Hi. This is
Michael Senoff at Michael
Senoff’s
www.hardtofindseminars.com.
Here’s another recording with
Vanish. The last interview I did
with Vanish was about three
years ago and I had sent out an
email to my list. I got an
overwhelming response to hear
more. So, I contacted Vanish and
he has agreed to talk with me
about what’s going on his life.
We talk about joint ventures. We
talk about marketing. We talk
about business buying. We talk
about angel investing and we
talk about text messaging. This
recording is packed with great
content on joint ventures and
any of the ideas can be used for
your existing business. If
you’ve enjoyed my two recordings
with Vanish before, you’re
certainly to love this one. So,
get ready and let’s go.
Michael: Vanish?
Vanish: Speaking.
Michael: Hey, it’s Michael
Senoff. How are you?
Vanish: Hey, Michael. How are
you doing?
Michael: Good. Are you doing all
right?
Vanish: I’m doing very good. I’m
doing very good. What did you
want to talk about?
Michael: I’ve gotten several
emails from people who’ve heard
the recording. One gentleman, an
English fellow, he just emailed
me, a guy named Peter Jennings.
He says,
“Dear Michael, Let me first
thank you for the many hours of
knowledge I’ve received from
your hardtofindseminars site.
I’ve just been listening to your
interview with Vanish Patel
regarding his joint venture
experience in the UK. Being an
Englishman myself, I thought
that probably his knowledge of
the procedures, legalities and
etc. would be better use to me
then one from the US. Can you
tell me if he does any books or
courses on JVs, which can be
either supplied by him or
yourself? If not, can you tell
me if the course advertised by
yourself on JVs would be one of
use to me here in the UK?”
Now here’s something that always
comes up from people and will it
work for me in the UK? Are we
really different in the UK than
we are in the US? What would you
say to them because I hear this
all the time?
Vanish: I know. It’s funny
actually because I was over in
the States actually a couple
weeks ago for a wedding. It has
been, probably been fifteen
years since I was back in the
States. What actually happened
was I left the university the
early part of the 90s. Straight
after I graduated from
university, I spent three months
working in a convenience store
in Atlantic City. So, I went to
university here in the UK. I got
my degree. After you finish the
degree, I had an opportunity to
actually go visit and work for a
few months in the States. So, I
thought, you know what, I should
go out and see what America has
to offer and see if I could
learn some things and
everything. So, I spent three
months in the States. Just got a
very simple basic job working in
a convenience store and what I
did was, I actually had the
opportunity to work in a
convenience store that was based
in Atlantic City and I
literally, after I finished,
walked down to the Atlantic City
boardwalk. A cousin of mine was
getting married, so I went to
America, into Philadelphia,
whilst I was there just started
meeting people. I spent a whole
week there. I thought, you know
what I’ll do; I’ll do the things
I need to do regarding the
wedding. But, it would be good
to kind of see America again
almost fifteen years older. I
went down to Atlantic City.
Checked out the places and
everything and it was really
funny. For the most part,
nothing had really changed; the
only thing that happened is it
got bigger and brighter. And,
the way the people behaved, it
was almost like, in the fifteen
years, nothing has really
changed. It’s funny because when
you sent that email, I saw the
recording there, I thought, you
know what, let me just listen to
it because we sometimes forget
the basics and everything. So, I
really listened to the original
recording that we did, almost,
is it three years ago?
Michael: Yeah. It’s probably
been about three years Vanish.
It sure is.
Vanish: It’s probably about that
and I’m listening to it and I’m
thinking it’s funny because
principles do not really change
that much. Tactics are always
slightly changing and moving and
adapting in the market.
Everything that I kind of said
in there is what I would do and
the funny thing was, I went to
this wedding whilst visiting
other relations’ houses, and you
sit there and obviously you have
to chat and then their watching
TV and I’m picking up the Yellow
Pages in their sitting rooms,
sifting through, and I was just
saying, “This market’s no
different here. Okay, there are
slight number differences, but
the Yellow Page book in the US
has the same sort of information
and tactics as I see over here
and the one I saw in
Philadelphia is exactly the same
one I saw in New Jersey, which
is exactly the same one that I
saw when I visited someone in
New York City. You know, one of
things I always say to people is
this, “If you can’t make money
in your own back garden, what
makes you think you’re going to
be able to make money a hundred
miles away?”
Geography is not a reason to
turn into success. People have
this mentality of focusing on,
oh okay, let’s try this because
this is going to be easier or
let’s do this and I think
they’ve got it all the way
wrong. You have to know your
personality and what’s going to
work based upon you and then
find the right opportunity,
which complements your skills.
Yes, it’s important to have a
good education and invest in
material, but remember this, you
can learn one system and it may
not work for you.
I have, in all my business
experience, noted very clearly
that within a year, something
that you’re doing either
transpires to be productive and
have a future or it doesn’t
really get anywhere. What only
is propping up that business is
your perseverance and not
looking at the numbers? For
example, with you, with what you
did with the
www.hardtofindseminars.com site,
that became very obvious that it
was going to be a money making
opportunity for you a year down
the road. You had that kind of
good gut feeling because it
didn’t require that much work,
and in fact, what you tend to
find is the best opportunities
are the ones you put the least
effort in. You don’t really push
it. You didn’t have people
ringing you up saying, hey how
are you developing that
business? It just kind of ran as
a side line thing and it kind of
drifted a little bit and you did
a little bit and then you kind
of left it a bit and then one
day comes a point when you say
I’m really going to commit. What
happens if I really focus and I
really put some effort into it?
Michael: That’s right.
Vanish: And, what happens is
this, is when you have a good
idea, your lack of progress
independent of that cannot
prevent it from succeeding. And
by the same token, if you have a
bad idea, all the effort, money,
perseverance you put in, it’s
still going to end up being a
bad idea. You just have to
accept that you’ve got to try a
lot of things to find a few that
are going to work and learn to
know when to say right, this is
not working so let’s move on.
Let’s focus our energies now
onto the next thing.
Businesses and success are all a
number game. We all understand
that you probably need to speak
to 20 people to find one
customer that’s going to buy.
The same is exactly true of
business ideas. What happens is
you can really only try one idea
at a time or, you know, two or
three at a time, so it does
become a “when do you stop to
say there’s no opportunity
here.” So, we understand, for
example, when we’re prospecting,
let’s spend a couple of minutes
with the prospect and qualify
them to see if there is
potential here and we’ll give
them a grade, this is a hot
customer, let’s move with this,
or this is so and so, or this is
a waste of time, don’t need to
continue this further. Now,
we’ll do that because that kind
of analysis period you can
probably do within an hour or
half an hour when you’re in
front of the prospect. But to
say I’m going to spend a year on
something or six months on
something, we can get so caught
up into doing it that now that
we’ve spent six months, we’re
kind of forced to saying we’re
going to make this work if I
spent six months. And one of the
things I’ve learned is walk away
from ideas that don’t work. That
time is usually better spent
focusing on finding the one that
is going to work.
Michael: All right. That makes
sense.
Vanish: You need to be not
looking at the “I’ve spent six
months and it hasn’t worked.”
It’s about, you’ve got to spend
X-amount of time to find that
one because when you find that
one, it’s the least amount of
work, it’s the least amount of
effort, and it’s effortless on
your part and you just wonder
why you just can’t seem to get
on with it earlier. And, that’s
why a lot of people, when they
look at all the things that they
do, they don’t really focus too
much on the act of trying out
ten things. They want to make
one work. And, I’d much prefer
somebody to say I’ve got at
least ten business ideas,
evaluate each idea, do a bit of
research on each of them, and
then get in front of somebody
that can say let’s evaluate
that, does it makes sense. I
mean that’s the bit that it
happens. You need to evaluate
ideas to see if it has some
potential and possibility.
