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Tim Schmidt Interview – Make Big Money Online With Membership Websites

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Tim Schmidt Interview

You know, one of my goals here at IncomeDiary.com is to bring you unusual and interesting guests and interviews – individuals that you may not hear of anywhere else.

Today’s guest – Tim Schmidt is one such guest. Indeed I was tempted to call this interview – My Most Shocking Interview ever — shocking because of the Niche Tim is involved in and Most Shocking because of the number of members Tim had in his association and the member retention that Tim has with his association. In short Tim and his company make a lot of money!

Funny enough, I have just been on Tim’s personal blog and he says: “He is a guy who you’re going to either like a LOT or dislike a LOT – and he for one, hopes you like him” πŸ˜‰

Seriously, Tim is one of the nicest guys I have every met – a very generous and inspiring Entrepreneur – No matter if you agree with Tim and his association (and some of you – especially outside the USA) will not, please listen / read what Tim has got to say. There is so much here, we can all take away and apply to our businesses.

Our interview with Tim Schmidt is one of my favorites!

[audio:http://www.incomediary.com/rec_turbo.tim.schmidt_12_Jun_2009_16_06_02.mp3]

Transcript of The Tim Schmidt Interview

Michael Dunlop: Hello, everyone! This is Michael Dunlop from Income Diary, and today I have a great guest called Tim Schmidt. I first met him a few years ago back when my dad invited me to come as his guest to the an Internet Mastermind meeting with Yanik Silver. I was really interested in what he’s saying. He’s always kept me watching when he does his presentation, and so I’ve invited him here today to share some of his information. Welcome Tim.

Tim Schmidt: Thank you, Michael. It’s great to be here. I’m excited to talk to you today.

Michael: Brilliant. All right, I’ll jump right in there and mention what you’re doing. You’ve got a web site called United States Concealed Carrier Association, which you describe as the ultimate resource for the armed citizen. Can you please explain how you got into this niche?

Tim: Oh my gosh, we’ll be here all day if I have to tell you the whole story. Really, for me the niche came about after I started having kids and I just felt this need to be able to protect them. At the time I owned this engineering business, Michael, and it was a decent business, way to make a living. But I was working myself to death, and you know in America it’s very common for citizens to be armed. We’re talking the good guys of course!

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Barry Dunlop , Stacy Kellams, Tim Schmidt at Underground 5

I saw this huge gaping hole in the market, that nobody was addressing the needs of people that wanted to be armed citizens. So I thought, “Hey man, this is my calling!”

Michael: Brilliant. And how did you take your calling to online marketing and start making money from it?

Tim: Well, I’d like to tell that I just studied for three days and learned everything, and then just did it and was an instant millionaire. But of course the real story was nothing like that. It was brutal. Everyone hears stories about, “Oh, I did everything wrong.” Well, I truly did everything wrong, Michael.

I started this association not as an association, but as a print magazine. And let me tell you, the fastest way to become a millionaire is to start publishing a print magazine with two million dollars. You’ll burn through that first million really fast.

So I started the magazine by itself, and not only did that business not make any money, but it literally almost destroyed my engineering business because it was sucking all the cash out of it.

Not until I actually transformed the magazine into an association and an online business, that’s when it actually started to take off.

Michael: OK. You keep mentioning your association. For my readers, that’s a membership website then?

Tim: Well, it’s actually a membership website on steroids. It’s a membership website, but people don’t just become members. Yeah, they become members, but not just of the website, they become members in something that they believe in. And so they’re associating themselves with the other people that belong as well. Not just, “hey I’m going to join this membership site to get information.” “I’m going to join this membership site to belong, and because I believe in what these people believe in.

Michael: Brilliant. One of the biggest problems with membership websites is keeping members month after month. Has making it an association helped to keep members all the time? And is there anything else you do to keep your members subscribed?

Tim: Oh, yeah, Michael. You just hit the biggest… I mean, that truly is the biggest problem with membership sites. And that’s because most membership site owners are doing it completely wrong, in the sense that they’re… I’m not going to say they’re tricking people, but they’re really giving their members no reason to stick around. I think your typical membership site has a continuity stick rate of less than seven or eight months. I’m sure there’s some membership site owners are thinking, “Oh my gosh, if my people stuck around for seven or eight months I’d be ecstatic!” Whereas with my association, my average stick rate is over two years.

Michael: Wow!

Tim: It’s actually 26 months. And the reason that is, is because it’s just what I said before. My people feel like they’re a part of something. It’s something they believe in, and it’s not that they just feel it. They truly do, they belong to a group of likeminded individuals who share a common passion. And there’s lots of things that I do, on purpose, to kind of fan the flames and to fuel that fire, and it actually works brilliantly.

