Episode Transcript
[00:00:00] Speaker A: Welcome to the Independence by Design podcast where we discuss what it means to be a business owner and ways to get unstuck from the day to day so we can design a business that gives us a life of independence.
All right, we are going to be kicking off it's milestone 14 of the IBD Owner's Roadmap, and that is the user journey and client acquisition cost. I. You and I both have a list of topics that we're going to be covering. We got a little less than an hour for everybody. We've talked about this in various episodes with you and I, and I think what we can do here is succinctly just cover this topic because I know we've done a bunch of other podcasts related to this last year. You. Some of the things that I've modified since you have been talking to me about this topic is user Journey, not customer Journey.
Understanding how sales and marketing fit into that and the Womb to Tomb is that great example. And we again, we've talked about that. But what I hope to cover today is how do we actually think about this and why it's so important that this is next and why hopefully everybody, you know, it was two episodes ago now that we did the strategic planning one that all has to be done. So then we can point the actual funnels to the icp, Right. And then we can build out that user journey. So I don't know where you want to pick it up and how you want to unpack this, but that's kind of how I'm thinking about it.
[00:01:31] Speaker B: Agreed. And I find that this is the section where most owners get frustrated because this is where they're throwing spaghetti at a wall, hiring different vendors, trying different tips and tricks and techniques and, and not seeing the benefit of those actions and of those investments. And I also find it's one of the most common areas that breaks down because people think that they understand the user journey, but they're only seeing a part of it ownership, obviously, as they should, always focused on the revenue, the money that's coming in the door. But there's so many important leading indicators before it turns into money that not seeing the dots connect along the way, they feel like they're wasting all their money. Like I put this much money into social media and I'm not seeing any return on my investment.
Well, if you stop that, how many less leads would you be getting? And how many of those less leads then decreases your conversion rates and therefore doesn't eventually impact your revenue? So I think that not having that Clear line of sight across, which will be coming in our next March or our next milestone when we're talking about connecting all the dots and forecasting and stuff. And I also find this is one of the biggest areas where people don't have a clear line of sight between sales and marketing and marketing and sales.
I mean, I have so many recent stories. My call this morning that I had with a client, a call that I had yesterday with a client, the day before that with a client, it's all disconnected between sales and marketing. So there's a lot for us to go through here. I've got lots of recent stories, and I'm excited for us to go through it.
[00:03:11] Speaker A: And the way that my head puts it all together is, you know, I've shown in the past the. That funnel, you know, where it's from the womb to tomb of all the different potential activities and people don't have to do everything at once. And there's probably an evolution over time of different touch points that you have with sales and marketing and where those lines are. But the.
What my, what my brain does, Kim, is it's a.it's a series of dominoes. Like, first domino gets put over, but if you take one of those out, the whole thing stops.
And like in everybody that I hear is talking about one of those dominoes, but the whole domino, like the whole series of dominoes leads to the womb to tomb.
And that whole process, we have the ability to figure out what is the amount of money the client acquisition costs that we're willing to spend as a percentage of gross profit for that all to happen. And that's why it can evolve over time as that dollar amount, the percentage stays the same, hopefully, or within a range. But then as the dollar amount grows, you can do more things. You can try more things, but there needs to be a succinct set of abdominals that goes, that goes one after the other because it's a natural journey. And you maybe if we start with the story like a couple weeks ago or something like that that you told me that story where you got on a call and there was all these vendors, you have a client that you helped save, I don't know, like 10, 15 grand a month because, like, someone's got paid ads over here, it's not tied to this over here, it's not tied to this offering. I mean, maybe you had a better story that you have, but you want to start with a story of like, kind of crappy situation and then where it ended up.
[00:04:52] Speaker B: Yeah, I Mean that particular one is a, is a, not an abnormal case. It's you get in there and they're trying, they're willing to invest money and time and they're trying everything that they're being told to do.
But the left hand didn't know what the right hand was doing. And so simply it was a matter of bringing them all together, thoroughly understanding the who's them all, all the vendors.
[00:05:14] Speaker A: What kind of vendors were there?
[00:05:15] Speaker B: Like marketing agencies, some that oversee social media, some that oversee meta, some that oversee Google Ads, some that oversee TikTok shop, some that oversee the website shop, some that oversee the website development, some that oversee the design elements of the website, some that oversee the email campaigns, something overseeing SMS text campaigns. Like it was just like there's just all these different vendors that you can hire that say we're the best at this. But the problem with doing, hiring the best for these individual components is that they all have their own strategies, they all have their own ideas and none of them are functioning off of the first milestone of this module, which is that brand architect, the foundation. They're all just doing what they have seen work for them and in the past and they're not doing what makes sense for this particular brand and they're also not doing it in conjunction. So an example was I was looking at each of the calendars that everybody's operating off of and one's talking about say July 4th while the other one's talking about this being national such and such day. And the other one's talking about happy awareness on this type of like none of it was cohesive because they were all just doing what they thought were best in their own silos. And just operating in silos is so dangerous for a business. So to that example it was no, you don't need all those people, let's consolidate and then let's just have a weekly rhythm where everybody gets together and we build out like a 60 to 90 day plan together.
So that way they all play off of each other and we can start to create that user journey.
[00:06:47] Speaker A: And you had said like, I think you guys had reduced the amount of vendors and consultants and advisors, but there still was multiple. And they were happy when you came together with a cohesive plan because they also wanted. So it's. The good people are excited for something
[00:07:06] Speaker B: like this is what I've gathered, yeah, 100%. I would say another example would be that it's not necessarily the bad scenario. They just, again, they were just, let's do a campaign over here. Let's do social media over here. And they had multiple entities but they connected in some ways. One was lead generating for the other one.
And so it was well, this entity over here is not talking about this entity over here in any way, but this entity is lead generating for this entity.
So why would you not have this entity plastered all over this website and in these emails and start co branding things?
So that way you can create a user journey that's not just entity specific, but it actually feeds off of one another.
