Stop Chasing, Start Choosing: How to Create Demand That Lasts from Daniel Priestley

0:00There's a magical thing called with or without you energy. With or without you energy is I'm going to be fine with or without you. Got it. And business owners that can get themselves into a place with with or without you energy, they tend to do well. In a digital world that's full of abundance, there is a hyper reaction to things that people can't have. Be sold out on things. Yes. Let people miss out. All right, Daniel. I always start the podcast with what's your definition of success? Isn't that something that changes over time? It can. It definitely changes over time. I was a very young guy and I saw you, uh, in my hometown, uh, in the Sunshine Coast and you had a yellow Ferrari.

0:39And at that point, uh, that was my definition of success. But a yellow Ferrari. I remember that one. It was an F3, 5, 3, 5, Formula One. F1, yeah. Pop out roof. Uh huh. So that was the, that was at one point, the definition of success. Dang dude, you're trying to make me feel old over here. That's, that's the. No, you should claim that. That was a great car. Yeah, it was. Um, and yeah, obviously look. Today I've got three beautiful kids and successors taking them to school in the morning, most mornings, and having a very happy home and having good food in the fridge and having great activities and raising them in a sensible way in a crazy world.

1:17Yeah, sensible way in a crazy world. How did the definition shift for you? How did success sort of shift over time? uh so for me uh the big milestones obviously you know you get married you have kids all of those things you become a complete well for me i became a completely different person in each uh chapter you know you can't imagine what it's like to love someone more than yourself and then you meet your wife and then you can't imagine what it would be like to even go deeper than that and you have your kids and you know all of that so kind of like you it's kind of like you're living in this in this house and then suddenly you open up a door and discover there's this whole other side of the house, there's this whole other section of the house in there.

1:58Yeah. I think it's a wonderful thing how we as humans get to grow through our lifetime. It's really wonderful how we get to do that. But to do it consciously is sort of a big challenge in this day and age to consciously think about your growth and plan your growth and plan that sort of thing. Probably never had to be more aware of it because there's so many distractions. We live in this world where the average person in two weeks scrolls the height of TikTok, sorry, the height of the Eiffel Tower on TikTok with their thumb. You know, so like. Is that kind of a thing? That's a thing. Holy heck.

2:33So, yeah, kids who are on TikTok, the height of the Eiffel Tower every two weeks, boom, boom, boom, boom, boom, with their thumb. It's wild. That is insane. That is insane to think it's that way. And to think one day, you know, we probably won't even have phones. will have earpieces or glasses or I know I've got the meta glasses and, you know, I get on the phone with people and I say, oh, here's where I am and they're seeing exactly where I am and all that sort of stuff. The world is changing fast. Marketing, let's go to marketing a little bit. The way of the world of marketing has shifted and it shifts every week.

3:11Basically, the algorithms change and that. But there's some key principles that I think stay the same And one of them is about, and you use the word oversubscribed, maybe explain that concept to people first, then we'll dive into it. So if you go to economics class 101, first lesson, first day, they're going to talk about demand and supply tension. And they're going to say this really simple idea, which is that if demand is high and supply is low, there's room for profit in there. And if supply is high and demand is low, then you're probably going to make losses. And they often use the example of bananas.

3:41If you've got a hundred bananas and only 10 people want bananas, you're going to sell them cheap. and if you've got 100 bananas and 1 ,000 people want bananas, you're going to put the prices up. We as entrepreneurs, we forget this lesson. We forget that demand and supply tension is everything. We think that we have to do all of these things to be a successful business, but ultimately all of it's for nothing if you don't maintain some demand and supply tension. And a great example of this would be airlines. So an airline is probably one of the most valuable businesses on the planet to society. It's probably one of the most complex capital-intensive if risky businesses, there's a million things that have to go perfectly every single day.

4:19And yet their margins are 7%. So they don't get great margins and they do everything right. Um, and then you get a bit of weird business like Rolex and Rolex has a product that hasn't really changed much in 50 years. It's not something people particularly need if they don't, you know, you can live without a Rolex. Um, it doesn't particularly open up humanity to a whole different, you know, range of experiences. Um, they don't do great customer service. You know, if your Rolex needs fixing, they'll take it, tell you when it's ready, three months later. And yet they make 70 % margins. Yeah. But they maintain demand and supply tension.

