Prefer to read? (Transcript)
Speaker 1 00:12 Good morning everyone. This is, you’re listening to business and legal talk with Leah and Claudia. So here, power talk am 30, 60. Good morning Claudine. Good morning. How are you on doing great swimming, swimming again and again, it’s another Saturday. It was a, it was actually a interesting drive this morning. And, um, how was your drive? Mine was great, but mine’s not nearly as far as yours. That’s true. That’s true. So what’s happening? So, um, if you’re tuning into the show, uh, we, we actually are passionate about helping businesses be profitable and sustainable and, uh, if that is the theme and you know, what we promise to give you actionable stuff that we’re not just, you know, conceptually talking about running a business, you know, or, or academically what we’re actually doing. We’re practitioners, we run in this businesses ourselves and we’re giving you the stuff that you need to.
Speaker 1 01:04 So today we have a great show. Be fantastic. No, this is a really, really good subject. So what are we talking about today? Marketing. Digital marketing. And it’s such an incredible subject because so many people who are in business, um, our various age groups and it’s the, you know, the younger generation is really on top of this stuff. And then there’s others of us who know about it but don’t really know it. Yeah. So, so we were talking about that and before we get into that, I like to kind of do a quick recap. I mean last show was heavy last week. We got some great feedback, we got some great feedback and it was good. Was you know, a lot of sensitive areas. You know, we have this whole thing about social media and hiring and honestly any, and it’s changing and I’m so grateful that you’re in the show and you know this stuff well and we’ll be circling back around on that subject.
Speaker 1 01:51 I’m sure it’s just a huge subject and you can’t quite tackle it all in, in the, you know, our time that we have. But, um, if, if anybody picked up anything or, or if it sparked any questions in your, in your mind, uh, what we discussed last week, please give us a call where, um, well my office, the Sharon law firm@twoohninefourtwoseventwentytwohundredoryoucanreachusthroughthewebsiteatsharon-law.com and that’s S H E R R O n-law.com man, that comes so naturally for you. Now you’re a pro, you’re a seasoned pro, you gotta throw it out there as we learning. So, um, yeah, you know, and my side is, it’s, um, you know, it’s like the yin and the yang, you know, you come about being sustainable, um, and really protecting against what may never happen, but you gotta be ready for it. And I’m all about helping you be profitable, right. And, uh, you know, we have some great feedback. I, I’m, you know, I’m getting some hits on social media and basically how to scale a business profitably. And if you have any questions, go to www.greenlandhq.com or call our office (559) 207-3148. So, uh, okay about that. So let’s get into marketing. I mean, what do you, what do we know about marketing?
Speaker 2 03:04 You know, you, you know, what you learned. And so for those of us who came from a different generation, um, and, uh, we were kind of talking about this briefly before the show that, you know, years ago it used to be your print marketing and you ran an ad in the newspaper or you had the yellow pages and, and um, maybe a billboard who remember those. Uh, they’re still there, but there’s a whole new world out there now and it’s an entirely different world. And the more and more business is going that direction and a lot of it I think is, is driven by the younger generation or the generation that’s really intrigued by technology and they stay up on it. But there’s, there’s a lot of people who are, you know, busy doing their business and, um, you know, to learn that entire spectrum of digital marketing is difficult. It’s, it’s a lot.
Speaker 1 03:49 It’s a lot. And, and you know what I mean? I, I’ve been in business and in front of, you know, since I graduated from college 25 years ago and, uh, I’ve seen this dramatic change and there’s like basic these gaps in, uh, this, um, gaps in knowledge and, uh, in this different age groups. Um, what I remember, I remember working for a company and what the marketing department would do is they, they would show up to events, you know, we had the booth, um, we’ll, you know, we’ll, we’ll, we’ll ship that out to the site and we’ll meet people and then we mail them letters right. To email first. Direct mail hasn’t really gone away. It’s just changed. Right, right. And then it was this whole email and then he became social media. And then now is, you know, a lot of the things have become commoditized. Commoditized, right. And I think from, from where I usually go is like, if you’re going to spend money on something, you need to understand metrics and you need to know how to do it well because you want to just put money into something we, you have to understand and you have to talk to people that know what they’re talking about.
Speaker 2 04:58 That’s it. And it’s really key to get connected with the people. And I think that’s the case in all businesses. And we’ve talked about that even with our type of business and the services that we provide. You’ve got to get connected with the right people because you don’t know that you, you didn’t until after it’s done and the money spent.
Speaker 1 05:15 So our guest today, Dave Martin from NetZero media, we’re going to talk a little bit about, you know, we’re going to bring him in and he’s just eager to get on the phone. I mean, to get with us right now. He’s there doing pushups right now in the studio, salivating and forming a DeMar, talking about ready, ready to talk about marketing. But one thing he’s, they said is his marketing is broken. Wow. I don’t even know what to matter. I don’t either. I don’t know that this is enough thought provocative. It is why, you know, why is marketing broken today or we’re going to be talking about that concept England. Um, so you will know by the end of our show if marketing is broken
Speaker 2 05:52 and I hope you’re going to fill us in a little bit on how we relate marketing to spending for marketing because those two are connected because you can throw a lot of money out the window.
