How E-commerce Brands Balance Top Line Revenue Growth vs Shrinking Profitability

Video Transcription

Thank you very much for having me here, everybody. I appreciate you taking your time to have me come here and share some knowledge with you guys. I want this to be interactive.

So throughout the process, I’ll be going over different slides. But as you have questions, feel free to just jump in and we’ll try to keep this interactive at the end, and then we’re gonna have enough time for questions at the end as well.

So My company is SimplyStack, and we’ve been around for fifteen years here in South Florida. And we do digital marketing for local businesses.

So we basically help companies grow their revenue while trying to give a close eye on reducing their costs. At the same time. So we are we’re not just trying to scale your business, but have you losing money. Right?

We’re trying to make sure that the way that we help companies grow their business is profitable, which is becoming more and more of a challenge these days, which is why I thought the topic of customer acquisition cost is very important.

I think that’s about it for me. I’d love to hear a little bit about each of you and we’ll have business year end. Alright. {Customer details removed}

Thanks everybody for sharing. Alright. So, we’re gonna jump into this real quick here.

Again, so we’re we want to try to keep this interactive. Right? So, I can learn from as well as you learn from each. So no matter what type of business you’re in, you you care about customer acquisition costs or CHC, because you wanna be profitable. And the more money that it costs you to acquire a customer, the less profitable you’re gonna be. Right? You wanna acquire your new customer’s as little as possible.

So this concept of CAC is super important. And if any of you watch Shark Tank, you’ll know that mister wonderful. One of his first questions that he always asks is what are your customer acquisition costs?

Right? So he asks that every night on TV to every business owner that comes through. So that’s his number one question that he asked more than any other question. Okay. So, it’s it’s that important to understand and what the customer access cost really is.

So I just got a quick rundown of what everyone’s business is, so we don’t have to talk about commerce.

So how many of you actually with every show of hands, how many of you actually knew what customer acquisition costs were?

Okay. It.

Who knows how to calculate it, what the formula is? And then who is actively tracking it as a key performance indicator for their business. Okay? So that’s about right.

Very few people actually track CAC as a key its indicator that drives the health of their business. Good news is, good news and bad news. Bad news is we’re about to look at the formula. For how to calculate CAC.

Good news is it’s one of the easiest formulas you’ve ever seen. So let’s not be afraid of the math here.

So, again, the definition is the cost to acquire a new customer to your business.

Now, sometimes people confuse that with what it costs to make us sale, which is different. Because for existing customers, it’s usually much cheaper to have them buy you the net time than it is to acquire a new customer to buy for the first time. So that’s why this metric of acquiring a new customer for first time, why that cost is so critical.

And the formula is actually reasonable. It’s your total costs of sales and marketing, divide by the number of new customers that were acquired.

So we’re gonna take a look at both the neumerator and the denominator here. A little bit more detail because there are some nuances.

So for the total cost of sales in market Right?

The easiest way that most small businesses measure that is they only track the amount that you spend on your Google ads or your Facebook ads. Right? So your direct ad spending. That’s what they usually use within a total cost of marketing and sales.

It’s a shortcut, but it’s very practical.

And the good thing about using that is is that you can get that directly from the ad platform, like Google or Facebook, Instagram, TikTok, wherever you’re actually paying for the ads, it will show you what that amount is that you’re spending.

So it’s very easy for anyone in the marketing team to actually get that data themselves. They don’t have to go and talk to accounting for other types of data.

Now for the more advanced people, they’re actually gonna take a few more things into account for that cost.

So that’s gonna include all the different sales corporate costs, not just the add costs.

As an example, it’s gonna have the ad costs, and it’s gonna have the salary of all the team members that are involved with sales and marketing. So that includes your sales team if they’re paid on commission, if they’re outsourced right, all those costs, all the software that’s being used to generate these leads and that the sales team is using.

If you’re using any third party companies or contractors, all those costs that are used to generate a sale.

You’re gonna add all those together. And that’s gonna be your total cost of sales and marketing. So this is much more accurate than the shortcut method, which is just the ad cost.

But a lot of times, in more midsize and larger companies, the marketing team doesn’t really have access to all these things.

Right? They don’t know those costs. Because the owner of the business doesn’t really share all the cost of everyone’s salaries and all those things. Right? So it gets a little trick there. Right?

But the more advanced you get and the larger your business is, the more you should track every piece of expense that you have.

So the final piece of this equation is now the denominator here, which is how do we calculate the number of new customer that we acquired.

So if you have an e commerce store, a shopping cart store, the new customer is sometimes called a first time purchaser.

So that’s available. If you’re on Shopify or Magento, Big Commerce, Woocommerce. These are all just different shopping cart platforms that are popular.

You can also get this data from Google Analytics, which is what most companies to track the website data.

You’ll have to just use a new customer segment so that when you look at the actual number of transactions or number of orders that are only looking at the new customers who place those orders over that certain period of time.

But it is much more accurate to actually use the data from the shopping platform itself if you can.

One other thing I wanna when here. Talking about math, since we only have a numerator and a denominator, you want your customer decision cost to be as low is possible.