4:55Yeah. So this is one of the key ideas that I try and get into entrepreneurs' minds around their marketing, that the purpose of the marketing is to create demand and supply tension. And that's strategically what they're trying to do. i love you know i when i look at oversubscribed i almost always go back to jobs steve jobs when he the guy was an absolute genius at creating a demand six months before they're even going to give you the products oh yeah thing you know and people wouldn't i don't think people today that buy an iphone understand that people would queue around the blocks for these two like two days people would line up it's like lining up for concert tickets sort of it was yeah getting the ipad first getting the getting the phone first he knew that he had to create that little bit of that moment that tension um he knew that that was everything yeah that was that was so important so let's learn the lessons right there okay firstly flipped it on its head don't launch a product and then start marketing it start marketing it like the movie business is probably one of the greatest examples of creating a demand before it comes out before it comes out tom cruise maverick COVID hit, they decide, let's not put it out.

6:08And then we've got another two years of ramping excitement and that whole thing. How do we get people to shift their thinking to a launch mode rather than a put it out there and then start marketing? Okay. So mindset number one is stop being supply side focused all the time. Most entrepreneurs are just always thinking of supply. So just accept the fact that your job as an entrepreneur is to be manufacturing demand for what you do. No one will do that for you. You can't really outsource it easily. You as the entrepreneur need to be hands-on with this. If someone could easily do this for you, they'd be doing it for themselves.

6:44So that's an important one to keep in mind. The how to do it is things like waiting lists, discussion groups, pre-registrations of interest, all of those sorts of things. I'll give you some real examples. So last year we launched a new software business. And rather than writing any code or doing any work on the product, we just simply launched a waiting list and said, we're going to be launching software. It does this. Here's what it's up to. If you're interested in that, join the waiting list. So within a couple of days, we had, I think about 750 people on there, on the waiting list. To join, you had to say what you wanted to use it for, what outcomes you were looking for, what price you were willing to pay.

7:25All of those questions got answered. And we even had a question there, which is, would you like to see um the angel investor presentation and about 130 people said yeah i want to see the angel investor presentation so a couple of weeks later we ran the angel investor uh presentation with with certified angels we had all the data to to show exactly what the software would do what outcomes people wanted and how much they're willing to pay and then we basically said we're just going to do a very small angel round um now we haven't done any lines of code we haven't done any development on the on the ux or the ui or any of that sort of stuff it was an idea and a few weeks later we've raised the money to get it launched uh we've got a grub by that stage we had 1500 plus people on the waiting list so by the time we launch we've got all these people on the waiting list we've got angel investors who are saying i want to get in on this angel investment we'd drawn a line in that so we'd maintain demand and supply tension and then we had a very successful launch with that software product.

8:24The word sold out. Most business owners would, let's say they got a restaurant, they'd squeeze another chair in if they've got another customer rather than saying I'm sold out. How do we teach people that sold out is actually a good thing? So there's a word that I like to use called official capacity. And official capacity is the capacity your business has to leave people feeling delighted. So for example, if you're a restaurant, let's say you've got 50 tables and chairs in there. At that particular moment, you've got the capacity to have 50 people who are happy that they came to your restaurant that night.

8:58You start squeezing tables and chairs in, that capacity actually goes down, not up. So you think, oh, I'll know what I'll do. I'll squeeze 10 tables and now I've got a capacity of 60. You don't have a capacity of 60 if you're measuring people who feel delighted that they made the choice to deal with your business. So your capacity to delight people dropped. So what we look for is protecting the experience, protecting the capacity of your business and being just owning it and saying, my business has the capacity to look after this number of people. Now, the reason I say official capacity is because you should tell people, you should actually say the capacity of our restaurant is 50 tables.

9:38I know you want to come in. I'm really, really sorry. We're full. We'd love to have you in 10 days' time when we're not full. Let's book you in and you will experience what they're experiencing, which is a great night out. But we protect our customers' ability to have a great experience. Let's go into the planning of a launch marketing strategy. You just gave us an example of yours, but you've been doing it a long time, so it came second nature to you. let's say I am launching a new product or a new program or a new service or something how do I go t-minus and start back at the beginning question so there's going to be a few phases there's the planning phase during the planning phase you're going to map out your whole campaign and you're going to craft your official capacity and you know work out how many people do we need to get engaged in this in order for our official capacity to definitely sell out so let's say your business can take on 22 clients you say okay roughly speaking we close one in 50 uh people who um who come through as a lead so we're going to need about 1100 people engaged in there so you're going to have to basically that's the point where you hit demand and supply tension that's where you go okay we've got 20 spots available we got a thousand people on the list wanting those 20 spots it's a 50 to 1 ratio, that means there's definitely going to be a moment where people miss out.

