Under the Influence with Terry O'Reilly - S9E18 - Talk Ain’t Cheap: How Conversations Impact Business

Episode Date: April 30, 2020

This week, we explore how business can be won or lost with spontaneous off-hand remarks. Not all advertising business is conducted in a boardroom or in commercials. Sometimes somebody says something in an elevator, or in a speech or in a doorway that leads to winning an account - or losing it. Talk ain’t cheap.  Hosted on Acast. See acast.com/privacy for more information.

Hi, it's Terry O'Reilly. As you may know, we've been producing a lot of bonus episodes while under the influences on hiatus. They're called the Beatleology Interviews, where I talk to people who knew the Beatles, work with them, love them, and the authors who write about them. Well, the Beatleology Interviews have become a hit, so we are spinning it out to be a standalone podcast series. You've already heard conversations with people like actors Mark Hamill, Malcolm McDowell, and Beatles confidant Astrid Kershaw. But coming up, I talk to May Pang, who dated John Lennon in the mid-70s. I talk to double fantasy guitarist Earl Slick, Apple Records creative director John Kosh. I'll be talking to Jan Hayworth,

who designed the Sgt. Pepper album cover. Very cool. And I'll talk to singer Dion, who is one of only five people still alive who were on the Sgt. Pepper cover. And two of those people were Beatles. The stories they tell are amazing. So thank you for making this series such a success. And please, do me a favor, follow the Beatleology interviews on your podcast app. You don't even have to be a huge Beatles fan, you just have to love storytelling. Subscribe now and don't miss a single beat. We'll see you next time. new locations. What matters is that you have something there to adapt with you, whether you need a challenge or rest. And Peloton has everything you need, whenever you need it. Find your push. Find your power. Peloton. Visit Peloton at onepeloton.ca. This is an apostrophe podcast production. You're not you when you're hungry.

You're a good hand with all things. You're under the influence with Terry O'Reilly. The movie The Silence of the Lambs holds a very unique distinction in Hollywood. It is the only horror movie to ever win a Best Picture Oscar. In the film, Jodie Foster plays an FBI agent named Clarice Starling who is trying to find a serial killer. So she taps the mind of an imprisoned serial killer named

Hannibal Lecter, played by Anthony Hopkins. The Silence of the Lambs has another distinction. It is one of only three movies in history to win all five of the top Oscars. Best Picture, Best Actor, Best Actress, Best Director, and Best Adapted Screenplay. The Silence of the Lambs has yet another distinction. A prop in the film was influenced by NHL hockey.

The famous mask worn by Hannibal to curb his cannibal tendencies was made by a man named Ed Cumberley. Ed has made dozens of masks for NHL goaltenders. When the studio called and told him what they needed, Ed whipped up a design in five minutes. He basically cut a regular mask in half, put metal bars in the mouth area, and left the fiberglass unpainted. It was perfect.

And terrifying. But what people remember most about the Silence of the Lambs is the dialogue between Clarice Starling and Hannibal Lecter. You see a lot, Doctor? Or are you strong enough to point that high power to perception of yourself? What about it? Why don't you look at yourself and write down

what you see? It was disturbing, eerie, and its most chilling line, unforgettable. A census taker once tried to test me. I ate his liver with some father beans and a nice Chianti. It could be argued the remarkable chemistry between Jodie Foster and Anthony Hopkins

is the reason the film took in that Hall of Academy Awards. There was just something mesmerizing about their conversations. Clarice Starling trying to tease out vital insights from Lecter, and Lecter trying to expose a plush treasure trove of insecurities from Starling. The film has one more revealing distinction. Jodie Foster never talked to Anthony Hopkins during the entire filming of the movie. They did their lines together, but they never had a conversation away of the movie. They did their lines together, but they never had a conversation away from the cameras.

