Dear Reader,

Ever seen a company that documents everything — right down to how to microwave soup or smile in the hallway? All in the name of systems and procedures?

Here’s a real list of some of these so-called important systems and procedures:

  1. A 16-point guide on “How to Properly Wash Your Hands” framed over the bathroom sink.
  2. A mandatory “Hallway Greeting Protocol” with a laminated 5-step card.
  3. A 12-page PDF titled “Microwave Morality: A Guide to Ethical Reheating.”
  4. A quarterly training session called “Stapler Stewardship 101.”
  5. An official document labeled “Desk Plant Guidelines.”
  6. A performance review rubric with a “Break Room Behavior” section.

Not kidding. I wish I were.
These SOPs exist. And they almost always show up in small, overly managed, underperforming companies.

These overly managed organizations are typically led by high-strung individuals that would rather write a memo than write a birthday card.

They lack emotional intelligence and think that actions are driven by documents.

Actions are driven by behaviors, and behaviors are driven by culture.

“Culture eats strategy for breakfast.” – attributed to Peter Drucker.

Culture is the driving force behind all behaviors that produce our actions.

Systems and Procedures are the tools that document the critical How Tos of an Intellectual Process. Used well, they’re helpful. Used wrong, they’re just distractions.

The same people who would misuse Systems and Procedures are the same people who are frustrated with their Sales and Marketing Results.

They think that the most important thing about Sales and Marketing is a documented how-to guide.

WRONG!

If you want your Sales and Marketing to work without crazy amounts of oversight, then it must be built upon Culture!

Are you Built on Culture?
When you are built on Culture, then you are led by leaders.
When you are built on Culture, then your Sales and Marketing are joyous attraction centers.

Are you Built on Control?
When you are built on Control, then you are led by micro-managers.
When you are built on Control, then your Sales and Marketing are forced detention centers.

So, ask yourself: What kind of company are you really building? One built on culture—or control? One that attracts greatness—or one that manages mediocrity?

 

 

Watch / listen above or read below.

Todd Liles: Roy, today I want to circle back on something that you said a few episodes ago. It got me thinking, and I thought to myself, what an amazing episode that could be, and it’s going to be this. In this episode of Todd Liles and the Wizard of Ads, we’re going to talk about how there’s this thing called internal marketing, and the way that we build that is through the role of service, and building not just customer loyalty, but internal employee loyalty.

So we’re going to unpack that, and what I’d like to do is just remind the audience a little bit about this moment that happened that you described in an earlier episode where Ken Goodrich had an opportunity at Goettl to really showcase not in an ad to the world but in culture to his people what it means to do the right thing.

Roy Williams: To watch somebody do something that they say they believe in. The entire world today, whether they know it or not, in their hearts, they’re saying, Don’t tell me what you believe, show me. Show me what you believe. Do it. And what happened is, in a nutshell, Ken was out of town for a few days, unreachable for important reasons, and in the meantime, an older couple was having a big event at their house, a very important event. Lots of people were going to be there, and they knew they needed the system, the better air conditioners, and they wanted the house to be comfortable. And they called Goettl.

They had already chosen Goettl because they really believed in Ken, really believed in the company, loved the ads. And Ken’s out of town, he said, Look, can we absolutely get it done in time? Don’t worry about that. And through a series of like three or four different things, just one in a million kinds of things in a row, they literally weren’t able to do it, and it wasn’t that they weren’t trying. It wasn’t that they just weren’t focused on it. There were specific reasons why it couldn’t be done.

And as soon as they would overcome this one, there’s a new reason it couldn’t be done. It was nuts, it was just insane. So Ken gets back, and these people had left a request to talk to him, and when they told him that they felt personally betrayed, and that they felt like we believed in you and you let us down, he said, Look, are you at home? They said, Yeah. So he said, I’m going to come right over. So he drove over there, and it was a very expensive job; it was a big house, multiple units, and it was close to $40,000. And he had a check in his pocket, and it’s exactly the price they paid for the job, and he just gave them the check back, and he said, Now look, here’s what we’re going to do. We’re going to start from scratch, we’re going to give you the most fantastic air conditioning system anybody can have, and it’s free. I want you to have all your money back, because you’re right, that’s not who we are, that’s not what we do, and I really feel bad I let you down. I wish I knew how I could make this up to you by doing more than just giving your money back.

