An Interview With Alan Forrest Smith: Subject - All Things Marketing
An Introduction
What you are about to read is a long page. Is it worth the read? I was shocked at how current it is considering this was an interview with me in 2006.
The discussion covers a ton of stuff but is all about building business, profits and success. The PDF is also available at the end.
Note: I have simply copied and pasted the doc. It has never been checked for spelling etc as it was a transcript of a recorded interview.
Please leave your comments at the end.
Your marketing nonconformist
Alan Forrest Smith
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Interview Starts
JP: Okay, you ready to rock and roll?
Alan: Just fire away. I mean obviously JP this call is going to be rough.
JP: This is for your purposes of getting a chapter off of. I mean if there’s some magic there then we can decide what to do with it later.
Alan: Oh, there won’t be any.
JP: Oh, there’s always magic. There’s always magic.
Alan: Oh, dear.
JP: What I just want to work through the process of let’s say one business person or five, or ten business people will get on the line with you. They’re paying $500 each to be on a one-hour conference call. And they’re saying we want to know what the fastest, most rapid, shortcut ways to grow our business very, very, very quickly. And you’re just going to work through them and I will keep drilling down on each one of them as you do and ask you for some stories, and examples, and that sort of thing. And then we’ll see what happens.
Alan: Yeah, okay. Because I mean we can always edit, delete, cut out things. Especially when I get the draft back.
JP: Yeah, exactly.
Alan: We can go through everything then as well.
JP: Sure.
Alan: I did send you an e-mail. You know, all the kids are off school here JP at the moment. I don’t’ know if it’s the same in the states.
JP: No, what are they off for?
Alan: It’s just what we call half term. So it’s just half way through the term they have a week off. And my wife’s gone out today with a friend of hers. They’ve only gone shopping.
JP: You’re having a blast.
Alan: Well, actually Sonya O’Kenyon (ph), my mother-in-law is taking my daughter. My youngest boy’s gone to the neighbors. My middle boy has gone out with his friends; and my oldest boy is downstairs on his own now. So he knows I’m on the phone so yeah it turned out okay. I sent you an e-mail saying we’d have to do it another day.
JP: Oh, I didn’t get it.
Alan: I’ve just come through the door as well. I just made a drink so I’m just sitting down in my office again so it’s pretty good timing.
JP: I hope it’s something strong.
Alan: Yeah, we call it tea in the U.K.
JP: Yeah, I’m having what we call coffee in Texas. Yeah, there was a speaker, I don’t know if you’ve ever heard of him from Australia, named Peter Daniels?
Alan: No.
JP: He’s a big real estate guy over there and you ought to look him up sometime. I think you’d get a kick out of the guy. But anyway he was one of those people that has a – you know you have these people along your life that have an impression on you. He was one of them. But he kind of teased us about us here in the U.S. drinking coffee every morning instead of tea.
Alan: Yeah. I mean even in the U.K. you know, it’s the past few years things like Starbucks, etcetera. We’ve got loads of new coffee drinkers but as a rule traditionally nobody would have coffee in the morning, yeah, no one at all. It was always a drink of tea.
JP: Interesting. So let’s rock on this.
Alan: Yes, fire away my friend.
JP: Let’s start rattling off some of them and as you get them rattled off I’ll grill you on them and then we’ll work back through them if we need to. But let’s talk about what have you seen, what have you implemented for some of your clients as some of the shortcuts or the ways to get off the ground and rolling, really, really fast?
Alan: Well, JP I’m just going to ramble through some ideas and thoughts come to my head.
JP: No problem.
Alan: Okay. If somebody actually came to me and I’ll give you an example later; if somebody came to me and said look this is what we have. This is our business model but we’re not growing. We don’t have the percent of profits of all the things we need fast enough. And to survive in the business we need to grow super fast or we’re going to die. I tell you one of the biggest mistakes I always find with most businesses is that they kind of spend money on nothing. You know, for example I’ll tell you what we could do. We could take a 5000 (£) pound quarter page advert in the London Metro and let’s hope that’s going to bring us in one or two clients. And, you know, it’s all that kind of thing. I continually come across people, people who are continually searching for new clients rather than use their existing client base, use their existing network, or use their existing contacts to grow the business at literally warp speed because it can be done that fast. So one of the things I would always say to somebody is, you know, what’s the first thing we need to look at? And that is the client database.
Let’s have a look at what clients we have and how we can actually use clients then to grow the business super fast. And these are just usual things. Again for example, how much does that individual spend through the business a year? It’s the average customer, not business, spending just for the sake of a number $400 through your business every 12 months. Is that what they spend. And if that’s the case how can we increase the average spend of every customer?
Because just one quick example I did with a car sales place. This was literally years ago. And what we were talking about is – in fact JP they didn’t pay me for this. They actually did a conversion job on a new Volkswagen Beetle I bought from them. And the deal was they would lower all these big wheels, and all the usual stuff that you do when you when you get parts. You go a bit crazy. So we did all this kind of stuff and the deal was I would show them how to leverage their business. And you know it was so easy. These guys were selling sports cars like they were going out of fashion. Paul Shay’s, Audi Roadsters, all these kind of stuff we see in Europe and the U.K. Yet they would never, ever even dare to offer any extra. And you know they guys if you’re in the mindset of buying something like a sports car you’re not buying a sports car. You’re buying something that just looks mega cool. That’s what you’re buying. And unit price isn’t even an issue. If you’re paying $70, 000 on a vehicle and I’m talking about (£) pounds, so $100,000. If you’re spending $70,000 on a sports car you don’t care about the price. You just want to drive down the road, looking ultra cool. You want the biggest wheels. You want the biggest exhaust system. You want the noisiest engine. And if it means actually paying an extra few (£) pounds a month, a few dollar a month on the credit well they couldn’t care less.
So I said to these guys, I said look how often do you sell these? Because they had some really neat big wheels in the service area where you actually went in and spoke about your car. They said, well we never sell anything. I said, well why? They said, well because they’re paying a lot for the car as it is so why would they want to spend money on wheels, and lowering, and body kits, and nitrous oxide, and all this stuff. I said, well that’s exactly what these people want to buy and all you have to say to them is something as simple as this. Now while you’re spending 70,000 (£) pounds on this Porsche why don’t you have a look at these because believe me they’re going to make the car look unbelievable. They’ll just finish off. And the point I’m getting to on that JP is just literally asking a question or raising a suggestion. It’s more of a suggestion in this case. And the suggestion is, you know this car looks good now but it’s going to look amazing after if you add these wheels. And you see you just put a suggestion into their mind that they probably had there already. And they’re thinking well hang on, I could have these wheels for an extra $7.00 a month, $10.00 a month.
JP: Yep.
Alan: And that’s how they think.
JP: For the price of a Starbucks you can look even better on the road.
Alan: Yes and that is the point. You know, it’s not about money or anything. You know, let’s look at the bigger affect on this now; the great big affect. These guys are selling 50 sports cars a week and they increased their average spend by all these different sets of wheels, and different sets of interiors, and different sets of lowering, and springs, and everything else. Isn’t that going to increase their business over night? And all they have to do is have one staff meeting and say listen guys, this is what we’re going to do. And for every time you sell a set of these wheels for $1500 I’m going to give you $100. You know, it’s just thinking about ways to leverage the business. And so what I’m going back to there JP is how can you increase the average spend within the business? And it’s the old McDonald’s thing you know, would you like fries with these? That’s exactly the same on a different level. It’s exactly the same.
