On the show today I’m joined by Babak Azad, who is the former Senior Vice President of Media & Customer Acquisition at Beachbody. During his time there, Babak helped grow the company from $100 million to over a billion dollar in sales, while overseeing more than $500 million in media spend. Now he is the founder of Round Two Partners, which helps performance marketers scale their businesses.

I asked Babak to come on the show because he brings a very unique perspective from his days at Beachbody. You’ll be interested to hear how he had absolutely no direct response or performance marketing background prior to joining that company, but the lessons he has learned he now uses to help small business owners who are his clients.

In this episode we talk about how you can understand the value of a customer, the importance of scaling, why it’s really all about context and fundamentals when it comes to business (regardless of which platform you’re using), and so much more.

I really like that we covered such a wide range of topics that can really applied to many types of different businesses.  As we talk about the show often, you’re going to hear that regardless of what level you’re at, you need to always be in a mode of testing and optimization.

On the Show Today You’ll Learn:

• The single biggest takeaway that Babak took from experience at Beachbody – and a significant mindset shift he had to make around advertising spend
  

• What you really need to know in order to succeed (especially if you’ve just launch or are bootstrapping things)!

• An area that he believes is missed opportunity that most companies aren’t taking advantage of

• What his two channels/two offers concept is all about and the importance of simplifying while scaling

• The reasons why it’s beneficial to go deep on the one channel that you’re seeing the most success in
• How to leverage our time so we’re spending it where it really matters, plus when to hire and how to know which tasks you should outsource!

Want to win a free 30-minute strategy session with me? To enter all you have to do is give me your feedback on the podcast. Specifically what I’m looking for is what topics you’d like to hear, guests you want to see on AOPT, style of the show and the frequency/length of each episode you’d like. Message me on Facebook by going to RickMulready.com/Messenger and I’ll pick one winner at random at the end of the month!

The Accelerator Group Coaching Program

I’m super pumped to introduce and invite you to my brand new exclusive 12-month group coaching program — the “Accelerator” — to help you finally take your business to the next level.

I’ve been getting a ton of requests for more direct business building mentorship and coaching from me, so I’m excited to announce this new program!

I’m living proof that when you surround yourself with bright, driven, like-minded entrepreneurs, you create an opportunity for enormous growth.

And I want the same for you.

The exclusive Accelerator 12-month group coaching program is based on the framework of High-Level Coaching, Community and Accountability.

Links & Resources Mentioned in this Episode

Click here to learn more about The Accelerator Group Coaching Program

Click here to learn more about Babak Azad

Connect with Babak on Facebook here

Connect with Babak on Instagram here

Connect with Babak on Twitter here

Connect with Babak on Linkedin here

Learn more about Round Two Partners here

Learn more about BeachBody here

Learn more about ShopRunner here

Learn more about UpWork here

Learn more about Workable here

Got A Question You Want Answered On the Podcast?

Ask your questions or let me know if there is a topic or guest you’d like to hear from in the comments below or click here to visit my contact page and submit your question there for a chance to be featured on one of my upcoming Q&A episodes.

Transcription of Today’s Episode

[00:00:00] So how do you start to increase the value of a customer in a valuable lead. Because once you do that it makes the paid media side that much easier as well. Right so if my value my customers higher presuming my target CPA is higher that makes it easier to make my facebook outlook.

[00:00:19] This is the show where I bring you the best tips tactics and strategies for using paid traffic to grow your business on autopilot. You’ll also hear what’s working and not working right now from the top minds in online marketing so that you can get more leads in sales every day without having to empty your wallet in the process. All right let’s jump into.

[00:00:41] Hello and welcome back to the art of pay traffic podcasts everybody Rick Mulready here this is episode number one hundred and sixty nine. Hope you do an awesome thanks a lot for coming to hang me today really appreciate it on the show today. I’m joined by Babak Zaad who is the former senior vice president of Media and customer acquisition at Beachbody where he helped grow the company from a hundred billion dollars to over a billion dollars in sales and while he was at Beachbody. He also oversaw over 500 million dollars in media spend today. He’s the founder of Round 2 partners where they help performance marketers scale their businesses by focusing on three core areas customer long term value brand building and operational excellence. And I asked Bob to come on to the show because he brings a very unique perspective from his days at Beachbody overseeing a massive media spend where they did a lot of TV and also online marketing to now taking those same lessons and working with smaller businesses. So we talk about a lot of different things here on the show today including how to understand the value of a customer. We talk about the importance of simplifying when scaling the concept of two channels to offers. We get into why regardless of platform. It’s all about context and fundamentals. We talk about how to look at scaling once you’re seeing success with your marketing. How do we find leverage so that we’re spending our time on the highest value things in your business and in your life.

[00:02:15] And we also talk about hiring for your team and how do you determine when is the right time to bring people onto your team to help you out. Now just a heads up. This takes it takes us a few minutes to kind of get into the meat of the conversation like tactics and strategies. But I really like the fact that we covered a wide range of topics in the interview here today. Before we dive into it I have been getting a ton of requests over the past year pretty much for more direct business building mentorship and coaching from me and so with that I’m really excited to announce and invite you to my brand new exclusive 12 month group coaching program called the accelerator. This is designed to help you finally take your business to the next level and the accelerators based on a framework of three key elements. High level coaching community and accountability and I started working with online entrepreneurs because I am living proof that when you surround yourself with bright driven like minded people and a coach and mentor at Ukriane opportunity for big time growth not only in your business but also in your life and that’s really what I want the same. I really want the same for you. So here’s what you get in the accelerator program you’re going to get a personalized game plan from me and my team for achieving your goals in 2018. You’re going to get monthly group coaching training and hot seat strategy calls. There’s going to be two calls per month to live private retreats here in San Diego a VIP experience and day at an NBA Live event.

