What can politics teach us about marketing strategy?
Political expert Phillip Stutts joins us for this episode of the show, where he shares how using political principles can help businesses get more out of their marketing.
It's a unique perspective on how to run campaigns and build more human connections.
Louis: Bonjour, bonjour! And welcome to another episode of EveryoneHatesMarketers.com the marketing podcast for marketers, founders, and tech people who are just sick of shady, aggressive, marketing. I'm your host Louis Grenier.
In today's episode, you will learn how political principles can help you improve your marketing -- and that's something that we've never talked about before in this podcast. We touched on politics a few times, but this is the first time I'm talking to a real political expert who's bridging the gap between the two worlds.
So my guest today has more than twenty years of experience in political and marketing. In politics and marketing, he's worked with multiple Fortune 200 companies. A lot of experience working on campaigns with billions, with a B, of dollars in political ad spend, contributed to over 1,000 actual victories. Including hundreds of U.S. House campaigns, dozens of Senate campaigns, and even three Presidential victories.
As you can hear, my guest has a lot of experience in this area, so I'm really looking forward to talking to him today. Furthermore, he founded Go Big Media in 2015. He's won more than 30 prestigious awards. They work with U.S. Senators, Governors and all of the other politic terms you've heard of. He's been featured in Ink, in Fox News, MSNBC, CNN. Fox Business even called him a marketing genius, so as you can see his very work is quite value worthy. Phillip Stutts, welcome aboard.
Phillip: What an honor to be here. I'm fired up and excited to deliver for your audience today. Let's roll.
Louis: Let's roll indeed. So before we go into this politic marketing, how can the two learn from each other, let's define what politic really is. How do you define really simply what does it mean to be in political, to be involved in politic?
Phillip: Yeah, I grew up in the state of Alabama and I basically had two passions growing up which was football, not soccer, but football and college football. My university where I went to school was the University of Alabama, that's a very famous college football team.
But I'm 5'9", 150 pounds, so being able to play that sport really wasn't in my future. And then the other passion I really had growing up as a little boy was politics. I just thought it was fascinating. It was obviously a much different political atmosphere than what people are currently living on. I'm 44 now, so this is a long time ago.
And I just decided when I was in college that I had to do something that I was passionate about or couldn't, I didn't think I could be successful in life.
So, I got into working on political campaigns. These are politicians that run for office and they have people that work for them that are running their marketing programs for their campaigns. And I did that and I've been doing it for over twenty years now.
Then what I ended up learning was the principles behind the way we run political marketing campaigns can give businesses exponential success. And the principles behind what we're doing is the premise behind the book that I wrote because I kept seeing shady marketers, sounds familiar?
That put their needs ahead of their business clients. The business owner would hire a marketing firm and the marketing firm always made money, but the business did not always make money. And so the book that I wrote called Fire Them Now, about firing your marketing agency, was basically about how can business owners win at the game of marketing.
How can they change the rules? And it exposes the bigger lies that marketers are selling businesses so that business owners can be aware of those secrets, those lies and turn it around. And try to hire someone that puts their needs first.
Louis: Right. So you managed to answer both questions at once.
Phillip: of course I did.
Louis: The first one that I asked, but the one that I didn't ask, which I think is the first secret, right? Which is don't answer the question, answer another question you want to answer, right? So politics, before we go into marketing, well how would you define it in layman's terms?
Phillip: Well, I mean, how do I define politics?
Phillip: I would look at it from my own industries. Working for people that are trying to better the society and the country that we live in.
Louis: Right. And I have so many thoughts as soon as you started to talk about the shady marketers who are trying to make money off business owners. Because as soon as you said that, I thought, well from my perspective it's the exact same for politicians. The shady politicians trying to make money off the back of the hard-working people in every country, right?
Phillip: Yeah, but I want to be real clear on something. I'm not talking about politicians, right? What I'm talking about is how we market politicians to win elections. That is not shady. In fact, it's crazy, it's like this diamond in the rough of a bunch of shit, and that diamond is the difference between a lot of businesses having an unbelievable success or being amongst the shit of marketers and having more failures. Does that make sense?
Louis: It makes complete sense. So yeah, obviously we're not gonna debate if Democrats are better than Republicans, we're not gonna debate which politician is doing a better job today. Instead, we're gonna try to think about marketing a political campaign and apply those principles to marketing a business.
A lot of our listeners are business owners or they are in house marketers, or maybe they want to launch a product, they don't know how to market to them. To get at it, to define those principles that you learned, shall we?
Phillip: I'd love it.
Louis: So, what is the number one kind of principle you learned? And perhaps instead, flipping it on its head. What is the biggest mistake you see marketers doing, or business owners doing when it comes to their marketing?
Phillip: Oh, such a good question. What I would tell you is -- and it's not one thing that I would tell you will help businesses and marketers -- especially those that don't have the budgets, it's three things. And that is what I call the three Rs.
And every politician, every political campaign I've ever worked on -- we sort of go into it and say, okay how are we implementing the three Rs? The three Rs are relationships, reputation, and referrals. Okay? So what I mean by that is this, the politician has a certain amount of status, and we use that to build relationships with voters.
