SPI 441: Your Relationship with Selling and How to Finally Get Your First Customers with Ramit Sethi

SPI 441: Your Relationship with Selling and How to Finally Get Your First Customers with Ramit Sethi

Pat Flynn:
Okay, okay, let me ask you a quick question just right up front here: Have you ever had to make a pitch for something, whether it’s online—you’re selling an online course, or a product, or an ebook or something—or even offline, maybe on stage or in person? You have to make a sale, and if that sale or pitch has ever made you nervous or worried that you might upset a person, so you kind of maybe lightly pitch because you just don’t want to make a person upset, or you just aren’t sure if a person’s interested, so you kind of hold back a little bit. Or maybe you don’t even make the pitch at all, if you can relate to that, then this is the episode for you because in this episode I speak with Ramit Sethi, the person who’s come on the show most as a guest here on the Smart Passive Income Podcast, to talk about the psychology of selling. Especially for those of you who are just getting started selling stuff, maybe you have a brand or maybe you’re about to start a brand a build an audience but you are yet to sell or get your first customers.

Pat:
Or maybe you’ve got a couple customers, but you know you’re still a little bit timid, this is the episode for you because we’re going to talk about your relationship with selling. We’re going to unpack what’s happening in the brain and specifically how Ramit teaches us and his students. He has a new course called Earnable, which he’ll mention a few times here today. He’s also interestingly enough, sunset—meaning closed down—two of his most popular million-dollar courses that he’s made, that I’ve promoted in the past. He’s closed the doors to them, and I ask him why right upfront. So make sure you stick around, there’s a lot to unpack here, and again if you need some help selling, this is for you, I hope you enjoy, cue the intro.

Announcer:
Welcome to the Smart Passive Income Podcast where it’s all about working hard now so you can sit back and reap the benefits later, and now your host, his nickname in middle school was Stormtrooper because when playing basketball, he missed all of his shots, Pat Flynn.

Pat:
What’s up, everybody? Pat Flynn here, and welcome to session 441 of the Smart Passive Income Podcast, my name is Pat Flynn, here to help you make more money, save more time and help more people too, in this episode, we’ll do exactly that, and yes, help people too, selling to help people. If you’re not helping people, if you’re not building solutions that actually help people, well, that maybe is the first problem. So I just want to get that out of the way because if you are trying to sell something that you don’t believe in, if you’re trying to sell something that maybe isn’t even yours and you have really, no idea what it is, well, it’s going to be very difficult, and if you do, it’s going to seem a little bit just disingenuine.

Pat:
We want a genuine promotion of genuine products that you know you’re creating, or experiences, or programs that you’re creating to help serve people. That’s sort of rule number one, but the funny thing is, even though we know we have experience and we know we’ve crafted or are going to craft an online course or a program, or a book, or what have you, a membership site, whatever, and you know it’s going to be helpful yet we still hold back from what we should be doing when we say, “Go buy this thing.” How do we pitch something? How do we do this for the first time? How do we discover who we should be even selling to? Well, today, we’re going to unpack all that with one of my mentors, Ramit Sethi, not an “official” mentor, I mean, I’ve hired him in the past for some help, for sure.

Pat:
But he’s had a dramatic effect on my business career, and I’m very happy to have him on the show to just unpack this for real for you. I will say, there’s a couple moments where you’re going to hear some beeps because he swears a couple times, but I’m going to keep those in there, but they’re just beeps. I wasn’t able to take them out and edit without it affecting the stance of what he was saying, a lot of the stuff, he’s very passionate about. So it’s not too many, it’s not like, I know he’s not going to mind me saying this, but when Noah Kagan was on the show initially. I mean, I literally spent two and a half hours editing all that out, and then the next time he came on, he was good, he was like, “I’m so sorry about that.” And he was great, so listen to all the Noah Kagan episodes too, but this one’s great too.

Pat:
Anyway, Ramit Sethi from iwillteachyoutoberich.com best selling New York Times, bestseller, and one of my favorite people, and I follow his email list because he just has some of the best copy in the world. I read his sales pages. I study them. He is amazing, Ramit Sethi, here he is.

Pat:
Ramit, welcome back to the Smart Passive Income Podcast, thank you so much for coming again.

Ramit Sethi:
Thanks for having me, I always have a blast with you.

Pat:
The last time we chatted, we were literally walking through the streets of New York in 20-degree weather, I was shivering, freezing my butt off and we were talking about pricing, which was really fun, that was a memory.

Ramit:
Yeah, I still remember your shivering hands. I was looking at your coat and wondering did you bring the right coat for New York winter? And then I remembered you’re from California, which I also am, and it reminded me of when I moved to New York and my friends also said, “Where’s your coat?” So, I’m glad that we’re back to warmer weather.

Pat:
Yes, agreed, and we’re in kind of weird times right now where a lot of people are having to make important, sometimes very tough business decisions, and I just want to dive into something that I know about your business that has happened recently. Not necessarily related to corona, but just in terms of change in general, you have recently sunset a couple things to open up new doors for something else, can you go into a little bit about the psychology of that? Because I think a lot of us who are listening have tried things, maybe they worked maybe they didn’t, but we have to make change. What got us here won’t get us there, let’s get into your head a little bit about what changed, and also what are these new things and what was closed?

Ramit:
Well, the bottom line is, we sunsetted two of our most successful products, Earn 1K and Zero to Launch, these were generating millions of dollars every year, and we decided that it was time for something new. There were a few reasons for this because it can sound kind of crazy, why would you just turn off a product that’s effectively generating “free revenue”-

Pat:
They were still valuable, right? They were still working?

Ramit:
Yes, we continued to get people joining, we have effectively automated most of it, so the costs were low and most importantly, they continued to produce new entrepreneurs. People would join these programs and a few months later, many people would start a business, begin generating new income, and it was transforming lives over the last eight-plus years that they’d been around. But, we know a couple of things: number one, we know that markets change. Number two, we know that we have gotten better ideas about starting businesses. We have run many, many tests and strategies in our business, and then because we’ve created so many entrepreneurs, they share a lot of information with us. So they tell us, I’ll give you a perfect example, a lot of people don’t want to have to guest post for nine or 12 months to begin trickling in traffic.

