How To Hit The Bullseye Every Time When Choosing A Market (2 of 2)

One of my favorite shirts that has been put out by Magnetic Marketing lately has been the Magnetic Marketing logo and a giant bull coming through a target. It's one of my favorite shirts. If you have one, shout out, absolutely love it. Let us know in the comments, screenshot it, share this episode with an image of your shirt because I absolutely love this shirt. Welcome back to the Magnetic Marketing Podcast. This is part 2 of how to hit the bullseye every time when choosing a market. Now, in the last episode, if you've missed anything, or if you're just looking for a quick reminder, we talked about what it actually means to hit a bullseye. And then how do you make sure that you define what your market is? You figure out the psychographics, the behavioral predictors, and the key criteria or benchmarks that you use in order to determine whether or not this market you have selected is the one you should be using, or if you should be looking at a different market. This is a powerhouse episode. I hope you have not missed it. If you have, definitely go back and listen to it. Today we're picking up on part 2 and we're talking about how do you ensure that now that you've chosen your correct market, you don't go marketing and instead you go targeting. And how can you make this even broader by reaching across the aisle? Let's continue. How to Hit the Bullseye Every Time When Choosing a Market, Part 2. With Dan Kennedy and Bill Glazer.

I don't think there's anybody that has had a bigger impact in the field of direct response than Dan Kennedy. The legend of Dan Kennedy should be ignored at your own peril. They're not really lessons, they're kind of laws that you live by. Dan opened my eyes to what small business marketing looks like.

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Welcome to the Magnetic Marketing Podcast with your host, Dan Kennedy.

Going now from market to targeting. So how do you use this whole market thinking in order to get to target?

Well, you know, look, there's only two, fundamentally there's only two ways to get a prospect that then becomes a customer, a client, or a patient. We either generate leads from scratch or we access leads that have already been organized someplace for us. So if you're doing lead generation and you are thinking targeted, then that thinking governs the selection of the media that you might choose to advertise in, right? It governs the message because you want to call out in the message to the profile of the person you want to respond, which means again, you're narrowcasting, not broadcasting, and you're being exclusionary rather than inviting everybody in. You are actually, by calling out to someone specific, you are telling everybody else to stay away. You may want to build dog whistle language code into the message, words that are meaningful to the people you want to attract. And of course, it affects what kind of bait you offer, whether that's the title of the free report, the way the preview seminar is positioned, whether you do at your restaurant, whether you're going to do a wine fest or you're going to do a beers of the world fest. So you're— all of these targeting issues, the more you know about who you want, the better you can make lead generation work. And again, if you look at mistakes, most people again do very broad lead generation and often evaluate the effectiveness of it purely based on the quantity of response they get. No more sophisticated than that. If you're not going to do lead generation from scratch, then you're going to go to somebody who's already put them together. For the most part, that means mailing lists and list segmentation within the list. And again, it's your thinking about your target that helps you choose lists and helps you choose the pieces of the list that you may very well want to focus on, or you may very well want to exclude. I had a conversation this morning with somebody who— it's irrelevant what business they're in, but they're in a particular niche, and 80% plus of their A and B level customers all have businesses that are doing more than $500,000 a year in business. They are marketing to the entire niche. So less than 20% of their marketing budget is being allocated to the segment of the list that represents 80% of their profit. So they got the 80/20 rule working, they just have it working against them. And you can get more precise, and if you dug into their records, you would find that married couples who own this particular type of business are much more responsive and more valuable than singles, and certain states are better than— and so you can really winnow down the list of, in this case, association members down to a relatively small fragment of the whole list and be very effective targeting to it.

Well, I think you would agree with me. I mean, one of the biggest things that I see when I work with folks, and I think you would say the same, is that most people don't put nearly enough thought into this whole idea of market selection and targeting. I mean, you see that as well, correct?

Absolutely. One of the great direct mail marketers of all time, Dick Benson, flat out says that that the only commonality between every direct marketer on the planet is they don't spend enough time worrying about the list. And I think he's right, and that's direct marketers. So people who really don't yet think like direct marketers, it's even truer. You know, they are— they tend to be— if you look at the message-market-media triangle, they tend to be either media-driven 'cause a media salesperson is at the door, or they tend to be message-driven based on the thing they have to sell and its features, benefits, virtues, and what they want to say about it. They don't really tend to be market-driven.