So sometimes, not sometimes, every time it really is just taking that step back and looking at the brand foundation who our ICP is, even if it is more than one entity, if they feed into one another and then identifying what is the best user experience that's going to create that breadcrumb trail through.
I've been introduced to you for the very first time to now I'm converting into a customer. What do those mini steps need to be along the way?
[00:08:16] Speaker A: How do people go about figuring that out? Like what does zooming out look like? How do they. So there's some assumptions to everybody listening and if you have not gone and checked out the strategic planning and the revenue architecture one a couple episodes ago, go do that. Because we're assuming that that is done. That's why this all is in sequence. Right, Kim? Like there's all of the things in the roadmap for IBD is in a order for a reason. But when we get here, we have the icp, we understand who we're targeting and why, what our market position is.
Now it's time to actually map out my user journey. How do you, how do you start and like what, how do you determine how many miles, like how many touch points and where does sales and marketing start and stop and what tools and systems and communication do you use? I mean, how do you. Because I think what happens is can people want to go jump right into like how are you doing YouTube ads or how are you doing telemarketing? And we're trying to encourage them to start with the big picture first and then just like everything else, it'll have context for each one of those campaigns or those tools.
[00:09:22] Speaker B: Yeah, I think your broad buckets are obviously your social media and if you want to dial it out even further, it's your digital presence. So you have your digital presence and then you have your CRM. Or if you don't have CRM yet, you have just your existing database, whether it's in cell or whatever it is, then you have your customers and so Those are like the three big buckets of I can do stuff on the digital space facing outwards. I can do stuff with existing contacts that I've collected over the years but have never purchased from me or are lost clients. So basically not active clients. And then I have my active client bucket. So I mean that's like a really zoomed out version.
And then it's well, what am I doing to talk with each of those groups and how regularly am I talking with each of those groups? And there's industry norms and best practices for each of those buckets and you can use AI, talk to Claude, go online and do research for your industry and your type of business. But how often should I be messaging publicly in the digital space? How often should I be posting, changing things up on my website for keyword strategy? Like there's norms that exist and tons of reports that are out there that can give you the best practices specific to your type of business. And then the same thing with all right, I have 50 contacts in my database that aren't active aren't active clients. How often should I be talking with them and what should I be talking with them about? AI is going to help you answer a lot of those questions. Like AI has been life changing for businesses because they don't need like a marketing specialist anymore. Like I can answer those types of questions. And then the same thing with I have 3000 contacts in my database. That's when you're going to want to start segmenting your list because you have a larger list of contacts to actually talk to. So it all depends on like your size and your type of business to know how often and what should my message and what should my focus be. The messaging all comes from what people should have already watched, which is that revenue are architecture segment that we did.
[00:11:33] Speaker A: So I'm trying to think about the best way to continue unpacking this unless you have some thoughts about how you would like to take what you just said and make it more actionable or more, you know, break it down into breadcrumb bite sized chunks for people. I mean I'll ask you first if like what's the approach you'd like to
[00:11:51] Speaker B: take the with a client? The approach I take is I look at the contacts that are not active clients and if they have a CRM system or some way of knowing this in Excel or whatever the case may be. Some people do, some people don't.
If they have like constant contact, whatever the case, some sort of email system, Most people have some sort of email system These days there's mailchimp or something like that and I like to build out a solid plan for them first because those are your low hanging fruits because they already know about you to some degree.
I like to look at those as my low hanging fruits where you can start to maybe get some engagement from them.
And then while then also tackling the beginning of the funnel where it's all right, what are we doing on social media to build brand awareness and increase our reach. So I like to start at the bookends right before customer and at beginning of funnel and develop plans for those first and then work my way inwards. And it actually is very counterintuitive to all of my clients and I have to repeat why it's so important to do it that way. And they understand in the moment when I'm mentioning it. But when as the gap starts decreasing and we get to, I say with a lot of my clients are probably at this point where we've got this really small gap still. And they're like, but it's still broken. I'm like, yes, but look at, we've got attributed revenue now coming in the door from this group which is help covering your cost, particularly of the people working on the stuff and me.
And then you've got the top of funnel stuff that the analytics have been climbing month after month after month, meaning you're getting more reach and more visibility so you're filling more into the top of the funnel and now we just need to fix the middle. So I would say that's another actionable piece of information of how I always start with clients is on the bookends of each and work my way into the middle.
[00:13:42] Speaker A: I don't know if you've ever articulated like that to me. And that's exactly what you're doing with ibd.
I mean, I just think about the paid workshops we've been doing. It's a lot of people that, you know, I don't know if we got like 3,000 people and go high level. And it's like you, we've been nurturing that, building more the, you know, the bottom of the funnel stuff. And then while at the same time I don't have to log into any of the social media stuff anymore, which is fantastic. But it's interesting that that also validates what you've told me in the past and I've witnessed where with Brian and Alan from idr, you need to start making money fast and like. And that's where I've seen so much frustration. I'M like, we're going to zoom out and come up with a new website. And it's like, no, I need to make money today. And so it's that that approach seems to reconcile with that approach, with that strategy.
[00:14:32] Speaker B: Yeah, and the one off projects do help, but that's how I look at them as one off projects. You gotta build the system and then you and your look and then the next milestone here is in tracking the analytics. So you have the system that's built and then you gotta build the technology to be able to report on each of the sections. And then you're tweaking the dial so you're like, well, my conversion rate is falling short at this point in my system.
That's because my website sucks and it keeps crashing every other day because it's on WordPress. And so we need to get off of WordPress and move over here to Webflow so that way I can have a lower bounce rate and higher conversion rate for my website. Like that's a very pinpointed, tactical thing. But if you don't have clear line of sight from the beginning through very end to actually track those analytics, you're just guessing at that point and saying, I think I need a new website. So and so told me I needed a new website and so I like to validate it with data before spending the money.
