S: In this episode number 139, you’re going to learn how to scale your ecommerce business all the way up to eight figures. Our guest is Gary Nealon. He’s a serial entrepreneur who founded two multi-million dollar businesses—one of which landed on the Inc. 5000 list five consecutive years in a row. Gary knows how to scale ecommerce businesses. You’re going to learn all about his journey from bankruptcy all the to $40 million in revenue. Gary is also the author of Notes to a Young Entrepreneur. Gary, it’s great to have you on the show.
G: Awesome, thanks for having me.
S: Let’s talk about how you got to where you’re at now. You had some very successful exits, and you’ve written a book, and now you’re doing strategic marketing consulting. But how did you end up getting into a cabinet business of selling cabinets online? I’m really curious to hear that story.
G: Actually out of college, I went into logistics of all things. I end up working my way up to the VP of sales for a logistics company. We were helping companies get products into retail like Walmart and all the big chain stores and just seeing some of the inefficiencies in some of the companies like, “Man, I could probably do this for myself.” At the time, I had a good friend that I went to college with. It was then the internet marketing space when I was still young. He’s done some pretty impressive things. It spurred me to do my own thing. My first delve into entrepreneurship I actually bought a company. I liquidated everything I had, somehow found people that were willing to loan me some money, or give me some money towards it, and end up buying a business in a dollar store niche. It was supplying products to dollar stores which kind of fit with my logistics background. But then, about a year into it is when the economy really started tanking–everything was plastics, it was petroleum-based. When the cost of petroleum went through the roof, essentially all of our cost doubled. I ended up filing bankruptcy on that within the first year which is a pretty painful experience to go through for anybody. Cabinets certainly wasn’t a passion for me, it was my business partner at the time, his uncle was importing cabinets. My background was marketing information systems. I just want to get back into building websites and catching up on the coding side of it. I offered to build him a website and he wanted nothing to do with it. He was just like, “Dude, they’re not going to sell online. If you guys want to do it, I’ll support you and be your supplier. But as far as me actually needing any of that is not going to work.” Which is kind of just to prove him wrong. You could sell anything online–it’s the internet. We built a really crappy website to begin with and started running Craigslist ads, and sitting around the house just publishing them, and responding to them. Then we started doing some SEO, and writing content, and that’s how I got to where I was. I really didn’t know anything about cabinets. I was actually writing articles to learn about it. I’ve researched it and I figured, if I didn’t know about it, then probably the average homeowner didn’t know about it. I would just write content based off of things that I didn’t know the answers to and it worked.
S: Wow, so you basically proved your buddy wrong. Is he licking his wounds now seeing that you had a successful exit and get that company under the INC 500 list?
G: Actually, they’re still one of our vendors for the cabinet company. They’ve grown with us and I think he’s finally seen his ways that it can actually work especially since the way the industry’s exploded. It’s been an interesting ride the last 11 years–constantly innovating, and changing and doing different stuff.
S: Are you still involved with the cabinet business, or did you sell it, or what happened there?
G: I sold it but I am actually consulting. I’ve got a little bit of link left on the consulting agreement and then I’m obviously doing some mild stuff on the side.
S: Okay. You got on the INC 500 and the INC 5000 list for five consecutive years. How did you pull that off? What’s that list brought you being an honoree? I’m a little bit clear on that because the company that bought my company Covario was on the INC 5000 list several years in a row. I don’t know really what the benefits are. If you could walk us through what that’s done for you personally and for the business.
G: I’d say in terms of business growth, it wouldn’t get customers or anything out of it. It really just puts your business on the map and gives some recognition in the marketplace. From that, we had some partnerships come out of it. We got some interview opportunities and then it just really put us on the radar in home improvement niche especially I think this year would be our sixth year straight. Being able to do that six years in a row, it’s a hard accomplishment. To constantly keep growing at that rate is pretty difficult once you get to a certain dollar amount. That’s really what it does. Is just kind of gets eyeballs on you from either other people in the niche or people that want a partnership with you. For us, if we weren’t a service business or anything like that, we weren’t getting direct customers from it. It was more just brand recognition and name recognition for the company and myself.
S: What is the percentage growth that you have to achieve in order to qualify?
G: It changes every year. But to get on the list, we’ve been growing steadily about 40% a year. That number has kept us on the list but it’s getting harder and harder to do. Some of the guys that maybe on the first time on the list they might have 1000% growth for 2000% growth just because it’s their second year in business or third year in business. After 11 years, it gets really hard to keep growing out of 40% or 50% rate.
S: Yeah, I can imagine. What inspired you to apply for the INC 500 or 5000?
G: It was two things; one to just show the company and the employees that we were actually something pretty special because you get kind of bogged down from the day-to-day stuff. You don’t really compare yourself to other people, especially some of the staff because they’re just in on the grind. It’s really just getting that recognition and say, “Hey, we’re actually accomplishing something special here.” Then you start building those accolades and representations for when I started doing consulting and say, “Hey, over here, I have this business I grew, we’ve been on the list multiple times. We have this business over here, this one’s growing.” It’s really to kind of build up that resume up as well.
