John Fosco Talks About the Business and Biceps Podcast, Max Effort Muscle and More
On July 16th, 2019 our own Andrew Maff sat down with Business and Biceps Podcast Host and Entrepreneur, John Fosco. They discussed John's podcast, the CBD industry, what differentiates his supplement company Max Effort Muscle from its competitors and more.
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John Fosco: So never went and pursued higher education after high school. Got a job, kind of learned sales techniques, and that very quickly connected with my biggest passion, which is mixed martial arts. And when I was 25, I started to build a very large marketing agency in the UFC space. I ended up selling that, and I built another one, it became the largest management and marketing agency. We were the only agency that was able to sell the UFC's octagon, and programming reads, and all that. We had a deal with them.
I ended up selling that. And through that relationship, I managed many companies budgets, and through that relationship I managed MusclePharm was a company. And my current partner now, [Corey Gregory 00:01:01], and Max Effort Muscle, which is a company we own, which is a direct consumer supplement company, we met because I managed MusclePharm's marketing budget when I was in the UFC.
So we have Max Effort Muscle, which has been going strong for about four years. Like I said, it's a direct to consumer sports supplement brand. We just opened a flagship location on King Street, in Charleston, South Carolina, for our new business, CBD Social. We've been in the CBD world for about two years now, and creating some pretty interesting applications. And of course, Business And Biceps, is our podcast that just was basically me and Corey waiting on a website to be built, so we started recording our conversations. And then companies like LinkedIn, and Robin Hood, and [inaudible 00:01:49] started sponsoring it, so that turned out into a business.
So I've just been, I've just been, I've been creating businesses basically since I didn't go to college.
Andrew Maff: Nice. So a lot of stuff, tons of questions, let's start here. So you're in the CBD space now, which is a wildly competitive space. We hear from people all the time now, that are all starting these CBD products. Where do you think that industry is going to go, especially now that it's, there's so much limitations to how you can actually advertise it in certain territories?
John Fosco: Yeah, so I'm kind of an anti brick and mortar guy, unless you're going to be pushing your own brand, and your own brand identity. Adm the reason we did a brick and mortar location is because, when people hear CBD, they just think, "Oh, CBD. Oil." CBD is about application, it's about, do you have anxiety? It's about, do you need it for sleep? It's about, do you need it for pain? And so many companies are trying to get in on the gold rush, but they don't give a shit ... Sorry if I swear. They don't give a shit about educating people about anything. They just want that money quickly.
And we take a lot of pride in educating people, and ... I don't want to say diagnose, but almost diagnosing them. Basically, just to give you an example, if they have sleep issues, the last thing they should be doing ... I don't want to say the last thing. But they probably shouldn't have an oil, they should probably have a gummy, which is slower digesting, which is better for sleep.
And we just take the time to educate each and every customer, and we've created our own application. So were the only company in the world currently, that has a full spectrum CBD water. Full spectrum CBD is like motor oil, it's impossible to make it water soluble. It took us about two years. And that's the feeling everyone is looking for, is a full spectrum feel.
So we have a lot of differentiators, combined with education and customer facing gear, that we are very confident will separate us from the rest of the pack that is just looking to sell oil to people and not really tell them how to take it.
Andrew Maff: How do you plan on advertising that with the current limitations in some different states?
John Fosco: Yeah, the limitations are pretty mind blowing. But listen, money talks, it always will talk, it always has talked. So you have big tobacco attacking Juul and anything in a pod, you have big pharma attacking CBD, not allowing doctors in hospitals to study it.
So the way we market, that's why we came to Charleston, South Carolina, because there is probably 90% of your foot traffic is tourism. So every day you're customer facing with people who don't live here. So if you make a sale, and they feel that your company provides a good product, they're going to leave, then they're going to become a website customer. So we'll build our web presence through face to face. And then there's a large college base here.
So I wouldn't do this in any city. This city is very unique, and that's why we picked it, because there's over seven million tourists a year that visit it, it's fairly small, and there's five colleges that feed it pretty much around the full calendar year.
So that's how we are going to build our web presence, through facing the customer on a daily basis.
