Grassroots Marketing Techniques For Local Businesses

Welcome to another episode of the Magnetic Marketing Podcast. Dan Kennedy once wrote the book No BS Grassroots Marketing. The co-author of that book is Jeff Slutsky, and that's who we get to listen to today. Jeff is going to be talking to us about how to make local store marketing work, or the grassroots approach. This is helping local businesses, not advertising nationwide. We're going to be talking about the keys of networking, the different kinds of promotions you should be using if you're local. What you should be doing, what you definitely shouldn't be doing, and how to be able to use local mass media effectively. And if you listen to the very end, Jeff is going to give us a mock consultation in order to help you niche down your business, whether it's local or nationwide, to be able to hit your target market on the head every single time.

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The world as we know it was changed because Dan Kennedy became obsessed with marketing.

Welcome to the Magnetic Marketing Podcast with your host, Dan Kennedy. Hello everybody, this is Dave D. and welcome to your Gold Member CD titled No BS Grassroots Marketing. My guest this month is Jeff Slutsky, who is the co-author of the new book with Dan Kennedy, No BS Grassroots Marketing: The Ultimate No-Holds-Barred, Take No Prisoners Guide to Growing Sales and Profits of a Local Small Business. Jeff, one of the things I love about Dan is the short titles to his books. They're phenomenal. They're phenomenal. Good to have you on the call. The book is absolutely fascinating. I got a super advanced copy of it and went through the entire thing and just got so much out of it. I know what you're going to share with our Gold members on this call is just going to absolutely help them regardless of the business that they're in. Let's talk a little bit about your background and then let's get right in and dig into the meat of this about how people can use this grassroots marketing approach in their local business. Just tell us a little bit about yourself.

Well, upon graduation, I started working in a traditional advertising agency and in a PR firm. I have a very traditional background in advertising and marketing. Then I had an opportunity to become a partner in a nightclub. Later, another friend of mine opened up a health club, and I became a partner in that. In the span of a couple of years, I owned these two retail-type businesses and now the advertising dollars are coming out of my own pocket. So you start looking at return on investment, not making a commission on the sale of advertising. That's how this whole thing started because you really look at it a lot differently when it's your own money.

Yeah, absolutely you do. Absolutely you do, as opposed to just making a commission and selling it. One of the things I want to get out of the way right away is, does this approach— if I've got a local business, regardless of the local business that I have, let's say I'm a restaurateur or I have a professional practice or I have a retail store, whatever my local business is, is what you teach in the book and what you're going to teach us on this call applicable?

As long as your local business garners the vast majority of your customers from your community, from your geographical neighborhood, that 3 to 5, 7-mile radius around your location, this thing will change your life. If you're marketing nationwide, this is not really focused on that.

Got it. Got it. But most of the people on this call are local businesses or have local businesses, and you can apply it. Now, just to give us a quick overview, and what exactly is grassroots marketing? How do you define it? How do you know it's grassroots marketing? And then I've got some very specific questions for you.

Well, the technical term from the marketing people is called local store marketing. Grassroots is kind of our brand of local store marketing, which means going within the community, again, that 3 to 5, 7-mile radius around your location, and networking in such a way that it drives in customers. Our version of it is a little more mercenary in that we want to show return on investment. We're not out to just get the warm and fuzzies or goodwill or exposure. We'll get those anyway. But when we do a promotion, it has to be designed to generate trial, bring somebody in, bring in the right people, and it can't cost a lot of money doing so.

Right now, before this, we were talking about this and going through your book. You're talking about— and I was shocked, quite frankly— very little money to do these promotions. You're not even talking about $500. In fact, I think you say If somebody says it's more than $500, you better take a step back. Is that true?

If you can prove to me that spending the $500 is going to make you enough return on investment, then do it. But there are still so many other things you can do that are $20 here, $15 there, or just flat out free. Why not start with those?

Right. Exactly. What types of businesses have you personally worked with over the years?

Well, probably the single biggest sector I've worked in is food service, restaurants, anything franchise, automotive aftermarket, currently working with HealthSource Chiropractic. I've worked with dentists. Probably the most unusual project I did was for a chain of funeral homes. That was kind of fun. I've worked with—

That was kind of— did you just say that was kind of fun?

