The 4-Hour Workweek: Escape 9–5, Live Anywhere, and Join the New Rich - Expanded and Updated

by Timothy Ferriss

  Offer a lose-win guarantee (see boxed text) instead of free trials.

  Do not accept orders from common mail fraud countries such as Nigeria.

  Make your customer base an exclusive club, and treat the members well once they’ve been accepted.

  The Lose-Win Guarantee—How to Sell Anything to Anyone

  If you want a guarantee, buy a toaster.

  —CLINT EASTWOOD

  The 30-day money-back guarantee is dead. It just doesn’t have the pizzazz it once did. If a product doesn’t work, I’ve been lied to and will have to spend an afternoon at the post office to return it. This costs me more than just the price I paid for the product, both in time and actual postage. Risk elimination just isn’t enough.

  This is where we enter the neglected realm of lose-win guarantees and risk reversal. The NR use what most consider an afterthought—the guarantee—as a cornerstone sales tool.

  The NR aim to make it profitable for the customer even if the product fails. Lose-win guarantees not only remove risk for the consumer but put the company at financial risk.

  Here are a few examples of putting your money where your mouth is.

  Delivered in 30 minutes or less or it’s free!

  (Domino’s Pizza built its business on this guarantee.)

  We’re so confident you’ll like CIALIS, if you don’t we’ll pay for the brand of your choice.

  (The “CIALIS® Promise Program” offers a free sample of CIALIS and then offers to pay for competing products if CIALIS doesn’t live up to the hype.)

  If your car is stolen, we’ll pay $500 of your insurance deductible.

  (This guarantee helped THE CLUB become the #1-selling mechanical automobile anti-theft device in the world.)

  110% guaranteed to work within 60 minutes of the first dose.

  (This was for BodyQUICK and a first among sports nutrition products. I offered to not only refund customers the price of the product if it didn’t work within 60 minutes of the first dose, but also to send them a check for 10% more.)

  The lose-win guarantee might seem like a big risk, especially when someone can abuse it for profit like in the BodyQUICK example, but it isn’t … if your product delivers. Most people are honest.

  Let’s look at some actual numbers.

  Returns for BodyQUICK, even with a 60-day return period (and partially because of it57), are less than 3% in an industry in which the average is 12–15% for a normal 30-day 100% money-back guarantee. Sales increased more than 300% within four weeks of introducing the 110% guarantee, and returns decreased overall.

  Johanna adopted this lose-win offer and came up with “Increase sport-specific flexibility 40% in two weeks or return it for a full refund (including shipping) and keep the 20-minute bonus DVD as our gift.”

  Sherwood found his guarantee as well: “If these shirts are not the most comfortable you’ve ever worn, return them and get 2-times your purchase price back. Each shirt is also guaranteed for life—if it gets threadbare, send it back and we’ll replace it free of charge.”

  Both of them increased sales more than 200% in the first two months. Return percentage remained the same for Johanna and increased 50% for Sherwood, from 2 to 3%. Disaster? Far from it. Instead of selling 50 and getting one back with a 100% guarantee [(50 x $100) – $100 = $4,900 in revenue], he sold 200 and got six back with the 200% guarantee [(200 x $100) – (6 x $200) = $18,800 in revenue]. I’ll take the latter.

  Lose-win is the new win-win. Stand out and reap the rewards.

  Little Blue Chip: How to Look Fortune 500 in 45 Minutes

  Are you tired of sand being kicked in your face? I promise you new muscles in days!

  —CHARLES ATLAS, strongman who sold more than $30 million worth of “dynamic-tension” muscle courses through comic books

  If approaching large resellers or potential partners, small company size will be an obstacle. This discrimination is often as insurmountable as it is unfounded. Fortunately, a few simple steps can dramatically upgrade your budding Fortune 500 image and take your muse from coffee shop to boardroom in 45 minutes or less.

