TO MAKE A SEVEN-FIGURE INCOME? SOLVE A SIX-FIGURE PROBLEM
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Episode tips
- To make a seven-figure income you will need to offer big-ticket programs that are high margin and scalable.
- For every big ticket program, you need a finish line and a prize.
- There are only really four things that people are buying in this world. They want to make money, they want to save money, they want to stay out of jail, or they want to have a better life.
- It’s your job to get your client to actually use the product or service you’ve sold them
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Doug Morneau: Welcome back, listeners. Welcome to another episode of Real Marketing Real Fast. Today I’ve got, joining me in the studio, Tom Matzen. Tom works with entrepreneurs. They hire him, and he is an authority on building seven figure businesses for them fast, because most entrepreneurs, as you all know, are busy wearing many hats. We’re overwhelmed, we’re trying to get things done fast, and lots of times, we’re doing stuff that we don’t love, and quite frankly, that we’re poor at.
He helps them by doing a complete run for you service that creates high ticket programs that find ideal clients and convert them to sales. Bottom line, the authority does what they’re great at. Tom and his business partner, Frank, and his team do the rest and guarantee them a million dollars of income in two years.
Tom has started some 82 business of his own and has made more mistakes in his own businesses than most people make in a lifetime. He has lost millions of dollars several times over, but more importantly, his personal coaching clients have generated more than $100 million in sales in dozens of different industries.
As an international best selling author and seminar presenter, he has been able to share his message of business success and failure to more than 100,000 people on four continents. Today, Tom and I are going to discuss three steps to building a seven-figure authority business, so welcome to the podcast.
Tom Matzen: Hey, Doug. So excited to be here, and what I love about that is the actual bio says, “Made and lost millions,” but I like it when you just say lost because it really drives the point home that we learn our best lessons from our mistakes, don’t we, Doug?
Doug Morneau: Ah, fair enough. Sorry about that. I’ve been deep in Tim Ferriss’ book that I got, Tribe of Mentors, and looking through his questions of people talking about their successes and failures, and I missed that one.
Tom Matzen: Well, I know, but that’s the thing. You and I go way back, and you know this, and I’m sure most of your listeners know this; your best lessons come from mistakes if you’re prepared to learn them.
Doug Morneau: Yeah, fair enough. That’s right, not make them again.
Tom Matzen: Sometimes if you’re not paying attention, you got to learn it a few times, but that’s great. I’m so glad to be here.
Doug Morneau: Well, I think of repeating a class in school. I failed the first time, I didn’t pay attention, so I have to do it again.
Tom Matzen: There you go. Exactly.
Doug Morneau: With your business model, that’s a pretty bold statement, so do you want to share a little bit about what you do, and how this works?
Tom Matzen: Yeah. It happened in a very interesting way. I’m part of an international mastermind. There’s about 160 of us in this mastermind, and about 30 or 40 of the names most of your listeners would know, and most of the rest of the names, unless they were in the certain field, they never would’ve heard of this person. It’s a fascinating group, and they’re all world class in their little area. They’re niche.
One of them is the guy Frank Bria. He was doing a masterclass on how to scale your business. I saw the content, and I said, “You know what, Frank? I’ll be happy to promote that. That’s a great message for our tribe. Happy to promote it.” We did, and the masterclass was coming up, and I don’t normally sit in on other people’s masterclasses that I promote, because I’m busy doing my stuff like you are, but I thought, “This is a message that I could use.”
I sat in on it, and about a half an hour in, I realized that Frank had a couple of keys that would have prevented me from losing millions, and, more importantly, leverage the money that I did make exponentially, and I was like, “Oh, my Gosh! Scalable programs! That’s what was missing.”
I had just done a launch the year before where we came up with a new program, a done for you webinar system, lead generation machine, we called it. Doug, you’d love that. $25,000 program, half up front, half when we generated $100,000 in sales from them, and we did $450,000 in sales in two live presentations in less than four weeks. We just crushed it. It was awesome.
And then, in fulfillment, we got our butts handed to us, and it was the first time in my entire marketing career, and as you know, I’ve been around longer than since Al Gore invented the internet. I’ve been at this a long time, and it was the first time I literally … I had three other partners … We were literally unable to fulfill our promise to all of these people.
Even though the way we guaranteed it, we weren’t responsible for that. I felt terrible about it, and ultimately I convinced my partners to offer a full reimbursement to every one of these people because I felt so bad about it, but I was in this phase of I offered to reimburse, I hadn’t yet earned the money to reimburse them, and I was sort of like, “What went wrong when I watched Frank’s masterclass?”
He talked about the elements of scalable programs, and it’s one of the things we’ll talk about today because if you want to make a seven-figure income, the first thing is you can’t sell it on a $37 widget. It’s just not going to work.
Doug Morneau: Well, you just got to sell a shitload of them at $37.
Tom Matzen: Yeah, and most cost of acquisition, and you know this better than most, most cost of acquisition is more than $37. If you’re one of the best marketers in the world, you’ll never profit a million dollars off of low ticket items. The first key to this is you got to find a way to solve a six-figure problem. Six-figure, seven-figure, eight-figure, but at least a six-figure problem, and that starts with … There are only really four things that people are buying in this world. They want to make money, they want to save money, they want to stay out of jail, or they want to have a better life.
For everyone listening to this, I challenge you to look at what you’ve got and say, “OK, of what I’m offering, my primary, most distinct offering, which is it of those four?” Most people will come and say, “Oh, it’s a bit of this and a bit of this,” but fundamentally, they’re interested in one of them as the most important element. The business you’re in, marketing real fast, pretty easy which one of the four it is, right? It’s making money. I create seven figure authorities. It’s making money.
