01:28 - Keith Perhac Introduction

02:09 - How do you find stuff that you can repurpose?

05:37 - “Course” (What you call things and the value proposition)

14:32 - Chunking Up and Instructional Design

29:16 - Building an Audience

31:21 - Making a Successful Course Worth the Price

33:30 - Tiered Pricing

Picks

Work the System: The Simple Mechanics of Making More and Working Less by Sam Carpente (Keith)
The Brain Audit: Why Customers Buy (and Why They Don't) by Sean D'Souza (Keith)
Hooked: How to Build Habit-Forming Products by Nir Eyal (Keith)
Skype (Keith)
Schedule Once (Keith)
Edgar (Jonathan)
Facebook Ads Manual: Everything you need to know to get started by Mojca Mars (Jonathan)
Blab (Philip)
Website Teardown with Kurt Elster and Kai Davis (Reuven)
Putting tabasco on popcorn (Reuven)
Spending time with your family (Chuck)
@cmaxw (Chuck)
Freelance Remote Conf (Chuck)

My superpower’s killing our conversation. So, there you go.

Hey everybody and welcome to episode 177 of The Freelancers’ Show. This week on our panel we have Reuven Lerner.

Hi everyone.

Jonathan Stark.

Hello.

Philip Morgan.

Hey everybody.

I’m Charles Max Wood from DevChat.tv. We have a special guest this week, and that’s Keith Perhac.

Hi, thanks for having me.

Do you want to introduce yourself?

Yeah. I’m Keith Perhac. I run a technical marketing agency, which means we do marketing for people who are looking to create information products, sell their products more online, etcetera, etcetera. But one interesting fact about that is that the entire company is run out of middle of nowhere Japan, even though we have very few Japanese clients.

Very cool. So, I’ve met Keith. We met at MicroConf and he was also a guest on the Entreprogrammers podcast. And we got you on today to talk about repurposing content and building courses.

Yay. Excellent. That’s what I love to talk about.

Very cool. So, as freelancers, we’re kind of experts in, hopefully, at least in something that we’re selling to our clients – how do you find stuff that you can repurpose in that way to build a course?

Wow. So that’s a – you jumped in right in. [Laughter]

Yeah. Let’s do it.

Yeah. So, as a freelancer, as a – let’s not say freelancer, let’s say someone who’s creating information and content on the internet – in order to get any sort of list, you have to have created some sort of content already. No one just wakes up and says ‘ok, I want a list of 5,000 people and I’m going to sell a $10,000 product to them’. That’s a great goal, but you’re not going to be able to send down email that morning and say ‘ok, now I have – now I just ran a one-million dollar launch’.

So we’re going to start with the assumption that at the point where you’re looking to create a course and looking to start building something like this, you already have some amount of content already available, whether it’s a blog, whether it’s a ton of tweets, whether it’s – maybe even software that you put together over time. You have to have some sort of library that people are interested in and have you built a list around. Is that a good assumption to start with?

Mm-hm.

Alright. So let’s start with that. Let’s start with the easiest one because sometimes building software and building a list around it, they’re different strategies – let’s start with the easiest, which is ‘I have a blog, and I talk about something to someone’. So it’s specifically [inaudible] my used case, which is – so we do a lot of marketing with Infusionsoft, which is a new hotness in the small to medium business CRM space. So I do a lot of writing about Infusionsoft. And I built up a small list of people who like reading about Infusionsoft to maybe they’ve been clients of mine or they referred people to me or they just like the blog and they read it.

So I have a bunch of things like ‘How to build a timer for your optin funnel’, ‘How to build a better optin funnel’, ‘How to work with’ – just all the information that I talk about. Part of it is informational; I’d say about 70% is informational. It’s like tactical teaching. And the other 30% is what I like to call content fluff. It’s what gets people to understand you as a person. It’s me talking about like ‘oh, my life in Japan’, or ‘hey, I hate working with Japanese companies now’, or it’s just things that happen to my life that make me more relatable.

So, we’re looking at this and we have this [inaudible] of work, and I’m looking at it and I’m going like ‘ok, what do I do with this?’ I know I want to create a course. I want to create an optin something. I want to create something that gets people excited about what I’m talking about beyond the confines of this blog. But I’ve already talked about everything I know. I’ve talked about everything I

know about Infusionsoft.

It’s the expert’s dilemma. It’s you know everything that you know, like how do people not understand all of this? And especially when you’re doing a blog, you – it’s true, right? You talk to people and – like this conversation that I’m having right now, I’m jumping at a high level, and that’s because I wrongly probably assumed that people have followed me up to this point, that they understand what I understand, but that’s a huge fallacy. And that’s what I’m hoping that you guys are going to help and just punch me down a little and say ‘I have no idea what you’re talking about, Keith. You’re talking way too fast. Shut the hell up’ [chuckles]. Feel free to jump in at any point with that.

Since you’re asking a question right off the bat, what do you mean when you say course? We’re not talking about a Udemy course where it’s like an 8-hour video thing, I think. I think what you’re talking about is like a 5-day free email course type of course for – that you’ve used as a lead magnet or –.

It could be anything. And that’s where the whole content repurposing comes in because there’s different levels that you can bring out a course. And different things have different values, specifically based on the way you present them and the information included.

My favorite example is 37Signals put out the book – I believe it was Getting Started – I am blanking on the name right now. It was a [inaudible] – no, it’s before Rework, I believe.

Oh, ok.

But they put out a book; it was sold on Amazon for – I think it was sold for 25 bucks or something like that. And they sold it for a while, and at some point they we’re like ‘we’ve maxed out the revenue that we’re really going to make for this. It’s not a huge moneymaker course, but it’d be really great for the community. It’d be really great. We’re just going to release this as a PDF’.

So they took this book, which previously sold for like 25 bucks – Getting Real, that’s what it was; Getting Real – thank you. They put it out on their site and they said, ‘get the free PDF, just give us your email address’. And the vitriol that was just directed at them. They’re like ‘why do I need to give my email address for a PDF?’ [Laughter] sharing the link in a PDF, it’s like –.

Oh, I love people.

And this was like hacker news. This was their market. This was the techie people. And it was just filled with vitriol of ‘why do I have to give my email address for a PDF?’ Even though it’s a 25-dollar book –.

It would be totally ok with forking over money for the same PDF.

Well, it wasn’t a PDF; that’s the thing. When you –.

A book.

