John Jantsch: Hello and welcome to another episode of the Duct Tape Marketing Podcast. This is John Jantsch, and my guest today is Scott McKain. He is a hall of fame speaker and author of a book we’re going to talk about today, ICONIC: How Organizations and Leaders Attain, Sustain, and Regain the Ultimate Level of Distinction. Scott, thanks for joining me.
Scott McKain: John, it’s great to be with you. Thanks for having me, and I really appreciate the chance to bat some ideas around with you today.
John Jantsch: I guess we better get the definition out there. What is an iconic organization? I think that’s the name of the first chapter, too, but let’s get a baseline here.
Scott McKain: You bet. It’s kind of a funny story. I was doing some work with Fairmont Hotels, and I was having lunch with the CEO/GM of the Fairmont Scottsdale Princess. They had gone through all the steps of my previous book, which was Create Distinction, that talked about how you stand out from your competitors in your marketplace. He asked a question I’d never, ever thought of. He said, “Okay, we’re distinctive. What’s next?” Well, I haven’t gotten that far. He jokingly said, “Well, next we’ll be iconic.” It was like the light bulb went on over my head. What it really occurred to me is there are some businesses that are distinctive. The definition of that, to me, is that you stand out from your competitors in your specific marketplace. But there’s a higher level that we all know.
Scott McKain: Iconic means that you’re so good at what you do, you transcend your own respective discipline or your own respective industry. You become an example that we could all look up to and that we could all follow. There’s things that you’re doing in your business that, no matter what I’m doing in mine, I could learn from how you’ve separated yourself from the competition. To me, that’s the ultimate level of distinction, when your model not only for how something in your specific industry should be, but it transcends that so you become a model of how all of us could create a better culture, a better customer experience, or better marketing, or whatever it might be.
John Jantsch: Well, and would you say that there are a lot of businesses out there that, and we’re going to talk about the elements, I suppose, when we get farther in here, but would you say there are a lot of businesses out there that they’re great businesses? They’re run great. They have great products, great services, great revenue model, but they don’t necessarily have the raving fans that go along with iconic. Or I should’ve asked that the other way. Is that an element that really takes you to the iconic level?
Scott McKain: Yeah, I think so. It’s hard to think of an iconic business that their customer base is lukewarm. When we think of iconic companies, yeah, the raving fans analogy, I think, is spot-on because there’s something about what they do that inspires passion from their customers, which, obviously, the end result of that is repeat business and referral business, which is all critical.
John Jantsch: Yeah, and I would say another element, of course, is they generally are not the low price leader either, are they?
Scott McKain: Yeah, it’s hard to find an iconic business that got there by stacking them deep and selling them cheap. You know? That’s one of the things that I certainly learned. Interestingly enough, it’s partly because that status has separated them from the competition and enables them to charge a premium price. Here, recently, Apple just announced the new line of iPhones. It’ll be covered on network news. Well, goodness, wouldn’t we love to have that? One of the things I tried to do in the book is use examples other than Apple, and Starbucks, and Southwest, and all of those, but it’s kind of a universal example. They’ve separated themselves from the competition to such a degree that we all joke about the Apple tax. There is a premium that you pay for what they do.
John Jantsch: Yeah, I was actually going to ask you that. I mean, can a small, local business be iconic?
Scott McKain: Yes. Oh, absolutely. I think so. For example, a couple of the examples I use in the book is a chimney sweep in Nashville that has built a multi-million dollar business that it was recently featured on CNBC in a series they did called Blue Collar Millionaires. I looked at how he became iconic as a chimney sweep. There’s a restaurant in Indianapolis, St. Elmo’s, that I use as an example. It’s not just the restaurant you’d like to be if you were in that business in Indianapolis. It doesn’t matter what you’re doing. You can learn from and model your business after St. Elmo’s because they’re truly iconic in that area. We can talk about some of the things that they have done to stand out, but they are truly… They’ve transcended their own industry to become just legendary in those local communities.
John Jantsch: So, really, step number one, I mean, you have to have this huge differentiator, I think. I mean, that’s probably step number one. But is the differentiator, in your opinion, that takes somebody to the next level, not just that they do it better, or that they have a funny name, or something that people talk about, is there an element where they’ve somehow changed the context, maybe, even of their entire industry?
