John Jantsch (00:00): This episode of the duct tape marketing podcast is brought to you by the salesman podcast, hosted by will Barron and brought to you by the HubSpot podcast network. Look, if you work in sales, wanna learn how to sell, and frankly who doesn’t check out the salesman podcast, where host will Barron helps sales professionals learn how to find buyers and win big business ineffective and ethical ways. And if you wanna start someplace, I recommend the four step process to influencing buying decisions. Listen to the salesman podcast, wherever you get your podcast.

John Jantsch (00:44): Hello, and welcome to another episode of the duct tape marketing podcast. This is John Jantsch, and I’m gonna do a solo show today. It’s actually been a while, but I wanna cover a topic that is very high on a lot of business owners’ minds. And that’s the idea of retention of internal team members, internal customers, whatever you wanna call them, employees, staff, team members. This has been a really hot topic of the last year, and I think it’s not going away. There’s a lot of pressure for a lot of reasons on this. So I wanna talk about it as the subject that it is, obviously it turns into production issue or fulfillment or capacity issue for a lot of organizations, but it’s really a marketing problem, or at least can be solved I think, with a marketing solution. So that’s what I’m going to present.

John Jantsch (01:34): Hey, I also wanted to let you know that I have been working very hard on a unique marketing strategy assessment. A lot of people have these, uh, marketing assessments out there that that really are just measuring your tactic approach. What you’re using, what you’re doing. I’ve created something that really is heart and soul to the idea of strategy before tactics marketing as a system. And I’d love for you to check it out. Uh, the URL is marketingassessment.co. So it’s marketing assessment.co go on over there and, uh, check it out to go through. It takes about, I don’t know, five minutes to answer the 20 questions and, and the report that you get at the end of it, frankly, is, is enough gold to, to have you actually, uh, improve or find area of for improvement in your, in your marketing strategy. So, uh, check it out, marketing assessment dot C.

John Jantsch (02:29): All right. So let’s talk today about rethinking the recruitment journey. You know, one of the things that I think that certainly I’ve said this many times to anyone that will listen, one of the things that I think the pandemic and, and a great deal of what went on with the, the, the chaos of the last couple years is that, you know, a lot of businesses do pretty well in good times just by being in the right place at the right time. A lot of businesses during the pandemic learn that, but boy, in tough times, growth comes from being important in the lives of your customers and your employees. And it’s a constant, uh, battle. It’s constant shifting there’s the leverage changes, you know, so to today we work with a lot of folks that are saying, Hey, I don’t need more customers. I need more people.

John Jantsch (03:12): So the leverages in many cases is, has gone squarely to the employee. And I think that changing dynamic, I think does have a tendency to allow people or, or to get people in the habit of thinking, oh, this is just a vending machine approach, need more customers, put some money in run, some ads, run a funnel and create more customers, oh, need more employees just go run. Some ads, go to the job boards, put in some and voila pops up some new employees. And I, I wanna share, I’m gonna rifle through. ’em pretty quickly a few statistics that should shed some light on how we have to be thinking about this in a much different way than the vending machine or the funnel approach. Apparently less than 15% of the, of every job that’s advertised on those job boards, you know, monster indeed, et cetera, gets filled by candidates who actually apply through the job board.

John Jantsch (04:07): So we’re spending a whole bunch of money there, and it’s not really producing the results. 50% of candidates say they wouldn’t work for a company with a bad reputation, even for a pay increase S true of customers coming to us. Why wouldn’t it be true? Of course of employees as well, 79% of candidates use social media in their job search. We have to be where they are. That’s, that’s true. Again for customers as certainly as much as it is for staff. 92% of consumers will visit a brand’s website a first time for reasons other than making a purchase, guess who is visiting your website for reasons other than making a purchase people you might hire, or you might wanna hire 71% of employees say that they would accept a pay cut for a better working experience. A flip side of that is I know I’ve paid more or a product or a service when I got, or was expecting to get a better experience.

John Jantsch (05:05): I think it’s just the flip side of that exact same thing. 89% of employers think employees leave for more money. That’s why everybody defaults to more money. That’s why everybody defaults to lowering their prices when, uh, they’re trying to attract new customers. It, again, it’s the flip side of the exact same thing, but according to a very large gala poll, only 12% of employees actually leave for money. And I think the thing that, the point that I’m really trying to drive home here, in fact, if you’re really in a hurry, just take note of this idea and, and you’ll have the essence of where I’m gonna go with this, uh, today. People really aren’t candidates or consumers. They’re both, there’s no distinction. I mean, people are just people. So the vending machine approach of let’s put money in and get more customers, put money in, get more employees, lower prices, you know, advertise bonuses, you know, for getting employees.

John Jantsch (06:05): I mean that, that approach will draw some people, I suppose to you, but you know, people who come to you for a price increase or price decrease, or employees that come to you because they get a dollar, two more, an hour are gonna leave for the exact same reason. So when I talk about the customer journey and the employee journey, or how somebody, uh, comes to, to join an organization, it, it it’s really in a lot of ways, it’s not even a marketing issue. It, it is a strategy issue that I think can be solved with of the marketing approach. So here’s the three steps for creating the perfect recruitment strategy. First one is to know who you’re trying to recruit. And I know everybody says that, but what people forget to say is that you probably already have some ideal employees in your organization.

John Jantsch (06:51): Just like I talk about narrowing your focus to the top 20% of your customers, look at your team. You can do the same thing. What is it about your highest performing, uh, folks, the people that thrive in your organization? What is it about them that you need to understand? What behavior, what characteristics, what objectives, what problem can you promise to solve as an organization? That’s always been true from a, an attraction standpoint for a, a differentiator for your customers is going to be true, certainly for employees. So how can you create an end to end customer journey? Think in terms of employee recruitment pipeline, it’s something that doesn’t, it isn’t meant to be an event. Oh, I have a position to fill. We need to do X that’s. What gets people in, in the mindset of, oh, I have to offer more money. That’s the only way to get more people or I have to spend more money on the job boards.

John Jantsch (07:45): That’s the only way to get more people. It has to be something that becomes part of the DNA of, of all of your marketing. So look to your current employees and I’m gonna give you four questions and you might come back to this, uh, part of the recording. I’m gonna give you four questions. If you need to write these down to, to try to either think about, or even even ask your employees sometimes asking is tough because it’s the boss ask asking. And it’s like, is my answer really gonna ? Is it gonna be used for good or bad? But here, your question to ponder, what does their current work life situation look like? You’ll find that they probably have certain goals or in a certain point in their life that they, you know, have certain values. Now that doesn’t, I, this is not an appeal to say everybody in your organization needs to think and look alike.

John Jantsch (08:35): It’s just that there are gonna be certain situations that I think might be keys or might be signals to, you know, what you’re looking for, or, or at least what you start promoting. If you find that many, uh, folks in your organization enjoy a certain type of work or a certain type of environment, they Excel in, then you wanna start talking about that. That that’s what we do here. All right. Second question. What do they enjoy? What frustrates them in what work environment do they Excel? Number three, and number four, what factors were involved in them making a decision to come to your organization? If you could start to understand doesn’t mean you have to have all the answers, but if you can start to at least think about the answers to those questions, you’re gonna have a better idea of the message you need to take out there to the world and start talking about why your place is a great place to work.

John Jantsch (09:25): And speaking of that, one of the greatest marketing messages, this is to attract customers is to talk about your people is talk about how exceptional your place is to be an employee. In fact, we’ve actually moved many of the marketing messages to be, you know, for example, a remodeling contractor, our people make your remodeling experience exceptional. That is a very positive, attractive message for the people that want to remodel their kitchen, because maybe they’ve were worked with not such so exceptional people, but it’s also a great message for the potential employee. You’re leading, talking about the fact that your people are exceptional. Hey, I wanna work there now. Also, don’t forget. As I reminded you many times, don’t forget about Google reviews. If you’re getting some amount of Google reviews, pour over those word for word first off, what you’re probably going to see is that if your people are truly exceptional, your customers are going to be noting that they’re going to be actually naming them by name.

John Jantsch (10:29): In fact, they might not even name your company, but they might name somebody who works at your company. So start understanding what they about your people, about the experience that they’re having. Those are some real cues to what maybe you ought to be saying. The promise that you ought to start making, uh, to, to demonstrate that you can deliver a better experience. You know, customers don’t actually change comp I mean companies, I mean, I don’t think we want to jump around and say, well, that didn’t work outs, or maybe it did work out, but I’m gonna go look for a new one. Uh, I think we want to stay with companies. And so we don’t really leave them. We leave the experience that we’re having with them. And now let’s hear from our sponsor. Look, if you’re tired of slowing down your teams with clunky software processes and marketing that is difficult to scale, HubSpot is here to help you and, and your business grow better with collaboration tools and built in SEO optimizations.

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John Jantsch (11:52): are the third component of this strategy idea is that is, is to think about this end to end journey. You know, a lot of handing these days about all the things that have changed in, in, in marketing and in business. But, you know, I think the thing that doesn’t get talked about enough, the thing that’s changed the most is how P people choose to become customers and employees. They have so many options today and how they decide on the company that they’re going to, to hire is, is all about the research that they do.

John Jantsch (12:24): And they go out there and, and in a lot of ways are making a decision, you know, before we even know that they’re looking at our organization and this, this is certainly true of some be coming to be hired as, as an employee. So we have to think about the marketing hourglass as we apply it to the employee journey. And so, uh, as a reminder, I know I talk about this all the time, but the marketing hourglass for us is, has seven stages. They are no like trust, try by repeat and refer. And so what I’m asking you to consider is what is, what are you doing to intentionally guide somebody to come to know about you and, and start to think, Hey, this is a place I might wanna work, but then as they start to dig in, you know, what message are they seeing as in terms of a story, are, are they connecting with your values?

John Jantsch (13:10): Who do they meet first? Is it easy to find out more information? If for me, how often people will have a, Hey, come, you know, we’re hiring and then you click on a button. And before you ever find anything out about the company, you have a, a five and a half page application to fill out. That’s like going from, Hey, you know about us now, I wanna buy you wanna buy and, you know, skipping the steps of trust, building that, that really make you, you, the obvious choice, obviously reviews, employee stories, your values and actions mentions in the media. Those are all things that are part of the employee journey today. And in fact, as I started to say, I think the, the beauty of this idea of branding your organization is a great place to work is it’s a killer marketing message. I mean, how could that possibly be a, for anybody who wants to hire you or, or buy your products and services?

John Jantsch (13:59): So promoting, uh, part of your content strategy ought to be in fact, a huge part of your content strategy ought to be, to promote things that your employees, your team members are doing, how they’re advancing, the fun that you’re having at your organization. I mean, these are things that go in many cases in the early part of the journey, they go a lot farther than the benefits that I’m gonna actually receive, because I think people, uh, more and more are, are leaving organizations maybe even for pay cuts or, or certainly not staying at organizations because the 401k is the bonus is great. If the environment is not great, if the experience of being an employee there is not great, then none of that really matters. So then if we slip over to the try and buy and, and obviously substitute higher for buy, if you like, , it’s not a real stretch in my mind.

John Jantsch (14:53): So the try process, what, what is that application process look like? The phone screening, you have so many, and again, what happens is a lot of organizations don’t have an HR department, don’t have a professional who’s charged with the hiring experience. It’s the manager or the VP of something that actually has another job, and this is just something they are doing. And so the follow up and the experience, and, you know, once they come on board, the onboarding, the who, who their manager is, you know, how they interact with current employees. I mean, all of that, their training plan that’s laid up. The statistics are pretty crazy about when people leave organizations within the first night days. It’s because there was, there was no onboarding. It’s true of customers. You know, you’ve heard me talk about Joey. Coleman’s great book, how to keep, I can’t remember now the title, but how to keep an employee no, how to keep a customer for life.

John Jantsch (15:43): Although he is actually working on the employee one too, he tells me, but the idea behind it is make the first 90 to a hundred days an amazing experie. And you will not have the turnover that many organizations, uh, experience today. And speaking of that, you know, just like keeping customers is, is a far better way to grow a business. Keeping your employees is a far better way to grow, not just your team, but your organization. You know, the number one, uh, reason people are citing now for leaving organizations is a lack of respect, a, of a growth path or any kind of personal development. I mean, pay and benefits certainly shows up on the list, but it’s way down from things like respect and, and personal development. And then finally refer, I work with a lot of organizations that have happy, happy employees and happy customers.

John Jantsch (16:30): And, and we always scratch our heads say, well, why aren’t they referring us? And most of the time, it just comes down to the process. The, you know, it’s almost with, with employees, a lot of organizations almost treat it like, uh, you know, an expectation, a part of the job, you know, they offer a bonus. So it just becomes part of the pay. But the biggest reason people don’t make recommendations or referrals, both as customers. And it lawyers is they don’t understand or worse don’t trust the process. Maybe the hiring process for them was kind of wonky. Hey, they like being there now. but the, uh, the process itself was a little bit stressful. Do they wanna put their friend or, or neighbor, you know, through that kind of thing. And last thing about retention people don’t change jobs. I mean, they change about, so the, again, a lot of it has to do with the experience that they’re having, you know, maybe with the person they’re directly reporting to, and not necessarily with the organization, I’ve been running recruiting ads, a skilled labor positions for a number of years, and we test different headlines in different approaches.

John Jantsch (17:32): And the number one recruiting a for the past two years simply just says, respect with a question, mark, you know, do you feel like a respected member, uh, of a team in your current, uh, position? And it beats everything else. We try, you know, time and time again, because that is the, that is what’s missing for a lot of people in the, uh, positions. And I don’t care what type of job it is. I think that’s, uh, the piece that’s really missing. So think in terms of this idea of the marketing hourglass and, and applying that journey to the recruiting process, intentionally helping move people through the stages of no, like trust, try higher retained and refer. All right, that’s it for me today. Um, again, I wanted to remind you to check out the new assessment that, uh, I built it is a marketing strategy assessment.

John Jantsch (18:24): You can find it @ marketingassessment.co – not.com – marketingassessment.co. All right. Take care.

John Jantsch (18:32): All right. So that wraps up another episode. I wanna thank you so much for tuning in and, you know, we love those reviews and comments. And just generally tell me what you think also did you know that you could offer the duct tape marketing system, our system to your clients, and build a complete marketing consulting coaching business, or maybe level up an agency with some additional services. That’s right. Check out the duct tape marketing consultant network. You can find it at ducttapemarketing.com and just scroll down a little and find that offer our system to your clients tab.

John Jantsch (00:00): This episode of the duct tape marketing podcast is brought to you by the female startup club, hosted by Doone Roisin and brought to you by the HubSpot podcast network. If you’re looking for a new podcast, the female startup club shares tips, tactics and strategies from the world’s most successful female founders, entrepreneurs, and women in business to inspire you to, to action and get what you want out of your career. One of my favorite episodes who should be your first hire, what’s your funding plan, Dr. Lisa Cravin shares her top advice from building spotlight oral. Listen to the female startup club, wherever you get your podcasts.

John Jantsch (00:48): Hello, and welcome to another episode of the duct tape marketing podcast. This is John Jantsch. My guest today is Cameron Herald. He is the founder of the COO Alliance, the world’s leading network for Second in Command, and he is also the host of the second in command, the chief behind the chief podcast, where he interviews COOs and other seconds to share their insights with his listeners. He’s also the author of five books and a top rated international speaker having spoken on all seven continents. Probably not too many people can say that. So Cameron, welcome to the, the show.

Cameron Herold (01:22): Hey John, thanks for having me. I appreciate it.

John Jantsch (01:25): So you are a little beyond the 800 got junk story. You’ve done a lot of stuff since then, but that was, that’s been a pretty good calling card. Hasn’t it?

Cameron Herold (01:34): It’s been a great calling card. It’s funny. I was speaking with guy Kawasaki a few years ago and I said, you know, do you ever get tired of, of speaking with, uh, about apple? And he, he said, do you ever get tired of speaking about 100, got junk? I’m like, no, it was just such a, a passionate thing. But yeah, it was 15 years ago. I think it was 15 years ago next week that I left.

John Jantsch (01:52): Oh, wow. Well, I moved four years ago or bought a house in Colorado about four years ago and slowly moved. And I can say we, we had to use the services of one 800 got, uh, junk because we’d been in this for about 30 years. awesome. So it’s still out there working, I guess.

Cameron Herold (02:08): Well, my, yeah, my youngest son got to work in the trucks last summer for the first time. So he is kinda excited about that.

John Jantsch (02:14): So, so that was early in your career in a lot of ways. And in reading your story, you know, that was a, you were when you showed up as a youngster, so to speak and in that role, that was kind of a stretch or a new role for you. So are there some things in those early days of kind of figuring operations out, I guess, that, that really stuck with you?

Cameron Herold (02:35): Uh, something changed. So one under God junk was actually the third company that I’d helped scale. So I helped build void auto body and Gerber auto collision and then a private currency company prior to that. And then I’d been involved in another group called college pro painters, which was the world’s largest residential house painting company. So I actually joined wing hundred Gott junk as their COO when I was 35. So for me, for the first four years, it was actually a little bit like, you know, I already had the expertise. I knew what to do. Let’s just crank through this. What really started to hit me was two things. One when scale started to kick in, when we hit the, you know, 200 employees at the head office, 2000 employees system wide, it started to get complex and a little bit outside of my sandbox. And then secondly was the text. I started to appear where we started to leverage or talk about technology and automations and optimization. And that was, you know, 2004, 2005 was, I was realizing that it was no longer about working harder. It was about working smarter. And then it was also about optimizing and automation that we could, you know, really scale.

John Jantsch (03:38): So the role or the title, job title, COO, how would you define that now? Because it’s certainly changed dramatically, hasn’t

Cameron Herold (03:45): It it’s changed in a few ways. So 20 years ago to be the COO, you had to be a major player at a major company. And I think we’ve had title inflation now where, you know, you can have a 12 person company. Sure. And they’ve given everyone a C level title. So I think there’s been a little bit of title in inflation. The CEO is really the second in command to the CEO. They’re the person that should be running the business. If the CEO was sick for six months and couldn’t come in, they tend to be the one that has kind of a bit more multidisciplinary, um, subject matter expertise. They could probably run marketing, they could probably run ops. They could probably run chart. You know, they could probably run some areas of the business, but they don’t necessarily have the pure domain expertise to be a chief marketing officer or a chief technology officer in a similar size company. So they tend to have, you know, good operational chops, um, and very strong people skills. But yeah, I think there’s been title inflation. What used to be a director of ops or a VP of ops has often become as COO. And then you still have the Cheryl Sandberg who’s, you know, been COO of Facebook for 15 years with the same title. So just a little bit of confusion.

