Lessons, Tips and Tricks for Selling Online Content

Tim Sykes initially blogged about his penny stock trading and then decided to turn it into a membership site and a place where he could sell his educational DVD products as well. His proof to prospective members that he knew penny stocks: he turned $12,000 into $2,000,000.

Listen in as we talk about how he got started, how he promotes his membership site and information products and how he decided what to charge.

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Transcript:

MemberCon.com: Hi. This is Tim Bourquin. Thanks very much for joining me for another interview on membercon.com. We’re going to be talking with Tim Sykes today and he’s got a membership site and an investment site that I’ve been following for quite sometime. He does a great job of promoting that site and getting members. We’re going to talk to him about he got started in doing that and maybe some tips and tricks that’s he has gotten along the way for getting exposure and growing the members. So, Tim, thanks very much for joining me on the show today.

Tim Sykes: Thanks for having me, Tim.

MemberCon.com: Well, so I followed you now for a couple of years, I think. How long have you had your membership site?

Tim Sykes: I started in June of 2008, so just over a year.

MemberCon.com: At some point, were you doing your newsletter for free or was it always the intention to have a membership site?

Tim Sykes: Yeah, now, I started my blog in November of 2007 and I was just posting the results of my stock trade after the fact and it’s all verified by Covestor which actually taps into my brokerage account but people wanted, you know, real time trade alerts. So, I eventually came up with the idea of TIMalerts, which is just real time trade alerts and then that created a whole membership site. So, I basically just listened to what my audience wanted and then created it.

MemberCon.com: You got a great story I think that probably helped boost you into that paid membership site about some money you got and turned it into a whole lot more money. Tell that story, if you could, real quick.

Tim Sykes: Yeah. Basically, my parents gave me control of my bar mitzvah gift money. I was a tennis player in high school and I was injured so I had nothing to do so my parents gave me control of $12,000. I thought that I would lose it all. Instead I turned that $12,000 into about two million dollars by the time I graduated college. I started a hedge fund. I realized I wasn’t that great at running a hedge fund but while I was running it, I was in this TV show called Wall Street Warriors. That was a big hit. It’s now in 14 countries. And thanks to that, I learned that a lot of people haven’t the faintest idea of what stock trading and short selling is about. So, I decided to create a blog and a newsletter and a book and just basically teach what I’ve been doing for the past decade.

MemberCon.com: Yeah, that’s good you got to build this audience actually and you had this kind of built in audience before. You started your membership site which I know helps a lot but could you basically start the membership site at zero and develop it from there or how important was that to have that built in audience first?

Tim Sykes: Yeah, I mean I did have a little bit of an audience thanks to the TV show but a lot of people were skeptical. I mean it was a reality TV show and it wasn’t my greatest minute. So, I basically had to prove myself and I think when you’re starting any membership site in any niche whether it’s the stock market or cooking or plumbing, you know, you have to prove that your content is valuable. And luckily, I had had six months before of just free content. So, I had a lot of people who were making a little money off of my picks but then they wanted something more. They wanted it real time. So, this added to what I was already teaching. So, you just take it to the next level and you have to prove why people should pay you.

MemberCon.com: A lot of membership site owners will say that their most valuable part of their membership site is a forum or some sort of community. Looking at your site, it looks like, yours is a little bit different in that it’s almost a membership to you and that’s the most valuable part. Was that different? Did you ever think about starting a forum or develop the community or was that not important?

Tim Sykes: Yeah, I mean I would love to. The problem is that most people don’t know what they’re talking when it comes to penny stocks and short selling. So, my view was kind of different from everybody else’s. I have this problem before. Back in ‘99, I was a just basic Yahoo free group. This was before I even made my millions. And I was just part of a group and everyone was sharing trading ideas and I realized that my ideas were better than everybody else’s. So, I kind of learned that if you have some kind of edge over everybody else, then you can use that edge and kind of charge for it because you know that it’s worthwhile. So, yeah, I mean again, I’m still looking for partners. But in the penny stock niche, it’s very tough to trust anybody and to find good information.

