SPI 777: Making More Sales and Talking Funnels with Ben Harris from ClickFunnels

Ben Harris: There just needs to be more content that is not selling, but it's teaching. If you were able to teach something, something new or something they didn't know beforehand, you were, in one, building rapport and creating a superfan. But two, you are now viewed as an authoritative figure because you've now taught them something, and you were positioned differently.

You have to bridge people from people who don't know you to people who know you. And in order to do that, it is going to be somebody that you might have to lead with a problem because they don't know you. And then go to the solution you can provide, then the product.

Pat Flynn: How do we make more sales for our product? There's a million different ways to go about it, but I wanted to bring somebody on the show today to talk about some specific strategies, some basic and some more advanced to give you light to some other options that you might have that you might not be exploring yet.

And we talk about everything from little groups and communities that you can use to then upsell or upserve into as well as book offers. And today we're talking with Ben Harris from ClickFunnels. Yes, ClickFunnels is a software tool out there that can help you with creating funnels, getting more sales.

It is a tool that I personally don't use, but a lot of people do. And after speaking with Ben on the team for a little bit, he just was a plethora of knowledge that I knew that I wanted to bring on the show. And ClickFunnels is a great tool. I've heard a number of great things about it from a number of people.

I know John Lee Dumas uses it and several others. But most of all, I just wanted to download what was happening on their end in terms of what's working and what's not from their clients who use the tool. And so whether you use the tool or not, you're going to get some value from this episode. This is session 777 of the SPI podcast and here he is, Ben Harris from ClClickFunnels.com.

Announcer: You're listening to the Smart Passive Income Podcast, a proud member of the Entrepreneur Podcast Network, a show that's all about working hard now, so you can sit back and reap the benefits later. And now your host, he uses four screens when he hosts a webinar in his office. Pat Flynn.

Pat Flynn: Ben, welcome to SPI. Thanks for being here, man.

Ben Harris: Awesome. I am so excited to be here, and I appreciate you having me.

Pat Flynn: ClickFunnels, who you work with, is an incredible company. We've heard about it for years now. How old is ClickFunnels? It's been around for a while, I feel like.

Ben Harris: Coming up on a decade, so it's kind of, yeah, 2014. Gone by like that, but yeah. In our industry, right, months seem like years sometimes. Call it ClickFunnels time sometimes.

Pat Flynn: What I love about ClickFunnels and what you do for your users is you have this thing called like the comma club, right? The two comma club, the three comma club. This is to reward your users and kind of how far they've come and what they're doing to grow their business.

Do you have any recent comma club members that have stood out to you and maybe like, what are they doing and how have ClickFunnels helped them?

Ben Harris: Oh, great question. The two comma club award was designed maybe with a Dan Kennedy-ism. I guess obviously, you know, Dan being one of Russell's mentors throughout, you know, his online marketing journey and work that I myself had came into even before I knew who Russell Brunson or ClickFunnels was, but really identifying what that finish line looks like, right?

You know, the four minute mile, right? When Roger Bannister ran the four minute mile and then hundreds of people did, it's the person to accomplish it. And really sets that standard of, you know, I want that we get people coming into ClickFunnels and even moving platforms over to ClickFunnels just because they're like, I got to get that award.

Like, I want that. Or like my friends got it. I got to get it too. And we've seen people from so many different walks of life, get these awards from physical products, coaching programs, agencies, info products, you know, kind of like how you got your start in the info product game and one that I recently, just for the question that, that does come to mind.

And this is gonna hit on a few different questions here today, is they've actually been teaching business owners and individuals how to profit through their Facebook group, and they've got their entire, you know, value ladder, right? A low end ebook that they sell that sends people all the way to their high ticket, you know, done for you programs.

But it's a very interesting, and I think there's a window of opportunity when it comes to this type of business model, although the foundational concepts remain the same, but something that to acquire leads for pennies on the dollar right now. Compared to, you know, obviously as Meta advertising costs rise over an interesting year coming up into an election, so there's a lot of money getting pumped into the market.

So it's been it's been a little bit different, right? I'm sure you've seen some of the stuff, you know similar in your line of work as well Yeah, Facebook group coaching. I guess it's been a fun way to not only grow a community but grow your leads as well.

Pat Flynn: That's really cool. And that's really smart. It goes along with what we're going to talk about today, which is You kind of that ladder and how do we get people in the door?

How do we get people from the front office to the back of house stuff, if you will, and the higher ticket items. And when I first heard about the two comma club, it was just like, man, that is really smart. Similar to how YouTube offers a silver plaque to people who get to a hundred thousand or gold for a million.

And it's just having that to be something to drive to is so smart. So I just wanted to point that out because. All of us can use such a mechanism inside of our business for our people. And then just the name itself is Two Comma Club is just rolls off the tongue so nicely. And I see people whenever I interview.

Sometimes they have the plaque in the background and they're sporting ClickFunnels. And it's really amazing. Let's talk about lead gen. I mean, what's working today? A lot of what used to work does not anymore, especially from back in 2014. So when we talk about getting people in the door and let's say, you know, getting them to be on our email list, so then we can nurture them and drive them forward, you said Facebook groups is one way, but like what's working today. You have a ton of customers who are using the program to figure this out. What, what is it really that's working today?

Ben Harris: On a scale of one to ten, let's say like one is very, very basic and then ten is like crazy growth hacky. How extreme do you want me to get in this answer?

Because I can go both ways.

Pat Flynn: Okay, let's go one, five, ten. We'll do a few different examples. So what's the easy way?

Ben Harris: Yeah, with one right now, what used to work, right, is we really would start Facebook ads going to an opt in page. Right, and that was the basic premise that built ClickFunnels into such a gigantic company was that entire idea of let's identify people who are interested, right, get them to raise their hand of, hey, I would like to learn more of that information, and then send them instantaneously identifying our subscribers, and then send to a low ticket buyer to a hyperactive buyer, right?

Instantly. And within that, obviously liquidating your ad costs. So let's say it did was 5 to capture an email on your page within selling something for 7. And then another, you know, everyone here knows how sales funnels work. That's the old way. Right in a way that maybe still could work and I do see some people doing it in the coaching space still pretty effectively but one way and I will Not speak for myself because I have not personally tested this nor have we as a company but I have seen the solo ad space make a little bit of a comeback with obviously buying solo ads And then sending them to a funnel or an offer that would be very similar to something that used to work.

But the acquisition cost is a little bit lower and the quality staying the same to be completely honest with you. And that's something to where you don't need to learn any type of ad experience, right? You know, obviously some copy that you'll have to have on your page, but from ad creative space. Don't need it right headline space, you know, even with ad descriptions or ad headlines.

You don't need it. It's something to where you can find Where your fans are congregating to who has them and send them your way you can get started for just a few dollars there are some brokerage websites out there if you just google them and I know quite a few people, whether they're a big ClickFunnels affiliate or just a personal friend of mine, that are doing it, and pretty darn well.

It was something that, you know, I learned a long time ago and then didn't see it, right? Because it was just bad quality, and there still is, right? Like, I want to be very clear within stating that.

Pat Flynn: What's the strategy? Going to a broker to find Solo ads, yep.

Ben Harris: So maybe like Udemy, and there's a, I believe, solo ads marketplace or market space.

If you just google it, solo ads, you can find people with quality email lists that are willing to put your offer in front of their audience.

Pat Flynn: Gotcha. Solo ads. So you're not working through Google AdSense or Google AdWords type of platform, but really like a more private ad that you set up on somebody else's platform or somebody else's brand would sponsoring a newsletter account is something like that as well.

Is that kind of what we're talking about?

Ben Harris: Absolutely. Yeah. So even with, you know, on someone's newsletter that has a subscriber base of raving fans, sending them to your opt in page and not really going for the sale. Right. It's really of, Hey, where is my audience congregating? Right. What other pockets on the internet are they involved in?

And then let's provide value to their audience. And then obviously bring them over to yours. And then, you know, the whole, the whole deal, right. Converting them to a buyer, but obviously giving them, you know, a lifelong subscriber is still very valuable as well.

Pat Flynn: Yeah. We've done some email newsletter swaps in the past that have worked really, really well.

And we are in fact, doing that on our podcast and also on our email list. People are buying ad spots on our email list. And it's interesting because they continue to buy, which probably means it's working, but we don't see the results on the other end of it. So you're saying that this is working and it's much, much cheaper than what we're paying for on Facebook or Instagram on those kinds of platforms right now.

Ben Harris: I'm seeing the cost per lead be cheaper with the right audience, with the right offer, which will, you know, obviously involve some exploring and testing there. It's, it's our job as marketers is to test. And then, secondly, I would say on Meta or Facebook, you know, we can call it is what it is with the paid traffic instead of going to a sales page, right?

Going to a domain that's now off app, right off the platform, you're going to keep them on and you can run ads directly to a Facebook group right now to where they do not leave. The app, right? They don't leave their browser desktop, whichever method they're using. They can join it right there, go over to the group and then go through, you know, which I'm sure in all your groups, Pat, you have those onboarding questions towards prompting, you know, where they're at in their business, their life, what they're looking to learn, and then obviously prompting them with a lead magnet of, you know, what's the best email we can send you this free training that Pat has done on how to accomplish X results, without, you know, enter pain, right? Or difficulty. And, you know, using some group funnels as one, but there's some other tools that are super cheap, if not free, to take those emails, implement them to your autoresponder, you're off and running. And not only are you capturing that email for pretty darn cheap, you're also building a group as well.

