Selling To The Affluent

Welcome to the Magnetic Marketing Podcast. This is a topic I love to return to every single time I start to hear the word recession showing up more and more often, or I start to see stocks do some crazy little jumble, or I start to hear things in the news that just make the ground feel a little bit more uneven. This is the topic that changes all of that and gives the power into your hands. In this episode, we get to listen to Dan Kennedy and Susan Adams as they talk about selling to the affluent. Selling to the affluent or the wealthy is the way to start creating some true stability, especially when hard times come. And it's a framework that has its own set of steps and strategies in order to make sure you hit this right and you speak to that customer so that way they turn to you and see you as the only answer to their underlying problems that keep them up at night. Let's listen in as they talk about joint ventures, referrals, how to be able to have a conversation that revolves around the sale of your product. And puts you in a position of power.

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.

Dan teaches strategic direct response that is timeless.

His ripple effect touches people who don't even know his name.

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. Good evening, everybody. Dan Kennedy. I'm here with Susan Adams. So just to appease my paranoia, Susan, are you there?

Yes, I'm here, Dan.

Wonderful. Ain't it great when a plan comes together and technology works?

It doesn't happen every day, does it?

That's, that's absolutely right. Well, folks, thanks for Joining us tonight, you're in for a great call, a timely call, an important call. Susan, as you undoubtedly know because you are here, has spent a fair amount of time very successfully selling to high net worth individuals, high income individuals, and so that is why we have gathered here is to pick her brain. But Susan, maybe for those who are brand new and therefore will have missed the two-installment interview with you in the most recent issues of the No BS Marketing to the Fluent All Letter or haven't read your biography, maybe you can give everybody the brief thumbnail of who you are and how you've arrived here.

Well, sure. I'd be happy to. I'll give you the Cliff Notes version. I started out in sales a few years ago, I'll say. And my first job was actually selling encyclopedias. One of those jobs where you kind of met with people every night and had a pre-rehearsed script and no business cards. And about 15 years later, I found myself out on a veranda at Pebble Beach having a glass of wine with a couple of guys who probably had a combined net worth of about $200 million. And in the interim, I had worked for big companies like General Electric and Pitney Bowes and I've done everything, you know, from selling encyclopedias to cold calling to finally selling to millionaires.

And mostly in the selling to millionaires category, you've been dealing with fractional jet ownership?

Yes.

I noticed the other day, I'm sure you noticed it, that recession be damned, NetJets just ordered $1.9 billion worth of airplanes.

Yes. Yeah, but the one category that is still growing, and I have a lot of friends that actually sell the whole aircraft, like the whole Gulfstreams, you know, that sell for $30, $40, $50 million. Those aircraft are all on 3- and 4-year backlogs because there's such huge, and it's global demand. The group that still has considerable amounts of money is definitely, you know, the affluent and the super affluent.

For starters, I think what will interest people, I'm sure that sitting on the veranda selling to the multimillionaires is a lot more fun than being on the living room floor with the smelly dog and the two kids and the guy who can't spell a World Book making the encyclopedia presentation. Having done that type of selling myself as well. I do understand. So I'm sure that the veranda scene is a more pleasant scene. What most people will think— some people first of all will think the entire market, the entire opportunity to do business with this level of customer is beyond their reach or inappropriate for their business. And most will think that selling to these people is dramatically, radically different. So maybe you could talk a little bit about what is different about selling to the affluent, the ultra-affluent, the high net worth folks.

Well, the thing that makes them different as customers is the thing that makes them the best customers, and that's that price is not an issue with them. There's no price discussion. It was the first job I ever held where you didn't have to spend, you know, a lot of the sales process defending your price. And, you know, the salespeople that are on the call or people that are in businesses that are on the call tonight, you know, how much of your time do you spend right now with your clients defending your price? Well, with this group, you don't have to defend price.

And I would make the point, and I'll be interested to hear your comments on it, And again, the leap to assumption is price doesn't matter solely because they're rich. But it's really my experience that— well, I mean, obviously that is true, but that's only part of this. That they have a unique psychology and philosophy about price themselves and a different set of priorities than price. That it's important to understand.