You know, if somebody says to you if you’re booking a plane with Emerits (ph) and you say, you know can you book me in business class and they say to you – in fact I’ll give you an example of Virgin Atlantic when I came to L.A. recently. Virgin Atlantic recently changed their system. So rather than going business class, because it was only a short flight. It was just 12 hours. Rather than going business class and paying 3000 (£) pounds they said to me have you thought about the – you know I forgot what they call it now. I think they call it premium economy or something like that. So you actually get treated exactly the same as business class but it was only 800 (£) pounds instead of 3000 (£) pounds.
JP: Wow.
Alan: And the only difference was that instead of having say, for example, 30 inches of legroom, extra leg room. You got something like an extra 20 inches; and that’s 20 inches more than the economy. And you didn’t get a bed seat. You got a virtually fully reclining seat. It didn’t go all the way back so you couldn’t properly lie down. And I thought well for 12 hours and you still got your complimentary drinks. For a 12-hour flight, you know, am I going to be sleeping? No. And basically, I mean they were down selling on this one but they were actually up selling as well because they were selling a new service. So how many more people were actually going to buy into this premium economy? So rather than paying 500 (£) pounds over to L.A. next time you paid premium economy. You paid 800 (£) pounds. So you’re increasing leverage on economy by 300 (£) pounds. And you know it’s so easy all this stuff. It’s just not rocket science at all. It really isn’t.
I’ll give you another example. One thing when I used to have hairdressing salons we used to always up sell on everything. I mean my guys were absolutely super trained to up sell on everything. And for example, what we used to do was we used to – every client that came in -- in all the salons we always had what we’d call a 30-minute slot. In an appointment book in a salon they call that a column. So you’ve got 30 minutes in a set stylist’s column to do a wash, cut, and finish. Now what I worked, I thought hang on, if we do 45-minute slots instead of 30 minutes well that’s giving us an extra 15 minutes and actually in real terms you’ve probably got an extra 25 minutes with all the messing about, and you’re behind, and you’re forward in time, and just time manipulation. So you’ve an extra bit of time to say to the client. Look, your hair’s going to look great cut like this but it’s going to look drop dead gorgeous with this color on it and rather than come in again next week and pay $70 I’ll do it right now for $40. And I tell the take away on that in our salon was virtually 100 percent. And I’ve since trained hundreds of salons all over the world to do exactly the same and the reports that come flooding back are just unbelievable.
JP: Wow.
Alan: You know, and again it’s another little thing. I’m sorry JP I’m just rattling off examples here.
JP: No, you’re fine.
Alan: Another way we used to do is salons and this is salons I’ve trained to do this. Most salons when a client was going for a haircut, cut and finish, they would say to the client when they’d get to the desk at the end of the process $40 please, just for a standard cut and finish. But what if the stylist actually spent an extra 15-20 minutes restyling or redesigning the client’s hair? Well one thing what I discovered was, because we used to do surveys and everything in these salons. What I discovered was, one that clients are always more shocked if they didn’t pay more. So I thought, well hang on; the clients are actually saying in their own mind well this is going to cost me an extra $20 today. But we would charge them a normal price. So what I’ve ended is I’ve designed a full service just on having the hair redesigned and we used to call it the redesign service. And what we did is we leveraged everything on that redesign service. In actual price it only took an extra 15 minutes of our time. And it took the average sale, now these are just rough guesses right because I thought we only ran this -- this was year’s ago. They would take say an average sale from say $70 up to something like $110. And, you know, we’re talking overnight now JP. We’re not talking in months, or years, or weeks.
JP: We’re talking about a couple of questions.
Alan: We’re talking about – look this goes back to mindset right? It all goes back to the mindset of the customer and the question you need to ask your business owner is how well do you know your customer because people never buy haircuts they want to just look good. They buy look good, feel good. People don’t buy seminars. What do they buy? They’re buying tools to get their job done. That’s what they’re buying. So you’ve got to look at the mindset. And when people are in buying mode if you can raise or pull out the thoughts that are in their mind at that time they will spend more because they’re ready to buy anyway. And when you’re talking about a few extra dollars, leverage is just a piece of cake. But then again, this is why you have to look at existing clients rather than new clients because new clients have to build that trust and reliability first before they get all the heavy into spending cash with you. You know that first visit are they going to spend the extra cash say in a hair salon or a high street business, [unintelligible at 15:28]? The chances are maybe not unless you’ve got a super salesman.
So you know there’s a few different issues but you need to know the customer. And it’s just a very, very quick, you know, do you want price for that, or do you want a little bit extra, or this would look good for that; just upselling that’s all, just upselling.
JP: Okay.
Alan: That’s one.
JP: That’s one. That’s perfect. That’s beautiful. What else can a person do to leverage their existing clients?
Alan: Say that again JP.
JP: What can a person do to leverage their existing clients?
Alan: Okay.
JP: In addition to upselling? I’m thinking that’s a road we might want to go down a little bit.
Alan: Okay. Sure, yeah. How do you leverage your existing clients? Well first of all you have to build a relationship with a client. So many businesses you meet they actually deal with clients on a robotic level. And they don’t understand that you have to have a relationship with your clients. Now look, when you go buy something you know you maybe going to say hi buddy, how are you doing, blah, blah, blah. But this guy who maybe even owns this business may give you the impression he barely wants to deal with you apart from getting the sale. Now the best way to leverage existing clients, even if you hate your client’s guts; if you hate everyone who comes in your business. You can still leverage because how you do it is through your database. So regardless of how you got the sale if you’re the kind of business that just literally gets the clients, or the customers, to the desk and take the cash, well you need to start looking at ways of actually getting data from those clients. And it can be as simple as fill in the cards, or fill in the sheet, fill in the questionnaire. Or if you are computerized, which more and more businesses are these days, make sure you take the data because when you’ve got data on a computer, or on a piece of paper that data is worth more than anything else to your business. It’s worth more than your absolute best salesman. I mean JP you know about from that jewelry company, [unintelligible at 17:42]. And it’s as simple as this. You know, let’s have a look at a few different areas. Right, let’s just make it like that.
Let me just step back a little bit here. We’ve got the data for the past three years of customers who’ve been through our business. Now, we have a look at this data and we break it all down by date, by the last visit, by the last spend, by the purchase. All the different angles, the different areas we can look at. Now one of the very first things and fastest ways to leverage that data is to look for attrition. Now the attrition is the lost clients. Where’ve they gone? Now the fact is most clients don’t leave because they hate your guts. But you will have clients who leave because of something called TDC. And TDC is what they called thinly disguised contempt. So that is why a customer comes into your shop and you treat them a little bit arrogant or a little bit horrible without actually realizing it. But the good news is those clients leave because of the TDC, thinly disguised contempt, are actually very, very low. And you will find probably 60-70 percent of people who haven’t come back don’t really have a great reason for not coming back. So what you can then do is you can start contacting these clients, customers, and pulling them back into the business. For example, again I’m going to give you an example from, because I do a lot of consulting with hair dressing salons. I mean I do with all sorts of businesses but you know this is something I’m pretty well known for.
JP: Sure.
