Phillip Stutts on The 5-Step Formula to De-Risking the Deal – EP 025

 

Phillip Stutts on The 5-Step Formula to De-Risking the Deal

Today, I’m talking with Phillip Stutts. Phillip is recognized as a political and corporate marketing genius, who has over 2 decades of experience working on campaigns with billions of dollars in political ad spend, and contributed to over 1,407 election victories, including 3 U.S. Presidential victories. 

Phillip has spoken in front of 40 million+ people in his career and made more than 350 national media appearances. He’s been interviewed by renowned business, entertainment and health leaders including: Anderson Cooper, Gary Vaynerchuk, Peter Diamandis, James Altucher, and Michael Hyatt, just to name a few! 

In today’s conversation, you’ll learn how Phillip grew his political marketing agency into an eight-figure business. He also reveals the 5-step marketing formula that’s responsible for electing presidents and building billion-dollar companies. This same formula will help you uncover key market insights, and find high quality, de-risked investment deals!

Key Takeaways with Phillip Stutts

• Why Phillip left Washington, D.C. for Santa Rosa Beach, Florida in 2014 – and why so many New Yorkers, Bostonites, and San Franciscans are doing the same thing right now. 
• Why we believe that business, rather than government, is more likely to solve the majority of the world’s problems.
• How Phillip grew his political marketing agency into an eight-figure business – and why the same strategies that get presidents elected can help companies scale.
• Phillip’s five-step strategy for brand building – and why it applies perfectly to finding high quality, de-risked investments.
• Why the world of investments is so ripe for disruption. 
• How Phillip differentiated and scaled his businesses.
• The questions you should ask before you make any major investment.

Phillip Stutts Clip: How to De-Risk the Deal

Phillip Stutts Tweetable

“The more data you get, the more you eliminate your risk on the front end.'” - @phillipstutts Click To Tweet

Resources

• PhillipStutts.com
• The Undefeated Marketing System : How to Grow Your Business and Build Your Audience Using the Secret Formula That Elects Presidents
• Fire Them Now: The 7 Lies Digital Marketers Sell…And the Truth about Political Strategies that Help Businesses Win
• Phillip Stutts’ Free Data Consumer Client Data Assessment
• Contagious: Why Things Catch On
• BolaWrap

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Read the Full Transcript

 

Justin Donald: Well, hey, Philip. I’m glad we get a chance to spend some time together here today so thanks for joining. 

 

Phillip Stutts: Justin, our worlds are colliding and because we have a lot of people we know in common, we’ve joined a lot of masterminds in common, but you and I have come together to fight for what’s right with the First Amendment, and that is what I’m so grateful for what you’re doing and putting out in the world too. So, I’m excited to jump in today and we’re going to have a lot of fun. 

 

Justin Donald: Well, thanks. Yeah. I’m thrilled as well. It’s so crazy just not only how many people we have in common but just that our families are so similar. I love that you live. We were talking about this prior to jumping on here. You live in one of the hottest markets in the US. I’d love for you to share a little bit about this gem in Santa Rosa.  

 

Phillip Stutts: Yes, Santa Rosa Beach. It’s in the panhandle of Florida. I’m from Alabama so I’m allowed to say this. It’s affectionately called the Redneck Riviera. Here’s how crazy it is. My wife and I moved down here from Washington, D.C. We’re in Washington, D.C. for 17 years and then we had our daughter and we went, “Why are we living in this crime-ridden city with horrible taxes?” The city income tax was like 9.85%. Like, what are we doing? Like, we got to go to a non-tax state. So, we took a vacation to this little town, fell in love with it. No taxes in the state of Florida. We did what everybody did during the pandemic, we just did it during 2014, and we moved down here. And it’s been a nice, sleepy community with a lot of tourists. Good. All that’s great. Pandemic hits. And a month before the pandemic hits, we closed on a property to build our dream house that we’d always wanted to build. It’s on the water and I’m looking and going, “Oh, my God, this could be the dumbest thing I have ever done in my life for this pandemic coming like our economy could bust, everything.” Obviously, if you live in these places like that people want to go to, an Austin or at the beach or the state of Florida where freedom exists and taxes are great and it’s beautiful to live and you can be outdoors like these markets have exploded. 

 

Well, the lot next to the lot we’re building on right now, our real estate calls the other day and says, “Oh, you know that empty lot next to you, guys?” I said, “Yeah.” “Oh, a New York City hedge fund manager is looking at buying it.” And I’m like, “Hold on, hold on, hold on. New York City hedge fund manager? We don’t get New York City anything here like that doesn’t…” This is the Redneck Riviera like I understand why people come here and they know we’re in that between Destin and Panama City, one of seaside Florida. It’s the Caribbean. The water is literally the Caribbean color. It’s beautiful white-sand beaches. It’s gorgeous here, but people don’t know about it. And now I’ve got people getting the hell out of New York and Boston and San Francisco and they’re all moving here. We’ve had multiple friends out of D.C. moved down here. It was just crazy right now and I feel very grateful that we’re already here. 

