84. Part 1/3: The Coworking Sales Funnel Dissected
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TRANSCRIPTION
84. Part 1/3: The Coworking Sales Funnel Dissected
00:00:01 Welcome to the everything coworking podcast, where you learn what you need to know about how the world wants to work. And now your host coworking space owner and trend expert, Jamie Russo. Welcome to the everything coworking podcast, episode number 84. This is Jamie Russo. I own a coworking space in Palo Alto, California. I'm the executive director of the global workspace association and the host of the everything coworking podcast.
00:00:33 This episode is brought to you by my program. The coworking startup school. This program is for you. If you are investing in your coworking space and want to avoid costly mistakes and stress, by getting expert in peer support in a highly facilitated environment, I want to make sure that you create the right space for you and your target market, right? From the beginning.
00:00:53 I want to make sure that you get the business model, right? And then you're set up for financial sustainability that matches your goals. So I'll review your proforma, help you with your product mix design sourcing furniture, working with vendors, getting your marketing systems down, hiring the right team or learning how to run the space yourself and getting set up with the right tech and more,
00:01:13 if that sounds like a fit for you, learn more@wwwdotcoworkingstartupschool.com. I'm reformatting the program just a bit based on all the good things that I've learned from running it for several months and the next cohort will launch in the next month or so. So get your name on the list. If you're getting ready to open a space and want some support with that speaking of the next month or so it's August.
00:01:34 How crazy is that? I hope everyone's taking full advantage of the long days left of the summer before school starts. So we can get back to our normal routines. I am actually enjoying a very hot weekend day. I am in Madison, Wisconsin for the CrossFit games. I am not competing and I'm only watching, but I love to watch. And I have to just talk about this for a minute,
00:01:53 because well, because I'm sitting here recording in my hotel room, cause I really wanted to get this episode recorded. You know, for those who know me, I mean, I love CrossFit because I think it's a lot like coworking. I think people in co-working spaces are going through a journey and they want to be on that journey with other people, right?
00:02:11 They recognize that like the journey is the thing and they want to enjoy it and they want to enjoy the growth moment. And they want people who are with them on good days and bad days to cheer them on, to lift them up, to help them learn. And CrossFit is really similar to that. It's super community oriented and everybody around you just wants you to succeed and everybody's,
00:02:32 you know, doing their thing. You do, you is sort of like one of my favorite quotes and that's sort of CrossFit. It's like you could be in a class with somebody and maybe you're lifting a little bit more than somebody next to you. Maybe you're lifting a little bit less. People are just so encouraging and just community oriented. We've been working out at this gym.
00:02:50 That's really not equipped for all of the traffic that's in town for the games we go in the morning and work out and it's packed and there's no room for, you know, anything because there's so many people in there with barbells and, you know, try to do all sorts of things, but people are so like in touch with each other and so thoughtful.
00:03:07 And so just about helping everybody get their thing done that day. And I think coworking spaces are like that too. And I just want that in all parts of my life. So, and you know, the other funny thing about CrossFit is like everybody's wearing their shirt from their gym, you know, sort of a little pride to show off where they're from and workout clothes.
00:03:25 And I was thinking at our upcoming conference, it would be fun to tell people to wear shirts. Usually we're a little more, a little less casual at the conference, but it would be fun to have people bring shirts from their home spaces. Maybe we don't need workout shorts, but shirts from their spaces would be fun to kind of show off and have that pride.
00:03:41 So anyway, this episode, I will jump in here because it's a bit of a doozy. It has been a long time coming. I've talked about this year and there and posted it in Facebook groups. I had a kind of a spontaneous Facebook video that I did and the everything co-working Facebook group really early on talking about the sales funnel for coworking spaces,
00:03:58 because it's so important and so critical, but I wanted to record a show on it, but I didn't want to do it until I was able to sit down and really write out a good piece on it so that I cover all the bases in a really thoughtful way. So I did that and I'll include a link to the full written blog post in the show notes,
00:04:16 which will be@wwwdoteverythingcoworking.com forward slash 84. This is the first episode in a three-part series on the coworking sales funnel. There's a lot to cover on this topic and I want to keep it digestible. So make sure you tune in next week for episode number 85 for the second part of this series, if you build it, they will come. This is the line from the 1989 movie field of dreams that has led small business owners down the path of failure for decades.