Now, we do it where, in our model, it’s called a “Done for you” service where they have a better life because we do all the heavy lifting, but fundamentally, that’s not the reason they’re saying, “Yes, I’m interested. Let’s talk.” They’re saying, “Yes, I’m interested, I want to make a million bucks, and I’m sick and tired of doing it $37 at a time.”
We do a whole bunch of masterclasses, and in most of them, we do an analysis. Even a $2,000 program, it’s virtually impossible to make seven figures of profit on $2,000 programs. I’ve had the pleasure of meeting most of the heavy hitters and sharing the stage with many of them in the information marketing space, whether it’s Tony Robbins, or Jeff Walker, or Dan Kennedy, or Lisa Sasevich, and they don’t make their money that way, Doug.
If you get a chance to meet them behind the scenes, you know it. They don’t make their money off the $2,000 programs.
Doug Morneau: No, it’s the big masterminds. We were with Frank Kern earlier this year, and he talked about that. He talked about a $35 acquisition cost to get somebody into a sales funnel.
Tom Matzen: Yeah. You just can’t do it on the low ticket items. You need to come up with a six-figure problem, and then you need to express it in the form of an outcome because they want a solution. I believe the information age is over. The information age is over. Just go to Google, you can get as much information as you want on any topic you want, and usually too much information. What I believe is that we are now in the results age. Your clients, your prospects want results.
Even when we were prepping for this podcast interview. I asked you the question I always ask, and you said, “I want it to be actionable. I want it something people can use right away.” Why? Because you know, and I know, results are what counts.
Doug Morneau: Like you said, people are overwhelmed with information, and I think that a lot of people hide behind the information as a way of procrastinating. What they really need is something they can take away and get an instant win and say, “Hey, there’s a chance I can do this.”
Tom Matzen: Yeah, and that builds momentum, too, right?
Doug Morneau: Yeah.
Tom Matzen: Which I think that’s the secret ingredient for entrepreneurs.
Doug Morneau: You talked about creating a high ticket program, and I want to bring that up because that’s very contrary to what a lot of the guys you’re talking about, and I’m not opposed to being contrarian. Again, I’m looking for results, as I’m sure our listeners are. Why don’t you talk to us specifically about why you’d create a high ticket program, and how you guys have turned the sales funnel upside down?
Tom Matzen: It fundamentally comes down to several elements, but the first is this: It’s got to be a high ticket, high margin, and scalable. It’s got to be all three of those. Just charging a lot, but if there’s so much cost of fulfillment, that doesn’t make you the margin. It’s got to be high margin, and it’s also got to be scalable. It’s got to be scalable, and we’ll talk about that in a moment. We’ll give you the five elements of a scalable program because that was the insight.
I was listening to Frank, and I went, “Oh, my gosh, I was missing scalable!” I had everything else, but I was missing scalable, and that’s why I got my butt handed to me. So I reached out to Frank, I said, “Frank, we got to talk, man. We need to either work together, or you coach me, I coach you, but I’m telling you, there’s something there,” and we came up with what is now our Embark million dollar authority partnership program.
This was early March of 2017, and three weeks later, we launched our first masterclass to just test the idea, because you know how it works. You want to get it out and test it.
Doug Morneau: Yep, absolutely.
Tom Matzen: We had 524 people register for our masterclass. We’d never had more than 200 register for our own webinars before, so we were blown away. 524 people registered. We had 93 show up, which is about right. You get about 20% showing up. 15 minutes in, we’d filled the room of 100. We used the Zoom Webinar platform. We literally were turning people away for the first time ever, for Frank and I, ever. We were actually turning people away. It’s like, “Holy cow.” We awarded 11 multi six-figure contracts out of it. We did a $1.1 million launch for testing the idea.
Doug Morneau: That’s a great way to test.
Tom Matzen: A great way to test. With high margin, it has several advantages. Number one is, you get more money, which allows you to outsource to best in breed. This is such an important lesson. Everyone listening in has heard about outsourcing. Some of you, the more advanced, know about out-tasking and outsourcing, but here’s the challenge: most of us, and I’ve talked to tens of thousands of entrepreneurs over the years, most of us don’t outsource to best in breed. We outsource to, typically, what? What do we outsource to?
Doug Morneau: Lowest cost.
Tom Matzen: Yeah! Fiverr.
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Doug Morneau: [crosstalk 00:11:17] compliant, yes. He’s going, “Hey, let’s see if we can save $2,000 in the build, the web build. I’m going, “Are you kidding me?”
Tom Matzen: Yeah. “My cousin George who lives in a basement with his mom.” It’s rarely, rarely best we can afford, and it’s hardly ever best in breed, but if you ask someone, “Why are you not using the best Facebook ads person out there?” What do they say?
Doug Morneau: Cost too much.
Tom Matzen: Yeah. And of course, you’re a marketer, Doug. You know that’s actually a stupid phrase.
Doug Morneau: It is. I mean, it costs more to use the low performer, because you’re going to waste your money and not get the results.
Tom Matzen: I just talked to a guy who was giving us some coaching over the break. He’s an informal mastermind friend of mine. He runs one of the largest business podcasts in the world. You’d know his name. I won’t tell you the name because when you hear the story, you’re going to know why. He was asking for some input on a lead conversion process he was setting up, and I looked at it, and I go, “Who set this up?”
He said, “Da, da, da, da, da,” and I said, “Oh, you got to be kidding me.” And then I said, “Flaw, flaw, flaw, flaw, flaw,” and he goes, “Oh, yeah.” Right away, he could recognize the flaws when I pointed them out. It was his Facebook marketing person.
