The one where Dean gets off the hamster wheel #003
- How Dean got his own TV show just by asking
- Dean discovers the ultimate ticket to freedom
- How Joe defines marketing vs selling
- Plus: Dean and Joe reveal their best investment advice
Dean: Hey everybody, it’s Dean Jackson.
Joe: And Joe Polish. I feel like your sidekick here, Dean.
Dean: There we go. It’s perfect. That’s just the way I like it. It’s a power play.
Joe: Yeah, I thought we had discussed this early on; this is going to be like a Batman and Robin sort of thing, but now I’m starting to feel a little bit like Robin. Maybe that’s not a bad thing. But I did all the talking on the last I Love Marketing Podcast, and so now it’s your turn to bedazzle all of our listeners with some really hopefully amusing, instructional, and moneymaking storytelling.
Dean: Well here we go. Last time when we were talking, you were sharing the idea of how you used your consumer awareness guide, and you hired a copywriter for $1800, all the money in the world at the time, to have them write this consumer awareness guide to carpet cleaning, and answered all their questions and overcame all their objections. You started using that in your marketing, as your marketing approach. And we were talking about this whole idea of using the concepts from The E Myth, of creating things that could work without you. That was the biggest lesson that I got from reading The E Myth the first time. It really dawned on me that, boy, there really is some leverage, if I can create something that works without me.
Before I read that book, I was very successfully doing cold–‐calling, calling people on the phone. It was very effective, but it took a lot of time. And I started really realizing that it was like a hamster wheel, where it works when you’re doing it, but if I don’t do it then I’m not generating new business. So, it was kind of like a one–‐to–‐one relationship, and I was hamster on the wheel, doing it. And when I read The E Myth, I can still remember the feeling that I got reading that book, and having an epiphany about this concept of the franchise prototype and creating something that could work without me. And I know that that’s the same driver that you had for creating your consumer awareness guide. At the time, I mentioned that my focus was on townhouses and on first–‐time buyers. That was who I was really kind of focused on.
So, I started thinking, “Well, what can I do to leverage my time? What could I do to create something that would be a duplicable system, that I could do it again and again?” In the local real estate board golf tournament, I had won a half–‐page ad in the local real estate publication, so I had decided, “You know, I’m going to use this half–‐page ad to do an ad for a first–‐time buyer seminar.” I prepared all the stuff for the seminar and called it “6 Steps To Homeownership,” and I created kind of the outline, taking people through all the basic things that they would want to know. Its surprising parallel to the idea that you had, of thinking about all the things that people are concerned about with carpet cleaning: all the myths, all the questions that they have and the things they need to know. So, things like how much can I afford and what’s the actually process of buying a home, and what’s the timeline, talking about home inspections and all these kind of things that anybody who’s going to be buying a home would need to know.
What I did was, from that seminar, I created a booklet called “6 Steps To Homeownership,” and I gave this to everybody who came to the seminar. So the seminar, on its own, was a system that I could duplicate. I could do that again and again. I could it every week or every month. And sometimes in the spring, I would do it twice a month. We would do it on the first and third weeks of the month. But it was still sort of a one–‐to–‐one system, and this is where I had the idea. I saw an article about the local cable company and realized – I didn’t know this – the local cable company’s mandate was to provide local access to people in the community, to serve the community. I took that to mean that anybody could have a show on this channel.
So, I called up the guy who was running the cable, channel 4 in Georgetown, and I asked him. I told him, “I’ve got this homebuyer workshop that I do, and I’d like to create a show called ‘6 Steps To Homeownership,’ a 30–‐minute show.” And he said, “Oh yeah, that’s a great idea. So, come on in.” And they took care of everything. They had the interns, they had the camera people, they had the editors. The whole situation was there. And I got, for $500 is all this whole thing cost, I got a half–‐hour show produced and run twice a month for a year on channel 4, on the cable channel. And it was an infomercial, basically. I would do the same things that I did in the homebuyer workshop.
And instead of having them just take notes, I would say right to them, and I got this 2 or 3 times in the actual show, I would tell them, “You don’t need to worry about taking notes because everything is right here in this workbook, ‘6 Steps to Homeownership,’ and you can get a free copy of the workbook by calling this phone number.” I would have an extra line that had gotten in my house, because this was kind of before the free recorded messages were available in Canada. So, I just used an answering machine, and people could call and ask for the 6 Steps to Homeownership Guide. And every time I ran this show, I would get people who called up and asked for the booklet.
So, the show was running every other Thursday, and it was on at 7:30, which was leading into, at the time, what was NBC’s Thursday night lineup and must–‐see TV, where we had Seinfeld and Wings and Cheers, or not Cheers, Mad About You, and Frasier. Those shows were the ones that were all on at that time. So, what I started to do was I would do everything I could do to schedule a listing appointment for 7:00 on that Thursday, so that I could say to people, we’d be talking, we’d go on a little tour of the house, we’d sit down at the kitchen, I’d start to tell them about our marketing plan, and by this time it’s 7:30, and I would say to them, “While I’m in here talking to you about selling your house, I’m also out there trying to find a buyer for your house.” And I said, “Let’s go to your TV for a second,” and we’d go and I’d turn this on, on Channel 4. And there I am, I’m sitting in their living room with them, we’re watching the television, and I’m on TV looking for buyers for their house. And it was such a magic thing that people would just be like, “That’s amazing.”