MemberCon.com: One of the things I’ve seen on your blogs that I followed pretty much from the beginning is you have kind of this outward persona that is sometimes controversial. You’ll call people out when you think they need calling out and some of your post have this kind of edge to you. And yet, I’ve met you, Tim and you’re very calm, very, “even-demeanored” guy. It didn’t seem like the persona matches. Do you kind of use…is it almost like an act in the sense to get publicity initially?

Tim Sykes: Yeah, it’s kind of interesting because you do have to kind of act a little bit but then also, I use my blog as kind of therapy like I just let it all out. This is my personal diary online. I’m not that…you have the same reaction that a lot of people do because in the blog, I really rip into people. I really let it all out. It’s like my alter ego. And people like it and it’s good for me when I’m sitting in front of the computer all day. So, I get to feel excited. My audience seems to like it. So, it’s a win-win. You don’t have to do that. You can be yourself. The key is really just giving good information and most importantly, collecting testimonials. I mean the only way to really promote my product is due to the fact that I have literally hundreds of people making money almost every single day. And every single testimonial, I capture and I save for future use to show, “Look, these people are making money based on what I’m telling them.” So, the alter ego thing is nice entertainment. It’s a nice therapy for myself but it’s not the core of the business.

MemberCon.com: In an investment type or kind of a stock picking site, it seems like it would be very easy to sell the value. “Look it’s 40 bucks a month, 30 bucks a month, or whatever it is but the picks I’m giving out can make you thousands of dollars.” Is that the number one way you market it or are there other ways do you think to draw an audience?

Tim Sykes: That’s it. You just need to create some kind of value proposition and I hate to use that term because it’s so formal but that’s what it comes down to, you know. Very rarely do you find anything in this world full of like just scheming, manipulative people, especially in the finance world, where, you know, you can see everything happening in real time. You can partake in trades if you want to. I’m not trying to recommend anybody to buy or sell any stock. I’m just trying to teach what I would do and how I’d profit. But if you can make that pick, you know. Everyone is so used to spending money. You buy a sofa for like a thousand dollars. Sure it’s a good sofa but you don’t get any money back. This is kind of like a sofa that gives you money and it can teach you over time. It might not be as comfortable as a sofa but you can actually make your money back and that’s very important.

MemberCon.com: What’s been the biggest return on your investment in terms of marketing dollars to get new members, whether it be email or paper click or something else. What’s worked for you?

Tim Sykes: Despite my success, I’m really bad with marketing. I just started emailing a few people but most of it, I just like expressing myself through facebook and Covestor and Covestor, I guess, would have to be my number one thing because Covestor taps into my brokerage account. It verifies all my trades. I’m number one out of 30,000 traders so it gives me…it qualifies me as an “expert”. Really, all I do is just let it out. It’s kind of a nice business model because, again, if you’re an expert in any kind of industry, whether you have five or 10 or 20 years experience, and you just talked about what you know, it’s okay to be wrong, but the fact that you have so much experience means that there’s value in what you say. So, I would have to say the number one thing is just letting it all out, good or bad.

MemberCon.com: Now, what about retention levels? I know in this particular industry, it seems to be the norm is three to four months. If you get people to stay that long, you’re doing pretty well. Have you found something similar for your members?

Tim Sykes: Yeah. I mean it’s tough. Even when I make, like this past Friday, I had two really good stock trades. Both of them made 15% within two days. And I had like 30 members cancel. And I’m like, “How can you cancel? This are really good picks. And a lot of people are making money.” And a lot of them, they have excuses. They have lives. They can’t make the executions. Their brokerage isn’t right. So, it’s very tough. You need to teach people how to use what you’re giving them or else they get confused and they get angry and they want to cancel. So, yeah, retention is tough. Usually, my members have been, you know, Tim, again, there’s so many good trades, so many good penny stocks trade lately. Our average members stay about five months. So, it’s a little bit above average but I’d still want to get them to a year because once you get a year, then you’ve seen a lot of trade setups and you’re actually learning.