Alan: If you look at hair dressing salons you will get a decent portion of clients that will naturally bleed or waste away. But you’ll also have, if you look back over 12 months, you’ll have a good portion that just literally vanish into thin air. Now here’s what you do. You go back to your database. You pull out the 500 clients that are missing and you send them only -- now remember this isn’t seen publicly so it’s not going to water down your existing averages or anything. This is a private mailing. You mail those 500 clients, even 100 at a time if 500 sounds too expensive. You mail 100 at a time. When you’ve done the 500 you then will see quite a big polishing of those clients will actually fall back. Why? Because one you’ve reminded them that you’re there. Two, you’ve reminded them that you’re a great business to deal with. Three, you’ve reminded them that they were actually happy because they’d been coming for four years before they disappeared. You’ve asked them a question. Was there anything that we did wrong while you were here? And if that’s the case can you let us know so we can put it right? And, you know, you just relate these questions to your clients. But then you make them a killer offer to get them back into the salon. So what you would do is you would say, look you can have James on our busiest day this Saturday for 50 percent off. Normally James is $100. This Saturday only you can come in for $50. Would you be happy to do that? We’re set on the phone. We’ve got the appointment booked; we just need you to confirm it. How many people are going to say no to that? Well you’re going to get a few people who are very unhappy who won’t come back. The people who died over the past three years, they’re not coming back. But the people who left for not particular reason for reasons like I was made unemployed, or for reasons like I took an offer at another salon. I went, although I really didn’t want to. I went. They made a mess. I felt embarrassed coming back. You know, whatever the reason.
JP: You never know.
Alan: Yeah, you just don’t know until you contact them. And you’ll find a chunk of that data that you’ve just sent out those 500 will come back. Now what’s interesting about this, you’ll find there’s also quite a chunk that don’t come back on the first mailing. So what you do is you give it ten days. Ten days later you send out the second mailing to the clients who never came back. And what you do is you kind of make it the same but you just beef the letter up a bit but you increase the offer. So this time you say, look you can have your hair cut with James for 50 percent off plus we’re going to give you a color for free. And again, you’ll find a decent percent will grab the offer. But you’ll also find they’ll be a percent that won’t take the offer. I mean listen I’ve done this hundreds of times. It works like crazy.
On the third one you take the offer right to the edge. Now why do you do that? Because the question now is, and this is where we’re going to freeze stuff in something as well. The question now is how much is that client worth to me during their lifetime in my business? So what’s the lifetime value of that client?
So you simply sit down and you say, well hang on. A client on average sticks with me for three years, on average. Over three years she spends $3,000. So surely I can do this next appointment for absolutely free because for the next three years she’s going to be worth $3,000. So what you do then is you do your math and you take the offer to the absolute edge. And basically what we used to do and what I advise clients to do with salons is just quite simply say look; we want you back as a client. Unless there’s absolutely a reason that we don’t know that you definitely don’t want to deal with us I understand and we won’t mail you again. In fact we’re going to remove you from our database today. But if you really want to come back, we want you back. And just to prove it what we’re going to do is we’re going to do your hair for absolutely zero cost and you can have the manager of the salon. You can have our number one person. Now you know, the question is, does it work? Yes, believe me it works because you’re going to get 60 to 70 percent of those people pouring back into the salon, 60 to 70 percent of 500. What is that worth a year?
JP: Exactly. These are people who were not going to come back.
Alan: Yeah, these were people who were not going to come back for no good reason JP. Just for no good reason at all. Here’s another way. Let’s carry on about leveraging with our clients. We know that we need 200 customers to walk through our door every single week. Currently we have 130 customers walking through the door every week. Do we spend a speck of cash in the press, in magazines, etcetera, to bring new people in? Or again, can we leverage our existing customers? Well the truth is this all depends on what kind of business you’re doing but you can probably do this in 99 percent of businesses. So what you do is, you then make your existing customer a great offer. And the offer basically is based on referral business. And you make it known through posters, signs, flyers, whatever. You make it know that you’re involved in a campaign at this point in time and, you know, you’ve got to be very honest and very up front with people because half the time they never believe what you’re doing anyway. So you’re going to be very direct, and very honest, and very open. And say look, this is what we want. At this moment in time we’re doing about 130 clients a week and we want to get our numbers to 200 and we know that you can help us. And if you help us not only will we reward the new clients but we’re going to reward you as well.
So what you do is, again going back to hair dressing salons and you can apply it to any business. What we used to do we used to simply have a referral system where we used to say to the clients, and again this is how I advised salons to do it. We used to say to the client, look are you happy with your hair today? Yes. Now are you really happy with it? Yes. So we used to get them to confirm. They had to confirm that they were happy because some people won’t tell you they’re happy or they’re unhappy. So you say, yeah okay. I’ve very happy. Say well listen, will you do me a favor? And the question you then say to them is would you like your next service whether it be a car service, hair dressing service, secretarial service, whatever. Would you like your next service with me for $50 instead of $100? It’s an actual fact that I’ll let you have it for half price the next time. Well what are they going to say? Only an idiot is going say no. So they’ll say yeah, of course I do. What can I do for you? So you say, well I’m going to give you this voucher, this referral voucher. I want you to put your name and address on it and I want you to find a friend who’s going to use it and write their name and address on it and give it to them. And they must use that voucher within seven days. And if they use it within seven days I’ll do your hair or your service for 50 percent off next time. And I’ll also, because we love you so much, we’re going to look after this person when they come in. Don’t worry there’ll be no hassle with anything going wrong. We will bend over backwards. And you know JP that works like crazy. Again, here’s an example. In the hair salon on average it takes about 12 to 18 months to get a new stylist busy in a salon.
JP: Okay.
Alan: And that’s what we call having a busy column, which again is having what we call 85 percent floor time because you’re always going to lose 15 percent. Absolutely packed out. You know what we used to do in 12 weeks? In 12 weeks our stylists were completely bombed out and it was just simply using existing clients to build a business. We barely spent a penny on advertising. And you know you can get your clients to do that. I mean imagine that. If you can say to clients – you’ve got an evangelical customer who just loves you to death. They absolutely adore you and they will die for you when they’re like that. So you say to your evangelical clients, and anybody listening to this or reading this they know who they are. Now how much is that evangelical client worth to you if you do their service for free? How much are they worth? Well they’re worth a fortune based on the volume of business they bring into your customers, into your business. So you’re saying to this customer, as long as it’s measurable. You’re saying to this customer, look I love dealing with you and I know you love coming here. But what I’m going to do is I’m going to do everything for you for free, absolutely free because I know this year you’ve sent me 40 new customers because I’ve got them written down. You’ve sent me 40. And if you keep sending me 40 customers I’m charging you nothing. Because, again, what is the lifetime value of those 40 customers? $3,000.
JP: Yeah, $120,000.
Alan: It’s a piece of cake this stuff. All you have to do is instead of looking out you have to look inside the business. Just leverage the existing client to bring in new business.
JP: Let me ask you a question and this is related to your original niche on the salons. But I want to ask when you talk about getting a new stylist off the ground and yet your established stylists are handing out these referrals, these referral certificates. Aren’t their friends coming in expecting to get the established stylist?
Alan: No because you have to measure all that stuff. On the referral voucher -- I’ll tell you the secret with all this stuff. If you have 20 people working in your business you cannot put every single person in the business at the same time on a campaign because instantly rather than build your business very quickly what you’re actually doing is you’re going to probably slash turn over and profits that week or that month by 50 percent. So what you’ve got to do is – this is all that strength and weaknesses. If you’ve got somebody new in the business you promote them but you promote the others. Well no because what these actually JP is these are all cash taps. You know, you can turn them on and turn them off whenever you want.
