Welcome to the More Cheese, Less Whiskers podcast where we spend a full hour hatching evil schemes and applying the eight profit activators to one specific business. It could be your business. Today I have a guest, Joel Johnson, who I've known for a few years now. Joel has been to a Breakthrough Blueprint Event. We've done some work together and we got a great opportunity to catch up looking at his before unit that's already really working well. We were able to hatch some evil schemes to increase the retention, the value of the asset that he has of all of the leads that he's generated. All of the prospects that he has that have not yet converted into clients. That's one of the greatest assets that any business has.
We had a really great discussion about that. We also talked about the after unit and measuring return on relationship. Neither of these concepts were new to Joel but you'll see in our conversation that this deepening process, even with what he is applying, there's lots of room to apply the deeper principals that we talk about and improve the numbers. It all comes down to knowing what your numbers are. Knowing the metrics and dividing things into a before unit, a during unit and an after unit. I think you're going to get a lot out of this episode and if you'd like to be on the show so we can hatch evil schemes for you, just follow the link below. Enjoy this episode.
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Transcript - More Cheese Less Whiskers 010
Dean: Joel Johnson.
Joel: Dean Jackson, how are you?
Dean: I am good. I'll tell you what, I am sitting in my evil scheme-hatching chair with my evil scheme-hatching pad and pen, and I'm ready.
Joel: I'm here at the Renaissance in Boca Raton, Florida just being a man of the people, doing one honest hour of work today, which is talking with you.
Dean: Oh, perfect. I love it. What kind of evil schemes are we going to hatch today?
Joel: I don't know. How do we come up with one?
Dean: Let's catch up on what's been happening in your Before unit, and then we can talk about your After unit, too, but maybe bring me up to speed on what's been happening with your book efforts, because I know that's been a really great lead generator for you, and then we’ll talk about how that works, and we can see what we can do to-
Joel: Great. Excellent. The books have been great. I have one big book that I wrote a while back before you and I ever met.
Dean: Actually, we should probably set the stage for what business you're in, too. I was thinking, it's so funny, yeah, because I know you and nobody else does, that's right. I figure that some people, what kind of business you're in.
Joel: I am the majority owner of an investment firm. We specialize in helping people that are either already retired or getting close to retirement invest in a conservative way so they can basically take income off of what they've saved. We're a full-blown investment firm.
For those in the business, I'm a registered investment adviser, FCC-registered, so we manage hundreds of millions of dollars. I have six other financial advisers that work for me/with me, and so I'm the rainmaker of the company. I'm in charge of setting the strategic direction of the company, leading the company. We have 25 total employees, including all six advisers.
I create and generate all the leads, set the tone of the company, and we market through TV. I have a TV program. I'm on the TV news on a big network affiliate in Connecticut every Sunday morning. I also have a half-hour radio show that we market through, and we do public seminar, so we do direct mail. I'm a strong believer in direct mail. We drop about 25,000 to 30,000 pieces of direct mail every month to drive people to a public seminar.
Then we have a After unit program where we generate constant referrals and introductions through our existing clients. We just do a ton of direct marketing to feed lots of introductory appointments for prospective clients to those financial advisers that see the people in my During unit, and of course then we try to hold on to those relationships as long as possible in the After unit.
Dean: That's awesome. That's a great summary! Sounds like you have a-
Joel: Thank you.
Dean: There's the thing is you've been studying this process for a while and were down the road there, so let's catch up on the book offer. You're offering people the book from the TV show, from the radio show. People go to the website or call in and ask for it. What's your book called again?
Joel: We have several books. I have a book called The Money Map which talks about our financial retirement, our planning process. That's my big book. I actually do not offer that through a direct response medium. They get that book when they come in after their first consultation.
The books I use to hook people in for that first consultation to generate the interest in the business are much more the Dean Jackson-oriented-type books. There's one called Forced to Retire. Forced to Retire talks about so many people up in the Northeast, a part of the country are getting these early retirement offers, or they're not offers, they're, you're going to retire earlier than you thought. You talk about having a constant flow of new prospects every year, those are people that find out they're having to retire earlier than they thought, so I wrote a book called Forced to Retire and we offer that.
There's another one called The 2016 Guide to Maximizing Your Retirement Income, which of course, once I wrote the 2014 guide, then it's easy to do a 2015 guide, a 2016 guide, and ...
Joel: ... guess what's coming out in about three months here? The 2017 guide.
Dean: Yes! I love it.
Joel: Let's see, what else? I have a few books like that that, when you can't make a direct call to action, like through the radio shows the direction call to action for the appointment, but for TV, I'm on the news desk. I'm part of the news and we can't do a hard call to action there, so we offer a resource, and many times it's these little books which are just wonderful. They're these easy books that's your 90 Minute Book process, that before you had that 90-Minute Book process I talked with you and before you packaged it you told me how to do it, and it works fantastically. The key to those books I think is the title and getting super, super specific about what the book is about instead of being general in nature.
