01 Transcripts
01 Transcripts
com
www.getwsodo.com
Module #1
www.gkic.com
www.getwsodo.com
www.getwsodo.com
© 2017 Glazer-Kennedy Insider’s Circle, LLC. All Rights Reserved.
Published under the United States Copyright laws by Glazer-Kennedy Insider’s Circle, LLC. No portion of
these materials may be reproduced in any manner whatsoever (whether electronic, mechanical or
otherwise and including photocopy, recording or any information storage and retrieval system) without
the express written consent of the publisher. Any unauthorized use, sharing, reproduction or distribution
of these materials by any means is strictly prohibited. Requests for permission to reproduce content
contained herein shall be sent via email to our Permissions Department via email (support@gkic.com) or
facsimile (312) 880-1201.
This Presentation (“Presentation”) has been prepared No representation or warranty is given as to the
by or on behalf of Glazer-Kennedy Insider’s Circle, LLC achievement or reasonableness of, and no reliance
and/or its affiliated companies (“GKIC”) for the should be placed on, any projections, estimates,
purpose of setting out certain confidential information forecasts, analyses or forward-looking statements
regarding GKIC’s business activities, plans and contained in this Presentation which involve by their
strategy. References to “Presentation” include any nature a number of risks, uncertainties or
information which has been or may be supplied in assumptions that could cause actual results or
writing or orally by or on behalf of GKIC in connection events to differ materially from those expressed or
with the Presentation or in response to any follow-up implied in this Presentation. Except to the extent
inquiries from the Presentation. otherwise indicated, this Presentation presents
information as of the date hereof. The delivery of
This Presentation and the information contained this Presentation shall not, under any circumstances,
herein are confidential. In addition to the terms of any create any implication that there will be no change
confidentiality agreement you may sign with GKIC, by in the affairs of GKIC after the date hereof. In
viewing the Presentation you agree that you and each furnishing this Presentation, GKIC reserves the right
of your agents, representatives, advisors, directors or to amend or replace this Presentation at any time
employees (collectively, “Representatives”) will not, and undertakes no obligation to update any of the
and will not permit any third party to, copy, reproduce information contained in the Presentation or to
or distribute to others this Presentation, in whole or in correct any inaccuracies that may become apparent.
part, at any time without the prior written consent of
GKIC, and that you and all Representatives will keep This Presentation shall remain the property of GKIC.
confidential all information contained herein not GKIC may, at any time, request that you and/or your
already in the public domain and will use this Representatives promptly deliver to GKIC or, if
Presentation for the sole purpose of familiarizing directed in writing by GKIC, destroy all confidential
yourself with certain limited background information information relating to this Presentation received in
concerning GKIC and its business strategy, plans and written, electronic or other tangible form
activities. If you have signed a confidentiality whatsoever, including without limitation all copies,
agreement with GKIC, this Presentation constitutes reproductions, computer diskettes or written
Confidential Information for the purposes of such materials which contain such confidential
agreement. If you do not agree to the terms of this information. At such time, all other notes, analyses
Notice, you may NOT view, copy or distribute any or compilations constituting or containing
portion of this Presentation. confidential information in your or your
Representatives’, possession shall be destroyed. You
While the information contained in this Presentation is may be required to certify such destruction to GKIC
believed to be accurate, GKIC has not conducted any in writing.
investigation with respect to such information. GKIC
expressly disclaims any and all liability for
representations or warranties, expressed or implied,
contained in, or for omissions from, this Presentation
or any other written or oral communication
transmitted to any interested party in connection with
this Presentation, so far as is permitted by law.
MAGNETIC MARKETING
www.getwsodo.com
www.getwsodo.com
CONTENTS
Module #1 .......................................................................................................................................................4
Dan Kennedy: Welcome to the Magnetic Marketing system. If you want more
and better customers, clients or patients, more systematically and surely
obtained, you've come to the right place.
