Today on the More Cheese Less Whiskers podcast we're talking with Stephanie Taylor from Arizona where she owns Twisted Yoga. She's a friend of Joe Polish who makes a special guest appearance, and we had a really interesting conversation, looking for opportunities to apply the 8 Profit Activators.
Stephanie was very open and willing to share everything that's going on. She's been in business for almost a year and has done a great job of building her business on the strength of some facebook advertising just after she opened, and again at the end of the year here.
But as you'll hear, there's a major difference in what happened the first three months compared to the last three months, and that's where one of the biggest lessons is.
She's built an asset in her list of potential clients that will have an ongoing yield year after year after year, and the great thing about something like a yoga studio is the whole point of the business is to build up a recurring clientele that returns month after month.
We talked a lot about some strategies to achieve this and it was great to have Joe on the call to share his perspective.
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Transcript - More Cheese Less Whiskers 128
Dean: Hello? Stephanie Taylor?
Stephanie: Hello.
Dean: Hello, Stephanie.
Stephanie: Hi, how are you?
Dean: I'm so good. How are you?
Stephanie: I'm doing well, thank you.
Dean: Tell me what's been going on. I got your-
Joe: Hey Dean.
Dean: The ad spend sent over. Hey Joe, we already started without you.
Joe: Well, you should have.
Dean: It's Joe Polish everybody.
Joe: Are you actually kidding or you already started?
Dean: Yeah, we already started supervising today.
Joe: Well, good. This is going to sound fantastic.
Dean: It really is. It's perfect.
Joe: Hello Stephanie. Now, that I'm here, the action has begun.
Stephanie: Hey Joe.
Dean: Joe's supervising today. We're going to get to the bottom of it.
Joe: So you've officially started. And how did you do the intro?
Dean: I do the intro after, so we're just recording all the content here.
Joe: Show me in. Where are we at?
Dean: We're at the point where Stephanie is going to explain what's going on.
Stephanie: All right. So what's going on. I opened Twisted Yoga Studios in January of this year, so I'm about to hit my one year anniversary of being open. The studio itself specializes in aerial yoga, however, we offer multiple different formats of yoga. And that's all we have, is yoga. We don't do anything else besides that. In the beginning, I hired a third party marketing company that I'd used previously. I have managed Yoga studios for the last couple of years before taking the jump to open up my own. And they ran my Facebook ads for the first three months of opening. So they started in December and January, and then again in February running my ads.
And they brought in from that, it was almost, I think I had just shy of 2,000 leads that came from them, and we offered a free class or a free five day path. That was the incentive to get the leads. Once we got all that information, then I started doing my end of everything, and did my follow up calls, my texts, my emails, all of that fun stuff. And from just that lead campaign, I was able to then sustain all summer long. So once I worked with that company, shut down within after three months, I just used that lead list to pull me into the summer and everything else.
Then at that point in time, I'm passively marketing. I know I wasn't aggressively marketing as I was in the beginning. That was a little bit of a mistake on my end. Now, the other thing that happened is the second that I stopped working with this third party company, they pulled all my SEO that they had been working on, everything, my landing pages, all of that wasn't built into my website, it was built into theirs. So, all of that money and everything else, we time that we built, building this all up, it just all went away the second bet I stopped working with them.
So that was another lesson learned.
Dean: So the 2,000 leads that you got, you have an email list of 2,000 now or do you have more?
Stephanie: Yeah.
Dean: Okay, good. How much did it cost per subscriber for you to get that?
Stephanie: Oh, that's a really good question. I was spending within 1,950 per month, and that's including my ad spend. So if you look at that, I spent 1915, forgive me, I'm getting a calculator out real quick.
Dean: So 6,000 through the three months with them you said?
Stephanie: Yep. So just 6,000 and then if we divide that by the 2,000 per lead. I'm looking at spending about $2 and 92, 93 cents per lead.
Dean: Right. Perfect. So the way I look at this as I'm looking at the backwards from the assets that you already have. You started from a running start. This is how you built it, was with the Facebook ads, and you got that 2,000 people. Now, if we take your after unit, meaning the people who are your regular returning member. Do you have a monthly membership or is it a just pay as you go classes or how do people engage with you?
Stephanie: Both ways. I do offer a monthly membership as well as I offer class pack.
Dean: Here's the way we want to look at it. If I'm overlaying this before, during, and after model on this, a look at the revenues. You're coming up now on one year, you said you started in January. If you look at this now, how much of the revenue that you get is recurring that people are ongoing members? How many ongoing members do you have right now?
Stephanie: Ongoing members, ones that actually have memberships with the studio, I have about 30 that do that. And so I have consistently, I have reoccurring revenue that I know is coming in of $3,000.
Dean: And so they pay $100 a month?
Stephanie: Roughly, yes.
Dean: And how long do they stay? Is that something that people start up and then stop? Or are they, once they're in, they're in?
Stephanie: Once I can convert them into a membership, they're kind of in. I have actually had people that have been with me this whole entire year, which is beautiful. That membership part is another area of struggling for me.
Dean: And this is the way that I want you to think about this, is that this spend that you're doing on acquiring the leads, acquiring that email list, all of the revenue that you've generated. What's the total revenue for the year now that you will have generated?
Stephanie: I'm just shy of $51,000 for the year.
Dean: And the majority of that came from the 2,000 people that are on your list? That's how it all-
Stephanie: That's right.