Yeah, I did part of it on trade. It was great. Scared my mother to death. But I worked with Marvel Entertainment where we were working with independent comic book stores. That was a riot. I worked with Goodyear with the tire stores and we actually shot the video on the blimp in Akron, Ohio, looking down at the neighborhood and identifying all the opportunities. That was kind of interesting. So just a huge variety. You name it, I've probably done it.

Wow, cool. Cool, cool. So tell us, I know you've done some really cool promotions, but tell us, you just mentioned unusual. What is one of the more unusual promotions that you've done?

Unusual, gosh. Well, probably, I don't know if you would consider it unusual, but it's one, it's how we adapt it that makes it work. Let me give you an example. There was this Pizza Hut, we were working with a small chain, a franchise, owner of about a dozen Pizza Huts, and they had a new unit in this one community. And they were approached by the volunteer fire department for a donation. They were going door to door asking for donations so they could raise money for a deluge gun, a piece of equipment they needed. And they weren't getting very far. You know how tough it is to just donate money. So the Pizza Hut manager knew he couldn't donate money, but he said, I understand you're having a difficult time. What if I was to be able to provide for you an opportunity to raise all the money you need? The downside of this is you guys are going to have to go out to the community and work. They go, we're doing that now and getting nowhere. What do you have in mind? He goes, here's what I'll do. I'm going to give you a Tuesday 4 weeks from today. On that Tuesday, I have to report to my boss $1,000 in sales. That's what I usually do on a Tuesday. However, after that $1,000 in sales, I will give you 50% of every dollar that comes in the door. Now, if you don't do anything, I'm going to make my $1,000 and you're not going to make anything. However, if you go out to the community and get everybody in town to come to my pizza hut on that Tuesday, you can raise all the money you need to buy that piece of equipment. Does that sound like something you guys would be interested in? They go, absolutely. So they have posters and flyers printed up, which they got donated from a local quick print shop. They hand them out. They put up posters in all the downtown area businesses, including a McDonald's 2 blocks away from the Pizza Hut. They go to these apartment complexes and start— they had these huge signs that said "No Soliciting." Well, guess what these guys did? Who's going to stop the volunteer fire department from handing out flyers? They got exposure on the radio. They got the newspaper to say some blurbs. They got people to put on the marquees. The week before the event, on a Saturday, they come out with their their fire truck with the lights going and the Dalmatian to hand out flyers in the parking lot. The only thing the Pizza Hut manager did to promote the event was on his marquee, he mentioned it about a week out and put a little table tent up. So not very much cost. On the day of the event, the volunteers show up in uniform, they wait tables and wash dishes. Now, hundreds of people go to this Pizza Hut for the very first time. After they get their normal $1,000, of course they're donating money, 50%. What you need to know is in this business, they run about a 50% food and labor cost. So 50% is not going to cost— they're not going to make any money beyond that, but it's not going to cost them anything. However, there's about 200 people who walk in the front door who had never been there before, who've paid full price to buy the pizzas, even though money is being donated. The consumer is paying full price. They're trying the product out, and hopefully they convert those to regular customers or a significant percentage. The interesting thing about this promotion is the following: one, Who does all the work? The volunteer fire department. What would it cost that pizza guy in advertising dollars to generate 200 new trials in his restaurant? And if he spent the money, he'd probably have to do a coupon to get them in. If they come in off of a coupon, that means he's discounting to begin with. They're going to wait for a coupon when they come back. Here they are paying full price. It wasn't a coupon or a price drop that drove in those particular customers. It was the fact they were doing something for the community. The only thing they didn't do that I would have suggested they did do is a bounce-back certificate, which is, "Thank you for coming to our fundraiser. Here is a certificate for you. Come in within the next week or two, order any pizza, and another dollar will be donated to the volunteer fire department, compliments of the local fire department." So they could get them back one more time and more money goes to the charity. But again, what is it worth to drive in those customers who could potentially become regular customers to them? So huge return on investment, plus on top of that, the extra credit was the exposure in the newspaper they got and all the goodwill they got in the community. But that wasn't the main thing they were going for. They were going for customers in the front door. That's the difference between grassroots marketing and traditional local store marketing.

