Success Unlimited- The magazine with a positive mental attitude
That is his pungent way of saying he salvages distressed property – multimillion-dollar condominiums that have come close to failing financially or falling apart physically. One of the “luxury” structures he salvaged had a 12-story crack in an outside wall. Another was built next to a roller rink and a school bus depository – not your usually luxury setting. Still another was built backward. The rear wall of the building, a vast, blank space, broken only by the freight platform and a truck entrance, dominated the front of the property. The graceful front entrance was hidden in the rear. (“You could see even from the footings that they’d built it all wrong.”)
Studnicky took over one structure after the owner had sold only 11 units in three years; he sold out the remaining 151 units in 39 days. In another condominium, the original owner was able to sell 2 units a month. Studnicky and his company sold an average of 1 a day and the entire building in six months. In still another condominium, the owners had sold only 1 unit a year; Studnicky took over, sold 22 units in 38 hours and the remaining 61 in 25 days. “Without spending a penny for advertising,” he says.
He did all this without any experience in real-estate sales. Instead he used positive thinking to motivate people to buy and sell the most difficult of properties. “I’m not saying, necessarily, that a person has to believe in positive thinking to be successful in life,” says Studnicky. “But I am saying that in my company, he’d better believe in positive thinking because that’s the way this company is run. And because I don’t want negative thinking around me.”
Studnicky was always like this, continually seeking the best in himself. In 1956, he joined the U.S. Marine Corps, and, though he was not in love with military life and had absolutely no intention of incorporating it into his career goals, he worked until he was officially acknowledged the best man in the best platoon in the best camp. Later, the young marine became a member of the exclusive honor guard at the U.S. Naval Academy.
After he was discharged from the service in 1959, he went into sales, and he performed at his best, professionally and personally. (Professionally: He went to work for one concern and, in his first week on the road, turned in a volume of sales higher than anybody else’s in the company’s 39-year history. Personally: While on a two-week vacation in Hawaii, he earned $3,900 in commissions just wandering around.)
Yet, he can remember the moment he was first attracted to the philosophy of positive thinking, as if he knew with absolute certainty that it would change his life for the better.
He was on a sales trip in San Francisco in 1961, taking refuge from a rain shower, when he saw in a shop window next to him a book that had been mentioned to him casually a week earlier. It was Think and Grow Rich by Napoleon Hill. Impulsively, he went into the shop and bought the book – “and stayed up all night reading it.”
He was immensely stimulated by Think and Grow Rich. “The concept of reciprocal return – giving as much as you’re getting. I’d never thought of that,” he says. “I was the doggiest of the dogs. I mean I felt I could sell anything to anybody,” and not worry about the value involved.
He had already proved himself to a degree in selling swimming pools, air-conditioning systems and hair dryers (“Hot air – the most exciting thing a salesman can do, sell hot air!”). Now he was so excited that he gave up his job selling hot air, flew east to talk with Napoleon Hill and subsequently joined Paul J. Meyer at the Success Motivation Institute, Waco, Texas. He spent a year with Meyer and nine more on his own in various jobs in that field, learning success techniques and applying them, conceiving new techniques and testing them.
Then, in December 1972, he became a manager for a construction company – at precisely that point in history when the bottom was dropping out of the construction market. In his 10 years of working in the field of motivational techniques, he’d earned between $50,000 and $100,000 a year. And he usually spent as much. (“I liked to live pretty high.”) Suddenly, “I was waiting for all my friends to call with offers of jobs,” he says, “they never called.”
But he was lucky. His life was about to be changed, in part because he had the time and opportunity to change it.
One summer evening in 1975 he was sitting at dinner with some Washington, D.C. area friends who fell into discussing the fact that their employer – a mortgage and financing company – was about to auction off a failure in judgment. It was a high-rise condominium in Ocean City, Md., and not – by far – the most attractive in that resort city. Only 11 units had been sold in three years, and now the condominium market seemed dead. The Washington Post, with its customary prescience, declared that the glut of condos on the market was so great, it would take 10 years to sell out the present buildings. So the mortgage holders figured the best thing they could do was auction off their building at any price – $3 million, $2 million, $1 million – rather than keep the money init tied up for 10 more years of rising interest rates.
Jack Studnicky, the only unemployed guy around the table, had the loudest opinion. He said he thought it was silly, short sighted and stupid to let the building go in an auction even in the most distressed of times without making a strenuous, last-ditch effort to sell the apartments. He was so insistent and so positive that his friends did the only thing possible: They turned to him and said, “OK, wise guy, let’s see what you can do.”
Though he had no experience selling real estate, he knew what he had to do: He had six weeks – till the end of the beach season (which was obviously the end of the selling season) – to sell 15 times as many units as the previous owners had sold in three years. He threw himself, with manic energy, into designing an advertising campaign (“We used Barnum and Bailey techniques.”). He put together a selling crew that rose to positive motivation. He introduced a few changes in selling technique including shifting the end of the prospects’ tour from the front door (“Where they could say, ‘Goodbye,’ and ‘No, thanks,’ easily”) to the hot-paced sales office (“Where they could see other people eager to buy and realize they had to jump in now”). The result was phenomenal: He sold out the entire building in 39 days, and he turned over $55 million to the mortgage firm, and he collected a check for $67,000 for his efforts.