And so I didn’t make that into an ad. In a million years, I would never make that into an ad. But yet it demonstrated to his people, everybody in the company knew what happened, and they’re going, wow, that’s how much we believe in doing things the right way, not the easy way, that’s how much we can be trusted to deliver what we promised. And so employee recruitment, employee retention, just skyrocket, and culture, see, culture is basically what your people believe about the company. Not the customers, but what your employees believe about the company. What do they believe in their heart about the company? That’s your culture.

And it’s not really up to you, it’s not up to the things you say in your little mission statement and yada yada yada. No, that’s just a Hallmark card. That’s just a bunch of silly crap you can buy on a calendar. What it is that you do when nobody’s looking except your employees, that’s your culture. And so the great ones, all the people I’ve ever worked for that build just legendary companies, Dewey Jenkins, same thing. Elmer Zubiate, absolutely. I mean, Elmer’s people will follow him to the gates of hell, and it’s because they know, hey man, when nobody knows about it except us, they’re watching the business owners do the right things. And so that’s culture and it’s actions, it’s not words.

Todd Liles: Roy, I do another show. I’m not cheating on you; it’s a different show altogether. I do it with Alan O’Neill and we call it the Hundred Million Mindset and what we’re doing is we’re talking to people that have either already exceeded a hundred million, or they are close to it, or maybe they’re in a market where they can’t do that but they’re in a market where when they hit 20 — they’re absolutely dominant, a small market they’re going to dominate. So if they were in a bigger market, they could. They’ve got the mindset.

And I’m speaking with Aaron Hagen, and Aaron has, I think, nine locations right now of a Mr. Sparky franchise. And this year they’ll probably do about 60 million, and it’s all electrical, nothing but electrical.

Roy Williams: Wow.

Todd Liles: And this is going to connect. He had told me that they had built such a culture of high competitiveness, and the way that they recognized that was basically by the highest revenue. And he was being very vulnerable when he was sharing this story. It was something that you could tell was sensitive for him because he’s a past athlete, and he believes in going forward. So he would do this whole series of things. When someone hit a goal, if someone else had a banner up and you just beat their banner, it was a big deal. You’ve got to go up and rip their banner down and hang up your banner. And he said for a long time that was sort of fun.

But in 2016, they sat down, and they decided to do the core value exercise and do it seriously. They’ve done it before, but he’s like, let’s actually do it for real. And one of their core values was that we put safety above everything. And when he said safety above everything, that meant safety above profits, safety above revenue, safety above being number one. And he said after they started reflecting on those core values and he started asking the question, are we living by them?

Todd Liles: What they found was that the people who were getting to tear the banners down, their culture had become one… And he said he didn’t even know it happened. He would have never promoted it; he would have never intentionally done it, but their culture had become one that said what we actually value above anything else is sales. And as you can imagine, what could happen, there was some unethical behavior going on. He fired a guy who was doing 1.2 million because he had always been the guy who was carrying the banner before it was done, not one, not two, every single electrician followed him out the door. Every one of them, all of them. They didn’t keep one.

And he said that they were committed to this culture. Now, I think in 2017, when that happened, they were doing about 20 million. So he essentially lost the ability to service 20 million dollars of revenue overnight. They rehired, they rehired into the culture. Today, they’ve got the lowest turnover that they’ve ever had. They almost don’t lose anyone, and they still celebrate the goals, but they’re not celebrating revenue as their number one item. They’re celebrating their core values, and they’re not struggling with any of this behavior anymore.

And when we look at service, what you knew and you helped me figure out, is that culture is internal marketing. When we are training people, when we set aside money for warranty, when we say hey we will release someone for violating our culture, those fractions of investments are probably, if you look at the guy doing 20 million, now he’s going to do 70 million, going to go to 100 million, that fractional loss as an investment, could it possibly be, Roy, the greatest return that we’ll ever get even compared to the money we put in the external market?

Roy Williams: Absolutely. As a matter of fact, I didn’t originate this, but I quote it a lot, and I wish I could remember who did originate it, but advertising is a tax we pay for not being remarkable. Now, when you are remarkable, do you know how you know you are remarkable? Because people remark about you. People talk about you all the time. When people are so profoundly impressed, whether it’s positive or negative, when they’re just profoundly moved, they tell people, they talk about it, they make remarks about it to their friends, and so advertising is a tax that we pay for not being remarkable.

