Rapid Niche Development with John Logar

Source: GeniusDen archive transcript checked against the recording. Administrative opening and closing material is omitted; the presentation wording is otherwise preserved with light readability edits.

I'm missing out on, thinking about who's actually going to buy or invest in this product or service that I'm creating. There are so many ideas that are sitting on shelves in the startup market that will never realize their capital because they forgot to actually speak to the customer. The person who's in love with it is the person who's creating it. What I'm suggesting is don't fall in love with the product, fall in love with the market, right? Because that's going to give you your opportunity for growth. So the fundamental mistake is who is it, and you need to define that very, very clearly. In the [product name unclear] scenario, I could go to several markets with the product that I developed that does follow up, right?

However, I targeted financial markets that have investments that they're packaging between 10,000 and 50,000 plus. So that niche there, can anybody guess how many financial planners are in the United States? 1.2 million. There's probably about 500,000 US. This is not too bad, about half of that, right? They're very easy to find. They're really easy to find. Really easy to talk to. There's already market access. On a global level, there's more than about 2 million financial planners on the planet, registered financial planners. So these are securities registered that would ideally benefit from this specific product. However, this product also works in service-based markets, or markets where you generate quotes or RFPs, right?

It's the same sort of product. Now, if I was launching this product, I could say this works for anybody that does this. The problem with that is I dilute my message. The reason why I chose financial planners is because they understand conversion. They understand that they're writing deals all the time, and because they're writing so many deals, they never capitalize. And one thing they don't realize is this concept of opportunity costs. So let me explain. Do you know what opportunity cost is? For those of you who don't, it's a really simple concept. So if I had 10 people come to me and I pitched a $10,000 product or a service, and only two of those people bought, my conversion rate would be 20%.

So 10 people came, looked at a $10,000 product and a pitch. I mean, two people bought. The opportunity cost is the $80,000 that I missed out on in conversions. So my strategy is to minimize the opportunity costs where the real profit is. So here's the funny thing about the math that I just shared with you. If we have a person who's converting two in 10 deals, if I just convert one more deal, I've increased the revenue of that business by 50%. Does that make sense? So if I improve the conversion by 40%, right? So all I'm doing is, sorry, is a 10% conversion or it takes you a 20% conversion. If I double, if I get two more deals and take that to 40% I've doubled the revenue of that business.

So [product name unclear] operates on the principle that if I'm at a minimum level, if I can convert one more deal at a high value item based on an average of a 20% conversion, I will give you 50% more revenue in your business. Good proposition. I'll even guarantee it because I know it works. And the reason why I know it works is most people in the market, in this, in that side of the business, never communicate or never follow up or never re-engage the customer that they've actually shown or shared a deal with. So if I have a system that can take care of that for you, you don't have to lift a finger and it can actually generate 10, 20, 100,000 plus every week for your business, multiply that over a year, multiply that over five years.

Would there be anybody who was in the financial market that wouldn't invest $12,000 to $24,000 a year for that service? Right? It's a no brainer in terms of service. So know who your market is, clearly define who will benefit from that market, understand their motivations in that process. It makes it a lot easier for you to penetrate and sell your product for service. So I just want to share this particular group. In the United States, it's also a global organization. And this is an association for association executives. There are 10,000 niche markets that this association is responsible for. There are 10,000 CEOs, CFOs, and CIOs that are members. There are more that actually globally, I think they've got about 300,000 members.

But all of these people are leaders of the largest communities in the world, both not for profit, profit, government and corporate. Right? So this is one of the largest bodies. If I was looking for a niche market, and this is a market that either has money or has opportunity, I would look at the list of this particular group. The association is the American Society of Association Executives—an association for associations, basically. Right? That's essentially what it is. But the funny thing is, in the public area, there are also faster ways to access research and markets that are readily available. It's a very expensive website. It's called the Google, right?

But if you actually ask it to search for some specific things for you, you'd be very, very surprised at how fast you can find buying markets. So I'm going to share with you a couple of things. Where do they hang out? The people, your customers, you've got to find out where they hang out. Right now, from a social perspective, social media is an easy place to connect with your client base. If you're looking for professional markets, you're looking at LinkedIn. If you're looking for consumer-based markets, you're looking at Facebook. Right? If you're looking at foreign markets, you're looking at Ning. You're looking at other types of social networks that actually have large connections.

So, for example, if I wanted to test an idea in a niche market and I work in the consulting world, one of my businesses is to help consultants launch their businesses and target much higher value customers in a consulting world. My niche market sits in a group of 180,000 people in LinkedIn. I don't need 10,000 customers to make [unclear amount] in that market. I only need a handful of people that like the idea that I'm sharing, but I can literally directly go to that market and directly access by just using one social media application. So it's very easy to get into decision-makers or people who are actually purchasing products or services for your markets or for your products in the market.

There's no shortage of customers and social media is inexpensive enough to be able to access those markets to actually draw them in so you can create a platform, build authority and connect with the market. So, I'm going to share two lists with you. The reason why I like these two lists is they come from a very public forum and this is the Inc. magazine that you can see online or Inc.com. They publish two lists every year. They publish the fastest growing companies in Europe, the fastest 5,000. They also publish the fastest 5,000 companies in the United States. At the moment, they haven't released the 2015 figures that we do have the 2014 figures.