Double edged sword. So you're going to be capturing that email, building up that relationship with the person via email, but you're also having a community to where you can go live. If you do send out an email, you can post maybe a piece of that content in your group as well. With Facebook groups, they have admin assist, and I actually don't know how long this has been around for, probably quite some time, but it's something that at ClickFunnels, we're now utilizing to its full extent, but there's some automations now that you can implement that just keep the spam away. You know, certain keywords you want to band or if somebody is saying, you know, DM me or if they're putting an email address in a post or in a comment, you can actually not only automatically remove those, you can ban that person for 24 hours to let them know just, Hey, we don't allow this.

Please don't do it again. If they ban a certain, or if they violate rules a certain amount of times, they're kicked out for a week. And so there's different things to really maintaining the quality of a Facebook group because, you know, this will probably be no news to you. You got to treat a group like an email list, right?

Maintain that hygiene. If you still emailed every email that you've gotten since, you know, you're starting online marketing, your performance probably wouldn't be what it is right now, which practicing, you know, probably a lot of stuff that you teach as well. And then third piece, right? Here's like the growth, growth, hacky one with running paid traffic.

And a lot of people that are using ClickFunnels. I have not a lot, but some that I've heard that do it at a very high level, they're actually running traffic to a order form, right? Let's just say a book funnel if you're going to be selling, you know, buying Superfans if you don't have it get it but going to that and having a two step order form and you actually your cost per lead Is less because you're capturing the abandoned cart emails of people that are entering name email phone number then going over to the address and credit card form, capturing that lead is actually the cost per lead is a lot lower than running straight to an opt in or a lead magnet right now.

So I've heard. I have not done that myself, but in terms of like, it's an order form disguised for actually capturing leads. If that makes sense. I was trying to illustrate that as best as I could.

Pat Flynn: No, that makes sense. And is this where oftentimes people are doing kind of the free with shipping offer for books as well, just because they know that they can capture that lead and then nurture them into the, some higher end offers from there.

Ben Harris: Exactly. And not even really treating that lead as an abandoned cart, but rather as a lead, you know, like giving them a lead magnet, right. Bringing them through an email automation that is introducing, you know, into you, your backstory, why you're selling what you sell, why you're doing what you do. And then maybe even just getting with a book offer, you know. Five or six days later.

Pat Flynn: Maybe we can go with this sort of one, five, ten or sort of like beginner, mid level, advanced sort of sequence as we go along here, because the next steps from here, we get them on our email list. You know, we see a lot of people immediately start selling a multi hundred dollar product from there, and that can work.

And then even a higher ticket item from there as well, which often requires some call or a webinar, at least. But what are you seeing work today in terms of getting a lead to convert to something and something that, ultimately leads to higher lifetime value of that customer. Where, what are you seeing?

And maybe we'll start again, beginner, middle, advanced. If you'd like.

Ben Harris: That's a great question. And you may be able to provide more clarity and even kind of keep me true here. If you think I'm going off on a path when it comes to a lot of this stuff, Pat, I just love to dwindle it down to making it as simple as possible.

And maybe that's, you know, my elementary brain, but it's like, if we keep it simple and then just have our scoreboard in front of us, it's going to allow us to dictate what direction we want to go in and what we're going to test. And not only that. But allow us as a team and a department to see if it's even working or not, right?

If we're going to be testing a bunch of different things, we're not going to be able to see what direction we need to lean into and what direction we need to lead out of. So when capturing leads, it's really two buckets. They are either in to quote, you know, Russell's training and all the way back to Andre Chaperones was an autoresponder madness.

Do you know what I'm talking about?

Pat Flynn: That's a long time ago, dude.

Ben Harris: Yeah, of going into are they in your soap opera sequence, right? Are they going through your automation and then are they in your broadcast bucket? And to really keep it too, now you can get into on a soap opera, you know, a choose your own adventure series of getting them with three emails on day one, and are they gonna get different sequences?

They click on the first email. There are some things to get into that, but really getting to a seven figure level, I have seen a lot of people not go that route. Because, you know, unless you're using something like an active campaign or something that allows you to get granular in that way, it's really giving them the soap opera sequence, right?

The autoresponder, that is the introduction to what you do. Now, I will, with the caveat, say that that could last a long time. I've seen people that have a 7 year autoresponder. Not kidding, it's that long. And obviously I wouldn't, I don't know why I would advise that.

Pat Flynn: Seven years?

Ben Harris: Seriously, really, you probably know who they are.

I know for a fact you do. But then having something, let's just say it's a month, right? Giving 30, 60, 90 days that will take them on a journey with you. And then having your broadcast bucket that does get your newsletter, right? It does get something. If you want to maybe participate in a launch that a friend is running or any kind of product you want to introduce your audience to emailing daily, a few times a week, current events, things that have happened with your life, that relationship you have with your subscriber base is really the foundation to anything online, but it's, it's really the most of what I see to answer your original question are those two buckets. Now we'll ask, do you see things different? How would you answer that question?

Pat Flynn: Well, I want to go a little bit deeper into what you mean by soap opera. Because sometimes we hear about this as a nurture sequence, right? We have the broadcast, which is like real time and what's happening right now.

But the nurture sequences is pre written series of emails that get sent out. But what do you mean by soap opera? Because nurture can just and we always say that, and we always hear it, and it, like, isn't really even defined, really. Nurture just means, like, staying in contact with them, but that doesn't really help.

But what does the tone of a soap opera sequence mean?

Ben Harris: Any message or story you can tell and write that leaves them hanging, right? Just like a soap opera, where they're like, you know, And that's when Johnny's wife Was never seen. It's like, dun, dun, dun, like tune in next week. You know, it's it's that it was her brother.

And it's, it's one of those things that will, you know, leave you hanging of like, PS I'll finish the story tomorrow. Make sure you look out for it. The subject line is going to say. My story with Pat, you know, so it's kind of leaving them hanging and expecting more and just like any series you will watch that, you know the walking dead right breaking bad these huge huge tv shows over the last decade or so what do they do?

They leave you hanging. They leave you wanting more. And I referenced those years. I'm going back to like when they were coming on TV, not you could binge the whole thing on one night on Netflix, but what you can now, but as they aired on national TV, they followed that script, right? Storytelling is storytelling.

I don't care if it's your email list or Shrek, it all goes through a story. And I think that the more people would follow that one, they're going to be building a bond with their audience because they're sharing an element of vulnerability that more likely the reader shares with the writer, you're also taking them on a journey that's going to leave people hooked.

At that point, I think you're in the process of creating superfans.

Pat Flynn: Yeah, I would agree with that. And if we can relate it obviously to the pain that a person might have, and then you kind of agitate that pain or you amplify it a little bit and then provide your solution. This is where your offer comes in, can come in. Are there any sort of top level advanced ways people are converting beyond that right now?

Ben Harris: Yeah, I would say because you mentioned at the beginning. I want to make sure I want to hit on this You mentioned sort of like higher ticket products, you know, maybe closing over the phone something like that. I would say and I don't see this often, so again, anyone who's listening or watching, just take this for what it's worth because sometimes if you have multiple call to actions in an email, doesn't really lead to anything where you want to go, right? You want to send people in a singular direction. A confused mind says no, right? We want answers, not choices.

So it sometimes leads people astray, but you could have something in a PS or another section of, and I'm talking just an email that would say if they're interested in learning more about X result, click here, and that would enroll them somewhere else. Or that would take them to book a call that might not relate to your story completely.

Or you might have an email that would in fact take people in a different direction. Again, they get, you got to make sure they raise their hand that they're interested in it. Cause obviously, and you know this, the higher you're selling a product for the more indoctrination you need, just fact. So if you're going to be selling something at higher ticket, either via webinar or via phone close for a sale, I would, on your autoresponder just have that other well open up so some subscribers can flow in that direction if they would like to both ending at the same result back into your broadcast bucket once they've completed the autoresponder.

Pat Flynn: That makes sense.

You mentioned webinars webinars has been pretty key for us but I know it's also changed over time people like JLD, John Lee Dumas, had at one point been running a webinar a week to drive people into his program and has kind of slowed down. Other people are picking it back up. What's your sense of where the world is at with the online training, like in a webinar and getting people to not just subscribe to a soap opera series or something, but you know, to a training that's happening live at some point in time that then leads to some offer.

What's your stance on webinars these days?

Ben Harris: I love this question. Even to JLD's testament as well, you know, Russell did that for years, right? It was a full seven figure stream of revenue of running paid traffic to a webinar that would launch every Tuesday and it was live and would just rinse and repeat the whole thing for a year straight and did that for years.

