How to clockwork your STR business with Mike Michalowicz

Okay, Mike Michalowicz, thank you so much for doing this today. I really do appreciate it. We're going to dig into a lot of questions that I've prepared and the audience have prepared. Before we do properly get started, I've got a little intro. But to tease you on the intro, I want to personally thank you for helping me not have to buy a cow.

That's a great cliffhanger, Mark.

Here we go.

Fully engaged.

Here's the intro. This is a freestyle going off the dumb. Ready for my close up.

Good looking, let me tell you. Get more bookings. Aw, that'd be nice. Giving me tips, tools and advice. Yeah, you're gonna get em hun. You're gonna sit back, listen to Mark Simpson.

Whoa.

Having a blast. Gonna get it on the Bruce Lee podcast. Bruce Lee, like Bruce Lee. Cause it's so hard and the tea is loose leaf making up those rhymes. Don't write it, just do it loosely. If you want my respect, you're better but direct. Here are the words in the podcast. That's what comes next.

All right, that was my get different.

I love that. I love it.

So the, the gentleman rapping, he's a guy called Chris Turner. You do got to check him out on YouTube. He is a middle class, not a very upper class British white guy, but he turns up at events and he does freestyle raps. I discovered him on YouTube in the lockdown. He had a cameo account. I set up a cameo, started chatting to him and he very gracious, did a couple of introductions, a little raps for me. So that was one of them. That's the podcast. That's my get different.

Oh my gosh. Is that radical? I've never seen someone do that before and it was fun and engaging. I love the Bruce Lee with the tea leaves. That was cool.

Yeah, I'm glad you could see that because I didn't know. I don't know if you can see it or hear it, but the anime, a guy called Ollie Hodgkins got a shot him out. He's a very talented animator, but we can dig into that all day. But I really want to celebrate you and just have a chat about you personally. Thank you very much. So before we get big, before we start, I wanted to give you a little test. Could you just please list off the. The books that you have offered and created because there are a lot. You are a prolific officer. If you could just list them off for the audience, that'd be amazing.

I'll try to get them in order. The toilet Paper Entrepreneur was my first written for early stage entrepreneurs. Second was the Pumpkin Plan. Then I wrote Profit first self published edition, which then became a mainstream edition. Surge Proffers revised and expanded Clockwork about business efficiency. Fix this. Next about pinpoint what you need to do, then get different. My most recent book is My Money Bunnies, my first children's book. And I'm just about to start writing my next next book, which is about employee engagement. So that's my list.

And we've got the Clockwork Revisited in June this year. Is that about right?

Yeah, yeah. Good job. That's coming out. Yeah, this June or July.

Amazing. No, again, prolific author, my personal journey began with you, with Blinkist. I don't know if you're aware of Blinkist.

Yeah, yeah, I know of them. Yeah.

So basically, so basically, Blinkist, they turn all the books into little 15 minute journeys. And I'm right, yeah, yeah. So I'm on Blinkist, I'm just, you know, checking out these 15 minute books. Books. And then Profit first came on and I dug it. And basically my journey is if I, if I really like the 15 minute blinkist version, then I'll go and check out the offer and I'll go. And then I just disappeared down the YouTube and, you know, you can pretty much find every single interview you've done by just Googling your last name.

The only one.

Yes. Yeah. And so, so from that, Profit first and then led on to Clockwork, and I really, really like resonated Clockwork with myself so much that I signed up with Adriana and the accelerator program back in December. And yeah, I've literally just this week been working on the Queen B roll. So I feel like I'm getting, I'm not going to reveal it personally publicly just yet because my team this week, my, my goal for the team is to also see what it is. And we're going to do a big little meeting on Monday and then we're going to come together. I think I know what it is, but I want to see what, what theirs is. So it's super exciting.

I'm so impressed you pinpointed it. You know, one of the major revisions in the new version of Clockwork was finding the queen bee role, making it simpler because it is the most critical. It's the heart of your business. So the question is, how do you pinpoint it? Because if you're serving that queen bee role, your business will flourish, but if, and sustain, if you ignore it, you immediately compromise your business. And I think most business owners don't know what that critical role is in their business and therefore they hit it haphazardly. So I'm thrilled that you found yours. That's good.

