On today's episode, you get to hear part 2 of a recent interview Russell did with Jay Abraham.
I think this is the point that I don't think most entrepreneurs and business people think about. Most business owners think of their business as, what is the product they sell? Like I sell an iPhone, or I sell funnels. For me, that's not how I look at my world at all.
Russell Brunson: What's up everyone! This is Russell. Welcome back to part two of the special, "Jay Abraham Interview Series". I hope you enjoyed the first episode, it was really fun to have Jay ask me a whole bunch of cool questions, and hopefully you got some value from the conversations. In this next episode, I'm going to release the second part of this interview, another 20 or so minutes long, in this one we start talking about internal company culture vs customer culture, which is something that I've... Been really good at one of these, and I struggled the other one and things I'm learning.
We talk about Two Comma Club Awards and how we use that to build a community and to build amazing culture. We talk about bringing customers on as employees. We talk about having ambition going after multiple big businesses and how I believe entrepreneurs are called to serve. We talk about acquisitions and building funnels. We talk about the three things that determine success in any offer, which you guys know as you've been around my world for a long time. It's "Hook, Story, Offer", we go deep in "Hook, Story, Offer".
We talk about a whole bunch of other cool things. So, again, this next... It's insane. This interview, this next part is only 21 minutes long or something, and how much stuff we covered is... There's a lot in there. So hopefully, you'll get a lot of value from this episode. If so, let us know. And I'll see you guys afterwards for part three on the next episode.
Jay Abraham: One gradient away from talking about DotCom Secrets, but I want to hit it on one more thing. Let's talk about Culture because I think you must have a great culture in your organization to keep growing at that rate. And also, let's talk about creative collaboration because it works many ways, it can be affiliate joint venture, it can be sharing knowledge, expertise...Take those macro thoughts and run with them any way you want.
Russell: So, create culture is important in two sides. There's the internal company culture, but there's also the culture of the customers. And both of those are different, but they're very powerful. So if you look at ClickFunnels, one of the most powerful things we did was not just creating a software platform, but I wanted to create a movement. I wanted... If you look at our people, they call themselves funnel hackers, they all wear t-shirts of funnel hackers, they have people who tattoo it to themselves. They're part of something bigger than just "oh, I use the software". When you use someone's software, the software changes, the one gets better, they'll jump around. But when they're part of something bigger, they're part of a culture, they stick for forever. And so for me, and I wrote about this in my expert secrets book, I wrote a whole chapter about how do you create a movement that gets people connected, where they don't leave you? And there are a lot of different, a lot of ways to do that.
One of the most powerful, and I don't know if you guys have seen these before, but we launched an award inside of our company called the Two Comma Club Award. And there's two commas because there's two commas in a million dollars. So anytime someone makes a million dollars inside of a funnel, they get this big, huge thing. It's a gold record with commas on it, and they come to our events, they come on stage, they get recognized and all these things are happening. And for people when they first start seeing that, that's their goal, that's their mission, that's what they want to do. I think it was... Napoleon Bonaparte said that it's amazing what a man will do for a scrap of ribbon. It's the same thing. All of us want to be rewarded and I think in every business now, that's something that people can do.
So we did it with entrepreneurs, this became the award show for entrepreneurs. But now we've seen people inside of our community who modeled this for their community, so there's people who are musicians who are using funnels to grow their companies and they have awards for musicians. You get your first 10,000 songs downloaded, you get this award. You get a million songs downloaded, you get this award. And now their customers are all fighting internally for these awards and its recognition because they want to be part of this thing. Right? And so, that's been a big part of creating that culture.
And so there's that side and there's also the company culture. But one of the things we found that's been super helpful with company culture, is... A lot of our hiring also comes from within our community. So people who are already using the platform, who already believe in the mission, they already love what we're doing anyway, but for some reason they're not able to launch their own business, they haven't had success with it. If you look at... Our support team's probably 200 people, most of those people are people who used the platform first, they were customers, they loved it, loved the idea, they loved building funnels, but they never figured out how to have success for their own business yet. And so instead they said, when we put applications, "hey, if you love ClickFunnels and want to be part of this, you can join it". And now they're like, "I have a chance to work in this company that I'm... I want to use anyway, they're doing the stuff, I get to hang out with the customers I love. And so let's build this really cool internal culture as well of people who are already bought into our mission or was trying to do and trying to accomplish.
