Jason: Welcome to the sales experience podcast, the show for salespeople and sales leaders, where we help you create the ideal sales experience to generate raving fan customers. Grab your notepad and get ready for actionable steps you can use to change sales from a dirty word to an active service for your prospects.

Now for your host, Jason Cutter.

Jason: Hey everybody, it's Jason here. I wanted to give a little introduction before I go into this episode. Given the nature of everything going on in the world right now, especially the economy in the US and where things are headed, especially in sales related companies, everything I've been dealing with the last week and a half with all of my clients, I had a special opportunity to record an episode with Casey Carroll, who's going to be my guest on this episode.

And we talk a lot about marketing, but also timeliness. So a lot of my episodes and things that I record are Evergreen. So there are things that, you know, it's sales principles that apply always. And my guests, sometimes we record them well in advance of when they're launched, just for the nature of timing and stuff that I released.

But this time here, I had this opportunity where we recorded in the moment of everything going on. And instead of breaking it up into four parts where there's 10 to 15 minutes a day, and you've kind of got to wait for these four part mini series. Felt like because of the timeliness, I wanted to record this one, one shot, not break it up, give you a little intro because it's outside of my normal thing.

Normally my expectation I set with you is that they're going to be short episodes every day, but given the situation, I wanted you to have this whole episode right now, whether you're a sales rep, a business owner, a sales manager, we talk a lot about numbers, the economy, how to win at a time like this when things are.

Becoming really, really difficult and how to do it successfully within sales and marketing, managing. And so I wanted you to have this whole episode in its entirety right here. Theoretically after this moving forward, regular days, we'll go back to the shorter episodes, but I wanted you to have this. So here you go.

Here's the recording, the guest session I had with Casey in one shot. Welcome to the sales experience podcast. On today's episode, I have Casey Carroll. So he is the founder of Action Advertising Agency, A3, which I love. If you see the video for this, he's got his A3 hat on. He's focused on helping small to medium business owners find new customers using digital advertising.

Casey, welcome to the Sales Experience Podcast. Thank you very much, Jason. Appreciate it. So one of the things is, is you spend a lot of your time right now with your business focused on helping small businesses, mostly like chiropractors, dentists, sometimes larger brands, but auto dealerships all with their marketing.

And one of the things, there's two parts here. One is the main topic I want to start off with because we both have similar backgrounds, which is all about the cost per acquisition, right? So it's about doing marketing, paid performance marketing, not brand marketing to drive new leads. Prospective people and then resulting in some kind of sale and then obviously backing out cost per acquisition Which most people aren't familiar with or even customer acquisition cost a cap The other thing that's going on right now as we're recording.

This is the kovat 19 coronavirus and generally It's not something I want to talk about or focus on because it's so much in the media But what I think is interesting like we talked about in advance is how something like this So economic events that are occurring affect business and what you can do about it.

And, uh, so it's like that combination I think is 

super valuable for us to talk about for anybody listening right now. Oh yeah, 

Casey: for sure. I 100 percent agree. And we were kind of having a conversation before we started recording, which it's a bummer that we had some really good nuggets. We'll find them again.

We'll get it out again. Yeah, for sure. But there's a lot of uncertainty right now where I think if anything, more importantly than ever, You know, cost per acquisition is always going to be a function. Basically, we have a number of other kinds of formulas and I'll just kind of talk about them in detail, but right now in scenarios where we might be potentially steering down the barrel of a recession, or it might be potentially steering on the barrel of a business closure, depending on what kind of niche that you're in or dealing with your customers, for example, Not having revenue when they did beforehand because they've unable to work in the state for the past two weeks or three weeks or whatever it's going to turn out to look like there's a lot of uncertainty.

And so there's obviously opportunity, but it's important now more than ever to really know your numbers about things like cost per acquisition, being really focused around the process, the sales process, little things like even in good times, little things like schedule rates. can cut your return on investment in half if you're not careful about having the proper schedule rate and type of stuff like that.

And so knowing the numbers, really focusing on the details, really understanding your cost per acquisition and doing everything that you can to either meet the market where it is right now, depending on what kind of niche that you're in, whether that's with sales process, conversion rates, or even offering different products or services.

If you're finding that you sell high ticket services and no one's buying anymore because of. The nature of the economy based on what might happen after COVID 19, it kind of settles a little bit. All that sort of stuff is super crucial to kind of adjust your process for sure. 

Jason: Yeah, and I think it's so important because there's a lot of companies, and I know you've dealt with this too, and I deal with this all the time, where when things have been good for so long, Yes, I won't say it's easy to make money, but everyone just takes that for granted.

I talk to a lot of potential clients who are like, we're doing okay. I don't need your help as a consultant. And then I'll usually ask them, okay, what's your cost per acquisition? What's your lifetime value? What is somebody worth? They don't know, but it's so easy to, I don't want to say it's so easy to make money, but it seems so smooth and easy for them to make money that they don't have to know their numbers.

Right. It's almost like. Because I've been through this several times in my life, and I'm sure that you have as well, as we've talked about before, where I'm making enough money in my job as an employee, such that I don't necessarily pay attention to my expenses and my budget and money is coming in, money's going out, I seem to have money left over every month, and so it's okay.

If that ever changes, it is. Or pay cut or change 

jobs. It's like, Oh man, Oh my gosh, where has my money been going? I did that once where I like went through it and I was like, Oh my gosh, we're spending a thousand dollars a month on dining out alone. And because I was making money, like I didn't even notice it wasn't an issue.

Yeah. And it's not a big issue until it becomes a big issue. And I feel like that's the case right now for sales reps, for sales managers, for business owners, where it's been good for so long. They don't know their numbers, but they just know they're picking up money every month and they don't really know how much.

And then we get to a time like this, where it just is smacking everybody in the face, which is like, what are the numbers for my business? But like you're saying, it's not a bad thing. It doesn't mean it's over. It just means you need to know where you're at. So you know what you need to do. 

Casey: The sales process is always a formula really at the end of the day.

Like I can tell you right now that there's usually four things that I track with every single one of my clients to really get a good idea of their entire process and whether something's working, whether something's not working. And so. In good market, you might have a fantastic close rate because money's flowing freely, everyone has expendable capital, depending on the niche that you're in, you know, it's going to be something where in good times, a high tide raises all boats.