And when you have a company that is remarkable, then you can just accelerate that growth by talking about what you do and why you do it that way, and what it means to the customer, why the customer should care about how you’re going to do it, and the fact that you do it the right way, not the easy way. And then they go, Do I believe that? I do believe that about these people because they’re paying the price for it. And so whenever your people know it’s true, you know what’s really interesting?

Everybody’s had this experience, Todd. Everybody’s had it. There’s things you say all the time, you’re always saying these things, you say, say, say, say, say these things, and everybody’s heard you say these things a million times, and then somebody else says basically the same thing you’ve said a million times, and everybody gets excited about it, and they believe this person. It’s like they’ve never heard that before, and you’re sitting here going, what? What? I’ve said this for years, and you never believed me, but you suddenly believe this guy and act as if you’ve never heard it before. You know what the difference is?

Todd Liles: Tell me.

Roy Williams: When he said it, they believed him. When you said it, they didn’t. Why did they not believe you when you said it? And I’m not talking about you personally, I’m talking about me, I’m talking about all of us. They don’t see our behavior–

Todd Liles: That’s it.

Roy Williams: They don’t see our behavior delivering what we say we believe. And for whatever reason, this other person says it, and they’ve seen something in that behavior, they’ve seen some external evidence that causes them to believe, yeah, this is the guy, and so they respond enthusiastically because now they believe such things are possible. And so being the company that you pretend to be, being the company that you claim to be, delivering what it was that you promised, and more than you promised.

See, there cannot be delight without an element of surprise. Did you know that? If you deliver exactly what you said you were going to do, there can’t be any delight. There’s satisfaction. They got what they were promised. But to be delighted, something had to happen that you weren’t expecting. There cannot be delight without some element of surprise.

Todd Liles: You know, Roy, the second to last step, the second to last action step, the last step is just inevitable, in our nine-step process, Press Play adds value. Add value. And the reason why we tell people to wait, wait, do all the things you’ve been paid for, then do something they didn’t expect, and show them you did it once they’ve already paid. It’s adding value. You delight them. They will remember that. It’s like, oh, wow, the last step is your future.

Well, if you’ve done all the right things up to this point, you’ve delighted them, of course, they’re calling you back. You have secured the future service, which is very powerful. Let’s talk a little bit about something new and exciting. You and Elmer are doing something cool. For those of you who don’t know, Elmer is one of those guys who also has a $100 million mindset.

Roy Williams: Oh, yeah.

Todd Liles: Built big things and has since exited to private equity, and now he’s about to do something new that’s not in competition with his previous company. In fact, it’s something that a lot of people hadn’t even considered. He’s actually going to give many people in the service world a chance to make a beautiful living and to bond in relationships. And you call it Zooby. Zooby. Which was the first time you told me the name? You didn’t tell me the story, and I’m just going, Zooby? I’m literally thinking of animals. What are we doing? And then you slowly unveiled it to me. I’m going, oh, it makes total sense.

So, because we’re talking about service and how service can actually be a real, legitimate form of growth and advertisement, will you tell us this vision that you, Elmer, and I want to give credit to Jeffrey Eisenberg, too? I want to give Jeffrey a lot of credit for this. Will you talk about this new vision that you guys have and what it’s going to mean for the market?

Roy Williams: Here’s what’s interesting. The vision, Elmer’s vision for a very, very long time, as long as I’ve known the man, a dozen years, 13 years, I’ve known Elmer and worked for him for 10, helping him build his company. And then Jeffrey, I’ve known for 25 years. Elmer’s vision, I’m happy to support Elmer’s vision. Jeffrey, my best friend, and Elmer know each other really well, and it triggered… I mean, it pushes Jeffrey’s buttons.

This is a guy that the largest tech companies in the world, for him to do a little project, is $350,000. I mean, he’s an astoundingly highly paid consultant to big tech companies about personas. Help us identify our target customers, and how to recognize different kinds of target customers, and speak to them in the manner they prefer to be spoken to. And so he’s unbelievably good at this. And so he walked away from vast amounts of money to help Elmer do what Elmer wants to do, because he believes in it so much himself. And what it comes down to is this. Elmer has always had this fixation on superheroes, and superheroes serve other people. And superheroes do things for you that you cannot do.