MemberCon.com: How about pricing? How did you initially decide on pricing and do you offer a free trial?

Tim Sykes: Yeah, I mean at first, I just started with the whole dollar a day that seems to be a popular selling point. But then I just recently updated. We went from $30 a month to $50 a month and membership, they keep signing up. And it’s just because good information is tough to come by. So, I’m sure $20 a month doesn’t really matter. I could probably raise it to $99 a month if I wanted to. I don’t because I do want to get people falling in love with it. I have other products. I have DVDs that were coming out with seven different subscription plans for the next few months that are going to upsell with all different kinds of new products. The research is so bad out there. You don’t really know your audience. I know there are Internet marketers out there that can calculate everything to a T. That’s not me. Maybe eventually, I will get that efficient. Right now, it’s just kind of my own little thing and I’m still pulling in 60, 70, sometimes $100,000 a month.

MemberCon.com: Well, when it’s working for you like that, you don’t have to worry too much about getting every nickel and dime counted for in terms of what’s working, I guess.

Tim Sykes: Yeah, exactly.

MemberCon.com: You can just give it a try.

Tim Sykes: I want to focus on the big story. The big story is working. Whether I make $700,000 and I just get all the information out there in my kind of sloppy manner versus, you know, $800,000 if I really everything efficient but it would be like double the work. I’m already working quite a bit. I want people to understand that. With a membership site, you really have to respond to every single person, ideally respond on the web site so that you answer a question and that question, you know, every one sees the answers. You don’t have to respond individually to emails. Responding individually to emails could be the single worst mistake of my life. And I did that for many months when I first started because I just wanted to respond to people quickly. Unfortunately, you get the same questions over and over again and it’s just you kind of have to watch out for time management.

MemberCon.com: So, how do you do that? That’s a good point that you bring up because if somebody is not a member, answering their question could be a way to get them in the door and yet, you’re not sure if that’s really converting for you. So, what do you do? You tell me just to comment on a post maybe or something if they want a response?

Tim Sykes: Well, there’s a great software. It’s called Zendesk. I basically pay like 50 bucks or $75 a month and it turns every single email question into a ticket. Then I later use those tickets online and I show them to certain members. And, more importantly, I use a lot of the questions, I mean half the questions. We’ve been using Zendesk for like four months. We’ve had, I think 2000 questions. So, the questions do add up and I’ve been using a lot of the questions in my latest DVDs. So, when people ask these same questions, I say, “Hey, I already answered these five questions in this DVD. Here’s the link to the DVD.” So, I’m actually, again, using my business to create my business and I think that’s a beautiful thing because I can see which questions are the most frequently asked, then I just turn those into products because I know people want to know them and if people want to know them, then they’ll probably buy them.

MemberCon.com: And I like that method because, yeah, you may have somebody once in a while who says, “Well, I didn’t ask you a question to buy a DVD,” yet that’s how you make your living. You’re a businessperson. You’re an entrepreneur. That’s how you make a living. You’re not here to give free advice.

Tim Sykes: That and the fact that a lot of it answers to the questions. Trading in the stock market is not a simple thing. This isn’t like buy low sell high type answers. My DVDs are six hours long. When I answer a question, I’m answering it for at least 10 or 15 minutes. If I was going to answer something for 10 or 15 minutes for every single email I get, I would have no time to do anything else. So, you know, they might not want the long answer but in order to fully grasp concepts, I want them to have the whole answer. And obviously, I do like making money off of my DVDs too.

MemberCon.com: What percentage of your revenue is the one off the sales of DVD products versus monthly membership stuff?

Tim Sykes: Right now, it’s about half and half. But again, right now, this is the fall of 2009. By the spring of 2010, we’ll have several subscription plans just with, again, more subscription plans that aren’t just based on real time trade alerts. Real time trade alerts are easy. You just say, “Okay, buy this stock here, sell it. My goal is to sell it here. Stop losses here.” The new stuff, the new subscription plans are going to be videos. There’s going to be all kinds of seminars. So, talk to me in a few months and the percentage will change. It’s just about giving your audience what they want.

