Magnetic Marketing Interview
For V.P.'s of Sales, Sales Managers:
How To Make Salespeople More Productive With "Magnetic Marketing"
(From "Conversations with Industry Innovators" by Lotus)

Dan Kennedy Interview Transcript

CWII: I'd like to start out with a question that's maybe a little abstract, maybe even a little philosophical but I think it kind of sets the stage for some of the other things that we're going to be talking about. In a perfect world, what would you say is the proper relationship between the marketing department and the sales department? How should those two organizations be working together?

Kennedy: Well, for starters, it would probably be a good idea if they were speaking to each other, which, in an awful lot of the companies that I work with it's almost that bad, in that they are on two entirely separate tracks, very little communication with one another, and the converse of that, I guess in an ideal world, would be that the marketing folks saw their job two fold. One, as softening the beachhead, creating awareness of new products, new services, and so forth, but more specifically, the second job would be to actually generate quality enhanced leads with correct decision makers for the sales staff to follow up on. And when I say enhanced leads I mean not somebody that has circled a bingo card in a journal and requested brochures from 140 different places or dropped their business card in a fishbowl at a trade show, but better than that. Someone that has gone through some kind of a process to qualify them so that they are inviting the sales person in the door, looking at them as an expert with solutions to their problems.

CWII: One of the traditional ways that marketing departments do that is through advertising, but you have historically been very critical of much of the advertising that is out there. Could you tell us a little bit about that? What's wrong with the advertising that is out there by and large?

Kennedy: For the most part, what's wrong with it is in fact that it is advertising and the way that advertising is traditionally viewed is in the context of image and brand recognition, which I believe is enormously wasteful. And so, the terminology that we most often use is salesmanship in print, or salesmanship by media, rather than advertising. And the profound differences are that with my approach, the brand building, all of that, is a secondary happy byproduct of the process, not the primary objective of the process. The primary objective of the process is direct response, is sifting and sorting and getting qualified decision makers to step forward, raise their hand and say yes, I want to see somebody. In the case of your industry, I want to see somebody, I want someone to come in here to explain to me how this works. An awful lot of advertising is, for big companies, is controlled by advertising agencies and having come from there I can tell you that there is a profound and inherent conflict of interests in the agency/client relationship.

CWII: In what way? What do you mean by that?

Kennedy: Two ways. One, the ad agency is always going to have its own agenda and if you lay it side by side with what should be the client's agenda, there's a whole lot of stuff on the agency's agenda that has nothing to do with the client's agenda, such as winning awards, such as building great looking portfolios to use to show to the next client, such as being the most innovative campaign to appear in this particular group of publications for the year. All of those things have nothing to do with tangible results.

CWII: And, you've made the point, specifically, about the USA Today articles that appear every year after the Superbowl about the most creative ads that that's not really the right measurement to be using.

Kennedy: Well, I have a long running dispute with USA Today in general because they give a lot of recognition to, they have a thing called Ad Watch that appears periodically in the business section, and they will go survey people on what ads they like and what ads they thought were clever. But, there's never any reporting on what did it do to the company's market share, or more specifically, what did it do in terms of leads, sales, etc. And the classic example of that is the pink bunny ads. At the consumer level, five years, roughly a billion dollars and USA Today is one of the publications that praised them to high heaven which prompted a letter from me which they did publish, to their credit, and now after the dust is finally settling an accurate market share measurement is possible, Eveready's admitting that after five years and all this money, they've lost market share, they haven't gained it. The battery company that has gained the most market share in the last five years is Ray-o-Vac, who incidentally does the least advertising, and when you test people on this, of course they've all seen the bunny, but 40-50-60 percent of them will match it up with the wrong brand of battery. However, the agency has won umpteen numbers of awards and everybody loves the ads. That's the first thing that's wrong. The second thing that happens, that is conflict of interest in the agency/client relationship, is that in most cases, the agencies are getting paid in part, if not all, based on a percentage of spending. So, clearly their interest is how much can we get the client to spend, not how much results can we get for as little expenditure as is humanly possible. And so what that does is, is it rules out certain types of advertising and certain types of media that don't lend themselves to enormous mark up and enormous spending.

CWII: The advertising that you have done, in both direct mail and other formats, has been tremendously effective. Can you give our listeners a few tips on what are the common elements across all of the copyrighting you do that make for effective material?

