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Jake: Well, welcome back to The Profit Junkie Podcast where we talk about increasing your sales and making sure you keep as much of your hard earned money in your bank account as humanly possible. Today, I am excited to introduce you to our guest. Mr. Perry Marshall. Let’s get right into it. I was listening to your … what’s your other podcast? Not your 80/20 podcast.
Perry Marshall: Evolution 2.0
Jake: Yes, the Evolution 2.0 podcast, I was listening this morning on the way in. Fascinating stuff. I mean, I’ve heard your sales and marketing stuff but I’ve never really been exposed to the other stuff. It was really cool.
Perry Marshall: That is a very interesting rabbit hole for some people. If you kind of get it, it’s like whoa, this is trippy, man.
Jake: Yeah. We dabbled in a little bit of artificial intelligence for our stuff. It was the one you were talking… It was just your latest one about artificial intelligence with… I forgot his name already… but it was really interesting.
Perry Marshall: All of that stuff. All of the great issues of our age actually converge there. And nobody really knows it. Like when Elon Musk starts talking about AI taking over. Like, “No, AI is not taking over. The people that own it are taking over.”
Perry Marshall: Hello. There is no I. It’s just A.
Jake: Well said. Well said. I love it. Oh man, that’s great.
Perry Marshall: In fact, yesterday … Yesterday, I was running my Advanced Mastery Network group. It’s a $40,000 a year program with just a handful of people. And one of the hot seats was with these guys and we were talking about well, should we just call what you guys do AI? And we decided since well, just about anything with a computer in it is called AI now, sure why not? Right? And for that matter, let’s just call it big data because their software platform has actually done 180 million this or that or the other thing. Right? So is that big data? Sure it is. Right?
Jake: Good to me. Right? Oh, I love it. I love it.
Perry Marshall: One of my clients said, “You know, Perry, I think one of the things that makes you successful is you have a healthy disdain for marketing.” And I’m like, “Yeah. Yeah, that’s about right. You know?” We have to be careful not to believe our own PR too much, if you know what I mean.
Perry Marshall: Which actually, I think the thing I love about marketers is for the most part we don’t. You get a room full of marketers and everybody kind of … They’re all a little cynical and we all say, “Hey man, we’ve all got to make a living.” And Homer Simpson out there is not very bright and we’ve got to sell to that guy. We have no choice or our kids will starve. Okay? But you know, all right, given that, how do we do good in the world? I mean, that is generally the tenor of most marketing conversations I have. Most people I encounter, they have something really good and really cool, they just can’t figure out how to explain it to Homer Simpson. Or they have a vitamin that is actually made out of real ingredients instead of fake ones and Homer Simpson can’t tell the difference. And everybody else is saying all this crazy stuff. So it’s hard, man. It’s not easy. So I take my hat off to anybody that’s trying to take the high road.
Jake: I love that. I’m actually … I think we should just keep rolling with this.
Perry Marshall: Yeah.
Jake: And we’ll do the intro at the end.
Perry Marshall: Right. Sure, sure.
Jake: This is great content. And I’ve heard you use the Homer Simpson reference before. When did you come up with that? Or did you come up with that?
Perry Marshall: I didn’t come up with that. I remember it from Jeff Paul … who most marketers don’t even remember any more … about 20 years ago. I was at this seminar and he said, “I think the best invention in the history of marketing is Homer Simpson.” And so, this was ’97, and the Simpsons had been out maybe five years so everybody knew who Homer Simpson was. He said, “Seriously,” he said, “Listen, like hello everybody, shake you by the lapels, you are selling to Homer Simpson. What does he want? He wants the donuts. How are we going to get to the donuts faster? Or how are we going to get to the Michelob faster? This is where most people are at.”
Or John Carlton, famous copywriter, he would say, “You are selling to the somnambulant sloth.” This guy, this big pear shaped creature who is sitting on his chair with a remote control and every single … If he gets bored for four and a half seconds, he can press a button on the remote control and he can go to the next channel. And you have to light a fire under his butt in order to get him to do anything. Right? And so, you think about how people are.