S: What inspired you to use craigslist as a primary marketing vehicle in those early days to buy cabinets online through craigslist.
G: That was when craigslist was still pretty widely used and it was an open source for the most part. At that time, I didn’t have much money. We had, I think at $5,000 left in the bank account when I built the website. I looked for any ways that we can basically get free traffic without having to spend a ton of money on it. Craigslist ads was the easiest way. We kind of fell into that, I should say. We’re testing it in Philadelphia and just started running some ads and we started to get some really good responses. We’re like, “Why don’t we just go nationwide with this?” A couple of my buddies would come over and we just post craigslist ads on weekends just to see what we can get. Started to get a decent flow of emails coming through and then also with the content. When I filed bankruptcy, I actually went back into working for another logistics company knowing that I want to build something on the side. When I was traveling in the hotel room, I would just in hotel rooms and I would just write content. Those were the two easiest and free ways that I can get traffic. It ended up ultimately working out, I guess.
S: Very cool. What was that other business that you set up in addition to the cabinet business?
G: That was the one that I bought. It was in the dollar store niche. I was buying products from overseas and then selling them to Mom & Pop dollar stores. It was an existing business. It was doing decent numbers but yeah, just bad economy, kind of tanked it.
S: Now you have a separate company for your strategic marketing consulting, correct?
G: Correct, yeah.
S: What inspired you to create that instead of just starting over again with building another online business? Why teach others and coach others to get the explosive growth that you got?
G: A couple of years ago, I actually hired a business coach, it was Todd. We’re in a point where our business was growing but it was kind of out of control. We didn’t have the staff in place and everything. We’re looking at, “What’s the skill sets? What are you really good at?” What I really figured out was, I was really good with strategic marketing and strategy side of it, but the implementation and everything was better left to somebody else. I really like tinkering with other people’s businesses or even mine, just getting in on the marketing side, laying out a really solid plan, putting them on a path to implementation, and then kind of walking away. Consulting and doing some of that stuff really allows me to do that and have insight in other people’s businesses. It’s really interesting to see one or two things that can pivot that really have an impact on business. That’s what gets me energized. It’s the perfect scenario–to be able to come into a business for a couple months, really help them out, scale them up, and then walk away.
S: Kind of like a turnaround guy.
G: Yeah, sort of.
S: Cool. Why Todd? I think the world of Todd, I just had him on my other podcast on the Optimized Geek. Listeners, I’m talking about Todd Herman. He’s the creator of The 90-Day Year where you can accomplish more in 90 days than you normally accomplish in a year through his methodology. What specifically drew you to working with Todd?
G: Todd and I actually knew each other for probably about two years before I actually hired him. It was kind of just us messaging and just seeing how he interacted with people, his personality. Obviously, I’m fairly sarcastic and so is he. That works out well for the two of us. Just his methodologies and the way that he went about implementing and offering advice. It was just the right timing, the right place, I knew that I needed somebody and just dove in with him on that aspect of it.
S: What was the biggest thing that you’ve gotten out of working with him? What would be a huge outcome that you wouldn’t have gotten otherwise?
G: I think what I really took away from him was how do down source, and really look at what you’re doing on a daily basis, and segment out things that you shouldn’t be doing and focus on the high level stuff. Once I was able to do that, that actually led me to step out of operations, essentially worked myself out of a job. I promoted one of the employees that had been with me the whole time to operations manager. Then I just stepped back and really focused on the marketing side of it. That’s when we really started scaling pretty aggressively.
S: He’s really good at focusing and getting people focused on one thing instead of trying to spread yourself across a whole bunch of different things–one goal I should say, one outcome. Awesome, let’s talk about content. I know you’re very passionate about content. You’ve got a whole set of methodologies around content creation, and planning, so let’s talk about that.
G: Sure. Looking back because one of the questions that people always ask is, “How did you scale? What did you use to scale?” When I look back—you can look at paid advertising and those kind of things—but the one underlying thing that’s always been there is our content creation. We’ve always steadily been creating content for 11 years which has kept us within the top of three or four for most of the keywords that we target. When I look at it, nobody else is really doing it the same way, and then especially now with the way that Facebook changed the algorithm, and paid traffic got more expensive, there’s less market space for it. You’re starting to see SEO and some of that organic ranking strategy come back. We’ve had this methodology that we’ve used for several years and we just figured, “Why don’t we try to spin this off into its own entity almost and offer it up for other influencers or people that are creating a lot of content.” It’s what we did. Essentially, what we do is we’ll take a piece of content whether it’s a blog post, or video, or whatever methodology you use right now to get your content out there, and then we repurpose into multiple formats. If it’s a blog post, we’ll turn it into a video, some JPEGs, PowerPoint, audio file, like seven different types of content that we create out of it—or media I should say—that we create out of it, and I will distribute that on different platforms. Whatever the media specific platforms are, there’s usually three or four that we use for each type of media It really does two things; it builds backlinks to your site which is great, it helps with the organic ranking for Google. But then also one of the things that we figured out was that not everybody absorbs content the same way. Some people like to read it, some people like to listen, watch it, whatever the case might be. By creating all these different types of media, it gives you the opportunity to get in front of more people that may not have seen you before because they don’t watch video, or they don’t like reading blog posts, or something like that. It’s really been an interesting way to get additional eyeballs on your content that you normally wouldn’t get.
