Stories about Scaling Remarkable Marketing Programs and Managing Expectations

Eric Eden: 0:59

Welcome to today's episode. Our guest today is Jeff Barnes. He is a former Navy Submariner. He is an entrepreneur. He's helped companies raise over a billion dollars. A best-selling author. Welcome to the show, Jeff.

Jeff Barnes: 1:15

Thank you so much for having me here, Eric. I appreciate it.

Eric Eden: 1:18

Absolutely Crucially. You've done an amazing amount of marketing over the years. Why don't you share a little bit with us about some of the things that you're currently working on?

Jeff Barnes: 1:30

Yeah, absolutely. I still help a number of companies that are in that seat to Series A Capital Raising Stage, raise money and, believe it or not, that is all sales and marketing. You have to know the laws, of course, but beyond that, still sales and marketing. So there's a lot that we do there and I run a marketing agency where we do a lot of marketing strategy for clients to help them with their overall marketing. I don't do a lot of the implementation anymore because that gets to be quite neourdeal, especially with all the different technologies out there that we need to use. But we do guide them through that process and have a number of great people on our team that help out with a lot of the technology, from everything from funnels and websites and automation, the workflow, crms, you name it. But yeah, we focus a lot on helping companies scale up. That's our main niche.

Eric Eden: 2:18

Awesome. So why don't you tell us a story about some of the best marketing that you've done with your agency?

Jeff Barnes: 2:26

Sure, just send the stage here. So I've done marketing with everything from Fortune 500 companies down to early stage startups. The one that I had the most fun with was when we took an e-commerce company that we started from 0 to 17 million in sales in about eight months and this is before all of the iOS updates and a lot of different things were happening with Facebook. At that time it was really easy to drive by media drive traffic and literally the very first month of opening the store we were doing drop shipping. We were able to drive $1 million revenue profitably and our cost per acquisition was 50% of whatever the sale price was. So we were spending 50% of every dollar on marketing and still running a profitable business. That was actually a lot of fun. We went from 0 to 1 million in the first month about 1 million and a half. The second month, 2 million, and we were on our way to scaling up to $3 million a month. But unfortunately we actually outsold our supplier, our manufacturer, turns out you can actually be too good at marketing in sales and we had 22 Shopify stores at that point, all running Shopify Plus, and we were using Clavio. We were doing everything you could possibly imagine from a media buying standpoint really well. But it turns out that when you do that and you ignore the other aspect, which is the service delivery, the fulfillment side can go wrong really quickly. So that was one of our biggest lessons learned.

Eric Eden: 3:50

Yeah, marketing really can't solve the service delivery. You can sell it out, but you can't really solve it if you run out of product. It's like that country song there's no such thing as too much fun. There is probably such a thing as too much marketing if you sell it out.

Jeff Barnes: 4:05

That's a good problem. That's a good problem if you do an end with that one.

Eric Eden: 4:09

There's worse problems to have, I think. What other stories can you share from companies that you've worked with helped raise money that your product.

