Stu Mclaren: Predictable Profits

[00:00:03] Jason S. Bradshaw: Hi, and thank you for joining us for another episode of Chats with Jason. I am of course, your host, Jason S. Bradshaw, and this is the show that helps you transform the experience to transform your business.

[00:00:17] Jason S. Bradshaw: Now, today's guest, I am absolutely excited to bring to you the conversation that we're about to have.

[00:01:01] Jason S. Bradshaw: And above all else, he prioritizes his family and that comes through in everything that he does.

[00:01:15] Jason S. Bradshaw: Mr. Stu McLaren, welcome to the show.

[00:01:20] Jason S. Bradshaw: Now I'm sure we're in for a few stuisms during this episode. And I can't wait to dive into things.

[00:01:35] Jason S. Bradshaw: Now we will absolutely get into that, but can you share with the audience a little bit of your backstory please?

[00:02:09] Stu Mclaren: Fast forward 2008, I had built a, very successful mid six figure a year business. It was a consulting business and things were cruising. I was doing everything that I had set out to do. And then my wife and I, we got married in 2007, and then we start having serious conversations about growing our family in 2008. Now, for the record, I wanted kids. I wanted to be a dad, wanted to be a father, but every time we had these conversations, there was like this knot in my stomach and I just couldn't, I couldn't figure out what it was. Then I had the realization that the thing that was causing that anxiety every time we talked about kids was I realized that I had a good business, but not a great business model. Because although the business was booming, it required my time, me personally, trading my time, for my clients. And so what I realized was that like if I wanted to be a present husband and a present father, something had to give because the only way to grow that business was to give more of my time, and I didn't have any more time to give as it was, let alone the fact that, we're talking about having kids.

[00:05:13] Stu Mclaren: So that's essentially the backstory. But it all started from a pain point of great business, but not a great business model. And really shifting the mindset around finding a business model that allowed me to develop recurring revenue.

[00:05:37] Stu Mclaren: Yeah. Okay, so one of the big lessons and the reason I sold my shares in the first software company was on paper, everything was awesome. Like I had a great business partner, great team, great product. But the thing that I did not like about it was that it was built on the back of WordPress. And that meant that any change or decision that was made by WordPress would instantaneously have a trickle down effect on me and our business. And I just did not like that. And because WordPress would make a change and then it would cause something to break and then it would have this domino effect. Now we got tens of thousands of customers whose thing doesn't work. And it was just too much stress. And it was stress that was like all provoked because we were not independent of WordPress. And so that's why you'll see my second software company, it's a SaaS. It is not dependent on any other platform and it's for that reasons. That was probably one of the biggest lessons learned in that whole journey.

[00:06:59] Stu Mclaren: Yeah, there are all kinds of different types of memberships. I certainly talk about this in the book, there are four different types that I generally will put most into a bucket. If we just take a step back and just think about all the subscription services and memberships that we belong to today, we start to see that there are many different ways that this can take shape. From like Netflix and Spotify to Amazon Prime to Costco. Do you know that, 70+% of Costco's bottom line profits come not from what they sell in the warehouse, but come from their membership fees. That's a crazy number when you think of this. We're talking, billions of dollars, and bottom line is that there are really four different types of memberships.

[00:08:34] Stu Mclaren: Second would be a service-based membership. So similarly, this is where you're taking a service and instead of hoping that somebody comes back and buys a service again, you create a membership where you know that with certainty that those customers are gonna pay you at the beginning of next month. So a couple examples. There's a barbershop here in Toronto. Instead of paying one time for a cut, you pay a monthly fee and you get a certain number of cuts. They give a slight discount to the customers that belong to the membership. So there's an incentive and advantage for the customer, but as the business owner, they now have the certainty and predictability of knowing that at the beginning of the month, they're gonna get paid by all of those members. Transforms the business, whether it's a barbershop, whether it is a Medcan spa, whether it is a massage therapist. Mary Claire Fredette in our community, she's a massage therapist. That's what she did. She had so much unpredictability of knowing if and when clients would come back and get massages, so she created a membership and instantaneously created predictability leveled out her revenue each and every month. And interestingly enough, I caught up with her a little while ago and I was asking her, I said, have you launched your membership again? And she said, no. I, my initial thought was like, oh, no what happened? And she's no, Stu I haven't needed to. She's like, the 80% of the people that signed up with me three years later are still with me today. Just imagine that for a minute, like the lifetime customer value of those people who sign up for a membership. It's crazy. And so whether it's car washes, barbershops, spas, massage therapists, there's all kinds of ways to turn a service into a monthly membership.