The thing I like about this particular list, these 5,000 companies, 2,500 of these companies are turning over $10 million plus dollars. Their average growth rate in their markets goes from 50% up to 480% in the last three years. Can you imagine the pressure that you would incur on a 100% to 200% growth rate every year, three years running as a business. In terms of potential buying markets and customers, this is a great list to get a hold of. They actually give you the name of the company, how many employees there are, the company's website, what industry they're in, what city they're in, what location and what their growth rate, what their percentage annual revenues are.

The thing I like about this list is not who's on this list. My question is, who's not on this list? Because these people only represent a small portion of the market. So who are the competitors of the same nature or the same kind that I can go to on this list? And the beautiful thing is that this steps out the growth pattern of the fastest growing industries or niches on the planet. In Europe right now, energy telecommunications, insurance, real estate, and environmental services are the five fastest growing trend markets in the world, in that Western world. So it's telling me that that's where the growth and the pressure is and that's where the attention is.

So within those five categories, I'll guarantee you there's probably a thousand sub niches that you could go after with a product or service in the market. Does that make sense? Okay, so here's the American list, which is a very different list by growth. The fastest growing markets in the United States are consumer products and services, really interesting. Advertising and marketing in and of itself is one of the fastest growing trend markets in the US. Surprise, surprise with the advent of digital media or digital marketing. Government services is a huge growth market. So this is where government enterprise is looking at developing opportunities within the US and also energy is in a top five.

So again, some correlations in terms of real estate, media and health are still in the top 10 in the US. So between two different Western markets, you can see where the growth trends are. If I see growth, I see opportunity. Because if there's pressure going into those areas, then that means that there's forward movement, there's plenty of money to be collected in those markets. And the other beautiful thing about this list is it's telling you who's got the greatest problems because the pressure of growth in any market creates the most significant challenges that people have to overcome. So if I was developing application software, innovation, technology and ideas, I'd be looking at the top 10 markets of the fastest growing over the last three to five years.

And this list will probably change variably over the next five years because a lot of the social niches are going to start to come through in terms of markets. So in terms of finding markets, really easy. All the data is free. Remember that expensive website, the Google, right? It's all free on that website. So why should I buy from you? If you're building a company or building a startup or you're providing a product or service, this question is the question that you want to answer. And the two words that you want to avoid are quality and service. There are two words that you do not want to have come out of your mouth that we provide great quality and we provide great service.

And the third word is value. We give great value because guess what your competitors are saying? We do great quality. We give great service and we're awesome on value. If somebody says you are awesome value, they're looking for the fastest way to the bottom because they're telling you that they want to be the cheapest. Here's a funny thing. In Australia at the moment, Pizza Hut, we know Pizza Hut here is the US organization. There's a large food chain. In Australia, we have also Pizza Hut franchises. And this really shocked me that Pizza Hut corporate headquarters, and I don't mind making this a public statement, by the way. Not that I'm going to get sued, but here's a perfect example of trying to penetrate or trying to compete with the market.

Anybody heard of Domino's Pizza? Yeah? Domino's is Pizza Hut's nemesis in Australia. Their marketing and their engagement of customer engagement is phenomenal. Their cost on product is very, very good. Their margins are fairly strong. Pizza Hut wanted to penetrate, wanted to compete with Domino's. So the only way that Pizza Hut in their wisdom, I'm talking about people who are supposed to be smart at what they're doing, their wisdom was let's sell a pizza at under $5 per pizza. Let's do that right across the board. But if we sell a pizza at under $5, so it's actually selling at $4.50 for a pizza, for a large pizza, we're losing 50 cents out of every sale for every pizza that we sell at $4.50.

So 23 franchisees closed their doors within six weeks. They couldn't sustain that loss in their business because every time they're ordering stock, every time they're ordering supply, they're having to pay a supplier a debt. As opposed to making any form of profit. So pretty soon the game of, let's be cheaper, put you out of business. Now here's a sad part of this scenario. Pizza Hut's not out of business. They still get 6% franchise fee regardless of whether the pizza is sold at costs, under costs or at profit. So the only people that they're hurting ultimately is every pizza store that shuts down basically starts eating away at their 6%. But I cannot believe in today's age that price war, the price differentiation was the strategy that they thought that they could buy the market with.

If you ever go down the path of trying to value what you do, always whatever price you select, up it by 20%. If you go to say this is what it's worth now, just stop yourself before you say that and put 20% above that. And that's probably going to be a more fair indication. In my recommendation, when I work with a lot of people in a consulting game, I tell them double their prices. Because nine times out of 10, the customer doesn't understand what the product or the service is actually worth. We as owners of our product and service undervalue what we do. That's the danger. So if you've got a company that we are trying to look at pricing and margins, I always say push it up.

The market will tell you whether or not they will afford or not afford your product or service. That's going to be based on their perception of value. But this question of why should I buy from you, that's your point of differentiation that you want to create. So if you deliver in a certain way, you want to articulate that deliverability. If you are a fast distributor, you need to articulate why and what's the benefit of distributing quickly? If the value is a proposition, now let me give you a perfect example of value. Anybody who bought a Louis Vuitton handbag in the room? We've got Tom over here, just want to know the handbag, probably for his wife.

They never discount their product, ever. In fact, the only thing that happens with their product is it actually keeps going up. They never hold sales, ever. In the history of the company, they capitalized to $2.8 billion per annum. And they've never done a discounted sale for their product, ever. Yet their sales are significantly increasing in the market. And people keep buying. And let me tell you that the ugliest handbags I've ever seen, because they put their label all over it. You're buying an advertising campaign with a logo. That's the best ad campaign I've ever seen. But the perception of value, the way that bag is made, the way that bag is positioned in terms of its value, the fact that it will last a very long time that they've backed their product significantly.