John Jantsch (04:49): Well, and I would say the other way around too, I think some larger organizations there’s been maybe title fragmentation . I mean, you’ve got people, chiefs, happiness, chiefs, revenue chiefs, you know, I mean, so where, you know, how does the COO or second in command orient themselves then in, in that world? Or are you saying that the fortune 500 companies still needs or maybe needs all of those positions? And the operations job is maybe more limited in a hundred person, 200 person organization, like who you were talking about at home office. The, the CEO really is running the company.

Cameron Herold (05:24): Yeah. If you look at, in any size organization, the COO and CEO are almost in the same box, it’s almost the yin and yang where those two coupled together are overseeing the entire arc of the operations. And then you’ll have titles, whether it be VPs or co C level that are running the independent, you know, business areas, whether you’ve got people or finance or it, and then there has been some of that, you know, movement, like, you know, the head of sales used to be a VP of sales, but they didn’t get a C level. So now it’s the chief revenue officer, right. Instead of the chief sales officer , but yeah, there’s pretty much running the functional areas. If you’re a, you know, if you’re a 10,000 person company or, or larger, you know, a true enterprise level, you probably like I was coaching the CEO and the second command at sprint for about a year and a half. I think they had 42 executives that were senior VP executive VP level. Right. So they, they had a very seasoned C-suite, um, you know, they had multiple division presidents and it’s, it’s just more about roles and responsibilities in org chart and clarity. That really needs to be clear when you get to that size.

John Jantsch (06:27): Well, and maybe to, to where I was really headed with this, maybe the second in command, um, is more descriptive of the job title than CEO. So I mean, how we know that. Yeah.

Cameron Herold (06:36): I didn’t, I said now for the last year or so, I started the COO Alliance six years ago and I said, if I was to retitle it, right, it would be more around the second in command than the COO cuz we have members from 17 countries that we’ve got president titles, VP ops titles, CTO, titles, but they’re truly the second in command to the CEO.

John Jantsch (06:55): Yeah. So, so in a maybe a smaller, more nimble organization that doesn’t have that giant C-suite what is the second in command? How, how would you describe the second in command’s role? I mean, uh, I know you, you know, you know, ver Harish and, and the EOS folks and that, that whole integrator, you know, approach. Yeah. I mean, is it really almost a point of view, more than a, a job title?

Cameron Herold (07:19): It’s funny. I was at a Verne har event about 14 years ago and I came off stage speaking and someone came up to me said, oh my gosh, you’re Cameron. And I said, yeah, he said, everyone’s been running around the conference saying, I need a Cameron. He said, I thought you were a saying, I thought you were like a BHAG or a vivid vision. I’m like, no, it’s just me. And he goes, well, everybody wants what Brian, when Gina Rickman wrote traction and then wrote rocket fuel with Mark Winters, they talked about the integrator. That tends to be the role title or their title for usually kind of the 10 to maybe 50 or 60 person company. And then you really need to get into the more mature titles where you you’re back into that real COO title. Again, they have slightly different thoughts around the, the role as being the tiebreaker where I would disagree on that. I think the CEO is the tiebreaker. I, I don’t think the CEO really defers the operational decision making to anyone in the organization. It, it really has to unfortunately stop with them.

John Jantsch (08:14): It, at that point, it’s, it’s really strategy more than pure execution. Isn’t it? Yeah. So, and, and maybe you can expand the range. I’m gonna give you a couple scenarios that, that I’m guessing that you run into because you work with people in all sizes, you know, coming and going um, what is that organization that comes to realization? I need a CEO. I mean, I’m sure you run into a lot of companies that are still founder driven, very good at selling and they’ve grown. So, so what does that organization need to be thinking about?

Cameron Herold (08:46): Well, and there’s a few different reasons why you may end up needing a COO or that second in command. One is that the roles and responsibilities that are on the entrepreneur or the CEO’s plate, or just too many, and they need to kind of divide and conquer. So they need that partner, right. Or maybe it’s that you’ve got a really key player in the organization that if you don’t handcuff them to the company, they’re gonna leave. So it’s a title. It’s like an MVP, it’s that title where you know that you’re gonna lock them up because of that, it may be a change in agent, right? It may be somebody who you just know intuitively like I’m a 60 year old CEO of a company. And now we’ve got technology coming in. I need a change agent to come in and take us from the way we always did it to an optimization and automation and remote workforce.

Cameron Herold (09:30): And we don’t have that skill internally. We need that expert to come in from the outside. They’re the change age. So there’s often a number of different types of roles that the COO can play. It may be somewhere where the CEO has built the company and now they want to step away a little bit and let someone run their business. So they have, you know, the reason we start companies in the first place is to give us cash, to give us free time or to say that we did it right. So once we’ve done it, once we got a enough cash coming in, how do we get more free time? It’s to let someone run our business for us? Yeah. So there’s often different reasons for that COO role. It’s confusing.

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John Jantsch (10:57): I’m guessing I’m gonna throw out the other scenario that you also have people that come to you and say, I have a CEO. Oh, but we’ve outgrown them. You know, or how do we level up

Cameron Herold (11:08): That was me. So, you know, 15 years ago, next week, my best friend, Brian, who was the CEO and founder of 1-800-GOT-JUNK. We were actually supposed to go for dinner tomorrow night, 15 years ago. He me aside on Thursday morning at the Vancouver club. And he said, I think we’re done. I, I think you’ve hit the end of your six and a half years. You’re not the guy to take us to a billion. I took him from 2 million to 106 million, but he was right. I was not the guy to go to the billion. And I was the sixth member of our sixth member leadership team to get replaced. You know, we replaced every other leader of the leadership team. I was the last one and they needed the next group of true seasoned leaders. So Brian replaced me 12 months later with the former president of Starbucks, us and Lonnie walked in and said, what a cute little company. And meanwhile, I’m pulling my hair up going, oh my God, it’s so big. And she’s like, this is cute. What a cute little business yeah. At some point the business can outpace the skillset or the yeah. Or really the life cycle of, of that person. For sure.

John Jantsch (12:07): Well, that’s interesting then is the simple answer. You replaced them with somebody or can you actually level that person up? Can they gain this? The, the skills You have to be there?

Cameron Herold (12:17): I’ve talked to a few people about this. So Ben HTZ and I have spoken about this, who wrote the book called the hard thing about hard things. And then clay mask, who is the founder of, of infusion saw he and I have spoken clay, and I have said that it really a, a senior leader can go through two doubles in the size of the company before it gets very hard for them to do the third double. Right? So let’s say that you go from 5 million to 10 from 10 to 20. It’s very hard for that leader to be running a 40 million company let alone 80. Well, we did six consecutive years of a hundred percent revenue growth. So I was clearly by that year six, I should have been replaced. And then the, in Horowitz said, it’s one triple that if you go from 10 million to 30, it’s hard to take it to 90.

Cameron Herold (12:58): Right? And I think you can level up, you can work with them on their situational leadership and their coaching and time management and project and EQ and all the skills. But the business is different. You know, when I was leaving, we had 13 operational businesses operating in four countries, 3,100 employees, systemwide 330 cities. It was just big. And I didn’t have the depth anymore to slow down, to consider cross-functional matrix decision making. Like I was hearing terms, I’m like, I don’t even know what these mean, let alone how to operate within them. And then, you know, that’s all

John Jantsch (13:34): I was gonna say. So is it simply a matter of somebody else has been there? and that’s what they bring to the table or is it a different skillset? Uh, different personality.

Cameron Herold (13:43): It’s a combination of both. I think it’s not only the person has been there it’s that the person has taken a company there. Mm. Cause really what Brian didn’t want was someone who had run a billion dollar company. He needed someone who had grown a hundred million company and made it bigger. And then he needed a new cultural fit that fit the size of the organization. So strangely that, that woman, he brought in didn’t work, he ended up getting rid of her, but he’s then replaced her with a friend of mine who I’ve known for 35 years. We co-founded a fraternity together in Ottawa in 1987. I was president the first year he was president the second year of that fraternity. Now he’s the COO. He, Eric, would’ve been a horrible COO in the first six years as I would’ve been horrible in his tenure, but he’s just done 10 years as COO and has taken the company to 450 million. He’s the perfect DNA for the size organization. It is now and a cultural culturally really strong of it with Brian. The trust is really strong.

John Jantsch (14:39): So I had culture written down. I mean, how much of, how much of the job is directing or forming or creating or nurturing the culture?

Cameron Herold (14:50): Oh, a lot of it, you know, I, I believe that the culture kind of permeates from within, so it starts with the C-suite, it starts with an obsession for core values and mm-hmm, obsession for vision. And, um, you know, really understanding that our people, our employees come first and our customers come second and really obsessing what employee engagement and then they’ll obsess about customer engagement. It’s really, it, it’s all those tenants that have to be kind of first and foremost, and then understanding that if you focus on that, the numbers come from there, you know, I think that’s where the truly great organizations almost build that cult-like environment while they’re obsessing about the, you know, the business processes and, you know, the, the KPI and the metrics and that kinda stuff as well.

John Jantsch (15:34): So you’ve talked about what it takes when we’re really growing that company, but for somebody that is out looking for COO role, or maybe looking to replace somebody, what, what, what do you see are some common mistakes, uh, that, that are that crop up

Cameron Herold (15:50): The most common one is that they assume, and I’m actually working on a book about the co relationship that’ll come out in about six months, but it’s the, the most common one is that they assume that if the person has had the role before they can come into my company and do the same role and they can’t because the company is very different, you know, not unlike having a spouse or a partner in a relationship if I’ve been married, just because that woman was my wife doesn’t mean she’d be a good wife for someone else, nor would I be a good husband for it, right. There needs to be a sync with core values and culture. And you know, if I love cooking, I probably want somebody who likes to clean. If I like somebody who, you know, you need to find the similarities and the commonality. And then also the fact that we don’t wanna get into each other’s lanes. So, you know, Brian did not need someone to run finance in it cuz he liked finance in it. Whereas I have members of the COO Alliance that two of their core areas that they run are finance in it. Right. So because their CEO doesn’t of those areas. So it’s very, it’s a misfit when they just assume, oh, they’ve been a COO, there’ll be a great one for me. Not necessarily.

John Jantsch (17:01): Well. So in some ways, are you saying a CEO should be looking for somebody that like for, in my case, I’m really, I’m not a system process finish line, kind of person, I’m a starting line, you know, think up the ideas kind of. So, so am I looking for somebody that’s going to shore up where I have weaknesses, so to speak?

Cameron Herold (17:22): Yeah. You’re looking for someone who’s your yin and yang, right? Who’s the match to like you’re Sarah is your second in command and, and correct. She is amazing at systems, amazing at process she’s very kind of inward facing and the organization. She didn’t even love being on my second command podcast because she doesn’t talk to the media much, whereas you’re always on stage and you’re the marketing person. And so she’s the yin to your yang, right? The trust is very high. The relationship is very strong. Those are all what you’re looking for.

John Jantsch (17:50): Yeah. Um, there seem to be a lot of organizations built around this idea of scale and helping people, you know, coaching people on that kind of growth. There’s not a whole lot of people that are doing, I think what you’re doing exactly. And that’s working with the second in command. So tell me a little bit about COO Alliance and, and you know, what somebody would expect if they, uh, came to look at that.

Cameron Herold (18:14): Yeah. You know, you, you mentioned I’ve been paid to speak on all seven continents. I’ve done a lot of work with entrepreneurial organizations around the world. So I’ve worked with Y P O in 10 countries. I’ve worked with the entrepreneurs organization in 26 countries. I’ve done large scale speaking events for Vista and 17 cities. And then there’s all these other groups for entrepreneurs like genius network and Maverick and baby bathwater and GoBundance and war room, amazing events. But those are all for the CEO and then there’s organizations for marketers and for lawyers and for dentists and doc, but there was never an organization for the second command. And I really wanted a place where the CEOs could go and spend two full days talking about interviewing and hiring and onboarding of people. Whereas if you put, you know, a hundred entrepreneurs in a room, they can only talk about recruiting for 10 minutes before they need to switch subjects. So we need, we needed a place for them to geek out on the stuff that’s more COO like, and as the whole impetus, we’re starting it. Do

John Jantsch (19:12): You feel like you are actually shaping the role as it exists today by doing obviously you, you have a fairly large reach. I know you’re, there are lots, the world is a big place, but do you feel like you’re giving some modern shape to the role in general?

Cameron Herold (19:27): I’d never thought about that. I guess I would like to now that you, you, I, I think that Gina WMAN and Mark Winters have done a really good job with getting the integr or the integrator brand for traction, and they’ve done a good job with shaping it at the smaller level. I think Nathan Benton, Steven Miles have done a really good job in their book. Um, writing shotgun and an article they wrote for Harvard years ago about the role the COO. But yeah, I think there’s been a gap in having a community for second in commands. And I don’t want to be their thought leader. You know, if, if we had a spokesperson for COOs, it should be Cheryl Sandberg, not Cameron herd. I just want to create an organization where they can learn from each other and be with each other. And so I, I guess, yeah, it would be cool if we could.

John Jantsch (20:11): So, so tell us a little bit of just about all the ways that people can engage, you know, your organization, cuz I mean it’s everything down to a self-study uh, program all the way through some high level coaching, right?

Cameron Herold (20:22): Yeah. So the invest in your leaders course is the self-study program. It’s the 12 core leadership skills that all managers and leaders need to get better at. So it’s called invest in your leaders. The C O Alliance is the clear one we’ve been talking about. We’ve got members from 17 countries. You need to do at least 5 million in revenue just to qualify. And then you have to be the second in command of the CEO. And that’s 12 events, uh, every year online and we do two in-person events a year as well. And then we have the second in command podcast and that’s just one that everybody should listen to where we never interview the entrepreneur. We only interview the second in command. Right? So I, I love you. I think your work’s amazing, but we could never have you as a guest, but Sarah, your second in command was a great guest.

John Jantsch (21:01): Awesome. Well, she enjoyed being on the show and I’ve great have, have gotten great feedback because you do have a, a large audience of pretty focused folks that listen to it. Well, Cameron, it was great having you on this show. I can’t believe it took this long, but I appreciate you stopping by and I do you wanna send anybody? I know we’ve been talking in generalities, but do you wanna send anybody to a website or anything that uh, they can learn more?

Cameron Herold (21:24): Yeah. If they go to COO alliance.com, they’ll find it everything. And then all five of my books are available on Amazon, audible and iTunes. Thank you. I just wanted to be there for your audience.

John Jantsch (21:32): Oh, well I appreciate it. And uh, hopefully we’ll run into you one of these days out there on the road.

Cameron Herold (21:37): Thanks John. Appreciate it.

John Jantsch (21:38): Hey, and one final thing before you go, you know how I talk about marketing strategy strategy before tactics? Well, sometimes it can be hard to understand where you in, in that, what needs to be done with regard to creating a marketing strategy. So we created a free tool for you. It’s called the marketing strategy assessment. You can find it @ marketingassessment.co not.com.co check out our free marketing assessment and learn where you are with strategy today. That’s just marketingassessment.co I’d love to chat with you about the results that you get.

John Jantsch (00:00): This episode of the duct tape marketing podcast is brought to you by the salesman podcast, hosted by will Barron and brought to you by the HubSpot podcast network. Look, if you work in sales, wanna learn how to sell, and frankly who doesn’t check out the salesman podcast, where host will Barron helps sales professionals learn how to find buyers and win big business ineffective and ethical ways. And if you wanna start someplace, I recommend the four step process to influencing buying decisions. Listen to the salesman podcast, wherever you get your podcast.

John Jantsch (00:44): Hello, and welcome to another episode of the duct tape marketing podcast. This is John Jantsch, and I’m gonna do a solo show today. It’s actually been a while, but I wanna cover a topic that is very high on a lot of business owners’ minds. And that’s the idea of retention of internal team members, internal customers, whatever you wanna call them, employees, staff, team members. This has been a really hot topic of the last year, and I think it’s not going away. There’s a lot of pressure for a lot of reasons on this. So I wanna talk about it as the subject that it is, obviously it turns into production issue or fulfillment or capacity issue for a lot of organizations, but it’s really a marketing problem, or at least can be solved I think, with a marketing solution. So that’s what I’m going to present.

John Jantsch (01:34): Hey, I also wanted to let you know that I have been working very hard on a unique marketing strategy assessment. A lot of people have these, uh, marketing assessments out there that that really are just measuring your tactic approach. What you’re using, what you’re doing. I’ve created something that really is heart and soul to the idea of strategy before tactics marketing as a system. And I’d love for you to check it out. Uh, the URL is marketingassessment.co. So it’s marketing assessment.co go on over there and, uh, check it out to go through. It takes about, I don’t know, five minutes to answer the 20 questions and, and the report that you get at the end of it, frankly, is, is enough gold to, to have you actually, uh, improve or find area of for improvement in your, in your marketing strategy. So, uh, check it out, marketing assessment dot C.

John Jantsch (02:29): All right. So let’s talk today about rethinking the recruitment journey. You know, one of the things that I think that certainly I’ve said this many times to anyone that will listen, one of the things that I think the pandemic and, and a great deal of what went on with the, the, the chaos of the last couple years is that, you know, a lot of businesses do pretty well in good times just by being in the right place at the right time. A lot of businesses during the pandemic learn that, but boy, in tough times, growth comes from being important in the lives of your customers and your employees. And it’s a constant, uh, battle. It’s constant shifting there’s the leverage changes, you know, so to today we work with a lot of folks that are saying, Hey, I don’t need more customers. I need more people.

