Bedros Keuilian Podcast Show - How to Stop Amazon From Putting You Out of Business - 012

Episode Date: September 13, 2017

Forget going out of business—Craig Ballantyne and Bedros Keuilian have figured out that the “Amazon Problem” is really the greatest source of opportunity that brick and mortars have ever had, since they can do one thing better than Amazon ever can: provide a higher level of service and create a category of one.   Here’s what you’ll discover:   0:53 - Why you can Amazon-proof your business by offering a higher level of service and turning your business into a “category of one.” 3:17 - How a brick-and-mortar suit tailor is crushing it with his “man cave” style of service. 12:00 - Why you should show off how your product or service is made through online videos. 16:46 - How to beat Amazon at their own game by offering irresistible upsells after every purchase. 19:19 - The surprisingly simple first step in turning your one-location business into a national or even international empire.

You think about all the things that Amazon is selling, they started off selling books, but now they're selling what you're selling. You have to think about what can I do to create a category of one for myself. Price becomes a non-issue, truly, when you are a category of one. Hi, this is Craig Ballantyne with Badros Kulian from The Empire Show. And today I have to ask you a question. Have you ever thought to yourself, man, it is just a matter of time before Amazon runs me out of business. What the heck am I going to do?

That's what a lot of retailers are thinking in this day and age. So Beiros, where do people start? Yeah, that's a really good question, Craig. And this is for the brick and mortar business owners, because you think about all the things that Amazon is selling. They started off selling books, but now they're selling what you are selling. And is it just a matter of time before they put you out of business?

Well, let's talk about that. At the end of the day, people do want a product, and they want it in a convenient way. But they will always take a higher level of service over anything else. And so you have to think about what can I do to create a category of one for myself? Because really, they can come to you

and get the thing faster, especially if the experience is better assuming that you know how to deliver it. So what does one do to create a category of one, Craig? Well, I'm going to challenge you on something. You said this is just for brick and mortars, but it's not. It's actually for people that have digital products too

because you do want to have that category of one. the one thing that allows you to separate yourself from anybody else. So it doesn't matter if you're selling your books online or your books in a retail store. You are competing against Amazon. And so I need to be different from everybody else. And so that's why I am the world's most disciplined man. That's the category of one that I've built for myself. I'm not a productivity guy.

I'm not a time management guy. I'm not a coach. I am the world's most disciplined man. And that allows me to separate myself from other people so that, I can create a different experience in my workshops and in my books and in my online programs and in everything that I deliver, whether it is real world or digital. Good. And that actually brings the point home to our friend Dave. Now, you guys don't know who Dave is. He is a gentleman who actually has custom-made suits that we are wearing here.

He owns a business called Bespoke in Costa Mesa, California, and I get all my suits and shirts made by him. And Dave has a unique business, yes, but you could also. get a kind of a custom, semi-custom suit made at Nordstrom's. And these days you can order really high-end suits from Amazon. You truly can. But what makes Dave so unique and special? Well, let me tell you. The first thing is that Dave makes it a goal to come out to you if you can't go out to him.

And I don't know if Amazon or Nordstrom would ever do this. Obviously they wouldn't. And so I remember reaching out to Dave, or at least my assistant did, and said he just doesn't have time to come over to Costa Mesa. And Dave and his assistant were at my house, tape measure. measures, swatches, all the different things, materials, lining samples that I needed to make a decision on the three or four suits that I ended up ordering that day. They took all my measurements. But more than that, they made it very convenient for me to come in and do the multiple measurements that it takes. And it's funny because when I was there at his business, I realized this is not a store that's something that we're used to. It's a man cave. It's a man cave. It's not a bar. It's very sophisticated, elegant man cave. Yeah, pool table, bar, giant TV, giant TV, lounge, couch area. Luxury magazines.

