Ep #5: David Ellis on B2B growth strategies
Ep #5: David Ellis on B2B growth strategies
Welcome to the fifth episode of ‘Heureka – The Insights podcast’ by Thelightbulb.
In this episode, we are hosting David Ellis, founder of Teranga and Beetu.be. He is known for his expertise in growth and sales in B2B environment. Listen to the complete podcast to catch David explaining the difference between sales, marketing and growth.
Guest: David Ellis
David’s passion lies in helping businesses grow, and he is the mastermind behind two companies dedicated to achieving just that. One of these companies is Teranga SEO, a boutique SEO agency that focuses solely on creating killer SEO campaigns for B2B companies. The agency’s approach has earned them a reputation for delivering exceptional results.
As the founder of Teranga SEO, he led the company to achieve extraordinary feats within a short span. Within just six months of its public launch, the company reached an impressive £50,000 in monthly recurring revenue while maintaining an impressive 80% gross profit margin. Furthermore, he assembled a dedicated team of eight full-time members in just 12 months after the company’s launch, showcasing his ability to attract and nurture talent. In a highly competitive market, he successfully identified and capitalized on a unique offer that allowed Teranga SEO to establish a strong product-market-fit.
Similarly, as the founder of beetu.be, he focused on scaling up B2B service companies as a growth partner. Within the first 90 days of operation, beetu.be achieved remarkable success, amassing over £185,000 in sales.
To know more about David, visit : https://linktr.ee/davidjellis
Host: Ritu Srivastava
Heureka – The Insights Podcast is a series of podcast episodes hosted by Ritu Srivastava, who is a seasoned entrepreneur, focused on her current startup TheLightbulb.Ai, a full-stack Emotion Ai platform for digital interactions that has scanned more than 8 million faces for emotion analysis. She has held pivotal profiles across deep-tech, health-tech, telecom and media companies over the last 20 years. Her cross-industries experience gives her a unique edge in understanding consumer trends and insights across verticals.
In the podcast, Rajesh shares some interesting tips, her thoughts and experiences on consumer insights with Ritu Srivastava (Co-founder, Thelightbulb).
Engagement and Sentiment Analysis of Podcast
Note: Engagement and sentiment analysis are generated using Thelightbulb’s Insights Pro
Voice Transcripts of Podcast
Note: Transcription of the podcast is generated using Thelightbulb’s Insights Pro
Ritu: Hi everybody, and welcome to the fifth episode of Heureka, the Insights podcast. Today I have somebody with us who I’m very, very excited about as our guest. David is somebody that I connected with almost a year ago when we were looking for somebody to help us with our growth marketing on Thelightbulb.ai. And I can personally tell you I was extremely struck by his clear understanding of how B2B sales and the growth engine work, and he is the founder of Teranga and beetu.be, which are both growth marketing initiatives, especially in the area of SaaS and SEO, which are hugely mystifying terms to a lot of us who are trying to build businesses. Thank you so much, David, for agreeing to hop on the Insights podcast today with us.
David: Thank you, Ritu. It’s really good to be here. Thank you for the nice intro. Appreciate that.
Ritu: No, absolutely. We are very excited to have you drop some real nuggets of wisdom for all of the founders and the growth marketing teams who are looking for insights on how to scale and grow their businesses, especially as they reach out to different geographies. But before we get started, I would just love it if you could tell our listeners a little bit about Teranga and about beetu.be. I’m very excited about beetu.be because I know you’ve been doing some very interesting experiments there, but we’d love to start off with a quick introduction.
David: Yeah, absolutely. And maybe I’ll take, if you don’t mind, I’ll take a little bit of a step back as well and just explain a little bit of my, uh, origin story, so to speak as well. ’cause that might be helpful for the context. So I’ve got a really strange background, actually. Ritu, I, I studied, uh, in music, so I studied music at university, and I was kind of, um, playing gigs, playing in bands on the radio and stuff like that. I very quickly realized after I left university that it’s pretty hard to make any money and make a career outta that unless you’re gonna be a pop star, which I wasn’t, uh, good enough to do, unfortunately. Um, so I quickly realized I needed a real job. Um, and so I wasn’t sure what I wanted to do, and I basically fell into the career that a lot of people end up in if they’re not sure what they want to do, which is recruitment, helping other people find jobs.
