How to Turn Your Revenue Goals into a Marketing Plan

Brandon Welch 0:00
Not all things come down to numbers. Numbers can only measure what has happened. They cannot measure the collective feelings and emotional drivers that actually produce sales.

Welcome to the Maven Marketing Podcast. Today is Maven Monday. I’m your host, Brandon Welch, and I am here with Caleb, the migraine conquering. AG,

Caleb Agee 0:24
oh, wow, I feel so special. He’s back.

Brandon Welch 0:27
We almost didn’t get this episode recorded, but he has told his migraines where to go making the Maven Mondays. All these Maven Mondays, we’re giving him a headache. This is the place where we answer your real life marketing questions so you can grow your business, eliminate waste and advertising and achieve

Caleb Agee 0:46
the big dream. The big dream last week, we did

Brandon Welch 0:50
an episode on creating strategy for your company. We talked about commitment, consistency, coachability. We talked about the things that you could get together with your team to get everybody on the same sheet of music. And we talked about how to dream big and think in terms of one, three and five year, uh, vision, values, vows and things that drive your company. And we’ve had a number of people say that’s awesome. That’s helpful for mindset stuff. But how does this actually apply to advertising and marketing and all the things that we are supposed to be good

Caleb Agee 1:19
at? Yeah, yeah. So stay in your lane. People stay to what they’re saying. Yeah, exactly. So it all, hey, it all starts with that stuff. It’s company growth, and that’s what we’re all about. Company

Brandon Welch 1:29
growth starts there. Starts with very strong vision, values, vows. I would highly encourage you to go back and listen to last week’s episode. Very practical. We’ve got another very practical episode for you today. Because you guys asked, How do I create my marketing budgets? How do I think about growth as it relates to what I’m spending? And today, we are going to show you the ropes. Feel like there should be a rope fun here, a rope pun,

Caleb Agee 1:52
I’m afraid not.

Brandon Welch 1:56
Okay. Mr. Caleb, yes, we have broken this down into five parts. Again, five is the theme for December or July. This, if you’re listening to this, in July, five is the theme for July. It could be, but we talked about building that strategic marketing plan set the direction we’re gonna apply that to. We’re gonna start by talking about revenue goals. That’s That’s actually one of the more standard things inside of a strategic marketing plan, is how much are we gonna grow, and when it comes time to say, Well, what budget should I have? We have some really helpful formulas that we’ve used over the years. And what we’re actually setting budgets for clients, whether they’re, you know, trying to go from 80 to 100 million or from five to 10 million. We have some ways to think about that and break that down, yeah, and so stay tuned for that. But go over the next like the all five points, we’ve got customer cost of customer new acquisition. We’re gonna assess the headwinds, which we’re gonna call art versus science. We’re gonna talk about making a reasonable plan. We’re gonna talk about applying it to your budget in different medias. And then we’re gonna talk about efficiency and long term, setting yourself up for sort of the stock market, the IRA of business growth,

Caleb Agee 3:07
yeah. And so going back, we’re going to start with the cost of new customer acquisition, and we’re going to we’re going to make a case study, a fake company that actually we’ve taken these are actually almost real numbers. We’ve just rounded them out a little bit. Yeah, these are real numbers from clients that we have, that we work with, and we just rounded them for easy math, because we are going to do some math today together. Hope you brought your brain. You’re going, you’re driving to work right now, and you said, I really wanted to do math this morning.

Brandon Welch 3:38
We didn’t want to do some math. So instead of, like 10 point 2 million. Who might round it down to 10 million for some of these goals? Yeah. Try to keep it as round numbers as possible. But these are from a real client, yes.

Caleb Agee 3:48
So this client says that their revenue goal is ten million in 2024 next year. They did 9 million last year.

Brandon Welch 4:01
Okay, okay, sounds like a growth of about a million dollars. $1 million okay, so we’re going to talk about the cost of new customer acquisition. And right here, most people just stop and say, Yeah, I did nine. Sounds good to do 10. And that is, honestly, that is like the first step that revenue growth and conversations about strategy and marketing budget and how to apply the different things we’re going to talk about here, gets off track, because we just think that growth is growth. And what is true for every business is at least to some degree, you have existing business, you have referral business, and then you have new business. And actually what most business owners fail to realize is that new business is really expensive. Um, existing in referral business is not expensive at all. You’ve actually realized that. And you’ve actually realized that through all of your marketing efforts to whatever degree from years and years past. Yeah, so unless you are literally a brand new business January 1. And you have some existing and referral force to your business. So this example we’re going to talk about happens to be one, and we actually chose kind of the, I would say, the harder of the two options, this is going to be one, that this is going to be a business that has a really long buying cycle, and so therefore, every year, they have to get a big percentage of their revenue has come from new customers, yeah, people don’t buy in this business. We’re

Caleb Agee 5:23
talking 20 to 30 years for this product.