 

Justin Donald: Yeah. Well, that’s awesome. I love that area. My wife and I have taken a vacation out that way and just loved it. We’ve got friends that vacation there every single year. We’ve got really good friends that are going to buy a place there and for years have just gone back to Santa Rosa Beach. And a lot of people even just love seaside and that whole area. 

 

Phillip Stutts: Yeah. It’s gorgeous. 

 

Justin Donald: So, it’s fantastic. And you can’t argue with no state income tax. I mean, that is a real thing. People ask all the time about, “Talk about lifestyle investing,” and, “How can you become a lifestyle investor?” Well, I’ll give you one good way. Move to a state that has no state income tax and you just increased your lifestyle income or investment income significantly.

 

Phillip Stutts: Incentives matter. And this is what I don’t get with a lot of business owners that don’t understand how important incentives are. As investors, as an investor myself, like incentives matter. If someone gives me an incentive to buy something or invest in something, I’m going to look at that a little stronger. It has to pan out. You have to do your research but I wrote this huge article. It kind of went viral a couple of years ago and it was about why we moved out of D.C. and it was like I couldn’t send my kid to public school. Private school was $55,000 a year and I’m thinking I got to do this for – and I’m talking preschool to twelfth grade and I’m like, “Hold on. There’s crime and I lived in the city like I’m living in this nice neighborhood but a block away is a crack dealer. I can’t send my kid to public school. My kid can’t ride a bike on the street. I’m paying 9.85% in income tax. I have a high property tax on high sales.” What do they – I feel you don’t want me here. They don’t want me here. And so, Florida opened their arms up and said, “The weather’s warm. The sun is bright. We don’t have taxes so come on,” and it’s been a great choice. 

 

Justin Donald: Well, it’s mind-boggling to me that you have all these state governments that are losing people because they are increasing taxes and making it harder for people to want to stay rather than what these other states are doing, where it’s like, “Hey, we don’t need to make more money from the wealthiest people. We just need to make money from more people.” So, why don’t we give good incentives, get more people here? And it’s just the opposite approach than California, New York, New Jersey. Like, I just don’t understand the rationale of anyone, these politicians, anyone that is increasing taxes at the rate that they are that’s driving people, driving the wealthiest, most affluent people out of their state borders. 

 

Phillip Stutts: People often ask me, “Why do you work in politics after 25 years?” Justin, you just laid out the exact answer I work in politics. It’s for freedom. I just believe in freedom, taxes. I’m libertarian in my political leanings and I just want the freedom to make my own decisions and put the money in my hands. I’ll give a lot of money to charity. I’ll help a lot of people but I trust in me. Typically, when the government says they’re here to help, that’s a warning sign for me. 

 

Justin Donald: Yeah. I also would agree. To me, I think it’s pretty obvious that business is going to solve most of the problems of the world. So, entrepreneurship, business owners, I mean, these are the people that are paid, incentivized, rewarded for solving problems. And moreover, a lot of what happens, a lot of the decisions that governments make happen to have a lot of unintended consequences. So, a lot of things aren’t fully thought through, in my opinion, and I think the data shows this where it’s like, “Hey, we’re going to make this decision but we didn’t even consider what was going to happen because of that decision.” And I just think that the government is probably not going to solve the majority of problems that the world has and that businesses will. 

 

Phillip Stutts: Yes. When the government in 2020 let go some of the restrictions on vaccinations and let these companies have a race knowing that they’re going to make a profit, we had a vaccination for the coronavirus in historic time. That’s innovation of business. And you can say the Trump administration deserves credit. Fine. But they just got out of the way and let these companies go compete. And so, that’s obviously the most important thing. 

 

Justin Donald: So, I’m curious, Philip, so for our listeners, a lot of people may not know you. I’d love to know kind of how you got your start and how you got to where you are today because you’ve been successful on many different levels. You’ve been successful as an author. You’ve been successful as an investor. You’ve been successful in politics. You’ve been successful in the things that you’ve touched. I have a lot of friends that just swear by you and think the world of you. One of the people, Brad Johnson, who was I think he was my second interview on my podcast. He raved about his time with you on his podcast. So, I’d love for our listeners to learn more about your history and kind of what you’ve been up to and what you’re up to today. 

 

Phillip Stutts: Well, thanks. I grew up in Alabama and all I really cared about growing up was college football but I also fell in love with politics and then worked on my first presidential campaign in 1996, fell in love with it, said, “Man, this is something I wanted to be a part of,” and really just starting my process of kind of being in the marketing game of politics. So, for the next, well, I mean, even today. So, we’re talking 25 years later. I now own a political marketing agency, and we started that, I mean, I’ve worked in politics off and on, but I created sort of an ad marketing agency in 2015. We’ve grown that to over, I mean, to eight-figure business and we did it in three years. I’m more obsessed with how we win political campaigns than I am with the politician, if that makes any sense. And so, I just found a lane kind of like you found a lane. I found a lane and I said, “You know, I think businesses could apply what we do and how we run marketing campaigns for presidents. And I wonder if they applied that, would they be successful? And so, we started that about five years ago and it was funny. I now have two separate companies. One’s corporate marketing and one’s political marketing. But at first, we didn’t and companies would come to us and they’d say, “Hey, you got a politician on your website.” And I’m like, “Oh, man, there’s just too much confusion here.” So, we separated completely on our own. Had nothing to do with the political shop. The political shop has nothing to do with us. And basically, I started applying these principles, which is sort of the impetus for the book. I had to dig deep, Justin, and try to figure out what is it that we do in political campaigns and presidential campaigns that we win these? I mean, I’m talking fight-to-the-death marketing campaigns where you either win or you lose every two years. It is literally a dogfight to win or lose. 