Jeff Barnes: 4:20

One of the things that we do, like I said, we focus on the strategy. When you're working with an early-stage company, especially something that's doing what's called a blue ocean strategy, they're going after a market that's untapped, no-interred of it. They don't understand it. It is really challenging to get that product to market. A lot of entrepreneurs who have spent years thinking about developing and building their product or their technology don't understand why people won't just buy it. It doesn't make any sense to them. One of these companies I worked with had this incredible technology that used a science that you could equate to it essentially like red light therapy, but it was much more intricate than that. When they developed this product, they brought us on and we had less than about four weeks until they were going live with the launch. They said, okay, we need to make sure everything is working properly and then we just need to launch this thing because we're going to sell out of all 4,000 units that we have on hand in the first 30 days. Anybody who's ever stood up an entire e-commerce site and business knows that that's not a reality. They brought us in for damage control because people had been in there before and did not do a great job. Given what we knew about everything. We knew that this was like a Herculean effort. We did launch it, we had a pretty good month, but we didn't sell 4,000 units. In fact, we were struggling to sell any of these products because of the fact that it was such a new technology. Didn't matter that we had great testimonials, that we had people endorsing the product and endorsing the technology and these really world-famous scientists and PhDs behind it. None of that mattered because in marketing, especially when you're talking about a relatively new or obscure product or technology, no one cares about features. Very few people believe it or not care about benefits. What they actually want are results. Everybody's just buying a future version of themselves that's better than where they are today, whether that's sales, whether they're buying and they want to buy somebody because they need advice. They don't need the advice. Nothing advice they care about. They care about short-cutting their path to success. We spent a year going through and really trying to work through that entire process and make sure that the marketing reflected how great the product was. It came down to story selling. It came down to, of course, branding making sure we were going after the right people. We had to overhaul the entire brand. We were still struggling. We were struggling mostly because we were limited on budget and a lot of folks didn't think that this direct-to-consumer e-commerce play was going to work properly and they hadn't seen it work. There's a lot of pushback within the company. Long story short, we finally got to the point where we were like all right, forget it, I'm a CMO, I'm taking over, we're just doing what I want. We can't come hell or high water. We're going to make this happen. Leading up in what ended up happening was we implemented a robust affiliate marketing program. We got our affiliates on board. We started training the affiliates better and teaching them what to do and how to do it, using the technology to make sure they knew what they were doing. We got affiliates going. We started doing a lot more content marketing. We were putting blogs out and press releases and things like that. Then we went into, of course, the media buying side. We're going to drive traffic, but no, that would work if you didn't have a really great follow-up sequence and a customer re-engagement campaign or an abandoned car campaign, things like that. We implemented all of these different steps. Three months in a row, we doubled sales. The problem was that we didn't get to the point where we got to six figures in revenue in one month. We didn't quite get to company-wide break-even. So the management said we need to pull back. And we're just like blowing away, like why would we pull it back? We were hitting a seven to 10 X ROAS return on ad spend and our affiliates were crushing it and our fulfillment team was just like this is amazing, we're finally getting all these things out the door and we're not getting customer complaints. And everything was working at that point. But unfortunately the company said, hey, we still need to pull back because we're just not hitting the numbers we want and it's just not working. And when you're the marketer and you're the person who's responsible for sales which every marketer needs to think that way, I'm responsible for revenue Then you get a little bit upset and frustrated about that whole process because you spend so much time and we double, then we double and going into the holiday season last year, we were actually able to like hit that six figures in revenue. For what's really important is driving sales and profitability, and that's the approach that I take whenever I'm looking at marketing, and not all CEOs and people in charge really agree with that.

Eric Eden: 9:00

So was it an issue of expectation management to some degree, that people's expectations are just unrealistic? Oh yeah, that was the every client I've ever had.

Jeff Barnes: 9:09

You have to level some expectations right, because most people think that their product is so great that people, if they see it, they'll buy it, and they don't understand price elasticity. They don't understand customer journey management. They don't understand that it can take one person at one segment of your market might buy based off of this one feature, but there are only one segment and the other people need this feature, they need this benefit. So there's a million different reasons why a product may fail, but that doesn't really matter. If somebody says, no, I just want to sell it and I know that everybody's going to buy it, that's it becomes a little bit of an unrealistic expectation to me when people think that everyone's just going to buy their stuff Because that's just not the way it works.

Eric Eden: 9:55

Yeah, it's pretty remarkable doubling the amount of money that's being spent on the sales every month and then the outcome is that's still not enough. I've worked for companies that are venture capital or PE backed where they wanted a hundred percent growth per year in revenue and we achieved something amazing like 75% year of year growth. And then, because we didn't get to 100%, it was like you failed. I was like how is growing 75% fail here? Yeah, it's a framing problem and an expectation management problem when people look at At marketing as an investment, but the expectations are too higher.