00:04:48 There are a few other reasons, of course, that businesses fail, which I addressed in my last episode. Number 83, the top five reasons why coworking spaces fail. And I did get one email saying I was sort of a rating on braids. I want to be, you know, realistic and help people make good decisions. So listen to that episode,
00:05:06 if you have not. So if you build it, they will come. Fallacy is definitely on that list. You need, if you're going to build it, you need a sales funnel system and you have to work extra hard during your launch stage to get leads into the top of your funnel. So we're going to go through each layer of the funnel in detail,
00:05:21 but let's start here with an overview of the co-working sales funnel. And if you can't sort of visualize a sales funnel, Google it because there's lots of images online, but it's basically an upside down cone or the top is wide where all the prospective members go and then it gets narrower and narrower until it gets to the bottom where your, your conversion into membership kind of falls out.
00:05:45 So you want lots and lots of people in the top of the funnel, and then you want to qualify people and get them more interested in membership as you go through that funnel. And at the bottom, some small percentage, the people from the top will drop out and become actual members. So we're going to start at the top where we have leads that come from a variety of sources,
00:06:07 where do you want those leads to go probably to your website, to book a tour. They might go to your Google, my business listing and go straight to calling you or booking a tour from there. But let's for now just simplify and say to your website. So then once they're on your website, you want them to book a tour, lots of important things happen on the website.
00:06:25 Once they book a tour, you want to get them to the tour. And then when you get them into your space, you want to match their needs to their intangible goals of community productivity, sense of belonging, et cetera. You want to match those intangible needs with their tangible physical space needs to the inventory available in your space. And the ultimate goal,
00:06:47 if all of that is a fit is to convert them into a recurring member. So that's sort of the bottom of the funnel. If they don't convert site, then they're classified as a warm lead that we would nurture through a tour follow-up sequence. So the funnel is fairly simple, you know, a few layers here and we'll kind of dive into each one in detail,
00:07:08 and there are a number of levers to drive more conversion at each stage. So the critical path to success is constant focus on getting leads into the top of the funnel and then improving each step along the way of the funnel so that you drop the most members out of the bottom of that funnel, as you possibly can until you're full. Obviously there's some point at which maybe you don't want more members,
00:07:33 but we're just sort of going at this from a simplified perspective. So let's talk through each layer of the co-working sales funnel in detail. So we're going to sort of flip this for a minute and talk about the bottom of our funnel because this is the end goal and drives how we approach the higher levels of the funnel. So you want to determine your own end goal and adjust your sales funnel goals and sort of how you approach different aspects of the sales funnel accordingly.
00:08:00 And if you need help with this, see my post and my podcast episode, I have a blog post on it and a podcast episode on how big should my coworking space be? This really covers sort of your, you know, goals. Are you focused more on community and you don't. So, you know, maybe it's okay if you break even,
00:08:17 or are you doing this to generate income that can support you and pay your mortgage. Then you're very focused on kind of driving membership and making sure those members are profitable. So your sales funnel is going to vary based on what your end goal is and how much money you spend at each level and that kind of thing. So just make sure that when you're listening to this,
00:08:37 you keep in mind who am I and what are my goals? Because some of the things I say may, you know, apply to you more or less based on what your goals are. So the first layer that we're gonna talk about the bottom of the sales funnel, the end goal, start with the end in mind. So in the definition of sales funnel that we are using here,
00:08:53 we're focusing on a goal of building a recurring membership base that creates a certain net income at the end of a 12 month period. So we're focused on, this is a profit making enterprise here that is certainly also focused on community, but we are not just trying to break. Even. We have lots of nonfinancial goals and outcomes, but we're going to focus here on net income so that we can sort of think about that in our sales funnel.
