The 4-Hour Workweek (25 page)

Decide now to do business with the former and avoid the latter. I recommend looking at the customer as an equal trading partner and not as an infallible blessing of a human being to be pleased at all costs. If you offer an excellent product at an acceptable price, it is an equal trade and not a begging session between subordinate (you) and superior (customer). Be professional but never kowtow to unreasonable people.

Instead of dealing with problem customers, I recommend you prevent them from ordering in the first place.

I know dozens of NR who don’t accept Western Union or checks as payment. Some would respond to this with, “You’re giving up 10–15% of your sales!” The NR, in turn, would say, “I am, but I’m also avoiding the 10–15% of the customers who create 40% of the expenses and eat 40% of my time.” It’s classic 80/20.

Those who spend the least and ask for the most before ordering will do the same after the sale. Cutting them out is both a good lifestyle decision and a good financial decision. Low-profit and high-maintenance customers like to call operators and spend up to 30 minutes on the phone asking questions that are unimportant or answered online, costing—in my case—$24.90 (30 x $0.83) per 30-minute incident, eliminating the minuscule profit they contribute in the first place.

Those who spend the most complain the least. In addition to our premium $50–200 pricing, here are a few additional policies that attract the high-profit and low-maintenance customers we want:

Do not accept payment via Western Union, checks, or money order.

Raise wholesale minimums to 12–100 units and require a tax ID number to qualify resellers who are real businesspeople and not time-intensive novices. Don’t run a personal business school.

Refer all potential resellers to an online order form that must be printed, filled out, and faxed in. Never negotiate pricing or approve lower pricing for higher-volume orders. Cite “company policy” due to having had problems in the past.

Offer low-priced products (à la MRI’s NO2 book) instead of free products to capture contact information for follow-up sales. Offering something for free is the best way to attract time-eaters and spend money on those unwilling to return the favor.

Offer a lose-win guarantee (see boxed text) instead of free trials.

Do not accept orders from common mail fraud countries such as Nigeria.

Make your customer base an exclusive club, and treat the members well once they’ve been accepted.

The Lose-Win Guarantee—How to Sell Anything to Anyone

If you want a guarantee, buy a toaster.

—CLINT EASTWOOD

The 30-day money-back guarantee is dead. It just doesn’t have the pizzazz it once did. If a product doesn’t work, I’ve been lied to and will have to spend an afternoon at the post office to return it. This costs me more than just the price I paid for the product, both in time and actual postage. Risk elimination just isn’t enough.

This is where we enter the neglected realm of lose-win guarantees and risk reversal. The NR use what most consider an afterthought—the guarantee—as a cornerstone sales tool.

The NR aim to make it profitable for the customer even if the product fails. Lose-win guarantees not only remove risk for the consumer but put the company at financial risk.

Here are a few examples of putting your money where your mouth is.

Delivered in 30 minutes or less or it’s free!

(Domino’s Pizza built its business on this guarantee.)

We’re so confident you’ll like CIALIS, if you don’t we’ll pay for the brand of your choice.

(The “CIALIS® Promise Program” offers a free sample of CIALIS and then offers to pay for competing products if CIALIS doesn’t live up to the hype.)

If your car is stolen, we’ll pay $500 of your insurance deductible.

(This guarantee helped THE CLUB become the #1-selling mechanical automobile anti-theft device in the world.)

110% guaranteed to work within 60 minutes of the first dose.

(This was for BodyQUICK and a first among sports nutrition products. I offered to not only refund customers the price of the product if it didn’t work within 60 minutes of the first dose, but also to send them a check for 10% more.)

The lose-win guarantee might seem like a big risk, especially when someone can abuse it for profit like in the BodyQUICK example, but it isn’t … if your product delivers. Most people are honest.

Let’s look at some actual numbers.

Returns for BodyQUICK, even with a 60-day return period (and partially because of it57), are less than 3% in an industry in which the average is 12–15% for a normal 30-day 100% money-back guarantee. Sales increased more than 300% within four weeks of introducing the 110% guarantee, and returns decreased overall.

