Ep. 31 The Value of Investing in Your List(s) Today

 

 

Episode Summary:

You already have an email list, now it’s time to invest in building your list in other channels.

On this episode of the Messenger Mastermind podcast we discuss the value of building your lists in multiple channels, and why you need to think about your business the same way an investor does. We discuss the strategy and tactics behind how to build your Facebook Messenger, SMS and Push lists using programs you already have to grow your company value.

If you are responsible for your eCommerce company’s Acquisition or Retention efforts 

Let us know what you think below 👇👇.

Episode Highlights:

  1. 1:38:  What is Channel Diversity?
  2. 2:58:  Why you need to start farming vs. hunting
  3. 3:50:  How to think about your business like an investor
  4. 5:15:  The Trend to watch out for to be ahead of the game.
  5. 6:00:  The best way to grow your list on Facebook Messenger and SMS
  6. 8:00:  Think about the Lead first
  7. 12:59: The short and long impact of investing in these channels
  8. 14:00 Why you need to be prepared to lose money on your Acquisition.
  9. 16:00: The Tipping points in your lead acquisition process.

Resources Mentioned:

  1. The One Page Marketing Plan by Allan Dib (link)
  2. Email Platform- Klaviyo (link)
  3. Facebook Messenger Tool – Manychat (link)
  4. Push Notifications Tool – Pushowl (link)
  5. SMS Tool –  Postscript (link)

Episode Transcript:

 

Jeremy: Welcome to another week’s episode of The Messenger Mastermind Podcast. As always, I’m your host, Jeremy Horowitz joining my main credible co-hosts, Mark A. and Ben Vandal. How are y’all doing?

 

Mark: What’s up?

 

Ben: How’s it going, man?

 

Jeremy: Good. I know we’ve been kind of touching on this topic for the past couple weeks, but I think it’s time that we really dive deep and break it down for the people. We’re going to cover today channel diversity, what that means, what the value is to your business, and why if you’re not already focused on it, you really need to. Mark, I know that you are a big believer in channel diversity, and you’ve been talking about this for a couple weeks now. Do you want to just quickly break down what you think channel diversity is, how you see it, and why it’s so important to your business?

Mark: Absolutely. In recent episodes we’ve covered things like SMS text messages and push notifications. Obviously, week after week we cover Messenger marketing related things and most businesses out there, if you’re doing things well, probably have a good set-up for some email lead capture. That’s all great but tying it all together is often a point that’s difficult for many businesses. They might not be systematizing those processes to go and spread all of these channels for each individual person.  We know that this is something that is very valuable so we want to break it down for you and show you how to take a person from one channel and split among several different touches to get the most value out of each person.

 

Ben: Yeah, and kind of what we’re talking today here too is an overall mind shift on the way you think about your business. A lot of people when they’re starting out, get really hung up on return on ads spent and sales numbers and sales, sales, sales. They fail to see the investment they’re making building a list. We’re going to tell you the importance of it and how you can really capitalize on it in the future. 

 

Jeremy: One of my favorite analogies, Ben, to that point, is hunting versus farming. If you go back- I’m going to get a little philosophical for a second but I promise the point is going to be made- pretty much the dawn of humanity, we all started off as hunters and then eventually migrated to farming because it’s more stable, it’s more long-term, we can predict what we’re going to eat and it’s a classic marketing and sales analogy. Because when you’re in those early days, you’ve got to hunt for every single sale you can make, but really at the point in your business where you can really enjoy the long-term growth and profitability, when you can really pick your head up and look at the long-term, you’ll notice that farming is the way to go. You’ll probably never stop hunting, but it’s so important to invest in that foundational element of your business. Something important to keep in mind is if you ever want to raise money for your money, rather that’s debt or equity and investment or sell your business and exit, after you go through the PNL exercise, one of the first questions that you’re going to get is, “How big is your list?” You should also think about your business as you’re the biggest investor in your business today and outside of that, if anyone is listening who has raised VC money, even still you’ve put your blood, sweat, tears, years of your life in your business so why not think about it as an investor also? If they value that list, if that’s so important to them in that process, then it should be just as important to you because if you think about the long-term value of your business and how it’s going to net out for you personally, looking at those factors is just super important. The other piece is if one list is that important to them, now think about if you had two lists in Messenger, three lists, tack on SMS, four lists, add in push. It’s not just a long-term view either. Having all those channels today is really important to help you drive your business and make sales faster.

 

Mark: Exactly. If you are on the verge of or plan to exit a business, one of the most important things that are going to come up is the size of your email list and also the size of your past customer list. One thing that people have not quite picked up on yet, because this is newer, but to be ahead of the game: SMS text message list is becoming extremely valuable. People are starting to realize how much it can do for us. Obviously, Messenger and even push notification are just additional lists. They should be looked at the same way as email just because it’s something that you own, that you can value from over time.

