Working with local clients and creating appetizing revenue, Episode 125

Episode Transcript

Carrie: Howdy everybody. Welcome back to officehours.fm. Today I have James Kockelbergh hailing from the tiny island of Menorca Spain. James? How are you today?

James: I’m very well, thank you. Yourself?

Carrie: I’m good. Thank you for coming on the show. We were just chatting that Menorca is so small that it doesn’t even appear on a world map?

James: laughing. I might be exaggerating there but the island is about 50 km by 20 km wide. So just saying in proportion to the states, it is very small.

Carrie: On my goodness! I think there are some universities that probably outsize your island in population.

James: Oh yes.

Carrie: We’re going to talk about some of the challenges of working in that environment. Before we do, would you introduce yourself to listeners of the show? Tell them who you are and what it is you do in Menorca.

James: As you said my name is James Kockelbergh. I was born in England. I still hold British nationality. Since I was 8, I’ve been living in Spain. I come from a traditional graphic design marketing background. Because I’m rolling on (let’s just say the older end of the technological age industry) we’ll leave it to that. I graduated to traditional HTML, CSS then got into PHP. I discovered WordPress and I can’t wait to get even better.

Carrie: That’s fantastic! Are you working alone or do you have a team of folks?

James: I work mainly alone but I do collaborate with a lot of other freelancers. Some are actually local to the islands and some are based all over the world. It is one of the beauties of working with the Internet. You can access talent globally and find some really great people all over the place. Speaking several languages as I do, because of partly growing up in Spain, I have access to (if we take Chinese out of the equation) I speak the two largest languages in the world, which are English and Spanish.

Carrie: So you touch on a really interesting point that I know a lot of folks who listen to the show have struggled with and that is finding quality contractors or people to partner with in services. So how are you finding folks?

James: Well. I’ll be honest with you. It took a long time to find very good reliable people. My nemesis still tends to be when I collaborate with programmers and traditional coders as such…when you’re coding you do need to be in a completely different mindset…they’re the ones I have struggled with the most over the years. It could be all sorts of things…language barriers, to understanding what the client needs and what they interpreted as their needs. After many years (I’ve been in business for a long time) finally the filtering process gets a lot easier as you require more experience. It’s frustrating at the beginning but it does get a lot easier down the road. I hope that helps a lot of people. Don’t give up on the trying to find the right people for a team to collaborate with. You’ve got to try. One thing that is probably a common rule is investing in talent. Cheap is expensive in the short, medium and long term. It’s always better to go out for a full fleet of qualified and experienced professionals in what area of expertise you’re looking for.

Carrie: I love that! Cheap is expensive in the long term. I can identify with that. I think a lot of other folks can too.

James: You have to make up for the mistakes that they make in the future.

Carrie: Exactly.

James: Sometimes there’s some horrible surprises that suddenly wipe a website off the face of the earth…things like this. It seems like a good idea when you’re starting up but believe me it’s not a good idea.

Carrie: Part of the difficulty is communicating. We as people offering web services believe in our value and the prices we charge. Sometimes it’s hard to convince clients (I’m not sure convince is the right word) for them to realize that cheap is not always as great as it sounds. You get what you pay for essentially. I don’t know if you had the experience of clients coming to you after they’ve already blown their budget with some other agency that did a terrible job and now they need you to fix it on a shoestring.

James: Yes. It has happened. It tends to happen more when you start off because you have less experience. You do tend to attract more clients looking to do more with less in a budget perspective. As you go on…you realize that the mere fact of raising prices…you do attract the kind of client who is more appreciative of the work that you’re actually doing for them and the added advice that you are giving them. One thing that has always helped me is being as transparent as possible with the client even if they expect you to do miracles with virtually nothing. Being transparent with them, being sincere and actually saying to them that they are really being unrealistic even though they have blown their budget helps more than what people think. Sometimes it is even better just to say, “Look for that kind of investment, I simply can’t help you.” A good no sometimes is a big saver. Eventually they do realize that. Maybe in the future they do actually come back to you for future work. All the same problem with a different complete mindset and spending power behind it. So it’s always worth it to be very upfront and transparent with your clients needs, problems and possible solutions and the cost of them. It works. I found for me that it has been a good thing to do. You grow slower but you grow in a very effective way in the long term.