I said, “How much has this Facebook marketing guy made you in the last four months?” He said, “Made me? It’s cost me $30,000.”
Doug Morneau: Wrong answer.
Tom Matzen: I’m like, “Facebook marketing guys are supposed to be ATMs. You put a dollar in, you get 20 back.” They’re supposed to be a money machine, but invariably, we use the cheapest guy we can afford and not guys that guarantee results, but charge a lot? It’s insane, and the argument is, “We can’t afford it.” Well, here’s the thing. If you have a high ticket, high margin program, you now can afford to outsource to best in breed.
If you do that, guess what? They’re really good at it! And when they’re really good at it, they get results, and when they get results, of course, you can afford it, because your cost per lead goes way down. Your cost per conversion lead goes way down, but your cost per lead also goes down. By having high margin, it affords you the ability to outsource to best in breed. The other thing it affords you, frankly, is to stop doing it all yourself.
Doug Morneau: Yeah, that’s definitely the scalable part. If you’re a micromanager, that’s going to be a tough thing to hear, but the reality is, like you said, if you want to scale to a multi seven figure business and get out of six figures, you’re going to need to get some team, and if you don’t have the right team, you’re going to be doing it yourself.
Tom Matzen: You knew me back when I was doing my E-Myth consulting days, working with Michael Gerber, working my butt off to make 200, $300,000 dollars. As a consultant, you’ve got a cap. Today, it’s like 350, $400,000 maximum. That’s all you’re going to make if you are doing it all yourself. That’s it, and you’re going to be working 60, 70, 80 hours a week to do that.
Well, that’s not more life. That’s not enjoyable, that’s not spending time with your family, getting to know them, getting to know their friends. There’s no way. It’s really important, philosophically, to have that ability. The challenge most people go is they say, “Well, yeah, but how can I possibly start there?”
Doug Morneau: Great question. How do we start with the big ticket item?
Tom Matzen: The next key … You’ve got to solve a six-figure problem, so you look at what you’re doing to figure that out, then the next step is to create a proprietary process around it. Here’s the thing. People are paying us to create order from chaos.
Doug Morneau: That’s a good way to sum it up.
Tom Matzen: They’re not paying for a 73 step solution. You and I got to know each other building coffee bars.
Doug Morneau: That’s right.
Tom Matzen: We knew more than our clients did, but not much more.
Doug Morneau: I know, just enough.
Tom Matzen: We knew a lot more about lease negotiation, and we knew a lot more about construction, so there we provided tons of value, but on actually operating and running coffee bars, we didn’t know a lot more than they did, but we were able to create order from chaos, so they would pay us very handsomely to do that.
That’s everyone’s job, is you need to come up with three to five steps to your program. Three to five steps, and frankly, it should be three or five. There are some NLP reasons behind that, but if you’re taking notes, jot down three or fives steps to your program. Here’s the thing. You may have a 73 step process, but you got to group them together and step four might be doing these 12 things.
That’s fine. There may be 12 things to step four, but they don’t want to pay for complication. They don’t want to pay for complication. They want order from that chaos. Here’s something that Frank added to the mix that I did not appreciate fully until we started working together, and that was, for every step … Let’s say it’s five steps to your proprietary process, OK? For every step, you need to come up with a finished line and a prize. A finished line and a prize.
What’s the finished line? The finished line is, what does done look like for that step? What does done look like for that step? And, done that matters to whom? Done that matters to whom?
Sorry, it’s my question for you. Who does the done matter to?
Doug Morneau: It matters to the client.
Tom Matzen: Yes!
Doug Morneau: People aren’t looking for you to tell them 15 steps to do something. What they’re looking for is the end result, which, in this case, is I want more sales.
Tom Matzen: Yeah! For example, a good finished line is not, you come up with your client avatar, or your ideal target markets profile. That matters to you because you need it for the next step, but it doesn’t matter to them. What good does that do them? Now, if you just modified a bit and say, “We’re going to create a client avatar so that we can provide you with the scripts that you can answer any question that comes from a prospect with full confidence knowing that you can move them forward.” Now, that’s different.
Doug Morneau: Absolutely.
Tom Matzen: That’s a system to convert. Now I’m all over it. The second part is the prize. This is really important. If you’re creating high tech at high margin programs, you need to have a prize. You need to have a way to celebrate, and it needs to be demonstrable, and what’s in it for them, and a little extra for experts, you structure your pricing to the finished lines as well.
If you’re charging $25,000 for a program, typical for us is 25% down, 25% when you get to the first milestone, and 50% when you get to the final milestone. That makes it way easier to sell because you’re able to guarantee results. By the way, that’s also the very reason brand new people can offer high ticket, high margin programs. If you build reversal strategy, if you have a program, if you have a process where you know you can get results, and you got to have skills accountability and mentorship, you can’t just have the theory, the knowledge, that’s not going to guarantee results for anybody.
One of the biggest … What’s the polite way to say this, in case your iTunes PG here? What’s the biggest myths in the information marketing business, is that you can’t guarantee results.
Doug Morneau: People will ask for refunds at the blah, blah, blah. Yeah, I’ve heard that.
Tom Matzen: Exactly. It’s like, “Blah, blah, blah, blah, blah, blah, blah.” Dan Kennedy. One of my early mentors, Dan Kennedy, taught me that my job’s to sell you the blah, blah, blah, you’re job’s to use it.
Doug Morneau: But you got to put in the work.
Tom Matzen: Well, except here’s the thing. If you’re charging big dollar amounts, your job is to get them to use it, otherwise, you’re just part of the education marketing kabob. That’s what Frank and I call them all. They’re just selling you stuff. They’re just selling you stuff, you’re not going to use it, just like you didn’t use the last six things you bought.
