Cash Flow Trumps Automation with Brian Keith

interview series

Cash Flow Trumps Automation with Brian Keith

Episode Transcription

[00:00:00] Brian Keith: Welcome to Red Beard Radio. I'm Brian Keith. And today we have Ryan Chapman, a guy whose name was first made with the one-click upsell back in 2009 when that was a pretty novel concept for the Infusionsoft market. And since then he's branched out into being the most advanced SMS provider around and doing Facebook messaging stuff and many other tools as well. Welcome to the show, Ryan.

Ryan Chapman: It's my pleasure to be with you, Brian.

Brian Keith: One thing I find interesting about you is you don't do just one thing. A lot of people are experts or their apps that they build, like your app Fix Your Funnel, does a single thing and does it well. Whereas you have the well, the most advanced SMS app and the one-click upsell and automated call dialing and actually you have more functionality in your app that I'm even familiar with and I've been following it for years. So it's just interesting that you have that breadth.

Ryan Chapman: Yeah, it's almost ironic given the title of today's podcast.

Brian Keith: Well, yeah, let's talk about that. We wanted to talk about [00:01:00] how cash flow trump's automation. Now, you've enabled- I don't know if you have an exact count- but a lot, let's say in the hundreds or in the thousands of people... Probably thousands of people have used your tools over the years, right?

Ryan Chapman: Yeah. Easily.

Brian Keith: Let's just call you a multi-thousand tool, a multi-thousand customer entrepreneur, and your tools are largely based around automation, making automation work better. But your message is that cash flow trumps automation. What's the deal?

Ryan Chapman: Well, you know this kind of came out of... This concept comes out of the work that we did with the one-click upsell way back in starting in 2009. Back at the time we were kind of juggling two things. We were just- that was the very beginning of Fix Your Funnel. But that was also like two years into our training company, which is the first place we used marketing automation. And, you know, I was a huge fan of it, but we were fortunate enough that, you know, the market was in the right direction, our message was in the right direction, the audience [00:02:00] was super hungry and we had actually what they needed. And so a lot of things were pointing in the right direction. There was a lot of luck involved in it. But we did phenomenally well and so cash flow really never was a concern.

But for many small businesses when they're getting started... You know, I see people I've known for years that are, you know, small businesses or entrepreneurs- whatever we want to call them- but they're constantly changing their business. And the reason why is they never get past that cash flow hump, and if you don't get into a position- this is why the one-click upsell was so important at the very beginning for us- is it allowed you to be able to get your cash flow in a position where you could survive long enough to learn the lessons that you need in order to actually grow the business. And every entrepreneur, doesn't matter what industry you're in, what your business is, there are certain lessons unique to your business that you must learn in order to survive long enough to get past that five-year mark. Right? Where 80% of businesses go out of business by year 5. The reason why is because the cash flow isn't [00:03:00] sufficient to allow them to learn the lessons they need to learn in order for them to survive and then thrive.

Brian Keith: How do you know which lessons those are?

Ryan Chapman: You don't. And that's the thing. That's why you have to focus so hard on cash flow versus the allure of automation. In that I'm not saying no automation. I'm just saying just enough automation to make sure you're getting cash flow. Because automation is like that... It's that rabbit hole, right?

Brian Keith: Of all the things that you do, because Fix Your Funnel does a lot of different automation tools, what one or two are the ones most directly related to companies that need to go focus on cash flow and not get bogged down in all the automation opportunities?

Ryan Chapman: If you haven't- it's hard to say like a revenue number because it really is about profit. If you're not in a position where you feel comfortable with your personal income, the money you’re drawing out of the company, where you're, like, covering all your bills [00:04:00] and you've got a little bit extra and you're squirreling it away and you're able to go on vacation and stuff like that... Until you're in that position in your business, you must focus primarily on cash flow first. Because until you get to that point anything can take you out. And so that's where I say use that as the barometer to say 'hey, I need to focus on cash flow.'

