Ep. #694 - Making Marketing Adjustments
In this episode of Startup Hustle, tune in to Part 34 of “How to Start a Tech Company,” as Matt DeCoursey and Matt Watson talk in depth about making marketing adjustments.
Covered In This Episode
So, you’ve officially launched your product or service. But something is not working with your go-to-market strategies. How do you make marketing adjustments? Should you throw everything away or just make small changes? Matt and Matt are back to help you solve this problem.
The Matts discuss what happens when your go-to-market strategies don’t work. They share the importance of testing and gathering relevant data to know which part of your strategy is working. In addition, Matt and Matt share their experiences in making marketing adjustments.
Want to know more about making marketing adjustments? Join the Matts in this Startup Hustle episode.
- Introduction to part 34 of the series (0:32)
- People will promise you everything (2:42)
- How do you adjust your marketing plan? (4:08)
- Getting relevant data (7:33)
- Being first to market is a key component (12:26)
- Changing the entire strategy vs. a part of it (17:11)
- Figuring what works and what doesn’t (19:36)
- Conversion (23:13)
- Half of your marketing budget is always wasted (28:25)
- Marketing in a competitive market (32:27)
- Key Takeaways (40:44)
- Wrapping Up (43:52)
With certain types of startup startups, it’s a race to grab market share, right? Like, when Uber came out, they wanted to focus on being first to market before Lyft or somebody else gets to market, right? So they’re willing to spend a lot more just to get market share and buy at that point.Matt Watson
Sometimes, the effective strategy isn’t always around, like, hey, let’s buy ads. It’s sometimes just doing something a little different or making some other improvements.Matt DeCoursey
As a company, you always have to be kind of thinking about other marketing strategies and what works that could be totally different channels. But always do a kind of slow and steady testings, right? Don’t take 100% of your budget. Throw a few dollars at some things. See if it works. You may not get enough scientific data if you know it’s a really small fraction of your budget but test the waters right before you go all in.Matt Watson
You got to keep your finger on the pulse of what you’re doing. After decades of owning and managing and doing business, I think that the kiss of death is expecting something that works now always to work. There are always going to make adjustments. If you wait until halftime before making adjustments, you’ve waited too long. And, you know, that’s all of it when it comes to marketing and marketing plans. It is amazing how quickly you can run through a ton of cash from not paying attention. So pay attention.Matt DeCoursey
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Following is an auto-generated text transcript of this episode. Apologies for any errors!
Matt DeCoursey 0:01
And we’re back! Back for another episode of Startup Hustle, Matt DeCoursey, here, with Matt Watson. Hi, Matt.
Matt Watson 0:07
How’s it going, man?
Matt DeCoursey 0:09
I’m trying to make some adjustments and make few changes in my life.
Matt Watson 0:15
Can we figure out how to get a billion people to listen to this podcast?
Matt DeCoursey 0:19
I mean, we’ve had a couple of million listens to it. So I guess we’re a part of the way there. But I guess it’s only a small portion of a B.
Matt Watson 0:27
Yeah, we got to figure out how to adjust our strategy for full world domination.
Matt DeCoursey 0:32
Yeah, I think that’s exactly what we should talk about. Now, you know, this is the 34th, part of our 52-part series about how to start a tech company. And we’ve gone through a lot of the parts about building the tech and getting to market. And, you know, we created this go-to-market strategy. And now we’ve sat back and looked at the results, and we got 2 million out of the billion. So like you said, We’ve got to make some adjustments. Now, before we get too far into making adjustments. Today’s episode, Startup Hustle is brought to you by FullScale.io, helping you build a software team quickly and affordably. That’s an adjustment that a lot of people are being forced to make. Because the world is really short on software developers, and it’s made the market pretty tough, but Full Scale will help you get it done quickly and affordably. Alright, so marketing plans and adjustments in general. Where do we start?
Matt Watson 1:26
Well, our last episode was about go-to-market strategies and stuff. We’ve been covering that, and I think, for those of you who are listening to this episode, if you didn’t listen to that episode, definitely go back and listen to we talked about different go-to-market strategies and traction channels and all that kind of stuff. But I think the key today, right is, is once you pick one of those, you got to figure out if it works. And if it doesn’t work, how do you adjust?
Matt DeCoursey 1:52
Yeah, when you know, adjustments come in a lot of shapes and forms. I mean, they could I mean, I mean, that’s literally like when I say where do we start? Because it’s that broad? I mean, it depends on the marketing plan you have in general, sometimes the best adjustment that you can make to a marketing plan or campaign is legitimately just turning it off.
Matt Watson 2:14
And that’s true. Sometimes you’re just burning money, right? And, you know, we, we always joked when I worked at VinSolutions, about car dealers, because everybody would go to a car dealer and tell them like, you can buy my thing, and you’ll sell two more cars a month, and you can buy my thing, and you’ll sell more cars a month, and you’ll buy my thing and you’ll sell more cars a month. And we would always joke was like, what if the car dealer did none of those literally took the sign off the building? How many cars? Would they still sell?
