My Word Of Caution To Direct Response Marketers | Ep 788

And so many of you just do your virtue signaling. We're by far the best in the market. No, you're not. If you were the best in the market, you'd be the biggest in the market. This is like obvious stuff. I hear this all the time. You're not the best in the fucking industry. It's a $20 billion industry. You're not the best. There's no way you're the best. Like, and you have to confront that. You have like, you have to be able to look at yourself in the mirror and stop deluding yourself. And I say this just because I want everyone to win long term, not short term. I want you to win long term. And it's hard because it takes a while. And there's— and what you realize once you actually get into it is there's so many things you don't know. I think information marketers get a bad rap, and I think that that bad rap is justified. And the reason for that, and so like if you think about career choices in life, it's like you've got like, in terms of social rules, it's like you've got porn, right? And then like right above that you've got info marketer. It's like just, and then like maybe like car sales, you know what I mean? Then, then maybe like insurance and mortgage sales, like, you know, you kind of work your way up the ladder until you're eventually at zero when you're doing manual labor. And so I would say all of those are below that. I say this somewhat in jest, but also somewhat seriously, which is that these industries, specifically information, tend to have a bad reputation. And I want to explain a way of thinking through this that I think may help you pre— or, you know, prevent you from, from falling into that trap. But at least I think understanding the landscape better will make everyone here more money and doing it the right way. Number one is let's imagine we have 4 cows. Okay? So cow number one is unmarked, and we would probably treat that cow like any other wild cow that we find, which if we were a rancher, for For example, we might capture the cow, we might let the cow go, and what we would do would be predicated on our history of dealing with unmarked cows in the wild. Our second cow that we encounter has a brand on it that we literally seared into the side of the cow that has some logo on it. Now, there's 3 permutations of what can occur once you see that logo. So permutation number 1, is that you notice that it has a brand, but you don't know who the brand belongs to. And so what would occur is that you would treat that cow the way you would treat any cow that is owned by anyone. And so basically it would generalize how you treat other people's property is how you would treat that cow. It would be generalized to that series of rules and behavior. And if you're like, how does this have to do? Just Hang on. The third cow is a cow that you do recognize the logo, and you hate the person who owns the logo. Now, in this incidence, you would change what you did. You might steal the cow. You might kill the cow. You might purposefully not take the cow back to the owner because you hate that guy. But it would change your behavior. And then finally, cow number 4. Let's say you love the owner. If you love the owner that represent— that logo represents, then your history of dealing with that past owner and their belongings is how you would treat the cow. You would maybe just take it right back to them and you'd take it back to them and you'd clean it and you'd make it nice because you want to do good by that owner. There's 4 basically possible situations that can happen with Brands. Now, many of you are in the situation where you're cow number 2, which is that you have a brand. And the thing is, is that no one recognizes your brand. And so then they will treat you based on how they generically treat people who have your style of business. And so the way they treat you and perceive you will be related to their experience dealing with other businesses like yours. Sometimes you'll deal with people who have never bought anything in the information space in general. Now, I like to delineate information and education because I think many people are in the information space, and I think the information space by and large does a disservice to humanity. I think that the education space is a very good thing, and it's fundamentally how humanity moves forward because the goal of education is to change people's behavior. And so if you get into this game with the hope of purely making money, you will probably fall into the information space and make greater and greater promises and deliver fewer and fewer results. And by consequence, you will proliferate, you will continue on the legacy of your forefathers that have bad reputations, and that bad reputation will catch up to you. But you will probably quack, walk, and talk like other people that scam people. It's very difficult to get into the scamming conversation because fundamentally you have no one gets results, everyone gets results, everything in between is gray. And so at what line do we decide this is a scam, this is not a scam? Right? It's an interesting conversation. I have a hard time defining it. I think a lot of it comes down to a word that I hate, which is intention. And the reason I hate intention is because you can never measure it. And so there are some people who are very well intentioned that deliver very poor results, and there are some people who have poor intentions and deliver great results. And so this is where it gets tricky. But I think many of you lack skills and lack patience. And as a result, build bad brands because you make promises you know you can't keep. And so I think the intentionality, the one that I can measure, that you can know about, is whether you're lying or not. And I think it really comes down to that. The reason people