MemberCon.com: I’ve always heard, of course, that existing members are the biggest place to sell worn off products. They’re the most responsive. Have you found that to be true?

Tim Sykes: Yes. Yes. I mean my dad who actually helps me out with everything, he doesn’t even like to reply to people who are not existing members because we see that, you know, the buy through rate is so low. If you’re going to be interested in some kind of product, you know, you really do need to prove that you’re going to be interested for like a $30 or a $50 a month subscription plan ahead of time. Then, once they’re in the door, then you can upsell. This is what all these great infomercials, even though I have problems with informercials because a lot of them, you see the FTC come down on but they get you in the door with these little offers for $29.95 and then they upsell you on a thousand or $5000 package later. And, you know, it’s worked. I just wish that people would come out with honest products.

MemberCon.com: Now, you just brought up a good point again there because you’re saying that as much as we’d like to respond to every email that comes in, your experience has been that if they’re not members already, it’s just not worth because they’re not buying and if we thought that you were converting 50% of those people that weren’t members into members after you answered their question, it might be worth it. But it’s nowhere near that I take it.

Tim Sykes: Correct! A lot of people want free advice. Everybody wants free stuff. I mean I could tell you some stories about how people won for free but I’m not in the business of providing free information. I have a free blog, that’s fine. It’s a nice, you know, you can get a cheese. You can a good nugget of information here. But all the good stuff is premium. So, unless you’re willing to show me that you actually want to learn and you really want to invest time. I’m not like trying to like sneak around and try and steal people’s $500, I’m trying to provide a service and I’m trying to show people who actually want to learn. And they need to prove that they want to learn and the proving that they want to learn is by buying the basic membership.

MemberCon.com: Have you used affiliates at all to grow the business?

Tim Sykes: You know, we’ve used a little affiliates. I need to do better. Thanks for reminding me. I actually have to send an affiliate email out today because I’m doing a seminar and I haven’t really used them that much. From what I found, you can get a few sales here and there. But it’s just tough. Unless you have a full time affiliate manager, I don’t know if you have talked with Brad Stafford of INO.com. He is the most amazing affiliate manager of all time. He bugs me like three times a day and I hate his guts. But I respect him because that’s his job.

MemberCon.com: You know, that’s a great idea. I just was on the phone with Brad last week. I need to do an interview with him about how he gets his affiliates to respond. That’s a great idea.

Tim Sykes: I mean I literally get so many emails from him. If I wasn’t an affiliate, like, again, I signed up to be an affiliate. I proved to him that I wanted to do that. So, I’m now on his mailing list and I’ve made a few thousand dollars off selling INO stuff. So, he’s doing a good job. It’s just a very tough thing to keep track of all your affiliates. I have like 600 affiliates, and I just need to do better. I need Brad.

MemberCon.com: Well, maybe you’ll be able to hire him away at some point.

Tim Sykes: Maybe, I don’t know. I need like Brad to clone himself. That would be cool. Ask him if he can do that.

MemberCon.com: All right. Coming back to the big personality portion of this for just a second. I see some of the comments that come in the blog and some of them can be pretty nasty and some of them you probably delete just because they’re incredibly offensive. But how do you kind of keep that from getting to you and just focus on the big picture of responding to the members who do subscribe and do appreciate what you do?

Tim Sykes: I have a problem where I spend too much time responding to nasty comments. I think that that goes back to me being on a reality show where I basically have like the thickest skin. Nothing really influences me but I love responding. I love like pissing people off. And most importantly, for a business sense, controversy sells. I mean my biggest press hit, I’ve been on every single thing from CNN to CBS, ABC, CNBC, New York Times, whatever. I was on CNN debating God, sex, and greed with a rabbi and a porn star. I didn’t sell one DVD. And yet, when the New York Post ripped on me, totally inaccurate article, horrible things, but ultimately and I sold about 40 DVDs that day. So, controversy sells and it’s a very tough lesson but the proof is in the pudding.