[00:10:53] Stu Mclaren: Under the learning new skills. You're not gonna go from not knowing how to paint to becoming the Picasso like that. It takes time to learn those skills. Or you're not gonna go from not knowing how to grow a business to having a thriving business like that. It takes time to learn those skills. Or you're not gonna go from not knowing how to sell to becoming a great salesperson like that. It takes time to learn those skills. And then, as I said, the other one is like where you're creating convenience. So we see all kinds of examples of this. Andrew Crouch over in Australia has got a great membership. It's 350 bucks a month. He helps real estate agents with Facebook ad templates. So they don't need to be a Facebook ad specialist, they can just modify his templates and very quickly and effectively sell homes on Facebook. And if all they do is sell one more additional home as a result of the ads that they're using from this membership, it's paid for itself many times over. That's an example of creating convenience. Nicole Melton does the same in hers. She helps businesses that are in the beauty profession and she provides them social media templates, or there's many examples like Anna DiGilio or Kaitlyn and Jessica who have multimillion dollar a year memberships providing lesson plans for teachers. And so what they're doing is they're taking something that was difficult or time consuming for teachers, which is lesson plans, and they've made it easy. They said, listen, just pay a low monthly fee. You don't have to worry about lesson planning anymore. We'll do it for you. Just focus on serving the kids in the class. And so they've got thousands of members part of their membership as a result. So those are three product base, service base, and knowledge base.

[00:13:06] Stu Mclaren: So there's all kinds of different ways to apply that to virtually every kind of business, whether it's a product based biz membership service-based membership, knowledge based membership, or community based membership.

[00:13:40] Jason S. Bradshaw: Now your book which I am the wonderful owner of two copies in physical form, and we're gonna give one away to an audience member that the first audience member that dms me after the episode goes live, we'll get a free copy of your book shipped out via Amazon because it'll just be the fastest way.

[00:14:23] Jason S. Bradshaw: What's stopping people from actually taking that step though?

[00:16:19] Stu Mclaren: And in that is where you begin to build. And so oftentimes a membership starts with a handful of members. Like I think of Jennifer Chamberlain, she started with 20 founding members. After the first year, she had grown that to a hundred. After the second year, she had grown that to just over 200, but it was her third year that she hit the inflection point. She went from 200 to more than 2000 members. It became a multimillion dollar a year membership and it only started with like less than 20 members. So we often overcomplicate, overthink. And as a result, it prevents us from doing the most important thing, which is taking action and getting it moving.

[00:17:18] Stu Mclaren: Like the number one reason that people cancel is overwhelm. So that's a good thing for us because that means we do not need to create anywhere near as much as we think. When we do that, we prevent the overwhelm, which means more people implement, they get better results, and that leads to higher retention. Those are a couple things that often prevent people from moving forward is, one, they overcomplicate it, and number two is that they provide too much and overwhelm their members inside the membership.

[00:17:59] Jason S. Bradshaw: One of the other aspects of the book that I absolutely love is even if you're not looking to launch a membership, there's some real golden nuggets in terms of just how to grow a more successful business.

[00:18:20] Stu Mclaren: Not in the membership world because for us, the membership world is not about that first sale. It's about the repeat sale and the repeat sale and the repeat sale. And so what we've gotta pay attention to is like what influences those repeat sales? And in onboarding studies show if you can create a positive experience in the first 30 days, you can on average, triple the lifetime value of that customer. That is staggering for businesses. And so then the question becomes, okay, what do you need to do in that first 30 days to create that positive experience? And what I've learned working with tens of thousands of different types of memberships in all kinds of markets, there are really three key things that you and I can do to influence that positive experience.

