Small Businesses Make the Worst Clients — Transcript

Full transcript

1. 0:00What's up?
2. 0:01So, I run a done-for-you cold email lead
3. 0:04generation agency. We work with B2B
4. 0:06businesses, all SMBs.
5. 0:09The issue that I feel like I have in my
6. 0:11business is just like LTV is not big
7. 0:13enough, churn is too high.
8. 0:15And I think What's up?
9. 0:17>> why?
10. 0:18>> I feel like it's cuz consistency of
11. 0:19results. It's like the
12. 0:21>> Okay.
13. 0:21>> Consistency of results or avatar or
14. 0:25Yeah, it's pricing niche product.
15. 0:28>> Avatar.
16. 0:29>> Avatar.
17. 0:30>> SMBs suck.
18. 0:30>> Yeah.
19. 0:32>> Well, because you probably get into it
20. 0:34and then you're like, "Oh, you don't
21. 0:35have a sales process. Oh, you would have
22. 0:37higher LTV, but you mispriced." And then
23. 0:40you start becoming a business consultant
24. 0:41because you're feeding them leads, but
25. 0:43they don't know what they're doing.
26. 0:44>> You read my mind.
27. 0:45>> Yeah, well, it's just you're the only
28. 0:47SMB agency I've ever met in my entire
29. 0:49life. Um so, if you think about this,
30. 0:53think about the natural extreme, right?
31. 0:54So, look at public This is for
32. 0:55everybody. If you're like, "Man, how do
33. 0:57I grow my business, etc." Look at the
34. 0:59hypothetical extremes that already
35. 1:00exist.
36. 1:02So, what publicly traded
37. 1:04marketing agencies are there that are
38. 1:06massive marketing agencies?
39. 1:08Who are their customers?
40. 1:10Is there one massively
41. 1:12big marketing agency company that sells
42. 1:13to SMBs?
43. 1:16>> Not that I'm aware of.
44. 1:17>> There's a reason. They suck as
45. 1:18customers.
46. 1:20And so, fundamentally, if you want to
47. 1:22sell to the masses, you have to
48. 1:24typically win on cost.
49. 1:26Which means that you basically build
50. 1:28your business around having massive
51. 1:30efficiencies at scale. So that you can
52. 1:32be like 1/10 the price of everyone else.
53. 1:36And then that's how you go to go to the
54. 1:37bottom part of the market.
55. 1:40Everyone is in kind of this like
56. 1:41mediocre muck of the middle, which is
57. 1:43like, "Well, I kind of need this, but
58. 1:45they're not consistent." Like, I have
59. 1:46churn because they go out of business,
60. 1:48right? And so, like you have what's
61. 1:49called structural churn. Like, they
62. 1:51literally aren't good business owners,
63. 1:53and so because they have bad businesses,
64. 1:54they can't pay you. Even if you deliver
65. 1:57the same 50 leads every month, right?
66. 1:59So, if you can deliver a consistent
67. 2:00result in terms of your inputs and
68. 2:01outputs, and then someone else turns
69. 2:03regardless of that, then you usually
70. 2:04have an avatar problem.
71. 2:06Mhm.
72. 2:07Likely, this is what I would do if I
73. 2:09bought your company tomorrow, I would
74. 2:10look at all the customers you have, and
75. 2:11I'd be like, "Which of these customers
76. 2:12are amazing?"
77. 2:14And then I'd say, "Okay, these 20% are
78. 2:16amazing customers. These 80 suck."
79. 2:18So, now all of our messaging is going to
80. 2:20be, "Hey, if you're one of these people
81. 2:23that has these three or four
82. 2:24characteristics, we're for you. If
83. 2:26you're one of these people that has all
84. 2:27these other things, we're not for you.
85. 2:29Go away. Find somebody else to bother."
86. 2:32And when you do that, you'll actually
87. 2:33get more of these people, and these
88. 2:35people will still opt in cuz they're
89. 2:36crazy. Uh but
90. 2:38but you can push those away, and that
91. 2:39will over time, you can basically
92. 2:41continue that 80/20 process and keep
93. 2:43moving your way up market. Does that
94. 2:45make sense?
95. 2:46>> Got you. So, the end goal sounds like
96. 2:47serving enterprise, like traveling up
97. 2:50market, or just making my thing like
98. 2:52stupid cheap, and then just
99. 2:53>> Yeah, you have you basically you like
100. 2:55you just you're in the middle. You just
101. 2:56got to pick a side from a strategy
102. 2:58perspective.
103. 2:59So, like there are companies that do
104. 3:01that are not publicly traded, but there
105. 3:02are agencies that I've seen that
106. 3:04crushed, but they were like $299 a
107. 3:06month.
108. 3:07>> Mhm.
