Jordan Belfort, the Wolf of Wall Street | BCBusiness
Jordan Belfort, the real man behind The Wolf of Wall Street, the Hollywood film starring Leonardo DiCaprio.
Jordan Belfort talks about resurfacing in the business world after his notorious fraud charges, and shares the details of his ethical sales tactics
On May 1 controversial former Wall Street broker Jordan Belfort—the real Wolf of Wall Street—is coming to the Vancouver Convention Centre to share the details of his ethical sales strategies and persuasion tactics, which he has dubbed the Straight Line Persuasion System. After spending 22 months in prison for fraud crimes, Belfort has made a business out of being a changed man. He now travels as a motivational speaker, dispensing advice on how to succeed in business.
BCBusiness caught up with Belfort to talk about staying ethical in sales and breaking back into business after his time in prison.
I think it’s fair to say that your reputation precedes you, especially since there’s a book and a Hollywood film documenting the most scandalous time in your life. So how do you earn people’s trust in business when they know what you’re capable of?
It’s been remarkably easy to earn people’s trust because I think there are two kinds of people in the world: those that believe in redemption and forgiveness and will judge a person by the way he’s acting now, and there are those that are not believers in redemption and those people who will say a leopard never changes his spots. Those people will not trust me. I think that’s great. I don’t think they should. I’m not trying to make anyone trust me who doesn’t want to. There are more than enough people in the world who believe in redemption and forgiveness and are willing to have an open mind. Those are the people that I do business with.
Did you have any breakthrough moments when you started reaching out to people in business again?
There was a couple. Surprisingly, it was never that hard. Remember, you don’t know who doesn’t hire you because they don’t trust you. All I know is the ones who did hire me.
Richard Branson was one of the major breakthroughs. Very, very early on I went to Australia and I gave a speech, and Virgin sponsored me. Richard believes in redemption and you know, he’s just an amazing guy. He sponsored me and I gave a speech to 500 people at Virgin and he was so impressed he flew me to his house in Makepeace Island by Noosa, Australia. Lo and behold, a month later all of a sudden all these videos pop on YouTube. They took my speech and cut it up into like 13 videos and that just changed my business completely. That was one breakthrough.
Then Leo [DiCaprio], of course, with the movie. Leo gave me testimonial. That was a great thing. Overall I think that it was a lot of just hard work and not being afraid of the rejection and so many negative articles at one point, then the articles started to turn.
I’m never one to hide from my past. I don’t try to say, “Oh, I wasn’t that bad…” Yeah, I made those mistakes. But I think that gives me a platform to really go out there. I also have the skill sets to make a lot of money and no one denies my ability to train salespeople and to market. So, I sort of know the mistakes, the pitfalls, and I know how to create success as well. I think it’s a very powerful message and a very appealing message. When I get on stage I literally bang ethics and integrity. For me, it destroyed me. Today I came back to being that person my parents sent out into the world. It wasn’t hard for me to now live a life of ethics and integrity because that’s how I was raised. I lost my soul on Wall Street. I don’t blame Wall Street. I blame myself. I’m not the only one that loses their soul, but I was able to thankfully get it back and become the person I once was.
At your event in Vancouver you’re going to be speaking to the crowd about ethical sales strategies and persuasion tactics. The art of persuasion, I would say, is inherently in a grey area. It can involve some form of manipulation or maybe exaggeration to serve your purpose. How do you determine whether or not you’re being ethical?
That’s a great question. First of all, I won’t be just going through sales, I’ll also be discussing entrepreneurship, you know, business-building strategies. In terms of the sale, that’s a very good question. Here’s the answer: there’s very easy ways to avoid the pitfalls of unethical persuading. Number one, it starts in your own heart. If you’re out there and you’re looking to be, excuse my language, a scumbag, and you have ill intent—that’s just bad, that’s a sociopath. Let’s take the people that have good intent that get lost and they make mistakes. There’s some very easy gut checks to stop you from committing any sort of negative persuasion. One is: don’t sell things to people that they don’t need. You learn how to become an expert question-asker, then you identify not just a person’s needs, but their beliefs, their values, any pain they have, and then if you can’t fill that need—let’s say your product doesn’t match their problem—then you don’t try to sell them something. The way to avoid that is to ask lots of questions to find out what people truly need and if you can’t fill the need, send them to someone that can. The loyalty that that creates, then you have a customer for life because they’ll go back to you. It’s a long-term view of being a salesman.
The next aspect of it, let’s say someone does need what you have—don’t try to shove 10 times as much of it down their throat because you can make more commission. Sell people what they need and not more than they need.
The third, this is something again with the Straight Line that’s powerful: salesman typically exaggerate and they lie because they’ve run out of things to say. If someone’s trying to do the right thing and they go off the reservation of things to say it’s because they are not adequately trained in how to communicate what they have in a way that’s elegant, a way that’s truthful, honest and that’s what the Straight Line is. It shows you how to strategically prepare so that you don’t run out of smart things to say. When you run out of smart things to say as a salesperson you start saying stupid shit and you start making things up. Before you go into a situation you want to know all the benefits of your product, you want to be able to talk about it in an intelligent way. Not just once but four or five different patterns because people don’t always buy in the beginning.
Also, with the Straight Line System we don’t just focus on the product, we focus on how do you sell yourself, how do you sell the company that stands behind you. What happens very often is that the reason people aren’t buying is not because they’re uncertain about the product; they’re uncertain about the salesperson or uncertain about the company that’s behind the product.
