Business Building Blueprints:: Module 2: Conversion, Inspiration and Picking Your Market

Business Building
Blueprints:
Module 2: Conversion, Inspiration

and Picking Your Market
With Dan Kennedy

www..com
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BUSINESS BUILDING BLUEPRINTS PAGE 3
Contents
The Conversion Process .......................................................................................................................... 5
Secular Religions ................................................................................................................................. 5
Beliefs .............................................................................................................................................. 6
Readiness for Conversion ................................................................................................................ 7
Targeting Your Resources ................................................................................................................... 8
Intelligent Questions .....................................................................................................................10
Why Writing Matters ............................................................................................................................ 12
Driven by the Written Word ............................................................................................................. 12
Study Ethic ........................................................................................................................................ 14
Breaks from Writing ......................................................................................................................... 15
Being Prolific ..................................................................................................................................... 16
Getting Fresh Input ....................................................................................................................... 17
Productive ..................................................................................................................................... 18
Influential Thinking ............................................................................................................................... 19
Stan Lee ............................................................................................................................................ 19
Hugh Hefner ..................................................................................................................................... 21
Disney ............................................................................................................................................... 22
Alternate Universe Concept ............................................................................................................. 23
Internet and Media ............................................................................................................................... 26
Dying Media...................................................................................................................................... 26
Changing Landscape ......................................................................................................................... 29
Speed ............................................................................................................................................... 30
Deliverables ...................................................................................................................................... 31
Types of Market .................................................................................................................................... 32
Niches ............................................................................................................................................... 32
Sub-cultures ...................................................................................................................................... 32
Mainstream / Mass Market .............................................................................................................. 33
Choosing a Market ................................................................................................................................ 40
Key Factors to Consider .................................................................................................................... 40
Size ................................................................................................................................................ 42
Trends ........................................................................................................................................... 44
Churn and Replenishment............................................................................................................. 45
Affordable Reachability ................................................................................................................. 45
Consumer Psychology ................................................................................................................... 47
Competition .................................................................................................................................. 48
Legal Costs & Risks ........................................................................................................................ 49
Nature of Potential Income........................................................................................................... 49
Economics .................................................................................................................................... 50
Affinity ........................................................................................................................................... 52
Authority ....................................................................................................................................... 53
Unique Argument.......................................................................................................................... 53
Market Research ................................................................................................................................... 55
Building Knowledge....................................................................................................................... 56
The Conversion Process
We finished the previous module talking about all the things that this
business is about (picking up from page 31).
When you hear that term “conversion” in this world, most of the time people are
talking about conversion of lead, opt-in or to a buyer. I don’t mean it in that way.
I mean it in the religious, philosophical, cult connections. These on page 31 are

just your simple dictionary definitions.
What I would say to you about the definition of conversion is, first of all, that is
really where long-term retention starts – when the person is not a customer but
they are a convert. These are two very different things.
The chain is actually Buyer → Customer → Convert.
You’ll see the definition is changing one’s religion or beliefs.
It’s important to understand that when people come to you as buyers – and they
get that far – they bring with them what I call two secular religions and they
believe them as devoutly.
Secular Religions
People come to you with two secular religions that they believe probably more
than they do the actual religion they’re involved with at the moment.
If they are devout, they believe in the secular religions with the same level of
indoctrination, rabidity and conviction; they don’t really think about them; they
don’t go somewhere every Sunday to reinforce them; they don’t pray about
them. But they are there.
• They have a secular religion about themselves – about how they and the
planet interact with each other and operate.
It does not make any difference and showing them fact is not usually sufficient
in order to change their religious belief system because religious belief systems
are acts of faith not fact.
If that guy devoutly believes that “direct mail doesn’t work in my business,” you
could show him 20 case histories – and affidavits from the people who did the
case histories – and he will still walk out mumbling to himself that “direct mail
doesn’t work in my business”.
He believes it as religion so that’s what we are up against when we set out to

create conversion. It is a high, high hurdle in most cases.
Readiness for Conversion

There are things that help and we’re going to talk about all of them.
There’s the readiness of the person to be converted – that’s very important.
Almost every cult teaches the recruiters to focus on those who are most ready to
be converted.
There’s the actual process of what you do with the buyer – when you get them –
to put them through a conversion process. But if you are not real good at that,
you will just send a lot of buyers through your system like diarrhea through a
goose – right back out the other end and it’s over.
This is an important part of our business – thus our business is not about selling
and delivering good information.
Our business is, to a great degree, about