Johanna adopted this lose-win offer and came up with “Increase sport-specific flexibility 40% in two weeks or return it for a full refund (including shipping) and keep the 20-minute bonus DVD as our gift.”

Sherwood found his guarantee as well: “If these shirts are not the most comfortable you’ve ever worn, return them and get 2-times your purchase price back. Each shirt is also guaranteed for life—if it gets threadbare, send it back and we’ll replace it free of charge.”

Both of them increased sales more than 200% in the first two months. Return percentage remained the same for Johanna and increased 50% for Sherwood, from 2 to 3%. Disaster? Far from it. Instead of selling 50 and getting one back with a 100% guarantee [(50 x $100) – $100 = $4,900 in revenue], he sold 200 and got six back with the 200% guarantee [(200 x $100) – (6 x $200) = $18,800 in revenue]. I’ll take the latter.

Lose-win is the new win-win. Stand out and reap the rewards.

Little Blue Chip: How to Look Fortune 500 in 45 Minutes

Are you tired of sand being kicked in your face? I promise you new muscles in days!

—CHARLES ATLAS, strongman who sold more than $30 million worth of “dynamic-tension” muscle courses through comic books

If approaching large resellers or potential partners, small company size will be an obstacle. This discrimination is often as insurmountable as it is unfounded. Fortunately, a few simple steps can dramatically upgrade your budding Fortune 500 image and take your muse from coffee shop to boardroom in 45 minutes or less.

1. Don’t be the CEO or founder.

Being the “CEO” or “Founder” screams start-up. Give yourself the mid-level title of “vice president” (VP), “director,” or something similar that can be added to depending on the occasion (Director of Sales, Director of Business Development, etc.). For negotiation purposes as well, remember that it is best not to appear to be the ultimate decision-maker.

2. Put multiple e-mail and phone contacts on the website.

Put various e-mail addresses on the “contact us” page for different departments, such as “human resources,” “sales,” “general inquiries,” “wholesale distribution,” “media/PR,” “investors,” “web comments,” “order status,” and so on. In the beginning, these will all forward to your e-mail address. In Phase III, most will forward to the appropriate outsourcers. Multiple toll-free numbers can be used in the same fashion.

3. Set up an Interactive Voice Response (IVR) remote receptionist.

It is possible to sound like a blue chip for less than $30. In fewer than ten minutes on a site such as www.angel.com, which boasts clients such as Reebok and Kellog’s, it is possible to set up an 800 number that greets callers with a voice prompt such as, “Thank you for calling [business name]. Please say the name of the person or department you would like to reach or just hold on for a list of options.”

Upon speaking your name or selecting the appropriate department, the caller is forwarded to your preferred phone or the appropriate outsourcer—with on-hold music and all.

4. Do not provide home addresses.

Do not use your home address or you will get visitors. Prior to securing an end-to-end fulfillment house that can handle checks and money orders—if you decide to accept them—use a post office box but leave out the “PO Box” and include the street address of the post office itself. Thus “PO Box 555, Nowhere, US 11936” becomes “Suite 555, 1234 Downtown Ave., US 11936.”

Go forth and project professionalism with a well-designed image. Perceived size does matter.

COMFORT CHALLENGE

Relax in Public (2 days)

This is the last Comfort Challenge, placed prior to the chapter that tackles the most uncomfortable turning point for most office dwellers: negotiating remote work agreements. This challenge is intended to be fun while showing—in no uncertain terms—that the rules most follow are nothing more than social conventions. There are no legal boundaries stopping you from creating an ideal life … or just being self-entertained and causing mass confusion.

So, relaxing in public. Sounds easy, right? I’m somewhat famous for relaxing in style to get a laugh out of friends. Here is the deal, and I don’t care if you’re male or female, 20 or 60, Mongolian or Martian. I call the following a “time-out.”

Once per day for two days, simply lie down in the middle of a crowded public place at some point. Lunchtime is ideal. It can be a well-trafficked sidewalk, the middle of a popular Starbucks, or a popular bar. There is no real technique involved. Just lie down and remain silent on the ground for about ten seconds, and then get up and continue on with whatever you were doing before. I used to do this at nightclubs to clear space for break-dancing circles. No one responded to pleading, but going catatonic on the ground did the trick.

