Bob Serling
The Secret of the $25 Million Letter

Bob Serling: This is 15-Minute Innovation, and today the tables are turned a bit because I'm going to be the person in the hot seat being interviewed.

The host for today's call is my friend and business associate, Ed Oakley. Ed is the CEO and Founder of Enlightened Leadership. The reason I invited Ed to do this interview is because he's such a brilliant creative thinker in his own right. So, Ed, welcome!

Ed Oakley: Oh, thanks, Bob. It's fun to be the interviewer for a change. (laughs)

Bob: So why don't we get right to it? What's your first question for me?

Ed: Let me ask you, what is the biggest business-building idea that you're especially known for, Bob?

Bob: Well, Ed, I'd have to say it's a toss up between two ideas. A lot of people know me for what is now referred to as the $25 Million Letter. That's referring to a lead generation letter I wrote for a client of mine who was the CEO of a fairly small business. They were doing a couple million dollars a year in sales, and the first time they used this letter, they immediately landed an agreement for a $25 million contract.

Then they took one of their trainees, who was still, I believe, a freshman in college, gave him the letter and the follow-up process I developed, and he went out and on the second use of this letter, landed a $3 million contract. Here again, this also was more than what their entire revenue was the prior year.

Ed: Wow!

Bob: And then the second business-building idea I'm probably best known for is a skateboard toy that I developed with Tony Hawk's logo on it.

Ed: Well, that's different.

Bob: (Laughs) Yeah, very different. And it sold very well in Toys R Us and Wal-Mart and KayBee Toys and Target and all kinds of drug stores and gift stores all over the country for a number of years.

Ed: Wow. Well, let's take that one. How did you come up with that idea? That's so different.

Bob: Well, you know, that one's really interesting because at the time I wasn't really trying to invent a toy. We live in the San Diego area, which is a very big area for skateboarding and surfing and my son was a very avid skateboarder. He was about 9 or 10 at the time.

Skateboard decks are made out of thin plies of wood that are glued together so they will be light and flexible. The kids are constantly dragging them on the ground to stop the board or bumping into things, and the deck chip, particularly on the nose and tail. Once they chip, they start to crack length wise, and then the whole deck splits.

Well, those decks cost about $45 to $60 a piece — just the deck — and most kids will go through a deck a month, which gets real expensive real quick.

So I was originally trying to invent a bumper that would protect the skateboard and it would go on the ends — a plastic bumper, so when the kids bumped into something, it wouldn't crack.

Well, we developed a prototype bumper and took it around to the skate parks. Actually, first I showed it to my son, and his basic response was, "Well, that's really lame. Nobody will ever want that." Of course, I figured, "Forget what the kids think. The parents are going to want it because it saves them a ton of money." But then I realized it just isn't so. The kids determine the market. They tell their parents what they want.

So I took my bumper to the skate park, and the kids hated it. And, boy, they aren't the least bit shy about letting you know! So I kept coming up with different versions of it, hoping to make it more appealing — wild colors and designs.

I finally came up with a version where we embedded some flint in it that would create a cold spark, so when they bumped something or they intentionally dragged the tail to stop it, it would shoot off this huge ball of sparks.

So I took that version to the skate park, and the kids loved the sparks, but they said, "Yeah, but the bumper part is still lame. Lose it."

That, of course, was what we did. We lost it. We created a little pad that would go on the bottom of the skateboard, where it couldn't be seen, that when the kids dragged it, it would put out the shower of sparks.

And then that pad was adapted to little plastic toy skateboards that are about three inches long that kids play with with their fingers. It's a big market — they sell about $20 million a year worth of these. And this was the version that became the toy with Tony Hawk's logo. It was called "Firefoot", which is the name that I created for it, and it sold extremely well.

Ed: Hey, that's a great story. When you need to come up with a big idea to solve a problem or achieve an important goal, what do you do?

Bob: Well, you know, in general, occasionally an idea comes along that's a flash of inspiration, and to an extent that was the case with the skateboard toy. But really what I do is I sit down, particularly if I'm developing a product for a client or developing a business-building strategy, I'm going to sit down and go through a process that essentially has three steps.

The first step is to do a very, very deep level of research. I want to find out everything there is to know about the market, about the competitors, about what my client's doing.

And I then take that research and go into a formal process that we call the "Marketing Accelerator Process", which is really a series of questions. Some of these questions are very logical, some of them are very off the wall and weird, but fun and force your brain to think in different ways, and others are a mixture of both.

The point of that process is to identify what I call "opportunity gaps" or "profit gaps" that exist that my client and their competitors have been missing. It's those gaps that can be leveraged and turned into a massive market benefit for the client.

And then the third point in the process is that generally you're going to come up with three or four great ideas, and you then have to evaluate them to come up with the single best idea. And a lot of times that involves doing real market studies, either with prototypes or with test marketing, or whatever. Because I want to know what the market is going to buy in advance, not what I think is the world's best idea, because the true measure of any idea is whether or not the market will pay for it.

Ed: Give me an example of how you use that process?

Bob: Sure. Let's go back to the $25 Million Letter, and the point I want to emphasize here is how important the research process is.

