The Direct Response Marketing Lie – Episode 1

Download the full transcript in PDF form here:

Welcome to Episode 001 of Marketing Podcast Weekly, where your hosts Rob Booker and Jason Pyles discuss marketing in the financial industry. In this debut show, we talk about the difference between direct-response marketing and brand marketing. Join us!

For next week’s show we’ll be discussing brand response, which is a mixture of brand loyalty and direct-response marketing.

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Jason’s podcasts: – reviews of new movies in theaters – where we’re Dead Serious About Horror Movies

Full Transcript 

Rob Booker: Hello Mr. Pyles.

Jason Pyles: Rob Booker, how are you sir?

Rob Booker: Never better. What’s cracking?

Jason Pyles: Oh geez, I don’t know, where should we start?

Rob Booker: I don’t know, you know what really burns me up?

Jason Pyles: Tell it.

Rob Booker: All right, so 17 years ago today, no not really today, that would be really convenient, 17 years ago or more, 18 years ago, 19 years ago I started my first online business and that’s not to brag because Jason, in my first online business we made $70,000 a month. Sounds pretty good.

Jason Pyles: Nice, yeah. I dig it.

Rob Booker: But we were spending $90,000 a month.

Jason Pyles: That’s problematic Rob.

Rob Booker: That didn’t work. It’s problematic for sure and as none of our listeners probably know this, that first business was a complete failure, and I had to rebuild any online business or any business that I ever did after that, without Facebook. Can you imagine a world without Facebook?

Jason Pyles: Wow. Yeah it’s hard to imagine at this point.

Rob Booker: Wait a minute, do you even use Facebook?

Jason Pyles: It’s just peripherally, but not for my own personal Facebook needs.

Rob Booker: Only because you have to.

Jason Pyles: Yeah, exactly. That’s right.

Rob Booker: There was no Facebook. And now you’ve built several successful podcasts.

Jason Pyles: Yes sir.

Rob Booker: Horror Movie Podcast. Movie Podcast Weekly. The Trader’s Podcast.

Jason Pyles: Right.

Rob Booker: You’ve been involved in the creation of, and the launching of some very successful podcasts and they were not, you didn’t market those podcasts through Facebook.

Jason Pyles: No.

Rob Booker: All right. Here’s what burns me up.

Jason Pyles: Okay.

Rob Booker: If you’re out there listening to this show right now my name is Rob, nice to meet you and my friend Jason Pyles is here with me. We’re a podcasting team that’s been around since before podcasting was around.

Jason Pyles: That’s right. Old school.

Rob Booker: We did our first podcast actually before podcasting was a word. Didn’t we?

Jason Pyles: I mean I know we were doing actual radio shows before.

Rob Booker: Yeah.

Jason Pyles: So that’s been a while.

Rob Booker: And this is episode one of Marketing Podcast Weekly and we’re glad that you’re here.

Jason Pyles: Yes.

Rob Booker: You can subscribe to the show at That’s a great place to go right now, like just stop the podcast, pull your car over to the side of the road and pull up the internet and subscribe to the podcast. All right. If you’re following along in multiple threads and stories that we’ve started here, you’ve detected that there was a time when people were not building their businesses through Facebook. There actually was a time when that wasn’t happen, but if you go on Facebook today, and you’re a marketer of any kind, you are flooded with ads that claim to be able to teach you how to build your business on Facebook and if you can’t use Facebook to build your business you have no chance, you’re dead. And it’s almost as if now Jason, the entire world of marketing is consumed with the idea that Facebook needs to be at the center of, or a primary method for marketing.

Here’s how the story goes Jason. You can put a dollar into Facebook ostensibly with ads. I don’t think you put the dollar actually into your computer, like shove it in there, but I’m sure Mark Zuckerberg wouldn’t mind if you did that, and then you get a $1.20 out of Facebook, but somehow you’re going to turn advertising money on Facebook into sales dollars out of Facebook from everybody that’s on there. Now I’ve had some significant success generating leads on Facebook. I’ve done that. I’ve tried that out. But it wasn’t the path to riches that was promised. It didn’t necessarily replace some of the good old bread and butter methods of advertising and marketing and getting the word out there. And if any of our friends that are listening to this show are, specifically if you’re involved in the financial industry, if you’re involved in the financial marketing space, if you sell stuff to traders, in particular what I’m about to say is really important. And Jason there’s a problem with Facebook advertising as it is currently taught.

Jason Pyles: I’d like to hear this, okay.