Joe: That is great.
Dean: What do you think of it?
Joe: Well, that’s more credibility than a guy like you even deserves, right?
Dean: But I started thinking that was really just the very first really leveragable thing that I did; because right around that same time, then I started sending the business reply postcards into apartment complexes and offering them the guide to “6 Steps to Homeownership,” people would send back. You’ve used these little business reply postcards, it’s like a tri–‐fold postcard. So, I would have the information about the guide, and then it would have a little business reply card that people could fill in. So for people listening, it’s like in magazines, how they have those little subscription cards where you can fill–‐in your name and just drop it in the mailbox and the postage is already paid.
So, I would send the postcards with those. And I remember, still, the very first time that I mailed these out, I mailed about 1,500 of these postcards, I remember pulling into the office. Our real estate office, at the time, was in 2 houses that had been joined with kind of an atrium in the middle of it. So, you could pull in and you could see the receptionist there. So I pulled in, and as I’m getting out of my car, I could see the receptionist, Joanne, she’s waving something over her head and smiling. I couldn’t see what it was. But I go in, and she has in her hand this little stack with a rubber band around it, of these cards that people had filled out and sent back for this Guide To 6 Steps to Homeownership, and there were 11 of them that very first time. I was looking through these things, and people had left their name and their address, and their phone number.
So, I went into my office and I started calling these people. It was such an amazing thing, to be talking to people who remembered asking for this guide, they were thinking about buying a house, they were happy to talk to me. To get 11 people, 11 prospects like that, you’d have to do cold calls for 3 nights in a row to find that many people. So, to have every person that I talked to be a real prospect was just crazy. And these were people who were friendly and cooperative and they wanted to buy a house and so they were happy to talk to me. Did you find that change, when people would call about your consumer awareness guide, that they would be of a different mindset?
Joe: Well, the whole thing is really about positioning, and it’s kind of like do you want to go out on a blind date, where you know nothing about each other, the person knows nothing about you and you’re just kind of showing up and they’re skeptical and they’re worried and they have fear and they don’t know if they can trust you? Or would you rather have someone that’s pre–‐interested, pre–‐motivated, pre–‐qualified, and pre–‐disposed to give you money and to hire and to do business with you, and to meet with you and talk with you? So yeah, I totally found that. This sort of education–‐based marketing, which I started calling ELF – easy, lucrative, and fun – because it’s easy to work with someone that’s positioned like that, it’s lucrative because you’re going to close a heck of a lot more business, it’s fun because you’re not spending your time getting rejected and talking to people that aren’t interested. You’re only talking to people that have a genuine interest, versus what I call a HALF business – hard, annoying, lame, and frustrating.
So you can have an easy, lucrative, fun business – ELF – or you can have a HALF business, which is hard, annoying, lame, and frustrating. Or even if you are making money, it’s hard, annoying, lucrative, and frustrating. So, yeah, I totally found that people would no longer, after I took them through a similar process, they wouldn’t ask, “How much do you charge?” They’d ask, “When can we work with you? How can we start working together?” You see a lot of people that might be listening to us might be thinking – or listening to you, really. See how I snuck myself in there, Dean, to make it sound like I was giving them some sort of grand advice here? If people are listening to this going, “Well, yeah but you have to write stuff and you have to this and you have to do that,” I always say back to them, “Well, you’re going to spend the time anyway.
There’s only 3 things you can spend, that I’m aware of: time, money, and energy. And people can say attention, but I would through attention into energy or effort; time, money, and energy. You’re going to spend all of those things in one way or another. And the more that you can leverage your time, which is your most valuable asset, you’re so much ahead of the game, you’re so much ahead of your competitors. So, implementing this type of education is just going to provide a much different sort of interaction with the client. And what’s cool is you’re talking about doing all this before the Internet, I mean business reply envelopes.
Dean: Like cable TV, at the time, that was something. Literally, you could see their reaction to it. “You’re on TV and you’re in my living room!” It was a game changer. It really was funny, you know?
Joe: Can I say something here, too? Because although the methodology you’re explaining, about the origin of the marketing and how it developed for both of us, we’ve talked about, these same sort of delivery systems can work today, also. A lot of people have abandoned a lot of offline marketing, a lot of direct mail. I was just in Anchorage, Alaska and I literally visited one of my professional cleaning clients, that they’re still running an ad in the Anchorage, Alaska phone book for carpet cleaners. And anyone that’s in Anchorage can probably pick up this phone book, and it’s all education–‐ based: call a 24–‐hour free, recorded message, reasons why. Of course, they have a drive to their website now, but she was telling me it’s still bringing in multiples to one of return. And most people have abandoned using Yellow Pages in exchange for something else. And she‘s like, “Oh, why would I ever quit? People still call me out of the phone book, we bring in multiples to what it costs.” So, yep. So continue, because if I keep talking, then it won’t be about you.