 

I’ve been a part of now, at the end of 2020, I’ve been a part of 1,407 political election victories. What is it about politics that makes us innovative and I believe like some of the best marketers in the world? And so, I mapped that out and it really became part of why I wrote the book. I mean, here’s the thing. We have election. We’re like the ultimate startup company if you think about it. A candidate starts without any brand or name ID. They have barely any money, but they have a great idea they want to run and affect policy and run and serve the country. Typically, candidates don’t have a lot of money. They have to raise the money. So, then they hire you and without any money, we have to put together a whole marketing campaign for them and they have to go raise money. It’s like a startup company, right? And the only difference is you raise, raise, raise, raise, raise, and then you have to spend it all before Election Day. There’s nothing else. We talk about this little joke in politics. We say sometimes you raise so much money that it’s like, “What do we spend the money on?” And people go, “I don’t know, put some signs on dogs if you got to.” It’s just the craziest marketing campaign of all time. And so, what I had to do was like map out, like, what are we doing in politics that’s so different? And when I did, I kind of laid out these five steps, which is the subtitle of the book is How to Grow Your Business and Build Your Audience Using the Secret Formula That Elects Presidents. 

 

Well, the reason it’s a secret formula that elects presidents, even in politics, even in political marketing, no one talks about the exact five-step system. They inherently just do it. They don’t talk about it. They just do it. And so, I mapped it out and I started applying it to businesses. The principles are the same. The execution is totally different in the way we market businesses. And all of a sudden, I found that when we did it, we grew every single business we worked with from a marketing standpoint. Every single one of them grew their bottom line. Everyone. We’ve done this for a few years now. And I went, “Oh, there’s something here.” And here’s the crazy thing. I don’t know if you know this. There’s an author named Jonah Berger who wrote Contagious. He’s from the Wharton School of Business. And Jonah has a stat that says we are seeing up to 10,000 ads a day per person offline and online. 

 

Justin Donald: Wow. 

 

Phillip Stutts: If you are a salesperson, if you’re an entrepreneur or if you’re a marketer, if you’re an investor and you’re trying to buy it like this is what you’re competing against. If you’re trying to market anything, you’re not marketing against people in your own industry. If you’re marketing, let’s say you’re selling shoes, you’re marketing as a bicycle company, a computer company, a water bottle company, a lighting company like 10,000 ads a day. And what is the difference? What breaks through all that clutter that produces a return on investment from your ad spend? And so, I’m sort of obsessed with that process. And that’s why I wrote the book and why my career has zigzagged a lot from politics to corporate marketing, to authorship. I wrote the first book. My first book was about how to avoid scamming marketers. And so, I wrote a book called Fire Them Now and it’s all about how you should fire a marketing agency that isn’t serving you right. And then this book is literally about what is the secret formula that elects presidents, senators, governors? What is that marketing formula? And then how do you apply it in your business to have exponential results? And it’s not a theory. It is something that we have produced and delivered. And the last thing I’ll say on is this. I wrote a book that’s basically the modern historical look at how political campaigns have been run since 2000. And so, if you’re super interested in how the marketing of political campaigns runs, this is kind of a book for you. And then I didn’t write a textbook. I wrote a book about stories. Everything in my book is a story. If you want to learn how we do it, I tell it through stories. I tell it through political stories, I tell it through corporate stories. And I can jump through all of those today and we can kind of get into that. So, that’s the impetus of my background and what kind of led me to write the book. 

 

Justin Donald: And I want our listeners, our audience to recognize that regardless of where you are in politics like this is about what’s the formula. Regardless of what side you’re on, how are these individuals elected? And how can you take these same strategies and implement them into your business for the same type of success of getting a politician elected, of growing your revenue, and really growing the bottom line? So, I think that that is just such a cool book. And also, Phillip, what I think is cool with you is you have reinvented yourself so many times over the years. You’re not compartmentalized into this one box of what you do. You keep innovating yourself and your practice and your knowledge and your network. And it is cool to see who you’ve become and all the different areas of the business world, the political world, the influencer world that you’ve been able to get your fingertips on. I think that’s really special. 

