Nov 8, 2019
This is a special day because we have the chance to sit down with a very special guest. He is the marketing mentor to Wilson Cole, president of AER and co-founder of staffing and recruiting solutions. Who is this mystery guest? He was named by Success magazine as “the greatest marketing expert alive”, been featured in Entrepreneur and Forbes, and has consulted with some of the top people in our industry including Brian Tracey, Anthony Robbins, and Mark Victor Hanson; yes, today we are lucky to be interviewing Jay Abraham.
Since he is such a wealth of knowledge, we want to jump in with our questions.
Cole: Can you explain the difference between a strategic approach and a tactical approach to marketing?
Abraham: First, we need to realize that 98% of all small to medium businesses are tactical. This means they do not have a large overriding master business game plan that is building, evolving, and multiplying in place. Tactical plans are more erratic, episodic, and focused on monthly goals. A strategic plan is masterful in that it has an end in mind. They do not do anything that does not benefit the long-term outcome; this kind of plan requires a well-reasoned outcome and discipline to put into place only revenue generating activities.
Another thing to understand is that almost no business reaches their goal because they do not have a goal. Either that, or they create a goal that is below their means or too high above it; a business needs to figure out a goal that is achievable and employ a reverse engineering strategy. There is one question that a business should always be asking: what is the whole purpose of this business?
Tactics are nothing more than the elements that advance, enhance, and drive the achievement of the strategy. Strategy is having a full plan and tactics are pieces that tie into a greater picture. Without a master game plan, everything you do is tactical and produces a fraction of the effect because nothing is integrated or pushing towards a greater outcome. Companies that outperform their competitors are more strategic so they can get more leverage and yield out of their time and their employees’ time.
Cole: Can you explain risk reversal and why that is such a powerful sales and marketing tool?
Abraham: Anytime two parties come together for a transaction, one side is always asking the other to take on all, most, or more than all of the burden. We try to figure out the direct and indirect elements of risk, uncertainty, skepticism, or fear that goes with doing a transaction so that we can systematically eliminate or overcome that risk; that is risk reversal.
When you employ this tactic, you need to identify what are two or three of those big risks. Once you know what they are, you can create methods to eliminate those risks such as giving the client some security on their investment for taking the risk or removing part of the risk up front. So, what is the big area of resistance, fear, uncertainty, or danger in the mind of the prospective client? You need to make your business irresistible by reducing that risk factor. Every time you take on risk reversal, it has a subliminal way of catapulting the performance you are providing and takes your service to the next level. The contrast is in your favor because of the psychological phenomenon of being stuck with a service, good or bad, by other companies while you offer protection from the risk. Essentially, if you do what no one else in the industry will do and you perform well, then you will be viewed favorably.
After collecting case studies, it was determined that 25% of those spectacular, crazy increased, overnight success stories with that were reported by people Abraham trained were all attributed to changing risk reversal. Surprisingly, very few people in small to medium size businesses understand the impact this could have on their companies.
Cole: With our magazine, we went from a startup to being completely sold out in a period of three months, along with a fast-growing subscription base, from risk reversal.
Abraham: If you are producing a good product, then people will be satisfied; but, if you also show respect and provide security to you clients, then you will really stand out. When you understand and harness risk reversal, you need to know that is will produce a small number of “refunds or unwinds” but keep your eye on the ball. If the tactic doubles or triples the profitability of your service, number of people who say yes, or repeat transactions, the occasional one or two refunds is inconsequential.
Cole: Can you tell us the difference between endorsements and testimonials? How would you get either from your clients? And, how would you present them to others?
Abraham: There is not a simple answer to these questions and realistically we could spend a day or two really going into the fine details. A testimonial is a first-person confirmation or explanation of how a client benefitted from your service; an endorsement is when a key influencer, and this could be a person, a company, or a publication, puts the full force of their name, credibility, and reputation behind their support for your company.
For example, we started selling webinars at approximately double the price of our competitors. In order to market these webinars, we used a strategy modeled after the Panama Canal. Each step forward meant going through a lock and working our way up to the next one; meaning, we had built years of trust and respect from organizations and clients who would endorse us to future clients. There are many reasons for others to endorse a business: financial gain, benefits for their clients, a quid pro quo exchange of services, etc. This is all a very strategic and scientific process as you are finding a way to promote your business through tying it to someone else’s affinity, goodwill, influence, or connection to a market.
Cole: The next question was partially answered above, so can you explain what is host benefit relationship of joint ventures? The host benefit seems to be going to other companies with a joint venture to their clients that promotes their business as well as yours; essentially, an endorsement is a way of doing this.