John Jantsch (03:12): So the leverages in many cases is, has gone squarely to the employee. And I think that changing dynamic, I think does have a tendency to allow people or, or to get people in the habit of thinking, oh, this is just a vending machine approach, need more customers, put some money in run, some ads, run a funnel and create more customers, oh, need more employees just go run. Some ads, go to the job boards, put in some and voila pops up some new employees. And I, I wanna share, I’m gonna rifle through. ’em pretty quickly a few statistics that should shed some light on how we have to be thinking about this in a much different way than the vending machine or the funnel approach. Apparently less than 15% of the, of every job that’s advertised on those job boards, you know, monster indeed, et cetera, gets filled by candidates who actually apply through the job board.

John Jantsch (04:07): So we’re spending a whole bunch of money there, and it’s not really producing the results. 50% of candidates say they wouldn’t work for a company with a bad reputation, even for a pay increase S true of customers coming to us. Why wouldn’t it be true? Of course of employees as well, 79% of candidates use social media in their job search. We have to be where they are. That’s, that’s true. Again for customers as certainly as much as it is for staff. 92% of consumers will visit a brand’s website a first time for reasons other than making a purchase, guess who is visiting your website for reasons other than making a purchase people you might hire, or you might wanna hire 71% of employees say that they would accept a pay cut for a better working experience. A flip side of that is I know I’ve paid more or a product or a service when I got, or was expecting to get a better experience.

John Jantsch (05:05): I think it’s just the flip side of that exact same thing. 89% of employers think employees leave for more money. That’s why everybody defaults to more money. That’s why everybody defaults to lowering their prices when, uh, they’re trying to attract new customers. It, again, it’s the flip side of the exact same thing, but according to a very large gala poll, only 12% of employees actually leave for money. And I think the thing that, the point that I’m really trying to drive home here, in fact, if you’re really in a hurry, just take note of this idea and, and you’ll have the essence of where I’m gonna go with this, uh, today. People really aren’t candidates or consumers. They’re both, there’s no distinction. I mean, people are just people. So the vending machine approach of let’s put money in and get more customers, put money in, get more employees, lower prices, you know, advertise bonuses, you know, for getting employees.

John Jantsch (06:05): I mean that, that approach will draw some people, I suppose to you, but you know, people who come to you for a price increase or price decrease, or employees that come to you because they get a dollar, two more, an hour are gonna leave for the exact same reason. So when I talk about the customer journey and the employee journey, or how somebody, uh, comes to, to join an organization, it, it it’s really in a lot of ways, it’s not even a marketing issue. It, it is a strategy issue that I think can be solved with of the marketing approach. So here’s the three steps for creating the perfect recruitment strategy. First one is to know who you’re trying to recruit. And I know everybody says that, but what people forget to say is that you probably already have some ideal employees in your organization.

John Jantsch (06:51): Just like I talk about narrowing your focus to the top 20% of your customers, look at your team. You can do the same thing. What is it about your highest performing, uh, folks, the people that thrive in your organization? What is it about them that you need to understand? What behavior, what characteristics, what objectives, what problem can you promise to solve as an organization? That’s always been true from a, an attraction standpoint for a, a differentiator for your customers is going to be true, certainly for employees. So how can you create an end to end customer journey? Think in terms of employee recruitment pipeline, it’s something that doesn’t, it isn’t meant to be an event. Oh, I have a position to fill. We need to do X that’s. What gets people in, in the mindset of, oh, I have to offer more money. That’s the only way to get more people or I have to spend more money on the job boards.

John Jantsch (07:45): That’s the only way to get more people. It has to be something that becomes part of the DNA of, of all of your marketing. So look to your current employees and I’m gonna give you four questions and you might come back to this, uh, part of the recording. I’m gonna give you four questions. If you need to write these down to, to try to either think about, or even even ask your employees sometimes asking is tough because it’s the boss ask asking. And it’s like, is my answer really gonna ? Is it gonna be used for good or bad? But here, your question to ponder, what does their current work life situation look like? You’ll find that they probably have certain goals or in a certain point in their life that they, you know, have certain values. Now that doesn’t, I, this is not an appeal to say everybody in your organization needs to think and look alike.

John Jantsch (08:35): It’s just that there are gonna be certain situations that I think might be keys or might be signals to, you know, what you’re looking for, or, or at least what you start promoting. If you find that many, uh, folks in your organization enjoy a certain type of work or a certain type of environment, they Excel in, then you wanna start talking about that. That that’s what we do here. All right. Second question. What do they enjoy? What frustrates them in what work environment do they Excel? Number three, and number four, what factors were involved in them making a decision to come to your organization? If you could start to understand doesn’t mean you have to have all the answers, but if you can start to at least think about the answers to those questions, you’re gonna have a better idea of the message you need to take out there to the world and start talking about why your place is a great place to work.

John Jantsch (09:25): And speaking of that, one of the greatest marketing messages, this is to attract customers is to talk about your people is talk about how exceptional your place is to be an employee. In fact, we’ve actually moved many of the marketing messages to be, you know, for example, a remodeling contractor, our people make your remodeling experience exceptional. That is a very positive, attractive message for the people that want to remodel their kitchen, because maybe they’ve were worked with not such so exceptional people, but it’s also a great message for the potential employee. You’re leading, talking about the fact that your people are exceptional. Hey, I wanna work there now. Also, don’t forget. As I reminded you many times, don’t forget about Google reviews. If you’re getting some amount of Google reviews, pour over those word for word first off, what you’re probably going to see is that if your people are truly exceptional, your customers are going to be noting that they’re going to be actually naming them by name.

John Jantsch (10:29): In fact, they might not even name your company, but they might name somebody who works at your company. So start understanding what they about your people, about the experience that they’re having. Those are some real cues to what maybe you ought to be saying. The promise that you ought to start making, uh, to, to demonstrate that you can deliver a better experience. You know, customers don’t actually change comp I mean companies, I mean, I don’t think we want to jump around and say, well, that didn’t work outs, or maybe it did work out, but I’m gonna go look for a new one. Uh, I think we want to stay with companies. And so we don’t really leave them. We leave the experience that we’re having with them. And now let’s hear from our sponsor. Look, if you’re tired of slowing down your teams with clunky software processes and marketing that is difficult to scale, HubSpot is here to help you and, and your business grow better with collaboration tools and built in SEO optimizations.

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John Jantsch (11:52): are the third component of this strategy idea is that is, is to think about this end to end journey. You know, a lot of handing these days about all the things that have changed in, in, in marketing and in business. But, you know, I think the thing that doesn’t get talked about enough, the thing that’s changed the most is how P people choose to become customers and employees. They have so many options today and how they decide on the company that they’re going to, to hire is, is all about the research that they do.

John Jantsch (12:24): And they go out there and, and in a lot of ways are making a decision, you know, before we even know that they’re looking at our organization and this, this is certainly true of some be coming to be hired as, as an employee. So we have to think about the marketing hourglass as we apply it to the employee journey. And so, uh, as a reminder, I know I talk about this all the time, but the marketing hourglass for us is, has seven stages. They are no like trust, try by repeat and refer. And so what I’m asking you to consider is what is, what are you doing to intentionally guide somebody to come to know about you and, and start to think, Hey, this is a place I might wanna work, but then as they start to dig in, you know, what message are they seeing as in terms of a story, are, are they connecting with your values?

John Jantsch (13:10): Who do they meet first? Is it easy to find out more information? If for me, how often people will have a, Hey, come, you know, we’re hiring and then you click on a button. And before you ever find anything out about the company, you have a, a five and a half page application to fill out. That’s like going from, Hey, you know about us now, I wanna buy you wanna buy and, you know, skipping the steps of trust, building that, that really make you, you, the obvious choice, obviously reviews, employee stories, your values and actions mentions in the media. Those are all things that are part of the employee journey today. And in fact, as I started to say, I think the, the beauty of this idea of branding your organization is a great place to work is it’s a killer marketing message. I mean, how could that possibly be a, for anybody who wants to hire you or, or buy your products and services?

John Jantsch (13:59): So promoting, uh, part of your content strategy ought to be in fact, a huge part of your content strategy ought to be, to promote things that your employees, your team members are doing, how they’re advancing, the fun that you’re having at your organization. I mean, these are things that go in many cases in the early part of the journey, they go a lot farther than the benefits that I’m gonna actually receive, because I think people, uh, more and more are, are leaving organizations maybe even for pay cuts or, or certainly not staying at organizations because the 401k is the bonus is great. If the environment is not great, if the experience of being an employee there is not great, then none of that really matters. So then if we slip over to the try and buy and, and obviously substitute higher for buy, if you like, , it’s not a real stretch in my mind.

John Jantsch (14:53): So the try process, what, what is that application process look like? The phone screening, you have so many, and again, what happens is a lot of organizations don’t have an HR department, don’t have a professional who’s charged with the hiring experience. It’s the manager or the VP of something that actually has another job, and this is just something they are doing. And so the follow up and the experience, and, you know, once they come on board, the onboarding, the who, who their manager is, you know, how they interact with current employees. I mean, all of that, their training plan that’s laid up. The statistics are pretty crazy about when people leave organizations within the first night days. It’s because there was, there was no onboarding. It’s true of customers. You know, you’ve heard me talk about Joey. Coleman’s great book, how to keep, I can’t remember now the title, but how to keep an employee no, how to keep a customer for life.

John Jantsch (15:43): Although he is actually working on the employee one too, he tells me, but the idea behind it is make the first 90 to a hundred days an amazing experie. And you will not have the turnover that many organizations, uh, experience today. And speaking of that, you know, just like keeping customers is, is a far better way to grow a business. Keeping your employees is a far better way to grow, not just your team, but your organization. You know, the number one, uh, reason people are citing now for leaving organizations is a lack of respect, a, of a growth path or any kind of personal development. I mean, pay and benefits certainly shows up on the list, but it’s way down from things like respect and, and personal development. And then finally refer, I work with a lot of organizations that have happy, happy employees and happy customers.

John Jantsch (16:30): And, and we always scratch our heads say, well, why aren’t they referring us? And most of the time, it just comes down to the process. The, you know, it’s almost with, with employees, a lot of organizations almost treat it like, uh, you know, an expectation, a part of the job, you know, they offer a bonus. So it just becomes part of the pay. But the biggest reason people don’t make recommendations or referrals, both as customers. And it lawyers is they don’t understand or worse don’t trust the process. Maybe the hiring process for them was kind of wonky. Hey, they like being there now. but the, uh, the process itself was a little bit stressful. Do they wanna put their friend or, or neighbor, you know, through that kind of thing. And last thing about retention people don’t change jobs. I mean, they change about, so the, again, a lot of it has to do with the experience that they’re having, you know, maybe with the person they’re directly reporting to, and not necessarily with the organization, I’ve been running recruiting ads, a skilled labor positions for a number of years, and we test different headlines in different approaches.

John Jantsch (17:32): And the number one recruiting a for the past two years simply just says, respect with a question, mark, you know, do you feel like a respected member, uh, of a team in your current, uh, position? And it beats everything else. We try, you know, time and time again, because that is the, that is what’s missing for a lot of people in the, uh, positions. And I don’t care what type of job it is. I think that’s, uh, the piece that’s really missing. So think in terms of this idea of the marketing hourglass and, and applying that journey to the recruiting process, intentionally helping move people through the stages of no, like trust, try higher retained and refer. All right, that’s it for me today. Um, again, I wanted to remind you to check out the new assessment that, uh, I built it is a marketing strategy assessment.

John Jantsch (18:24): You can find it @ marketingassessment.co – not.com – marketingassessment.co. All right. Take care.

John Jantsch (18:32): All right. So that wraps up another episode. I wanna thank you so much for tuning in and, you know, we love those reviews and comments. And just generally tell me what you think also did you know that you could offer the duct tape marketing system, our system to your clients, and build a complete marketing consulting coaching business, or maybe level up an agency with some additional services. That’s right. Check out the duct tape marketing consultant network. You can find it at ducttapemarketing.com and just scroll down a little and find that offer our system to your clients tab.

John Jantsch (00:00): This episode of the duct tape marketing podcast is brought to you by the salesman podcast, hosted by will Barron and brought to you by the HubSpot podcast network. Look, if you work in sales, wanna learn how to sell, and frankly who doesn’t check out the salesman podcast, where host will Barron helps sales professionals learn how to find buyers and win big business ineffective and ethical ways. And if you wanna start someplace, I recommend the four step process to influencing buying decisions. Listen to the salesman podcast, wherever you get your podcast.

John Jantsch (00:44): Hello, and welcome to another episode of the duct tape marketing podcast. This is John Jantsch. My guest today is John Cantarella. He’s a VP of community and impact partnerships at Facebook prior to joining Facebook, he was the president of digital of the news business and sports properties at time, Inc, where we are versa saw time.com, CNN money.com, fortune.com, si.com and golf.com. He also spent a number of years at the New York times company at NYT, I guess it’s NY times dot com, running strategy, marketing, and operations. He was a part of the management team instrumental in launching NY times dot coms, first paid product and the acquisition of about.com. So John, welcome to the show,

John Cantarella (01:30): John, thanks so much for having me just hearing that a while it goes back a bunch of years too, but I really appreciate you having me, uh, on, on your podcast.

John Jantsch (01:38): You, you bet about.com is really a blast from the past. You actually, of course, people are listening to this. You don’t look old enough for, to have, uh, been involved in that they, the about.com. There was a, a guide. I think that’s what they called them in my community. That was, you know, interviewed me a number of times. So about, this was like around 2000 ish, I think, or something like that. But

John Cantarella (02:00): You probably remember it was called the mining company before it was about.com and it was kind of an early community platform, you know, with those guys who are really building it.

John Jantsch (02:08): Yeah. Very early on. And it it’s kind of been absorbed into something else now hasn’t it?

John Cantarella (02:13): It has, I think the New York times ended up selling it to, to Barry DI’s company interactive core, I think.

John Jantsch (02:20): Yeah. Yeah. All right. So let’s go. Not quite that far back, uh, but let’s start at about 2008, which was probably the date that Facebook really became a business tool or started the journey becoming a business tools. So could you give us a quick, in your view, you know, how business use of Facebook has evolved kind of from those early days to where we are today?

John Cantarella (02:43): Yeah, I know it’s a really interesting question. You know, what I, I wasn’t around in 2008, but you know, early days, I mean, you know, Facebook was really an effective, you know, marketing platform, particularly in the early days, really focused much more on, you know, customer acquisition, which is still obviously a large part yeah. Of our business, but because it was one of the early platforms to allow, you know, self-serve, it really built, you know, a huge ecosystem of small businesses. Yeah. And, and, and, and it helps scale the platform really quickly. I think, you know, this company has gone through so many transformation. I mean, you think back in 2008, you think about early advertising and banner ads. And, you know, I could remember, I remember all the different formats, but, you know, in those days, Facebook really pioneered, you know, and didn’t use traditional ad formats like the, you know, 300 by two 50 and, and really started, you know, you know, running ads and feed, and then obvious, you know, mobile happened, the company transformed and pivoted very quickly towards mobile. And I think you’ve seen that we’ve innovated on, on formats over the years from, you know, feed ads to ads in stories. And, you know, and now you’re starting to see, you know, ads and things like reals. I, I think that the thing that’s, you know, what we hear a overall is that I think about it in terms of economic opportunity. When I think about the millions of small businesses that use Facebook and, you know, it’s an incredible platform to drive people, to, you know, take action for your business.

John Jantsch (04:15): So going back to my early use and it, I mean, it was such a great place in the early days to get exposure for your content, because again, the way the feed was first off, it wasn’t as, as busy, but also the way the feed was as you, anybody who followed you saw your stuff. And, and obviously as it became so many more users and so many more, so much more functionality, you know, adding Instagram now and, and other purchases it’s really in a lot of ways is it’s become much more complex. Hasn’t it?

John Cantarella (04:44): I think it is complex from a, from a, you know, you have to be somewhat skilled in knowing how to reach an audience. And I think that’s why we have a large ecosystem of partners that, that help you. But, you know, if you’re a small business, you know, you can’t necessarily hire a third party. I think where they’ve innovated really well is, you know, to your earlier point, you know, obviously we have Facebook, we have Instagram, there’s WhatsApp, and, you know, you know, within, within quest, you know, you can run an ad and there’s so many tools in business manager that allow you to place an ad that it’ll optimize for you. It up, you know, you can put some basic things in there and the, and that system will take care of the rest for you, like continually optimize the audience across platforms. So really trying to simplify it that said, you know, if you’re a sophisticated organization, you know, you could really be very specific in who you’re trying to target.

John Jantsch (05:40): So a lot of small business owners certainly use the ad, you know, functionality and dependent upon types of businesses have done really well. I’ve also seen, uh, a lot of small businesses in a non-paid environment, the groups that, you know, creating communities for various reasons. So

John Jantsch (05:56): Why do you think, I mean, there are a lot of tools now that you can create groups and communities. I mean, HEC slack, you know, this is one that a lot of people will attempt to do that. Why do you feel like Facebook, uh, has such a hold on? I mean, obviously part of it’s just sheer numbers. There’s so many people on Facebook already, but it, it feels to me like, you know, the group functionality at FA on, on the Facebook platform is, feels far superior to a lot of other, you know, options out there of kind of doing it on your own.

John Cantarella (06:23): You know, it’s a, it’s a great point. I would say, fundamentally, you know, we talk about product market fit. The product works incredibly well. And we have an unbelievable product team who, you know, over the last year is literally launching new features based on what the community’s telling, what they need on a weekly and monthly basis to really ensure that people can manage and grow their community or their groups. I mean, to your point, like, so we call them groups, but to be honest, you know, fundamentally our mission as a company is to give people the power, to build community, to bring people closer together. And, and Mike to team specifically works with people that build communities. So we know there are over 70 million people, um, that are managing groups. There are over 1.8 billion people, monthly in groups. And, you know, with that’s your scale, you know, these are ordinary people doing extraordinary things.

John Cantarella (07:13): And we like to think about them as communities. And, you know, you wrote about this in one of your books. You know, a lot, lot of these folks are purpose driven. And there are a collection of people that receive a sense of belonging through the connection, and frankly, a feeling of safety and trust that they invest in over time. And when we see small businesses or even larger businesses use, uh, Facebook groups, we see it because they’re driven by a purpose and, and something they want, um, they’re consumers to have around a short interest or a goal or an attitude. You know, they’re not looking them as just a as capital, right. They’re looking at it for purpose.

