Welcome to Power HomeBiz Guides!

Home | About Us Contact Us | Site Map | Search

 
 

 

Starting a Business
Working at Home
Financing a Business
Growing a Business
Managing a Business
Marketing/Promotions
Ecommerce/Internet
Online Marketing
Business Ideas
Leadership/Mgt.

Related Articles


Marketing without Advertising
10 Tips on How to Make Your Advertising More Effective
Marketing on a Zero Budget
A Marketing Formula that Works
Elements of a Successful Advertising Campaign

More Resources


Other People's Money: Inside the Housing Crisis and the Demise of the Greatest Real Estate Deal Ever Made
Other People's Money
Other People's Money: The Ultimate Leverage (The Mastermind Leverage Series)
How to Succeed in Business Without Really Trying
It's Not the How or the What but the Who: Succeed by Surrounding Yourself with the Best
 

At Work At Home: Design Ideas for Your Home Workplace
Organizing from the Inside Out: The Foolproof System for Organizing Your Home, Your Office, and Your Life
The Home Office Planner
Taming the Paper Tiger at Home
Practical Home Office Solutions
ab
 
Howard Brown: The Man Who Decided to be Rich
This remarkable story written by the man himself, Howard Brown. He presents some reasons for his success and goes over the question of why other men succeed or fail. His story significantly resembles our own quest for glory and the desire to be rich. 

by Nach Maravilla
PowerHomeBiz Publisher

 

FROM NOWHERE TO ALMOST EVERYWHERE IN THREE YEARS   

I Howard Brown  

Quite literally I was broke in 1966--and not because I'd lost any great fortune. I'd never made one. But with my partner, Stephen Friedman, I decided to become a millionaire.

By 1969 Stephen and I each possessed eleven and a half million dollars in personal assets.  

This is not a fairy tale, it is an actuality. It has taken place--and is still taking place--right here in our United States, in an era when giant corporations are merging with other giants and you might think the age of opportunities for individuals or small companies to prosper rapidly is over. It isn't, as my personal experience proves.  

I had previously been earning my living as a social worker. It might be more impressive if I told you that my decision to leave social work, after seven years, was based purely on shrewd psychological self-analysis and a scientifically objective resolution to put my [knowledge of] psychology . .  to work in business. But truthfully it was something that happened just kind of accidentally.

I had friends who were making money. We compared our endeavors. One friend was in the wig business, and he'd tell me how much money he was making ... Another friend wasn't making a great deal of money, then, because he was a salaried employee. But he kept telling me . . . how [well] people were doing on their own in the field of promotion. He's now my partner, Stephen R. Friedman, the Plaza Group's president.

I got a little interested and curious and even a little envious in terms of not having all this money to spend on the many things that these people enjoyed. On top of that, when I started going with the girl who [became] my wife, she was making a great deal of money as a model. I decided that if we were ever to get married, I'd have to be prepared to support her.  

My opportunity came when Steve Friedman said, "Gee I'd like to go into the [sales] promotion business for myself, but I don't think I could really do it alone. I need help."  

I said, "Well, good. I just finished my graduate studies, and before I formally start my professional career, let me play at it with you. We'll take a shot, and maybe we'll make a lot of money."  

Steve was always telling me about how millions were made in dynamic promotions, so I went into the arena with that expectation. It was going to be fun. I had nothing to lose except a little time and a few dollars for the initial investment.  

We didn't set up any lavish offices or make any major financial commitments. We were simply going to go out and try it and see what would happen. We did just that and, lo and behold, we weren't just "playing at it" anymore. It was hard work. Nobody was buying anything just because we happened to be there.  

But I [became] egotistically involved in the challenge of becoming a success in the promotion field. I kept saying to myself what I've said to myself all my life: If somebody else can do it, why can't I?  

I reminded myself of the many times when I'd had a rough time studying psychology and human relations in graduate school. I had gone back to school four years after getting my bachelor's degree in business administration. I had no background in psychology. I was competing with kids who were very bright and who had come straight up without any four-year lapses. It was the same kind of challenge: I wanted to get A's and B's, and I kept thinking: If they can do it, why can't I? I'll study hard, I'll read, write, live in the library, do whatever I have to do to succeed.  

Even with such determination, the results didn't always hold up. There were geniuses with A averages, and at that time I couldn't maintain one. I found there was more to it than to ask myself, "lf someone else is a Phi Beta Kappa, why can't I be?" But it's a sure thing: attitude did a lot. I stayed in graduate school, maintained a decent average and got a degree--because "lf the multitude of people can do it, I can too."  

