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In 1995, at the age of 17, Bob Yeager was recruited from a local college to interview at a telemarketing firm called Dial America. Within two hours of the initial job orientation and with no formal sales experience, Bob was asked to head up training of over 30 sales teams across the country in his unique approach to selling.
Recognized as a formidable sales trainer and professional, the famed Billy Mays began to train Bob in the art of the pitch and trade show events.
In 1998, Bob began to travel across the U.S. selling tickets to sold out Jim Rohn events with nothing but his car and $500 in his pocket. He returned with over $380,000 in commissions in his bank account.
Then, at the ripe age of 20, a $24 billion a year Robotics Firm asked Bob to help land a deal with the U.S. Navy building specialized computer manufacturing machines. The contract Bob landed yielded Aerotech Inc. an $18 million contract, paid up front, with future million dollar contracts pouring in from government agencies for the next 3 years.
Throughout all this success, little did any of the professionals Bob was working with know, but Bob had been battling a, then; 4 year battle with what was thought to be, terminal cancer that spanned another 4 years thereafter.
Through great odds, this young sales man who actually began selling from stage when he was only 12 years old, beat this “not so terminal” bout with cancer and found himself without a dime left after the hefty medical expenses and travel costs associated with overcoming this harsh and deadly disease.
In 2003, Bob was asked to write a politically stirring campaign to help raise capital for orphanages around Pennsylvania. The company Bob was doing this for was the acclaimed Hillman Foundation.
Shortly thereafter, Bob went on to work with the NFL’s Pittsburgh Steelers, the MLB’s Pittsburgh Pirates and NHL’s Pittsburgh Penguin’s on many, if not most, of their charitable drives’ marketing campaigns.
In 2006, Bob turned his attention to the Internet where he helped Zacks Investment Management recruit high dollar portfolio clients into their accounts, Assisted in launching the $75 million in affiliate sales Delfin Knowledge System and created a private community of over 500 entrepreneurs within his World Entrepreneur Success Training Program (WEST) where he worked with and helped to take people from start up to success for the next 5 years.
In 2011, Bob turned his attention back to his roots and developed the Socratic Business System, Covert Sales System, Covert NLP and many other white label training programs for hundreds of companies around the world.
Today, although an acclaimed business and marketing strategist, sales trainer and Executive Performance and Choice Management coach…
…Bob spends a majority of his time with his wife and kids, working from his home office and doing what he loves to do most, working with a select handful of clients and building classic trucks, cars and tractors in his home shop.
If Bob isn’t working on your or his clients’ campaigns, you can find him in his garage with his kids, wrenching on their next project.
Bob has also been a practitioner and world competitor in the martial arts beginning at the early age of only 3 years old. Within this profession, at the age of 12, Bob was selling $10K meditation training programs to rooms filled with nearly 3000 martial arts masters around the world.
NOTE: He’s also a typical redneck and accepts the label kindly.
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Brian Basilico: Hey, everybody. I am super pumped. I've got an awesome guest. His name is Bob Yeager from Selling Labs and today what we're going to talk about is what he considers to be the way to look at your business, and I think coming up in the new year, we're just about on the brink of another new year, his philosophy is going from accidental profits to on-purpose profits. That's what we're going to be talking about today. So Bob, how are you doing, man?
Bob Yeager: I'm doing all right. How about yourself, buddy?
Brian: I'm living the dream, baby, living the dream. The first thing I like to do is let people know a little bit about Bob Yeager. Where did you start? How did you go from being a 12-year-old martial artist on stage selling stuff to where you're at today?
Bob: None of it was accidental, how about that?
Brian: Love it.
Bob: When I started out as a kid, I was competing in worldwide martial arts tournaments and I created meditation programs that we'd sell from stage. When I was 12, the sponsors are like, “You should really get up there and sell this stuff.” I did and it was very successful. As I go onto my teenage years, I wanted to start my own landscape in [inaudible]. That was kind of a family thing and I started off doing really big contracts. Luckily I had my dad to support me on that. He wasn't a wealthy guy and he wasn't really knowledgeable about business, but he knew landscaping.
I had this nice support circle around all that and then as I was going to college – I was going to high school and college at the same time. I started with the Art Institute, then I went to Pitt for engineering and [inaudible], but I went to the Art Institute for advertising and I was 17 and that's when I met Billy Mays. Billy knew that I was working with Dial America as a part-time telemarketer and trainer and he asked me if I could start writing copy for him. So I started writing copy for Billy and through that I met Jim Rohn, and I started selling tickets to their events. So I piggybacked through engineering, and sales and marketing from the time I was 12 all the way up till I was 30-years-old.
