Helping a home service company scale — Transcript

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1. 0:00Hey Alex, thanks for everything that
2. 0:01you've done.
3. 0:02I'm James. I sell custom branch railings
4. 0:05to homeowners.
5. 0:06>> Okay.
6. 0:06>> I we did 420 or so last year.
7. 0:09I was I've read 10x is greater than 2x.
8. 0:12And so last night it was coming to me
9. 0:14again like do I really just want to
10. 0:15double or do I want to try to 10x?
11. 0:17>> Sure.
12. 0:17>> Um and so what I want to try to do is to
13. 0:20develop a network of product specifiers,
14. 0:22architects, designers, contractors that
15. 0:24can act kind of like a referral network.
16. 0:26I want to shift away from the minnows
17. 0:27>> Okay.
18. 0:28>> and to focus more on whales. We had one
19. 0:29client last year about $50,000 worth of
20. 0:32handrails and if I could get 10 of those
21. 0:34in a year then I would double revenue
22. 0:36just with 10 clients. So kind of what
23. 0:38are my best strategies to go about
24. 0:40achieving that?
25. 0:41>> So
26. 0:42where did you source the single whale
27. 0:44this year?
28. 0:45>> He found me. It's all inbound. It's all
29. 0:46through search.
30. 0:47>> Okay, so SEO or PPC?
31. 0:49>> SEO.
32. 0:50>> Okay.
33. 0:50>> started Facebook ads about three or four
34. 0:52weeks ago. They're going pretty well
35. 0:54good. Qualified about half of the leads
36. 0:56so far.
37. 0:57>> So I would So if you want to go whale
38. 1:01hunting, then I think your your initial
39. 1:03thought strategy of finding the
40. 1:04architectural firms and engineering
41. 1:06firms and whatnot is a good one.
42. 1:09I would probably try the outreach method
43. 1:12as my primary way cuz you can be hyper
44. 1:14targeted in terms of who you're reaching
45. 1:15out to and the the key to making it work
46. 1:18though is like what's in it for them
47. 1:21to refer you business.
48. 1:24>> Are you asking me that?
49. 1:25>> Mhm.
50. 1:25>> That's an excellent question.
51. 1:26>> Okay.
52. 1:27>> So architects will typically in a plans
53. 1:29like if they make a set of plans,
54. 1:30they'll specify what kind of tiles to
55. 1:32use and what kind of windows to use etc.
56. 1:34So I've I've we've gotten plans in the
57. 1:35past where it's like it's got the
58. 1:37pictures from the website with the CAD
59. 1:39drawings and everything on the plans.
60. 1:41>> Mhm.
61. 1:41>> And so it's like how to persuade them to
62. 1:44do that kind of in absentia. And I
63. 1:47should also note that we ship
64. 1:48nationwide. So this is not like you
65. 1:51know, a hyper local market.
66. 1:52>> or you are you doing installs or not?
67. 1:53>> No, we haven't done any
68. 1:54>> Are you just you just
69. 1:55>> We we ship product.
70. 1:57>> Interesting.
71. 1:59Got it.
72. 2:01Then who are the decision makers? Well,
73. 2:02right now it's been primarily
74. 2:03residential is what it sounds like.
75. 2:04>> Right. It's primarily homeowners. We've
76. 2:05done some commercial work, you know, but
77. 2:07it's primarily homeowners who are, you
78. 2:10know, looking for something different.
79. 2:12And so it's very I what I call
80. 2:13intentional inbound search. It's like
81. 2:15they're looking for something. They are
82. 2:17deliberately searching it out. They find
83. 2:19it. You know, we have a lead magnet kind
84. 2:21of which is like 250 different
85. 2:24It's SEO and I you know, yeah.
86. 2:26>> Well, this is a fundamental change in
87. 2:27business strategy. So you're aware of
88. 2:29that. So with that comes risk. Cuz the
89. 2:32highest risk adjusted return move or
90. 2:34lowest risk I guess is probably at like
91. 2:37if I were like tomorrow what would I do?
