This program is brought to you by the ThePodcastFactory.com.
Having a list gives you some control over and above what the normal day to day is. And if
you have a relationship with the list, and not just a list, then you have influence. That is very powerful.
Hi, my name is Igor Kheifets and this is the List Building Lifestyle, the only podcast which
delivers cutting edge conversion strategies from the online trenches straight to your earbuds.
Download the transcript of today’s episode and all future episodes at listbuildinglifestyleshow.com. I also invite you to grab a free copy
of “The Wealthy List Builder’s Survival Guide” at listbuildinglifestyleshow.com/survival
and now once again it’s time to claim your List Building Lifestyle.
Igor: Welcome back to another edition of the list building lifestyle with your host, Igor
Kheifets. Today, my guest is the author of 80/20 Sales and Marketing, Perry
Marshall. Perry, how you doing?
Perry: I'm doing great. It's great to be in List Building Lifestyle. I love the name of your
show because I don't know how many people have a lifestyle, because they have a
list. But it's a lot. [laughter] A list is a really important thing. So you're in the zone
of the important stuff here.
Igor: Oh yeah, absolutely. That's pretty much the only thing it worked for me. I mean I
tried blogging and then all sorts of different kind of methods, and list building
was the only thing that really kind of clicked. It's funny because I remember
watching the sales video by Ryan Dice, and he was in the sales video. He was
talking about how he gave his friend gifted him with like golf clubs or something
that cost 2700 bucks and he paid for those golf clubs with just one blast to his list.
I can clearly see that picture in my mind. That was the moment I said, "Damn it. I
got to have a list. I want to be able to send an e-mail and just make a bunch of
money." You know what I mean?
Perry: Yeah. Look, a lists in addition to whatever normal thing happens in your business.
Like if you have a yogurt shop. Okay? Then yeah. There's that foot traffic and you
have people coming in and out all the time, but having a list gives you some
control over and above what the normal day to day is. If you have a relationship
with the lists, and not just a list, then you have influence and that is very
Igor: Well yeah, and authority. I mean, that's the one thing you have a lot of in the
marketplace today, and that is authority. That's one of the main topics in your
book as well, that the 80/20 Sales and Marketing and this is pretty much where I
want to take this conversation, to just to get started. Do you mind walking us
through the principle, the 80/20 principle? How does that work? Where does that
come from and how did you find out about it?
Perry: Yeah, so I was on an airplane just the other day, and I had these two interesting
people on either side of me. The guy on my left was a sales manager and the lady
on my right was a writing teacher. Now the sales manager on my left, 80/20 came
up in the conversation and the sales manager had actually read Richard Koch's
original book, The 80/20 Principle, and the lady on my right have never heard of
it, even though she's clearly very bright woman. Of course, she wasn't a business
person either. I explained, I said, "80% of the writing comes from 20% of your
writing students." Because she taught expository writing I think. I started
explaining, "80% of the traffic runs on 20% of the roads in your town, and not
only that, 80% of the 80% of the traffic runs on the 20% of the 20%." The guy's
like, "Oh, yeah." Hopefully most marketers and business people, knock on wood,
have heard of the 80/20 principle, but I know that most people really don't get it. I
know this because I talk to people every day, but most people, they're actually
like me. I remember when I was a sales manager back when I had the Dilbert
cube job. Somebody was talking about the 80/20 principle and I had printed out a
sales report in quick books, I literally took my calculator and I just went down he
started adding them up. "I'll be darned. That's true. 80% of our businesses is
coming from 20% of these customers." The next thought I had was, "You know,
that guy Dimitri who calls me like about once a month that chews up all this time,
he doesn't buy very much stuff from me. He gets more than his fair share of my
time. I should probably just stop selling stuff to him." But I didn't stop selling
stuff to him. I didn't really think about it anymore. 80/20 at that time was just a
rear-view mirror confirmation of something that we already know is true, which is
that some customers are bigger than others. That's really all I thought it was, but
it's not just that, it's so much more than that. So here's what happened. So a few
years later Ken McCarthy, who has a really good track record of recommending
great books, lots. Everybody's telling you to read a book, right? Igor?
