Mile  High Maverick

Good show, bad show.

I love the “Disney Culture.”   One of the things they pointed out during the leadership training classes that I took at Disney University was how focused they are on a theater culture.   Much of their terminology focuses around theater terms.  For instance “on-stage” & “off-stage.”   An awareness of when you are in front of the audience (customers or in Disney speak “guests,”) and when you are not visible to customers.

One of the exercises that they gave us was to tour the property and look for examples of “good show” and “bad show.”  They tell one story of a desk clerk at one of the hotels pointing out to “Michael” (then CEO Michael Eisner) his “bad show” by not wearing his Disney name badge during one tour in Orlando.

Anyway, on that note I had the opportunity shortly following Quantum Leap to travel to Tulsa for a couple of days then on to Cleveland.  I had several opportunities to witness the on-going saga of airline industry “bad show.”  I flew to Tulsa on Sunday then Jodi joined me on Monday.  She had several tales of rudeness by the United Airlines employees.  One that I witnesses was that after “gate checking” the stroller for my 11 month old son they proceeded to rip both handles to shreds.  Now, it’s a very expensive stroller and she was understandably upset since they wouldn’t let her take it on board.   When she approached the United Attendants in Tulsa one lady basically told her it was Jodi’s problem, tough luck and turned her back on her.  The next attendant explained somewhat less rudely that there was nothing they would do and frankly it should be expected.  No apologies or even apologies and explanation.

Next, I flew from Tulsa to Cleveland by way of Chicago.  Upon arriving in Chicago our plane sat on the runway for 10-15 minutes waiting for a late flight to leave.  Then my gate checked back was last off, I was last off the plane, and then proceeded to screen to find my connecting flight.  The first screen wasn’t working.  Next I waited for an employee to send me to another terminal.  Finally, I saw a screen working that sent me back to another gate.  After the debacle I approached another American Employee who proceeded to spent 10 minutes blaming me for missing the flight that closed a few minutes after I finally got off my incoming flight.   It was an interesting conversation where the American Airline employee spent several minutes explaining how everyone else made the flight.  Why it was obvious where the gate was.  That the previous flight had arrived on-time (even though it sat on the runway for 10-15 minutes) ete., etc.   Rather than looking for a solution I had to sit through an explanation about why missing the flight was my fault.

Anyway, it’s no wonder the airline industry is in bad shape.   Cheap fares are one thing, but really with that kind of treatment who wants to travel?

Anyway, once in resigned to spending the night in Chicago I end up at the Hyatt Regency and walked over the the “Muvico” Theater next door.   Now, they have an interesting business model that I hadn’t really encountered before (and, I go to lots of movies.)   They had a separate entrance for their “premier section.”  The admission was approximately double.   For that you received a reserved seat.  Bigger more comfortable seats.  A lobby with a full sit down restaurant and bar complete with flat screen TV’s.  The concession stand included a much wider (and, more expensive) selection including a full range of bottled bear, full menu ranging from $10-$20 such as the $11 cheese burger that I bought.

Start to finish it was approximately double what I typically would have spent at the movies.  Combined with a somewhat better seating experience and better food.   For participants in that option they ended up with double or more the normal revenue for a better experience.  Now, don’t miss the point that the actual “product” was the same for everyone.  In this case it was the fairly mediocre movie “12 rounds.”  Whether in the cheap seats (first time I thought of the rest of the theater in those terms.) or the premier section the actual movie was the same.  It was the experience around the movie that changed (seating, reserved seats, improved concessions, options otherwise not available, etc.)  Now, in my case given the option to spend what amounted to $40 for the movie and concessions versus what would have been about $20 I chose to spend double without a second thought.  Clearly I may not be typical but if only 15-20% of their patrons were willing to do that it adds a lot of additional revenue with VERY LITTLE marginal cost for the movie theater.

It’s an important lesson.   Many are like me where they’re willing to spend more for the enhanced experience.  It certainly applies to your martial arts school.

I’ve heard the lament that owners want to treat everyone equally and are unwilling to have “upgrade” programs or enhanced opportunities.  Well, frankly that’s a huge mistake.   Some, perhaps most do not want the more expensive option and will be perfectly happy to take whatever the lowest program is that you offer.  Others will automatically take whatever the highest level it is that you offer.  Many more if given enough value difference will choose the highest price option.

In the case of our Mile High Karate schools when given the choice of Master Club at $259 a month and Leadership at $359 per month, we’re finding 75-90% choose the more expensive option.   A smaller percentage but still significant number of students are willing to spend a lot more than that for the highest level program if given adequate justification.

At a certain point each and every school owner should really ask themselves a few questions:

First.        Am I really serious about running a professional school?
Second.        Am I willing to do the work to accomplish that objective?
Third.        What am I doing to hold myself back from being truly successful?

Unfortunately, we seem to be inundated with school owners who want to just take the “majic pill” and suddenly be successful and wealthy with no other labor or learning.   The question is are you willing to expand your thinking, focus on your potential opportunity, and do the work necessary.

On a lovely weekend in Denver we had a room full of the “top 1%’ers” who traveled to Denver to gain a “slight edge.”   Many don’t understand but a key difference between winners and losers in the believe in the “slight edge.”   You’ve heard it said that one good idea pays for the event and the time and effort to travel to an event.  I heard a member recently way they didn’t agree with that (a member from the U.K..)