 

Phillip Stutts: Thank you. I appreciate that. And you said something really important. But regardless of what my politics are, this book has nothing to do with politics. It’s not about right versus left. It’s not about anything other than how we market politicians. In fact, I walk through from the year 2000 to the year 2020 how George Bush won the marketing campaign, I was on that particular campaign, but what we utilize, how it was a historic campaign from a marketer’s perspective, how Obama modeled what we did, and then added on another layer of social media to that. And then I walk through how Trump blew up the whole system through his marketing but utilizing these sort of secret five-step formula that we use. And then I talk about how Joe Biden won the election in 2020 utilizing the exact same five-step system. And so, the only thing that’s crazy, Justin, is that if I’m going to go up against another candidate marketing team, let’s say I’m running a candidate and I have an opposing or an opponent I’m running a campaign against, their marketing team is running the exact same five-step. We called it The Undefeated Marketing System. They run the exact same five-step undefeated marketing system to win for the candidate. So, it is an unbelievable competition using these risk-averse techniques that we use in politics to win. And it’s just a mano a mano fight to the death to win the whole thing. The crazy thing is sports teams use the exact same five-step formula to win championships. Lawyers do it to win court cases. Doctors use it to heal patients. I got DC companies use it to raise money and exit and sell businesses. I got golf pros use it to teach golf. It goes on and on. It’s ubiquitous except in the corporate marketing world, no one follows this except the way we do it but we’re the only marketing team in America that’s putting these steps in place. In fact, it’ll be a fun exercise. Can I give you how it works in sports? 

 

Justin Donald: Yeah. That sounds awesome. 

 

Phillip Stutts: Well, actually, let me take a step back. I’m going to tell you how it works in politics, how it works in business, and then we’re going to go to sports because I can’t just jump into sports without explaining it first. Okay. So, if a politician comes to me and says, “I want to run for office,” the first thing I’m going to do is say, “What do you believe in? What are your policy issues that you want to run on?” And then inevitably the testicle politician comes back and says, “I have these 20 things I want to run on,” and we go, “Okay. Nobody wants to hear about your 20 things but what we’re going to do is we’re going to go and we’re going to take a scientific poll out in the field and test what the voters care about on these exact 20 things that you listed. Nothing else. Just the 20 things you listed.” Now, I’m not talking about the CNN or the Fox News poll that says who’s winning and who’s losing. That’s what the media try, that’s their manipulation of how they look at politics. I’m trying to figure out what the voters care about. 

 

So, step one of our process is we must understand what the data says about our voters. I’d say the same thing in business for customers. And so, we do that. Ultimately, we find of the 20 issues that politicians want to talk about, the voters when we finish our data analysis and research on them, we’ve found that they care about two of those issues to such a degree, it’s going to win the election for us. That’s not 18, not 15. Two from that. So, therefore, we know if we run on these two issues that the politician already said he or she cares about, we’re going to win the election. So, then I say to the politician, “Good. Now, we have alignment. You care about these two issues. Voters care about these two issues. Guess what? That’s all we’re going to talk about going forward, just these two issues. Nothing else.” So, that’s one step, figuring out what the data says. And then on a business, it’s the same thing, find out what your customer wants, find out what they’re motivated by. I’ll tell you how we do it in a second but we must know what the customer thinks about before you go spend money on a bunch of marketing dollars, bragging about how great your business, product, or service is when the customer may not care about that product, business, or service. So, that’s what we’ve got to do first. 

 

Second step, now that you know that, you have to put a strategic plan in place. Look, it’s kind of like investing, too. If you see a company and you research a company and you’re like, “Oh, I really like that company. I want to invest in that stock, whatever,” you have to put a plan together. Do you have an exit strategy? If the stock gets to a certain level, what are you going to do? Does that company target certain markets? You’ve got to put a plan together like an investment plan together. You’ve got to put a voter plan together or you’ve got to put a marketing plan together for your clients or customers. So, there has to be and that comes in with aligning everything together, though, and I’ll go back to the political analogy where the voter and the politician all agree, you’ve got to build a plan for that. So, that’s step two for us. 

 

Step three, now that you know all these things, you’ve got to build your brand properly. For a politician, those are the two issues that are going to run the website. Nothing else. There may be some bio stuff, but it’s going to be mainly those two issues. Why? Because when we start spending money and the voters go, “Oh, he cares or she cares about that particular issue, they’re going to go to your website,” and if you don’t meet them where they are, then you’ve lost them as a vote. I believe Compuware has a stat out right now that says 88% of all consumers right now if they have one bad experience in your website will never come back again. And I’m sure you’ve probably had this when you’ve seen an ad clicked on it. It was a clunky website, you’re like, “Screw that,” you swiped out. It’s the same thing. Like, you have to meet the voters and make sure that you’re meeting them where they want to be met. So, the brand has to be built before you go spend ad dollars. 

 

The fourth step for us is now that we know those two issues, we’re going to test them a hundred different ways to figure out what pops amongst those two issues. What do I mean by that? In 2016, Donald Trump’s campaign, they would run one ad on Facebook 164 different ways. Think about that. One ad 164 different ways that have a green background, a red background. They’d have a man in the picture, a woman in the picture, or in the video. They would have different font sizes, different fonts, and different corners. They just went crazy. And ultimately, they would find eight or nine ads on these two issues that blew through the roof and they couldn’t tell you why. They just knew that they worked. And now that you know that it works, it’s the fifth step. You go launch your marketing campaign. You spend the dollars. And by the way, this probably for Lifestyle Investor audience, I’m eliminating your risk every step of the way. I’m looking at data. I’m developing a plan. I’m making sure when people find your brand that it resonates with them. I’m going to test at a low cost all the messages to figure out what works and what doesn’t. 