Is that— Right, price is wrapped up in value. It's all wrapped up in the value they perceive in your product or service. So price is a component, but it's a component as part of the value discussion. And all the research that's been done on, you know, this group of people, they all say, oh, well, the affluent buy on value. But then they never tell you, well, gee, as a business, how do you develop value, you know, for yourself or for your product or service with this group of people? And, you know, from my experience, value is created in a variety of ways. And a lot of it goes back to, you know, understanding your buyer as well. First, you have to know who you're selling against. You have to know your competition inside and out. You have to know their strengths and weaknesses. And you also have to have the ability to be able to change the conversation with this individual and change the buying criteria. And what I mean by this is, you know, when I tell people that I used to sell fractional ownership of jets, you know, the assumption is you were selling the jet. Yes, I was. I was selling the jet as a means of getting from point A to point B, but the jet wasn't what they were buying. The value of what they were buying came in the experience of owning the jet and the experience of what buying the jet was going to be able to allow them to do. So through the course of the conversation, and, you know, you notice I always refer to sales as a conversation. That's what I did. I just had conversations with people all day long. Through the course of the conversation, you present the value of your product or service in the context of the experience that it will allow them to have. And once you have the ability to start doing that, you're communicating on a level with them that really resonates, and you're not talking about things that all your competitors are talking about. You know, for instance, if you, you know, were just showing an airplane, I learned this because I would watch people as they did it. The people who were aircraft guys, which I was not an aircraft guy when I came into this business, they would start talking about the avionics and the engines, and I would literally watch a CEO's eyes just glaze over. He could have cared less about avionics and engines. All he wanted to do was get in the cabin and say, "Yeah, this is a good size for me." I feel comfortable in the seat. The baggage will fit 4 sets of golf clubs. That was the extent of what he wanted to know about the airplane.

Yeah, you know, and which— the process that you just described is a process that people will have to now go through with their own business to make this transition to being effective with this market because like they were aviation guys, now everybody on the call is a blank guy, blank gal with the business they're already in.

Yes.

And so if there's a restaurant owner on the call, he's a restaurant guy at this point in the same way that those folks were aviation guys. And so people are so accustomed to talking about the products, the services, the features, the benefits.

Right, explaining things more or less.

That's right. That's right. And as they shift to these clients, they've got to make that change. I fly private myself. I don't own, I rent, but I had the same experience in— in initially finding the company I was going to do business with is people made the mistake of wanting to tell me, you know, about engine parts and RPM, you know.

And the thrust per foot of the engine.

Yeah, and I think it's important to understand different people are looking for different value, you know. They were also— I mean, like, for me, it is not about Although for many, I know it's a status buy, a reinforcement of self-image. For me, it was totally about convenience and avoiding the hassle of the other means of getting there. And I think people like get locked into one way of presenting what it is and what they do as a one-size-fits-all. Where, as you say, at some point a conversation when you're selling big-ticket items to affluent people, a conversation is necessary to try and determine what the value is. So talk about ways that you get to understanding your buyer.

Well, I think, you know, again, and you can go back to, you know, there's There's been a lot of research certainly done on the affluent. And, you know, something that I found very interesting that I don't see a lot of researchers talking about, they lump the affluent together in general terms. As, you know, okay, they're worth this much money, this much money, they're in this demographic. And, you know, they'll come back with general themes about them. I actually kind of— I'm a big believer in market segmentation. And I think especially if you're going to be marketing to this particular group of people and selling to them, you can— I'll use age as an example. You know, a guy in his 40s who, you know, is worth $20 or $30 million is in a different mindset than a guy in his 60s or his 80s who is worth that same amount of money, and you can sell and market to people differently just based on what you know about them from their age group that they're in.

Well, the married is very different than the single.

Exactly. And I don't see anybody marketing in segmentation to the affluent. Everybody kind of— if you open the Wall Street Journal, which, you know, I read religiously pretty much every day, almost all the ads are exactly the same. They're all targeting the same kind of buyer.— and the ads are all very similar. You know, they'll talk about exclusivity and, you know, things like that, but nobody is ever— is really trying to reach beyond those general themes and dig a little bit deeper, you know, to find a message that really resonates because they understand the buyer.

Even worse than the ads being the same and generic, the direct mail— and the material sent out to leads when they raise their hands is the same and generic. So, you know, I answer a lot of those ads as a student, and I'm amazed that there's no attempt to get even basic segmentation information like age, are you married, are you single, "Do you have small children?

