Build an Unbreachable Brand Fortress through 'Power Warranty Marketing' with Michael Kaufman

0:02Who's ready to rock today, Fire Nation? JLD here and welcome to Entrepreneurs on fire brought Brought to you by the HubSpot Podcast Network, the audio destination for business professionals with great shows like Billion Dollar Moves. Today, we'll be breaking down how to build an unreachable brand fortress through power warranty marketing. To drop these value bombs, I brought to Michael Kaufman and to EO Fire Studios. Mike reimagines e-commerce with power warranty marketing, driving fierce brand loyalty and extraordinary reviews for his brand's ProTurf products as shared on the Brand Fortress HQ podcast.

0:36And today, Foundation, we'll talk about what a brand fortress is, why we need one, and what it should look like. How does a warranty or guarantee help us cost-effectively build that fortress? And how to construct one without killing our profits and so much more. And a big thank you for sponsoring today's episode goes to Michael and our sponsors. The Next Wave, your chief AI officer, hosted by Matt Wolfe and Nathan Lands, is brought to you by the HubSpot Podcast Network, the audio destination for business professionals. Matt and Nathan are leading AI creators in your guiding light in the AI and technology frontier.

1:08AI technology is transforming the way we do business and the media landscape is fragmented. The Next Wave strives to be the leading podcast on AI technology and how you can apply it to growing your business. Listen to The Next Wave wherever you get your podcasts. Ever thought about giving a TEDx talk? It's one of the most powerful ways to share your message with the world. And four-time TEDx speaker Taylor Conroy from Thought Leader can help you get there. Visit thought-leader.com slash fire to join Taylor's free training where he teaches you how to land a TEDx talk and spread your message to millions.

1:43Michael, say what's up to Fire Nation and share something that you believe about becoming successful that most people disagree with. Oh, yeah. Thanks for having me, John. I appreciate it. You know, I would say probably a lot of things, I guess. But I'd say I disagree with the common notion that success inevitably leads to like this easy street. You know, it's interesting. One of the many parables that Jesus tells, it's like this quote in the Gospel of Matthew, and it tells about these three servants, and each of them is entrusted with a different amount of gold, presumably based on the ability that they had each previously shown.

2:24And so, you know, two out of these three servants wisely invest and they double the amount of gold that they've been given. And the master says, well done, you were faithful with little. I'll put you in charge of much more. Come and share in your master's happiness. And it's interesting, but obviously there are many perks of success and I'm really happy that I get to experience them. Come and share in your master's happiness, right? But with those perks comes a lot greater responsibility and likely a longer list of individuals that you're responsible for. And that can be really a heavy burden sometimes.

2:59So I think that's one of the things that I think a lot of people think about success that I think is probably a little bit erroneous. I don't know. What do you think? I mean, what's your experience borne out on that front? I mean, listen, this is about you, Michael, and you gave a great answer to a great question because we're talking about building an unbreachable brand fortress through power warranty marketing. We have just a lot to talk about in this department because I don't even think a lot of my listeners know what a brand fortress is. They don't even know why they need one or what it should look like.

3:29So answer all three of those things, brother. As entrepreneurs, we want to build things that are worthwhile, you know, businesses that, you know, help people and we're proud of and we're excited to tell other people about. But, you know, when you build something, you know, really of true value, someone else is almost always going to try to, you know, topple your kingdom, so to speak. So, you know, it's just how life works, like it or not. So, you know, I say prepare for it, you know, be ready. So build something that's not just valuable, but that's also formidable. You know, don't just build a castle, build that fortress, you know, one that most competitors are going to take a look at that and they're going to say, man, I really want, you know, what that guy has, but there's no way I'm not even going to try.

4:09You know, it's just too formidable, right? It's too big. So the question then is, you know, what does that brand fortress look like? You know, what are the critical features that would make it that formidable force that competitors are going to be like, no, I don't even want to try. And, you know, I think the first thing is you really need a very strong foundation. And I think that all stems from a premium retail price point. You know, too many people are trying to sell on price. And I think that's the wrong mechanism. I think a retail price point of like, you know, even five to seven times your cogs is really a good place to be for profit stability.