 

And then the fifth step is now I’m going to say, “Let’s launch a real marketing campaign.” Every one of those steps uses data and eliminates your risk. That’s why we always have success with it. It’s the same thing with a politician. You can do the complete analogy on the business side. I have a partnership and this probably is one of the reasons why we were brought together because Brad is so obsessed with this. But I have a partnership with the largest data collection and analytics and AI company in America. I’m able to overlay a customer base, a client base. I can put a Pixel on your website or I can build a look-alike audience and I literally can track their movements. We grab their IP address, we track their movements online that I know what social media platforms are on in chronological order. So, I can tell a business owner in step one what platforms they should be avoiding and which ones they should be using. And too many times they go, “I don’t know. I’m spending on ads on Facebook,” and I’m like, “Well, what happens if your customers aren’t on Facebook or aren’t buying things on Facebook? You’re like wasting dollars, right?” And so, we have spent millions of dollars getting the data right on the front end because it eliminates the marketing dollars that they’re going to spend on the back end. 

 

And so, for us, we do that. We build a strategic marketing plan around the business owner’s vision and where the customers want to buy, you know, where they want to meet that vision, what motivates them to buy a product or service? That’s what you build a plan around. Then we rebrand or build the brand of that company because based on the data and based on what we’ve put in that plan, the targeting that we’re going to do for that particular audience, then we’re going to spend a small amount of money testing all those messages or those two messages we found of that data to figure out what works best for that business. And then lastly, we’re going to launch the marketing campaign. That has literally won for every single business we’ve worked with. And then lastly, this is how it works in sports. Justin, who’s your favorite sports team? 

 

Justin Donald: Well, it’s the Chicago Bears. I say that sadly because they haven’t done a whole lot recently and they had a chance at getting a killer quarterback and weren’t able to close the deal. But Chicago Bears, better or for worse. 

 

Phillip Stutts: Great. So, this is how ubiquitous this five-step system is. Let’s say the Bears play the Detroit Lions on Sunday and the following week they’re playing the Packers. Good? The day after the game on Monday, they come back to the facility in Chicago. And what is the first thing they do? They look at game tape. They look at the game against the Lions. They look at the Packers’ last game or the Packers’ games before. They’re all trying to get what? The data. Out of what their tendencies are, what worked, what didn’t work, they’re all looking at data. Right? So, they spend the first day looking at all the data from the past games. And then the second step, what do they do? The coaches are now building a game plan, a strategic map on how they will beat the Packers the upcoming weekend. The third step, who’s the owner of the Bears right now? Do you know? 

 

Justin Donald: No. 

 

Phillip Stutts: I don’t either. All right. So, the owner of the Bears, what are they doing all week long? Well, they’re getting the jerseys clean. They’re cleaning up the stadium. There’s no beer cans or beer cups all over the stadium when you walk in every weekend. It’s clean. The jerseys, you don’t see ripped jerseys on the players every weekend. All the food vendors are lined up. The sanitation is done. Everything is done for the brand all week long. Get the brand right before the customer comes into the stadium. Fourth step, what do they do? What do the Bears do all week long? They practice. They’re testing the plays from the game plan. They’re going to test what tendencies they have. They’re going to test what the Packers’ tendencies are. And then ultimately, they’re going to figure out these plays are going to work, these plays are not going to work. They finalize. They figure out from the testing what’s going to work, what’s not going to work. And then on Sunday, what do they do? They launch the game plan. They go play. Like this happens in almost every industry and like it’s crazy that we follow this. We probably inherently just follow this kind of process in our own brains, but we just don’t enunciate it. And so, I just felt like I needed to kind of tell the world that this is how we do this. I just don’t see it in corporate marketing and I just want to disrupt the industry on it. 

 

Justin Donald: Yeah, no kidding. And I also feel like the investment industry is ripe for disruption. You take something like this where a lot of what I talk about in my book where you can de-risk the deal and you basically can figure out all the details on the front end and you can set it up to win on the back end with as many perks as you can. But you can also kind of do your marketing research to see what will fly, what type of deal terms will and won’t work. And there are just so many parallels. It’s really exciting to think about this with an investment overlay. 

 

Phillip Stutts: I bet if that is your focus, if you’re out there listening to this right now and that’s your focus, this may not be a marketing book for you, but it may be an exact blueprint of how you need to invest as well. And I even walk through it in the book on how it works for getting married like it just is utilized by all of us in so many different ways. And again, I definitely know but, I mean, the whole thing is what I’m obsessed with is eliminating risk before I get reward. Sound familiar in your industry? 

 

Justin Donald: Yeah. That’s the name of the game. How much? Yeah. How little can I spend? How little can I invest until I know that this is a great investment? So, yeah, without a doubt. 