Brian: Let me ask you one quick question, man, because I don't think everybody knows who Billy Mays is, just by his name. Why don't you let people know who Billy Mays is because he's one of my faves.
Bob: Billy Mays was the host of PitchMen, but before that, he did a lot of the as seen on TV commercials for the products like OxiClean and things like that. He was the guy with a beard and a blue shirt. He's really loud all the time, but Billy, he was a force in the sales industry well before there was a television show with him on it.
Bob: And well beyond the time he passed away a few years back. But Billy, he came from Pittsburgh and later on he moved his whole company to Florida. But he was this guy that he was just always around. In Pittsburgh there was a circle of sales guys that hang out in Pittsburgh strip district and they literally sit there and pitch to each other in the mornings and stuff. They're from all different companies and they all hang out with each other. Billy was always there and he'd sit quietly in the corner, but every once in a while he'd hear a pitch, he'd step up and say, “Hey, run that by me again.” He won't let that guy leave until that guy can nail that pitch.
And he didn't charge any money for that and I just love that. There was many times me and Billy were competing on getting a client and we always ended up working together on it. If you didn't know Billy Mays, look for the re-runs of PitchMen with him and [Anthony] Sullivan. They're just fantastic at what they did. Both of them have checkered past which I think a lot of sales guys did. They're all bunch of hustlers anyway. Right? But Billy created this, “This is how you pitch and demonstrate a product.” He was the guy that created that and I don't think there was another like him before him besides like P.T. Barnum. There's this big production all the time when you're pitching a product and it's big. Really practice the demonstration and laying that product out. I think today with the online marketing people lose that because of digital products and things like that. They think they can't really demonstrate well.
Billy put a character into the demonstration and he really saw what the consumer was feeling before they bought that product, “I feel this right now, but if I had the solution, I'm going to feel like this” and he knew that and he put that into every presentation he did.
Brian: Just amazing. I've studied his stuff and read a bunch of articles, I'm seeing PitchMen and that in its essence is just incredible. The fact that you worked with him and did so much.
So let's talk about this concept of accidental profits to on-purpose profits. What do you mean by that?
Bob: That started when I was about 18. Right around the time I started selling back in 1996, every time I went into a business, I ask them what their profit was and they had kind of the same numbers, but it would fluctuate all across the board from month to month. And I'd ask them, “What's your current marketing strategy or advertising strategy?” And it was usually the same thing. People, basically when they find something, they stick with it. It wasn't so much that they're advertising or the marketing efforts gave that same result all the time. It was just it worked good enough so they kept doing it.
So one month they'd have a few thousand dollars come in, another month they'd have a few hundred thousand dollars come in. To me, that's not an on-purpose profit-type of thing. You've got something that was working, you put it up there, it's running, but you're just letting it do its thing. Right? Accidentally, you're coming across these big hits. Well, what I always try to do is find out what exactly is causing those big hits, those particular big hits and how can we duplicate that across the board month for month, quarter to quarter, year for year? Right?
But today with internet marketers especially, they put something out there and it may or may not work. I don't know about you, but when I put something out there, I want it to work. That's that. There's many times that I will be testing for a year or two before I even do a product launch because I want to know when I put the effort in to do in that product launch – which is a very expensive endeavor to do – I want to know that it works. It's not going to be on accident, everything is on purpose, every step of the process, everything that somebody does or works on is all on purpose. It's not like, “Hey, I got this great idea. Why don't we…” “No, stick to the plan, because it has been tested for the past two years. Stick to the plan.”
Today, a lot of people, they see the next guy selling high ticket, they see this guy selling big ticket, then they see this guy over here selling low ticket that lead into big ticket, and they're putting all these stuff together that seems very random. It's because even if they have a strategy in place that they've written, it is very random because they can't see all the pieces of that other guy's campaign that they're trying to duplicate. The only way you can see every piece is literally to be behind the scenes of that guy's company and see how they put every single piece together – from new market, to making the sale and beyond. You have to be part of that process. There's people like me, Lee Collins and yourself, we see all these stuff because we worked on all these stuff. Right?
Well today, what you have happening time and time again is people say, “I'm going to try this Facebook advertising. I'm going to put this thing out here. Today it didn't make anything, but next month it [would].” They're like, “Okay, that worked.” No wait, that might have been an accident. It just happened to work that day just because of Facebook's algorithm or something. All you have to do is do it over, and over, and over again. The way you start making profit on-purpose is not by – Chet Holmes said it best, but Bruce Lee has said it, “It's not by doing 10,000 things. It's about doing one thing, five things, 10,000 times.” That's when you start getting profit on-purpose. Right?