When Foster was asked why, she said she avoided Hopkins, adding, he just scared me. And there was the subtext filmgoers felt so viscerally. Their conversation was so riveting on screen because they never talked off screen. Talk is an aspect of marketing that is rarely talked about. Marketing is not just confined to commercial dialogue and YouTube videos. As a matter of fact, a lot of business is won or lost in a spur-of-the-moment conversation

or an offhand remark. It might be what is said in a pitch for new business. It might be what a CEO says during a speech. Or it might be what someone says in an elevator. Big things can happen in those spontaneous moments, both good and bad. You're under the influence. The last advertising agency I worked at before starting my own company back in 1989 was called

Chiat Day. Head office was in Los Angeles. It was a highly creative firm with a reputation for outstanding work and was founded by two ad men named Jay Shiat and Guy Day. Most serious top drawer ad agencies congregated in New York or Chicago or Toronto, and Shiat Day wanted to prove geography didn't matter. They succeeded and established a big, important ad agency on the West Coast. Chiat Day grew to become a billion-dollar company with 1,200 employees. Jay Chiat didn't suffer fools

and he accepted nothing less than bold ideas. He was willing to fire clients who didn't buy those ideas. He believed in tough love. The hours were long for people like me. It became known as Shia Day and Night. Once we were preparing a presentation to try and land a Labatt beer account in Toronto, Jay flew up from LA to be part of the pitch. It was my job to present the creative ideas. Just before we hopped into the cab to go to Labatt, Jay Shia grabbed my arm and said,

So, do you feel well rehearsed for this presentation? I said, yeah, Jay, I think so. He said, well, we'll see, won't we? I felt a sweat drip in my coccyx. His motto was, good enough is not good enough. And it was a collection of words he said to us often. Jay Shiat was also fearless

when pitching new business. Way back when Shiat Day was just opening its doors in 1968, Jay and Guy Day decided to see if they could land the advertising account for a local horse racing track. They both thought the track's advertising was horrible. So, Chiat and Day went to see the owner to pitch their creative services. He listened to their presentation, then said he wasn't interested. He liked his current advertising. Thanks, but no thanks.

On the way back to their car, Jay suddenly stopped and said, Wait, he's a gambler, right? Let's go back and make him a bet. So Jay and Guy Day turned around and knocked on the horse track owner's door again. Jay said, I want to make you a bet.

I bet we can increase your attendance with our ads in one month. If we're right, you pay us based on the crowd increases. If we're wrong, we give you your money back. The owner couldn't resist. He said, I'll take that bet. Shia Day's ads increased the attendance so much, the owner demanded to change the terms of the payment. Chiat Day was making too much money. They eventually compromised on a more conventional fee structure. But don't miss the important point in this story. Chiat Day won the account by coming up with a pitch idea right on the spot.

Because Jay Chiat realized they were dealing with a gambler, he simply made him a bet. It wasn't a formal pitch. It wasn't in a boardroom. There were no slides, no charts, no slick presentation booklets. None of the usual tools of new business presentations. Just a verbal pitch standing in the owner's doorway. Words, instinct and chutzpah can be a powerful trifecta.

Many years ago, an ad man named Stanley Arnold was pitching a big brewery in Baltimore. It was a large account that needed a lot of advertising. Arnold had just started his ad agency, and the revenue from a major beer account would go a long way to getting his business off the ground. So on the appointed day, Arnold was shown into the office of the brewery's CEO. They shook hands, and Arnold began his presentation. In the middle of an important moment in the pitch, the CEO's phone rang. He excused himself and took the call.

When the CEO hung up, Arnold resumed his presentation. Then the phone rang again. And the CEO took the call. When he eventually hung up, Arnold made his second attempt to resume his pitch. One minute later, the phone rang again. And again, the brewer took the call. Arnold was still on page one of his presentation. So here's what he did.

While the brewer was on the phone, Arnold tiptoed out to the lobby and stood beside the receptionist. When the CEO's line became free, Arnold called him. From the lobby. The CEO took the call, of course, and Arnold completed his presentation on the phone without interruption. The brewer bought Arnold's idea, and Arnold's new ad agency suddenly had a big new client. I'm sure Stanley Arnold's campaign idea was good, but that wasn't what won the business.