00:09:17 So let's start with that number for easy math. Let's say you want to make a hundred thousand dollars a year, assume your margin is about 25%. That means you need to make $400,000 in revenue. So that $100,000 would be net income and then, or EBITDA. And then your revenue would have to be $400,000. If your merchants around 25%, which is sort of an ish metric for our industry,
00:09:41 depends on a lot of things. We can talk about that more in another episode. Okay. So how do we do that? We have our end goal, which is $400,000 in revenue, and we want a margin of about a hundred thousand dollars. So let's back into it. So this, this thing, you start with a goal and then we say,
00:09:55 okay, what needs to be at the top of the funnel in order to get that end result in the bottom of the funnel? So before we even talk about kind of getting people into the top of the funnel, let's talk about, do you have the right size of space and product mix to make this happen? This is super critical. And if you need more context on this,
00:10:12 again, listen to episode number 72, which tries to provide a framework for thinking through what size of coworking space you want to create. This is a really helpful exercise to do before you sign a lease. If you already have a space, this will be a good reality check to understand your profit potential. So like kind of doing the math here and estimating either you have this data on sort of the conversion points throughout the funnel,
00:10:34 or you can start documenting it so that you get it, and then you can do a real good reality check on. Can I even get to my goal with the systems that I have in place and the size of space that I have in the inventory that I have? So let's say you need to make $400,000 in revenue to get your performer out. Maybe it's a little dusty,
00:10:53 or maybe you're still building it, making sure your revenue potential matches your goal. So do you have the right amount of inventory of offices, dedicated desks, flex seating, meeting rooms, event space, and other revenue generating spaces and opportunities like virtual mail to make this happen. So again, this is an arbitrary number, but whatever your number is, you know,
00:11:12 is your space size and the offerings that fit in that space. Does that all add up to the revenue goal that you have in mind to get to your net income goal? If you have not done a pro forma yet, then the very simple explanation on how to do this is to take the number of each product type and multiply it by the sales price and add it all up.
00:11:31 So if you've determined that it is indeed $400,000 and you have a match, great, if not, let's update our revenue goal to match our inventory so that we have a realistic picture of what we can do with the business. One note here, when doing this exercise before you open, I would be conservative and not assume that you're going to oversell flex seating or hit the lottery with virtual male members until you prove that you can.
00:11:54 So I like to, you know, you can be pretty realistic with dedicated desks and offices and assume sort of that they're going to be, you know, 90 to 95% full, but the flex seating, I would just be careful. You can assume that you're going to hit some level of fullness, but do not assume you are going to sell your flex seating at three X of what your inventory is just to make that revenue number look better.
00:12:15 Please don't do that same thing with virtual mail. Let that be upside. You do not want that to be, make or break whether you open this business or not. So you want these two opportunities to provide upside versus a potential disappointment to your financials. So if you already have a space and you complete this exercise and you come to the realization that didn't really think this through,
00:12:35 and you're a little bit in trouble, what do you do? Revenue potential is nowhere near what you thought it was, or you've been open for a year or two. And your product mix has the potential unpaper to yield your $400,000 goal. But it's getting pretty clear that that's not happening. And I want to mention here, I say, you've been open a year or two because it can take,
00:12:56 you know, 18 months to get your space up and running depends on the size. If it's a small space, you might be rolling. You know, if you're in a market that has pent up demand, you might be rolling and it might take you less than 18 months to get up to speed. But if you're in a market that has a decent amount of competition,
00:13:14 then it may take you time to build up to that 90%, you know, capacity. So you need to be prepared for that. So you don't really know if it's not working until you get into like year or two. And if it's not looking like what you predicted, what do you do? So this is a fairly simple math problem that, you know,
00:13:30 you may or may not have the result that you're yielding for. So the question here, can you fix your product mix and get a payback on that change before your lease runs out? So this is sort of, if you don't, this is not to do with changing your marketing mix, because maybe you could change your marketing mix and fill the space faster,
00:13:46 but in two years, unless you've done no marketing, you know, if you've done no marketing, then maybe marketing's the problem. But you know, say you filled up your offices and you've sold no open space. You certainly can try to tweak your marketing mix, but maybe you have a product mix problem. So we're focusing solely on product mix. You're not on location or marketing budget.
00:14:06 So for example, it's clear to you from your feedback and sales number that you more easily sell the offices that you have than open flex space. So like for every six tours that come in, four people want offices and two people want open space. And to take that a step further, you have data on this. If you have an open office,
00:14:22 it sells within five days, but it takes an empty, dedicated desk, 60 days to sell. So you probably have a little bit of a product mix challenge in your market. So the question here, can you build more offices and make a return on them in the time that you have left on your lease? If that's the product inventory that is selling the fastest.
00:14:41 So a little more math here, and this will all be in the writeup. If it's hard to sort of get through this in an audio format, it might be easier to see it in writing, but say, you know, so how many the questions to ask? How many months do you have left on your lease? What's your price per office say you have four years left on your lease.