The astonished mortgage firm asked him to take on another failure in the same resort area. The previous owners had failed to sell 22 condominium apartments in two years of trying. Studnicky took over – after the beach season ended – and sold all 22 units in eight days. Then he took over a conversion in Baltimore where the tenants – in an antagonistic, not to say embattled, spirit- had so frustrated the owner that he was able to convert only 1 unit in a year.
Studnicky moved in and sold an astounding 22 units in 38 hours and, at a more measured pace, managed to sell out the entire building in less than five weeks. His technique included offering $2,000 in discounts and redecorating costs to any renter who converted (“It cost more than that to redo each apartment where a renter moved out.”) Then he proposed to the renters an advertising campaign which he had designed that inspired them to make a commitment before somebody from the outside did. Studnicky never used the ad campaign; he never really intended to do so. I just wanted to use it to motivate them to help me – and themselves – instead of fighting all the time” he says.
After that, the assignments rolled in – from Chase Manhattan Mortgage and Realty Trust, Investors Central Management Corp., the Chemical Bank, Fidelco Growth Investors and others. Every job was different. “There is no magic cookie cutter,” he says, but he emerged, nevertheless, with a hard set of priorities.
He insists, for example, on selling only a quality product. (“You can sell a good product at a good price.”) Indeed – he often raises the prices on the condominium units he sells so he can return a gain to his clients higher than they ever expected. (“But you can’t sell a bad product at any price. That’s the way I look at it. I will not do a job for a bank that is not willing to invest in a good product.”)
He spent $100,000 – of the bank’s funds – to fix that 12-story crack in one condo. He spent almost as much redesigning the environment of the building that was built backward developing a park like setting near the entrance; building a swimming pool and “water-fun” setting just off the freight platform and truck exit and then hiding the whole area behind artfully arranged hedges; mounting designs on the blank, brick wall to make it come alive; and building gardens along the driveways so buyers could be guided to the front door – in back of the property, remember – along paths of beauty.
He spent even more on an oceanfront condominium complex that was built in such a way that nobody who bought an apartment in the two high rises had access to a beach. (“Can you imagine calling a condominium ‘The Shores of Monmouth Beach’ and constructing it so that it didn’t have either a shore or a beach?”) He built a boardwalk (“The way the buildings were built, there was no room for a beach.”) and emphasized the scope of the swimming pool on a deck between the buildings. He also took care of ocean leakage into the water supply (“It was known to the townspeople as ‘The Sewers of Monmouth Beach.’”), and he touched up décor and styling. “Now it is simply called ‘The Towers’,” he says. He sold out the 100 apartments still available within six months. And he sold them at an average of $70,000 a unit, considerably more than the developer had expected.
All this reflects the methods Jack Studnicky uses to motivate buyers. But there is another part to the buy-sell equation, and Studnicky puts as much or more effort into the other half – motivating his sales staff.
He starts by making sure that an individual he hires for sales is responsive to his kind of motivation. During job interviews, he engages in a bit of byplay that reveals the applicant’s predilection toward positive thinking. As he’s interviewing, Studnicky tells him, “Something important has come up and I’ll have to leave you for a few minutes.” While the applicant is alone in the office, Studnicky starts playing a motivational tape, “Usually The Strangest Secret by Earl Nightingale,” he says.
When he returns to the office a half-hour or so later, Studnicky can see at a glance whether the applicant has listened to the tape all the way through. Then, in conversation, Studnicky will ask him if he liked it. “If he says, ‘Oh, yeah, man, I’ve heard that before,’ I’ll press him to find out when and where and what he really thinks of the concept,” Studnicky says. He does not tell the applicant it’s something around which he’s built his business. Instead, he lets him express himself.
“If he thinks that it’s all hogwash, that all this positive thinking is garbage, then that’s the end of it as far as I’m concerned,” he says. “I’ll be courteous, but I’ll get him out of my hair as fast as I can. There are enough people in this world telling me what can’t be done. I’m interested in being associated with people who say, ‘Hey, yeah, it’s going to be difficult, but I’m going to do it!” If, on the other hand, the applicant can talk about positive thinking and relate to it, “I’ll know he has a fiber I want in my company.”
Studnicky works carefully to motivate his people in a particular way, concentrating on building attitudes. “We show the individual the possibility of getting things done and how they can be done. We get an individual to look to his potential rather than his problems, to look at the strength within him rather than to his weaknesses. We want him to look to the power within him.”
He tries to rid salespeople of the negative conditioning that develops in childhood (“Children are taught first the meaning of ‘no.’ And ‘don’t’ and ‘you can’t’ and ‘you mustn’t.’”) and replace it with positive feedback. “We don’t encourage even casually negative conversations among ourselves, particularly about things nobody can do anything about,” he says. Such as the dawning of a rain- or snow-swept day, when few prospects are likely to come into the building? “Yes,” he responds, “that kind of thing. In fact, we switch quickly to the positive. ‘Hey, here’s a great opportunity. The day is bad, and all our best prospects are probably at home. They won’t much want to go out in bad weather, so we can get on the phone and follow up by discussing their visits here.’”