Kennedy: Well, some of these things are going to sound, I suppose, very basic. One of the mistakes a lot of companies make with advertising and marketing in general, is really going out there without having something profoundly important and exciting and compelling to say. And consequently, you see them trying to prop up a weak message with either great graphics or, you know, a computer enhanced barking dog, or a celebrity, or special effects, or those sorts of things. Kind of like a really bad movie with a lot of great special effects and big name actors, but, like no script. And so, great copy begins with having something important to say. Then, when you say it well, it really counts. And so some of the basics are you begin with the headline, regardless of what you're going to do: print ad, direct mail, poster in a trade show, or whatever you're going to do, broadcast fax, website, email, you always begin with a great headline, which has a number of jobs, but it's primary job is to compel people to read the rest of your message. And so it either has to key on a great benefit or solution to horrible pain and trauma that is being experienced by the people it's addressed to. One of the purposes of copy is to deliver a compelling offer that people will immediately respond to and you get into issues like proof, anecdotal, as well as scientific stories. And the most important thing about copy, I think, to remember is that the tighter that it is matched to the recipient, the better the results, and so selection of who the copy is aimed and delivered to is important and really understanding those recipients is extremely important. We have a little checklist we use, I don't know it all off the top of my head, but some of the issues are: what are the top one, two, or three things that keep this person lying awake at night tossing and turning in bed, upset, can't sleep, can't digest his food; what's going on in his business, and/or industry that has him scared?

CWII: I've heard you say that you want to enter into a conversation that they're already having in their own heads.

Kennedy: Yes, and that's not unique to me and I believe proper credit goes to Robert Collier, who was a pioneering direct response copywriter in the 1930's. Yes, the concept is to step into what's already happening, what they're thinking about most, and sort of link to that. You know, as we're recording this, for example, you can't turn on the television without dealing with John F. Kennedy Jr.'s death and all of that. And I saw on Friday on CNN that the director of the Funeral Director's Association of America was being interviewed, said they'd had this massive surge of calls of funeral homes all across the county from people wanting to know how to arrange burials at sea as a result of the announcement of what the Kennedy's were going to do. What that clearly tells you is, if you were able to piggy back a marketing message to that without being offensive, which I'm not sure you could, but if you were, you would have enormous attention, interest, and response.

CWII: Because that's already going on in their heads?

Kennedy: Yes, and in fact, it's the primary thing going on in their heads at the moment.

CWII: Part of the key, it would seem to me then, is you want to be customer-centric all the time rather than product-centric, rather than being concerned with your stuff as the seller, being concerned with the buyer's perspective.

Kennedy: You're absolutely correct about that, and in fact, a very common mistake, particularly in high tech industries, is being what I call product obsessed. And, you know, having the best product is not even necessarily a marketing advantage because in many cases, the benefits can't be fully realized until the person already owns it and uses it, but it jacks the price up. So having the best product is not necessarily an inherent marketing advantage, sometimes it's a marketing disadvantage; often it's just neutral. But, people who are obsessed with product soon start to talk about this product that they're in love with and they've invested in, and so forth, but the truth of the matter is, is that always the marketplace could care less about the product. Nobody ever buys a product for what it inherently is, that's like Sales 101, I mean, nobody, I don't know how many power drills there were sold this year, but nobody bought a power drill because they wanted to frame it and hang it above their mantle and admire it, what they really wanted was holes. And so, it's always our job to get to talking about the hole and in fact the why the person wants the hole. We call them e-factors, the emotional factors that drive people to make decisions, regardless of what the decision is, whether it's to let the sales person in the door in the first place, or whether it's to make a purchase at the end of the process.

CWII: For senior marketing executives, what else besides traditional advertising should they be doing to position their companies and their products out in their marketplace and the minds of the customers?

Kennedy: There's a matrix of media and methods that I think all business-to-business marketers can use that include websites, email, broadcast fax, all of which, by the way have the wonderful advantage of being relatively cheap, direct mail, news type communication with a customer base, be it an electronic newsletter or a printed newsletter, audio tapes, video tapes. The providing of education and information is one of the best strategies in business-to-business marketing, again it takes the focus off the product itself, it provides added value, establishes you and your sales force as experts, and so forth. In terms of positioning in and of itself, again it's, I think, dangerous to focus on the way positioning is typically talked about, which is in the context of image and name recognition, because that does not necessarily translate into sales. Everybody may know one company, but be buying from another one, who has done a better job with real marketing and real selling versus positioning. And so, again, my approach is always to make that the byproduct and to make direct response, lead generation, appointments, and sales as the primary function.