hate marketers is because they lie. And I think that many of you have relegated to that, and it's hurt my reputation. It's hurt some— I think it's hurt plenty of people's reputation. I think when you think about that cow example, the second cow where you see a logo that you don't recognize, if that logo looks like logos that in the past have hurt you, you will assume that the person who owns this cow will also hurt you, and then you'll steer clear. And so many of you rob people of their dreams and futures because you dissuade them from making purchases that would otherwise save their lives. There is a sales close that I like a lot, which I call Burn You Twice, and it goes like this. If a prospect says, you know, they're all the way at the finish line and then they think to themselves, you know what, I bought something like this in the past and it didn't work for me. And so what do you say in that situation? Well, what you would say is the only thing worse than buying a bad investment once is having that bad investment prevent you from making a good one. Because when that happens, it burns you twice. Once when you bought it, and the second time when it prevented you from solving the problem to begin with. And then you tie it with a metaphor. You say, for example, who here has dated someone before the person that you're with now? I would assume that many of you have, except for Kirby, who was his first. But we can assume that for most of you, you've dated more than one person. And so in this instance, that middle school boyfriend or girlfriend, that high school middle, you know, a boyfriend or girlfriend, if you broke up with them and then swore off dating in general, that relationship would've burned you twice. Once because you had some bad experience, but secondly, for every single thing, all of the benefits you would've derived from getting the relationship that you'd end up having when the right person is in front of you. And so I think many of you are preventing people from finding their second person because you're burning them so hard. And so the first rule of marketing and advertising in general is state the facts and tell the truth. And you need to use your brains to think about what is unique about what I have. There's always something that's unique. First off, there's you. You are unique, right? And not in a special snowflake way, but just literally like there's one of you and you live some set of unique experiences that hopefully should better position you to help somebody in the particular thing that you chose. Now, the reason that I emphasize proof over promise so hard, and I think this goes double for beginners, is that there's a lot of, lot of, I think, pelf. Is that what I want to say? I think that's, I think that's the word I'm going for. Pelf sounds right. But basically bad stuff being peddled by people who have poor intentions, which is they tell you things like you should never give your time away for free. People won't value your time. Well, no shit, they shouldn't value your time because your time has no value now. And so what we have to do is earn the right to charge money. And the easiest way to do that is to fill up your calendar with people. So basically you force yourself into scarcity. So hear me out. You deliver services such that you cannot physically do anymore, which means you have to keep seeking out people, keep giving stuff away for free such that you can't give anymore to any more people any way possible because you're already maxed out. At that point, you will, you will have cut supply. And what happens when we cut supply? If we have any amount of demand, price goes up. That's why it's on the logo of acquisition.com. It's the strongest force in all of economics, supply and demand. And so if you don't have a lot of demand, what do you do? You decrease the price to, to, to take people in. That then cuts your supply because you're meeting this demand. And so your remaining supply shrinks and shrinks. And if you deliver good services, what happens? You get word of mouth, but good word of mouth now goes to the much smaller amount of supply that you have remaining and price raising occurs. Now until that happens, and this is the natural way of business, like this is how it works. And the people who try to shortcut you do so because they want to make a promise to you that honestly neither of you deserve to be making. Like I've started every business I have, every product line I start for free. I always start for free. Because how could I know if it's any good? I gotta get people to, in to try it, try the food, try the cookies, right? Like try 'em out, let me know. And this is fundamentally what, I mean, we do this with school all the time. We watch what people are doing, right? I mean, shit, like it's a free trial for school as is, like it's always free, right? Like, and like we get to see what happens. Many of you are lying and that is how you are selling. You're making promises that you can't keep. And so there's one of two scenarios. You're either, you're either making promises you know you can't keep, in which case it's unethical. And the other situation is that you're making promises that you have convinced yourself you can keep, and then you shift the blame to them, which is the more common one, which is like, well, they gotta do something. And I'll give you a framework that Google talked about, which I really like. It's the user is never wrong. Now they obviously focus on users, but it's a different way of saying the customer is never wrong, which is there's a famous story and I'll tell it to you. So when Sergey and Larry Page of Google were thinking about selling Google to Excite, so there was a period of time where they thought about selling Google in general. And so they were pitching the, the board of Excite