Michael: Brilliant. How would you recommend people to – membership website owners – to get their members involved and want to do exactly that?

Tim: Well, the first thing you’ve got to do right is you have to do a good job in your topic selection. One of the things I put together, like I mentioned before and I’ll just warn your listeners or your viewers, Michael, is I actually used to be an engineer. Once you’re an engineer you’re pretty much always an engineer. So I love making flowcharts and spreadsheets and mind maps. It just kind of makes my inner voices quiet down. But one of the things I did when I was tasked with teaching some people how to do this, I created this topic selection flowchart. This thing is truly foolproof. Actually, I give that away in a free e-book that I give out, and I’m sure you’ll have links to your members can download that.

Making that topic selection is key. But once you get that — let’s say that you’ve gone through that flowchart, you’ve got a solid topic — there’s seven key components that you can inject into your business to cause that belief feeling, that belief factor, to really get elevated.

I could go through all seven of those, it would take quite a while but…

Michael: Just give us your favorite, your top one.

Tim: OK, my favorite is… It’s funny when you said the favorite because I truly do have a favorite.

Michael: I thought it was going to be a hard one.

Tim: Oh no no! My favorite aspect, of what I call my tribal formula, is to isolate and identify the enemy of your group or your members. OK? Now here’s why that’s important. Because psychologically the human being, it’s much easier to rally around and coalesce around something that people have in common that they dislike than that they like. Does that make sense?

Tim: Oh my gosh, it’s no mystery why that’s my favorite, because everybody loves to gather around something they don’t like. So identifying that enemy really helps to congeal that effort. And probably the other big one, I’m going to give you a little bonus here, is, I would say… probably the other most important one, this is probably the least favorite because it’s the most work. But any good tribal association needs to have a leader. And invariably the leader is going to be essentially the entrepreneur, the business owner, you or I, whoever founded this tribe or this association.

To many people that’s a daunting task, and there are many, many people who try to do something like this but they shy away from that leadership role. So therefore the association, it never really happens. And it’s because of that one simple reason that the owner was not willing to stick their neck out and actually lead. It’s not nearly as difficult as you think it really needs to be.

Michael: That’s top advice. I couldn’t agree more. I’m sure my listeners are thinking, “Wow, I’ve got to start my own association, because I’m sure I could take my business through the roof!” Could you give us some examples of how people can add an association to their web site, or what type of associations are possible?

Tim: Sure, yeah. There’s really two different ways to do this. The one way is where you take your business and the business itself, you just rename it and it becomes an association. And the other way to do it is if you already have a business that you’ve invested heavily in the branding or the name of your business. A good friend of mine, Carrie Wilkerson, is a perfect example of this. She came to me and said, “Hey, Tim. I want to start an association.”

And her business was called the Barefoot Executive, which is a fantastic marketing position, and she had a lot of time and energy, not to mention money, invested in this brand, and we were not going to call it the Barefoot Executive Association; that doesn’t make any sense.

So instead, we made a completely separate entity called the Association of Work-At-Home Women that just so happens the Barefoot Executive owns this association.

So there are two separate things, whereas with my business, my magazine just went from being Concealed Carry magazine to I just named it the United States Concealed Carry Association.

timschmidt3

Tim Schmidt and Barry Dunlop at Dan Kennedy’s Super Conference

It is really just as simple as that, just figuring out what sounds good, and I am a big fan of modeling other people’s success. So just look around to find an association or an organization or a group that is similar to your market and just model it after that. That usually works quite well.

Michael: Brilliant. All right – thanks for that. The next thing I want to ask you made me laugh a lot, when you were presenting at Yanik’s Mastermind. Quite often, I am not very good at keeping track of what is going on or listening to what everyone is doing, but you were showing us how you market and make more sales through a few techniques you do, and the one I am talking about is your broken toe sale. I would just for you to explain to my readers how you monetized having a broken toe.

Tim: Well, it pretty much came down to I broke my toe in a sparring match in Tae-Kwan-Do, and I was feeling bad for myself because it really hurt.

Tim: It wasn’t like my little pinkie toe. It was my big toe, and I literally broke it right in half. So I decided just to have a sale. I got the x-rays from the doctor and I took a picture. Anyone who breaks their big toe, your foot swells up to twice its size and it turns all black and blue. And I just used that story, that hey, I broke my toe and I am angry, and I am going to have a big sale on products. I mean, you really don’t have to be too creative.

The whole concept of the reason why – the reason why doesn’t have to make sense. It just has to be a reason.

So, we sold a truckload of products in seven days, and I felt a lot better about my toe.

