Why rebranding is a mistake most of the time (ConvertKit to Kit), Google AI Overviews only impacts 15% of queries; down from 84%, Gary Vee on the #1 marketing opportunity in 2024, Why productized services are not actual services

0:00I'll start with ConvertKit rebrands to Kit. okay are you familiar with it do you need me to i am they're releasing all these other features and they're gonna be more than email okay you you use convert kit yeah i do i don't like it you can add in all the other features convert kit doesn't just mean email i don't know why you need a rebrand kit is generic convert kit has built up a lot of brand equity it's like elon saying i want to go from twitter to x and then him posting i don't know if you saw this on X, he posted about the rebrand and how much people like it better if they do like it better.

0:35And everyone's like, no, we prefer Twitter. That was a parody account. That was a parody account. Yeah. It just got massive engagement because it was the same picture as here. But yeah, it was a parody account. But I think what, 70, 80 % of people prefer Twitter. Yes. It's like you're crushing brand value. What's wrong with the name ConvertKit? There's nothing wrong with that name. ConvertKit doesn't mean, oh, this is just an email solution. it can work for anything. MailChimp offers tons of different solutions other than email and MailChimp sold for over$10 billion if I'm not mistaken to Intuit.

1:07I know they did sell to Intuit. I don't know if it was$9,$10, or$11, or$12 billion, but it was somewhere in that price range. And you look at HubSpot, it doesn't have email in there. It's done fine with email, CRM, etc. Even with sales and all this kind of stuff that they're going after Salesforce with. But I don't see the purpose of Nathan Berry wanting to rebrand. Maybe he wants to do something new, but he's just wasting time and money. Yeah. I mean, so I found out about this a couple of months ago because he was at a retreat that we hosted. And I think – so even at the time, I had the same reaction as yours.

1:44I just didn't really say anything. But to your point, I think the biggest thing is opportunity cost, right? So you can work on other things or you can work on this rebrand. and no matter what, this rebrand takes up mental capacity. And the name to your point is fine. ConvertKit, I think is a fine name and people know ConvertKit. The thing is he had already done a rebrand in the past, ConvertKit to Siva, right? And then rebranded it back. Kit, I think this one will probably stick, but I don't, I just - It's too generic. CarKit, what do you want? Like it's just too generic of a name. ConvertKit was better.

2:18Yeah. So, I mean, we don't know how this will play out, But I think in general, if you want to think about a rebrand, generally the people that think about rebrands – here. Here's a successful rebrand. Was it Time Warner to Spectrum? That was successful because Time Warner had such a bad brand that they had to rebrand, right? Oh, guess what? There's a broker that had to rebrand their business. I'm not going to name names here, but yeah, it was an M &A broker. They had to rebrand their business as well. Yeah. What was it? Arthur Anderson rebranded to Accenture, but they had to because the Enron scandal, right?

2:56Or they did a spinoff and the accounting division just dwindled away. If you look at most big companies, most of them don't have generic names. Yeah, there's booking.com, there's hotels.com, there's Apple for computers, right? But most big corporations don't have a really generic name. and it's hard to create a really big company with a generic small name from everything that I've seen. Yeah, I hope he just holds on to the domain because you never know, he might have to switch it back. I think he will hold on to the domain because he's going to do a 301 redirect, but I bet you maybe he actually won't go back, but he should go back.

3:39I don't see any increase or faster growth because of the rebrand. I see faster growth by adding in more features and upselling your existing audience. And hopefully that reduces churn. But I just don't really see that growing the revenue by doing a rebrand. It's like Twitter and X. You should have just kept Twitter. I think the other thing too is Beehive, the competitor. So I use Beehive, use ConvertKit or sorry, Kit, use Kit. So Beehive is shipping so quickly right now. Last week, they just shipped like two new features. They're shipping an SEO feature. They're shipping all these things. and when they're so focused on shipping new product and they're on your tail and a little bit of your headspace goes into a rebrand, I think that might be a strategic, it might be unfavorable strategically.

4:25Well, strategically or as a customer, a rebrand has very little to no benefit for you. Adding more features and ideally not charging more has a ton of value. They should have just focused the effort on something that provides more value to their users. Yep. ConvertKit doesn't have a revenue issue. They have their stats public on bare metrics. They have a churn issue. Their goal should be to solve churn. Changing a brand doesn't solve churn. What solves churn is adding more features and getting them to use it so they're more sticky. Yeah, so they're at$41 million last I checked or so. And then I'm looking at their churn.

