The one about converting leads
- How Dean and Joe define “lead conversion”
- Dean shares how cookies can make you rich
- How to think about your leads to make the most money
- PLUS: a $3 million dollar celebrity cliff hanger ending…
Dean: Hello, everybody, it’s Dean Jackson.
Joe: And Joe Polish.
Dean: Here we are.
Joe: Yeah. Dean, now, you were saying you wanted to hum the theme song for I Love Marketing? Do you want to try that, or just, you don’t want to embarrass yourself?
Dean: Dude, I think we should put it on iTunes, and let the listeners decide. Let’s load it up and see if we can get a hit single.
Joe: Okay. Well, we’ll think about that. We’ll let the listeners decide.
Dean: There we go.
Joe: And we want everyone to rate this very highly, if you consider the conversation to contain insight and strategies and ideas that are worth a very high rating on iTunes.
Dean: High rating and comments, that would be good, too.
Joe: Yes. Yes, comments, of course. Alright, what are we going to talk about today that’s going to help all of our listeners?
Dean: Let’s talk about them. So last call, we were talking about how to generate leads. We were talking about using the consumer awareness guides or education guides, or things that are appealing to people, to get them to raise their hand and identify themselves. And you had done that with your “Consumer’s Guide To Carpet Cleaning,” and I had done the same thing with my guide to “6 Steps To Home Ownership,” and my “Guide to Halton Hills Real Estate Prices.”
And all of those things are a great way to get your prospects to identify themselves, and that’s just kind of step one in the whole process, really. You’ve probably seen this a lot, too, that people create a good ad, they create a good offer, and they start generating a bunch of leads, but they don’t have a conversion process in place to handle all those leads and to turn them into money, ultimately.
Joe: Yeah, exactly. The way I would kind of phrase this is think of the marketing that you’re doing, be it consumer awareness guides or free reports, or any sort of educational information that would be useful, whatever offered as the bait; because, as a business owner, you’re fishing. And you’re only going to catch the right type of fish with the right type of bait, if you’re actually really fishing. And if you try to fish for bass with bait that only a trout would bite on, then you’re not going to make the mark, no matter how good your intentions are, no matter how great your fishing pole is, and your hook, and your bait. It’s got to be a message to market match, and that’s the deal.
So, think of the first step as baiting the hook with something that the fish is going to want to bite on. And as I say this analogy, it’s not to degrade clients like they’re fish, of course. I don’t want anyone getting all hurtful about that. The point is it’s an analogy, and you are fishing, and you’re trying to attract certain people that are interested in certain things. You’ve got to have the right bait and you’ve got to fish in the right pond. There’s a lot of steps to it, in order to reel them in and keep them on the hook. Because hooking them, and getting their interest, and getting their attention is only one part of the puzzle. You then need to convert them, and that’s what we’re going to talk about today.
Dean: Absolutely. So, let’s start by defining lead conversion. I don’t think you and I have ever talked about this, so I’m going to be interested to hear your definition too. But for me, what I look at, in the lead conversion process is, getting somebody to take the next step. A lot of times, people think lead conversion is turning it into money, or turning them into clients, or turning them into listings if you’re a real estate agent, or carpet cleaning jobs if you’re a carpet cleaner. That may be the end result that we’re looking for, but the path to get there has to really go one step at a time. It has to take the next step.
So, for me, when I look at that lead conversion, I always look at the big picture and see what’s the next easiest step that somebody needs to take on that path, to get to where I ultimately want to go? So, if we’re beginning with the end in mind, and you’re a carpet cleaner, your end result is that you want to be in somebody’s house, cleaning their carpets, and they’re paying you to do that. That would be a converted lead. For a real estate agent, it might be that you are putting your For Sale sign out in front of their lawn. That’s the ultimate goal of the lead conversion. Or you’ve got a buyer that you’re out showing homes to. That would be a conversion goal. But knowing that that’s the end result, you kind of only can look at what’s the next step that we can do to move along that path?
Joe: Yes. And that’s a great point, because I think a lot of marketers miss many of the steps. And if you miss a lot of the steps, you’re going to stumble down the stairs. You’re not going to make it. I kind of look at it, really, in the same way. Every sort of sale, selling is rarely an event, it’s a process. And there are many different steps in certain processes. You want to take the shortest path to the sale, but you don’t want to make the path so short that the sale ends up not being made. And what I mean by that, let me give you an example in the carpet cleaning industry.
Way back in the beginning, when I used to do a lot of personal critiques of ads and promotions, and I’d actually do consultations where I would include consultation coupons with my kit offering that I made, I’ve talked to hundreds of cleaners. The ones that would not do well with my information, that intuitively didn’t really kind of get it – I shouldn’t even say intuitively, because I think I spell it out pretty easy, in my materials, how to actually go from step A to step B – what would happen is they’d try to shorten the process. Where I’d say, “Run a free recorded message. The only purpose of the ad is to get them to call a free recorded message,” instead of just driving a client to a free recorded message and request a consumer awareness guide, they would try to start selling the cleaning services in the ad, before someone even called the free recorded message.
Or they would try to bypass the free recorded message entirely, and just have them call directly, and talk to a live person so they could close the job. And they would think that they’re actually doing what they needed to do, because they had the right headline and the right copy, and the right offer, but then they’d leave out like the free recorded message. And it’s like, “You know, you’ve got to kind of put that in there. Don’t expect the bread to rise if you don’t include the yeast.” All of these things is what makes it work. Every ingredient is necessary, just don’t add any unnecessary ingredients. So, another thing that people would do, if I could get them to run a free recorded message, they would try to start selling too soon in the free recorded message. Before they built trust and rapport, and educate the client, and give them something to value, they’d immediately go into to the pitch.