And he said, so the world is full of air conditioning companies that can do what you can’t do, plumbing companies that can do what you can’t do, electrical companies that can do what you can’t do. But who do you call whenever you have high ceilings, and you need some light bulbs in these 12-foot ceilings replaced, and you’re of an age where standing on top of a tall ladder, which you probably don’t have, and then putting your hands up above your head, that high off the ground, right? Yeah. If that’s not something you’re feeling, if that’s not something you really want to do, who do you call to come over with a high stepladder and go up that sucker and to put new batteries in the smoke alarm, or to replace those bulbs in the fixed cans up in the ceiling, the spotlights?

Who do you call if you just want to replace all the doorknobs and lock sets in the house with a different look and all the cabinet pulls? All of us, everybody listening to this program, it’s two screws to hold the doorknob. You take out these two screws, they’re long screws, you pull the two parts apart. It takes like a minute and a half to replace the doorknob in a bedroom, right? Yeah, yeah, I know that. I’ve been doing it since I was six years old. But there are tons of people like my friend Jeffrey. He was raised in Brooklyn. In a million years, probably doesn’t know a Phillips head from a flat head, and would be terrified to start taking apart a doorknob. And I explained to him, it’s like, dude, I can do this. I put the guttering on his house. I’m going, dude, I can do this while you’re drinking iced tea. It’ll take me a minute. I mean, I’ve put up hundreds of miles of guttering. You know, I was doing that as a young man. And so there are a lot of people like Jeffrey.

And who do you call when you want somebody to change the tire on your car? You have a flat in the driveway. Who do you call? Somebody to come and run over and jack your car up and put the spare on and then take the flat tire down and have it repaired and then come back home, put it on the car. Who do you call? So there are a couple of hundred things that people need done.

And Elmer said, I’m going to hire young men, train them, have quality control supervisors that check on the work, and we’re going to give them uniforms and full-time jobs with really good benefits and actual careers. And we’re just going to be the neighborhood superheroes. And you go to the website, and you can choose all the things you need done. Click, click, click. And then you can schedule it. Here, the little calendar pops up and shows you the days. And you choose the date. And then we show up and do those things for the price that was on the menu. And so he said, I’m just going to do this. Why? Well, number one, because nobody does it, and everybody needs somebody who will do those things.

And Jeffrey put his pencil to it. He’s brilliant. And he figured out, yeah, this will also be profitable. And they’re going to do it as a B Corporation, which most people have never even heard of. Because by law in the United States of America, if you have a C Corp, the fiduciary responsibility is that the corporation exists for the benefit of the shareholders. All decisions must consider what would be best for the shareholders of the corporation. It’s basically the law. A B Corporation is a for-profit corporation. It’s not nonprofit, but it states in the Articles of Incorporation so that all investors are put on notice, all vendors are put on notice, and all creditors are put on notice. You know what? We’re running this for the benefit of the shareholders, the employees, and the customers equally. And we’re going to do the right thing, and everybody’s going to be treated fairly. And our primary goal is not to get the maximum return to the shareholders. And if that makes you uncomfortable, then don’t be a shareholder.

But if you understand this about us, now they have the laws on their side, they have a different stated fiduciary responsibility. It’s not a nonprofit. It is for-profit, but you have to qualify to be a B Corporation. So Elmer and Jeffrey are doing that, and I’m just a guy writing the ads. I love both of these guys, and I’m going, okay, so tell me what you guys have decided. They’re doing all this work behind the scenes, and you said our vision. Nope, not really my vision. I’m fine with it. I’m delighted to support Elmer and to help Jeffrey.

Todd Liles: And that’s a good point, right? And I should have been more specific. You don’t always create the vision. In fact, the vision should come from the owner. Always. But you are the man who understands, and the team of wizards understands how to take that vision and make it pop in a way that perhaps I wouldn’t understand.

Roy Williams: It’s hard to write great ads. If you’re a really good ad writer, you cannot write great ads for people you do not know. Great ads are not portable. Great ads are not portable. They will work best only for the company for which they were written. And anytime someone says, I just want them really good ads. Give me that ad. That’s one of them ads. It works. Give me that ad. It will work for me, too.

True story. Really happened. It’s been 25 years. There’s a company called Falkenberg’s in Walla Walla, Washington. Five generations. Skip Cundiff and his son, no, Spud was the father, and his son was Skip. Skip was the fifth generation. Haven’t talked to him in 20 years. Walla Walla is the asparagus capital of the world. It says so right on the water tower. A total about 40,000 people in the trade area. There’s a mall at the edge of town.

Todd Liles: Town smells funny, too, right?

Roy Williams: No, it’s a very delightful town.

Todd Liles: No I’m just joking.