[00:15:32] Speaker A: So going back up to then those three big buckets and like when I think about a user journey, I think about different touch points because you've seen that squiggly line where I like have everything from like podcasting, social media, brand awareness all the way through down, like speaking, trade shows, cold calling. I mean like it's like it was just me throwing all the different things that people could do across that user journey.
How do you figure out what's the best approach for a company?
And then how does that evolve over time?
And the person I'm thinking about is our client that we do the monthly calls with, where a lot of social media stuff going on the top of the funnel that you've been helping with. And there was anxiety of like what this is what was working, or we think it's working trade shows, tracking the trade show contacts and stuff like that. So how do you determine like what are the 5 touch points or is it 10 touch points and then do we tweak it up or down? I mean, how do you think about actually what the sufficient touch points should be in the mediums now and how it evolves over time?
[00:16:43] Speaker B: I think a really simple way to answer that, I think, is that I don't see a user journey as one line.
There are several entry points into becoming aware of a business. And so if it's I'm going to trade shows and I'm doing social media, I would have a user journey from social media to customer and I would have a user journey from trade show to customer.
[00:17:07] Speaker A: Is that why you've always.
Because every time like I'm like, this is the PDF, this is the graphic I like. And you're like, cool. But like, it's not, it's not.
[00:17:16] Speaker B: It's cute and it looks so simple.
[00:17:20] Speaker A: I can always tell there was something missing for you.
I think that resonates probably what resonates with me and resonates probably with a lot of people where she's like, well, there's a podcast entry point and then there's a speaking entry point. Because like, for me it's like someone saw me invested, someone saw me, you know, they got referred the podcast from someone else or someone else, you know, I mean like there's all these entry points and so say that again then. So you have a.
You have all these tentacles and then it comes down into it. So there's different user.
Is there different user journeys or is there one user journey? How do you think about that?
[00:17:52] Speaker B: Again, I look at it as separate lanes.
So if I am on a highway and there's an exit and I can get to this city taking Route 3, or I could take the next exit and I can get to the city taking I95 and I could take the next exit getting to the city and I can take a back road. They're all getting me to the city, which is the CRM, the database. They're getting contact information into a system, but they're all coming from a different exit. And so what happens? So on Route 3, there's more stoplights on I95, there's more traffic on back roads, there's more stop signs. So it's what are the ideal points? So that I'm not getting frustrated and saying I've made it to stop sign number two. I hate going slow. I wish I was on Route 3 and going faster. Right. So it's just like knowing if you come through a podcast, you have been made aware of XYZ type information.
So your psych psychological state is probably at this level. And so I should make your next step the.
Let me think of an example from a podcast.
I should ask you to click on a downloadable. I should give you a link for a Downloadable because you have received value in my podcast. So you're more likely to probably click that link and give me your contact information because you have heard me speak, I've inspired you, you've become amazed with the thought process. So you're willing to now give me your contact information to access that next resource versus if you're coming from a speaking engagement, you might be more excited to, I don't know, receive some other resource for free, but you might not be wanting to give me your contact
[00:19:32] Speaker A: information just yet or jumping straight to like a ownership strategy call. Or people might refer to like a net new meeting versus a downloadable or assessment or something like that. So those different points, those different exits will present different opportunities for what they actually want, given the experience that they've chosen based on the exit.
[00:19:56] Speaker B: Exactly. It encourages the user to continue walking towards you based upon their initial experience with you.
[00:20:04] Speaker A: Got it. Got it.
[00:20:06] Speaker B: Which takes time to figure out.
I want to highlight that because that can be a really big area of frustration for a lot of clients and that they're like, Kim, we've tried three different things and it's still not giving us the conversion rates that we're looking for. And I might find out, well, if it was from a speaking engagement, maybe your pitch wasn't quite right at the event and we need to change your pitch so that way it better aligns with that next step. Or maybe the next step wasn't appropriate for how you pitched it and we need to change that next step. So there's a lot of tweaking and dialing in. So it does it. It takes time because each audience is different and each business is different. And so it's a. It's a learning process. It's not a, here's the bible for your type of business and what those
[00:20:53] Speaker A: steps should be, which I'm hoping that people listening in.
I think we're all sick of that. Like, we know it doesn't work. Like, if you're a e commerce business versus a professional services, I mean, if you're selling $300 products to consumers versus a $50,000 professional services assessment or an ERP implementation, it's so different and your ideal client profile is so different. And so I think that hopefully should resonate because it resonates with me. But then the. In what I like to say to people came in, like, how I think about expectation settings. Like, okay, this quarter I'm going to.
My goal is to fact find.
And I think one of the things that you and I help people with is it making sure their expectations aren't totally out of whack.
Because it's like, I mean I think that and this is why you and I started working together I think is that when I hear someone say that they need more growth, I'm going to end up with what do you need more time or cash flow or wealth?
And it's usually just a shorthand of like I don't have enough money.
Okay, why? And that's like the 7,000 things we need to do before coming to this conversation. And that's what I hear when people just starving for growth. And that's where then the out of whack expectations are. Kim, you're responsible for generating me more cash yesterday, which is just unfortunate for any other person that's in the revenue spot because it then does a disservice to this fact finding journey that you just described. Because the outcome of what you just described, of figuring out what dials to tweak, that's the whole point is that I mean we've got the whole fuck around find out, right? We want to do a 10 out of 10 and we want to do it fast, but we want to do it in the right order.
And I think there's so many people that just don't have the patience for that.
[00:22:46] Speaker B: I agree. I think a lot of it comes down to communication, right? Like I have had. So I have this client who's amazing, super patient and trusting. But I think that is a credit toward every month there's a monthly meeting of expert. Like before analytics were even available, it was, we've done this and this is the result that I'm seeing. And it is meeting expectations, not meeting expectations. Why or why not? I think communication is so important and then not coming in and saying I'm going to fix all your problems over the next three months and think life is going to be amazing. I mean everything in sales and marketing is compounding. It's not a flip of the switch and you can't turn it on and off. I've seen too many clients that try to ramp up for six months and they're like, nope, I'm not seeing what I want to see. I'm going to switch it off and try something.
