on the flyer to get that opt-in, to get people to take that first step?
Pete: Yeah. The beautiful thing is that in the same pitch for trade exchanges that we’ve spoken about quite a lot on the show before, and I recommend every business check out trade exchanges in that episode we spoke about. But what is your additional cost for having another person in the class?
This is a thing that people have to be doing, what is your additional cost of dealing with and taking on another new client for the very first time? And for the vast majority of yoga studios, there is no additional cost. You have spare room for another person, another towel, another body in the back of the study while you’re doing your class that is already happening.
So there’s no direct cost associated with having another body. If you’re doing, for example, let’s say car repair. You’re a mechanic. To fix another car, you do have a direct cost. You have the wages directly somewhat associated with doing that car because that person can’t do or fix another car at the same time.
You have some oil. You do have some direct costs to fix that other car or service that other car. Whereas, with a yoga studio, if you have 20 people already paying for the class, you as the instructor don’t have to do anything extra for that 21st person.
They just sit there and go through the routine in the same scenario like group personal training. The benefit of that is that your cost for a free trial or your cost to offer a free trial is zero. There is no additional cost. So that is the perfect, one of the best ways you can entice that opt-in, is the offer you make on those flyers and in all your marketing material to get that opt-in is for someone to come and try a yoga class.
In retail, this was about getting them to try on a pair of shoes and just experience the shoes in the store. In this scenario, we’re actually going to experience the results. It’s been quite termed as “results in advance.” So you’re giving the person an experience and some level of results before, in advance of them having to spend or commit to anything at all.
And that is a great way. A free trial of food in the supermarket has direct cost against it. Whereas, this doesn’t. So to me, if you can figure out what your cost of a free trial or your cost of a new person experiencing your offering, and the lower it is, the more chance you can use that as your opt-in. And in this scenario, it is an absolute no-brainer to get people to come in and do a free trial.
Dom: I like it. As you say, that is a great opportunity for anybody once they know what that cost of that free trial is to them. But in this particular instance, the actual cost, as you say, is pretty much, unless somebody can tell us different, zero. And so, it’s an ideal situation to go for that as an opt-in.
Pete: And you can do that. You can facilitate this free trial in a number of different ways. You can just have people come to any old class and just be that third wheel, or that 24th wheel, or the next person in the class. That’s an easy way to do the opt-ins. They experience what the classes are like.
Another way that I’ve seen work exceptionally well that has some direct costs against it is intro nights. So rather than having people come to any old class, every week, every two weeks, once a month, depending on how you want to structure it and how you want to market it and promote it, you have an intro night or a free trial night.
So, on the first Monday of every month or every second Monday night from 6:00 to 7:00 is your free trial night. Everyone in that class are first-timers with you. The benefit of that— or actually, before I go to the benefit, the down side of that, that is a direct cost. You have time of yours that has an opportunity of cost against it because you’re not getting any revenue against that time.
It’s not like it’s just an additional body in an existing class. It’s all about newbies which isn’t as cost-effective. However, the benefit is the way you conduct the class. The language you use. The future pacing you talk about is all to entice people to commit and go to the next level, and get that conversion.
This is saying that here’s an opt-in. You get people to come to that free class and use it as a conversion mechanism. A very much stronger conversion mechanism than just being in an existing class because as I said, you can future pace the whole lesson. “Next time you come, next week we’ll extend on this particular session, this particular move. This is the stuff we do here.”
Maybe you do Bikram, you do normal yoga, you do stretching. Maybe you can have that class where you cover the three or four different types of yoga classes that you actually offer throughout the week. So everyone gets a bit of it. It’s just like that sampler. It’s that taste test-type scenario.
Someone doesn’t have to make a commitment saying, “I want to come and try Bikram,” or “I want to do normal yoga,” or “I want to come to the stretching class,” or whatever it might be. That could be a great way to allow people to sample everything and push them into one conversion and commitment-type offering on an ongoing basis.
Dom: Yeah, whether you run a specific class or whether you just include them, maybe that comes down to the amount of traffic, the amount of new people that approach you and whether it’s worthwhile doing it.
