80_20 Sales and Marketing with Perry Marshal – ep 103

Mostafa Hosseini  00:03

Hello and welcome. In this episode, you will discover what is the 8020 rule? How does the 8020 rule apply to sales and marketing? What is testing and why it can impact impact your results exponentially, and you will watch me get exposed and coached by Perry Marshall. Today we’re talking about the 8020 of sales and marketing. And my guest is Perry Marshall. Welcome Perry.

Perry Marshall  00:32

Good to be here. Thanks,

Mostafa Hosseini  00:34

John. Great to have you. And as usual, if you’re watching or listening, please make sure to like and subscribe to the show. If you have any questions as we’re talking. This is the today’s topic is extremely important. And it actually can move the needle for your business and make a massive impact for your business. I know it has done it for me.

And we’ve got to dive deep into the 8020 principle. So if you have any questions about that and how to apply it posted as a comment, and we’re going to do our best to address your questions. Now let me do the proper introduction to Perry and we’re going to dive into a very interesting conversation. Perry Marshall is one of the most expensive business strategies in the world. He is endorsed in Forbes and Inc Magazine and, and has authored eight books at London’s Royal Society.

He announced the world’s largest science research challenge, the $10 million evolution 2.0 price. His reinvention of the Pareto Principle is published in Harvard Business Review. And his Google Book, let les laid the foundations for the 100 billion pay per click in the stream. Perry has a degree in engineering and lives and with his family in Chicago. Perry welcome again.

Perry Marshall  01:56

It’d be here.

Mostafa Hosseini  01:57

What’s the weather like in Chicago right now?

Perry Marshall  02:00

It’s raining hard. So I guess the grass must be very happy right now.

Mostafa Hosseini  02:05

Absolutely. We got like it was pouring rain. The other day in Calgary up here. It was like, it was like a hose. It was scary. Too much too much water. But I was happy. Like you were saying the the grass was happy. So Perry, let’s get started. What is your story?

Perry Marshall  02:23

Well, I’m the guy who got laid off from his engineering job when wife was three months pregnant, and was forced to go into sales. Really, if I was going to replace my salary and not have to move, I had to take a risk. And so all of a sudden, I’m pounding the phone book and pounding the pavement and trying to get people to let me in the door and showing my stuff and driving all over the Chicago area, putting together sales appointments.

And it was a whole lot of baloney sandwiches and ramen soup and struggle, and rejection. And eventually, I got fired from that job after two years because it wasn’t working out. But just before I got fired, I discovered direct marketing, like copywriting and direct response advertising and stuff like that. And this was just a little bit before the internet started to take off. And, and I got very intrigued by this. My current employer was not interested in using any of that kind of stuff. But I got fired, and I landed a job at another company and they had a website.

And I realized without anybody even telling me, hey, you know, like all this stuff that I’m reading about in these newsletters in these courses about direct mail letters and stuff, it’s almost as exact same as a website, like, visiting a website is exactly the same as like opening a letter, like a piece of paper and I got to get somebody’s attention, I got a engage in them in a story. I got to get them to do something. And so I understood this and, and then I started chiseling away.

And four years later, we had grown that business about 20x. And we sold the company to a public firm for $18 million. And I got some stock options out of the deal. And I hung out my shingle, and I said to myself, Well, dude, you’re sort of good at this marketing stuff. You’re not fantastic, but you’re at least good enough to sell industrial equipment. What if you actually got really good did this and, and then I got really serious.

And that’s the short version of how an engineer turned into a marketing consultant because I hung up my shingle after that, and started doing consulting work. And now here we are.

Mostafa Hosseini  05:17

Love it. That’s quite as very, very interesting. And looks like you went through a lot.

Perry Marshall  05:24

Yeah, yeah. And I was in Amway, and I was drinking the pink Kool Aid, and I was drying circles. And I, like all I knew for a long time was was a piece of very bad advice. Massive Action solves every problem. That is like so not true. Massive Action, mostly just creates more problems, it doesn’t solve them. And massive action done in the wrong place in the wrong way, will make you very broke really fast.

And, and I learned that the hard way. In fact, 20 sales in marketing is the book I wish somebody would have given me when I was 25. And clueless, and it would have helped me figure out, there’s only certain kinds of sales and marketing jobs that you should take, because of your unique personality. And that’s the marketing DNA test, I would have understood that. A whole bunch of stuff that I was trying to sell, I shouldn’t even try to sell, because it did not have a unique selling proposition.

There were six or eight other companies that mean, pretty much the same thing. And, you know, sometimes in your youthful optimism, you think, Oh, well, that shouldn’t matter. Like, maybe they’ll like me, or maybe I can give them a lower price. Or, like, you convince yourselves all these reasons why well, I could probably make this work.

And you try doing a lot of things that are frankly, impossible. And then you just beat you’re like, you just imagine just pounding your nose against the brick wall like that brick wall behind you. Mustapha, just just three pounding your nose against that thing until it gives way man, like, you know, how long is your nose gonna last? And how long is that wall? gonna last?

Mostafa Hosseini  07:15

I got a big nose. So probably gonna last me Wow.

Mostafa Hosseini  07:22

Love it. Oh, yeah, you know, I that’s one of my other wishes, as well as like, I wish I would have learned at Coin principle back when I was 20, it would have made a massive difference for me. So what do you do these days? And who do you serve? Well,

Perry Marshall  07:37

who I serve these days is, is typically an entrepreneur has somewhere between 500,000 and $5 million revenue. And they are not afraid to, to take a machete to their existing assumptions, and try some new things and take some risks. I’ve worked with people in every industry you can imagine. I mean, from from banks, to software to health care to I mean, you name it. And what most of my clients have in common is that I think there’s three stages to mature entrepreneurship.