Michael: What would you say
maybe to the Englishman who
thinks that buying patterns are
different for people in the UK
because of the way they were
brought up or they’re brought up
more skeptical or they’re not as
entrepreneurial as the people in
the US? Do you see any of that?
Vanish: Well, I agree in one
aspect and I disagree in
another. First, is this: how you
sell to an American is different
to how you sell to an
Englishman. You have different
language terminology. You have
different expectations. But, the
principles are the same. And
what happens a lot of times is
people will take an American
concept and they won’t customize
it to the local dialect. What’s
most apparent is when you watch
TV shows. A lot of people have
learned about global businesses.
So, if you take something that
is syndicated out, you find that
there are two types of
translations that occur. So, if
you take a TV series like
“Friends” -- huge, very popular
format. They have discovered
that in doing that TV show it
translates without any
customization and without any
change as it is because it’s a
very American style format.
Other people appreciate that
format and the jokes and
everything, they translate well.
But other TV shows, they found
the American version doesn’t
translate and it needs to be
re-shot, UK accent, and some of
the dialogue needs to be changed
to get the message across.
And what happens is, people
simply don’t test. What they do
is they go and find an American
concept and they literally copy
it word for word and they don’t
test, say, what needs to be
changed, what doesn’t need to be
changed. And what you’ve got to
remember is that roughly people
will follow a very typical
buying process. So, for example,
I’ve dealt quite a lot within
the real estate industry, or as
what we call here, in the
property. You don’t talk to
someone in the UK about selling
real estate because that’s not
the language; it’s not the local
word for it. You talk to them
about property. In America, it’s
very common to talk to people
about the note on their house.
We don’t have notes. Notes are
like musical instruments or
writing something down. We have
the word called mortgage. You’ve
got learn to translate a few of
these things, but the principles
don’t change that much. We have
slightly different legal laws
and tax laws, which means you
have to adapt the process, but
do the principles work? Yes,
because people buy from people,
people do business with people.
Michael: Right. People are the
same no matter where you are.
Vanish: Exactly. There is no
difference. I mean one of the
interesting things was when I
was over in the U.S. it was just
so funny because I had studied a
lot of the U.S. marketing stuff.
When I went indoors or talking
with people, I was able to
communicate using their language
because I didn’t have to say
what does that mean because I
saw so much of the American
marketing and language and
everything, but I can translate.
Often when I’m talking with you,
I’ll use the word dollars,
coming again to the American
style as opposed to talking
about pounds because you just
get used to listening, watching
other people in marketing and
they always use the word
dollars. So, you just kind of
pick that up. But when I’m
talking to a very UK oriented
crowd, my language, my
presentation is in a format that
they can understand and get the
message. It’s important you have
to get the message across, and
so you’ve got to learn the
subtle language differences.
In America, it’s very common to
be talking with a stranger and
say hey, let’s do business. They
don’t mind being approached.
They’re very used to people
propositioning and saying hey
I’d like to talk to you about
business. Whereas in the UK, you
have to kind of say where you
are from. You’re going to have
to give yourself in the
hierarchy and get people to know
you a little bit. So, in the UK
you’re going to spend a bit more
time warming people up to build
that trust and credibility. But
these little differences don’t
make that much.
The real question is will you
work the system, and this is
where I see a lot of people,
they go and find something and
then they over customize. They
translate things where they
shouldn’t. We all understand
that there are certain key
phrases and key things you need
to focus on, which make whatever
system you’re following
successful. And it’s funny,
people tend to always want to
customize and change it for
their market because they know
better as opposed to testing.
Try two or three different
interpretations and see which
one works the best. So, for
example, we’ve been doing a lot
of work with Google AdWords, and
notice they’re just language for
different markets and just
certain words will trigger
responses and others don’t even
though you’re describing it in
the same way. Just simple things
like that that people wouldn’t
otherwise really think about.
So, tell me what have you been
up to?
Michael: Since we talked three
years ago, you had asked me what
I’ve been doing and I told you I
was still focusing on developing
my own content, selling the
pre-owned Jay Abraham stuff who
was limited, limited supply and
it wasn’t something that was
going to be around for the long
term. So, I needed to come up
and create and develop my own
products. And, that’s what I’ve
done. I probably have about 12
or 13 products to sell. I’ve
been setting up different
streams of income, different
information products. I could go
through a little list and give
you an idea of some of the stuff
I’m doing. And, so as I’ve
developed these products, my
website has taken on a different
form. Instead of just giving
everything away, yes there’s
about a 125 hours of free
content, but now when I’m
spending time doing interviews
or I’m working on the website,
there’s an ulterior motive. I
mean I want to educate and give
great value, great free content,
but I want to direct and move
them towards a product that I’m
offering or selling. Did you
ever listen to any of the
recordings with Art Hamel?
Vanish: I did. I got to see the
manual and use the recordings.
Art Hamel was a classic one.
It’s funny actually because I
don’t know since about 2001, I
think probably one of the first
times I spoke to you, it’s funny
actually because looking at your
site, it’s amazing how the site
developed and how you developed
and how your list developed. You
can see the transition off how
as you developed, your site
becomes a slightly--you have to
change its model. The number of
customers and people you’re
interacting with, you need to
have a new model. Since about
2001, I’ve always had this
element where I’ve been
investing in the up and fast
growing companies.
Michael: When I listen to that,
I never picked up on that, the
angel investing; when you said
you’re an angel investor. And
when I had talked to you about
that, I didn’t even know what it
was, but since then I have done
interviews with angel investing
organization.
Vanish: And one of those, I
remember you doing with a local
UK person.
Michael: Yeah, did you know that
guy?
Vanish: Yeah, yeah, Lawrence. I
talk quite regularly with him.
Michael: Are you a member of his
angel investing thing?
Vanish: Yeah. I mean I have lots
and lots of contacts.
Michael: Lawrence. What was his
last name?
Vanish: I think it is Gilbert.
Michael: Lawrence Gilbert,
that’s right. That was a great
recording.
Vanish: Yeah, and he had a very
fair assumption of how business
angels are and they’re a quirky
bunch of people and very into
business, but they’re not
necessarily into seeking lots of
attention and everything.
Michael: No, it’s a great idea.
It’s a great investment, too, if
you know how to spot
opportunities. Just give an
explanation of what angel
investing is, just in a
nutshell.
Vanish: We all know that you go
into the stock market and say in
the U.S. there are probably
about 2,000 to 3,000 stocks
there. The size of those
companies that come onto the
stock market are fairly mature,
say something like Microsoft who
are doing billions and billions
of dollars or someone like IBM.
The opportunity for that
business to double next year is
pretty rare. Now, when you can
get involved in companies the
early the stage, the faster they
tend to grow and the more profit
you’ll make by being involved in
that. For somebody that got
involved with Microsoft way back
in the early 80s is retired on
some Caribbean island right now
because once you’re in, you can
just ride the train forever how
long it’s going to go.
Remember I told you I left the
university in the early 90s.
Well, for most of the 90s, I
spent my day time working in big
city corporations and in the
night time, I would spend two to
three hours a day, everyday,
researching the stock market,
researching businesses and just
finding the right kind of
companies that have got the fast
growing ability. If you can find
a company that’s growing fast,
its stock price is going to go
up, its value is going to go up.