It should be reassuring to know that I'm recording this in the 25th anniversary
year of the Magnetic Marketing system for its latest updated edition.
Over those years, it has been the number one bestselling program on direct
marketing for all businesses worldwide. It is the foundation of a movement that
has invaded hundreds of business, profession, industry, product and service
categories, literally changing the way their customers are obtained.
It has ended being advertising victims and income uncertainty for tens of
thousands of small business owners and it has liberated countless sales
professionals from the drudgery of cold prospecting.
It is as proven as the law of gravity. I tell you this because it may require some
patience from you for you to really get it and use it. Because it is contrary to
much of what you've probably been told, taught and come to believe about
advertising and marketing or prospecting, you might too hastily reject it.
Many of the most enthusiastic and grateful users of this system had the exact
same initial skepticism. This system is radical in its most basic foundational
concept, pull instead of push or chase. Magnetic attraction in place of
unwelcomed stalking and hunting.
KEY DISCOVERY
I'll kick this off by talking about the discovery that could well be the most
important realization you ever arrive at as a business person.
• I discovered that you can have the most wonderful product or greatest
service ever invented and still starve.
• I discovered that you can be a spectacular sales person and still starve.
• You can have a positive attitude that Norman Vincent Peale would envy
and be as motivated as a participant at a Tony Robbins seminar and still
starve.
• You can be a master closer with 365 sales closes and still starve.
• I discovered that you can provide great value, great service, great
expertise and still starve.
• Your business can literally be a paragon of virtues and still let you starve.
You are here because you are willing to reconsider that entire paradigm and
that's a very good thing.
It makes you a rare bird soon to take flight way above all others.
The need for more leads and more customers for lifeblood exists in businesses
of all shapes and sizes but few business owners ever develop formal, organized
marketing systems to meet this need.
Instead, they constantly seek out the one magic bullet that will solve this
problem… SEO, pay-per-click, social media, TV, billboards, radio, print ads. They
hope that someone will provide the answer.
BIG MISTAKES
The mistake made is they immediately focus on the media without having a plan
or a system in mind first.
They are often sold media and pour money into redoing all their websites or
making new video for them, into buying online traffic, into some ‘one thing’ to
change everything.
The more productive answer is to develop a system that attracts new customers
to you in an organized way.
A system that gives you reliability and predictable results so you finally know
when you invest X dollars, you can expect Y number of leads, then Z number of
appointments or selling opportunities and a system that enables you to better
target the most appropriate and valuable customers for your business. Most
importantly, a system you control.
At the very least, you need to really understand what marketing needs done,
why, and in what way, so you can properly manage outside providers.
TRADITIONAL ADS
Just as an example of how much trouble you can get in and have probably
suffered multiple times… by turning to outsiders for the marketing that needs to
bring you new customers… let me summarize the problems with relying on ad
agencies and the kind of advice they give and the advertising they produce.
1. Media commission
2. Mark ups
3. Their other profit centers
4. Creative concerns
5. Peer approval
6. Portfolio building
7. Awards
8. Satisfy the biases of their superiors
9. Satisfy the client's preconceived ideas
10. Client's results
1. Results
2. Results
3. Results
What you are getting here in the Magnetic Marketing system is actually built for
accountability. So, do not spend money on any advertising or marketing ideas,
strategies, media or services that cannot provide viciously accurate, fast
measurement of return on investment. Period. No exceptions, no excuses.
Ad agencies are selling media and they are compensated based on how much
media they can get you to use.
Their advice is not objective advice. It is advice from a seller and it has to be
viewed that way. All agencies want you doing more and more and more thus
spending more and more with them. They are not into what I teach as financial
efficiency.
When Goodyear flies a blimp over a stadium, they don't have any illusion that at
half-time of the football game, 35,000 people are going to jump up out of their
seats and run out and buy snow tires. They don't expect that to happen and it's a
good thing they don't because obviously it doesn't.
