Returning Customers Transcript
Season 1 Episode 21
This is a written Transcription for the episode: The Secret to Get More Returning Customers
Full Written Transcript of The Episode
Matt Tompkins: Hello and welcome back to the Omaha podcast, where Omaha’s most successful entrepreneurs help you grow your business. I’m your host, Matt Tompkins, of two brothers, Creative and one of the biggest challenges for any business actually comes after you close the deal and make the sale, and that is to get those customers to come back and buy from you again. It’s not that they don’t want your product or service again or that they won’t need it. They will. It’s simply the challenge of customers recalling your business to keep it top of mind for when they do need you.
Recurring revenue is crucial to any business’s long term success, which is why the subscription business model is gaining so much traction and results growing from just 15 billion to nearly $500 billion industry in the coming years. Now we’re going to learn about how to create a subscription business model today from a woman who has done it herself. But not only has she built her company entry envy into a success story. Jennifer Colwell is also paving the way for more women entrepreneurs and women in the trades.
Today, we will learn how to create a subscription business model to bring your company those precious returning customers.
Wow. We gotta change up in the music today. I like it. That’s probably enough. Yeah, we’re good.
Matt Tompkins: Now, in order for me to properly introduce our guest here today on the podcast, I want to take you back in time with a not a fable. It’s not a fable, right? No, it’s a tale. It’s a piece of history. Charles Lindbergh, he is famous for being the first to fly the Atlantic. But who was the second person to fly the Atlantic? Don’t worry. It’s not a name that any of us remember, but his name is Bert Hinkler.
And how could you forget a name like Bert Hinkler? Now, we don’t remember Bert because he wasn’t first. But we do remember who was third to fly the Atlantic. And that was Amelia Earhart. So why do we remember Amelia but not Bert? Well, like Bert, Amelia couldn’t be first. So instead, she did like our guest. Jennifer Cowell did as well.
She created a new category for her to be first in. Now, Jennifer truly innovated with her business model, and she had to because she literally left behind a six figure corporate job. Nice, steady pay. I don’t know if I’ve ever made six figures in my life. I don’t know if I could leave it. But Jennifer did to follow and pursue her dream with entry envy, and she had to come up with a new way to generate that recurring revenue.
And that was the subscription business model. It’s something I stumbled into as well here in the world of video production and podcasting. But Jennifer had this this seed, this idea of a subscription business model planted pretty early on. And we talked about that my.
Jennifer Colwell: Freshman year of college. My marketing professor said, If you’re ever going to start your own business, which I had no interest of at that time, I just remember him saying, make sure it has a reoccurring revenue model. And I thought, What the hell are you talking about? This is Dr. John Hafer from Uno, and I asked him to expand. What do you mean? And he said, Omaha World-Herald a subscription model as basic as that, but gave several other examples. So it’s always been in my mind, how do you have a business that you ensure that customers are coming back for? So I go on and graduate from college.
I managed law firms for almost 20 years and the last ten years I spent in my head. And as I went back from my executive MBA eight years ago, I knew I wanted to own my own company, but I couldn’t figure out what it was I couldn’t figure out what I wanted to do that had the passion. With that reoccurring revenue model. You have to make sure when you’re starting a company, it’s going to be profitable. And what? Yeah.
Matt Tompkins: I think that’s maybe I missed the that’s that’s the crucial rule. I forgot. That’s why this isn’t working. Dang it.
Jennifer Colwell: But you do you have, you know, you can love it all you want, but you got to figure out how to make money off of it. Right? And there’s a lot of people who don’t actually love their business, but they have a really profitable business, so maybe they enjoy the profits, but not the company. I wanted it all. That’s that’s what I always say. Dear Santa, I want it all.
Matt Tompkins: But she didn’t stop there. She didn’t just want her own success. She wanted other people to be successful as well, to elevate other women in different industries, especially in the trades. She shared with us where that came from.
Jennifer Colwell: It sounds altruistic, but I want to help people. And as the executive director of a law firm, my job was to make lawyers more money. As I sort of went back for my MBA, I still had in my mind that I was going to have a law firm consulting practice, and it was actually the process of writing a book.
Sometimes we learn what we don’t want to do when we put our pen to paper, and I was about 80% of the way through a book on how to manage a law firm, quickest way to establish credibility is to become an author, right? So as I was writing the book, I realized that I did not want to do that. I did not want to build this business. It wasn’t going to be something that I wanted to do. I had opportunities to buy other people’s practices like it. It would have made so much sense. But the passion wasn’t there.