Michael: Were you successful
doing that? Did you find some?
Vanish: Yeah. I was reasonably
successful. Funny enough, the
stock markets all peaked about
2000 and I’ve been doing this
for seven, eight years doing it.
And I just decided in 2000 that
I was going to kind of quit
investing in the stock market
and just take time out and rest.
So, I sort of cashed in, in
2000, which was right at the top
and then the market kind died
and that was pure dumb luck;
just the fact that I felt I
wanted to take six months out
and just not focus on investing
and just kind of recharge my
batteries a bit. And that was
good timing on my part, but it
was pure dumb luck.
And so, what I decided to do, I
thought it was important to
develop a bit of the real estate
side of my business because you
need to have something that’s a
bit long-term that you can hand
over that’s easier to manage.
Investing in the stock market
you do need to keep your eye on
the ball and everything. And I
thought I should really develop
that side of the business. So, I
got involved with a few projects
in that. And the one thing I did
was when I’d been doing all this
investigating what I found was
companies that were just coming
onto the stock market. Those
were the ones that were fast
growing and I thought, you know
what, I need to see and see if I
can get in on these companies
two or three years before they
come on the stock market and
really make a killing. And so,
what I found was I focused on
the angel investing, which is
funding unquoted companies,
companies that are not listing.
So, what happens is this,
obviously a company will go
through this whole phase. A
bunch of guys will set up a
business and say hey let’s get
together and let’s do business.
And they’ll start going out and
they’ll start getting business
and everything. And what they’ll
do is they’ll approach their
friends or family and say hey do
you want to invest in this
business. We think we can do
this, this, and this. Once the
business gets going, it moves
into this next sector, which is
the business angel, which is the
professional investor who will
say I’ll invest in this business
and help it grow to a point
where we can then get the
institutional investor, which is
where the stock market gets in
so you get the funds and putting
money in.
Michael: Right.
Vanish: So, for example, I’ll
give you an example. I invested
some money in 2001 in a
business.
Michael: Can you describe what
it was?
Vanish: It was an online
advertising business. You know
when you go to Google and you
type in a word; if you type in
the word “business card” you get
a whole bunch of advertisers on
the right hand side. It’s
probably someone typing in
“business card” is probably
interested in printing some
business cards. You can pay
Google to have your website
listed against the search
results that go there.
Now, this company does something
similar to take, but it does it
in a slightly different way.
Obviously, you type in “business
card” or whatever, you might be
interested in knowing about the
dynamics of business cards or
you might, for example, type in
anti-virus software. You’re not
quite ready necessarily to buy
anti-virus software; you want to
kind of research it. So, what
happens is Google will give you
all these sites that have got
articles on anti-virus. So, what
happens is, is you click on that
and you end up getting what we
call to a destination site, an
end site where you start
reading. So, for example,
www.hardtofindseminars.com is an
end destination that people
eventually get there and they
start reading this stuff. What
you generally tend to find is
the topic of what people are
reading, you can get an idea of
what’s the most relevant to
advertise for them. So, for
example, Google has a solution
for destination site called
AdSense. What happens is, is
they scan the page, look at the
words on the page and get an
idea or feel for what that page
is about and then they put
little ads on that relate to
this kind of same ads that you
would see when you’re typing
something in the search engine.
They do effectively the same
sort of technology. The only
difference they do is that
whereas AdSense tends to create
banners with the ads, this
actually creates it within the
text that you’re reading. So,
what it does, it will take the
page and it will highlight three
words, which are the most
relevant from an advertisers
perspective. And if you put the
mouse over them, a little window
appears and a little bit of the
ad appears. You could be reading
an article on anti-virus and the
fact that there is a word like
Trojan Program. Someone maybe
bidding for that word Trojan
Program, so underline it and
highlight it in the text so
you’ve got potential ad words
and you can just click straight
onto that if you want to find
out information for it. If you
want to continue reading, the
only difference will be one or
two of the words are
highlighted.
Michael: Are they highlighted
like in yellow or a hyperlink?
Vanish: They’re highlighted in
green actually and they’re
underlined and they’re
hyper-linked.
Michael: This company that you
invested in as an angel
investor, they had developed the
software, the whole company that
does this?
Vanish: Correct. In 2001, there
were five people in the company.
Michael: Were they out of the
UK?
Vanish: In the UK.
Michael: How long have they been
in business?
Vanish: One year. They formed in
2000 and in 2001 is when I met
them and that’s when I invested.
Michael: How did you find out
about them?
Vanish: Through my contacts. As
I said, I have lots of contacts,
accounts, and other people in
the business world and they send
me pretty much on a daily basis,
I get about one business plan a
day. When I read them, I look
for the ones I’m particularly
interested in and some I’ll just
read. I won’t get beyond the
third page and…
Michael: These people are
actually seeking capital.
Vanish: Correct. So, what they
did was they sent me a copy of
the business plan. I met with
them. They presented it two or
three times. I grilled them with
a whole bunch of questions. Then
I made my decision as to whether
I felt that this was going to be
something that was going to go
forward. So, in 2001, their
business was turning over about
$20,000 or about 10,000 pounds a
month and there were five people
in the business. We had a
shareholder meeting actually
just a couple of weeks ago. So,
now this is in 2006, so summer
of 2006, which is roughly five
years. There’s roughly now 100
people in the business and it’s
doing about $2 million a month,
which is about 1 million pound a
month. Here’s the bit. It’s
still growing 100% per annum.
Michael: Did they need multiple
investors or are you a major
investor?
Vanish: We had a multiple. We
have a syndicate of about 15
people and we collectively put
in about a half a million pounds
to get it going.
Michael: So, if you invested
about $150,000 you own shares in
the company?
Vanish: Correct. In proportion
to what you invested. Here’s the
thing. This business has grown
one hundred fold in five years
and it’s still growing. To be
honest, I have very little
involvement in that business
now.
Michael: You don’t do anything
now.
Vanish: I’m just a shareholder
and my holdings will double in
value because the turnover is
going to double. I’m just
sitting and waiting for the day
it floats.
Michael: What do you mean when
it floats?
Vanish: I mean when it goes
public.
Michael: When it goes to the
major institutional stock.
Vanish: Correct.
Michael: On the U.S. and world
markets, right?
Vanish: That’s right. Obviously,
there has to be a certain size
of company for it to be worth
people wanting to invest. So,
for example, Google has followed
that same path. Google has gone
in seven years from a zero
company to $2 billion in sales
and he’s worth $80 billion.
Michael: $80 million?
Vanish: $80 billion.
Michael: Google is worth $80
billion?
Vanish: Yes. Do you know a
company called Time Warner?
Michael: Sure.
Vanish: How long have they been
around?
Michael: They’ve been around
forever.
Vanish: Google is worth more
than Time Warner. Now, imagine
you had the opportunity to get
involved in Google four or five
years ago.
Michael: Oh, man.
Vanish: It doesn’t matter how
much of it you bought. If you
just bought a tiny, tiny bit,
you’d be retiring to the Cayman
Islands. Having said that, I had
plenty of failures. In fact,
half of my investments have gone
bad.
Michael: Tell me about a couple
of failures and what mistakes
you made and what would you do
different if you had to redo it
again?
