Monday, March 14, 2022
In the exciting conclusion of this 2-part episode, you'll hear Dan talk about:
And so much more. Enjoy!
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Russell Brunson: Hey, welcome back to the Magnetic Marketing Podcast. This is episode two in a two-part series from Dan Kennedy talking about the money aspects of the information marketing business. In this episode, he's going to talk about a lot of really cool things. He's going to talk about the fact that you are a rancher and you are in the herd business. He's going to tell you guys the story about John Lennon, what he said to Paul McCartney. He said that if I want a swimming pool, I'm just going to sit down and write a song. And you're going to learn about different systems that are essential and a whole bunch of other amazing things from the man, the myth, the legend himself, Dan Kennedy.
Dan Kennedy: I did things, and some of you know, and again, I got a bunch of my customers through manual labor by speaking. And I spoke for nine years on the success events. How many of you ever went to one of those things? A giant deal in the arena. Okay. For the rest of you, these things are like... it's like an all day circus. Kind of. It's in an arena. There's 25,000, 35,000 people there. And there's famous people. Colin Powell until he got a job. Well, all the famous people have to be out of work. That's why they're there. So Colin Powell, Norman Schwarzkopf, Former President Bush I, Christopher Reeve before he died, Johnny Cash, and a whole bunch of those kind of people. And then in between them, people like me, some famous speakers, Sue [Zig 00:01:54], Brian Tracy, Tommy Hopkins, and then people like me, famous people nobody's ever heard of who sell stuff. Okay?
And so for nine years, I did 27 of these a year. And Zig and I were the only two who did them all. I watched. I knew everything was going on. So the product area, it's not nice like it is here. I mean, there's like 8,000 people all trying to get to the table at the same time and it's staffed with temps. If you've ever hired temps, think about this for a second. Some of the events we had, we hired Mary Kay people. And that was better because they were a little motivated to be there and they knew how to take an order. But usually, you at least had a mix of them. So you had temps. They're on their feet all day on concrete. They don't care if anybody buys or don't buy. None of that matters to them.
I'm the last guy. I'm speaking at six o'clock at night. The temps got there at six o'clock in the morning. How interested do you think are they in whether or not you buy my bag? Nil, right? But I'm the only speaker who ever did this in nine years. And they all knew I did it. I went to every temp station. Sometimes we had four or five at the big events. Sometimes we were able to consolidate them and I got all the tired, weary, no good, could-care-less temps together. And I said, "Cash bonuses. If we sell X amount tonight, everybody gets 20 bucks. If we sell this amount, everybody gets 50 bucks. If we sell this amount, which I knew we weren't going to sell, everybody gets 100 bucks, $100. Then here's how you do that."
And my old training session, smile, fast, fast. Little script, not much, just one sentence to remember, right? I'm the only guy who did it. The host, the promoter gets half of the gross, give or take. The speaker gets half of the gross. And in this instance, out of the speaker's side comes the cost of all the product and your travel and your hotel and your food. So everybody else said, "Why would you do that if the promoter won't at least split it with you? It's all coming out of your side." Well, because of the herd. See, the money for the day... I mean, I had $100,000 days, but almost irrelevant if you really understand this business.
The future bank value, what do I care if I keep 150 of the 300 or 130 of the 300 or a 122.50 of the 300, I don't make any difference. The future bank number is 3,000. I don't want to let a 3,000 get away because Mary's bunions hurt and I didn't motivate her. I did 16 different things to facilitate my sales other than what I did on stage in those events that no other speaker did any of the 16 because they don't get it. They're in the speaking, selling tapes, running to the next city business. I'm a rancher. I'm in the herd business. Little did he know, had he asked, he could've kept all the money. I would've given it all to him to be on those events. He never asked I'd ever volunteered, but see, it's the future bank number, not the current bank number. Here's the power of the herd.
I use this as an example because it is such a powerful example. I kid about it, but I don't mean disrespect by using it as an example. Don't judge me harshly, but it's such a good example. I, as many of you know, a few years ago now, after 22 years of marriage, Carl and I divorced not at my option and as a surprise to me. We did very, very well financially say the last 12 of those 22 years. We lived in Arizona, which is what's called a community property state. For those of you that don't know what that means, that means you don't get to argue about how you divide the tea. You only get to argue about what the tea is worth. It's 50/50.
So the math on that works like this. Anybody here with their spouse at home? You're here at the seminar and your spouse is at home? This will motivate you to call home. You can call 1-800-FLOWERS 24 hours a day. So no matter how late we go, you can still place an order. I want you to know. Here's how this works. Half of everything you've accumulated, in this case over 12 years, goes away. And actually, a lot of what you keep, you get to buy half of it back. So you get to pay for it twice. I've got horses, it seems to be, I've bought them three times. I don't quite understand even how that happened, but it happened.