Roy Williams: No, you’re talking about the asparagus. I get it. So the deal is, Falkenberg’s has been there since before statehood. And it’s got this heritage iron clock out on the street that still works right on the curb. Big, gorgeous, gigantic thing. And it’s a state landmark. And the store is, they have done a remodeling. It didn’t have a vaulted ceiling. It had a domed ceiling, like the Dome of the Rock. And a snow white carpet. It was unbelievable, and they were the Rolex jeweler. They were the fine, fine, fine expensive stuff in town. And so it had a couple of bad years in a row. And I went to Walla Walla, and I looked around, and there was a mall out here with like five or six jewelry stores in it. Things weren’t good. I looked around. I’m going, wow, boy, they’ve really over-decorated this. This is intimidating. I can afford to buy stuff here, but man, I’m even uncomfortable in here. I feel like I need to take my shoes off and be respectful, because this place is like the Sistine Chapel of jewelry stores. 

And I said, okay, it’s like September. They have to have a good Christmas or they’re not gonna be able to pay their bills on January 10th. And I said, Okay, they don’t have the money to remodel. That’s not gonna help anything. And they said, “Well, you know, let us tell you who our customer is. Let me tell you about our customers. You need to understand who our customer is.” I said, “Okay, who’s your customer? ” And they said, “Well, she’s about 40 years old, woman, high heels, well-dressed, highly educated, doesn’t have to work. And that’s our customer. Got money, got taste, got style. That’s who shops with us.” Said, “Huh, evidently you think that I have a little handle I can crank that spits out 40-year-old rich women. I don’t have such a handle.” And I said, “We have a problem. You know what the problem is? ” And they said, “What? ” I said, “You’ve been here since before statehood. You’ve been here like 150 years. So there’s nobody in this town of 40,000 people who doesn’t know about you. The problem is that they don’t know about you. The problem is that they do know about you. And I say, what we have to change is what they think they know about you. And you know what it is that they know about you. This place is scary as hell.”

And he goes, “You’re right, you’re right, you’re right about that. We see these farmers, guys that we know, we know that farm, we know who that is. We know he’s got enough money in his front pocket in cash to buy a new Ford tractor, fully air-conditioned with a built-in CD player.” He says, “This guy has tons of money. We see him looking in the front window, but he won’t come into the store. We open the door, come on in. Come on in. You’re welcome.” “Oh, no, I’m not dressed for it. I got mud on my boots.” And he goes, “We can’t get him to come in. What are we going to do? What are we going to do? What are we going to do? ”

Remember what I said about vulnerability a couple of episodes ago? This is the ad. “Ladies, many of you will be fortunate enough this Christmas to find a small but beautifully wrapped package under the tree with a simple gold sticker that says, Falkenbergs. Now, you and I both know there’s jewelry in the box. But what you need to know is this. The man who put it there is trying desperately to tell you that you are more precious than diamonds, more valuable than gold, and very, very special. You see, he could have gone to a department store and bought department store jewelry like all the other husbands, or picked up something at the mall. But the men who come to Falkenbergs aren’t trying to get off cheap or easy. Men who come to Falkenbergs believe their wives deserve the best. So whenever you see that simple little seal, just know this. The man who put it there for you is still very much in love. We just thought you should know.” And that was the end of the ad. “We just thought you should know.”

So what happened was. I call it the blackmail ad. I was speaking. This is a true story. I was speaking only to people in Walla Walla because it was a scary store. It was incredibly fancy. It’s kind of like, “Wow, wow, this stuff is expensive.” It’s not that the prices were high. Anything sold in this environment has to be overpriced, right? And I said, “Okay, we have to use that as evidence that if he loves you enough to come into this scary place and everybody thinks it’s super expensive. Yeah. No matter what’s in that box, they’re still very much in love, no matter what it is.”

And everybody knew. That’s true, man. A man goes in there and comes out with something for you; he paid the price for that. I mean, he had to get dressed up, take a shower, and go in there and wear his Sunday best clothes. And so everybody believed it. Now, one year later, when I said, “Ads are not portable, ” that’s what started this whole rant, right? There was a guy in Massachusetts who was in a peer group with the Conduffs. I remember his name, but I’m not going to say it. And so…

Todd Liles: He doesn’t deserve to have his name repeated.

