Paul Klein:This week, I've got a great interview for you again. I’ve Got my friend Dr. Michael Hudson. He's a great guy. I'm so honored that he's going to be on the show. We had a great conversation about a lot of things.
He's a wealth of knowledge, has a great platform, very experienced. He's a speaker, coach, consultant for the last 35 years. He's a former college professor with the University of Illinois, and like me, he was a entrepreneur stuck in a bureaucracy. I identify with his story so much because he was like myself. I was trapped in a bureaucracy, and that entrepreneurial itch made itself known, and we just went for it and left the safety net, and went out on our own. Michael did that. He's worked as a high-end consultant specifically in the credit union space.
Now he helps professionals become entrepreneurs, speakers, and getting their message heard. That's his platform. The name of his podcast, it's on a hiatus right now, but it's called the Get Your Message podcast with Dr. Michael Hudson. He also does a weekly Facebook video that you can tune into that's real valuable, as well as he has some pretty good resources on his page, the Value Calculation, the High-End Consultant's Toolbox. A lot of freebies. Michael gives a lot of things away, and we talk about his value calculation methodology. He has a ton of resources. The High-End Consultant's Toolbox and several other resources on his web page.
Michael how are you doing today?
Michael:Outstanding, man, outstanding. Wonderful day here in Delaware.
Paul:Yeah, we're on opposite sides of the Earth. Man, it's so great to be able to connect. You're over near Delaware, and I'm over in California. Man, we get to have a conversation today and talk to our audience. Life's good, isn't it? Tell us about your web page, and what you're up to, and your background.
Michael Hudson: Sure. Thank you, Paul. As we all know, these are tough questions to answer because there's so much. I'm not an old man, but I'm not a young man, either. You got six decades here. As you know, I describe myself as a recovering college professor, which pretty much just means bureaucracies and I are not a good mix. Despite the fact I had the privilege of having a great ride for a decade there, and building nationally recognized programs at two universities, my entrepreneurial genes got triggered when I was seven years old and I started from my first business. Just kicked into high gear when I started approaching my 30s and said, "I got to get back to that world." I've been a speaker, coaching, consultant for 35 years, Paul, literally. 14 days from today is the 35 anniversary of the founding of my business.
Micheal Cont'd: I did it part-time. I literally signed my first consulting contract the day I signed my first employment contract at the University of Illinois. I did that for ten years as a side hustle before we knew the word side hustle. Then I left that world and went full-time coaching, speaking, consulting. I fell into a niche. I know we're going to probably talk about that a little bit because I know niching is one of the subjects that you like to make sure your audience thinks about. Accidentally fell into a niche and built a business doing work that I enjoyed, that I was good at, and ran that for 15 or 16 years, and then one day had an awakening.
I'm not really as aligned with my passion as I want to be. The other piece of the back story that's going to sound odd for someone listening who doesn't know anything about me is I was petrified to speak in public as a child. Now, you would never guess that.
Paul: That's because this is a pretty great speaker.
Michael Hudson: Thank you, thank you. It's because of some pretty bad stuff that happened to me. This is a lot to drop on an audience in a quick thing, but it's an important point. My fundamental belief in life is this. Every one of us, Paul Klein, Michael Hudson, our friend, Mike Kim, everybody else we know, we all travel a journey. That journey brings good and bad stuff into our life. All that stuff shapes us and equips us with a message that only we can share. There are people on this planet, I believe, who are here to hear that message from us.
Michael: I had this awakening... I'll tell you the quick story, okay? I was hired to facilitate a workshop after a keynote speech. Keynoter, he did his keynote, and then I took a third of the audience, and two other coaches took a third of the audience, and we said, "Okay, what do you do with what you just learned?" Paul, he started his speech by giving each of us a sheet of paper with a dot in the middle of a circle. He said, "I want you to draw a pie chart of how much good work, bad work, and great work you're doing." He said, "The definition of bad work is abbreviated WOMBAT."
"It is a waste of money, bandwidth, and time. Good work is your job description. You're good at it. If you don't do it, it doesn't get done. Great work is the work that you're really here to do. I want you to draw a pie chart, and be honest with yourself about how much good work, bad work, and great work you're doing." I'm sitting at a table, Paul, with six CEOs who are going to be in a room with me, and about 100 other people after this. I had to be honest. I draw the pie chart, and I label 65% of my work bad work, 5% great work, and the rest good. I am gobsmacked by the fact that that's how I see, but that's how.
On the plane on the way home, I make a list of the clients who are good work, bad work, and great work clients. I look for commonalities. I then decide, Paul, after being gone for four days to inform my wife on Monday morning that I'm firing 65% of our clients. She looks and me and says... I said, "By the way, I'm going to double the business next year and sell it, because I realized I'm not doing what I'm here to do." "How is that going to work?" I said, "I don't know. It'll work because the universe does." Fortunately it did. The reason I wanted to double the business is because I wanted to be able to sell it.
