The Sticking Point By Jay Abraham Draft: November 10, 2008 Table of Contents Introduction: Bad Economy? Good News!........................................................................... Chapter 1: Is Your Business Stuck?......................................................................................... Chapter 2: Stuck Losing Out to the Competition? ............................................................... Chapter 3: Stuck Not Selling Enough?.................................................................................... Chapter 4: Stuck With Erratic Business Volume? ................................................................ Chapter 5: Stuck Failing to Strategize?.................................................................................... Chapter 6: Stuck With Costs Eating Up All the Profits?...................................................... Chapter 7: Stuck Still Doing What’s Not Working?.............................................................. Chapter 8: Stuck Being Marginalized by the Marketplace?.................................................. Chapter 9: Stuck With Mediocre Marketing?......................................................................... Chapter 10: Stuck Still Saying, “I Can Do It Myself”?.......................................................... Chapter 11: How To Get Going and Growing in a Crisis Economy................................. Chapter 12: Congratulations! You’re Unstuck!.................................................................. Introduction Bad Economy? Good News! I love a bad economy. So do my clients. And after you read this book, so will you. I love poor business climates—like the one we’re in today—not because of the pain they cause people. Far from it. I love them because when you move beyond the worry and fear, you discover that areas of growth are actually more plentiful than they are during boom times. In a bad economy, you can walk all over your competition, lap the field, run circles— you pick the metaphor. The main thing is that you can win easily…if you know how to benefit from bad times. Everyone else is dropping out of the race, and you’re seeing the checkered flag. You’re looking forward and everyone else is looking backwards. They’re terrified, and you’re making a fortune. You’re seeing opportunities and overlooked markets, transactions, and areas of thinking that no one else saw in good times, so they certainly won’t see them in times of financial struggle. This book makes a unique promise. Anyone can show you how to succeed when all the indicators are up. I’m going to show you how to succeed as never before…when the nation’s and the world’s financial picture looks bleak. As I was completing this book, the stock market’s gyrations were unprecedented. On one day in particular, the market dropped more than 700 points. But on that same day, 100 stocks went up. Why is it that even when the news is at its worst, some companies are having their best year ever? And why can’t you? You can, and in this book I will show you precisely how. Our starting point is to ask, respectfully and reverentially, whether your business or enterprise might be stuck. A “stuck” business, whether entrepreneurial in nature or a Fortune 500 company, is one that fails to grow predictably every year, every quarter, every day. If you’re being carried along by the marketplace, then the moment the marketplace dries up, your business is going to dry up, too, because you’re not in control of your destiny. In good times, stuck businesses don’t even realize they’re stuck! Imagine that a business made $100,000 last year and $110,000 this year. They could argue that they are growing, but in actuality they’re only growing because of the organic growth of their market, not because of any proactive or strategic action they’re taking. So when the market dries up, it takes stuck companies down with it. The top four reasons for stagnation, in my experience, are the following: 1 Not incorporating growth thinking into everything a business owner does; 2 Not measuring, monitoring, comparing, or quantifying results; 3 Not having the detailed, strategic marketing plan with specific performance growth expectations; and 4 Not knowing how to set appropriate, specific goals. These problems are magnified in tough economic times. First, you’ve got the problem of lower revenue because the business climate is poor. And second, the concept of recession or hard times in and of themselves freezes people. They get scared. They don’t know what to do, so they tend to do nothing, or they tend to do more of things that weren’t working in the first place. The good news for you is that your competition probably isn’t reading this book. In fact, in challenging economic times like these, it’s very likely that your competitor is already out of business or scurrying to stay afloat. The purpose of this book is to show you how to make sure the same thing doesn’t happen to you. In fact, I want to take it a step further—I want to teach you to love recessions and to embrace economic downturns, to even learn how to profit handsomely from your business challenges, adversities, and even your competition. That’s because when the going gets tough, the competition packs up and leaves. And if you know how to be strategic; if you know how to direct your business, your division, or your department intelligently; if you know how to grow and sustain great, high-profit clients; and if you know how to capitalize on the shortcomings of your competitors, you’ll quickly find that you can enjoy even more success and make even more money than during so-called boom times. If your business is stuck, I’ll get you unstuck. And by the time you finish this book, you’ll feel the same way that many prosperous business people feel about tough economic times—bring ’em on! You may not love the bad times more than good times, but you’ll have the confidence that you’ll be able to profit, no matter what the economy—or your competitors—are doing. You’ll see options, opportunities, and profit possibilities that weren’t evident in the past. You’ll have a highly specific action plan to reach stratospheric levels of growth. All while the commentators (who aren’t businesspeople!) on the financial news networks are wringing their hands daily. As a business owner or professional, you should be anything but fearful in a bad economy or a recessionary period. In a good market, almost all anybody has to do is suit up and wait for business to arrive at the doorstep. The “jet stream” of prosperity carries everyone forward. They don’t have to be good businesspeople. They don’t have to be strategic. They don’t have to offer their clients unique advantages. They don’t even have to be growth-minded. They just get carried along, topsy turvy. In spite of all their ineptitudes or flaws, they will still grow along with the climbing economic trend. In a bad economy, these people become paralyzed. The music stops, and they don’t know what to do. They retreat. They stagnate. They spend much more time doing more of the same truly ineffectual things they were doing before, but their ineptitude is no longer disguised by the enormous force of the upward momentum of a positive economy. Such businesses are like hang gliders, hot air balloons, or glider planes. Once they get moving, they can go for hours. But when they find themselves buffeted by changes in air pressure beyond their control, their crash landings are scary to watch. A handful of businesses actually become strategic during hard times. By taking on a growth-minded strategy, these businesses