This week I'm talking with Matt Sellhorst. Matt helps boat dealers make more money and this is a great show demonstrating how the 8-Profit Activators apply to any brokerage business where you are looking to match buyers to sellers as well as finding sellers for buyers.
You'll hear a great 'lightbulb' moment for Matt as he starts to think in terms of 'What if I only got paid when my clients make money'. It's a change in mindset you'll hear a lot across the shows and can be a breakthrough mindset change for you too...
Boat Dealer Profits
Want to be a guest on the show? Simply follow the 'Be a Guest' link on the left & I'll be in touch.
Download a copy of the Breakthrough DNA book all about the 8 Profit Activators we talk about on More Cheese, Less Whiskers...
Transcript - More Cheese Less Whiskers 006
Dean: This is Dean Jackson, welcome to the More Cheese, Less Whiskers podcast where each week we focus on applying the eight profit activators of the of the breakthrough DNA process to a very specific business. This week we have a guest Matt Selhorst. What Matt does is he helps boat dealers make more money and you're going to hear as we do this one of the things that I work very closely with is real estate agents. You'll how anytime you're in a brokering business. Where you're matching buyers, you've got something to sell them and you're also looking for matching people who have something to sell with people who want to buy, there's so many transferable principles here. We had a great conversation, we're a little bit over the hour.
You'll see that one of the greatest things we talk about and you're going to see this a recurring theme, is the importance of being able to document the actual result that you can provide for the people that you're trying to serve. We'll see how when we talk about this, the idea of asking the clarifying question, what would do if you only got paid when your client gets the result. Even if that doesn't become the offer that you actually make just thinking that thought, asking that question, even thinking it silently is going to change the way that you look at what it is that you do. You're going to change the way that you approach things because if all of the responsibility for getting the result was on you and your money depended on it, you would treat it very differently. There a point in the podcast where you're going to hear us talk about that. We're going to go deep into that. You'll hear the lights come on from Matt that he treats it differently when we started talking about it depending on getting the result to get his money.
I think you're really going to enjoy this episode. Let me know if you'd like to be a guest on the show, I'd love to talk with you. You can go to Morecheeselesswhiskers.com and click on the link that says, be a guest. We're helping lots of different kinds of businesses and you'll see that there's so many ways to apply the eight profit activators to the before, during and after unit of any business. Enjoy this episode.
Dean: Matt Selhorst is here.
Matt: Dean Jackson. How are you sir?
Dean: I am good, how are you?
Matt: I'm really good. I appreciate you having me on.
Dean: Awesome, we're recording right now, we're going.
Matt: Okay, well, let's go.
Dean: Yeah. Tell me a little bit about what you do and what's working and what kind of evil schemes we can hatch to that?
Matt: Sure that sounds good. I work in the marine industry. I help mainly boat dealers but some brokers, boat brokers, yacht brokers and do a little bit with manufactures. I help the generate more leads but more importantly I help them develop follow up systems and my main message is, sell more votes at higher margins. In a nutshell what I do with those folks and I do it in a couple of different ways. One of them is, I do a three day boot camp where I bring them in and we start ... It's not exactly based on the profit activators but you could apply that to the way I deliver. Who's your target market? What do they look like? How are you going to follow up? What's your message? What's your USP? Then, it's a big purchase so they're likely not going to make it just on whim so you need a follow up system. I call it the educational spectrum of a boat buyer and how do you push them down that educational spectrum.
How do you get repeat referral business and depending on the service that they offer service business after market parts and accessories, gear, tubes and weight forwards and what not.
Dean: Sound like it kind of sucks so you got a total-
Matt: Yeah, exactly. Put that all together and I deliver it person, in a three day, I do it virtual with an online training. I also have another program that is how to use online video. That's when, I got into the business, online video is something I utilized to generate my own leads, drive my own business and became very successful with that with half a million video views in the year. It made the phone ring the way I did it so I teach that as well as a second online product that's less expensive. What's working is when I get somebody in the program and they implement, they have great success.
Dean: That's what I was just going to say. It sounds like you've got a system that you can get the results for somebody, that's always the first step.
Matt: I owned a mortgage company back way back in the day. Closed it down, '08, '09. I decided things were going terrible and decided to close that down when the mortgage meltdown hit. I got into the business of selling boats because I grew up, five years old, my family got our first boat and from that point on I was a boater. That's always been a part of my life.
Dean: Where do you live right now?
Matt: I live just outside Charlotte North Carolina.
Matt: I grew up in Nebraska just boating on tiny little lakes there and Lake of the Ozarks in Missouri. It's always been a part of my life. When I had my personal crisis of closing down my very first business, my mortgage company and starting over from scratch, I said, "What do I want to do?" I got into the boat business with the idea that I had some good systems, I did coaching in the mortgage systems, I really enjoyed that concept. Why don't I figure out the boat business and take that coaching. I got started in 2009. I got started selling boats with the idea that I would be doing this coaching at some point.
Dean: Using that as a laboratory to figure out your stuff, right?
Matt: Exactly. I had never sold a hard product before, I had never done that before. I needed to figure it out and frankly in my bio, I call myself a no boat selling son of a gun when I first started. I wasn't good at it.
Dean: Right I got it.