I sold the business, and that was a niche business in the credit union space. Nothing wrong with the space. It was more where I was positioned, because what I realized, Paul, was that because I couldn't communicate as a child, what I cared most about was making sure people could communicate. The bad work clients were clients who weren't communicating, and the great work clients were clients who were allowing me and enabling me to open the doors to enhance communication, both individual people as well as teams.
Paul Klein: Right.
Michael Hudson: I decided to refocus my work there, which is where the whole Get Your Message Heard objective came from, and this fundamental belief I finally recognized. Today my work is focused on that, and specifically working with speakers, coaches, and consultants, helping them unlock their message so they can attract the right clients, repel the wrong ones, and do the great work that they're here to do.
Paul Klein: Yeah, no, that's awesome. That's all post-academia. You were with the University of Illinois for many years. When you made that transition from the bureaucracy, I think you and I were both what I call an entrepreneur stuck in a bureaucracy. When you made that transition, that was all pre... We're very similar in age, pre-Internet. I think it was '90s, right?
Michael:When I left Cornell, because I was in Illinois for five and a half years. I was at Cornell for four and a half. When I left Cornell, the Internet was just awakening. I was at the point where I was eligible for a sabbatical, so I took that year. I spent that year playing on the Internet back in the days where it was chat rooms on AOL. If you wanted to send a document, you sent it via AOL or faxed it. Yes, I had the fax machine, I had the big phone lying on the seat.
Paul Klein: Yeah. Good old days. I'm interested in your perspective on that. You're older than me, but you are very well adapted. For those of you who don't know, Michael, he's got Facebook, he does videos. Comparing to how it is now and how you run your business compared to how it was in the early '90s when we had dialup and all that, would you say it's easier now or harder now?
Michael Hudson: I think the answer to that is almost always going to be is both. But it does open the door for you to make it easier, I think. I'll give you a quick example, Paul. About six weeks ago, I got this little bug that said, "I need to talk to my audience a little bit, because I'm not sure that I'm understanding exactly what they want." Think about how much work this would have taken 20 years ago.
Paul Klein: Yeah, we'd have been part of NASA haha.
Michael Hudson: I go on Facebook, and I say, "I'd like to have a ten-minute conversation with you and ask you two questions. If you're interested, send me a direct message, and I'll follow up." 35 people respond. I reach out. I use a scheduling tool online that I send them to where they can go book the appointment, and I had these phone conversations. I use Zoom. Actually, I didn't use Zoom. I just phoned all these because I didn't want the face-to-face. Sometimes people try too hard to say it the right way, and I just wanted them to say it. I walked away from those phone calls realizing that people were expressing three areas of frustration.
So I said, "You know what? Why don't I offer a pilot coaching program to address those three areas of frustration?" Again, in the world we live in, what did I do? Okay, so I made a list. Who were the 15 people I'd like to have in the program? I sent them direct messages, either on Facebook or LinkedIn, basically said, "Hey, I'm launching a 90-day coaching program. If you're interested, let me know. I'd love to have you in it." I had 15... No, I had 12 conversations, and I got 10 people.
Paul Klein: That's awesome.
Michael Hudson:Yes, we could have done that in the old days, but what would that have taken? Multiple phone calls that we'd have had to align our schedules just to talk, whereas now I just post it, and they get the message whenever they want. I just think that makes it so easy. What gets in our way is the perfection trap. I decided I'm not doing some marketing campaign on this. Did I talk to everybody I saw? Yes. The other thing I did is I did a handful of Facebook Lives where I hit on some theme that was tied to what I learned in those conversations.
Michael Continues: Paul, I've got to tell you this quick story about this, because this is... Have you ever doubted whether social media works?
Paul Klein: Yeah, all the time.
Michael Hudson: I am driving to have dinner actually with our friend, Mike Kim. Not that I'm trying to mention Mike all day today, but it's just ironic. I'm driving to DC to have dinner with Mike. That morning I had awakened and is said, "You know what? I'm done wasting time on Facebook. I have never had somebody pay me from Facebook ever." This was about three weeks ago when I'm just kicking off this coaching program. I happen to stop to get a cup of ice tea at Dunkin' Donuts, and I get a Facebook Messenger message from somebody I haven't talked to in five or six years.
I had put out a thing last call for my coaching program or something like, "I'm coaching a new coaching program if you're interested." He sent me a direct message, "Hey, he haven't talked in a while, but I'm really curious about your coaching program." Since I was on the road doing windshield time, I send him a quick message back. I said, "Give me a call in the next 10 or 15 minutes. I'm on the road for the next hour and a half. Happy to talk. Let's catch up." He calls. Before I get to DC, I booked my first client through Facebook who was actually a paying client.
I'm like, "Okay, that decision this morning was a little premature."
Michael continues: Then it ended up that out of the ten that I got, seven of them actually, it was all done through Facebook. The others were LinkedIn. It really shifted my perspective to realize we can use this, and it's all about intention.
Paul: Yes. What you're talking about, and what we're able to do now, what I call this is the great knowledge economy. You were able to do your product development, marketing, and onboarding all in one, basically almost in the same motion. It was all because of video conversations and social media. Whereas back in the '90s, we would have had to print ads. We'd had to print up flyers and mailers and things like that.