[00:03:56] So as you may know as you are maybe you don’t know I do two FBI live events a year here in San Diego in May and December and as part of the accelerator program you’re also going to get a VIP experience and a bonus VIP day at one of those events here in San Diego in 2000. 18 you’re also going to get personalized funnel critiques. Facebook ad critiques copy reviews launch strategy reviews whatever it is that you would that you need the most help on and your business. We’re gonna be offering that on a monthly basis you’re going to get a private Facebook group to get daily support networking and help which I will be in on a regular basis and a whole lot more. So I’m really excited to put this group together. This is an exclusive group as I’m only accepting the first 30 people and this is first come first serve or once has filled up. I’m going to be closing the door so to learn more about this program and reserve one of the 30 spots go over to Rick Mulready dot com forward slash accelerator. That’s Rick Mulready dot com for its Lasch accelerator. Let’s face it as entrepreneurs we are faced with so many choices everyday right. But the most important choice that you could ever make in your business in this is what I’ve found back in January of 2014 when I made the decision to invest in coaching accountability and community. And that’s when things really turned around for me. I’ve been floundering for about a year and a half having no idea what I was doing.

[00:05:32] Running in circles not seeing the blind spots in my business and when I did invest in coaching accountability and community that’s when things really so I can personally attest to this that there’s no amount of Facebook ads or online courses that will ever give you the why that coaching accountability and community will give you so you now have the opportunity to quickly transform your business and your life. I mean frankly you can remain where you are in your business or you can grow beyond what you ever thought possible which is really really exciting for me and I hope that’s exciting for you as well. If you want to accelerate the growth of your business in 2018 I’d invite you to join us in this brand new 12 month exclusive group coaching program and you could check that out over at Rick Mulready dot com forward slash accelerator. All right without further ado my friends let’s go hang out with Babak As’ad Babiak.

[00:06:27] Welcome to the art of pay traffic. How’s it going my friend. CONAN Well Rick pleasure to be here. Thank you so much for coming on the show here. We’ve had some technical difficulties here getting going here but I’m really glad to to jump into it here with you before we dive into what we’re talking about here today. Tell us a little about yourself and your background and how you kind of got to where you are today.

[00:06:48] Sure. Yes so I. So I currently work with brands helping them build a performance marketing businesses.

[00:06:54] The way I got here was I spent eight years at Beachbody Pian ITX insanity. 21 defects all that good stuff and Chick ology so I was there from I got there in 0 7 we were at 100 million so pretty substantial scale and I left after eight years when we just crossed a billion. So got that nice little 10x number which was kind of neat. Obviously a great run and I spent the first few years there building finance and analytics and the last five overseeing media and customer acquisition by contex too. I had no direct response performance marketing background I was a math major in college. The investment banking I’m into business school and then kind of had its it’s traditional about kind of that more you know I get so-called safer and just you know it certainly wasn’t D-R and anything like that it wasn’t infomercials and certainly wasn’t digital media at that point and then started a magazine in L.A. which failed miserably. But the best 25 grand I ever lost. And then when said Napster the the legal and unfortunately not as fun version as everyone else knows. But yeah and then I live in L.A. currently right now in LA lawyer with a client of mine but I’m live in L.A. with my wife and two boys and it’s a little bit.

[00:08:04] Now you came into Beachbody there you say with out that performance or Diyar background it mean granted. You said he started out for the first five years or so and the with the analytic side. What were you really being brought into do you at that point.

[00:08:18] Yes I was the first three years which ended up and then we kind of created this rule book. So for a 100 million dollar business there really was and I would say the infrastructure the level of analytics the level of systems that you might expect and again in 0 7 I think you know the technology has changed and made it easier. There are still major challenges there. But they just hired a CFO and he kind of basically needed a jack of all trades so I could do the budgeting and the forecasting which frankly I couldn’t pay me enough to be a CFO. But then really what I ended up doing literally was just I would get a whole bunch of data from the telemarketing team or the operations team and then just start seeing what I could slice and dice. I mean literally I got pretty limited direction which in retrospect was a cool thing but I basically just said look I’ve got to figure out how to create some value here. I don’t know what I’m going to do. I don’t really understand the business but I have a pretty decent brain when it comes to analytics and critical thinking. So let me just see if I can do something.

[00:09:14] And there wasn’t a sophisticated approach towards it. I think one of the biggest things I took away from that was that I got to 100 million with a lot of challenges and weaknesses and still got to 100 million or so. We do not have to have everything in place. They just had some of the crucial things in place which was creative and offer and a decent understanding of their analytics. Don’t get me wrong like there was you don’t get 100 million with like knowing nothing. Sure. But you know really try to. How do you start taking things up a notch and start to try to get a lot more better understanding of the business.

[00:09:47] So were you coming in to improve the customer acquisition or what were you being on.

[00:09:52] No no no no no no no. I was not there today would never have hired me to do that. OK. No I mean it was literally the CFO needed a body to help him do stuff and gutturally was he had no real there. We didn’t have a budget the first budget we did I think was the year after I got there. And even in a direct response business it’s a little bit of a tough thing because you don’t know if you or your offer your creative your spend is going to be what it’s going to be. And then literally it was put a hopefully halfway smart guy in the room and give them a bunch of stuff to look at and see where he can find. I mean it was a pretty vague rule but I knew about Beachbody because my magazine days a couple of people in one of the shows were actually a gym I used to drop off at. And so I knew I knew about the business and then they kind of vouched for Carl and John because I didn’t know when they bought infomercials and network marketing and frankly there’s a stigma around that. Right. So I kind of they vouched for them but it was literally just come in and help Brad who was the CFO of time to help them out. And I liked fitness and figured finance was my way in. Again I had zero interest to build a finance career. It was much more let me get my way and it seems like a pretty cool company. And it’s one of those things too.