Brian: Right. So let's talk form a small business standpoint. Internet marketing is one piece and we know we've got lots of tools and measurements and things that we can do. But let's say you've got a small independent retailer that's sitting out in the middle of Nebraska. How do they find that purpose? What kind of things should they be looking at that would give them the purpose to continue to do those kind of things? More importantly, what should they be measuring?
Bob: I'll give you an answer that they'll and I'll give you an answer they're going to hate.
Bob: I'll start with the answer they're going to hate. Even in my business, I don't do all my marketing myself. I hire outside help, I hire consultants, I hire coaches, I hire analysts, I've even hired college professors to look over my stuff. It's because I need an objective set of eyes to look at what I have, my business and what I'm creating. When it comes down to even my financial papers and books, I hire somebody that's better at that stuff than me. Most small businesses are trying to save so much money they don't realize that if they invested money into themselves by hiring an outside person who's qualified, they're going to get better results from the things that they do.
With that said, people need to start looking at how people consume their products, how people find out about their types of businesses and where those people are reading, looking, watching, listening about that stuff. That takes research and there's plenty of resources out there. You just look up “market research” on this industry and stuff. You'll find plenty of resources on everything. But how do you start that and say, “Okay, well, I found out where people are looking at the stuff, and how they're buying the stuff, and what they're willing to pay, and what kind of businesses they buy it from, and how they like it delivered. I found all this out. Now what do I do?”
Now you find out how the best competitors that you have – I'm talking the biggest competitors that you have, the big box stores, things like that. How are they marketing to these people? Because think about this now. Those companies, let's say like Target, Walmart, all these big box stores, they spend tens of millions, if not, billions of dollars on advertising. True? And they're going to run that ad over, and over, and over again and honestly, if you're seeing that ad run for weeks or months on end, it's probably because it worked and then you'll start seeing variations of it, then there's that one that just keeps on running all the time.
They just did tens of millions of dollars of marketing testing on exactly how your audience likes to receive a message. If you can duplicate that on the smallest scale, would you be happy with 5% of that audience coming to you?
Brian: Hell, yes.
Bob: Yes and it's easier for us because where bigger businesses have to advertise and market nationally, internationally, globally, we only have to market to a small space. They're not putting all their marketing effort into that small space, they're putting their marketing effort into a national or international broadcast. I figured this out by accident. I was about 19-years-old, I was advertising this engineering thing that we were doing. It was like a trade show event and I said, “Why don't we advertise on cable television?” And it was for big business owners and things like that. The owner of this company was like, “No, it could cost us a fortune.” I found out through Comcast, to advertise locally at say like 2:00 am during one of their business on CNBC or something like that, one of their rebroadcast of the previous show that they showed earlier in the night, it cost $3,500 a month, dude.
Bob: It's nothing. Right? We were sending people teleclass' space. They call on the phone, they listen to a message and schedule for a teleclass to listen to and then we sell tickets to this event. Well, we didn't have a big enough teleclass line to handle the amount of traffic we got from that one ad that showed twice a week for a month that cost us $3,500. The event cost $10,000 to come to. It was sold out with the waiting list. The way I figured this out was I saw a bigger brand, a bigger engineering company, they were on all of the investment shows, during the prime time hours they were advertising and I'm like, “But they're not advertising at 2:00 am when these business owners are awake and stressing out about their companies not making enough money and stuff.”
“So what if I was advertising then? It's cheaper. Sure I'm not going to see much of an audience, but I'm going to see that prime audience that I'm looking for and it's just a percentage of the audience. The bigger, multi-billion dollar brand aren't tackling that audience. They're not getting that chunk.” That's what I started doing with local businesses. Even in Pittsburgh I said, “Look, you don't have to go after the nation, or the country, or the international population. You only have to go after the Pittsburgh market and surrounding areas and these great big giant multi-national brands are not marketing heavily to that one specific area. Do what they do, but scale it down to just this one area.”
Look, even SEO works like that. You do local SEO, where are you going to find local listings for most businesses? Because you typed in the name of the city, or a township, or a burrow, or whatever. If you're looking for a plumber, you're not just going to type “best plumbers.” No. You're going to type “top 10 plumbers in the Pittsburgh area” or the tri-state area or whatever it may be. So the more you niche that down, if I say “tri-state,” that's three states. If I say “Pittsburgh,” that's just one city. If I say “greater Pittsburgh area,” that's around the city, but if I say “Cranberry Township,” now it's very, very targeted. How much are those ads going to cost me for that very, very targeted listing? Not much at all. And I'm going to get enough business as a small business owner where it comes in nice and steady, I can scale it up through more ad reach or whatever, more promotion, but I can also scale it back if I'm getting too many customers which I think is one of the biggest problems with local businesses – they get too many customers and they can't fulfill the demand which leads to shotty service.
