Mike Michalowicz's new book Get Different is the topic for this episode of Cracking the Cash Flow Code. We'll learn why best practices in your industry doesn't cut it. If you can't find ways to be different in how you present your company, no one is going to find or care about you. Learn what you can do to stay away from this trap in this fast-paced episode to one of the best guests we have on our show.
By his 35th birthday Mike Michalowicz had founded and sold two multi-million dollar companies. Confident that he had the formula to success, he became a small business angel investor… and proceeded to lose his entire fortune. Then he started all over again, driven to find better ways to grow healthy, strong companies. Mike has devoted his life to the research and delivery of innovative, impactful entrepreneurial strategies to you.
Mike is the author of Profit First, Get Different, The Pumpkin Plan, Fix This Next, Clockwork and other small business must reads.
Narrator: Welcome to Cracking the Cash Flow Code where you'll learn what it takes to create enough cash to fill the four buckets of profit. You'll learn what it takes to have enough cash for a great lifestyle, have enough cash for when emergency strikes, fully fund a growth program, and fund your retirement program. When you do this, you will have a sale‑ready company that will allow you to keep or sell your business. This allows you to do what you want with your business, when you want, in the way you want.
In Cracking the Cash Flow Code, we focus on the four areas of business that let you take your successful business and make it economically and personally sustainable. Your host, Josh Patrick, is going to help us through finding great thought leaders as well as providing insights he's learned through his 40 years of owning, running, planning, and thinking about what it takes to make a successful business sustainable and allow you to be free of cash flow worries.
Josh Patrick: Hey, how are you today? This is Josh Patrick. And you're at Cracking the Cash Flow Code.
And my guest today is the one and only Mike Michalowicz. I always love having Mike on the podcast. Mike is like this really interesting, sort of, gnomish guy. And he looks more gnomish than normal because he now has a beard.
Mike: Look at that, huh.
Josh: Mike has written about nine zillion books. He's probably best known for his book Profit First. Although, I actually like Fix This Next. This is my favorite book. I have not read his new one which is Get Different. And that's what we're going to talk about today. It’s Mike's new book. So, instead of me yammering on, let's bring Mike on and he can actually talk about the book himself.
Hey, Mike. How are you today?
Mike: I'm doing well. I feel like a broken record. It is always great to see you. I just-- I don't know, I just feel joy every time I'm connected with you so it’s good to see you.
Josh: Well, I feel the same way. So, we can have a nice mutual--
Mike: Bromance going on.
Josh: Yeah, something like that.
Mike: You know, one of these times, we’ve got to sit back and just crack a beer together or something. One of these times. One of these times.
Josh: We've been talking about that for a couple years now, but COVID got in the way.
Mike: I know. I know.
You know what? My wife and I went RV-ing for the first time ever. It's funny how there's this kind of cascade effect. I needed a new car. I'm like, “I'm going to get a car.” My wife says, “Why don't you get a pickup truck?” I get pickup truck. I have a beard. And then, she's like, “Well, you have a pickup truck, we should tow things. And like, let's tow an RV.” So, we started RV‑ing. No intention, initially, but we've kind of stumbled our way toward it. So, we might come to New Hampshire, Vermont and touring that part of the world and just hanging out with you.
Josh: That would be great. We'd love to have you. We’d love to host you here.
So, let's talk a little bit about your book.
Mike: It's stupid. It’s a horrible book. If anyone buys it, they're fools.
Can I say I'm super-- every time I write a book, I'm like, “This is the best book I've ever written.” And I feel this is the best.
Josh: Well, there’s a reason behind.
Josh: It's called practice.
Mike: Maybe. Maybe, that's it.
I literally feel this is the best work of my life. And I'm very proud of Profit First and Fix This Next, but this book.
So, what I started doing was sort of querying audiences and readers about 10 years ago. This book is about marketing. And I was asking them, “What is your primary source of opportunities?” The number one, hands down-- and this is like the 99%‑er. The number one determinant source of leads is clients. ”Existing clients refer me new business.” Word of mouth which usually is generated by clients is the runner up. And I'm like, “Oh, my gosh. This is wonderful because it's an affirmation that you're doing good enough work for those clients, for them to feel that they should refer you to others, but it’s extremely precarious because you are dependent upon your clients to be your marketing team. And what if that client fades to oblivion, doesn't work with you anymore, decides not to refer you business? Now, you're in trouble.