Brandon Welch 5:25
Yep. This is actually, I’ll just, I’ll just say this is home improvement based business. So think of roofing, siding, windows, HVAC, units, things that people don’t buy very often at all, and when they do, they’re usually big ticket items, yep. So break this down. If we were look at this client, we were to say, okay, cool. You want to grow $1 million next year. What percentage of your business is coming from new, new business versus existing? Because I as the marketing guy don’t feel right taking credit for stuff that’s already happened or that’s already going to happen. Yeah, and you should not give credit to marketing for stuff that’s already gonna happen, and we’ll get to a grand conclusion here in a second. But as you’re thinking about customer acquisition, you shouldn’t have to generally pay twice for customers that you already have. Yeah, so don’t assign a marketing budget to them. Just continue doing the things that hopefully exist in your vision, values and vows that make them wanna come back to you. But

Caleb Agee 6:20
this example,

Brandon Welch 6:23
take us through. Take us through. This example, actually,

Caleb Agee 6:25
yeah. So you want me to walk through the Yeah, how much will come from? So we are assuming that the percentage of existing and repeat customers will be 10% so $1 million

Brandon Welch 6:37
Yep. So out of his 10 million, 1 million bucks is coming from, you know, in this case, it might be a builder or a contractor that uses his service often everywhere. Yeah, he happens to know that because he’s been in business for quite a while. You know, there’s a family or two a month that are going to buy a vacation home or buy a new home, that they need a roof replaced, and they like him, so they go back to

Caleb Agee 6:58
them, right? Yep, you got property investors or something, they’re coming and doing work, okay? And then another 10% we’re gonna say is gonna come from referrals. Referral, we did a good job. Yep, you told your friends about us. Yep, my mom needs a

Brandon Welch 7:13
good, honest company. You did good honest service for me. I referred him. Okay, this is, hopefully you have a CRM that kind of allows this to be a little more exact, but guys, just use your last, you know, take your last 10 customers you can think of and just say, out of those, how many would I have gotten no matter what? How many probably referred me because I did a good job, and then how many were truly new, and they found me via some other force? Yeah,

Caleb Agee 7:36
and if so, if you’re doing the math at home, we’re aiming for 10 million. We just found $2 million in existing customers and referral customers. That means we have $8 million dollars in new customers. 80% of our customer base next year will need to be from new customers. Yeah.

Brandon Welch 7:51
Now some of you in shorter buying categories that are listening, I’m talking to my retail folks. I’m talking to my restaurants, I’m talking to my hospitality based businesses, anything that’s more commoditized. Most

Caleb Agee 8:05
medical you’re, you’re getting appointments yearly, probably depending on what it is. So you

Brandon Welch 8:11
might, you might have 80% of your this might be flip flopped. You might have 80% of your revenue as repeat patients or whatever. And the takeaway there is going to be that the more percentage of brand new customers that you need, the higher your marketing budget is going to have to be. Everybody always wants to ask, Well, what should a small business be spending on advertising? It’s like, it depends. It depends. It depends, it depends. And if somebody doesn’t stop to tell you, it depends, I hate, I hate the the caveat and the disclaimer, but the really quick divider there is, how long does it take a customer to come around to buying business from you? Because today there is a way, way, way smaller percentage, like a lot smaller percentage, of people looking for a roof or a casket or a medical service or some, you know, HVAC unit they haven’t placed replaced in 30 years. There’s a way smaller percentage of humanity in that mode, versus people buying cheeseburgers or even automobiles or,

Caleb Agee 9:09
you know, shopping for mid range might be real estate, housing. That’s like the five to seven year range, exactly. So you know that that would be kind of somewhere in the middle. But yes, you see a lot of that.

Brandon Welch 9:21
Yeah. Yeah. So, so if you’re on this higher end where a big percentage, you know, I’m talking 70 plus percent of your revenue this year is going to have to come from new customers, generally, you’re in that double digit marketing budget percentage, because you have to get them and you have to earn them. And we’re going to break that down a little bit, and I’ll say another caveat, the faster you want to grow, and we’re going to talk about speed here in just a little bit, but the faster you want to grow, the more money you will need in a shorter window of time. But we’re going to start by breaking down saying, What’s my actual growth mean, which leads us to, what percentage am I going to have to get a brand new customers? Therefore, what percentage of that result is going to come from marketing or some sort of sales activity? So. Anything

Caleb Agee 10:00
to add to that? No, I think we’re, we’re good. Cool.

Brandon Welch 10:03
So the first question we need to ask is, how many new customers do you need to get the kind of revenue you want? In this case, $8 million okay, it’s ten million goal, 2 million of it’s already made. But 8 million? How many customers is that? Yep, well, you’re gonna have to find what a customer’s worth. Yeah, is a customer $1,000 or is it, you know, in this case, it’s actually $10,000 right? Yeah. So I take my a good way to figure this is just to take all of your revenue from last year and divide it by the number of unique customers you had. Yeah. So this gentleman’s business here. $9 million was his revenue. Last year, he had 900 customers. Obviously, we’ve routed these to make him easy, but it was actually really close, right? So if you do that math, it’s easy to find $10,000 or round about as his average customer value. Okay, yeah, if you’re doing this on a spreadsheet, which, by the way, we’ll link to a spreadsheet you can use to create this for yourself, if you’re doing this on a spreadsheet, it’ll, it’ll break it down to, you know, 9872 $72.32 and that’s just unique and more precise for your business. But for sake of this

Caleb Agee 11:15
answer, yep, $10,000 per customer, or round about there, right? That was last year’s last year’s call, or average value of a customer? Yes, now

Brandon Welch 11:23
there’s, there’s a there’s a nerdy step we’re skipping in here, and your your average value per customer will probably go up just a little bit based on price increases and inflation. So if you’re like, Ah, my average customer last year was $10,000 but just by way of material increases or salaries or inflation or taxes or whatever, you know you’ve got to have just to maintain you’re going to maybe pad that number up a little bit. Yeah. So keep that in mind, so we know that a customer’s worth to us in this scenario $10,000 so I have $8 million I got to make up. How many customers is that? Caleb,