Vanish: Well, I’ll give you one
that’s kind of similar because
this is where I think you pick
out the key elements. I invested
in a guy who was doing a free
distribution real estate
directory. So, basically what he
was doing, you have your local
papers, don’t you and in there
there’s always a real estate
section, a property section. And
what he was aiming to do was to
demonstrate a free distribution
real estate property directory,
but to focus on making it color
and distribute it around. The
idea being that he was going to
approach local estate agents to
buy advertising and break even
on the distributing of that
magazine from the money that was
generated from the estate agent
and then really create it by
selling space to people looking
at selling furniture, home
improvements; that sort of
thing. It’s a very standard
model. People want to be looking
at buying houses, so that easy
and you get the estate agents
and you get plenty of estate
agents and they’re always
looking at advertising. Then
what you do is then say the
price, if you’re going to be a
kitchen manufacturer or a
builder or a trader, it’s three
times as much. But because you
pay for the distribution and the
printing from the estate agent,
any money that you get from the
advertiser for a kitchen is all
potential pure profit.
Michael: So, what happened?
Vanish: The issue was this, the
lone entrepreneur. And this is
one of the things I’ve learned
in my element is…
Michael: Had he done anything or
just an idea?
Vanish: No, no. He had a couple
of issues printed. He
distributed them. He was great
at getting the estate agents
onboard. Knew what to say. He
knew the process. Had not only
him selling, but had a team of
people selling. Knew kind of
where he was going in that way.
Michael: How much money did he
need?
Vanish: I invested $25,000.
Michael: Were there other
investors or just you?
Vanish: No, there was just me at
that point.
Michael: All right. What did you
negotiate? You invest $25,000.
What did you ask for?
Vanish: I asked for a percentage
of his business.
Michael: Can you tell me the
specifics?
Vanish: Sure. It was roughly
about 10% of his business.
Michael: All right, for $25,000.
Ten percent of the business, so
would that be like stock?
Vanish: Yes.
Michael: When you met him, was
he incorporated?
Vanish: He had not been
incorporated and was doing okay.
So, we negotiated to take a
percentage of the company based
upon his projections and kind of
negotiated around sort of 10%.
There was a few options on if it
did as well, then we would get
maybe a bit more or a bit less
on how the company performed.
Michael: All right. Go ahead.
Vanish: But in principle what
happened was that when you’re
dealing with a team of people, a
team would always achieve more
than an individual. And when
you’re investing in an
individual, it’s a bit emotional
up and down. And so, what
happened was there wasn’t really
his ability to build a team to
make the business scale. So, one
of the things I know from when I
met my other group back in 2001
was there was five people in the
business, but they had
complimentary skills and I knew
that these people were the kind
of people that could run an
organization with 100 people in
it. Looking back, I knew that
this chap would never be able to
run an organization with 100
people and sometimes we’re just
interested in kind of investing
to kind of go two-three fold.
Michael: The lesson would be
when you’re looking at your
investment you’ve got to look at
who is behind the investment.
You’re really investing in a
person.
Vanish: Exactly. And what you’ve
got to look at and say has this
business got the potential to go
a hundred fold. What we know in
marketing is we’re going to
really not get very far if we do
one-time sales. If you’ve got a
thousand names on your list and
you know that you’ve got one
product for $100 and 10% of
those people buy, then there’s
not much return on your effort
because it’s going to cost you a
fixed amount to get those
customers. If you’ve got higher
value products and a backend,
the profit that you make makes a
huge difference because the
marketing cost in marketing
those backend products is
minimal. It’s almost literally
just like getting a whole bunch
of cash.
Michael: And you saw that. If he
could get real estate agents and
advertisers onboard and their
advertising was paying out, that
was continual revenue.
Vanish: Absolutely. Now, what I
learned was he could do it in
one area, but he couldn’t build
a team that would cover the
whole of the UK. So, there’s
often a good idea, but then the
ability to take it and manage
the team--lone entrepreneurs are
lone entrepreneurs for a reason.
There’s a personality issue that
can occur and I didn’t think
that that was such a big
significant thing when I was
investing because you think the
idea, is the idea good. And you
can have a sound idea, but
you’ve got to have the right
people to implement it and scale
it up and deal with all the
issues that happen. When you’re
getting so persnickety that
you’re involved in all the
day-to-day processes, how far
can your business go?
Michael: You’ve got to have a
team.
Vanish: And you’ve got to be
able to negotiate and deal with
people and get what they want,
not just what you want. That’s
why a lot of people don’t have
businesses that will ever scale
because they’ve just not got the
personality to share and grow a
bigger business. You know it’s
lessons learned and I have a
much better idea of the things
to focus on. And it’s only by
sometimes failing do you realize
what’s important and what’s not
important.
Michael: No, absolutely. All
right. Do you want to do another
failure because you can learn a
lot from these?
Vanish: Some of the other
failures that I’ve had have not
been involved necessarily like a
lone investor. What I found is,
and this is a very typical
thing, is it just doesn’t scale.
Michael: What do you mean scale
because that’s a UK term? It
doesn’t grow?
Vanish: Yes. And here’s an
example. You’ve got a business
where you test the model, the
people are there, and they try
to grow the business. And what
they discover is when they grow
the business the market is just
not there. A classic example,
one of the things I say is,
here’s a model. You’ve gone to
like a pizza restaurant or a
pizza take away. Typical ways
that pizza restaurants and pizza
take away generate business is
they go door to door putting out
leaflets about their menu and
often what happens is we see
business modeled in this way.
People say well this is what we
demonstrate and this is how it
will sell. So, we put out 1,000
leaflets and we get 10 phone
calls for orders or 20 phone
calls. So, if you doubled the
number of leaflets, what would
you expect to happen?
Michael: You’d expect it to
double.
Vanish: And if you did 10 times
the number of leaflets, what
would you expect?
Michael: Ten times, but it
doesn’t work that way.
Vanish: Right. The reason being
is because there are other
factors being played and the
thing about leafleting is it
doesn’t scale because there’s
only such a certain distance
people will go for a pizza. And
so, what happens is the market
size is not the UK housing
population. It’s about 15
minutes from the pizza joint.
Does that make sense?
Michael: Yes, perfect sense.
Vanish: And a lot of times we
invest in businesses where they
say what we’ve done is put out a
thousand leaflets and we got
this result and what we need is
we need money to put out 10,000,
50,000 and if we put out 50,000,
we’ll get X. And as the business
grows it suddenly hits this
bottleneck and it’s only then do
you realize that the customer is
not willing to go beyond X or
you can only reach so far. It’s
a bit like your business. It’s a
finite number of people because
there’s only so much traffic you
can get and there’s only so much
people that are really genuinely
interested in your material.
Michael: That’s true.
Vanish: Your limiting factor is
not the number of people that
necessarily come to the website,
but the time that you can
allocate to doing the marketing
to get more and more people. So,
we hit these natural limiters.
You could say well I get 1,000
visitors a day if I do this and
what happens is the limiting
factor is not getting 10,000
visitors.
Michael: Yes, it’s my time and
effort in getting them to the
site.
Vanish: Because what happens is
you reach a bottleneck based
upon the fact that you get all
these people to the site, now
you’ve got to spend all your
time dealing with customer
service, which means that you
can’t spend time getting more
visitors.
Michael: That’s right.
Vanish: This is why when I look
at a lot of businesses, we talk
about scalability, how far can
it scale truly.
Michael: You’re talking about
growth.
Vanish: What happens is even if
you’re like a consulting type
business, there are only so many
hours in a day and there’s only
so much per hour you can charge.