5:06You can share your screen. It's public. Oh, yeah, yeah, yeah. Oh, yeah, yeah, yeah, yeah, yeah. Yeah, let me share my screen. So to Neil's point, the churn is 3.30%. It's gone down a little bit, 12%. So congrats to 13%. Revenue churn down 12%. No, no, no. Go look at the churn over time. Go increase it, not just last 30 days. Switch to the day picker. To like this year. Go this year. This year. Okay, let's go all the way down. Because the churn goes up and down. There's revenue churn. So it's on its way down, which is great. User churn is on its way down. Let's look at customer churn. Oh, that is user churn, is customer churn.

5:47Yeah, user churn is customer churn. Yeah. And what's their user growth, though? Is it still kicking up? Let's look. Let's look. Net revenue, user growth, MRR growth rate, active customers. New customers is flat. Yeah. New customers down here, 217. oh wow 2 ,400 dropped to 2181 2172 yeah but they should just focus on adding more features to getting the churn down and getting people to spend more money per customer that's how they're going to grow i think they should also take this bare metric stuff off i agree with you but he's not going to do it that's not his culture yeah which is fine this is just our opinion everyone So, and for me, I actually like him having it public.

6:37It gives me something else to look at and analyze. Well, we like it, but I don't think it's favorable as a business owner. So yes, as a business owner, publishing stats and data is really useful when you're tiny and you want to share, showcase your growth story and have people like join along and have more camaraderie and people like rooting you on Groovy HQ used to do this. We're on our way from zero to a hundred thousand dollars a month in revenue. We're learning a lot and so will you. I did something similar back in the day. I swiped Groove and I even told people I swiped Groove and even the Groove founders.

7:09And they were cool with it. And it was, I'm growing my track from zero to 100 ,000 monthly visitors. I'm learning a lot and so will you. And that did really well. But then the moment you start showcasing like, oh, I'm going from, you know, a million visitors a month to 5 million visitors a month. People can't relate. It doesn't do well. Same with like, I'm going from$100 ,000 in revenue a month to a million. That doesn't do well either. And I first learned this from Timothy Sykes because he was like, I went from$16 ,000 or whatever the number was from bar mitzvah money that he ended up getting to making over one point something million dollars.

7:49That number just kept increasing. And what he found is his signups and his revenue grew the fastest when he's like, all right, this year I'm going to start trading with only$1 ,000. and I'm going to try to grow it to like over$100 ,000 or$200 ,000, but I'm only starting the year with$1 ,000. When it's more realistic numbers that people can relate to, it does so much better for your marketing. But if you're at Nathan's level where you're like, hey, we're doing$40 million in revenue and we're trying to grow to$100, 99.99 % of people and businesses will never be able to relate. Yep. Well, check this out over here.

8:24So this actually ties in a little bit with what we're just talking about. So Rockefeller, there's this book over here. I shared this on my Instagram. So it says here, but then it was important to keep such contract confidential for fear of arousing expectations of other targets. Keep this deal secret even from your wife, John D. told one man. When you start making more money, don't let anyone know. No fancy new house, no stylish fast horses, no betting or carousing. I don't know what that means. um so i think the point of all this too is that once you're starting to do well there's it's usually not favorable to brag about this stuff some people really like to brag and show off um generally i don't really like sharing that stuff nor nor do you neil like you look at our instagrams it's basically all educational content never once has neil showed his stuff or my stuff and so yeah just keep that in mind i think sometimes we do like sometimes we'll be recording and people will see our homes and stuff like that.

9:19But very rarely. Hey guys, all I have is books in my background. If those of you that can't see. And I use a common area, so it's not really my home. So that works out great for me. Yeah, okay. You have AI visibility drops. That's something from BrightEdge that revealed. Do you want to go on that one? Yeah, so AI visibility dropped 15%, if I believe what the stat was. Yes, Google AI overviews visibility drops only shows for 15 % of queries. So keep in mind, if I'm not mistaken, because I haven't kept up with all the news as I've been traveling, AI Overviews is still only in the United States where it's fully rolled out.

9:53And when you look at AI Overviews, it used to be at one point where it was for more than 60 % of the queries, then it dropped down to the 30s, and now it's at roughly 15%. And there's two main reasons for it dropping. One, the quality of the results always aren't that good, such as, hey, if you're depressed, jump off a bridge. Eric and I are not telling you that, but that's what Google was saying, and that's really bad. Or things like, if your cheese isn't sticking on your pizza, use Elmer's glue or any type of glue to put it on there. You don't want to tell people to eat something that's potentially toxic.