Yeah, absolutely. So the warm fuzzies, as you put it, come as a byproduct of getting the customers, but they get that, but they also get a return on investment as opposed to sponsoring the firemen's softball team and having their name on the uniforms. Just brilliant. Just brilliant. Really, really cool too. Again, a strategy that someone could take. That's just one of the strategies in the book, but a strategy that someone can take and use immediately. If you've got a restaurant, my goodness, take it and use it next week. Get that thing started.

But keep in mind that the minute people hear what I just described, a lot of people will say, "Yeah, I'm doing that." But you know what? There are so many little details and nuances to what I described that what they're actually doing and what we describe in this book take it to a whole different level. So without these little improvements and details and little extra things that actually convert this into a real marketing tool, the whole thing really just doesn't make sense.

—so you need to have all the pieces. Yeah, absolutely, because there's little things that you don't know that you need to know to make it work. Because on the surface it looks like it's still simple, but there are little details you need to know. Again, one of the things that you constantly talk about, Jeff, is the importance of using existing relationships and setting up local promotions. Talk a little bit about that.

Well, again, with more traditional local store marketing, the stuff that the big chains send out the big manual to all their franchisees.— they go out and do this stuff, they expect them to go make cold calls. It takes too much time, and you know what? People running retail restaurants or service providers within a community, they're not salespeople generally. That's not their comfort zone. So why send them out doing that stuff? So what we do is we do an exercise with them where they identify all the people they know who might be influential and reaching the kinds of organizations that we want to promote with in our community. So you identify who you know from work, who you know at church, who you know in organizations you belong to, the school your kids go, who does your staff know, and you just kind of go around this circle we have in this exercise. And once you've identified all these people, it starts forming a picture in their mind. Cross-reference them to the types of people we really want to know. For example, is a friend of mine or an acquaintance of mine someone who is highly connected within a major fundraising organization in the community that's always looking for help to raise money? Do I know somebody high up in a government agency? Who are the major employers in town and do I have connections to their executives or maybe HR department? Who are the other major retail businesses in town? That service a lot of customers, and do I know the manager, the assistant manager, or department head who can also help me in my ability to reach those customers? And I'll look for all those opportunities so that when you first start one of these programs, the first couple dozen things you do, at least, should be with people you know. And then once you get some momentum going, it just sort of— starts a life of its own.

Well, give us an example of doing a promotion with somebody who you would know. Give us a concrete example.

I'll give you a perfect one that just happened recently. I'm working with HealthSource Chiropractic, which is part of Dan's group, and Dan's the one that actually introduced me to Tom— excuse me, Dr. Tomczak. And we started a project. Well, one of the doctors I'm working with in one of the markets is a personal friend of a pharmacist at Kroger. So he suggested, hey, how would you like to provide each one of your pharmacy customers a special certificate good for a free exam? We have these 17 points we work on. It's about a $180 value, free compliments of the Kroger pharmacy and you. He said, great. We print up the certificates. For a 2-week period. He's going to bag stuff them or staple them to the outside of the bag for each customer of the pharmacy. So free distribution, tremendous credibility, but it was a personal relationship that allowed him to get that set up in a little bit of time and obviously the cost of just some quick printing.

Okay, I'm listening to that though, Jeff, and I'm saying, okay, but how does that get— how do you get that approved through corporate? I mean, God, that must have been a year ago. What do you mean you don't?

You don't want to prove to corporate. I mean, first of all, there's no cost. In most cases, anybody can do anything they want to as long as there's no cost involved. The minute you ask for money, then they've got to talk to corporate. Now, some people use talking to corporate as an excuse not to do it, which means we didn't explain it right or they just don't want to do it. But when you say, hey, I have a benefit here, I have a $180 benefit, voucher that's going to get your person this service absolutely free because you happen to be a customer of the pharmacy. Don't you think that's going to be— make them more loyal toward your business versus a competitor? Or I can get you a half-off on a dinner, or I can save you $10 on an oil change, or whatever it might be. Those are values to your customers. Got it.

