Marketing can be a daunting aspect of your business growth. It can be tough to know when and where to start. Timothy Warren, President & CEO of Helium SEO, knows the ins and outs of digital marketing and is sharing the secrets to navigating online marketing.
In this session we will answer questions like who is your target audience – where and how do you find them, what are the “digital watering holes” and what should your approach be?
Speaker: Timothy J Warren, President & CEO Helium SEO
Thank you, Matt. Appreciate the introduction, and great and meet everybody. This morning was nice. If you guys are in Ohio anyway, a nice cold chilly, winter morning, so we had a heatwave that came through and I dressed not appropriately. Yesterday. I thought well, we’re good to go, man, and I was freezing. So it looks like winter has finally come again.
Real quick in the chat just to make sure everybody hear or see my video. My audio is clearly coming through clearly just to make sure I’m going to go ahead and share my screen. Take it and get some yeses. There you go! And then make sure everybody can see my sharescreen here. Just make sure that the slides are working correctly. Everybody can see my slide here just to make sure that it’s working correctly. So everybody sees my slide that’s up here as well. Audio good. And can you guys see the slides?
All right, perfect! I know sometimes the Zoom can go in and out sometimes. So, well, great to meet everybody. I’ll kind of get us kicked off here and then we’ll dive into the slides.
About the Speaker
So, my name is Tim Warren. I’m one of the founders and CEO of a company called Helium SEO. We have about 65 employees spread across the nation. We primarily do digital marketing for midsize and enterprise operations. So we do work with PetSmart and Save More, and Gene Sight, and Honeywell and lots of these great brands as well as lots of really awesome mid-sized companies all over the nation. So that’s what we do. So day, in and day out, I get to work with entrepreneurs. It’s the marketing teams. And so we see the world of online marketing every single day. So, in that, I and Matt got connected talked about and actually Ashley from Red1 Ventures. As I connected, you know, I said well, where can I add value? How can I help? And really the kind of the over the line team was would be really helpful.
Concept of Watering Hole
If we can talk about digital watering holes and what those are and how they work and the most popular ones and everything about that. So today we’re going to talk about this concept of the digital watering hole. And I’m going to introduce that here in the second aspect again, but this is not super, it’s not the official term that I kind of came up after I’ve work in digital marketing for about 10 years and we’ll get into that in a second. But the goal for today’s look will cool present in 35, 40 minutes and walk you guys through the ideas of digital watering holes, how to your perfect audience, congregate online, and how to target them with the best?
As strategies organic strategies, you drive more traffic to your website, to your brand, with accomplished than how do you think the must to execute on that? Because digital marketing is very math-based in today’s world. It all comes down to what you’re spending is going to be which version is going to be a pleasure prophesying to be and make those some support to really get to know those details. All in’s, I want to leave time in the end for Q&A because I’m sure you guys have a lot of very specific questions that aren’t going to be answered at this talk, but I’d love to help. I’d love to answer whatever I can. So I want to make sure it’s lead time to be in for us to do that. And I have tools. Well, we pull up individual websites and talk through the specific question. So don’t be shy, feel free to come with questions because dig right into this.
All right, let’s dive in. So the in the digital watering. Okay. So what does that mean? Well, if you think about the Safari, okay, so my wife is South African, have been to facility times beautiful place, but it’s some of the really arid areas right now. There’s very little water and so if you were a cheetah and you were going to hunt the antelope, your next meal right, would it be more intelligent to kind of wander around the desert or the brush? And hopefully waiting to see a stray, you know, antelope we could attack, or if, you know, every single animal has to drink to survive. Where’s the best place to hunt? All right, you go where the food is? All right. In this idea. When we think about digital marketing, a lot of times Brands think about I just got to be online, right? I got to get pressed and I gotta run. I gotta do Google ads. I got a Facebook and I got to do, you know, Tick Tok. I got to do. Snapchat, I got to be on all the different things. I got to do everything, right? Well, not necessarily.
Depends on your budget. But the most important thing to know in day one is, where does your audience spend time online? So, you know, all the giraffes and all the antelopes, whatever it is. You’re going after are all going to have to be at the watering hole at some point. Well, then the bushes, I would hide it. If I was a cheetah, our the ones right there by the watering hole and I try to sneak out and grab an unsuspecting Antelope or whatever. It is, right? The same thing with digital marketing. So, most brands no matter how big they are… they are cannot afford to be everywhere on the web, all the same time.