John Jantsch (07:49): So I think a lot of people get the idea of, of say putting clients or members or, you know, whatever we wanna call them into a group. I mean, that’s quite obvious what are some other place along the customer journey that you think groups or communities fit that maybe people aren’t thinking of?

John Cantarella (08:06): So the, the thing that we’re seeing you think there’s a stat out there that 80% of small businesses have used digital tools in the past month, you know, for advertising and communication. And overall, you know, you know this, and you’ve been doing this for years and consulting for companies. I, I think gone are the days when one way communication is gonna work. You can’t speak at your audience anymore. And so, you know, what we’re seeing is, is that companies that are purpose driven, small business that are purpose driven, you know, are finding real value when they’re building a group. Right? So they’re looking at for multiple things. So, you know, we call it and I, I have to give all credit to a woman. My name milita tub was an early investor in communities and started the community fund. You know, she calls it C C ROI community return on investment.

John Cantarella (08:55): And when we think about that, there, there are three things that we’re seeing, small businesses and businesses get out of community. One is, you know, potentially revenue. There’s a real lifetime value when people are, are in your group, because they’re your best customers. Secondly, you know, from an operational standpoint, you know, it could be a customer support tool where your community, it’s making your operations easier because people are talking to each other to help solve problems. And, and that third piece is really the insights piece. You know, we’re seeing multiple companies use it for product development and they’re, they’re using what they’re hearing in their communities to make their product better and have a, a continuous conversation with, with a customer. And there’s so many great examples of that.

John Jantsch (09:40): Well, and I, I think you missed one that I’m seeing a lot of is peop it’s actually become a top of the funnel, you know, tool for a lot of people where they’re building these free communities, where people get a taste of what it’s like to be in that community, or to be coached by that person or whatever is before they really even go into the true sort of sales funnel.

John Cantarella (10:00): It it’s a great point. And we, we hear this from a lot of small businesses. I have an example. There is a founder called Priscilla side. She started a, a beauty company called Coco kind. And, you know, it was all started out of a need. She really wanted to have a clean, deep brand. She felt a lot of the beauty brands out there weren’t aspirational for her because she suffered from, you know, pretty bad skin. And she, you know, didn’t relate to a lot of what she was seeing out there. So she started this beauty company called Coco kind. And as she started this company, she started to interact through Instagram and direct message with customers to really understand, like, what formulas do they like? What, what is the packaging, what the colors that they like really finding that they’re educated consumers. And then as her community on Instagram grew larger, she started to do polls that you get things like she gets things like 30,000 responses from her community through this, what she calls her Coco kind lab. And then she also started a Facebook group called skin positivity because, you know, these folks really love the products that she produces, but they also wanna connect with others around, you know, tips and tricks and to support each other. And to your point, you know, this becomes an organic top of funnel, as opposed to, you know, if you, if she doesn’t remain true to permission of skin positivity, you know, people can see right through that.

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John Jantsch (12:09): Yeah. So you really hit on kind of where I was gonna gonna go next. You know, are there some, I, I hate the term best practice. It implies that there’s no better practices, but are there some best practices to really stimulate and grow and, and keep this very engaged community? Cuz you know, I see all kinds of people I get invited to ’em all the time, these groups that you go there and it’s like a ghost town, you know, so what are some, if somebody’s really one to do this, what do they have to, what what’s their investment gonna be?

John Cantarella (12:37): It’s a really important point. And it’s an important point because you know, everyone, not everyone, but, but most companies have someone who’s their marketer and they have someone who’s their social media manager, community management is none of those. Yeah. And you know, we’ve seen cases of large companies starting communities and then quickly losing control of it because they don’t have a clear mission of what they’re doing. And you know, we’ve spent a lot of time to make sure that our ecosystem of community builders really have the resources that they need. So first of all, we have everything from a community management certification program to a playbook for small business or any business to really figure out how to get started to use, you know, Facebook groups and also just figure out like what community platform works best for you. So I think number one, we’d like to say why like identify what your community objective is, right?

John Cantarella (13:29): You know, it, it, your community objectives should number one, be I just want more customers. Right? And then once, you know, oh, your why it’s really, how do I list the right person to, to manage that community and then really develop a strategy to support your desired outcomes. And then once you’re there, then you start to build the guiding principles and you start to engage the community. And what you see is, you know, these communities start to grow pretty pretty quickly. Uh, and I’ll give you an example. One of our, our partners is, is a young woman called DEHA Kennedy. She started a community called broke black girl. And, and her mission was really to provide culturally relevant financial information to African American women. I mean, she, I love it. She called herself at a five financial activist, right? And so she started this community to help women save money and it quickly became 80,000 people wrong.

John Cantarella (14:17): And you know, she was a community first leader because of an issue she was having to really find better financial, um, literacy and information to manage finances from that, she started getting people in our community, asking her to consult for them. And it’s gotten to the point now where Dasia could no longer do one-to-one consultation. So she started to build old small business where she’s offering seminars, she’s offering templates. And it’s your point? It’s, you know, she’s like, look, I can’t look at them as capital. I look at them as people and I’m providing value and if they want to migrate to my website and buy one of my courses great. But I, you know, it is topless funnel for her, but it’s organic.

John Jantsch (14:55): So you touched just briefly, maybe unintentionally on a another point that I know, uh, sometimes comes up. So I build this 80,000 person community, great tools, great community, but I don’t really, oh it, um, it’s on somebody else’s platform. I’m sure you hear that all the time. What, you know, how do you address that? Sometimes very real concern.

John Cantarella (15:21): So I, I like to think of it in terms of, we are nothing without these individuals. And what I’ve found is both when I speak with small businesses and I work with these community builders, they are enormously grateful for the impact that they are able to make, right. With the tools that we provide them. And so, you know, we manage multiple, I mean, I would say not multiple thousands of community builders who are some of the most engaged on that platforms. And we spend a lot of time with them getting their feedback and, you know, and putting them in front of our product leadership to make sure that we can build all the tools that they want. And, you know, we call it our top pain points or people problems, you know, what are the product enhancements that we need to build to support them on the flip side, you know, our team is very focused programmatically to capacity, build individual to make sure, you know, when these communities grown in a certain size, they immediately see that it becomes a challenge. So we wanna make sure how can we make your community sustainable by launching monetization products? How can we support you in your leadership journey? Cuz you need to build a team to support the work that you’re doing. And so if you look at the tools over the last year that we’ve launched, they’ve really been in response to these individuals, being able to, you know, feel more ownership over their communities. Overall,

John Jantsch (16:44): I know on my show, there’s a lot of businesses that are, are traditional local businesses. You know, how would they go about looking at this cuz because obviously they have real geographic constraints just by nature of the model of their business. And obviously social media has oh, geographic constraints. So, you know, what are there ways that, that you’ve seen local businesses use this? Not, not just to build numbers, but to do something that might effectively, uh, drive revenue.

John Cantarella (17:13): I have, I mean, here’s the thing, you know, I just saw the sta this week, it was in the New York times, which is really frankly upsetting and frightening is that with more companies settling into permanent hybrid work from home in New York city, specifically the average office worker is predicted to reduce their annual spending by nearly $6,700 pre pandemic. They were almost $14,000 around their office areas. And if you go down the list, that’s a New York city with, you know, largest metropolitan area in, in the us, you know, Los Angeles and San Francisco. It’s a $5,000, um, reduction in spend that is terrifying. And the thing that I think is so important for small businesses and this is at the local level, right? Most people, you know, think about small businesses at the local level. You know, during the pandemic, we launched multiple things to support small businesses, not only grants for them, as well as you know, in, in communities, but even on Instagram, you could, you can still launch a sticker today that is, is linking to your local small businesses to make sure that, that you can support them locally.

John Cantarella (18:17): So, so local is fundamentally, you know, when I think about community, that’s what I think about. Secondly, I say is that it’s so important for small businesses to have the digital for front door and a digital front door is not only a social media presence, but also, you know, the people that off by your store every single day, they are your community. And sometimes small businesses don’t realize that. And so I would always encourage these small businesses to really engage with their customers. And you know, this is the beauty, I mean, community has redefined itself. We always think about community in real life. And so, you know, now it’s both, how do you make sure you can bridge the people that walk by your store every day with this digital front door to make sure they can connect with you? Right. So my local restaurant of the street noodle pudding here in Brooklyn, New York, you know, I follow my Instagram. I would love for them to have a I’d love for them to have a group. You know, they post their menu every single I wanna support them. So it’s really important for these small businesses to put that digital shingle out there in as many ways as possible.

John Jantsch (19:20): So this is a big question. I don’t know if we can end up on this or not just give us a glimpse of what’s maybe next for businesses on Facebook, but obviously community as well.

John Cantarella (19:29): So I think there are multiple things and I, I think, yeah, you are an early evangels of evangels to this, from what I can tell, you know, I think it’s so important. We talked about this community return on investment, but to me, the other piece that’s so important is the purpose and the social value. You’re bringing to people in the sense of belonging. That’s why I feel so strongly that businesses, that build community in the future, you know, you, any young person today wants a company that shares their values, whether it’s around sustainability, like colo kind or, you know, focus on social justice, they wanna know what you stand for. And they’re not gonna find that out. If you don’t talk about it and engage them on it. I also think that community is not going to be a marketing function. We’re gonna start to see the biggest companies have a chief community officer, and there’s gonna be a whole new industry trained up around people being certified in community management.

John Cantarella (20:24): We’re already seeing a bunch of third party companies start to build metrics and tools so they can start to measure the value of community overall. And you know, the better we’re able to support our partners in being able to measure the value of their community. The stronger they’ll be. I’ll give you an example. There’s a, an incredible startup cold tonal. They’re a home startup and they have a home exercise machine and we’ve been working with them on a case study because they have this toll community on Facebook. And if you go on there, you see these people who are so dedicated to the exercise, but we also found that their most active community members work out with the product more than the average user and they are, are more and they’re much more significantly likely to recommend to tool brand. They also get feedback every Friday, it’s hashtag feedback Friday on how to improve their product.

John Cantarella (21:17): And they filter it back into the brand. You know, it it’s the full circle. So I think you’re gonna see more companies like to like Airbnb, like Coco kind and, and broke black girl invest in community and set themselves apart from everyone else. And I, it, you know, it wouldn’t be right if I didn’t, uh, mention the metaverse, you know, as we’re building, uh, virtual reality, we’re obviously making a really big investment there, you know, and part of what we’re gonna do is really help define what community will look like in the virtual world, which is gonna be fundamentally important. You know, if you can’t be there in person, you can be there with your avatar and hopefully get a sense of, what’s like to be a part of a community.

John Jantsch (21:56): You know, you mentioned obviously hybrid workplaces, distributed workplaces, you know, are, are certainly they’ve been going on for a long time. But I think that they just got a jolt , you know, from what we’ve done in the last few years, what role would a tool like, um, like your community groups play in retention of employees? You know, I think that’s a, that’s a pretty hot idea right now because, uh, so many people, I don’t know where they are working now, but so many people have left to go, uh, pursue other careers. And so retention and recruitment have become, you know, really hot right now for a lot of our organizations. What role can community play in that since we don’t have the natural sort of meeting community place?

John Cantarella (22:38): I think it’s so important to think about that. And, you know, and again, you’ve written about this. I think if you don’t start by building community with your company, it’s gonna be really hard for you to create an authentic community outside of your company for your customers. I think the beauty of working company look, I’ve worked, I worked in media for years and I’ve been at MEA for seven and a half years now. And we, you, you have a version of Facebook internally, cold workplace, and, you know, beyond the groups that we’ve created to collaborate. So you might have a group that you’re collaborating on a, around one project. We also have a lot of groups within our company that are just really fun. You know, it could be sad work from home meals, it could be, you know, you know, people at, at meta that are over 40, you know, they’re really fun and they help you build community overall with people within your organization when you can’t be in real life.

John Cantarella (23:36): And that really sustained a lot of people in our organization and in companies, not only, you know, communities, but even, you know, even tools like zoom or chats, you know, we have a chat for it’s a Peloton chat for folks on my team, and it’s a great way that we all just, you know, support each other and build a community around a shared interest. So I think that using digital tools is really important, but it can’t completely supplant, you know, in real life. And I think that combination of the two is really being thoughtful about how you bring the digital platform and the in real life potluck all together is really important.

John Jantsch (24:14): So John, tell me, you mentioned the playbook. That might be a good place to start, but if there are any other resources you wanna mention or draw our attention to,

John Cantarella (24:21): We do, and I’ll send you the, I’ll send you the URLs and you can add it to the site, but we, if you go to fb.me/business/community, I know that’s a mouthful, but we have a playbook. We have all kinds of resources for people that are building community. You know, I like to say to, to the team, it’s, you know, we, we are trying to be as colloquial and as sufficient price, as you know, know, I think that’s, again, you know, as possible where it’s like, how do you break it down? So that it’s really easy. Step one, step two, step three. So that it’s really easy for people to onboard. And the beauty of our tools too, the way they’ve been built is that there’s a lot of automation involved so that, you know, you don’t have to be air dust 24 hours a day, but, but you do have to be there to tend, you know, it’s like being a gardener, you know, make sure you head to it.

John Jantsch (25:08): Yeah, yeah, absolutely. Well, John, thanks so much for stopping by the duct tape marketing podcast and hopefully we’ll see you one of these days out there on the road,

John Cantarella (25:15): John, I really appreciate your time and, and thank you so much for having me.

John Jantsch (25:19): All right. So that wraps up another episode. I wanna thank you so much for tuning in and you know, we love those reviews and comments and just, I generally tell me what you think also did you know that you could offer the duct tape marketing system, our system to your clients and build a complete marketing consulting coaching business, or maybe level up an agency with some additional services. That’s right. Check out the duct tape marketing consultant network. You can find it at ducttapemarketing.com and just scroll down a little and find that offer our system to your client’s tab.

John Jantsch (00:00): This episode of the duct tape marketing podcast is brought to you by the salesman podcast, hosted by Will Barron and brought to you by the HubSpot podcast network. Look, if you work in sales, wanna learn how to sell, and frankly who doesn’t check out the salesman podcast, where host will Barron helps sales professionals learn how to find buyers and win big business ineffective and ethical ways. And if you wanna start someplace, I recommend the four step process to influencing buying decisions. Listen to the Salesman Podcast, wherever you get your podcast.

John Jantsch (00:44): Hello, and welcome to another episode of the duct tape marketing podcast. This is John Jantsch. My guest today is Laura Nelson. She’s marketed, sold to and collaborated with local businesses for over 10 years of her career. As a marketer and business manager, she’s currently the vice president of marketing@signpostfollowingroleswithbroadlyreputation.com and patch. She an MBA from the university of Michigan and a BFA at Carnegie Mellon university. So Laura, welcome to the show.

Laura Nelson (01:15): Hi Jen. Thanks for having me.

John Jantsch (01:17): So what did you work on in your, uh, fine arts?

Laura Nelson (01:20): I was a paint drawing, um, print making specialists. So mostly two, two dimensional works. However, through the program, we had to learn how to use every medium from the traditional media to, uh, computer based video, everything in between.

John Jantsch (01:42): So, so what do you do with that now in life Still paint or,

Laura Nelson (01:47): Yeah. Awesome. I do still practice my art. I, I draw quite a bit and make prints of it and give them the friends or sell them. The pandemic was a great opportunity to get back into it. Just given that I had more spare time as

John Jantsch (02:03): We, I picked up the, I picked up the mandolin. Oh, there you go. So yeah, I think a lot of people did that. Yeah. So, so let’s, you are at signpost for those that don’t know signpost specializes in, in a lot of, uh, local marketing, uh, tactics. So we’re gonna talk about local national differences in marketing. So let’s start there. Are there any significant differences, uh, say for a plumber versus say a software company when it comes to digital marketing?

Laura Nelson (02:33): Yeah, absolutely. Um, a plumber primarily is trying to attract homeowners, you know, to his or her business right

John Jantsch (02:42): In their community generally. Right?

Laura Nelson (02:45): So like, you know, they are restricted by geography. They have a certain budget in mind. Often there are trade offs when they’re budgeting for marketing versus other, you know, expenses and other staff, et cetera, company like ours signposts. We are a B2B or business to business company. So we sell all across the United States and we sell primarily to businesses rather than to homeowners plumbers are our customers. Right, right, right. Along with other contractors who are looking for ways to, uh, attract homeowners with looking for ways to build their brand and their communities and ultimately grow their businesses. Right.

John Jantsch (03:30): So that local business that works in a community, obviously they, they want people generally speaking in proximity for a lot of businesses to, to be able to go online and find them. I mean, that’s obviously the major difference. And in, in my experience, especially lately, if they’re not finding you in maps and things like that, it’s almost like you don’t exist because so many people are making or purchase decisions that way. What about that business that has 10 locations, they have a, a different problem, a different challenge. Do they need to be optimizing for all 10 locations? How does that kinda change their calculus when it comes to, to online local marketing?

Laura Nelson (04:13): Absolutely. And you know, we work with businesses that have one to 10 locations. It’s just an example. That would be our sweet spot. You know, the single location is going to be solving for slightly like different problems than someone operating a business at 10 locations. Sure. They’re thinking about scale and achieving economies of scale, right. Depending on how they’re set up, you know, across multiple communities or multiple states, you know, they may have different, um, needs in turn of their marketing strategies, the reach and the software that they invest in. However, they, you know, the things that they have in common are the basics, right? You mentioned showing up on Google maps, like if your business is not optimized for that, you’re not part of the conversation. A homeowner is not going to find you and, and pick your business.

John Jantsch (05:07): Yeah. The, so, so let’s jump right to what makes Google maps happen. The Google business profile for a lot of businesses is I, I mean, we work with businesses. It’s probably the most important aspect. I mean, it’s scary because it’s owned by somebody else, but it’s, it is, it’s probably the most important aspect having optimized, having the right signals there, having lots of good reviews, but obviously showing up. I mean, that, that, that, you know, for a lot of local marketers is maybe job one. I mean, so what advice, I, I know you work with business owners, helping them optimize that, uh, tool. So what, you know, what advice I, I’m sure people come to you all the time, say, I wanna show up in that thing of, of course you do. What do we have to do to show up in that thing?

