Diese Preisfehler machen Agenturen ständig

0:00We sell performance marketing and demand generation services. I told her about the visual thing. We got to do the visual thing. >> Yeah. >> Predominantly to health care and med tech companies. Although we have a lot of other industries in our under our uh our portfolio. We're based in Canada. We service North America. I'm here with Jean-François who's my VP of demand generation. >> Jean-François. >> Mais bien sûr.

0:24>> And so we do $2 million per year in revenue. We'd like to be at $10 million. And what's stopping me is I think my own ability to take the gamble on trusting other people with sales and and marketing. Like we're a marketing company and we do a great job at helping our clients.

0:46But I'm a bit shy about having the courage to make the investments that I know I need to. In that side of it. And you can kind of tell my voice is a bit raspy cuz I'm a bit embarrassed. >> Talk me through it. >> You know? So >> $2 million bucks a year. You're in the top 5% of business owners, man. >> Thank you. So like >> This room is always weird for everybody because I one of the big piece of feedback I get is like I'm really cool in my hometown. And then I came here and I met like five people doing more every month than I do every year. And then you're like, "Oh, okay. There's levels.

1:18It's fine." But that's the point of being here, right? >> Yeah, exactly. >> Okay. So performance marketing. So how are you getting customers right now? >> So mostly my efforts are through events. So we'll go to different events locally and we go to different conferences. And then I post videos on LinkedIn. Which do pretty well as well. So we've >> So what percentage comes from each? >> Pardon me? >> What percentage like of customers How many customers do you have right now? >> Like 40. >> Okay. Are you doing with SMBs?

1:43>> No, most of them are like mid-size. >> You're probably mispriced. >> That's what Ed said, I think. >> Yeah. >> Yeah. >> Yeah. >> So we I mean our retainers $3,500 to to $10,000 a month. >> All right. >> So yeah, you're right there. Okay. >> Yeah, you're probably mispriced. But, um what's your churn? >> Uh it was a few years ago quite high. We would churn quite a lot of clients over 3 months, but with the help of Jean-François

2:10>> Who's Jean-François? >> [laughter] >> We our our churn is probably more like 10 10 20 10 to 20%. >> Per? >> Uh per year. >> Oh, per year. Okay, yeah. Um so, it seems like you've moved up an avatar, I'm guessing. >> Yes. >> move You just didn't match it with price. That's all. >> Correct. We've gone up market. >> Yeah. >> But and >> Just forgot to change your price. >> Yeah, and I think part of it is >> margin? >> Uh 25% >> That's all.

2:36So, why can't we do more? I'm afraid. Why am I afraid? Because I don't make enough money per customer. Why don't I not make enough money per customer? Is it because there's something structurally wrong? Do I sell the wrong avatar? No, you just simply forgot to change the price. If you're probably appropriately priced, you're probably closer to like six-ish a month >> Okay. >> is my guess on average average revenue per user. And if you were to do that, you would be at like 50%, you know, plus margins. If you had 50% plus margins, you'd be like, "Dude, I don't mind spending 250 grand to get another baller in here or spending more on ads or whatever." It's just that right now, when you're running 20% on 200, it's $400,000 a year. Does that include owner pay or no?

3:13>> Um so, like the SDE would be like more like 600 to 700. >> Yeah, yeah. >> So, I think yeah, you just You just need to You're just mispriced. So, we got to change the price and then um and then we need to hire to to then do more. >> Yeah, so how will I know that um because as as I assume as I go more up market and price it higher, there's going to be a little bit more of a the conversion rate will go lower. >> No.

3:39You're probably losing people who are legit because you're too cheap. >> Interesting. >> You're bordering on so cheap for a mid-market company that they don't believe that you're legit enough. >> Yeah. You know, we closed 15K a month the other the other day and it the other month and they weren't even batting an eye actually. >> Yeah, which means you undercharged. >> [laughter] >> No, but like and I like good. >> Yeah. >> Um Yeah, price it's interesting. There's a couple like big limiting beliefs like price is a huge one because it's like this emotional thing. Same thing with ad spend weirdly. Like people are like I can't go past a thousand dollars a day.