They just don’t have the budget to be expensive. So they have to be selected. Especially if you are in the early stage of your startup phase or early stage. You were real stress, about funding. Your budgets are going to be limited. Okay, maybe you’re a solopreneur working on your side gig from home. You’ve got another full-time job. Your budgets are definitely going to be limited. The more limited your budgets are the more you have got to focus on the very best watering hole. How to Market your products? If you haven’t read it as a book called Traction, I think it’s a yellow cover gray paper, and white sands. The author talks about there are 23, different traction channels businesses, when you start or as you grow can leverage to Pro SEO, SEM, Social Media, trade shows printed newspaper, TV does all the different channels. Okay, some are growing very outdated by the probably wouldn’t recommend you a president favor. Okay, I think that’s still possible, but I probably do that, right?
Maybe Tick Tok is the answer for you. If it’s SEO, maybe it’s an email marker. Maybe it’s customer referrals because you sell insurance, and that works. There are the traction channels that are different for everybody. There are twenty-three main ones. But one thing that came across in, this is true, is for every business one or two of those will be the most effective for you. Okay. So what that means is, if you’re going to do digital marketing ads, you’re going to target your customers online. One or two channels is, is likely to work better than all the other ones combined. Okay. How do you figure that out? Well, I would work backward from the digital watering holes from the ideal customer. What you do is you first say, okay, who’s my ideal customer? Maybe it’s the giraffe. Okay. That’s, that’s what the cheetah wants to eat is the giraffe. Okay. When did the giraffe drink that often? Yeah, they drink once a week. Okay, where are the watering holes? There are usually three watering holes. They always drink at night. Okay, so great. Same idea. Okay. Okay, who’s your target audience?
I think about your ideal target customer and ideal client prospect or ICP’s ideal client Prospect. Take that person. And then say, where does this person spend most of their time online? Okay, so they spend time on Facebook. Are they on Instagram or on WhatsApp? They are on Fox news on CNN, right? Maybe they read it. You’d see, piles, Lifehacker. There are so many online platforms, but if you kind of start to break it down and say okay. Are getting 60 to 70-year-old females that are empty-nesters that live in suburban areas.
They’re not on Tick, Tok the promenade, and Lifehacker, you? Okay? You can, you can think about where those people probably generally spend time there on Facebook because it will take risks for grandkids there on house looking at ways to beautify their home. They’re probably driving the better homes and gardens. The probably into, you know, cooking or things that relate to General like that group typically is into that, always the purposely, the probably into certain sports. Maybe they’re into tennis or quicker baller calls for whatever the thing is right. Quickly. Make that list of that ideal customer and their general, and stereotypical things, and then work backward to figure out where they spend time online. And that’s where you should run your ads, right? Because that’s probably where you’re most likely to get the best possible chance to get your ads for the eyeballs, where they’re going to convert. Okay, everybody with me so far? Not too difficult of a concept, but this is the idea.
Know Your Customer
Okay, so just like we talked about here. Here are kind of steps border. By the way. I know this is reported. You don’t have to write these things down. The aisle have to show slides your afterwards. Just send me an email saying slides. I’ll take this license, but step number one. Okay? Find the watering holes, where they congregate. Okay, learn how the watering holes works. This one’s really important every single social media, every single platform, whether it’s Google or Bing or Tick-Tok or wherever Fox News, they all have different ways. They let you run ads. They all have different price points that have different ways. You could target that customer. You have to understand how the platform works. Or this case, the watering holes. You have to understand the rules of the watery. So, like, let’s say that I want to advertise on Lifehackers. They probably have two types of ads. Native ads, which are a banner ad that stays all day long, does change and programmatic ads, which are going to be ones that change ads every time a new customer visiting the site. They’re always rotating through based out process. I have to decide which one I want programmatic ad swaps all the time. It’s going to be a lot cheaper. Now the pay-per-click the native ads going to be 5, 10 grand a month, and it’s going to be there, but everybody’s going to see it. Okay, so I’m going to get a lot more disability but it’s not going to be charged based on clicks is probably going to just be a flat rates and made it out on the site. You have to decide which one you put most of the money. Right? But different goals objectives. Google’s and other examples you have to understand how Google works.