You know, and a lot of— one of the things that I love about your approach, this grassroots approach, is really everybody wins in this deal. So Kroger wins, for example, in this one because it makes them look good that they're giving out something of value. The doctor wins because obviously they're getting new people in the door. And obviously the consumer wins because they're being introduced to something great. And I love it. It's just— I mean, it's simple. But it's effective. Now, you do a chat— you talk about in the chapter that discusses events types of promotions, which is something that a lot of people don't even think about doing, big events type of promotions. You talk about using musical parodies. Tell us a little bit about that.

Okay. Well, this is for a larger organization, but I'll be happy to share it with you. I was approached— another, I guess, skill I have is my ability to write parodies. And I've been doing it since high school. And I actually get paid to write these shows. And I'll tell you one of the first ones I did was I was approached by a client of mine. We were doing sales training for Bristol-Myers Squibb to their drug reps. You know, they only get 5 minutes, at the most 5 minutes in front of a doctor to detail them and so forth. So they had to have— they wanted to have an event for cardiologists to introduce 4 different drugs to them. Now, when you have an event with a dinner and their wives come, or excuse me, their spouses come because we had some women cardiologists too, you have to have speakers there or you have to have so much education. So what I did is I learned about the 4 drugs. I read all the information on it and instead of having a speaker, a doctor talk, I wrote a musical parody using most of the songs from Sound of Music. I hired a couple of professional singers and entertainers. LaDonna Gatlin is a friend of mine who is the baby sister of the Gatlin Brothers. Steve Rizzo is a comic. You may have seen him on HBO. They are also another good friend of mine. They do their shows and then they did this 20-minute with 8 songs all about— the content of the songs, the rhymes were all about the technical information about the drug so that they didn't have to have a lecturer there. When they had it go through legal, the guy thought I was a doctor because of the way I wrote the thing. It was so funny. But they remembered it. They got 2 standing ovations in that show. So that's the difference between some of these lackluster kinds of events people put on this show. Now granted, it's more expensive, but it has a tremendous educational value and sales value. Of course, everyone wanted recordings of it and the scripts and so forth. But what is it worth to a company like this major drug company to have 100 cardiologists in one room at one time?

That's what we were able to do with this. Wow. Very, very, very cool. Very cool. You told us about some cool promotions that have worked for you. But you must have had some promotions, Jeff, that didn't go as you wanted. So any of those come to mind? Well, let's see.

Let me think of a good one that didn't happen right. Geez. I could just go with the one I might have mentioned to you before where I had the nightclub.

Yeah, talk about that one. You told me about that one.

You want that one again? Okay. That's my favorite mess-up. Okay, so this goes back when I owned my nightclub and this is the late '70s, so the disco era, right? And so we were doing well, but this is a fairly small community, so you know, you competed even though you're a disco, you compete with the country bars and everything else. And we were pretty busy Wednesday through Saturday, but Tuesdays were awful. So we started what we call— this is right after the Urban Cowboy movie came out. We called it Bourbon Cowboy Night on Tuesdays. We tied in with a country radio station, had their DJ come out, and he played country music. So we were a country place one day a week. So to introduce that, we had our mechanical horse. Now at the time, a major competitor of ours was advertising their new mechanical bull, this $10,000 piece of rodeo training equipment, and it was getting all kinds of publicity. So we introduced the area's first mechanical horse, not to be confused with the mechanical bull. The mechanical horse is specifically designed for entertainment and to the best of our knowledge, no injuries on this particular model anywhere in the country. And so on that Tuesday we introduced it, the tarp goes up and there is a mechanical horse, the kind you put a dime in in front of a Kmart and you ride, okay? So we ballin'. And it got a huge laugh and a lot of publicity and everyone loved it. We had one cowboy that actually came in from St. Louis to practice for Rhoda. He was upset, so after a case of Jack Daniel's, he sort of calmed down. Anyways, so that was a huge success. We made a bunch of money. Now fast forward a month later. I'm feeling pretty good. My Tuesday nights are picking up. I want to do another promotion. So I decide to keep within the same thing, and we promote an artificial cow chip tossing contest. So we sprayed in a circular motion these artificial cow chip eyes out of polyurethane foam, painted them brown.

