Wednesday, February 13, 2019, Delray Beach, Florida


From My Work-in-Progress Basket

Are You An Information Addict?

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“Let’s have lunch,” DK said in his email. “There’s something I need to talk to you about.”

Two days later, we were eating chopped chicken salads at City Oyster on Atlantic Avenue. We talked a bit about family news, but it was clear that he wanted to talk about a question that was on his mind.

The question: Should he spend $100,000 on the highest level of an internet marketing program that he had been looking at?

“It looks really good,” he said. “But I’m not sure it makes sense for me to invest that kind of money.”

“A hundred grand is a lot of money,” I said.

“But you get an awful lot for it,” he explained. “They do all the technical stuff for you, which I’m not very good at. All I have to do is come up with the product idea.”

The waitress filled our drinks.

“So if you invest in this marketing program… what kind of products would you sell?” I asked.

“I don’t know,” he said.

“How about this: If you had all the money you could ever need, how would you spend your time? What would you do to give your life purpose?”

“That’s a good question,” he said. “Actually, I like the idea of purposefulness. Maybe I’d do something along those lines.”

I told him that if I were he, I’d not spend a hundred grand on a program that gave me marketing and operational tools until I knew what I was going to do with them.  READ MORE

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From My Work-in-Progress Basket

One Thing & Another

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Word for the Wise

Preternatural (prih-tur-NATCH-uh-rul) – existing outside of nature; extraordinary. Example from George Will: “Beyond his preternatural affability, there is some acid and some steel.”

 Champagne Trick

A raisin dropped in a glass of fresh champagne will bounce up and down continually from the bottom of the glass to the top.

 

From My “Work-in-Progress” Basket

Principles of Wealth: #11 of 61

To acquire wealth, it is helpful to be able to define it. Fewer than one in ten people can. The answer is “stored value.”

That kid driving the red Ferrari? The doctor with the huge white house on the ocean? The attractive older woman wearing the Oscar de la Renta gown?

They look wealthy, but you can’t tell by their possessions. They might be poor. They might be worse then poor. They might be in debt.

What about your friend that is “pulling down two hundred G’s” a year selling hedge funds? Or that obnoxious kid you met in law school that charges $700 an hour for his services?

They may be rich. They may not be. Income can be an important factor in creating wealth but it is not a measure of it.

There is only one way to measure wealth – and that is the amount of value an individual has set aside for future use.

In financial terms (there are many forms of wealth), we generally refer to this as net worth: the difference between one’s assets and one’s liabilities. I prefer a more stringent definition: one’s net investible wealth. Net investible wealth is net worth minus any assets you plan to keep (and not sell) for the rest of your life.

Making big money and spending big money create the impression of wealth. But true wealth is only what you have put aside for future use.

Quick Marketing Idea: The Emotional Power of Repetition

Why is it that we never tire of hearing our favorite songs?

According Derek Thompson, writing in Hit Makers, it’s because our brains our wired for it. We respond to repetition when it follows certain patterns.

He cites a study on mice:

Exposed to the sound of a B note played repeatedly, the mouse will pay brief attention and then lose interest. But if a minor variation is added – say, the B note followed by a C note – the mouse’s attention will reengage. Not just that, but it will stay engaged for a good length of time even when the “tune” goes back to just a B note.

“A single variation is sufficient to break the mouse’s complacency and return its interest to the music,” the author posits.

Further tests suggested that the most effective pattern for keeping a rodent’s attention was: BBBBC-BBBC-BBC-BC-D. This, Thompson says, “is uncannily similar to the structure of successful pop songs that follow a pattern of verse-verse, chorus, verse-chorus, bridge.”

(It’s also similar to the rhyme structure of some poetry, like some sonnets.)

Advertisers (and propagandists) have long known about the emotional power of repetition. It makes the advertisement more memorable. And it makes it more believable as well. (See D. Trump.)

Suggestion: Lay this pattern over your next medium- to long-term promotional piece before you post it.

Look at This…

https://biggeekdad.com/2018/02/old-man-thinks-hes-younger/

 

 

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Miscellaneous Briefs

“Welcome Gauntlet”

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Every business consultant these days talks about developing “relationships” with customers. They say, quite correctly, that this will lead to more sales, fewer problems, and greater profits.

When you get a new customer, you have the potential to double or triple his lifetime value. By lifetime value, I mean the net dollars he will eventually send you. It starts with the very first experiences the customer has with you. These experiences are crucial. They make an impression that will last forever.

My colleague Dan Kennedy encourages his clients to send what he calls a “stick letter” to new customers. A good stick letter, Kennedy says, reduces refunds by restating the promises and benefits made in the sales letter and then giving them a bonus.

But I think you should do more than that. My recommendation is to create a “welcome gauntlet” – a series of communications that go beyond delivering what the customer is expecting.

A welcome gauntlet should be so good that it not only satisfies the customer, it surprises and delights him. By doing that, you are showing him how much you care about him… and laying the foundation for a strong, mutually beneficial relationship.

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Miscellaneous Essays

The Advantages of Running an Ethical Business

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A year or two ago I got a letter from a small-business owner and “avid” reader of Early To Rise who was struggling with an ethical question.

This woman, whom I’ll call “Renee” to protect her identity, was successfully selling investment software to customers, but she had discovered that 85 percent of them were trading accounts of $10,000 or less. She said that she knew from previous experience as a broker that it was very difficult to make money with such a small capital base. She wanted to know how she could continue to sell the software, knowing that most of her customers “were not going to have a profitable experience because they are starting off too small.”

The answer is easy. Selling bad products to your customers (or good products to customers that can’t take advantage of them) is a very bad idea.