and they had Excite pulled up and they had Google pulled up and they typed in like university in both of them. And then Excite had like all these random universities and Google had like Stanford, Harvard, and like it was ranked in a, in an order that made sense. Right? The executive from Excite said, oh, well, if you had, you typed the query in wrong. If you typed it in in this way, we would've had the same response. And it was like in that moment that they realized that like they had this competitive advantage that would continue to compound, which is like, you have to meet the user where they're at. You have to meet the student where they're at. You have to meet the customer where they're at. And so the businesses that meet people where they're at are the ones that are worth the most. And so when I talk about the value equation, the bottom half of the value equation, It's speed, effort, and, and sacrifice, right? How can we make things less risky? How can we make things faster? How can we make things easier? Many of you would be better served looking at the results that you have in the face and accepting the fact that you're probably not that good. And then upon realizing this, trying to get better. And I think that many of you are in such a rush to make money that the faster path than getting better is to lie about being better. Or to lie about the proof or to lie about the results. And as a consequence, you do yourself a long-term disservice because you will destroy your reputation. You do every person who buys your product a disservice, and you do every other business in your space a disservice. You literally are a leech. You provide no value. It's like one degree above the people that literally pretend to be other people to, you know, get forex trading and crypto things and like, you know, they, they make fake profiles and it's, and it's a whole industry. One degree above that. And the main reason is just because you at least, you at least are, you, you, you don't pretend to be other people, but you pretend just about everything else. A lot of the tactics that I teach, a lot of the methods that I teach help people believe you. But if you, use them to sell people bad products, you will ultimately hurt everyone. And so the way to prevent against this is state the facts and tell the truth. Say what only you can say. Show what only you can show. Begin working for free. Allow the demand to continue to increase based on how good you are. Allow that increased taking on of demand to decrease your supply. Once the supply of you is smaller than the demand for you, then a price above zero will become natural. And then you will be able to continue to raise those prices as more and more people will be willing to pay you. And some of the free people, you'll say, hey, I have more demand and you're taking up a slot and this guy wants to pay me and you don't. So either you can pay me or you can leave. If you're doing a good job, they will pay you and you go to the next guy in line and you say, hey, there's another guy who's willing to pay me and you're not willing to pay me. And you just keep going until eventually you've replaced your entire thing. And guess what happens now? You continue this cycle. You keep going because now the next wave of people, if you do a good job, these guys are paying you $100 a month. The next guy said he's willing to pay $200 a month. So then you replace one of your hundreds with a $200. You keep working your way, right? And this is the beginning of things. Now, from a scalability perspective, all you're going to do is either raise prices, which is a wonderful way of living, Or you increase your capacity, which you either do by hiring people where you make a margin on their time, or you change the service ratio from one-on-one to one-to-many. That's it, right? Those are the choices you have. You raise your prices or you sell the same amount, you know, more people, but you have more people helping you, or you sell more people and they're, and people are getting a more fractionalized version of you. Now, if I had to make a bet for most of you, most of you would be better served doing a fractionalized version and basically bouncing back and forth between price increases and fractionalized versions of yourself. Main reason for that is that it just takes fewer operational chops to do that. Not to say there's anything wrong with having more people work for you. By doing it the way that I just outlined, you will incur more key man risk. You will be more involved in the business. You will not get further away from it, but it will make you more money. And so for many of you, you're like, I don't want to sell a business. I don't care about creating an asset. Like, I just want to make an income. And this will help you do that. But to be clear, you will work, as should you. You are a human being and we're meant to work. So, you know, welcome to reality. So let's say we've got, we've got two, two, two glasses. All right. So this is full of milk. All right. So it's not actually full of milk, but just bear with me. So this one's full of milk and let's say that I pour this one glass of milk. I pour a third, a third, a third in here. Then I fill each of these up with water. All right? So it's like, kind of like slightly, it's pretty diluted milk. Now when I do that, this is basically how I see you hiring somebody, training them over the weekend and saying, okay, you can now do the delivery for the customers. Well, if you're charging a lot of money for something and you can teach someone how to do it in a day, then maybe You are not that good, or you're now selling somebody who's way worse than you. And so it's more likely that they didn't recreate your entire life in a weekend when you train them. And so what ends up happening is that when your