Ramit:
They just don’t want to do it, and no matter how much I would tell them, “Hey, it’s valuable to build the skill of writing, and you want links.” And all this stuff, they’re just like, “I don’t care.” And I remember one of my students, Talia, she used Zero to Launch, and when she got to the part about writing guest posts she just said, “Nope, I’m not going to do that.” And she instead, adapted the program for Instagram. And she created an Instagram account called workweeklunch, where she shows people how to pack their food and do meal prep. She’s generating substantial revenue from that account. She decided to totally adapt it and she didn’t follow some of the specific advice, and then she adapted the rest of it.

Ramit:
So we’ve been hearing lots of things from our students. We ultimately decided we wanted to create something new, we wanted to put all of our newest insights in, and then we were faced with a really tough decision, “Should we add another course—and what do we do with the old courses? What do we do with these programs because it’s confusing to have two, three, four, five different programs all teaching people how to start business. So, with Earnable, which is the name of the new program, we decided one we saw develop, we decided: “This program is too good and we are going to just sunset the old ones.” Now, here’s what happened internally, we had several people looking—and their job is to monitor revenue and conversions rates, et cetera—and they basically came and said, “These are two of our top-performing programs, if we cut these and Earnable doesn’t perform, we’re in big trouble.”

Ramit:
So as a leader, or as a parent, or at any point in our lives, we are often faced with the decision of, “What do we do going forward? Do we close the door behind us; do we try to keep it open?” And anyone who’s thought about moving, or anyone who’s been in a bad relationship … Actually, I should compare Earn 1K and ZTL to a bad relationship, they were great relationships, but all of us know that there are times where, it’s time for something new, and something better and bigger and newer. So, I made the decision as CEO, “Nope, we’re going to go for it and we’re just going to go for it because we believe that much in Earnable.” We did it, Earnable has out-performed our expectations, tons of people are starting businesses, and they don’t have to wait eight, 12, 14 months for customer research.

Ramit:
We pioneered some new ways of them finding clients much quicker, often within days and that is getting people amazing results in Earnable.

Pat:
Love it. I’d love to unpack that in a moment here, but I do want to ask you a followup question related to the idea of new opportunity versus new distraction. This is very similar to what people say when it comes to bright-light syndrome, squirrel syndrome, “Oh, this new opportunity.” And oftentimes it’s masked as a form of procrastination or just being scared of something that they said “yes” to that maybe they’re at a tough point now and they hit a brick wall, “Oh, I guess that’s not for me, let’s move onto something else.” How do you know when to pivot versus keep going?

Ramit:
You don’t know, but there are lots of clues. There are lots of clues. Clues include: are you actually doing the thing that’s going to generate specific results for you? I see this a lot with Earnable students and previously Zero to Launch students, one of the things that you have to do in business is you have to ask for the sale. People are so uncomfortable with this that they will do effectively anything to avoid it, and I can share so many examples, I’ve heard call recordings where people, they’re doing a sales call, they talk about the challenges, they get to the point where they talk about their product and the person’s very interested. I’m listening to these recordings, and then finally, the person who’s trying to sell says, “Okay, well, I’ll follow up with some information, have a good day.”

Ramit:
They don’t say, “Now it’s time for you to give me your credit card because this is going to change your life.” And one of the things that we’ve learned is that people need to actually hear what it sounds like to go head-on into your fears. So for example, in Earnable, we decided, “You know what? We’re going to include actual sales calls that I made.” And you can hear what’s a good sales call, you can also hear me make a horrible sales call, but very rarely do people get access to that. So, when it comes to a distraction or a pivot, there are a couple things to think about: number one, look at the clue of your own behavior, are you avoiding what really needs to be done, in this case, asking for the sale? Or have you done that and you want to maybe pivot to a different channel or the way you’re asking isn’t working, you’ve tried it te Different ways.

Ramit:
You’ve really tried it, you’ve written down all the different tests you’ve run and it hasn’t worked, okay, maybe it’s time to move on. But if you’re simply avoiding it, that’s probably a clue that you’re just engaging in avoidance. And one last framework I would suggest is, it’s almost like buying clothes for your closet. Some people set a rule, “If I’m going to buy one thing, I’m going to get rid of one.” Some set a rule, “If I’m going to buy a new shirt, I’m going to get rid of two.” We do want to remember that adding new strategies and tactics has a cost. So this is really common for your audience as well as mine: they hear people telling them, “You need to have a podcast, Pinterest, Instagram, YouTube, everything.” And it sounds really enticing until four months from now, you wake up and your calendar’s full of all these random to-dos and none of them are actually generating customers.

Ramit:
That’s when you need to start fresh and be really honest and ask, “What is getting me results? And if it’s not, I’m going to close the door on it for now.”

Pat:
That’s awesome, thank you, and it’s obvious with Earnable, you’ve made the right decision with that with a lot of data behind it, and I know you and I have followed you for a long time, you wouldn’t have made this decision if it wasn’t the right move for you, or at least you had a lot of data behind it. You had mentioned something interesting about the psychology of asking for a sale. Before I unpack a little bit of some of the success stories that you have found under you and what you have done to help people to earn clients faster, what’s going on in our heads when we start asking ourselves, “Well, how am I going to ask for this sale?” Or we start maybe getting a little bit too soft and people worry about getting too aggressive, what is going on there? How do we begin to understand how to best prepare ourselves for the ask?

Pat:
Because you’re right, if you don’t ask, you can’t expect a person to just go take an action without you actually guiding them there, but what’s going on there psychologically?

