Have you ever heard of The Boardroom Report? Yup, Brian Kurtz helped Marti Edelston grow a 5 million dollar company into a 160 million dollar company. That’s who you are about to hear tell his fascinating story about building someone else’s empire then branching away to start Titans of Marketing, focusing on direct marketing. His book; The Advertising Solution helps others build their own niche and create their marketing plan.
034: Brian Kurtz On Utilizing Materials You Already Have to Build Your Path
I’m about to introduce you to a gentleman who built a $160 million business along with another very famous entrepreneur named Marty Edelston. The gentleman I’m about to introduce you to came into the company when it was running at $5 million in sales and at its peak did $160 million in sales before he went out on his own and created one of the most successful masterminds out there called Titans Marketing.
Titans Mastermind is the mastermind and the company is Titans Marketing.
His name is Brian Kurtz. Brian, so glad to have you. Welcome to the show. How are you?
Fantastic. We were just talking about all the mutual friends we have and mentors that we both have, and it’s great to be on with you because I think we’re cut from the same cloth even though we come out of different businesses.
Are you from New York?
I am. I was born in The Bronx and I grew up in the suburb of New York City.
I’m from Brooklyn and I grew up in Manhattan Beach, Brooklyn. We should get into it here because I know a lot of people listening want to hear your story. Let’s go back to the very beginning, Brian. I know you joined Marty when the company was just $5 million in revenue. You are obviously a driving force for that company. What did you see when you entered the door of a $5 million-company? What thoughts did you have? How did you perceive the way to take that company to the heights that you did?
I have to be really honest here. I was 23 years old and all I wanted was a job that would pay me $12,500 a year instead of the $9,000 a year I was making at my first job out of school. Let’s put it in perspective. Looking back, it’s easier to say this now, but I definitely saw what I call a learning organization. What I saw was a place where while the company was run by a very, very powerful and opinionated entrepreneur in Marty Edelston, I recognized very quickly that while Marty wasn’t taking everybody’s ideas all the time because he was typical of a lot of entrepreneurs that it’s very hard for them to see other people’s ideas is as good as theirs. What I did see was an organization that Marty wanted everybody to become educated in the business. We were a direct marketing business, selling subscriptions and books for consumers. He wanted everybody to become more educated. He wanted everybody to be able to participate in the continuous improvement of the business. At the time, he was a student of Japanese business in kaizen, and developed something called iPower which was a continuous improvement program. What I saw was a place where I thought I could grow. Did I think that I would be an architect with him of taking the business to $160 million? I never could have dreamed of that in 1981.
As those first ten years went of my 34 that I spent at the company, I saw what I call an organization that really encouraged entrepreneurship. I know that a lot of your audience are people who are maybe in their 20s and 30s who are working in an organization, they either don’t like their job or they want to get out and go out and do something on their own and be an entrepreneur. The thing that I would always say to people like that is, “It is great to be on your own. It is great to be an entrepreneur, but the best is if you can at least earn your stripes in an organization that encourages an internal entrepreneurship.” That is either they have silos that people are in charge of. Entrepreneurship gets spellchecked if you type it, so it’s not a real word. I do believe that the key to my ability to see myself as an entrepreneur was that I was in the right organization being a learning organization where everybody’s ideas mattered. I was eventually given enough responsibility to be able to initiate ideas and become an entrepreneur within in an organization that was a totally entrepreneurial organization.
I say to younger people, especially who say, “I hate my job. I can’t wait to get out. I want to go out on my own,” I said, “Instead of jumping and saying you have to go on your own right away, the one possibility might be is to find another line job in another organization as an employee. Maybe you’re just in the wrong organization to be able to learn what you need to learn to eventually become the best entrepreneur that you can be.” It’s a little bit of a different spin on, “Get out of there as soon as you can and become an entrepreneur.” It’s, “Maybe you want to become an entrepreneur in a better organization that’s going to encourage you more so that when you are ready to really jump out on your own, you’ll have much better skill sets and a much better perspective than jumping out of an organization because you’re miserable and you hate your job.” That’s an important distinction I’d like to make.
The other thing we should point out here is that there are lots of people who’ve gotten very wealthy by not starting their own company, by joining somebody at the early stages of an existing organization and helping the founders grow it. There’s no harm in that. I don’t think anybody is crying over their millions and regrets never starting their own company.
