Transcript of Frankel's Free Clinic April 19, 1999

RobFrankel (4/19/99 9:00 AM): Greetings!

Terri ( (4/19/99 9:00 AM): Hi Amanda! how is it going? Hi David :)

Benjamin Fitts (SoccerFans.Com) (4/19/99 9:00 AM): Good Morning just reading last week's transcript since I missed the session.

Terri ( (4/19/99 9:00 AM): Hi Rob!

Benjamin Fitts (SoccerFans.Com) (4/19/99 9:01 AM): Clayton - I've been here a few times before. I try not to miss it, luckily rob schedules these during my lunch hour

RobFrankel (4/19/99 9:01 AM): Beroff, did you get my message last week?

Benjamin Fitts (SoccerFans.Com) (4/19/99 9:01 AM): Yes David.

Liz Smith( (4/19/99 9:01 AM): Entered the room.

RobFrankel (4/19/99 9:01 AM): Benjamin, I schedule them during my first coffee break!

Liz Smith( (4/19/99 9:02 AM): Hi Everyone. This is my first time in the room. Nice to see you all!

RobFrankel (4/19/99 9:02 AM): Clayton, since this is your first time here do you have a specific topic?

RobFrankel (4/19/99 9:02 AM): Same for you, Liz!

Raynay Valles (4/19/99 9:03 AM): Entered the room.

David Beroff ( (4/19/99 9:03 AM): Apparently not, Rob, sorry ... could you please re-send?

Clayton Turnbow( (4/19/99 9:03 AM): Yes, How about Marketing Plans

Raynay Valles (4/19/99 9:03 AM): Hi, everyone.

RobFrankel (4/19/99 9:03 AM): Beroff -- something that Freedback should offer: free search engine.

RobFrankel (4/19/99 9:04 AM): Very tasty little app offered by

David Beroff ( (4/19/99 9:04 AM): Did I miss something, Benjamin?

David Beroff ( (4/19/99 9:04 AM): Oh, that ... sorry, yes, I did see that ... thanks

RobFrankel (4/19/99 9:04 AM): I sent you a note from your site.

Meg ( (4/19/99 9:04 AM): Entered the room.

Benjamin Fitts (SoccerFans.Com) (4/19/99 9:05 AM): You asked if you heard something about a new server. I was just describing to Clayton that I was still moving to a new server.

David Beroff ( (4/19/99 9:05 AM): We'll probably incorporate that into one of our sister sites, like the upcoming

RobFrankel (4/19/99 9:05 AM): So who's up first today?

David Beroff ( (4/19/99 9:05 AM): Ah! Sorry, Benjamin... right. We offer domain hosting if you haven't already moved into new digs.

Terri ( (4/19/99 9:06 AM): Dave, just wanted to tell you that your free forms are a lifesaver for those without access to cgi-bins at their server :)

Raynay Valles (4/19/99 9:06 AM): Hi, Rob. How would you market specialty tee shirts? They are similar to the color-changing inks shirts.

Liz Smith( (4/19/99 9:06 AM): Does anyone have a magic wand for this business? ;)

David Beroff ( (4/19/99 9:06 AM): Thanks, Terri' can I quote you? ;-)

RobFrankel (4/19/99 9:06 AM): I assume you're talking about marketing them on the web?

Terri ( (4/19/99 9:07 AM): *grin* by all means!

RobFrankel (4/19/99 9:07 AM): What are you currently doing?

Raynay Valles (4/19/99 9:08 AM): Across all media, of course on a shoestring budget. How can I leverage their novelty?

RobFrankel (4/19/99 9:08 AM): Raynay, you'll find that the easiest and best sales are business to business. have you tried marketing them as promotional vehicles?

David Beroff ( (4/19/99 9:09 AM): One of the things that I keep running against, Rob, is the tight balance of focusing on our core competencies. Several times the issue has come up of extending to additional CGI scripts, but I've seen this approach weaken some of our competitors. So I'm going to try to balance it by having a "Gadgets" sub-site, run by a separate person, so we can still benefit by offering the capabilities without stretching the core biz too thinly.

Raynay Valles (4/19/99 9:09 AM): The designs are in development now.

Raynay Valles (4/19/99 9:09 AM): Not yet.

