The Older Your Company The Better Your Marketing

0:00All right. So we're going to talk about how if your company's older, the better your marketing is. So most people believe the way you grow a business through marketing is you do SEO, you do social media, you end up doing a lot of branded campaigns. And just over time through paid advertising and all these channels combined, you end up creating a big business. What's funny is we work with a lot of enterprise businesses, Eric, and a lot of Fortune 1000 companies. Do you know where they get majority of their business from, Eric? If you had to take a guess, what chart marketing channel? Enterprise companies.

0:40B2B, B2C, just Fortune 1000. Okay. Outside of sales, but what marketing channel specifically is helping them generate their most revenue? Brand. Yes. And they got the brand from just being in business for a very long time. Their best marketing tends to be a combination of word of mouth, referrals, or people just knowing their brand. And that just happens by being in business for a very, very long time. Everyone believes that your marketing needs to be so perfect and amazing if you're trying to generate the most sales. That's not true. You need a great product. You need a great service. And the longer you're in business, the better off your marketing is going to do just because more people are going to get to know your brand.

1:24Now, don't get me wrong. SEO, paid advertising, email marketing, text message marketing, like all the channels out there, they can help. It's not like they're going to hurt, but what really helps businesses grow. Like when we look at a lot of the fortune 1000 companies we work for word of mouth marketing, people knowing their brand and referrals is by far literally the number one way most of them generate their revenue. And it's consistent, good economy, bad economy, B2B, B2C doesn't matter. That typically is their best form of marketing. And that happens by just being in business for not five years, not 10 years.

2:01You're talking about 20 plus years. You know what's interesting, Neil? I was actually just having this conversation with a friend yesterday. And I do believe now his company could potentially sell for billions if he decides to sell, but it took him time to get there. And so what I mean by that is he shared another story where his friend sold his company for about, let's just call it$200 million or so. But without his father being in business, the same business for 30 years prior to that, he would have never gotten to the point where he could have sold this company. His father just gave him the business, and then he took it over for maybe 5, 10 years or so.

2:36And so 40 years basically cranking away in business, and he had a great outcome. And when I look at my other friends, same thing for you, Neil. You look at any of your friends that have been in business for 20 years, especially the ones that are doing the same thing, usually they're at nine figures plus. And a lot of these business are beyond that, right? We're talking 10 figures, right? In terms of the value of the company. And so the key thing is not even just with marketing, but with business, the longer you stay in business, the more you learn, the more you stay focused, the more you lock in, and the more you build something that has higher enterprise value.

3:08That's right. And you know, you just got to stick it out for more than 10 years. I've really found that, you know, at the five year mark, things really do change. But the 10 plus year mark is when things really get better. And that branding just kicks in and word of mouth and referrals. That's assuming you have a good product or service. If your product or service sucks, it doesn't matter if you're in business for 30 years, it's not going to do that well. Yep. In fact, it's negative branding, right? And so, you know, we've talked about this in the past. There can in fact be negative branding, but key thing here is when we talk about the concept of thinking in decades, it very much applies here, not even just for business, but for marketing.

3:44The longer your business can stay in business and do a good job for your customer customers, the easier your marketing is going to be, the more marketing channels open up to you like the branding. So when you go to like a Formula One, you see a Rolex there, you see a Ramco because they're freaking huge, right? Or, and you see a lot of crazy brands. So go ahead, Neil. What's funny is years and years ago when I was running Kissmetrics, where's money for that startup? The startup ended up failing a while ago. And I don't know how old that startup is now, you know, in theory, if you had it when we started it, But let's say, you know, it's funny.

4:16I'm in this YPOEO chat on SAS and someone asked, Hey, what do you guys think about Kissmetrics? And I just didn't say anything. But, and I don't know who ended up buying it out, but I remember back then we were trying to generate revenue through any means necessary. So my founder and I wouldn't have to keep getting diluted. So I was doing outbound. So I'd hit up people like the Airbnb founder and be like, Hey, I can help you with SEO. Got a meeting, got a contract. I believe the contract was for$240 ,000 for the first year, somewhere around there. This is a long time ago. Airbnb wasn't publicly traded.

4:46They're really tiny. Do you know how they're generating most of their revenue even at that time a few years into the business? SEO, no? Nope, not SEO. Most of their SEO traffic came from the term Airbnb. They were doing paid advertising. Paid advertising wasn't responsible for the majority of the revenue. It was a good product and their brand just kept getting bigger and bigger. And most of the enterprise companies we look at, yes, marketing, advertising, it all helps them grow. But what really helps these companies grow, which sounds counterintuitive because Eric and I own advertising agencies, is just A, creating a great product, a great service, which ideally disrupts the market, and B, being in business for a long time.

5:25Yep. So that's what it is. We don't want to beat a dead horse here. It's the boring stuff. I find that. I remember I've tried to do courses in the past where the gist of the course was it's going to take time, and that never does well. Like people want results very quickly. Yeah. Go ahead. They don't want it right now. If you tell anyone it's going to take time, they hate it, but it's the truth. And at least that's what I like preaching. And that's what you like preaching. Yeah. Well, here's the thing. Like, and I've learned this over the years, like focus is big. Like not only do you have to eat poo poo sometimes, your face has to get rubbed in the poo poo sometimes too.

5:54Right. So that's one piece of it. Focus is a big piece. Now I got the two guys up here again. You can't see him, but Warren Buffett and Charlie Munger are back now. And investing is very simple. What do you do? You just sit there. It's the most people can't sit. It's being patient and it's being focused and it's just thinking very long term. And that's why in their 90s right now and Charlie Munger is pushing 100, they're just having fun doing what they're doing because business has just become a game for them and they enjoy waking up to play it every day. Well, cool. That's it for this episode.

6:20Make sure you rate, review us. We really appreciate you guys listening and tune in next time for Marketing School. Goodbye.