Persuasion

The $3.9-billion argument for soft, believable persuasion

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Michael Burry, the first guy to figure out how to make money from the subprime mortgage crisis, lost out in a way.

Burry saw the crisis coming. He realized he could make money from it by buying something called a credit default swap. This would pay out big time once crappy mortgage bonds failed.

Burry ran a hedge fund. He invested much of the money in his control in these credit default swaps. But this was a massive opportunity. Burry wanted to invest more. So he tried to raise money for a new fund, which would buy more credit default swaps.

Trouble was, Burry was an awkward guy, and not great at persuading. He shocked people with his predictions of catastrophe. Nobody gave him more money to invest.

Fast forward nine months. Burry’s ideas had spread around the industry. So another investor, John Paulson, attempted the exact same thing Burry had tried to do. From The Big Short:

“Paulson succeeded, by presenting it to investors not as a catastrophe almost certain to happen but as a cheap hedge against the remote possibility of catastrophe.”

This brings up a fundamental rule of persuasion. It’s perhaps the most important rule of them all:

Only tell people something that they are ready to accept.

In some situations, this can mean you don’t start with your biggest promise, your strongest proof, or your most shocking prediction. In the words of Gene Schwartz, the best thinker on this topic:

“The effectiveness of your headline is as much determined by the willingness of your audience to believe what it says, as it is by the promises it makes.”

So did Michael Burry lose out? Depends on your perspective. When it was time to cash in, Burry walked away with an estimated $100 million. John Paulson? $4 billion.

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“Controversial search engine” may be a good business model

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Two years ago, I signed up to get emails from Newsmax. Since then, I’ve seen over 50 sponsored Newsmax emails for the same unusual offer:

“Controversial search engine goes viral — have you searched your name?”

So today, when another one of those emails arrived, I finally clicked on the ad and went through the funnel.

I didn’t search my name, but I typed in a friend’s name. I also gave the town he lives in and his estimated age.

And then I waited. And waited.

The search engine worked furiously in the background, combing through public records, government databases, and various social networks to dig up everything it could on my — so I thought — squeaky clean friend.

I say “so I thought” because while I waited, I kept getting notifications like, “You might be surprised by [FRIEND]’s criminal record!” and “You might be shocked by [FRIEND]’s dating site profiles!”

A few times, I was prompted for more info or to confirm info I had put in already. At one point, the search engine asked me whether I planned to make use of my UNLIMITED access to reports, which I would get after getting [FRIEND]’S report. I thought this was a strange question, but I answered “YES.”

Meanwhile, loading bars kept loading, time kept passing, and I kept getting more notices that I will be “very surprised” or “shocked” by what’s inside [FRIEND]’s report.

After about 10 minutes of leading me by the nose like this, the search engine finally finished. One final checkbox appeared:

“Please confirm once again that you are ready to learn the truth about [FRIEND].”

I sighed and clicked yes.

An order page opened up, giving me the option to access the report on my suspect friend (and as many other reports as I want) for $27.78/month.

I found this whole experience interesting, for a couple reasons. First off, even though this offer is unusual — it’s not a supplement or a newsletter — it’s built upon direct response fundamentals like curiosity, consistency, and continuity.

Second, I started wondering where else you could use the same business model. That model in a nutshell:

Create an online tool that takes in some personal information… churns and whizzes while it applies proprietary algorithms to secret sources of data… and finally spits out a shocking and surprising report — which is only available through a paid monthly subscription.

Off the top of my head, I thought of a tool for generating the horoscope of a person… the historical coat of arms of a family… the feng shui of a property… or an auspicious name for a baby born on a given date.

If you have other ideas, let me know. Or if you like any of the ideas above, they’re yours to use. And if you want a copywriting partner in your new endeavor, get in touch. If you can handle the proprietary algorithms, I can write up the teasing notifications that pop up while your algorithms run — and we can become the next Google together.

Captain Midnight: a perfect direct response prospect

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On April 26 1986, millions of homes on the eastern half of the US were tuning in to the spy drama The Falcon and the Snowman.

