I Spent $7,500 to Acquire a $6,500 Customer

0:00We sell roofing in the metro Detroit market. >> Sweet. >> Um we're going to do about 3 million this year. We'd like to be at 10 million. >> Okay. >> Um quick context, we were primarily a storm contractor. >> Yeah. >> Storms have uh kind of vanished in our market, which was >> right? Let's get some global warming back here, you know? Climate change, whatever. >> Actually, the best thing that ever happened because it allowed me to step into retail.

0:26>> Okay. >> So over this last year, I've really had to like rebuild my business cuz right before that we had hit to uh 5 million 2 years in a row. >> Okay. >> And now we're seeing this drop off. So my biggest constraint or what's stopping me is that um for the last, you know, 8 years, all of our lead gen has been from >> Weather? >> from doors. >> Okay. >> So it's been 100% uh door-to-door lead gen and now when we're trying to knock for retail, it seems to be like like heavier of a weight on the team.

0:57>> When you say retail, what do you mean? >> So uh like just people in market that need a roof. >> So like residential? >> Residential. Residential, yeah. >> And when you were doing door knocking before, you were knocking on >> residential doors. >> Okay, so it was the weather that was different. >> funding from the insurance company. >> Got it. Word. Okay. Yeah. Okay, so keep going. >> So now um with me being a door-to-door guy, like purchasing leads and all that was like sacrilegious to me. So there's [snorts] some limiting beliefs there um that I started to you know, explore last October.

1:27We bought leads >> be lead curious. That's all I'm asking for. >> Yeah, I I I'm very lead curious now. >> [laughter] >> And uh but I basically got slaughtered learning this >> Yeah. Just don't be acquisitionary binary. You know what I mean? Be non-binary with your leads. Like as many as you want. >> Yes, yes. No, that's what I'm trying to do here. And when we did purchase leads and I was able to >> version, by the way. You go ahead. >> And when we started to, you know, stack the guys' calendars, there was a big culture shift.

1:56Um >> where we actually saw like more buying from the guys, but then like the door knocking just yeah, went way up. >> It was way easier. >> Yeah. >> But, um, like our CAC [clears throat] and all that was absolutely horrid, right? So, I'll spend like $7,500 just to acquire one customer over the summer. >> Okay. >> And it wasn't sustainable. So, I saw >> from a customer? >> Um, on average $6,500. >> So, that does not work. >> No. It doesn't work. >> Yeah.

2:22>> And it was just like a lot of the marketing agencies that we worked with were like younger people. They were like using AI tools, go high level, like >> Yeah, sure. >> So, we decided that we were going to build it in-house. >> Okay. >> So, with that being said, now it comes into you know, a leadership issue because I need somebody that like knows how to you know, market better than I do so that I can focus on training and >> Can I pause you real quick? >> Yes, please.

2:48>> Okay, cool. So, you're at three, you want to get to 10, you rebuilt it from storm chasing to just straight up door knocking, whatever, fine. I think that was a good idea. Um, you had a door knocking team, you took the same sales guys, brought them on leads that you got them, they got lazy, fat, and don't want to do door knocking anymore. >> Mhm. >> So, great rule number one, outbound and inbound are separate teams. >> Yes.

3:11>> Um, inbound is what you graduate to. And so, if you're an absolute savage, like you just take children's souls and just rip them out every day cuz you're a terrible person. Um, but you're you're just unbelievable at sales. Then and only then do you get the opportunity for me to feed you leads because these are the most expensive leads that we have to work very, very hard for to make sure and like we cannot waste them on anybody who cannot close everything.

3:38And so, thank you. I hope that was an amen. Um, and so >> [laughter] >> and so so, first off is the team should be separate, but you're in this mix now. You're in a little bit of a mess. And so, my my two cents would be like, take the cuz I'm sure their commissions have gone down since they now are selling nothing basically. >> Yes. >> Yeah. So, I would say, "Guys, my [ __ ] up. I went to this thing. He told me I did this big boo-boo, which is inbound and outbound were together, which is not how it should be. Everybody get back on the streets. You guys do that. And then, for the absolute savages of you, because you can usually have far fewer people on inbound, that becomes the Christmas tree of the career path.

