Dov Gordon | Cultivating Profitable Relationships

When it comes to coaches and consultants, it’s the “gurus” that get all the attention… at least on the surface. But, says Dov Gordon, you don’t have to be a guru to build a successful business. In fact, he says that most people don’t have the right personality to be an effective figurehead like that.

Another thing: trying to land prospects through social media, paid ads, or the like doesn’t really work in the long term.

So, if you’re not going to be a guru, and you’re throwing out typical digital marketing tactics… what do you do to bring in new clients?

Dov walks us through a more effective model based on building profitable relationships. 

Tune in to find out…

  • What technology can and can’t do to get you quality leads
  • How to form an “Alchemy Network” – and who should be in it to create a steady stream of clients
  • Why too many leads is a bad thing
  • Turning complexity into simplicity in your business – it’s easier and harder than you think
  • And more

Listen now…

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Transcript

Steve Gordon: Welcome to the Unstoppable CEO Podcast. I’m your host, Steve Gordon, and I’ve got a fantastic interview for you today. Today I’m talking with my good friend and colleague Dov Gordon. We’re connecting all the way across the world. He’s in Israel. I’m in Florida. I’m really excited to have Dov back today. This is his second or maybe even third appearance on the podcast. He and I have known each other for a long time. He’s one of the few people around the world that when he says something, I listen because he says important things. So if you don’t know Dov, he really helps consultants and experts go and get their ideal clients and do that consistently. There are millions and millions of consultants and coaches who are very, very good at what they do. But, you know, they’re just not that charismatic guru type and they’d really don’t want to be. Maybe they love their work and they just want that consistent flow of great clients. Clients who value their expertise, who value who they are as people, who pay them well for it. And Dov and his team really focus on working with those experts and helping them build a really strong strategic foundation and apply it to build a simple client getting system that is really kind of tailored to you. So I’m excited, Dov, to have you back. Welcome back to The Unstoppable CEO.

Dov Gordon: Thank you, Steve. Great to be back.

Steve: So I always enjoy when we get a chance to have these chats. Sometimes we don’t record them, we just, you know, chat and talk about things that are happening in our businesses. And you’ve been doing some really interesting things lately, and I thought it was worth coming back and talking about some of those things. And so your focus lately has been on something you’re calling Profitable Relationships. And I love the title. I’m jealous that you got the domain name and

Dov: Profitablerelationships.com

Steve: exactly

Dov: It wasn’t that expensive either but it was premium. It wasn’t an eight, you know, 12 to $15 domain at that point.

Steve: I’m sure not, I’m sure not. Well, give us just kind of a, to start things off, because I want to dive into this whole concept. But to start us off, can you give us kind of a high-level view of what you mean by profitable relationships and kind of give us the framework to begin thinking about it?

An Overview of Profitable Relationships

Dov: Very simple. You know, it’s really just crystallizing, concretizing something the I’ve been doing a little bit less formally for quite a number of years now. And that’s really coming to the recognition that most consultants, people who are marketing or selling their expertise, a new client is worth let’s say, $5,000, $15,000, $50,000, $150,000, or even more. For these people, most of their business is not coming through an online Facebook ad to an evergreen funnel. It’s just not

Steve: What? Wait. Why?

Dov: But most of their business is not coming from a best-selling book. And most of their business is not coming from, you know, Instagram accounts. There are people who do these things and do them really well. But they are really a minority. That type of, you know, I think of it as there are two ways to thrive as an independent consultant coach or expert. There’s, you know, growing as taking the path of the charismatic guru, as I call it, and then there’s the path of mastery. And most of us, our personality is just not suitable for the path of the charismatic guru. You know, it’s fine for those who have that personality. It’s fine for those who they’re, you know, they have that energy. They have that, and I don’t mean like it’s a better energy, it’s different. They have those values. They’re looking to put themselves on a pedestal. They’re looking to be in front of lots of people, put themselves up as a model. Most of us are not, I’d say probably 90% of people have a lot of value to offer. That’s not who they are. And the problem is they wake up in the morning and look around and they want to know, well, how do I get clients? I’m good at what I do. I thought that, you know, I built this great mousetrap, people beat a path to my door. And they start to discover that’s not happening. It does not happen. If it does, then you’re probably lucky for a period of time and your luck will run out. Much better that, you know, you work based on skill and systems. So you wake up and you don’t know how do I get clients.

And there’s an endless line of people who want to tell you how to get clients but it’s mostly tactical focused. You know, Facebook ads, LinkedIn, you know, it’s endless. I’m not gonna even try to list all the various different options available to us today, thanks to technology. So, but the truth is that most people, and I’ve polled my subscribers, so about 70% said that they’re, you know, their best clients have come through relationships. That’s referrals or somebody heard them speak somewhere and they started, you know, went out to lunch, started a relationship. And most of these like, they don’t happen immediately.