this whole act of conversion.
I want to mention as a procedural part of all this (although we’ll talk about it
more later) it is useful, if you make use of it, to get a lot of information about
your buyers – when they buy or as quickly after they buy as is humanly possible
– information that will tell you whether they are valuable or not and what their
readiness to conversion looks like and what to do with them.
• How much effort you should invest in trying to sell them something
• How convertible they are
You want to get information and then you want to intelligently use it to direct
your effort.
If I’m running the show and we are trying to get people to come to Fast Start
Implementation, I can tell you I would spend more money trying to get this
person there than a bunch of other questionnaires that I did not bring to read
you because you would have found them just as painful as I do. I look at all of
them and I find most of them painful.
You worry that they’ll leave the house, get lost and they won’t be able to find
their way home after you’re done with their questionnaire.
But this one, despite them not being a buyer of anything but me, everything else
is so good they go in the A Group ‘ let’s try and do something with these people.
So it’s sort of a procedural thing for you.
Why Writing Matters
This business is a lot about the written word (page 33).
I get a lot – always have over the years – of:
• “I can’t write” – which, of course, is nonsense
• “I don't like to write” – it would be a good idea to get in a different field
A favorite story of mine is two guys who came to a consulting gig years ago. I
usually don't take them unless we know them; most of my client aggravation
comes from people that I let shortcut the tribe.
These two guys came out of the National Speakers Association and they had a
sales training company and the two of them tell me in the first 30 minutes that
they can’t sell and they don’t like to sell.
And they are running a sales training company!
At the time, my day fee was $8900 bucks

and they had an $8900 check and were
headed back to the airport so fast their
heads spun with a free piece of advice –
new job; you don’t belong here!
Driven by the Written Word

This business is driven by the written
word. It is very hard to grow and sustain
this business purely with the spoken
word; very difficult. Most people who
have done that wound up broke.
All they can do is get money today by hollering but they can’t keep and develop
any customers.
This is a lot about writing – which means, if you are no good at it, you’ve got to
get good at it.
If you don’t like it, you’ve got to teach yourself to like it and you’ve got to get
your people to be readers. This is really important.
A study came out this week and now people are all debating what it really
means but it’s no surprise to me. In diagnosed hyperactive attention deficit
disorders, in the past decade, there has been a 53% increase; in the last year a
16% increase. One in five in High School is clinically hyperactive with attention
deficit disorder. It does not surprise me.
Now everybody is arguing about whether the diagnosis has gotten better or if
it’s the pharmaceutical companies, because they’ve got more drugs to sell,
changing the standard and all that’s probably true.
However, even if you cut these numbers in half, it’s still a big number. It doesn’t
surprise me.
Everybody has a phone in their hand; it’s hard to pay attention to me if you’re
paying attention to that at the same time – but that’s what everybody is doing.
There are four people sitting in a restaurant at a table and they are all texting
somebody else. I find it more annoying than when they were arguing or talking;
I would rather have that.
If you pander to this, if you cater to this, if you won’t fight this,
you will not have an information business very long.
Our lifers – our high-value customers – are readers and our best customers
come to us as readers.
Many people’s point of origin for GKIC was a book and they then go on to spend
thousands of dollars. So, if we don’t get readers, we don’t get a ton of money.
We’ve got to incentivize it, we’ve got to recognize it and shame the opposite.
We’ve got to work on that.
There is a guy in our industry who has a very big business and his saying is, “My
ideal customer is a slow student with a lot of money.”
It’s about as cynical as you can get and I contend it’s the exact opposite of what
we actually want.
His average stick rate is three years – which isn’t awful but it pales in
comparison with mine. I guarantee you I’ve got more lifers from a smaller pool
because I want the exact opposite.
I want good students who are continually getting smarter, with a lot of money.
I want them to have study ethic because that’s

what causes them to keep buying.
Breaks from Writing

A question I got is, “Why don’t you take a break from writing every day to
recharge?’
First of all, it doesn’t really drain me so I don’t really need to recharge from it.
It’s what I do. But, even if it did, time won’t let me. I can’t – because so much of
this businesses about writing.
If you look at page 35, I made you a list to answer your question. This is the stuff
I could remember that I’ve got to turn out. I’ve got to grind out 14 pages a day
and, if I get behind, it isn’t very long before I can’t catch up.
There are days I can’t write. I don’t like to admit it but there are. On page 36,
there are 48 of them. So it’s really 16 or 17 pages a day.
If I go 10 days, I’m 170 pages behind; then I need another 17 and I’ll never get
them.
If you don’t know how to intelligently skim, you’ve got to learn how to skim. If
your time is incredibly valuable, get somebody to skim for you and give you only
some stuff you ought to read. Use Google Alerts but you’ve got to get some input.
Productive
Productive is a totally different conversation and it’s a complex conversation for
which we do not have time.
However, the three biggest factors to it are:
• The place where you work
• The people you permit to interact with you
• The way in which you let them interact
Those are the three biggest things about productivity. So working at Starbucks
with your laptop in a social and disruptive setting and letting anybody
communicate with you at any time is a formula for poor productivity.
Influential Thinking
These three people have profoundly influenced my thinking about the

