Latest / Marketing For Tradies / How Agencies Keep You Hooked (Without Results) 🎣🚫

Transcript

How Agencies Keep You Hooked (Without Results) 🎣🚫 · Marketing For Tradies

• 0:00
  SPEAKER_00: I have people book calls with me all the time who are asking me about how to do marketing because they're wanting to start a marketing agency.
• 0:10
  SPEAKER_00: A lot of the business owners who need marketing don't understand marketing.
• 0:14
  SPEAKER_00: They can't do it themselves.
• 0:15
  SPEAKER_00: A lot of agencies or marketing providers will focus a lot on impressions and clicks as a metric.
• 0:21
  SPEAKER_00: Those metrics just do not matter.
• 0:23
  SPEAKER_00: The right marketing provider is going to be talking to you about conversion tracking is the basis of all advertising optimization.
• 0:32
  SPEAKER_00: If you don't know how many leads are coming through your campaigns, what your cost per lead is, and what your return on ad spend is, then you need to make sure that.
• 0:41
  SPEAKER_00: Welcome to Websites That Convert, the podcast where your website stops being a liability and transforms into your greatest asset.
• 0:48
  SPEAKER_00: I'm your host, Shannon, and I'm going to guide you through the strategies and insights you need to build a website that not only attracts but converts.
• 0:57
  SPEAKER_00: Let's dive in.
• 1:01
  SPEAKER_00: If one thing's for sure, being burnt by marketing agencies is a common theme when it comes to business owners who've tried to engage people in the past.
• 1:10
  SPEAKER_00: The reason that this tends to happen is something that I want to talk about.
• 1:14
  SPEAKER_00: And today's episode being why you've been burnt by marketing agencies in the past.
• 1:19
  SPEAKER_00: Firstly, I'm not saying it's your fault at all.
• 1:22
  SPEAKER_00: There is definitely a lot of bad providers out there.
• 1:25
  SPEAKER_00: But I hope that this gives you a little bit of insight into why it may have happened to you so you can be equipped for conversations with marketing providers in the future if you are considering working with someone.
• 1:37
  SPEAKER_00: I have people book calls with me all the time who are asking me about how to do marketing because they're wanting to start a marketing agency.
• 1:48
  SPEAKER_00: These are generally young guys that, you know, see marketing as an easy way in because, you know, people are willing to invest in marketing providers.
• 1:58
  SPEAKER_00: It's an industry where you are providing a return on investment if someone does work with you, so you can make a lot of money if you do it well.
• 2:07
  SPEAKER_00: But the problem is that these guys can become really good at selling, but they can't learn marketing that fast.
• 2:13
  SPEAKER_00: Like it's not that simple.
• 2:15
  SPEAKER_00: You need to know a lot about strategy, you need to understand the business, the market, sales funnels, how to make things work, the specific KPIs and conversion rates of a funnel and a campaign that's going to be effective, how the platforms themselves work, the technical side of things, integrating them.
• 2:34
  SPEAKER_00: Like there's a lot of things that you need to know in order for marketing to work.
• 2:37
  SPEAKER_00: Plus, marketing as a whole is very, very general.
• 2:41
  SPEAKER_00: It's kind of like a blanket statement that refers to any way that you're attracting new customers.
• 2:47
  SPEAKER_00: So it marketing is a very broad term to start with.
• 2:51
  SPEAKER_00: So these guys don't understand that marketing itself is so broad.
• 2:56
  SPEAKER_00: And so if someone's looking for marketing, you need to understand what their goals are and be confident that you can actually deliver on the outcome that they're looking to achieve.
• 3:04
  SPEAKER_00: And if you don't have experience in marketing and getting these type of results for business owners, then you could definitely sell them because a lot of the business owners who need marketing don't understand marketing.
• 3:17
  SPEAKER_00: They can't do it themselves, which is a position that you may have been in in the past where you don't understand it, you know that you need marketing, and you've had a conversation with someone who has promised you an outcome or promised to do marketing for you, and you've gone in blind because you don't understand marketing, which you shouldn't have to understand it if you're engaging someone, but you need to ensure that you're choosing someone that you trust.
• 3:40
  SPEAKER_00: But the point is that there's a very low barrier to entry when it comes to marketing.
• 3:45
  SPEAKER_00: Marketing is very broad, and just as an example, I have young guys book calls with me to ask me how to do marketing because they want to start a marketing agency.