Ramit:
Well, let’s start with just the bare mechanics of it. I did a sales call, which I recorded, and as I put it in Earnable, I went through the beginning, I built rapport, and we were really connecting, and as I started to hear more about his challenges, I would share some examples or stories from my life and some of my students lives. Then at the end, I talked about a product and as I was saying this, I realized, “I don’t actually know how to take his order. I haven’t done a sales call in a while.” So I had not actually thought ahead to the mechanics of collecting his credit card information. So on this sales-call recording, which you will hear, I do exactly what you should do, I go, “Okay, well, my team’s going to follow up.” And he’s like, “Sounds great, I’m in, I can’t wait to sign up.” After the call, my team followed up, guess what happened?

Pat:
He backed out, wasn’t interested anymore.

Ramit:
Yeah, he did not follow through, and this is really common. If someone is interested, the time to capture their attention is right then. So what a lot of people listening right now, they’re thinking one of two things, one is, “Well, that can’t be right, because if they were really interested, then they would have signed up a day later, two days later, three days later.” That may be true, but if you do enough sales interactions, you will realize that great salespeople know if they’re interested, you’re doing them a favor by making sure they sign up right now. That’s psychology number one: you are doing them a favor because the minute they hang up, life gets in the way. Something comes up, they’re going to say, “You know what? I’m going to set a Gmail reminder to do it two days from now.”

Ramit:
Then they forget, and then six months from now they still haven’t started a business even though they claim they want to. So it’s your obligation if you have a product or service that can serve them and you’ve qualified them, then it’s your obligation to get them to take action right then. In my case, I just didn’t even think of the mechanics, that’s kind of step one, that’s kind of for novices, but then the next step, which is much more common is fear. People worry about a number of things, they worry that the person’s going to say no, so they would rather defer and delegate the decision so they don’t have to hear a rejection in their face. Some people worry about being rude or I heard one of my students say, “I’m worried about being thought of as a (beep).”

Ramit:
I hate to use that term, and more, I hate the concept that we are thought to be negative or abrasive if we’re asking for a sale. That’s not true at all if you are doing it respectfully, if you’ve qualified your prospect and you have something that can help then, again, it is your obligation. Ultimately, some people just don’t know how, they don’t know what to say. So when I listen to some of the recordings, they will beat around the bush, and they will basically talk about anything except for saying, “Are you ready to sign up for this right now?” So those are some of the psychological underpinnings of why people don’t come out directly and crisply ask for the sale.

Ramit:
The good news is that all of this can be corrected; it can be corrected very quickly. If you engage in sales whether it’s through email or sales calls, or whatever your format is, Instagram DMs, you should go and take an honest look at the calls that you’ve done in the last one month, and if you’re not already tracking these, you should track them in a simple spreadsheet, “How long was my call? What were the key things we talked about? Did I ask for the sale and what was the conversion rate?” Very simple data. If you go back, and particularly if you happen to have recordings or you look at your DMs, you will see that oftentimes, you are not clear enough in telling people, “I believe you should sign up, here’s why it’s going to help you, now it’s time to make a decision.” That’s it, it’s as simple as that, but oftentimes, we will do anything but crisply ask for the sale.

Pat:
Going a little bit deeper, and I know you love talking about money and how people think about money, I’d love to ask a followup question: how much does a person’s history with money matter when it comes to asking other to pay for something?

Ramit:
Huge. Because if you were raised to think that salespeople are slimy, then there’s no possible way that you can effectively ask for a sale. Why? Because now you’ve become the slimy salesperson. So we need to reorient ourselves. Let’s start by acknowledging we pay for things that we value, and whether it is you paying for an educational game for your kids, whether it’s paying for someone to change your oil in your car or a restaurant so you can taste something that you normally can’t cook yourself or just don’t want to clean the dishes. We happily pay for things that we value, so now we need to translate that on the other side of the table when we are actually selling something.

Ramit:
If I’m selling a program like Earnable, I’m not going to be shy about it, this program’s going to help you start a business, it’s also going to help you grow it. Yes, you should join if you fit our criteria that we talk about at iwt.com/earn. So, you make the decision, but I believe it’s probably in your best interest. See how I did that? That is about being confident because I know I have a great product, I know that I’m qualifying people, and if they pass those qualifications, of course, I’m going to sell. It’s my obligation, just like it is for other people too.

Pat:
If you’re coming out with a product for the first time, and you’re not quite sure if it’s going to help people, that I know can be a factor in getting in the way in coming up with sales too. So, how does one gain that confidence? And you’re absolutely right if you are not confident in what you are selling, how in the world can a person on the other end receiving that message be confident in that too? But if somebody’s literally on their very first business, and I know you help a lot of people in your course with this, how do you help them through making those first sales, getting their first clients, having those first discussions, when they’ve never done it before and they might be doubting whether or not they are actually qualified?

Ramit:
Well, everyone starts for the first time, there’s no shame in starting for the first time, let’s get a couple mechanics out of the way. If you’re starting for the first time you’re probably not going to have any testimonials on your page. That’s fine. I’ve launched programs that had zero testimonials on them because they were launched for the first time, no big deal. But the answer to this question actually lays much further back than your launch campaign. If you are waiting to convert people during your launch, you’ve already lost, because the decision on whether someone’s going to join is made days, weeks, even months prior—depending on their interaction with you. Do they sign up for your emails, and do they get value? Do they like what you post on social media? Are you someone that they connect with beyond just giving them information, do they connect with you?

Ramit:
There are plenty of people who give great information, but they’re not very likable, so you’re probably not going to buy from them. If you’ve done all of that, you’re already halfway there. Now, in a launch, you should remember that your job is not only to convince them that this works for other people. It’s to convince them that it will help them, the reader, singular. So the way that you do that is, you correctly diagnose their challenges, and you can do this because you’ve done your customer research, you’ve spoken to 20 or 50 other people like them, in fact, you even know the words that they are probably using, all this we teach in Earnable. You are putting that into some sort of campaign, whether it’s on Instagram, or YouTube, or your email list, and by the time they get to that sales page, they’re reading things, they’re reading copy that they may have never even said out loud, but they have been thinking it for years.