And then they [unclear verb] the brand, so they're building that quality and the value of the brand, makes that product very unique in the market. Now it competes with several other luxury brands. However, in its own market, it's actually growing. It's actually growing by about 18% at the moment. And not every part of the world is sitting there in a position where we have a lot of expendable capital to do that. So if there's people that are investing at high levels, there's a reason why they're doing that. And it's really funny. If people actually invest based on value, especially people who understand that quality scenario of what it's worth, that brand quality, they're willing to pay the excess.

They're willing to pay a high price. So your clients, if you position, if you articulate your message clearly and build the benefit of your product into the way that you pitch, your clients will buy. It'll be a no-brainer. Okay? So are you making an offer? I can't refuse. I'll ask questions. What? Why Apple TV is not working? What I'll do is I'll just continue on because I don't want to interrupt the filming. The question I'm asking is, are you making me an offer I can't refuse? Okay? So are you making your clients an offer they can't refuse? Okay? The concept of [product name unclear], the product that I just launched two weeks ago, that doesn't even have a website, by the way.

Right? And has capitalization. What it does is it's saying to people that if this thing does what you can't do right now, what you don't have the time to do, and it gives you a positive return, and that positive return is a significant positive return to your business. Right? Is there any reason why you wouldn't want to realize that positive return? Every person that I've shared this concept with, where I was actually, and I wasn't asking the buy, by the way, when I sat down and just worked that simple math, that if you close an average of two, you've got eight sitting out there. If we got one more deal over the line, and we did that every week, that's an extra $800,000 to your business this year.

What would you be willing to invest to capitalize on $800,000? And that's the worst case scenario. Is that a magic bullet pitch? It's a no brainer, yeah? You want to find the no brainer in your product or service. So what you want to do is you want to make sure that you understand the problem that you're solving with your product or service as intimately as possible so that you articulate that simply to the client so that when they see it, I'll just buy it. The product should sell itself. A perfect example of a product that's sold itself is Apple. Right? How many Apple buyers have bought the last three versions of the iPhone in the room? There's a few of us here.

Right? I don't know what it is, but when they bring one out, for some reason, I'm drawn to that silly glass-stained store. And I'll sit there and say, we've got one here with your name on it. Right? And I believe them. Okay? And so I end up buying their products. Right? They have a no brainer product. It's appealing. It's high priced. It's high priced and it's competitive products in the marketplace. It's not a world beater. It only has 15% of market penetration worldwide. Right? It's only 15%. It's the most profitable company in the world today, which is really interesting. So, making an offer your client can't refuse is really important. The only way you can do that is really articulate what the client's problem or what benefit they're going to garner in their eyes that they see that this is a perfect match for you.

If you can find that, your products and services will sell themselves. Not an easy thing to do is it takes time that you need to listen to your customer base. Right? And there are two reasons why people buy, why we as human beings buy. We either want to avoid some pain or we want to gain immense pleasure. The gain immense pleasure is a strong, is actually the weaker of the two. We want to avoid pain more than we want to gain pleasure. Because pleasure is fleeting. We can only experience that in short, in short bursts. But if we can avoid pain, we will do anything in our power to avoid that pain. So is your product a pain reliever or is it a pleasure giver?

It almost sounds like an interesting commercial. But anyway, I'm thinking I'm in the sex industry here so anyway. So what is your sales process? Biggest fall down and biggest let down in any business is you do not define a sales process for your product or service. How do you sell the product and then how does the customer buy it? The fastest way to do this is whether it doesn't matter if you're selling a $1 app on iPhone or if you're selling a $10,000 or $100,000 solution or $1 million solution in the market. There is a process that you go to to actually make that revenue or make that exchange. If you don't articulate that process, it's very difficult for you to improve and manage your opportunity.

So for example, with [product name unclear], it was a really simple process. I had to ask the question if this is a problem for you right now. Are you experiencing this challenge of not capitalizing or not realizing what your opportunity cost is? So what's it feel like to lose 80 grand for every 10 deals that you do? How would you feel if you knew you were losing $80,000 every week? You wouldn't be too happy about it. My next question is what is the profit out of the 80 grand worth to you in your back pocket? What's the value of that? So if there was a way where you could easily capture that or easily generate a return, would that be something that would be useful to you?

Now let me ask the next question. If I had a way where we could automate that process, where you could see the results, and it paid for itself, would that be useful to you? Would everybody answer yes to those three questions? Yeah? So all I'm doing is making it a no brainer, but what I'm doing is following a sales process. So if I can highlight the problem, highlight the solution, and articulate the realized benefit to the client of utilizing that particular service, then it's not me saying, well, I guess you should buy it. It's them saying, where do I go to from here? How do I get this in my hands? So sales process, articulate your sales process.

If you sell your product online, there is a sales process. Everybody's talking about sales funnels at the moment. Sales funnels are the thing. Sales funnels is a not a new concept. Sales funnels have been going on since Henry Ford brought out the first Model T. He had a sales funnel. It's just it was a physical sales funnel. Sales funnels online is just a portal to take you through a step-by-step process in sales. And it's no different. If you can figure that out for your clients or your product or service, that's a license to print money for your business if you get that right. And there's plenty of examples on how you can do that effectively.

