3101 SW 34th Ave Suite 905-262 Ocala, FL 34474

Telephone: 800-290-2817 www.DobermanDan.com FAX: 866-226-6122

Issue #25

January 2013

You are surrounded by simple, obvious solutions that can

dramatically increase your income, power, influence, and success.
The problem is, you just dont see them.
- Jay Abraham
Dear Friend and Subscriber,
Raise your glass on high and lets toast a milestone.
Well, at least I will be toasting.
The occasion?
In addition to ringing in a new year, Im also
celebrating the two-year anniversary of this noble little
endeavor known as The Doberman Dan Letter.
Its been an interesting ride.
Let me take a quick assessment of what has been
spawned by the ready, fire, aim decision made a little
over two years ago when I sat down to two-finger type the
premier issue of the DDL.

Four people have sent letters saying the DDL has

helped them battle bouts of depression and given them
hope for the future they thought they had lost. One
individual shared he was actually considering
suicide... but one of my issues led him to getting the
help he needed. (Heck, to be totally transparent with
you, its even helped battle my own depression
demons.)

At last count Ive received 46 letters (REAL hard copy

sent-in-the-mail letters) telling me how the DDL has
helped... start new businesses, increase businesses,
get more customers, get more website traffic, make
more money, open peoples eyes to new opportunities,
etc.

Then there are the letters that say the DDL has helped

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Copyright 2013 Daniel C. Gallapoo

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people get their financial house in order, prepare

for the future, reconcile broken relationships, manage
stress... and a few other non-monetary things I cant
seem to recall right now.

My dream of a true Marketing Camelot became much

closer to reality with the founding of my Gold
Mastermind Mentoring group last year. A great big
thank you and shout out to all my GMM homies:
-

Francis Ablola
Allen & Erin Baler
Brian Hanson
James Jones
Ben Morris
Brian Ochsner
Shawn Phillips
Brian Keith Voiles
Preston Christensen
Steve Young
Mike Ledeboer

You are all ROS (ray of sunshine) people and Im

honored to be working with you.
I would love to tell you my dream for this worthy
undertaking has been realized... but that wouldnt be 100%
true. Ive made soooo many mistakes... and I havent
accomplished even 10% of my vision. But Ive accomplished a
helluva lot more than I would have if I were still thinking
about, thinking about publishing a newsletter.
This crazy little newsletter has been life changing...
for me and several thousand other people, too. (Im
including all the people who read it thanks to one
ethically challenged subscriber who chooses to illegally
distribute my copyrighted intellectual property throughout
the world.)
If Ive been remiss in expressing my gratitude, let me
take care of that right now:
Thank You For Taking
This Journey With Me!
I appreciate you... and I hope to receive a good old
fashioned snail mail letter from YOU this year sharing
exciting things happening in YOUR life.
The Doberman
Dan Letter

Copyright 2013 Daniel C. Gallapoo

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Cuz you deserve it.

You really do.
Now go plant your booty in a comfy chair, grab your
favorite beverage and let your Uncle DD tell you a
titillating tale. (My tale will be much more titillating if
your choice of beverage is an adult libation.)
Ahem...

nce upon a time, there was a man named King

Gillette.

(Notice how I used a drop cap and old-timey font

just like in a real storybook? Just having a little fun.
You should see the bizarre and crude stuff I write to amuse
myself that never gets published.)
Gillette was known as an eccentric fellow... but by
all accounts, there was nothing really special about him.
Nobody expected much more from him than they expected
from the millions of other human beings inhabiting the
earth at that time. They would be born, consume, produce a
new generation of little do-nothing consumers, and die...
without ever improving this world by even one teeny-tiny
iota. Most were expected to live their entire lives without
leaving even the most minuscule mark upon humanity. Sadly,
the exact same as we expect from most people today.
But... none of that prevented King Gillette from
becoming a HUGE success... albeit rather late in life.
A bit of back-story on our protagonist:
Gillette was a traveling salesman for the Crown Cork &
Seal Company, which marketed the first major disposable
product in America...
Bottle Caps!
Yeah, these handlebar mustache-wearing old timey dudes
were making a frickin fortune on mundane ole disposable
bottle caps.
But I digress. (And I temporarily broke the Alistair
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Cooke-type character I was trying to emulate while

