spk_0:   0:01
Hi. Welcome to building a business that lasts. My name is Joo in, and I'm your host on a quest towards stories, tips and ideas that will help you grow a business without being stressed out, worn out and ready to quit. Each week I'll interview other business owners who has successfully grown businesses of all types for many years. It's my hope that these conversations will help you build a business that lasts this interview you're gonna love. I talked to Perry Marshall today. He's the author of 80 20 Sales and Marketing, Ah, book that talks about this percentage in life that really has such a drastic effect on so many things. It's really like a law of nature. Practically. We talk about an amazing amount of difficulty that he had early on in his career, but how he learned to shape that into sales and marketing in a way that has been remarkably successful. Some of the advice that he gives on this podcast, I think, is some of the best that I've had on the show. There's a section towards the middle of the inn where we talk about exactly the percentages of things to focus on about losing particular parts of clients or service is, or even team members and knowing really win toe. Let go of either a company or a service or a team member or a client really, really powerful stuff that I think you're gonna really enjoy. Before we jump into today's episode, I wanted to let you know about a special offer on my brand new book, Building a Business that last just like the podcast title. It just came out and you can grab a free copy. Today. All you've got to do is cover the cost of shipping and handling. I can't wait to get this in your hands. Go online right now and grab your copy. Just go to get Jay's book dot com. That's get Jay's book dot com, and you can get your free copy sent right out to you. So go check it out. And without any further ado, here is my interview with Perry Marshall. Hey, Perry, thanks for being on the show.

spk_1:   1:55
Thanks for having me on. It's an honor to be here, and we're going to cover a lot of really profitable and make your business last items. So I'm honored thank you for having me here.

spk_0:   2:08
Well, I'm excited cause you have consulted with tons of people all over the world and have been quoted in books all over the place and just have a wealth of knowledge. That thing's gonna be really valuable to our audience and the way before we dig intellect, you know, micro details or technical ideas and how to run a business. I'd love to just have you to share your story. Little bit of how you got where you are. And you know what your journey has been like from a

spk_1:   2:31
business perspective. So I was the engineering student, propeller head, pocket protector, geek, And, uh, when I was, uh, when I was in, uh, I just got married. I was a junior in college and I was working at a wholesale company called W W Granger, which probably lots of people have seen their warehouses around. They sell blowers and fans and air conditioners and stuff like that, and And I had this warehouse job and the boss was out of town. It was a beautiful day in May, kind of like today in it. At that company, beautiful weather usually meant nobody's calling on the phone. They did the most. Weather went most when Weather's bad or it's hotter is called And and so Tony and I, We both worked in the warehouse. We were feeling a little mischievous, and we decided to play a prank on the Omaha branch that we're all working in Lincoln, Nebraska, and Omaha is an hour away, and we would ship stuff back and forth and we would work on stuff with these guys and and joke around, and we decided to play a trick. And so Tony and I wrote up this fax and said, Dear Branch Managers, WW Granger's stock has suddenly inexplicably plummeted from $63 a shared $17 a share, and we will be closing all branches, effective Friday. We will thank you for all of your years of hard work and diligence, and we will make every effort to complete payroll for the current week. This is 1990 we we typed it up on the typewriter and we put it in the fax machine and we press send and we faxed it to Omaha, and then we waited for him to call us and say, Ha ha very funny. And they didn't. And we waited and we waited. And, you know, you don't want to call him up and ruin your joke by saying, Hey, did you get a fax? And so probably after an hour, Tony couldn't stand it anymore. And he calls up in the guy that answers, he goes, Oh, that was you. Oh, well, Brenda pulled that off the fax machine and she went into hysterics, and she started calling all her relatives and going. I worked there for 12 years and I have a job anymore. We didn't really know what to think. So we fax it to Des Moines, and then they didn't really know to think. So they faxed it to Sioux City, Iowa, and then they didn't really know two things. So they faxed it to Fort Smith, Arkansas, And, um so would you like to guess what happened when my boss came back the