Ramit:
I remember reading about a program to help people with frizzy hair. And the example there was that if somebody has frizzy hair or however they define their hair, they’ve thought about it every day of their life. If someone has back pain, they’ve thought about that every day of their life. If someone’s been thinking about how to start a business, they’ve thought about that every day, or certainly, every week of their life. So, in that equation, how it helps other people is important but it’s not the primary thing, it’s more about can you help them?

Pat:
I’ve done some analysis on your sales pages, they’re beautifully crafted, by the way, and I love how on each of them you literally point out the conversation that’s already happening in that person’s head. I remember in one of your programs related to getting a raise at your job, you have specifically called out people on exactly what’s going through their head. For example, “Hey, you might not be great at having conversations, well, don’t worry because in this lesson and in this course we teach you the exact words you need to know and the exact questions that you’re going to be asked.” Or things like that, how might one go about collecting that information in terms of, well, what’s actually going through a person’s head leading up to the launch.

Ramit:
Okay, there’s a technical answer and then there’s just more of a normal-person answer, I’m going to give you both of them.

Pat:
Okay, cool.

Ramit:
So, the technical answer is, of course, you should be doing customer research. What do I mean by that? If you have people on social media, or your email list, or wherever, these are the very people that you are going to want to sell your program to, so you should be talking to them. You should be emailing them, asking them to reply, you should be having email conversations, or sending our surveys. We do all of the above. I have hundreds of thousands of people on my email list at iwt.com, so when you sign up to get the newsletter, you’re going to see very frequently I write to people at the bottom of the email I say, “Reply, I want to know what you have to say.” And I read every email.

Ramit:
Now, I reply to a lot, I don’t reply to everyone, because that would be impossible now, but I read every single email and that helps me stay in touch with what the conversation going on in the market is. So, the first technical answer is, you should be doing customer research. For example, if you were starting a negotiation program, you would email people, you would say, “Have you ever negotiated your salary? Yes? If so, how’d it go, what’d you say, how did you decide to do it? If not, why not, what would it feel like to have $10,000 more in your salary? Tell me everything.” Then when they reply in a survey, you can followup individually. Now, if this sounds like a lot of work, good, it should. That’s how you generate amazing results, which is how you generate an amazing business.

Ramit:
Now, one of the common mistakes I hear is people trying to automate all this, they’re like, “I use this AI bot that parses all my survey responses and it really tells me the core thing in a tag cloud.” I’m like, “Just delete that, it’s worthless.” You don’t need a way to make it easier, you need to get real answers from real people, so stop trying to automate it and stop trying to use software tools to do this for you. It should be hard, that’s number one, sorry, I’m getting mad because I hear people-

Pat:
I like when you get mad, man.

Ramit:
It drives me nuts! Stop trying to make important things in life easy. Would I go and say, “I’ve been married a couple years, I’d really like to find a tool to automate my interactions with my wife, I really think that I could squeeze our efficiencies here and optimizations”? No, it’s ridiculous, and yet people try to do that with their business, it drives me insane. Instead of trying to make it easy, try to focus on doing the right things; it should be hard, that’s number one. Now, the ordinary person answer—and this is counterintuitive—is, you need to read normal people stuff. So I have a product development team, we create these winning products, we’ve created over 25 programs and when they join, I ask them “What do you read? What do you read?”

Ramit:
And do you know what their answers are when they first join our team?

Pat:
Probably like Malcolm Gladwell-type books and all these very, very deep, very highly study-related things.

Ramit:
Exactly, exactly, so they’re like, “Well, for fun yesterday I read Crossing the Chasm.” I mean, that’s an interesting book, but I’m like, “Good, that has nothing to do with what we’re doing here.” And what they really should be reading is People Magazine. They should be reading US Weekly, Vanity Fair, Business Week. They should be reading normal magazines to know what normal people are thinking about. And it’s a wide breadth of magazines and books, these are magazines and books made for men, women, different ages. I do exercises with them: I will say, “Okay, I’m a 20-year-old philosophy major and should I buy this negotiation program? What’s going through my head?” And then the same thing, “I’m a 20-year-old cheerleader, what’s going through my head?”

Ramit:
Those are very different audiences, you need to be able to put yourself in their heads seamlessly and think about what their concerns are. Actually, this is a lot more fun than you might think, you just get to read cool magazines and cool books, and the hardest part, typically, is for people to get over their belief that these are stupid. People often think that if you read US Weekly, you’re stupid, and I find that to be extremely condescending, because millions of people read that and they read People Magazine or whatever magazine, Men’s Health is a good example. It’s not stupid. I can’t tell you this enough: the more successful you get, the more you have to fight to read diverse material so you know exactly what’s going on in different audiences.

Ramit:
This is profoundly difficult, so for anyone listening, you need to be able to answers questions as a Men’s Health reader would, or a Good Housekeeping reader would, and you need to really be able to get inside their persona. That is how you can become extremely skilled at marketing, sales, and copywriting.

Pat:
Would reading blogs and watching YouTube videos fit in that realm as well, which is often talked about as a waste of time?

Ramit:
Of course, but when you notice people reading blogs or more likely, social media, you’ll notice that you tend to cluster around certain audiences on social media. For example, if you love design, I follow a lot of architecture and design, interior-design stuff, great, that’s cool, that helps me understand what’s going on in that world. But, it’s fairly self-selective. I have manually chosen to follow all those people, and so yes, that helps, but what I’m encouraging people to do is to go read a curated magazine, periodical, book. Something that is an author’s taste, not just yours, because it’s going to force you to embrace and understand diverse ideas.

Pat:
Love it, thank you for that. Might you be able to give us an example of, and I know you’ve had several students go through this process, but take us into one of these case studies and how a person psychologically went through the idea of building a business, getting started. Some of the challenges that they perhaps had, and highlight one of the hero stories in your audience, if you don’t mind?

