THE POWER PARTHENON
3. Increase the frequency of repurchase — Get more residual value out of each client
• Developing a back end of products that you can go back to your clients with
• Running special events such as “closed door sales,” limited pre-release and so on
• Communicating personally with your clients (by telephone, letter) to maintain a positive relationship
• Programming clients
• Price inducements for frequency
• Endorsing other people’s products to your list 2.
How the Concepts Translate into Action for Me.
This is just a summary. The specifics of how to develop and effective referral system or other concepts are in other material.
Joint Venture Primer #1 1.
The Main Ideas.
The kind of joint ventures we are seeking: dramatically expand income with minimal time, expense or risk.
When you have little money or assets and no reputation, you have to devise ways to tap into other people’s goodwill, capital, distributions channels, sales efforts, and so forth. Find their underutilized opportunities and make a strategic deal to help them realize more benefit. If you can turnkey it for them, no wise person would say no.
Big companies universally do joint ventures to survive.
80 million small businesses have no idea how to do a joint venture. That is a lot of opportunity to educate and create opportunities.
Quote:
“I have created a thousand marketing consultants. I have done professionals. I know the process and it is not a this or that. It is a sequence.
The first sequence is you ground somebody and you get the mindset. You have to work on the mindset.
Without the mindset nothing else will work.
Then you get the proficiency.
Then you help people figure out a strategy.
Then you break down the tactics.
Then you set them off to try it very safely and very very conservatively.
Then you analyze the results.
Then you guide them. Then you inspire them. Then you either adjust it. You may inspire, you may push, you may pull, you break through the barriers.
Then you help them take what they are doing and turn into a system.
Then you figure out what their game plan is.
Then as they grow it you help them take it higher levels and you break down the barriers of glass feeling.
Then after they have done it you give them away to even take it to a higher ground.”
Common mistakes:
1. Getting trapped with the theory. Thinking you know it, intellectually; without the experience to know it transactionally.
2. Being intimidated.
3. Going after deals too big for you.
The fastest way to success is to learn to JV by apprenticeship. Apprenticeship solves common mistake no. 1.
You get some experience as you go through the process. You acquire proficiency by experience, just the same way that everyone learns to walk, talk, etc. You perform an assignment, your mentor checks it, adjusts it, corrects it, enhances, it, and advances you to the next assignment.
Success rates:Read a book 7%; Audio tape 20%; Seminar 25%; Mentorship vitually 100%
You have to begin by learning the JV mindset. You have to acquire the skill of seeing opportunities for JVs. You have to learn how to pitch the JV so that people agree to do business with you. 99% of businesses don’t understand JVs, so joint venturing is very much an educational and nurturing process. You have to sell them on accepting the benefits that you can bring to them.
To be successful pitching JVs, you have to convey trust. You must display confidence and certainty. You have to have a concept that makes sense. If doesn’t even matter if it doesn’t work. If they have the certainty that you have insulated them from the downside risk, then the only potential outcome for them is to benefit.
When you have experience, you will be able to present with authority. The authority of a expert advisor conveys high certainty and confidence. Everything you present is conveyed with the mindset that you have the ability to make it happen. The deals you have done can establish your credibility. Then when you pitch people the upside potential without risk, they can’t deny the common sense of working with you.
Being able to sell business people on joint ventures requires conviction, motivation and passion.
You must begin with a certain psychology and strategy and refine it by experience.
Identify the keys from the experience.
Accelerate learning through interactive analysis.
What was the mindset? What was the execution? What did you learn? What could you tell others to do differently? What would you recommend?
Go for the safe, certain, smaller deals first. Build a stream of income from several things producing
$500 per month. Build perpetual income streams.
The key to everything is to have control of the deal.
Then you can sell your income streams or leverage them in other ways.
Understand the odds.
Start with small deals first:
1. You build your ability, confidence and psychology.
2. Wins build your reputation
3. You can build an income stream, which will support you when you want to make a larger commitment to a really big deal.
Realize that it is a process.
Be in it for the long haul.
Quote:
“The average high ticket sales success takes nine to eleven progressive communications, and what you are doing with a joint ventures is selling a intangible high ticket sale.”
“And if you look at the best sales people, most sales people fail because they try it one time, they don’t hit the result they want and they abandon into that prospect representing that line and they get disenchanted, whereas if you look at the great successes it is a sequential process where the dynamic of progression works to your advantage. Most people give up too soon.”
Jay’s pitch: “I know that you do X well, but that you don’t have the Y that you need. If I am willing to set something up for you, where I do all the work, are you willing to split the profit that I make with me? I can go and do this for one of your competitors, but I like you the best and wanted to give you the opportunity because I think we can have the most success together.”