Dean: You’re going to take over. There you go.
Joe: You see that? You caught me there! I was like, “This is my time, and I can get right in there and position myself.”
Dean: I’m happy to share. The funny thing is, Joe, our carpet cleaner here in Florida, he came in and he was cleaning our carpets. There must have been some picture of you and I somewhere, or some picture that you had sent me of some kind of card or something, and our carpet cleaner is like, “Do you know Joe Polish?”
Joe: Seriously, how funny is that? Not knowing that you are Mr. Marketing Guru in your own right. Here’s a funny thing I’ve got to tell you really quick, and then go back to the Dean show. Joe Sugarman, who is the inventor/founder of BluBlocker Sunglasses, I mean just a marketing legend and just made hundreds of millions of dollars, sold $300–‐million alone of BluBlocker Sunglasses. He’s a good friend of mine. You know him, too. And he had a carpet cleaner, I don’t know, maybe 2 or 3 years ago, come out to his amazing home in Maui, he owns a couple of amazing beachfront houses in Maui, was cleaning his carpet and Joe said, “Do you know Joe Polish, by chance?” And he said the carpet cleaner all of a sudden like, “You know Joe Polish?” and started asking him all these questions. And Joe’s like going, “I felt ridiculous, because I’m thinking I’m the one that’s written all these books are marketing and everything,” and the guy was all excited to hear about me, and I’m like, “Yeah, that’s just how it works, Joe.”
Dean: That’s funny. It’s amazing.
Joe: Yeah. Yeah. And the carpet cleaning industry, I cannot recall once, being a guru in the carpet cleaning industry has ever gotten me a date; however, we’ll see, we’ll see. Continue on, my friend.
Dean: Alright, so I think that the distinction, because you were talking about something, how you can spend money, you can spend time, you can spend energy, that the shift that you have to make, the shift that I noticed in this, is that when you’re doing something like cold–‐ calling or like you were doing, handing out flyers and meeting people, and you’re physically doing something with your time, you’re trading your time for attracting business, it’s a big shift to spend time doing something that isn’t going to pay off today. Like putting that TV show together and putting that guide together took time away from time that we would normally have spent doing the prospecting. And you’re investing that time ahead of time, ahead of actually getting paid for it, because you can’t get that out into the world until it’s done, and it can’t make you money until it’s out into the world.
So, you’re investing all this time upfront, kind of invisibly to anybody. Nobody knows what you’re doing. Nobody sees any of that. But once you get that done, once you’re spending that time upfront, you’re now able to turn that loose and it continues to look for you. I call it the difference between a hamster wheel and an oil well. When you’re digging an oil well, or you’re setting up an oil well, you’ve got something that will continue to pump again, and again, and again, while you’re not on the wheel spinning it.
Joe: Oh, I like it. I like that analogy.
Dean: Yeah. You have to put all that effort in, and that’s time that you’re not on the hamster wheel, because the hamster wheel can be profitable, too. Doing the cold–‐calling worked, just like, I’m sure, handing out your flyers and meeting people worked, but it was very time–‐ consuming.
Joe: Here’s I think, along those lines, whenever I hear someone say something that I think is a really profound analogy or dictation or insight, I want to highlight it and emphasize it. I would encourage people to do a search on the Internet and find a picture, an image of a hamster wheel, and an image of an oil well. And when you’re spending your time, you want to really thinking about what’s the outcome that you want. If you’re cold–‐calling, or you’re doing anything where you’re not doing marketing which is selling in advance. The marketing that me and Dean are talking about is really selling in advance. Again, when we did the very first I Love Marketing Podcast, one of the ways that I described selling is selling is what you’re doing when you’re on the phone or face–‐to–‐face with somebody and marketing is what you do to get them on the phone or face–‐to–‐face with you.
And again, this can be in the virtual world, in your shopping cart, too: pre–‐interested, pre–‐ motivated, pre–‐qualified, and pre–‐disposed to do business with you. And in the instant gratification world that we live in, people are creatures of habit. And if they’re so used to cold–‐calling or doing things a certain way, in the beginning it’s very weird, it’s very hard psychologically for some people to say, “Oh, let me write a sales letter. Let me sit down and create some sort of multi step process to sift, sort and screen people, and let me stay on the hamster wheel.” But if you can step yourself off the hamster wheel and build yourself an oil well, once you’ve got it done, the amount of time and effort and energy that is going to save you in the long run, the more you’re going to attracted better clients. It would make no sense, once you really see it, to do it any other way. It changed my life, it changed your life, and it’s changed the lives of thousands of our clients and many people that have adopted this. And, I think it’s simply the most ethical, non–‐threatening way that you can set it up for a prospect or a buyer to do business with somebody.