So, that would be an example of how you can really shoot yourself in the foot, thinking you’re trying to just make the sale. The way that I look at it is kind of like you’re in a boxing match. Every touch point, the goal of a boxing match is to knock the person out. The goal of a sale is to have enough touch points that the person buys from you, they end up doing business with you. So, in the cleaning industry, I don’t just have them send out a consumer awareness guide. It makes an offer for a free room of carpet cleaning, which is an irresistible offer, one room up to 200 square feet, for homeowners. I make the distinction. I suggest to my guys don’t offer it to people that are just renting, because they don’t have an investment in their carpeting, like someone that actually owns the home. And, offer a risk–‐free, 100%–‐guaranteed – if they buy more – free room offer.
So, you offer a free room and a carpet audit. And the carpet audit is a presentation, my process that I invented, where they go into the home, they evaluate the condition of the carpet, they ask a lot of questions, and they give a free room of cleaning so people can actually try their services. And if they do want additional services while the cleaner is there giving a carpet audit, they’ll measure their areas and let them know. But, you’re really going in there with a free, irresistible offer. You’re literally putting your money where your mouth is by letting people try your services. And if cleaners actually do the process that I suggest, not only is it a great hook but it’s all tied into a consumer awareness guide, consumer awareness message, which is a 24–‐ hour free recorded message, video that can be on their website, video that they email people. There’s a lot of different ways that they can get people into the process, but it accumulates with a specific offer and a way to present themselves. And if they do that, most people end up giving them money.
Dean: But the only purpose, I love what you’re talking about with the consumer awareness guide, that you’re making an offer for something very specific, the carpet audit. So, the goal, the conversion goal of each step in that process is to only take the next step. Like you said, the ad, the only purpose is to get them to call and listen to the recorded message. And the only purpose of the recorded message is to get them to leave their contact information so you can send them the Consumer Guide To Carpet Cleaning. And then, the only purpose of the guide is to get them to call you to invite you over to do a carpet audit for them, and give them their free room of cleaning. That’s a pretty compelling offer, right? So it’s a multi–‐step process all along the way. But, you’ve got to know where that was headed.
Because, like you said, when you go, the purpose of the carpet audit and the free room of carpet is to show them, and build their desire to get you to clean their carpets when they’re there. You’re not talking about anything other than the next step, and it’s all positioned as something that is valuable to them.
Joe: Right. Exactly. And it’s all positioned that way, and it’s very strategic. And, as far as I’m concerned, it’s very ethical. You’re educating people in advance, by using education–‐based marketing. In my case, with teaching the cleaners, they’re offering a free room of carpet cleaning, so there’s no cost or obligation of any kind. They’re letting people give a legitimate trial, not like a little sample where they’re going to clean a square area in the middle of their carpet, because there are companies in the cleaning industry that will tape off a 2–‐foot by 2–‐foot area, and they’ll clean it, and people will see, “Here’s a before and after.” And I actually have seen that demonstration.
But I was like, “I want to do something that I think is more ethical, not just leaving a square area in the middle of someone’s living room, because then they’re forced to have to clean it so it doesn’t look weird, but really give people a legitimate trial. And if they like it, they can do more. And if they don’t think it’s awesome, they just got the room of carpet cleaning done for free.” And, while they’re at it, the carpet audit process evaluates the condition of their carpet, how many pets, how many adults are living in the home. Does anyone smoke? How often do they vacuum? What type of vacuum do they use? What type of filtration? Are there any particular spots and stains that are of particular annoyance? Are there any wear areas that cleaning alone, it’s kind of like the knees on your blue jeans, no matter how much you wash them, they’re still going to stand out?
So, people get a real education on the condition of their carpet and what they can do to maintain it. And the end of the carpet audit is a prescription on how to actually, “Mr. and Mrs. Jones, if you continue with maintaining your carpet the way that it is, here’s what you can expect. And if you do what I suggest, here’s what you can expect. And here’s what we charge.” And then, I have them back it up with a 100% money–‐back guarantee, because the free room of carpet cleaning is, for one, designed to create a tremendous offer. It’s irresistible. Secondly, it’s to create a lot of value.
And by doing so, you create reciprocity. And whenever you do something and you give somebody something of value, they naturally want to respond. You’ve been in stores like Costco, or certain grocery stores that will have free samples of food items, and they give people a little taste. They give people a trial. And while they’re standing there, they’re selling the stuff too. And if people like it, they will buy it. But the other thing is, they’re really playing off the fact that if you give something to somebody, a lot of times they feel guilty if they don’t buy from you. So, my whole thing is using it in a way that really is ethical, not just guilting people into buying stuff, but give them something really legitimate. And if you do, you totally engage them in reciprocity.
And Robert Cialdini wrote a great book called Influence, years ago. It’s one of his first books that he wrote, talking about reciprocity and different ways to influence in depth. He’s a friend of mine. I’ve interviewed him before for Genius Network, and that sort of stuff. But, you’re engaging psychological triggers, which our friend Joe Sugarman uses the same sort of thing, where you just instill reciprocity with people.
Dean: You talked about a boxing match, and the goal is to knock your opponent out. Ultimately, that means like a combination of jabs and punches, and whatever else, whatever it’s going to take. And the implication is that it’s not just one step, it’s a multi–‐step process. I always use an analogy of thinking like a chess master, where the best chess players in the world can look at a board and see exactly where the game is headed, and know that this move is going to force them to go into this move, so I can move here, and they move here, and I move here, and checkmate. And they know that way ahead of time.