Michael Hudson: You had to hire a designer to create all that stuff.
Paul: Yeah, and it would have been a no... You're able to do your product development all around your coaching and your knowledge or your expertise that you have to serve these people, and you got ten people that you're going to serve, and serve well, and share your experience. Then they're going to be better off and be able to go do the same and similar things, which is just a wonderful, wonderful way to look at it. I think a lot of people get stuck in brick and mortar, "Oh, product development. We have to," overcomplicate it, like you said. We overcomplicate it.
Michael: One of my big mantras that kicked in at the end of the first quarter is try, test, rinse, and repeat. I could say try, test, learn, rinse, and repeat. I want you to learn, right?
Michael: You replicate the process again. I'm going to do a very similar, a PLF model of a set of webinars for free, and the back end is going to be a course that fulfills the promise that we discussed in our webinars. I'm not going to go through all the machinations of all the stuff, and put a team in place, and all that. I'm just going to do it, and I'm doing these things as pilots so I can learn and then say, "Okay, how do I now take that to the next level?" I already know what's next in this coaching program based on what I've learned just in the first couple weeks.
Continues: One of the things I realized is there's a missing piece here, so I'm going to create a course on that and do that as a pilot. I think the hurdle there ties to your podcast, because the hurdle is pricing. We think, "Where do we price it? Oh, my gosh, if I do pilots, I'm not going to make any money." Every dollar that comes in the door matters. If you're running a small business, every dollar that comes in the door matters. I said, "I'm pricing this ridiculously cheap, and I'm going to acknowledge that." Look, I've priced this where I think you can't possibility say no.
Paul: Tons of value.
Michael: Somebody says to me, "How can you do that?" I said, "Because I want to way over-deliver the value to you. I want to learn with you and from you while we do this. I want you to know this is a pilot program." Paul, what I'm testing in this program is basically unlimited access to me. You can text me, email me, or request a conversation for a quick question, and so forth any time you want during the time we're working together. Then we schedule a call, and it's paid access to the ridiculous price. I shared that with some of our colleagues and they go, "Why would you do that? That's ridiculous. You should charge more than that."
Because I don't want to fight with people to get them in. Pick the people that I knew I could help, and that I knew would give me honest feedback. I think we can all serve ourselves well if we will get gutsy enough to do that.
Paul: I think you can also perfect your product, too. Another product may come out of that. Another offering, engagement, or group coaching. Who knows what'll develop from the feedback you get from the group?
Michael tell the people in the program, but there will be a mastermind group offering at the end of it. It all will because crystal clear because of the obvious overlap between these people, and where they are, and what they need.
Paul: Yeah, absolutely. Creating that product ladder and that value ladder for people to onboard on a lower tier product, and then as they engage with you more... Just like Apple, we started buying the iPod, then the iPhone, then the iPad, then the MacBook. Now if you want a $17,000 iWatch and you're independently wealthy, you can go buy one of those.
Michael:Paul, I just want you to know, I do listen to the stuff you teach. I'm not-
Paul: Yeah, I'm honored.
Michael: I may be a slow learner and adopter, but I do listen.
Paul:That's awesome. That's awesome.
Michael :Paul, I want to hit this as a point, though. This is important. You may make this point. I'm not saying I listen to every word and memorized it, but a decision that drove this for me was one thing. I woke up and I realized, stop swinging for the fences. I have always swung for the fences. Some of us, you may have done this in your career, too. We get big home runs sometimes where we're in the corporate bureaucratic world, and now that's our standard for when we're really succeeding and excelling. Now we go into this space, and we start saying, "I got to swing for the fences. I want 50 people."
This all started when I made a decision. I'm going to do a live event. I want 50 people in the room. To be very, perhaps more honest than I should, and I want to generate $250,000 gross revenue from the event.
Michael: I think I can do that, but I realized, you know what? That's a swing for the fences. I put all the time, effort, and energy in that. What if I'm wrong? What if I miss the mark? I go back and start studying some of my heroes and some of the people I follow. I realize, look, a lot of them have been a lot smarter than this, and they've done it on a small scale, or they've tried it, they've tested it, and they've worked up to that. Why are you always swinging for the fences? Then perfectionism getting in the way, and you never actually exit.
I threw all that to the wind and said, "Let's just do this. Let's build a simple value letter based on get you in, what's next? What's next? What's next?" Because that's what I did in the niche space in the corporate world. Why not do it in the one-on-one world?
Paul:Yeah, yeah. We're not always going to hit a home run. As Mike says, our friend, success is sequential, not instantaneous. Tony didn't just become Tony, not that we want to be Tony, but he's a well-known successful speaker and motivator. You look way back. I remember seeing his late night TV when the commercials were over. You used to see him on TV just grinding before he was what he is today. That's great, Michael. I really appreciate that perspective. I want to move on to transition to some other things I wanted to ask you about.