Ramit:
Wow, so I have a student of mine named Paula Rizzo, and Paula has a business called List Producer, listproducer.com. And her quick tagline or description is she uses lists to be more productive, successful and less stressed. I’m going to give you a couple of other examples, and then we can talk about how these all came to be. Another one is one of my students Shirag Shemmassian, and his program is called Shemmassian Academic Consulting, he’s a college admissions, he provides guidance, his URL is Shemmassian, S-H-E-M-A-S-S-I-A-N consulting.com. Of course, recently I spoke to one of our Earnable students who’s a rabbi, and this was one of the most interesting examples I’ve heard in a while. She helps Jewish parents and children prepare for their Bar mitzvah, Bat mitzvah, and a couple of other religious ceremonies, and she’s now doing it virtually using Earnable.

Ramit:
So what I love about these three examples is they are taking a skill that they have, and they’re very diverse—college admissions, using lists, and being a rabbi—and they have found a market that works online. For everyone listening, if you don’t have a business, I think the key takeaway is, we all have something inside of us that other people would pay for. That’s really hard for us to embrace if we don’t yet have a business. Another one of my Earnable students . . . Pat, you remember those wine and paint classes that people used to do?

Pat:
Yeah, yeah, date night type stuff.

Ramit:
Exactly, so on a Friday night, you go there, you paint, you have some wine, she adapted it and during coronavirus, she now does that online, on Zoom. She started it during coronavirus, which is amazing. So the key takeaway if you don’t yet have a business is, we all have something inside of us that other people would pay for. Again, examples could be: you’re a personal stylist, you just know how to keep your apartment or your house super organized, or you have a great way of entertaining or educating children. Each of those could be a six-figure business.

Pat:
How might you discover what those things are if you just feel like, “Oh, I’m nobody special. Hey, I do lists too, but why would it be any better than somebody learning that elsewhere?”

Ramit:
That’s a great question, because the list thing is a perfect example of—I’m sure a lot of people listening do lists or some other quirky productivity technique, but—how do you go from there to actually turning it into a business? I’m going to share two things. The first is an exercise that I want everyone to do right now. So pull out your phone, open up a text message to three friends, and this is an exercise directly from Earnable, I want you to write them this: “Hey, I’m listening to this podcast and I’m doing a quick exercise, will you help me out? I’d like to know what advice you come to me for. For example, what are two or three things you think I’m pretty good at? Thanks so much.” And then just wait.

Ramit:
People are so nervous to send this out because it feels kind of weird, “Oh, I don’t know, I’m asking people to tell me what I’m good at.” Then within three to five minutes, they get these responses back, they’re like, “Oh my god, you are so good at relationship advice, in fact, I met my wife because of the advice that you gave me. If I ever have friends who have relationship problems, I always send them your way.” And on, and on, and on, so that’s part one. You can start to realize there are so many things you intuitively do that you didn’t even realize you’re good at, that’s part one. Then you know what I did? I realized that it’s really hard for people to take these responses they get, like: You’re good at productivity. You’re really clean. You’re a good singer. “Okay, well, what am I supposed to do with that?”

Ramit:
So what I did was, I believe there’s a philosophy that I follow called study the winners. Too many people out there are studying people who are not successful, or they don’t have the values you want, “Oh, great, this person made a million dollars, and they’re an asshole.” Do you really want to be like that? No, you want to find somebody who is successful in the way that you want to, and they embody the values that you have. Maybe this person is great with their family, maybe this person is very honest, whatever the case may be. So I did the same thing in Earnable. I went to some of our successful six-figure students and I took their business, and then, with their permission, I broke it down and basically disassembled it.

Ramit:
So, let’s say we have a six-figure earner like Shirag, college admissions, we broke it down and reversed it all the way back to when he came up with these random ideas of what he was thinking of. Maybe Shirag said, “Well, I’m good at painting, and I’m good at forestry, and I know how to landscape my backyard, and I got into a pretty good college.” And five or ten more things, and then we traced exactly how he went from those ideas, how did he test them with the market, which is what we teach, and then how did he end up with a large business? So that is the core there, study the winners, that’s how you do it.

Pat:
I love that. When it comes to testing ideas, I think this anything key thing and I teach this myself in my book Will It Fly?? And whatnot, the validation processes, I’m so intrigued how different people validate business ideas. I would love to learn a little bit more about your process, obviously, it’s taught in Earnable, but if you could surface anything for us, at least guide us in the direction to give the audience even more ideas, that’d be super fantastic.

Ramit:
Well, I’m doing it right now, you can watch me doing it, there’s nothing better than watching someone actually doing what they talk about, so routinely, I will post surveys and questions on my social media accounts, on Twitter and Instagram @Ramit, and I’ll say, for example, “Hey, if you’ve ever used our material to land a dream job, will you answer a few questions for me?” Boom, post it, and you can actually still click through and take a look at the questions, as you go through those survey questions, you should try to ask yourself, “Why am I asking those? What does it tell me?” The questions you ask are profoundly important, here are a couple techniques you can use.

Ramit:
When people ask questions via a survey, the most common mistake they do is they ask yes or no questions or quantitative questions. They love to do this, “Which of these is more important to you, A, B, C, D, E, F.” They have 50 examples of things, I’m like, “I’m not going to fill this out, delete.” What’s going on there is that people, in America, we have this belief that quantification is better, that everything needs to be quantified and optimized. That belief seeps into building a business, so we believe that if something is quantified, it, therefore, must have higher value than, for example, some old wisdom passed to us by our grandmothers. Guess what? I’d rather have the old wisdom any day when it comes to customer research. So when we ask questions, we don’t start with yes or no, or rank A through F, we’ll ask things like this, “If you could land a dream job, what would that look like to you? Please be specific.”

Ramit:
Then we’ll ask another question, “If you could get a raise of $10,000 or more, what would it mean to you? Please tell us with any specific examples.” Guess what people will answer? In fact, let me put you on the spot, Pat, pretend you’re at a job you kind-of like, you’re getting paid okay, but I ask you that question, what would it mean to you if you could make $10,000 plus in your next job?

