Author Archives: Marcus Neo
Author Archives: Marcus Neo
It’s not difficult to see the parallels between dating success and business success. In both areas, you’re required to be going through a certain amount of pain and rejections.
In my last article, I wrote about self-esteem and the basis of success. I’ll like to expand more into it. I currently run a dating consulting business and manage a couple of client acquisition for certain companies and individuals.
Ultimately, I learn that people are willing to engage you not only for the results you can deliver but the trust and integrity in that relationship.
This is an advantage that I feel I have over many others. I may not be the best marketer or copywriter out there. However, I have always attempted to uphold a high level of ethics and values in my work.
In short, I get shit done, on time, and I attempt my best to serve every single client.
Couple of months ago, I wasn’t running a marketing company at all, yet a couple of individuals have chosen to engage my services.
I didn’t really come up with any fancy marketing plans, however, I made sure that I gave my best advice, and executed upon their campaigns as if I had shareholdership and skin in their game in their outfit.
Some times, this can include blunt truths (that people aren’t used to hearing). I remembered telling a company that their KPIs for performance shouldn’t be only email subscribers, but net revenue and profit.
Of course, attempting to be a great service provider is only half the battle won. It always almost takes two hands to clap. I learned the difference between great clients and poor clients. Great clients are similar to great colleagues to work with. They trust you (upon earned trust) and let you run the show. They don’t micromanage.
This merely reinforces my conviction that a great team, is always better than working with talented people.
I never enjoyed working with people who showed up late, paid up late despite their talents. I don’t buy talent, but I buy a great attitude. Execution is always a thousand times worth more than ideas, and it’ll always be.
This is similar for dating and relationships. People are looking for ingenuity, authenticity and sincerity. I could never get along with friends and partners that didn’t respect my time. You’ll also be surprised at how much you can get out of it if you’re authentic in your relationships.
If you think about it, an aesthetically attractive woman has a 100 men in her life, attempting to get into her pants at any given point of time, at any given day in her 20s or early 30s. They either do it through being too nice or being too sleazy about it.
They aren’t authentic in their being.
To say that I do not value aesthetics in a romantic partner, I’ll be lying through my teeth. However, I am convicted that values and personality are what keeps any relationship working.
The blueprint for success in any area of life from relationships to business is evidently in integrity, accountability and empathy.
Unfortunately, these values aren’t conventionally imparted through our education system. In school, you’re only accountable to yourself. If you had good grades, you didn’t have to care. You could win by yourself. Unfortunately, in the game of life, it’s a team sport.
Tactics, strategies and results can get you the attention. However, integrity and trust will always be why ultimately why people transact with you.
Three months ago, I helped two music outfits at one go: to help them market their vocal coaching classes.
One of them paid me 1.9k to consult him. He didn’t complain about the quality of leads I generated for him, that he was ‘wasting time’ on following up not he leads and took my advice on making ‘godfather’ offers.
Since then, he has 20X-ed his investment so far.
How much do you think the system I built for him is worth today compared to the 1.9k initial investment?
10k? 20K? 100k exponentially?
The second individual demanded I made its performance base. I did it for free. (Read: Huge ego, wanted to prove I was the best in the market. Will never make the same mistake again)
He wanted no follow-up, super qualified leads and ignored my advice to sure her sales team knew how to make ‘godfather offers’.
Even before the campaign started, he complained that people liked ‘abusing her free trials’ and it’s not going to work. This was even when he was running Google ads (which supposedly have higher ‘buyers intent’)
He broke even on his advertising spent in the first month.
He then quit going into the second.
You may think I am going to make a comparison on attitude here but I am not. I am going to make a point on commitment.
What if the second individual followed up on the process?
He broke even in the first month, now, let’s go into the second month:
– Let’s say: now you train your sales team to start making godfather offers.
– You start making an incentive-based sales system: you can give you the leads, however, if don’t close, you don’t get paid. However, if you close, you get a high commission.
The question is, can you keep micro adjusting till you get it right?
No, the ULTIMATE question is this, ARE YOU going to keep micro adjusting until you get it right?
Now, let’s imagine 6 months in, she gets this system right, just like the first individual.
How much do you think this system she’ll end up with be worth to her business? She has a team of 3–4 vocal coaches all hungry for business.
1000000SGD if replicated across multiple musical instruments?
Looking for me to build YOU this 10k, 20k or a 100K client acquisition system?
Talk to me.
Every internet guru says you can make 10 thousand dollars per month. However, how many people actually are netting that amount? The number of leads isn’t meaningful data, nor does it mean a positive return of investment from a campaign.
Quality of leads > quantity, accounting for time invested to follow up.
Content, positioning and communication of value are much much much more important than the platform itself: SEO or paid marketing. The real metric is cash in the bank: sales, net profit and free cash flow.
One has to focus on real metrics. If you are spending 10 thousand dollars on advertising and expenses, exclusive of fixed costs: software, an employee pay or rental, and net 10k, you’re technically making a loss.
Hence, accounting for net cost per acquisition and documenting one’s cost per lead against your average order value will give you the ‘magic metric’ on how much you should spend to acquire one lead.
Numbers are half of the art of client acquisition.
Hence, a real metric, for any business is net cost per acquisition.
I am showing off here because the cost per acquisition is a concept I stole from Nicholas Kusmich, I improved it to net cost per acquisition because the return on advertising spend is merely part of the story.