Igor: Oh, yeah. My Kindle is exploding. I got like ten books at reading right now, a
hundred more that's on the list and there we day there's you know someone telling
me about a great book. I just had, you know, we're just recording earlier today,
and my producer Jonathan was like, "Dude, you had this employee
problem. There's a great book and I want to give it to you." I'm thinking,
"Awesome, that's a good scrate, I'm really grateful but damn it, when am I going
to read it? I don't have the time."
Perry: Oh, yeah. It gets to where unless you hear three or four people tell you that a book
is really awesome, you'll probably never actually read it, even if you do buy it, or
it is on your Kindle. I don't know, someday I'll be sitting around with nothing to
do, and maybe... Anyway, Ken had a great track record, and he said, "Oh, you go
to read the 80/20 Principle by Richard Koch" So I picked it up and I read it. I got
to page 14, and Richard just mentioned something. It was almost a throwaway
remark. It just sent me down this whole rabbit trail. My mind set on fire, and
when he said, and I'm not sure everybody's going to relate to this but I'll slow
down explain it so you can kind of get it. He said, "80/20 is closely related to
chaos in fractals and complex systems." I was like, "Oh!"
Igor: Yeah, you lost me at that point.
Perry: Let me. I really need to stop and tell you this. So here's where it is. So if you ask
me, "How long is the coastline of California?" and I say 1500 miles or 1000
miles, whatever it is as the crow flies, that would be inaccurate answer, but there's
actually not anyone answered that question. If you drove your car all the way up
the coast, instead of being a 1000 miles, it might be 1500 or 2000, because it
winds all around. If you want the coastline, it'll probably be 4000 miles. If a dog
walked a coastline even tighter. It might be 8000 miles. If a bacteria walks, it
would be like a million miles. Do you understand what I'm saying?
Igor: No, not really, to be honest.
Perry: Okay, because it's curvy, it's wiggly.
Igor: Right, right, right.
Perry: So, the edge of that coast, there's the little peninsula and then there's a little inlet.
We can get down to literally the rocks where the wave come to that the tide goes
up, and the tide goes down, and it changes. So there isn't anyone answered to the
how long is the coast of California. This is actually a huge truth about how people
spend money. Okay? Or here's another example. You have the side of the
mountain and it's full of snow, and somebody claps his hands, kind of like you did
just before we started, to give the signal to your sound guy. Somebody could clap
their hands and there could be an avalanche. Because that one tiny
trigger destabilized something. That is an 80/20 moment when that avalanche
suddenly crashes down and goes rolling down the mountain. Or this guy named
Ed Warrens was trying to model weather on the computer about 50 years ago, and
it was really going good, and he's like, "Okay, I got the humidity and the
temperature. Look, I got this hurricane. Wow, this is amazing. We're going to
have really accurate weather forecast." Then the next day he comes in and he
changes the tiniest little thing at the beginning of the simulation, and six months
later, the weather's completely different than it was just like one tiny decimal
place. That's called 'The Butterfly Effect', and the Butterfly Effect says that a
butterfly's wings could cause a hurricane six months from now, somewhere,
maybe. It's so sensitive to the beginning that you don't even know. Now, this is a
huge secret to finding efficiency in sales because in sales and marketing you can
actually find the butterfly wings if you know where to look. Okay? This is so
powerful. My goal with people that I talk to and interview is, if I can get a person
to see 80/20 everywhere they look, then I succeeded. Because it is literally
everywhere around. So here's what 80/20 says. 80/20 says that most cause and
effect is not proportional so customers are not equal, customer service complaints
are not equal, product defects are not equal, days of the week are not equal, tables
in your restaurant are not equal, all these things, 20% of the effort produces 80%
of the results, and then the other 80% of the effort only produces 20% of the
results. If you look at it intelligently, you can start to see the patterns and you can
see where there's huge leverage. Now what Richard said, when Richard said what
he said, I suddenly knew, "Hey, wait a minute. That means there's 80/20 inside
every 80/20. So if you look at the tree in your front yard, it's got branchy pattern,
but then I can zoom in and I can look at a branch, I can zoom in and look at
twigs, I can zoom in and look at leaves, I can zoom in and look at the veins of the
leaves, I can zoom in and look at that the veins in the veins of the leaves. It's
branching, branching, branching, branching. Okay? 80/20 is like that, too. Oh my
goodness, so that means, that means if 20% of my effort produces 80% of my
income, that means 20% of 20% of my effort produces 80% of 80%. So that
means 4% of what you do is 64% your income. In fact, 1% of what you do
produces is 50% of your income. So that means that how much money you made
last year, half of it came from three days of something you did.