Speaker 1 06:01 They’ve kind of look in my way. Yes, absolutely. And lifetime value, you know, um, I think everything that we do now, you know, it and, and everything that we do, the in the, you know, if you’re going to acquire a customer in your world, you know, a customer could be very profitable and you want a lifetime relationships, right? A mutually beneficial relationship with a client, right? That can use your services for years to come. So what does it mean to you as an attorney and may, may it’s different than what it means to me as, as a, as a CFO and as an accountant. But if you’re in a restaurant, you know, what is it, what is the lifetime value? And we are going to be talking about that today with, with Dave, um, and against the cost of acquiring or the cost of acquisition for that particular client.
Speaker 1 06:46 Right. So I have spent, dabbled a little bit into the world of VCs and you know, you know, you’re hitting a recurring theme in our show. I’m always talking about raising capital and the whole concept of the sharks, you know, in the shark tank and the, the, you know, in, in the sharps looking at, you know, a potential, uh, uh, an entrepreneur and says, well, great. And tell me about the lifetime value of your customer divided by into the customer in a customer, acquiring a customer. Not right. There are different names for it. Uh, you know, Dave has a CPA as also known as, you know, uh, see a CAC, you know, CAC. Yeah.
Speaker 2 07:17 Um, one of the things that I, I’m kind of interested to learn today and I hope we get to talk about it, um, and time allows is the amount of time digital marketing, um, requires. So it used to be when you put a print out out, you worked with your advertiser, you know, whoever was running, you know, whatever magazine it was, and they come up with an ad and it give you a couple of proofs and you proof it and you, you green light it and off it goes. Digital marketing is a completely different, um, time spent, um, making, you know, being on social media, commenting, liking pages and things like that. So I, I’m, I’m going to be interested to see, um, what that is now and talk about that a little bit. Okay. So the question is, should a company
Speaker 1 08:02 devote resources to marketing and the assets? Absolutely,
Speaker 2 08:05 yes. Oh, of course. Of course. Absolutely. But then be clear on what resources they are. Correct. And you know, I, I’ve talked to enough people that when they start struggling in business, the first thing they do, they cut the marketing budget. Yes. And then, you know, I’ve done this and it’s
Speaker 1 08:20 sense, right? But you can’t do that. Can’t do it. And it’s weird. It’s like, it’s basically you’re cutting the air supply of your business in your businesses. But a lot of people do that. Yeah. Right. And because of the, I need to say my business struggling, so I’m going to stop marketing. So what you’re really saying is I want to stop acquiring customers, right. And are going to keep the ones that I have and I’m going to cross my fingers that they don’t die and I can still have a business a year from now, a month when things turn around and then the economy turns around.
Speaker 2 08:47 Right. I want to start marketing to Gary, difficult to continue to spend that money when things are slowing down. So, um, you know, I,
Speaker 1 08:56 um, I’m all about that. And um,
Speaker 3 08:59 um,
Speaker 1 09:00 so we’re going to be talking about the lifetime value of customers though. I guess I’ve got a great story here that David’s going to talk to us about, about Dropbox. You know, this whole phenomenon of Dropbox and, and really those unicorn companies, Dropbox, we use it a lot. Yeah, me too. And there’s a story to tell and you know, Dave is going to tell us what Airbnb, you know, the whole thing about the company almost went out of business and it was funded by credit cards and they did something and their marketing. And I am personally interested in knowing how those two companies went because I think the biggest concern for business owners is how do we invest in this? I considered marketing not spend but an investment. Yes. Right. Um, and then how, how is that gonna you know, help us out and in today’s market, right. So, um,
Speaker 2 09:48 yeah. And how do you compete against the giants? Yeah. How do you compete against the, I don’t know. I then, this is such a new world to me. That’s why I’m so excited about Dave being here. It’s, you know, I’ve talked to some people and I know we had Harpreet on a number of weeks ago and he’s an associate in our office. Um, but, and he had some good ideas.
Speaker 1 10:05 He has on this too. All right, so we’re finishing up our first segment. You listen it to business and legal talk with Leah and Claudine and we’ll be right back. Stay tuned
Speaker 0 10:22 like the legend of the thing. all right. Welcome back. Gosh, I’m so excited.
