Mike Arce started his career in the fitness industry and did well until some unforeseen circumstances came into play and he had to switch gears. He eventually started a digital marketing agency with $500 and a phone and now his agency does 7-figures and helps fitness studios around the world.
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3 Key Points:
- Niching down can be the way your business succeeds.
- No matter how many leads you generate, if you don’t know how to close deals, it’s pretty much useless.
- Sometimes, change has to come from within yourself, first, before you turn the tides.
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Time Stamped Show Notes
(click the time stamp to jump directly to that point in the episode.)
- [01:03] – Mike is married and has 4 kids
- [01:11] – He started his business because he didn’t have a choice
- [01:21] – He decided to start a company that initially sold websites
- [01:32] – It was hard and he was failing
- [02:01] – Mike made changes along the way and niched down
- [02:13] – “The more we niched, the more we grew”
- [02:37] – Mike helps fitness studios get leads
- [03:06] – One BIG and Unique Value Bomb: Mike delivers 200-250 leads per month with 10 – 20% conversion
- [03:50] – It’s important that your client knows how to close deals
- [04:45] – Mike realized the businesses that stayed with him were the ones who were more business savvy
- [05:02] – The people who were struggling were the fitness people who didn’t invest in learning how to do business
- [05:28] – Mike launched a learning center and a weekly podcast for his clients
- [06:05] – “We work with people that want to be better tomorrow”
- [06:50] – Have a process and training in place
- [07:20] – Worst Entrepreneurial Moment: Mike’s daughter was about to be born and they just started the web design business. They made some money in the first few months, but Mike learned that it was very hard to do the marketing and selling at the same time.
- [08:01] – They hit a good month, but they were stacked with work
- [08:13] – They hired an employee who didn’t really contribute
- [08:27] – On top of that, they were getting letters for not paying their mortgage
- [08:37] – They lived on macaroni and cheese, tuna, and ramen
- [10:50] – Mike was not going to fail or quit because he had a baby on the way
- [11:37] – Entrepreneurial AH-HA Moment: Mike started reading How to Win Friends and Influence People and he learned the value of communicating better. He realized he was doing it all wrong and started focusing on these skills. His biggest ah-ha moment was realizing that he needed to transform.
- [12:59] – Reading can affect you in BIG ways
- [13:45] – What is the one thing you are most FIRED up about today? “The thing that I am most fired up about is my team”
- [14:06] – 2.5 years ago, Mike was still learning about leadership
- [14:20] – He had a high turnover
- [14:32] – He couldn’t stand the people working with him
- [14:36] – The complete game changer was when Mike started to learn about leadership
- [15:28] – Mike is excited for 2017 as he now has about 12 people working with him
- [16:02] – The Lightning Round
- What was holding you back from becoming an entrepreneur? – “I was scared to start a second business”
- What’s the best piece of advice you’ve ever received? – “You’re as good as your people and you should treat your people 1st, customers 2nd”
- What’s a personal habit that contributes to your success? – “I need to win something every day”
- Share an internet resource, like Evernote, with Fire Nation – ViewedIt
- If you could recommend one book to our listeners, what would it be and why? – The E Myth and Multipliers
- [18:16] – Connect with Mike on his website and on his podcast
- [19:01] – Learn and work hard
Mike Arce: Absolutely! Let’s do it.
John Lee Dumas: Yes! Mike started his career in the fitness industry and did well until some unforeseen circumstances came into play, and he had to switch gears. He eventually stared a digital marketing agency with $500 dollars and a phone, and his agency now does seven figures and helps fitness studios around the world. The power of niching, Fire Nation. Mike, take a minute, fill in some gaps from that intro and give us a little glimpse of your personal life.
Mike Arce: Yeah! So, personally, I’m married, four kids now, and we started this business – you kind of just summed it up. But, we started it because we didn’t have a choice. We needed to get thing going, the economy was down and I couldn’t find anybody that was hiring. People were actually laying people off. And so, we decided to start this company that I got this idea for to basically just sell people websites. And I was, essentially, outsourcing the work. And it was really hard. We were actually failing at it because I really didn’t know what I was doing. I just needed to make money. We had a baby, another baby on the way; we’d just gotten married and just bought the house. We had $500 in savings. That was it. So, we took it from there and I learned a lot along the way. I can’t tell you how much coaching I’ve had and how many conferences I’ve been to, how many podcasts like yours and blogs that I followed in order to just learn what really entrepreneurism is all about, and building a business is all about. And we changed gears a little bit, made big changes earlier on, and now, it’s little changes, little changes until we’ve niched down. And man, niching… We’ve even niched within our niche more, which has been great.