  1. Don’t be the CEO or founder.

  Being the “CEO” or “Founder” screams start-up. Give yourself the mid-level title of “vice president” (VP), “director,” or something similar that can be added to depending on the occasion (Director of Sales, Director of Business Development, etc.). For negotiation purposes as well, remember that it is best not to appear to be the ultimate decision-maker.

  2. Put multiple e-mail and phone contacts on the website.

  Put various e-mail addresses on the “contact us” page for different departments, such as “human resources,” “sales,” “general inquiries,” “wholesale distribution,” “media/PR,” “investors,” “web comments,” “order status,” and so on. In the beginning, these will all forward to your e-mail address. In Phase III, most will forward to the appropriate outsourcers. Multiple toll-free numbers can be used in the same fashion.

  3. Set up an Interactive Voice Response (IVR) remote receptionist.

  It is possible to sound like a blue chip for less than $30. In fewer than ten minutes on a site such as www.angel.com, which boasts clients such as Reebok and Kellog’s, it is possible to set up an 800 number that greets callers with a voice prompt such as, “Thank you for calling [business name]. Please say the name of the person or department you would like to reach or just hold on for a list of options.”

  Upon speaking your name or selecting the appropriate department, the caller is forwarded to your preferred phone or the appropriate outsourcer—with on-hold music and all.

  4. Do not provide home addresses.

  Do not use your home address or you will get visitors. Prior to securing an end-to-end fulfillment house that can handle checks and money orders—if you decide to accept them—use a post office box but leave out the “PO Box” and include the street address of the post office itself. Thus “PO Box 555, Nowhere, US 11936” becomes “Suite 555, 1234 Downtown Ave., US 11936.”

  Go forth and project professionalism with a well-designed image. Perceived size does matter.

  COMFORT CHALLENGE

  Relax in Public (2 days)

  This is the last Comfort Challenge, placed prior to the chapter that tackles the most uncomfortable turning point for most office dwellers: negotiating remote work agreements. This challenge is intended to be fun while showing—in no uncertain terms—that the rules most follow are nothing more than social conventions. There are no legal boundaries stopping you from creating an ideal life … or just being self-entertained and causing mass confusion.

  So, relaxing in public. Sounds easy, right? I’m somewhat famous for relaxing in style to get a laugh out of friends. Here is the deal, and I don’t care if you’re male or female, 20 or 60, Mongolian or Martian. I call the following a “time-out.”

  Once per day for two days, simply lie down in the middle of a crowded public place at some point. Lunchtime is ideal. It can be a well-trafficked sidewalk, the middle of a popular Starbucks, or a popular bar. There is no real technique involved. Just lie down and remain silent on the ground for about ten seconds, and then get up and continue on with whatever you were doing before. I used to do this at nightclubs to clear space for break-dancing circles. No one responded to pleading, but going catatonic on the ground did the trick.

  Don’t explain it at all. If someone asks about it after the fact (he or she will be too confused to ask you while you’re doing it for 10 seconds), just respond, “I just felt like lying down for a second.” The less you say, the funnier and more gratifying this will be. Do it on solo missions for the first two days, and then feel free to do it when with a group of friends. It’s a riot.

  It isn’t enough to think outside the box. Thinking is passive. Get used to acting outside the box.

  TOOLS AND TRICKS

  Looking Huge—Virtual Receptionist and IVR

  Angel (www.angel.com)

  Get an 800 number with profes
sional voice menu (voice recognition departments, extensions, etc.) in five minutes. Incredible.

  Ring Central (www.ringcentral.com)

  Offers toll-free numbers, call screening and forwarding, voicemail, fax send and receive, and message alerts, all online.

  CD/DVD Duplication, Printing, and Product Packaging

  AVC Corporation (www.avccorp.com)

  SF Video (www.sfvideo.com)

  Local Fulfillment (fewer than 20 units shipped per week)

  Mailing Fulfillment Service Association (www.mfsanet.org)

  End-to-End Fulfillment Companies (more than 20 units shipped per week, $500+ setup)

  Motivational Fulfillment (www.mfpsinc.com)

  The secret backend to campaigns from HBO, PBS, Comic Relief, Body by Jake, and more.