Dean: Yeah, that whole time, at that time, all the effort that I had been putting in was really about my time in doing that hamster wheel prospecting. This was the first opportunity that I really got to see, of spending money, using money as a way to turn into more money. That was a big shift; because when you really get this idea of sending out your postcards instead of making phone calls, instead of making 100 phone calls you send out 1,000 postcards that are a lead–‐generation postcard offering something valuable to your prospects, just to get them to raise their hand, and seeing those people. Now, you’re only having to call the people who raised their hand. That was a huge breakthrough. Because you’d have to find one person who was friendly and cooperative and knew what they wanted. You’d have to maybe face as many as 20 rejections on the telephone in order to find that one person.
So, to have a stack of 11 of them in my hand, and be able to talk to 6 of them that first night, that were all A and B prospects, that was life–‐changing. I can still reconnect with that feeling that I had in my stomach. I was almost giddy about this. I knew I would never have to make another cold call again. Because it’s almost like you’re carrying that oil well, and now it’s almost like you’re doing this exploratory drilling because you’re doing all this stuff, you’re writing this postcard, you’re creating this, you’re taking them to the post office. You don’t have any idea whether it’s actually going to work yet. And when it does, it’s like it must be the same kind of thing as when you’re digging and you hit a gusher. You know you’ve got something that’s going to work again and again, and again, because that really is the greatest thing about marketing is if you solve the problem once, you’ve solved it for a very long time.
Joe: It totally feels like you’ve make a discovery that is life–‐changing. It’s better than winning an award, because you know you can win the award any darn time you want, once you’ve cracked the code. Gary Halbert always used to say, “The moment you get your first check in the mail, the moment someone responds to a sales letter, and the moment that you know that you can actually generate business without you physically being there to sell, all the better.” Gary kind of learned marketing by doing door–‐to–‐door sales of encyclopedias, the classic encyclopedia story. And he was a Pitney–‐Bowes salesperson. There was all kinds of different face–‐to–‐face selling things. And I think both me and you selling newspaper subscriptions and whatnot, I think, set the stage for us to kind of be in the world of selling. Although every single human being, even if they admit it or not, is a salesperson.
Like we talked about earlier, everything that comes out of your mouth is either going to attract or repel someone. It’s part of being able to parlay that into a system. I have the analogy of a slot machine, where if you can imagine having a slot machine, every time you put $1 in and pulled the handle, $5 pops back out, you want to shove dollars into that slot machine as frequently as humanly possible. And it really is like winning a lottery or a prize in an environment where the odds are in your favor. You’re not gambling, you’re literally intelligently going out there and mining for gold, and you know how to find the gold. You’re not just sifting mindlessly.
Most people are running around with no real strategy, except the power and persuasion of their desire and, in some cases, their desperation to get somebody to buy something because they need to survive. And I think in a lot of ways, Dean, both me and you probably figured it out in the beginning because we needed to. I know for me, my pursuit of marketing wasn’t some sort of inspiration–‐motivated desire. I had that in me. The real drive was I needed to survive; I need to eat. I wasn’t any good at running a business and simultaneously having time to go out and do cold–‐calling. I was living a pretty miserable sort of business existence, when I had my mind opened up to the fact that there’s a better way – a better way that’s not taught in schools, a better way that most people have no clue about, a better way that, if you go and ask most of your friends or your family or coworkers or whatever, not only will they have no clue what the hell you’re talking about, they’ll try to talk you out of doing it. What people are not up on, they’re down on.
And I want to throw that in here, just to prepare people if you are start going down this path; which, of course, we hope you do, because if you do you’ll love marketing too because, hey, how could you not love this, right? Once you go down this path, or decide to, in the beginning, you won’t only have to make some changes in how you go about prospecting instead of being the hamster on the wheel, you’re going to have to step off and put some time into create the oil well. People that don’t understand the psychology behind it, the method to the madness, they may tell you to forget it. “Oh, that won’t work,” and then they’ll try to talk you out of it; because what people are not up on, they’re down on. It’s just human nature. So, you need to be up on it for yourself, and learn it and test it and go from there. So continue on, Dean. I’m trying to take over this call again.
Dean: When you talk about this it’s like we came at it from different sides, like you were just describing how you really came out this kind of desperation and you really had to do something. And mine, it wasn’t out of desperation for me, as much as out of realizing that it really was a hamster wheel doing the cold–‐calling. It came really out of my, again, desire to do the easiest thing; so, realizing that the cold calling works and I was good at it and successful with it. I was finding that I was having to really kind of psych myself up to do it more. It wasn’t fun. It wasn’t something that I looked forward to. It was a disciplined effort. I really had to play a lot of games with myself to get myself to continue to do the cold calling. It’s absolutely predictable.
I knew that if I made 100 calls a day, that I was going to find between 5 and 10 good prospects, and I was committed to making those 100 calls. But I started realizing that I would start to avoid doing them, like any little thing would take me off that task. Anything could get in the way. I could be derailed from that. So, I really started playing games with myself, like I would pretend that I had a radio show and that I had to be on the air – that’s what I called it with my headset on, making my phone calls. I had to be on the air from 10:00 in the morning until 12:00. Just that game of setting it up like that kind of really made me block that time off. But it was a temporary fix. I don’t know whether you had an easy time going out and knocking on the doors and meeting people, like whether you enjoyed it. Did you enjoy it or did you find it like draining?
