This week we talk with Dean Graziosi, the infomercial king about his business. He’s doing tremendous volume through infomercials, and it’s working very well. He plays the down home boy that doesn’t know a lot, but I think after reading this you’ll agree with me that he’s as smart as they come.
Full Interview Audio and Transcript
Adrian Bye: I’m here with Dean Graziosi, who runs one of the top infomercials in the United States. Dean, you have a very interesting story. Please tell us a little bit about yourself and what you do.
Dean Graziosi: I was a broke kid who found strategies and techniques to make money in real estate and automobiles. Once I was able to do that well, I figured what could be better than making money while sharing those techniques. I just went straight for TV. I wrote a script. I hired a crew, and I filmed my first infomercial on the front yard of my house.
My first infomercial, Motor Millions, was launched at the end of 1998. The infomercial shared how I made money with cars without using any of my own money. I had a very weak back end, but it was enough to just breakeven for a while until I started figuring it all out. I then shared my real estate teachings through a program called Think a Little Different. Most recently, my book Be a Real Estate Millionaire has launched on TV. It’s currently the number one real estate book in America.
Every year, I kept making better shows by spending more money, adding more testimonials, and having more elaborate graphics just to stay status quo. What I had to learn was how to go deeper with my clients by building a more bonding relationship. Now I don’t just offer them up sales, additional products, and services; I create a relationship to let them know I truly care.
Adrian Bye: How were you able to even get started? I would have thought in 1998 that it wouldn’t be possible without a back end.
Dean Graziosi: I was losing a little bit of money. At the time, I had a collision shop, used auto sales, about 30 apartments, and I was building houses. When I was losing a little bit while learning TV, I was able to fund it with all the revenue I was making from those places. I just figured if they digested and loved what I’ve sold them on TV, what about an advance product? That’s really how I got into up sales.
Adrian Bye: This is all generated by TV. You’re not doing any Internet, any direct mail or anything else?
Dean Graziosi: We’re just starting to expand on the Internet. I want to diversify while the iron is hot to have the strongest Internet campaign and a strong direct mail campaign. If one of them then becomes a little weak, I’m not fatigued over all.
Adrian Bye: Can you talk about the path of offers a customer goes through when calling to buy your $24.95 book?
Dean Graziosi: When they first call for the book, they’re offered the book and express shipping. They’re then offered a VIP up sale for the book on audio and a 30-day audio email series from me. The third thing is a downloadable version of one of my Think a Little Different more advanced kits. That’s a $99 upsell. Then, we have our continuity program, which is our Foreclosure Alert. It allows people to search foreclosures in their area for a $29 a month fee. We have a couple other small up sales, which gets us a $50 average ticket.
The next morning, they get an outbound voice broadcast from me congratulating and welcoming them to the program. A drip sequence starts that next day. For example, I give them Dean’s Fast Start. I teach them how to look at their current obstacles, opportunities, and strengths. I get them engaged in what we’re doing, and I give them a couple of exercises before the book even arrives.
Adrian Bye: What kind of difference did following up with the buyer, while they are waiting, make in terms of your refunds?
Dean Graziosi: I think on the front end, it probably dropped refunds by at least 25 percent. More than dropped refunds, it made people more receptive because of my own transparency. I prepared people for the upcoming call from a specialist about an offer for advance training and coaching. Now when we call our clients they already know we’re calling. We let them know if you can do it on your own, fantastic. But if not, here’s what we have to offer.
If they say yes, they go into our coaching program, which costs $3,000-$6,000. It’s taught by either former or current real estate investors that go through the training program at our company or at a strategic partnership company.
If they don’t buy the coaching program, the drip sequence continues to give them ongoing wisdom and knowledge on a regular basis. They receive monthly live teleseminars where I share a new technique or bring in great clients. Within 30-36 days out, we’ve started calling them back with an additional product that’s much less expensive for people who couldn’t afford the one-on-one coaching and just want to do online training.
Adrian Bye: The amount of money you have spent over nine years in testing is pretty impressive.