To get your net cost per client acquisition, apportion all expenses from software to rent, automate and document all expenses. Some marketing campaigns return positively on advertising spent but thin out on net margin due to fixing costs: rental, inventory, pantry snacks and etc.
One basic example:
You can make $9000 dollars in revenue, but pocket a net profit (free cash flow) of $1200.
I document and automate everything on Google Sheets. Google sheets is an awesome project management tool, shout out to Ryan Stewart here.
I run my marketing campaigns with my own dollars, curate content with my own words and perform sales as a one-man outfit. This is the ultimate form of skin in the game. P.S. I’ve been net positive since day one. So that’s a good thing. 🙂
For the last 2 months, I’ve been getting requests on business and marketing after hitting my first 10k in net profit in 30 days, whilst also handling my academic commitments and also running my entire company as a one-man outfit.
So question is, how I did I do it, in a short compressed period of time, just less than half a year after quitting my last formal role?
Now, I’m going to give you a business lesson that no business school teach, yet, these exact principles can be replicated across any business. The first principles approach, from yours truly.
Every business needs to sell a product or service in return for CASH. This is true whether you’re selling coke bottles or a private University selling degree certifications.
READ: CASH, NOT FUCKING FUNDING. NOT FUCKING RAISING MONEY. CASH FROM CUSTOMERS.
The second question, is, how do you acquire clients that’ll hand you CASH in exchange for a product or service?
This is also known as the art of client acquisition, as I so dearly put it.
This is giving out flyers, tagging your friends on Facebook, sending text messages to your relatives, or if you’re Coke, associating happiness with sweetened soda on giant billboards (some times with scantily clad women)
However, in this digital world (god sent thankfully) there are many other ways to acquire clients, such as Google advertising and Facebook advertising. I’ll go into the benefits of using such platforms another day.
Now, let’s talk about the first principles of acquiring ONE client.
If you paid for $100 worth of advertising, and you made a sale of $300 within a time span of 30 days. You’ll have a RETURN OF ADVERTISING SPENT (ROAS) of $200.
Let’s say you’re selling coke and your cost of goods is $100. You spent another extra $100 on advertising (let’s say you hire your niece to give out a thousand flyers, 8 hours of your niece’s time and the flyers both cost you a total of $100)
That’s a NET RETURN OF $100, excluding labour cost (you).
So that’s measured on a PER ORDER BASIS. Can you add in a TIME FRAME?
Here are the TWO important metrics you need to know:
Your 30 Day revenue/ Total number of orders = Revenue PER Order in 30 Days
Your 335 Day revenue/ Total number of orders = Revenue PER Order in next 335 Days
Your average order value, in this case, is $300.
Your return on advertising spent is $200.
Your NET return on investment is $100 (excluding labour cost, assuming you’re a one-man outfit)
Okay, moving forward, what if the customer purchases from you ONE order of coke for another $300 for the next 11 months?
This is termed a long term value.
That’s a total order value of $300 X 12 = $3600
Interestingly, if you spend $300 to acquire one client on your first 30 days, you’ll be in the ‘red’ in the first month, but you’ll be in the GREEN for the rest of the 11 months.
The question is, how can you position your products and services in a way that gives you positive cash flow month after month after advertising spent and cost of goods sold?
Now, as I mentioned, there are hundreds of ways to acquire a client, from hiring your nieces to running complex Facebook advertising campaigns.
However, the first principles are similar:
If you spent $100 on an ad campaign to hire your niece and print a thousand flyers, how many leads are you getting from that $100?
If you get 10 enquiries, you COST PER LEAD IS $10.
Now, let’s move on to another important metric, your cost per customer acquisition.
Your cost per customer acquisition = TOTAL COST OF GOODS + ADVERTISING SPENT/ TOTAL ORDER VALUE
If it costs you $100 to purchase bottles of Coke, and another $100 on flyers, and you get 10 enquires, and you made ONE SALE at $300
Your cost per lead = $10
Your cost per customer acquisition = $200
Your RATIO of cost per customer acquisition = $200 / $300 = 66.7%
Your goal as a business owner is to always lower the RATIO OF COST PER CUSTOMER ACQUISITION by either decreasing COST or increasing ORDER VALUE (average order value, long term value)
This is true for ANY BUSINESS.
To add on, in the example I used above, I have not included referrals that come from acquiring one customer from the first 30 days.
Referrals from any customer can be apportioned to long term value.
If you acquired one customer in the first 30 days and he or she refers you another customer with the same TOTAL value within the next 11 months, you’re technically acquiring another client for FREE from a monetary standpoint, and your NET COST PER CUSTOMER ACQUISITION is lowered.
Now, is a business just a numbers game? YES and NO. Have you ever wondered why people pay million dollars for a Ferrari or queued up for days outside an iPhone store?
That’s right, brand equity. You can define brand equity in many ways, however, I define brand equity by the ability to position your product or service preeminently in any marketplace. This is your competitive advantage. This is why you are able to charge a premium on your services. This is what keeps you away from competing on PRICE.
This is why the same cup of Starbucks if sold separately in another cup without its logo, isn’t going to sell for a premium.
This is why a car, with the same specs and price without the branding of a Ferrari, will never sell for it’s the same price.
Check out this short clip from The Founder, based on a true story.
Brand equity is going to largely determine the LONG TERM VALUE of ANY COMPANY. So is there a way to increase brand equity in any company? I call it the 3 Ps. Promise, position and preeminence. I’ll cover these 3 Ps in another article, another day.