[00:11:03] I took a 25 percent pay cut. The headhunter actually I knew didn’t even know what my comp was until after I got the offer. So it was also a cap. I mean it was very good lucky because I got a call on a Thursday called him back Friday interviewed Monday had an offer Tuesday and gave notice on Wednesday. So I’m like one of those situations where it happens every blue moon but it happened and for certain I got lucky with that. And then once I got in then started to try to figure out how to create a role and then we realized we needed a team and so started hiring people into the analytics team helped build. So the B.I was the business side of the B.I thing and then then after a few years I really I had at least amount of influence but I wanted accountability and that’s what led into creating this role overseeing medium and customer acquisition.

[00:11:46] Got it. So how did you start.

[00:11:48] I’m curious about once you moved into that role of you know managing that media spend and moving forward with spend you know customer acquisition and stuff like that. What did that look like for you to start with. Like did you once you moved into it was there a goal in place that you say okay we want to do X you know. This amount over the next year. What did that look like and where this question is coming from is that my listeners all the time we get questions all the time is like all right where do I start.

[00:12:16] From a strategy perspective and I always talk about starting with the end goal in mind and working backwards from there is that sort of how once you moved into the to the ad spend and the media spend managing that side of the business is that where you kind of started or was there it was a different starting point for you.

[00:12:32] Now I’m in there so there are a couple of different ways I can answer that one is you know when I came into that rule we were probably spending 50 to 75 million a year on TV. So there was a decent bit of spend and the way we got there and I’ll talk a moment about customer LTV and how we think about Target’s CPA as we call them CPO is cross-border same thing. But there was already some stuff in place I think from a personal side and a roll side. One of the things I had to shift was I think in finance and analytics it’s really easy to identify stuff and kind of not just point fingers but it’s easier to say rather than do. And you know I remember I got a call one the only time I ever got this call from Carl or CEO which was essentially why aren’t we spending more. And I think when you have a very critically minded brain like I do and really hadn’t grown into that role it’s really easy to just cut cut cut and you can basically optimize yourself out of business. And this is the part where it’s tough because you want to use information to inform what you’re doing and you have to be smart about it. But there are times where you have to give things a little bit of leeway and again business risk cash position affects that kind of stuff. But once I ever got a call saying how come we’re not spending more and then that never happened again and it wasn’t out of control. But I just I’ve learned to be a much more aggressive marketer.

[00:13:47] But it’s also because I’ve I’ve got information and I know how to use that and help manage the risk. I will say the broader question which we’re asking is for us and I think for any performance marketing business you have to understand your metrics. So you know I work I was I was spoiled frankly a Beachbody because I had no cash constraints we could basically spend what it took to cash in the bank so I didn’t have to worry about breakeven.

[00:14:08] There are a lot of people and most people who don’t have to do that right. So most of my clients now we talk about 30 day 60 day 90 day break even or it’s even when you first launch what you start with I’m like well you start with something reasonably conservative until you have more information unless you have venture funding or things like that.

[00:14:24] But if you’re bootstrapping it or you have to be particularly careful about the cash then you have to have a basic sense of OK maybe I’ll put a hundred dollars or a thousand dollars or whatever that number is that you feel comfortable putting at risk. And then as you start to get information that starts to inform really what is the value of a customer like what your what’s your conversion what’s your Opsahl rate. Things like that and you start to build that and you may have to start with the 15 breakeven super conservative and then maybe you can grow into day 30 and 90 day and then not care about it as much as we did. I mean the reality was on fitness you generally breakeven pretty quickly.

[00:15:00] So I mean partly because of my role in finance and analytics I understand and that’s really one of things I do very well as I understand the value of the customer has to think about understanding that model both to inform your target CPA as well as how to identify the levers in the business because you’ve got to always be in this mode of testing and optimization.

[00:15:19] So certainly that was like the personal side I had to just learn how to not be supercritical and you know use information to optimize but not kind of take the spend. I mean you could very easily see a path of taking the spend down to zero.

[00:15:31] And then kind of so opening up a little bit smartly hopefully and then at the same time you know it’s you figure out what are your goals what are your cash constraints What are your cashflow issues. What are your business goals and what kind of risks are you willing to take and all those things. As for me I never knew we were putting my clients. I don’t believe in what’s right and wrong for a breakeven or a target margin or things like that. There are a lot of constraints and concepts that you need to have in the business that helped you know helped to inform and define that.

[00:16:00] Now you are you are coming from the analytical side you knew the numbers and look and when it comes to pay traffic and Facebook whatever kind of strategy and channel that you’re using it it really is a numbers game. Like you mentioned like what 30 60 90 whatever it is if you know your numbers it’s a numbers game and you can spend all day long if the numbers are working out so you came in with that benefit of knowing those numbers because you that’s where you started out. Take us through because you knew the numbers what were some of the first things he did from a from a media spin that and then I want to kind of address it from a the types of businesses that you’re working with now who don’t obviously have the budget of a Beachbody when you were starting off and maybe you don’t know those numbers going into it. Let’s kind of let’s start with with how you approach it with Beachbody because you knew the numbers and then kind of circled back to kind of what you’re seeing with as you’re working with businesses today.