CWII: There's a term that I think you've coined: magnetic marketing. Tell us a little bit about what that is and how it's different than what traditional marketers are doing out there.

Kennedy: Well, conceptually, and then I'll be definitional, conceptually most marketing is push marketing. It's sort of marketing by brute force and it's designed to shove products, services, sales people, and appointments down people's throats. And in many cases it comes across as begging, in some cases it comes across as pushy, and in all cases it comes across very "salesy". Magnetic marketing is all about attraction; letting the prospect have the sense, the feeling, that he is seeking out the seller and often that allows a different type of selling, a different type of relationship, where the seller is really viewed as an expert. One of the examples that I always give everybody in every business is I'll cheerfully pay 500 bucks in cash to anybody who can tell me of a time when they received any kind of cold call from a cardiologist. Doesn't happen. All cardiologist's marketing is magnetic marketing, not push marketing, and therefore, it allows for a sales process that is diagnostic plus prescriptive with virtually zero resistance, price or otherwise. At the end of the examination and the diagnosis when the cardiologist tells you you've got to get in and we've got to replace a tube, your questions pretty much have to do with how soon can I get in, not how much or gee, my brother-in-law's a cardiologist in Tupelo and so on. These are none of the things that sales people deal with in normal sales environments. But, the reason it's that way at the end is because of the way it was structured at the beginning. So, magnetic marketing definitionaly is about using media, systems, processes to attract ideally qualified prospects to you, who view you as an expert with solutions to their problems so that you get to sell in a competitive vacuum.

CWII: And in fact, that kind of plays into the balance of power between the buyer and the seller. Over the last decade or so, the power has shifted dramatically towards the seller. The seller is calling the shots in the sales process in a way that just wasn't case before then and this plays to that, almost kind of like marketing jujitsu. Does that make sense?

Kennedy: Yes, it does make sense. I mean, if you want control over the process that battles won or lost, I believe, in the very first square on the marketing game board. In whether the prospect perceives that you are chasing them or the prospect perceives that they are choosing and seeking you out. And so, control of that perception then controls everything else from there on out, and those who figure out how to do that real well find the rest of their process gets easier and easier and easier, their sales people are more productive because they're only spending face-to-face time with people who are predisposed to do business with them in a competitive vacuum.

CWII: Give us some ideas. How do you do that? How do you get there?

Kennedy:In the business-to-business environment you begin by offering information of value or perceived value, precisely matched with the interests of the decision maker whom you wish to attract. Simple translation is you create the right bait and right bait for right fish, right bait for right animal. And you focus on not advertising your product, not advertising your company, not advertising your services, not advertising your technology, but on advertising and marketing only the bait to attract precisely the right creature to respond. Now, you begin this communication with this person who has raised his hand appropriately and through that communication you establish your problem solution set up, you establish the generic solution to the problem, you establish your specific solution to the problem, and you establish the expertise of the sales person, who is ultimately going to get face to face with this person, and you create an environment where the prospect is going to make the first move to call or otherwise respond to request the appointment, which usually is couched in some way as an audit or an examination or a complimentary consultation, or something that has intrinsic value in and of itself.

CWII: I've heard you compare it sometimes to the dynamic that exists in the classified ads in newspapers.

Kennedy: Well, a pure lead generation ad, or a pure lead generation broadcast fax, or email or whatever, I'll give you a couple of examples if you like, is very akin to a personals ad. If you've never run them, but go look at them you'll see that the structure of a personals ad is incredibly simple. It is a description of who the person wants to respond, who the person does not want to respond, and an incentive for response, in this case it's typically implied, but still it's there. And so a personals ad may read divorced, white female, age 35 seeks single male 28-52, must like horseback riding, be nonsmoker, own boat, father own liquor store, etc. Old joke. And so it's who they want and who they don't want. And so, translated into marketing, for example in the financial planning industry, an ad like that might be: Attention individuals with incomes no less than $300,000 a year to $542,612 a year with children who will reach college age in the next three to five years, we have incredibly important information you should have blah, blah.....please do not respond to this ad if you are um, um, um... and then call for free recorded message or fax back this form or whatever. And so that format now translates really into any environment. I mean I have clients who sell custom part fabrication to the nuclear power plant industry. We use a very similar format to what I just described with ads in the trade journals that go to the engineers and the supervisors of the plant managers in the power plant industry. So you can move this structurally pretty much anywhere you want.