RobFrankel (4/19/99 9:09 AM): Of course, the problem with novelty stuff is that it goes in and out of fashion very quickly. The time you spend building the business is hardly worth it.

RobFrankel (4/19/99 9:10 AM): Which is why you may also want to consider becoming a vendor for a promotional shop(s). Offer your shirts to them at a price at which they can resell.

Terri ( (4/19/99 9:10 AM): Rob, couldn't he extend the life of the product by offering to personalize it for each client?

RobFrankel (4/19/99 9:11 AM): That way, you get more people in the promotional business working to push your shirts (not that anyone really pushes anything) but at least your product gets into their catalogs faster.

David Beroff ( (4/19/99 9:11 AM): e.g., one of our larger competitors,, recently gave up on feedback forms and passed the user base to us. (A very sweet acquisition, I might add.)

RobFrankel (4/19/99 9:11 AM): Sure, Terri, but first you have to find the client, then make sure personalizing it is profitable. How many shirts does one typically order?

RobFrankel (4/19/99 9:12 AM): I'd rather make $2 for 10,000 shirts than $5 on 100 of them...

RobFrankel (4/19/99 9:13 AM): Let's face it, developing a market costs time and money, not producing the shirts. Raynay needs to find a built-in market.

RobFrankel (4/19/99 9:13 AM): Actually that should have read "$2 per shirt" on 10,000....

RobFrankel (4/19/99 9:14 AM): (David, you must be living right)

Raynay Valles (4/19/99 9:14 AM): Thanks for the perspective, Rob. I knew you were a great person to ask.

RobFrankel (4/19/99 9:14 AM): Hope that helps, Raynay. Should give you a bunch of alternatives that you can try simultaneously...

Amanda Smith ( (4/19/99 9:14 AM): Yes, ad specialty businesses would be a great market to target. Many of them do their own printing too.

Liz Smith( (4/19/99 9:15 AM): Rob, I have a big dilemma. Despite all our positive media coverage... i.e.: Time Mag, Wired News, etc.. our visits are up significantly but our sign-ups are down suddenly. It's a singles site. We need to find out what went wrong. We were doing great up until a few weeks ago.

RobFrankel (4/19/99 9:15 AM): I know that we have a bunch of them o the FB list, too.....

Meg ( (4/19/99 9:15 AM): Rob - does anyone have any suggestions on a perspective client that wants to offer us 3 percent of his business to do public relations at 1/2 our normal fee. What should I be asking?

Benjamin Fitts (SoccerFans.Com) (4/19/99 9:16 AM): Liz did you make any changes to the site? a redesign? change the wording? anything?

Benjamin Fitts (SoccerFans.Com) (4/19/99 9:16 AM): Liz, or maybe it is just that the traffic you were getting before was more qualified?

RobFrankel (4/19/99 9:16 AM): Really Liz? Surprised to hear that. But now you know the dangers of "heavy PR toting" sites. Before I piss off Meg, let me explain...

David Beroff ( (4/19/99 9:16 AM): living right? perhaps ... I must admit, it helped that I was willing to talk to and support my competitor when he was first starting out. He was 11, which is about how old I was when I first started. Now he's 13, and has 50,000 users. :-)

Liz Smith( (4/19/99 9:17 AM): well yes, here and there.. nothing major.. we actually added new features

RobFrankel (4/19/99 9:17 AM): I just killed a deal where (not name-dropping, this is real business) Chuck Woolery approached me for some help.

Raynay Valles (4/19/99 9:18 AM): Thanks for the perspective, Rob. I knew you were a great person to ask.

RobFrankel (4/19/99 9:18 AM): As you know, Chuck is Mr. Love Connection......and was looking for a way to move into the web leveraging his reputation.

RobFrankel (4/19/99 9:19 AM): Chuck (a smart, nice guy) was a perfect match for another client of mine,, arguably the best dating site on the web. It seemed a natural fit.

David Beroff ( (4/19/99 9:19 AM): Where's Dave Doggett? I'm sure he'd love to work with your client, Rob. :-)

RobFrankel (4/19/99 9:20 AM): The problem was that Chuck thought appearing on talk shows like Oprah was enough to drive traffic to his site. It did, of course, but only for one day.