customers try this now diluted milk, it tastes pretty bad, which is why I'm a big fan of, instead of doing this, here's the alternative. So you have your big glass of milk, this cold, refreshing milk. And instead of having glasses that are the same size as this, we pour it into a much smaller container. So we pour it into 3 shot glasses, but it fills to the brim, but it's a smaller container. To me, if I were, if I were to ask you, would you rather have this diluted full glass of milk or would you rather have a shot glass of perfectly diluted milk or perfectly, you know, the same amount of milk, which would you rather have? Probably the shot glass. And so that is basically the difference of a fractionalized version. You going one to many, you going one on four, one on six, one on 8, is that you, and this is where the, the 201 version of this is that you just have to keep getting better so that when you get fractionalized more and more, it's still valuable. And so I think for many of you, you would be best served not trying to hire tons of team. Of course, there's a time for that, but I think for many of you, it's not right now. And you'd be better served just getting better. And when you, when your demand exceeds your supply of your time, you raise your price. And when it continues to, to exceed the supply of your time, by the way, when this occurs, you're already, you're already in the top 1%. It's like getting in the top 1% is rare, not difficult. Like it's very simple. And the reason that people can't do it is literally because they lack patience. You can trace very clearly how successful someone can be based on how, how long they can delay gratification. Like the reason people think that writing a book is an accomplishment is because it's basically pure punishment for a year and then you get $20 for a book, right? Like it's like, it's like the most punishing experience you could possibly imagine, right? Most people can't do it, not because writing that many words is somehow complex. It's just that people can't stick with things. And so I will give you two rules that I think that the majority of human beings can live their life by. Number 1, do what you said you were going to do before it became inconvenient. Number 2, leave it better than you found it. And that goes for everything. It goes for customers, it goes for employees, it goes for the marketplace, goes for the environment, goes for your family, goes for your kids. It goes for the buildings you walk in, goes for the restaurants you eat at. Leave it better than you found it. It's a very simple— these are 2 very simple rules. That are worth, worth living by. And I think that if you just use those two rules, you could probably fix most of these marketing issues because many of you are not leaving people better than you found them. They're worse. They have less money and now they have a bad taste in their mouth and now you've dissuaded them from buying education stuff in the future, or rather information that would eventually become education if it was broken down more. Many of you are teaching things you have not done, which means you're lying to other people or yourself, which sucks. It really sucks. I think one of the big issues is that people have realized that the fast— the things that you can sell for the most amount of money tend to be things that help other people make money, right? The largest of those being investment opportunities. That's the, that's the biggest version of that. Underneath of that would be, would be business improvement things. Underneath of that might be income opportunities. Like that's, you know, kind of on the, on the, on the how much money you can charge for something, you know, sphere, right? Some of them don't pass the obvious like sniff test, which is like, if you were so good at crypto trading, why don't you just trade crypto? If you were so good at day trading, why don't you just fucking day trade? And like, I get the silliest answers from the people who say that, like who are, who are doing this. They're like, well, I just wanted to impact people. It's like, no, you don't, man. Dude, it's a fucking, it's fucking, no, you don't. Just stop. You don't. If you want to impact people, go day trade and, and beat Wall Street actually, and then take all that money and build a fucking city. And so it's just like these obvious things. I wanted to make this because I could try and get into like specifics of like, obviously don't, like I could talk about this from a compliance angle. I don't think it matters. Like, I mean, obviously it matters. Basically, if compliance is the reason that you're not doing it, you've already lost. And you're never gonna win long term. The truth is like the sun, like it always comes back out. Like you will get discovered and it's gonna be painful. And then you know what really is gonna happen? Because I, I've been, I've been around this world for a while. You'll just fade into nothing. It's, it's rare that you get like truly cracked down on. More often you just ruin your reputation and because you're not that good, you don't know how to advertise more. And so you just basically burn the people you know, and then everyone who knows you knows you burn and they tell everyone else. And then you have a lot of false smiles when you show up to places and people kind of like, you know, and then when you walk out, they all say shit behind your back. And it's kind of a tough way to live. I say this as a cautionary tale. You can win if you just focus on providing value, just help someone achieve what they want. Faster, risk-free, and easier. That's it. Those are your vectors. How to make it easier for them, how to make it less risky, how do I make it happen faster? And the easy way to make something less risky is charge less for it or charge nothing for