Dean: When you look at it that that asset that you've developed there is the 2,000 person list of people who are already yoga interested, at least, you're going into year two here now with that as an advantage, you've got those 2,000 people already, and you've got 30 people that are already paying you $100 a month. And you've got now, I'm sure, some of that 2,000 that just come and buy class packs. Do you have regular buyers of the class packs? How many people would be in that category?
Stephanie: Yes. So in total I have a reoccurring clientele base of 75, so I have another 45 that will pop in and out buying class pack.
Dean: That's so perfect. So good for you. That's really great effort first year.
Stephanie: Thank you.
Dean: Now, when we look at it, another element that I want to look at in your after unit is, how many of those people refer somebody to bring in somebody else?
Stephanie: I've been struggling with the referral element of it quite a bit. I'll be honest with that. It's more of a focus for me the last month than it has been previously. For the last month, I've brought in 10 referrals, which is great. And I typically offer, like if you refer a friend, I'll give them their first class for free.
Dean: That's perfect.
Stephanie: Things like that to get them in.
Dean: And that's such a great crystal clean offer, is the first class because there's something. Nobody's going to come just for one class. You're looking for the person who's going to come and buy a class pack, and then really decide, "I should become a member and just join per month." All the equity, the long term growth is looking to, it would be a dream if you had. What's your capacity? How many members, if you had just monthly members, how many do you think you could sustain?
Stephanie: My goal with all of this is to have 300. I would love to have 300 active members.
Dean: So that'd be 300 members, $100 a month, $30,000 a month. That's where we're headed, right?
Stephanie: Right.
Dean: And your facility, your current size would accommodate that?
Stephanie: It does.
Dean: I think that this real thing that we want to look at is measuring and establishing how many of the people that are, and I would say when we're first looking at overlaying things and making the lines for where the before unit ends, and where the during unit ends, and where your after unit is. For you, because you have this recurring thing, I would think that somebody beyond their first 30 days, I would treat somebody's first 30 days as the during unit, and then ultimately everything after that is in the after unit. And so the goal is to look at your after unit as this portfolio of all of the people who have come more than once to see you.
The progression might be that they come for a free class, then they come. Do people come and pay for individual classes periodically?
Stephanie: They can.
Dean: And does that happen a lot or do people typically buy a class pack?
Stephanie: My individual class is like a drop in, a single class is perfectly priced at a high point, in case you want to buy a class pack as opposed to just the drop in. I do have people that come in and they will pay the drop in fee, but most of the time, they see, "Oh hey, I can get a five class pack and that's way more financially feasible for me."
Dean: Good. How many different class pack offers do you have? You can buy five-
Stephanie: This is something new and interesting too, is that I've changed my pricing structure three times this whole entire year. In the beginning, I offered a whole bunch of different class pack options. You could buy five, you could 10, you could buy 20, you could 30, and that model wasn't working for me, so then I dropped it down to you could buy five or 10. Now I'm at the place where I just offer 10 class packs on a regular basis, and then I use my five class pack as like a Black Friday, a Christmas feel. Like at special event, I'll offer five class packs.
Dean: Okay, perfect. And how regularly do the members come? What would be, if you've got 75 people that are recurring, is it something that they come once a week or three times a week or every day?
Stephanie: So majority of my clientele comes twice a week.
Dean: Two times a week. Got It. So a 10 pack would take somebody beyond a month kind of thing?
Stephanie: Mm-hmm (affirmative).
Dean: And how does that price out compared to a membership?
Stephanie: So a membership, a monthly membership is $129 per month, it's unlimited classes. A 10 pack at $180. So again, it's priced at a point where you would rather buy the $129 if you're going to be coming back frequently.
Dean: That's great. Do you have a CRM or a system that you use to keep everybody in place, or how do you keep your...?
Stephanie: I do.
Dean: GO ahead. What do you use?
Stephanie: I use MINDBODY software.
Dean: So that's specifically for yoga studios?
Stephanie: Yeah, it's like a boutique fitness, and they can do like spas and stuff.
Dean: Great. And do you have the capability to categorize people like to say this is a after unit, so you could get a sense of this at any given time where you could isolate and say, "This is the number of members and active 10 pack buyers." Because right now, you said there's 75. Is that a number that you have pegged as KPI that you track?
Stephanie: It is. MINDBODY allows you to pull reports into Excel. I run Excel reports, and that's how I do my retention and looking at my monthly figures, and of course, what people do I need to target now moving forward.
Dean: That's great, because if I look at this, the majority of your revenue, of the 51, is going to have come from people who are these sustaining members like you're looking at here, so everything is about moving people into that orbit there. And if we were able to do exactly the same thing that you did this year, if you could get another 2,000 subscribers and you get another. if they just behaved in exactly the same way that they behaved this year, you've essentially more than doubled your business because you've got all the sustaining people coming into the year, you're starting out with this advantage of 75 people.
And that's why looking at this, before we even get into the Facebook ads is, I want you to have a sense of what is actually happening here. And the thing that I try and get people to do is get out of the expense-based mindset of advertising, and looking for it to say they're judging the success of it by just the event. Like, "I ran the ads, I got this many," they track all of the stuff, like I see, dutifully, you've got all the things and we got this many impressions, and this many clicks and this many people opted in. So you know all the stuff.