There’s a, you’ve got, there’s a, relationship takes some time. It is possible to talk to somebody once and close the multi 10s of thousands of dollars. I’ve done it. Its’ definitely possible. It’s doable. However, it’s more likely that there’s some kind of relationship. Well, not to say more likely, but often, if you’re selling a, you know, a high-five low-six figure consulting project there’s a relationship that you need to build over time. The problem of course, is that building relationships takes time, so people look for, they look to technology to kind of automate around it. And that doesn’t work. Obviously, you know, technology can be used to augment, to support the building of genuine relationships. But it cannot be used to replace it. And I think people need to really, you know, recognize that that’s a very simple truth. However, there are things that you can do to leverage relationships. And that’s really what I’ve been helping consultants start to do. And it’s what I think of as becoming an under the radar leader in your industry, because while the charismatic guru types, they put themselves out there really in front of everybody. And, you know, and that’s how they’re attracting a lot of attention.

They get most of the attention, most of us, our goal is not to be doing, you know, multi seven-figure and scaling business. That’s not most people’s goals, not necessarily my goal. I don’t know if it’s your goal or not, but it’s, you know, most people, they’re looking for good mid-six-figure income, doing great work with great clients, and having a life, you know, having freedom, having the ability to do what they want to do. That’s what most people go after. And this approach of becoming an under the radar leader in your industry, is it really suitable for most people? Because if you knew 30, 50, 100 150 people who are well-placed in your industry and you’re able to kind of really be connected with them in a meaningful way over a period of time, you’d have all the business that you want. That’s true for probably 80-plus percent of really good consultants, okay? And that not only that, but that enables you to compete with the so-called big names, because you have a backdoor.

And the way you do that is by creating what I call an alchemy network. So I might have thrown out too many terms by now but let’s kind of keep it simple, right? Summary, you become an under the radar leader in your industry by starting and leading an alchemy network, which is either comprised of colleagues or comprised of your ideal clients. And if you have a network that you lead that’s comprised of your ideal clients, and let’s say it’s 50 people, 80 people, 100 people, 150 people and they’re in your network. And it’s not just about you, it’s not a point to point. It’s that you are curating this group, bringing people together. Most of this can be done online, and I’ve done it online for years, right? And you’re bringing them together, they get to know each other. They get to learn from each other. And every time they recognize, oh, we met through Dov Gordon, we met through Steve Gordon, we met through whoever you are listening to this who is leading your alchemy network.

And it also makes it really easy for you to stay in touch with the highlighted prospect who wasn’t ready to buy now. And that happens. You know, you’re talking to somebody about a, you know, I’ve got a client who does, they just closed $175,000 project over 90 days. and that type of thing is going to take some time usually, because even if the buyer is immediately ready, but there are other, you know, other considerations that may mean that the organization is not going to have to do it this quarter, maybe next quarter. So they may say get back to me in six months. And you’re ambitious, you’re ahead of things, so you get back to you in five months, and you find out Oh, too bad, we went with so and so last month. You know, these things happen. You can even have a good relationship, but how do you overcome that? Well, I mean, you could be sending them these tacky articles that they may or may not be interested in. You can put them on an email list, which is a great thing to do. I fully advocate for that. Been doing that for years as of you, however, that’s only, the email list is unidirectional. It’s not bi-directional. It doesn’t go back and forth. It doesn’t give you necessarily an insight into what’s actually going on in their lives.

But if you bring these people into an alchemy network, you invite them into an argument organ, and they’re actually excited about what you’re doing. It’s an easy Yes, that they could really say yes to from now, which they see is moving them forward in the right direction and you always have a good reason to get on a quick call with them. And they see it that way. They see that you’re there to serve their interests. And even when you’re not, you know, if you didn’t talk to somebody else maybe in the, you know, last few weeks, but you have your finger on the pulse of what’s going on with most of the people in your group. And those relationships approached strategically, thoughtfully and really, with an interest in looking to serve these people, will absolutely lead to a consistent flow of ideal clients and projects for you in a way that, you know, I don’t know that there’s really any other way to doing this.

Steve: You know, there’s a, there’s so much to unpack in what you shared. Folks, I recommend you go back and kind of relisten to that because you basically, you encapsulated, I think, almost a complete strategy just in that five minutes. So going back to one of the first things that you said, you mentioned the word mastery. And, you know, you talked about the idea that people are, sometimes they’re going off and trying to do Instagram or doing, you know, Facebook or they want to build this funnel and they want scale and all this sort of stuff. And I’ve seen this interesting interplay between the way people think about scale and how that kind of drives them in dangerous directions in attracting clients.

And what I mean by that is people think, Well, yeah, I’ve got this consulting business and I want to scale it to be, you know, as big as it could possibly be. And they never put a bound on that. But I think for these sorts of businesses, there’s a natural bound. I mean, there’s only so much time. Do you find that with the clients you’re working with? I mean, that they have this notion that they want to be as big as they can be? Did they have trouble kind of quantifying it? Because I think that’s the first step to really getting serious about what strategy to use, knowing what you’re trying to build.

What Mastery Truly is and How to Attain it

Dov: I’ll be really honest, first of all, I agree with everything you said. But if you’re asking about the clients I work with, most of my clients, they’ve come to recognize, usually not immediately, but they’ve come to recognize that they’re not looking to build a, you know, multi-seven-figure scaling consulting business. It’s like I described earlier, they just want, they want to be doing great work with great clients who really appreciate them and can afford to pay them what they want to be paid and making that great income, you know? So now, I will say some people do have to go along that path beforehand and I’ve spent some time not fully understanding what we’re talking about right now. I think that tendency, we all look to those charismatic guru ones because they’re the ones who are most visible, right? The rest are under the radar.