I've found it's the same in business. I'm not saying that if Howard Hughes can be worth a billion dollars, so can I. Or you. To pile up that many dollars, I think you've got to make a total commitment that is for the most part unrealistic. But 1 do believe that substantial success--even outstanding success--is not unrealistic but is within the normal scope of endeavor for any man with above-average ability.  

So all I was really saying to myself was "If thousands of people in the United States succeed in business for themselves, why can't I?" Specifically, if there are promotion companies and if there are individuals who head them successfully, I can be one of that group.  

So Stephen Friedman and I decided to become million-dollar promoters working with billion-dollar corporations. Our entire assets consisted of just the two of us. We had no office, no secretary, nothing. We worked out of our homes.  

Not long after we began, I decided to try starting up our business in California. We had no clients at all, not even any connections where 1 could go and see a guy and say, "Look, how about giving me a break? I'm starting out, you know my track record, and I can do a job for you." We had nothing. But I went to California and beat on doors there while Stephen stayed in New York.  

Our decision to operate coast to coast before we even had any business was half foolishness and half [common sense]. I was foolish enough to believe it would happen fast because we were out there with something to say and something to sell and we were competent.  

Nobody knew how bright we were, nobody knew how talented we were, nobody knew how creative we were. We just succeeded by one thing--determination. We knocked on enough doors for a long-enough period of time so that the law of averages, the law of probability, worked. Not everybody, everywhere, could say no continuously. Somebody had to say yes.  

The sensible part was that when you have two different exposures you're better off than [you are with] two guys doing the same thing. If I'd stayed in New York, invariably, no matter how much we might have tried to split up there would have been many times when we [would have gone] . . . together somewhere, because it's more comfortable to work as a team than alone. But when you're 3,000 miles apart, you don't duplicate effort. And when you need money, you work hard even alone.  

We just kept knocking on doors, and our prospects would say "Plaza who? Howard who?" Steve stayed mostly in New York because of the tremendous amount of business there. But I ran around the whole West. I was traveling from Arizona to Texas to Oklahoma to Kansas to Colorado to Utah. I just kept going through this whole western circuit. Many times I'd fly to see somebody and go through all kinds of discomfort, and the guy wouldn't even be there. The secretary would give me her regrets about last-minute meetings that [had come] up, and it was heartbreaking.  

But I kept telling myself, "Well, who gives a damn? I'm still a social worker, a psychotherapist. I can always go back to what I originally was doing. I'm not going to die. I have no children. My wife can still make a living."  

However, that part about my wife making a living was a bit of a fallacy. She found that modeling in California was quite limited compared with New York. At the same time, the purchase of a home, a car and all the things we wanted to have to live comfortably--all these were now piling up into a tremendous drain on us financially. I had to support the business endeavors too. Just the traveling around and a few little presentations rendered by com­mercial artists added up to quite some expense. We were forced to go back to New York, where we slept on friends' couches and cots . . . saving every penny so we could maintain our California hole.  

This in-between period of about a year--when we had our million-dollar ambition but very little success--was our time of agony. But I clung to my belief in the law of probability.  

Stephen Friedman and I had decided to sell million-dollar ideas that would make money for the companies that would buy them. We kept going on the principle that if we called on enough of the right kinds of companies, one of them sooner or later would buy.  

Now, what kind of company is going to pay a million dollars for an idea? First, it has to be a company that is used to spending million-dollar budgets for advertising and promotion. And second, obviously it has to be a company that has sound reason to buy the particular kind of idea we were offering.  

For good business reasons companies prefer to get their ideas from within or from their advertising agencies. Unless it's a specialized idea requiring expertise in a field they don't know much about. That's the kind of promotional area Stephen and I selected.  

We started out in the game game. We thought up ideas for games of the kind that supermarkets and gas stations use to attract customers and keep them coming back. The customers come back, for example, in hopes of getting lucky coupons that pay off in cash, or pieces that complete a map for a grand prize.  

This approach put the laws of chance to work for us in two ways at the same time. Most people have a yearning to get something for nothing. And they're fascinated by the element of luck--by games of chance. So our product made sense.  

The law of probability finally came through for us. We sold our first game for $16,000. It was a game called Football Cash. We had sent out brochures on a football game to all the supermarkets on the East Coast. Down in Atlanta, Associated Grocers liked the idea of Football Cash, and they bought the game from us.  

That was a welcome success for us, of course, but it was only enough to keep us from being so much in debt. My wife and I were still just hanging on, going through our 'period of agony in New York away from our California home. Then suddenly Steve closed our first million-dollar contract--with the Mobil Oil Company.  