Joe: No. No. I thought it sucked. I probably convinced myself, because I was listening to a lot of motivational tapes and things like that. In a lot of ways, I think that’s one of the reasons that motivational tapes exist, because having a positive mental attitude is at least better when you’re doing drudgery than a negative mental attitude. However, when it comes to making money, having a positive mental attitude is no different than having a negative perspective, making money and doing things is doing things. We have an entire industry, I think, built up around keeping people excited for doing drudgery. And I never really liked it.
I liked it when I made a sale. But it’s kind of like the whole thing with shortcuts. There’s a lot of truth to the whole statement of “If it sounds too good to be true, it probably is.” And that if you want some fire, you’re going to have to put in the wood first, and you’re going to have to put in effort. You’re going to have to do work. Something doesn’t become an ELF business in the beginning, right off the top, unless you’re really lucky or you just totally get everything right. And once in a while, that happens. And I would just call that luck and, in some cases, obviously, a little bit of intelligence. But for the most part, there are shortcuts.
The best shortcut I ever learned for making money was learning direct response marketing. I have a good friend who’s been in a wheelchair for over 30 years. His name is Dave Kekich. I’ve interviewed him for Genius Network a few times. I’ve told a lot of people about him. He wrote these 100 credos called Kekich Credos, and one of them has a statement where, “Life’s easy if you live it the hard way, and hard if you live it the easy way.” You can use that analogy with exercise, as an example. Exercising is hard. But if you do it, it makes your life easier other ways.
Well, in marketing, learning and writing a sales letter, doing some of the setup is hard, but man does it make everything else easier once you do it. And not doing, you won’t have to learn this stuff, you won’t have to get into the psychology of your clients; you’re going to up and promiscuously spend money on different forms of client generation. And if you’re not spending money, you’re spending time, you’re spending energy, but it doesn’t make things easier. The easy stuff is what makes life hard in the beginning. It’s a lot easier to maintain momentum than it is to create it. Because after you got that first response, I bet your entire life just totally shifted.
Dean: Oh yeah, because I knew then that now I could just spend money; it was just a matter of how many of these do I want, because I knew that I could buy them. I think I ended up getting about 28 responses that first mailing. There were 1,500 postcards and 28 responses from that. So, it was a really great response and a great ROI. So, you really start thinking, and that was my first realization that, boy, it is a lot easier to spend money than it is to spend time.
Joe: Yes, exactly.
Dean: Because it’s really effortless to spend money. And it’s just as valuable. I knew that I could trade whatever it cost to send those 1,500 postcards and trade that for an ongoing supply of people who wanted to buy a home. The same thing was happening with the 6 Steps To Homeownership TV show and the seminars. The great thing is like every single thing that you do builds on the last, because the effort that you put into building this oil well is going to pay off long–‐term. So now, you’ve got all these things going for you that now, while I had that TV show going, now I was working on putting the postcards together to send to the apartment complexes.
So, now I had 2 oil wells working: I had the TV show that was on every other week, I had the postcards that I could send out at any time and get people calling in, and then I started working on another system that kind of became the real homerun of this. But what the next thing that you did, let’s say after you did the Consumer Awareness Guide? Did you find that now you could dedicate some time to doing additional things? Even though you didn’t know to call them oil wells at the time, did you have that sense that you were working on digging other oil wells?
Joe: Oh, yeah, totally. Because once you plant the seed, then it grows and all kinds of other things develop out of it, which I never would have known what those things would have been, until I started down the path and started doing it. But once I had the consumer awareness guide, then, like I mentioned, I paid a copywriter $250, additional of the $1,800 I’d already paid him, and had him take the consumer awareness guide script and turn it into a free recorded message, which I talked about, the script for 24–‐hour free recorded message. Then, I started putting that free recorded message on the back of my business cards, I put it on the side of my van with the magnetic sign in the beginning, until I actually had my van lettered with it, actual vinyl put on the van.
Then, I started going to carpet retailers and giving them stacks of consumer awareness guides and business reply little cards, where it said, “Request this free guide,” and blah, blah, blah. It would be perforated, where they actually could take one piece with them that had the consumer awareness message on it, and another bottom piece where they could fill out their address, drop it in the mail, and I would mail them a consumer awareness guide. And I would always recommend to the carpet retailer that, “Here’s a few consumer guides that you can have on hand, but please just have people them in them mail,” because I wanted the name, I wanted the lead.
Then, I started going and doing joint ventures with different people. One of my first joint ventures was the dry cleaner of clothing, where we offered a free room of carpet cleaning, up to 200 square feet, and then a carpet audit, which I believe I talked about that in one of the previous podcasts, and so I started doing that. I started doing monthly client newsletters. I created a free room offer for past clients, where I would send them a letter saying, “It’s been 6 months to a year since we cleaned your carpet.” I had letters that we would drop off in neighborhoods, and I would have them delivered on doorsteps, in neighborhoods where literally there was “no soliciting or entry.” And I wasn’t doing this. I was paying other people to do it. A lot of people have their kids do it, other people hire delivery services to do it.