So, one of the basic realities of marketing is marketing is manipulation. Okay? And a lot of people are squeamish about that. Now especially people like me. I’m an electrical engineer. I read science books with footnotes. I read the footnotes and I want to check everything out and make sure it’s all right. I’m that guy. And I want people to buy based on virtue and goodness and it’s based on a real actual true principle instead of just some story somebody made up.
So I want to speak to the people who are squeamish about manipulation. There’s this great, great classic story in the Bible where King David, he’s spent the last 20 or 30 years being chased around through mountains and valleys and hustling. Hustling and hustling and more hustling and more hustling. And now, he’s finally king and he’s really successful. And one day, he sees this woman bathing on a roof somewhere. And he’s like, “I like her.” So he summons her to the palace and they sleep together and he gets her pregnant and oh no, what are we going to do now? Well, how about her husband is in the army, why don’t we just put him in the front lines of the battle where he’s probably not going to do too well. And then, the husband gets killed and then David marries Bathsheba. And then, nobody knows.
So, here’s where the manipulation part comes in. Nathan, the prophet, shows up and he goes, “Oh King, an issue has arisen in the kingdom and I need your advice.”
“Okay Nathan, let’s put it out there.”
“Well, there was this rich man and he has hundreds and hundreds of sheep. And then, there was this poor man and he’s got one sheep. And they love the sheep and the kids sleep with the sheep and they play with the sheep. And the rich man had this guest and he didn’t really want to kill his own sheep so he took the poor man’s sheep and he slaughtered that sheep and served it for dinner. And oh King, I just want to know what you think we should do about this?”
And he says, “Execute that man.”
And he says, “You are that man.”
And all of a sudden, he’s like, “Oh,” and the whole façade just crumbles and he’s like, “Oh, I am a bad dude. I thought I was a good dude. I am a bad dude.”
Okay. Now that story is a story of manipulation if there ever was one. Okay? It’s also an illustration of an old copy writing adage, “Make the strange familiar, and the familiar strange.” Right?
Perry Marshall: And this is what you have to do to get people to buy. And everybody does it. And look, just think about it like this. We can seriously consider and think about, I don’t know, one, two, three, five things in a day. And we have 500 decisions to make every day. So 99% of our decisions have to be extreme shortcuts. Right?
Perry Marshall: I don’t know what kind of motor oil I should really buy. I mean, come on. Right? How much do I know about motor oil. It comes in a can. Right? And so, marketing is telling a story that will communicate the truth. And so, it comes down to who’s doing it. And if you figured it out and if you’ve gone to the bottom of the swamp and you know you have a vitamin with better ingredients than 95% of the other vitamins, then as long as you’re telling the truth and you’re not lying, then you need to say whatever story is going to communicate the truth about what you sell. And you just have to accept the fact that Homer Simpson is not going to open a scientific paper and check all the references. He’s just not going to do it.
And then, if you sell to people who do do that, usually they’re so indecisive, you end up wasting enormous amounts of time with them anyway and you never convince them. Right? And so, it’s not like the anal people really, truly have a leg up over everybody else because they don’t.
Perry Marshall: So marketing is, it’s kind of a dirty job. All right? But if you can do it well, there’s enormous rewards for doing it well. And I do a lot of work in science, serious work in science, as a matter of fact. I founded the largest fundamental science prize in history, $10 million. And what most people think of as science is really marketing. Whatever you think you know about Stephen Hawking, trust me, it’s marketing. Okay? Homer Simpson sure ain’t figuring out the expansion rate of the big bang or whatever.
And so, we live in a world of marketing. And there is a summons to the responsible, ethical people to do it very well. And there’s a delusion that lots of people, like goodhearted, wholesome salt of the earth kind of people have, which is “Well, this is so good, it just ought to sell itself. This product is so good it really should just jump off the shelf into the customer’s shopping cart,” and it doesn’t.
And then, the problem is most of marketing or much of … quite a bit of it … is run by sociopathic narcissists who have no breaks. They have no compunction about seeing anything. The media is completely run by these people. I’ll give you an example from yesterday. So yesterday, I’m running this very high level training mentoring group that I have called Advanced Mastery Network. So one of the guys in the group is the largest website for solar power installation quotes in Australia. And solar power is huge in Australia for a bunch of reasons. One of it is it’s kind of a sunny country so solar power works really well there and it’s-
Jake: Right in line with the light, right?