Roy Williams: No, no, no. Anyway, Corrine Taylor has been with me for 27 years as operations manager. And she came into my office and said, “Roy, there’s this guy on the phone from Massachusetts named such and such. Do you want to talk to him? ” I said, “I don’t know anybody in Massachusetts by that name.” She says, “Well, he really seemed like he wanted to talk to you. Have you got a minute for him? ” And I said, “All right, put him through.” And he said, “Hey, is this that man they call a wizard? “Mm-hmm.” “Well, I’ve got a bone to pick with you.” Said, “Huh? What is it? “Well, your ads don’t work. I wasted a lot of money this Christmas running one of your ads, and it didn’t work. Didn’t do any good at all.” I said, “Oh, so I never wrote you an ad. I don’t have any idea what you’re talking about.” “Well, I got it from a buddy. He said he had a fantastic Christmas last year, and it was unbelievable. Made all kinds of money. And he gave me a copy of the ad. Not this Christmas. Worst Christmas I’ve had in years.” 

Todd Liles: Oh, my gosh.

Roy Williams: And I said, “Oh, and you’re saying the ad didn’t work? ” And he says, “Nope, didn’t work at all. What do you have to say for yourself? ” And I said, “Well, here’s what I have to say.” I said, “The ad absolutely worked for the scary store in town, but everybody knew it wasn’t true about you. Nobody’s scared to come into your store. You don’t have a high-class store that people walk in on tiptoes, wondering if they belong there.” And I said, “But the store that does have that reputation, you sold a hell of a lot of stuff for that store.” And he goes, “Well, I don’t know…” and I just hung up. I said, You know, bite me. So the point is, the real truth is that ads are not portable. That ad, or some variation of it, would work for just one store in a town, but it has to be the really scary, really intimidating, very overpriced, fine, fine, fine, all the fancy brands and all that kind of stuff. And I said, especially if everybody in town knew that about you. And I said, we have to turn that reputation into an advantage instead of a deficit.

Todd Liles: So Roy, since we’re talking about service, if culture is the way that our people behave and the way they think about us, that’s internal culture. There’s something else going on here, especially with this example of this place in Walla Walla, that’s scary because it looks overly fancy. And I wrote down, Why was it scary? And then you answered that and said, Oh, it wasn’t actually the money, it was the culture.

Roy Williams: No, it was the decor. The two guys are friendly, friendly, friendly guys.

Todd Liles: Decor, thank you. It wasn’t the culture, it was the decor, right? And as you had said, there were plenty of farmers there with mud on their boots who had the money. They don’t want to go in there and mess the place up. They’re being too nice about it.

So there is something there. And I think what I hope the listener sort of takes from this is that one of my questions here was, how can a small business implement personalized service without a big budget? And remember, these guys didn’t have the budget to redecorate. So I believe what I’m hearing is that there are many little things that we can do that are already centered around who we are. Sometimes, just like you’ve written, sometimes you do need to change the storefront. Sometimes you do need to move locations. Sometimes you do need to do those things. And oftentimes, you do have to do that. But what about just starting in-house? What about just changing the way people see themselves? There are a lot of little things that can go there, which, by the way, a side note, have you ever heard of the hotel called The Gritti?

Roy Williams: No.

Todd Liles: Sounds like a terrible name, right? Gritti. 

Roy Williams: Yeah, yeah. 

Todd Liles: It’s Italian, though, and it’s in Venice. It’s right on the water, and it’s $3,000 a night. Everything’s covered in gold leaf.

Roy Williams: Wow.

Todd Liles: Super fancy. As you were describing this jewelry store, that’s what I was picturing. The Gritti has had Ernest Hemingway. Ernest Hemingway has signed their book. It’s had every famous person on the planet that’s willing to do it, at some point in time, has been to The Gritti.

So as you were describing this place in Walla Walla, I was picturing, like, The Gritti and going, okay, that’s sort of fascinating. The Gritti can get away with it because it’s Venice. Their audience is worldwide, and they’re also charging a premium. This local company’s having a little bit of trouble with it because their audience is 40,000, but not even 40,000. They told you their audience is 40-year-old women, and that’s in limited supply.

You figured out how to take the constraints and open them up. And I’m not going to continue to unpack that because I think you’ve done that well, but I want the listener to take this away from what I’m saying. If you have constraints, and one of the constraints that you have is a money restriction right now, how creative can you get? How can you not just talk about the 40-year-olds?

Roy Williams: I’ll give you an example.

Todd Liles: Yeah, please.

Roy Williams: I’ll give you an example. All right, in the Monday morning memo for March 17, 2025.