information marketing business (page 38)
• Walt Disney
• Hugh Hefner
• Stan Lee
Stan Lee
Stan Lee is the brain behind Marvel. He really ran Marvel during its rise to
power from the first time around when DC Comics really ruled the world and
Marvel was this strange, weird, little upstart with oddball characters – Thor and
Hulk and Spiderman; Spiderman was the first breakthrough character but, in his
earliest incarnation, even Spiderman was pretty weird – it didn’t really fit the
superhero norms.
So Stan is an interesting guy to study for a variety of reasons but Stan did
something that DC had never really focused on; this is an analysis, I’m just going
to read you a few lines.
“Marvel’s colorful creations – Fantastic Four, Spiderman, The Hulk, Thor, Iron Man
etc. – built the groundwork for a self-contained fictional construct called ‘The
Marvel Universe’ in which all heroes adventures were intertwined with great
complexity.”
“Self-contained construct” – so think about earlier, fraternity and community.
Really great infomarketing businesses do the same thing.
They construct their own universe where everybody interacts, has a role, is
visible to each other – not necessarily in a physical room, although that’s part of
most of our businesses. And the characters are interwoven not isolated.
Yes, it was driven by good-looking naked women – I’m not denying that; but it
was driven by the Playboy philosophy and the campaign – which was internal,
not external, “What sort of man reads Playboy?”
Going back to our earlier list, building the self-esteem of and conveying status
upon people who were part of the Playboy culture.
If you go back and get the first five – maybe even ten – years of Playboy and you
pay attention, you will find it’s a big part of the business. One of its commercial
ramifications is licensing – who wants a lot of crap in their environment with
the logo and the characters on it? That’s a telling question.
Disney
One of the biggest licensors on this list is Disney. Marvel is a huge licensor,
which Disney just bought. This now makes Disney the biggest licensor of all
because they want the crap everywhere – dolls, pictures, original artwork.
Disney has a huge business of people buying the original cartoon cells signed by
the artist for big money – and the stuff sells for big money.
In the comic book industry, it’s turned into a big thing. When the authors
autograph or the inkers autograph, it’s a huge difference in value.
When people go to Comic-Con – it’s the SuperConference but with 50,000 or

100,000 people at it – it’s hard to get tickets, tickets are scalped. All the
characters are there and the actors who play them in TV shows and movies but
some of the longest lines are to get the autograph by the guy who inked comic
book number 36. They want it in their houses and they wear shirts and caps.
So who wants you around them tells a lot about whether they have stepped into
your universe or not.
Playboy still today – yes the magazine is fading in the United States, it doesn’t
have the cache it used to; we can see more skin at a High School football game
that we are going to see in the magazine. But still, as a licensor, it’s gigantic.
I want you to have that conversation because

it maintains interest, curiosity and fascination.
So if you want to study, go study these three people. Stan Lee and Marvel in its
rise – not Marvel as it is now, especially now that Disney has got it because they
are Disneyfying it, which is okay by the way.
As a Disney stockholder, I’m thrilled. But it’s not the Marvel that was made to be
Marvel. And they’ll succeed at this transition because they are Disney.
They are leaving the comic books pretty much alone so they are making the
transition in ways where they don’t have to shoot the day job in order to make
the new money.
But go and study Stan Lee and the rise of Marvel. If you don’t want to read
anything else, get the book I told you to get and at least read that one – and that
may intrigue you more.
Then study Disney and study Hefner. It doesn’t matter what you think about the
whole Hefner thing; you’ve got to be above that.
You can hate it and think it exploits women; you can have that opinion if you
like. If you really understood Hefner, you would probably have a different
opinion by the way.
Internet and Media
We are going to skip a few things for the sake of time and we are going to go to
page 51 and talk about my favorite topic – the Internet.
For those who don’t get that, it’s personally my least favorite thing on the planet.
I prefer dental surgery to dealing with the Internet and I’m not a very good
dental patient.
However, it’s not going away so here’s some stuff to know about it in this
business.
In many respects, the Internet has changed nothing and