The tools really manifest themselves in a focus on getting sales converted. And there are elaborate ways to do this and there's very simple, direct ways. But you can also be simple, direct, and sophisticated. And so the tools that, primarily, I look at any business- it's interesting, Brian, because I can take almost any business, if they're not doing a few things, implement those few things and double the revenue. And which frequently means more than a doubling of their profit because your fixed expenses usually stay fairly fixed.

Brian Keith: Okay, let me guess. This will be fun. I'm going to guess and you're going to tell me hot or cold, okay?

Ryan Chapman: All right.

Brian Keith: One thing is Fix Your Funnel lets you have text [00:05:00] message updates to people to remind them to attend webinars and also have text message updates throughout the sales funnel to get people to show up to sales calls and that kind of thing. Hot or cold?

Ryan Chapman: So if you were selling by webinar, you would be pretty warm. The actual hotness is not in the reminder, but it's important.

Brian Keith: What's the hotness?

Ryan Chapman: The hotness is post-presentation of your offer, asking those who should have bought but didn't, why they didn't buy.

Brian Keith: Awesome, gathering of objections.

Ryan Chapman: It's the simplest strategy. Nobody does it. Nobody does it. And the reason they don't do it is because they're thinking about everything else. And if you really think about it, if someone goes through all the trouble, you've got their attention in the first place, you got them to raise their hand and say 'hey, I'm interested in more information.' You got them to actually hear your offer, whether that's by appointment or webinar or from the stage, or wherever it is, and then they don't buy- they're what I call a should-have-bought. They've done everything that a buyer does except for give you [00:06:00] money. There's usually only one thing that holds them back. It's one concern or one question, but they just don't feel like there's a right environment to ask that or they don't- they're not sure you even care.

Brian Keith: I was reading the article you wrote- I'm not sure where it was- but on the four kinds of people. One of them was the should-have-boughts. What are the other three classifications you had?

Ryan Chapman: Oh, jeez. I don't even know what that article is.

Brian Keith: Maybe you wrote it years ago, I don't know. For the folks who have not read the article that Ryan doesn't quite remember, I remember just the idea that you said there's four kinds of people in your database and the should-have-boughts were those that were just one inch away, like you're saying, one reason away. And I love that idea because I can think about, well, today. I had a hot prospect on a webinar I did this morning and they haven't bought yet. Why is that? I don't actually know, Ryan. You know what? I did not even ask. But with some forethought, and using Fix Your Funnel's SMS, I easily could have asked. It's not like I don't have the tools. It's not [00:07:00] like I don't have the know-how. I just didn't set it up in advance. So-

Ryan Chapman: That's a perfect example. You are such a smart guy and you know your stuff, especially when it comes to technology. Even the person who knows so much often forgets the simple things that need to be done because we get caught up, we get swept up in the automation idea that we forget there's just some human nature stuff we really got to pay attention to.

Brian Keith: Maybe I should have spent more time automating the follow-up to suit non-sales on my webinar rather than setting up Hootsuite to syndicate my latest podcast social media. Which is what I was doing just before this call. So there's a very literal example of one of these things is probably closer to cash flow than the other.

Ryan Chapman: Yeah, and see this is the thing, Brian. There's so many things calling for our time as a small business owner or an entrepreneur, so many things. There's so many sales messages that are hitting us and they're all very well crafted and they distract us and they get [00:08:00] us to focus on the thing that's most important to that company. But, as a small business owner your sole responsibility is to make sure that cash flow is sufficient that you can last long enough that you can learn the lessons so you can get to a point where you actually can understand the business that you're in. And so many people don't and that's why they fail and the failure of a small business owner is probably one of the most heart-wrenching things to me because of the impact it has on so many lives.

Because if you're in business, there's got to be a reason, right? There's something that you feel like you can contribute to the world. And maybe not the world as a whole but least some segment of the world. And you feel very passionately about that, passionately enough that you're willing to go through all the garbage that an entrepreneur has to go through to get to that destination. Well, if that's the case then I want you to be able to not only survive the initial journey but get to a place where you grow and thrive and your business can stay the same.