Dom: But I do like the point that if you can focus these people into an area, like a specific class for example, then you can focus everything that you do on that next Lever which is conversion. Once they’ve opted in, once they’ve chosen to take a sample class which is the opt-in that we’re after in this particular sequence, then the conversion is to get them to either come to the next class or to get them to pay some kind of membership, maybe a block booking or something.
If you can focus yourself, focus everything that you do on that group of people that you want to convert, that’s great. But you said something there and every time you say, every time you talk about this one topic, I start scribbling notes. Because I’m trying to find the definitive kind of approach for this.
And it’s future pacing because I’m fascinated by this concept, this conversion technique. You talk about it whenever we talk about the 7 Levers and we talk about conversion and other areas as well as the 7 Levers. You talk about future pacing. And you gave some examples, but could you just kind of break that out?
Now we’re, I’m going to say we’re in the conversion Lever now. You’re having a conversation with somebody or you’re at the front of the class. Whether it’s a one to one or you’re in a class situation. You’re talking to people. So could you give an example or talk a little bit about this idea of future pacing what you say?
Pete: Sure. There’s a few different definitions of it. Let me kind of talk about it in the way I see it. To me, it’s a mixture of NLP: neuro-linguistic programming, which is I think where the term first really gained traction. Mixed with what I consider an Influence factor from Cialdini, which is commitment and consistency.
The way I see it and the way we use it in our businesses and our sales staff is it’s an assumptive conversion pattern. What you’re doing is you’re assuming that the outcome is going to happen. Not trying to convince the client or the prospect to make a choice, you’re trying to convince them to be consistent with the conversion.
Most sales people go into a conversation and a conversion discussion around putting all these arguments together about their making a decision now. So it’s all about today. “Here’s what the thing you need to do. At the end of this conversation, you need to make a decision.”
That’s where the person’s thought process is all about, “I’ve got to make a yes or no decision in 10 minutes.” That’s the way the conversation is led. Consciously, you don’t say at the start of the meeting, “Okay, Bob. I’ve got 45 minutes to present to you and I need a yes answer at the end of it.”
That’s not what you do, of course. But that’s the tradition of a sales meeting kind of agenda. Whereas, with future pacing, you’re kind of ignoring the decision making process, making the assumption that of course they’re going to stay around and do what you need them to do. And you’re talking them through that, what it’s going to be like.
So rather than saying, “If you decide to commit to us tonight and at the end of today’s session we’re going to talk about different offers of how we can help you with your yoga or in your weight loss through yoga, ” you’re saying, “Next week when you come, we’re going to be doing this.”
And then in three weeks’ time, this is going to be the result you’re going to get. You make the assumption that it’s going to go and happen. And in the phone system game, it’s not about saying, “This is the phone system. Do you want to buy it or not?” It’s, “So what’s your timing? When do you want it installed? Okay, next Thursday.
If you want it installed next Thursday, we should probably book you in for Tuesday to do a data collection. So our technicians can come out, understand how the system needs to work and be programmed. That way on Friday, it can be done. How does that sound?” You’re assuming it’s going to happen and you’re working backwards from this assumption of what the process will be. How it will actually happen.
It’s a different way to look at and communicate, and frame in the context. It all comes down to the act of framing and context, which was one of the biggest themes for the first 20 or 30 episodes of the podcast. It was all about framing and context. And that is an important thing. That is how you frame something.
If you frame it as if it’s going to happen, it’s an assumptive, you’re just future pacing it like it’s just going to happen in the future; there’s no questions around that. There’s no decision to be made. That changes the context of the conversation and then the outcome as well.
Dom: I really don’t want to massively oversimplify this because I think it’s a really powerful technique. But what I get, the common thread through what you were saying there and also from what I’ve picked up from our conversations, it can be as simple and as subtle as changing the way you talk from saying things, like “if you sign up” to “when you sign up.”
Pete: Absolutely, yeah.
Dom: It can really be that simple. Just talking to people.