Matt DeCoursey 2:42
Right? That’s a good question. That’s a good question. Because I mean, on some levels, there’s, there’s a zillion things that’ll that’ll market you.
Matt Watson 2:48
I mean, everybody will promise you everything.
Matt DeCoursey 2:52
Yeah, like, I’ll give you an example. I, I owned a Ford truck in the past, I bought it from a Ford dealer. And I just Googled for dealers, and Google told me which one was closer to me. That didn’t require anything. That’s pretty damn clear. Yeah, it didn’t require any ads. I didn’t see a newspaper. I didn’t see any of that, you know, you talk about the changes. And the full page newspaper ad was not required to get me in. But, you know, I mean, overall, I think when it comes to a marketing plan, or strategy, or any of that, if you ask when it needs adjusting or revising, maybe the answer is regularly, you know.
Matt Watson 3:33
It’s kind of a nonstop fine tuning. Right?
Matt DeCoursey 3:35
Right. Yeah. And that’s another thing too, is, you know, the ABS go stale. I mean, things that things that worked one month, begin to slow the next month. And you know, I think it depends on your audience size. And, you know, so I don’t know if there’s a blanket answer for when does a marketing plan or strategy need adjusting or revising? It’s usually not daily, I think you can drive yourself crazy doing that. So, I mean, next question is I mean, so how do we make adjustments?
Matt Watson 4:08
Well, to follow up to your point, though, some of it is definitely seasonal, or event based, right? Like, oh, we’re doing a bunch of marketing because it’s Christmas or Black Friday, or, or whatever. Right? So and another example, this isn’t Nitro. One of our competitors had a huge hacking thing go on. And so we did some different marking around what happened to one of our competitors, right, and then eventually, maybe that kind of wears off, right? It’s like, okay, I’m gonna we’re gonna figure out a different marketing message, right? Like, it just kind of never ending and, and some of it’s just completely weird event based or seasonal stuff, too. It’s not so much that the message isn’t working. It’s just like, it only worked for a short amount of time because of other factors going on.
Matt DeCoursey 4:50
Well, and some of that, too, is also the size of people that the size of the audience that you’re advertising to, we talked about that in the last episode, you know, then using Full Scale as an example. So There was like, something like 10,000 Chief Technology or chief information officers that have their job title showing on Facebook. That’s a really small advertising size. So like, if you think about it, even if you were showing 1000 impressions a day, 10 days later, maybe everybody seen it, you’re getting close to it. So how many times do people see it before? It just kind of I don’t know, I guess aligned with that. Yeah, I see a lot of that on Facebook and LinkedIn, I’m like, Wow, this ad again, again, again, again. Now, here’s the thing is maybe maybe that’s what it takes in some of those cases, because maybe it’s the eighth impression that finally gets the click, and that’s what they’re looking for. But, I mean, overall, that’s usually not a good thing. So you know, I noticed the same thing from anything from promoting this podcast to Full Scale to advertising for employees, the cost per click, and the cost per conversion, usually rises over time for that very reason.
Matt Watson 6:00
Yeah, you get the low hanging fruit. And then everybody else is kind of left and you just keep hammering away at them, but they never respond, right.
Matt DeCoursey 6:08
So one of the ways to make an adjustment is to move that same ad that was successful to one group and try it on different audience sizes. So I do that a lot, actually, with this podcast. So just kind of moving it around. There’s a lot of very interesting built in technology to really all social platforms at this point to which lets you do things like create lookalike audiences, or expand, like, let their AI show ads to people or, you know, groups or whatever, that are very similar to the people that have successfully clicks or follow you or do whatever I mean, and sometimes adjustments are as simple as, as letting the very sophisticated AI at Google, make some changes. But that can also run out that can also that can also not go well to you know, so I honestly, I find it to be very interesting, because I can start an ad the same ad to their to the same audience. And if they’re in different campaigns I can a&b, like one of them will will be hands down like twice as good as the other one. And I can’t really explain why. Because if it’s the if it’s a similar audience, like why is this one converting at such a high rate? And, you know, I mean, I think some of what you need to think about when it comes to making adjustments is also looking at, like, what are we measuring?
Matt Watson 7:33
Well, and the other challenge you have is, do you have enough data that it’s even statistically relevant, right? You’re like, Oh, I did $100 worth of ads on Facebook, and I got three clicks like, well, if you got two or four, it’s going to dramatically change your statistics, right? Like, it’s not, there’s not enough statistical relevance to it. And it might have been you testing they had hospital. Right. So it’s, some of that is just really difficult, right? Like, and to your point earlier to like, you also run the ad for a week or two, and like, whoever was going to respond to the ad has already responded to it, and the other people just keep ignoring it. So it’s some of that it’s just so it’s so difficult. But the one thing that you talk about a lot in previous episodes, right is it’s all about test, test, test, it’s a B testing, and continue to test things and figure out how to improve it. And that goes in your marketing message. But it also goes on things like our website, right? Like, oh, if we change this call to action, or we change the different ads, like on our site, different messaging, I mean, that’s where you got people that spend like crazy amounts of money testing the color of buttons and crap like that. But that’s only really relevant to and you’ve got an astronomical amount of traffic. Again, if you’ve only got 100 people that come to your website, it’s so hard to statistically get relevant on it.