You know, that’s where I got the term from. And the ones who are most visible, they’re often demonstrating something again, that, yeah, it could work for sure but it’s not what we actually want. So they’re out there saying, this is how you grow and scale. Too many of us are trying to follow their lead. The problem is, is like we’re trying to walk the path of the cosmetic guru with a bungee cord strapped to our back and that bungee cord is that it’s not what I really want, but we’re not fully aware of that.

Steve: Yeah, and I think that’s the key. You have to know what you’re trying to build. And I run into the same kind of dichotomy when I, often when I first talk to a business owner, they will describe this desire for this, you know, massively scaled business. And then as you start to ask them, Well, what does that really mean? What does it look like? Often what, then, you know, if you ask, Well, how many clients would you need this year for it to be an amazing year for you? The answer comes back and it’s not this massive scale, right? It’s, oh, gosh, I got five clients. I’d be you know, I’d double my, you know, performance last year. Well, that’s a different problem to solve and that’s not a scale problem. That’s why I look at the approach that you’re taking with this and, you know, similar to the approach we take with podcasts, I think, I feel like the two are very much cousins, different implementations of some of the same ideas. And

Dov: Very complementary.

Steve: Yeah. In both cases, they’re really tuned for getting that small number of very high-value clients that most professionals, most consultants, most coaches are really looking for. So that leads me sort of to the next thing that you said, which I think is important. You use the word mastery. And I see people all the time jumping from this kind of guru-led, you know, tactic of the day, you know? And I mean, just thinking back, in the time that we’ve known each other, if we thought back and cataloged what all of those were, the evolution of all of those things, right? It’s been 100 things probably over the last decade. And

Dov: Remember when blogging was the thing? People were teaching blogging.

Steve: Yeah, yeah. Well, now, podcasting is the new blogging, I heard.

Dov: How to build a business blogging.

Steve: That’s what I’ve been told.

Dov: It could be.

Steve: But I come back to something that you said then, when we first met, and probably one of the most impactful things I’ve really learned from our relationship, and that’s this word mastery. And I have come to believe that that is for people who are struggling to get clients, that’s the difference between who’s successful and who’s not. The ones who stick with whatever tactic they choose long enough to master it are the ones that you look around and you go, Wow, they’re really successful. And I would love for you to talk a little bit about that word and how you use that as you’re working with people.

Dov: Yeah, well, mastery is an important concept. I think, the way I think about is this, is that, I mean, there’s quite a number of different angles we can take on this so I’ll just start with one and let’s see where it goes. I heard a wonderful quote a number of years ago from somebody who was actually doing a, making his darndest effort to put himself out as a charismatic guru-type but didn’t quite come across as sincere to me. Anyway, I did gain one thing from following him for a few weeks or a few months and that was this amazing quote, and it’s a quote from, well, I’ll say the quotes and you’ll know where it’s from. So he says I wouldn’t give a fig for simplicity on this side of complexity but I give my right hand for simplicity on the far side of complexity. It was a judge of justice from about 100 years ago, I think.

Steve: It was Oliver Wendell Holmes, I believe.

Dov: Exactly, yes. Oliver Wendell Holmes, Jr. I believe it was. So I wouldn’t give a fig for simplicity on this sort of complexity but I’d give my right hand for simplicity on the far side of complexity. I thought about that and I realized that, that makes a lot of sense. You know, there’s simplicity on this side of complexity. That’s, when we think, Hey, I’m gonna start this business. I’m good at what I do. I’m gonna start this business and it’s gonna go really well. We just assume it’s not going to be that complicated. You know, I’m good at what I do, I lead in a corporate world, I’ve got these great skills, I did really well in the corporate world, people are gonna work and work with me. It’s gonna go well. And then we rapidly find ourselves in complexity. Bogged down in technology, frustrated that people won’t take our calls, return our calls, respond to our messaging, whatever. The things we’re doing are not working. Sales conversations are feeling like we’re just kind of shooting from the hip. Not leading anywhere.

Proposals are not, people going with other competitors who we are sure not as good and don’t care as much. And then, you know, not to mention admin and various operational things that you never thought you’d have to deal with, but you do. Taxes and whatnot. Technological breakdowns of this or that type. You know, and you find yourself bogged down in complexity. And, you know, when it comes to marketing and sales, you look for some advice and you end up running a number of different circles, overwhelmed by all different options and not sure what makes any sense for you. Trying this trying to. Okay, we all know. That’s complexity. On the far side of complexity is true simplicity. True simplicity lies in the far side of complexity. Those people who push through the complexity to eventually arrive at simplicity on the far side of complexity, that’s mastery. That’s where you have a consistent flow of ideal clients.

