The Greatest Lead Generation Scheme

With Colin Powell, how can they lose?

For several weeks during May and June, a series of wildly exciting full-page ads ran in The Philadelphia Inquirer for a seminar titled GET MOTIVATED! to be held in the massive Wachovia Center, home of the Philadelphia Flyers (hockey) and 76ers (basketball).

Among the speakers with star power were Gen. Colin Powell, Rudy Giuliani, Steve Forbes, Zig Ziglar and Philadelphia Eagles quarterback Donovan McNabb. The cost:

Only $4.95 PER PERSON. Or Send Your Entire Office for Only $19! That’s almost free! Admission at the door: $225 per person. Call immediately to take advantage of this limited time offer.

After seeing this ad three or four times, I did the math. The Wachovia Center seats a maximum of 22,000 people. If completely sold out at $4.95, gross revenue would be $108,900.

That amount would be completely eaten up by speakers' fees. Colin Powell: $100,000 plus private jet. Rudy Giuliani: avg. $80,000. Zig Ziglar: $25,000 to $50,000. Donovan McNabb: $20,000 to $30,000. I could not find Steve Forbes’ fee on the Internet, but it has to be at least $50,000.

The “GET MOTIVATED! Workbook” was an additional $4.99, so the final tally for me was $10 and change (tax). A full house at $10 each would generate $220,000. But speakers’ fees, hall rental, staff, audio-visual, etc., would create serious negative cash flow.

I smelled a rat and decided to sign up.

GET MOTIVIATED!
On May 25 I received a confirming phone call offering a seat in the first two rows for $45, or a seat on the main floor and close to the action for $25. Thanks, but no thanks, was my reply. I wanted to be everyman, sit with the hoi polloi, and feel crowd electricity and sentiment.

At 8:30 a.m., June 17, I arrived at the Wachovia Center, picked up my program and found a seat high up in the second tier. By my estimate the hall was two-thirds full—roughly 15,000 attendees. This was a very mixed crowd made up of celebrity hounds, minorities, business folks, male and female, young and old, retirees, and military. The setup consisted of a large, well-lit, boxing ring-like stage in the round on the main floor with two sets of giant TV screens—four in two tiers over it—so folks in every level had a good view. Even though celebrity speakers prowled the stage and turned their backs on one quarter of the crowd, thanks to expert camera work they were always facing the giant TV screens.

Lots of hype, loud music. When speakers were introduced and took the stage, there were hugs all around as sparklers or confetti spewed out of mini-chimneys at the four corners of the stage. All performers were comfortable in this vast venue, using big gestures and pushing the crowd’s hot buttons with laugh lines: applause lines; and easy-to-remember aphorisms, adages and axioms. Any mention of our brave men and women in uniform (and there were lots of such mentions) resulted in an eruption of cheers.

To keep the audience awake during breaks in the action, a screaming R&R singer came into the ring to perform and a giant flat-screen TV was raffled off. Late in the day, hundreds of beach balls were tossed into the audience from the upper deck and were batted around, many of them ending up in the ring amid a wild dance contest to win a trip to Disneyland. The audience voted for a soldier to take the vacation, a very popular win.

From my notes:

Steve Forbes (“America’s Promise: Your Keys to Growth and Opportunity”)

Be different. If you do what everybody else does, you will be treated like everybody else.

“We are overtaxed.” [CHEERS]

“The federal tax code is 9 million words, and nobody knows what’s in it. We need a flat tax.” [CHEERS]

“Get rid of the death tax. No taxation without respiration!” [CHEERS]

Tamara Lowe (“How to Strengthen Your Sales and Negotiation Skills”)

Lowe is co-producer of the seminars with her husband, Peter. “You have spent your life taking care of everybody else,” she shrieked. “This is all about you. I’m so proud of you!”

Lowe mentioned several times that she was a former drug addict and dealer with an eighth-grade education, who started out 22 years ago with nothing and now runs the largest seminar company in the world. “I’ve worked with five U.S. presidents and been in 70 countries; America is still the greatest country on Earth!” [CHEERS]

“I have worked with famous people, but please don’t think I am dropping names,” Lowe cried, whereupon she flashed pictures of herself with Margaret Thatcher and “my friend Jerry Lewis.”