waggishly weaving this whopper of an anecdote.)
[PREGNANT PAUSE]
Unlike the rest of his colleagues at Crown Cork &
Seal, Gillette had a dream. (It all starts with a dream,
doesnt it?) He wanted to be much more than just a
traveling salesman. Day in and day out, he vividly
visualized himself a victoriously wealthy man with his own
business empire.
But unlike most people who dream of a better life,
Gillette actually did something about it. He saw the
success his employer was enjoying selling disposable bottle
caps and he wondered how he could model their success in a
business of his own. But he was clueless about exactly how
to do that to build a successful business for himself and
his posterity.
After racking his brain for weeks without success,
Gillette decided to use his own version of Gary Halberts
famous potato box secret I shared with you back in the
December 2011 issue.
Instead of rooting through a massive swipe file, he
painstakingly pored over the dictionary, word by word,
looking for an idea... any idea. A spark of inspiration for
something he could invent, make, or publish... and sell
over and over again to his customers... just like Crown
Cork & Seal was doing with their disposable bottle caps.
Gillette had not gotten very far with his potato box
inspiration search when an idea hit him on the chin...
literally.
He was shaving one morning with one of those straight
razors all the barbershops of the time used. The blade had
become dull so he had to go out and get it sharpened.
Thats when his breakthrough came...
A New And Safer Way To Shave!
In his own words...
I saw it all in a moment... the way
could be held in a holder. Then came
sharpening the two opposite edges of
of steel, thus doubling its service,
The Doberman
Dan Letter

Copyright 2013 Daniel C. Gallapoo

the blade
the idea of
a thin piece
and then
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came the clamping plates for the blades, with a

handle centered between the edges. I stood there
in a trance of joy.
Gillette went to work developing a safety razor with
disposable blades. That way he would only have to get a
customer once. Then he could continue to sell them
replacement blades over and over... for years and years.
What he didnt anticipate were the challenges that
followed. You see, ideas are a dime a dozen. A great idea
and $50 will buy you a small cup of coffee at Starbucks.
The REAL value is in the implementation of a great idea.
The implementation part is where Gillette ran into his
first roadblock. He knew practically nothing about creating
a mechanical product... and even less about working with
steel. With materials and tools bought in a Boston hardware
store he cobbled together a crude model.
Was Gillette heralded as a brilliant inventor and
future business mogul who would establish an empire that
would prosper for the next 118+ years?
Ummm... not quite.
He was criticized, ridiculed and laughed at... even by
the people you would most likely expect to support him...
his friends and family. (If youve ever attempted to
stick your head above the crowd this probably sounds
familiar.)

Whos laughing now?

From 1895 to 1900, Gillette couldnt get any technical

advice from experienced craftsmen to improve his invention.
Instead, they preferred to criticize and dismiss him as a
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weirdo. And... instead of financial assistance from the

potential investors he approached, all he ever got was
discouragement and criticism.
For 5 long years the only help Gillette had was his
own persistence and unwavering faith. Five l-o-n-g years of
continuous ridicule and rejection... and I imagine what
appeared to him as darn near zero progress.
But he persisted in spite of everything.
Then, as often happens when one has a single-minded
stubborn determination to succeed no matter the obstacles,
Gillette finally got a break. Two businessmen introduced
him to William E. Nickerson, a graduate of the
Massachusetts Institute of Technology. Nickerson saw the
potential of this new-fangled safety razor and perfected
the device for Gillette. A company was formed the next year
and stock was issued to raise money.
Investors were skeptical at first, but a PWM (player
with money) caught the vision and gave Gillette the seed
capital he needed. Finally, after 8 painfully long years of
rejection and disappointment, in 1903 the company started
production in a tiny, dingy and dark room in Boston.
American men soon began to respond to the safety, timesaving and money-saving themes in Gillettes early ads.
An interesting little sidetrack: Have you ever noticed
that many of the old-timey ads used direct response style
copy? Like this one:

And this one:

The Doberman
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Copyright 2013 Daniel C. Gallapoo

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Back to our titillating tale: (I really like saying

titillating.)
In 1904, Gillette sales totaled 90,844 razors and
123,648 blades. The following year, four times as many
razors were sold and ten times as many blades. By 1917 the
company was selling more than 1 million razors a year and
120 million blades! Not bad for an eccentric guy with an
idea laughed at by all the business experts of the day,
huh?
A true entrepreneur, King C. Gillette was always
looking for innovative marketing ideas to get his safety
razor into the hands of more and more customers. The advent
of World War II and the huge influx of new army recruits
turned out to be one of Gillettes biggest marketing
breakthroughs. He came up with the idea of gifting one of
his safety razors to every man entering the armed forces.
You see, Gillette knew he could take a loss on the razor
because he would make it all back (and more) with the
ongoing sales of the blades. His marketing team improved on
this idea and instead of giving away the razors and taking
a loss on the front end, they sold the government 4.8
million razors at cost and let Uncle Sam present them to
the new military recruits.
Imagine the continuity income guaranteed to Gillette
from acquiring...
The Doberman
Dan Letter

Copyright 2013 Daniel C. Gallapoo

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5 Million New Customers...