Michael: I am sure. So, you have explained to us you are quite personal with your marketing and your sales and even with your website members because you are the leader. A lot of people don’t really want to be personal and they call it sometimes personal. What would you say to them to make them want to do it and how they can do it?

Tim: That really would be a case by case situation. Most people that claim to not want to do it, they really don’t have a good reason. They sound like they are a fugitive from the law and they can’t do that. Maybe there are two or three people like that, and if that is the case, I would recommend that they create an alias.

The bottom line is that human beings relate the best with other human beings. Human beings don’t relate to entities or corporations or giant gleaming buildings. It just doesn’t work that way. You are really giving yourself a big handicap if you are not willing to put out a personality front that says, “Hey! Look at me! I am like you. Come and join me; we will be in this together.” That is such a powerful positioning.

Michael: That is brilliant. I like that. Thanks for sharing that. I have a couple more big questions before I get to our quick fire ones. I understand you have an online store. You have done seminars. You have your membership website. You did a print magazine and so much more. What was your favorite method to make money online and why?

Tim: Oh, man, Michael. I would say that my favorite method is selling a subscription product with a physical product upsell. And a lot of people will say, “What? A physical product upsell? Why would you want to go through the hassle of that?” Well, here is why. First of all, it is not that difficult to find good fulfillment resources to do it for you, so it is not like you are going to have to be sitting in the back room putting boxes together.

So few people are willing to go through that hassle that it helps to put you in a much more positive, competitive situation because you are sending out nice physical products where most people are not. So, it just makes is a much easier positioning standpoint.

And if you can sell a subscription – whenever we do an upsell for physical products on our subscriptions, we get 40-45 percent will go for the upsells, so it is like printing money.

Michael: Brilliant. You did mention earlier that your retention rates are at a crazy 26 months. What does it take you to keep because quite a lot of people, they get membership and they will not do much more once they sign up? Do you offer a lot more content? What do you do to keep giving them more?

Tim: The quick answer is we do everything.

We do whatever it takes. We have a very active Members Only private forum which takes some doing. There are about a half dozen moderators that aren’t paid, but we reward them with generous gifts every quarter. Then I have a moderator manager. Forums can be a little wild animal, but when they are paid forums, they are actually easier to manage, and that is actually awesome, fantastic, automatic content generation itself.

The other thing is we actually send out a physical magazine to our members. Everybody doesn’t have to do a glossy magazine like I do; they can just do a newsletter, but human beings love to receive things in the mail that they like. Junk mail, sure; nobody likes junk mail, but people like to get stuff in the mail.

That is actually another one of the Tribal Formula components; it is called a habit. If you can get your prospect or your member or your customer into the habit of getting something physical from you, it is difficult to give that up. So that is another component.

The other thing that we do is we keep a running email dialogue with our members, but we are constantly getting more and more and more and more, and I think it just naturally generates this feeling of reciprocity. They just don’t want to leave.

Michael: Well, obviously, it is working for you, so that is good work. So, my last big question here is tribal marketing. Now, you have recently done a seminar, and I think you were mentioning to me earlier that you were bringing out some type of product.

Tim: Yep. I am actually putting the finishing touches on my launch sequence for Tim Schmidt’s Tribal Formula.

Michael: Brilliant. And what is it? I know a lot of my readers won’t even know what tribal marketing is. Do you want to explain briefly what it is?

Tim: Well, really, it is just the name I came up with that describes how I transformed my crappy magazine business into literally an online publishing empire that almost runs by itself with unbelievably long continuity stick rates, and we sell tons of products. It is really how I implemented the seven key components of building belief in a group of people that transforms them into people that instead of just being customers who are focused on products and services, now they are members who are mostly focused on belief and belonging.

Michael: Brilliant. And where can my readers pick up this product?

Tim: Very shortly, they will be able to go to TribalFormula.com. The product won’t be available yet; the launch date is not until July 1st, but they will be able to get into the sequence. I am actually releasing some super exciting videos. I do a lot of teaching and also a lot of crazy stuff on the videos that will make my broken toe sale look like watching Sesame Street.

Michael: Brilliant. So, I ask my readers: I am interviewing. Is there anything you want me to ask? Here are a couple quick questions to ask you from them. How important is passion in your business?

Tim: It is extremely important. What your readers should do is they should go to that site and get the e-book, the free e-book. I have this flowchart, and the very first thing on the flowchart is passion. The flowchart itself will actually help them select a passionate niche that has profit potential. If your passion is something that is completely unprofitable, then you would be stupid to go into business doing that because you are not going to make any money.