David: So I did recruitment for about six years, um, and that’s, you know, that was a great training ground because it’s, it’s really B2B sales, right? It’s very people oriented, very commercial. You learn the basics of negotiation and persuasion and sales and that whole side of things. Um, and when I left, uh, the recruitment industry, I joined a business called PGC as effectively, I ended up as a growth lead. So I was running a small sales team and a small marketing team, and this was my first exposure to doing marketing. So I’d always been kind of in sales and, um, I think I was a bit of a frustrated marketer at heart, to be honest with you. Um, and so this is where I started to do marketing. Um, we had a lot of fun there, and then I started my first business after that.
David: So later than a lot of people, I think, who I don’t know, I spend quite a bit of time on YouTube, and you see these 20-year-olds who’ve already got five, seven-figure businesses. Uh, I started my first business when I was 29, um, and it’s the business called Teranga. So we’re a marketing agency. We do see for our clients, so we help them rank on Google, and, um, yeah, we love that business. We’re a boutique. We work with a handful of clients at a time and just make sure we’re getting them amazing results. Um, and we’ve been running that for about three years now. Um, I launched beetu.be, which is a newer project earlier this year, actually, publicly, although we’ve been doing it slightly more than that, uh, kind of behind the scenes. The reason that I launched it is that I realized that businesses were coming to us asking for SEO.
David: So they were asking us for marketing services, they were asking us for SEO, but what they actually wanted was growth, right? And what I’ve realized, and I think we’ll probably talk about this a little bit today, is that, um, marketing is a piece of growth, but it’s not the whole picture. So it’s a piece of the puzzle, but it’s definitely not the whole picture. And often, it involves things like business strategy and positioning. It involves sales, and it does involve marketing as well, but really the best results come from aligning all of those pieces together. And so the reason that we launched beetu.be, which is a newer project, is we just felt with the background we have, so working in-house, in sales and marketing, running our own companies. So we kind of know what it feels like to spend your own money and need to generate a return.
David: Um, and then just having worked and consulted with quite a lot of businesses now, uh, we’ve been able to sort of refine it, a unique protocol. So we help businesses grow basically within B2B. And then we also do all of our work in public, which I think is quite interesting for people. So it’s, you know, building in public or whatever you want to call it. We run experiments in our own business as we grow, and then we share all of the details and all of the insights and the specific numbers, how much we spent on each thing, what it returned, what worked well, and what didn’t work well. Um, and so that’s been gaining a bit of momentum as well. So that’s probably a little bit longer than you’re expecting, but that’s a quick intro.
Ritu: No, but I actually love that because you’re right, building in public, especially B2B, was immensely eye-catching. I remember following all of your updates, you know, with breathed breath, and I was frankly stunned at some of the results. And I would love to talk about some of those experiments today. But before we jump into that, um, tell me what a typical day looks like for you as a founder of two companies. Uh, did you always want to be a founder? Are you surprised at finding yourself as an entrepreneur now? How does it make you feel?
David: Um, it’s a really good question. I’ve known for a while that I wanted to run my own business. Um, so probably when I was relatively early on in my career, I realized that one day I would probably be running my own company, but it’s not like a childhood dream or anything like that. Um, in terms of running two businesses, I have to admit that’s not something I would recommend. uh, it’s been very, uh, stressful. Not really the time management side of things, but more for me, it’s just the mental bandwidth. Like I only have space in my brain for a few things. I’ve just found trying to run two businesses at the same time has been really difficult. So we’re actually in the process, this is kind of hot off the press, we haven’t really made it public yet, but we’re, we’re hiring a general manager for Teranga who will run that sort of day-to-day, and that will allow me to remove myself a little bit from there.
David: So, hopefully, that’s gonna add a bit more mental bandwidth. Um, in terms of the day-to-day, very simple. Um, I like to start work relatively early. Um, so I work from home. You can see I’m in my home office right now. Our team is fully remote, so we’re, we’re all over the place. We don’t have physical space. Um, I like to start pretty early. Um, I go for a walk with my dog, which is what I always do. Um, usually I’ll make myself some coffee, um, and then pretty much get to work. I like having the first few hours of the day as my work, the work that I want to get done. And then you’ll probably understand as a founder, as soon as you open the emails and you open Slack, and you get on meetings, like that’s the rest of the day gone. Uh, so I like to have at least a few hours off of my own work and then kind of jump into the rest of the day from there.