Rob Booker: Now I’m going to try to keep my cool because this gets me. This burns me up. Back in the day when I built my first business, and when I built my trading education business in the year 2001, 2002, and 2003, once again there wasn’t Facebook. There wasn’t even Google. I know that the internet existed at a time when Google didn’t exist. None of this existed. Now I’m not saying that to brag because that’s not the point. What I’m saying is there’s hope. There’s hope out here because right now essentially you are being taught, dear listener, that you need to employ Facebook as a strategy for putting money in and getting money back out and everybody has it all wrong. Not only do some of my friends in the world of advertising on Facebook, not only are they now stuck, they’ve had their ad accounts shut off and these are huge names in the world of Facebook advertising. They’ve had their account shut off and all of the advertising accounts for people that they advertise shut off. One mistake. Shut off. No way to get it back.

Jason Pyles: Merciless.

Rob Booker: They are. They are merciless.

Jason Pyles: Intense.

Rob Booker: That is exactly right. You my friends, if you are trying to advertise on Facebook and you’re in the financial industry, the chances are even higher that you are going to have your account shut off because it is possible that people are going to complain about your ad and that is the number one way that people get shut off. Now this all talking around the periphery, but I want to get right to the heart of the matter. If you’re in the financial industry, and you run any kind of marketing or you do anything, I want to talk about the difference between direct marketing, direct response marketing and brand loyalty or brand marketing. Now I don’t know if you know this or not Jason, but you actually have secretly behind the scenes become an expert at brand marketing. Did you know that?

Jason Pyles: No, I guess I didn’t Rob. I’m glad to hear it though.

Rob Booker: When I say the word brand, what’s your first reaction.

Jason Pyles: I do think of marketing. Yeah, that’s representative of your product. It’s what people can expect. Yeah, that’s where I am with it.

Rob Booker: What’s your favorite brand?

Jason Pyles: What’s my favorite brand? Coca-Cola.

Rob Booker: That’s great. I like hearing this stuff. This is great. What’s your second favorite brand?

Jason Pyles: Let me see here. I am partial to Apple Jacks right now, the cereal.

Rob Booker: Okay, great, those are your brands. What is it about Coca-Cola that you like?

Jason Pyles: Well I think it’s delicious and it’s kind of a pick me up actually. It perks me up and when I drink it on the rocks it makes me happy.

Rob Booker: So no Red Bull for Jason Pyles?

Jason Pyles: No, no.

Rob Booker: I have these Red Bulls in the back of my refrigerator and they’re the tangerine orange ones, have you had those?

Jason Pyles: No, no

Rob Booker: It’s not actually disgusting.

Jason Pyles: Oh really.

Rob Booker: We have an old mutual friend that used to call Red Bull the devil’s urine.

Jason Pyles: That sounds about right.

Rob Booker: That’s sounds about right, it’s pretty disgusting, but some people like it. Okay. Brand loyalty. Your loyal to Coca-Cola. If someone puts a Pepsi in front of you and a Coca-Cola in front you, theoretically there’s not a difference, but is there a difference to you?

Jason Pyles: Yeah, I will choose the Coca-Cola.

Rob Booker: I’m glad you said that because that helps me further my point.

Jason Pyles: Okay, good.

Rob Booker: It’s entirely possible that I’m wrong, but I’m not wrong. Okay, we’re all loyal to certain brands and those brands command a disproportionate share of our income, our spending money when we choose a product that that brand offers. Now the difference, there’s another kind of marketing out there, and there’s another kind of marketing theme and it is literally dominating the internet like some kind of disgusting plague or virus spreading through the earth and that’s direct response marketing. And some the famous names in direct response marketing would be Dan Kennedy. Who’s the guy that wrote “The Boron Letters?” No, I’m not asking you Jason, but if you knew this, this would be amazing, Gary Halbert.

The direct response advertising is the kind of advertising where you see an ad on Google after you do a search you click on the ad, and then that ad takes you to a page where hopefully you’re going to buy something. Direct response advertising is a letter that you get in the mail and it says there’s this thing that you need to be interested in and you need to buy it right now. Or a direct response would be a catalog sent to your house where you immediately once you get it directly, you then respond with a purchase. And direct response marketing is this holy grail or this thing that all of us seek after, which is put a dollar in, get $1.20 out. What people will do Jason, is they will sacrifice brand to get a response. Let me give you an example of what that means.

Jason Pyles: Okay.

