Joe Troyer: Next up is your demo, or your offer. What I mean by this is you could also say consult, or strategy session. These things to me, guys, are all the same thing. It’s just what’s the mechanism that you have, and that you use that’s a process of taking somebody from warm or cold, and turning them into a sale.
Joe Troyer: Way too many people in the agency space take their business for granted, and are simply operating out of like, “I’ll take any job that gets referred to me.” And, they’re being lazy with their marketing, right? Whatever falls in their lap, they’ll take. Ultimately I think that if you’re in that position, short term it might be okay. But, long term you are really, really losing so much money. It’s not even funny.
Joe Troyer: What I mean by that is if you’re always doing one off jobs, even if you do the same fulfillment but it’s one off, meaning different verticals, it’s going to be very hard to have a 75% plus margin. Unless you’re paying yourself to do the work, like five dollars an hour. Because every time, let’s say you’re doing SEO. Every time you’ve got keyword research to do. Every time you’ve got all the city research to do. Every time you’ve got to figure out what topics to write about. Every time you have to figure it out for the first time. Stop fucking doing it. Please, for the love of God. That is the most horrible, awful work ever, that you get no return from.
Joe Troyer: Unless you’re okay with paying yourself three dollars an hour, like knock it the hell off. Stand up for yourself, and accept better. Demand better. Stay in your freaking lane, all right? And, focus on having a system, right? A tactic, a strategy to take people from cold, to turn them to warm, and to get them to buy. Hey, if you do that and just stay in your lane in terms of what it is that you’re offering and who you serve, you will have a business that has a great profit margin, okay? Not only that, but you will have a business that one day that you can actually sell and step away from, versus you just having to run this thing forever.
Joe Troyer: Guys, you should be scared of having to run a business forever. You should be scared. What is the exit strategy? I’ll tell you that for all the baby boomers that are looking at getting out of a lot of businesses right now, and even the generation before them that are getting out of businesses right now, what are their options? They don’t have shit for options. A lot of them are trying to sell their businesses right now, and I’ll tell you what’s happening. Jacks happening, they’re getting robbed. Their businesses are being taken from them for pennies on the dollar, because they’re next of kin, their kids don’t want their business. And, they haven’t ran their business like a business, they’ve treated it like a hobby, and so it’s worth quite literally pennies on the dollar.
Joe Troyer: Give me a nine if you guys are seeing this in the marketplace. It is ridiculous. For me, guys, this scares the shit out of me. I want to have an exit. I’ve got to be able to get out some day some time, and I’ve got to be moving towards that, and building towards that. If you’re not, I just … I’m going to smack you, make you think about it. Do you really want to be doing this forever? Yeah. Al says, “Nine, also with farmers who have children who don’t want to buy the farm.” Yeah. Somebody said, “Sign shop,” earlier.
Joe Troyer: When I was just in Ohio I stopped and saw this sign shop, and I was talking to this sign shop, and they got the same problem, right? They got kids, the kids don’t want to take over the business. He’s got a daughter, daughter or son. Daughter or son doesn’t want to take over the business. It’s a great business, but the guy that runs it is the owner/operator, and nothing happens without him. He’s involved, like he’s got employees and such, but the business wouldn’t run without him. The business is worth like nothing because of it.
Joe Troyer: For me, again guys, sorry for the tangent. But, a business is a list of systems and processes, and the only way that I believe it’s a business and not just a hobby, right? Is if it can run without you. Step away for a week, step away for two weeks, right? And, you should come back and the business is stronger than when you left.
Joe Troyer: All right, so in this demo/offer/consult or strategy session. In this mechanism, what we want to do again, is be able to take somebody from cold, and talk to them about a promise, or a result, okay? Or, from a foot in the door, into this mechanism, right? This is the mechanism that converts prospects. So we have two different angles to get people into this to sell them. Without this, a sale doesn’t happen, right? We either have the foot in the door, okay? Or, we have basically direct pitch to a strategy session or a consult, right? Direct pitch into that call, okay? Or, by offering a foot in the door.