So, the question I asked myself is, “How do we put ourselves in the driver's seat?” How do we throttle leads that when we want more opportunity, we can do that? If we want to slow things down, we can do that. And that's what this book is about. It's about marketing effectively so you're in control of your lead flow.
Josh: So, what is the number one thing you should be doing?
Mike: The title, Get Different.
Here's what's so fascinating. So, when I asked people about marketing, I said, “Well, how effective is it?” And they said, “Well, it's great when clients refer me business but there's these droughts and stuff.” I said, “Well, what do you do when you desperately business?” “I do industry best practices.” I said, “Well, great. How's that serving you?” And they're like, “It doesn't seem to work.” And my conclusion is industry best practices are a dangerous thing when it comes to marketing because it's already saturated.
Here's what I mean. I studied how prospects, how humans, can receive information. So, this is going to be a little bit technical, but you’ll probably actually know more about it than me because you're more of kind of a gearhead than I am. But, here's what it is. When you or I receive information and it hits our senses - sight, hearing, smell, it gets sent to our brainstem where there's a sequence of processing. There's this thing called the reticular formation which is a web of neurons. It includes this component called the reticular activating system which people spoke about. But the reticular formation, it’s primary job is to ignore all the stimulus around us because there's a constant source of stimulus.
I look around my desk now, there's hundreds and maybe thousands of things looking for my attention. And if I pick up anything, I've got a little purple pen here, I could be enraptured with this pen for days, if I wanted to. It’s purple. It does purple ink. Whoever thought of the word ink? Who's-- you know, it just goes on, and on, and on.
But the reticular formation says, “ignore things unless it's one of these three qualifiers, in this order. If it is a threat, you’ve got to pay attention to it because we could be in real trouble and our survival it depends on this.” The second thing is, “if it's an opportunity, if there's something that will serve me, pay attention to because it serves me.” The third thing is, “if I don't know what it is, I have to evaluate it because it could be a threat, it could harm me, or it could be an opportunity, it could serve me, or it could be innocuous and I could ignore it. But if it's something I've never experienced before, I have to pay attention to it.”
Well, what happens in marketing is marketing is a piece of stimulus. If you do industry best practices, our mind’s already become habituated to it. Meaning, we've seen this before and we already know it's ignorable and, therefore, we ignore it.
I'll give an example. The first “Hey, friend” email I got. Did you get one of those, Josh? The “Hey, friend” email? A long time ago an email that starts off and goes “Hey, friend”
Josh: Yeah. I hate those. I hate ‘em.
Mike: I hate ‘em, too. I hate ‘em, too. I hate ‘em, too.
But the first one-- maybe you were like me. The first one I saw, it said, “Hey, friend,” I was like, like, “Oh, my god. I have a friend who's reaching out to me saying friend. I haven't heard from this friend in so long. How friendly of them?” And I literally read the entire thing. But, you know, halfway through it, I'm like, “Oh, this is a piece of marketing.”
By the second email that came through that said, “Hey, friend,” I'm like, “Hold on. Is this really a friend or is this a friend poser?” By the third one, I've never read a hey friend again. I hate them, too. That hatred - actually, it's a form of ignoring. It's just like-- it disqualified. That's habituation. That's the reticular formation saying, “Know what this is. It's irrelevant. Ignore it.” And that's why a “hey, friend,” a best practice, is not effective because the consumer mind is used to it. So, we have to pierce through this.
And so, what we have to do is get different. Do something that no one is doing with your community. Don't do an industry best practice from your industry. Maybe do an industry best practice from another industry. Take it in. And then, deploy it in your business. As long as your prospects have never seen it before that will jolt ‘em to life. They'll have to notice it.
Josh: Actually, that's one of the things I recommend people do all the time. You stop going to your trade association meetings and go to meetings of other trade associations that you're not involved in.
Mike: Yes. I'm 100-- I'm in 99% agreement. The 1%, I think we still go to our trade, our own industry trade events not for marketing though. We go for other learning. Collaboratives come out of that stuff. So, there's opportunities there but it ain't marketing.
Mike: To your point, it’s taking it from somewhere else.