And that's kind of a scenario about what we've dealt with. And so in those good times, like you mentioned, there's a lot of bad habits that can be created that are kind of overcome just by the sheer fact of loose and free capital. And because of the fact that the consumer might be pinched, if you're stirring down the Oh, hey, you know, let's say for example, you're a med spa and you work in the restaurant industry or the bar niche because if you're attractive, you're going to get more tip money if you're standing behind a bar, kind of an example, whether you're a man or a woman.

And let's say, for example, that all of a sudden you're not getting paid for the next two weeks. Are you going to have enough money to go to a med spa or are you going to focus all your money focusing entirely on paying rent? Right. Or childcare, for example, if the school is out. The fact that my customer's customers might be financially impacted.

That's where you really have to, again, yeah, focus more on the process. And so if you don't know your numbers, it's crucial to start now. You need to get ahead of this before it becomes a big problem. Because if you don't know what you can realistically afford to be able to acquire a new customer, if you don't have that information, if you're saying, okay, here's my average lifetime value, it's, let's say, for example, it's 7, 000 or something like that.

If you don't know how much you can afford to acquire that customer for, then you can't reverse engineer the entire sales process. That's even true in good markets, bad markets, regardless of the market, you should still know those numbers. But again, when everything is economically easy peasy and everyone's got capital, then no one cares about sort of stuff like that.

But that is also the stuff that matters the most when the market's slowed down, because guess what? Your competitor Does think about that sort of stuff and the one who is the most wise to understanding what they can afford to pay for a client or a customer is also the ones that they're going to survive in the economic downturn when everyone who operates on feelings and supposition rather than logic, data, and numbers, those ones are going to be the ones that die quicker if they focus entirely based on how I feel.

So knowing the numbers, if you don't like numbers, start liking it. Cause I'm sure you also like staying in business too, or I'm sure you also like getting new customers on a regular basis. So focusing on the process is crucial, but the most important thing, let's say for example, that you are in a niche where you need to schedule people to come into your business, whether you're a chiropractor, a dentist, med spa, even a gym owner, for example, in a lot of these niches, it's really crucial to really analyze first off the schedule rate.

So the schedule rate can be a fantastic way of being able to determine, are you getting the proper number of people to come in from the leads that you schedule now, granted, or the leads that you create, you know, if you're a direct response marketer, like me, you focus a lot on creating action. And that most of the time is generating a lead, filling out a form, downloading a lead magnet or something like that.

Most small business scenarios. I usually just focus on lead generation on the front end for a lot of that, that front end traffic for cold traffic, but the schedule rate is like the first thing that you can easily mess up. To the point where like your entire return on investment gets just demolished.

Nothing else matters if the numbers are good after that point kind of thing. Second thing to taking a look at is your no-show rate. So the no-show rate is crucial. I mean, for example, if you can go from 30% no-show rate to a 10% no-show rate, it is such a massive difference in your return on investment that those little differences make a huge impact in the grand scheme of things.

And so, you know, I've got some clients where. They've never really had to deal with either. They dealt with a lot of referrals or they dealt with a lot of like shows where people came in from like their events that they would manage in town and stuff. And so they started, you know, all of a sudden getting cold traffic and they're like, Whoa, Whoa, Whoa.

These leads are poor quality. Like what the heck 40 percent of my people aren't showing up anymore. Like Facebook must have nothing but just poor quality leads. Like, no, the reality is. You're selling the same way as if they've already trusted you. And the reality is no one cares about you until you give them a good reason to.

And the sale always comes after the experience. So if you've got someone who's willing to vouch for you as a referral, they're going to buy. It's like a lay down sale, you know? And they're 

Jason: going to show up for your appointment, for your schedule thing, for your demo, whatever it is. Exactly. 

Casey: Because also usually there's intent.

They're asking their friends. Do you know a good chiropractor? Do you know a good med spot? Do you know a good dentist? They're already looking for one. So they already understand that they need one in the first place. And then by the time that they get in your front door, they're already ready to buy.

They just needed to find the right person and actually walk in and cut you a check or give you a credit card. Right. Yes. Little things like no show rates. It's not indicative of being a low quality patient or a low quality customer. Schedule rates oftentimes have a lot to do with your process on how you handle it.

So the kind of reminders that you put in place can have a huge impact on mitigating no shows. Even asking for something like a credit card, not even charging it, but just asking for it, and then having a good reminder process in place that has reminders two hours out, 24 hours before, sometimes even two days before, and also a confirmation text or email or both.

Whenever that happens, and also calling people manually, like that sort of stuff. So the no show rate can have a huge impact on your return on investment. And then the next thing to check at that point is always going to be your close rate. So close rates can also be kind of, they can hide unfortunate truths sometimes.

So for example, you know, with cold traffic, even once you get to that point, a good close rate is probably 40 percent roughly in that range for cold traffic. So it ends up being kind of like a numbers game kind of scenario, where if you play the game and you look at the numbers and you focus on improving everything at scale versus I feel like I've had nothing but bad quality patients or bad quality customers for the last week.

You need to take your feelings away from it and look at the numbers, because if you're finding that all of a sudden the coronavirus or COVID 19 is having a massive economic impact to the point where you can't close anyone anymore, You have to look at your numbers and find out where's the deficiency.

Is it your close rate sucks? Well, if your close rate sucks, you at least know at that point, you know, which direction to focus on. You know that, Hey, I need to get some guidance from someone like Jason, for example, that can help me manage or change my sales process or from a number of other resources that can say, okay, well, sales is the problem.

Most of the time people think they have an advertising problem, but the reality is it's not the truth. In fact, advertising creates more problems most of the time for people who aren't ready for it. So you all of a sudden start dumping all this advertising. They're scheduling more than two weeks out. No shows start skyrocketing.

No one wants to call back the leads more than once. And therefore they're not getting a 50 percent schedule rate. And then when they come in, you're selling them just like their referrals, where you assume that they already trust you and like you and know you. And therefore the reality is like, wait a minute.

I think I'm a sales god because I'm used to dealing with like a certain type of lead, right? And then all of a sudden you're like, wait a minute. Now they're not buying for me. Therefore, Oh, it's everyone else's fault, but my own. You've got to take accountability for this. And especially if we do turn into a recession, which all indications show that when the world shuts down for an entire month straight, there's probably a good chance that we're going to slip into a recession.