But then the measurement is that this many people came in and took a class or did the thing, but it was almost looking at the conversion of just their first purchase rather than looking at, if we either take the bottom line of this, is that you spent $6,000 and that $6,000 ultimately turned into $51,000 over the course of the year. So it was an investment in that. Now, the 2,000 people that you already have, how often do you communicate with them?
Stephanie: My communications firm, my people, my whole entire contact list, I guess, is I try to do two monthly emails, and then on top of that I do follow up if you haven't been in in a while. The MINDBODY will automatically send out emails to people that are 90 days without a class, and then they get removed from their last class, and then they do it again the following four weeks from that. So I have those things triggered to set up. Than weekly, I pull reports and I say, "Okay, these are the people that haven't been in a while. I haven't heard from them in a while," and then I make calls.
So at that point in time, I'll make calls and I'll make text messages and emails as well that are personalized exactly for me.
Dean: Those are two people who've dropped off from the after.
Stephanie: Yeah. And I continued to do that until they tell me like, "Oh, hey, this isn't going to work out and I want to be removed from this." Or, "Yes, I want to come in."
Dean: Or, we moved or whatever, for whatever reason. Do you have a sense of how many, if you have 30 members and 75 people with active a multi class packs right now, how many people have been members over the course of the year? Like in addition to that 30 that started and then are no longer members.
Stephanie: I don't have a specific number. It's a really, really great question because there are quite a few. So it's not a tiny number. I would think, I'd be honest with you, I think it would be even close to the 30 people that are active right now.
Dean: That's good to know, to get a sense of what the sustainability is, how long they stay, and then what's really an important thing is to look at how are they multiplying themselves. That's another wildcard that really is almost free because your incremental cost to have somebody sit in on a class that has excess capacity, like if your goal is to get the 300 and you're really at, let's call it 100 now, if you treat like the multi-pack people as they could pop in on any class, that you're about one third of capacity of what you could do. Does that feel about right?
Stephanie: It does.
Dean: So that means that one of the assets that you have is this unused capacity for free, basically. It doesn't cost you anything for somebody to do it, that's why I always love whenever possible to offer a free class as the first thing that people can do with you because that will get you a multiple of the people who will pay any amount of money for that first experience with you whether you're incentivizing them with like a discount or a buy one, get one. If there's any money exchanging hands, it's going to be outperformed by a free class. There's zero friction on that. And the way that you do that, you look at those as you’re really cool way to put a currency on it for you.
Because right now, there's two ways to look at it. I was talking about, there was a guy Gamal Aziz who was the guy that was the general manager of the MGM Grand Hotel. When he would come into the hotel, he would look at all the things, all the elements that they were doing, whether it was retail or restaurants or gaming or entertainment or the hotel rooms and conferences. All of those elements. He would look at it, and he'd say, "How much could we be doing here? Like how high is high, and what are we doing?" And then he would consider that gap as a loss.
So, if I said to you right now, you're generating this $3,000 a month and you're saying that $30,000 a month is what the capacity is. In a lot of ways, he would look at this that right now you're losing $27,000 a month by not having it at capacity. So it gets you to realize that there's empty mat space in your studio when a class is going on is like an unused hotel room. As soon as that class is over, its value is nothing. The moment that class starts, if you haven't got somebody who's either paying to be in that class or taking that class with a potential of joining a future class, it's a loss in a way.
So I looked at it that I've really discovered that sometimes it's less expensive to get somebody a result than it is to convince them to give you money to get the result or experience. So it's sometimes easier for sure and less expensive to get somebody to come in and try a free class than to give you money to try that free class. And it's not saying that it's not worth it because it is, and you're revering that it is. But to have that and treat it like a currency that you have.
So when you said, remind me how much the individual classes are.
Stephanie: $25 for a drop in.
Dean: $25 for a drop in. One of the things that I might look at doing for you is to offer somebody a $50 gift card. Now, there's a different thing with this then because that $50, somebody could put it towards their first month for $129 or they could come for two classes, whatever it is. That you've got something that they have that is zero obligation on their part. But you're revering it as the actual currency of what you're doing. You're not just saying, "Come for a free class," you're offering somebody a $25 gift card. And that has real value because that is something that somebody can download as a, it's almost like a bookmark on a future intention.
Even if over the holidays they're not going to come in this month for a class, they've got something in the new year, they can come in for that class. When you offer somebody like 20% off or 50% off or buy one, get one or any of those things where they're paying money in order to get the savings, that means the only way that they can respond to that is to do it right now, where sometimes the best thing you can do is to gather all of the people in your geographic circle there. How far are you targeting when you're doing the Facebook ads? How big a radius around your studio?
Stephanie: We're doing the five to 10 mile radius.
Dean: Okay, perfect. And that makes sense. So for people who, because nobody's going to come much beyond that, so when you look at it that that's your thing. And they may come to you, they may come specifically because you have aerial yoga, which maybe is different than any of the other places around. Maybe that's a special thing that you have, but it sounds like a specialty kind of thing too where, when you're going into aerial yoga, that sounds like a specialty thing, but it also may feel like a novelty thing, that maybe they would come and try that one time. And then not realize that, "Oh, they've got traditional yoga too." How much of the classes that you do are aerial versus traditional yoga?
Stephanie: Right now it's actually even. They're 50/50. Half traditional and half aerial .
Dean: And is that more of an advanced thing, the aerial?
Stephanie: Not the way that I teach it, but to the way that it's known out in the public right now is it's very advanced. So I've created a whole entire program around it, and a philosophy in the way that I teach it and has branded that as so. But educating people about my brand and what I do and how different I do things has been a struggle too.