So our company works in the Google space a lot. That’s a watering hole re spending most of our time. Google works differently today and who boards over the ductductgo and Google works differently. Then social media has very different rules. So if you want to rank spot one and YouTube It’s all about length of content. That’s YouTube. Okay. Are people liking your videos, like and subscribe button, clicking bell, gets notification and give a 30 minute video that it watch it all the way to the end. Which means the most engaged. It’s not a number of clicks, right? That they start your video and stop it. Start to finish. Google has all the authority of your website, but backlinks content is a totally different algorithms, even though YouTube and Google, when they’re owned by the same company right there. On my alphabet. They’re two very different search engines. Okay, very different algorithms. You have to know your waterfall.
This, I put this one down here, which is commit to learn the algorithm. What do I mean by that? Okay, so many businesses and markers their senior years. They want to do this here the talk they know about this like I want to do when I’m going to learn how to grow my business.
A new place a few whom or whatever it is. In terms of learning the algorithmic committing, if you kind of dabble, so if it’s Google and SEO, if it’s Facebook ads, if it’s Wattsapp, Tick-Tok ads, if it’s any platform. I promise you that they’re not you can’t take a month and thousand dollars in budget and become a true expert in having it work. It doesn’t work that way. You’ve got to take the time to truly invest in. So you want to be great at Facebook ads, and there are businesses. I’ve seen a lot of companies, they have one main channel, so they sell on Amazon. They have a health supplement and Amazon is their market, they totally mastered Amazon. That’s great. But they took every time they took years a lot of budgets are completely messed up that, maybe it’s Google and you’re going to master SEO and as yet, if it’s Facebook ads or socialize either way, you’ve got to commit to it. So my recommendation is once you figure out this is my channel. Give it six months and being willing to give it a real budget and don’t give up until you really truly mastered it, and it’s still not working. Then that channel may not work for you, but don’t quit to soon.
If you don’t know how the platform works, they will take advantage of you. Whatever the platform is. I promise. Okay. So in the case of Google, right, you don’t know how Google ads work. Google ad representative will recommend you do everything broad search. Okay. What is broad match me? Let’s say that you’re selling really custom shoes. They’re going to want you to run ads for shoes, which is super broad. It’s there’s millions of types of shoes and that’s not going to lead to your ideal customer, but you’re going to get clicks and you’re going to spend your budget like that, but you’re not giving the conversions, that’s not helpful. But Google wants you to spend lots of money ads. You don’t want to spend more money on it, as you want to get conversions that, they money. That’s two different goals. So when I say, they’ll take advantage of you on any social platform, you put your credit card in and you say run ads. It takes all the money, you want to give them, but you got to know how much you want to give up. And you gotta make sure you write good ads. They’re not going to guarantee that fear. So, any ad platform or any place for your interest and marketing dollars. I’m not saying they’re going to try to take advantage specifically but if you don’t know how It works, you will probably lose money or take advantage of it just because their goal is to get as many marketing dollars from you.
Sometimes people ask, what should I do this selfless by hiring an agency. Both are good options. It really depends on your goals and your budget. Okay. So there are three types of agencies out there. That was for 10 years. So like a friend, this is what I would tell any friend Carlos, whether they were you stealing about the three types of agencies. There’s kind of the solo agency. However, okay, maybe they were consultants. They do it on the side. Maybe they just recently left an agency role and hang a shingle of going out on their own.
We’re kind of your entry-level. They’re starting out or they’ve got some experience with it. Got a really small team. Basically just them they’re going to give you a lot of good customer service going to get you’re going to get a lot of attention their skills and knowledge is probably more limited just by default. Typically, these really small shops are just not as knowledgeable as big burns. And they’re going to struggle to scale with you. As you scale, the benefits. Is there going to be a lot cheaper? Okay. So, when you start out, I wouldn’t hire a big firm to pay a lot of money because they’re, they’re going to have way too much horsepower and suspend the spend. They’re going to want you to spend what you’re going to spend every wisely too far apart. It won’t be a good message again. So you start out, I would start with the small local and one or two-person shop.
Once you’ve kind of gotten what you can get there that isn’t graduate to the next level which is kind of a midsize agency, 20, 30, 40, 50 people. There are specialists in a couple of areas and they’re going to have mid-level budgets. And then, from there, you can, you know, if your business to use, really grow, very large agencies and 150, plus people, and they are very deep specialties large budgets. Okay, that’s kind of the progression. If you choose to do it yourself… nothing wrong with that. But if you do it yourself, you’re going to have three. Which is you’re going to deeply commit to learning the algorithm. So, the businesses I’ve seen that have been installed on Google or Facebook, or on Amazon, or whatever. The Puffin was completely mastered. They dug in, and it’s like, I’ve heard the story every time, the CEO or the owners. It’s like, I made this far. This is my personal mission to master this platform, right? It became their hobby, their Leisure activity, and the job they made it there like “focus”.