One was we always talk about pricing on the podcast. I know you have experience both on academia, making the transition to the corporate world, the credit union world, all that great stuff. Great consulting, high-end consulting. When it comes to pricing, how do you find the sweet spot? You don't want to charge too much, but you don't want to charge too little and undervalue yourself. How did you make that transition into charging the full value for what you're worth, but also not charging too much? How did you make that call when you first started out in your consultancy?
Michael:It's the hardest call to make, because the first person you got to convince you're worth it is you. At some point, you start listening enough and learning from what you're hearing from others, and realizing that, look, value is about the impact on an organization that you create. What I started to finally realize was, look, these... Let's go back to the 65% of the bad work clients. Most of them were clients that were smaller. They didn't have the perspective of value that I needed for the quality of what I could do and what I could create for them.
They didn't have a team that could actually execute. That was a big part of that problem for me. I was also wanting to help and serve, so I was accepting whatever they were offering. I was in a niche. The credit union niche that I fell in... Remember, credit unions are not-for-profit organizations. They're not non-profits, but they're not for-profit. They're rather conservative. They're also financial people, so they're even more conservative. I stepped in, and this is way they pay. There was the going rate for what you got paid to do, and I started strategic planning.
I spoke at a bunch of conventions and started getting hired to do a lot of strategic planning. There was a mindset, and you've experienced this, Paul. There are certain industries that have a level set in their mind, this is what this costs. The first thing I did was I started asking, "What's your budget?" If the budget was below what the going rate was, that gave me a hint, this is not a client for me.
Paul:Yeah, you could detect it right away, huh?
Michael:Then I learned, and I picked this up over the years. I picked it up in conversation. I learned to start probing with more questions. You know I think my mantra is ask, listen, learn, and serve. I shifted the burden away from me trying to define the price to getting them to help define what it would be worth to them to have a better strategic plan, and to learn and understand what the problems were they were encountering, and to then in my mind say,
"Okay, based on the size that they are of an organization and the annual revenue they are generating... "
Even a not-for-profit has to make a profit or they stop existing. In the profit they're making a year, how much of a difference does my work create in that number? Start to contextualize that. You start saying, "You know what? That number that everybody else pays is at least 25% or 50% or 75% in some cases, in some cases 500% too low for what their impact is going to be." Very quickly what emerges, and I know you've experienced this, too, is you start finding that the larger organizations are familiar with paying more because they realize the value is bigger.
The amount that's on the line, the risk is higher. The secret sauce for me, Paul, was more in... I'll use your term, which I'm probably tweaking it slightly, but building a value ladder in terms of what I was delivering. To put that very simply, and strategic planning session that I was running involved prework, it involved the session itself, and it involved postwork. Obviously, I was originally not laying that out for the client. It would just happen. Then one day I had this epiphany. "Why don't you show them all the work that they're getting that they don't know they're getting?"
Paul Klein:Yeah, yeah. Take credit for it.
Michael Hudson:Yeah, and I think you've seen my value calculation and proposal template stuff.
Paul Klein: Yeah.
Michael Hudson: I create this one-page table. One of the blessed things about academia was I had to spend too much time creating journal articles and things like that, so I got masterful at things like tables, so I built this table. Table had column one was, what's the activity? Column two was when is it going to happen? Because I found that if I put dates in a proposal of when I wanted it to happen, it could happen on my schedule a lot more than if I just said, "We'll schedule that." Column three said, "Who's involved?" Column four, "What's the objective?"
There was a row right under the header that said, "Pre-planning session." The steps that fit in there were there. Then there was a row that said, "Planning session." There was a couple rows there. Then there was the row that said, "Post-planning session." I had the real epiphany that changed everything. If I get myself back on site with them in the post-planning session phase, I am there when they're making the decision of who they're going to hire next year.
I went from going where I would go into two-day or a three-day planning session at some off-site location to doing a pre-planning workshop and a action planning workshop after the planning session, which revealed more to them. Tripled the value of the contracts, greatly enhanced the value of the process, because most strategic planning sessions where you go do it, and you go home, and it works all on them, and gave me a resale opportunity because if they were happy at that point, I could say, "By the way, I don't know what you're thinking next year, but if you got your date, I'd love to put on hold if you'd like to work with me again."
That was the first sequence. Second sequence, a real quick one. Then I decided when I'd start the conversation to say the following. After we had the initial summit, because most of my business was from referral. Someone would call and say, "Let me tell you how my process works. I work with you to set you out on a five-year strategic plan. That's not saying you have to bring me in every one of those five years, but I'm going to set the foundation for you so then your next three to four years will be easier because you'll have a frame of reference there." Paul, that turned into everybody hired you for five years.
Paul Klein:Yeah, yeah. Always better than acquisition.
Michael Hudson:It's a lot cheaper and a lot easier.
Paul Klein:That was a good framework there. I could see how that worked well.
Michael Hudson: I can say this feeling pretty confident. There's no way anybody involved with this would know, but the other thing that changed it one day was a client who made a comment to me about what someone else was charging. I did something I had never done before. They called me. They had been referred to me. We had a couple conversations, and there was a little uncertainty. I said, "How about if I fly out and we spend a day together and map this out, and see what fits for you?" That's my view, has always been to customize the work to the client.