S: And over what period of time? Let’s say that you create a piece of content, is it over a few week time period, you kind of blitz everywhere with the strategy, or is it a slow drip, sort of year long process for a piece of content to get in all these different formats and onto all these different platforms?
G: We usually turn around about a week. If I had a blog post today, we’ll probably have everything distributed within the next six or seven days, and that’s from creating all the different spin-offs and then also posting them. What I really like about it is that you see it continue to grow over time. It’s not like when you run an ad, you just run a Facebook post, you’ll see that initial burst of views and then it kind of disappears. You’ll see a steady increase—especially if the content is good—steady increase over the next couple of months. We have stuff that’s still generating eyeballs years later at this point. If you have a really good content, it’s not something that you just push out as much content as possible, but if you folks have really high quality content and push that out, you’ll see some really long lasting results from it.
S: How do you get the linkerati–people that are going to pass you lots of link equity, to notice these different content pieces because you can’t just stick it on your blog, and do a Facebook post, and imagine that all the linkerati are going to see it then, right? Do you have to do some outreach via email as well, or do you have any particular groups, or communities that you’ve built up, or that you go to, to let them know, “Hey Mr. or Ms. Cabinetry kind of guru. Can you cover this is a pretty cool infographic that we’ve created.” Or whatever.
G: I don’t do a whole lot of that. What we do and it goes back to how we create content. For us, we create content based off of three models; one, we look at what customers are asking when they either contact our customer service through either email, chat, or phone. We’ll look at forums to see, industry-specific forums, what kind of questions people are asking, and how can we help answer them. Then we’ll look at tag crowds and what words are being really used within the niche, popular words, Google words, those kind of things that we have posted. Based off of that then we create content. We already have an initial outlay for it, so in the forum, we just go back and answer it in there, and then that tends to get shared from there. I don’t do a whole lot of actual outreach to bloggers or anything like that, because it wasn’t really suited to our niche for that, but for certain niches, that obviously has a huge impact especially on service niches. That’s a strategy that you could obviously use. For us, we’ll ping it out through Pingler or Pingomatic once we do the blog post. Just by building up some of those links, if you do it properly, it will naturally rank higher within Google for one of the sub pages. One of the things that we look at when we’re doing content, we don’t really focus on keywords, we focus on intention. The difference would be, previously, a couple of years ago, you can just type in kitchen cabinets, or write an article that relates with kitchen cabinets as the keyword, and you can probably get ranked. Now, Google is looking more for the intention of it. It’s like, “What are the best kitchen cabinets in Philadelphia? How do you install kitchen cabinets here?” If you could answer the longer tail questions, you’re actually going to get ranked higher for those long tail keywords, and then that’ll help boost your actual main page. Those are the things that we focus on is answering questions versus just creating content around keywords.
S: Okay, cool. Are you familiar with Marcus Sheridan’s book, They Ask You Answer, or any of his work?
G: I know Marcus. I haven’t read his book or anything like that but I met him a couple of years ago at an event. It has been probably 27 years ago already. Yeah, almost the same methodology in terms of answering questions and doing that kind of stuff.
S: He’s got a great methodology. I’ve had him on the show and it was such a fabulous episode. I always refer to it when I’m talking to clients about building up a repository of FAQs, and addressing people’s objections preemptively before they voice them. You can address those on different web pages, such great stuff. Let’s talk about the process you come up with for planning a year’s worth of content or a quarter’s worth of content. Do you have an editorial calendar that you’ve created or how do you plan out a period of time?
G: I wish I could say it was more organized than it is but we don’t really look at a year out. Essentially, we’ll pull in, let’s say this week, we’ll look at any customer questions that came in from the previous month and see if there’s any theme around it. Because a lot of times, a single question is not going to give us enough for a sole blog content piece. We’ll pull questions together, sometimes create lists, or do different things like that, and then that’ll be our model for the next two weeks as we start creating. We’re always looking back at previous month and we’re building out two weeks ahead. Then we have somebody that just searches forums and different things or questions there revolve around our topic. We have a VA that actually does all that stuff. They pull in questions or topics that they’re finding on the forums, point them into our query, and then we’ll just start creating content from there.
S: Okay, so this VA, is this somebody like overseas, say in the Philippines
G: We have a full team in the Philippines that do different tasks for us but we have one that’s dedicated just for content kind of question curation.
S: Okay, can we talk a bit about that team and how you built that up, and why the Philippines and all that?
G: Yeah, absolutely. I’ve used VAs and different services from all over the world. In fact, depending on the level of sophistication or skill set that we need. We actually work with a couple of different VA companies, some US-based, some overseas. What I found for the Philippines is they’re really good at doing sort of the day-to-day tasks and the research. We use graphic designers down there. We have some people that manage the Amazon accounts. We do a little bit of Q&A down out of there just for chatbots and different things like that. We’re actually in the process of buying a VA a company, the VA Company that we’ve been using. I’m actually in the process of buying them to do all of our content distribution because we have a couple of people on the team to do that. I use them for anything I could break down into really easy tasks to do and then once we get put into a standard SOP that somebody could just follow, then we pass it off to somebody down there.