Are you an empty nester?" Right.

And the few times that they do get it, they don't use it because they're clearly sending me a generic package, or if I'm on a list, I'm getting a generic direct mail piece. I rail against this all the time. I think it's a combination of stupidity and laziness, and it is something that the small business person can do that big— if they will. That big companies are either ignorant of or too lazy or just too big and bureaucratic and unagile to do, and that is to segment customers and prospects and tweak messages so that you're really running 5 or 6 or 7 marketing campaigns under one roof.

Exactly. With nuanced differences. Right, and the same goes back to even, you know, how you sell to them. You know, for instance, you know, a gentleman who was in his, you know, 70s or 80s, I always called them Mr. and Mrs. You know, we were never on a— it was always a very formal relationship. Whereas someone that was in their 40s, you know, they were in my age group, and if I called them Mr., they'd say, oh, you know, don't call me Mr., call me Joe. You know, so even those little subtle things, you know, so if I was talking to someone who was, you know, in his 70s and called him Joe, That was a big faux pas, you know. So when— and I would say the majority of our owners, they were in their 60s more or less. That's where the bulk of them resided for this particular— I mean, and most of our owners had net worths of over $20 million, just to give everyone an idea of what market segmentation we're talking about. But I mean, I can tell you, I see that happening every day, that no one is making any effort to say to, you know, someone in their 40s. For instance, for that person in their 40s, they're going to be much more in tune with the "you've made it" message, you know, the "wow, you've arrived," than someone in their 60s.

Right, because by the time you're in your 60s, you've been there for a while.

Right. Yeah. And in your 60s, you're thinking about different things. You're saying, "Yes, so what?

I've arrived." You know?

But in your 40s, That is a message that appeals to you. And so, you know, as you— and this goes across all the demographics of the affluent as far as I'm concerned. So it can be the millionaire next door, you know, that you're marketing to in this way. But understanding just, you know, age differences can make a huge, you know, advantage for you in just how you market to these people.

Well, and the brilliance— one thing for people to catch here is to decide on the message that overlays what they sell to who they sell it to. Exactly. You've described a message category, the "you've made it" message. And this is, you deserve it and this is something you do now that you've made it. This is, now you dine in a better restaurant. You're supposed to know about fine wines. You're supposed to buy better clothes, etc. And people have to sort of pick a message category. And then pick a market category and then put their business into both of those things. What are some of the other mistakes? We've talked about a couple that you see people who are stepping up to marketing or selling to either millionaires or multimillionaires. What are some of the other mistakes you see them most commonly making?

I see, you know, especially, and you mentioned this before, the feature-benefit selling. The, you know, I mean, I do a lot of sales training now in the fractional market and the fractional real estate market, which is really, you know, very high-end resorts. It's usually, you know, 5-star resorts, and, you know, they're touring people through and talking about granite countertops. You know, and I'm sitting there saying, you know, if this person is, you know, affluent, they have granite countertops everywhere they go, so I don't think that's a compelling message that you're using in sales for them. So I think too many people get bogged down in the feature-benefit selling. And I also think that not enough people use what I'll call story-based selling. Stories, you know, and in copywriting, you know, which I know you've done extensively, stories are the most powerful way to get across any kind of message you're trying to get across to a client or a prospect. And it's much, you know, when people would ask me certain questions, you know, I mean, I used to get the, not the price is too high, but I always got the, how do people financially justify this? Because, you know, it doesn't financially make sense. Because it is a, I won't say a toy, but it is certainly an exclusive perk. And I would say to them, well, most of my owners have told me that they value the ability to get all their business done and still be at home at night to have dinner with their kids. And when I would say something like that, I never got that objection again because that was a message that resonated.

It's really not the price. It's not feeling foolish about wasting money, right? I mean, people often in buying premium-priced goods or services, they really are looking for the justification that makes it worth it.