I think that’s really well put, Mitch. I would say one of the things to that is that we have a culture sometimes though in the entrepreneurial space especially that it’s like a stigma. If you didn’t do it on your own then it’s not as good or if you didn’t do it on your own it’s not as majestic or whatever the value judgment you might put on that. Go to other countries out of the United States. They don’t even embrace entrepreneurship. I’ve spoken in France, I’ve spoken in Hungary, I’ve spoken in the Netherlands, and I’ve spoken in Germany. Entrepreneurship in some of those places is frowned upon and it’s certainly not something that’s considered this beacon or the pinnacle of a career. Whereas in the United States, it’s such a big deal to be an entrepreneur that sometimes I think we get clouded by what you talked about which I think is brilliant that it’s no shame to work for someone else. Working for someone else does not mean that it’s just collecting a paycheck. That’s a really, really important distinction. I think there is a culture and I’m curious what you think about this because you have a great entrepreneurial history yourself. Isn’t there’s a stigma among entrepreneurs that if you didn’t build it yourself, somehow it’s not as pure or something?
Yes. That stigma exists in the minds of people who are wantrepreneurs and watch those on Facebook do these little things where they do videos about how they spend their day and how their last launch was $200 million or $200,000 or whatever. All of that jealousy, all of that wanting to be, is aimed in the wrong direction. My advice is you turn Facebook off and you focus on the things that make customers happy. Focus on the one incredible service that you can deliver above and beyond what others can do and deliver it, deliver it, deliver it. Get even better at it. Eventually, you’ll be able to charge enough to go off and do it on your own. When I started my little software company with my programmer and myself in a garage, we grew that company to 100 people and $10 million in revenue. The truth is there was no Facebook. In fact, there was no internet. It’s the internet that makes people feel less than and inferior by watching these false entrepreneurs do their stuff in front of them when, in my opinion, a lot of it isn’t even real.
Here we are, Brian. We’ve had this conversation and the thing that I want to provide, the reason that we’re on this phone call together is to help entrepreneurs. You’re an expert at direct marketing. You’re an expert at being able to help companies generate revenue through direct marketing. If I’m starting out, what would be your best advice?
I have this joke with my kids, “I’m going to be on a podcast or I’m going to be doing a talk. I’m going to have to do everything I know about direct marketing in half hour or ten minutes.” Whatever the amount of time is, my kids always say it’s too long. On the other hand, we could go on for days and days about direct response marketing and all the different aspects of it. If I could get it down to some simple concepts, obviously direct marketing as opposed to just advertising or marketing is, direct marketing means it’s measurable response. It’s that everything that you do, every impression you buy or medium that you want to use to sell your product or service whether it’s Facebook, direct mail, space advertising, radio, TV, everything you do is measurable. Everything you do has a return on investment and either the list worked or it didn’t, the TV spot worked or it didn’t. You can calculate all of that. You can calculate it on the lifetime value as well. That’s just on the first year.
When I’m giving somebody advice in terms of using direct response marketing in their business, the first thing I do is I do one thing that someone who’s a mentor to both of us, Jay Abraham, says as a title of one of his books, Getting Everything You Can Out Of All You’ve Got. The concept there is that you want to assess all your assets. What do I have? What are my skill sets? Do I have an audience? Do I have a list? Do I have people who follow me? Where would I start in terms of assessing all the assets I have? Do I have products? Do I have content? Once you know what you’ve got, you look at direct response marketing in a three-part pie chart and I call it the 40-40-20 rule. What the 40-40-20 rule states is that the success of any direct marketing campaign depends 40% on your list, 40% on your offer, and 20% on your creative or the messaging. What does that mean to somebody who’s starting out? What it means is that you could have the best email letter that goes out or the best Facebook ad or whatever, but if it’s going to the wrong audience, meaning the list, with an offer that doesn’t make sense, it’s not going to go anywhere. You’ve got to have all those three things working together. The reason why it’s a 40-40-20 rule and why 20% being the creative doesn’t make it half as important as the offer and the list, what it says is that if I have this perfect letter or email or space ad that’s going out to an audience and the audience is not equipped to buy from me, the audience isn’t targeted to buy from me, I’m going to get zero sales.