Well, thank you very much. So what I think for me personally, and then I dug into get different and I love get different and I've even there's a little a course coming up, a little a little tweaker course, a beta course coming up that Justin sent out and I've signed up for that. So I'm really excited. I mean, for me personally, my journey with you is started off with profits and finances, moved into time management and then now it's, it's marketing. Those are like the sort of the ways that I've gone. And that's why I'd love these, this podcast interview to go, if you, if you don't mind. So we're going to take one sort of question around finance, one question about time management and we'll go from there. Okay, so let's begin. So finance question. So let's quickly, I start at the very start of this interview. I thanked you for not making me have to buy a cow. And the reason why, because of that is in profit first. And then I've watched a lot of your YouTube videos. You explained a lovely story back where your children, teenagers were just delving into the Cheerios and the Cheerios and energy. And so basically mine is that my kids love drinking milk. And every morning, every afternoon, every dad, dad, dad, I want milk. I've got three boys, I've got a three year old, six year old and a nine year old. And I kept thinking back to your Cheerios analogy. And basically I used to give him a big cup every single time. Buying so much milk. I literally got to the point where I turned to my wife saying, we're going to buy a cow. Put a cow at the back then. But then I discovered those little espresso cups, those little espresso cups. And you know what? Put the espresso milk in the espresso cups. They were fine. So how could we please bring relay all of that, the Cheerios, the milk. And how can we relate business owners to working with smaller bowls and how business owners when it comes to finance, please.

Yeah. So it is all based upon a theorem defined by Parkinson, this guy named North Coke Parkinson, Parkinson's Law and what he proposed. This is back in the 1950s. That's human nature to expand our consumption to meet the availability of a resource. The more milk you serve for children is natural for them to expand their consumption to drink at all. And especially here in the States, you see all the time that soda bottles that used to be 8 ounces and became 12 and 16, now they make these things that are like a missile or something. They're so big and our consumption and our waistlines are expanding. There's something interesting that Parkinson also pointed out. He said as the availability of a resource decreases, we're forced to consume less because there's less available, but also become innovative. So the example I like to use is if you have a brand new tube of toothpaste, watch how quickly you consume it. You use long beads and so forth. If something falls off your toothbrush into the sink, who cares? I have a brand new tube of toothpaste. But when's that gnawed up prune like to a toothpaste? Now one droplet on one bristle hair seems to be adequate. The proof is that a new tube lasts maybe a month. And an empty tube of toothpaste can last upwards of a month. Our behavior shifts to be resource. This is true for what you do with your kids. You give them that espresso shot, they consume less and likely achieves the same level of satisfaction. Their behavior probably shifts. Maybe they sift a little bit more. Maybe that's perceived as a treat as opposed to mass consumption. But the ultimate consumption is depleted tremendously. And the value they derive is likely the same or similar, maybe even better. Maybe they even value it more. What I found with money, this Parkinson's principle also applies. What happens is for most businesses, we have that one large cup of milk. Everything goes into that one checking account. All the bills get paid from it. Just like our children, we drink it all up. What I propose in profit first is at your bank. And it's important to do at your bank. Because if you log into your bank account, that's the refrigerator you're walking to. That's where you're naturally going. People say to me, oh, I can do this on a spreadsheet, or I can do my accounting system. No, you can't. I realize you can put numbers there, but if that is not intercepting your natural path, if that's not your refrigerator, you're not going to see this. So we set these accounts at the bank. So every time you log in to see your balance, there's multiple cups there. Now money comes into that one account and we carve it up. We have all those little espresso cups there. One is for profitability. So money comes in. A portion, goes to profit. Another may be to pay the owner, their salary for the work they do, which is different than profit. Profit is a reward for owning a business. The owner's pay is a form of compensation. Taxes opex. By carving the money up into different accounts before you spend the penny, you know what's available to what degree in those accounts. So that's how this system works now.