Yeah, you know, I had my first meeting of my new Platinum Mastermind group. They actually were coming up to the second meeting, but we had the first meeting, and many of them were new to Mastermind.. And although all of them have businesses, and it was kind of interesting that several times they would get up in front of the room and they would start describing the product, which I guess in this particular case we would lump that under message. And I had to constantly wrestle them back to, well, let's talk about how we're going to sell the product more importantly than the product itself. And I think that really supports your point about the fact that people aren't Aren't market and also target-driven enough.

Oh, and they even confuse it. I mean, the conversation you just described, see, I used to have this within the National Speakers Association realm all the time. So a typical cocktail lounge conversation would be, hi, you'd introduce yourself, hi, I'm so-and-so. The person would introduce themselves, hi, I'm so-and-so, and I speak about XYZ. And I would say, "Great, tell me about your market." And they would now proceed to give me their speech. They would tell me their shtick. And after 5 minutes I'd say, "I get it, you do stress management. Now tell me about your market." "Well, there's these 7 ways that people control their stress." They would be right back into their shtick. They couldn't even delineate the difference. So the dragging them back to who you're going to sell yourself to was an ugly process. They didn't want to go.

Again, I just finished this week, I did the 2-day extreme marketing makeover event, which was a fascinating process. First time I ever did anything like that. And the same thing happened there as well. They kept going back to describing their product. And I kept on wrangling back to let's talk about how we're going to sell that baby instead of you don't have to teach me how to do it because I don't need to learn how to do the thing. We just need to know the thing that they were selling. It's really more about how are we going to market this thing and the marketing processes to it. So let's talk quickly about— about lists themselves if we can. Why don't we start off with talking about the different kinds of how you lump lists into different categories?

Okay. Certainly, and a lot of people don't monetize it well, undervalue it. There is the house list or lists, which which is direct marketing language really for your present customer list, your past customer list, your I know they're lost customers list, your current leads that have not yet been converted to customers, your accumulated unconverted leads that haven't been converted to customers. So those are your house lists. You own them. You control them. You could pretty much do anything you want to with them, and there's enormous stored value in these lists. Yeah, most, most people certainly don't do much with the accumulated leads, and many don't do anything with the current unconverted leads. You know, they either sell them or they don't, and so that's house lists.

Yeah, and before you move to the next category, I think it's I— it's good to emphasize the point that in your house list, there's always biases within that list.

So when you want to—

Absolutely. Yeah, so when you want to figure out how to use that, one of the smartest strategies to do is to look for those biases, which most people don't do. So they just— they'll send everything to everybody, you know, and they'll certainly get a much better result if they were to more narrowly define to those biases. So what is the—

Yeah, and in really big lists, of course, you can essentially do lead generation into your own list, which is the way of doing what you've just described.

Listen, we've done that at Glaser Kennedy where the Opportunity Concepts marketing event, for example, you know, we went out to our list and asked people to raise their hand if they were interested in that topic, and then we followed up with our marketing campaign. So, great example of that.

I just had a conversation a couple weeks ago with I was talking to a particular financial advisor who does big numbers, a lot of advertising. He's got unconverted leads, people who raised their hands, they registered for a workshop, didn't show up, they asked for information, whatever. 20,000 names. I said, "What are you doing with them?" "Well, I'm not doing anything." Then the next thing is, there's too many of them to do anything with. I don't want to be mailing stuff to 20,000 people. Well, how about if we lead generate into the 20,000 and get 512 of them to raise their hands that they're interested in X and 1,800 to raise their hand that they're interested in Y and then let's start talking to them about X and Y. You know, so there's a lot of value in house lists.

Actually, you just gave me a good idea for this call which I'm going to lead generate into our diamond membership, diamond members at the end of this call, you'll see that in just I did not think of it until you just said that. We're going to do it by live demonstration on this show. So we talked about house lists, we talked about—

