Bob Serling: 10:49
The first, the biggest one is that it’s a mystery, that it is something complicated or magical or difficult to do. It isn’t. It’s really just a little shift in mindset from instead of selling somebody something, you’re licensing it to them for a fee and a royalty. So they buy it, but they don’t own it. And that’s kind of like there’s so many things we license.
So my hobby is nature photography. I use Photoshop and Lightroom, which are two very popular programs. I can’t buy it. You used to be able to buy them and have standalone versions. Now you can’t. You license it from them for they have a photography special of $20 a month. As long as you’re paying that $20 licensing fee, you can use it infinitely. Every aspect of it. Once you cut it off, you can’t use it anymore. You do. One of the differences, though, is that you still own your photographs, but that’s really what licensing is.
And then there’s many ways to apply it. There’s two major ways you can license things to people to use as Adobe does, or you can license things to people to sell or a hybrid of both. Johann has a great example of licensing it to people to use and sell. He did a masterful job of that. And then the other thing is that, it is understanding what’s licensable. So anything you have, any specialized knowledge you have, any business systems you’ve developed for your business, any expertise you have, any marketing systems, any type of knowledge that you have and can be duplicated can be licensed to hundreds and even thousands of companies.
I’ll give you one quick example, and then I’d love to hear Johann, you know, describe what he did with White Label Suite, which is just amazing. But there’s this company in Springfield, Illinois, called Springfield ReManufacturing. And they rebuild blown up engines from heavy equipment. Very elegant industry, right? Dirty, oily engine blocks from tractors and big hauler trucks and stuff like that. They do about $14 million a year doing that. They then, it was brilliant. They looked at again what I talked about, the processes they use to run the business, their material, their materials procurement, their bookkeeping system, their accounting system, their IT, their sales system. They built out, I think, 22 spin off companies from all of their systems. All each one of those is IP. And they took those and they went to the people that work in each of those departments and said, we want to build companies around this, and you guys are going to run it and have a big piece of the profit sharing and equity. So the owners are essentially hands off. They’re just mentors. They built 22 of these. I think 16 of them succeeded.
So now they’re making $14 million a year again from rebuilding engine blocks, which is something we all aspire to do, right, is being the engine block rebuilding business. But they make 240 million additional from selling and licensing their intellectual property, which is just their business, marketing and publicity processes that they use internally. They took all of those and packaged them, and now sell or license them to other companies in dozens or hundreds of industries. So that’s really the power of what can be done with licensing. And it doesn’t cost you anything. You already have that IP. All you have to do is package it and document it in a way that it’s really usable for others, and you can go out and start licensing it immediately.
Dr. Jeremy Weisz: 15:45
I have so many questions on that, but I want to get to Johann. Your example.
Johann Nogueira: 15:52
So I feel like I’m like, wow, this is so exciting to be on the show with one of my mentors. And Bob has changed my life in so many ways. He will never, ever know. And Jeremy, I just think you’re absolutely incredible and thank you for having me on the show again.
So my example there that Bob mentioned is I’ll get to White Label Suite in a second, but I want to for people just to start off with, I want to give you foundation. So it was 2008 and I had my digital agency and I’d heard about Bob’s toll booth method. And I’m like, because I had, for those who don’t know the toll booth method, I’ll give you an example in a second. But I was meeting people all day, every day. And then there were some people who didn’t fit what I needed or the people who did fit and then they said, hey, in digital marketing, I used to build their websites back then. And so they said, hey, I have a website, what do I do now? I said, well, you need to go get some traffic. Oh, okay. What do I do after that? Well, you need to go and have your customer journeys and build your Infusionsoft and all this. We’re talking 2008, right? So I said, hey, go to my friend. And so I said to my friend, I’ve got all these leads that are coming through. We’re building 30, 40, 50 websites a month. I’m going to send you those leads. I want a 20% clip of the ticket. When I send you a lead, they’re not qualified, they’re ready to go. He’s like, yeah, sure. That would be amazing for him. He didn’t have to do lead acquisition. He was getting premade people. He knew our system. So everything was set up and ready to go. If I had to do that work, my profit margin would have been 20% anyway. So I was making 20% without having to do any of the work. And I was sitting there going, wow, thank you Bob, you’re amazing. So that’s the toll booth method where you’re just referring customers and making money.