It was a very classy promotion, by the way, Jeff. It sounds like a very classy promotion. Well, what can I say?

Well, we couldn't use real ones. It was against code. But they looked so real that people just refused to participate in the promotion and it tanked. So, you know, I guess that's when ego sort of overrode my common sense at that point.

It just didn't work. So you don't have that. That's not one that you recommend in the No BS Grassroots Marketing book then?

You won't find that story, I think, anywhere in any of my books, actually.

Well, good. I'm glad we revealed it. You're glad I brought that up, aren't you? Yeah, it's a sore spot. Thanks.

You're very welcome. One of our concepts is that even though you have failures, which you will, You recover from it. You learn from it and you go forward. I'm not proud of that promotion, but I don't have a problem sharing it because I'm not infallible.

Right. Now, talk a little bit about— I think an objection that somebody might have is say, "Hey, I got the book. The book is great, but geez, this is not giving me in most cases an instant surge of new business coming in. That this has to build over time. If I use like a coupon or something, I see an instant surge of business. Talk a little bit about that. First of all, what do you think about coupons? Second of all, why your approach with this grassroots marketing is actually better in the long term for a business?

I think there's a huge danger in mass couponing too much. What happens is, yeah, you're going to get a surge and you're going to get a bump in business, but once you start down that path, it's like heroin addiction. You're hooked, and the minute you pull people off of the coupons, you go through withdrawals and they stop coming in unless there's more coupons. So the very device that gets people in is what it takes to maintain it. Then after a while, due to competition, you have to up the value of the coupon, and it's a downward spiral. So remember, who are the people that respond to mass couponings? Those are couponing— coupons you would see in the newspaper. Now I'm not talking about manufacturer's coupons. I'm talking about retail ones, like for pizzas or any other kind of product or service in your community. And they may get them in a Valpak, an Advo, Marriage Mailer, any of those that are available to anybody. So the people that respond to those are the people that are looking for a deal.. And that's the problem. So once you introduce them, you're stuck with them until the next coupon. Now we use a discount or an offer of some kind to bring people in, but it's very, very selective. We don't make it available to everybody. You have to belong to a special group in some capacity, whether you're an employee of an organization, a member, a student of a certain school. You have to qualify for your special deal, and that protects the businessperson's price credibility because we've transferred the responsibility of that discount to somebody else. So think of it. If I put an ad in the paper with a coupon, it's telling the community, "Hey, I've paid money to discount my own product." What does that tell people? And if I do that week in and week out, you start to get that discount mentality. However, if I happen to go to some dry cleaner and they say, "Hey, thank you for coming to my dry cleaner." I want you to get a free cobbler with your next sandwich at this restaurant, compliments of me. That's a whole different mindset. It achieves the same basic goal, but that person was not expecting that certificate hooked to that hanger or that receipt from that particular business. But because they got it as part of a purchase or a value-added, they go— you've got a much better chance of getting a good regular customer. As a result of that kind of transaction.

Well, yeah, absolutely, because also I just thought about this: the person who gets the, the certificate or the coupon or whatever from, for example, from the dry cleaner, they don't know that the dry cleaner, you know, didn't pay for it or didn't— isn't— it just has a different psychology to it as opposed to, hey, everyone is getting this thing, and you're getting people who are buyers. They're the customers of somebody else.

Yeah, but there's another subtle advantage. We talk about credibility. Not only do we protect our price credibility, but what are you getting when the dry cleaner says, "Hey, go to Jeff's restaurant." I'm also getting a testimonial from another business. So I'm getting additional credibility. If it's in the paper, anybody can buy it. If it's a mass mailing, anybody can get it unless there's a specific reason. But with these kinds of promotions, not only are they offensive in that it reaches customers, it's defensive in that I don't have to give away the store. I'll give away a free one once in a while if it's going to generate some new customers for me, but I can't do it to everybody, otherwise it will totally destroy the price credibility in my business.