92. 2:39I'd probably just add PPC in right now.
93. 2:41Um because you already have something
94. 2:42that's working on SEO. I would probably
95. 2:44see how can I get way more articles
96. 2:45written so that my SEO traffic can go
97. 2:47up. Can I tackle more, you know, more
98. 2:49keywords? Um
99. 2:51that's like the for sure will work and
100. 2:53make you more money play.
101. 2:55The going after whales
102. 2:57for sure can make more money cuz why not
103. 3:00add zeros to things. Um it'll just be a
104. 3:02completely different sale. And you'll
105. 3:04have two levels of sales. So sale number
106. 3:06one is going to be for the affiliates
107. 3:08and then figuring out what's going to
108. 3:09make it worth it for them. And then the
109. 3:10second level is what's the you know,
110. 3:11what's the actual sale to the to the
111. 3:13whale customer.
112. 3:14>> So what James has is he's using
113. 3:15affiliates to get customers which is
114. 3:17this is inside of the leads book. All
115. 3:19right. And so um affiliates are
116. 3:22businesses that have your customers that
117. 3:25market and sell your stuff to them. All
118. 3:27right. And so fundamentally I walked
119. 3:29James through the three different ways
120. 3:31that I have found that work best uh for
121. 3:34affiliates.
122. 3:36>> So who's the decision maker with the
123. 3:37whales?
124. 3:38>> Um like the final decision maker? It's
125. 3:41going to be the It's going to be the
126. 3:42homeowner whoever's doing the project.
127. 3:44But then
128. 3:44>> So you just want bigger homeowners?
129. 3:46>> The The architects have the ability to
130. 3:48specify it and to put it in front of the
131. 3:50client.
132. 3:51So like we also did another one which
133. 3:52was about 60,000 for a guy that was
134. 3:55doing a development of Airbnbs
135. 3:58>> Yeah.
136. 3:58>> in Virginia. He put up like six yurt
137. 4:00kind of things.
138. 4:01>> Yeah.
139. 4:01>> And uh you know, so I had two very very
140. 4:04>> of them were architects that sent you
141. 4:06these
142. 4:06>> The one was an architect and the other
143. 4:08was a construction company.
144. 4:09>> Okay, yeah. So, you're going to have to
145. 4:10go B2B outreach is the prime basically
146. 4:12when you look at Core Four, that's going
147. 4:14to be your what you're going to do and
148. 4:16then they're going to be your
149. 4:18affiliates. And so, the the
150. 4:20million-dollar question is what's in it
151. 4:21for them?
152. 4:22So, my my
153. 4:25proposition would be
154. 4:28So, there's three ways you can do
155. 4:29affiliates, at least that you know, in
156. 4:30the world of Alex. So, you have they
157. 4:32sell your for you and they and they
158. 4:34get a commission. That's option one.
159. 4:36That's typically my least favorite
160. 4:38option, but it is an option.
161. 4:40Option two is that you give them some
162. 4:42morsel of something that you sell that
163. 4:45they can sell for a 100% markup. They
164. 4:47could keep all the money, but you get
165. 4:48the introduction. This is my favorite
166. 4:50way of doing it.
167. 4:51The third way is that you
168. 4:53allow them to just bundle in your free
169. 4:56thing with their services. Now, with
170. 4:57architecture firms, it's not like
171. 4:58they're going to bundle in a railing uh
172. 5:01for their service, but just for
173. 5:01everybody else. Like there's the free
174. 5:03thing. So, it's like they bundle your
175. 5:05your basically your lead magnet in
176. 5:07for free with their thing they sell, so
177. 5:08it makes it enhances the value of their
178. 5:10overall package. You give them the
179. 5:12things that they can upsell your lead
180. 5:14magnet for an amount of money that they
181. 5:15can keep 100% of or they just sell your
182. 5:18stuff and they get a kickback.