JP: Yep.
Alan: So when we’re talking about leveraging, or marketing campaigns, or anything along those lines it has to be so affective that you can literally look we’re coming up to a quiet couple of weeks. Let’s just turn our systems on. You just literally turn that tap on for three weeks and you turn it off. And again, a big mistake I’ve seen with a lot of businesses is that they do this kind of reactive marketing where they just try it and hope it’s going to work. There’s no campaign. There’s no sustained campaign. There’s no plan of action. No nothing. And that’s when it’s going to start costing you a fortune because the returns will be virtually zero.
JP: Perfect. So referral marketing, that’s another one. I’ve got a huge list here already because I think I’m getting some, as you’re not numbering them. But anything else that a person can do with the existing client base; anything else you can think of? What about getting people back in more frequently?
Alan: You mean increasing the… Well again, that’s just something that I’ve done stacks of, getting people back in. So in other words, taking the average business from every 10 weeks to every 6 weeks?
JP: Exactly.
Alan: That’s very, very simple. Again, JP I’m going to talk about the hairdresser but you can relate this to anything. One of the campaigns that we used to continually use was we, you know, started using computers in – it was probably about ’92 or ’93 in our salons. So it was very, very early and very [unintelligible at 32:01] for what we were doing. But here’s a great way. If you know – I’ll tell you what. Let’s move away from salons for a minute.
JP: Sure.
Alan: If you know every six months you’re client who has his Chevrolet serviced in your garage. He comes in every six months. The thing is he should come in every six months, or every so many miles. You know that for a fact. But you do all your stuff and all your statistics. And you look at them and you say to yourself, well hang on these guys are actually only coming into the garage when either their car breaks down or when it’s running really sluggish and the reason is they’re not getting the service every six months so how do we get them in? Well you know what JP? It’s not everybody who wants their car to explode when they’re driving down the freeway. That’s just not the case. It’s the case that most people couldn’t care less about their car unless it breaks down. So how do remind the person? Well again, you send them some direct mail. The direct mail quite simply says, hi JP you’ve probably totally forgotten but did you realize it’s now six months since you last had your car serviced. And do you know this as well? It’s at this point that most cars start to break down. It’s at this point that the fan belt goes. It’s at this point that you start using more fuel. It’s at this point etcetera, etcetera, etcetera. So you’re kind of pushing them on into action. And in actual fact he probably would have his car serviced anyway. But you reminded him.
You can use this in anything. You know a little bit like a restaurant. You can remind people that you’re the restaurant in the county easily. But people may get to Saturday and think, well where should we go and have dinner tonight? Where shall we go? But if you’re using direct mail you just remind them just to leverage that database. I don’t care what business you’re in. Even if you’re in cosmetic surgery, you know, you came in six months ago. You had a tummy tuck, or whatever. This is what we recommend and this what we’re advising, etcetera, etcetera. I don’t know about the ethics of that one by the way. But again, you can go right across the board with it.
And just jumping right back to the salons we knew that every six weeks the client’s hair would have grown half an inch. We also knew that every six weeks a color would have a regrowth of half an inch. So we quite simply used to send some direct mail; and honestly this made us a fortune in the salon. We used to send this direct mail. So every four weeks – I’m sorry every four weeks after they’d been to the salon we would print out the list of people who were in four weeks ago. And we would send the mail out on the fifth week. And we’d say to them in the direct mail we’d just simply say something like, did you realize it’s nearly six weeks since you last had your hair cut? And then we used to say; hi Jane is your hair feeling a little bit long over your ears? Is the top a little bit too heavy? Is there too much regrowth showing through from your color now? Well the reason is it’s six weeks since you had your hair done. Here’s our phone number and you say, if you book by Friday 6:00 p.m. we’ll knock 10 percent off of that appointment for you. And what’s 10 percent when your company is trained to sell up or leverage every client that came in anyway? Knocking 10 percent off was absolutely nothing anyway. So, you know JP, you just have to look deep into this. Well not deep, just get ideas from different businesses as well. Don’t just look within the business that you’re in. Look outside to different businesses that are completely unrelated to what you do to get ideas from them as well.
Alan: What’s the best idea you ever learned outside of the salon industry that you applied to the salon industry and how did you apply it? The best idea I ever got for a salon was – I’m not quite sure if you have these in the states but surely you do. You know, rather than buying a ticket for the football games, the soccer games, for just one ticket on the gate you can buy it for the whole season.
JP: Yeah, a season pass, a season ticket.
Alan: We just got a season ticket. So now this is years ago before people were doing all this kind of stuff. And this was the best thing I ever discovered for actually keeping clients in the salon. What I thought was well hang on, these guys are selling a year’s seats in advance. Even if these guys don’t turn up. That’s what they do in gymnasiums, as we know. You know, people paying for these health and fitness clubs. But do they go? Well no they don’t. So what I actually started doing was I actually used to sell a year’s hair dressing. So rather than actually expecting to come in -- say for example, we would do the math and say we used to work it, okay they come in on average seven times a year. Well we would let them have a discount price. And also they would then have a season pass for the salon. And what that would do JP is one, it would create a kind of slightly indifferent loyalty to the business because you’re always going to have occasions where they’re not happy and they want to leave. But then they’re thinking well hang on, I’ve paid in advance for my hairdressing. So if I leave I’m going to lose all that cash. So, and you know, they may be unhappy one time but they’re going to be less fussy the next time. It’s usually you can work it out. So it kind of created a thing where they were a bit freighted to leave the salon because they bought the advanced ticket and at the same time the advanced ticket was based on a rewards system. So every six weeks they would build up their reward. And then every 18 weeks, which was their third visit they could then cash their reward in. And 18 weeks they could get everything for half price or at the end of 36 weeks, I think it was, they could either have a color, or a permanent wave, or one of the big heavy services for absolutely free. So it was a good system.
JP: A loyalty program in addition.
Alan: Yeah, it was loyalty built into the season ticket and it worked well. It worked very, very well. I mean the truth is the best thing that we ever discovered in our business was without a shadow of doubt direct mail. I mean direct mail just exploded that business from 60,000 (£) pounds a year to quarter of a million, which is kind of half a million dollars really. So it was pretty affective.
I’ll tell you what I did with another guy. This was guy who selling prestige cars again. Now this was an unusual company because the father of these two young guys, he actually brought Volkswagen and I think it was Saab. This was years ago now. I think it was Saab into the UK as a franchise, one of the very first to do it in the 60s, or 70s, or something. I don’t even remember. Now what was really strange about this is this guy literally had a room full of custom cars from donkeys years ago. I mean these cars went back for decades. Now when I did some work with these guys – in the U.K. we pay a lot for our cars in the U.K. So we can save quite a hefty sum if we actually import a car from Europe. The same car you can buy in the U.K. say for 20,000 (£) pounds you can probably buy in Europe for 13,000 (£) pounds.
JP: Wow.