Ritu: That actually makes a lot of sense because I’ve, I’ve found that when you spin it the other way around, uh, you get so exhausted from the interactions that you’re not really able to do any deep work and that that really hits you badly in the long term. So, I get why you structured your day that way. Awesome. Um, tell me a little bit about the commonly misunderstood terms sales, growth and marketing. Let’s start from there. I know you feel that there is a difference. How would you segregate these for August notes?
David: Yeah, this is a really good starting point. I think starting with a definition is really, really useful. Uh, especially with the term marketing. It just has so many different connotations, and it’s really good to, like, understand what we’re actually talking about before we, um, before we talk about it. So for me personally, how I personally define it is growth is both sales and marketing. So for me, the KPIs when it comes to growth are revenue and profit primarily. So customer acquisition, revenue, profit, for me, when we’re talking about marketing, it’s more about getting attention. So the market message, going out into the marketplace, getting attention, people are putting up their hand and expressing an interest in what we have to offer. So the typical KPIs we’re talking about, there are going to be impressions, followers, subscribers, and then moving into like intent and leads and the more sort of transactional side of marketing. And then, for me, the sales process is taking that interest and converting it to customers. So as soon as we have some intent declared, it’s taking that and turning it into a customer. And that’s kind of how I think about it in my head.
Ritu:I think that that very accurately sums it up. And what do you think is the most misunderstood thing about growth or, you know, in the B2B sales space, growth is used so loosely as a term? What do you think? What do you think is the biggest misunderstanding around this terminology?
David: Yeah, I think the biggest thing for me, and, and this is really the, um, the cornerstone of a lot of our messaging within B2B business is, um, a lot of B2B marketing and B2B growth is either inefficient or ineffective, has been my experience. And the reason for that is, typically, if we look at marketing and, and what it is, it’s, it’s kind of amplifying your message. So whatever channel you’re using, whether it’s outbound messaging, whether it’s emails, whether it’s paid advertising, whether it’s a content-led approach, whether it’s leaflets through people’s doors, like whatever you’re using, it’s really just getting attention to the message. And so what I found is a lot of businesses have not spent enough time or not done it well enough, the actual definition of that message. And so what tends to happen is we do marketing, and it amplifies our message, but if the message is not optimized, and if it’s not resonating and hitting home with the customers properly or the prospective customers, then you don’t tend to get the results that you want.
David: And so for me, we need to take a step back first, look at how we find market resonance first, how do we find a message that really, really hits home? And for me, the best way to do that is with testing and iteration. Um, and then once we have something, that’s when we can really scale up that resonance. But what I’ve found is that business owners, they kind of say to themselves, you know, I want to grow, uh, I should do more marketing. You know, just, just get more marketing out the door, just do more things, uh, spend more on paid advertising, spend more on SEO, spend more on content. And actually, if you don’t have market resonance, then it’s not really gonna help you. You, you, you, you get in this feeling of like, you, you feel like you’re spinning your wheels, you feel like you are pushing a boulder uphill. Uh, and for me, once you’ve found something that really, really resonates, you kind of get the exact opposite, which is that you feel like you’re running downhill and just, you know, trying to keep up basically The dream for every entrepreneur.
Ritu: I, I totally get where you are coming from. I think we get so caught up in the actions of it that we don’t really look at the messaging that we are putting out. And I think every B2B SaaS founder or every founder out there has felt this lack of resonance that you’re, you know, you’re speaking into the void, but nothing’s coming back. And it’s just you keep trying harder and harder, and you do more of the same thing, and it doesn’t work. So, that really does resonate. Have you seen a lot of changes in the approach to growth over the years as the industry has changed? Because you’ve been in this space now for, I think, over a decade now, Coming up to 10 years?
David: Yeah, yeah.
Ritu: So, have the ways of marketing and growth radically changed over the last decade in your Estimation?
David: I would say so. Yeah, I would say so. I mean, I was thinking about this the other day. Uh, when I started in recruitment, LinkedIn wasn’t really a thing, like people didn’t really use it. I mean, I don’t know when it was actually founded by LinkedIn and when the platform started; probably it was longer than 10 years ago, but it wasn’t something that many people were on. Um, whereas now so much of B2B sales and marketing happens on, on LinkedIn. So that’s a huge change in itself. I remember my first day, and this is classic like old school sales, they basically just gave me a list of people to call and said, just call all of these people and find out if they want a new job, basically. Um, whereas now it’s a much more kind of content-led approach.