Those voters will then in turn vote for that politician. The status is the reputation. That makes sense, right? So we have this reputation that's built on status, we use it to build the relationship with the voter, and then the third R is referral. And then we get those voters to promote, to donate money, to do whatever to refer other voters to the campaign. Ultimately, that results in that politician winning.
There's one other aspect to this and it's called speed. And the reason that I think that this is so important is because if you don't have massive budgets, remember in most political campaigns, I start with zero dollars. I don't start with millions of dollars.
Over time, our candidates can raise money only when we build their credibility through our marketing, but we have do it on the cheap. We have to do it with low dollars, and the speed part of what I'm talking about is that in every marketing campaign I've run in politics for over twenty years, we've always had a deadline of whether we win or whether we lose.
Phillip: And it's Election Day. When you have Election Day, you don't hold 7,000 meetings to talk about a concept. You don't debate or you don't put your head in the sand and get paralyzed with fear. You have the ultimate deadline. And if I'm to look at my own business, then I would tell you that everybody knows whether I win or lose, all of my competition.
They will bury me if I lose more than I win. I'll be out of business. So, my number one priority is how do I constantly serve my client, innovate for my client, move fast for my client, execute for my client, promote a strategy that wins. Test things that either don't work or do work and then put all the money into the things that do work. How fast do I have to move? Because my entire business is predicated on deadlines.
What business owners struggle with is the fact that there's never a real deadline for a marketing campaign. It's let's just launch it and hope we get a good ROI. So my thing is this, as a marketer if I know I had a deadline then my only, my number one priority is my candidate. If the candidate that's running for the office wins the election, if that candidate wins the election, guess what?
That candidate remains my client and I make more money. I can brag about my win. I can submit or work for awards but that only happens if my candidate wins. And that's a metaphor for business owners. Are the marketers in there first and foremost thinking about growing a business?
Are they thinking about: Why don't I sell them something quick and hot and flashy? And make some money and then they're not gonna see any success out of it, we're gonna get fired, but at least we got paid.
Or is the marketer going, you know what? Let's build this the right way. Let's make sure that this company is growing over the long-term because if we grow over the long term, I'm gonna make a lot of money. I'm gonna be successful. I'm gonna tout my success. And that's what I want business owners to think about before they hire a marketing agency.
Now, I'm gonna answer your last one. The last one, it was about being shady or the things that I have seen that people have made mistakes on, is that right?
Phillip: Yeah. My number one pet peeve in life is marketers that market to tactics without a strategy. And every business that comes to our company, our marketing agency has basically been sold tactics. We'll have a business come in and I say why are you talking to us now? And they go, well, we ran a bunch of Facebook ads and we have some SEO up and we're not really seeing much.
And I go, whoa, whoa, whoa. That's a tactic. That is not a strategy. Running some Facebook ads is not a strategy. And I hate tactics and 98% of marketers out there will go, hey, let's just just put up some Facebook ads. By the way, I can get you 30 leads in 30 days.
By the way, they're all crappy leads, so they aren't real leads. And by the way, you've now forked over 5, 10, 15 thousand dollars to that marketing agency. They got paid -- 50/50 chance you found any positive result for your business. Here's what I know. Tactics can succeed, but they will always fail at some point. Always.
We have a client that came to us. They're a 20 million dollar client and they had run a marketing program for basically ten years, the same marketing program. And the marketing program was run on discounts for their business, okay?
They grew the company by 10 million dollars by running a marketing campaign on discounts. In the last two years, they had spent 1.6 million dollars on their discount marketing strategy and they have lost business. They had lost not only 1.6 million in the marketing dollars but they had also lost business.
And they came to us and they said, we can't figure this out. And I said because your marketing ... how do you know that's what the customer wants? They said, well, it works. I think the most ignorant thing you can do is guess a marketing strategy or a marketing tactic and then run with it and it be successful, because that ultimately is gonna run out.
For this company, it ran out. And so they came to us. I said, have you ever researched your own customers? Have you ever found what resonates with them? What drives them? What are the psychological drivers that get them to make purchasing decisions? And they went, no. We just ran on discounts.
Well, what happened, what they built their company for ten years on discounts in a bad economy. It started in 2008. Discounts resonated with their customer base then. But when we ran research reports, psychological reports, and purchasing decision reports we found out that whole mindset of that customer had completely changed.
That they wanted higher quality and a higher standard than they wanted discounts. Discounts were cheap. And I would tell almost any business owner now if you run around saying discounts, you're in deep shit.
Louis: I want to make this point because I'm going to forget about it, if I don't. In Ireland, there's this company that does exactly what you mentioned, the discounting stuff. They say, like on TV I see them bragging about discounting. That's the only thing they do and every single time I wonder how the fuck are they making money?
How the fuck are they sustaining a business with just discounting and cheapening their brand? And sure enough, in the last few years, you can hear reports of the revenue is deepening and all of that, so it echoes what you're saying here. And my apologies for cutting you on this one.
Phillip: No, no, no, it's great. And that's true. It's a great example. What we've found when we went in and did -- it's called an audience insights report -- when we found what the audience, what their customers thought, we found out that they had higher standards.