I did this myself. I went to a cleaning association. They make cleaning products and was there, because I was the speaker. But I was there and I sat in and listened. And one of the presenters said, “Oh, one of the best practices in the cleaning industry is put an 800 number on the back of your product because, when people are in the store and they're considering your product, they see an 800 number with a pre‑recorded message, 10% of the people will dial that number to learn more about the product and 50% of people will end up buying where they would’ve just ignored it before. It increases our overall purchase rate by 5%. or whatever. I was like, “Oh my gosh.”
I did this with my book, The Pumpkin Plan. I've never seen another author do this, add an 800 number on there saying, “Learn about this book.” And this is when Barnes & Noble’s and retail stores were more popular than Amazon is today. We had people on the shelf. Sure, they were reading it because my sales went up about 5%. Take from other trade industries and bring it into yours if it's different.
Josh: So, I've got a question for you. Profit First Professionals is very successful group of people. You've done a great job of building that. What have you done differently to market that organization?
Mike: So, it's interesting. When you find different, you milk that cow until there's no milk left. And the first thing we did differently was the idea of pay yourself first principle applied to business was different. So, the concept was different. We matched up that to the audience's pain. The audience's pain is I'm an accountant or bookkeeper and I'm becoming commoditized. Software's getting so sophisticated. It’s doing what I'm doing. And my clients just see me as a data cruncher and that's it. So, the problem was, I need to become more consultative. I need to be seen as a consigliere a to my client, someone of significance. And the opportunity was to be a profit consultant using a unique new technique to drive profit in businesses.
So, in the get different model, one is present something different. And how we did it was actually through speaking engagements and the book itself. Books often don't market membership organizations. They do it but we really leaned into that. So, that was different. You often hear through email marketing, saying, “Hey, join my membership organization,” or maybe on social media. We're actually using the book itself as a marketing method. It’s better than the book.
The second thing is, once you're different, that gets attention, but you also must be attractive. Meaning, it must serve a problem I have or must compel me in some way. It must be an opportunity for me. Maybe it just entertains me.
Here's an analogy. I could say maybe I'm an attorney and I've got to win a case. And I really want to get the attention of the jury on my side. So, I want to win their attention. This is a form of marketing. I can get different. I could dress like Bozo the Clown with the big floppy shoes, the squirting lapel flower, and the wakawaka horn they have on their shoulder. That, I guarantee, will garner attention but the problem is it doesn't pass test number two - attractive. It's not attractive. That's repelling. People will say “Who’s this clown?” Like, literally, Who's this clown? And, therefore, I'm not winning them over.
There's a reason why you see attorneys-- some attorneys wear these outfits that look a little bit outrageous, a little bit bold. That is actually to be different and get recognized. They get more attention than, “Oh, here's another attorney in their frumpy suit.” The fine line they got to move or navigate is, “Is this attractive?” Meaning, does the jury notice me? But also, are they compelled by me? Are they intrigued? Are they engaged?”
So, with Profit First Professionals, we differentiate through the book marketing. That's a typical. But we attract by saying, “You have a problem being commoditized? We will make you de‑commoditized.”
Josh: So, you just brought something up which I think is a really big deal. And I don't know if you knew you did it--
Mike: I probably did.
Josh: --but I have developed a really bad habit. I have many bad habits, but this is a new bad habit. My new bad habit is--
Mike: Is it smoking?
Mike: Oh, good. Good.
Josh: No, it has to do with LinkedIn. When I connect with somebody new on LinkedIn, I always ask them for their website. And the reason I ask them for the website address is, one, I want to see if they'll actually give it to me. But, more importantly, I want to see what they're saying. Are they talking about the stuff they do or the problems they solve? And you just talked about problems. And I will tell you that at least 90% of the websites I look at talk about the stuff they do and they don't ever mention the problems they solve.
Josh: Now, to me, that sounds like a differentiator.
Mike: Right because it’s frequent, talk about the problems you solve.
You know, the other thing, if you talk about what you do, you're putting friction in the process because your client has to say, “Okay, this is what you do. How does this relate to what I need?” And they have to make the bridge.
You know, people don't want new. They want new and improved which means they want something they can link to and say, “Oh, I get that. That's the improved part” and then see how you're serving. That's the new part.