Exactly. And the ability to, again, you know, maybe visit 3 cities in a day and still be able to make their kid's soccer game. Making their kid's soccer game was more valuable than all the business they did that day. So—

The best clothing salesman I ever encountered, I went into a store in the Forum Shops in Las Vegas, a Bernini store, and the guy sold me a suit for an unconscionable sum of money. I mean, that makes no sense. It's not that much better. But to make it short, I asked about price at least 7 times. He never answered me. He moved me all the way through trying it on to getting it measured to getting the tailor out there to when and where it was going to be delivered that evening where I was having dinner without answering the price question. Instead, he kept asking me questions that led to justifications. "What do you do for a living?" Helping him, of course, there was someone along with me who was goading the process. He says, "Oh, he's a famous author and speaker." This guy's off on a run now, right?

Well, you've got to have the suit for all your speaking engagements.

Oh, yes, the justification for this suit is how good it looks under the lights and how, you know, that someone like you in your position of importance, this is exactly the sort of, you know. And so every question led to an answer that came back to a justification for the price that in fact never got named. I mean, the guy was spectacular.

He talked about everything but the price. Exactly. Exactly.

And I was fine with it because he was elegant about it. He was good about it.

And he was good at telling stories. Well, and that's something as people who are on the call and listening tonight, think about your own business and think about yourself. What is your story? What is your story or a story about your product or service that would be compelling, you know, to an affluent individual. Because again, most of these people, they're entrepreneurs, they're risk takers, they're people that started out as a small business owner and maybe built it into something that they sold for $50 million. So there's nothing that they appreciate more than, you know, a message from another entrepreneur. You know, so I would stop thinking especially of the super affluent as this group of, you know, behind the fence untouchables, you know, that you can't, get to or that you have something that they don't want or they don't need. I certainly wouldn't view them that way at all.

Well, speaking of behind the fence, let's switch gears just a bit and rather than talking about selling to them, let's talk about the other thing that mystifies everybody which is how to find them, how to connect with them in the first place. So that you get the opportunity to sell to them.

Well, I know in your book, which I thought, you know, for anyone who's on the call that hasn't read the Dan's Affluent book, you really should because I learned a ton in there. And, you know, there was stuff, you know, I had, you know, Post-it notes all through it, you know, with little notes on it that I made. So, you know, from a marketing perspective, you know, that's a great resource for anyone to say, hey, here's a great place to go to learn how to do direct mail and things like that. Some of the things that I talk about are some of the more nontraditional marketing things that I saw be very successful in my company. You know, for instance, again, you look at where these people go. Where do they hang out? Okay, well, they all hang out at pricey country clubs, and you say to yourself, well, I'm not going to go spend $200,000 or $300,000 on a country club membership. Well, you don't have to. The thing is, is that all those country clubs, they're always doing charity events, and most of those charity events you can either buy a ticket and go to, or you can, you know, approach them once you know about the event and offer, you know, a product or service you have as a giveaway at the charity event, and that gets you entrance into the event, and it also gets you printed up into the program. You know, so that's one way. Non-traditional way that I would take.

If I won't derail you, to validate that, had I been prospecting, which is the last thing at the moment that I want to do, but Carl and I, oh, I don't know now, within the past few weeks we were members of the Cleveland Playhouse. And so we were at the opening night, pre-opening night thing before the public gets to go. For the run of the Broadway cast of the Jersey Boys here. And so they have a big pre-opening night thing. There's a dinner and then there's the performance and then there's dancing and then there's a dessert reception and on and on and on. And so we are now doing one of my least favorite things in life to do, which is sitting at a table of 12 with, you know, 10 people I don't know, um, and in all likelihood probably don't want to know, right?

Right.

And, and I'm to no good purpose going to have to deal with the question from civilians of what do you do, you know, to which there is no good answer. But right, but anyway, there we are right now. Had I been prospecting, it would have been a laydown. Exactly. Now the age range of the couples at the table were my 50-ish range up to probably 80. The couple, one of the couples, the guy owns about a $10 million a year business here in Cleveland in a particular type of financial services. Where we have other members. I have a couple coaching members. I even have a client he would probably know, which I chose not to mention. But even with the sort of intended not to cause probing further answer to what I do, it immediately led to marketing questions.

Right.

What do you know about this? I've been thinking about doing this. What do you think about that? This then gets picked up by 2 couples over and they own a chain of a particular type of store. I know one of their stores. It turns out that she has one of my books. Well, you know, I could have turned this into conversations leading to business without breaking a sweat. Didn't and didn't want to, but these charity activities, I mean, when you are— get yourself involved on a committee or in a donor circle and you pick something you like that you want to be involved with anyway, you are putting yourself in an ideal position to meet and multiply these kind of contacts.

