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If you are an entrepreneur, CEO of a private company, or leader of a professional firm, you need your daily dose of Inside Business Secrets.
Each day we address an issue that is top of mind for the entrepreneurial business leader. We discuss revenue growth, community building, succession planning, exit strategy, hiring top talent, over-regulation, and thorny legal issues. Our "secret sauce" is that we make you a part of the conversation.
The show is hosted by attorney/entrepreneur Nicola Gelormino (Nicki G) and author/consultant Dave Lorenzo (The Godfather of Growth).
This Miami-based duo shocked the ProVisors national networking community by building the largest and most influential group of professional advisors in less than a year. They interview and share valuable insights daily with CEOs, entrepreneurs, and business leaders.
A new episode drops daily at 8 AM.
To connect with Dave Lorenzo, call - (786) 436-1986
To connect with Nicola Gelormino, call - (305) 423-1994
Customer lifetime value is something
that is important for a number
of reasons in your business,
not the least of which is that it improves
the overall worth of your business.
But there's two things that I'm going to
harp on that I want you to think about
when it comes to customer lifetime
value and the loyalty of your customer
base. The first thing is,
if you know what your
customer lifetime value is,
you know what you can spend
to acquire a customer.
Now, Paula and Michael
will tell you a lot about
customer acquisition costs because
they spend a lot of time talking to
their clients because they're
in the online lead generation
business.
They spend a lot of time talking to their
clients about how much it's going to
cost to acquire a new customer.
If you know what your
client lifetime value is,
if you know what your
customer lifetime value is,
you know what you can spend
to attract a new customer.
So I'm going to give you an example right
now from my business, my old business,
not Exit Success lab, but
my old consulting business,
my solo practice consulting business,
and we'll see if it resonates with you.
So in my solo consulting business,
I started that business in 2008.
We are now in 2024.
I have five clients,
five that have been with me from 2008
to today,
which when I tell people
that they find it amazing,
I actually am incredibly
grateful for those five people.
But those clients have a very,
if I took what they spend
with me and I averaged it out,
that would be my client lifetime value
if those were my only clients, right?
But I also have clients that have been
with me for a year that were with me for
two years in some cases,
thankfully, very few,
six months or less,
right? If I average what those folks
spend with me and put it all together,
I would get a number as to
what my client lifetime value
is.
Let's say that the lifetime value
of a client for me in that business
is for argument's sake,
let's say it's about $25,000,
which for that business is pretty close
to accurate because those people who've
been with me for all of these years,
it's a lot more the people who've been
with me for a shorter period of time,
it's a lot less. But let's say my
average client lifetime value is
$25,000.
Is it worth it for me to spend $10,000 to
acquire a new client?
If my average client value is 25,000,
is it worth it to me to spend 10,000?
I would say yes. My metric is this.
My goal is, now, let me
take you back one step.
My goal is to break even on client
acquisition in the first year.
So in that business,
my goal was always to break even on
client acquisition in the first year.
So I had different tiers of service,
and the lowest tier of service in
that business was $12,000 a year.
So I know that the average
client would stay with me about
38, 39 months, a little over three years.
So for me,
my goal was to spend one
third of my client lifetime
value maximum to acquire a client.
So I can do a lot with
$12,000 in client acquisition.
Why is this important? Well,
it helps me understand what the
investment required will be to acquire
a new client,
but also the more I can spend
to acquire a new client,
the higher my client lifetime value,
the more I can spend to
acquire a new client,
the harder it is to compete with me.
So if you have significant recurring
revenue built into your business,
it creates higher client lifetime value,
and if you have higher
client lifetime value,
you can spend more to
acquire a client. Randy,
I'll get to your question in just one sec.
You don't have to spend that amount of
money. In fact, it's better to keep
customer acquisition costs down,
but if you know what your
client lifetime value is,
then you can set a target for
how much you will spend to
acquire that new client
so that you can make
sure that you're doing everything you
possibly can afford to do to acquire
new clients. Randy, your question please?
Yeah, so when I listen to
you, I get what you're saying,
but it feels like, and you can correct me,
it feels like that's making
a presumption that the
average lifetime value is fairly
stagnant,
that each client has a
similar lifetime value.
In my business, I have categories.
So knowing the type of client you want,
I know you've taught us that,
but I'm going to spend less
time and effort on the lower
categories.
I might still bring them in as clients
than I am on the higher categories,
if that makes sense.
Okay.
This is why we missed you so much because
you've taken right where we want go.
I truncated what I was
saying to be very general.
So if you break down
your clients by category,
you need to have client
lifetime value by category.
You can't do it overall for the entire
business because you're going to have
different clients, different
categories of clients.
So you do need to break it down by
category. Now, here's the thing.
As your business becomes more complex,
you need to find a way
for the cheaper clients.
You need to find a way to
automate the attraction of those
clients so that it doesn't require
as much of your time and so
that you can manage the spend. Okay?
So one of the things that Nicole and
I were talking about with Paula and
Michael from Lead Smith is okay
with online advertising,
for example, Randy,
let's take the case of a
gateway product or service.
So I'll use an example from our business,
so I don't pick on anybody here.
So in our business for
the business owners,
what we want to do is I want to do an
upfront market assessment for those
business owners so that we
can determine what the market
value for their business
might be an approximation.
So let's say I met with
Paula and Michael and I said,
here's what that market
assessment is worth.
We'll do the market assessment for $3,000.
So because I'm okay with just
attracting a new client at
breakeven, I would say to them,
here's our budget for
advertising plus your fees.
It's $3,000 per client.
I want to acquire 10 new clients a month.
So our budget is $30,000 in
online advertising so that
we acquire those clients
at breakeven. But Randy,
that's just for acquiring
that specific type of client.
