The story of how a girl called Alice made me bankrupt…
Alice? Who the f*ck is Alice?
The year was 1996, and I was 2 years into my teaching degree.
I'd seen Dead Poets Society multiple times, but they'd never once mentioned OFSTED, Core Competencies or the amount of lesson planning that was involved in being a teacher.
I felt a bit cheated, to be honest.
Although my job was to teach Maths to 14 year olds, as soon as the lunchtime bell rang, I'd take my tuna butty, lock myself in my 1978 lime-green Mini and get lost in business biographies and marketing guides.
Deep down, I knew that I couldn’t be a Secondary School teacher – I just wasn’t able to stick to the rules. (Plus, I hated kids.)
So, that summer, I transferred to a business degree and learnt about marketing, growth and business finance.
I frickin' loved it.
So, now fast-forward to 2002 and Alice…
It was 2.30am, one cold, dark night in February and I was with some friends in Leeds, desperately emptying cupboards on the search for more booze to impress this girl who’d come home from the pub with us all.
“If only there was someone we could call who’d bring us a bottle of Vodka,” said Alice (the girl who was temporarily the love of my life).
“Ah well. I’m going home. Night night everyone.”
She might as well have ripped my heart out, and thrown it in the front garden as she left.
“Hang on lads – I've got a great idea…”
Let's deliver beer to students at 4am!
Now I’d love to say that had such a delivery service existed in 2002, then I'd have made Alice my wife for the evening, but I sincerely doubt that.
What did happen though, was a fuzzy business idea got lodged in the back of my head, and just would not go away.
After a week of research, planning, dreaming and plotting, I found myself in the office of a lawyer who specialised in UK Licensing Law, trying to find legal ways to deliver alcohol after 10pm.
Within weeks, GimmeSomeBeer.com was an actual entity, with a small warehouse, phone lines, flyers and a very happy, smiling owner, proudly sitting by the phone, van-keys in hand, ready to service the thirsty late night drinkers of Yorkshire.
Of course, things rarely happen as they do in our dreams. 5 weeks in, and I’d only sold 4 bottles of Blossom Hill Rose and a pack of fags.
Suddenly, at 4am on one Tuesday morning, (during a dull BBC documentary on Migrational Sea Birds) it hit me:
I’d been too busy building the business, and completely forgotten to do any marketing.
600,000% increase in turnover in 5 weeks…
Clearly, something needed to be done, and fast.
So I hired some outgoing (and cheap) students, and sent them up and down nightclub queues to gather names and emails of our target customers.
It worked! Within days, I was recruiting more drivers to keep up with demand, and within weeks, we were turning over £15,000 a month.
I’d just learnt my first real-life lesson in marketing:
(Actually, it was a thirsty crowd in my case)
I knew I was well on my way to fame and fortune!
Quick note: the phrase Feed a starving crowd comes from Robert Coorey’s excellent book, based on a quote by Gary Halbert. It’s all about finding a market that is ‘hungry’ for your product and will do almost anything to get it.
I fought the (licensing) law, and the law won…
My ‘starving crowd' was a smallish segment of the market who:
- Drank after 2am (this was before late night opening)
- Were willing to pay 5–8 times more than the off-license to have beer delivered to their home
- Were willing to give their credit card details over the phone (to some random strangers in a warehouse by the river!)
From that point onwards, things went really well. I carried on building the business and by year 2, I was turning over just under half a million a year with another outlet about to open in another city.
Then, disaster struck.
The licensing laws changed and supermarkets like Spar could (and did) sell alcohol 24 hours.
My business dropped from nearly £20,000 per week to just £1,000 almost overnight.
I had to lay off 10-15 staff, and I was struggling to pay my bills.
I also got a very scary unannounced visit from the Customs and Excise (VAT) people one afternoon, and then (probably connected, in hindsight) I got audited by the taxman.
It was a very uncomfortable time!
But something funny happened – even though 80% of my customers had disappeared, I still had a small number of people willing to pay premium prices for deliveries.
I’d stumbled upon my second marketing lesson:
So don't treat them all the same!
(I'm pretty sure that Dan Kennedy said this first, but let's pretend I'm just as clever as him for a moment.)
Some people don't care about value for money
It’s funny – at the time, I was very price aware, and I always looked for the best value for money, so I just couldn’t comprehend why this small, loyal niche of customers didn’t seem to care that it cost £12 for 6 cans of Stella Artois (this was back in 2005).
My hero Richard Branson had inadvertently taught me that all successful businesses are big businesses and relied on volume.
However, here I was, having just stumbled across a small, but affluent market niche who seemed to value convenience over price.
Interestingly, Stella’s offer is ‘Reassuringly expensive’.