Pat:
It would change everything, I’d finally be able to go on that vacation I wanted to, it would provide so much relief, I wouldn’t have to live paycheck by paycheck, or stress out about money as much anymore. I could buy that gift for my wife that I wanted to, I’d have a lot more options. I can see people saying “I would just have a lot less stress as a result, I’d have a lot more of a cushion. I could finally start to invest, I might be able to start actually saving money.”

Ramit:
Great. So I heard so many emotionally salient words in that, I heard paycheck to paycheck, I heard stress, which is jumping out at me, I heard, “I could get my wife that gift.” And on, and on, and on, guess what? If I hear that from 30, 40, 50 people, that’s going into my product because I’m going to address it directly. It’s also going onto the sales page and in the funnel, and then guess what? Pat F, who is a subscriber on my email list, when he goes to the sales page three months or six months from now, and he reads a quote or words that he himself has used, but has probably never said out loud, what does Pat F think? What do you think, Pat?

Pat:
I mean, I’m in, you’ve caught me.

Ramit:
It’s like magic, but it’s not magic, it’s research. So that is what you can do to start doing customer research, of course, they should get Will It Fly??, You should learn from Pat too, Pat, I love that we have complementary but different approaches, I love that. I think that’s awesome, that strengthens your research process in your business, but that’s kind of the way we do it, we start off with a lot of qualitative surveys and questions. Then eventually, we’ve seen it all, we’ve seen effectively most answers, we’re not surprised, that’s when you will slightly shift to quantitative so that we can start to rank them. For example, I bet you that in Pat F’s answer, Pat is more motivated by stress than by getting a gift for his wife, I’d be willing to bet $1000 on that.

Ramit:
So that helps us understand which sections go higher up on a sale page, which things we should emphasize, and which things are frankly, nice to have but not that important.

Pat:
Do you get into the weeds of personalized sales pages based on clicks, actions on your website, perhaps even survey questions to display certain different things to different people, do you get that granular?

Ramit:
Sometimes. I know you’ve done some personalization, I’ve seen some case studies, actually, of your site, it’s pretty cool stuff. I think that personalization can be a great user experience. We believe that first, it’s most important to get systems that can predictably handle most types of visitors. So that’s kind of the core. We always want to start at step one, and then we want to optimize later and later. It would be the equivalent of an Olympic athlete definitely will be optimizing what time they eat, they’ll be timing their meals, they’ll be counting every gram of protein, all that stuff, supplements, et cetera, makes sense for an Olympic athlete. For most people, they just need to go work out a little bit more and kind of watch what they eat, that’s the basic thing we want to start with.

Ramit:
So, we do do some personalization, but we are very careful not to overdo it because, in our experience, you can personalize, you can get results, but there are diminishing returns. However, if you get more people to hear about your programs and your message, that is amazing, and often can dwarf the results of personalization.

Pat:
Cool, thanks for that insight. I like how you shared a little bit about how you use your social media platforms for validation, just to start the conversation a little bit, not even asking, “Hey, would you buy a course if I did this.” Right?

Ramit:
Yeah. Oh, yeah, by the way, never ask that, if I ask people right now, “Would you buy a course if I taught you how to pack a parachute?” Sixty percent of people would be like, “Yeah, Ramit, you really should build that, I’m in.” And then, let me just tell you right now, they’re never going to buy that course, ever. I have a couple of courses I really want to build, unfortunately, nobody will ever buy those either. One of them is how to iron clothes because I love to iron, nobody cares, especially in America, another one is how to eat really spicy foods, I call it 60 days to Habanera, nobody cares about that either.

Pat:
That’s a great name.

Ramit:
It’s quite disheartening for me in my life that, “Okay, I’ll make a business program, I’ll show you this, I’ll show you how to optimize.” And all this stuff, but nobody wants my habanera program.

Pat:
Well, hey, next time we get together and we can have another dinner with April and the fam together, you can teach us a little bit of your magic.

Ramit:
Well, do you want to? That’s the question.

Pat:
Dude, I love spicy food.

Ramit:
Oh, really?

Pat:
Yeah, yeah.

Ramit:
Oh my god, this is changing my life right now.

Pat:
Ramit took us out to dinner when me and April were in New York, it was just an awesome time, Ramit knows all the spots-

Ramit:
That was so fun, I really loved it.

Pat:
That was cool. I highly recommend y’all follow Ramit on his social platforms. You’ve definitely embraced Instagram very, very well and your stories and the way that you, like you said, post questions. You’ll often just ask these random questions like, “Hey, tell me your money story?” And then that’s it, and then you start sharing the crowdsourced information, which gets, I’m sure, more people to share. Which ultimately, gives you more language and analysis for your programs, but let’s keep going, so somebody validates their idea but we’re not yet at the creation of a course or a client who pays yet. How do we go from, “Okay, we validated an idea.” To, “Now we’re getting a client”?

Ramit:
So what we do is we put together a positioning document, and a positioning document, it’s a formal document that we use internally here at IWT, and it basically asks, “Okay, what’s the big idea? What are the key challenges that our prospect faces? What does success look like? Why do they want this? Have they tried other alternatives? Why or why not?” Et cetera, et cetera, and we put this through a formal process, it helps us evaluate whether this is a good idea or not. I would say, we try to get it right, of course, we try to get it right, we don’t always succeed. You can fill out a positioning document and you can look at the data, and you can still make the wrong decisions, I have done that. In fact, one of our programs that has not sold as well as I wanted was one that I skipped the process on and I overrode everybody because I’m CEO, and when the product came out and it did not perform as well as I wanted, everybody was very respectful.

Ramit:
But even on Zoom, they looked at me out of the corner of their eye and I could tell, deep down they were saying, “This is why we trust the process, Ramit.” So I’ve been humbled myself, the answer is yes, trust the process. Once you’ve answered your core questions, like the ones I just gave you, then you can decide if this is a good idea or not. The hardest thing for entrepreneurs is to give up on an idea that you really believe people need, but if they don’t want it, it’s going to be impossible to sell. You’re basically going to be rowing upstream for the next three years of your life. It would be much better to go as we say, go where the fish are, go where people want your advice, et cetera. As opposed to telling them, “You really need X.” Why do you think I don’t teach personal finance to college students? Because they don’t want it.