Matt DeCoursey 8:48
Well, you know, we’d like to use real life examples. And recently, I made some changes just to the to the Full Scale website and the Full Scale blog, that just funneled people in a different way, and just kind of push them towards the result that we wanted. And we really in the end when it comes to making adjustments, like Okay, so what’s your goal is your goal, like if you’re an online store, your goal is to make sale, right? If you are a SASS platform, your goal is to get maybe to get people into a free trial. But none of it matters until you’ve created either up a buyer of some sort. So I mean, I think all of your adjustments should be centered around the buyer, you know, and if that’s if you’re looking at other stuff, and this it’s really easy to get off track with this, you know, people will get obsessed with likes or views or impressions. But really in the end, like unless you’re unless you’re like Eric Perkins from Startup Hustle TV, who literally gets paid for views and subscribes and stuff like that on YouTube, then none of that shit matters unless you’re converting so you know, I mean, the conversions need to be the guide and that’s the almighty dollar and you know where or you’re creating it. And then you know, another thing too is I think as a business, you will now talk a little bit about some of the crazy, the crazy money that that software startups put into getting and gaining customers and clients because it’s like it, when you look at it, it just it’s kind of like mine. It’s like mind numbing, and all of that you’re like, wow, like you’re willing to pay that much for a user?
Matt Watson 10:26
Well, and that’s for sure. One of the big differences here, right is, what is your company sell? Is it an enterprise sell? That’s a big ticket? Or are you selling something, you know, you’re like Netflix, and I get $10 a month, and it’s like, okay, I know, my customer acquisition costs are so high. But I’m still sending out all these ads, you know, putting fliers in mailboxes. And when somebody signs up, it’ll take like a year for us to actually be profitable on the customer, right? Because at Netflix, it was, you know, 10 bucks a month back then or whatever. But that’s totally different. If it’s a large enterprise sale, right? If if you’re selling a product, that’s $100,000 a year, sure your cost per click, and lead gen costs and stuff like that can be a lot higher. And you’re absolutely right about that. And then also, with certain types of startup startups, it’s a race to grab market share, right? Like, when Uber came out the you know, they want to focus on being first to market before Lyft or somebody else gets to market, right. So they’re willing to spend a lot more money just to get market share and buy market share at that point. And one of the things that was always funny, to me, at stack phi, we’d have competitors that would have like full size billboards style ads, like in the airport, like you’d get off the plane, and there’d be a giant, you know, thing on the wall about AppDynamics, or whatever. And it’s like, a weird place to put an ad, or New Relic actually had billboards along the highway in Silicon Valley. And so people, people do some interesting things. And sometimes it’s, it’s just them trying to buy the market, right, they’re trying to get market share. Because yeah, customer acquisition maybe costs or maybe high, but every time they sign up a new customer, their company’s worth 50 times, whatever the annual revenue was, right? So then they’re gonna go raise more money. And it’s just like a VC shell game, or customer acquisition costs don’t matter, because your revenue multiples are stupid, like, it’s just kind of a whole different game that’s outside of reality, to me.
Matt DeCoursey 12:26
And it is outside reality, it feels like it. But there is something that to be said about the being first to market. I’ll give you an example. I’ve never used left. I used ever, like a long time ago, and it’s always treated me well, I’ve never really had a reason to use anything different. It’s on my phone, it’s got my card in it, like, I just don’t really care, it works. Now, on the flip side of that you’d like the food delivery thing. I finally, three, three apps later have fallen in love with DoorDash, you know, because it’s just and now I get and I won’t throw the others under the bus. But, you know, I had one that I ordered three different times. And two of the three times I didn’t even get my complete order. Yeah, you know, and so that wasn’t working for me. So I moved down the line, you know. And so I mean, I think that the question is, is how long is that user or that customer going to stay a customer right now. Now it is a key component. Right? And the theory of being first I didn’t ever see an Uber ad. I remember this was a long time ago, and I was just someone who was like, hey, we’ll take an Uber. I was like, what’s that? Yeah, you know, and we didn’t, I was like, Oh, this is really cool. This is really neat. And then I ended up putting on my phone like the next day and got a ride with it. And I was like, Oh, this is cool. But so there’s something to be said about the virality of being first and getting that out there because in some things like well, giga book is a good example. So you know, with Giga book you’re using. Our users are taking in, you know, taking appointments and doing other stuff, and you get notifications, reminders and stuff like that from Giga book, there’s some internal advertising that occurs to the actual, right, the network effects and you know, that can be powerful too. So if you’re trying to stir that up, I mean, who knows what the value is. Now, if you’re selling a physical product, there’s a lot of different things. So you see a lot of competition for like subscription boxes and stuff like that. That’s a recurring sale that goes on over and over again. Now, long before I did any of the stuff that I did. I want sold pianos, and I’ve mentioned that before that’s like, for most people a one time purchase, right? But it was a huge purchase is a big dollar like you buy a grand piano, maybe 50 $60,000. And the margins were good. And so you know, we would sometimes spend a hell of a lot of money getting people in but we had absolutely no expectation of return business, maybe a referral but no one was coming. I mean, very rarely. Now people would trade in an old piano they already had but it wasn’t that they bought it from us because They,