So, you know, one of the things that— one of the concepts that you teach, which is really, really cool, and you kind of alluded to it here, is having like-minded businesses kind of form a group, like, so you've got the dentist and the chiropractor. Talk a little bit about that strategy, because that's something that someone can apply and get tremendous results from with very little cost involved.

Well, that's where you work with non-competitive but like-minded kinds of people. We call this an advanced cross-promotion or group cross-promotion, and so where if let's say I have a chiropractic clinic and I want to work with a dentist, a podiatrist, a health club, and maybe a dietitian if I don't have one on staff, that kind of thing. And what I would do is we refer business back and forth. And you can do it a number of different ways. But I would want to set up— you heard about the cross-promotion technique before, but instead of me handing out 5 different pieces of certificates for my 5 different buddies in these different disciplines, I put together a certificate booklet. Now this booklet has a combined value of savings of let's say $300, $400, $500. Now you come into my chiropractic office and I do my service and so forth and I say, "Thank you for being my customer. Here's 5 businesses I believe in, dentists, podiatrists and so forth, that will save you a lot of money for these valuable services." They do the same for me. All of a sudden, I have 5 different businesses referring business to me, and I am meeting my reciprocal obligation with one booklet that has a huge perceived value to my customers because it's all done the right way, and the combined value of it is a nice value-added to help build loyalty.

It kind of reminds me, Jeff, of what is known as the syndicate online. Does where you have a group of internet marketers that are all promoting— they're noncompetitive because they all are in different disciplines. For example, there's one guy in lead generation, one guy in social media, and they all promote each other's stuff. This is kind of a very legitimate way to do it which has a lot of perceived value from the client or the patient standpoint.

I'll tell you one other— this is kind of a wild variation of it. When I owned my nightclub, I called it "in the loop promotion." Now, with a nightclub, what do people do when they go out to nightclubs? They go bar hopping. It's a problem. So in my marketplace, there's like 30 choices. Well, I had 5 other buddies that also owned nightclubs in my community. We were competitors. We were competitors. There's no doubt that some people leave my place and go to one of theirs and vice versa, or they'd go to some of the other ones. So he said, "Okay, why don't we do this? When they leave my nightclub, let's give them a certificate, a booklet like I described before, only to one of the 4 other ones of my friends, and you do the same. I mean, I already got them for that night, so let's keep them in the loop." Okay? So I combined with my— even though they're competitors, we sort of carved off an area and tried to keep them away from the other 15 competitors so we could all come out ahead. So sometimes you can even work with a competitor. To mutual advantage. That's very subtle and has a very limited, I think, application, but I just thought I'd toss that out.

Wow, it's a beautiful strategy though. I mean, it really is. Again, one of the things that Dan always teaches is what winners do is they think about, geez, how can I apply this to my business? While what people who are struggling will do or people who are not successful will immediately say, "Well, this isn't going to work for my type of business." Maybe that particular promotion that he just explained doesn't fit perfectly, but how can you engineer it with some of the other things that he's talked about here? Let me ask you—

Hopefully one of your listeners will do that and then I can put it in my next book.

Absolutely. Absolutely. I love that strategy. If somebody owns more than one business, like for example, my favorite restaurant in the world is literally here in Chicago. It's called Alinea. And the chef owner also owns a bar— well, I shouldn't even say a bar— a very nice bar and another restaurant. So when you're at Alinea, which is going to cost, you know, $400 or $500 a person to go to dinner, they're talking about, well, what are you doing after this? And then they direct you over to his other place. And then when you're there, they talk about his other restaurant. So if you own more than one business, I mean, Again, very, very applicable. Let me ask you this. What about for a small business person, what do you think about them using local mass media? Can they use it effectively? Is it something that they shouldn't be doing?

Talk a little bit about that. I think local mass media can be extremely effective if you can find a way to get a return on investment. The key is there's no doubt that it's going to reach a bunch of people. So number one, do you have a message that's compelling enough that if enough people hear it, it's going to bring people in to buy? And two, can you buy the media in a way that makes it effective for you? So I mean, all that stuff is negotiable. And I have a lot of different strategies for negotiating a radio buy. So, you know, at $5,000, maybe that schedule is just not going to work for me. But it might work for me at $2,000. So my goal then is I've got to find a way to convince my salesperson to sell me that schedule for $2,000 or to add enough stuff to make it worth my while. So basically I reverse the sales process. So when I talk to media reps, I sell them. I know what I want and I know what I want to pay for it to make it work for me. So then I have to use my sales skills to convince them to go back to their boss and tell them why they've got to let me do this.