Matt: Probably second guessing the hiring to it. I figured it out. I used a lot of video, I used a lot of testimonials. I used educational marketing and I just developed the system that I knew I would be able to implement with other dealers. It was probably, I would say 2013 that I got my first paying client which was actually the dealership I worked at, then I got a couple outside clients. 2014 I went full time, said Okay, let's make this work at the end of the selling season 2014. It's been going okay but I just despite the fact that it's a small market about 3000 boat dealers or so in the US, maybe another 500 or so up in Canada. Despite the smaller market, I haven't gotten the traction that I know I should be able to get. I can generate leads reasonably well with speaking. I write for the industry journal.
I've got a book that I use as a lead generation tool, whether I give it away. With the e-book or sell it for five bucks for the hard book just shipping. I can generate the lead but turning those leads into that high ticket item either online or boot camp has ... I'm missing something and typically I feel it's because I'm not explaining what I do we'll enough.
Dean: That's a good.
Matt: Yeah. It sounds like they want me to say, "Well, what I'm going to do is, I'm going to create a Facebook ad and I'm going to do X for you and you're going to get a tangible thing." Instead I'm saying, "I'm going to show you how to build the systems so that you can install it in your business. Then all of those, the Facebook, the news letter, the whatever the it is you have a framework to build it around and you have a follow up system to maximize the result. That's what I'm missing and that's what I haven't been able to figure out yet.
Dean: How much do you charge for what you've got? The things that people are buying right now, they're buying a three day boot camp for how much?
Matt: The three day boot camp I've been as low as 10,000, 9,000, 995 and as high as 12,000.
Dean: That means that 12,000-
Matt: That's them coming to me.
Dean: Then the online ... You have an online version of that over several weeks.
Matt: Yeah, the online version I have as low as 2900, as high as 4900.
Dean: 2900 to 4900. Okay, is there any one time charge that you ... somebody comes to a three day boot camp and that's it or is there an ongoing relationship or is there an ongoing coaching or consulting?
Matt: From then it's been ongoing sales training because one of my clients that went through the boot camp said, "That's great, we're having some great success. I want you to come in." I set up a quarterly sales training/consulting day where I go down to visit them for one day a quarter. For others it's been just phone consultation. There's not a defined, join my coaching program but it's a custom consulting coaching after that.
Dean: There's the thing and this is something that you may have heard me talk about when people start defining what they do. We're looking through this goggles of this is what I do. I've got this $10,000 three day training or $5000 online training. How can I do more of that or how can I convert that better. Let's just take a step back right now and look that in the during unit. If you were to just have carte blanche to install what you know about the boat dealership business and they would just get out of your way and let you do what it is that you could do for them or under your guidance they do it. What kind of result could you create for somebody? What kind of a ... If you were dependent on your getting paid when they get the result. I often ask that question. What would you do if they only got paid if they got the result?
A lot of that is just, let's take money out of the equation and see what could you create? What's the biggest result that you could create for somebody?
Matt: As far as dollar amount?
Dean: Yeah, however you would define that.
Matt: To me it would be increasing their bottom line by 10 to 20% if not more. Depending on how poorly they're doing some of that stuff. I had one of the clients that went through one of the first after they went through they had a boat show and he called me up and he said, "Matt listen." we had a guy that walked in, saw one of the things we created in the boot camp as a video, USP driven call to action type video with guarantees and that type of thing. They said he walked in specifically to this boat show to come see me and he paid that price that we asked. No negotiation. He came in, said, "That's the one I want, how much? let's do it." Those are the type of result that they're getting to break it down into a hard number. I would say on the conservative side, 10 to 20% in bottom line.
One of the numbers I used for a dealership that sells 100 boats a year, I use 50,000 to you bottom line. It's a number that I use in that context. Is that what you're looking for?
Dean: That is kind of ... That's where I'm going. You're saying that ... basically tour offer right now is come spend three days with me. Give me 10, or $12,000 and I'll add 50,000 to your bottom line that's essentially your offer? Right?
Dean: That's one the ... Do you have a documented track record of that being true?
Matt: I have the anecdotal testimonials. I have that story, case study.
Dean: Part of the challenge in profit activator three which is educating and motivating is that, it's about convincing people that this is ... Nobody is going to do anything until they're convinced that this is a ... That this is likely to happen for them. When you look at that, having case studies, having documented track record of this is something that goes a long way in easing people's minds. When you look at that 50,000 is ... Would you say that that is the minimum that you could deliver or that that is the most that you could deliver for somebody? Is that on the high end, is that on the mid range? What's your confidence level if I said to you, you're only going to get paid if they get that result. What would be the result that you're so confident in that you could risk your money in that way?
Matt: Sure, it's going to depend a little bit on their size. Because that's going to be a difference.
Dean: Do you variable pricing for your event based on their size?
Matt: As of right now no, it's just been a flat, here's what it is. Ina boat dealership of 100 boats a year their unit number. That's a bulk of the market place is going to be that size or bigger. I would say probably 70% of the market place would be there. Yeah, that 50,000 is a number that I think I can hit pretty consistently because I break it down to increase your margin by $500 per boat or assuming a $5000 boat sale, increase your sales by 10 units. That's how I get to that $50,000 number and I think depending on where they're weak is that are they bringing in clients, and strictly price focused, price messaging will then the $500 per unit easy. If they're bringing then in and they're not converting, they're not following up which is a major issue that I see. Then adding the 10 units is pretty easy as well.
It's like you said. If it gets done, if I've got a clean slate of what I paint on the canvas is going to be my system than that absolutely.