Carrie: Absolutely. It’s kind of like paying it forward because you know the next person they go to after you’ve educated a bit, they’ll know a little bit more about what to expect pricewise. Maybe you know you’ll get clients that someone else’s educated upstream.

James: Yes. It has happened. It’s a good thing. Most of my clients have come to me referred through other clients. They’re already educating their partners in business, or contacts in business in the way that I go around problems and solving problems for them. So I am educating them over time in the technological line of business, it’s also my existing clients educating their contacts when they do actually come to me with a problem or idea that they want to implement online. It swings in roundabouts. The more you give back the more you get back generally.

Carrie: Well let’s talk about some of the unique challenges that you have working in a community as small as Menorca. Even if it’s a long way geographically from some of the folks listening to the show, I think I’ve heard some things that you echo. I want to talk about that in a moment. It is the difficulty of convincing clients of the need to be online or what it means for their business. Let’s talk a little bit about what your experience has been there.

James: Well I’ll give you a little bit of a general background of what Menorca actually is. Although it’s in a small place in the middle of the Mediterranean, it might relate to a lot of your listeners who live in very small towns where a lot of people basically know everybody and you can’t seem to do anything without everybody finding out things. Although the perspective of doing business on a general basis from the states to Europe and Spain is different, small communities are always small communities. I have found from traveling around and visiting different places what you generally find is that they’re very service orientated meaning that they probably depend off of…there might be a big industry in the area or there might not be. If this industry happens to be tourism, like my case is, you have two factors. You have seasonality because the summer season is during the summer. Everybody goes and concentrates on their business issue in the summer.  During the winter they generally switch off. They might come back to work a month before and then its all rush, rush, rush. So there’s a lot of education on behalf of ourselves (the business) in saying “look, this can’t be done in a month. We need to work constantly.” Some things can’t be done in the summer period when you are working intensely. You have to prepare for the lower end of the season and the non-season so you could build on top of what we’ve been doing gradually. The other big problem is because it’s such a small population, there’s not the mass targeted business to target. So you do have to be “Jack of Many Trades”. You have to build websites, you have to help with their online marketing, you might have to do some PPC for them, you might have to introduce them to good practices on their Facebook pages and how to use one of the different social media tools. You need to look at a lot of technological solutions so they can become more productive in their actual businesses themselves so they can free up time and dedicate time to maybe blogging on their website or thinking about other new things like inbound marketing techniques, email mailing and all kinds of things like that. It is a big scenario to sort of take into account when you’re looking at really small communities. You need to position yourself as an authority in your area. You need to really offer good added value in the one on one meetings or small coaching sessions that you might have with your clients. That helps you bring them over to your “playing area” as we could say. Then they count or your support and then they’re more open to putting into practice newer ideas (which in our local market might sound extremely new and geeky). There are standard things that are in the rest of the ordinary world. They’re just day-to-day things that you have to do.

Carrie: In terms of working locally, what percentage roughly of your client base is local versus elsewhere?

James: Well you might say that 80% of my client base is local. That is split 50-50 between English speaking owners with a residence on the island that have businesses and the other 50% are Spanish business owners. Most of my clients are businesses. I do very little for other freelancers in other areas. The other sort of 20% is spread over other Spanish clients on mainland Spain (which is a different kind of mentality towards doing business). Then I have several clients in the UK. I have a client in Switzerland, one in France and one in Italy. We all communicate through English in all of those areas.

Carrie: What I’m hearing is your brain works harder on any given day than mine does toggling language.

James: Well the curious thing is when you become fluent in a language and people say to you what were you thinking? To be honest with you, I can’t really answer that question. Something silly I do (I probably speak Spanish 90% of the day) but I still count in English. It’s an ironic sort of thing. There are other little things. When you’re speaking with other fluent people with several languages, especially with my brother and sister, we’ll just switch from one language to another. We don’t really think anything of it, but people will look at you and think what are they on about? I don’t think at this stage it sort of like inherits any more brain activity. Maybe a neurologist would be happy to discuss that. I don’t know.

Carrie: Well I’ll still give you credit as a solo language speaker. When you hung out your shingle and started offering these services, did you intend to primarily target a local audience or was that just something that sort of happened over time with like you say the small community? Everybody knows each other and you’re getting referrals. Did it just happen or did you intend that?