Now, if I look then, and
if I pivot and I say,
now attracting professionals
into our ESL ecosystem,
the professionals pay a
thousand dollars enrollment fee,
and that's what I want to
use as my breakeven number. I
can't afford then to advertise
for professionals because I know
advertising is a relatively
higher ticket proposition.
So what I need to do with
professionals is I can hire a
$25 an hour telemarketer
to bang the phones and
call professionals, put
them in a breakfast,
and I can get 50 of them in a breakfast,
and I can close three or four or five.
So I close five from that
breakfast, that's 5,000.
So my cost of acquisition
for one of those clients is a
thousand dollars. I acquire five.
I can pay $5,000 for that
telemarketer for the month.
So for that specific service line,
my client lifetime value, let's say,
is a thousand dollars,
but my acquisition is going to be
a thousand dollars for that person.
So I can spend, I'm going to close
five every time we run the breakfast,
I can spend $5,000 a month
to acquire that client,
but for the other client that
I'm working with Paula on,
I can spend 30 because I know I'm
going to close 10 of those and they're
going to be higher ticket
value. So you have to segment
your focus on cost of acquisition
based on the client type.
So that leads to your point,
but the client lifetime value is what
should determine what you will spend.
Paula, to you.
I've been trying to play with that mute
button and waiting patiently for the
moment. So yeah,
I think to Dave's point on
how he's answering you, Randy,
basically you're building
differently lead generation funnels.
You're building one funnel
for a higher end ticket value,
and you're going to spend potentially
a lot money in advertising,
and then you're spending,
you're building a lower end cost
type lead generation funnel.
But it's really important to understand,
just to Dave's point is
what do they cost me?
Because then you can back into
what are you willing to pay for it?
And then advertising is one piece,
and there's so many other mechanisms
out there to be able to do this from
marketing, from calling
and all those other pieces.
But a lot of the times we encounter
is that many times our customers,
they don't really know what it's worth.
They don't know what
the cost to acquire first. They don't
know the cost to acquire customers.
They don't know what
they're comfortable with,
and the best way to do it is how
much is that customer worth to you?
So a lot of times people will just
think, oh, I get X amount of money,
let's say a thousand bucks a
month from them. So that's it.
And sometimes the cost to get them
is going to be higher than a thousand
dollars.
So you really should think about it
from a lifetime value because you're
probably, I don't know in your case,
but you don't get paid once a month.
Maybe you get paid over a period of time.
So it's really this idea of it's very
mathematical and what you can do,
and if you can understand that really
well, then it's sort of like, why not?
Why wouldn't I spend as much as I can
if I know that I'm going to get a return
on investment? That's very healthy
for each one of these clients.
The more the spend, the more clients
you get. So it's really a math number.
This whole thing is all
a mathematical equation.
And that's not. Thank you, Paula.
And today we're not doing math.
I promise there'll be no math today.
So today what we're going to do
is today what I want to focus on
is I want to focus on the
time you're investing,
and I want to think about the
lifetime value of your clients and
your referral sources based on the
time you're investing. First. Randy,
was that helpful? Did we answer
the question that you had or no?
Yeah, absolutely.
Okay.
So our focus of the
presentation today is on the
time you're investing.
So let me share my screen
with you and quickly,
not quickly, and bring this into context.
And I want you to keep in mind that this
is not the only time we're ever going
to talk about this, okay?
This is such a foundational concept
that you'll hear me talk about this
over and over and over again.
So today we're talking about
how to build deep relationships,
ask your clients and evangelists for
money and have them love you for it.
So what do I mean by that? First, let
me explain what evangelists are, okay?
So in my language, clients
are people who invest money.
They pay us for services, okay?
Evangelists are people who've never
experienced our services yet they still
promote us. They've never
invested a dollar with us,
yet they still promote us. And the
example I give all the time is a criminal
defense attorney, right? Paul
knows one of my dear friends,
one of my closest
friends, Brian Tanenbaum.
Brian is a criminal defense attorney,
but he's also a Florida
bar ethics attorney.
And what an ethics attorney
does is when one or more of the
90,000 plus lawyers here
in Florida runs afoul of
the rules for practicing law,
an ethics attorney is somebody
who specifically focuses on
defending those knuckleheads from
either being disciplined or in
worst case scenario, losing their
license, losing their law license.
I'm not a lawyer,
but I know a lot of lawyers and a
lot of lawyers come to me for help.
So when lawyers do something stupid,
like borrow money from their client's
escrow accounts to pay their own bills,
and they get caught,
I get that phone call a lot of
times and they tell me crying on the
phone,
I don't know what I'm going to do. I
introduce them to Brian because Brian is a
Florida bar ethics attorney.
He can defend them,
and he's a miracle worker.
He's prevented a lot of really shitty
lawyers from losing their licenses, okay?
That's what he does.
Well, I'm not a lawyer,
so I can't help those people.
I've never used Brian's services either
on the criminal defense side or on the
ethics side, thank goodness.
But I refer Brian work.
I refer him five or six matters a year,
and so I'm an evangelist for Brian
because I'm telling you about him
right now. I believe in him.
He's fantastic at what he does,
so I'm evangelizing for him.
You have people in your business
who are evangelists for you.
They've never used your services,
but they promote you like crazy.
So our presentation today
is focused on how you
can build these deep relationships in
the most efficient and effective way
possible,
both from a client perspective and from
an evangelist perspective. Your clients
who refer business to you,
they're still clients.
Anybody who's ever invested in you is
always going to be referred to by me as a
client. Even if they refer
20 people to you, in my mind,
they're still a client because
they've experienced your offerings,
they've experienced your
products, your services.
So we're talking about lifetime loyalty
today. Why now? Why this? Why you?
Well, there's three reasons, okay?
I want you to make more money
directly. So asking your
existing clients for more money.