Andrew Maff: Nice.
Speaker 3: Yeah, so my question, you guys don't sell any Max Effort Muscle products on Amazon, which I think is really interesting. So kind of tell us a little bit about that, and do you think you'll ever start selling your products on Amazon?
John Fosco: So Amazon is what I think every industry is competing with, I can't comment on industries that I'm not in. But especially the supplement industry. So I'm sure everyone knows bodybuilding.com. Bodybuilding.com is getting cash injections, and they are on the verge of going out of business because of the, I like to call, the Amazon effect, and the grocery store effect. Five years ago there would be half an aisle of sports supplements in your Target, or your Walmart, now there's five aisles. And Amazon has such a great presence in what happens, obviously, as the prices come down.
So the reason we don't mess with Amazon or anything like that ... We actually don't even discount our product on Max Effort Muscle. Is because supplements, and sports supplements in general, has just become a discount war. Everything is 30% off today, 30% off today. What we wanted to do is, we give you, oh, if you purchased 100 dollars, we give you a shirt, oh, we'll give you a hoodie if we're running specific [inaudible 00:06:50].
So we use the discount with the perceived value that the customer has for a hoodie or a t-shirt, which is also marketing for us. But we never, ever discount our product. And to put a t-shirt on someone if they spend 100 dollars, is roughly a 3.2% discount, to put a hoodie on someone, I'm still below a 10% discount. And these other companies like bodybuilding.com, which are dying on the vine, are giving 30% discounts on a daily basis.
Andrew Maff: Nice. So it's more of an added value, additional gift, as opposed to an actual discount, plus free t-shirt, it's essentially advertising for you guys. I like that.
John Fosco: Absolutely. And we'll also give free product, right. So if I give somebody two pre workouts for free if they spend, we have an XL stack, that's what we call buying five products, if they spend 160 dollars. So that's about, my cost is about 9% of that. Well they perceive that as 70 dollars, and that's two jugs of pre workout, well it's a 9% discount.
Everyone else is discounting 30%, but 30% doesn't mean anything to anybody. Two free jugs of pre workout means a lot. So we're winning, and the customer is winning as well.
Yeah. So you've been in the industry, in the sports and nutrition industry, longer than anyone I know, so I'm sure you're aware of this more than I am, but they tend to be fads. A new brand comes out, it does really well, everyone wants to try it for a year, maybe two years, and then they die out. How do you guys keep that from happening and become more of the Animal Stak type guys, or [Nas 00:08:42], or something along those lines where you get to stick it out and you're salvageable for years?
John Fosco: Yeah. So I think everything comes back to, I don't care if you're just providing a service, let alone sports supplements, everything comes back to building a brand. I mean, a brand is an identity, a brand is a personality, a brand is a team. When someone puts on our t-shirt and they see another person in the gym with a Max Effort t-shirt, it's like, oh, what's up man. It's like they're part of something together. And frankly, we do not spend one dollar on marketing, we do not spend any money on marketing, we just choose to take that money we would spend, and give more.
So how do we last? Well we're in our fourth year, we're, I think we're projecting up 29% over last year, last year we were up over 50%. And as long as we keep coming out with new skews, and new products, and keep our eye on the ball of the brand as well, then we're confident that our buying base will go nowhere else because we're investing the money that would be going to the advertisers, into the customer. And they sem to appreciate that. And when I say that, I'm not speaking from opinion, I justify everything with analytics, and numbers, and numbers show that.
Andrew Maff: All right.
Speaker 3: So since you guys don't spend, you guys don't spend anything on marketing, what is one thing about Max Effort or Business And Biceps that you guys do, or a marketing strategy that you implement that really differentiates you from the rest of the supplement industry out there?
John Fosco: So when we started this company, looking at the industry, there was a handful of what you'd call stacks, right. There'd be a get big stack, or a get ripped stack. And companies would tell the customer, here's four supplements, it's 140 dollars, buy the get ripped stack. Or buy the get big stack, it's 160 bucks. But we said, what if we could manufacture these products and find a way to have every single supplement cost 35 dollars, and that way everything is interchangeable, and people could build their own stack.