You know, if you look at ClickFunnels user history, you know, there's been big, big jumps, right? Most of the time for tech advances and other different lead magnets, we would launch webinars being a huge jump of that, you know, back in about, you know, 2016, 2017 around that era, but it's changed, you know, like you can see I've done live webinars myself and they don't perform like they used to. And I know like you've probably seen similar results as well. And I think a lot of it, and this is just based on theory. So I'm anyone in the comments or anything, welcome to argue with me if you want. Cause I don't know if I'm factually correct, but I just consumer behaviors changed, you know, like whether it's Gen Z forming more of a buyer population or something like that, I do feel like there just needs to be more indoctrination and more content that is not selling but it's teaching and I'll explain the difference is if you were able to teach something something new or something they didn't know beforehand You were in one building rapport and creating a superfan but two you are now viewed as an authoritative figure from said person because you've now taught them something and you were positioned differently. So I hope everyone here listening does know what a value ladder is It's more or less like a traffic ladder, kind of, you know, you have to bridge people from people who don't know you to people who know you.

And in order to do that, on a basic copywriting standpoint, it is going to be somebody that you might have to lead with a problem because they don't know you. And then go to the solution you can provide, then the product, right? And I think we need to follow that within our sales cycles as well. Not just advertising because people need to know what they buy and they need to be comfortable with their money.

I think guarantees are a huge piece too. And that might be a little growth hacky, but you know, standard money back guarantees I think are gone. I'm not a huge fan of them. I think there's other ways that we can be more conditional in that realm. You know, you got to meet me halfway. You don't really have 30 days, but more like a completion type things.

Or, you know, I have friends that very close friends, in fact, that don't do a 30 day money back guarantee at all. They're like, Hey, if you complete the whole course or all of my content, complete my book, my training program, anything, and you write me an email saying, Hey Pat, this wasn't worth my money. No arguments, take it.

And not only are their completion rates higher, their refund rates are a heck of a lot lower. So to circle back here, webinars are just transitioning more into content based selling. Does that make sense?

Pat Flynn: Yeah. Yeah. That makes sense. I mean, the webinars from back in the day were very, like they provided maybe 15% value and we're 85%, like really good storytelling into a pitch.

And then we even had like the video sales letters and the PLF formula and that stuff. And we do still see parts of that. The storytelling is important. The building of a relationship is important. I think that's why the PLF formula, you know, Jeff Walker's three video series worked really well because the first two had no selling at all.

It was about story. It was about the person. It was about relatability. It was about the problem and kind of what was being done to solve that and the consequence of not solving this. And that stuff can only be done so long in a, in a, in a one hour session before, you know, either it's too much or we get to the pitch or what have you, but we've seen webinars continue to work, but we've had to shift how those webinars are done.

We still have a registration page and people can go and watch them and it still does convert for us. It's still our primary mechanism. However, we're hosting those on YouTube now. Because YouTube with the live streaming platform on there allows us to get viewers who wouldn't have found us otherwise, number one, but also we're seeing a five to 10 X view rate after the webinar is over by the algorithm, pushing impressions out. And if we have at least a really good title and thumbnail, we're at least going to have an opportunity to, if anything, build a relationship with people because the first 45 minutes is all value, all content. And it's stuff that hopefully is new and different than what people are finding elsewhere on YouTube.

And, you know, YouTube is, is rewarding really good long form content right now as well, as much as it is also rewarding shorts at the moment too. So that that's working for us. But I think, like you said the more that time goes on, the more that people need to be proven that this is a real person, that this is a real solution, and that often just can't happen in a single day.

So for you to say like seven years of a, of a sequence, if you will, or having it take that long before a person converts is crazy, but also not it's it's not surprising with where we are now.

Ben Harris: On YouTube and even just kind of capping this off I think I mean, maybe I was asking selfishly you published on YouTube one You could expand your audience organically into someone who may not know like or trust you frankly and then that at worst can maybe convert into a subscriber or just someone who is viewing your content. But do you leave it up after you mentioned like after the replays?

How long do you leave up your video for or do you just leave it up?

Pat Flynn: We used to leave them up and then, you know, force the, like, get the replay by tomorrow because it's going to go away. It's going to go unlisted and you won't be able to find it. But we found that there's more benefit for just keeping it up because what we've done recently is the urgency that comes in, and maybe this is something we could talk about too, it's like what goes with the offer when we offer something, how are we creating urgency to help a person make a decision?

Because for a while, for the longest time, I and many others would put a discount on a product and the discount would go away by a certain date. This is, this is classic and still people do this and do it very well. And people act because they have to or else the price will go up. Right. They have to make a decision.

So what we've done because we don't want to offer a discount anymore, that in our eyes reduces the perceived value of what we're offering. It reduces the quality of what the product may feel like. Couldn't agree more. We want to keep that price the same because it's now community and community is our product, but the urgency comes in with if you get in by next week, you can join the rest of the students as we all go through this course together, that the accelerator group that goes through this, the cohort begins on this date. So if you want a two and a half times more chance to succeed and transform, do it with this group that starts next week.

So, are you going to come with us or not? That's the urgency. That's the decision point. That's what's working really well. Are you seeing anything work really well? Are there bonus offers that expire or other kind of funnel hacking type things that are working for conversions these days in that regard of urgency and scarcity?

Ben Harris: That's a good question. And we frankly probably need to do a little bit more of that. Right now what has been, you know, just been working with the constant flow of ClickFunnels customers for years has been growing our audience, right? Just growing our list and growing our trial base, which is too many KPIs that anyone in any sort of subscription business should be monitoring, but it's really just that value ladder, right?

Bringing people and obviously no one has sold ClickFunnels until they've taken the steps to in order to be shown click funnels, right? Someone who is a dead cold customer would never join our subscription, right? And nor should they, they don't know, like, or trust us. They need to be converted and to someone who has bought a book from us in the past, who has subscribed to a lead magnet.

And for us going through that, there's not really, I guess, any bonuses or urgency that goes within that unless it is, you know, obviously a webinar or ClickFunnels annual, and we'll include some digital products in there as well that they can't find anywhere else. It's only included if you buy ClickFunnels annual product on a webinar.

But I love the idea that of, you know, having the cohorts, right? That's that's part of that, you know, community piece that your brand is so huge on and you teach incredibly well. Do you find that that strengthens your community by having those cohorts?

Pat Flynn: Yeah, I mean, absolutely. It's interesting because we have people come in for those accelerators and they're like, like we used to run the cohort separately, you know, just when we were experimenting with this and they were like, okay, this is over.

We have transformed, but we want to stay in contact with each other. Like, how do we, can I get the email of everybody else who took this with me? Because we need to, we're going to form a group together kind of thing. And we're like, okay, well maybe we should just create the place where the groups form after, and as people are going through this, that way it's there already.

So it's, you know, they come for the content, they stay for the community kind of thing, which is really great. I just got really curious about ClickFunnels itself in the business. How are you getting your influx of customers these days? You mentioned a free trial. How are they getting to see that? Can you kind of go through the, your value ladder that you have as a company?

I'd be curious to see how people are coming through into the software. We have a lot of software entrepreneurs in the audience as well, who I'm sure are curious.

Ben Harris: Yeah. And it's really about, you know, growing our audience. And that could be obviously there's a little bit of a cheat code because there's a guy named Russell Brunson that's got a pretty large following and has been, you know, the face and, and the, the founder and everything behind this company.

Yeah, and with growing his audience as well as a direct proportion to our user base growing, frankly, and it's about so if you are a founder of a software company, some metrics that you should be focusing on or growing, whether it is your company list or your own personal email list, if those two are growing and you are doing the back end at a semi effective way, your company should be growing.

And even from a software perspective, if your user base is growing year over year, so should your price. So should your price. And I think that's one thing that a lot of people I don't think take advantage of just from a basic profitability standpoint. And that's not anything of trying to make more money.

That's just something I've learned from consulting groups over my years of, you know, my lap around the sun. But I think that if you are growing a software company and really what we've done, it's been growing our audience through low front end products. I know that sounds boring and mundane. But it's been done effectively and done with discipline and it was either Dan Kennedy or Russell has always said book buyers the best buyers and maybe you could attest or disagree with that, Pat, but it has been Dot Com Secrets, Expert Secrets, Traffic Secrets, the box set of turning a lot of lower ticket buyers into lifelong customers and it's really indoctrinating them with the teachings and the philosophy because with ClickFunnels, it was like ClickFunnels is the car, right? And Russell's calling was to teach you how to drive. And then once you got in, you knew exactly what to do. So with us growing, that's one piece. The second half of the fence is really a spot where I live a lot in our company, and that's our affiliate revenue.

You know, we've done a phenomenal job at growing an affiliate army, if you will. And anyone here would like a good read. Integration Marketing by Mark Joyner is a fantastic read, like 80 pages. You can read it in one night. But really going about our customers, right? You know exactly who your avatar is. If I asked you right now, Pat, you could paint a picture for me if you wanted to.

But finding out we're else your avatar lives, right? What other products are they buying? And within those products, those courses, those teaching, is there any blank real estate where ClickFunnels could live as well, right? Could we help each other and do some stuff and maybe provide their audience and offer that won't exist anywhere else.

A true one time offer. And that's been huge for us as well. You know, at times has equated to quite a bit of our annual revenue have been the partnerships and the affiliate. Just integrations that we have with other people that are out there selling to our audience as well.

Pat Flynn: Nice. How do you determine the right compensation model for a company like ClickFunnels?

Like, is it a percentage for life or, you know, how do you calculate that? I know that there's a lot of other softwares out there who often struggle to find, you know, a groove with their partner or an affiliate program. How have you been able to solve that? What does that look like?