Pete: I wouldn’t even say “when you sign up” necessarily. I would be more, “this is what’s going to happen.” I’m very particular around this, but “signing up” as a word is still a decision. It’s still an action that needs to be decided upon.
Whereas, “we’re going to come out next Thursday afternoon and get started,” or, “I’ll see you next Friday for the class,” there’s no decision to be made. It’s just that’s what’s going to happen.
Dom: So it’s even stepping over that when and into, as you say, the assumption that they’ve already decided that they’re going to do it. And even talking as if they’ve already done it.
Pete: Yeah, absolutely.
Dom: All right. Cool. So our next lever after conversions.
Pete: Is items per sale. This is an interesting one because with a yoga studio, what you’re selling is access to a class, generally. And a lot of people, what other items can you sell someone when you’re offering them a service? I know plenty of yoga studios and massage services where they have a little retail area where you can sell BPA-free drink bottles.
You can sell yoga mats and clearly. Exercise bands, even to the point where you can start doing some bonus products. Get some particular vitamins or some holistic green vital greens or an athletic greens-type product. And you can buy a few and have them available to complement the core business.
And I think that’s something that can work really well for a yoga studio. People come in and they get their mental stimulation or mental cleansing through the yoga and the stretching. And they walk out as well every week with something off the shelf like a Vital Greens or some supplement-type thing that can help them nourish their cells as well. And I think that’s an easy items per sale-type of step, to get people to buy that complementary things.
Maybe you can create your own info products. You can easily create a meditation CD. Find some royalty-free music tracks that work really well with meditation. And then just voice your coaching over it. One of the things we used to do at the end of every yoga session was like a 10-minute meditation at the end of it.
So we were doing 50 minutes or so of yoga poses and the downward dog, and various things. Then we do a 10-minute meditation session where she would guide the session, put the music on and then guide us through the thought process and maybe the sayings we’d go through.
They could easily prerecord it and have a series of audio CDs on meditation that you can sell. Have people say, “Monday’s your yoga class, but don’t forget to meditate on Thursday. Here’s a CD for $10.” And get that additional people buying those type of items to support them at home beyond their in-house, in-class yoga.
Dom: Love it, love it. You completely left-fielded me with that one. I thought you were going to stick to the really ordinary stuff because you mentioned Lululemon earlier. And they’re a really big kind of yoga sports, outfit retail chain. It’s pretty popular in the US. I thought you were going to stick to that.
So no, that, the audio CD and how simple really. Guided meditation, yes, it’s a skill. It’s important. You need to know what you’re doing and saying. But the implementation of it, as you say, royalty-free music for the background and your voice over the top. Bank. Done. Absolutely brilliant.
Pete: They could call you up on Skype and give you a meditation lesson over Skype. Record it and there’s a CD done.
Pete: There you go, Dom. There’s a new business model for you, meditation CD creation.
Dom: There you go folks. Just drop me a line through PreneurMedia.tv. I’ll help you build your meditation CD to sell to members of your yoga studio. No problem. But yeah, because of the nature of the activity. I did a little bit of looking around yoga. My partner’s into yoga. And it always seems there’s always another thing to have. It’s supposed to be this simple thing.
You have your mat and that’s it. But no, apparently you have to have something to go on top of your mat. And then you need special gloves for the mat and special socks for the mat. And blocks and straps and bag for your mat. Don’t forget bag for your mat. It’s very important to have a bag for your mat. And then—
Pete: Did you get your extra large drink bottle?
Dom: Of course, and so on. So yeah, there’s all these opportunities to get these things in that even just sticking to the real core exercise process, even without adding all these extra kind of specialist items. The pure basics if you’ve got a beginner and you have a particular mat that you recommend, if you can get a deal on getting that mat.
If you can get a deal on supplying that mat to them, just put a small profit on selling that mat, then they walk in with nothing, they walk out with a mat. You increase your items per sale.
Pete: My suggestion, I’ll be going to places like Alibaba.com which is a great online resource for accessing products wholesale from the manufacturers across Asia. I’ve done this in various small projects. You can source mats directly from manufacturing and buy 10 or 20 much, much cheaper than you can even from a local distributor.