So, it’s just like you know, with the carpet audit, you know this ad is going to get them to call this phone number. This phone number’s going to get them to leave their contact information. When I’ve got their contact information, I’m going to send them the package, which is going to get them to call me, which is going to get me into their house, which is going to get me to do the free room of carpet cleaning, and that’s going to end up, when I present all the options from the carpet audit, they’re going to end up as a client.
So, all the way down the line, you know exactly where it’s going to end up. But one of the things I want to kind of point out is that each step along the way is completely engineered before you even do the first step. You’re not running that ad and hoping for the best. You know where it’s all headed, even though they can only see the first part of the journey. They’ve never been on it, but each step is designed to only get them to take the next step.
Joe: Exactly. Like dominos. You just know that if you place them in the right way, and you just tap one, the rest of them are going to go.
Dean: And you know what was a good analogy that Gary Halbert shared, that I got it on a real deep level? You’ve heard him talk about how the tugboats can move big ships. They start out by firing just a small line up over the hull, and then that pulls in, and it’s a little bit thicker rope, and then a bigger rope still. And then they keep pulling and it turns into the big rope that they tie up to the boat. And that little tugboat can now move that big boat. But it all started with this little line over the bow.
Joe: Yeah. Exactly, which is a great point. It’s a lot easier to maintain momentum, than it is to create it. You said the chain is only as strong as the weakest link. And if you can get all of your links to be stronger, or at least strong enough to where the chain is not going to break, then you will make a full sale. Did I say sail or sale? It’s like, it’s kind of funny. You could say S-A-I-L, like sailing, or S‐A‐L‐E. So, the thing to really think about is do you have all of the links needed in the chain in order for it to do the job? And what parts of the chain need to be strengthened, so you’re not losing sales? Because a lot of people will get the ad right, they’ll get the offer right, but they end up missing something or screwing something up, and then they’re, “Aw, this doesn’t work;” when, a lot of times, it’s just minor tweakage.
One of the people that’s in my 25K group is the founders of BeachBody.Com. They sell P90X videos, fantastic exercise training videos on television, Insanity, lots of different things that BeachBody’s done. TurboJam. I think one of your favorite dance videos is on there, Dean. But anyway, when they first did the P90X infomercials, Carl Dykler, who’s the CEO, he was telling me that they just kept tweaking it and tweaking it because, in the beginning, it wasn’t converting. But he had a really strong belief in the fact that they could actually sell exercise videos that were really hard workouts, because so much of the infomercial world in exercise is selling a bunch of crappy equipment, knowing that the person’s never going to use it. They’re going to hang their clothes on it, and, “Who cares? We’re just going to sell a bunch of it. We don’t even care if it’s really decent. We just want to sell a bunch of crap with a compelling celebrity endorsement, or something.” And the guys at BeachBody are like, “We’re going to sell real workouts for people that actually really work out, and if they do it, they’re going to get real results. But this is not easy. This is not – this is a very difficult workout.”
And so they were up against how do you actually sell training videos on exercise that it’s really hard work? People, they’re not going to be able to sit on the sofa and pretend that they’re going to lose all this weight, as are so many scam diet products. And what he kept doing, though, is he kept tweaking the testimonials, and the way that they explain it, over and over, and over again. And it wasn’t working, in the beginning. And they spent a fortune tweaking and testing. And now, it’s a multi‐ hundred‐million‐dollar‐a‐year company, and they’ve sold over 2 million units, as of time that we’re doing this recording, of P90X, as an example. And that all comes from testing many, many different things.
So, if you start looking at whatever it is you’re selling, be very scientific about it, be willing to try different things, and paying attention to it, and once you figure out, like you’d mentioned, Dean, in the cleaning industry, I know the very best offer in the world that a professional carpet cleaner can make to the right list, the very best offer in the world, is a free room of carpet cleaning, and a carpet audit, bar none. I’ve tested this thousands of times. Hundreds of millions of dollars of cleaning and restoration jobs have been sold as a result of using my systems. And what’s funny about it is I’ve been offering this sort of stuff to that industry since 1994, and still a tiny percentage of the carpet cleaners in the world, for one, even use it or, secondly, know about it or are willing to do it.
So there’s always a gigantic advantage for people to grasp this marketing; because although it’s out there, I can tell you, as we’re sitting here doing this podcast, there are thousands of carpet cleaners in the world that are struggling, that are broke, that don’t know how to convert jobs, that don’t know how to attract clients. And they could get my stuff and use it, but they don’t. And part of it is because they just don’t have enough of an emphasis on it. This is sort of an aside. We’ve covered this on some of the calls. But I’d like to ask you why do you think that there is such a resistance or devaluing of the importance of not only just marketing and selling, but direct response marketing, the type where me and you are talking about this, where there’s multi–‐steps?
Dean: Yeah. I know exactly why. It’s wired. It’s hardwired in us that, even in direct response, ultimately there’s a fear of rejection, that we don’t want to be rejected. We don’t want to be pushy. We don’t want to be distasteful. We don’t want to come across as a salesman or anything like that, for any number of reasons. But the bottom line is that ultimately our fear of making an offer. I use the example, and I imagine the same thing would apply with the carpet cleaners, but with the real estate agents, with any kind of business, people will run a direct response ad, and they’ll offer a free report to somebody, or a consumer awareness guide, and the people will call and ask for it. And they’ll mail out the guide, and they’ll maybe send a cover letter along with it.