We also found out that they were bundling services. Bundling. They said in their mind a higher standard is to bundle and save money. Not to buy discounts. And so once we went in and changed their marketing messaging to fit what their customers wanted. That's the strategy, by the way, figure out what the customers want and build a relationship based on that.
Once we figured that out, we also figured out a bunch of other reasons why those customers were making purchasing decisions. We reconfigured and we actually put a strategy in place based off data and the platforms that they were going on and that tweak has grown the business by two million dollars in the last four months.
Louis: Nice. So I'm sure listeners can't wait to know how to do that, right? So, let's backtrack a little bit. You mentioned the three Rs a few minutes ago. Remind us what they are.
Phillip: It's reputation, so you must have a reputation that is completely authentic and honest. It's relations, relationships. You must build relationships with your customers and they must not see you as a commodity. Because if you're seen as a commodity to the customer you're replaceable. So, it's building relationships with the customers.
And the last is referral. The greatest way, and I know you do this sort of case study where you have a thousand dollars and you do a startup. If you want to know the greatest way ever to grow your business without any money is referral. Figuring our referral strategies. And so that's how we do it with politicians.
That's how I've run my own business. I'll be honest with you, I started my political marketing agency less than four years ago and I'm the one who wrote the first check because we had no money in the account. We are over a twenty million dollar business in less than four years and I've never ever, ever, ever spent money on an ad. I've run my entire business and built it into an over 20 million dollar business on the three Rs.
Louis: Let's talk about something you mentioned briefly, but I think is super interesting. The concept of not only when you have a political company to run, but you also have a deadline and therefore speed is essential. And you don't have time to be scared about anything, you need to do, do, do and move fast. Let's take the scenario, a company that is in this exact situation.
Either they're losing money or they want to get started to truly grow. Let's set up an artificial deadline of like the next six or twelve months. They need to see major return or else it goes under. Right? Let's say you work with this company.
You mentioned a few tactics, right? Such as running a customer insights report and all of that, maybe we can take you through that. But more importantly, you said that what matters the most is to have a clear strategy that is led by what your customers are telling you. Right? Am I remembering right?
Phillip: You're right.
Louis: How do you do that? What is the number one step? How do you go from I don't know what I'm doing, I'm discounting the fuck out of everything, my reputation is on the line, my company is losing money to this place where you're making money and don't know almost what to do with it. What's number one step?
Phillip: It's the number one step that we do in politics. It's the number one step. I won't work with any business that doesn't take this step, and it is to undergo research, a psychological driver report on their customers or their ideal customers. And so in politics, you've heard of polling? And how you run polls to figure out how the candidates are doing?
But inside a political campaign, we will actually run polls to understand what issues are the most important. So, let me use this because it's better from a metaphorical standpoint. In politics, a political candidate says I believe in these ten issues.
They could be environmental issues, social issues, economic issues, whatever. And then we run a poll and we find out would the voters that this candidate is running, that the voters actually agree with that candidate on three of the ten issues? You following me?
Phillip: Why would I run a marketing campaign that even ever, ever, ever talked about those seven things that there's no alignment with? Correct? All of my marketing campaigns are based on the three issues. Where the candidate believes in those issues and the voters are passionate about those issues.
Those are drivers to them voting, or in a business sense, those are drivers to transactions. I'm always trying to find what the alignment is first before I can build the relationship. And so that is where I start. No matter what, that is always what I do.
You have to figure out first where you have alignment and why your customers are making decisions and what motivates and drives them to do that and ultimately what platforms they're on to find them.
Louis: How do you go about it? What is step two then? How do you advise a business to do it in a simple way? Maybe not as complicated as some big political player.
Phillip: We initiate research reports for every single one of our clients and then we find that out. And then from that, we can devise and write a plan. A long term plan that says -- let me tell you this. Here's the biggest lie, one of the biggest lies in marketing today. I'm gonna be honest with you. I own two digital marking agencies. Got it?
The biggest lie in marketing today is that digital marketing is the tip of the spear for your marketing campaign. It is not. The tip of the spear is to build a personal connection with your customers. Every single person in this country and around the world has a smartphone in front of their face right now.
And so the marketers know this and they tell these business owners, hey everybody's got a smartphone in front of their face right now. People are scrolling through 300 feet of mobile content per day. Everybody's on video. By the way, that's all true. But why are you trying to compete in a space with 10 billion people?
It doesn't cost anything to build personal relationships with your customers. To make them so loyal to you that they can't go or do anything without you or go to another company because they'd rather pay more to have the kind of service and relationship that you've built.
And then you use digital platforms to reinforce the message, to reinforce the transaction, to reinforce the relationship. What we do in step two is we figure out the strategy is how are we gonna connect? People lack connection today.
People are dying to have real connections. Not artificial connections. Not digital connections. People want to feel loved, cared about, and they want to buy into something that they believe in. There's more purpose in the customer now than there ever has been.
You must have a strategy that builds that. A plan that shows that. That shows how you're gonna build that. That is not built overnight but it is a sustainable model whether the economy dies or not.
