The 14% Conversion Boost That Most Companies Miss

0:00Dude, I was reading an article by Stripe that most people miss. did you know when you integrate Klarna or a buy now pay later solution the average conversion lift according to Stripe is 14 are people not adding that i thought that's default now i thought so too but most people don't add it literally majority of the people who sell products online do not have buy now pay later that's horrible 14 yeah that's i haven't done a one-to-one comparison yeah um we're starting to we're now starting to test it in b2b because everyone does buy now pay later for b to c it's actually very rare to see it in b2b who does it for b2b we're starting to test it out oh you guys are just adding it yourself uh-huh wow so who's funding it what do you mean who's i mean okay so buy now pay later you have like a firm or you have clarna right like what's the so how would you do it for you you still do it yeah okay wow okay all right and uh we haven't seen any results yet that are crazy but we're testing it out i actually think it can lift conversions.

1:00I think it'll do really well because a lot of people have cashflow issues. Yeah. Yeah. Wow. Because in B2B, no one talks about it. Yeah. I'm not talking about like a million dollar contract. I'm talking about like, oh, you have a software solution, like what you're doing. Yeah. Let's say if there's the annual fee and people want to be on the annual plan. Yeah. Well, yeah, they can just sign up and go through Klarna or firm or one of those. Why not? Instead of paying monthly, let's say it's cheaper and they want a little bit of a savings and it's cheaper to pay the interest rate than it is to pay the monthly.

1:29I like it. This is a good example of where they say B2B marketing is usually four or five years behind B2C marketing. This is a perfect example. Yeah. Yeah. So, but I don't think it's going to cause a 14 % conversion boost for B2B. Even five, 10 % is great. I'll take it. Yeah. All right. So does dressing really nice help you in business? And the only reason I was thinking about this is I was giving a speech the other day at someone's office locally and it was just more so like their their office members were asking random questions so they're asking like hey do you think we should like buy a nice car do you think a car would help like a sales organization a sales organization yeah and they're in real estate they're like do you think um dressing and all this and i'm like dude i came to speak at your office i'm wearing at that time i was wearing fury fury i think it's called uh uh, or joggers or whatever it's called.

2:23Yeah. I'm actually still wearing them. I have like five or six of them. But what kind of jacket are you wearing? Tom Ford. It's a sweater though. And I just wear it in the house. That, but that's, that's the thing we should also say about men. What do men have? We have our watches and we have the jacket. That's all we have. Everything else is BS. Yeah. My, my pants are usually just, dude, I don't wear my Laura Piana pants anymore. I just wear Viori joggers, literally 24 7 are they more comfortable the viore by far wow and they're way cheaper too by far i don't know what my pants are in a little lower piano but it's probably 115 so 120 at the cost i don't know what's viore pants go for i don't have any sweats actually dude they're joggers amazing i just wear their shorts all day at home i've never tried their shorts we're different there yeah yeah you're a sweats guy anyway but you know what let me preface this too because neil actually did a blog post on this 10 15 years ago on how he spent x amount of dollars and how it helped or didn't help with his revenue.

3:22Yeah. And I think I'm at a point in life and you could be too. I don't know if you and I really focus on like dressing nice. I do think pre COVID when people were, everything was in person and you're doing meetings. I think it helped more. I think when we were younger, it helped a lot more because people took us more seriously. As you age and in a post COVID world, I don't think it matters as much. But when I go to places like New York, I'm really underdressed. Places like Los Angeles, it doesn't matter. Places like when you go to Europe, I think they still expect you to somewhat dress up. I think it really matters on the place you're doing business and where you're doing your in-person meetings.

4:03But like places like Los Angeles and Miami, it does not matter one bit. I think when we both spoke at that European conference, it mattered because you were wearing a nice jacket. I was wearing a decent jacket. I think when we spoke at HubSpot, I don't think people cared as much. I just – bless you. I think things – I can't say that the way I've dressed has ever helped me in business. I think when I was younger, it helped me. People took me more serious. Yeah. Not enough for me to continually do it. I think I might have tried and I sensed that pretty quickly. So then I stopped. I'm not saying we dress like bums, by the way.

4:43I don't think we dress like bums, but we care less. I do. Half my outfit is always under dress. It's a Henley and sweats. I still wear the same Henley. This is the only t-shirt I have. I have so many of them from me. They're, what is that? Buck Mason. They're really cheap. I don't know, like 10, 20, 30, 40 bucks or something like that. Yeah. Yeah. But that's, I mean, look, Neil, that old blog post. I mean, that was one where he spent six figures, hundreds of thousands of dollars dressing nice. And Neil used to, he had all these like nice shots and everything. He had like really expensive bags and all that.