I did it and they learned it, but it took him years. That’s also a valid strategy. But that’s just what it takes either you have to pay for it or you have to do it yourself, but neither one’s right or wrong answer, they were figuring out if you’re the first to do that like do you want to study the Facebook algorithm will understand as bidding strategies understand how it runs ads. If you want to take the time to do that. Do you enjoy that? If so, yeah, do it yourself. If you know, you don’t like that, probably hire some to do it for you.
Last thing I’ll say here even if you decide you want to hire a firm to do yourself or do it for you because I don’t to do it myself. I would still encourage you do not, you know, it’s not like flying in an airplane. You get your total ticket with Delta and you get on the plane. You’re like, I don’t really care how it works. I just want to get there. I don’t really want to know how to landing gear, all the buttons up there. In the cockpit. I really care about anything is just want to watch a movie, right? Don’t do it. That way, that way will lead to failure, probably because if you go to hire a firm, don’t really know enough about platforms. And what you want to do. You’re inevitably going to hire the firm.
Because you’re not going to know a, how to truly pick between really good firms and average firms. It’s not going to know the right questions and not going to know if what you’re telling me is true. That’s a big problem. The number two, you haven’t done enough. Work to figure out your ideal customer and your platform and probably the watering holes. You’re probably going to hire the Run Specialist or going to hire a generalist to kind of knows a little bit about everything but they’re not specialist enough in the platform you need. This is probably not going to work. So I would encourage you even if you do want to hire it out, take time to figure some of this stuff out and to really ask good questions and to take in so that when you go to hire an agency higher price, Let’s keep going.
Different Ways to Reach Within the Watering Holes
Here’s different. There’s a lot of 23 different reaction channels. But some of the most, you know, common ones that we talk about our SEO, which is ranking oganically. SEO is when you go to Google and you type in, you know, new, you know, new black leather sofa, right? New 25 inch black, leather sofa, for whatever the keywords is, that’s SEO. And you pick everything that ranks below. Yeah. It’s SEO. SEM is search engine marketing paid ads for the product search new black leather sofa.
All the ads that pop up while you browsing. The text ads are Google ads or SEM and everything below. That SEO programmatic is when you go online and you see banner ads, that’s that change in now and out online. Banner ads are all programmati. Native ads that we talk about this but adds a fixed on websites. You go to a blog and see the same ad day and day out. Content marketing is a really common way that smaller early stage businesses start, because they don’t have the ad budget to really classify as they start by creating a little bit content. And in hopes of that content is spread. That’s a good strategy. It is a longer approach because it takes longer to build the content, wait for to get traction, wait for his eyeballs overs, get disseminated. But this it’s a pretty cost effective way to do marketing and then G and B. So if you’re a localized business, so your all about local traffic locally. Google my business or Google Maps GMB is a very good strategy that could work early.
All right. So, what’s the sniff test? So what you’re going to build an app? Okay. So let’s just say that your back to the one. You’re you’re selling new sofas to 60 to 70 year old females, who live in Suburban areas. Do like pickleball and gardening super stereotypical. I know what whatever you’re trying to do an example. So when you build an app, okay, whatever medium you’re going to be on a channel, you’re going to, you’re going to advertise on, you’ve got to make sure that ads matches the watering hole, okay.
So, if you’re running an ad on Better Homes and Gardens, what I would do is look at all the other ads and Better Homes, and Gardens, and kind of see the size, the imagery that they move, are they dynamic for just static? What are they selling? How are they doing it? What’s their process? Okay, what’s their creative look like, generally. What do you see out there? The reason I would do that is to have a test, is if your ad and no way matches what other people are running on that platform, probably a bad. It’s probably a bad thing because they’re spending a lot of money and they’re probably figuring out what works. And if yours is wildly different. Maybe you’re the super creative genius. That came up, were feeling better way to do it, maybe but more than likely yours, doesn’t match what they have found works. Okay. So do you have a sniff test is run ads that matched. So if you’re running ads on Lifehacker, your ads should be probably content marketing based and about like pow to pack a process or procedure to make life better. I wouldn’t just run a banner ad. Because if your service is probably not going to connect that media. Okay, you’re running ads on Fox News. You probably should sell something that appeals to conservatives running ads on CNN. You probably should sell some, it the feel some more of a liberal audience. You gotta know who you’re Marketing in the sights. You’re on. What’s going to feel, right? You gotta do that with all the sniff test.