And so there's both those sides of the culture that are so powerful and so important, that keeps people around. We don't have many employees that leave, the turnover is really small. It's because they're part of this thing that they would be paying for it anyway, because they're already that passionate about it. And now we let them come in and they can work for us and they're getting paid to be part of it and interacts with our customers, and it's...It changes the whole dynamics of your business.
Jay: Those are great points. And thank you, because I'm taking you into realms that I hope everyone doesn't ask you to talk about because I think there probably resides in you, a lot of profound knowledge to share. And I think it's very valuable because you're a catalyst for others to basically be a lighthouse or a beacon of how they can go from wherever they are to a better place. So you also have three or four concurrent businesses, you got ClickFunnels doing 200 million, you got your Digital Secrets or... Is it called Digital Secrets? DotCom Secrets! Pardon me, pardon me. You got your supplement business... How do you do all that? How does somebody go from glint in the eye when they're 14, shoot, selling kits to make, by the way, a potato gun is not a real gun everybody because guns are outlawed and it's just... It's a fun thing that kids do, they stick a potato in a-
Russell: It flings out...
Jay: ... And it's a fun thing that a lot of kids, my kids had them and they're just fun. But how do you go from that kind of innocence and sort of theoretical ambition, to growth, to multiple business growth, to... And you seem happy and always when I talk to you, calmed and controlled. It might be a facade, you might actually be a neuro nightmare, but you seem to be in control of yourself and your whole world, which is... And you've got plenty of time that you spend with your children. I'm always trying to pitch him on something and he is always taking his kids to wrestling, or he is always doing things that give him quality of life, which is really interesting given the diversity of activities involved. And again, I'm throwing you, this is like intellectual Rorschach for entrepreneurs. So you can answer anyway or you can decide you want to move on to the next question, I don't care.
Russell: No, I actually love this question. So a couple things, and I think this is the point that I don't think most entrepreneurs and business people think about. Most business owners think of their business as, what is the product they sell? Like I sell an iPhone, or I sell funnels. For me, that's not how I look at my world at all. I look at who are the people? What is the group of people that I've been called to serve? And so in my mind, the people that I've been called to serve are entrepreneurs. Those are the people who I jive with, I'm passionate about them, they help other people, they fulfill me. And so that's what I'm called to serve. It doesn't mean I have to serve them only through funnels, I can serve them through any way possible.
And so for me, it started with... I started trying a lot of different things initially, but eventually ClickFunnels was the software platform that made this grow for me. That's when it started blowing up, was that. But then I was like, "okay. Well they had the software platform, but I want to educate them too, because these are my people, I'm called to serve. The more simple I can make their lives, the more money I'm going to make. So how do I make their life simpler?" And so my very first book which was called DotCom Secrets, it was all about teaching them: "We give you this platform, but you have to understand the strategy behind it". So DotCom Secrets is the book that teaches the strategy and how to use funnels to grow your business.
And so that was the first book. And then two years later I was like, "okay, people are using funnels, they understand the strategy, but they're not good at telling their stories and creating customers who are going to buy from over and over and over again. How can I make this simpler for them"? And so that's when I was like, "oh, I should write another book". That... My second book was called Expert Secrets, which taught them now: "here's how to use your expertise and your knowledge and your information and your stories to move people through your funnels and get them to buy from you and buy from you again". And then it was like, "hey, how do we... What's the next problem"? The next problem was that people weren't getting traffic to their funnels. They couldn't get people profitably to come to them.
And so that was my third book, Traffic Secrets came about. Write a book that's going to help them get traffic. That became the third thing. And so, a lot of this just came from that like supplements, like the supplements we have right now are for entrepreneurs to help them have more energy, more passion, and be able to do what we do as entrepreneurs. And so everything is kind of focused around helping them, so that's number one. The second thing is that I realize that the business that I'm really in, is an acquisition business. "I learned this from you initially, there's three ways to grow business. How do you acquire more customers, get them to spend more and buy more often?" So it's like, "I'm in this company where I got to acquire new customers, and so how do I acquire customers where I create funnels on the front end to acquire them?"