When I look at that, now I'm saying, “Okay, there's the very costly expense of doing business.” It's the most expensive part, it's marketing your business in getting new leads, new prospects, new customers. That's how we do profit on-purpose. So let's set that to aside right now and say, “How can I add a zero to my sales?” For the month, tomorrow – that's what everybody really wants to know. Right?
Brian: Hell, yes.
Bob: It's inexpensive, it's the easiest approach and you'll get better results than any other method. You still have to do the marketing, lead generation, getting new clients, but that's a very big expense. Let's set that aside. That's something we do as evergreen strategy, we're always bringing in new leads, new prospects, qualify new sales. We know that we need to do that. Let's set that aside. Let's talk about adding the zero to your monthly revenue starting tomorrow – past customer reactivation and current customer upsales. That's where it's at.
Brian: I love it. Absolutely.
Bob: That's the quickest, easiest method to make more money immediately. Right now, not waiting until next quarter, not waiting till Black Friday – immediately. This is the biggest insight I can give any local retailer or local business. If you know the Black Friday is the most profitable selling day of the year, would you like to know how to be able to take that day off, not even care about it and make the money you would have made on Black Friday three months before?
Brian: Oh, hell, yes.
Bob: All you have to do is activate past customers. For retail customers, you send them a letter just like Bob Sterling did. A lot of people have done this over the years. You mail them a letter, old school, just throw it in the mailbox, mail them a letter. You mail them a letter saying, “Hey, we loved working with you in the past on this project with this product. We'd love having new customer, whatever it may be, but we haven't heard from you for a while and we wondered if we've done something wrong. Here is my personal cellphone number or my personal office number. Give me a call and I will personally respond or Judy will respond to this.” Whoever you have allocated for that, “And let us know if we've done anything wrong or if you need any help with anything. In the mean time, we created this great free gift that we'd like to give you.” Put it on a password-protected download page on the internet, a nice report on how to reduce the amount of times you have to clean your septic tank. That's something homeowners would want to know.
So I put out this little report, it tells them A, B, C, how to do this and the username is their name and the password is “Bob's gift” or something. They go there, they log into that page, when they get to download that form, that PDF file, it says, “Hey, by the way, we want to do something really special for you. A lot of people wait one, two, three, five years to clean their septic tank. What if your septic tank could be treated each and every year and it's not going to cost you hundreds of thousands of dollars? No, for this monthly payment of $15, we're going to come out each month and make sure that your bacteria levels are appropriate, that the flow rate is appropriate and if we have to clean that septic tank or we have to flush those pipes in the course of that year, we'll do it on the house.”
$15 a month times 12 months is about the cost it cost to clean the septic tank, isn't it? Okay, if they find a problem where there's a broken pipe or anything like it – they're regularly looking at a customer's supply line. They're plumbing. And you say, “Hey, Jennifer, I noticed that you have a pipe leak in out back. Would you like me to fix that while I'm here?” “Well, what's that going to cost me, Bob?” “I'll tell you what, $30 and I'll get it done in the next 15 minutes.” That's very special offer but it's limited for a service-base business, it's limited to seven days. They have to respond within seven days. If you're selling a specific product, you do it at a 25% discount and you sell that, within the next 30 days they have to take you up on the offer.
But what they see is this business is reaching out saying, “Hey, if I've done anything wrong by you, please personally tell me because I want to get that taken care of.” Next is, “I want to give you something because you've been a customer and I love you.” Then finally it's, “Hey, I got this new service, this new product and I know you really love it so I'm going to give you a 25% discount, but you have to respond in this amount of time.” That letter, to no joke, I've seen 35%-500% increase in profit month after month just because of that one letter.
Bob: That's past customer reactivation.
Brian: That's incredible and a lot of people neglect that. A lot of people, always looking for the next bright shiny object, the brass ring and all these other stuff.
Now, with all of these stuff that you've been talking about, I know a lot of small business people fall prey to what I call the “marketing strategy dejure.” You get these sales people coming in, we all get those phone calls and people, they are saying, “We're going to make you number one on Google. We're going to get you and all to the search engines.” And all these other stuff and they just started throwing money at stuff that they have no concept of what's going to work. What are some of the biggest mistakes that you've seen people doing along those lines?