So you have to analyze these numbers. You have to really like digest these numbers and live, breathe, and sleep, the sort of stuff where you track your numbers. Every single week, month, six months, quarter, doesn't matter. You need to know what your cost per acquisition is. You need to know what levers you can pull to improve that, whether it's finding new things to sell, increasing your value ladder in some way, shape, or form, or improving the numbers so that you can justify taking on more expense in advertising if you need to, knowing full well that the majority of people are still probably going to say no.

If you don't know those numbers, you're going to be out of business. In my opinion, in the next economic 

Jason: downturn and in my experience in most economic situations, even when times are good, you see, and that was a ton of information and I super appreciate Casey and I want to unpack all of that because it's so valuable.

No, no, no. And I didn't want to cut you off because it was, no, no, no, it was great stuff. Like I love it as a kind of like a high level summary of all those things and I hope everyone listens and the first thing before I get into kind of some of my thoughts and responses Yeah. About it is you focus your digital advertising and performance.

Marketing kind of resources towards like you said, chiropractors, dentists, auto sales, things like that. However, the same things you're talking about apply to a lot of industries, especially business to business or anything where there's a demo. So something where you've got to go from a lead to a conversation with some kind of presentation and then a conversion.

So I have a lot of clients that are in the B2B space, especially if it's software, SAS type things. So there's a lead that's being generated, which is then has to show up for that demo. When they show up for that demo, then there's a presentation and then there's a close. And so it's very similar. So people listening to this, like take the stuff that Casey is talking about or I'm talking about and see what applies to your industry because it does a lot.

Now I've been in some business to consumer situations where literally someone's calling right in off of a letter or off of an online thing and it's instant. So there's no show where the show rates a hundred percent and then it's a conversion. Yeah. It's inbound, whether it's performance or a live transfer or somebody else's done the painful work to get that person to you. And so, but for other like B2B where there's a demo, it's so important. And I think one of the interesting things from the very beginning that you were talking about is talking about the operators in here, and this might trigger some people, it might hit some people in their egos.

But if you don't know these numbers, in my opinion, you're a sloppy operator. Like you're just going off of feelings and hopes or what I see a lot, especially in the auto industry and in several industries where this is the way we've always done it, this is what we do. Like we don't want to do anything different or we're not open to change innovation, and I'm not saying that because I want people to send me hate email or be mad kind of like yourself.

I want to open people's brains to like, you've got to know these numbers. If you don't know these numbers. You don't know why you're winning when it's good and you don't know why you're losing when it's bad and it's scary Like I talk to business owners all the time that don't know their number and i'm scared for them Which in the past seemed kind of weird now, it seems like it's a totally appropriate with what's going on with the economy It's the norm for me That's a 

Casey: crazy thing We're like even with a lot of these auto dealerships that I work with where they spend over a hundred thousand dollars a month They don't Track a lot of the detailed numbers because causation does not equal correlation.

So sometimes like, Oh, I'll run an ad, like I'm busy the next weekend. Therefore, there's gotta be something related to that, that newspaper ad that I made when they're out in the weather. Or yeah, yeah, so there's these little things like this where just because you've always done business a certain way doesn't mean That it's the right way to go about it moving forward And it doesn't mean that you're not losing out on potentially millions of dollars a year in revenue and opportunity costs That's the problem about opportunity costs is that they are the most Expensive kind of costs you can ever deal with, including labor overhead, including cost of advertising.

Cost per lead pales in comparison to opportunity costs. And that is lost opportunities that you could have had, had you just had your stuff together with all those other metrics that matter. And the only way you can improve these hidden costs that are actually weighing down the potential growth of your business is by mitigating them.

But the only way you can ever decipher and figure out exactly where there's a problem is, is by knowing exactly where the problem is in the first place. You can't create a solution to a problem that doesn't exist. So if you don't know, if you've got a schedule rate problem. How the heck are you supposed to be able to solve that issue?

What you're going to do is you're going to resort to emotions and then blame advertising. That's what everyone does in that situation is, Oh, wait, no, it's not my fault. We've always done business a certain way. It's advertising. 

Jason: Well, and it's interesting. So I rarely share this outside of like networking circles and people I talk to, but I deal with a lot of people kind of like yourself as good partnerships.

So you are helping companies get their leads. And what I always tell marketers and people like yourself is, Hey, when your clients are complaining about your leads, send me in because we both know it's most likely not the leads as the first issue. Sometimes it is like I've been on the buying side of leads where there have been some garbage ass.

leads that I've gotten. Some of it is either scam leads and it's bad or some of it's just not the right fit. It's a square peg for a round hole situation. It's not good. But generally, like you said, like if the leads are being generated, people are showing up for that appointment and they're not converting.

Or they're not calling back or they're not following up or the reps are talking to them once like that's not a marketing problem. And I think this conversation is important because I like to always frame these kind of conversations for business owners, managers and sales reps that might be listening to this.

If you're an owner listening to this, know your numbers. You need to know that cost per lead, cost per acquisition, lifetime value. And then that show the schedule rate. The show rate and then your closing rates and all of those metrics in there and you said it earlier It's funny You're like if you don't like numbers start to like numbers or hire guys like us and trust people like us that we know the Numbers and then we'll provide the strategy because I have some clients like that where they're not big on numbers They like them, but not enough to really analyze them like you and I would but then they trust like okay Based on what you're saying, they're gonna pull the trigger and make some decisions For the managers out there, you've got to know because an owner at some point, especially when things turn like this, they're going to hold you accountable.

And they're going to say, wait a second, why are we losing money? Right. And you need to know. And that goes for the sales reps to real true sales professionals know all of their numbers. And if you're listening to this and you don't know them. know them. And if you don't track them, figure out how to get your hands on them because it's like a basketball player or baseball player, football player without a scoreboard.

It's like, how do I know if I'm winning or losing? What are the stats if you don't 

Casey: know football without having any stats for any of the games at all? 

Jason: You pick a player and then everyone feels if they won or not. And then you just kind of, or maybe it's the final scoreboard, but no stats. And you're like, we won.

Why did we win? I don't even know. Yeah. 