Practically Overnight!
The best part? Gillettes blades were the only ones
that fit his proprietary safety razor, guaranteeing years
of ongoing income.
After the war, the millions of soldiers introduced to
the new habit of self-shaving continued this practice after
returning to civilian life, providing King Gillette with
10s of millions in continuity income.
In the process of building his business empire,
Gillette had become a master of marketing. While most
business men only focused on one-shot sales (much like
business people of today), Gillette was one of the few
businessmen of his day who understood lifetime customer
value... and understood the back end was where the money
is really made.
In fact, just before the patents on his safety razor
were about to expire in 1921, Gillette thwarted a flood of
imitations by lowering the minimum price of his razor from
$5 to $1. You see, Gillettes experience proved it wasnt
important to make a profit on the razors... and he could
even afford to go negative. He knew almost all of his
income came from the sale of the blades.
Today the Gillette Company manufactures 10 million
razors a year. And God knows how many replacement blades
they sell every year. The back end potential simply boggles
the mind, doesnt it?
Have you picked up on the point Im trying to drive
home with my titillating tale? (I cant seem to stop saying
that word.)
You dont make money getting a customer...
You Make 90% (Or In Many Cases 100%)
Of Your Profits Selling To An Existing Customer!
So if you focus most of your time and money on just
getting new customers, youre stepping over dollars to pick
up pennies... and missing out on a literal fortune.
Amazingly, every business Ive been hired to work with
hasnt been working their back end enough to make maximum
income from their customer base. Not a single one!

The Doberman
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Copyright 2013 Daniel C. Gallapoo

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And well talk about how to correct that problem in

just a minute. But before we get into that (and it could
make you obscenely wealthy) lets talk about another HUGE
mistake I see most business owners making thats preventing
them from getting rich:
Mistake #1
Believing Good Marketing
Can Overcome Bad Math
A fatal mistake I see a lot of business owners
making... even people who should know better.
Can we talk like rational adults for a minute? The 1%
(or less) who can think logically and ignore that annoying
bullshit fairy who, since you were born, has been filling
your cranium with lies like:

Santa Claus, the Easter Bunny and the Tooth Fairy are
real living entities...

There really is such a thing as a free lunch...

You can think yourself rich... while sitting on your

ass in front of the idiot box drinking beer and eating
pizza. (If only!)

The world really does owe you a living... and...

That charismatic and likable sociopath with perfect

teeth, Armani suit and teleprompter is going to make
sure you get everything the world owes you.

Are you one of the precious few who have decided to

pull back the curtain and face the truth, no matter how
painful it may be? Even if it means turning your back on a
lifetime of conditioning? Great! Then youre one of the
infinitesimally tiny number of human beings intelligent
enough to evaluate FACTS (not beliefs backed by zero
evidence) and realize the following unequivocal truth:
No matter how much youre in love with your product...
No matter how good of a human being you think you
are...
No matter how much favor you think youve gained with
your supreme being of choice because of your faith or
works...
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No matter how much you think the world desperately

needs what you have to offer...
And especially no matter how much of a rock star
marketer or copywriter you believe you are...
2 + 2 Will Never Ever
EVER Equal 5!
Amazing I have to explain this to adults, isnt it?
Youd probably be surprised at how often I have to
explain it. Youd be even more surprised if you knew the
famous people (well, famous in our little world) Ive had
to explain this to. Recently that includes a literal
household name who, in the past, had built a $100 MILLION
business. For some reason, he seemed to believe his past
success could overcome bad math in the new venture hes
trying (unsuccessfully) to get off the ground.
What am I ranting about?
You Cant Build A Business
Based On Bad Economics!
For a direct response business (online businesses are
direct response businesses - duh!), you need a minimum 6to-1 mark-up. In other words, your selling price should be
at least 6 times your product fulfillment cost. For our
purposes, fulfillment cost is your product manufacturing
expense plus whatever other costs are involved in getting
your product into the hands of your customer.
6-to-1 is the absolute minimum. 8-to-1 is my
preferable minimum. Ideally, if you want to grow your
business as quickly as possible... and as big as
possible... you should have a 10-to-1 mark-up... or even
more.
These arent just random numbers I dreamed up in my
demented cranium. Theres a very important reason for all
this. You see, anything less than 6-to-1 and youre going
to have a tough row to hoe. In fact, you may not even have
a real business. Instead, youll have a revolving cash
machine. Whats a revolving cash machine? Its when you
see the cash come in... and watch as it all (and possibly
more) goes out just as fast (or faster) as it came in.
Want to siphon off a little bit for yourself? Good
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Copyright 2013 Daniel C. Gallapoo