I want to show you how to do that
in a way that's not intrusive.
Second is more indirect money.
I want you to be delivering
so much value to be so
remarkable that people talk
about you to other people,
and those people fall out of the
sky into your lap to work with you.
That's indirect money.
And then I want to show you a way to do
exactly what Randy was talking about,
to lower your labor intensity so that
you don't have to work as hard
to build the lifetime loyalty
so that you can set up systems and
processes that will do that for you. So
that's our focus today.
So there's three ways that
everyone here gets more
direct money. This is it. This
is how we get more direct money.
We solve problems for people
and they give us money.
We help people achieve their goals
and they give us money or we fill
a need and people give us money.
This is it. It's what we do.
Nothing else. You're
either solving problems,
helping people achieve
goals or filling needs.
The indirect money to us
comes from more referrals,
more introductions, or by
building a bigger brand. Now,
who wants to tell me wants to take a
guess at what the difference between a
referral and an introduction is?
Shout it out.
If you think you know what's a
referral compared to an introduction.
A referral includes a recommendation.
Randy, thank you. Exactly right.
A referral is me bringing somebody
to your office and saying,
you need to work with Eileen.
If you don't work with Eileen,
you're crazy and I'm not leaving you
work with Eileen. That's a referral.
An introduction is Meet my friend
Eileen. She can help you get a job.
Have a nice day. That's
an introduction, right?
A referral is you doing everything you
can to help these two people get together
because you passionately
believe they can solve a need.
You want to get more clients on
LinkedIn, you got to work with Phil.
There's no two ways about it. In fact,
if you're a professional and you're on
LinkedIn, you got to work with Phil.
If you're not working with Phil, you're
not taking full advantage of LinkedIn.
If you want to learn
how Phil has helped me,
I'm happy to tell you. I'm happy to set
up a meeting for the three of us and I
will show you what Phil showed me,
and then you should work with Phil
immediately after that, right?
If you come to that meeting,
I'm going to do everything I can
to make sure you work with Phil.
That's a referral. If I just
say to you, this is Phil,
he's great with LinkedIn Sales Navigator,
he can help you get some clients.
I think that's an introduction.
If you are going to do a referral,
you need to recommend the person.
You need to do everything you can and
you shouldn't refer people who you're not
passionate about. If I send you to Paul,
Paul is going to take great
care of you, I promise,
because I know I've seen Paul since 2008.
I've seen Paul take care
of clients since 2008,
solve all their telecommunications needs.
I've seen Paul help people
that aren't even his customers.
So I know Paul's going to
provide you with great service.
I am passionate about
Paul and what Paul does.
I'm passionate about
Phil and what Phil does.
I am going to do everything I can to
make sure that you guys work with them.
If I introduce you to
them, that's a referral.
If I'm just sending you over
to somebody, that's valuable,
but that's just an
introduction. Yes, Philip.
There's another one called
a name drop where you,
you're speaking to someone and
they're sort of not massively comfortable
about doing an introduction or a
referral, and you say something like, oh,
we're speaking to Dave Lorenzo,
and he thought it would be a good idea
to touch base and blah, blah, blah, blah,
blah. So that's the third level.
Right? Right. I think that's valid.
I don't talk about a lot that a
lot with my clients because I don't
place a lot of value on that,
just like I don't place a lot of value
on. See if this resonates with you,
and a lot of big firm people do
this, oh, you want a referral?
I'm going to give you three names.
Giving people three names is basically,
I'm going to date myself. Now.
It's like basically giving them
the phone book, right? It's like,
here's a list of people. Just call 'em.
If you don't feel comfortable enough
to do a solid recommendation for
someone, don't give them three
names. It's not helpful to you.
It's not helpful to the other person.
If you're concerned about betting
your reputation on someone,
you shouldn't be putting their
name out there at all, right?
So I would say, alright,
here's what I need to do. I need to find
out your interests are what your needs
are,
and I will match you with the person that
I know that will best meet your needs
depending on your personality type
and the type of work that you need.
If I don't know someone,
I'm going to say, listen,
I've never worked with this
person, but I've heard good things.
Let me make an introduction.
But because I worked with Phil,
because I've worked with Paul,
I know these guys can do everything
they say they're going to do and
more. I'm passionate about
referring them. So for me,
the difference between a referral and
an introduction is exactly what Randy
said.
It's a recommendation and it's
a full-throated passionate
recommendation. Alright?
We're going to spend a lot of
time in ESL talking about lowering
your labor intensity.
So on your way to building
a company or building an
organization, you need to think about
the financial investment
you make in things.
And then you need to think about
the investment of your time
and you as the CEO of your business
or your firm or your practice,
whatever profession you're
in, whatever you want to say,
you as the CEO of your business
need to think about the
level of labor intensity that you're
putting into things and the return on
investment of your labor intensity
right now, because exit Success
Lab isn't even a year old.
It's virtually a startup,
and Nicola and I are doing all
the work in exit success lab.
So for us,
we're putting a lot of labor intensity
into things that other people will
eventually be doing. For example, where
in the process now I'm putting together,
I'm going to finalize today
a job description for an
inside sales person because I am putting
way too much labor intensity on the
inside sales aspect of ESL,
and we're at a point now where we can
afford to bring on an inside salesperson.
So I know that the labor intensity
that I'm investing in that inside sales
process right now is too
high. I need to reduce it,
and the way I'm going to reduce it is
by bringing somebody on board to do that
part of the work that is
better suited for someone else.
So you have to determine
where it's best for you to
invest your labor intensity.
We don't think about our time as CEOs.
We don't think about our time as an
investment. We just think to ourselves,
whether there's 24 hours in a day, I
really only need four hours of sleep,
so I can spend 20 hours working.