[00:16:53] Yeah I mean so I think because I’ve been in I’ve been there for three years and I think at the time I was a V.P. so I’d have decent influence. And so it wasn’t like I started from scratch. So

[00:17:05] there were things I was definitely suggesting it but we were working on implementing both from the media side and then phone the phone was a big deal for us I know a lot of folks who are digital only don’t use the phone as much. I always are not always but I think it’s a missed opportunity for a lot of people and there are ways to do it kind of frankly. Relatively simple which we can talk about if we want to. But you know there were you know we were always in this mode of evaluate media evaluate LTV where we putting attention. And so the one of the first things I did really actually was simplifying and it’s actually one of the points I make about when people talk about scale. You know we were running media we ran a lot of media with agencies on TV saucily long form that’s the norm. But we were running across a lot of different agencies and frankly just simplifying and not having 15 agencies that were running but you know getting to a core 5 was a big deal. And the really the analog for me and other concepts is you know I talk about two channels two offers and so people ask what does my opinion I’m not much my opinion I’ve looked at a lot of businesses that have scaled it’s generally been two channels two offers.

[00:18:10] So you know and I think this idea of simplifying the business and trying to get something that’s not so complex doesn’t mean you’re not sophisticated but not so complex is a big deal and so I tried to bring that to that sensibility frankly to how we manage media both in terms of our agency partners and then just frankly it was like start to understand how are we looking at the business. You know there are some antiquated I’ll call the antiquated approaches towards managing which as you know they call us the two strikes rule which if an airing doesn’t work two times in a row than we nix it it’s like that’s a pretty unsophisticated approach. Right. So we started trying to see how do we start to use were the areas where we can you know not not be so risk averse. And then also frankly we just started professionalizing the operational side of it as well. I will say it especially in TV but in any business the accounting is a miserable part. No one wants to touch it but that’s where the dollars and the ins and outs go. Right. And so you know how much we would pay agencies how much we would kind of do if there were credits and refunds like that stuff adds up. When you’re running 100 million of media a year that stuff adds up. So some of it’s not the sexiest areas at times but that’s where the caches journey is. That’s where I fall for the cash results as sexy even though some of the work may not always be that frankly we all know yeah for sure for sure.

[00:19:25] I want to go back to that two channels two offers. So for once you kind of sort of went with that and embrace that what did that look like for you guys at that time.

[00:19:37] Yeah I mean if you look at what Beachbody I mean I’ll give you a couple of examples so Beachbody we were great at TV and in the network marketing side we were not running when I was in Ericsson I could speak to a lot about liabilities. We were not good at cold traffic online. And I think there’s something to be said for that. So my experience has been that business is fine when you find success you’ve got to go hard and deep about it. And so if let’s say in the digital world you know there’s Google Facebook Google YouTube which I know is on Google but sometimes it’s different affiliates. Pinterest Instagram Twitter mean all of these dinked platforms. The reality is my experience has been when. If I see someone who’s got four or five channels that are spending about the same. That’s actually probably not a good thing because it probably means they haven’t exploited one of them to as deep and as hard as they could because once you find success going hard and it means you’re going to have some exposure. But it also means you go and exploit. And so. So from one side. Yeah it sucks to hear that. We were not good at cold traffic and my friends sort of like look you guys are missing on Facebook and Google and all these other things. So yeah but we’re also a billion dollar business. So we’re probably doing something right. And I don’t mean that at all disrespectfully but it’s more about we found success in TV. We found success on the network marketing business.

[00:20:49] We went super hard and deep in those and I’d argue that even like a company like Apple you know there are two big channels are retail and there are the carriers like Verizon and Sprint and things like that. And so I think you see this in a lot of different places that people find something that works some folks are click Bankole and they go hard and deep there. Some folks are Amazon only in you. You’ve got exposure and you try to mitigate that. But at the same time you also got when you find something that’s working you’ve got to go after it pretty darn hard. And that’s where that concept comes from. And I frankly don’t think you need so many different offers. You need a couple to work and you got to tweak them and refined them over time. So they’re going to last forever. But you know I think that’s I think sometimes we overcomplicating we think we need to be everywhere with so many things versus find one or two things that’s working really well and go after that and own that and dominate that. And then you can worry about trying to go after something else because that can help inform and and fund the other things you do yet.

[00:21:47] So glad you brought that up. You kind of finished with that thought there and that’s what I want to shift into. So once you found the TV and the network marketing was working so well those are two primary channels with the authors there. How did you use that to move into other strategies or other channels at that point or did you.

[00:22:05] So I would argue that I don’t think we did it nearly to the scale that we did. So we had I mean they still how the trainer and live business and some other things. But you know TV and and the network were ARB that was what we became known for and that’s where the growth came from and you can argue about where the business is today and you know there certainly some some challenges with the business Boids. And again without kind of going into some of the stuff I can go so far into Boids. The reality is that I think we got we have we needed to innovate probably a little bit quicker than we did in digital and tech or some were some challenges when I was there. So I think at the end of the day it’s like you got you got to innovate right so you can’t just sit back but without kind of I know it sounds kind of like an empty answer but you know I think ultimately we innovated a little bit better and faster and been able to test out certain things a little better. We probably would would have gotten into digital better but again I would argue that TV still works and the network still works. It’s just a matter of get out of your own way on certain business constraints like technology which as we all know can be a can be a limiter. Sure. And when you’re when you’ve been around for a while you’ve got legacy.

[00:23:15] That’s I think that’s a big advantage that businesses starting today have is the tools and the platforms are so dang easy and simple relatively speaking that you can do a lot with you know relative to where you could you could start 10 years ago.