it in the beginning. And that's okay. Like a lot of you just need to charge zero for a minute. Like I think as much as like we talk about the, you know, MRR and we're gonna change some of the incentives around the games because we want to, we want to make sure that we push back against this. Having a free community is a wonderful way to make money. Like there's lots of things that you like, building goodwill can happen in those situations. And so like you just give yourself, and I do think that having a free community trains you on, it's kind of like content creators, I think do a better job in general. Don't get me wrong, there's bad ones, but in general, the direct response ads guys versus content creators, content creators tend to do a better job with their communities because they have lived their entire life is based on their reputation. They, they have slowly compounded an audience over time by setting promises, delivering on promises, and over, over time, kind of letting that audience compound. And so when they make a product, they care about the product being good and they care about their reputation. Direct response guys who learn ads first in general tend to not be that way because they can always go back to the bucket of like the nameless masses and bring them in. Although I think, you know, scaling ads is a wonderful way to scale. Just like, you know, building a brand and making content. Or outreach, like they're all fine ways to scale, they're fine ways to advertise, let people know about your stuff. Many of you need to just look at yourselves in the mirror and think, is it worth making this money from someone else when I know I'm being dishonest? And that's a you question because there's nothing that we can do that's gonna like, there's not like, there's nothing we can do. Like your reputation's gonna be your reputation. In all honesty, it's very low likelihood that this, my little talk right now, is going to change anything. But I have this here more so, so I can say I told you. With that being said, I think this is the reason marketers get a bad rap, and I do my very best to try and reverse at least part of that trend by being a better marketer and outmarketing you guys so that I can say like, no, education isn't a very important thing. And, you know, it's tough for me because I'm a product of this space. I bought lots of courses. I bought lots of conferences, you know, masterminds, things like that. I bought a lot of them. I say this because like it's a space that's near and dear to my heart because it's how I learned what I know. Obviously reality is the other teacher that I learned a lot from. And a lot of times these little things were things that would fill in the gaps. But I think part of it for me is that I never had big expectations of people. Some of the people that you sell to are naive. Here's a really good test. If your grandmother or someone who you care about was in your, in your marketplace, would you sell them? Like, I refer everyone I know to Skool because I think it's a great fucking product. That's why I did it to begin with. That's why I made the investment. That's why I'm here, right? Like, I think it's a great product. But the thing is, it's a tool. It can't change who you are. And so we'll just amplify your ability to help people or hurt people. It's a platform. It would just mean a lot to me if, if the reputation of Skool was based on people who really helped a lot of people and priced their services according to value. And if you are, if like the thing that you're actually good at is like, you know how to like pickle mason jars and like store food, then guess what? Couple options. Option 1 is you can make your group free and then just sell jars and stuff. Like you don't have to, you don't have to monetize the group. Like you can just sell, you can make money other ways besides the actual media and the community within. So point 1. The other point is that you might have a group that's like $5 or $8 a month, and that's fine. Is it going to be the same as getting to $100,000 a month or $1 million a month? No. Those are the skills you have, and it's an honest living because you're doing what you actually can provide value to someone for. Whereas if you, let's say you are good at the jar making thing, but you find out that people will pay more for someone to help them run Facebook ads, but you've never run Facebook ads before, and then you pretend to be able to run Facebook ads so you could charge someone $1,000 a month. Well, sure, you'll make money pretty quickly. You'll also stop making money pretty quickly too. And so like, if some of you have a little bit of this guilt as you're listening to this right now, what I would like you to do is go to your about page, look at the promises you make, ask yourself if those are actually true, and if they're not, delete them. And if the price that you charge does not reflect the value that you actually provide on average, not the, not the one person you one time helped, but the average amount of value that you create. Then you should probably adjust your price and make it reflective of what the average value you create is. Because let me, let me explain to you why I think some of your, some, because I already know your rationalization. I'll tell you what it is. You sell 100 people, one of them is successful, and then you take that one success story and then you market the hell out of that one success. Here's the thing. If I flip a coin, all right, I flip a coin, 50/50, heads, tails. I'm gonna get heads or tails. Now, if I flip the coin again, I'm gonna get heads or tails again. Flip it again, heads or tails again. Now here's where it gets nasty. Let's say I've got a list of 1,000 people and I send half the list that the result of this coin is gonna be heads and the other