4:50And I think, you know, you need that profit stability for that foundation. And I would say the next step is you need a deep moat. And for me, that's building a five star brand reputation everywhere. Like, you know, you want rivers of glowing reviews surrounding your fortress, your brand. And so then you're looking for this tall wall that competitors just really can't get over. And I think most of that comes through product differentiation. Ideally, if you can patent that in some way, then you've built an even taller wall. And then lastly, you need a strong fighting army, which is just this massive list of fiercely loyal email subscribers.

5:29And I think if you can manage to build out those four critical features, then I'd say you've got a brand that's going to be difficult to topple. And so that strikes me as something approximating that impenetrable brand fortress. Fire Nation, there's so much gold here. I want to circle back to premium pricing. I mean, think about this. What's the alternative? The alternative is just trying to lower your price, lower to the competitor, who then lowers it lower than you. And you keep on going down into what Seth Godin calls the race to the bottom. And here's the problem, Fire Nation, with the race to the bottom.

6:04You might win. And guess what? but that's not even a race worth winning. You want premium pricing. You want profit so you can invest in yourself, invest in your business, make it better. And I love this quote as well. The higher the barrier, the lower the competition. It should be tough. It should be difficult. You should be struggling. That's why your competitors are going to quit. Now, how does a warranty or even a guarantee help us cost effectively build that fortress? In simplest terms, a well-run power warranty or guarantee program does a number of things. One, it better supports that super premium price point because it gives a greater value proposition to the customer.

6:50I would say that it can be the basis for massively strong brand reputation everywhere, but only if you just say yes. And I think that's something we'll talk about probably. Um, it, it also is in and of itself a very strong differentiator, but, but it also informs more product differentiation, because if you're offering this really strong warranty, then you almost have no choice, but to kind of upgrade the product. You have to design it in such a way that it's better than everything else so that you can actually stand behind the warranty profitably. So, you know, quality design ends up mattering in that sense, but it also, it's safely builds an email list of fiercely loyal brand warriors.

7:35And I say safely for those individuals in the audience who maybe have an Amazon component to their business, or maybe they're exclusively Amazon right now, or they're considering Amazon, recognize that Amazon TOS, people get really nervous about that in terms of trying to build a list on the back end. And I think a warranty is the safest way to build that list in a way that Amazon's not likely to say too much. And the nice thing is, is that if you do this right, you're building a list of people who literally will fight for you online. And that's super important. And then I'd say the last thing is that it provides natural access to very raw, very genuine UGC testimonial videos and such for ads and social and whatnot.

8:21And so when you put all that together, you know, honestly, I can't think of another single strategy that you could implement in your business that offers greater potential to build out every critical aspect of that, you know, really solid brand fortification strategy. And I would say one last thing on that is that, you know, we are as a brand, you know, we're on track to doing, you know, just that, you know, building out that really, you know, strong value proposition for our brand. And the thing is, I've made a ton of mistakes. I'm still making a ton of mistakes, you know, like we all do, right?

8:55But this one strategy has given me the stability, you know, in the breathing room to make all those many mistakes and still build something that truly has value. Fire Nation, it should be exciting to build a strong foundation. It should be exciting to look outside and see that moat around your business, you know, figuratively and sometimes maybe even literally. I mean, this is how you're going to build the fortress that stands the test of time. And we have so much more important things to talk about around this topic when we get back from thanking our sponsors. We all know that starting a business is hard, but there are tools out there that help make it easier.

9:35HubSpot is one of those tools. And just one way HubSpot makes starting a business easier with their all new entrepreneurship kits. This all-inclusive kit gives you step-by-step guidance and frameworks to help you crush every stage of starting a business. I'm talking project management, professional email, and skill development templates, in addition to an entire solopreneur guide and freelance pricing worksheets. So next time you have a question about which step to take next, HubSpot's kit will have your back. Ready to get up and running fast? HubSpot is on a mission to help you do just that. And the best part is HubSpot's entrepreneurship kit is free.