Laura Nelson (05:49): You’re absolutely right. John, the Google business profile also formerly known as Google. My business is probably the most important thing you can do to establish your business’s presence online. And everyone wants to be in what we call that local repack, right? When someone searches for plumbers in your area or roofers cetera, you wanna be one of those businesses that’s in the top three that are most obvious to those homeowners looking to solve a problem. The real challenge as you alluded to is that, you know, that is somewhat out of our control. Right? Right. There are basics that we can do to invest in improving that profile. Like first claim it first. And for most, if a business hasn’t claimed their presence on Google, you know, they’re missing out on this free opportunity to be found and chosen. So that’s number one. But beyond that, there are optimizations to do right.

Laura Nelson (06:51): Link it to your website, link it to your scheduler, add photos of your team and the work that you do, make sure your phone number’s right. Yeah. I just went over to, uh, a granite countertop business over my lunch break a few minutes ago. And you know, I told him, Hey, I’ve tried to call you for two days and your number’s not ringing through. Right. So we’ll get into what happens next in terms of a homeowner making that next step. But getting all that critical information is, you know, absolutely essential to showing up online. And of course, I, I don’t want to leave out customer reviews. Right. We don’t know the perfect Google formula to, you know, what enables a business to rank in that three pack. But we do reviews are an important part of that. So having a lot of reviews, ensuring you’ve got a consistent, um, stream of them over time is really important.

John Jantsch (07:50): Yeah. And, and, and actually I think they are giving some pretty good clues these days, because if you do a local search, a lot of times what they surface will say, well, these words were in some of the reviews. I mean, and they’ll actually show you some of those reviews. So we obviously know that they are, that they are using those really almost like keywords in the past for optimization. One of the things that, of course over the last 10 years, let’s say has dramatically changed for local business is, is just the way people buy. You know, everybody wants to talk about how all the changes in these platforms and new, you know, new networks and things that show up, but it’s really the consumer behavior, you know, has really changed dramatically. And I would say that even comes to referrals. So referrals are for local businesses, word of mouth for local businesses, still a huge, uh, way that they generate business. But you used to be, if I went across the fence and asked my neighbor and they said, oh, you should call this for remodelling contractor. I just picked up the phone. I called, you know, today I go and I do a full review of them, you know, to, before I ever call. So how has that, how has that, what I just described kind of changed the game for local vis.

Laura Nelson (08:58): Yeah, it definitely has. And we perfectly described how homeowners have shifted their behavior. Right? We’ll still have those conversations with friends and neighbors and trust what they say, but then we’re gonna go online to what we learned. Right. So if my neighbor tells me, Hey, work with this contractor, he did a great job. I still need to go on Google to figure out how to get in touch with him. Right. Right. If I see something lower than a four and a half or four stars, I’m gonna start to question right. That recommendation, right? These are people who are coming into homes and, you know, doing an important job. And you know, if the quality of the reviews isn’t aligned with that recommendation, I’m gonna start doing my homework. I’m gonna start looking at other providers in my area. Yeah. That’s one way, I think also, you know, first and foremost, people are starting that search on Google, right.

Laura Nelson (10:00): That’s where the majority of people are starting, but there’s this other class of referral that I don’t want local business owners to miss out on. And, and that’s the conversations that are happening in Facebook groups. Sure. On nextdoor, you know, especially when it’s a tougher project. And for instance, I can refer back to the contracting project I’m working on right now. It’s a smaller job. It’s not a mansion, but I do have a renovation planned. And you know, I had a hard time connecting with the contractor through traditional means, right? Like filling out contact forms and calling people. Yeah. So I went on next door and posted, I went in faced groups to post and asked people, you know, who do you recommend? And I got a lot of responses that way. Yeah. So it’s another important thing to keep an eye on.

John Jantsch (10:52): And now let’s hear from our sponsor. Look, if you’re tired of slowing down your teams with clunky software processes and marketing that is difficult to scale, HubSpot is here to help you and your business grow better with collaboration tools and built in SEO optimizations. A HubSpot CRM platform is tailor made to help you scale your marketing with ease, integrated calendars, tasks, and commenting, help hybrid teams stay connected while automated SEO recommendations, intuitively optimize your webpage content for increased organic traffic ditch, the difficult and dial up your marketing with tools that are easy to use and easy to scale learn how your business can grow better@ hubspot.com SOS.

John Jantsch (11:38): So many of the home services industries right now are swamped in, I mean, getting somebody to even call you back right now, it’s gotten, uh, much more difficult than you would think it should be is hasn’t it?

John Jantsch (11:48): So, so let’s jump back to, uh, reviews. You mentioned that 4.5, uh, I’ve actually seen some interesting research on that, that, that says 4.6, 4.7 is actually the perfect score. And that’s because I think as consumers, we see 105 star reviews and we kind of go, uh nobody’s perfect. And so I think that’s interesting. You actually wanna few three star reviews that you can respond to in a public way. I think, because it, it, it feels more believable, but I know I work with a lot of businesses that have customers that love them, but they still can’t get reviews. So how do we get those reviews from customers that seem to be happy?

Laura Nelson (12:33): You’re absolutely right about, you know, these mid four star reviews are great. Yeah. Right. Real business is perfect and they’ll make mistakes and you’ll see the occasional irate customer that adds to the authenticity of the reviews that are there. Right. So it’s so painful and so personal. Right. Especially when a business gets a, a one star review it, the recommendation here is to bury it with positive reviews. Sure. So you asked how, right. It all comes down to putting a process in place and getting your team behind it and ensuring that you have the right tools. Yeah. So for example, I see team all the time who, you know, wrap up a job, they have a happy homeowner right there and, you know, fail to take the extra step and say like, you know, Hey, are you happy? And, and if so, would you mind writing a review for our business?

Laura Nelson (13:26): You know, these matter to us, they help us find more homeowners just like you. And you know, it’d be mean the world to us, if you did, that’s one, you know, making that ask personal, when you wrap up every job and number two is actually following up, right. Gotta make it easy for the homeowner. If they can’t find your Google listing, if they can’t find your Yelp listing, even if they have the best intentions they’re gonna move on with their day. Right. They’re gonna go somewhere else. Like they wanted to do it, but it wasn’t easy. And, and that’s where tools like signposts can really make a difference. Right? You shoot, ’em a text message. You shoot, ’em an email goes right to your listing link and takes several steps out of the process and ensures that it gets done.

John Jantsch (14:13): Yeah. And I, it, it’s funny that, uh, you know, QR codes are certainly high having a day again. Right. Um, because we all got used to ordering our hamburgers with them and

Laura Nelson (14:23): Yeah.

John Jantsch (14:23): So I’m seeing more and more people put those on business cards and things, you know, for reviews because it is actually, everybody knows how to do it now, you know, you you’re seeing them in ads on television and things. I mean, it, it’s kind of funny cuz they were hot 10 years ago and then it just kind of went away. But they really so, so to your point of making it easy, certainly a way to do it.

Laura Nelson (14:44): Yeah. QR codes are a great tool and, and you used to need a separate app to read them, but now we can read them through the cameras on our phones and you know, that’s a great DIY way to leave behind a card with a customer, no matter what business you’re in. Like they know how to use them. Now.

John Jantsch (15:05): It’s kinda like when it’s kinda like when podcasts first came out, it was very hard to listen to ’em and when apple put the app right on the iPhone, all of a sudden podcast took off as well.

Laura Nelson (15:15): Oh yeah.

John Jantsch (15:16): So what about all the, one of the things I know frustrates some business owners, but I think it’s, it’s like back in the day when it’s like you, you have to take credit cards and checks and cash, you know, now you have to be online and chat. You have to use SMS, have to have appointment scheduling because people are going to, people want to interact with you the way they want to interact with you. How do you manage all of those various channels?

Laura Nelson (15:41): Yeah. It’s incredibly difficult. And this is where technology and other services can make it super easy. I referenced that granite countertop store, my first breast for reference was not to call them, but they forced me into it.

John Jantsch (15:56): Right,

Laura Nelson (15:57): Right. So I will not always do that because I would like a path of lease resistance. Yeah. And that’s what homeowners and customers are really gravitating toward, but I send way more texts a day than make phone calls. And I think that’s common across the population. So if I can get a quick answer, you know, through text message or through chat, I’m gonna do that. I’m gonna take out the friction of a phone call, but that’s like, that’s very difficult for businesses to manage if they’re using like their traditional tools. Yeah. Like, you know, the owner’s cell phone and you know, a team member, cell phones and you know, a chat widget,

John Jantsch (16:37): Someone’s gonna be there’s yeah. Graded.

Laura Nelson (16:39): Yeah. If it’s not integrated. Yes. It becomes overwhelming. Right. Right. And you have to hire someone to manage all of that. That’s what signpost helps to make easy is to bring all of those messages into one place. So you don’t and have 50 tabs open of leads coming from different sources that can come into one dashboard. Yeah. Right. And you’ve got all your messages there where you can fire off quick replies or automated replies too. Yep. Is really important. You know, if you miss a customer’s call, for example, know, our system can send a text and ensure that customer was heard. Right. We got your message. We’ll get back to you. And that enables you to start a text conversation, right. With them.

John Jantsch (17:23): You can say, while you’re waiting, here’s the 27 projects we did last week, right? Yeah, exactly.

Laura Nelson (17:27): You can customize that reply. You can send your scheduling link, you can get them kind of moving down the funnel of making a decision of whether they’re going to hire you.

John Jantsch (17:37): Yeah. Yeah. It’s a very differentiator too. Cuz a lot of people may maybe called three people, you know, Sunday night, you know, waiting for them to all come call ’em back Monday morning. And uh, yeah. All of a sudden you’ve advanced the ball a little bit by having

Laura Nelson (17:50): And people are gonna hire the person who responds first simple

John Jantsch (17:55): Cases. That’s right. Especially the environment where we’re in now, its anybody responds. They’re probably gonna get hired. What are some industries where you think or ahead of the curve in this and, and then I guess maybe, well you don’t have to name some that aren’t doing it well other than to say, if you’re not doing it well, you can learn from these people.

Laura Nelson (18:15): Yeah. I think, you know, in the realm that we’re talking about, say online reviews and communications technologies. In my experience, I’ve seen dental and medical offices a little ahead of the curve there. That’s not to, to say all of them are because you know, the issue now that we’re seeing is that the software is pretty educated, so it doesn’t solve all of their needs, but there was a time when dental adoption of these products was quite sure

John Jantsch (18:43): The it’s probably true of anybody who lived by appointment, you know, scheduled all day long. You know, that, that, that those were probably some of the first adopters weren’t they?

Laura Nelson (18:54): Yeah. Because like they, you know, they want to fill every slot in their day and they know if, you know, if someone cancels, didn’t get a reminder as just an example and they’re losing revenue yeah. For that spot. And it’s very difficult for them to fill unless they’ve got a long waiting list and you know, people are available fill slots.

John Jantsch (19:11): Can I just complain about the people that send me an email, call me and send me a text as well. They really need to, it’s like when we first got into the AI bots, you know, it’s like, they’ve gotta be done well or they’re really not very helpful.

Laura Nelson (19:25): I totally agree. I think that, you know, businesses, you’ve gotta choose one and my recommendation is communicate in the way back that the person came in. Right? Yeah. With the exception, if you missed their call, you ha you give them that option of texting back. That’s just, you know, a common courtesy. Right. But yeah, aside from that, you know, people don’t need to be bombarded. Correct. That’s not a great experience and you know, that may turn them off. So it’s really risky.

John Jantsch (19:55): Yeah.

Laura Nelson (19:56): To add on the question that you asked previously, signpost really concentrates on contractors though, we serve dozens and dozens of industries. We focus on contractors because we saw real need, you know, there are companies across the spectrum when it comes to tech adoption and, and marketing savviness. So we saw that, you know, there was a need, we had the best product market bit. And so that’s why primarily we focus in that area.

John Jantsch (20:25): Yep. So we’ve mentioned the name signpost, it’s just signpost.com. Do you, do you wanna invite anybody for the 50% off, uh, special because they’re a duct tape listener.

Laura Nelson (20:36): Yes, absolutely. Um, visit, sign post. I can’t guarantee that you’ll get a 50% off rate, but you know, certainly if you are a listener, you are eligible for a promo rate. So visit signpost.com, visit the upper right corner and request a demo, check our product out, see if it’s a good fit for your company.

John Jantsch (20:59): Laura saying, thanks so much for stopping by the duct tape marketing podcast. And hopefully we’ll, uh, get to run into you one of these days out there on the road.

Laura Nelson (21:06): Thank you so much us John. Really appreciate it.

John Jantsch (21:09): All right. So that wraps up another episode. I wanna thank you so much for tuning in and you know, we love those reviews and comments. And just generally tell me what you think also did you know that you could offer the duct tape marketing system, our system to your clients and build a complete marketing consulting coaching business, or maybe level up an agency with some additional services. That’s right. Check out the duct tape marketing consultant network. You can find it at ducttapemarketing.com and just scroll down a little and find that offer our system to your client’s tab.

John Jantsch (00:01): This episode of the duct tape marketing podcast is brought to you by the salesman podcast, hosted by Will Barron and brought to you by the HubSpot podcast network. Look, if you work in sales, wanna learn how to sell, and frankly who doesn’t check out the sales podcast, where host will Barron helps sales professionals learn how to buyers and win big business ineffective and ethical ways. And if you wanna start someplace, I recommend the four step process to influencing buying decisions. Listen to the salesman podcast, wherever you get your podcast.

John Jantsch (00:44): Hello, and welcome to another episode of the duct tape marketing podcast. This is John Jantsch and my guest today is Bob Glazer. He’s the founder and chairman of the board of global partner marketing agency, acceleration partners. He’s also the co-founder and chairman of brand cycle. He’s been a guest on this show for previous books, but today we’re gonna talk about as newest book moving to outcomes. Why partnerships are the future of marketing? So Bob, welcome back,

Bob Glazer (01:12): John. Thanks for having me.

John Jantsch (01:13): So you’ve written a book called performance partnerships, as I recall. So let’s define, well, let’s do two things. Let’s define partnerships in your view because there’s a lot of definitions. And then also, you know, what are you offering new in the area of partnerships in this book?

Bob Glazer (01:29): Well, I just retitled it figured it’d been a while and, and, and released it. So yeah, I, there there’s some confusion around these terms, partner, marketing partnership, marketing affiliate market, and you have influencer and B2B. I, I think there is this convert urgents where affiliate marketing was a model that used technology to, to work with partners at scale. I think it became known as like a certain type of partner set who were like professional affiliates. And then as the technology kind of became available more to, you know, to own than, than, than to rent people started to look around their organization and say, oh, there are other things they weren’t using their affiliate network for business development partnerships and closely held partnerships because it, it just the economic model of paying, you know, couple percent of revenue or 20 or 30% of sale, or sort of sending people off to a third party site didn’t feel right for that. So there was always the affiliate program and then all this other and business development, I think now it’s all coming under one roof under one platform. So I just consider affiliate marketing, part of this greater ecosystem of partnership marketing now, which includes influencer and B2B and aspects of business development. What makes it scalable and more of a marketing channel is that it’s managed using software.

John Jantsch (02:44): The partnership, of course, for a lot of people at least implies some sort of affinity. I mean, we are truly in business together, whereas yeah, I think a lot of affiliate thing was like, I don’t care. You say you’ll pay me 10 bucks. Sure. I’ll promote. Yeah.

Bob Glazer (02:55): I agree with you. I don’t like the word for that reason. In fact, you know, we have an event every year for outside of global pandemics for like the top 20 programs in the world, the people that are running them sort of like a mastermind. And that was one of the things like when they say, look, I need this for an affiliate versus I need these things for a partner affiliate just implies a loose connotation. And that’s probably how things were 20 years ago. It was like, don’t ask, don’t tell, right? Yeah. You get me the sale. I have no right to ask you how you got it. That was before companies with brand departments got involved with eCommerce.

John Jantsch (03:30): So is there, would we create that distinction as two levels of partnership? I mean, so like, could you, could you make a case for people saying, well, yeah, we it’s okay to have that low level top of the funnel maybe kind of affiliate thing, but then for a deeper relationship on a, maybe a higher ticket sale, we need something different.

Bob Glazer (03:48): Yeah. I mean, I, I think it’s generally good to know like what it is that people are doing to your brand and how sure they’re doing it. You know, McDonald’s has a franchisee, like, it’s not like, Hey, well just open that store wherever you want it and serve of whatever you want. Right. It’s very control. And I, I consider this sort of a, a franchise thing, but I think you can have different types of partners that have different levels of engagement otherwise. But again, if you put them all on the same software platform and you start doing that with people, that stuff that was going through business development, or otherwise you start to have a lot more data around what’s, what’s converting, what’s doing well, partners find out how they’re doing in, in, in real time too. And all the, all you don’t need blockchain for this, but you know, a lot of the pro all the contracting and payment and everything is all handled sort of in real time too.

John Jantsch (04:36): So in some ways the idea of moving to outcomes, which is of course the, the primary title of the book is that sort of juxtaposed to say, advertising or sponsorships, that you hope you get outcomes, that this model is performance.

Bob Glazer (04:50): It’s two things, right? So the biggest thing that’s changed since performance partnerships came out for years ago is, you know, continued to see direct to consumer companies shift from and to performance budget. So, so what I don’t understand, and, you know, we’ve got our little clever graph here of, you know, jumping over all the hurdles. Yeah. But is if we’re measuring all this stuff and we’re tracking it and all this stuff, why are we still paying for inputs? Why are we paying for impressions? Why are we paying for clicks? Like, why are we paying for, you know, other things that are not the old outcome that we want when we have the ability to do that. And I think as budgets continue to move, you know, as Gillette goes from, you know, spending money on billboards to getting people to its subscription razor club, uh, I, I think they start to be, there’s a lot more budget available for channels that prove the right outcomes than just the inputs

John Jantsch (05:42): Is, is as opposed to just another channel. Would you say this is potentially a complete point of view shift for a lot of marketers?