That’s where you’re seeing patterns where everybody else is seeing them less. That’s where you’re able to leverage everything that you’re doing. You can kind of push a lever and watch things roll. But everybody wants to skip to that. People think that there’s some way of getting to that far side of simplicity and the far side of complexity without the pain, without the learning. You know, I don’t remember what the, there’s something, some quote from Steve Jobs. But if you just think about the idea of the iPhone, right? When it was brand new and so on, in order for us to have that experience of simplicity, right? Of the screens or whatever, you know, I have a Samsung, right? It’s simple to use, but the complexity behind it is enormous.

What they have done is they have managed to take some rather complex ideas, rather complex forces that I don’t begin to understand, and they’ve marched forward to simplicity on the far side of complexity. It was not easy, it never is easy. They’re constantly competing with others, right? And it never ends. It doesn’t, you know, there are certain things that get easier. There’s certain things that these companies can do that you and I cannot because they’ve mastered it. They brought, you know, whatever, all the millions of processes involved in that, from science to human resources and so on. So to me, mastery is something that a lot of consultants have mastered their craft, they’ve gotten really good at whatever they do. If you’re a logistics consultant, you got really good at logistics.

If you’re, you know, involved in business brokering or whatever it might be, you know, or you’re a, you know, an HR leadership consultant, you’ve gotten really good. You mastered your craft. But when it comes to figuring out okay, how do I get more clients because it turns out to not be as easy as I expected. Over here, we don’t approach it with the same kind of rigor and discipline. Over here for some reason, we’ve been buying into the idea that it should be easy. And it’s going to be easy. Just follow my, you know, five-step marketing blueprint formula and you too will have all the clients that you can possibly handle, you know? This fancy car, that fancy home and the other one too. And these vacations and, you know? But it doesn’t work that way.

And what I point out to people a lot is I say, you know, hearing what you’re saying, would it be true? Would it be an accurate observation, to say that you have not gone about the getting of clients the way you went about the mastering of your craft, gaining the skills that make you valuable? You approached one way, but you’re approaching the marketing and sales of those skills in a very different way. And they think about it and they realize what I’m talking about and they almost always say, Yeah, you’re right. Because when they went out about mastering their craft, just think about it. Think about a heart surgeon, right? There’s no, nobody starts, you know, becomes a heart surgeon thinking that it’s just gonna be a matter of following a blueprint. It’s a very nuanced set of skills. You’ve got to have a lot of knowledge, a lot of information, and you got to understand the information. Understand is not just intellectually understand it.

And that’s why over the years there’s a combination of knowledge, information, with the application. You know, working with mentors, and, you know, other surgeons for, you know, first, you know, you could maybe watch videos, then they might let you in the operating room, right? And so on and so forth until you’re doing the surgery yourself because it’s only by doing it, you really come to understand. And what I want these consultants to understand is that you need to approach the getting of clients with the same rigor and discipline and structure that you’ve approached mastering your craft to begin with. And when you do that, you will pretty quickly get to a point where you’re starting to see results because unlike heart surgery, if you fail, it doesn’t really matter. You know, failure is part of learning.

There’s no, no one’s gonna die if you fail. So you have to fail. You have to go out and have sales conversations that don’t close. And that’s not even really failure. That’s learning. So, I mean, these are just my thoughts on, you know, mastery, how it applies to getting clients for consultants.

Steve: But I think it’s important. So, both of these ideas, number one, is that understanding the scale you’re really trying to build, and two then, you know, approach it from the point of mastery. Kind of lead into I think, you know, what I really want to dive into which is this, the idea that you talked about when it comes to profitable relationships and building an alchemy network and all of that. And I want to get into the details of that, but I think it’s helpful to have that frame in place that, because otherwise, you’re gonna have a really hard time, I think, with any strategy. You’re always going to feel this pull.

Like, I noticed this sometimes, you know, with our clients, I can always tell when one of my clients has, they gotten on somebody’s email list, you know, and the question is always, well, should I do this tactic? And, you know, the answer is always Well, you could do that tactic. If you master that tactic, it will probably work for you. Are you willing to stop what you’re doing now to go and master that and effectively start over again? And I think before approaching any strategy or any tactic, it’s useful to ask yourself the question, how committed am I to this, you know? And am I really committed to mastering this process?

I know when I started this podcast, the commitment I made to myself was I’m going to do this for a decade because I figured that gave me long enough to master every possible way of using this to attract clients. And it didn’t, it hasn’t taken the whole decade for it to pay off big. So, and I think your strategy is the same. It gets better with age and with understanding and with learning. Let’s talk for a minute about an alchemy network. Can you kind of walk us through what that is and how somebody might apply that in their business?

What is an Alchemy Network and How You Can Apply it in Business

Dov: Sure, absolutely. Let me see here. So an alchemy network, again, jump in and feel free to take this wherever you think you should go. But the basic idea is this, it’s that you, we all need our own unfair advantage. We all need an unfair advantage. And an alchemy network as a way to give you an unfair advantage, especially if you’re, if you do tend to have that feeling. And I’ll just connect it because I had this thought as well while listening to you before is that when I talk to people, you know, consultants say this is not like, you haven’t been going about getting clients in the same disciplined rigorous way.