 

Phillip Stutts: Totally. So, let me give you an example. We work with a national pest control company. They came to us a couple of years ago and they said, “We’ve just spent $1.8 million in our marketing and we’ve lost $2 million in market share and we don’t know why,” and they can’t figure it out. And I said, “Well, what are you marketing?” And they said, “Well, we’re marketing to discounts right now.” And I’m like, “Okay. Everything discounts?” “Everything discounts. Every ad says discounts. Salespeople say discounts. Everybody says discounts.” And I said, “Why are you doing discounts?” And they said, “Well, because on the backs of the Great Recession, we just came up with this idea at a brainstorm session and has worked for years and years but now it isn’t. Can’t figure out why.” So, I said, “All right. Well, let’s go look.” So, we looked at their customer list. So, through our data systems, we overlaid their entire customer list for a region of the country. Hundreds of thousands of records tracked what they did online. We tracked who they were. What we found was crazy, blew my mind. We found that their customers were mostly over 55, had discretionary income, and sought better quality over discounts. They saw discounts as cheap and unsafe. And we went and, by the way, they didn’t know this. Their customer base was 55 and older. Kids were mostly out of the household. They weren’t investing in their kids’ lives. They were investing in local charities. This national pest control company had donated millions to charities and never told their story. We also found out that because they wanted quality, they wanted green safe products. They had a green safe product they had never marketed before. We found out their customers were bundling services cable. They were older, right? They still had cable. They hadn’t cut the cord. They still have telephones. But I mean, they were bundling services. That’s how they saw discounts. They could save money if they bundled and that made them look smart. Discounts made it look cheap and not smart. So, we came to them and said, “You got a big problem.” 

 

So, they went through our five steps. We wrote this plan for them. We redid their entire website. We shot a bunch of ads, and then we went out and tested. I mean, went out and tested it which is step four and then we launched it. Here’s the thing. They had to invest those dollars early on to get it right, but they had spent 1.8 million to get it wrong without knowing. So, the end result is six months after they started working, they had the greatest month in the history of their company. Thirty-five-year-old national pest control company, greatest month in the history of their company. But here’s the deal and I want to make this really clear, what I’m doing right now has nothing to do with why people buy pest control services. People google, “I need a pest control company.” Why? Because they want the bugs dead, not because they got a family story or the bundle services or like green product. No. They got roaches. They want them dead. That’s it. So, that customer is going to go google, “I need a pest control in Atlanta, Georgia,” and they’re going to have a hundred companies pop up, but they’re only going to look at the top two or three. So, you got to get your SEO right and we knew that from the data. But once you get the SEO right, now, the customer is going to look and say, “Which one do I want to buy from? Which one connects with me more?” Is it Joe’s Pest Control where it’s like two, three-hundred-pound guy is leaning on a car and T-shirts saying, “I’m going to give you a discount,” or is it going to be the company we work with that’s talking about the green safe products? You can bundle termite and pest control service. They’ve got uniforms on. 

 

During the pandemic, we totally talked about the safety element of everything and appealed to them that way. You know, we went to them in every way possible. They donated money to charity, all the stuff. The reason that they had the best month in the history of their company, not because of me. It’s because I just listened to the customer and we built something around the customer. And I always say it’s this. Like, I’m trying to find the difference that makes a difference. The customer wants dead bugs, but after they get past that, what’s the difference that makes the difference that makes them choose you? The other one I’d give you an example of is this title company. So, this is a B2B company. When you buy property and you go to closing, typically, your real estate agent is telling you, “You’re going to meet at the title company’s offices.” You don’t choose the title company. If you’re a title company, your customer in the B2B sense is the real estate agent. So, we work with a billion-dollar title company in the state of Florida and they came to us and said, “How do we separate ourselves from our competition? We want more real estate agents referring us business.” So, we overlaid all the real estate agents in the entire state that they had and we found out this crazy, crazy thing that it’s going to blow your mind, that’s nothing to do with anything we’re talking about. We found out that 72% of the real estate agents in their target market owned dogs. 

 

Justin Donald: Oh, wow. 

 

Phillip Stutts: Okay. How would you know that, right? You just don’t know that. We found that out. Guess what we built a marketing campaign around? 

 

Justin Donald: Dogs. 

 

Phillip Stutts: Dogs. Dogs in our ads that dogs now run freely around this office and then real estate agents come in and they’re like, “I love those dogs!” Real estate agents are trying to find key differences that they want to spend their business to title companies. I’m trying to find deeper connections. I’m trying to use data not to, I mean, we are doing it for manipulation. I’m trying to do it for the right kind of manipulation, to find empathy, to find connection. I think like in a land of 10,000 ads, nobody is trying to think about how do we honestly connect with the customer or client? And I’m trying to use data in a good sense to try to find that. And again, that’s why we look at this data to try to find those key distinctions. 

 

Justin Donald: That’s awesome. And by the way, so number one, it’s all about differentiation, right? So, that’s huge and we hear about that all the time. I think even from the standpoint in investments like when I look at companies I want to invest in, that’s one of my leading questions is how do companies differentiate from their competition? Why are they going to stay in business? Why are they going to succeed? It’d be really interesting to have some of the companies I invest in utilize some of this data so that we can make sure that they’re actually marketing the right way and scaling the right way. But bottom line, differentiation matters. And I know many of you have heard this if you’ve taken business classes but, I mean, here the proof is in the pudding. But secondly, I wanted to point out you have a free tool that is like data assessment. I’d love for you to talk about that a little bit. 