What they're hoping for and what they're buying is that, over a long period of
time, by these sports fans seeing the Goodyear blimp over and over and over
again, they connect it with this happy pleasant event and they have warm, nice,
fuzzy feelings for Goodyear and that someday when they have to go buy a tire,
all of that comes together in their mind and causes them to buy a Goodyear tire.
I call that high-risk marketing. It just seems to me that there's a straighter line to
get from a person who needs tires to buying Goodyear tires than going through
all of that rigmarole of building a blimp and hiring a pilot and finding a football
game and flying a blimp over it.
Big companies can, I guess, afford that kind of marketing. Big companies can
afford the risks of it. Does it sell tires? If so, how many, when? How will we ever
know?
The small business entrepreneur cannot afford that kind of high-risk marketing.
In fact, the kind of marketing that the small business owner typically needs is
the kind where he invests a dollar in marketing today and gets it back by noon
tomorrow so he can have it in the bank before the end of the day to cover the
check he wrote for it in the first place.
The discipline of the entire mail order industry… now the direct marketing
industry… is that, for every dollar invested there is a direct, typically fast and
always measurable return of that dollar plus presumably some profit.
Most media people and most ad agency people have little or no understanding
of that kind of advertising and marketing. Most even fear it because it is so
accountable.
One of the most famous ad men of all time, David Ogilvy, once confessed that,
"Only the mail order people, the direct-response
people really know what they are doing. I'm here to
“If you want your
tell you that if you want your marketing done by
somebody who really knows what he's doing, you must
marketing done by
own your marketing." somebody who
really knows what
The problem lies with the business owner trying to
abdicate responsibility for generating leads and he's doing, you must
marketing their business and, with it, offloading own your
control for the whole marketing process. marketing.”
When you give that responsibility and that control away, you have very few
options of who to give it to.
Offloading the responsibility for marketing is usually a big mistake and it tends
to compound.
The business owner jumps from one hopefully quick fix, one magic answer, one
wizard to another, continuing to write checks along the way and never getting
the response that he needs to get.
GETTING CUSTOMERS
Most business owners start to deal with marketing and say, "Hey, we have to get
some customers in here, what do we have to do to get customers."
They jump all the way to the media stage and they start to make choices of,
"Well, let's run an ad in the newspaper," or "Let's send out a flier," or "Hey, the
Valpak rep showed up last week and gave us a pretty good story. Let's put a
coupon in Valpak," or "Let's do an email campaign.
Let's sign up with Constant Contact or another
If there's not a good
service." "Let's get busy with Facebook." way to track the
results, you've got to
They deal with the media choices without strategies
about what it is they want to communicate and who be strong enough to
they want to communicate it to and then what the say, “No”.
best ways are to find and reach those people, so
they're really out ahead of their skis.
Instead, what the smart business owner has to do is gain enough knowledge so
that he is informed, educated and strategic when he does deal with service
providers and when he does pay for media.
He has to learn to say no to other things no matter how siren the song and no
matter how ego-appealing it may be to be on radio or television. No matter how
many people are telling him, “You have to be on Instagram,” maybe, maybe not.
The questions of who you are trying to reach and attract and where they are,
how your message is best presented, what time and
money resources you have, must all be considered.
If you sell for a
If there's not a good way to track the results, you've living, the number
got to be strong enough to say, “No. I want marketing one thing on your
where I can measure what I'm getting for my
hate list should be
money.”
cold call prospecting
For the sales professional's listing or for business grunt work.
owners with sales people, your answer is not more
cold call prospecting.
Further, prospects don't like feeling stalked, hunted, badgered or drug into
selling situations.
If you sell for a living, the number one thing on your hate list should be cold call
prospecting grunt work.
My late friend Zig Ziglar would call that “warm approaching” to put a positive
spin on it.