Bob: I used to own an SEO company, Web marketing management for years. Same thing I used to tell clients all the time like, “Look, don't call me because you think you need SEO. If you can't make business happen without the internet, then you're doing something wrong. Let's start there. Let's find out what you can do offline before you venture online.” I also tell them and you know I'm a big advocate of internet marketing, but I tell them, “Anything that you do online is up in the air until you do proper testings.” It's going to take 90 days to properly test something whether it be SEO, keyword research, pay-per-click advertising, banner placement – whatever it is you're doing, 90 days is a great amount of time for that person to properly test and offer, test the marketing campaign.
So don't think that, “I'm going to pay for this thing one time and it's magically going to send me traffic, magically going to get me leads, or magically going to make me sales.” You have to give it the proper amount of time to test. Now, since you have to do that, you have to be able to ask the consultant the proper questions and it's not about, “How many companies like mine have you worked with?” That doesn't matter. I've worked with 180 different companies across 140 different industries. Businesses in general aren't really different. They're looking for leads, they're looking for better clients and they're looking for more sales and more profit per sale per customer.
So knowing that, the same campaigns kind of span across multiple industries. If you're a small business owner and you're looking to invest and do your marketing, you want to know that somebody can answer each and every question. If somebody stumbles across a basic question like, “Where are we going to do our advertising and how much would that usually cost?” The proper answer is going to be, “It's going to cost depending upon how much it costs specifically target the leads you're looking for. In order for us to find that out, we have to test these types of campaigns in order to target those right people.” Many times we can research to find that out beforehand, but you only find out for your particular business if you invest some advertising dollars to test because it can be different from business to business.
I think that scares business owners because that's basically saying, “Give me a bunch of money and you may or may not get it back.” Right? That's scary to a lot of people, so what I tell people to do, “Before you start venturing out for new marketing models or new advertising models to invest in, have a strategic project scoping up around a specific campaign that you want to run, a specific product that you want to sell or look at your business and say, ‘Do I actually have a business model written here that includes a marketing model and advertising model and a sales pipeline?' If I don't have all those things mapped out, we're guessing the whole way.” And what are we getting from that, Brian? Accidental profits, if any. When you have all those things mapped out, now you have a plan that's going to bring profits on-purpose.
That's where I start. I tell people, “Look for a business adviser who's really good at doing strategic project scopes, business models, marketing models, advertising models and putting that together, the proper sales pipeline. When you have that, now you have a road map to exactly where you need to go and you have contingency plans in case something doesn't work out along the way. Since about getting a plan written before you ever invest at advertising and things like that.” Does that make sense?
Brian: It's totally outstanding. Totally makes sense. Bob, herein lies the question I think that a lot of people are struggling with the strategic plan a little bit. They tend to react and that's a thing that you see. It's like say you're in the HVAC business right now, and everything is all about furnaces and things of that nature, and they're so focused on that, but they don't really know who their perfect customer is and maybe they're not doing the right analysis, maybe they haven't hired the right people.
What are some of your suggestions for people to be able to figure out who those avatars are? Not just the past customers, but the new ones if they're trying to get that new business?
Bob: Especially with service-based business as they start with yourself, start at home. You are your perfect customer. You're actually the customer you don't want most of the time because you're going to haggle the hell out of it because you know more about it than anybody else. If I would say like an HVAC guy, the first thing I'll think about is what are the things that I go through on a monthly basis to maintain my home, air conditioning, heating, whatever it may be? It might be cleaning the duct work, it might be changing fuses, it might be checking the wiring, whatever it may be – cleaning filters and that kind of thing.
If I know those things, the first thing I'm going to say is the proper way to market to my market is, “Hey, the colder season is coming up. We want to make sure that you got your furnace ready so you don't have to call me on Christmas eve when the heat won't kick on. So here's a few tips on keeping your furnace up-to-date.” Then people watch that video, or read that newsletter, or whatever it may be and say, “Hey, if you don't feel confident enough in yourself, let me come out, take a look at it and if it's not too big of a job, we can do that for $95, or a free consultation.” Or whatever it may be.
My thing is look at yourself as a customer, friends, people around you, or past customers that you already have and ask them and ask yourself, “What are the things that you face on a regular basis when it comes to getting this service provided, or needing this thing done?” Start warm, really warm, red hot with yourself and then branch out to friends, family and your local market that you've already serviced and just say, “Hey, I'm just trying to better-service people. I'm not selling you anything. Just want to know what you think about this.”
Brian, it's the old-school way of serving. Right?