I remember a pizza delivery place that actually put the flyer on top of their pizza boxes, that I would pay them to do that. So I went from not even ever spending money on direct mail to spending a lot of money on direct mailing. And to go to your point about people spending money, to this day, and I think it is the most idiotic justification of stupidity that exists from any business owners is they’ll be like, “Oh, I don’t spend any money on advertising.” They brag about it.
Dean: Well, I was just saying that’s the thing: they brag about it.
Joe: Yeah, as if that is an accomplishment. The only time that would be an accomplishment, of not spending money on advertising, is if you’re spending money on advertising that is not working. But if you actually spent $1,000 on a direct mail campaign, an Internet campaign, a telemarketing campaign, it doesn’t matter what it is, it could be direct response involving sales copy and reason–‐why themes, or it could be literally manual marketing, if you can cut a check and it cost you $1,000 and it brings in 1,500 or it brings in 2,000 or it brings in 10,000, why would you not do that? One of the dumbest things that’s taught is like a marketing budget or an advertising budget, in some of the stuff.
I remember in business school, a 10% budget for marketing. Well, the only time to budget your marketing is when it doesn’t work, so you don’t broke so quickly. If you’re running a business that’s bringing in say $5,000 a month in sales, or let’s say $10,000 a month in sales, why the hell would you budget 10% of that, say $1,000 of your revenue is all you can spend on marketing, if you spent the $1,000 and it brought in like $5,000? I’d spend as much as humanly possible, that you can scale and that you can deliver the business without dropping the ball and having it result in bad delivery of your products or services to people. It’s insane, some of the crap that people believe and some of the stupid justifications they have for not getting themselves rich.
Dean: Yeah, that’s one of the questions that I always ask people: “What are you doing with your money?” The kind of person who is going to say, “Well, I don’t spend any money on advertising,” like they’re bragging about it, I would almost expect that logic, to say, “Well, yeah, bury a hole in the backyard and I just throw my money in that to keep it safe.”
Dean: It’s that same kind of logic. It doesn’t make any sense. And you think about what else could you do with money that has the potential to 3 times, 5 times, 10 times your investment in literally 90 days? Most businesses have a short sort of turnaround time, right? Like you can invest money in marketing today, and within 3 or 4 months you’re going to get the return on that money.
Joe: Oh yeah. People will go out and they’ll finance cars, they’ll spend money on everything from flat screen TV’s to lessons for this or to this sort of gadget or this device, and they’re just so chincy when it comes to spending any sort of money on marketing. There’s nothing that I am aware of that could bring a higher return than that. There’s no investment; again, except for maybe these one-in-a‐million sort of things, where someone invests money in the very beginning of a startup and they get super–‐rich or whatever. But, that’s all guessing, for the most part. And this is scientific. If you follow direct response principles, the beauty of this type of marketing is it’s trackable, it’s testable, it makes sense, it’s not hit or miss. There’s response mechanisms. The stuff that we use, when we do our tracking, we know to the penny if it produced a result or it didn’t. You just don’t have those advantages.
Dean: Yeah, I try and show people that math. I like to think about if you were a rock star investor and you could annually yield 20% on your money, you would be among the rock stars – Warren Buffett averages less than 20%, annually – if you look at the idea of even the most mediocre direct response campaign is going to yield more than 20%.
Joe: Right, right, right. Exactly.
Dean: It’s funny how people would get excited about a stock that goes up 20% and feels like they’re winning, yet not invest money in something that could 3, 5, 10 times.
Joe: Well, when I first learn marketing. When I got my first Gary Halbert newsletter, I was $30,000 in debt, a small carpet cleaning company, back in 1992. I’d been working my butt off for a couple years, trying to figure out how to make that business work, working long hours. I was not just sitting around, I was working really hard. I was trying to figure it out. And within a 6–‐month period, I went from $2,100 a month in gross revenue to over $12,000 a month with a single truck. I hired a part–‐time person. $2,000 to over $12,000 in a 6–‐month period? What investment could I have ever done that would have done that? Plus, I didn’t have any money to put any money into an investment. It’s not like I was sitting on $50,000 or $100,000. I was $30,000 in debt. So, I had to parlay.
So I started out consumer awareness guides. A lot of this, even though I created the copy, I paid for it. I went into debt to do that. But I believed in it. And, more importantly, I was always focusing on the prospect, not on me. Image advertising, which is the complete opposite of direct response, it’s such ego–‐based advertising. And I think one of the biggest enemies of people using successful marketing is they have to give up the love affair with their logo, their brand, their perception of what they think they sell, and start really thinking about creating value for other people. What does the prospect want? What are they afraid of? Why should it matter to them? How can you make an offer that is so irresistible, that they can’t say no? How can you back it up with a powerful guarantee or some premise that literally obliterates the objections that they have for mine? Remember, if people want what you’re selling, the only thing that stands in the way of them buying it from you or someone else is fear. Remove the fear, and they will buy. This sort of marketing is really designed to remove a lot of the fears. And fear is they don’t understand what you’re selling, they don’t understand the difference between you and somebody else, they don’t know if they can trust you.
