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From: Joe Polish
Tempe, Arizona
Thusday, 2:37 p.m.
July 29, 2009
Dear Friend & Faithful Reader of The Gary Halbert Letter,
Who is the most arrogant, rude and funny son of a bitch I've ever encountered in my life? A guy I liked from the first moment I met him. A guy that not only changed my life, but through what I share below, will change yours as well.
Of course, I am talking about Gary Halbert! And if you’ve ever met him, then you know what I’m talking about…
My name is Joe Polish, President of Piranha Marketing, a Direct Response Marketing Company that transforms people into multi-million dollar success stories… and I was proud to call Gary a friend and mentor for over a decade.
Actually, from the very first day we “hung out”, Gary took me under his wing and gave me an education in marketing which… in a nutshell… took me from “trailer trash… to mountains of cash!”
In this issue of Gary’s newsletter I will share with you a few of the most important marketing lessons I learned from him over the years… marketing lessons that have generated millions of dollars for both me and my clients.
Here’s how it all started…
My journey began when I was a dead-flat-broke carpet cleaner whose goal was to seek out the help of the greatest marketing mind who ever lived. I got started by reading “The Gary Halbert Letter” way back in 1992… back when I was still working my ass off trying to make a living. It never occurred to me that I would one day make my living teaching marketing to thousands of others…
In the very beginning, I spent several months learning everything I could about marketing & advertising… reading all the books and newsletters Gary suggested… and most of all constantly picking the brain of the man himself. I went on a learning frenzy with the same passion that a Great White goes on a feeding frenzy.
Of all of the money-making techniques I learned from Gary, here are 4 that I believe to be critically important:
- Lifetime Value of a Customer/Client
A marketing concept almost everyone talks about… but too few entrepreneurs really follow. Put simply: You need to determine how much money a client is worth to you over the lifetime of your business… because until you do… you don't know how much you can afford to spend to get that client “on board”.
Let me explain further…
Gary taught me that you can be either a transaction marketer and sell something to a customer just once… or you can be a relationship marketer and sell them something over and over again.
He taught me that the real money is always on the “back-end”, which is everything you sell after you've made the first sale. With that in mind, if you can make your first sale (aka front-end) profitable or simply break-even, then you're in the perfect position to start taking on multiples of “new clients” who will, if handled properly, result in an ongoing influx of continual income that will make your bank account explode!
Until I learned this simple concept, I was always focused on just making a one-time sale. Even today, with as many marketers that have written about lifetime value of a customer, and how much it's been put out there, most companies just simply do not focus on the client. They spend all their time chasing after new customers!!!, new customers!!!, new customers!!!, while they neglect the ones they already have. You need to realize that the most profitable lead is the one that has already given you money!
In my marketing business, I’ve been able to take a small niche of professional carpet cleaners and create enormous value for them, and because of the value I deliver, many of them have continued to give me money year after year after year since I've started that business. My company has gotten bigger and better with more profits and better clients, in spite of the ups and downs of the economy… and it's all been based on the premise of knowing the lifetime value of a customer. Of course, if you want to extract maximum profits from your customers, you have to give your customers real value. It's as simple as that.
Okay, let’s say for example that you own a car dealership. To get an idea of how much the average customer will be worth to you over a lifetime of owning your business, let’s take a look at the following diagram… that was provided to me by one of the smartest marketing consultants to the auto sales industry (a guy who started out as a client of mine more than a decade ago.)
Holy smokes! Do you know what that means? It means you can afford to spend a lot of $$$ trying to acquire a new customer for your business. (With that level of profit waiting in the wings for you from each customer, would you be willing to spend $1,000 to obtain a new client/customer?) I sure would. Any time the cost of acquiring a customer is less than their lifetime value, you have yourself a profitable business.
My friend… it all boils down to the “numbers”… which is something I’ll be covering with you shortly. (By the way, if you do own an auto dealership, call Peter Louis Kaczynski at (413) 594-6032 and order one of his marketing kits which he’s designed specifically for that industry.)
Speaking of using IMPACT with your advertising… I’d like to now cover one of my favorite marketing topics which Gary incessantly tried to burn into my mind over the years…
- Your Advertising Must Have Bone-Crushing IMPACT
The problem with most advertising is that it is so boring and so mundane it could be sold as sleep inducers which would probably work better than most sleeping pills.