Well, next would be affinity lists, which for me, for example, for a number of years it was, because I just mentioned it, it's the National Speakers Association. I was a member, I was a speaker, there were another 4,000 of them. I devised all sorts of stuff to sell to them. That was an affinity list. A lot of information marketers essentially begin with an affinity list. Grassroots marketing, real sort of down in the trenches, the local small business owner, the professional practitioner, you know, if he's a military veteran, he has affinity with other military veterans, and he really ought to be leveraging and using that whether he owns a shoe store, hardware store, he's a dentist, doesn't make any difference. So, you know, affinity. That's the next No BS book we're working on, by the way, is grassroots marketing. Then there's compiled lists, which come from public records. So, you know, if you sell Chryslers, you can get a list of all the Ford owners. Ford's 5 years old or older, 3 years old or older. You can get compiled demographic lists, age, do they own a house, that sort of thing, compiled lists from public records. There's compiled with selects, so you take in a zip code, a compiled list would be everybody that lives in that zip code. Then you start chipping away at homeowner versus renter, value of home, household income, one-car family, two-car family, three-car family. If you happen to be in the auto insurance business, it's very useful to make that selection. So compiled with selects. Then you get into response lists, which are typically either buyers, inquiries, leads, or subscribers. So they may be active, they may be inactive, they may be expired, they may be very new within 90 days, and sometimes an inquiry list is every bit as good as a buyer list, in a few cases better, and so— but we know about them that they respond to direct marketing, and again within the response list then you have all the same kind of selects you might have in a compiled list— homeowner, age, income, married, not married, etc.— but you also have selects available to you that would only be available from a response list, such as how recently they responded, how frequently they buy if it's a buyer list, at what price points they buy at, and the method of origination. So like a catalog company list can sometimes break out and give you, if you want them, only the buyers who originated from direct mail or only the buyers who originated from their TV commercial or only the buyers who came from the web, etc. So method, you know, of origination. So you got house list, affinity list, compiled, compiled with selects, response, and response with— with selects.

Yeah, and again, I guess we ought to just sort of close the loop on that last thing you said because figuring out the way that they bought can oftentimes be a very important fact because, you know, if we know they bought on television, then we can continue to sell them on television. If we know that they bought through direct mail, we continue to sell them through the way that they bought before. So the fact that they're just a response list doesn't mean that if it worked in radio, it's going to work in direct mail.

I mean— Yeah, for example, if you take a TV buyer who, let's say, bought a $300 course on X, and you now mail them a 26-page sales letter selling a $300 course on Y, you may be disappointed in the response, not because they weren't the right buyer and not because it wasn't the right course, but because they don't read, they watch TV. If you send them a half an hour infomercial formatted DVD, you might get much better results, and in fact, that's what you may have to do in order to sell to that list. So method of origination is something— it's one of the big virtues of response lists is that you can tell how they bought in the first place, where they came from,— and in fact, you can even often get to the actual piece or ad that brought them in in the first place.

Yeah, and I guess we should also say, and it's maybe a little bit more advanced discussion, but we should touch on it, is that oftentimes you're going to take two of these lists and you're going to like, you're going to merge purge them against each other to come up with an even more active list. So for example, You mentioned before one of the choices is affinity list. So let's say I wanted to sell— going back to my original information marketing course, I would get a list of all menswear retailers and I wanted to mail to them. So I would overlay that against a response list on top of the menswear list of try to find out who was a menswear retailer who had bought through direct mail.— and so there's a further overlap there that even narrows that list down more, but we know that they buy through the media that I'm using to sell to them.

Yeah, and generally speaking, you know, my principle is less is more. First of all, the quickest way to go broke with direct mail is mail an entire list of anything. So really, the better you can shrink the list to the highest probability prospects, even if it costs you money to do that one way or another. You are usually better off in net terms.

And I also want to be very clear about— the members who are listening— that I'm not suggesting that just because a list has worked in direct mail, it won't work in other media. An offer won't work in other media. As a matter of fact, one of the smartest things to do is once you've got a great offer working in the media is to now start testing it in other media.

Because if you can get it to work in multiple media, then all the better, right? Yeah. Yeah. And you often— it's not predictive, but it's indicative. I mean, often if something works in one print media, it will almost always work in another. So for example, a really good newspaper freestanding insert, if it works there, it will usually work converted to a direct mail piece, and it will usually work converted to a Valpak insert if it's a consumer thing. Now, will it work if it's turned into a radio spot? Maybe. Tougher to do, of course, because the FSI has a lot more copy than the radio spot will allow, and radio's a very different media. But still, anything that works ought to be tested almost every place it could work. And vice versa, if you got an offer that's working on radio, will it work as a Valpak coupon, as a newspaper FSI, as a direct mail piece? The success on radio is only indicative, not predictive. But what works ought to be tested every place it could work.