Paul Klein: Yeah.
Michael Hudson: I flew out. We never discussed who's paying for it, because I was paying for it. We finished it. We got it all mapped out. They're now invested. We're in the process. It cost me air fare and a couple nights on the road. I come back and she says, "By the way, there's one thing we didn't talk about. What's this going to cost me?" At that point, you're done. The contract is ready, and they're bought in because they own it, because you just spent a lot of time helping them map it. I said, "Where is your budget?" She made a statement. "As long as it's not over this, which is what so and so wants, the job is yours."
Paul: Yeah, yeah.
Michael:I don't mean that manipulatively, but the reality is that number that so and so wanted was about seven times what I had been charging.
Paul:Had a few more zeroes on it, huh?
Michael :Yeah. I said, "Okay, wait a minute. I'm charging you guys too little," and that completely reset my pricing structure. My point is build a relationship to get the comfort and the freedom. Make an investment that you may need to make to go do some work to earn the right for them to be candid and honest with you. That can go a long way.
Paul Klein:Yeah, absolutely. Yeah, for those listeners out there that want to get into C suit coaching or workshops for corporate world, those kind of things, you got to connect with Michael because he's got great templates out there that he was just talking about that you can download that are just great for that whole realm. If you binge on his podcast, you'll get a lot of that information. Anybody who's wanting to enter that world, you've got to connect with Michael. That brings me to the... You mentioned it briefly, but I wanted to share it with our audience in a little more detail if you could, Michael.
Maybe we can put this in the show notes, but is that value calculation. You have that PDF that shows how to price or how to determine value of your service for a corporate client or so forth so you can maximize your value for them. Tell us a little bit about that value calculation methodology that you have.
Michael Hudson: Well it's so simple it's almost stupid. I don't mean that in a harsh way. The easiest way to get people to talk about value to get them to think about something anybody understands, no matter who they are or where they are in their organization. One thing everybody understands in any organization is time. You're not going to find five our of 100 people who will tell you they're not running short on time. What people forget about is how much the small moments count up and aggregate across the course of a year. Where I start the conversation is a very simple place. Let's say we're having a conversation about doing a culture intervention.
What's our objective. If I want to show them the value, I need to understand what the pain is costing them. This is an actual example without names and words. I have a client, contacts me because their CEO sees me speak on culture at an event. She tells her HR director, "You need to bring this guy in to help us with our problem." I come in. The first question is, "Tell me what's going on. Blah, blah, blah, blah, blah." It was a matter where they had merged a new organization in. The alignment didn't fit. The organization had a crappy culture.
They had a very strong culture. The people were... Everybody is confused. I said, "What's happening as a result of that?" "Well, we're losing people." "Wow, that's got to be a pain." Ultimately I get her to the point of saying, "What's that cost you when you lose a person? How long does it take to replace that person? How many hours are involved?" She gives me a number. I say, "What else is involved?" I'm taking notes, calculating. We come up, and we're like, "Okay, you're taking 20 or 25 or 30 hours just to replace anybody that you're losing because the culture fit is not right."
"What's the average salary of these people you're recruiting?" We very quickly got a cost, right?
Michael:What are the people who are doing the recruiting, what are you paying them? Every 30 hours they're losing is costing you this much, and you're losing how many people every quarter? You suddenly create... It's not inflation. It's accurate.
Paul:No, you just created what we call a metric for your cost savings or revenue increases. In this case, it's cost savings, and as a metric to that, that's the staff time, cost. That's a dollar amount. Now your fee should be based on that cost savings. That's where you're going, right?
Michael Hudson: Yeah. You teach that. You take something simpler. Let's take a communication issue where there's miscommunication occurring. A lot of times that's the root of most problems in a corporate organization. Say, "Okay, how many times a day do you encounter this problem?" "Maybe six." "Okay. How many other people in your department encounter that probably every day?" "Three others." "How many times do they encounter it?" "They probably get it more than I do, because the six I get come through them." "What's a number?" "Each of them probably has 15 of these a day."
"Okay. How long does it take them to handle?" "10, 12 minutes. Maybe 15." I said, "Okay. When they handle it, is anybody else involved?" You see where I'm going here.
Michael Hudson: Now we end up, we say, "Okay, let's just think about the ten minutes." You reveal this, Paul. This little statement I'm about to make can make your audience a lot of money.
Paul Klein: Okay, hold on. Let me get my pen.
Michael Hudson:You know what statement. The statement is just, "Do you realize how much time you lose a year if you lose ten minutes a day to a problem?"
Paul Klein: I'm not very good at math.
Michael Hudson:Most people will look at you just like you just looked at the sky, right?
Michael Hudson: You say, "Let's just work it out." You work it out in front of them. This feels salesy, but trust me, it doesn't come off that way, because you're teaching them.
Paul Klein:Yeah. You'll be having a conversation.
Michael Hudson: Yeah. You're saying, "Okay, you work 50 weeks a year, right? Yeah, okay, that's 250 days a year, times ten minutes a day. That problem happens one time, ten minutes a day it eats up. You've lost 2,500 minutes. Divide that by 60. That's over 40 hours. That ten minute a day problem is costing you a full week every year."