Right? That’s less money that you have to spend. So, that means that you want your denominator to be as high as possible, and the numerator to be as low as possible.

Right. So this is something that that ratio, right, of what which number needs to be big and which number needs to be small. That’s something that as the business owner, you just keep that in your mind you always want to get as many new customers as possible for the least cost.

Okay?

For lead generation companies, right, for duct cleaning and all that kind of stuff.

Your CRM platform will usually have the data, such as how many new customers were acquired for that time period. So those are those CRMs are things like Salesforce, Pipe Drive, Hubspot. Those are some different tools people use for their CRMs in a lead generation type business.

And then for people with brick and mortar stores, their point of sale system has that information a lot of times, new customer registrations for loyalty programs, that’s another way to kind of get at some of those numbers as well.

Any questions so far? What kind of on the math?

No. Nope. I’m Right. So why why do we care? Right? Why is CAC so important?

If you guys care about making money, you need to care about your CDC. It’s kind of the most basic thing.

The profitability that comes with having a low cost of acquisition for a customer, allows the business to scale, right, without having to go into

So the more probable you are, fairly, the easier the business can scale. Right? So you need the lowest possible, because it helps predict how fast the company is gonna be able to grow.

Also important is your resource allocation.

Right? So a lot of times you guys you get new customers from different channels. You spend some money on Google.

You may have partners that refer you business, you pay them commission. You may still be putting ads in local magazines or newspapers. Right?

What you actually can understand what your acquisition cost is per each channel separately, then you’re able to make better decisions with how you’re spending your advertising dollars.

Right? So breaking that up on a channel by channel basis is really critical to understanding where you’re gonna spend your money. Alright.

It’s also a reality check.

So when you talk to other people and you’re same business.

When you find out what their acquisition cost is compared to yours, that will give you a feeling.

And maybe open up your eyes and say, you know what, maybe my pricing is not in line with competition, because my competitor is acquiring customers much cheaper than I am.

Okay?

For those of you looking to raise money or if you have investors, they definitely scrutinize this just the way mister Wonderful does on Shark Tank.

So it’s like that key indicator, of company health. And the reason why Mr. Wonderful asked that question is that in one simple metric.

It summarizes all of your marketing efforts to see how efficient your marketing is. So instead of asking about your pay to have return on ads spend, your cost per acquisition, your your cost per order, all these metrics that that ads people have in their brains, this one key metric of acquisition cost summarizes all that together.

In a way that you can get just a feel for how profitable the business is doing. So it’s super crucial.

Alright. So the reason why a lot of people are talking about this these days is that there’s a lot of pain out there in the place.

There’s increased competition in the online space these days.

COVID is actually pushed a lot of brands that used to sell more directly through retail stores. They’re now pushing more sales through the Internet online. So a couple edition is definitely higher than it was, forgetting about Amazon, because they’re they’re the team anyway.

Costs on Facebook, Google and TikTok, been skyrocketing over the last year. So I’m seeing customers that are paying two to three times more to acquire the same customer than they paid last year.

So that’s bad. Right? As your costs go up to a client customer, everything else leads to lower profits.

Limits your ability to grow your business. Right?

And then there’s macroeconomic uncertainty, going along right now, the ones worried about a recession. About the war in Europe.

So that’s leading people to be more conservative with spending their money. So they’re not spending their money that easily. So it’s harder to convert someone to actually buy. So that raises your cost to acquire customers because they’re they’re more hesitant to buy.

So now we get into some solutions.

Yeah. Before we get some socials, right, man.

What about my businesses with long term deals and with the big checks? How we should write in a proper way, how we should calculate CAC things? So for example, like real estate business. Right? Yep. They have like, the census for their office.

If it’s looking about, like, a big check like one million dollar, two million five million dollars, you know, customer makes his decision in the long term, like, it it it didn’t make a decision for three five months, and whatever.

So how we should calculate it in the proper way in this task? Some business. Yeah. I think you have to track every dollar that is spent on everything. Trying to get that person to buy for the first time.

So it’s a long term process. Right? So, you know, your commission is gonna be three percent or whatever. Mhmm.

Right? So you’re gonna have advertising costs to to how they came in the door and called you the first time. And then you you’re gonna have the cost of employee right, the agents that are gonna be taking their time. Remember, that’s the time that the agent is gonna be spending is allocated across many, many different customers.

So I’m not quite sure in that business how you would allocate one person’s hours for when that person they closed our property.

Okay. But not their entire salary, not the full commission. Right? There’s you you have to allocate it proportionally to to acquiring each customer separately.

Mhmm.

And also, we should calculate, like, time spent it on him. I mean, the reminders and all the all that allow me to in the evenings. Yep. I got you.

Yep. Far away. Yep. And that’s why a lot of people don’t track everything. That’s why they they they figure out a good shortcut that works for them, a round number that they calculate easily.

And that they know it’s like an average across their internal business. Right? So that way, you keep it simple, right? Because you don’t wanna you don’t wanna complicate your lot to wanna keep everything as simple as possible, but you wanna still use numbers that are accurate enough so that you can make good decisions.