When you look at people, you
can’t just keep adding zeroes
and doubling the advertising
spend. If you double the
advertising spend, you’ve got to
find double the market of
opportunities to go and go
through. And so, a lot of times
what I look for is I look for
businesses where there’s
reasonable research that it can
go one hundred fold and that the
management team have the
capability of doing it. So, I’m
not investing in a local Mom and
Pop store because that doesn’t
really have the capability of
getting listed on the stock
market.
Michael: So, when you look for
these opportunities are a lot of
the opportunities come along
where they’re shared investments
of the company needs $1 million
and they may get 10 people with
$100,000 to go in on it?
Vanish: Exactly. It’s very rare
nowadays that you can really
take on a big business and have
one investor. And investors
prefer to share out because what
happens is you may be able to
finance one company, but you’re
putting all your eggs in one
basket and it’s better to say
here’s what I’m going to do. I’m
going to put my money in ten
businesses, knowing half are
going to fail and half are going
to do something. But I’m working
on the basis that one in ten of
those is really going to fly
because I don’t have to put a
lot in with a flyer. You didn’t
have to put a lot of money into
Google if you got in at the
right time…
Michael: That’s true.
Vanish: If it’s going to fly,
it’s really going to fly.
Michael: When you invest in
these businesses, I guess in
some business like with the
advertising guy, you invested
your money, was that something
you wanted to put your expertise
and time into?
Vanish: I only like to invest
where I can bring something more
than just the money. I can bring
my expertise. I can bring my
connections. I can bring my
contacts, etc. Again, I invest
in what I know. I market
products that I know and
understand and I work with
markets I know and understand
their behavior.
Michael: All right, very good.
Vanish: You shouldn’t risk in
just saying oh, that’s a nice
sounding thing. I think that
will go well.
Michael: So, if someone wanted
to look into investing in
businesses, what would you tell
them? Where would you direct
them to look for opportunities?
Where could they find business
opportunities like angel
investing?
Vanish: I think the best place
to go is generally speak to like
your local accountants and
listers because they’re the
people that are dealing with
other business owners. There are
professional places on the
Internet. If you just type angel
investor or business angel,
there’s lots of clubs that
business angels hang around.
Again, no one investor is going
to fund a company. If I put an
ad in the paper saying private
investor has money to invest, I
would just get all the
crackpots. So, what tends to
happen is we congregate through
a business club and people
approach that business club with
their idea and they’re screened.
And the ones that qualify for
having some level of sense are
then presented. But typically
what will happen is in an
afternoon, six companies may
present. You get a bit of
variety, which then incentifies
me to come down and spend the
afternoon looking at different
businesses because I know out of
six I’ll probably find one or
two that are interesting to
investigate.
So, what happens is, you join
the club. The club does a lot of
the prescreening. It does a lot
of the marketing. Find
opportunities. It does the kind
of first level filter and it
picks the best six to standup
and present or to be circulated
around members. And then the
members are free to go and
contact those people. It’s a bit
like how you have your telephone
number on your website and you
may have an answering service
that kind of filters out a bit
of the calls finding the few
people that you really want to
have a conversation with and
that are committed and made some
sense. So, what I do is I have
my contacts and I’m a member of
a number of clubs and people get
to know me and through word of
mouth and basic marketing and
everything, we get proposal to
come through. I’m very good
assessing them now having read
over 1,000 business plans in
five years.
Michael: What kind of business
plan really gets your attention
and what kind of business plan
bores you where you won’t get
through the first two pages?
Vanish: Well, the first one is
just the ones that are too long.
I think if someone has written a
50-page business plan, they’re
not an entrepreneur in the
business sense. They’re just
somebody that’s got far too much
time on their hands. The thing
is it’s very simple. It’s the
ones that tell an interesting
story. You’ve got to have how we
got to where we are, what we’re
doing now, what we intend to do;
the ones that can have a logical
conversation going through.
Michael: Very much like a sales
letter.
Vanish: It’s a sales letter.
Michael: I mean if someone
presented you a business plan in
the form of a sales letter, the
standard copy-written, good hard
hitting sales letter that would
do just as well wouldn’t it?
Vanish: Absolutely. In fact,
when you’re doing a two-page,
what we call an executive
summary, what happens is you’ve
got a business plan that might
be somewhere in the range of
15-20 pages, that sort of level.
It could be up to 30 pages. I
don’t read the whole business
plan. What generally tends to
happen is there’s a two-page
exec summary. In that you have
to sell the time commitment to
somebody to read the business
plan or at least read bits of
it.
Michael: It’s a sales letter for
the business plan basically.
Vanish: Exactly. And you’ve got
to demonstrate where you have
credibility, what you’ve done so
far, what the future potential
is, the relevancy of management;
all the same sort of things that
you would do in a good sales
letter--testimonials, a
guarantee, milestones achieved,
that sort of thing. And what
tends to happen a lot of times,
businesses fall into two
categories. Those that
absolutely need money to go
forward and those that would
grow faster with money.
Michael: Desperate and
non-desperate.
Vanish: Exactly. And what I call
it is the difference between
those that want to borrow money
and ones that have an investment
opportunity.
Michael: So, you want to stay
away from the ones who are
desperate?
Vanish: Yeah. What happens is
this. If they absolutely need
money, then you are the
customer. They’re trying things
out. Now, there’s always a bit
of a chicken and an egg. How
does the business kind of get
started unless they’re going to
write a piece of software? So,
it needs to write a software
before it can go to customers
and sell it. And so, a lot of
people write a business plan, we
need half a million dollars to
write this piece of software and
then when we sell it, we can go
to these customers here and
we’ll get X. And do you know
what I tell people? I say go and
sell something to those people
to demonstrate to me that they
will buy from you within a
similar context of what the
software is. For example,
typically most software solves
some form of problem. So, what
they do is they can create a
training course on that problem
and sell some advice and see if
they’ll buy. And if they won’t
buy the training program, the
one-day seminar, and you can’t
sell ten tickets to a one-day
seminar, what’s it tell me about
your ability to sell a
complicated product like a piece
of software?
Michael: Yeah, the market’s not
there.
Vanish: Either you’re not able
or the market is just not there.
So, what happens a lot of times
is people haven’t really thought
through their business process.
They’ve just used the crutch or
what if I have a lot of money,
I’d really be out there to get
there. Look at your website.
You’ve got too much into it, did
you? You didn’t actually really
even develop a product. Though
over time, the customers have
fed back to you and said oh we
want this, have you got this,
have you got that? You were very
aware right from the beginning
that you needed to have some of
your own products and have
something a bit unique as a
proposition. And you take it at
the right pace to go forward.
Now, if I had given you a whole
bunch of money, you would have
just got lazy.
Michael: Yeah, that’s true.
Vanish: Because you wouldn’t
have thought, okay, let me do
research. You would have said,
okay, right, we really need to
make the website look slick, we
really need to have this, and
you’re not looking at saying how
can I take that money and use it
to improve the process and make
more money. Now, for example,
when you were doing your pay per
clicks and doing all of those
things, there was a benefit to
using capital to get a sale at
the end. But now, you’ve got
enough in knowing how to do the
communication, but you’re what
we call kind of classically
self-funded. Sales have enabled
you to develop your business
through internal cash flow.
Michael: Yes, that’s true.
Vanish: And so, the reason that
you don’t necessarily make a
great investment is because
there’s no exit because you are
the business. Which is fine. I
am my own business. I don’t make
a great investment because as
soon as you get rid of me, what
is there? There’s not that much.
Big scalable businesses--if Bill
Gates didn’t turn up to work,
the business would still
continue. That’s the kind of
business that you want to
have--a point where the CEO and
the major founders don’t play a
significant role or they could
be easily replaced. These guys
that started this business a
couple of years ago, they’re
still working in the business.