Caleb Agee 11:56
well, you divide the 10,000 into that 8 million, and you’re going to find that you need 800 new customers to make 100 brand

Brandon Welch 12:05
new customers. Yep, awesome to get that 8 million. Cool. So if you’re hope everybody’s with me, we’re assigning real numbers, so we’re not just making up arbitrary percentages, or looking at some trade magazine and saying, Well, my all my industry has been 6% on marketing, so I better too. No, it seems to be in line with your goals and how you feel like you have an appetite or an ambition to grow and divide it from there. So we know what it costs or sorry. We know what an average customer is worth to us. Now we ask, What did it cost me to earn a customer in recent history, I would encourage you to do this in somewhere of a one to five year window. To level it out. If you’re a brand new business, this is harder. And if you’re a brand new business, it probably costs you more to get a new customer, yeah. But if you’re, you know, a 1015, 20 year old business, you can probably go off last year or whatever the most reasonable set of you know, time period is for you to base off. But in this case, this particular business had about a $600,000 marketing budget. So what we’re going to do is take the marketing budget and we’re going to divide it into the number of new customers we had last year, last year. Okay, yep, so keyword being new customers. Okay? Because we knew that this business had had roughly that, you know, 20% repeat and referral, yep, only 700 or so of their their customers were new. And you could, you could look at that various different ways. If you’re using QuickBooks or some other accounting software, you can run reports of new customers within a certain period of time. You can dead reckon it. You don’t have to be down to the penny accurate. Matter of fact, I think you’re probably wasting energy if you’re trying to make this down to the penny, but you’re getting a range, right? Yeah. So we spent 600 grand last year, and we got 700 new customers. And if I, if I did the math, that comes right about around to $850 I spent for a new customer.

Caleb Agee 14:04
Yep, makes sense, yep. So

Brandon Welch 14:10
if all of the things are the same, if there’s no big changes in market or anything like that, or economy or advertising platforms, I can expect, basically this year, if I want to earn that amount of new customers, I’m gonna at least have to spend 850 bucks a customer, unless something else changes, right? Yeah, I get better at something,

Caleb Agee 14:29
which we’ll talk about in a moment. Cool. So I know the average

Brandon Welch 14:33
value of a customer. I know what it cost me on average to earn a new customer last year. Now to get my marketing budget. I’m just going to take the amount of new customers I need multiplied times the amount of dollars I generally have to spend to get a new customer, and I come up with the $680,000 marketing budget on the whole.

Caleb Agee 14:55
To be clear, that was the 800 new customers you needed to make, essentially 8 million. Million dollars times $850 per customer that we we saw was our cost of acquisition last year. Yes, and that gives us $680,000 for a marketing budget for 2024 so we

Brandon Welch 15:13
know the big number. We know the big general trend. We know what marketing has had to be as a percentage of our growth in recent history to apply to the next level of growth we want to reach. Keep in mind, when you have a high rate of repeating customers, I’m talking about my retail folks that have, you know, smaller dollar values per like customer per transaction, but they have, they come back multiple times a year, yeah, or maybe even multiple times in the next three or four years, or

Caleb Agee 15:40
if it’s subscription or retained, you’re even better off then for exactly yeah. So

Brandon Welch 15:46
try to try to guess a lifetime value of a customer, yes, versus just saying, oh my gosh, I spent, you know, $850 to get a $400 sale today. That doesn’t make sense. But if I spent $800 to get a $400 sale that then turned into $6,000 in repeat sales. Yeah, I’m thinking of ALEC, our buddy that, you know, has all the music stores, yeah. Um, rentals, yeah, rentals and, but also, you know, the mom that buys a guitar today, that’s another it might be 400 bucks, but by the end of the year, I promise you, it’s 1200 by the cases and the strings and the toys that they need. So, triangulate that into your expectations. But the takeaway is, what am I having to pay to get a customer, you know, in a certain period of time? Cool, so the all that was part of the first section, which is cost of new customer acquisition when you’re setting budgets, when you’re thinking about, Am I making reasonable goals, and how do I start to think about chipping away at those? What is the amount of effort it takes per customer to get that and therefore, what should my effort expectation be? Because I hate to say this, there’s a lot of smart people, a lot of people I know, trust and respect that have built awesome businesses, but they don’t stop to go. They just think, well, you know, when I was, you know, first five years of business, I just could just say, let’s go get 3 million. And they now, and then it happened. And there’s a there’s a point where the market doesn’t allow you to do that in your competition space, and the bigger your piece of pie, the harder and more strategic you have to get at knocking that down. So keep that in mind. Ask yourself, what’s reasonable? Yeah, second part, assessing the headwinds, what we just talked about a minute ago, was pretty scientific, yeah, right. This is a little more artistic, okay, this is a little more based on intuition, a little bit of dead reckoning, a little bit of speculation, and then I’ll just call a little bit of common sense. So those numbers only work in a truly linear, reliable fashion, down to the penny if every single force in the world is the same, yeah. What do we know about the world? Is

Caleb Agee 17:56
it always changing? It’s always changing. Something’s changing. The only

Brandon Welch 18:00
constant is change, yeah. And therefore it’s not a vacuum. There’s not just this, you know, tight mathematic equation, yeah. And this is probably where you need to go, hit pause, grab your CPA, or your, you know, accountant, or whoever is your financial logical brain in the organization, and say, Okay, I love you. I rely on your spreadsheets to make good decisions, but I need you to know that not all things come down to numbers. Numbers can only measure what has happened. They cannot measure the collective feelings and emotional drivers that actually produce sales. Let me say that again, numbers cannot predict emotional behaviors. So we’re going to talk about the art versus science, assessing the headwinds. And every time this happened to me, this happened to me this week, accountant leaned in, goes, so what’s the ROI gonna be? And I’m like, I’m so glad you asked that, because it’s an important question to ask, but it’s a relationship to a number of factors, not a spreadsheet. If it were a spreadsheet, anybody on planet Earth could manage the woes of business, but they can’t, and they can’t. Okay, yep.