Matt Watson 15:00
they need another one for their lake house and their vacation house in Tahoe, right? Like,
Matt DeCoursey 15:06
yeah, maybe. Well, those those clients and customers are few and far between. Now I did have one guy that that was a very well known business founder when I was in Washington DC, the guy that bought two grand pianos from us, he came in and used his black card and spent 75 grand and then came back a few months later and bought one for his girlfriend. And I was like, wow, okay. So that’s how that goes. Now, there’s, you know, there’s a, there’s other things to be considered too, like. So when I worked in the music industry, and I used to work for Roland and they made so I watched this metamorphosis from the brick and mortar store to the estore come in, and the comp and advertising competition was so fierce because everyone sold the exact same thing, like, you know, so there’s, there’s sometimes a point of diminishing returns, where you just simply have to look back and, and say, This isn’t worth it, we’re making no margin, or we’re losing money, and sometimes like, so, you know, I like watching these gold shows, like where they mined gold, I’m just so fascinated at how much effort they go through to fill like a jar with gold. You know, unlike all the effort now, they often refer to gold fever, because people first see the gold and they get gold fever, they just want more and more and more and more and more, and they’re willing to just keep going and going and going. And the problem is, is they end up running out of money or they go broke, because either they don’t find the gold. And it was really expensive, or they overspend what they can what they can get back. So you got to make sure I think Part One of the things that making an adjustment to a marketing plan is asking yourself in some ways, do I have gold fever? Am I just obsessed with? With any of it? Because eventually it all has to balance out? Unless I guess unless you’re the federal government, and then you just keep spending? Yeah, but the rest of your the rest of us either, you know, I mean, there’s, there’s a lot to be said there. So, I mean, okay, so when you go to make an adjustment, do you just throw the baby out with the bathwater or like, is a good idea to change the entire strategy or just part of it? Or?
Matt Watson 17:11
Well, you definitely gotta have something to baseline off, right? You’re like, if you’re doing content marketing, like, Hey, this is what we’ve been doing, this is the results we’re getting from it. And then being able to make changes and have something to compare back to right, like having some sort of baseline is important. Because you don’t want to just randomly change crap all the time. And you really don’t know if it works, or don’t you’re like playing Whack a Mole. And you know, you have nothing to compare to.
Matt DeCoursey 17:33
Yeah, I agree. I think that I mean, I think that if you’re going to throw out your whole plan, then it needs to be because the whole plan sucked. I don’t have any problem with throwing out all the parts that don’t work, because you keep 20% of it, that’s highly effective. I think that’s a good idea in a lot of cases, especially if you’re trying to figure out what your traction channels were at all, you know, it’s like, I mean, I don’t know if that question has a definitive answer. But and you know, Matt, you can think about that for a second, why remind you that today’s episode, Startup Hustle is brought to you by full scale.io helping you build a software team quickly. And affordably. Now, we’ve, we’ve settled in our marketing plan. And our strategy for that is is interesting. It’s, you know, the, there’s, there’s a bunch of people that seem to email me contact me message me regularly wanting to sell me web development services, which I kind of chuckle at, sometimes, if I get that sometimes if I’m it, sometimes if I’m grumpy, I’ll just reply, I’m like, you know, I’m your competitor, right? But they’re kind of, they’re blanketing things out there. But you know, like, overall, there’s a ton of competition for stuff. And we’ve, we’ve taken a different route. And we, we believe me, you and I and the other people that at the Full Scale organization that the best way to, to provide value is exactly that. It’s provide some kind of value. So creating content, it’s like this podcast, you know, like, we hope you get something beneficial. Out of listening, we hope you learned something. I mean, I’ve talked to a lot of people that have listened to the show. And by the time they’re inquiring about Full Scale, they mentioned that they’ve listened to the show a lot. They feel like they know a lot about us or about the company. And you know, that’s that. I mean, sometimes the effective strategy isn’t always around like, hey, let’s buy ads, it’s sometimes just doing something a little different or making some other improvements.
Matt Watson 19:36
Well, it depends on your what your traction channels are right to an example. It could be just referrals. It’s like we just keep doing what we do. And we’re doing and we get, we get referrals. And you mentioned earlier about throwing the whole the whole plan out the window and we actually did that stalked by one point in time, like in the early days, we were trying to do pay per click and stuff and banner ads like we were running banner ads on stack over overflow and which is a big developer site and in Google and stuff, and I want to say we were spending like 3040 $50,000 a month on on ads, and we’re not getting a lot out of it. And we literally just stopped doing all of it. And that’s where we decided to focus on content marketing. And then we built a free tool that we gave away, there was a lead generator, and we just totally changed, like, totally pivoted our entire go to market strategy. And then even with our content marketing, it was one of the things we kind of did for a while. And then we would always, I would always look at him like me, and we randomly wrote this blog post, like three years ago that people sign up as like, customers, like every week from this thing. Maybe we should do more than that, like, how do we improve that? Right? Like, that’s the thing is, sometimes you dabble with some things and figure out what works and what doesn’t.