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luck with that. Youll have to decide which expense youll

cut to generate a teeny-weeny slice of profit. While this
allows you to take a few bucks out of your revolving cash
machine for yourself, inevitably it contributes to a
downward trend that lowers your incoming cash flow... which
makes it even harder to keep this ruse of a business
going.
Anything less than the minimum mark-ups weve been
talking about is going to severely limit what you can
afford to pay to acquire customers, therefore significantly
suppressing business growth. Or... it will slowly and
painfully kill your entire business over time.
An example? Alrighty. Lets say you sell your thang
for $100... whatever that thang may be. (For all the analretentive spelling nazis, I meant to spell it that way.)
That means your fulfillment costs cant be a penny more
than $16.67. Ideally, your fulfillment costs on a $100
product should be $10 or less. Thats one of the many
reasons I like info products. A 10x mark-up is chump
change. 100x, 1,000x... or even a 10,000x mark-up is quite
common.
Ignore my advice at your own peril. Many a brilliant
marketer with a huge marketing budget -- and even multiple
millions in venture capital -- has gone bust arrogantly
believing they could be the first person in the history of
the world to overcome faulty arithmetic.
Mistake #2
Failing To Create Rivers Of Revenue
From Your Customer Base
This is the entire point of the tale (which I hope you
found titillating) I just shared. This is what you want to
set up with some (or all) of your products and services...
endless rivers of revenue (ROR).
King Gillette created one of historys greatest
marketing models because he set up endless rivers of
revenue. Mobile phone companies use the same strategy. They
sell you a cell phone at or below their cost... and in some
cases, they can afford to give it to you... because they
make money on every phone call. Many times for years and
years. Believe you me, they know almost to the day how long
they keep a customer on average. And based on that
information, they know exactly how much they can afford to
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spend to...
Buy A Customer!
Thats really all youre doing with your advertising
and marketing, isnt it? The better your mark-ups, and the
better you know your back-end numbers, the more customers
you can afford to buy. And the guy or gal who can afford to
buy a lot of customers -- as quickly as possible -- is the
person who will dominate that market or niche. Everybody
else is left to fend for the scraps.
Speaking of great back-ends... (no, not Kim Kardashian
you pervert)... how about the Apple iPod? Sure, its a
great piece of technology... but its real raison dtre
is to sell you songs for 99 cents a piece through the
iTunes music store. That is how they really make money...
and theyve already sold over 15 BILLION songs at 99 cents
a pop!
Another King of marketing, Bob King, formerly the
rainmaker marketing guy at Phillips Publishing (a wildly
successful newsletter publisher) used to tell all his hired
gun copywriters...
Were not in the newsletter business...
were in the renewal business!
Very sharp guy, Bob King. He understood that when you
build long-term relationships with your customers instead
of wham-bam, thank you maam one night stands, you dont
have to reinvent your marketing wheel every year. You can
begin each year secure in the knowledge that a big portion
of your income is already locked in for the year because
the lions share of your customers keep coming back to buy
more.
Another big benefit of this rivers of revenue (ROR)
strategy? Your cost of acquiring a customer gets amortized
over many years worth of purchases, driving your average
cost per sale way, way down.
My beat-a-dead-horse point is this:
Dont think in terms of just one-shot opportunities to
make money. A one-shot sale or just one successful frontend promotion is not a business... its a money making
opportunity. And theres a BIG difference between business
builders and opportunity seekers. Business builders make
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money long term. Opportunity seekers are always running in