And the cover letter might say, “Here’s the report that you asked for. If you have any needs for carpet cleaning, or you have any needs for real estate, I’d be more than happy to help you. Feel free to give me a call. Here’s my phone number.” They’re not making any offer. They’re making themselves available, which is different than making an offer. See making themselves available is putting the oneness on your prospect to propose an offer. They have to say, “Could you come over and give me an estimate on cleaning my carpets?” Or they have to say, “Could you show me some homes this weekend?” And that’s what people are waiting for. Businesspeople who are running direct response for the first time, or are doing things like that, I see it again and again, and again, is they’re afraid to make an offer, but they want to be available.
Here’s the example that I use. I just say to people, “If I were to invite you over to my house, and to bring you into my living room, and to say to you, ‘Joe, I’m happy you’re here. If there’s anything you want to eat or drink, there’s lots of stuff in the fridge. Just go ahead and help yourself. And I’ll be over here in the other room, if you need anything,” that’s the general idea. If you take it to that kind of an example, of what business people are saying to people when they’re running direct response ads, but they’re not making offers to people. They’re saying, “I’m available. Anything you want, I can help you with.” But now, it’s putting the oneness on you to actually make the first move. And nobody wants to make that first move. We’ve been conditioned, societally, that we don’t want to impose on people. So, while you’re sitting there in my living room, and maybe you’re not the best example because you probably would go get stuff from my fridge…
Joe: Oh. Yeah, dude. I would not only go into your refrigerator, I would, like, drink everything in there. I would probably just give it away. I’d probably sell it to people. I would even sell your refrigerator, if I was in there your house, and I had free reign of the place.
Dean: But most people…
Joe: But most people have manners, and are polite, and would be fearful to do that, because it feels like imposing. First off, what you’re saying, I hope everyone really gets what you just said. It is so critical, because it’s such an important thing. You don’t leave it up to the buyer. A lot of people, they’re trying to be nice. They’re trying to be polite. You’re not helping the buyer. All you’re doing is you’re confusing them more, because you’re kind of weaseling your way out of trying to ask for a sale. It’s like the whole term of selling on your heels. You’re afraid to actually ask them to make a specific action. And every single person that says, “Visit our website,” is kind of doing the same thing. What the hell does “Visit our website mean?” Now, in some cases…
Dean: Right. “Visit our website.”
Joe: Yeah. Why should I visit it? Is there going to be a report there that’s going to teach me something that’s really useful? Am I going to be able to get a free song that I’m going to download? What exactly am visiting your site for? Literally, it’s a weasel way of trying to sell something.
Dean: Yeah, without the potential for being rejected. Right? Because they’re saying, “If there’s anything that I can help you with, feel free to give me a call. I’m available anytime.” All those things where you’re making yourself available is different than making an offer. So, I always contrast that with imagine that same scenario, but I bring you into the living room, I go into the kitchen, and I come out with a plate of freshly–‐baked cookies. And I go right up to you with the cookies, and I say, “Hey, Joe, would you like a cookie?” Now, I’m making that offer to you. I’ve got the cookies right there, and it would be difficult for you not to take the cookie, because I’ve clearly gone out of my way. I’ve already got the cookie. You’re not going to leave me hanging there, right? See, the same societal upbringing that doesn’t allow us to go get something from somebody’s fridge or impose on somebody, also it forces us to be polite. The polite thing to do, if I come up to you with a plate of freshly‐baked cookies and offer you one, is for you to take one.
Dean: It would be more difficult for you to not take the cookie, than it would for you to actually take the cookie, even if it wasn’t your favorite kind of cookie.
Joe: Yeah. I just have to comment on it, that that’s a great point. See, what a lot of people do by making themselves available or “feel free,” instead of creating scarcity, which is the best thing that a direct response sort of promotion could include at the right time, what they’re doing is they’re not only not utilizing the principle of scarcity, they’re actually making themselves so available that there’s no urgency, there’s no whatever, and it’s kind of confusing. Like, well, ‘If I go to the fridge, are there going to be cookies there? Is there going to be milk? Are there going to be pickles? What exactly am I looking for?”
Dean: Yeah. And if I’m even casual about it, like saying, “Later, if you want a cookie, there’s some cookies over here, if you want some,” kind of thing, I’m downplaying it. But if I bring it right up to you, and I’ve got them right there, and I’ve just baked them, and they look warm, and it’s like now, right in front of you, I’m asking you a question, and then I’m shutting up, “Oh, yeah! I’d like a cookie. These are delicious.” And then I know, because you took the cookie, that in a couple of minutes when I come out with the milk, you’re going to want the milk, too.
Dean: And so that whole thing of thinking through what would be the cookie that you could offer when you’ve got somebody in your living room. Those metaphors, we’re using these things like illustrations of you’ve used the ad to get somebody to come into your living room here, and now how are you going to communicate with them that’s going to lead to the next step? And it’s like you really get it when you realize that’s what Jay Abraham talks about when he’s saying that people are silently begging to be led. And that’s the truth. Everybody is waiting for a leader to step up and lead them in the direction that they need to go. It’s always easier to follow somebody’s lead, than to kind of blaze a trail.