Thank you very much. And again, if you want to check out more about that in more detail, please do go check out the Profit first book. I feel like a lot of people by now and I speak to a lot of hospitality owners and when I said that you were coming on the podcast, they, they were the one that they said to me first, profit first. Definitely one that's helped them get the balance, get the business up, which is, which is amazing. And it's definitely helped me, me personally and so many others. The second one was cl. So clockwork. And as mentioned, I've been going through the QBR role training this week and you've hinted that in the revised version it's going to be updated slightly. So the, the, the, I guess the, the sort of the question that I have, number one, busy hospitality owner, busy Airbnb host, busy short term rental owner. How could, how could they best find potentially what their QBR role is within it? And also as well, what are the slight little tweaks that you've, you've made for book one to the revived VE that's coming out this year?

Sure, sure. So it all starts off with what do you want to be known for? What do you stake your reputation in? I gave it this little tweak. I gave a new verbiage I called the Big Promise. Of all the commitments we make to our prospects and clients, what's the biggest? I call it the big. The Big promise you make. And as an Airbnb host, you get to choose this. You may say, I promise the most extraordinary views, or I promise the most hospitality if you meet with them, or I promise the cleanest rooms. Whatever it is, we have to pick the number one thing. I'm not saying those things aren't important. Only one thing can be the most recognizable thing about you. That's the definition. Most. Once you identify your big promise, the next step is of all the activities you do, what one activity most supports that big promise? That's the tweak I made from the old book. The old book has a list about all the things. We're going to kind of refine this now. It's a quicker step by step. What do you want to be known for of all the things you do, what most delivers on that. So back to that example of an Airbnb host the most magnificent views. Maybe you have a location that has great views, but it's seeing those views that matters the most. So now it's the deck facility is actually the most important part of the building because that's where people are going to see these views and, and making sure it's accessible and presentable and encourages people to see those views is the most important thing. Everything else matters, but nothing matters to the degree of that deck. So you can have a spotless refrigerator, beautiful linens, and people won't necessarily value that much because you're known for your views. But if that deck is messy and unapproachable, it's going to crush your reputation. Now here's the funny thing that's the reverse. If you make an extraordinary deck experience and the linens are a little bit ragged, the refrigerator isn't perfectly clean, people may notice that. But you will win because your reputation is being delivered on. The goal here with the QBR and the big promise is once you decide what to stake your reputation on, make sure you're serving the number one role, the QBR that serves that. If you do that and everything else is okay, but in the ballpark you'll do absolutely fine, probably more than fine if instead you do marginal at the QBR and marginal everything else, that will crush your reputation because you're not consistently delivering that big promise. And if you blow off the QBR but you crush in the other areas, it still will crush you because you're not serving on what you're seeking a reputation on. The summary is pick your reputation, the big promise, then pick the one activity of all those activities that most delivers on it and never allow that to.

Go unabated and visit for everybody that's tuning in, whether it's live or on the replay. I would love for hosts especially that know their QBR to put it below because what I feel and what I love about this is that we all the team boostly community become together and I feel like there's somebody watching this. It took me so long to get it for me, so long. And what really helped me was when we're doing the accelerator part of the training was that we looked at other companies and we looked at other companies and we from the outside in we did their QBR and like the big brands and stuff and that really helps if there's somebody who's in here. Yeah, it was really cool really helped me. And then again, I feel like once you figure that out, it is so important because it just makes your life so much, so much easier when you. When you've got that. So that's the Clockwork Book. So there's another book to go pick up, available on all your good bookstores. Now, the final one, the one that's really affected me is marketing. Now, this one has been going through my head so much at the moment with get different. And you've got the book behind you, behind your shoulder, which is very nice. So we're gonna go to the dad Differentiate, Attract, Direct. So tips for a hospitality owner to follow the. The dad to market different. And again, if you just break it down very, you know, very quick. I know we've pushed for time, but break it down and how they can use that and put that into attracting guests to book with them, ideally directly, because that's what this whole podcast is about. Not through Airbnb. How can you get a guest to book?