Alan: So the difference is pretty substantial. And to import probably costs 1,500 to 2,000. So it’s a big savings. So these guys I did some work with they thought well if we can bring these cars over to the U.K. and put them in our for call we can sell them at a killing and still sell them cheaper to the consumer. So I said, well hang on. Why don’t you do this? Why don’t you sell the cars before you actually order them? Actually presell them all before you get them to the for call. And this was a kind of a little bit radical thinking for them although it’s nothing unusual. But they thought it was a bit of a weird way to go. So basically what we did is we stripped down this database to have this monster database and we culled out all the sports car buyers from a couple years previous, say two, three, four years ago. I said, what you need to do is -- this was a brand new -- I can tell you the car was an Audi Roadster. I said look, this is a brand new Audi Roadster and what we need to do is make a big song and dance over the whole thing and let this database know. And I think there was only a couple thousand. But let this database know that you’re bringing this car into the country. These cars only cost 31,000 (£) pounds. They’re going to be able to buy it from you for 24,000 (£) pounds. Let’s make a massive song and dance. And we’ll do the math for them in the lesser. We’ll say to them you can come in. Have one of these new Audis. We’ll give you XYZ for your car based on these criteria. And also this is exactly what it’s going to cost you a month. So you’ll be telling them what it’s going to cost a month. You know what JP? We sold 18 of these Audi Roadsters before they even landed in the U.K. It was just incredible. 1.2 million. It was just unbelievable. It was a fabulous, fabulous experience. And since they actually really got into database marketing in a big way. I know for a fact they don’t really do it now. They just concentrate on doing it the hopeless way, which is advertise to new clients and hope they come in.
JP: Crazy.
Alan: Yeah.
JP: So…
Alan: Now JP I’m losing track now. So you’ll have to call me back tonight.
JP: Well let me tell you what I’ve got so far okay?
Alan: Yeah.
JP: So far I’ve got up at the top you kind of mentioned leveraging your client’s network and contacts. So I wrote that aside. But then specific things we’ve talked about is the add-ons or upgrades, up selling them. Another thing we’ve talked about is building the relationship with the clients using direct mail. Using --actually getting into their -- having an interest in them. The next thing I’ve got is lost client reactivation. And the next thing I’ve got is data mining. Actually building a database and using that information for getting more sells out. The other one I’ve got is referral marketing and you talked about that, expanded on it. The next one we have is how to increase the frequency by getting them back in; and the inducements and possibilities there. The next thing I’ve got is selling volume by selling like a season pass or a season ticket. Looking at over the lifetime of a year or whatever what they would normally purchase and then giving them some sort of discount or inducement to get them to buy it up front, which would be a huge cash flow generator for any small business. The next is, it was sort of tied into your selling volume. But I separated it as loyalty program being another way to get that business growing and generating more business faster. I wrote down direct mail. We may actually separate that out as a tool rather than a technique. But I think that’s an over riding thing that you use in almost all of these different mechanisms.
Alan: Yes.
JP: And then the final one was preselling. In other words, getting the orders first to generate fast sells and to generate cash for the business.
Alan: Sure.
JP: That’s a lot.
Alan: And I tell you what. Even as we’re talking now JP I’m just thinking as you were saying those things I’m reminding myself of the things I’ve missed. So when we actually get the document back I’m sure it’s going to be expanded pretty much with a few more examples in there as well.
JP: Yeah. That’s a fantastic piece my friends. That’s really good stuff. That’s the thing. As somebody reads this or is exposed to this and can’t pick up some ways to quickly grow their business they’re just not paying attention.
Alan: That’s right.
JP: Because it’s here. This is fantastic. Before we ring off I want to talk… Do you think that will give you enough?
Alan: Yeah because look JP I’ll tell you all I really want from this call. I want somebody to give me the Word document and then I can build on it. That’s all I really want.
JP: Yeah.
Alan: So as far as I’m concerned I think we’ve covered loads of ideas. Maybe not in order but we’ve covered a lot. And it can all be expanded on pretty much probably to a better degree really.
JP: Sure.
Alan: Yeah, that’s fine. I think that’s enough.
JP: We’ve got a good framework.
Alan: Yeah.
JP: So let’s set that aside for just a second.
Alan: JP just give me one second.
[Sound bite of telephone call for Alan from 45:57 to 46:22]
Alan: Oh, women!
JP: What is she buying today?
Alan: You know I’m terrified of asking. Really I just said to her, I said please don’t buy a new sofa. We’ve got a bit of a -- we have a really good friend whose husband just left her. And this guy is just a complete waster. I don’t mind the guy actually. He’s okay. But he just literally walked out on his wife and two young kids and went living with a woman down the road and she’s got a couple young kids. And he’s been there six months and now he wants to come back and go back to the kids and it’s just a complete mess. Honest I don’t know what’s up with these people. They’re completely mental.
JP: Yep. Crazy.
Alan: Yep.
JP: Let’s talk a little bit about San Francisco.
Alan: Sure.
JP: What is the – this is a two or three day event? What is it?
Alan: Okay. I’ll tell you what it is JP. First let me just put you right on the ground level. This is actually one of my mentor clients. I’m actually doing it with him. Basically the guy paid me to train him how to put on an event, live event. Now I’m very, very particular who I choose for these kinds of clients. They pay me a hefty sum. It’s anything between $10 and $20,000 and it’s just literally phone advice. So they pay me a pretty hefty sum to take them through the whole process but they get their money back anyway so it’s no big deal.
JP: Sure.
Alan: But this guy has got some really -- he’s very high up in the business community in San Francisco. So he’s got millions of contacts, mega contacts. He’s in the local – he’s in all the local, you know the business commerce things and everything. Plus he’s – I can’t remember his title or position. But he’s very high up in San Francisco University. And it’s one of these kinds of more expensive higher areas of learning where rather than paying, I don’t know $1,000. Their parents pay $10,000 or whatever it is.
JP: Okay.
Alan: So it’s a much higher end client really. So the target market for this is: one his existing business community who establishes businesses. But also we’re targeting these kids coming through university because they do get fed high-end causes apart from their own university training. So the actual two days itself --it’s actually three days but the third day is a bonus day that Mike sure likes to do because he sells a lot in the back of the room. So we kind of start there and it’s a good value day really they get if they don’t buy. You show them some billing stuff. So for the two days that we’re there doing all the other stuff it’s just really showing them how to do their own business without using all the traditional rules. So in other words, you know, I don’t know anything about your background JP. But how does an ex hairdresser who walked out of school with no education at 15 become, you know, a six figure entrepreneur traveling all over the world teaching and educating? How does this guy get checks in the mail for $50,000? How does… You know, what we’re showing people is real life front line business, how it really works. And you know, the whole purpose behind it is really expand their thinking, expand their thoughts to give them some pretty amazing ideas on how to build a business. Because all these guys have all gone through university and they’ve gone the traditional route. And JP you know what it’s like dealing with these people in business. You know you talk to them about direct mail and they freak.
JP: Yeah.
Alan: They just don’t understand anything like that. So even if we take them through basic stuff it’s still going to be pretty powerful information for them.
JP: Yeah, like an atomic bomb.
Alan: Yeah, that’s right. And the good thing about this target is they’re all – it’s a pretty wealthy bunch we’re targeting here. It’s not like they’re a newby that they don’t have pennies to rub together. This is a really strong target for this particular event.
JP: Tell me about the model of the first two days then. You mentioned 90 minutes for me. Is everyone going to do 90 minutes or how does the whole thing work out. I don’t know are you doing any hot seats, and panels, or anything like that?