Dean: How does that Joe Polish look what he's flying through the air in that aerial yoga?
Stephanie: He has got like videos of it and some pictures of it. I'm sure he'd be willing to share.
Joe: You know what, I look very graceful and beautiful, Dean.
Dean: That's just every day, all day.
Joe: No, no. Here's the thing though, and I'm just sitting there listening because there's some really great knowledge and information and numbers and stats and behavioral things being fleshed out here. I've got a whole slew of notes just sitting here listening. And so I like you going down this line of questions. One of the things that I think of, and I'd like to get your take on this. From aerial yoga, I think there's an element of it that is intriguing. It's like, "Oh, let me try this." And also I think there's a part of it that could scare some people or, so much of the association with it is, "Well, I've never done that before so I'm going to default to what seems to be less threatening or easy."
Because the question becomes, out of all these people that are signing up for your studio, Stephanie, like how many of them belong to other studios? How many of them are real yogis that are advanced in aerial as like the next thing they're going to do. Or is it people that are just really starting a new exercise program and a new fitness program, and a new spiritual program. Whatever genre that they're in. Because finding the avatar of who is the ideal client is important here. And I often thought for Stephanie that it may be more advantageous to get people in without aerial yoga and then reduce it to them while they're there versus have it be seen as an aerial yoga studio.
Dean: Yeah, that's where I was going with that, was to see that that may be perceived. I've never heard of aerial yoga and so that may be perceived as a specialty thing that somebody might be reluctant for that, but if they knew they were coming for traditional yoga and then, "Wow, we could do this as well." That's a surprise and delight in a lot of ways. And you can test these, it's easy to know one way or the other what's appealing to people.
Joe: Yeah. And let me mention something also, because like right down the street, and when I say write down the street, it miles away is the only acro yoga studio, I think in the country. And so that's where people, if you could imagine just flipping people around on their-
Dean: We will have to do that next time I come. You could flip me around.
Joe: That would be very, anyway, I might snap if I tried to do it with you, but that would be interesting. Here's the thing, so you take like Tim Ferris, like the guy that trained at Tim in Acro Yoga, I've also worked with the guy. He's been down to the studio and whatnot. And so, there's a very interesting thing with college students and different people around there, there is the right combination for Stephanie, and it's just a matter of figuring out what that is. And I want to say something, then I'll shut up and let you go through the series of questioning.
What Dean was saying earlier about it, it's less expensive to create a result for someone than it is to convince them to sign up. And I learned that through my carpet cleaning business back in literally 1992 where I started using a free room of carpet cleaning, no cost or obligation of any kind. I had it packaged with a way to demonstrate my services in the home, and I would give them a carpet audit because I looked at what is everyone else doing. And I remember the term of look at what everyone else is doing in any particular category or industry, do the exact opposite and you're more likely to have success than try to follow everyone else.
And so everyone in service businesses would offer free estimates or free quotes, and I didn't want to just do a free estimate because then you become a free advisor. I was like, "Let me just give the service for free, not the, we're going to show up and give you a quote of an estimate and then we're going to try to convince you why you should do business with us. What if we just gave them a taste of what it is that we were offering?" And I made more money giving away a single free room of carpet cleaning than I ever did price discounting my services, and I became one of the most expensive but also highest value cleaning companies at the time.
And I was a small operation, but then I started teaching it to other carpet cleaners, and then literally it's generated hundreds of millions of dollars for cleaning and restoration companies all over the world using a free room of carpet cleaning. To this day, it's still, with the over 10,000 cleaning companies that became members of my organization, it still is one of the main things that the ones that are smart actually do to generate business while you see all of these other companies doing price advertising, price discounting, bait and switch, all kinds of stuff.
And this is like free room of carpet cleaning. We're going to do a carpet audit, if you do decide to get additional services, it comes with 100% money back guarantee. So the theme of what Dean, we'll get into, and I just want to preface this is, how do you make it total friction-free, nonthreatening, so easy for someone to try it and produce a result for them in such a way that reciprocity kicks in, and then they're just going to want to A, sign up, give you money, and refer other people into the group. And not only for people in the before unit, but also once people are doing business with you, how do you instill that behavior because that's ultimately where we want to see all of this going.
And so anyway, I love what speeds smoked out here because it's really important. Part of it is like, "Okay, what's the right offer for her, but also, what should, to the public. The whole saying, you can't see the label when you're inside the jar. Stephanie's standpoint, she's an aerial yoga person, she certifies people in it, she's probably the most skilled person in the valley in this area. Maybe I don't know that 100%, that's really for her to say or know, but ultimately, she lives, eats and breathes aerial yoga, but she knows it. For someone that doesn't, is that an invitation or is it like a fear? That's a lot that I'm trying to figure out. So anyway, so I'll just shut up and let you guys continue.
Stephanie: I have some things to say to all of this too because I've never thought about them as effective, and then both of you are bringing to light some of the things that I've been doing. The first three months that I ran this advertisement, when I first opened, that was my free class unit. And then my video, because we did it as a Facebook video ad that you saw on there was not aerial yoga, was us doing traditional yoga. So there was no idea, we sat on there, "Hey, we can do aerial yoga," but it wasn't like what you saw. And so that's where I got those 2,000 people.