Joe: Totally. And that – it’s such a need for humans to be led, that people will continuously follow people that don’t even take them in directions that are good for them, or that even know what the hell they’re doing. And humanity will follow, at times, insane people because someone is stepping up and saying, “Hey, follow me!” It’s such a need for people to remove complexity by doing that. And for the record, Dean, the cookie in the cleaning industry, as an example, would be literally the free room, the carpet audit. Those are like the cookies. But I don’t eat dairy, and rarely grains whatsoever, and I tend to be gluten–‐free, and they need to be organic cookies. So, I just wanted to kind of point that out, because that would be more attractive to me. If I went to your home, and you had say, like, some sort of raw cacao with no sugar in it, that was really healthy, from Raw Tree House or something like that, something along those lines, that would be valuable to me. I just wanted mention that.
Dean: And you can get those at RawTreeHouse.com?
Joe: Of course! They’re the most amazing raw chocolates on the planet.
Joe: And, I don’t own the company, by the way.
Dean: I understand.
Joe: Although we should do product placement on “I Love Marketing.” God knows we can recommend cool resources and stuff.
Dean: There we go.
Joe: Yeah. For a million dollars, we’ll mention your company on “I Love Marketing.” Just send the check to me. Alright, go ahead.
Dean: I think that’s important, though, to really get that, for people to understand that you can’t just confuse being nice to people with orchestrating a path for them to take, and leading them to those next steps.
Joe: Totally. Someone right now, listening to this, if you really don’t have a next step, you really need to just think. The very first podcast that we did on “I Love Marketing,” about the focus finder – Dean has the 50–‐Minute Focus Finder with his process of focusing – you’d be really well–‐served to take some focus time and really think of how to construct the right offer. What is your cookie? And what do you need to do? What is missing? What are all of the chains that link the sale together? And brainstorm, because you do all this stuff anyway. If anyone listening has ever successfully made a sale, you did certain things. Many of those things that you currently do manually, you can automate them. You can use technology. You can use sales copy. You can use letters. You can use video. You can use audio. There’s lots of things that you can do to improve your process. But you really need to understand it is a process.
And once you know what the process is, you can repeat it, and you can have consistency. One of the things that I’ll teach cleaners is how to never have a slow season, because there are different times of the year where people are more apt to call a carpet cleaner than others – when the kids go back to school, right before Thanksgiving, for the holidays. Depending on what part of the country you live in, summer is really hot in Arizona, not a great time for people to hire carpet cleaners in Arizona. But in other parts of the country, it’s a perfect time because it’s not freezing, and there’s not snow on the ground. A lot of those things cause higher percentages of people to do business with certain companies. But the point is, you can avoid slow seasons, if you set things up right, like monthly client newsletters, and you’re very consistent.
So, it gives your company predictability. And when you’re running an unpredictable company, that’s very stressful. And most unpredictability comes because people don’t understand how to convert leads, how to create leads in the first place, how to actually do all that stuff. That’s why we’re talking about this; because we want our listeners to eliminate a lot of the stress that the vast majority of business owners not only don’t have a handle on, they never ever figure it out, like ever. They basically run a business on hope and crossing their fingers, and that’s just not a fun way to be an entrepreneur.
Dean: Now, the interesting thing that happens, and I’m sure you see it too, but I see it with the real estate agents, is they’ll start running ads and they won’t have that whole cycle already mapped out. But they’ll start running ads. They’ll send out the fulfillment piece, and then they’ll just wait for people to take that next step on their own. And they might come to the conclusion, and say, “Oh, those leads are no good. Those leads don’t convert.” Do you find that same thing with the carpet cleaners, that they’ll run the ads, and people will call and ask for the guide, and maybe they didn’t have the offer in there, but they kind of get the sense that, “Well, lots of people calling the recorded message, but those leads are no good”?
Joe: Yeah, yeah. I hear it all the time. And part of it is because they have a crappy follow–‐ up process or they might run a free recorded message, but it’s boring. David Ogilvy always said, “You cannot bore people into buying.” So, yeah. The analogy that I used to use all the time, and I came up with this in talking with Dan Kennedy 15 years ago, was the whole thing about planes flying. If a plane crashes, you don’t go and look at the aerodynamics of flight, where Mars was in conjunction with Jupiter. You don’t look at ridiculous notions as to what would cause a plane to crash.
And when people say, “Advertising doesn’t work,” or “Direct response doesn’t work,” or “SEO doesn’t work,” or “Yellow Pages don’t work,” they always blame the media for not working. Back in my early days, people would be, “Oh, direct mail doesn’t work.” People even today say, “Direct mail doesn’t work for me.” It’s like, “Really? Are you kidding me?” And so part of it is, like, “Well, that’s like saying planes don’t fly.” I mean planes fly every day.
Dean: That is my favorite too, now. You’re absolutely right. People say that. “Direct mail doesn’t work anymore. That’s old–‐school. Everybody’s online now.”
Joe: Yeah. Or, “Long copy doesn’t work.” It’s like, “Oh, really?”
Dean: “Long copy doesn’t work,” yeah.
Joe: Yeah, right. I can name several companies right now that are doing over $100–‐million a year in sales that are still direct mail, long copy. “People are busy. No one reads long copy anymore.” But when people supposedly weren’t busy, no one read long copy, either. It’s like these same idiots come out of the woodwork with the same brain–‐dead notions that they’ve never done any studying, r understanding on, let alone ever tested – properly – a sales letter. But they have this opinion of what works and what doesn’t. Before I go on a tangent and become critical, the analogy that I was saying was let’s say that a plane crashes. Well, we know planes fly. They just do. And if a plane crashes, what you look at is was there something wrong with the weather? Was there something wrong with the pilot? Were there terrorists onboard? Was there engine failure? Was there a gigantic storm? What caused the plane to crash? Whatever’s causing your selling to crash, to not work, there’s something missing, or there’s something that’s just wrong. It’s not put together right.
