Dinosaurs and Cowboys: Can't We All Get Along with Brian Kurtz

0:01Boom! Shake the room, Fire Nation. JLD here and welcome to Entrepreneurs on Fire. Brought to you by the HubSpot. Podcast Network, the audio destination for business professionals with great shows like Created with John Ushai. Today, we'll be breaking down dinosaurs and cowboys. Can't we all just get along to drop these value bombs? I brought to Brian Kurtz and EO Fire Studios. Brian has been a serial direct marketer for over 40 years, the author of two books and spending the second part of his career teaching everything he did. In today's information, we'll talk about the truce of direct response marketing.

0:35We'll talk about the 41-39-20 rule, the three-legged stool of marketing, and so much more. And a big thank you for sponsoring today's episode goes to Brian and our sponsors. The Next Wave, your chief AI officer, hosted by Matt Wolf 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. 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.

1:12Listen to The Next Wave wherever you get your podcasts. Many EO Fire listeners have launched non-food franchises and Franbridge Consulting has guided them. Franbridge's founder and frequent EO Fire guest, John Ostenson, has done more placements than any other in the country and his service is free. Sign up for a consultation with John or get a free copy of his book, non-food franchising at franbridgeconsulting.com. Brian, say what's up to Fire Nation and share something that you believe about becoming successful that most people disagree with. I've been in the marketing world for over 40 years and it's like everything seems to need to be a revenue event.

1:53And I'm not saying that it's just because people want to make money, But they just – I mean, look, money is important. I get that. But I have an expression that says everything in life and in business is not a revenue event, but everything is a relationship event. And I think if people, especially in marketing, spend more time focusing on the relationship first and delivering value first, which is something you've done your whole career, John. Thank you. I'm not telling you anything you don't know. But it's like a lot of people, I think they're not necessarily disagreeing with it, but by their actions, they are disagreeing with it because they're motivated by the next funnel.

2:41They're motivated by the next transaction. And man, customers don't refund relationships. They refund transactions. Fire Nation, that's a nice little teaser to a conversation we'll be having later in this episode about the compound interest that comes directly from relationship capital. But first, we're talking dinosaurs. We're talking cowboys. We're talking about the reality of can't we all just get along? because, Brian, there are some eternal truths of direct response marketing, and these are never going to go extinct. So I want to talk about those eternal truths right now. Yeah, I mean, there are so many, but I'll focus on a couple that I think everybody in Fire Nation should know about and follow and keep next to their desk, in their brain all the time.

3:37And one of them is that it's always about the market and the list more than the offer and the creative and the messaging. There was a formula, I'll say, back in the day where direct marketers would say the success of a program in marketing depends 40 % on the list or the media, 40 % on your offer, and 20 % on the creative or the copy or the messaging. And I kind of turned that on a seer a little bit in my book Over Deliver because I really felt that if you don't have the list right, if you don't have the media right, if you don't have the audience right, the offer and the creative are going to be irrelevant.

4:29And I've proven it time and again over my 40-year career when I've seen the most amazing offer with the best copy and the best teasers and the best hooks goes to the wrong audience. You're going to make zero orders. You're not going to sell anything to anybody. You're not going to create relationships with anybody. However, if you have your list dialed in and you have your segmentation of the audience that you're going after dialed in and you can have a mediocre offer – I don't recommend a mediocre offer, but you can have a mediocre offer and you can have half-assed creative and copy, you'll make some orders.

5:08You'll get some sales. And that's sort of the indicator that if you you must know that, you know, Gene Schwartz, the author of Breakthrough Advertising, which I have the exclusive rights to, says that, you know, in his book, he says, you know, the copywriter and the marketer doesn't create desire in the marketplace. The desire is already there. It's how the copywriter or the marketer channels that desire. And you have to go out and find out where the desire is. And that takes hard work. It takes research. It takes, you know, on the ground, you know, tenacious, insatiable curiosity. And when you have that, you end up with a full-blown marketing campaign or the way you can sell things to people by starting with the list first.

6:04And I often say also that the creative or the – remember I said it was 40-40-20 or 41 – I made it 41-39-20, so the 41 was the list. But the 20 % that's the creative or the messaging or the copy, it's not that it's half as important. And I wrote a blog post that said, you know, the creative is the least important until it's not. And what I meant by that is that once you have your audience list dialed in and you have an offer, then the creative becomes the most important. Because that's where you get your biggest lifts in response when you can change the messaging to an audience that's already desirable of what you're selling.