However, the opposite, if the list is perfectly suited for whatever you’re selling but your promotion stinks and your offer is not the best it could be, chances are you’re still going to make a little money because the targeting of the list is so important. I sometimes say, “When 41% is a majority, I put the list at 41%, the offer at 39% and the creative at 20% because I think you want to focus on the list.” You want to focus on the audience. You want to focus on who is the market for what I’m doing?
The other piece of advice I would give anybody going out on their own if they’re thinking about doing something to market it and everybody should be into marketing, I would say, “Marketing isn’t everything. It’s the only thing.” Without marketing, you can’t get out to people. You can’t get your mission or vision out to the world. You need to understand that finding the right audience is way more important than the whiz-bang thing that you’ll do on Facebook or the ad that you’ll create or the copy that you’ll write or the free offer that you’ll make. The most important thing is finding an audience who we call your avatar, finding the audience for what you’re doing.
The biggest piece of advice I could give to anybody is to niche down, specialize as much as possible based on your skill set, based on assessing your assets, and when you get that narrow niche set up, “How do I find people that look like people that have either bought from me before or I think would be my ideal buyer?” It doesn’t have to be a big list when you’re starting out. The idea is picture a reverse funnel with the narrow end of the funnel being what you’re focused on going narrow to wide. Really focusing on a very narrow niche, finding those people where they live, where they buy, how they behave, what forums they hang out in. One of the first steps I would do is once I identify my ideal customer or potential customer is, I would find out what books they read or types of books they read and go look on Amazon and see what the reviews say of those books so I could see what kind of language they use. I would go into forums on Facebook where the people that I know are my potential customers hang out. How do they talk? What do they need? What are their pain points?
I’m going all over the place here in some ways, but I’m really focused on a couple of big things which is, it’s all about your audience, it’s all about the niche that you create, and it’s also all about your passion. If you’re not going to work in something that you’re incredibly passionate about, you might as well go off and do something else. It just doesn’t make sense to be spending a lot of time and effort in areas that aren’t as rewarding and part of what you want to do in the world, the biggest impact you want to make. I don’t know if I answered your question because I can’t do direct response marketing in a podcast or even in three days of training, but I can tell you that being really, really focused on your passion, your niche, focus on the list before creative, those are some real quick key things that I think you really want to focus on.
First of all, coming from you, that advice basically is about 30 years of knowledge. I think that you suffered through having to figure this out over the course of all these years. You said that for most people it’s the list. I think once again, you’re saying it with everything you just explained. Here’s the dilemma. Many people who want to start a business or who are just starting in a business don’t really have a list. They might be able to go into forums and maybe even scrape a few names here and there, but ultimately they’re going to need to start somewhere to build that list. The way I did it back before there was an internet, I did it by forming joint ventures. I had joint ventures with other software companies who were in adjacent markets. For example, I sold time and billing software which was a form of receivables accounting software for lawyers. I found people who offered accounting software and offered to bundle my software in with theirs. That’s how I began to build my own list. Does that make sense to you?
It makes absolute sense. There’s a lot of different ways to skin the whole list building piece. As you said, having the internet to use for good as opposed to evil I think is something that everybody should understand. The idea of giving away what we would call an ethical bribe, meaning that giving away content so people then opt in to your list so that you start building a list based on something you give away of value, is exactly what I do all day long for the most part in terms of building my list today. In fact, this podcast is in them.
You don’t have to, but I’m assuming at the end of this podcast you’re going to ask me, “Brian, if anybody wants to hear more from you or they want to listen to another one of your interviews on a different topic or they want to receive your weekly blog every Sunday morning, how do they do that?” Then I’m going to give you a web address where they’d go and they opt in. In exchange for giving me their email address which I’m not going to abuse, I’m not going to spam, I’m not going to sell stuff to them that they don’t want, they’re going to get access to another interview, a piece of content in one page like that we call it an opt-in page or a squeeze page. I’d give away an incredible amount of marketing and advertising gems like assets, PDFs of classic books, and special reports in exchange for them giving me their email address. To me, that’s one of the best ways to build a list today if you’re in an environment where you want to create a community for yourself.