Now, I told this to somebody else. It was a business coach. Now there’s a business coach, he only works with tradesmen, the HVAC, etc. that did $2 million plus. So he had a campaign on Facebook where he was getting in all these tradies inquiring. And then when they came in, there was a whole system where he qualified them, etc. they get on the phone and he’d say, hey, look, you don’t qualify because you don’t make. You’re not doing 2 million right now, but I want to send you resources to help you get to 2 million. And they’re like, he goes, would you like that as my gift to you? And they go, yes, I would. And in that, it’s like, okay, go get your website upgraded, go get on Google Maps, go get your Facebook ads happening, go get your videos, go get your brochures. And every one of those little steps he was making 20, 20, 20, 20, 20% to refer people to other businesses. And on that, he was making $160,000 a month passive income from the leads that he couldn’t sell. So that’s a total weird method. And so, Bob, I don’t think I’ve told you.
Bob Serling: 18:32
There’s one other thing to add to that. Not only is it passive income? But it’s at a 100% profit margin. You have no overhead. You have no delivery. You have no customer support. So that 20%, if you’re making 100,000 a month from that, and you’re making another 100,000 a month running your own business, well, your overhead to run your own business, your profit margins, probably 30%. But with those licensing fees, that’s 100% profit margin.
Johann Nogueira: 19:11
Yeah, exactly. And then the strategy number two that I learned from Bob was asset creation. So we were doing installations of marketing automation into medical facilities, dentists, etcetera, chiropractors. And then Bob had spoken about, hey, you’ve got an automation book, How Marketing Automation Works, but no one cares. But if you’ve got a book on marketing automation for dentists, marketing automation for chiropractors, now they care. So it’s, hey, use this to get the foot in the door. And so we used to use that to get, get the foot in the door and then fill up events. And then from the events, we had all the CRMs and all the other people who used to supply the chiropractors and dentists saying, hey, you’ve got a congregation of all these people, can we sponsor the events? And now they’re giving me free money to run these events. I’m like, hang on a second. So the leads are coming through, these guys are referring all the people and the seats are getting filled, and I’m getting paid to run this thing. And then I get on stage, I do my thing. And now they’re signing up to our software. I’m like, wow, this is an incredible business. So that, I don’t know whether I’ve shared those stories with you. So that was the inception of me back in 2008, 2010. That sort of, you know, that era.
Then in 2012, I built a business called Building Interactive. We went into buildings and we used to build mobile apps and building management systems for buildings. Again using Bob’s licensing technology. So I’ll give you a little bit of history to how that business came about. I was living in a building and this guy said, hey, you know, welcome to the building. You’re living in the best building in Melbourne. I’m like, great. This is fantastic. For anyone listening who knows Melbourne, that’s freshwater place right next to the Crown Casino. Big giant black building with this beautiful F on it. And it’s just it stood out back then to 2012. And then I get a piece of paper under my door. The piece of paper says, your windows will be getting cleaned. I said, okay, that’s interesting. And then at night time, another one saying the gym will be out of order for two hours. I’m like, okay, that’s interesting. A month later, I’ve got an inch of paper sitting on the table and I go to the building manager. How much is this costing me? He goes, it’s a dollar per sheet, like a dollar per sheet, 500 apartments twice a day. This is ridiculous. Why don’t we build a mobile app for the building? Back then, mobile apps were just coming out. He goes, I don’t know what that means.
So skipping forward, we built that. We licensed it to the building at $50,000 a year. Our guarantee was will save you $3 million a year. So it was a pretty easy guarantee for them. $50,000 was the licensing fee, but on the back end, we were doing between 200 to $300,000 by the toll booth method. So Bob’s toll booth method was anybody who’s moving in and out of the building, right? They were clicking to disconnect their services and connect to another service. So we were clipping the ticket over there. The banks then started coming to us. We had all the, actually, before I get to the banks, we had all the suppliers to the building, the restaurants, Uber wasn’t, Uber Eats wasn’t a big thing back then. All the restaurants, all the plumbers, all the electricians, all the carpenters would pay to be on the app. We just built the app once and now we’re just, it’s a templated system. Then we launch that to all the other buildings around. And because they all wanted their own app, right? And now each building is a database.
So now the banks came to us saying, hey, you’ve got this building. Each apartment is $1.5 million. All brand new buildings coming up here in Melbourne. Each apartment is 1.5 million. What do we need to do to have a button on your app that says, you know, refinance or remortgage easy in three steps, click here. And when they would do that, they would pay us between 3 to 5% and of a certain agreed amount. But these houses are 1.5 million. It adds up very quickly when you’ve got two, three, 5000 people in the buildings. So that was the building interactive example. I’m going to stop there because I have three more stories, but I don’t want to just hog the. I’m just excited to share all the examples that Bob has.
Bob Serling: 23:02
Let me throw in one more example, because the thing about Johann is he is an absolute brilliant implementer. And when you listen to his deals, some of them can hit you like a hurricane wind. There’s so much to them, so many moving parts. And he’s brilliant at orchestrating it. But it can also be very simple. So let me give you a dog biscuit example.