Casey: So here's the thing. Like if you actually know your numbers, it's like literally going to Vegas, counting cards and being okay with it. And no one kicking you out of the place, totally legal, totally legal. Like, Hey, you can count cards all you want. You're allowed back to come back to our casino and make as much money as you want to, because you're counting cards.

You know, your numbers, therefore everything's good. If you don't know your numbers. It's literally like playing on luck. And if you play on luck, what are the odds? Casinos in general are such a profitable industry, not because they give so much money away to the people that spend money at their establishments.

It's because they're doing a damn good job of knowing their own numbers. And they know, for example, you have seven to one odds playing blackjack, which are some of the best odds in the entire damn casino. And that's crazy when you think about that, like, wait a minute. For every hand I win, technically I'm supposed to lose seven.

What the hell and that's supposed to be a good odd now when you know your numbers again, it's like playing You know blackjack exactly like counting cards knowing what the cards are likely to come up knowing what the odds are in your favor And then playing the actual numbers game realistically versus literally just blowing on some dice Throwing it and hoping that I get the right kind of dice or playing like we're like, okay Well, i'm gonna guess a number on this thing and if I get it, it's pure luck people love playing the lottery But look There's a reason why on every state gaming commission it says the lottery is not for investment purposes Because you can't invest in something that you did is based on chance and luck And if you don't know your numbers, you are literally running your business on chance and luck It's not based off of counting cards at the casino instead You're the one where the casino is taking your money and and again in scenarios where times are good People forget what it's really like.

I remember selling in 2008. I remember calling on businesses that were shut down and in construction companies that didn't weather the storm and all the hard choices they had to make. I was in niches like entertainment and education and schools, like private schools were shutting down, colleges and stuff back in 2008.

It was, I remember 2008 vividly. It's probably changed my entire perspective on everything for the rest of my life after that point. And I remember just how challenging it was because I was also a real estate flipper. So I had to see people losing their homes and like It was such a tragic thing, but at the time it felt like everyone was suffering, everyone was losing.

And so as long as, as a bull market that we've had for what, 10 years now over that, you know, 11 years long, this bull market in the history of our economy, the history and people get fat, happy, and they forget. And people have a short term memory. And so that's why more than ever, it is so important. Look, this weekend, we're probably going to all have mandatory quarantines.

Anyways, by the time you're listening to this, I hope you're listening to this and you're sitting behind your computer being like, man, I'm not going to the gym right now. Cause I can't, I'm not going to go to the bars right now. Cause I can't, I can't go to restaurants right now. So what am I going to do?

I'm going to focus on looking at my numbers and saying, okay, do I really have my stuff in gear? Do I, do I, am I really prepared for what might happen if you're not putting measures in place right now to what might happen three, four, five, six months, even a year from now with the fact that our national productivity and revenue is slashed because people aren't working.

Materials aren't coming in from other countries. There's this massive domino effect that's happening across the entire world right now. And if you're not prepared, You're going to be caught basically getting screwed by the casino 

Jason: in this situation. But the thing is, like, let's look at it for what really is happening, is that most businesses aren't prepared.

Most salespeople aren't prepared. They don't know what to happen. I've been talking to a lot of my clients and other businesses the last week and a half leading up to this point right now, mid March, and most of the owners get it. Most of the reps don't. The reps are, salespeople are like, okay, what are we going to do?

Who's going to buy and whatnot. And my feeling is, is that no matter what, even during times like this, if you're selling something that's valuable, either it's helping people, it's a product service, whatever it is, assuming it's not something physically they have to do like a restaurant or a spa that's suffering right now, otherwise, if it's something you're helping somebody with, then there's always people who need help.

Right. It's not that there's not places that aren't affected right now in the economy, but there's always people. Same thing. Like when you were selling stuff before that you were doing with freight and then also in real estate, like there's always. You might have to just put in more effort. And this is what's interesting because kind of when I was thinking about our conversation and the advice I've been giving to businesses recently, which is you might have to make five times more calls, right?

That's what I've been telling sales reps. You might have to make 10 times more calls than you normally do a day to find those opportunities that you want to convert. And it's interesting because going into this conversation and this is that Really what that means too is you've really got to know your numbers as a business.

And so you gotta know, like, where is your profitable limit? Like how far can you go and still get profitable deals with a 

Casey: lifetime value? Afford to pay to acquire a new customer. Because there is a perspective that a lot of businesses have, which is I want to spend the least amount to acquire a new customer as humanly possible, which I get.

And I understand that logic because I'm like, Hey, look, the return on investment is fantastic in those situations. But on the flip side, rather than looking and saying, what can I do to, to decrease my cost of per acquisition as much as possible? There's other ways you can improve that, that whole function of return on investment, which return on investment is always going to be, what's the average lifetime value divided by what's the cost per acquisition, right?

Total costs, including in that scenario, if you can make it work with a two to one ROI, whereas everyone else in your industry is fighting for a four to one ROI. Then you're in a good position to be able to weather the storm when others can't because the most important number to look at is not necessarily what is the cheapest way I can possibly acquire new customers.

It's what is the most I can possibly afford to justify acquiring a new customer. A hundred percent. And it's important to know that. So for example, like, look, you know, if your partner services, you know, if you're a SAS product or if you're a B2B product or whatever, and then you're priced yourself. Too low, but also at the same token, the demand isn't necessarily with low prices.

Instead, it's with higher value kind of scenario. Then you've either got to adjust your pricing structure and value offering to the marketplace, or you're going to have to play the price game and just know that you're looking for a certain segment of the market that doesn't care about value as much as you care about price.

And so at the end of the day, especially even the B2B world, look, the B2B sales process is always entirely based off of logic. Most of the time it's based off of logic. I learned in B2B sales a long time ago that a lot of buying decisions need to have a positive or negative impact on peers. I took axiom selling sciences and so productivity, image expenses, revenue, safety, security, stability.

If you can show those numbers to your ideal customer profile kind of scenario, then at that point, are you willing to pay 10 percent more, but you can get 10 percent additional value because you have. Maybe 25 percent less OSHA violations, which is costing you so much money in your insurance, deductible or whatever that might be.