“Yeah, but Joe, I don’t want to do anything too ‘outside-the-box’ that might be considered crazy or bizarre. After all, I am trying to convey a certain image in my marketplace.”
Okay, let’s talk about that “precious image” for a second. Years ago, Gary told me something which literally has made me millions of dollars. I may not repeat it here exactly as Gary stated it, but, it’s close enough. Here it is:
“When I was young I worried that people were thinking the wrong things about me. Then, as I got older and into a few transgressions, I began to worry people were thinking the right things about me. And then, as I got older yet… old enough to have a little wisdom…
“I Realized Nobody Was Thinking About Me At All!!!”
Words to take to the bank.
Look, I’m not suggesting you start acting like a clown or doing things like standing on your head or promising to eat a bug to get someone’s business. What I am trying to say is that nobody (except you) gives any thought whatsoever to your image, and nobody bothers to read boring “Integrity, Service & Quality” messages. The number one concern of a prospect is NOT you… but the benefit your product or service will give to them. If you really do have the drive to go out and make some serious money and…if you really do have something unique and special to offer your customers… then… tell them… DAMMIT… and…
Tell Them With Impact!
Want an example? Of course you do, you’re a student of Gary Halbert.
Okay, let’s say you’re a direct marketing consultant who’s trying to attract 100 savvy direct-response marketers/entrepreneurs to a $5,000.00/person, "Tell-All" marketing seminar that promises to reveal “killer” INSIDER SECRETS that will give any marketer the capability to easily make $5K PER DAY (or MORE) by simply selling a variety of "specialized information".
Most consultants would probably run some type of newspaper ad (perhaps in a newspaper that local business owners read). The ad would probably state something like...
Business Building Seminar For Entrepreneurs
To Be Held November 20th & 21st, 2009
At the Hilton Hotel In Mesa, Arizona
Terrible! Just terrible! No impact whatsoever.
Want some impact? Okay… try this on for size.
The first thing you should do is obtain a mailing list of at least 1,000 direct-marketers...or better yet, information marketers. The second thing you’ll do is…
Create a newspaper article which you’ll have printed on newsprint-quality paper.
Okay, assuming that the name of your prospect is some bizarre name, like “Eben Pagan”, you’d probably want the headline of your ad to read something like...
“Los Angeles Based Entrepreneur Eben Pagan Attends Exclusive $5K per Person
Business Building Seminar For Direct-Response Marketers And Transforms Company
Into A Multi-Million Dollar Information Publishing Empire... Practically Overnight!"
The “article” would then go on to explain all about the upcoming seminar for direct-response marketers and entrepreneurs, and it would probably start out something like this…
Dear Eben,
Take a close look at the above headline. Read it again. It has a nice ring to it, doesn’t it? If you would like to discover how to make that a reality… if you would like to discover how to REALLY build a highly profitable information-marketing business that generates $5,000.00 PER DAY (or MORE)... more money than any sane person can spend… then this is going to be the most important message you will ever read. Here’s why…. (The article would then go over all the details of the seminar, and would be followed by an irresistible pitch to get the recipient to sign up and send 5 grand into your bank account to attend!)
The newspaper article would then be inserted into an envelope (with an appropriate cover letter) and it would be hand-addressed and mailed out to Mr. Pagan via first-class mail.
THAT’S IMPACT!!!!!!!!
You could mail a campaign like that to thousands of prospects.
(Naturally, each newspaper article’s headline would be customized with the proper business owner’s name & city name.) In total… doing this would probably cost you about 2-3 bucks per piece to send out to prospects.
Something you could certainly afford to do, when you consider that each person would be paying you $5,000.00 to attend. (Plus, don’t forget… that doesn’t even factor into the equation what the lifetime value of that customer would be to you.)
(Oh and by the way, for those of you who don’t know Eben Pagan, he is a very good friend of mine, and an extremely bright information-marketer who is making over $20 MILLION dollars a year selling information now… thanks of course in large part to strategies, connections, insights and marketing secrets he’s learned from me!) ;-)
Onward.
As you’re about to discover, business is all about THE NUMBERS.