Dean: I think that we've hit on something then. You're executing this flawlessly in the fact that you've got "The Money Map" which is your big book, that is your overriding approach to everything. It's the way that you approach the whole thing, and that book is something that a lot of times people have the big Book, as Dan Sullivan calls it, capital B, and it takes a long time to write and to get a book like that together.
It's worth doing because it's the culmination of all of your philosophies, all of your approach, everything like that. Just like you said, when you're meeting somebody and they come in and you sit down with them, it's a great way to set the stage and to get everybody on the same page with the way you're thinking, but these little books that we have been talking about, these 90-minute books, have such an incredible focusing power that you can focus on specific segments of the market just to get the conversation started. I really have seen nothing that works as well as a really meaningfully titled book to compel people to raise their hand.
Dean: It's pretty amazing.
Joel: The big book basically represents 12 years and millions of dollars of missed opportunity, which I could've done with a 90-minute book, and who knows, I might be nationwide now instead of just the Northeast, right?
Dean: Yeah. I think you've hit on something there that people often sit in the gestation of their big book waiting years and years and years to get it out there. Have you read Robert Cialdini's new book, it just came out, called Pre-Suasion? It is-
Joel: No, I have not.
Dean: Oh, it's so fantastic. It totally puts now clinical and experimental support to all the things that we've been doing. The book Influence was a tremendous wisdom book that talks about the six weapons of influence- Have you read that? I'm sure you have.
Joel: Yes. I've read bits and pieces of it, because I have this gift of a short attention span, but I've read enough of that and implemented enough of that to know that that book was a real game-changer, especially understanding things like reciprocity and ...
Dean: Yes, exactly.
Joel: ... giving value before you charge for it, that the whole marketing world, if we can go off on a little bit of a, back in the day, maybe 12 and 15 years ago, and even being a strategic coach, it used to be, don't give away your wisdom until you get paid. I think in my world, if we insisted on that, there would be too many opportunities for us to lose someone that's genuinely interested in talking to us, that if we just gave them a little bit of value, we get to meet them now.
The whole Cialdini book really changed my mind on that, and of course guys like you and the people we hang out with where you can add value and add really life-changing content to somebody, and they don't leave saying, "I've got everything I can from this person," it just makes you more attractive to the right people.
Dean: Now the years that he's been working on this, he's identified what he calls "pre-suaders" which is things that amplify the effect of influence if you do them prior to the things that he talks about. Some of the things that are like on a meta level, setting up the frame that you're coming into, and I was thinking about the book, it pre-frames everything, it sets up commitment and consistency, which is one of the principles that he talks about, where if you've asked for The 2016 Guide to Maximizing Your Retirement Income, and you then are presented an opportunity to meet with someone or come to another workshop or to carry on down that path, it's like you're much more likely to do that because you've self-selected yourself as somebody who's interested in that, or you've self-identified yourself as somebody who has been forced to retire.
The fact that they're starting the conversation by raising their hand and associating themselves with a desire for what the title of your book is offering, they're already now pre-framed and ready to be influenced in our Profit Activator 3, our lead conversion process. That's why when you say now that you've got your book, here are three ways we can help you, you're setting it up to now lead the rest of the way.
One of the other things that you've done with the book is you've framed yourself as an authority, which really has amazing impact on people's receptiveness to any instruction or guidance or offer that you make when you're viewed as an authority. Inherently having a book is an indicator of being an authority. People immediately associate you as being an authority with that.
Joel: Cialdini talks about that, of course, in his first book a lot about positioning ...
Joel: ... yourself in authority and exclusivity and just all that great stuff, so I'm looking forward to seeing that. I did not know he came out with another book.
Dean: It's so good. When you look at the Profit Activator 3, your conversion process here, what kind of things are you doing in there now and how is that going? How do you measure the effectiveness of the long-term follow-up with the people who ask for the book? How are you handling that right now?
Joel: Again, that depends on which channel they come in through asking for the book. Let's just say they ask for the book on TV, because we do some Facebook ads, we do some other targeted ads where we can really target a certain company where we know there's layoffs going on and so on, but let's say they ask for the book on TV where it's really a soft sell.
What's happening is after they get the book, we've captured their email address, and by the way we're sending a physical book, we're not sending an ebook. I believe there's value in sending a physical book. So we've captured their email address and we've captured obviously their address and so on. Sometimes we have the phone number and sometimes we don't. Many times we don't, but we're sending out your letter, that you helped me format, Dean, that has the three ways you can help you, so that the key is at the bottom, because especially if they've come from TV, we don't go hard sell and we don't right away start calling-
Dean: Not at all.