Caleb Agee 19:15
So the things you need to be assessing, to some degree, what is your competitive force is?

Brandon Welch 19:24
Are you the only shop in town doing this to the aggression level that you are, or do you have some other really quality, committed competitors that are putting stress and putting extra force on this customer space? I think a lot of marketers like to pound their chest being big and bad, saying, Look what we did when all they did was, you know, put the pizza restaurant in the part of town where there was not a pizza restaurant, right? And everybody’s going to flock to that because it’s pizza, even if it’s not good, right? Yeah. So how do you assess your competitors appetite? Hate and aggression in your category, I will say right now, I’m pretty excited for a lot of our clients, because they are courageous, they are focused, they are pushing through and doubling down, while a lot of their competitors are tucking their tail because they spend too much time watching news outlets that try to make them scared about making any decision. And that’s not a political statement. That’s just a condition of humanity. Yeah, that people get scared and they tuck their tail. Fear is paralyzing. Fear is paralyzing, and courage and visions, or sorry, visionaries. And I just spent two weeks in Boston and and Washington DC, looking at the stories of men who made courageous decisions despite incredible odds against them and incredible uncertainties, and that’s why they are. Their names are on buildings and their statues made out of them, right? So that’s a philosophical statement, but is your competitive force better? Worse, about the same. And if it’s about the same, cool, you don’t have to sort of adjust your expectations or your aggressive level. What is the general market doing in demand for your product? Automobiles is a great example of a product that has been in high demand for the last two or three years, and it is rapidly sinking in demand. As Americans have inflated grocery prices, they have just a sobering reality now that we finally out of pandemic honeymoon mode, and they’re going, I’m holding on to my automobile, and therefore, you know, a little longer, and therefore it’s a lot easier to come buy a car at a reasonable price now than it was, yeah, and they’re not flying off the lot, lot on the shelf. So think about that. Economy is a factor. I’m not trying to tell you to be scared, but I’m telling you to go, are we going to have to work harder to get the same result?

Caleb Agee 21:58
I know several categories that

Brandon Welch 22:02
the the overall demand was down 20 to 30% and some of our clients only grew four or 5% and they’re going, Wow, I’m used to growing 30% I’m like, You did. You did because most of your competitors in your industry and the manufacturers and everybody are down, but yeah, actually gained market share. When you Yeah, to hold, to hold ground in a shrinking market, is to gain market share. More importantly, if you hold on to that, when it comes back up, your your ship will rise with that, with that ocean. Here’s another big one. This is something you should ask a skilled consultant, not a media sales person, per se, but a skilled consultant that can give you the ins and outs. Are the advertising platforms making it harder to get the same result. I will tell you definitively, Google and Facebook both via regulation that’s happened to them, via the lack of targeting, via the way they’ve had to cool off and essentially dumb down some other algorithms that were a little too creepy and scary, and be a way of their shareholders still wanting that big fat advertising revenue, they are charging more for less results, definitively, yep.

Caleb Agee 23:17
So

Brandon Welch 23:19
what used to be true two or three years ago, we could put 50 bucks into Google and get a customer opportunity for a client. That same opportunity, while we’ve gotten better and while the marketing has gotten better, and while the business has actually grown in maturity, might cost 75 bucks now, and that’s just a reality. Doesn’t mean you can’t find wins. Doesn’t mean that your competitors aren’t facing the same thing. But you need to ask, are all things the same? Yeah? I think you would add to that, yeah.

Caleb Agee 23:47
I think the one thing I just want to put a cautionary tale with Google ads, with the networks and the what’s the third party networks, that they’ve been third party data, that they are working in performance Max, yeah, some

Brandon Welch 24:01
of these search partners, yeah, expanded searches,

Caleb Agee 24:04
yeah. So if, if you have a campaign that’s on that is going to think about, like the ads you get when you play a game on your phone or, yeah, or those, we’re seeing a lot of high volume traffic with low quality, very low quality. And so I would just, just say, off the bat, try to make sure you clean those up out of your you’ll see a lot of volume, but you’ll also see, we started seeing bots filling out forms at a rate that we’d never seen

Brandon Welch 24:32
before, as much as 30 to 40% of traffic. Yeah, completely fake. And in a lot of the campaigns,

Caleb Agee 24:37
these are, these are going to be on by default. So you want to make sure Google pulled

Brandon Welch 24:41
a faster on that, folks, yeah. I mean, we caught it for most of our clients pretty quickly. I mean, within a month, yeah, but Google pulled a fast one on the world and anybody who was just going along and just taking Google’s recommendations, and in some cases, Google just turned on features that they. Or greatly expanded features that you would originally agreed to and started giving you a lot more bogus traffic, yep. And probably what was happening is, most digital

Caleb Agee 25:17
folks, yeah, we’re going

Brandon Welch 25:18
to look at all the numbers. Your clips are going up and you’re going, my phone ain’t ringing. Some of

Caleb Agee 25:23
those were registering as leads. Oh, yeah, they were bought traffic. It was getting clicked on through and filling out a form, and it counted as leads, and it looked good. Yes, a higher volume of leads than we’d ever seen before, but our clients are saying these people aren’t answering the phone. You

Brandon Welch 25:38
don’t need to do is, is an episode on the questions you need to ask to hold your digital media accountable.