MemberCon.com: You would say, and this is something I’ve heard a lot too, is that as fun as it maybe to be on CNBC or CNN, the huge media that doesn’t have direct links to your web site, in other words, if it’s not Internet based or some way that people can click over, basically it doesn’t work. They may have trillions of listeners and viewers but it just doesn’t convert.

Tim Sykes: Correct. The [New York Post] Page Six article which didn’t have a direct link but it’s the gossip crowd, and the gossip crowd is huge. I did this interview with BlackCardSource.com which is basically like a gossip blog, again gossip for people with black Amex cards. And I don’t have a black Amex card but I know a lot of people who did. So, I told all these stories about people with the black Amex cards and to date, that is my single most successful incoming traffic link. And it’s just a little blog. But when you have something that’s different and, you know, I’m trying to get away from all these people who were just straight out Internet marketing. You may have this specific formula. Here’s the product. Here’s the video testimonial. Just be really, okay? This industry is still so new. Internet marketing, what, 1994? 1996 is when it was created but really haven’t become efficient even now which is a decade in. The real people are going to last. The people who kind of manipulate and try and basically cheat their customers, they’re going to fall by the wayside even if they do have better success in the short run. Just my thinking.

MemberCon.com: Yeah. What about some of those Internet marketing tactics? We’ll finish up with this. I know the big thing right now and I get the emails all day everyday is for product launches. You open the window and after a certain amount of time, you close the window. What do you do to create incentive or urgency to try to get people to sign up?

Tim Sykes: As much as I want to not use any Internet marketing tactics, they work. As you want to try and get away from this specific formulas but it come out a little, you need to call to action. So, like this seminar that I’m holding in a month, I say, “Look, you have one more week to sign up because I need the final head count because I need to book the place,” which is actually true but giving them a one-week deadline instead of a three-week deadline probably tripled or quadrupled my sale. So, if you kind of use marketing tactics, they do work. And I’ve used, what is his name, Brandon Fredrickson. I’ve used him a few times and he used to help me with a few product launches and he sends me some copy and I edited around and those two months that I used him for two specific product launches, we did $100,000 each of those two months. I have never been able to duplicate $100,000 a month without using those tactics. So, you can run a real business but you also do need to use a few tactics here and there.

MemberCon.com: All right. Well, one last question. Your software, just the logistics of setting this up. I think initially you just used plug ins for WordPress. Are you using any other sort of membership software right now?

Tim Sykes: When we unveiled the new site in a few months, it’s going to be PennyStocking.com. It’s going to be aMember based for multiple subscription platforms. I’ve heard a lot of good things about aMember. They’re really great for basically tracking customers like if a customer responds, you know, asks a question, I can see his entire history. I can see what products he subscribed to immediately. That would be very good. So, I can say, “Look, you’re a member of this subscription, but how about you join this other subscription plan and then you can get better acclimated to my strategy.” So we’re going to try out aMember but as of right now, I’m all WordPress and WordPress, I would tell you is a headache. Right now, my site, my web site is down because we have too many plugins on WordPress and one of the plugins went bad somewhere along the line. It’s a midday right after a holiday. So, it’s not that huge of a deal. I have no product launch right now, but it’s still frustrating. So, understand the risks if you do use WordPress.

MemberCon.com: Yeah, we use aMember for our site and I can tell you, it’s a great product. I think you’ll–

Tim Sykes: Cool! Cool!

MemberCon.com: –get a lot out of that. It’s good.

Tim Sykes: I look forward to being less annoyed.

MemberCon.com: All right. Well, listeners or viewers, if you’re watching the video version of the slides, check out Tim’s site, it’s Timothysykes.com, if you want to see membership site done right and how he runs the site. Tim, thanks very much for your time today. I appreciate it.

Tim Sykes: Thanks again for having me. Good luck to everybody listening.

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