That's where the money is.

That's it. Yeah.

So what I did was I evaluated what makes marketing effective and what doesn't. And I found that this framework, dad. Is the essence of effective marketing. If you can check off all three of these elements, the D, the A, the D, your marketing is most likely to be successful, not guaranteed, most likely. If you miss even one element now, the marketing is crippled and it's likely going to flounder. And often when we're floundering, what most businesses revert to is they double down on it. You know, my Facebook ads aren't working, so I'm going to pay more and pay more, and we get frustrated and we start burning cash. So here's what the three elements are. The first D stands for Differentiate. The only way to get notice is if you are breaking out of the white noise, that repeating sound everyone hears. And if you receive junk mail at your home, you. You already know this. All those pieces of mail you get that even before you return to your home from your mailbox are going in the recycle bin. Those things are common white noise. Our minds are very attuned to irrelevant. And if it's been irrelevant in the past, it's going to be irrelevant in the future. The first time I received a hey, friend email, I'll never forget it. I was like, oh, my gosh, I've never received this. Who's this friend who calls me friend? They don't even use my first name. I love them. And I started to read it. I'm like, oh, this is irrelevant marketing. I think I've received hundreds, perhaps thousands of hey friend email. Since I've deleted them all, it doesn't work. Our minds become habituated, meaning attuned to what's irrelevant and ignores it. So to be different, don't do what your industry does. That's the key lesson here. If there is a common practice, often called the best practice, that's the practice actually to avoid because customers are attuned to that break and disrupt the pattern. So instead of sending a hey friend email, maybe you send an email with a big picture of you waving and holding the person's name, saying this is really for you or something. It may just be enough to disrupt the pattern unless they've experienced that before to no benefit. The differentiate is the first step and what does it garners attention. And we've all experienced this. If you ever walk down the street and you've done one of those double takes like what was that? That actually is your mind engaging in something different. When something different presents itself, how the human mind is wired is we must pay attention to it. But there's two other elements. A stands for attract. What this means is once you garner attention, you must keep people engaged by speaking to their needs, speaking to their interest, entertaining them, educating them. There has to be a justifiable reason for them stay engaged and spend those brain calories to checking out what you got going on. In fact, hopefully it's happening right now as I'm presenting to you. Hopefully I'm delivering enough value and maybe there's enough energy in my presentation that you're staying engaged. That is something that happens in these segments that every moment your mind is calculating. Should I stay involved with this consideration or am I going to drift off and do something else? In our marketing, we have to keep people engaged. And the way to do this is speaks their need, speak to their challenges, entertain, educate, but speak their language. Validate that they're significant and you get them throughout. But even that's not enough. Once you attract, we have to direct. That's the last D in this dad model. Direct is tell them what to do with this. And we want to move through this efficiently. You don't keep on trying to attract like I could present to you for 10 straight hours. There's a certain point of like this is enough. So I have to move efficiently, continue to deliver value and then get to the transaction. Here's the key about the transaction direct. It's not going for the final close necessarily. It's not about Being obtuse and unclear, it's about giving you a very safe and specific direction. So direct, tell something or invite them to take some do something. There's an exchange, but they derive value from it, but it's not so big that it overwhelms them. So just two quick examples and an obtuse unclear example. Visit my website. It engages you and then they call to action button says learn more. That's a total mistake. The whole reason you went to my website was to learn more and I'm keeping you going in this circle. The other extreme, maybe you went to my website and I do some coaching and says $10,000 deposit and conversation. Who is this guy? It's too big a mask. The appropriate ask may be give me your email and cell number so I can contact you and I will do a true 30 minute consultation business. Maybe you'll walk away with the success you need and we'll have to talk again. Maybe that transaction is enough value. You're giving me something of value. Permission to contact you and I hope I'm giving you value in exchange. That's what a direct is. Always have a singular, not multiple. Don't confuse reasonable, safe direction for people to take. That's the dad model.