6:48So it's not a complicated formula, obviously. I mean, it's 41, 39, 20. It doesn't make anybody say that's some heavy-duty math, Brian. But it's really, I think it's a fundamental truth of direct response marketing that everybody needs to know so that they don't do things in the wrong order and they do things so that they can maximize their impact and profit as well. Now, one thing I do want to dive into is email because people love email because it's quote unquote free. But you actually have a story of how paying postage made you a better marketer. So I want to hear about that. There was an urban legend.

7:35Email was out there for quite a while. And I grew up in the world of direct mail before the Internet, before email, where we actually paid postage for mail. We actually printed mail and printing and postage cost money, obviously. And email is basically free. So email was around for, I don't know, five, 10 years. And there was an urban legend going around that the Postal Service was going to get involved and start charging for every email, like postage for email. And I got to tell you, that excited me a little bit in a positive way, believe it or not. Because all of a sudden, man, the barrier to entry would not be so easy.

8:21and people who were getting involved in email in a big way would have to like go through the discipline of actually thinking about every email they sent. And so I remember, look, I'm not saying everybody should do direct mail and direct mail is still around, by the way. Talk about dinosaurs and cowboys. You know, it's, I'm a non-extinct dinosaur and I don't, I don't, but I don't recommend direct mail to everybody as the, as the medium of choice. I do say that having an online presence and an offline presence with your marketing makes much more sense than being an only one. But that's a different – we can talk about that separately.

9:01But the interesting thing is that email marketing is much more powerful if you just think about if you had to pay for every email. If you had to think about, you know, every time you go out with a message or something into the marketplace that you've actually thought it through and that you're proud of it, that you – even if it's not selling anything, that you're proud of what you're putting out there. And the thing is, what happens is when you're, when I was doing direct mail, again, I'm not saying that, you know, I walked up, I walked to school in the snow, 12 miles uphill, barefoot, you know, doing direct mail, but it was equivalent to that in a way.

9:44And so I feel like the discipline and the care we had to take with every piece of direct mail should be taken even if the medium is free. And so you'll hear it like email marketers talk about, well, I sent out an email and I got no response, no big deal. Well, I think there is a big deal there. And you really want to understand that when you put out any message to any audience, not getting a response means that who is out there that's going to stop even opening your email later on because you insulted them, because you were sloppy, because you had typos that weren't intentional or grammar that was off base that you didn't mean to be off base with your grammar.

10:37Grammar is overrated in marketing. I'll tell you that. That comes from Gene Schwartz. But you can see sloppy marketing. You can see sloppy emails. And anytime you go out with something that doesn't put your best face forward, you don't know what damage you're doing to your list, your online family, as I call them. Um, so I think that the idea that just because you're not paying for it, um, doesn't make it, doesn't give you a permission to be sloppy. And I think that's why in my book, I devoted a whole chapter, chapter three, how paying postage made me a better marketer, because I talk about the discipline of every promotion that we ever did, knowing that everything in that promotion from the envelope to the sales letter to the buck slip to the return envelope.

11:32We had to pay for it. And then we had to put postage on it as well. So I think that basically it's a simple concept that I go into more detail in the book, but I think it's more about the idea that if email marketers thought about every piece of email, every email they sent out as if it was gold as opposed to just ether. I think that we'd have much better marketing. We'd have much better communication in email marketing today. And Fire Nation, I want to stack on top of that. So this is in addition to what Brian's talking about, which is just something that I believe in very strongly, which is the higher the barrier, the lower the competition.

12:21And you need to be thinking about that when you're doing what it is that you are doing. Because if what you're doing is easy, guess what? Everybody else can and will do it if and when you find success. So whenever I have people come to me and say, John, man, it's so hard doing what I do every single day. I say, good. That is exactly why there's an opportunity for you to exceed in the long run because it's hard, because other people won't put in that kind of work and they will quit and they will not stay consistent. Like Brian and I were talking before the episode, I interviewed him back in 2013.

12:56That's over 11 years ago. And guess what? I'm still cranking out an episode every single day because I started with a really high barrier, a daily podcast. That was brilliant, by the way, what you just said. You personify it because you have to keep on stacking. You talk about stacking. Right. Everybody, you know, you were almost an original podcaster. And so everybody's been at your heels for a long time. And you've always had to stay a step ahead. And look what's happening today with AI and ChatGPT. Great point. The copywriters that are relying on ChatGPT instead of using it as a tool and staying three steps ahead are the ones that are not only going to survive but thrive.