half, the result is gonna be tails. All right. Now, 500 people after my first flip think that I'm a god and I pick this, but they're like, but that could have happened anytime. So then I flip the quarter again and with the remaining 250, 250, I send half heads, half tails. And I'll be right on one of them. And now I've got 250 that saw me get it right twice. And then I'll flip the coin again with 125, 125. And then this group saw me do 3 times in a row. And I say, would you like me to tell you what the next stock pick's going to be? And of course they're willing to pay me. And so I just marketed to that 125 people. That is a fucking lie. Were you right or was it chance? If I randomly segmented 100 people who are all trying to make money online and I just tracked them and did nothing. For a year, one of them would be in the top 1%. And fundamentally, the vast majority of people that I bought products from, I am that person for them. And so if they were good, all of their people would have seen success. But because they are not, it's up to the person to have created their success, not you. And then you just lucked out because you picked them. And so I think appropriately attributing where success came from for many of you would get you out of the delusion that you somehow are helping lots of people. Track your average results. Track the percentage of people who make a dollar. Track the percentage of people who actually pickle their jars. Track the percentage of people who actually finish their first painting. Track the percent of people who do a kickflip in your community. Whatever it is, just track it because it will tell you the truth. Like the data won't lie to you. Oh, I'm actually only, only 10% of people are doing it. Okay. Geez. Well, guess what? You can also say that 10% of people are able to do a kickflip in my program, but it's $5. So you got a 1 out of 10 shot. Not bad, right? Now I've got a more advanced program where it's 1 out of 3, where I help and I, I watch the videos. Now it's reasonable. And that's why my favorite way of, of advertising is state the facts, tell the truth. When you see the ads for school, I'm like, here's the median. It's $1,360. It's not, it's not gonna make you the richest man in the world. You're not gonna be on the Forbes list. You're not, you're not gonna be the richest man in your neighborhood. Right? But I'll help you get started. That's the median. When you, when you, when you, like, just track results and then say what they were, and then that way you don't have to promise anything. You just say, this is what has happened. I make no promises for you. And so for those of you who are curious, I'll give you the, the, the, the 80/20 of compliance. Promise nothing. That's the 80/20. Say what has occurred. And say that these are the things you will do and they can take the shot on their own. So if I said I built 3 companies to $100 million plus enterprise value, right? If I built 3 companies to that, and this is what I plan to do with your business, would you like to do it with me? I make no promise that you're going to do that. I say what I have done, what has happened, and the people who we work with, let's say the founders on average get a 13x return on equity, which is what it is. Right? That's what has happened. I'm not saying it will happen for you. I'm saying that's what has happened. And if those feel like, if that feels like a chance you're willing to take, then let's rock and roll. If not, no worries. Because if you expect me to promise you that this is gonna happen, you're expecting me to guarantee something I cannot control, which I won't do cuz it hurts my reputation. For many of you, like, this is what you need to double-click into. You need to actually look at the results that you're getting. You need to actually talk about what they are. Talk in terms of percentages. And if they're embarrassing, guess what? You get to learn how to be better. And some of you don't even want to track it because you know the numbers are terrible. But I can promise you that literally just by tracking it, they will improve. 'Cause one of the, one of the little isms that I have on my sales team is if you don't track, you don't care. And I think many of you are in that boat. You say you care because it's very easy to say you care. It's very hard to show you care. Saying you care takes 5 seconds. I just said it. Actually showing you care takes hours and hours of work. And so many of you just do your virtue signaling and saying that like, oh man, we're, we're by far the best in the market. No, you're not. If you were the best in the market, you'd be the biggest in the market. This is like, this is like obvious stuff. I hear, I hear this all the time at the school that we're way better than everyone else. I'm like, dude, you're making $20 grand a month. You're not the best in the fucking industry. You're not there. It's a $20 billion industry. You're not the best. There's no way you're the best. Like, and you have to confront that. You have, like, you have to be able to look at yourself in the mirror and stop deluding yourself. And I say this just because I want, I want, I want, I want everyone to win long term, not short term. I want you to win long term. And it's hard because it takes a while. And there's, and what you realize once you actually get into it is there's so many things you don't know. And it's just, there's such a steep learning curve. State the facts, tell the truth, say what only you can say, show what you only you can show, track like you mean it because you should. Show that you care. Don't say that you care. Look at the results of your customers. Talk about what has happened. Don't promise what will happen. And at the end of the day, the thing you're building, the real asset is who you become, not your MRR.