Joel: It's not the highly-trained people, because that will shut that down real quick. We send them out a real nice letter-
Dean: Yeah, "Call now! Our salespeople are standing by."
Joel: A highly-trained salesperson will pick up the phone and not let you go.
Dean: That's right.
Joel: Especially during election season, people don't really want to talk to anybody because of the phone calls everybody gets. We send out a very nice letter and it basically says, "Thank you for asking for the book." I don't know specifically what it says, but the key is the PS. The PS is, there are three ways we can help you right now.
One is they can ask for another report of some sort. Now I'm not sure specifically what it is right now. The next one is they can attend a seminar, and the next one is that they can come in for a no-obligation visit to get their Money Map Retirement Review. Then we say a little bit about what that is, but that's the name of our process that people come into and get if they come in for a first appointment.
We're generating all these leads and enough people call where we generate quite a few appointments. Those that don't, we'll send in their follow-up if we have their email address. We'll do the Email Mastery thing that you teach, which is we'll send out just a little email just a few weeks later saying, "Hey, you got my book a few weeks back. By the way, are you working or are you retired?" That's our question, and then they'll of course ...
Dean: Just engaging in a dialogue.
Joel: ... look at it and respond, and then we're in an email dialogue, and I pass that off of course to one of the other advisers that walks them through a templated email dialogue, again, trying to see if they have any interest in talking and if we can engage them in a conversation and solely try to get them offline. Our sale tap takes place, our During unit, is a face-to-face. Almost everything about our process culminates in that ...
Dean: Of course.
Joel: ... being face-to-face in the financial services business.
Dean: That's awesome. Then what happens when ongoing? What's your flagship vehicle for your bonding with all of the people who've asked for the book and they've got the letter, and they haven't maybe taken us up on the offer right away? What's the ongoing signature during right now?
Joel: There's a weekly economic update that I do, which is a templated update on the financial markets and what's going on in the economy, and just basically it's not real technical in nature, it's not like a stock market newsletter, it's really just a real basic thing on what's-
Right now, I will be talking about how the election might affect your portfolio or based on what's happening, so it's just a nice, simple weekly economic thing where they're just getting touched, and every once in a while, probably every other time they get one of those, there'll be an offer in there to maybe get another resource or a white paper, a giveaway or something like that.
It's just constant real soft engagement where people raise their hand when they're ready, and after a while, people will go away forever and get taken off the list, but enough people are raising their hand where we constantly fill the calendars they've brought.
Dean: Have you incorporated a super signature in that email yet? What I mean by that is that, in every, it's coming back to me now because I remember when Laurie came to Celebration, we'd talked about that, your flagship, that weekly email that goes out, is incorporating into that a super signature that has your offers, like your cookies, each time it goes out, almost like at the end of every one of those saying, "Whenever you're ready, here are three ways we can help you."
Joel: She may have done that. I wouldn't even be aware if she did that.
Dean: I was going to say, that, just continually presencing the "What to do next?" and sometimes those are the magic words is that if you just let people know that's secretly what they're looking for is here's what to do next, and even if you use those words, "Here's what to do next-"
Joel: That's the mistake we made so many years in this business is we just figured people would know what they're supposed to do next. They don't know. They don't know. Frank Kern talks about that, about that's where so many marketing campaigns fall short. We tell them what we have, we tell them how it's going to help them, and we forget to tell them what to do. We've really learned that over the last few years, which is- I can tell you this: our TV, because it's such a soft offer, would not be profitable if we had not learned to tell people what to do next.
Dean: Yeah, exactly.
Joel: We're getting a profitable return on that one. When we started that, the real intent was just to build credibility for our other marketing channels, but if we hadn't learned that super important lesson, which I will still forget to this day from time to time, I'm telling people just in simple terms, "Here's what to do. You'll pick up the phone," or "Send us an email asking for your book," they won't figure it out, and then we think we're failures or people are idiots. They're not idiots; we forgot to tell them what to do.
Dean: That's exactly right. You've got to be explicit. A lot of times, people are hesitant to, they don't want to be a sheep but they don't want to be seem aggressive or trying to convince people to do something, and I'm all for that. I don't want to do that, either.
The way that we can do it is, in every email, having the end of the email always contain, "Here's what to do next," or "Whenever you're ready, here's three ways we can help you," or if you're sending out that one email to everybody, so you've got people who get into that group, your Profit Activator 3 pool of prospects, unconverted prospects, all the people that have responded to your TV offer or come to one of your seminars or responded for anything, whatever you get those email addresses, that's what you've got and that's who's getting this email every week.