[00:23:34] Speaker A: It's just like a crash diet. It's like, oh, here we go again.
Yeah, that looks exhausting. But just had an actual lifestyle instead of a crash diet.
[00:23:44] Speaker B: Yeah, exactly. So I think it's not necessarily just patience. I think it's communication is a huge part of creating that patience and showing Progress along the way.
So if you can say this month we did better than last month and here's why, then it shows forward progress. And I think that's really a lack of insight that a lot of business owners have because a lot of marketeers and agencies can't give that.
Or then they just always paint out the Rosie and they never point out the bad. I mean, that's almost every marketing agency, almost every. I have, you know, my favorite, I have two favorite marketing agencies that I'll recommend, but every other one that I met so far, they're like, look how great we did. I'm like, yeah, but what about all these analytics over here where you tanked and you lost the company a bunch of money? Like, oh yeah, basically that's just normal. But look over here.
Right? So I think it's that kind of experience that business owners get tired with and they. Yeah.
[00:24:39] Speaker A: So how do you determine as you're working from the bottom up and the top down at the same time to get in the middle?
What's like walk through maybe like a 6 to 12 month process of like. Because I wouldn't, I mean, where I'm coming at this from and maybe I'm thinking about it wrong again is so new frame of references, exits. Got it. Different experiences, different entry points.
What should we start doing, what should we stop doing, what should we continue doing? And then how do we refine that over time, knowing that we're fixing the plane while we're flying it? Like, I mean, I don't know what the.
How do you determine? Because that's the whole point of like working with you. And that's why I wanted to partner with you is like, I don't have time to think about what to do in what order.
And so like I'm letting go, I'm releasing the anxiety to you. Is it okay, like, tell me what to do. But like, so how do you figure out over a 6 to 12 month time period how to do that?
[00:25:40] Speaker B: So it's going to be a different. So you said start, stop and keep doing when you.
[00:25:44] Speaker A: Because does that make sense? Because it's like, okay, like let's take our, you know, one of the clients that we sit on the, the month of the ownership meeting with trade shows are we think are working.
And like there's, you know, and you probably have clients where like, just because we think it, it's working, just because we've done it forever doesn't mean it is working.
But there's narratives going on that have to be debunked or validated and then there's all of the other things that are probably being done. So like do you map it out and map those exits and then you start figuring out how to, like then how to actually figure out what to keep doing, what to stop doing and what to modify. Am I making sense here? I was trying to think about the approach.
[00:26:26] Speaker B: Yeah. So there's a couple of different things in my mind. If you are a business that is actively running varying marketing initiatives, then identifying what those entry points are and then identifying a way to measure the activity.
I typically like to look at a three month time period. So not just a one month. So one month it's like, oh wow, that loss is $22,000 but the next month it made us $32,000 and the next month it made a $16,000. Like so I like to look at a three month time series span again. That's something that owners typically have to wrap their head around. They're like, you need to analyze this for three months before you're going to tell me if it's a good idea or a bad idea. Well, yes, I want to give you an honest answer as to what the trend looks like, not just the snapshot in time. I mean if it's significantly bad, there's certainly like that example where it's like fire that vendor, fire that vendor. It's all bad. So there's some outliers, but normally it's the three months. Same thing with paid media. Track it for three months. What are our analytics look like? Same thing with investment into. Well, not necessarily so much. So like your SEO work that you can see right away like over the, that you can do like in hindsight too. All of this actually can do in hindsight. Over the last three months, what did it do? It depends on what data is available. I guess that's the short answer, Ryan, is that it all comes down to what data is available. What I can get my hands on, the social media stuff and the blog stuff is a lot easier because you've got all the Google Analytics and you've got meta analytics and all of that. So that I could look over like the past year or two that you've been using or just the past year because I don't think they go past 12 months, but the past year of your performance. But something like trade shows, if you're, if you haven't been tracking the expenses, you haven't been tracking how many cards
[00:28:07] Speaker A: and contacts and meetings did you have from that?
[00:28:09] Speaker B: Right. If you haven't been tracking any of that, then that would have to start, have a start date and count forward. So I think knowing what to stop start and keep doing it just requires analysis and data. And if you don't have it then you got to put that into place in order to start collecting it.
[00:28:23] Speaker A: Which I think is just like it, it's track, it tracks what I've been saying and what, how I've approached it for a long time is if we don't have the information, the first thing we have to do is start collecting the information even if it's half assed because we can't figure anything out until we understand that. And so like I just think about some of the other clients that I have that you're not working with that we're talking about the predictable revenue and bringing you involvement in all this because it's like, hey, this next 90 days, just start tracking it.
So then we can figure it out. But like we can't make any decisions without that. So it becomes this chicken or the egg and the, the get the data first.
Don't do anything irrational.
And it's like the way I keep thinking about this because I, you know, I came from a cold calling background so like cold calling background. I understand a lot of the marketing. I, it just makes me paralyzed because of how many different things you can do. But there was a, you know, there's always this approach in cold calling where like if you change your talk track every single time, you're not going to understand what works or doesn't work.
Like and so just, and it's so hard to just keep doing what you're doing and then figure out what to change.
[00:29:42] Speaker B: Yeah, that and also listening to your customers too. I actually have a recent example of working on a user journey with a client not getting the conversion rates that we were looking to get. Changed it after the three months first go around, didn't get the analytics that we were looking to get.
And so I posed to the executive team, I was like, why don't we just ask the contacts in our database what is it that is top of mind for them and the biggest challenge as it relates to what it is that you do. Instead of like us guessing of what to put into place, let's run a survey program over the next X period in time and find out from them. If we get like if we start seeing 82% say this, then we can say all right, let's focus our time on that then. So sometimes it's just stopping and listening and stop Stop thinking that you have all the answers or you have all the ideas.
[00:30:33] Speaker A: Why don't people do that more?