So I had a client who was making CBD infused dog biscuits. And CBD is very good for eliminating inflammation in dogs and cats, just like it is in human beings now. But the dosage is regulated, particularly in California where we live. And so he had come up with a formula that not only tasted really good that the dogs love, but the dosage was 100% accurate. And he had developed a method for measuring it and a bakery with a laboratory that could do that.
So what happened was he was part of an industry group and everybody would always complain that their inventory would have to be thrown out because the state would inspect it and say, no, no, the levels are way off, too high, too low, to this. And so they started saying to him, to this client of mine, well, don’t you run into that problem? He said, no, no, we’ve fixed that. I’ve got this method and I’ve got a baker that implements it. And they said, well, will you introduce me to the baker? And he said, sure. Yeah. He was well aware of my licensing methods to be happy to. And I’d like a 10% commission for doing that on all your orders. They agreed.
So when I talked to him, he had called me up a few months later and he said, hey, so I did this thing with the dog biscuits and I did this, this and that. Just what I just explained. And it’s working real well. Is that a licensing deal? I said, of course it is. I said, how is it financially? And he said, well, we’re making about 40,000 a month from our sales and we’re making another 60,000 from the licensing and we don’t touch it. I just introduced these people and I said, well, that’s good. And I said, that’s great. And he said, well, I thought you’d like it. And as it turns out, it was my son. And he had just kind of learned it by osmosis from having been around me. And so he made, you know, he had a really nice income stream from that. And he’s out of that industry. He’s into a tech industry now, and he’s still collecting royalties on some of those deals. And that started like nine years ago.
Dr. Jeremy Weisz: 26:16
So I’m going to let you tell your next story, but I just want to comment for a second. Both of you really have strong value propositions and positioning, right? Because like Johann, when you went to it, you’re like, listen, you could save $3 million. Like just spend 50,000. Bob, same thing with you. Like they’re throwing out batches of their product that’s costing X amount. So like, great, I’ll pay 10% because I don’t have to throw out hundreds of thousands of dollars of inventory or whatever it is. So there’s the way you both think in direct response and value proposition offer strikes me there.
Bob Serling: 26:56
Yeah. And it’s just how do you solve somebody’s problem? They’ve got they’re in a situation that’s untenable. And you can not only turn it from horrible, not just to neutral, but to a real gain and a real benefit. And it’s just easy. People say, well, wow, that removes a huge headache for me.
Dr. Jeremy Weisz: 27:22
So, Johann, you went from digital agency to. Go ahead.
Johann Nogueira: 27:27
Yeah, I was going to say so on the building side, this is another strategy that I learned from Bob, which I believe he called the syndicate. I’ve forgotten, so forgive me. I think it was the syndicate. And basically I have a product. It’s to sell to buildings. There’s only so many buildings available right in a city. So I was going and talking to all these buildings and I said, who else wants to sell to these building owners? And so I figured out there was about seven different companies that wanted to sell to these people. So I went to them and I said, hey, look, I’ve got a meeting with this guy. Can I go sell your product to them as well? They’re like, aren’t you a competitor? What do you mean, sell my product? I’m like, I’m gonna go have the meeting. You’ve been wanting this meeting for six months. I’ve got the meeting. I’m going to go in and pitch for you. And they’re like, what’s the catch? I’m like, no catch. This is we’re building a relationship. If you see how I perform and if you like it, then we will talk about, you know, the commission structures and things like that. They said, okay.
I said, all I need is your deck and army with it and I’m going to show you how our products work together in synchronicity and they’re like, okay, so we did that. And so all of a sudden I’m sending them deals. Now, these aren’t small deals. They’re pretty significant deals. And they’re like, dude, thank you so much. This is amazing. Tell us about your product. I’m like, well, this is our product. They’re like, we can sell this to our database. I’m like, oh, great. I had no idea. Just kidding. You know? And so, and then I got one guy on and then I got another guy on. So now there’s three of us. Now I’m going into a company and I’m selling three products at one time.
But in this industry, it’s easy because they all have to have these products. It doesn’t matter whether they buy it from me or the other people, they have to have a supplier. It just happened to be me. It makes it easier for the accounting and you know, they just need their point of contact. They only have to talk to one person. So now there’s three of us. So I’m selling three, two other people’s products plus mine bundled together as a package that makes sense. Then the other guys, two other guys came. They’re begging. They’re like, dude, how are you guys closing all these deals? Can we be part of this thing? So now we’re going in and selling five products as a bundle that makes complete sense that the building has to have. And we created a monopoly.