Liz Smith( (4/19/99 9:20 AM): I see where you are going! keep going!

Liz Smith( (4/19/99 9:20 AM): I see where you are going! keep going!

RobFrankel (4/19/99 9:21 AM): He had no follow up and developed no community, so people signed up and then dropped off. My question to you is: what are you doing to entice them in? If you get interest, you're more than half way there. This is where that whole thing of branded community comes in.

Meg ( (4/19/99 9:21 AM): Hold on, Rob. Media coverage (like advertising or any other type of promotion or sales for that matter) needs to be ONGOING to work.

RobFrankel (4/19/99 9:22 AM): PR will bring bodies to the door -- but it can't be expected to sign people up.

RobFrankel (4/19/99 9:22 AM): Meg is right -- I'm going to bet that your PR effort is not a budgeted item, right?

Meg ( (4/19/99 9:22 AM): I think we're back to the "closing the deal" discussion from last week.

Liz Smith( (4/19/99 9:23 AM): well it's something that we try to keep up on constantly

RobFrankel (4/19/99 9:23 AM): Liz, if they're showing up, they're interested -- but what are you doing/offering them to join right now?

Terri ( (4/19/99 9:23 AM): Rob, I have been reading a lot about the necessity of having a newsletter - so you don't have to wait for visitors to come back to your site, but can reach out to remind them you are there

Liz Smith( (4/19/99 9:24 AM): we offer a free trial membership.. free chat rooms.. message boards.. a community type thing

Liz Smith( (4/19/99 9:24 AM): too much for free maybe?

RobFrankel (4/19/99 9:25 AM): How are you handling the free thing: free and then pay, or pay and refund?

RobFrankel (4/19/99 9:25 AM): Also, what is your pricing structure?

Meg ( (4/19/99 9:25 AM): Do you publicize (either on the site or through the media) your results? For example "3 percent of relationships developed on the site end in marriage."

Anne Zieger ( (4/19/99 9:25 AM): Entered the room.

Liz Smith( (4/19/99 9:26 AM): We send out a billing notice after 2 weeks....Members download a free decal to put on their cars to identify themselves

Anne Zieger ( (4/19/99 9:26 AM): Zieger drops in (clunk!)

RobFrankel (4/19/99 9:26 AM): One more question: where were the last PR gigs mentioned? As I recall, trafficgems is still pretty limited in its geographic areas, yes?

Liz Smith( (4/19/99 9:27 AM): $10/month $45/6months $75/1 year +free T-shirt

Liz Smith( (4/19/99 9:27 AM): we are worldwide

Liz Smith( (4/19/99 9:27 AM): time digital on April 12 just featured us

RobFrankel (4/19/99 9:28 AM): Worldwide???? For real? A few months ago, the report said "mostly in the northeast".

Benjamin Fitts (SoccerFans.Com) (4/19/99 9:28 AM): Liz (I was a reader of that but I already met my wife on the internet ;)

Liz Smith( (4/19/99 9:28 AM): nope mostly spread worldwide

Meg ( (4/19/99 9:28 AM): Actually it might do better or a local basis.

RobFrankel (4/19/99 9:28 AM): Thank you for sharing, Benjamin....knucklehead...

Liz Smith( (4/19/99 9:29 AM): I was interviewed on the radio live in Japan too and did a documentary for London weekend television

Meg ( (4/19/99 9:29 AM): on a local basis

David Beroff ( (4/19/99 9:29 AM): yeah, I would think for such a thing to work, one would have to concentrate on each geographic area in turn...

Clayton Turnbow( (4/19/99 9:29 AM): Entered the room.

RobFrankel (4/19/99 9:29 AM): So you have adequate memberships anywhere? Do you display that information?

Liz Smith( (4/19/99 9:30 AM): we are doing a big local promotion now but we have more members in California than NY... no I don't display that info

David Beroff ( (4/19/99 9:30 AM): Funny, Benjamin; sometimes I think I am *losing* my wife on the Internet. :-)

RobFrankel (4/19/99 9:30 AM): Two biggest problems for singles sites: 1. Not enough women 2. Not geographically convenient

Terri ( (4/19/99 9:30 AM): Liz, could you get testimonials from live people who met and married from your site? I would think that would add credibility

RobFrankel (4/19/99 9:31 AM): Married and dating is enough. Plus, Liz, I think you could benefit from another value added partner. Contact me off list for that. I'm working with someone right now that might find it useful.