Ben Harris: I'm pretty polar on this and I say that because I want to give, A, our customer, the best experience, right? If we're not doing that, why are we even here? And secondly, I want to give our affiliate the highest compensation that we could give them with keeping our lights on as well. Because in my mind, they're bringing me a customer that I didn't even know. And a lot of it from even just starting out, I would advise doing this if you're running paid traffic or any type of paid media, how much does it cost you to make a sale?

Just put a number in your head. How much is it costing you? And then if you're in a subscription based business, what is your average stick rate? What's your customer lifetime value and kind of find a medium in between there. So if it's going to cost you 300 to make a sale and your lifetime value of a customer is around a $1000, what would you rather do right give somebody a little bit more and you take a slight haircut if they're gonna bring you a raving fan that's a raving fan of them coming into your world that you know. And obviously, you know, it's really about knowing your numbers because they could bring you a lifetime value that's higher or lower So you really got a kind of look at that per affiliate.

But in terms of just starting out look at how much you're paying to gain a customer and start there.

Pat Flynn: That makes sense and I know from Being an affiliate for different companies and also having an affiliate program for my own products, oftentimes the large number of sales come in from a fewer number of people, very much like super partners.

If you will, you know, Pareto's rule comes into play. How do you build a relationship with a partner like that? How do you go out and start a rapport for somebody who you feel would be a great fit to promote a software like yours and nurture that relationship and get, get it to a point where you're both helping each other win.

Ben Harris: So there's a, a quantitative or qualitative answer to that. I'll go quantitative first. It's really about strategically kind of coming into their world. So whoever that is, right, you've identified, we call it the dream 100 from Chet Holmes of who are my top 100 dream promoters of my product. And really kind of involving your life into theirs.

Like, where are they on social media? You should be commenting on their posts and not stuff, like make sure it's at great post Pat, you know, with the hands up emoji, like, you know, no one would really care about that, but really finding out what's important to them, subscribing to their list, emailing back, making sure that you are showing love, you know, meeting who else is on their team, right?

If they have an EA, you're going to want to get in good with them as well, right? They're the eyes and the ears of anybody who you're looking to be in front of. And again, kind of commenting on their post, finding out what's What are the contacts you can get in touch with? Maybe looking at, are you one introduction away?

Do I have a close friend who might know you that's like, Hey, could you start a text thread with Pat Flynn or even ask if he'd be interested in meeting who I am? So taking that strategic approach and sort of knowing how to broach it, it's courtship and it's most simplest form. That's what it is. I'm not going to try and walk up to a girl and ask her to marry me.

She'd probably hit me in the head and rightfully so. And on a qualitative front on that. It's just finding out what's important to them and being their friend. And if people do business with people they like, and especially in this industry, and you've been around to the point where if it's built to last, it will, right?

People who are out for their own gain, you can sniff it from a mile away. And if you're not in this business to, to help everybody and the rising tide lifts all ships, then I hate to break it to you. I don't know if you need to hear it from me, but you're not going to make it that far. And it's most basic.

Human element form. It's how can I help whatever they're trying to accomplish? And if you do that, expecting nothing in return, I promise it'll work out for you. If you just zoom out for a bit. So again, double sided one strategy, one is just, you know, let's, let's figure out how to just be a good person.

That's, I would suggest that.

Pat Flynn: I would plus one that as well. And if you're a long time listener of SPI, you know that that's, that's how we do things around here. So I appreciate that. Ben to finish off here, I want to ask you about, you know, we've talked a little bit about where things were and what things are working right now.

Where is the puck going? What is ClickFunnels doing right now? What are you thinking in terms of the future and where we're at? In maybe a year or two, how are we going to continue to remain on top of it when it comes to marketing our products and sales? What's going to change?

Ben Harris: You got to think about the ClickFunnels customer and what they're looking to accomplish and whether there's 100 steps, 10 steps, however you want to define it.

In my mind, how can I remove every one of those barriers, right? How can I make the path to a two comma club award as easy as possible? Not easy, but it's removing areas of friction and they exist. And it's really about helping people. You know, you see other people in this industry, right? They've got different things you can download that make building funnels easier.

They make accessing products easier, maybe on the drop shipping front, you know, integrations, different things like that. And I'm saying just drop shipping. That was just something that came to my mind, but in terms of where the puck is headed, that's what we're trying to do is making it, you know, AI plays a big piece in that.

On the creation standpoint, making it as easy as possible. I hate the word easy because I feel like it's a, it's a shortcut type answer. And that's our team is actually our hashtag, this year is no shortcuts. No, John Gordon has like one word for the year. I have one hashtag. I really don't know why I just came up with it, but that's sort of our deal.

But it's something about how can we eliminate as much friction as possible? Because what we used to do is just give them the tool. Gave you the tool, taught you how to drive. Now there's, there's a little bit more handholding. That's probably a bad answer. Do you want me to go deeper on that?

Pat Flynn: Go deeper if you can.

Ben Harris: I guess, you know, AI. AI is changing the game. And we are going to be implementing quite a bit of that in terms of helping you create content, source products, ideas, and so on. Get the actual product themselves, you know, create email sequences. You know what does you're going to have the ability to just do much more than a share funnel.

And it, for any ClickFunnels fan out there, you knew that if I had an opt in page or a template I wanted to share with you, I could just give you a link, it'd be in your account a couple of different seconds. You'll now be able to do that. As if we're on steroids and I'll leave the open loop there, but you can do much more than a share funnel now and a lot of help with creating content.

It eliminates the guesswork, right? AI is sort of like your internet assistant that has been studying for decades, you know, that already has a bunch of information. So learning how to use that, you're going to eliminate a lot of guesswork and a lot of issues for yourself.

Pat Flynn: Nice man. Well, we got a lot of stuff to look forward to and I've, I've heard so many great things about ClickFunnels from a lot of our own users and a lot of my friends too. So if anybody wants to check out ClickFunnels and see what it might do for them in terms of helping them with sales and building funnels for themselves, where should they go?

Ben Harris: ClickFunnels.com. You got it, man. Definitely a lot of cool stuff coming down the pipeline. Follow us on social media at @ClickFunnels and we'll be coming out with a lot of fun content that I hope you enjoy.

Pat Flynn: Nice, man. Thanks so much, man. Appreciate it. Thank you, Pat.

All right. I hope you enjoyed that episode with Ben. Again, you can check out the company and the software at ClickFunnels.Com if you'd like, but great episode. You know, we talked about a number of different things that you could do. What I would recommend from here and with all episodes of the podcast is you get that one nugget, that one idea that you know that you can try and implement and you give it a chance, you execute, you commit to it, you see it through, you follow through, and then you can assess from there.

And I guarantee if you take even one of these ideas from today's episode, maybe it's a more beginner one, or maybe a more advanced one, you're going to see something happen. You're going to see some results and be able to adjust from there. So thank you again, Ben. Thank you to ClickFunnels and Russell.

Russell and I have crossed paths every once in a while. We weren't able to get him on the show, but he's super busy, but Ben is great. So thank you, Ben. And thank you for listening all the way through. I appreciate you. And I look forward to serving you in next week's episode and next week's interview.

Cheers. Thanks so much. See you in the next one.

Thank you so much for listening to the Smart Passive Income podcast at SmartPassiveIncome.com. I'm your host, Pat Flynn. Sound editing by Duncan Brown. Our senior producer is David Grabowski, and our executive producer is Matt Gartland. The Smart Passive Income Podcast is a production of SPI Media, and a proud member of the Entrepreneur Podcast Network. Catch you next week!

SPI 757: The Creator Network Literally Grows Your Email List

Nathan Barry: We know that our content lives adjacent to other creators. But just the truth of the matter is that quality matters more than anything. Before you could probably get away with writing a mediocre newsletter and still get 5,000 subscribers and an acceptable open rate and on from there.

Back in the day, you could put out some mediocre YouTube videos and probably still get traction. Try to do that today, and it's not going to work. You put a ton of effort into it because you know that the content all around it is so high quality, and you're competing for that attention, but the pie is so, so big.

Pat Flynn: In 2014, I was invited to coffee by a friend of mine, Nathan Barry. And I had known Nathan as somebody who was a designer, a very prolific content creator. But what he brought to the table, literally the coffee table at a coffee shop in San Diego, was a proposal. A proposal for me to work with him on a new company that he had just started.

A company that was at the time making around $10,000 a month as a software, an email service provider. called ConvertKit. And he wanted me to come on to be a, an advisor and, and really a partner to the company. And what we talked about that day at that coffee shop was not really about money or earnings or anything like that, but a vision of the future that would be a win for both of us.

A conversation about how we could help each other along the way. That company, ConvertKit, at the time was making $10,000 MRR, or Monthly Recurring Revenue, $10,000 a month. Today, that company is generating more than $1,000,000 a day. Yes, they just recently, at the end of 2023, surpassed the $365,000,000 a year mark, which is amazing.

And I wanted to bring Nathan back on to talk about some of what they're up to to help us creators, specifically something that they recently launched last year in 2023 called the Creator Network. And I'm going to tell you that just up front here, it is the number one thing that is helping to grow our email list at SPI right now.

It's the Creator Network. And whether you are a ConvertKit user or not, you will get some value out of this because it shares some principles behind where we believe email to be headed to be a little bit more collaborative and a little bit more social. And what ConvertKit has built and why they built it and the advantages that they have with it is incredible.