Yeah, okay,
you can do that for a little while,
but that's a recipe for a heart attack
and disaster, right? You need to,
and it's not the most
productive thing for you.
If you are a detail oriented person,
then your labor intensity is best
focused on running the systems and
practices that keep your business moving
forward. If you're a creative person,
your labor intensity is best spent on
doing the big picture things that will
drive your business forward.
So lowering your labor intensity in
your practice will lead to a
greater perception of value for
you from your business. So right now,
if you're a sole practitioner and you
lower the labor intensity required to
attract clients,
your business will be providing
you with a lot more satisfaction.
It'll be providing you with a lot more
opportunity to do probably what you want
to law school to do if you are a lawyer.
So it'll provide you with a greater
perception of value of your
business. It will also, by the way,
if you also figure out how to develop
lead generation and business development
systems,
it will make your practice
worth more to someone else.
So if you wanted to,
if you're a lawyer or if you're a solo
consultant right now and you wanted to
sell your practice to somebody,
if the business development aspect of
your practice is dependent upon you,
you got nothing to sell there. Okay?
If you have a business development system
that brings prospects to your door and
you close them, that's a different story.
You can probably bring on another
lawyer, another consultant,
teach them how to close the business,
teach them how to fulfill the processes
and the perception of value of your
business will be higher. If
you lower your labor intensity,
you can command a fee premium
and you can also generate
more opportunity for work
because you'll have more
time to spend with your existing clients,
and there's magic involved with spending
more time with existing clients.
It results in more money to
your business, to your practice.
What we're all going for when it comes
to the lead generation aspect of our
business is we're all going for
love at first sight right now.
We want people to hear us
speak, to read our content,
to talk to us on the phone
and fall in love with us.
And that's not what we
should be going for.
What we should be going for
is attraction at first site,
or put a better way.
We should be going for generating
interest at first site.
Nobody's going to fall in love with your
business or fall in love with you as
their lawyer or fall in love with
you as their provider of exotic
meat. Nobody's going to fall in love
with you the first time they meet you.
They will if you do things correctly,
become interested in you and what
you have to say and what you do.
So I love this quote by Benjamin Franklin,
if you would be loved,
love and be lovable,
your goal for all the people
who you come in contact with
who are leads, is for
you to generate goodwill,
okay? That's the love part.
And then be a benevolent,
be a receptive, open person,
and that's the be lovable part,
and that's what this is all about.
That's what expanding the lifetime value,
increasing the lifetime value,
increasing lifetime loyalty is all about.
So now we're going to get
into the how to do this.
And this is all about communication.
It's how you communicate with leads.
It's how you communicate with the
people that you follow up with.
So from a lead perspective in general,
these are the foundational pillars of a
message that you create
that will lead to loyalty
from your clients,
from your prospects who will become
clients. It will lead to loyalty from your
current clients. It will lead to
loyalty from your evangelists,
from your referral sources. So if you
want to think about this a different way,
I want you to think about it from
the perspective of people that you
meet in a networking setting.
You meet these people and
you've generated some interest,
some attraction from them,
but they're not ready to do business
with you because they need to learn more.
Here's how you're going
to communicate with them.
Here are the tenants of communication
that will help you deepen those
relationships. It's
primacy, recency, frequency,
and emotional resonance. So
the first thing they hear,
the last thing they hear,
something they hear often,
something they hear that strikes
an emotional chord in them.
If you want examples,
if you've ever seen me speak in
front of an audience in my message,
I incorporate the outcome I
want into the first thing I
introduce to people into the last
thing they hear before I leave the
stage or finish speaking,
I repeat the message that I want them
to take home over and over again. That's
the frequency.
And I tell stories that
connect my message with the
emotions that I want them to feel. Okay?
Let's take a look at each
of these real quick primacy
being first,
if you want to connect and develop
a relationship that will lead to
lifetime loyalty, you want
to connect with an audience,
you should deliver a new idea. Now,
a new idea is something that the audience,
the target client hasn't heard before.
So your audience can
be an audience of one,
or it can be an audience
of a thousand people.
So if I'm sitting down and
I'm having lunch with Randy,
and Randy says to me, she gives me
the whole load down on her practice.
She gives me the whole load down on what's
going on and what she's interested in
and what clients she wants to get more of.
And I say to her, Randy,
it strikes me that you're really good
at what you do and you could work with
sophisticated clients. Do you enjoy
working with sophisticated clients?
And she says, yes. And I say to her,
why are you working with so
many of these smaller clients?
Why aren't you working with Fortune
500 clients? And she says, well,
because I built my business going to
Chamber of Commerce meetings and I meet a
lot of these smaller
clients and they have money.
So I took the money and
I'm working with them,
and now I'm so busy working with these
smaller clients that I don't know how to
get back to working with bigger
clients. And I say to her, okay, Randy,
what if you did this?
What if you spent initially carve out five
hours a week, block it on your calendar,
and you just spend that five
hours targeting the fortune 500
clients that you can do work for
based on past work that you've done?
And here are the five steps that you
could take to do this. That to Randy is a
brand new idea to the dozens of
other clients that work with me.
It's not a new idea to them
because they've heard it
before and to other people
in the world, it's not a new idea.
But to Randy, it's a new idea.
So I'm the first person that
shared this idea with her,
and this may or may not be true, so
don't go to Randy and go, really?
You didn't know that? So this may
or may not be true with Randy.
I'm just giving you an example. So
that idea is a new idea to Randy,
right? So that new idea is
going to stick with Randy,
and while she's making dinner and while
she's relaxing and having a cup of
coffee with her friend, she's going to
say, I heard this idea from this guy.
What do you think about this? And she's
going to talk about it and the friend's
going to go, that's interesting.
Who's the guy that gave you that idea?
So because I gave the new
idea, I stay top of mind.