• 3:56
  SPEAKER_00: So these are the type of people that are out there right now preying on business owners who aren't equipped with the understanding and information that they need in order to know who they should trust and the kind of questions that they should be asking.
• 4:10
  SPEAKER_00: The second reason that a lot of people are getting burnt by marketing agencies is that there's a misalignment in goals.
• 4:16
  SPEAKER_00: One thing that we have noticed is a lot of agencies or marketing providers will focus a lot on impressions and clicks as a metric.
• 4:24
  SPEAKER_00: These metrics do not matter at all.
• 4:26
  SPEAKER_00: So if you're getting reports from your marketing provider or you've had one in the past that has told you how many impressions and clicks or views that you've gotten on your campaign, those metrics just do not matter.
• 4:38
  SPEAKER_00: You're in business, you want conversions and sales.
• 4:41
  SPEAKER_00: So the right marketing provider is going to be talking to you about conversions and sales and ROI rather than the vanity metrics of impressions, clicks, and views because they do not matter.
• 4:53
  SPEAKER_00: They don't pay the bills, they don't bring in new customers.
• 4:56
  SPEAKER_00: Yes, it can get you exposure, but you have no idea if these people are actually even in your target market, let alone actively searching for what you offer or ready to buy from you.
• 5:08
  SPEAKER_00: So what matters is how many conversions and sales you're getting.
• 5:12
  SPEAKER_00: So for example, if you are to do a call with us, I always get down to the amount of money that you want to make.
• 5:19
  SPEAKER_00: It's really important for us to understand what your goals are, how many sales you need in order to achieve those goals, and then how many leads we would need to generate and your conversion rates where you would need those to be in order to achieve those goals.
• 5:32
  SPEAKER_00: So it's more of a partnership of understanding what outcome you're going for.
• 5:37
  SPEAKER_00: So we can align our strategy to ensure that you achieve those goals by hitting the metrics that we need to in order to get that outcome.
• 5:46
  SPEAKER_00: So the second reason why a lot of people are getting burnt is that there's a misalignment in goals and these marketing providers are focusing on vanity metrics rather than metrics that business owners care about, which is conversions and sales.
• 5:58
  SPEAKER_00: The third reason a lot of businesses are being burnt by marketing agencies is that these agencies are not tracking conversions.
• 6:06
  SPEAKER_00: Conversion tracking is the basis of all advertising optimization.
• 6:11
  SPEAKER_00: So if you don't know how many leads are coming through your campaigns, what your cost per lead is, and what your return on ad spend is, then you need to make sure that the correct conversion tracking is set up and that your marketing provider is telling you these numbers.
• 6:27
  SPEAKER_00: Because you need to know if you're putting a certain amount of money into a campaign, what you're getting out of that, at least in leads, like at the very minimum, what your cost per lead is, and then beyond that, what your return on ad spend is.
• 6:41
  SPEAKER_00: So how much money you're getting out of that campaign, because if it's working, then you want to be putting more money into that.
• 6:47
  SPEAKER_00: Like advertising is not a cost or an expense, it is an investment.
• 6:52
  SPEAKER_00: Like I'm always trying to spend more money on our ads.
• 6:56
  SPEAKER_00: Like I'm honestly every day increasing our ad spend, every week, every month.
• 7:01
  SPEAKER_00: Like I want to spend more because I know that we have a positive return on ad spend.
• 7:06
  SPEAKER_00: So I know that because I have conversion tracking in our campaigns and I know exactly how much money I put in and are getting out.
• 7:15
  SPEAKER_00: It's the same for our clients.
• 7:17
  SPEAKER_00: You need conversion tracking set up in order to know if your marketing and advertising is working.
• 7:23
  SPEAKER_00: And a lot of these marketing providers who aren't doing your ads right and running your campaigns correctly do not even have conversion tracking set up.
• 7:31
  SPEAKER_00: It's not even just for your own metrics, it's also for the platforms themselves.
• 7:36
  SPEAKER_00: That's how the platforms know how to put your ads in front of more people who are converting.
• 7:44
  SPEAKER_00: So if you don't have conversion tracking set up, it's just like sending your ads out to random people all the time.
• 7:50
  SPEAKER_00: So conversion tracking need to know it so that you know your return on ad spend and your internal metrics.
• 7:56
  SPEAKER_00: But the platforms need it in order to know who's most likely to convert on your ads and your campaign.