Maybe the “one good idea” thought needs a little clarification.  If for example as many school owners did, you received one idea that added an average of 2 new students to your school each month for the next 12 months.  Now, assuming that each student you enroll spends an average of only $3,000 with your school then that one idea is worth 2 X 12 X $3,000 or $72,000.00.   Now if you spent $3,000 traveling to an event, registering for the event, and in staff time attending an event then you received 2,400% Return on Investment.  Now, just imagine if it was two good ideas!   Maybe add 2 additional enrollments per month and increase value from $3,000 to $4,000?  Well, that ends up being $96,000.00 + $120,0000 or $216,000.00 additional per year if you were averaging 10 enrollments a month before attending (added 2 enrollments on average per month and added $1,000 additional value for the 10 enrollments a month that you were already bringing in.)  Now on the $3,000 total expense that’s a 7,200% return on investment (try that in an era where savings, CD’s, T-Bills garner less than 3% annually!)

Never underestimate the value of the “small edge” or of one good idea.

One participant from the last Extreme Success Academy (who traveled with 5 people all the way from Holland) explained to me that one idea I gave them at that event added $500,000 to their revenue in the six months since the event!   Now, if it cost them $10,000 to attend that event then it’s still 10,000% annual return on their investment.   A single GOOD idea can indeed be worth many multiples of your investment.  Frankly if you just learned enough at a live event to add 5 or 6 new students a year or improve income per student by 5-10% then it’s well worth the cost and time.

By the way.  If you missed the Quantum Leap you made a HUGE mistake.  Here’s just a sampling of feedback from the event.  Make sure you are registered now for the upcoming Extreme Success Academy in September 2009 – San Antonio, Texas.

Master Oliver and Toby,

I wanted to take the chance to Thank you for putting on one awesome event this past weekend. We actually just got home a few hours ago from after one fantastic weekend. First with Quantum Leap and then the Peak Performer meeting. The information that we obtained from these events is absolutely priceless.

You both really know how to inspire Martial Artists and Entrepreneurs. The guests that you had present all had such valuable information. There was enough value in each of the speakers to totally pay back for the price of the admission and more!

I am totally ecstatic about being involved with NAPMA and knowing both of you. You have really inspired me to take my school to the next level and shown me the tools necessary to do so. Something that not even one year ago I didn’t have that kind of chance. I would have been stuck in the same spot now as I was then if I hadn’t accepted a friends advice and joined NAPMA.

Thank-you once again for being the visionaries that this industry so badly needs! I look forward to working with both of you over many years to come.

Jeff Burroughs
Hamilton, Ont
Canada
———–
I went to the Quantum Leap this weekend because I am struggling to stay in business. I came home with enough information to create a quick  infusion of students. I believe I received a more than fair return for my expense. Probably x 100.

Presenters gave excellent presentations. All of them went the extra mile to share marketing ideas to help everyone weather the current  economic stress. I was impressed with their sincerity to help every one’s business to thrive.

Everyone stressed the two key words: Imple Mentation!

I believe Stephen Oliver, Toby Milroy, and the rest of the NAPMA staff
were sincerely trying to help everyone to go home with something that
would create profit quickly and establish a sustainable business.

Thanks guys!
Ed Guerena

Oh, and my favorite.  Excuse the language it is coming from Peyton Quinn:

Your man Toby is something, high energy, but never “pushy” at all, a born marketer with superior and yet fluid and authentic communication skills. In my old software company hiring the right people and not hiring the ‘wrong people’ was a very, very key element in the firm’s success. Personnel are all a service-oriented company really comes down to in terms of its ultimate performance,

Your Organization is definitely not a piece of shit
I think you may have gathered that I am pretty frank in my professional communications.

If I think something is a piece of shit, or exploitive then I generally will say so. I am thus sure it will ‘delight you to no end’  that I have concluded that your stewardship of NAPMA is most definitely not a pile of shit.

The speakers were quite substantive. To chose just one example, I wish I had known everything that was so very well presented about ‘real estate investment’ last Saturday, ….it is just that I really wish I had those informational tools 25 years ago!

Just as I am not really in the ‘martial arts industry’ with RMCAT, I see that you are not truly in that industry either. In the simplest sense, I would say you were in the industry specific, marketing specialist business.

Many school owners have asked me about what my feeling is on ‘this or that industry organization’ that is trying to get them to pay “x” amount of dollars to join their ‘program’.

I tell them that it is my feeling that IF the program is “style name specific” based, like for example: BJJ, KRAV MAGA, or even the Divine School of the Monkey Fist of Steel etc, THEN these people are very likely and primarily intending to profiteer off of the school owner alone using the transitory celebrity of their “style’s name recognition”.

There is thus no substance or support or value to what these “style of current celebrity” people are selling for the school owner. Even20the sellers of these systems (though they may fool themselves through vanity and narcissism at times) know that the celebrity of their “style” will die out soon just as all the others did in the past.

They thus do not make any effort to set up any real or meaningful long-term support for their members. It is a ‘ take the money up front and run deal’ for them. Perhaps with some side cash made in getting, or even demanding, that their members later pay for additional “advanced” qualifying training classes in their “unique and proprietary system”.

You sir, I can see are not one of these creatures. You’re a ‘good huckster’ in one sense, but to me that term really just comes down to being another, perhaps ‘less dignified word’ for being an experienced and effective marketer. Most importantly though, what you are selling with your Mile High Karate franchises I am coming to believe is unique in this industry and that is has true and very significant value.

If a school owner is in the right demographic area and he or she has the personality and drive that I feel is demanded to engage the things they must do in order to really actualize your system of marketing (and especially if they have already hit the plateau at say 250 students or so) then they would very likely (I am begging to feel) benefit greatly by joining Mile High Karate. In perhaps three or four months they might even recover their entire franchise fee.

Peyton Quinn.