In my day in direct mail, the list building was more about getting that first sale. We had to offer subscription offers what we call soft offers where you would get to get three or six free issues before we’d even ask you to pay us. You get a lot of free issues before you get the bill, so to speak. When people are doing online launches today, they get people to opt in. They may never buy but the list gets built very quickly because they’re giving away a lot of free content to get people to sign up for the launch list. It was the same with us in direct mail. Getting people to sign up, getting a free trial, hoping that 30% of the people might end up paying for the subscription, the other 70% may or may not be good names but at least you’re doing some list building. Maybe they’ll buy a different product or maybe they’ll do something else with you in the future or maybe you create a different community of the people that you gave the free offer to who didn’t buy the product that you tried to sell them but you try to sell them a different product that might be more applicable to them based on research that you do on that list.
Everything comes down to creating that audience, creating that list. You can do it in direct mail. You can do it online. You can do it through radio ads, you have a lot of experience with that. I think that there’s a lot of ways to skin it and then it becomes the degree of the quality of the list. Someone who listens to me on a podcast and then wants more of me, they would then go to my site. Those people are actually much better prospects for me in the future to do business with in some way because they’re actually interested in what I have to offer. Whereas someone who listens to my podcast and doesn’t opt in, I’m never going to hear from them again, but they probably weren’t that interested anyway.
For many of us, the purpose of the podcast is to let people get to know us. In your case, I think you’re easy to get to know. You have a fantastic website. What’s the web address again?
It’s pretty modest actually. It’s BrianKurtz.me. I have a bunch of content there, different interviews and articles I’ve written. It’s got a thing at the top. I think it says something like, “How I built a nine million name database without the internet,” which talks about all of my direct mail experience. It’s an interview I did a few years ago which still holds up and people have to put their name and email in and they opt in to my list and that’s that.
My other one is interesting. I have another site called TheLegendsBook.com. At TheLegendsBook.com, you go there and it’s basically telling people about the book I wrote called The Advertising Solution which is a profile of six legends of advertising, classic guys. David Ogilvy, the father of advertising, Claude Hopkins, Gene Schwartz, Gary Halbert; just amazing guys. What I did was I set up a site called TheLegendsBook.com and you go there, and it says, “First step, go buy the book The Advertising Solution.” That’d give you a button. You go to Amazon or Barnes & Noble, wherever you want to go. The book is like $12. I don’t make a penny on it. Once you come back to the site, you send your receipt that you’ve bought the book, and then for your email address again, you get access to 150 pages of the best ads these six legends ever wrote. You get videos of three of the legends. I think one of them is David Ogilvy on The David Letterman Show and all these different training videos from Gary Halbert and Gene Schwartz who were great copywriters. Then there’s a download of a PDF of Scientific Advertising by Claude Hopkins, again one of the legends in the book, which is one of the most important books ever written. You get a whole PDF of the book, an illustrated, annotated version. You get all that stuff for free just for giving an email address and buying a $12 book. Think about it, the person who would opt in for all of that stuff is someone who I want in my community, someone who I want in my tribe. They’re actually interested in the stuff that I’m interested in and the stuff that I’m interested in teaching. They actually put $12 down to buy a book which makes them even more qualified.
One of the rules of thumb in direct marketing is what we call RFM. What RFM stands for is recency, frequency, and monetary value. You can see what’s going on here. Someone who opts in on there is recent. They just did it. The soonest they opt in, they’re more valuable than six months from now. If they opt in and then respond to me, to one of my blog posts, that gives them frequency. Now, they’re not only on my list but they’re engaging with me. Then, lo and behold, if they bought that book for $12 or they buy another book from me down the road or I create some educational material that they buy, now they spent money with me. Someone who’s recent, frequent, and spent money is going to be the most valuable than someone who is not recent, not frequent, and spends no money. I know that sounds so simple but the most sophisticated modeling techniques, I’m talking about on hundreds of millions of names that are done in direct marketing, what we used to do in direct mail when we used to mail millions of names at a time, all the modeling was all statistical models based on recency, frequency, and monetary value.
It’s a very simple concept. In fact, I did a blog post about it because I wanted people to realize that what seems complicated when you’re mailing millions of names is the same principle when you’re mailing dozens of names. There’s not a lot of big, deep, dark secrets about all this. Human behavior is human behavior. People have behaved this way since the beginning of time, and now we just have a lot more technological tools to help us with all of that. There’s a lot there. I know you just asked me for my website, but it was bigger than that because it’s all about the list building process and how we look at our potential customers, the potential tribe that we’re building, the community that we want to build. One of my favorite expressions that I use all the time is that, “Everything is not a revenue event, but everything is a relationship event.”