Because I see all these smart people, good people, hard-working people, who are changing their business model on a [00:09:00] constant basis because they haven't quite figured it out. And usually if we investigate and we dissect, we look at what's going on, what's going wrong, is they don't understand that their primary objective in the initial phase is to get cash flow to a place where they can actually breathe. And there's something in the mind that, until you get to that point, doesn't release and so you can't really even learn the way you need to learn. So the primary focus just has to be on 'how do I get good cash flow?' Now, there's some principals to that.

Brian Keith: Before we hop into that, for people who are playing along at home who want to start using SMS to ask their prospects why they didn't buy after webinar or sales call, what's the URL to go to to learn more about that particular feature?

Ryan Chapman: You know, just go to From there, you'll see some information. For a lot of people I think the best place to learn where to start is actually get my book and they could-

Brian Keith: One, Ryan? You have five of them.

Ryan Chapman: Yes.

Brian Keith: Specify, mate.

Ryan Chapman: The Messaging Connection. [00:10:00] This is the latest one I've released and it's really critical because it gives you foundational understanding- In fact, Trent and I have been working on a new podcast series where we're going beyond The Messaging Connection, which we're going beyond the book itself, kind of describing all the phases. We're taking a chapter at a time. And as I was getting into episode 3, I realized we haven't said a word about texting yet. (inaudible) a message because there's some foundational pieces that have to be in place. So I recorded an audio version of it and I love for people to just pick up a free version. They, of course, can buy the hard, you know, copy version from Amazon for like 10 bucks. But if they would like a free audio version in a PDF, they can get it by texting LEARN to 949-835-5300. And I'm sure we can put that in the show notes if you want to.

Brian Keith: Yeah, that sounds great.

So, that's a way to use SMS. Now, I was going to have one other guess, which was, obviously, one-click upsells where, folks who are not familiar with the language, someone buys something from me and then I immediately offer them something else. And I tell you, I just set up a new funnel for my [00:11:00] Impact Academy and I don't actually have a one-click upsell set up and I had someone buy today. I had a great sales call, person purchased 10 minutes later. Beautiful. And now as I'm talking to you, I'm thinking 'you know, while I did talk with her about other options and what she could do in the future and why this was really the appropriate level of working with me for this moment, that doesn't mean that she wouldn't have bought something else.' Like, she paid... The list price is $199. So, if I'd offered a $50 something that was also insanely useful maybe I would have made another 50 bucks today in that sale. But I didn't get it set up yet.

Ryan Chapman: That's exactly the topic but, from a rubber hits the road perspective, you're right on target with your thinking. Because there's 20% of people that buy from you that would have taken an upsell. So, it's not everybody. But 20% of the population will do it for one of two reasons. One: either they have a really urgent need and they'll consume anything they can in order to help them resolve that. So they're looking for speed because of some sort of [00:12:00] fire that's in the belly, so to speak, to get their problem resolved. There's another portion that will do it just as a matter of identity. They're the same people that buy the luxury vehicle versus the standard vehicle, that will take the upgrade package when they're buying a vehicle. Or whatever.

Brian Keith: At one point I owned almost all of Seth Godin's books. And at one point I've owned almost everything Alan Watts has written. And then I have one of his compendiums. It's this huge, like, a 10-pound book, only a couple thousand printed. I used to have it behind me so when people were on with me on the phone they would see 'oh, yeah. I'm the kind of guy who has this book. This limited edition, they've-never-seen-it-before book.' Did I really need that? No. Have I read the whole thing? No, I have not. But I'm the kind of person who owns all of Seth's books. (inaudbible) first name. Absolutely. That's even the Impact framework. In the tripart we talk about the branch of leadership-oh, no, the branch of self-identification. And part of that is yeah, I'm the kind of [00:13:00] person- it's shared values- I'm the kind of person who does this kind of thing.