Rob Booker: So there’s a guy out there on the web, his name is Russell Brunson. He lives in Idaho with his family. He’s a good man. I’m sure he’s good to his kids and I’m sure he doesn’t do any drugs. I mean I don’t want to say anything bad about the guy. I’m sure he could negotiate peace in the Middle East if you gave the guy a chance.

Jason Pyles: Right.

Rob Booker: But Russell Brunson is the head of DotCom Secrets and he’s the creator of a software program called ClickFunnels and he runs about, I don’t know I would say he probably spends 10 million dollars a year on Facebook and he puts 10 million dollars a year in and he probably gets 50 million dollars a year out and it sounds great, right? Sounds fantastic.

Jason Pyles: Yeah.

Rob Booker: But he is in the other, there’s two camps here, there’s brand and there’s direct response. Direct response says the relationship is transactional. I want you to buy my product. Direct response advertising in the grocery store would be let’s say somebody has their favorite brand of cola and it’s Coca-Cola. Direct response advertising or something closer to that would be someone standing in the store asking you to a sample a different kind of cola and then giving you an incentive to buy some of that different kind of cola right now. The reason that you do it in that moment is likely because you got some kind of a discount. That’s not going to create loyalty. That’s a direct response.

Direct response loyalty doesn’t really exist. Direct response marketing is designed to get someone to do a transaction and hopefully do another transaction while the emotions are high, and then do another transaction until the customer no longer has any money or doesn’t want to do anymore transactions. Then hopefully later on you can build up some brand loyalty and over deliver. But the problem is Jason is this, when you do direct response advertising and you’ve brought in a buck or you’ve brought in $1.20 and it’s paid for your advertising and then there’s another potential customer walking through the door, you have no incentive what so ever to pay attention to customer number one. And so as the story goes, people who focus on direct response advertising, not all of them and I’m not accusing Russell Brunson of this, I mean I don’t want to say that at all, but people who focus on direct response advertising get caught up in the idea that I’m just going to create a bunch of transactions. I’m just going to create a bunch of money. I’m just going to charge a bunch of people a bunch of money.

When I ran my first online businesses back in the late 90’s, we ran a series of job and employment related websites where we would list job offers and we would list resumes on line. We built a business that was bringing in something like 2.5 million resumes a month in a bunch of different categories, but our entire goal was to make money as soon as possible. So we had a whole process by which we would sell memberships to employers to that website and we had process by which we would sell resume rewriting services to job seekers. And the entire thing was done by email, and we didn’t have any other products to offer and all we were really interested in was making a bunch of sales because we were trying to pay our expenses. Jason as I mentioned, that didn’t end up anywhere. That didn’t create any kind of, that business failed

Jason Pyles: Rob was working on his resume. [inaudible 00:14:07]

Rob Booker: Rob was working on his resume exactly, and there’s so many good stories that come from that time. So many good stories. But the point was, we were all about the transactions. Now if you are listening to this show, and you do marketing in the financial space, you probably have been taught that what you need to do is make an offer, make it as low cost as possible and then you’re supposed to follow that offer up with a low cost product. So you might even have a free product at the front door, and then soon as they walk in the front door you smack them in the face, you punch them in the mouth and you say, “I’ve got something for you that’s $7.00.” Then you kick them in the crotch and you say, “Now I’ve got something for you for $27.00.” Then they’re like, “Okay, fine let me out of here,” and then you kick them in the gut and you ask them for $499.00, or whatever it is. That is transactional and it’s direct response and the intention is that you’re going to get the bulk of your money all up front. Then frankly Jason, you hope they don’t ask for a refund and you hope that’s the end of it.

The propagators of this disgusting and vicious plague that has been placed upon the marketing world, the propagators of this have taught things such as launch formulas where you gather up an email list by any means possible, and then you over a seven day to fourteen day period of time, you hammer those people with a bunch of offers to come inside of a very expensive program. They pay the money. They get the program and in every one of these examples, in every one of the bad examples anyway, the goal is to make the money and it’s a transaction. The long term relationship is not the key. The long term relationship doesn’t really matter. The point is supposed to be that you don’t have to worry about the long term relationship Jason. What you’re worrying about is selling. You’re worried about getting dollars in your account.