It might be a nice thing at the bottom of the emails to include your book offers, the little books that you have, because somebody who may be called in on the 2016 Guide to Maximizing Your Retirement, they might not know that you have the Forced to Retire book or the Social Security book or the Annuities guide, all the hot-button things that people have. If you had those available as a ride-along in every email that you're sending out, you'd be amazed how many people would click on those.
I model that with the More Cheese, Less Whiskers announcement emails. They're always saying, "Whenever you're ready, here's some ways we could help you," and I mention you can go to Breakthrough DNA and download the Breakthrough DNA book and watch the video to get a real good understanding of the 8 Profit Activators. You can come to a Breakthrough Blueprint in Celebration. I've got two coming up this fall. I'm laying it out. I've got one in October, one in December. We can help you with a 90-minute book, get your book out there.
All of the things that we're saying are all presents in every email, and they're below the PS so you get the main essence of your message, which is to announce your weekly summary, your market commentary that you have, and that format is great because you get to make it seem like a real person is doing it, and then at the end, have all of these resources. I think it would make a difference in the number of people who take the next step.
Joel: I love it.
Dean: I think that's a pretty good evil scheme for you to measure that. Now here's something, you'll love this because I have just been formulating this, is I'm big on metrics and I always look at how can we monitor things. In our After unit, we measure the return on relationship, right? How much business ...
Dean: ... are you getting relative to the number of clients that you have? That's a measurable, knowable number that we can improve year after year. The number that in the Before unit, I've been thinking about how to really get the best way to think about that and to allow for the compounding effect of this. There's been a few different things that have really pushed me over the edge on this.
It seems like we look at measuring the Before unit in terms of, on a calendar basis, we spent this much on the ads and we generated this much business. We talk about a multiplier. We got a 4-to-1 or a 3-to-1 on our spend there, which accounts for it, but it does it in a snapshot kind of way. It never really accounts for the value of the difference in the leads that you generated in January versus the leads that you generated in December. It's putting equal weight on the spend. To me, that seems like an expense model of measuring the return on marketing that way.
What I've really started playing with and thinking about is turning that spend, thinking about it as a capital investment and looking at the return on your ongoing capital asset. What I mean by that is that you've been running the TV show and the radio show and spending money on direct mail and all the things that you've done, and you've generated an asset from that, which is the name and email and the address of somebody who raised their hand to identify themselves.
If we think about each one of those as an asset and the collective of them as an asset portfolio, that is like, Warren Buffett talks about the snowball, your snowball is bigger and bigger each year because you're generating and adding to it new leads, new people that have identified themselves but not yet become clients. The value of that, some of those people just stay for 30 days and some of those people just stay for 30 months, and they would not show up in any regular measurement of how your advertising is working. It's-
Joel: You're saying if you're not measuring that.
Dean: No, if you're not, if you're-
Joel: If you're not careful, they don't- Right. We've learned to be very careful about that measurement, because you can assume- Our marketing budget for this year will be a million and a half dollars, which is small compared to some people listening to this podcast, but in my business, for an independent financial services firm, that's a pretty big marketing budget. In fact, it'll probably be $1.8 million. We have to be very, very careful. The stakes are much higher now with my overhead and all the employees, so we've learned to be very careful.
We used to assume, the primitive mistake that a lot of people in my business make is you say, so here we are, we're having this conversation in September, you look at July and you'll say, "I spent $10,000 in July and I had $30,000 in revenue in July. Therefore, my profit on everything put together is 3 to 1." No, it's not, because the $30,000 didn't come from July spend, it came from March's spend. Now we're so sophisticated, we don't even see it as coming in from March's spend. We know that some of it came from the year before, so there's a bell curve-
Dean: And maybe even the year before that.
Joel: Right, exactly, and you start to track these things, and the more specific- I was just having a conversation with somebody about data and I get really excited about it because there's magic in the data the more you can analyze the data. Some of us as entrepreneurs, we are not the people that should be analyzing our own data.
There are people that are gifted at finding patterns in data that can mean the difference between you exploding and being a huge business and you just struggling along to maybe have a great lifestyle but never really coming over that hump to that full potential you could have, because there's so much magic in the data. The data talks to you in patterns and things like that when you really start looking at all these things, and sometimes we're too close to the action running our businesses to step back and see it.
Dean: One of the things that we've been doing to measure this now is to measure the cumulative ROI on it, starting with tracking the spend and tracking the revenue on a cumulative basis, so it can be three or four or five years out to show how that all comes, because it's been really fascinating to observe, since I really started looking at it in that long-term way.