Exactly, it was a book versus a PDF. And it’s interesting that the PDF has turned into just worthless; like a PDF is worthless at this point. No one gives any money for a PDF when you call it a PDF. You can have that same PDF and call it an e-book, call it a white paper, call it whatever you want, and people will pay money for it, they will give email addresses for it, but it was that word PDF that just completely decimated it and just all this vitriol. It was amazing. It was amazing to watch; just beautiful and it’s like a car wreck in Nascar. [Laughter]

End over end.

It was –.

Oh wow.

What you call – and I guess this is like fundamentals of marketing here, but what you call something really does have an impact on what people think of it and what value they associate with it.

Oh, hugely. Hugely. I think that there’s two main things that really changed that value proposition. One of them is, of course, the naming. What you call something, even though it’s a very lizard-brain thing, our higher cognitive functions were like ‘the content is the same, it shouldn’t matter what it’s called’, but our lizard brains, we see something that is named – something that’s detrimental, that’s a low value word, and we’re like ‘this is worthless. We don’t value it’. But if we see something that’s named higher-value word like ‘master level’ or – that’s why everything is called ‘master class’ now. It’s like a bunch of guys getting together; maybe one guy’s a mentor, or – even the word mentor. Look at these words that we use in marketing – mentor, master-class, VIP – things like these make things seem so much more valuable than they are.

And maybe they are valuable, maybe they’re not, but that’s not the point. That’s something that happens after you start the course, after you purchase, after you start consuming the content, that’s when you’re getting value out of it, and that’s when you can decide if it’s valuable or not. But before then, all you have to judge is the name. The name is very important.

So Keith, by sort of way of 101 level topics on these, can you map out for us the landscape of delivery mechanisms and names in terms of the perceived value?

Definitely. So I would say the absolute lowest is probably blog post. Maybe tweet is below that, but [inaudible] really good tweets. But essentially, let’s call it non-dated content on the internet; that’s probably the lowest value. Blog post, not very valuable in the grand scheme of things from a transactional relationship. People are – people put on ad blockers to stop viewing ads on [inaudible] articles. No one’s going to pay for articles on things – very rarely.

The next level would probably be PDF, and the next level would probably be e-book. So an e-book is something you can definitely sell for money – people do. The most expensive e-book only that I've ever seen, I think, is $97 and that was Ramit Sethi’s 50 Email Scripts – I think is the name of it – great book, by the way; I highly recommend it. And then after that, you start getting into courses or – let’s go into bundles first. So after that, you go into bundles. So it’s a PDF plus something else. It’s like an e-book plus some videos plus some Photoshop templates or something similar like that.

And then the last one is the course. And courses are really a whole conversation themselves. We can totally go into that because I love talking about courses. But a course is information over time. That is the core definition of an online course at this point. It’s information over time. It can include video, it cannot have video; it can have one-on-one calls, it cannot have one-on-one calls. There's a ton of things you can do to mix it up and play with that, but at the end of the day, at the core, it’s information plus time.

That’s an interesting thing because then even if you're providing – and I assume this is weird, but you can provide the same information all at once, and you can provide the same information all at a time, and the perception to the value is totally different.

Yes. Exactly. I always talk about like a college course. When you sign up for college and you go to your new course and the professor comes, he drops 17 books on your desk and goes ‘that's it, I’m gone’ – that’s not how it works. No one would pay the amount of money they pay you for college if the college just gave them a bunch of books and said ‘there you go. That’s all the information you're going to need. You're done’.

Yeah. The guy has to show up and put you to sleep.

Exactly, exactly. You need to get your rest time – wait, no, no, that’s not on [inaudible] [laughter]. College and the learning experience; why we just don’t get books and instantly learn things is because we need someone to lead us through at a pace because information, especially in a course, builds on previous learnings. So the things you're learning on day 1 are much simpler than what you're learning on day 300, but it is a foundation for what you're learning on 300. You can’t just skip to day 300 and expect to understand that because you don’t have the foundations.

And that’s something that we actually see a lot of when people try to do the all at once course. So people do these online courses that they're just like ‘ok, here’s all the information, done’. And what you’ve seen happen is that people skip around. So people read chapter 1, they're like ‘oh, this is really interesting’. But you get to chapter 2, and they say ‘ah, I already know this’ and they skip to chapter 3. Chapter 3, unbeknownst to them, built on something that was on chapter 2, but they didn’t know that. So suddenly, they're feeling a little bit lost, but they're able to get through. Chapter 4 goes into more in-depth, but they needed that information in chapter 2, so now they're more lost. And they get more and more lost as they go on because they're skipping around. And what that does is that people are upset with the course. They're like ‘this course didn’t teach me anything. It was too difficult’ or ‘it didn’t teach the right thing’. They're never going to blame themselves for skipping around. They're going to blame the course.

It’s like when you get an electronics thing from the store, you don’t read the instruction manual and you break it, and then you're like ‘this is a stupid piece of crap. It doesn’t work’. It’s the same thing. You need that order; you need that structure in order to get real value out of a course, and that's what that time component does because if you're only allowed to have one chapter a week or two chapters a week or whatever that time delay is, you're going to spend time with that chapter. You're not just going to skip ahead to the end because you can’t.

It gives you time to digest it.

Exactly, exactly. And what we’ve done with a lot of our courses is while they're digesting, we give them supplemental information, like a quiz or a form that they fill on, or even like a video that helps them out that supplements that learning that comes at the right time. So it’s not just this block of information; it’s ‘ok, here’s the core information we’re going to learn this week’, and then 2 days later, you get this video, ‘here’s something to think about for next week. This is going to spur you on for the next part’. So chunking it up is very important.

So do you not want to just deliver the whole thing at once then?

No. Generally not. For a retention value, for retention reasons, for people getting lots of value out of the course, very good to break it up. Also, there's a psychological marketing side of that where if you say ‘hey, we have a 9-week course here’, people value that much more than a hundred-page e-book, even if the content is exactly the same. And that’s coming full circle back to the idea of repurposing content.

We’d had a lot of people be very successful in taking an e-book or something they’ve already written, chunking it up into parts and put it as an online course. And then they record extra video or they put some supplemental stuff, maybe put a quiz or something – something to make it have different content more value than just the PDF. But the core of it is it’s still that PDF. And you look at what a lot of people do in the information marketing or the info product space, which is they take something that they’ve already written or that they built in the past and expand upon it on an online course.