[00:30:35] Speaker B: I don't know. I just did that with one of my other clients. We ran it in May and June, and we just got the analysis back. A reasonable size sample, I think out of like, 500 clients, 350 we sent it out to, and we got it, like, just under 110 answer or something like that. So it wasn't awful. And, like, 82% of them said, we really appreciate this about your business. And it was like 76% of them said, you could be doing this particular piece better. Right. So it's like, really great feedback that we got that's now launching our entire second half of 2026. Our focus to focus on enhanced, like, building off of our strengths and building up our weaknesses.
So hearing the voice of the customer, I like to do that at least once a year.
[00:31:20] Speaker A: Speaking personally, I wonder if it. How many people resonate with this. I think there's a lot of fear of why people don't do that.
[00:31:27] Speaker B: I can say both owners were fearful of me doing it, and the third customer that I'm doing it with took me probably about three months of convincing them, like, we need to hear from our customers, and they finally just approved it, and it goes out this week.
[00:31:40] Speaker A: And it's so interesting to me because I resonate with that and what I. What I've been learning and what I'm. It's. I mean, it's like a leap of faith. It's like, okay, it's like, did we just, like. Like, do we accidentally get our customers? And I think that's like, just like, if we say something, they're gonna be like, oh, my God, you're right. Why am I working with you?
And I think it's part of that. It's like, oh, okay. Like, they're. They're working with you for a reason and helping with the icp. I think it builds that confidence. But what I've learned from our growing community, Kim, is like, how much grace our clients are giving us because they know that we're working on it, and they're listening. Like, the amount of grace that I have witnessed for us and what we're building because they're like, hey, we want, like, we're willing to give feedback, and we're willing to, you know, watch the bumps and bruises because you're taking it into consideration.
And so that. That's helped me reduce that anxiety. And then, like, let's let them tell us what we should build if it's the right ideal client profile and we're product market fit is tied to the icp, then it's like hey, we, that's what the whole MVP of the lean, not the lean startup, but you know, the, the iteration from the software world. Like let's iterate instead of building, you know, in a closet and then come back. And same thing with marketing messages. We did all this behind the scenes. Now here, let's see what happens. Like it just helps shorten that feedback loop which I have found helpful. So I don't know, I think it's fear is probably part of the situation.
[00:33:27] Speaker B: I think so.
I think so. Another piece of advice is start collecting where leads are coming from if you're not already and making sure it's easy to report on it. So if that's an Excel column or a field in your CRM system, start reporting on it because that's going to show you what's working well and what's converting well. So if 36% of your leads are coming from your podcast, but over a 12 month time span, only 2% convert into customers versus 16% of your leads are coming from trade shows and 12, by 12 months later, 16% have converted into like it's just looking at the math and stuff and trying to see like what your current day processes are generating you in terms of lead gen and conversion rates.
[00:34:14] Speaker A: It's, it's.
I love what you just said and what I think about.
There's some clients that you've worked that are not part of the IBD community that I know you work with that people get impatient and I think part of the problem is they don't have an owner plan but the people gravitate towards what they're good at. Because like I just think about the like what is the ultimate outcome that I want? Well, like when we were running imaging path, we knew that 33% of our leads close every month. We had 20 years of that experience. It was pure cold calling, Kim. It was like net new phone call. I mean people have heard me say this a thousand times but like we could see those conversion rates because then we could do forecasting and we, we like literally could take the 33% conversion rate to the bank every single month and every single year.
And it was because we knew cold calling really well.
But this whole omnipresence and you have social media and YouTube and like the algorithms and like SMS and trade shows, it becomes so freaking overwhelming that I think people clam up and go, I Know, I need, like, five stages, and this is the one part that I'm really good at.
But then you're just optimizing for that one exit, and people could be flying by your exit, and they could. They might want to turn at any one of those other exits because it's a different experience. And so, like, what you bring to the table is how do we get those? How do we get the data? What is good data, actually, right? Like, all this social media, like, okay, is it worth it or not? I don't know, all of the trade show stuff, all of the different ways of marketing, and then maybe we should kind of move into, like, the marketing and sales dynamic. But, like, I was working on one exit, and I felt really comfortable with that. But, like, every time I look at a client, it's. Whatever they're doing, is it radio, is it paid ads, is it, you know, like, it's one part and they're not looking at the whole thing, which could be huge lost opportunity. But it's what I was comfortable with.
[00:36:12] Speaker B: Yeah. And I think something that. That bears to mind too, is just what you're comfortable. And I think you said this, I'm just going to reword it. What you're comfortable with is ignoring all the other ways of attracting new business, and your competitors are doing it. So even with social media, a point that I make with that, even if, like, just for organic social, I'm not saying paid social media, you're doing social media posts, you're doing your reels, you're doing articles on your website. So that way you have a next step in the user journey for them to get to. That also helps with your SEO and stuff like that. If you're not doing any of that, your competitors likely are.
And so if you think about it, people reach out or take action when there is a catalytic moment in their life that causes them to take said action. So if I'm in front of you, Ryan, and posting, and you're seeing my stuff, and you're all like, yeah, whatever. Yeah, whatever. Yeah, whatever. And all of a sudden you have a needle, you're gonna be like, oh, Kim's been sending stuff out on that topic. I'm gonna reach out to her and see if this is something she could.
[00:37:10] Speaker A: Taking the exit. What exit is it?
[00:37:12] Speaker B: And what's the next thing the signs coming up to letting you know there's an exit that's coming. And if you're not posting those signs, your competitors are. And so you're not gonna be top of thought, top of mind for those people. I can also say it's really common for small businesses. I have a couple of clients actually, both now we're on going on a year.
And both of them, they grew their business by their Rolodex referrals. And that's not abnormal for a small business. That's how you grow is on referrals. But they both knew, they're like, this isn't sustainable and it's limited to my network and then the spiderweb of where my network grows to. And they wanted higher aspirations than growing at that level. Both companies at this point are receiving leads from other locations and closing deals from other locations outside of referrals. Did it take a year to get there? Yes, it took us a year to get there. But that's because you have to build everything that we've been talking about. Let it compound, keep adjusting the dials as you go. But both of them now are like, Kim, we're getting leads that aren't referrals for the very first time basically in our business.