I had Episode 4 or 5 with Kenny MacCarthy, he's a realtor in Cape Ann, just north of Boston, and he's been doing our Getting Listings program for the waterfront homes in Cape Ann. There's a 1,000 homes there. He's been mailing every month the Getting Listings postcards offering the free September 2016 report on Cape Ann waterfront house prices, and then each month, he mails them the How to Sell Your House for Top Dollar Fast book along with the report on what's been going on on the waterfront homes for the last year, and then each month, he emails them a newsletter called Get Top Dollar and a cover letter and updates of all the new sales that have happened on the waterfront in the last month, including, we have a section called Helping People on the Move, which shows all the different kinds of people that Kenny's working with.
That's the Profit Activator 3 mechanism. No phone calls. He never calls anybody, just serving, sending that out to them, and in one 90-day period this spring leading up to the summer here, he had three people call him who've been getting that newsletter for three years who were now ready to sell their house. He sent me a voicemail of one of them, this lady had been getting it, she had a bit of an accent, she's like, "I get your paperwork every month," meaning the newsletter, "and you talked about this silent market. I have some questions about that. Can you give me a call?" and left her number.
He goes in conversation with her, she's got a $4.2-million house that she's selling, and then gets the same types of calls. One guy who'd been getting for just under three years is ready to sell his house. Kenny's the guy, he's been getting their postcards and newsletters, "We're ready to sell. Come on out." That's a $2.8-million house, and another $1.2-million house. All of that on the postcards that he sent three years ago. The spend, it's almost like the compound interest tables, all the benefit of a compound interest table is in the end. That's where it gets exponential, you know?
Joel: Right, and we could be ...
Dean: That's pretty-
Joel: ... very impatient as entrepreneurs and quit. There's a saying in other circles, "Don't quit before the miracle happens." I look back at my career and think about all the revenue that's been left on the table after I've decided something wasn't working. If I just would've hung in there for sometimes another month, it would've turned the corner. I'm on to the next thing building a whole new program. Now we're off to something and now it's going to take sometimes 90 days to six months to even figure out if it's going to work or not, but if I would've just been smarter about the last thing. It's so true.
Now what we do is, now we can measure. I can go back and say, let's look at all the prospects, the little batch of prospects that came in in February of 2015, and let's just look at what happened to all those people. It's fascinating to look at that, because you'll find out that you think, as a salesperson, you might think that everything happened after four months, and that's where you got most of the juice out of it, and you'll see all of a sudden that in the 15th month, all of a sudden just a lot of things happen, and then you look at the other batches of people and say, "Is that a pattern?" It's amazing.
Many times it's very inexpensive to keep touching those people, especially if we're doing email type of marketing, although I'm a big fan of, you do emails for a while, but every once in a while you drop that direct mail just because nobody else is doing it.
Dean: I think that rhythm, you probably got a great case to test a quarterly journal type of mailing that you could do to some of these prospects as a test. Every week that goes, every week's going out the email-
Joel: A weekly economic update, yeah. That's a great idea. We haven't done that. We haven't done that at all. We could easily do that, once a quarter just send out something that's a nice two-page little piece.
Dean: Yeah. That's the thing is now you've got the opportunity, because your asset, your Profit Activator 3 asset, is long-term now. How many people do you have in that that get those weekly emails right now?
Joel: I would have to ask Laurie, but it's probably 8,000 or 9,000.
Dean: Perfect. You look at that and you've got that many people right now that, at that level, you-
Joel: That would include clients, Dean, so ...
Dean: We want to separate those.
Joel: ... the 2,300 households that we serve are also in that group.
Dean: Let's call it then 6,000.
Joel: Yeah, 6,000 that are not clients yet. Fair enough.
Dean: Six thousand that are not clients. When we look at that, that's your asset under management right now in your Before unit. Laurie or the person in charge of that asset, it's almost like you talk about data and you talk about knowing the numbers and mining the data and managing the relationship with those, if you take that financial approach, it's almost like you've got an asset that you could apply your kind of analysis and yield analysis to really look at, what can we do? The great thing is that you can actually affect the return on that.
Right now, these numbers are there whether- That's the great thing about data is that it's all there, but there's a real skillset and wisdom in turning that data into information. The information is where you can be guided. If we had perfect knowledge, like our friend Peter Diamandis called it, perfect knowledge of all of the data, that we would be able to see how much the cumulative ROI on all of these 6,000 prospects, or a good number of those 2,300, have graduated into that 2,300 through that process, you know?
Joel: Correct, correct.
Dean: Looking at that, setting up a set of metrics that is actionable, that you can measure and hold someone accountable for, let's treat it like this person is in this role, this person owns this metric and is fully tasked with, what can we do to improve this metric to build more relationships? The whole thing about Profit Activator 3, that aspect that you have, is to deploy offers in Profit Activator 4 that move people into your During unit. So-
Joel: The key there is having somebody that's accountable for it, which, remind me, we'll come back to it, but I want to tell you a story about that in our During unit.