Liz Smith( (4/19/99 9:31 AM): well we have only been in biz for 6 mos.. no marriages yet .. you are right about the women!

Liz Smith( (4/19/99 9:31 AM): Rob that is exactly what I was thinking!

RobFrankel (4/19/99 9:31 AM): I think that the Auto Club and Love At First Site might be good for you...

Meg ( (4/19/99 9:32 AM): When we're ready I would be very interested in comments about taking a percentage of the company from a client in return for a reduced fee. Anyone done this before?

Muhammad( (4/19/99 9:32 AM): Entered the room.

RobFrankel (4/19/99 9:32 AM): I have relationships with both

Liz Smith( (4/19/99 9:32 AM): Very well could be.. we have a very unique service too

RobFrankel (4/19/99 9:32 AM): Yes Meg, let's move on to that. great topic. What are your reservations?

Muhammad( (4/19/99 9:32 AM): Morning Folks

Liz Smith( (4/19/99 9:33 AM): thanks Rob, Meg, Terri, Dave!

Meg ( (4/19/99 9:33 AM): Do we ever see a return unless they go public? How can we control earning reports etc.

Meg ( (4/19/99 9:34 AM): The client is offering us 3 percent and will pay us 1/2 our normal retainer fee for 1 year.

Benjamin Fitts (SoccerFans.Com) (4/19/99 9:34 AM): Meg if you take 3% (I think was the figure you gave above)

RobFrankel (4/19/99 9:34 AM): Yeesh, here's the deal on equity sharing: 99% of the time, when someone offers you stock, it means they have little if any money. That having been said,....

Benjamin Fitts (SoccerFans.Com) (4/19/99 9:34 AM): Will you still have 3% when these assets become liquid?

RobFrankel (4/19/99 9:35 AM): I will occasionally take stock, but only for a slightly discounted fee. Unfortunately, the odds are stacked way against you here.

Benjamin Fitts (SoccerFans.Com) (4/19/99 9:35 AM): If this company is getting other investors they are probably getting preferred share.. and with dilution you might end up with a lot less than 3%

Meg ( (4/19/99 9:35 AM): Our 3 percent is forever

mstammer (4/19/99 9:35 AM): Entered the room.

RobFrankel (4/19/99 9:36 AM): An important factor is where the company is in relation to going public. If they're just about to go, it might be worth it. But there are BIG restrictions that go with that:

Meg ( (4/19/99 9:36 AM): Did you ever benefit from the stock, Rob? Were they public companies?

Muhammad( (4/19/99 9:36 AM): Like Rob said be careful with work for stock

RobFrankel (4/19/99 9:36 AM): Just because you get stock doesn't mean you're going to get cash. Nobody says they have to distribute dividends or income. So you can have stock that doesn't pay anything.

Muhammad( (4/19/99 9:37 AM): The company may never go public, it could just be a pipe have to see if they are close to going public

Meg ( (4/19/99 9:37 AM): I know about the "be careful" part. But are there any steps I could take to help.

RobFrankel (4/19/99 9:37 AM): Think you can sell the stock? Think again: most pre-IPO stock is restricted to prevent company shareholders from selling out too quickly. It could be years before you could sell.

Terri ( (4/19/99 9:37 AM): Plus Liz, how can I would be a bit leery of it unless I knew the business and the potential for growth - without having to depend on info from anyone else :)

RobFrankel (4/19/99 9:38 AM): Finally, I've done this a lot -- and I've NEVER seen a company that didn't have to get funded again and again, eventually liquidating their stock two or three times before making it. Your 3% could shrivel.

Meg ( (4/19/99 9:38 AM): We like the people and the product seems solid. PR could really blast it into high gear. And of course we believe in ourselves and our ability to do that.

Meg ( (4/19/99 9:39 AM): Good point, Rob

RobFrankel (4/19/99 9:39 AM): So unless you're REALLY good friends with this company, my advice is to discount your fees by no more than 10%. Then forget about the stock until if and when it goes IPO.