 

Jeremy: Definitely. I think where a lot of people are at right now, especially Messenger and SMS specifically, is they probably don’t have the biggest list. But if they’re growing their email list, growing their pix lists on both Facebook and Google, what would you guys say is the best way to adopt the list growth mindset and start building out those lists?

 

Mark: There’s a few different ways to go about it but usually we would say that the best starting point for someone is to look at what they’re already doing well. If you already have a large email list, that’s usually a good place to start. If you are already spending a large amount of money on Facebook and Instagram customer acquisition ads, then that’s a good place to start. Let’s use email for an example because I would imagine that most people probably have focused a lot of energy in this place. If you’re collecting emails through an email lead capture when someone drops on your site, then hopefully you are also sending them through a welcome series in that email. If you’re not doing that, start doing that. Once you start doing that, add in an email or two in that welcome series that pushes people into other channels. For instance, Facebook Messenger. Maybe three days into a welcome series, you send out an email that offers a discount but in order to get that discount, they need to opt in through Facebook Messenger. It’s automated, it’s evergreen, and it’s taking one person’s touchpoint of email and moving them into Facebook Messenger. Same things can be done along the lines of SMS and even if you’re a little bit creative, you can also do it with push notifications.

 

Jeremy: I think we’ve also covered this pretty in-depth back in episode six with the two-for-one capture method on site. I think It’s important to also think through what’s the upfront cost, right? Especially if someone is in that- I know I’m always guilty of this- the hunting sell, sell, sell mode. You don’t want to put any single step in front of a potential customer to get them to buy. There’s a concept of don’t even capture the email because they may not purchase, and any click is a bad thing. What do guys typically find when you do make those offers and put those lead-capture moments in that shopping experience?

 

Ben: I think one great thing and one benefit to thinking about the lead first is that you have a way to follow up with the customer. Capturing an email lead, capturing a Messenger lead, capturing a SMS lead allows you the ability to run an abandoned cart to that same person or follow up with them in the future. Maybe the initial offer wasn’t something that the customer was interested in but now you have a touchpoint that you can go back to them with a different offer or maybe even the same offer after a certain amount of time, and now they’re ready to pull the plug.

 

Mark: Right. Going for the sale definitely make sense at times but sometimes someone is not ready to purchase and if that’s the case, that’s the perfect time to try to move them into other channels because if they have already come into our system, and they have shown some intent, then we know that they’re more qualified than someone who is just completely cold off the street. If they’re not quite ready to buy at that time, they’re still qualified so take that opportunity to move them into different places, to have your touchpoints when you have the correct offer for them when they’re ready for it. 

 

Ben: There’s a reason why Google and Facebook in their paid advertisement use a default window of thirty days. Not every customer is ready to see something and buy it right off the bat. They have multiple touchpoints through paid advertisements, so this is a way for you to grab the lead, own the channel, and control the message to your customer. 

 

Jeremy: That’s such a great point and that always reminds me of this chart from the One-Page Marketing Plan by Allan Dib and I wish everyone could see me right now because I’ve got my hands in pie chart. There’s 3% of your customer base is ready to buy today and is going to purchase. Seven percent of the customer base is ready to buy but is not going to buy today. Thirty percent is interested but needs more information before they’re willing to buy and then, the other 30% are not currently interested. The other 30% wouldn’t take it if it was free. What I always find really interesting is that when you focus on that first 3%, that usually graphs pretty well to a standard e-commerce conversion rate. When you start focusing on- just as you guys mentioned- the 7% that are almost ready to buy and the 30% that are interested, that’s like a 1200% increase. We’re looking at 3% versus 37% of your sales opportunity which I would much rather be swinging at more baseballs than fewer. That’s also an important point of that much bigger of an audience isn’t going to want to hear the same thing from you in the same place. What I found, especially a lot of the programs I’ve built in the past, is that not everyone signs up for email or not everyone wants to follow you on Instagram. Not everyone wants to sign up for push notifications. There are pockets within the customer base that do. There will be some people that sign up for a couple, but I think it’s really important to keep in mind that there are different divisions of how to get in contact with your customer. Whereas some companies would be super social-focused and most of the traffic will come from Facebook and Instagram and some companies will be super search-focused and everyone will be coming from Google. I think the important thing is once they hit the site, giving them that optionality without overwhelming them that, “Hey, you may get a ton of emails. Maybe you want us to text you” or “Maybe you feel uncomfortable with the company texting you, maybe you want to be in Messenger.” I think once you get that first contact info, and correct me if I’m wrong here, but I think it’s also much more likely that you’re going to capture that second, third, and fourth contact info from a customer also. 