Dean: Go ahead. Let's carry on with that now if that's a good-
Joel: For a long time, because I am so good in my company, and we've gotten so good at filling the funnel in one, two and three and can feed in these financial advisers these appointments where they're just set up to do these appointments, the idea of generating consistent introductions, referrals, we call them "introductions," in the During unit, for a client that's been there for a year or two years, three years or four years, they're not motivated, they're not incentivized to do it because it's not a quick payoff, that the quick payoff is I sit with somebody today and out of every four people I sit with today, one of those people or two of those is going to become a client in a week or two. That's a quick rush for somebody that's in a mode of 100, right?
Joel: The mode of sitting with somebody that's been a client for four years and getting a referral, or an introduction, and then cultivating that referral or introduction and so on, it's a lot easier for those guys which are sales guys at heart to just wait for me to feed their calendar for the next week, right?
Joel: So we've got this During unit that's active, that's all these clients, most of them happy, and so I just took a person that's on Laurie's team, she has five people on her marketing team, and said we're going to have her own this program. This is going to be her program. We're going to incentivize her for it. She's going to track her own data and she's going to talk to the advisers about it and we're going to have a contest and we're going to set up the same competition that the sales guy love to have with each other, any sales guy, he's not a true sales guy I don't think if he doesn't like to compete with other sales guys-
Dean: The first prize is a Cadillac, the second prize is a set of steak knives, third prize is…
Joel: Exactly. We have to be careful here in the financial services arena about that kind of stuff. They love to compete. They just love to compete. They like to know at the end of the week if they did better than the guy in the desk next to them, so we said, "Let's build that, but let's have somebody else responsible for that." We've got Cindy, who was responsible for helping with my help and Laurie's input building that program out, and it's working wonderfully.
Now all of a sudden we've built this culture of that, but we've made it easier for the financial advisers, because they don't want to follow up. I'm a sales guy. If you tell me that you're going to give me five appointments tomorrow or call the finance people you saw last week to see how they're doing, I'm going to just see the five guys tomorrow and lie to you and tell you that I called the five people from yesterday or last week.
Joel: You've got to treat them like big babies and take if off their plate. Part of that, I say that facetiously, but part of it is just like any superstar athlete. A good coach knows you keep them doing what they're great at doing and take the things they're good at, and maybe they shouldn't be doing the things they're good at, they should only be doing things they're great at. We took that entire process and it's real fresh and it's real new, but it's working amazingly well.
We're getting now sometimes one or two new clients a week through that process, where before it was maybe one or two a month. We haven't even started refining it yet. It's very, very exciting. I don't remember why I started talking about that, but it's very, very exciting when you take something like that where you know- Oh, I know why, because we're talking about this asset. We have this asset that's our client that we can mine for these introductions, but ...
Dean: There you go. That's where-
Joel: ... you have to create a process that runs by itself, because if you're a fast-running sales guy or entrepreneur and you have to go into the office and start a process everyday left to your own devices, if you're like me, you're not going to do that. It's got to be automatic. It's got to be something where I show up and I perform. Like Dan Sullivan says, you just show up and perform because everything is there set up for you.
Dean: Yes, that's exactly right. We've been talking about the assets that you have, that Profit Activator 3 is the pool of assets that are prospects that have not yet turned into clients, and then in your After unit, that 2,300 or 2,600, did you say?
Joel: Mm-hmm, 2,300.
Dean: You've got 2,300 families under management right now. That process, that is your After unit. When you look at that, the metric that we look for is your return on relationship. If that 2,300 families, there's two ways that that can grow. Number one, they can add more assets, or sometimes people start out with maybe a portion of their assets with you and then they can bring the rest of them kind of thing after you've proven yourself, or they can refer their friends and family or people they know.
That's one thing that you're describing there that you can focus on, so we count that number. That's your Profit Activator 8, orchestrating referrals. We measure the return on relationship as the number of new clients that were introduced by people in your After unit year over year. You set a metric for yourself, but when we look on the real estate side, where real estate agents may know 150 people as the people who know them, like them and trust them, and we're looking to manage that relationship portfolio for a 20% annual yield, meaning that if you've got 150 people, you should be able to generate 30 transactions from that group of people. We see that happening again and again.
Now, when you look at, as a firm, you've got a lot more families under management, like an individual adviser would, because an individual adviser, they may have 150 people more like a real estate-
Joel: Right, an individual adviser, if you can officially manage 200 relationships, that's pretty hard to do as an individual adviser.
Dean: When you look at your 2,300 families there, do you measure a return on relationship that formally?
Joel: We do. We measure it two ways. We measure it on how many introductions we get, how many of those introductions convert, so that's one way. The other way is we measure how much new money those people are bringing to us, which because financially the larger the client, for instance, if you have a household that has $400,000 total in savings that they are able to invest, we may get that right away on the first commitment they make to us, but if you have a household that has $2 million to invest, it's rare that you get that whole thing on the first commitment.