[00:38:15] Speaker A: How happy were they?
[00:38:16] Speaker B: They're ecstatic. Right. It frees them up. They're not as stressful. They're like, they're like that. Like my anxieties are not as great because I now have more, more revenue generating sources than just me. But it takes again that patience and that communication and the willingness to allow the process to happen.
[00:38:37] Speaker A: Agreed. And I think the, to give, to give an O to everybody listening is like we're just so used to people pissing our money away and like in doing in the wrong order for the wrong people, for the wrong icp and, and, and, and, and, and so if we're taking this approach, approach, and I'm going to frame up a couple of things, we can figure out how to, how to dive into them.
The constraints that I like to approach this at, which is like when we get to this milestone 14, we should understand, okay, how much am I willing to pay to acquire these clients?
Like, we have to understand that because when we have a three statement model, we can see how much cash is going to come out of that owner's pocket. Right? Because people can say, well, just do all this. It's like, well, I don't have enough money to do that. And this could be a $200 million company or $2 million company. The same thing applies. So if we can identify what percentage of gross profit can you spend to acquire that client and product, different products and services could have different gross profit ranges and guardrails, which we can Identify. So literally what you and I do. And that Advanced solutions case study is we have flagged in the income statement everything that's associated with client acquisition costs, right? So if it, is it sales, is it sales commissions, is it paid media, is it trade show? And we flag it all. And then in the KPI tab, we can see we're out of balance with how much we're spending based on the owner's goals of cash flow and or the industry. So we're balancing it for math and then saying, okay, sales and marketing revenue team, this is all we've got to work with.
So it's maybe we have to do the owner referrals now while we, Kim, look at these few things and you're helping prioritize where to spend that, those dollar amounts and making sure that people aren't lighting money on fire and then moving towards that. What good looks like over time.
I just can't stress that enough because when we do things out of order, order without the right constraints, without the right perspective now and over time, that's how we just light money and time on fire.
Because your approach makes a ton of sense. And then we can lean into something we don't know as well.
It's like, okay, Kim, I was like, I don't want to be on LinkedIn at all.
Can you help?
The emails or whatever it might be, the owner can fill the gap that feels good for them while leaning into new things.
But then there's Math and objective KPIs that can see whether we're working or not.
[00:41:13] Speaker B: Yep, yep. No, I agree. And getting to that point, I mean, it does take time. You have to have like you're tracking your financials the right way and all these other things. But it's important to get there. So that way what we're talking about is what good looks like. And it takes a while to get there, but once it's there, it does turn into that predictable revenue engine.
[00:41:32] Speaker A: But I think, Kim, like what you said is so important is it takes time. But like all the other stuff and this is why you and I hooked up is like, it takes time.
But I believe, and I'm curious what your thoughts are on the people you work with because you've got a couple different buckets of people. There's the IBD community that you're heavily involved and then you have some people that are not.
I believe that it people are okay spending more time if they know that they're not going to go broke.
It's like, okay, this is gonna Take some time. I can still make my cash flow. I can still pay all my bills and all. All that stuff is gonna be fine.
And now we're gonna give ourselves some grace to do this over time. We don't need the quick hit.
And so like that, like I'm hoping because like, this is the answer is taking time over and taking the time and doing it in the right order. But if that, if that dysfunctional urgency is there, I need to lose a hundred pounds yesterday.
Okay, there's surgery for that, you know, Otherwise there's the right approach, which takes time. If you show up every day and do the normal things, you'll have the results. But I think it's that urgency that's that dysfunction.
[00:42:45] Speaker B: That's a really good point. I like that a lot. Yes, I agree with you wholeheartedly. And sometimes the urgency is hidden. And so again, questions from like the CRO perspective, like if you are in that CRO role or your head of sales and marketing, whatever your title may be, asking and finding out the anxiety level of the owner is really important because they're not always going to tell you. I've been blindsided by that before too. Where all of a sudden they're like super stressed in a meeting. I'm like, what happened? Like, everything's going well.
[00:43:17] Speaker A: He tapped my line of credit for 200 grand, came and I don't have any money.
[00:43:20] Speaker B: And I was like, well, that would have been good to know in advance. Like we could have been talking about that.
Exactly. So communication is really important there. Does that lead us next into the cost of acquisition or do like, is there more?
[00:43:33] Speaker A: I think the cost of acquisition.
Yeah, yeah, I think it could because like, and then inside of that, I think is the, the roles of sales and marketing because all of those, like, I mean, they're all in the income statement, right? Like in SGNA is all of the stuff. So we're just flagging the GL codes to identify the total costs and then so understanding who has the roles and responsibilities. So yes, I think client acquisition costs, roles of sales and marketing, where things are handed off and stuff like that. I'd love, love to hear your thoughts.
[00:44:08] Speaker B: I'm jumping to the handoff between like the. Where sales and marketing lie. I've actually had a couple of calls this week alone.
That's a really common area where the system breaks down. Where it's sales says marketing is not giving me qualified leads and marketing says sales isn't following up fast enough on the leads that we're giving them or Sales says, I didn't know that I had those leads in the CRM system. And marketing says, I've already told sales three times how to find those leads. Like, it is a extremely common butting of the heads. Just like between sales and production.
It's the same type of dynamic between sales and marketing. And that's why I like to take the sledgehammer, crash down the brick wall between the two of them. Like, you are one team because you are the revenue engineer. Right, Exactly. So having clear communication, clear expectations of when things go from sales to production is just important. As when sales leads turn into monkeys on your back or the trail goes cold. When do they go back into marketing? Right. So marketing to sales. And then sometimes it has to go back.
[00:45:17] Speaker A: Yeah.
[00:45:18] Speaker B: To get off of the sales plate. And having that clear delineation isn't always easy. And sometimes it becomes a little territorial where it's like, well, no, I want to talk to those leads. And marketing says, they're not ready for you yet.