Joe Troyer: Those are the only two ways that these things happen, okay? This process, no matter if you got it from pitching it directly like head on, okay? Like this way, right? Or you got it from running a foot in the door offer, this should be 95% the same. Again, it needs to be something that is predictable, and that is proven to take customers from being cold or warm, to a close. If you’re doing a good job folks, I would guess that 75 … based on my experience, and from helping people implement this as well, that 75% of your sales are going to come from one call closes. Either that, or you’re doing it wrong, okay?
Joe Troyer: This is a metric that you should be looking at, okay? And, you should be closing, I believe … that’s the wrong. You should be closing roughly one in four, to one in five of your prospects. So, anywhere from 20 to 25% of the people that you bring into this call, and again I don’t care what you want to call it. It’s going to depend upon how you set this call up. It can be a demo, it can be an offer, it can be a consult, it can be a strategy session, okay? Understand that you can change the lingo. It can be an action plan, okay? But you should be converting anywhere from 20%, to 25%, okay? That should be the metrics that you’re looking for. It may not start there, okay? But that’s kind of the threshold that you should be looking for, okay?
Joe Troyer: This becomes really simple folks. There’s been a lot of experts that have talked about you don’t really have a business until you can pay X amount of dollars, okay? To get a sale. And so, really what we want to do long term, and what we should be thinking about strategically is, how much money, or how much time does it take to get somebody either on a foot in the door product, or on directly on a strategy session. Then, based upon that, how many people do we need to stick through this funnel, right? To get a sale out the other side. If it’s one in five, right? Then we need five. If it takes 10 bucks, right? To get somebody on a strategy session. It’s going to cost 50 bucks to get a sale. Okay?
Joe Troyer: I can tell you guys in more high ticket, more mainstream type of services, people are paying anywhere from 100, to 500 bucks to get a paid strategy session, right? Let’s break that down. If they’re paying at the high end, $500. Folks, that’s a lot. In my businesses I’ve never paid anywhere near fucking $500. Most of the time I’ve broken even on the front end, or I’ve made money, okay? But let’s think this through. If you spend 500 bucks to get a prospect to either be on a foot in the door call, or a strategy session call, and it takes five of those to get a deal that then is worth $2,000 a month. You are trading, you are trading $2,500, for $2,000 a month. The only question should become, how many of these do you want each and every month? Trust me when I say, you have a really big fucking problem if you can’t make that math work, or you aren’t willing to go in the hole for one month, and can’t finance that.
Joe Troyer: Jim Thorpe says, “Brilliant.” Chris Vye says, “What sort of multiples are you seeing when selling an agency? Thank you Joe, I have to head to a meeting, glad you enjoyed it out.” No problem. Okay, so in terms of multiples, multiples really depends, man. That’s a great question. Try to get this to open in a new tab here, or in a new page. Multiple’s going to depend on if you really have a business or not, right? At the end of the day, the multiple is really going to depend on a couple things, in my opinion. Let’s talk about this. Multiple’s really going to depend. Have you niched down, okay? Do you have a sales process, where you can stick five dollars in like we just talked about, and pull out $10 out the other side?
Joe Troyer: How important are you, the operator, right? Or, not the operator, the business owner, the entrepreneur. How important are you? The less important that you are, the more that you can just walk away and hand it to somebody else to run the bigger multiple that you’re going to get. The other thing that you have to think about though here, is who’s going to buy you, okay?
Joe Troyer: This really, is going to depend on the niche that you’re in, but it’s also going to depend on the revenue that you’re at, okay? What I mean by that is, you’re going to get involved in industry buyers who are buying simply because they’re in the industry, and they have other products or services to sell to that exact same industry, so bolting on a digital marketing company to a supply company, or somebody that sells software to that industry, right? They’re already in there, it makes sense, right? They can probably double the average customer value pretty quickly, or vise versa on either side. They can make huge incremental gains, okay?
