Boom. What's going on everyone, this is Steve Larsen. This is Sales Funnel Radio - and today we are going to talk about JCPenney.

 

I've spent the last four years learning from the most brilliant marketers today. And now I've left my nine-to-five to take the plunge and build my million dollar business.

 

The real question is, how will I do it without VC funding or debt, completely from scratch? This podcast is here to give you the answer.

 

Join me and follow along as I learn, apply and share marketing strategies to grow my online business using only today's best internet sales funnels.

 

My name is Steve Larsen, and welcome to Sales Funnel Radio.

 

What's up guys.

 

Okay, first off this is probably one of my favorite case studies ever that I've read. This is from a Harvard one that I read, and it's really, really fascinating stuff.

 

First of all, I would not consider myself a clothing connoisseur. But this is a very fascinating case study.

 

I am not gonna be able to say dates or even names correctly, it's the lesson though.

I remember when I read this the first time, I was sitting in a very tiny room, listening to 400 words a minute, reading through and going through…

 

I was like, oh my gosh, this is a great lesson, right. And it completely applies to everything that's going on here. So here's the story…

 

The story goes that the guy who... You know when Apple first started making their Genius Bar in the Apple Stores, right.

 

There was a guy, right, that went through and he started thinking through this amazing Genius Bar and this amazing experience when you walk in and the design of it, the layout, the look of it, right.

 

When you walk into an Apple Store, you know you're in an Apple Store, right?

 

And, again, I can't remember his name, so if anyone remembers, awesome. I don't right now off the top of my head. But the guy, what he did is he went and created this Genius Bar and he created this awesome feel when you walk in there. It's very premium feel when you walk in.

 

The Apple Store was launched, right, very small, and then they started replicating, replicating just, and blast them all over the place when they got the base test correct, right. Well, they started thinking to themselves, so why don't I keep building this out and put this around other areas.

Other department stores started seeing what Apple is doing. It's about this time JCPenney came along and said, Hey what's up guy, do you wanna leave Apple, come on over here and design our stores instead?

 

And so he left designing these Apple Stores, with the Genius Bars and that premium feel when you walk in, he left doing that and what he did instead was he came and he started doing designing and doing very similar for JCPenney.

 

He moved into the JCPenney and he gutted tons and tons of stuff inside of there. Gutted it.

 

He got rid of this and that - the normal shirt racks and the rings, things like that. I mean he got rid of, it literally looked like an Apple Store but with JCPenney clothing inside of it:

 

#1: He completely redesigned the entire feel

 

#2: He got rid of mailers

 

He started saying things like, “Hey look, people know that we mark this up and then when they come in with a coupon they're actually buying it at the normal price it was anyways. Well instead, we know that customers are smart. We know the customers are smart. Why don't we just not do that?

And instead of, right, let's say they get a shirt in, and it's 40 bucks they mark it up to, I don't know, 60, 70 dollars and then send out a coupon that brings it back down to 40 bucks, right.”

That's like the classic Kohl's model; that's why there's always a deal going on, always clearance right now - there's always this going on.

That's how they run all those department stores.

 

So instead of sending mailers - they didn't send anything. He started telling the customers, and his message to the market was, “Look, customers, we know, you know what's going on. We know that you know that these mailers we send out are not really an extra 50% off, or 40% off or 30% off.”

 

What, oh my gosh! Right.

 

All they did was they marked it up like crazy - so then it seems like this huge discount.

 

It's kinda like, my favorite thing, I went and I just grabbed a quick pair of like, swim shorts at Kohl's the other day and they're like, “You saved $97!” when I go and check out.

 

They don't tell you how much you spent, they tell you how much you saved.

 

That's very clever and I'm starting to do that in some of my sales funnels; right on the thank you page, “You saved blank, blank, blank” - instead of you spent this much.

 

Like you still say that, but the message is, “You saved this, this, this.”

And I was looking at them kinda funny. I'm like “I bought a pair of socks and a shirt, you're telling me I saved $147 today?” And I always kinda look at them and smile, and they know and they're like, “Thank you. Congratulations.” But it's the psychology behind what they're doing, right?

 

Anyways, so this guy said, “Hey we're not gonna do that, we're not gonna send out these mailers.” Instead, if a shirt is $20 we're not gonna say it's $19.97 - we’ll just say it's 20 bucks.  We're not gonna mark it up and then give you a coupon. We know you're a smart customer.

 

A very interesting thing happened…

 

Their stock price dropped, it like, I think it was uh, like a full fourth. I mean they lost so much value - it may even have been more that. It dropped a gigantic level in a matter of two months - I mean really really fast.

 

All their foot traffic stopped in the stores, no one showed up anymore…

There was no reason to show up, right?

 

Eventually, they ended up getting rid of the apple guy, getting back their old model. And then suddenly, you know, it's no longer that tight. JCPenney lived and moved on.

