How Are All These 20-Something Millionaires?

Nightclub vs Chapel Marketing

It happened with little fanfare, prognostication, or justification. Yet, there I was, in a local hotel conference room and they were all around me. Men and women (I want to say boys and girls, but that might be condescending), mostly half my age, and millionaires. Not inherited, not lucky to get equity in some Silicon Valley stock, or MIT whiz kids who came up with a solution to aging.

I thought I had done well for myself to even be flying to Austin, TX, to be in attendance. The business I had started less than two years earlier, had taken off, and I was making more in a month than many full year as an employee. In fact, just to be invited to this congregation, you had to meet some fairly lofty income standards. Then, I started meeting the others coming through the doors.

There was the 26 year old, who had to step out and take a call from a 9 figure fund manager. The fund had bought one of his companies and part of the deal, was he had to consult with them when needed. It turned out that need for advice was more than you would think a group of experienced millionaires would seek advice from any young man. No wonder, he was driving a car more expensive than my first house. Then, there was the young married couple, who less than a year earlier, had been struggling to make ends meet, while living in a small Los Angeles apartment. Later, I got to see pictures of the custom made car, the husband had ordered from the dealer.

However, my most surprising and awakening encounter, came with a 22 and 24 year old pair of partners sitting next to me. Their company had just passed the million dollar revenue mark in under a year. That was quite impressive, but NOT what got my attention. It turns out that this gathering, was the first time these two partners had even met face to face! One lived in Thailand, while the other in Canada. The fact that they had no need to even be on the same continent to form a 7 figure business in under a year was mind boggling to someone like me.

Their company? A small manufacturer of natural health supplements, called Nested Naturals

WHAT IS REALLY GOING ON?

If you know me, my mind races to reverse engineer how things are created. I was the kid tearing apart the digital alarm clock, hacking the cable box to get free HBO, and spending hours coding the Commodore 64 computer to produce flying shapes on the screen.

At the conclusion of that three day meeting, I became determined to figure out what allowed all these kids (there I said it) to become so wildly successful. Yes, all the businesses were marketed and sold online and required no traditional retail or wholesale setups, but there was something more. After wrestling with what common trait was shared, I figured it out. It was not just marketing online, it was not even how they marketed online. It was WHO they marketed to online. That was the common trait.

WHAT THIS MEANS FOR BUSINESS TODAY

There is no reason to spend a single dime of advertising that is not specifically created, distributed, and consumed by your ideal customer. That is how these companies, including mine, were able to become so successful, so quickly. Yet, I see today there are many business owners still trying to use what I call the Nightclub method of marketing online. Nightclub marketing,  would be the equivalent of getting all dressed up and going to a club, with the intent of just propositioning everyone until they got a hookup for the night. Pardon the crudeness of that comment, but I think it is apt to describe how many are approaching online marketing. They throw something on Facebook, Twitter, Adwords, Youtube, blogs, Pinterest, SEO, wherever. It’s the belief, that you have to advertise everywhere.

While I can see this being rationalized, that is not how the fastest growing and most profitable businesses are approaching online marketing. Just because there are eyeballs everywhere, does not make all eyeballs equal to put your message in front of them.

I was talking to a prospective marketing client who was baffled how his video got so many views, but resulted in no new clients. He is not alone in this confusion. Take a look at the chart for the amount of ads versus engagement according to SJ Insights:


The thought used to be all about visibility. So people would buy billboard space, local radio spots, yellow pages, direct mail, et al. The same strategy online is actually a waste of money. It is the equivalent of being that guy or girl running from person to person in the nightclub trying to get someone to accept you for the night. The law of averages will say that someone will go home with you, but is that the way to run a business?

WHAT ABOUT ADWORDS?

It is just TOO expensive and wastes money. Period.