  Innotrac (www.innotrac.com)

  They are currently one of the largest DR marking companies.

  Moulton Fulfillment (www.moultonfulfillment.com)

  200,000-square-foot facility with real-time online inventory reports.

  Call Centers (per-minute and/or per-sale fees)

  There are generally two classes of call centers: order takers and commissioned reps. Interview each provider you consider to understand the options and costs involved.

  The former is a good option if you give the product price in an advertisement (hard offer), are offering free information (lead generation), or don’t need trained salespeople who can overcome objections. In other words, your ad or website is pre-qualifying prospects.

  The latter would more appropriately be called “sales centers.” Operators are commissioned and trained “closers” whose sole goal is to convert callers to buyers. These calls are often in response to “call for information/ trial/sample” ads that don’t feature a price (soft offers). Expect higher costs per sale.

  LiveOps (www.liveops.com)

  Pioneer in home-based reps, which often ensures more calls are answered. Provides comprehensive service with agents, IVR, and Spanish. Often used for one-step order taking instead of soft offers.

  West Teleservices (www.west.com)

  29,000 employees worldwide, processes billions of minutes per year. All the high-volume and low-price players use them for lower-priced products or higher-end products with free trials and installment plans.

  NexRep (www.nexrep.com)

  Highly skilled home-based sales agents that specialize in B2C and B2B, inbound and outbound programs. If performance, speed to respond, Internet integration, and quality customer experience are your priorities, this is a strong option to consider.

  Triton Technology (www.tritontechnology.com)

  Commission-only sales center know for incredible closing abilities (see the movie Boiler Room and Alec Baldwin’s character in Glengarry, Glen Ross). Don’t call unless your product sells for at least $100.

  CenterPoint Teleservices (http://www.centerpointllc.com)

  This sales force has experience to convert sales from hard offers, soft offers, and multiple offers (upselling additional products after a caller agrees to purchase the advertised product) originating from radio, TV, print, or the web.

  Stewart Response Group (www.stewartresponsegroup.com)

  Sales-driven call center leveraging the home-agent model for both inbound and outbound programs. Another high-touch boutique center.

  Credit Card Processors (merchant account through your bank necessary)

  These companies, unlike options in the last chapter, specialize in not only processing credit cards but interacting with fulfillment on your behalf, removing you from the flowchart.

  TransFirst Payment Processing (www.transfirst.com)

  Chase Paymentech (www.paymentech.com)

  Trust Commerce (www.trustcommerce.com)

  PowerPay (www.powerpay.biz)

  One of the Inc. 500 Fastest-Growing Private Companies. Process credit cards from your iPhone and more.

  Affiliate Program Software

  My Affiliate Program (www.myaffiliateprogram.com)

  Also see the affiliate programs listed in the “Tools and Tricks” at the end of Chapter 9.

  Discount Media Buying Agencies

  If you go to a magazine, radio station, or TV channel and pay rate card—the “retail” pricing first given—you will never make it big. To save a lot of headache and expense, consider using ad agencies that negotiate discounts of up to 90% in their chosen media.

  Manhattan Media (Print) (www.manhmedia.com)

  Great agency with fast turnaround. I’ve used them since the beginning.

  Novus Media (Print) (www.novusprintmedia.com)

  Relationships with 1,400+ magazine and newspaper publishers with an average of 80% of rate card. Clients include Sharper Image and Office Depot.

  Mercury Media (TV) (www.mercurymedia.com)

  Largest private DR media agency in the U.S. Specialists in TV but can also handle radio and print. Offer full tracking and reporting to determine ROI.

  Euro RSCG (Cross Media) (http://www.eurorscgedge.com/)

  One of the worldwide leaders in DRTV media across all platforms.

  Canella Media Response Television (TV) (http://www.drtv.com)

  Uses the innovative P/I (per inquiry) model for compensation, where you split order profits instead of paying for time upfront. This is more expensive per order if you have a successful campaign, but it lowers upfront investment in media.