Bob: Serving is the best way to start to figure out what your local market needs. Ask them questions, they'll give you honest feedback – trust me, they love giving feedback and you can leverage that feedback to create your marketing material and to develop the offers that you need to develop.
Brian: So within that, you mentioned to two different things which I'm a huge proponent of. Number one is content marketing. Creating good content that people are going to pay attention to that is really then focused and trying to just stay top of mind with them and make them realize that you're the best option for them; but the second thing with the surveys is man, we're so overloaded. Especially now with social media, with our cellphones, with email marketing campaigns and all these other crap, how do you stand above the crowd? How do you get people actually pay attention to any of that, or even want to spend the time to take a survey?
Bob: First it starts with realizing that content marketing doesn't mean always coming out with new stuff. That's where people fail. It becomes very expensive, very time-consuming because they're always trying to come up with something new, publish something new each week, each day, whatever it may be. That's not what content marketing is. Content marketing stems from creating an evergreen content strategy that you can multiply its efforts by sending ads or marketing directly to that particular content. If I put out a YouTube video, organically, it may or may not get views. But if I send ads to that particular YouTube video, there's a good chance it's going to get more views from a targeted market. So I didn't have to create a new video each and every single week, or each day, or anything like that.
If I saw that the ads are performing well on that video, I'm going to create another one similar to it, split-test the two with more advertising and see which one is performing the best. If that one or both are performing well, I'm going to keep sending ads to those things. So I might have that same video running for the next 10 years because it's an evergreen video and that's what your marketing and your content is supposed to be – evergreen. If I create this today, is it still going to be true, or is it still going to be relevant five, 10 years down the road?
There's a plumber in my area, it's called Terry's plumbing and he always wore this cape and called himself Super Terry. He's the nicest guy in the world. I thought he was this young dude and he came out to my house to service my house one day and he's like an old man, but he was running the same TV ad for 20 years because it worked. That's my way of thinking, if it's working, why are you trying to recreate it? Why are you trying to create new all the time? Production is expensive, having things created is expensive. Create an evergreen content strategy that you can use to form that content, and grow that, and sell those seeds as many times and you possibly can and that's not difficult to do.
If you're racking your brain of a new marketing angle, or a new way of delivering your product, or a new way of delivering that message over, and over, and over again, it becomes stressful and the same thing happens with every business owner, they'll stop doing it. It becomes too cluttered, too confusing and what starts happening is you don't know what's getting the best results because you have yourself spread so thin across so many different things. Start with pillar content that gets a good reach, that test well with advertising and either keep advertising that pillar content, or create more pillar content like that and the pillar content is the main structure of your overall marketing strategy.
Brian: So when you say advertising, there are so many different ways to advertise, too. Where do you find the right advertising methodologies? It could be Google Ads, it could be Facebook ads – we don't have newspapers anymore. It could be cable TV like you said and those kind of things. What kind of things do you look at as far as driving people to that content? What are some of your favorite strategies?
Bob: It depends on the business model, really. It can go from radio, to direct mail, to being on a morning talk show in your local area, to trade shows, to local business workshops and events, business cards, flyers – it keeps on going and going. Anyways, business cards and flyers don't work, they're idiots. They're just not doing it right or effectively. They do work for a lot of different businesses, but what I always say is I keep going back to find a small marketing firm in your area and say to them, “I'm really looking to expand my advertising, my reach on this marketing material that I created. I know a test well, I know it gets me great results, but I'd like to increase those results if possible. Would you be able to sit down with me and consult with me on what I need to do to better-advertise this stuff?”
I used to have a meat wholesale business. We sell gourmet steaks, kind of like Omaha steak, that kind of thing. I knew nothing at all about the market for selling steak. I just knew it was a profitable business and I bought it from somebody. So I looked at their current advertising methods that they've been doing for years in that business and I said, “Okay, how can I expand?” Really what I was looking to do was increase the lifetime value of each customer, not actually finding new customers. So I hired a marketing agency. They charged me $1,500 to basically sit down and look over everything, figure out the best marketing methods for me and then they offered to do it for me or I could do it and they gave me the strategy to do it myself. If they're doing it for me, it's going to cost more, if I'm doing it myself, it's going to cost me more time.
For me, I was struggling with cancer at the time. I didn't have the time to really do it myself or the energy, so I hired the marketing firm for $15,000 to do it for me because it was a small boutique marketing firm. They took m profits to a whole new level, I didn't even really realized the amount of demand there was going to be for my product. I always say, learn what marketing is, how it works and how the specific strategies you're planning to implement or you're been told to implement work, but don't try to be all for everything in your business. If it comes down to marketing and advertising and you're not skilled in those things, look for outside help. If you can't afford outside help, this is how you get to be able to afford it.