RobFrankel (4/19/99 9:40 AM): Meg, this is a classic breeding ground for Inventor's Disease...

RobFrankel (4/19/99 9:40 AM): In the meantime, your business runs on cash, not stock. Preserve your business and don't get greedy.

Meg ( (4/19/99 9:41 AM): Inventor's Disease?

Muhammad( (4/19/99 9:41 AM): Potential earnings that you are years away from receiving won't pay the bills

RobFrankel (4/19/99 9:42 AM): Yes. You can search for that article on my site. It's an eerie phenomenon that I've found over and over again.

RobFrankel (4/19/99 9:42 AM): On the other hand, I can tell you that I once had a client who gave me options that paid out at 40 to 1, so it does happen.

Meg ( (4/19/99 9:42 AM): True, but the thinking is: if we don't sign with them at the lower fee they will be forced to go with a different agency (cheaper/less effective) and we will loose the opportunity for business that will probably be very liquid in 12 months.

Meg ( (4/19/99 9:43 AM): So we've asked ourselves - can we take them on for the lower fee - knowing that the stock may be worth nothing.

RobFrankel (4/19/99 9:44 AM): What they're really negotiation for, Meg, is a lower PR fee.

Meg ( (4/19/99 9:44 AM): We have two pro bono accounts now - and could drop one and take this client on in its place.

RobFrankel (4/19/99 9:45 AM): In that case, it makes more long as you look at it as a pro bono, what have you got to lose?

Muhammad( (4/19/99 9:45 AM): Basically, be careful of clients that nit pick every nickel and dime. In my experiences you may get screwed over in the end.

Terri ( (4/19/99 9:45 AM): Meg, I would think it would depend on the nature of the product - e.g. if it is something new and innovative with little competition it should have a better chance of success

Meg ( (4/19/99 9:46 AM): I agree with that, Muhammad. And every time someone is hesitant to sign a contract -- it is always trouble

Muhammad( (4/19/99 9:46 AM): I never discount my fees more than 10% unless its a friend, FrankelBee, or if its a massive project

RobFrankel (4/19/99 9:46 AM): Yes, that's true. First a client that slices your fee in half, next its a client that offers you stock. Pretty soon it gets to be something for nothing, because you want to preserve your stock old trick.

Meg ( (4/19/99 9:47 AM): Terri - I think the product is great. It has exploded in Australia and is brand new here

David Beroff ( (4/19/99 9:47 AM): maybe this is obvious, but a lot of us are saying the same thing: if you honestly feel that your client is going to succeed, it is worth the investment of your time. Otherwise, don't bother.

RobFrankel (4/19/99 9:47 AM): Meg, bottom line is that if it's worth pro bono, it certainly worth a 50% fee reduction. Better for your business, if you lose the other pro bono.

Anne Zieger ( (4/19/99 9:47 AM): what do you folks think about discounting fees because you're transitioning?

Clayton Turnbow( (4/19/99 9:47 AM): 10% seems a very tight discount?

RobFrankel (4/19/99 9:47 AM): If it has exploded in Australia, why can't they pay you in cash here?

Meg ( (4/19/99 9:48 AM): You're all saying what I already knew -- I appreciate the validation. Thanks.

Meg ( (4/19/99 9:49 AM): We used to discount our fees --it usually is a disaster

RobFrankel (4/19/99 9:49 AM): Clayton, 10% isn't a tight discount -- PR is extremely labor intensive, with more real hard costs than most service businesses. It cuts into their margins.

Clayton Turnbow( (4/19/99 9:49 AM): clients for me are more important than sticking to a set discount number

Meg ( (4/19/99 9:50 AM): Rob - the Australia deal is the parent company - and the US deal is a licensee -- in start up mode

Clayton Turnbow( (4/19/99 9:50 AM): Please excuse my ignorance!

RobFrankel (4/19/99 9:50 AM): In the service sector, you usually get what you pay for. I can't tell you how many people bid me, go to a lower rated service, and return when the low bidder screwed them.

RobFrankel (4/19/99 9:51 AM): Clayton, not ignorance, but one of the reasons I don't do PR is that it is way to labor intensive. I couldn't do it.