spk_0:   5:36
next day? I can't imagine the ended well for you. Well,

spk_1:   5:41
that facts, we send it from the CEO, Mr Kieser. And that fax made its way all the way up to Mr Kieser on and said, Boys, you got to get rid of these guys and Tony and I both got fired. And the most fun part about that was calling my father in law. Ron, I had been married for 10 months at the time and telling my wife's dad, Hey, Ron, you wouldn't believe what just happened the other day. And you know, is I was having a conversation about the sort of thing with somebody just the other day, and I sort of realized, You know, Father in Law's probably should be a little slow to judge sons and why, when they're still in their twenties. No, they're still slamming around through the pinball machine of life at that point. And okay, so that waas a pivotal event in my wife and because here's why. So this really messed me up. Okay, It's kind of funny and all of that, but it was a pretty good job as job as part time jobs in Lincoln, Nebraska, in 1990 that you can get as a college student. It was definitely one of the better jobs you could get paid pretty well and all said, I'm out of work. I was taking a summer school class. Now I'm scrambling around. I'm looking for a job. And then in summer school, if you have ever taken summer school class, I was taking a very hard class. And if you get behind in summer school, man, you are in trouble. And I started getting behind. I started flunking the class. I had to drop the class, and up to that point, my definition of success was never flunked a class and never get fired from a job like you're okay. And now I've both failed both of these ways. Then I got another job and there was something a little shady that was going on at that company. I started asking questions, and then I got fired from that job. And then I got another warehouse job, and this warehouse was not nearly as well organized is Granger and I thought they needed to add some fields to their computer print out to make it better. So I walk across the hall and I talked to the I t guy to find out if if that's possible, before I go to my boss to suggest it, and the next day I come in, I get fired for going over her head and so I got. I fought basically flunked a class that got fired from three jobs in the space of about three months. Now, this was like, really like I'm really starting to question myself, right? Like men like white kid, I I like Why can't I straighten up and fly? Right. And about a month later, my friend invites to me new an Amway meeting. Okay, where they talk about the 40 year plan and, you know, having your own business and all this kind of stuff. Now, I would have not have been remotely interested in that if I had not got fired from those three jobs. But all of a sudden, when there when they're saying, you know, if you have a J o B like you get fired at any time, I'm like, darn tooting you can experience or that I'm 21 allegedly. I'm supposed to be working for the next 45 years of my life before I retire. And that's right. Like I could be working at some company for 10 years and I could have a great insurance plan or whatever, and some guy could decide he doesn't like me, and that could be it rate and like, you don't have to be that smart of a 21 year old to know that if you're like 50 sex and you get fired from a really cushy job, getting another really cushy job might be harder than getting a part time job in college. And this is how I got plunged in the sales and marketing and entrepreneurship I got into Amway. Well, that was Frank. It's kind of a big, long pink Kool Aid machine and sort of a cult experience, which I don't know that we need. Okay, which, by the way, as far as I can tell, seems to be like 1/3 of all entrepreneurs have done something like that, if not half. You know, it seems to be like the rite of passage. So that's how an engineer got into sales and marketing. And, you know, when I was in the M Way days and I never made hardly any money, an Amway and I was never very successful, but I figured out within probably a year it was very evident to me that, you know, an engineer could work on some project for six months, but a sales guy could close one deal in one day and move the world further in one day than the engineer could in six months. And so most of my classmates and people in that kind of education, they would never even consider, you know, sales and marketing. They kind of looked down on it. They're also terrified of it. But I found when you can combine both of those skill sets together Dude, you have some serious mojo. And I bet most people listening here you have other skill sets. Maybe you're an accountant, or maybe, you know, whatever. But if you know how to sell and if you know how to bring in a hunch preneurs, riel, bento, whatever your other skill sets are, it makes all of that stuff three times more valuable.

spk_0:   11:46
Yeah, yeah. No, absolutely. I think one thing that's interesting about that is a lot of people get into business because they have a particular skill set. They are really good at making cupcakes, and somebody told Mission, open a cupcake shop, and then they do, and then they realize they have all these other things they have to do, and I feel like a lot of time sales is like the It's like the last thing anybody wants to have to figure out because they have this picture in their head. Like when somebody says, What's a sales person? They have this picture of this used car guy with his hair slicked back and a plaid jacket trying to rip him off on a car, you know? And so, like, how did you like going from engineer to like? Sales and marketing is a pretty Why jump. So, like, did you have to deal with those negative connotations yourself? And how did you overcome those to go? Hey, I'm okay with

spk_1:   12:30
Oh, yeah. Well, look, so you know, going back to the E m Way thing again. Big giant pink cool. A machine cults experience. Frankly, I would call it an emotionally abusive environment, But, hey, let's give him some credit for several things, you know, they put me in a suit and a tie and a white shirt and taught me how to go out and do a presentation and pick up the phone. And like some really basic ground level people skills right at, you know, certain me, they they taught me how to tell a great story because some of the best storytelling in any industry is in the MLM industry. Okay, so toe add a loom. I was terrified. They also helped me understand how a person gets locked into a career they can't get out of. Okay, You know how people get trapped, right? And so I was scared to death of getting trapped, and so I really pursued that skill set. So, So fast forward a few years, I get out of college and get an engineering job, I get laid off and my wife is three months pregnant, and I can't find a job in engineering without moving to another city, which I don't want to do. So I end up going into sales, which was two years of bologna sandwiches, rum and soup pounding the phone, going to see people that don't want to see me. It was a horrible struggle. I piled up tons of debt. Well, okay, so this is me pinging around in the pinball machine of life, trying to figure it out in one of the most important things that when things got really desperate and they did like we were getting to be in serious trouble like we're going to start missing mortgage payments pretty soon end and I get fired from my sales job after two years. After trying really hard to make it work, I had to get really, really well about what I could do in the world. That was valuable because up to this point, it didn't look like I really knew how to sell. Okay, after however many years of ma'am way in two years of the sales job, it looked like I was classle failure. And what what I figured out was Perry. You need to find the place where seals overlaps with other things that only you can d'oh again. This this applies universally to everybody we're talking to here in like one of one of the little diseases in the entrepreneur world is people get really inspired and enthuse about what they hear about it. Seminars and all these rock stars and Richard Branson. Or, you know, maybe some guy out there that they really admire who's, you know, doing. I don't know that's he's doing affiliate marketing or something, and they think that's really cool. What a lot of people want to do is they want to escape from where they came from and go do something completely different because of grass is greener on what they really need to do is the blend what they already know with the new skills and not let go and get the best of both worlds. Now this is what I did I got. I gave myself a serious self awareness, and I stood, What dude, you need to find a blend of engineering and sales that only you could do that most sales guys could not do the engineering part, and almost all engineers could not do the sales part. And you need that Venn diagram that overlap. And I got really clear about it in the next job I got was that job in that works, and it was like in the land of the blind, the man with one eye gets to be king, and that's one of my favorite phrases. And it's It's just about the best business advice I could give if you're green. If you're wet behind the ears, if you're new. If you're just trying to figure things out, you need to go fight battles that you can win