CWII: We've talked primarily about business-to-business sales. Are these principles applicable to consumer sales as well?

Kennedy: Well, yes, and they're generally viewed more by people as consumer sales strategies and there's more examples because they're more commonly used there. There is this erroneous idea that there's an enormous difference between one and the other, how you sell to mom and pop at home versus how you sell to the CEO in the corporate boardroom.

CWII: And you don't believe that.

Kennedy: No, there's fundamentally no difference at all because actually the term business-to-business marketing in a misnomer to start with. We all use it as convenient shorthand because we think we understand what it means but businesses don't buy anything; people buy things. And the check has to be signed by somebody, and the purchase order has to be signed by somebody, and that's a human being with flesh, blood, and so forth. Some years ago I saw Wesley Snipes interviewed on The Today Show and he was asked, "Do you see yourself as an actor first or a black actor first?" And he said, "When I get up in the morning and get out of bed naked, I'm a black guy, then when I get to the studio and get a script in my hand, and get in the appropriate costume, then I'm an actor." And, of course, his point was we all get out of bed naked in the morning as human beings before we do anything else and we continue to respond all day long and throughout our lives as human beings. The fundamental psychological factors that cause people to behave in certain ways don't change when the person moves from his living room to his desk in his office where he's a purchasing agent. The differences between marketing to him at home and marketing to him in the business are really rather minimal.

CWII: You've said that sales people really need to get out of the business of prospecting. That just flies in the face of every bit of conventional wisdom that we see out there. What do we mean by that and how does that work?

Kennedy: Well, what every sales manager knows to say, unfortunately to every sales professional who comes in the door with any problem is make more calls. And, you know, you could have a parrot sit there, trained to say make more calls and save yourself 75,000 bucks a year. And it's lousy advice; it's almost like telling somebody to get better at golf by practicing their golf swing. If I go practice my swing, you know, all I'm going to do is wound a bunch of people and ingrain the swing, and it would be worse, not better. Beyond all of that, prospecting, meaning physical, manual labor - call on the phone, or walk in the door, and try and get to see this person and go back and see him 56 times before you really get an appointment - it causes a high level of stress and burnout in sales people. It's an incredibly inefficient use of a talented salesperson's time. Given that somebody is a good sales professional, what you want them doing is selling. You wouldn't take your best sales person out of the field and have him sweep up the office and move the furniture around or go wash your car or pick up your dry-cleaning because you would say, "Well, I want the guy selling." Well, then you shouldn't have him prospecting either because it's closer to sweeping up around the office than it is to selling in terms of compensatory value. So it's a very unproductive use of time, it causes a lot of stress and burnout and, to go back to your word earlier, it's horrible positioning, it's sort of like if you've ever been the first car to drive to a restaurant and if there's an empty parking lot, your tempted to drive back out. It's the cardiologist example I used earlier, I mean in the consulting business, which you and I are in, it's blatantly there that if you're prospecting than you must not be any good. And, in fact, if you're even readily accessibly, you must not be any good, and so, the positioning is bad. And so what sales professionals need to learn how to do and do in concert with their marketing people is replace all of that prospecting with the kind of magnetic marketing we talked about earlier so that, by the time somebody gets to the sales professional and/or the sales professional responds and gets to them, the person has already has jumped through a few hoops, the person has already risen up and identified themselves as the correct decision maker, they've identified themselves as having the problems to which you pose answers, they've identified themselves as having an open mind, being interested, and they have, at least in their perception, chosen you as someone to come in and discuss with them how to solve their problems.

CWII: It just changes the whole dynamic of the relationship between the sales person and the prospect.

Kennedy: It allows the salesperson to be a professional and to be a problem solver and to be using his time in situations where there is a very high probability of success.