Speaker 1 10:54 I dunno about you. But, uh, without further ado, uh, Claudine, let’s welcome our guests today. We have on the show Dave Martin. Say hello, Dave. Hello everybody. Hey. So David’s here. Let me tell you a little bit about Dave. Um, and he’s impressive background. So we had over 15 years of experience implementing data driven marketing and sales stacks as David’s routinely sought after for his ability to scale companies. Oh, my favorite topic with growth hacking and inbound marketing protocols. Dave is dove sassed with understanding what makes each organization unique in a covering their specific obstacles to growth as a winner of the 40 under 40 award, they’ve holds an MBA from a top 45 business school and was featured speaker on the Google advertising on South by Southwest the nation’s largest interactive conference. Oh boy. Do you have a resume? And that’s me. That’s you. Come on that guy. Well you said you make something up that’s done a pretty good, well they were happy to have you on this show. So, um, you know, so just how you doing what’s happening. Um, just tell us a little bit about yourself, you know,
Speaker 4 11:58 that I probably haven’t covered yet. Yeah. Well thank you so much. First of all for having me here. This is awesome you guys. You guys are doing some good work here. Just hearing what you’re talking about. So thank you. Well, so Nettra media, what exactly is that? Well, it’s my agency that I started about seven years ago. Okay. And so we focused really on trying to empower small to medium sized businesses with marketing. Very simply put, because a, as Claudine was saying, it’s very, very challenging right now to determine where best to put your money. Right? And to some company spending even $500 a month, maybe a lot, or if it’s 10,000 it doesn’t matter. Whatever you’re spending, you want to ensure a return because there’s so many options to spend money in different places. A lot of companies really kind of take a crap shoot approach and a, let me cross my fingers and hope this works and doesn’t suck to be a business owner and to be like, I’m me, me, me, I know what I do.
Speaker 4 13:02 You know, like let’s say whatever. I make Ray band sunglasses for a living. I’m really good at making these sunglasses. But the marketing side, I’m crossing my fingers on it. It’s just a horrible feeling. And so that’s really what we help strategize with companies to make them feel empowered and past that, creating a lot of clients for them. Right? That’s what people like me. I know just what you’re saying is, you know, we have a completely different world that we function in on a day to day basis, which is our job. And you know, for people like me, I want to know, okay, how much a month and are you going to handle it all? Do it right. Do I have, what? Do I have to do something a little bit or nothing? Go confused. People do what now?
Speaker 1 13:47 Trademark. Yeah. So, um, okay. Hey, by the way, if you’re dry, if you just got into, you know, your car and you’re driving, you know, if you have a question about marketing today, I need, we, we want you to call, we want to hear your questions. That studio line is (209) 551-3483 two or nine five five one three four, eight three. Call us and we’ll, you know, we’ll, we’ll get your question answered. So here’s the biggest question right now. Marketing is broken. Is it marketing is
Speaker 4 14:15 what th what, what’s going on? You know, that’s a, it’s a great statement because in many ways it is when you compare to how marketing was before. Um, we as a little background, we’ve spent just over $19 million between Facebook and Google. So we have a little bit of experience on the platforms and then outside of just those two platforms. But as you were saying earlier, Claudine, about if it was 1989 and I am a attorney, let’s say I’m a personal injury attorney and I’m pretty happy with the business I have, but really want to blow it up. Well what do I do? I go to the local yellow pages, I get three double truck ads, which are basically having both sides of the page in color, which probably, and then maybe the front page, which might cost 10 grand a month. But who cares if it’s producing three to four clients a month more than paying for itself.
Speaker 4 15:12 And that’s it. Set it, forget it. Here’s the ad. I designed it. It’s done. Well. That’s the same even with television and billboards, things like that. What’s happened though in the last, uh, I’d say 15 years, is that the market is really fragmented as far as how you can reach people. And so it’s a double edged sword in some ways. It’s amazing. So let’s say, uh, Leo, you are totally into British Bulldogs. You know, the big British Bulldogs with the saliva and just that you’re into him, you’re just so into him. But none of your friends are, and they think, dude, why are you so into your British bulldog? You take it everywhere you go, you go to dog parks, all that stuff. Well then Leo hops on Facebook and finds a group of people, the British bulldog, lovers of the central Valley. Ah, and the next thing you know, you’re going to all these British bulldog meetings, these meetups.
Speaker 4 16:07 And so in a sense, and in some ways with digital marketing, it’s allowed you to target people much, much better. But that’s the, that’s also the issue is trying to target the kinds of people you’re trying to get to and as effectively as you can. Just because you target them doesn’t necessarily mean they’re going to reciprocate. And how much does it cost to target people? So specifically if I hear you correctly, then the question number one is who am I targeting? Right? And the question number two is, how do I get there? Yeah, yeah, that’s a big, it’s a big part because the old, what call it old school for the sake, but the old school ways of doing marketing, um, are very shotgun approach. Right? So let’s say a billboard, um, let’s say a Lennar homes is doing a billboard on the 99 and it says whatever the name of a community is starting in the low four hundreds or whatever.