Scott McKain: That’s a great question. Yeah, I think so. That’s part of why I’ve really focused on the word distinction. I don’t think that different is better. If I slap every customer in the face, I’m different. Right? I think many times, when we look at smaller businesses, and you say to them… I mean, this is one of the things that I do to program it, that I help sponsor every year, called the Ultimate Business Summit. We bring in small business people and, okay, so what makes you different? They say things like, “Our logo is red.” Or, “We really treat our customers great.” Well, like your competition isn’t that clear differentiating factor has to be something that has traction in the marketplace. To me, distinction is a higher level of that. It is something that is of value to your customers first, which is what drives the equity in your business.
John Jantsch: Let’s talk about the cornerstones of distinction, which are a part of your iconic framework: clarity, creativity. You can list the others.
Scott McKain: Yeah, communication and a customer experience focus are the four cornerstones of distinction based on the earlier work. You know, John, I bet you would find the same in your experience, and that is that people think they’re clear, and they’re a long way from being clear.
John Jantsch: Yeah, I mean, when I read this, on my notes here for people that don’t realize I actually do make notes for, I just don’t make up these questions, is that I really think those are marketing strategies. Aren’t they? I mean having clarity, and creativity, and… I mean, that’s the essence of a marketing strategy. Isn’t it?
Scott McKain: Yeah, it truly is, but I would also suggest that I think that’s one of the things that good marketing, and that’s why I’m such a fan of your work, is that the elements of good marketing are, certainly, the elements of good leadership. They’re the elements of building a good culture in your business. The congruency of what you market and what you execute is what establishes, to me, the integrity of the business. Yeah, it’s so true. I mean, no one is loyal to a generic. You know? But yet so many times, we do that too. I get it. My parents had a small business, and you didn’t want to turn any customer away. You want to be of service, and it’s coming from the right place. I mean, it’s coming from a sincere desire to serve and a desire to succeed. But so many times, we try to be all things to all people, that… Clarity is not just being precise about what you are. It’s being equally as exact about what you are not. I think that’s where many businesses miss the boat, is they’re not willing to put their flag in the ground and say, “This is what we do, and this is what we do not do as well.”
John Jantsch: The way I kind of like to frame that up is that I know when somebody comes to me, I can instantly, I’ve been doing this long enough, I can instantly see I can add a lot of value very fast. But I also have people that come to me and then it’s like, “Yeah, okay, I can take your money, but I’m not sure I can really help you.” I think that that is a great way to look at this idea of clarity is understanding who you really can help, and who you can’t help, and not just take everybody’s money.
Scott McKain: Gosh, that is such an important point, John because when I first started my speaking business, people would say, “What do you talk about?” I said, “About an hour.” You know? I mean, whatever you needed, I’d be there. Right? Time management? Sure. I’ll have to figure that out to write the speech. I was a mile wide and an inch deep. Did I get booked? Yeah. I did okay, but I wasn’t known for anything. It wasn’t until I was willing to say, “This is what I do.” You know what else happens that I think we often overlook? When you say, “Oh, I’m not your best choice for that,” the credibility that you gain at that point, because that way the prospect or customers knows that when you do say, “Oh, this is what I do. Yes, that’s in my wheelhouse.” Man, now the integrity that you have and the credibility that you have, it just grows exponentially when you’re willing to say that you’re not the right fit for other things.
John Jantsch: Well, I usually say I’m not the right fit unless you’re willing to pay this much, and then I might be. Does that not pass the integrity test yet?
Scott McKain: Well, I mean, if somebody asks for heart surgery, I don’t care how much they’re willing to pay. I’m probably not the right choice. Right? But, I mean, there is an element to it as well that they admire your insight. They want to you to stretch, and if they make it worth your while, then it’s good to do that. But at the end of the day, it’s that core, it’s that essence that people want. If you’re not clear about what that is, then how in the world are they going to be attracted to you to begin with?
Scott McKain: Years ago, the late, great Jim Rohn used to say that success is something that you attract, not something you pursue, but the kind of person that you become. I thought, “You know, there’s a business corollary to that, and I believe the customers that we attract are going to be more valuable to our businesses over the long haul than the customers we’ve had to pursue.” Right? I mean, how do they get attracted to us? They’re not attracted to generics wondering generalities. You know? They’re attracted because there’s something that you do that you’re the go-to business or you’re the go-to person. If you’re not willing to be clear about that, I don’t know how you get attracted.