Alan: Ah right, okay. We’re going to be doing some kind of hot session for definite. I’ve not worked it out yet. I’ve not gone that far. The actual thing itself is you know, you do your 90-minute presentation and you know, you can make an offer at the end of it to sell in the back of the room. And it’s as simple as that really. I mean that is the formal. I don’t know if it means Steve is going to be doing an extra session each. I’m not quite sure yet because what we’re going to try and do is we’re going to try and up sell as well some one-on-one. I’ll tell you what I always do JP when I do my presentation. I do my talk and, you know I’ve never seen anyone else do this yet. And why people don’t do it I don’t know. But I always do and it’s pretty successful. I do my presentation for the 90 minutes. I do my sales at the back of the room, which I usually do pretty well on. The last one I did I did $90,000 in just a small seminar room so that was pretty good.
JP: What price point?
Alan: The price point on that was 1.997th. That was U.K. pounds. That wasn’t dollars. So it’s three to four thousand dollars. What was I saying? Yeah, what I do is I do my presentation as normal. I do the sell at the end. But what I do is I always offer them maybe one or two slots at one-on-one consultancy and they buy six hours of me for $5,000 and nobody has never not taken it yet. So in actual fact, not only do you do the presentation for 90 minutes and make a killing but you can also spend, even if you want to do one. You can also spend five or six hours with someone on a one-on basis. You know, this is how hard faced I am. I even make them take me for dinner. We go for dinner, have a nice meal, keep it very, very informal, and basically I let them pick my brains. I did one in London, which was a little bit outrageous. I offered a $50,000 package for anytime telephone and e-mail access but no face-to-face meeting. And in that $50,000 as well I would review their copy, and review their system, etcetera. And I had three people go for it. In actual fact I only took one. But you know you just have to be confident enough to stand up there and be really hard faced. But I think what you have to remember is when you’ve got volume of people in a room there is always somebody in there that wants that one-on-one attention. You know, there always is.
JP: Especially when you don’t offer it.
Alan: Yeah. You know if people say no, so what? It’s no big deal. So basically just that everybody will be doing -- I need to know roughly what you’re going to cover.
JP: Sure.
Alan: So there’s no cross over.
JP: Sure.
Alan: You pitch at the end. I’ll get a schedule soon, which will break down what everybody’s doing and that’s it really JP, back of the room sales.
JP: Now, when you’re doing your seminar it’s give, give, give information? Your pitch at the end, how do you transition into that at the high-ticket sales like that?
Alan: Well, you know you’ve gone to a lot of seminars and you kind of know they’re holding something back. Well, what I tend to do is I don’t hold anything back. I give them everything. But I think the important thing is you can’t give them everything out because you’re going to sell at the back of the room because if you do you actually have got nothing to sell.
JP: Yeah.
Alan: So you have to -- what’s the best way to describe it? I’ll try and give you an example. One talk I did, I think this was the Australian one. I just based on how to actually write for the Web and to layout Web copy for Web sales. And it was all related to search engine optimization the copy. So, in other words, if somebody picked Google or Yahoo they would type in, you know, second hand red Ferrari or they would type in sports car. So, showing people type in very, very specific things so that when they get to your Web page, does it say something like you’re looking for the perfect second hand red Ferrari. And it was all along those lines, you know, how to do Web copy and search engine copy. And the offer at the end of it was a copy write course I have, which is the Advertising Muster class. Now in actual fact, I didn’t really reveal anything from the course. The talk was directly related to the course itself. So you know, there’s got to be a smooth transition and this is where you can do like a mentor package, coaching packages, which personally I don’t do now. I have one or two guys that I coach. As a class I definitely don’t do it now because you always get people who just don’t turn up, you know. And this may go on for three months, four months, and suddenly say I’m never had my coaching package yet. I want a refund. It’s just a complete pain that stuff. So at seminar the best thing is they walk away from stuff freely. It depends really. If you feel a crowd is price sensitive. You know the good way to do it is to make them an offer as a lead generation into your bigger thing. So you may bet 20 people buying into your lead generation offer, which may only be something like $500. But you can always back end those people who bought into that. You know, with the $500 they’re going to be very happy. But you can back end that offer with something that’s worth $3 or $4,000. You know Steve and Armand do that quite well at their seminars when they talk. They’ve got a feel for the crowd. If nobody’s buying they go for a low offer and they’ll always get a decent percentage of people buy in on that. Well, actually they’ll buy into the back end at some point.
JP: Are you having every single piece of your stuff there on site or do you send stuff out afterwards?
Alan: Send it out. Don’t take anything.
JP: Okay.
Alan: I think it’s worth taking one to let the people see.
JP: Sure.
Alan: You know, if you don’t want to carry it just mail it over to the hotel or to my partner Andre. You can mail it to his office. That’s what I’ll be doing. I mean I tell you what JP. When we were in Los Angeles J.J. Cox, have you heard of him?
JP: I’ve heard of him, yes.
Alan: J.J. Cox shipped over 25 -- he actually -- Steve Pierce was annoyed about this because Steve used to do this little business brief case. And used to sell his business in a case. So J.J. thought well, I’ll copy that. And he did and Steve wasn’t happy. And in fact Steve actually didn’t come then because he had a problem with his business so he couldn’t come. So J.J. had 25 cases shipped over to LAX and he didn’t sell one.
JP: Wow.
Alan: So he literally had this back of the room, which looked like a skyscraper with all these cases and you know, in actual fact. I don’t know if this is right but I think he just them there.
JP: You’re kidding?
Alan: No because there’s nothing in these cases. They’re only cheap. Because all the case is, is just filled with a promise and the promise is that you’ll get your business in a box ready to roll. It’s just. It’s just a quick and go within six weeks.
JP: How funny.
Alan: I know. I mean the truth is that he was selling fresh air actually. He was selling just absolute garbage.
JP: Is that why it didn’t sell?
Alan: Yeah. Well, on that particular occasion -- look I don’t know if you know anything about J.J. Cox? I’ll just tell you a little story. He was a kid that made $100,000 just doing one mail shot with a guy called Mark Goldman. And if you’ve heard of Mark Goldman he’s a kind of a joint venture guy.
JP: Yeah, I know who he is.
Alan: Right. So he did a thing with him and McCauley Howbert and some other guys. But he was only something like 16 at the time. So he became known as a bit of a hot shot very, very quickly. And somewhere along the line he got invites to come to the World Internet Summit. So he came over to Australia with us. And actually you know to be really frank the content came across as very, very believable because basically what he did is he did the math. And the math was that -- one little thing you won’t know about J.J. is he’s a champion gamer. He plays Halo II.
JP: Okay.
Alan: So he’s in the top ten rankings or something. Now he originally thought well, hang on. All these guys want to download cheats and walk throughs for these games. Why don’t I create these Websites and based on the fact that there’s 5 million people in the Halo II Website playing every day. If we got conversion of one percent at a worse case scenario these Websites are all going to be taking $50,000 a month straight away. Now when you see it all written down and laid out it sounded very feasible the whole thing. And I was thinking blimey that sounds pretty good. There’s 380 people at this room at [unintelligible at 61:12] and when he did his offer at the end it was basically I’ve only got 17of these sites. If you want one come and grab fast. No joke JP it was like a prison break running to the front of the stage.
JP: Are you serious?
Alan: Yeah honestly. You know how many he delivered them? Zero.
JP: No way.
Alan: Absolute zero. So all these guys that invested $7,000 into this project got nothing.