a lot of people think it has changed everything.
Everybody thinks that about every “new media”. I’ve been at this for 40 years
and, every time there is a new media, everybody thinks all the rules have
changed and that the old media is now dead media.
There are two very successful infomarketers – big businesses – one’s in the
opportunity category and one’s in the health category. Let me tell you where
they are advertising right now – in the Yellow Pages right across the country.
Dying Media
Every day, somebody is telling me that Yellow Pages is dead.
I say, “That’s funny; I know a bunch of people getting a lot of money out of that
corpse!”
Look in Yellow Pages under dermatologists and, in more than half of the
markets across the country, you will find an ad for Proactiv. It’s called “out of
category” advertising.
I really like it because I’ve got five stations, I like them all so I’ve got old radio
programs; I’ve got the Sinatra station that only plays Sinatra forever – perfect
because I haven’t heard anything since that really interests me; I’ve got Howard
Stern because occasionally I like to listen to Howard. So I like satellite radio.
This very successful company sells a ton of product of old media – that’s what
they’re selling and that’s what they are.
It takes a long time for media to die. It’s going to take a long time for
newspapers to die; their death is premature. There are smart investors
investing in them.
So people think all the rules have changed and you’ve got to use new metrics.
They think old media is now dead media and they want to gravitate to the new
stuff.
Every media falsely claims that it’s changed the rules and it’s killing off the old
media. It’s all at least a lie if not grossly exaggerated.
I saw a direct response ad last night; I know why they are doing it, I understand.
It’s some fitness thing and they blow up a CD and they say “now that CDs are
dead” they are delivering all this stuff on whatever they are delivering it on.
They are nuts; they are insane. They will be dead but it’s going to be a long time
before CDs are dead.
It’s the same thing with the delivery of video. Of the top 50 direct response
marketers in the country who do lead generation – Sleep Number Beds,
Tempur-Pedic Beds etc., – what do they all have in common?
Free DVD – not free webinar; free DVD.
They are not all idiots. They would love to switch to free webinars. Don’t think
they haven’t tested it. These guys run more tests in a year than you’ll run in your
lifetime. They can’t; it’s deadly.
It’s opened the floodgates to crap – which discourages customers. If they buy
enough crap, they come to the conclusion that everybody’s stuff is crap.
That makes the job tougher for those of us who don’t sell crap. So it has done
that; it has made speed a vital part of this business. It has made evergreen
harder and harder to create – not that you can’t; it exists.
I have a campaign right now with Michael Kimble; we use direct mail to drive
people online to read a sales letter and buy. We haven’t changed the online piece
of media in three years. In today’s world, that’s evergreen – especially online but
it’s rarer and rarer and rarer.
Speed
Most people are having to be creating the next thing as fast as they are turning
on the one they’ve already got.
It’s made it damnably hard to protect intellectual property. We have a Titanium

member who is from Russia and he was telling us at the last Titanium meeting –
all of us who are whining about the problem we are having protecting our
intellectual property here – that we should be in Russia.
He said, “We’ve got an hour and everybody steals it.” They’ve got 60 minutes to
make money with it and next… They have no piracy laws at all – this concept is
not part of the culture – so it has made speed a vital part; it’s made it possible
but it’s also made it a vital part.
It’s facilitated a global approach as never before and that’s good.
A growing part of our business is international;

a growing part of most infomarketers’ businesses is
international. If it’s not, it better be.
The quality of the customer is so much better ‘over there’ than it is here. It’s
night and day.
Types of Market
We will move from Foundations to Markets, which is your next section and I am
beginning on page 56.
This is where we want to start because we want to start with whom we sell to
long before we worry about what we’re going to sell (the product) or how we
are going to sell it (the media).
There are basically three kinds of markets in our industry; pretty much every
business fits into one of the three, perhaps with some overlap.
NICHES
• Business
• Industry
• Profession
• Occupation
• Vocation
Note: niche within niche within niche
SUBCULTURES
• Hobbies, Personal Interests, Recreation
• Philosophical, Belief Systems, Intellectual Interests
• “Opportunity Seekers”
• Problems, Diseases, Anxieties
• Geographical
• Age / Gender
• White-Collar / Blue-Collar: Financial Interests
Note: sub-sub-sub-sub cultures
MAINSTREAM/MASS-MARKET
• Ownership – home, car
• Role – spouse, parent, family leader etc.
• Broad Interest: Health, Weight-Loss, Personal Appearance, Sex,

Relationships, Money, Personal Finance, Retirement, Travel
Entertainment
• Broad Psychological / Self-Improvement: Self-Esteem, Happiness, Stress