 

Ben: Yeah, I absolutely agree. Those are the type of people that you want on those lists. People that want to hear from you and want to hear from you in different ways, those are the people you want on your list. Just to backtrack for a second, I think I heard Ryan Dice explain this great on another business podcast. It’s easy for people to get fixated on they created a great funnel and people are going to come through the site, they’re going to land on the landing page, they’re going to get this email and then they’re going to make a sale. It’s never like that. Not everyone is going to do what you want them to do. If you have multiple touchpoints, your funnel can turn into a square. It can turn into a circle. It can turn into a triangle. They bounce around at different touchpoints and make the sale when their ready to make it, rather than the way that you drew on a chalkboard going into the plan.

 

Jeremy: I think the important part of that analogy is that they’re still playing within your shape and not going to someone else’s. How do you guys view the investments in these channels? Email is a good amount, which is an advantage by itself. Hopefully, over the past year we’ve been convincing people that Messenger is worth it. What’s the short and long-term on return on investing in all these channels?

 

Mark: The value in this is everything. It becomes more valuable when you consider the fact that this is a goldmine for repeat customers. If you’re listening to this and you’re saying, “I’m a one of product. I don’t have repeat customers.”

 

Jeremy: Challenge.

 

Mark: That’s something that needs to be addressed on your end because that should be major focus right there. You should have additional offers even if it’s only one or two because then when you build out these channels at almost no cost to you, all you’re doing is having a way to sell them an additional product without having any additional cost of acquiring a new customer. When you ask how valuable are these other channels, are these other lists? They’re really everything because the cost of customer acquisition is only going higher. It’s only going to squeeze your margin further. There will be a time in the future where you will have zero margin, you will likely take a loss on acquiring a new customer. So, having these lists, are where you make the money on the back end to justify the fact that you probably lost money on the original acquisition.

 

Ben: Going back to that paradigm shift that I was talking about, you might have a boss who’s looking at your ad spend and saying, “What did we get for the money that we spent?” or maybe you’re looking in the mirror and saying, “What am I getting for the money I’m spending on Facebook?” Not to just go directly to products sold, but if you broke it down as to ‘I netted this many email addresses, this many Messenger subscribers, got this many phone numbers, I pixeled this many people on my site so I can re-target them’ it starts to itemize that list and you go down and break it down by the pennies. You can see that the ad spend that you did, though you didn’t get the sales that you wanted, it wasn’t a waste. You used it to get your name out there and now you just have to think of re-structuring your offer in a different way, in a different channel, in a different message, to make somebody take advantage of it.

 

Jeremy: The messaging through these channels is so cheap that I would personally rather take those multiple stabs at finding the right offer in a channel that costs me maybe ten cents on the most expensive side per message versus channels that cost me a couple of bucks to potentially ten to twenty dollars per message sent. The opportunity cost there is so much lower that you could send four or five emails and it might until that fourth of fifth email to convince someone to buy versus hitting someone four to five times on Facebook. Your costs are just exponentially higher so the faster you can them into that cheaper channel, one: the lower your risk is of having those extremely high costs that Mark was talking about and two: you have an opportunity to build a relationship with that potential customer. At the end of the day, that’s the most important piece.

 

Ben: I think the best I can explain this is the book Malcolm Gladwell wrote called The Tipping Point where eventually you reach a certain point where you have so many leads that it’s easier to get leads than it is to not get leads. The way I picture it is like if you won the lottery and you put a bunch of money in an investment account. Pretty soon you’re making so much off the interest that you can’t even spend it and it’s just continuously making interest. That’s what it is when you gather leads. It’s so easy to capitalize on the leads that you have, then it is to pay for paid acquisition. 

Jeremy: I think that’s a great point and then as you hit that tipping point, then you can just keep throwing as much money at the process as possible to keep growing and then we all hit that dream state where we turn into the next unicorn that everyone’s going to love and is a huge successful business. I think that is a very far off dream and the real takeaway from today and the real value that you can start driving for your business tomorrow, to get on to that track as soon as possible, or whatever track you want to determine success to be, is really start thinking about your business from an investment standpoint and an investor’s standpoint today. Driving sales- we’re not going to sit here and say that’s not important- but while doing that, really start to think about how you build that list, how you start to bring in those people that might take a little bit longer to convert, and aren’t ready to convert as soon as you market to them. Especially start building that opportunity in cheaper channels. The economics probably haven’t worked out in the past because acquisition in those channels that you don’t own is so much more expensive that your own channels will give you a great opportunity to figure out the messaging, figure out the offer, and give yourself more time and the other person more time to really develop that relationship to become a great customer. The great part about that is once you get that really, really well optimized you already have the person’s contact information. They already bought from you. You’ve already established a relationship and thinking about that, like your customer was your friend, now you can just continue to use the contact information that they willingly gave you to continue to drive that relationship and more sales from them which should eventually build to be that huge, successful, profitable business that you’ve been looking to build.