  Marketing Architects (Radio) (www.marketingarchitects.com)

  The de facto leaders in radio DR but a bit on the expensive side. Almost all of the most successful DR products—Carlton Sheets No Money Down, Tony Robbins, etc.—have used them.

  Radio Direct Response (Radio) (www.radiodirect.com)

  Mark Lipsky has put together a great firm, with clients ranging from small direct marketers to Travel Channel and Wells Fargo.

  Online Marketing and Research Firms (PPC campaign management, etc.)

  Starting Small—Find a Local Individual to Help

  SEMPO (www.sempo.org; see the member directory)

  Excellent Mid-Size Firms

  Clicks 2 Customers (www.clicks2customers.com)

  Working Planet (www.workingplanet.com)

  The Hard-Hitting Pros—Small Campaigns Start at Several Thousand Dollars

  Marketing Experiments (www.marketingexperiments.com) This is my team.

  Did It (www.did-it.com)

  ROIRevolution (www.roirevolution.com)

  Cost is determined by a percentage above monthly PPC spend.

  iProspect (www.iprospect.com)

  Full-Service Infomercial Producers

  These are the companies that made Oreck Direct, Nutrisystem, Nordic-Track, and Hooked on Phonics household names. The first has an excellent DRTV glossary and both sites offer excellent resources. Don’t call unless you can budget at least $15,000 for a short-form commercial or $50,000+ for a long-form infomercial.

  Cesari Direct (http://www.cesaridirect.com/)

  Hawthorne Direct (www.hawthornedirect.com)

  Script-to-Screen (www.scripttoscreen.com)

  Retail and International Product Distribution

  Want to get your product on the shelves of Wal-Mart, Costco, Nordstrom, or the leading department store in Japan? Sometimes it pays to have experts with relationships get you there.

  Tristar Products (http://www.tristarproductsinc.com)

  Behind the PowerJuicer and other hits. Tristar also owns their own production studio and can therefore offer end-to-end services in addition to retail distribution.

  BJ Direct (International) (www.bjgd.com)

  Celebrity Brokers

  Want a celebrity to endorse your product or be a spokesperson? It can cost a lot less than you think, if you do it right. I know of one clothing endorsement deal with the best pitcher in Major League Baseball that cost just $20,000 per year. Here are the brokers who can make it happen:

  Celeb Brokers (www.celebbrokers.com)

  President Jack King was the one who first turned me on to
this fascinating world. He knows it all inside and out.

  Celebrity Endorsement Network (www.celebrityendorsement.com)

  Celebrity Finding

  Contact Any Celebrity (www.contactanycelebrity.com)

  It is possible to do it yourself, as I have done many times. This online directory and its helpful staff will help you find any celebrity in the world.

  LIFESTYLE DESIGN IN ACTION

  After I read the section on outsourcing, I thought it sounded like a novel idea but would never work for me. However, since the rest of the book was “spot on,” I decided to try it. Rather than ship my money overseas, I opted to keep it in the U.S. and use my niece in college, with skills on computers I can’t even fathom, to test the theory. Turns out it has been a great experience and timesaver for me, as well as moneymaker for her. It seems I have all of the positives of out sourcing but none of the hassles of language and such…. Being able to mold a young mind for the better ties in well with the rest of your book …

  —KEN D.

  Hey Tim, You mentioned www.weebly.com a few months ago, and I’ve been using that to build all my muse sites and think it’s great! Also, Facebook groups has (almost) every niche imaginable. So what I have found success in doing is: (1) Finding a niche group that would buy my muse, (2) sending a message to each admin telling them how my muse will help their group members. Then politely asking them to put a blurb in the “Recent News” section of the group. This makes it more trustworthy than a wall post, and it stays up there (free advertising) until the admin removes it. One hundred times better than a wall post. In one case, the admin purchased my muse, posted my note for me on the groups’ “Recent News” section, then e-mailed the entire group telling them they have to check out my site.