But with Studnicky, it is not a matter of just building positive attitudes and creating a positive office environment for making those calls. The idea is to develop an atmosphere in which they can be made successfully. “We want to start out the day with all our people on an ‘up,’” says Studnicky. Every day, the sales manager for a particular task force spends at least 15 to 20 minutes talking with each person on his sales force about the prospects he’s seen – those 50 or so contact cards almost every sales person keeps in his prospect file.
“Before he makes any phone calls, we have him grade those prospects,” says Studnicky. With the new salespeople that means paying close attention to their “drop” files, if only because they reflect a “give-up,” or negative, attitude. Studnicky cites the way a sales manager will look at the drop file: “Why did you drop this one? Why did you drop that one? You’ve got a problem; here’s how you convert that problem into a live prospect… Now, are you sure you want to drop that prospect?”
With careful review, says Studnicky, the salesperson will, on his own, decide to put that prospect back into the “active” file with the thought, “Here’s how I’m going to handle that one. And maybe that’ll give me an edge when going after the next one,” says Studnicky: “That’s inner motivation. That’s working on a person’s attitude. That’s showing him how things can be done and done successfully. We get each person to look at his potential rather than at his down side.”
With more experienced salespeople, the grading process is a continual one. Mentally, he begins sorting out the prospects – whom to go after first and how, what better way to approach a reluctant buyer. The sales manager, to refresh the salesperson’s attitude on how to handle difficult problems, might still talk with him about his drop cards. “But he’ll get to the key sentence a little faster than with the newer salespeople,” says Studnicky.
That key sentence? “Now, let’s look at your ‘hot’ cards.” Naturally, every sales person is eager to talk about these. He’s eager to show how close he is to a really big sale. All talk about these cards with growing enthusiasm. “So whom do we have him call first?” ask Studnicky. “The hot prospects, of course!” That gets every salesperson started out on an up-without neglecting the problem-solving aspects of his work.
Jack Studnicky’s salespeople have another reason to grade their prospects continually. He has developed a reward system based not only on their positive thinking but also on their ability to discern who is the most promising among their prospects. Studnicky pays a commission not on sales but on sales efficiency.
The system is based on the extensive research he does on every building he salvages. (“Research! Research! Research! That’s the name of this game. When we do something, we know why we do it. We don’t just throw it all up against the wall to see what sticks.”) From it, he develops highly detailed projections of every possible cost – including the cost of sales.
“I know what it costs me to get every person to walk into this building.” He says, while sitting in his company headquarters in a “problem building” in New York City. “If it costs me $60 for a prospect and I have a salesperson who talks to 20 people before he makes a sale, I know my sales cost on that unit is $1,200. But if I have a salesperson who talks to only 10 prospects before making a sale, that unit costs only $600 to sell. So the salesperson who costs me only $600 a sale gets a better commission than the one who costs $1,200.”
He pauses for a moment and weights the values of this system. “I don’t want to pay a guy just because he makes sales,” he goes on. “I want to pay him because he makes the most of himself, because he’s found a way to make himself more efficient. I like to reward people for their efficiency, for their best efforts, rather than because they’re trying to be only as good as everybody else.”
This reward system applies to his sales managers, too. “Traditionally, a sales manager is paid a bonus – an override on every sale,” says Studnicky. “I don’t pay a person an override just because he’s a sales manager. Because he’s got the title doesn’t mean he automatically gets a bonus. He gets the override only if all his salespeople are efficient.”
Studnicky cites an example. If he’s determined that 1 sale in every 15 prospects will return what he needs for his client, who pays him a fee for his work, he tells his sales manager that Studnicky’s company will pay an override of $200 a unit if the sales staff does on the average, better than that – 1 in 14 or better. If the salespeople can barely achieve that basic goal, say 1 in 15 to 1 in 19 – then he’ll get a $100 override. And if they don’t come close – say 1 in 20 – he’ll get no bonus at all.
“So what is the sales manager going to do?” asks Studnicky. “If he’s got a person who’s selling 1 in 12, he’s going to encourage him, try to use him a little more. If he’s got another who’s selling 1 in 17, he’s going to try to get him to perform a little better, a little more efficiently for both their sakes. And if he’s got a sales person who’s selling maybe 1 in 23, what’s he going to do? He’s going to get that salesperson sharper quick, or he’s going to get him out of there and get somebody in who’s more efficient.”
Studnicky’s brand of motivation coupled with his reliance on positive thinking has made it possible for him to reap the rewards of his labors. Since beginning in 1975, Studnicky’s company which now has a staff of nearly 70, has grown beyond that of a mere salvager of distressed property. Today, it is involved in every aspect of land development, from feasibility studies to the selling of completed building units.
With all this success, Jack Studnicky has not forgotten that rain-swept day in San Francisco when he glanced in a bookstore window and saw Think and Grow Rich. “Across the top of the cover of that book,” he says, “I read a line that said, ‘This book could be worth a million dollars to you,’ and it was.”
Vol. 26, No. 10. October 1979