So Keith, there's a whole theory sort of stodgy buttoned-down discipline called instructional design that I have some contact with from previous work that is full of theories and ideas about what's the most effective way to take a big blob of information and present it. Is there a like a little 5-minute intro level to information design that – or maybe an approach you use with your clients to – because I’m assuming if you don’t just take chapter 1 of said e-book and turn them to lesson 1 of said course, maybe it’s a little – maybe there's a little more to it than that; I’m curious about that.

It’s actually interesting that you mention that because usually, when someone has an e-book or – we’ll call it an e-book – an initial book with chapters, if they’ve done it right, is generally laid out in a very similar method. And for people who don’t have that first e-book, yes, you have to go in and go to the planning stages, as well as what information needs to be based on each level in order to get people the most information and instructional value that they can.

But usually, by the time that they have a book out, the book has followed – if it’s a good book, the book follows that kind of same structure and format. So what we actually talk about with people who are taking that e-book into a course is ‘well, let’s revisit this and see if it’s the correct structure’ – but 9 times out of 10, it is – ‘and let’s look at what supplemental information we can put in there’. So what can we make – so each chapter, let’s say, is a week. But a week is a long time to not email anyone and not talk about the course, so what can we put in that’s kind of like a side-filler, whether that’s a video or a survey or something.

And the best way we found to get that is email people who have bought the book before and ask very specific pointing questions, not as like a survey kind of thing. So the way that I always give the example on – I really like this example – is if I read a blog post on the perfect sales bundle. So I go through everything from the very beginning to the very end, nuts and bolts the perfect sales funnel. And I’m like ‘ok, I've written the definitive work on the sales funnel. I have nothing else to write on this, but I want to turn it into a course. I want to make the ultimate guide to sales funnels, but I already wrote it. It’s a thousand page or it’s a thousand-word blog article. What do I do from there?’

And it’s the same with your PDF or your e-book. What do you do to get more information, more supplemental information out of that? And the way that we found to do it, which is really nice, is that we take a part of that. So we take a part of the chapter, or we take a very specific question out of the blog article or whatever it is, and we email that out as a broadcast to our list, and we say ‘hey, this is what I’ve been talking about this week. Isn't this awesome? How do you feel about this? Do you understand it? Do you not understand it? Is there something you do better?’ – finding very specific questions and just being able to pull out more information from your audience based on that because like we said, experts dilemma – we don’t understand why people don’t understand our stuff.

And easiest way to find out what they don’t understand and where they need clarification is to ask them. And when to ask them – and just like, say ‘reply to this email’; don’t have them fill out a form because no one’s going to fill out a form. Just say ‘reply to this email’, collect it all in Excel or whatever, but have them give you feedback about the content. And that’s going to give you a number of great things. First of all, it’s going to give you a jumping off point of other information you can write about the chapter. It gives you information about supplemental information you could put in there. It also gives you great testimonials or great ideas of other ways to do it. It’s this beautiful content generator that sparks your inspiration not coming from yourself.

I've got two – I just want to pile on there and give two examples of that happening in my recent experience. One is that – I was talking to a coaching student the other day about the importance of him setting up an email list, like starting to get grab emails and building his list, and he is definitely an expert in his area. And his response was like ‘yeah, but I can only think of four emails for the entire sequence and I don’t really know what to say after that’. And I was like ‘you're going to get so many questions about those four emails that you're just going to have – the series is going to build itself. The sequence is going to build itself over time’.

And the other thing to just touch on a point earlier about jumping around, I just want to throw out an exception – sorry, the point about the book usually being laid out pretty well is that – I’m in the textbased, so I've written some books for O’Reilley, and one of the toughest kinds of books, in my opinion, to turn into a course is a cookbook-style book because it doesn’t – it’s laid out to jump around. So that might be – a few people are listening and they say ‘oh, I've got this – I've got that kind of material. It’s probably going to take a lot more work to turn it into a narrative or like a sequence series of courses, I guess, or classes’.

I completely agree. I love cookbooks; I have so many cookbooks, like technical cookbooks in my office that’s not even funny, but you're exactly right because there is not this based-on-growth narrative to it. It’s very difficult to turn into a course because it’s a reference manual. You're like ‘ok, I’m using XML and I need to do this and flip through the book, find it, there it is, ok now I have to code’. The cookbooks that I've used are – there's very little growth pattern to them. One section does not build on the next.

Yeah. I have one that’s like screen scrapers. If you want to scrape this, go like this. It’s almost like a

regular expressions manual. Just like the person’s a genius, and he’s got great content, but it’s very difficult to – it’s hard to imagine turning that into something that you could – where day 300 actually did build on day 299.

Exactly, exactly. And going back to the email point, I think that’s a very big hang-up that a lot of people have because I know I had it. When I started writing content, I was like ‘I've written everything I know. I can imagine everyone else having another problem that I haven’t touched on’. And then I talk to a client and they have another problem, and it’s like ‘oh, I could write about that’. And then I have an email from someone who has a problem or question, I was like ‘oh, I can write about that’. And essentially, any communication you get from your audience or from anyone can now become content that is useful for you and your audience.

So I do a ton of training. That’s like what I do, I would say, about 80% of my time, is frontal training in companies. I often tell the participants in my classes that if I were to go back 3, 4, 5 years and look at my slides, they would probably be about half as long. And that’s because people ask me questions, I say ‘oh, that’s a really great question’, and then I add it to the slides, I add it to the course, I also did a blog post out of it; I was making exercises out of it because if someone is asking, then it’s a real percent of a problem.

And one of the tricks that I've often used – because I encounter a lot where they say ‘ok, how much is there really to say about subject X?’ So one of the tricks I've used is I’ve divided by courses into many, many, many keynote presentations. So instead of having this few courses 300 slides, I divided it up so I have, more or less, chapter 1, chapter 2, chapter 3. First of all, it allows me flexibility in mixing and matching. But second of all, the moment that I say ‘I, now, am going to be talking about files’, like how do I open file or work with files in Python? Suddenly, I say ‘really? I only have 3 slides worth of information for that? I’m sure I can come up with more’. And I dig and dig and dig, and lo and behold, I come up with 40.

And so this thing that seems so straightforward and so obvious, suddenly you’re just discovering lots of nuances that are really going to help people and that they find insightful.

