Office Hours Archive: February 4, 2020

Audio stream


3:34 Full transcript

Breian’s struggling to decide whether or not to go to a business workshop in Dallas in March. The hangup, she’s been telling herself, is the unusually high airfare. Normally she’d expect to pay $400 to $500 for a flight. She could even see herself paying $600. But flights from her airport to Dallas have been hovering near $900. It just seems like too much. 

On the other hand, she loves this kind of event. She knows not all of the content will be applicable to her right now, but she always finds herself leaving events like this one focused and motivated.

The social and community connection are even more important to her than the content. Events like this one let her reconnect with friends in her life coaching community. It’s a group of people who share her enjoyment of the work and speak her language. She knows she could create those social connections (and re-connections) without the travel, but there’s nothing quite like being in person with her business friends, away from the responsibilities and routine of home. 

As a bonus, Breian has found that getting together with her life coaching community has led (directly and indirectly) to new clients. She doesn’t go into the events looking for transactions but they often happen anyway. 

(By the way, I’m not at all surprised to hear this. When you get in a room with people who like and understand your work, client relationships happen naturally. It’s one of the biggest reasons I encourage coaches to go where their people are.)

So, what about this plane ticket? First of all, I told Breian, we’re not talking about a $900 plane ticket. We’re talking about the $300 or $400 difference between what you’d feel comfortable spending and what the plane ticket will cost. 

You might read that and think I’m just trying to rationalize the purchase, but I’m not. I’m actually trying to remove some drama from the purchase by comparing the price to what you’d normally spend. It’s an important distinction because we have a tendency to dramatize financial decisions we’re uncertain about. I’m not sure why–maybe it’s a way of stacking the deck for or against the decision in hopes of making it easier. 

Anyway, I think the right place to start here is to acknowledge that this is, in fact, a $300 to $400 decision, not a $900 decision. The same would be true if we were talking about a $3,000 to $4,000 decision. The idea is to be clear on the money that’s outside what you’d “normally” or “confidently” spend. 

Next, I told Breian, you want to be clear what you’re giving up by spending the extra few hundred dollars on the plane ticket. Since it’s basically impossible to say what anything is truly “worth,” the easiest way to get at what something is worth to you is to figure out what you can’t buy since you bought this thing.

In Breian’s case, the answer is…nothing. She has money sitting unused in her business account, and there’s nothing she’s thinking about buying that she’d have to give up for the sake of the plane ticket. 

In that case, I told her, I don’t think it’s really about the money.

She agreed with me, and told me her husband had said the same thing: her concern isn’t really the money.

The problem, she said, is that it just feels so indulgent. 

Well, if the money isn’t the issue, and you’re still feeling hung up on it, maybe it’s the time. How do you feel about spending this amount of time on the event?

Breian couldn’t answer with certainty, which is fine. She just kept coming to the idea that spending this amount of money and time on this event would be very indulgent of her. 

All I could suggest was that there’s no right or wrong answer here. There’s no magic plane ticket price and/or length of event that inherently feels not-indulgent. 

When it comes to money we all seem to believe there’s a right or rational decision. It’s just not true. Money is numbers, and math is numbers, but financial decisions are almost never simple math. Why? Because your values and preferences vary, and I don’t know anyone (including me) who can explain why something is “worth it” or not.

This won’t surprise all the coaches in the audience, but it turns out the action of making a financial decision is driven by a feeling, which you generate with a thought.

In more common language, all financial decisions are rationalizations we manufacture. Anyone who claims to be rational in their finances is actually just confident because they really believe their own thoughts about money. 

So if Breian decides to go to the event, it won’t be smart or dumb, right or wrong. She’ll either do it (or not) because of what she’s thinking. And afterward she’ll either feel good or bad about having done based on, you guessed it, what she thinks. 

Does that mean that we determine the quality of all financial decisions using just our thoughts? Yes, but also sort of no.

Yes, because you can think your way into feeling justified about any purchase, ever.

No, because deep down you know whether you believe your own thinking AND you know how much mental effort you have to exert to feel good in the circumstances your past financial decisions have created. 

That was a tedious sentence. Blech. Moving on. 

Oh, one other thing about the conversation with Breian:

I went on a tangent (as is my habit) about the “honeymoon phase” of spending on certain things. Breian said she thought it was interesting and worth talking about, but now I’ve mostly forgotten what I said so maybe we should all go listen to the recording and decide whether its worth further discussion.


32:12 Full transcript

Morgan, the freelance designer/course creator/mastermind leader/working part time at agency member of our community…is looking to simplify. She does a lot, and she’s good at all of it, but she finds herself wishing to have a little less going on. 

(Now that some time has passed since our conversation, Morgan, I actually don’t think you want to have less going on. And I don’t think there’s anything wrong with that. I’m sure we’ll talk again.)

Anyway, her question this week is a great one: would I simplify my life and business if I figured out how to promote my courses with ad funnels?

My answer, of course, is maybe.

I understand the logic: courses are high-leverage. Funnels are high leverage. I have courses already. If I could sell them with funnels maybe I earn the same or more money with less hands-on effort.

Totally possible. I’ve seen it done, although I don’t have any experience with it personally. 

Some things for Morgan (and the rest of us) to consider:

It’s useful to remember what business you’re in and match your marketing approach to your business. 

In Morgan’s case, she runs a group coaching program with 25+ clients at a time. She likes the intimate feel of the program.

So, yes, she could promote the program with funnels. And it could very well work. (To be clear, I’m not skeptical about whether it could/would work. I’ve seen programs at her price point do really well when marketed through funnels.)

But when it works it will become a fundamentally different program.

Funnels tend to be resource-intensive, so you often have to scale big time in order to make them worthwhile.

Translation: building and maintaining funnels tends to take lots of people and lots of money. This means your profit per client goes down, which means the number of clients has to go up to put the same amount of money in your pocket.

In Morgan’s case, this might mean going from a more-intimate group of 25 to having hundreds of people in her program per year. With hundreds of people in the program her awareness of and interaction with each person goes way down. How does she feel about that?

She likes the personal feel, she tells me.

No problem, but you’ll have to decide how important that personal feel is, because funnels tend to take you in another direction. This is neither bad nor good. It’s just different.

What about the courses, she asked me. Could she just sell the courses through funnels?

Yes, definitely. The issue could be getting used to the fact that her $800 course has historically put $800 in her pocket. If she moves to selling it through a funnel, she might have to get used to spending most of that $800 on ads (and the contractors who support those ads). 

Again, nothing wrong with it. In fact, this funnel-driven approach is, in my experience, the path to really big businesses and income. 

So, Morgan, and the rest of us, just have to decide what business we want to be in.

My observation has been that fatigue/burnout happen in businesses for two main reasons:

1 – Underpricing

2 – Trying to run multiples businesses at the same time while pretending it’s all one business

So, Morgan, if you want to do funnels, I say be fully committed to those funnels. Spend the money, hire the team, create the content…go for it.

But if you want to earn a few hundred thousand per year with a smaller number of clients and a very small team, funnels might not be the way to go.