Right. So it's just. It's very interesting it has to be overseen by a leadership role because otherwise the sales and marketing team, I don't think would ever figure it out between just the two of them.
[00:45:43] Speaker A: How do you go about doing this? And one of our clients that just onboarded is going to be talking to you specifically about all this stuff. Because I would venture to say that most people.
I've been beating the drum on the CFO for like years and years and years. And it's very specific now that I've ingrained that into hopefully most people's heads. But then that, like, I. I don't know if I've ever met someone that has a CRO, to be honest.
It's the same thing with the cfo. I mean, there's a. There's some of them out there, but like, okay, like someone that owns all of revenue.
So if we assume that people listening in, don't they either have a sales director, marketing manager, whatever freaking title they gave the person. This is why you and I are. Are beating the drum of the function. And the role is more important than the title because it just has. These things have to be done. Your size of the company in that the executive compensation, I think episode you and I talked about.
Titles don't matter. The function and the output is what matters.
So how would you help someone listening and who doesn't have that clear delineation has some sort of hodgepodge Frankenstein of sales and marketing, but wants to have someone oversee it. How they take that sledgehammer and how they start working towards that.
[00:46:59] Speaker B: How do you approach this in this scenario? Does this person have somebody overseeing marketing and somebody overseeing sales currently? Or they're just like, let's assume it's a shit show?
[00:47:12] Speaker A: Which I'd say is probably a pretty common situation. There's people doing things that are trying to generate revenue. Like, how do you start working towards someone owning revenue? And then because to your point, and I think it's a very valid point, without a leader who their incentive, like you as the CRO, the incentive is, can we need revenue predictably on the income statement every single month?
Without that total alignment on that one KPI, everybody becomes territorial for obvious reasons.
[00:47:46] Speaker B: I think that probably falls more in line in like the EOS realm, where you first put together like an accountability chart and then you put like the ideal roles that would accomplish the goals that the owner has and then not think about the people. Not think. Don't put any of the names in it. And you just build out the accountability chart. And then once you're like, this is what can carry my business to the next step. You look at your names and see if you have people to fill. And if you don't, then you know you have gaps that you need to go announce and you might end up with people that aren't the right fit on the bus anymore.
[00:48:19] Speaker A: The person that I know is listening to this, that had this. I had this conversation with this week.
You repeated exactly what I said. And so we're colluding together.
[00:48:31] Speaker B: Yes.
And we didn't set that up.
[00:48:33] Speaker A: I promise I would agree with you. And like, to get from here to there is difficult.
And I think that's the point is like, you know, it. What we're trying to do with this podcast and what you're trying to do as you lay out the predictable revenue module, trying to incentivize and help people try. Like if.
Let's say you have two people. I'm curious on how you would go about this. Let's say there's a sales and marketing, two separate teams with two people that are not a CRO.
You've organized it like there's a CRO. And then there's clear roles on a team where you broke down the sledgehammer or you took the sledgehammer to it. But now we've got a user journey where we've got clear handoffs and stuff like that.
How would you.
With the. With the blank face. But accountability chart, What would you do? Because you probably have clients like this. Like you. We hope that someone's going to rise up. Maybe the salesperson can be the CRO, or maybe it's a marketing person. But like, you can only have kind of one hierarchy of this.
[00:49:36] Speaker B: Right.
[00:49:37] Speaker A: And then you have to have conversations in between. I mean, how do you think about going from here to there?
[00:49:43] Speaker B: I often see it is that it's probably the owner. Just like the owner sometimes wears the CEO hat, they're also wearing the CRO hat until somebody either has proven that they can do it or they hire somebody to insert into the role. And again, like we said, it doesn't have to be CRO. It can be my. My title was vice President of sales and marketing.
[00:50:04] Speaker A: But that was your. That was your function, though. You were the.
[00:50:07] Speaker B: Right. So I oversaw the sales and marketing like I was the CRO. But that's what. I guess what I'm trying to say is like, when you start putting the word chief into titles, it can get really expensive. So if you're a smaller entity, it can be even. I was first the director of sales, director of sales and Marketing, and then the VP of sales and Marketing. But they were all the same function where I was responsible for the revenue coming in the door.
[00:50:27] Speaker A: Yeah. And you and I talked on the compensation module like your pay went up significantly over time like that too. And so I agree. And on that client call this week, I was like, we don't use the CRO, CFO and COO titles like rigidly all the time. That sometimes is inside of the IBD community. We're saying like for language purposes, someone has to be responsible for these three KPIs. But if you want to label the person Director of Sales or director of Marketing or whatever, the title that's appropriate for the size of company and the. But the, the functions are the same, right? Like in this, looping it back to breaking down that wall is having someone, whether it's. So your point of the owner operator, who's a CEO, who also is the CRO in this situation, has to have those conversations with those people and they're the ones owning the user journey.
[00:51:17] Speaker B: Someone has to own it.
[00:51:18] Speaker A: Right?
[00:51:18] Speaker B: Right, Right, exactly. If they're two separate people, there has to be a person above them that still owns the entire function because otherwise you're going to innately always still have the marketing blaming sales and sales blaming marketing. So there has to be somebody that's like, no, you're responsible for these KPIs and you're responsible for these KPIs, and that's the bottom line.
And then These are the KPIs that I'm holding each of you responsible for. And then that's why the CRO role is responsible for all those KPIs.
[00:51:49] Speaker A: Yep.
[00:51:49] Speaker B: Across the board.
[00:51:50] Speaker A: Yep.
Someone has to be the one that.
Because it's one puzzle. And like the revenue is part of the. It's. It's just a Russian doll. It's just all this nesting. It's a fractal. And so the person that is the owner operator has to do this. Like and I think that's where there's a lot of. I watch a lot of clarity but also anxiety. Like oh my God, I'm. I'm literally.
I'm the CEO, the owner, CRO, CFO and coo. Because I don't have enough infrastructure to hire a million dollars of payroll.
