Why it’s All About Profit Margin — Vinnie Fisher // Fully Accountable

Quotes

• “I want to be clear about some of the life lessons in business that have taught me big principles. One of those big principles is that cash is king. Our world has changed. Direct-to-consumer and e-commerce is the world that I live in, I’m a digital marketer so for so long I have been in the habit of convincing people to buy (electronically). The adoption rate has grown slower than people anticipated.” - Vinnie“Now, enter a total change in our global community in the way that we do business. We have accelerated 4 or 5 years of online buying behavior. So now, it is a lot more reasonable to consider that the behavior of buying online is becoming normalized.” - Vinnie“Since that’s the case, I need to switch from every dollar spent to get an eyeball to how much cash am I keeping so I can survive all the other attacks that my business is going to take.” - Vinnie“There’s the idea of the war chest and this is something that is important for marketing and also important in marketing’s role within the larger part of the organization. Most of the variable spend comes from our channel. Marketers are burning cash to try to generate enough energy for the business to thrive and grow.” - Ben “Us, as marketers, think inherently that we just need more traffic. That we have a traffic problem. When the reality is, we actually have an offer problem. If more of us spent time on our value proposition, what problem are we solving for the consumer we hope that will consume the goods and service we’re providing as the solution to the problem they have, I would promise you that the 42 cents of every dollar that the average digital marketer are spending to acquire their customer, that would come down.” - Vinnie“I wrote a whole chapter about this and we’re giving it away for free for your audience, www.fullyaccountable.commartech where you can do this idea of solving for X. You start with a margin and this whole calculation and you’re back into an acceptable acquisition cost. I am telling you, there is so much waste going on in trying to acquire the customer and it is a lot of guessing that us, as marketers could actually use math to get better at some of the soft stuff that we’ve talked about. There is almost no excuse anymore with the tech stack out there that we can’t become more massively efficient in this part of our job.” - Vinnie“There’s a little bit of the chicken or the egg problem where you can spend your time optimizing your buying experience but without traffic, it doesn’t matter. And then you can spend time driving traffic and your budget but if your conversion rate sucks, it doesn’t matter how much traffic you get. So there is a component where you need to balance the two and the safer bet? Make sure that you have an optimal conversion experience before you’re investing a ton of money.” - Ben‘If you’re talking about the digital website conversion rate, conversion rate optimization, AB testing, message testing, all that stuff really matters if you want to be efficient in marketing and then you get into the traffic driving tactics and channels.” - Ben “One of the things I’ve seen in the wake of the coronavirus, which you also mentioned, was that marketers spent less on digital advertising because marketing budgets dried up so the focus has been more on conversion rate optimization.” - Ben “As a whole the category is up. What’s interesting is that the direct spend dollars to acquire customers, those dollars are up and affiliates spend, network spend, CPM, CPA, I’m not sure that they’re down because I see them as up. What’s down are some of the brand budgets and expansion budgets around the brand.” - Vinnie“With all that said, what I am seeing improvement done is where there’s waste. Having too many channels, people are recognizing the return on being in too many places. So what I’ve been saying a lot lately is, ‘You need to cut out some of your channels.’ We need to go deeper, not wider.” - Vinnie“I think you have to look at the runway. How much runway do you have before I will literally run the plane off and the longer your runway, the more you have margin to think about longer bets. If your basic needs are being met and you don’t have to think about dollar-in, dollar-out, then leave there.” - Vinnie“I told our team when we were investing in Fully Accountable website and our SEO strategy, we’re not going to see anything for nine months. Trust me, we gotta do this. Guess what? 18-36 months later, it is a massive return on investment. Most people in marketing are absolutely scared out of their mind if they don’t see a pathway of immediate return of their dollars. When you start developing a room in your cash budget, you gotta allow for some of that so you don’t have to constantly spend a dollar to make a dollar.” - Vinnie“If you have that much cash on hand, pull it out of the business and let it make money in other places as you continue to add, good mature depth. I would also say, companies that have too much cash are not deploying capital back into growth. If you want to add growth into your business, one of those is long-term investment. Make a real, strong investment into something that is not going to pay off in a year or two. You have to build something that you’re going to have a hard time breaking.” - Vinnie“In reality, if you’re sitting on a pile of cash and you’re leaving an opportunity to have a high return from another marketing channel that takes a long time to cultivate, you’re losing. You should be making your longer-term bets and building stability for your business over the long term and so you can never have too much money in your pocket but you also don’t want just hold on to everything and not make those longer-term stability-building activities that are going to help you grow your business without having to spend over the long run.” - Ben “I have two books, first is CEO’s Mindset and the other is False Profits, both have raw journeys of my business experience. In CEO’s Mindset, this whole idea that you set out to sell something because you think you’re a good sales person or you came up with a clever idea, now all of a sudden people started buying your idea or your thing. Well, you have to wake up one day and run a serious business. This is a field guide to how you could do that.” - Vinnie“False Profits is about this idea of how it’s not the growth revenue paying you, it’s what’s left in your pocket. And how can you as a leader, become the defender of what should be in that account, not running through the account.” - Vinnie