You're constantly measuring, that person might commit to you a third of their assets and then see how the relationship goes, and then after six months to a year, and then you get another piece, and then maybe after two years, you have it all if you do a good job. We're also constantly measuring how much do those people give us in additional funds, which we need to be a little bit more sophisticated in that because there are some people that just don't have the ability to give us more, and we don't really separate that out right now, but we absolutely measure in two or three different ways that yield on our existing relationships in that During unit.
Dean: Then your After unit, because the During unit, it's just proportion-
Joel: In my After unit, I'm sorry. My After unit. My After unit. I keep saying "During." My After unit.
Dean: Serving the people, doing what you do. Do you know any of those numbers in terms of the referrals?
Joel: I know the referral number. I'm embarrassed to tell you. It's way too low. It's about 4%. Last year, we were introduced to about 100 to 120 new households. It should be much higher than that.
Dean: Those were the ones that turned into clients or those were the introductions-
Joel: No, about half of those turned into clients. The other thing that's an interesting dynamic in my business is that our average revenue per client from the referral channel is the lowest of all our other channels, and here's why: because if somebody refers me to their friend or their family member, and they're maybe not somebody that we would normally take on as a client because they don't quite have the assets, we're still going to take them up, which is interesting, but that's just a sidebar.
You've always given me this 20% target. When I look at the fact that 20% of 2,300 is 460, that's the number we're kicking around the office is how do we generate 460 introductions from these people?
Dean: You want me to help you hatch an evil scheme for that?
Joel: Yeah! Let's do it. We've got a little time here. We've got five more minutes or something. Let's come up with some scheme. We're working on it right now.
Dean: This is very interesting because I was in London in June, and it was the fifth Breakthrough that I did in London, and I have this financial adviser there who's come to all but one of the Breakthrough Blueprints there and each year he takes one major idea and focuses on executing that. Last year, the idea was focusing on this return on relationship. He added in the world's most interesting postcard to his group.
Now he's more like a traditional financial adviser. I think he had 140 people that he works with. Single, not a big firm, a single financial manager working with regular people, not high-network people.
Joel: We are, too. We like to say we're Walmart. We're working with regular families.
Dean: Perfect. There you go. He added in the world's most interesting postcard, sent that out each month to the 140, and then when we got back together in June, did the tallying and found that that turned into £80,000 extra business. His After unit had increased by that much year over year. Part of that is that it's so focused on actually orchestrating the referrals, the mechanics of how they actually happen.
I always say that referrals, and you think about your 2,300 people here, that every one of them are in conversation all the time, and that's where referrals happen. Referrals always happen as a result of conversation. In those conversations, in order for a referral to take place, three things have to happen. They have to notice that the conversation is about money, they have to think about you, and then they have to introduce you to those people, connect you.
The thing that we've been doing is using a formula that is the power of suggestion in a lot of ways. We just want people to be aware that these conversations are going on, because if we can get the first two things firing, if we can get them to notice that the conversation is about money and to think about you, and that trigger calling you, that's where the magic happens, because-
Joel: This is great because we're actually using the postcard idea, but we've probably drifted away from this fundamental a little bit because we've been doing it now for two years. That's probably where 80% of those leads that we're getting are probably coming from our postcard, but I can almost guarantee what we're talking about right now, we've drifted away from this fundamental into other things and the postcard's become maybe a little cutesy or so on and-
Dean: Ah, see, so it's just sending a postcard, and there's the thing. Now, having the use of-
Joel: It's saying, "You probably know somebody that needs our help," and it'll have a little comic on it, but I bet it's not targeted enough, I bet it's not specific enough.
Dean: The thing that you want to do, it's not about getting them to refer people, it's about getting them to look like a hero. The reason that people refer anything is because it makes them look and feel good, that everybody ...
Joel: That's Cialdini, right?
Dean: ... wants to be an insider, right?
Dean: Everybody wants to bring things of value to people. When we presence it in a way that is going to let them be a hero, so if you say, what just happened in Connecticut? GE moving-
Joel: GE moved to Boston.
Dean: There you go. A lot of people were forced to retire, right?
Joel: Right. Eight hundred highly-paid jobs in an area where we just opened up a new office.
Dean: Do you think that there is conversation going on about that?
Joel: Of course.
Dean: Absolutely. If we were looking at that, paying attention to what's going on in the news, what might people be talking about right now, so on the back of the postcard, the message would be just a quick note, "In case you hear someone talking about forced retirement or being forced to retire earlier, debating whether they should retire or move, you probably heard GE has been closed, the office there. If you hear someone talking about that, give me a call or text me and I'll get you a copy of my Forced to Retire book to give them."