00:14:59 So 48 months, a four person office in your market sells for $1,800. That's a potential revenue over 48 months of 86,400. Now determine how much it costs to put in a new office, including permits, drawings, walls, electrical, HVAC furniture, ethernet ports, and anything that you need to do to update the space of pulling permits happens to trigger an update like in California,
00:15:23 if you do, if you pull permits in general, you're looking at some led lighting updates. So you have to factor that into the cost because those are not optional. You may have nothing like that in your local area, but you want to make sure you know that before making, pulling the trigger on this investment. So I typically ballpark, this is a total ballpark,
00:15:40 about $10,000 per office, depending on labor furniture, costs, architecture costs, all those things. So if that's the case here, your payback time is only five months and you have 48 months left on your lease. So that's 43 months of profit-making potential. And that could totally turn around your revenue potential. And you could start to really match that revenue goal that you have by having the right product mix.
00:16:05 So if that's the case, you want to do that sooner rather than later, because the longer you wait to make that change, the less time you have to enjoy the profit margin on the investment that you now have to make. I know that's not always easy because now you have to come up with more startup capital that, you know, you thought you were done spending.
00:16:24 So this may be a bit challenging, but generally if you've been open for 18 months and you're seeing a product mix problem, that's likely not going to shift anytime soon. And so you probably want to try to fix that if you can and make the best of it. So, one quick note I'll make here. There are a couple of companies that are making it really easy to add walls to your space without pulling permits.
00:16:47 Imagine space is one. We've been working with them on walls for MySpace, and Varidesk, they have a system that's not quite out yet, but should be by the end of the year. So imagine space can add offices in seven to 10 days. They can ship you the, so you have to go through the whole sort of requirements process, which can take a little bit,
00:17:06 but in my case, the holdup is not a magic space. It's me, but if you're ready to do it quickly, you can get a quote. And then if you give the thumbs up, you can get walls. All the components for the walls shipped in seven to 10 days and offices assembled within a day, depending on how many you need.
00:17:21 That's assuming one to two offices at a time, the walls are considered furniture. So they generally don't trigger sprinkler requirements and other permit related things. But you do want to make sure that those rooms have the right air flow and you probably want a sprinkler in there anyway, but those are extra detail. They're not going to talk about now. I'm just saying there are some flexible options that can help you get walls and add offices pretty quickly.
00:17:44 Okay. So we've kind of talked about the importance of making sure your sort of business model is lined up with your end goal of what's your net income goal. And do you have the right product mix to match that? So now we're going to move back to the top of the sales funnel, which is assuming that in your marketplace, you have the right number of offices and dedicated desks and open flex space and meeting rooms and event space and unique spaces like podcast rooms and photo studios and whatever it might be,
00:18:15 you have the right number of those and you are ready to sell. So now your big goal is to get people in the door because you know that when they come in, they love your space. They love your team and you have a really good conversion rate. Hopefully, you know, that you need to track those things. So the top of your coworking sales funnel is getting irrelevant visitors to your website.
00:18:36 So if you are in a small market with only say one or two other coworking spaces, then you might just get lucky and show up in the first few search results on Google search results pages without doing much work. However, if you're in a market with competition, then you are fighting your way to the top of the Google search results, lift from the bottom.
00:18:57 And that can take time. So generally people are, you know, they're searching to find your space. You will get some direct traffic. Somebody met you at a networking event, or somebody told them about you and they type in your, the name of your space and the URL comes up and they go to it directly. But generally people are searching for terms like coworking or shared office space or just office space or whatever,
00:19:20 kind of the relevant terms are in your market. And those may not be the ones you want to do some research to figure out what are the right keywords. So there are two, but your goal is to show up in the top three or so search results on the search results page in Google, which is the Google has, this is further down in my notes,
00:19:39 but I think it's about 57% of the search traffic in on a computer on mobile. It's about, I think it's 90 and I'll correct myself if I'm wrong down below here. But so I focus on Google because it is the primary search engine. So you want to make sure your index with all of the major search engines, but that's too much detail for this discussion today because we're going to keep it,
00:20:01 you know, sort of medium level of detail. So there are two ways to show up toward the top of the Google search results page. This is super important. One organic SEO or search engine optimization, which means that Google has deemed you the most relevant result for a particular search. And they just show you, or number two, to pay Google,
00:20:23 to let you win this little contest by spending money on Google ad words. So I'm simplifying this a great deal because this is a very, very deep topic that you could just snowball into. But generally you want to start putting resources towards building your search engine optimization ranking, which is organic. And we'll call it free, even though it's not really free because you have to spend time on it and do content marketing and do all sorts of other things that require some time and resources,
00:20:51 but those can be your time or you can pay to win. So here's what I would recommend doing is immediately start working on both parallel path. So your search engine optimization is what is going to help you pull back from some of your spend over time, because you're going to get, or on the top list of the organic search results, which means Google thinks you're the best option for the searcher and will put you at the top of the list without you having to pay.