And the simple way to calculate it is just like to check your marketing expenses this?

Check how many clients did you attract, like, for this month? Not attract. Close.

Sort of both. And this is the single way of the population this is it. Yep. Absolutely.

Anybody else? Okay.

Alright. So how do we lower the acquisition costs for the business? There’s five steps outlined here. The first one is this fancy word that we call attribution.

Okay? What that really means is that we have to make sure that every sale is trackable to the correct source that it came in from.

So let’s use a real world example that all of us are gonna be able to lead to. You’re gonna you’re shopping, you’re looking for our shoes. Right?

You’re gonna go you’re gonna probably do a Google search. You’re gonna click on an ad, go to the company’s website. They may have already recognized you from a previous purchase. So in an hour, if you get an email or an SMS message, send hey, we saw you were looking at these new nineties.

Click here to come back and check out. Right? To go back to your shopping cart You might do that, but you still didn’t buy it. You might wait a day, two days, and then you just go right to your browser and type in the website directly, and then buy in the end.

So that’s pretty complicated. Right? You used your computer, you used your phone, you might have used a tablet or your kid’s tablet, and then you finally finished the purchase, let’s say on the phone again. Right. So the question is, who should take credit for that sale?

Should it be the initial ad that you’ve been clicked on from Google?

Should it be the company that is managing the SMS when they retargeted you when you abandoned your shopping cart the first time.

Right? Who’s who gets credit?

It’s a hard decision. Right? So the problem that makes it worse is that all these guys all these different platforms are all taking credit.

So the SMS company, who manages that, they’re gonna say that they get credit for that sale, because you’ve got that text message, and then you finally bought something later.

Google’s gonna take credit for it because you’ve clicked on add for you later what. Right?

If you got an email from them, that service is gonna take credit. So everybody’s taking credit for the same sale. So your numbers never match up with your analytics. Never.

The number of transactions never match. Because everyone’s trying to take credit So by putting in place a piece of software, that’s called attribution software.

What it does is it establishes what we call a source of truth which means it’s gonna track every need to sit to your site, and it’s gonna determine what the path was for every customer

And then at that point, you have one place to look so that you know that for every sale, you can track it back to the original place it came from.

And the reason why that’s so important is because you need to know where you’re gonna spend your marketing budget on. Should you spend more money on Google ads, or should you spend more money on the SMS? And you’ll be targeting in the park abandonment.

Right? You need to know truly where that customer came from, not the fact that he touched four different ways to get to you. But what was the initial way that you’ve got that customer?

Okay? And that’s impossible to do today. That’s that’s marketing manager’s biggest pain in the ass right now is figuring out where to allocate their marketing budgets. They don’t know which channel related to the actual sales. Good. What kind of platform are usually used for this exercise? So, right here with these companies.

So if you’re A few of these companies here are specific to the Shopify platform, which is an e commerce platform. But even if you’re not doing e commerce, You just have a regular website.

Northbeam is a company that does that, and Wicked Reports. Hyros, as well.

So, three of these are not specific to Shopify.

So, this software helps solve that problem.

Problem is, make sure I can track every sale to its original source.

So once I can do that, still add. Once I can do that, I can now apply this to my paid ads.

So there’s only two steps that are involved Okay? The first step is you look at all your ads, and you can now see which ads are actually generating sales and which ones are not. And you’re not trusting Facebook and you’re not trusting Google because they’re taking credit for everything. So you don’t look at their dashboard because they’ve been telling you I’ve been generating all the sales.

I’ve been generating all the sales. Right? But that’s not the truth. You now have a new source of truth that tells you truly where the customer came from.

So using that source of truth, you can now look at the ads on your platform on Google and say, okay, I can see the ones that I’ve been spending way too much money on that have not been converted.

You take that budget away from you take that budget away from there, and you move that budget over to the ads that are your top performing ads.

So these two very simple steps can lead to huge increases in profitability of your paid ads channels.

Okay? I’ve seen this time and time again.

It’s amazing. It sounds very simple, and it is but it’s a brand new thing now. There’s all ability to track all the customers and the touch points and the devices so that you can have that attribution risk.

The one other thing, and this is kind of an advanced tactic, is first of all, how many of you have heard of the iOS fourteen problem.

Anybody? Nope.

Okay. So about a year and a half ago, Apple changed the settings in their browsers so that for customer privacy, they are blocking third party pixels, which in English means They are not allowing the ad platforms to get all the data that they used to get. So Facebook is a perfect exam Right? Facebook has made all of its money on the ability to say, Matt bought a pair of Nike shoes.

Now Since Facebook knows so much about me and everybody else in Facebook, because it tracks people on the web, it can find other people for me to advertise to who want to buy Nike choose because it knows me and it knows other people like me.

All of that data, not all of it.

Thirty percent of that data is now blocked from Facebook. So now Facebook is, like, blindly saying, you know, here’s a guy, he likes Nike I don’t know if he does anymore because I don’t know him. His data anymore. Right?

So it’s a huge, huge problem. And IOS is what is the name of the software Apple devices. Analysts. So the iOS fourteen release is what did that.