Perry Marshall: … right. Okay, and solar power is about three times more … No, regular electrical power from the grid is three times more expensive in Australia as it is here. So tons of homes have solar power.
So Finn Peacock, he runs this company. He’s a very big deal. It’s almost like he’s a micro-celebrity in Australia. He’ll meet people on an airplane and it’s like, “Oh, that’s your picture on the corner of that website because I bought … yeah, I did that thing.” So Finn comes to the group and he goes, “All right. So there’s this quasi-government agency that they wanted to throw somebody under the bus and so, there’s some regulation that a licensed electrician has to be on site. And one day, the inspector shows up, the licensed electrician had driven to the hardware store to pick up some stuff for the crew. He was not there and they were like, ‘Aha!’ And not only did they just pounce on this solar installation company, the next day in the newspaper, there’s a headline that says, ‘Dodgy solar installation company.’ And then, they’re telling everybody that your solar power thing could start on fire.” And it was total BS. Okay? Total BS.
Well, the media and some advertising … not all, but certainly some … and the news and everything is full of people just making up stuff like this. They are trashing a perfectly good business, throwing it under the bus for some nefarious, who knows money under the table, and everything else. Right?
Perry Marshall: Okay. Stuff like this happens. And if you’re a good, virtuous, salt of the earth, go to church on Sunday kind of person, you probably have to hold your nose when you wade into all this. And guess what? In 2020, if you want to do good in the world, you got to compete with guys like that. It gives a whole new meaning to wise as serpents and gentle as doves. Hello? And let me remind you, people in … oh, let’s say 30 AD … they weren’t a lot better. You know?
Perry Marshall: They had their own ways of throwing people under the bus. And getting thrown under the bus by the Romans was a lot, shall we say, worse than being thrown under the bus in Australia.
Perry Marshall: Okay. So the world is full of bad stuff. And so, it’s a clarion call. You need to go in there, gird your loins, and figure out how to say what you need to say and build a loyal customer base, and build the customer reviews, and build the reputation so that if anybody says something that ridiculous about you, they just sound ridiculous and they know better than to not say it.
Perry Marshall: And so, that requires tons of proof and tons of credibility so go get it. Start now.
Jake: I heard Jerry Seinfeld say in comedy, comedy is going through a similar thing right now where it’s so easy for someone to get up and make dirty jokes. And he said clean comedy is so much harder to pull off.
Perry Marshall: Yes.
Jake: And he feels like that the clean comedy is going to be, ultimately, there’s this battle. But those who can do clean comedy are going to be so much better off because they work harder… they have to work harder to do it. And I think that’s kind of what you’re saying in some senses.
Perry Marshall: That is very analogous to what I’m saying. And let’s also recognize that Jerry Seinfeld is a household word. Ron White is not. Right? Now if you know comedy, then you know all these guys. Right?
Perry Marshall: Yeah. But Seinfeld is the highest bar. And as far as I know, he’s not putting weird chemicals in women’s drinks and seducing them either. He seems to be a good guy. Right?
Perry Marshall: And so, yes, the high bar. If you can do the high bar, there are enormous rewards. And so, along that line, I can’t remember which celebrity it was, because I don’t keep up with celebrities. But I went to a fundraiser for a theater company a few years ago. And a guy who is a celebrity was the keynote speaker.
Perry Marshall: And he said, “G movies make nine times more money than R movies.”
Perry Marshall: He said, “Dirty little secret, most people in Hollywood being artists, they want to push the envelope and they want to do crazy, experimental things.” He said, “A good, well written, well produced, well directed, family movie makes way more money.”
Jake: So interesting.
Perry Marshall: Than Blade Runner or I don’t know, whatever. And I’m not criticizing Blade Runner but I’m just saying, it’s like oh you know, so Mom and Dad can take the kids to the movie after the birthday party and they’re not worried about whatever is going to… yeah, those kind of movies make a ton of money. That’s the kind of movies Disney makes. Right?