 

Phillip Stutts: Yeah. So, we’ve done this. For the data we look at, we’ve helped companies and companies have utilized this kind of data like Amazon, Disney, TurboTax, Hershey’s, DaVita Dialysis Systems, Altria. So, we’ve got big, massive Fortune 200 companies that are all utilizing this data. I created a licensing agreement with them so that I could sell it and offer it at a massively reduced discount to small businesses and startups. And so, that’s how we’ve utilized that. But in the meantime, there are a lot of business owners that come to us and go, “I don’t even know what to look for and I don’t know if I want to invest in this and maybe I just want to do it on my own. Or maybe I just want to get optics on how we do it. And so, yeah, through this book and I offer it to everybody listening. This is for free. We have a free data assessment tool. We will look at your customer client base and we’ll do a one-on-one call, ask a bunch of questions, answer anything you want, and kind of tell you this is how you could do it yourself. This is how it would look like if you want to invest in something like this but it’s absolutely free. You can go to PhillipStutts.com/Insight. It will take you less than 10 seconds and it’ll set up a call with one of my team members and they’ll walk through all of how we look at data and how you can do it either on your own or through an investment site. 

 

Justin Donald: I feel like this could be massive for entrepreneurs that your main investment is your business. And how do you differentiate your business? How do you scale it effectively? How do you appeal to your target market? How do you even figure out who your target market is? You might think you know your target market, but once you have the data, realize it’s completely different than what you thought. And so, I see the power in this in so many levels. I see this very powerful for entrepreneurs. I see this very powerful for me, for the companies I invest in, and the entrepreneurs I invest in to make sure that they’re doing their homework and that they know their target market. And then, also, just from a differentiation standpoint, do they really differentiate? Do I want to invest in this company because they’ve got enough differentiation or are there other companies that do it better? Or is there too much competition where they’re not really differentiated? They might think they are. They might have a way that they sell it or plug it that really isn’t differentiated once you see the data. So, I love this. I think this is really cool, Phillip. 

 

Phillip Stutts: Yeah. And I’ll even give you one other example of how we’ve done it in the investor side. I think this would be really interesting. So, there’s a company, it’s on the Nasdaq. They’re called the BolaWrap. If you haven’t heard of the BolaWrap, it’s the coolest company you’ll ever look at in your life and what it is, it’s a device that looks like a taser and it shoots a Kevlar rope and wraps the suspects and they cannot move. But it solves a problem. It solves the problem in the sense that police can use force without hurting anybody and suspects can’t get shot or killed. And we know one person dies a day from a taser, too. So, it’s not like tasers are the alternative to guns, but it’s called the BolaWrap. Go on YouTube and look it up. Watch a video on it. It’ll blow your mind. Well, some investors, they’re called Wrap Technologies. I think Nasdaq is WRAP. I am an investor in the company and not in the company, in the stock. And I do that because usually if I have publicly-traded companies that we work with, I’ll invest in their stock just to go all-in. So, that’s the reason I do it. But they came to us and said, “We need more investors in the stock.” So, obviously, there are a lot of restrictions on that side. So, we follow the letter of the law, we had lots of lawyers look at this campaign, so just put that off to the side. But what we did was we targeted investors in the northeast United States who were pro-gun rights, but they had over $250,000 in investments. We found out that our target market was mostly males so we only targeted male. We went through all the data. We narrowed down this massive field to very narrow field, and we ran this campaign. And the case study is in the book if you want to read it but we ran a three-week campaign to get large investors into Wrap Technologies. 

 

And so, we also created this, I mean, we followed all five steps. We looked at the data. We drafted a plan. When we did the brand, the brand was only to drive people to the website. We couldn’t advocate at the website. That would have been illegal so we drove people just to the investor page. But we also developed a – part of my production team works for the Hollywood creative, video creative producers so we created this insane video about the BolaWrap shooting people. The BolaWrap has been on TV shows. It’s been on every national news network. And in the age of Black Lives Matter, it has both sides come together. So, anyway, we put this crazy video together and we targeted 118,000 investors in the northeast region of the United States with a lot of other demographic details about we knew they would be super excited about this product. Okay. By the end of the three-week campaign, we only targeted these people. Nobody else. It wasn’t like we just ran it in a bunch of random people so we only targeted at the 118,000. We had over 750,000 views, which meant that the target market was watching the ad over seven times on average. Okay. At the end of the campaign, the stock had grown 15.8% in three weeks. It had something like 64% more investors in the quarter by over 500 shares of the stock than they had in any quarter in their history and their market cap grew by $32 million and we ran a three-week campaign in the mid-five figures. 

 

It wasn’t like it was some massive campaign. But the reason this helped blow up this company was because they had a story to tell and they needed to get the story out. But we didn’t need to run that story to a bunch of people that weren’t going to invest in the stock or the company. We needed the people that would be like, “Wow. I want to invest,” just like you said, in a company that’s solving a problem and meeting the needs of their customers. And we saw from the data we would have an incredible effect if we ran it in a certain way we did. And we proved it through that. And I write about the whole story in the book as well. 