Oh definitely, definitely. And it’s experts’ dilemma. It’s like there’s so much information out there, but if you stick down with the pan and go ‘ok, what do I know?’ you’re never going to get it. You need something – [chuckles]. It’s like writing an encyclopedia from start. It’s like ‘ok, now I write about aardvarks, and now I have no idea’ [chuckles].

So it’s really important to get that feedback and to get that community. And it’s interesting because one of the biggest things, the biggest pieces of value – I think that a lot of people when they’re creating their first course, when they’re creating their PDF, or they’re creating even a blog, they’re like ‘this information has been talked about forever. I have all the information on my blog. No one’s ever going to buy this e-book or buy this online course’. That’s a huge problem, but it’s not true because you could have hundreds of thousands of articles on your blog, but no one’s going to go through and read them all in order that they make sense for their specific used case and piece them together and get the nuggets of information out that they need for their specific used case.

How to start an international marketing agency. So that would be a book that I would probably buy. Even if the information is the same, it’s been cut down –.

I call it localizing it. It’s like translating it for a particular used case or a particular audience. Is that what you’re getting at?

Exactly, exactly. And specific audience – and even within your own audience, because let’s say you’re talking about, let’s say, finances. Ok, so let’s say you’re talking about finances. You can take all that information you have about finances and put them into different products that talk about different aspects of finance management, whether it’s building a budget or creating an IRA or building stocks or whatever it is that you talk about being able to collect it into little groupings and then being able to sell that. And that’s what people pay for.

All the information that I’m ever going to talk about that any of my clients are ever going to talk about, 99.9% of it is already on the internet. None of my clients are doing huge research, milliondollar research grants at MIT building new like physics models and stuff like that. We’re teaching information that we have learned that everyone else in the world is teaching. There’s a lot of this information on the internet. But people are buying it from me and from my clients not because this information – this is the only place to get that information, but because we put it together in such a way that is relatable, that is understandable, and that, more specifically, takes you through a

number of steps built around your specific used case. It’s very targeted information – curated; that’s the word I’ve been looking for 5 minutes [chuckles] It is curated.

I think there’s even a step beyond the curation and the delivery. There’s also a trust factor where ‘yeah, so I can find this information for free on the internet, but I don’t trust that the person who wrote it actually understands the situation that I’m in, so I’m not sure it applies to my business’. So if that person has that sort of – I think at the very beginning of the talk, you said something about 30% fluff content where your personality comes through and your – maybe your mission, or your goal, or your background – and if the reader relates to those things, I think they’re more likely to trust the information that you’re presenting in the way that you’re presenting is more applicable to their situation.

Exactly, exactly. And you look at the people who are killing it in the online marketing space, and the way that they position it is often ‘hey, I went through this and I did this and I understand your exact pain, and here’s how I solved it’. Eben Pagan just had a launch last week, and he had – I tweeted this – he had probably the best sellable lifestyle sales video I’ve ever seen. It was like 30 minutes long. But he put it together in such a way and it talks about him and how he went from ‘hey, I’m just this guy’ to having this life where he can go – it has videos of him on the beach with his kids and it’s people reading iPads in the middle of the day with their husbands and wife, and it’s just like it’s the ultimate dream, but it’s all based around ‘hey, I did this. You can do it too’. And you look at all the people who are killing it in the space right now, they all kind of do that. It’s this not really heroworship, but it is this ‘hey, I went through this too. I’m not some random guy who just copied YouTube videos and put them up on my own site. I did this, it works, it can work for you’.

So Keith, I want to jump in with the question for the freelancer who has no audience or is interested in this idea, but just doesn’t have an audience. Is this something they can bootstrap their way in to, or is this something where they need to really focus on building an audience first? What’s your advice for that kind of scenario?

I really think that you have to build the audience first. Now, that doesn’t mean you have to have like a 5,000 or 10,000-person list, but you have to have someone reading your content and being able to give you some of that feedback before you’re able to create a course. And the reason for that is ‘ok, I’ve sat – I’m not posting anything. I’m creating my online course, and it’s done and I’m ready to sell it. And who am I going to sell it to? I’m going to put it on Twitter? Maybe people have heard of me, maybe people haven’t. Maybe my mom’s going to buy’. That’s the level we’re talking about.

And as we talked about earlier, the best way to get content that you know people are going to be excited about is by putting that content out there and seeing if they react to it. I think it was Bryan Castle who – he was launching a new product, and he just wanted to gauge how interested people were in this, and it was – I believe it was a completely different from what he was normally in, and he’s like ‘I’m just going to put out a webinar – free webinar, one hour, no sales page, no nothing, and I’m just going to talk about for an hour, and I’m going to take Q&A’. And he did it, and he borrowed a bunch of people’s audiences, he got people he knew to tweet about it, he tweeted to his own audiences, he emailed, blah blah blah. He tried to build up a lot of buzz about this, and he got a ton of people on the webinar. He got a ton of people on the webinar, and he had a good Q&A session, and that proved to him ‘yes, I have information that people want to know’. And then I also have all these people’s email addresses who want to know about this. So now he has the audience and he kind of bootstrapped that audience. But if he had just gone in into ‘hey, now I have a 9week course, come pay me $500 for it’, it’s not going to work as well.

Yeah. What is just to you – in your experience, what’s indispensable about a good info product or specifically a good course? What’s the one thing you just have to have for it to be successful or worth the price of admission?

It’s changing a lot. It’s changing a lot recently, and I think that community is the new key value structure in the online courses. I think there’s a lot of them that up until recently didn’t need a community aspect to them, but as there are more and more online courses, people are building them more and more. The value comes not only for content, but also the people that you can meet and talk through in that course. And that’s not for all of them, but that’s somewhere that especially for freelancers, especially business professionals that want to take an online course – I think that’s a very, very important part of the mix. And I’ve actually joined courses specifically for a community.

Ah, that’s interesting. Takes a village.

Exactly.

When you say community, do you mean a forum, a Slack channel that’s for people who have bought the course? Can you be a little more specific?

Yeah, exactly. The community is generally a moderated, but not controlled way for people on the course to just talk to each other. I’ve seen them on things like GroupBuzz where it’s just forums. I’ve seen it through Face-book comments or Face-book groups. I noticed the comments aren’t as great because they don’t allow intermingling, but Face-book groups have really been killing it in a lot of online places that don’t want to deal with the real time of Slack and don’t want to deal with a forum management of standard forum software. Also, a lot of people are in Face-book constantly anyway, so it’s a good touching point.