Igor: This is mind blowing.
Perry: It is. Half of your income came from three days of last year. Now, people in
salary walls never see this. If you're a straight commissioner, you're an
entrepreneur, you live by your wits you like. Oh yeah, I had one conversation
with that one guy and it opened up that door, and them it go to this whole new
thing. It was like shooting fish in a barrel. I had this other project, I spent four
months on it, we got nowhere.
Igor: It's funny, it's like exactly what happened last year for me. We were doing okay,
then something happened, we're stuck. One tweak, bam, we doubled. Then for a
month nothing happens, then again one tweak, bam, we double again. So it is
incredible. You're absolutely correct.
Perry: And that's that avalanche in fact. Right? Most mountains, like, "Hey, make this
snow go down the mountain." I mean, you can get a shovel. You can walk all over
the place. You would accomplish nothing. Right? But if you go to the right
mountain that's sitting in just the right set of conditions, you just threw a little
stick a dynamite and the whole thing comes down. That's what you're trying to do
in sales. So I want to tell you a fun story. So one of my colleagues, John
Paulman [00:14:19], he dropped out of high school when he was 17 in Denver,
and he hitchhiked to Las Vegas and he became a professional gambler. By the
way, his mother was lighting candles for him, like every morning at mass. I mean
can you imagine your kid doing this?
Igor: I hope Erica doesn't do it when she grows up. I mean I hope that she markets, or
at least the she goes and saves lives or something. [laughter]
Perry: Living on the edge! Right? He'd write all these gambling books and he was
fascinated with it, so off he goes. So after a few months of these, he's like, "Man,
this is harder than I thought." He meets this guy in a gambling book store, with all
these gambling books. They strike up a conversation. Turns out this guy's a
professional gambler that lived there for years. He's got all these other kind of
shady businesses on the side. This sounds like a really great adventure for John,
and he's like, "Hey, could you teach me how to do this?" He's like, "Well, for
percentage of your winnings, yeah I could do that." So they shake on it. Then he
goes, "Jump in the Jeep, John, we're going for a ride. Okay?" So they jump in the
Jeep. They're going down the road. John says, "Okay, how do I win more poker
games?" The guy goes, "You have to find marks. Marks are people who are going
to lose. You don't go out and find other professional gamblers. You find some guy
who just got here Wichita, Kansas with his grandmother's inheritance money and
you play poker with him." He goes, "Well, how do I find marks?" He goes, "Here,
I'll show you." They pull into a parking lot of a strip club. They go into the strip
club. There's women, there's rock n' roll, there's people drinking, it's loud and it's
crazy. Rob sits down with John at one of the tables. He pulls a sawed off shotgun
out of his jacket, and he opens the chamber and then he closes it real fast under
the table. It goes ch-ch. It's called racking the shotgun. He makes these noise. All
these kind of biker dudes turn around like, "Hey, what's that?" Meanwhile
everybody else's drinking and women and everything. The club owner comes and
he says, "Hey, what's going on over here?" Rob goes, "Everything's just fine, just
teaching a lad a lesson, don't worry about us." Then he says to John, "John, did
you see those dudes who turned around when they heard that noise? In the middle
of this noisy club." He goes, "Yeah?" He goes, "Don't play poker with them,
because they're not marks. You play with everybody else." Now, everything you
do in list building is racking the shotgun. So somebody sent an email, some
people opened it, some people didn't. Rack the shotgun. There was a Google ad,
some people searched and some people didn't. Rack the shotgun. Some people
clicked on the ads, some people didn't. Rack the shotgun. Some people filled in
the form on the website, some people didn't. Rack the shotgun. Some people got
on the webinar and some people didn't. Rack the shotgun. Some people bought
things, some people didn't. Rack the shotgun. Some people took the upsell also,
others didn't. Rack the shotgun. On and on it goes. Okay? Everything is racking
the shotgun. Their shotguns getting racked all the time, everywhere you go. So
let's stick a dynamite on the side of a mountain and cause an avalanche. That's a
rack the shotgun. Okay? Everything is racking the shotgun. And the question is,
are you paying attention? Now, here's the other thing. People think that list
building and selling and marketing are a convincing people process, and they're
not. Selling, marketing and list building is an elimination process. It's a
disqualification process. Who should not be on this list? Who should I not sell to?