But if no sales process, you're going to minimize your opportunity. You must understand how you actually generate an outcome. So income-generating activities. This is something that I talk about a lot to a lot of businesses, because one of the things I'll ask people is what is, you know, what's your expected growth rate for the next 12 months? The average business in America that I've spoken to, their average expectation of growth, is 10% of what I did this time last year. That's their average expectation of growth. Now, if your expectation of growth is 10% on what you did this time last year, you're actually going backwards. Because you're not taking consideration indexation, interest rate changes, you're not taking consideration margin changes or costs for supply to deliver, right?

So if you don't take those things in consideration, your 10% is actually going to cost you money rather than make you money. But here's the next question I asked business owners who say I want a 10% increase. I'd say, so do you have a strategic plan to monitor on a consistent basis so that you're actually hitting that objective? How many people do you think have said yes to that question that I've asked? And I've asked literally thousands of business owners all over the world. How many people, and I can show you on a show of hands how many people have said yes? Very few, less than 0.03% of the people I've spoken to actually had a strategic plan to make a lousy 10% to make a loss in their business.

Now, you know, the fastest growing companies that I talked about a moment ago on that Inc. 5000 list? Every single one of those companies have a strategic approach to have a 50 to 100 to 200% growth rate and realization of their business. They plan for that growth and they live and breathe their plan on a day-to-day basis. They're actually monitoring. They're growing in markets where their competitors are actually declining and they're actually growing and they're also charging higher prices or higher value than their competitors in the market. How is that possible, right? Half the market is depressed. The other half the market's making it happen. What's going on?

The reason why is they've actually got to focus and attention towards hitting that objective. What you focus on most and what you take action on most is going to become real to you. So if you take shitty actions, what kind of results you think we're going to get? We're going to get shitty results, right? If you take focused, consistent actions towards outcome, you're going to have a much stronger. You may not hit your objectives, but you'll come pretty close. And in some cases, you're going to surpass them every single time. Income, general activity in business, absolutely vital. The number of business that I talked to, I actually asked this question.

How many hours do you invest in income-generating activity for your business in terms of generating revenue? Most people cannot answer that question. Some people say, well, we're doing it all day long. I'll guarantee you that most businesses, when they actually do an analysis on this, are spending less than an hour a day. Some people are not even spending an hour a week. Some people are spending less than two hours a month on generating income for their business. So if you look at that concept of focus and consistency, when you actually say, this is what we're aiming for, and this is the objective we want to achieve, and this is the strategy, or these are the things we're going to place to move ourselves or propel ourselves forward to that objective and outcome, then in most cases, they will do what they're actually focusing on.

One or two hours a day on income-generating activity in the business will significantly change your revenue if you have that focus. I have this thing where people say, I've got too many fires to put out. I've got these problem people called customers to take care of. There's all these sorts of issues in the business. All of that is the process of doing. How many people here have been to a doctor's appointment recently? Any doctors, dentists, or anything like that? When you're in the dentist chair, do you pull out your iPhone and start having a conversation? No? When you're in the doctor and the doctor's telling you, here's the result to your test. You sit there and say, hang on a second, I just want to check my email.

Right? You're paying full attention, yeah? So if you want to make a change or a difference in your business from a revenue perspective, turn off the iPhone, turn off the email, block out one hour of time and focus on what you need to do to actually generate revenue. And you will rock your socks off when it comes to making money or growing something. So presentation and pitch, for me, how do I get to mass markets? I can use the internet to leverage through online training or webinars. How do I get to mass markets in niche markets? I can actually create events, go to events. I can actually present. I can create authority within markets by going into making sure that I'm presenting at all times.

One of the companies that I work with, they started their business about 18 months ago, self-funded. They're in the personal training, sorry, not personal training. They're in the physical therapy market. They're generating just on $1.6 million worth of revenue in less than 18 months, fully self-funded from scratch. Right? And what they do is they're running perpetual presentations in the physical therapy market to educate, nurture and add value so that they're actually converting clients to their software. Right? So they're perpetually selling all the time. They're building a massive reputation and they're pissing a lot of their competitors off because they're doing what their competitors are not doing, basically.

So, lead generation, very, very important. It's got to be constantly out there looking for who is going to buy. The more you understand that market, the more sales you make, you need to be engaging. You've got to be opening conversations with your market as much as you can. You can leverage communication and conversation. You can allow the market to drive the conversation. It's one of the fastest ways that you can actually penetrate. It's actually allowed the customer to evolve your product. The company I just mentioned, the product was developed by the client, not by the company who innovated the product. Right? Or by the market by themselves. Strategic alliances.

This is one of my favorite strategies to gain leverage and penetration. You don't need to go and buy customers through advertising marketing. You don't need to look at expensive campaigning and long-winded processes or investment to actually get out to your markets with your product and services. There are people who are like-minded to you or have affiliated or associated products or services that already have a relationship with your customer base. All you've got to do is develop a value-added relationship with that company and that company will expose you to an entire market for your business. So you don't need to do the hard work. Somebody else has already done the hard work for you.

But if you look at way of pairing up and I'm going to share with you an iconic example that only happened recently. I only saw this about six weeks ago when I was in Austin. Just really tweaked for me. That kind of demonstrated the point. But it demonstrated on a grand scale. I actually just got the figures to this the other day when I found out how successful the campaign was. But the company I'm talking about is Uber and Capital One. Anybody seen the Uber and Capital One commercials where if you have a Capital One Platinum card, you get 20% off for the rides on Uber. Anybody's seen that? There's a lot of ads going around both online, offline with media and marketing.