So, when people listen to your story of how you literally interacted with real estate prospects, what you were doing was you were robotically creating trust and rapport before they ever met you, and you were totally setting the stage. You were creating a selling environment. And that’s what this does. It allows you to create the environment that makes it easy, lucrative, and fun for people to do business with you. And that’s what you want, no matter what business you’re in. And even if you’re in a business like medical services, a doctor still markets medical services. A model markets her beauty, a carpet cleaner markets carpet cleaning. A graphic designer markets design.
So, whatever business you’re in, you have a lot of people that just don’t know why they should do business with you or even use you at all. Someone could go to a grocery store and rent a Rug Doctor to clean their carpets, versus hiring a professional, and they actually do good marketing and actually convince people that that’s a superior way of cleaning carpets versus a real professional; which, of course, is not the case. It’s a joke. These carpet cleaners that are spending $15,000 to $20,000 on truck mounts, and getting educated on chemistry and stuff, they wouldn’t be doing that if you could get the same sort of results off some do‐it‐yourself thing that you can rent at Home Depot, or whatever.
But the truth is that unless the carpet cleaner’s going to do a good job of educating his prospect, they’re going to lose business to people buying machines on infomercials on television that are a crappy, dumb way to clean your carpets. But the consumer doesn’t know any better, until someone shows up and explains to them. And no matter what business you’re in, it still applies. What else, Dean, would you say about your story and insights, and going back to the E Myth, that you would kind of want to leave the listeners with on this episode of this podcast, and then maybe some action steps that you would recommend for them?
Dean: Yeah, yeah, because what I skipped in there, and I think this is a natural progression and I’m interested to hear whether you went through this too, is that between making the cold calls, which I was doing and doing successfully, and experimenting with the direct response and having sort of a hit on my first attempt at that, what happened in between that was a period of time where, before I knew about direct response marketing, I was still kind of thinking, “I’m going to start using some of my money now to generate business.” But my initial thought was to spend that money on getting my name out there, on getting famous. It was really this idea of spending some money so that if people who I was, that I would get more business from that.
So, I started spending image ads in the newspaper and doing things that didn’t have any kind of direct response to them, but I contracted to take the front page of the real estate section for a year. So it was really like pole positioned, being the first realtor that people see when they get the Wednesday real estate section – or the weekend one, couldn’t do that on the Wednesday, on the weekend one – that brought me a lot of fame. People would recognize me, but it didn’t directly translate into more people calling me. So, it was becoming very expensive to do that and I was having to work a little bit harder at the cold–‐calling, to sort of keep up and make the money to continue paying for the ads and stuff. But did you go through a phase like that? What was the name of your carpet cleaning business, by the way?
Joe: Well, in the beginning it was Superior Carpet Care. And then a person, another company, opened up a Superior Carpet Care, although I had registered d/b/a with the county recorder here in Arizona. I had the name registered. But this company started using it, and they were like a bait–‐and–‐switch company. So, in the process of fighting, legal letters back and forth, even though you’re in the right if someone tries to basically knock you off and you want to protect your name, you still have to spend, money, and energy on it. I ended up changing the company name to Fiber Tech, because I had a good friend in California that had that name, and he gave me all of the graphics that were really cool and modern and stuff.
Just so you know, I didn’t really care all that much and, to this day, really don’t. I have a full‐time, brilliant, graphic designer that works for me. We actually have Piranha Marketing design, where we actually do full‐blown design for companies and stuff. We do design that enhances and incorporates copy and direct response. We don’t do image just for the sake of image. There’s no reason to do any sort of illustrations or photos or graphics or logos, if you don’t have anything else that has substance to it. So I changed the name to Fiber Tech, I thought it was really cool, and that was the name that I was using. In terms of kind of what you’re saying, I certainly did probably, over the years, and probably even back then, once I really kind of took on direct response, I stayed pretty close to it, because I spent many years being broke. So, once I found something that worked, my whole thing was the definition of insanity is doing the same thing over and over.
Dean: Definitely. You’re absolutely right. Once I discovered direct response, everything changed, but this was on my path before I discovered direct response. And I don’t think that I could have appreciated direct response as much if I didn’t have that experience of the institutional advertising not working.
Joe: Well, let me just jump in and interrupt you. There was a Money Mailer type, it was like a Valpak, Money Mailer type mailing. It wasn’t either one of these companies.
Dean: That’s what I was looking for, doing anything like that. Yeah.
Joe: Yeah, and I actually signed a 6–‐month contract with them and like literally, the first week I did it, it didn’t work. The response was, “Well, the reason it didn’t work is people need to see your ad over and over again, so they know that you’re a real company and they recognize you. And they’re saying that loosely based on truth. The truth is that repetition works, to a certain degree. But you can’t repeat zeros. If it zeros out or you’re going in the negative, seeing it over and over again is not going to dramatically shift response. So, the things to repeat are the things that actually are working, or at least breaking even. Because if you’re acquiring a client and at least breaking even with referrals and backend and repeat business, just the fact that you’ve acquired a client.