And so all the marketers are now, you know, going blindly trying to figure out how do I get all of this data from my browser back to the ad platform so it can find the right audience for me. It used to.

So good news is there are pieces of software out there now that have a workaround around around iOS fourteen, which is a hundred percent legal, hundred percent legitimate.

I have three of them for you there.

Stape.io I’m sorry. Two of them. Stape.io is one solution and then Elevar is another solution.

Okay? So good news is you now can get all that data back and your performance on your paid eye is gonna be much better taking these simple three steps.

Okay.

Any questions on that?

We can talk about that probably for like an hour of specifics, but Worked your top as to promote your business in I mean, like, baseball, congrats I have a slide to answer your yourself question. Okay. Gotcha.

Good news is compared to other things like SEO, which is more of a long term strategy results.

Since this is paid ads, you get results very quickly for making these changes.

Right. Usually, within sixty days, you’ll actually see those revenue numbers change your costs come down. Because you spend a dollar, you make a dollar. Right? It happens right away. There’s no there’s no pause.

So to answer a question about, where do you spend your money? Great question. Just on my slides. Yeah.

The thing that I find most interesting about this slide is what I have highlighted in Google and meta, which is Facebook and Instagram. Those two together combined for eighty eight dollars out of every one hundred dollars spent on ads.

Eighty eight percent of ad spend is going to either Google or Meta.

Okay. And then below that, you can see broken out, Meta gets sixty two percent. So that’s Facebook and Instagram combined. You get sixty two percent Google gets twenty three percent TikTok is growing, but it’s still only at four percent YouTube is growing. It’s only at three percent and then the rest are just, like, almost nothing.

Okay. So that is where the ad dollars are going. So now we’re at step three.

The first step was that we put in place a new piece of software so that we can track our attribution. So we know which marketing channel led to the sale.

Step two is we applied that to our paid ads Step three now is that we’re gonna grow revenue on the non paid marketing channels.

Those are also called organic channels.

Okay. So, what are organic marketing channels?

There, SEO, which means search engine optimization, And that means you go to Google, you type in Michael Jordan Nikes. And then you get the search results that come up and organic results are the ones that are not paid. So everyone wants to rank number one on Google. That’s called SEO. Okay.

So increased revenue from SEO, from email and SMS efforts, from referral traffic. Referral traffic is when somebody is on someone else’s website, click something that comes to your site. So you may have partners, you may have distributors, You may have manufacturers, you may have affiliates.

Right? They’re all coming from a different channel back to your site.

Okay?

There’s direct traffic, which means your brand.

So if someone already knows your brand, right?

Elite real estate. They’re going to type that in directly into the URL.

They’re not searching for help Google. They’re just going right to the URL, or they have it bookmarked, in their bookmarks, Right? That’s called direct traffic.

And that’s really the more you work on your branding for your business, the more people will note in their head, and they’ll just go right to your Then finally, probably the biggest one here is social media traffic.

So Facebook, TikTok, Instagram, all that stuff.

That is all these are all much cheaper ways to acquire customers. Compared to paid ads.

So it made sense that you focus your energy.

Yes on paid ads, because, again, you spend today to hit customers today as an immediate These take longer, but these are much, much cheaper to acquire customers. Because you’re not constantly — you don’t have to pay a fixed add cost to do these things.

Okay. So the good news is, again, it makes you less dependent on paid ads, and I just told you how much, you know, paid ads are rising two to three times what they were a year ago.

Right? So it gets you less dependent on they can take you to that draw up paid ads to get your clients.

The other interesting thing here is for you guys as business owners, one day you may want to sell your business, right, or acquire other businesses. So, the value of your business, right, the valuation for your business, what’s it worth?

These organic channels are assets to your business, and they’re treated that way by investors.

So I have An example here like McDonald’s.

McDonald’s was brilliant, because what they did is when they started doing their franchise, they purchased the real estate.

At every location.

And then they put the McDonald’s on it, and then they get the revenue from the store. Right? But by owning the real estate of all their stores, the value of their business of their assets has gone up enormously over time.

Right? So similar to what McDonald’s does is laying that foundation. Right, of owning the real estate.

All these channels here, SEO, the referral traffic, which is, like, and the direct shot of your brand, your social media or followings. These are all your assets.

Right? You own these. You don’t have to pay for these. So the more you can grow these and the more revenue that these channels could bring you, the more your company is actually going to be worth when you go to sell.

Alright. So now, this one is a little bit more nuanced. The step four is increasing customer lifetime value.

So the definition of customer lifetime value is one metric that represents the net profit from each customer that you have over the duration of the relationship you have with them. For your business.

So let’s say that a typical customer of yours stays with you for two years, right? You would simply take the average amount of each order is the AOV, average order value. Multiply that times the number of times they purchase over that two years.

Multiply that times in two years. Okay? This gives you the value of each customer over the life of that customer.

Okay? This is super critical, because it’s a long term outlook, but this is where the profitability really comes into play.

Okay?

Let me show you real quickly. Examples will make more sense to you. So how do you increase this lifetime value driven customer. One way is to increase the value of your actual product or your service.

