Jay Abraham Case Study #174
From: Dave RiggleTo: Jay Abraham Sent: Monday, August 05, 2002 9:14 AM
Hi Jay,
I have hired consultants who helped my business. Friends have given me advice. I've read hundreds of books and thousands of magazines. Some employees have helped my business succeed. But when I think about where my business is going now, it is clear that you have had 100 times more impact than any other source of ideas I've ever been exposed to. I owe you a great deal.
My association with you has been the best value imaginable. I thought it funny how you pitched the value of your ideas in such long letters but I figured if it worked on me there was something there. My co-workers freaked out when I spent $5,000 to attend your seminar in Tampa but now your ideas help me close sales that generate $100,000 in profit. As my business continues to grow, the ideas you've given me will be worth millions of dollars.
Most of the things we spend our time on are little things; how to save on insurance, the best places to buy software, how to save fifty bucks-- that sort of thing. Nobody else offers proven, simple and inexpensive ways to double or triple business. Even though you and I have never met in person, I'm a big fan and greatly appreciate our association. I am more jazzed about improving our marketing than anything else I've done in business. Ninety percent of the changes my company will make in the coming year are a direct result of your work.
Positives include creation of new jobs, consistent profits instead of ups and downs, and greater wealth and security for my employees and myself.
I first started listening to your tapes in 1994 after hearing your Power Talk interview tape with Tony Robbins. I immediately contacted you for something - I think you sold me or gave me a copy of Stealth Marketing. Talk about an eye-opener. I'd been a pretty good sales guy for 15 years, but until then I didn't even know what marketing was.
After that, you continued to send me tons of stuff - sometimes two letters a week, for probably a year even though I didn't send you a dime. Every time I'd get one of those obnoxious looking letters with the red or blue sub-heads everywhere, I'd read those damn things from start to finish. And some of them were 20 pages long. Needless to say, since 1995 most of our mass mailers look and read just like those. Thanks.
About EMS
I started Energy Management Systems (EMS) 15 years ago. We have offices in Indianapolis & Elkhart Indiana and sell building automation systems to industrial clients all over the Midwest. Clients cut their heat/cool expense by 35% to 50% - typically $100K to $300K per facility. EMS is unique because we package a full range of services that makes it easy to buy and use a complex product. We calculate energy savings for clients before they buy and verify savings every month after installation.
The critical thing in our business is long-term service and that's our strength. Most companies, if left on their own will utilize an energy management system less and less over time. EMS clients don't have that problem because we offer full management of their systems over a modem from our office. None of our services individually is rocket science, but EMS is the only company in the Midwest that offers turnkey packages that ensure results. EMS guarantees savings for clients and we make sure every one of them is happy.
During our first 10 years it was tough to grow; we were ahead of our time. We built an impressive client list, which was critical to our success, but overall, there was much apathy about energy conservation during that time. The energy market is much different now and we're poised for tremendous growth.
Energy prices have jumped in the past two years and since electricity was deregulated in 1997, executives have to pay attention to energy costs. Global competition is making cost cutting a necessity, and automation in the workplace is accepted. It's hard to quantify, but our market is probably twice as good as five years ago.
Having hundreds of savings reports from well-known clients such as GE, Delta Faucet and Wm. Wrigley Jr. Co (Wrigley Gum), make it easier to convince new prospects that our system will produce the savings they desire.
Our Business DOUBLES, Maybe TRIPLES This Year!!
Since meeting Jay, I've kept a business plan of marketing improvements - a menu of things I want to have in place. Although I'm frustrated with the progress I've made implementing them, the ones I have done are making a difference. Jay talks about changes adding up over time and it is happening now. It is truly about to become exponential. EMS has sold about $1.5 million a year since the early nineties. Jay points out three ways to grow a business and we're doing two of them. We're getting more clients and they are paying us more money per sale - both due to Jay.
Five years ago our average sale was $75K Because we're targeting Dream 100 prospects, now it's $100K to $400K - that's a huge difference for us. Six months ago we increased the sales staff from one person to four and have generated sales proposals at twice the rate of last year. We're just about to double or triple our monthly sales volume depending upon which proposals close over the next few months.
Sales volume should hit $3M easily this year and with a couple more superstars we should sell at least $5M next year. My next hire is a person to help systemize marketing functions. It's exciting to be able to plan growth with little risk. We just have to execute consistently.