For me, personally, I like having a community, but I’m a lurker, not a writer. I like reading the people and usually, I form those bonds. I start in the community and form those bonds outside of the community, but everyone is very different. But some sort of ‘hey, this guy is doing something similar to what I’m doing. I want to get in touch with him’ – ability is very important, I think, from all courses now.

I really want to ask this; I’ve been thinking this for a while when we talked about books, when we’ve talked about emails, style courses, and we've talked about courses where you get access to where you drip out videos versus where you just give them all the content and e-books. And then you got the communities that you can connect to those. How do you decide which one is the best fit for you and for the community that you already have, that you are a part of?

That’s a really good question. It deals with understanding your community or understanding your audience, and one of the things that I find, and this is a segue into something else I want to talk about today, which was tiered pricing. So there’s no reason – I think that 99% of audiences in communities would benefit from some sort of formalized student-only community. I also feel that way about videos; I think videos are very important. And I think that supplemental information – Nathan Barry did this great with the way he set up his products where the lowest tier was just the e-book, and then he has the e-book plus the Photoshop files, and then the highest tier’s the ebook, Photoshop files and tons of interviews with the designers.

And so what I really think is that these are all great strategies and it’s a good way to self-segment people in your audience into what they’re going to buy. So you have the lowest value or the lowest priced item, just the course; just the text course, maybe a video or two. The next version up is the course plus those videos plus extra interviews or extra items that help people become better faster at the course. And then the third tier is all that plus some extras plus the community.

And this does two things, which I think are really interesting. One is there’s a reason you don’t have a community for your entire audience. Because 10000, 20000, 50000, a hundred thousand, however many people you have in your audience all chat in way on your Face-book special group or whatever, it’s going to be hugely annoying. There’s not going to be any value, and you’re not going to be able to separate the weak from the [inaudible]. There’s such a high signal-to-noise ratio – high, low, low, high. High, yes [chuckles].

I always go with unfavorable to [inaudible] problem.

Oh, there you go. [Crosstalk] The bad signal-to-noise ratio. And what having that higher priced – having that available only at a higher price does is it self-selects people who are really serious about business. No one’s going to pay, let’s say, a thousand dollars for an online course that has a community and then just write horrible epithets to the group. Or if they do, that’s going to be very rare and that’s a huge waste of money for them.

But if you open up to everyone that trend of abuse – and also, you’re not getting as much value because in a community, you want to be surrounded by your peers. You want to be surrounded by people who are in a similar position than you; maybe one step ahead, maybe one step below, but people who can help each other out. If you’re in a community and it’s just like ‘hey, look at all these topics’ for pages and pages, then you’re not going to get anything out of that, and it’s bad for everyone.

So creating this self-selected kind of ‘ok, these are the people who are serious because they were willing to put up a thousand dollars just to join this community’. Then you know that the people on that community are serious about what they’re doing. And then if you talk to them, you’re not going to get mobile cat pics in response.

Yeah. One of the things I want to do to circle back to on the tiered pricing issue, as someone who’s written out 2 books, writing the book is a massive effort. And so I have a product that has one price, which is a book. And I’m also aware of all the advantages of tiered pricing. All you have to do is go to Gumroad’s Help section for creators or do a little Googling and you just get hit in the face with the message that you’re leaving a lot of money on the table if you don’t have the tiered price offering.

So I’m wondering if you have any tips, Keith, for – ok, you just released a book, you’re exhausted, is there some way to reasonably add and maybe one or two tiers without additionally killing yourself all over again to get that out the door.

If you want the cheapest and easiest way to get a second tier, interviews.

Yes. Yes, I do.

Interviews are great; absolutely great. Video interviews, audio interviews, anything where the content is not being created by you, but you are facilitating it is a great win and definitely worth the extra value and the extra money that you would charge for that higher tier.

And you get two things from that. First of all, you get great content. I’ll say three things. Second, you get great content that is very different than what you’re saying. So it brings out more ideas and more information into your product. The third is you get to borrow that person’s audience. Let’s go back to Eben Pagan. You have Eben Pagan on an interview in your gold version of your book, suddenly, Eben’s audience is like ‘hey, this is a great interview with Eben Pagan; we should totally watch this’. Or you do something with Brennan or someone similar. Being able to borrow that audience is a huge boom.

Alright. You’ve now convinced me why interviews are useful because I – [laughter] – no, no, because granted I’m a cheapskate, and so when I see these different tiers, I’m like ‘ok, I can see they buy this, this, this, but interviews? Am I really going to watch these interviews? Am I really going to listen?’ So when I came time to do my book that I released, it was like ‘I am not doing these interviews because no one cares’. And it could be that no one cares, but – [crosstalk] – but first of all, ok fine, I’m not my audience, but above and beyond that, I can so easily see that if you interview 5, 10 people, and it doesn’t have to be longer and in-depth, but they then are interested in spreading the word about other places they appeared, and the borrowing the audience is fantastic; very good insight there.

Borrowing – [laughter] – is honestly the best way to grow any product, whether it’s a SaaS, whether it’s an online course, whether it’s your blog, whether it’s anything. Borrowing an audience is just a great way to do it.

And now it’s interesting that you talked about not – you personally not wanting the interviews. And me, personally, as well, I’m not that big on interviews. It’s not something that I wouldn’t pay more money just for the interviews. But we were talking about very fast ways to set that second tier. So that’s a good way to create additional content that’s not a pain in the butt for you guys that you can then anchor that lower priced with the higher priced. Because tiered pricing isn’t just about providing more value. It’s also about making th lower priced product, or the lower-priced tier seem more valuable. If I have a $50 e-book, and then I say – and then the gold version is $500, that $50 looks like a huge deal, where normally, I wouldn’t pay $50 on an e-book. But pricing it like that makes it seem like – ok, it’s like when you go car shopping or god forbid, if you’re building a house like when I did, at some point during the process, you’re like ‘thousand dollars? We’re like close hanger rails on the balcony? Yeah, that’s cheap. Thousand, just a thousand dollars?’ But if you ask me now, you pay a thousand dollars for these clothes hangers, I have literally not even once used, I’d be like ‘no way’.

Weddings is best example of that? [Crosstalk] All the prices are through the roof, so – it’s like everybody’s price hankering each other. It’s like they got together and agreed.

It’s $500 for a single bouquet. That’s totally reasonable.