And usually they tell me that they, you know, they took this course, they worked with that coach, they went with that mentor, this program and so on. And every each time it sounded right, they thought it was going to be good, you know, and only got so far along. I ask them another question often and that from what hearing, is it true? Did you have this sense along the way that okay, I’m doing what they say, but there’s something missing. There’s some, there’s a sense that, hey, I’m following the steps as I tell them, but I don’t really understand, you know, something. There’s something missing. And, again, almost always, I hear Yes. They feel like, you know, I talked to a new client in my force, You: A Force to be Reckoned With program, and I was talking to him and he showed me how he’s done this, he’s done that.

And all along, he felt like, he struggled with messaging, you know, getting clear about the niche and messaging, which everybody knows you have to do, and almost everybody struggles with, almost. And he says, you know, other programs I was in, they would just say, Well, you know, they asked me a few questions, I give them the answers and they say, Okay, so this is your niche, or this is your message. I never felt like they really listened to me. I never felt that they really heard who I am and what I’m after and why. And when you’re not pointing and when you’re in that place, and when you kind of say, Okay, well, I guess they know, or I hope they know and you follow along, you do what they tell you to do, it will break down because they’re not really looking at you and saying, Who are you, Steve?

What are you trying to accomplish? Like you talked about earlier, what’s the business that you really want to build? Who, you know, and why? And who is an ideal client for that and why? And let’s really peel off layers. Let’s get into the mind and the heart of your ideal client so we can craft a simple, compelling message that really resonates. So that’s just a long way of saying that if you’re on a path and there’s this little nagging sensation, little nagging feeling that something here doesn’t feel right, listen to it, because, you know, if you’re going through medical school that way learning to be a heart surgeon, you would not just keep going with that nagging feeling because you know that it really matters.

You need to really understand this or that or somebody might die one day. So, you need, you’re going to ask questions. You’re not going to put up with shallow answers. You’re going to make sure. You’re gonna ask your friends, ask your like, go to other people, whatever it is that you need to do in your way to fill in that sense that something’s missing, okay? So, if we’re not meant to be or don’t want to be the charismatic guru-type, so we need, they have an unfair advantage. And that is that, you know, most of the attention goes to people who are natural that, you know, and just good at getting attention, like that’s what they enjoy. So, that’s really an unfair advantage. We need an unfair advantage and that becomes with the strategically, you know, selected relationships and cultivating those relationships.

Like I said before, if you have a, you know, kind of 30, 50, 100, 150 relationships with well-placed people, either ideal clients or, you know, colleagues who could put you in front of audiences that include ideal clients online or offline, whatever it might be, then you have an unfair advantage. And the way I recommend building this is what we call an alchemy network. And what I’ve come to understand is that, you know, they say that the casino, whoever, the casino always says a house advantage. When you own the network, you have a house advantage. I’m not talking about joining a BNI group, although that was helpful for me at the beginning. I’m not talking about just joining a lot of typical associations.

There’s a very particular way that I recommend that people go about this in terms of designing and building out your network. It’s not a mastermind. It’s not a coaching program. It’s not a Facebook group. What it really is, is it’s like a kind of a secret society without the snappiness if you will, okay? And it’s me curating people. It’s you curating people who meet certain standards, and the curation part is really key. And you’ve been in a group that I’ve been leading for close to 10 years. You’ve seen that. I think you’ve seen that, I don’t, I mean, I’m pretty sure it’s happened with you, it’s certainly happened with others that sometimes you nominate somebody, hey, so and so might be a good fit. I don’t take everybody, even if they look good.

I once had somebody nominate somebody who had, said you had like a million email subscribers, and we, you know, we’ll often cross-promote each other. That’s the key idea of what the group’s about. But he was in the dating and relationship niche. Well, it was really flattering that he was interested in joining our group, according to the, by what I heard, but I said like, what are we gonna do for him? What would he gain from it? You know, he’s in the wrong, like, we’re all focused on business, on entrepreneurs, small business, consultants, coaches, experts, professional service firms. That’s what, we’re all together. None of us, most of us are not going to be willing to use add emails about dating relationships.

It just doesn’t fit. So how could we possibly help him? It doesn’t matter that he was interested in joining, I just didn’t see that he would gain. And I think that part of curation is being smart about who you let in. Because if people see how they will gain, they will participate voluntarily. And when people participate voluntarily, that creates value for everybody. That makes sense?

Steve: Completely. Yeah. And I think that’s one of the key things as I’ve watched you kind of develop all of these ideas, I guess, I’ve been part of the lab, being part of that group. And you’ve done, I think, a really great job of curating, and it became apparent to me, oh, probably three or four years in just exactly how valuable that role was to the whole group, because, you know, even at that point when, you know, you weren’t charging anything to be a part of it. Those of us who were participating, we’re investing our time.

And, you know, for a lot of the folks who might listen and think, Oh, this is a strategy that maybe I can implement, you’re going to invest a lot of time and all of the people that you invite, even if you don’t charge them money, they’re going to invest their time, and that’s probably the harder thing to get people to do. The money is relatively easy. But you have to, you got to make it so that it’s valuable. And Dan Sullivan has a saying, it’s not about who’s in the room, it’s about who’s not in the room. And I think that matters a lot in these groups.

