Subscription Models - Video Partnerships with Geoff Anderson

G', day, guys. I'm excited to bring you the second episode that I recorded with Jeff Anderson from Sonic side. Now, last week we talked to Jeff about the power of niche and how niching has dramatically impacted his business. And if you haven't listened to that episode yet, I do strongly encourage you to go back and do that today. Do that before you listen to this episode, actually, because it will make a lot more sense. This. This week we're going to talk about the power of subscription, the power of ongoing revenue working with clients where you're delivering constant, you know, content for them over a 12 month period, a 6 or 12 month period. This is a massive impact on cash flow. Now, Jeff is the author of Shoot Me now and is about to release a new book called Watch Me now. Now Shoot Me now is making videos to boost business and his new book, Watch Me now is leveraging those videos to maximize your return on investment. Because of course, if a client can see a tangible return on, they're going to find themselves booking you for more videos. So dig into this episode. It's absolutely brilliant. And Jeff is an absolute wealth of knowledge. I hope you enjoy the show.

Welcome to the Video Business Accelerator podcast. Each week we uncover the secrets to creating a wildly successful and scalable video production business. With your host, Dan Lenny, discover how the accelerator program is transforming the lives of our members at www.videobusinessaccelerator.com. enjoy this episode.

Jeff. It's great to have you back on the show. Last week you were kind enough to share your journey on niching and we teased the audience with something, something new and exciting, which is a passion of mine, which is. Well, I'll let you explain it. What, what is the secret sauce to moving away from lumpy cash flow?

Good day, Dan. Look, it only took me about 25 years to crack this, this nut. So I was, I think I was like a lot of small businesses and just chasing one client at a time and then hoping they might be a repeat client. That'd be great. That's ideal. And then doing a few, you know, doing a job for them and then trying to find the next one. And it was that constant roller coaster ride of cash flow where you're too busy to market, then you, then you too quiet to do any work and there's no money coming in. So you're furiously marking again and it's just constantly up and down, up and down. And yeah, it was, it was pretty tough. It was pretty, I felt like it should have been, you know, should have been Easier, and I wish it was. And finally I've, I seem to have. Well, I'm worried about saying I've cracked the code because I'm thinking I'll bloody jinx myself and it'll all fall apart.

In that case, let's just say you're exploring a new way of doing business and so far it seems to be working out.

I like that. Yes, let's, let's say that.

So following on from the public school niche, how did this next phase evolve for you?

Public schools in the uk, we're talking.

About ongoing subscription based video services, aren't we?

Yes. So I was working with these schools and actually one of my clients helped me and she, because we were making, you know, a dozen videos for over the year because they need constant content. So that was, that was great. You know, there's opportunity there for repeat clients and all of that and ongoing clients. But she had a very strong marketing brain and she said, you know, why don't you make it a, you know, a monthly retainer sort of package? And I'd already been speaking to a few other colleagues who are mentors and business coaches around this space, around this concept. And so it was just a matter of packaging it up the right way. Originally, it started off as a spreadsheet where you buy six videos a year, it's going to cost you this much a month. You buy 12, it's this 20, it's that 40, it's that. And so that was kind of as crude as it was, but then I've subsequently gone and packaged it up into a nice 8 page glossy brochure which packages, you know, outlines what these services are. And then it's sort of got a grid at the back which then gives you the details of the different offers and how it all works. And so that, that all sort of came together the right way. And. But then, so then I already had a few clients that I was working with. I was making videos for them, but they were more ad hoc. It was kind of one here, another one there, a few more next term, whatever it was. What this enabled me to do was then go to them with a much more structured offering. And the classic case I had was one school said, oh, look, we need to make. This is one of the clients I met at one of those Educate plus events I was at where they.