Then Randy and I start working together,
and Randy has success with that idea.
So she comes back to me and she
says, that worked really great.
I got this other problem,
and she comes to me for the other problem
because I'm the new idea guy in her
mind.
So being first with a new idea can
lead to lifetime loyalty,
also being the known
person in a niche market.
If Nicola was here, she would
say niche market, right?
Being the person who
dominates a niche market
also is an example of primacy.
When I started my solo
consulting business,
I worked exclusively with
lawyers. Why did I do that?
Because in one year,
I was able to dominate the law
firm market in South Florida and
become known by a lot of lawyers as
the go-to guy for business development
help for lawyers and law firms.
It was 2008.
There were a lot fewer of the business
development people for law firms back
then. I was able to
dominate that niche market.
So I was the first person that
they had heard of who was just
focused on helping lawyers
grow their business.
I knew the bar rules related to
advertising and marketing for
lawyers in Florida.
I could navigate them and I was the
person that they thought of first because
I was dominant in that niche market.
Being a contrarian is a
fantastic way to establish
primacy in people's minds. Now, here's
the thing about being a contrarian.
You can't be a contrarian
and be a complete jerk.
You can be a contrarian and
be known as a contrarian,
but still be a likable contrarian.
So the example of a contrarian
who's a complete jerk,
anybody familiar with Andrew Tate?
You know who Andrew Tate is?
If you're not familiar with him,
spend two minutes looking him up.
He's a ridiculously misogynistic.
I mean like bordering on
criminal guy who has a
bazillion followers on YouTube
and TikTok and everything.
He is a horrible, horrible person,
but he sells stuff left and
right to an audience because
his contrarian point of view
resonates with a bunch of misogynistic
jerks who will give him money.
That's not what I want you to be.
I want you to be the contrarian who goes
out and says things like I used to say
hourly billing is something
that all lawyers should
avoid because it creates disalignment
between the interests of the
lawyer and the interests of the client.
I don't work with people
who bill on an hourly basis.
I don't want to work with people
who bill on an hourly basis.
I help lawyers quit hourly
billing like Alcoholics
Anonymous helps drunks quit alcohol.
That's a contrarian
point of view, but I'm
not trying to be a jerk.
I'm not saying that you
lawyers who are hourly billing,
you're all a bunch of
criminals. I'm not saying that.
I'm saying there's a better way and you'll
be more attractive to your clients if
you figure out a way to bill
on a value-based fee basis
versus an hourly fee basis.
And I don't want a questions in the
chat about what I just said. So please,
I don't want to turn this into
an hourly billing conversation.
We can have that over a
beer at an event sometime.
It's just an example of
being contrarian, okay?
Also commitment to something,
sticking with something is a great
way to make sure you're first. Now,
that seems like there's
some dissonance there.
How can you be committed to
something and still be first?
How can you be in something for the
long term and still be first? Well,
I made a statement at breakfast in
Miami last month in Hallandale Beach,
and I said, the minute you quit,
you realize that you were very
close to being successful.
We always quit right before
we're successful at something,
right before the process
kicks in and we're successful.
That seems to be the moment
where most people quit.
The longer you stay at something,
the more chance you give yourself to be
introduced to someone who could be your
next big client.
So if you are focused on giving
speeches as a lead generation
methodology,
the day you stop giving speeches is the
day before you are going to meet your
next big client, right? So if you
remain committed to a process,
you will be first to someone. Eventually,
Joe Diaggio had a saying,
and it was actually
the first time he was quoted about
this was during a game where the
Yankees were up by 11 runs and Diaggio
was still playing center field,
and a line drive was hitting to the gap.
DiMaggio went on a full out sprint,
laid out dove, and made a diving catch,
and he caught the ball as he was diving
toward the left field side of center
field, and he stood up and dusted
himself off. The crowd went nuts.
The left fielder came over
and congratulated him on a
great catch and said, Hey,
listen, you know we're up by 11 runs.
You don't have to kill yourself.
Why would you kill yourself and lay
out like that and risk an injury?
And he turned to the
left fielder and he said,
there's somebody in the stands
who's never seen me play before,
and this'll be their
first impression of me.
I want them to understand
how I play the game.
That's the level of commitment that we
need to have to what we do because every
time we're in front of somebody,
even though it's our hundredth
time of doing something,
it's the first time
somebody's going to see us.
So commitment can also help you be first.
Commitment can also help you with primacy.
Alright, recency.
So there's an expression,
I think it's a Buddhist expression
that when the student is ready,
the teacher will arrive. Here's the thing.
Anybody who's had kids or who has
a spouse or who's had a spouse,
that repetition is your friend if you
want to make something happen, right?
So your ability to say something over
and over again to people maybe in
different ways, maybe the same way,
is critical to your
ability to influence them.
So if you want to
increase lifetime loyalty,
what you need is you need to be able
to deliver your message over and over
again. Here are the things you need
to do in order to do that. First,
you need access to the person.
You need to be able to be
considered a trusted advisor.
You need to be able to connect
with them at a level where
you can give them advice
on a regular basis,
on a frequent basis.
So
I was a trusted advisor to
a gentleman named Tim Lynch,
who's the president of Offit Kerman,
which is a good size
Mid-Atlantic based law firm.
They're actually in LA too now,
but they're pretty much Maryland,
Delaware, Virginia.
They have an office in New York
and North and South Carolina.
And Tim was my client.
And what I told Tim over and over
again from the day that I met him
was that the lawyer compensation
program that they had set
up was not in alignment
with what their goals were.
Their goals were to have
every lawyer develop business,
and they wanted every lawyer to develop
at least enough business to cover the
cost of that lawyer being in the law firm.
So even quote unquote service partners,
partners who were lawyers who just
worked on things that other people
gave them, we wanted the service partners,
even them to be productive and generate
enough business to make them profitable.