Ramit:
Now, think about that, it’s a pretty controversial, provocative statement, “Ramit, young people really need personal finance advice, they’re in the best position, if they just get things rights early on, they’ll be millionaires, blah, blah, blah, and they’re taken advantage of, predatory banks, blah, blah, blah.” Notice that the person in that made-up scenario just said, “They really need it, and if they just blank, blank, blank.” Those are two huge red flags, people need a lot of things, but they don’t want it. And when you’re in college, you probably do not care about personal finance. I’m speaking generally here, I’m generalizing, but that’s what you do in research.

Ramit:
If we’re really honest, just ask yourself, did you buy a personal finance book when you were in college? No! So if you didn’t, why is all these new generation’s going to be any different? They’re probably not. And the second thing is, “If they just blank, blank, blank.” Well, again, if you just did X, Y, and Z, I’m sure your life would be much different, but why don’t you? So this is really hard for people, as you go through this research process, listen for the answers, but you can’t have a confirmation bias. You can’t start off by saying, “I’m going to build a program on how to iron clothes, let me go ask a few questions because Ramit told me to, then once they give me the answer, I’m going to go build the ironing program.” That’s not what we’re doing.

Ramit:
You have a thesis or a theory, “I think people would like an ironing program because it would help them create crisper creases.” And then you ask them, “Have you ever talked about this? Have you ever bought a program that would help you learn how to iron?” And if they keep saying, “No.” Or, “That would be kind of nice.” Or, “Yeah, I’m sure some other people would want it.” Then your program’s probably DOA, that’s dead on arrival, and you should probably find something else.

Pat:
So it’s almost like the scientific method, you come up with a hypothesis, and you sort of test it before you go all out and actually make this a public, bigger-scale thing. I like the analogy of testing these things out in little, tiny Petri dishes so that if it fails like, “Okay, at least it’s contained there and I can focus my energy on other things.” So that’s really great. So, I think Tim Ferriss, who’s a friend of ours, he said, “If you’re trying to validate a product, don’t ask people if they would buy it, ask people to buy it.” Do you recommend pre-selling or anything like that in terms of getting your product out there before even creating the program, just to ensure that this is something that people actually want and is worth your time and money?

Ramit:
You can do that, one of the things we talk about in Earnable is pricing as it relates to validation. So, early on, as long as you can get people to pay something, that is really, really good validation because the best validation is someone pulling out their credit card and paying you. Trust me, no one’s going to be browsing your website and then they trip and fall and spend $2000 with you, it doesn’t happen, trust me. I’ve seen a lot of customer transactions, it never happened in my life. People are extremely smart, they’re very, very judicious with their purchases. When people buy, they go through a very elaborate set of heuristics in their mind, and so you’re never going to trick anybody into buying anything.

Ramit:
Let’s be very candid about that. What we do, is we show people that when you’re starting off, the price you get doesn’t really matter. So if I were going to create a program on how to keep your house organized every day, I know that eventually, I’ve seen some of my competitors, and they’re charging $600 an hour, or they have a $1000 package, and they have a $6000 mastermind for six months, whatever, I know that that’s something that I want to do. In fact, I think if I really keep at it, I could probably actually be better than them, but when I start out, I’m perfectly comfortable charging $50 for the first 10 or 20 people who use this program. In exchange I’m going to tell them, “Hey, these are my normal prices, but this is what I’m doing right now in exchange I want to ask you to give me really good feedback, detailed feedback, and I would love it if you could record a video telling me what this changed in your day-to-day home organization.”

Ramit:
Why do I say that? Fifty bucks times ten is not going to change your life, probably, $500 minus your costs, it’s basically nothing. But you’re actually proving that people will pay something, once you know that, you know you’re onto something and then you can start to use the Earnable techniques to really turn up the value. You will have validated your table of contents because you’re in close contact with this board of advisors, you’re asking them, “Hey, do you care about this? Oh, you don’t even care about that thing? I’ll just strip that whole thing out, that took me a long time anyway, goodbye. Oh, wow, you’re really concerned about stress? Especially between the times of 2:00 to 4:00 p.m. because your kids come home? Perfect, I’ll build in a special module of anti-stress techniques once the kids come home.” Boom, your value’s going up and the price is going because you’re actually building a better product.

Ramit:
That is really the key, you’re willing to basically invest in getting feedback from these early customers so that you can build a better product, and then, therefore, charge more for it.

Pat:
I like that, I often consider validation in different levels, the ultimate form of validation is like you said, they’re paying money. I agree, there were studies done, I think Malcolm Gladwell even talked about these kinds of things, or Ogilvy or somebody, about just the idea of free versus $1 and how important that dollar is how much harder it is for a person to just even part with $1, meaning how much more validating that business idea can be. But there’s also at the front level, it’s like they’re paying attention, that’s validation number one, maybe you put up a blog post and that one seems to have more popularity. So that’s a sign, but that’s not, “Okay, this is for sure what I’m going to be focusing on.” And then the next one is, with email, I like using email lists because an email is something that not everybody just gives away.

Pat:
But then the ultimate form being money, and eventually getting, and tying this back to what we talked about in the beginning, is the ask. Again, I just want to finish up this conversation with perhaps some strategies on how we can practice asking, and closing that sale and getting there. This is the big struggle, there’s so much to this, there’s imposter syndrome popping in, there is the worry about, like you said, being too aggressive or seeming like one of those snake oil salesmen. Just one more time, what can we do to practice getting better at selling, or is it a matter of just do it, fail, get back up, do it again?

Ramit:
I don’t think it’s just a matter of that because if that were the case, you would have already done it. So for everyone listening, I understand the difficultly of “just” asking for the sale, and you know and I know that it’s not simple as just asking.