Take that past customer reactivation strategy I told you, do that, test that to small segments of your past customers over a few months. All of the money you make from that, all of the profit you make from that one thing once you compensate yourself for the cost of mailing and everything, you'd take all of that and you say the purpose of this revenue right here is to hire the right people to further market my business. I never pay for the marketing of my business, my customers do. I create campaigns specifically generate profits to pay for my advertising, my tools, my business, my insurance, my further marketing expenses – my customers pay for that. That's the way businesses just start looking at things. If I'm doing this campaign, this marketing objective, the profit that comes from that is allocated for this thing here to grow my business.
Brian: That is probably one of the most outstanding ideas I've ever heard.
Bob: My wife wanted a Land Rover for her birthday a couple of years ago, her 30th birthday, and I created a marketing campaign specifically to generate the revenue for the car. That money wasn't allowed to be used for anything else, but the car. There was about $1,000 leftover after I bought the car, so I used that to buy really good tires for the car.
Bob: That's the way I look at every profit center of my business. I say, “What is this for? Exactly, what is this for?” Don't lump all the money together. You might have a certain product sitting on the shelf in your store, maybe you're selling it for somebody else and you get a consignment percentage. You have to say to yourself, “Well, if I get 30% on that, what is that 30% for? Is that going to the overall bank? Is that for employee, bonuses or wages? Is that to hire a sales guy? What is that specifically for? What can I use that for, this unexpected new product that I'm going to sell? What can I leverage that revenue for that will help grow my business?” So you're never out of pocket for growing your business.
Brian: I love it. I absolutely love it. Okay, last question, power tips and I think this is really super important because a lot of people don't have the mindset that you just talked about and I have to be honest with you, including me, I've never really thought of it that way, but that's incredible. But what about the people that feel like they're living – and I hate to say it, but it's paycheck-to-paycheck even in the business. We know paycheck-to-paycheck as a person, but in business, it's like you're just getting enough money in so that you can pay the bills, and keep the doors open and stuff like that.
What is the one tip, or one strategy that you could give them that would absolutely change their mind to completely think about running their business differently?
Bob: Okay. Once again this is going to be an answer a lot of people hate.
Brian: Thank you.
Bob: But it's one of the best. I've been teaching people this for years. Overall you want financial freedom and you probably kind of desired or dreamed of, or design what that looks like to you. But it's going to look different than you think it does, okay? What you have to do first is figure out, “If I paid for all of my necessities, all of the things that keeps my life happy and healthy, how much do that cost per year?” Then I divide that by 12 so I know each month, this amount of revenue comes in. You can even whittle it down to day or a week if you want to, but I take t down to a month at a time.
So I'd say if I need to have at least $15,000 a month and it's probably going to be in some change, come in if I'm being honest with all my expenses, $15,000 in some change, each month this is financial freedom so pay attention – you need to first create a revenue stream even if you have to work a job while you're doing it. Hey, that's just part of the deal. Create a revenue stream that will allow you to put that amount of money in the bank each and every single month and have that amount of revenue coming in as well. You have one time your annual revenue in the bank and you have that revenue coming in. You're still not financially free. What you have to do next the following year is put that amount of money in the bank again on top of what you already put there each month and have that revenue stream coming in.
Brian: Hold on one sec because I want to get this clear, because this is a really key point. What you're saying, I need to make $15,000 a month to be solid. What you're telling me is I need to make $30,000 a month. I need to have $15,000 to live, but then $15,000 in the bank?
Bob: Net. Right?
Bob: Let's not play with the gross numbers. This is net.
Bob: Okay, yes. And people say, “How do I become financially free?” If you're living paycheck-to-paycheck, you have to get to double your profits fast. That's the first place. The double part of your profits goes into the bank. You don't touch it. You put it there, let it grow, invest it wisely, whatever you're going to do, but put it away. It has to be accessible and that's what I tell people all the time, make sure it's liquid so you can access it when you need to, but try your best not to touch that and you have two times that amount in the bank – two times your annual income in the bank and beyond that, you still consistently bring in the amount that you need each and every month.
Years ago I used to tell people if somebody has a million dollars, they do not spend the million dollars. Their lives usually cost them around $65,000 a year because when they invest that million dollars properly, it makes them about $65,000 a year, so they live off the dividends basically. So what we have to do to create financial freedom is have the revenue we need coming in on a regular basis, month-in and month-out an have XX, our annual income in the bank. Right there, you've just created the perfect safety net. Well now, you can experiment with different things in business and take bigger risks if you'd like.