So you got 12 years of wealth accumulation cut in half. Okay? It's not like I didn't need it all. Okay? So it's not like it was... I mean, I'm not like looking for a tall building. But on the other hand, just sort of on general principles, I had it. Now I don't have it. I want. And again, I don't mean to... look, I don't begrudge her her half. I just wanted it. So here's the power of the herd. I got it all back in 18 months. 12 years, 18 months. Right? Because I was saying the saying is send the bill to the herd. So when I called the stables this morning, my trainer says, "Good news. You just bought another horse." I didn't know I was buying a horse. Notice, he said, "Good news." All right?
I said, "Great. How much did I spend?" $18,500. Wonderful. Don't matter to me. I ain't paying for it. I'm sending the bill to the herd. Here's the power of the herd. You got to get this, right? You've got to get it because it changes the way you approach your business life. It also liberates you from any real worry about money.
John Lennon told Paul McCartney, "If we want a swimming pool, I'll just sit down and write a song." Okay? What he meant was, want a mansion? Want a plane? What, what, what? Okay. A friend, Ron LeGrand, just went and bought himself a jet and hired a pilot. Right? Ronnie, planning on paying for it. You get that? He has no intention whatsoever of paying for a plane or a pilot. He intends to send the bill to the herd. You will see Ron create another seminar, the pay for the plane seminar. It probably won't be called that. It doesn't look that good in a brochure, but that's the idea. When he bought his new house, he literally said, "I don't want to pay for the house. Let's do a seminar."
Power of the herd is, write these words down, income on demand. Let me give you one thing on a serious note about this. Let's assume, God forbid, you or your spouse has a Chris Reeve-ish experience. Disease, freak accident, building falls on your head, whatever, something really serious. Your insurance is going to cap out lickety-split. Chris's was over, I think, in a year or two years. You better be able to write some checks. It's useful to be able to create income on demand. There's all kinds of asset bases that are good to have. So real estate's one of them, right? And I'm in the game too. I got that news when I first got here. Darren, where are you? Yeah, Darren. This tells you I'm like a good partner.
Darren handles apartment building investing in Iowa. When I first got here, Darren says, "Guess what? You bought another building." I said, "Oh, good. What's the building?" "Oh, it's got a hardware store." I didn't even ask him when we paid for it. I said, "Do we need any money?" Because if we did, I was planning on getting a bill out to the herd. That's called a sales letter. That's what that is. See, I'm not Lennon. I can't write a song. You probably aren't either. But you can get a herd in place that allows you to be the equivalent of John Lennon, sitting down to write a pool. No other asset base can do this for you. No other business can do this for you, but this, and that's why it's worth every penny you spent to be here, every penny you spend buying horses, every minute you spend studying, every trial and error experiment that fails, it's worth all of that because there is no more valuable herd you will ever own in your life than one that can replace 12 years of wealth in 18 months.
That's why this is such a winner. Nothing else like it. You need systems to build up the assets. There are four kinds. You need systems for rounding up the herd. You need a system for keeping them from getting out of the fence. Technical marketing term is retention. You need a system for ascension. Ascension means increasing the value of each member of the herd. Having their value escalate. By the way, think about that. You tax people in the room, people who understand finances, there's a thing called depreciation, right? Most people buy depreciating assets. The younger the people are, the more they tend to buy depreciating assets. Cars, for example. I went through my period when I bought a new car every year. Some years, I bought two. Ashtray dirty, traded in, all right?
A lot of young people who make money run out and buy Jaguar or Hummer. I don't think Jason's here, but we got this guy in Gold VIP. Is Jason here? I don't think so. Jason Juliano, and I think he's... I don't know, he's in college. I don't know how old he is, but 19, 20 years old and he's got the stature of a jockey by the way and a little baby face. He looks like he's 12. This kid would get carted at Baskin-Robbins. And he's just making a ton of dough because he's Mr. Implementation. See something, go do it, work 26 hours a day. He tires me just to have him around. This is a picture of his apartment. He's got his CD making machine over here and his computer and his direct mail stuffing. It's like in a square on tables around his bed. That's this kid. But he's off to go buy the big whatever that Mercedes convertible is this week because he needs this like I need hymn rights, but it's where he is and that's okay.