circles... jumping from one fad to the next. (Remember all
the poor suckers who jumped on the Google AdSense
bandwagon?)
A better way to think is this: How can I leverage a
one-time transaction into a permanent and self-renewing
river of revenue (ROR) from each and every customer? This
kind of thinking will make an enormous difference in the
wealth you acquire over the life of your business. And...
it just may establish...
An Uber-Successful Empire
That Lasts Your Entire Lifetime,
Your Childrens Lifetimes... And...
Your Childrens Childrens Lifetimes!
Just like King Gillette.
Alrighty, Ive talked about why you should create
RORs... now lets talk about how.
Back in January of 2012, one of my Gold Mastermind
Mentoring members started a biz on his kitchen table with
nothing but his brain and a laptop... and his wifes
superior brain.
Hes now getting 500 or so new customers a day at an
average price point of $65. He has ZERO fulfillment costs
if a customer chooses the digital delivery option. If they
choose the hard copy version he only has a few bucks
fulfillment costs. Multiply 500 new customers a day by 30
days... bringing in $65 each on the front end... and...
well... you do the math. It may have started as a kitchen
table business but it aint no small potaters now.
With my help weve started to work on improving his
back end income. With a front end like that, hes going to
make CRAZY cash once we start maximizing his back end. One
of the options weve been exploring is developing one of
these RORs Ive been rambling on about. Lets explore a
worst-case scenario and see how that might affect his
bottom line.
500 new customers per day x 30 days per month =
15,000 New Customers A Month!
Now lets say the conversion into his continuity
The Doberman
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Copyright 2013 Daniel C. Gallapoo

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program is absolutely horrid. We only get 2% of those new

customers each month to sign up for continuity.
15,000 x 2% = 300 customers per month in continuity.
Actually, with the strategy I have in mind, I expect
well convert anywhere from 25% to 30%. Hed probably get
more than 2% conversion into continuity even if all he did
was put a one-line upsell on his check-out page. But were
playing with a worst-case scenario in this example so well
keep the conversion percentage ridiculously low.
Lets assume an average $30/month price point. I
actually think we can get closer to $49... but were being
conservative in this example, remember?
300 customers per month in continuity x $30 = $9,000
river of revenue business added each month.
Dont be a marketing Pollyanna like I used to be and
assume most of your customers will stay in your continuity
program for years and years. Some will. Others will stay on
for several months... and others will leave almost as fast
as they came in.
So in this example, lets figure on an average stick
rate of 3 months. (Actually, with my stick program in
place, I expect his retention will average at the very
least 5 months.)
Lets play with these numbers and see what the next
year could look like when this bad boy starts to build
exponentially:

This spreadsheet allows us to see the difference in

potential income with two different price points, $30 and
$49 in this example. Im showing a 33.33% drop off each
month to arrive at our average retention of three months.
Check this out:
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Dan Letter

Copyright 2013 Daniel C. Gallapoo

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This shows the cumulative total of customers in

continuity and additional income for the first four months.
Keep in mind, if my client bumps up his front-end
acquisition numbers, hell have a bump in continuity
customers, too... even at this crappy 2% conversion.

An extra $270k with a horrible conversion to

continuity and a so-so stick rate. Worth doing to put an
extra quarter million in your pocket? Id say so.
Heres the first 4 months at the $49 price:

And total yearly revenue at $49:

Things are starting to heat up a bit, arent they? Now

lets leave the price points and stick rate the same but
bump up the conversion to the low end of what I think we
can really get... 25%:

Lets look at the end of year 1 with a 25% conversion:

The Doberman
Dan Letter

Copyright 2013 Daniel C. Gallapoo

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Now lets keep everything the same as the previous

example but bump the stick rate one additional month:

If youd make an extra 7-figures when your continuity

customers stick one additional month, what would you do?
Would you send a couple direct mail pieces and maybe have
somebody give em a quick phone call? Maybe bribe them with
a free gift? Youd be stupid not to, wouldnt-cha?
What are we going to sell these folks every month?
Thats the easy part. Heres a short list: Monthly
newsletter, CD, DVD, software, teleseminar, webinar,
consulting, done-for-you marketing package, membership
site, nutritional supplement... heck, anything that
eventually goes down the drain or toilet.
Im out of time. See ya next month.
All the best,

Doberman Dan
P.S. After 19 years in direct marketing Ive never seen it more
difficult or more expensive to acquire a new customer. Its
CRUCIAL you use ALL possible methods to maximize your back end...
or soon, you may not even be in business. So next month Im going
to give you some more maximum money secrets. Im also going to
reveal customer service & merchant account challenges youll
probably deal with when selling on continuity. Ignore these and
youre toast. Ill also reveal a secret copywriters & consultants
can use to create RORs by annuitizing their work. Pax vobiscum.
P.P.S. One more for the road:

The Doberman
Dan Letter

Titillating.

Copyright 2013 Daniel C. Gallapoo

DobermanDan.com