If Jay gets rejected, he turns it around with this pitch: “If I were in your position, I would probably say no in the beginning, because I would wonder what the catch is, what he knows that I don’t. But then I think about it, and he DOES know something I don’t. He knows how to deliver markets that I am not going after.
He knows how to turnkey it. And it will enhance my profit, if I put controls on it …”
Jay has a lot of experience, so he can also educate people about the controls and structure that are needed on any deal.
Case study examples:
1. One person’s distress represents an opportunity for someone else.
2. Use an existing distribution channel to sell additional products.
3. Use existing relationships to introduce a joint venture partner. If you bring access to someone, you should start by asking for half the profit.
4. Make second and third sales using existing assets.
5. Identify underutilized assets and use them.
6. Use assets during a time of day when they are not utilized.
Business to business sales are very profitable connections.
7. License successful selling methods from successful sales people.
If you own a business, begin externally by asking:
How can I get other people to open up new markets for me?
How can I get other people to give me access to their products, selling systems, etc.
How can I get advertising and exposure without paying upfront?
How can I get markets?
JVs can lower the barriers of entry into any business. You get to leverage the investment made by an existing business. You can use it to enter a new market or boost market presence. You can harness other people’s knowledge base, learning curve, research, ideas to expand your horizons.
Why JA teaches the JV program:
1. He is good at doing strategic alliances.
2. Most of the deals we will do are too small for him. But we may bring him deals that are too large for us.
3. We may uncover businesses in which JA has an interest.
4. You may come into contact with people who could be useful to JA. JA will be making money on the backend through ancillary opportunities.
5. JA likes to be forced to codify his thinking. He wants to pull out the key concepts from what everyone is doing and try to teach them and have everyone grow from their participation.
2.
How I Can Apply the Concepts to Myself.
I agree with Jay’s insight into teaching the JV process. JV success begins with the mindset JA is teaching. I have specialized knowledge and a lot of experience putting together large business deals, but I have not previously tried to negotiate for an interest in the profits from someone else’s business.
Mindset from the first 8 reading assignments fell into the category of putting the customer’s interest at the forefront, and building trust through both integrity and competence. You have to instill confidence, through both integrity and competence, to get someone else to buy into your JV concepts.
The JV Mindset is the second concept. It involves learning to see opportunities in other people’s
businesses. The way you develop a passive income is bring the opportunities to people who will do the work and pay you from the profit. They don’t perceive the venture as a risk to them, because they are already risking their capital in their current business. You offer them an additional profit without additional risk. In reality, you are leveraging their assets to produce additional income from both their business and yourself.
With that mindset, the next step is to try some very small risk JVs just to build experience (a) pitching the JV concept, (b) learning how to control the JV so that it perpetuates, (c) building multiple sources of passive income, and (d) using all that to prepare for really big
opportunities. It would be foolish to go straight for a really big JV deal and blow it because you didn’t have the technical experience to back up your ideas.
Jay’s Interview with Tony Robbins.
1.
The Main Ideas
What are you doing that you are not getting enough leverage from?
Recognize what you do.
Measure and analyze.
Determine how you can improve performance.
Upside leverage: If you are already spending $X on something, then it doesn’t cost any more to get a better result.
Think about what could be underperforming: Sales people, Sales pitch, Advertising, etc.
Test you headlines. Change only the opening statement. Measure the results.
Everything in business can be measured by testing one alternative against another.
For direct mail, change only the first paragraph.
For sales calls, change only the first statement in the pitch.
Make the first statement a powerful, self-serving result the prospective customer is going to receive from your product or service.
They are buying a result, and benefit, an outcome that serves them.
Ask what the ad means to the customer. If it doesn’t contain the necessary benefit, then change it.
“What about your business gives a greater advantage or benefit to your customers?” Answers like “service”
or “quality” don’t mean anything.
Know the marginal net value of each customer.
Three ways to grow any business:
Increase the number of customers.
Increase the unit price of sale.
Increase the frequency of sale.
When you start a buying relationship, you have an inordinate opportunity to program the new customer forever.
They are looking to you for guidance, and if they buy from you they trust you.
If you show them the reasons why it is in their best interest to come and buy with you again, or obtain referrals for their other needs through you, you will get many more sales.
In any industry, there are general ways that everyone does things.
If you look outside your industries, there are much more broad ranges of illustrations of the possible ways to do things.
Let your customers know, help them recognize, the unique benefits you provide.
Go back to your old customers and re-emphasize the distinction of what you provided that brought them value, sell to them again or get referrals.
Use a sandwich: combining half filling and half real tangible value.
Denominate the benefits with a dollar value.
Identify what they have done or could do with the dollars.
For referrals, identify how their friends will thank them.
Everything a business does is a process. Every process can be measured, compared, quantified and improved.