We'd been trying to sell Mobil a game called Discover America. The signals were "go" all the way up to the top management. They liked the way our game was laid out, but they said, "Well, we'd like to tie in with our safety advertising campaign, We Want you to Live." So we had to come up with a safety game, because we surely wanted to live also.  

That evening in a Chinese restaurant, Steve, my wife and I were trying to think of a name. I recalled that my mother always used to say, "Safety pays." Every time I went out, my mother would say the same thing. "Don't forget, drive carefully, safety pays." So I asked Steve: "How about it? Safety Pays in terms of money and Safety Pays in terms of the life you save may be your own...."  

Well, Mom's loving care made a great deal of money fast for Plaza Group--and I don't know how much for the oil company, but it must have been a lot. They liked our ideas.  

Suddenly Plaza Group was a success. We went ahead and created another game for the same client--Winning Line. Winning Line was a completely different type of format in name and type of game. It was born when the marketing department of the oil company called us in and asked us, "Can you design a game that will help sell our products for the dealer? Let's make the dealer a major part of this game and try to make him some extra bucks beyond an increase in gallonage."  

So we came up with a game built around the whole line of pro-ducts--tires, batteries, and car accessories, besides gasoline and oil. We designed an accordion-pleated card on which the customer had an opportunity to fill in five gas pumps with all the different octanes, or four different batteries, or three different tires. If he completed any line across, he won the amount of cash that was imprinted next to the line. Winning Line was a winner for all of us.  

It's a psychological fact. Once you've achieved a success--once you've proved you can be a winner--doors open that you couldn't get through before. Other petroleum companies were now interested in Plaza Group.  

We sold Skelly Oil a game called Keyotane Cash, tying in with their big advertising theme on Keyotane, a high-performance gasoline.  

We developed a probability game in which every card was a potential winner. We called it Something Extra and sold it to Getty Oil, because that was their theme: Getty Oil gives you that something extra.  

We sold another probability game to Citgo which fit into their advertising theme: Be a Winner.  

At this point the law of probability was paying off for Plaza Group. We weren't a small company any more. We were hiring professional people for our staff. We spared nothing to get the cream of the crop in creativity and in technical know-how. We had a production manager and a creative director, an art director with artists working for her, and we had sales people and account execu­tives, plus a full accounting department. We went on and on and got the best possible people.  

New clients kept calling us in, and we branched into different kinds of promotion. One new client was Olin Mathieson, the giant chemical corporation. Olin said to me, "Look, we'd like to sell chemicals to private swimming pool owners. We've got competitors who make chemicals to clean pools, too. How can you help us sell more?"  

We started by analyzing the problem psychologically. Who gets involved with cleaning his pool? Not the affluent homeowner. If I can afford an expensive pool, I can afford to have a guy come around and clean my pool for me professionally. So who are the private pool owners who personally buy their chemicals? They are fellows like the factory worker, the truck driver, the bartender, the cab driver--the guys who make less money but want to give their kids some pleasure too in the summertime.  

The kind of pool they have is the plastic type. The father himself puts the plastic pool in his backyard. He doesn't call in a $30-a-month professional pool cleaner. He puts the chemical into the pool himself.  

What type of guy is he psychologically? He's a guy who's simple. Simple in terms of the life he was born into or has brought himself into. He works for $200 or $300 a week, and he lives in a community setting where a lot of people are packed closely. It is entertainment centers within the family structure. Every once in a while he's motivated to show off a little bit for the sake of his ego. (Why not? All of us do in one way or another.)  

He can't satisfy his ego with the biggest Rolls Royce in the neighborhood. So he looks for a gimmick. "Look what I picked up--a swimming pool!" With it, we know, he'd like to have something for nothing that's gimmicky. So we designed a poolside flag kit. It’s an aluminum pole with little pennants in bright colors, Dayglo colors, and they say  COCKTAIL TIME, LUNCH SWIMMING, CARD TIME. Dad  shoves the pole into the ground beside the plastic pool and says, “Hey, see how classy we are, Tony! We got the thing that says No Swimming when there’s no swimming, or it says Lunch when we’re gonna eat.”  

He gets that free, or maybe for a buck--and we sell a lot of chlorine for Olin.  

My associates and I in this expanding Plaza Group felt no compulsion to confine ourselves to any particular kind of business. When we saw something hot, and we believed we could make a contribution, we moved fast into that market.  