And so, one thing that's kind of unique about us, is we boot strapped our company, we didn't take on any outside funding. And so all of our customers had to be created profitably. And so for us, we do that through these book funnels. Each time we have launched a book, it costs us about $20 to $30 to sell a book, but through the funnel I make $50 or $60. So, I'm usually profitable on every single book we sell and so when someone comes in, they buy a book, we properly acquire that customer and then we can sell in ClickFunnels and doesn't cost us any new money. It's basically, anything that happens after the book funnel, is all pure profit. And so, that became our business. What I said is that I have to have a team that's really, really good at making funnels; the best funnel team in the world.
That became the side of the business that I run, I have a partner that runs the software side and I run the acquisition side. I have to be able to create funnels that acquire customers profitably. I have this team now that's amazing, so I'm like, "okay, here's the book I wrote, make a funnel. Here's the supplement make a funnel. Here's the..." And so we have the processes and the tools in place where we can create anything and do a funnel. As you know, last year, Dan Kennedy came to us and we had an opportunity to buy his company. And I was like, "well, his customers are entrepreneurs, his customers need funnels, let's do this". We acquired his company, 40 years of his intellectual property, and I have a whole team now making, taking all these old intellectual property and turn them into these funnels that were popping out. Dan's company's grown more in the last four months than it did the last 12 years combined.
And it's just because we have all this systems and themes in place to be able to do that. It's been fun. It's ,you know, my favorite thing is funnels. And we have a team that just builds funnels based on any crazy idea that I want to plug in there. We build all the funnels and it gets entrepreneurs to raise their hands, give us money, and then we can, from there, get them into ClickFunnels. But it all comes down to really understand who's your dream customer. And what are all the different ways you can serve them?
Jay: I love that. So now let's take the gloves off and talk about online, what you know that most people don't. Don't breach anything that you charge a lot of money for, but share two things. First of all, since you are the king of funnels and you get to examine the most high performing funnels and most people don't do funnels... And I'll tell you, even though we have your service, I don't do funnels anymore. Embarrassing. It's just not what I want to do. It's embarrassing and stupidly, but why don't you tell everyone here, what have you, what are some of the... I'll call it a denominator, the higher performing success factors in creating funnels? And I'm going to add, I always ask multiple things and I ask multiple things so you can choose to answer one, any combination, or say "those are great questions, Jay, but I want to answer a different question". I don't care, because I just want to plum what you know, that I don't and they don't.
And I'm their advocate, but you can talk about what you learned about funnels. You can talk about digital marketing, lead generating, a traffic building conversion that most people don't know and realize they're probably by and large behind what you might be teaching to everyone. But it would be very helpful, because everybody wants advantage. And then finally, you launched it in the beginning through very non-linear approaches and it requires you to think differently. And I'm a great advocate of thinking totally differently than everybody else and doing things totally different, so you can talk about any combination or, none of the above. The ball is thrown to you.
Russell: Awesome! Yeah, I have something I think it'd be cool to share with you guys and it's something that's on the outside. I'm going to explain it in your own make, that's really simple, but it's the key to everything. In fact, I have people who hire me and they have a campaign, advertising campaign and they're looking at their ad and their funnel, everything, and they'll want to pay me quarter million dollars to review their funnel. For a while I didn't have a process for this, and then after doing it four or five times, I was like "this is actually a really simple process". And I'm going to teach you as a process because then you don't have to give me quarter million dollars, you can just do it yourself.
But if you want to I'll take it too, but another token. It's interesting because there's three core things that happen at every single step and if a step in your digital funnel is not working, it's always one of these three things. So I'll explain the three things first, and I'll walk you through kind of how it works. So, every single step in your process from the ad to the landing page, to the sales page, the upsell, the downsell, the email sequence, the retargeting, every single thing, they all have three components: they have a hook, they have a story and they have an offer. So Hook, Story Offer. And when something's not working, it's always one of those three things.