Dean: So much of that is is what we always find. Is that you're saying especially when the delivery, the transfer of the information is in a three day boot camp. It's like you're giving them, here's the steps now go and do it. The biggest issue is their execution of it. Getting them to actually do what you know would work for them.
Matt: I do offer the follow coaching that goes a long with both of the program for six or twelve months of, "Hey Bob, did you get this done? Bob how are we coming on the newsletter for this month?" There is some of that.
Dean: Is that included or is there extra that they pay for?
Matt: That included. Because…
Dean: A one year program?
Matt: Essentially yeah. That's the added bonus that I throw in that not only are you going to be here for three days and we're going to create and we're actually going to come up with stuff specifically for you based on my framework but then also you're going to have me for a year of, "Hey, I need help with this, I'm stuck, how exactly did this go again? That comes with it as a bonus.
Dean: Are those scheduled calls or as required? They call you up? Availability.
Matt: I do it as requested but it's me reaching out to them. Typically, the boat business is very seasonal, you got six to eight months depending on where you are in the country to do 80% of your business typically. Most of the time those calls didn't get used and it as me reaching our saying, "Okay, how are we doing? How are things going?"
Dean: On the additional units, the 10 extra boats a year, is there ... Do you have like a vending machine type system where somebody could ... Assume that you run this type of ad, this taking it all the way from run this ad, send this newsletter, send this emails, run this follow up system an that will deliver people just like you mention the guy that showed up and said, "I want this boat and I'll pay the price."
Matt: I wouldn't classify it as vending machine dial bin because it's always there. Just to be ... It's not your get listings program. That quality yet. It's stalled in that it will generate leads in a variety of different ways but the biggest thing in the boat world. If you're looking to buy a boat, there three to seven dealers in most markets. Down in Florida there's probably more but you're going to get the lead because it's such a small market area when it comes to the dealers and broker level in most places. Where I get them is, "Here's a couple of lead generation tactics but it's mainly that follow up system.
Dean: You're mainly picking it up at profit activator three. They've got people who are coming in already. You're saying let's convert more of the people who are already calling in and already inquiring. You're pitching it up at profit activator three.
Matt: Exactly, the video system is the closest thing to the vending machine I have which is video your inventory, do a call to action, pout your USP video and do your donut on the front and the back and actually invite them into your dealership or into your Thursday afternoon boat show. Do that and that will make the phone ring, that's the probably the closest thing I have to the vending machine result in the system on the lead generation side.
Dean: Do you share stuff like that with them like the none word email type of thing? Like a magic trick. I call it at magic trick. If I go into any business and they've got a pool of prospects who have not converted which typically every business has, one of the magic tricks that have is a nine word email that revives the dead leads. We can say to people and actually thing is we did this with a yacht broker who was sending emails to literally a file called dead leads. Sending out an email to these people who had for whatever reason inquired and over six months or longer a year ago and had not bought and were classified as dead. He sent out an email that said, "Hey Matt are you still looking for yacht?". Yeah, he's under contract now for 120 million dollar custom boat. That's kind of a cool thing. I imagine I would want to know for sure that that would be the kind of thing that a boat dealer would be able to use immediately and generate new business. Have you tried anything like that?
Matt: Yeah, that exact concept thanks to you is now in the system as one of the first steps and it's also that language is included in one of the auto responders in the follow up system. Are you still considering a pontoon when whatever boat they're interested in and are you still considering blank Matt?
Matt: I took that directly from you and that's included in the system. Is that on the I Love Marketing podcast.
Dean: Yeah it was absolutely.
Matt: I was going to say, I thought I heard that story somewhere before.
Dean: Yeah, we've talked about that a lot. I use that with all kinds ... We've used it with so many different processes. It works for any business there. How many prospects would you say that a typical dealer has? Do they keep good records or do they have a CRM, do they have just a index card file. How good are they at keeping up with the people who actually walk through the door or a call?
Matt: Not very good. Some of them have very basic CRMs.
Dean: Like an Excel spreadsheet or something right?
Matt: Yeah. There's a handful of CRMs that are marine specific. I did it myself because it was easier. I used index cards in addition to our CRM for different pieces but it's not uncommon to have yellow legal pads and sticky notes as your CRM.
Dean: I got you.
Matt: All the way to some reasonably advanced auto responders enabled tracking systems but the capturing of "Hey, I'm calling in and I'm interested in this boat." "Yeah, why don't you come in on Friday, we're open, that sounds good, bye." They don't even capture the contact information so that's part of my system as well because that's a major weakness in most sales people are overall dealerships.
Dean: Just in terms of some of the profit activator two things that you teach the boat dealers, do you have ads or post cards or magazine ads or online ads or anything like that that you would show a dealer how to use to get new leads?
Matt: I have the video system and then I have the free report that I call the official boat buyer guide. A pretty basic report. Those are the two, I would say the two main ones that you would look at an activator to. No, I don't have a display but I else teach the ... It's more for brokerage but the 25 recorded messages concept
Dean: Do they sell primarily new boats or used boats as well?
Matt: Almost everybody both, new and used and some some consignment or brokerage, however you want to look at it, just semantics there and if they own it or not. The customer doesn't care. Some of them just sell used. It's either new and used or just used.