They want to get it to
floatation. But when it floats,
they know it will IPO. They’ll
hang on for another year or two,
just part of their contract, to
make sure the business is still
continuing in the right
direction and then they’ll be
free to go off and do whatever
they want to do.
Michael: That’ll be great.
Vanish: I’ve managed to get
involved in that and I’ve not
had to spend a day doing
anything for them and it still
grows at 100%.
Michael: That’s great. That’s
exciting.
Vanish: It’s still early days,
but it should make about $1
million.
Michael: Do you mean your
investment?
Vanish: Yeah, which is not bad
really is it?
Michael: No, not at all.
Vanish: It pays for all the
failures. I get to keep all of
that, but it’s a good use of
time.
Michael: It is, very good. Real
good leverage. You’re investing
in someone else’s idea and time.
Vanish: In the whole business, I
have never spent more than
probably 50 hours.
Michael: Okay, good. Are you
still working with the mortgage
leads?
Vanish: That one got bought out
a while ago. The person that I
was doing that with continues to
just provide some advice and we
kind of exited that business
because we had a few legal
changes within the UK. You have
in the U.S. the do not call
list, don’t you, the
telemarketing?
Michael: Yeah.
Vanish: We have similar issues
and laws being applied here in
the UK.
Michael: Tell me what was
happening.
Vanish: The whole principle of
cold calling people at home. You
have this big thing don’t you
that…
Michael: Yeah, there’s a do not
call list. You can’t be
telemarketing residential homes.
Vanish: Similar laws being
applied here in the UK. A few
years ago it was okay. People
could ring as long as they rang
after 9:00 a.m. but before 9:00
p.m.
Michael: These were leads of
people filling out a form saying
they’d like to request more
information.
Vanish: What I’m saying is that
a lot of leads are not generated
off the Internet.
Michael: Oh, I see.
Vanish: A lot are generated
through telemarketing and
through newspaper advertising.
So, the amount of leads that
actually generate off the
Internet and overall is
relatively a small market. But
what happened was there was a
few laws being applied that
prevented companies from using
the telephone as means to
generate leads. It just became
more work. So, what I did was it
meant the leads that were
generated over the Internet
suddenly became more valuable
and the businesses that were
generating leads over the
Internet became more valuable to
people who had a high reliance
on the telephone. And so, it
just got swallowed up because
people went and said okay you
can do stuff over the Internet,
boom, boom, boom. Rather than
buy one or two leads, we’ll buy
all the leads that your business
is going to generate over the
next three or four years.
Michael: Oh, I see.
Vanish: So, you just buy the
company out.
Michael: And that’s what
happened.
Vanish: Yeah. And so, what
happened was where we used to do
this model of distributing it to
different mortgage brokers…
Michael: Didn’t work.
Vanish: Oh, it worked.
Michael: It works, but it got
bought out.
Vanish: Yeah, because what
happened, somebody said I’ll buy
all your leads for all the
things you generate, which is
the typical way that happens.
It’s like buying your customer
base or buying your business.
Once you’ve got, for example, a
restaurant of a certain size and
you’ve got X-number of customers
coming in and you’ve got your
advertising process in place,
you know all the right places to
do and you’ve got people working
and everything, it’s relatively
easy for someone to come in and
say I’ll just take it over. It’s
been de-risked. It’s been
established. It’s been proven.
Michael: Right. So, you’re not
doing that anymore. Tell me what
else are you doing? You’re
investing in real estate with
Deep?
Vanish: Actually I’m doing a
fair number of things in the
real estate. I run, in the UK,
probably the largest club for
people who are interested in
networking with other property
investors.
Michael: Does Deep have his own
club or is this your club?
Vanish: My club. Deep has his
club and he runs his--a course.
But what I do is I do actually
live events. So, what I have is
meetings held in locations
around the UK, so we have
London, Birmingham, Manchester,
Edinburgh, Glasgow, Ipswich
where you can meet local
property investors. So, every
month in London, I meet up with
100 like-minded property
investors. So, it would be like,
for example, you running
www.hardtofindseminars.com and
saying hey I’m going to be in
this area, would you like to
meet up with me? And you will
have lots of people on your list
actually say hey I’ve heard of
Michael Senoff. I’ve seen his
email. I’d like to meet him. So,
a lot of people take Deep’s
course online and everything,
but he’d like to have the
opportunity to meet his
readership and he comes to my
event. He’s already organizing
it. He just turns up and there’s
a whole bunch of people who are
interested in property.
Michael: Very good. What kind of
presentations do you put on?
Vanish: We just put like a
social get together.
Michael: You’re not selling
anything there?
Vanish: No. What we find is that
you don’t really need to sell
anything.
Michael: But you just provide an
environment for deals to go
down.
Vanish: Exactly. The key element
is that if you’re the watering
hole where people hang out,
they’ll eventually become your
partner. You know and I know if
you run a successful bar in town
and all the business people hang
around there, what’s the bar
owner going to end up doing? So,
what happens is I run a club and
I meet people and I say hi and
introduce them. They have a chin
wag. Occasionally people in
between meetings will say hey
there’s this deal here. I sit
down and we chat.
Michael: Do you charge people to
be in the club?
Vanish: Yeah, we charge a
nominal fee. Ten dollars if you
just want to come to one event
or $50 for the year.
Michael: Okay, very good.
Vanish: We’re not looking at
making a money-spinner. It’s
just an environment that people
can meet. One of the things I
find is that it’s good to meet
other people in the endeavor
that you wish to become
successful in.
Michael: Sure.
Vanish: All this time that you
spend into getting successful
people in business, the
marketing, has had a profound
affect on you. You would not
have gotten as successful as you
are if you hadn’t interacted,
met some people, have an
interview a few times.
Michael: That’s right.
Vanish: Yeah, because there’s a
lot of stuff that you learn from
doing this interaction.
Michael: Oh, absolutely.
Vanish: They’re an interesting
lot. We’ve been knowing each
other for what, about five years
now.
Michael: Yeah, that’s right.
Vanish: We’ve yet to actually,
physical meet.
Michael: That’s right.
Vanish: But there will come a
day.
Michael: Sure there will.
Vanish: I mean I’ve referred
hundreds of people to your site.
Michael: I appreciate that.
Vanish: There’s plenty of
business that you’ll get that
way. In fact, the interesting
thing is that you can build
these relationships and then one
day timing will dictate that
there’s an opportunity that you
can do together.
Michael: Sure.
Vanish: Right, because once
you’ve built that friendship and
you can build that trust and
credibility, it’s just a waiting
game for who’s going to do
business with you today.
Michael: That’s exactly right. I
mean we’re talking now because I
had the recording on a CD. I
re-edited it and you heard it
and you called me. And it’s
exactly right.
Vanish: Exactly. For example, I
run my club. I have enough
people contacting me that I’ve
got my diary full. For example,
I don’t get so many emails from
you nowadays because I know
you’ve got to the point where
you’ve got a big enough list,
enough things are happening. We
don’t necessarily even have the
time to follow our own
principles that we teach
Michael: Yeah, that’s true.
Vanish: You’re busy. I mean
you’re diary is full. You’ve got
all the customers handling.
What’s the point in sending out
emails saying hey let’s do more
business.
Michael: That’s exactly right.