David: Um, and people are kind of, it’s more of an inbound model. And I would say, you know, you ask about changes, so obviously, social media has a huge effect. And I think one of the big things it’s done, and, and this is not a new concept, a lot of people in the growth and marketing space talk about this, is we’ve had to move to a more, uh, of a demand generation strategy. So broadly speaking, the kind of, um, what this means in practice is if you look at your marketplace, uh, generally speaking, only a small percentage of those people are ever in a buying cycle kind of interested in buying your thing. Something is, it’s, you know, if you look at your whole total addressable market, it might be like one to 3% of people who are ready to buy your thing. So they’re aware of the problem that you solve; they’re aware of the solutions that are available when they’re ready to buy your thing.
David: And typically, historically, we used to do all of our marketing towards those people. So it’s always how we generate leads today. How do we get signups? How do we put all of our content behind content walls so that people have to put in their contact information in order to get access to it? Nowadays, it’s much more about speaking to the other 97% of people and doing what’s called demand generation. So you are teaching and educating your marketplace, it’s a much more content-led approach, like an educational content-led approach, and you are generating that demand. So you are educating them, making them problem aware, making them aware of the problems they might have, making them aware of some of the solutions that are available to them. And then, in time, they’ve come to a point where you can then capture that demand, and they put their hand up and ask for a demo, whatever. But the main difference is that people are doing far more of the transaction happening prior to sort of the salesperson getting involved. Yeah. And so often what you find is if you take this approach, by the time someone speaks with you that, that they know about you, they’re ready to buy your thing. Um, and so that’s been a huge shift. So the kind of lead gen strategies I’ve found are less effective now. And actually, it’s more about educating your marketplace and then capturing the demand when people are ready to work with you.
Ritu: That sounds actually fascinating. Is that what you’re doing at B2B? Tell us a little bit about what you’re doing at B2B. I’m very intrigued.
David: Yeah. I mean, it’s exactly the approach we’re taking. Um, so we’re a growth partner, right? So we, we work with a handful of customers, we help them grow, and we’re only, we’re always gonna be capped in terms of the number of businesses that we can work with, but what we’re doing is we’re taking all of those insights. So what we’re using to grow our customer’s businesses, what we’re using to grow our businesses, and we’re just sharing it for free, um, on LinkedIn, YouTube, and, and other platforms, newsletter and whatnot. And so what we’re finding is it’s building a lot of demand for what we have to say in our offering, and then we can cherry pick the companies that we, we really, really want to work with, and the ones we feel we’re a great fit for. So yeah, I mean, it’s the exact approach and um, it works very well with our business because everything’s tied together. So we’re a growth company, and we’re building in public, and obviously, the quicker we grow, the better things we have to talk about, about building in public. And so it’s, it’s, it compounds quite nicely. Um, but you can do this in pretty much any B2B industry. Yeah.
Ritu: You’re literally talking the talk and walking the walk, and they can see that you’re delivering for yourself, and obviously that builds trust in that, that you will be able to deliver for them. Tell, tell me, maybe one of the experiments that worked for you at beetu.be, which you then talked about publicly.
David: Yeah, I mean it’s, it, it cuts both ways, to be honest, Ritu, because, it’s great when things go well, but like, for example, the last month or so has been much more of a plateau. It’s been much more about figuring out the actual product that we deliver and how it looks in practice and stuff like that. So sometimes you have less to talk about, and you’re, you are putting your neck on the line by doing it all publicly. Um, really are. The testing and iteration are really important. And so this is really fundamental to our process as a whole. So the process that we go through is we start with a hypothesis. So I like to try and use these scientific terms so that it kind of gets us into that mindset. We start with the hypothesis of our positioning. So we call this a product market fit hypothesis.
David: Um, so we need to figure out who we are targeting, uh, what’s the transformation we’re providing, so what’s the problem we’re solving or outcome we’re achieving, um, how are we doing, like what’s the mechanism we’re using to provide that transformation? And then what’s the price point and all of that kind of good stuff? So we need to start with a hypothesis. Usually, with an established business, we’re gonna look at your case studies and track record and then pull the insights from there. And for a startup or a new business, it’s kind of educated guesswork. So you’re gonna do your research, you might be able to line up interviews with prospects and kind of, sometimes you have to use, like, you have to bribe them to be there with like Amazon vouchers or Starbucks or whatever, but you just wanna get the insights from the marketplace.
