How to Build a Community from Scratch

You know, I thought we would start, Neil, on how to build a community from scratch because we've talked about how communities will get stronger and stronger and we have our community and we can share some numbers publicly. And I got some interesting metrics around communities too. Maybe we should start with the business metrics behind a strong online community first and how much you can, you can make. And then we'll talk about how we've been building our community from scratch. As everyone here might know, Neil and I, we have a little for-fun group called the Agency Owners Association. It's a school group. So that's S-K-O-O-L. And the way it works is you pay a monthly fee. With the monthly fee, people will pay to get access, could be group coaching, could be courses, whatever it is exactly. Now, Neil, if I were to ask you, what do you think the churn rate is for communities on average monthly?

I would say the churn rate is 20 to 30%.

Yeah, 20 to 30% is a bad community, right?

Yes.

Now, what do you think would be like higher tier communities? Like, Good and then best of the best?

I would say good is under 10%. And best of the best, you're probably looking at under 5%.

Okay. So what do you think our community group churn is?

Our community group churn?

Yeah. So monthly, how many people are we losing percentage-wise?

I don't know how many people are in the group. So let's go with percentage. I would say percentage, 15%.

15%. Okay.

6%. All right.

That's the number for you. It's actually not bad. So what happened this week was, so we have a GM that runs the group. His name's Greg. He does a great job. He's got a lot of ideas. So I meet with him once a week. And this week, the conversation was how do we improve the churn rates, which we'll get to in a moment. But those are the business metrics. And there are some school groups that are doing, you know, $100,000, $200,000, $300,000. Are you sending me something?

No.

A month. And I thought Neil was gonna text me something. But These groups do well and some charge maybe $1,000 a month, some charge $100 a month, some charge, you know, $20 a month, whatever it is exactly. Our group happens to be $399 a month or so. But the thought behind it is if you create a good product with the community, then people will stay. And what happens is it's recurring too. So it's great. So people might buy your product, but if you have a community, they stay for the community because people are lacking that, the ability to hang out with like-minded people. And so what I did was I asked the community last week, I said, hey, what needs to happen for you guys to stay in the AOA, the Agency Owners Association, forever? I posed the question forever. You might as well go big, right, with the question. What do you think people said?

We need to grow our agency and make way more money.

No, no, no. Like what, what, what does a group need to do to help to get them to stay in the group forever?

Help them make more money.

Yes. But what they mainly said was they like to hear from both of us. They like to hear. So I was like, okay, Greg, I was like, Greg, you know, obviously, our main thing is our agencies, we need to focus on that. But I was like, okay, if Neil and I are going to meet once a week to have lunch or whatever, and we're gonna record, maybe if you can give us some soundbites too, I'll just bring my little vlog out and we'll just record because I have 2 mics on the thing. And we'll just record as we're eating or something like that. And we'll send it to the community, right? So the point of saying all this is, okay, how do you build a community from scratch? You have to be involved in the beginning. In the very beginning, I was pretty involved. And I was on the calls weekly, right?

Yeah.

Now you and I are on the calls monthly, but we're going to have these little soundbites and those will eventually just become like a giant course. And then that'll be for onboarding, right? That's our way around it to continue to stay involved and to post more. You're smiling. Why are you smiling?

Because I bet you in the next week, I'll start seeing lunch invites from you in my calendar. You will.

Yeah. Well, you were the one that brought up the lunch idea. Yeah.

How do I have lunch?

Yeah. So look—

But Eric just turned it into work.

Well, no, because we're giving advice to people. But I'll tell you what, we don't even have to do it at lunch. We can walk from your place to lunch and walk back and then we'll give advice as we do it. Okay, fair enough. Anyway, but the point is there's a lot of different ways to grow the community, right? One, you have to make sure that usually people join a community, if it's an online community, usually it's for the founders, right? And you have to be very engaged in the very beginning. The second piece is with a community, you have to make sure that you're constantly asking for feedback and being— because we didn't ask for feedback for a while. If we're not asking for feedback on how to make the product better, you can't make the product better, right? So those are 2 things to start with. And I'll turn it over to you and we can go back and forth.