Jeff Barnes: 10:33

Yeah, and you're right. Managing expectations is really challenging with a lot of people because, especially when you're venture back, you gotta think about it from a standpoint of the investors. And then the C-suite or the founders Say you put $10 billion into a company and in order for that VC to get their money back, that 10 billion needs to turn into 100 million. How do you do that? You increase the value of your company. The only way you increase the value of your company is by implementing a lot of systems, a lot of processes and seeing that year over year growth. And VCs look at it like if I want to achieve the ROI or the internal rate of return that I'm setting for myself, which sometimes is around 20%, then they need to have an exit, most of the time within five years. Some of them will look longer and say 10 years, but they're looking for that return on investment relatively quickly. So in order for them to get that, they're always shooting for a 10x or greater return within a few years to meet that IRR requirement, because they know that a vast majority of their portfolio is going to fail and it's not going to get that return. And so how do you increase the valuation? You increase top line and bottom line right and then you streamline everything in between. So there is a very big issue when it comes to managing expectations. But in the long run, if you understand the direction that you can take a company, then as a marketer, your job is to really implement the systems that are going to drive that growth, and there will be a million challenges that will come up in between. Right, somebody might say, I like the color blue and I like the color black. And no, this isn't the right font. All of a sudden, you're stuck in this limbo where you're waiting for people to have an ego competition. Meanwhile you haven't updated your sales process, you haven't updated your email marketing, you haven't done a good job of doing the media buying because you're waiting on decision makers and everybody's just like having this little infighting and that's costing you sales. So, yeah, you hit 75% revenue. Guess what? We're probably going to down 120% if you guys wanted to screw it around for the last 30 days trying to figure out which campaign we wanted to go after. But those are some of the expectations you have to manage when you're in a scaling company and sometimes somebody has to put their foot down and say we are doing this and we're done doing decision by committee and a lot of people are really afraid to do that because you can hang yourself on that one.

Eric Eden: 12:44

Yeah, absolutely. You mentioned earlier that in the moment we're in, right now, it's, on one hand, it's the golden age of marketing technology. There's thousands of SaaS solutions and tools and systems out there that you can leverage. On the other hand, there's a lot of changing dynamics in the markets, the way a lot of channels work. A lot of the digital marketing channels have evolved. You mentioned the iOS update. I think email marketing is evolving with deliverability. What advice, having a lot of experience both on the helping companies raise capital so on the investment side and on the side of being a marketer, when you can weigh both of those things together? Talking about expectations management, what is the best advice that you can give marketers in today's market to be successful, If you?

Jeff Barnes: 13:36

don't have a crystal ball that you just polish up and look into and figure out where everything is going. The most important thing I would say is stick to strategy versus tactics. Strategy is our mission is to achieve excellent profitability or growth or whatever. That's great. Strategy is what are we looking to achieve and what are the big picture steps that we're going to take to get there? Strategy would be we're constantly trying to drive new leads in the top of the funnel. We're constantly trying to educate those leads so they get the point where they're ready to make a buying decision. We are constantly working on our offers, tweaking our offers and making sure that our offers match what the market is looking for. The marketer's job is to look at the strategy. The tactics are going to change every single year. You might say, okay, this year email marketing is great. Then, all of a sudden, every email service provider does like what they did earlier this year and they start slapping down and saying everybody's going to go into promotional inbox or into spam or, like we've even seen, blocking it so that it doesn't even get into any Yahoo or AOL account at all. Your emails are never even seen, let alone showing up in spam. Those are the types of things that marketers need to be aware of is that you need to focus on strategy. The strategy should always be you're constantly looking at awareness, trying to get more reach out there so more people hear about you, because if they don't hear about you, then or your clients will never even know to make a purchasing decision. You're always looking at ways to get traffic, try to get leads, trying to elevate those leads to a point where they're ready to make a buying decision, and then making the buying process simple. Those are big picture strategies and then the tactics can change on a regular basis.

Eric Eden: 15:22

Would you say, given that, if the channels and the tactics within those channels are always evolving, wouldn't one of the biggest things be that people have to really stay curious about what's working on an ongoing basis?

Jeff Barnes: 15:38

I'd say if you're not curious and you're not paying attention to what's happening in the world around you, then you are just setting yourself up for failure, absolutely.

Eric Eden: 15:49

All right, Jeff, you also have a couple of books. Tell us about the books that you've done.

Jeff Barnes: 15:54

Yeah, so the first one I wrote was the Ultimate Guide to Self-Directed Investing and Retirement Planning. I wrote that back in 2012, after the financial crisis and people had lost a lot of money in their 401Ks and IRAs and we wanted to show them how they could take that money out. They could self-direct it and they could put it into private equity, they could buy businesses, they could invest in real estate. We did that. Then my other book, all Hands on Deck, was a birth, because people say listen, how do you use your military career to help these businesses grow? What does it you guys do? It's a book written about my summer eight days and how those lessons and strategies and thinking can apply to business growth as well.

Eric Eden: 16:34

That's great. Everyone should check those out. I'm going to link to Jeff's website so you can learn more about the strategies that he shared today. Check out his books. Thanks for being with us today, Jeff, and sharing these things. Encourage everyone to share this episode with your friends so they can hear these great stories too. Thanks so much for being with us today, Jeff, and sharing these insights.