How much of the Straight Line Persuasion System is made up from the way you used to do business, and how much is from new strategies that you’ve developed?
The cornerstone of it is exactly how it was in the beginning. What I was doing was three of the things I just mentioned: I wasn’t just trying to sell them the product, I was selling myself, I was selling the company behind the product. Those three elements line up. I don’t care what you’re selling, they line up in every sale. Whether it’s an idea, a concept, whether you’re selling skincare products, real estate—those elements must line up and they also must line up not just logically, but also emotionally. People don’t buy on logic; they buy on emotion. They justify with logic. What happens is when you learn those three elements and they all have to be satisfied in the client’s mind logically and emotionally. That’s the code that I cracked back in 1989.
The system developed over maybe three months to a year. I would give two meetings a day every day and the system would come out of me, I was channeling it. I had all these great ideas and connections I was making and the kids would tape me and then transcribe it—it became a manual. That was how the firm grew. When I started, for many years I didn’t want to teach it because I was blown away by what happened and how off course it went. When I ultimately started teaching it I went through the code, I went through the system line by line and I removed anything that I thought was manipulative or could be used that way. I did change the system. I took out all the stuff that was in the grey.
In the movie when you arrive at the penny stock firm, the entire team is completely entranced listening to you do your sales pitch on the phone, and you succeed with the first guy that you call up. That skill and that swagger seem innate. Do you really believe that this is something that can be taught?
Absolutely, 100 per cent, and I do that. I get at least I would 50-100 emails a day [from people about] how I’ve changed their lives. They went through the system, they could never close, now they’re closers. Now that being said, obviously yes, I possess a skill, an innate skill. There are other people who come at all different levels. Some are terrible closers; they don’t have any natural talent. Then there others that are really good, they’re naturals, they just need to be shaped. They don’t know how to use what they have naturally. I could take any person that has desire and teach them to be receptive, great closers. However, the one with the natural ability that goes with the system, yes, they will probably maybe get to a little bit of a higher level so long as they’re prepared to work really, really hard. Sales are not just about closing, sales is also about working really hard. How many calls are you going to make? How many clients are you going to visit? How is your customer service? Sometimes salespeople that are great closers are terrible at developing long-term relationships—they don’t have a lot of repeat business. I wouldn’t say just because you’re a natural closer means you’re the highest-paid person in your industry. You’ve got to have both. You’ve got to be able to close, and the ability to service your clients and care about your client for the long term. They’re very different things and they’re very different skill sets.
It seems that some elements of your system have come from things that you have learned from your mistakes and from failure, but you’ve also learned a lot of things from good decisions and success. For you, which offers the greatest lessons? Is it the mistakes and failures or is it the good decisions and success in your past?
When it comes to entrepreneurship, the mistakes. I’ve learned more from my mistakes than I have from my success. I’ve learned a lot from my success too, but I’ll tell you, my first business, that company that I had—as the thing was collapsing you still had to learn, had to magnify everything you did wrong. It’s such a wake-up call. I think that the lessons are dramatic, they’re amazing. However, that’s only if you are learning them. Very often that’s part of what’s called “failing elegantly.” When I teach entrepreneurship I divide it into two categories, one side is called failing elegantly. That means learning how to go out as an entrepreneur, take action, test an idea and be wrong and not have it destroy you so you can then look at the lessons and maximize on the lessons and minimize on the financial destruction. On the other side of the equation is something called “succeeding wildly.” Meaning, when you have something small and it’s working, how do you grow it, how do you expand it, how do you leverage it, how do you take a small business and turn it into a big business?
You need to have both skills. I think a lot of people lack both. You’re going to be wrong more than you’re right as an entrepreneur. Very often as an entrepreneur, the way you start things in the beginning are not how it turns out in the real world, so you need to be nimble. You need to be able to move and turn quickly and redirect your focus when things are not working. If you haven’t done those things that allow you to fail elegantly, what happens is you get so destroyed by the financial problems that you can’t do anything and you become paralyzed and you end up going bankrupt. So I teach both parts of that equation.
I have one last question for you. Are you going to ask someone to sell you a pen at your presentation in Vancouver?
(Laughs) I might, you know. The Sell the Pen thing, I love that because what happens is it’s the classic example of the high-pressure salesperson not understanding what sales is really all about. When I ask someone to sell me a pen, I’m praying that they’re not going to say, “This pen is great. This pen is amazing. This pen is unbelievable.” Because that’s what an inexperienced salesman does. What an exceptional salesman does is they turn the question around and say, “Tell me, Jordan, how long have you been in the market for a pen?” And now they control the conversation and they make you say, “Oh, about six months.” And maybe you say, “I’m not in the market for a pen.” “Oh really? Great, have a nice day. You know anybody who is in the market for a pen?” I don’t want to sell people things they don’t need, and that’s where the ethics comes in. Someone that doesn’t understand ethical sales will try to jam a pen down your throat whether you need it or not, versus a smart, well-polished salesperson will say, “Tell me, how long have you been in the market for a pen? Do you use is mostly for business or personal? In the past, what was your favourite pen? What are the features that you liked about it?” Then all of a sudden you know everything about the person and you say, “John, from what you said to me, this is the perfect pen for you, let me tell you why.” Then you can sell them the pen. Without the first half you’re like an idiot.
This interview has been edited and condensed.