Joe Troyer: But then, the other type of person that you’re going to see basically buying is like the Sally, or the Joe. And really, they’re buying, right? The average Joe, the average Sally or the average Joe. They’re buying because they want a business, right? To run. I would say the third are people that are doing huge wrap up type of deals, and they’re coming into an industry, and they’re gobbling up 10 like businesses that support each other, and they have obviously huge venture backed kind of backed companies, right? They have huge wallets.
Joe Troyer: Those are the three primary buyers that I see in the space. Anybody have any additions there? Does that make sense to everybody? Let me see. All right, cool. Here guys, your multiple is going to be crazy. Your multiple could be one times EBIDA, okay? Your multiple, right? That EBIDA could be, let’s say monthly, but let’s talk about yearly EBIDA, okay? It could be one, if you’ve done a really piss poor job like most agencies have, in all of these things, okay? Quite literally. That’s the scary thing that we’ve been talking about. If you make, let’s say if you take home half a million dollars a year, and let’s say that, that’s net and you only get one times. That’s half a million dollars, why would you ever sell that business? That’s the point. You’ve built a business that has no value.
Joe Troyer: This is happening, guys. Seriously, this is happening. In the market right now I see a lot of stuff at three times. If you’ve done a really good job you have IP, you’ve really taken yourself out of the business, I’m seeing stuff sell up to seven times. But, this is the mack daddy, and you’re going to have to work your tail off to get to that level, and to be frank it’s going to take longer probably, to sell at that, okay? It’s going to take probably a lot more effort to sell at that, versus three.
Joe Troyer: All right, so next up is, we’re still talking about the demo and the offer, okay? At the end of the day I think I want to give you guys a couple of takeaways on your demo, your offer, your strategy session is, you’ve got to understand that the goal of that call is to take somebody from where they’re at now, to where they want to go. We all have to understand that along the way, to get from where they are now to where they want to go, right? Or, their goal, is that there’s lots of things that they have to do.
Joe Troyer: Understand that all that you’re saying is that, “I can help you get there faster. I can accelerated this. I’ve been there, I’ve done that,” okay? If you can say that, right? Then do that. Your goal is to show them that you’re the gap. You can solve going from here to there, and doing it better and faster than they can.
Joe Troyer: At the end of the day way too many people that I speak with, and I look at their decks, I look at their pitches, they’re simply not doing that, right? They’re not showing them that there’s a void, that they have to do more than they’re doing right now to get to where they’re trying to go. If you don’t tell a prospect or show a prospect that there’s a gap that they have to fill to hit their goal, right? That, they’ve got five more things, they’ve got 10 more things that they need to hit and to hit well in order for them to hit their goal, and position yourself in the middle there to help them achieve that. I don’t even know why you’re getting on these calls.
Joe Troyer: If you’re selling SEO, the easy way to do that is to really talk about average customer value, right? And, to back out the system, right? How many customers then do you need, okay? Then, how many phone calls do you need, or web form submits do you need? Then, obviously we want to talk to them, or show them that, that’s possible, and how they can get there, and the time that it’s going to take to get there.
Joe Troyer: Now, we could do that by simply showing them case studies. We could do that by showing them the search volume, for example. But, the better that you can demonstrate this, the better. Makes sense, right? A big piece as well, that I see people not implementing is you got to back out the example ROI. When you do this and you back this all out, that’s great, and you’re getting the customer to see it. But, you need to think of this as an investment, because marketing is an investment, okay? What’s this investment going to yield? Folks, at the end of the day there is no better investment than local SEO and local advertising in terms of Google and Google search. There’s not, as long as you can simply get them results, okay?
Joe Troyer: Make sure that you break this down as an investment, okay? Because, they’re making money in their business, otherwise you shouldn’t be fucking talking to them. And, they’re doing something personally to invest in themselves. Why the hell shouldn’t they be investing in their business? You should be making this case, and you should be talking about the return on investment from SEO, and from what you’re doing, versus everything else. And, compare it to stocks and bonds, compare it to your 401K. Shit, compare it to real estate, compare it to any other vehicle that they want to compare it to, and you should be the undoubtable champ, or you need to go pick another freaking product to sell. Amen?