Another valuable lesson learned from Gary is that…
- Surprise!!! You Are In The ARITHMATIC Business
If you were to ask a car dealer what business he’s in, he’d probably tell you that he’s in the business of selling cars. (A few of the brighter dealers out there might say, I’m in “the marketing business”.) Both of them are wrong. The truth is… every one of us who are in business for ourselves is in “the arithmetic business”.
Simply put… if your arithmetic doesn’t add up… you won’t be in business for very long.
Let me share with you some words of wisdom which Gary once shared with me regarding “numbers”…
Let's say you spend $1,000 to pay for your advertising. Let's say you are mailing all the letters you can mail for $1,000 or spending $1,000 to run newspaper ads or maybe spending $1,000 on magazine ads. Let's say for every $1,000 you spend, you bring back $2,000. Let's say your refund rate is 10%.
So we have a $2,000 gross... minus $200 in refunds... and minus $1,000 for the costs of advertising. What you have left then is an $800 contribution to overhead. That’s not bad.
Now let's add a 30-day hold into that same equation. (A 30-day hold means that you will not process anyone’s credit card and/or you will not cash anyone’s check until they’ve had a chance to use your product/service for 30 days.) When you do that, here's what will typically happen: You will TRIPLE your response rate. And you will DOUBLE your refund rate. Let's look at the figures again.
We now have a $6,000 gross... minus $1,200 in refunds... and minus $1,000 for the costs of advertising. What you have left then is a $3,800 contribution to overhead. You’ve got to admit…
It Is Better To Have $3,800.00…
Than It Is To Have $800
The math doesn't always work like this. Sometimes adding the 30-day hold will more than triple your gross sales... and not increase your refunds. Sometimes adding the 30-day hold will just double your gross sales... and double your refunds.
Let's see what the numbers look like using the worst of the above cases. Okay, so you double your gross, which now means you take in $4,000 and you double your refund rate (from 10% to 20%) which is $800 in refunds and you still have to subtract the $1,000 for the cost of advertising. That means you've now got $2,200.
Hey…
$2,200 Is Still Better Than $800
Now let's take an even worse case scenario. Let's say using the 30-day hold increases your sales by 50% but triples your refund rate. In this case, you will have gross sales of $3,000 minus $900 in refunds minus $1,000 for advertising. That leaves you with $1,100.
So, as you can plainly see, using dismal figures like this worst case scenario, you still have $1,100... which... at least to my pea-sized brain... is still better than $800.
How do we know this? Because we paid close attention to our numbers. We did this because we realize that we are in the arithmetic business.
Let me pause here a moment to tell you a true story.
There's a man named Melvin Powers who used to own Wilshire Books in the Los Angeles area. Years ago he wrote a book about how to become a mail order millionaire. The problem was, according to Gary… Melvin, himself, did not know how to become a mail order millionaire. That's because most of his books were sold through retail outlets. So Melvin hired Gary to write a full-page newspaper ad for him selling his book. He used a lot of the copy and sales arguments he had already been using in the ad he had created. He changed some of it, but the main change was the addition of the 30-day hold.
Melvin refused to test Gary’s ad… and he demanded his money back.
As you might guess, Gary told him to take a hike. He wasn’t going to deal with anyone who thought their marketing judgment was better than his, so much so, that they wouldn’t even test what he’d created for them.
Well, a few weeks pass, and Gary gets a call from Melvin demanding that he come down to his office. Gary grudgingly agrees, more out of curiosity than anything else…
He walks in Melvin’s office to discover a face so red and veins so swollen, they looked like they were going to rupture and burst. He opened the top left hand drawer of his desk and reached in and grabbed with both hands a bundle of checks, slammed them on his desk and said,
"Damn you Gary! You and your insane crazy idea! Look at this! These are all the bad checks I got since I started using your stupid 30-day hold idea! You are absolutely out of your mind!"
To which Gary calmly replied,
"Mel, let me ask you something. Were the ads that produced all those bad checks profitable?"
"Yes, they were," he replied.
"Well then," Gary thundered at him...
"You Should Wish You Had A Barn Full Of Those Checks!"
Gary knew, of course, that with all of those bad checks, Melvin had gotten many many more good checks along with them… and the ad was making him a whole lot of money!
Now I think Melvin was a pretty accomplished businessman in many areas, but in this area… he just didn’t “get it”… some people just don’t understand what business they’re in.
If you pay close, close attention to “the arithmetic” of your business… you’ll make A LOT of money!!!