Perry Marshall: And so, look there are rewards for the high bar. And as a fairly famous marketing consultant and author, I can absolutely promise you. You can write it in blood. If you have a reputation where people know that anything you say is trustworthy or at least reasonably trustworthy, there’s all kinds of battles that you just simply will not have to fight. And the first five years may be a long haul but when you’ve established that reputation, there’s all kinds of things that start tilting in your favor in time. Trust me.
Jake: That’s awesome. That is some sage advice for our listeners right there. I want to switch gears a little bit. But actually, I have one thought too. I just saw an article yesterday on the guy who did the singing part for the original Lion King, the cartoon from Disney. And it said that he was offered $2 million at the time they produced that video to do his singing. That’s a pretty good gig.
Perry Marshall: Okay. I’ll stop drinking milk for a couple weeks, sure, no problem.
Jake: Yeah. So he was offered $2 million. His mom convinced him not to do it and just take royalties instead.
Perry Marshall: Yeah.
Jake: And so, he’s like 40-years-old now, grown up, and he didn’t disclose how much but he said that it was the best financial decision that he’s ever made, or his mom ever made for him, was to take the royalties instead.
Perry Marshall: Good for her. That is excellent.
Jake: That would be a hard decision.
Perry Marshall: Yeah, yeah.
Jake: That’s good on her. But it kind of reiterates the G-movie is making some good money. I want to switch gears real quick and talk about what you’re famous for, the 80/20. You want to talk about the 80/20 and give our listeners … a bunch of our listeners have probably read your book but if not, you should definitely go read his book and we’ll talk about that where you can get it in a minute. But Perry, tell us a little bit about 80/20, how you came into this 80/20, and how it applies to our listeners.
Perry Marshall: So I am probably best known as the guy who wrote the book on Google advertising, Ultimate Guide to Google AdWords. It sold over 100,000 copies. And it’s kind of-
Jake: It’s the number one selling book on internet marketing, right?
Perry Marshall: In internet advertising, at least. Yes. If it’s about advertising, yeah, it’s the bestselling book. And 80/20 is the backbone of how I figured out Google Ads. In fact, when I wrote the 80/20 book, the question in my mind was, “I wonder if I can give people the toolkit that helped me figure this out. And I wonder if Homer Simpson will accept that.” Well, Homer Simpson did accept that.
And so, 80/20 is probably, I imagine, most people have heard somewhere that an Italian guy named Vilfredo Parato figured out that in all the different countries … he was an economist … all the different countries he looked at, 20% of the people had 80% of the wealth and owned 80% of the real estate. And the other 80% of the people, had 20%. And most people have heard some version of that. And a lot of people talk about it now in sales. 20% of your customers produce 80% of your revenue. And 80% of your customers produce 20%. And in fact, I read this in a sales book in the ’90s and I was a sales manager and I was like, “Hmm, is that right?” And I printed out a QuickBooks report and I go through it and I was like, “I’ll be darned. It’s true.”
So at that point, I thought I understood it. And this is what most people might hopefully have heard somewhere. Well, it’s true. But you don’t really understand it yet at this point. Because first of all, I thought that oh well, this is true for some weird reason and it happens to be true about wealth and real estate and sales. The first thing I didn’t understand is no, this is like a universal … this is almost like a law of physics. There are so many things in the world that are 80/20, you cannot count them.
So if I go to the beach and I get a bucket of sand, if I actually measured the diameter of the sand, 20% of the sand occupies 80% of the bucket. And 20% of the cars drive on 80% of the roads and 80% of cars drive on 20% of the roads. And 80/20 is true of that track of dirt on the carpet through the middle of your house because 80% of the footsteps are on 20% of the carpet. And it’s the size of craters on the moon and it’s rabbit populations and it’s biology. And it’s the size of stars and planets and meteorites and every … it’s all over the place. It’s a universal law of cause and effect.
Now when I say that, I’m completely serious. I’m like, “Okay, no. Cause and effect itself is 80/20.” So it’s everywhere. You cannot look out your window without seeing somewhere where 80/20 is massively shaping whatever you’re seeing. That tree outside my window is 80/20. 80% of the leaves are in 20% of the branches. So, it’s inevitable. And in the second … and so, there’s lots, lots, lots of ways to use it in business. And so, we’ll talk about that.