Now, I didn’t have to have any more stuff. I had 40 other people on calls all day selling my stuff to all the other companies. So I turned their sales team into my sales team. They had my sales team as their sales team. It was a symbiotic relationship. Everybody was winning, and we sort of created a little bit of a monopoly. And I believe this this was called the syndicate, right, Bob?
Bob Serling: 29:54
Yeah, I actually used to call it a repeating circuit and but a syndicate, the same thing. It’s just it’s a group where everybody symbiotically helps sell each other’s stuff. And you know, there are even, there’s a simplified version. There was this guy, he was a musician and he sold sheet music. And so he made deals with companies that sold instruments, others that sold you know, video recording for musicians and 5 or 6 different things. He had six people in his syndicate or what I call a repeating circuit.
And once a month they would all pitch one of the companies products or services to their list. And then it would rotate through to all six people. Then it would repeat again, and it kept going. And they did it for years. So what happened was that everybody got a royalty or a commission from everyone else’s products when they sold them. And then when they sold theirs, they got access to a lot more customers than they ever would on their own. And they didn’t have to pay a penny. They didn’t have any ad spend or anything else to do it. And they ran that for years and years.
Johann Nogueira: 31:23
Man, I feel like. I’m sorry you go ahead.
Bob Serling: 31:25
But there was one guy and I can’t use his name because it’s his entire business. And he just sets up these. So he’s a middle, he’s a toll gate to the toll gate. Kind of like what Johann does. He sets up these syndicates or repeating circuits for other companies. And he just, he’s like an administrator. He sets them up. He makes sure they run smoothly. He gets a piece of each one. He’s got 52 of them running, and he gets 52 commission checks every month. And I know that they’re in kind of the mid five figures. And I would estimate that he’s putting in no more than six hours a month to run the whole thing.
Johann Nogueira: 32:21
So man, I’m going to subscribe to your thing, Bob. Like, I just want a peaceful, easy life. I know my stories are so, they sound so complicated and yours are so simple. I’m like, this is amazing. All right, I’m gonna move to the next story that I have here.
By the way, guys, before we jumped on this call, it literally took me 30s to write down these, oh, here’s all these stories from Bob that I can tell. So the next story I want to tell is Bob, I’ve forgotten what this one’s called, but basically, so I had a company called EarthLink. What we did was we used to do digital advertising for companies. And so these companies have existed for decades, and they would give me access to their infrastructure and all their people and all their teams. They’ve spent all the money to build it. I’m essentially borrowing it for a very short amount of time and leveraging all of their assets to make them a lot of money. And in return, I’d get a little clip of the ticket.
So this company, It’s a property company. And they’re in the billions of dollars in transactions. And so I realized that their marketing absolutely sucked. And I said, hey, you’ve got, you know, you’re spending all this money on advertising. Have you ever done a reactivation campaign? They’re like, I don’t know what that is. I’m like, cool, I’m going to do this for free. You pay me on results, right? So we ran a reactivation campaign to all of their database and they were paying. I’ve forgotten the number, but it was a couple of thousand dollars per reactivated client who would then go and buy a property from them. But when you’ve got a database of 60,000 people in every activation you’re getting paid, it’s a pretty good deal. And what did it take? It took four emails. So they built the infrastructure, they built the company, they built the credibility, they built everything. I came in, I rent and didn’t even rent their system. I borrowed their system through trust and through experience and everything else. And then they allowed me to send out four emails. They had to go through their lawyers and all those verification systems, etc. and then they launched it and then they had results.
Now, I did the same thing with the manufacturing company over here. They said, hey, we need to. Yeah, I was talking to the owner. He’s like, I need to go get a $2 million loan. I’m like, why? He’s like, I need to do all these things. And I’m like, but you’ve been in business for like 25 years. He’s like, yeah. I’m like, well, all these people have bought from you. Why don’t we just send them an email and get them to buy? And he’s like, what do you mean? I’m like, what’s your average price that people buy? He’s like $50,000. I’m like, okay, well, why don’t we email your database and say, hey, you’re going to buy from me anyway. If you buy from me now, I’m going to give you 10% off or whatever the number was. And he’s like, okay, but all right, this to him, it was a foreign concept. Now, Bob, you know, we come from direct mail from the J. Abraham, Dan Kennedy, Bill Glazer, all that school of thought, right?
So anyway, so we sent this email out. The first email yields $800,000 in orders. It’s not that many orders when you’re getting 50,000 orders. But still he was going to go and try and he’s like breaking his mind. How am I going to get a $2 million loan? I’m like, you already have it in your database right here. That was the first email that went out. So that’s that story. I’m going to let you say something, Bob, because I can tell you’re excited.