Paul Klein: Yeah.
Michael Hudson: "Is it possible some days you had that problem three or four times?" "Oh, God, I have it five times a day, every day." "Okay, so now what do we got? Now we got five weeks of the year. How many people in the organizations have this problem?" "All of our 20 senior leaders have it." "Okay, so we got 20 people now losing five weeks a year. That's 100 weeks a year. What's the average salary and benefits package for these people?"
Paul: Yeah, your average billable rate or whatever. Yeah.
Michael:Now we do the math and you got this massive value and say, "If we could only get each person to stop having, cut out two of the five times a day they experience it, look what it's worth to you."
Michael Hudson:Then you look at your fee and your pricing based on... Let's look at it relative to that magnitude. When somebody pushes back on price, they wither. That's the other point. If you forget to do this, and somebody pushes back on price, you say, "Wait a minute, let's talk about what this is worth to your organization. What's this problem costing?" Time is such an easy way, because nobody can argue with it, because they all know it.
Paul Klein: Yeah. Yeah, that's when you want to point out charging by time is to your advantage, because that's a clear way how most clients equate things. Obviously I'm a proponent of the billable hour or anything, as you know. You aren't, either. In your client's mind when you're trying to establish that baseline or that value that you're going to save them by solving the problem, absolutely. It's not very hard to demonstrate that, like you said. If you don't demonstrate that, and then you get into a price... Not debate, but conversation, it's harder to make your case for those higher rates. You've got to position yourself by making that case to your client.
Michael Hudson: Paul, there's a foundation here. You can't lead with price and do this. In the sense that you don't put the price on the table until you have to. My whole table thing that's in my proposals, is my proposal template, as I call it. I often will take that after the intake conversation, and lay that out as to what it looks like, and share it with them without any other details because that frames the conversation. We haven't even talked about price. Now I can have the value build conversation with them about, "This is what this will do, this is what this will do, this is how this will benefit you." In that process, what's going to happen is they're going to open doors and show you the way.
You'll hear them say, "My problem is I'm sick and tired of having people on the team who don't get it." "What's causing that?" Now you can go further, and you can start saying, "How much time is that costing?" If you bring it back to that, ironically they don't think about you in terms of time anymore, because now you're a problem-solving partner.
Paul Klein: Right.
Michael Hudson:The other secret in this, and you know this, I know, is you use we more than you use I.
Michael Hudson:How much is this problem costing us?
Paul Klein: Now you're vesting yourself in with them as part of
Paul Klein:Part of the team.
Michael Hudson:Pricing is positioning, is your whole point. Positioning you as a member of their team as opposed to some outside dude with the solution changes the picture.
Paul Klein:Yeah, yeah. Man, those are excellent points. We're definitely going to have to include the value calculation PDF that you have for people so they can get that. It's another way or form of value-based pricing, although Ron Baker, Alan Weiss, they do it on a whole different magnitude. I think you've broken it down in a much more simpler and practical way for more of the common person. The guy that's a freelancer, what I call a seven or six figure small, not a $100 million consultant like Alan Weiss, but a practical consultant can take...
Those are the people I was put here to serve, so that's what I try to message to them.
Michael Hudson: Yeah. Same here. Same here.
Paul Klein:I'm not teaching $100 million, $500 million folks how do stuff, but a seven or six figure small, I'm right there with you. Moving on here, that's great. We'll put the PDF in the links and all that good stuff. Really appreciate you sharing that with my folks. The next thing is you do have a podcast. I enjoyed it. I know you put in on hiatus, and you're doing some videos. Tell us a little bit about your content plans. Are you going to be bringing the podcast back, or are you going to primarily focus on video? Tell us a little bit about that.
Michael Hudson: You asked the million-dollar question. Gosh, I wish I really knew the answer.
Paul Klein:That's okay.
Michael Hudson:I kind of do. Yes, I'm going to bring the podcast back, because the trust is I miss it. I started the podcast, and one of the major goals I had was really be clear on the message. Part of that was me doing some work personally, and working through some things that I had to figure out how they fit into things. It was also because I was trying to, and I appreciate your kind words about it earlier. I was trying to provide a basic foundation for people who are trying to get started to get past that challenge of figuring out, "Okay, what am I here to do?"
Then I shifted to the interview format, and had some great interviews. Then I reached a moment where I said, "I need to step back a little bit and think about how this play is moving forward." That was candidly, Paul, my decision to go all in on serving speakers, coaches, and consultants, and the final evolution of moving out of that niche business I had built serving the credit unions. When I sold it at the end of 2015, I carried over five clients who were in various stages of that five-year process. I had a four-year runway that wound down in terms of the revenue from that.
Like we're all probably willing to do is I kept dabbling and looking for other stuff over there because that was easy. I made this pivot because I wanted to really help people who were trying to get started. Any of the people I really work best with and that have evolved is the client. This is part of why I put the podcast on hiatus. I hadn't been addressing this issue of transition. What I'm finding is that the clients I'm working, like if you look at the people in this coaching program, almost every one of them is in some kind of a transition.