But everybody has multiple passions, so I just help people select something that they are passionate enough about that has profit potential, and you would be amazed at how passionate you can get about something that initially you had a little passion for when you are making a lot of money doing it.

Michael: I can imagine. [laughs] My other question from my readers is: what changed in your business to jump your sales recently? I was looking at your sales page; I was looking at your profit, and it jumped up, from December to January, like 100 percent. How did you take your business up?

Tim: You know, what I did was I finally gave in and I started delegating. Up until that point, pretty much the whole operation was the Tim Schmidt show, and starting toward the end of 2008, I finally put on two marketing – I call them my hired guns. These guys are paid mostly on performance, and I kind of turned over the reins. They don’t operate autonomously, but I have given them much more freedom, and as it turns out, they actually are better at a lot of the stuff than I ever was. That is really the main jump right there.

Michael: That is good. So, you were explaining to us earlier that you were an engineer. How did you take the transition, going from engineer to Internet entrepreneur?

Tim: How did I take it? You mean how did I do it? What do you mean?

Michael: Yes. A lot of my readers, they are in their nine to five job. What made you get into being an entrepreneur?

Tim: You know, Michael, I always knew I wanted to be an entrepreneur, and I suspect that your listeners, your readers, probably feel the same way because people that want to be entrepreneurs usually have always thought about it. And how I made the jump was I tried to do the traditional way; I tried to go to the bank and get a loan from the banker. You know what he did? He laughed in my face.

It is funny now, but I tell you, it was the worst feeling in my life at the time because I really needed the money. At least I thought I did, but I was creative, and I came up with a way to boot strap it myself, and I just made it work. When I started my first business, I had a wife who had to quit her job because we had just had our first baby. So I had responsibility all over the place. It just comes down to you have to figure out a way to make it happen.

The only difference between the entrepreneur who has success and the one that doesn’t is the one that has success is the one that just refuses to accept any excuses. There is always a way to make stuff work.

Michael: What is your favorite thing about the Internet lifestyle?

Tim: I hate to sound sappy on you, Michael, but unlike you, I didn’t get my start until I was an old guy. I am 38 years old, I’ve got young kids, and for me, the best thing in the world is to go. I am the only dad that comes to school every Friday, and I have lunch with my kids at school. All the kids know me. I think that half the teachers think I’m unemployed.

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Tim and Tonnie Schmidt relaxing by the pool in Florida

I love it. I’m the kids’ baseball coach. I’m the Cub Scout guy. I get to do whatever the heck I want, and I love that. So, at this stage in my life, I love being the dad that I always dreamed about being. It’s just unbelievable. Sure, I love to go Baja or racing the cars and do all that fun stuff. That’s fun as well. I love doing that, too, but for me, the set whole family thing is just unreal.

Michael: Wow. I am glad you shared that with everyone because I am sure that would inspire a lot of people to get off their ass and actually take action.

Tim: Yeah, and you know what? It should inspire them, Michael, because they ought to.

Michael: Yeah.

Tim: Amen to that.

Michael: Brilliant. Alright. I’ve got my quick fire questions to end off this interview. So I am just going to throw them at you, and give me your first thoughts or answers. Is there anyone that I look up to and model yourself on?

Tim: Oh, man. I would say Thomas Jefferson.

Michael: All right; cool. What do you like best about the Internet?

Tim: The best thing about the Internet is the speed at which you can test and roll out and implement. It is awesome.

Michael: Brilliant. And what do you least like about the Internet?

Tim: This is easy. It is way too distracting. [laughter]

Michael: I can agree with that one.

Tim: The only way I can get stuff done is when I can get myself away from the Internet, but everything I am supposed to do is on the Internet. [laughter]

Michael: You don’t know how much that makes sense to me. That is exactly what I think. Alright. And if you could go back in a time machine and start all over again, what would you do differently?

Tim: I would put more focus on learning, and as I was learning, I would not question advice from people who had done stuff before me.

Michael: I agree.

Tim: That is a fancy way of saying all the information that I needed to do what I did was in front of me, within three months of my learning process, but, Michael, there are some things that still took me two and a half to three years to finally start doing, just because I was bull-headed.

Michael: Yeah. All right, honesty. And my last question here is: what is the best advice you have ever been given? I’m sure you have a good quote. I’m always seeing you tweet all these great quotes.

Tim: Yeah. The best quote I was ever given was by my dad. He told me, “If it is to be, it is up to me.” [laughter]

Michael: That is good. I like that. All right. Thanks, Tim, very much. Is there anything you would like to share with us? Any plans, personal business-wise, that you are going to be doing in the near future?