I appreciate the spin but I just don't see anything warm, friendly, fuzzy, happy,
pleasant about this process of trying to talk to people who at least emotionally,
I grew up in the Midwest where we have coal mining and to me cold prospecting
is like coal mining. It's dirty, filthy, ugly, smelly, sweaty work best left to people
who earn minimum wage with brawn not maximum wage with brain.
Regardless of what you have done before now, as a result of this system, you
should never cold prospect again.
I'm going to show you how to eliminate it from your existence and change the
way you attract your customers, clients, patients or donors.
• This means that you are not running ads wondering what the results will
be and it operates affordably and efficiently.
• This means you aren't doing old-fashioned prospecting grunt work
getting erratic results and burning out from rejection.
• This means that you can go to bed every night knowing within a small
range of variance, how much business is coming in by noon tomorrow.
Affordably means several things. You don't necessarily have to spend a bundle
to make a bundle.
With my Magnetic Marketing system, you can often achieve a cost per lead or
cost per sale less than your past experience or your industry norms.
Testing can be done inexpensively. Ultimately, you can create better value for
your business, a better value or lifetime value customer.
Too many people wind up owned by their business rather than as owners of
their businesses.
One of the great virtues of having a business driven by Magnetic Marketing is its
independence from your continual hands-on involvement. Some marketing can
even be 90% on autopilot.
About quantity and quality, the right balance. We want a lot of response but we
want qualified response too.
Having a Magnetic Marketing system puts you in control with the ability to
consistently, reliably, predictably attract qualified leads to your business and
you can get this to start working very quickly.
One day I'm home alone, a weekday afternoon in July, everybody is out of the
house. I've got the house to myself and I'm at the kitchen counter. I've got a
pitcher of ice tea and I've got a client on the speaker phone.
You work for a real living. You're not home during the day. But, if you stop and
think about it, the options of who can be at your home on a weekday uninvited,
banging on the door, are pretty slim. It's a pest.
In the recession years, we knew who the pests were because all the Jehovah
Witnesses and Avon ladies carpooled. Now it can be all sorts of people, but it's a
pest.
I did what you do with pests. I ignored it, confident that if sufficiently ignored it
would go away. It didn't.
I'm ignoring, continuing my conversation. He's ringing and banging, ringing and
banging, ringing and banging. But finally, I'm right; after ignoring for a sufficient
length of time he gives up and leaves ever so briefly.
He can see my back to him through the panes of glass on the doors on which he
is now banging with incredible violence.
We have the contest of wills that seems to last an eternity. Finally, he wins. I
can't handle it anymore. I turn around to deal with
the most annoying pest ever.
He went from being
It turns out the reason he's there is my entire yard is
the most annoying
in flames.
pest to the most
We set a record that year, 15 straight 120-degree
welcomed guest
days and everything was a little dry. My guess is
ever.
some imbecile driving through the community
flipped a cigarette butt into orbit and it picked my
yard, but I'll never know.
Literally, everything but the water in the pool is on fire. This Good Samaritan
who thinks I'm an idiot, which is arguable by now, is there trying to save my
house.
Now here's what's instructive. At that precise moment in time, he went from
being the most annoying pest to the most welcomed guest ever to visit the
Kennedy household.
Because he was there with just the right message at just the right moment in
time. In this case, “Call 911 stupid, I'll work the hose.”
The reason it's instructive is because know it or not, acknowledge it or not, like
hearing it or not, the vast majority of the time that you try and communicate
with your present, past or future prospects, clients or customers, you are
categorized as a pest, not as the most welcomed guest of the day, week, month
or year.
You don't force yourself on them uninvited. They come to you already interested
and prequalified.
In its purest form, a lead generation ad works just like a personals ad, it
describes who you want to respond and who you do not want to respond and
gets them to respond, so your perfect prospect steps out of the crowd and
identifies himself to you.
Fortunately, this can often be done with small relatively inexpensive ads
enabling you to put the majority of your investable dollars and effort into
follow-up marketing to well-qualified prospects.