Volume vs. Profit
Those two strategies you can go on the volume strategy or the profit strategy. Okay, so there’s always this joke that we hear you talk to a t-shirt company and they say yes, we’re losing money on every t-shirt but we’ll make it up with volume, right? Losing ten cents and of your shirt sell million shirts, once you just lose ten times, you know for dollar, whatever it is, you’re losing like yes, but we’ll make it up and more. Okay, the volume 1 which is what we’re not going to make a ton of money from our ads but we’re going to get a ton of conversions and so over time it’ll still work. Okay. So let me use kind of two different examples. So let’s say you’re selling a pretty inexpensive product that lets say you invented something that’s 10.99 that you sell online and it’s because it is great product for that for 10.99. You’re going to need to sell a lot of them to make money. And so your conversions are going to have to be inexpensive.
You can’t spend $30 to convert customers as 10.99, right? It was money. So in that case you cannot run Google ads at $12 per click because you there’s no possible way. The numbers work in that case. You’re probably going to have to find like a Facebook ad strategy where you can run Facebook ads at 10 cents and click, get 100 clicks or 10, 15 turn 20, 30 40 clicks who spent four dollars on marketing to get a 10. 99 version. And if your profit margin is five dollars or still are independent black, okay, right?
That’s your kind of volume play, right? Very cheap, but a lot of ads or you can go for the high profit. So, maybe you sell a year in the consulting space himself, very, very high in consulting engagements. But you have to get a lot of people to see it before you get a buyer because your products ten or twenty or thirty thousand dollars that you can spend five thousand dollars in ads to get the thirty thousand dollar sale. Okay. So that’s the case. That’s a profit based strategy. You’re going to spend more on ads typically and you’re going to have to get a lot more people to see it. But if your profits high enough, you can go with profit approach. So either one works, but you got to know your business. Okay. So if you have a restaurant that sells burritos got to go to volume play. It’s, um, car dealership that sells luxury cars. You probably have to go to prompted play. So my recommendation is to go for profit play. If you have a more expensive large ticket item, you know, 510k or more if you have a lower cost item, you know, 100 bucks or under probably go for the ball and play.
Give It Enough Time
The next thing, I love this light that, you know, Cheeto waiting right here. I might be a lioness waiting but they got to give it time. Okay, one of the biggest mistakes that people that people make when get into digital marketing, their, they’ve heard the talk, digital water involved and excited. This is great. Let’s make this happen. They don’t give it enough time when Helium started our company in 2018. Okay. So now we’ve got 65 employees when we started and now, we had grown, made the decision. We’re going to invest SEO for ourselves because we believe in this channel. Obviously. It’s a great medium, but we’re going to invest in it, but it’s going to take time. No lie. Okay.
We’re really good SEO, crappy Google Cincinnati. SEO networks. Pop one. We’ve taken clients from 20,000 organic visits to 168,000 in three years. For good at SEO. It took us 12 months, just to get on page 1 of doing our own SEO for Cincinnati. SEO and probably 14 months before we started getting real actual rules, as a long time. You’d say, well, why did it take so long? Aren’t you guys experts? We are. That’s how long it took to get that keyword gets really competitive keyword, but we didn’t quit after six months. When I got this isn’t working. We had to give it time. We knew it would take time and now today, right? So 15, 16, 18 months in, we started getting some really good leads grunts. Yeah, but now we get our website does really good from SEO scene.
Get a lot of hundreds of percent, but if we would have quit at month 12 because we didn’t have leads yet, we would lost them all of that. Whether you do Facebook ads, Google organic or great newspaper, okay. You need to do some research on the platform of how long it takes before you should see a return. It’s going to be different on all the different platforms, which gotta be willing to give it the right amount of time. Most of the time people quit too soon. Last analogy will use marketing is like planting a tree. Okay, if you take the C, put it in the ground, but the fertilizer you pack it down and then like a week later. I think growing you open it back up and pull it out. It’s not growing it, like, come on! Only to put it back in how to back down again and then do that every week.