Bob Glazer (05:50): Yeah. Like it’s a methodology more than a channel, right. So when I’m buying from Facebook, Amazon, Google, which is like 60 to 70% of the market that people do today, I am buying single source of traffic, right? Yeah. That, that stops work. They are the partner and the supplier are all in one. If I can build a partner program using software with a thousand different partners, with a thousand different tactics, I, I have inherently a, a diversified portfolio. It’s also not something. I mean, you know, we talk about the, the Tripoly where that, like, it’s the world’s biggest auction. We talk about that in the book. It is a real time auction and auctions benefit sellers. If you read all kinds of auction theory and data, and someone did a study, we talk about in the book that the stuff on the auction side of eBay, the same product, we’re going for 70% more than on the fixed price side. So you know that you can’t come into a partner program and just outspend someone in a day. I mean, eventually you can, but it it’s kind of like SEO versus PPC, right? One pour the money into gratification, the other, you do the work and you build a moat and you kind of collect results.

John Jantsch (06:59): So I think there are a lot of businesses out there that instantly say, yeah, this is for me, this makes sense for my business model, but I, I’m sort of guessing that you’re saying, no, everybody needs to do this. This will work for any kind of business. I mean, so is this expanded, do you have a limited range of who this expanded version works for? Or do you think that this just every business now?

Bob Glazer (07:19): I, I, I think it’s, every business needs to add the sort of activity to their portfolio. I, I think about it like stocks, right? And you know, if, if, if you own Tesla, apple, any of these things over the last decade, you made a lot of money. Chances are, you won’t make as much money open in those stocks over the next decade as finding the next blockchain company or crypto or someone who’s gonna, you know, 10 X, I, I think the large digital marketing channels are now bonds. Like they’re gonna produce a very low, predictable, not a great return, may not even, you know, beat inflation. And, and, and you’re gonna have to find something else that, that, that is your sort of growth engine in stock. So you look, this is much easier for some businesses, but I think all businesses should be thinking more about how they can use technology to, to scale partnerships. Now they can be, there are tons of hundreds of thousands of different ones that they can do, but you know, the amount of CEOs I’ve talked to who in the last five years built their business on a Tripoly or on social media or whatever, and say they could not possibly do that today. That the economics just aren’t the same as they were five years ago.

John Jantsch (08:26): Uh, that’s true. I mean, you think of a lot of marketers, there are a lot of, uh, influencers, you know, that jumped on Twitter early. You know that, I mean, jumping on Twitter or starting a blog today is not what it was 15 years ago. And no,

Bob Glazer (08:38): Everyone I know is I everyone’s podcast. Maybe, you know, except for yours are all on hiatus. Now, everyone jumped in late thought it was gonna be super easy and, you know, they reach out or they schedule something and they’re on break or on hiatus, you know, look first, first mover advantage. But, but this is like a, the thing about affiliate or partnership has always been cool is that there’s always new publishers every year. Like there that’s the new within the, even if you have a program, but you have the same publishers for 20 years, you’re missing out on, who’s doing cool, new, innovative stuff with who has influence that you, you know, wanna partner with em.

John Jantsch (09:11): So you led right to my next question, which was gonna be, how do I find partners? Or before you answer that, is that the first step

Bob Glazer (09:19): There, there are probably a few first steps. I mean, if you’re gonna build a new program, you wanna pick the platform, you wanna figure out how you’re gonna staff it, which we talk about in the book, which is, is a challenge. But look, recruiting’s a life, but of any program, the way a lot of people have operated their program is inbound only, right? A if you had a sales team that just sat around, waited to see who called them, like that’s not gonna be a high performing sales team. So, you know, to have a robust program, you need people who are, are recruiting and know where to look and are constantly calling and finding new partners. You know, the programs that we see, they high performing are reaching out to hundreds of people a month, you know, and they it’s like a sales funnel. They might get 10 that are really interested and then five that convert and become, and then, then they move on to the next thing.

Bob Glazer (10:01): So yeah, the there’s, you know, the tech, the, how you staff the team, you know, whether you’re gonna spend a fit of your, these programs have been largely overlooked too. The other thing is, I, I mean the amount of times that we get introduced to someone who’s managing the channel, who’s never, or been in the channel before, to me is fascinating. Like you don’t usually get introduced to, Hey, here’s John, our new paid search manager. And just so you know, he, he has not done paid search anymore, but he’s excited to figure it out. Like that happens in this channel every day. Cause there isn’t a barometer of talent. There isn’t a Google certification. There isn’t a lot of that stuff. There’s a lot more demand than supply right now.

John Jantsch (10:42): So you mentioned a word spend. I mean, so that, I mean, that’s obviously a piece of, this is if you’re gonna look at this as a channel and a platform, and obviously there might be some tech, I mean, it’s a budget item, isn’t it? It’s not just, we pay for performance.

Bob Glazer (10:56): Yeah, it, it is. And one of the tricks is that, I mean, we try to argue that it should be a budget list item. And I say that a little tongue in cheek, but it, you know, the way most teams work is they set up budget for the quarter. If one channel’s under over it, borrows, begs and steals from the other channel to try to get the number. And then they revisit the next quarter. You know, this is again, sales. Like you, you have a budget for commissions, but if your sales team doubles the performance, you don’t say we’re out of the budget for commissions. Like that’s crazy. You say like great for every dollar we’re selling, it’s costing us five. So, you know, there needs to be a new discussion with the finance team around looking at quality, you know, making sure there’s not fraud, but saying, look, as long as we are getting what we want.

Bob Glazer (11:37): And we just decided that we’re willing to pay 7 cents on the dollar or, you know, we should spend 7 cents on the dollar or 7 million on a hundred million. It, it really shouldn’t matter. So it has been hard for a lot of teams to, uh, I just seen some really poor decisions, particularly around Q3 or Q4 where people shut down their program. Cause they ran out of budget. Yeah. And that’s like firing your sales team because you’re outta commission and saying, Hey, well you guys can’t make any money into this quarter, but just stay around and you’ll make money with us next quarter. Like there would never fly. Right.

John Jantsch (12:11): Right, right. Right. And now let’s hear from our sponsor. Look, if you’re tired of slowing down your teams with clunky software processes and marketing that is difficult to scale, HubSpot is here to help you and your business grow better with collaboration tools and built in SEO optimizations. A HubSpot CRM platform is tailor made to help you scale your marketing with ease, integrated calendars, tasks, and commenting, help hybrid teams stay connected while automated SEO recommendations, intuitively optimize your webpage content for increased organic traffic ditch the difficult and dial up your marketing with tools that are easy to use and easy to scale learn how your business can grow better @ hubspot.com. So, so let’s go back to that and maybe it’s best done through an example, but we never really fully touched on it. How do you find good partners do, is there an example, um, case that you’d like to maybe run through with us that you’ve worked with or that that was in the book that can kinda says, Hey, here’s what they did. Here’s how it worked. Here’s how they went about it.

Bob Glazer (13:18): Yeah. There was a, a case in the book around, again, thinking outside about working with Valpak on a performance basis to get to small businesses and, you know, using them and having them use their reach and paying them on a conversion basis for getting people to sign for a food delivery program. So again, looks more like a traditional business development deal, but executed across using the tools and technology and sort of, you know, outreach of a partner marketing campaign.

John Jantsch (13:49): Was that a new initiative or a new innovation from Valpak or is that actually a, an off to shelf product? Did they? Yeah,

Bob Glazer (13:56): No, I, I, you know, I, that, I don’t know, it was our team reaching out and saying, Hey, how could we work together with, uh, this food delivery service? You know, you have reached into these things. We have budget to spend on this. I, I, I think, yeah, one, you know, on the flip side of the coin, there are a lot of people out there, you know, who even are retailers looking to be publishers saying, Hey, how else can I make money? Look, you just bought, you know, something from my baby store. And then I show you four baby subscription services afterwards for which I get, you know, 30% of the first year revenue, if you sign up for them. What’s interesting is cuz obviously a lot of folks, we deal on the marketing. They’re not normally the task with generating revenue, but we’re like, Hey, if you put this in and you make money, you could take that money and then increase your budget for your own acquisition. And then they’re a lot more interesting.

John Jantsch (14:46): So let’s talk about mistakes that people make. I I’ll share one that drives me crazy is, you know, you go and you make a, I FTD, I, I ordered some flowers off the FTD site recently and before I could actually get off of the site, you know, they offered me eight other things that were unrelated to my purchase. And it just felt like they were craming crap down my throat.

Bob Glazer (15:08): Yeah. That

John Jantsch (15:11): Is that an example of how not to do it.

Bob Glazer (15:13): Yeah. I mean, you want it to be relevant. You want it to be helpful, be much better if you were buying a ticket to Seattle and the post purchase it, preloaded concerts in Seattle restaurant reservations in Seattle hotels in Seattle where you’re like, oh, this is all the stuff I wanted to do anyway. They’ve helped me with that. So yeah, to me, that’s just more of, you know, the USF good. That’s like the interruption marketing stuff and just like how many swings can we take at it? And they’re probably paid for impression. I mean that stuff doesn’t no one likes that stuff. Yeah. Let’s be honest.

John Jantsch (15:44): Yeah. So, so how, how would somebody’s listening to this? They’re thinking I’m gonna go pick up a Bob’s book. I mean, how would they get started? I know it’s impossible to answer cuz every business is different, but essentially how would somebody go about, you know, initiating something like this?

Bob Glazer (16:00): Not, not to be self promotional, but look, the reason why a lot of agencies like acceleration partners exist is cuz people want to do this, but they don’t know how to do it. Generally, if you have no idea how to do something, I find it’s better to talk to someone and add it before. So whether you’re recruiting someone to help launch a program in house, I, the thing to do of saying, we wanna do this, let’s pull someone off our display team. Who’ve never done this before. We’re not amended here. So let’s figure it out ourselves. Like, I don’t know that’s you never wanna make mistakes on your own. So I mean, there’s a big industry of agencies. That’s special. I, as in this, they work with all the platforms. It’s not necessarily outsourcing. They might work with the in-house team, but handle a lot of the externally facing aspects of the program, including how to use that software recruiting to people like getting them their there’s almost a customer service function. If you have a program with a thousand partners in it and it’s cyber week. Yeah. They need stuff and have requests on Saturday and Sunday and weekend. Most companies aren’t staffed to really support that. So I, I, I look, there’s some great in-house teams or people do stuff in house. Generally, if you have no experience in something, I think it’s good to find someone who does.

John Jantsch (17:08): Yeah. I, I guess in some ways, would you say that not apples to apples, but in some ways this is like a sales force. How are you gonna support this sales force? Right?

Bob Glazer (17:18): Yeah. We’re like systems integrators too. We’re experts in these platforms. People on our team know how to use these platforms. If you’ve never used them before again, you can learn how to use it. But from the company’s standpoint, your digital marketing jobs, they high turnover, 18 months is a career these days. So you get some one who knows the software, learns it, trained up, builds relationships. They leave in 18 months. Then you’re kind of like starting over from zero again.

John Jantsch (17:43): What are some of the platforms that, that people would probably encounter?

Bob Glazer (17:48): Yeah. So like on the network side, you’d have the Eun CJ Rockton, a more traditional, a smaller side share sale in the SaaS play. That’s growing, you’ve got impact partner eyes, uh, partner stack. And there’s a whole host of ones in the B2B space. So there’s been kind of explosion in the software that allows you to track, measure and pay in the partnership arena with some, you know, better in some verticals or countries or regions or stuff than others. But you know, one of the main thing, you know, paying out people in a hundred countries or something is not trivial. So the large global companies that have figured out how to do that. Yeah. You can just have your program globally and people can join from wherever in the world and your account team and finance team does not have to deal with that.

John Jantsch (18:31): Have you seen examples of service companies that may not, I mean, use you, for example, how would a company like yours acceleration partners create a partner?

Bob Glazer (18:40): Yeah. You know, we just did cuz the cobblers had no shoes. So we went to look like for an example, we went to like a lot of people that we know like other agencies, right. Publishers who see a lot of programs and they struggle and we’re like, look, if you’re trying to work with a program and the management sucks or they don’t have any management, like, Hey, you can use this link, send it to us, we’ll track it. And you know, we’d love to pay you for that. So yeah, it could be used really in any context. And the technology now can track through Salesforce in addition to tracking through a cart, that’s where some of the more B2B stuff comes, you know, it’d always usually be add to be through a cart. Cause I had to know you bought something. Right. But now I can send that into your Salesforce instance, attracts it when someone on your team closes in Salesforce that says, Hey, that was Bob’s, you know, lead, you know, we owe

John Jantsch (19:25): Him something. Yeah. So it’s a, a pipeline deal at that point almost so. Yeah. But I think the point of that really is I do think a lot of people, when they think of affiliate, they think of, you know, build a landing page, have an affiliate sign up, you know, kind of thing. Yeah. But I think in this it’s all old.

Bob Glazer (19:40): Yeah. Overall when, when all the, the, when the affiliates were just professional marketers yeah. Versus they were like people who have access to the audience that you want. Right. Right. So imagine like a, just an it shop and people are always asking about, they kind of the reseller stuff they’re always asking about, you know, Google apps or this, or otherwise they just say, Hey, here’s how you sign up. You send it here, you use our code, it’s all tracked. And, and then, you know, instead of being like a traditional kind of reseller partner, it’s just, it, the whole thing is more automated.

John Jantsch (20:10): But I love that idea of the, of going into your CRM though, because it, then it becomes more of a true sort of curated network, you know, as opposed to just, Hey, you know, all comers. And I think that there are a lot of companies out there that haven’t considered it because that’s their view. I think of partnership marketing.

Bob Glazer (20:28): Yeah. Again, marketers standing up landing pages verified to told you, you know, that Craigslist was a massive publisher and you know, yeah. Years ago, like when we were working with a ride share service, you know, we did a deal with job boards where they’d say, Hey, one set of a job. Do you wanna ride for Uber? And they’d make a fair amount of money when a driver signed up. Right. I think that’s a very different, yeah. And that’s where partnership marketing is very different than what people remember as their sort of father’s affiliate marketing.

John Jantsch (20:56): Yeah. Yeah. ClickBank comes to mind, for example. Yes. Um, as one of the early players in that,

Bob Glazer (21:02): A lot of this ACI E Barry and all this stuff, look it, if you’re talking about stuff, that’s five to 10% margin, you know, then that’s pretty normal. The stuff where people were paying 50% affiliate commissions would imply that like it’s a junkie product. That’s being Mar like it’s a cream that’s being sold, you know, a $5 cream being sold for $50 a month. So they had that much margin to play with, like when someone’s paying you a 6% commission that would imply like normal margins, you know, in, in whatever that product or services.

John Jantsch (21:32): Yeah. Yeah. Good, good point, Bob, uh, tell people where they can find out more about your partnership work as well as pick up a copy of moving outcomes.

Bob Glazer (21:41): Sure. You can find out more about acceleration partners in our work. We’ve got a lot of also free resources, 1 0 1 guys, if, and just learn more how to acceleration partners.com moving outcomes is available. Everywhere books are sold and you can learn more at Robertglazer.com/outcomes.

John Jantsch (21:56): Awesome. Well, thanks again for taking time to stop by the duct tape marketing podcast. And hopefully we’ll see you one of these days soon out there on the road.

Bob Glazer (22:03): Thanks Jo hn. I

John Jantsch (22:04): Did you know that you could offer the duct tape marketing system, our system to your clients, and build a complete marketing consulting coaching business, or maybe level up an agency with some additional services? That’s right. Check out the duct tape marketing consultant network. You can find it at ducttapemarketing.com and just scroll down a little and find that offer our system to your clients tab.

John Jantsch (00:00): This episode of the duct tape marketing podcast is brought to you by the salesman podcast, hosted by will Barron and brought to you by the HubSpot podcast network. Look, if you work in sales, wanna learn how to sell, and frankly who doesn’t check out the sales podcast, where host Will Barron helps sales professionals learn how to find buyers and win big business ineffective and ethical ways. And if you wanna start someplace, I recommend the four step process to influencing buying decisions. Listen to the salesman podcast, wherever you get your podcast.

John Jantsch (00:42): Hello, and welcome to another episode of the duct tape marketing podcast. This is John Jantsch and my guest today is Marcel Petitpas. He is the CEO and co-founder of Parakeeto a company dedicated to helping agencies measure and improve their profitability by streaming their operations and reporting systems. He’s also a fr action COO at gold front and a speaker podcast, host and consultant specializing in agency profitability optimization. So Marcel, welcome to the show.

Marcel Petitpas (01:11): Thanks for having me, John. It’s a pleasure to be here.

John Jantsch (01:14): Do, did you like how I nailed that French?

Marcel Petitpas (01:17): I, you know, you didn’t even ask me how to pronounce my last name, which is the mistake most hosts make. And then I see their eyes just filled with fear as they realize, oh my God, I have to try and pronounce this thing. That’s on the bio introduction, but you nailed it. I’m impressed.

John Jantsch (01:30): Well as somebody whose last name, uh, ends with five consonants, you know, I’m very, very aware of people’s last names. Actually, my mother’s maiden name was da Sonia and my, uh, wife’s maiden name is Duval. So I’m also maybe a little French too, that might have helped.

Marcel Petitpas (01:46): I like it. No, you did a great job.

John Jantsch (01:48): All right. So a lot of agencies track revenue, some actually even track profit, but you, if we’re gonna optimize, um, profitability, what, what should we be measuring?

Marcel Petitpas (02:00): That’s a great question, John. The first thing that I, I think the first opportunity that almost every agency owner has is just making a couple of tweaks to the way that their accountant or bookkeeping team looks at their financial statements so that they can understand two important things that they’re probably not seeing right now, or might not be obvious to them, where to look to see it. The first is understanding their agency gross income. So this is the understanding that you have the total amount of money that comes into your business, but you’re not responsible for the efficiency or the profitability of all of that revenue. There’s a certain amount of that for a lot of especially digital agencies that is passing through you onto other vendors. Simple examples of this would be things like advertising spend print budgets. Sometimes you might be using white label or outsource partners.

Marcel Petitpas (02:42): And so the way I would frame this question is it, if you’re trying to determine what is pass through revenue and what is your revenue it’s like, are we responsible for the margin on this revenue? If the answer’s no it’s probably pass through. And so the important thing that I think a lot more agencies should be paying attention to, especially if that’s a factor for them is when we strip out all that past through revenue what’s left over because that’s a really important figure. That’s the actual size of your business. That’s what you should be benchmarking your profitability against. And it’s what you should be using to benchmark other spending decisions in terms of, you know, how much we spend our office and our team and sales and marketing, all this other things. So isolating, AGI or gross income on your financial statements is kind of the first key thing that I think a lot of folks should do.