Yeah. And one thing that Dave told me was that when he created this business, because he's a custom suit maker, he only had swatches sitting out. But I don't know, most men are probably like you and I, unless I see the suit, I don't really know what pocket, what collar, what design I want. And so he quickly figured out that he's going to make it into a nice walk-in closet. And so he's got about 40, 50 different styles of suits. and shirts and pants that he's custom-made hanging there.

And so you walk into this beautiful, as Craig said, Man Cave, this perfectly manicured with the bar and the drinks and the refrigerator and the pool table, wooden floors, and he is always dressed to the nines and he remembers you by first name. That is a category of one, and I would rather pay $2,000 more for a custom suit and go to him than go to Nordstrom's and be shuffled through a whole bunch of unwashed masses.

Right, because you walk out of there feeling like James, James Bond, you're like, oh my goodness, I am just as exquisitely tailored as 007. And so that is the type of experience that only can be provided in that physical location. That separates you from Jeff Bezos coming over to your house and taking measurements and then sending you a crappy suit in a box, because that is something that is going to be priced really low. And one other thing that Dave has in his business, before we get into the power pricing, is that it's a culture, a very, very classy culture in there. So everything from his customers right through to his assistants

are maintaining that level of culture in the business. And it's something that we see in FitBody Boot Camp is the culture of FitBody Boot Camp. What Bezos has instilled in the franchise owners in his business separates those locations from any other type of gym or any other type of digital experience. So what do you got there? Sure.

Well, actually, to that point where culture and experience is concerned, watch what he does. He actually comes with value first. And this is really cool what Dave does at bespoke. He invites attorneys, doctors, chiropractors, dentists, anyone from the area to come in after work and effectively have a little social hour after work at his man cave, which is actually his business,

where he can then show you different suits. So guys are playing, for one, he's creating an environment where other high-level entrepreneurs and executives can network and meet up, right? That's highly valuable. Number two, he's giving them free booze, and he's getting them, he's getting them tipsy, probably not drunk, but tipsy enough where they can just drive home barely. But also make higher priced buying decisions.

Yes, the buying decisions on higher priced items do get infinitely easier when you're a little under the influence. True that. But as he creates this culture and this environment, this experience of networking, of connecting, of just two executives playing pool or watching TV or hanging out, in a leather couch, the conversation organically, he says, turns to, tell me more about that suit. And now each of his suits ranging anywhere from $4,000 to $7,000. You're talking about a nice profit margin in there for him, and it's a smart way to do this. Yeah, absolutely.

So he's kind of turning it into what Howard Schultz calls Starbucks, the third place. This is what a lot of people who go to FitBody Boot Camp refer to that as their third place. You know, they go to work, they go home, but they really enjoy that time out of both of those locations at the third place with their community, with their culture, experiencing a really wonderful time that allows them to escape the real world and at the same time putting all of that together in a category of one. So that is what a retail owner can do with the culture, the community, the experiences, all of that stuff. And is there anything else that we can touch on there to make it to separate it from what you get online or in the mass marketplaces? What else can a solo

location do to get started? Well, I'll tell you what, one thing that Dave did really well, and the way I was able to find him some time ago was that he has dominated Yelp. He has chosen one platform and he has dominated Yelp. And after he made my first suit, he said, hey, Bezos, if it's okay with you, can you create a Yelp account and go and leave me a comment, go and leave me a review? And I said, hey, I'd be more than happy to do this. And he does this with every single person. And the reason is, when Joan, my assistant, was online looking for custom suit makers because the guy used to use in San Diego is just too far out of reach for me. She said immediately, hey, look, this guy has hundreds more reviews than the next closest person.