So, in our website, when we say, you know, “Have you become de‑commoditized?” Actually, it's one of the things that happens when you go to profitfirstprofessionals.com saying, “Have you been de‑commoditized?” And then, we explain a little bit more what that means. I'm sorry, “Have you been commoditized, not de‑commoditized? “Have you been commoditized?” Meaning, are you seen as a number cruncher and that's it? We want people to say, “Yes, that's me.” Then, it says, “We have the solution.” And then, we talk about what we deliver that satisfies that. That's a key part of marketing.
But I'll tell you there’s one other part. So, as I was writing Get Different, I discovered there's a simple acronym we can use to analyze any marketing that will be effective or not. It's really simple. It's called dad, D-A-D. First one is differentiate. We talked about that. Do something that’s different because it garners attention every time. It gets past that reticular formation. The second part is it must attract. Meaning, speak to the audience's needs, problems - relatability. The third part is direct.
Josh: In the language they use.
Mike: In the language I use, yeah.
And then the third component is direct. And direct is give them specific, explicit, singular direction to take, but it needs to be reasonable.
Say, I sell automobiles. And you're looking for a car. And like, “Hey, you looking for a car?” And I have that balloon out front with that floppy guy’s arms. And you're like, “Wow! That was different” which is, by the way, so common. It's no longer different. It doesn't work. But, say, you see that and, for whatever reason, compels you. And, you know, it says, “Come in. Meet with me. And we can talk about cars.” You come in and I say, “Hey, Josh. My name is Mike. Write out a $100,000‑check right now. And, with that secured, we can find any car of your dreams.” You’d be like, “Who are you?” Like, “What? FU.” It's unreasonable.
But, if I got you in or was in contact with you and said, “Josh, I love to evaluate the car that you're considering. I will give you a list of the inventory that matches your needs. I simply want to ask for your permission to contact you. If you're in agreement with that, what’s the best way for me to contact you and reveal or show you the inventory that I have?” Get your cellphone. That is very reasonable ask. I'm explaining why it's reasonable. Now, it's one step closer.
The goal and the balance here is we want to do something that’s safe and reasonable for the prospect but, as the seller, I want to move you as efficiently as possible to the ultimate transaction which is, you know, I know you like to buy cars for $100,000 that's why I picked that number.
Josh: No. I, actually, don't.
Mike: You know, I know. Your listeners are like, “We know nothing about Josh. He smokes. He likes to buy cars that are six figures. What else don't we know about Josh?”
Josh: Josh is cheap. That's what you should know about Josh. You know, speak--
Mike: He’s a Dead Head fan. That's true.
Josh: That's for sure. That's for sure. I have seen the Dead Head fans.
Mike: Every time I listen to Dead Heads, I think of you, the Dead Head.
Josh: That’s cool.
So, I recently had-- actually, it’s almost a year ago, now. I had the Subaru dealers on my podcast. And speaking to car dealerships, they had the most interesting way of garnering attention I've ever heard of from a car dealership.
Mike: Oh, tell me.
Josh: They had a great big flat grass lot with lots of grass that needed to be cut. So, in the spring, instead of using a lawn mower, they bring in a bunch of goats. And the goats would come in and eat the grass. And people would come in to play with the goats and look at cars.
Mike: So smart.
Josh: It was absolutely genius. I just loved. It was great.
Mike: Yeah. What an immersive activity. And if you can trigger marketing that triggers an experience-- if you have marketing and triggers and experience or memory, then we go into recall, right? So, you're recalling an event that happened a year, or two, or three ago, in a favorable way, a favorable experience is fantastic.
I'll give you another example. I was working with a security firm and they provide armed security. So, this is some serious stuff. And I asked him, “Who's your key client you want to land?” They said, “Oh, it’s this client. And they have this building and they’d be perfect for us.” And I said, “How are you marketing to them?” They said, “Well, we're using the industry best practice, postcard mailers.” I'm like, “Okay. So, that's the one thing we're not going to do.”