S: What is that SOP or standard operating procedure look like? Is it a checklist? Have you loaded it into a tool like Process Street? How does the VA experience that SOP?
G: What we do is we’ll actually map it out ahead of time for them. It’s literally step-by-step, log in here, here’s the password, here’s how you post, here are multiple examples. We use graphics and images within the actual SOP so that there’s no gray areas or nothing that could be misinterpreted. We actually have somebody on our team run through that, fresh eyes just to make sure we didn’t miss anything. Once we’re comfortable with the fact that it’s a very easy to follow process, then we pass it off to the VAs and get them to do a couple of test example so that we can verify that the process works.
S: Do you start with a video training and then you create a checklist out of it, or you just go straight to creating this checklist to process with the screenshots?
G: Yeah, just a checklist process with the screenshots, and then we’ll usually create a walkthrough video as well, just a screen capture just so they can visually see it on paper but then also have a video version of it as well.
S: Okay. Did you start hiring VAs through a service like onlinejobs.ph or did you start with using a headhunter recruiting firm down there?
G: I’ve tried everything. I started out with onlinejobs.ph. What I found was sort of hiring [00:23:07] that I just wasn’t giving a deep enough explanation for it. I started reaching out to couple of VA companies or essentially headhunters and kind of mimicked the process that they were doing. Once I figured out how they were managing it, and how they’re looking for people, it gave me a better idea of how to hire. I still use Upwork. I use the VA Company that we have. I use a high level of VA company that’s US-based people. It’s really about the process and mapping it out because if you can’t adequately describe the job you’re looking for, it’s going to be really hard to find the right people. I’ve gotten really clear on that message and making sure that how I’m just describing the job is clear enough for everybody that’s going to read that they’ll know whether they’re a good fit for it or not.
S: Some people are kind of, I don’t know, anti-VAs. They think they need somebody in the office next door, or in a cubicle a few feet away, and they need somebody in the office full time. What would you tell somebody who thinks that?
G: I would disagree. It depends on what you’re trying to outsource. Creative and things like that, I tend to keep that closer to me simply because I like to brainstorm on it. For us, especially for how big we got, we’ve managed to stay extremely small on our in-house staff. We kept customer service in-house simply because of the technical side of the product. It would be really hard to train somebody overseas that actually understand all the subtle nuances. If you have a more basic product that doesn’t require a lot of creativity or anything like that, that’s so easy to outsource these days. I think a lot of it comes down that people are just afraid to let go of control. Once you get over that hump, it becomes a lot easier to outsource. We actually look for–one of our main objectives is, “How do we automate or outsource something?” We look at even our mid-tier or management staff and look at things that they’re doing every day, and how do we take some of that off their plates so they could start doing higher level stuff and outsource a lot of the down tasks.
S: Yes, it’s so important. There’s this 3 Lists to Freedom exercise that Chris Ducker came up with, so that you can figure out what you can outsource or delegate at your job; things that you don’t like, things that you’re not good at, things that are best done by somebody else for whatever reason. It’s got those three lists, have you done that exercise yourself?
G: I haven’t. The one I do is the one that Todd kind of teaches by assigning a value to it. What would it cost of your time in order to do this, or how much would you pay if you actually do this yourself. When you start to put a dollar amount to it, you realize some of the things you’re doing that don’t really bring much value to the business, it becomes a lot easier to justify outsourcing it.
S: For sure. Is there some sort of secret weapon, a particular headhunter recruiting firm in the Philippines that you would recommend for folks who want to try this out but they’re just not seasoned enough to know how to navigate the world of onlinejobs.ph or anything like that—to get a good outcome they could just hire a recruiting firm to do all the heavy lifting for them?
G: There’s one in the Philippines that I really like which is sidekicks.co. The one that I use in the US for more mid-level management outsourcing is priorityva.com. Those are kind of my two go-to at this point.
S: Yeah, Priority VA, that is Trivinia Barber’s company. I just interviewed her for the Optimized Geek Podcast just recently. That was a great episode. I’ll put links in the show notes, by the way, listeners to all these different episodes on both shows that I’m referring to, and also the different resources like sidekicks.co you said, right?
S: Yeah, sounds good. All right, let’s move on back to the ecommerce world. I’m curious about Amazon. You have an Amazon presence. I mean you were talking about the VAs are doing some stuff on Amazon for you. How do you feel about Amazon because aren’t they the Black Widow spider—the female Black Widow that eats the male after she’s done with them—and you’re the male?