But in order to get to this point, you have to make one solid definition and this is where a lot of people fall down or they lie to themselves. You have to define yourself, are you a business owner or are you an entrepreneur? Because they are two different things. An entrepreneur takes big risks, takes a lot of risks and have their hands in a lot of pots and can handle a lot of activities at once. Where business owner is pretty much centrally focused on one effort. So if you're a business owner, you have to say, “I should probably hire a financial adviser to help me invest this money properly.” If you're an entrepreneur, you have to say, “I have to be very careful not to take too many big risk with this money until I have that XX in the bank.” So you have to be a grown adult about it basically.
But that's financial freedom. Now if somebody is going to say, “Well, how do I double my sales to get to that point?” Start increasing the lifetime value of each one of your customers. It can be as simple as raising your prices by 4 1/2% across the board each year for the next three years. That is a big deal. People don't realize that 4 1/2% isn't that much. Do the math. If you're making $15,000 a month, Brian, multiply that by 4 1/2% compound in month-in and month-out, then do that over the course of three to five years. That's a big chunk of change right there. That money gets put away. You do things like past customer reactivation. You say, “This goes towards my XX.” You do a special promotion, a sale for the holiday season, whatever it may be, make sure that you're still making your regular sales – not extra promotion – it goes towards your XX.
What it really means is putting more effort and more focus on a dedicated plan that's going to produce results while increasing the lifetime value of each one of your customers. If somebody buys one product on a regular basis from you, ask yourself, “How can I sell that person more that they're going to love me for it?” If you're doing heating, and plumbing, and things, sell a service, a monthly servicebased package, continuity program to these folks so they don't have to worry about it when something big and dangerous happens in their home, it's being maintained on a regular basis whether monthly or quarterly. You can add on things for a package for people and they can cancel it anytime. That's why we have those continuity offers and cancel anytime and that kind of thing. Start to see, “How can I increase the lifetime value of each one of my customers, add a zero to my sales and increase my prices across the board by 4 1/2%?” The reason I use 4 1/2% is because most regular clients don't even see that percentage increase. It's just an understandable increase in business. That's what I would do.
Bob: It's not easy. Now listen, it's a simple solution, but simple does not mean easy. It takes discipline, dedication and hard work. Anybody that tells you any difference is lying to you. It takes hard work to maintain that, but it becomes a habit and habits become this thing that you just do a second nature. You need to spend at least 90 days very stringent each and every single day to make that happen because beyond 90 days is when the habit forms psychologically.
Brian: Bob, this has been outstanding. Just incredible information and man, you just knocked it out of the park. So I want to let my people know because this has been a power close to an hour at this point, if they want to learn more about you and your systems, how can they learn more from you?
Bob: There are two easy ways. The first way is go to Sellinglab.com. I have a really nice audio system on the front end of that site that tells you how to develop a sales pipeline. It's free. You don't have to opt in or anything like that. Sellinglab is kind of my thing. It's been around for 20 years, it's kind of my think tank of developing strategy. We sell products from time to time, but mostly it's a resource for people I wanted to be there for folks. If they want to contact me directly, they'd be contacting me, Lee, or Mary at Ruthlessmarketing.com. Just hit there “contact us” page and say, “Hey, we need your guys' help.” And we've been working with a lot of companies for a lot of years. That would be the two ways I tell people to consume my stuff.
Brian: Awesome, awesome. They can find you on Facebook and other places like that if they wanted to contact you. Right?
Bob: Yes. Facebook is Bobyeagerpittsburgh, Twitter is Bobyeager, YouTube it's Bobyeager.
Brian: In our pre-call, we actually talked about the whole Yeager-meister thing which is not a drink. It's really a job that people have which is pretty cool so that's an easy way to remember, spell the same way.
Anyways, Bob, this has been like I said, just totally outstanding and I so appreciate you and all the insight that you threw at this. People go back and listen again because it is incredible. Bob, man, I really appreciate you and your time and willingness to come and share all this great information with my peeps, man. So, thanks so much.
Bob: No, man. I appreciate you because most of the time when people call me up and say, “Hey, could you do a broadcast with me?” They're like, “But could you sell something while you're at it?” I'm like, “Well, can I just teach?” I don't always have to sell people stuff. But I think that people need to look into what we've talked about over the past hour or so and say to themselves, “Okay, this is a little more complicated. There's more steps to it.” So do your homework, do your research and study up on these topics and it will help you out.
Brian: Yes, you gave everybody a lot to think about, man. Thank you so much. I appreciate it.
Bob: My pleasure. Thank you