• 8:03
  SPEAKER_00: So that's a common reason why people are being burnt by marketing agencies because they're not having conversion tracking set up.
• 8:10
  SPEAKER_00: There's a misalignment of goals and there's a very low barrier to entry, meaning that there's a lot of underqualified people in the market right now.
• 8:18
  SPEAKER_00: So, for anyone interested in working with us, one of the most important numbers that we need to know is how much revenue do you want to generate?
• 8:25
  SPEAKER_00: Like what are your goals?
• 8:27
  SPEAKER_00: A lot of the businesses that come to us want to double.
• 8:29
  SPEAKER_00: So, say they're making 100K per month, they want to scale to 200.
• 8:33
  SPEAKER_00: So we would need an additional 100K in monthly revenue in order for them to reach their goals.
• 8:39
  SPEAKER_00: And you need to know what your average order value is.
• 8:42
  SPEAKER_00: So if you charge an average of 10,000 per service, for example, you need 10 new customers.
• 8:48
  SPEAKER_00: If you charge a thousand, you need 100 new customers.
• 8:50
  SPEAKER_00: So this is going to be completely different for every single business, but you need to know this number.
• 8:55
  SPEAKER_00: So revenue, average order value, the next number is gross margin.
• 8:59
  SPEAKER_00: So let's say in this example, you're wanting to generate another 100k in monthly revenue and your average order value is 10,000.
• 9:07
  SPEAKER_00: We also need to know what your gross margin is.
• 9:09
  SPEAKER_00: This gives us a metric that we can use to calculate what your break-even CPA is, which is a very important metric when it comes to advertising.
• 9:19
  SPEAKER_00: This is cost per acquisition.
• 9:21
  SPEAKER_00: So if we were to run your ads and we were to pay a certain amount per lead at your break-even point, we want to make sure that your gross margin is factored into this.
• 9:33
  SPEAKER_00: This isn't just about revenue, this is about how much you could pay at the very maximum.
• 9:39
  SPEAKER_00: We never go for break-even.
• 9:40
  SPEAKER_00: We also have your target cost per acquisition, but your break-even point is based off of your gross margin.
• 9:46
  SPEAKER_00: So we need to know that number too, and it's obviously something that you should know as well.
• 9:50
  SPEAKER_00: The next number is sales.
• 9:52
  SPEAKER_00: So again, 100K, 10k per average order value, that's going to be 10 sales per month.
• 9:59
  SPEAKER_00: How many leads would you need in order to close 10 clients?
• 10:04
  SPEAKER_00: So let's say, for example, your close rate is 50%, which is another key metric that we need to know.
• 10:10
  SPEAKER_00: We would know that we need to generate at least 20 leads in order for you to make those 10 sales.
• 10:16
  SPEAKER_00: Now, you should know what your close rate is.
• 10:19
  SPEAKER_00: Some businesses, this is as low as 10%.
• 10:21
  SPEAKER_00: If it's a really, really high-ticket business that is very specific in the services that they offer and maybe isn't something that is super urgent for people.
• 10:30
  SPEAKER_00: And then on the other hand, you could be having a 80 to 90% close rate if you are getting a lot of your business through referrals.
• 10:39
  SPEAKER_00: So when we're estimating this, if you don't know your close rate, we usually estimate it off 30 or 50%.
• 10:45
  SPEAKER_00: Something around that is generally a conservative number that is realistic for a lot of businesses who are getting leads through cold and or warm traffic.
• 10:54
  SPEAKER_00: But if you need 10 sales per month and your close rate's 50%, then you need 20 leads in order to make that amount of sales.
• 11:02
  SPEAKER_00: So what we've gone through so far, and these are metrics that you must know before you talk to a marketing provider and should be questions that your marketing provider is asking you revenue, average order value, gross margin, number of sales needed, your close rate, number of leads needed.
• 11:20
  SPEAKER_00: And then the next one, which I mentioned before, is your break-even cost per acquisition.
• 11:25
  SPEAKER_00: So if we were to take our example of our$10,000 average order value and your gross margin, let's say it's 60%, that means that your gross margin from each job is$6,000.
• 11:41
  SPEAKER_00: So that's what you have left after you pay all your gross expenses or your cost of doing business.
• 11:49
  SPEAKER_00: And then we would divide that by the number of leads that you would need.