 

What's the lesson there? Guys, even if people know…

 

Okay, we do this thing when we do webinars called the stack. The stack in the webinar is beautiful, it's amazing, it's brilliant, it’s incredible. The stack is a way to structure your offers and then present the offers.

 

However, it can feel a little bit weird to the person who's doing it, right? Cause you're like, “First, you get this…” This is totally like an infomercial. This is why they do it, this is called the stack. It's inside an infomercial, right?

 

First, you're gonna get this, and that's valued at this price, but wait, if you act now I'm gonna give you two for the price of one. But wait, if you act now we're actually gonna give you a third for absolutely free, but wait, if you act now we'll give you this, and this, and this, and this, and this - that's a total value of blank

 

And they stack this value up and then do a massive price drop. People know what they're doing, right? You know what they're doing, right?

 

Go open up your mailbox next time the mail comes in, I guarantee there's some kind of mailer in there. And you know what people are doing, right? But buyers love the game!

 

It doesn't mean you don't play the game just because like, “Oh they're gonna know what I'm doing.”  Great, good, then they know that you're asking for their money soon, right?

 

It's pretty common, especially for a funnel builder, to be like, “Well, I don't know if I want to put like the whole like price slash thing. I don't know if I wanna put like a countdown clock, I don't know if I wanna put like.... You know, all these little scarcity urgency things..”

 

All these little scarcity urgency things we used to get someone to push over the edge, they're there for a reason! Don't feel awkward about it. Don't feel weird about it. People want an excuse to act now.

 

The coupon mailers that go out - that’s a reason for people to get off of their butt and buy now.

 

Could they buy the same shirt probably the next day for the same amount of money? Yes. But the mailer is the lever that you have, right?

 

It's the ad. It's the scarcity and urgency, specifically that gets them to get off of their butt and take action immediately rather than wait.

 

If they wanna buy, give them a reason to now.

 

That's why I love this case study so much. JCPenney literally took away the deal. It took away the endorphin rush that I'm going to get knowing that I saved $147 today on socks from Kohls.

 

I did not save $140, I spent $20. But it's the way that you say it that makes it an offer. And you can do that with your copy, not just what you're selling. You can do that with your scarcity and your urgency.

 

This is a huge lesson. Let people play the game. Buying is a game.

 

What's funny is, if you look at the sales process psychology from beginning to end, there's a game that gets played inside of there.

 

There's an endorphin rush that happens that people get to feel when they purchase. It's an actual endorphin rush. They want to feel it. Let them feel it.

 

When you take away the deal, they don't feel it. And even though they've got the same product, they are less satisfied with it. Does that make sense?

 

You can give the exact same product away and not play some of these games… Not play some of these scarcity and urgency moves. Not give them a reason to act now. And you will literally kill the fun of them purchasing. They know. They're still buying, they're still responsible purchasers (most of the time, right?)

 

What you want to do is find ways to get - so that's my challenge, that's literally the entire point of this entire episode....

 

This might be a little bit short. But that's the whole point of the episode, okay? Figure out what it is people want to purchase.

 

There's this weird thing that happens, guys…

 

Anything that I sell, the 80/20 rule always applies. 20 percent of my people are going to run forward after they purchase. Which is true for any product.

 

When I was doing Two Comma Club coaching for Clickfunnels, a year ago, I still am, but a year ago I started looking at the numbers.

 

There were several hundred people who were inside the course, and when I looked at how many people were actually active, it was literally 20 percent.

 

The other people who were in the course would still get what they needed, the 20% were just the hardcore people who stuck. You know, the hardcore believers that were with me like crazy. They're the true believers. They were about 20 percent.

 

It's the exact same rule when you're actually selling this stuff. If you think through the actual buyer psychology; they want to feel the warm fuzzies of them purchasing.

 

I did an episode about this a little bit ago, about the pre-purchase. This is one of the easiest ways to have a pre-purchase. Don't take away the deal. Don't take away the warm fuzzies. Don't take away the fun of buying, right?

 

People want to purchase. When you show something cool, they already want to buy.  People want to buy. They want to buy things. There's a consumption instinct. (There’s a great book called the consuming instinct.)

 

We want to consume things. And that's not a bad thing. But sometimes you, the entrepreneur, get in the way with your own emotions of what you feel awkward over. Don't do that!

 

If something is proven to help you sell a product, then you stay the course and use it to sell the product - as long as it's ethical and moral. I think that goes without saying, but maybe it doesn't, so let me go ahead and just say it. As long as it's ethical and moral, okay?

 

So, figure out what those mechanisms are.

 

One of the easiest ways for you to go ahead and do that is to start looking at what other products your customers are buying to get the same solution.

 

Like if they wanna get money, and let's say they buy your product here and they buy someone else's and buy somebody else's and buy somebody else's.