And, like I said, it’s like the yeast in the bread. If you have all the ingredients, but you leave out one thing, the yeast, the bread isn’t going to work. It’s not going to be like nice bread, it’s going to be whatever. The same thing goes with your selling efforts. If you don’t get it right, it doesn’t matter if you’ve got a great product. It doesn’t matter if you’re a nice person. You either get it right or you don’t. And the cool thing is once you get it right, and it’s not getting it right by luck or by accident or haphazard, but you actually really look at it and you document it, and you kind of study it, then you can repeat it. And that’s the coolest thing. How did you feel, Dean, when you finally got your sales process to work like clockwork, and you could repeat it again?
Dean: Yeah. Free, I felt free. I knew immediately. Even when I got the first step of it, I knew where to go with that, and I knew that I would never make another cold call again. I knew that now I had unlocked the magic kingdom, the ability to get people to call me, and that was just the most incredible thing. But I realized that initially, I was focusing on the people who were going to buy right away. I was hoping for people who wanted to buy right now, just like carpet cleaners probably wish for people who want to get their carpets cleaned right now. But you’ve got to realize that not everybody is going to do what it is they’re investigating right now. And to realize that there’s a whole residual value, a long term value in that portfolio of leads that you’re generating, you know that the leads that you’re generating today might not convert for 6 months or a year even, but having the ability to communicate with them long–‐term gives you the maximum yield. And I don’t know, maybe some businesses have a short–‐term cycle.
Joe: Yeah. I’m sure an illegal drug dealer probably has a short–‐term sales cycle. But the point is that whatever business you’re in, going back to Jay Abraham, he would always talk about lifetime value of a customer. People ask, “How much should I spend on advertising? How much should I spend?” And Jay would always say, “You don’t know how much you can afford to spend until and unless you know how much the client’s actually worth.” So, once you know what a sale is worth, then you can know how much money, how much time you can allocate in the follow–‐up process. And most people, they kind of, “Oh, that makes sense, lifetime value of a customer,” but they exhibit none of the behaviors that would actually lead anyone to think that this person actually really understands it, because to know but not to do is not to understand.
As Steven Covey says, “To understand, but not to do, is not to understand,” that sort of thing. So, with your own business, are you following–‐up with people consistently? Are you sending out a monthly newsletter? Are you doing episodic marketing? Are you doing ongoing, consistent, relationship marketing? There’s always huge opportunities to convert a lot of unconverted people, and to deepen the frequency, and the relationship and the referability of your clients, simply through the follow–‐up process. Because for some companies, it’s not even about selling the person again, it’s really about getting them to refer you.
And you can use sequences too. Like, for instance with carpet cleaners, I don’t just teach them how to stop with making the sale, once they’ve made the sale. Once they’ve made the sale, then we have a whole other process. As soon as they’re done cleaning the carpet, as an example, that’s when Mr. and Mrs. Jones are in the most euphoric state that they’re possibly going to be in. The carpet, if it’s done right, looks wonderful, it smells good. They’re happy. And that’s the perfect time, that old saying, “The difference between lettuce and garbage is timing,” and the perfect time to actually ask them for a referral, to introduce what you guys would talk about at By Referral Only, to introduce them to other potential people that can hire your carpet cleaning services, is right at the end of that job.
So, that’s part of the process, too. It’s like, okay, once you’ve now completed a sale, and someone’s in a happy state, you ask them to give you a testimonial, you ask them for feedback, and you ask them to tell other people about it. And that’s when you can collect names, phone numbers, emails, in order to introduce other people and offer another free room and a carpet audit to their friends. So, you’re converting more sales off someone that you just converted.
Dean: Well, it’s real interesting. When you were running the carpet audit offer, and the consumer awareness guide, did everybody who called get their carpets cleaned, ultimately? Did every person who called?
Joe: Oh. That would actually call and request a free room and a carpet audit?
Dean: Every person that called and listened to your free recorded message…
Joe: Oh, absolutely not.
Dean: Did every person ask for the guide?
Joe: Nope. Nope. Some people would just call. And I’m sure you wanted to comment on that but…
Dean: Yeah. Go ahead.
Joe: Some people would call. They would listen to the message all the way through. The people that would typically listen all the way through would obviously be the ones most likely to leave their name and phone number. And I tried different things too, so you’ll know. There’s not just one exact test that I did, and it always worked the same way. We have it now where people can direct–‐connect by pressing *9, or pressing zero, and they can be directly connected to the company. There’s others where you just leave a message, if you want someone to call you back, or you leave your address, back in the day if they wanted to have the consumer awareness guide mailed to them. There’s all those different things.
But, no. Many people would listen for a few minutes, and then decide. They’re kind of looky–‐loos. Let me point this out too, Dean. In the carpet cleaning industry, for someone that doesn’t my Piranha Marketing stuff, their idea of selling something is non–‐buyers and buyers. They don’t even think of prospects. I mean there are many service businesses in the world that have bought my stuff, the Nightingale–‐Conant program or whatever, that never even thought. They’re like the pest control guy that’s just selling pest control, the heating air conditioning guy selling heating/air conditioning, the pool service person waiting for someone to call them and hire them.