Matt Tompkins: And then came the year 2020, which I’ve noticed a theme here. A lot of people seem to have found 2020 to be a catalyst in not just the obvious ways, but in the I’m finally going to take that risk. I’m finally going to see that idea through and start that business. It was that way for me. I mean, what better year than to start a brand new company than in the middle of a global pandemic? Right.
Jennifer Colwell: It was a rocky year. In 2020, January, I got divorced of 2020. Little did I know that COVID was coming two months later and would really rock my world even further. And I moved into a fixer upper in August of 2020. So I buy this house. My dad was a carpenter and has retired and I kind of grew up helping build our spec houses and on side jobs and just always around construction. So I did not know well into my 20 seconds that not every woman knew how to use a drill, right?
Like power tools are an okay thing. So I just start tackling the house one room at a time. And I came home every day and I looked at the outside and I’m like, Oh, it looks old, it looks old, but I’m out of time. Energy and money. So how do I add curb appeal without expending a lot of those resources that I don’t have right now? And so I painted the garage door, I painted the front door, and I went on a mission to find a modern house number sign. And that’s how entry and became to be.
Matt Tompkins: So the idea for entry envy is born, but it would be the subscription business model that would give this idea its proverbial roots in the ground. And just like the idea that seed that was planted by her professor in college, it would grow into a mighty oak. All right, I’m done with the metaphors.
Jennifer Colwell: The term mind blown is what I have absolutely said over and over. In 48 hours, I built this company in my head, like once I in the whole thing came because I had I had created this little sign on the front of my house that had a planter box on the front of it. And the planter box was adorable. But I’m thinking, Well, we’re in Nebraska. What are you going to plant in that?
That’s going to grow more than three months out of the year, and then you’re going have to water it twice a day and then it’s going to rot the wood and then you’re going to have water all over your front porch. And I was like, this is a horrible idea. I get it all done. And it’s the cutest thing I’ve ever seen. And I thought, Great, I have to do this every month. What did I just create? And it was in that same breath that it was like, What did I just create?
Does anybody else do this? So Marketing 101. Go find out. Go do your competitor research. Does anybody do faux floral subscriptions? No. Does anybody sell house signs with planter boxes that have a subscription or add on piece? No. And so it was like, wait a second, not everybody needs a house number. Some people are going to want their last name.
Jennifer Colwell: Some people just might want to say welcome home. Some are going to need a vertical, some are going to need a horizontal. And then what about the people who live in apartments or condos or assisted living facilities? They have a front door, too. So I created another one. So for me, I knew that you have to keep it simple in business. So it’s one subscription. It doesn’t matter what their sign looks like, it’s one subscription, and that’s what’s keeping them coming back every month. But then, well, some people might only want quarter from a from a, you know, kind of an affordability standpoint.
So we created a seasonal option. So the monthly one has all the holidays and the seasons and then the quarterly one only has the seasons. So yes, it was truly in 48 hours that it was like the light bulb went off and I just thought, I’ve got this. But then of course, as a part of that, I mean, I went straight to the spreadsheets and said, Can I how much do I think this is going to cost? How many of you know, how many widgets do you have to sell in order to be profitable? How long is that going to take? And of course, you’re just you’re guessing, but you have to go into it with a plan.
Matt Tompkins: Marketing 101. She’s used that term a couple times in this episode. And I’ll be honest, I do kind of feel like I’m being taken to school by Jennifer and that’s okay. That’s okay. I am taking notes. I’m a better note taker and I am paying attention. Unlike when I was in in high school and college, all seven years of college. But let’s not revisit that. I can attest to you that the subscription business model, it is a viable option for you. It is for me. It is what we use here at Two Brothers Creative.
And when we started out in video production, I had done videos, just, you know, freelance work here and there. I was working in radio and television, and you would do a video and then, you know, you’d do a TV commercial or a music video or a promotional video. And then you may not see that client ever again because they may not need another video like that ever again. So you’d have to go find new clients. It was really hard to establish that recurring revenue.
And I had that same kind of aha moment that Jennifer has talked about where I thought, Wow, we could take a podcast, could add high quality video to it, and then we would have both a great product for the client because now they have all these videos and this content for content marketing work great. They have fresh new content every single week with every new episode of their podcast. But for us from the business standpoint, we have a viable subscription business model. I know it’s viable because I don’t know how many subscriptions I have signed up for on my phone and then completely forgotten about just altogether.
And then I looked at my wireless bill. I’m like, What? What is this?
Matt Tompkins: In all seriousness, though, a subscription business model can work for you and your business. And if you’re thinking, No, Matt, no, it just doesn’t work for me. I mean, how would I do that? It doesn’t make any sense. It doesn’t add up. I don’t see that. I don’t see how that works. We’ll just take a step back and take another look at it like Jennifer did, like I did.