In 1968 we discovered a manufacturer of women's wigs who was an old friend. He was selling them at the rate of about $30,000 a month. Not bad, but we could see that the wig business was booming, and we felt that with our promotion techniques applied to his excellent styling and craftsmanship, we ought to be able to be very big in the wig business.  

That's how the Jerome Alexander line of fashion products began. We talked with our old friend (but not so old wigmaker) and interested him in joining Plaza Group. Then we applied promotion psychology in upgrading and merchandising the man himself as well as his creations. In a relatively short time, we built a $300,000-a-year business to a $10.5 million business.  

Meanwhile we were getting into a direct-mail business: selling goods to holders of credit cards.  

Plaza Group, the company Stephen Friedman and I started only a few years ago, is now selling merchandise to credit card holders at the rate of some $20 million a year. It's one of the biggest parts of our business. And it illustrates a truth: One win wins you others.  

You remember that Steve and I started in the promotion business by designing and selling games to get customers to keep coming back to the gas stations that featured the games. This put us "in" with big petroleum corporations, because they credit our promotion for bringing them millions of dollars in additional sales of gasoline and other products.  

In turn, this close relationship with such companies opened our eyes to the enormous volume of business that can be transacted via the credit card route. So, again, we found ourselves deciding to prosper from a promotion-oriented type of business that we [hadn't] invented. It was another case of acting on an attitude of positive belief: If somebody else can do it and be successful, why can't I?  

Let me try to spell out just how I applied this simple approach to get started in multimillion-dollar merchandising via credit cards. I reasoned this way: it's not magical. You don't have to be a genius. You don't have to discover relativity or invent atomic power. It's just simple merchandising. It's just following the principle of satisfying people's wants.  

Selling merchandise by direct mail through the credit card route is one of the best examples of successful promotional psychology I can show you. Let's take a term out of the psychology textbook and apply it to marketing: frustration level reduction. People want pleasure, ease, comfort. They don't want problems, irritations, frus­trations. They don't want to be made uncomfortable.  

Suppose you tell somebody, "Look, you can have this fabulous clock-radio for only a fraction of its retail value--but what you've got to do is send in your money first, and when your check clears, I'll send you back a notice to come and pick up your clock-radio at a specific place at a specific time." That's full of frustrations. You're making it difficult for the customer as well as vaguely distaste­ful to him. First of all you're making him feel uncomfortable about the fact that you don't trust him. Second, he--or especially she--may feel incompetent and a bit insecure because she doesn't understand your instructions. Even if he or she overcomes those two unpleasantness, your potential customer still has a normal inertia. He has a physical problem just to get to your store.  

But by selling him with direct mail and letting him pay through the credit card system, we eliminate all those frustrations. We tell him, "Just say yes if you want this item, and we'll send it directly to your home postage-paid." There's usually an opportunity to try it for 30 days, and then he only pays on a monthly basis without interest as part of his credit card bill, on which he's charging gasoline anyway.  

Specifically, how did Plaza Group get into the credit card merchandise business? First, we saw the need for a first-class, up-to-date, computerized operation that could service oil companies and banks. Second; we sought out and hired the best people in the country to run this new division for us.  

We set it up to work this way: An oil company or a bank that has credit cards in the hands of customers gives Plaza Direct Marketing its list of names. PDM tests merchandise such as electric can openers, pots and pans, blenders, watches, binoculars--items that appeal to the oil company or bank marketing people as things that will be attractive to a majority of the population.  

Then we mail out an illustrated brochure to a test populace of credit card holders, offering the item not only at a price that is less than the normal retail price but also on a payment basis that lets the proposed purchaser pay in monthly installments with absolutely no interest charge.  

If the offer is successful--if a high enough percentage of the people order the item--we then mail the brochure to the entire rest of the list, which usually runs to millions of people. As soon as an order comes from a customer, our computer immediately mails out the label to our shipping facility and simultaneously bills either the oil company or bank.  

An oil company goes into this business with us mainly because a satisfied mail-order customer will use his oil company credit card more often, and he'll drive into that company's gas stations more often. Why? Because if you have a bill coming in every month for, say, a cassette tape recorder, you decide you might as well use the same credit card to purchase your gasoline. Most of us don't like to have a lot of bills coming in at the end of every month. One more bill would mean one more accounting chore. Besides, it costs most people 10 cents apiece to write a check.  

That's the principle behind credit card merchandising -- simplifying things, making them easier. Obviously what's easier is more appealing to people. And what's more appealing--pleasanter--sells better. That's the simple psychological reason behind the big success of credit card merchandising.  