CWII: Without putting too fine a point on this for sales managers, senior sales executives who are having a hard time getting their arms wrapped around this concept of doing things this differently, what are the economic implications of getting your sales people out of the business of prospecting so that they could focus exclusively on the business of selling?

Kennedy: Well, when you have a sales force that gets most or all of it's business by doing a lot of prospecting work, you have false economy because you have invisible costs. If we, let's say we replace a lot of prospecting with a lead generation process that begins with a series of broadcast faxes, the person receiving the fax has to request a free information package, now we send out a fairly elaborate free information package, maybe that costs 4, 5, 6, 7 bucks a prospect, the person now has to fill out a form in response to that package and fax it in, and then the sales professional's going to get on the phone with them. All of those I just named have very visible costs, there's going to be a copyrighting bill for somebody to write all that stuff, there's going to be a bill from the broadcast fax service bureau, there's going to be a bill from the printer, there's going to be postage check to write, on and on and on. And so, the sales manager, or whoever is responsible for all that, sees that very visibly. And so, the temptation is great not to do it and instead say, go make more calls, right. Because now all the costs are invisible, but they are there nevertheless, because every minute the sales person spends prospecting, fighting his way through gatekeepers to get to a decision maker, then making sixteen phone calls back to finally get an appointment, on and on and on. Every minute he spends doing that, is a minute he's not spending selling. And so, again, it's like if you own a printing company than the worst thing that you can hear when you walk in the door is a press not running, and you don't use your press as a doorstop, you don't use your press as a toilet, you don't use it for anything but to print. And, really, what you want to use your sales professional to do is sell, nothing else, you don't want him doing anything else, you don't want him doing data entry, and you don't want him doing prospecting. So, you have to be willing to live with the visible cost that replaces the invisible cost. The economics are always better. Anytime this kind of reengineering of the whole process is done in a company where I've been able to see and measure and monitor and be involved in the results, when all the dust settles, you're way ahead of the game. Recently, in the insurance agency, we went through a pilot program where ultimately the cost of getting an appointment with the sales person in the door to sit down across the desk from the CEO of a midsize company went to 300 and some odd dollars, and I'm talking hard dollars. Fax, postage, printing, audio tape, etc. And at first, oh my God, we're spending $330.00 to get the rep in the door, but the premium written during the month by this group of reps tripled because now all they're doing is sitting down across the desk from somebody who has questions but perceives them to be an expert with a solution to their problems that is ready to do business. So before, it was costing more than the $330 to get in front of each one of these qualified prospects, it's just that it was harder to figure out what it was costing.

CWII: There's one other hidden cost that you eluded to earlier and that is the cost of burnout of among sales people after doing the prospecting. Now, we're going to be talking elsewhere in this program with our friend, Barry Shamus, about this whole recruiting piece, but obviously, there's a huge cost when there's a lot of turn over in the sales department.

Kennedy: Well, the truth is that, and I know Barry well, the truth is that a lot of companies recruit winners and then get busy turning them into losers. And so, it's solving the recruiting problem, it's certainly an important piece of the puzzle, but if you take even someone who is very adept, very skilled, by personality, and background, and all of those things, well fit to be a professional salesperson in your organization, but you put them in an environment of constant struggle, stress, relatively dull, repetitive activity, even demeaning activity, if you put them into that grunt work, shoe leather environment, odds are you're going to lose them long before you got your recruiting, training, and development investment back out of them. And so, these things go hand in hand. Now, the flip side is if you can take somebody who is fundamentally got all the right skills and the right attitudes to be successful as a sales person, even including determination and persistence and all those things, and put them in an environment where they don't have to waste those attributes forcing themselves to do unpleasant grunt work they don't want to do and they get to use all of those attributes in the most positive, productive environment possible, now you take a winner and you turn them into a champion.

CWII: Let's go beyond now getting in the door and seeing the qualified prospect. We've marketed, we've gotten a salesperson sitting there in front of an ostensibly qualified prospect, what advice do you have for sales managers on how to coach their sales people what to do then and said differently, what are the characteristics of a great sales presentation?