spk_0:   16:55
Yeah, I think that's huge. I mean, the whole idea there of what you're talking about about blending sales with something that you already have skill sets at, you know, is amazing. Because cupcakes Well, exactly, I mean, But the thing is, the reason most people hate sales is because people are trying to sell them things they don't believe in or they don't know much about, or aren't a good product or whatever else. And the people that are really good salespeople are really just helping. People actually threw something that they actually do need, want or desire.

spk_1:   17:23
Well, they don't seem like salespeople,

spk_0:   17:25
right? They don't because they're really not. I mean, that's the thing that my uncle told me a long time ago. He said, Look, sales is not hard. You're in desire is not to close that deal. It's toe honestly, earnestly help them. But you have to have a product or service that you really know well that you're able to actually do that with. And those are the people that sell the best for our agency. I've been this primary sales person for a long time, but this year it's actually the first year that one other person is totally eclipsed my sales on my team by a long shot and because he's been here long enough that he really understands the product. He really believes in, that he really knows what we're capable of doing. And he doesn't need me to be the figurehead out there selling any more second of fun stuff like this. But it again it goes back to He spent eight years with the company now blending those ideas together. And I just love that, that idea of Hey, why don't you sell something that you actually know something about and to go back to the point you were talking about, kind of almost of ceilings or opportunity that people have always say that the two people have almost unlimited income opportunity are the person that owned the business and the sales people there. Remember Dave Ramsey told a story one time he was talking about a sales guy that worked for him, who had sold some ridiculous amount. I guess they owed him like a $1,000,000 literally a $1,000,000 his executives like, What are we gonna do about this and Dave's like we're gonna pay him a $1,000,000 because he sold like Don't attended another 20 million or something. You know, something ridiculous because next year I wanted to do the same thing again, you know? But it seems so ridiculous because now here's an executive who's maybe making $200,000 a year paint a sales guy a $1,000,000 because of what he completed, you know, because he hit some giant, massive bonus goal pretty

spk_1:   19:02
well. And into that point, you know, I used to work for manufacturers Rat Firm, and then I was a sales manager in the job that that I was telling you about. That worked and I I was hiring reps. And the being of a manufacturer's rap is they spend 18 months. They close a 1,000,000 1/2 dollar deal. They're supposed to get $150,000 check and like, well, the manufacturer has to give him the first check. But then they canceled their contract in the, you know, higher $80,000 a year sales guy and go well, well, I'm not paying that much money for sales anymore, And so you have this whole churn and what that meat is that none of your reps are actually loyal to you because they know you're not loyal to them. And so it was kind of like that sort of Communist thing, like we were pretend to work and you pretend to pay us that it sort of creates that kind of dynamic. And in what I what I told me my my reps was. So after being two years in a manufactured wrapped firm and not really doing all that well but paying attention to what was going on around me, I knew that that was the biggest problem of a rap for him. And I said, Listen, every time they would bring on a new rap or even Court One, I would say, Listen, I would tell them the whole sad story that I was familiar with. They I know your point of view now. They usually didn't have a sales manager talk that way because most sales and managers had never worked in a rep firm. Right? And I would say, Here's here's the deal. I will never fire you for being too successful. I well fire you for being unsuccessful, Okay, but you'll never get fired for having too big with check from us deal and they're like, Really, and I would get a I was a very tiny manufacturer. I would get a disproportionate amount of their mind share because they knew they could trust me. That was a big deal.