G: I have a love-hate relationship with Amazon. I think it really comes down to how you use them. What we’ve done is leverage them for what they’re good at which is getting eyeballs on things. Our niche was unique in that we couldn’t really sell kitchen cabinets on there because of the complexity of the buying process, and Amazon frankly, has figured out that they don’t want to touch it either. What we did was we would sell other products to get them into our buying cycle. Our two really big strategies that we’ve used in the last couple of years was; one, working with vendors that could dropship, do all that stuff that their was more popular items, high-converting items, and they would give them into our buying cycle just to get them used to dealing with us, because especially kitchen cabinets, it was a large purchase so there had to be a comfort level and a trust level there. What we started using as well for some of the clients that I’ve been working with is—the best strategy that I found especially if you have a brand, this kind of applies when you truly have a brand, a recognized name—use them for some of your products but don’t put all of them on there. Have some of them either on back order or just not even listed on there, so that when somebody is familiar with your product and they come to Amazon to buy it, they might see several of your skews but not all of them, so it still brings them back to your website. We been able to do that, leverage their advertising skills, and get a ton of traffic out of Amazon simply because maybe our best selling converting skews, or some of the features or colors are not available on Amazon so they have to come back to us for it. The other thing that we do too with Amazon is, we might have signal skews on there, but we’ll do bundled packages on the website. Somebody that may go on Amazon and buy it, really like the product, but they want to have some sort of value add or bundled package, they then come to the website. If you use Amazon for what they’re good for—which is obviously getting a ton of eyeballs—I think there’s a symbiotic relationship there that you can work out. If you put all your eggs in Amazon’s basket, eventually they will eat you alive–like you said. They’re watching stats, and conversion rates, and how many products are selling, and they just keep moving into more and more niches where they know that there’s a ton of traffic, and there’s ton of sales on their website that they can create their own products.
S: Right, the next thing you know, there’s going to be an Amazon basics cabinetry line and they’re going to send everybody to them instead of to you. That’s going to suck.
G: Yeah, that is one niche that they haven’t cracked the code on simply because of the number of pieces they have to combine, it has to be very specific. I think cabinets will be safe but just in any niche in general I think, if you’re smart about it and you leverage them for what they’re good for versus just relying on them for all your traffic. I almost cringe when I see some people I know that have decent sized businesses but they’re all dependent on Amazon. All Amazon has to do is changing the terms of services and you could be screwed, your whole business can go away. I always preach diversify traffic flow as much as possible and use that, use all any of these platforms for what they’re really good at.
S: How diverse is your traffic flow? What percentage is coming from Amazon, what percentage of sales, if you’re allowed to share any kind of ballpark around that.
G: Amazon is not huge for us, I’d say max maybe 4% or 5% but we don’t have any single traffic source that’s more than I think 18% of our traffic. We’re very diverse that way. Facebook, as their terms of services keep changing and algorithm keeps changing, if we were to lose Facebook completely tomorrow it would hurt but would only be about 15% of our business instead of 50% or 60%. I made a really big push about six years ago to make sure that we diversified our traffic flow as much as possible, and start leveraging all these kind of ancillary sites that may not have a ton of traffic but they might give you a couple orders per day just to make sure that we’re getting traffic from other places.
S: Yeah, 15% from Facebook is pretty good. Is that all from paid ads or is some of that organic?
G: It’s mostly paid ads but we’ve also leveraged Facebook in some unique ways. It’s interesting, the cabinet business has been challenging because it’s not a common everyday product, it does not have the same buying cycle, it’s got a very long buying cycle actually. We’ve been using Facebook in some creative ways by creating some groups around the hobbies or the habits of our potential buyers. Some of that is organic but most of the traffic that we get from Facebook right now is still paid.
S: What would be an example of a Facebook group that you’ve built around hobbies of prospective buyers.
G: We really dove into the avatar of our customers and figured out that we actually have about five different customers—which really changes your marketing and sales strategies as well—all the sales copy you use, where your target them, and all that good stuff. The one which is a big chunk of our business is the average homeowner. We started looking at what their hobbies are we figured out for the female houses, cooking, baking, gardening, those kind of ancillary products. Then for the guy, it was golfing, barbecuing, cars. We’ve got eight or nine different Facebook groups around those hobbies. Some of them built up substantially that way. I think we have access close to 2 million followers across all of them. What that does is kind of insulates our company because they’re not branded, they don’t have any of our logos or anything on them. What we’re doing is just really building a community just talking about that. We don’t push any sales ads, or anything in their face, but when we have a sale or we have something creative, we’ll run it to them as retargeting ads and then the best example is probably the cooking blog. What we’ll do is we’ll take the top 10 to 15 recipes per month, put a note on PDF, and actually pull them off of Facebook, so that we get them on our email list. Now when you take that email list, we could use it on essentially any platform, Instagram, Twitter, you name it, you can create custom audiences. It allows us to have a greater exposure to people that don’t actually know that we’re selling to them because they’re seeing our ads, and it also prevents our competition from really following what we’re doing. From the beginning, within a month of us creating ads, our competition was copying them, we’ve had people copy our site verbatim. You’ll get that once you started hitting the higher numbers on organic ranking. We just have to come up with creative ways that they couldn’t keep copying us, so that we don’t have to keep going through this cycle. That was one of them, like I said, we have access to somewhere around 2 million people that we can target on any given sale day, or just to take them into our mailing list.
S: Wow, that’s impressive. This unbranded Facebook groups, are these ones that you have to invest quite a lot of time to keep the community active and engaged, or is it just kind of on autopilot, the community takes care of themselves?