It was being broadcast on HBO, but not for long. Soon after midnight on the 27th, the picture flickered and changed. The SMPTE color bars appeared along with a message:

GOODEVENING HBO
FROM CAPTAIN MIDNIGHT
$12.95/MONTH ?
NO WAY !
[SHOWTIME/MOVIE CHANNEL BEWARE!]

This weird interruption only lasted 4 1/2 minutes, but it had big consequences.

The next day, network news picked up the story. People around the country got to jabbering about the unfairness of HBO’s prices. HBO was furious, and they put pressure on the FCC to catch Captain Midnight, whoever he was.

Several months and an investigative manhunt later, that’s just what happened.

In July of that year, Captain Midnight was arrested and exposed as a 25-year-old electrical engineer named John MacDougall. He lived in Ocala, Florida. He had a part-time job there at the Central Florida Teleport satellite uplink station.

But what was MacDougall’s motivation for this stunt?

Was he a modern-day Robin Hood?

Had he been planning this for months?

Turns out, MacDougall had a satellite dish installation business. He’d been doing real well for a few years. But then, HBO (and other paid cable channels) started giving satellite dish owners the shaft. Instead of getting HBO for free, satellite dish owners now had to pay $500 for a decoder box plus $12.95 a month.

So people stopped buying satellite dishes. MacDougall’s business tanked. He was miffed. And so, while monitoring the satellite uplink of Pee-wee’s Big Adventure, he made an impulsive decision.

He pulled up the character generator and typed up the above message. Once Pee-wee’s Big Adventure finished, he pointed the giant 30-foot dish straight at the Galaxy 1 satellite. And he jammed Transponder 23, which carried the eastern feed of HBO.

“I had no animus and I had no malice in my heart,” said MacDougall. “It was the act of a frustrated individual who was trying to get his point across to people who didn’t seem to listen.”

I thought this story was interesting. Almost as interesting as Richard Armstrong’s How to Talk Anybody into Anything. That’s the little book Richard wrote about 44 points he learned by studying con artists. Point 3 is about how con artists choose their marks:

“Look for intelligent, emotional & impulsive people”

That’s good to remember and easy to forget. Because when you’re writing direct response copy, you might feel like you have people’s inner motivations at the tips of your fingers. You might feel you can manipulate them into doing what you want. You might even feel your prospects are gullible nincompoops.

But they are not. At least if they are good prospects, like Richard Armstrong says. In order to sell big with direct marketing, you want to write to people like Captain Midnight. Intelligent, frustrated, lacking a feeling of control.

“The customer is not a moron,” said David Ogilvy. “She’s your wife.” But let me finish the story of Captain Midnight.

In the following months, HBO devised a system to identify unauthorized uplink transmissions. Congress passed a new law, which made satellite hijacking a felony. But MacDougall was charged under the old law, with just a misdemeanor, and got away with a $5,000 fine.

He still lives and works in Ocala, FL, where he continues to make an excellent prospect for bizop offers. As for his legacy, MacDougall says,

“I do not regret trying to get the message out to corporate America about unfair pricing and restrictive trade practices. That was the impetus for doing what I did; that’s the reason I jammed HBO; that’s the reason I sent them a polite message.”

General Patton and 4 top copywriters

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“The difficulty in understanding the Russian is that we do not take cognizance of the fact that he is not a European, but an Asiatic, and therefore thinks deviously. We can no more understand a Russian than a Chinaman or a Japanese, and from what I have seen of them, I have no particular desire to understand them, except to ascertain how much lead or iron it takes to kill them. In addition to his other Asiatic characteristics, the Russian has no regard for human life and is an all out son of bitch, barbarian, and chronic drunk.”
— General George S. Patton, August 8 1945

Why is Patton the most famous American military man, at least among those who never became president?

You might say it’s his wartime performance. That might be so. I’m not a history buff so I can’t say. But my guess is there were lots of other great generals in American history who never became household names. Why Patton?

Maybe it’s the Oscar-winning movie that was made about him, which had the Francis Ford Coppola golden touch. But this raises the question, why make a movie about Patton? I’ll tell you my theory.

Patton became famous because people perceived him as a true leader, and they perceived him as a leader because he was (among a few other things) so unflinchingly opinionated.