“Single white male 38 seeks single white female or divorced white female
25 to 35 into golf, travel, fine dining, Rush Limbaugh and the Grateful
Dead. No pets bigger than a bread box.”
As you can see, this advertiser has described who and what he wants and who
and what he doesn't want.
A trick to keep in mind is the tighter the description, the more likely you'll get
exactly the respondents that you want, although usually at the expense of
quantity.
Let's try an example. Let's say that the perfect prospect for your service is an
experienced, successful, corporate executive frustrated and concerned with his
lack of personal financial security and wealth. Your ad might read something
like this:
If you earn at least $100,000 a year, have 10 plus years’ career experience,
own your own home and are so busy with the demands of your career, you
have little time or energy for personal finances, my free report
‘Breakthrough Wealth Building Strategies for Super Busy Executives’ will
be of interest to you.
Please do not respond if you are completely satisfied with the amount of
taxes you pay, the return on your investments and the pace of your
personal wealth accumulation or if you are closed-minded to new ideas.
If you qualify as described above, you should read my report before you
deposit your next pay check. For details and free report sent by mail
confidentially to home or office, call free recorded message 1-800 [insert
number] anytime."
Or let's assume you consult with people about buying the right computer and
software for their needs. Your ad might read something like this:
This report could save you hundreds of dollars and hundreds of hours of
frustration. For details and your free report call the Truth Line. Free
recorded message 1-800 [insert number]."
You could add or substitute websites, although that does raise questions about
the wisdom of driving a prospect from offline, engage directly and only with you
online where there is a whole world of competition, but that's a discussion too
complex for this time and place.
COMMON OBJECTIONS
Before I get into the nuts and bolts of what you need to have in place before
using these kinds of ads, let me get something off the table.
It's the most common objection we hear and we've been hearing it for decades:
“But this stuff can't work in my business.”
For most of your continuing education, whatever business you're in, here's what
you've been doing:
We have a technical term for this, it's called “marketing incest” because it works
just like real incest. In a short period of time, everybody gets dumber and
dumber and dumber and dumber until the whole thing just grinds to a creeping
halt.
All great advancements in businesses come from outside the box not inside the
box.
Hardly anybody else outside their business is doing it but could be. I borrow it
from industry A and I take it over and I teach it to industry B.
While I'm over there, I notice something they're doing that hardly anybody else
is doing but could be. So, I borrow it from industry B and I take it back and I
teach it to industry A.
SELF-DESTRUCTIVE MYTHS
That's how this whole system of Magnetic Marketing came to be. It works but if
you're like almost every other small business owner, there are three self-
destructive myths of running your business that we must deal with and
eliminate from your thinking right from the start.
None of those concerns has any basis in reality. This stuff certainly can work in
your business and I've never seen an exception.
It also applies to all media although soon here I'm going to zero in on one for
teaching purposes.
Yes, you may get some criticism, push back from staff, kidding from peers, you
may be uncomfortable with it until its results soothe your nerves.
The first letter is made to look like their kids wrote it with crayons. It's from the
kids. It's full of misspelled words. It's sloppy, obviously childish.
The tire manufacture they are associated with that offer shops co-op ad dollars
refused to give them any for mailing this letter
because it is amateurish.
We're not in junior
They told the shop owners, “Surely you can do better
high anymore
than this.”
obsessing over what
Well, it will be hard to do better than $100 for every
other kids think
dollar invested.
about us.
I want you to get out of your own way.
Ignore the criticism from others, be different and worry only about what works.
BUILDING BLOCKS
Now, we can get busy building out your Magnetic Marketing system. It has three
big building blocks.
The first building block then is right message, what do you say to your
marketplace, to your past, present and future prospects, clients and customers
that is compelling, that is magnetic, that cannot be ignored, that must be
responded to, that draws them to you like a bright porch light on a dark night
draws moths? Do you have a great marketing message? Most businesses don't.
Second, who you say it to, and, by deliberate strategy, who you do not say it to.