Speaker 4 17:05 Um, if you ask the owner of Lennar, Hey, you’re paying $1,000 a month for that billboard, how much money is that billboard making? You had no idea he was going to be like, I dunno. Right, right. You’re a brand awareness and so, and so that’s, that’s the issue is that that’s not necessarily a bad thing if roughly 50% or more of people driving by or a potential customer. But let’s say, and let’s say you’re selling a business insurance or something a little more specific. Yeah. Uh, or you’re a sporting goods store. Doing a billboard is tough because for every 10 people that drive by, maybe one my interested maybe. Yeah. So it’s a harder, it’s a harder target. So the idea is you try to figure out where people are and
Speaker 2 17:50 how best to target them. So let me ask you, is there a difference in who you’re reaching on the different platforms? So say Instagram or Twitter or Facebook. Are you, when you say, do you look at different industries and you say you’re more suited, suited for a Facebook type platform, or maybe, you know, Leo’s business is more suited for, I dunno,
Speaker 4 18:12 Instagram, right? For example, well this is where, this is where it gets really fun. All right. Yeah. So for instance, I’m not gonna, I won’t name any, any company, any of our client names. Um, but we have a client that they’re a solar company. Like there’s so many solar companies, but there’s, the difference with them is there are, there are solar subcontractor. Okay. All right. So their end, they’re targeting other solar companies because they want those companies to use them. When business gets too much, Hey, I’ll use a sub to get it done and get it done right. All that kind of stuff. Right? So they came to us saying, Hey, I want to target other solar companies. Well, you could do Google ads, which are the ads that appear when you’re doing a Google search, the text based ads. But the hard part of that is most of the ads that most of those companies are competing for everybody for a, I’m sorry, consumers like us, right?
Speaker 4 19:09 We need solar on our house. They’re trying to go for us. So the differences, this client, they’re not targeting end user consumers like us, they’re targeting contractors. So what we did is we created a campaign on Facebook because Facebook lets you know, um, what your title is. They let us know where you work. Um, let, let me, let me do a quick public announcement. Public service announcement about Facebook really quick. All right. Okay. So again, let’s pretend it’s 1989 and we’re, we’re, we’re marveling at the double truck ad in the yellow pages that we just put in there. Oh, that’s so great. And now we’re gonna go over to you and say, Hey, listen, what if in 30 years there’s going to be a product that people willingly put their information in? I mean like where they like to shop, uh, what cars they love, what sports teams they like, um, or they work, all that kind of stuff.
Speaker 4 20:04 Marketers are able to access that information. They willingly put it in and not just once, like every day you’re going to be like, you’re smoking. No way. That’s not, no, that’s not going to happen. But that’s exactly what Facebook is. And so you utilizing Facebook’s platform for the solar subcontractor, we were able to connect them with a ton of solar companies and they’ve just blown up. They’ve blown up because of it. And so getting back to the one thing that Leo had said, um, one of the reasons that marketing is, is broken in a sense is yes, the pendulum is swung from traditional advertising to digital and everybody’s like, Oh, digital is better. Digital’s better. In some ways it could be more cost effective, but in other ways it may not be. I have clients that with Google ads, and again we’ve spent a ton of money on Google, Google has become cost prohibitive because the cost for a click for Google ad, you maybe have to get four or five clicks to create a lead and you need four or five leads to create a sale, right?
Speaker 4 21:08 The next thing you know, you spent $2,000 in clicks and if you make $2,000 on a client lifetime, it doesn’t make sense. Is that because Google has gotten more expensive over the years? Well, it has because with Google ads, and again these are the ads that when you’re on Google, the little text base has it are very specific to your search that appear, right? Those were cost per click and so what happens is it’s on a, it’s on an auction based system, so if I’m willing to bid a dollar for a click and my competitor’s a dollar 25 but what it does is it pushes up the cost per click based on what people are willing to bid on it. See this whole, the, the, just, just that explanation right there, it makes somebody like me just makes my head spin because I’m so busy trying to go, let me bring it back.
Speaker 4 21:53 Cause I really, my goal, my goal in being here, first of all, thank you for inviting me, is I don’t want people to think digital marketing is Oh, so advanced and Oh, it’s, I’m just never going to have a chance. My goal is to make it very attainable. And so here’s my point, is that all of marketing, I don’t care what it is, traditional digital, whatever, right? It boils down to two things. Increasing the lifetime value of your customer and decreasing their cost to acquire. That’s it. Huge right there. That is drop the Mike moment, right? That’s a definitely a drop shot. Okay. We’re going to have to repeat that.
Speaker 1 22:30 Well, yeah. Well, we’re going to, I’m actually, we’re about to go on break soon. And, um, Dave, I mean, you know, being a guest and you so much knowledge, I, I’m already gonna ask you to come back, by the way. So we want to have you here and you know, perhaps in, you know, next quarter, but, um, the www.net tra media. How do we find you, Dave, if somebody had questions?
Speaker 4 22:51 Yeah, so you would just go to Nettra media. Nettra is in as in Nancy, E T T R a media.com.
Speaker 1 22:59 All right, so here’s what’s coming next guys. So we’re going to be talking about Dropbox. I want to know about this whole thing about Dropbox. Cause I’m a big fan. I want to know about Airbnb. What was the deal with that? So, um, and um, we also want to know about this whole thing about lifetime value. You know, how do you quantify that in the, um,
Speaker 4 23:22 how do you know that going in when you, when you’re looking at what the cost is to acquire them, how do you, how do you quantify the, um, you know, the lifetime
Speaker 1 23:32 value. Okay. So, um, yeah, so that’s that. Um, so here’s a guy who’s been $19 million, uh, of somebody else’s money but has made money for a lot of people. So you are listening to business and legal talk with Leo and Claudine. So here in power talk, K, F I V a M 30 is 60. Stay tuned, we’ll be right back.