Dean Graziosi: Over the nine years, our media testing budget has been tens of millions of dollars if not $100 million. When you spend $400,000, $500,000, $600,000 a week on media, you have to learn really fast how to recuperate from a mistake. I can’t express enough how much testing and tweaking is important. At one time, I had about 1,500 sales a week on my Motor Millions program. I had tweaked the inbound script for six or seven months and then forgot about it for almost a year.
One day I looked at it and made one tweak. We had a $20 bump without any additional cost. We had about a $30,000 a week net income from about three sentences that I tweaked. It was an incredible lesson. Until you feel that it’s a 100 percent, don’t be afraid to test.
Adrian Bye: How do you handle the customers making their first order and your processing capability?
Dean Graziosi: We put measures in place that track everything. We dig deep on a weekly basis to see any frequently asked questions that come across the board that are going to lead the charge backs, and we try to resolve them. Our customer service department knows we need to find the problem before it turns into a charge back issue. On our products and services, excluding continuity, we have very minimal charge back issues. We have a 30-day unconditional money back guarantee. The fact of the matter is if somebody comes back at 90 days, is really upset, and we can’t make them happy, we’ll refund them.
Adrian Bye: The common online business model is free, plus shipping and handling, because people have then been put into a forced continuity program. Do you do something like that?
Dean Graziosi: I’ve steered away from forced continuity because it causes so many people to be upset. I just keep writing compelling copy to get people to say yes. If you saw my infomercial on TV and you call, you hear the first offer is the $29 a month continuity program. We convert over 50 percent of the people into that program, and we have a stick rate right now of almost five months.
As far as to converting that to an online offer, we have a couple of campaigns that are going to launch soon. One is a $1 trial for 14 days, and it goes into $199. We did a small test, and that looked really good. We have another extended download version for $35 that includes my TV kit, my book, and other things. That tested well. It also helps that we’re spending so much money on TV, so my exposure is huge. Also, the book will hit retail soon.
Adrian Bye: Does the book then act as a lead generation? Do you have things in there to encourage people to call?
Dean Graziosi:Throughout the book, our website DeanGraziosi.com is plugged to access additional products and services. When they do, we gather their information and can put them in our drip sequence. Our phone number is plugged throughout the book as well.
Adrian Bye: What’s your next step from here?
Dean Graziosi: I’ve created a bestseller online launch that’s completely different than anyone has ever done. The site is http://affiliates.deangraziosi.com/.
I’m going to pay money out of my back-end revenue if I have anybody who signs up with an affiliate. I’m also going to hold an event December 9-11 in Scottsdale, Arizona. The event is for the people who helped me with the online launch. At the event, I’m going to go as deep as I possibly can to document and share everything I’ve done over the last nine years to make infomercials work, to make the back end work, and to keep refunds low.
It will cover basically everything we’re talking about here but on a much deeper level. For example, it will cover how I do over a million a week while outsourcing almost everything I do with strategic partners. I’ll talk about how I am able to run the strategic partners like my own employees even though they’re not in my office.
Adrian Bye: Basically, it is a pre-seminar for affiliates to drive traffic to you?
Dean Graziosi: Right. Anybody who sells over 500 books gets to come to the event for free. I’m going to share a lot of wisdom, but I also want to make it fun. It’s not just going to be an event where we sit around and just learn. We’re going to learn while we go golfing, do some extreme sports, or go out to places such as nightclubs or spas if that is what the participants want to do.
Adrian Bye: You obviously have TV working for you. Clearly, at some point, you’re going to figure out Internet. You have the book then in retail. What about direct mail?
Dean Graziosi: Direct mail is something we’ve never done and never tested. It’s definitely a whole open market that I need to explore, but I just haven’t gotten there yet. We also have a radio campaign we’re working on right now. I already recorded all of the spots; we’re just getting the fulfillment ready.
Adrian Bye: Why did you decide to take real estate to TV? Why not just leverage what you’re doing and grow that bigger and bigger?
Dean Graziosi: I still buy foreclosures, but I do it all on my spare time. I have the ability to leverage my teaching. I really have the best of both worlds. I make money on real estate, and I make a great deal of money helping other people learn about real estate. For me, there couldn’t be anything better. I really love what I do.