Again, most businesses don't ever put real thought into who they're trying to
reach with their products and services.
Third, the media, how do you deliver the message to the market effectively,
affordably, efficiently in a way that involves little or no manual labor and
magnetically attracts people to you?
All your marketing needs to have an offer telling your ideal prospects
exactly what to do and why they want to do it right now. It should be
irresistible and time sensitive and give them some kind of transformative
value if they take action.
This is not just an implied offer like a store running ads, “We're here,
come on in.” This should not be a common offer like, “The Sale of the
Century. This Weekend Only.”
• Number two, there will be a reason to respond now. The hidden cost
and failure in all advertising and marketing is in the ‘almost persuaded’.
They were tempted to respond. They nearly responded. They got right up
to the edge of response but they set it aside to do it later or to mull over
or to check out other options.
When they get to that edge, we must reach across and pull them past it.
There must be a good reason for them not to stop short or delay or
ponder, there must be urgency.
• Number five, there will be follow up. When you invest in advertising
and marketing, you're not just paying for the customers you get.
You are paying for each lead you generate, every call, every walk-in,
every email, every reaction and response of any kind.
Doing nothing with even one lead is like flushing money down the toilet.
It is a serious lapse in judgment and waste of precious resources every
time you fail to follow up with every lead or every customer.
• Number six, results rule. Results rule period. Do not let anyone confuse,
bamboozle or convince you that anything else is of any importance.
Nobody's opinion counts… even yours.
The only thing that matters is the answer to the question, “What results
did I get?”
When you implement all these into your marketing approach and marketing
messages, you change the way you communicate with your prospects and
customers dramatically and forever.
MARKETING MESSAGE
Now let's drill down on marketing message. Most small businesses are out there
with no message at all. A person opens a restaurant, a flower shop, a dental or
Typically, he spends a lot of time and energy worrying about what it looks like
inside, which obviously nobody sees if we don't get them in there in the first
place.
He worries about his sign and his logo and his name. Then he opens the door
and he waits for the customers to come in.
That marketing message built an empire and a fortune for Tom Monaghan in a
very short period of time and built marketplace identity so that you could
probably still go out and stop 10 people on the street, throw the generic word
‘pizza’ at them and seven or eight of them are going to immediately respond to
you with “Domino's”.
What you have to ask yourself is, if you go out in your marketplace… whatever
business you're in… if you're a florist and you go out into your marketplace and
you stop 10 people on the street and you say ‘flowers’ and seven or eight out of
those 10 respond to you by giving you the name of your business, how well are
you going to be doing? You're going to be doing very well.
Now, for those of you sweating over Amazon, let me tell you something. You
can't be Amazoned without your permission.
Their marketing message is the same for everything. Fast, kind of like Domino's,
in one day or less. Cheap or cheapest choices, you won't beat them at that but
it's actually a pretty small territory.
You can't win in combat with them with their message. You need a different
message of your own that you can win with.
That's when you have to do some creative thinking about your business to make
it into something unique.
J.K. Rowling and her publisher of the Harry Potter books made each new
book’s release of exceptional benefit to independent bookstores with a
devised plan for big events, books held back to release at midnight,
drawing huge numbers of kids and parents into these stores milling
about at a party, in costume, snacking and browsing and buying other
books for an hour or more before the clock struck 12.
Often, special events and classes can attract new customers that would
otherwise ignore the business and provide added value to current
customers as well as the community at large.
3. Can you niche your target market in a way nobody else can or will?
4. The opportunity gap. What void in the marketplace can you fulfill?
Fast casual restaurants like the very successful Panera Bread chain filled
a gap between fast food chains like McDonald's and full service mid-
priced restaurants like Chili's, Applebee's and Olive Garden.
You probably know of the famous and popular magicians, Penn & Teller.
They are the only magician team with one of the partners who never
speaks. Sure, it's a gimmick but it is a gimmick that has served them well
for decades.
