Michael Phelps won the 2008 Olympic butterfly by a hundredth of a second, but only he's remembered. A New Jersey security company dressed guards in suits and sunglasses like CIA agents, made them unforgettable, and raised rates by $6 an hour. Differentiation isn't about being best in absolute terms, it's about dominating how customers see your market.
You guys remember the Beijing Olympics with Michael Phelps? He was going for the seventh gold medal. Mark Spitz was the only other racer up to that point to win seven medals. So if he got a gold in this event, he would win. And this was the event where he won by hitting the wall as hard as he could. And the other guy was gliding in and Mike Phelps won. Won by 1/100th of a second. Do you remember that race? Number one gets everything. Number two, we don't even remember his name. Mill Rod Servak. By the way, I interviewed him. The best in the world. If you're not the best in the world, you're number two. Which means you're a loser, right? All the winnings go to the number one guy. Number two gets the scraps and number three, and everyone else gets the bone and throws even a bone left. There's nothing that goes to the losers. You gotta be first or you're done. At least that's what I thought. My son Jake was 7 years old at the time. I went to Jake, I said, this is horrible. It's over for everybody else. I said, jake, you just witnessed the best in the world. And it's amazing what you can learn from 7 year olds. Because my son Jake looks up at me, he goes, he's not the best in the world. World. He goes, jimmy Mickledork is. I'm like, who's Jimmy Mickledork? He's like, he's the guy at the lake. He can swim the entire lake. He's the best in the world, dad. I'm like, seven year old Jimmy Mickledork. He's a kindergartener and he can swim the lake. I said, if Michael Phelps came to that lake, he would kick dork's ass. Which you shouldn't say to the 7 year old with your wife there, because she was pissed when I said that. And then Jake said the most profound thing he ever could have said to me. He looks at me and goes, michael Phelps has never been to our lake, dad. The best isn't the best in the world. It's the best in the consumer's vision of the world. The lake. Are you the biggest fish in what the consumers see as the lake? I got a call from a security company, the company that provides security guard. The problem with a security guard is they're very unnoticeable. You go to New York City building, you don't see the person in their blue suit just sitting there. You don't acknowledge them, they don't acknowledge you. And the problem if you own a security company is significant. The bill rate for security guard is about 14 bucks an hour, maybe 15 bucks an hour. Those guys get paid 10 bucks an hour, and then you have the cost, the cogs above that, of overhead insurance and so forth. Some of these insurance companies literally make a dollar an hour per guy. So how you win in the security business is more guys. If you can get a thousand guys out there, now you're making 1,000 bucks an hour. Well, this small security company in New Jersey called, and they were providing services in Manhattan. They had 100 security guards, and they were getting squeezed on the price, too. So what you do when you want to be the estimate, first you have to observe what you're doing. So I went to the building that they had one of their guards in just to watch how it worked. And what would happen is if someone walked in, a new person going to their office would walk in. You had to take a turn to get to the elevators. And that's where the security guard was. And I was hiding behind, like, this bush, which is very awkward. So I'm sitting there behind this bush, which freaked out people in the first place. Lesson one. So I'm sitting there, and the first guy comes in. His name was Joe Spano. Hey, Joey Spano. Joey, how you doing? And then there was this really elderly woman, too, just come in. It must have taken her an hour to get to the elevators. Unnoticeable. And we sat back and we said, what can we do to be the s the biggest fish in our little lake in this building? Well, there's a behavioral thing, and there's a behavioral tendency we all have. It's hardwired into us from caveman days that when something unexpected happens, we catch it. You know, as we're sitting here right now, we're all kind of looking some making notes, maybe a few people texting. It's kind of expected. It's noise. But if someone walks in that side door, all of our heads automatically turn. We actually can't even prevent ourselves from turning because it's unexpected. So knowing that, behaviorally, we said, we're going to change things in the security company, we took that guy. His name was Frank. We took him out of his blue uniform and put him in a suit. We get him a briefcase, we. We get him sunglasses, and we got him one of those little ear doohickey things. And we said, just sit there. This is true. It was freaking hysterical because it was around the corner when people came. I wanted Frank to be on his Ear doohickey going, mm, uh huh. Mm hm. Like, you know, like being CIA, ish. But he couldn't see him coming. So we had this app on iPhone where you shake the app like the phone and it'll shake his phone in his pocket. And I was sitting behind the bush in the corner like this and I was just gonna shake the phone, right? Which I'll tell you, as people come in and you're shaking a phone like this, it's not. Tony comes in, he's like, hey, how you doing? Right? And so I start shaking the phone. So I'm sitting there shaking and Frank doesn't feel it in his pocket. So then I start saying, touch yourself, touch yourself like this. Which never do that. Tony comes around the corner, Frank touches his ear, and Tony goes, I gotta go, I gotta go. And puts his phone down and runs into the elevator. More miraculous, this elderly woman, she comes around the corner, she sees it, becomes like an Olympic hurdler. She dives over, runs into the elevator and goes up. And we all know what was going on upstairs. The talk around the water cooler, it's like the CIA here is Obama visiting. This building started becoming the talk of the town. Occupancy rates, as you know, this was quite a while back, 2008. Ish. Horrible. This building was experiencing 50% occupancy rate, which Michael, you can speak to, is bad. Yeah, very bad. This building. Over the next six months, we did this for a six month beta, started getting more occupants. After six months, the building management called the security company and said, hey, we got something going on here. We know what you guys are doing. You're packing the building because you're dressed like the CIA. You have become our best marketing piece. What do we have to pay to keep this going? And we moved our rates up about six bucks an hour just by dressing differently. That's how you become the est. No one cares. We're a security company. No one cares about accounting or jewelry or anything. What we care about is that little thing that makes the difference because it catches our attention. How can you be radically different so people turn their head and look at you?
