Host: The man you're about to meet, John Ruhlin is an author, and he's an author of a book that is basically what we're going to talk about today. The book's called Giftology, The Art and Science of Using Gifts to Cut Through Noise, Increase Referrals and Strengthen Retention. But he's also an entrepreneur. He is an author, he's a speaker, he's also a sales guy, and so we're going to talk about some of his philosophies and how this all shapes together. So John, welcome to the Action Catalyst Podcast.
John Ruhlin: Thanks for having me. Man, this is going to be a blast.
Host: Yes, so tell me a little bit about how did you get started, and tell us your story a little bit.
John Ruhlin: Yeah. So I grew up a farm boy in Ohio. So I'm a Midwest guy. I grew up one of six kids and doing not the most sexy thing in the world. I milk goats every morning. Like, you know, like, what was your background? Like, milking goats the blank stare in their face, like, what are you serious? I'm like, Yeah, I milk goats. We had a one acre garden. We heated our house with wood. It it was like, I was like, Daniel Boone, but I got good grades. I was an overachiever. I didn't I knew what I didn't want to do the rest of my life was, you know, like hoeing the garden and corn and all that kind of stuff. And so I was going to go make mama proud and be a doctor. And I had kind of took a little bit of a U turn in college, because I was looking for a way to pay for school. And I started working with Cutco, the knife company. And at the same time, you know, serendipity, or, you know, call it, you know, just a blessing that I was dating a girl at the time. Her dad was an
attorney, and he was the kind of guy that every deal in town flowed to. He owned part of the oil wells and banks and the real estate that became the Walmart in town and whatever else. And he was always giving things away, you know, he'd find a deal on noodles and then buy, like, a semi load of noodles, literally, and then everybody at church the next Sunday, like 200 people would end up with like, 20 cases of noodles. And so I remember pitching him the idea of giving away cut code, because I thought all of his clients are men. They own insurance companies. And so I thought maybe he would buy pocket knives. They're all into, like, hunting and outdoors. And he, like, I literally, like, it changed my life. Like he he's like, What about paring knives? And I'm like, Paul, you're gonna give grown men paring knives? Like, that's weird. I'll sell you as many as you want. I'm desperate. But why? And he said, Because I found out if you take care of the inner circle, everything else takes
care of itself. That was the, like, the light bulb. I was like, wow, it's not about the knife, although the knives are great and whatever else, but it was understanding relationship and the psychology of relationships and and how to deepen, deepen these relationships and how to drive referrals. Was staying top of mind. Knowledge is what the the so called decision maker. It was the whole family. And so I started to teach those principles to my clients, and in doing so, they would, instead of ordering like one set, they'd order 1000 sets.
Host: So that then leads us to this concept that you call giftology, which I just find fascinating. So tell us specifically, then, what is giftology?
John Ruhlin: Yeah, so everybody will say, Oh, relationships are I'm all about relationships, or my relationships are my most valuable asset. So they talk about it a lot. They give lip service to a lot. But when it comes down to actually putting your money where your mouth is, and your time and commitment and showing people that you care and that you're different, all of a sudden people go from Oh, well, you know that bar of chocolate with a logo on it, that'll work. You know the $15 like fruit basket, oh, that's fine, and it's like there's an incongruency between what people say and what they actually do. And so giftology really is, is saying, If relationships are your most important asset, how you show them you know that you care and that you appreciate and show gratitude, or whatever buzz word you want to call, it really matters, because at the end of the day, we all have similar products and services, and it usually comes down to people like you. Do they
trust you and do they are you top of mind, and do they want to do business with you? And I found, you know, it's a biblical concept, like, you know, then Proverbs, it talks about, you know, a gift ushers you into the presence of the great or into the presence of kings. And so what we're teaching in giftology Isn't isn't rocket science. It's not anything new. It's just putting a spotlight on the fact that what you say and what you do should align. And in business, you know, there's a lot of noise. And so doing things well, even in the gifting realm, because people suck at it, they're horrible at it. When you do when you show. Attitude. Well, you just stand head and shoulders above almost everybody else that you're competing against.
Host: So basically, this plagiarism that you've committed against the Bible has become part of your business strategy.
John Ruhlin: If I'm going to plagiarize baby, that's, that's, that's where I'm going to go first. Yep, I stand guilty.
Host: So it's not just hey, buy people presents. It's almost like strategic generosity.