At the end of the meeting they said, oh yeah, we know who you are. We were actually thinking about getting a fundraising video and oh, okay, yeah, look, I'd be happy to talk to you about That I said, by the way, what I'm doing with a lot of schools to make it more cost effective, I'm working with them on these packages, which means you can create more content more often, but they're still high quality. Is that something you'd be interested in having a look at? And she goes, sure. So she has a look and she says, okay, well we'll get six. So that went from a conversation about making one video to a conversation about making six videos in a heartbeat. So that was. It just made me realize, wow, this is so easy, not just for me to sell, but so easy for them to buy. Which I think makes, it is really important to understand as well because I was able to offer them a solution which was very cost effective. I packaged it in a way where I said normally. And also what I did was I packaged it, which I think is you want to explore is how do you maintain control of it? Because you say, okay, we're going to do six videos. I go, great, well let's make these into a, you know, enormous bells and whistles and big productions. And it's like, whoa, whoa, that's not what we had in mind. So what I've done is I've put some parameters around. I've said, look, these are based on a one day shoot, they're based on a two day edit. It includes everything you need from your script writing, your concepts, your creatives, all that sort of stuff. And so there is some parameters around it. And I also say, but we're not watching the clock that heavily with it. So the idea is it's very, we call it our video partner packages. I haven't copyrighted that, so if someone wants to use that, don't do it in Sydney. But otherwise I'm fine with it. And it's very much about having a partnership with these people. It's about saying, look, we want to be part of your team. We want you to get the best value out of the video production process. So that means we're going to help you with ideas, we're going to help you with concepts. When you say we need to make this video in three months time and we know about that, where they're shooting today, well, let's grab these scenes, this footage, because that's going to come in handy down the track. So it's about building up a library of content. And that's also one of the really big benefits of this concept is when you're working with a client regularly, you can build up a much richer library of footage. For them. So as other videos come along, it might just require a two hour turnout to do a piece to camera with the principal. You grab that and then you've already got all the B roll that you need already from the other videos you shot over the year or the years as it happens now with a lot of these clients. So our approach with this has been we want our clients to feel overwhelmed with the value they're getting from it. So it's been an easy process. They're getting great quality videos and it's a no brainer for them then to sign up again for the next year. So it just keeps rolling on. So for the first time I've actually seen how my business has a value that's beyond just me and Tom, who works for me and our freelance cameraman, as into something that could be saleable at the end of the day. Because if we've got a dozen of these clients signed up on annual contracts, it's a very viable business for somebody to pick up and buy. And as I approach the latter half of my career, I'm starting to think along those lines.

It's so interesting and I guess one question I would have would be, so let's say a client has 12 videos across the year, but they, but they need more or they decide they need extra. How does that conversation evolve?

Well, I'm actually about to have that conversation. Well, we just started having that conversation with one of the clients who's got a package of six videos. We're halfway through the year and we've done, we're on the fifth one for them. And they said, oh, what do we do? And I said, well, we can review the package. The way I've actually structured it is I've said, you know, you get 10% discount off the list price if you, if you go forward with the next package with, with another video after these ones, which makes it very expensive for them. And I think, you know, what I'll do is I'll try and convert them into a customized 10 videos a year package or a 12 videos a year package and get them on board with that. Because then if they're seeing the opportunities of making, you know, 10 or 12 videos a year, next year will start the conversation at that point, say, well, let's sign you up for the 12 videos a year package since you got such, you know, great engagement with it last year. And I think that'll be an easier conversation. So the whole philosophy around this is to make it easy for the clients is to be reasonable with them to give them great value. So I'm not there to sort of. I have had other clients who have been on less structured ones who after, you know, one term, you know, done like 20 videos. I'm going to, yeah, look, about this arrangement we have, we need to review this. And they were saying, well, listen, we actually don't have any more budget for the year, so we're just going to pull the brakes on it. And I said, okay, well that's fine as well. So it's, you know, it's about. And the idea is being a partner, you do can, you can have those conversations, you know, you be frank and respectful of each other and just say, listen, this is, you know, we do want you to get great value from it, but we kind of feel like you're taking a bit of advantage of us. Not in those words, but you just pointed out, look, you know, we said we do six for you. We're kind of like, I've done 12 and I know some of them were a lot simpler or whatever, but yeah, you do need to manage it as it goes, but just have those conversations.