So, as I mentioned before, we're going to be interviewing and getting an update from Nathan Berry, CEO and founder of ConvertKit, a company that I am an affiliate for and have been an advisor for, for about a decade. So I just wanted to share all that up front, but this is going to be a great one because there's a lot of lessons to be learned, especially if you're building something big.

You might be at the start of your startup journey, so whether you are a startup founder, a startup creator, or just a creator in general, it's this will be helpful for you and I look forward to seeing what you think. So here he is, Nathan Berry. Welcome to session 757 of the Smart Passive Income Podcast.

Here we go.

Announcer: You're listening to the Smart Passive Income Podcast, a proud member of the Entrepreneur Podcast Network, a show that's all about working hard now, so you can sit back and reap the benefits later. And now your host, he has a junk email account with over 100,000 unread emails. Pat Flynn.

Pat Flynn: Nathan, welcome back to the SPI podcast, man.

Nathan Barry: It is good to be here. It's good to see you, Pat.

Pat Flynn: You were here when you had first made the decision to sort of drop a lot of what you were working on in the design space and designing apps and such to go full time with ConvertKit. And here we are, I think exactly 10 years later, or at least close to that.

Pretty close, yeah. It's been a wild ride. How would you describe the ride with ConvertKit in one sentence?

Nathan Barry: One sentence. All right. Long but rewarding.

Pat Flynn: Long but rewarding. What were some of the bigger challenges that you had along the way that you can remember reflecting on the last 10 years with ConvertKit?

Nathan Barry: First, like the cold start problem of getting a, any product, but especially a software company off the ground and getting those first hundred customers or so.

And then really the first big partners. When you came over to ConvertKit, I think we were $10,000 a month in revenue. And then like, that was a huge inflection point. So basically like that cold start of getting going than the first partners is sort of two, two problems. I think in the six months after you switched to ConvertKit and then later started talking about it, we grew from $10,000 a month to a $100,000 a month.

Pat Flynn: So it was, that's pretty good. I'd like to maybe take a little bit of credit for that.

Nathan Barry: Oh, you a hundred percent should. I remember this is back in the day. Some people were going to be like, what are even these platforms? You did a live stream. I want to say it was on Meerkat. Could have been Periscope. Yeah, one of the two.

And you're like, here's what I'm doing in my email setup. And people are like, Oh, what's that? What email tool is that? And you're like, I can't tell you yet. This is like at 10 p. m. some night and a bunch of people figured out what the interface was. Someone in the comments was like, I think that's ConvertKit, you know, but you like deliberately like tease it and then not.

And then I want to say like a day or two later you did it again, but you actually said like, okay, all right, I'm using ConvertKit. Here's how it's going, you know, and you did such a good job of positioning us as like, basically of the hot new thing, which we were, but you know, it takes some good marketing to really emphasize that.

And I just remember and really that driving the next problem, which is once you have that crazy growth, how do you scale it? And how do you support that scale? Because we did, it was $10,000 a month in revenue when you became a customer and a little bit more when you became a partner and joined the board.

And then a year later. It was like $250,000 a month and 18 months from that date, it was $500,000 a month. So in 18 months, we went from 10k to 500k a month. And that was really like, I guess the third problem. If it's like cold start, how do you get partners? And then how do you scale? And support those partners, and the customers going crazy.

Those were three of the biggest challenges in there.

Pat Flynn: You know, we see a lot of startups come and have also seen a lot of startups go. I feel like a lot of startups that remain or at least stay a little bit more consistent before, and as they are growing, is related to the partners that they connect with I'd be curious to ask you now reflecting back and also for everybody else starting something, how do you go and make sure you find the right partners?

And and how do you and I can share my answer on the opposite end of yours, how do you encourage a partner to in fact get behind something and promote it and promote it authentically and still support that person and make it a win for everybody involved.

Nathan Barry: I think what makes a big difference is going beyond like the transaction and making it much more of a relationship.

And so, even for us, like, where we started, like, we met at Blog World, New Media Expo, I think people are going to be like, what even are these things? You're talking about platforms that haven't existed in decades. You're talking about conferences that haven't existed in a long time.

Pat Flynn: We're going back in time.

Yeah.

Nathan Barry: But really those in person connections and then going from there into like building those relationships. Like I still remember like us meeting the coffee shop in San Diego, like that kind of thing just goes so far. People are like, Oh, that's what worked to close the deal. It's like, no, no, that's what worked to start a friendship.

So I think that's the thing that we really emphasize and just think about it long term. Like too many people are saying like, Oh, if I could get this partner to do this one webinar, what would happen? And you and I both approached things from the beginning of like, okay, what would this look like to work together for, you know, I think we were thinking like a five year time horizon then, you know, but even now it's been a lot longer than that. And if you approach it from the beginning that way and you find partners who will approach it from the beginning that way and you invest in the relationship, then I think it makes a huge difference.

What would you say?

Pat Flynn: Yeah. I mean, there were a lot of reasons why I wanted to work with you and a lot of it was because you had come at it from a relationship first position and how you could potentially even shape ConvertKit to help a creator like me. You always made it about me, which is really interesting.

And as a result of doing that, I wanted to make sure that I did what I could on my part to return the favor. And to do that, it was very easy because ConvertKit was the hot new thing. It was something that was very useful to the audience at the time that they hadn't seen before. And so I had a lot of creative license to figure out ways to introduce those things and the new concept and the software to people and kind of blow their mind.

Right. I told a lot of people back then when they were like, how are you doing so well being an affiliate for ConvertKit? How did this even happen? I said, well, it's really easy to do when the product is really great. I'd also like to maybe raise my hand for a little bit of credit in terms of helping to shape the product itself through conversations that you and I had.

Nathan Barry: Well, give an example of that. Like we have this feature that's one of my favorites in ConvertKit, which is content snippets. Let's say I write the same email signature. Or I have a call to action for my book or my course, you know, you find yourself rewriting this in, in email sequences or in broadcasts or that sort of thing.

And you were the one that was like, Hey, there should be a library of content snippets that I can then write, I can have my calls to action, my social media links, you know, anything else. And then I should be able to just call that in, for a particular broadcast, or better yet, if I have all these automations, they could all pull in one snippet and I change it one spot and it updates across all these other emails.

And so that was something I remember the board meeting that we were at where you were talking about, like, how great of a feature that would be, and we built it and it's like with our professional users, the beginners don't know or care about that, but the pros are all about that kind of functionality, and that comes from like a tight connection between, you know, a partner and the product. And there's going to be other partners who don't have a product mind like you do, you know, but when you're in there using it all the time, and then you have that, that voice to be like, Hey, if you implement this, like, I know that I'm going to love it.

My team's going to love it. And by proxy, I know that, you know. 10,000 of my closest friends, you know, on this webinar are going to love it too.

Pat Flynn: I think you positioned it really well when you had me come on the board to essentially give me permission to tell you and everybody else on the team, like where things were lacking.

When you gave me that permission, it really opened my eyes to, Oh, this is what this relationship can be like. It's not just me promoting this product. Like I had many other products. I was a affiliate for a very well known web hosting company, keyword research tools, all these kinds of things. But in, in, in none of those relationships were, was anybody really asking me like, well, where can we improve?

And that's really where you started. And I absolutely love that. So some great lessons for those who are sort of in startup mode and working with partners. It's something that can be a win for all sides. And, you know, as time went by, more email service providers, competitors started to finally get smart to finally introduce a lot of the same things that ConvertKit was known for you know, being innovative for.

And now it's like everybody's catching up, right? And, you know, I remember some board meetings that we've had where we've actually, that was the main topic. It was like, Hey, everybody's catching up. Like, where are we in this space now? We are no longer necessarily the front runners in terms of innovation here.

What's happening, can you go through a little bit of the. the mindset of a CEO when something like that happens, your competitors are coming up and they're coming up fast and maybe even innovating ahead of you. How does one navigate that as a CEO of a fast moving software company?

Nathan Barry: Yeah, for us in the email marketing space, it was always very competitive.

Like we'd probably list off. You know, 20 plus companies that are tens or, you know, 50 million a year in revenue or more, but we were the only ones focused on creators. And so we had like MailChimp was focused on all of small business and creators happened to be a small business. And so they're like, great, you have a home here that, that works.

But we got to ride this wave of being the only ones focused on creators. And I don't think we fully understood how good we had it when we were directly competing with MailChimp and MailChimp was kind of competing with us. And then really, what happened is the creator economy grew. Which is funny, because investors early on were like, well, when we tried to raise funding, and failed.

Which I'm very glad for now, but they were like, this creator thing will never be big. You'll never like build a big enough business, you know, now, like obviously it's worked out quite well, but what would happen is, you know, years later, we ended up with a whole bunch of companies focused specifically on the creator world.

So I think of right now, like there's really four, there's us, Substack, Beehive and Flowdesk that within all of email marketing are now just focused exclusively on creators. So that's where we found ourselves like, Oh, we have to step up our game. And so a couple of things that we did that really helped.

And I remember those, those board meetings where we talked through it. One is really focusing on the conversations and the relationships with the creators. I think it especially got hard in two ways. I think we got a level of scale as a company where we started for a little bit loose touch with creators.