Todd Liles: There you go.

Roy Williams: Okay. It’s called Seven Quiet Secrets of Sales Activation, and one of those is vulnerability. You’re going to be vulnerable by openly or indirectly admitting something. Do you know what it is?

Todd Liles: Tell me.

Roy Williams: Our slowest day of the week.

Todd Liles: Oh, come on.

Roy Williams: And so we’ve both been to the League Kitchen.

Todd Liles: Oh, yes.

Roy Williams: And I never ever go on Mondays. You know why?

Todd Liles: Is it busy?

Roy Williams: Too busy. It’s their slowest day of the week.

Todd Liles: I’m guessing Thursday’s their slow day.

Roy Williams: No, no. It was always Monday. You can shoot a cannon through that place on Mondays because nobody eats out on Mondays.

Todd Liles: Gotcha.

Roy Williams: And it’s a nice restaurant. And so it’s a very nice restaurant with a whole lot of incredible things, but they decided on Mondays the offer’s for dine-in only, buy a burger, get one free. Now, they’re expensive burgers. They have very good hamburgers. That’s like the cheapest thing on the menu, but they have really, really good hamburgers. It’s buy one hamburger, get one free. Now, what’s interesting is there are enough people that will use that as an excuse to go on a Monday to the League Kitchen, which is a very upscale restaurant here in Austin, and they’re packed in there, people standing at the door waiting to get a table, and that’s why I don’t go. It’s just packed, and I don’t want to wait for a table. Now, here’s what’s crazy. It’s also their highest profit day of the week. Do you know why? Because they’re saving a few bucks on a burger. They’ve got all this found money.

Todd Liles: Hey, let’s buy some booze.

Roy Williams: They buy a lot of appetizers. They buy desserts. They buy side dishes. And then, of course, they buy drinks from the bar. They spend lavish amounts of money. Why? Because they’re playing with house money. It’s like when somebody goes to Vegas, and they get ahead by a couple thousand dollars, they start betting recklessly because they don’t think of it as their money. Man, this is like the casino’s money. I can be silly with it. And so anytime you said, okay, what disadvantage do I have? Well, we can’t buy a customer on Mondays. The place is deader than a bag of hammers on Mondays. And so, let’s just kind of fess up on that and use it that every Monday is a buy one, get one free burger day. And people convince themselves, remember—

Todd Liles: Truth in advertisement.

Roy Williams: No, here’s what’s crazy. Remember what we talked about all the time? If you win the heart, the mind will follow.

Todd Liles: Yes.

Roy Williams: Now, everybody knows. Everybody knows. They’re only saving like the price of a burger. And they’re walking out having spent a fortune. They can do math. They’re using the fact that they’re getting one burger free, right, as an excuse to justify eating at a really nice restaurant on a Monday. And so it’s kind of like helping people do what you know they really want to do.

Todd Liles: I love it.

Roy Williams: And so it’s not that you’re giving away margin. You’re investing in a burger for customer acquisition.

Todd Liles: Yes, that’s good. I love it. You know, and I think one of the big takeaways for me is just it’s a matter of reframing.

Roy Williams: Yes, yes.

Todd Liles: How can we reframe our disadvantage? How can we reframe this as actually furthering advertisement? And I love it when we reframe things. All right, Roy, what I have for you today is not an external ad. It’s an internal one. And I’m going to have you in your wonderful voice, if you don’t mind reading this here.

Roy Williams: At the Ritz-Carlton, we are ladies and gentlemen serving ladies and gentlemen. This motto exemplifies the anticipatory service provided by all staff members.

Todd Liles: Listen, if you’ve not been to the Ritz-Carlton, I understand it’s expensive. It’s exclusive. They’re usually in really nice places. I’ve been to one twice, same location. And I want to tell you just a little bit about my experience there. The first time I went, there was a wastebasket, and it was on the right-hand side of the bed. And I moved it to the left-hand side. Why? Because I tend to put my stuff on the left-hand side of the bed. I always have. So I put it on the left-hand side of the bed so I could throw my trash there and put my phone there and all those things. I didn’t think anything about it. The experience is wonderful. The people were super friendly. Everyone was courteous. When I went back there three months later, and they greeted me, the gentleman at the desk said, Mr. Liles, welcome back. It’s great to see you. Oh, and just so you know, sir, we have prepared your room. We put your wastebasket on the left side of the bed. They pay attention to that level of detail. They know where I put my wastebasket. And I’m like, going, this is amazing.