Look at the quote above. It’s so stupid. Not just by 2020 standards, but by 1945 standards. But the content of what you say doesn’t matter much as long as you say it with enough fury, conviction, and disregard for what others think.

I have another theory: I believe most people (myself included) have this empty socket in their brain. We are constantly looking for an authority to plug into that empty socket, if only for a little while. The appeal of strongmen like Patton is one manifestation of this… but so is our obsession with celebrities… or even the popularity of concerts and clubs.

All of which has clear implications for persuasion. While doable, it might be hard to get to Patton-like levels of opinionatedness and charisma in real life. But if you’re writing, say a sales letter, then you can definitely whip yourself up into the right kind of certainty and frenzy, and channel that across the page.

Speaking of writing sales letters and authority, I listened to an interesting discussion today between four top copywriters. They were Stefan Georgi, Chris Haddad, Justin Goff, and Dan Ferrari.

Odds are, you’ve already watched this discussion. But if you haven’t yet, it’s worthwhile. There’s nothing tactical being discussed on this call, but there’s a lot of behind the scenes thinking that might interest you if you’re into copywriting or persuasion. Here’s the link:

https://www.youtube.com/watch?v=ThUusBt1dIM

The persuasion moral of the cock and the jewel

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Let’s start with a short story:

“A COCK, scratching for food for himself and his hens, found a precious stone and exclaimed: ‘If your owner had found thee, and not I, he would have taken thee up, and have set thee in thy first estate; but I have found thee for no purpose. I would rather have one barleycorn than all the jewels in the world.'”

If the old English puts you off, I can understand. And I’m sorry. Please don’t keep reading in that case.

If you’re still with me, what would you say is the moral of this story? Think about it, and we will get back to it in a second.

Meanwhile, let me tell you this is one of Aesop’s fables.

Aesop’s fables have been used for thousands of years to give pithy illustrations to situations we’ve all experienced but we don’t have a good and short name for. Like sour grapes. Or the boy who cried wolf. Two more of Aesop’s fables. I bet you know what those two mean.

But what about the cock and the jewel above? To start to answer that, let me first share a quote with you from a book I’m reading about analogies, written by one John Pollack, and titled Shortcut:

“The degree to which an analogy is or is not ‘accurate’ in a given circumstance is irrelevant, it is the feelings and ideas they evoke that makes them so powerful.”

Fact is, we humans love stories and analogies and fables so much that we are really not too critical about them. We accept the implied meaning and we take it for granted.

Of course, that’s good news for persuaders, influencers, and manipulators of all stripes. As one magician of persuasion, Gary Bencivenga, wrote a while ago:

“This process of transferring the qualities of one thing into another takes place instantly, bypassing critical analysis and resistance. All you do is compare A to B in an effective way and voila! your point is made instantly without disagreement.”

There’s good science behind why this is so, but I won’t go into that now, because I am so concerned with the cock and the jewel.

What does this fable really mean?

The best I can do is to point you to an article titled “The Moral of the Story.”

It was written a couple years ago by an actual poet named Anthony Madrid. If the mention of poetry scares you, as it scares me, then I want you to take a deep breath and relax. Because Anthony Madrid’s articles are all easy to read and fun, and they are mind-opening if you’re interested in language.

​​So here’s “The Moral of the Story,” which explains the moral of the “Cock and the Jewel,” or rather, the half dozen contradictory morals that have been scratched up over the centuries:

https://www.theparisreview.org/blog/2018/11/21/the-moral-of-the-story/

Machiavellian logic applied to your next sales letter

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“Because this is to be asserted in general of men, that they are ungrateful, fickle, false, cowardly, covetous, and as long as you succeed they are yours entirely; they will offer you their blood, property, life, and children, as is said above, when the need is far distant; but when it approaches they turn against you.”
– Niccolo Machiavelli, The Prince

Direct response marketing doesn’t expose you to the most noble parts of the human soul.

Fear… greed… shame… vanity… these are the lowest common denominators we appeal to reliably in order to close the sale.

Sometimes it’s clear which of these appeals you have to go with — your offer or your market simply says so.