Then you retail that as an option as well. If you’re anyone doing this retail stuff, check out Alibaba.com. It’s a great resource to get products and services you can complement and supplement to increase this items per sale Lever.
Dom: Brilliant. One word of warning, anyone going on Alibaba.com, and that is make sure you set a time limit and then stop because it’s worse than anybody. It really is. You can get lost down that rabbit hole for weeks.
Pete: If you’re an entrepreneur and you like to come up with new business ideas and product ideas, yeah, be very, very careful because it’s very easy to get excited by an idea of importing athletic sporting tape and selling it on Bartercard to sporting clubs.
Dom: That sounds like the voice of experience. Okay let’s jump onto the next Lever.
Pete: Absolutely. Average item value, now this is again, an easy one. Just up your prices by 10%. This is the really cool thing with yoga and this particular example. Quite often, the demographic of someone who has yoga is generally, and I’m generalizing here, folks, so no e-mails; but generally, is that executive single or executive couple-type scenario with good disposable income.
So being a premium yoga studio is a good thing. It’s very kind of counterintuitive because yoga’s meant to be a bit free spirit, do-it-on-the beach scenario. But you can easily have premium yoga studios where you supply the mats, hypothetically. So the stuff you sell as complementary items is not yoga mats.
You have that there, but your extra in terms of qualifications. You’ve gone to that extra yoga school in the middle of Africa or some weird area that you’re qualified now. Then if you are that extra special yoga teacher, you can charge more. It’s like anything in business, any type of industry.
If you are the expert, the perceived expert, if you write articles for places like MindBodyGreen and these different magazines, outlets and publications, you are seen as an expert. That way you can charge a price that is a customs associated justified by that positioning.
And it’s really important to get your positioning right because that not only can help your lead generation if you are doing marketing well; it also helps your positioning to which justifies this increase in pricing.
Dom: Absolutely. And every time we talk about this Lever, the one thing we talk about is positioning, about building your authority in a space. There’s lots of really general tips for doing that. You covered most of the biggies which are things like writing for the publications, making sure people are aware of your certifications, your experience, any specialist knowledge or courses that you’ve been on. You could even do it by association. You could invite people in more well-known or more qualified to the yoga studio to give specialist courses.
Pete: Brilliant idea.
Dom: I learned from the master. But yeah, there’s lots of opportunity. And again, it is all within the ethos of the yoga, the mindset of the yoga thing. But I like the point that you made that in our local area, the demographic of the yoga school isn’t exactly young affluent couples. It’s more slightly affluent retirees.
Pete: As well, absolutely.
Dom: We’ve got a lot of expats. But it’s still that idea. There is a certain level of affluence involved in it in certain areas. So there’s necessarily no stigma against making yourself a little bit higher rate, if it were. If it suits. But it has to be, if it suits obviously. But mixed in with all the other Levers, maybe it doesn’t matter so much. We are only after 10% on each Lever.
And some can make up for others if you don’t feel that you really can put that price up. Usually, there’s scope to go up a little bit in all of them. And some of them there’s lots of scope and lots of range. So you win some, you lose some. But it’s only 10%, which isn’t really that much on the average yoga lesson charge really, is it?
Pete: No, not really. And if you funnel it right, it’s a dollar here or there.
Dom: Yeah, exactly. But it makes a huge difference with the cumulative effect of the 7 Levers as we always talk about. Just that one 10% down the stack can end up with a double of the products.
Pete: Yeah, absolutely.
Dom: So we move on to the next Lever.
Pete: Yeah, so the sixth Lever is all about transactions per period. How many times do you get that person to come back to your class? Obviously, you don’t want them coming once. You want them coming every single week. Now, a very obvious one is memberships.
You get people to go on some type of continuity program. You say, “It’s $20 a lesson.” Or, “If you want to sign up for our membership, it’s only $17 a lesson and we bill your credit card for X amount every single month. You pay $60 a month and you get to come to four classes. So you get one for free.” Or some variation of that math that works for you and your studio.