The other thing is it’s fractal. Now what’s that? That’s another one of these weird words. Fractal means pattern inside a pattern inside a pattern inside a pattern inside a pattern. And fractal means repeating pattern that’s the same whether you’re looking at it in a microscope or a telescope. You see the same pattern. So think fractal would be in atoms, we’ve got electrons orbiting nucleuses. And in solar systems, we have planets orbiting stars. Well, what’s the size difference between an atom and a solar system? That’s fractal. Well, 80/20 is fractal.
What it means is, 20% of the salespeople make 80% of the sales. But 20% of 20% of the salespeople make 80% of 80% of the sales. And 20% of the millionaires have 80% of the millions. And 20% of the billionaires have 80% of the billions. And 20% of the poor people have 80% of the can of beans. It’s everywhere.
It’s a reality that most people fight when they should be harnessing it. So when Bernie Sanders promises everybody that there’s going to be a diploma in every hand, and a vehicle in every garage, and a chicken in every pot, and a free college education for every student. He is claiming to be able to reverse a law of physics. Not only is he not going to do it, he’s going to manage to make somebody really, really rich taking money away from the hard working people who are paying the taxes. It’s going to end up-
Jake: The universe is going to find a way to squish it out somewhere else, right?
Perry Marshall: Yes. That’s … yes. In fact, that’s a quotable quote, right? The universe is going to find a way to squish it out somewhere else. Okay? Now what’s the truth? The truth is is that 300,000 people are being lifted out of poverty every single day by United Nations standards, by cellphones and technology and wells and water and agriculture and farming and genetics and whatever. The law of physics say somebody is going to be as rich as Jeff Bezos and there’s nothing you can do to change it. What you can do is you can raise the level of everyone. And there’s nothing that stops a rich person from being generous. And we need to train entrepreneurs and CEOs and tomorrow’s leaders generosity is a great thing and you can do great things with your money. When you give money to things and you’re checking up on them, it does a lot more good than when the government does.
All right. So there’s a social political rant for a second. But understand, 80/20 is going to be true in your business. Most columns of most spreadsheets and most advertising reports and most conversion optimization reports and however propeller head you want to get into the numbers of any business, most of the columns are 80/20.
Jake: That’s amazing.
Perry Marshall: Sort them from top to bottom. The top 20% of the columns have 80% of whatever it is. Impressions, clicks, sales leads, sales, upsells, cross-sells. If you hire 10 salespeople, it’s pretty much a law of physics that two of them will outsell the other eight. There’s nothing you can do about it. There’s nothing in your intake process. There’s nothing. It’s going to happen. Now you can recruit better ones or you could recruit worse ones, but whatever 10 you’re going to get, they’re going to fall on an 80/20 curve.
Okay, so what do you do with that? Well, what most people try to do is they go, “Oh, let’s nurse these runts to health. Let’s give them milk bottles and let’s give them formula. Let’s give them shots. Let’s take them to the vet.” Well, no. Honestly, you need to get rid of at least half of them, probably six or seven out of 10, you’re going to have to get rid of. And then, you take all your energy and you pour it into your top ones. You give them every possible resource they could need to get better, to not waste their time. No. Let’s talk about the seven. Because the way our employment system is and the way that we think about hiring people is, “Well gee, we should hire somebody and give them a job for life or something.” Well, that’s not how the world works. How about we frame it so it’s no harm, no foul if they don’t work out and everybody just kind of like, “Hey, you know, it’s no big deal.”
I’ve got a friend in Montana, Sid, he calls it a paid, two week interview.
Jake: Okay. I like that.
Perry Marshall: Okay. So I am hiring you for two weeks and this is a paid interview. And he has a window washing company. You’re going to be washing windows and we’re going to pay you just like everybody else. But you’re not officially an employee for the first two weeks. Or it might have even been two months. I don’t remember. But it’s like at any time, either one of us can just call a halt to this whole thing. You don’t like me, I don’t like you, you’re not doing a good job, this is not your bad, whatever. And it’s like he’s just sifting and sorting, he’s looking for the good ones. Right?
Perry Marshall: And it’s like, “Hey, I had a two week paid interview with window company. And it just really wasn’t our thing but I got a check and we washed some windows.” And then, you’re onto the next thing. You could put it on your resume if you wanted to. No, I didn’t get fired. It’s just we sat down at the end, “Is this working?” “No.” All right. So now I’m talking to you about working at Jiffy Lube. So you’ve got to think about this differently. You also need to think about your clients differently.