But there’s all these prospects out there that are sort of thinking about cleaning their carpets or hiring a pool service company, but they don’t want to talk to anyone. And if you offered them a free recorded message, or go visit a website, and I’m funny about go visit the website, but go visit a website and do a specific thing, like watch a video on taking care of your lawn. When you start offering those sorts of things, then you start capturing leads. And what leads are, are in between a cold prospect and a client. It’s like that space in between where they’re kind of looking. They’re raising their hand halfway, but they’ve not raised their hand fully and say, “I’m ready to give you money.” They’re kind of like, “Well, I’m semi–‐interested.”
And part of a gigantic accomplishment for me, in the cleaning industry, and I’ve absolutely transformed the carpet cleaning industry – before me, this stuff just did not happen – there might have been 20 people in the entire world that we’re doing sophisticated marketing before I showed up. Of course, I’m biased; but I believe that’s a very valid statement. They didn’t even think of lead generation, unless they had a phone room or something.
So, for the most part, one you even start thinking, “Wow! How can I just start putting people into the pipeline,” because most people don’t want to go 6 months. You made this comment, “It might take 6 months before someone buys.” But how cool is that, if you actually know? Let’s just keep it really inexpensive. Let’s say you’re selling something like a carpet cleaning job and it’s very low‐end. Say you’re going to make $100 gross profit. That’s not a lot of money in the cleaning industry. But let’s say it’s $100. But let’s say once you get a lead, you can do things over a 6-month period, and it costs you $37 to do it, but you make $100. You would continue to do it, because you’re still making money there, and you’re acquiring a client.
And once they do business with you a second time, it’s much better than the first time because you don’t have as much invested in them for the second sale as you did the first sale. And that’s a pretty cool scenario to be in. And then, you multiply that by 500 people, you’ve got a pretty solid business going. Most people don’t get a solid business going because they don’t really understand what we’re talking about. So hopefully, by explaining it, hopefully there’s a lot of light bulbs going off where people are just thinking, “Ah, I get it!”
Dean: Yeah. This was really a life–‐changing distinction for me, so I want to be real careful to really articulate it in a way that people get it. So, I don’t even think I’ve explained this to you. One of the mindsets that I have, when looking at generating leads, is thinking about them, first of all, in a bundle, in a portfolio. You talk about a pipeline. I look at them in a group of 100. So, rather than putting so much pressure on this one lead converting, let’s just observe what happens if we generate 100 leads. And if we know that some of those people are going to buy right now and some of those people are going to buy later, and some of those people are not going to buy at all, we know that that’s really the only 3 possible outcomes that can come from anybody in that group. When we look at it and start to think, “What’s the value of this bundle of leads, this portfolio here?” I do this all the time with the real estate agents. I’ve done so much reading on lead conversion.
I had a great book by the Inquiry Handling Service, and these are guys that handle incoming leads for all kinds of industries. If you see, in magazines, those inquiry cards where you can circle to get information from these different advertisers, you can send back that business reply card, or they’ll get trade show leads or inbound telemarketing leads, all those kind of things across all kinds of industries, millions of leads, and what they find is that 50% of the people who inquire about something will buy that thing within 18 months. So, you look at that, and you’d say that 50% of the people who inquire about getting their carpet cleaned or getting their carpet audit, will get their carpets cleaned within 18 months. And the way that they got these numbers was by doing what they called “Did You Buy?” surveys, where they would call thousands of people, and they called them at 90 days, at 6 months, at 9 months, at 12 months, and at 18 months, and say, “Did you buy? You called about this, did you actually get your carpets cleaned, or did you buy a house? Did you buy a color copier?” or whatever it is that they’ve inquired about.
And what they found was that 50% of them are going to buy, but only 15% of them actually bought the thing they inquired about within the first 90 days. So, that means that 85% of the value of that bundle of leads that you’ve generated is in being able to communicate and extend the relationship beyond that 90 days. That’s where 85% of the value is. So I create this little quadrant. I’ll put this up on iLoveMarketing.com. But if you can imagine a quadrant, Joe, divided, and the top half of that quadrant is the outcome, meaning “Yes, they bought,” and the bottom half is “No, they didn’t buy.” And the left half of that quadrant is “They buy now,” and the right half is “They buy later,” if you look at this, if we are going to bet our money, let’s say we’re playing roulette here, or what’s the game where you put all your chips on one thing, on one square?
Joe: Oh. Yeah. That’s roulette.
Dean: Okay. So let’s say that we’re doing this, and we know the outcomes. Here’s the 4 potential outcomes here. If they’re not going to buy, if they’re on the bottom half, we can eliminate those 2 boxes right there, on the whole bottom half. Because if they’re not going to buy now, they’re not going to buy later, either. So we’ve eliminated that bottom half. If we are putting our money on the “Yes, they are going to buy, and they’re going to buy now” box, that means we’ve got a 15% chance that we’re right, because they say that 15% of the people are going to buy are going to buy in the first 90 days. If we put our money on “Yes, they’re going to buy, and they’re going to buy later” box, we’ve got an 85% chance, of the people who are going to buy, that that’s where the real value is. So, if you look at that, it’s like those leads that you’ve been generating all along, all the leads that maybe you’ve got written on your desk blotter, or in your desk drawers, or in the notebook, or the calendar, or whatever scrap pieces of paper most people use to write down leads or collect business cards, all those people, if they even just start with connecting with those people, there’s a good chance that if it was more than 90 days ago, they might be getting ready to actually buy now.
Joe: No. I was just going to say, yeah, everyone needs to go take a look at that quadrant that you put on iLoveMarketing.com, and paste it somewhere to remind yourself of the importance of what you just said. Once you get that, this is like gambling when the odds are in your favor, if you know what the hell you’re doing and how to do it.