Like so many people are with these subscription business models. Odds are there is a way that a subscription business model will work for your company. So let’s get to it. Now. You have the idea, now you have the innovative way to be first in your category, in that new category, With this subscription business model, how do you actually get started? How do you actually put the boots on the ground and begin the work?
Jennifer Colwell: Well, I think that I’m going to go back to the basics. You’ve got to have the foundation. So I continue to do research and said, okay, I think I have a great idea and I and it can be profitable. If it works out the way I think it will do. I have product viability, right? So, you know, you have people who have already an existing business who may already have that product viability established. But if somebody is thinking about starting a subscription, okay, have you had anybody by this who is not a friend or family member? Right. Basic question.
Matt Tompkins: Grandma, would you buy some popcorn for me? Yes, It’s Matt, your grandson. The Boy Scout again. Right, Right, right, right.
Jennifer Colwell: Oh, I know. So, you know, I did my I did my research at a craft show, and I wasn’t even selling anything. I just exhibited as a as totally market research space, had five sample signs. And at the end of six hours, I had 250 email addresses from people that said, Let us know when you go online. We’d like to buy one. Oh, okay. Hold on. I think I’ve got something here. So then I had 20 years of managing, of managing businesses behind me, which was great. I had a lot of education. I didn’t have a clue how to start a company. Not a clue. I mean, that’s a whole different ballgame. So I think my my advice on that side is don’t go it alone. You know, I hired a coach to kind of help me with those basics.
We needed to make sure that we had the strong foundation to build the company. I think, as you said, a lot of entrepreneurs jump off the cliff and then they build the plane. And to an extent, yes, we do that as entrepreneurs no matter what. But I’m I didn’t go into this as a hobby. I went into this with kind of lofty goals from the beginning and saying, okay, if this is where I want to be, how do I get there? And so I knew that I was not going to do a DIY website and then move it later to something better. I researched what’s the best platform to put this on, right? I made.
Matt Tompkins: That mistake. I may I admit I feel like there needs to be like a wix anonymous group out there. Just. Yes. Hi, my name is Matt. I created my business site on Wix. I know. It’s.
Jennifer Colwell: It’s okay. Everybody does it however. But I you know, I researched, you know, first of all, you have to have a platform to manage your subscription software. So what is that? And so, you know, there’s a lot of companies out there competing for that space. So what’s the one that fits your business the best? Now, as much research as I did, we know in the world of technology, things change. So the company that was the best one six months ago is no longer the best one today.
And as your company changes, that has to change. So I never say there’s mistakes. There’s feedback, right? There’s never failure. It’s just learn and move on. And as much as you try, you get it. So I also researched what are the top three reasons people subscribe and unsubscribe. There is a term in the subscription world called churn rate, and you know, this is basically how many customers you’re losing. I realized early on that a subscription based model is the ultimate example of of necessary five star customer service all the time because they’re not going to come back, even though you have them hooked, if you will, if you’re not delivering, if they don’t find that value. So the top three reasons that people subscribe or at least among the top three, are they have a need, it’s meets it’s convenience and they like getting happy mail.
People like getting presents in the mail. And the top three reasons they unsubscribe is it doesn’t have enough value, right? Like maybe it’s too expensive. They feel they no longer use the product or they have too much of it or they don’t like it, Right. But somewhere in those. So building that, it taking whether you have an existing business or you’re thinking about starting a business, you have to think about, okay, does my product or service meet those characteristics of why somebody is going to buy it and how does it ensure that somebody is going to not unsubscribe or stop getting it?
Matt Tompkins: Yes, there are no guarantees. There are no guarantees in life. My mom told me that literally every day growing up, she still calls me and tells me that I don’t know what her deal is. I don’t know where mom got burned with guarantees, but it’s. It’s true. Mom is right.
Yes, there are no guarantees. But what we can do is we can you know, we can we can hope for the best plan for the worst planning, planning, planning. That’s what it’s all about. So I asked Jennifer, what are some just simple one, two, three steps that can be taken to find out if your idea your business is a viable subscription business model.
Jennifer Colwell: Most subscriptions do not have a required physical base product and a physical reoccurring subscription product. So for example, Peloton, you have to buy the base piece of equipment, but the subscription is electronically delivered. So peloton’s limitation is how many peloton’s can they produce, right? But from the software standpoint, that’s unlimited. That just depends on the server size, right? For us, ours was both complex because not only was it a physical based product, it was a custom based product. And then we were delivering a physical product on top of it.