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John Jantsch: So let’s dig into a couple of the specifics because you just teed this one up. One of the things I know you talk about is a factor in iconic performance is that you need to stop selling. So I’m sure a lot of listeners would say, “Wait a minute. How am I going to survive if I stop selling?” How does that work in making us distinct?
Scott McKain: Well, you know it occurred to me and our mutual friend Scott Stratten with his book, UnSelling, was one of the inspirations of this. One of the things that I’ve realized, and that’s where the attraction factors comes into play, is that Apple isn’t out there all the time. I’m using that because that’s an example that everybody realizes, but it’s true with the chimney sweep, and it’s true with St. Elmo’s. I mean, they’re not out there all the time, pushing you to sell. It struck me that words have meaning. Right? If you have a personal tragedy, you seek closure. Yet isn’t it interesting that we use that as the final step in selling? You know? So much of this, and John, you pointed this out before, we’ve moved from a transactional economy to a subscription economy. We want people to subscribe, and be ongoing, and repeat, and refer, yet we’re still using the old selling model of transactions. Certainly, we want to conclude deals to get the process going or to keep the process moving, but we have to change our thinking. We have to think about how do we gain relationships? How do we develop subscriptions as opposed to the old saw of let’s close the deal.
Scott McKain: Years ago, when I first started doing this, I did sales training for a company. One of the lines that we… We had an overhead that we used on the projector, and it said, “Service is the first step for the next sale.” People wrote that down, and that was assumed to be true. Now, I think, “Gosh, that’s a lie.” I mean, service is a part of prospecting. It’s an integral part of the first sale. If you can’t take care of me from the beginning as a prospect, why would I trust that you’ll take care of me as a customer? So when we get into this mode of looking at long-term value, and building ongoing relationships, and thinking subscription rather than transaction, that’s what I mean by stop selling. I realize, “Hey, I’ve got to book things for my business to survive, for any business to survive.” But how we approach and the mindset we have about that, I think, is critically important to our future and our success.
John Jantsch: Okay, I’ll give you another one to tee up. Excuse me. You used a couple examples where you cite the factor as being going negative. Again, another pretty counter-intuitive thought.
Scott McKain: John, I have to be… I try to be a positive person. When I was doing the research for the book, it just kept coming up over and over again. It was like I had to change my thinking. But what I realized is this: The iconic businesses are obsessed with finding out negative information. One of the things I uncovered was a study done at Texas A & M University on SWOT analysis. We all know the old strengths, weaknesses, opportunities, threats. In many organizations, how those have become beyond useless because managers view people that bring negative information as being negative employees. There was one, to your field and your specialty, there was one part of the study at Texas A & M that a company recognized they had poor brand image. They put that as an opportunity because we can change it.
Scott McKain: No. It’s a weakness. If your brand image is poor, you have to say, “Here’s an area where we are weak,” but their inability to view a problem as a problem and to view it… See, what happens with so many organizations? A customers has a problem. Something has gone wrong. The knee-jerk reaction is let’s make that customer happy. We’ll discount this, or we’ll put so many miles on your frequent flyer account, or we’ll do… We placate the customer, but they refuse to go negative enough to figure out where in the process is something messed up that created this negative experience for the first place. Iconic companies are obsessed with where is the problem. What could go wrong so that they can prevent that. It’s almost a positive negativity. Right?
John Jantsch: Well, and to foot that as sort of a competitive thing, one of the things we do all the time is we will look at the reviews of competitors, so a business we’re working with, their competitors. Those become opportunities. If a competitor’s constantly getting negative reviews about some aspect of their business, we solve that problem or we look to solve that problem. Sometimes that’s another way to look at negatives.
Scott McKain: Totally. Gosh, we’ve never had as much access to what customers think about us as we do today.
John Jantsch: Yeah. YouTube channels dedicated to our businesses.
Scott McKain: Absolutely.
John Jantsch: Right, yeah.
Scott McKain: Yeah, but yet I see some organizations that… I’ll ask the CEO or the company owner, “When was the last time you looked at your Yelp reviews?” Well, somebody else does that. Really? I don’t get that. I mean, to me that… Kind of off topic, but it’s still in the… I think one of the saddest television programs on today is Undercover Boss because the boss is so blissfully unaware of what’s happening on the front lines. Every show’s the same. The boss discovers, “Oh my goodness. I had no idea that my customers were facing this. I had no idea my employees were doing that.” Really? If we don’t know what’s happening on the front lines, I don’t care how big your business is. If you don’t know what’s happening with customers on the front line, how in the world do you create the kinds of experiences that those customers want to repeat?