Terri ( (4/19/99 9:52 AM): If you discount your service you may be giving the impression to the client that you "perceive" your value to be less - and if you perceive it that way, so will they

Muhammad( (4/19/99 9:52 AM): But you are a business, discounts are nice to get more clients...but if you keep focusing on price and not the level of service...

RobFrankel (4/19/99 9:52 AM): Meg, that means that the USA company is licensing Aussie's stuff. If they're not capitalized for it, that could be trouble. I'm constantly amazed at how many business plans don't account for marketing expenses.

Meg ( (4/19/99 9:52 AM): Yes, Rob, PR is ALL labor. A lot of work...all the time. But for some crazy reason we find it fun.

Muhammad( (4/19/99 9:52 AM): you lessen the value of your service, I stick to my rates like glue...and the client knows that I feel I'm worth it

Clayton Turnbow( (4/19/99 9:52 AM): Yes, I agree but to get the initial client or to keep the client sometimes a deep discount in my business keeps a repeat or future repeat clients

RobFrankel (4/19/99 9:53 AM): Dead on, Terri.

Muhammad( (4/19/99 9:53 AM): Even in cases where I may discount initially but eventually I go back to the normal rate and that's agreed upon beforehand

RobFrankel (4/19/99 9:53 AM): (SEVEN MINUTE WARNING)

Terri ( (4/19/99 9:53 AM): unless you discount for a return from them - like early payment, or ordering by a certain date

Muhammad( (4/19/99 9:53 AM): What is your business Clayton? Are you able to go back up to your original rate?

RobFrankel (4/19/99 9:54 AM): I almost never discount, but I ALWAYS show the client how I will work within their budgets. Sometimes that means they get more than the rate card would have, but that's where I fit it in. I want to make the deal work.

Meg ( (4/19/99 9:55 AM): There has to be a reason to accept lower rates - normally we don't. But we were intrigued by the idea of a percentage. We've been offered similar deals over the years- but this is the only one that seemed viable.

RobFrankel (4/19/99 9:55 AM): I always prefer to add value than cut rates.

Clayton Turnbow( (4/19/99 9:55 AM): I rent desktop projection. Yes, I can always go back to the original rate

RobFrankel (4/19/99 9:56 AM): Yes, Clayton, your biz is different. I can imagine that you would give a corporate rate to a huge business that signed a year's contract. I give the same consideration to clients on monthly retainers.

Muhammad( (4/19/99 9:57 AM): Working within the clients budget is always a good, it shows you care about their finances.

Muhammad( (4/19/99 9:57 AM): clients that accept your rate but ask you to work within their budget, or ones that just don't nit pick are typically the best client

RobFrankel (4/19/99 9:58 AM): It's a Catch-22. Muhammad. Half the time, when you ask about their budgets, the more paranoid ones think "he wants to know how much he can take from me!"

Terri ( (4/19/99 9:58 AM): I would make sure to word it that way too, Clayton - a corporate rate sounds more impressive to me than "discount" :)

Muhammad( (4/19/99 9:58 AM): The main reason I don't give big discounts is because the ones I discount end up giving me grey hair and are just hard to work with

RobFrankel (4/19/99 9:59 AM): The distinct minority say, "Gee, that's neat. Help me maximize my budget." Those are the best clients. They get it.

Benjamin Fitts (SoccerFans.Com) (4/19/99 9:59 AM): Bye Everyone. Have a good week.

Muhammad( (4/19/99 9:59 AM): Therein lies the rub, that's why I don't ask. If the mention it, then I work with them......however when it comes to things like advertising you have to ask....and that does put some clients off

RobFrankel (4/19/99 9:59 AM): (TWO MINUTES)

Muhammad( (4/19/99 9:59 AM): But if they don't want to spend $ on advertising and they need it.....

Meg ( (4/19/99 10:00 AM): Thanks Rob - good info, as usually. Bye

RobFrankel (4/19/99 10:00 AM): Okay, folks...guess that's it for this week. Liz, e-mail me. Everyone else, have fun!

Meg ( (4/19/99 10:00 AM): Thanks Rob - good info, as usually. Bye everyone

Terri ( (4/19/99 10:00 AM): Thanks Rob! See you all next week :)

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