Profit

How to Grow a Fatter Bottom Line
With Almost No Math Skills At All

As we Americans prepare for a day of edible abundance, it's good to think about the currency that puts the food on the table -- financial abundance.

Not just money.  Profit.

I bring this up because yesterday I was talking with a client who is has over a quarter-billion dollars' worth of sales to his credit.  He's savvy.  But he's starting a new business, and he's in learning mode about the Web.

I asked him if he knew about Direct Marketing Math.  You don't need graduate degrees in statistics to understand this.  You don't even need to have finished high school.

Direct Marketing Math is very simple... and yet it is basis for fortunes.  Countless millionaires; maybe even some billionaires.

It works like this:

You put a dollar in, and you get more than a dollar back.  You've made a profit.

Systematize that.  Scale it up.  Keep control of your costs and watch the profitability of each ad like a hawk.

And that's all there is to it.

Now, while it's simple, it's not necessarily easy.  But it's a heck of a lot easier than textbook accounting.

And, if you like direct marketing, I think it's easier - or at least more enjoyable - than other ways of making a living and accumulating a nest egg or two.

What I find amazing is not that my client grasped this instantly - as a natural-born businessman, he found it right in line with all his experience -- but what I find amazing is how few other people can grasp this at all.

I blame the school system, the media, Wall Street and the pervasive need for looking good over getting results.

I have yet to find a school that teaches entrepreneurship that has anything to do with the entrepreneur I am, the ones I know as friends and peers, and the ones I mentor and write copy for.

The only places where Direct Marketing Math is discussed with any degree of fluency and practicality is in private newsletters, high-end seminars, and non-institutional blogs and Web sites.

Wall Street has undoubtedly created the underpinnings of the greatest economy in the history of the world.  But there are no instances I'm aware of where The Street has promoted the understanding of, and proficiency in, Direct Marketing Math.

Looking good?  I won't blame Elizabeth Arden or Giorgio Armani.  They're the effect, not the cause.  If you have any ideas why the vast majority of people would rather look good than get measurable results they can put in the bank or take to Hawaii, please leave a comment.  I'd really like to know.

Now's a good time for me to express thanks to the people, some of them, anyway, who have helped me learn Direct Marketing Math:

• Dan Kennedy
• Denny Hatch
• Perry Marshall
• Jay Abraham
• Gary Halbert
• Ted Nicholas
• Mark Joyner
• Jim Edwards

I have a confession to make: Though I got 782 on my Math SATs, I have never been able to pass an accounting course (a traditional one) -- and I've tried almost a dozen times.

I'm starting to wonder if it wasn't a blessing that traditional accounting doesn't compute.

However, as a Direct Marketer, I have learned (to steal a line from a Wall Street Journal ad), "to teach nickels to become quarters."

And, I have one of the world's best accountants, H.M. of Hollywood, Florida, to help me figure out how to allocate those quarters.

Happy Thanksgiving.  Don't give money another thought, until it's time to make your next marketing investment.  Then, remember Direct Marketing Math.

David Garfinkel
Publisher, World Copywriting Newsletter
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Comments

[adriana]

The vast majority of people would rather look good than get measurable results is because getting measurable results is heck a lot harder for most people than to look good. It takes guts to get results. Eveybody wants to look good, but who would like to take the risk with no promise of a sure return on investment, knowledge of the market, and a calculated marketing effort?

[Kevin Francis]

You know, it's fascinating that what David says about Direct Marketing Math (indeed Direct Marketing as a discipline) is only found "in private newsletters, high-end seminars, and non-institutional blogs and Web sites." I have an MBA and I recall that just after I graduated, on a whim I bought a copy of Tom Hopkins' "How to Master the Art of Selling Anything". I was staggered. In 2 years at B-School, I'd never come across the "nitty gritty" of how business actually gets done! As with sales, pretty much the same for direct response.

It's almost as if with the rise of the big corporation there is a move to make business "respectable", without regard for whether what's taught is effective. In big corporations, often people are rewarded not for being effective but for working the system and "looking good". It never ceases to amaze me how many CEOs (particularly those who have come up through finance and other "non front line" functions) are utterly clueless about the actual business.

[Adriana]

I completely agree. I feel like I am learning now a lot more than I ever did and I have two university degrees.

[David Garfinkel]

Thank you, Adriana and Kevin. Great insights, and good to know the problems I see are problems that you see as well.

David