 

Justin Donald: That is fantastic. 

 

Phillip Stutts: Go look at this product before you do anything else, by the way. It’ll blow your mind. 

 

Justin Donald: I’m going to check it out. It sounds awesome. And it just sounds like so state of the art. And it’s fun hearing kind of your investment philosophy like, “Hey, I’m going to work with this company so I’m going to go all-in,” not just on the education, not just on the marketing plan, but number one, I want to show them that I’m all in by investing in their stock. But number two, if I do this right, I’m rewarded and I get the growth. And so, I’d love to know any other investment strategies or hacks or just good deals that you’ve done. I’m curious because you have a way where you’re able to monetize things or influence things that a lot of other investors don’t have. That’s really… 

 

Phillip Stutts: I mean, the tip I would give more than anything else, Justin, is making sure if you, let’s just say you’re an investor. Is that company doing the right things to connect with their customer or if it’s a SaaS company, their target market? What are they doing? I’m in a couple of VCs and the VCs I’d like to invest in are hands-on VCs where my expertise can be added into the companies we’re investing in. And so, I don’t want to just throw my money and pray it works. I want to invest the money and know that I can call the CEO of any of the investing companies and ask them specific questions on how they’re connecting. And trust me, every company I’ve invested in my VC has been, I’ve done conference calls with every single CEO, meeting with their marketing teams and trying to understand that. So, again, it’s almost like following step number one. I’m just trying to dig to find more data. The more data you get, the more you eliminate your risk on the front end. And as you know, investments are investments. If you do all the front work, then you put yourself in a better position to have a higher ROI on the back end. That’s my biggest takeaway more than anything else. And obviously, I walk through how that works in this interview, but I would just put all my eggs on the front end instead of hoping I just throw my money at something and, boom, money is just going to fall from the tree. It doesn’t work that way. It doesn’t work that way in businesses and it really doesn’t work that way in investment, unless, of course, you invest it in a thousand bitcoins ten years ago when it was at like $60. But that is such an outlier and the vast majority of people have not done that, right? 

 

Justin Donald: Yeah. And you said something that’s really important to me. I’ve talked about this for a long time. I love investing in companies where I have influence, where I know I can talk to the executives, where I know that I can have an advisory role, or even if I’m not an advisor, a formal advisor that I can still advise, I just want to know that I can invest in companies where they’re going to take the expertise that I have and put that into effect in the business because it de-risks the deal. That’s so important. I love it. And we’re getting short on time here but I know you’ve got a new podcast that you’re launching and I’m really excited about it. I’d love for you to share a little bit about that with the remaining time that we have. 

 

Phillip Stutts: Yeah. Thanks, man. Listen, I grew up in Alabama, right? And they used to tell me when I was in high school, “Hey, what you need to do if you just want a free college diploma is just drive over to Oxford, Mississippi, roll down the window, and they literally just throw diplomas in your car. Everybody can have a diploma if you go to Ole Miss. They just throw it in your car when you drive by. And I would tell you the same thing on a podcast like everybody’s got a podcast now, including me. So, I’ve got a podcast. It’s going to be called The Undefeated Marketing Podcast. And basically, we’re going to walk through each of these five steps in The Undefeated Marketing System each week. We’re going to be talking about specific things people can do. What we really wanted to do was create more content to give people resources where if they don’t want to spend money on a marketing agency, they could learn how to do these things the right way and do them for free and create the content that drives that beyond the book. So that’s it. We launched on April 6th and, yeah, it’s been a blast so far. 

 

Justin Donald: That’s awesome. Well, you’ve got a lot of stuff going on right now, and I’m excited for you. And so, number one, I love what you’re doing. I love the impact that you’re having on the world. I love the message that you give and that you’re all about. And then I just love that we’re running in the same circle with the amazing people that are really working hard to impact and shape the world in a positive way.  

 

Phillip Stutts: Well, I’m grateful for what you’re putting out in the world as well. Everything to me is about how do we serve better. And the reason that I’m drawn to what you’re putting out there right now and loved reading your book and everything was you’re serving people first and you found abundance after that, and that’s the same philosophy I work off of. So, thank you really, Justin. It means a lot to me. 

 

Justin Donald: Well, my pleasure. Where can our listeners find out about you a little bit more? 

 

Phillip Stutts: Yeah. The easiest place to go is PhillipStutts.com. I’m sure you’ll have that in the show notes and the free Data Consumer Client Data Assessment, PhillipStutts.com/Insights. And on that page, you can connect with me directly and follow all my stuff and it’s the best place to go. 

 

Justin Donald: Awesome. Well, thanks so much for your time, Phillip. This has been really fun and for me, just really educational. There’s just so much thought-provoking ideas and concepts here that I really want to intertwine into the way that I invest. So, thank you for that. Super cool. And to our audience, to our listeners, to those of you watching this, I just want to challenge you again. It’s the way I wrap up every show. But my challenge, my ask is that you take some form of action today, that you take one step towards the life that you desire to live, the life towards financial freedom, and the life towards something that is compelling and is by design, not by default. So, take action today, move in the direction of financial freedom, and I look forward to talking with you again next week. 

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