You’re going to buy it, you’re barely going to read it, you’re barely going to watch the videos. They’re just going to sell you some more stuff, so we’re going to stack a whole bunch of bonuses in so you’re overwhelmed to make an impulse decision, rather than rationally, strategically pursuing something.
You emotionally react. “Yeah, well, I should know how to do Facebook ads. I should know how to do Facebook ads. That would be good. I can make a lot of money on Facebook ads.”
Doug Morneau: Yeah, I see that often with the tools that people use. I’ll go meet somebody … I’ve been in different masterminds, and here’s the feedback I’ve got from most of the people that are in the masterminds. They have bought every tool out there. They have got Infusionsoft, and they’ve got Drip, and they’ve got Active Campaign, and they’ve got Unbalance, and they’ve got Leadpages. You fill in the blanks. They got ClickFunnels. They’ve got all of them, and they have no idea how to use any of them, but they’ve attended a bunch of webinars, they bought every marketing tool out there, even though many are redundant, and they’re not using any of them.
Tom Matzen: Totally. And if you talk to a Fortune 500 CEO, and you were giving them advice, and you said, “Well, yeah, for lead gen, you should be using targeted Facebook ads. Go take a course, Mr. CEO, on how to do Facebook ads,” you know how fast you’d be kicked out of his office, or her office?
Doug Morneau: Yeah, absolutely.
Tom Matzen: Instantly, on the spot. It doesn’t work that way. You got to be the CEO of your business, and find someone that’s awesome at Facebook ads, and let them do that. That’s the second key, is the proprietary process. Order from chaos, three to five steps, finished lines and prizes. Now, the program itself, though, and this is so important, it has to be scalable. It has to be scalable. Please, folks, learn from my $450,000 mistake that I made last year. Please learn from it. It’s got to be scalable, and there are only five things in a scalable program.
Number one, virtual training. We’re all familiar with this one. Online training. It is the best place to learn skills because you can pause, you can rewind, you can play it again. Live is not the best way to do that, and you’ve all been to live events where they’re teaching you all kinds of stuff, and you’re like, “What did that guy say? That was really good. Oh, man, what did he say? Oh, man, they’re on to something else.” Live is not a great place for skills training. People think it is. It’s not. It’s not whatsoever.
Virtual training. Second, masterminds. You’re a big fan of them, I’m a big fan of them. Done right, masterminds are the greatest force for good in business, done right. Most masterminds are not done right. That’s a whole separate discussion, and the reason is this: in masterminds, you’re not the star. Your clients are the stars. They’re helping each other. Your job is just to facilitate. Get out of the way and let their brilliance come through.
Next is group coaching. Group coaching is where you are the star. Not one-on-one coaching, but group coaching, and there’s a lot of people that get hung up on this. They think group coaching is less valuable than one-on-one, and yet all of us have experienced the opposite. Think back to when somebody else asked a great question, and you were in the environment, and they gave an answer, and you went, “Wow, that’s great.”
Doug Morneau: Absolutely. Or, they interpreted something differently. I’ve been in groups where we’re all reading the same books, or we’re reading a Jim Cullen’s book, and we get together, and then share what we learned in the chapter, and I’m amazed that there are 10 people in the room and everybody took away something totally different.
Tom Matzen: Yeah, with entrepreneurs, there are 14 different insights from the 10 people.
Doug Morneau: Yeah, and that’s really cool. That’s because we’re all in different places in our business and our life, and so what speaks to us speaks to us where we are.
Tom Matzen: And that’s the little post-it note I have that we give out to everyone that we do our group coaching is, how does this apply to me? Not does this, but how does this. Train your brain. Train your brain to figure out how. That’s group coaching, number three.
Number four, done for you services, but only if they’re scalable. Only if they’re scalable, and this is an area where I blew it multiple times, and I did it right multiple times. I used to be involved in franchising a lot, right, Doug?
Doug Morneau: Yep, yep.
Tom Matzen: Franchising is a done for you service that’s scalable by definition. By definition. Had I known what I know now, I would still be in the coffee business. In fact, you and I would probably still be in the coffee business, because we would have had done for you services built into the coffee bars, and then we would’ve had a system rental fee of 300 bucks a month to coach them to get profitable and stay profitable.
I’ve built 187 coffee bars over my background. I could’ve easily added 50 or 60, and I’m still paying me $300 bucks a month to become profitable and stay profitable. “Done for you” services that are scalable are a good thing to do. Not if they’re custom work, though. If they’re custom every single time, that is not scalable. That’s going to kill you. You got to get out of that part of the business, and if some of you are taking that personally, that’s OK. I’d rather you be pissed off at me and make money than placated by me and stay broke.
Doug Morneau: Yeah, that’s what I say all the time. When you’re asking people for advice, you want them to give you good advice, and not pat you on the back and say, “Hey, good job,” while you’re going down the wrong street. Tell me right here, stop, turn around, and run the other way.
Tom Matzen: Exactly. And then the last part of scalable is live events or workshops. They can be a great part of a scalable program. Masterminds, often, you’ll get together three times a year live, or you’ll get together twice a month live if it’s a local mastermind. Live events can be a phenomenal way to do that. We do deal making summits. I was talking to you about that in our pre-prep here. Our next one is in Kauai on the Hawaiian Islands. It’s a live event. I’m doing strategic alliances and deal making.
It’s part of several of our high-end programs, and it’s a separate standalone event at the same time, so people can come to it as their first thing with us, or it can be part of our program. Live events or workshops can be scalable. Again, if you set it up that way. Virtual training, masterminds, group coaching, done for you services, and live events or workshops. That’s it. Anything else is not scalable.