[00:52:21] Speaker B: Right.
[00:52:22] Speaker A: Okay, that's a bummer.
Let's grow and get a path to when you can hire a.
Someone like you as a CRO coach or if they get to a point where they actually have the doers because you're not doing any of the work really. I mean you still have to delegate down. But someone has to be responsible for that outcome in order to navigate those territorial conversations.
And because like we have one budget. Right. We have one client acquisition cost. It has to, we have to identify where on the income statement are the things that we're going to do that yield what results to that user journey.
[00:52:58] Speaker B: Yeah, yeah. And I would expect that somebody that's in that leadership role over sales and marketing, they're going to have a much higher skill set in terms of analysis, strategy, complex understanding of market environment, so on and so forth where leading the budgeting process. Correct. Like all of that is a much higher skill set than somebody that's doing graphic design and website development.
[00:53:25] Speaker A: Yeah. And I even said to the client is like even the person that's the hoorah person going on right. Alongs with the sales staff might not be the CRO.
[00:53:33] Speaker B: Yeah.
[00:53:34] Speaker A: So like the most extrovert person who is like the best client facing, you know, sales director might not be a good CRO.
[00:53:42] Speaker B: Yeah, well, because it, there's a lot of analytical skills and objective skills. It's not so much. I'm certainly not an extrovert. I pretend to be one when I need to be and can do a good job at that. But I'm very much an analytical introverted look at the data.
[00:53:56] Speaker A: That's why you're super excited to keynote at the IBD summit, right?
Oh no, you're Having a hot flash right now.
[00:54:05] Speaker B: I'm just kidding. Just kidding. Nope.
Oh. But yeah. So it does take different qualities and different skill sets than your best sales. I've made that mistake where I've taken my best salesperson and personal promoted them into a management role and that just.
They could have been a great sales manager if I had given them more time for training. But I was like, nope, this person's crushing it in sales. And I think that I'm just going to do this right now and we'll follow. Well, I'll do the training after the promotion.
And that's just. That was a big mistake. It hurt this person and the sales.
[00:54:45] Speaker A: Probably a Viceroy.
[00:54:47] Speaker B: Well, and it hurt their sales team's morale because they weren't understanding why this person was able to be promoted and not them when the skills weren't there yet. Right. But I feel like that's a common mistake where you hide or you promote people where you're like, this person can reach that point at some day.
My advice is you wait till that person has reached that point before you promote them.
[00:55:08] Speaker A: Oh, my God. Well, and like, and maybe it's never there because, like, I was a great individual contributor as a salesperson.
I think being a sales manager was my least favorite job I've ever had. It's like, do what I did. Call cold call, end the story, show up earlier.
I've grown up a little bit since then, but I think that story is very repeatable. It repeats over time. I know we're getting short on time because you got to get rolling here. How would you summarize how this whole. The whole milestone works? Like from user journey, client acquisition cost, someone that is going, okay, nodding along, like, what. What would be the one thing that they should think about?
[00:55:46] Speaker B: The one thing that they should think about or do? Taking the assessment to identify your weakest component in this milestone.
[00:55:56] Speaker A: And you as a CRO will put that link into the podcast show notes.
[00:56:01] Speaker B: Right? Yeah. Okay. Yeah. Because that's just. You want to start with your weakest link and then it also help you identify your strongest component that you can build off of. So that would be. My recommendation is taking the Assessment is your 1 action item. My 1 summarizing thought.
This is a very huge milestone. It's not something you're going to get through in a month, in three months, it's going to.
And it's compounding.
So it's not. I've done this and it's all set in stone, and now I can set
[00:56:33] Speaker A: it in front of it, it's never done.
[00:56:35] Speaker B: It's never done. And that's why it does con. It requires constant attention.
[00:56:40] Speaker A: You know, what you and I were talking about as another final thought here is it's. It's really as we zoom all the way out to the. The owner's playbook and IBD.
The.
All of these.
So milestones being the 27 that are nested under the 9 mile modules that are nested inside of the whole system, they're all potentially overwhelming.
But the whole point is to learn what's appropriate right now.
That's why we've got the boardroom blueprint. Like, here's the big picture, here's the inception point. You have a plan, I'll do the plug for us that we got one kicking off in August. Here we got the owner's playbook and the whole deliverable that they have. You and I just did a video so they can go to the coaching tab where you and I walk through for like, I think it was like 40 minutes. So it's a lot, but we walk through. Here's exactly what you get.
But I think what the, the results that I've seen and personally why I built all this is we can't do it all. And so instead of having a shitload of anxiety all the time, I just want to know what foot should I put in front of myself tomorrow? Knowing that it's the right step in the right order, that just shows that I have progress and I can't do it all at the same time. So it doesn't mean that we're going to be there tomorrow. To your point, like, this takes a lot of time. This is a huge milestone and I think people jump straight here.
They go through and they bypass 13 milestones and go more growth. It's like, well, guess what? If you sold more shit, you might run out of cash because of your inventory and working capital.
You know what I mean? Like, so, like there's an order that you and I are doing for all this stuff, but inside of the whole IBD system is then this milestone. Like just take it one bite at a time. And that's the whole point of that assessment. So inside of all nine modules we've got the predictable revenue OS assessment.
So then even inside of that it's like, okay, what's the one thing I should tackle today?
[00:58:30] Speaker B: Yep, yep. I love all of that. It's true order of operations for a reason.
[00:58:36] Speaker A: Next week. What are we doing next?
[00:58:38] Speaker B: Governance and systems and forecasting.
[00:58:41] Speaker A: Don't build out your CRM and all of that stuff if you don't know your ideal client profile is. Or have a user journey.
[00:58:48] Speaker B: Exactly.
[00:58:49] Speaker A: Awesome. Thanks, Kim.
[00:58:51] Speaker B: Thank you. This is a lot of fun.
[00:59:02] Speaker A: This episode is brought to you by Kastos Productions.