Let’s move on to another important marketing lesson taught to me by “Sir Gary of Halbert”…
4. “Movement” Is Better Than “Meditation”:
Gary used to say you always accomplish more through movement than through meditation. I remember one time when he came into my office in Arizona to give me some advice on a very profitable mailing campaign I had running…
After examining the numbers, he told me that if we followed up with phone calls, we would quadruple the amount of sales that we were making, and that it was such a high priced product that we'd be insane not to immediately get somebody on the phone.
I agreed that it would be a good idea and then I thought about it for a while and didn't immediately jump on it. Now, about a month later, when Gary came to visit me again, when he found out that I never implemented his advice, he made me go down to the bank, withdraw $21,000 in $50 bills, and bring it back to the office so that we could have a team meeting.
Gary then proceeded to take the big stack of money, put it out on a table in front of all of my employees who were in total shock because most of them not only didn't have $21,000 in the bank, but they had also never seen stacks of that much money sitting there in front of them.
Anyway, Gary started picking up the stacks of money with the money tags around them, he started ripping them off, and started throwing the money all over the room. It was raining $50 bills while he was screaming “You might as well piss away this $1,000, you might as well piss away this $1,000”, and he kept just throwing it and saying that “everyday you sit here and you don't make phone calls, you might as well throw away $1,000, so get off your ass and make these phone calls and that means every single one of you, and don't be bitching about how you need to make more money when you're sitting working on all kinds of other crap that isn't making you any money. All you have to do is just simply pick up the damn phone and call the people that you sent the letter to and say, “Hey, I sent you a letter, would you like to buy____________,” If you do that, and that alone, you're going to increase your sales”.
Gary was very much about taking action, never in a systematic organized way, but he was still all about taking action. So, we ended up hiring three temporary service people, renting out a hotel room, and sticking them on the phone to make phone calls in the most expensive way humanly possible. But we had done it… we chose “movement” over “meditation” and we ended up making a bunch of sales and a ton of cash… and it ended up proving his point.
The bottom line is you always accomplish more through movement than you will through meditation.
One of the most debilitating things with people when it comes to taking action (“movement”) is that they wait for things to be perfect. I have another friend (with no association to Gary) who says, “Action before understanding!!! And in most cases, it's a pretty good rule of thumb. Some things, are worth pondering, but for the most part, people spend their entire lives pondering, preparing to be ready… and they never take any action whatsoever.
Big mistake. Always be moving… and attack life!!!
Sincerely,
Joe Polish
“Proud Student of Sir Gary of Halbert”
P.S. Next month Part II of this newsletter will be posted on this website. In the meantime, if you’d like even more… more highly-detailed, in-depth marketing wisdom which I’ve been able to suck out of Gary over the course of more than a decade, then I urge you to get your hands on a copy of my Nightingale Conant Program… “Piranha Marketing… The Seven Success Multiplying Factors To Dominate Any Market You Enter.” Like I mentioned earlier, this was one of Gary’s all-time favorite CD marketing courses, and this little “kit” has been the #1 best-selling marketing program at Nightingale Conant for 4 years in a row.
This will probably make you hundreds of thousands, if not millions of dollars… if you follow the advice.
P.P.S. Oh, and by the way…
Remember that, “Los Angeles Based Entrepreneur Eben Pagan Attends Exclusive $5K per PersonBusinessBuilding Seminar For Direct-Response Marketers…” headline I posted earlier in this letter?
Well believe it or not, I ACTUALLY am doing a seminar on that very subject.
If you’re interested in getting more information on this seminar that will show you how to earn (at least) $5K PER DAY in the information marketing business, simply Click Here NOW and you'll get taken to a “private” website that has a very special video I recorded exclusively for YOU, and other readers of The Gary Halbert Letter. You’ll get an overview of some of the powerful secrets I’ll be sharing at this once-in-a-lifetime seminar as we go “behind the scenes” at my office and show you where and how the millions are made. You'll also find out how you can get a FREE COPY of my best-selling Nightingale-Conant program called "Piranha Marketing...The Seven Success Multiplying Factors To Dominate Any Market You Enter.” This was one of Gary’s favorite marketing courses EVER. It Retails for $299.00, however you’ll find out how to get it for FREE. So what are you waiting for? Click HERE NOW!
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