spk_0:   21:12
Yeah, I think trust is everything in those scenarios, and that's the idea behind you know, capable what they're owed. But the sales person has so much potential, I think so. Many business owners and entrepreneurs there are scared of vanity. They're scared to ask for the sale. I always tell people even on like a website half the time, people aren't asking the customer for some kind of direct called action. I'm like, Look, just put a button on there that tells them exactly the one thing you want them to do next. Because half of you are so worried about asking for the sale, you just do that. You'll probably increase your conversions by 50% because right now you have nothing that's asking them to convert. It's the same thing that happens in person is a sales. People will get to the end of a conversation and then be like OK, well, have a nice day. It's like no ask for the sale of you. Can't ask you to ask him to buy them that they're not gonna buy. So you early on, you kind of went through this story and you talked a lot about being fired multiple times doing Amway, but not really being that successful at it, doing other things, not really feeling that successful at it. So you had a lot of like early on. Ah, failures for lack of a better term where you're kind of going Hey, this is not working well. And what happens is a lot of people get to that point. And they either continue in that pattern, always hoping that you could get bitter or better of the two choices you always have in every every situation. And at some point, you found the path that work for you. Is that overlap? The blending between engineering and sales. What was it that gave you the perseverance to keep trying and to go find the next thing? Um,

spk_1:   22:49
you know, I'll tell you a story that I would say is the best answer I can think of. So when I was 12 my mom went bipolar. Okay, so anybody who's had a mentally ill family member probably has some idea what I'm talking about. Emmy was bedlam like, What's the matter with Mom? It's crazy, but nobody quite knew. Wait, what was on? And it took about a year and 1/2 to start to figure this out. And and so my dad was a minister and we were this very tight laced conservative church, and they were really, really not liking that. One of the pastor's wives is like skating on the edge. Okay? And so the start putting pressure on my dad like men. You know, Bob, you better straighten this out. You know, you know, then they're giving all these sort of religious reasons why, you know, things can't be left in this state of affairs. And and so he's casting about. He's trained a He's trying to solve this problem, and he finally gets her in front of a psychiatrist. And the psychiatrist says, while your wife is bipolar with mild schizophrenia and here's a medication and puts her on medication well, his boss at the church found out about it in his boss had this really lax to grain against psychology and psychiatry. He thought it was like evil. Well, so what happens is ah, these two pastor dudes come over our house and they explained, Well, you know, we've asked your father to resign, and, you know, we're going to give him this other job, but he's not gonna have any leadership responsibilities. And, uh and then they they ah, you know, next Sunday in front of 2000 people. Well, Bob is resigned because of some problems with Betty and the family. This is like, this really humiliating situation in. And we got relatives there like, hey, Bob, Like, you should get out of town, man, like you should get the hell out of Dodge like these people are mistreating. You know, what my dad decided to do was stick it out. Um, he had a lot of balls in the The guy who made this decision was a very intimidating guy. And he's very charismatic and everybody, you know, jumped when he said jump And most people wouldn't confront the guy on this stuff. And my dad got in his face and he was my wife wasn't in sin. And she wasn't, you know, in rebellion or anything like that. She had a medical psychiatric conversion. There's nothing wrong with a psychiatrist. It's a medical doctor, and my wife's doing better in. You owe her an apology in. You owe me my job back. And nine months later, he got an apology letter. He got his job back, and he totally vindicated himself. And three years later, when he died from cancer, the same 2000 people that heard the humid, affiliating announcement were all at his funeral. He had in 2000 people at his funeral. Well, and I I think I learned a lot of perseverance from that because, I mean, he was heartbroken. I mean, it was like being in a horrible situation to begin with, you know, a mentally ill family member and then getting kicked in the balls. Yeah, but like, he didn't What? Um, the you know, the desire for revenge or getting even and like all that kind of stuff, take over right, like he kept to the high road and he vindicated himself and he didn't quit in a really, really desperate situation. And and I just carried that over. Now, one of the things I learned in business. Waas, you definitely need to quit. Yeah, OK. Gotta know when to fold them. Yeah, man like like seriously, like I remember once when I was nine. First time I ever went water skiing. So, you know, it's really fun. And I bounced across the ways, and finally I fell over and no, getting drugs through the water in the

spk_0:   27:35
rope isn't stopping. And I thought, Why doesn't this guy stop? I'm gonna drown and

spk_1:   27:41
suddenly realize, Pierre, you have hands. You can let go. Oh, like, go right. And as soon as I let go, Then the boat stopped and came around and picked me up like the guy the guy wasn't going to stop like. And there's a reason for that which we don't need to go into rights like Oh, right. Yeah. And look, I think you always persevere and wife, but there are lots of things you need to quit. Yeah, okay. And winning is not the same is feeling to persevere, you know? Look, I I've got a client who's father in law committed suicide three days ago. Okay? Now that guy decided in not persevere. Okay, That's Ah, whole white. You see the difference. You know you've got You've got to figure out what what you're really committed to in in what you need to let go off.