If you build in … Well, I do a launch call. That’s all one-on-one with them. You got to be careful because you’ve immediately crossed over to where you’re selling your services one-on-one. Now, if it can be anyone doing it, that’s different. That’s a done for you service now. That’s a done for you service.
When we would do our high-end partners, our million dollar authority partners at Embark, our launch call was Frank and I. They’re paying six figures plus a rev share deal. It’s a big thing, but we’re guaranteeing them a million bucks. We’re doing the launch call, we record it, we mind map it all, but then we send it to our program person, and they come back with the program description done, ready for the three of us to review.
It’s scalable, even though right now, Tom and Frank do every one of those. The expected return is 300 to 400,000 per client per year, so it’s worth having that one call to make sure we get it right, but everything after that, from the recording on, is our team. Everyone needs to do that. If you’re listening in, you’re creating high tech at high margin programs, you need to do that. It’s absolutely essential.
Doug Morneau: How do you get somebody that’s just listening to this, they’re going, “Hey, I’m an entrepreneur or solopreneur, and this all sounds good,” but what are the next steps or the next considerations they would take?
Tom Matzen: Let’s do a real-world example. Let’s pick something that you’re working on right now, or you can make it up as someone you know, but let’s make it real. Something you’re working on right now, and let’s go through the process, bang, bang, bang, bang, bang, OK?
Doug Morneau: Sure, OK.
Tom Matzen: Pick a secret sauce, a special value, something you do awesome that you would love to build a seven-figure business around, Doug.
Doug Morneau: My secret sauce is renting third-party email lists.
Tom Matzen: Renting … Perfect. Renting third-party email lists. OK. Which is, if it’s done right, is unlimited scalability for lead gen for clients, right?
Doug Morneau: Absolutely, yep.
Tom Matzen: If it’s done right, it’s unlimited scalability. Facebook has a limit. In the entrepreneur space, it’s about 60, $70,000 a week. You just can’t spend more, even if you want to, because there’s only so many entrepreneurs that you can reach out and do it. Just ask Justin Livingston. He’s spending that much a week right now.
Doug Morneau: And you can’t get the volume as quickly. We could send out a campaign, and we can have a million people on landing page within an hour.
Tom Matzen: Right. Let’s take that. Renting third-party email lists. What’s the six-figure problem you’re solving? You’re not renting lists, right? What are you solving?
Doug Morneau: Generally I’m working with venture capital companies, and they’re trying to raise capital, or they’re trying to bring awareness to an existing public company.
Tom Matzen: So are they making money, saving money, staying out of jail, or having a better life? Making money, right?
Doug Morneau: All of the above.
Tom Matzen: All of the above, but the real thing is making money.
Doug Morneau: Absolutely, looking to make money. Yep.
Tom Matzen: And the outcome is you can find them a quality prospect to raise their hand and say, “Tell me more,” correct?
Doug Morneau: Yep.
Tom Matzen: We’re going to short-circuit this for the purpose of the podcast, but you would play with that if you’re not sure exactly what is the part of the business that, in this case, Doug is providing. You could create a program called Million Dollar Prospects, or Million Dollar Prospect Program. Million Dollar Prospect Program, where you’re guaranteeing them a million dollars worth of prospects. Take the venture capital world. What would the typical customer invest/spend?
Doug Morneau: With me?
Tom Matzen: With the clients you get them. I’m a venture capital firm, I’m hiring your service, Doug, to do this program. You’re going to get me prospects, right?
Doug Morneau: Yeah. So, they’re going to retain me to set up a design, run a marketing program that’s going to include … a lot of it’s going to be buying this type of media, and we’re going to drive them to a landing page, and they’re going to convert them by these guys raising money or investing with them.
Tom Matzen: Yeah, so what’s that … that prospect is going to spend an average of what?
Doug Morneau: It depends. They may be low values, they might be $10,000, they might be $100,000. Typically, they’re looking for a four to five to one return. If they give me $250,000 a week to run a marketing program for them-
Tom Matzen: Sorry, I don’t mean the prospect that’s hiring Doug, I meant the prospect’s prospect, in this case. They’re going to invest between 10 and 100,000, right?
Doug Morneau: Yep.
Tom Matzen: Let’s use $25,000 as a median, low median average, fair?
Doug Morneau: Yep.
Tom Matzen: How many prospects do you need to get me to generate me a million dollars worth of business therefor? At 25,000 per prospect? Got to divide that out. How much does that work out to? 40. It’s 40 prospects. Now, you know what you’re doing with third party email lists, correct, Doug?
Doug Morneau: I do.
Tom Matzen: How long would it take you … Well, let me back this up, now. 40 actually investing. What percentage of prospects in that world that raise their hand, actually invest? What’s the conversion rate?
Doug Morneau: It’s really tough to measure because a lot of these guys go to the market and invest in the market, so I can’t actually track a conversion in that sense.
Tom Matzen: Then I’ll use my experience from raising several millions of dollars from these types of people. If it’s a good offer, about one in three. If it’s a targeted, well-designed offer, about one in three at that point will invest. That means, to get 40 people investing, you’ll need 120 people raising their hand to say they’re interested. To get 120 people to raise their hand, you’ve got your process that you put them through, but you’ll know how many people it takes to put them through to get the 120, correct?
Doug Morneau: Yes.
Tom Matzen: So you’ll be able to quantify that and set that up to where literally you could say, “Yeah, this level program is the million dollar prospect program. This level program is the $10 million prospect program. Which would you like?”
Doug Morneau: That’s right.