Adwords was my first ever foray into marketing online back in 2007. I began by advertising as an affiliate (I got paid for leads converted) for a company that sold diet supplements. At that time, I was able to get clicks back then for under a $1. This allowed me to make a profit for the manufacturing company and net myself about $1500 per month in commissions. Not bad, because I was working full-time at a chemical distribution company. This was just some side money I made.

Now, that Adwords has become the first choice for so many local companies, the prices have risen accordingly. As an example, here are some very typical local search phrases and the suggested bid provided by Google. Google recommends this bid for every click, in order for your ad to be seen.

These are prices we must budget per click.

It is likely someone searching for a roofing company is going to be doing research before deciding on one to choose. They are likely to click multiple links during this research. Can you imagine paying $51 just for a non-converting click? It could easily cost thousands of dollars per month in wasted ad spend. If a top roofer got say five clicks per day, that would be $255 based on Google’s projections.

A great conversion rate from Adwords is 3%. Let’s say the ad converted at 5%, which would be incredible. That means that 95% of the $255 is a written off as a loss. That would be $242.25 each day as wasted ad spend on people not really interested in making a purchase.

Over a 30 day period, that is $7,267.50 in ad spend that is wasted! Even on the lowest estimate, the chiropractor waste would be about $1,238.

Even worse, we all know that there are many clicks that are accidentally hit on phones. You still have to pay for those too.

Yet, people accept these types of advertising losses to be part of the normal cost of doing business. Only if you are acting like the nightclub marketer should this be accepted.

THE BETTER WAY

Sure, there are people who are fine with the nightclub method. They are typically young and want little in the way of long lasting relationships. But, if you are a business owner, the last thing you want is to scramble all the time to get a new client. So alluding back to the nightclub, just because someone tells you there is a lot of attention there does not equate with being successful. You can be at all the popular social media sites and still not make money.

A business owner is looking for a long term meaningful relationship, so there is not the constant frenzy found at a nightclub or the latest and greatest social media site.

This is all about being able to focus on the EXACT type of person you want. If a person wants to get married, perhaps raise a family, and grow old together, a nightclub mentality will not do. You need a focus on the type of person you want to be with forever. This will lead to a chapel where you commit to one another. The purpose is to provide stability and assurance, the same as a marriage or long term relationship.

SO HOW DO YOU DO IT?

The first thing you need to do is to know what characteristics define your ideal client. You need to write down all the things that you want, just like many of us do when ready to look for a life partner.

Write them down.

Male or Female?

Average Income Range

Married or Single

Age Range

Likes (Fitness, hunter, country music, TV shows, books, etc)

Who Has Their Attention Now – Competition

 

You can’t do this with mindless tweets, Adwords, snaps, or even SEO.

The one place you can basically take the above list verbatim, and paste into target your ideal customer, patients, and clients, is using Facebook’s Ad Manager.

Here is an example of what this can look like using Facebook targeting:

You simply cannot do this type of targeting, the type that spends your ad money ONLY to your best prospects, on any other site right now. Even if you do SEO, which is meant to bring your site to the top of searches on Google, you won’t get this ability. SEO is expensive to have done right. It takes literally hundreds of hours of continually programming a website to be shown at top of a limited number of search phrases. Then, whenever Google changes what SEO qualities are more important, it requires starting all over.

All other social media platforms have some semblance of ‘targeting’, but not to the extent of Facebook’s.

There is no need to spread out your advertising dollars. With over a billion users to reach, a local, national, or even world wide company can simply plug in the desired characteristics and get seen by those most likely to want what you do, a long term meaningful relationship.

In fact, I believe it is detrimental to scatter your ad budget, if your goal is to focus on getting only your ideal clients. The more time you spend scanning the nightclub scene, the more likely another savvy business owner is taking away your long term clients. You simply cannot afford to be everywhere, not because it costs too much money, but because even if successful, you will end up with less than desirable relationships. Great if you are going for that, but not great if you are trying to establish a business. It is ironic that I learned this from studying the young 20-somethings who know this better than the so called more experienced. It is time we all started following their lead and head to the chapel.

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