109. 3:07>> $199 a month, and they built around,
110. 3:09"How can I service customers for $50 or
111. 3:11less?"
112. 3:13And then they convert like crazy, they
113. 3:14sell awesome on the front end. They can
114. 3:16have huge numbers of customers, and
115. 3:18oftentimes their LTV is closer like they
116. 3:20do have 5% churn. And so, if you have
117. 3:225%, you still have a 4K LTV, but your
118. 3:24cost to acquire might be like 100 bucks.
119. 3:26And so, you have a huge LTV to CAC
120. 3:27discrepancy, but it's because you built
121. 3:29the business without strategy in mind.
122. 3:31Right? Now, if you have a more costly
123. 3:34delivery process, then you have to go up
124. 3:36market to a customer where you can
125. 3:37charge where you still have that great
126. 3:40gross profit because you have your
127. 3:41special sauce that delivers value to
128. 3:43them. And they, because they get more
129. 3:46value from the same inputs from you, you
130. 3:49benefit from that.
131. 3:50It's the same story of like I have a CRO
132. 3:52agency, conversion rate optimization,
133. 3:54and I'm really good at doing this and I
134. 3:57work with e-commerce stores doing a
135. 3:58million dollars a year. That sucks,
136. 4:00right? That's a horrible like super
137. 4:02tough. Those guys turn all the time.
138. 4:03Their ad accounts get shut down. You go
139. 4:04to a company that's doing a hundred
140. 4:05million dollars a year and you help them
141. 4:06grow by 10% in their CRO and you make
142. 4:0910% of the spread. It's like you make a
143. 4:10million dollars a year just from that
144. 4:11one client and they're not going
145. 4:12anywhere.
146. 4:14And that same work.
147. 4:16And so the leverage comes from either
148. 4:18your delivery needs to have more
149. 4:19leverage or the avatar that you're
150. 4:21serving, you get more for what you put
151. 4:22in because
152. 4:25your thing is worth more to them.
153. 4:27>> And is there is there a dichotomy of
154. 4:29which way is is there a better or worse
155. 4:31way of like I cut costs, I do everything
156. 4:33overseas, and I just like get all the
157. 4:36just get the all the small fishes, or
158. 4:38slowly travel up market?
159. 4:40>> I would say whichever one.
160. 4:41So
161. 4:42Okay, so this is a great frame that
162. 4:44Leila has, which is what problem are you
163. 4:45trying to solve?
164. 4:47Sorry.
165. 4:48So the problem with enterprise
166. 4:50businesses will be it's going to be more
167. 4:51expensive to acquire. It's going to be a
168. 4:52longer sales process,
169. 4:53uh more consultative, more custom.
170. 4:56That's going to be the nature of the
171. 4:57work.
172. 4:58If you go more, you know, low low-tier,
173. 5:01it's going to be more operational
174. 5:03efficiency, more checklists, more
175. 5:05productization around what you do.
176. 5:08And you're not going to have a problem
177. 5:09acquiring customers. It's going to be
178. 5:11just ops.
179. 5:13So if you have one preference between
180. 5:15those two things, then solve the problem
181. 5:17that you prefer to solve and then build
182. 5:19that business.
183. 5:20>> Got you. Makes sense.
184. 5:21>> Makes sense. Appreciate it.
185. 5:23>> Yeah, you bet.
186. 5:23>> If you're a business owner and you are
187. 5:25not growing as fast as you'd like, I'd
188. 5:27like to give you a free gift. So my team
189. 5:29and I put together the 100 million
190. 5:31dollar scaling road map, which is
191. 5:32basically 200 hours of us looking over
192. 5:34all the portfolio companies we've had
193. 5:35and what stages of growth they went
194. 5:37through and more importantly where they
195. 5:39got stuck and how they got past it. And
196. 5:41so we broke it in these 10 stages and we
197. 5:43made this little kind of quiz thing
198. 5:45where if you put in your business
199. 5:45information, it'll tell you where you're
200. 5:47at and the most important part for you,
201. 5:49what to do for each of functions of the
202. 5:50business across product, marketing,
203. 5:52sales, customer success, recruiting, IT,
204. 5:54human resources, and finance. And so, no
205. 5:56matter what you're struggling with,
206. 5:57someone else has already struggled with
207. 5:59it and solved it. And so, I'd like to
208. 6:01give you this thing absolutely free. You
209. 6:02can go to acquisition.com/roadmap,
210. 6:04plug in your business information, and
211. 6:06if you want us to actually help you
212. 6:08deconstruct the business and you're
213. 6:09trying to scale, we'd love to help you
214. 6:11out. On the thank you page, you can just
215. 6:12book a call with my team and we will
216. 6:15look at the business, see if we can
217. 6:17help, and if we can't, we'll invite you
218. 6:18out to Vegas and we'll do this in person
219. 6:20live.