Bob Serling: 35:26
So that reactivation campaign, I’ve been using that same campaign for close to 30 years with clients. It doesn’t change and it never stops working because what people don’t understand is they’ve invested a tremendous amount of time, effort and money in building their list. But if you look at your list for almost any company, between 3 to 7% of that, and on average 5% are paying customers. The other people inquired they were interested, but they didn’t buy for one reason or another. But a few months later, they’re now ready to buy. And if you don’t reach out to them, You’ve paid all this money to educate them on what you have, and they’ll end up buying it from someone else. You can run a reactivation campaign.
I recommend that people do the exact same campaign. Not one word changed once every quarter. Some of my clients do it. I had a cosmetic orthodontist who ran his every month for eight years and built the business so large that he took an early retirement just from that, because now he wasn’t converting 5% of his prospects every year, he was converting closer to 20%. And that just ballooned his profits. And it was amazing. He was a cosmetic orthodontist, like teeth whitening and all these different processes. So he didn’t do drilling and filling and all that. And for most of it, dental technicians could do the work. So he wasn’t even doing the work, which allowed him to grow like crazy too.
So yeah, reactivation is a form where you can do it yourself and be your own toll gate, but you can do it as a consultant. You could just go out to companies and do nothing but that. And I have clients in the ad agency sector who I’ve taught to do that and they do primarily reactivation then maybe 1 or 2 other little things. And it’s, it’s like shooting fish in the barrel that those are the easiest sales. They’re waiting for you and it costs you nothing to market to your own list.
Johann Nogueira: 38:13
Now I’ve got one to add. And this is for Jeremy. So in the same company, this is where we’re doing advertising. My friend calls me up and he says, hey man, I see that, you know, we’ve been friends since we were ten years old, right? He’s like, I see on Facebook, you’re running, you’ve got a digital agency, I’ve got a financial service company. Can you come and do some ads for me? I said, sure, I’ll let’s catch up. We haven’t talked in a long time. So catch up with this guy. And he goes, dude, run the ads for me. I want more leads. I’m like, okay, first thing I need to do is audit your company. And he goes, audit my company? He goes, I don’t want you to audit my. I go, I don’t need to know your financials. I just need to know all the technology and all the assets that we have.
When we do the audit of the company, he’s got a database of 12000 people that he has paid for over here in financial companies. They buy books from the bank, so it’ll be a book of insurances, etc. Now, each of these 12,000 people that he had paid for, he had not talked to in three years. Each one in there was worth between $5000 to $25,000. I’m like, you want me to run ads? But you’ve got a goal sitting here. He’s like, what do you mean? I said, well, give me a thousand of these people. He’s like, what are you going to do? I said, I’m going to do a direct mail campaign. He’s like direct mail campaign. I’m like, yeah, we’re going to send them physical stuff. He’s like, that’s ridiculous. Isn’t that from the 70s? I’m like, yeah, it works. So. Excuse me, it’s hay fever season over here in Australia. Spring is coming. So there’s going to be two more sneezes. We can cut that out.
Dr. Jeremy Weisz: 39:48
They come in threes. It’s okay.
Bob Serling: 39:49
Wait, are you allergic to licensing? Is that what’s going on here?
Johann Nogueira: 39:54
No, I’m allergic to my dog running in the house with all the hair hay on it. Anyway, so 12,000 people on this database, they’re worth $5000 to $25,000. I’m like, let’s do the reactivation campaign. Direct mail. He’s like, oh my God, this 1970s tactic. I said, yes, it works. So this is the campaign that we did. And Jeremy, I’m sure you will love this. We did. So over here in Australia, we have yellow envelopes over there in America you have Fedex, right? So same thing. So we send out these yellow envelopes with a confidential stamped across it, their name written on it, and inside they could feel like there was something chunky in there.
And what we did was we bought these little dinosaurs from the, the equivalent of Walmart. There was 100 of them for $3. Right. So these things are very, very cheap. So a Post-it note saying, hey, your policy has gone the way of the dinosaurs. They open it up. They can feel like there’s something in there, they open it up. They’re like, ha ha ha, take the dinosaur, stick it on their desk. We don’t care. We just want their attention. A week later and there’s a call to action. And whoever went there, we’d remove them from the list. A little bit of technical stuff, but not really that much. A week later they get another one and it’s magnifying glass, and the magnifying glass says, read the fine print. They’re like, ha ha ha! Again, yellow envelope, confidential handwritten Post-it notes saying, you know, use the magnifying glass to read the fine print. Third week they get another one with two dice and it says, don’t gamble with your business’s future. You know. And then the fourth week is a chess piece saying we’ve made our move. Now it’s your move. And then the fifth week, it’s, dude, we don’t want your business. We just want to know that you’re alive. Please go to this website and say imalive.com. Click the button.
