More Ads Is NOT The Growth Hack

If you're looking for ways to grow your business without spending more on ads, in this video I'm going to break down several strategies that we've helped implement in businesses that have helped them scale from 3 million to 8 million, from 3 million to 6 million, even from just starting out into the million dollar mark. And these strategies are not just about running more ads. And we're going to talk about why ads alone are not going to be the thing that actually grows your business. The reason this video came up is because there's a common misconception that when companies are smaller that, oh, if I just spend more on ads like the big guys and I would be big like them. And also we had a meeting with a private equity company that bought a local service business and they said, well, let's just jack the ads up and then that's going to be solving all the problems because now they're going to have a bunch of leads, but they miss out on a lot of things. And in this video we're going to go through that. So my name is Phil Risher, Flash Consulting. We work with local businesses, help them increase their sales, keep their schedules full, we talk the language. I used to be a director of business development at a local service business and we scaled the business without running ads. And I'm going to share some of those strategies today. Perfect. So the first thing is why ads are actually the most expensive way to get new customers in your business. This is a LinkedIn post that I made, but really it's this person, John Tory, who he has a newsletter for H Vac, Plumbing, electrical and other trade types company and they pull 25 local service businesses and he runs these types of reports every single month so you can see what, what people are spending. And basically what he came out with was he said that the customer acquisition cost from organic to pay per click is Organic is $73 to acquire a new customer. Google local Service ADS is $94 to acquire a new customer and pay per click is $350 to acquire a new customer. Now in the private equity world and a lot of times with small business, when they think, oh well, these companies must have these huge massive budgets and if they're on TV and doing all this stuff, they probably have big budgets but they did not scale their business through ad spend in my opinion. And what we've seen is that that's actually the most expensive way to do this. And so we'll talk about some other strategies, but from a PPC perspective, let's say that you set your budget at $1,000. Well, in this scenario, what, you're going to get three new customers out of that. Not necessarily bad if the numbers line up. But if you were to focus on building a solid brand in organic and local SEO, and you're gonna be getting $73, the problem is that this is faster than this, but this is also can go up and down and go away at any given time. And you're just gonna keep jacking up more money and you're gonna be playing the game because Google's gonna spend your money. So I want to give you an example of why ads alone is not gonna scale your business. And this is actually from a book from Donald Miller about how to grow your small business. And we made a video about this before, but it plays perfectly into this, which is why I wanted to discuss it. So basically what he says is that there to grow your business, there's leadership, which is the cockpit of your plane. There's marketing, which is an engine. There's sales, which is an engine. There's cash flow, which is the fuel to keep the plane going. There's your overhead, which is all the stuff inside. And then there's products, which are your wings. So let's just take a carpet cleaning company, for example. Your products are you do carpet cleaning, maybe do area rug cleaning, or you do tile and grout cleaning. Your leadership is you, the business owner. And so this is a big component to if the plane's actually going to fly and not going to crash. And if it's on course, the marketing. Let's say that you're doing some type of marketing, whether that's pay per click, you're doing SEO, you're doing networking groups, whatever. Then your sales is another engine because you actually have to close the sales that happen. If you can't manage your cash flow, you're going to run out of fuel and you're going to crash. If you're overhead, you're too. If you have too many people on the plane, then, and you don't have enough space for them, well, then your plane's going to be weighted down. So you get how this works. So a perfect example of this is private equity company buys a local service business and they say, well, let's just jack up the ads and we're gonna leave the same pilot in place here. We're just gonna jack up the ads. Well, let's say that we took this engine out and we put a huge engine on it like this. And let's say that we took this sales out, and let's say we put on a huge thing like this. Let's just say that we did this. Well, what's gonna happen to this plane? It's gonna go really, really, really fast because there's a huge engine on both. Is the pilot going to be able to manage this? I don't know. If the pilot's not good, no. Let's say that we crank up this marketing engine and this is going to be the big one. You crank up this marketing engine, your sales lever stays the same. And let's say that this is even small to begin with. Well, then what happens? Now you have this huge engine over here. So what are you going to have? You're just going to fly in circles like this, right? And