Referrals
We ask clients for referrals now but it's hit or miss. Soon we'll organize where in the sales process we'll ask for them, who will do it, and how we'll do it -- a combination of face to face, letters, e-mail etc. I really like the idea of showing clients a list of our Dream 100 and asking them whom they know at these companies. We have meetings with clients 90 days after a system is installed to discuss any problems and review their energy savings. We're going to use those meetings to get referrals too. We plan to offer big screen TV's or charity contributions for them personally and free extended service to their company if EMS sells a system to one of their referrals.
Risk-Reversal
We had a decent guarantee before but we made it even stronger. It's right out front. This is an integral theme that Jay reminds me of constantly. Simple, but probably the most profound question someone heading sales and marketing should think about. We changed our sales proposals to deemphasize the cash price and emphasize the fact that clients can pay $4,000 per month and save $12,000 per month.
Their annual savings and cash price used to be compared on page one along with the payback period. We stated that financing is available but prospects never forgot that big sticker price of $300,000 or so. We still take cash payments but now the price is buried way in the back.
We also created a "Below Prime" lease rate with the company that finances systems for EMS clients. It costs us some of our price -- we have to buy down the rate just like points on a mortgage, but it works well and that's what counts. Without that, some shortsighted finance people get hung up on a few pennies of interest instead of the many thousands of dollars we can save them. These two strategies eliminate the biggest problem - the money.
Mass Mailers
We now use 2 or 3 headlines per letter and changed our copy to be informal and direct. I also learned from Jay's letters not to attempt to write to a broad audience. I'd rather have 10 prospects get excited and take action than to have a 100 people think that we're okay, then throw away my letter. It pays to talk specifically to the people we can help the most.
USP
I've done a bad job with this one. Can't seem to come up with anything that fits, is memorable and is short.
Strategic Alliances
We pushed this hard a few years ago but can't seem to find good partners. Our product is expensive, complex, and must be customized every time -- not an easy sale for anybody, regardless of their relationship with our target prospects. We partnered with some utility companies right after electricity deregulated in 1997 and had some success. They gave us leads from their clients and we sold the systems. That gave us much credibility with prospects and cheap leads, however, deregulation turned out to be a moving target and most utilities abandoned sales of energy-saving products within a short time. I still believe strongly in alliances and we'll revisit this in the future.
Consistent Client Contact and Building Trust with New Prospects
This is going to be a huge area for us. We have good gross margins and making one or two more sales in a year is big, especially when we've already done a lot of sales work upfront at our cost. We seldom lose sales to competitors; we just get delays. I learned this from Jay's constantly sending me things of interest. Nobody has ever sent me one tenth of what Jay has and I would never consider spending any money with anyone else. I want to create that bond with my Dream 100.
We've done some of this - always with success. We just e-mailed 100 people at 30 companies which did not buy our system in the past two years - total cost about $150 We announced our new website and reminded them of the savings they are losing. This is a great way of going over the head of middle managers that stalled our projects the first time. We got two calls immediately to re-liven talks on proposals totaling $610,000. These are like gold. The initial work is all done and we have the credibility of already knowing their situation.
We will organize an array of stuff to send monthly - savings reports of their competitors or neighboring companies, press releases, informational articles about energy price trends etc. We'll also use this approach to develop rapport and new leads with our Dream 100.
PEQ & PEQ II - You Guys Really Hit It with PEQ!
Chet really hit home. We updated our website and printed some great looking case studies for handouts.
Core Story
Before I started this business, the products I sold had great core stories. I was in my early 20's and made them up without realizing why, but it worked like a charm. I've had this business 15 years and until PEQ, never thought about creating one for my own business. Stupid! Anyway, ours is now 75% complete. Doing the research has given us interesting topics to discuss with clients - as consultants.
Dream 100
Targeting the best prospects allowed us to increase our average sales price by 250%. PEQ is awesome. I've barely scratched the surface of that program yet.
Jay thanks again for all of your efforts. You're a great communicator with great ideas. Keep them coming. As EMS grows, I intend to involve more of our people in your programs. Anyone can contact me for a reference anytime.
Dave Riggle,
President
Energy Management Systems
800-541-5740 or 317-341-5968
www.energymanagement.com
My statement is true and provable and you have my permission to use my testimonial in your promotional and marketing endeavors.