I gave a keynote at this conference with a whole roomful of CPAs once. And I said, All right, so how many of you have that client? They give you this giant shoebox full of all these receipts and papers and you can’t make any sense out of it and you can’t read their handwriting. And they send you 47 emails a day and they turn in their stuff on April 14 at 8:00 at night. And they’re only paying you like $300 bucks. How many of you have that client?” All these hands go up. And I go, “I, Perry Marshall, bestselling author, keynote speaker, I give you permission to fire them.” You don’t have to be mean about it. You just send them a letter.
“Dear John, my executive team and I have been reviewing our business and we’re going to take our direction significantly different in 2020 and we just can’t serve all of our clients anymore. And so, we’re going to be helping you find a different CPA firm who is better suited to what you need. And we’re going to hand it off all really nice.” And you’re like, “Whew, I don’t have to do taxes for that guy again.” Right?
Perry Marshall: And the truth is is that most companies lose money. They literally are in the red with 10-20% of their clients. And 10-20% of their profits, and products. 10-20% of the products you sell, you are probably taping dollar bills to every box that gets shipped out. And you would make more money if you didn’t sell it at all, and you don’t know it. And it’s true of your clients. It’s almost always true. And so, you can reduce and cut. I mean, it’s surgery. If you go get surgery … Okay, anybody could take out your spleen.
Perry Marshall: Anybody. All they need is a knife and the knife is probably in your kitchen right now. But if you don’t want to bleed to death, you need a surgeon. Okay? Well, that’s what reducing and cutting is in business. You should get minimum … At minimum, you should cut 5% of your product line. You’re losing money on it. It’s not helping you.
Jake: Same with probably people’s activities, their time management, too, probably. Right?
Perry Marshall: Totally. Totally.
Jake: That’s what I’ve been thinking a lot about lately is is what’s my 20% time that I should be using instead of whatever I’m doing right now?
Perry Marshall: Well, 20% of your time produces 80% of your productivity. And then, so let’s go to the fractal part. 20% of 20% of your time produces 80% of 80% of your results. So that’s 4% of your time is 64% of your results. Well, then you can do it again which means 1% of your time is 50% of your results. So everybody who’s listening who is on straight commission, or you’re an entrepreneur and you’re like eat what you kill. Last year, half of your income came in a week’s time. Now, the week might be scattered out. So I closed this deal in April. I closed this deal in June. I closed this other deal. But if you look at it, half of my income was earned in those very short time periods and the rest of the year, I was just playing Pat-a-Cake. It’s almost guaranteed to be true. Okay?
Perry Marshall: Now the starting point is to be super mindful of when was I making $1,000 an hour? When was I making $10,000 an hour? Because 80/20 says there are brief periods of time when you’re making literally $10,000 an hour, or losing $10,000 an hour. So here’s an example, Woodlake Dental. Helen is the receptionist. It’s 9:30 in the morning and there’s a lot of stuff going on in the office. “Woodlake Dental, would you hold, please?” And then, you put them on hold. So I know a dental practice management guru who he actually did this at a seminar. He’s got 400 dentists in the room. There are some states where it is legal to record a phone call without telling the other person. So he called the offices in those states.
He recorded the calls and he said, “So, Dr. Johnson from Mississippi is here. Hi, Dr. Johnson.” “Hi.” He goes, “Well, I apologize for this, Dr. Johnson, but we called your office and we recorded what happened and we’re going to play it for everybody on the PA system.” And all the dentists, “Hi, this is Helen at Woodlake Dental, please hold.” And then, 400 people sit there and listen to hold music. And then, “Hello, has anybody helped you?” Blah, blah, blah. “Oh, just a minute,” right? Then they get put on hold again. Then it’s somebody else. Then, it’s, “Oh no, let me transfer you.” And 400 dentists are excruciatingly listening to this horrible thing.