Right? How you provide a better product or value. There’s more chance that that customer will come back and buy again from you. Right.

Customer service, something that a lot of people just ignore, ship it over to India, or whatever. Huge mistake.

Because there are studies after studies that show that even an angry customer is so pissed off. If your customer service can make that person happy, they buy more over time than a regular customer who has never pissed off at you.

Right. So customer service is a huge way to increase a lifetime amount of of one of your customers’ purchases.

Loyalty programs, while familiar with that, you buy you go to whatever, you know, some store, you buy, and then you get points. Over time, you can buy merchandise, get more points. These programs are good ways to have people stay with your brand over time, right, and spend more money.

Upselling and cross selling, that’s saying, okay, I’m going to come and I’m going to clean your air ducts. But I’m also going to replace the actual vents here with the new modern vents, right? And I’m also gonna do other types of cleaning for you. Right?

You’re cross selling them, not for what they originally want to buy, but something that’s related to it. Okay. That’s a cross sell or an up sell.

So, those are some good examples of how to increase that. All right. The final thing that we’re going to talk about here, then we’re all done.

Is this ratio of your customer lifetime value that we just talked about, versus your customer acquisition cost. Okay.

So it basically tells us that if your customer lifetime value is more than you’re done across to acquire that customer, right, that you’re in good shape.

But if it’s reversed, where your customer acquisition cost is larger than the amount of money that you’re getting from that customer over the course of their life. Then you’re really matching.

Right? So this ratio is a very common ratio.

And for industry standards, if you’re at like a three three to one, right, customer lifetime value to customer answers cost three to one. That means you’re doing very well.

So the only reason that I included this slide is that this ratio is three ratio, three to one is another one of these commonly asked questions.

Right, within the industry to see the health of your business compared to your competitors.

All right. How much money am I getting from every client compared to what it costs me to wire that client.

So the last one, which is something that a lot of people don’t even think about.

Is you have your own website. That’s where you’re you join your advertising. That’s where you get your customers from. But there’s lots of opportunities that sell on additional platforms.

Right? So if you have a product, and this is true for services as well, there’s other other platforms that you could be selling.

You can sell on Amazon. You can sell on eBay, Walmart, Rakuten, Etsy, for creating your own homemade types of things. You can also sell Etsy.

For Latin America, there’s Mercado Libre, which is like to be eBay of Latin America.

Poshmark is for clothing. So if you have a clothing line, you can actually take your inventory and push it to Poshmark and seal it on there.

So one thing to know about that is that these are kind of automated data feed solutions. So you already have all your products defined for your store.

Then you need a tool or a service that’s gonna spit those two, those products to each of those different platforms.

And then you have to make sure that that tool accepts all the orders from eBay, Amazon, Walmart, and pulls it back into your system so you know what said what had sold, how your inventory has changed, all those kind of things.

So it’s definitely a little more complex, but you can literally triple quadruple your revenue, like, just by adding new platforms. And you don’t pay marketing spend on those. You don’t you don’t pay to advertise for things on Walmart or eBay.

They have their own audiences over. So it’s a great way to get more visibility to your products and services.

The downfall is there is more complexity, and you do need more support staff So that’s just what you’re gonna get. The bad thing is when you sell products, on any of these other platforms, you don’t own those customers.

You don’t get their emails, their phone numbers. So you can’t market to them outside of their platform.

And that sucks, because a lot of companies get into the case where they start on Amazon, And they start making millions of dollars on Amazon.

But they realize they’re paying Amazon twenty percent of every sale for all their fees and their dropshipping with their 3PL, And they want to try to bring all those customers to their own website because they’re not going to pay twenty percent anymore.

Problem is Amazon thought of that a long time ago, and they do not provide you with all the emails that all these people will purchase in the past.

So they own those customers, not you. Or if you will have some tool that can help you to redirect the customer from Amazon or other marketplace.

I like how you think. But it explicitly goes against their guidelines. And if they catch you. When they catch you doing that, they will remove you from the other side.

Another thing that a lot of people do is when there’s a problem with shipping, the customer will call you directly, your business directly, not Amazon. So you can get their contact info, even though they bought from Amazon because they’re complaining to you that there’s a problem.

But again, if you use that data, and then, then that customer later goes back to Amazon with an email, say, hey, and they know that you contacted them, Again, you’re gonna get kicked off.

They’re very, very strict about that.

So I think that’s all I’ve got.

Q&A

Love to hear any other questions, conversations.

Would you tell us a little bit more about Facebook ads?

Sure.

So, Facebook as now, Facebook or Meta is the parent company of Facebook and Instagram.

They have been moving to try and automate your ads compared to what you used to be able to do. So they’re actually taking power away from you. And they’re saying that their AI is smarter and can do more things than you could ever do to acquire customers. So what that means is they’re going to take your assets, your images, your videos, and they’re gonna try and decide who to show them And on what platform, on the newsreel, on the main feed, on Instagram, right, all those they’re gonna decide the best place to show your ads to the right people at the right time.

So while that becomes easier for you, it also makes It takes away your ability to understand what’s really happened, because their reporting doesn’t break down the same level of detail that you used to be able to have when you did it manually yourself.