00:21:16 You may always need to pay a little bit. We do, we pay unless we're full and we have no buddy with no spot, even then I sort of questioned it. You always want lead gen, right? You always want flow through the space and people knowing about you because co-working spaces always have turnover. So are we ever really full maybe for a moment.
00:21:33 So let's talk about content sort of the search engine optimization piece and what you can do to start ranking organically content marketing is a good place to start. So what does that look like? Blog? Make sure you have a blog on your website and you may thinking, what the heck am I going to blog about? I totally get it. Content marketing in itself can be complicated to undertake,
00:21:57 especially if you have no marketing background, no writing background, et cetera. I have a great resource for you. Kat Johnson is my go-to resource for coworking content marketing. Her website is Kat johnson.com. She has tons of free resources. She has a great newsletter, and she's constantly giving tips on topics that you could write about and ways to be consistent with your writing for your coworking space.
00:22:25 The trickiest part is figuring out through your voice and what you want to write about because it needs to be interesting to someone in order for Google to sort of recognize that people need to be reading your content. So it has to be relevant to your audience in order to kind of move the needle. So spending time writing blog posts is certainly not free per se,
00:22:46 because you're using your time and your time is worth money, but it can reduce your spend on marketing over time. So you want to write blog posts two to four a month, or hire a writer to do that. So remember time is not free, but in the expense of hiring a writer is relatively low. And this is, think of this,
00:23:06 not a cost per se, but an investment in your search results rankings for the future. So we actually just started doing member interviews for our blog, and I hired a writer from Upwork that I've worked with before. So I make an introduction to her and my member and she's writing sort of nice member features for us. So that's never going to get done if that's on my to do list and my community manager has,
00:23:32 doesn't have time to do it, and it's not her forte at all. So you may have a community manager that's good at it. And I think cat is working on potentially some support for community managers to help them get the writing done more often, but outsource this and get it done. It's important. And it's investment in not having to pay Google to show up in the ad,
00:23:53 the ad listings someday. So it can take up to six months for your organic SEO to kick in. So you need to start doing this now and not get depressed when you don't see yourself rising in the rankings quickly enough. And there are tools you can use to track where you're at in the rankings. And I'll try to link to some of those in the post.
00:24:13 So it will take time, but you'll slowly see yourself moving up the ladder. And you do need to kind of think about this in a little bit of a competitive way. So the other spaces in your market can do the same things, right? They can pull the same levers, they can do content marketing. They can post blog posts that are really amazing.
00:24:31 Yours need to be super consistent and super amazing. And I will tell you the great thing here. And this is true of many things in life is that if you are willing to be the one to do the work, stay focused on the things that matter. Then you can win. Even if you have a smaller budget, I'm telling you that lots of business owners follow bright,
00:24:52 shiny objects, and they are very bad at being consistent with things like content marketing. So if you can force yourself to not see the squirrels and do these basic things consistently, you will eventually get there, but you have to do them. It won't happen if you don't, again, you're one of two coworking spaces in a market. You are going to find yourself at the top of the Google search results,
00:25:15 right? So you may feel like I don't need to do content marketing. I'm telling you start now because you want to build your authority in that market. As new competition comes in and it will, we are at the beginning of this industry. And so do not rest on your laurels. I don't know if I like that phrase, but do not get lazy and think that you are first and your first or second,
00:25:38 and you don't have to do anything to show up cause you want to show up. And the other thing that actually, I noticed this for Madison, I had my flight group calls the other day when I first came into Madison for the CrossFit games. And I on my phone, did a search for meeting room Madison and I didn't get any results. And I thought,
00:25:55 are there no coworking spaces in Madison? Like I just wanted to rent a conference room for a few hours so that, you know, I was worried about not getting into the hotel and would it be noisy and you know, all those things. So I couldn't find one. And then I was looking today on my actual computer. And if you type in,
00:26:12 you know, co-working medicine, well, there's an industrious and there's a couple of other, one local ones. And I thought, well, Hmm, this is interesting. They're not doing their content marketing on meeting or spaces cause I'm sure they have meeting rooms. And they're also not on liquid space, please. I mean, I happened to just look on liquid space because they have a mobile app,
00:26:27 DaVinci and cloud view or other good resources for meeting rooms as well. But I hit liquid space because that app is on my phone and I couldn't find anything on there either. So again, like, even if you're showing up as you know, under coworking, that's not what I searched under. I searched under meeting room on my phone and nothing up.