Now you see what's happening there is you're not asking or expecting your clients to turn into salespeople for you. You're turning into somebody who's giving them an opportunity to be the bearer of a gift.
Joel: Yeah, exactly. Excellent.
Dean: Now, they've had that conversation, maybe the wives were talking, one wife is a family that's under management with you and she's talking to her good friend, and they're concerned because Bob's trying to figure out whether they should move or what he's going to do, he's 60 right now, and do we want to uproot and move everything or whatever. That's a conversation that's likely going on, right?
Joel: Right, exactly.
Dean: Now that your client, Betty, gets this message from you, she remembers that you said that and you've got this book Forced to Retire, and she can text you or email you or call you, get a copy of that book to give to her friend. That's what we're facilitating there. We're not saying, "Tell me to become our client." We're baby-stepping that.
Joel: Or worse, "Give us their names so that we can sic our highly-trained salespeople on your friend."
Dean: Yes! That's exactly it. That's why having them call you or the offer, the instruction be "You call me" or "Email me" or "Text me" and "I'll give you a copy of the book to give to them." Now, again, what's going to happen is, as soon as they email you, that has now done its job. Right now the conversation can be, "Tell me about your friend. Do you have their address? We can send the book and I'll actually send something else along with it," or "Would you like me to send the book to you to send to them? You know Evelyn best. How do you think we could get connected so that we could help them?" Now you're in-
Joel: I love it.
Dean: Now you're in that conversation and you're at least aware that the conversation has happened, because that conversation, I would find the odds inconceivable that among the 2,300 families that you have, especially where you are, that some of those people are not in that exact conversation.
Joel: Oh, 100 of them, 50 of them.
Dean: Now, they're having-
Joel: Absolutely. If it's not GE, it's Aetna or Cigna or MetLife or all the other companies that are constantly early-retiring people in Connecticut and moving to South Carolina or Tennessee. Absolutely. That's why in some ways Connecticut's a tough state to live in ... I hope we're going to block this for anybody who lives in Connecticut. Can you block the podcast for any of my competition in Connecticut?
Dean: Oh, my goodness.
Joel: Connecticut's a tough state to live in, but in my business, it's a wonderful state to be in because it's like your Stop Your Divorce book.
Dean: There's a lot of volatility, yeah.
Joel: There's always a new batch of people that are in this traumatic transition, many times having to make the biggest financial decision of their lives and they want help, and all we've got to do is be the people that are there at the time when they need our help, and do a good job and keep our promises and do the right thing by the client.
Dean: That's a big thing. If I were really going to advise you on the After unit, maximizing your return there, that's really somebody whose whole responsibility to seek out, orchestrate this whole thing, and there's so much room there to go from 4% to 20%. It would be a huge difference to go from 4% to 8%.
Joel: Four percent is $300,000 or $400,000 in revenue, I'll tell you that, so figure out, measure that-
Dean: There you go, it's like $100,000 in revenue for-
Joel: That's 20% of our marketing budget, that's six or eight new employees. That's a huge boost, and the irony is that the cost of this is so low, the hard cost is so low.
Dean: That's exactly it. That's the thing when you look at your cost to do it.
Joel: Here is the thing, and I want everybody on the podcast to hear this, here's the thing: it's a little harder to figure out, it's a little more effort. It's a little harder to do this than throw another dollar at a direct mail piece, and so most guys in my business just throw another dollar at a direct mail piece instead of take a little more time to figuring out when I could be getting a 20-to-1 return or a 30-to-1 return on those dollars, where I'm excited about a 5-to-6-to-1 return on a direct mail piece.
Dean: That's exactly it.
Joel: Let's stop, Dean.
Dean: I think we've uncovered the opportunity for you. Two of them. You got a big asset ...
Joel: I'm excited.
Dean: ... in Profit Activator 3, a big asset in Profit Activator 8. It's all very exciting. Listen, are you going to be in Toronto at our strategic coach session next week?
Joel: I am, yes.
Dean: Perfect. I will see you then and we'll talk a little bit more about it, but I think that's-
Dean: I think we've uncovered it for you here.
Joel: All right. Thanks, buddy.
Dean: Thanks for coming on!
Joel: I really appreciate all that you do. Thank you.
Dean: Awesome. I'll see you next week.
Joel: Okay, bye.
Dean: There we have it, another episode of More Cheese, Less Whiskers. If you want to keep the conversation going, you can download the More Cheese, Less Whiskers book at MoreCheeseLessWhiskers.com. If you'd like to get a book out into the world in the simplest, easiest, fastest way possible, go to 90minutebook.com and download a copy of the 90 Minute Book and we can help you get your book out into the world.
That's it for this time. Talk to you next time.