Why You Might Consider Charging a Membership Fee

Dov: Yeah, that’s true. And, you know, I’ve had to kick some people out from time to time. And, you know, most recently was probably about eight months ago. Oh, you might remember, but it was a little unpleasant. You did a little. This is a group that I ran for free for many years and about a little less than a year ago transitioned to paid. And, you know, we got it up to 195, 200 members, about half of them were active, about half were kind of not really active as far as I could tell. And I really needed to see who wants to be there. You know, who, because it was, I put a lot of time and so on. So we started an annual membership fee. And I was really scared of losing the group because I just, I didn’t know, I was, it was just my own block.

I was afraid. But I consulted with a few people, some of the members. And, you know, people say well, of course you should have done this long time ago and you should charge more than you’re planning to charge. But anyway, I did. I think the fee is reasonable and on the modest side. But we thought with, you know, I think 45 people who signed up to continue right away and we’ve added another 15 or so people without really any effort on my part, just from others in the group making introductions because they see an interest. You know, they’re gaining so much from it, they want others who they can, who they’d like to spend more time with or have more access to. There’s that network effect, you know?

Every additional new member brings, I don’t know, mathematically what the formulas are, but, you know, brings that much more value for everybody who’s already in the group. And that’s really, you know, the, that’s one of the important things here is the curation and recognizing how that sometimes you can have to kick somebody out, even if it’s not pleasant. So I think I went a little off track there, but we’ve, because we’ve talked about how we switch to pay. So I wanted to talk about how some, now I’m working with clients who are looking to set up their own alchemy networks. So some of that makes sense to start for pay, some of them, it makes sense to start for free. You know, and both could work.

And that’s one of the things I help people figure out early on and pretty quickly. So, but I want you to think about this. If for some of my clients now, they’re building an alchemy network, and they’re getting, their goal is that, you know, if you have a member paying you 1000 or $2,000 a year, and then you could be making, let’s say, somewhere, conservatively, 50 to $200,000 a year from being paid to market to your ideal clients. It’s not a crazy idea. It’s really doable. It doesn’t mean it’s gonna happen in a month. Although, you know, some people can do it in, you know, faster, some people will take longer time.

Obviously, it depends on a variety of different factors. But this is absolutely doable. And of course, the questions come up like why would someone join my group? Everybody’s in other things or they’re busy and these are the things that we work through. And the answer is there are some principles behind the answers and then there are the individual-specific answers for specific clients. That’s part of what we can help them figure out. But it’s important to recognize that this can become your unfair advantage. When you have 100, 150 people well-placed across your industry working at companies who, where they have the ability to hire you. And they’re sharing with you and with others in your network and asking questions on the email list and on the monthly video call or one on one conversations with you and with others. You just have backdoor access to your buyers, to decision-makers, and it doesn’t matter as long as, you know, it gives you that ability to establish that expertise in a way that you can’t from a distance. Even if they’re on your email list, even if they join your webinars, even if they hear you speak, they do not get to see you in action the same way. Make sense?

Steve: Completely, yeah. And you talk about using these things and having them paid and being paid to market to all of your ideal clients. And I don’t want that to distract people, because I think that’s such an allure. Like, oh, I could just get, you know, all these people to pay me for it, you know? But as I think about that concept, if I could get access, the access itself would be worth more than if anybody paid me. And so talk a little bit about how you think about that. To me, the entry fee is kind of small change. I mean, people with podcasts, same thing kind of happens. People go, Oh, well, you know, I could get sponsors or I could charge guests to be on and there are podcasts that do that. And there are, you know, reasons to do it. But in this case with the alchemy network, in my mind, the fee is more to kind of create commitment on the part of the members, rather than, hey, I’m going to get rich from that because you’re probably selling something that’s worth more.

Dov: That’s true. And I think that it boils down to, it’s an individual decision. I don’t think that, and you have to look at it like you’re saying in the bigger picture of your business model. So if a new client is worth, let’s say, $50,000 to somebody, or $150,000 for somebody, there’s, I can really argue both ways. I can argue both ways, I can argue that if a new client is worth $50,000 for you and they’re not ready, but you are aware of some kind of need that you can perhaps begin to address in a far more leveraged way by inviting them to your network and charging $1,000 for the year, there’s a really good chance that they’d find it easy to pay that thousand dollars per year, okay? So, go for it. I think a lot of that will depend on the mindset of the person leading it and their confidence level and their experience level and how good they are at these types of things. Now they could possibly, you know, they’re in-between options.

Like, it’s not necessarily should it be free or should I charge? Like, you know, for founding members, you might offer them, you know, maybe free for the first six months as we, because you’re helping me get it started off the ground. And then after that it’ll be whatever, or maybe a discount. So I want to address something else in terms of when people are paying, they’re committed. We have definitely seen, and you’ve seen it, and I’ve been saying this to people because I have some clients who say, Well, you know, they started it and there’s not really much activity. No one’s doing anything, maybe because I’m not charging them or they’re not paying enough. And I said, well, that’s not it. I was leaving my network for eight or nine years without charging anything. We have a lot of activity, right? Yes, that high activity came from probably about 50 to 60 out of the 200 members but that’s just because I didn’t have a way of pruning the people who weren’t really interested in being there. So if anything, I think a fee is a way of pruning out the people don’t really want to be there anymore. But it doesn’t, you know, I won’t, don’t be so quick to say that if there’s, if you’re not seeing the activity that you want that it’s because they’re not paying. Does that make sense?