00:26:43 And so make sure you're writing keyword, rich content that will help you show up in those search results. Even if you're showing up for something like coworking. Okay. So the next thing you have to do once you start getting these blog posts on your website that are super relevant to your audience, which you can work with cat to figure out, actively promote your content on social media and via your email marketing.
00:27:05 And that's a whole nother topic, but you should be doing a monthly marketing newsletter so that you can drive visits to your blog posts, which will signal to Google that you have relevant content. So obviously the next step in the sort of producing good content is that people actually read it so that Google continues to rank this rank you for this article. So again,
00:27:25 this requires work, but it's not hard work. It's not complicated work. It's just consistent work. You must promote your content on social media. And I get how hard this is. It is not riveting. It is not super strategic. It is just work. So make sure you have somebody assigned to do this and to sort of keep promoting your posts.
00:27:46 And if you have posts that are evergreen, meaning they're not tied to a holiday or a specific time of year, there's a great tool that I talk about in my 2018 co-working tech and tools guide, which is called meet edgar.com. It's similar to like a HootSweet where you can schedule posts, but you don't have to schedule them every time you want them to show up.
00:28:05 You can put them in a library of content and then meet Edgar. We'll pull from that library sort of random. They use some algorithm based. You can tag the post for what type of post it is, et cetera. And they will pull things over time for you. I use that for my website, so I don't have to keep constantly scheduling podcast promotions.
00:28:24 Okay. I put this under content marketing because it's free, but it's not totally sure it fits here, but you've heard me mention this before, complete your Google, my business listing. Okay, you have to do it. I put a link at the bottom of the blog posts that I wrote on this. You can just Google. How do I set up my Google,
00:28:41 my business listing, but I put the link in there. You must set this up and update it regularly with reviews, photos, and offers. So I've mentioned this a million times. My Google, my business listing gets 20 times the traffic that went, my website gets likely because so many users are searching via mobile. And so if you go to Google maps,
00:28:59 if you have an iPhone and you go to Google maps and you type in coworking, the search results are Google my business listings. And so if you don't have one, you do not exist. You must exist. You're a local business. You have to set this up. It's totally free. But the content marketing piece of it is that you need to regularly update it.
00:29:18 So if you have a community manager, this is what I do with mine in a sauna, which is a project management tool. She has a task that repeats every month, which is get two reviews for Google my business post to new photos and make sure there's always an offer up. So this takes time to work through with the community manager, especially if they're new and they're trying to get all the things going,
00:29:37 but it's critical because Google likes content that updates. And so you need to keep those updated. And then the other content marketing piece is try to get backlinks. So another key measure that Google uses to determine your ranking. And again, I'm trying to keep this fairly high level, but these are a few things to focus on is how many other sites link to you?
00:29:57 This can be hard for a new site because who's linking to you. No one to start with. So getting back links might require some hustle and maybe some bartering, but you can talk to the local press. You can talk to cohort, you know, list yourself on all the coworking directories because those count, and this will help you to start building authority.
00:30:16 A great resource for SEO in general is a website called S E M rush. And I linked to that in the show notes and the blog posts and a book from this guy started following when I was in Chicago, he hosted an event very early on in my inner space, stays in Chicago. He's sort of famous in Chicago. His name is Andy Crestodina.
00:30:35 He's the founder of orbit media. And he has a book these in his second edition to the book called content marketing chemistry. It's like a little mini sort of workbook size publication. So you need to don't, you can't order the Kindle version. You have to get it from Amazon. And it's a physical book, but it's not super long. And it's very approachable.
00:30:54 So if you want to understand sort of content marketing better, that's a great resource. And again, just a reminder, SEO can take a good six months to start kicking in. So this is like weight loss. Like you won't notice it at first, it takes time and persistence and you cannot give up. So then remember you're competing with your neighbors.
00:31:13 And so if they're being more consistent than you are and doing all the work, then they are going to win. So you want to make sure that even though it's not super sexy work, you do it or find, you know, assign this to somebody on your deem. Hard work and consistency will pay off over time with search engine optimization. But so this is important if you're in a new market and there's competition and you're not showing up at the top of the list and you're waiting for your SEO to start working and really humming,
00:31:41 you need to be selling memberships because you want to you, so you want to presale, which we talked about on a recent podcast and you need to start filling some seats, right? So you can't wait six months for your SEO to kick in and to be on the second page of the Google search results while that's happening. So during this time you need to pay Google to get a good spot on that search results page.