Tom Matzen: Which would you like? Two different programs, boom, boom, boom, boom, boom. I always do it this way. I start with the ideal client and solve their problem to the tune of six or seven figures, and then I work it out as to how many clients, how many leads does that take to work it out. It’s so simple to do. Most people think, “Well, I’ll never be able to do that.” 40 people, 40 people. How long would it take you to get 120 prospects to raise their hand for a new client that’s started the start of the very next month?
As we record this, we’re late December 2017. At the start of January 2018, how long would it take you to get 120 prospects to raise their hand for a new client if you were focused and went for it?
Doug Morneau: Less than a week.
Tom Matzen: OK then. So, Doug, you need to have one of these programs, because here’s the thing. I can tell you this. You know this, but I can tell you this, I have 21 high-end partners. All 21 could use that service. All 21 could use that service. If it was scalable and linked to results, all 21 could use that service, and all 21 of those would be happy to pay you big dollars. In our case, we actually decide who we work with on behalf of all 21 of our clients, so it’s actually just selling Frank and Tom once, and we bring you twentyone clients.
And that’s just the one sitting there right now. That’s just the one sitting there right now and in one area. We could do $21 million worth of signed contracts for you in January. How do you like that?
Doug Morneau: Yeah, that’d be a busy first week.
Tom Matzen: This is the thing. People think, and I thought the same thing, but, “Oh, high touch at high margins, there’s no way. It’s impossible.” Yeah, it’s very possible, you just need to make sure that your outcomes are what your prospects want.
Doug Morneau: It’s interesting you mentioned that, because I find that people sell to their own comfort zone or a survey of one, and our typical client engagement is about $200,000 a week. That’s a lot of money. It’s like you said, they get a result for that, so they understand that, and I’m just not interested in competing with everyone else who wants to sell them a $5,000 a week Facebook program.
Tom Matzen: Yeah, absolutely, and here’s the cool part. Once you know what you’re doing, you can package it, link in a guarantee, charge way more than you’ve been charging before, and it’s easier to sell.
Doug Morneau: Sure, absolutely.
Tom Matzen: The combination comes together. We have one of our embarked clients, it’s a $10 million program. He takes companies that are in the two to three million dollar range in the software space, and using automation and scale, guarantees them $10 million a year in business. Guarantees them.
Doug Morneau: That’s a great scale.
Tom Matzen: Right? It’s a seven-figure contract that people sign. Do they pay the million up front? No, of course not. That would be stupid, for them and us. For them and us, it would be stupid. Instead, they make a payment, and then there’s finished lines and prizes for each of the stages. Finish lines and prizes at each of the stages. It’s so much fun.
If you’re thinking about this from the very, very beginning, start right with a six-figure problem you can solve. Get really clear on that, and then when you’re there, you need to validate that. You need to go out to some people that are in your ideal target market audience. Once you’ve got your five steps to your program with your finished lines and prizes, then you just go and do a validation call.
This is not a sales call. In fact, you tell them you won’t take their money, that you want to bounce an idea off them, and don’t take their money on this call. Come back tomorrow if you need to, but not on the validation call. Have the conversation. Say, “Here’s what I’m looking at doing. I’m working with Doug and we’re going to guarantee you a million dollars worth of prospects in the first 30 days, and a million dollars worth of prospects a month for the year, so it’s $12 million worth of prospects. It’s going to cost you a million dollars to become part of this program.”
Now you’re 10 Xing. Always look to 10 X. It’s a, in your case, Doug, if you’re dealing with the venture capital guys, it’s a million dollar investment, and you pay 12 and a half percent up front, and then we do this, then you pay another 12 and a half percent, and then you pay another 25%, and then you pay the other 50% and we get to the finished line, and at each of these we do this, we do this, we do this, and here’s how we get you there, boom, boom, boom, boom, boom. How does that sound?
And then you just get feedback. You get feedback when you’re doing the validation call. It is the fastest way. Our goal, when we work with our clients, we have an online group coaching version of our big program, because we can’t work with everyone. There’s too much involved in the run for you model, so we created this boot camp format where anybody can learn this on their own.
And, in fact, for anyone listening in, we’ll give you a link to the master class on that. It’s a three hour deep dive training on how to do this on your own, and part of that is the validation call process. You want to talk to seven. I’m holding my fingers up for a podcast. Isn’t that funny? Seven people, and get three to say yes. If you can get three out of seven to say yes, you’re validated.
If you get seven out of seven to say yes, you’re not charging enough. And, of course, if you get one of seven, or zero out of seven, your program sucks. Your program is not [inaudible 00:37:35]. Then you got to go back to the drawing board. But guess what? You go back to the drawing board before you spend any money. Way simpler. Way simpler to do that.
Doug Morneau: Yeah, I see most people do it the other way around. They spend months or years developing a program, then they launch it to find out the market doesn’t care.
Tom Matzen: Yep, and we’ve all heard that. We’ve all heard that. It’s like, you’re supposed to sell it first. You’re supposed to sell it first, but the problem is, if you sell it first, then you’re stuck, because you’ve sold it. So now, what I say to people, and I learned this from Frank, you validate your offer first. Then, once it’s validated, yeah, go ahead and sell it, and then develop it. Absolutely. Do it in that order. 100%. 100%. Ready, fire, aim. 100%.
Doug Morneau: Yep. Fail fast.
Tom Matzen: Yep, but validate first, and once it’s validated, off you go. One of our clients was in the book publishing business, and we developed a book launch strategy called Strategic Philanthropy Book Launch, where we raised a bunch of money for charity, build a 5,000 name list for the person, and it was all packaged together. It was $25,000. Half up front, half at the end, guaranteed results, and we sold three of them at our very first offering we presented it.