Your tree will literally never grow because you’ll break the roots and you will kill it. He’ll never grow instead. What we all know what you have to do with see, you know, your talk nicely to it. But at the ground, you put the miracle grow and you water it, you know, every day and you sit there and you wait until the tape rose you let nature do its magic, okay. Marketing is not magic but there’s a lot of similarities. There are a lot of brands will say, okay, we’re going to try Facebook. We’re going to give a thousand dollar budget doesn’t work. That’s so the wrong bridge. I don’t like anything about that. Correct. Instead. What I’d recommend is say, hey, we think Facebook based on our competitors. They’re doing very well on Facebook. Think we probably would too. Great. How long are you going to give it will give it a year? That’s really good. How much budget 50 Grand? Okay, that’s good budget. Great.
Now, are you going to hire an agency or you going to do the self? How do you know how to hire the right agency? But give it the right amount of time which is typically 12 to 24 months and give it the right amount of budget to make sure that you really are giving it a shot.
All right, It’s time to do the math. Okay, that’s fun part. Everybody’s fun part. Right that I actually I’ve got it on that. I actually like them at parties. This is going to get kind of complicated because I’ve put more of it onto a slide. But let me start small walk into it and then kind of start to wrap up here and go to a Q&A. So you guys can ask questions, like, can help with your specific situation. Okay. So let’s just use that example.
Budgeting on Ads
We’ll go back to selling couches in the 60 year old female lives in a suburban area is on. All the websites, she’s okay. Let’s say that we want to target her. Okay, and let’s say we’re going to run Facebook ads to her. We’re going to do SEO and run ads on house. Okay, whatever. So the step one determine how much you’re willing to spend on as to attract customers. How do you do this intelligently? Well, you could figure in the wind, all spent a hundred bucks, you know per conversion. I don’t recommend that do it this way. Take your LTV, your lifetime value.
Okay. So your Product. All right. Whatever your product is. How much is your average sale? And how many average sales will you make you, average customer? Okay, so really all these examples. So our average client spends, 40 thousand dollars a year. Let’s say, okay. It’s probably higher than that. But let’s just use that. Okay, and do they spend that one time or do they spend that for multiple use? So then for us to come together. LTD we say they spent 40,000. But for how many years do they go? An average of four years? Okay, be 160 thousand dollars. Okay.
So then that’s our LTV. Maybe you sell a health food supplements, on Amazon $25. That’s great. That’s your average consumer sales, $25, how many times they buy? Oh! They’ll buy 30 times in their life. Okay.
So what does that $600? Something like that? More? No more than that. 6750. That’s $250. Okay. To LTD is 750. So you can think about your total lifetime value. Why does that matter? A term or because it’s okay. If they’re going to spend something, or if you can all over the course of their engagement in, you can spend 50 or 70 or 100 dollars on ads, even if your first conversion is completely unprofitable because, you know, they’re going to buy 25 more tanners of your superfood supplement or whatever it is, right. So, it’s okay to lose money on the first conversion because, you know, you’ll make up later. Helium does that with our sales team? So when we sell a deal right with commission we are less profitable and deals. The first three months is all the upfront work are also the skill to it, but we don’t care because we know they go three or four years will eventually make it up after enough fillings, but we won’t make money at the beginning. Okay, it’s all them from feet. That’s okay. We know our LTD sign up today for. That’s all you guys need to figure out for your brand. The lifetime value is how much is your average sale? How many times left us a fine for you? Okay. Once you have your LTD and you feel confident, it’s okay. If you want to undress, it’s our average sales, $300, and I think they’ll buy two. Okay, then just say six, help, don’t overestimate. It’s better to be conservative because you don’t want to lose money on ads, right? Or who’s lost? Number two is start small and test. Now, you’ve got your LTS. Let’s just say LTD. Keep the math easy. $100. Okay. So your lifetime values is 100 bucks and your profit is 10 bucks, just keep it simple.
Don’t waste your whole budget on one bucket. Okay, when you’re starting out, you’re trying to test, don’t put it all into Facebook and then like, YOLO, Facebook and nothing else. Okay, but some of the Facebook, put some into Google organic, but some in said, you know, Snapchat looks at whatever the different platforms, are your advertise on, put some in different places and see which one does better. Typically, the first one you try is not the best one. Okay.