5:13Now it's, you know. I still have those briefcases. Yeah. I've never used any of them. I never thought they were practical. It's just like. No, they're very practical. They're so small. It's like. Yeah, but I travel light. My backpack makes me look like a kid. So now when I travel, I tend to take a backpack. Oh, you do? Yes. But the only reason I take a backpack versus a briefcase is you have to keep in mind when I was doing a lot of that stuff, I had hair. So now if I travel a long journey, like for like a week or two weeks, I just start taking portable shavers and all that kind of stuff. So it's like, it just becomes hard to fit in a briefcase.

5:50But if I am traveling for like a really short trip, I actually started switching to a backpack because I don't take a suitcase anymore. I just put the clothes in a backpack. You don't trust someone in like another country to just give you a nice shave. Why would I want to spend money on a haircut when I can cut it myself for free? Cause you have to carry all that stuff. I'm not going to spend money. Brad.

6:18Okay. He's. I'd rather save the money. Roll with Brad today. I never paid for someone to cut my hair being bald. Why would I spend money when I can do it for free? I don't know. It's me, but, um, I've never used a razor either. I always use like a machine because I'm afraid I'm going to cut myself and die. Yeah, that's a whole other thing. But anyway, guys, I think, look, I think it depends on industry too. I think the guys you're talking to, if you're in real estate, I do think to an extent it does matter. Yeah. And that's why I think you look at Patrick about David's office, what I've heard from the guy that does a podcast with him, Adam Sothnik, his entire office, everyone wears suits.

6:53And I think it's because he was used to selling like insurance before, I think. And then there's like, he just used to have like a sales org. So everyone has to wear a suit all day. But it depends. My realtor, I think half the time dresses up like a bum when he shows me homes. Maybe because he knows he can. That's true. He was on that TV show. There you go. See, he knows he can. Yeah. Also, it was Josh? Yeah. Okay. Yeah. Yeah. So, but he always rolls up in a nice car. But when I say bum, I'm not saying like, we shouldn't use that word. but uh i just say like he's dressed down it's probably still like expensive at leisure wear yeah i also think like it depends on where you are in your life too it's like you look at mark zuckerberg before he dressed more bum right and now he's like chain he's got all this his hair is different and all that dress hip yeah he's trying to dress like so so i think like you know things ebb and flow um but at least in our life right now if you move on from this i i think uh you know, we're good.

7:48Yeah. Well, we've, we've done quite a bit on this episode. I'm curious on, you know, I think this is a, this one, this segment could take a little bit. Um, we should probably actually do two one cause the Superbowl is coming up. Um, what's your concept? What's your thoughts on ever producing like high quality ads, like Superbowl quality? Do you like them? Do you not like them? I like them. I think they're funny. Here's the thing. I don't, I can't remember one Super Bowl ad aside from the Oreo one which I don't really remember all I remember is because the Super Bowl they lost power at halftime and I remember the Oreo one so actually no I remember the Coinbase one Coinbase Coinbase Coinbase Coinbase GoDaddy you remember you know back in the day GoDaddy used to have commercials that really caused their business to boom I don't remember I just know the Coinbase one caused them to crash and that that 60 second one was creative because it's just a QR code and they just shot to number one um you don't even need to pay someone to do that one that was really true what i've always found is every once in a while you hear of like a company like go daddy who says oh we did super bowl commercial and it's well worth and it causes to grow like crazy um but i would say 99 out of 100 times when we look at the data almost all companies lose money on the super bowl on their commercial they spend an arm and a leg on the creative and on top of this usually to buy super bowl airtime you have to buy other air time to get that slot.

9:10It's not like you just buy the Superbowl ad. And the problem with really fancy creatives, like the ones that you create on Superbowl, it's really hit or miss. So you spend all this money and you don't know if it's going to work on the flip side. When you do like low five quality ads that are more authentic, we've seen them convert better. And if it doesn't work, you just crank out tons more. You don't waste a lot of money until you find the winning variation because dude you and i i would say um are better marketers than the average person by far would you agree with this i'm not saying we're the the world's best or anything like that but we're above average above average digital performance marketers yes all right and when we look at ads would you agree that you can't pick an ad concept from day one and be like this one i'm going to create this ad it's going to convert for certain it's going to be money ad and just going and print cash.

10:03Not us. No, you would assume that a lot of the stuff that you think would work may not work. And some of the stuff that you think would fail sometimes work. And so you and I really go hard with experimentation. You'd have to test a lot. Yeah, especially with online ads. And I think the same goes with television ads, because even though we're digital, Eric and I run CTV, which is the digital version of ads, whether it's like Netflix or any of those channels, Roku, et cetera. And we've seen the same data. You got to test a lot. So if you want to go and spend an arm and a leg on a full blown ad and you haven't test first, you're just, it's a recipe for disaster.