The first stage is when you’re kind of clueless, and you’re just scrapping, and you’re doing anything that will make a buck, and you don’t really know who you are, and you don’t really understand the world. And it may or may not be working at all. Okay? The first step. The second step is when you actually figure out some things that work. And you get a business going, and it may, in fact, be a very successful business. But you’re still focused on the business, like make the business, the business, the business, the business. I think the third step of entrepreneurship is where you you’ve got the business thing figured out, more or less.

And now you’re trying to figure out what contribution am I going to make for the world? Or what am I going to do that I would find really meaningful, and not just punching the clock or collecting a check? And, you know, for some people, it might be, well, they want they want to write a book, or they want to share their wisdom or they want to change their industry somehow or another.

For other people. It may be some huge thing, like I’m going to cure cancer or, you know, I’m going to solve poverty or something. But I think most of my clients are people that are somewhere between stage two and stage three.

Mostafa Hosseini  09:50

Love it. Love it. Love it. So let’s dive into it. What is the 8020 rule?

Perry Marshall  09:55

Well, the 8020 rule first of all, is one of the most important things that you can never learned, because it has the most basic law of cause and effect. And I had no idea how powerful this was or how important it was. Even though I had heard of it, I think most people have heard of 8020. Most people have heard of the Pareto Principle. Most people probably heard some story about the Italian economist that said, hey, 20% of the people own 80% of the real estate and 80% of the people own 20% of the real estate.

So, gee, that means the haves have 16 times more stuff than the have nots. And he was right about that. And maybe some people have also heard Well, that’s true of your customers, too, that 80% of your sales come from 20% of your customers, I hope that you’ve at least heard that somewhere. And I’d heard that. But there’s a whole layers and layers to it that I did not understand at all. The first thing that I did not understand is, this is not just a rule of thumb, that’s about real estate, or economics, or sales figures. It’s actually everything.

Like it’s the size of craters on the moon, it’s the size of asteroids and stars. It’s it’s the traffic on the roads in the town that you live in 80% of the cars are on 20% of the roads, but then, and on and on like rabbit populations, and just about every spreadsheet that you ever make in a business, the columns are at 20, and most people don’t even notice. But then there’s another. So that’s a big deal. That just what I said right there. Like, you could probably spend one whole semester in college just absorbing what I just said. But then there’s another layer to it, which is 8020 is fractal in what that means.

Fractal means pattern inside a pattern inside a pattern inside a pattern. There’s an 8020 Inside every 8020. So not only do the 20% of the roads, carry 80% of the cars, but 20% of 20% of the roads carry 80% of 80% of cars, and 20 of the 20 of the 20 carry 80 of the 8080. So that that means that 1% of the roads carry 50% of the cars. Now think about it. Well, the expressways, the interstates the really busy streets, yes, they have almost all the cars, right.

And then you have the little residential neighborhoods where one car drives by every 30 minutes. And so this is absolutely everywhere. When you bring this into business, what it means is, it means half of what you do is almost a complete waste of time. Like half of what you do on polishes, almost nothing. And 1% of what you do accomplishes half of everything you get. So if you’re a salesperson on commission, half of your income last year you earned in five days. Think about it. Well, where did half of your income come from?

Well, if you’d like charted out, well, the biggest the biggest deal was this one. And then the second biggest was, Well, how long did it actually take you to get that number? What how long did you actually work on that? And then number two, how much did you actually work on that like? Well, most of your income came in 20 to 40 hours of work that you did last year scattered around.

But like there was a major hit in April, there was a major hit in August, there was a major thing in November, and most of the rest of the year was filler. And this is how it is for everybody. And the funny thing is, most education trains people to not notice this. So you need to get straight A’s. What does that mean? You have to be equally good at everything.

You need all the boxes? Well wait a minute. If there’s 20 boxes to check, I guarantee you that two of them are more important than the other 18 put together. If you if you stop and think about what is the impact of checking this box? Well one of them is like well, I got to scribble a note to this, this very insignificant person, right? And then the other one is I need to make a phone call to a CEO. And on a piece of paper they look equal but there anything but equal?

Mostafa Hosseini  15:02

Perry, you you mentioned that yet 50% of things that we do don’t produce any results. Do you have some examples of what those could look like? Well, people are watching.

Perry Marshall  15:14

So there’s this very interesting rule that my friend Lynn Bernstein came up with, and he calls it the 2120 rule. And he’s, it says that 120% of your profit comes from 20% of your business. So think of it like, you’ve got the best business, you know, the really good stuff, and then you got, like the medium stuff, and you got the negative stuff, he says, the very best 20% of your business made last year it made 120% of your income.

And then the bottom 20% of your business lost 20% And it brought your 120 down to 100. In other words, 20% of what you’re doing makes a lot of money 60% of what you’re doing pays the light bill. And 20% of what you’re doing actually loses money, you’re going backwards, you would make more money if you did not ship that product, because you don’t realize it but you lose money on every shipment, because you tape $1 Bill to every box, you lose money on that client because your employees hate them. And it increases your turnover.

And you spend time hiring people to replace the ones that your client drove away. And then you find out you don’t actually make money on that client, because they they negotiated really hard and they they chewed the margins down to nothing. And you’re actually you’re not even making money, you may you may be losing money serving that client. So

Mostafa Hosseini  16:57

what’s, what’s an action item for someone that is listening or watching. And like you said, a lot of people know about the Pareto principle, but they don’t know what to do with it, and they don’t apply it. So in that case, where they’re losing money on that customer or on that product, what should they specifically do to fix it?