John Jantsch (03:24): And, and I’m guessing from your experience, that can be all over the map, right? I mean, wildly varying from agency to agency, right? Even, even if one says I’m a $10 million agency, there’s a lot of 10 millions, right?

Marcel Petitpas (03:37): And that’s, I think one of the powerful things us about our approach, this is how we level the playing field and actually benchmark agencies across each other. And when we put everyone on this level, AGI playing field, it’s amazing how consistent the patterns and benchmarks and percentages of spending across different areas become. But until we do that, it’s really hard to compare one agency to another. And so, yeah, I think that’s a really important thing.

John Jantsch (03:59): I work with a lot of agencies as well. And one of the things we try to get ’em to do is obviously have some key performance indicators and because we can get so much data today, sometimes they have, you know, 273 of them. So, which I find is not very useful. So, so how do we get strike the right balance between, you know, too much information, really the right things to track?

Marcel Petitpas (04:22): Yeah, it, it’s a really tough question because so much of this comes down to the nuance of the business model, but the way that I encourage people to think about this is number one, focus on four key areas of the business. So there’s your core financials that of course includes AGI, which we’ve just talked about. It also includes what I call delivery margin, which your accountant we’ll call gross margin, or maybe contribution margin. We don’t use accounting terms cuz accountants get mad at us, um, for, you know, not doing everything G but for

John Jantsch (04:49): Izing their profession,

Marcel Petitpas (04:51): That’s it right? They cause. And this is the funny thing about general accounting practice is our way of looking at a service business. And it’s ironic because accountants run service businesses, it kind of flies in the face of general accounting practice. And it’s important to understand that like general accounting practice is meant to satisfy a certain compliance around taxes, reporting to investors and shareholders and things of that nature. It’s not necessarily designed to give you insight as a business owner. And so you kind of have to understand that there’s a separation there. So when we strip out pass through, and then we measure the margin on that pass through, it’s almost like we have two layers of cost of good sold, which is a concept that a lot of accountants kind of struggle with. So the second thing that we wanna do in core financials is understand what is our margin on AGI?

Marcel Petitpas (05:35): So for every dollar of AGI that I earn, how much did I have to spend to earn that? And that’s mostly gonna be the labor cost of the work that we do for clients. So all the salaries and payroll that’s allocated to the delivery function in your business, and then what we like to call, share delivery expenses, which would be some of the software or tools that you’re paying for that aren’t necessarily for one specific client, but you need to do the work. So your Figma, your stock footage, library, you know, your tools for managing ads and things of that nature. And generally you want to be aiming for 60% or higher delivery margins. So you don’t wanna spend more than 40 cents on every dollar in AGI that you’re earning. If you’re lower than that, it’s gonna be challenging to have a good bottom line profit without squeezing overhead spending kind of making a lot of cuts to the, I guess, the lifestyle expenditures of your business. So definitely pay attention to AGI, pay attention to delivery margin, and then pay attention to what percentage of your AGI is going to overhead. And you generally wanna keep that under 30% with eight to 12% going to admin eight to 14 ish percent going to sales and marketing and somewhere between four and six to going to facilities and rent.

John Jantsch (06:39): So, so, so do you have, is there somewhere we can send people to say here what you just said, if you wanna find like the checklist or the sheet for that?

Marcel Petitpas (06:48): Yeah. Yeah. We have a agency profitability toolkit, which we put together. It includes training videos, spreadsheet, templates, checklists, cheat sheets, with all these benchmarks. You can grab that@perketo.com for slash toolkit. So yeah, if you’re listening to this in the gym or in the car and you’re like, oh crap, I need to come back and take some notes. Uh, don’t worry. It’s all for you. It’s all there for you in the toolkit.

John Jantsch (07:06): So one of the, probably the hardest units, I think that people have to measure, particularly when they have in a lot of internal, uh, staff working on various accounts, you know, how do you spread that? I mean, they’re not spending every minute of their time, you know, in billable hours, so to speak, if we can use that ancient language, but you know, how do you spread that kind of unit of labor across where it should be expended, I guess?

Marcel Petitpas (07:31): Yeah. So I think this is where a lot of people make the mistake of trying to measure earning efficiency, purely using financials. And the reality is like, I think at the agency level using your financial statements is always gonna be the most accurate and truest form of measurement. But when we start slicing down to the client or project or phase or task or however your agency is structured and that’s where there’s some nuance where you really want to think about, you know, do I have distinct departments within those departments? Like what is the S of your business, because that’s gonna inform what does your data need to be structured, like to get you good reports. But when we start getting more nuanced than just the agency level, I think using your accounting tool and your financial statements to try and measure profitability on clients is generally not the best idea because it’s gonna require a ton of expense and time and investment.

Marcel Petitpas (08:18): The easier way to do that, the easier way to measure what I call earning efficiency is using what I like to call average billable race. And it’s a very simple formula. What is the AGI in that bucket? And it could be a time period. It could be a subsection of the business or both, and how many hours were worked to earn that AGI. And so simple example, I have a $10,000. I spent a hundred hours on that client. I made a hundred dollars per hour on that client doesn’t matter what it said on the rate card that I gave them or on the proposal, I made a hundred dollars an hour because I had to invest a hundred hours of my team’s time on that using that metric, you can very quickly start to compare one time period to another one, client, to another one type of service to another.

Marcel Petitpas (09:02): It makes it very fast and easy to on a tighter time horizon, get a sense of what’s more or less efficient than another service offering. And as long as you understand roughly what your average cost per hour is on labor, then can get a sense of how close is that to my target, you know, delivery margin or gross margin or contribution margin, and use that to much in a much simpler way, get touch points on earning efficiency. And that’s how I would encourage people to do it on, you know, tighter time horizons or more specific subsections of the business, cuz it’s just so much less expensive than trying to do. Cost-based accounting on projects in your accounting tool.

John Jantsch (09:37): And now let’s hear from our sponsor. Look, if you’re tired of slowing down your teams with clunky software processes and marketing that is difficult to scale, HubSpot is here to help you and your business grow better with collaboration tools and built in SEO optimizations. A HubSpot CRM platform is TA made to help you scale your marketing with ease, integrated calendars, tasks, and commenting, help hybrid teams stay connected while automated SEO recommendations, intuitively optimize your webpage content for increased organic traffic ditch, the difficult and dial up your marketing with tools that are easy to use and easy to scale learn how your business can grow better @ hubspot.com. Yeah, well, and it, it actually informs billing, right? I mean it informs what proposal should say in the proposal. It performs. If we’re on a, a retainer, it informs how much we can actually do that month, you know, for the call.

John Jantsch (10:36): And I think that’s where a lot of people get stuck is they’re thinking our, you know, internal rate is X. And so we’re gonna propose, you know, this. So, you know, how do you suggest that first off? How do you suggest billing? I mean, I’m a huge fan of retainers. A lot of people like projects, a lot of people like hourly. I like actually selling results. Like here’s what you get matter. You know, how many hours we put in or, you know, what it takes to get you there, you get the result and here’s what the result costs, but what’s your advice or what do you see as maybe the most useful sort of way to do consider billing?

Marcel Petitpas (11:11): I’m gonna give you an unpopular answer, which is I think all I there’s four ways of pricing for my perspective. And I think that there is a room there’s room in the industry for all four. And it has to come down to what we evaluate this through a value and risk lens. And I have a, a podcast that people can go listen to how to price your agency services, where I kind of go into more detail, but I have this pricing quadrant that I think of. So if you can imagine you have a vertical access on that access, you have high value at the top. You low value at the bottom. So that’s a question of asking what is the value of this service in the market? And generally that comes down to two things. How commoditized is your positioning around that service? So are you a graphic designer or are you a graphic design firm that specializes in helping B2B SaaS companies communicate visually like through their complicated data systems for enterprise customers like same service, graphic design.

Marcel Petitpas (11:59): One is clearly more scarce and more expert than the other. The other thing with value is sometimes it’s relative to the client. So to your point, if I’m increasing the conversion rate on apple dot com’s website, by 1%, that’s worth hundreds of million S of dollars to apple. My aunt Shirley who sells, you know, handmade goods on Etsy, it’s worth 10 bucks to her. It might take the same amount of work, but it’s just not as valuable to aunt Shirley as it is to apple. So understanding the relative value is important. The other thing is risk. So how risky is this work? Are we building, you know, a website from a template for a legal client and we’ve done hundreds of them and we know kind of exactly how long that’s gonna take that’s low risk or are we trying to land a rocket ship on a barge in the middle of the ocean and building control systems for that on a new technology stack?

Marcel Petitpas (12:44): That’s not very well documented. Well, it’s impossible to scope how much time it’s gonna take to do that work. So understand where your service falls on that value, risk continuum. If it’s low value and high risk, you’re probably gonna want to go towards some kind of time and materials billing model so that you can share risk with the client, build them for the hours that you’re working. Because if you can’t estimate how much time it’s gonna take, then you need to try and create some protection in the contract for that. And then it becomes a game of billing for as many of the hours that you’re working as possible. And just try to keep your average cost per hour, a level where you have enough margin in that hourly rate to be profitable, if you have high value, but still high risk. This is where I like what I call abstracted time materials.

Marcel Petitpas (13:23): So you’re not talking about hours. You’re saying, Hey, you need this enterprise website. I’m gonna lease you this, you know, cross-functional development team. It’s 10 grand, every two weeks. We think it’s gonna take 16 to 20 a sprints to do this, right? This is what companies like media monks for example are doing. It’s the contract structure is time materials. So it helps absorb and share some risk with the client, but we arbitrage the value to level the conversation up from an hourly rate. So I like that model for high risk high value work. If it’s low risk, low value, I like flat because John, if you asked me to build you a website and I told you it was gonna be 500 bucks an hour, you’d probably tell me to go pound sand. But if I said it was gonna be five grand and I could get it to you in two weeks, and it was gonna be blazing fast, SEO, optimized, prove it to convert for your industry, whatever you might say, that’s a great deal.

Marcel Petitpas (14:09): I might still make $500 an hour because I know the risk and I can arbitrage that in the flat rate. And then if it’s high value, low risk, that’s where I really like value based pricing. So we can start anchoring the price to the value to the client and arbitrage the fact that we have low risk and really start to stretch the upside. But you could see how I think different pricing models for different moments and time for an agency. And as their products and services mature, they should migrate up into the left and ideally graduate to forms of pricing that allow them to arbitrage more value in that conversation with the client. So that might be the nerdiest way that’s ever been explained, but that’s how I think about it.

John Jantsch (14:47): Well, you know, as I listen to you talk about that high risk, you know, I think there’s a huge amount of communication with the client that has to go in that too, because yeah, there may be a client out there that’s trying to get a flat rate bid. Well, it’s like remodeling a kitchen. It is never gonna be what that flat rate bid told you. Person told you it’s going to be. And then all of a sudden it’s like, well, yeah, we had 30% cost overruns, but I think that communication in that risk, you’ve gotta have a client willing to say, yeah, I’m, I’m in for part of the risk too. Right?

Marcel Petitpas (15:16): Yeah. And, and that is a challenge with time materials, billing models, right. As you’re asking the client to share some risk, but that should be rooted in this conversation of, you know, a couple of ways to spend that number one, the process we need to use to solve this problem appropriate for you requires us to iterate together and learn together and change. So like, we, we can’t predict this or putting the onus on the client to say, if we’re gonna take on this risk, I need you to more clearly define what the deliverable is here. Yeah. And, you know, we need to be really aligned on what the scope of work is. And so those are kind of some of the things, but I, I think you’re absolutely right. The, the scope management and expectation management becomes critically important when you’re talking time materials, because you are asking the client to take on more risk. Yeah.

John Jantsch (15:59): All right. So you get a one word answer to this next question should pretty much everybody in the organization be tracking their time.

Marcel Petitpas (16:07): Yes. Short answer. Yes.

John Jantsch (16:10): No, that’s now the follow up, cuz I knew you were gonna say that. That’s why I only gave you one word, but it’s a pain in the, but now go ahead.

Marcel Petitpas (16:19): Yeah. So the first is the why and why should be because that’s your best insight into the efficiency of your own business. So I think the misconception with time tracking is it’s something you do for the client. It really should be something you do for your own organization so that you, yeah.

John Jantsch (16:32): Even if you’re not billing hourly, you’re not even billing hourly. That’s right.

Marcel Petitpas (16:36): Yeah. It’d be like, if you were running a restaurant and you had no idea what your food costs, you that’d be absolutely insane. That’s what running an agency without time tracking looks like. But then the question I get is like, well, my team hates time sheets or pain in the ass. The software sucks, whatever cool. I understand that I don’t like filling out time sheets either. So there is, is a way to adapt your business model and do this without time sheets. And it’s called resource resource plan based time tracking. And this is again what companies like media monks are able to do, but it’s because the way they staff their team is never working on more than a handful of projects at a time. So what the, that, what that gives them, the ability to do is have a project manager create an updated resource and on behalf of their team of eight, nine direct reports and do that through a series of weekly touch points.

Marcel Petitpas (17:19): And then the team doesn’t have to fill out time sheets, the project manager, who’s probably the person who’s most excited about this. Anyway, they get to do it. And it, it maintains a high enough level of fidelity that you get insight, but you get, you’re able to do that because you’ve reduced what I call client dilution, the amount of clients that a single person has to work on in a given day, which makes that a feasible model. So you can do it without time sheets, but it does require you to be very deliberate about how you resource plan people and try not to have one person working on a billion projects at a time.

John Jantsch (17:51): So a lot of organizations today have been able to scale their businesses, especially in the digital age, using third parties, white labels, you know, freelancers, some sort of mix of, you know, there’s three of us sitting around here pulling all the levers, you know, 47 people all over. What does that do? What kind of challenge does that add to the sort of pure optimization model?

Marcel Petitpas (18:15): Yeah. There’s benefits and there’s cons to it. I can tell you that some of the most profitable agencies that we have ever audited were running a, like almost fully outsourced white label model where all of the high risk work was being done by external vendors. And they typically retained account management and some form of strategy. So they retained the highest value services and those companies were extremely profitable. However, they have an entire part of their business that they don’t really have any direct control over and it’s, you know, all of the execution. And so it requires you to have very good partners. It requires you to have some redundancy. So several of them that you can balance work between. It does require you to have somebody hovering over them and managing them very closely. And it does take a lot of the process and quality control out of your purview.

Marcel Petitpas (19:07): So those are some of the risks to watch out for. But I do think it’s a model that can work well. If it’s done intentionally, you apply enough margin to what those white label partners are charging. You have a contract structure in place that really does help you take downside risk off the table. Like if you think about you’re doing high risk work, there’s two ways to decrease the risk. Number one, you have to find a way to get better at scoping that whether that’s tightening up the scope of work or getting better data, getting better estimating, or it’s like just don’t be responsible for the risk anymore. Give that to a white label partner. So it is a fast track to decreasing risk, but it does still leave you with a lot of responsibility for over service for overseeing that vendor. So I think the mistake a lot of people make is well, like I won’t need to track time. I won’t need to pay to profitability anymore. That’s not true. You will still need some level of internal team and you still need to measure their efficiency. It just tends to be easier to make that efficiency very high when all the high risk stuff is off your plate.

John Jantsch (20:04): Well, and it would probably, as I listen to you talk about a resource plan, it would probably, why wouldn’t you use a resource plan with your white label partners to some degree?

Marcel Petitpas (20:12): Yeah. I mean how that relationship is managed it, yeah. There’s a lot of opportunity there to get it tighter, but like certainly there’s still gonna be management required there and measurement of efficiency,

John Jantsch (20:22): You know, as a marketing agency, one of the things that we’ve learned over the years is to really scale with our clients. We actually have to help them operationalize some of their marketing as well, because I mean, it’s not just a matter of yeah, we got your leads, you know, it’s like we build onboarding for them. We do a lot of things for them that, that actually retain those clients and turn those clients into repeat clients because they’re happy how much, and this may be outside of the area that you end up working with, but you know, how much, um, responsibility do you think that marketing agencies have to really get that deep inside an organization? If they, I, I, responsibility’s probably the wrong word. Where do you think? I, I think there’s a huge opportunity if they are willing to ago that deep. I’m curious if, because you do a lot of operationalizing of agencies, you know, if that’s sort of a byproduct of doing that.

Marcel Petitpas (21:14): Yeah, I would agree. I think one of the things that often gets overlooked in the agency space is really deeply understanding the job the agencies being hired to do. We, we tend to think of what we do in terms of the or deliverables that are being rendered, but I really encourage listeners to zoom out and think about like, what’s the problem we’re solving. What’s the job we’re being hired to do. And how can we do that job better? And the deeper you go into this and the more creative you get with how much of a scope of responsibility you can take on the harder it becomes to fire you, the more context you build with that client, the easier it is for you to retain and expand the relationship you have with them. And it also puts an onus. I think there’s another really important part of this, which comes down to client communication, which is the number one place that I see agencies falling short is just not communicating proactively enough with clients and managing expectations well, and in a proactive way. And I think if you can do those two things, well, it will, it’ll set you apart from every other vendor that they work with in a big way and dramatically improve your retention, which you and I both know, John, it, it has a massive impact on the ed economics of your business. And of course, uh, can’t be overstated in terms of its importance. Yeah.

John Jantsch (22:27): The, my longest running client, uh, has been a client since 2004. So I don’t, I don’t know how many millions that adds up to, but it’s a lot. Yeah. But fortunately they’ve continued to grow, but I, I think you’re absolutely right. I mean, we work with a lot of founders, business owners, direct owners, and you know, a lot of times I think making their life better is actually part a big part of our job. I don’t think any of them actually ask for in a deliverable, but I think that’s the problem in a lot of cases we’re solving by helping them get some control over their marketing. So to your point, that’s how we view it as well. So, so Marcel tell people where they find out more about per keyto and, and the work that you, uh, do on behalf of agencies.