So then, but now the sales guys will call up and say, hey, did you get the dinosaur? Did you get the dice? Did you get the magnifying glass? And so my friend calls me up. He’s like, dude, can you shut down this campaign, please? I’m like, what do you mean? He goes, we’re booked up for six months. I don’t have enough stuff. Shut it down. And that campaign yielded $9 million for his company, which is documented in the ultimate sales Machine there. And yeah, pretty cool. So that was do you want to speak on that, any of you two? Because I know you both played with this.
Bob Serling: 42:00
Jeremy. You got?
Dr. Jeremy Weisz: 42:01
Go ahead. Go ahead Bob.
Bob Serling: 42:02
So what people don’t understand because we’re so oriented to online and social media, and this shiny object and that shiny object and even AI. Direct mail is one of the most effective mediums you could possibly ask for in advertising. And it’s probably three times more effective now than it was 15 years ago, because people get so little mail and I don’t do a lot of it anymore. But when I do, we go to postcards because colored envelopes and bulky mail, they’re great and they work great, but they’re expensive. If you take a postcard and print it in color and you’ve got a picture of that dinosaur or a picture of the magnifying glass or whatever. It gets people’s attention.
And the open rates. So there are studies that show that 80% of physical mail gets looked at. 80%. And in some cases with postcards, 100%. Now compare that to open rates for email, anywhere from 8% to a high of, what, 20%? So do you want that or do you want 80%? And what happens too is the other reason I really like postcards, and then that’s got to be a lead in that would take people to a call or a sales page or whatever, but they’re inexpensive. They grab people’s attention and you can get your major points across in 60 seconds. So the overall is I absolutely agree with Johann that direct mail is an underused and highly underrated method and that it can be just, it can be amazing. And you know, with the new technology, printing and mailing postcards is much less expensive. We used to send bulky mail, Fedex. But now even locally at that time, we can mail Fedex anywhere in the US for eight bucks a package. Now it’s closer to 40 bucks a package plus whatever’s in it.
Dr. Jeremy Weisz: 44:45
I love hearing all these stories because, you know, as you know, like I geek out on direct response marketing. And even when I was a chiropractor, I love hearing these stories because it gave me ideas. So anyone listening, hopefully this is giving you ideas for your industry, but I would send an envelope, over a little bit oversized envelope that had X-ray confidential and red stamped on the envelope. It’s similar to like if you think of emails, right? If the subject line sucks, first of all, it’s got to go to the right person, right? We’re talking list. Then it’s got to be a good subject line, in this case, the outside of the envelope they’re not going to like. And Bob, in your case, like if it’s a postcard, they have to look at it. But in this case, I just want them to open it.
And then it comes into the offer. Right. And so the X-ray confidential thing, they’re there. If they see it, they’re opening this thing. And the offer was really compelling. It was an actual X-ray, and you had to hold it up to the light. And it was I would send it for maybe a holiday or maybe for their birthday, and they would get a free, we had supplements in the office so they could come in for their birthday and get a free supplement, pick up whatever they want. There’s no strings attached. They don’t have to book anything. It doesn’t cost anything. It says like you could walk in, take it and walk out. Like you do not need to get anything. Okay.
So it’s as much of a no brainer offer. Now as you know, there’s a law of reciprocity people check out. So, you know, 90% of the people would come in and get it and they’d book a massage appointment or book a chiropractic appointment with it. But listen, they could come in and there were people did just great. Take it. It’s totally fine. So that campaign was so good. I mean, they’re opening it, but there’s a compelling offer inside of it. So it was fun.
Bob Serling: 46:35
Yeah. Yeah. I mean, anything that grabs people’s attention in a unique way is going to outperform the standard messaging they’re getting blasted with day in and day out.
Dr. Jeremy Weisz: 46:52
I figured, you know, I know we’re right at time. If maybe each of you could tell one more story. Bob, we can’t leave without telling the Tony Hawk story. And then Johann, if you want to talk about the White Label Suite or whatever story you had in mind, go ahead.
Bob Serling: 47:08
All right. I’ll make it as succinct as I can. So this goes back, I don’t know, maybe 18 years ago, my son was really into skateboarding. I live in San Diego. It’s the skateboarding capital of the world. And so the thing about skateboards is they’re made out of really thin plies of wood and they break really easily and they cost a lot of money. And when you, when your kids are in competitions, they go through them like crazy at $40 to $80 a board. And so I tried to come up with a way to protect the board so they wouldn’t break as easy. And it was a horrible failure. It didn’t work at all and the kids hated it. I take my prototypes to the skate park and I’d show them to the kids. And kids are, you know, they have no filter. They’d say, that thing sucks. Get the hell out of here with that. And these were nine and ten year olds. And the language was way worse than that.