Much of her presentation was spent touting her book, “GET MOTIVIATED!”—regular price $25, but we could buy it for $15. Her greatest experience was “my relationship with the living God that loves you. I gave my life to Jesus, and the chains fell off!”

“Buy my book and buy copies for others, and you will get the bonus program—a free prayer sent out over the Internet!”

Zig Ziglar For decades I had heard of this great motivational speaker and author. Alas, he fell down stairs at age 82 and suffered brain damage, so his presentation was a Q-and-A with his daughter. Her main job was to keep him from wandering off message and repeating himself, which he did constantly. A few flashes of the old Zig Ziglar came through, but he was semi-gaga and on autopilot. I found him painful to watch.

Rudy Giuliani Giuliani preached “relentless preparation,” and described how a lawyer will spend four hours preparing for every one hour in court. He said something unexpected always happens, but if you're prepared, you can deal with it. As mayor of New York for seven years, he had run citywide drills to deal with floods, earthquakes and fires, so he knew the first responder community and how all the various elements worked. Thus he knew how to deal with the 9/11 catastrophe.

Giuliani also talked about the importance of teamwork and the value of others. You start by asking yourself, “What are my weaknesses? What don’t I do well?” The next step is to find people who are good at doing what you're not good at and letting them do their things.

The Real Reason for “GET MOTIVATED!”—Lead Generation
Nowhere in the promotional material were the names Phil Town or James Smith mentioned. Town runs investment seminars, and Smith teaches real estate investing. With these two characters on the program, the arithmetic gets interesting. The promoters were on track to rake in tens of millions of dollars.

Phil Town (“Eight Steps to Outsmarting the System That Failed You and Getting Your Investments Back on Track”)

I had never heard of Phil Town—a hunky Vietnam veteran who decompressed from the War by running kayak trips through the Grand Canyon. From his aw-shucks opening, Town quickly morphed into a compelling pitchman for his stock market course with flashy PowerPoint on the giant TV screens. He spoke for more than an hour, far longer than anyone else.

Town came on like gangbusters, promising a 35% annual return on your investment—a $5,000 investment will become $50,000! Do not get into mutual funds, he cried. “You hire a fund manager and they make billions in fees for losing half your money. Only one out of 25 fund managers beat the index. You can do better!”

For example, Town shouted, here is an investment that is so low-risk. Suddenly on screen came two words that made my flesh crawl:

COVERED CALLS
I know a little about investing, and the business of dealing with covered calls is complex and requires vast knowledge of individual companies and the markets. I know a guy in his 60s who spent his life in finance, and when he retired he made a bundle betting on covered calls. Whereupon the market tanked, and he lost a bundle by betting primarily on GE. “I’ve never seen anything like this,” he whined to me.

So what was Phil Town up to? I wanted to know. Later he got into ETFs—exchange-traded funds—equally complex stuff and indecipherable to this middlebrow crowd.

In his presentation, Town, who frequently aligned himself with Warren Buffett, gave two rules: (1) Find a wonderful business (2) that is on sale, and buy stock in it. “Know the value of a company, and buy it for less! This is not rocket science.”

“Hey, Phil,” I thought, “this requires heavy-duty research. And this IS rocket science if you graduated high school barely able to read to become one of the butchers, bakers or candlestick makers who made up much of the audience.”

“Fund managers take six to 10 weeks to get in and out of a stock,” Town explained. If they were to sell everything at once (or buy everything at once), the markets would be in chaos. “But with the computer and Internet access, you can get in and out in two seconds!”

Town brought the Wealth Magazine Web site onto the screens and his “Investools” system—a series of very complex charts of individual companies with little red and green arrows. “If you see three green arrows, you buy,” he told us. “Three red arrows, you sell.”

To prove how simple it was, he called three young women onto the stage and put charts on the screen. When the young women saw three green arrows they shouted, “BUY!” At three red arrows, they yelled, “SELL!” [CHEERS]

Jeez, if three little girls can do this, I can do this, everyone in the audience thought. Town promised we could make $60,000 a month and never touch the principal.