John Ruhlin: Yeah, a lot of people, they want to be generous, or maybe they are, but they don't realize that by doing things what we consider wrong or not in a certain order, they can, they're way less effective. And so, for instance, you know, Christmas, a lot of people like, well, that's when you got to send gifts. It's Christmas. It's the holidays. And what's funny, I send out a quarter million dollars a year worth of gifts to clients, prospects, interesting people I meet at ball games, whatever else. I don't send one gift between Thanksgiving and Christmas. Not one dime of that 250,000 goes out in that four week time period because all of my competitors and everybody on the planet is sending chocolate, nuts, bottles of wine, bourbon, golf, stuff, whatever it is and it most people's tables are ready to collapse from all the crap that they're getting. So even if you send an amazing gift, it's just part of the noise, and people are stressed out and and so we teach people to
send gifts as a just because, not because of a referral. Send it as a, Hey, I was just thinking about you. And when a gift shows up as a surprise and delights, kind of the Ritz Carlton mentality, it's amazing when it shows up in the middle of March or in the middle of July people, and it's the only thing that they received that month that wasn't a bill, you know, or an invoice or whatever else. Like, there's an emotion. There's like in our DNA, like we want to reciprocate when people make us feel good and and show genuine thought and care. And so we teach people to do gifts as a just because, as a surprise and delight. We teach people the gift, by its very nature, should be all about the recipient, not about you. But in business, we do that every day, and we call it marketing. And we make the gift all our colors. We put our logo the size of a softball and the jacket that we give, or whatever else, we make the gift all about us, and then the other person that receives it in
their mind, they're like, why would I ever wear this? Like, this isn't a gift. This is you trying to turn me into a billboard. And so the gift needs to be personalized to the person you're giving it to with their name, nothing about you. And in doing so, every time they use it, they'll think of where it came from, if it's if it's a classy enough gift. So we take people, when we call it a relationship action plan, we say, you know who are your 50, 105,000, however, many people who are your most you know first sales rep, who are the 20 companies that that you wouldn't have. You know you won't hit your numbers this year without and rather than send out 200 of something, send out 20 to the right people. Personalize it, make it world class, include their spouse, do it at a time when they're not expecting it. And now, all of a sudden, you got the recipe for something like special, where people are like, out of all the people calling on them, man, Joe or Steve, or whatever your
name is, like, man, they really are think, they think through things differently, and they actually care about me. And so there really is a science to it. It's not a, you know, like most people, December 15 comes around and they're like crap. We made money. I did good this year. I better say thank you. And so they delegate to an assistant, or they go online and whatever, the first thing that comes up that kind of looks cool, they order a bunch of those and slam them all out, you know, with no handwritten notes to their most important relationships, and then they wonder why nobody calls, nobody says, Thank you. Or if they do, it's kind of the the nominal Thank you. So we really do feel like there's a playbook, and that's what we put into giftology was, you know, there is a science. This isn't random. This is shouldn't This shouldn't be, like reactive. This is a proactive response for people to really stand out, be memorable and and deepen relationships with their most
important people, whether it's an employer, whether it's a client, you know, it's treating human beings like human beings again. Well, there's no there's no MBA class at Harvard on gifting like even though relationships are important, most people just look around and copy what everybody else does. Nobody, and nobody's going to write a note and say, I actually thought less of you as a human being for you sending me this gift. But that's what goes through a lot of people's minds. We had a couple people come up and say, from some of the recruiting companies that they work with, they got, like, this cheesy bottle of wine after they've probably sent them a $50,000 commission check, and they're like, We will never use them again, because it was the cheesiest, most unthoughtful gift ever, and just out of spite, like, I can't we would never call them now, they're thinking, Oh, we just lost a client because of pricing or competition or whatever else. But really, they actually