There can easily be another 20 questions like number six and number
seven that dissect your product, services and business and its marketing
message into micro parts, any one of which may yield the USP.
GEICO Insurance has very successfully made their advertising for the
past 10 years about a tiny piece of what they do, the price quote – “Save
15% in 15 minutes.” It has nothing to do with the products or the
services to policy holders, only with the process of buying coverage.
This is a very good question that can lead to a very magnetic marketing
message.
His secret was a room full of automatic heated massage chairs that the
arrived patient was plumped into, getting therapy while actually waiting
to get into the doctor.
The companies in the one day bath tub and shower business with the
prefab units that fit over the existing tub and shower have capitalized on
this.
Rooms-to-Go uses bundling with a single stated price for everything you
see for the room, couch, chair, tables, lamps, throw rug, sofa-sized
painting.
10. What kind of special experience can you offer your customers?
Do you bowl? Well, we have a virtual reality game for that. Visit
museums? You can see all the same art online.
DEVELOPING WIDGETS
That final question, number ten, touches on something key. What special thing
can you offer your customers? It's this process.
The creation of special things as offers, that's another key part of your Magnetic
Marketing experience. We call these special offers ‘widgets’ and you can think of
them as packages of services and goods and premiums and experiences bundled
together.
Widget making is an important marketing skill. Once you've got it, you'll use it
over and over again every day in your business.
One of the best examples that I've seen and that I know quite a bit about, comes
from Las Vegas in the hotel and casino business where pretty much everybody
offers the same thing, a place to come and lose a lot of money and have a good
time doing it with a lot of lights and pretty girls. For decades, that was the
business in Las Vegas.
It's changed now to be less about gambling and more about restaurants, night
clubs and shopping but that's a recent metamorphosis and the jury is still out on
it.
Bob sat down and he turned the hotel business and the casino business in Las
Vegas into a very specific widget that he could hold up and people could see and
get a grip on and understand and be attracted by and buy in advance of use.
Let me describe his widget. Ask yourself if you would respond to it presuming
you were convinced it was real.
“Give me $396 and I'll give you two nights, three days in my hotel in one of
the deluxe suites. There will be a bottle of champagne waiting for you when
you arrive.
You can have unlimited drinks the entire time you're here whether you're
gambling or not. Even if you're sitting in one of the lounges and enjoying
the entertainment, you pay nothing more for your drinks.
More importantly, for your $396, I'm going to give you $600 of my dollars
to gamble with in my casino.”
His widget included the room, it included the drinks, it included some extras like
the champagne and souvenir dice and show tickets. It included $600 to gamble
with while you were at his casino.
Just for the record, the $600 was match play for even-money wagers with wins
paid as exchange of the promotional dollars for real ones. But that's all just
details.
You may recall seeing Bob's full page ads for this widget in Parade, in Sports
Illustrated, in Playboy, in dozens and dozens of magazines and newspapers all
across the country.
Bob filled his rooms by selling that widget and that was really the business that
he was in, the business of selling that widget. He didn't advertise any other type
of accommodations. He didn't bother advertising his hotel as a hotel. He
concentrated all his efforts and all his energy and all his resources on selling
that widget.
There are a couple of very interesting side points. He ran his hotel with between
90% and 100% occupancy on a consistent basis as a result of these widgets.
That created overflow so he bought a second hotel off the Strip and ran shuttle
buses to get the people back and forth.
Even more interesting, his widget provided him with a cash flow advantage that
no other hotel or casino had at the time.
These packages were prepaid. You bought your $396 package today but you
might not actually make reservations and go to the hotel until a month later, six
months later, even a year later.
In the interim, Bob exchanged your $396 for a certificate, a piece of paper which
entitled you to all the benefits that I described. He had your $396 in a bank
account earning interest or funding construction and remodeling during that
time that it was not redeemed.
If you study that example closely, you see that a fairly mundane and ordinary
business, the hotel business and the hotel casino business was turned into a
totally different business.