spk_0:   28:43
Yeah, I think that's really important. I think I've seen a little bit of both, but there are a lot of times you see people holding onto things were like This is never worked. It doesn't have any indication that it's going to work and nobody thinks it's a good idea. So, like, it's time to let go of that rope a little bit. And But I actually just read a book, Not that long. A real short one by Seth Good and called the Dip, and he talks about this idea that, like, you know, and every business is this cycle, you're gonna have this on ramp, and then there's a little bit of a decline, and at that point is where you have to decide if it's gonna turn back up and take off work, if that's when you quit. But he basically says the same thing in that book of understanding when you actually need to quit and when you should go cameras gonna put my head down and push through this season and get to the next chapter. So we've talked a lot about, you know, successes and failures and how to overcome those. I love to get a bit more tactical because you've spent a lot of time in all kind of stuff. Sales, marketing and sales and marketing, I think are really hard for a lot of business owners. And so I'm wondering for you when you think about small businesses and your you do a lot of consulting, you're talking to somebody who's, you know, just struggling to figure out how to get the attention that they need. Maybe they've got a really good product. They got a really good service, but I'm not getting in front of the right people. What are some of the things that you think have been really helpful for you and that you see working for others right now out in the business roll.

spk_1:   30:05
So one thing that I've consistently noticed is most people possess three times more proof of how good their product is than they've ever actually shown anybody. That's great if you systematically go through case. So how would you like what kind of demonstration? Like Like I remember I saw when I was a kid. I saw a Tonka toys brochure, and I remember it had a picture of a Grand Torino car with the the tire sitting on a Tonka dumptruck. It should. The little toy duck trick could hold the weight of a car. Okay. It's like Tonka toys. Air tough. Okay, well, how many ways are there to prove how tough your product is? Like, Maybe you can swing a sledgehammer at it and it won't break. Well, do you have a video, or have you actually taken in front of the customers? You know, I bet most people have never had a sales guy walking their office, take a sledgehammer and try to smash his own product. Okay, I bet most people have never had that happen. Right? Or or maybe you have testimonials and nobody's ever seen them. Or you had these tests done. And nobody's ever seen the results. Or you were featured in a magazine two years ago, and you never got re print copies of the article, or I mean again consistently, I find most people are only showing their customers 1/3 of the proof. They haven't. You can never have too much proof, s so that's one thing. Okay? Another thing is people don't really understand the 80 20 principle, which is the most powerful principle of cause and effect. Okay, in I don't see this lately, 80 20 is the master law of cause and effect. So 100 years ago, Peredo figured out 20% of the people have 80% of the money. 80% of the people have 20% of money. That means the haves have 16 times, much as they have nots. Well, what everybody tries to do is have a big philosophical argument about it. Dude, like it's a lot of nature. You can't fix it. You can't boys it all you can do is create an economy in a world where everybody has Maur. Okay? It is a fact we are lifting people out of poverty, right? Like the rich getting richer. But the people making $2 a day, which is like a Billy in people are getting to $4 a day faster. Okay, That's what you can. D'oh! Yeah, but people that people don't understand cause and effect are wildly erratically unequal. Most causes produced almost no effect in a few causes produce huge effects, and this is true in your checkbook. It's doing your profitability. It's true in your warranty returns, it's it's untrue. Your product effects. It's true of you know which customers come to your restaurant the most often. It's true of which employees give you the most productivity. It's true which employees create the most headaches, and you have to constantly look for the inequalities. This is what my book 80 20 sales and marketing is all about is you can't believe how unequal all of these things are and when you suddenly can see it through that lens. Relate. Oh, my word. I've been wasting so much time polishing turns my word.

spk_0:   34:00
Yeah, it's amazing how true that principle is like I mean the other day. That exit is is probably a couple of years. A year or two ago, we were going through our accounts. We're looking at all of our all the clients that we serve, and on an annual basis. There's like 300 of them, and they vary from people that pay us. You know, $200,000 a year. People that pay us $200 a year. It's a very wide Gambon and I took those clients and I split them up and it was amazing. The top 20% almost like, exactly produced 80% of the revenue. It was, I was. I've heard this principle before when I actually like went through my books and did the numbers and pulled the spread. Chief's out. I like, didn't believe how real it was. And then there were multiple other things just within our like QuickBooks and in our accounting. I sort of pulling the numbers. They just That's where they landed and and it was like no matter what we controlled, it always just floated out that way. And it really is like a weird law of nature or something.