David: So you speak with your marketplace, and you understand what are the problems that you need to solve, so you come up with a hypothesis. Usually, our approach is then to use that to create marketing assets, and we call these sales letters, which I think is quite American terminology. So, I don’t think it’s used much in the UK. Maybe it is in India. Um, but it’s, um, effectively what a sales letter should be is it should turn a cold prospect into a warm lead. So this could look like a lot of different things. It could be a landing page, could be a webinar or masterclass, could be some other kind of lead magnet. Whatever it is, it takes cold prospects and turns them into warm leads. So, this is the experiment we run. We make a hypothesis, and we use it to, to, um, create a marketing asset and then we need to test it.
David: And the only real way to test something quickly is to drive traffic to it. Um, paid advertising is a very good way to do that. Uh, if you don’t have the budget for paid advertising, then usually, we recommend some sort of outbound messaging. Um, and also, inbound through content is another method, which is slightly slower but can also be effective, especially if you’ve already got a personal brand. And so that’s kind of basically how the experiments are run. And we keep going until we have a market message that really, really resonates with our audience. Um, so some of the stuff we’ve talked about has been, you know, how we put these sales letters together. Um, we’ve run tests with, for example, LinkedIn ads, which has been one of our primary growth tools. So we have spent about 35,000 pounds on LinkedIn ads since we launched the business. Um, it’s generated a hundred and something in revenue. Um, at some times during that process, it was actually a lot of, a lot more profitable than that, which is a shame I should have stopped at that point. Um, we’ve done it. At the moment, we’re doing some tests on YouTube and some other more organic strategies. Um, so we’re just trying, trying to find what really works for our business and then just sharing those insights with the marketplace.
Ritu: Absolutely. Amazing. In your, in your decade-long, you know, the experience of having worked with different brands and different B2B sales organizations, um, what are some of the most fruitful strategies that you have, you know, seen consistently work? What are the basics that you would advise any B2B sales or B2B SaaS sales company to positively be doing from a growth perspective?
David: Hmm. Yeah, I mean, I hate to sound like a broken record, but it’s, it’s really about figuring out your positioning and the problem that you’re solving and how you actually help people. And is this something that people actually desperately want or not? And that’s quite a hard thing for people to hear sometimes. Um, but you’d probably be shocked at how many conversations I have with founders who can’t really tell me what their thing does. Like how does it actually help people? What’s the problem that they’re actually solving? And if you don’t have that, then the best marketing in the world is not gonna help you. So really, from our perspective, what we are looking for as a growth organization is we are looking for great products that solve great, you know, big problems, big, painful problems, and then we help them scale up. So really, marketing is just, it’s just getting attention to whatever you have. And if you are, if your product to service is not that valuable or not that good, then all the marketing in the world is not gonna help you. And so I know it’s a bit of a sort of cheesy way to look at it but focus on that first, and then once you have that, you can, you can kind of do all of the marketing hacks and techniques you want to actually kind of scale it And have, how do you tell founders, and, you know, I know this is a little bit off, off script, but how do you tell founders that their product is not a painkiller and it’s a vitamin because, you know, you are Somebody who’s been bought in with the explicit mandate of helping them grow, and it’s pretty hard to go back to Somebody who’s paying you and say, you know, your, your product just doesn’t cut it.
Ritu: How, how do you do that?
David: Well, I know I’m British, right? So we’ve, we’ve kind of, the stereotype is that we, we don’t really say what we mean, and as we talk around the subject, I’m pretty blunt for someone who’s British, so I usually will just tell them. Um, but I think that’s because, um, it’s what they need to hear often. Um, it’s pretty rare that we get to the point where someone’s paying us, and then we figure out that there’s no, there’s no sort of product market fit or resonance. It’s usually before that point. So it’s during the consultation process. And actually, sometimes people just need to hear that. Uh, and it’s not that they’ve done anything wrong. It just might mean that they need to pivot slightly, or they need to look at the market that they’re targeting or kind of how they’re positioning themselves. Or often, I think people will do this as well as they start with what I would call the mechanism. So like, when we talk about product market fit, you’ve got the niche of people that you’re targeting. Uh, you’ve got the, the, the problem you’re solving or the transformation you’re providing, and then you’ve got the mechanism for actually dealing with that transformation. So to provide that transformation And you have to solve it in order.