But what they did was Uber did a deal with a credit card company essentially with Capital One. And what in that deal that they promoted was that for every ride that you use the Platinum card, if you attach your Platinum card to your Uber account, you got a 20% rebate. Now, is that a good deal for Uber riders? And what is the number one connection to financial reward for Uber? Is that not your credit card? Yeah. 300,000 new credit cards in a space of six weeks. Uber saw new customers it never had through the relationship with Capital One. Now, that's on a grand scale. I want to take that back to an even smaller scale. Right? So we're talking small business now.

So the company I just talked about that built their capitalization to 1.8 million. What they did was they partnered with a leading player within the physical therapy market. So they didn't have connection or exposure. They went to that market. But what they did was they got better penetration by somebody who already had authority within the physical therapy market. So they worked with that person who had the connection and that person connected or actually exposed them to the greater market. Now, here's the funny thing about their market. They're not after the individual physical therapy person that's running their small clinic. They're after the guys that are running multi-million dollar clinics.

That's who their customers are. So that customer base cuts that market penetration to about 2,000 customers. If they capitalize on those 2,000 customers, which they won't, they'll never get everybody. They're doing pretty good job at the moment. But if they capitalize out on those customers, their company will probably be worth about $100 million. With only 20% of the penetration of the market. So that's the campaign that Uber ran with Capital One. So you can develop strategic alliances with people who already have your market, look at ways of adding value, look at ways of partnering up and collaborating. In the online world, we'll call that affiliate marketing.

It's no different in the offline world. If you've got new product or service and you want penetration, the fastest way to get penetration is go and talk to somebody who's already talking to your client base. Quickest way to do it. So be a sales-driven organization. I don't want to harp on this too much. But if you are a sales-driven organization, you'll have everything you ever want and need to capitalize or grow your business. Most companies are not sales-driven. They're not sales-focused. They're very reactionary. They're hoping that the customer will come to them in a lot of cases. A lot of these companies don't last a long time. There is a mountain of startups out there that never focused on this part of their business.

That's why they're on the pile. They've raised capital. I was talking to a company a few months back. Unfortunately, they've collapsed. But in their first A round of funding, they raised $23 million in their A round. That was phenomenal. They burned that in six months. No more money. $23 million and in six months it's gone. Can you imagine the parties they had? Right? So understand, and this, unfortunately, this organization was not sales-driven. Right? So this goes back to making sure that you have this focus and intent to actually capitalize, to engage. Right? Your business isn't worth anything until a customer buys something from you. This is the biggest mistake that a lot of startups make.

Go to the market. Get somebody to buy. That validates your product. If you can validate very quickly, then you've actually got something you can build on very rapidly. So, [unclear heading] to your business. I like to talk a little bit about this because a lot of people get confused. Now, some people may accuse me of being a capitalist, sales-driven commercialized bastard. And I'll happily own that. Right? But what my real purpose in life is is to give as much value as I can to the people that I serve or the people that I share or the people that I engage. The more value I give, the more that I can present that and the more that I can over-deliver, the more revenue and the more opportunity and the more resources that I generate for myself in what I do.

Every business needs to focus on this type of purpose. Be great to your customer base. The greater you are to them, the more they're going to love you. The more they're going to talk about you, the more they're going to turn you into an icon. Right? Look, we can talk about all the exceptions to the rule of companies that have done exceptionally well in a very short space of time. But there are literally thousands of companies that are around that are doing great. They're not iconic, but they're doing really well. Right? They're self-funded because they're awesome to their clients. That's the purpose. But here's the thing. Your goal is to make as much profit to generate as many resources as you can from being great to your market.

Right? Most people get these two things the wrong way around. Most people think the purpose of their business is to make some dollars or make some profit. That's not the purpose of your business. Because if that was the purpose of your business, I could walk up to anybody and say, hey, I'm really cool. I just need some money so I can make some profit. So can I have some money. Right? That's the wrong way around. Okay? So the stronger you are on purpose to add value, the stronger this works. And one of the things is you need to have a definable moment. So you've got to create monumental moments of realization of your profits. Most business people that I know, and I've made this mistake in my business in the past, where I used to just sink all the money that I made back into the business.

Back into investments, back into the business. Because I thought, hey, one day I'm going to enjoy it. Right? I can't buy back the time that I've lost by not taking my profits. Right? The goal is to take and realize and enjoy your profits. You know? Spend your children's inheritance. Right? You know? Don't store it or hoard it. Right? Maximize your opportunity. So with that, you rock. I want to thank you for listening to that. But I will take questions. I'm happy to answer any questions you got. But what I'll do is I'll repeat the questions just for the purposes of the camera. So it'd be great if you could just stand up and I'll answer.

So it was really weird because it was accidental. I gave the idea for [product name unclear] away. Right? I didn't want to do anything with it. And in actual fact, it wasn't even [product name unclear] until two weeks ago. Right? So this is a brand that's just appeared. But I gave this idea a way to several people that I know in the development or innovation community and startups. And say, hey, here's a simple idea that this is a problem that's consistent. You can run. You can set something up. You can run with this and you can capitalize fairly quickly. And I wasn't interested. And then a good friend of mine said to me because I saw somebody develop a product from concept or problem to idea and actual wireframe within about an hour and five minutes.