11:07So we've got a plan by knowing our numbers right in the beginning. That's the beginning. Okay. Next phase is called the buildup. And the buildup is essentially, we're going to campaign for signals, not sales. So rather than - Signals, not sales. Okay. Yeah. Teach me that one. So rather than saying there's something for you to buy, there's not something for you to buy. There's something you can signal interest in. So, uh, let's go back to the Ferrari dealership. So you can't walk into a Ferrari dealership and say, I'll have that one. So I'm sorry, that's not, that's not for sale. You can signal your interest in that one.

11:42You can actually say, I would like one when one becomes available. So they will get you to join a waiting list. They will get you to fill in an application or a registration. So that's called signal collection, not sales. Um, if we take the most famous music festival in the UK, it's called Glastonbury. You can't buy a ticket. You can only register for a ticket. so for 364 days of the year you can add your name to the registration list and then when they get about 750 ,000 people on that registration list on one day of the year they make 136 ,000 tickets available and a lot of people sadly miss out but they're not selling their signal collecting so on the build-up phase we're just marketing for signals not sales we're not actually trying to get people to buy anything.

12:26We're just getting signals for the interest in buying something. Discussion group, they could join a discussion group about it. They could fill in a wait list. They could fill in an online assessment or a scorecard that says they need it but can't have it. So that's online assessment selling. So these are all things that you can get people to do as a strong signal of interest. Joining a webinar would be that they... Downloading an e-book. any way that says I'm interested in this. I'm interested in something I can't yet have. So this is where we signal build. But that can't yet have is massively important.

13:06Most people are like, well, if I've got them, why don't I just sell? That's it. And are most people profitable? No.

13:15So we want the signal collection and we want the build-up phase. What we're trying to do is we're trying to build up to that point where the demand and supply tension is unbearable. There's now a thousand people who want 20 things, something like that. So at this point, we now need to create transparency. Transparency is the demand and supply transparency. It becomes apparent that there's plenty of people who want a limited number of things. So this is - How do you do that in a way that's not, you know - Ethically. Well, how do you do it ethically? So there's a couple of ways. On social media, there's a lot of transparency.

13:47So for example, if you saw a business coach who has 19 ,000 followers and everything they post is thousands of people engaging and you know they can only work with 20 customers, you would go, okay, that's a business coach that transparently is in demand. I once saw a business coach step up on stage in front of a room full of about 300 CEOs and at the end of the presentation said if you're interested in working with me here's a QR code fill in the application and I'll let you know exactly how that that works and about half the room pulled out their phone and took a photo of the QR code now the coach had said I can only work with 12 clients a year and now there's 150 people in an audience with their phone out on the QR code that was a moment of transparency.

14:33That was transparency of demand and supply tension. So now what you can do if people have been signaling using an online form is just simply tell people and be honest about it because you've got to be an ethical business person. So you say we've had 435 people who've registered. This experience is for 45 people. Unfortunately, some people are going to miss out. um and don't don't ever lie about that because you will look like you've got egg on your face if if you then don't sell out if it doesn't go so you need to but you can actually just tell people you can just say hey look uh some good news and bad news it's a really popular launch it's a really exciting time for us as a business because so many people this many people have registered but we do only have to have this many people who can come in on on the on the next intake or whatever it is so you in some way you need to be able to create a moment of transparency of demand and supply tension and it can it can be subtle um and it can totally there's a dozen ways to do it very ethically yeah i feel it's like okay we're telling you in advance that some of you aren't going to get into this thing sort of thing it's yeah it's that way and it's like again there's a nature of business people to fight that though how when you're coaching something through that fight?

15:50How do you get them to realize just how important it is to stick to your guns and not go, well, we got a thousand, why don't we just sell a thousand of them? Oh yeah. Well, the magic is in designing the year that they want, that they really want. Cause I often start with the idea with business owners. I often start with how many customers would you need in order to have a really great year for you to have, for you to look back on this year and say, this was great. We grew, we were profitable. What's the number? Um, so we might do that. We, we essentially, uh, we, you know, we start with that. The other thing we can do is at a later date, we can expand capacity.