Matt DeCoursey 20:50
But once again, it’s about the conversion, and seeing where it ends. Orissa. By the way, when I first met you, the very first time I ever sat down with you, you were telling me about how you had you wanted to break your addiction to CPC ads, and you were telling me that you were spending 30 to 50 grand a month on I mean, everything from Twitter to like you said StackOverflow. And you were you were explaining to me that you thought that maybe content and blog marketing, and I had had a bit of a history with that myself, and we had a conversation about it. Now, one thing I will tell you, and for those of you listening CPC ads, I often compare to crack. Because they’ll get you high really fast. They you’ll find yourself broke and wanting more later. And you know, that’s the thing is with some types of advertising, I think it’s also important when you go to pivot or change your plan. So Matt, when you pivoted from spending 40 to 50 grand a month on CPC ads, and then created what we refer to as evergreen content. That and that was more of an investment than expense, the long term play. Yeah, and I think that that’s an important part, when you look at there’s and there’s a different there’s a time for each of that, like, you know, in the because those kinds of plays are difficult. They take a long time, you have to create the content, you have to publish it, it has to get picked up your site gains authority, like a whole lot of stuff. It’s not a quick fix. It’s not it’s not the crack of marketing. It’s it’s more like the meat what like the 12 year whiskey or something like that is that the five year bourbon
Matt Watson 22:33
and full skills blog gets a quite a bit of traffic, and it’s up 50% Over the last six months, which is a lot, right. And the it’s kind of like you get a snowball effect, right? Like it just slowly picks up more and more momentum and it starts to really go. But yeah, you’re absolutely right when you first start, like he started throwing a lot of stuff on the wall. And it’s easy to get disheartened, because you’re not getting a lot of instant success from it. No different than starting a podcast or a YouTube channel or anything else. Right. Yeah. And content. A lot of times you got to build up the reputation and for blogging and stuff. It’s a reputation with Google.
Matt DeCoursey 23:13
Yeah, and you know, you mentioned being up 50% over six months. So let’s say that we were getting 30,000 visits a month. That means that literally we would just be adding up like something like 2500 visits a month, it doesn’t feel it doesn’t feel super sexy. You know, like, when you look at 30 days, you’re like, oh, wow, so we went from 20,000 to 22,000. But once again, all those visits don’t mean shit, unless they’re converting into something like that, some of that. So some of that now with that, in the last couple months, we’ve seen we just recently over the last two months have seen our inbound lead volume, triple. And it has no it doesn’t have anything to do with the traffic, the traffic, the traffic, slightly helpful, but it didn’t it wasn’t triple worthy. Right. The adjustments that we made were more about so this is this is a thing that people will say a lot. They’ll say, Well, I tried CPC ads, and I got 300 clicks and no one bought anything. And I’m sitting there thinking it’s not the ads fault. It’s your fault, right? It’s what happens when after someone clicks. So in our case with the blog, we just needed to have a bet we were trying to do a better job of getting people to a point where they were onboarding and to the management platform we’ve built at Full Scale for our clients and that platform. And we did that through just some simple like, you know, just better calls to action, trying different things. Also doing stuff like we at one point were collecting leads so we could then turn around and email those people and ask them to do the same thing we now ask them to just do right on the site. Yeah, so removing steps from the buying process. And the conversion process, I think is, is a marketing adjustment. Technically, it’s a sales and marketing adjustment. But part of your marketing is the experience that comes after the click. And I gotta tell you what man there are. I mean, there are some people that have brilliant advertising and like, ungodly, terrible user experience or landing page after that, you know, it’s like, you go to all you get the click, and you just go to it’s like, a page with a contact form. Yeah, yep. You’re like, wow, yeah. Waters, good.
Matt Watson 25:45
I was gonna say, versus I’m watching tick tock, and I see some cool ad for something and I click on it, and then somehow or another, because I bought something in the past, like, automatically knows who I am, and has all my information and my credit card, and it’s like one more click, and I bought something that’s bad. That’s bad. It’s good for them. It’s bad for me.
Matt DeCoursey 26:03
It’s good for them. But bad for you. Yeah. Amazon, Amazon’s whole economy is like that, you know, I mean, that’s the whole thing. It’s like, we actually talked about that, because I was, of all people of all startup people is talking to Startup Hustle, TV cast member and go to YouTube and type in Startup Hustle, and you can watch the videos we’ve put out, but Eric Perkins wanted to sell more merch, and we talked about it. And we’re like, Dude, you should just put it on Amazon. And that’s where we’ll direct people to, because that way, you don’t have to fulfill anything. Yeah. And like, everybody has an Amazon account. Like if you’re out there, and you still you’re in the United States, and you still just don’t even have an Amazon account. I’m not even sure I want your sale.
Matt Watson 26:43
My mom is like the least technical person you’ll ever meet. And she knows how to order groceries online and use Amazon now. Which is terrifying. Like it finally, that wave of technology innovation finally got there, like 20 years later.