So they’re basically saying trust us with your budget. You create your ad you create your video or the picture that you’re gonna advertise with, we’ll take care of everything else.

Maybe that was great a year and a half ago. But again, like I told you with the iOS fourteen update where all that data is being blocked from being sent back to them. Now they can no longer figure out who all those right audiences are to show your attitude.

So that’s why people are seeing super high rising costs because they’re not acquiring customers as efficiently as they work.

I expert in Amazon sales, for example, such that you just mentioned that all the customers that you attract from have as of for example.

And y’all have also mentioned that if you will bring up some system to attract customers to your website for apple after you solve talking once. Well, then after that, you’re gonna, you know, shoot it down.

If if the mechanism of the tracking exam, is actually physical. I mean, I have products, these glasses in the box. I thought this dropship might buy it. But there inside the boundaries, also, I don’t know, a pure code that is right for them to become. I don’t know, a member of my sunglasses that or whatever.

And they have just to register on my website. And, yes, I don’t know, we will pay for and off or something. Yep. Is it like one of those systems that Amazon is humming for — Yeah.

— eventually. Yep. Update Because Amazon only finds out if one of these customers contacts them later with a complaint about you.

That’s what’s gonna lead the customer. That’s gonna lead to Amazon getting that email from the customer. Okay. And Amazon puts one and one together.

Oh, they’re doing something to try and steal to get these customers information to it. And also, I mean, it isn’t, if you can down the other I may be the angry customer, and I may complain to, you know, someone’s the competitors shop.

Probably they actually find out that’s not a scam. They give you a warning. They give you time. So they notify you.

And they show you who complained and all that. Okay. So if it’s just one, two or three over time from the same source, it’s like anything else, like people always ask me with Google. What’s to stop my competitor, you know, from kicking on my head a thousand times.

That’s right. Another option. If I bring up an application, and that is somehow connected to my body. Even, you know, not directly, but there’s nothing to connect, you know, to to sunglasses, but it may be application that helps you to, I don’t know, measure choose something else and actually to use that application they have to register again.

I don’t think there’s something worse than waiting for. I mean, if you buy a product and product, but why isn’t that location or offers you on — Yeah. — then why would I complain?

Because Amazon acquired that custom not you. They paid whatever their cost is to do their marketing. I mean, I just think from the point of a customer if I get a product — Yeah. — and there is a, I don’t know, pure code application as to this product, why would I complain to Amazon like, oh, these guys are bad.

They are using that application. Yeah. I don’t think this will actually go this way. First of all, people are crazy.

Yeah. That’s It’s another that’s another question. There’s some there’s some you’d be amazed with customers complain about. Right?

Even when there’s no reason to go right. That’s just the way life is. So, take the worst case scenario and use that as your as your baseline. Alright.

A network.

But out in Amazon, no, is there a company that’s considered direct plans. Or it’s like I need to come to the company and order something that I for example, I’ve seen them in the company now. And then when next time I purchased Yeah. I I don’t know all the details. I just know that they have they have very strict policies that are very clear that you cannot include pamphlets, do any kind of QR codes, contact these customers after they made a purchase from the Amazon store. If you use any tactics to do that, then they find out they can close down your store.

So, you know, everyone tries to outsmart, you know, like Google. Right? Oh, I can outsmart Google. I can trip them.

Right? Same thing with Amazon. Everyone’s tried it. Trust me. Yeah. Sure. It will let it be.

It’s a risk for your business. Right? And if you’re going to if you’re gonna rely on this kind of a tactic to grow your business, then it’s like you’re, you know, you’re on very shaky ground.

So I don’t recommend trying to make these guys.

Customers.

And do you can see there is still no bills as organic freight. I guess you don’t pay for it. Right? Yeah. We just have a lot of views. Yes. But we I don’t know if you’re excited to class.

Oh, why not? Why aren’t they your targeted client? People who follow you or your target client. Right?

Yes. But the how the VIN’s works and Deepgram as well. It’s just Just read that would read to. I’ll be honest with some reason.

Yeah. So what we find what we find customers doing is they’re actually spending money on influencer deals.

So they’re paying an influencer to promote their product or service.

And they get much more visibility than than the individual company are getting for it. I don’t do much with Instagram meals to be honest with you. Myself, I’ll not like a day to day, you know, paid ads, manage I can get back to you with details on it. I can actually, you know, go ahead and answer that.

Yes. So with reals, the good thing about it is it’s free. So you’re getting more people. Your job is to be somewhat polarizing.

So when you get in front of the right person, they go, hey, I like that.

I wanna follow you where it’s on purchase, or hey, that’s not me. But and you can really, obviously, the first one, but it’s basically three hours. So your order job is to connect with them so they go to your page, and they might not by right away.

But it’s the same as you’re saying. It’s starting the process of they saw you, maybe then get an ad for you. They’ve already been fine. They’re like, yeah. I’ve seen you on rails before that’s amazing. So no. You can’t target.

But the good thing also with social is the algorithm is learning what you already. So it will start giving me more of that. So you start living across the social.

Thank you. Ask it.