Caleb Agee 25:44
Yeah, we’re off track, but

Brandon Welch 25:45
let’s get back into it. Okay, so that was all in the assess the headwinds. If you think it’s going to change, adjust your expectations. Doesn’t you have to go home and tuck your tail for heaven’s sake. Don’t do that. Actually get excited, because you’re the courageous one. You’re the one listening to the Maven Marketing podcast. Hey, hey, there you are. You’re the one sending questions to Maven Monday at frankon maven.com you were the one going, I’m going to be courageous while everybody else is fearful, and you’re going to grab market share. But it’s just going to be different in a lot of scenarios, interest rates, economy, all that stuff. So first, we talked about identifying your what it costs to get a new customer based on recent data. Second, we talked about assessing the headwinds, what you think you’re about to go into dead reckoning. Third, is your plan reasonable? It’s a good one. We have this a lot. We have people who who have great success in their business, and they’re growing, and everything they touch is turning to gold because they’ve refined their vision, values, vows. They’re putting out a very strong personality based message. They’re attracting these awesome customers. Their salespeople are having more success. Yes, that is, that is a result of a of a frank and Maven client who does it our way, right? And so inevitably, they’ll go, wow, I grew, you know, by a million dollars last year. I want to grow by 3 million this year. We’re going,

Caleb Agee 27:15
Okay, uh, can’t wait. But then we get

Brandon Welch 27:19
to this. What does that mean? We kind of use some of the math we just shared. Math we just shared to you. And while customer acquisition can get more efficient from a media perspective, you still have to use that basic math to set reasonable expectations year to year. And so we’ll go, cool. You want to triple your amount of business and opportunities. Are you prepared to triple your ad budget? And they’re like, Well, that makes sense. And then we say, all right, your ad budget is $980,000 and they go, oh, oh, oh. And so what they realize is, maybe I’ll grow a little slower. And it’s not that we’re trying to kick anybody’s puppy, but we are saying it takes money to grow, and the faster you try to go grow, generally, the more money it takes in a shorter period of time. So don’t fool yourself into thinking that all growth is linear.

Caleb Agee 28:16
Don’t ask,

Brandon Welch 28:18
How do I triple the result? Ask, How do I stay healthy and hold on to what I have while refining and adding what I can afford to now, you will see private equity companies come in all the time and just try to cut, cut cut cost, and, you know, cut out the fat and double down on this magic thing they bought. And then they try to make this a linear equation, and most of them fail in trying to grow faster now they might get more profit margins, yeah, trying to double revenues because they gut the customer experience, yeah, and they gut the culture, and they got the things that actually make companies grow. It’s happening to so many people that I see, and some of them are even my friends in the industry that have either sold out or been part of a sell out company that sold out, and they’re going, man, it happens specifically in the home improvement industry. So don’t fool yourself into thinking it’s all linear and you can just double, double, double, anything you would add to that.

Caleb Agee 29:16
Yeah, I think we’re going to talk about this, but the different points of growth we talked about, the first, first 10% is probably the easiest 10% to get. So we’re talking about why market share. It’s it’s easier. That’s the low hanging fruit. It’s easier to make a dent in that initial set of customers. The second 10% will be a little bit harder, but that third 10% yes, it’s going to be even harder. Just think about, just

Brandon Welch 29:41
think about a search engine. Page. For example, yeah, just by being one of the 10 people within, you know, reasonable placement on a search engine page, you’re going to statistically get one out of 10 of those calls. And depending on how cheap and fast and all that you are, you might get, you know, a certain. Percentage of them, right? I have observed this over the years. My clients that start from zero to, you know that eight to 10% fairly easy. I mean, all things considered, it’s kind of like show up and you get the customer. Yeah, it’s definitely true. One to or, sorry, zero to 5% Yeah, that depending on how aggressive the market is and how competition is getting to that five to 15, 20% is remarkably harder. There are, there’s going to be, on average, just enough people that like to buy the way you’re selling that’s going to you could just naturally win. But then to get past all that group of people that doesn’t like to buy the way you’re selling, either because you aren’t priced a certain way, you could be priced too expensive, or, more likely, priced too cheap. Yeah, I

Caleb Agee 30:46
was gonna say in the early years, you’re scrappy, and that’s probably why you got that one to 5% Yeah, you kept it low, kept it tight,

Brandon Welch 30:52
the way you know where your store is located, the way your brand, you know, makes people feel the way your receptionist answers the phone, the way your bathroom smell, whatever is gonna turn some people off. Certain amount of people, up to a point they don’t care. The rest, you’re going to have to start selling in a different way to get a different customer. And I’ll use the example of there are some people that the Corvette is one of the most refined sports cars in the world right now. It on paper, it competes against even Ferraris and things that are three, four or five times the price. But there’s a certain buyer that doesn’t want a Corvette because it is an American made car, and they want that snooty, you know, German or, you know, luxury brand, and those people are silly. We I don’t know who would ever do that, but there’s, there’s just you got to sell a certain way and present and show up a certain way. And you have to understand you’re either going to have to break past a certain market share. You’re the going to have to expand different sales teams in your product to appeal to more people and change some things, or you’re gonna have to make a auxiliary brand around that. Yeah, my window, guys, there’s some people that just will not buy a vinyl window. You can tell them it’s the most efficient. You can tell them it’s the best for their money. You can tell them it looks the best last the longest, operates the smoothest. And somebody’s just going, No, I want wood.