spent money to have a negative consequence, which is a really bad business move, like, spend money to have negative consequences, like, you don't want to do that very often. So it's simple. What we teach is very simple, but it's very powerful. If you do it right or wrong, if you have 100 relationships, boil, boil it down to your top 20, and spend all of your money on your top 20 and do a nice handwritten note to the other people. Because at the end of the day, people are like, Oh, well, I sent this person a 20. You know, I have tiered gifts, and I'm like, well, you're. You know, the caliber person you're giving the gift to doesn't may maybe change from tier one to tier three. So rather than try to have three different cheers, why don't you just take and invest money really well on these 20 or these 200 or these 2000 and the other people you know, like, do the handwritten thank you note or do something really classy, but that doesn't cost you a lot of money. Most people
tend to treat everybody the same, like, oh, we have 1000 relationships or 100 relationships. And so they send the same vanilla $15 item to all 100. And I'm saying we'll take your $1,500 and spend it on your top 10. And in doing so, those 10 are become your raving fans, your referral partners. They grow the business when they leave a company and go to another company, you know, as a sales rep, or as a as an entrepreneur, you're one of the first people that they call. And so there's times where, like, we don't do any, any, any sort of gifting. Like, I tell people where everybody's going cheap, I go really expensive. So, like, my business cards I spend $3 on because most people spend five cents on their business card. Because that's an area where I can really be different and communicate that the details matter, but on an area like a brochure, where everybody goes expensive, I don't have a brochure. You know, my book really is my only brochure that I have, because people will spend
like, 20 $30 on a brochure, and they end up as, like, toilet paper, end up in a trash can somewhere. And so I'm a big believer in like a trade show. Like, rather than go spend a million dollars at a trade show, what if you took that same million dollars and went after the 100 relationships that you wanted as clients and took care of the 100 that you already had? Now we're talking and oftentimes you can spend a lot less money, if by just doing it differently than what your competition is. And so where everything's where everybody's going? Yeah, I want to be in a blue ocean. I want to be in an area where nobody's doing what I'm doing, because that's really the opportunity to grow a relationship and stand out, not by spending one or 2% more than your competitors like that. Just that becomes wasteful, and it just becomes part of the noise. Don't send a Christmas card that's generic at Christmas. Send a, you know, I have one, one professor who works with a lot of the pro
sports teams. He sends out ground he sends out a letter on Groundhog Day. Who else gets a Groundhog Day letter? Nobody like it's unique. It's funny. You kind of look forward to it. It's the only thing you're getting in February. So it's, it's, yeah, it's the timing matters. It's, it's how you're targeting. It's, it's focusing on the 8020 rule, like any other part of our business, but then taking the time to do all the little details around that gift, right? Like, even a gift that's $150 don't just send something from Amazon that you can do it on your own, like have it shipped to you, put a handwritten note inside and send it off. So it doesn't feel like it was automated from Amazon. It feels like it was a gift from you, because that's what it is like. It's a representation of the relationship and the extra. It's like with your wife, like when you have to jump through some major hurdles to get her a gift, like she feels special and important because of the extra efforts that
you went to. It's not just the item, it's all the effort that goes into it.
Host: The thought matters a lot.
John Ruhlin: Yeah, and you can send the same thing to 1000 people, but if it's personalized, well, if it includes their spouse, if it's packaged, well, if it has a handwritten note that comes at an unexpected time, like I can take the same gift and give it to 1000 people, but because of all the details that go into that customization process are done, well, it feels like it was hand selected just for each person, but there's 1000 People that are receiving it. So there is a scalability element. And you know, some people will have, like a relationship manager, that all they do all year long is focus on relationships and gifting. But that's not the norm for most sales reps or most companies. And so figuring out ways that you can have, you know, some scale because you know, you still have to go call on the client and make sales and you know, or do other parts of your business. So there is a hybrid approach, you know, that we kind of teach in the book that kind of gets you the
best of both worlds. And it's, yeah, so there it's, it's, we are on the other end of the spectrum, no question though.
Host: Right. How do you figure out what's the right amount of money to spend? Do you have any like guidelines for determining that?