Ryan Chapman: I was at somebody else's conference. They invited me to come and speak and I came and I spoke. And I was sitting at lunch with a few people and I heard somebody at the table I was sitting at start complaining about how they can't pay for traffic. Like, they can- the most they can spend is $6 to get a lead. And just, like- there's this other company and they mentioned the name of the company and they were like 'they just suck up all of the traffic and I don't understand how they can do it! They're in the exact same industry. They're selling the same kind of stuff, but they seem to be able to spend way more money than me.' And I laughed because that other person they talked about was actually a private client of mine. I've only had one private client ever because I don't like to take too much on with other stuff because I got so much going on myself. But this client was able to spend $35 to get a lead. Where as this other guy could only spend six and the reason why? One-click upsells. They have upsells and because of that the value of a customer was probably four to five times what the other [00:14:00] guy's was. And that's the cash flow, right?

Brian Keith: Let's look at the numbers here for a bit. For a one-click upsell in this particular case I had today, we'd already talked about my next price offer which- $199 a month is the Impact Academy, bi-weekly mastermind in a group setting. The next offer up is $1,000 a month for private coaching. We'd already talked about it and decided it wasn't a great fit at the moment. So, in this particular case, it wasn't appropriate. But in general if someone buys the mastermind the next offer should be 'hey, would you like to go apply the $199 you just gave me and I'll double it so that your first month, instead of a thousand dollars, costs you only $600?’ And that's the basic format.

Ryan Chapman: You said something super important there. So, there's four sins to upsells.

Brian Keith: Four sins. Go for it.

Ryan Chapman: Four sins. But one of them is you don't want to make their initial purchase worth nothing. So, what your intuition there, which was to give them credit and double that credit if they took the upsell, was spot on. Because you not only validated their initial purchase, you made it more valuable if they took that upsell. So that was really good intuition on your part. Yeah, so that's [00:15:00] the upsell. You definitely can do that. Sometimes what you're going to have to do if you want to really enhance cash flow is identify another product you could create that might be a stopgap product. And so it could be something that maybe doesn't take them to the thousand dollar level but that is something that would help them temporarily get a little bit closer. Because that person will probably eventually take the thousand and when people buy upsells, that identifies them as a person who wants more from you. So that person needs to then have special attention. And these little things, these little strategies, these are all cash flow centric strategies. If you get them right it gets you to that position where you can actually now start optimizing. But until you get that first level done, you don't have any business optimizing.

Brian Keith: To support cash flow we're trying to get more customers a month and higher cash per customer, higher profit per customer. So your first strategy of text people afterwards and ask them why they didn't buy is aimed at get more customers a month. And the second strategy of one-click upsell is [00:16:00] get more profit per customer. Those were my first two guesses as to how to increase cash flow given what I know.

Ryan Chapman: So for anybody that's selling online- bingo. Right there, those two go together perfectly, too. Right? First asking them why they didn't bite to get them started and then everybody that goes through the purchase process giving them an opportunity to upgrade their order. Those are two huge things that would increase cash flow. In fact, we saw just with that one- the post webinar, one text message out, asking a question- it doubled sales for one of our users that was doing that. That was Frank Kern. And so he went from just having a million dollars in sales to two million dollars in sales from his webinars simply by asking that one question. Nothing else-

Brian Keith: Hold on while I pause the webinar and go build that functionality out right now because that sounds like fun. So there's also one other thing here that, because Fix Your Funnel has all kinds of SMS that's unrelated to someone having to buy something, that even before we get to that sales conversation [00:17:00] that you can build a Fix Your Funnel integration, where you can give someone free information about something and then follow it up at the end with a 'hey, do you want to know more? Let's get on my calendar.' Where one of the things-

Ryan Chapman: That brings up an important point. Like, I just told people how to get a free audio copy of my book, right? That they could text LEARN to 949-835-5300. Okay? So, I said that. Now, what happens if people text that number is I'll ask for their name, I'll ask for their email and then I'll ask an open-ended question. Now, this is how you straight line to cash flow is you- and the question can be something as simple as 'why did you text LEARN today?' Right? 'Why did you text and request the book?'

Brian Keith: So, no need to overthink it. It's okay to be simple.