Dean: The reason I'm asking these kind of things is that I'm trying to look at how you can predictably up the expected return on the investment that they're going to make. If they're going to spend 10,000 and you're going to show them how to make an extra 50,000 that's a different ... It could be a different thing if there was a way to also generate some new business.
Matt: One of the things that's on my project calendar is to actually write a ... I don't know what you call it. How to buy a boat book, how to buy a whatever book that could then be used as ... Like you're saying. Now it's a more predictable vending machine type system. Here's the ads that go with book and we can just adjust it to the market place. That's on my list but I don't have it yet.
Dean: What would be a typical breakdown for a boat transaction? What would be a mid range or typical range of a boat that people would buy and how much profit margin would there be in that for the dealership?
Matt: It drastically varies by market place, but you're going to be looking at 20, to 30,000 on an average size. As you get to the coast, especially down in Florida where in that environment. You might get on average 50, 60 with the dealers that I work with. On those 15% is a very very doable margin. Depending on the brands that you carry maybe as high as 20% on used about 20% typically. That's what you'd be looking. For the entire dealership, they're kind of total profit margins is anywhere from 4 to 6% on sales if that's helpful.
Dean: I guess what I'm looking at to break down those numbers here is to see that if somebody is selling a $30,000 and they've got a 15% profit margin. There's $4500 in there, what would they cheerfully pay for a buyer. Somebody who bought one of those boats. If you're looking at dividing up the pie of that $4500 knowing that they've got a pay, they're over head in their costs there's about a 4 to % profit margin. What would they allocate that for sales and marketing allowance?
Matt: In their head, what they've been talking the industry is to invest about 4% of your sales in marketing as a whole. If you actually talk to them and you say, "What would you give?" "I'll give a $500 rebate or discount to this customer without blinking an eye." I would say $500 would be an easy one. Maybe as much as stepping 50. They don't think of it in terms of investing for the cost of a lead but they would give that discount in a heartbeat. It's the context that they look at it so I think I could make the case of, "Listen would you give this customer a $500 discount on this boat if there were negotiating?" Sure. I wouldn't even think twice of that but to invest $500 for a predictable lead system you just have to change their perspective of that $500.
Dean: What do they do primarily for their lead generation right now. Are they just being known as we've got the boats and we've got a sign upfront that we advertised in the Bass Fisher newsletter for your county or whatever. We sponsored the parade or whatever. They're just doing institutional type of things?
Matt: Exactly, for a lot of them, Grandpa Smith has been here for 70 years and that's just known as the boat place.
Dean: If you're going to get a boat, that's where you go and it's not like there's a boat dealer on every corner.
Matt: Yeah. Some of them are getting pretty good at some online stuff but then it's just institutional banner ads of the manufacture of logo and their logo click to go to their homepage so that about all you see there. They'll invest $10 - $50,000 to attend the boat show in their region and they'll do that because that's just what you do. That's where you get most of your leads from and that's what they've done for 50 years. Then you'll still see a little bit of display but all very much institutional. The dealership I was at when I brought in my style of marketing with online videos with reports and with newsletters, that was all just boring to them and they thought I was insane. Especially my first year when I was sucking it up, it's just it's not common to see anything like what you teach and what I teach.
Dean: The good news is that I guess that part of the advantage is that all of the boat owners are licensed and registered so you can get a list of boat owners. In terms of who owns the used boats.
Matt: In 15, 17 states you can get those lists. The other states they don't release that information.
Dean: I got you.
Matt: Or I haven't figured out a way to get it yet, its not readily available like it is in15, 17 something like that.
Dean: The reason I say that is because we were able ... I have a friend here who teaches barefoot water skiing.
Dean: Lane Bowers.
Matt: Yeah, there you go.
Dean: We were sending postcards to registered in board boat owners, 16 to 24 feet. That was pretty readily available lists. If you're saying in about 15 or 17 states, if you're in a state that has that you can do that. I'm wondering that thinking what would be the turnover rate of somebody who has a boat, how often do people upgrade their boat or get a new boat or get new boats? Is it like cars where they get a new one every three or four years or is it something they one time get a boat and then drive it till it springs the leaks?
Matt: Boating is something that a lot of people get involved in and they only own one boat. There's probably another ... This is just ball park guessing but that's probably 30% of there market or so. They get a boat, they keep it for five years and the kids graduate school and they sell the boat or something happens and they get out of it or they get into horses or they get into their next activity. There's probably 50% that if they do continue on to another boat it's five years maybe that they own it. I'd say that's a reasonable average number, five to seven years maybe. Then there's the other ones that's probably another on the back end, 20%.
Dean: Is it like cars where they might come to a dealer and trade in their boat or do ... Is that how the dealers get their used inventory?
Matt: A lot of them. If it's a smaller dealer and they're not financially able to buy the boat outright, they don't have the resources, then they may say, "Hey listen, we'll sell your boat for you."
Dean: Take it on consignment whatever.
Matt: Yeah. Then you buy the new one so they'll broker or consign it for them.
Dean: Okay, let me recap what you got so far then. You're ... I understand now why you're focused on profit activator three forward for them and converting the number the prospects that they have. How many would a typical boat dealer have in prospects that have not converter like in a profit activator three situation?
Matt: Let's three years worth of leads, they're getting in the busy six months. 100, 600. Let's say 2000 leads. Does that math that up?