Let's spend just— I think let's figure that we got a few minutes left before we'll open it up for questions, but let's— so I have a couple more questions that I want to ask you, so there's two of them. So the first one is let's talk a little bit about— because we're talking about lists, so people often ask me the question of, you know, where's the best way to go get lists? Why don't you talk a little bit about it— about that is how do you— how's the best ways to acquire lists?

I'm going to work backwards from the simplest to the most complicated.

So the simplest is—

okay, got you. Okay, okay. So that's simple. I'm not sure why that's backwards, but okay. Well, um, so the simplest is, um, always be list building in everything that you do. So when, you know, when when the phone is answered in the auto repair shop and the guy says, do you have a part for an '86 Plymouth, the correct answer is not yes or no. The correct answer is, I'm going to check right now on the computer for you, sir, but while I do that, let me get you added to our list for our monthly coupon package and our monthly drawing for a free vacation to Vegas. May I have your name? May I have your email address? So we're always list building. Okay, on everything else that we do. Okay, costs us nothing, or maybe in the scenario I just gave, a buck or two bonus for every data capture to the guy who's answering the phone, but it doesn't cost us much.

Which most people, most Glaser Kennedy members get half of that, which they're light years ahead of everybody else, but most of them get is, well, we gotta capture names of all the buyers. They get, you know, and the truth be told, when I was in the menswear business, I was guilty of this exact same issue, which is I was only capturing names of buyers. So when I left the menswear business, I had 2,000 customers, and that was a great list, and nobody else had anything nearly as big as me. But what I wasn't getting was all the prospects, the people that came in and didn't buy. Right. So you've really taken it to another level, which is anybody that even shows interest, we want to capture that information.

Yeah. Drives me crazy when I see it. So like at the racetrack where I race, a big function on the retail side in the clubhouse is getting groups to come out there. So, you know, the local Arthritis Foundation chapter has their dinner out there. Well, however, the only list Northfield creates is people that sign up for the club card. So 300 people come out there, have dinner, are exposed to horse racing for the first time in their lives, and have a nice time and leave, and there's no way to follow up on them because nobody captured them. And if you had made any attempt at all, hey, join the free club here and you get a free $2 wager tonight, and you get a coloring book for your kid, and you get notified of special events, you'd have captured most of those names and addresses.

So always be list building. Do you, by the way, before you go, have you ever recommended that to them?

What's one of the two most futile activities on the planet?

Yeah, I would not have recommended it either. I mean, I wasn't suggesting you should, but yeah, I get it.

Dispensing free advice, and then the only thing more futile than that is free advice to spouse or family. Right? I mean, that's— so the second thing then is lead generation. Right? So you always be building your list with lead generation advertising and in many cases a lead generation option to advertising. So again, if you look at retail advertising, you look at a car dealer's ad, most of them, the whole full page is all cars and prices and come on in and there's hot dogs this weekend., but there's no— there may be now a website, but there's really no drive to, as an alternative to coming in and buying a car, go to this website and download the free report, take the free test drive video, enter the free contest. There's no list-building function. Third would be pure physical grunt work to build lists. It's ugly, but it does sort of fall into that on-the-street-level thing. I many, many moons ago built seminar prospects by going to parking lots of hotels where seminars were going on and tucking my postcards and flyers under all the windshield wipers. Next up, there's targeted free gift distribution through others. So the health food store provides a free book about healthy eating to be given away by all the chiropractors in the city to their patients or to one chiropractor with whom they have a strategic alliance. I do viral books, the Farting Cat book, the Ultimate Success Secret book, that people give away, but there's a road in them that leads to me. So free gift distribution through others who have your customers. Kind of linked to that, strategic alliances, list sharing, exchanges, co-op marketing, 2, 3 people go together to do a mailing or run an ad. List build, and then last is commercial sources where you are going into the commercial list marketplace and you are renting lists from list owners through the list managers and the list brokers, and you have access to— because privacy is dead— you have access to response lists. Of just about every imaginable stripe. I mean, anybody you could want, somebody's already got, and they have them in a response list format that can be rented. It's not easy, especially if you're a small user. You're not beloved instantly because list brokers want to deal with people who can rent a lot of names. List managers want to deal with people who can rent a lot of names. But that doesn't mean they won't deal with you. There are minimums to meet, and often the local marketer winds up having to rent more names than they can use, but that's cheap money compared to finding the good names through other means. The place you begin your work is Standard Rate and Data Service. It's SRDS.com, and it costs money to play. I think it's about $800 a year. I'm not sure.