Matt DeCoursey 26:59
Yeah, when I think about my dad, I’m like, this could be good. And it could also be really bad. You know, like, because I don’t know if if people that old are immune to the, you know, it’s like gold back to gold fever. It’s like buying fever. It’s like you’re one click away. Can you can you control it? So? Yeah. Okay, so alright. So some other things when it comes to the adjustments? Like, I mean, if you’re going to implement stuff, I mean, I think that, you know, I think one of the things with the plan you can look at is like, Well, did you actually follow the plan?
Matt Watson 27:35
And given enough time to be successful? Sure, right.
Matt DeCoursey 27:38
I mean, I think that’s what you establish up front, you know, some of it like, no luck, if you there’s no nobility and saying, Hey, awesome. I’m gonna give this 90 days and you realize a weekend do it. You’re like, Oh, my God, I’m paying five times more a click than I can than I can afford. I probably turn that off. Yeah, sure. Yeah, I turn that off, but maybe not an hour later. So when it comes to, you know, like, I think some of the things is you look at the plan, did you stick with the plan? You know, ask yourself why? I think that I think that more and more, and you know, we were just talking about this, but more and more, the more steps that you have on anything, the last result you’re gonna get? Well, now, that’s not always that’s not always a bad thing, though.
Matt Watson 28:25
Well, I think you also have to come to the realism. And I don’t know if this is just a rule I follow or if it’s really an industry rule, but I feel like half of your marketing budget is always completely wasted. And you just don’t know which half. That’s just, that’s just the way it works. Right? That’s just that’s just the law of marketing. Half of it is complete waste, but you don’t know which half?
Matt DeCoursey 28:50
I think I think it was Simon Sinek start with why I was listening to the audiobook driving down to the office. And I think that’s I think he was saying that he said, it’s pretty much it’s pretty much known that half your marketing budget is, is ineffective, but knowing which half is the is the real key. And, and.
Matt Watson 29:11
And it’s like the car dealers when used to work with car dealers, right? They would spend an insane amount of money on newspaper ads. Advertising like auto trader magazines, like the old magazines, and radio ads and TV ads. Who the hell knows which ones are those work? Right? There’s no tracking, there’s no way to know if it’s a TV ad or radio ad or the news. You don’t know. Like, that’s not like you have click tracking and stuff like that, right? Yep. And so it’s like, well, you know, you just know you’re going away. Yeah, you just know you’re throwing away a lot of money somewhere. You just don’t know which one, but you’re scared to change any of it if it just somehow works.
Matt DeCoursey 29:46
Yeah, I’ve been in that I’ve been in that boat before. And you know, that’s the thing though. You should ask. If you’re not already asking. I mean, if you’re not if you’re if it’s an online thing, like I mean, there’s ways to convert and track and then there’s just good old fashioned asking And, you know, it was actually, you know, me asking incoming leads, you know, for Full Scale, you know, because they we do ask them when they fill out a form, how did you hear about us? And they often say, you know, search engine, they often say Startup Hustle podcast. And then one thing because I asked I started noticing was that we were getting a lot of a lot of incoming leads that were coming directly from people that had worked at companies that had used Full Scale, and we’re now going to another company. Yes. And it’s like a completely different type of referral. Yeah.
Matt Watson 30:41
That marketing channel.
Matt DeCoursey 30:44
I was thinking I was already I was already thinking about it, you know, I was like, Wow, do I have to,
Matt Watson 30:49
like get all of our customers fired from their current job, so they have to go, or you
Matt DeCoursey 30:53
have to look for job changes and people that work at the company? Yeah, it’s like, yeah, I don’t know. I don’t know where no, you’re
Matt Watson 30:59
absolutely right about that. Like that was that was a great thing for us at at VinSolutions. Back then. Because who the hell works at the same car dealership for more than like, six months? Right. And so they were everywhere. All Yeah. So that that was huge for us then. But in at sacrifi? We saw that too, right? It was we were, you know, I ran that business for nine years. And we definitely saw over the time you people leave and they take you with you. And that’s a great testament to your product and service to right if they take you everywhere they go.
Matt DeCoursey 31:27
So I think this is this is worth talking about. If we’re going to talk about making marketing adjustments, I think, you know, how do you determine who makes the call?
Matt Watson 31:41
Whoever writes the check, I guess?
Matt DeCoursey 31:43
I mean, maybe I mean, on some of it, and it depends how big your company is. But like, I mean, I think that it Have you determined, have you clarified and defined? Like what is an acceptable result? Because I think if you if you leave these decisions to the wrong people, you could very easily be grossly overspending. Yeah, or probably pretty easily kill things that are working.
Matt Watson 32:11
Well, and for sure, if you’re like, Hey, Mr. Marketing, dude, you got 50 grand a month, figure it out. Right? And then like, he has no idea what he’s doing.
Matt DeCoursey 32:20
That’s pretty much the worst way to approach the plan, isn’t it?
Matt Watson 32:23
That’s probably the way it goes in most corporate places, though.