Right? But when I looked at that, I thought that was just so complex. It was a problem that was out there that was to be solved. But by the time you actually got to the point of seeing the outcome, I'm thinking, no one's going to do that. It's too hard. Right? So I said it's easy, and [unclear phrase], you know, I had this idea a couple of months ago. In 25 minutes, I can pretty much map out the, sketch the solution. And I can probably find a third party application to do it. And then the person made the fatal mistake and said, go on, show me. So I sat down and I actually stepped it out. Literally, I just went, here's a problem. No follow up.

Opportunity cost is a massive issue. They're totally stressed by the fact that they're constantly proposing, proposing, proposing, but they're not the conversion rate or the focus of the way they handle a sales process is just like the competitor. They're constantly trawling for opportunity. So I said, well, what if there was a system, what if there was a way to not miss out on that opportunity? And one of the things that I have found in communication is for you to be a buying customer. And this is a, this is statistical. You've actually got to ask somebody to buy seven to 12 times before they make a purchasing decision. Five years ago, we used to make decisions based on five frames of reference.

Google actually quantified through a concept of ZMOT, the zero moment of truth. You can look it up on Google. They quantified that in 2011, sorry, 2009, the decision making purchase, the behavioral purchase of a customer was five frames of reference. So that was like, check out a website, talk to a friend, see it on somebody else. So there was all, there was social proof evidence and there was evidence of access to information, right? So here's the thing. Four years later, it's gone from five frames of reference to 18 frames of reference. We, how many of you found yourself searching multiple websites for the same product? Anybody do that? Anybody searching cheaper price?

Now we get emails, you know, we're loyal to a particular brand, which are actually not loyal to a brand. We get emails now with a special deal if we've subscribed to something and we can go and look that product up, product up and say, hey, who might be selling the very same product for a better deal than what this person's just marketed to us with. That's what we're doing. Loyalty out the window, right? If we can look at value based, and we're making value based decisions. So if it's 18 frames of reference, if you ask somebody once, you're minimizing your opportunity. But if I can ask 12 times for you and you don't have to ask, and I do it in a really nice way, in a way that helps the person to make that decision, would that be useful?

And that was the answer. And every single person I've showed that or shared that to, they say, that is so ridiculously stupidly simple. And it is. All it is, is an autoresponder sequence. However, when you package it and you brand it, right, and you customize it, it now becomes a custom solution and an application that is SaaS-able. Right now I'm pre-selling in advance. So I'm selling yearly subscriptions for $3,000 to $6,000 in advance. And it's working. All I'm doing is, and these are conversations, by the way, I didn't spend time with these people to pitch the idea in terms of, you know, going through a whole lengthy communication process.

These are people that I'd spoken to in some cases over a year ago where I was just trying to do some idea extraction to find out what the market was doing. So all of a sudden, a year later, I say, hey, I haven't spoken to you for a year, but I just want to run something by. You can just have a quick look at this. Right? And as soon as I ask, now here's the crux of the elegance in the solution. It's not my numbers that I was focusing on. It's their numbers. So what I tell them is bullshit. Right? What they say is what they believe. So they sell themselves, not the other way around. It's their idea, not my idea. And the idea came to me when people kept on saying, yeah, we're just too busy.

We just can't get to them. And I'm saying, yeah, but there's always cash. Yep. I just had conversations knowing that people didn't make the purchasing decisions on the spot. So how many companies out there do estimates and quotes and proposals that never follow them up? They're waiting for the customer to go, hey, I'm ready to buy. Okay? Good luck. So that's how that came about. I haven't reinvented the wheel. I haven't got time to do that. The pioneers of our world have the ones that died on the goldfields. It's the guy who sold the pots and pans, picks and shovels. They're the ones that were the entrepreneurs. I want to be a pots-and-pans and pick-and-shovel seller.

I'm going to do that really quickly. The question was if I could just go through the process of what my questioning technique was. And it was really short. This is so super short. You can do this with anybody. Okay? My question was just tell me a little bit about the sales process, how it actually works. So what actually goes on? Right? So say, well, we get a lead. We do a checklist. We do a little feedback needs analysis. Then we put together a program for them. We offer them a solution in terms of investment. And then we leave it in their hands. And then I say, well, what happens after that? Oh, nothing. If they like it, they buy it. If they don't like it, they don't buy it.

Do you call them up and ask them if they want to go ahead? No. Have you ever called them up to ask them if they want to go ahead? Oh, we've done it occasionally. Did they go ahead when you called up and asked? Yeah, it happened. Why don't we call everybody? Well, I've got 300 proposals in my filing cabinet. I can't make 300 phone calls. Now, you know, can you see how stupid this is? I've got 300 people that I can close a deal on now. And I'm worried about spending hours putting together plans on deals that I'm never going to close. That was the irony. The only reason that came out is just by asking, how does this work? How do you do it? What's the process?

What's the end result? What's it worth to you? That's a really good question. My next question is, how important is it for you to actually close the deal and generate the profit or the commission or how important is that? Oh, absolutely vital. Okay. But we've got what happens to all these deals that are sitting in the filing cabinet. You know, well, nothing. We're too busy getting new ones. How much does it cost you to buy a new one? It costs me $100 to $250 per appointment. Right? You've already paid tens of thousands of dollars for those appointments to not realize the result. So when you share the insight or allow them for the penny to drop, right?

I have the first guy I spoke to pulled out old proposals and started calling clients. Rang me back at the end of the day so it's really funny we closed an extra two deals today. I wrote these proposals three months ago. Right? So it's a silly. It's a simple thing. Yeah? So all I'm doing is tell me how it works. What's not happening? How does that impact on you for it not to happen? If it were to happen in a better way, what would that look like? You know, what do you think we could do to make that happen? Oh, we should be following up. Oh, really? Okay. But you can't make 300 phone calls. Oh, yeah. No, that's a drain. Right? What other way? It'd be really cool if we could just do this online somehow.