When I sat down with my client, they had originally approached me about helping them rewrite the copy for their website. They thought that their website wasn't doing a very good job of selling their service. I took a quick look at the website and actually the copy looked pretty good.

So I basically gave them a laundry list of things to send me, which was all of their past marketing that worked, all that didn't work, testimonial letters from their customers, complaint letters, all the information they knew about their competitors, including website URLs so I could look at the sites, and so on. I then dug in and did a very deep, intensive study of that market. It took, maybe, six weeks to do that research.

But in doing that, I identified two things: First of all, that their message was complex and the service they provided was very complex. And they were trying to sell the explanation of the entire service, or range of services, in their lead generation piece. But it was so complex that people couldn't understand it, and they actually got lost in the process of reading it.

The second thing was the business they were in was developing emergency websites for defense contractors and departments of the government involved in national defense. That meant that their prospects were CEO's of large defense companies and senators and Congress people who sat on various armed forces defense committees. Those are not easy people to get to.

So the second important factor I realized through the research was that they weren't even getting prospects to even see their message. If you mail a letter to a CEO of a large corporation or a member of the Senate or Congress, there's very little chance it will get delivered. Some gatekeeper will intercept it and it never gets seen.

So we did two things. First, we re-crafted the message, simplified it, boiled it down to just the key distinguishing points that set them apart from their competitors. This involves finding a particular sore point with your prospects, an area that they have great difficulty with, and providing a hint of a solution for that. That was used merely to stimulate curiosity and get people really interested — as opposed to a long, complicated message that confuses your prospect.

The second important thing we did was change the delivery method, and it was very simple. The delivery method we went from was instead of a letter mailed — they were using a letter that said "Personal and Confidential" and they'd mail it to a Congressperson, and it would never get seen.

So I had them FedEx it, because Federal Express is always going to get in the hands of the person it's sent to.

The very first day they used the letter, they FedEx'd it to this senator, and within two hours of it being delivered — it was delivered at 10 a.m. the next day — within two hours they got a call from that senator's Chief of Staff saying, "Can you be in Washington, D.C. tomorrow to meet with us?"

And they were shocked, but of course, they flew to Washington, D.C. the next day. They had a two-hour meeting, and came away with an agreement in principle for a $25 million contract.

Ed: That's an impressive example.

Bob: It is, but it really underscores how important the research is, because had I not done the research, I wouldn't have found those obvious, almost glaring points that were hiding there in plain sight but everybody else was missing.

Ed: Yes, and they're so much in the forest, they can't see those key individual trees.

Bob: Absolutely.

Ed: Do we have time for one more question, Bob?

Bob: We do.

Ed: Okay. What is your innovation style? Do you tend to prefer to work on big ideas by yourself or with a team?

Bob: Well, primarily I prefer to work with a team, and any time I can, my preference is to work with a team. When I say a team, when I go into a client's company, for example, I don't want just the marketing people and the sales people. I do want someone from marketing and someone from sales, but I also want someone from customer service, someone from shipping, definitely people who are receptionists, and anyone who's on the front lines. Because it's these people who hear different feedback from customers, from vendors, from distributors...

Ed: You're adding to the research, aren't you?

Bob: Absolutely, and that's a great point that you made, Ed, and thank you. It's a deeper form of research. You've got a much richer knowledge base that you're working with, and I'm never surprised that many of the best ideas come from people who are on the front lines, particularly your customer service people.

So given the choice, I like to work with a team. However, I also have to say that many times, some of the ideas that have been most successful for me come when I'm working on my own. And I pay a substantial price for that in that I get woken up at three in the morning with these ideas (laughs). This is also another function of doing the proper research.

When you're bombarding your brain with a ton of input and stimulation, behind the scenes, it's making these connections — putting pieces together and tearing it down and putting fragments back together in ways you'd never think of consciously. And these big ideas often pop out when you're relaxing.

So for me, oftentimes I'll get a great idea when I'm out walking the dogs or if I'm in the shower or if I'm driving — you know, I'm stuck in traffic and I'm just kind of spacing out. And many times, at three in the morning, I'll wake up with a big breakthrough idea.

Ed: Let me turn on that light.

Bob: Yeah, I always keep a pad of paper on the nightstand right next to me.

But again, I will then take that idea, if possible, back to the group. And when you do that, the group, nine times out of ten, will come up with refinements and improvements, and they'll take what was a very good idea and turn it into an extraordinary idea.

Ed: Bob, I think that's a really key point. It seems to me that one of the keys for you is the fact that you are flexible enough and open enough to take your brilliant ideas back to the group and invite improvement.

Bob: Well thank you, I appreciate that. And not only that, but for anybody listening, you have to be flexible enough to be receptive to the great ideas that are going to come out of your company from areas where you wouldn't normally expect them — your webmaster, the receptionist, the guy or gal in shipping, and it's really crucial if you're going to get the best quality ideas possible.

Ed: That's definitely been my experience as well.

Bob: Well, great. Ed, we're just about to the end of our time here today, and I really want to thank you for taking the time to interview me and the excellent insights that you added to my responses.

Ed: It's been fun, Bob.

Bob: Thanks so much.