But see, most people alter their life by depreciating assets. Ted's been an appreciating asset. I appreciate the asset. And he's been worth more over time. You want appreciating assets, not depreciating assets in your life. So you need a system for ascension, a system that they move up through. I've seen that, right? Silver, Gold, Gold+, Gold+ VIP, Gold+ VIP+, Gold+ VIP++. That's for the programmers in the room. And I know more than I let on. And you need a management system to keep track of it all to make it all function. So those are your systems. Let me tell you something about these systems. For rounding up the herd, you need…
Here's everything that goes in the system. Just so you know, I'm just going to call your attention to a couple things because of time. Under rounding up the herd, the first thing listed there is market selection. Loops all the way back to what we already talked about. You want to take care in who you put in the herd. You don't just want any old herd. You want to be particular. So you got to give that some thought. Under retention, membership, best retention tool there is. There's some things to understand about the psychology of customer behavior. Here it is in a nutshell. People who perceive themselves to be members of a thing spend more money with that thing than people who perceive themselves to be customers of the thing. That's why there's Sam's Club.
Bill Glazer can tell you from his retail experience and you guys will all know it. If a store can get you to carry their credit card, you'll spend more than if you don't have that card in your wallet. I got a Pier 1 credit card. Why in the hell I have a Pier 1 credit card? I can't tell you, and I keep it in a wallet I don't carry, but still I open a kitchen drawer to get some money, it's where I throw all my money, and I see it there. And it bugs me to have that Pier 1 card and not be using it.
The Pier 1s close to the Barnes & Noble bookstore, I got a Barnes & Noble card too. I bet I've gone to Pier 1 four times in the past year and bought something I don't need, have no reason to have. Two of the things I bought are still in the box in the garage. I got to use the card. Where Costco members, you know what Costco is? It's kind of like a Sam's Club. It's where you get the 55 gallon VAT of peanut butter. So you better be hunting bears, okay? That's the deal. It's like their secret market apparently, is bear hunters, because everything's in large VATs. Right? Got a Costco card though. Got to go because I'm a Costco member. If I didn't have the card, honest to God, I would never set foot in a Costco store. Never. I go three, four times a year. It's me.
You know how long it takes to use a 55 gallon drum of grape jelly? Forever for one person. Got to go. I'm a member, right? This is how the psychology works. So the hottest thing in retention, the smartest thing you can do in retention is get your customers to be members, ascension. You need a visible ascension ladder. I described that to you. And then you need all sorts of motivation, recognition, or reward that causes able to want to move up the ladder. I'll tell you two little inside secrets. I got two minutes. Demonstrations of how that works.
How many of you were at the May mega conference in Phoenix? Okay, good. Then you saw we had reserved seats in the front roped off with yellow police tape, which I thought was especially appropriate. We had reserved seats, right? For who? Who could sit up there? No, no, no, no, no, Platinums, but who else? Yeah, yeah, yeah, Gold+. Right? And everybody else had to sit behind the tape. Now, this is like the no smoking section in a small restaurant. Right? I mean, it's a joke because it ends here and smoking starts here and you sit next to each other and there's a guy smoking here and you're in a no smoking section. Who's kidding who? Right? But everybody I'm ever with who's a non-smoker, "Oh, no, we don't..." There's a 20 minute wait for the non-smoking section. We can put you in smoking right away. They're right here. There's no wall between them. There's no vent. There's no nothing. She says, "Oh, no, I don't want to sit in smoking. I want to eat. What difference does it make?"
So here's this yellow tape. Right? And so there's a table and there's a piece of yellow tape and there's a table right behind it. There's this much difference between that table and this table. Gold up here, peons back there. I got to tell you, a significant number of people came in, walked down the isle, looked at the tape, went back out, and upgraded their membership. Tape. That piece of tape made us about $25,000 in May. I don't know what the tape cost, but voila.
If you read the newsletter carefully and those of you who've been with me for a long time, see, we keep learning. And this is why, by the way, people stay in Platinum for six, seven, eight years. And this is why it's important not just to come get this once, but to be tapped in to what I find out about the information business all the time because we learn something all the time. Wasn't all that long ago I figured this out. I know recognition's important. I just wasn't applying it properly. And so if you go back six or seven years and you look at the newsletters, you will see that people who send in stuff and we use it and show it and people who are referred to all through the newsletter, I just name them.
Dale Carson sent this and Steve McClain did this. I just name them. I don't do that now. Look at the newsletter now. Their membership status appears in front of their name all through the newsletter. I don't just say Dean Cipriano. I say Gold VIP member, Dean Cipriano. Why? Well, first of all, you probably can't find any recognition in the newsletter given to a Silver member in 24 months. I don't mention them. Why? Because I want them to upgrade. So I hold up the people at the levels that I want everybody else to move up to. That's intentional, it's strategy. So you need ascension, right?