[00:23:28] Sure sure. Now you said that you know what with the TV and TV still being very effective. What are your thoughts on you know big time budgets moving from TV into online and digital like Facebook and stuff like that and more into really super targeted video strategy taking those budgets. Obviously TV is still effective. What are your thoughts on. You know what’s what’s happening in the landscape though of these big time budgets moving over to online.

[00:23:57] Yeah I mean look first of all the actual execution has got to be different. No doubt about it. So you know I think I’m guessing most folks listening may it may not be on TV and may not even care about TV enough sense. But first of all the fundamentals of direct response are still the same whether you’re doing Facebook Google direct mail radio TV. And so you’ve got out from the creative sky. There’s like you know the hook in the offer and the problem solution and all those kinds of things. And then how you manage it. Again it comes back to the metrics but ultimately you know and we all face the pain of Google and Facebook and you know I’ve got a clip right now where it’s you know we’ve got to reset all the campaigns just cause that’s what Facebook. You have to do every once in a while. Yeah but at the end of the day using the same fundamentals which is how do you get people’s attention. I think the big advantage you have online is you can start people at the point you want to watch the video on TV. People will just jump in wherever they are as opposed to on Facebook. I can basically I got three seconds to get your attention. But if I do that I basically control what you watch. And so certainly having something that’s compelling against Facebook’s big database marketing platform right.

[00:25:01] And so the targeting has gotten ridiculous and so you’ve got to use that now and trying to figure out not the SOS you know so so niche and you’re only targeting like 1000 people at a time on this.

[00:25:11] Well that’s not your business. Yeah but it’s so targeted that you can speak to the audience in such a way and the beauty too is if you don’t want someone to see your ad there are ways to control that to a certain extent. Right. But again the fundamentals about you know video and what you can do to engage people and things like that. I mean I don’t care if it’s Instagram Facebook or TV. You know the video is still a very compelling way to get people in. And then you know we’ve also just got to manage through the pain of these platforms and some of their craziness. There’s no there’s no silver bullet on that other than to say we just we’re all dealing with that same pain and this.

[00:25:45] Yeah for sure. It’s it can all be effective it just depends on the context of where that video is being shown and who you’re speaking to on that specific platform there. Now you mentioned you know as far as the fundamentals and the lessons of direct response and stuff. What are some of the things that you found that works really well at Beachbody that you’re carrying over here with other businesses that you’re working with now. It really center around these lessons have direct response and the fundamentals of what we’re talking about as far as getting attention and so forth.

[00:26:19] So I’ll say this you know I’m not a copywriter and I don’t do production so people want that I’m not your guy. You know my approach is so it’s certainly things like your hook.

[00:26:31] And what’s the what’s the problem the solution.

[00:26:35] And I think the reality is you have such less time and everyone knows this to get people’s attention. But you know where I come from and let’s assume a business has just reasonable scale. I mean it’s I don’t know maybe it’s six figures maybe it’s eight figures but whatever your definition of reasonable scale is. But there’s something there I believe in like you know one of the biggest things for me is constant testing and optimization and use information to inform what you’re going to do whether you’re small or big business. Everyone is resource constrained. So you’ve got to figure out where do you put your time and attention and resources and dollars. And I think that’s where I think that’s one of the most important things is are you putting your time and effort. From a business side and certainly from a personal side in the areas are the biggest areas of leverage. And I think that’s one of the biggest things I’ve learned. And also understanding that’s understand your scale. So I was just telling a friend earlier that you know there was a group that was a part of that was 25 mastermind’s was 25 k a year but in a business that’s running 100 million a media how little of an impact do I have to why that and I think sometimes we get penny wise pound foolish. And so we see with scale whatever that number is becomes proportionate. But I think that idea of find the key levers put a tension there and then understand really what the biggest bang for your buck is like.

[00:27:47] That’s it sounds great but ultimately that’s where I spend time and so whether that’s look at your funnel. Figure out where the drop off points are if you have a subscription business do you actually understand the stick rate. You know when people are whether it’s a trial or their first shipments a second and third where the key drop off points like what are the reasons that people are dropping out. Messman a bunch of time with subscription businesses. The first thing I say is what are your top three cancel reasons. You understand them. And generally it’s price value didn’t use it. Whatever. Figure out what those are and then figure out how do you start tackling that whether it’s through content or with what the actual product is or whatever. So the actual tactical part is really is business specific but really it’s about like where the campaigns were the key problems were the key drop offs in the business whether it’s on your funnel whether it’s on the ad creative side whether it’s on retention and then figure out like where you think the key levers are. And then that’s where you’ve got to put attention because I think oftentimes too we think things have to be so great that our Web site has to be perfect or everything has to be so dialed in and we spend a lot of time on that. And ultimately. You know you can’t break. But is that the biggest bang for the buck where you are at this point. Here’s some context. Just one quick note on that for sure. The context is it Beachbody we had no CRM and no CNIs in a billion dollar business and we got 2 billion.

[00:29:07] Right. And so arguably we could have been better and bigger but you don’t have to have all those things in place and I think sometimes we expect perfection or that everyone else has it’s so much better and like every book scholarship club was running some of their e-mail on MailChimp right. Not all of it but they were running some right and they got bought for billions.

[00:29:25] So I think they just these reminders that yeah that’s probably opportunity cost. But at the same time they still succeeded. We all kind of have to succeed in spite of ourselves until we can actually get to that point where you know we chip away at improving process systems whenever those things are.