I like it. And again, that's the get different book. And again that's just free of many that we listed off. So thank you very much for that. So you, very quickly, at the very start you said this is another book in the making. So you've done the finance, you've done the time management, the marketing. Can you just very quickly, before we go into the last segment, is just what's that book you're planning? What, what are you thinking of creating next?

Yeah, I'm really excited about it. So I listen to my audience readers. I'm very, very fortunate. I have a lot of people engaging with me and giving me their insights. And I ask, what's the challenge you're facing now? The number one challenge I'm hearing, and maybe this was partly invoked by Covid, is I can't hire employees. I can't find employees, I can't find qualified employees. The other thing is they're not acting like owners. And the wishes I wish my employees would act like owners. So I said, okay, how do you get employees to act like owners? Well, I did start this analysis about five years ago, but two years ago when Covid struck, I went double down on this. I am, I'm an owner and an equity owner in six different businesses. So we started testing out these models. And in the last year and a half, we've worked with about 300 businesses deploying what we believe is the solution. I give you a teaser. You can Google it if you want. There's a concept called psychological ownership. There is a switch that happens in the human mind where we go from responsibility to ownership, and then those are radically different. Most employees are given responsibility. Here's what you need to do. It's like leasing a car, renting a car. You must return it with a full tank, no scratches or dents. But what do we do when we take it out on the road? We munch down that gas pedal. We try to hit the corner super hard to see if I can get a Sienna Caravan to spin out. But when I own it, my behavior now I'm patting on the dashboard. Good job, baby. This is the best car ever. The thing is, I may not even actually own it. The bank may own the rights. I have what's called psychological ownership. There's a very simple way to invoke psychological ownership and move people from responsibility, where they're just employees to psychological owners. They're acting like you, the owner. And that's what we'll be teaching in this book.

And then that's. That's amazing. Without having to give them all the equity.

So, ironically, here's the best part. But here's a cool part. Giving equity actually may diminish psychological ownership. If you can get your employees saying, this is my company without any equity, that's the definition of psychological ownership. They're demonstrating they're doing it, and their performance in general will skyrocket.

Any idea on launch day? I know they say never tell everybody your launch day, but is it this year, next year, what we think this.

Year is definitely not 2020. It could be 2023. It's likely in the fall of 2023, maybe early 2024.

Amazing. Well, already looking forward to that. Thank you. So let's finish with the last sort of eight minutes with more about Mike. This is a little thing that, again, I. You can Google your surname and you can pretty much find every interview, every podcast, everything you've done, but there's a couple of things that I have dug into and I haven't yet been able to find out. So I wanted to just do. It's more for me, but it might also as well be beneficial to other people. So the first thing. First question is, do you have a quirk or something that other people think is just pure crazy or mental but you love? For example, mine is when I'm at the supermarket. I'm in. I'm in the queue. I'm in the checkout queue. I love reading those gossip magazines, you know? Yeah. So that's my little. My wife thinks I'm crazy. I love it. You know, I just have a little read check, get on my celebrity gossip. Is there something that you've got that's awesome?

Like Tom Cruise is an alien. I always knew this.

That is.

I do like doing that. I guess one of my quirks, actually no one knows this and I do it every day. I wear runner socks. You can't see them because they're under my jeans, but I wear runner socks. I'm standing right now and I generally stand all the time for work. I found these compression runner socks actually gives me more energy. So I've been wearing them every single day for the last three years, four years.

That's cool. I stand up as well and I'm always barefoot. And I got to a point where I was having. I googled and found on Amazon a little mat you can stand on that.

Tries and gives you my camera, kind of.

Let's see if it can get down there.

There you go. There's my mat. See, there's a mat I'm standing on.

There you are. Yeah. I couldn't get on with it. I couldn't get on with it. It got really dirty and because I'm barefooted a lot of the time, so. But very cool. Okay, right, next, let's bring it back to travel a little bit. You're obviously a big fan of a four week vacation. If anybody's read the Clockwork, you'll know that. Where is your go to destination? The go to place to travel.