And then, six months later, we were still waiting for them to finish their darn book. I brought it to Frank. I said, “Frank, can you help us with this?” I had a partner in London on this. I said, “Can you help Aneda and I?” And he said, “Sure.” We started talking and he says, “Well, first thing you got to do, in order to guarantee the outcome they want, which in this case is not a book, and it’s not a list, it’s actually making money from the book in the list.
The first thing you got to do is you got to write the book for them! Ghostwrite it.” We’re like, “Oh, right.” He says, “Then the second thing, you got to make sure there’s a high tech high margin program that the book sets up the sale for, because of the purpose of a book, in the business world, is only one thing, to sell your high tech at high margin program. That’s it. To establish your authority to high tech at high margin program.
The purpose of a book is not a business card. The purpose of a book is not a door opener. The purpose of a book is not a coaster.” Oh, right. That’s what most people do with them. “The purpose of a book is to establish a high tech at high margin offer,” so we added those two things on the end. One at the beginning, one at the end, and instead of 25,000, we charge 100,000 for it now. It’s called Million Dollar Book Launch, and we got five clients in the first 60 days, Doug.
Doug Morneau: That’s cool. Totally makes sense.
Tom Matzen: Way more scalable, way more fun.
Doug Morneau: Yep. That with the process of writing a couple books, and you’re right. It takes work, and you need help, and you need the right team in place to do it. That’s the only reason I got it done, is I hired a team to do it.
Tom Matzen: Exactly. Well, you’re smart. You know how to delegate and outsource, and that puts you ahead of so many entrepreneurs, but the challenge most entrepreneurs have is not that they don’t want to delegate. In my experience, it’s they don’t have the cash to delegate, so that comes right back to how we started this thing 18 minutes ago, or 98 minutes ago. I forget now. We’re overtime. Thank you for this.
We started with what? Solve a six-figure problem so you can charge a lot so you have the cash so you can outsource to best in breed.
Doug Morneau: Absolutely. Let’s move along because we got to be respectful of your time. What’s the thing you’re most excited about as it relates to marketing and what you’re doing for your clients in the next, say, 6 to 12 months? I know the world’s moving fast, and like you said, the information age is … Well, Google has all the answers, so what are you most excited about?
Tom Matzen: I would have to say … In 2017, we launched our first non-profit, a formal, not for profit, 501C3 structure in Arizona with a mission to reverse the failure rate of small business. I used to have that as my personal mission, and I realized I don’t want to work with all entrepreneurs, I only want to work with people that want to create movements, people that want to transform the world. Now my title is Chief Movement Maker, and I’m very, very specialized in who I work with.
We set this non-profit up to work with anyone, though. We run two global summits a year, and all the proceeds, 100% of the proceeds go to help entrepreneurs literally reverse their failure rate, and I’m super excited about that because we just finished our first summit. We’re going to be going to Houston, and Florida and the Caribbean to help entrepreneurs hurt by the hurricanes because there’s a lot that were hurt by those hurricanes. I’m telling you. 50% of the homes in Houston had some damage. 50% and Houston’s the fourth or fifth biggest city in America. It’s huge. Massive.
There’s a lot of people out there. I’m super excited about that on the give back side of things, and I’m just pumped about that. That’s one of the big things. The second thing is, there is an awakening happening with entrepreneurs that are realizing that it’s about the lifestyle, it’s about the game you’re playing. It’s not about the hours you put in or the gross dollars you make, it’s about the residual income, the passive income.
We’re calling it now, Frank and I, a legacy lifestyle. Legacy lifestyle, where the money is there to do good for your family, for yourself, and for the world, but it’s not about the money. For that, I’m super excited. There’s a lady that I adore and admire. Her name is Katy Charfen. She said, “Anyone who thinks money can’t buy happiness hasn’t given enough away.” Is that not cool?
Doug Morneau: Yeah, I remembered the first time we actually sat down in December. Heather and I were sitting talking about what we were going to do for some year-end giving in addition to what we’d already given, and I remember writing a single check to a single organization that was four times my previous annual salary, and thinking, “That was so cool.”
Yeah, there are two spectrums there. People say, “Oh, all you guys do is want to make money.” You know what? It’s really nice to be able to write a five-figure check to a charity that you care about, just because you’d like to do it in addition to what other support you’ve given them for the year.
Tom Matzen: Totally, totally. I called doing good and making money at the same time strategic philanthropy, where you combine the two. I actually think this is the second thing I’m super excited about for the year ahead. I think that’s becoming the new norm. It’s becoming the new norm. It’s not the new norm yet, but it’s becoming the new norm. More and more entrepreneurs are realizing, “Hey, if I can do good and make money at the same time, that’s way better than just making money.” Or, frankly, way better than just doing good and starving.
Doug Morneau: Absolutely, and I talk to clients about that all the time. It’s like, I know that you want to help everybody, but why don’t you make a whole bunch of money, and then the people who can’t afford your program, if you really care about them, gift it to them, or help them in another way, but don’t operate your business as a charity?
Tom Matzen: Yeah, and even better, sell your program at a high enough price that every time someone buys one, you give one away to someone in need.
Doug Morneau: Yeah, there you go.
Tom Matzen: Just buy one, get one free. Toms Shoes built a $350 million company selling, frankly, pretty boring shoes.
Doug Morneau: That’s true, yeah.
Tom Matzen: Pretty boring shoes. You ask people who buy Toms Shoes, “Are they the best shoes in the world?” “No.” “Are they the most comfortable?” “No,” but you know what they do? Every time I buy one, they give one away. We can all do that. We can all do that.