Perry Marshall  17:13

So you, you should fire a client,

Mostafa Hosseini  17:15

okay,

Perry Marshall  17:16

and you know who they are. You don’t like them, they don’t particularly like you. Or maybe you’re all enmeshed in emotionally entangled with them, and like, it’s not doing you any good, right? And like, send him a letter, or send him an email or call them and say, Hey, we had a board of directors meeting. And, you know, we’re changing direction, and we we just can’t serve as many clients anymore. And starting September 1, we’re, we can’t handle your account anymore.

When you get up in front of a whole roomful of CPAs, I was at a certified public accountant conference, and I was the keynote speaker, which is pretty interesting, because I’m like, the furthest thing from an accountant that you could ever have. But I said, How many of you, you have that client who, like they show up on April 13? Okay, we only got two days to go. And like they got like giant shoe boxes full of all this stuff, right?

And they send you all these emails, and they all these phone calls, and they’re upset and like, Oh, you got to do this right away. And they only pay $300. And they make your life miserable. And how many of you, like you know, this client? And all these hands go out. And I said, I, Barry Marshall, Best Selling Author, give you permission to send all those people a letter?

I’m sorry, Mr. Jones, but we can’t handle your business next year. Here’s a list of other accounts that you can call in. Because why are you doing 15 hours of work to make $300 for somebody who drives you crazy, right? Do it right. So discontinue a client discontinue a product? Or how about you can’t bring yourself to discontinue the product? Because it’s the first one you came out with? You’re only attached to it. There’s customers they couldn’t get it somewhere else.

 Okay, double the price, triple price if they can’t get it anywhere else, like send them a letter, I’m sorry, are you know pandemic inflation, whatever, like expenses went up, and it’s going for 125 bucks a unit to 225 effective November 1, right and you just fix that problem. And it at 20 is about what you say no to. So from an ad 20 lens sales and marketing is not a convincing people process. It is a disqualification. process? Who should I not sell to? Who should I not give a presentation to? Who should I not call?

Mostafa Hosseini  20:13

I’ve ever seen. And so yeah, it’s a matter of I guess, being selective. I don’t want to work with these people. Like, actually, I have my own example. Like a month ago, I was talking to a prospect. And I’m talking to them, and they start reacting weirdly to my questions. And they’re like, Oh, don’t ask me these kind of weird questions. And don’t say this. Don’t say that. And I’m like, I need to get out of here. Starting like this, I can guarantee you I’m going to have headaches later.

So I got out, I so what I did is I did not budge on the price at all, he started asking for a discount, I was like, not gonna happen. There’s a goal, I’m gonna go somewhere else. I’m like, Well, alright, you do it. So just clarifying question on that. So we made most of our money on five days last year, does that mean that I need to work five days moving forward?

Perry Marshall  21:09

Well, that’s probably not realistic. Most of the time, it’s not. However, what it does tell you is that if you if you look at most of what you did last year, and you compare it to the stuff that actually made the needle move, there’s a whole bunch of stuff that you convinced yourself or somebody convinced you is productive, and it’s not. It’s not like, none of the leads that we got from that trade show ever turned in any dollars. Yeah, somebody needs to notice that. And guess what, everybody that was referred to us by Joe, turn in Great point. And you pay attention to these things, and you have permission to not think of things as equal.

In fact, not only do you not think of as equal, you know, in advance, before anything ever happens, it’s going to be ridiculously unequal. If you hire 10, salespeople, you know, before you hire any of them, that two of them are out gonna sell the other eight. And, and so now you think about it differently, you go in at 20, sales manager is never going to try to fix the other eight, maybe it’s two or three of them. But it should probably just fire the other four or five. Now, this changes the way you approach the whole situation. Because the way most people approach hiring and getting hired, is they have this idea like, well, this is like a lifelong thing, or this is like gonna last a really long time.

Or like, this is a major commitment. If you’re hiring 10 salespeople, you should hire them on a basis that says, hey, we’re gonna try it out for two weeks, and we’re gonna see how things work out. And odds are 50% that you’re not going to work out. And if you don’t work out, it’s no big, shameful, awful thing on either of our parts. It just means it’s not a match. And you can leave and I can leave. Yep. Right? It’s like, Hey, dude, it’s okay. Now, I expect you to perform.

And if you don’t, I’ll show you the door. But, but it’s not like, Oh, we’re going to interview these people for 12 weeks, and then we’re finally going to make this agonizing decision. And then we’re going to have this expectation that they’re going to be around for the next 10 years. No, like, hiring should be an audition, not an interview. If you wanted a bass player, would you invite him over and just talk about bass guitars for two hours? No, like, I want to see you play something.

Right. So like with hiring, like right now is not a easy time to be hiring people. Because because the demand is high. Well, why don’t you make it easier by by saying, Well, you know, we auditioned our employees for five days, like get yourself in here and pick up the phone or, you know, or pick up the computer or whatever, and go, and like next, next, next, next next.

Mostafa Hosseini  24:29

Thing bring people in and it’s a it’s a auditioning process versus a hiring process. Yeah. Performance.

Perry Marshall  24:36

Most people talk, right? Like, no, let me see what you do. Right? Or if you’re gonna hire any kind of an administrative person or a support person, bring him in for a day. I want you to help me clean up these files. I want you to can you do this filing can you do this data entry? Can you do this? Like I only need you for For two days, and and I’ll let you know at the by noon the second day if I’m going to need you more, right? And this one lady comes in, she does a fantastic job.

You’re like, can I just hire you right now? Right, yeah, but three fourths of them, they’re not going to do a very good job. They lie on their resume, they tell you a great story. It’s not even true. Well, if you don’t actually hire them, then you don’t have unemployment, all this kind of federal bureaucracy. Huh?

Mostafa Hosseini  25:35

Yeah, I like that idea of getting get a good feel for what they can actually do versus what they claim or say,

Perry Marshall  25:43

right? We’re not even self aware enough to really tell you what they’re good at, or what they’re not like, you need to watch them.