Matt: Yeah, let's say 1000 leads after three or four years of generating. 500 of those got captured, 500 of them escaped because they didn't capture contact information or write anything down. Let's say there's an opportunity for 1000 leads after four years or so of generating them.
Dean: That is there. One of the things that's going to help you help them is having some standardized metrics that they can benchmark against. If you can show like on the real estate stuff that we do. One of the things that gives me an advantage is I have standardized metrics that I can show somebody running our system versus what the reality is on there's. If they've got 1000 prospects and they sold 100 boats then just on, that means they've got a 10% let's call it return on prospects. Their asset that they have, the portfolio that they have is these thousand prospects. Each year their converting. If they sold 100 boats this year they got a 10% return on prospects. If you can show that using your system, that somebody is able to get a 15% return on prospects or some number higher than that 10% and they may even have less that 10%. It give people a framework so they know what their aspiration is.
They know where to go. That would be a before unit metric. In the during unit, the metric that we use on the real estate side is very similar. Being a broker or a dealer in something where there's a buy and a sell side, the boat business is very similar to the real estate business in that way. When you're talking about increasing their margin, I’m assuming one of the things that you’re showing them how to do is to get the upgrades and the ancillary purchases and maintenance program one warranties and all the stuff that can go along with it. I’m I right?
Matt: Yeah that’s part of it absolutely.
Dean: What else goes into improving that number?
Matt: One of the biggest factors is how do you present price because it’s very much a negotiation game. The consumer comes in thinking it’s like buying a car. They are already nervous that it’s going to be just a battle. A lot of, a lot of the sales guys let's say that MSRP is 50,000. They’ll sell it for 40. You come in and they say, "Dean how much is this boat?" "Well Dean this boat is $40,000." Well okay so now you’re starting you’re negotiation from 40 and you want to get it for 35. What I teach them to do is, "Hey, this boat is 50,000 dollars here at Max Marine. We discount it down to $40,000 upfront because our customers appreciate that. Now you start at 50 and now you go from 40. Maybe you go down to 39.5. The prospect isn’t think ... That’s a big part of it. The other is just creating value with one of my clients that has the best success. There is a seven day money back guarantee. If you don’t like the boat we’ll buy it back within seven days.
In putting pieces like that into the sales message. It’s not just, "Hey, you’re looking strictly at fiber glass or the aluminum." Well, I'm comparing it to a guy down the street that’s a cheaper model and it's really hard to tell the difference. Putting some other things that are on the dealership value side should build value and to make that negotiation less price sensitive. In addition to have a sheet at the end of "Do you want the extended warranty? Do you want the service plan? Do you want to store it with us? Any of those other products that they offer and the combination of all those to get $500 on a $30,000 boat is pretty easy even if you just did one or two of them.
Dean: Got you. Then in the after unit do you have a metric for them to measure their ... I call return on relationships of the people who’ve already bought a boat. Some percentage of them. I imagine in the after those the opportunity to do the servicing, storage just like you said. The repeat business, referral business. Do you have strategies to teach them how to maximize their after unit as well?
Matt: Absolutely, it’s a follow up system. After the boat is delivered and sold asking for repeat business offering service specials offering. Reasons to come back into the dealership for gear or for events or any time as you would imagine. Anytime you can get them back into the store after they own a boat it’s pretty easy to get them to buy a cooler, to get a t-shirt or to look at the new weight board. I mean that's pretty simple. Once you just get them back in. events and things like that for appreciation and stuff but I don’t ... pointing this up quickly in my head. I don’t have metrics, it’s all ambiguous. I’m going to help you get more repeat referral business service.
Dean: There’s the thing, that’s the big thing that can make the shift is that when you have that metrics. I know with our realtors I’ve got documented case studies for years of people. What we look for in the real estate agents after unit is we look for a 20% annual yield from their relationship portfolio. That will be all the people that they’ve helped all of their clients and the people that know them like them and trust them. We have a strategy, a tool called the world’s most interesting post card that we mail to that top 150 on the back of the card every month is a referral stimulator. There is a different thing just a quick note just in case you hear someone talking about this, buying their first home. Lots of times that back to ... People want to buy their home before the end of the year. If you hear someone talk about it give me a call or text me and I’ll get you a copy of six steps to home ownership book to give to them and give them all the steps involved in buying a home.
Every month, sending those things. What we’re looking for is measuring that return on relationships. If they’ve got 150 people and in the last 12 months they got 15 repeat and referral transactions. That would be a 10% return on relationships. Our goal, the benchmark that we’re looking for is to get them to a 20% return on relationships. We’ve seen that now just documented case after documented case of people doing no other change but sending the world’s most interesting post card and getting 50% or 100% or more increase in the amount of referrals that they get. Depending on what they were doing with their clients afterwards. That’s probably what you find with these dealerships. They either don’t have any communication with them or some of them have real, real orchestrated nice systems that they use to keep in touch with people. The reason I ... Go ahead.
Matt: I just going to say that very few of them have that in place. How have you coached your folks to, to keep track of that? It can actually have the documented stuff.
Dean: Yeah, of course. The first thing they have to know who their top 150 are. These are the people in the real state world. We teach them these are the people that if they saw them at the grocery store they’d recognize them by name and they’d stop and have a conversation with them. Most people have a 150 people like that. Now that would be a strategy that would work for a boat sales person. That the sales person has a spear of influence of people that they know. That’s like if a typical dealership may have I don’t know how many sales, people would they have maybe two or three sales?