10:09starting a business doesn't have to be so hard. Go to clickhubspot.com slash ENT to download the guide right now. Do you have a message inside that you know is meant to be shared with the world? Giving a TEDx talk is one of the most powerful ways to share your message with the world and Thought Leader can help you get there. Thought Leader is a speaker coaching company that has helped over 550 and counting coaches, speakers, entrepreneurs, authors, and experts land TEDx talks. Thought Leader is not affiliated with TED or TEDx, but they're able to get these results because their founder, Taylor Conroy, is a four-time TEDx speaker himself and past EOFire guest.

10:48You might be thinking a TEDx talk sounds great, but where do you start? Taylor has put together a free training that's going to teach you how to land a TEDx talk in as little as 90 days. Join Taylor to learn exactly what TEDx organizers are looking for in their speakers, how to write a talk that goes viral once it goes online, and more. visit thought-leader.com slash fire. Join Taylor for this free training and get your message out of your head, out of your heart, and out into the world where it belongs. That's thought-leader.com slash fire. Michael, we're back and we've been talking around this topic, profits.

11:25Profits are key. They are super important. So how can we construct a warranty that helps build our brand without killing our profits? It's always a fear when somebody looks at this potential for offering a really strong warranty. Can I really afford to do that? And I would say a couple of things are important. One is it's not worth offering the warranty if it's not effective, but then at the same time, you want to protect those profits. So you really need a warranty and a business model that is staggeringly impressive, but also profit protective. And so we'll start on the front end. How do you make your warranty and your brand staggeringly impressive?

12:08And I would say that you ultimately need to seriously wow your customers in, I would say, four essential areas. So one would be, of course, you need a quality product. That seems like it should be obvious, but sometimes we skip that step. Also, the strength of the warranty or the guarantee is going to be very key. And then you have number three is the speed and simplicity of the warranty process for both your customers and for your employees. And then is your willingness to just say yes. That becomes key also. So number one, sell a better product. A terrific warranty is great, but a terrific warranty for a stellar product, that's money in the bank, right?

12:53But then number two is this idea of this strong warranty. And I would say a strong warranty is going to be two things. It is going to be extreme, but believable. It has to be both. So extreme enough to justify this kind of seriously high premium price point, but at the same time, believable enough for customers to pull the trigger and actually pay that price in the hope that you're actually going to stand behind the warranty. Because remember, a lot of these people are new to brand. They don't know who you are. So they are taking a leap of faith, right, that this warranty is something of value that you're going to stand behind.

13:31And so, you know, backing up on that, you know, our unlimited free replacement warranty that we offer on all of our ProTel products pool tools is it is only believable today because thousands of people have already reviewed their amazing warranty experience. But if I was starting over, I probably wouldn't start that way. I would probably aim for at least, say, three to five times what most other products in my category are offering. And then I would price accordingly. So if everybody else is offering one year, then I'm offering a three, four, or maybe five-year warranty. And then I take that because now I have a price point there.

14:11I can calculate out what should my expense be and so what should my price be and that sort of thing. So it's extreme, right? It's three to five times or maybe even more, depending on your situation and what everybody else is doing. But it's believable because the ROI can be calculated by the customer because there's a limit. If I'm a customer and it's 10 years versus five years for everybody else or three years for everybody else, I can calculate that ROI. But if it's unlimited, I can't calculate it. And so I'd say that's one of the mistakes that I made early on that it turns out it's okay for us now.

14:46But if I had to do it over again, I'd probably do it differently. Fire Nation, this is really interesting when you can actually look at your business and say, what makes sense for me, especially compared to what my competitors are doing right now? How do I start with that three to five X of added value? So Michael, keep going. Beyond that, then we come to number three, which is like, you know, the speed and the simplicity of the warranty process. And so I would say, number one is don't force customers through any hoops or unnecessary questions that waste their time. The faster and easier it is to get them to claim approved, the more effective the warranty strategy is going to be.