And then you need management systems, right? If we have time, I'm only going to talk about one of them. And here it is because there's a very important point I want to make. Included in management systems, you need a system for self-management because these information businesses tend to be driven by the person in the business. That's the good news, bad news. That's the be your own boss joke. The good news is you're your own boss. The bad news is you're your own boss, right? So you need a self-management system. The circle I want to point out and I want to talk about is the one marked roles. All right? What is your role in your business? For most probably in the room, the answer is the same. Who knows what it is? You should be glad I came. It's rounding up the herd. Here's what it ain't. Sitting in a garret for three years writing your next manual. That's not your role. There's lots of ways to speed that up.
I have a product called PowerPoints. How many of you own PowerPoints? Good, very good. You understand I didn't do that product? Where's Rod? Rodney Tolson and actually Kathy probably did 90% of the work. Rodney's wife, Kathy. I shipped all my stuff. Said, "Find the PowerPoints. Have at it. I'll pay." Because that should not be my primary role. Lots of people can go through all my stuff and find 500 PowerPoints. I don't need to do that. No disrespect to Kathy, but that's not the level... that's below my pay grade as they say in the military. So why would I sit in a room for what did it take or a year? I mean, why would I sit in a room for three or four hours a day for a year to build the product when I could be getting more people into the herd, Renegade Millionaire System? How many of you own that? Good. Very good. How many of you don't? What the hell is wrong with you?
Hey, I didn't do the product. All the heavy lifting in that product, I delegated. I came in at the end, not at the beginning. Most business people in general, so it's not unique to us in the information business, but in some respects, the temptation is greater in the information business. Most business people, in general, don't define their roles by priority, by value, by pay grade. And so they spend a lot of time in roles that can't create wealth. They can create income maybe. Sure, I could have saved the money I paid, in this case Kathy and Lee Milteer so I'd have income, but I wouldn't have wealth because it's a bad trade. So you got to decide what your roles are in your business and you got to work the roles.
Well, there's two things. Clock's ticking. Two things about information businesses you need to know. There's evolution in these businesses and there's revolution in these businesses. You're in it very long, you'll experience both. And you need to deal with both. Let's talk about evolution first. Here's an example that fits the top three: anticipate change, predict trends, unearth underserved desires. One of the most recent trends in the information business has been the gravitation of information providers, meaning books, tapes, courses, email courses, teleseminars, information in any media shape or form to providers of do it for them services. And so you see more and more information marketers selling do it for them service. Is a very common example in business niches like Rory Fatts to restaurants or Ron Ipachs to auto repair owners or Jerry Jones to Dennis or Ben Altadonnas to chiropractors, Joe Polishs to carpet cleaners is the creation of a newsletter that their members sends out to his customers or that is mailed to his customers for them.
Because if you just tell them to go do a newsletter and you give them examples and you teach them, newsletters never get done. And they're happy, they're eager, they're crying to pay. Just do it for me. That is the modern plea. You go back far enough of time, that you used to be able to sell... in the gold rush, you could sell maps. There's a map, 50 bucks. If you watch Deadwood when it's on HBO, here's a map to where the gold is. Guy says, "Great. Give me the map." And he runs over here and he buys a mule and he goes over here and he gets a cart and he goes down to the door and he buys some food and he piles it all up and he heads out. Not today. Map, where am I going to get supplies? So what you'd have to sell them today is you'd have to sell them a kit: map, mule, food, flashlight, all ready to go. Guy pay for that. Wouldn't buy the map, but he'll buy that. Here's 5,500 bucks. Great. I got a map. I got a mule. I got a gun. I got water. I got them ready to go. Right?
We're getting to the point you can't sell that. Now you got to deliver all that crap to where the gold is. Okay? And you've got to at least throw the first few spade folds. Then maybe guy will step in and dig the rest of the way. Maybe. So that's an evolutionary thing in the business. There's a very important point I want to make that nobody ever likes hearing from me. Most people consistently ignore it, some to their detriment, but I will continue to make it. Evolution protect against vulnerability. If you insist on building an information marketing business that is single media dependent, historical precedent guarantees that at some moment in time, you are going to have a very bad day and your business will go away.