00:32:02 You probably have no idea how to run Google AdWords. You can learn yourself. I definitely have people in my fight groups who are, you know, learning themselves and teaching themselves. I think it's hard, especially if you're in a market with a lot of competition, to be able to think through the return, keywords can be expensive. So if you're in a top tier city,
00:32:22 this might feel a little bit overwhelming because it may look expensive, but generally, if it's expensive, then people are getting a return on the investment. So try to find, get, you know, through word of mouth and your network, a good ad-words professional who can help you get started. Again. This is going to be because lots of ad-words professionals will want our really high commitment of spend to do this,
00:32:44 but ask around in your network, find somebody who's willing to do it and give you some help. But I think you want to start with a professional for Google ad words, Facebook ads. Maybe you can do yourself. If you have a good designer and you can learn them because the interface is pretty easy. But I think Google ad words are a little bit more complicated.
00:33:00 So another couple of notes here, if ad-words just feels really out of reach, consider Facebook ads and Yelp do not forget about Yelp. Actually, we were talking about digital marketing on one of my flight group calls last week. And one of the members said he did not expect this to happen, but he was getting great leads from Yelp and he has an ad running on Yelp.
00:33:19 He has an agency that he's working with, so he's not super down in the details. So I looked up his space and he has a Yelp ad running. And he said, he's been getting lots of leads from Yelp, which surprised him. So don't forget about these other search engines. I think Yelp like featured ads are like 2 75 a month. They give you lots of good data and data,
00:33:38 sort of a little dashboard on, you know, clicks you're getting and what you would have gotten without the ad. I don't know how they pull those numbers, but we run yell beds because Yelp, it depends on your location too. So I'm in California and Yelp is very popular in California. So people use that as a search engine. And that's the other place where you want to make sure your reviews stay up-to-date.
00:33:57 We certainly are in the camp of being focused on Google reviews sometimes and neglecting our Yelp reviews. And it can be hard to get reviews for members. They love you, but hard to get them to sit down and write you a darn view. And so getting enough for Google and Yelp can be a challenge. But again, if you give up the guy down the street,
00:34:16 doesn't give up, he wins. So just keep doing the work. So another piece of this is about the giving up. You have to be patient, you have to test determining how to optimize your spend and the time you spend sort of getting the most relevant traffic on your website will take time. So you need to test, you need to look at the results you need to tweak and repeat for some time,
00:34:40 until you figure out like what seems to be working best in your market and for your space. But it's important because you need a search back to the sales funnel piece. This is what we're focusing on here. You need a certain amount of traffic in the top of your funnel to get to your goal of net income at the bottom of the funnel. So let me talk through that a little bit.
00:34:59 I mean, so basically just to sort of talk through, like, what does the sales funnel look like, right? You have that net income goal at the bottom. So at the top of the funnel, you're trying to get lots and lots of people to go to your website, right? And then the next step is you want them to cruise around,
00:35:15 look at the membership options, decide they want to book a tour and you want them to come into your space to do the tour, and then you want them to sign up again. It's fairly straightforward. They're not a hundred steps in the sales funnel, but there are a lot of areas to lose people here. And that's more of what we're going to talk through in the rest of the episode.
00:35:34 But as you picture that funnel, there's a lot of people who come to website, right? And what percentage of those people book a tour and I don't have sort of industry averages on this is, would be an interesting topic to kind of cover on, see if we could get on our next GWA research project in 2019, but it's a small percentage,
00:35:53 5%, 1%, you know, it's small. So you need a lot, a lot of people coming to your website because only a few of them are going to schedule a tour. You know, like each week, you know, you're getting depends on your market totally, but say, I'm just throwing out numbers, a thousand people to your website.
00:36:09 And you know, you're going to get five tours, right. Or tend to worse. It probably depends on sort of what phase you're in and that kind of thing. But it's a small number. It's a small percentage of people that are going to book tours that come to your website, right? So you need a lot of people to come to your website in order to make the number of people that book tours get bigger,
00:36:27 because you could increase the percentage. And we'll talk about by making your website like super, super easy. And you know, people can find your, the information they need and you have live chat and you have all the things that they need when they come to your website, but still some of them are just poking around. Some of them aren't ready to make a decision.
00:36:43 Some of them aren't ready to tour, you know, lots of reasons, people on your website and then don't actually book a tour. So you, lots of people, you know, relevant people to come to your website. And then just some of them are going to book a tour. And when they book a tour, you need to make sure they show up to that tour.