Now, the ads I'm currently running, the ads that I started running in October, November and December, these three ads have all been focused on aerial yoga specifically because it's something that I'm doing that nobody else around me is doing. And we're associating in a cost to it now, so it's like a raffle or winning or whatever, but I wasn't doing the free anymore because of what you mentioned earlier, Dean. I was looking at all the numbers and having like little heart attacks like, "Oh hey, I'm not making the money back in," but I didn't look at the bigger picture of a $6,000 investment and $51,000 gain.
My numbers perspective on it was completely wrong. So here I am, sending out all of these ads right now, they're specific to aerial and the people that are responding to these ads now are people that are coming in because it is a gimmick, and it is a novelty, and it is this, "I want to take one class, but I'm not interested in signing up with you and I don't want a membership because I did this this one time and I checked it off my bucket list, and right now it's on my way."
Dean: Yeah, that's exactly what I was fearing. That's good, that's good learning, that's good to know that you've got that. And that may be something that might be more suited to Groupon or something, that have those experience things that, "Hey, let's go do..." Because that way, people come in a group kind of thing or whatever, but you may find that they don't convert the same way that somebody coming to a traditional yoga class might. That sounds like what you're saying.
Stephanie: Yeah. And my study people that are in my membership right now that are coming twice a week, they're coming to mostly traditional yoga classes, if they can add another class in there, they'll come maybe once a week for aerial yoga. I have one client that comes five days a week and she only takes one aerial yoga class and the rest of them are traditional mat yoga classes.
Dean: So the market is speaking there, telling you what's actually real there, so that's good. Now, how many leads have you generated from that campaign? Have you got more than the 2,000 or is it 2,000 overall?
Stephanie: No, It's 2,000 from the first one. The one that I'm on right now, I'm at 283, but we have done three different campaigns now in the last three months. I did one in October, I did one in November and I did one in December, and in total, 283.
Dean: And how much have you spend for that?
Stephanie: I spend $754 as the cost of the company to do it. And then I pay $30 a day in what I'm doing the month on Facebook.
Dean: So you've spent 3,000, almost 5,000?
Stephanie: Yeah.
Dean: So you spent 5,000 to get 283. Now, there's a great, that's just illustrating exactly the point, that it's roughly somewhere around eight times better. The free class gets more response, about eight times more response than trying to get somebody to pay money right now. So you've just illustrated exactly what I was saying. So that's good knowledge to have, right?
Stephanie: Absolutely. And it's funny that it took having this conversation for it to actually come full circle for me.
Dean: I Can see what I would definitely now even test though, because I'm going to share something with you that maybe even will cut that in half again. Offering the free class, did you say for the month or whatever? Did you have an offer come in any month or a grand opening or was the offer the way you articulated come in for a free class? Was it in this month or up until, whenever? Was there a deadline?
Stephanie: We did it on there, the original ad, we didn't put a deadline on there, but when I would call them, that would be part of my creating urgency at that point, I'd be like, "Hey, this part of the month, let's get you in this week. What's your schedule this week looking like?" And that's where we would go, but it didn't always pan out that they came in, but it allowed me to continue to work with them and not have to have this weird deadline or them say, "Hey, I've missed the deadline, so I'm just not even going to respond to anything."
Dean: So I would look now and test a $50 gift card, and the importance of it being more than, because that's more than one class, they could come in, use the $50 gift card for the dropping rate for one thing, and then they've still got another that they could come for or they'll see that they could come unlimited for the whole month with $50 applied to the 129, or they could use $50 to get a 10th and for 130 kind of thing. If there's something that it's going to be burning a hole in their pocket in a little bit.
They've got money now, they've got this currency that they have. Again, your incremental cost of that for them to redeem it is zero, because it doesn't cost you any more to have this additional person in the class. Or do you have instructors that you pay per person or are you doing all the classes?
Stephanie: I don't teach all of them, I teach majority of them. However, I pay instructors per class right now, so if one person shows up-
Dean: Okay. Perfect. There you go. No difference. And so you've got all this excess capacity here. The most important thing, the most valuable thing that you're going to be able to build is this list of yoga enthusiasts, people who view themselves as, "I would love to come and do this at some point." And we've been doing this with Luba, my girlfriend here in Winter Haven. She has a studio called Amazing Brows and Lashes, and they do microblading and eyelash lifts as a studio. and we've been doing, for over a year now, a grand opening offer of a $100 gift card, and that is getting opt-ins for about $1.5 to $1.6 of people downloading the gift card, which happens to be about, is 20% off of microblading. It's a $500 thing, 20% off is a $100.
But the psychological impact of a $100 gift card versus 20% off, can't even be measured. It's a completely different vibe, but it's the same thing. And so even you saying a free class, is still different than a $50 gift card, because it has currency, it has value. We really value that. And so I think that you would be able to run, and it doesn't even require video. We'll do a very, very simple ad that is just, I call them horse for sale ads, that sometimes the best way to sell a horse, is with the sign that says, "Horse for sale." That sometimes the best way to sell a new yoga studio is to offer people a $50 gift card for this to come in.
And that, I think I would definitely test as a way because the value that you're going to be building there is, it would be really valuable to have this list of people who live within 10 miles of you and are interested in yoga enough that they would download this $50 gift card signaling their future intention of coming in. So that kind of thing. Now, you've got the opportunity then for, all of next year and the year after and the year after to email them because now you've turned invisible prospects into visible prospects. You're advertising, do you do any other selection? Do you do men or women or age or anything specific that you're targeting?