By having it documented. So I have the glossy brochure which, you know, points out what's included, but they don't read that. They just look at the prices and go from there. And then they ring up and say, oh, well, how long are the videos included? I said, well, as it says it's, you know, one to three minute videos that we're talking about. So I also put a proposal together.

Which then just clarifies some of the key points in it. I get them to sign off on that. And something I've got to add to the proposal because it's come up now is that some of the clients haven't taken advantage of all the videos during the year. So I said, well, we bought six, but we've only done three, so we'll do that. You know, we want to keep doing them. And it's like, yeah, okay, but we've, you know, we're managing our cash flow here. We've budgeted on those being done there, we've been paid and now you're getting us to make more videos next year that we're not getting paid for now. And we understand you have already paid for them. So what I've got to do is I've got to put a sunset clause in the contract and say, yep, you've got this for 12 months. If you don't use them all in 12 months, then we'll give you another three or four months to finish off what you haven't used. Something like that because you don't want it dragging on for years where they've bought a package and they're doing it one year at a time. That totally defeats the whole purpose of it. And that'll screw me over. So you learn these things as you go on. As with everything, you know, more things need to be added into the, into the arrangement as you become wiser with it.

Well, this is it, isn't it? I mean, I think what, what can happen and I think particularly with younger filmmakers is there, they want it all now. And of course with any relationship, things evolve, things change, things need to be tweaked. But I guess we're. When you have a specialist niche market like schools and you're working with them all the time, you become like a preferred partner supplier. You're a trusted advisor, aren't you? So how do you handle, I mean, you've touched on it there, but do you ever get people kind of taking the piss, really? Kind of like, we want a five minute video. Do you find that your structure keeps people working within that cause they've got a framework? Or do you find that there's challenges along the way where people just want more or less and are always trying to push and pull you and nickel and dime you?

Yeah, well, it's interesting. We know what goes into making a video. We know how much work is involved and what's a complicated video and what's a simple video. Clients don't care. They just want video number two or video number three. They don't care if it's a half day shoot with some existing B roll and bang it, you know, it's done in a couple of hours in the edit suite as far as they're concerned. Great. That's the video we needed. We've got it, it's done. So there's, there's a. But the other side of the coin of that is, you know, sometimes they don't understand how complicated a production may be and how much more work is involved with it. So look, it's about having that communication and also being, it's also, you know, in these packages we've, we've got, it's also been having a little bit of give and take on our side as well. So, you know, just saying, look, yeah, we'll do that. I mean, we did a fundraising video for one of the schools. They had a campaign and the idea was to make this one video, which we did, which is a great, great looking video. But they also wanted five other little social media clips to go with it, which were five other little productions, which was another day in the edit suite to get all those done. So they got a lot more bang for their buck from that one video because they ended up with six. They were all related to the one project. So we're going to wear that and just say, look, that's kind of one video with a bit of extra in it. So you go along the way. But you did remind me of something that I've wanted to mention to your listeners about payment terms. This setup is great because it's monthly and it just flows with us. I've got it automated with my accounting package and those invoices going on the 1st of the month with one client who does do a lot of extra productions and it's a lot more fluid. I do list on the invoice. I go in there and update and say, by the way, this is what we've done for you this month so that she can see the value that she's getting. Because there's a whole lot of little things that get thrown at us, which still takes time and energy. But in regards to the other clients that we have, because we do have other clients as we need to, because that's part of our strategy is about half of our money comes from our niche market and the other half comes from the other corporate clients and government clients that we do. What I do with the payment terms for those is I do 60% up front. Sorry, 20% up front. So just to confirm the arrangement and is 20% upfront, that covers our creatives and pre production stuff. Then I charge them 60% upon delivery of the first draft of the video. And this works really well because that means they haven't got the final production, but we've done the bulk of the work. We've done 80% of the work at least by then, by that stage, probably done 90% of the work at that point. So there's a fair exchange going on there. So by the time we do the first production, we've got 80% invoiced. So we've covered all of our costs and the last 20% is at least a profit if not. And plus some of the other. So what I hear a lot of people do is they charge 50% and 50%. The problem with that is if the client is difficult or they're slow paying, you've still got all these overheads and all these expenses that haven't been covered. So this payment structure has worked. Really well for me and people get it that well. Yeah, that's fair enough. You've done, you know, that much work at that point, so that's, that's okay to invoice it. They may not pay it straight away, but at least you've got it in the, in the system and it's, and it's working well. So yeah, I'm happy if your listeners consider that as a way to invoice because. And the only people I've ever found who have had a problem with it have turned out to be people who don't pay their bills.