It was his spontaneous way of getting the CEO's attention. When Bruce Lee was first looking to make an impression on the American martial arts community way back in 1964, he was invited to put on a demonstration at a prestigious karate tournament in Long Beach, California. It was a big event, attracting 3,000 martial artists and 8,000 spectators. Bruce Lee was a Kung Fu stylist, and not much was known about Kung Fu in the West at that time. Lee wanted to demonstrate his style in front of the very conservative classical karate audience. First, Lee did two finger push-ups using his thumb and forefinger, which impressed a very hard-to-impress crowd.

Then he demonstrated his famous one-inch punch. He asked for a volunteer and placed a chair about five feet behind that volunteer. Lee then put his fist one inch from the volunteer's chest. And without retracting his arm, the force of Lee's punch from one inch away sent the man flying into the chair, which sent the chair flying back another six feet. The crowd was astonished. But that wasn't the most surprising part of Lee's demonstration. It was the talk Lee chose to give that audience.

He told them that classical martial arts were stiff and archaic. He said traditional karate was impractical and stuck in old ways that were no longer relevant or effective. That was an interesting thing to say, considering he was standing in front of a classical karate audience filled with traditional karate masters. He went on to say that in China, 80% of what martial arts schools teach is nonsense. Here in America, it was 90%. The crowd was stunned into silence. He was absolutely

polarizing. Lee then bowed, smiled, and left the stage. It was an audacious presentation, considering he was only 24 at the time. He not only made a memorable impression on the karate crowd, he also made an impression on the karate crowd, he also made an impression on a Hollywood producer who happened to be in the audience that day. While his kung fu ability was remarkable, what captivated the producer

was Lee's brash confidence. That night led to Bruce Lee's Hollywood career. Not long after, he was invited to do a screen test and landed the part of Kato in the Green Hornet TV show, which then led to a legendary movie career. Brash means cash. Just ask Muhammad Ali.

And we'll be right back. If you're enjoying this episode, why not dip into our archives? Available wherever you download your pods. Go to terryoreilly.ca for a master episode list. Muhammad Ali was arguably the greatest heavyweight boxer of all time. He fought the most legendary list of heavyweight contenders of the 60s and 70s and filled arenas and stadiums wherever he fought. A large part of Ali's power was not just in his fast hands and dazzling footwork.

He won most of those fights outside the ring, with words. He would create rhyming poems and brazenly predict a round when he would knock his opponent out. He will be mine in round nine. If he makes me sore,

I'll cut it to four. Thank you very much. And if that don't do, we'll get him in two. If he run, I'll cut it to four. Thank you very much. And if that don't do, we'll get him in two. If he run, we'll get him in one. It was psychological pugilism. Many fighters entered the ring with Ali already in their head. Then, in a few minutes, he was going to be all up in their grill.

This kid fights great. He's got speed and endurance. But if you sign to fight him, increase your insurance. But more than anything, it was great marketing. Ali was so brash, so cocky, fight fans would gobble up tickets just to see if he could back it up. Chatter matters. In the excellent book Dream Teams by Shane Snow, the author tells a story about a small bicycle shop in Dayton, Ohio, back in 1901. The shop was on a street filled with flowers, ice cream parlors, and general stores. Birds chirped, townsfolk strolled.

But when they walked by the bicycle shop, they would hear a jarring sound. It was loud shouting coming from the shop. This shouting happened every day. It started in the morning, paused for lunch, then resumed in the afternoon. It turns out it was the two brothers who owned the bicycle

shop. They argued constantly at the top of their lungs. But here's the thing. It wasn't a hostile work environment. Whenever the brothers needed to solve a problem, they would start arguing. Then they would stop, switch sides of the argument, and start yelling again. The brother who just argued against something would now argue for it, and vice versa. It was a highly unusual way of solving a problem. The brother who just argued against something would now argue for it, and vice versa.