Steve: Yeah. I guess I don’t look at it that way. I just looked at, I look at adding the fee as kind of that, kind of built-in barrier to people who don’t want to be there. It’s easy for somebody if there’s no fee and it seems like something they might want to do but they’re not really committed to, it’s easy for them to say, Sure, I’d love to be a part of that without being committed to being a part of it. But when there’s a fee to walk in the door, obviously, you have that. And I’m not advocating that there should or shouldn’t be. What I worry about when people begin to see that, oh, I could get all of my marketing to pay, you know, to pay me, that’s great. That’s, you absolutely should look for ways that you could do that if you can, but don’t let that get in the way. Sometimes I see people letting that idea gets in the way of them actually getting the result that they want, which is the more clients, you know? Because it’s usually sort of the, you know, the dollar you’re stepping over to pick up that little dime.

The Importance of Long Term Commitment to Your Tactics

Dov: And I’ll just connect it with what we talked about earlier about mastery, that there’s a learning curve here. You know, and this is not a get rich quick anything. So, you know, for some people it’ll be easier based on their existing skillset and an experience of perhaps doing something similar. And they might, you know, or they have, they’re already pretty well known amongst their potential clients. For one reason or another, people can get it, you know, kind of get into this running or more slowly. But like you said, with podcasting, you committed to do this for 10 years. That’s, first of all, I love that and I think that’s fantastic. And anybody doing this should have the same type of attitude. This is not something I’m going to do just for six months to see if it works. You know, these are, we’re talking about relationships with people. And what’s interesting is, as you’ve seen a viewer, I don’t remember from, you know, not pretty close to the beginning I think. Not the beginning but not that far off.

Steve: I think my member number is in the single digits. I’m not certain, but I think it’s in the single digits.

Dov: That’ possible. I mean, we’ve grown together. When we were getting started, we, you know, we now have members who back then I would have thought were unreachable. Like, what do I possibly have to offer that person? But we’ve grown. We’ve grown into it, we’ve grown up together and as we’ve all grown as business people, we’ve become more attractive to the very people who seem so far ahead. And that also happens and that’s also a fantastic insight into how these networks work. But don’t go into this like you’re saying, as a quick fix, yeah.

Steve: Well, and I think that’s actually the perfect perspective to give people because there are people who will listen to this interview who are looking at each of us and thinking, wow, they’re so far ahead, how am I ever going to catch up? And, you know, eight years ago or 10 years ago, whenever it was that you sent me that first message, and we started having, you know, a conversation and I came into the group, we were all effectively, you know, nobodys. We didn’t have big lists and we didn’t have huge followings. And, you know, and not that we have, you know, the biggest now, but, you know, I think that’s always the danger is you see somebody who has put the time in and everything and you look at them at the state they’re at now, but you don’t see what came before. And I think it’s really important for everybody listening to this to understand no matter where you are, whether it’s this strategy or podcasts, or you decide you’re going to double down on Instagram, all of those would work. If you are willing to go through this process and figure out how to make it work for you, but it isn’t going to work, it’s not likely to work for you in the next 30 days or the next 60 days or the next 90 days, you know? But maybe over the course of the next year, two years, three years, it could work fantastically well.

Dov: Right. Yeah, that’s really true for every tactic could work, every tactic could fail. And if you, you know, sometimes the saddest stories are the people that have an early success in their business and they wake up five years later and they realize they were lucky. And, you know, they just happen to know some people who had a need and that went on for years. I’ve talked to these people. And then they spent the next five years really struggling, like really. Like, they used to think oh, they’re so smart, and then 5, 10 years out, they, their confidence is in, you know, in the basement. It’s just totally shot because their confidence was based on assumptions about their skill level and they’re really just lucky. They’ve never built out the right skills and never built out the right systems. We all have wake-up calls, you know, or surprises of one kind or another, but we really needs to recognize, I guess there’s also a little side point, but we really need to be well aware that whenever you’re struggling with whatever you’re struggling with, or whatever is not working, it’s don’t be quick to blame yourself. It’s not you the person, it’s your process. And when we compare ourselves to others, like you said, you know, it’s the idea of don’t compare yourself to where someone is today, but to where you were yesterday, right? So it won’t, that’s what we’re doing.

When we’re comparing ourselves to somebody else, they’re essentially saying that, oh, they have advantages that I don’t. They could do it because they, the person, is this and I, my person is different. No, it’s not you the person, it’s the process. And that’s really always important to keep in mind. And so like, you know, even if someone does really well with Instagram or with Facebook ads, whatever, that’s fine until it changes. You and I both know somebody who was making several million dollars a year with Facebook ads. And then about a year and a half ago it just stopped working. It stopped. And then he spent nine months I think and $600,000 going through three different agencies trying to get it to work again. And it didn’t work. Well, that’s adding insult to injury. He’s had to be very creative in coming up with some, you know, real shifts in how he runs his business. What does he sell to who? How does he charge?