Or maybe it could be communication like, Hey, I've got missing assets like this or that. There's a number of ways you can spend it, but really at the end of the day, it's super crucial to know what we can realistically afford. And so because of that, if your average lifetime value is complete crap. Because your retention is garbage or because, you know, you're finding that your average retention rate is six months or something like that.

But the reality is the rest of the market's at 12 months. Well, if they're getting an additional six months worth of revenue out of every single client that you're not getting, you're not going to be able to afford to pay more to acquire a customer. If you really, really, really needed to, if the gun was against your head and you had to make a decision, you wouldn't be able to do it.

Right. And so it's, it's important that in moments like this, the natural inclination is always going to be, well, what can I do? To acquire customers for a lower price when the reality is you need to figure out, well, what can I do to add enough value or enough service to my clients to keep them longer or increase my average lifetime value?

Because if you can increase your average lifetime value, you can always afford to pay more than what the market can to acquire more customers. And the market, the business that acquires more customers. At a price or a cost that's affordable in general is always going to be the one that wins the most. So if your marketing isn't cheap anymore because of what's happening with the marketplace, if you're finding that your marketing is producing a higher cost per acquisition, you're kind of left with one option, which is I need to figure out how I can improve my average lifetime value, whether that's retention, whether that's a better value ladder offering, additional steps on the value ladder above and beyond what you're at right now.

Finding different segments of the market where you would usually turn those leads down, but instead finding a service for those businesses within the same silo of your model. It doesn't detract too far away from what you're doing to the point where you're getting distracted or whatever little things like that matter.

And again, what leads up to making the decision of saying, I need to figure out how to improve my average lifetime value. What is that? All the 

Jason: little numbers, got to know 

Casey: your numbers because you'll never know. Like what button do I have to put? Which, which knob do I kind of have to spin just a little bit in one direction?

You'll never know if you've got a average lifetime value problem unless you know what your cost per acquisition problem is and what leads to cost per acquisition. Again, schedule rate, no show rate, what's the close rate, what's the average lifetime value, all those numbers, like they're all, they don't exist in silos.

And I think a lot of people sometimes they look at this sort of stuff as if it's like, Well, that's an individual kind of silo where it's like, okay, well, no, that bleeds into that, that bleeds into that. And then it does turn legitimately into a massive domino effect. If your schedule rate sucks, everything else will have a massive impact at that point.

Nothing like if you're scheduling 25 percent of your leads, when you're ideally supposed to be closing, you're scheduling 50 percent on the very front end, just the lack of followup. If you don't follow up with your leads, you know, at least seven to 12 times, sometimes depending on like the industry that you're in, then your schedule rate is literally going to be cut in half.

Even if all your numbers look good for the no show rate, for the close rate, and for the average lifetime value, if on the front end, that very first part of the equation is my schedule rate sucks because my people aren't calling back the leads and following up with them. That one, that one, one tiny little thing, that thing that doesn't seem like it matters at all can literally cut your return on investment in half to the point where like your average cost per acquisition will like literally double compared to where it should be because of that something like that.

So those tiny little numbers that don't seem like they matter that much matters far more than what everyone else usually gives credit to. 

Jason: Well, and I think one of the most important ones, which I'm glad you hit on, because I focus on this a lot and have seen this for so long, is that lifetime value and that retention number, right?

So if the industry is at 12 months or the expectation is 12 months, you're at six. Now, here's the big thing, and this is where I always like to point out, and this is good advice. Owners, managers, sales reps listening to this, especially sales reps, is If your retention, your client retention and lifetime value is at six months, industry is at 12.

What a lot of companies do is they say, we need more customer service and retention people. Let's throw more resources than that. And essentially let's keep more deals. Mostly, you know, it's twist some arms. Let's use some tactics. Let's try to retain them. Right. And there's sometimes where people cancel and you want to retain them.

In my experience, kind of like what you're saying with all the numbers in the front of it, is that retention, six months versus 12 months, is most of the time set by the salesperson on the front end because of how the deal is sold and how the person is enrolled and what the expectations are set, right?

Like, When you do it wrong right and wrong meaning you're getting six months of a client value instead of 12 months when you're doing it Wrong, you're gonna have people that can't I mean i've literally seen closing scenarios where somebody gets off the phone from buying the customer hangs up Calls back five minutes later to cancel because it felt so wrong and it went so wrong and they didn't feel like what happened Went well, and so When you have those kinds of things, like don't always just look at retention.

Yes. You probably need retention and people manning the phone, especially in times like this, but also look at your sales process. What are you doing on the front end? What are you saying as a salesperson, how are you setting expectations? Are you moving the right people forward or are you manipulating twisting arms?

Are you desperate? And that's the biggest thing right now, like as we're getting into this, like. Desperate times, right? Because that's really what it is. Cause no, most people haven't seen this in a while. Like you said, is that when people are desperate, it comes across in their sales process and the marketing and the sales managers and how they're running things and the sales reps are desperate because they need to close deals or else.

Right. And they don't want to, they're struggling and concerned. When they used to have five phone calls a day and close a deal now, like they can't close anything and no one's showing up and now it's desperate. You get on the phone, you act desperate, you come across desperate, you might close deals, and then they're all going to cancel.

So that's one of the biggest things for anyone listening to this right now in this moment and long term is. You know, stick with your numbers, do what you do, but set the right expectation, close people properly so that they're good longterm clients. Like literally if the industry is at 12 and you're not at least getting 12 months of retention from somebody, let's say whether it's a gym or it's a SAS product, then be very careful.

And then the other thing I was going to say too, is like, you know, as you're saying, it's the numbers, right? So you got to know the maximum amount that you're. Okay, paying for it to generate a new client and still be profitable or break even in times like this If you can break even as a business with all of your costs in it Like hey, that might be good for sustaining But you also got to be careful not to go the other route, which i'm near silicon valley I see this trend all the time companies raise money They throw tons of money at the marketing to generate clients and those clients are just bad.

They're losing money all the time And it's just terrible. And so it's like a bad business model. It's all these startups that we see all the time where it's so unprofitable, it's ridiculous. Right. So you got, that's why you got to know your numbers. You got to know where's that line. 

Casey: Right. Yeah. And one thing that I find that I really liked about what you mentioned.

So there's a story, there's a good friend of mine who actually works with recruiters, specifically with the retention part. And you might think to yourself that like, Oh, having a person into a customer service person who's trained on our save promotions, we're trying to save the customer kind of scenarios.