In other words, ‘you’ll look expensive and successful if you drink this'. Of course, this only applies to a small number of lager drinkers, but it’s more than enough to make Stella Artois a popular, yet premium-priced drink.
However, my problem was that I had set myself up for scale. At this point I had a large warehouse, banks of phones, and 20+ staff – all of which were unsustainable with this new business model.
Ironically, had I been a traditional Off-License (rather than trying to be a new breed of off-license), this would have been the perfect add-on.
A brilliant way to generate extra sales at a much higher margin.
Despite finally stumbling on this profitable strategy, I just couldn’t sustain the overheads.
I had a £30,000 overdraft, a £40,000 business loan and constant heartburn, so eventually the business folded, taking me down with it.
Bankruptcy at 29…
On a fittingly cold, miserable day in January 2007, I was declared bankrupt with £103,000 in debts.
I couldn't keep up repayments on my mortgage either, so I had my house repossessed, as well as an apartment I’d bought in Manchester as an investment.
“Shit!”, I thought.
However, just like my disappointing empty-cupboard experience with the beautiful Alice 5 years earlier, going through all this had given me a business idea.
“What if I told my story, and offered to help others in debt? I could provide genuine solutions, and earn revenue at the same time!”
So, 3 months later, I started my 3rd business: The Homeowners Advice Centre – helping homeowners who were in debt.
Business No 3: “I'll help you with debt”
I knew all about repossession and bankruptcy so I was already a bit of an expert!
I recruited my office manager from the beer days to be our operations director (plus he could get mortgages, and I couldn't, as I was still bankrupt!), and we were off!
Granted, it wasn’t the best name, but my new business partner and I took everything I knew about debt, IVAs, bankruptcy and loans and built a website that outlined all available options to a homeowner drowning in debt.
I leveraged the first lesson in marketing (Feed a starving crowd) and offered life-saving help to those drowning in debt.
I recalled my second lesson in marketing (All customers are not equal) and specifically targeted homeowners in Manchester with equity, because we knew we could help them (and the options open to them were more profitable for us).
I also was about to discover the 3rd lesson in marketing: A compelling story gets attention.
This works both online and offline!
Crafting the story of a Man who's SERIOUSLY f*cked Up…
So I took my woeful bankruptcy experience and our new-found knowledge on debt, and crafted a story that other homeowners could relate to.
We spent our last £1,500 on an advertorial in the Manchester Evening News and I wrote a news ‘story' using the same style as the editorial articles in the main newspaper.
An Advertorial is where you pay for space in the publication and then write an article on your company. Most articles are terrible and talk all about themselves – we did things differently…
> The heroes of the story were me & my business partner, who could provide solutions to deeply concerned, debt-laden homeowners.
> The villains of the story were the lenders, who were threatening repossessions and ‘further action’ to poor homeowners.
> The hook of the story was that we were slaying these villains and standing up for the poor ‘townsfolk’ whose homes were under threat from the nasty
Once we'd honed the story (and it was all based on facts), we tried to get in front of as many homeowners as we could.
We paid for space in newspapers, we wangled our way onto the BBC news, we were featured on consumer advice websites and even became the go-to spokesperson on debt for organisations like the Financial Times.
Along the way, we also found a way to make really good money, that was a win:win for everyone.
We discovered that most repossession judges would postpone a repossession if there was a chance that the homeowner could sell the property within 56 days.
We got expert mortgage brokers and conveyancers in place, and started buying houses that were days away from being repossessed by the lenders (much to the frustration of the lender's lawyers!).
We then rented these homes back to the families at affordable rents – each family got an option to buy the house back when they were back on their feet.
This accidental strategy netted us 37 houses, with a pretty decent monthly rental income, and a property portfolio valued at £5million which we still own jointly.
We also learnt the next big Marketing lesson: Solve the customer's problem, not your problem.
I know – this sounds weird. Read on for an explanation.
How we got a constant, steady, automated flow of leads
This is probably the most counter-intuitive of all of the 5 rules, so let me explain.
Most of our competitor’s websites had a call to action like this:
“If you want us to help you get out of debt, call us on 0161777777”.
Of course, this was asking the customer to solve the company's problem – namely that the company wants phone calls from desperate homeowners.
It did not provide immediate help to solve the customer’s problem – namely that the customer is deep in debt.
So we devised a call to action that was all about the customer’s problem.
After a little bit of experimentation, we came up with a Homeowner’s Debt Solution Pack – this was a set of PDFs that:
- Explained all the options available to a homeowner in debt
- Offered real-life case studies and testimonials from happier homeowners
- Gave a ‘Peek Behind the Curtain’ by breaking down the stages of each process
- Offered 21 brutally honest FAQs that would explain all the downsides as well as the benefits
The take up was incredible, and it slashed our marketing bill considerably.