Speaker 0 24:10
Speaker 1 24:24 all right everybody, welcome back. You’re listening to business legal talk with Leah. Claudine, heres I’m your host Leila diverted with Greenland advisors, making your show make you profitable. And I got Claudia in here. So it’s about sustainability. Hi, welcome back.
Speaker 4 24:36 Thank you. So Dave, it’s great to have you back. Thank you. Here you are. All right, so let’s get going. We’re talking box, Dropbox. Tell us all about it. The Jews, you know, Dropbox is pretty awesome. Raise your hand if you use Dropbox. If you’re driving, don’t raise your hand. All right. So most people do. Um, and if you don’t use it, listen to why you perhaps shed, you know, makes your life easier. Well, this is a great example of the kinds of things that we help businesses with because ultimately we focused on helping them scale, whether they’re a startup or more, uh, uh, a more established business. We focus on a scale. So Dropbox, about 12 years ago, 13 years ago when they started, they were a fledgling VC venture capital funded company. They had about $3 million. That sounds like a lot of money, but when 95% of it or more is reserved for product development, engineering and hiring people, you have a very minuscule advertising budget now that’s okay.
Speaker 4 25:37 Except they were up against two companies that you might’ve heard of Google and Microsoft, right? Both of them were getting into cloud computing at the same time. And so what Google and Microsoft did is of course do Google ads. Of course, what they did is they bid up the cost per click, so high on Google ads that Dropbox couldn’t do them. They couldn’t do Google ads because again, if they’re paying, let’s say, 10 bucks per lead and to get a sale, they’re paying $100 it eclipsed the amount of money they made lifetime value on a customer. Can you imagine selling a product or service where you can’t even do Google ads or anything because you’re outbid for your own product? That was the situation they found themselves in. So what they did is a survey and the survey was sent out to all their users and it was a simple survey and all it said was, if Dropbox went away today, would you be extremely disappointed, somewhat indifferent or happy?
Speaker 4 26:40 And 40% of the respondents said extremely disappointed. And so it told them, we have something here, right? We have a very loyal following. So concept that is what gave, gave birth to now the, you know, the gold standard referral program. And those of you that have had Dropbox for at least five, six years will remember, um, at the time they’re using the Amazon cloud, you know, cloud computing, they’re using their servers with all their data. All right, well the, the uh, the certain tier they were in, they had a ton of extra space just sitting there. And so they said, Hey, what if we start giving away free space for people that refer others to us? Yeah, let’s try it. So they did it and what they said is, okay, if you love Dropbox refers to one person will double your space. Now let me put this in perspective.
Speaker 4 27:35 10 years ago, Dropbox gave you enough space that was about the same size as your desktop computer at the time gave you, which was what either remember there was like tiny 500 megabytes, megabytes. But the point was it’s like Holy crap, like giving me the same size space that all my computer, but like in the cloud, that’s pretty cool. That’s already a lot of space. But wait, I could double it and it doesn’t cost me anything. One gig. So here’s what happened. My um, Dropbox did this and it took off like wildfire. And what happened was the lifetime value of the average customer increased because the average customer was referring like 2.3 people to Dropbox, which was worth more money to them. So after doing this, it allowed Dropbox to do Google ads again because they made more than Google and Microsoft and their lifetime value of a customer. Right. Just by giving it away. Yeah. The referral program.
Speaker 2 28:36 So, and for those who don’t use Dropbox or don’t really understand the whole premise of it, what it is essentially is the ability to store and interact with information. Um, with that’s not on your computer. So for example, what we use it a lot because we’ll have multiple people working on the same document, so I’ll make revisions and edits and whatnot and then somebody else in my office will log in and take it and make their edits and so forth. Or we can store a whole bunch of stuff that we need to use and look at. We can put it in a file there and everybody can access it. Yeah, it’s, it’s really, really helpful as well. When you have documents that are too big that you’re trying to send and you needed to get it, you know, get somebody else to have access to it and you can’t send it through email because it’s too big. We can drop it in the Dropbox and people can access.
Speaker 4 29:24 Much of our time is much of our time that we work with companies is spent on that kind of thing. As far as understanding what their aha moment is, we like to call it the aha moment of Dropbox is I look on my desktop to see these folders that I’ve been dropping my documents into. Right? All of a sudden there’s a new folder, it says Dropbox on it. So when I put documents into that, not only is it saved to my computer, but it’s also simultaneously saved in the cloud. Correct. So if somebody were to burn my house down, you know, have, heaven forbid, well that document I put in the Dropbox folders is not going to be harmed. That’s right. Which is awesome. But see, that is the aha moment of Dropbox. And that’s where you going to talk about Airbnb next. But you know, but I, yeah, but I wanna think I wanna establish, okay.
