#346: Robbie Kellman Baxter reveals how to recession proof your business with the forever transaction

Listen To Episode #346 of the Get Clients Now podcast and Discover How to Recession Proof Your Business with The Forever Transaction:

Robbie Kellman Baxter reveals how to recession proof your business with the forever transaction

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There’s still time to prevent your business from being slaughtered by one of the greatest destructions of private wealth in modern history.

Today, Robbie Kellman Baxter reveals how to recession proof your business with the forever transaction.

Prevent your business from being slaughtered by one of the greatest destructions of private wealth in modern history, Coronavirus recession.

Robbie Kellman Baxter, the individual for helping Netflix become a $150 Billion powerhouse reveals how to recession proof your business.

The SECRET for building forever transactions with the people you serve in a way that drives value.  Drives value for your clients and for your business.  Your product has to produce the best results for your best clients so you can earn their trust forever.

How to Recession Proof Your Business and Build a Subscription Model So Compelling, Your Customers Will Never Want to Leave

SHOW TRANSCRIPT:

(Host) Ken Newhouse:
I’m your host Ken Newhouse.  Yes, the “real” Ken Newhouse and I want to welcome you to episode #346 of the Get Clients Now podcast.  On today’s episode (we’re going to talking with) Robbie Kellman Baxter about her new book and how you can recession proof your business.

As everybody knows, Robbie is one of the  people who worked with “Netflix” in the early days.  Helping them to become a $150 Billion dollar (media) and Membership powerhouse.

Robbie’s newest book “The Forever Transaction” has just hit the shelves on Amazon.  Thankfully, I was one of the lucky few who got an advanced copy of the book so I could read and review it.

So, after reading The Forever Transaction, the goal was to get Robbie on the show to talk about it.  During the interview Robbie revealed a variety of NEW methods that get you clients she revealed in the book.  She also revealed how to recession proof your business with The Forever Transaction Framework’s business model.  

A business model that’s more relevant than ever by helping you recession proof your business as we battle the Coronavirus.

Before I welcome Robbie onto the show today, I want to respond to an email I received last week.  An email from one of the newest members in my Platinum coaching group: Bill Lange.

Here’s a shortened version of Bill’s question:

Bill Lange Question:  “I’m retiring from my corporate job in the coming weeks.  I sold packaging to companies like Frito Lay and Volpe’ foods and I’m going to start a consulting business.  A business where I’ll be helping businesses sell packaging to some of the largest Brands in the world.

I’m in the process of figuring out my fee structure and what I want to charge for my services.  What’s the best method for calculating my fee structure on a “per hour”  and “per day” basis? 

How to Recession Proof Your Business and Build a Subscription Model So Compelling, Your Customers Will Never Want to Leave

(Host) Ken Newhouse:
Thank you Bill, for submitting your question. Let me answer that by saying this first:

Just about everything that I do in my business is completely contrary to what would be taught to you.  Specifically, taught about the coaching or consulting business from any traditional source.  Especially right now as it is critical to recession proof your business.

For example; if you were to go to Coach University or some variation of it (no disrespect to those folks).  Or if you go to the bookstore and buy a book about this, you are going to find a very different set of premises about consulting businesses and businesses that use a similar model that are premises.

First of all, you are going to find that they are mired in a “dollars for hours” culture. Which means that the models they teach are all about how to charge $75.00 an hour to talk to someone one the phone, and “isn’t this cool!”

Or how to make $750.00 or a $1,000.00 a day. So the ENTIRE Culture is about trading a “block of time” for a “block” of money.  

  1. First of all (as a practical matter) that’s NOT a business … just so you know. That’s a job.
  2. And secondly, that model has NO leverage. It has NO multiplier effect.

Therefore, you will eventually reach a point where you can actually only get so much from your clients per hour or per dollar.

And regardless of the value you deliver, clients won’t give you anymore.  This will eventually lead to you being unhappy with it because your income will be capped.

If take a guy with a $300,000 business and I re-engineer the business so it becomes a $1,000,000.00 business what happens?

(Host) Ken Newhouse:
There are only so many hours in a day, week, month. There only so many hours you can only stand to do what you do so long.

As example, every psychologist doesn’t want to be a psychologist anymore. Every lawyer doesn’t want to be a lawyer anymore. And every CPA doesn’t want to be a CPA anymore because they’re “stuck.”

They get to a certain point and they’re stuck. And in this pure exchange of dollars for time (from your standpoint or from mine):

“What we do for clients, meaning the value we deliver to them. We can’t take ENOUGH money from them for it to be an accurate representation of the value.”

So, let’s look at an example of a guy doing a day of consulting with me: If take a guy with a $300,000 business and I re-engineer the business so it becomes a $1,000,000.00 business what happens? Like, I totally recession proof your business and make triple what it makes.

Arguably, I should get $700,000 for the day of consulting based on the value I delivered to him. He can start making his money the second year. But, I don’t care how good I am at:

  • Everything I teach you on this podcast
  • The things I teach on my online trainings
  • Strategies and tactics I teach in my coaching group and in one on one consulting relationships

Getting somebody to write the $700,000 check for the day of consulting with me is like too much!