Here's three minutes for all the internet marketers in the room and you really hate hearing this. If your heard consists of email addresses and you have no other means of communicating with your heard, you ain't got a heard. You think you got a heard. People have very short memories. They don't even actually see what's happening in front of them. Television infomercials were once outlawed. They existed on Tuesday. They were illegal on Wednesday. They came back. Ronald Reagan deregulated airwaves. But there was a three-minute limit. You couldn't buy more than three minutes for commercial time for a lot of years in this country. That was a business. See, people confuse media with business. That was a business. It really was a media that went away.
Broadcast facts, a boom to infomarketers. Huge, huge boom. I have clients who literally made millions thanks to broadcast facts. And since they were making millions from it, they gradually became dependent on it and stopped doing anything else. As I screamed and screamed and screamed and screamed and screamed, and then one day, hey, you can't do that anymore. It's gone. We can use it right now for people with whom we have relationship. The law that was supposed to go into effect in January now is delayed until June that requires signed permission. But to call prospects, you can't use it. It says don't. Outbound, cold telemarketing. There's a thing called the do not call list in case you hadn't noticed.
I got news for you. At bare minimum, there's going to be a do not email list. There's going to be pay for email postage. It could be worse. It ain't a matter of if. If you understand history, it's a matter of when. If you insist on building your business dependent on any one media, you don't have a business. If you have only one means of communicating with your herd, you ain't got a herd. Don't kid yourself. So there's evolutionary things that happen. A lot of the information businesses that I helped launch started with what Jeff Paul and I called the basic JPDK model, lead generation ad like the one I showed you. People ask for free report. Free report sells a box of information. Then they get sold into a bootcamp. Then they get sold other boxes. But we got all kinds of new models now.
The model changed to model two. Then it changed to a more advanced model. Now we got choices of models. They all work. You got to pick one. Different ones, work better in different places at different times. There's people going right to coaching. There's people going right to bootcamps. There's people going right into multiple continuity programs with nothing on the front end. No box, no product, no information. So all of the business models have changed and changed. It is why it's important to stay on top of this all the time. There's been, in the information business, evolution of profit, right? Everybody used to have front-end profit. Run that ad, send out free report, sell box of information, make money. In a lot of niches, that's over with. In a lot of places, the front-end profit is gone. All the profit has migrated to the backend. Changes the way you have to run the business.
One of the biggest differences in the information marketing business, one of the greatest booms of the information market business is migration from transactions to continuity. Now we have this trend I just spoke to you about, migration from products to services. The biggest single money maker a lot of people have added to their information business recently has been coaching. Time to talk about product, but I do want to talk about bootcamps. There's been an evolution in the seminar business, all sorts of changes all within the last few years. The way they're priced, the way they're sold, innovations like the extra day.
How many were here for the first day? You understand that concept pretty much didn't exist three, four, five years ago? We pretty much in Platinum invented it. Let me tell you what just happened to you so you know. Let me preface it by saying it doesn't matter because you got great value. So you got nothing to be grumpy about, but now I'll do Penn & Teller deal and show you how you actually get the rabbit out of the hat. Okay? Shouldn't spoil your enjoyment of seeing them pull the rabbit out of the hat. There would've been a three day bootcamp for what you paid for a two-day bootcamp. Then there's an extra day. Some of our clients have an extra day before and an extra day after. I now have a client who has a three-day bootcamp, a two-day event before, and a two-day event after. It would've all been one. Now, it's a 400% improvement in profit per attendee. That's evolutionary. Okay? Change in the business.
So there's all sorts of evolutionary changes in the seminar business themed events. Yonick's 30th birthday. That wasn't on his birthday. Corey's wedding reception. That wasn't his real wedding reception. I believe it did $1.6 million on site. Okay? That woman under view think she's doing something getting people to pay to put product samples in the goody bag at her wedding reception. She has no idea what we know, right? So it's all sorts of evolution to look at. Here's a client of mine, Ben Altadonna. Here's evolution in his business. He's just a chiropractor. For many years, one bootcamp a year or annual marketing event. That was, by the way, kind of an old model. That was a model in information businesses, a lot of them. Joe's business has that model. Okay?
You build a herd up all year long, create demand. You have one big payday, boom, and you have a bootcamp. And then you start over for the next year. And so there's Ben's models too. Here's where we are now. There's that bootcamp. There's two additional bootcamps that are called case presentation and compliance, which means sales. So there's two sales training bootcamps. Now, there's a real estate investing for chiropractors by a rich real estate investor chiropractor. Two of those bootcamps scheduled for next year and they will spawn an advanced event out the back of that event. That's six bootcamps. That's the evolution in the business, right?