It was a highly unusual way of solving a problem. But it seemed to work for Orville and Wilbur Wright. When the Wright brothers were having trouble getting their airplane off the ground, they argued about it. By switching sides, they eventually discovered their problem wasn't motion, it was balance. Once they solved the balance issue, the other problems were minor. And who understood balance more than the proprietors of a bicycle shop? By switching arguments, it neutralized their personal egos. Switching sides ensured the goal was to make progress, not to kill each other. Arguing solved their business problems.

While talk can generate enormous revenue in the world of business, talk can sometimes have the opposite effect. When I attended the Cannes Advertising Festival a few years ago, the founders of a highly creative San Francisco ad agency told a cautionary tale. They were once asked to pitch the IBM business. It was a big deal for the agency. IBM is a massive and prestigious account. The agency worked hard on their pitch for weeks.

On the big day, the agency folks piled into an elevator to go up to the IBM boardroom. During the silent ride, one of the agency principals said, Please don't sit me beside a computer nerd in this pitch. I can't take it. said, Unbeknownst to the agency, the IBM CEO was standing in the corner of that elevator. They didn't get the account. All because of one sentence. Pandemics aside, there is a big festival held every spring in Austin, Texas. It's called South by Southwest, and it's a huge gathering dedicated to interactive media, music, film, comedy, and education. There are close to 5,000 speakers and nearly 2,000 musical acts performed for 400,000 attendees

over a 10-day period. Back in 2008, South by Southwest managed to book Facebook's Mark Zuckerberg for an on-stage keynote interview. It was a coup for the festival. The event was also important for Zuckerberg because it was the largest audience of influential online developers and journalists

he had ever been in front of. Facebook was important to that audience, but there were also a lot of questions they wanted answered on topics like censorship, reliability, and privacy. The room was packed. Overflow rooms watched on monitors and the anticipation was high. According to reports,

the interviewer spent much of the allotted time asking softball questions instead of pressing for the information the crowd wanted to hear. The mood in the room started to turn. But something else was going on. The crowd started to comment on Twitter. Zuckerberg and the interviewer

were oblivious to it at the time, but a huge back-channel conversation was going on. The crowd was heckling without audibly disturbing the show. As Fast Company magazine later said, there were two experiences going on at the same time, a physical one and a virtual one.

The crowd was actually organizing in real time on Twitter. They were having a very heated conversation amongst themselves. And it was getting ugly. Remember that Twitter was fairly new in 2008. Finally sensing the mood in the room, the interviewer dared the audience to come up with better questions than she had. And that's all it took. It became a free-for-all.

The crowd commandeered the microphones. Some in the crowd reported Zuckerberg wasn't able to fully answer some of the very pointed questions. He stuck to the same script and repeated phrases multiple times. He was in front of his contemporaries, and they were grilling him. The audience was not happy with what they were hearing. The back-channel conversation had overtaken the on-stage conversation. The crowd had much more information in that moment than the onstage participants did. All those tweets lit the internet on fire. News of the chaos spread across the web.

The South by Southwest crowd had never turned on someone like that before. Fast Company magazine called it Zuckerberg's keynote debacle. Others called it a train wreck interview. It only lasted 45 minutes, but those 45 minutes are still referenced 12 years later. But as excruciating as that was, it was nothing compared to what happened to a CEO named Gerald Ratner. New year, new me. Season is here and honestly, we're already over it. Enter Felix, the healthcare company helping Canadians take a different approach to weight loss this year. Weight loss is more than just diet and exercise. It can be about tackling genetics, hormones, metabolism.

Felix gets it. They connect you with licensed healthcare practitioners online who will create a personalized treatment plan that pairs your healthy lifestyle with a little help and a little extra support. Start your visit today at Felix.ca. That's F-E-L-I-X.ca. Whether you're in your running era, Pilates era, or yoga era, dive into Peloton workouts that work with you. From meditating at your kid's game to mastering a strength program, they've got everything you need to keep knocking down your goals. No pressure to be who you're not.

Just workouts and classes to strengthen who you are. So no matter your era, make it your best with Peloton. Find your push. Find your power. Peloton. Visit Peloton at onepeloton.ca. Gerald Ratner was a jeweler by trade. He had inherited his father's jewelry store in 1984, and in six short years he had transformed the small retail operation into a billion-dollar empire.