Speaker 4 30:13 So if you’re out there and you found questions, this is your time to call. Call this studio a line of five (513) 483-5513 43 we have Dave Martin, founder and CEO of nitro media.com an expert in growth marketing here discussing really how do you really grow your company if your budget, it’s not there and how do you get creative so you increase the lifetime value of your customer. So let’s talk about that. I am a numbers guy and if you know me, I’m going to be figuring out ways how to extract more with less. So to me is, I’m coming from the financing side of things is, so the formulas that I hear, you know, and it’s LTV over a CPA, right? How do you determine what the lifetime value of a customer is? Right, right. Yeah. LTV, lifetime value, CPA cost per acquisition. Um, yeah. So how do you determine what lifetime value is?
Speaker 4 31:10 It depends on the kind of business that you have. Like, let’s say if you’re a HVHC company, a he, he did an air company and your average client is with you for four years and let’s say they spend $150 a year on a preventative maintenance package. Okay. And let’s say you come out, man, on average you’re repairing something twice or once a year for $300 so 150 times four 600 600 plus. Let’s say they do two services during that time at 300 each. So 600 so there’s $1,200 and then you would say, well if I look at 10 co co clients, one out of 10 will buy a $10,000 air conditioning unit. Mm. So then you could say, well if I, if if it’s one out of 10 it’s $10,000 I did that for a reason. So that we can say one, we can assign another thousand per client cause we the aggregate a thousand divided by 10 so there’s a formula another thousand there.
Speaker 4 32:11 So in that situation, what does that about 2,600 bucks? Yeah. So the lifetime value of a customer for an HVHC company in that example is $2,600. So it lets me know if I’m an HVHC company, you don’t want to spend, the rule of thumb is don’t spend more than one third of your lifetime value to acquire a customer. Here’s the takeaway. So in that case, you’d spend, what does that about 850 bucks? Yep. So you’d spend about you spend, Hey, I’ll spend $850 to acquire a customer. Okay, well that helps. If I spend eight 50 a month on Facebook, if I’m producing one customer with that, then boom, I’m making money. Or at least I’m, I’m, well I guess in that case, in that instance I’m, I’m making money but I don’t want to spend more than eight 50. But the goal is when you do any kind of marketing, you’re going to make more than that and you need to be able to track those things as well.
Speaker 4 33:07 So how do you cause, so when you set your customers off for success, you know, and if you’re helping them, um, do you do the work with spreadsheets? How do they, um, and your experience with the customers even know how to, like, do you help them ascertain the lifetime value of their own customers or they, did they really know or do you have to kind of reach them? We have, we always come to where our customers are. Okay. Many people listening right now, this might be like, they’re eating this up because they do a lot of marketing, things like that. Others might be like, man, this kind of sounds good, but you’re losing me on a lot of these things. And so our clients are both of those sides of the spectrum. So we’ll provide and work with you and all these things. Or if you already have a marketing team, we help you and empower you with the numbers and helping you to track them.
Speaker 4 33:57 But the point is you have to track it, right? It’s all about experimentation and tracking, otherwise you’re just throwing money out the window. How do you know it’s working or not? It’s clearly marketing has moved off of art and um, you know, in society and yeah, is clearly, and I think that that’s, that’s probably the key or at least a key, um, of why many people in business now just feel kind of overwhelmed it, you know, back with your example of being in 1989, we were looking at proofs and is the message clear and is the artwork nice? And you know, what kind of feel does it give you when you see it? And it’s, this is really, really changed. So helpful to know if you have potential $10,000 of lifetime value, you know that you don’t want to spend more than a third. Um, all of that. So
Speaker 1 34:47 all right guys, so you’re a, if you’re listening, you’re listening to business and legal talk with Leo and Claudia. We’re talking about growth marketing call, call a studio. We want to hear your questions. Uh, we’re about to go into break, so stay tuned. We’ll be right back.
Speaker 0 34:59
Speaker 1 35:29 welcome back. Uh, Leo here in Claudine business legal talk with Leon. Claudine here, power talk a M 30 60 we’ve talking about marketing, man, I couldn’t stop before the last segment. That was just so much going on. Dave, you made a comment. Oh, when we’re off right now and I want you to just talk about that and the other side of, you know what you were saying about marketing.
Speaker 4 35:48 Yeah. I want to make sure people listening, they might feel like Holy marketing has become like a domain for the nerds, right? Like a domain that love that love numbers and yes, that’s part of it. But the, the art you were talking about before, Claudine, that also is alive and well because I could do marketing is only half of it. Half of it. I could target the most high level, high quality potential clients and push them to your website. But after that, well, what, what do they see on the website? Is there video of you talking, uh, are you, are you positioning your product or service in a very convincing way? The art of that, that is alive and well, people make decisions emotionally and then they justify them rationally. Good to know. Yes, that we’re human is human and that doesn’t, no it doesn’t. It doesn’t change.
Speaker 4 36:47 But what we do is we try to target the right people, but then the other side is the messaging and that just like you tweak the ads to make them perform better. Right. The same thing is with the messaging and what people see. And we see a lot of people using video. We do that a lot with our clients and that really helps to convey value more than just reading words. Right? So that’s, we’re seeing a lot of that and a lot of our campaigns is more, more use of video. So when you work with clients, you come in and you help them assess their goals first of all, and, and their, their lifetime value and the cost of getting it. And then what do you do is, is this, um, S is the relationship with you and a client is an ongoing, a monthly, do we meet once a quarter?