spk_1:   35:00
Well, it is. It is a lot of nature. That's exactly what 80 20 sales and marketing is all about. And not only that, it's fractal. It's the pattern within a pattern. So not only is that true, but 20% of your 20% of your customers give you 80% of the 80% of the orders, and 20% of the 20% of the salespeople make 80% of the 80% of the of the sales commissions, and 20% of the 20% of the ad groups in your Google campaigns produce 80% of the 80% of the clicks coming to your website. This is true all over just about anything you could measure in business. The 80 20 principle is true, and so when when all of a sudden you can see this, you mean this is so 80 20 ist true of all eight billion people in the world and how much income they're making. It's also true of the top 10 people in the Forbes 400 even even the top 10 list like Jeff Bezos, Sam Walton. You know Warren Buffett that list that list is 80 20. True, it's probably more like 70 30. But I mean, it's right, I'm telling you, this is everywhere. It's donations in a In my book, there's an appendix, and I have this whole chart. I have a unique way of putting 80 20 autograph That's not like anybody else does it. In fact, it got published in the Harvard Business Review Italy last year, and I show revenues of Fortune 500 it follows this curve networth of Forbes 400. It follows occur donations to a church on one Sunday morning. It follows you curve dairy output of 38 counties in Wisconsin. It follows the output. It is consistent, consistent, consistent, consistent. It is the most consistent thing that nobody has ever pointed out to you in your life. It is unbelievable. It is everywhere. It's the tree in your front yard. It's the traffic on the roads in your town. It's your utility bills. It's it's 80% of the dirt is on 20% of your carpet because 80%. But traffic is through these certain it's it's universal,

spk_0:   37:27
so it really is crazy. But what I'm curious about your opinion owner or thoughts unlike like the next level of thinking behind there. Once you realize that the question then for me becomes already do with it. And so what a lot of people say, Or at least that I've heard is okay. Well, if 80% of my business produced by 20% of the clients, that I should just drop the bottom 80% the problem, like logically for met me and that scenario is, well, if that's true. Now you're left with the top 20% which, like you said, now there's within that still gonna be 80 20. So you're like, How do you make that like, What do you do with it? You know what I mean? Like what? In sales and marketing and in business What? Your practical next steps once you know that fact.

spk_1:   38:05
Okay, so here's Here's how you practically put this toe work. So what you asked is like Well, what's 80 22 01 or three? Owen really is what you're asking. That's right. So here's what it iss. So my friend Lend Brittain has this thing he calls the 2120 role, and here's what it is. It says that 120% of your profit came from 20% of your customers, and then that's the top 20% of your customers. There's a bottom 20% of your customers that are actually losing you money, but you don't know it, and they bring your 120% down to 100. And then the ones in the middle are just keeping the lights done. Okay, so So here's what happens if you fire 80% of your customers. What's gonna happen is you're not going to keep the lights on. It'll destabilize the business, right? Like it's too much popping. Okay, now, it may not be obvious at first, but it might be like, Well, okay, so we got rid of 80% of our customers are sales only went down 20%. But now what happened is we can't get that volume discount that we were getting. We get monk down to this lower level, and then, like all these little cascade start happening and then like you, you lose one big customer, which is never really gonna happen anyway. And all of a sudden you're in serious trouble. So here's how you do use it. What you do is you figure out well, who are my losing money on that? I don't realize I'm losing money. Okay. In most people have not done sorry to use a four letter word here. They haven't done enough caustic toe. Actually, no. They don't really know where the money is being made in their business. There's this big, squishy cloud and effort goes in, and then money comes out and they don't know where it's getting eaten up. But look, if you stop and think about it, it's like, OK, don't don't look for 20%. Look for 2%. What's the 2% of my customers that I know? I have to be losing money on these people? What's the 2% of your product? Wine. You're almost certainly taping dollar bills to every shipment that goes out. What's the 2% of product effects they're causing, like 50% of your warranty returns? Okay, what's the 2% of your employees? This is a big one. So one of my clients for a long time now is Nancy Slesin Jer in the UK, and she runs a recruitment agency in her recruitment agency. They guarantee the success of the candidate for a year. So what if you hire them? You pay him a flat fee, and they will get if if you need a bookkeeper, they will get you a bookkeeper, and they will. Furthermore, they will guarantee the bookkeeper works out for a year, and if you're unhappy or if they but keeper quits, they will replace him for free. Okay, so Nancy has total skin in the game with play placing these employees, All right? Nancy told me a bad employee cost you 4 to 14 times their salary. No, it's never completely obvious why this is a case now. You all that they can't steal. They could even steal for me, but they're not going to steal 14 times. Only might you might be surprised. Okay, but it's the cascading X is okay. It's like, Well, like I had a bookkeeper that over overpaid a vendor by $80,000.1 year, okay? Or they cost you opportunity costs or a customer leaves because they're offended by your employees or a great employee leaves because you have a client mistreating them. Okay, these things are usually not obvious. They're lurking that's like cockroaches under the refrigerator, and you start to find these things. So let's say Let's say that you have 12 employees and you're doing like, a couple $1,000,000 of business. If you fire 2% of your customers, you fire one of your employees. You get rid of one bad vendor, you discontinue one product. Your revenue will go down 10% in your profit will go up 15% and you'll you'll work fewer hours and by the way, everything I told you, it's almost always true. Very rarely is it not true. Jack Welch when he was in the boom booming heyday of G E. But 10 or 20 years ago, Jack Welch's policy was, We automatically fire the bottom 10% of the staff every year. Wow, Now that sounds draconian. It's It's just ruthlessly, honestly, 80 20. It's almost guaranteed that five or 10% of your staff not only does not belong there, they're making things worse. Yeah, I have fired more people than have ever quit my company. It's in full, but it's necessary, and it's necessary for them. They don't belong here. That's right, able on somewhere else. And it could be there. They're a really good person. There's not a problem in the world with him. It's just a bad match. Or it could be. They've developed that habits. They have developed a bad attitude in like the school of hard knocks needs to straighten him out. It can't be at your expense. You can't let the drowning person make you drown, too.