00:36:57 And then you need to do all the right things when they're on the tour. And then you need to try to close that deal or have a really good follow-up process to get them to sign up. So that's what we're trying to do here. But like I said, it's an upside down cone. So you've got lots of people at the top who are coming to your website.
00:37:15 And then the number gets smaller. As they book tours. You have some people who don't show up for the tour and then you'll have some percentage of people would do the tour, but don't sign up for your space. So your goal is to make those conversion numbers higher, you know, at each point of the sales funnel. So let's talk about some of the other activities and I've just started writing an article that will be a podcast on this one.
00:37:37 So it's just going to be a high level list. Cause again, this is getting long, some other activities that can feed the top of your coworking sales funnel besides SEO and paying Google. And this is sort of top of sales funnel means like getting people interested in your space so that they book a tour hosting and attending events and networking again. And I just want to point this out and sort of the sales funnel conversation.
00:37:59 I've mentioned it before. I hear a lot of people say that's going to be their strategy, right? We'll think about, you know, if you're getting a thousand people to your website in a month and you know, 10 of them book a tour a week, so that's 40 people a month come in for a tour. How many people do you have to meet at events to get that percentage?
00:38:19 You know, you're not going to meet a thousand people at events. You're going to make a connection with five of them. And I'm not saying it's a bad way to spend time, but I want you to think about the numbers we need to get to here. And you can't generally do that attending events. Now, can you attend events and meet influencers who will sort of slowly over time impact sort of the perception and awareness of your space?
00:38:43 Yes. So that can be really important. But when you're thinking about big numbers at the top of your sales funnel, those are coming from Google and active searchers. Those are not coming from you meeting people at events, but again, so Google is going to be the most sort of efficient way to get people to your website and eventually to book a tour.
00:39:00 But here I'm just kind of going through other non-Google ways. One would be hiring a direct sales person to engage in business development activities. For example, networking, to develop those strategic relationships that will drive ongoing referrals or to network with kind of corporations in your, in your region. That might be good leads over time. If you have a big space to fill lead generation partners.
00:39:25 And again, this list and more detail on how to use these folks is on the coworking tech and tools guide, which I cover in a recent episode, also such as cloud VO, DaVinci virtual office, liquid space, office freedom, instant office search office, space.com, et cetera. Those folks are spending lots of money on Google in order to get people into their sales funnel,
00:39:49 which can funnel into business for you. So they it's, it's sort of a different funnel that kind of funnels into yours, but they're doing spending lots of money trying to get leads for people that are looking for virtual mail meeting room or office space. And so make sure you are listed with them. Social media posting, attracting local influencers to your space and having great Google and Yelp reviews to send the signal to active searchers that you have the solution they need.
00:40:17 That's kind of related to the Google piece, but free. So a quick note here, before we move on to converting website visitors to scheduling a tour, I sometimes see posts. So there's an everything co-working Facebook group, where people are asking questions as they start to build their businesses. And in my flight groups, from people that seem a little frantic over filling their space and they are looking,
00:40:38 I feel like they're looking for those for that silver bullet, that marketing one thing that they're not doing that will change everything for them. So there are no sort of get rich quick tricks in filling a coworking space. They're just not. So for a 10,000 to 20,000 square foot space, like I said earlier, it might take you 18 months to ramp up to a stabilized occupancy rate of 90 to 95% plan for this.
00:41:03 So know that it will take time so that you don't get into desperation mode. So make sure you have enough funding in your startup budget to get through those 18 months while you're ramping up and then be brutally consistent with your marketing tactics. So like I said, and if you are a little late to starting these tactics, there's like really no way to catch up.
00:41:22 You need to make sure your product mix is right. And then you need to just start doing all of these things. Like, you know, what's the quote, the best time to start with, you know, last year, but the next best time is today. So just know that you're behind and you should have started before you opened, but you didn't.
00:41:38 And so now, you know, and just start doing all the things now and treat these activities as if your business depends on them, because it does, you won't see results in a big bang, but you will see results slowly over time as your sales funnel gains traction. If you're still with me, thanks for hanging in there. I know that this was a lot longer than my typical episode.
00:42:02 Make sure to tune back in next week for episode number 85, which will be the second episode of a three-part series on the coworking sales funnel in the meantime, have a great week. Thanks for joining us on this episode of everything. Coworking, be sure to click the subscribe button so you can stay up to date on the latest trends and how tos until next time.
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