So at the time,
the dollar amount that each lawyer
costs the firm in hard costs
was about $150,000, give or take.
So they wanted each lawyer in the
firm to be able to generate at least
$150,000 in new business so
that each lawyer would cover
their own costs and then those that
were generating 3 million would provide
profit to the firm. Those that
were service partners, at least,
they would still be cost neutral and
they would be profit centers as well.
What I said to Tim was, I said, listen,
you are not rewarding these people.
There's no,
everybody's paid on a flat
salary and their bonuses
are based on hours billed. I said,
there's no incentive structure for
these people. To develop new business,
you have to do one of two things or both.
You have to either set a floor where
if they don't generate $150,000 in
business, at a minimum,
they'll be fired or
set an incentive program where
those who generate $150,000 or
more unlock a secondary incentive
where everything they bring
in over and above that they get X
number of dollars or it unlocks a bonus
structure. I said this to him when he
first brought me in to develop a business
development training program for
the people in the firm. I said,
if we don't tie compensation to this
business development training program,
it's not going to be as effective.
It's not going to achieve the
goals you want it to achieve.
I said it to him on
day one, he ignored me.
I had exposure to him on a monthly basis.
We met face-to-face in his
office on a monthly basis.
And over time,
I started tailoring the message and
different ways, delivering the message,
using examples over and over
again, different ways it took,
delivering that message.
No fewer than 18 times before he
decided to change the compensation
structure. And he said to me,
when he made the decision
to do it, he said,
I know you've said this to me
a couple of times. He said,
it's finally starting to resonate.
I had said it to him 18 times,
and in his mind it was
only a couple of times.
So the recency effect,
the repetition effect
is a function of first
having access to that person to
be able to deliver the message
over and over again. Then second,
having the credibility for them
to take the message seriously.
So in the Tim Lynch example,
I mentioned it to him the first
time when I first met him,
I hadn't built up enough credibility for
him to take me seriously with regard to
that message,
yet I had credibility in the business
development space because he had seen me
develop business for other firms,
but I didn't have enough credibility
in the compensation space yet he had to
see me do that, spend time with me.
He had to realize that it was
practically possible to do this. So I
had to demonstrate to him
that other firms had done it.
It had to be practical advice.
He had to understand that it
was possible for him to do it,
and then I had to be bold
enough to ask him to make
the change over and over
and over again as trusted
advisors.
We do that when we want our clients
to do something that's good for them.
We also need to do it with business
development initiatives that are good for
us.
So there's a host of services you could
deliver for your clients that would be
beneficial and you could get
paid for delivering them.
Your clients don't know
about these services,
so you need to start mentioning them.
When I started consulting engagement
and when you onboard new clients,
there should be a list of things those
clients should do. It should be 1, 2, 3,
4, and five, and we're only
going to work on one right now,
but you're going to need to do two,
three, and four eventually. Well,
as you're working on one, you need
to continuously mention two, three,
and four because that's what
you're going to work on next.
It's good for the client, and
you're also going to get paid on it.
So those of you who are IP attorneys,
you're out there, you onboard the client,
and the client comes to you because let's
say they have a trademark they want to
protect, right? And you're working
with them. You do the trademark search,
they decide it's worth protecting.
You decide they can protect it.
It's a good mark. You select the
categories, you protect it, you begin.
You begin the process of protecting it.
As you are talking to them
about protecting the trademark,
you should be asking them what
their goals are for using the mark,
because that could lead to
licensing down the road and
who can do the licensing for them,
why you as their trademark attorney?
And you can get paid for doing the
licensing.
And you should also talk to them about
monitoring the mark after it's protected.
Why? Because if there's an infringement,
you can write a cease and desist
letter, and if you do litigation,
you can be involved in making
sure the infringement stops.
And you can do that either through
licensing or through filing suit,
all of which you can get paid
for. But in order to do that,
you need the repetition of mentioning
these things to them over and over
again as part of their business strategy.
And that's where the recency
element comes into providing that
message over and over again.
Now, let's talk about emotional resonance.
When you're delivering a
message to your clients,
there needs to be emotional
resonance associated with it.
You need to make the
folks feel a certain way,
and the way you make 'em feel a
certain way is through making a genuine
connection on a human level,
differentiating yourself
and your services and by
being intriguing. So
these are the elements.
Now I'm going to stop the
screen share and I'll spend a
couple of minutes talking about this,
and then I'll take your questions about
everything that we've talked about
today.
And this is an ongoing discussion that
we're going to have continue to have.
When you are delivering a message to your
clients, to your prospective clients,
and there's emotional
resonance associated with it,
the clients are going to do two things.
They're going to associate
you with the emotion that they
feel,
and they're going to associate the
potential outcome you can provide with the
emotion that they feel.
So I'll give you a couple of examples
and we can talk about what this means
to you and your business as you are
thinking about developing your business
development strategies moving forward.
If you want the easiest way to
motivate somebody to do something,
you can scare the crap out of 'em.
So scaring the crap out of
people works for certain things.
So for example, you're going to see,
and you're probably already seeing
a lot of political messaging,
now we're going through the
most consequential election
of our lifetime.
I've been voting for 20 some odd years,
and there wasn't ever an election that
wasn't the most consequential election of
my lifetime. Now listen, you can
tell me, Hey, for these reasons,
this election is more
important and that's fine.
But the messaging of all political
advertising these days is based on fear.
They want you to act to move away from
something. Doesn't matter what side of
the aisle you are on.
Contrast that with the
messaging you get from a
gym or a personal trainer.
That message is all about
moving you toward a goal,
moving you towards something
that's good for you,
moving you towards something
that's beneficial for you.
The way to make a real
connection with people is not
to just throw those emotions out there
and hope that you can herd the cats
in that direction because they're
all going to feel something.