In some cases, there are things in my business that will I go negative in the acquisition of a client, because I know I can make it up in the backend. and we should talk about that in a future broadcast. We’ll talk about the first sale, what to do after that, stick strategies. All those things, we’ll continually talk about on I Love Marketing. However, I believe that the reason this wasn’t working is because people hadn’t seen it enough, as if like in the case of carpet cleaning, Mrs. Jones is going to her calendar, holding my coupon and saying, “Well, as soon as I get 10 more of these coupons and I know this carpet cleaner spent money on them all and know that’s a trustworthy company, then I’ll do business with them.” So, these advertising people, they lie or they’re just ignorant. And there’s a huge difference between someone that’s really effective at selling advertising, versus creating advertising that works. So, people take a lot of advice from people that are out there selling customer–‐generating methodologies in advertising and stuff that don’t know the first damn thing about how to create a promotion for you that will generate business for you. Not in all cases, but in many cases.
Dean: That’s the big shift, is realizing that direct response is not about you, it’s about them, and really focusing on that.
Joe: Totally. And people have to put their ego down. They have to get rid of their pre–‐ conceived notions. I have a really good friend here – I won’t even say the business he’s in because I’m going make him listen to the I Love Marketing podcast anyway, so I don’t want to bash him too much – running a huge company, I mean like one of the biggest in the valley, in Phoenix, Arizona, a gigantic Internet presence, too, and this guy just insists on having his damn dog on his website and on the storefront and everything in this business he’s in. And it’s cute, and he’s learned some direct response things from me, but he’s not fully embraced it. It’s really hard to let go of that ego stuff. I’m like, “Dude, you’re not Budweiser, man.”
Dean: I think people have to make the choice whether their advertising is to entertain them or to sustain them. And there’s a big difference. When they do an ad and they want to be clever, and they want to put their slogan or their clever, witty saying, or their picture of their dog, or call themselves some funny name where you’re shining the spotlight on the business, on you, it’s completely the opposite. Like both of us, the first thing that really worked for us was nothing about us. You did the consumer awareness guide for people about carpet cleaning, and I did one for people about buying their first home. And the truth is that could work in any business, in any business where people have to make a rational decision. I love what you said in a previous podcast, about people don’t want to make irrational, stupid decisions, they want to make rational, smart decisions. Right?
Joe: Yeah, exactly.
Dean: That’s true in any business. In any business. So if we just kind of looked behind the curtain at that and see what the winning structure is that was in play on both of those, I think that will be a great place to pick up for our next episode, is to kind of like break it down and look at the elements that could be applied to any business. And we could maybe brainstorm how we would apply it. Let’s just name a bunch a businesses and kind of apply that same winning formula, because we’re going to have people are in any business you can imagine listening to this. We don’t want to get to where people think, “Yeah, well that works in real estate and that works in carpet cleaning, but I’m in the massage business,” or, “I’m a chiropractor.” It’s like the mechanics or the underlying structure of it is really what makes it work. You and I, we were influenced by the same things, it was just what did we apply it to? And it’s amazing how everything we’ve talked about so far is before we ever met. It got us on the right path, that’s what kind of led us to each other, in a way.
Joe: Yeah, exactly, yeah it was the same area of interest in marketing, and that’s how we met. We met through being in this business. Yeah, that’s a great place to lead off. I want people to remember that I had to figure out how to use direct response in an industry selling something that nobody wants to buy. No consumer really looks forward to hiring a carpet cleaner. Kind of like one of those unnecessary things that you do because you own the stuff. It’s about as exciting as getting your oil changed in your car or, for some people, going to the Department of Motor Vehicles and renewing their license. It’s not something that you’re jumping up and, “I can’t wait to get my carpets cleaned! I can’t wait until the kids go back to school and the carpets all crappy.” People aren’t thinking that.
So, if anyone listening has anything remotely more exciting than carpet cleaning, or real estate or whatever, they can use these principles, because it’s the same stuff that I’ve taught to Bill Philips. Early on in my carpet cleaning business, he was one of my first big clients that used direct response, the same sort of strategies in the whole fitness and exercise industry. This stuff works in numerous industries, no matter what. It just simply does. So, as a listener, don’t ever think that your business is different. All human beings respond to the 5 basic human stimuli as every other human being. I’ll start sounding like Jay Abraham now. But basically, sight, sound, touch, taste, smell.
Human beings are human beings. They want to make an informed, intelligent decision. They want to know what it is they’re purchasing. They all have fears and concerns, who can they trust, and that’s what this stuff does. So, Dean, thank you for sharing. We’ve known each other for many, many years. And just by doing these podcasts, I learn more about you every day; which, in some cases is scary, in other cases it’s really good and instructional.
Dean: Well, I look forward to next week. That will be a great time to break it down. We’ll talk about the formula, and we’ll stop focusing on us, and we’ll start focusing on them.
Joe: And remind me, too, because I have high levels of entrepreneurial ADD, so I’ll leave it up to you to remind me.
Dean: Oh I will. Absolutely.
Dean: Another good week, Joe.
Joe: Awesome. Thank you, Dean. Thanks everyone. iLoveMarketing.com.