But that gets people on that commitment and consistency, on that continuity revenue. They are getting charged automatically every single month just like a gym membership. You’re applying that gym membership philosophy to your yoga studio. And there’s absolutely no reason why that does not work in so many studios around the world.
Dom: And that’s back to that point you made earlier about the cost to you per client. It’s a great opportunity to offer that one class free if the cost to you of having one extra person in the class is bordering on zero.
Pete: Yeah. All the other things we’ve spoken about before in 7 Levers-related episodes here on the podcast, is things like a 10-session card. Somebody doesn’t want to commit to continuity where they’re forced to get charged every month on their credit card, they can buy 12 classes for the price of 10.
You get people to prepay for 10 classes or 12 classes, and however you want to do those numbers. That way, you have presold this consistency and increased those transactions or sessions per client by prepaying it. And you often find that, this is the funny thing, the majority of people who buy that gift vouchers, won’t use it and redeem the whole thing.
But if you find that the average person only ever comes to seven lessons, well trying to charge them for buy nine, get 12. You actually now have two additional sessions of revenue from that client that you wouldn’t have otherwise gotten on average. So that kind of stuff is really important to look at in doing these numbers.
Dom: Just to recycle an idea, because we like to reuse and not overdo the effort. My point earlier about inviting a special instructor, even if you have somebody who is fully paid-up for the year, paid for every possible lesson; if you invite a special guest, you’ve got an extra session you can sell one more ticket to.
Pete: Yeah, it’s a premium-type scenario.
Dom: So above and beyond the memberships you’re already taking in, if you run special events, you’ve got another opportunity to just up the number of times that person transacts with you, again only by 10%.
Pete: An interesting thing that I’ve seen done exceptionally well indirectly is that some good family friends of Fleur and I, Sarah who Fleur’s best friend who used to live with us, she and her mom go to Bali I think twice a year for a yoga weekend or a yoga retreat. Sarah doesn’t go to yoga at all throughout the year, she goes twice a year to this retreat.
Now obviously, that’s done in Bali. She flies into this place that does it and that’s all good and well for her. But think about if you’re out running a yoga studio and you’ve got yoga devotees coming all the time, why can’t you coordinate, go to a local travel agent and say, “I want to coordinate this trip to this yoga retreat, and sell it and promote it to our members of the yoga studio.
We do like a group trip like twice a year. I want you to organize it, Mr. Travel Agent. You get your commission, but I want to get some commission out of this myself. I want a premium.” You could absolutely do that. There’s plenty of travel agents these days, particularly with the issues of online.
They would jump over you hand and fist to be able to coordinate that trip. You don’t have any logistic management in this. You say to the travel agent, “I want to promote this to my community. I’ll do the promotions through our newsletter and flyers and handouts and e-mails.” They’ll come to you to organize the trip.
You coordinate all the logistics of it. And then at the end of the day, if you get 28 people, you get $200 per head. So add $200 to the cost to these people. These people now are going to a yoga retreat overseas. It’s an additional experience building on what you just spoke about then, Dom. But you didn’t have to do any coordination of it.
Dom: Brilliant. And they still see you as, you get the added—
Dom: Yeah, kudos from that. Because you organized it. Even though the travel agent organized it, people will perceive you as the organizer, the initiator, the person who had the idea, the person who facilitated it. And that will give you some amazing buy-in from your community. Plus, you’re genuinely adding value.
If it’s another experience, if it’s a wider experience for the group, you’re genuinely adding value. And you’re just getting that little bit extra revenue. That’s a great idea Pete. I like that.
Steve: And this is the sort of stuff I love working with businesses on, is putting this stuff in place. It’s exciting to come up with an idea and go, “let’s facilitate and frame this up.” The easy way to frame that is, “we’re going to do this retreat. And to make it easy for you, members of my yoga studio, to save you from having to do the logistics myself, I’ve found a local travel agent who’s going to take all the headache and logistics away from you so you can have your mind clear, ready for the trip.”