Doug Morneau: Two questions for you. Who’s one guest you think I got to have on my podcast?
Tom Matzen: Do you want a shattered myths, or do you want to reinforce wisdom? Is there a particular gap in your audience’s arsenal of tools that they would need to learn?
Doug Morneau: I think people need to get out of their way, and they need to look at stuff that’s bigger than them and understand that the barriers are imaginary, that they can do more than they think.
Tom Matzen: Perfect, so then I would suggest Alex Charfen. Do you know Alex?
Doug Morneau: I do not.
Tom Matzen: Katy Charfen’s husband. They run a large entrepreneurial organization. I call Alex the next Michael Gerber for entrepreneurs. I worked with Michael for a number of years as an EMyth mastery coach. Michael’s one of the wisest entrepreneur minds in the world. I think Alex Charfen is the next Michael Gerber, and he actually, I’m sure, would describe it as even better.
But, he talks about the importance of momentum as an entrepreneur. He’s just so, so wise on this topic. As an entrepreneur listening to this, when you’re going forward with momentum, you love it. When you’re going backward, and you’re getting pushed on, and you’re getting stomped on, you love it, because you’re like, “Oh, yeah? I’ll fix this. I’ll solve this problem.”
When do you not love it? When you’re stuck. When you’re going nowhere. That’s worse for an entrepreneur than going backward. Way worse. When you’re stuck, it’s a terrible feeling, and Alex talks about and has brilliant insights on how to build momentum into your day, into your week, into your month, into your life, so that it’s there, and if you ever meet him, you know he walks his talk. He’s awesome
Doug Morneau: That’s cool. Well, I will reach out to him on your recommendation.
Tom Matzen: Yeah, I’ll email and introduce you to him. He’s an awesome guy.
Doug Morneau: Excellent. Thanks for that. That question is usually the toughest question in the podcast. There are people who are going, “Oh, man, that’s a tough question,” but that wasn’t tough for you, so you just killed it. What’s the best way for people to get ahold of you and find you?
Tom Matzen: The best way, if they’re interested in learning how to become an authority, let’s give them the master class. It’s called How to Build a $250,000 a Year Authority Business Even If You Can’t Market Your Way Out of a Wet Paper Bag.
Doug Morneau: I love the title.
Tom Matzen: It’s a three hour deep dive training. It’s completely free, and we love our master classes because we can give, and give, and give, and give, and that’d be the best way. We’ll make sure that we have a link, so if you’re listening to the podcast, wherever you get the podcast from, Doug will have a link. You can download it as a gift to you. That’s the best way to do that. You’re of course welcome to connect through Facebook, or LinkedIn, or any of the other social media methods out there. I’m pretty easy to find. M-A-T-Z-E-N, for our American friends. M-A-T –ZED- E-N for everybody else in the world.
Start there, because here’s the thing, you all, every one of us deserves to have a high ticket, high margin program, and you’re going to get there anyhow, so why not start with that, and have the cash flow in the beginning, instead of struggle for three to five years like most people do, before you figure this out the hard way, and then go, “Oh, yeah. That Tom guy was right. I should actually have done that in the beginning.” You’re going to go there anyhow, so you might as well start there and figure out how to do that, and just make your life that much more fun along the way.
Doug Morneau: Well, and I found with the high ticket item, there are fewer people in line selling.
Tom Matzen: Oh, yeah. Way less, and especially, if you’ve got a process that you can guarantee results. Now, some of you may be thinking, “I can’t guarantee results.” Just ask yourself this question: What would you have to do in order to guarantee results? For example, all of our programs have an accountability partner. Every one of them has an accountability partner or program built in. Everyone who takes any one of our programs has an accountability coach assigned to them, and it’s not Tom, and it’s not Frank because we’re terrible at accountability ourselves.
We have people we hire for that. Robin [inaudible 00:49:36] leads our whole accountability team. People say all the time, “Yeah, but I can’t guarantee they’re going to do the work.” Well, sure you can, you just have to build redundancy into your model.
Doug Morneau: Yeah, that totally makes sense.
Tom Matzen: Build redundancy, or, in your case, Doug, lots and lots of people use third party email lists, but if you’ve figured out how to use them scalable, predictably, and get results, then guess what? You can literally guarantee ideal prospects. That’s a license to print money.
Doug Morneau: I think so.
Tom Matzen: Love it.
Doug Morneau: Hey, thanks, listeners. There’s another episode of Real Marketing Real Fast. I hoped you enjoyed the insight. I know we ran a little bit longer today, but today there was a lot of value in the content, so I’d leave you with a parting thought: Are you ready for a business breakthrough, or are you just going to settle for more of the same? Thank you to my guest, Tom Matzen. Thanks, Tom, for sharing with us today, and giving and leaving so much value with our listeners.
Tom Matzen: You are most welcome, and I’ll leave you with a quote from my mentor from several years, Jay Abraham. He says, “If you have a product that delivers value, you have a moral obligation to reach as many people as you can.”
Doug Morneau: Absolutely. Tune in next week. If you’re following us on iTunes, don’t be shy. Make sure that you subscribe, sign up, leave us a review if you liked the show, and feel free to come back to the website. We’ll make sure that all these show notes are transcribed. They’re there. We’ll have access to the mastermind that Tom talked about as well as all of his links in the show notes, so thanks so much, and we’ll see you on the next episode.T
Resources:
Here are the details for the free 3-hour Master Class that Tom shared during this episode.
How To Earn $250,000 a Year As An Authority in Your Field … Even If You’ve Never Earned Six Figures
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For an example of a Million dollar membership launch – Listen to $1 Million Dollar Bitcoin Giveaway – Palm Beach Group
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