Now, it sounds obscene. It sounds cruel to play it in front of 400 dentists, but let me remind you, he spent thousands of dollars a month on Facebook Ads, Google Ads, billboards, what have you. He’s got overhead of running the company of at least hundreds of dollars an hour, all the time, maybe thousands of dollars an hour, running this dental practice. Now this person calls and they want $15,000 of dental work and they get put on hold for 15 minutes. And then, they hang up and then, they call somebody else. So Helen lost $15,000 sale with two minutes of hold music. So that’s $7,500 a minute. Right?
Perry Marshall: So I think that’s like $500,000 an hour. Are you going to tell me that some of your time is not worth $1,000 an hour or $10,000 an hour. There’s one or two minutes of your day that’s worth $10,000 an hour if you’re Helen the receptionist. And she’s just a receptionist. She’s not negotiating the release of the Iranian hostages or anything.
Perry Marshall: So how much is the release of the Iranian hostages worth? Let’s say that’s a three hour negotiation and he gets 50 people out of some prison somewhere. How much is that worth? It’s incalculable. So in life, there are these narrow bands of exquisitely valuable activity.
Now, so if the owner of Woodlake Dental sits down and he goes, “Okay, we are going to devise a foolproof system where nobody can ever be put on hold for more than 30 seconds. And we’re going to devise a system so the right person, the phone call always gets to the right person the first time. And if we have to sit in meetings for four hours and map out every last question, this question goes to Susan. This question goes to Greg. This question goes to Scott,” and you map it all out. Those meetings are worth $10,000 an hour. To make sure that the $15,000 patient never gets lost. Once you start seeing the world this way, you realize you never run out of stuff to fix. You never run out of improvements you can make. You never run out of 80/20s. And some of them are incredibly powerful. And look, we’ve only been talking about this for … what? … 15 minutes. I hope you can see the possibilities.
Jake: It is such a … and I think it’s one of those things where a lot of times people will hear it and they’ll be like … a lot of our listeners are nodding their heads right now saying, “Man, I think I get it,” but they really don’t. And you don’t really get it until you start implementing it. Right?
Perry Marshall: Right.
Jake: There’s a level of learning and a level of implementing. But I think this is a great spot. I would love to send people to get this book. You have a special offer on your website for this. Right?
Perry Marshall: I do. The book is called 80/20 Sales and Marketing. And it’s about $18 bucks on Amazon. You could get it for $7 in the US at sell8020.com. It’s a penny plus shipping, $6.99 plus a penny. So we actually do, we deliberately tape dollar bills to this book because I want people to read it.
Perry Marshall: What happens when people read this book is they’re like, “Oh my word. I never saw all of that before. And now, all of a sudden, I see it everywhere. And me and my wife are at the mall and I’m saying, ‘Honey, look. That’s 80/20 right over there at that jewelry counter because 20% of those rings produce 80% of the revenue. And you know what? I bet they’re losing money on 10% of the rings they sell and they don’t even know it. I could be a consultant to jewelry companies and I could …'” Yeah, you could. Seriously, you could. Right? So if you go to sell8020.com, you can buy this book. And it will totally change your life.
In fact, it’s starting to get taken seriously by even other groups of people outside my circle. There’s a website connected with it. It’s 8020curve.com, and it allows you to calculate things like so if I’m selling 1,000 espressos a week at Starbucks, how many $2,700 espresso machines am I going to sell? It works and it’s true. And the math for that just got published in Harvard Business Review last year. So even people in academia are starting to take this seriously. When I got into this, I was like, “I don’t think anybody is really explaining 80/20 correctly, even though it’s been around for 100 years.” There’s layers and layers to this stuff.
I think you should read this book five times. I mean, I realize that’s immodest but it’s just true. 80/20 is so deep. It’s like marshal arts. Okay, so when you’re a green belt or even … If you get the yellow belt in marshal arts, you already know enough about a kick of a punch that you could probably get yourself out of a pretty sticky situation like with one kick. Well, what if you’re a third degree black belt? Then what can you do?
Everything we’ve been talking about today is like white belt/yellow belt stuff. What if you had a brown belt?
Jake: It just keeps … exponentially it gets better. Right?
Perry Marshall: Mm-hmm (affirmative).