Now with that being said, ours is also unique because most subscriptions that deliver physical products have to project how many subscribers they’re going to have and they cap it at that point. So if you we’re in the it’s not only competitors, we don’t have any direct, but our space is home decor subscriptions. So the other home decor subscription companies are going to say, okay, we’re going to guess that we have 500 subscribers for this quarter and we’re going to buy months in advance from whatever country this amount of product, right? Because they have to be able to produce 500 of those exact same boxes that are going to get shipped to their customers. And if they guessed high, they have excess inventory. If they guessed low, they have missed opportunity on sales.
Matt Tompkins: Either way, it’s a lot of stress either way.
Jennifer Colwell: Either way, it’s a lot of stress. And subscription models very much can be for us if they’re a physical product for us. We went into it with the mentality that everyone was actually going to get a different end product because if I have ten women who all have their little welcome signs on the outside of their doors at the assisted living facility, they don’t all want the same thing.
Matt Tompkins: I’m hearing more of that standing out, being first in a new category like we started off at the beginning of this episode, innovating, coming up with a new way to do it. Businesses really just all about coming up with creative solutions. What creative solution are you going to come up with?
Jennifer Colwell: That is the issue is how many solutions can you create, you know, and don’t don’t even though, yes, a subscription model, there’s some outline and framework. You don’t have to stay within it. We are doing it very different and I am totally good with that. As long as you can figure out how to make sure it’s profitable.
Matt Tompkins: Yes. And that’s the thing. You have to make a profit. You have to make money to stay in business or you won’t have a business for very long. To quote Steve Martin from the movie The Jerk. Oh, so it’s a profit deal. Somebody hates these cans. So what is next? What is the next phase for Jennifer? Her success at Entry Envy has set up her next success, which is focused on on helping more women, specifically in the trade industries.
Jennifer Colwell: So going back to that whole mission of getting women in the trades, what I think is important about the women in the trades issue is it’s really a complex societal issue, more so than it is a logistics. And what I mean by that is there are lots of women and other minorities who would be interested in going into the trades, but we’re not even making them aware of the opportunity necessarily, because that’s not the conversation we have been overly successful as a society, sending every single person to college that we possibly can for the last 35 years to the point we’re graduating more women in both law school and medical school than we are men. Now, over the course of the last ten years.
And that’s that’s faint. That’s wonderful. But the problem is, is right now in the trades piece, it really, truly has a shelf life. You cannot lay drywall when you’re 80 years old. You can practice law when you’re 80. But the trades has a shelf life for every one young person we have entering the trades right now, we have 3 to 5 that are retiring and the shortage of workers is exponentially.
Jennifer Colwell: We talk about the we talk about the subscription industry exponentially increasing in revenue and profit. We are going to have an economic infrastructure crisis because not enough people are going to there. Now, the good news is, is that this is a quick solution because it’s not like we have to go have ten years of education to get doctors trained. We can create people working in this space fairly quickly. My piece of this puzzle has something to do with being able to build entry and B as a platform to have conversations with a lot of the customers that I have are moms and helping shift that.
We are employing several high school girls and young college girls already that are helping with build the signs and the construction side of it and painting them. And I will continue to be able to do that. I will never outsource this piece because I think it is so important and providing that positive space for leadership to help them learn.
Matt Tompkins: I remember when I finally graduated college after just seven and a half years, I didn’t have a doctorate. No, I just had an undergrad and I worked in radio in broadcasting. So that degree really didn’t do much for my line of work. But I was I was having a party. I was celebrating. And Gary Sattelmaier, who I worked with at the time, and radio, he came up to me and he said, Matthew, congratulations.
And I said, Congratulations for what? I have this degree. It feels meaningless. It’s not like I need this this degree to push buttons on a board. And he said, no. He said, Matt, you you know what? That that piece of paper means? It means that you finish something. And you know, Gary was right.
I did finish something. I just wish it didn’t cost me $40,000 in student loans to finish. Figure out what works for you. To recap this episode here, we talked about the basic principles of marketing, as Jennifer did with entry envy. Be first in your category or create a new category. You can be first in. You must innovate, do the market research, do the homework, do the testing,
Find out if it’s a viable business idea or a viable product. And do not discount the subscription business model. It really can work for just about any product or service. But you have to do the hard work. You have to do the boring shit. As Jeremy Asman describes it. You have to do the math, the projections, find out if this is going to work. You can find out more details on entry envy. And our guest today, Jennifer Colwell, in our show notes. The links are there for you now, including that subscription business model.
Find out if it’s a good fit for you and your business. Speaking of subscription models, that’s what this is, this podcast. Subscribe now so you never miss an episode and don’t know about you.
But I’m digging the music this week. I don’t know who’s in charge of the tunes. Ben, was that you? Nice job. Good job. Yeah. Okay. It’s not that impressive.