Tim: Right now, the sole thing that I am super excited about is just the launch of my product. We are having so much fun filming all the videos for this and putting it all together. So I am really excited about that, and I am excited about the people that I know are going to be helped by it. That is probably the biggest thing. My son, Tim, Jr., is testing for his black belt in Tae-kwan-do this weekend. So I am pretty pumped about that, too.

Thanks Tim — as always, whenever I hear you, I come away thinking I could do so much more. Thanks for the inspiration.

Check Out Tim’s website:

http://www.usconcealedcarry.com

Who is Tim Schmidt

Remember:

The only difference between the entrepreneur who has success and the one that doesn’t is the one that has success is the one that just refuses to accept any excuses. There is always a way to make stuff work.

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Comments

  1. Awesome interview mike! Great photos too!

  2. Wayne Liew says:

    This is another amazing interview. Membership sites (even a forum :mrgreen: ) is one thing that I am still holding back on. As Tim mentioned, I am not too sure whether it is time for me to lead a tribe yet.

    We’ll see on things go along and yes, Tim has definitely shared some great tips throughout this interview. Love it. Thanks Tim and Michael for this. πŸ˜‰

  3. Daniel Matthews says:

    Wow this interview has come with perfect timing!
    I will be sure to keep referring back to this, very interesting post and pretty amusing!

  4. Barry Dunlop says:

    Tim is a good friend and a very astute businessman

    If you are serious about membership websites then Tim and his Tribal Marketing Asociation are the go to people

    Take notes and take action

    Barry D

  5. Greg Ellison says:

    This is a pretty good interview and very informative. Thanks Greg Ellison

  6. Tom - StandOutBlogger.com says:

    I love how with memberships sites he actually really creates a community. He gives them reasons to stay. This is quite a mindset change for most of us!

  7. Internet Marketing says:

    That was a very interesting interview. It is pretty much inspiring to hear of stories like this. Points well taken.
    Thanks a lot.

  8. Mikael @ Retire Early says:

    I have to agree that I’m not an advocate for armed citizens but I like the idea of having picked such a specific niche and turning it into something big! πŸ˜‰

  9. Shane - Inspiring Your Success says:

    Very inspirational interview. I love how he emphesizes on belonging and family.

    Also, on his tribal marketing site, he speaks of Abraham Maslow. I once wrote an article about him on my website and it is my most viewed page, suprised me a lot!

  10. Mark | hereiblog says:

    Interesting interview. I may have to look into what Tim has to say concerning community, etc.

    It’s tough being a Christian blogger and wondering if it’s best to find another niche while keeping the theology blog going on a personal level.

  11. wow.. what a dream come true dude

  12. Khairul Azan says:

    i Love it

  13. Interesting interview, inspired me to do something like that some time in future.

  14. Great stuff, you’ve made some great accomplishments Tim. I’ve just recently retired from my career as an engineer as well and running my interent business full time πŸ™‚

  15. Very revealing… Thanks for sharing ur thots

  16. dave the rave says:

    Good interview but after viewing his Armed Citizen Website it makes me think, thank god Bush is not the President anymore.

  17. Programs Make Money says:

    Very interesting idea. I think it is worth a shot, I mean what else have I got to lose. I’ve only made a few hundered bucks for the internet thus far.

  18. David Eedle says:

    I’ll put aside my fundamental philosophical disagreements – here down under in Australia carrying a concealed weapon is simply a non-existent possibility, indeed owing a handgun at all is almost impossible, which probably contributes to the fact that very Australians shoot each other each year.

    Tim is completely and utterly spot on. He’s tapping into the deeper human motivations – we all like to ‘belong’. You can reinforce this in a multitude of ways – forums, community tools, membership cards, magazines, all manner of things.

    We built and ran a global membership based online business focussed on the arts and entertainment industry with 25,000 people around the world. Launched in 2000 and we sold to a group of private investors in 2006 for a v nice payout.

    We had some members who are STILL members of the site, paying an annual fee. That’s pushing *10* years.

    I agree with Tim wholeheartedly, if you go into the memberwship website business simply hoping to hang onto people for a few months you are incredibly shortsighted. Stop thinking months, start thinking years.

    It can be done. We did it. Plenty of others have. I won’t pretend it’ll be easy – Tim spent a bunch of his business’ money, we sold our house to fund the site. But then bought a million $ place when we sold the site, so it was worth the pain.

    Nice work Michael, thanks for the effort.

    David Eedle
    http://www.NicheContentMillionaire.com

  19. Nice work Mike.. very well done interview πŸ™‚

  20. Mike Grafstein says:

    Very interesting and a new way to look at offering continued value for a reasonable price.
    My brain is spinning now!

    Mike Grafstein
    http://www.youthsoccer-power.com
    .