Kennedy: Well, the good news is that the better a job you do at everything up to that point, the less stressful is the sales presentation, the more automatic, if you will, is the close. I always have a sales training friend, who does two day sales training seminars in companies, including in your industry, send their people busily to these things and he teaches 365 ways to close a sale. I'm not going to mention his name, but, I often kid him when I see him, I'll say -- "Have you found one yet that works?" -- because seemingly it makes memorizing the other 364, although it reduces the number of tapes you can put in the box. You know, the truth of the matter is the closing really should be automatic and the presentation really should be a give and take of information not a manipulation charged, sort of contest. Having said all of that, obviously, there are ways of saying things, just as there are when writing copy that cause you to be more effective than others and many of these things are very basic fundamentals that haven't changed, really, in years and years and years. Just as the fundamentals of football haven't changed, the game has changed dramatically, but still blocking is blocking is blocking. And so, there's thing's that we rely on, for example, like to apples to oranges comparisons. You never want a prospect or a client to be able to try and assess purely based on price because the lowest priced provider can get business for some period of time, but will ultimately lose business to the next lowest priced provider. And if you look at retail, Kmart held that position for years and years and years, but they were vulnerable and eventually Wal-Mart came along, and now, Kmart's wandering around out there trying to figure out who the heck they are. You don't want to be in a price position, which means that you want to structure the way that the person will compare in a way that makes dollar to dollar or apples to apples comparison impossible. Now, you may do that by value added, you may do it with different warranties, you may do it with bundling different products and services together, or all of those things. When it does come time to close, I will almost always have people structure the end of their presentation to present alternatives, not yeses or nos. That may be in packages, "A" package, "B" package, "C" package, basic, deluxe, deluxe-plus with different things bundled in. It may have to do with the way it's paid, it may have to do with the way the service is delivered, but I hate yes/no options because, clearly, it tempts - it's like flipping a coin, you're going to get some nos and you decrease the odds of getting nos if you present options.

CWII: You're kind of skeptical of sales people who go in and try and wing it, though. I've heard you talk a little bit about sales people really needing a track to run on, not necessarily a memorized presentation, but just kind of a road map every time when they go in.

Kennedy: Well, let me give you a direct analogy to speaking. I can probably stand up in front of the room and do five days without any notes, teaching the kind of things that I teach. And at times, have certainly done two or three days in that environment, but roughly 50% of the speaking I do during the year, the lion's share of that compensation is not the fee, it is the sales and the audience purchases of books, tapes, educational materials. I may get a $5000.00 fee, but I may sell $75,000.00 worth of books and tapes. And so, those speeches, although I could stand up and do them without any notes, I would be a fool to do so, because they really are a sales presentation. So I have what I call my million dollar sales presentation and probably for the last four or five years I haven't changed six words in the thing. It's precisely an hour and ten minutes long - you could set your watch by where I'm going to be in it at any one given moment in time, the gestures don't change, the body language doesn't change, the anecdotes don't change, the timing doesn't change, none of it changes, and I make sure it doesn't, not just by giving it, but by practicing it and by having it on a tape that I can play to make sure it's rememorized in my head and all of that. When the stakes are high, clearly, if we go back to advertising, if we're going to create a direct mail campaign, we're going to agonize over every word, we're going to agonize over every phrase, we're going to agonize over where the paragraphs break, where the page breaks, which sentences get bold faced, underlined and italicized, which paragraphs get indented, which don't, which get bigger type size, which get smaller type size, all of that is going to be painstakingly worked on and massaged, and in some cases tested now in use to ultimately wind up at what in direct response is called a control, the piece that you now are going to live for some lengthy period of time that works best. Well, if we do that with selling in print, why wouldn't we do it with selling in person? And the virtue of having your equivalent of a million dollar presentation totally internalized, is not so much that you are now locked into delivering it as a canned presentation that sounds canned, but that a) you know you got a winner, and b) you're freed from trying to think of what you're going to say next which does allow you to do a better job of listening, it does allow you to do a better job of diagnostics, it allows you to do the other things well because you're not worried at all about what it is you're going to say and in what order you're going to say it.

CWII: It's all terrific advice. In closing, any parting thoughts for senior sales executive, marketing executives, and people who are in sales and marketing? What do they need to be thinking about to be more successful?

Kennedy: I think at the senior level, they need to start holding everything else they do in marketing as viciously and ruthlessly accountable as they hold their sales professionals, and they need to strip out the ugly manual labor from the early part of the selling process in order to give their sales professionals the most productive environment possible. © Dan Kennedy 2005. All Rights Reserved.

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