They also empower every single one of their people to make it right up to $300. That’s from the person who’s at the counter to the person who’s cleaning your room. They give them real power. They say, ladies and gentlemen serving ladies and gentlemen. They treat their people with respect. You’re not a maid. You’re not a cook. You’re not a janitor. You’re a lady.

Roy Williams: You’re a representative of the company.

Todd Liles: You’re a gentleman.

Roy Williams: Yeah.

Todd Liles: So, Roy, I love it. I want you to give us the closing thought and the reason why you feel this works.

Roy Williams: It’s the same thing we talked about in an earlier episode. It’s hard to ask people to spend money that you could not afford to spend yourself. Which is why when a salesperson can’t afford to buy the product they’re selling, it’s hard to ask other people to spend money they could not afford to spend. Well, let’s flip that upside down. To get people to treat others with great respect, it’s easier for them if they are treated with great respect. And you cannot give what you do not have. And so, if you’re given great respect and if you are given courtesy and if you are given every possible consideration and if you are empowered, then you act like a person who is empowered. You act like a person who is respected, and you give others what you have been given. And if a person has been given no money, it’s hard for them to ask people to spend money they could not afford to spend. And so, you cannot give what you do not have, and you cannot ask for what you do not have. Does that make sense?

And so, whenever I said everything is about identity, who am I? I said I’m a poor person asking other people to spend money I could not afford to spend. That’s the problem with technicians asking people to pay the right price for a job because they couldn’t afford to pay it themselves. It’s a really big problem. Likewise, because the Ritz-Carlton says, we know that for people to give respect to others, they have to be given respect themselves. We will give them respect. We will treat them courteously. And did you know that I think it’s the Ritz-Carlton? I’m almost certain of it. You know what their hiring policy is? Deep, deep, deep, deep, deep, deep interviews. And if you are not hired when you’ve been interviewed, you can never go to work there. There’s no second chance later. If they ever made a decision, you’re not right for us. That’s a permanent decision. And so, whenever they take a look at somebody, they look at them for real. They’re saying, is this person the kind of person we want in our life, in our company, in our business? And if they say, No, we don’t think it is. Case closed. And so to leave and come back, that doesn’t happen either.

If you ever decide there’s ever a place you’d rather go work, congratulations, because this door closes when you walk out of it. The fact that there’s some place you’d rather be, that’s all we need to know. And so it doesn’t mean it just gives you an indication of how deadly serious they are about finding the right people.

Todd Liles: Yeah. But when you get on that team, you’re probably not leaving.

Roy Williams: No, you’re probably not leaving. That’s the point. And that’s how it comes, you know, a similar thing happened at Zappos when Hsieh was still alive, before he sold it to Amazon for a billion dollars. And Tony Hsieh, whenever you went through this interview process, and you were hired, he says, Okay, here’s the deal. Now that we’ve decided we want you to work here, you can have the job, or we will write you a check right now for $5,000 to not take the job. And it’s real. If you said, Yeah, I think I’ll go get another job. Give me my five grand. If they’ve made the decision to offer you the job and you decide you’d rather have $5,000, Tony Hsieh said, that’s the cheapest I’ll ever get off. It’s like, I would rather give them $5,000 right now to not come to work than to hire the wrong person who doesn’t desperately want to be one of us. And so everybody who works there, or at least whenever he was alive, I don’t know if it’s still a policy or not, everybody who works there, when they were offered the job, they were handed a check for five grand.

If you’d rather have that five grand than come to work here, pick it up, it’s yours. Walk out the door.

Todd Liles: Yeah, I love that. By the way, all listeners, make sure your interview process is really dialed in. You’d better be deep in the interview process before you put a $5,000 check up there.

Roy Williams: But the point is this, if you want to have extraordinary people, you have to be serious about intensely looking for extraordinary people.

Todd Liles: I totally agree. I totally, totally, totally agree. It’s not too terribly dissimilar, not by a $5,000 check standard, but Dave Ramsey has a lower acceptance rate than Harvard.

People want to work there, and when they get on the team, they don’t want to leave. So that’s beautiful, Roy. Thank you very much. I think my sort of final thought here is that loyalty isn’t about discounts. It’s about connection. It’s about service. And I love what you said, you cannot give what you do not have. That was very powerful. Thank you for sharing that.

Roy Williams: Thanks for letting me be a part of it.

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