Stephanie: Mostly women. We target women specifically and we target 25 to, I believe it's 45 years of age.
Dean: Perfect. So all the 25 to 45 year old women within 10 miles of your studio who happen to also be on Facebook, is a pretty big audience, I'm sure. And what you're able to do then is they're invisible though, you don't know who they are. Now, when you offer this gift card using, we use lead ads for this, so it's super easy for them and they're so inexpensive on Instagram and Instagram stories, where those kinds of things, the lead ads are super easy because they don't have to go to a website, they don't have to type anything in, they just click and it automatically has their email address and their phone number and their name, all preloaded in the form and they just need to press one button then it sends it.
So there's zero friction in responding to it. What I'd be looking at for that is, "Let's see how low can we get those names and emails for." Then you've got the opportunity each week to bring new people in, with sending out some flagship communication where you can show people videos, you can show people the fun stuff that's going on in the studio. You can give them meditations or some quotes or articles, something that is all related in this whole world kind of thing, but then also invite people to come. Post up your class schedule every week, if they're getting a flagship email from you and having a super signature which will invite them to come in for whatever your classes or to try the aerial, or do you sell mats and branded swag and all that too?
Stephanie: No, I don't. I've been looking to maybe venture into that, but my retail section's really small.
Dean: And you could do that, your eCommerce. That'd be a thing where because now you've got these 2,000, and I'm already thinking ahead to 4,000, you'll have all of those people. You've got an opportunity to do some eCommerce stuff with them too.
Joe: Yeah, exactly. There is a company here that we actually have an episode on. I love marketing with Ian, who owns Spiritual Gangster. They're based here in Arizona, and that's where they started and there's a big following with the local yoga community and then people all over. And not that it even needs to be Spiritual Gangster, but as an example, if there was a Spiritual Gangster retail line or if it was like sign up for a membership or come in and get a free Spiritual Gangster T-shirt, that in and of itself would be an attractive mechanism.
Secondly, with smoothies as an example, or prepackaged juices, that's another thing that would work I think really well there, just for things related to other ways to monetize her thing. Plus, we know that anytime you can add a premium to anything, it's going to bump the response. And so if there was any premium that she could offer people-
Dean: You should have a little like countertops fridge from Juby True or whatever, one of the juice places.
Joe: Exactly. And you know what's funny, I actually have like life aid errands with Genius Network members, Bulletproof, HECK, all of the Bulletproof and Whole Foods is there because I sat, Dave Asprey, the founder of Bulletproof next to John Mackey, the CEO of Whole Foods next to each other when John was speaking in my event, and now, Whole Foods carries all the Bulletproof products and all that started at Genius Network. And we could get Dave to have Bulletproof stuff related to things there, and J. J. Virgin would totally send bars and everything for Stephanie to sell bars. And those are just contacts I have, but this would apply to anybody. And so I think that would be a smart thing, like just walk into the studio and get a free energy bar.
As crazy as that sounds, people, they're not going to drive to a yoga studio just to get an energy bar, there's some semblance of interest or a T-shirt. Some may, but at the end of the day, if you have it set up, once you go there, there's a real incentive. Here's one thing that I've been just reluctant to say, and I wanted to, in real time, Dean, wanted to run this by you, because over the years, we can pummel people with ideas, and it's the whole Emerson thing or whoever said it, "You ask for a new idea when you haven't used the first one that I gave you." And so, Stephanie, after something like this, is going to have a lot of things to think about and then ultimately, determine, "Okay, what can I take care and do something with it?"
And knowing her, she's going to kick ass and take names and she's driven and she's smart and all that stuff. And all that being said, my whole thing is, if you take Peloton bike, I have a Peloton bike. And Peloton, they started about six years ago and they're now a $4 billion company based on funding that they've had, and they have plans on going public next year. And I've been to the Peloton studio in New York, and I've met the instructors, a couple of them that I've taken classes from. For people that don't know, Peloton is like basically a proprietary computer screen on top of a bike and they just launched a $4,000 treadmill.
They've got a $2,000 spin bike and then they have a $4,000 treadmill, and you pay $39 bucks a month to get live stream spin classes. And then there's also prerecorded things with Tour de France to do spins, it's just awesome. And you can take live classes, there are prerecorded classes from 15 minutes up to an hour, and there's classes every hour on the hour, and they get some of the best instructors in the world for spin because they can pay them extremely well. But the studio, frankly is no different than any like SoulCycle or any other spin studio except they have cameras mounted in the ceiling, and they're streaming it.
And so, for Stephanie, I'd love to see her get this to a point where she's having a monthly stream of aerial yoga all over the country for 30 bucks a month or whatever, because she's going to be doing the classes anyway. And so that could be a giant business, but I'm also reluctant to go deeply into it because it's like let's get the initial thing.
Dean: The core business.
Joe: Yeah. The core business working, but I'd love to do a follow up with Stephanie after she gets some of these things in place, and actually, let's track how we've taken a really cool person who's a really hardworking entrepreneur, very talented, the product is great, the service is great, it's just a matter of getting the marketing right, getting the offering right. And once that becomes, let's track and see if we can turn this into a million dollar business for her out of a studio that most people would just be, "Lets us do a yoga classes." I'd like to actually parlay this into something far bigger, and when I say I, I don't have any ownership in her company, it's just I'd love to just see this happen for her.