That's so interesting. I love that because I've traditionally done 5050 and never actually had any issues, thankfully. But I like that. 20% on signing, 80% on delivery of the first draft and then 20% on the finals.

Yeah, 60% on the first draft.

Yeah, yeah, 6%. That's a nice balance. And you see you're getting the chunk of your cash along the way. Have there been any other challenges, for example, with these packages? Do you ever worry that you're going to find yourself, the schools all wanting videos at the same time and do you find any capacity issues?

Well, we just had a really busy month last month. It was full on actually. Normally these days then I don't get on the editing suite or get on the tools. I've sort of, I've got Tom who does an awesome job with that. But yeah, I was back on the tools, working away and it was a bit of fun. But we also our business model, I'm very much a lifestyle business owner. So it's not about trying to be super multi million dollar business. It's about having a healthy business, enjoying the ride, being able to look after our clients well. So I've taken 26 years to grow a very small business, but it's working really well for me.

But given our industry, we do have access to some amazing talented freelancers who we can call upon when we do see. We know we've got a busy wave coming through and you can generally see that with the forecasting. You can see, okay, we've got these three shoots coming on Monday next week. And then, I mean we've had weeks where we're doing, you know, shoot every day for seven days and then, you know, okay, well then we've got a whole wave of post production that's going to follow on from that as well. So yeah, scheduling that, being aware of deadlines, knowing which clients need it turned around quickly is an issue. And then just keeping all those Balls up in the air. But yeah, I think, you know, forecasting it, using, taking advantage of, you know, Doug Suter's freelancers from FCP Talent, which is now called something else. Your crew. Film. Your crew.

Yeah, I think it's your crew. Yeah. Doug who we had the podcast or maybe 20 episodes ago. Yeah.

So, yeah, there's. I think that's the beauty of our industry is you don't have to be burdened with overheads that don't relate to the projects you're working on. You can scale as you need as jobs come in and out. So I see people who, when they're doing a business, they want to go and, you know, have all the equipment, have all the crew, have all the office space. Right. We're ready to go. And I do it the other way. I get busy and then bring in the bits and pieces I need to manage the requirements.

I love that. And I think one thing that just struck me is that January, December, January seems to be around the world are dead months. And certainly in Sydney people just seem to, you know, leave, leave Sydney in January. So I guess one of the big advantages, most video production companies struggle around December, January, and it's that real feast and famine. Of course, with a subscription. Recurring revenue model. You know what revenue is coming in in December and January, but likely, I'm guessing schools are on holiday. So do you find yourself having less work? December, January, but the same amount of revenue coming in as you get the rest of the year?

Yeah, well, January certainly the holiday month for me and it has been for 25 years. It's kind of like no one's going to be around to pick up the phone. Nobody's going to be interested in talking, make the most of it and get a couple of weeks off the end of December. There's a few productions we do, we do some end of school events and things like that. So they need to be turned around. But that's usually first, first or second week of the month and then it's, it's sorted. So, yeah, there's a bit of stuff there, but also, you know, as I say, it's only 50% of our workload, although we've niched there with doing other projects. So we, you know, that keeps the wheels turning as well.

So, Jeff, just touch on your new book. Watch me now. How is, how is the landscape changing? And especially when you have these subscription clients, do you see opportunities to sell them additional services? For example, maybe look at getting into helping them with distribution or perhaps offering packages that bolt on social media cuts, because this is something that we're seeing increasingly across the board, is that marketing managers want more. More formats of content for Instagram TV or for Facebook or with subtitles. How are you seeing that as a potential growth area for your subscription packages?