Management
• Advice: Astrology, Psychic Predictions, Life Coaches
Niches
By niche, I mean related to money so business, industry, profession, occupation
or vocation – that’s a niche.
It’s important to understand that a lot of the profitability now in infomarketing

is harder to come by broad.
Mostly what you see from the really successful infomarketers is

niche within niche within niche within niche.
They get narrow. It started some time ago. When I was doing a lot of work with
Restaurant Marketing Systems, we were segmenting – we had complete
separate marketing just for pizza operators, we had separate marketing for
multi-unit operators of any kind of restaurant, separate marketing for those in
small towns versus those in big urban markets etc., etc.
So a really good question which is not on your list is: How many different ways
can you slice and dice your niche?
So I have a conversion job on my hands; but, in terms of getting him as a buyer

in the first place, I can pander to his secular religion and I can leverage his
secular religion – a great virtue of niches.
Sub-cultures
Sub-cultures are people who are together in a group not because of their
occupation, profession, industry or vocation. They are there because they share
a personal interest, a hobby, a recreation or they’re there because they share
philosophical beliefs or intellectual interests.
By the way, I would put fascination with comic books and superheroes in there
as an intellectual interest; if they collect them then it’s also a hobby.
Opportunity seekers are people who have a problem, a disease or a particular

kind of angst – fear of flying, fits, family member with cancer; people who have
adult children moving back in with their kids – that is a problem sub-culture and
it’s a big one.
Late-life divorce would be in here as a subculture – a big growing category for

people who do relationship stuff.
Geographic subculture – people born, raised in or who, by choice, live in,

Tennessee are different than people who live in San Francisco.
Age, gender, white-collar / blue-collar etc.
Again it’s tougher and tougher to make these work without slicing and dicing
them into sub-sub-sub-sub-cultures.
There’s always been an advantage to slicing and dicing; now it’s becoming
nearly essential.
Mainstream / Mass Market

The third type of market is mainstream / mass market.
Its obvious virtue is sheer size. The wet dream of every direct marketer is to be
able to mail the White Pages – no selects, no list rental, just White Pages.
Even Halbert couldn’t do it because some ethnic names respond much better
than other ethnic names to heraldry and ancestry – Slovenian, Irish, Scottish –
but there are some others that hardly respond at all.
So even he couldn’t mail the White Pages; but that really is what mainstream
mass marketing information marketing is all about.
That might be the ownership of something; people that own a home, people that
own a car, people that own llamas – that kind of crosses back into sub-culture –
something big, people that own dogs.
Role: they are a spouse; they are a parent; they are the elder family leader.
Broad interests: health, weight loss, personal appearance, sex, relationships,

money, personal finance, retirement, travel.
Broad psychological self-improvement: sort of the “happiness” category.
Advice: astrology, psychic predictions, life coaching, all that.
There’s an article in the New York Times about the diet coach in New York –
Tanya Zuckerbrot. Her program is 10 grand. “The way this customer saw it,
$10,000 was a small price to eliminate the pounds that had been plaguing her for
years.”
Zuckerbrot is a registered dietician and author of “The F Factor Diet.” She’s got
celebrity clients of course and, at age 40, she’s a walking billboard for her
business – pencil thin. She’s got her own line of foods. At 10 grand a pop, she
can’t hire enough coaches to meet all the demand. So subculture that’s there; it’s
always been a big part of this business.
There are guys that make big broad categories work. A guy called Jerry Baker
was very big in gardening for years and years. He’s been around forever and he
made gardening work.
One of the mail pieces in “Greatest Direct Mail Letters” is a Jerry Baker control.
This is a current piece where they’ve switched him to selling their “Giant Book
of Kitchen Counter Cures”, which includes a bunch of stuff you can grow in your
own garden. (See page 58.)
This is Jerry Baker’s Healing Gazette.
This is mass mainstream

infomarketing.
It’s of a certain age and above and they

are probably using old response lists of
health buyers, gardening buyers etc.
But it might even work with a
compiled list. (See page 59.)
This is more subculture – Furey’s wrestling “Tap Him Like A Typewriter” thing.
Both are direct mail booklets.

(See page 60.)
This is Gene Kelly, one of long-

time members.
His subculture is guys who’ve got

a lot of guns and like to take them
apart and put them back together
and make their own ammo.
It’s gun culture – thriving at the

moment.
Choosing a Market
So those are the three categories of market; you’re either going to be in one or
the other or you’re going to have some overlap. They each have pros and cons;
so how do we pick?
Here are key factors to carefully consider when choosing a market for entry or
expansion or for selecting a sub segment of the market (page 57).
Key Factors to Consider
Size (Real Size)
• Fit with your income and wealth and longevity objectives
• Willingness to do what the size mandates
Trends
• Favorable / unfavorable
• Current / anticipated
Churn / Replenishment
(Affordable) Reachability
• Media
• Lists
• Physical mailings
• Existing centers of influence
• Hosts and partners
• Distribution
Consumer Psychology
• Are they searchers? Students? Strivers? Motivated by money, ego, fear,

what? Are they motivated at all?
Legal Costs and Risks
• Regulatory situation
• Compliance costs
• Claims that must be made can be made
• Litigation
Nature of Potential Income
• Transactional reflexology kneels created accountability
• Ability to create pain of disconnect
Economics
• Their transaction size or other comparative framework for presentation