Mostafa Hosseini  25:55

100%. So let’s talk about how 8020 principle applies to sales and marketing. So

Perry Marshall  26:02

my favorite 8020 story is my friend John Pullman doccia was 17 years old, Denver, Colorado, dropped out of high school, hitchhiked to Las Vegas, and became a professional gambler. And his mother was thrilled, absolutely thrilled. Oh, this is, this is what I want my son to be doing. But that’s what he did. So he’s in Vegas, and he is playing poker for a living. And after a few weeks of this, he’s going this is a lot harder than I thought it was gonna be. And he’s got his fake ID and he’s going in and out of casinos.

Well, he goes to a gambling bookstore, and he’s looking around for better gambling bucks. And he bumps into this guy named Rob. And Rob runs a professional gambling ring. Hey, Rob, do you think you can teach me how to play better game of poker? Well done. For a percentage of your winnings. I could teach you how to play better poker. Okay, so they shake hands. Jim, and then Gee, John, we’re going for a ride. Okay. They’re going down the highway in the jeep.

Rob, how do I win more poker games. And Rob says, you win more poker games by playing people who are going to lose. You don’t want other professional poker players. You want some kid from Wichita who got 5000 bucks from his grandmother, and he’s going to lost wages to get rich. That’s who you want. He goes, where do I find that guy? And Rob goes here, I’ll show you. And he pulls into a parking lot of a strip club. And they go into the strip club. And Rob sits John down at a table. And there’s, you know, all these dancing and music and biker dudes and everything in there. Rob pulls a sawed off shotgun out of his jacket, which he carried everywhere he went, like this is the kind of gambling you know, guy that we’re dealing with here. pulls out a sawed off shotgun, hold it under the table opens the chamber slams it shut.

So it goes. And John looks around like a couple of biker dudes are like, Hey, where did that where that sound come from? Right? And, and the owner of the kiss of the club comes over and he goes, Hey, what’s going on over here? It’s okay. Just teaching the latter lesson. not causing any trouble. John. Did you see those bikers who turned around when they heard that noise? Yeah. Don’t play poker with them. Because they’re not marks. You play poker with everybody else. That is called racking the shotgun. He eliminated the 20% of people in the room who had 80% of the street smarts.

Mostafa Hosseini  29:24

All the winners, he identified them and said don’t go with these guys. Yes, those

Perry Marshall  29:30

guys know how to play poker. And those guys know how to gamble. Those guys are risk takers. Okay, that kid over there with a blonde hair from which tie he didn’t hear a thing. You get that guy? You play with that guy? Okay, now everything you do in sales and marketing is racking the shotgun. Did they subscribe to the magazine or not rack the shotgun? Did they donate to the charity or not? Rack the shot. Good. Did they subscribe to the email or not? Did they open the email or not?

Did they click on the link or not? Did they sign up for the webinar or not? Did they attend the webinar? Did they buy the thing at the webinar? Did they buy? The second thing did they buy? The third thing is rack the shotgun, right. And every one of those is an 8020 elimination event. Right? You start out with 1000 people, and you end up with like three people, they’ll spend $10,000 each. That is how marketing works. It works on very small numbers of people.

People think it’s all about having a million followers, or a million fans or a million YouTube. No, no, in fact, a lot of those people are broke. They make no 100th of a penny, every you know, every or something. Right? Whereas, okay, the guy that needs open heart surgery, like he’ll spend $60,000, like that.

Mostafa Hosseini  31:11

Absolutely. Very, so. So I guess we’re looking for people that are showing reacting to a message, you already have taken action of some sort somewhere, maybe they clicked on an ad or clicked on a Google link, visited your website, like you said, attended a webinar. And those guys are a lot more likely to take action and be a customer and do something versus the average Joe on the street debt. We have no clue who they are, what they do and the rest of it.

Perry Marshall  31:50

Right. Right. Right. It’s all about small numbers of people taking action. It’s about watching what they do. So in marketing, there’s a same a buyer is a buyer is a buyer. And what that means is there’s people who buy stuff, and there’s people and there’s a whole bunch of other people they don’t. There’s people who buy this kind of stuff. And then there’s everybody else who doesn’t buy this kind of stuff. Like there’s people who buy shotguns, and you know, what, if they buy shotguns they probably have more than one. And if they don’t have a shotgun, there’s probably not anything you can say to get them to buy a shotgun.

Mostafa Hosseini  32:33

Right? Yeah. Before they’re a lot more likely to do it again, or if they have shown interest. But if someone is acting anti gun, person, you’re not going to have a good time. Oh, no, it’s

Perry Marshall  32:47

not what they do. It’s so this applies to everything. So I went to a seminar I use a lot when I speak crowds. i You go, everybody who own who is wearing shoes stand up. And then I go, okay, sit down. If you own less than five pair of shoes, and then a bunch of people sit down. And then I say, if you have less than 10 shoes down, and then a whole bunch of people sit down and I go 20 And then I go 40. And then I go ed, and I go 260 You know most of the time, I get up to 80. And there’s still quite a few people standing up in the room.

The most average guy was 800 There was one person in the room and wet 800 pairs of shoes. And there’s always Oh no, there are women who like shoes that are not you makers, not retailers or anything like that. Almost all the time, there’s at least a couple of women who have more than 100 pairs of shoes. Owner’s shoes, is 8020 20% of the people own 80% of the shoes, and 20 of 20% own 80% of 80. So in any room 5% of the people own two thirds of the shoes.

Anywhere. If you go to a restaurant tonight, I guarantee you that in that restaurant, 5% of the people own two thirds of the shoes. It’s a lot of nature. It’s human behavior. It’s Facebook, its Google accounts, its podcast downloads, it’s the size of craters on the moon. It’s all at 20 and they never taught you this in school. And so I predict 100 People are going to visit my website and I know that 80% of the action is going to come from 20 of those people. So who are they?