A mediocre jam band? That’s definitely worth $5,000. [Laughter]

So I have to ask, though, with the interviews, I could see some of the people I might want to interview for some of my books saying ‘yeah, well, if you’re going to sell it, I want a piece of the action’, or saying ‘I’m not really comfortable doing an interview if you’re going to make it part of your paid package’.

I’ve seen both sides of it. I haven’t had much pushback on the people I’ve asked. They’ve generally been happy to have me on, especially for sometimes quid pro quo where I would be on their product as well or I do an interview with them. Now, I have had – I do know some people that won’t do an interview unless you’re an affiliate or they get some of the money, and you know what, sure, why not? Say, ok, you do that, I’ll set you up as an affiliate, any traffic you bring that makes money, I’ll give you just whatever number you normally give plus X percent.

So let’s say you give 50% to affiliate, you say ‘ok, anyone you bring in, I’ll give you 75% because you were nice enough to do the interview’. And the bonus of that is, yeah, it’s going to cost you more upfront, but now that person’s on your list; they’ve already bought from you. They went from that person’s list to your list. So you’re not paying for the initial sale as much as you’re wanting to pay for the continued relationship with that person, that new lead that you gotten on. [Crosstalk]

I’ve had one other thing that somebody has said to me when I brought up affiliates and that is ‘I have reached with people who have large audiences, so if I tell them to set something up, then I want an affiliate commission on whatever they’re bringing to’.

Yup. Tier one, tier two; yup.

There's one other thing I’d like to add about the tiering, which is that there are certain people who have just completely won me over. So I'm thinking of Allan Weiss or Michael Port, and these people put out content that I’m going to spend as much money with them as I can afford because they consistently make my business better. And if you don’t – if I didn’t make these other options available or these higher tiered things available, even if they're only marginally more beneficial to me or they are maybe not even more beneficial to other people, they wouldn’t be getting my dollars.

Right. Exactly. And that’s something, especially when people – I don’t want to say are in the growing phase, but still – they still have room and they're still kind of hungry. They're going to want to be on different areas and to get that name out there and to build that extra value for people. The more value that they – it’s the 30% fluff thing. The more value and the more personality that you're putting out there, the more people are going to connect with you.

I believe that’s a hundred percent true. I think it’s super important. It’s like there's nothing new under the sun – the internet’s proved that on the web, anyway. And it’s really all about – or it’s not all about, but it’s a lot about the quality needs to be there; you need to know what you're talking about to a certain extent, but even just curating the content for a particular market, or I love Philip’s take on it is sort of localizing the content for a particular audience is super valuable.

Oh yeah.

I find – the localization; there's two things – and I think they are very connected – that really prove value to people and why people are willing to spend more money on a product. The one is custom content towards them; things that are targeted specifically to my used case are much more valuable than the generic used case. There's a great example of a lawyer who had started selling the documents you need to start your first business. It’s all the legal documents, incorporation documents, information how to get sales report because it was the generic case. So he got the bright idea, we’ll just make up a ton of landing pages made for specific used cases. So how to get your dentistry up and running; all the documents you need to be an internet programmer – everything you need specific to your used case. The documents aren’t that different. You just change the vocationing. But the sales page – it was targeted specifically to them.

Yeah. Michael Gerber did this with the E-Myth. It’s like E-Myth for dentists, E-Myth for architects, EMyth for chiropractors, and on and on and on. And I don’t think that’s just – I want to say marketing move in a bad way –

It’s not a gimmick.

It’s not a gimmick. Thank you. That's exactly what I – [crosstalk].

No it’s not a gimmick because there are things – I read the E-Myth, the original one and it was interesting because there were things that were very specific to my used case and I was like ‘yeah, I can totally use this’. And then there were things that was like ‘this has nothing to do with the way business is done anymore’. And I could’ve done without those parts, and I could’ve done without – I would’ve wanted something more tailored towards me.

And that’s the second part of that, which I also think is interesting, is that there is a cost performance benefit to everything. What I mean by that is if a product saves me time in achieving my goals, I am willing to pay more for it. So let’s go back to Nathan Barry’s product to your example where the lowest tier which was the e-book. So he teaches people how to be designer now; he is teaching people about authority and positioning, but originally, it was all about being a designer designing web apps – that kind of stuff.

And so the first product was this e-book and it talks about how he designed a web app and it walks you through the steps and the theories and everything. The second tier of that product included the Photoshop files and the templates that he used. So what he is essentially saying is ‘yeah, you can read through this and recreate all this and do it all yourself, but if you really want to jump in on this, have the same tools that I have that makes your productivity so much better, pay me an extra $150 or whatever it was and you get the tools too’.

And so that sets up a really interesting dichotomy between his audience. So the people who have more time than money are, of course, going to choose the lower one because they can reproduce the tools of what's in the book, it just takes them more time. They're paying with time. People who are in a business and who are making money and, to be honest, are going to be better customers, are willing to spend more to get started faster, to achieve their goals faster. And that’s really the core of this tiered pricing is. How can I get people to achieve their goals faster?

So there's a critical thing there that might not be obvious to people, which is that there could be people in your audience, especially if you're starting out, who have way more money than time even though that might not be the case in your particular situation. So to go back to the comments about Reuven, you are not your audience. It could be that something that you cannot believe somebody would spend money on, but does give them some value is a no-brainer; purchase for them. So why not offer it? Like if you’ve got the time to put together – let’s just use the interviews example – if you have the time and connections to put together a series of interviews to bundle on with the e-book, never mind the fact that you’d think no one would ever pay for that because you're probably wrong.

I’m probably demonstrably wrong because [chuckles] people got it. I don’t think all these people who are successful at marketing their online e-books would all be doing something so dumb if they weren’t making the money, especially since these are people to whom I paid to learn how to make money.

Here’s another interesting way to do that that goes specifically to the ‘how do we get more value. How do we save time for our customers?’ If the interviewers, if the interviewees that you're bringing on to the podcast have SaaS products, maybe they own a tool that works well with your audience and makes them more productive, get a discount. Say ‘ok, anyone who buys this master class, you get a coupon and you get 30% off the first year’ or ‘you get 30% off for life’.

And bundles 7 or 8 of those together suddenly have a value of like $10,000 that you're going to get off if you use all these tools, and you say ‘and now, just for $500 extra’. So that’s a great way – so we are talking about making people successful people faster, but not doing a lot of extra work; that’s a great way to do it is to get other people’s systems and stuff in there as a tool that you're then able to offer discount on. And most people are pretty happy to do that.