What we did is we knew the building they were in. And it was like a five‑storey building. We knew the C‑suite. And we knew where the CEO would sit in this building. So, what we did was, on the sidewalk, in the public area, we put a sign up that said, “We'd be honored to secure your facility.” Then, we had the owner of the business out there in a guard uniform, sitting there with another sign that had his cell number on it that says, “I can speak right now.” It said, “I can speak right now” and cell number. We had a courier deliver a box - unique, different, lumpy mail, and inside was a pair of binoculars and a sign that says, “We want to earn the right to be your next security company. We're ready at any time, including now. Please, look outside your window with these binoculars.” Well, what are you going to do? Not?
So, the CEO, she looks out the window and, sure enough, there is the owner of the business saying, “I'm ready to speak with you right now. Here's my number.” She calls immediately. He picks up. He's like, “Hey, uh, we're interested in being your security company.” She's like, “I've never experienced that. That was [inaudible 00:17:48] me. I never experienced this in my life. Absolutely, let’s have a conversation.” They won the business.
You know, our willingness to be different is the opportunity. And here's the irony, most businesses are terrified to be different. What if they call the police? You know, what if the news comes out and says you're on public property with a sign. We're going to-- you know, people are afraid of the embarrassment or the failure and much more comfortable with stuff that's not working. The irony to successful different marketing is actually getting over our own ego.
Josh: Yeah. Like, for example, in the wealth management business, we actually put our prices on our website. You go to our website and you can find out what we charge. Now, that's not unusual in the tech world because everybody does it. And if you don't put the price of your software, I'm going on to the next thing, and I'm not even going to consider it.
Josh: But in the financial services world, nobody does it. So, it's a differentiator.
Mike: A differentiator, again. People notice.
You know, what was-- there was an insurance company that did that. Was it Progressive? I don't know if they still do it--
Josh: Yeah. They did, actually--
Mike: --where you can get their bid.
Josh: They would actually bid their service versus all the other guys’.
Mike: Right. Yeah, there you go. Different, unique, memorable.
And the funny thing is, even when we hear about these different strategies, so few other people do it. The biggest impedance to effective marketing really is our own fears.
I'll give you another example. On our own street here. I was walking down the street and I noticed there are three fitness studios all within a block and a half. Two of them share an adjacent wall. They're so close to each other. And these are all old retail stores. You've been out here to Boonton, New Jersey before. They're all retail stores converted to different things. So, they have window displays. And every single one did the exact same marketing, before and after of their clients. So, you see, you know, fat schlubby guy - ripped guy, awkwardly‑looking woman to amazing‑looking woman in bikini. And they're like, “We can do this for you.” And I noticed myself and everyone else just walks by these things because that's all you ever see. That's the best practice.
So, here's the thing I devised, and no one here took it. Another fitness studio took it and it worked. I said, instead of having the best practice - it never works, let's get funhouse mirrors. So, we got-- you know, the mirrors that like make you look short and squat?
Mike: So, we have the short and squat and the tall and lean. And above the short and squat one, it says, “before.” We wrote the text. And above the other one, we put “after.” And so, now people are walking by the window display, they see themselves in a before and after in a funhouse mirror. Talk about different. We’ve never seen it. Talk about attractive. We love funhouse mirrors to look ourselves kooky and funny. So, people are outside these places, posing and stuff for themselves. And then, the sign says, “We just transformed you in the mirror. Let's make this a permanent transformation in your life. Come inside.” And the foot traffic skyrocketed because they're willing to be different.
The irony is, I proposed it to these other folks here and they’re like, “Oh, I don't know. What will people say?” Hopefully, something. They will say something. And that's the goal,
Josh: I would add one more thing to that. I would have a simple little thing on the sidewalk where they could take pictures of themselves.
Mike: Oh, there you go.
You know, that’s-- as I was writing Get Different, one thing I wanted to avoid was saying “this is a marketing plan.” It says that these are marketing experiments. And what I like about the idea or the word experiment, it means you expand on it. The ideas are never done. Try it out. It doesn't work, try a different iteration of it. You have an idea to expand on it like a spot to take pictures, genius, try it out. And the people that are doing this are finding that your first idea is not often the ultimate idea. It's just the starting.
Josh: It almost never is. I mean, one of my mantras and it’s sort of a behavioral economics thing which is the more effort you put into something, the less likely you're going to give up on it.
Mike: That’s true.