capture the vast majority of new clients in the market—people who weren’t already buyers or who weren’t ready to move forward, or perhaps those who didn’t have the need for a given product or service before. But even more important, strategically minded companies will capture—“steal” in an ethical manner, if you will—15 to 20 percent of the best buyers from all of their competitors. So if you’re attracting all the new buyers in your market and you’re appropriating, say, 15 to 20 percent of the best, most profitable, and most repetitive buyers from half a dozen of your competitors, you’re doubling—believe it or not, redoubling—what you might have done even in an up market. Even if the bottom appears to fall out of the economy, or your industry in particular, you can still grow 60, 80, or 100 percent or more, while everyone around you is stalling or even failing and collapsing. If you really get serious about understanding value propositions, the concept of preemptiveness, irresistible offers, and the other potent concepts I’ll share with you in this book, success will be yours in a most tangible, thrilling way. In addition, every business has at its disposal twenty to fifty or more highly “upside- leveragable” impact points—or (eX) factors. These (eX) factors can create exponential income if you recognize them and harness them. They make people more likely to call you or go to your website. They make it easier for you to close sales and deals. They turn one- time buyers into clients who buy every quarter, and they turn non-buyers into people who buy something. These are the surprisingly, even embarrassingly, simple things you can do to bring in more prospects, more sales, more profit, more conversions, more markets, and more ways to start and sustain a relationship. If your business has fifty such (eX) factors in it and you increase your effectiveness in, say, just ten of those leverage areas, you will be poised not just for survival in challenging economic times but in fact to thrive as never before. W. Edwards Deming recognized these factors in the manufacturing world and as a result helped develop corporate titans. I’ve taken this approach and applied it to something far more important—the revenue-generating process for your business. Again, no one welcomes recessions because of the pain they cause people. Rather, highly successful, strategic, and totally proactive business people embrace so-called hard times because they cleanse the marketplace of marginal competitors who aren’t strategic but instead are just reaping the benefits of good times as opposed to being really good businesspeople. That’s why I feel comfortable saying that I’m going to teach you to love recessions. You can have your best years while those around you are facing disaster. You’ll come out of a downturn stronger, more prosperous, and poised to grow faster than you ever hoped, or even imagined. Business success really is as simple as finding what I call an “under-recognized” or changing need and filling it in with wisdom, empathy, and understanding that no one else can demonstrate or display. To put it another way, you are solving problems people may not even clearly be able to articulate. There are three categories of problems: your own problems, your competitor’s problems, and your market’s problems. Since time immemorial, the people best skilled at solving the biggest, most important, impactful problems have been the best rewarded. That has always been, and that will always be. Chances are that in hard times, both you and your competitors won’t even know the problems you yourselves are struggling with. You might not even be able to put the problems you’re facing into words, let alone find solutions. So if you can get clarity about what problems you’re confronting and trying to solve, you can become a master at solving those problems for yourself and for your marketplace. And if you do, rich rewards await you. Every once in a while, an entrepreneur or company comes along that totally gets it. Take, for example, JetBlue, the airline that recognized that businesspeople traveling by jet are bored out of their minds. So they installed TVs for every seat on the plan. A simple idea but a powerful one. Or years ago, Howard Ruff recognized that beleaguered middle class investors were being ignored by high-class wealth publications, so he made a fortune providing advice to people who weren’t rich…yet. American Express studies your purchasing habits and tailors its direct mail offerings specifically to your likeliest purchases. One of the prevailing problems I’ve identified in the marketplace is what I call “ambivalent uncertainty.” This is where your client is not just undecided about whether to buy from you—he’s unsure whether he should buy at all. This is like the person who stands in front of a multiplex, looking at the names of all the movies, unmoved by any of them, unsure whether he really wants to see a movie in the first place. How do you get him to commit to buy a ticket to your movie—which then opens up the likelihood that he’ll buy popcorn and soda once he gets into the theater, and will buy your movie on DVD a few months later? Or the consumer in the big-box furniture store, debating whether to replace his bland, unexciting furniture…with even more bland, unexciting furniture. How do you get him off the dime and into his wallet? Ambivalent uncertainty occurs when your prospects aren’t entirely sure that they need your product or service, and they aren’t completely convinced that you are the right entity to solve their problems. If you can solve just those two (eX) factors in your business, removing your prospects’ ambivalence and uncertainty about whether they need what you offer and whether they should choose you over all the rest, once again, enormous success is yours for the taking. I’ll show you how. So if being “stuck” is the problem, what does it mean to get your business unstuck? You break down your numbers, not just month to month, year to date, and year to year, but also into categories like how many leads, how many new sales by product, average sale, and average product-source. Then, you analyze any and all correlations, implications, and anomalies this data tells you. You have a systematic, strategic process in place that is designed in a predictable, sustainable, and continuous manner to bring in prospects and first-time buyers, and keep advancing and enhancing them forward to recurring purchases in a predictable enough manner that you can look at your numbers today and accurately predict what your business will be like in ninety days, one hundred days, or some other timeframe. You’re able to engineer specific, predictable growth, year after year, because you’re zigging while your competitor zags. He’s still going door-to-door but you’re doing direct mail. He’s running ads that don’t pull and you’re tying in with affinity groups. And so on. You are producing not just incremental gains but exponential gains year after year. You achieve this by harnessing the little understood power of business generating to drive multiplied sales and profits. For example, Costco studied its numbers and realized it made more money from selling memberships than from selling goods in its stores! So it tailors its advertising and marketing to bring people back into the stores to buy things on a regular basis…so they will continue to keep their memberships in good standing. And a TV show, “The Biggest Loser,” promotes a The Biggest Loser Club, whereby an individual pays a yearly membership fee to lose weight in the online Biggest Loser Club. More than a