G: I outsource most of it. I’ve got the a team, they’re actually US-based, they manage all the pages. They do all the posting, they do all the communication. We’re averaging, I think, 12 posts per today, somewhere around there.
S: I had some internet latency issues. I lost a lot of what you said in the last 20 seconds, so if you could just kind of restate all those numbers around.
G: For most of the pages we post I think four times per day. The cooking page we may be as high as six. We actually have an outside agency that manages all the different pages that we have. They do all the posting, they do all the communication, and they’re responsible for growing the pages as well. It’s been a great relationship there that we have, and they’re US-based actually. They understand more of the nuances of the language, and communication, and everything.
S: The four to maybe six posts a day, are those all from the team that manages these groups or is the community also posting?
G: No. For the most part, it’s from the team and managing it. We’ll also direct some content over to them. We have partnerships, or if we work with particular groups that want to do paid post or something like that, we’ll push over some content to them as well. But for the most part, they’re actually coming up with a content based off of a strategy that we’ve had. I’ll give them guidelines in terms of what types of content to push, what mix of images versus videos, and all that stuff, and then they’ll go and they’ll seek it out.
S: This kind of inoculates you from competitors because the competitors can’t go on these groups and just start posting their own stuff and for it to go through.
G: Exactly. The other advantage too is that instead of Facebook seeing that as cold traffic because they fall under our advertising campaigns, they see them as customers that are already in our system. When we run ads, we’re not running cold traffic ads, we’re actually running retargeting ads which is a huge difference in cost. Our average cost per acquisition always hovered around $80 to probably about $120. When we started doing this, it would get down to as low as $16-$30. Significant difference in cost per acquisition for a new customer by using these kind of groups. The more we can grow, the cheaper conversion rates that we’re having.
S: That’s great. Most folks I’d say would think of retargeting more like, “Okay, somebody’s been to my website, or they’ve watched a percentage of my video on Facebook, and so I can retarget them.” What you’re doing is you’re retargeting people who are in a group that you own.
G: Yeah, we’re retargeting or we’re putting them on custom audiences but Facebook is seeing them as somebody that we already have a relationship with.
S: Awesome. Let’s talk about chatbots. Facebook Messenger is supposedly this great way to communicate with customers, and prospects, and bypass the email inbox, and all the noise that floods their inbox. Has it been such a panacea for you guys or not?
G: I’ll be honest, we haven’t fully cracked the code on it. I wouldn’t say that we’re losing money on it but we’re probably breaking even on some of the stuff we’re doing. Most of what we’re doing with chatbots is trying to get them engaged with an actual live person. We’ll try to get them engaged with one of our kitchen designers in-house. I have a funny feeling that there’s going to be a crackdown on them as well–pretty soon with all the things that Facebook’s dealing with at this point because there’s some people that are doing it really poorly, and there’s others that are doing it really well. I’ll be curious to see how it all pans out. What most people are doing is they’re hedging the baton, just assuming that the bigger they can grow their chatbot audience, the better it’s going to be down the road. Kind of like custom audiences and everything right now. For us, we haven’t really cracked the code on it to make it super profitable where we can scale it.
S: Got it, okay. One thought I had about Facebook Messenger in building up a whole follower base or communication base there is that it could be like Snapchat, where you’re building up this huge base and then it doesn’t really go anywhere, it starts to become less popular, or like you said there might be a crackdown from Facebook on commercial uses of it. What are your thoughts about that?
G: Eventually, once people figure out—I think they already have—like for the higher level marketers. Once it gets down to the everyday business where they’re starting to use chatbots, it’s going to be so saturated that it’s not going to have the effect. Right now the advantage is that that message that pops up on your phone or your PC, it’s something different that you don’t get every single day. I think for now, there’s companies that could make it profitable. Some of the ones that I’ve seen that are doing a really good job with it are doing it more from the contest standpoint. A 30-day challenge or something like that is an easy way to communicate with people and get eyeballs on it instead of it just falling in the spam box. The one that I saw that was doing a really good job, they’re getting a good chunk of sales from it every time they did that the 30-day challenge. Those kind of opportunities I think work really well but if you’re just constantly spamming people, like if you’ve got a physical product, and all you’re doing is just sending them random chats to see if you can get them back engaged–I don’t think it’s going to work. I think there needs to be some sort of cohesive theme around the whole thing before you can actually start using chatbots.
S: What do you think about this 30-day challenges? Is this something that you’ve started to incorporate into the cabinets business? Where is this heading?
G: We don’t use 30-day challenges but we do use contests. It was one of the fastest ways that we grew the cooking page, or the cooking blog, I should say. We spun off the cooking blog from the actual cooking Facebook group. We used contests to drive eyeballs. Essentially, what we would do is we would get a vendor or somebody to supply free samples and also offer a prize for the contest, get a bunch of chefs involved. I think the last one we did, we had almost 30-some chefs creating custom recipes using the ingredients, and then they were sending their traffic back to our site to get votes and everything. I think if you do these things properly whether it’s a contest, or a 30-day challenge, or whatever, I think they get a lot of momentum and they also get a really good engagement from the community. I don’t think those are going away any time soon. They don’t apply to every single business, we couldn’t use it for the cabinets, but we were able to use it for cooking page.