You see, our competitors were paying big money to drive traffic to their website, where 1–2% of visitors would call them. (Of course, only 20% of these would actually convert to revenue, making it a very expensive way to market).
Instead, we were driving traffic to our website, but 18–20% of them were downloading our pack.
We were getting 10 times as many leads from our marketing, meaning we could spend a fraction of our budget and get the same results.
We had a higher conversion rate too.
All of this came from the realisation that we should be concentrating on solving the customer’s problems, not ours.
There were several other bonuses of using this method:
- Trust levels were much, much higher. Our competitors were trying to sell the reader something, but were were trying to help the reader solve a problem
- Our lead time was much shorter (we provided all the information they needed in one place)
- We jumped to the top of the list as a trusted adviser (we helped them find the right option and defeat the nasty lenders)
- We could measure our marketing much more easily (if we ran an advert in the newspaper, we could see exactly how many new downloads there were that evening – we used different domains for different marketing channels).
Finally, I could calculate what I should be paying for each advertising campaign!
This also put our lead generation on complete autopilot!
We could concentrate on helping our prospects solve their problems, knowing that every single morning we’d have an inbox full of brand new leads and meeting requests – all automatically.
In fact, at one point, we were buying 3 houses a week, each for a substantial discount, plus we had a tenant who had an incentive to pay rent on time (as they had an ‘option to buy back' that was dependant on a clean payment record)!
Life was good.
Even though we felt we had cracked the marketing, there was one last lesson that we’d not yet learnt.
Sales can take a loooooooong time to come
The final marketing lesson we learnt was this:
All this time we’d been collecting thousands of names & addresses a month.
Of course, like every business, only about 20% converted (we also did IVAs, debt management plans and remortgages which allowed us to help many more people).
This meant that 80% had either ignored our initial offer of a meeting, or we'd had a meeting and decided not to use us.
I had a hunch that not all of this 80% had solved their problem yet, and I wanted to continue to offer to help them until they either told us to go away or bought from us.
So I wrote 20 follow-up letters & emails that were designed to help the homeowner make an informed decision about their debt issue.
These would go out every 3 weeks and we’d use Aweber to deliver the emails. However the ‘snail mail’ letters posed a problem.
We needed to mail merge each prospect's details into the right letter in the right sequence.
E.g. Mary might be on letter 4, Dave could be on letter 6 and Irene might need letter 1.
We needed a system that would work out which letter each prospect should be getting next, and then mail-merge it and print it.
This was 2008, and marketing automation systems were insanely expensive (Infusionsoft was about £20,000 at the time, and my favourite CRM wasn't even invented!) so I built my own flimsy autoresponder system using Filemaker (remember?!), Microsoft Word and an ancient book from Amazon.
Incredibly, it worked!
Every Friday I’d print out hundreds of letters, fold them, stamp them and put them in our local postbox.
My business partner thought I was nuts!
“Why are you bothering? If they haven’t said yes by now, then they won’t say yes at all!”
However, I strongly believed that this was wrong – so I ignored him (and his good-natured mickey-taking), and kept going.
I have to admit, after weeks and weeks of this, I was pretty fed up. The envelope-folding was hurting my hands, and I was spending hundreds on postage a month.
Then, one sunny afternoon, after a short phone call, Chris strode over to my desk and gave me an awkward man-hug.
“You’ll never believe it – we’ve just made £22,000 from your letters.”
Turns out, some lovely lady had been getting the letters for months, and was still deciding whether to sell her house and rent it back.
It took 12 letters (and 8 months) for her to decide we were the right ones. (“All the others have stopped calling months ago”, she said).
Ever since then, one of the first things I do when I work with my private consulting clients is to run a lead generation campaign to their existing list. (In most cases, the income generated from this alone pays my consulting bill!)
Private Consulting clients…
Wondering what happened to the property business?
We still have 36 of our 37 houses (with their monthly rental income), and my business partner now invests in private property projects all around Manchester (you may have seen some of his developments).
These days, I spend my time reading, testing, writing and teaching marketing, and I do work with a handful of Private Consulting clients who have high-growth potential businesses, implementing my unique Marketing Blueprint™ in their businesses.
I do occasionally invest in other businesses or property deals, but my passion lies in the marketing, if I'm honest.
So what now?
Feeling inspired? Want to build your own marketing systems? The best place to start is with the Marketing Blueprint™ training I've created here.
Or maybe you'd like to read my Manifesto, which outlines the 24 things I strongly believe.
Or perhaps you want to talk to me about consulting…? Drop me an email: al@StealMyMarketing.com.