One of them has just lost their job because of a downsizing in the organization they're in. One of them has just retired from a successful career, and has a passion that they want to take to the world that they learned in that career, and they're trying to figure out how they do that. One of them is someone who has actually encountered some health issues, and those health issues led them to need to get out of their corporate job, but they have a passion message they want to share. I always found myself working with these people in transition.
I wanted to reshape the podcast. . I can't tell you exactly when it'll be rebooted, but I'm looking for the guests who are people who have rebooted or have transitioned. You've transitioned from corporate as I transition from the academic world. I'm looking for people who have had that kind of a challenge, because what I've discovered is that if I work with just the startup person who's never done anything before, I'm the wrong guy.
You and I both know the student has to be ready before the teacher can help. If you have not run something, you can't catch most of what I can help you do.
Paul Klein: Yeah, you got to go through some of that pain first before I could help you.
Michael Hudson: Yeah. You got to have mastered, "How do I get past this tough decision?" If you're still make those tough decisions for the first time, there are people who are far better capable to do that with you than me. If you're at that point where you know what the message is, at least you have a sense of why the message matters and what it should be. You know that you're ready to move on. That's where I can help you, so I've pivoted my work to there. That's where the podcast has gone in my mind, and so the reboot is going to be taking it down that path with less of the teaching stuff I did early on in Get Your Message Heard.
There's 104 episodes of Get Your Message Heard, and there's really good stuff in it.
Michael Hudson:I've had people say to me, "Hey, it's a perfect course on how to start a speaking, coaching, and consulting business." I've had people say, "The interviews really helped me frame where my speaking and consulting and coaching should go." I highly encourage people to go listen to it. They're still out there, and they're not going anywhere, but that's going to be a reboot. The video side of the question you asked, Paul, I like video. I think we don't use video enough. I think we overcomplicate video. I think we make ourselves think it has to be perfect, and it doesn't.
That doesn't mean it should be crappy, but it doesn't have to be perfect. I also think we need... This is my take. I can't give you scientific data to back this up, but we need to recognize there's an astounding number of people who watch your videos with the sound off, and I know you know this because I watch what you do where you used that tool, the closed captions get put on. Clip-O-Matic. Clip-O-Matic puts the captions on there for you. Captions are important, not only from a marketing perspective, but also people who are deaf and disabled. They can enjoy your content, as well.
We might not think about it, but a lot of times we're watching video with the sound off because of where we are.
Paul Klein: We're somewhere where we're not supposed to be watching the phone.
Michael Hudson:My goal is five-minute videos, a weekly blog gets a five-minute video, and several other videos, as I feel some Facebook Live stuff. I'm starting to do a lot more on YouTube, and starting to get some real traction on YouTube in terms of, there's a three-part series I have that we can share with the audience on attract the right clients, repel the wrong ones. I've run those three videos on LinkedIn and gotten some good conversation around them, and also picked up a lot of new requests and connections, and started some conversation.
I think LinkedIn for guys like us, men and women like us is a path we should be certainly paying attention to in using video. One of the guys I follow is a guy named Brian Fanzo, and Brian is a social media guy. He's talked a lot about how good a results he had had with these little two-minute videos he does. I'm going to keep mine in the two to five-minute range. When he uses a tool you're familiar with that I use called Splasheo, because I like it, because it's easy. I just record it. I ship it to them. They put the captions on. They send it back, and then I do what I want with it.
I like easy. I think video is a path we should use. I think instead of the traditional lead magnet where we write a document, PDF or whatever... How many PDFs, Paul, do you have on your hard drive that you have never even opened?
Michael Hudson:I'm using video for that hoping it gets more opens, hoping people see it more. I think it's more likely to get reshared. I don't have data for that, but I have people who are saying that, so I'm going to-
Paul Klein: It seems to be the trend, absolutely. Even combining video with your PDF, that's what I've done. If you download the Product Pricing Roadmap, you'll get a link to a video where I explain it. It's about 15 minutes long. It helps establish that relationship.
Michael Hudson: I love that. There's a guy named Bobby Clink, I think, and he's a lawyer. He has all kinds of forms. If you buy one of his forms, you get video showing you how to use a form.
Paul Klein:How to use a form, yeah. It's excellent.
Michael Hudson:There's a power in that. It's a marriage. It's not a either, or.
Paul Klein:Exactly. Exactly. No, you're so right. We're definitely looking forward to the podcast coming back, and I think transitioning professionals, or that whole transition thing is so important. We preach the same things, the same crowd, and so I'll definitely be looking forward and tuning into that. Also, your videos on Facebook and YouTube, I'll definitely put links into all that kind of stuff. Let's tell our listeners about the free video series. You just mentioned it briefly, but is that the best way to connect with you, Mike, is your video series?
Michael Hudson: I'd certainly love for you to grab it if you want. It's your standard thing. I think we're beyond the phase where we pretend this isn't how this work. I give you a link, you give me your email address, I send you the videos. If you don't want to hear any more from me, you get off the list. I get that. If you go to MichaelHudson.com/attract, A-T-T-R-A-C-T, there's a three-part video series there. It talks about the three things you need to do so the right clients raise their hands to work with you and the wrong clients walk away. Paul, that last part is the important part.