10:27The other issue with the AI overviews is, for a lot of the results, you don't need AI overviews, and people aren't clicking on them, even if the results are good, because it's like, you're just adding in AI for the sake of adding it versus trying to make AI more practical. And it was funny because I put a tweet about this the other day. People, when it comes to AI, they focus on the hot and the sexy. Like marketers focus on, oh, let it create really cool content or videos or images, like cool, sexy stuff. And the real amazing part of AI is to help you with the boring and ugly, because that's typically where the money is.

11:07You don't need to add AI to everything just because it exists. Add it where it makes sense. And I'll give you a great example of this. A lot of people use it in marketing to create content. On the flip side, we see a much better ROI in marketing from people using it for data and analytics and analyzing data in real time and telling you where there's wastage. For example, in digital ad spend, I think it was Bant that ended up releasing this, roughly 40 cents on every dollar is wasted. So that would be over$200 billion a year is wasted in digital ad spend. Imagine companies saving some of that money.

11:43That has a much higher ROI than it being like, oh, help me create a cool image. And I know it can do both, but ideally first focus on what's practical and usable, even if it's not as sexy. So check this out. I have a couple of graphs for you guys to watch. And by the way, I had Jim Yu, the founder of BrightEdge. We did a YPO webinar this past week. And so he shared a lot of these stats. And I'm going to – we have these graphs in front of you all. So those of you that can't see this basically shows that historically AI was present in 84 % of the time in opt-in or collapsed states. That's just the different levels of SERPs, different types of SERPs.

12:22And then with Google announcing availability in U.S., AI presence is now less than 15%. The likely reason is to reduce the risk of incorrect AI answers in the initial rollout. So they're de-risking their brand, right? If you keep showing crap answers, like your brand instantly goes worse and you kind of hurt the golden goose. And then over here, you can see the presence of AI overviews varies greatly by industry. So you can see 32 % here. That's for B2B tech and in e-commerce, 23%. Healthcare, 63%, which is dangerous if you have a bunch of crap things like the, you know. Jump off a bridge for depression.

12:53Like that's bad. That's health related. I didn't know that was a real one. No, that was a real one. That's so bad. Restaurants like zero travel zero and then finance 5%. So this has got to change. I mean, again, this, this comes down to the customer experience at the end of the day. Again, everything we talk about on this podcast, who cares about how good your marketing is? If you don't deliver a good customer experience, nothing matters. That, that is a form of marketing. And, you know, you were sharing some data, I think on our last podcast, Google's traffic has started to go down, right? They're starting to lose search market share.

13:28Some of this because younger people are starting to use TikTok and Instagram, but terrible results like in AI overviews can't help them retain users. You know, so many people, including me, are now like starting to just skip over the AI overviews, even if they're good, because we're just assuming that they're going to be bad. And it's just putting that perception in our head. I know eventually they'll fix it and it'll get better, but your brand is everything. You don't want to do anything to tarnish it. And the AI overview is having really bad inaccurate results is tarnishing some of Google's brand.

14:02Yeah, I think search behavior is continuing to change. I mean, I started looking at travel for this summer and I used Gemini first to start with it because it integrates with Google flights and everything. So I think search behavior is going to continue to evolve. All right, everyone, quick message from the Agency Owners Association. So this is the peer group for agency owners that Neil and I both put together. This is for people that are doing six figures, seven figures, eight figures, even nine figures as well. And we're all here to help you grow your agency faster. In this group, we share leads.

14:29We share learnings with each other. It's a community where people can ask questions. Their most burning questions personally, professionally. We'll share templates, reports, things like that. We're constantly adding more value to the group. I will tell you that the price is continuing to increase. The good news is that there's no long-term commitment. So you can just learn more by going to marketingschool.io slash agency. Once again, that's marketingschool.io slash agency to learn more. And we hope to see you inside. Maybe this is worth talking about. I saw a video with Gary Vee talking about the number one marketing opportunity of 2024.

14:57So before we talk about what he thinks, what do you think is the number one marketing opportunity for 2024? Optimizing for AI engines and having them recommend your products and services. Interesting. So he says he believes the number one marketing opportunity in 2024 is organic social. and what he means by that is just you're leveraging real shorts tiktoks and then you're just trying to put out as much creative as you can and then whatever performs you just layer on a call to action and a good hook and then that's your performance creative um he thinks not enough people are are doing that so you know people have have different perspectives i tend to lean more on the the neil side um but i think it's always good to hear different ideas yeah and ideally leverage both of them right gary's not wrong we're not wrong um people also play on their strengths Eric and I are better at SEO than he probably is.