I recommend start with smaller budgets and test. Simply becomes profitable on sales, then you scale up. So you hit a point of diminishing returns. Okay. So what that means is, let’s say you figure out, the Facebook is a good platform for you. You’re making money on ads and you’re becoming profitable. There will be like, any curve up. They’ll be a law of diminishing returns will be a point to which you know, that you’re spending ten thousand dollars a month on Facebook ads. There’s a point to which going above will not add any more sales, but you will spend money on ads. I don’t have time on this talk to how to determine that, but there’s formula for that. Google ads is really good one for that. Keyword planner. Budget planner in all that she’ll tell you above ten thousand dollars a month spend for this term. You don’t, we really don’t drive anymore conversions. Cool. Right. As you kind of maximize your audience. There’s a lot of in your terms. So that’s don’t worry about that a moment. That will happen, Okay.
Number three is analytics are key. Don’t spend all this and not have your analytics. So you’ve got a website, get Google analytics and Google analytics, Facebook analytics, Google ads, ClickFunnels, CrazyEgg, Hotjat,these are the ones I would recommend I using and listed right here for you. Send you this slides as a gift, but use analytic tools, many of these are free or very inexpensive, right? Ten bucks a month or whatever, you use the free and cheap tools to make sure you’re tracking. Everything is the key to ads is data, right? Knowing the math, but knowing the data, if you look at it and say, oh, I ran thousand dollars in ads, I use Hotjar to see how people are engaged with my page. They came scrolling the bottom and then left. Okay.
What does that mean? Was that I run into the wrong person or my page, like really boring. They didn’t see what they wanted to see. Look at some of my competitors laning phase. Oh, they’ve got a video in a really long sales date. I don’t have that. Well, maybe I should have that because the data shows that there’s bouncing instantly. Okay. I should probably do this better. So data is really important right now.
Step 3. So once you have picture LTV, you decided to start all tests, testing different platforms. You start to figure out the platform that works a or couple platforms at work. Now, I’m going to step three, take your LTV, or your lifetime value – your CAC or customer acquisition cost. Sometimes called pack, right? Equals your profit per customer. Now, let’s keep it simple leaves that example, get your all to use, 100 bucks. Okay, your sale is $10 and they’re going to buy from you ten times. So it’s LTVs, hundred bucks, your sales, $10.
Customer acquisition cost is however many dollars it cost you to get the customer. So if you’re spending let’s say eight dollars on Facebook ads to get your ten dollar sale, your customer acquisition cost to be eight dollars. Okay, because you spent $8 and has to get sale. Well, in this case, your your pack would be eight dollars for LTD is a hundred dollars here. Profit per customer here will be $92. Does that make sense? Take your LTV -plus your cap. Okay, so that case you say. Oh, I’m willing to spend eight dollars drive, two dollars. Yeah, great. Okay, you don’t want it to be upside down. It’s a customer acquisition costs and spaces $105 in your LTD is a hundred dollars, then you’re underwater.
Not to get too complicated here. You can look at this either on revenue or profit. Okay, some brands. Looking at, in terms of breath. Okay, we sell we sell, I’m sure this equipment for thousand dollars and our customers are cost, has to be $300 because if we get a $300, we could sell 4,000 members of the revenue numbers. Okay. Great. Some brands, do it for non-profit. Okay, is probably better if you don’t profit, so let’s say was used 100. Hundred-dollar LTV, given LCB 100, you saw something for $10, but it cost you $3 to make it. Okay. So, your three dollar cost of goods is revenue but not profit seven dollars a profit on that ten dollar item, awesome, three dollars. That means you should probably factor that your, your actual cost of sale is seven dollars, not 10, but some seven dollors of profit. So now you can’t spend more than $7 C, AC or you, don’t break. You lose money. Trying not super complicate this guy’s but I’m hoping this is making sense. For small brands, I recommend you look at un-profit not just under-profit of your product, your customer acquisition cost has to be lower than profit with make them an initial product. You can get that ratio to work. Your ads are going to be awesome because you can confidently spend money knowing I could get new customers to cheaper rate from that and profit. I made a sale.
If you know, they’re going to but it a bunch of times. Don’t worry about the profit on the new sale. Just worry about getting them in the door at a lower ratio than the total else. Okay. Hope that’s simple on can answer questions as we go if this super nice and super not a quitter. Step four is training platforms that come there. So when Snapchat comes out Tick-Tok comes out when, whatever the new social media is, try it run some ads on, put a thousand dollar budget or whatever size of budget. I always recommend trying new platform just to see because you never know if that’s the like. Oh, this is an awesome platform is working perfect, right? You never know if that’s, that’s the way it is. Or, you know, you try it doesn’t do anything. What do you have to lose? All right, so I always recommend trying new platforms. All right.