It may seem like a smart thing to do – if, that is, you have no scruples. But if you have a conscience, the shame of what you are doing will take its toll on you. And the expense of that toll will be far greater than whatever monetary compensation the business is likely to bring you.

And even if you don’t have a conscience, it is still not a good idea to sell products and services that can’t help your customers. In the long run, you will end up working harder and harder to make the same amount of money (whatever it is), because your customer base will be constantly slipping away – like sand running through a sieve.

There is, indeed, a sucker born every minute – but most suckers get wise after being cheated. And they will pay you back by badmouthing you to everyone they can, including regulators that have the power to put you out of business.

I understand Renee’s temptation to come up with a rationale to keep selling her software programs. They are well designed. The advertising isn’t false. And she isn’t holding a gun to her customers’ heads … they are choosing to buy from her.

The only problem is that the wrong kind of customer is buying the programs. In fact, most of the buyers are the wrong kind.

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Miscellaneous Briefs

How to Be a Great Negotiator

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You don’t have to be tough. You don’t have to clever. You don’t have to be ruthless. You must understand that in the long run the most important things you negotiate – the things that will make you wealthy and improve your life – are not transactions but relationships.

With that in mind here are some tips

  • Figure out what value it has to you – what dollar range you would give it if the shoe were on the other foot. Never deviate from that range.
  • Make a judgment about the person you are making a deal with. Don’t negotiate with people you don’t trust.
  • Always get the other person to make the first offer.
  • Knowing beforehand what you think is fair, be nice but absolutely immovable.
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Miscellaneous Essays

10 Dumb Ways to Start a Business (and Waste a Ton of Money at the Same Time)

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Entrepreneurship is based on selling. You test the market with a product you think will sell well. If it does, you keep selling. If it doesn’t, you try something else.

This approach lent its name to my best-seller: Ready, Fire, Aim. The main idea is that to start and grow a small business you must develop a pragmatic, action-oriented mentality. Rather than spend too much time and money refining theoretical ideas, you develop a prototype quickly and then see if the market will buy it.

As I said in the book, for every business that fails because of poor planning there are a dozen that never get off the ground because of too much planning.

The Ready, Fire, Aim approach obviously doesn’t apply to surgical procedures and rocket science. But it will be very useful for 90 percent of the new-business ideas you are likely to come up with.

Want to start a business selling diamond-studded collars for kitty cats? Fine. There are two ways to go about that:

• You can spend most of your time and money manufacturing a line of such collars – and only after that is done, start to think about how you can sell it.

• You can make a single collar and go down to the local flea market or your neighborhood pet shop and see if you can find a customer for it.

Most people start businesses the first way. That’s why most businesses fail.

But with the Ready, Fire, Aim approach, you devote 80 percent of your initial resources to discovering an efficient way to sell the product. Once you have done that, you have found the key to successfully market it. With that key in your pocket, you don’t have to worry about all the other problems that will arise in the natural course of business. You won’t have to worry, because you will be able to create the one thing that can solve almost every business problem: cash flow.

Here, in a nutshell, is what I mean by Ready, Fire, Aim:

Ready: Get your product idea ready. Make it good enough to sell. Don’t worry about making it perfect. There will be time enough for that later.

Fire: Start selling it. Sell it every way you can. Test different offers. Test different ad copy. Test different media. Keep testing until you discover something that works. This is your Optimum Selling Strategy (OSS).

Aim: Expand your customer base by focusing on your OSS. As your customer base grows, develop business procedures to accommodate that growth. Hire the best people you can to manage your business. Discover, through “back-end” marketing tests, other products and services that your customers will buy. Use those discoveries to refine and perfect a fast-selling line. As this back-end business flushes cash into your company, invest a good deal of that cash into front-end marketing.

That is the cycle of a successful start-up venture.

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Miscellaneous Briefs

More on Big Ideas

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A Big Idea, in the information marketing business, must be more than just catchy and suggestive. In other words, information marketers must do more than create David Ogilvy’s idea of a Big Idea.

A Big Idea for Ogilvy was a cowboy smoking a cigarette while perched on a horse. That works for selling cigarettes but it wouldn’t work for selling books and newsletters and other information products. In the world of information publishing, a Big Idea must contain within it an exciting, arresting thought – a thought that directly or indirectly promises something that the prospect desires. It must also be immediately ascertainable, intellectually stirring, and emotionally compelling.

A Big Idea instantly drives the prospect toward a foregone conclusion by evoking a useful emotion. A useful emotion is one that makes the prospect want the product. Many copywriters miss this point. They feel that their job is to arouse any strong emotion in the lead. But if that emotion is not conducive to selling the product, they’ve made their job more difficult.

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Miscellaneous Essays

Winner Take All? The Yin and Yang of Negotiating

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Sid had done it. He had convinced the IRS agent to forgive the mistake my partner Joel and I had made. He had spent three weeks with the guy, working mornings, golfing with him in the afternoon, and taking him out to dinner.

If the IRS had stuck to their ridiculous position, it would have cost us $10 million. But Sid’s logic and diligence and charm had persuaded one of its bulldogs to do the right thing.

A month later, Sid’s bill crossed my desk. It was for $85,000. “That’s odd,” I thought. “I could have sworn Sid was billing us by the hour.”

Had he done so, the bill would probably not have exceeded $15,000. Still, $85,000 was a small price to pay for the service he had provided. I signed the invoice and sent it on to Joel.

The next day, Joel called me into his office.

“You saw his bill.”

“Yes, I signed it.”

“I saw that. But you know he was supposed to bill us by the hour.”

“Yes, I know. But what he did was worth a lot more than eighty-five grand.”

“Maybe so, but that wasn’t our deal.”

I shrugged.

“We have to bring him in and negotiate the amount.”

“Okay.”

“But we have to plan this thing. We have to rehearse.”

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