David: So you start with the people you’re helping, and then you figure out the transformation you’re providing, and then you figure out how, how the hell am I actually gonna provide this transformation? What I’ve seen a lot of people do, and this is very common in the SaaS world, is they start with the mechanism. I want to build a SaaS tool, and then they try and work backwards and like to crowbar it into a problem that needs solving. Whereas oftentimes, and I can think of at least a couple of examples, actually, some sort of consulting service is actually more what is required to solve that particular problem. Um, so that’s something that comes up quite a lot starting with the mechanism rather than trying to start with the niche and the transformation. And you have to be, and this is why you have to be scientific. You really, it’s, it’s very hard for us as founders to do this, but to take all of the emotion out of it, take all of the ego out of it and look at it objectively. And that’s why sometimes it helps to have someone like myself come in as a consultant who’s not involved in the day-to-day to kind of maybe give the, the, the hard truths where they’re necessary, Somebody has to do it.
Ritu: And I’m, I’m just glad it’s you.
Ritu: Awesome. Coming back, um, in recent years, what are some of the most exciting trends in growth marketing that you’ve seen? What are people doing and getting right? Um, what are the tools that they’re using that are helping them move faster? Is anything interesting that has caught your eye that you’ve incorporated into your business as well?
David: Yes. Well, I think the demand generation capture strategy that we talked about before is a really big change. And I would say the last maybe three to five years and more and more people are codding onto that. Um, the biggest thing for me is about getting as much leverage as possible. So there are now loads of tools out there that you can use to get leverage. Um, meaning, but what I mean by that is like you, you get more out of, sorry, it’s like the difference between how much you get out versus how much you put in. Um, so it’s like compounding effects, right? Um, so I think the smartest people in growth marketing, rather than trying to, let’s say, hire a huge team, they’re figuring out how we can actually take the best bits and, and leverage them up. And so, for example, we talked about sales letters earlier.
David: This is not a new concept. Um, you know, sales lessons have been around for years and years. Previously they would’ve been magazine ads or billboard ads or something like that. And what we’re doing is we’re taking that kind of old school methodology, which is great copywriting, great understanding of your customer, et cetera. Um, and we’re applying 2023 technology to that. So whether it’s paid advertising platforms, which are kind of infinite leverage, like if you have a good message, millions of people can see it with a, with a paid ads platform. Um, ai uh, is obviously a huge part of what we’re doing, but using video content. So I’m a really big believer in, for example, video sales letters. So rather than giving your pitch hundreds of thousands of times, put together a great piece of content that is your pitch, and then people will view it, and then they’ll come to you when they’re ready to buy. Um, so that’s the most exciting stuff at the moment for me is like, how do we, I have this concept called the minimum viable growth framework. So how do we grow with the minimum input? So less about kind of doing more marketing and more about how we grow with less and actually have a big, bigger impact with less.
Ritu: I know that would be of huge value, especially to founders who are, you know, practical founders, bootstrap founders who are looking to really get as much growth out of the money that they put in or the effort that they put in. Because effort for, you know, founders is equivalent if not more than money. Um, what are some of the things that, for instance, in the last few campaigns that you’ve seen have provided disproportionate leverage?
David: Yeah, so for me personally, and this is kind of what we work with with our customers if you can put a really good video sales letter together. So what is the video sales letter? It’s a piece of content. As I said, it converts cold prospects into warm leads. And again, this could be a five-minute sort of talking head where you’re just talking to the camera, or I’ve seen 60-minute-long videos where you are breaking down a whole bunch of things, and it’s very educational, so there’s no one size fits all. But if you can combine a great one of those with a great paid advertising campaign, you’ve basically got infinite leverage then because you’ve got your video, people can watch it, thousands and thousands of people can watch it. Um, and then with the paid ads, you can see that the distribution is insane.
David: Millions of people can see it. So this is exactly what we did to grow our business beetu.be when we started. So within the first 90 days, we’ve done nearly 200,000 pounds of revenue. And the reason we’re able to do that is we put together a very simple video sales letter, which is basically a kind of pitch for our service, uh, kind of masters, like an educational piece of content. And it was educational like you have to give great value in order for it to be affected. And then, we use LinkedIn ads to put that in front of the right people. So over the 90 days, we probably had about a million impressions. So a million people have seen it. Um, it probably generated something like 20 or 30 leads, and then a handful of those became customers. So that’s the quickest way to get traction very, very quickly, in my opinion, especially if you have the budget for the paid side of things.