[00:20:46] Stu Mclaren: Second thing is helping people form one meaningful relationship. And the best way to demonstrate this is my family and I, we moved to a new area a few years ago. That meant that our kids were going to a brand new school. They didn't know anybody. And as parents, all you want is for them just to feel settled. And I remember we walked the kids to school and we found their teacher and we were just, my wife and I were just kinda please just let this be a good day for them. We come back at the end of the day and the kids were all coming out of school, and I'm looking and watching and trying to see whether it's my daughter first or our son first. Our daughter comes running out and she's got this huge smile on her face I said to her, I'm like, how was it? She's dad, this is the best school ever. I'm like, really? I'm like, tell me why. She's you know how I used to go to a Montessori school? I said, yeah. She said, I met a girl in my class that used to go to Montessori school too. I'm like, that's amazing. She's yeah, but dad, it gets better. I said, tell me how she said. You know how I love riding horses? I said, yeah. She said she loves riding horses too. I'm like, oh my gosh. She's but dad, you won't believe this. You know the new stable that I'm riding at? I said, yeah. She said, her mom and dad own the stable. I'm like, what? I'm like, that's crazy. She's yeah, dad. This is the best school ever. Timeout. Her whole framing that this was the best school ever was because she made one meaningful relationship.

[00:23:15] Stu Mclaren: And then the third component of a great onboarding is we help our people get some kind of a win in that first 30 days. And so oftentimes we think it's gotta be a gigantic win. It doesn't. It just needs to be a step in the right direction. And then we wanna reflect that back to our members and we wanna celebrate them and we want them to realize that is creating momentum towards the outcome that they're after. And if members can experience a small win, it creates confidence, and confidence creates momentum, and that's what keeps them happy and paying month after month.

[00:23:58] Jason S. Bradshaw: Fantastic stuff. And there was a key takeaway at earlier there where you said. It's not about the sale or the transaction, it's about the repeat sale. Having them come back and my call out to anyone watching today or listening is in your business, are you so focused on that transaction, that initial transaction that you're harming your business by not focusing on generating the love from your customers that leads to repeat and referral business? Because whether you're in a membership or not, that repeat and referral business is what's going to sustain you and grow you.

[00:24:45] Jason S. Bradshaw: But there's one thing that we haven't talked about, and that's the charity that you and your lovely wife are involved in and I actually had the pleasure of having Amy on this show just a few years ago when she launched her book. But Stu, can you share with our audience a little bit about the charity that Amy and you founded?

[00:27:58] Jason S. Bradshaw: Yeah, absolutely agree. And we'll put details in the show notes around Village Impact for those that are interested.

[00:28:23] Stu Mclaren: Yeah, for sure. Thank you for that.

[00:28:42] Stu Mclaren: So definitely go get a copy of the book. You can get it on Amazon. You can get it at your local bookstores. You can get it from our website, which is stu.me/book.

[00:29:37] Jason S. Bradshaw: Yeah, fantastic. And having been a past student of the membership experience and even Tribe- when it was called that, I can absolutely attest that everything that Stu talks about in the book about the best way or the ideal way, him and his team actually live out. From onboarding to six months down the path, it absolutely can see that what you talk about is what you do and that it has results and I really appreciate that.

[00:30:25] Stu Mclaren: That's amazing, man! Thank you so much!

[00:30:36] Stu Mclaren: Well, thank you Jason. That was a surprise buddy. That that means a lot, man. Thank you so much.

[00:30:45] Jason S. Bradshaw: Now, Stu, before I let you go, one last question, one very last question. Someone in the next couple of minutes they're gonna be, at the end of watching the video or listening to this episode.

[00:31:04] Stu Mclaren: Number one I would just encourage people to just open themselves up to the idea of moving from a one-time transaction model where you're just hoping that customers come back and buy from you again. And open yourself up to the idea that you could very much have a membership model into your business.

[00:31:32] Stu Mclaren: A membership model that provides predictability and stability in your business like never before.

[00:32:07] Stu Mclaren: And so I just wanna encourage people to open themselves up to the idea that a membership model can 100% make a right fit in your business, whether it's a product based membership, a service-based membership, knowledge-based membership, or community-based membership. There is one for virtually every type of business.

[00:33:05] Jason S. Bradshaw: Absolutely agree. And what a great way to end the show on.

[00:33:26] Jason S. Bradshaw: Stu McLaren, it's been an absolute pleasure having you on the show today.

[00:33:31] Jason S. Bradshaw: Thanks so much.