Right, and it's just more of a nontraditional way of marketing yourself.

Well, yeah, it's non-marketing marketing, right? Now you also— we talked about it a little bit in the interview in the newsletter. You were and are particularly adept at creating entree to this crowd through joint ventures with others who already have the entree. And our folks are big joint venture people. They understand it conceptually anyway. So if you would, maybe you can talk a little bit about that.

Well, I mean, we use joint ventures all the time. And, you know, typically for us, you know, I mean, I'll use the Pebble Beach golf outing as a good example. We once a year would invite our owners to Pebble Beach. We'd pay for everything. We'd give them 2 first-class tickets. If they wanted to take their jet, they had to pay for it. So, but what we would do is to offset all the costs because it was really expensive. I think it came to $1 million. We would invite other partners in. And we would invite partners, you know, we would— I remember one dinner we had cocktail hour sponsored by a company called Breitling. And Breitling makes aviation watches. Well, these aviation watches sell for $4,000 to $5,000 a watch. During the time they were there, they sold 20 watches. So they more than made up whatever they were spending on the event. And now many people I'm sure are listening and are saying, well, yeah, you had this huge marketing budget. You were doing jets. You know, you had this and that. Well, what you have to do is take this down to your local market. I mean, for instance, I live in Pittsburgh. You know, Pittsburgh is not, you know, known as a big glam, you know, market, but there are plenty of things that go on in Pittsburgh that I could have tried to work from a joint venture perspective. You know, for instance, last year the US Open was here. Mario Lemieux has a golf tournament here every year. There's a vintage Grand Prix going on in the neighborhood around my house this coming weekend. So what I encourage people to do is, you know, look at your local market and look at complementary joint venture partners, you know, that you can start to network with and through, and they're not competitors to you. They're people who have access to clients that you may want, and they're people that can actually, you know, then, you know, work in a group to either do an event. You know, you may get 10 to 15 different businesses together to all throw this big event, and you all invite your customer lists. And guess what? Now you've got a guest list of 300 to 400 affluent people all in the same room, exposing them to your product or service. So, and the interesting thing that you'll find is as you start planning these events or going to these events, we always found— and again, you know, we were servicing a very high net worth individual. They wanted to come because it was such a great opportunity for them to network with other business owners, and they were always looking for joint ventures. So, you know, what you'll find is, you know, a lot of times people— will even come attend because they— everybody wants to be in a room with people like themselves. And that's certainly true with the affluent. That's why they join country clubs. That's why they go to 5-star restaurants, so they can be surrounded by people like themselves.

People are looking for a writer downer. There was one for you. Everybody wants to be in a room with people like themselves.

That's a good one. Right, it's just validation.

I would imagine, and I know that, you know, my book's out very recently, very new, and one of the skeptical reactions, I guess, from people, and you and I were talking about it really before we started the call, is that is that, oh, you know, for heaven's sakes, we're in a recession and the stock market's in the dumper and, you know, nobody's really buying anything. And certainly this is not the time to be trying to upscale my business and start marketing to a higher level of customer than I've been marketing to before. In fact, better I should go hide in a cave and wait until it's all over. And we talked about it a little bit before the call. I mean, you agree, I'm sure, that if anything now, I mean, it would be smart for any business to be doing this at any time, but actually the timing is superb rather than wrong.

Well, I mean, I'm not an economist, but I certainly don't see any indication on the horizon that things are going to get dramatically better better for the middle class, you know, in the foreseeable future. And, you know, I mean, I study the affluent. That's my business. I, you know, read reports every day from, you know, luxury markets and real estate markets and financial markets all on this group of people. And from the millionaire next door, which is, you know, someone with a net worth of $1 million or more, you know, obviously to the, you know, billionaires. They are still spending. I mean, they may have pulled back, you know, in certain areas, but they're still spending. You know, I read something the other day where, you know, jewelry is still flying off the shelves. And another report I read where 42% of high net worth individuals say this is a great time to buy a second home because the values of the houses are down. The thing about this group of people is they're very in tune with financial things, and they know if the economy is in a recession, it's a great opportunity for them because they do have money and they will spend. And I know when you did your call for your book last week, there was a gentleman who I think he did— he was— does swimming pools, and he was, you know, asking questions about, you know, how— is this a good time, you know, to be getting into that market. Absolutely, because the wealthy are still buying swimming pools. You know, it's kind of about changing your mindset in some ways and saying, you know, gosh, I never thought of my business as one to target to the affluent, but maybe sit down and say to yourself instead, here are the reasons why I should target my business there.