The RFM concept, the recency, frequency, and monetary is such a universal in direct marketing. It actually ties in completely into human behavior. I wasn’t trying to be all that complex here in describing all of this. The piece that I wanted to make sure we got to was that the quote I have was, ”Everything is not a revenue event, but everything is a relationship event.” The revenue is going to come if you’ve developed the right relationship with people. There are a lot of people in the internet marketing world today that will go for the jugular right away, “I got to sell, sell, sell so I can pay for it.” Meanwhile, the cost of doing email is so cheap. There’s no reason to rush into the selling process. You’ve got a lot of time once you’re doing this list building process that we talked about before. You develop that relationship over time and people will be begging to buy from you because they’re going to be in love with what you’re delivering to them. That’s what the beauty is of online.
I think the wisdom here is the part that you described about slowing down. Stop being in such a rush to make dollar one and build that relationship over time instead. That is the biggest payoff of all. I think you hit the nail right on the head with that one and that’s great.
Brian, I think you’ve dropped some incredible knowledge here on listeners and I appreciate it. I just have to ask you, if somebody was in a position where they really understood who their client was, and they’re really at the beginning stages of delivering a great service, and they really feel as if they have their avatar to the point where they could describe for the most part who their ideal customer is, and they want to build this list tactically, where would you send them to start building that first list?
There are so many different angles on this. If they wanted to get the real basics, there’s a book that I have the rights to called Secrets of Successful Direct Mail which is old school in terms of direct mail, not the internet, but there’s so much in there about list building and all that. In the current, I think that Jeff Walker’s Product Launch Formula has a module on list building. I know that the stuff that Ryan Levesque is doing with his Ask Method also have a lot on list building. I assume Russell Brunson who does something called ClickFunnels, this is list building in the internet world.
I don’t know that there’s one place to go. I think you’ve got to attend certain marketing events. There’s Traffic & Conversion Summit which is run by a guy named Ryan Deiss on the West Coast every year. I don’t know if I can answer that question easily if there’s one place to go or one book to read. There’s no internet marketing made easy. The six legends that I profile in my book, none of them worked on the internet and yet the basics of how you look at your audience and how you approach your audience is paramount to what everything that they did. Even though a lot of them wrote copy, they were writers and yet they understood that if they were writing to the wrong audience, they had no chance. There is what I would call a more advanced book on this whole idea of audience and creating desire in the marketplace. It’s a classic book called Breakthrough Advertising written by Eugene Schwartz. Gene Schwartz was one of my mentors. The book was at print. I think copies on Amazon are $300 or $400. New copies are probably over $500. I just reprinted the book. I’m not selling here but I got the rights to the book with Gene’s wife. If people went to BreakthroughAdvertisingBook.com, they can buy it. I think it’s $125.
The mass desire is out there for whatever you’re doing. How you harness it is the most important thing. I do know that Breakthrough Advertising is probably the most important book ever written on this topic, but it is a bit advanced. Maybe something like Victor Schwab which has a book called How to Write a Good Advertisement might be closer to what a novice might take. My book, The Advertising Solution, is a book that at least gets you the fundamentals which I think is important here too.
Ultimately, you’ve got to start with learning. I think that’s what you’re promoting here. Go learn. Learn how to do things. Tell me the name of your book again.
It’s called The Advertising Solution but I think if people want to buy it, they should go to TheLegendsBook.com to buy it. There’s a button there, it opens up a new window in Amazon or Barnes & Noble for you to buy the book. They key there is all the bonuses because you’ll get even more information in terms of what we call swipe files which are great ads written by these great advertising men which are really, really helpful when you start looking at how people formulate an ad, how they write headlines, all of that. There’s a lot in the book about how to do that, but then you’ll see exact examples in the swipe file that’s free at TheLegendsBook.com, plus those videos I told you about, plus the PDF of another book, Scientific Advertising which is a must-read for anybody who wants to learn about this stuff. There are actually some special reports that my co-author Craig Simpson put together again on fundamentals of marketing and writing copy and creating offers and all of that stuff.
Brian Kurtz, the master of direct response advertising, list building, and copying, thank you so much for the time you spent with me. It’s been such a pleasure getting to know you. Thank you for your generosity and sharing this with my listeners. Brian, thanks again. Take care. Have a great day. We’ll talk again soon.
Thank you and thank you for doing what you do for your audience.
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