Who does not qualify? That's what you start with because 80/20 says, "Eighty
percent of the people that you're looking at are probably worthless for whatever
you're trying to do, and 80% of those people are only marginal." And that leaves
you with 4%. And probably the 4% you can really get somewhere with, and guess
what? Twenty percent of the 4% are the ones that you really want, which means
you look at some big group of people, like you're at a trade show and there's all
these people walking around probably only one to five percent are actually
the people that you want. So if you understand this, first of all, if you permission
not to spend the rest of your life being a pushy sales-person. You don't have to do
this anymore. Your job is to rack the shotgun and see who looks around and who
doesn't. In the club example, John's job was to eliminate the non-marks so that the
marks were left. Now, he could've had some other deal in mind, like maybe they
want to go into the desert and shoot skeet or something. Well, in that case you
take the people who did turn their heads. You see what I'm saying? So sometimes
you're eliminating or sometimes you're choosing, but whatever it is you're going
to have group A, group B. And this goes on and on, all the time, all the time. And
if you see this for what it is your life just becomes infinitely easier.
Igor: Wow, this is such a different approach to the way most people preach list building
and sales and marketing. They always talk about, "Go for your ideal client. Know
your ideal client and go for that person. Go where they hang out." And you're
saying, "No, no, no, no. You don't do that. You actually do the opposite. You just
eliminate the people who don't fit the description." Is that right?
Perry: Well, certainly. I mean, if you know exactly where the ideal people are, then
great. But even when you get to where the ideal people are it's almost certain that
80% of them are still not for you, right? And so if you go into every situation
going, "Who do I eliminate?" it completely changes your posture of everything
you're doing. So let me give you a couple of examples. So I have a website
isfbforme.com, Is FB For Me? It stands for "Is Facebook For Me?" And it
probably, everybody could go there right now and answer 10 questions that will
take you 30 seconds, maybe 60. You answer 10 questions and it'll tell you on a
point scale of 1 to 10 how appropriate is Facebook for my business. In fact, in the
80/20 book I explained if it gives you a score of 10, then Facebook's your number
one medium. If it gives you a 9, then Facebook's probably your number two
medium. If it gives you a three, it probably means it's like the seventh. It's kind of
like that. Well, why did we do this? Well, when our Facebook book, because I
wrote a book with Tom Meloche and Keith Krance called Ultimate Guide to
Facebook Advertising. When that book first came out Facebook was not nearly as
hot as it is now for advertisers. In fact, it was kind of a dog. It was like, "This is a
really interesting little toy and some people can make this work, but most people
can't." and when the book came out, we didn't want a bunch of people writing one
star reviews on Amazon going, "These guys promised me the moon, and this
sucks." And so we made this quiz. The job of the quiz was to eliminate everybody
that wasn't a fit. We said, "If you don't score at least a seven, then Facebook is not
a high priority for you, and if you don't score at least the five then don't even read
this book. Well, it worked. We got really great reviews for the book and I felt it
was necessary. Look, Facebook is really great for like 15% of all these people.