Abraham: Whenever starting a joint venture with another company, it is important to look at the maximum number of ways to ethically utilize the relationship of an organization. The first step is to identify everything that would attract clients. For example, we once approached 100 clients and were able to persuade 30 to endorse us. There were a few major ways to do this: recommend us as an expert in our field to their subscribers/clients, we created content to be periodically put in their newsletters, and we invited people to come to their geographic areas to attend a seminar hosted by their company. These endorsements can be a very lucrative way to increase business, but there are a lot of nuances and careful tactics that have to be made in order to reap the full benefits. Once we partnered with those companies and employed the endorsement strategies, they were able to double or triple their profitability along with their size.
Of course, these are only small tidbits of information. We could easily spend a day or two on each of them, but for now I can give you a global understanding of the topics and I will go into further detail when I speak at an upcoming AER event.
Cole: One of my favorite quotes by you is, “I cannot tell someone how to get 100 clients, but I can tell you 100 ways to get one client,” and the way you tied this into your famous marketing Parthenon. Can you explain this concept and give a general overview of that power Parthenon?
Abraham: I have spent my life looking at the highest upside leverage activities to any business and how to make slight modifications. In essence, I am an ethical opportunist which means that I do not believe in spending nine hours on something when the exact same result could be accomplished in 90 minutes. It is important to carefully reach out and examine all other options then identify which of those are the most powerful and universal. Most businesses are tactical and build everything on one basic revenue generating account or client building activity. This is what has been coined the diving board theory. Try to envision an old country diving board that someone took a fallen tree and pushed the trunk over the edge of the lake; the diving board represents the revenue being generated and the stump is the one approach driving all of that business.
The real danger comes if the one approach stops working or is replicated by one of your competitors which leaves you screwed. An example is if a whole business was built on two salespeople, not including yourself, and they get tired of working for you and leave. Maybe they go across the street and open their own business, or a competitor realizes how important they are to your success and hires them; either way, what do you do? We try to guide every business to stop depending on one approach. This is where the power Parthenon comes in!
The power Parthenon is built from multiple pillars that reach segments of the market from many different vantage points. Let’s break it down. Many companies get a significant part of their business from word of mouth or referrals. Now, how many of those companies also implement one formalized systematic disciplined ongoing 24/7 referral generating strategy? None. Or, even if they have one, what about two? Three? After analyzing every element in the business building picture, we have found 93 unduplicated ways to generate more. So, to build the client’s Parthenon they can use direct selling, telemarketing, direct mail, seminars, teleconferences, gifting, education, endorsements, etc. Each of those is represented by a pillar reaching to the market, or a segment of it, from a different impact or vantage point. If each additional pillar/strategy only added 10%-20%, the combined effect is exponential!
Adding new revenue or impact pillars, is one of the easiest, safest, and most powerful ways to help a business. Plus, all of those strategies can be used in multiple ways. Take direct mail. There are at least 25 different ways to use direct mail to benefit your business: generate leads, set appointments, confirm appointments, sell to people who do not like phone calls, recruiting prospective candidates, invites to events, follow up, etc. Yet, almost no one uses their pillars to the fullest extent.
Cole: Being familiar with your power Parthenon, I had always looked at it as amplification in the best case. There is always the chance that the laws or economy can change our ability to market in different capacities. So, the power Parthenon at its best is amplification for a business, but even at its worst it is marketing diversification. Just as you would not want to
keep all of your investments in the same stock in the case of a downturn in the market, the same can be said for marketing strategies.
Abraham: I can say with certainty that almost any business owner will work harder for their business to keep being more profitable, but can they figure out how to make a business work harder for them? Most of your clients have a lot of leverage in that one transaction will cost the same as ten transactions. The key is to figure out those tactics that will get maximum yield from each opportunity. Once they identify all of the opportunities, they can become leverage machines and get a lot more clients/revenue/sales from the same fixed staff and work. That is my job: to show them how to get a business to work harder for them.
Cole: Over your 30+ years of experience which has led to you being a marketing guru and golden standard within our industry, what one personal belief would you credit to your professional success?
Abraham: I would say that it has been my unique understanding of what is possible. I came in constantly examining how many more powerful/profitable/impactful ways were available and how much more could be gained. I also have always felt that it was my job to find deserving companies who made their clients’ life or situation better through their services, and that it would be a disservice to not help them.
Additionally, I consider myself an advocate for a market that deserved to be served better by companies that cared more about it. Most people go into business for the wrong reasons; some do it for money, power, or the illusion of success, but I fell in love with serving clients and the people they served. This has been a powerful and preemptive difference in viewpoint and business that drove my work and ability to serve my clients.
We would like to thank Jay Abraham for sitting down with us and answering our questions. If you would like to learn more about Jay Abraham and his marketing wisdom, then email Eric at email@example.com to receive details on a special offer for recruiting and staffing solutions.
Quote 1: There is one question that a business should always be asking: what is the whole purpose of this business?
Quote 2: If you are producing a good product, then people will be satisfied; but, if you also show respect and provide security to you clients, then you will really stand out.