Speaker 4 37:36 How does this all work? Because this is a completely new world. Yeah. And it really depends. It depends on what somebody needs. But typically, yes. Well first, sit down, determine their goals, but then we’ll also look at their data first and foremost and say, okay, what is your lifetime value of your customer? And most business owners listening to me right now are probably going to go shoot if Dave asked me that. I, I don’t even know. Well, it’s like when I think, what was the question you asked me when we first met? Um, and we’ve talked about this in other shows about people’s books, you know, let me see your books. And if people go, well, um, okay, here’s my tax return. Right. But that’s not really what you’re looking for. No,
Speaker 1 38:13 you mean the whole thing about how your business is doing bank balance accounting was, you know, my business is worth what I have in the bank and they’re not really in top of their financials. Uh, yeah. I mean, you get the wrong thing you’re looking at is, yeah. You, you miss the whole point in. And I think that’s it. There is a way to go about each area. There’s a way to go above marketing, just like there’s a to go about accounting and there’s a way, but I think for, you know, for someone like you, Claudine, who has a high level professional service in one of the things that I think when we first met is like, wow, what, what is, what is the potential when you’re talking to somebody, right? If, if you are, what is it worth to a client that you saved them $1 million in a potential lawsuit that didn’t ever happen because you know, what is it worth to a client?
Speaker 1 39:01 It’s in some ways I’m quantifiable, right bullet that we dodged the bullet that you didn’t even know you dodged, that you knew, but they did it right? Might be worth more than the, even the million dollar settlement. They may be worth that you knows, you, you say, in my world, you save people’s businesses, you know, and, uh, while it does no point of me helping somebody make $1 million, uh, and net profit in one year, if their very next year they get sued in the last a million profit and be million dollars in a settlement. Right. So, but to Dave’s point is, um, I, I really liked kind of like the yearning Yan, I get fascinated and fixated on it and on the numbers, but I can afford and I have to look at the whole thing and, you know, perception, this whole thing about perception is, is it true that perception is still everything? Uh, Dave?
Speaker 4 39:47 Sure. In a sense it’s a, it’s a pre-frame. And I, I like to give this example. Um, MIT did a, did a study where they had the first group of students go into a really big classroom, you know, the climb with like stadium seating. Yeah. And before they went in, they told these students all very bright students that the teacher about to see he’s almost going to be kicked out of this school. He is, he’s on probation. He’s really hasn’t been doing very well. He’s just not really good. He’s gotten a lot of bad reviews, but you know, good luck. So they listened to him talk and then at the end they interviewed him. They interviewed all the students saying, okay, so what are your thoughts on the teacher? And largely it was what they, they told them they pre-frame them with of, yeah, he’s really bad.
Speaker 4 40:32 All that kind of stuff. The next group of students, they said, you’re about to sit at a teacher that was runner up for the Nobel prize. He rarely ever speaks, but when he’s here, everybody loves him. And then at the end of that, they interviewed those students and those students had the opposite thing to say like, Oh my gosh, he was amazing. Like, like, like life changing. And so it is often the pre-frame of, you know, what is said about a product before people actually experience it. That changes somebody’s mind about, well, should I call this company or should I call for the service or product or not? Um, it’s the, it’s really the pre-frame of what their, so in newer world, where does that start? This has started with a website. This is star with the, a digital PDF over w where does it start?
Speaker 4 41:17 Does it start with the logo and the branding? Or for every company it’s different. What we try to uncover is what is the cheapest, most cost effective way for somebody to have to understand what my companies, or I should say my client’s companies. Aha moment is, huh? Like for Airbnb, what is their aha moment? It’s tell us about Airbnb since you brought that up. Yeah. So for Airbnb, their aha moment is, wait a second. I don’t have to spend $200 or $150 a night in a hotel where seven people have slept in this bed in the last seven days. I could spend the same amount of money and be in a condo or a smaller home and have a living room and a kitchen. Like, wait a second. It’s the same price. That’s crazy. Like that’s Airbnb’s aha moment. Right? And so the idea is how do we get potential customers to experience your company’s aha moment, most cost effectively.
Speaker 4 42:11 So when it comes to Airbnb, their little growth hacks similar to Dropbox was they were about to go out of business. And it’s hard to imagine, I think their valuation is in the billions in the billions. Billions. How’s that for a company that’s maybe like eight, nine years old, not too shabby and very little overhead. Right. Cause they’re not maintaining their properties. Right, right. Cause they’re not exactly, other people own them. Right. So, uh, what, what they did though, they were about to go out of business, they were, they were eating like, I think famously they were eating Wheaties for breakfast, lunch and dinner. It was, it was bad. It was backstop that they found that I’m maxed out their credit cards. They had no money really. You know, and I relate, you making me a little nervous here. I mean, but that’s where they were.