10:41Yeah. I think we're still going to continue to see this just because people are used to seeing this. I think, you know, there needs to be a doge for the entire advertising industry. That's what needs to happen. There's so much waste. Anyway, that's for another episode, but that's what we think about the Super Bowl quality ads. Are you going to be watching it? Yeah, I always watch the Super Bowl. Oh, you do? While you have – are you going to be with friends or at home? At home. I'll watch it with my kids. They're excited because I told them we can go to a grocery store tomorrow and buy all the snacks for a Super Bowl party.

11:10Oh, nice. So then they're going to pick food. We'll put out some of the Girl Scout cookies you got us. Thank you. Oh, nice. Yeah, yeah, yeah. Awesome. And then chow down, right? For the last one, should we talk about the biggest lesson we've learned in our careers? Should we both pick a lesson? Yeah, I think we need to do two though, just to hit the 80 minutes. Cool. Go pick two. You got four minutes left. No, you go for it. You go for it. All right. We're five minutes behind, so we actually have two more left. Oh, okay. We're fine. I don't know if we're five minutes behind. All right. So I would say the biggest lesson that I learned in my career was when I was younger, I thought you had to create a differentiated business and you had to have something that's unique.

11:50I learned that's totally inaccurate. it. You just need a business in a massive TAM. And if you do a decent job, you'll make some money. It may not be as much as you want, but you'll make some money. And what I think is more important than differentiation is a bigger TAM. And if you have such a massive TAM, like a market where people spend hundreds of billions of dollars a year, there's just money to be made. And even if you're a mediocre average version, you may not make all that hundreds of billions. You may not even make 1 % at a billion dollars a year, but you can make a fraction of a percent where you may make two, three,$4 million a year, which may be enough for some people, right?

12:35That's one of the biggest lessons that I've learned. And do I think you should have differentiation? Yes, I think those things are great and you can figure out your differentiation over time. But differentiation isn't as important as first going after a really big market. And I think fundamentally in business, if you're going to be an entrepreneur and it's not after something that's a really massive TAM, right, total addressable market, you're just, it's a recipe for disaster. So I would say my biggest lesson, and maybe this will help you too, Brad, um you're getting neil's life wisdom and my life wisdom here um what neil's talking about with tam those are all things that um are learned over time as you continue to level up in business and life whether neil likes to learn through talking to people which is valid i like to learn through reading and joining these different groups and talking to people as well um i've learned and neil's learned this as well but as long as you one you keep learning and two you don't stop and then three, you eventually learn from all the learning that you need to focus.

13:39And then you learn from all the learning about the TAM stuff. So the learning never stops, okay? And the keep going piece never stops. As long as you keep going, and we've talked about this before, 10, 20, 30 years or so, there's no way in hell you don't have an outcome that impresses the hell out of the 18-year-old version of you. There's just no way. I don't care how dumb you think you are or how smart you think you are. It just is. You know what I mean? Because the vast majority of the most successful people, Like, okay, I think Elon is significantly smarter than us, but I would say a lot of the smart people that we know that some might have, some might do a lot better than us.

14:12Some might do like a lot worse than us or whatever. I don't think I'm way smarter than them, at least for me. I just think the hunger for learning never stops. And then the ability, the energy to keep going is heavily underrated. If you've ever built a website, you know how tough it can be to keep a strong design while ensuring site performance is fast. That's where Framer comes in and it totally changes the game. Framer is the design first no code website builder that lets anyone ship a production ready site in minutes. I recently built a custom landing page in just a few hours. Animations, fast load times, responsive layouts, all without writing a single line of code.

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16:26Go to shopify.com slash marketing school. Shopify.com slash marketing school. Yeah, I actually look at it where a lot of people that do worse than me or better than me, a lot of them are smarter than I am. And I don't think there's a direct correlation with making money as an entrepreneur. I'm not talking about making the billions of dollars or trillions or being on the Forbes list, but just succeeding as an entrepreneur and having a degree from Harvard. Most millionaires I know are the millionaire next door that had the plumbing business or the HVAC business or the roofing business or was a successful realtor and didn't go to Ivy League college.

17:08And Eric's spot on for doing something long enough. It ends up adding up and driving a lot of revenue, if, which goes back to this first point, if you can learn from the mistakes. See, you don't have to be smart to do well. You just have to avoid making the same mistake over and over again. And eventually you'll be led down a path of success, right? And a great example of this, and this was a big learning for me as well. You know, when I raised money for Kissmetrics, my co-founder did most of the fundraising though. I remember during our board meetings, we had a a board member named Phil Black, and he would just be like, you guys just got to hire the right people.

17:45It's all about getting the right staff. And it didn't really hit me at that time. But over the years, I eventually figured out what he meant in which you don't have to figure everything out as an entrepreneur. No one's expecting you to. But if you can just hire amazing people, you'll do well. Like you look at Elon Musk or even a Mark Zuckerberg or Bill Gates. The reason they did so well isn't because they're exceptionally smart. That is part of it. But the other big part is, and I think this is even more important, is they picked the right people to recruit and they had the right culture and mindset for the employees that they recruited within their organization.