You position it like the travel agent’s doing them a favor. It’s just a beautiful little great marketing story you can have there. It’s a great way to really build that bond with your clients to get that commitment and consistency, but also, it’s that additional revenue source from that client in that calendar year. And that stuff is amazing.
Dom: Fantastic. Well, we’ve done quite a lot on this topic. I really thought I was going to stretch you on this and you’ve just coasted it. So let’s wrap this show with the seventh Lever.
Pete: The margins, yes.
Dom: I’m getting there.
Pete: This is the interesting thing. Margins, in this sort of business, they are tougher. I’m going to be completely transparent. They are tougher to get. There’s not a lot of input cost to facilitate a yoga class. It’s not like manufacturing a product or retailing a product where you have costs and you’re adding a mark-up to it. With a general studio, all you’ve got is rent. You’ve got wages.
You may have a heating bill if you’re doing Bikram yoga. So there’s not a lot of costs against it. Things like going to Alibaba as we spoke about and buying these additional items, these additional on-sale items, having your little retail store, so to speak, from Alibaba rather than an Australian supplier, or a local supplier, or a branded supplier, is going to help your margins.
Increasing your price helps your margins. So margins in some instances and industries are a little bit harder to pull. But again, rather than having to do that Lever by that 10%, maybe you can do some creative stuff with your rent and your leases and your costs with Alibaba. And maybe you’ve got to get an extra 5% on your margins.
Then, you shuffle that extra bit around on the other Levers and you pull the other six Levers by 11% instead of 10%, give or take the math. And that’s the beautiful thing. It doesn’t have to be 10% on every lever. It just has to be that ideally 10% across it. You can just juggle some up and down to get that math working for you so you at least double the profit of your business in your little yoga studio very, very quickly.
Dom: Sure. I mean your margins, it’s not just about flat-out how much kind of profit there is in every person. As you say, you’ve got your fixed costs to keep an eye on. You’ve also got the effectiveness of your time or your staff’s time if you have people. How many people are you teaching in a class, for example, versus how much you’re paying.
Pete: There you go.
Dom: As I learn from the master. I learn from the master. See, I told you I take notes. But yeah, there are opportunities to improve the effectiveness of your business. That’s the bigger message here in the margins Lever. It’s not just a flat-out profit on the object you sell, the service or the goods or whatever you sell.
It’s the whole effectiveness of your business. Especially as it’s yoga and it’s a lifestyle thing, maybe it’s not all about their money. Maybe it’s about how effectively you’re using your time so that you can still make the same amount of money but work less.
Pete: Absolutely. Absolutely.
Dom: There you go. And on that deep and thought-provoking idea, I think we should wrap up for this week.
Pete: Sounds good. That was a great session. A great idea. I love doing this on the fly thinking and planning around the 7 Levers and then the implementation comes after the fact. It’s a lot of fun working with clients to do that stuff.
Dom: I know you do. And you have yet again impressed me, sir, because I really did pull that one out of the bag on you live as we do on this show. And you came up with some great ideas. We did it together. But yeah, the 7 Levers is a great thing and it’s a great theory. And it’s a great idea that we talk about. And we talk about it regularly.
But the reality of it, I think, is the most rewarding thing for us is to see people see these ideas and implement them and to maybe even work with them as we’ve done with them in our masterminds; to see these improvements happen and get the feedback from our coaching client, the mastermind groups and things like that. It’s just great to see it made real and to see people improve their businesses through these ideas.
Pete: Absolutely. A lot of the feedback, the iTunes feedback and the e-mails that come through, the comments on various things that we do and e-mails through PreneurMarketing.com. It’s great to hear about people who do take action on this stuff, so please keep that feedback coming because it’s really, really fun.
Dom: Yeah. I’ll shorten that rapport to: folks, if you want to get in touch with us, PreneurMedia.tv is the place where all our podcasts live. You can download them, listen to them, read the transcripts, leave us a comment, get all the show notes, and everything on that site. Or, if you have enjoyed what we’ve talked about, please leave us an iTunes rating and a comment. We’d love to get those as well. And with that, I’ll see you all soon.
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