John Lee Dumas: I love it.
Mike Arce: And it seems like the more we niche, the faster we grow. It’s been great.
John Lee Dumas: Yes, yes. If you’re not niching until it hurts, Fire Nation, you are not niching enough. So, make it hurt. Feel the pain. I love that. So, Mike, let’s talk about what you consider your area of expertise. Again, you’ve niched within a niche. What do you specialize in today?
Mike Arce: Right now, Loud Rumor is the agency, and we specifically help fitness studios get a ton more leads. So, it’s a lead generation program that uses Facebook, Instagram and YouTube to get, on average, 200 plus leads a month.
John Lee Dumas: So, what’s something that when you come to these clients and you say blah, blah, blah, what is that blah, blah, blah that just blows their head off? That they’re just like, “What? Really? We’re doing this wrong all this time?” What’s something that shocks them that you bring to their attention?
Mike Arce: That we, on average, bring about 220 leads a month with about a $500 ad spend. Good, qualified leads, though. They’re not just, like, opt-in email addresses that help them build their list. They’re first name, last name, phone number and email and that our average customer is converting between 10 to 15 percent. Our best our doing 25, but our average is between that 10 to 15 percent depending on the category. So, they do the math and they think about how many customers they’ve been getting. Generally, the average fitness studio, that’s just getting word of mouth, which is what a lot are doing. They’re only getting 10, 15 leads a month on average. And maybe they’re squeezing a few out of social media. So, getting that on a daily basis is really hard for them to think about. And so, when we come to the table, they’re really excited to learn more.
John Lee Dumas: Now, one thing that I realize is that it’s important in the customer service business that your clients actually know how to close, and it sounds like you know those closing numbers. I mean, you realize that they have funnels, or, at least, you help them set those up. Because, you can send them leads all day long. Even if they’re qualified leads, if they don’t know what to do with them, they’re going to fail, and then, you’re going to fail because again, if they’re not winning in their mind, they’re like, “What am I paying Mike for?” So, how do you take it to that next step? How do you not just give your clients leads, but give them the tools, the funnels to actually turn those leads into real dollars?
Mike Arce: Yeah, John. That was, like, the biggest thing we had to realize last summer because we were providing, for the most part, the exact same service in July that we’re providing now. But, we had a 45 percent retention rate versus today, we’re above 90. And so, the only change that we made, it wasn’t in the results, what we just realized were the people that were sticking were the people that were more business savvy, generally people that were business men and entrepreneurs that started a fitness franchise. They may already have a Subway and massage parlor; they’re just business people that found an opportunity. The people that were struggling were fitness people that decided to start a business and never really invested in themselves in understanding what that really means. And so, we decided the only way we’re going to be able to hang on to small business owners knowing that they’re destined to fail, according to stats – stats tell us that more fail than succeed over a five-year period. We needed to show them not just how to call these leads, but how to really help them run a business, especially in this industry.
So, we created a learning center and a podcast. The podcast releases videos weekly. The learning center has over 50 educational videos all the way from how to get more people on the phone, to how to get more people to book, how to get more booked appointments to show, how to get more to close, from culture to finance, everything you could think about. Scripts, templates, everything they could just use. Resources and tools. And so, all we really did was change the message a little bit as well to Learners are Earners. And, we work with people that don’t just want to do the same thing. We work with people that want to be better tomorrow than they are today, appreciate education and implementation. They’re the ones that do best in our program. If that’s you, come on in. And so, since doing that, it’s been a game changer. I mean, testimony videos left and right, and we’re not doing anything different on the service side, just showing them how to do it better.