Ryan Chapman: No, always over- like, I'll see people's conversations and they're asking 20 questions. I'm like 'dude, let them identify themselves so you can continue to follow up with them.' We all know about [00:18:00] long-term nurture. Fantastic. Great. Okay, we'll do that. But, somebody does take some sort of action there's a reason why. Just ask them what the reason why is. If they feel comfortable telling you that means they're in a place where they're ready for a conversation. That doesn't mean they're necessarily going to buy at that moment. But they're at least ready for a conversation where you can learn more about what they're facing, what they're dealing with, what they're trying to overcome and as a human being who cares about another human being you can just listen. And you can find out what they're doing and then you can know, I mean, 'you know what? I'm not the right solution for you. Here's what you need. You can go call Brian over at Red Beard.' Right? Or 'oh, no, you need- actually, we're a perfect match. We can totally help you with that problem.'

Brian Keith: On the tech side...

Ryan Chapman: Uh-huh.

Brian Keith: Fix Your Funnel, unlike a lot of text messaging systems, you can see everything in app, right? So, if I text in LEARN to that number and then you ask an open-ended question and I respond, you don't necessarily have to be on your phone but you have a phone app. You could also have your team be on a computer. So, if a thousand people [00:19:00] took advantage of your offer all at once, you could have a lot of people on your team all coping with the incoming. Because that's one of the things as I want to design systems where there's not- where you either you choose A or you choose B. Did you come to me for A or B? Because if I get a lot of people coming in, in some systems it can be hard to handle that but you have that figured out.

Ryan Chapman: Yeah. So, yeah. So, what will happen is in that situation where I ask that open-ended question at the end of the automated part of the texting conversation, what happens is a member of my team- or members of my team, in my case- will be notified that that new message came in and then somebody on my team will see that the answer to that question came in. They'll see the whole context because they can see the whole automated part and then they can start carrying on that conversation with the individual, finding out what they're looking for, what they need, you know. And then if that leads to a purchase, fantastic. If it doesn't and we can help them anyway, fantastic.

So that's the software part and that's how that works. Fix Your funnel is designed for teams. So you'll say, like I said, [00:20:00] have multiple team members that are waiting to answer and respond to those things. But what happens if, like you're saying, a thousand people text in. They're all excited and they all answer the question 'why did you text LEARN today?' Right? Fantastic! I can now evaluate that and then... This is where people get into trouble. They try to preemptively prevent these amazing situations that almost never happen. You know, they're like 'well, what if a thousand people text in?' And then they shut it all down and they lock it up and they put the people all on bots and make them deal with machines. And then they just annoy people and they can't figure out why they don't grow the business. The perfect problem to have is being overwhelmed by text messages coming in.

Brian Keith: As long as the system can handle it, which is what you have with Fix Your Funnel.

Ryan Chapman: Yeah, well, my system can handle it. But, let's say you get it and you're like 'oh, no, I'll be overwhelmed if I let people text me.' Fantastic! Best problem you could possibly have because all sales happen in conversations. If you're not having conversations, you're not making sales. If you're not making sales, you don't have cash flow. You're out of business. [00:21:00] It just happens too often. So people create these walls because they get excited about automation and they actually block themselves from being in a position of overwhelm. If you got into the position of overwhelm I guarantee you there's a million different solutions we could apply that would help solve that. But most people never get there because they build up this barricade around themselves that don't let humans interact with humans, which is the whole point of technology.

See, technology is supposed to limit the negative side effects of human nature in the owners and the operators of the business but enhance their humanity. In other words their ability to connect with another human. Because that's where all the opportunity lies, is in relationship. And that doesn't mean it has to take hours and hours of your day. All it means is that at that pivotal moment where a human needs help from another human, you're there.

Brian Keith: Well, Ryan, that's all we have time for today. I love what you're saying. What's that phone number, again, for people to text LEARN to?

Ryan Chapman: It is [00:22:00] 949-835-5300.

Brian Keith: And where's the best place for people to follow you on social media?

Ryan Chapman: You know, they can just go to Fix Your Funnel. You can go to and that's a great place. They'll be able to see some stuff we publish there. We post a lot of our podcast and our blog articles there.

Brian Keith: Great! Thank you much, Ryan! Folks, thanks for listening to Red Beard Radio. Go ahead, give us a five star rating, subscribe in your podcast app, and if you have any questions, go ahead and email me- [email protected] and let's talk.