Matt DeCoursey 32:27
So what’s the so in a world of tech companies, and we’re talking about starting new ones, you know, how do you break into a market where there’s already a bunch of competition?
Matt Watson 32:39
Yeah, that means, that’s hard to stick out, right? You’re in that red ocean where there’s there’s blood everywhere. Everybody’s fighting for the same food.
Matt DeCoursey 32:48
And the red ocean? Is that red ocean? Yeah,
Matt Watson 32:52
you want to be in the blue ocean, right? Where there’s, there’s nobody else there. But you. You’re just floating along.
Matt DeCoursey 32:58
Episode Episode. 12 be a coward. Right? Yeah. Who’s that? What Leora Holt told us now we’re going to take Lirael as credible because he sold one of the largest franchise chains of anyone I’ve ever met. But yeah, he said that he has approach to building businesses and marketing is to be cowardly. Meaning like going somewhere where he’ll be left alone, to get to do something no one else is doing and get really good at it. And I mean, I think that that’s something when you talk about marketing adjustments is like, so I didn’t at Full Scale when it came to the Startup Hustle podcast, and also when it came to like our content marketing, the Evergreen effect. Okay, so if we have to advertise for what we do. For those of you listening, this is real. Sometimes the clicks can be like 2030 $40
Matt Watson 33:51
Oh, yeah, absolutely. Think about, like, in your old days, right in the ticket business, like what does it cost per click to sell a Superbowl ticket? A lot, a lot. A lot, a lot. One of the biggest ones is actually college, college. College is an absurd amount of money. Because you know, you’re gonna pay like $200,000 in debt for that education. Good luck with that. Yeah, they’ll pay a ton of money for leads. Some of them probably
Matt DeCoursey 34:19
part of the, that’s probably part of the reason it’s 50 grand a year to go to college because they they need to spend 20% of that to get the next batch of
Matt Watson 34:28
students and some of the man
Matt DeCoursey 34:31
I mean, really, in the end I think it comes down to if you don’t understand the basics of your business, then you can’t really begin to describe what what an acceptable result is. But now that’s super hard for a brand new company because like we went through this with Giga book years ago, we were doing some of the ads like so what percentage of okay, so how much is an average account worth? How long do they stick around? How many months do they need to be? Subscribers? Before we break even, one of the things with software that we we kind of arrived at as a decent number was, and this sounds crazy, but you should have for every conversion you get to a paid user, kind of the the the C grade was like It’s like 10 to 12 months. Like 10 to 12 months of subscriptions for an average account should cover the cost of that user. Right? So so if it was, so if you got it back in five or six months, then that was like an A, and if it took more than that, there might have been like, a year and a half, like what what are some have you had discussions with other tech founders that, that have revealed some of that?
Matt Watson 35:46
You know, I don’t remember what all those industry standards were. But I think what you just said was about, right? And for, for what’s common. And yeah, it’s, you know, you have to think about what are your customer acquisition costs, you have to think about what is long the lifetime value of the customer to right? And then what is that, you know, payback, you know, break-even period, right, like you just described, that’s
Matt DeCoursey 36:07
gonna be different, it’s gonna be different. And then also, like, there are certain things, certain types of software that are super sticky, I mean, super sticky, because, you know, depends on who you’re selling to, like, if you’re a straight up b2b software platform that has enterprise users. Like, for example, I’ve used to manage a chain of retail stores a very long time ago, and I think that most dreht, we had a terrible point of sale system. But we would literally talk in our meetings that the amount of effort, energy, time and fuck us that would exist with trying to swap that out across 80 stores in different states would have been like, wasn’t even worth it. And that goes back to your whole point is if you have a new product, if it’s not three times cheaper, or three times better, you’re gonna have a very difficult time getting people to even adopt to
Matt Watson 36:58
it, especially if it’s hard to switch. And you’re absolutely right. Like, the last thing anybody ever wants to change is like a point of sale and accounting system, a phone system, like HR system payroll, like, like, I don’t care if I can save $100 a month, like, there’s like 100 Nightmare headaches with this bullshit, why would I do this? Right? And yeah, especially if you’re trying to compete and any of those things, forget it. But if you can build a product that has that kind of stickiness to it. Oh, man, the lifetime value of a customer is so good.
Matt DeCoursey 37:28
You know, speaking of sticky products, I finally got the last item out of the storage locker from the Giga book office. I have almost four years ago. Did you find any gold in there to know but actually found this so I found the silver dollar. I’ll take it, but that didn’t that didn’t make up for like the $8,000 that I paid. You talked about stickiness, though. But that thing it’s like, and it was kind of fun. So I couldn’t move all my stuff. I didn’t have enough when it was when I moved into the office at sacrifi. We had just a little bit of extra stuff and the easiest thing to do because I had to I was selling my building I need to be out of it. And yeah, I told myself I was I was always a month away from cleaning that thing out Now that said, you know that, by the way, I just saw a storage unit placed by my house. There was no sophisticated advertising, there was no cost per click, there was no radio ad there was literally a sign on the street and it was a proximity thing. And that specs like you said about the car dealer stuff like are you going to sell to more cars and would you have maybe sold this anyway because some things just in this day and age don’t require all a hell of like in marketing,
Matt Watson 38:37
I can tell you in a in a physical presence business like that, you know what the number one thing is that sells? So things that car dealers that they go up in the air and they float around and they they wiggle and shake?