16:29So the official capacity is not set in stone forever. Um, you know, depending on what kind of business it might be, we might do a launch special that is for the first 300 customers. And then once those customers are onboarded, we might do the next campaign, which could be for 1500 customers. So when I do software, obviously software is the type of product that as many people as you want can sign up, but we always have a beta group. And the beta group are our first 300 testers and the first 300 people, and we're going to give them special support and contact, but we can only do that for 300 people.

17:01So anyone beyond the 300 misses out, but they will get to see what's happened with the 300. They'll actually, because we then share the results of those 300 and then more people come to the next uh next bit now you keep using a word that's one of my favorite marketing words only you know and i think a lot of people miss out on the fact that well i need two customers a week well you can only accept two new customers a week it's a bit great reframe i love it there's a magical thing called with or without you energy right with or without you energy is i'm going to be fine with or without you got And business owners that can get themselves into a place with or without you energy, they tend to do well.

17:44Fantastic. So we've done the planning. We've got the signals. Yeah. We get transparent. Moment of transparency and then the release. So the release is you give people a moment to act. This is where you say tickets go live or you can now apply. Count down to that. Do you just do it? Well, for example, Glastonbury says tickets go on sale at 5 a.m. on Monday morning. People wake up early. They set an alarm. They hover their finger over the button. I know. I've done it on different things. Super excited. I've literally had two of my assistants sitting there ready to buy things. All of us are on different computers making sure we get that.

18:27Those Disney tickets, they were wild. Yeah, when it's for your kids, trust me, you've got everybody involved to try and get that thing. that craziness of the world. So we go live. That's not the end of it though. Well, you know, with many campaigns, look, the perfect result is that it all goes smoothly and everything goes off without a hitch. Nine times out of 10, that doesn't happen. What mostly happened is you get a great result, but you don't complete everything. So what's nice is that you've got the signaled interest list and then you can elegantly go back to the list and say, um, Hey Brad, I noticed that you've got, uh, that you signaled that you're interested.

19:05I've actually got most of those things that are available have gone, but I do have a couple available. Uh, and we wanted to reach out to you first as someone who we know would make a great, uh, fit for this product. Um, I just wanted to give you the opportunity. You may not have seen the live, but I can give you an opportunity if you'd like to come through or not. So you can do some follow-up sales. That's a great way to do one-on-one. And that way, you know, a nice result might be, hey, we said that we had 90 spots available. 71 people have already selected that they want to go ahead. We've got a few spots available.

19:38Do you want one of them? And you can also, once again, you can signal demand and supply tension. You can say, we've got 18 spots left, but we do have about 1 ,000 people on the waiting list or 1 ,000 people had signaled interest. So I'm just going to go through it. And, you know, it's totally fine with or without your energy. It's totally fine if you want to go ahead or not. But we do have some sports available. So a little bit of sales follow-up at that point typically completes the campaign, puts the icing on the cake. Marketing planning-wise, my challenge when I teach this to people is that it's changing from you've got to be marketing all day, all day, all day, all day, all day to, no, you don't need to market all year round.

20:19you might need to market three times a year or twice a year or whatever it is to become full or even once a year yeah i i with my business coaches i tell them listen i want you to do marketing twice a year and fill yourself up and then you don't need to you don't need that tension of doing marketing for the next yes you're going to do your social proof marketing and keep the social media running and keep the content, keep that key person of influence as you teach going. But your real marketing for customers doesn't have to be 24 hours a day, seven days a week. Especially for a business like coaching.

20:58You know, a lot of the best coaches, they don't have huge capacity. You know, they might like, what would you say is that a typical coach is making great money. How many clients can they juggle at any time? 20 is a big number. 20 is a big number, right? So it's like I was thinking somewhere between 10 and 20. So realistically, if you did the right speaking engagement in the first half of the year and the right speaking engagement in the second half of the year, you're not going to be able to take on any additional clients. Correct. You could literally be in front of a couple of hundred people twice a year.

21:29But even like the clothing business has changed, selling in drops rather than, you know, you produce a thousand of that sweatshirt. That's it. That's it. Be sold out on things. Yeah. Let people miss out. Yeah. People want what they can't have. In a digital world that's free, that's full of abundance, there is a hyper reaction to things that people can't have. It's so rare in today's world for something to exist that you can't get a hold of. But we see it now with burger chains. They bring a certain burger back for one month and then it's gone. And that's it. And you're like, but I want that burger again.