Caleb Agee 32:20
I want wood. Yep, I know it. I know it’s an inferior product and costs a lot more.

Brandon Welch 32:27
Don’t, don’t care. But I can’t, I can’t sit around and eat caviar and tell my friends that I go, you know, plastic windows, right? Okay, yeah, so think about that, so that this is part of the reasonable, you know, expectations you’re setting, yeah, small to medium sized markets, this is going to happen much sooner. Bigger markets, it’s going to happen much later.

Caleb Agee 32:50
We have an example of a client we were just talking to this week that is an Internet service provider in rural in a rural part of Arkansas, actually they Hi Courtney. Hi Courtney. She’s listening. We know she is. Shout out to you. They were wise enough to say that they know. So you think about that adoption curve, you know, the early adopters all the way to the laggards. I’m usually a laggard. I think you’re an early adopter. We’re both ends of the scale here. Would

Brandon Welch 33:19
you say about my mama?

Caleb Agee 33:20
So but they’re they recognize that they’ve actually gotten through the beginning bulk and their new customer goals for next year are smaller than they were for this year. Yeah, because they acknowledge that the next they if they got 4000 this year, the next 4000 is going to take twice as much work to get, and they know it because they’ve, they have, they’re actually up in that 40% market saturation already in their area, and they have to go past that, and that’s going to be harder, which is brilliant. Yep,

Brandon Welch 33:53
it’s, it’s a it’s very astute, and it’s just the truth. It is the truth, right? Yep, it takes Apple tremendous amounts of effort to get the next 5% of iPhone, you know, market share versus Android, versus when they blazed the trail and got like 50% of the world in a very small amount of time, right? Yep,

Caleb Agee 34:13
so

Brandon Welch 34:15
and the tortoise and the hare. The tortoise always wins. The hare jumps up, runs himself out of energy, needs a nap, stops off and, you know, has all kinds of bad things happen to him because of speed and so I’m generally not a guy that just is pessimistic at ambition. I’m not saying curb your ambition, but I am saying timbre your energy down to

Caleb Agee 34:41
reasonable

Brandon Welch 34:43
slow, momentous, sustainable forces in your decision making and your all things involved. So maybe take that tortoise and the hare analogy and say, how does that apply? Am I the tortoise of the hare? ID and Randy? I know you’re listening. Burnout is a real thing. A. You start running fast, the faster you grow. And I’m not saying don’t, don’t grow with ambition. I’m sometimes you gotta ride that bullet, but burn out. I’ve been there, and that robs you of your next best move you have to take. The faster you grow against the average, the more expensive it will be. The faster you try to improve the result, the more expensive it will be. That’s okay at times. Just understand that expense is there,

Caleb Agee 35:29
and understand that you’re going to have to cough that up.

Brandon Welch 35:35
Most categories, last thing, most categories, when it comes to being reasonable, don’t have instant customer acquisition, unless you’re selling cheeseburgers or toilet paper or gasoline or something like that, or cups of coffee. It’s not what you did right now. It’s what you did 9180 days and maybe even three years ago. That continues to work for you. So ask yourself, in my category, you know, as it relates to the grand scheme of humanity, how many people are buying right now? Am I more like a cup of coffee, or am I more like a basket people buy once in a lifetime? I hate to say that’s that’s an awful example, but, you know, or am I more like, you know, estate planning services I might buy once or twice in my life, right?

Caleb Agee 36:21
So on a base level,

Brandon Welch 36:26
even when you double the money in a short amount of time, you may not see twice the result in the same period of time, because it takes that money time to mature. It’s going to produce the result over 18 months, maybe more, instead of like the next three, right? So think about that. Anything you would add about being reasonable?

Caleb Agee 36:43
Nope, just acknowledge it. Make sure you’re willing to invest at the rate that you want to grow. Yep. Okay, and more, maybe.

Brandon Welch 36:55
So let’s talk about taking that $680,000 we came up with earlier to reach this ten million goal. Let’s break that out into different media. What should I spend the money on? Now there are a lot of episodes that Nathan camera guy is going to link to about how to allocate your budget, about should you just be spending it on TV or radio or Google, or where it should go? But generally, there’s a relationship I want you to think about, and that is that the faster you get the business, the lower the quality. The customer is generally going to be people who don’t know who you are, or, for that matter, anybody in your category. They are going to use Google as a research tool. Yeah, and they’re going to look at you and five other goobers on the list and call the one who makes it the least amount of painful for them, which means is going to be cheaper, faster, or somehow guarantees something that you may or may not want to guarantee, when they already know who you are, when you’ve already connected to that human and ended up on their list. They’re not using Google as a research tool. They’re using it as a phone book. They’re typing in your name to the search engine. Yes, please. Isn’t that a beautiful thing? So

Caleb Agee 38:04
good? Hey, the camera guy, would you rather have a

Brandon Welch 38:12
customer here at Frank and Maven world headquarters that calls and says, I need a video done. I need it this Friday because I’ve got a commercial. I got to run for an event that’s coming up.