And then during like that came right before COVID and then during COVID. I didn't realize how much we relied on conferences and masterminds and dinners and coffee meetups and all of that to get that voice of the creator. So when it came time when like, you know, we went more than a year without doing any of those things, then you realize like, Oh, we're starting to lose that connection and touch with creators.

And so bringing that back and then also doubling down on product velocity, like, so it's basically how good and how actionable our ideas of what to build, like how close to what graders need, and then how quickly can we build them. And I think those two changes, like we restructured our whole product engineering team around how do we ship products quickly?

Like, how do we get a meaningful thing out like every other week? And that's really been. You know, this year, so I think those are the two biggest changes that we made to, like, make sure the company stays competitive for a very long time.

Pat Flynn: How have you adjusted since COVID to stay in touch with the audience and creators, as well as filtering all those ideas that come in for the engineering team?

Nathan Barry: Because you mean not every feature request should be directly built in.

Pat Flynn: I mean, from my experience, and I know just kind of logically that would kind of kill the company, kill the, kill the team, kill everything. And so I would imagine there's some sort of matrix or scoring carters or some method to absorb and intake everything so that it's on the table, but then rank them or grade them and then make decisions on that.

So how does that work? Where does one, in ConvertKit, get to connect with user and then how does one filter through all those requests and all the feature requests.

Nathan Barry: So I think the connections with creators got a lot better once we were able to meet in person again and then just be a lot more deliberate about getting on calls with creators.

We had a team put together, like telling a whole bunch of creator stories, and we had focused on their story and not as much on feedback on how we can help them better. And so like Issa and our storytelling team really put together those other questions, like, okay, what's your product feedback? How can we help you more?

And that was good. And then on the filtering, the ideas were that when the feature request comes in, you really have to focus on. What is the creator or the customer trying to accomplish? Often they'll say, here's how to solve it. And it's easy to be like, cool, let me log that. And yep, thank you. I've got you logged in there.

But what you have to do is really dig in and say, why do you want that? I know, like, what's the problem that you're trying to solve with that solution? And almost like set the solution that they suggested aside and really dig in. And then when you find the thing that you're like, oh, you know, we keep peeling back layers.

And then like across all of these creators that we've talked to, here's a shared problem. Okay. What's a solution that can come to, to solve this broad range of them. And so it's really falling in love with the problem rather than falling in love with a particular solution. And that's what makes the difference.

Pat Flynn: Can you give me an example of a problem that was highlighted in 2023 and then how ConvertKit engineered a solution for it.

Nathan Barry: Yeah, so every like author, podcaster, blogger, writer that I talk to, they all talk about one thing. They want growth and they're figuring it like they're all sharing tips. How, how can we grow all of that?

I was actually having dinner with Jason Pfeiffer, who's the editor in chief of Entrepreneur magazine just this week, he happened to be in Boise. And I was like, Hey man, let's, let's meet up.

Pat Flynn: One of our Experts in Residence at SPI.

Nathan Barry: Yeah. I was going to say that, that he, like, he speaks very highly of SPI and the community and, and you and Matt in particular of just like the connection that you all have to creators and how you serve creators. But he was telling me, he was like, look, when I get together with my author and creator friends, we're all asking, Hey, what's working for growth right now? And so we knew. The more tools we can build for growth, the better. And what we realized is that email has pros and cons.

On one hand, email is amazing for connection. There's no algorithm in the way. I can tag you, you know, based on the fact that you bought my book. I can reach you, you know, time things just to you versus like mass marketing on Instagram, for example. But email doesn't have distribution. And so it's actually, you have to rely on another channel.

And so what we were setting out to do is how can we build distribution native to email. And when you think about all these creators sitting around saying like, Oh, I really want to grow. And you look over here and there's another creator who's like, I really want to grow, but I don't know how. And we realized like, wait a second, you both have the thing that the other person wants.

And if you go to YouTube, their biggest advice on growth is to do collaborations. You know, collaborate with other creators, and we all know this, right, from going to conferences and everything else, like we all have an inflection point in our business that came from another creator that we worked with or met or got ideas from.

And so when we were looking at what to build in, you know the middle of 2022 and talking through that, it was like, okay, how can we like build basically native collaborations into the product. And that's what turned into the ConvertKit Creator Network, which is a way that when someone signs up for my newsletter, it says, Hey, thanks so much for subscribing, why don't you also check out these other creators? Why don't you check out Pat and Sahil Bloom and Susan Cain, you know, like a few other creators that I recommend. And then vice versa, someone signs up to yours, it recommends me and a few other creators. And so now, every bit of growth that I'm pushing for, like everyone that I get from social or LinkedIn or my podcast, wherever I'm growing is now driving growth to you and vice versa.

So it's like this multiplying effect. And we launched that in, I guess, spring 2023, and it's just taken off like crazy.

Pat Flynn: Yeah, it's been very nice to see because for a while, you know, we initially talked about ConvertKit being on sort of the leading edge of innovation and helping creators and email marketing.

And a lot of the tagging things were very innovative. I mean, we used to see them in tools like Infusionsoft and whatnot, and it was just so complicated. You had to pay people to set it up for you and ConvertKit made it really easy. And then of course everybody caught up and it seemed like for a while that, you know, ConvertKit was just kind of in maintenance mode, making sure things were working smoothly. And, you know, some things were coming out here and there and you came out with you know, a checkout system and all this stuff. And, and, and that was great, but for growth specifically, which is like the number one thing you said that people want, and I know this and everybody here listening knows this, there really wasn't anything that was serving us.

We had to rely on our outside platforms to make this happen. So when I saw this happen, it was refreshing because it was like, okay. back again with something new to really dive into what's helping us grow our businesses ultimately and the results have been incredible. Even on our end, we've had hundreds of other creators recommend the Unstuck newsletter here at SPI and we've recommended dozens of different creators and we've helped them grow.

In fact, a couple people have earned an additional extra thousands of subscribers from us because we have vetted them and we recommend them. And there, there is a process of vetting and there is a process of selection and approval. It's not just like Wild West, you can't kind of go on anybody's website.

And so there is still some collaboration involved, but to have it being done natively on ConvertKit is really, really great. And it's really easy. Now, I also know that ConvertKit isn't the first. email service provider that has enabled such a thing. Can you speak to how one innovates over something that has already been done?

How does one take something that somebody else is doing, but, but then make it better? And then what are the unfair advantages that ConvertKit has over perhaps the others?

Nathan Barry: Yeah, so SparkLoop was really the first to build out a recommendation system like this, and they launched it basically right around the same time that Substack also launched recommendations.

What was interesting about SparkLoop is that they were an open network, they worked with any email provider because they're not an email provider themselves. And that was really interesting. We also had very conveniently made a big investment in Sparkloop like a year before they came up with this. And so it was like, Oh, this is great.

You know, they had their referral product and we invested in that and then did a big integration. And I knew that those guys were going to come up with something really good. And so when they did it was fantastic. And so they were the first ones to roll it out. Substack rolled it out shortly after.

And then from there, you know, I think Beehive, a while later, added some similar functionality. I think the big difference with the direction that we're going is that we're building an open network. So I come from a world of like open source software and community and collaboration. And that's why I was so interested in what SparkLoop was doing, because especially in the paid recommendation side, we've talked about the free side, right?

Of I'm recommending you and you're recommending me, but we also have this whole paid component where I can go on there as a creator and say, Hey, I will pay $2 for every engaged subscriber that another creator sends to me. And I have a budget of $5,000 a month, right? And other creators can browse that and say, Oh, I'd love to recommend Nathan's newsletter and get paid for it.

That sounds fantastic. So SparkLoop came out with that paid side very first. And then as they were scaling that one thing they did that was really, really smart is they made it so that as a sponsor or as a creator earning, you could be on any platform. And so what that meant is that like Morning Brew and The Motley Fool and these Market Beat, like these big, big newsletters who know how to monetize really well and are really high quality, they're always going to be on like a Salesforce Marketing Cloud or some of these big enterprise systems. They're never going to be on a ConvertKit or a Beehive or something else because that's not the right fit for them. And so what would happen is now the big brands can sponsor really anyone can sponsor.

And then what it results in is a much higher, like, as a creator, you get paid more for every subscriber you're referring to like a Morning Brew or something, you have a huge collection of newsletters, you can refer to, because it's not, you know, a two sided marketplace inside of a walled garden, it's actually like widely open, and the quality ends up being much higher.

And so what we found, because of those dynamics of like the open marketplace, It's turned into a virtuous cycle where because we have the best sponsors trying to grow, then we end up with the best creators who want to earn more to recommend that, which results in sponsors being willing to spend more because the quality of the subscribers they're getting is higher.

And up from there, we actually found, we have put out an annual report, which is really interesting to look at, but we found out that 95 percent cause they quoted numbers in it, 95 percent of all paid recommendations are done through SparkLoop, which I guess if I didn't mention this earlier, we bought SparkLoop at the beginning of the year.

And so it's now natively integrated and ConvertKit and every other email platform. So we're really pushing this like open network and making it as big and collaborative as possible rather than like closed ecosystem.

Pat Flynn: When you look at it from a business and strategy standpoint, it makes sense to invest into this.