So these things change all the time. Revolution. Revolution is when something comes along that can change everything, right? In the infomercial business, my client, Guthy-Renker, did it first with celebrity hosts. Changed the business forever. Radical revolution in the business. Right? Second was continuity. They're really a continuity company. They're really not an infomercial company. We just saw it with pharmaceutical industry, right? Change of law that allows them to advertise drugs on TV change the industry. Revolution in the industry. For infomarketers, kind of the first big revolution was the audio tape. It's a shell with tape in it. Came right after the eight track. The audio cassette... This will surprise you. We used to sell information product with records. Records. Think about this, records. $399, great big suitcase with records in it. They were even sold at one time with record players. The revolution in the business was the audio cassette. It's hard to drive down the road with a record player on the seat of the car next to you. It's tough. It's tough to make that pitch. Spaced repetition learning, turn your car into a classroom. Listen to the tapes as you drive back and forth to work. Just be sure you don't hit a bump because the arm comes up and scratches the crap out of the record.
See, you couldn't make that pitch. Audio cassette changed this business forever. Created Nightingale-Conant and see it happen when Nightingale-Conant was already functioning. Earl Nightingale was on the radio selling a recording of the Strangest Secret, which came as a record. The original Lead the Field program came with records. I got them, right? So the audio cassette changed everything. Broadcast facts, enormous change in the business. Teleseminars, enormous change in the business. A lot of you don't know this. It wasn't all that long ago you actually couldn't put 400 people on a conference call and do a teleseminar. Rodney and I recall doing them in hotels where you had them all hooked together through the hotel phone system and everybody could get 10 or 12 or 20 people on each call and then you hooked them. That's how you did a conference call. Teleseminars forced continuity, revolution in the business.
I'm sure Bill explained everything to you before me about forced continuity. Internet, of course. Do it for them, now coaching groups, the coaching business. My client, Craig Proctor, was probably their earliest of all of us. But if you look at the evolution and then the revolution in Joe Polish's business, for example, it started with the old JPDK model. Run that ad, get a lead, free report, sell a box, keep them in the game, and once a year, do a bootcamp, have a big payday. The revolution now is all of that is there to sell his coaching program, which this year, 114 at $10,000 a piece. And they come to several group meetings. For those of you that are familiar with strategic coach, it's kind of like strategic coach.
Small information businesses, some of the smaller ones in small niches, Rorys in the restaurant industry, Ron Ipachs in the auto repair industry, these people have doubled their net income purely by adding coaching groups. If you want the fastest path to a high six figure or seven figure income right now, you'll learn how to do tele-coaching groups and live coaching groups, mastermind groups. You'll learn how to integrate it into your business. You'll learn how to sell it. You'll focus on it because it is the fastest path.
There's another five circles I want to show you about the information business. Here they are. Reinvestment. This is a business you want to take money out of. You might make a note. See, a lot of people think a business is a thing to put money in and leave it there. And a lot of traditional businesses, that's the thinking, is we're going to leave all the money there and we're going to build the business up over 40 or 50 years. And then finally, after we dropped out of a heart attack, the grandkids are going to get the money out when they sell it. This to me has always seemed like a bad plan for a variety of reasons, including the heart attack, death, grandkids get the money part. There's a joke about that. I won't take time to tell.
Anyway, this business rarely becomes something that you sell for a huge amount of money. I've done it, but it's rare. This is a cash business. You should take money out, but some people get the idea like they should be able to take all the money out. That's erroneous as well. There are reinvestments in this business required. Number one, testing to find more lead sources. In traditional business terms, I would equate this to your research and development department. One of the best things Jeff Paul and I agreed to do when we were in business together with the Make $4,000 a Day... actually we're kind of still in business together in case you haven't seen new infomercials on the air. One of the smartest things we did when we were in that business is we agreed that every month, we would test an ad in a magazine we had never used before. I picked alternating months. He picked alternating months. The opportunity magazines are obvious. We're already in all those. The financial magazines are obvious. We're already in all those. We need to find additional places where we can add to our herd that are weird, that nobody in our field knows works. Only way to do that is test.
So we set aside a percentage of our gross every month in order to go test new media. Amazing how many people don't do that. We found some very productive media that you never would have. We discovered that the conservative political publications are very, very good for opportunity offers and all kinds of other information product offers. Matt Furey is making a lot of money in those publications today because we went there and found out that they worked. American Spectator worked for the Make $4,000 a Day Sitting at Home in your Underwear ad.