And so what happens, someone will come bring me their funnel in their campaign like, "here's our advertising campaign. What's not working"? And I'll look at the ad first. I'm like, "okay, what's either the hook, the story or the offer? Look at the ad. What is? Is it grabbing you? Is the hook there?" If the ad's working good, but then the landing page is not really cool, on landing page is either the hook, the story or the offer. If the ad's working, landing page's working but the sales page is not where it's like, well it's either the hook, the story or the offer. So, I want to break those things down. So the hook is the thing that's going to grab someone's attention and it could be anything. It could be your face, it could be your hands, it could be the copy, it could be the words, it could be the background, everything we have in our power is a hook. So for example, I was thinking about people are there on their phone and they're sitting back and they're on Facebook or YouTube or whatever and they're sitting here scrolling, bored out of mind scrolling and our hook is something that's going to grab them and stop them from scrolling for just a second. And the hook, the only job hook has, is to grab their attention just for long enough, then we can tell them our story.
Okay. So then we have a chance if they stop scrolling, now we can tell them a story. And depending on if it's an ad, the story might be 15 seconds. If it's a landing page, maybe it's five minutes. If it's a sales video or a webinar, it could be an hour or two. But the second step is the story. The goal of the story is to increase the perceived value of the offer that you're going to make. It's not just the story for story’s sake, but the goal of the story is to increase the perceived value of the offer you're about to make.
Number three is the actual offer, how to make a really good offer. A good example of this, actually with my phone, you know these phones... I think, I don't know how much iPhones cost, $500 or $600, but I wanted to demonstrate the power of a really good story at this event I went to, so I went to this event and there's probably 2000 men in the audience, it was called warrior week. There's 2000 men in this audience, and I brought my phone and said, "who here would give me $600 for this phone?" And nobody's hands went up, maybe one person's like, "I'll give you $600. That's the value of it". And I said, "okay, in 10 minutes from now, I'm going to tell you guys a story about this phone and I bet you, I get at least one of you guys to be willing to give me a $100,000 for this phone".
And everyone's like, "Pf no, there's no way". And I said, "okay, let me tell you the story. So this is my cell phone I've been carrying with me for the last... However, many years and it looks like a phone just like to everybody else, but I want to tell you what's on this phone". I said, "on this phone, there's a whole bunch of really cool things". I started telling this story about the people in my Rolodex. I said, "Jay Abraham's, his phone number's in here, and Tony Robbins' phone number's in here, as well as this person, this..." I started listing off all the people and like, "you'd have their contact information".
And then I went to my iBook snap and I showed... I said, "every single course I've ever bought, of the last 20 years, after I buy the course, I make a digital version, I put it on my phone". I start scrolling through there. I said, "this is about $1.5 million worth of marketing and sales courses. Every marketing, sales, persuasion, personal development course from the beginning of time, I've purchased it and they're all on my phone. And I can, listen. In fact, I got a dozen of Jay's programs right here, I could show you guys, literally. They're all in here. Every time he's ever spoken, it's end up on my phone". And then I started going through the other things, I went thing after thing and all of a sudden the value of this phone, I told the story about the phone, the perceived value got higher and higher and higher. And after I told this story, I went through all the things that are on this phone, then I sat down.
I said, "okay, let's do an auction for my phone. I mean, who'd give me a $1,000?" And everyone's hands split up. "Who'd give me $5,000? $10? $20? $25? $30? $50?" I got to a $100,000. To a $150,000 and your hands are starting to drop, I got up to $500,000 and there were still three people's hands who were still in the air. I said, "you guys are dead serious. You're giving me $500,000 right now for my phone. And they said, “yeah we will”. I said, “okay, prove it, come on stage". And so three people came on stage and they were willing to give me half a million dollars for my phone. And I said "two minutes ago you were going to give me a $1,000 for this, why would you give me $500,000"? And one of the guys grabbed the microphone. He said, "man, after knowing what's on that phone, that seems like a super good deal".
That's the power of a really good story. So again, we got to grab them with the hook, we got to tell them a story to increase the perceived value of the thing we're going to sell them, and then we got to make them a really good offer. And that happens again on every single page, it happens on the ad, the landing page, the sales page, the upsells, the down cells, the email sequences, that pattern repeats itself over and over and over again. And so for you to be good at digital marketing, it's just getting really good at: what's the hook that's going to grab their attention? How do I tell a story? How do I make an offer? And then you do that, you build out your sales process. And what I do is build the sales funnel out, I spend maybe a $500 or a $1,000 in ads and I sit back and I just look at the numbers and look at the stats. I say, "okay. Well. Page one and page two, did good. Page three, didn't do good".