Vanish: You just say, okay, it’s
a bit of a quiet month. Let’s
send out an email. Let’s create
some activity. For me, I’ve got
to the point where my pipeline
for the next year is full and I
see from records I know how many
people come to our events, what
that translates into
opportunities and deals. In
fact, I have slowed down my
marketing because it got to a
point where we’ve got enough
people coming that I don’t need
to do any more marketing to
generate more business. There’s
only so much business I can
personally handle.
Michael: So, where are you
focusing most of your time?
Doing deals? Buying properties?
Vanish: I’m just doing deals. I
don’t look at whether it’s a
property deal or a business deal
or Internet deal. I don’t really
get too hung up on that. What I
find is that I keep my toe in
two or three markets so that
each of them has their own
little path. If your heart is
set in real estate, there is a
cycle. There are some months
when it doesn’t work and you’re
kind of up and down all over. I
really do three types of things.
I do property. I do online
property, if you like, the
Internet. And I do conventional
normal business. Those three
keep me very busy because I
don’t really have to worry about
which one is more. If the
Internet seems to be going
hi-ho, then that’s where I spend
my time. If real estate kind of
goes quiet for two or three
years, no biggie. Like yourself,
you’ve got lots of different
products, haven’t you?
Michael: Yes.
Vanish: And each of them has
their own little cycle. Some
kind of get very busy and then
they kind of fizzle out and you
kind of leave it for a bit and
then you kind of pick it up
again. So, the way I look at it
is I have my different markets
and I let the volume of activity
of those markets and profit
drive my time allocation. Too
many people kind of get a bit
one-legged. I never one hundred
percent do real estate, but I
kind of increase or decrease the
time depending on where I feel
the profit opportunity is now.
So, for example, at the moment
I’m seeing a lot more stronger
profit opportunity on the
Internet. That is just not
slowing down.
Michael: Anything specific
that’s exciting?
Vanish: I think what’s
interesting, for example, like
your website you’ve been doing.
I’ve noticed that you’ve been
doing a lot of replication of
your content. I really think for
you that’s an untapped market in
creating sites which you could
run, manage, or operate because
at the moment your sites are
quite static, aren’t they.
Michael: Yes.
Vanish: What I found is there’s
an area that we’re looking at,
which I can’t necessarily go
into because it’s confidential,
but I’ll give you the essence of
what we do. Going back to our
Yellow Pages, what you will
generally tend to find is that a
lot of these businesses, if you
take any Yellow Page section,
what I recommend you do is go
and look at every single website
for the businesses that are
advertised in a section. What do
you think you’ll find?
Michael: Static sites like their
Yellow Page ads.
Vanish: Yeah, brochure-ware.
Basically it’s an uploaded.
Nothing happen. We are so and
so, blah, blah, blah. It sits
out there on the Internet. It
really doesn’t do anything. And
where I’ve seen the real profit
is where people start
integrating their website and
their Internet presence into
their business and creating a
marketing machine. Just like you
do with
www.hardtofindseminars.com. You
have people come visit. There’s
an opt-in page. You do the
audio. You give them some bonus
offer. You have an autoresponder.
To those in marketing, these are
really basic things, aren’t
they?
Michael: Yes.
Vanish: You go to the offline,
go to the Yellow Pages and pick
any
section--landscaping/gardener--and
look at their website. The
reason they have a website,
because everybody else has a
website. What they’ve done is
they’ve gone to a friend or
family and said can you build us
a site. What I found, what we’re
doing at the moment, and it’s
still early stages but I
definitely have done the
research and know that it has
the profit potential, is
providing customized websites
that are market generators and
lead generators.
So, you take an industry and you
actually create almost like a
cookie-cutter website with a
little bit of customization. You
write an autoresponder series
educating your buyers on the
particular topic, but in a very
generic element. You have
physical products that they can
buy, so information products.
The site can take the order, but
the business doesn’t have to do
the fulfillment or it can choose
to do the fulfillment and use
that as a way of introducing
itself. So, what you do is you
approach someone, say for
example like a landscaper, and
you create a free report, the
ten best ways of looking after
your lawn and then what you do
is give them a physical ad or
flyer they can hand out and
distribute driving people to the
website and the free report.
Catch a name and email address,
educate them, use the full
multimedia experience. We even,
in fact, use teleclasses. But
none of this is operated by the
owner of the business. So, for
example, we can do a teleclass
on things that you need to know
about how to improve the lawn
care and what we do is we have
the system send out an email to
all the subscribers on all the
different websites inviting them
to dial-in on a conference call
to hear an expert talk about the
pros and cons. The email going
out has the name and address of
the individual owner of that
site who is operating that
business. Not very complicated
things, is it?
Michael: No, not at all.
Vanish: When you go to an owner
and say hey we can tell you
these ten people who registered
for next week’s teleseminar and
here’s their name, phone number,
and they’ve just said they
wanted to go the free
teleseminar on how to improve
the lawn care. It’s held next
Thursday, dah, dah, dah. If on
the Friday you got a phone call
from the owner saying hey did
you enjoy the teleseminar, what
would you think?
Michael: That would be great.
Vanish: We kind of do these
things where we orchestrate
marketing to warm the list up
and then just create
appointments for the people
running the site to contact
them. Now, the difference is
this. It’s what you would
typically do for one small
business owner. You might do
that for a restaurant. You might
do that for a doctor, dentist,
or a plumber. The difference is
this. When you can do it for an
industry, you only really have
to write it once and you can
sell it many times.
Michael: I’ve got a client for
my consulting business, the HMA
System. I’m taking the client
through the system, which
consists of seven different
steps and he’s allowed me to
document and record everything.
So, the first step was
developing the USP. So, I’ve got
all the conversations with him
recorded. I called his
customers. I talked to his
employees. I talked to the
competition; all that recorded.
It’s integrating the USP into
his existing marketing. I have
that whole concept recorded, so
I’m only doing it once. He’s a
tanning bed operator. I’m going
to have an entire system that’s
duplicated that I could sell to
anyone who has a retail tanning
bed store that would help them
grow their business.
Vanish: The classic example with
the tanning because I’ve done
one or two things with the
tanning industry. It’s a hyper
buying business. Once people try
out a tan, the fixed number of
times they come in a year for
X-number of minutes, the number
of tanning people that actual
capture name, email address,
mobile phone, and address of
their clients are very, very
few. The numbers are actually to
do, for example, postcard
marketing…
Michael: Is almost nil.
Vanish: The other thing that
they don’t do is they don’t do
customer segmentation.
Michael: What we did is I had
the guy put another phone line
in. He only had one phone line.
All his calls were forwarded to
a service that I have which
records all the calls. So, he
let his employees know that the
calls were going to be monitored
for quality assurance. Each call
was recorded and analyzed his
calls for about a week and a
half, two weeks. So, I could
download the recording of the
call. I put an hours worth of
calls together of the girls
handling the calls. There were
three receptionists. I am
telling you 99% of all those
calls were lost. They were
trying to sell packages on the
phone. They weren’t capturing a
name. They were letting everyone
go without capturing a name and
a number. So, then I had
Richard--he’s the expert in my
HMA System--so we analyzed each
one of the calls showing the
lost opportunity. Then we
corrected the problem. We
created a script for the girls
and then they were getting names
and numbers and booking
appointments probably 80 to 90%
of the time. Then you look at
all the calls that came in. I
analyzed that one little step,
which was probably going to be
worth $60,000 to $70,000 to that
tanning bed operator.