Louis: Let me stop you here because I understand putting the strategy together. Perhaps we'll have time in the next few minutes to actually talk about what is a strategy, what is not a strategy, because strategy is used left, right, and center to talk about stuff that's not really what a strategy is.
And I know that you know exactly what that is, so I'm interested to hear that in the next few minutes. But let me backtrack a bit because step one seems very obscure to me. You mentioned to research on your customers, understand what drives them.
What are the top three questions you like to ask and how do you recommend businesses to go about researching? Should they send emails to their customers? How should they go about it?
Phillip: Yeah, there are a bunch of different ways. I'll tell you how we do it, and then how are other ways, the ways you can sort of hack it, right? First, we make an investment. A small investment. And we're one of the only marketing firms in the United States that has a licensing agreement with one of the largest data and analytics collection firms in the country. And then we use survey data.
You'd be surprised by how many people that are out there that will take surveys. We take customer data to that company. Or if they don't have customers we take the ideal customers and build look-a-likes and then we go in and find that audience. Whether it's geographical or whether it's national or global or whatever.
And then we can devise profiles. I mean, if you sit down with some of these data companies, it's hilarious because it's like we have a thousand data points on every single person if not more. Sometimes 10,000 data points on everybody. We can surmise based on all their purchasing decisions, based on the surveys, online surveys that they took they may not have even realized.
All of those things that you figure out what their values are. You can figure out what drives them. You can figure out if they're willing to spend money or not and you absolutely can find out what platforms they're on.
And so personal data, that's the high-level way of doing it. Typically we, again we discount it, we basically do it for cost to show value to our clients. But that can range anywhere from 3500 to 4900 dollars to undertake. If you don't have that kind of money, then yeah, literally you should go and email current customers and figure out why they love the product.
What is driving them to repurchase the product? You can actually go do man on the street stuff. If you're a business and you're a storefront, walk out and survey people outside. The bottom line is find out what people really think, what they feel, what motivates them, and what drives them.
Because ultimately everybody wants to be heard and listened to. That's the most critical part is to understand that and then deliver your marketing to serve that.
Louis: I've done this type of survey in the past and panel and all. There is definitely an alternative out there where you can poll people that fit the demographic that you want to poll for actually not that expensive. Survey Monkey does it, Survey Money Panel, it's called Survey Monkey Audience.
There's a very good startup recently called Poll Fish that does it as well at a very good price. Anyway, I think if you Google survey panel and whatnot you will find solutions out there to literally survey people who fit your criteria. It could only cost you $200 or $300 depending on if it's a small population. It's actually easier than you think, right?
Phillip: Yeah, and my point is, so many people are scared. They go oh, my God I'd have to spend $200, $300. Or you know in the case of what we do, it's around $3000 to $5000. And I go, wouldn't you rather eliminate as much risk as possible before you go out and spend $5000, $10,000, $20,000? Whatever it is. Why wouldn't you eliminate the risk?
Because there is so much risk in playing the tactics game and it's just not worth it. You can either invest early and make a lot of money and be a lot more sure that you're gonna have success, or you can go guess it, but you're eventually gonna come back to this point.
Every single company that we worked with has come to this point and said we have to do this now because we can't afford to make any more mistakes And we've already wasted $20, $50, $100 and $1000.
Some people are like the example I gave earlier with 1.6 million. I understand that some of the people that you are talking with, that your show, your audiences that are out there, they don't have the money. And my point is, don't waste the money. Your money is valuable. Your business is valuable. Do everything you can to eliminate risk before you go out and market.
Louis: What questions should they ask to really understand the motivations? Because I think everyone really understands and everyone can agree, yes you need to understand what drives them. What their struggles are. Why are they buying from you and whatnot?
Maybe you can share, and I know you're not going to share the entire insight report and all the questions you tend to ask, but maybe you can pick the top three or four questions that are what one must ask to get some-
Phillip: You know, it's funny. The audience insights report that we do for our clients ends up being 45-60 pages long. So you could imagine, you get your money's worth with it because it's such a deep-dive into the customer base.
But really you want to find out, you want to ask questions that are closed-ended. If you ask open-ended questions you don't always get the preferred or the right answer. And what I mean by closed-ended questions is, I'll give you a great example in politics we'd ask it like this:
Do you believe in tax cuts to put money into your pocket or would you rather raise taxes so the government could distribute it to the less fortunate? All of a sudden, they don't have "a none of the above". Right? They have to answer it. We do this in a lot of social issues in politics, so the pro-life, pro-choice, the abortion issue.
We'll say, are you pro-life or are you pro-choice? You can't say I'm really on the fence on that. Because most people are scared to give their opinions. You have to ask closed-ended questions. So you need to figure out for your own business, what are the closed-ended questions that are most valuable to you?
And if you're gonna do Survey Monkey or something like that, that's the most important thing. If you give people options, you tend to not get honest answers. And then you need to ascertain how do they collect their news? What are the three platforms they visit the most? And give them choices.