Guess what else worked? I picked this one. I got to tell you, though, I didn't give it a lot of thought. Mother Earth News, could you get any farther away from the American Spectator? Mother Earth News is the Algora crowd. They're hugging trees and recycling tires and riding the mule to work. The articles are all about like how to build your own windmill. All right? Ad works in there just as productively as it does over at American Spectator. So wherever you get your leads for, however it is you build your herd, you got to reinvest in finding more and more and more places that you can build your herd from. It's first kind of reinvestment, then linked to it is herd development, customer acquisition.
I made five and I call them mistakes. I made five huge business mistakes in my entire life. Only five, a lot of small ones, but only five really epic ones. And I quickly say mistakes, not regrets, all right? I happen to have no regrets, but I made these five mistakes and here's one of them. I was too cheap and too conservative about reinvesting to build the herd. For example, we had a media that worked for us, card decks. You know the little things that come in saran wrap and there's like 50 postcards in there and each one has a different offer on them? I used them to get new members. They worked. They didn't work at a positive meaning it cost me more to add somebody to the herd than I got from them for the initial purchase. It cost a fair amount more like a couple hundred bucks more. So I didn't use it much. It just bothered me to get a new member and lose $200 getting them. My comfort zone seemed to be about 80 or 90 bucks, 200, but see, stupid.
Future bank value, 3,000. Cost, 200. Why not? It's a cash flow issue. It shouldn't be a financial management. It shouldn't be a marketing issue. It shouldn't be any other kind of decision than, how do you finance it? Not whether or not you do it. If you know they're worth 3,000 and you can buy them for 200, let's see, that means I can buy a $3 million house for 200,000. How many times a day would you like to do that? Say dumb on my part. Okay? So customer acquisition, you got to reinvest in customer acquisition.
Third, herd value improvement, customer relations. Send them a gift once in a while that doesn't have a pitch attached to it. Do stuff that builds the value, the relationship. Invest, of course, in intellectual properties, creating product. The better you are at herd development, by the way, the more prolific you need to be at product development. Why? Because their insatiable willingness and demand to consume will always outpace your ability to fulfill. If you were here last night for the reception, you saw every fifth person is saying, "We're dealing with real estate investors." You know why? They'll consume like there's no tomorrow because they fit the criteria I showed you earlier. Every piece of information they get increases their income. So therefore, they have more money to spend to get more information.
Say closed loop and it's a very good closed loop. So you need to be prolific in product because pretty soon, they want a lot of product and you can't keep your customers no matter how much product you give them. I think Ronald Graine's the best at it. I was pretty good at it for a number of years, but see, if we took a poll in here, there's a whole bunch of you people, as much stuff as I sell to you and there's a lot of it and I'm about to suggest you get some more, but check this out, how many of you in here own something from Jay Abraham? Look around at them, not at me. It's instructive. How many of you have bought something from Nightingale-Conant in the past 90 days, raise your hands? How many of you have been to some other kind of marketing seminar say in the past year? Look at this.
As hard as I try to take all your money, you whores run out, you slip behind my back, and you go give money to other people in my category. I can't keep up with it. I've now divested myself of everything but content. I'm in the position I've wanted to be my entire life. I don't run any of these businesses. I sold the newsletter business to Bill. I sold the product business to Michael. I don't own an information business. I'm a content provider. I still can't keep up. You guys are running hither and [inaudible 00:50:52]. Right? Well, if you are, so are your members and customers. It's a very important lesson. The herd you see has the ability and willingness to consume at greater levels than you will ever need or be able to fulfill. Think about the value of that asset. How much did you say you spent this year, Ted? 40,000. What else are you in? You're in LeGrand's Platinum group, right? How much is that? 10.
Go to anybody else's seminar you pay to go to? How much? 10. Buy any books or tapes this year? It's not that. Don't make that mistake. It's one of the things I really don't like. I like a lot of things about strategic coach, but Dan Sullivan says his best customer is a slow learner with a lot of money. I don't agree with that. And don't misunderstand, this guy ain't dumb and he ain't slow. He's very smart and he makes a ton of money. Right? But look at it. I can't get it all. No matter how hard I try, he's running around, giving some to other people in my category. How valuable an asset is that? That's like owning a restaurant and having a customer that comes and eats there three times a day every day and he is saying, "Can't you open up at two in the morning so I can come down here and have my midnight snack? I wake up in the middle of the night and want a sandwich. Wouldn't you open up for me?" No, I'm doing everything I can. I'm taking all the money I can take and he's getting out of bed at two o'clock in the morning, running down to 7-Eleven buying two sandwiches and a quarter Coke. What an asset. That's why this business is so spectacular.