Dean: That’s exactly right. You’re exactly right. These are, as I said, the best numbers I can find that go across all industries. Even if there’s a 50/50 chance that they’re going to buy or not buy at some point in the next 18 months, you can’t tell which ones are which. You just look at the names and addresses of the people that ask for your consumer awareness guide, you can’t tell which ones of those are the ones who are going to actually buy. So, the very best course of action you can take, and the best mindset you can have is to treat everybody like they are going to buy, until they prove that they’re not going to buy…
Dean: …instead of treating everybody like they’re not going to buy until they prove that they are. A lot of times when people start doing this stuff, they’re like, “Well, I don’t want to be just giving away free stuff to all these looky‐loos, or to all these people. I don’t want to be just in the business of sending out all this free information. It’s not going to turn into anything.” We’re so reluctant to spend money on people. When you start looking at it as there’s a real good chance that these people are going to do something, and if you focus on serving the people who are going to, and knowing that it might take 90 days or 6 months, or a year, what’s your process for keeping in touch with those people, and maximizing the return on investment that you get from generating that portfolio of leads?
Now, that doesn’t mean that focusing on the people who are going to buy now is not profitable, because it is. Because that 15% alone can be a profitable group. But that’s, unfortunately, what most people do. Most people only focus on the people who are going to buy now, and don’t spend any amount of time or effort focusing on the people who are going to buy later.
Joe: Yes. And with that one piece of advice, someone listening can absolutely transform their company. They can get rich with the information that you just shared. And if they even just start looking at the whole process of lead generation, and all of this as a process instead of an event, and they’re not episodic in their marketing but they’re actually strategic, the sky’s the limit; because this is about as close as I know to printing money legally, and having the ability to literally go out and pick a winning lottery ticket. But it’s going to require understanding the psychology of your clients. Why are they buying from you? What are they buying? Creating an irresistible offer, using compelling copy, not wavering and leaving it up to the client to decide, but actually making specific offers like your analogy of “Don’t just come to my living room, and, oh, go check out the refrigerator if you happen to buy.” Literally, people want to be led. They want an expert, they want an advisor, they want someone that they know, like and trust. And if you show up as that person, you have a gigantic competitive advantage compared to other people. I know we’re running out of time on this episode.
Dean: I know, and I have so much more to share about lead conversion. Definitely, next time is still going to be about lead conversion, because I’ve got so much more. But what would you say? How would you summarize where we are so far, in lead conversion?
Joe: Well, a couple things I would say, I just want to finish with this, because you said this, you made this statement that people are so reluctant to spend money. And I will tell you, over the years, I’ve heard every excuse in the book as to why, there’s people in the world that are results-based and then there’s people who are excuse‐based. They’ll come up with every reason why it won’t work. “But, what about this? What about that?” And they live in this what‐if world before they even test it. I really have a very low tolerance for people that have never even tried the concept and the idea, but they want to argue about why it won’t work.
And one of the arguments say in the cleaning industry, there will be some people, “Well, I’m never going to give away free carpet cleaning. I charge for my services. I’m not giving my stuff away for free.” And what people have to remember is that if you’re not spending money to acquire a customer or a client, or a prospect, you’re going to spend time, you’re going to spend energy, you’re going to spend some sort of resources, unless you’re really lucky. And there are some people. There are trends that will happen. In the case of someone that’s in fire and flood restoration, in the middle of a city that’s having a flood, you don’t need to be a great marketer, you just need to be able to do. If there’s 50 or 100 homes that are damaged, you’re going to get work. However, the world typically is not operating in an emergency, chaotic situation that requires a mass amount of your products or services.
So, knowing that that’s not usually how it shows up, you’re going to spend time, money and energy, and be willing to spend the money, because you’re going to spend it anyway. I’ve seen carpet cleaners spend more money, and lose more money trying to price discount their services than any of the cleaners who use my free room of carpet cleaning offer with the carpet audit, and ethically do it right, with the right pieces in place. So, that’s one thing. Always be willing to invest in yourself, because it’s always going to come back, if you do it the right way. And the other thing is as we follow up on the next segment, the next podcast for I Love Marketing, on lead conversion, I’ll tell the story of how I taught Bill Phillips, the author of Body for Life and his most newest book, Transformation.
He had a company called EAS, which he sold years ago. But the first time he hired me for consulting back in end of 1996, 1997, I gave him one idea within the first hour of him hiring me, that I was teaching carpet cleaners on how to follow‐up with leads, and I taught this one thing to Bill, a real simple thing that I can teach everyone on the next call, and it made him $3-million just by teaching him this one thing I was teaching the carpet cleaners.
Dean: Tune in next time for the exciting conclusion. That’s a great cliffhanger.
Joe: Yeah, exactly. If you quit listening to the I Love Marketing podcasts now, you’re pretty much hosed.
Dean: There’s no hope.
Joe: Really, there isn’t. There really isn’t. So, Dean, wrap up with anything you want to say because I have babbled long enough.
Dean: I think this has been a really good one. I can’t believe how fast they go.
Joe: Yes. Yes. I hope it’s as exciting for all of our listeners as it is for us to do this. So, here we are, to be of service to all of the people out there in marketing land, who love marketing as much as me and Dean do, so leave us your comments. I hope you now take some time to go and focus on what you can do to strengthen the links in your chain, and go out and service a lot more people, create some great value in the world, and make yourself a lot of money.
Dean: There you go. We’ll see you next time.