Don't leave it open-ended. Is it Facebook? Is it Snapchat? Is it TV? Because sometimes every one of our clients is sort of different. We have companies that come to us that are millennial and Gen-Z based. We have companies that are old white dudes is their primary audience or customer base.
Those are two very different customer bases. They make purchasing decisions completely different and the platforms they consume are completely different. So you've got to ascertain who's the ideal market? What do they value? And what platforms are they on? And that would be the quick two-minute idea of that.
Louis: How do you go about picking the answers? Or picking the questions that you needed to ask when it comes to the values, what they believe in, what they don't believe in. Give me an example. You don't have to name the company, but give me an example of a question or a few questions that you actually designed for a company.
Phillip: Yeah, here's a great one. So we did work for a dental company -- they're more like an Invisalign company. Do you know what Invisalign is? Those kind of like clear braces or whatever. And they had offices all over the country, they were really trying to ascertain they had marketed, they hadn't made any money in the last months from their marketing. So, they're trying to figure this out.
They took an audience insight survey, and instead of asking do you want your teeth to be straight, we asked what are your favorite activities? Is it playing video games? Is it going outdoors? We asked all these different activity questions. Well, what we found was that their customer base loves to go outdoors, loves to be out, showing they're active, that they are an active part of society.
They tend to have plastic surgery. And all of a sudden you're able to look at the psychological decisions of this. Right? And by understanding that they active, that they go hiking, that they are canoeing, that they love to go on social media and show their activities and things like that. Right?
Because we find out they're on Instagram. We're like okay, they're active, they are doing all these activities and they're taking pictures of themselves on Instagram. You find out that significance is the driving force in their decision-making process.
How does our marketing take that company, that Invisalign type company, and show the stories of customers that have had success with their product? But that are active, that are significant, and how do we highlight that? In a way that that customer looks and goes, well if I get my teeth straight, I'll feel significant too.
It's not about deceiving them, it's about finding them where they are. Where are they? What are they valuing? Well, they value right now, right now they're valuing significance. They want to be made to feel significant. And the strategy to build the connection with the customer is to highlight the significance of having straight teeth. As crazy as that sounds, it worked. And that's how we found it.
Louis: Give me another example because this one is really interesting. Thanks for sharing. Do you have another example of the type of questions you would ask that led to interesting insights?
Phillip: Yeah, I'm trying to think. We've done hundreds and hundreds of these, so to pick one out. We have a Millennial-based company. And that Millennial-based company, what I mean by this is their customer base is millennials.
For privacy concerns, I just can't talk about the complete industry. But let's just say that the customers are millennials and they're also Gen-Z-ers. And what we found in asking certain questions was that this particular company had done all their marketing on Facebook and they had built the company into I think a three or four million dollar company.
They built it by running on Facebook. But again, they stalled and they didn't know why. And so the other side of this question is where are their consumers spending their time? If you've got the right message and you know what drives them, then how are you delivering that driver your marketing?
So, we found that these customers, maybe ten years ago the millennials, or the gen-z-ers weren't coming up yet, but at the time the millennials were on Facebook. Do you think they're on Facebook now?
Phillip: Nope. They're on Instagram and Snapchat. It doesn't mean that I need to go run to Snapchat and Instagram but it's like that's where they are. That's where they value. If you're gonna promote your company, tell your company story and make connections with your customer -- then you need to be on those platforms highlighting that connection.
Highlighting that story. And they were in the wrong place. They weren't in that and they were trying to expand their business and they couldn't figure out why their expansions hadn't worked. It's because they were marketing in the wrong platforms.
Louis: This is something that we like to talk about in this podcast quite a lot. So, there's this concept in the startup industry. I don't know if you've heard it about like you have 19 or 20 channels to pick from that's the blue collar from a book called Traction, right? And there's like 20 channels to pick from.
You need to test every single one of them to see which one works for you. I call bullshit on that because exactly as you said, depending on the audience you have you don't have to guess and hack your way to finding a channel that works.
Because you will know where people hang out in the first place. You can already say actually, Facebook, not for us. Advertising on TV, not for us. You can already pick and choose the top maybe two or three channels that you know you need to dive into because people hang out there the most.
Phillip: I totally agree.
Louis: You mentioned finding out where they hang out, what they do as well. You also mentioned from the B2C standpoint, from like just people companies that are into just people. Not companies necessarily, you also like to ask where they hang out, what they do the activities, and then you start to- this is where the magic happens in a sense of marketing.
You basically make the connection between- hold on a second, they spend a lot of time on Instagram, they spend a lot of time outdoors. Therefore the link between what we said, which is like braces, clear braces, and how to sell to them is basically the fact that they want to look good whatever they do and all of that.
That's where the magic happens. I'm curious before we dive into the strategy on linking the two together, do you have any other type of questions that you think leads to the biggest insight? You mentioned two already. Do you have another one?
Phillip: Yeah, well I'll give you another example. How about that? The example, because it hit me while I was telling this one. I actually write about this in the book, and the reason that we made the crossover from politics to business was because a friend of mine was totally fascinated by politics. He's a big entrepreneur and he's totally fascinated by politics.
And so he comes to me and he says, "I'm totally enthralled by politics. Do you think the way you market could help my business?" This was about three years ago, and so I said, "Oh that's interesting, we should try that."