Now, what's happened in the meanwhile is now Facebook is really hot and it's
working great and it works for lots of people, but the quiz still applies. In fact, we
just modified the quiz and we changed the criteria a little bit, and the quiz still
tells you. But the whole idea of the quiz was to push most people away. Now,
here's what happens when you push most people away, if you come up to
somebody in person and you say, "I probably can't help you, and I can ask you
three or four questions and find out for sure. Do you mind if I just..." Most people
say, "Okay, fine." And they'll answer three or four questions. Well, if they see you
doing that, and you're pushing most people away, then the one time out of three or
one time out of five, and you say, "Oh, we should definitely talk." Everybody can
see the credibility behind that. You have much more authority, much more power
to attract the people who are a fit. So you can see us do that at Is Facebook For
Me, isfbforme.com, you can also see us do that with Google AdWords,
isawforme.com. And the AdWords one, it actually ranks people on, "Is Google
Search Ads for you?", "Is Google Display Network Ads for you?" and "How
competitive is AdWords in your industry and in your situation?" Like do you need
to get a ninth degree black-belt in AdWords, or would a yellow belt be good
enough? So I do this. Here's what I would, Igor, what I would really like your
readers to do, as forward as it sounds. So I know there's tons of books out there,
and I know everybody's got like 47 books in their Kindle that they didn't even
read, and all of that. I want you to read 80/20 Sales and Marketing. It's a fun
book, it's easy to read, it will completely change the way you see the world. Like,
I never looked out the window the same. After I understood 80/20, I never looked
at a spreadsheet or a Google campaign or a mailing list so this totally applies to
building lists. I want you to read the book because if you spend a couple of hours
in your life and you immerse yourself in this idea, it will get locked into your
brain and you will suddenly see 80/20's everywhere. You will see shotguns
racking everywhere. Most people are blind, most people are invisible. They can't
see it, they don't hear it. But you do. You see all of these shotguns racking all
around you, and you go, "Well, there's a buying signal. There's a buying signal.
There's a buying signal." When you get into lists... You know a list is a dynamic,
throbbing, living thing. Okay, so first of all, for whatever your offer is, there's an
80/20, there's an 80/20 squared, there's an 80/20 cube. There's a top 20%, there's a
top 4%, there's a top 1%, there's a top 0.1%. That's the first thing. Secondly, if you
change the criteria that whole list changes. You have a list and these people will
gravitate towards offer A, but these other people will gravitate towards offer B.
You might find that, "Hey, inside my list, my one list, I actually have 10 lists
here." or "I have a 100 list here, I can rack the shotgun and I can pull out these
sub-lists of people and the deeper and longer your relationship with those people,
the more you can do that. You can start to do some really clever alchemy with
email, and of course, other forms of communication. It's just incredibly powerful.
This is the real power of list. It's not just having a list, it's segmenting the list.
Igor: Wow. This is... I've been kind of quiet. Usually, I interrupt my guests all the time,
and with you I'm just sitting here taking notes and taking notes. To be honest, I
knew of the 80/20 rule from a while ago. It really helped me in my business, but I
only picked up the book recently when I decided to interview you and actually,
when I worked up the courage to do so, because obviously now, you've
been following you around forever. So I believe it is a quite an easy book to read.
I sort of blew through the first three chapters, I think, within like 20 minutes.
Very, very easy to read. Lots of pictures, lots of stories. Pictures and mental
pictures, not as in... Like "rack the shotgun". You can clearly see it happening.