I'm going to show you what this means specifically for local service business. And this is where a lot of times they miss the mark. The private equity companies and even businesses, I think about how they're going to scale. So in this funnel here. We've talked about this a lot on the channel, but really what it comes to is this line of defense right here. This is the bottleneck and the breaking point. On this plane, you could jack up your ads and get so much visibility and get a ton of leads coming into your business. But what happens if you don't have the sales staff, the customer service representatives, to actually convert that into sales or appointments or estimates? What happens is you jack up all these ads and your CSR team gets overloaded and you miss out on tons and tons of opportunities. You miss phone calls, you miss leads, you don't follow up on leads. And this is the bottleneck. And then what happens? You bring on another csr, but you don't have training in place to train your CSRs. And so then you're stuck because this is the first line of defense to actually growing your business. A lot of companies, especially in the private equity world, they believe that, oh, well, you'll just jack up ads. You'll run into a landing page, they'll turn into a lead, and then they'll schedule an appointment and they'll go, that's great. It sounds nice in theory, but that's not typically how it works. If you have a company, a business that you have to give some type of a pricing to, especially in carpet cleaning, electrical contractors, anything that people are asking, like, well, how much does this cost? In the H Vac world, it's not as much because you have to send a technician out. And so it's really just your CSR is more of a person that's answering the phone and just like booking appointments. But in the world of people are asking, pricing and trying to get some information, it takes the finesse of your customer service representative to actually close the deals. So what are some solutions outside of just running ads to grow your business? Now we follow and we talk about on this channel a guy named Tommy Mello. He built a $200 million garage door company. And what does he believe in? He believes in organic SEO, building your Google business profile. He believes in going to networking groups and building your business to business relationships so that you can get referrals. He believes in getting solid reviews. So that way you're building your authority in the marketplace. If you have the most reviews in your market, what happens is when people are searching online, 97% of people are going to reviews first and they're trying to decide what company that they want to contact. Then they go to your website, then they call you. Even if they see an ad, they're going and reading your reviews. So if you can build a solid business from a review perspective, from a business to business relationships, where all the roads lead back to you, all the searches that are happening online are showing you, and then you could layer in ads as well. If you do it the other way around, all the ads are going to point to you. You're going to get stuck here. But more importantly, all the other stuff's not going to check off the boxes. So you're going to lose out on opportunities. And then the last piece, and this is what Tommy Mello talks about a lot, which I agree with, is managing these people with KPIs key performance indicators. So, like, how many leads did you get, how many jobs did you book? And then ultimately going through this process of where did that lead come from? And then your customer acquisition cost coming back. So if you don't have a process for converting your leads into actual estimates or you don't have a customer service representative, if you jack up your ads and you start spending a ton more, you're going to be wasting your money. But more importantly, you're either going to frustrate your CSR team or you're just going to lose out on business and it's not going to work the way that you want it to. So the takeaways from this video are make sure that you focus a lot on your CSR team. Make sure that you have the team in place. So that way when you do run more ads, you have the ability to convert them into estimates and sales. If you are thinking about running ads to grow your business, the secret and we work with a lot of companies that are seven figure eight figure local service businesses. The secret is building a solid SEO game plan so that all roads lead back to you. You are the big player in the market, you have the most reviews, you have the best reputation and then building business to business relationships with other people in the industry or other referral partners and doing the small things that take time but they snowball over time. The quick wins are running ads, which you can run ads, but this is the hardest way to grow your business and more importantly, it's not going to build a solid base for your business. So be sure to focus on all these things if you're looking to grow through ads or through SEO or you need help setting up some of these parameters. We partner with local services to implement this whole strategy in their business and to make recommendations based off where we see their business in the areas of opportunity. We actually do 30 minute calls. We do a whole marketing audit on your business. If that's something you're interested in, I'll put a link down below. If not, it's all good. Hit like and subscribe and we'll see you in the next video.