With the community, the biggest thing that I found is it's going to churn no matter how good of a community you have. You can have like a really loyal face, loyal base like Joe Rogan or Elon Musk or whatever it may be. But the moment you're charging people for something, you're going to get churn. It's just natural. And the churn is going to be pretty bad for something like communities because it's not something that they necessarily— actually, it doesn't matter. They don't need it. It's not like food, toilet paper, necessities, right? I look at a community as you don't necessarily need it in life to survive, so you're going to get churn. But you look at business, if you have a sales team, you need a sales CRM. It's a necessity. Even in business, a community To pay for a community, to be part of one, isn't a necessity. I'll give you a great example of this. We were part of Dan Martell's SaaS community. I ended up joining—

SaaS Academy.

SaaS Academy, there you go. We joined it for one of our team members. His name is Carlos, back in the day. We lasted, I believe it was a 1-year membership and you can keep renewing each year. That's all we renewed for. Did our team get value from it? Yes. Did they love it? Yes, but as a business, it wasn't a necessity in which we had to pay for it on a daily basis to run our business. I look at like Amazon Web Services, a necessity. If you have a business and you need hosting, a tech business at least, you can't just cut your Amazon bill.

Goddamn it, Neil. The title says how to build a community from scratch. Don't talk bad about a community.

No, I still think people should end up doing it, but I would say if you want to do well and build a community and have it last, you got to figure out how to make it more of a necessity than a nice-to-have. And you can't really make it a pure necessity, but you can get closer and closer there. Like when you were talking about the Agency Owners Association, if you teach people how to reduce their churn, grow their revenue, they're more likely to stick around because it's helping their numbers and there's a direct ROI.

Yeah.

Most communities don't have that. When you give people a direct ROI for whatever they're looking for, like if you could have a community for how to become popular on social media, if you're actually helping people grow their social media following and they're seeing results each and every single month, they're much more likely to stick around than if you just had a community but there's no tangible thing that they're going to get after being in there for a few months or a year.

Yeah. Well, and this one, I mean, I'll give you a couple more things you can do to grow your community. YouTube works really well wherever you have an audience. If you just plug the link for your school, like it will convert, especially because Truel— Truel School has a trial that— and then it shows you how many people will convert to the trial and then how many people will convert from there.

What's our trial conversion rate?

I told you already. It's so trial. So on the landing page, it's about 6 or 7% to free trial and then about 30 to 40% of people convert to paid.

Running a digital marketing agency can be lonely and stressful, but it doesn't have to be. The key is to find mentors who have done it before and also join a peer group of other successful agency founders in the Agency Owner Association. As a result of the group's feedback, I launched a CRM campaign that led to 2 recurring clients for my agency in the first month. So if you are an agency owner looking to scale, join the Agency Owner Association.

Are we asking for a credit card to start the free trial? I don't know what school does.

I'm assuming they are.

I'm assuming, yes.

40% is too high.

Yeah.

So that's what it is. But what I will say too is Neil's absolutely right. The churn on these monthly communities, online ones especially, is higher. Like, so usually in SaaS, 5% a month is actually high. We're at about 5%, 6%, right? It's not bad. But just understand that if you have 5% churn, you have to replace 50% of your customers every year. That's a lot. Neil brought up a good point. So we met, I met with my GM, not Neil. I met with my GM earlier this week for the AOA. And he said, so like, what are we trying to do out of this? And I'm like, Look, man, honestly, at the end of the day, the number one problem all these people have— and we've, we've quizzed people before— the number one problem by far is getting more customers, right? That's the problem. So for the $399 tier, we should just help people at all levels do that, right? But at the end of the day, and I was very transparent, I'll be transparent with everyone here, we are looking to partner up with or potentially acquire agencies. And those— for those people, we want to meet these people in person, right? Because you build an in-person relationship, have them come over to Beverly Hills. We'll do like a— we'll do like an in-person thing. Maybe once or twice a year and that's it. Because Beverly Hills is home turf for Neil and myself. Or LA is, I should say. But that's where we're trying to go with this. So I think you have to understand what you're trying to build. Because if you don't know what you're building for, it's like, oh, you're just trying to do it to make money. That's not going to help. You have to understand the problem that you're solving. And so for a higher tier, maybe you're looking to grow to 7, 8, 9 figures and get yourself out of the business. Okay, that's a different conversation. Maybe if you're just looking to acquire more customers and build a lifestyle business, which there's nothing wrong with, We have that for you as well, which is the $399 tier. Yep. Yep. All right. So that is it for today, guys. Go to marketingschool.io/agency to learn more about the Agency Owners Association. And that's the group where you're going to see our churn numbers get even better. Goodbye.