spk_0:   44:17
Yeah, I mean, shoot. I wish I had heard most of these things, like five years ago before I walked through them home, because, like everything that you're saying is just resonating so heavily, I had a team member that do me for a long time, and I had to let go a while back, and good friend loved the guy and just he just wasn't right for the role anymore. But what's been so amazing to watch ever since thinks I set him afterwards. I said, I care about you. I want only for success and it's been focus. He started his own company now, and he's doing very well. He's probably doing better now than he's ever done his whole life, and and we're better to like as a company. And I still love the guy, you know? Is that a party, his house the other day like and so it's It took a little while for that actually work out. But But it's been amazing to see that, and I think that the principle that you're talking about it, it really kind of goes back. That analogy of you on the water skis is really kind of stuck in my head of you, dragging behind, holding onto the thing because and that instance we're talking about no one to fold a business. Now we're talking about that kind of at a micro level, and you have to know when to fold or when to let go of clients when to let go of employees when to let go of service is or processes within. The company might not be the company as a whole. It might. It might just be a piece of it, and I'll get people there listening, Justin example of that recently. I mean, I hate to admit this, but for almost 20 years, for 18 19 years, 19 years I ran this company and all I really had was like a good, solid revenue and profit numb like I knew what the total total was. But I couldn't have told you like service by service, product by product, project by project profitability. And it really wasn't until last year that I was like, You know what we really need to know. Like if we want to grow past where we are, which has been great, where are we bleeding and where are we thriving, you know, And now that we have those breakdowns, we have P and l's that are broken down by class and project everything else we can see like. Okay, well, this thing over here has got a, you know, 70% gross margin. We want to keep doing that. And this one over here only has a 20% gross margin. After everything else, we're gonna have a problem on our hands. But until you know what those numbers are to your point, you don't even know what to cut. Like you got to know your numbers first. But man, very like the whole the whole piece of just went through. It's just such sound advice in, but it's listening. It has not walked through those things before. Rewind it. Go listen to that section again. Because that is just rock solid advice. We'll run that time. People never. Yeah. No, I totally agree. Which is why again, you see, like, certain limited number continue to grow and others that just get stagnant, stuck and worn out ultimately, um, we're on that time, unfortunately, which we tend to do in these things. So I really appreciate all your wise counsel. So far, it has been encouraging, helpful for me, and I'm sure has to others But before we wrap up, there are three final questions I'd like to ask everybody. Here's what they're going to be. The 1st 1 is gonna be something around work. Life balance means something a little bit different. Everybody. I want to know what it means to you. Second is as a leader and a business person, you're constantly pouring into others. But how are you continually growing and educating yourself? A CZ? Well, what does that look like for you? And the last will be kind of any parting advice for folks and where they can find you online. So back to the 1st 1 work life balance. What does that even mean to you? Means something different to everybody. I don't even love that term, but I'm curious what it means to you. And how has that changed for you in different seasons of life?

spk_1:   47:32
So I think it is very significant that the oldest intact civilization, by far is the Jewish population. Okay, it's basically the same religion, same language, same holidays for 4000 years. Yep. Okay. Next closest. The Catholic Church, and the next closest after that is probably, you know, no, no better. No better than 1/3 is long, okay? And the The Jewish tradition insists that you take a day off, okay? And a lot of people think that they're too smart for that. And I think it's a mistake. I think you burn yourself out, you burn out your family, you burned out your relationships. You burn out your marriage, you burn at your body. You just you need to take a day off. And if you take a day off and you spend time with your family and you do fun things and you set the work of sight and I mean, like, you don't do work, you're not in your email box and you're not texting your clients and all that kind of stuff like you can do this. Okay, again, the oldest intact civilization after 4000 years is insisting, Okay, it's really important,

spk_0:   49:02
which also happens to one of the most prosperous civilizations even existing today faras

spk_1:   49:06
percentage wise as well. Like yeah, half the Nobel Prize winners in basically constituting 20% of the intellectual elite of the liars and musicians and the songwriters and the authors of scientists and mathematicians. Hello. Yeah, Okay. There's a lot. I mean, that's deep Rabbit hole. There's

spk_0:   49:26
a very interesting book on that actually called Thou shall prosper by a guy named Doctor or written down by Rabbi Lap Lampkin