James: No. It really just happened. I started out in this thinking well we have a connection to the Internet, we can do business all over the world. But you start getting referrals from local businesses that are coming through with the other client that you’ve done and it just builds up very quickly. It wasn’t intentional. I would prefer to have a more balanced 50-50 scenario for all sorts of reasons. I mean if there is an economical crisis locally, then you have other areas of interests where other countries or clients living abroad in other places of the world still have the economical potential to invest in carrying on developing their online projects. From a business point of view, it makes sense to have as many eggs in as many different baskets as possible from an income point of view. But it just happened. I could intentionally go on a year spin acquiring more international clients to balance out the equation, but I’m comfortable with the way things turned out. I am happy. There’s still tons and tons of growth in the market because we’re still educating a lot of the business on really basic stuff. As we were talking earlier, there are a lot of businesses that are really just starting off on their first corporate website, which is basically Hello! We do this and this is how you can get in contact with us. Email marketing comes after that and all sorts of things come after that. There is a lot of standard stuff that still needs to be done. I really enjoy working with a lot of people based in other countries so we can do all the exciting new stuff which we all like.

Carrie: All right. We’re back. If you’re just tuning in your catching up late, I’m chatting with James Kockelbergh based out of Spain. James? We’ve been talking about what it’s like to work in your local community. I’d like to sort of shift to (we’re recording this right at the end of 2016). I’d like to talk about what’s on the horizon for you in 2017? Earlier this year, you shared with me some of your goals and your strategies for getting there. I don’t know. I love this time of year for reflection and goal setting for the upcoming season. Can you share (you don’t have to share specific income)…share whatever you’re comfortable sharing. How did you plan what you wanted to grow to? What were some of your goal settings to get there?

James: Well, it’s an interesting question actually. You probably remember from your earlier days in a business. When you start off, you tend to work in the business rather than for the business. I know that’s quite an abstract concept but I’ll try to put some sense to that in the following sentences and so on. You start rallying along and you concentrate on getting income. You grow this income to a certain area (lets say €30,000, €40,000, €50,000 a year). I’m not sure what that relates to in dollars. I think in dollars it will be slightly more (maybe $40,000, $50,000, $60,000) whatever. You come to this point where you tend to hit this constant plateau where you think why can’t I break this $30,000 bridge, this $40,000, $50,000…whatever number you want to put on it. Eventually you do come to this sort of like…you’ll see several years if you look over the balance of the your general average income…and you’ll see this pattern of plateau. It’s not exactly a straight flat line. It will oscillate $5000 or $10,000 up and down over time. You can see this general, promulgated long flat line. You think I’m stuck. Especially during a lot of the last year and this year, I’ve been thinking well ok. I have one pair of hands. What can we do to grow this plateau and really exponentially grow it in a manner that’s efficient and doesn’t imply constant really labor-intensive areas where you have to constantly code something or have to constantly design? With client work as you know, you’re limited to the number of hours that you have. You either employ or carry-on growing your base of collaborators but there is only so far you can go. With local small markets like I’m in, there’s only so far you can grow by putting your prices up and trying to attract different kinds of clientele without out pricing yourself completely from the market. There is not massive business on the island. There are big businesses, but there are not massive businesses with massive budgets. Oops. Can you hear me?

Carrie: Yes. I’m still here.