of your prices
• Probable cost of acquisition and retention
• Ability to recover acquisition cost – at what speed
• LCV
• Costs / margins of deliverables
• Income business, equity business, both
Note: Bad economics cannot be overcome by great marketing
Affinity
Effective Anti-affinity
There is going to be a day when there won’t be 1,000 independent menswear

sales in the whole country and it’s soon not later.
So then what do you do? Womenswear, sporting goods, etc. But still all of these
are in decline; they are all small; they are all shrinking.
With skills of 12 and opportunity of six turning into a five, turning into a four,
you’ve got to do something.
So size matters a lot; will it support what you want to do?
There’s nothing wrong by the way with, “I want a kitchen table business; I want
no more than one employee; it would be cool to make 100 grand a year and I’ll
be happy.”
There is nothing wrong with that. But you’ve got to pick different size markets if
you want 420 employees or want to do $30 million a year. You’ve got to make
different size choices.
Trends
What’s happening; what do you think is going to happen and are the trends
favorable or unfavorable?
Is there consolidation? Is there fragmentation? Is there a lot of economic

pressure? Is Obamacare a key factor? etc. etc.
I’m fooling around now with a client taking marketing to hospital CEOs. I
wouldn’t have dreamt of it five or six years ago but now there’s a bunch of
trends that make it interesting.
Their business sucked before but now it really sucks and it’s going to really,
really suck. They are going to have to do more and more and more for less and
less and less money.
That’s the deal so they’ve got to find ways to make money; they’ve got to find
cash businesses they can be in that aren’t affected by that at all. Their minds are
open to things they wouldn’t have been open to under other circumstances.
In most niches, there is media; in some sub-cultures, there is media – but not in
all subcultures.
In most niches, there’s at least one trade journal; in some cases, there’s more.
Sometimes, they are State not just national; there are websites there are forums.
So what media have we got; are there lists?
Has somebody already put them together into lists that we can rent, buy,
borrow, steal (legally, like they are all in a directory)?
For example, when we were marketing to top financial advisers, almost every
financial product company posts their leaderboard of the top 100 advisers on
their websites. We can compile a list and all we’ve got to do to get their contact
information is Google it.
So there is a list of top financial advisers available. If there was no list available
and we’ve got to run trade journal ads but the only guy we can take has to be
making $500,000 a year, that’s a different proposition. We’ve got to pay for a
crap-load of eyeballs that don’t matter to us. So are there lists?
Are there physical meetings? Do they already congregate? Do they already

gather? That means maybe we can speak, maybe we can sponsor stuff, maybe
we can exhibit. We can go there to learn things. If you want to do manual labor,
you can get involved, run a committee. So are they coming to physical meetings?
For example, the business exists but selling information to people who gamble
on horses fails too many of these tests. There’s not a lot of media; there’s not a
convention. It’s tough.
Existent centers of influence – are there already people who are selling stuff to
them, who are advising them, who are vending to them with whom they have
relationships that we may be able to work through or work with?
Hosts and partners – is there somebody we can go and play outright parasite
with?
It would have been much harder for Infusionsoft to build a business from
scratch if we didn’t exist and weren’t willing to play host; it’s doable but it’s
much more difficult.
• Are there distribution channels we can put our stuff in or some version of
our stuff?
• Do the people we want to sell stuff to go to Amazon and can we use that
distribution channel?
• Does somebody have a catalog that goes to them?
Ben Glass who is a Titanium member of ours has a book all about legal
marketing and there’s a company that has a catalog where they mostly sell gift
items for attorneys – funny plaques, big gavels and lawyers stuff.
For the first time, I haven’t seen it in a catalog before but they have about 12
books in there this time – most of them are gift books, lawyer jokes and stuff but
maybe he can get them to sell his book; maybe he can get them to give his book
away; maybe he can get them to sell it if he just gives it to them and lets them
keep all the money.
So affordable reachability - can we reach them and can we reach them with the
kind of marbles we have in our or sack or are willing to dispense?
Consumer Psychology
When we get to Media, we’re going to talk in depth about the mindset the
customer has to have in order for us to effectively sell to them so I’m just going
to skip it but we are going to come back to it.
What are their buying behaviors and preferences? How do they buy?
If they don’t buy in a way you are willing to sell, then