Hmm. So you're not against then using mass media, local mass media, as long as you're getting it at the price that's right for you, which is kind of surprising. Which was also surprising in another conversation that we had is your take on mass things like Groupon and LivingSocial and things like that. I asked you, "Hey, Jeff, what do you think about that?" I thought your answer was going to be, "Absolutely don't do that." That was not your answer. Talk a little bit about that because it was very, very surprising and you gave a great answer as to how folks can use it and use it effectively.

Well, to use something like a Groupon, it's all in the structure of the deal. What happens all too often is that, first of all, you have to offer it at half price. Then you get half of that. Whatever you're offering, you're going to get at the most 25 cents on the dollar. So if you have an item or a service that costs you more than 25 cents on the dollar, you're going to lose money for everybody coming in the front door. And contrary to popular belief, you won't make it up in volume. However, if getting people in the front door allows you to convert them to becoming a regular customer, then it would make sense. Now, the offer itself, you may want to promote something where you have a higher profit. I had a client last year, Moe's Southwest Grill. Instead of offering an $8.50 burrito at half price, which means they're going to lose money when they get just a couple bucks for it, okay? If instead we promote catering, which is an area we were really pushing hard, like $100 worth of catering for $50, that could be a little bit of profit. But not only that, you're identifying people that use catering services to that. That has a tremendous value, and you're not losing money from the transactions. So it makes more sense. You just have to think it through. I get asked this in my seminars. People ask me all the time, "What is the best form of advertising?" I get this question a lot. My answer is every form of advertising is good, and every form of advertising is a complete waste of money. It's all in how we use it. I'm not going to say something is a total waste of money because there's always someone that found a way to make it work because they found a smart way to buy it right or use it in a creative way that showed them a return on investment.

That's a lot about what you and Dan talk about in the book, No BS Grassroots Marketing, is the correct way to use these things that just because this is your area of expertise that most people, most business owners just aren't going to think of. Just that example about using Groupon properly, because, you know, I personally, I would tell my clients, hey, no, don't use it, doesn't work, you bring in the wrong type of customer. But how you just explained it, well, now you are bringing in the right type of customer with it. So just, just very brilliant. Let's talk about— let's take it— what I want to do here is let's take a business example. Let's take, let's take a restaurant, for example, because you're very familiar with that. I mean, you've worked with dozens and dozens and dozens of different types of businesses. Let's take a restaurant and what I'd like you to do, I'm going to put you on the spot here, you didn't even know I was going to ask you this. I want you to construct for me a simple grassroots marketing campaign. What would the pieces be involved? How would we go about it? Okay, I've got this restaurant. I've got an Italian restaurant in Alpharetta, Georgia. That's where I live. There's a zillion other restaurants around me, Italian and otherwise. Construct something for me. How's that for putting you on the spot?

No, that's fine. That's perfectly fine. First, I gotta ask you a few questions. Um, you have regular customers.

What is your average transaction per customer? My average number, but I need to know this number. Okay, let's say my average transaction per customer is $25.

Not per person, per check.

Uh, per check. I've got a pretty good restaurant, so it's $75.

$75, okay, that's a good number.

A good regular customer of yours, someone you would consider regular, comes in how often on an annual basis? My good customers come in at least once a week.

Once a week. So the average regulars, once a month maybe? Yeah, once a month. Okay. So you're looking at roughly, I'm going to do rough numbers, a good regular customer to you is worth $1,000 a year.

Is that fair? Yes, that's about right.

Okay, $1,000 a year. So now I know what the person is worth to me. What am I willing to do to get those $1,000 people? That's the first step. Now, here's another step. Somebody comes to my restaurant for the first time. They hear about it from a friend. They see my advertising, whatever. They try me out for the first time, what are the percentages or what are the chances of that person becoming a regular customer? Or if 10 people come in for the first time, how many of them become one of those $1,000 people?