Matt DeCoursey 38:48
Oh, the wavy arm guy. Yeah.
Matt Watson 38:49
Yeah, that’s the number one thing just get just got like three of those. That’s it. That’s all you need. And a bigger sign. Maybe.
Matt DeCoursey 38:55
That’s it that that wouldn’t work for a tech company. I don’t think maybe in San Francisco, like you said, I noticed the same thing. There’s like billboards just on the highway and from the airport. And like, yeah, you’re like wow, for
Matt Watson 39:08
Salesforce or slack or like stuff. Yeah. Welcome to Silicon Valley.
Matt DeCoursey 39:13
I mean, some of those things can afford it though. I mean, that’s a you talk about like, is it are you advertising to people that are are going to be your client for 10 years? It was funny because you mentioned slack, it had an outage yesterday and I even made a post and Startup Hustle chat that said, you know, asking, I pointed out slack was broken and I realized how dependent I was on it. And I was asking the group what they what they were dependent on. I got really interesting answers like electricity running the internet, like thanks got air. You know, like, when I have no oxygen it is difficult for me to pull coffee off so that those are legit. Those are legit. I can by that, but I mean, come on, yes without electricity. Unless you’re running like a rafting company, you know, like, down like the whitewater rapids or horseback riding,
Matt Watson 40:12
I think the beginning of slack. Yesterday, my wife asked me if she was on Facebook, I don’t what the hell she was looking at. But she saw this thing come up about Slack about somebody who was like hiding messages in Slack or something on him. She’s like, Have you ever used this slack thing before? And I’m like, holy? Like, what kind of crazy conspiracy thing did you just find about Slack? And now you’re asking me if I use it. Like, I live on Slack all day long. Like, it’s like, air and water and electricity is
Matt DeCoursey 40:44
true. True. All right, well, we’re here at the end of yet another installment of our How to Start a tech company. Today’s episode of Startup Hustle is brought to you by full scale.io. Let us help you build that team you want quickly and affordably go to full scale.io It’s really easy, give us a little bit of info, we’ll take a look at it. And we will reply with a lot of info suggestions and hopefully, future teammates that can help you build your tech company. So Matt, what are some of your takeaways from today?
Matt Watson 41:18
I think, you know, as we talked about in previous episodes, about go to market strategies and stuff, I think as a company, you always have to be kind of, you know, thinking about other marketing strategies and what works that could be totally different channels. But always, you know, even if you’re just like, oh, we do online advertising, like display and Google and Twitter and Facebook, and all these things, I think it’s just, you know, kind of slow and steady testings, right? Like, don’t take 100% of your budget, and all of a sudden jump from one thing to the next, like, you know, throw a few dollars at some things. See if it works. I mean, you may not get enough scientific data, if you know, it’s a real small fraction of your budget, but, you know, test the waters right before you go all in. I think that’s my key suggestion. And at the end of the day, you want to try and find as many kinds of different channels as you can, and not be totally dependent on one of them. So diversification is good.
Matt DeCoursey 42:06
I think my biggest takeaway is you just that you probably just need this wavy arm. Yes. Error fan guys, you know, like that kind of they raise up and they fall down and they raise up and they fall down? They work great and full page newspaper ads? Because how could you go wrong? Yeah. I mean, in the end, I think that really, when it comes to adjustments, I just think you got to keep your finger on the pulse of what you’re doing. I mean, things that, you know, I’ve just, after decades of owning and managing and doing business, like, you know, I think that the kiss of death is expecting something that works now to always work. You know, there’s always going to make adjustments. You know, while I’m not a New England Patriots fan, I do admire the success that their coaches have. And you know, he says, if you wait till halftime before you start making adjustments, then you’ve waited too long. And, you know, there’s there’s it really when it comes to marketing and marketing plans, and all of it. I mean, it is amazing how quickly you can run through a ton of cash from not paying attention. Yep, absolutely. So pay attention. I think that’s the key pay attention to the wavy arm Fan Guy and your results. And if you get both of them and they’re both working, then you’re really you’re in a really great place. So I think that’s a good place to start, man. I bet you’re gonna go by that’s why that’s why we have to end this episode because Matt Watson has to go by a wavy arm fan. Probably a guy there like 300 bucks. You can lease them I believe Colorado sales like like 50 years ago. I found it it’s $50 it’s the you need a good one. The good ones are more than 50 bucks. You need one that’s at least like yeah, that’s a little more like it or wacky
Matt Watson 43:52
waving inflatable tube guy. That’s the to how tall is it? How tall is it? 20 feet.
Matt DeCoursey 43:59
That’s not tall enough. You need to be at least twice. Okay, if you get it for every 10 feet you out, I guarantee you’re gonna sell two more cars this month. I’m out of here.
Matt Watson 44:09
Alright, see you.