Matt: One to three.
Dean: One to three. That would be the thing helping them tap into their sphere of influence that if they hear someone talking about buying a boat or teaching the kids to water ski or going fishing, taking up fishing or tubing or any of those things that might be stimuli for somebody buying a boat. You want your clients; you want ... Not clients but the sphere of influence to be on the lookout for you. To remember that you sell boats and whenever somebody is thinking about it, that they will introduce you to that person. That’s going to help them get referrals from the people who know them, like them and trust them. That thing, I mean if you look at that as a case study, this is what I would really encourage you to do now is, is to start documenting the stuff that’s happening so that you’ve got ways to show people this is what happens. We started here and we went. This is the result that we were able to get.
A lot of times you can backdate this stuff in your mind. If I ask people and I could ask you the same thing, if you had 10 people, you’re the last 10 people who’ve gone through your training, what result did they get? It’s always a question to ask yourself is what did they ... If I was saying I’m only going to get paid when you get the results, how would you have done on your last 10? Just anecdotally do you think I mean just looking back and thinking about the last ten. If we are 50,000 is the over under, what would you be the on the last 10 people? How many got over 50 and how many got under 50?
Matt: I would say just based on their, their happiness and wanting to do additional stuff and our conversation I would say at least six or seven of ten. I’ve not done on anything about specifics revenues because I haven’t thought about tracking that with them.
Dean: Well done, there you go. That might be a good thing. Then if you looked at the three or four that didn’t and that’s a good rate by the way right now you’re getting 60% or 70% of the people to get a five, five X, ROI on what you taught them. The truth is that that ROI, that’s just first year return because they’re still going to use the same systems next year if you charge that out over, over five years there’s going to be a big multiple of it. Do people pay you upfront or do they pay you monthly?
Matt: For the programs are all upfront with a year guarantee. I should say the boot camp is a little bit different for that I do the boot camp a guarantee of ... If you’re not happy; if you think I’m a fraud after the first day then I’ll give you all your money back and pay for your flight home deal.
Dean: It’s not a performance guarantee per se but you’re convinced or not guarantee. Right? You’re convinced that this is going to work.
Matt: Exactly. You spend a day with me and we go through the first day worth of stuff and if you’re like, this guy doesn’t know what he’s talking about. Here you go, here’s your money back but obviously nobody’s ever done, taken me up on that.
Dean: Because you show them it’s pretty convincing.
Matt: They see a lot of holes in the bucket.
Dean: Sure. Your profit activator three, which is what you mentioned is probably the big opportunity for you. You’re profit activators in converting your leads into people who will pay you 10 or $12,000. What is the conversion rate that you have right now? How are you doing on your before you? How does your before network?
Matt: I’m done awful. It’s, it’s terrible. My before unit I’m bringing in a pretty consistent flow of leads in the off seasons. With the speaking that I do I get big, big flood of leads during those. I would say I probably have five or six hundred leads that have come in from one former or another. With that there’s several non decision makers. The marketing person has called in or somebody that sells a marine widget that found me from my, from my articles or somewhere along the line. I'd say are those probably 400 are legit good leads. Looking at about 40 sales, not all of them on the high end some of them being the smaller programs but yeah, pretty in my mind, pretty terrible.
Dean: Part of the saying that you’ve got here is that, do you have a list of your prospects or do you have the ... How big is the list of people that you could send an email to or send a post card to today?
Matt: There’s just known targets, about 3,000, yeah known targets about 3,000 with-
Dean: Have you done that? Do you any kind of post cards, direct mail or email or any?
Matt: Yeah a combination of I’ve done. Just emails, drive it into a webinar, emails driving to a strategy session. Our consultation that turns into a sales pitch. I’ve done direct mail post cards to them. I’ve done lead generation mailers where I offer my book for a discounted price or a free e-book. I’ve done those to that list in usually groups of 500 to a 1000 as I try to figure out what, what segment of the market was interested in me. Was it the little guy, was it the big guy, was it the medium guy?
Dean: Well good and what do you know about that so far?
Matt: It tends to be the small to medium guy that are ... I haven’t figured out how to find this but that are on the second or third generation of ownership. The 40 years in the business still control of things with the son or daughter position to take over and haven’t had any success with that person. The recently, took it over from the previous generation had had good success with those people. I just haven’t figured out how to find out ... It makes sense when I think about it that they just took over from dad or from father in law. He was doing it all wrong. I’m smarter I’m going to do it my way and this is one of the things I want to bring in. We’re open to changes. The psychology I think that’s going on.
Dean: Yes, yeah, modern marketing for both dealers.
Dean: I mean that’s really a ... That’s the thing from where he is going to- How to get back, how to get up the speed on that. Do people mostly take your courses during the off season? When do they, like farming in away where they're rich in the summer and poor in the winter and-
Matt: I look at it like for the tax people. Is don’t contact them from boat show season which starts anywhere from January, February but my line is March. From March to and were getting into, all right they are hitting Labor Day. Sales are pretty much done completely but you know they hit their big sales from March to September and then depending on where in the country they may start getting winterization and haul out business. From that August time frame to the February again it’s now I can sell. I’m in that time right now.
Dean: You’re saying you can sell now, is that because they have money or is it because now is the best time to really make a difference? When is it?