22:09Well, you'll have to wait till next time we bring that burger back out. I think there's a lot of businesses starting to get the understanding of sold out. Now, what you can do with a bigger business is you can have your always available range and then you can sit drops on top. So you can have special offers and special things. We call these spotlight campaigns. So it just puts a spotlight on the business. You can buy, let's say like a Ralph Lauren, you know, you can buy the Ralph Lauren shirts any day of the week. You can get the standard line of Ralph Lauren, but there's certain things like this jacket or this coat or whatever.

22:43There's certain things that happen that do sell out. And that creates that same energy for the business while also having a day-to-day line that you can sell. It's crazy that we still are in a world where it's sell as much as you can. You would get this. I ask the question to business people all the time, how many customers, like if they're doing a marketing plan, how many new customers do you want that you can handle and sustain on a daily, weekly, monthly basis? If we know how many customers you need to buy, we also know how many conversations you need to create. It can work backwards from there.

23:22The other thing that's a real head flip for a lot of business owners is that their business would make more money with less customers. So we did some research into audiences and buying power within the audience. And essentially, to oversimplify, if you imagine like your audience, the top 1 % of people in your audience have 15 % of the spending power. The next 9 % have 45 % of the spending power, which means 60 % of the available budget is just 10 % of the people. And then the remaining 90 % of people have 40 % of the budget. So where most entrepreneurs and business owners make a big mistake is they go for the noisiest, largest group of people who have the least money to spend, rather than having systems and processes for identifying the Cinderella in the ball.

24:13You know, that one in a hundred who is actually got 15 % of the budget. Brings me to the question, pricing. Why does everyone do cheap? I mean, it annoys me that people go for the, you know, they think they got to be cheaper than the others. Why does that happen? And then how do we get to the other side? Yeah, I think it happens by default. It's kind of like, why do everyone walk on the earth? Because that's kind of where gravity moves you there. And it takes a bit of planning to get off the earth. It takes a bit of planning to get above the clouds, but it can be done. So it's beating market forces.

24:51You have to beat market forces. Market forces want price at zero. That's where markets want you to price yourself at nothing. so ultimately you have to beat the market forces through planning um the the thing to know is that there are going back to that audience size we call those three audiences the mass market the niche market or niche market depending on which side of the pond and the luxury market so the luxury market responds to pedigree uh exclusivity and experience and then the sky's the limit but it's very hard to tick those boxes you can't just say oh i've got pedigree No, you've got to win the major awards.

25:29You have to have the Emmy. You have to have the BAFTA award. You have to have been referred to by, you know, Tatler magazine or whatever it is. So you have to have the pedigree, um, and you have to be able to live up to the experience and all of that sort of stuff. So a few companies can do luxury, but one thing that all small businesses can do is niche or niche. Um, and that is where you're looking for a particular type of person who is so interested in a thing that they would attend an event, join a discussion group, read a book, follow a guru, uh, join and subscribe and watch videos on YouTube.

26:04They're, they're, they're actually irrationally engaged in this. They're passionately engaged. And I'll give you an example. There are normal gyms and then there's CrossFit gyms. And CrossFit is just basically doing gym stuff to music, um, and faster. With a group. With a group. Yeah. You know, but it's, for some reason it's 300 bucks a month. you know to join a crossfit gym and all the other gyms are 33 a month you know and it's kind of like well why because they're just doing it's the same footprint it's the same equipment it's the same stuff like why is it 10 times more expensive because this is a group of people who want to join a group they want to be part of a community they want to have an ideology they want to watch videos they want to follow instagram accounts so they've figured out a niche market a great question that all entrepreneurs, business owners should ask is who gets the most value from what I do?

26:57Now, this is not what do I need to do to provide more value? It's who gets the most value from what I do? Great example, Esther Perel. So Esther Perel was a couples therapist. She was in Belgium, then New York, and she started to notice that most people wanted to pay about a hundred dollars for a couples therapy session, but the ultra high net worth individuals, they placed a disproportionate value on what she was doing for them. So she was doing the same couples therapy for them that she would do for anyone else. But when she would ask them, was that worth it? They would say, well, you just saved us millions and millions of dollars.