Yeah. So there's this island. So I live in New Jersey. There's an island called Long Beach Island. And to me, there's a sudden shift. You go over this little bridge, they call it the Causeway bridge. You go over it and you leave the mainland, United States, New Jersey, onto this little island. And there's a transformation. In fact, it's a little bit of a quirk. My wife and I will play Jimmy Buffett's song called Volcano. We've been doing this as a tradition ever since we brought our kids. I've been going 50 years straight. It's such a tradition now that my kids, when they go visit with friends, they won't cross the bridge unless Volcano's playing. I will tell you, you go to this, there is nothing there that like, oh, this is the most beautiful place on the planet. It's overcrowded. It's. It isn't the Jersey Shore that, that disgusting atrocity on tv, but there's something about the transformation in my own emotion when I get on the island. So that's why it's my favorite place to go.

Thank you for that. Okay, so this channel, this whole boostly is all about helping hosts book, get. Get more direct bookings. My little elevator pitch is I help hosts get the tools, the tactics, the training and the confidence to increase your direct bookings and cut down on your reliance on Airbnb booking.com. so my question to you, Mr. Mike McCallow, when was the last time you booked directly with a property or are you a Airbnb booker?

Airbnb is the convenience. But I've directly book sometimes my travel. I do those home exchanges. So I don't know if that's 100 there. I will tell you the things that intrigue me to indirectly book is when I find something in a target area, like I'm looking to go to Scotland or something, and when I visit, I have a very specific community I'm going to, then I'll start looking there. And if one is unique, if it just presents itself as another flat to visit, not interested. But the second it says, like there's a brick in the wall that, you know, a former lord touched, oh my God, I am so immersed in the story. I gotta see it. I think the opportunity we have in direct booking is to show the intimate detail, the oddities and the uniquenesses and get people to immerse in that story that becomes really palatable to me.

Use the dad effect. Use the dad. Use the dad effect.

It works on me. I know what's going on and it works. Oh, my God.

This is why I love bringing people into the podcast from outside the world of hospitality, because we talk about that and it's like this is like the roadmap that we've been shown right now on what to do. So it's really exciting. So thank you. Thank you for that. And I guess the last question is, obviously prolific author. You read lots of books. You can, you can tell that just by reading and listening to the audible of all the other books that you mentioned. But what was the last book that you gifted for somebody? And why was that? That wasn't your own, probably.

I think the last one I gifted was the Self Reliant Entrepreneurs. It's a book by a guy named John Jantz. And it's. What's interesting is there's a guy, he's an authority in the marketing space. He wrote a book about just the mental welfare of entrepreneurs and how to on a daily basis consider the greater good you're doing. And it's a really profound book. It's not necessarily wildly popular, but I think it's wildly impactful. So I've gifted that a few times now and that's probably the most recent book I gifted someone.

Mr. Michaela, it's really appreciate your time. I just want to say that I put my first book together last year, released it February of this year. It's called the book Direct Playbook. And in January I did the audio recording. It's the hardest thing I've ever done. And in preparation I listened to get different. I listened to. And I'm so impressed at how you, you, you do it because it is so hard. You go into it thinking, oh, this will be easy. I just read and talk. That's all I got to do. When you into it, you're so paranoid of your breath and the noises you're talking. Oh yeah. And the amount of noises that my stomach makes is ridiculous. So.

We heard your stomach noise. Gotta redo that line. Yeah.

And I love the interview that you did with the editor on the last. Yeah, on the last book because it gave me like it was really good because all the things that you were saying about how many times you had to redo things and stuff. So I just want say to say I have massive respect for anybody who narrates their own book. So thank you so much for everything. I really appreciate your time today. I know we've only had a short amount of time, but it's been for me, bucket list ticked. Thank you so much and I hope everybody else has enjoyed it. Okay, I let you go. Thank you so much. Take care and thank you to everybody who's tuned into the podcast. I wish you all have an amazing day. Be proactive, don't be reactive and let's go and get some diary bookings.

Having a blast. Gonna get it on the Bruce Lee podcast. Bruce Lee like Bruce Lee Cuz it's so hard and the tea is loose leaf Making up those rhymes don't write it, just do it loosely.