John Lee Dumas: Fire Nation, it is the Michael Gerber E-Myth conundrum. It’s the baker who wants to buy a bakery. It’s the carpenter who wants to buy a furniture store. Business owners were winning. You know, people that were owning the Subway and then, the gym because they were business owners seeing opportunities. It was the fitness trainers that were saying, “Well, I love being in the gym. I’m going to buy a gym.” And they were failing. And Mike realized that, “I can send these guys and gals qualified leads all day long, but they’re going to fail because they don’t know what to do with these leads. You have to have a process in place where you’re training your clients all the way through. So, Mike, seven figures. I mean, you went from $500 to seven figures helping fitness studios around the world. Sounds like you got it all figured out. That’s really exciting. But of course, it didn’t come without bumps, without bruises. Take us to not just one of those bumps, but take us to the broken bone. Take us to your worst entrepreneurial moment to date. Tell us that story.
Mike Arce: Yes. So, my daughter was about to be born and we had started the business so we were a few months in. And everything was going really great at first. But remember, we started out as a web design company, so we weren’t’ what we were today. And so, we made some money in the first few months by selling these websites, but what I learned was that it’s very hard to be marketing, and selling and doing at the exact same time. So, you hit these roller coasters because when there’s no work, it’s easy to go ahead and fill up that pipeline with opportunities. But, when you use that pipeline, you close them, now you have so much work to do that the marketing stops or slows down. And when you’re a one or two-man shop, like, it was just my wife and I, that was happening. And so, we had a really good month where we sold a lot, but we were stacked. The projects were big two, three-month projects, and eventually we had no income coming in.
We had hired this one employee from the money that we made, sitting down right in front of the window that faces our driveway, because he was working in our house. We didn’t have an office. And my car that wasn’t paid for almost four months got repoed right in front of him, which really was embarrassing. And on top of that, we weren’t paying our mortgage, so we were getting letters already to do that. And we felt so our daughter can have what she needs; my wife and I were basically on the mac and cheese, ramen and tuna diet. And we learned how to make mac and cheese in so many ways, by the way. Like, if you add peas and tuna, so many different things you could do to make it a different meal. But, man, we ate like crap for, like, a year and half.
John Lee Dumas: Side note, Mike. You as an entrepreneur need to step up and make the mac and cheese cookbook for all of us struggling entrepreneurs out there that are bootstrapping our faces off. That’s going to be our cookbook. A meal under 30 cents, with a healthy spin because you’re a fitness guy, too. That book would sell.
Mike Arce: Oh, man. You know, I learned this one thing when I wanted to be fancy and really treat my wife. I would make spaghetti. You know, that would only cost a dollar for the noodles, and I would go to a really fancy restaurant called Pappadeaux's out here. Really high-end stuff. But, you can buy the sauce that you would normally put on the fish for, like, 5 bucks. And so, for six dollars, we had shrimp, scallops and crawfish pasta, which was really cool.
John Lee Dumas: Good hack.
Mike Arce: But, that was really tough, and we didn’t have any money. We were losing money and I had to borrow money from my parents, which was really embarrassing as well, because on the surface, on social media, everything looks great. And, you know, you hold your chest up proud and everyone asks you, “How’s business?” Your cousins, your family, your friends… “How’s business?” And of course, you’re optimistic. You say, “Everything’s great. Things are awesome. We’ve got some really good things in the pipe.” But, deep down, it’s like, “I’ve got to borrow money from my mom and dad or I’m going to die here.” And that was really tough because they don’t have a ton. And that was probably the worst moment was just dealing with my wife and wanting to keep her not stressed because she was pregnant, and hiding a lot of things from her so she doesn’t get worried. That was a lot.
John Lee Dumas: Wow, there are a lot of things I want to get into first. I’m just thinking about your employee right now that’s like, “Uh, boss, your car is being repoed right now.” And you’re like, “Oh, no! That’s my friend. He’s just taking it for a spin. He’s practicing. He’s practicing repoing cars. I let him do it with my car. No problem.” And the next thing I want to talk about is the baby effect. It’s actually something I haven’t talked about in a while, Fire Nation. But, it’s huge; it’s big. I mean, Mike was not going to fail. He was not going to quit, he was not going to let a phone call scare him, knocking on the door scare him, he wasn’t going to let hard work scare him because he had a little baby on the way. He had a wife. He had people that were counting on him. When that happens, your back is against the wall, we’re human beings. We’ve got nothing to do but succeed, so we succeed.