So then I decided to make it into a toy instead, because there was an aspect that they liked about it. And I started thinking, well, what do young boys like? They like rude noises, they like explosions, they like fire, they like anything that’s raunchy. And this was a boys market. So I decided there were these little plastic skateboards about this big, maybe three inches across called Fingerboards, that kids would slide with their fingers and go back and forth. And it was like a $15 million a year industry. So I developed an attachment for those that grew out of what I was doing with my skateboard, and it had a little piece of flint on the end of it. And when you drag it like the kids would with their fingers, it would send out a ball of sparks. And I called it Firefoot. And we made it a real production model for real skateboards.
So then I sent an email to all my friends and neighbors and people I knew in business in San Diego. I said, does anybody know anyone who’s in the skateboard industry? Works for a big skate company. I have an idea. I want to run by them. My next door neighbor says, well, yeah, my kid goes to school with Tony Hawk’s business partner. Would you like an introduction? I said no. Well, so he made the introduction. Turned out that Tony’s partner was also a really well known skateboarder, and so we ended up partnering on it. And he had access to the toy company that made these little skateboards. And they had licenses with Tony Hawk and 6 or 8 other major skateboard brands that were on their skateboards. And so they sold really well.
So I licensed my little piece to them, and it got known as the Tony Hawk Skateboard, even though, I mean, that was the one that sold the most because he was so big a name in the industry back then. But it was all done through partnerships because Chris Miller, who was Tony’s business partner and also a pro skateboarder, I developed a relationship with him. He had a relationship with the toy company. We walked in and walked out 20 minutes later with a letter of agreement. Now here’s the thing. They spent $1 million developing the product and getting it certified and all the liability insurance, because anything that’s going to create fire, it has to be cold fire. So the kid can’t be injured and it won’t set Johann’s house on fire. And they’d spent $1 million with that and all the patents, everything that was all covered by their staff, their attorneys, their marketing, they spent $2 million advertising it primarily on kids TV. And then at that time, Sports Illustrated had a Sports Illustrated Kids and all the skateboard magazines.
Long story short, I don’t know what it was they sold. Their return was, I think they sold 11 or $12 million worth of it for a $3 million investment. I got a three cent share on each piece sold. Normally you get $0.05, but we had to cut to three because they were paying so many royalties to the talent, Tony Hawk and the other people. But there was this army of people that were factories in China and all this stuff. I didn’t have to do any of that. I spent $43 developing the prototype, partnered with another guy. We then essentially partnered with the company through a licensing agreement, collected royalties for the two and a half years it sold, which is the basic shelf life of any toy and didn’t do anything but go to Toys R Us and Walmart and take pictures of us by the toys out there on the stands. And you know, and it just sold all over the world. So that’s the Tony Hawk skateboard toy.
Dr. Jeremy Weisz: 53:03
Love it. You know, I’ll let you go. I had a quick question, Bob. From the agreement side of things is typically the other party drawing up an agreement that you basically are signing?
Bob Serling: 53:15
Yes, yes, the licensor. Well, no, it depends when you’re dealing when you’re licensing to $1 billion company, those skateboards are still made. My model isn’t. But the company that makes them, they do 5 billion a year in sales. So they’re not going to use my agreement. They’re going to use their agreement and. But agreements are all standard. There’s not much to them that’s different from one to another. And I always have a good IP attorney review the agreement. It’s 150 bucks. But when you’re licensing your own stuff with your own intellectual property, that’s your agreement. You have the agreement created. So it’s a little.
Johann Nogueira: 54:05
How do you stop? So lots of people would have this question is these guys are $1 billion company. They’re already making these skateboards. You’ve added a cool little piece of flint on there. What stops them from just taking it and doing it themselves?
Bob Serling: 54:19
Well, there’s a paper trail. Everything introduced to them was documented. Right. And they have a reputation to maintain. If they know they can make five, ten, $20 million on something and they can pay us 3% of that, why cheat us and ruin their reputation? Because they have 30 other toys in their line too. It’s not worth it to them. And the truth is, I mean, every deal is only as good as the people in it. And when you meet people from these companies, the people in charge of the licensing divisions, they’re nice people. They have the same goals. They. We do. They want a better life. They want a good life for their kids. They want some vacation time, secure retirement. They’re no different than anyone else. But. And you do have a contract, but there’s nothing in it for them to steal it. It would if they stole it and got caught. First of all, they’d have to. If you get caught, there’s what’s called treble damages in the United States. They have to pay you three times what they made. But it’s worse reputationally to them. It ruins their entire business. So to steal a couple hundred thousand dollars in royalties, to lose millions, tens, millions, hundreds, millions, maybe in business just isn’t. The risk isn’t worth it.