Maybe there’s somebody out there getting it that I don’t know yet, but … it’s too much! If you go to a therapist for six sessions and they save your marriage, how much is that worth?

They feel this way because they view the relationship as an exchange of minutes for money.

(Host) Ken Newhouse:
Well, it’s worth a lot more than anyone is willing to pay them. Now, some therapists get a lot more than others because of the techniques that I teach them.

But still, the therapist is GROSSLY underpaid. On the flip side of this, the CLIENT ultimately feels that they are overpaying.

They feel this way because they view the relationship as an exchange of minutes for money. And so “Billy Bob” who’s your client, sits down and figures out how much he’s making in his business “per hour” , right?

Whether he thinks about how to recession proof your business or not, he’s looking at it like this:

“Well, I make a hundred and forty dollars an hour and I’m paying this guy $2,000 an hour! Somethings wrong here!”

So, the entire premise of structuring your business so that you’re charging “by the hour” or “by the day” is suicidal.  That business model eventually leads to everybody being unhappy. The clients are unhappy; you’re unhappy; everybody’s unhappy.

As a result, you’ve gotta get outta that box in as many different ways as you can. Additionally, you should know that all of the traditional training (meaning that) if you go hand around with any of the traditionalists:

They are all about putting you in that box and keeping in that box! Interestingly, they have what you could call a disapproving viewpoint of everything that is done outside of that box.

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My $20,000 coaching program for chiropractors in 2010 was sold as “cash out of percentage above base

My $20,000 coaching program for chiropractors in 2010 was sold as “cash out of percentage above base. It was an excellent program that helped you recession proof your business (practice) and it worked.  

So, very quickly let me explain that to you. Percentage above base is a way of getting paid. And other than with private clients and in my coaching groups, I won’t be teaching this model till later this year.

I’ll cover it in detail at the ‘live’ sales control training I’ll be doing online. We’ll be looking at its “pros” and its “cons,” but percentage above base is essentially in that case this: Sitting down with the doctor and saying: “OK how much did you do last year?” And I’ll use simple numbers now to make this easy.

  • Doctor: “I did a hundred thousand dollars”
  • Ken Newhouse: OK, and the rate of inflation is 10% and how much growth did you have in your practice over the year before?
  • Doctor: “Ten percent”
  • Ken Newhouse: OK, rate of inflation “TEN” … inflation “TEN.” So, we’re gonna give you 20. We’re gonna set your base at $120,000 for the first year of your agreement. Then we’re gonna roll another twenty on and raise it to $144,000 the second year.
  • Ken Newhouse:  And we’re gonna put another 20% on it so it’ll be $168,000 and some change for the third year. That’s your base, right? And then we get 30% of everything that’s created above base.

Well, they’ll agree to that, by the way, because “it’s air”, right? And they don’t believe it’s gonna happen anyway.

At that point, what we’re going to deliver to them is irrelevant. It’s the money outcome that IS relevant!

But then, if you can:

  • Convince them that you’re gonna go to a half million every year
  • You pencil out what they’re gonna end up paying you …
  • But they can discount all of that out by giving you $20,000 all at one time.
  • It becomes pretty easy to get the $20,000.00, especially if you can get them financed.

And so that’s how that is sold. What’s important about all that is that I’m just giving you an example.

An example of how we got out of the box of talking about HOURS!  At that point, what we’re going to deliver to them is irrelevant.

It’s the money outcome that IS relevant. 

The second thing is that all of the traditionalists have an “academic” orientation about these businesses. By that I mean two things

  1. They’re hung up on credentials and qualifications and certifications. And do you have the “appropriate” letters of the alphabet after your name. The appropriate credentials that “allow” you to consult with people in this subject area. Or to coach people in this subject area.

Now, what is EXTREMELY IMPORTANT to understand about that nobody cares, except the people issuing the letters of the alphabet after the name. No one else cares!

The marketplace DOES NOT CARE, AT ALL!!! It’s not an advantage. It’s not a disadvantage. And by and large they don’t ask.

The other thing is that the academic orientation leads them to “ladder thinking”

I’ve been directly asked maybe three or four times in 25 years if I have an MBA or some special certification) for consulting.  Some special certification that says I can help you recession proof your business.

In every case (but one) it’s been an employee that was asking, not the client. And in that 25 years, NOBODY has like “refused to write the check.”

See, it doesn’t matter unless you’re working as a physician or whatever where the state and federal government regulates what you’re doing. You don’t need any of it. Understand that you don’t need to get anybody’s permission to do what you’re doing; just go do it.

The other thing is that the academic orientation leads them to “ladder thinking”

2. The other thing is that the academic orientation leads them to “ladder thinking.” Now, ladder thinking is VERY important for you to get everybody else to do.  If you want to help clients recession proof your business, you have to build ladders into your business model.

You want to show everybody you take money from “ladders.” Because they’ve all been conditioned to climb one if you stick it in front of them.