So, just realize sometimes when you hear people are starting businesses at life crisis moments when they’re having kids, etcetera, it’s not always a bad thing because you have no option but to succeed. You’re going to succeed. So, Mike, you’ve had a lot of great ideas, a lot of aha moments. What’s one of the greatest? What do you think is going to resonate with Fire Nation story wise? Take us to that idea; tell us that story.
Mike Arce: I started reading more, and I read the book How to Win Friends and Influence People. And, I learned the value of really learning how to communicate better and what people really want to talk about and what they want to hear about. And I was doing everything all wrong. And so, I started focusing on that and I started reading more. Once you read – funny you said E-Myth, but that was the first book I read, and that was great. And I started really valuing reading. And leadership became something I started focusing more on because if I wanted to build my team, I needed to know what to look for in character. And also, for me, what I needed to be as a leader, and also, how I needed to inspire and get these people to work because I had to hire people that maybe weren’t 80K, 100K people. I had to hire people that I can afford, and I needed to get 150 percent out of them. And so, I would say that my biggest aha moment was realizing that I, myself, needed to transform into somebody that I wasn’t at all. And my gut instinct of how to lead people based on sports in high school was totally off, and I needed to learn how to communicate with all different types of personality traits because the people I’m going to be hiring aren’t necessarily anything like me, and that was big.
John Lee Dumas: Fire Nation, reading is big. It just opens up your mind. It opens up your experience in life. And that’s so huge because some of us, myself, I come from Maine. I wasn’t necessarily exposed to the world. I didn’t have a ton of diversity in my life, but I could crack open a book and I could read about Benjamin Franklin in the 1700s. I could read about Gandhi in India. I could read about people all over the world, and that’s crazy and that’s insane. That can give you a different mindset perspective. And here’s Mike. He read a book that was written in the 1930s that changed his entire personality, and how he treated other people and how he looked at other people. So important. Now, Mike, fast-forwarding to today, 2017, what’s the one thing that you are most fired up about today?
Mike Arce: The thing I’m most fired up about right now is my team. And I know that may sound cliché, but we just won 2016 best place to work in Phoenix, which is really great.
John Lee Dumas: Wow!
Mike Arce: Yeah. Now, that may not sound like… Well, you said, “Wow,” so maybe it does to you.
John Lee Dumas: It sounds amazing!
Mike Arce: Let me tell you from my why that gives me chills. Two and a half years ago, I was still learning leadership, and I was terrible at it. The first few books I read were how to build in a marketing and sales, so we were actually growing as a company. And we were able to get up to five, six employees, but it was a nightmare. I had a very high amount of turnover. No employee was ever hitting the one-year mark. I mean, we’re talking three, four months. People were talking about the business negatively and I actually didn’t even want to be here. I was ready to just close the doors, sell the business just because I couldn’t stand the people I worked with, and I couldn’t do anything about it. And I blamed them.
And once I started learning about leadership and all the stuff I just talked about with you a few seconds ago, man, the game changed. And now, we have six or seven people, I think, that have celebrated a one-year with us. A couple are about to do two years, which is great. And it’s not only that. That award, you have to submit yourself to be a nominee. I didn’t even know they submitted us. My director of marketing said, “Hey, Mike. You should get tickets to this Best Place to Work event.” And I said, “Why?” I thought maybe a networking opportunity. He said, “You’re nominated.” Apparently, everyone in the team pitched in, wrote a bunch of really great stuff to them, and also even made an amazing video where all of them are talking about why they love working here. I didn’t even know they were doing that. And so, just watching everybody communicate and connect, bring ideas to the table, I just feel like I have so much support. And, right now, I’m more excited about 2017 because I got 12 people working as hard as I am and coming up with their own ideas at such a fast rate that I don’t even think I can understand what my world’s going to look like this time next year.
John Lee Dumas: Wow! I mean, what an exciting place to be, Fire Nation. Don’t you want that kind of enthusiasm? That kind of passion in your work? It’s there, it just takes hard work, it takes dedication, it takes niching. And then, like Mike said, why not niche within a niche? Go for it! Now, we’re going to be dropping value bombs galore in the lightning round after we thank our sponsors.