So it's worth your time be to go to him in Costa Mesa. We literally made the decision based on the reviews of others versus anything else. And so think about what you do on Amazon. When you're on Amazon, you're looking for a product. You might be comparing things and it might have 400 reviews. You're going to read some of the reviews and then that's going to help you come to a decision versus maybe there's a better product, but they get a horrible job getting the reviews, that product's never going to sell. No, and I usually, I'm the kind of guy that goes right to the

three-star reviews, right? You want to see not the five-star all the time and not the one-star, because those people are, they're irrational, you know, and so it's like, okay, what's the real deal? What's the four-star, the three-star? What's the social proof on those levels? And that's where you get the real deal. And if there's only three or four reviews, you're not going to feel that way, and most them are going to be at those extremes. So it really is powerful that he has hundreds and hundreds of reviews for you to flip through in order to see, okay, it worked for this person, work for this person, look what they're talking about here. That is really powerful. Now, somebody can they do that with other social media? It's like YouTube or Facebook, can they

dominate those things? Absolutely. I mean, think about you can leave Facebook reviews, Google, local reviews, and even on YouTube, the comments that you get. One piece of advice I can give anybody watching this video is that when people leave you comments on a YouTube video, it is worth your time for you to go and reply back and thank them and appreciate them and show them love. Because if you do, others who are watching those videos over time go, oh, you know what, this person is responsive. I can have dialogue and communicate versus just being a one-way conversation of you creating content and them consuming it. Right. So, you know, you're a busy guy. It's like, hey, can you go and create a Yelp account? You're like, oh,

really, I've got to create a Yelp account. But you did it. So what's the right way to ask for, you know, first of all, assistance like that, but let alone testimonials of any kind, or when you know that somebody does have to jump through a hoop in order to, you know, give you something, how do you say that properly? So you're not, you know, begging them for a favor and they're not going to feel like, oh, this guy now owes me a million things. Yeah, yeah. Well, actually, I'm pretty sure Dave did this very strategically, and it, the power of reciprocity, right? And Robert Chaldeen talks about this in his book, Influence. The power of reciprocity is huge. So one, he made sure that I was happy with the first suit that he made me before he even asked for a review.

But even before that, he said, hey, I took the liberty of making you two shirts instead of just one. So he gave me an extra shirt. Now, I don't know if the price was built for that shirt, if it was built into my suit or not. And I don't care at that point. The reality is that I asked for one shirt to go with that suit, and he gave me two. And then he said, by the way, are you happy with the way it fits on you? Yes, I am. Are you happy with both colors of the shirts because I decided to surprise you with this color. It's a little more bold, because as you can tell them, pretty much into the whites where shirts are concerned. And I said, in fact, I am happy with that. He says, then can I ask you to go to Yelp and leave a review? And of course, my immediate response was,

you know, I don't have a Yelp account, but I would love to just type up a review or make a video and send it to you. He goes, do you think you can have Joan make a Yelp account for you? Because he's been communicating with Joan. And so the man delivers the value first, exceeds my expectation seconds, builds reciprocity third, and then asks for the review and doesn't relent, doesn't stop unless I give it to him. And so I did. And of course, we've had a great relationship since. And, you know, I've referred you to him. I've referred our friend Jason Capital to him. And I've referred several others to him. And it's all because of the experience he's given me. Yeah, and you have a much bigger idea for referring suits and future. We'll leave that for another time.

Now, this guy should be going online with video. I mean, there should be two, of his location because when you have something you want to show off there's nothing better than video so what areas of video should you know all retailers be using to compete against Amazon especially Dave sure sure everybody wants to see how it's made right I mean there's an actual show on TV I believe it's the Discovery Channel called how it's made they want to know whether how the suit is made how the how the widget that you're selling is made maybe not so much the sausage we'll leave that one maybe not the sausage you definitely

want to show how the sausage is made, but everything else you definitely want to demonstrate. So think about the power of demonstration. And I might come in and he might say, hey, Bedros, is it okay if you sign this release that says that we can kind of follow your journey in picking out colors and picking out style and figuring out what suit you're going to wear on stage, what suit you're going to wear in front of the camera, what suit you're going to wear at your headquarters? Those are three different, absolutely three different styles of suits for me. And so, and if I were to say yes to that, then one thing Dave can do is literally plan out when I'm going to come because it's all by appointment only, and we can go through the swatches.