 

Go look at not just like the funnel, but also what scarcity and urgency, what thrills of purchase thay have laced into their product.

 

There's a thrill of purchase. Give them the thrill of purchasing.

That’s exactly what JCPenney lost when they brought that other guy in.

 

They're sending all these mailers out to all these women who wanted to buy, then they took away the thrill of purchase because they didn't save.

 

My mom's awesome, but she would spend tons of time clipping coupons. She would go gather coupons from all over the place.

 

She would end up getting money from the store and two carts of groceries for free. It's like crazy, right? Amazing. But mentality it’s very different... so to take away part the thrill of the savings…

 

It's kind of like when you go on a vacation, right? I said this a few episodes ago, the vacation itself has been shown to have the same amount of fun and excitement, as the expectation leading up to the vacation.

 

When you see a movie preview come out six months in advance and you put the time on the calendar. You get the babysitter set up, you're planning everything so that you go, that's the exact same thing.

 

It's the reason you open carts and close carts. It's the reason you do scarcity and urgency. It's the reason you have a countdown clock. It's the reason you do price slashes and price drops - little things like that.

 

Does the customer know what you're doing? 99 percent of the time, the answer is yes, but that does not mean you don't do it?

 

The customer wants to play the game. It is a courtship, it is a dance that they're playing with you.

 

And when you look at it that way, it is a lot of fun.

 

So anyways, that is the whole point of this episode… Keep the fun, keep the thrill of purchasing for your customers.

 

Make sure you've got these little things laced inside there, so they like to buy. Make it so it's easy for them to buy. Make it so it's fun.

 

One of the easiest ways, have success paths. Little cultural things.

 

We have a product we just launched called My Funnel Stache, as in a mustache. My Funnel Stache is ALL the top end funnels that I built while at Clickfunnels for Russell and his clients.

 

I rebuilt them in front of a live audience and you could buy them and use them. So like the top of the top, the freakin' awesome, okay? But with My Funnel Stache, I send out they're Clickfunnels sunglasses - one lens is red, one lens is blue - they're 3D glasses, but they look like the Clickfunnels colors.

 

Then I send you out a Clickfunnels mustache, it's not Clickfunnels, but it's a fake adhesive mustache. Why? Because it's fun. That's the only reason. It builds CULTure - it's the thrill of the purchase that we're lacing inside there.

 

We got another cool little few tools we've been using lately.

 

When somebody goes in and they buy from me, I'll just flip my phone open and send them a video real fast and say thank you to them personally with their name. “Hey, what's up, thanks so much,” and I'll crack stupid jokes. I don't care if they're stupid.

 

That's not the point. I'm keeping the thrill of the purchase laced inside of the buying process.

 

Don't be boring to buy from - don't be boring in general ;-) - but don't be boring in the actual order process.

 

Anyway, there's a lot of tiny little things we've been doing like that lately. It’s even laced inside of my copy:

 

“All right, if you don't get this now, are you ever going to be successful doing this stuff? Absolutely not!”

 

I'll say things like that just as a joke, and they know that. I’m lacing in my personality. I’m lacing in scarcity and urgency. The courtship of the purchasing experience is so important.

 

Don't take away the fuel from their sales. They already wanna buy from you - just give them reasons to do it now.

 

So that's what I've got for you guys today. Remember the JCPenney rule, and the time you go get your mail from your mailbox, and you're leafing through your crap and you're like, “that's junk, that's real, that's junk, that's real,” I guarantee you guys all do that - so do I. But I like to read them...

 

Every once in a while you get one of those coupons, and you're like, “Sweet. You know what, we should go do this.” What did they give you? Their numbers work at the discounted rate - they just marked it up most of the time to get you in.

 

They gave you a reason to act now - that's a close.

 

Coupons are a close. It's not even marketing anymore, we're in the sales, especially the close area. They're closing you, “Come on in,” let's get that foot traffic up and rocking.

 

So anyway, keep the thrill of the purchase going.

 

Hope you guys enjoyed this episode. If you guys liked it, please rate and review in iTunes and share it. I have a lot of fun making these for you guys.

 

If you guys want to check out My Funnel Stache, literally go to myfunnelstache.com and you can watch how I built that whole thing and the marketing behind it.

 

I built the funnel live in front of an audience, built the marketing itself, designed the funnel. Built the script live in front of the audience. The entire thing was really fun.

 

It includes the application funnels, webinar funnels, event funnels, e-com funnels, supplement funnels, B2B - all the top ones that are built out of Clickfunnels. These aren't your grandma's funnels - these are awesome funnels. That's my Funnel Stash.

 

I decided it would be cool if it was “stache,” so we got 500 fake mustaches right behind the camera right now, and we're shipping them out!

 

All right guys, thanks so much, and talk to you later. Bye.

 

Boom! Just try to tell me you didn't like that!

 

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