But what if you have a choice? Are some of these snarling, slobbering, psychological gremlins stronger than others?

Well, Niccolo Machiavelli, who would probably own many direct response businesses had he lived today instead of in the 16th century, has something to say about general human nature in his quote above.

Men are fickle and swayed by the present moment, says Machiavelli. In other words, just because someone starts, say, writing a book today, that doesn’t mean he will continue to work on it next week. And vice versa. Just because a man will suffer from a hangover tomorrow, that doesn’t mean he won’t drink tonight. So let’s take that as the first axiom of Machiavellian mathematics:

Present >>> Future

Moving on. Here’s a second Machiavelli quote:

“And men have less scruple in offending one who is beloved than one who is feared, for love is preserved by the link of obligation which, owing to the baseness of men, is broken at every opportunity for their advantage; but fear preserves you by a dread of punishment which never fails.”

What is Machiavelli saying here? Maybe I’m reading into it, but it sounds like he’s saying people are motivated more by negative emotions than by positive ones. Or in precise mathematical notation:

Pain >>> Gain

Of course, there are going to be exceptions to this. Some individuals and some markets will be immune to these nasty Machiavellian laws. After all, people volunteered to cross Antarctica by sled 100 years ago.

But don’t bet the house on it. Most of the time, if you’re in doubt, remember the two axioms above. And in particular, remember it will take an enormous amount of future gain to outweigh even a little bit of present pain.

Soothing the shame-filled sailor

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If Billy Budd is real, I haven’t met him in my 39 years on this planet.

Billy Budd, as you might know, is the eponymous main character of Herman Melville’s last novel. He’s “the handsome sailor,” which is shorthand for saying he is beautiful, brave, optimistic, strong, kind, likeable, healthy, and noble.

Quite a combination.

Not often seen.

Especially in real life.

For example, I’ve only ever come across a few people — fewer than 5, either men or women — who I thought qualified to be a real-life Billy Budd. And that was only at first sight.

Because whenever I got a chance to know these people better… it turned out they were not really “the handsome sailor.” These perfect-seeming people all had secret problems, conflicts, and scars lurking beneath the surface.

And so it is with all of us.

All of us have problems. Usually bunches of problems.

​​And along with these problems, there’s almost always shame. ​This shame doesn’t have to be conscious. But it’s there. And it’s powerful.

That’s why a hackneyed copywriting phrase crops up in so many sales letters, year after year. You might think this phrase is hokey… but it works. It soothes shame, cleanses sins, and opens up the reader to the possibility that their problem can be fixed.

Do you wanna know the phrase? Here goes:

“It’s not your fault.”

Try using this phrase in your copy in some form. And watch your conversions rise like a sail in a full breeze.

Because like I said, most of us are not handsome sailors… we’re shame-filled sailors. Not that that’s all bad. In Melville’s book, Billy Budd pays for his perfection with his life — though he dies a noble, admirable death. But who wants that?

The original live recording of Purple Rain

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After Prince died in 2016, a bunch of Prince videos suddenly flooded onto YouTube. These included both the legit, MTV videos, which Prince wasn’t allowing on YouTube before, as well as crazy bootleg recordings of various Prince concerts.

Among these, you can now find the original live recording of Purple Rain.

​​It turns out the album version, the same one that’s in the movie, was really recorded live in 1983 at a benefit concert in Minneapolis. I find this pretty incredible — but it’s a testament to how tight of a band Prince ran and how crazy talented they all were.

I think there are a bunch of persuasion and influence lessons that could be squeezed out of this whole story and the live performance that Prince and the Revolution put on. ​​But for today, I want to give the persuasion stuff a bit of a break — something I called “persuasion bleach” in an earlier email.

Instead, I just want to share with you the original live recording of Purple Rain.

​​If you’re not a Prince fan, this probably won’t be meaningful to you and you will want to pass. ​But if you do like Prince or at least his particular song, then this original version is definitely worth a look and listen. ​​Here it is if you’re curious:

https://www.youtube.com/watch?v=kE8gScJGfa4

The most valuable persuasion tool?

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It’s a tense moment.