Pat:
“If only you just asked for the sale-“

Ramit:
Exactly, “You’d be a millionaire tomorrow, it’s so easy.” I think I have developed a lot of compassion for all the just items in our lives, just watch you eat, just take better care of your kids, just invest your money, and on, and on, and on. It sounds so simple, but of course, deep down there are some real psychological and systemic reasons that we don’t do that. With money, as I talk about in my book, it’s not simply that we don’t know what a compound interest chart is. Everybody knows we should be saving and investing more, but it’s really hard, it’s really complicated and if you finally get the courage to decide to do it, you’re confronted with a bewildering and often predatory set of options and you don’t even know what’s going on.

Ramit:
It’s hard, that’s why I wrote the book. With sales calls, I will tell you what worked the best and then I will tell you how you can apply this yourself. So one of the things we did in Earnable was we wanted to add new material to is, and so I added three workshops, and if people wanted to join and get more one-on-one, small group interaction, they could. Then if you’re just an Earnable student, you get recordings of these things. So one of them we did was six-figure Instagram sales. We added several hours of how we sell on Instagram, and I brought in a couple of awesome people who are doing this on Instagram. The next one we did was small lists, big businesses, for people who have small lists, and then the third one was sales.

Ramit:
So what I did here, was I asked one of my students to actually record a sales call with one of her prospects, and then we analyzed right there on the spot. So the recordings are all there in Earnable, and she also had trouble asking for the sale. And she did something that’s very common, she had great rapport with this prospect. They were really vibing, she was doing active listening, and then the minute around minute 24 of the 30-minute sales call, she transitioned to selling and guess what? She basically started reading a brochure, that’s what we call it. She just started talking at the prospect, she lost all connection with her, she didn’t refer back to anything she had said.

Ramit:
There were some really salient things that she had said, she just felt like she just had to get it all out. So, I worked with her right there live, it’s all in the video, it’s recorded in Earnable, and I asked her, “Why did you do that?” And you can see her, she’s thinking about it and she goes, “I just felt like I had to get it all out before the 30 minutes was up.” And I said, “Why did you do that?” And she would very candidly tell me. Most people have never had someone listen to their sales call and ask them just a few questions about why they did it. In that moment, she immediately realized why she was doing what she was doing, and then I asked her, “Okay, how would you handle that again?”

Ramit:
We did a little role-playing right there on video. She knew what to do, we all know what to do, but sometimes we need someone to clear the cobwebs out of the way for us to go the direction we’re already pointed. I believe that in the next week, she closed a sales call, and I asked her, “How did it go?” It was just completely different and transformative from what she had done in the past. That is the best way to do it, if you can learn from someone, if you can listen to a recording of yourself. Now, I know a lot of people say, “Hey, I hate listening to recordings of myself.” You know what my answer to that is? Get over it. If you want to grow your business, you’re going to have to do things that make you uncomfortable, and if listening to a sales call and ideally getting someone to give you a little bit of advice along the way will help you do that, trust me, it’s transformative.

Ramit:
Now, the second way you can do this, if you don’t join Earnable tomorrow, then the other way you can do this is to write down your key messages and key beats for your next sales call. What I often find is that most people, they kind of wing it or they are overly structured when they go into a sales call. My suggestion is that with a lot of practice, you can probably have roughly three to five key bullet points of what you want to accomplish on a 30-minute call. You can have basic timestamps and you can hit those beats, but also, you can allow plenty of time to connect and really listen to your prospect. If you can do that, and then you can analyze it afterwards, “Did I hit these? Did I stay on time? Did I connect with them?” This is a bit of DIY approach, but that’s going to help you get better as well.

Pat:
Man, so much gold here. Ramit, thank you so much for coming on, follow @Ramit on all the socials, and if you want to check out Earnable, iwt.com/earn?

Ramit:
That’s right.

Pat:
Cool. Ramit, thank you so much, I appreciate you, I want to thank you again, publicly, for helping me better the journey to becoming CEO of my company, as I have stepped forward from being a scrappy entrepreneur, you’ve definitely helped me out. We’ve had some personal conversations about that. I get a lot of motivation and inspiration from you, just thank you so much for what you do and being a great example of somebody who really dives into helping people through the courses and the coaching that you do. I just appreciate you for that.

Ramit:
Thank you, Pat, it’s always a pleasure, and I really appreciate the kind words.

Pat:
All right, I hope you enjoyed that episode with Ramit Sethi, one more time, that link to Earnable in case that’s something you’re interested in, I can definitely vouch for anything that he does and teaches, he’s put so much effort and time. I’ve been an affiliate for his stuff before and his brand-new course, I’m sure, is even better than everything that he’s done in the past. So, iwt.com/earn, if you want to check that out, and of course, iwillteachyoutoberich.com is where you can go find him and his homepage. He has a book of the same name, second edition just came out, hit the New York Times best-seller list, super proud of him, super inspired by him, and let me know what you think. This is a big one, this probably challenged you a little bit, some of it may have gotten you a little bit upset, but I would just question, well, why?

Pat:
Hopefully, you can discover some things. I’m not saying you have to follow all of his advice, but when it comes to your relationship with selling and money and how that affects how you promote the things that you promote, I mean, this is really, really important stuff. This is often where most of the problems lay with those who are struggling to make sales, so I hope you enjoyed it, thank you so much. If you want to check out all the links and resources mentioned in this episode, smartpassiveincome.com/session441, one more time, smartpassiveincome.com/session441. Ramit, I know you listen to these every once in a while, I appreciate you, my friend. Hope we get to hang out again, hopefully, in warmer weather than the last time we saw each other because, for those of you who don’t know, last time I was with Ramit was in New York in 20 degree weather like we were talking about in the beginning and man, I interviewed him on the streets of New York and it was terrible.

Pat:
But it was a good interview, but it was just terrible. Anyway, you can see a video of that on my YouTube channel, and we’ll hopefully, maybe embed it on the show notes page, smartpassiveincome.com/session441. Thanks so much, everybody, I appreciate you, make sure you hit subscribe if you haven’t already. Appreciate all the new reviews that have come in, love y’all, thanks so much and as always, #TeamFlynn for the win, peace out.

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