And he said, "Okay." He goes, "I've got a problem."
And I said, "What?" He's a huge land developer in Hawaii and he's got this land development company. They build houses and he's like, "We built this entire housing neighborhood in Hawaii and we're struggling to get people to buy these houses. And this is a great economy and there's no reason why they shouldn't."
I said, "Well what did you do with your marketing?" And he said, "Well, the people we were talking to told us to go buy a $50,000 ad in the Wall Street Journal Weekend Edition, Travel Section. And we ran the ad and we got one lead. One."
"Why would you do that? The people that read the travel section of the Wall Street Journal Weekend Edition, 75% of them live on the east coast. They're not buying property in Hawaii. That makes no sense, why would you do that?"
Well, the marketing agency where it worked with made money. They bought $50,000 worth of an ad. They got a commission. Good for them. They made the money. Left this guy holding the bag. So we went in, went into markets on a regional basis, and started asking questions about why they bought homes, why they wanted all these things.
What we found was from the research, we found their customer base was based in three areas. One was in Hawaii. There was a military base a couple of miles from this development. No one had marketed to the fact that these people that were in the military may not want to live on their military base.
So we said, my God, there's a market just down the road. We also went in and found in the research that older couples that live in Arizona and California are looking for second homes in Hawaii. So we said, we should be targeted -- and think about this -- we do this in politics too. We target voters. We started targeting retired couples in Arizona and California that wanted second homes. Primary homes were the military families.
This guy said, "Well look, we're gonna test this." He gave me like 5000 dollars, 7500 bucks. That's it. But that was the strategy. Let's go to where they are. These are the people that want your product. So we ran very creative ads.
All the kind of things that entice people to want to look at houses in Hawaii, and ultimately we drove 743 leads with a budget of... basically they started with a budget of 50 grand and got one lead, and we started with a budget of $7500 and got 750 leads basically.
Phillip: All because of what the research told us. We went to the right place and then we started building the relationship the right way.
Louis: How did you make the connection between this old couples living in those two states and the fact they wanted to buy in Hawaii? You started to talk about the questions you asked and then you didn't say. Then you move onto results. What question did you actually ask to find out?
Phillip: Well, the reason I'm not spending a lot of time on the questions is because we're actually monitoring their purchasing decisions. We're monitoring the way they're researching things on the internet. We're looking at the things that they're buying or the things that they're looking at. We're also monitoring what they've bought in the past.
In addition, they're also answering some survey questions that they don't know. So it just depends. And the reason I started avoiding it because I've done 150 of these and every time the questions are different. Every time. It depends on who the company is. It depends on what their outcome is, and it depends on what we're trying to ascertain.
Sometimes we're trying to figure out what drives and motivates them. Sometimes we're trying to find the geographic market. Sometimes it just depends. Everything depends. And what I'm telling you is the fundamentals, the principles behind this are to try to figure out closed-ended questions.
So people can't ramble or people can't just give something that they're scared of. They have to be backed into a corner to answer a question. And that's one of the ways that you can derive what works and what doesn't.
Louis: Granted, I don't expect you to come up with questions that would fit everyone. But I think by taking a step back and understanding the type of questions on the example of questions, then they'll know what to do.
I'm curious. So you mentioned, that you have a partnership with a data company that basically provides you this data. They provide you data of people who accepted to share their information about the way they purchased, what they purchased, how much they purchased, where they live and all of that, right?
Phillip: Yeah. By the way, I just remembered that one of the questions we asked on that real estate survey, which was do you vacation in the mountains or do you vacation at the beach? That was one of the questions.
Anybody that said the mountains. Well, we knew that for this development that that wasn't gonna be fit, right? Because this was overlooking the ocean. I know we ended up asking more than that but I remember that one in particular. Sorry, I wanted to make sure that I gave value on that as well.
Louis: Sure, it makes sense. So, I was thinking about the purchase data in particular. I think there's a nice principle, not a principle but a system called the RFM, recent frequency monetary value, in retail, in particular.
Which is about the more recently, the more frequently, and the more you buy, the more likely you are to buy again, right? And I think this is a nice way to understand that type of items. I suppose that from this example of the houses in Hawaii, you tried to look at who is the population that tends to buy houses in this type of- in Hawaii in particular.
What do they have in common? Right? Where do they live? How much do they earn? What is their age and all of that?
Phillip: Totally. Yes.
Louis: How do you then pick the right audience? How do you know this is it. Oh shit, we have the audience that we need. Let's go after it.
Phillip: Well, that's where we come in and we help devise the strategy. Now that we know the market, now we want to figure out how to target them effectively. Now we know what makes them want to make purchasing decisions. And so our branding, our conversions, our referrals, our re-purchases, all had a strategy behind them.
It's all to make human connections. That's the lead. I'll give you an example. And this isn't a client, this is a company. There are two companies recently did this to me, and it's brilliant and we've instituted this in a lot of companies now that we work with.