Oftentimes I tend to find that when people churn or when businesses churn, you're totally right. It's the expectations that are set on the front end. And so for example, like an onboarding process, like if you're selling SaaS or a piece of software or something like that, where if your onboarding process isn't absolutely 100 percent buttoned up, like perfect, then you have a higher likelihood of them churning later on.

Or for example, if you have what I'd like to call service bloat, Product bloat where you have all this stuff that makes your scope of work so outrageously difficult to actually be able to execute at scale and then be able to train people with the right processes to be able to onboard people efficiently and effectively.

For example, in that situation, you might find that someone like doesn't leave because of the fact that you didn't bring them value. They left because you promised that you're going to do something that you didn't actually do because it was very difficult to manage that much of a bloated scope of work, 

Jason: right?

Because you over promised and you said that you'd solve all of their 

Casey: problems over promise. And then, yeah, exactly. And then they would actually under deliver in that situation. And so you never want to over promise anything always under promise and over deliver versus over promise and under deliver.

And so if you can honestly take a look at what everything that you offer your clients. And if you can honestly tell yourself that 75 percent of it is BS that you just added to it because you felt like you needed to, to be competitive when the reality is a hundred percent of the value is coming from that 35%.

If you've got a massive amount of staff that's required for that 75 percent that's garbage. I don't know if I did my math right. 25%. Yeah. Um, if you've got a massive overhead staff, if you've got all these bloated scope of. work, whether it's B2B or whatever, because of that 75 percent that people don't really care about, that doesn't bring them value in any way, shape or form, but you do it because you want to like, make it seem like you've got this massive value stack kind of situation.

Eliminate the BS, get rid of that 75%. If you're losing clients because they care about you not doing one tiny little part that doesn't matter versus the rest of the value that they got. Eliminate all of these additional parts that are creating a poor customer experience. And that's part of the reason why it's, I think it's really crucial.

Like the majority of my clients that I have right now have been with me for years, they've been with me for two to three years now, the biggest challenge that I had in my business recently, which was trying to figure out how to scale by still offering the same kind of value for each individual person.

Like, how do I do it on an individual basis? It forced me to completely change my entire process and my business operations to be able to. Help people in the same way that I do, but also help them understand what they don't know. For example, like I just came up with the idea of this report card where I'm literally grading my clients on all those major numbers because they don't look at those numbers themselves.

So I'm going to start proactively actually doing it at scale with every single one of my clients and then having conversation with them about where they're failing and where they're doing well. Literally with giving them letter grades based off expectations around schedule rates, no show rates, close rates, average lifetime value, stuff like that.

Those little things. And I looked at myself, I'm like, look, whenever a client wants to turn and leave my business right now, they would always say, I feel like we haven't gotten a lot of value. I feel like we haven't gotten this. It's always feelings. And that's the same thing for your customers, customers, all those people that are listening to this right now, you know, no matter what business you're in, whenever someone decides to say, I don't want to spend money with you anymore, it's always an emotional decision.

It's an 

Jason: emotional decision on the perception of the value, right? Bingo. 

Casey: Yeah. And so if you've got something that's devaluing your brand because you're, you're making it too difficult, or if you're not doing something that you should be doing to eliminate friction in the experience, the buying process, whatever that is.

If you're not actively looking at what you're doing, then you're making massive mistakes, you know? And so I had to like, have that honest conversation with myself recently, where I'm like, I feel like I could be serving my customers better in a way where, you know, I have accountability. We know what the numbers are.

You know, it's even got a, you know, a built in ROI calculator. If you ask like every single You know marketer out there if you had to like really grade and judge your return on investment for your clients How would you feel about something like that? A lot of these guys would be terrified because they're like, whoa, I can't control that as much.

Okay Well, that's part of the reason why i'm literally grading them on schedule rates No shows close rates and all those other metrics that matter because of that Like it makes sense in the context of that sort of stuff. But if things look terrible, I want to know that I want to know that something's really bad so I can mitigate that sort of issue where that where their feelings take over and instead we can logically proactively own that dialogue before it becomes a big problem.

I noticed you had a terrible schedule this month. I'm telling you right now your return on investment is going to be cut in half. I need your team to really be bought in on this and if they're not bought in on this, what's going to happen is you're not going to be able to find value out of any advertising source whatsoever.

Whether it's with me or whatever. Doesn't matter. Doesn't matter. So this is really crucial for you to really, really be bought into. I know you might want to just do XYZ because you went to school for XYZ. Maybe you're a dentist, maybe you're a med spa, maybe you're a SAS product, whatever that is. You might just want to sell your SAS product because you're like, Hey, I don't want to have to deal with those other stuff.

Look, you're going to have to, as a business owner, you kind of have to be good at a lot of different things until you can build a big team that cares about that sort of stuff more than you, that knows that that sort of information, but you should still be actively checking in on them. So there there's a concept, the report card I directly ripped off from, I can't remember what business book I read, but Maybe it's a traction.

I can't remember. But basically they would have like every part of the business would have a grade for every single week, like based off of what the standards were that they set. So rather than like having to look at all this sort of stuff, all this information and decipher, like with so many different data points, what their fact and fiction really is.

Yeah. They break it down into something really easy to read on one page. And that's where my whole concept of the report card came up for my clients too. And so little things like that, they matter a lot. And that's where you really need to be emphasizing on obviously not, not only knowing those numbers, but if your clients are leaving you because of churn, you really have to dive into those, into the details to know what that sort of stuff is.

Jason: So it's interesting cause I hear you talking about it and it's good business advice for any marketers who are listening to this and how to deal with their clients. But then I also. See that same advice and what you're doing and how you approach it and how I approach it. The same thing that a business owner should be doing with their teams, how a sales manager should be doing.

Right. And so looking at it and then having an honest assessment of what's going on and knowing the numbers and knowing what it should be and what that grade is. Right. So there's a lot of people in business. And there's nothing wrong with it, but they're not numbers people. They're not analytical people.

They're not going to dive into it. They're not going to create formulas. Totally fine. But you got to know what that benchmark is. So you got to know that your closing percentage needs to be 40%. Where is it now? Most of them know it, but they also don't necessarily want to address it or be proactive and then take action on it.