Igor: So guys I really recommend you pick up a copy at perrymarshall.com because
you can get it for a penny over there, just pay shipping and handling. The 80/20
rule will forever transform the way you do business, the way you build a list, the
way you drive traffic. Perry, before we end the episode I just want to confess, I
am totally stealing the idea and I'm creating Is solo ads right for me. Just to be
Perry: It is a great way to regenerate. I mean, so take this away. You could... So Is Solo
Ads For Me, go to Is FB For Me or isawforme.com, steal the ideas, steal the
format. It's a really great way to sell. I got an interesting comment, one of the first
Amazon reviews of 80/20 Sales and Marketing, there's more than 300 now, but
one of the very first ones, the guy said, "So who should read this? Well, anybody
who works for a living." Why is that? Well, because 80/20 applies to lists and
traffic and all that. In a Google campaign, they can spend two hours going
through a Google account, showing you all the 80/20's that show up. That's the
ads, the key words, most of the key words are 95/5, by the way. But it also applies
to your time, your time management, your employees, your staff to market
research. There's so many shortcuts, and if you go through life going, instead of
not what can I do or what should I do, if you start everyday with, "What shouldn't
I do? What should I stop?" Some of us really need that because, I mean, I’ve got a
great work ethic and I got all these ideas and I'm a doer and those are great
characteristics. In fact, all those characteristics are maybe the number one thing
that will get a person past the $100,000 a year of income. But if you want to get
into a million dollars a year, you have to flip that upside down. If you're making a
million dollars a year, your first question is, "What am I not doing today? What
skill am I not developing? What idea am I not chasing?" I think you can make a
$100,000 a year just chasing every opportunity that comes your way. But if you
really want to make the big bucks, you're going to turn that upside down.
Igor: Wow. I knew this episode was going to be freaking awesome, but I did not expect
it to be this good. So guys, 80/20 Sales and Marketing by Perry Marshal. Get it at
perrymarshall.com, if you want to get it for a penny, plus shipping and handling,
or you can go on Amazon.com, get it on Kindle like I did. Either way get the
book, apply it everywhere, your business, list building, traffic, relationships. I
mean, it applies to absolutely every fricking thing in your life. Perry, truly
honored and really happy that you found the time to sit down with me
and rap about this stuff. Any last piece of advice for our List Builders?
Perry: Well, in the book we've got some really nice bonuses that... So you buy the book
and you crack it open and there's a website access that you get. One of the things
you'll get with the book is a personal lesson in how I groom my email list. I've got
people now who have been on my email lists for 15 years. If you can believe it. I
mean, that's a long time. They still read my emails. In fact, a frequent thing that I
hear when I meet people in person is, they'll say to me, "I've been on
every guru’s list. You and one or two other guys are the only ones left. I
eliminated everybody else." Well, I really take good care of my email list. What
you'll see when you subscribe to the book bonuses is the art, I call it the maze. I
call it building the maze and it's we build our email system to respond to what
people respond to and to not send them what they don't respond to. So it's
naturally, organically goes in the direction where people want to go. We train
people to addictively read our emails. Lot of this is because we show respect for
our customers. We don't take them for granted. We don't just look at them like
walking ATM machines. So I think that's something that comes with the book, but
you'll really appreciate it.
Igor: Sweet. Guys, get on the list, study Perry. Find his 20% and model that as fast as
you can possibly do it. So Perry, thanks again for being here.
Perry: Igor, thank you. It's a pleasure to be on List Building Lifestyle. It's an honor.
Igor: Well, it was an honor hosting you and hopefully, it's not the last time you're
coming down to share some value.
Perry: All right. Thank you much.
Igor: So List Builders, I'll talk to you soon.
Thanks for listening to The List Building Lifestyle Show, make sure to subscribe on iTunes or
Google Play to never miss an episode because who knows just one conversion tactic we share
on the show might double your list and double your business. Download the transcript of
today’s episode and all future episodes at listbuilderslifestyleshow.com and don’t forget to
claim your complimentary copy of “The Wealthy List Builder’s Survival Guide” at
listbuildinglifestyleshow.com/survival. This is Igor Kheifets until next time we talk, have a
This is the ThePodcastFactory.com.
Life changing interview. Thanks Igor.