Where most jewelers sold high-end merchandise with an air of exclusivity, Ratner's aimed at working-class shoppers by offering rings, bracelets, and earrings for an average price of just $20. Instead of tasteful window displays, Gerald Ratner peppered his storefronts with loud orange signs that shouted half-price sales. Ratner's became the biggest jeweler in Britain with a 50% market share. Then, it acquired a jewelry chain in the U.S. At one point, Ratner's had nearly 2,000 stores.

Life was good for Gerald Ratner. He owned multiple houses, expensive cars and boats, and was a fixture at high society events. Then came the day that would go down in history. In April of 1991, Ratner was invited to give a very important keynote speech at a business conference in London, England. The theme of the conference was Quality, Choice and Prosperity. Good afternoon, Mr. President, Your Royal Highness, ladies and gentlemen, and thank you, Mr. President, for asking me to address such a big room. There were over 6,000 business people, journalists, and dignitaries in attendance.

Ratner spoke about how his business gave people choice. He proudly stated his business was generating big profits and prosperity during a recession. Then, in less than 10 seconds, he virtually destroyed his own company. Ratner began discussing quality. He explained to the audience how his company was able to sell a cut glass sherry decanter set with six glasses on a silver tray for just $10. He said, People say to me, how can you sell this for such a low price? I say because it's total crap.

When he told the crowd his stores actually sell gold earrings for under $2, he said this... Some people say, well, that's cheaper than a prawn sandwich from Marks and Spencer's. But I have to say, the sandwich will probably last longer than the earrings. You can hear the crowd laughing. But the next morning, it wasn't quite as funny anymore. As you might remember, there were journalists in that room. The headlines said, Jewelry CEO Call his own products crap. The Sunday Times dubbed him Gerald Crapner. The next day, shares in the Ratner Group dropped by the equivalent of $1.8 billion in today's dollars.

Loyal shoppers boycotted the store. Sales tanked. The company had to close hundreds of stores and lay off a large percentage of its workforce. By the end of 1991, the stock was down 80%. Not long after, the Ratner Board of Directors fired Gerald Ratner. To this day, doing a Ratner

is British slang for the act of saying something in public that completely undermines your own business. Loose lips sink chairmanships. The world of business is full of ebb and flow, sturm and drang, growth and decline. There is a lot of process in business with procedures, methodologies, structures, and protocols.

But what is often forgotten is the impact of the spontaneous spoken word in business. Bruce Lee talked his way into a lucrative Hollywood career. Muhammad Ali understood this concept instinctively. A promoter could advertise his boxing events all they wanted, but tickets really sold when the Louisville lip went into action. Jay Scheidt's presentation to the horse track owner failed, but on a hunch, Jay landed the account with one impromptu sentence, I want to make you a bet.

And Stanley Arnold won the beer account not by impressing the brewery CEO with his work, but by impressing him with how he managed to keep his attention. The reality is that business is not just conducted in a boardroom. It can be won or lost in a speech, in a doorway, or in an elevator. Mark Zuckerberg discovered that in 45 painful minutes, and Gerald Ratner only took 10 seconds. As all business people learn sooner or later, talk ain't cheap when you're under the Zip, zip, zip, zip. Zip, zip, zip, zip. This episode was recorded in the Terrastream Mobile Recording Studio. Producer, Debbie O'Reilly. Sound Engineer, Keith Ullman.

Theme music by Ari Posner and Ian Lefevre. If you liked this episode, you might also enjoy Red Sheep, The Power of Word of Mouth Advertising, Season 8, Episode 16. In the next episode, you might also enjoy Red Sheep, the power of word-of-mouth advertising. Season 8, Episode 16. You'll find it in our archives wherever you download your podcasts. Follow me on Twitter and Instagram at Terry O. Influence. See you next week. I once ate some liver with fava beans

and a nice bottle of milk of magnesia. Sorry.