Josh: So, there's a mantra I love which is called fail fast, fail cheap. In other words, if I do lots and lots of small experiments, 80% to 90% are going to be total flops.
Josh: 8% or 9% will be okay. 1% or 2% will be homeruns.
Josh: So, you’ve got to keep experimenting and the final’s homerun’s.
And I like your point is fail fast and cheap because if you fail long and expensive, you're likely to stick with it, even though it's failing, because you're now entrenched in it.
Josh: There's a principle called sunk cost.
Mike: Yeah, sunk cost. Yeah.
Josh: And what they've proven is the more effort, and the more time, and the more money you put into something, the less likely you are ever going to have to give up on it. And that's the way it is.
Josh: Hey, Mike. This is a ton of fun. And we could go for five or six hours.
Mike: Oh, let's do it. Okay, let's keep going.
Josh: Okay. Unfortunately, we're out of time.
Mike: Oh, I thought-- is that what were you proposing?
Josh: We're out of time.
As you know, this is my commute cast.
Mike: I know. I know. I know. I love it.
Josh: So, when is your book coming out and how do we find it? I assume it's all in the normal places?
Mike: Yep. September 21st, of this year, of 2021. The book is in all places. The title’s Get Different. So, Amazon, Barnes & Noble. But it's all at local bookstores, too. I definitely encourage you supporting them.
And if you want to get a taste for it now, you can go to gogetdifferent.com. That's the website dedicated to this. There are free resources there. One cool thing is you'll find the case studies, including the weight room. There's other case studies up there, really cool experiments you can start doing even before you read the book. gogetdifferent.com.
Josh: That sounds great.
And I have two things I would like you to do.
By the way, if you're watching us on YouTube or Facebook, you have to wait for a couple of weeks. If you're listening to the podcast, the podcast is actually coming out the week before your book’s released.
Josh: So, it's good timing.
Mike: Excellent timing. Amazing.
Josh: Good timing.
Josh: And I've got two things I want you to do. First, and I ask this every single episode. I'm going to ask it again. And I know you're getting bored listening to it but please do this. Go rate and review the show.
Mike: Do it.
Josh: It's important for us.
Mike: It’s a big deal.
Josh: It's a big, big, big deal.
Mike: It's the best way for a podcast to gain and garner further exposure. So, if someone does that for this show, you're being of service to Josh. So, please do that.
Josh: Yes. I really appreciate if you do.
And the second thing is my second book is out in the wild. And I would love to have you go to it and get it. It's called The Sale Ready Company. It's a continuation of my friends, the Aardvark family. And we're getting our patriarch ready to retire. And he's got to go through a whole bunch of stuff, deal with a completely incompetent and horrible son, and make all the things they have to do to get there. You're going to have a ball reading it. I had a ball writing it.
It's really easy to get. It’s in all the places you can buy books. And you can also go to the salereadycompany.com. And there's a whole bunch of bonuses there you can get free. And I invite you to get the book. Read it and go to Amazon and leave a nice rating and review. If you hate it, you can say it, but I hope you love it and give us five stars and tell us why.
Mike: And, if I may add to it, what I love in The Sale Ready Company that the incompetent son, the name you gave him was ideal. It's Mike Michalowicz. It’s the name of his son. So, I love the character.
Josh: Yeah. He was a fun character to write. He’s, you know--
Mike: Any relation to living or past individuals is pure coincidence. I like that you added that part in.
Well, that's how it is.
So, hey, this is Josh Patrick. We're with Mike Michalowicz. And Mike is a great guest, as you can tell. Go read his book. Read all of his books. I can't tell you how many people I get on this podcast or talk to that say, “I have read every single one of Mike's books. He's my hero.”
Mike: Oh, love it.
Josh: So, you're with Mike Michalowicz. And this is Josh Patrick. You’re at Cracking the Cash Flow Code. Thanks a lot for stopping by. I hope to see you back here really soon.
Narrator: You've been listening to Cracking the Cash Flow Code where we ask the question, “What would it take for your business to still be around a hundred years from now?”
If you've liked what you've heard and want more information, please contact Josh Patrick at 802-846-1264 extension 102, or visit us on our website at www.sustainablebusiness.co, or you can send Josh an email at email@example.com.
Thanks for listening and we hope to see you at Cracking the Cash Flow Code in the near future.