Mostafa Hosseini  34:53

100%. So, in your sales and marketing we have let’s say lead gen ERATION lead conversion, and that whole funnel, right? What is your what? Like, what is the 8020 in marketing like the nested ad 20 in the marketing activities itself, what what portion of direct marketing and sales activities actually produce 80% of results? Well,

Perry Marshall  35:17

so there are four, I think there are four things in marketing, okay, universally traffic version, economics and ad 20. Okay, traffic, you have to get traffic, then you convert the traffic. And then when you convert the traffic, there’s collecting the money and making a profit, Traffic Conversion economics and then you reinvest the profit back into traffic, you go buy more traffic, and then you convert more traffic, and you get more money, and it goes round and round around a circle. And if it’s a profitable circle, then the company goes from zero to a million to $10 million. So

Mostafa Hosseini  36:00

out of these four steps would like one of them be responsible for most of the results? Like would say traffic be responsible for?

Perry Marshall  36:09

Well, you really have to work backwards. Really, it’s economics that drives everything. Everybody thinks of traffic. And it’s true. Like, if you don’t have traffic, nothing’s going to happen. But the way a mature marketing thinks is they go, it goes in order Traffic Conversion economics, but because I’m selling, not buying, I have to think backwards and I have to go economics conversion traffic, I have to go, what would be a great offer to put in front of these people that they would absolutely say yes to and have a high profit margin for me and high value for them.

Okay. And then you go to what what I say to a person who’s in that situation, that’s conversion. And then there’s traffic, where do I find those people. And you think that way, and all of its ad 20. So 80% of the traffic comes from 20% of the traffic sources. 80% of the conversion comes from 20% of what you say 80% of your value comes from 20% of what you sell.

And so, even though we all know that there’s a million little tiny pieces to all of this, if you know that 1% of those pieces, control 50% of everything, you know that you can ignore most of it and just focus on these little hinges that swing big doors. Hey,

Mostafa Hosseini  37:42

so once you’ve identified the right market, the group of people that have a need and have the money to buy your product. That’s like the biggest piece we have to figure out first. Yeah, and then figure out where they are like we’re in the pond, the fish are hanging out. Yes. Put the bait in. You don’t want to go in across the entire ocean. No.

And then. And it’s probably best to work with a fisherman in a situation like that. So you’re not wasting a whole bunch of bait and running out of money. Yeah. And then your increase your odds, I guess. Yeah.

Perry Marshall  38:21

So there’s a there’s a great piece of wisdom I got from John. It’s in my 8020 book, John, the, the rack, the shotgun guy, the guy that told me this story. It’s called the five power disqualifiers. And they are the five things that are always true every time anybody sells anything to anybody. Number one, they have the money. If they don’t have the money, they are not buying it. Period, end of story. That’s it. If they don’t have the money, and I know this sounds abundantly obvious, but I didn’t realize this for years. Like I somewhere in the back of my brain.

I thought if I hold hands with them long enough and sing Kumbaya, if I get them to like me, the money will somehow show up. No. So have the money. Number two, they have a bleeding neck. They have some urgent reason they are in pain. There is a situation they gotta solve it. Those people with a bleeding neck are the ones that are going to write the check. Okay. Number three, they buy into your unique selling proposition.

That’s somebody else’s Unique Selling yours. Okay, number four, they have the ability to say yes. And why is that important? There’s many, many situations when you’re selling anything that the person you’re talking to can say no, but they can’t say yes, they can stop you but But they can’t let you go forward. So if you got a husband and a wife and only the husband’s there, you’re not selling a kitchen remodel, if the wife is not there, period, there’s no point in even talking to the husband, if the wife isn’t there, right? Or in a corporate sale, you can talk to some engineer.

He could say, no, no, we don’t like your stuff. He can’t write you a check. He can’t approve the purchase order. He has to go to his boss, he has to go to the engineering manager, he has to go to the purchasing department. Well, you better know that before you ever talked to him? Do you have purchasing authority unknown? Oh, well, who should I be talking to?

Well, that would be insulting. Well, what you get a spin for hours when you finish time wasting your time and then find out that he can’t say yes, I did that. Oh, my goodness. I yours. Okay, just wasting how many times you want to drive around the Chicagoland expressways talking to engineers that can’t say yes. Can’t write a check. Does your wife like not having any rent money?

Right? Number five, it fits their overall plans. Now, if you take the five power disqualifiers have the money bleeding neck by new USB A will say yes fits through over all plans. You can eliminate 90% of what anybody would do in marketing. Because if if all five of those things are not true, you’re not going to sell?

Mostafa Hosseini  41:27

For sure. And

Perry Marshall  41:28

it narrows it narrows from 100% down to probably 5%. Most of the time, for sure.

Mostafa Hosseini  41:37

For sure. That’s what we’re with a lot of our forms and or when we get on the phone to talk to our customers and our prospects. When we’re setting appointments. We ask the qualifying question about the money piece like are you in a position to invest in your business to fix this problem? Right? And we’re asking nicely, it’s not like you have the money. It’s like, are you in a position to invest?

And if they say no, we’re like, well, would it even make sense to even have a conversation? Most of us

Perry Marshall  42:05

are too timid to just have an ask the question, because we think it’s not nice. Yeah. And that’s an illusion. Because if they, if they don’t have the ability to make decision, all you’re going to do is waste your time waste their time. We are company’s resources and never accomplished anything. And that is not doing anybody a favor.

Mostafa Hosseini  42:32

Perry, what do you have to say to people that, that they’re focusing on averages? And?