Skills, that's the last place you invest. And I don't mean last in priority. I just mean last on our list. This is a business about skills. And this is a business about very, very, very useful skills like copywriting. Well, here they are very quickly. Here's the main skills. Opportunity selection. It's a skill in and of itself. The more successful you get, the more you have to work at making this skill work because all the more successful you are, poll position, we didn't even have time to talk about but you see when you have a herd and it becomes known to others you have a herd, opportunity flows to you. You're in a very powerful position, but now you need good opportunity.
Selection skills, the marketing skills, marketing, sales, copywriting. These are skills that you need to develop. I have resources that will help you. I want to tell you some very good reasons to make sure you own them. Of 18 Platinum members, one of them is Ted, Ted is new this year. However, many have been in Platinum for seven and eight years. Smart people. They spend between $10,000 and $14,000 a year to come sit in a room three times a year, four times if they make the optional meeting, and talk about this, information marketing. The evolution, the revolution, the profit improvement strategies, the new discoveries. Why do they keep coming back? Because there's always something new and because nobody's got a better handle on it than me. There ain't nobody who has more of this come through them, his clearing house than me. I'm a very prolific copywriter.
For example, I worked with 38 clients this year on major bootcamp promotions. I see a lot. Everybody connected to me gets to go to school on their money. I've launched over 200 people in information businesses who are doing very well, even attorneys. Here's the deal. If you could help an attorney switch to a legitimate and honest way of making a living, you're golden, right?
Bill Hammond, who's on the list, an interesting guy, Bill comes to me and he says... He buys a day of consulting and he says, "I kind of do this unusual thing with my law practice." He's got an elder law practice, which is aimed at people with aging issues. And really it's an Alzheimer's law practice. It's for families who have someone in the family who they think is heading in the direction of Alzheimer's. And now there's all kind of legal and financial stuff that has to be dealt with. He says, "I think I can can it, clone it, teach it to other lawyers, because there's a subsection. There's a bunch of elder law attorneys." He said, "I can show them how to have Alzheimer's law practices. They're very lucrative. Estate planning guys, I can show them how to..."
Well, here was his goal. He says, "I just want to start a little information business on the side." He's got like, I don't know, five or six kids, I forget, but a bunch of them and they're all going to be going to college. And he went to law school, so he wants to send them all. Just what we need, they multiply. But anyway, so he says, "All I want to do is have this little information business on the side to pay for the kids' college education." That's his whole goal. He's great. This year, he'll do over 3 million in the information business, right? In a little side business. He's getting serious about it now. He's creating a coaching program with territorial exclusives. I mean, this is going to be a huge, huge business. It's formulaic to me. I work with the biggest. Craig Proctor who sells to real estate agents is 10 million a year business, Ron LeGrand is a 20 million business. Ben's will probably go to eight or million dollars next year.
Over 50 of the innovation, some of which we've rattled through as we've gone along today, have either been originated by me or originated by my clients and you'd know about them first if you're connected to me. There's no theory. And here's something important because not a lot of information marketers are in the game. I have used every media you could use. So there are people who know how to do it with the internet and that's the only thing they know. There's people who know how to do it with direct mail and that's the only thing they know. A whole lot of people miss all kinds of opportunities to have their information products sold for them by other people. I've had mine in every major catalog you could possibly put them in. Bootcamps and seminars, that's the big payday part of this business. I didn't spend a lot of time talking about it today, but it is a big payday. Look around, right? Even the internet marketers, I kid them. I actually kind of annoyed them. I spoke at Ken McCarthy's internet marketing bootcamp.
And I said, "Let me make a point to everybody who's come here to find out how to use the computer like a toaster and push the button and money pops out the top." Everybody teaching this is here doing a bootcamp. There's a reason. They're not sitting at home using the toaster. They're doing manual labor. Why? Because there is no bigger payday. If you got a herd, there is no bigger payday than the seminar business, but there's a lot of little nuances to this. How to get the herd to want to come, how to make the herd happy, how to structure and organize the event to optimize revenue, who to have speak, what the deal should be, how to handle guarantees, extra days, extra events. There's a lot to it.
Ron LeGrand puts on more bootcamps than anybody I know. He, I, and several other speakers did a bootcamp on bootcamps and that's all we talked about for three days, is every possible thing you could want to know about how to do big ticket bootcamps for your herd as well as cold, two markets, if you don't have a herd. For fun, we got a small supply. Some of you are getting them anyway because you went to the bookstore and bought books. Bless you. But we got a small supply of my posters. Happy to autograph them for you when we break. First ones to the table get them. You've been a great group. Thank you very much.
Russell Brunson: Thank you for listening to the Magnetic Marketing Podcast with Dan Kennedy. If you love hearing 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.
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