Matt: It’s more they have the time. It’s more a function of they have time to have the conversation to my mailing. This is when I first got started I sent some stuff ... Being in it myself, I knew you’re going 100 miles an hour from those time frames. I did some cold calling just into the dealers. I would call in June and they’re like, "Do you know anything about this business. I’m going a 100 miles an hour right now. I don’t have time to talk to you about anything. I don’t have time to learn anything new and create systems." They do they are fresh with cash now but they’re going to make it through the winter without anything. They’ve got the time finally to think about it, talk about it but also they implement. It’s all, all of those things.
Dean: I think there might be an opportunity for you to, to test out an approach here to ... One of the things I did with the real estate agents with our money making websites project was having what I called project Cyrus. While we were setting it up so that we would take them through the whole training program. We would go there websites build all the systems teach them all the systems that they needed to know and then they would pay when they got their first transaction. Immediately that removed any of the friction in getting started. I was asking earlier about magic tricks for you. Are there things that you can do that would create an immediate win for them? That would get them some cash that would help ... That they could document as I got this because of this guy. They're almost playing with house money. I’ll read you something because this is just so perfectly timely.
Yesterday afternoon I’m driving to Orlando and I got an email from a guy who we have a system called gogoagent.com for realtors. Which is the auto responders, landing pages, toll free voice mail, texting, CRM and all of my getting listings program, finding buyers program, getting referrals, all of those things wrapped into it. I offer people a 30 day free trial. No credit card, nothing just come on in; try it out for 30 days. This guy emails me just yesterday. He says, "Hi Dean I have some exciting results to share with you. I researched and compiled data from my MLS on 20 neighborhoods with the highest turnover rates. Goal of generating 50 seller leads within 30 days, launch for getting listing post cards campaign on three neighborhoods. I sent 400 post cards to a neighborhood with a 16% turnover rate of which 20 people responded for the report. Two of those 20 asked for the pin point price analysis of which one converted into a listing appointment where I secured the listing contract.
Then he planned out a strategic lunch campaign for the new listing which is the things that we talked about in Go Go Agent. Got a collected names, emails and phone numbers of over 20 buyers, received an offer within 24 hours, accepted within 72 and we’re set to close early next month. All along I’ve been tracking every detail because I always tell people to track everything. Total spent 1387, total commission 7854 and I’m still only in the 30 day trial of Go Go Agent I suspect I’ll be able to convert a few of these buyers into clients and match them to the other 19 fellows in the neighborhood. I’d say your system works really well being now I’m just playing with house money. See those are the things that ... That’s why I talk about as if you can get people ahead of the game, that’s really where ... Now this guy, is there any reason that he would , at $79 a month Go go agent.
Now he’s made already 100 times that month. If it's $79 a month. He’s made a 100 month’s worth of return on that without even having to break the first month yet. That’s where I was asking you if there’s some way that you can help people get the results without their risk being or their barrier to entry being the $10,000 or $12,000 upfront. The good news is that what you’ve got one of the biggest assets that your cost of getting results for getting the results for somebody is virtually nothing. You don’t have any hard costs involved in delivering a virtual program to get somebody a result. That you’re sharing a detailed plan of what to do. What I … One of the things that you have to keep in mind is that this was a big insight that I had when I started asking that question. I really seriously think about this for you asking that question, what would I do if I only get paid if they get a result.
It just starts to think about I know that first of all was this strategy is a sure fire thing. This is a guaranteed result getter. If they just do this I know they are going to get that result. What it also gets you to think about is this person is the highest likelihood person that’s going to have the best results. You’ve already identified. When I started doing this with the realtors, I identified that our ... Where people run in into a challenge or people don’t get the results is that maybe they’re in a market that’s too small or there’s somebody who brand new to real estate. They don’t even have a clue how to work with people if they had people to work with. Or they’re too busy as a real estate agent that they are going to delegate this to somebody else on their team. They don’t personally work with buyers and seller. I found out that our best thing is I really created this crystal clear picture of who are our ideal client is.
I would send out a PS in my ongoing communications with them in my weekly email to them and say PS I’m starting a new pilot program next month and I’m looking for some very specific people. If you live in a market of more than 20,000 people, you’ve been in real estate for at least one to two years, you personally work with buyers and sellers. You’ve got time to work with two new buyers a month starting next month and you’re friendly and coachable and you can keep a secret just respond to this email. Put project Cyrus in the subject line and tell me a bit about your business and I’ll be selecting people this weekend. That got this flood of people who will say I’m this and they go down the list of all the reasons that they qualified for this. It was just there’s zero friction in that. This is where I say my biggest insight out of all of that was that it’s ... Sometimes it’s less expensive to get somebody a result than it is to convince them to give you money to get the result.
Dean: It will take you less time, it will take you less time and effort and expense and resources to get somebody a result than it is to convince them to give you $12,000 to get the result.
Matt: I think that’s genius. I thought about it before and I keep getting hung up on. How do I ensure that they do it because they are not going to get the success if they don’t do it. Do I need to get to work and say I’ve got a ... It has to be such a braid dead simple easy strategy that they can’t hardly screw it up. I've got to do work to-
Dean: Now isn’t it interesting how your whole tonality changes? Your physiology and your attitude changes well now because your money is on the line, you feel now I really need to make this so simple that anybody could do it because my money is on the line. Whereas when you are getting the money upfront, you take a more lazy fair attitude about it and you say, I've laid it all out for them. I can’t-
Matt: You just get it-
Dean: If they get it everything will be fine and you do that external brain shifting where we kind of ... That’s comforting. Somebody needs to think that you are doing that but the reality is you're going to make so much more money if you can help people actually get the result. Regardless of whether you go all the way and make it a contingent relationship and you maybe ... It’s going to help the way that you think about it even if you just ask those questions silently. If you don’t articulate it this is the way we do it, just thinking like that. Like I heard your whole tone of voice changing your whole, everything changes when you are now working on your behalf to ensure that you are going to get paid, it’s different.