I mean, if you were going to use the paid recommendations, you're getting subscribers coming in and those subscribers could go down a funnel such that you will get an ROI, which then you can put back into the paid recommendations and then you develop this flywheel. I think yourself and Sahil and several other people on your on your side have been talking a lot about the this idea of a flywheel that things begin to grow or snowball in a way that just keeps serving you in multiple different ways.

And I think it's great. I have some questions that I know have been on my audience's mind about the Creator Network, just some initial reactions to them that I'd love to get your take on if that's okay, Nathan. Yeah. The first one is if, if a person's subscribing to my email list, right, which is great, and then they get served another page that says, hey, you might also love to subscribe to these people.

Initially, a lot of people are concerned that aren't I just diluting a person's email inbox such that my emails now are going to be now competing with Ali Abdaal's and Nathan's and Kieran Drew's and you know so on and so forth. What is the best practice or how does one wrap their head around this idea of yes it's cool to help promote other people's email lists but now I'm also competing inbox.

Nathan Barry: Yeah I think competing as a creator is a really Interesting idea because we're used to it in the business world, right? Like, I don't know, Walmart and target are competing and you're like, yeah, that makes sense. As a creator, there is a limited amount of attention, but there's effectively an unlimited number of people that you can get that attention from, right?

Like neither you or I are looking at it and going, okay, I want to grow my newsletter, but it's really going to be limited by the global English speaking population that cares about business. We know that we're so tiny compared to that, that we're not worried about market saturation. And so to what extent Is someone listening to, or let's say reading your newsletter and not mine or vice versa.

So like competition is kind of this weird idea, but we know that each individual has a fixed amount of attention, right? Yeah. I'm not going to read 40 email newsletters, you know, on a week cause that's just not reasonable. And so I think it's interesting to try to balance that. I think about competition probably the same way as email now, as I think about it with competition on social platforms, like we know that on my YouTube channel, someone is scrolling a feed and they're like, Oh, I'm going to pick that one. That seems interesting. They may not engage with every piece of content or scrolling, you know, Instagram is short from video.

We know that our content lives adjacent to other creators and that's always been the case with email. It's just now there might be more creators there. So I guess two things. One, the upside is distribution for great content just got way easier because now we can get in front of so many more potential readers, the other side of it, I was going to say the downside, but I think really just the truth of the matter is that quality matters more than anything. Before you could probably get away with writing a mediocre newsletter and still get 5,000 subscribers and an acceptable open rate and on from there.

In the same way that probably back in the day, you could put out some mediocre YouTube videos and probably still get traction. Try to do that today, and it's not going to work like that. If you're, if your YouTube videos were mediocre, would they go anywhere? Like you put a ton of effort into it because you know that the content all around it is so high quality and you're competing for that attention, but the pie is so, so big. I don't know. What's your take?

Pat Flynn: Yeah. My take is bring on the competition. I mean, I'm, I'm happy to recommend people that I care about and enjoy and also love reading. I mean, to me, that is a service to my subscribers is to go to Ali Abdaal's productivity newsletter because his stuff is great.

I want you to read his stuff. His stuff is different than mine. But when it comes to where there is real competition, which is like literally the inbox and the deluge of subject lines that are there that we have to read through, you know, you can on one hand go, okay, well now I'm going to be up against Ali and his copywriters and everybody else.

And it just makes me go bring it on. Let me fine tune my own copywriting. Let me get better at subject lines. Let me not just be complacent with how my emails are performing, but let me see if I can do even better now. Like it, it almost is a way for me to be even more motivated to, to offer something different and, and have it be a win for everybody.

Still, I want people to go, Oh, Pat's email is even better than Ali's this week, you know, and, and, and I'm okay with that. And maybe that's not necessarily the right mindset for everybody, but that's how I approach it. That's how I changed the story in my head about what is happening in the inbox.

Nathan Barry: Well, there's two things that that does.

One, it's a huge win for consumers where you're like, wait a second. All of these people are now competing to see who can create the best content for me. Absolutely. The next thing that it does is it really builds up individual niches. And Pat, that's something that you've talked about a lot of like really focusing in on a niche.

The, the hard thing about focusing on a niche is that you might not get distribution or get discovered. And so tools like Creator Network really help that where it makes discovery easy. And so someone might join a generic, how to get good at business newsletter and then get recommended a niche online business in the food industry newsletter, right?

And that might be a better fit. And they might ultimately drop the generic one and focus on the niche one, and that'll be a better fit for them. And honestly, we're here to serve. Right, and so this is positioning like as creators, we're serving our audience much better. And then finally, I think what you have to do as a creator is take a holistic approach to it, where you want to understand that your content is being consumed on many platforms.

And it's not, I'm not only posting on social so I can get a follower so I can convert them to the email list so it's on the newsletter. I really want them to engage on all these platforms. And I'd like someone to follow me on Instagram, Twitter, and my newsletter, and then they might skip over this week's subject line and be like you know, oh, that wasn't interesting, but I might have highlighted a section of that in my Instagram stories.

Or had a hook in some way that then said, Oh, check out the newsletter. And then they go, Oh, right. I should do that. Maybe the subject line didn't catch me, but the thing on Instagram did. And now I'm right back to the newsletter. And so I think about wanting to have these different touch points and really engage with a subscriber or a fan in a holistic way.

on each platform that they follow me. And then I'm like, Hey, I now have a YouTube channel. Check me out over here for some long form content. And it's different content, different hooks, different lengths. And it's going to catch that subscriber and hit them in different ways. And I just think of that holistic approach, which I'm now realizing as I say that, that you would refer to as be everywhere, which you may have talked about really a lot.

Pat Flynn: Be everywhere, but not all at once and not everywhere right from the start, you know, pick the one platform to focus on, grow, and then you can actually use that audience to grow elsewhere, right? Because people will want to follow you on multiple platforms or get the short form version of you here, but then the long form version of you here on those days, and they now want to go behind the scenes with you.

So now they're on your Instagram looking at more of your just personal life that you're willing to share and all that kind of stuff, right? And it does become a holistic approach. I'm not just a YouTuber. I'm not just an email subscriber or a newsletter writer. I'm Pat Flynn. And here's, here's all of me in different kinds of ways.

And you can choose and pick. Maybe, maybe somebody only does follow me on YouTube, in which case it's great. I'm going to serve them there when I am there. The other thing I wanted to bring up was for somebody who's just getting started, you know, for me, it was not too difficult to get in the Creator Network and have others go, Ooh, Pat Flynn's newsletter.

I want to recommend that to you. I trust him. I've, he's been around for 15 years doing this. Like I think his newsletter would be great. Or I am a subscriber to that newsletter. Let me also recommend it to my list. How does a person who literally starting from scratch, they just signed up to ConvertKit, they hear about the Creator Network and they're like, Okay, well, I don't have any connections. Do I need to build these connections first? How does one go about best utilizing the Creator Network when they're just starting out?

Nathan Barry: So what I would do is I would browse the Creator Network to discover other creators that you think might be a good fit.

Go subscribe to their newsletter and start reading their content. And then, first you can learn from it. Sometimes, like I've seen creators say, Hey, I'm going to be this creator of this niche. Like I'm going to clone this person's ideas and tactics, but like with my ideas in an entirely different niche.

And I think that's a good thing to do. So what I would do is discover a lot of creators, choose the ones that the right fit and start recommending them. But stay subscribed to them as well, and reply to their content, engage with it. And a couple things that you're going to see happen. First, you're engaging with their content, and they'll see that.

They'll be like, oh, Nathan. Well, they'll make the connection. This Nathan who just responded to my Twitter post, is the same Nathan that I just wrote that reply to in my newsletter. Like, oh, he's a regular reader. And then now, when they're going through their Creator Network stats, they might see like, oh, who's this person who sent me five subscribers?

Oh, that's Nathan. Right? Like, I think you have a story of a creator that you even had on the podcast who you met because they were sending you a bunch of subscribers through Creator Network. Is that right?

Pat Flynn: Corey. In fact, he's been on the podcast now as a result of that relationship that started on the Creator Network, which was, which was really cool.

So I definitely think that's great. As far as a person starting out to clarify when you say go search through the Creator Network that is accessible inside of your ConvertKit account under the sort of growth tab.

Nathan Barry: Yes, you go growth recommendations and there's a discover tab and you can say like, okay, here's my niche.

It'll recommend creators for you to recommend. Now one thing in it, where people make a mistake is they go and recommend say five creators and they sit back and wait and then they don't get any recommendations back.

Pat Flynn: They're not reciprocating. Why?

Nathan Barry: Yeah, because that other creator went sweet I have no idea who that person is, but I'm glad they just sent me five subscribers you have to actually go out and build those relationships And I would encourage people to do that the way I was talking about it, like following the creator, responding to them, you know, building that relationship gradually online and then maybe getting on a call or that sort of thing.

Second, do it at events. Events are such a good place, especially in your particular niche, you know, go to the food blogging conference, go to the real estate conference, like whatever your niche is. Go to those events and really seek out and meet creators, host a meetup yourself, host a creator happy hour.

The next thing is other communities that you're a part of, right? If you're in SPI Pro, right, there's a whole bunch of people who are there saying, Hey, I'm trying to learn how to grow an online business. It's like, go find the people in your niche and form those relationships. You're not going out and being like, Hey, how do I get Pat Flynn or Ali Abdaal to recommend to me?