We don't need to tell them the get ripped stack, sure we do that through our content that we put out on Instagram or online, but giving customers the choice to build their own stack, and then at the same time giving them the choice of 50 different apparel items to get something for free, was really how we built it. People really appreciated, oh, I can just get two proteins and a fat burner and that's my stack, I can't get that stack anywhere else.
Well the only reason we're able to do that is because when we set up the company, we made sure all the margins were where they needed to be so everything could cost the same amount of money. If you go to another company, their protein will be 50 bucks, ours is 35, so is our fat burner. You can't find that anywhere else. It's how we formulated and strategically set up the company in the margins.
Andrew Maff: Nice. So you mentioned earlier, when you guys started the podcast, you were waiting for a website to be completed, was that the Max Effort website?
John Fosco: No, this was way back in the day. So after I sold my marketing agency, it was called [BFD Marketing 00:12:31], there was still demand from the UFC world to basically get consultation, and to get some direction on how to market in that space. And we were working with a company like Reebok, who basically outfits the whole UFC, UFC fighters fight in Reebok. So we created a marketing agency that we ended up letting go once Max took off, but it was called Activ8 Media. And that's what we did, it was like consulting, one off consulting gigs while we were getting going.
Andrew Maff: Nice. So do you think part of the success of Max Effort is because of the Business And Biceps podcast you guys are doing?
John Fosco: One million percent. Absolutely. Here's the greatest example I can give you of the power, and I had no clue, the power of a podcast is, we put out a book about two years ago, an audio book. And I'll be the first to say it's embarrassing. Now some of the content I think is good, but we literally just recorded on mics, and we made an audio book called Entrepreneurial Entrepreneur. And all we did was let our listeners know that, hey, we're going to put out and audio book. And we didn't have chapter break, it was a mess, right, but we just wanted to put out an audio book.
It went to number one on the Itunes business charts for five days, and stayed there like a rock, and it was number four on all Itunes audio books, behind the Bill O'Reily killing something, for four to five days. And I was like, "Holy shit." Holy shit, the only people we've talked to about this is from our podcast. So yeah.
Andrew Maff: Nice.
Speaker 3: Nice. So you mentioned before that you're a big numbers guy, and I know you talk a lot about this on the podcast as well. So what is, what in your opinion, what do you think is the most important metric that you can measure a business' success by?
John Fosco: The most important metric. I think, are we talking about my e-business, online?
Speaker 3: Yeah. An e-commerce business.
John Fosco: I think it always has to be a perfect balance, or a not so perfect balance of a customer retention rate that is much greater than 80%, and new customers. If you are ... I mean, there's companies that are fabulous at bringing in new customers, but they do not have any strategy at retaining them, and vice versa. I think that delicate balance is probably bar none, because there's a lot of companies out there that will make you [inaudible 00:15:33], like your cable provider, right. You see all these great incentives, [inaudible 00:15:37], there's great incentives for new customers, but the returning customers are like, "Man, I'm paying 80 bucks more a month for that same package."
Now when you scale that down to a business that doesn't control the world, like Xfinity, or Comcast, that's stuff matters. So that delicate balance and being really good at it, I think would probably be the most important thing.
Andrew Maff: Nice. So love keeping these short and sweet, I know you're busy, hate to take up the rest of your day, so really appreciate you doing this with us. If you want, more than happy for you to leave some closer remarks to let everyone know where they can hear more about you guys, or sign up for the podcast or anything.
John Fosco: Yeah, absolutely. I appreciate you guys having me on. Yeah, the podcast is Business And Biceps, you can find it on the Itunes store. And the website for our direct to consumer supplement brand is, Max Effort Muscle. And for our brand new CBD company is, CBDsocial.com. And yeah, that's it.
Andrew Maff: Cool.
Speaker 3: Awesome. Anyone out there who hasn't checked out Business And Biceps, make sure you do, great content coming from these guys. And thanks for joining us.
Andrew Maff: Thanks John, I appreciate [crosstalk 00:16:54]. Have a good one.
John Fosco: Enjoy your weekend, thank you.
Andrew Maff: You too.
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