“You can make enough money until you are sick of it,” Town enthused. “Take control, and you can make $100,000 in four months and double your money every year!” He even tossed out three stock tips (Burlington Northern, Whole Foods and Harley-Davidson).

The audience was salivating.

“This is not about money!” Town cried. “It’s about opportunity—to be able to do what God put you on this earth to do!”

Town then talked about his $3,139 investors’ workshops and offered them to us for just $99 with spouses attending free. He then announced a 20-minute break was coming, although not the lunch break.

“Sign up now. Head for the entrances where you’ll see a member of the staff holding a light. Give your credit card and you are signed up. You will receive a red bag with all the materials, but there are only a limited number of red bags, so head for the lights.”

Here was a Billy Graham moment. The audience members—rich, poor, kids, minorities, seniors, men and women—got up out of their seats and streamed toward the lights like moths to a flame, just like the faithful giving their lives to Jesus at an old Graham crusade. The electricity in the hall was palpable, but suddenly all sound was drowned out by a blast of hot, loud recorded music.

More Phil Town
Phil Town was followed by Tamara Lowe, whereupon the 65-minute lunch break was announced. All the folks with red shopping bags were invited down to the reserved seats around the ring for a free lunch and more of Phil Town, who took written questions. “I changed my flight so that I could spend time with you,” he said. I didn't believe him.

I scanned the floor with mini-binoculars and did a rough count, estimating that about 10 percent of the total crowd had red bags—roughly 1,500 people. At $99 a head, that was an additional $150,000. On the subway going home, it seemed that roughly one out every seven people had red bags; if so, the tally was 15 percent of the audience or 2,200 sign-ups, translating into $220,000 revenue. All of us sat mesmerized during lunch as Town held forth for another full hour responding to written questions.

James Smith
Smith was another fast-talking entrepreneur, selling real estate courses. He spoke with the same intensity as Phil Town. A sampling of Smith’s advice:

“Give your money a work ethic. You work for your money. Make it work for you.”

“Do not get into rental properties. Real estate should take care of you; you don’t take care of it.”

"You must make $50,000 on a property, or it’s not worth the brain damage.”

“Always have a business of some sort, even if you are an employee.”

Smith’s class costs $1,495, but we could sign up for $49 each plus a family member for any of six dates in the Philadelphia area.

Next to Phil Town, he was bush league and attracted far fewer sign-ups. 

The Ultimate Lead Generation Scheme
I realized that the whole point of “GET MOTIVATED!” was to generate leads for Phil Town, James Smith and sales of Tamara Lowe’s book. I have no quarrel with the business advice given by Town and Smith. I was appalled at the sales pitch, whereby they promised instant riches beyond the dreams of avarice.

To make this kind of money, you need years of experience and deep knowledge of the financial markets. This was the same kind of naked hucksterism that promised easy money to millions of stupid, greedy homebuyers who fell into the black hole of subprime mortgages and not only lost their homes, but also wrecked the financial system and the world economy.

The Internet is rife with discussions and descriptions of “GET MOTIVATED” and Phil Town’s investment courses—pro and con. I found two entries that seemed fair and balanced. From a review by TellItStraight:

If you go to the GET MOTIVATED! seminar and pay for the $495 workshop, you are going to attend a day-long workshop, which is a production of Success Magazine, which has partnered with Investools. Success Magazine wants to sell you lots of expensive training. The workshop is about half educational and about half hype. They teach you quite a bit about how to analyze stocks using the Investools website, but they spend half the day telling you that if you want to make the real money, you need to learn how to trade options, and that will cost you more, much more. It had a very infomercial, get-rich-quick feel about it. They have three educational programs, Basic Options, Advanced Options and Advanced Technicals for the tidy sum of $4,000, $10,000, and $16,000. The way it works is, if you buy the upper tier packages, you get the lower tiers thrown in for the price. (By the way, I'm going by memory on the prices, I may be off a little in either direction, but I think I'm fairly close.)