• 11:54
  SPEAKER_00: Then what we would do is take that$6,000 times it by your close rate, so 50%.
• 11:59
  SPEAKER_00: So going back to this example, to calculate your break-even point for your acquisition cost, so your break-even CPA, you need to know your average order value.
• 12:09
  SPEAKER_00: So this example is 10,000, gross margin, let's say 60%.
• 12:13
  SPEAKER_00: After you pay all your initial expenses, you've got$6,000 left over of that job cost.
• 12:18
  SPEAKER_00: You then times that by your close rate.
• 12:21
  SPEAKER_00: So in this example, we set let's say 50%.
• 12:23
  SPEAKER_00: So 50% of leads that come through, you close into customers.
• 12:28
  SPEAKER_00: So your break-even CPA is$3,000.
• 12:32
  SPEAKER_00: But of course, we don't want to just break even.
• 12:34
  SPEAKER_00: This number is just designed to give us a starting point of understanding the business and if it can be profitable with advertising campaigns, because we have an understanding of what industries generally get what type of cost per lead, because we've done this for a lot of different industries and a lot of different businesses.
• 12:51
  SPEAKER_00: But if you have a break-even CPA of something that's really low and kind of unachievable in terms of getting leads at at least three times less than that, then you wouldn't qualify for marketing and advertising services because it wouldn't be realistic or profitable for you when you actually run the campaign.
• 13:11
  SPEAKER_00: So the next number after this is to find out what the target CPA is, which is at least three times less than the breake-even CPA.
• 13:22
  SPEAKER_00: As a minimum, it's three, but we can generally cut this to four to 10 times less than the breakeven CPA, depending on the industry.
• 13:31
  SPEAKER_00: And that gives us our target of how much that we want to pay for leads at the higher point in order to get you a profitable campaign running.
• 13:40
  SPEAKER_00: So this is how much you're paying per lead or per acquisition in your advertising campaigns in a way that we know will be profitable.
• 13:49
  SPEAKER_00: So again, if we divide this break-even CPA by three and it's still not achievable, you're not going to qualify to work with us.
• 13:58
  SPEAKER_00: But the problem is and why people are getting burnt by marketing agencies is that a lot of marketing providers don't even understand these numbers, let alone the businesses that are inquiring about working with them.
• 14:09
  SPEAKER_00: So before you go into your next conversation with a marketing provider, I want you to be equipped with your revenue goals, your average order value, your gross margin, your number of sales needed, your close rate, the amount of leads you want to generate, and then what your break-even CPA would be.
• 14:30
  SPEAKER_00: Ask them what you would expect the cost per lead to be in their industry.
• 14:34
  SPEAKER_00: And then also understanding what your target CPA would be.
• 14:38
  SPEAKER_00: I hope this episode has been helpful.
• 14:41
  SPEAKER_00: I don't want to see more businesses getting burnt by marketing agencies, and I definitely don't want to be put in the same bucket of these guys who are offering marketing services and not delivering.
• 14:51
  SPEAKER_00: I have these conversations every single week with business owners who have been burnt, and I completely understand how they don't feel like they can trust anyone anymore.
• 15:02
  SPEAKER_00: So I want to provide as much information and value and education to business owners so they are equipped with the understanding and the information that they need in order to make the right decision and go into meetings with people who are offering marketing services, understanding if it's going to be profitable for them.
• 15:21
  SPEAKER_00: And also, if you are talking to someone and then need to figure out, you know, after the call whether it's going to be profitable, these numbers are the perfect way to do that.
• 15:31
  SPEAKER_00: So I hope it's been helpful in some way.
• 15:33
  SPEAKER_00: I know we went through a few different numbers today, but I'll put all of the information into the show notes.
• 15:38
  SPEAKER_00: And you can reach out anytime if you have questions or book in a call with me and my team, and uh we can help you calculate these numbers too and see if our AI funnel system is something that can help create a profitable marketing system for you and your business.
• 15:54
  SPEAKER_00: So that's all for this episode, and I'll see you next time.
• 15:57
  SPEAKER_00: Thank you for listening to Websites That Convert.
• 15:59
  SPEAKER_00: If you found value in this episode, please give us a five star review on Apple Podcasts and Spotify.
• 16:05
  SPEAKER_00: Follow us on all social media, and if you're a service based business owner that's looking to double their website conversions, book a call with my team using the link below.
• 16:14
  SPEAKER_00: I'll see you in the next episode.