S: I think it’s important that you understand who the target audience is that you’re attracting with a 30-day challenge, or 5-day, or a 7-day challenge. I have a 5-day SEO challenge and in retrospect, even though it’s this huge value added resource for people, they learn a lot about SEO. Is that really the target audience that I want? Because people who want to learn SEO themselves rather than to hire that out, like hire a top SEO consultants such as myself, they’re not really the same audience. So I’m getting great people going through the program doing the 5-day challenge and getting a lot out of it, and they’re hungry for more, they want to learn more, and they don’t want to hire a consultant such as myself, they want an online course–which is fine. I do have some online courses but the ascension model for this doesn’t lead all the way up to them using me in a done-for-you sort of capacity.
G: I think that really does come down to understanding, like you said, the avatar of that customer. What are they getting out of that challenge? Would this five days be enough for an SEO challenge for them to see results and then actually want to pursue that further? That’s one of the toughest things with some of those 30-day challenges that you lose, especially a weight loss program or something like that, you’ll lose momentum, because people, they won’t do it for a day or two and then they don’t want to get back involved because they feel guilty or whatever the case may be. Really understanding that and how long is enough retention to get somebody to want to move forward on something like that.
S: Have you used a particular technology platform for doing contests, like there’s Rafflecopter and all that, or you’re just doing a homegrown kind of solution?
G: Our policy has always been to try to create as much internally as we can. For most of the contest, we actually do it on our own. We spun off a software company a couple of years ago as we created our own CRM, shopping cart solution, and all that stuff. Anytime we have a new idea, it’s pretty much, “Let’s create this from scratch the way we want it.” Instead of trying to fit a bunch of different pieces together at this point.
S: Wow. You’ve got your own shopping cart solution.
G: Yeah, cabinets are a unique piece because it’s big and bulky. It’s got to be shipped by LTL carriers. In a lot of cases our products was coming from multiple locations and there was just no true solution that worked for us. We started probably about eight years ago, working on our own shopping cart solution, and it’s really turned into this really robust kind of amalgamation of ideas from all of us that works really well for big and bulky products–is a way I would describe that.
S: Have you thought about offering that shopping cart to other companies or is that only for your company?
G: We have. In fact, we’ve been in discussions with a couple of the other cabinet companies and even some furniture companies of, “Would this fit for them? How would it work?” That’s something that we’re pursuing, we actually spun it off in trademarked it and did all that stuff with it. It’s moving down that path, we just haven’t had a full blown head of steam into trying to sell it to other people.
S: Cool, what’s the name of it?
G: It’s called Streamline CRM.
S: It’s kind of like a whole CRM just like Infusionsoft plus the shopping cart all bundled together.
G: Yeah. Our version of a CRM. It’s got all the customer information, acquisition channels, all that stuff built into it. Our phone systems are tied into our chat systems, all that stuff. The shopping cart solution is more for managing all of the different aspects of our business in terms of how the product is shipped and all that stuff.
S: Actually, my previous company, I was running an agency called the Netconcepts. We developed our own shopping cart as well, and we had, I don’t know, by the end of it, probably hundreds of companies running on it. It was called Gravity Market, and we sold that shopping cart technology to another company, and then the rest of our company got acquired a year or two later.
S: Let’s talk about your book, Notes to a Young Entrepreneur, what inspired you to write a book?
G: Actually again, it comes down to almost the challenge. I’ve been, over the last three or four years, I’ve been going into high schools and just speaking about entrepreneurship, just as a way to offer some knowledge back to the kids. Growing up, I didn’t have any real mentors or anything like that that had businesses. I didn’t really know anything about it until I delved into this world. I’ve been speaking in high schools and just kind of telling my story and sharing it, just watching light bulbs go off like, “I can actually do this myself, too.” I figured there was a story there that should probably be shared. I just wrote the book—I don’t want to say to give back, I hate the term give back—I wrote the book for young entrepreneurs that either have an idea or didn’t even think they can do something like that. It’s really just my story, how I got to where I’m at, a bunch of resources in terms of like if you have an idea, where would you go, how would you get some information, who can you reach out to, and put it all together and bundled it up. It’s an awesome book for somebody that’s in that young age that is either super ambitious and wants to use that energy for something, or has an idea but really doesn’t even know what to do with it at this point.
S: What age group would the book be targeted to?
G: It’s probably meant for high school and maybe early college. I do talk about how to leverage college–to get the most out of it instead of just going for a generic courses and all that kind of stuff. It’s within that age range, I would say a freshman. What’s been interesting at the conferences that we go to, a lot of them have been starting to bring in these young entrepreneurs, like high school kids that have full grown businesses. I’m always blown away by where they’re at in life. The common theme has always been that there’s somebody in their family that guided them because they already had a business or they had that sort of knowledge base. It would be awesome if we can influence more young kids to get into this entrepreneurship world that may not have those kind of resources available.