Vanish: It’s funny actually
because when I sit down with
that site owner, what I focus on
is when someone comes to the
website, what do you do to get
them to opt-in? And opting in,
for example, in the offline
business is name, phone number,
address, or some form of contact
information. Not necessarily
email because a lot of the
people in the tanning market may
not be a very higher user of the
Internet. But everybody will
have a phone number or cell
number and they’ll have an
address. The key is not to focus
on trying to sell them things.
Focus on them. Put them on the
database and then second to have
a systemized mechanism of
following up with these people
continuously because once you’ve
got a consistent method of
capturing people--so, for
example, one of the things is,
you probably had flyers or…
Michael: He’s got brochures,
yes.
Vanish: Well, in those things he
should be focusing on people to
go on to a different number,
which is the new prospect number
just to capture the details.
Michael: Yeah, that’s a good
idea.
Vanish: For example, one of the
things that you do with the
tanning thing is you give out
flyers, free tan or something
like that, and you have an 800
number, which again the script
that you’ve tested in the office
you can then outsource to
somebody else to do one hundred
percent. And then what happens
is you don’t book the
appointments because it’s not
that important necessarily. Once
you’ve got the contact, you know
that they give you those three
or four answers and the
appointment making isn’t really
that relevant because you’ve got
all the contact information.
You’ve got the script working.
You then say to the people
capture contact details, even if
you, like for example, we’ve
done this where we’ve said okay
what day would you like;
Thursday, six o’clock. Okay,
great. It’s booked. No matter
what they say, it’s booked. Then
what happens is that detail is
emailed electronically to the
receptionist. The receptionist
looks. Oh yes, we can do that
time. Slot it in. Or we can’t do
that time because it conflicts.
Ring him up and just say hi,
we’re sorry but we’ve had a bit
of a double booking. Do you mind
if we change? We can do this day
and that day.
Michael: What we’re doing is we
get them on the phone. They’re
calling. They’re shopping price.
We tell them we don’t discuss
pricing over the phone. So, we
eliminate all that pricing
confusion with the customers. We
don’t offer pricing over the
phone, but if you’re a first
time visitor, we have a special
offer. We tell them three
reasons why we’re different and
then we say you can come in for
three tans and there’s no
obligation. You can do three
tans and you can name your own
price. Now, he would sell three
tans for $9.99, but by doing
name your price, totally
different. They do a double
take. They go what name your own
price? So, it gives the
receptionist the chance to
explain we just want to make
sure you’re happy. Come on in.
You do three tans and no
obligation. Most people are
honest and they’re going to pay
more than that $9.99 for three
tans.
Vanish: That’s a classic open
door, risk free.
Michael: We say the offer is
good for next two days only. And
we get them in.
Vanish: You force an action and
a decision time to get them to
come in. And what you find is
typically the people are going
to buy or take the action within
a certain time window, three
days or whatever. Make the offer
a time that is attractive to the
buyer and to the seller and what
have you lost. You’ve lost
nothing. You’ve captured the
name and you catch them on the
next one. Building a database of
names of people that have
responded to your marketing ads
or just phone in is so critical
because if someone has called,
that is money.
Michael: That’s right.
Vanish: And you develop a simple
script and if the script get the
contact details for only 50%,
that’s fine. All you’ve then got
to focus on is saying let’s get
the phone to ring twice.
Michael: Now, I’ve got this
service I was telling you about.
Once the calls are put into this
service, it has an automatic
feature where it will pick up
the caller ID number, even on
calls that don’t have caller ID
or have caller ID blocking and
it will research and pull out
the mailing address of that call
all automatically.
Vanish: Grand.
Michael: Is that awesome?
Vanish: That is fantastic.
Michael: All automatically. So,
you have all the calls logged
and recorded. Another great
thing about that is you can give
the receptionist instant
feedback. So, if I’m monitoring
the calls and I hear her forget
to ask for a name and number, I
can call her back instantly and
let her know that she forgot the
name and number. So, it’s a
great training tool and to be
able to collect automatically
the names and addresses of the
numbers. And then there’s some
great technology, you probably
know about it, which is the
voice broadcasting.
Vanish: We’re looking at doing
some that here in the UK. I’m
just testing that.
Michael: It’s all over the
Internet. Multiple companies
have it. It’s so easy.
Vanish: I’ve spoken to a few
companies in the States and I’m
very familiar of how it works in
the States. Here in the UK it
requires a little bit more.
Technology wise, we’re a little
bit behind when it comes to
those things. But we do that a
little bit. We also do a lot of
text messaging. We find text
messaging works great. So, a
classic thing that you have with
the appointments, in the morning
text everybody.
Michael: It’s something I don’t
know about, text messaging. So,
how would you text message an
entire list? Do you do it
through a phone or can you do it
from an online source?
Vanish: For example, I did my
event. On the day of the event,
everybody gets a text message.
Michael: Do they all have to
have the same version mobile
cell phones?
Vanish: No. Actually I have one
that is a mobile provider that
will let me text numbers
anywhere in the world.
Michael: It will text message
anyone who has a phone?
Vanish: Anyone that’s got a cell
phone in most of the countries.
Michael: And this is an online
company?
Vanish: Yes.
Michael: What are they called?
Vanish: I’ll tell you the name
of the website that you can go
to. It’s called
www.clickatell.com. This is the
service that I use. It’s based
in South Africa. They’re a very
good organization. I’ve been
using them for over a year. I
found them to be quite reliable.
Michael: What do they charge?
Vanish: Basically the way it
works, they’ve got a whole
pricing. I’ll tell you what it
cost in the UK. It roughly costs
me about 5 pence or 10-cents to
send an SMS. In different
countries it will be different.
Michael: Are cell phone
providers getting spammed with
text messaging now?
Vanish: No because it costs more
and what happens is the person
sending it has to pay for it.
Text messaging is a funny thing.
It’s a lousy prospecting tool
because you’ve only got
something like 160 characters
with which to communicate. So,
there’s not really much you can
say. And what you can do is it’s
a much better communication tool
with clients that already know
you. So, two things that I do is
on the day of an event, I just
text everybody saying see you at
six o’clock tonight, regards,
Vanish. Now, when you send out
the message, you can put your
mobile number or answer number
so they can respond back. And
what I find is people are highly
responsive in communicating
through text. So, I normally get
a whole bunch of people that say
can’t make it. They text back
and say sorry I can’t make it.
Michael: Do they type it in or
call you back by pressing the
return call?
Vanish: Half and half.
Michael: So, they can call you
live where they get your voice
mail or you pick up?
Vanish: Exactly. On the day of
the event, what we do is we have
a phone that is allocated for
any problems. What we found is
that by sending them a message
saying hey you’ve got an
appointment later on tonight or
whenever, it kind of jogs their
memory and if something happens
where they’re going to cancel,
they don’t have to be scrambling
around thinking okay where’s the
number. They remember the text
is on the phone.
Michael: Okay, great.
Vanish: So, one of the things is
when you’re confirming an
appointment, it’s a great way of
sending out the text on the
phone because you’ll find people
who are going cancel on you are
more likely just to ring up and
be polite because it’s all there
to action. And so, you’ve got
the ability to reschedule an
appointment so you’re not losing
the sale necessarily because you
can just talk to them and say oh
okay you’re working late or
whatever. You know it’s on the
cell phone because you can have
one that’s just the appointment
line. So, you know people pick
that up and it’s relatively
cheap. For example, when we do
conference calls, people forget.
They’re not always by their
email. We send them a message a
few hours before the conference
call is going to start. You
can’t always guarantee that
people read their email a few
hours before a conference call
starts.
Michael: That’s true.
Vanish: For example, with your
tanning busi |