How to Pick a New Platform
This is hopefully not complicated but I’m going to walk you guys through this. How do you decide which platform to pick and how do you get a few platforms? And how do I kind of know where to Market? Okay. So this is a very common graph of the market when you’re marketing. I forgot this called, if not the innovator’s dilemma. There’s an official name is maybe someone in Jackson, remind me what the name of this is, but this is a graph of basically when you’re putting a new product out there.
The way the markets going to react to that. So, the very beginning when you have any Tech or any new thing, you’re gonna have your early marker. Okay. Got a chat crossing the chasm. Thank you, Maurice. Appreciate this is probably the best. Thank you. So when you, when you have a new product is, let’s say you invented, an exercise devices 60 bucks. You’re going to consulting phase. Okay, you’re going to have your innovate your guys who are super, super into anything Fitness and anything new and they’re going to buy your product size. They’re going to okay, because they’re just absolutely business. This, this is tech enthusiasts because it’s typically used in SAS and type products, but this can work for any, any enthusiast of it at any price. Okay, you get your innovators 2.5% of the beginning. They will try any kind will try anything everything that you just want to try this new stuff. They love new stuff. Okay. They know there’s going to be bugs style perfectly work in million. They were dying. They don’t care. They want to try and then 13.5% are your early adopters? Okay, they’re not going to do the newest of the newest thing. They do, the new things. They’re interested in. When you add these two up, right? Get sixteen seventeen percent of the market. That’s your early binders. Okay, this chasm, right crossing the chasm. This chasm is the big jump between every small start-up that doesn’t make it in the mainstream company. You can jump at the mainstream market.
A small startup that doesn’t make it and a mainstream company. It can jump as the mainstream market. So you super, for example, a Uber when first started, right? It was a really weird concept, like wait. I am on my computer and I order some random random black-hearted pick up my house. I would feel get to do. Really expensive is really high-end start as a black car. Mainstream they said, hey, we’re going to have people drive their own cars early adopters. Like, oh, this is cool. I’m gonna try this, they picked it up, the conservatives and skeptics would never have gotten in some other random guys car off of them, like never in a million years that they’re never going to do it. They’re only going to do it. Once. It’s so mainstream that it’s like old news then they will try it. Okay. So Uber had to win with these guys. We get vision. We’re like, oh that’s kind of cool. I get this guy’s far cheaper than a taxi. I’ll have to wait. We’ll do that. They cross the chasm though, and they became the early majority. They got they got a product that a lot of 34% of now, the normal market was like, yeah, I’ll try. This is, this is kind of cool. They tried it and they liked it and then they broke into the service market. I don’t know if they’re in the lacquered market yet, but the majority of people use a rideshare service. So you get Innovators visionaries, and then you get here. This is the majority of your market’s developers, you know, the to 34% of the product system service. Okay, houses apply to you when you’re picking a new platform.
Okay. I bet you, you could probably look at your market and you could probably pick out which of your buyers are in canticles. Okay. So let’s go back to the example. You’re selling couches to 60-year-old female. Okay. They’re probably not likely to be your early adopter of the newest couch technology. Maybe they aren’t, I don’t know, but maybe not. Okay. They’re probably more likely to be in your earlier late majority. Okay. Well, where do those people spend time? What websites, they on? Okay, because if I’m going for my Visionaries innovators, I’m going to be marketing at TechCrunch. I’m going to be on, you know, so, you know, Silicon, Valley News. I’m going to be where the innovators are spending time. Okay, Discord, TechCrunch, you know, whatever. That’s not where the sixty-year-old female wants to buy a couch there. So, when you protect about picking your platforms as well, you can also back up this late and say, hey, my audience, where would they follow this curve? Those people probably spend time in these places online and this is probably where I’m going to get. Conversions to boil it down. I wouldn’t take a conservative late and 40 type person here and try to sell them a really Innovative technology. Probably not going to work, but would be great to market to them. Something they are equal like shoes or couches. Or, you know, windows or basic products that are not basic super early stay herbs drink. Does make sense of this make sense? And if, if your product is going to sell really well to visionaries, pick platforms where visionary spends a lot of their time online. You’re probably going to get better results.