John Ruhlin: Our rule of thumb in general, because people are like, oh, I want to send a Rolex. I'm like, you're gonna look like you're charging too much. Your margins are too good if you're starting sending out, you know, Rolexes and Louis Vuitton backs for 20 grand. So our rule of thumb is whatever you spend on a really nice dinner out with, you know, with a group of people with some really nice wine, you know, really good ball game tickets are a really nice round of golf. You should be willing to spend that on your most important clients, employees, referral partners, whoever. So, most of the gifts that we recommend are somewhere between $75 and about $1,500 at the very most. You know, we do go beyond that, and we do go a little bit lower than $75 but that's kind of the sweet spot. And so most of our gifts are probably are probably in the 200 to $500 range. So that's kind of the parameters of of you know, because most people are like, well, I picked up a, you
know, I picked up the tab at the bar last night, and that was $1,000 but when it comes time to gift, they like, they've never spent money on gifting, so it freaks them out to spend more than, like, $20 on. On anything. The other thing that we encourage is to have metrics, you know, and every other part of your business you you base it on the numbers. And so our metric is at a bare minimum, for an important client, you should be willing to reinvest 5% of your net profits from a client. So let's say you have a million dollar client, and their net profit is 100 grand. That means you could spend, you should spend $5,000 in some way, shape or form, to keep them as a client, to grow them as a client, and hopefully to turn them into and duplicate them, which means inspire them to act on your behalf and open their mouth and talk to their other friends that are in the business that could become clients. So they become a referral source for you, and so 5% of net profits. For some people,
it's like that allows them to spend $100 on a gift. For other people, it might allow them to spend $1,000 but it's based on a real number. Most people base their gifting very reactively off of a gut feeling like, how much are we gonna spend on these people? I don't know. Here's 10 grand, Susie, go see what you can find for top 100 people. For, you know, our top 1000 people for 10 grand, it's not based on a number, it's based on a gut feeling. And so we try to encourage people to say, like we're not doing this as a nice to this isn't a warm, fuzzy thing like this is, I'm looking to invest $1 and get $10 back over the next 20 years. I really want a real ROI, and I think because most people don't think about it from a strategic perspective and put real numbers to it, it ends up just being random numbers that they throw against the wall and then they it's usually the first thing that's cut in most budgets, because it's not strategic, and it is just a warm, fuzzy feeling. And because
of that, you are wasting money. And so those are some of the basic parameters that we teach our clients to to work with them. It's a that's kind of a baseline that's like, A, if you're not willing, you know, you keep 95% and give 5% like, if, if that equation doesn't work for you, then then what we're teaching and giftology probably doesn't align philosophically, which, you know, some people are like, my my good service and my product is my gift to them. I'm like, well, that that's great, but people still want to be, you know, like even the wealthiest people, you know, the highest level, people still want to be thanked and appreciated. Like most people walk around with a a deficit when it comes to appreciation and gratitude, even in their own personal life. And so I always challenge people like, yeah, your product and service better be good, because everybody, all your competitors, are probably good as well. Like, it's usually the relationship that's the
difference. And those little acts of kindness, if you do them strategically, can be really, really powerful.
Host: The last little question I did want to ask is, you say that gift giving with strings attached causes problems?
John Ruhlin: Yeah, well, I think nobody likes to be manipulated, like everybody loves to be loved on and inspired. And we, you know, most people like to reciprocate, but when you give a gift and then, like, ask for a referral, it's like a bait and switch. It's like, Hey, I sent you that gift with this specific request in mind, it feels very manipulative. And so, you know, we view our relationships, you know, obviously we're all in business, you know, to make money, but when you can have a 50 Year mindset of I'm planting seeds, and I'm going to continue to love all my clients, and I know that if I do that, like, good things are going to happen, whether it's while they're at this company, like I've had some people, they had to leave a company and go to somewhere else before the you know, there, there was fruit from some of the things that we did. And so I don't keep track. It's not like I when I'm sending a gift, I'm like, Okay, now I better get a referral in the next six
months. I just know, you know, even from a biblical perspective, that when you plant good seeds, when you take care of people like you reap what you sow. And I don't know how that's all going to play out, but I know that if I continue to do the right things to the right people, that there's a 10x 100x 1,000x return, and I don't know what it's going to be with what person. And so I don't give a gift and then ask for a referral. I don't give a gift and then expect them to do something for me. I give them a gift with open arms. And there is a hope, you know, like I'm a human being, there is a hope that good things are going to come from that. But I don't put those expectations. It's like giving your wife a gift and then saying, Well, I better get this, this and this. Like, it just doesn't go well, like nobody likes to have those strings attached, and it basically ruins the gift, whether personally or in or in business, and so we're very, you know, we push our clients really
hard to say, like, give the gifts, do the right things. It's like going it'd be like taking a client out to dinner and then expecting them to do something. Like you take a client out to dinner because you want to spend time with them and build the relationship. And a gift is no different.
Host: I love it. John Ruhlin is who you have been listening to. Thank you so much for coming on the show. We'll make sure to get a stress ball in the mail over to you right away.
John Ruhlin: Thanks for having me.