Especially measure the steps in the sales process. Measure the dynamics and compare the results different approaches produce.
Some factors impact the number of sales, a higher closing percentage.
Some factors impact the dollar value of sales, a higher closing price.
Where you are now is your baseline.
Your variance is the difference in different performance levels over time.
Don’t drop what is working. Instead, build a broader base with several things that are working.
Optimization: never do anything unless you can get the maximum benefit from your effort, continuously.
Most people minimize their activities instead of optimizing them.
Most people don’t recognize the opportunities for optimization.
Stop and ask what is possible.
Optimal success strategy: plan to understand and incorporate maximum leverage, using methods inside and outside your industry.
Superior mindset for the long-term is the client benefit perspective.
Innovation is the bringing of superior value to the end user.
If you always take the added profit from innovation, you can lose patronage.
People also have to be shown how to appreciate the added value.
Marketing provides the education of customers and prospects.
Marketing increases demand for our services or products.
Critical factors of sales leads:
1. Cost.
2. Conversion rate.
3. Unit of sale.
4. Residual value.
JA learns from other as he teaches, by requiring them to illustrate their own understanding and techniques as they have applied them.
80% of your business from 20% of your customers, recognize and reward them.
Ask a lot of questions, going deeper and deeper.
Be specific. Be very specific about the result you want.
Where does new business come from? Where could it come from?
Who else stands to benefit from your growth?
Who is in the position who already has must customers and has already spent time, money and action to get their goodwill and attention? Are they in a position to recommend or endorse me?
How else can I benefit from the goodwill I have with my customers?
How can I reduce their risk or lower the resistance barrier to the use of my products?
USP. If you sell something hard like a product, adding something soft like a service might create a more valuable USP.
Matrix for innovation: process of looking at and documenting everything that other people are using.
You: what products or services have you purchased? What compelled you to buy? What about my desire motivated me? What was the outcome I was expecting? How did they convey that to me? What selling methods did they use? ALSO: make a point of inquiring of 2 or 3 people per day, how do you market? How do you express it? What has impacted your selling strategy? As you learn from them, document what resources they have that you could use. Take everyone who is not competing with you (geographical or product market), and contact them to exchange information. Then go to similar industries, not competitive but with common elements that you can learn from
look to see what businesses have customers they're not maximizing where you could basically create a business that would be a joint venture relationship with them, or take advantage of the enormous investment and goodwill they have already made, the enormous money they are continually spending on facilities, equipment, personnel and advertising -- to sell or offer other logical extended products or services under the confines of the companies. Most businesses I look at sell one product or service -- they only think of themselves in the context of "I sell this product" when in fact the very acquisition of that product means that a customer has to have pre-done one thing and then post-do something else to make that product work.
2.
How the Concepts Translation into Action for Me.
I have viewed my businesses from a process standpoint for many years. I am in the process now of
documenting the steps in each process, as a tool for training and to see if I can add more focus and leverage.
Another thing I have in mind is measurement. Rather than measure every minor detail, it makes sense to me to measure just the critical areas. I will look at how I can benefit my businesses by measuring the cost of client acquisition and data about client purchasing.
A final thought is about USP. There is a lot more work that needs to be done to communicate valuable concepts to clients, to build the client recognition of the benefits that they are receiving (or should be).
Jay’s Interview with Fran Tarkenton 1.
The Main Ideas.
You can generally make more money in an active business than by passive investment.
The return on passive investment is based on risk.
In business, you can make changes that cost little, but produce massive gains. Far more leverage available in an active business venture.
Look at business processes: a bunch of steps that result in a sale of a product or service.
Each step is a process, that can be identified, measured, compared, and improved.
You will have new customers, repeat sales, and referrals.
3 ways to grow a business:
1. increase the number of customers.
2. increase the average size of transactions.
Consider how you can add more advantages for the customer.
Increase satisfaction, improve the relationship, and make more money in the process.
3. increase the frequency of purchase.
Commit to building great relationships with customers. You can’t allow a customer to fall to the wayside. If you look at customers as valued friends, then you are responsible to actively convey value to them.
Find out who isn’t dealing with your company.
You have to maintain systems for customer creation and customer regeneration.
You must know who is buying, what they are buying and how often they are buying.
Maintain contact information, purchasing history and follow through records, to get them to the next transaction.
Maintain the buying information for every customer or client that expresses an interest in your company or its products.
If people aren’t buying the right product or buying frequently enough, you can address that.
Reasons customers stop buying:
1. Interruption: you stopped doing the thing that was causing them to maintain their relationship with you (i.e., a vacation). Easy to get back on track with a call or letter.
2. A bad experience. Look at is as a disservice to them, because if they were a client originally then they
2. A bad experience. Look at is as a disservice to them, because if they were a client originally then they