Bernie Madoff

Madoff’s secret of member management

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I was listening to a podcast yesterday about con men, and I heard the following interesting titbit:

Bernie Madoff, the hedge fund manager/operator of the largest Ponzi scheme in history, would threaten to kick out investors from his funds if they expressed doubts or asked too many questions.

(Podcasts are in general a trash source of information, so I did a bit of due diligence myself. I found a WSJ article from 2008 that corroborates this exact statement.)

Perhaps the significance of this titbit is not really clear to you. So consider for contrast how most people would handle that same situation.

Imagine that you have, say, a club or a membership or some kind of in-or-out thing that people have to pay to be on the inside of.

If a member asked you questions or expressed doubts about the value of what they are getting, what would be your natural reaction?

Think about it for a moment.

I can’t speak for you might do, but I can tell you what I might do.

I imagine my natural reaction would be answer those questions or address those doubts to the best of my ability, and maybe even to ask the member how I could make my thing better and more valuable. In effect, my reaction would be to do the best job I could selling and reselling my offer to that doubting or questioning member.

That is clearly not what Madoff did.

In fact he did the exact opposite. His approach was to appear to want to break up the sale, and kick the doubting investor out of the fund.

The result of this, as the WSJ article put it, was that “Mr. Madoff shifted investors’ fears from the risk that they might lose money to the risk they might lose out on making money.”

That’s something to ponder on, even if you are not a con man, and even if everything you do is completely ethical and above board.

In fact, I found this bit of Bernie Madoff trivia interesting because it is yet another illustration of the apocryphal 11th Commandment of con men, pick up artists, magicians, door-to-door salesmen, etc.

I give that 11th Commandment away via a link at the end of my new 10 Commandments book. In that bonus 11th Commandment, I summarize much of the book, including the underlying principle of what Madoff was doing above, in just three words of powerful influence strategy.

And like Madoff’s strategy above, my new 10 Commandments book, including that apocryphal 11th Commandment, is not only relevant to you if you have criminal tendencies. Here’s a very nice review I got about that from a new reader by the name of Joe Vigliano:

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Life changing?

Yeah, it is. Despite its unfortunate title 🙂 I almost passed on it since I don’t consider myself a con man, pick up artist, magician, etc. Can’t tell you how glad I am that I clicked Buy Now. The information John shares is invaluable for both your personal life and your professional life…especially if that professional life involves influencing others. I’m a kinesthetic reader–i do a lot of highlighting. This book is almost an entire highlight, it’s that good. The information is solid gold and it’s written in an absolutely engaging, entertaining way. If you have the paperback, the pages will be dog-eared from use. Not sure what that looks like on my Kindle. Either way, this is a book to spend time with. Lots of time.

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But you know what?

I’ve been promoting this book for a long while. I’ve been giving you testimonials and curious stories from the book. I’ve been linking to it on Amazon, over and over in my emails, for months now.

If you still haven’t gotten my book, then there’s no sense in me trying to persuade you any more. I officially throw up my hands. This book, life changing or not, is not for you.

So don’t get it. It’s too late. And if I catch you getting it, say, if I catch you signing up for that bonus 11th Commandment, then you’re OUT, off my list, for good.

7 hot systems to get you more referrals than Bernie Madoff

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Here’s something you may not think about:

Bernie Madoff, author of the largest financial fraud in history, started from scratch. Back in the 1960’s, he had just $5,000, which he earned working as a lifeguard and sprinkler installer.

So how did he go from this modest beginning to a $65 billion investment Ponzi scheme?

Through referrals, of course.

His father-in-law, an accountant, referred friends and their relatives to Madoff, and this got the snowball rolling.

Unfortunately, you and I don’t have Bernie Madoff’s father-in-law to press-gang clients for us. But we have the next best thing.

And that’s Jay Abraham, whose stuff I’ve been listening to non-stop the past few weeks.

One of Jay’s products is “93 Referral Systems” — basically a bunch of people at a Jay Abraham seminar, coming up to the microphone and sharing what their business is and how they get referrals.

I haven’t yet finished all 93, but here are 7 that have stuck with me so far:

#1. The “ultimatum” referral system

In a nutshell: Refuse to do business with people unless they make referrals

A dentist in Australia decided to make his entire practice more upscale and based on referrals. So after interviewing a potential new patient to his exclusive practice, he would simply tell them that referring two equally qualified leads was a requirement for getting in. Result? Patients would ask him, “Can I refer only two people?”

#2. The “steak and eggs” referral system

In a nutshell: Approach complementary businesses and give them a cut for referrals

A heating-and-cooling company started a new duct cleaning side business. They went to their competition (in heating and cooling), and asked for referrals for duct cleaning in exchange for a cut.

#3. The “golf buddy” referral system

In a nutshell: Join an affinity-based association

Some kind of unidentified consultant joined the National Speakers Association, and got many referrals from within the organization itself.

#4. The “welcome to our cult” referral system

In a nutshell: Whip people up into a frenzy and ask them to refer your business

This one is from Jay’s own seminars. Once somebody signed up, the salesperson would ask them, “How serious are you about this?” The salesman would then point them to phones in the back of the room, and ask them to call three people and tell these three people about the decision to enroll in the seminar.

#5. The “lobbyist” referral system

In a nutshell: Hire lobbyists to reach the unreachable

An investing company was looking for institutional investors. So they found retired executives, got them to sign a contract saying they’d get 10% for referring people they knew.

#6. The “fog of war” referral system

In a nutshell: When somebody buys, contact people near them

This one’s from a Lexus dealership. When they delivered the car, they’d ask if it’s ok to mail all the neighbors. They would then send direct mail to the neighbors, telling them how Mr. Jones down the street just got a brand new Lexus in a “neighborhood beautification program” and how they can too.

#7. The “Frank Bettger” referral system

In a nutshell: Get your clients talking about themselves so they like you

A life insurance salesman would take his clients out to lunch. He’d kick things off by using a Frank Bettger classic: “How did you get started in this business, Mr. Bejako?” He’d then transition to asking for advice. “What could I do to be more successful?” And then he’d go for the kill. “I’d love to expand my business and get more referrals. Who are some high-quality prospects you’d call on if you were in my shoes?”

And there you go. 7 proven systems to get you more leads, more business, and more, more, more munny.

And in case you’re wondering…

Yes, I too will start implementing some of these referral systems right away.

So if you need sales copy written, get in touch with me and we can talk. Just know that I only take on new clients if they can refer two equally qualified prospects for my copywriting services.