13:39And on the flip side, everybody else, yeah, you will go out of business. People say AI and chat GPT are going to put copywriters out of business. Well, they will if you're not going to put the effort in and you're not going to differentiate yourself. So what you said reverberates then and now, and you're living proof of it, John. Well, thanks, brother. I really appreciate that. And Fire Nation, we're going to give you the tools that you need when we get back from thanking our sponsors. The overwhelm that comes with choosing the right software and tools for growing your business is real. With so many options and so little time, how are you supposed to know which platform is best?

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17:17That's FranBridgeConsulting.com. So Brian, we're back. And listen, I've heard about this three-legged stool of marketing, and I want you to break it down for us. The reason why I look at it as a three-legged stool is that it's fairly simple. It's like people think marketing has to be an elaborate funnel, and it's got to be all kinds of, you know, diagrams and iconographs and all kinds of stuff. And it can be, I mean, you know, being complex is good, but I think the idea that I've already expressed of that the 41, 39, 20 rule saying that the, you know, the list and the media being the most important, the offer being second, the copy and the creative being third, and the creative being the least important until it's not, and then being the most important when the other two are dialed in, is kind of a tenant of generations that I think applies today in online marketing.

18:25And off of that, there are two other fundamentals that I just want to share quickly. The idea of lifetime value. Lifetime value, or at least, lifetime should be at least two years. Um, so the idea of when you go out with an offer or, or, or, or some kind of a promotion that you think about the second and third or orders or offers when you go out with the first one, because you've already died. If you dialed in your list in media and you have a good offer, make sure there's another offer behind that. It sounds simple, and I think most people who are listening get it and do it. But I think that the idea – the difference between having a product or a promotion versus a business is completely – they're not related.

19:15So when I say that, like if you have a promotion that's killing it in affiliate marketing or it's killing it in online marketing and it's just one promotion, That's not a business. And the idea of a business is multiple products with different delineations of the product. And the thing is, when you start out, even if you don't start out with multiple products because you may not have a budget for that, you need to think about what are going to be the derivatives of that first product when you go out with it. So that's life. That's a whole concept of lifetime value. And then one other dinosaur concept that is for all the cowboys is RFM.

19:59And RFM is a fundamental. It's not even a rule of thumb of marketing. It's actually how consumers behave in the marketplace. And RFM stands for recency, frequency, and monetary value. Recency says that someone who buys more recently is going to be more valuable than someone who buys less recently. Frequency says someone who buys more frequently is going to be more valuable than someone who buys less frequently. And monetary, someone who spends more money, is going to be more valuable than someone who spends less money. The key, though, is putting those three things together. They're not isolated.

20:36So we used to do the scoring on all of our direct mail. And, you know, in my days at Boardroom where there was no internet and no email, I was doing direct mail using RFM statistical modeling. And all the models would bring the names to the top that were the most recent, most frequent, and the highest dollar amount. And it's always transaction. There's an expression. It's like we say it's transaction data, stupid. And it's all about how the customer transacts with you. And so it's not, yes, psychographics are fun and demographics might be necessary if you're selling just to men or just to women in a certain age group.

21:22That's important. But what's critical when you're selling in this marketplace, whether it's online or offline, whether it's with AI or not with AI, it's all about transaction data. What do people buy? When do they buy it? How often do they buy? How much do they pay? And then accumulating that data on an ongoing basis so it's there for the taking when you go out with the next offer. And so those are like the 41-39-20 rule, the three-legged stool. That's where it starts. And then it extends to the notion of lifetime value and then to RFM. And if you basically don't know anything about marketing but you study what I call the 41-39-20 rule.

22:08I didn't – it's the 40-40-20 rule but I call it the 41-39-20 rule. You study lifetime value calculations and look at what you can lose on your first order to make it back in some reasonable amount of time with the second order or the renewal. And then you can look at RFM. Even if you have a list of 100 buyers, you can look at RFM. So someone who bought the last three months, who also bought six months ago or a year ago, is going to be more valuable than someone who just bought three months ago. So just things like that. And if you have a small list or you have a small market and maybe it's even high priced, you can really zone in on those VIP customers and really sell even more to them at higher ticket, assuming that you always deliver value.

23:04I'm making an assumption here that we're not selling crap, right? We're not selling ice to people who live in Alaska. We're looking at usable, valuable products and services. And the best way to do it is through RFM, lifetime value calculations, and the three-legged stool of marketing, the 41, 39, 20 rule. I want to talk about the compound interest that comes from relationship capital. In the last chapter of my book, it's called playing the long game. And I start with the notion that I hate the word networking, which is ironic because in my career, most throughout my career, I've been known as a networker.