15:29So if you can reduce registrations and claims to a few minutes or less, then I would say you're 90 % of the way there. And the best way to do that is to automate that process. But in order to truly automate it, you pretty much have to decide to just say yes. And so, you know, on that phrasing, I've never used that phrasing before until Jordan West kind of spoke that phrase during a recent interview I did with him on Secrets to Scale. And I really like the way he put that because whatever warranty or guarantee that you decide to offer, I would say approve virtually every claim. Just say yes. You know, lost, stolen, dog ate it, never registered the warranty.

16:12Doesn't matter. Our most loyal customers tend to be those who fully believed that we should have denied their claim. They expected that we were going to deny their claim and we didn't. And so those customers will now buy virtually anything that we sell and very few of them are ever going to take advantage of us because they like us too much. And so you can't begin to imagine just how much goodwill we earn when that customer sees approved at the end of that super simple 90 second claims process. And so because we just say yes to 95 % of our claims, we can pretty much fully automate that process.

16:53And actually, we kind of created a back-end process that we now call it registered that we're selling as a service or we will be soon. But, of course, even if you decide not to be quite so approval happy as we are, you can still use a system like registered or something that you build in the back-end or something that super simplifies the management of that warranty registrations and claims process, filtering out bad actors, building out your email list and tracking the data and all that stuff. But I still say, just say yes is that policy that is the best one forward. And there are many solid ways that you can be able to do that and still be profit protective in the process, which I can certainly elaborate on.

17:39Yeah, because if you're going to be profit protective, it's because you've created an efficient machine that makes this happen. So what does efficient warranty registration and claims management look like from the inside? In order to really be efficient in that process, and I would actually say just before I step into efficiency, because that is going to be a key point in being profit protective. But I also think that there's a couple of other things in that process to maybe pay attention to. So one is on the front end, making sure that you research the product really well to establish how soon is this product likely to fail?

18:23What are the ways in which I could potentially redesign it to minimize those failure points or turn those failure points into parts? Instead of having to replace the entire unit, I can just replace this little part that a customer can easily replace. And that really reduces costs. But you have to take some time to think through that stuff. And then on the efficiency side, of course, then you're reducing the administrative man hours required to process claims and weed out those bad actors, which, you know, you can reduce a lot of costs that way. And, you know, I would say those are the main things.

18:56So, you know, if you if you have the right price point, you know, and if you can make those design improvements and then you can use a process, you know, like, say, registered or some back end, you know, like chatbot flow or, you know, a Zapier automation or things like that, then that gives you, you know, some of that efficiency. But the question is then, what does it look like? Because I think efficiency on the back end is great. That helps you, you know, in terms of being profit protective, but also efficiency on the front end of that for the customer is also really important because otherwise then you lose the effectiveness too.

19:32So going back to that, how do we make it efficient for the customer, speed and efficiency? You want to get customers to that approved status as quickly as possible. And I hammer on that because every extra step, every extra minute, every extra contact point or hoop that you make them jump through, is just another opportunity for them to bail on the process because they're already assuming that you're never going to approve the claim anyways. Nobody else does. Why would you, right? So every extra moment in that process is an opportunity for them to bail. And the problem is if they bail, you do save the cost of fulfilling on the claim, obviously, but you lose everything else that is nearly guaranteed if you just say yes as quickly as possible.

20:22And so a number of those things are You don't get the glowing five-star review. You don't get a new loyal email subscriber and brand warrior. You don't get the positive word of mouth advertising. You don't get the additional lifetime value. And also when you get that email list subscriber, especially if they're really loyal to your brand, that makes product launches extremely easy and very profitable, which honestly, very few brands have profitable product launches. They may eventually be profitable. but it's really hard to be profitable on the front end for most brands. If you have that email list of just kind of brand warriors, you can have a profitable launch virtually anytime you want.