At the moment of this writing, Plaza is already one of the biggest in this field, though our credit card merchandising division has yet to celebrate its fourth anniversary.  

Within only a couple of years after Stephen Friedman and I founded Plaza Group in 1966, we realized our company had the potential of a profitable giant enterprise, and we wanted to develop in the fastest way from where we were to where we wanted to be two or three years down the road. We decided to issue stock and become a public corporation.  

Plaza Group is always in a hurry, but we don't like to do anything halfway or second-rate. So instead of settling for becoming an over-the-counter stock, we were determined to get into the major leagues.  

We decided to get ourselves listed on the American Stock Exchange.  

It was a mad idea, of course. Our financial advisers told us we weren't ready. We hadn't been a corporate entity long enough. We didn't have a sufficiently impressive financial statement. Moreover, they said, we'd have to be more than just a "promotion company." There's no such thing as a promotion agency listed on the Big Board or AMEX. We'd have to broaden our base by achieving a record of wins in other business areas complementing our initial specialty.  

So we expanded our bailiwick of sales promotion into the broad arena of marketing, and we established "Concept Marketing" as a label for our range of services. It means we provide services in every phase of the marketing endeavor, from product concept to point-of-purchase promotion, and that all elements of the distribu­tion, advertising, promotion, and selling chain are coordinated and unified in theme.  

We already had a strong track record in our promotions for super­markets and petroleum companies. When we entered the wig business and the business of selling products via credit card lists, we knew they were hot opportunities, we did the right things, and we were instant winners. We started out on a profitable basis right away, and we were able to make a sound projection of even greater success in these fields than in those we started with.  

One big feature about Plaza Group that made us respectable to the finance-oriented mentors: we [had] no failures. When we fired our starting gun in the promotional games field, games were hot as a pistol. People loved them. Naturally some were more highly successful than others, but there were no bombs.  

When we started supplying merchandise as premiums for supermar­kets and gas stations, we supplied towels, flatware, books, china--things that people have shown they're delighted to get, throughout the past twenty years. We simply did a good job of supplying good items at a good price. How could we bomb? So, okay, we had graduated from a shoestring to a string of successes.  

The wig business took off fast. It was one of the most exciting, booming industries there were, and we felt lucky that we simply were booming with it. But deep inside we knew there was justice at work. We were booming because we saw the obvious, logical things to do--and we did them. The wig industry later ran into trouble, and we are now out of it.  

As for the credit card merchandising business, the same principles prevail. When you send out good merchandise by mail and the customer can pay it off monthly on a credit card with no interest charges, you're making a practically irresistible offer. Consequently our results are either astronomical successes or not quite so fabulous successes--but no bombs.  

We impressed these facts on the AMEX people. They began to see that a million-dollar promoter is not a guy who comes up with elephants and paints them with polka dots. He's not a guy who'd get a circus to run loose in the street and then sell a popcorn called Poppycock. We helped AMEX to realize that a million-dollar promoter is a sensible businessman who goes to major corporations --the top 500 companies who are used to spending a million dollars on a promotion--and he does a sound selling job on ideas that fit their corporate image and build traffic in sales on a large scale.  

Meanwhile our financial man had contacted some Wall Street people and found us a corporate shell on the American Stock Exchange (a usual procedure on AMEX). The name of this shell company Was Electronic Missile Facilities. They were in the construc­tion field, building facilities for the government on an awarded con­tract basis. At the time we started negotiating with them, they didn't have any contracts and were virtually out of business. They were on the verge of being delisted.  

After careful examination of our company, the president of EMF was convinced that Plaza's aggressive young management could bring benefits to his stockholders in a merger.  

The next step was to convince the AMEX Board of Governors of the same thing. We presented our background. We pointed to our small but prestigious list of clients. We told of our plans for the future, our dreams and aspirations. We emphasized our rapid growth as a policy and as a fact. We said we'd make AMEX proud of us.  

The AMEX people checked us out thoroughly both as a company and as individuals, and our charter was assured. They let us merge into EMF, change the name to Plaza Group and take over the company, retiring EMF and its officers completely.  

We had won our listing. Our ticker symbol was PZG. And being promotion-minded, we had this stock market code embossed on our letterheads.  

The AMEX Board of Governors enjoyed the satisfaction of seeing EMF stock zoom from a low of 2 to a high of 29 under the Plaza Group regime. Even in the extremely bad market between April 1969 and March 1970, we held up very nicely around the 16-19 level.  

Plaza Group, born in 1966, had reached the big leagues by 1969. That's instant success.  

ab