Don’t explain it at all. If someone asks about it after the fact (he or she will be too confused to ask you while you’re doing it for 10 seconds), just respond, “I just felt like lying down for a second.” The less you say, the funnier and more gratifying this will be. Do it on solo missions for the first two days, and then feel free to do it when with a group of friends. It’s a riot.

It isn’t enough to think outside the box. Thinking is passive. Get used to acting outside the box.

TOOLS AND TRICKS

Looking Huge—Virtual Receptionist and IVR

Angel (www.angel.com)

Get an 800 number with professional voice menu (voice recognition departments, extensions, etc.) in five minutes. Incredible.

Ring Central (www.ringcentral.com)

Offers toll-free numbers, call screening and forwarding, voicemail, fax send and receive, and message alerts, all online.

CD/DVD Duplication, Printing, and Product Packaging

AVC Corporation (www.avccorp.com)

SF Video (www.sfvideo.com)

Local Fulfillment (fewer than 20 units shipped per week)

Mailing Fulfillment Service Association (www.mfsanet.org)

End-to-End Fulfillment Companies (more than 20 units shipped per week, $500+ setup)

Motivational Fulfillment (www.mfpsinc.com)

The secret backend to campaigns from HBO, PBS, Comic Relief, Body by Jake, and more.

Innotrac (www.innotrac.com)

They are currently one of the largest DR marking companies.

Moulton Fulfillment (www.moultonfulfillment.com)

200,000-square-foot facility with real-time online inventory reports.

Call Centers (per-minute and/or per-sale fees)

There are generally two classes of call centers: order takers and commissioned reps. Interview each provider you consider to understand the options and costs involved.

The former is a good option if you give the product price in an advertisement (hard offer), are offering free information (lead generation), or don’t need trained salespeople who can overcome objections. In other words, your ad or website is pre-qualifying prospects.

The latter would more appropriately be called “sales centers.” Operators are commissioned and trained “closers” whose sole goal is to convert callers to buyers. These calls are often in response to “call for information/ trial/sample” ads that don’t feature a price (soft offers). Expect higher costs per sale.

LiveOps (www.liveops.com)

Pioneer in home-based reps, which often ensures more calls are answered. Provides comprehensive service with agents, IVR, and Spanish. Often used for one-step order taking instead of soft offers.

West Teleservices (www.west.com)

29,000 employees worldwide, processes billions of minutes per year. All the high-volume and low-price players use them for lower-priced products or higher-end products with free trials and installment plans.

NexRep (www.nexrep.com)

Highly skilled home-based sales agents that specialize in B2C and B2B, inbound and outbound programs. If performance, speed to respond, Internet integration, and quality customer experience are your priorities, this is a strong option to consider.

Triton Technology (www.tritontechnology.com)

Commission-only sales center know for incredible closing abilities (see the movie Boiler Room and Alec Baldwin’s character in Glengarry, Glen Ross). Don’t call unless your product sells for at least $100.

CenterPoint Teleservices (http://www.centerpointllc.com)

This sales force has experience to convert sales from hard offers, soft offers, and multiple offers (upselling additional products after a caller agrees to purchase the advertised product) originating from radio, TV, print, or the web.

Stewart Response Group (www.stewartresponsegroup.com)

Sales-driven call center leveraging the home-agent model for both inbound and outbound programs. Another high-touch boutique center.

Credit Card Processors (merchant account through your bank necessary)

These companies, unlike options in the last chapter, specialize in not only processing credit cards but interacting with fulfillment on your behalf, removing you from the flowchart.

TransFirst Payment Processing (www.transfirst.com)

Chase Paymentech (www.paymentech.com)

Trust Commerce (www.trustcommerce.com)

PowerPay (www.powerpay.biz)

One of the Inc. 500 Fastest-Growing Private Companies. Process credit cards from your iPhone and more.

Affiliate Program Software

My Affiliate Program (www.myaffiliateprogram.com)

Also see the affiliate programs listed in the “Tools and Tricks” at the end of Chapter 9.