Perry Marshall  42:37

Oh, that’s a great question. So everybody is trained to think about average, right? So how many of you, you took the History test at school? And the teacher drew a bell curve, and said, Okay, 10 of you got A’s and 25, you got B’s right. And the average was 77. You realize that the average? It all is almost never what you actually want to know. Almost never.

Okay, so what do I mean by that? Well, if you said, well, the average purchase of the average customer is $143. I can promise you as an 8020. expert, that 1% of the customer spent 14,000, not 143. All is guarantee it’s true. Well, those are the ones that mattered. The top, the top 5% of your customers brought you two thirds of the money and none of those customers were average. They were all way above average, the average customers don’t even pay our bills.

Mostafa Hosseini  43:51

Yep. 100%. You know, you know what period, I read the 8020 principle back in 2017. And it almost overnight, dropped. I made a drastic change in the way I think I almost dropped my agency overnight. And I and then I started applying it to everything, every single thing. Like I opened my closet. I’m like, I’m not wearing at least half of all this crap. Right through it all up garage, same thing. Basement, same thing. Yeah. And I own a software.

It’s a WordPress plugin that does bulk spellcheck for websites. So at the time, the capacity was, it was able to scan about 10,000 pages, say in 20 minutes. Then what we did is we went and timed every function inside the software. Sure enough, 10 or 20% of this functions inside the software. We’re taking 80 or 90% of the time. Yeah, optimize, we optimize just tour The three functions, and the software speeded up like massively. Were like, wow, yeah.

And I’ve been fascinated, but like, I’ve been waiting for our conversation today forever, because it has actually impacted me. And then, like to your point, and then I’m like, people, this whole thing is so amazing, you got to know about it. Have you done it? They’re like, Yeah, I know about it, I’m like, Have you actually applied it, they’re like, it’s a great principle.

Perry Marshall  45:30

And so your story is that the software is perfect, because, because if there’s 100 steps in the software to scan a web page 2020 of the steps take 80% of the time. 100% right, and, and 5% of the steps take two thirds of the time. So that means if you take the slowest five steps, and use in you double the speed, massive, you’re scanning 20,000 pages instead of 10,000.

Mostafa Hosseini  45:59

So funny enough, we went to 50,000 pages in 90 seconds. It was it was just day and night, day and night, same thing I did when my customers, I actually looked at my customer customers, and then I sorted them by revenue per customer for the past 12 month, sure enough, 80% of sales comes from 20% of customers. Same thing with the products, like 80% of sales came from 20% of products, and so love it. So I felt my focus is on follow ups, I run a call center that specializes in follow ups.

And funny enough, the reason I got into this business is that naturally about 80% of our sales come from 20% of our existing customers are so so we we do the follow up to make sure we keep the customers. So I was gonna ask you, what do you think would be the 8020 on follow up, which is a place where a lot of people leave a lot of money on the table? And a lot of people don’t do it like the ad 2005 is like, I guess 90% of businesses don’t do follow up? Probably? Well, I

Perry Marshall  47:13

had a consultation just two hours ago with a client. And they were asking me, so it’s slightly different question. But I think it’s pretty close to what you’re asking about. They said, our salespeople have a, like, a strategy session kind of a thing with a customer. And it’s, it’s related to how they use their computers and their software security. Okay. And so they have this whole conversation. And then the customers always say, oh, geez, I just don’t have time for this.

And there’s, there’s there’s a 15 minute initial setup, and then a one hour follow up thing that they have to do for somebody to use their security, their internet security, okay. And, and they said, customers always say, oh, geez, I just don’t have the time, I’d love to do this. And I know our security is vulnerable right now. But geez, you know, I, you know, I got this client, I got this meeting and all this. And we talked through it.

And what we realized was, if the salesperson will move that first thing right into the initial sales call, like, can I just ask you a few questions that are necessary to set you up? And they they roll right into this question, they can completely skip the middle meeting. Like, it doesn’t have to be, Oh, you want to buy this great. Let’s set up. Let’s set up your onboarding session tomorrow. And then your follow up session next week. Let’s move the onboarding session to right now.

So that we don’t even have to have a follow up. Right? Like, if I got their credit card now, then they’re gonna have the, you know, the session next week, because they already committed and honestly, a lot of times, you have to kind of almost trick people into doing what’s good for them. Like in the case of this company, they do cybersecurity. And if they’re kind of client gets hacked. Oh, it’s awful.

It’s like it’s terrible. They’re going to be miserable for a month with companies and possible court cases. And all this stuff, right? Like, well, you know, if you pay us, what, $50 a month and you have the software in your computer and you write but but people people get tangled up and all well I’m too busy right now. And so I think a lot of times, we’ll how many steps can you just eliminate from the process so that you don’t have to fight uphill nearly as far? How

Mostafa Hosseini  50:10

to present. Like, funnily enough, one of the things that I do is we map out the entire process and start timing, like you said, ever. Like, sure enough, the bottlenecks take 80% of the time. And as soon as we eliminate the bottlenecks, the process just improves easily by 50. To 80%. Hmm. Very, very interesting. Can I share one thing about day 20, about what we do? No one meet when we met when when my team makes follow up calls for our customers. between 50 to 20% of people actually answered the phone. It’s like a universal law that, like you said, it works everywhere.

And you’re like back in school, we’ve been taught about this averages and not 5050. And it just, it seems like it just doesn’t exist. No,

Perry Marshall  51:03

110. think look, I think average is it’s it’s super easy to understand, but it’s almost never the most useful thing. I’ll prove it to you. If anybody knows anything about statistics, they never tell you the average income, they tell you the median income. What’s the difference? Well, the median income means half, half of the people make more than half the people they make less, the average is actually quite a bit more. So like if if the median income in the United States is let’s say it’s $75,000 a year, let’s say the average is like 110. Why?