So, you wanna be sticking it in front of them and as soon as they get to the top of that one … you wanna be stickin another one in front of them. And another one in front of them … and another one in front of them, because they’ll climb it.

But it’s very important for you never to climb one. So, you gotta show other people ladders, but if somebody shows YOU a ladder … you gotta laugh at it. Because you gotta know that a bunch of people like us sat in a room and figured out the ladder. And we figured out the ladder for one reason, and one reason only: To control people. That’s why we figured it out.

And so, Boy scouts of America has a ladder. A bunch of people sat in a room and figured it out so they could control “the kids and the parents.” That’s what it’s there for.

It isn’t there for any other reason. And so it’s really, really important for you “laugh at em,” but to make sure you construct em.

Why, because it’s one of the best ways to control people.  You have to be able to control clients if you want them to follow your plan.  If you lose control of them and they’re not compliant … GAME OVER.

Lastly, they traditionalist are all mired in poverty consciousness thinking. They are mired in their own version of a “poverty outlook.”

Last … they’re all mired in poverty consciousness.  As an example:

  • If we took a group of Coach University coaches and let them listen to what I’m telling you
  • And we had some Life Coaching Institute graduates listening to the show right now
  • As well as having a few MBA’s listening to the show right now 

And you let them hear everything I just said? They would either go running and screaming from the room.  Or they would be trying to figure out how to get our certifications yanked from wherever we got em from.  Because; “How dare you charge that kind of money” … and I mean it would START THERE!

So, they are mired in their own version of a “poverty outlook.”  They have in their head you should only be able to make so much per hour.  And that’s so much better than what everybody else makes per hour, so that’s fair.

So, my take on this Bill is simple. To make the maximum amount of money and recession proof your business … You want to do whatever you can to set your business up so that you’re not using a model that has you “charging by the hour, day, week … whatever, right?”

Because if you do, you’re slamming a lid on the amount of money you can make … and you’re inherently in the minds of your clients going to devalue what you can do for them.

I teach my Clients and Members how to re-engineer your business so that there’s no limit on what you can make

Like I said; one of the things I teach my clients, coaching group members and at the ‘Live’ Sales Control Online training is:

  • How to re-engineer your business so that there’s no limit on what you can make.
  • And there’s a lot to that process, but it can be done in any business.
  • It can be done in any marketplace.

I did it as a chiropractor many, many years ago when I took all my clinics and went to a cash-based payment model.  Meaning I stopped accepting insurance.

And I’ve helped dozens and dozens of clients like dentists, chiropractors, coaches, consultants, ad agencies, personal trainers … even medical doctors re-engineer their businesses.

Re-engineer their businesses so they could escape the “dollars for hours” model.

Robbie Kellman Baxter's NEW Book "The Forever Transaction" Is The Key To Recession Proofing Your Business

Alright, let me run through a quick introduction for Robbie Kellman Baxter’s new book.  Well also do a short run through of her bio and then we’ll welcome her onto the show.

From the author of the breakout bestseller, The Membership Economy, comes a ready-to-use game plan for running a successful, and sustainable, subscription business.

A veritable blueprint for success in the new membership economy, this book is a must-have for organizations of any size.

It’s a true game-changer. Baxter takes readers through every step of the subscription business process—from initial start-up or testing of a new model to scaling the operation for long-term growth and sustainability to revamping your culture so everyone works together to optimize customer lifetime value.

It covers all the essentials like subscription pricing, Software-as-a-Service, digital community engagement, and freemium incentives as a way to turn casual browsers into cash-paying superusers.

It also features first-hand insights into subscription superstars like Amazon and Spotify. Most importantly, it shows readers how to build lasting relationships with their customers that are the very foundation of business success—today, tomorrow, and forever.

The Forever Transaction: How to Build a Subscription Model So Compelling, Your Customers Will Never Want to Leave

Baxter takes readers through every step of the subscription business process—from initial start-up or testing of a new model to scaling the operation for long-term growth and sustainability to revamping your culture so everyone works together to optimize customer lifetime value.

It covers all the essentials like subscription pricing, Software-as-a-Service, digital community engagement, and freemium incentives as a way to turn casual browsers into cash-paying superusers.

It also features first-hand insights into subscription superstars like Amazon and Spotify. Most importantly, it shows readers how to build lasting relationships with their customers that are the very foundation of business success—today, tomorrow, and forever.

Robbie Kellman Baxter is best known as the creator of the popular business concept membership Economy.

The Membership Model Can Help you Recession Proof Your Business So That It's Profitable For Years and Decades To Come

She is the founder of Peninsula Strategies LLC, a management consulting firm, as well as the author of the bestselling book, “The Membership Economy: Find Your Superusers, Master the Forever Transaction & Build Recurring Revenue” . She coined the popular business term “Membership Economy”, which is now being used by organizations and journalists around the country and beyond.

Her clients have included Netflix, the National Restaurant Association and The Mail Newspapers in the UK, as well as dozens of Silicon Valley SaaS and consumer subscription companies. Over the course of her career, Robbie has worked in or consulted to clients in more than twenty industries.

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