The way for us to do it in a business
development setting is for us to make that
personal connection and for
people to be able to put
themselves in our shoes and
move forward because they
see themselves being driven by
the emotions that are created.
Here is an example.
You've all heard the reason why
I started my own business, well,
most of you have. If you haven't,
I'll tell it in a truncated way.
So I was a big ticket consultant
for gallops consulting business.
The bulk of my job was to develop
new relationships with Fortune 100
clients, scope out consulting engagements,
and get senior level executives
to sign on the dotted line.
Our minimum engagement fee
was a million dollars a year.
I carried a book of business of 20
million bucks myself year over year,
my team did over $250 million in annual
revenue,
and I was in the middle of doing an
engagement for Pfizer that was worth $10
million for our firm.
When I was going to a meeting at Pfizer's
office, it was a command performance.
The CEO of Pfizer demanded to see me.
I went out into the street to walk
the five blocks between my office and
Pfizer's office in New York City,
and I was struck by a taxi cab.
I was paralyzed from the armpits down.
And at that moment,
as I was strapped to a backboard
being wheeled down the hall of St.
Vincent's Hospital on a gurney,
I realized that I was divorced.
I was overweight. I was making a shit
ton of money, but my life was a shambles.
I was miserable. And I thought to myself,
what am I going to do if this is the
way my life is going to be from now on?
And I did what most people do in that
moment. I made a deal with God and I said,
if you let me out of this,
I'm going to make a change.
And the change that I'm going to make
is I'm going to take control of my life
and I am going to work to live.
I am not going to live to work.
I'm going to do what I'm really passionate
about. I'm going to say no to any
client at any time.
I will structure my
business around my life so
that I can live a life that's meaningful.
I can live a life that
is one that will make me
fulfilled personally. So that's
why I started my own business,
and that's what I live
to help people do. Now,
I live to help people build businesses
that will enable their lifestyle.
Whether that means growing a huge business
or growing a business that's just big
enough to give you what
you want out of life.
So I tell that story in
every presentation I give.
And what happens is people
attach the emotion that I
convey in that story to
themselves and their journey
in business. And what does that do?
They project onto that story, whatever
they want from their business.
So some CEOs project onto that.
I want to have a hundred million dollars
business so that I can sell it and then
start a foundation and
give desks to school kids
in Kenya.
Some CEOs will project onto that.
I want to do $2 million a
year in a lifestyle business,
take every Friday off and coach
my kids' little league team,
some CEOs project onto that shit.
I'm in the wrong business altogether.
I don't need to get hit by a cab like
this guy did to figure out what I want to
do with my life. I got to go figure that
out now because life is too important.
Time is too short. I don't
want to waste that time, right?
Three different people taking three
different messages away from the
emotion that I projected. So I can
help all three of those people.
But what they've taken away
from my story is the emotion,
the emotional resonance.
And as long as I continue
to be that person and
have that emotional
connection with my client,
that client will stay with me because my
mission and their mission are aligned.
That's what emotional resonance
in the messaging is all about.
Why did I share all of this with you
within the context of lifetime loyalty?
I want you to think about primacy.
I want you to think about recency.
I want you to think about emotional
resonance as it relates to how you're
communicating with your
current clients. Now,
don't worry about how to
communicate this in this way
with prospects just yet.
I'll help you get there,
but I want you to pick two or
three clients in your business and
think about how you're
communicating with them,
using the things we talked about
today so that you can make a deeper
connection with them.
Because here's what happens when
you make that deeper connection,
the clients will come to you when they
have a problem, a concern, or a need,
and they'll say, Hey, you know what,
Paul? I was thinking about how I
can incorporate AI into what I'm
doing right now. And I heard you
talk about AI a couple of times.
What does AI look like
in other businesses?
They're going to ask you for advice that
seemingly is outside of what you do,
but that you can eventually help them
with. It's about deepening relationships.
And once you master the deepening of
relationships with your current clients,
then you can develop relationships with
prospects that will be deep right from
the beginning. Does that make sense? Yeah.
Alright.
Any thoughts or any questions
before we wrap up for today?
This will be available
in learning management system
afterwards. Unfortunately,
Nicola is the person who manages
the learning management system.
So I'm going to stumble and bumble my way
through and I'll send you all an email
with how you can access
it. Yes, Randy, please.
Oh, I love this. I have so many notes
I took for myself. So thank you.
This was a great topic. I think
the one I struggle with the most,
especially since I said earlier, I'm
pivoting to a different client base,
is access.
So when you know your avatar,
you know where you want to go,
figuring out the messaging,
giving the credibility, all that stuff
can be that's doable, that's tangible,
but it's the access piece
that I'm struggling with.
How do you get to the right people
and then not just get to them,
but this continuous relationship
that you talk about. The frequency?
Yeah. Okay, so great question.
So access comes in a
couple of different ways.
You can build a brand that makes you
the go-to person for something in a
very narrow niche. So let's say, I dunno,
let's say give me an esoteric patent area.
What does it really.
Mean? Well, I can tell you my brand is,
my brand is sas platform
software-based platform.
Perfect. So for you,
playing the long game,
the long game way of getting
access to people would be
writing papers in a narrow
area related to SaaS.
Patents would be giving speeches at
conferences where you may have
to do breakout room talks,
and there may only be 15
people in the breakout rooms,
but those are the ideal 15 people who
would be interested in your topic of
patents for software as a service
or whatever topic you want to talk
about. Whatever the topic is, I'm
just pulling stuff out of thin air.
Start with a narrow niche that you can
dominate and you can become the go-to
person for that. And people
will call you and they'll say,
I heard you were the person
that I had to talk to.
And that's how you get the
access to start to start.