21:05So, you know, the list goes on, but if you're making it at all difficult for the customer, you're literally cutting off your nose to spite your face. And, you know, that causes problems with that, you know, making it profit protective because, you know, there's two sides to this, right? There's a cost to the warranty, but what's the cost on the other side of not fulfilling on the warranty properly? You're losing way more on that end than you're gaining by making that process difficult and having them bail in the process. So those are a few things. I would also say don't limit the warranty registration to a particular time period following the order.

21:49Certainly incentivize early registration because you want them on your list as soon as you can get them there. So you're going to do that through product inserts and registration landing page copy and all that stuff. But do not, I can't emphasize this enough, do not require early registration. Many customers that don't register early on will eventually try to file a claim. and denying them access because they didn't register soon enough hurts you way more than them because that same list that I just rattled off earlier is lost in this case too. The review, the subscriber, the word of mouth, the LTV.

22:27So make it fast and make it yes. And then I would say auto fulfill the orders. So as soon as they come in, as soon as that claim comes in and you give approved, you give them that approved message, automatically that thing goes to fulfillment through MCF or 3PL fulfillment or, you know, Zapier integration, you know, using some tool or some service or building it out on the backend, you know, whatever, because the sooner you can tell the customer the item is on its way and they can have a tracking number in their hand, the sooner they believe that you actually, you know, fulfilled on that promise.

23:02Fire Nation, I hope that you have been making both mental and maybe even some written notes about how you are going to improve your process, your warranty registration, your claims management, your guarantee, etc. I mean, building a brand fortress is key and Michael has laid it out so nicely. Michael, where would you want Fire Nation to go to learn more about you? What is your call to action to our listeners today? Well, first of all, if you need any pool tools, feel free to check out protoughproducts.com or check us out on Amazon. But on the front of, you know, like building out this brand Fortress, I would say a couple of things.

23:41One, you can check out brandfortresshq.com. Myself and a couple of other gentlemen in the space are doing a lot of consulting in that area, helping people to build out that post-purchase process, build out warranty systems and, you know, building your list, trying to build that Fortress. So we'd be happy to have a conversation with you. You could also check out registered.com and it's spelled a little bit odd. It's R E G Y S T R D.com. And that is actually the new service that we're rolling out at the moment. We're in closed beta. By the time this podcast goes live, we intend on being in public beta.

24:22And that is essentially this kind of post-purchase customer engagement platform, which gives you everything you need, essentially, to manage that warranty from registrations to claims to building out your list to automating those backend processes and really kind of just creating those brand warriors for your business so that you can build that out and create that fortress. Fire Nation, you're the average of the five people you spend the most time with. You've been hanging out with MK and JLD today, so keep up that heat. For links to everything we talked about, visit eofire.com. Type Michael in the search bar and the show notes page will pop right up.

25:00And Michael, I want to say thank you for sharing your truth, your knowledge, your value with Fire Nation. For that, we salute you and we'll catch you on the flip side. Thanks, John. Hey, Fire Nation, a huge thank you to our sponsors and Michael for sponsoring today's episode. And Fire Nation, over the last decade, I've interviewed more than 4 ,000 of the world's most successful entrepreneurs, and I've created a revolutionary 17-step roadmap to your financial freedom and fulfillment. I put it all into my first traditionally published book, The Common Path to Uncommon Success, personally endorsed by Seth Godin and Gary Vaynerchuk.

25:35The Common Path to Uncommon Success is the step-by-step guidance that you need to achieve the lifestyle of your dreams. dreams, visit UncommonSuccessBook.com. I will catch you there or on the flippity flip side. The Next Wave, your chief AI officer hosted by Matt Wolf and Nathan Lance is brought to you by the HubSpot Podcast Network, the audio destination for business professionals. Matt and Nathan are leading AI creators in your guiding light in the AI and technology frontier. AI technology is transforming the way we do business and the media landscape is fragmented. The Next Wave strives to be the leading podcast on AI technology and how you can apply it to growing your business.