And he can say, well, you know, this suit looks good. Like he explained to me, darker suits look better on stage because of the lighting, right? Well, that's important for me to know so that, one, when I make the decision from my closet as I travel, I'm picking the darker suits. Number two, he can start showing me the swatches while the camera's recording this whole thing. Then as he gives me what he calls, I believe, the fitter jackets, which are, you know, hey, here's one that's got, you know, like yours right there, just like mine has two pockets on one side one on the other, right? He explains what it is, where it comes from, where the history of this was. Like, for example, the button way over here is actually from military suits and military jackets.

When it was really cold, you would take that button and you'd bring it all the way across to help keep you warm, but now it's become style and we put pins on it, right? And so do you want it? Do you not? But it's really neat for him to videotape that whole experience, taking a lawyer, a doctor, an executive, a CEO, an entrepreneur through their process of getting their first suit, or 10th suit, for that matter, custom suit, because the rest of us out there think that a custom suit might only be for the affluent, when in reality it might very well be for you, the dentist, or you the chiropractor when you have to go and get that award or speak at an event or just go to a wedding or something.

Yeah, absolutely. And so, you know, what that brings me to another aspect of video is that a lot of people just be really intimidated to go into any brick and mortar. So anything that people can do for any location, especially Dave, like here's what's going to happen when you first come in. You know, here's our location, here's where it is, here's how you're going to find us. Here's the setting that you're going to go to and it just puts us down at ease and really allows us to go in there, knowing what's going to happen, being prepared for the event, you know, mentally preparing ourselves, which is, you know, that intimidation factor helps us overcome

the inertia of getting started with anything, right? Yeah, absolutely right. Hey, so to that point, why don't you just slide right on into the power of pricing? Okay, great. So the power of pricing is that when you have all of this in place, now you're not competing against everybody else. If you're in a category of one, you are up against just yourself. And really what it comes down to then is just persuading the people to take action on the amazing value that you have to offer them. And so when you put yourself up on a pedestal, different from everybody else, it's a total game changer. Yeah. Price becomes a non-issue, truly, when you are a category of one. And I always talk about the people's ability to pay versus their desire to pay. Most people have the ability to pay what you want to charge them. The reality is, unless you create that category of one, they may not have the desire to pay what you want to charge them. And that's on you and not them. Absolutely. And so another aspect of the power of pricing and the way that you can price yourself better is when it comes through referrals, right? So if I, is Baderos actually, it's a real world example.

Beidro said, hey, you got to come and get your suit made from Dave here. And it was like, okay, well, I'm going to go and I'm just going to pay whatever it costs because Bayteros said it's good. I'm a warm lead. There's not a whole lot of resistance. It's very, very simple to have your price higher to support your business and to totally dominate against Amazon, right? Yeah, yeah, indeed.

And in fact, to that point where pricing is concerned and where Craig and I are concerned, the day I went to pick up my suit, Dave wasn't there, and his assistant was, and he's such a great guy, such a fantastic guy, but he's so focused on service that I said, hey, look, you know, I'm not happy with the cufflinks I have at home, and since I've got French cuffs here, do you have any cufflinks you can sell me? He goes, oh, yeah, sure, of course. And he shows me a whole bunch of cufflinks. At $150 to $190 a set, I mean, that's a nice chunk of profit for them. And I ended up buying two new cufflinks. And I said, by the way, I'm going to be one of these brown shoes. here that I brought, but I need a new brown belt. And he goes, oh, here's a brown belt. And, you know, they custom cut it to fit your waist exactly. But one thing I've got to stress here, Amazon does this well. And we're bringing it right back to Amazon. If Amazon says, hey, look, like just yesterday, I bought calcium, not calcium, magnesium. And I said, oh, by the way, do you also want to buy zinc and COQ10 with it? I was, where you going with the CO2? I was like, co-what? Cocaine. No. And so you You could imagine how you've seen that where Amazon you buy one thing and it says, do you want to do a little bulk purchase and include all three of these things for this price, right?