There's a broad way to do that. The broad
way to do that is get interviewed on
CNBC for a specific topic and then
share that interview everywhere.
And then you're the expert and people
will recognize you as the expert and
they'll come to you.
But the access can come first
from building that brand,
starting in as narrow a niche as possible
and then work your way out. Second,
go to the people around you who already
know you like you and trust you.
So the people who you've
already built a brand with,
tell us who you want to meet.
And then we go to those,
let's say it's the CEO of a
local SaaS that's not a startup,
but they're five years down the road and
they're just about to explode and maybe
they don't have all their IP
protected. And I say, Randy,
I know the perfect people.
I introduce you as the intellectual
property attorney who understands their
technology as well as they do.
So then I'm the one who gives you access.
So those are the two ways to start the
long game is build the brand so that you
become the go-to person and that
person and then you'll have access.
They will always take your phone call.
The quicker way is through
referrals where somebody says,
Randy is the person. And
then here's the second thing.
Once you get that meeting,
the very first meeting that so I can
get you in a room with the CEO O of the
company, you got to figure
out how you stay there,
how you get that continued access.
And it's not being pigeonholed
as the technology attorney,
it's not being pigeonholed
as an attorney at all.
It's the hackneyed expression
of becoming a trusted advisor.
And my trick for doing that is asking
business related questions that
they don't know the answers
to but they struggle with.
And there are tricks of the trade that
I can teach and that I will be teaching
all of you. For example, when I was
working with publicly traded companies,
I would listen to every analyst
interview that was done.
If I had a meeting with A
CEO or a C-level executive,
I would listen to every analyst
interview that was done with that C-level
executive.
I would read everything in the industry
publications that was written about that
executive.
I would listen to their speeches
or watch their speeches at
shareholders meetings and I would figure
out what their goals were as a CEO.
I would look at what board of
directors members had said about them,
understanding what their
pressure points were,
what they were supposed to deliver on.
And then I would go into those meetings
having done countless hours of research,
and this is in a sales
meeting, so I'm doing 150,
200 hours of research before going into
a sales meeting. I got 20 minutes with
this guy and in that 20 minutes I got to
ask him questions that get him to think
that I understand him and his
struggle and his industry,
and he's going to want me to come back
and talk about this with him again.
So the magic questions that I asked
at Pfizer at that meeting where I
got that $10 million deal, I said to him,
so the meeting went fine.
I went in to pitch a study on
Lipitor and keeping physicians
writing scripts for Lipitor after
Lipitor went off of patent protection.
And this was six years before Lipitor
was due to go off of patent protection,
but I knew there was more we
could do. So I did a Colombo,
those of you who've ever watched Colombo.
At the end of the meeting, I went, oh,
CEO was Jeff Kinler. Oh, Jeff,
by the way, one more thing.
I was listening to the analyst call You
were on last month and something came up
that was concerning to me. And he Snickers
because he's such an arrogant guy,
he Snickers and he says,
what was that? And I said,
given
the budget cuts and the lack of investment
that you guys are making in r and d
in the upcoming three year window,
how are you going to keep
your best scientists,
your best r and d people
from walking out the door?
And his jaw dropped.
He's like, you asked me when we started
this meeting, what keeps me up at night?
He's like, that's the thing
that keeps me up at night.
And I'm literally leaving.
I got my partner James,
and I got my briefcase in my hand.
The assistant has my coat in her arm and
she's opening the door to the office.
And I said, if you want some help
with that. We should talk some more.
And I said, have a good weekend. This is
a Friday. I said, have a good weekend.
And I turned and walked out the door
and we're walking down the hall and the
assistant grabs us and she goes,
can you come back here for a minute?
I go back in the office. He's like,
what did you mean by we should
talk some more? I said, well,
we build programs based
on high level talent
retention.
I said, that's really what we do.
We do studies on programs like
Lipitor and all that stuff. I said,
but we do do things like help
people retain top talent.
We also, by the way, help people
recruit and acquire top talent.
I said, so if you're ever interested
in that, we could do that too. He said,
we need to set up a separate meeting, and
he turns to his assistant and he says,
will you go with Andrea and schedule
a separate meeting for that?
The only reason I knew to ask that
was because I had done that like 200
hours of research in advance.
So anytime I had a conversation
with this guy after
that and I asked him a question,
he always paid attention,
and if I wanted a meeting with him,
I could get a meeting with him.
Sometimes it was two or three weeks,
but he's a CEO of a Fortune 50 company.
I was able to get that access
because he thought I
was an industry insider.
I had that specific knowledge,
I had that situational
expertise. We get intimidated.
Oftentimes we get intimidated because
the people that we're pitching to or the
people that we want to work with are
these sophisticated business people,
or they're high net worth people
or they're CEOs when the reality
is the reason that we're in front of
them is because we have situational
expertise that they need.
So for us,
we get access when they
have a problem in our area,
and the best that we can hope for is
where the name they think of when they
have a problem in that area and where
the only name they think of or where the
first name they think of or where
the most trusted name they think of.
So what I did in that moment is I took,
this guy has two problems
that he has to solve,
right? He needs to sell more
drugs and he needs to invent new
drugs,
and he just decided that he was going
to cut his r and d budget over the next
three years. Well,
or the company necessitated that he was
going to cut his r and d budget over the
next three years.
So how is he going to keep these
geniuses who are inventing stuff?
How are they going to keep inventing
stuff if he's not going to have enough
money to retain them?
I knew that was something that
was going to keep him up at night.
I asked the question,
it made me in his mind,
a situational expert in this topic.
So as long as he's interested
in that topic, I get access.
So long-winded way of saying,
use your situational expertise
to be the go-to person and
then get referred in the
short term. In the long term,
create a brand that
clearly defines you as the
situational expert.
Is that good?
That was great. Thank you.
Okay. Sure.