Johann Nogueira: 55:56
Man, this has been a masterclass, even for me. I’m sitting here going, I have done things so complicated and Bob just makes it so simple.
Bob Serling: 56:05
Well, I look at it and go, I’m not smart enough to do it the way Johann does. No, really. You are the master of leveraging every little piece of the deal and synchronizing them to work together. And quite honestly, I’m joking, but I don’t have that skill set. I couldn’t do it. I might be able to do it with a partner if I had a Johann. But I can’t do that on my own. It’s not my skill set.
Johann Nogueira: 56:39
Done. Sounds like a new partnership has just brewed. All right. I’ll quickly finish off with these. I know you said one story. I’m going to link them both. So met this gentleman and met on a podcast actually. And so this is 2021. And he said he said hey, you need you know, we need to be in business together. And I said, okay, cool. Let’s talk. And then I ended up being in his city. At this point in time, we were in lockdown over here, went, flew over to the Gold Coast and said, hey, I can meet you at six in the morning for breakfast if you like. So we catch up and he shows me this software that he had built, and it was the most incredible software that I’ve ever seen. And so from there I said, this cannot work. And he shows me how it works. I said, this is what you need to do. And I draw it out on a napkin and said, go do this.
And he goes and does it, and he comes back to me. Two weeks later, he goes, dude, I did what you said. He did a reactivation campaign. He re bundled it and created a different offer. He made $200,000 and he goes, can you just do this with me? I’m like, I already told you what to do. Like there’s no more I can add to it. He’s like, nah, let’s do it together. I’m like, there’s no point. Again, he goes Anyway, after a little bit of he’s like, let’s do it together. I said, look, I’ll work with you until December. You can kick me out of the company at any time. That was five years ago. So we built the company. We had 2500 agencies who were using the software. We sold the company in March and we’re the best of friends. So that was the White Label Suite company.
Bob Serling: 58:05
I’ve got to interject one thing, because Johann is so modest. Not only did they have 2200 agencies using it, but they licensed the rights to those agencies to sell it to their own clients, not just use it for themselves. These are all ad agencies with all these clients. So I may have the numbers wrong, but it was something like the Johann and his partner Walt were making, I don’t know, maybe a million and a half, 2 million a year in sales and another 9 million a year in licensing fees where the agencies were doing all the work for that. So it was absolutely brilliant.
Johann Nogueira: 58:49
Thanks, man. And now my new company. Bob, I really want to talk to you about this is, so Ai Tech Advisory. New company. It’s three months old for all you know, for. Yep. What happened there? Oh, there we go. Cool. So this is the new company. And we were going in and doing things the old fashioned way where we had to work across all these different departments and we were doing it management consulting style, going in, interviewing all the people, etc. I said, this is not scalable, so we need to scale this company. So we built a product called Prism. Prism in one hour I can find exactly where in the company all the AI needs to be put in place to save them. On average, the companies that we’re working with are about $20 million. On average, we’ll save them between 3 to $5 million.
And so if you just go forward slash prism, that’s where all that information lives. And Bob, I want to get your eyes on this. I want to talk to you about this after our call here, because this technology is absolutely incredible. And what we do in one hour is at a minimum, we’re finding them $50,000 where we can implement AI, but on average, it’s between 3 to $5 million. So yeah, there we go. That’s what Prism is.
And now I’m getting calls from people in the mining industry saying, hey, can we launch this into the mining industry? I had a guy yesterday saying, hey, can we launch this into the ERP industry? So we’ll be licensing this technology. I’ve had about 12 requests to white label this over the last couple of days. So that’s another consideration. There you go my friends. That’s the latest of what I’m working on.
Bob Serling: 1:00:23
That’s great.
Dr. Jeremy Weisz: 1:00:25
First of all, thank you both. I again, this is why I wanted both of you guys to come on. I could sit back, just listen to the great stories, take notes myself. So people can check out AITechAdvisory.com. And if you put the /prism on here, you can see what we’re looking at. If you’re watching the video, you can see it here. And then you could go to a LicensingLab.com/ipc. This is Bob is generous enough to offer this free training, which is 12 Ways to Make More Money Licensing Your IP than You Make from Your Main Business. So you can check that out here and it’s a download.
But anyways, both of you, thank you so much for sharing your knowledge and your lessons. And we’ll see everyone next time. And thanks so much.
Bob Serling: 1:01:12
Well thank you Jeremy, and thanks for orchestrating. It was great to be able to do it with the both of you together.
Dr. Jeremy Weisz: 1:01:19
Fantastic.
Johann Nogueira: 1:01:20
Thank you very much, guys.