They're uncomfortable or they're just hoping it'll get better. Again, hope is not a strategy and you know, in times like this, right? So going back to kind of where we started with this and the timeliness is, you know, in times like this, when the economy is shifting and potentially going to go into a recession, which means it will not get easier for quite some time is you've got to rip that bandaid off.

You've got to know the numbers, whether you're a sales rep manager and owner, you've got to have an honest assessment and then you've got to figure out how to win. So this isn't a, you know, what's the honest assessment. Oh my gosh, we can't close enough deals. We're not profitable. This is terrible. But instead, my view, glass half full kind of perspective is, okay, now that we know our numbers, let's look at it.

Okay. What do we have to do to win? What do we have to do to survive and win anyway? Like what does it take? Is it different sales rep, a different sales process, different leads, better conversion, more. Follow ups actually having reps do their phone calls or putting in technology to make the phone calls and sales reps won't, like, whatever.

It's, how do you win? Not can we win, but like how do you win? How do, but you can't know that until you actually can, you know, see all the 

Casey: sets. So one thing I wanna mention that, that might be kind of interesting 'cause you know, I went to college, got my bachelor's degree, you know, I got my degree in business and everything.

And so like I, you know, for all intents and purposes, I am a business major at one point. I was actually pre med and so I would take a lot of biology. I took calculus. I realized I absolutely hated math You know, I wanted to be a doctor because I thought I was gonna get paid oh so much money and then I got into It like I don't care how much money I make I can't be good at numbers Especially when it comes to like calculus, but what I was really good at is I was really good at chemistry.

So chemistry was something I was just naturally gifted at for some reason. And so this kind of, there's a point to this, but whenever there's an issue in your business, if the numbers are telling you that there is a problem, you're kind of left with one decision at the, actually two, technically two decisions.

If you know where the problem is, you can make one decision, which is to not do anything. And then hope it just changes on its own, right? And that's the definition of insanity, if that's the case. You know, like, you know, doing the same thing a million times over and expecting a different outcome. It doesn't happen.

Every time I look at a rock, it's going to be a rock. So if you're looking at a problem and you realize it, yeah. Or, or every 

Jason: time I get in my car, the check engine light is on. I'm just going to hope it's going to go away. I hope it just goes away. better. Right. Exactly. And I used to do that in the past and that didn't work.

And you know, weeks or months later, it became worse and worse and worse. And then you got to 

Casey: fix it. You can go. And that's, that's exactly this issue where like you can catch these problems before they become big problems. So knowing your numbers and knowing where there's problems, that's the first step.

The next step is making a decision. Okay. What's one decision pathway? I could say, I'm not going to do anything. And they just hope and pray that it changes, which reality is that's not very likely. Right. So you're going to have to make a change once you know where the problem is. Well, how do you measure whether or not that change is having a measurable impact on your business?

And that's where the concept from chemistry comes in. Where whenever you are doing anything with chemistry, as most of us have taken chemistry classes, biology classes, whatever, we all know that when you test several compounds together to see what happens and see what reaction is, and you measure that reaction, you're always measuring that hypothesis versus a control.

It's the same thing when it comes to data and to numbers. So it's basically like if you kind of think about it from the perspective of everything that we do is like some massive science experiment. We're literally mad scientists sitting behind, you know, in this, there's lightning bolts coming from our castle and we're like, you know, mixing stuff together to see what happens.

But the only way that you can ever be a successful chemist or a successful business owner is by measuring the changes that you make, not making too many changes at one point in time. If you're finding that you have a schedule rate issue. Change the schedule rate and then measure and see what happens weeks later, a month later.

And did it make a measurable impact or improve your numbers versus your control? Your control is basically where you were at before. If everything looks better compared to that, you've made progress. You already know at that point. Okay. So I know that by adding this one little compound to this, it created this positive reaction.

Cool. Document that move on. If things are getting better in the direction, and if you know where your key performance indicators are, I need things to be this exactly. And if you're making progress and you've actually hit that KPI move on a lot of times people like to just literally be like dwell in perfection sometimes, you know, where it's like, Oh, I want to test a million different ads, but my existing stuff is working very well.

And it's well within KPI, but I just want to test them just for the sake of testing it. That's the dumbest way of approaching anything in general. It's like literally trying to create solutions to problems that don't exist. So if you focus your energy on the actual problems, set KPIs, measure where everything is, you know, with your marketing process versus those KPIs.

If you know for a fact, your goal is to get a 50 percent schedule rate, then measure everything versus a 50 percent schedule rate. If you're not at 50 percent schedule rate, change your process and see if you actually got better the next month. And if you didn't. Then you clearly that change didn't work back to the drawing board, go on to the next thing.

So being like a, the, you know, the mad scientist chemist kind of scenario, measuring, finding a problem and then making a decision to change that problem. And then measuring where you were before versus the change that you made. And then seeing if it actually improved your numbers towards your KPIs. If that actually made a change, boom, move on.

Then you can focus on something else. That's your problem. Cause you have a million problems every single day as a business owner anyway, but it's important to. Measure versus your control. Always create a hypothesis versus your control. Measure the change you're going to make once you understand that there's a problem, versus that, only make one change at a time, and then see what happens.

And then measure it like two weeks later or a month later and see, okay, well, is our schedule rate higher? Yes. Okay, cool. Is our revenue still higher? Yes, it is. Perfect. Okay, so if all those numbers are, are, like, the formula's making sense now at that point, everything's in harmony, but it's always usually one thing at a time that's going to cause everything to go out of whack.

Sometimes if you've got like two or three different things that are, that are wrong at the same time, it's like literally trying to play whack a mole. And it's hard sometimes if you're trying to make too many changes at once, it's hard to be able to measure the impact of those changes. Unless we already know based on standards in the industry or something like that, that you need to have the schedule, right?

You need to have the show, right? This is the actual average lifetime value. If you know those standards, you always, you can already stick to your KPIs directly there and then, and then make changes as you go. But it's really important to know that you have to measure your changes versus your control. I do the same thing in advertising.

I did the same thing when it comes to sales process. It's. all the same. We're all these mad chemists that are basically mixing stuff together to see what works. But documenting it to see if that new compound that we decided to like create together, you know, on a whim is actually having a positive impact towards schedule 

Jason: rates or whatever.