Caleb Agee 38:23
Or would you rather have somebody that says, Man, I’ve

Brandon Welch 38:26
been reading your books, I’ve been watching your podcast, and I just really like the way you said X, Y and Z, and it made it so clear for me. And you guys are so helpful. And would you guys have some time to meet with. Definitely the latter. Definitely the latter. Matter of fact, that’s generally the way we take business these days, people that think long term. And it’s not because it’s all about money or something like that, but it’s people that we know already want to buy in the way we sell. And so if you think about, I don’t care if you’re selling cars or you’re selling candy bars, or you’re selling, you know, attorney services, or you’re selling some home service, or whatever it is, or medical providing it is so much better and all things get more efficient when they’ve heard about you and not just heard about you, they’ve liked you and trusted you and built a relationship with you via your marketing long before that moment. And everybody, including Frank and Maven, has to say yes to a to a smaller, less ideal opportunity when it’s early on. But the longer you mature and the longer you’ve had time and resources and money and patience to invest in that tomorrow customer, the better everything is going to get, oh yeah, gonna get more efficient. It’s gonna get more, frankly, fun and rewarding and higher quality and

Caleb Agee 39:51
just a bigger impact, anything you would say about that. So I think what you’re saying, though, is that the ratio of your. Budget actually kind of depends on the life cycle of your business itself. So in the early years, I’ve seen mostly that you will have to and you will have to focus maybe more on today customers, yeah, because you need to pay the bills at the end of the month. Yes, you gotta, and there is a way to do that. Well, you gotta hit payroll. You gotta do all that, but at the same time, you should be sowing a small amount of seeds along the way. That’s that tomorrow. Customer, and then as that goes on, hopefully those seeds start growing. You see the fruit, the the result of those tomorrow customers, and you can maybe relax on, I wouldn’t say relax on your today, customer, but it becomes a smaller percentage of your marketing budget, yes, as time goes on. And

Brandon Welch 40:43
practically that relates to, are you trying to chase people and do lead generation today and get them to say yes right now? Or are you taking a little more time saying one day when you need us, we’re here and yeah, here’s the reasons you should buy us, and that would be done with more mass media. Yeah, if you’re a localized or regionalized business that’s you’re going to have a better luck with TV, radio, billboards and maybe some local print.

Caleb Agee 41:10
If you are a

Brandon Welch 41:12
online or transactional business that serves customers in a larger geography, but kind of a more specific interest base that that will have to be some sort of digital media, but you could, you can also target it in a way that’s not that’s building a brand and that like trust factor, not just direct response, call action. Yep, I’m not making a big bad wolf out of either one of those, but I am saying I’ve met with 1000s of business owners, and I’ve been behind the curtains and hundreds, if not 1000s, of businesses, and the thing that the entrepreneur actually wants, and the life that is rich and beautiful inside of business, is when people are buying you for the reasons you like to be selling. Yes, they value you for you, and the things you stand for, the values and vows that your product delivers and they show up willing to do it your way, which you know is the right way, and the way you want to do it because of your expertise. So we’ve we’ve been interviewing some folks on this podcast, and we are picking some of our favorites that have just been phenomenally successful, taking little tiny businesses and making them rich, awesome businesses. And that’s the commonality they have believed in that. So when it comes time to say budget allocation, by all means pay your bills, by all means feed your family, but with as much today transactional minded media and messaging that you, you know, have to do, but always be taking a little sliver, sliver of that. This guy that’s at 10 million right now, or wrote probably a little after $1 million in sales.

Caleb Agee 42:57
Yeah, had to,

Brandon Welch 43:02
or didn’t have to, but made the choice to say, You know what, I can survive off of the lifestyle and the security that this recurring set of customers that I’ve earned through today marketing has happened. I’m going to start maybe go backwards one step, seemingly, or take a little slower step to getting the next wave of customers, which is going to be a snowball, yeah, and he invested heavily in television and radio marketing, and now he lives, to be honest, these numbers are from his company, like, four or five years ago. Yeah, we it would be the same kind of math today, but he lives an incredible life now. We I actually can think of three or four guys that are just just like him,

Caleb Agee 43:47
but the one I’m thinking of and and gals, by the way, so

Brandon Welch 43:55
just think about that. Try to win the customers over longer before the finish line, as you start to expand, and I think you’ll have that result too every time I’ve seen that happen, that is the result that my friends get.

Caleb Agee 44:10
Last thing, relevance and repetition.

Brandon Welch 44:18
Are your ads as convincing as they can be, because, just like we talked about, maybe your market factors are different. You can improve the results by making your copy better, by being more empathetic, by being more entertaining, by being more sticky, by being more helpful, and you can make your ads the leverage factor on the return on your marketing so much better just by the words

Caleb Agee 44:42
you use. Yeah, yeah. We’ve, we’ve done a few episodes on on your message overall, and even offering them a better, reasonable next step. So we talked about, like, a get a price calculator. Sometimes that’s what people want. Yep, they just don’t even, I don’t even have a fathom, whether this is $1,000 or 10. $1,000 we

Brandon Welch 45:00
talked about this in chapter nine of the book. Yeah, we have a we have a set of clients that we increased results by 400% by changing three words on a website. Yeah, you’ll have to read chapter nine and see what that’s all about. But it’s like enterprise calculator Caleb’s talking about, yes, repetition is the other factor. So relevance make get more in line with what are the needs, pains, hopes and fears the person you’re trying to win over? Yeah. How does your product satisfy that? And what’s the reasonable Next Step? Focus, focus, focus on that.