Look, it's something that I see clients need and I'm just wondering if I need to be the person providing it. Because, you know, years ago when 3D animation was taking off, I thought, do I get involved in 3D animation or I just leave it to the people who do that every day, which is what, you know. So I look at stuff and work out, where's my value? And then where is the value from other people? I probably see the way this would work out is more me partnering with those people who specialise in that space. And we, you know, we do have relationships with people and we've referred some of our clients from the schools to those people who specialise in that space, because I. I think they do need to think it through in terms of what are they actually trying to achieve. Because having the video is just step one, getting people to watch it, getting people to engage with it. That's step two and that's what the new book is about. And it's giving lots of ideas and different things you need to be thinking about in terms of making the most of that.

One of my favorite expressions is from my partner, actually my business partner, he says then, just because we can doesn't mean we should. And I love that because I think one of the advantages of partnering with agencies, because there's a lot of talk about, you know, the secret to video business in 2019 is just to kind of become a marketing agency. But that's not why we became filmmakers. The skills involved in marketing are very different from the skills involved in making a film. And I think the other advantage, and I'm curious to know if this happens, is when you refer a business to agencies, do you get work back from the agencies where they refer video work back to you?

I haven't yet, so I've been looking forward to seeing that happen when it happens. Look, my priority is seeing that my clients are well looked after. That's, you know, people talk about commission and stuff. I said, no, I'm not interested in that. I just want to know that they're going to be looked after. If you're in a position to refer work to me down the path, that'd be great. But yet it's. I mean, and I think that part of that is because they've already got relationships with other video production companies. So ideally, I guess if you can find a relationship with somebody that's not at that point and that you can foster that relationship where it's a two way relationship, that would be. That would be ideal.

But I think what you know, you've been established a very long time. I think what I love about it is your intention, your authenticity is about making sure your clients get looked after. I think that's something that I've certainly discovered in my career is that if you just look after people and come at it from a real place of care and genuinely caring, it's actually. It's the best kind of marketing you can do for your business.

Yeah. No. And you know, I value my reputation very highly. So that you know, is at the bottom of all of that and it seems to work for us.

Jeff, this has been so kind of you to give us your time. You've shared some absolute nuggets. Where can people find out more about you?

They can go to sonicsite.com that's s I G H T a site as in vision. Or they can track me down@jeffanderson.com as well. That's Jeff with a G G E O double F. Do you want me to tell you about books I'd recommend?

Yeah, absolutely, please.

So the slight edge was one I read. It's by Jeff Olson and it talks about just doing things regularly and building upon it. So rather than thinking I'm going to change the world, just taking small steps consistently and that's what gets. Gets a great result. So that's a great one to listen to. I'd recommend that.

I love that. It's pretty much what we're all about. I'm all about consistency. If you can do. Running a successful business is largely doing fairly mundane tasks consistently.

Yeah. And also working out.

Which tasks are getting you the best return on investment.

Where's your time well spent? That's going to actually get. As I was saying in the previous episode, just doing busy with. With marketing just to keep busy. It's not effective. But picking up the phone and ringing the right person you need to speak to that can generate another 30, $60,000 for you straight away.

This is a whole other topic but I think it's worth touching on. That is just because there's five social media channels or six social media channels that are key doesn't mean you should be on them all. And people need to be mindful of not being overly focused on likes or shares or comments or with email marketing? How many people are opening the email or clicking the link? The only metric that really counts is dollars in the bank. And so what is I have a sign on my computer says, is this the highest and best use of my time? And you've always got to think, what is the one thing I can do today that can move my business forward? And that is usually a sales task. But some people are very anxious about picking up the form.

Yeah.

I get that. But you just got to get over it. It's not that bad. I mean, and the more you do it, the better you're going to get at it.

I think that's a great place to finish. Thanks so much, Jeff.

Thanks, Dan.

You've been listening to the Video Business Accelerator podcast with your host, Dan Lenny. If you are a video business owner who is tired of going it alone and would benefit from mentorship, support and weekly accountability, then mouse over to www.videobusinessaccelerator.com to learn more about how the Accelerator program can help you today. Don't forget to subscribe and rate the show over on itunes, and we'd really appreciate you taking a few minutes to leave a review.

Sam.