Yeah? And so ends the story. Okay. So all I'm doing is asking, asking, asking, but I'm painting a picture. What does that feel like? What does that look like? Because I'm not the person in the business. I'm not the person experiencing the problem. I want that person. I want to open the wound and then I want to get my finger in there and I want to make them bleed as much as possible in a nice way in a very gentle way. Right? But at the end of the day, it's their decision. That answer your question. Super replicable. By the way, my sales process to capitalize has been to have a conversation. That conversation generally takes about 25 to 30 minutes.

That is not a leveraged scenario for me. There's no way in the world I'm willing to sit there closing software deals for the year. A leveraged scenario for me is in this questioning process, what I'm doing is formulating a very powerful sales process that I'll actually automate. Right? Now, for multi-user, absolutely, the application is enterpriseable. It will be enterpriseable. In fact, the second person I've sold is we've already set up a multi-user structure using third party application. So, yeah, it will expand. It will grow. By the way, by all means, you can become a competitor. There's no shortage of people out there who buy this. Right? I'm not the only one at the moment, but it's working.

It's a really good question. So the question was, is there a way of, you know, in terms of the engagement or reconnecting or getting the person to make a decision or purchasing decision? I mean, that's going to be contextual, depending on what product or service you sell. However, for me, I work in a market where I work with consultants who target high volume, high target customers. So nobody's, you know, we're talking six-figure deals. Okay? So, high five, six-figure plus deals. High five, six-figure plus deals are never made on the spot. Right? It just doesn't happen. You know? You've got to build some trust, right?

You've got to build some trust. You have to build some credibility. And you've got to get to that point where the person realizes that value. The way to do that is you always want to be asking, but you want to be asking in a way that is not confronting. So if I, the way I try and do that or look at that is what content supports what evidence can I provide that supports the value or supports the idea of this is a way that you can improve your opportunity. So sometimes, you know, a perfect example of this, because I work in the financial markets, one of my businesses in the financial markets. The way I add value, and this is, by the way, don't tell this to anybody.

Okay? So those of you who are watching the recording, don't share this. But what I do is you have a service for Bloomberg here? Yeah? No Bloomberg? Yeah? CNBC? Right? Your financial papers in the country? Huffington Post financial CNN money? Right? What I do is I aggregate content that I search in Google alerts that are specific to the problem or the challenge that the market is facing because somebody is always writing about it somewhere. So I set up a Google alert, I don't actually do this, I get a virtual assistant to do this for me, and they curate content based on the strategic targeting of information. When we get the information, we paraphrase it, we link to it, and then we're asking for feedback.

So if I give you something that is of value that is relevant to you, and I've actually made [unclear phrase] for you to receive that by the way, I'm not just giving that willy-nilly to everybody. Right? So I position the value of that. Okay? By doing that, I'm making sure that what I'm providing you is relevant, and at the end of the day, my question is, what do you think? And should we do something about it? And more often than not, over a period of time, especially for high value sales, what happens eventually is that person will come back to me rather than me going to them and they'll say, hey, you know, this thing that we've been mucking around with for 12 months, I think we need to start doing that.

So you can drip highly valuable, highly targeted content automatically, by the way, to the audience. Sometimes I'll do that with physical connection, not necessarily electronically, but I'll send real information in a package format via the mail. Or sometimes there's a company that I'm consulting to at the moment, actually based in Houston. They're in the energy market, and their acquisition cost of the sale. So this is how my brain thinks sometimes. They cost them roughly, well, they said something really weird to me. They said, every time a client comes into our factory and sees our process, we actually convert a sale. Now, their average sale is about 150,000.

150,000 is a low end sale. And a high-end sale is $1.5 million to $2 million. Right? They're big customers, right? So I said, how much does it cost you to actually make a sale? Right? What does it cost you to buy that customer to make a decision? And the customer doesn't just buy once. They'll buy more than once. So the customer has a lifetime value. And they said, well, it usually costs us about $5,000 that we would spend to get a customer to spend 150,000 plus on our services. Right? So you just said to me that if we get a customer in our factory and they see our operations, they buy. You know, what's the percentage rate of purchase? It's 100%. They come and see what we do.

And we can show them how it really works and how they benefit and how they get value. They love it straight away. They're in. You know, the incumbent supplier is gone. Right? So I said, how far away is your market? And I said, it's within our average market is northeast. So we're talking northeast US, northwest and, you know, pretty much the major centers within the country. How much does it cost to fly somebody to Houston from those cities? How much does it cost to put them in a really, you know, not a crappy hotel? It's a nice hotel. Right? How much does it cost for you to transport that person and to educate them to show the values that they're going to benefit from that process?

It says we could do that for less than $1,000 a person. Do you think that if we created a position where we actually invited them in a really nice way and position the value of coming and making it exclusive to them, if we're spending under $1,000 for customer acquisition and you said to me, we got 100% close rate. How quickly do you think this company is going to grow? Right? So that's, you know, adding value from a different level. Yeah. That's like event planning on steroids. I can tell the story, but I can't give the figures. I had to sign some agreements. So I'll share with you what happened when I started it. I launched a startup.