23:49I've been known as someone who connects people. I've been known as someone who knows everybody and I don't know everybody. And I hate the word networking because it implies, oh yeah, he must have the most Facebook friends. He must have the biggest LinkedIn account. He must, you know, shake hands with people all the time and pat them on the back. and he's full of shit most of the time. That's what networking became for me. So it started, so I started, and it started with a horrible situation for me. I was like 27 years old and I was in a magazine, a trade magazine as like a 30 under 30, like someone to keep an eye on, like watch this guy because he's going places kind of thing.

24:37So I was in a 30 under 30 thing. And the title of my section of – I was one of the 30 that was profiled was Strategic Schmoozer. Strategic Schmoozer. And that to me – I mean I threw up in my mouth when I read it. It was like – it was just brutal to read it because that's not me. It's not because I am – I was sort of like looking at myself as anything but that because I was going deep with people. I was going, you know, I wanted to have a relationship that I couldn't ask for a favor until I maybe knew somebody for 10 years. And I had done favors for them and I had done things for them. And so what I changed networking to for myself was the concept of contributing to connect.

25:27Contributing to connect. So you must – and then in my book, I have this throughout where I talk about the idea of contributing 100-0 to people, not meeting them halfway, not being a matcher in the words of Adam Grant in Give and Take where he talks about a matcher is like I give you, you give me, but it's got to be equal. And I'm not sure you don't want to be a taker, which is everybody who just takes and doesn't give, but a giver that gives 100 zero with no expectation of return. And of course, ironically, you get a lot more of a return that way. And I can only say that I can I've lived my life this way for 40, well, for 66 years total and for over 40 years in business.

26:12And it's worked for me. I got to tell you that. So I don't know if that's a long enough period that I have a big enough track record to be able to say it. I'm being sarcastic a little bit. But I do think that it's a way of being. And I'll tell you, I've written blog posts about it and different variations of it. One of the blog posts I wrote was never make an ask from nowhere. Never make an ask from nowhere. And to not make an ask from nowhere, you need to be somewhere with somebody. You need to have a deep, penetrating relationship. And I tend not to ask people for favors. You know, when your email came out, you know, about bringing people back after you've been doing thousands of podcasts, I jumped at the opportunity.

27:04But I would never have thought to call you up or email you and say, hey, John, can you put me on the podcast again? You know, but it's sort of like that wouldn't be an ask from nowhere if I asked you that. But it would it wouldn't be coming from a place of, hey, John, we're buddies. You know, I can ask you for anything. And, you know, I get I get stuff like I get in an email correspondence with someone in my online family. I blog. I respond to all emails of people who write to me and I write back to them all the time. And so someone who I've written back to twice in a in a six month period now thinks I'm their best friend.

27:44And they start asking me for like long, you know, emails of advice and stuff that I would charge a lot of money for. And at some point I got to say no, not because of the money, but because of the time I can't afford. I don't have the bandwidth for that. But the fact that they have the gall to ask based on the relationship that we've not even developed yet, that's an ask from nowhere. I've had people ask me, you know, they lose their job, who I'll always try to help people if they lose their job, but someone who I don't even know. And they expect me to jump at giving them all sorts of information.

28:24And I just think that when you ask for something, make it come from somewhere. To make it come from somewhere, you need to have a relationship capital account. And I think it's the most important account that you have in your life. It's much more important than any bank account. It's an account that has compound interest. So you go in, I'm using the metaphor of a bank account for your relationships, but it really is true that you have the most valuable account that you own are your relationships. And I started this podcast with, you know, it's not about revenue, it's about relationships. And so if you can really cultivate your relationship capital, it compounds year after year.

29:13And assuming you're not, you know, assuming I can tell you that I have 40, I guess, 43 years of work experience in direct marketing. Hopefully that's not one year's experience for 43 years. Hopefully I've, it's cumulative over time so that every year builds on the next year and the next year and what I learn in each year. And I build on something else. I build on someone else I learned from. I build on the new relationships. But I don't assume that I meet a new person and all of a sudden they're going to be my mentor. I mean, I get emails all the time. Brian, will you be my mentor? So out of the blue.

29:54And I say, you know, that's not how it works. You know, you have to earn that. Not so you don't have to pay for it necessarily, but you got to earn it. And I have stories about how, you know, people came out of my online family and volunteered to help me with a project that I didn't ask them to volunteer and they did it anyway. And then I asked them, you know, do you want me to mentor you? It's like your mentors choose you. You don't choose your mentors. And so that's another ancillary piece of this relationship capital that you end up with mentees, mentors throughout. And then it's not even about asking from nowhere.