Yeah, and I think, you know, you mentioned earlier that, you know, a good percentage of these people from Millionaire Next Door up, have gotten there through their own devices. I mean, they didn't inherit it, and they're not sports stars with a lucky arm. I mean, for the most part, they got there by building businesses and professions. And so they have a mindset about this. First of all, they're not easily frightened, and I find that they're even sort of proudly defiant when it comes to economic downturn and as Phil Graham said the other day, certainly unwisely politically, but you know, perhaps accurately about the nation of whiners, you know, that they, resent that, don't want to be a part of it, and sort of take some joy and pleasure and satisfaction in going ahead and buying a pool when no one else is buying pools.

And a bigger and better pool.

Yeah, and a bigger and better pool. So your sense of this, and you study this, is that, you know, I call them least and last affected by recession. Your sense of this is that now and near future, you don't see a big pullback on their part?

No, the people that have pulled back are the people that I'll call the marginally wealthy. And when times are good, they're wealthy, but when times are bad, they're not because their stock portfolios have been hit, their house value's been hit, so they're not wealthy anymore. Those aren't the people I'm talking about. I'm talking about the people that are, you know, they're fine regardless of whether the stock market gyrates by, you know, 15% or, you know, and their house, you know, these aren't people that were running around buying their houses in the bubble. You know, the one thing I can tell you about this group of people is they are so in tune with finance, the finance world. And I'll use one good example. One morning I was just making follow-up calls and every single person I was getting said, can you call me back in 2 hours? And I'm thinking, what is What's this 2-hour thing? Finally I get this guy and he goes, you know what, the Fed Chairman's speaking right now. Can you call me back in 2 hours? And I realized all these people were watching the Fed Chairman.

Yeah, a normal consumer, they would tell you to call back in 2 hours because they're watching American Idol.

Right. These guys were all just sitting on the edge of their seats for what Greenspan had to say. But just a silly story like that helps you really understand that yes, we're in a recession and we all know that, but are they affected by it and have they pulled their heads into a shell?

No, not at all. Well, the story also makes a point that I emphasize with people is that— and I find a lot of people just do not do it— is if you do want to be effective at marketing and selling to a particular group, really whatever that group is, whether we're talking about an occupational group, chiropractors, dentists, lawn and garden people, restaurant owners, we're talking about the millionaire next door, we're talking about the ultra-affluent, you really need to read— to be where they are. So you need to kind of get a grip on what they read and who they pay attention to and where they go and what their water cooler and cocktail party conversation is and start reading those same things and watching those same things and being able to have those conversations even if you are not yet in that same economic league.

Would you agree? Yeah, I mean, and again, you know, the Wall Street Journal, I never walked in one CEO's office that didn't have the Wall Street Journal sitting there. They all read the Wall Street Journal, and I'm not saying everybody has to go advertise in the Wall Street Journal. No, but read the Wall Street Journal. I mean, they're very— they're in tune with the financial markets. This group of people is very politically active regardless of which side of the spectrum they fall on. They're very involved in politics, and they're very involved in causes, and that's why I mentioned the charity thing before. All the wealthy people I knew, I mean, some of them had their own pet charities, you know, that they just started themselves because it was a passion, you know, of something, you know, and, you know, once they became wealthy, they just started this charity. So if you have a particular individual that you want to target, go research him. You know, go find out all about, you know, whoever it might be and you're going to find a charity somewhere.

Yeah, I'm amazed at the salespeople who don't do research on individual prospects that they are going to make presentations to or that are within a group that they are target marketing, especially since it's gotten so easy to do it. I mean, it used to be you had to go to the library.

Right. I mean, now you can just type somebody's name into Google and you, you know, you should be able to find out something about them.