And he’s still kind of trying to find his way through that. Because he’s good at certain things, but he wasn’t, you know, I mean, he wasn’t the genius marketer that it looked like on the outside. He just, you know, he found an agency that was able to get the Facebook ads working, and it worked at a time when Facebook kind of whatever their algorithms were fit with what he was doing. But now, the real challenge is when all that changes, what do you do?

Steve: Well, and I know we’re getting close to the end of our hour, but I love that you just brought that up because we’re seeing all of this sort of change very rapidly before our eyes, you know? When I first got into business in 1994, we didn’t have the internet. And, you know, I remember I was in college my senior year and there was this new thing, the mosaic web browser on all the computers, but it didn’t go anywhere like you did. There was no Google. You know, I didn’t know what to do. I didn’t know what the thing was or what to do with it. So that’s kind of my beginning with the internet. And so I go out and I get to work. And it’s about a year before we get email. We go and buy this thing called the internet in a box. Literally, it was a box you got from CompUSA. So I’ve watched from then to now all of this stuff transpire. And it’s so easy to sit and feel like, well, it’s all mature, and it’s at the end, but it’s really not.

We’ve watched all of this stuff get invented. As, you know, as human beings, we’ve sort of tried to sort out well, how does it all work now that we’re all connected and what does it all mean? And you’ve seen people be able to kind of take advantage of the fact that all of these systems are new and we’re figuring them out. And find the places where you can get very quick and easy advantage. And sometimes that happened by accident and sometimes it happened intentionally. And I don’t fault either of those. But now that we’re seeing some of these things mature, so you’re seeing like on the ad platforms were 10 or 15 years ago, you could be not very good and still do very well.

Now, we’re, you know, we’re seeing these things mature and because costs have gone up, you’ve got to be good. You’ve got to have all of your other stuff, you know, working for those to be effective. You’re starting to see that sort of filter out who had the right business model or who had a sustainable business model and who didn’t. And I keep coming back to this idea, I think Jeff Bezos said it, he said, Everybody always asked me what’s going to change in 10 years? And he said something to the effect of that’s the wrong question. And the question that you should be asking is what’s not going to change?

Dov: What’s gonna stay the same. Yeah.

Steve: Yeah. Well, the thing that’s not going to change are relationships. And I think that’s, I think that’s the important place to sort of wrap up our conversation is that if you’re going to build your business on a foundation, it’s what are the key relationships that I need to create that are really going to fuel my growth forever? And that’s probably not 10,000 people, it’s probably somewhere south of 100 and maybe around 50 relationships that are going to carry you through your career. Who are those people and how can you start building them? And you’ve got an approach, we’ve got an approach, there are other approaches. But I think that’s the first and important decision and an insight that I think people need to have.

Dov: Yep, absolutely. People cannot take your relationships away from you. You know, if you meet somebody from high school or college 10, 15, 20 years later, pick up from where you left off. If you used to hang out and have a good time together, you can pick up pretty much where you left off. And as long as, you know, you’re treating people right and being respectful, doesn’t mean that you’re always able to give them what they want, or, you know, not everything is always a fit to do together.

But you have much more control. With the other things, in some ways, there are opportunities for more leverage, but like you were saying, for many people, it’s an illusion or it’s a temporary thing. Again, it doesn’t mean that this, that Facebook ads can’t work and people shouldn’t do it. That’s not at all what we’re saying. And I think that’s pretty clear. What we’re saying is that there are a lot of people who should be leveraging relationships, turning those into an unfair advantage. And that’s, you know, that’s the idea of doing that through building what I call an alchemy network. That’s how you become an under the radar leader in your industry and put together a short training at profitablerelationships.com/steve, where people can get that free. It’s really it’s about 15 minutes. It’s a four-minute video followed by a 10-minute video.

And that really just gives you, I mean, it’s not complicated. I actually, you know, probably put off going in this direction for a couple years because I was, I had the curse of the expert. You know, the expert’s curse where you don’t really value what you’ve done. It’s like, well, anybody can do this. There’s nothing really to it. And but over time, I started to just talk to people about it and the questions they would ask and the things that I saw they got stuck on, I wouldn’t have even realized it or thought about it. So it’s not like I’m such a genius, but I guess these are things that I figured out over the years. And, you know, I’ve been able to shortcut their process. Help them see, you know, a vision for what’s possible. They just couldn’t see on their own because they just never thought about it, never saw anything like this, never been a part of it. So that training kind of lays out the steps, you know, the overall process and it’s free. Profitablerelationships.com/steve, in your honor.

Steve: Thank you. And thanks for sharing that. I’ve watched those videos. They’re brief, but I think very, very insightful. They’re worth going and watching. So go do that. And though we went longer than we planned, but I’m really grateful to have the opportunity to have the conversation with you. I always learn a lot. I’ve got notes here that I’ve taken. I’ll probably go listen to this again and take some more. So thank you for sharing your wisdom with us today and investing some time with me.

Dov: Thanks for having me again, Steve. One day we have to meet in person.

Steve: Yes, we will. Maybe after the pandemic is over, we’ll all be able to travel again.

Dov: Yeah, right. Have a good day.

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