John Jantsch: So in general terms, maybe you’ll be specific, I don’t know, but what… If somebody said, “Scott, what does an iconic business look like?” I mean, are there elements that are common that come all the way through everything they do with their customers, with their people, with their leadership? I mean, are there a set of things that you would look to to try to measure an iconic company?
Scott McKain: You know, yeah. Great question. For one thing, I would look at what’s your percentage of customer retention. Are you retaining customers? Growth, for any business, is the combination of both acquisition and retention, but yet people say they want to grow their business so they put all the effort into going out and getting new customers. We’ve seen so many business, John, you and I, that once they get you in the tent, they can’t keep you in. So they’ve got to go out, and they’ve got to do these huge acquisition programs to keep people in the funnel because they’re losing so many out the back door. Well, close the back door is the first step. What is your level of customer retention? What is the level of referral?
Scott McKain: Part of what I talked about in the book is some problems I have with the would you refer us to your friends question. Good question. Maybe not the best question. But are your current customers, is the experience that they have with you compelling enough that not only they repeat their business, but they’re willing to tell others about it? That, then, drives us into iconic organizations exceed not only industry standard. They exceed any industry in terms of employee retention and employee engagement because you can’t create that level of customer experience without engaged employees.
Scott McKain: Quick example. St. Elmo’s in Indianapolis, it’s a restaurant. That’s an industry known for incredible turnover. They have practically zero turnover at that restaurant. So how does that happen? They create an incredible culture for their organization. Every waiter has a business card. Waiters are incentivized in terms of repeat dining from customers. Every year, they have a program where the waiters get a bottle of wine, the vintage of which is the year that they started work for the company. One of the joking things that Steve Huse, the CEO, mentioned to me, Steve and Craig Huse that runs St. Elmo’s, is that it’s getting to be a hell of an expense right now when you got a guy that came to work in ’97 and giving him his annual bottle of wine. But they look at it as how do we engage with you? How do we make it a career? How do we help those of you with families to get off on the days that you want with your kids? How do we incentivize single people who aren’t necessarily doing that to work it now? All of the things it takes to create this incredible culture then gets transmitted to their customers.
Scott McKain: My buddy, Dr. Michael LeBoeuf wrote a book many years ago called, Greatest Management Principle. Simply, was behavior rewarded is behavior repeated. But yet, we don’t think often enough about what we reward. Incentivizing waiters not just in terms of tips, how did I do this performance, but in terms of are people coming back and are they asking for you. You give them your card so that when they call to make a reservation, they want to sit at John’s table or at Scott’s table. Those kinds of things make an incredible difference. Now, to me, that’s not just good restaurant management. That’s great leadership. That’s how I’m defining iconic is what organization couldn’t be better served by doing those kinds of things.
John Jantsch: Yeah, and I love that example, too, because as you mentioned, that’s an industry that doesn’t often treat its employees as professionals. To really bring that level, and you see examples of it all the time, but, unfortunately, 90% of the time, you see bad examples of it. So I’m visiting with Scott McKain. He is the author of, ICONIC. Scott, tell folks where they might find… Obviously, the book’s available everywhere, but where they might find out more about you, and your work, and even the courses and programs that you have around it?
Scott McKain: Oh, I appreciate that, John. I, too, have a podcast. It’s called Project Distinct. It’s available everywhere podcasts are. John, you’re guest hosting for me, and I’m really looking forward to that, so thank you for doing that. The podcast is there. My website is just scottmckain.com. By the way, it’s M-C-K-A-I-N. A little different spelling than you might think. Then we also have a site called distinctionnation.com. There, I’ve provided free resources. It’s kind of an entry-level place if people are interested in this. There’s free workbooks, free eBooks, even a free audio program that they can download that is kind of the entry level into what does it take to create distinction and separate yourself in the marketplace.
John Jantsch: Well, thanks so much, Scott, for dropping by. If this whole speaking, and authoring, and consulting thing doesn’t work out, you could probably have a career in radio.
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