And I think that's a kind of a great place to end this conversation. I know we could keep going, but kind of wrap things up, especially in the moment with the COVID 19 and You know, this being top of a lot of times, anyone who listened to my podcast, it's very evergreen. It's more focused on, you know, general sales experience, practices and tactics.

However, we're in a interesting time. I'll say interesting as a nice positive way to put it, but who knows what's going to happen. You know, where things were at last week are different than where they are this week, but I think that's great. It. Vice and a lot of companies don't heed that advice, which is also be careful.

You don't try to change everything at once. So if you're a business right now with a sales team and you're not winning, fight the urge to change everything, like fight the urge to go, okay. It's the recession might be coming. People aren't showing up for demos or appointments or filling out whatever. So let's change our leads.

Let's change our script. Let's change our schedule. Let's change this. Let's put in a new CRM. Like let's just try everything and hope something is going to work. Got it. Like, and again, anyone listening to this is probably, you know, might be tired of it, but if you don't know your numbers, first thing is.

Spend some time, know your numbers, and then go from there as to what you should change, where the issue really is today. And if you can go historic, right? Mm-Hmm. , six months ago, what was your show rate? What was your close rate? When things were good at their best, what were your numbers? What are they now?

Where is the one issue fix that one issue? If people aren't showing what follow up can you do, what kind of. Preemptive phone calls, emails. What do you have to do? Do you need more lead? If your show rate is garbage right now, and that's life, like you're doing everything you're doing your seven to 12 reminders, you're reminding them up to, you know, three seconds before the appointment and they're still not showing up, like maybe you need to buy twice as many leads, but you got to know if it's profitable.

And if that's the case, buy twice as many, get your show rate, which is half of what it normally is. Just double up the number of opportunities and at bats and then you're still gonna you know Be successful with the people who show totally so and I think that's good any any last things here regarding the economy Where we're at from the advertising side things you can think that anybody whether they're doctors or dentists or sass or helping consumers with their Credit debt anything from the marketing side.

You're just like telling everybody outside of know their numbers like we've been talking about. Yeah. Yeah. 

Casey: I think right now, now is a time to really sharpen our pencils more so than they have been in the past, just because, you know, the writing is on the wall, especially when the federal reserve decides to adopt a ZERP again, you know, zero interest rate policy.

Like we're like, you know, also putting a bunch of, of liquidity back into the economy again. There's fear that we are going to go into a recession. So if the federal government is trying to Just know full well that, you know, there's only certain things that they can control and they're doing that right now, kind of not necessarily reactive, but also they're kind of hedge against the idea that we might be dealing with a recession.

It's always good to know your numbers anyways, and it's always good to have good solid. Sound business principles on a regular basis regardless But if you can honestly tell yourself that you don't have that right now Then it is really crucial now more than ever get ahead of it now before it becomes a huge problem worst case scenario You've got it built into your standard operating procedures and sops and you can focus on this and the next time that there is A downturn because guess what recessions do happen whether we like it or not all the time questions happen usually It's your cycles regardless.

So it's good to have a built in process. If you start building in strong foundational basic, you know, elements right now, worst case scenario, you put them in your SOPs. Best case scenario, you survive when your competition doesn't. And then it allows you to take more market share while your competitors are out in the dust because they didn't know the numbers.

So, you know, History books will always favor the victors. They never really talk about the defeated people as much. And this is one of those moments where it's important to realize that to be a victor in this situation and to take market share from your competitors that maybe don't have the same skill set as you when, when it comes to focusing on numbers.

It is the victory. The battle lines are drawn entirely around data and knowing your numbers. So that's the one thing you need more than anything else because you can't measure anything versus that if you don't have that. So focus on that, develop that now if you don't have it. If you do have it, make sure it's all working, you know, double check one more time.

Just make sure that all your processes are good, that you do know your numbers, that you know what you can afford to pay if you absolutely needed to in the worst case scenario, and really, really just Rehash all that information to make sure that you're on top of it. And then if things do get scary, make sure that you also start going face first into the storm and focusing as hard as you can on doing everything that you need to do to grow and survive in this niche.

Because that's where the opportunity is to take business from other customers who are not, or from other competitors, who are not as savvy as you are. That's where the opportunity is really made. And that's where fortunes are made too. 

Jason: Yeah. Well, I think that's awesome. Thank you Casey for that. And I will, I was going to say a shameless plug, but it's not even a shameless plug.

It's a necessary plug is that if you're listening to this, you're a business owner or manager, you don't know your numbers. You need to know them quickly. That's not your strong suit. Then hire guys like us, people like us, men and women in marketing, professional consultants. You know, like Casey, like myself, get help.

For example, I know I am not good at creative, at creating marketing, at ad work, copywriting, I can write, but not necessarily copywriting stuff. If I'm in a pinch or I know that's my weakness, I hire somebody to do that. If you're not good at the numbers, you don't know them. And this is a critical time.

Don't try to beat your head against that wall and learn your numbers. Like bring on somebody like Casey or myself and literally just. Accelerate that and just give people like us all the numbers and we'll tell you what they are, right? Like it's so important whether it's us or it's somebody else in the industry, but that's so important Casey Where can people find you where's the best place to get in contact with you and the stuff that you do out there in?

The world. Yeah. 

Casey: Yeah, so uh, you can always visit my website, which is uh, www. actionadad That's for advertising, uh, dot agency. So action ad dot agency. You can also find me on Facebook, which I am, uh, facebook. com forward slash action ads agency. Unfortunately action by someone. So how dare they, you can also find me at, uh, facebook.

com forward slash Casey Carol live C A S C Y C A R R O L L live. 

Jason: Perfect. Casey, thank you for being on and, uh, you know, giving some great advice to, uh, to people right now in these special times. I appreciate it. Totally appreciate it. All right. And, uh, for everyone here, if you didn't catch Casey's link, you can go to cutter consulting group.com slash podcast, find the episode, the full transcript of these conversations, plus all of his links will be on there. Plus more. And as always keep in mind that everything in life is sales. And people remember the experience you gave them. Thank you for listening to the sales experience podcast. Find show notes, more episodes, and join our email list by going to cutterconsultinggroup.com forward slash podcast.