How do you build cell phones?

How do you build a what sells sales funnel.

Okay. So there are a number of software websites that you can do it from. Number one, biggest one is about click funnels.

So click funnels dot com.

They have pre made funnels for you that you can just modify and customize for what you need.

And Remember that the funnel is You have to get people to the funnel. So your ad usually. Right? Has to be has to have the same message as what you’re going to be presenting to them when click on the head and land on that first page of your funnel.

Right? So if you’re advertising Right? Mhmm. It’s like at length.

And length?

Like, but add that new page. Yes, brand landing page. Yeah.

Yeah. So the funnel, the software is just already meant to collect their information Right? To get more information, and then you would have a video of it on the next one, and it tracks all the steps of the funnel for you.

It’s pretty cheap. I think it’s like ninety nine bucks a month.

It’s like unlimited. Okay. Thank you.

Yep.

For real spirits, you mentioned in that I have about sixty two percent for all all of the lines. What is the Facebook and the Instagram doesn’t work for one type of the business? Because, for example, a lot of people lakes on the pad — Yeah. — but don’t, like, from south side of the licks — Yeah.

— goes, like, to two possible leads maybe in end of the day, one customer — Yeah. — which is like not making sense to spend on that source with the the app.

What is your recommendation to do on that? Because it’s have to be the hot client — Yeah. — looking for for that this right now. It’s not like an answer at all.

I will say that maybe in the future, I will do that. Yeah. You know, so what is your recommendation for this type of the speech So he brings up a very important point. On when you’re on Instagram or TikTok and or Facebook, you are not actively searching for something.

Right? You’re just doing your own thing, and then you’re seeing an ad appear for you. That’s very different than when you go to Google. And you actually search for something.

That means you have an intent to have a need at that moment in time.

So every business space is that as you. Right? Your return on your ad spend is always gonna be better on Google or b. Because they have a direct need at the moment in time.

So what companies do is they allocate a certain amount of their budget for Google and Bing, because those are the customers that are the best customers, right, with the highest intent. But they still keep a part of the budget for the social media sites because that’s like building brand.

And again, the social sites are supposed to be getting better at knowing what each person’s interests are.

Right? So that they can show you the right path that you might be interested in at that point in time. Right? If you’re searching for a bunch of stuff about houses or fixing up a house, right, all that kind of stuff restoring a house, it should know that so that when your ad is there that it’s going to show it to that person because they’ve been interested in searching for and viewing topics related to home improvement.

Okay. But you should always the the numbers, like, the metric that we do for for paid ads is return on ad spend. Arobe, yes, for ads.

So on Google, a good return on ad spend, is between seven and ten. I mean, do you spend a dollar you make seven dollars.

That’s good. That’s a good ratio. But pretty much the best return on ad spend from Facebook.

Is like three.

So don’t think that you’re gonna now start doing all your ads on Facebook and Instagram and TikTok. And you’re gonna bring in very profitable sales on that first sale. Again, the reason they keep doing it is because for the long term health of the business, you don’t care about growing companies, a lot of times, are willing to lose money on the first cost to acquire that customer, because they’re going to keep selling to that customer more and more over time. So that will become a profitable customer over time. But as a growing business, they’re willing to invest the money to acquire customers at a loss as long as they can continue to sell to them all the time and make that profitable.

A more mature business won’t do that.

Right? They’re not gonna take a loss on that first sale anymore.

So Those are things. Does that answer your question? Yeah, you mentioned in what else you can recommend, for example, from the Google we like about sixty to sixty five percent of the whole customers is like ours has CEO. And what else the option to drive? For where you have the pods.

I guess, yeah, who needs that, you know. Yeah. We we also like try the two buck, all the, you know, all the stuff. Maybe you can have some for that from Doug and Sykes.

Yeah.

We search is the best. Matter what.

Second is, if you have a website that you’re Could you get their email through a lead process or something?

Retargeting is the next best.

Retargeting is when someone comes to your site You’re able to identify them. They leave without buying. And since you’ve identified them, you’re able to send them a message right away.

Not look alike. No. It’s it’s it’s the exact person.

We target. Yeah. We did the Donna Instagram, but it didn’t did it work. Instagram is not the right place. Google, you’re targeting is great.

Because that’s on all the different website USA today, CNN, like, all the major websites show ads from from Google and targeting.

People like Bing does not have a lot of volume.

But it has very low costs because there’s not as much competition.

So Bing can actually be very profitable for people to do paid ads on. It may only be a smaller percentage of your revenue. Google. Right? Being is cheaper than me.

What word is secret? Bing. Microsoft. Bing. Oh, here.

Yeah. Thank you. What does your favorite quiet? Six foot one.

My best client is an e commerce client who’s selling some products using the shopping cart application.

Doing at least a million a year in revenue so far.

At least, that’s the minimum.

So, like, one hundred.

So I’ve worked with some companies where I started with them where they were doing six million a year in revenue.

And now still working with them. They’re doing over a hundred million a year in revenue.

How do you find your clients? I found my clients through referrals.