183. 5:20>> Is there a version for this where they
184. 5:22can just upcharge? Like you can do a
185. 5:24small portion of this that they get 100%
186. 5:26off?
187. 5:27>> 100%? Like I don't think so. Like maybe
188. 5:29some kind of contractors or architect
189. 5:30discount.
190. 5:31>> We want it them to be stupid to say no.
191. 5:37Yeah, because like the generic like you
192. 5:39get 20% kickback is just like everyone
193. 5:41does it. Like who here does 20%
194. 5:43kickbacks for anybody who refers you
195. 5:44business?
196. 5:45You can raise your hand. I'm not going
197. 5:46to be upset. Okay. And so, the point is
198. 5:48is that and you probably no one here has
199. 5:50referred to anyone else's business and
200. 5:52because no one cares. That's that's kind
201. 5:54of the point. And so, it has to be an
202. 5:56irresistible offer. And so, if we give
203. 5:58away the lead magnet or something, think
204. 6:00about it as like my CAC for a $50,000
205. 6:04customer is the cost of the lead magnet.
206. 6:07And if I close one out of three
207. 6:08introductions, then it's three x the
208. 6:10cost of lead magnet is my cost to
209. 6:12acquire customer, which is usually
210. 6:13pretty darn good.
211. 6:14>> So, what I outlined with James is right
212. 6:16here on page 237 is that there's three
213. 6:19ways you can integrate your product into
214. 6:21their offer. Basically, getting an
215. 6:23affiliate to sell your stuff. And so, I
216. 6:24order these from easiest to hardest. So,
217. 6:26first, you can give away your lead
218. 6:27magnet with every purchase. So, they
219. 6:29just give away your stuff for free uh in
220. 6:31order to to get to get leads, right? So,
221. 6:33they'll sell their product with your
222. 6:34lead magnet or they'll just give your
223. 6:35lead magnet away. But, either way,
224. 6:36you're not making anything from it.
225. 6:37They're just going to give it away.
226. 6:39Second is that you can get them to sell
227. 6:40your lead magnet separately to their
228. 6:42audience, which is my preference, right?
229. 6:44You give away something that has hard
230. 6:46cost or real cost um and you let them
231. 6:49sell it for whatever and then the cost
232. 6:50to you is just the cost of delivering
233. 6:53the thing, right? And so, if I had a
234. 6:55marker business, right? I might say, "I
235. 6:57will let you sell one of my markers."
236. 6:58And let's say my marker cost me 50 cents
237. 7:01uh for whatever you want to charge for
238. 7:03it. And they're like, "I can sell this
239. 7:03marker for $5." I'd be like, "Cool. You
240. 7:05sell it for $5, but I now have a contact
241. 7:08of somebody who bought these markers."
242. 7:09And I might call them up and say, "Hey,
243. 7:11you've got blue. Do you want red and do
244. 7:13you want green and do you want black?"
245. 7:15And all of these are $5. Now, my hard
246. 7:17cost is just the 50 cents it cost me to
247. 7:19deliver the marker. And so, the question
248. 7:21is, what percentage of customers who buy
249. 7:22a blue marker buy the other three? And
250. 7:25so, if I found out one out of two
251. 7:27customers who buy a marker at 50 cents
252. 7:29end up buying these, then my cost to
253. 7:31acquire a customer through affiliates is
254. 7:3450 cents times two. So, the cost of
255. 7:36delivering my lead magnet
256. 7:39is the actual cost. And here's the crazy
257. 7:40part. If they go make zillions of
258. 7:42dollars selling your thing, great. It
259. 7:45means that you're going to make even
260. 7:46more money upselling your stuff. And so
261. 7:48a lot of people get very greedy about
262. 7:50what other people are making off of
263. 7:52their stuff. Just focus on the money
264. 7:54you're making with it if the deal makes
265. 7:55sense for you. That's one of the piece
266. 7:56of advice that Leila actually taught me.