Stephanie: Thank you. Joe, mentioned something along that to me before, and it's been a huge dream of mine to be able to grow it into something bigger, that's why the name of the studio is, Twisted Yoga studios with an S, and I did that on purpose. And I would like to get to a point because right now, especially with aerial yoga, there's no governing body over it, there's no one that's out there saying that, "This is the way that you do it in, and this is how it should be taught." The market is wide open for right now, and so I have this unique ability that with the way that I do it and the way that my product is, that if I can get the marketing down and I can get all these things right, that it can grow into something very, very huge. And ideally, that's where I would like to take it, but I don't have the core down yet.
Dean: Well, I think it's all going to drive them, and you figured out the core thing. You demonstrated how to turn 6,000 into 51,000, and that's a win. And that's what I'm trying to tell to you now is let's take another $6,000 and turn that into $250,000 combine now with what you've got there. And it's all, I think the assets that you have going into year two, are you've got all the people who have been with you for at least, who have given you money. Those would certainly be people in your sphere, that you want to keep those people coming back, reengage those people. You've got the people who are currently continuing to pay you and want to keep them doing that, but also multiplying themselves to get people going.
When I mentioned about the during unit here of figuring out where the lines are, and so I would think that, during unit for you is from the moment someone walks into your studio for the first time till they've gone through that first 30 days, whether that's two classes or one class or whatever it is that they're going to do, with the objective of getting them into a multi-class pack or a membership, and that they refer somebody, they bring somebody with them. If we're not setting that as an objective and then thinking and measuring that, that is really a cool thing that you can watch, kind of a client multiplier that way.
That's the strategic objective, that they come, they have a great time, as a core sign up for a multi pack or for a membership, but then the strategic objective that they refer somebody else, they bring somebody. And they could do that by giving away a $25 gift card to them or a $50 gift card or whatever your model is. But I don't think you can go wrong giving away $50 gift cards to anybody who's in your area that's interested in yoga, because now they get an experience of you and they also start off owing you, reciprocity. The reciprocity is that you've given them this $50 gift, and that can't be underestimated, the value of that.
Stephanie: I love it. I love the way that it sounds to do a $50 gift card as opposed to saying, "Hey, your first class is free." And I like the referral aspect too of saying, "Hey, here's a gift card that you can give out to some of your friends and have them come to class with you too."
Dean: Yes. Great. Like welcoming people, that whole great episode to listen to would be, Joe and I did a great episode years ago with Batros Coulier. And he talked about this process of loving up on people ,that first 30 days with the intention that they feel great.
Stephanie: Yeah. I actually listened to that episode.
Dean: Oh, there you go.
Joe: I think that's, when I first met Stephanie, I think that was one of the first things I told you to listen to, right?
Stephanie: Mm-hmm.
Dean: Oh, is that right? So we both think of the same thing, that's funny.
Joe: No, I literally went to her studio as a client. I went there and I thought it was super cool and I've done it. Even me doing aerial yoga is in the trailer of a documentary on me called Connect, which is not yet released, but we're going to have like, what do you call it? Extra footage from the documentary that we're doing an aerial yoga at a studio, which we've got videotaped and everything. Well, before we wrap up, and this could go a little over for the typical episode deed and for your Cheese and Whiskers and whatnot. What would you suggest? Because here we are, at the time we're recording this, it's right before Christmas and the new year, and so a couple of things.
And then on January 5th, there's going to be people listening to this. It really wouldn't appeal to them unless they happen to live in Arizona and they hear this, but my good friend, Leila Parnian who I've been doing pour art with, and then the whole painted mannequins using pour art, which is a method of where you just kind of like pour paint and-
Dean: Yeah, I saw your live of it.
Joe: Yeah. We're doing it up on stage. We have Alice Cooper, the singer with a mannequins and everything in my most recent Genius Sellers meeting. So Stephanie does a couple of cool things. Well, she has recovery classes for people that are in addiction recovery, so she has recovery Yoga, and then she's going to do a poor art class with Leila at a time when I already have a meeting scheduled, I'm going to see if I can finish up my meeting early and get to the class, I'm not sure I would still be able to make it, but they're going to be doing a poor art class there. So for events like that, I already have my ideas, but I can share those, but I want to get your ideas on couple of things.
One, the holidays, great time that she could make a really powerful offer, gifts, start the new year off. That's always a perfect time of the year to get anyone into any fitness regimen or something new. Secondly, things like in-event class, so she's doing meet up groups where things are themed, where you cannot just come and do yoga but different speakers and different topics and if the poor art thing works as a really great community builder, it's also something that is parlayerable. How would you look at leveraging-
Dean: One of the things I would do at the holidays, especially if you're targeting women is running an ad targeting men and do a video ad that's offering them a $50 gift card to give to their yoga loving girlfriend or wife. And so to say something like that live from your studio with your Santa theme or on it or whatever. But basically, saying to people, "Hey guys, this is only going to you, no girls are watching this right now, but if you want to be a hero this Christmas, I got you covered. Download this $50 gift card free, not a single string attached. They don't have to make anything, they come in for a free class and you'll have another gift for your special yoga lover and you'll look like the hero."
That's a nice thing as a multiplier, just to see that same thing. We're doing that same thing for Luba as well, for the eyebrow, for Amazing Brows and Lashes. That's one idea. Then the other thing is that the $50 gift card is going to tie in perfectly over the holidays, it's a great thing, "Here's a gift for you to come in." I think I would suspect that if you're getting opt-ins the other way with the free class for $3, we calculated out, then I think you'll be able to get them for less than $3 with the gift card.