Marcel Petitpas (23:08): Yeah. Parakeeto.com is, uh, the, the place where you’ll find the most information. Also, if you’re listening to podcasts and you like podcasts, we have a show called the agency profit podcast. John’s been a guest on there. He’s gonna come back for round two here soon. Um, so make sure you tune in there. If you want to nerd out some more with stuff like this. Um, and if you wanna connect with me directly, you can find me on LinkedIn. I’m wearing a shirt with birds on it. I’m not hard to spot, and I’m always happy to nerd out with you on agency profitability. If you got questions.

John Jantsch (23:34): So Marcel, thanks so much again for stopping by take time to stop by the duct tape marketing podcast. And, uh, hopefully we’ll see you, uh, one of these days out there on the road.

Marcel Petitpas (23:41): Thanks, John.

John Jantsch (23:45): All right. That wraps up another episode of the duct tape marketing podcast. I wanna thank you so much for tuning in. Feel free to share this show. Feel free to give us reviews. You know, we love those things. Also, did you know that we had created training, marketing training for your team? If you’ve got employees, if you’ve got a staff member that wants learn a marketing system, how to install that marketing system in your business, check it out. It’s called the certified marketing manager program from duct tape marketing. You can find it at ducttapemarketing.com and just scroll down a little and find that tab that says training for your team.

John Jantsch (00:00): This episode of the duct tape marketing podcast is brought to you by the salesman podcast, hosted by Will Barron and brought to you by the HubSpot podcast network. Look, if you work in sales, wanna learn how to sell, and frankly who doesn’t check out the sales podcast, where host Will Barron helps sales professionals learn how to find buyers and win big business ineffective and ethical ways. And if you wanna start someplace, I recommend the four step process to influencing buying decisions. Listen to the salesman podcast, wherever you get your podcast.

John Jantsch (00:43): Hello, and welcome to another episode of the duct tape marketing podcast. This is John Jantsch and my guest today is Steve Hoffman also known as captain Hoff. He’s the CEO of founders space. One of the world’s leading startup accelerators with over 50 partners in 22 countries, founder space was ranked number one, the number one incubator for overseas startups by Forbes and entrepreneur magazines. He’s also the author of surviving a startup practical strategies for starting a business overcoming obstacles and coming out on top. So Steve, welcome to,

Steve Hoffman (01:18): It’s fantastic to be here. Thank you for having me.

John Jantsch (01:20): So I have to admit surviving a startup doesn’t really make starting a startup. Very appealing. Does it?

Steve Hoffman (01:28): Well, the truth is that the majority of startups fail and right, what every entrepreneur wants is to succeed. And so that book, the book is designed to give entrepreneurs really practical and concrete advice on how to avoid all the pitfalls of doing a startup and act and come out on top. So I’m super optimistic and I believe entrepreneurs, if they are educated, if they know the right things, they can succeed. But I, what I wanna do in the a book is tell entrepreneurs, you can’t just dive into it. You have to prepare.

John Jantsch (02:08): Yeah. Yeah. I, I mean, that’s obviously that’s the real message is this is not a walk in the park. I mean, this is something you have to take very seriously.

Steve Hoffman (02:15): Yeah. We read about all these unicorns and people being successful, but you don’t hear about the hundreds and hundreds of entrepreneurs who hit dead ends, who, you know, fell off a cliff who, where it didn’t go as they planned.

John Jantsch (02:29): So I’m curious, how did you get into the business of advising startups? Well,

Steve Hoffman (02:34): First of all, I did three venture funded startups in Silicon valley and two bootstrap startups. So I know what it’s like. I was, I’ve been in the trenches, I’ve been two doing this my whole life. And you know, after my third venture funded startup, my friends started to come to me and my nickname is captain H. So they’re like, captain, can you help me? You know, how do you raise capital? How do you put together an investor deck? You know, could you look at my business plan? See if the business model works, all these questions. And I started to get these entrepreneurs together in groups. We called them founder space, round tables, and we’d meet, I’d introduce ’em to angel investors and marketing experts and lawyers, and really try to help them get off the ground. And after that, we decided we’d get our own space. So we got a space in San Francisco, we launched the founders space accelerator, and it just spread from there. Now we’re like all over the world, working with entrepreneurs.

John Jantsch (03:32): I I’m cur this is probably more of a personal curiosity question to hear your answer to this. There’s obviously a lot of buzz about startups. A lot of people start businesses. The term startup seems to apply to a certain approach or kind of business. I’m curious, how, how would you define the difference between a startup and somebody starting a business?

Steve Hoffman (03:52): So they’re different types of ways to be an entrepreneur. They’re all entre, they’re all entrepreneurial. So it doesn’t matter if you’re starting a local restaurant, a laundromat, you know, the next Google or Facebook, you are starting a business. It’s a lot of work. So a lot of the basics are the same, but the big difference between what would be, you know, a local business, as opposed to a potentially global international business is growth. Potential. How big is your vision? Can, what you’re starting grow? Do you have something unique? And it doesn’t have to be technology. It could be like Lululemon. They didn’t have a lot of technology. It was a unique approach at a specific time to target the yoga market, which other big players were overlooking. And they targeted it did a really good job and they are, they grew enormously. So it really doesn’t matter could be a restaurant, but are you going to franchise it? Do you have big plans? How are you gonna grow this chain? Or are you happy to run just the local restaurant that is differentiator.

John Jantsch (05:03): So in the beginning though, even with the bigger vision, are there different challenges

Steve Hoffman (05:09): There are. And there are, I often tell entrepreneurs it’s as much work, time, effort, and risk to run a small business as it is to run a potentially incredibly large business. And that’s because you’re just operating on different scales and you need to focus on different things. So if you’re running a small business, usually what you’re doing, if it’s a consulting business or any type of business, you are doing something similar to what other people have done in the past. So you are your, your business model. Isn’t gonna be totally innovative. You aren’t taking technology and using it to solve problems in a new way that other people aren’t, but you are just focused on building your business and the challenges there are, it’s a competitive world. You have to compete against all these other people. And if you, for example, open a store and it’s in the wrong location, really tough to succeed.

Steve Hoffman (06:08): If you don’t get the right people on board, you know, hire them really hard to succeed, marketing, getting your name out. How do people find you? How do you differentiate yourself? All these things are, if you’re running a small business, they’re huge challenges. Now, if you’re running what we call a high growth startup, usually what you’re doing, but not always, like I said, is using technology. You don’t have to invent this technology. It can be a mobile app on a phone. You didn’t have to invent the iPhone and invent applications. You just have to use the technology in a way that provides value to people that they aren’t getting elsewhere. And in addition to that, and this is the really hard part, you have to find a market. An untapped pool of demand is waiting for this to come along now, right? This is why I tell entrepreneurs who wanna run, you know, wanna start the next big Google or next big business.

Steve Hoffman (07:08): Your, your most important task at the beginning is to be a demand hunter to go into the market. It’s not to think of some crazy new idea because most is don’t work in the real world. They sound good, but you know, you put ’em out there and somebody’s already doing them, or they don’t work for various reasons. But the hardest thing to figure out is where is the, these pools of demand that are always forming new pools of demand that aren’t being met by the marketplace. And if you can identify one of those and tap into it that and provide a solution for that power of that demand will just drive the growth of your business.

John Jantsch (07:45): So as somebody who helps these organizations get funded and grow, I mean, is that kind of your first question is that when somebody comes to you and says, I’m gonna make blah, blah, blah, that is that your first, you know, thing is if we can’t figure out where that demand is, then, you know, go away, uh,

Steve Hoffman (08:01): Bottom line for most smart investors. And I’m an investor and I try to be smart. It’s yes, it’s honestly. Yeah. If so we look at a couple things, one just right off the bat. If we’re looking at their concept, their investor deck, we’re saying, where is that demand? Show us that demand. Do people really need this? Because you can say anything you want, but if, and you can build the best product you want, you could spend year building like the most perfect product with all the features and no bugs or whatever it is. You put it out there. If there’s no demand for it, it just dies like invariable, nobody. So we as investors, most investors, we call it in Silicon valley, but really what it is, it show us that people need this. And are there a lot of them out there, if, if you can prove that to us, and there are a lot of them and nobody else is doing this, or they’re not doing it as well as you are, you’re using technology to do it in a much better way, a much more efficient way, deliver a lot more value.

Steve Hoffman (08:59): Woo. You got something. Then we get really excited. And the next thing we look at, honestly, after that is the team. Like you can have the best idea and the biggest demand in the world. But if you have a crummy team, like they’re not up to par, they can’t execute on the idea. You’re still go. You’re gonna fumble the ball. Somebody else will pick it up and run with it. So you need those two things are the most important thing when it comes to funding high gross startups.

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John Jantsch (10:12): Yeah. Now you kind of answered my next question. I was gonna say, I was gonna ask you, you know, what are are the secrets to raising money, but I think you just answered it right. There have a team that shows the experience that they can pull this off and have a ability to show demand. So you probably get this question. I think a lot of people assume, oh, I wanna go out and get funded. Should everybody

Steve Hoffman (10:30): Get funded? Absolutely not. So, first of all, there are many types of businesses and certain businesses are right for certain people. Like a lot of people, they are naturally not foreign leaders. They don’t like it. They don’t like managing people. They don’t want to hassle with it. They are individual contributors. They tend to be much more happy doing their own thing. And when they step outside of that, who they really are, they, they don’t even perform well because they’re, it’s just not to them.

John Jantsch (10:58): It’s a drain.

Steve Hoffman (10:58): Yeah. So I tell those people, pick a, what we call lifestyle business, pick a business, what you can run with you and maybe a few other people or by yourself, and be really happy and earn a good income. You will be much more successful that way. And then other people they really are so that they really have great leadership skills, as well as the love and desire to engage people, to go out into the world, to pull in resources. If that is in your DNA, if that’s who you are, then you are in a good position to start one of these high growth businesses that you build, not by yourself because we, the CEO’s job. Number one job, you know, is just find the right people and find the right resources. That’s all you need to do. Because if you get the right people on the team, they’re gonna build your product, the right people on the team, they’re gonna market your product. The right, you know, they’ll do the right. People will do everything, but the CEO needs to set a vision and then needs to go out and get these people committed. Even when you have no money or very little money, get them committed to you, get investors committed, get customers committed. That is the role of the CEO in an early stage company.

John Jantsch (12:11): That’s interesting. I’m sure there may where, you know, the founder made the thing or, you know, did the tech or knew how to do the tech once I grew about 10 people, they crashed. Yeah. You know, because it was like, you know, that, that became, you know, the real challenge. So

Steve Hoffman (12:24): Yeah, if you can’t lead people, organize people, motivate people. You should take another role in the startup. Like if you wanna do a startup and you’re really just like, love the coding, do the coding and get somebody else. Who’s that superstar in that area.

John Jantsch (12:39): So I know in the book you talk a lot about managing people. And, and in my experience, that’s prob I don’t care what kind of business. That’s the biggest, in many cases, that’s the biggest challenge as they grow. So what are some of the secrets to effectively growing a team? So,

Steve Hoffman (12:53): First of all, don’t pick second rate people and it’s so easy to do because it’s so hard to find great people. It’s really hard, but especially in the positions where you want them to innovate where you want them to think beyond their job description. And this is true for like startups that really want to grow. So if you have person and all, they have to do sit at the cash register or take, you know, orders, you don’t need a super innovator. You could, you know, get, just get a reliable person. But if you are going to have somebody who’s developing a product, developing a new technology, designing, or going out into marketing and figuring out new ways to market, you really need a thinker. So that’s, so you have to spend a lot of time looking for this person. Like literally when you first start your company, I tell people something counterintuitive.

Steve Hoffman (13:41): I say, don’t worry about the idea. Like there are a million ideas out there there’s a million ideas you have. They’re probably not exactly right. You will figure out your idea later, but what you can’t figure out later, what you need to start with is the team. So put 80% of your time into like, who are these amazing technologists, this amazing marketing person, this amazing designer that you can bring on to your team at the beginning. And then as a team, you start to go into the real world and run experiments to try things out. You might have 20 different ideas between all of you and you’re gonna try all of them out. And usually you pick a direction. You usually say, you know, we want to remake the restaurant business and we have all these ideas on how we can do this. And with this team, we’re gonna go into the restaurant business. We’re gonna talk to chefs. We’re gonna talk to owners. We’re gonna talk to waiters. We’re gonna figure out what their problems are. And we’re gonna figure out how to do things differently. Use new technology, new business models to, to solve their problems. If you approach it this way, your chance of success is so much higher.

John Jantsch (14:46): So Steve, you, you’re still in San

Steve Hoffman (14:47): Francisco, right? I am actually near San Francisco. Now. I used to live here city. Now I live outside this year.

John Jantsch (14:54): So, so you probably occasionally drive by some very large buildings that are at about 10% capacity, you know, because employees are distributed now or not coming back to the office ever again. Do you think that the no headquarters model is going to impact startups going forward or, or is it really just a different form of delivery of, you know, employee services?

Steve Hoffman (15:16): I think it’s a positive and a negative. So for some people it’s a, you can tap a workforce of talented people who might not be able to come into the office, who can save a lot of time by not doing the commute. But it’s also a big disadvantage because having people in the same room, collaborating, talking on their downtime, you know, all these serendipitous moments that you have when you’re with a team of people, those don’t exist. So I, what we’re seeing now in Silicon valley is a lot of startups are itching and big companies to get people back in the office. They wanna get people back in the office. It’s hard because people, a lot of people like now, they got used to working remotely. They have control over their time. They have more control over their life. Uh, they don’t necessarily want to go back.

Steve Hoffman (16:01): So we’re gonna see this push and pull over the next several years. But my gut feeling is that when, you know, barring another pandemic, which we hope hasn’t happened, you know, assuming we’re, we’ve gotten over this and now we have vaccines. If that is the case, I think we’ll start to revert back to the way it was. Now. It’ll never go as far back, like to the point where, you know, we expect almost everybody to be in the office. It will never go there again. We’ll always have this blend, but we will see a lot more people being expected to go and, and be there in person.

John Jantsch (16:38): Yeah. Yeah. I know a number of people in San Francisco that I, I know and have spoken with recently, actually left the city.

Steve Hoffman (16:45): It’s a little harder for those people. And that’s what I mean. It’s never gonna go totally back, but, and they’ll be compromises or they’ll have to make compromise this, but I will tell you, you know, some, a lot of startups I work with, we, we wanna see people face to face. It’s just not the same when you’re distributed and talking remotely.

John Jantsch (17:05): If, if you were gonna have every potential founder or founder come before you ask for money and they could give you all of the standardized personal personality tests that they’ve taken. Are there any traits that you would look for that, that you think need to, that make somebody more likely to succeed as

Steve Hoffman (17:20): A starter? Yeah, I will tell you, so when you are faced with a real challenging problem, even something that seems impossible, hopeless, like it’s just like, it, it, at a certain point, everybody says you can’t do it. It’s not possible. You believe actually what might not be possible, but the entrepreneurs who just dig their heels in and just go at it, like they just go at it relentlessly. Those are the ones who tend to break through it. And if you have that type of dogged determination in your personality, there’s a good chance. You’ll make it. You might not succeed on your first try or your second try, but you will get there.

John Jantsch (18:01): Yeah. You won’t give up, tell us a little bit about the founder’s space, how it operates. Does it, you, the typical incubator, or do you feel like you have, uh, some innovations that you’ve brought to this?

Steve Hoffman (18:13): Yeah, so we’re a little different, we’re not, we have evolved actually through the pandemic. We used to be much more like a typical incubator. We were early on in the ecosystem in San Francisco. We grew really fast internationally. Now we’re more like a distributed innovation hub. So we work with other incubators all over the world with different governments, with different, uh, tech, technological companies, big tech companies. And what we do is we are really into education. So we run programs all over the globe, both online and offline. Uh, we used to do a lot more offline and we plan to do that again. Now that we’ll be traveling much more where right,

John Jantsch (18:54): We,

Steve Hoffman (18:55): Uh, really focus on giving entrepreneurs the, what they need to know to kind of break through and helping them in detail, like analyzing what they’re doing, where they’re running into problems and getting those we’re less focused on running a traditional accelerator program where we have take equity. We have demo days. We do all these things. Those our programs tend to be. They’re not like you have to be in them three months or whatever, and then have a demo day. Our programs tend to be more compact, really try to, uh, focus today. What are your problems today? Let’s see in, in, in a week, if we can get through over the major hurdles, if we can have some breakthroughs for you, new ideas, things that will take you to the next level, and then you can go on and run your business.

John Jantsch (19:43): So it’s almost like a more of a sprint model in some ways,

Steve Hoffman (19:46): Yes. As sprint at just the right time when entrepreneurs need that help the most. So they come to us, you know, we hit this roadblock or we, we can’t get beyond this point. What can we do? What, you know, since we’ve worked with hundreds of companies, we start to see patterns. We start to see things, oh, well, you’re, you don’t have this on your team or you’re headed in this direction. Or you haven’t really validated your model. You think you have, or you wanna believe you have, but this is what you need to do to really know if this is gonna work. And if it’s not, we need to pivot. We need to, uh, go a new direction.

John Jantsch (20:20): Steve tell people where they can find out about your programs and obviously the books and everything else that said that you’ve, uh, got yourself

Steve Hoffman (20:27): Into. Great. And so if you wanna reach me for any reason, just go to founders, space.com. So it’s founders based.com. I’m there all my books, surviving a startup. I have a number of other books. They’re all there. And you can contact me at founder space. You can also reach out to me on virtually any of the social networks, just search for Steve Hoffman or founder space. A good one is LinkedIn. I respond to everything. So reach out and get in touch.

John Jantsch (20:54): Awesome. Well, thanks for taking some time to stop by the duct tape marketing podcast. And hopefully we’ll run into you. Uh, one of these days out there on the record.

Steve Hoffman (21:00): Thank you. It’s been wonderful.

John Jantsch (21:02): All right. So that wraps up another episode. I wanna thank you so much for tuning in and you know, we love those reviews and comments. And just generally tell me what you think also did you know that you could offer the duct tape marketing system, our system to your clients, and build a complete marketing consulting coaching business, or maybe level up an agency with some additional services. That’s right. Check out the duct tape marketing consultant network. You can find it at duct tape, marketing.com and just scroll down a little and find that offer our system to your client’s tab.