Speaker 4 42:59 Yeah. And you know, and, and I relate to that when I was in college, a lot of people listening can relate to what that feels like. And I think it’s hard to look at a successful company and picture they were there, but they were there. So they had a developer. And have you ever, you’ve, I’m sure everybody listening has heard of Craigslist. Yeah, of course. Okay. So what Airbnb you one of their developers figured out is when Airbnb puts a listing on their website, they created a line of code that automatically populated Craigslist with the same listing. Oh my goodness. Every time. What do you mean? Like so, so in other words, yeah. So yeah. So when you enter, when you go into Airbnb and enter your apartment or condo or house, you’re trying to rent. Oh the, so you’re the owner, right? Yes. So if you’re a property owner, you go to Airbnb, you’re putting your, your property, it also appears on Craigslist as well.
Speaker 4 43:52 Now it took Craigslist some time to actually see what was going on and to update their codes to no longer allow that to happen. But just that alone was enough for them to change the fortunes of their company. Their user base went up by 1000% and it didn’t cost them anything really. Yeah. And another example with Airbnb is as they scaled, for some reason in New York city, they had a ton of potential properties to rent, but not a lot of people were renting them. And once somebody said, well, Hey, we should do more Google ads, let’s just pay more. Google ads could do it. But yeah, but one of the, but instead of throwing money at it, what they did is they started looking at all the listings and the pictures for a lot of these places to rent. We’re kind of pixely, this was about seven years ago.
Speaker 4 44:43 So what was that like? iPhone three cameras were really kind of grainy, grainy pictures. So they thought, look, instead of throwing money through Google ads, let’s throw money by hiring a, um, a commercial photographer for a couple of days to go to some of the top properties in New York city and take good quality pictures. And lo and behold, they did that. And the renting just skyrocketed and it just let them see like, Oh well we should probably offer a service for a small fee where we would use a local photographer to take good pictures because that means they’re going to get rented. So there is so much to unpack right now and we’re basically wrapping up the show. So if you’re listening to this show right now, you have been listening to marketing and how to do it, ride with a expert growth marketer, Dave Martin from Nettra media.com.
Speaker 4 45:36 Hey Dave, just give us the, the distill some wisdom as, as, as a parting shot if, what can the average business owner, this whole thing about the aha moment. I want to know more about it, but we’re just running out of time. So what does it mean? Like what could you tell the average business owner if, if they don’t know that aha, how do you go about figuring that out? I think most businesses know what their aha moment is. Um, as far as what makes their product unique, it’s just a matter of how do you target the right people to, to reach them. And I would resist using social media or Google just because it sounds cool just because you, Oh, you know, I probably should be on Facebook. No, you’re not in business to be on Google or Facebook. You’re in business to make a profit.
Speaker 4 46:23 So it’s uncovering the easiest ways to do that. You don’t figure your proof of concept in social media. You’re validated once you figured it out. Right, right. The scientific approach. Well, you validate something. Um, it’s amazing. So th th th the thing that I hear is you, you have to, I have to make sure that you have a business, a profitable business model. Right? And figuring that out. And, and that’s the thing that, do you help? Like, I mean, yes, we think that, you know, if you, if you’re in a plumbing business, you know what’s going on, right? You fix the plumbing in the house, but it’s not easily discernible in a lot of businesses. I find a lot of businesses, they focus on what they’re good at. They may not even think there might be another service they have. They just threw it up on their website.
Speaker 4 47:07 It might be the most profitable service they offer, but for some reason they’re not really going after it. And that’s sometimes some of the things that we’ll do is uncover those things and to try to push those high value clients to them and it just changes their fortunes. It changes their trajectory simply by looking at things objectively. It’s hard for business owners to do that. As the old saying goes, you’re too close to the forest to see the trees. Right. A lot of business owners, including myself, I give you that way about my business as well. And sometimes it takes, uh, somebody, somebody like myself to hop in and say, have you, have you thought about this? Right? And that’s a good place to start. And from where it goes from there, it’s different for every customer. But the good news is, if I could leave anything, is that in many ways, yes, marketing is broken.
Speaker 4 47:56 I say it’s broken because of how it was done before, the new way of marketing, how we always research things before we buy and all those kinds of things. It’s very set in stone on how to do these things and these are the things that we help people with all the time. It is, and it’s not nearly as hard as it might sound, whether you hire a company to do it or you kind of take baby steps on how to do it yourself. It’s not as hard as it sounds. It’s just a little different than it used to be. Got it. I don’t know about you. We’ll call the appointment. I’m ready to go. So literally, I mean Davis, thank you. Uh, we wrapping up the show. Dave, thank you so much for your knowledge, your passion about what you do. I knew you were going to be a great guest and you are here by inviting you to come back.
Speaker 4 48:43 I’m sure our audience is gonna love you. I mean, we already love you. Show. Um, remember. So you got to figure out the aha moment for yourself and for your business. And then only take it to the, you know, it started investing money once you figured out that you have an aha moment. Right. And, uh, so next, there’ll be more topics coming up next in the next few weeks. We’re working actively on, so thank you everybody for listening. And you have been listening to business illegal talk with Leo and Claudine’s here on power talk. I say goodbye, Claudine. Goodbye. Goodbye. All right, everybody. Well thank you Dave and I have a great weekend. Everybody.