Now here is my point, that doesn’t work in our industry. And if you are in the financial marketing industry, if you sell stuff to traders, you already know that this doesn’t work. This doesn’t work at all. You’ve tried it and it doesn’t work. You might have gone to a conference where they told you offer a lead magnet, which is a free product. Then offer an upsell, which is a lower cost product. Then offer another product and as soon possible, and they say this, they come right out and say it Jason, as soon as possible you want people to become a customer. You want them to hand over their credit card information. They tell that you want to do that because you want to insert confirmation bias into the relationship. Which is, you want people to start justifying the purchase that they made. That’s what you want. You want them to start believing that they did the right thing and so you want leave it up to the individual to make it feel like they made the right choice. But if you are in this industry right now, you are more than likely experiencing a significant reduction in your revenue. And the reason is, and most people don’t think about this Jason, let’s say that you go into the grocery store.

Jason Pyles: Okay.

Rob Booker: Let’s say now you’re the head of RC Cola that sold a total of 10 cans of cola last year. They make like a press release, “RC Cola sells its 10th cola.” You’re now in charge of RC Cola and you go into the grocery store and you set up shop and you just hammer on a discount and you send flyers to these people’s homes and you just hammer on it, and you have a sudden influx of a ton of orders at discounts, like low prices because you just sold a bunch of stuff because you were just hammering on people.

Jason Pyles: Yeah.

Rob Booker: Sounds pretty great. You’re just like. “Man, I’m making money. I’m going to keep doing this.” What do you think other companies do when they see you having success offering these discounts and setting up shop in front of the store and sending out these circulars in the mail?

Jason Pyles: Well they’ll probably imitate it and do a similar model. Right?

Rob Booker: Yes, exactly right. Yeah. Right now in the financial industry in particular, if you’re selling stuff to traders, this is exactly what is happening to you. Now this might be happening to you if you’re selling stuff to people who want to learn how to do Facebook ads. This might be happening to you if you’re selling stuff to people who want to become more healthy and learn how to do an exercise program. This might be happening to you in any industry. But right now in my industry where I’ve made, I don’t know, 8 million, 9 million dollars selling stuff online in the financial industry to traders, in my industry everybody is now competing with me. Everyone. They’re all competing and they are out for blood, and what are they doing right now Jason? They are offering something for free at the front of the website. Something for $10.00 or $7.00 on the next page. Something for $50.00 on the next page and everyone is doing it at the same time. Now in a world like that Jason, how do you stand out? How is anybody supposed to cut, if there’s ten of you offering you a circular what are you going to start to do to try to get awareness?

Jason Pyles: Oh well, in that case I mean that’s very short sided, this whole direct response thing. Yeah, it would be very difficult to stand out in that case.

Rob Booker: It would be. You’d cut your prices. You might hire a clown.

Jason Pyles: Right, right.

Rob Booker: You might do whatever it takes. It’s getting harder and harder, more and more difficult to do any kind of advertising online, or any kind of work online where the entire goal that you have is transactional in nature, where the entire relationship is based on some kind of a transaction. And it’s harder and harder for you even if you have a legitimate $7.00 product, it’s called a trip wire or whatever you want to call it. Even if you have this $7.00 product that comes after, it’s harder and harder than ever to have that $7.00 product look any different than everything else that’s out there. It now begins to look exactly the same.

Jason Pyles: Yes.

Rob Booker: Guess who embarrassing fell for all of this?

Jason Pyles: My friend Rob Booker.

Rob Booker: Yeah me, absolutely.

Jason Pyles: Right.

Rob Booker: I got involved in this. I started to think, I went down two different paths. I went down the path of I’m going to do the freebie and the $7.00 thing and the $27.00 thing and whatever. I did that. Here’s what happened. I got obsessed with converting people into $7.00 and $27.00 customers and I stopped asking the question, is this thing that I’m offering different, unique, special, am I over delivering, and I got obsessed with just offering it and then putting it on auto pilot and I forgot about it. I kind of forgot about what was going on. Then in another way what I did was I got obsessed with sales. I got obsessed with sales numbers. Now back in the old days when I first started this out, I don’t know, do you care about this story?

Jason Pyles: I do. I like this stuff. I like the old stories.

Rob Booker: Here’s what I did when I first started this business. Back in the day I read a book by Seth Godin called “Permission Marketing” and everybody listening, even before they subscribe to the podcast, okay after they subscribed to the podcast, they should buy the book “Permission Marketing.” I also read a book called “Unleashing the Ideavirus” by Seth Godin, and Seth Godin taught in those two books if you combine them, that you ask for permission to communicate with people. And the way that they say yes to it, is you offer them something that is incredibly valuable and back in those days it would be also something that would be very unique and it would be something that would be easy to share, and that was the viral part of it. The permission part of it was handing over their email address. Seth Godin was and is the father of all email marketing. He started a company called Yoyodyne that was eventually sold to Yahoo, and Yoyodyne specialized in doing promotions that in exchange for a contest or a game or whatever, people would give their email address. He started all of it, and then here’s the kicker, after you had their email address, here’s what you were supposed to do. You were supposed to add value and build trust. Add value and build trust.