4:11Like I just it just doesn't work. It's like I mean >> I think when you grow up like pretty modest like below average like you know, pretty poorish. You know what I mean? Suburban poor but right? You know, you kind of you're at a level where oh, two million dollars. Like I don't know to your point other people that make that >> Yeah. >> outside of the room, you know, so maybe I am kind of stuck in the people won't be willing to pay that because it's a lot of quote unquote money. >> Do you have big Do you have friends who are business owners who make more than you? >> I do now.

4:38>> Okay. >> [laughter] >> Yeah, this is like like you're selling out of your own wallet. It's just a classic like it's just you're just selling out of your own wallet. It's kind of like a mechanic being like I would never pay anyone to change my change my oil. It's like yeah, cuz you know how to change oil. But if your car's and you don't know how to change oil, you'd pay a lot. >> Yeah. >> [laughter] >> Right? And so if you know, if if a business needs leads and you guys are obviously good at it cuz your turn's low.

5:03>> Right. >> Like why can't we do more? We need to increase cash flow and increase how much customers are worth. Great. What's your close rate right now? >> Uh pretty high. 60 70%. >> So, do you know my pricing guide for for close rates? Have you seen that? >> I will download it after we talk. >> I'll tell you right now. >> Okay. >> You don't even have to. Uh so, for everybody if you're at for me like my my my you're at the right price is 35% close rate.

5:28>> Mhm. >> Um if you're between like 40 and 50, you probably have like a 25 to 50% price increase. >> Sure. >> If you're between 50 and 60, it's closer to like you know, a one and a half to 1.75. If you're at like 60 to 70, you've got at least a double >> Okay. >> uh in pricing. If you're at 60 to Did I say 60 to 70 already? Um if you're like 70 to 80, you probably have like a double or a triple in price. That's that's kind of like sitting there. So, I think the the six-ish a month is probably a good first bet.

5:58And do you have some sort of way that they scale up if they >> Yeah. Yeah. So, more services, more like enhanced services. >> is there anything that's tied to like revenue or ad spend? >> No, so it it is flat. It is typically been a flat fee, but you know, we've done some performance stuff or I try to not scale with the ad spend. We've tried to because we want the client to like realize the gains of investing in us. >> Yeah. Well, what you can do is something that I find works really well is you can scale with the ad spend, but you have decreasing with each tier.

6:29>> Oh, yeah. Yeah, we're doing that. >> Yeah, and so what happens is you'll quote you basically it's it's because of survivorship bias. Everyone wants to look at the top most expensive one and you can make that one tiny. And then people are like, "Oh, I just want to get to there. It's almost free." >> Right. >> But you don't make it retroactive. >> So >> you have four I'll call it four water marks at, you know, 10,000 a month, 50,000 a month, 100 whatever, right? And then like the first, you know, it's it's $6,000 for the for no matter what you do. And then above 20,000 to 100,000 it's an extra whatever 5% and then from you know, 100,000 to 200,000 it's an extra two and a half.

7:04>> Right. >> Right, but that that two and a half is only charged there. So, it doesn't retroactively go down. So, it just adds on top. >> Right. >> But it's all incremental margin for you cuz it's just clicking buttons. >> And what about like below 20K? >> No, that's it's or >> Oh. >> Right? So, it's the greater of. So, like $6,000 no matter what. And I would say that this is a requisite for being a customer, which I'm sure you already have some like you got to spend at least 20 grand a month or something like that on ads. >> Yeah, for sure. >> Right. So, it's like it's six for the first 20 no matter what because it costs us a lot to get you set up and then after that it's this.

7:32>> Right. Okay. Um I'm going to pass it on to the next person, but I want to thank you for having us here. Um it's a great workshop and uh we appreciate the uh in >> Don't be embarrassed about winning, man. >> Okay. Thanks. I got to learn to say no more. >> [laughter] >> That's fair. >> Thanks. >> If you are a business owner and you are not growing as fast as you like, I'd like to give you a free gift. So, my team and I put together the $100 million scaling roadmap, 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 into 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, we'd love to help you out. On the thank you page, you can just book a call with my team and we will look at the business, see if we can help, and if we can, we'll fly you out to Vegas and we'll do this in person, live.