Mike, are you prepared for the lightning rounds?
Mike Arce: Yeah, let’s do it.
John Lee Dumas: What was holding you back from becoming an entrepreneur?
Mike Arce: So, I was scared to start a second business. I started my first business not even knowing what being an entrepreneur was, and that failed. But, starting the second business was fearful because of that and that’s it. Fear. I would say, in a short word, fear.
John Lee Dumas: What is the best advice you’ve ever received?
Mike Arce: You’re as good as your people and you should treat people first, customers second. If you treat the people right, your customers will get taken care of better because everyone’s treating them right.
John Lee Dumas: What is a personal habit that contributes to your success?
Mike Arce: It sounds weird, but I need to win something every day. So, I have a Rubik’s Cube in my backpack, and so, I can do the Rubik’s Cube in under two minutes. And if I haven’t won something that day, little competitions with my brothers or coworkers or whatever, if I haven’t won something before I go to bed, I’m off. So, I’ll do the Rubik’s Cube in under two minutes and then I feel good.
John Lee Dumas: I’ve always wondered, how do you mix up a Rubik’s Cube after you’ve figured it out to make it so you don’t know how you just mix it up.
Mike Arce: Give it to somebody else.
John Lee Dumas: Ah, that makes sense. Share an internet resource like Evernotes with Fire Nation.
Mike Arce: You know, the one I just learned about that I really love is called ViewedIt, and it’s a Chrome extension if you use Google Chrome. And what it allows you to do is create really great screen recordings that you don’t have to save to your desktop and then upload and send as an attachment. Automatically, you can screen share with your face in the bottom corner in a nice circle, and then, as soon as you’re done, it just provides a link for you and you can share that link with anybody. And, they’re watching it immediately.
John Lee Dumas: Oh, ViewedIt. I love that. If you could recommend one book, Mike, what would it be and why?
Mike Arce: Depending on where you’re at in your business, because everybody’s in a different spot, but for me, I would say E-Myth is, for sure, the hands down, anybody should read that one. But, for leadership, Multipliers is my favorite book on leadership, and it changed my life.
John Lee Dumas: Let’s end today on fire, brother, with a parting piece of guidance, the best way that we connect with you and then we’ll say goodbye.
Mike Arce: Yeah. So, I have loudrumor.com is our website, and the gsdshow.com is our show where we do shows every single week.
John Lee Dumas: Loudrumor.com. Real quick, give me the background behind that name.
Mike Arce: We actually were just wanting to come up with a name that doesn’t already exist so that we can have no competition and ranking and all that stuff. It was SEO minded. And, I’m very loud. I come from an Italian family. So, that was that, and I felt like with small businesses, word of mouth is what the pride themselves in. So, I wanted to be able to create rumors, in a way, for them so they could get more business in.
John Lee Dumas: And again, that parting piece of guidance.
Mike Arce: Parting piece of guidance is constantly learn. You’ve got to learn and work hard. You can’t do one without the other. There’s a lot of people out there that just learn and they don’t work hard. So, they just become knowledge that doesn’t do anything. And there’s lot of people that work their asses of until two or three in the morning. They pride themselves on it, but they don’t learn new things, so they’re spinning their wheels. So, learn something every day; work hard every day on what you learned.
John Lee Dumas: Fire Nation, you’re the average of the five people you spend the most time with, and you’ve been hanging out with Arce and JLD today. So, keep up the heat and head over to eofire.com. Just type “Mike” or “Michael” in the search bar. His show notes page will pop up with everything that we’ve been talking about today. These are the best show notes in the biz – timestamps, links galore. Or, just head directly over to loudrumor.com. And, Mike, one more time, that URL for your show.
Mike Arce: Thegsdshow.com It stands for Get Stuff Done. I don’t know if I’m allowed to say the other word.
John Lee Dumas: So, it’s the other word. It’s not “stuff.”
Mike Arce: Yes.
John Lee Dumas: Mike, thank you for sharing your journey with Fire Nation today. For that, we salute you and we’ll catch you on the flip side.
Mike Arce: Thanks, John.
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