Matt: I said it and I was almost like oh my God if my clients heard me. I got to make something that actually works easily and simply. Hey that’s right, that is important because it’s always been in my head like-
Dean: That’s going to change everything.
Matt: It really does, it really does and saying it out loud, I've heard you talk about this before. Actually talking about it and saying that I got to make something that’s simply and easy for them that will make me sound like a damn ass.
Dean: I think you probably ... The best way to experiment with that in a safe way is to do a pilot program that you are not announcing what's happening. You are not broadcasting to everybody that this is what we are doing, but you hand select. Maybe you’ve got people right now who were on the fence who've inquired about your training and are maybe hemming in hind and you know that part of the reason is the money that there's that delay that they are just not convinced yet. Maybe you have some kind of off season program that you do. I'm assuming your result to the fact that they are not buying as much on the off season as they do immediately after the season kind of thing. Like you just said your go zone is the fall and it’s not January and February and March where they are conserving and waiting now till they get to boat season.
Matt: They are saving up energy to get into the heat of it.
Dean: I think that if you take that, part of the thing, the reason I called that project Cyrus is because of I read about this guy Cyrus McCormick who invented the reaper. In the 1800’s and he had this machine that would allow a farmer to do the work of 14 men. The machine was expensive and the farmers couldn’t afford it. What he did was he let them use the machine for the season and pay him after harvest. He was deferring his payment until they got the result which was more profit because they cut back on all of their labor and then they had the money to pay for the machine. The same kind of thing. I think what you find, if you do this as a test program with people who are on the fence on the period where you wouldn’t normally do a program and have them be able to pay you some kind of deferment or some kind of a pay as you profit type of program, that people are going to be beating down your door.
Every business on every level has 100% availability to take money into the business.
Matt: Doing this to me my initial plot is I need to drive this people to have a conversation with me so I can hear what they are saying and develop it into a system down the line would initially have it be that manual conversation of here's what this is all about, here's what I expect from you. You are going to need to put in some effort we are going to do it together we are a team here but I'm going to take all the risk all you have to do is put some of the effort.
Dean: Step one for you is to think it on paper first like to start ask yourself that question. If I was only going to get paid if I get the result, what would I do? That’s going to immediately clear out the fluff. It’s going to immediately get you focused on thing that’s actually is going to make the biggest difference. If there's anything that you can do for them, you got to figure out the way to facilitate that because it’s something that required to get done but you could do it. You got to figure out a way to make that happen. That way-
Matt: The magic email is in my very first module of hey, pull out your old leads and get this out like they won, that’s a simple one but the next would be one of the postcards to their current boat owners that have owned for three to five ... Three years or more that are still owning that same boat. One of those two is going to hit something for sure.
Dean: There you go, those are two things for sure that you've got that now they are all ready ahead, that makes a big difference.
Matt: I have been just been racking my brain on what I'm missing and I kept coming back to my sale skills are weak because I do it a lot on the phone but putting it in this context doesn’t take much sales skills to give something away.
Dean: Exactly and that’s the thing that’s just-
Matt: I've got those.
Dean: You know what, people are far less attached to future money than present money. They are much more generous and optimistic for their future. That’s why you look at everything. We are in the middle of 2016 right now and you are all ready hearing furniture ads there are no payments till 2018 which sounds like a million years from now. I’ll be rich by then but I want all this furniture now.
Matt: All right so those … focus on those two and I think create another one or two that depending on the market. The other thing is depending on the timing that they do it, this will work a lot better in March. Any of my strategies will work better in March, April May than they will in October, November. Do you think I need to consider that when I start send them in the program?
Dean: Yeah you start looking ... I think you look at all of this and say, what would I do if I'm only going to get paid when they get the result, when’s the best time to start. Because some of it is going to be based on the calendar.
Matt: Yeah okay. This is fantastic. I was excited that you selected me to be one and just a quick thing is I wasn’t planning on submitting to be on the show. I was like he's got so many coaching clients, he's got so many folks that are in this system he is not going to pick a guy that is having such problems and so stuck but this has been fantastic. I appreciate.
Dean: No I appreciate it.
Matt: I recommend everybody to put your information in you just never know. Write an email out of the blue.
Dean: Well yeah there's the thing. It’s like that’s the great thing about this kind of podcast is that there so many people who are listening who are in exactly that situation. They are just getting things going or they might think I'm a small business and it all works, it works on small business and big businesses. I just love applying them. I appreciate you being so open and willing to share and let’s stay in touch. I want to hear about how this all works out.
Matt: Yes I will absolutely do that. Dean I certainly appreciate all your insight, this has been fantastic.
Dean: Thanks Matt
Matt: Now it’s time for me to get to work I suppose.
Dean: There you 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 an download a copy of the 90minute book and we can help you get your book out into the world. That's it for this time talk to you next time.