Let me get to one last topic before we give people an opportunity to get at you with their specific questions and their own businesses. Let's talk a little bit about— of referrals, how this group or groups differ from others in the willingness to provide them, whether they can be incentivized, and of course it's my belief that they are, if anything, more multipliable because the more fluent you are, the more you tend to to look for peer recommendations, and since they're more valuable, one referral from one of these is like 10 referrals from everybody else. Exactly. What's your experience with the whole referral issue?

Well, I mean, I can tell you by the time I was in my territory about 18 months, I got 50% of my business from referrals. And how I kind of built up this network I mean, and I— like when I first took over my sales territory, I contacted all— I mean, I only had like 60, 50 or 60 owners, you know. I wasn't dealing with a huge customer base. You know, so I contacted all of them individually and I sent them a letter and made my introduction. And I tried to talk to all of them personally. And what I can tell you is, you know, The people that I found who ended up being my best referral sources were the people who I solved problems for. So, for instance, you know, one particular gentleman, you know, something was always wrong in his catering order, you know, for all the catering that goes on the plane. Well, I got that fixed for him, and within like a month, he gave me a referral. It's— I guess you would just call it the law of reciprocation. Once some people felt that I had done something for them, they were then willing to give me a referral. The other thing that I would tell you is if you're, you know, saying to yourself, well, gee, how would I develop a referral program? You know, maybe I already have, you know, a base of affluent customers, you know, and I'd like to get more referrals, but I don't really know how or what kind of program to develop. You know, what I always say is, go talk to your owners, go talk to your clients, and just say to them, you know, we're thinking of putting together a kind of a thank you referral program for our clients who refer other people. If we were to do something like that, what might be something you'd like to get? Because too many companies, you know, develop a referral program based on what they want to give, and what they want to give is not necessarily what the client wants to get. So the most powerful referral program referral program can be developed with an incentive that, you know, the clients actually say, well, gee, if you were to do this, these would be the kinds of things I'd like to have.

By the way, the great marketing formula in general is— is the template is if we were to do X, what would you like us to put in X? And whether that's creating a seminar or creating a referral program or creating a new service, And then you get to go back to everybody and say, here, we built what you wanted. Now you're sort of obligated to participate in it. Exactly. Yeah, it's a great template.

And the thing that you'll find is, you know, I mean, and I would always have people, you know, come up with, you know, well, this wasn't on your list and I'd really like to have this. So I'd say, well, fine, let me go run it by management and see what they say. And they always said yes because, I mean, and this is an outrageous number to most people, but when I started selling jets in 1999, Every owner that we got cost us $75,000. So, you know, if I got it— you know, once you got your referral engine going, that $75,000 came down an awful lot. So if we gave an owner something worth $15,000 for the referral, that was still a big win-win.

I've always said, and I talk with people about this in terms of price all the time, I'd rather be selling at premium prices and premium margins so I can afford the highest cost per sale, not trying to have the lowest cost per sale. Then within that framework, to stimulate and reward referrals, you can also spend a lot of money.

Exactly. You can do something good. We found that the owners— I mean, again, I got so much of my business through referrals that I didn't have to do a lot of my own marketing in my territory. You know, the company was doing their own, you know, the marketing on a national basis, but, you know, the referrals do two things. First of all, you know your owner is pretty satisfied with your product if he's giving you a referral, because nobody is referring people when they're unhappy. So if you've got owners giving referrals, you know that they're satisfied customers. And secondly, the person who is the referee, we'll call them, they've already gotten that peer recommendation based on, you know, their friend Joe at the country club saying, why don't you call Susan Adams? I mean, just as kind of an— I mean, Ron Howard called me one day, the producer. You know, Opie, the— Yeah, we've met, yeah. And he was a— his neighbor in Greenwich, Connecticut gave him my card. And he just called me up one day.

Yeah, and by the way, you would— not that you couldn't, but it would not be easy to get to him cold.

I— yeah, I mean, we could certainly have found him via zip codes, but, you know, I mean, he was just, you know, over at his neighbor's house. They were talking about jets, and this guy said, well, I belong to this program. Let me get my rep's name. Give her a call. She's, you know, she'll help you out.

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 minimum time. This free gift comes with almost 20,000 $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.