JP: Oh, man.
Alan: It was a scam. It was a complete scam. I was ashamed to actually be in the same room with the whole thing, you know. And there was a couple of really good clients of mine got ripped off on that. So for some weird reason he still got invited to LAX and he still got invited to London. And he bombed at both. He just completely bombed. It’s a shame.
JP: Wow.
Alan: I’ll tell you what’s a real shame on that one JP. When we were in Asia me and J.J. shared a little beach hut for a few days. It was me, J.J., Morgan Westerman, Curt Christiansen. We went back to the beach on the east coast of Malaysia. And we stayed in these beach huts for four days. It was just so cool. I just can’t even tell you how amazing it was. But when I got to know J.J., because I kind of thought he was a bit of a scammer to be honest. But when I soon got to realize was that this kid is actually pretty brilliant. And in probably three, four, maybe five years he’ll be red hot. But at the moment there was too much youth still inside him. And that what all these mistakes are. But I think when he gets over that -- but the problem is on-line. Once you’ve got a bad reputation it’s just hard to pull it back. And that’s why J.J. gets invited to nowhere because people don’t want the association.
JP: The guys who sell -- consistently sell in the back of the room and are very successful at these seminars. What do you see as any of the actual insider secrets to what is making them a success? And the reason I ask that is remember I told you that if I’m going to shift my business and how I make my money from fee based only to selling a lot more back of the room. I want to be darn good at it.
Alan: Well, I’ll tell you what. There’s a couple of things they all do, which I haven’t done yet. And they’re all John Childer’s protégés.
JP: They’re what?
Alan: Do you know John Childers?
JP: Uh-huh.
Alan: No? Well. Okay well, go to www.speakingwithjohn.com.
JP: Speaking with John?
Alan: Dot com yeah.
JP: Okay.
Alan: And the guy’s called John Childers. John Childers he is THE, he is THE speaking god. And these guys all worship at his feet. And whatever he tells them to do they do it. And man honestly. I watched Steven Pierce do $1.2 million at the back of the room, $1.2 million for a 90-minute talk. And I tell you they have a couple things in common these guys, which is something I’ve tried to pick up very quick. One of them is proof. They are absolutely proof-laden these guys and they show so much proof that you wouldn’t believe it.
JP: Okay. I mean basically a long sales letter then?
Alan: It’s what?
JP: Their talks are basically a long sales letter with all the right components of a good sales letter, right?
Alan: Yeah. I mean basically that’s what a talk is anyway JP. You know you’ve got to grab them at the beginning, and then pull them in, and convert them, and prove it, and all the usual stuff.
Alan: But the proof they show is just overwhelming. Another thing they do consistently, which I don’t know if this is actually a big issue. I may be wrong. But I’ve seen a difference between speakers who do it and speakers who don’t. And it may sound like nothing because if you’re a paid speaker you would do this anyway. But I see a lot of amateur speakers who kind of mess about and they laugh a little bit. And they don’t seem to take it quite so serious on stage; although the proof and the results all seem good. But they don’t seem quite as serious. Now I sometimes wonder if the knock on affect mentally for the people listening to the talk is, is this guy who he really is? I mean have you ever seen Steve Pierce talk?
JP: Well just on some video samples off his Website.
Alan: Right. Well this is Steve Pierce right. This is a guy who’s six foot something and he’s just as wide. He’s a big fella. He walks up and I’ve seen him dressed in training shoes and…
JP: A jersey basically.
Alan: Yeah, t-shirts and all that stuff as well. Now he walks up to the front of the stage and he’ll just walk up. He won’t say anything and he has this really great presence and he’ll just maybe pick up a drink. He’ll stand there look at the crowd. He won’t smile. No expression JP. And he’ll just take a drink out of the bottle. Then he’ll walk to the front of the stage with his arms folded. And he’ll stand there for 30-60 seconds. Now you know if we went quiet for 30 seconds that feels like a long time.
JP: Yeah, yeah it’s just eternity.
Alan: Yeah, and he’ll stand there and stare at them for 30 seconds. And then he’ll say sometimes. He’ll start off his talks and he’ll say, today is the brokest day of your life – or for the rest of your life. And it just kind of grips because people say, what on earth is this guy talking about? And his presence is just fantastic. So you know, I think Armand is the same. Armand is a little bit more of a free spirit but Armand did something last time, which was just outrageous and I’ve seen it copied since. But his bonuses were just unbelievable. So Armand sold this package, which is basically all his software thrown together.
JP: Okay.
Alan: Now he showed. He said – you have to see him during his talk. He’s winding up his talk. He’s going now if you buy all this software it’s going to cost you $27,000. He said but today you’re not going to pay $27,000. Then he does it on his PowerPoint. Then it clicks a slide. You’re not paying $18,000. You’re not paying $15,000. You’re not paying $10,000. You’re not paying $7,000. And he goes down and down. And he says, how does $1,900 sound? And the crowd goes, yes. Well, your not paying $1,900 and he just goes on. And he goes not only are you not paying that but he says I’m going to throw this in. And I’m going to throw that in. And I’m going to throw 50 percent tickets off to the big seminar. And JP it goes on, and on, and on. And he says at the end. He gets this form and says, if you think that this offer is worth $1200 grab this form right now. And there is a flood of people jumping out of the seats and ripped the form out of his hand. His finish last time I saw him in LA was just -- it was red hot. It was brilliant.
JP: That’s funny.
Alan: Yes.
JP: So he’s doing the infomercial thing. The big back off; back, off, that kind of thing?
Alan: Yeah, really. These guys that do real well JP they have that same kind of think in common. It’s content packed, proof packed, lots and lots of different evidences from different areas. Lots of different things of what they’re doing, what direction they’re going in. And evangelical clients and all this stuff and that’s how they do it. They have a very serious side to them as well, which I think does make a difference actually live. I think it really does.
JP: That they take it seriously.
Alan: That’s right, yeah. Yeah. If you’re in business and you’re going to invest $3,000 you want to know that this guy is going to deliver.
JP: Yeah.
Alan: Because we both know that $3,000 to the average businessperson, well that’s a long of money to just blow. You know, and actually they see as high risk as well. So I think you have to tie that into the talking as well, definitely.
JP: Now, if this is going to be some people who are already in business, some people who are in college thinking about going in business; how do you intend to approach that strategically and the kind of product you offer? Or will it matter to you?
Alan: Well, it does matter but the way I’m doing it is the products I have is one, the strategically it helps anyone who’s going to start in business avoid all the mistakes every business makes. Two, if you’re in business it helps you to kill those mistakes you’re currently making now and how to leverage and explode your business overnight. So if it’s a start up business how can you start your business, you know, with a rocket up its backside rather than just slugging along hoping it’s gonna work? And if you’re in business, how can you grow it substantially within days, within weeks, within months? So that’s the way I do it JP on mine.
JP: Gotcha.
Alan: Yeah.
JP: All right. It’s going to be fun.
Alan: Well listen. Let me ask you a couple of things. Who is JP Maroney? Who are you? Where have you come from? What have you been up to? What’s your training? What’s your education?