And then I would start immediately ramping up the communication with that list, to now that it's sort of you are giving people a glimpse inside too. Like I'd start doing, almost treat it like a little reality show in a way. That you could show stuff that's going on, candid videos of things that are happening in the studio and maybe show the environment, show the types of people that are there, have people talking about their wins or breakthroughs or something that's great that happened or how much better their life is because of yoga, and maybe show some of the aerial stuff. You got so many opportunities just in that closed group of the people who are on your email list.
You also want to treat it like you’re running a newsletter for a magazine for people who love yoga or love yoga lifestyle and happened to live in Phoenix. That's what I would focus on. I think those things alone will make a big difference.
Stephanie: Yeah. I think so too. I love it. Thank you so much.
Joe: Stephanie, to wrap this up, what is your, I guess, your main or some takeaways and if you had to summarize, what is the one sentence solution that you can derive in your current, I know you could go back and ponder this, but what immediately comes to mind for you right now? What takeaways, and then if you had to summarize it into one sentence solution?
Stephanie: My biggest takeaway is to give a $50 gift card, to look at what can I give to them in this place where I'm already losing money. There's no reason why I can't get away a spot in a class right now for $50. So that way, changing my perspective on viewing who I'm marketing to and how I'm marketing to them is my biggest takeaway. So I liked what Dean was talking about earlier saying, technically right now I'm losing $27,000 a month on open space, open spots in a class, there's all this openness that I can now market that open area without really losing money, and that's what I need to focus on.
Dean: That's great.
Joe: That's great. And so this is sometimes hard to do, but I think you can do it. If you had to now take it into a one word or two words action, what would you call it?
Stephanie: One word or two word action.
Joe: Yeah. Like the one sentence solution, if you had to have a one word solution, and it could be an action or it could be, what do you need to do that will move you towards making that happen as quickly as possible?
Stephanie: My one word is gift.
Joe: Okay. Awesome.
Dean: That's good.
Joe: I love it. I love it.
Dean: I was thinking about the same thing
Joe: Well, cool. Well, Dean, thank you. This was sort of an off the cuff. I called up Dean and said, "Hey, let's talk with Stephanie." And you're like, "Let's just turn it into a podcast episode." And here we are, so I appreciate you doing that. And Stephanie, I like you be in a spot here because recording something that's going to go public about your business and everything is not always easy to do. This also goes back to, there's no relationship between being good and getting paid. Not all the time but much of the time for small business owners, but there's a huge relationship between being good at marketing and getting paid.
And so that's the whole gift that we could offer to small business owners, is just taking people that are hardworking, doing their best, just they have not dialed in, because my story is very similar to many entrepreneurs that would be listening to this, dead broke carpet cleaner, living off credit cards, working my butt off, going in debt, being a nice person and looking at other companies, many that were even unscrupulous that were making money and I wasn't, being frustrated and like, "What the hell, life is not fair." And learning marketing and then realizing, "Oh, the secret ingredient here was, I just didn't know how to generate business in the right way."
And once I figured that out, everything changed and now we're able to help all the many small business owners all over the world that are struggling with the same thing, if they of course, pay attention and listen and apply. So there you go.
Dean: Awesome. Well, that was fun.
Joe: Yeah. Totally.
Stephanie: Thank you guys so much. I don't even know how to express my gratitude, but I really appreciate you taking the time and doing this with me.
Dean: Awesome.
Joe: You're welcome. And I'll be in there hopefully shortly before I head off of my vacation and if not, then it'll be after the new year. But yeah, I want to really look at what Stephanie does over the next few weeks.
Dean: Yeah. I'd love to see that too, the field report.
Joe: Yeah. The field report. Stephanie, if you could keep us in the loop on what your results are and what your numbers are, let's do that, and let's maybe do a follow up in the future. We can even, depending on how this plays out, go over what works, what doesn't work, and then really how to parlay this into a whole different model. Nothing's more motivating, you can double your business, but if you're like, "How do I go 10 times." Because one other thing is there's a 10 times growth thing, from 30 to 300, and that's exciting. And that's it. Awesome. Thanks guys.
Stephanie: Thank you, thank you, thank you.
Dean: Okay guys. And there we have it. What a great episode, I love the lessons in that. Certainly, we've got to dig deep into the idea that sometimes it's less expensive to get somebody a result or give somebody an experience, a view that it is to convince them, to give you money to get that experience. And what has happened in her second venture into Facebook advertising has proven that. We sold, she has 285 people from spending $5,000 in the second half of the year and 2,000 people and $51,000 driven from spending $6,000 in the first half of the year.
And I think that what we're going to find is that, if she uses this offer of the gift card, that we will be able to get that cost of acquiring a subscriber even down lower than what she was doing by giving away just free classes. Joe had a good idea too of maybe doing a follow up episode to check in on Stephanie's progress and see what's happening, and I agree. I think this will be great. If you want to continue the conversation here, you can go to MoreCheeseLessWhiskers.com. You can download a copy of the More Cheese Less Whiskers book, and if you'd like to be a guest on the show, just click on the, be a guest link and that will take you to a spot where you can tell me a little bit about your business and then we can get together and hatch some evil schemes for you.
So that's it for this week. Have a great week and I will talk to you next time.