Right? That, that's, that's the wrong level and it's not going to work. But you're saying, Hey, who could I form a mastermind group with? Who could we build a pod with who? Maybe they have a hundred subscribers and they're adding three to five subscribers a week because that's the level that I'm at. And really actively seek those people out and build those relationships.

And then when you're talking and you meet someone you say, hey let's help give each other accountability and and work together, you know, like a mastermind idea or just friends then also say and Hey, what if we recommend each other on Creator Network? Then you're going to drive that growth. So it's basically take a really active role in it.

Pat Flynn: Yeah. I mean, I got to do work?

Nathan Barry: That's the unfortunate thing about the online business world is you got to do the work.

Pat Flynn: It's also the fortunate thing. It's like those who, who work hard and work smart, you know, and build those relationships to serve others, other creators and their audiences, respectively, they get rewarded.

And it's great. And what I love about the Creator Network, it's, it's just allowed for those connections to happen in a way that easily serves each of those communities together. It's a tool. It's not going to solve all of your problems, but it is as useful as time that you put into it and those relationships.

And it has been very useful and it is currently today the number one thing that is recommending new subscribers to our email list is the Creator Network. You know, we do a lot of things to build our email list and it is the number one thing right now that still continues to grow our list over anything else, which is a big testament to you and the team and what you guys have built there.

So well done on that.

Nathan Barry: Thank you. One quick thing that I was going to add with that. Is for anyone listening who has their own community, a huge value add that you can do for your community is to help form those connections, right? Like a lot of what we do is, you know, people come to us and they take a course, they sign up for a membership, that sort of thing in order to meet other creators and learn and ultimately grow.

Well, guess what? You have these pods of creators who they all have what the other person wants. And so you can come in and say, Hey, we've got 100 people in this community and I'm going to form for whoever wants, I'm going to form five pods on the Creator Network, like who's interested. And then people will volunteer and say like, Oh me, you know, and then you can, your community manager can start to assemble these groups.

And really do that work for you. And what will really happen is your community will build stronger bonds to each other, which they will forever credit back to you as the person who made that connection. And they'll get better growth results. Like you're trying to teach them how to grow their business.

Well, you just made the connection and gave them the tool to help them grow their business. It's a great way to deliver on the promise that you had of, you know, the course of the membership that, you know, they originally joined.

Pat Flynn: If you're out in the wild, and maybe you're inside of a community virtual, or maybe in person, do you just go like, hey, are you on the Creator Network?

And like, just, you just say, hey, are you, do you have that? I do. Let's, let's, let's do this thing. It's just kind of, just kind of natural like that. What if a person doesn't, or they're not in the Creator Network? Where does one go from there? So if a person's listening, they're, In ConvertKit, they want to connect with other people in their community, but those people are not yet in the Creator Network.

What would be the pitch? What would be the best way to help them?

Nathan Barry: Yeah, so right now, at least for the free recommendations, you have to be on ConvertKit. We'll work on expanding that further. The paid side, you can be on any platform. And so, it'd be switching to ConvertKit and signing up. So let me just say that there's some really exciting things coming on the ConverKit side.

I can't, like, this will release slightly before those, but to make ConverKit wildly more accessible for creators. That's a good tease, right?

Pat Flynn: I might know what they are as an advisor, but I'm not gonna I'm not gonna spill the beans yet. It'll happen when it happens.

Nathan Barry: Basically to make it so that anyone who's thinking about signing up for ConverKit or trying to decide Oh, is this the right fit?

It's just, it's a natural, like welcome everyone in and that will be huge. So the biggest thing is if you're on another platform, we'll help you switch to ConvertKit. We have a migrations team we'll do it for you for free. And you know, if you're starting from scratch, we've got a great free plan to a thousand subscribers.

Yeah. And then you can get into Creator Network and start recommending people. And so it's really this reason to form community and get that growth.

Pat Flynn: Nice man. I love it. I think we can spend another hour or two talking about creators and utilizing email and the Creator Network. But I want to ask you one final question here as we finish up.

And it's related to the future. You know, we talked about the past to start out with. We're going to talk about the future now, and we're going to talk about, you know, the next two to five years down the road in terms of what the audience and especially ConvertKit users can expect from the team and from you and kind of what can you tell us to get excited for the future besides this thing that's about to drop that's a little bit more specific.

Nathan Barry: Yeah. So at a high level, our mission as a company is we exist to help creators earn a living. And so that's the lens that we view everything through. And so we're looking at how can we Help you make money, help you pay your mortgage and grow your business as a creator. And that's why we launched our sponsorship network, you know, it's like, let's directly sell sponsorships for you.

That's why we acquired SparkLoop and built up a whole paid recommendation side. And then really back from, you know, revenue or upstream from that is usually subscriber growth. And so we're really, really focused on that side of it. And one step up from subscriber growth, you know, up the funnel from that is usually connections.

And so the reason that we called all this Creator Network and like went, went out and bought CreativeNetwork.com and put everything under that umbrella is that we want email and like newsletters to be much more collaborative. And so you'll see us over the next few years, come out with a lot of features, not just to say like, Hey, browse the creator network, find someone to partner with and go contact them somewhere else.

But we're like, what if we could help form those pods better? What if we could host actually something that we're about to launch, well, it'll be live by the time that this comes out is we're doing creator happy hours. So twice a week, we're doing a, just a zoom call where 40 to 50 creators can jump on, learn something for 10 or 15 minutes, and then meet other creators in small groups.

And maybe you'll find someone who you might want to recommend on Creator Network. Or you might find someone who would be a good fit in your mastermind. But we want to say like, hey, how can we turn these simple collaborations into deep connections? And then also, what other kinds of collaboration features can we build?

Like, I think it'd be really cool if you and I are doing a joint promotion for something, and I could share my email list into your account. Or we could collaborate, like, you could say, say I'm going to do a promotion for SPI Pro. You could share a segment with me. I don't get to see any email addresses in it, right?

But you could say, share the segment as an exclusion. So when I send out my broadcast, it excludes everyone who's already a customer of SPI Pro. And that way, I'm not, like, I can target things much better. So that's, like, I want to build, like, Creator Network is the collaborative version of all this. What if I could write a snippet, to go back to that earlier idea?

And share it across to your account, like, there's no reason it couldn't work that way. And so that's the way that we're thinking about how do we build the most collaborative social product possible, but still give every creator the individual control of these are my subscribers. Here's exactly how I want to talk to them and build to have all the customization and flexibility.

Pat Flynn: So email almost becoming more social and collaborative. And I love that you and the team, and I know a lot of people on the team, a lot of the higher ups, and even just people who you've just hired and they're all in it for the right reasons. And so congrats for the journey that you've been on and the adventure continues.

So I look forward to having you back here, Nathan, at some point to talk about whatever the next big thing is for ConvertKit and how we can all utilize that to better our businesses and our lives as creatives. Thank you so much for what you do. I'll drop an affiliate link for ConvertKit in case people are curious about the Creator Network and all that stuff right after we finish up here.

On behalf of all of us using ConvertKit, thank you so much for creating such a wonderful tool and for caring about us and for continuing to think about how to serve us in the future.

Nathan Barry: Yeah. Thank you for having me on. Thanks for all your support over the years.

Pat Flynn: Of course.

All right. I hope you enjoyed that interview with CEO and founder of ConvertKit, Nathan Barry.

Amazing what they have put together, what they've been able to build and how they've been able to still stay relevant after so long. A company to be here for this long and still stay relevant and still stay innovative, is just a testament to how well they are in tune with what it is that the needs are for us, for, for us creators.

And for a while there, it didn't seem like they were really listening or at least taking action on the things that we needed, but now it seems like they are again at the innovative forefront of all of that, and I'm just very proud to be an affiliate, like I said, but more so just a partner and also a friend of, of Nathan, I'm very proud of what he's been able to build and the team over there at ConvertKit too. So shout out to team ConvertKit, I know a lot of you listen to the show and also just really stoked for the tools that are coming. And I'm also very proud to be an advisor to this company as well. And the experience as an advisor has been incredible. They've been very open and very honest with me and the other advisory members along the way.

And it's been a lesson for me in terms of how one might be able to build something much bigger than what one could do on their own. So thank you to Nathan. Thank you to ConvertKit. Thank you.

If you'd like to check out ConvertKit and get access to their creator network, as he mentioned, there is a amazing free trial that allows you to have over a thousand subscribers, or at least at this time, a thousand subscribers for free.

If you go to smartpassiveincome.com/convertkit, you can sign up through that link. We get a little kickback for that as a thank you. And it's at no extra cost to you. No payments needed until you reach the threshold that you are ready to start paying for either some of those more advanced tools or you start to unlock more subscribers, which is a great thing.

So again, smartpassiveincome.com/convertkit. Hope you enjoyed this episode. We're going to go deeper with some founders and creators here soon. So make sure you subscribe and looking forward to seeing what you think about the next one too. Cheers. Thanks so much.

Thank you so much for listening to the Smart Passive Income podcast at SmartPassiveIncome.com. I'm your host, Pat Flynn. Sound editing by Duncan Brown. Our senior producer is David Grabowski, and our executive producer is Matt Gartland. The Smart Passive Income Podcast is a production of SPI Media, and a proud member of the Entrepreneur Podcast Network. Catch you next week!