From a review by Scott63:

I know those who use Investools, master level, and what I've concluded so far is that those who really have a chance to make money are those who are dedicated and willing to pay the additional $7000 after the initial $3000 for the next course (master level) and I believe get access to more powerful tools. The Investools instructors will tell you, once you get into their advanced courses (they call them Master or PHD level courses) that most of the people that only paid the $3000 will never make any money. Why? Because most don't have the skills, nor the time and discipline to learn the skills on their own needed to make money, and don't have access to the better tools. ... They’re not going to kick you in the ass and weed you out like the Marine Corps. They want your money first!

Colin Powell: The Linchpin and the Conundrum
Colin Powell was the final speaker—the guy that most of the audience came to hear. He entered the hall followed by retinue of groupies wearing camouflage outfits and bounded up the stairs to deliver a stem-winder—part autobiography, part history, part inspiration and leadership skills. Why was he there? Colin Powell’s presence gave absolute legitimacy to everything that went before. He is the linchpin of the whole operation. Alas, Powell has a history of lending his name to dubious activities:

Tempered by Vietnam and being chairman of the Joint Chiefs during the first Gulf War under President Bush 41, Powell developed a five-point philosophy for successful military action that the media dubbed “The Powell Doctrine”:

1. War must be the last resort.

2. Used only when a clear danger exists to national security.

3. Force must be overpowering.

4. The general public must be onboard with strong support.

5. A clear exit strategy must be in place at the outset. 

• Eight years later as secretary of state, Powell was marginalized by President Bush 43 and his cabal of neoconservative advisers. It was they who planned the Iraq invasion while completely ignoring the Powell Doctrine. Army Chief of Staff Gen. Eric Shinseki was fired for suggesting that the Iraq invasion would require 350,000 troops. Playing the loyal soldier in thrall to the civilian commander-in-chief, Powell’s continuing presence in the cabinet legitimized this action, even though the coming invasion violated everything he believed in and preached.
• On Feb. 3, 2003, Secretary of State Colin Powell was suckered by the Bush administration into delivering a speech to the U.N. Security Council—and to the world via television—that would once and for all legitimize the invasion of Iraq. YouTube titles it, “Colin Powell: The Speech that Led to War.” Powell’s message: The administration had absolute proof that Saddam Hussein had weapons of mass destruction (WMD) and was planning to use them. The performance by one of the most respected and beloved public figures in America was the needed imprimatur for that war of choice (as opposed to one of last resort), even though the risk to national security was not clear, neither public sentiment nor force of arms were overwhelming, and no exit strategy existed.

It turned out the facts Powell quoted in his speech were dead wrong and the illustrations he used were bogus. No WMD were found. About that appearance, Powell said:

It’s a blot. I’m the one who presented it on behalf of the United States to the world, and [it] will always be a part of my record. It was painful. It’s painful now.

With his U.N. speech, Colin Powell went a long way toward legitimizing a war (now in its seventh year) that has resulted (so far) in 34,508 Americans killed and wounded—enough young men and women to fill the Wachovia Center one and a half times. Plus, of course, the war has taken the lives of 100,000-plus Iraqi civilians and enough Iraqi wounded (so far) to fill eight or 10 or more Wachovia Centers.

Now Powell is legitimizing Phil Town’s investment courses and James Smith’s real estate seminars under the aegis of “GET MOTIVATED!”—and being paid $100,000 a pop. If he spoke at all 17 conferences this year, his take would be $1.7 million.

Tamara Lowe’s book publicist issued a press release claiming that “GET MOTIVATED!” brings in an average of 17,000 attendees per show, or roughly 300,000 per year. If 10% to 15% sign up for the Phil Town investment deal, that’s a pool of 30,000 to 45,000 prospects. What is the conversion? If half opt out and the other half is persuaded to spend an average of $3,000, that’s gross revenue between $45 million and $67.5 million a year. Suddenly the arithmetic of “GET MOTIVATED!” makes sense.

Based on the people I saw signing up, my guess is that less than 5% could afford it, understand it, stick with it and wind up making a decent return on investment. For the other 95%, the money spent on courses would be a dead loss. And how much more was lost in bad trades is anybody’s guess.

Like the old soldier in the barracks ballad of Douglas MacArthur’s youth, isn’t it about time for Colin Powell to “just fade away”?