S: I’d say that’s such a critical piece because the kinds of resources that you have at a school are pretty lame. Like junior achievement, I did that when I was in high school, and it was incredibly lame. I didn’t get any real world value out of it. I saw a friend of mine who is roughly the same age as me started a lawn sprinkler business. He actually talked me into working for him over the summer. I’m like, “Wow, how do I get my own business?” He bought a brand new Ford Mustang when he turned 16. I’m like, “Wow, I want that,” and I didn’t feel like I had any resources to learn from. He didn’t want to teach me really because he wanted to employ me instead. I eventually figured it out on my own but it was a lot longer. I actually had to go through university and then it was when I was studying for a PhD that I realized that I can just figure this out, I’ll drop out and I did. But boy what a great resource to have had, as a teenager, to get a blueprint like that.
G: It’s awesome to see some of these kids eyes light up when you’re sharing stories like that. Hopefully, it’s a great resource for some these kids.
S: You go speak at schools, or you speak at conferences, how do you get the message out?
G: I do both. I try to speak at a couple of schools per year. Actually, go through junior achievements and another organization anytime that they’re having some sort of events, they’ll reach out to me to go speak. I’ve gone through conferences. I’m in a couple of different networking groups that shared the message about it as well. Just getting out just through word-of-mouth, nothing crazy. It wasn’t meant to be a revenue stream or anything like that. We actually took all the proceeds from the book sales actually go to B1G1. We essentially donate, I think for every book, we can offer two literacy trainings for young women in third world countries. We’re essentially passing it on to somebody else as well. Hopefully helping out a high school kid here but then also giving literacy training to somebody overseas.
S: That’s great, you said it B1G1, what is that?
G: It’s b1g1.org, it’s a donation platform, or a charity platform where they’re charities that eliminate the overhead and the management side of it. Instead of—nothing against Red Cross or anything like that—but they have a huge management structure and all that stuff. The percentage of your donations that actually go towards the charity are slimmed down, these are like really lean, running small charities where 97% of the donation actually goes directly to the people that they’re trying to help.
S: Very nice, that’s awesome. Have you been on any nonprofit boards, or anything, or you got inspired to help folks in third world countries, or you just saw something on TV?
G: No. I’d say the last three or fours years we’ve taken at least one trip to somewhere as a charitable donation. We went to Haiti, we’ve gone to South Africa twice, and just getting to see some of the poverty levels and everything that they’re dealing with. We really want to find a way that we can incorporate charity into the businesses. Obviously, it’s a little bit harder with cabinets because it didn’t have a real close connection. But now that we’re kind of doing this stuff on the side with the education side of it, it makes a lot easier to be able to offer educational give backs and stuff like that.
S: Very nice. Is there one last nugget of wisdom you want to share with our listeners so that they have something to take away to implement, let’s say, next week?
G: I would say it revolves around probably managing your day-to-day tasks. That was probably the biggest light bulb that went off in my head. I can’t express how important it is to start down sourcing some of the task that you do. Once you can free up your time to focus on those super high-dollar revenue streams or whatever it is, or partnerships opportunities, you’re going to see your business scale exponentially. If you haven’t done it yet, really sit down, and just kind of hammer through what you’re doing on a daily basis and figure out what you can take off your plate and then focus on those big level stuff.
S: What percentage should somebody aim for as far as taking off of their plate, what, like 20% or 50%?
G: Well, I always [inaudible [00:54:34] are filled in with other things to do. But really, when I’ve looked at everything that I was doing, I assigned a dollar amount to it, I would say almost 60% of what I was doing was low level tasks. Something that you could hire somebody for $10-$100 a deal and that’s in a massive company. Once I took that 60% off my plate, it freed me up to do all these really high level strategy stuff. It’s really going to come down to what you’re actually doing on a daily basis because some people are really good at that already, in terms of managing their time and efforts, and then there’s other people like me that just was not very good at it.
S: When you say $100 you’re talking about $100 an hour?
G: Yeah. I assigned it to, “What if I was to hire somebody to do this, what would that cost me per hour?” It’s pretty eye opening when you start looking at, “Holy, moly. I’m doing some things that are entry level tasks here that I shouldn’t be doing.”
S: Yeah, $10 an hour tasks.
S: Well, thank you so much, Gary. This was very enlightening. Thanks for sharing your journey, and all the insights that you’ve gained, and all the nuances, and great strategies, and tactics. If somebody wanted to work with you in a strategic marketing consulting capacity, how would they find you?
G: They can just go to garynealon.com. It’s a website that we threw together for both speaking and for the strategy engagement and everything else. It will give you some my background and some of the stuff that we’re working on. My blog, I try to update it two to three times a week with just really good content as well.
S: I’m curious, is that stuff that you’ve written or did you have your team go straight up for you?
G: No, most of it I wrote. I do have somebody that fills in some of the research side of it and like the filler stuff, but I’ll come up with the main concept, put together an outline, and then they go and run and fill in the gaps for me.
S: All right. Well thank you, Gary. Listeners, if you are interested in working with Gary, it’s garynealon.com. I do encourage you to go to marketingspeak.com for the checklist of action items from this episode, the transcript, the show notes, all the links to different resources that we referred to throughout the episode, it’s all there at marketingspeak.com. This is your host, Stephan Spencer, we’ll catch you on the next episode of Marketing Speak.