Then you go to—

and you go to SRDS and you put in your category and up pops all the— Yeah, you could search by category. You can search 56 different ways. And if you're just beginning, you want to avoid just searching in the obvious categories because you almost don't know what you're going to find that might work for you until you've looked at everything.

So last question before we open it up to questions is, so you know, you are hugely committed to using direct mail and make no bones about it. And as everybody knows, I mean, I came through the whole offline world. Well, when I started marketing, there was no real online stuff, so it wasn't even an option. But, you know, I've heard you say, Dan, and I believe it to be true, that there's no really super great company out there that has ever really become a super great company without using direct mail. So talk about your commitment to direct mail.

First of all, your statement's pretty much correct. I mean, there are now some true online juggernauts, but they're really ad media companies. If you think about Facebook, for example, right? Right. Yeah, I don't think they use direct mail, but they're not really a marketer. They're really an advertising media. But Amazon uses direct mail and they're a marketer. eBay uses direct mail, they're a marketer. eBay publishes a— I just mentioned it in the newsletter, eBay publishes a print magazine for all their sellers. Why? Why not just— all their sellers are already online and they're all at their site. Why not just drive them to a download? Well, these people aren't stupid. They figured out that it works. So my reasons, first of all, what lists really represent is somebody having done an enormous amount of expensive and really ugly work to hunt, find, and round up people with like interests, known behaviors, buying at certain price points, buying at certain frequencies, responding to certain appeals. They've— that list owner has done a lot of work, so you and I don't have to.. And there's really not much readily available that mimics that. There's isolated incidents like what Peter Lowe did for me as a speaker mimics that. But for the most part, direct mail to mailing lists is where you're able to access all of that work that's been done for you. Linked to that is it's your best opportunity to access known responders and buyers about whom you can get a lot of data so you can precision match messages and offers. Third, you can see what they've responded to currently and in the past. In most cases when you're renting lists, You can certainly get the control piece that the list owners used to sell to them. Usually you can get a list of who else— what other marketers are renting the list and using it often, and now you can get what they're mailing, and so now we can see what everybody's responding to. And last, you can create evergreen or near evergreen marketing systems rather than having to literally reinvent your business every day. So there's— it's difficult to get to that point, but once there, you have enormous control of your destiny, and you have less risk to variables that occur in other media. I mean, everybody's telling me about their pain and agony from Google changing the rules every day. The mailing rules don't change. And so, you know, we had a— I had a platinum member for years run IPAC in the auto repair industry, mailed the same booklet, no changes, 6 to 10 times a year. Craig Simpson, who you know, Bill, in fact you're working with him, and Ken Roberts' business, they sold 700,000 home study courses mailing exactly the same booklet into exactly the same list month after month after month after month. One of my current clients, Michael Kimball, we have a postcard, haven't changed it in 11 months., and it mails by the hundreds of thousands a month into the same list. So the combination of those 4 things, whether you're a national marketer or a local marketer, it's very hard to replicate them anyplace else. You can replicate some of them, but you can't replicate all 4.

And by the way, all 3 of those examples you gave me are fascinating to me, but the Kimball one is the most fascinating of all of them. Because what he's doing with direct mail is just fascinating.

In a niche that others think is dead, by the way. Oh yeah, yeah, yeah, yeah. And that hardly anybody else is working with direct mail.

And they all see it in their niche and they, it's like they can't even, they can't grasp it at all. And yeah, and we, as everyone listening to this call, well certainly Dan, you know, is we're actually getting ready to substantially increase our direct mail presence. In many ways, and we are direct mail guys. We're even increasing that. And also, it's fair to say that a lot of the online guys are now gravitating more over to direct mail now, and have been for some time.

Yeah, few of them are committed enough to really, you know, get to that last point. Right, right, right. Because sometimes it happens right out of the gate. Oftentimes it requires some real committed and diligent effort. The online guys, it is tough for them because they're not used to having to buy stamps and they don't like it. But the ones who stick with it learn to love it, as do we.

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