Yeah. I launched a startup. Okay. This startup was in the commercial real estate market. In, in Australia, even in the US, there's a lot of compliance that occurs around commercial real estate. So leasing properties selling commercial real estate. And I found that there was a significant problem where there was a massive manual problem within, within the market of being able to facilitate the listing and also the, the, the documentation for commercial contracts. Right? And it was a very, there was this manual process to go through. And the reason why it was manual is because the state legislations in each state had different compliance laws that you had to attach to each documentation or listing of a property.

The average office would spend about six hours a day just administering and there would be three or four people doing that at any one time. So it's pretty labor intensive. And I couldn't understand because this information was so readily available why it wasn't like a copy and paste scenario. Right? But just by asking the question, so then they said to me, well, we've got this software that does it. And I said, well, that's really cool. Let's have a look at it. And the software was built on old macros and Excel spreadsheet structures. Right? And it was really clunky and they hated it. Absolutely hated it. So all I asked was, and I started talking to a few other commercial real estate agents.

I said, just to find out if this was just a one off or did everybody experience the same sort of thing. And as I probably spoke about seven or eight agencies about this particular problem about this software, this software was the incumbent, and the company was spending, the average customer was spending about $3,000 a month for this software. So it had been around for 30 years, but nobody else has come up with anything better because it had an enterprise structure. So I said to them, look, this is a significant issue in your business. What parts of this do you like and what parts of this do you not like? Right? And he said, well, you know, if this could do this, then we don't need that anymore.

Because we don't use all the other stuff that this part here, that's important stuff. So you're telling me that if you had something that did that, made it easier, better use the interface, solve that problem in a fairly efficient way that you would leave the incumbent supplier? I said, yes. And so, you know, saying that you leave, obviously the value proposition has to be less than what you're paying right now. That would be making it more attractive. And they said, well, yes. Okay. So if I go away and see if there's a way to do that and I can come back and show it to you, would you at least take a look? I just want you to take a look and give me some feedback on it.

So within about four weeks, I'd actually sketched out a solution after speaking to about seven other agencies. And it basically went through and solved that problem in a simple way. I found a developer for that particular product. I sold, I pre-sold each person. In fact, the first seven people I spoke to all became my first investors. So I pre-sold at $12,000 per unit. That was $1,000 a month, right? I could deliver the solution within less than three months. Now, here's, I'm happy to say how much it cost me to build a software. It cost me less than $6,000, right? So I raised about $80,000 worth of capital for a $6,000 investment. The other money, the $72,000 that was left was going to go straight into marketing when I launched the product.

But what I started doing was I realized that the main incumbent competitor in the market on their website, they had a list of 800 customers who actually used their software, right? So I actually started contacting their list and say, hey, if there was something that was easier, better, faster and better value, that something might be useful to you. And they all went, oh, absolutely, we hate this thing, it's a dog. And all of a sudden, I was still pre-selling before I even developed the software. So I was three months in. At this stage, I had 30 investors. So I'd raised a significant amount of capital. And then I got a phone call out of the blue because about three months in, all of a sudden, they noticed that people were canceling on their $3,000 subscriptions, right?

And, you know, if you think you've lost 30 customers, right? So multiply 30 by three, multiplied by 12. And that's a significant amount of money, considering that most of that's profit, right? So I get a phone call out of the blue. I didn't know who they were. I didn't even know. I wasn't really expecting it. I get a phone call. They say, hey, are you interested in selling your software? I said, yes, I am. Absolutely. But I don't have a software yet. Right? Well, but you're building, you know, you're developing one. So, yeah, yeah. I've got a bit of a beta going, but I haven't enterprised it out properly. I haven't provided the solution.

So, yeah, but I'm happy for you to make an offer to me. No problem at all. And then I heard nothing. I was in Singapore having a talk, and I got a phone call. Lots, I was traveling, and the company called me back and said, hey, you know, we'd like to make an offer for the software. And I said, sure. And so they blurted out a figure over the phone. And I went quiet for a minute. I said, are you serious? Are you seriously offering me that for this piece of software? Now, let me explain. When I said, are you serious, are you serious about giving me this ridiculous amount of money for a software that doesn't even exist yet? That's about to exist in two weeks' time.

I was saying, holy shit, this is a lot of money for something that doesn't even exist. That was a surprise. So, by the way, that's a great negotiating tactic. Anybody makes you an offer to say, are you serious? Right? Take it as an insult. Because what happened was, normally in negotiations, you get the counter offer? Yeah. Like normally you'd say, well, you know, I think it's worth a little bit more than that. I didn't even get that opportunity because I was so like, are you kidding me? Right? They said, hang on a second. And then they hung up. Right? And so I thought, oh, I thought maybe I lost a connection or something like that. And so they didn't call straight back.

And I thought, oh, okay. You know, I don't know. [unclear aside]. Three hours later, they came back to me and up the price by 38%. And then what I said to them was, I think I can let you have it for that. With a caveat, the 30 investors got the software for free for five years in the deal. They had to take my development team with them and pay full rate. I gave my development team 15% of the deal. They were under contract. They were not investors in my deal. But because they built it, I thought, hey, you guys were awesome. I gave them 15% of the deal as a thank you. They got a contract for five years. But here's the thing that software got tanked.

So two months after the acquisition, they've tanked the software and they've gone back to their old software. However, 30 users are using the new product and loving it. But they got five years as part of the deal. So they paid 12 grand and they're saving themselves 180 grand for five years. So that's the story. So yeah. So remember, are you serious? Right? It's a negotiation tactic. With that, I want to say thank you.