I'll see their Hook, Story, Offer. Which one is it? And we'll go and we'll tweak it, try it, spends some more money, sit back, and then see if it works. And we try it two or three times, so all the pages are converting. And then you've got a funnel and now we can start driving traffic and we can scale it to $40 - $50,000 a day in sales. That's how the game is played, but it's just getting really good at those three simple things, which is hook, grabbing attention, telling the story, making an offer.
Jay: Oh, I love that! That's really great. So, if you talk about where opportunity lies today online, what would you say, where and how?
Russell: The biggest thing online, I'm sure most people are familiar with, is advertising costs are going up. That's just a big thing because Apple and Facebook got a big fight and they started blocking pixels, so the advertising costs for everyone's going up. And so the... Because of that, a lot of businesses are falling away and the businesses there have most success. One of Dan Kennedy's, my favorite quotes from him, he said, "whoever can spend the most money to acquire customer wins". And so it's having businesses where there's a front end and there's a really good back-end. So my business right now, we have, I have free books. And then I have software for a couple $100 a month, I also have a $25,000 coaching program, I've got a $50,000 coaching program, I have $150,000 coaching program.
And so, because of that, because I'm able to go deep and I have big back-end products and services, that's how I'm able to out compete against everybody else. And I think that the people are having the most success when people understand that. "I'm going to acquire a customer, but I'm going to lose some money, but that's okay because I know that over here, this is my more expensive thing that I'm going to be selling them". And I think that's really the people that are succeeding and thriving right now, those who understand that, because so many advertisers are dying and falling off the platforms, that eventually, I feel like the added costs are going to keep going down because of that. And it's going to give those who are able to sustain a business because they have a good back-end, the ability to just start grabbing all that traffic and really scaling and growing quickly.
Jay: And just to make sure it's translated, what he's saying is, instead of looking at your current offer as a static, this is all I'm doing, if you rethink it, and this is the lead generator self-liquidating or slight loss on the lead generator to bring the first transaction in, but I'm going to have many other ways to monetize it. And it doesn't matter whether you currently have those ways, this is where partnering, joint venturing, co-branding, buying the rights, getting licenses, figuring out what people buy before, during, after... Even frankly, instead, is where you can make a fortune. Talk towards that?
Russell: Yeah. A good example I saw recently, one of my friends owns a company. They do custom suits for, I don't know, $5 or $10,000 for these custom suits, but they were struggling. They couldn't advertise that profitably online and get people. They said, "well people who wear custom suits, what do we know about them? What's something they all want?" And the big ""ahas"... People that wear custom suits usually wear cufflinks". So they made a cufflink offer, they found somebody had a bunch of cufflinks, they put an offer and they charged, I think it was like free plus two, $2 95 cents for these really cool cufflinks. And it cost him like a $100 to sell a $2 cufflink. But from that $100, that was like his dream customer. And like one out of five in it buying a custom suit and they blew up the business because of that.
My business, I have software as our core business. And so I was like, "it's really expensive." Like for me right now in click funnels, it cost me about $500 or so in advertising to get a free trial, which is expensive. Like, oh, and I wasn't, again, I didn't, all my competitors are backed by a venture capital. So they have money that they can, they can acquire co but I don't, I don't have that. Like all the money comes to my own pocket. So I was like, okay, I'm going to go write a book and I'm going to sell that book. And, and that's, you know, I'll break even on the book. And then from there, I'll introduce some click funnels. I mean, a good reason why I bought Dan Kennedy's company, you know, Dan Kennedy he's written, I don't know, 50 books. So I know I have 50 new books that I can launch. I love it. People in the click funnels aren't to write any more books, which is fantastic for me. So it's just, yeah, you said partnering, acquiring licensing, like looking for something that can be front end and it just comes back to, again, who's the customers going to buy the thing you want. And then what's something that on the low end that they would want to buy, that you can acquire them really, really inexpensively. And then from there, move them to the more expensive products that you have.