Stop chasing everybody. Pardon, I'm being very directive, but stop chasing everybody. Everybody is not hear for you. The story I shared earlier about what happened to me earlier in my life is not for everybody to hear. I get that. You don't care that I was petrified to speak in public is because somebody raped and molested me for a year. I get that. If that story resonates with you, then we have one step up the ladder, so yes, you and I should know more about each other.
Paul Klein:Right, right.
Michael Hudson:Understanding the language they use, the problem that they have, and the path you can give them that only you can give them in the way you can give, your framework, your intellectual property, what you have learned is worth out lives. If you're a speaker, coach, or consultant, and you're trying to take your work to the next level and get off the random revenue roller coaster, the number one most important thing is messaging. Too many of us don't give that enough... The problem is we get in our own heads, and we think we know it better than they do. Paul Klein describes his pain in a certain way. Michael Hudson describes his pain in a certain way. Every other person on the planet describes theirs in a certain way. What we have to do is say, "Let me talk to enough of them to understand what the commonalities are, and shape my messaging so they know that I understand them." Not in a manipulative way, but in a way that is candid, honest, and real, and genuine.
Paul Klein:Yeah, absolutely. What you're talking about is what we talk about a lot on the Pricing is Positioning podcast, and that's niching down, or niching down to your expertise so you attract the right customers and not the wrong ones. If you serve everybody, you serve no one. You can't. You've got to serve the ones that are right for you. People get all upset when people unsubscribe from a mailing list. I see people every now and then, I get a notification or something. It's like, "Great, I'm not for them. Maybe they'll come back later." It's not a bad thing. It's a good thing.
Michael Hudson:Yeah. I look at it that the series of messages you'll get with the three videos will let you know whether you think we're in tune. If we are, we'll have a chance to engage with. The days when we should be thinking about how many hundreds of thousands or tens of thousands of people on our list doesn't matter, because what matters is what kind of business you're trying to build. I'm trying to build a business that for all intents and purposes is not a business. It's a practice. I want it to protect my lifestyle. That's why I left that bureaucratic world.
I put a pin in a map at the beginning of this year, Paul. I went out 350 miles, and I drew a circle. In my world, what that does is that gets me just outside of Charlotte, North Carolina, it gets me to Pittsburgh, and it gets me to Boston. That's a pretty massive amount of business in the United States. You got DC, Baltimore, Philadelphia. You got a massive audience there. Why 350 miles? Because I can drive it in six to seven hours, because I'd rather drive to things right now. I love it because when I do it, I have lots of conversations with people while I'm driving and learn more.
I talk to my prospective customers, so I learn their language, I listen to their problems, and I learn what they need, which helps me then serve them better. I can't do that on an airplane.
Paul Klein:No, no, can't do that. It's all about building the business around your life, not your life around your business. We talked about the six, seven figure small. I think my last episode I just recorded, I share the banker and the fisher parable. You heard that before? Yeah, where the banker is in Mexico and he's like, "Oh, I go out on a siesta every night." You need to build a business. At the end of the story he's all, "So you could retire," and do what he's exactly doing now, and that is spending time with his family and stuff. So true.
Michael Hudson: That's where I am. I got four grandkids at this point in life. I didn't have kids. I married my wife when her children were adults. Part of my objective in life is to have time to spend with my grandkids.
Paul Klein: Absolutely.
Michael Hudson: Part of my objective in life is to have... Tomorrow night I have a CEO of a client that I've worked with for years who is in our area for vacation. I'm going to spoke a brisket, and he and his wife and two daughters are coming over for dinner.
Paul Klein: That's awesome.
Michael Hudson: I want the ability to have those days to do that. It's not that that's the only kind of people I'm working with, but the truth is if that's what you want, if you want to build more of a practice... Is this a business? Yes, but it's going to die with you, and that's okay.
Paul Klein:Right. We're not here to build the next Tesla conglomerate.
Michael Hudson:Yeah. God bless Jeff Bezos and Elon Musk, but I don't want to be him.
Paul Klein: Yep, not for everybody. We all know our lanes and where we want to be, and that's okay. Well, Michael, I got to say thank you so much. It's an honor to have you on my show. Feel like I've gone full circle, because I've known you for a few years now. So glad you're able to join me and share your knowledge and expertise, and being on the Pricing is Positioning podcast this week.
Michael Hudson: It was my privilege, Paul. Thank you so much, and I hope that what we shared with the audience helped them. I'll invite anyone. If you got a question, you can email me, firstname.lastname@example.org, and I'll be happy to... I will respond, and more than happy to hear and respond if I can help your audience in any way.
Paul Klein: Absolutely. We'll have all that in the show notes. Please connect with Michael, and check him out, and his podcast and videos. Until next time, we will have another great conversation on the Pricing is Positioning podcast. Remember, pricing is positioning. Thank you and have a great rest of your week.
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