spk_1:   49:33
is his name. I like really interesting, but I like that guy. Yeah, okay. You're saying how do I feed myself? You know what? My one of my friends need a comment to me. He goes, Perry, you are one of the best. You're the one of the most ah consistent people with your own self care that I know. And that is true. That is true. I make space for the mental space and the personal development that I need. Okay, um, so best habit I have ever cultivated is I start my day with a notebook and a pen in no email in no social media and no interruptions for an hour. Every day I get myself spiritually sorted out. I process my thoughts. I figure out what I'm going to do today, and I do it sort of narcissistic, Lee. Okay. It's like it's me time or it's God time, but I'm not doing anything for anybody else, okay? And getting myself straightened out, that is the single best habit that I have cultivated in my life, and I use it toe. Listen, I used to pray. I used to meditate. I use it to work out ideas. This doing a very important seminar in three weeks. This morning I spent about two hours just in my note, but just working out. The idea's not on a computer, not on a device. Totally analog. And it has served me enormously well know most people in order. If if most people did this, they would have to force themselves to do it because they're haptik like lizard brain habitual. Push a button, get stimulus, respond to something Impulses overwhelmingly powerful that that impulse is killing you. Yeah, okay. It keeps you from proactive. It keeps you from planning. It keeps you from being in charge of your destiny so majorly important. And that Well, frankly, that would be My advice to you is start with 20 minutes, tone insolent. Get your coffee and go sit in your favorite chair or sit on your deck or, you know, whatever comfortable place maybe you wanna listen to some music or something, and just like be in your own private space and with us into the muse and, uh, do it like tomorrow morning before you light respond anybody's fire drill and see if your date doesn't go significantly better, Significantly better. I don't I haven't missed a day of almost six years.

spk_0:   52:37
Wow, a TTE The beginning of this year, For the first time ever, I switched to using a paper planner to write down In the beginning of the day, I've started to have it right right now, just a single verse of out of the Bible in my planner. And right now I want my top three parties of the day, and I kind of write out what day is gonna look like. And I was really consistent for the first quarter, and I've kind of fallen apart. The last couple weeks have been traveling a lot, and I've not found a way to fit that into my like habit routine. And I've certainly not been nearly as consistent as you, but I will say there is some kind of power and like just sitting there with paper and I'm like a digital lover, but like I definitely am like, addicted to those dopamine hits of like my next e mail that came in or checking off a task on the task box or delete an email or viewing a social media thing and that it's it's bad. And that's a really strong advice. The idea of just taking that time with a pen and paper and no phone, no laptop, no nothing else. It's gonna be partying or vibrate at you. And I found two after, like physically keep those things out of the space that can even be like on the table or in the room. I have to, like, leave my phone and appear in a whole different space from where I am

spk_1:   53:45
that habit. I don't know any other way to describe it. It's like it makes a force field around me that makes everything go better. I don't know how it works. I don't need to know how it works. It just works. If I skip it, my day goes to crap. If I do it, things good in. So

spk_0:   54:04
I'm gonna start with 20 minutes tomorrow morning, then I'm gonna block it on my calendar and numbers can take it to myself, and I'm gonna do it so I may have to get up a little bit earlier, since it's Saturday and I got five little kids. But, um, I'm gonna I'm gonna do that. That's really valuable. Last thing is, where can people find you online? And, um, you know, what's a great place from looking up? Um,

spk_1:   54:26
I would recommend if you like what we talked about today. You should read my book 80 20 cells and marketing. If you gotta sell 80 20 dot com S e l l h 020 dot com It's about 18 bucks on Amazon. It's $7 including shipping on my website or 14. If you're outside the US, that book will change your entire perspective on everything. You will discover the most universal law of cause and effect that nobody ever properly explained to you. It'll change. So that whole little section where your love Amen, brother. Yep, that it will. It will nail that and you'll never see the world the same way, and you'll never You'll never do your life in your business the same way you'll save a bunch of time. You'll make more money, you'll have less stress, and life will be more like what it's supposed to be?

spk_0:   55:18
Well, those sound like things that this audience is probably interested in. And I think most people started their business to try and find more freedom, find more money, find more time and a lot of times what we find a stress and anxiety instead. So, having the right tools a really important. So go check that out. Sell 80 20 dot com. Grab Perry's book. I think just based on the conversations today, you're probably pretty confident ready? There's gonna be great value in that. Perry, Thank you so much for being on the show. It really has been a pleasure to have

spk_1:   55:44
you. Thank you for having me. It's been a real pleasure to talk to you today, so appreciate it. I

spk_0:   55:50
hope this episode has given you some ideas or inspiration that will help you grow your business if you found it helpful and you know somebody else who might benefit from it as well. I would greatly appreciate it if you would take the time to share this with him, maybe on Facebook or Twitter, or linked in or even shoot an email over to a friend with a link to this podcast. in it. And if you haven't already, make sure you sign up for email list at building a business that lasts dot com.