The upsell. And it's really important for that to happen. And so I effectively upsold myself on what I needed, the belt and the cufflings. And in fact, I got another tie as well and ended up probably spending an additional $600, $700 with them. But any business that wants to stay in business and wants to compete with the Amazon or the competitors around them, just understand that the money is also in the back end in those upsells and getting that person to. to come in for suit number two, three, four, five, and ten. And so the talk I had with Dave was, after I picked up my last suit recently, was, I hope I get emails or swatches in the mail, because he's got my mailing address, of a new pattern for shirts and jackets and pictures that I can just go yes,

because they have your measurement, they have my measurement. So you just need to go yes on this swatch, and it's done. And he goes, that's a brilliant idea. So think about that. If he sends me four or five swatches in the mail, I'm going to very quickly pick one of those and voila, five or $7,000 spent. And just to kind of give you an example of what we do in Fit Body Boot Camp, when you buy a Fit Body Boot Camp franchise from us and your business is rocking and rolling

and you're passionate about what you're doing, we will reach out to you with five or six new territories in your area and say, hey, look, there's five or six territories within a 40 minute to 60 minute drive time. Just curious, did you want that before somebody else comes and takes it? And it's a great opportunity for an existing owner to buy more locations because they're proven and we're put in a place where we can, I'd rather have, by the way, I'd rather have 3,000 franchise locations and only 1,000 owners than to have 3,000 locations and 3,000 owners. And so we're able to sell multi-locations that way by coming back to them and sending them territory maps of other locations or territories around them. And it's a fantastic way for us to get more franchises out there. Right. So that's one aspect of strategic structure and selling systems.

systems. Anything else in terms of scripting for your team members so that when they come, you know, when someone comes in, they don't have to kind of bumble their way through an upsell. There's types of scripts that should be in place in these brick and mortar locations. And so the thing that's going to kind of catapult you from a business or from being an entrepreneur to being a person who's built an empire is creating a systems manual. And odds are you're doing the same things over and over again. You're answering the same question over and over again via email. You're picking up the phone and answering those same questions over and over again.

Write those down or record them when they're happening. In Gmail, there's the canned response that you can cut and paste all these different canned response to the same questions that you get. The upsell process that you do with your clients, you have to teach and script and document in a systems manual. And when that is done, you now have what is effectively an operations manual. Where are we going with the operations manual? Well, Dave very quickly asked me, do you think my bespoke mom? model is franchisable? And I said, Dave, in fact, it is. And so now the goal is to hopefully encourage him to take the working model that he has. And he shared his numbers with me,

and it's a high-profiting business for him. And to franchise that nationwide in high-affluent areas where other people can benefit from. But without creating scripts and processes in your first location, don't expect to license or franchise the model out because it's just going to collapse and break. Great. So now we put that all together and we're going to, how would someone go and build the empire with a category of one, making sure that they have creating experiences, building that culture, taking everything online the right way with video and reviews and then the power of pricing,

dialing it all in. Well, look, obviously everything we talked about here does not going to happen overnight, right? It's about structure, it's about scale, and it's about strategy, those three things. And that actually unfolds over a year or two or three or five. people always overestimate what they can do in one year and they underestimate what they could achieve in five years. And so really you've got to join a group of high-level entrepreneurs like yourself, like our empire coaching group, where we can guide you, give you the structure, the scale, and the strategies every step of the way to build that business and, of course, to build that empire.

Because ultimately, if you've got a gift, you've got a passion, a purpose, a business that's supposed to make an impact, it's a doggone shame if it doesn't reach its fullest potential as soon as possible. Don't you agree? Absolutely. And so you can take your mindset from thinking, how do I compete against Amazon, to how do I not only dominate Amazon, but dominate the entire country or whatever it is you want to achieve. So that's the power of building your empire. See you later.

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