In fact, most SaaS companies or even information products, they have affiliate discounts. And you just say ‘instead of just giving that affiliate payment to me, the 50% or the 30% of whatever it is, just make it a discount for my audience’. And most people will be happy to do that because they are going to get your audience into their product, and they don’t have to pay the affiliate. So they still are, but they don’t have to pay any extra; it would be exactly the same as it you sent them a customer, but there's a much higher value and they're probably going to get more signups from it.

Yeah. I was going to say most of the service providers that I've talked to over the course of podcasting for 7 or 8 years, they're delighted to pay for a sponsorship and give a discount out because they get that kind of traction from the people that are coming their way because it’s coming from an authoritative source.

And so if you are doing this with your book or course or whatever it is that you're putting out there, and you're telling people ‘hey, and you get a discount on this service’, they will take that as an endorsement and they will go and they will sign up. And then these people get reoccurring revenue or whatever it from whatever it is that you just sold them and a lot will do it for free.

Right. Exactly. It’s a great win-win for everyone. It’s a win for you because you're going to get great content that ups the price of your course, it’s a great win for the students because they get a discount they normally won’t get, and it’s a great win for your partners because they get higher reach or wider reach and are able to get new customers on their end.

So Keith, I've got another bottom-line question. What are the – it sounds immensely appealing in every way, what are the unexpected kind of icebergs that I or anybody else who need to look out for if they wanted to start implementing, building a course or implementing tiered pricing for a product?

The tiered pricing, I think, there's not many gotchas. The biggest gotcha you're going to have is trying to figure out what that content is, and that’s what we’ve talked about. The biggest gotcha, I think, is refunds because this is something that is not often talked about at all. And that is that info products have a very high refund and chargeback rate. And this is not as much as a problem when you're just starting, but most people think ‘oh, I've got the money. No one’s going to ever get it back; it’s mine now’, but that’s not the case. A refund or a chargeback, which is when someone leaves their credit card company and the credit card company says ‘oh, you're right. I’m going to take that money back’. And that can be levied up to a year after they purchase. So there's a reason that you see all these 365-day satisfaction guaranteed things; it’s because they don’t want a charge back.

Oh, how interesting.

Because a charge back not only hurts your credit rating – or not your credit rating, but your businesses merchant processing fees. It also cost you money. So stripe as the cheapest at $25 per charge back, but some of them be very expensive to have a chargeback.

Oh, so that’s just the table stakes of doing this endeavor is dealing with a certain amount of that.

Yes. And as your list grows, that number’s going to grow as well. If you have a small list, you're probably not going to have many, but it’s one of those gotchas that you have to be very aware of. You have to be – and this goes into something interesting – you have to be in communication with your students.

One of the things that I see a lot of is people will have this beautiful sales funnel, this warming funnel like be able to get people from an ad to buy this expensive product, and then you deliver the product and then you never hear from them again except for other sales emails or broadcast. And that’s a horrible way to treat a customer. And yeah, that’s horrible, but the other horrible part is if people, if your students and your customers feel like they’ve been dropped, they're going to refund, or in the worst case, they're going to do a chargeback.

So a lot of people don’t realize that the after-support of a customer is infinitely more important than the initial sales to the customer, and I could go on for hours on that as well. That’s a whole other topic about why you would want to do that, but it’s very important, and something that a lot of people don’t realize.

I am curious to hear about that. You're saying someone buys an info product online, are you saying that personal individual communication with them is important? Are you saying that putting them on an email list is important, are you saying that auto-responders, all automated will also –.

Yeah. Automated – just to make people feel like you haven’t dumped them because – especially if you're doing a launch or you're doing a good sales funnel, you’ve been emailing them generally 2-3 times a week. And 2-3 times a week, they're used to hearing from you, they purchase and then you don’t hear anything for 3 weeks, it’s like the girlfriend that doesn’t call you back [laughter]. It’s not a good feeling.

And there's two important things there. One is that you want people to feel supported after they purchase. You want them to feel like more than just a paycheck to you. And this is important because your existing customer base is your most valuable asset. Your list is very important; your audience is very important. It’s even more important to have people who are willing to spend money on you because they're the people who really believe in you. They're the people who, if treated well, are going to buy more courses when you release them. They're the people who are going to tell other people that your courses are amazing. How is anyone going to know if your course is amazing or not if they haven’t purchased it and didn’t have a good experience? There’s parts of your course, and there's the value of the course that you can’t fully express through a sales email or through a sales page. And that conversation, that recommendation, from someone who has gone through the course, the testimonials, the ‘hey, I told my mom and it was great’ or ‘I recommend it to all my friends’, that’s where you're going to grow your business.

Yeah. I think Jonathan and I are the Allan Weiss fan club representation here. Allan Weiss talks about you don’t think about the first sale; you need to be thinking about the – I don’t know – 5th or 7th sale to that client.; just thinking in terms of long term relationships and it’s interesting to see how that carries over to the product world.

There's an interesting stat that – I have to find it, but it was – I think it was Bain and Company released it, but 70% of people who had a referral from a trusted source went out to purchase. I think that was the stat. It’s a huge number. Having a referral from a trusted source, a friend, someone you know, it’s so much more valuable than any type of sales page you can put up. So treating your customers well and making sure they have a great experience, and doing that follow up is so important to growing, especially when you're small.

We were talking about communicating with your students and you said an automated sequence. Yeah, automated sequences are good. If you only have 20 customers, email them. Email them and ask for a response directly and say ‘hey, I saw you were doing this in the course. What do you think? What can I help you out with?’

We just released this software product Sigmetrics I think 6 months ago now, and my cofounder and I agreed up to the first 200 customers, we go and we talk to every single person. Every single person, we reach out specifically and we say ‘hey, do you want to get on a Skype call? I would love to talk about what you’re doing’.

Awesome, well I hate to be the party poorer, but I’ve got enough podcast coming up so I've got to – [laughter] – I’ve got to drive this thing to the picks. But this has been really helpful. If people want to know more, what are the best ways for them to follow up with you, Keith?

So following up with me, go to my website at keithperhac.com. And it’s actually pretty simple; I’m the only Keith Perhac in the world, apparently. So if you just search for Keith Perhac, you will definitely find me, even things I don’t want you to find. [Laughter]

What happens on Face-book stays on Face-book.