Because the 5% that make two thirds of the money, push the average way up. Right? Okay. So like even even though most basic newspaper statistics is proof that average, like median median is very understandable. It’s like, okay, it’s much more like what most people are, do how most people are doing, right? It is useful to know that the median income is $75,000 a year. But if you want to sell something, you want to sell somebody makes 200, it’s a lot easier. They have disposable income, the $60,000 person, they don’t have any disposable income. Don’t

Mostafa Hosseini  52:28

ever say like, even if you want to work with averages probably work with the average of the top 10%. That’s probably a better average to work with. Absolutely. Right. And it’s like different ballgame.

Mostafa Hosseini  52:45

Do you have a daily routine that allows you to eliminate all the time wasting that people usually do and forget like, is there like an 8020? daily routine? Yes,

Perry Marshall  53:02

yes, there is. So it’s very counterintuitive. People think they don’t have time to do this. But it’s it’s I’ll prove to you that it’s actually very time efficient. So most people start their day like this. They wake up, they reach across their bed and they pull the devil and they begin the death scroll. Okay, and most people before they have even gotten out of bed, are already reacting to a crisis of some kind. It might be CNN, it might be whatever’s on Facebook or Tik Tok or something.

 It very well could be email, it can be very well be text messages. And literally, before their feet hit the floor. They are in reactive mode. They haven’t even noticed that somebody else is running their life. CNN, tic tock text message, email, crisis fire. I do not start my day that way. I never started my day that way. Here’s how I start my day.

Perry Marshall  54:25

I roll out of bed, I boil a cup of tea. I turn on some music and you get my notebook.

Perry Marshall  54:35

And I just write I’m not writing a book. I’m not pushing the pen. It’s like do my gratitude, do my prayer, do my spiritual centering. And then I start to ask questions like what is really important today? Like what’s on my list? But then on my List, what is the most important stuff on the list? What is the stuff that honestly, if I, if I, if you did this one thing, and that got checked off, you could totally justify taking the rest of the day off and not feel guilty. Because this can be put off for two weeks. And that can be put off till tomorrow.

But this one thing, it pays for the delegation it pays for, like, whatever. You start your day that way. Start your day by asking what am I not going to do? What am I going to delegate? What is not my responsibility? And you start with that, that will totally change your life. And this is how I have started my day, every day for nine years. Love it. I have one more thing.

Can I just if you looked at all the stuff I’m doing at Marshall dot info, which is my personal page, I’ve got world’s largest science research prize, I’ve got a cancer and evolution working group of the American Association cancer research. I was last week I was presenting at a science conference. I organized masterminds, I consult with 300 different industries, if you look at all this stuff I’m doing. Okay. And why am I so productive because I spend the first hour of my day focusing on the most important stuff not reacting to everybody’s crisis.

And I just wanted to, to insert that in there. Because people think that they’re too busy. They think all the stuff they’re doing is so important. Look, both two thirds of the stuff you’re doing is not important. Don’t kid yourself. It’s trivial. 90% of what’s going on social media has nothing to do with anything that you need to be doing right now. Nothing is just making you angry. Stop it.

Mostafa Hosseini  57:14

Does it does? It does. Perry, where can people find out more about you?

Perry Marshall  57:24

Go to sell@twenty.com and you will be able to buy at 20 Sales and Marketing for a penny plus shipping. So in the US that’s seven bucks. For seven bucks. We will ship this book to you. It’s right over my shoulder at 20 sales and marketing. Go to sell@twenty.com This book will change your life. Mr. Joffe. I think you really kind of already said this book just completely twisted your whole view of how business works. 100%

Mostafa Hosseini  57:54

I changed my life. And sell@twenty.com. So it’s s e l l 802 zero.com. That’s right. And there you’re you’re given away to book with sudden bucks, you just ship it to them? Yeah. And, oh, if there is, if there’s one book that has made a massive difference in my life, it’s this the 8020 Min. Like, if there’s one thing I wish I knew 20 years ago, when I was 20. It was this 8020. That was a good rhyme. They’re

Perry Marshall  58:35

incredibly powerful. And the more you learn how to apply it, the more you see how to apply it more. And it just keeps getting deeper and deeper and deeper. And I mean, I’ve been teaching at 20 for literally the last probably 17 or 18 years. And it just goes there’s another level and there’s another level and there’s another level. And it just keeps making the world simpler. There’s always at 20 reason why the world works the way it does.

Mostafa Hosseini  59:03

100% You know, I even created a course on what worked for me, I put it up like I talked to so many people that they’re wearing, do it like this is how you apply it. Here’s to the software, here’s to your closet, here’s to your sales, here’s to your website, and I’m sure you’ve done the same.

And I sometimes I find myself derailing from the ad 20. I’m like, and then I come back and talk to a bunch of people and then I’m like, Alright, I need to sit back and be like, what like is that? What’s the one thing I need to figure out today? What actually is the 8020? Does that ever happen to you or your routine is fixing that? Well,

Perry Marshall  59:43

I’m always asking look, there’s never just one one answer. Okay, I think it’s every day. You have to ask the question. What is the most and 20 important? 20% Because, because if you if you start you Using ad 20, and you start getting rid of the bottom 20%, what you find is the top 20 keeps going, it keeps moving up and up and up and up, and you climb to higher and higher levels.

And what’s at 22, an entry level customer service person is different than what’s the 8020 for a president of a company, which is different than the 8020 of the CEO, which is different from the 8020 of the investors, which is different than the 8020 of the customers, right? And so, but But what you always know, at every single level is that there’s a very small number of things that affect almost everything. And the rest of it isn’t terribly important, right.