15:46And he's better at social media than we are. So play on your strengths, but why not leverage both? Yeah, I think definitely leverage both. I think our plan this year is to increase content output. And what I enjoy about these longer podcasts that I do with Neil is we actually get to tell stories. And sometimes these stories just take off. And then sometimes our interactions will get like 800 ,000 views on Instagram. And then the other one got like 2 million. um so you just never know what will happen right but it's it's nice which one got two million i think that the shake shack one on tiktok got like 1.52 million or something and then it got like eight or nine hundred thousand on instagram this was the one where eric told me i can get free shake shack i was never able to leverage it and i was very sad about that and then we have one coming now on free there's some some element of free in and out as well oh yeah the hot cocoa i need to try this yeah yeah yeah when it's when it's raining all right Look, if you're looking to hire additional marketers for your team, there's no better place to look than, well, hiring nearshore, hiring offshore.

16:50And we found that we've hired amazing creative people. We've hired amazing people that can help with execution in the marketing side. Whatever it is that you're looking for exactly, we are helping with that. We have recruiters from our side. All you have to do is go to marketingschool.io slash hire. Once again, it's marketingschool.io slash hire. Fill out the information in terms of what you need. And then we'll have our recruiters reach out to you to help you with the placement. and it should be great for you at the end of the day because you're gonna save a lot of money and you're gonna get the help that you need.

17:15So you're gonna get help from a cost standpoint and also an execution standpoint as well. So again, marketingschool.io slash hire and we'll see you inside. I think what's interesting, so we had a mutual friend here, Ryan Dice. He shared a tweet. I don't know if you saw this one, but he said, so let's explain this real quick. So he says this, productized services are offers, not a business model. So a productized service is like some of these agencies that are saying, hey, we'll sell you five landing pages for$2 ,000 or something like that. That's a productized service. And then the next level would be, hey, we'll do 10 for you for like$3 ,000 or whatever.

17:48And usually a lot of these agencies, I'm air quoting over here, they're just offering that one productized service and they're not changing around. They're not flexible. Like when you buy from Neil or you buy from my agency, we're customizing the solutions pretty often and it's not really a cookie cutter thing. And so here's what he says. Productized services are not offers, or sorry, productized services are offers, not a business model. In most cases, the margins on a productized service are the same or even worse than the bespoke service, which is what Neil and I do, because you can't charge as much.

18:20That's number one. And two, the churn and refunds are higher. They work because they're easier to sell, not because they are a higher margin. Now, does this mean productized services are bad? No, it simply means they aren't a business. Productized services should be seen as a front-end offer designed to self-liquidate the client acquisition costs while also proving your ability to create value. The real money happens when you upsell a productized service client into an ongoing service offering after you have already proven your value and set them up for success. I agree with him in which if you're going to do something productized or templatized, that's a great lifestyle business.

18:55And I don't really look at lifestyle businesses as real businesses in the long run, but hey, you can make a good living from it. And if you're happy with 100, 200, some people even make a million plus from it, you can live on the beach in Thailand or Indonesia or wherever it is and chill and enjoy life. But what I found is just taking the easy route sometimes is easier to sell, but it's usually not the way to build a big business. Yep. So here's what I'll say. There's actually a guy that's worth following. Those of you that are in the services world, his name is Matthew Larson, and he's got a nice YouTube channel.

19:28And he does talk about this. Like he does the way he handles cold email. He pushes it out to a bunch of people and it's just one offer, right? He's like, Hey, you know, I'll, I'll guarantee a 10 % lift in your conversion rates on your landing pages. Um, and you know, for$2 ,000 and if not, I'll just give you your money back. Right. And he actually got people to respond to that. And so that's an offer. So you get them people, you get people in that, that builds trust. You show that you can do a good job and then you, you try to sell them on an ongoing thing. That's how you build a longer customer lifetime value versus just selling these one offs.

19:56Right. I see a lot of people building these productized service agencies, leveraging influencers on Twitter, and they're not going to become that big, which is fine if they don't want it to get that big. But I'm assuming they partnered up because they want it to get big. And they're all just doing these one-off things, right? And then I don't think that's going to be favorable to both sides. So what Ryan says is, look, if you want to build something long-term, have the productized service as an offer. Look at it only that way, and then you can sell the bigger stuff. Yeah, I agree with that. um you just think big and think more long term and typically you're gonna have to face a lot of pain and something's not gonna be as quick to make money but it's worth going through the pain for something that's bigger in the long run assuming that's your goal yep all right everyone so that's it for today speaking of which the agency accelerator or sorry agency owners association i should say neil and i will both be doing a session this week and so we do these uh we do these group coaching calls every now and then.

20:51So that's happening. You can learn more about this group, marketing school.io slash agency. Please don't forget to rate, review, subscribe. It helps this podcast grow and we will catch you later.