267. 7:58She said, "Never count the other guy's
268. 7:59money." Um and it's a really good piece
269. 8:01of advice and I'll pass it on to you.
270. 8:02But it sounds like an irresistible offer
271. 8:04to the architecture firm because they're
272. 8:05like, "We can just sell this and keep
273. 8:07100%." You're like, "Yep, just make the
274. 8:08introduction and I'll deliver that." And
275. 8:10then when you talk to the customer,
276. 8:11you're like, "Yeah, I'll deliver that.
277. 8:12Here's one rail,
278. 8:13but you need 10 more."
279. 8:15And then you make the sale.
280. 8:16Does that make sense?
281. 8:18>> I'm not entirely sure. Like people would
282. 8:20order the entire project.
283. 8:21>> Okay.
284. 8:22>> So it's not like you can just like I
285. 8:23can't just ship you a sample and be
286. 8:24like, "Hey, look, here's a
287. 8:25>> Yeah, then you're going to have to do
288. 8:26the commission-based structure, which is
289. 8:27not my favorite, but um
290. 8:30that's probably the way you're going to
291. 8:31have to do it. So either you can do the
292. 8:32discount I mean, I would say, "Guys, I
293. 8:34have 20% that I can play with here. So
294. 8:37you can take all 20 and give them no
295. 8:38discount. You can take a 10% discount
296. 8:40and then they get you get 10% kickback.
297. 8:42Like this is what I got. I'll make it
298. 8:44work whatever way you want, but this is
299. 8:45my bare bottom price."
300. 8:47>> Okay.
301. 8:48>> And I think that's what like that's the
302. 8:49outbound strategy.
303. 8:50>> So should I then in turn raise prices
304. 8:53for direct-to-consumer?
305. 8:55>> Yeah, I love that.
306. 8:56>> Okay.
307. 8:57Thank you.
308. 8:58>> Yeah,
309. 8:59>> [laughter]
310. 9:00>> love that for you.
311. 9:02The reason I like that second offer cuz
312. 9:03I think it's very compelling. Now
313. 9:04obviously the third way you can do it is
314. 9:05just get them to sell your offer and
315. 9:07then have some sort of kickback.
316. 9:08Obviously many companies do this. It has
317. 9:10to be very compelling because almost
318. 9:12every business I know is like, "Yeah, I
319. 9:14give 20% at least in services." Every
320. 9:15business I know gives 20% uh you know,
321. 9:18kickbacks for anybody who refers
322. 9:20business their way. It's like, "Yeah,
323. 9:21but no one does anything with that." And
324. 9:23so it has to be enough that would really
325. 9:24change someone's behavior. And so think
326. 9:26about it like this is that the offer has
327. 9:28to be good enough that it changes what
328. 9:30they do with their business. If it
329. 9:31doesn't change what they do, the offer
330. 9:33wasn't compelling enough. Or you made it
331. 9:34too hard, right? So it's either make the
332. 9:36thing better or make it easier for them.
333. 9:38If you're not getting as many leads as
334. 9:39you want and your business is demand
335. 9:41constrained, [music]
336. 9:42meaning you could service more customers
337. 9:44than you currently have, then this is
338. 9:45for you. So, marketing is changing and I
339. 9:48think ACQ tends to [music] be on the
340. 9:49bleeding edge of the stuff. We certainly
341. 9:50spend the money
342. 9:51to do it, but we also build custom
343. 9:53software and we pay amazing vendors and
344. 9:55very expensive people to figure out the
345. 9:57system that we have right now and I want
346. 9:58to share it with you kind of open kimono
347. 9:59style. If you're not getting as many
348. 10:00leads as you want,
349. 10:01boy, do I have the thing for you. Click
350. 10:03below, book call and uh
351. 10:05hope to see you in Vegas.