Jason Pyles: Yes.

Rob Booker: Well ain’t nobody got no time for that anymore. Nobody does this anymore. So I want to make a call, a call to arms, especially if you are in my industry, in the financial marketing industry where you market to traders, brand advertising is the long view. Brand advertising is loyalty to a taste, a color, a way of life, a lifestyle, a feeling that you get when you think of your product. Direct response advertising is, I have to act now or I’m else I’m going to miss out on everything. There’s a counter. There’s a countdown. There’s a timer. It’s going away. There’s scarcity. If I don’t do it now it will run out and I have no loyalty to the brand. I’ll just jump on board with whatever the next product is that does this.

Brand on the other hand, is something built over time. Brand loyalty is something that if it’s introduced to you as child and you have a positive experience, or think of any other way that you build brand loyalty. That takes time. That takes the permission that someone gives you and then it takes time to build a relationship. You can’t build as many of those relationships. You can’t build a thousand of those relationships within a short period of time and you certainly can’t do it by just running an ad that asks for an email and then asks for $7.00. It’s a whole different way of thinking about, not just the way that you do ads on Facebook, but the way that you do business everywhere is providing a ton of value. The only way to stand out now is to go back to those roots. I lost my way a little bit Jason.

Jason Pyles: Yeah.

Rob Booker: So it’s time to go back to that and the way that you go back to that is you offer, and I know if you’re listening right now you’re like, “There’s no way I’m doing this. There’s no way I’m doing this.” What you need to do is you need to find a brand that you respect and you need to list out the reasons that you respect that brand. And what you also need to do, is you need to go back to the old days and find your optimal customer inside of your data base. The customer that was loyal. The subscriber that whatever you sold they bought. The most loyal, the happiest, those customers.

What that’s called is a customer avatar, but that’s a dumb way of saying it and I don’t want to use marketing language. It’s the ideal customer. You need to go back to what that person looks like and you need to find the brand that you like the most and you need to ask yourself the question, I learned this question from Frank Kern and I love this question, and it is, “What kind of person do you need to become this year to earn the business from more people like that individual?” Not “Where do I need to advertise to get in front that person?” Not “What product do I need to invent for that person?” Not “How far do I have to discount to get the maximum number of those people?” None of that. It’s “What kind of person do I need to become?” and “What is that person really love about life? Who is that person?”

Brand loyalty on the top level is built from knowing who your ideal customer is and then becoming, from the logo to your actions, the type of business that appeals to that person. Now we’re out of time, so we’re going to have to come back next week Jason and I’m going to introduce the concept that I call brand response, which is a mix between brand advertising and direct response advertising that not only helps you build a brand that people are loyal to, that people will line up at the door to get the stuff from, that’s what we want to do.

Jason Pyles: Excellent. Well I can’t wait.

Rob Booker: We haven’t ever done this before. This is our first podcast together in a while and a brand new podcast, we probably want everyone to subscribe to this show. That’s probably a good idea.

Jason Pyles: Absolutely, because that way they don’t miss any of the releases right?

Rob Booker: Yeah, right, exactly. So that’d be a huge favor and leave a review of the first episode, that’d be great too. And if you want to contact the show and ask a question you can write to R-O-B-B-O-O-K-E-R and we’ll read the question on the air Jason, and answer the question and …

Jason Pyles: Yes, you are infamous for doing that in fact. If people want something answered, then they should send it in. Absolutely.

Rob Booker: We may even give out the phone number next week.

Jason Pyles: Maybe, maybe but they got to come back to hear that. Right?

Rob Booker: All right fresh new episodes are delivered every Monday morning on iTunes, SoundCloud, Stitcher, smart radio and everywhere that you enjoy listening to podcasts. I’m Rob Booker and that is the producer Jason Pyles. Jason you want to plug anything before we go today?

Jason Pyles: Yeah I have my own little podcast as you mentioned if people are into movies. I have Movie Podcast Weekly. You can hear about new movies that are in the theaters and if you like horror movies, if you’re a weirdo like me, you can go to

Rob Booker: I can vouch for the fact that I don’t even like horror movies, but I like horror movie podcast. Absolutely worth taking a listen. We’ll see you next time everybody.

Jason Pyles: Wow.

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