One is the fashion designer named Billy Reid out of New York. And my wife, I gave her a gift card to Billy Reid because she loves his clothing. She bought $1,000 worth of clothes with the gift card. When the clothes came in the mail, there was a handwritten note in the box and it said, "We're so touched that you spent this money on our clothes. If anything doesn't fit, send it back. Anything you ever need. Here's my personal cell phone number, give me a call."
This is like the store manager. My wife read that and said, I will literally buy clothes from them for the rest of my life. They cared enough to write a handwritten note to me. That is a customer for life. Unfortunately for me, she'll spend thousands of dollars on this place in the next few years. That's not that hard. That's one aspect but that's an example of how you build personal relationships.
This happened again recently. I have a very unique diet and one of the things I order is I try to eat very clean and can't eat peanuts, but I can eat pecans. I used to love peanut butter so I'm trying to find an alternative, so now I order pecan butter. And pecan butter, there is a company out of Louisiana called Guidry's Pecan Butter.
Guidry's is organic and it's clean. I've ordered pecan butter from other people before, and this order came in. When the jars of pecan butter came in there was a personal note attached that said, thank you so much for buying our product. My dad says that if you drop some of this pecan butter on vanilla ice cream, you'll buy from us for life you'll love it so much. You should try it.
How cute and creative is that? Like that was personal. It wasn't a formal letter. I mean they took the time to write a note to me so I wrote a blog about it. Then I posted it. They responded and said they've had hundreds of orders based on my one blog about writing about it. That didn't cost anything to anyone.
The hundreds of people that ordered from these people did so because I told a story about how they build a relationship with me. They made a connection with me. No other pecan butter company out there did that. One thank you note. That's it. And by the way, I'm giving you one of the hundreds that we will do as a company for people.
But that's one example of how you make connections. Now, if I'm Guidry's and I'm running a marketing campaign, then I'm constantly gonna run ads on me because I'm a purchaser and I'm a fan. I'm gonna reinforce my brand, my story, and then I'm gonna always remember to tell that brand.
And tell the story of this company to anyone and everyone. I'm gonna become their free salesman. Doesn't cost them a dime from me to be out there being an advocate for them.
That's what I'm trying to get businesses to do and understand. That you're trying to compete in the digital space and platform with 10 million ads right now. No one gives a shit about your goddamn company if they don't know who you are.
If they don't believe in your product and they're not a loyal fan. So, you must build that connection first. If I saw a Guidry Pecan butter ad on my Facebook feed, I'd probably click on it because I like them and I believe in them and I'm a customer for life now.
Louis: Interesting thing about all these examples -- and thanks for sharing them -- it's clear that good marketing starts from one, having a good product, right? I mean you can't just hack your way into selling a lot of stuff for a lot of years with a shitty product. Granted, you have to have good product like your pecan butter example.
But secondly, and this is the most important thing, if you don't understand your audience enough. If you don't have a narrow audience where you can actually, as you mentioned a few times in this podcast. Where you can actually know exactly where they live, the type of stuff they like, the type of stuff they don't like, what they agree on, what they don't agree on.
If you don't have that then you can't do good marketing and you'll always try to employ tactics instead of a good strategy. It feels like a good marketing strategy always starts with customers. Always start with your audience in mind, and in particular a narrow audience that you know very well and a good product that goes with that.
Phillip: You know, I call it the Chick-Fil-A economy. And the Chick-Fil-A economy, are you familiar with the company, Chick-Fil-A?
Phillip: The Chick-Fil-A economy is what it is. Chick-Fil-A focuses on three things. They have a commitment to helping others. They have a total investment into being authentic, which is their product is so good. And they market to emotion and connection. So, the commitment to others is they've given away I think 19 million dollars in the last few years to charity.
That's great. But they close all their stores every Sunday. The reason they do that is to give their staff and their employees the chance for a day of rest and reflection. Now, that doesn't work for every business. Or most food businesses, but that's the commitment they made was to their employees first.
Then the authenticity side. They had the best product of any fast food chain and although they're only open six days a week, they are now one of the top, I think five, fast food chains in the country. In the United States. Think about that. They're not even open seven days a week.
And their product. I mean, here's an example. We had a party recently where we had cheese and charcuterie platters, fruit platters, dessert platters. My wife went out and bought 100 chicken nuggets from Chick-Fil-A and she put them in a bowl. Within one hour of people showing up to that party, it was empty. None of the other food had been touched. That's a great product. That is an authentic product.
Then the last thing is, they market to emotion. One of the things that I talk about in my book is that the best thing that you can ever do to gain the loyalty of your customers is to run a comparative ad strategy or ad campaign. That drives eyeballs. It drives results. It drives transactions.
And in politics, we get this because we run a lot of negative ads on our opponents. I'm not talking about those kind of negative ads, but I am talking about running a comparative ad strategy that offends no one. But absolutely labels your competition as inferior. In their brains it brands it.
Chick-Fil-A for years has run an incredible, funny ad campaign where they make themselves the villain. They show these cows are walking around in front of people and cows are saying eat more chicken, like save our lives, eat more chicken. Right? Chick-Fil-A has made this funny connecting, emotionally connected ad, where they're saving the cow's lives by going to Chick-Fil-A.