[00:29:39] Yeah for sure. I mean you talk about looking at the funnel as a hole where the drop offs are what’s happening knowing your numbers and stuff like that. Is there a you know for someone let’s just say someone listening doesn’t have you know big time systems in place and lots of resources to be able to do that. What are some simple ways that you’d recommend in looking at that as a whole and say looking at the funnel as you know from a holistic standpoint. Okay here you I’m seeing a drop off here are seeing you know my results are are suffering at this point how does how does one really break it down from a very simplistic standpoint to be able to look at that and then make a decision based on that.

[00:30:19] Yeah I mean so some of the basics is like I break it down into like what are like literally what are the steps that happen from kind of add to the end of the time a customer customers with you. Right. So it’s literally they see the ad you know they click on it. They come to your sites. How many clicks do they have to get apps carts to conversion. Are up. So what do you do afterwards. And it’s whatever level of detail whether it’s like for all traffic and you literally just spend and orders and that’s it or you have a buy at set.

[00:30:50] I kind of don’t care wherever you are. You just start. And then you start to build that’s refinements and then you know I get sometimes people ask well what’s a good CPA. Well I don’t know what your business are and I don’t know what you are devalued because I love that question. You know I mean so I get I understand what the question is. And so from one side I get it which is you’re trying to get some market input about like should my cooks rates to be at like 1 percent or 4 percent. So within maybe a certain category you know maybe 10 percent is probably then or is the norm or whatever it is. And again I’m just picking numbers out of the air but I think part of it is start simple right. And you can’t do it you can hire a kid out of college who’s good at Excel and have him just start to look at the shopify data Google or it’s out a mailchimp or wherever it is it could be super. I mean I call them relatively basic but really effective tools or you may have some super robust you know much more expensive stuff which may or may not be better but just start somewhere and start with a baseline wherever it is you don’t always have to go and backfill your historical stuff but start with a basic understanding of what’s going on at each point and just literally map it out and whatever you have great and then you start seeing how much more granular how much more refined can you be.

[00:32:02] And then you talked to your friends reach out be part of some Facebook groups and ask questions about that. But ultimately it comes down to one thing it’s how much is a customer worth. How much are you spending to acquire them. And then how much can you what can you tell what can you afford and tolerate. Right. And so I think there is a simplicity to it and we can get really sophisticated and talk about quick all of these analytics and all that stuff but at the end of the day assuming you’re running some kind of page traffic are you putting content out or whatever it is how much traffic what’s a customer worth. How much are you paying to acquire them. What’s your GPA like that’s your PNL right. And so there is there is a point where as much as I get really green I can get granular with folks. There’s a constant reminder of like what’s the simplicity what are we really talking about here. And that’s a really important reminder because you can talk about all of these things and all these really cool metrics but you know at the end of the day like the basic stuff and the simple stuff is much more of a basics and fundamentals guy than I am shiny bright object.

[00:32:58] Sure sure. We’re talking about the value of a customer and understanding that now from a simplistic standpoint if we’re not using you know a robust tool or dashboard or something like that if it’s if we’re if we’re just kind of bootstrapping this if you will in your mind what’s the easiest way to figure that out because I know you know a lot of people have an issue with that. We talk about it here in the podcast a lot is understanding your numbers and knowing you know knowing what you can pay for lead and the value of a customer and so forth in your mind what is the easiest way when we’re talking we’re like really nuts and bolts here from a simplistic standpoint and the easiest way to figure out what the value of that customer is.

[00:33:36] So let me start with something super super simple and may sound just kind of dumb and I’m not trying to be rude or or at all but this is sometimes what I do which is start ticking. Let’s just say we’re talking leads just to keep it simple. That’s how the business is its leaves and then they convert to customers as opposed to straight transactions. But I start looking at all the leads that came in in a certain month. And so I do cohort analysis. So the sense of what are all the leads that came in in January of this year February this year March of this year and start to see what’s the value of those customers are those leads over time. So the January folks what were they worth by the end of February what were they worth by the end of March and even times of like always at exactly 30 days man. Just start something simple and then you can worry about the exact date but you could just see all my January leads how much revenue did I generate from them by the end of January by the end of February by the end of March and do that for each month. And then it’s okay what’s my cost structure associated with the revenues they’ve generated. So it’s an info product it’s generally not that high if it’s a physical product it is in capture you know anything that’s triggered as a result of of an order. So cost of goods shipping fulfillment merchant processing you have royalties customer service things like that and that kind of gets you to a gross margin number.

[00:34:49] But I’m a big believer of start with simple cohorts generally by month if you can start to refine it by offer by traffic source by first product the bots are first kind of opt in or are forced to lead magnet. That’s great but if you literally just have to start for everybody you start there and then you figure out what’s the natural way to start splitting the your audience and start segmenting them but just start to track them over time and if you are an infusion software like you know not the best system for tracking site what you can do Basey monster data dumps out.

[00:35:20] And again you can hire someone off of work to do this. You can hire a kid out of college to do this. And if you don’t if you don’t have the technical skill and you don’t want to mess with Excel or whatever you just do some data dumps and say OK who are the people in each of these buckets. And let me track them over time and that is the simplest way and often times like I start there.

[00:35:38] No matter how sophisticated people think they are start there and then start tracking people and that monthly cohort that’s kind of by traffic by product by plan whatever again whatever is appropriate for your business then you kind of define that. I’m just picking some of the ones that I’m sure home across and and do once you figure that out and you’re like All right these numbers are working.