And I think this can also be a source of humility, because one thing that I can tell you is that, like, it’s, it’s not even the management or the company, or the marketing as much as it’s the market. Like, Elon Musk may be a great CEO. But the most important thing about Tesla is it’s in the right market. At the right time, at the right time, that’s more important than how good of a manager Elon Musk is.

Okay. And a lot of times, like we like, you know, when when there’s, like, when there’s an economic boom, everybody thinks they’re genius. Everybody looks like a genius, everybody’s making money. Now, they’re not geniuses. They’re in the right place at the right time. But know how to be at the right place at the right time. You can look like a genius a lot more often.

Mostafa Hosseini  1:01:40

Yeah. It seems like to me like it’s a combination of a lot of ad 20s. Yes, it’s like, across the board. So I know we’re running out of time, let me ask you a couple of personal questions. And I know you have to run when I be out, right. So what’s a new thing you have tried recently? Big

Perry Marshall  1:02:01

or small? Well, a big thing that I’ve gotten involved with is cancer research. Two and a half years ago, I’ve got this evolution 2.0 project, and somebody said, Hey, we want to put together a cancer and evolution seminar in Cambridge, Massachusetts, will you help? And I said, Yes. And that has turned into a huge thing that I could have never imagined. And that kind of speaks to remember, I was saying, you know, there’s, like these three stages of entrepreneurship.

And eventually, you’re like, Well, hey, I figured out how to make a living, how do I make a difference? And, and I just want to say, I think as soon as you are in a position in your life, where you start to have a little bit bit of bandwidth to do stuff like that, you should go ahead and do it. And it will enhance your career in ways that you can’t foresee. You don’t know how the conversations and the connections and all that kind of stuff are going to feed back into your regular life.

You just need to have a certain amount of faith that they will, it will broaden you as a person. It will extend your horizons it’ll get you thinking new thoughts. It’ll get you into circles that you otherwise wouldn’t be in and frankly, your life will be a whole lot more interesting than if you just stayed in your lane. Love

Mostafa Hosseini  1:03:28

1. What are your top two favorite books of all time?

Perry Marshall  1:03:33

Well, I unquestionably the Bible, but probably a lot of people would give you that answer. I’ll give you a couple more books that I think are really extraordinary. One of them is star principle by Richard cash. He’s the guy who wrote the original 8020 book, Star principle by Richard cash is a must read for every business person. And I’ll be a little self promotional.

I think you should read my book, detox declutter dominate by myself and Robert scrib. It’s a it’s a lifestyle manual on how to execute 8020 globally in your life.

Mostafa Hosseini  1:04:16

I love it. Love it, love it. What’s one thing that have made a massive impact in your life for business?

Perry Marshall  1:04:26

My dad and my father figures. My dad died when I was 17. And he was a really fine individual. And I learned a great deal from him. And then after he was gone, I think one of the most important things is that I have always had older men in my life that I admired and learned from and made the time and space to spend time with Huge, huge.

Mostafa Hosseini  1:05:02

Love it. Last question, Perry. If you had a Facebook or a Google ad, where everyone around the globe could see, what would your message be for the people of Earth?

Perry Marshall  1:05:19

It will. I would, I would try to engage people in what I call a listening to the head office, I wrote a book called memos from the head office, which is, it’s really a book about listening to the divine. And, like, I think, many of the most brilliant ideas that have ever been had by humans, they didn’t just come up with themselves, I think they, those ideas were gifts that were given to them in the ability to listen, is the ultimate $10,000 An hour 8020 skill. I

Mostafa Hosseini  1:06:02

love it. Love it. Love it. Perry, this has been an absolutely amazing conversation, I personally learned a lot is there anything that you’d like to add that maybe we didn’t get a chance to talk about? Well,

Perry Marshall  1:06:15

I just want to encourage you know, I remember what it was like to have three kids in diapers, you know, and I’m in my early 30s, and I’m running out the front door, try not to get yogurt on my shirt. And I’m driving to work and the boss is bashing my head in and everybody’s demanding. And I’m not getting any respect. And I just got in a fight with my wife about how to load the dishwasher, which turned into World War Three.

And, and I call that the compression zone. And what I want to encourage, you know, the people that are in the compression zone, you know, maybe you’re early in your career, or you’re trying to start a business or whatever it is that you do eventually figure stuff out. And especially if you if you commit yourself to principles to learning the principles of how the world works, and really understanding how it works, instead of just learning a bunch of little hacks that may or may not work next year.

You will be amazed at how far you can get by the time you’re you know, 43 instead of 33. And it you do get to a point where people respect you and you do get to a point where you have some things figured out. It’s not all just random crap that’s being flung at you from every direction. I know it seems that way. But that’s not really how the world works. And you’ll figure it out. You just keep working on it. You’ll figure it out.

Mostafa Hosseini  1:07:49

100% love it. Gang. If you have not read or understand the 8020 principle, if you haven’t read Perry’s book, The 8020 of sales and marketing go to sell@twenty.com and they’ll ship it to you or get it on Amazon if you plan on paying more for it. You could do it that way too. but honest to God, like I’ve been in the marketing world forever, and people come up and they ask for tricks and shortcuts. If there’s one shortcut, this is it is the shortcut. Right?

And, again, I can’t say enough about it. Thank you, Perry. I really appreciate you and all your wisdom and expertise and gang if you have any questions, put them in the in a comment and we’ll do our best to get back to you. As usual. Make sure you like and subscribe to the show. If if you know someone that could benefit from what we talked about. Share the link with them or tag them in a comment. And again, pick up the book and read it. I cannot emphasize enough about how important this is.

Thank you for joining us. My name is Mostafa Hosseini. You’ve been watching and listening to daily confidence for entrepreneurs by now. Thank you

Perry Marshall  1:08:59

Mostafa.

Mostafa Hosseini  1:08:59

Thank you