you’ve got to think long and hard about whether
you belong in that marketplace.
If they buy best by being put into a room and having somebody stand in front of
them to pitch them – and there is no evidence that anybody has figured out how
to leave that out of their business – and you are absolutely unwilling to be on
the road or hire and manage people who are on the road, you’ve got to think
long and hard about that market.
You can’t find anybody in “Get Rich in Real Estate” – ever or present – who has
any kind of a decent sized business, that isn’t putting people in rooms and
selling stuff to them under the pressure of being in a room.
Somebody may figure out how to do it; but if I were you I wouldn’t be interested
in trying to be the first guy to conquer that mountain.
There are too many different ways to make money; there are too many different
markets.
Competition
Who is there; who might come and can you create any protection to it?
What does the competitive environment look like – a lot of competition doesn’t
rule you out; these factors have to integrate together.
So, if there are already eight infomarketers and four of them look like they know
what they’re doing who are selling to podiatrists, I’d think twice. There are only
4,000 of them.
The fact that there’s a dozen of them selling to dentists – and they’re all pretty
smart and they all look like they know what they’re doing – is okay. There are a
lot of dentists, there’s a lot of room, there is a lot of ways to slice and dice that
list.
I have three private clients who are all selling to dentists and I’m working with
three of them at the same time. It doesn’t make any difference. You can slice and
dice that three different ways. They don’t have to step on each other’s toes and
some do and some don’t cooperatively compete.
At GKIC, we can’t do that because we’ve got butcher, baker, candlestick maker;
it’s very hard for us to have pain-of-disconnect; it’s very easy working with
chiropractors to have pain-of-disconnect
Economics
The biggest thing about economics is this:
Bad economics cannot be overcome by good marketing.
Every time I tried and try to do it, I get my ass kicked and at this point I deserve
it; because I’ve long since got to the point that I really do know better. I know it’s
brain-dead stupid; but, every once in a while, even I can’t resist the temptation
and then I get my ass kicked again.
So if I can’t do it, odds are you can’t do it.
Here’s what everybody says, “The math is bad but we’re so clever and we have
such a great story and we are better marketers than everybody else; we will be
able to overcome bad math with great marketing.”
I promise you this is not true - it ain’t even close. The most recent misadventure
of that, in case anybody wants to know, was mail order ice cream.
You cannot overcome that math; you cannot do it. So you’ve got to understand
the economics of your business and of this business.
If you want kind of big thumb things, first of all in niches, their transaction size
is a significant item and, if it can’t be their transaction size, it has to be some
other frame of reference to compare and contrast your prices to.
With the diet coach at 10 grand, her customer gave her the close. She has to
contrast that to how many years you’ve been trying to lose the weight and keep
it off.
10 grand is outrageous but a thousand bucks a year isn’t that outrageous.

So really, how could anybody else play the game? They can’t. They don’t have
the ante.
So you’ve got to think about the cost of acquisition, the delay before you create
profit, any way you can mitigate and then what is that going to look like?
Lifetime customer value: are you acquiring customers that have a lot of value, a
little value, short-term value only or long-term value only?
The costs and margins of the deliverables themselves; whether you’ve got an
income business only or whether you’ve got an equity business or do you want
both?
So there are a whole lot of economic issues that govern do we want to play with
this market or do we not want to play with this market?
Affinity
Affinity or effective anti-affinity: Do you have any legitimate and leveragable
connection to the market?
So he can sell to home gardeners because he is one and he likes it just like they
like it and he even kind of looks like them; if you stick him in some overalls and
put a plant in his hand, he looks exactly what they think he should be. So he’s got
legitimate affinity with that market.
If you have no affinity with the market, your job gets tougher; it’s not impossible
but it gets tougher – unless you have a strong anti-affinity argument.
In a niche, the anti-affinity argument for a complete outsider goes like this, “So
all the dental consultants and trainers and coaches who are talking to you dentists
are all dentists just like you. So, a, that’s kind of Amish and b, they’ve all got one
way of doing something and they are going to try to force fit everybody into that
one way of doing something. Whereas as an outside marketing expert who has
thoroughly researched and studied this industry, we’ve come up with 20 ways to
be right and you will fit one of those 20.”
That’s the anti-affinity argument – everybody who is one of you is an idiot and a
smart prophet has finally arrived.
Without one or the other of these things, you’ve got some heavy going.
Authority
Authority: are you going to be able to take an authority position with this group?
Unique Argument
You need a reason for being there other than, “I want to make some money and
it looks like you folks have got some.”
Now that is your reason for being there and it is compelling but it’s not an
acceptable compelling reason. You’ve got to have them pretty far along before
you start talking to them that way.
I’m pretty open about it but generally – completely irrationally – people want to
believe that you are there for a reason other than just exchanging goods and
services for dough.
This is completely irrational; you shouldn’t care less. If Charlie says to me, “I
hate being a dentist and I don’t like you. If I could do something else, I would but at
this point it’s too late. I’m not going to smile and I’m not going to say anything
kind to you. I’m obscenely expensive because I hate doing this,” but he’s the best
guy so what do I care about any of that?
I shouldn’t; it’s the last thing you should care about. If you need something more
critical like heart surgery, you don’t have to have a story about your dad died of
botched heart surgery. You don’t have to have any reason for being there except
you want to make a shit load of money and you happen to be the greatest heart
surgeon that ever walked the earth.
Fine; I’m in. But I’m a rational personal and there aren’t many of us; we are a
really small crowd and it’s hard to make any money out of just the rational
people in a given population.
It goes back to the prolific question and input. Everybody laughs at me; I usually
get my mail every Friday and I’ll skip this week because of this so next Friday’s
box will be like a crate.
Half of it will be catalogs and every imaginable catalog because I try to be on