Now this we do through research, but you could guess. Okay, well, because I just got my gold membership with GKIC and I'm following some of this stuff, I've been doing a pretty good campaign. I've just started though, so 4 out of the 10 will come back.

I've just started with this. Okay, 40%.

4 out of 10.

Good. Now, my goal is how much do I want to increase my sales? What am I shooting for this year?

Well, what would you say would be reasonable, practical for me? 25%. Something realistic.

You've got a million-dollar restaurant? Yes. You want to generate, let's say, an extra $200,000 from local marketing.

That would be great.

That means I need another 200 of those regular customers. Right? Okay. 200 of them. How many people do I have to bring in the front door under the right circumstances to generate 200? Well, I'm getting 40% conversion, so if you could do the math for me, it would be probably around 600. I don't know, how was it? 500, 600 people in the front door? Yep. Okay. Okay, you math geniuses can figure this out. Usually I have a computer that does it for me. So I know now that— but let's just pick a number. Say I need 500 introductions to my restaurant to generate $200,000 worth of new business. Now I know the exact goal I have to do. Now I start working on my promotions. And I do a couple cross promotions a week. Eventually, after the first few months, I start to determine from a cross-promotion, a VIP card, a fundraiser, if I do an employee referral program, if I do a blowout promotion, a few other things, I know what I can expect in the way of not just redemptions, but first-time buyers as a result of it. And what I do then is put together a plan of a variety of promotions I need to do over the course of a year, okay, 2 or 3 a week, to generate that extra $200,000 of business.. I know it's not very sexy, but that's how I determine what I have to do. Then the rest of it is just executing the plan and making adjustments as I go.

Okay, well, I've got an objection. You say I need to do 2 or 3 of these promotions a week, Jeff? I mean, God, that's going to take a long time. I'm a busy restaurant owner. Is it not going to take a lot of time, these promotions?

Well, tell me about some of your customers. You're an upscale Italian restaurant. I bet you have some presidents and managers and CEOs some major employers in your community.

Absolutely, absolutely. In fact, the biggest—

I know for a fact that Mr. Smith comes here once a week and entertains his clients, and he is the executive vice president of CNN over there, and they have 25,000 employees. Why don't we talk to Mr. Smith, and we're going to set up a special certificate that allows the CNN employees to get free dessert and a free appetizer with a purchase of any entree for a 60 day period. Oh, he was. Okay, that's one. Now we just need, you know, 25 more others.

No, no, I get it though. I get it. So what you're talking about is a conversation with my customer that's already coming in the door anyway. It's like a 5-minute conversation.

And it may not be a customer. I happen to know that one of your closest friends happens to be the youth pastor of your church and they want to raise money for a mission to help some people and you're going to help them do it because they're going to on a certain day, you're going to donate after you do your normal sales, a percentage of sales to that effort and they're going to go out and promote it for you. And of course there's a lot more details than that.. But you already know the guy. You see him on a weekly basis already. He's your friend. That's a promotion. You're doing him a favor, by the way. Then you're going to help him raise $5,000.

It's going to generate new customers for you. Absolutely. I'm going to get the free publicity and all kinds of good— just brilliant. I put you on the spot. That was great. Jeff, again, you're always great. You're always entertaining. Gave so much value. We really appreciate it. So thank you so much for your time.

My pleasure. Thank you for listening to the Magnetic Marketing Podcast with Dan Kennedy. If you love hearing in on these lost Dan Kennedy talks and speeches and calls, then please let someone else know about this podcast. That's how you can help it to grow, and the more it grows, the more free Dan Kennedy we can bring to you. Also, Dan would love to give you the most incredible free gift ever designed to help you make maximum money in in minimum time. Now this free gift comes with almost $20,000 in pure money-making information for free just for saying maybe. You can get this gift from Dan right now at NoBSLetter.com. Not only do you get the $20,000 gift, you also get a subscription to 2 marketing newsletters that will be hand-delivered by the mailman to your mailbox each and every month, one from Dan Kennedy and one from me, Russell Brunson. To get this gift and your subscription, go to NoBSLetter.com right now.