They've turned the tables on themselves. No one's offended by it, they've run the campaign for almost 20 years. It's been that effective. I guess I'm telling you all of these things today because how many marketing campaigns will you run? How many? Like that 20 million dollar business that I talked about in the beginning of the podcast, they're now on their second marketing campaign in 10 years.
Chick-Fil-A, the example I just gave, has for over twenty years they've been running the same, different ads the same concept, same strategy. Emotionally connecting to their customers and they've grown it into one of the largest fast food companies in the world.
How many marketing campaigns are you gonna run? How many mistakes do you need to make before you want to run one for 10 years, or 15 years, or even 20 years? And the point is you've got to get it right from the beginning. The thing that I love about your podcast is like you identify all the time the idiotic tactical things that people do and it drives me insane.
What I'm trying to get businesses to do. And by the way, if you're a business owner and you come to me and say I want to hire you and I need you to run some Facebook ads, I literally will say no. Even if you were to hand me a 10 million dollar check. I won't do it, because I'm not in it to be unethical. I'm in it to grow the business first.
And the only way to grow the business is to do your research, understand your customer, and then build a strategy that connects with them in an emotional way. Then using your marketing to reinforce that relationship. That's really the key to the whole thing.
Louis: It is. Thanks for summarizing all that with this final example. I spent 10 months in the U.S. a few years ago as a student and I ate too many, too much Chick-Fil-A, and I miss it. I still dream about it someday. If you are not living in the U.S. or haven't eaten in a Chick-Fil-A before, please do, it's an experience. People are nice and all of that, and all the stuff you mentioned.
One the back of that, what are the top three best resources you would recommend to our listeners today to practice the type of marketing that you mentioned? It could be a podcast, a book, it could be anything.
Phillip: Well, I think if you're gonna get started and you don't have a lot of money. I think there's a book called Profit First that people could read. And basically, it talks about how do you build a successful, sustainable business? Now, I'm talking about in accounting by the way, not marketing. But this one is really good.
The thing about my businesses, I build my businesses to over 20 million. I don't have any debt. I have zero debt. I did it basically on the fundamentals of the book. I recently read the book and now we're gonna implement some of the things in the book. I think it's really important if you want to build a sustainable business, not put yourself in debt, to take a look at that book.
Now the other book that really meant more to me than anything is a book called Driven to Distraction. The book, it's by Ned Hallowell, and it basically talks about how we are less focused on doing good work. And the importance of understanding your brain, how it fires, when it's the most effective, and when it needs rest. And to devise your entire day based on the way your brain, it works the best.
That one little hack has probably, literally, made me millions of dollars, because I stopped doing... My brain in the morning, early in the morning to mid-morning is on fire. I can be analytical, I can study, I can write, I can do all that.
Then I have to take a break, I have lunch, and then I literally for about an hour and a half, I feel like I'm gonna throw up I'm so damn tired. What I ended up doing was instead of doing conference calls in the morning, instead of doing sort of accounting work, which is kind of fun, mindless work for me.
I put those things around the time when I'm tired. When it's gonna boost my energy up. And I block off every single morning to study and learn.
And that's the third thing. There's a concept by a guy named Keith Cunningham who is a mentor to me, and he calls it thinking time. It's basically writing a question that you need answered. Putting down your phone, sitting down in a chair, getting a pen and paper and spending 35 to 40 minutes uninterrupted. Writing an answer to that one question.
What happens in that process is the first 15 minutes, everything that's on the top of your head comes off, all the low hanging fruit. The next fifteen minutes you hit a wall but you can't stop. You must power through. The last 15 minutes of this thinking time, you have explosive ideas that you never thought of.
Even if one of them is acted upon, you could have an incredible idea that takes you to another height and you figured it out yourself. And the pride in knowing that is unbelievable. People don't spend the time thinking, writing, and trying to solve problems anymore.
They want the quick pill that solves all their problems. If I'm to tell you anything, the thinking time process -- which you can go on YouTube and Google "Keith Cunningham thinking time" and find out more about it -- is the most impactful exercise I have ever undertaken in my life.
The greatest referral ideas for my own business have come out of thinking times. Everything that I drive towards when I'm trying to be analytical goes back to my thinking times. And it all derives from that one practice. I think it's incredibly important for people to think like that.
Louis: Great. Morning Pages are a bit similar as well, and I concur with everything you said, it's really valuable. Phillip, thanks so much for taking the time to speak to me today. And answering my challenging questions at times and I'm sorry again for interrupting you, but that's what I do.
Phillip: I love to be challenged. This is all great for me. I want to serve your audience. And listen, I have two things for your audience in case they're interested. They can go to PhillipStutts.com/audit and my company will give them, it takes five minutes to fill it out, my company will give them a free marketing audit.
We'll tell you what your company is doing well, what your company could improve upon, and we'll put together a four-page report. As a special bonus, my team will do a free consultation call on that report if it interests them.
The other one is if they just want to download the three things you should know before you hire or fire a marketing agency, they can go to PhillipStuts.com/offer and that's free as well.
Louis: Awesome. Right, thanks so much for sharing all of that.