18:27And if you recruit terrible people, there goes your company, no matter how smart or how rich you are. If you can get the right people, you're going to be better off. And the right person varies depending on the stage you're in. Like I believe when I was younger, oh, I hired this person. They're amazing. Look at what they got me to. Well, just because they got you there doesn't mean they're the right person to get you to the next level. Every person has different skills. And a great example of this is I've been hit up to be the CMO of publicly traded companies before many times. And it's never been a good fit.

19:01And then biggest reason why is one, I'm already an entrepreneur and I don't want to work for someone else, but B, I'm not the right person to manage hundreds, if not thousands of employees. I'm a terrible manager. Now I can put someone else underneath me, but it's just not a role that I was shining because I'm not passionate about it and I'm not a great manager. Yeah. Yeah. And so I think the other thing here, it's interesting, like you don't, you get a lot of advice, but you won't know until you're facing it. Like you actually have the scar tissue for it. Um, but you talked about the funding piece and maybe this will be the last one.

19:35Cause I actually have one here. Most companies don't deserve funding. And this is actually one where I workshopped with AI. So I was playing around, I was walking back from the gym, I think last week. I was like, Hey, I already had decided it doesn't, the way I look at raising money for carrot, for example, is we don't plan on raising money unless it's down the road where it's doing like, let's say greater than, um, you know, 10 million ARR or something. And it's a very strategic, um, investment. It's not traditional VC, right? So I had it in my mind. I didn't tell it anything. I was like, what do you think about this?

20:04Like knowing what you know. And it was like raising money, raising VC right now for care would be a mistake. I'm like, why do you think that? It's like, because if you raise money right now, what's going to happen is you're going to fall into their timeline and it's become growth at all costs. And there's a lot of stuff for you to kind of figure out right now. And then it's like, you also have an unfair advantage. You understand what to do to grow. You also have some distribution as well. and you've got a great team already, right? And it's like, there's no need to try to go on the VC's timeline.

20:34And by the way, when you're on their timeline, it's not like they care completely about you. They have like 70 to 100 other bets. So by default, they're doing the same thing. You know what I mean? And so I thought that was, I kind of already knew that piece already, but it's like, it did give good reasons for it. You know what I mean? Do you want to know the number one reason why I don't think you should raise money, which is very different than what ChatGPT told you? Go ahead. you already have money and you make profit. And I don't mean this in a bad way. You're single. You don't have a mortgage.

21:04You have excess cashflow that you can use to double down on something you believe in. It said the first part. It didn't say the other parts. And when you look at some other people out there, they don't have the distribution channel that you have because you've spent many years building this up. They don't have the cashflow that you have. so some people don't have a choice but to like join yc and raise some money but you're in a much different position because you're not a first-time entrepreneur and you already have a business that generates millions in revenue and you have tons of profit yeah that you could just reallocate yep i have an unfair advantage i would say or i would say it's an advantage that i worked up um but that being said knowing what we this is also an unfair advantage knowing what we know right now when we go back in time and raise money you wouldn't because you've done it before I wouldn't also because I've done it before too and also because of these other things so at the end the answer maybe is it depends but I do think the VC model and Chamath tweeted this out I think the VC model is going to be upside down in the next couple years why he I'll kind of paraphrase here and this will be the last thing so he's like look the model is completely broken because like you can build all this cool software now for way cheaper and you don't necessarily need the VCs.

22:18He had some other good reasons in there, but he's like the whole AUM model is like going to be under underwater. Like to get in all these deals, like maybe they're not going to be priced as high as like what they're used to doing. And you don't need as much funding. I think the money now is used for sales and marketing. If you're going to raise, you're really raising for sales and enterprise companies just light the money on fire. A lot of them do. They do. And I think some businesses need the funding like um to build a chat gbt it's too expensive whether deep seek did it for six million or a hundred million or 500 million those kind of businesses require a lot of cash up front yeah here's what he tweeted and then we think and uh this will be it so chamath tweeted this um someone named cash said 99 of software doesn't need to exist and basically does nothing useful yeah uh and then chamath retweeted it he said the software industrial complex will go to zero in its place will be a bunch of semantic communication between models um so he said that and then he tweeted all these other he's like i don't know if it's gonna be that crazy but sure you can see it trending in that direction is the point and he said um innovation um innovation means doing more with less and i think we're gonna see a lot more of that i truly think you're gonna be building a lot more shit and i think i will too i think we're gonna be because we're gonna have so much resource available we're gonna be able to flex our creative muscles a lot more we'll see i agree with that yeah all right guys that is it for today please don't forget to rate be a subscribe go to marketing school.io slash agency if you want to grow your agency faster and we'll see you tomorrow