JP: Well, I started my first business when I was 19 just right out of high school. I never went to college. I really had a dream of building a publishing empire and over the next few years had plenty of failures. By the time I was 24 I’d failed three times and was bankrupt and knew that I didn’t know how to do it and began to look for other people who could sort of help mentor me and teach me the ropes because I’d never been taught that in my life. And so that’s -- I started over. I started a magazine for people age 50 and up. And went out and in about six weeks time put it in the black; and sold advertising running around with a little dummy saying it’s going to look kind of like this. We were off and running. A friend of mine had come back from California and shown me a model of a magazine like that and that’s sort of what I built it around.
Alan: Yeah.
JP: And for the next three and a half years I built that company and had a magazine in three different states; one in Texas, one in Oklahoma, and one in Louisiana.
Alan: Wow.
JP: And in 1999 I sold the company. And when I sold it I didn’t really know what I wanted to do with the rest of my life. I wasn’t very old and so I was sort of considering a lot of different offers and opportunities. And one of the things I had done for a long time was speak for fun. And then I also would go out and speak to promote my business. I used to have a speech called -- my magazines by the way were for people 50 and over so it was targeted toward the older market.
Alan: Yeah.
JP: And so I used to give a speech at civic clubs, and chambers of commerce, and stuff like that called, “Gray Hair Everywhere, How to Profit From the Fifty Plus Market.” And every time I would give the speech I’d sign up advertisers. You know, I’d talk about healthy the market was, how fast it was growing, what you could do to tap into it, etcetera. And then I’d present my magazine. And so I knew that I liked to speak and so I went out and decided I was going to proclaim that I was a speaker. And in the first six months I sold $2400 worth of speeches.
Alan: Wow.
JP: And I knew that I didn’t know what I was doing again; and so I went had had breakfast, or lunch, with the president of the Speakers Association in Dallas. And I said I want you to give me the names of five people who’ve actually done it, they’re proven successes; he gave me some names and one of the names of a guy that he gave me was a guy who’d been doing it for about 30 years. And long story short I met the guy. He taught me a system and he actually -- I’ll tell you this story another day when I have a lot more time but I’ve got a 10:00 call.
Alan: Yeah, sure. Yeah.
JP: He short cutted my learning curve really fast. He said, you’re me 30 years ago and he took me under his wing and taught me everything he knew. And two weeks later I went out and in two and a half days so $12,500 worth of speeches and I was off and running. And then he taught me how to sell videos and the whole video product business; and that’s where I’ve made a lot, a lot of money over the past three and a half years. And so then I had people coming up to me all the time at speeches afterwards and saying, you know that sounds pretty good why don’t you -- would you be wiling to come in and teach us how to do that in our company? And I said, no I don’t do consulting. And I turned down a lot of business and finally about a year and a half ago I took on my first consulting client and found out I was really good at it and enjoyed it. It’s just been a really rapid growth from then opening up my mindset. You know, exposing myself to things. Jay Abraham was one of the big, I guess, exposures for me to understand what was really possible.
Alan: Yeah.
JP: On how to put deals together and that’s when I started taking equity in companies. I started taking performance deals and my income just skyrocketed. So that’s kind of the short story and I just got paid, you know, hired to go and speak. I’ll be in Tucson Arizona next month and I still get a big fee for that and I won’t sell any product because it’s an in-house corporate deal. They’re actually pre-buying product. So I don’t mind doing that but I think the opportunity is there for me to do this other stuff.
Alan: Sounds good.
JP: So that’s kind of the future for me is evolving the model.
Alan: Yes, yes.
JP: That’s why I asked you in that e-mail about maybe doing something in Dallas together.
Alan: Yes.
JP: If you’re interested in doing that.
Alan: Yeah, sure.
JP: Because I think there’s a big future for it as I keep haranguing on the board is that I think there’s so much that can be done off line, and seminars, and getting people in a room, and all of that is one way to do it. I know that can be a risky proposition too.
Alan: Well I mean, still in a seminar it’s not easy, you know. We’re doing one at the moment and so far 600 and -- think it’s about 650 tickets have gone now, which is a lot. But I mean I’ll tell you this story again because I know you need to go really but this guy he’s had this seminar company for a few years now. And what’s really weird he never makes a penny. I said, well why did you do it? He said, because that’s what I do. I said, well you must be crazy. So within 30 minutes of discussing I actually cut 30,000 (£) pounds off his cost. He just couldn’t believe it. So in actual fact what we did is we’ve gone in -- this whole deal is a 50/50 split on the whole thing now because basically I’m handling everything for them really.
JP: Okay.
Alan: But this guy JP-- did I tell you about the sales letter that was doing 100 percent? Did I mention that?
JP: The what?
Alan: A sales letter that was doing 100 percent conversion?
JP: No way.
Alan: Right. Don’t mention this on the board because I don’t want anyone to know really.
JP: Sure.
Alan: You know, there’s some things I never really share. Basically this guy I’m working with now he’s an absolute red-hot at telephone sales company. They just sell on the phone. And he’s got a little team. His life kind of fell apart last year because his wife left him. He was living in Cyprus on one of the Greek Islands and to cut a long story short he came back to England just a few months ago to kick-start his company again. This guy on the phone is just unbelievable. He is just absolutely red-hot. He converts everyone. So basically he’d never used the Web before; just never used it. He had like a brochure Website. That was it.
JP: Um-hum.
Alan: I said, listen what I’ll do is I’m going to write you a sales letter. And actually the sales letter is awful because it never provided any information on the speakers so it’s a little bit disjointed, not even finished. So what we did, I said this is what we need to do right because I wonder if we could hybrid the whole thing? I said what well do is when people – when you make your calls send them to this – it’s called www.millionairemindevent.com. Send them to Millionaire Mind Event. They’ll read the sales copy. Don’t put a buy now button on it. We just won’t even put a buy now button on this thing. Then phone them back and try to convert them. Now this guy, he phoned me back. I said, how’s it going? He said, oh, it’s a piece of cake this stuff, piece of cake. I said, well is it going well? He said, oh yeah. Every single one buys. I said, every one? He said, every single person I’ve sent to the Web page, I’ve left them for an hour or so to read it. I phoned them back and I’ve closed the deal. And the truth is it’s actually over 100 percent because he’s up selling on everyone two, three, four, tickets because there’s 3,000 people in this room. So for the first 1,000 he’s selling them for $200 just to get the first 1,000 in because it’s going to be back of the room sales. So you know, what I’m saying JP is these guys will think you just have to be on-line and that is it.
JP: Yeah.
Alan: You know, you’re merging something as old as Adam really. You know, telephone sales and just send them through to a Web sales letter. And it converts at 100 percent. It’s just completely outrageous. So you know, a little bit of a twist on sales letters there.
JP: That really is. That’s a neat little tip.
Alan: Yeah, yeah. Okay then JP. So listen, I don’t know if we’re gonna need to speak again before San Francisco? If you need to speak to me you know where I am.
JP: Sure.
Alan: Just give me a buzz and we’ll talk.
JP: Sure. I’ll get you the stuff over and then I’ll get the transcript or something of this thing done and over to you so we can get this chapter out.
Alan: Sure yeah. And listen, if I don’t respond to stuff just hassle me because I’m really, really bad at -- you know, I’m just not organized at all.
JP: No problem. I’ll hassle you.
Alan: If there’s anything you need give me a shout.
JP: Sounds like a deal.
Alan: Anything I can do for you.
JP: All righty. You take care man.
Alan: All right JP. Thanks, bye.
JP: Bye, bye. All right.
End of Interview at 81:20 minutes
Transcribed by Patricia Unger
The Perfect Paper
March 27, 2006