[00:36:00] I’m squealing here and you’re really diving into we talked about before just a couple of channels say I’m doing Facebook and I’m doing I don’t know add words for free. Just off top of my head here. We’re diving into those platforms. We’re kind of maxing them out. How do you make the decision based on the success that you’re seeing. You know your numbers. How do you sort of decide on what’s next from a scaling perspective.

[00:36:25] So a couple of things on that. You know right off the bat you know I think especially online you know most of the growth is coming through Google and Facebook. So I mean that’s the place I think most people should be.

[00:36:37] And usually when you have Google you should have put being on the x 5 or 10 percent. But my comment is like if you don’t want that 5 10 percent can I have it. And no one says yes. Right. And I mean that half jokingly but I actually mean like usually if Google getting implemented is not that much work and those little 5 10 percent which aren’t that costly from a time site. Those add up over time. So you know Google Facebook and then I do believe most people should be doing affiliates and not so influencer but it’s like affiliates and whether it’s e-mail drops or something and then your internal e-mail. Right. So those are the big channels that I tell people that I really focus on. And then if you’re in the physical product world I think QVC has to be on Amazon. It’s it’s like 2 percent cannibalization and the rest is is incremental. I just think there are so many people out there that are Amazon buyers I am one of them. There are some things like shop runner now that are starting to kind of give people offers around today free shipping but I just think like if you’re in a physical product world just get on Amazon. Third party FBA that model and like it will. It’s been I don’t think I’ve actually seen an instance where it’s not been incremental and then it’s a matter of you know who who is your customer.

[00:37:43] So if your customer was talking to someone earlier about it’s a with it’s like a wellness mom and she’s you know 40 years old and lives in the Midwest and got a couple of kids and things like that. How do you kind of how can you translate that into more audience or more so as opposed to adding a new demographic. So like that’s as it to millennials and millennial guys. Right. So can you do that on Facebook. Can you go back after more affiliates.

[00:38:07] Can you think about how you expand first within what you’re doing and then start to think about what’s the next audience and then frankly is it the same offers a different offer. I believe and how do you leverage as much as you have and what you can first without going after something else. I think in the old school world we used to see like people in the US and then we expanded internationally when they hadn’t really dominated the U.S. because they wanted to diversify and minimize the risk. I don’t like that I would rather try to exploit kind of going back to the two offers to channels thing like if you were going after wellness moms like have you done everything you can to go and maximize them and then by the way it isn’t always up to me on the traffic side. It can be on the value side. So how what’s the customer worth and if you don’t have enough products can you do can you be an affiliate for other people and so how do you start to increase the value of a customer in a valuable lead. Because once you do that it makes the paid media side that much easier as well. Right so if my value my customers higher presume my target’s CPA is higher that makes it easier to make my facebook outlook right. So I think you can do it on kind of multiple approaches here.

[00:39:08] I love it. I love it. Is there anything that we haven’t touched on that you really feel like we should be talking about.

[00:39:14] I think we touched on it very briefly but the arguments about where the business is key leverage points are also at the individual level too. And so if you’re a founder owner or CEO whatever that kind of that rule or frankly whatever your role is you know I think we all struggle with this too as to our own extends. But I think it’s a matter of what are the most high value areas we can put our time and what’s the lowest value. And sometimes like the easy things like we do just because we want to do them or we’re comfortable as opposed to you know finding an assistant finding a hiring a marketing person hiring a media person whatever that is. But I think how do we all spend more of our time doing high leverage high value things. And I think whether that’s on the business side or on the personal or look at the individual level it’s an important thing. And trust me like I’m not perfect at all of this there are things I look at myself like I really should have someone else do this. But you know I think this idea of how do you. Because again we’ve got 24 hours in a day. I can try to be super efficient. There are some software and tools I can use but there also is some stuff I can delegate. And you know it doesn’t always have to be a full time employee you can be a 10 99 it could be someone whatever. But I think that idea of how do you find leverage in your business and your life.

[00:40:28] And then sometimes the things you just enjoy doing and if you want to continue doing that’s great that’s fine but just understand that you know you’re making that choice and you have you. Oftentimes you have an alternative. I had a client who basically said you know I’ve gotten to the point now where when I find something is just a continued pain point I’m going to go hire someone to go do it and the tools whether it’s awkward or with workable and and things like that to access talents is unparalleled. Now it is it is amazing. Sure. So I kind of wrote a case study on. I put an entry level marketing role out there and I got 500 candidates and I literally managed the entire process myself and did not go completely crazy. And I just think like the fact that you can do that these days is just it’s amazing. So yeah trying to. And that was my kind of thing if like I needed help on certain things and I was like when we go find someone to go do a lot of people a lot of people don’t really know when the right time is quote unquote right time to do that.

[00:41:25] Like what’s worked for you when figuring out you know finding that leverage so that you are spending our time so that we all are spending our time in the highest value things you know. What’s that process like for you and how does one how do you recommend one. Because that question is like I’m not really sure. There’s fear of spending more money on hiring somebody oftentimes or they’re not really sure that this is all they know. You know they when they’re business. It’s like wow I’m not really sure but they could really like to your point you could. They could definitely spend more time on the higher value things. What does that process look like for you.

[00:42:00] Man and ECoG. Look first of all I go through a lot of I’m guessing similar struggles in a lot of people do and sometimes have waited maybe too long to hire. Maybe certainly waited too long to fire. At times unfortunately. But I think at one point a friend of mine made he said you know sometimes like let’s say you’re looking at are old like. 60 thousand dollars a year whatever. Just pick a pick something I’m obsessed with the person 60000 oftentimes. First of all the financial commitment is actually not 60000 because probably within three months you’re going to have a decent sense of whether this person is a fit or not. And so yeah there’s a cost to hiring there’s a cost to firing financial and otherwise. But first of all oftentimes when we think about the comp of someone it’s usually not as big as we think it is because when you bring someone on you know again I think within 90 days you should absolutely know if the person is going to use it or not and if not then you’ve got to figure out how are you onboard are you doing it in a better way.