Right? So the number one way is by having business partners that refer me business, those partners are anyone from a web development company who develops websites. They don’t do marketing. I don’t do web design. So we have a relationship where I give them business, they give me business.

I’m partners with a lot of software companies that provide an internal search on the website.

Like, people pay for that for the website, and that company prefers me business. Right? So, mostly grew overall some partnerships.

I have done paid advertising to try to acquire a couple business, but it’s not profitable for me.

Last thing, I see, Josh, the online store and Does it really matter which platform to use for search engine optimization and it’s usually shopify or work fast and the same question from the beta’s.

Yes. So, the only platform I would say do not use. Is Wix, w I x.

You go to x x. Wix, Yeah, Marty. Because they were built not as an e commerce platform, and they’ve over time tried to just add that to what they do. And the way that they render the pages uses a certain scripting technique which Google does not like.

So you find very few high rankings stores on Google using Wix.

But everything else, if it’s either Shopify or Shopify word class. And so WordPress has a cart called woocommerce, right? That’s the shop cart. That’s totally fine. The only problem with woocommerce is that it’s usually slower, and it cannot handle as many items in your inventory.

It slows down.

Which is bad for the Google and for user.

So that’s what created on the website in the long cost to use some platform.

Right?

No. Most most people use a platform. And use Shopify, it’s more slow. No.

No. Just this woocommerce is slow. The Shopify is very fast.

That’s the most common e commerce platform in the webinar.

But there’s others.

Two questions. Sure. The first one is still tall dress. Do not use wicks or yet Yeah. But what about other types of this?

Yeah. Which is Yes. Yes.

Because it Wix makes it very easy to change the content on your pages. Okay. And to make very pretty designs and pages. Okay. So, it’s good for lead generation websites.

Very easy to use. You don’t have to be a web designer.

Right? It’s kind of like using Canvas.

Right? It’s very easy, anybody can do it. So basically, if I would want to make, like, a website, for for example, for young business programs, is eight doing using wix. And I still have a chance to be in the top of Facebook. Yes. But I wouldn’t use WordPress.

You wouldn’t use WordPress. Yes. Okay.

Gotcha. Everyday, instead of wix. I would never use wix. Just Okay. Thanks.

So this was the first question. Standard questions. So basically, you deal with a lot of e commerce fields. Right? Yeah. And you allow them to calculate the c a c.

I’m pretty sure that when we were telling them the the the their cost per position. Yeah.

A lot of them have, like, a lot of of impression of that. And in this, the their CNC is bigger than the compliance. Yeah.

What the most common tactics they are used for usage and them to use to reduce a lot of times they’re underpriced.

So the actual pricing that they’re charging for their product or service, they’re trying to become like the low price leader, right, the race to the bottom, we call that. So they have no profit they have no margin.

Right, that they’re working with. So, their acquisition costs is — they’re competing for revenue, which is less than everybody else. But, you know, each customer has a different underlying need in terms of their acquisition cost. Again, like if it’s a small company that’s looking to really grow, they’re not as concerned with the acquisition cost.

If it’s a more mature company that really cares about profitability, right, that cares about acquisition costs, they’re going to attack their paid ads first.

So they may even sacrifice their top line revenue that’s being generated from paid so that they can bring their acquisition costs down.

Because most people, when they think of CAC, they think of Google apps.

They think of paid ads. That’s what most people think of. And they think how do I reduce my paid ads? So they try to use some fancy software that’s gonna you know, try to calculate the best return on ad spend or whatever.

Right? So paid ads is usually the focus of most businesses. They’re not thinking everything else seem to account, because they’re only thinking short term and medium. They’re not thinking how can I increase revenue from social media?

How can I increase revenue from emails SMS? How can I improve my SEO to get more business, right, over a longer period of time? Because they’re only thinking this quarter.

Right, paid ads, paid ads.

So, most of the tactics that I see my clients doing to reduce the cost, comes on reducing the paid ads.

And trying out b, trying out Pinterest.

Right? They’re trying all these different platforms.

Gotcha. Thanks. Yes.

You mentioned a hospital and was talking about the ultimate to assure your students about using hospital and institutions. Goes on the Yep. Hubspot’s awesome.

HubSpot is a content management tool built in with with a CRM.

So it’s like an all in one package that allows you to build your website, create all your content, capture leads, and then create all of the email automation that goes along with that. So if someone fills out a form, then know, within an you set up an automation so that within an hour, they get an email. And then if they don’t respond to that email, a day later they get another email, that’s about automation. So it’s one system that provides all that functionality in one place. And it allows you to track all your leads, the status of the leads, all those things in one. So it’s a great tool. It’s not the easiest tool to set up.

It’s a pretty old system.

So they’re trying to, like, build on top of something old instead of some of these newer systems that are fresher and easier, more modern to use. So, there are some challenges.

From a user standpoint with HubSpot, but the functionality is great.

And it’s a platform that a lot of companies don’t start off using. But once they get into a million in revenue, maybe more, did they move over to that? Because it is more expensive as well. It costs every user that uses the platform, there’s a monthly fee, which is pretty high compared to it. Most other systems that are out there.

Thanks. Alright.

Thank you guys so much for having me. It’s great.