Joe Troyer: You should be able to without a doubt say that, “In X amount of months,” right? “The investment pays for itself.” I’ve listened to so many sales calls, people talking with pay per click prospects, SEO prospects, pay per call prospects, and they simply can’t answer the question, right? How long do I have to front this investment before it starts paying for itself? That is the most basic question ever. Be prepared, right?
Joe Troyer: Then, ultimately folks at the end of the day, you should be looking at how you can offer any type of risk reversal. Risk reversal comes in a lot of different ways. This could be a guarantee, this could simply be with SEO, like people want to see results and that you’re not going to stand around with your heads under your butt, not doing shit and getting paid, right? Everybody’s been burned in all of these industries that we’re targeting, so what do we want to do? We want to pull them in on a deal that makes sense to them, okay?
Joe Troyer: If you’re doing SEO for example, the big issue that you’re going to have is, it’s going to take a good 60 to 90 days to really show somebody what it is that you can do. To kind of prove yourself. You’re under the gun, but it also doesn’t take a year, okay? What I’ve done in SEO to kind of close that gap, and to help reverse the risk. I’m not saying that you need a money back guarantee, that’s not it, right? But, just help them reverse the risk, and pencil out this deal. They know that they need SEO, so what I’ve done in the past is I’ve given them a 90 day out.
Joe Troyer: I’ve done a 12 month contract, right? And, that 12 month contract auto renews every year too, unless they cancel, right? I get them thinking long term. But, in my pitch for SEO it’s simple. “Look Mr. Customer, I know you need to see results, and I know that you’ve probably been burned before. You’re probably paid somebody for months, and months, and months. Or, years, and years, and you’ve never seen shit in terms of a return on investment for traffic, and what they did. Here’s what I’m going to do, and here’s how I’m going to be different than everybody else.”
Joe Troyer: “My contract works like this. I really need 90 days to prove to you what i can do, and to put my money where my mouth is. So when you sign this contract today, what’s going to happen is you’re going to sign this 12 month contract, and it renews every year. I need to know I’ve got somebody long term. As long as I can show you, Mr. Business Owner, that this is going to pay for itself long term. Fair enough?” “Yep, fair enough.” “I need an out, or you need an out. I understand if I don’t do my job, is that fair?” “Yes, that’s fair.”
Joe Troyer: “So here’s what we’re going to do between day 75 and days 90, in our agreement you have the opportunity to cancel. I call this a 90 day out, so if you’re not happy with my results in 90 days, if I haven’t shown you that things are improving, and we are on the way to getting a return on investment, then I fully expect you to cancel.” We mitigate the risk. Guys, this took me from going month to month in my deals, right? Month to month, and having problems collecting payment in my first agency, right? To me getting people signing a 12 month contract that renews every year, right? Unless they cancel. Guys, cancellations are slim, right? It took me from getting paid very inconsistently, to 90% of the people that I brought into this deal, sticking around for at least a year.
Joe Troyer: Think about that for a second. At $2,000 a month, that goes for my average customer, value probably being let’s say 10 to $12,000, to being at least $24,000. I more than doubled my average customer value. Again, be creative when it comes to the guarantee, and when it comes to kind of the risk reversal. It doesn’t mean that you have to say, “If you sign on the dotted line and I don’t make you a million dollars in the next 30 days, I’ll refund all your money.” No, screw that. Or, a double money back guarantee. No, you don’t need to do that, okay? But, just think about risk reversal, okay? Think about how you can cut the risk from your prospects mind.
Joe Troyer: Let me check in here with you guys real quick. Good stuff. Yep, amen, that’s gold, that’s nice, on month 13 they can’t cancel until month 24. Yeah, so basically in your contract you give them like, “Hey, on month 13, in month 13 you can give me notice that you want to surrender, or you want to cancel the contract.” Right? “If not, it’s going to auto renew for another year.” Frankie says, “I always went month to month but this is pure gold.” Frankie, implement this, and if this doesn’t freaking double your business, I’ll give you a one day strategy session, and I’ll fly you out here if it doesn’t double your business. That’s how confident I am in it. This made all the difference in the world in my business and in my local agency.