James: I think my screen went to sleep. Sorry. Several of the strategies that I’ve developed over a period of time is I developed my own products and what have you. I’ve got them to a level of audience where I can monetize them now and it makes sense. There is a plan put in place so I can start generating some advertising revenue through those streams. So that should (with the basic concept of a small amount work, not that you have to do little work) because the foundation work has already been done. You can build on top of that and exponentially grow your monthly revenue stream quite a lot with not a massive amount of effort. A lot of it is sales calls, administration and some design work. Once you are off and you can bundle these things in a value package for all for your existing and new client, that’s a strategy to grow income, hopefully in quite an increased way. So there are two or three different lines of products there. The idea behind it is settling long-term advertising contracts rather than trying to play around with a monthly sponsor. Then you need to find 12. I prefer to give somebody 10 months for 12 months (or something like that). There’s a strategy to that. Then I’m looking at packaging several services that I already offer and offer specific consulting to a very small percentage of the existing client base that I have. They have come to a point now where they understand that they need to understand the broader technological picture of what the Internet can really do for their business. You can say this is teaching or coaching and it’s a mix of a lot of the knowledge that I’ve acquired over the years. That has to be valued at a premium price. I’m negotiating maybe a 6 month, 9 month or 12 month retainer with several of these clients. That’s also an interesting way to provide added value. Sometimes you can’t keep growing your business on just building websites. It comes to a point where (especially if you also manage the hosting for them) which is what I generally do because they don’t understand it. You can only grow so far on building a website because as you know if there becomes a common hacking sort of thing that gets exploited and you have 50, 60 or 70 clients, or whatever in your server infrastructure then you’ve got a big problem. It may take you days or even weeks to clear it up. That time has to be spent doing other things. You can’t just keep going building stuff just for the sake of building it. You need repeat business or constant business from your existing client base. That’s what I’m looking at now; is packaging all these different things up and remarketing these to the existing client base before trying to sell them completely to new clients that I have no relationship with. They probably don’t even know how I work or what I can do for them. Part of the strategy is that. The other part of the equation is spending more time looking at processes and becoming more efficient. I’m building things in an automatic way so I’m not constantly repeating and doing them as a manual process. That’s just good productivity. It has implications like time blocking, time management and governing the day through self-decision rather than having constant interruptions from clients…the so-called “emergencies”.

Carrie: I love that you call it appetizing revenue. That’s exactly what it is and the things that you have mentioned…I think they make so much sense. So many people want to do just that. They want to figure out ways to generate recurring revenue without necessarily having to continually trade dollars for hours.

James: That’s a terrible idea; trade dollars for hours (or euros for hours). You’ve already capped your income if you’re doing that. You start doing that when you start off. You soon realize that you have to package things up in value rather than spend time scaling. I don’t think time is scalable anymore. I don’t think it ever has been.

Carrie: You can’t exactly grow it in a garden huh?

James: No. We would be working 48 hours a day.

Carrie: Do you have any tips for someone who is currently billing hourly? How to transition that conversation into talking about value and what you’re delivering versus here is a dollar here’s an hour?

James: One very easy way to do it (you have to take that with a pinch of salt…there goes a good old English phrase for you) look at what you’re already doing for clients. Look at the average expenditure or income they’re providing you over (at least) a 6-month minimum of time. It’s better to look over more data if you’ve got it. Look at the services and try to make a bundle out of them. You cannot argue that for a lot of clients it is more cost-effective to be on a constant monthly retainer than carry on doing all the changes and stuff and what they need to do to their different product services, websites, whatever on an hourly basis. One of the secrets behind this is, as the company, individual, professional or freelancer is providing the services you gain better cash flow, which is the secret to any business survival. You build a better relationship with your client because you actually provide them with better value. For doing that you can also structure your work load a hell of a lot better. I know a lot of people listening might be frightened to do that because they’ll think they won’t want to work with me. If you don’t ask the question, you already got a no for an answer. Some will and some won’t. For the ones that say yes, you’ve probably made a client for many years to come. Then you can grow on that and adjust your prices accordingly as time goes along of the services and the value that you provide them. As time goes along, you become a better professional. You can give them better advice. They will appreciate that, especially if you’re growing their online business for them.

Carrie: James? That is some excellent wisdom. I appreciate you sharing that. We are at the top of our interview, so I am going to let you get back to business. Before you do, could you please let us know where folks can find you online and say hello?

James: Well actually the best place to find me is by shooting me an email, which is where I handle everything. I dabble on Twitter now and again…most of that will be in Spanish probably. You can find me on twitter @Jameskockelberg (without the ending h because I was one character short). It’s very frustrating. Or you can send me an email James@3Webd.com. If anybody has any questions, I’ll be happy to try and point them in the right direction.

Carrie: Perfect! I will include links to those over on today’s episode @officehours.fm. For those of you tuning in, if you would like to discuss this episode, join the free slack community. You can do that at officehours.fm/community and we’ll carry on over there. James? Thank you so much for your time. I hope you have a fantastic evening.