Carrol Shelby is sitting in the wood-paneled lobby of the great man’s office, waiting to be admitted. While waiting, hat in hand, he sees a curious sight:

A courier brings up a Ferrari-red folder and hands it off to one secretary… who hands it off to a second… who gives it to a third… who then takes it behind closed doors.

Eventually, the last secretary comes back out and faces Carrol Shelby.

“Mr. Ford will see you now.”

This is a scene from the new Ford vs. Ferrari movie, which I went to see last night.

And while the movie has lots of hot shots of sexy race cars, I thought this scene, and the one that follows, were the most interesting, particularly from a persuasion standpoint. Because once Shelby is in front of Henry Ford II, he has to explain himself.

Shelby was put in charge of developing a new racing car for Ford, and winning an important race. He failed miserably.

“Tell me why I shouldn’t fire you right now,” Ford barks at him.

Instead of answering, Carroll Shelby clears his throat. And he starts talking about the red folder he just saw… and how it had to change a half dozen hands before it could land on Henry Ford’s desk.

“The Ford Company is too bureaucratic,” Shelby is effectively telling Ford, “and that’s not how you build winning race cars.”

Ford is not pleased, but he’s listening. And a few moments later, he is convinced.

“We’re not just good at pushing paper here,” Ford says to Shelby. “Go to war. And from now on you report only to me.”

Now of course, this is a scene from a movie. But I think it’s a great illustration of a valuable — perhaps most valuable — persuasion tool.

Fact is, if you’re not having success persuading somebody, whether that’s a sales situation or any other kind of negotiation… then odds are good you’re not using this massive hammer of influence.

Because I heard one very successful marketer, Travis Sago, call this the most valuable persuasion tool he knows and uses to regularly enter new markets, and eventually make million-dollar paydays.

Travis even said he’d would rather have this tool than a cool $2.5 million in the bank — because with clever use of this one tool, he could easily make that money back.

According to big T, this tool is the best way to nudge people from cold and disinterested… to trusting you and being willing to do what you ask.

So what exactly is the magical and powerful persuasion tool?

​​It’s right there, hidden behind the story of Carrol Shelby and the red folder.

In a word, it’s insight.

In several words, it’s giving your customer/prospect/adversary deeper insight into his own problem.

The Carroll Shelby story is one illustration of how to do this. But if you start thinking about this topic, and looking out for this simple idea, I bet you will start to find other ways to force new insight into your audience. ​​And if Travis Sago is right, then your persuasive powers will explode, even if you’ve got little else going for you at the moment.

2 theories about the turkey and its name

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There are two theories how the turkey got its name:

Theory one says that confused colonizers thought the turkey, originally a native of Mexico, was a type of guinea fowl, which Turkish merchants were already selling in Europe.

Theory two says that the turkey traveled around the world before making its way to England, where it was imported by Middle Eastern poultry peddlers.

Either way, the beast became known as a turkey cock or turkey hen. Eventually we dropped the cock and the hen, got out the cranberry sauce, and the party started.

I bring this up because today is Thanksgiving, and everybody in the marketing space is sending out emails and writing Facebook posts saying, “I’m grateful for you, dear reader.”

Perhaps they really are grateful. Perhaps it’s just the pilgrim bandwagon everybody has to jump on. “You gotta build a relationship with your subscribers!”

Which reminds me of something I read from Travis Sago. Travis is a very successful marketer and one of the very best at building a relationship online with a bunch of people who don’t really know him. Says Travis,

“You don’t make friends by dropping off Encyclopedia Britannica’s at somebody’s house.”

My gut feeling is that you don’t make friends by sending out emails either, as long as their gist is, “I’m so grateful for you, and here’s a coupon for 10% off.”

But what do I know. Maybe I’m all messed up in the head. Maybe I’m just envious, and irritable because I’m dreaming of the pounds and pounds of turkey cock, the ladles of mashed potatoes, the fat slices of pumpkin pie many people will be eating today.

(Where I live it’s unfortunately not a tradition, although I did develop a Thanksgiving tooth during my long life in the US.)

Anyways, if you are celebrating today, happy Thanksgiving. Enjoy your feast. And we will get back to our regular relationship-building program tomorrow.