[00:42:50] And then you know the other thing is they don’t always have to be full time employees. Right. So yes woman that I brought on to help me. She’s working 15 hours a week right. And if she’s going to go above that she lets me know. And so I kind of have a sense of what my cap is. I think I Well that’s what my client said. You know is there something that just repeated pain in your life in your business. And I think it also just requires a bit of an honest self-assessment to look at like literally how do you spend your time when you look at your calendar when you look at your tasks or however you organize your life and if you’re not organized and try to get some sense of organization. But when you break down how you spend your day be honest about like what do you what is higher value and what is not or what are those things that keep coming up as being painful. What are you don’t know how to do. It takes too long whatever. And then just start to identify hey I’m going to go find someone to go do this and it maybe one person and maybe five people. I don’t know what the pains are. It may be technology related and maybe accounting related. Those are probably two different people but I think kind of taking stock every once in a while and I think that’s a helpful thing to do is just you know to do a reset.

[00:43:54] That’s partly why having accountability partners can help and being part of a group but you may just do it yourself. It’s a little bit I do and I talk to my friends but I also I do my own research. You know once a quarter and I do what kind of monthly and weekly ones. I wish I was super anal about it but I think it’s that sense of just taking stock and paying attention. What is that thing that’s really annoying or that you really you probably look at you like this is a really minor stuff or someone else should be able to do this. That probably means someone else can do it. And often times do I think because I came from the banking world the more junior work was kind of the crap work. And what I found is actually maybe in that culture it was like when I was a Beachbody and my company analytic stuff frankly the junior folks really wanted to do some of the stuff that I was doing.

[00:44:41] And so I misperceived what I thought they would actually like doing and want to do because I had perceived it in a certain way.

[00:44:47] And so I think we oftentimes don’t. We have we have our own preconceived notions of what other people want to do when some people made a lot of accounting and you may hate it. Some people may love coding and you may hate it. I mean honestly we’re in a world today where there’s probably someone out there who loves every part of your business especially the ones you don’t enjoy. And that may come as a shock. It was the book that some people enjoyed tax accounting and things like that. Well some people love it. Great.

[00:45:12] I’m so glad you brought this up like this is very relevant for me especially right now I’m just in the process of hiring two people from my team pretty much doubling the size of my team right now on a day to day basis. I’ve got contractors all over the world but I mean and I’m so glad you bring out the fact that the part about you know careful what we what we think some someone else is not going to enjoy other people you know really thrive and love that type of stuff. And oftentimes they’re way better at it than we are. And you know that’s a hard point to to understand because we think we can do the best you know is our business we’re doing the best job here. But so many times the things that we are maybe not enjoying so much there’s other people out there who love it and are way better at it than we are. So glad you brought this part of you know finding a leverage point and spending our time in the highest value things and hiring and stuff into this. In his conversation here.

[00:46:04] Sure yeah I mean I look I’d say like it’s it’s stuff I think we all struggle with so yeah. And I think that’s part of the reminder too is like most a very very unlikely situation that’s something you’re going to that no one else. No sir we go through a lot of the same things and we think we’re on our own and we think it’s the only one and we think frankly everyone else has it better when they’re bigger businesses. And that’s right right. Actually recently everyone everyone’s got there we all got our own stock every business own stuff. It’s got to manage through. So that’s when you’re when you’re in it.

[00:46:36] It’s hard to remember that but sometimes you kind of got to try to remember that and get some perspective.

[00:46:40] It’s the whole iceberg thing right. We only see what’s above the water. We don’t see what’s going on below the water and all the messy stuff that that’s taking place and this has been really really good. I think we covered a lot of different topics here and stuff like that. Thank you again for coming onto the show here. I want to make sure that people can connect with you once they want to hear the episode and learn more about you and what you’re up to. What’s the best what’s the best place for people to do that.

[00:47:06] Sure. So my blog and my site are kind of my content as is Bob Amazon.com. So the dot com and then I’m pretty much on Amazon everywhere on LinkedIn Facebook wherever. So I’m client.

[00:47:19] Other than Gmail and other Biteback as I took my took that e-mail put on my blog and you know arrogant social links and wherever. It’s pretty much you can find me.

[00:47:30] But those are the two easiest and best places. And then there’s there’s always contact forms on those places to get a hold of me if folks want to assemble.

[00:47:37] I really appreciate it. I will be sure I’ll link all those those links up for it for calling the shots page for today’s episode. Again thank you so much for coming on. Really appreciate it. Absolutely a pleasure being here all right.

[00:47:49] Hope you got a lot outas want back. As I mentioned the top of the show if you’re interested in taking your business to the next level in 2018 and really accelerating your growth. I would invite you to check out and reserve your spot. One of the 30 spots in my brand new exclusive 12 month group coaching program the accelerator again that link is Rick Mulready dot com forward slash accelerator also link that up in the Schoenaerts for today’s episode. Andy Shonna its link is Rick Mulready dot com for its last 1 6 9.

[00:48:22] Thank you so much my friends for hanging out it means they really appreciate you taking the time to do that. I’ve got another awesome episode coming your way in Episode number one hundred and seventy. So until then keep testing your paid traffic to find out what works for you and your business and then do more of what’s working and I’ll see you in the next episode.