Caleb Agee 45:29
But repetition, there’s

Brandon Welch 45:31
a very, very, very, very, very, very small percentage of people probably buying what you do today, unless your cheeseburgers or toilet paper or coffee, right? Yep. So it takes extra exposures to build that snowball so that one day they’ve heard of you and thought of you and been face to face with who you are 194 times. And when they go, oh, shoot, I need shingles, they go, boom,

Caleb Agee 45:58
call on Joey, right. Yep, that’s it.

Brandon Welch 46:03
We had somebody reach out to us a couple weeks ago, and they were like, radio doesn’t work. And we’re like, oh, really, we’ve made millions of dollars with radio. Tell us. Tell us what you did. Well, right? In two weeks, and

Caleb Agee 46:14
you get a single phone call, it’s for, like, some medical service, and that, unfortunately, that’s the

Brandon Welch 46:22
the person who brought her to radio perpetuated this false reality, probably just to get the sale meet the sales goal. And, yeah, you know, God bless them, because they’ve got to eat too. But rather than create reasonable expectations, it takes repetition. It does. It takes repetition. So we merged sections four and five there, but we went through the cost of a new customer. So getting real about cost customer acquisition, we went through assessing the headwinds using that kind of art versus science. We went through, is my plan reasonable? Went through choosing different media, and then we went through relevance, repetition, and thinking about the long term factors of business growth, that it’s not just do something today and get something today. The better result is probably invest court, build a relationship with a customer so that there’s a bunch and bunch a bunch of increasing amount of customers coming to you long term. Yeah, yeah. What have I left out in this hour and 80 minute episode? Oh, my goodness,

Caleb Agee 47:33
no. Just plant those seeds. As soon as you can set aside, set aside a reasonable we could talk to you about what that would be. It really depends on where you are, what you’re trying to do. But if you can set aside that tomorrow, money and and not expect to see it come back for six months, or maybe 12 months, searching your name instead of your competitors, you will watch it pay off. It just it’s not something you can measure directly on a spreadsheet. It’s not something you can say, put this in, got customer out. You will feel it though, I promise you, I’m

Brandon Welch 48:05
thinking of three examples. One is that a gentleman did this in three years, and he was growing four times faster than he’d ever grown in 10 years. Wow. Thinking of another one who’s actually way more retail oriented, and it took them

Caleb Agee 48:23
50 years to build a ten million company,

Brandon Welch 48:29
maybe just slightly less than that, in the three years since they’re at

Caleb Agee 48:34
13, 14 million awesome by

Brandon Welch 48:39
investing on that tomorrow customer, let’s

Caleb Agee 48:41
think about this is unusual circumstance, but Greg, our buddy, Greg, Hey, Greg is seeing a record year this year, and he started this year kind of not usually what we promise. We usually say to wait, but there are circumstances where it also just shows up. He started in January, before his season started, and home improvement guy, he’s an Home Improvement and he got the those seeds planted, and he was able to see a big harvest even before the he’s also

Brandon Welch 49:09
way more likable than most people in his category, and some people see him on TV and, well, his wife, let’s be honest. They’re both on the commercials, yeah, um, kind of like Randy and D. They’re our next Randy and D. Um, last example,

Unknown Speaker 49:21
we had a client

Brandon Welch 49:24
for various circumstances. Some of this isn’t their fault. Actually, all of it’s not their fault, but they had to make some shifts operationally. And they took what they took a really well branded company that had been building this snowball we’re talking about, and they were spending about $150,000 in broadcast to do that, TV and radio, and they had to pull out this year, and had about a $600,000 loss in their business.

Caleb Agee 49:58
Moreover, I.

Brandon Welch 50:01
It took six months for them to see that, because they were coasting on the result they built, which actually makes the point even greater, but it’s harder for their salespeople to close. They’ve had some losses in efficiency and online media. So people Google. People aren’t googling their name. Yeah, people are. They’re back to, like, choosing them against, you know, they’re seven or eight competitors on the list.

Caleb Agee 50:27
And so

Brandon Welch 50:29
guys, every single time when you’re putting those seeds in the ground, try to think long term. Try to think that three to five years into your strategy, but make it a reasonable science based start to your budgeting. And yeah, we’ve done a lot of episodes on planning for 2024 I hope they’re helping you. Gonna throw this out there. We have a couple of slots in January. We’re booked up for the rest of the year. We have a couple of slots in January where, if you want to bring your company in and have us help you plan out a year for success, and, more importantly, a three, five and 10 year success plan for your business, send us an email to Maven Monday at frankon, maven.com Megan will follow up with you. Kind of tell you what that all looks like. But if you’re wanting to grow and you’re going, I want my life to be better and more enriching, and I want my culture, and I want my people to perform better, and I want work to be fun. A lot of it starts with this values based methodical marketing that we’re talking about, and we would love to talk to you more about that. So thanks so much for listening. If you enjoyed this, please hit that subscribe button. Please forward this to all your friends who you might be able to help with this information and send us your questions to Maven Monday at Frank and maven.com We’ll be back here every Monday answering your real life marketing advertising questions because marketers who can’t teach you Why are just fancy. Why have a great week.