4:12Because on inbound, I can feed you and you can do like five sales a day. You can't do that door knocking. Right? But I you can do it if I'm feeding you leads that are already qualified, already set, already gone through a VSL, whatever, um in the sales motion. And then those guys can absolutely clean up. But you get you earn the opportunity to get that level of commissions. Now, the commissions structure should also be different on inbound because you have to pay for those leads. So, it's a different role. They graduate to it.

4:38It's more volume, lower per, but it's more reliable, which guys with families, things like that, if you have a bad day, you close two, and a good day, you close seven, it's different than you have a bad day, you can close zero, zero, zero, right? It's much more uh it's much more stressful. And so, guys will be happy to even give up they'll even make the same money, but just have it be more reliable. They'll be make they'll and you don't have to be in the sun. So. >> So, then we should hire for inbound sales. >> Yeah, or take one of the guys you have who's really good at it um and put everybody else back on the street so that you just funnel everything to that guy who cuz then you can iterate faster cuz you're new on this. And so, you want to you never want to have too many news. Cuz kind of like the brick analogy I gave you at the beginning, the more news there are, the more likely something's going to [ __ ] up. Right? And so, it's like, "I know this is a absolute savage salesperson.

5:23If they're closable, he'll close them." Or she'll close them. And so, then the only variable we have is just what offer {slash} lead source am I getting, and like what process they're going from lead to talking to them. Those are the only variables you have to play with, and so you can control it's much easier to iterate on that, and then get it to go faster. >> Okay. Okay. And then, okay. So, then I want to hire a marketing director or leader to manage that. Now, Tim like was blowing our minds in the workshop like literally

5:53>> He does do that. Our Asian Clark Kent. >> Yeah, it was it was yeah. >> Racist today? >> [laughter] >> I I was almost going to say he was a ninja, but I I didn't want to He was in a Anyways. So, um what do you >> He's Chinese, I'll have you know. Uh >> [laughter] >> Samurai Samurai. Um >> You're good. Keep >> But, he was talking about when when another guy was talking about a constraint and he was talking about the trade-off of okay, so you you know, you could spend $6,000 a month. You don't want to spend, you know, basically a hundred grand to replace the person.

6:26What I'm trying to figure out is I think I've I've answered my own question. I won't keep going here. Um it's I've been working on the wrong problem, I think is what the situation is. And I'm trying to make sure >> this for you. Outbound team goes out, inbound team becomes the one guy. You need to hire a marketer person who actually knows what they're doing. Probably pay more than you expect, but then that person will be worth it. Your entire business is sales and marketing, so you should have the core elements of the business in house. >> Okay. >> Great. If you need help with the sales process, we can help you.

6:53>> Excellent. Thank you. >> If you're business owner and you are not growing as fast as you'd like, I'd like to give you a free gift. So, my team and I put together the 100 million dollar scaling road map, which is basically 200 hours of us looking over all the portfolio companies we've had and what stages of growth they went through and more importantly where they got stuck and how they got past it. And so, we broke it in these 10 stages and we made this little kind of quiz thing where if you put in your business information, it'll tell you where you're at and the most important part for you, what to do for each of functions of the business across product, marketing, sales, customer success, recruiting, IT, human resources, and finance. And so, no matter what you're struggling with, someone else has already struggled with it and solved it. And so, I'd like to give you this thing absolutely free. You can go to acquisition.com/roadmap, plug in your business information, and if you want us to actually help you deconstruct the business and you're trying to scale, up, love to help you out on the Thank You Page and book a call with my team and we will look at your business, see if we can help and if we can, we'll invite you out to Vegas and we'll do this in person live.