Jake: I loved the concept of … I always read every book that I read that’s worth it, I always read at least twice. And 80/20 is one you should definitely buy and definitely … 80/20 Sales and Marketing that’s at sell8020.com … You should definitely buy that and read it more than once because the first time you think you’ll get it and then you’ll read it back again and be like, “I didn’t understand it the first time. Now I understand it.” And you’ll keep getting deeper and deeper into the onion and you’ll find a lot of areas where you can improve your life. So we’ll put that link in the show notes as well.
Perry Marshall: When I was in my 20s, I was in multilevel marketing. And man, I’m going to be a diamond and all this kind of stuff. Okay? I picked up a phrase while I was doing that, and the phrase was, “Massive action solves every problem.” And I wrote that on my cubicle at work. And you know what, that is the worst advice ever. You know what massive action does? It creates problems. Massive action creates problems. What solves problems is time and space to think about the problems and define the problems and figure out what the real problems are. And figure out what is the 1% of the problems that are causing 50% of the aggravation. That’s what you should be doing.
And so, I got into this mindset and this habit of work, work, work, work, work, work … like insane workaholic, bust my ass, go as fast as I can, mock two with my hair on fire, never stop, never take a day off. Okay, so I very nearly murdered my marriage. I got myself on the verge of ulcers. I pushed myself to the edge of … I don’t know if I was on the edge of the nervous breakdown but I was at least getting into that territory for sure. I was making myself sick. It was driven by guilt. And most of what I was doing was a complete waste of time. I wasted enormous amounts of time. It was like, “Well, as long as I’m working, I’m not a bad guy.” It was that sort of thing. And I was so unsuccessful and I just felt guilty and worthless.
80/20 says, 80% of that, you could just sweep off the table. I have a client who he has grown a company from, in the last four or five years, $360,000 to $600,000 to north of one million, to two and a half million, to six million, to $12 million.
Perry Marshall: Okay, now. There’s lots of people that could go to $300,000 to $600,000 to a million, that happens a lot. Keeping going at that rate past $10 million, that is really unusual.
All right. So back when he was at $360,000, in that business, he had a 15% profit margin and he had a business partner which means he wasn’t making much money. All right? He was living in his mother-in-law’s basement with his wife and kids. And he had a job … So, the company they were running was really not even paying the bills. And he had a job selling Catholic advertising in Catholic church bulletins. Now, that’s a hot gig, man, right? Man, I’m sure there’s a lot of money in that. He was making like $35 or $40K a year. He said to his wife, “Honey, I can’t make this business work if I’m making 150 phone calls a day in this other job and at the end of the day, I’m burned out. I am quitting my $40,000 a year job and I am literally going to go to the coffee shop and I’m going to figure out this other business. And that is what I am doing and you’re just going to need to trust me that I’m working and I’m not screwing up and being on Facebook.” And she’s like, “Okay.”
And he got his mindset right and that is why. Well, he got all of it right. It was like okay, kind of advanced Perry Marshall stuff which I don’t have time to get into. This is a star business. This is a simplifier. We’re going to do all these things correctly and we’re going to build a proper foundation, that is why he went from over a million, two and a half million, six million, $12 million. He did it right. Even when he was broke, he did not capitulate to the guilt of incessant 10 cents an hour mindless activity.
Jake: I love it. I love it. Again, everybody. That website is sell8020.com. Go there, buy the book. It can really honestly, truly, totally flip your paradigm and teach you how to run your business better than you know how to right now. So do that. And Perry, thank you so much for being on the podcast. You dropped some serious knowledge on our listeners today. I’m very, very grateful for all your wisdom.
Perry Marshall: Jake, thanks for having me on. It was a real honor to be here. And I appreciate everybody listening in.
Jake: Perry, that was awesome. That was my favorite podcast I’ve done. So, that was great.
Perry Marshall: Cool, well, thank you. I’m glad. I’m delighted. I’ve got another book coming out in a few months, maybe we could do another one about that one. It’s called Multiple by Subtracting.
Jake: Let’s do it. I’m totally … Yeah, let’s for sure put it on the calendar. I’ve got to hop onto another podcast here in just a minute but I really … I’ll have Trent followup with you and let’s definitely get that on the schedule for when that book’s ready to go.
Perry Marshall: Okay. You’re on.
Jake: Awesome. Thank you so much for your time, Perry.
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