every list in every category because you never know when you’re going to learn
something.
I’ve got like 300 catalogues I get about cosmetics and skin care – and I use
Danielle a lot for that when I register!
I’m hunting; I need all that input in order to be effective. A lot of you aren’t even
reading the trade journals in your own category; you’re not even reading the
free stuff in marketing. It boggles the mind.
For example, Target is free – all you’ve got to do is fill out the little card. You
should be getting it – it’s the trade journal of direct marketing. Some of it is crap
of course but, every once in a while, there is a case history worth having or
somebody interesting that you should investigate more.
DM News is also free and all you’ve got to do is sign up; they also send out a
bunch of online stuff. It’s a major trade journal of the direct marketing industry.
Publishers Weekly is not free but it’s the trade journal of the book industry; so if
you want to know trends – what they are pushing out the door in six months
and 12 months in self-help, business and sales; who is doing what; what kind of
money they are spending; who just got a huge advance for something in one of
our categories – you should be getting Publishers Weekly. It’s a part of the
information marketing business.
You’ve really got to do homework in this business – before and during.

BUSINESS BUILDING BLUEPRINTS
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Business Building

Module 2: Conversion, Inspiration

With Dan Kennedy

The Conversion Process .......................................................................................................................... 5

Secular Religions ................................................................................................................................. 5

Readiness for Conversion ................................................................................................................ 7

Targeting Your Resources ................................................................................................................... 8

Intelligent Questions .....................................................................................................................10

Why Writing Matters ............................................................................................................................ 12

Driven by the Written Word ............................................................................................................. 12

Study Ethic ........................................................................................................................................ 14

Breaks from Writing ......................................................................................................................... 15

Being Prolific ..................................................................................................................................... 16

Getting Fresh Input ....................................................................................................................... 17

Influential Thinking ............................................................................................................................... 19

Stan Lee ............................................................................................................................................ 19

Hugh Hefner ..................................................................................................................................... 21

Alternate Universe Concept ............................................................................................................. 23

Internet and Media ............................................................................................................................... 26

Changing Landscape ......................................................................................................................... 29

Types of Market .................................................................................................................................... 32

Mainstream / Mass Market .............................................................................................................. 33

Choosing a Market ................................................................................................................................ 40

Key Factors to Consider .................................................................................................................... 40

Churn and Replenishment............................................................................................................. 45

Affordable Reachability ................................................................................................................. 45

Consumer Psychology ................................................................................................................... 47

Legal Costs & Risks ........................................................................................................................ 49

Nature of Potential Income........................................................................................................... 49

Market Research ................................................................................................................................... 55

The Conversion Process

I mean it in the religious, philosophical, cult connections. These on page 31 are

The chain is actually Buyer → Customer → Convert.

You’ll see the definition is changing one’s religion or beliefs.

He believes it as religion so that’s what we are up against when we set out to

Readiness for Conversion

There’s the readiness of the person to be converted – that’s very important.

Our business is, to a great degree, about

• How convertible they are

Why Writing Matters

This business is a lot about the written word (page 33).

I get a lot – always have over the years – of:

• “I can’t write” – which, of course, is nonsense

• “I don't like to write” – it would be a good idea to get in a different field

And they are running a sales training company!

At the time, my day fee was $8900 bucks

Driven by the Written Word

I want them to have study ethic because that’s

Breaks from Writing

However, the three biggest factors to it are:

• The place where you work

• The people you permit to interact with you

• The way in which you let them interact

These three people have profoundly influenced my thinking about the

“Self-contained construct” – so think about earlier, fraternity and community.

Really great infomarketing businesses do the same thing.

When people go to Comic-Con – it’s the SuperConference but with 50,000 or

I want you to have that conversation because

Internet and Media

In many respects, the Internet has changed nothing and

Free DVD – not free webinar; free DVD.

It’s made it damnably hard to protect intellectual property. We have a Titanium

It’s facilitated a global approach as never before and that’s good.