Exactly. I still have posts from rpg.net forums back when I started my first company 20 something years ago. And you search for my name and they still show up.

Wow.

I've been steadily pushing them down. They used to be first page results. And so I've been pushing them down, and now they’re page 20 or something like that.

Oh. We’ll have to do DND at MicroConf this year.

That would be awesome. I wonder how many people at MicroConf are avid or recluse DND players, so that would be fun.

I haven’t played since high school, but it’s fun just to kind of hang and do something –.

Recovering addict here, for sure.

Yup, fresh off the [inaudible]. That sounded much worst. I don’t know what to do. [Laughter]

Chaotic neutral ranger, baby.

Alright. I thing I was always half [inaudible] was my go to. Oh my God.

Now my nerve credit’s gone. I don’t remember. [Laughter]

Thank you so much for having me on. It was great talking with everyone.

Yeah, well, we’re going to do picks, and then we’ll wrap up the show.

Sounds good.

Do you have some picks for us?

Yeah. So what I’m reading right now, Work the System by, I believe, Sam Carpenter is the name; really enjoying that right now. Sean D’Souza’s Brain Audit; really loving that. And Hooked by Nir Eyal has been freaking amazing.

As far as tools that changed the way I do business, we talked about Skype, but also meetme.so, which I think is called Scheduled Once or something like that. Essentially, any automated scheduling software has just revolutionized my business. It saves me literally hundreds of hours a month.

Very cool. Jonathan, what are your picks?

My first pick, I think, has been picked before, but I just started using it, and I can throw on the big pile and say that it’s really working for me anyway, which is Meet Edgar. We had – I’m sorry I can’t remember her name – Laura, thank you. She came on and did a really interesting talk, or we had an interesting conversation on the show, and I was convinced to try it even though I have my own home grown solution. I had Google Calendar events getting mapped into Zapier, which then posted on Twitter, blah blah blah. It worked, but now that I have an Edgar account, it is dramatically easier and I’m seeing an immediate increase in the number of followers I have which is my goal. So I can correlate those two things closely. So I would say that it’s definitely worth the money for people who are trying to increase their followers on social media. So that’s really nice.

And the other thing that I’m going to recommend is a book called the Face-book Ads Manual by Mojca Mars, which – I find Face-book ads super intriguing, but I’m a little bit overwhelmed with learning everything about it and how to get started and I tend to just never do anything about it. And if you’ve ever done Google ads in the past, Face-book ads are way, way, way more targeted and, I think, more beneficial for people who are in a tightly focused niche probably anybody listening to this show. So I highly recommend her book on Face-book ads and how to get started with those and sort of pros and cons and all of that. And it’s available on Gumroad for the low, low price of $19. So since we’re talking about e-books, I figured I’d talk about an e-book. And that’s all I got.

Awesome. Philip, what are your picks?

I’m going to start with something called Blab. The URL: blab.im. I have been casting about for a solution to doing an ask-me-anything style webinar. It’s something I want to start experimenting with for my own business, primarily to create a two way conversation with the audience that I’m building around positioning, and secondarily to get more list subscribers. Blab is not really as good for that second purpose, but for the first purpose, it’s really interesting. It’s got some sort of interaction design choices that are different than anything else I’ve seen. It’s a lot easier to get going than any other – it’s not a webinar solution per se. It lets you do up to a four way video chat. And what’s interesting is that the general public can pop in very easily. And if you have less than four seats occupied, anyone in the audience with your permission can take one of the unoccupied seats and join in the conversation real time, which I think is super interesting for doing something like once a month, I’m going to email my list and say ‘hey, at this time and date, join me on this Blab channel’. You can set it up ahead of time and just ask anything you want about the subject that I’m an expert in. So I’m very fascinated with what they’ve done and before they’re trying it out, and that’s blab.im.

I have a second pick that I’m just going to keep under my hat until next week. So folks better tune in for that. I don’t want to make Chuck late his next appointment.

Alright. Reuven, what are your picks?

Ok so, I’ve got two picks for this week. First of all, friends of the show Kurt Elster and Kai Davis have a new product that I was one of the first people to try out. They had – the way to describe it is – how did they say it? Oh, here we go. It’s best to think of your anonymous visitors to your website as drank sociopaths in a hurry. And with relation – with treating your costumers like that, what could possibly go wrong? In any event, they do website teardowns now and I have them do it on my book – my e-book site – and it was just marvelous, interesting, insightful, quick and totally, totally, totally worth every penny I paid, which was not that much given the value I got out of it. So I really strongly recommend. If people have either an e-commerce site that isn’t performing well or that you like to get insights into how they can perform better, I definitely recommend talking to these guys and seeing what they can do for you. So that’s pick number one.

Pick number two is very short and not business related, but I recently decided to try something that turns out many, many, many other people have tried, which is putting tabasco on popcorn. Oh my God, it is so good. [Laughter] It is like this is the best ever. So you should try if you like spiced seafood and popcorn because they go well together. Those are my picks for this week.

Very nice. Alright, I had a really great weekend this weekend and so I’m just going to pick a couple of things there. Mostly, it’s about spending time with your family. Just make some time and go do it. I tried to set aside my Saturdays to do it. I wound up taking my kids to the zoo on Saturday, and that’s just way fun. So I’m going to pick that – trick or treating was fun too.

I’m also going to pick – if you want to connect with me on social media, feel free to do that. I’ll put links to all that in the show notes, just because that’s important to me. And finally, I know the show goes down in two weeks from when we’re recording this, I’m hoping to have the website up for Freelance Remote Conf. So if you’re interested in a conference for freelancers about freelancing, I’m hoping to have quite a few folks that we’ve had on the show and at least the majority of our current and past hosts. So if you’re interested in that, then go check it out at freelanceremoteconf.com. It is going to be a part of a larger remote conference series, and you can see all of the shows that I’m putting out at allremoteconfs.com, and I’ll just throw that out there as some kind of shameless self-promotion. Yeah. And plus one on the Edgar pick because I really dig it.

And I don’t think that there’s anything else that we need to go over before we wrap up, so thanks for coming, Keith.

Thank you guys for having me.

Hope to see you at MicroConf next year.

Yeah, looking forward to it. There's a 50% chance I’ll be there. So, we’ll see.

Alright, we’ll wrap up the show and we’ll catch you all next week.