Ritu: Nice, nice. I think that’s very, very interesting. Um, do you have a framework on how much you should spend for a certain lead or what’s a, what’s a good ratio? I mean, how do you know when you’re overspending to acquire?
David: Yes. Oh, this is so important, um, because it can go both ways as well. ’cause there are some examples where you could actually afford to spend more and, and you’re not. Um, so we talk about the co-customer acquisition cost to the lifetime value of a customer. So it’s the CAC to LTV ratio. So customer acquisition cost, how much does it cost you to acquire a customer? LTV is obviously, how much do you make throughout the lifetime of that customer? Generally, the way that I approach it is you want it to be a one to 10 ratios, ideally, in order to scale up really profitably, you want, um, so, for example, if you make a hundred dollars from a customer, you wanna be able to acquire a customer for about $10, ideally. So that’s like the ideal scenario. And obviously, there are, there are levels to it, and it depends on the business you’re in and your profit margins and all of that kind of stuff.
David: Um, the other factor to this is also how quickly you realize that lifetime value. So, for example, if it takes you a year to do the project and you are paid at the end then, and you spend 3000 pounds to acquire a customer, and you’re gonna get paid, let’s say, 30,000 pounds at the end of the year, that could still put your business in a position in a, in a problem because you’ve got 12 months to wait until that, that customer acquisition cost is liquidated. And so, as much as possible, we look for ways to liquidate that upfront. Um, and then it means you have that cash in hand you can then use to basically acquire more customers. And so that’s how you get a kind of infinite scale in that sense. So the two equations are customer acquisition, the cost to lifetime value, that equation, and then also how quickly, what’s the time taken to liquidate that customer’s acquisition cost? Does that make sense?
Ritu: It actually does because, um, a lot of businesses have a sales cycle where it takes time to, you know, first get the lead, acquire the customer, get them to sign up, and then servicing the customer. So working capital issues can, can really cripple your business. And if you don’t have enough money to roll back into acquisition, you are living customer to customer, which is a rather dangerous place to be, nerve-racking.
David: Yeah. Yeah, I, I can totally, and as a bootstrap founder, I think those, those are, uh, hugely impactful because, you know, as venture-backed startups, you still have a little bit of a cushion that allows you to ride out a sales cycle.
Ritu: Yeah. But if you’re a bootstrap pounder growing, you know, the healthy way, it can be very, very stressful at times.
David: I completely agree. And I, I am, for me, I’m so much more excited working with established businesses and bootstrap businesses because it becomes more of a challenge to like, how do we do this profitably? The problem with the venture-backed approach is that you become a bit lazy with your marketing because you can just spend as much as you want to acquire customers. But what I’ve noticed, and you know, I won’t mention any company names, but I’ve spoken with businesses where they’ve got themselves to a point where they’re not really particularly profitable because the customers they’re acquiring is that there, their LTV to cap might be one-to-one, for example. And so you can easily get yourself into a problem if you have that injection of money. Obviously, if this is a whole different conversation that we don’t need, we need to get into. But from a marketing perspective, a lot of marketers love working with unicorns and venture-backed startups and stuff. For me, I’m more interested in the, the kind of bootstrapped approach or the, the sort of ordinary businesses, um, that are trying to do things in a kind of, like I said, minimum viable approach.
Ritu: That’s absolutely fantastic. And on that note, I know I’ve already taken up a lot of your time. Uh, what is, as, as a wrapping up piece, what would be the, I think, the top three tips you would give to marketers regardless of whether they’re part of a marketing team or the founding team? Because, you know, in early businesses, the founder does everything. What are the three key things that are must-dos from a growth perspective?
David: The great question. Um, so for me, I mean, something that I would tell anyone, whether they’re early on in their career or, or later on, is I think the difference at the moment is learning how to learn if that makes sense. So everything is changing so quickly. Even in the last 12 to 24 months, the landscape has changed massively in lots of different ways. And so actually having knowledge is useful, but much more useful to be able to acquire knowledge and learn things quickly. To learn how to learn for marketers. I still think the biggest skill is copywriting. So to be able to, uh, articulate and communicate ideas in writing is such a powerful, um, thing to be able to do. Um, and then I’d probably say just don’t worry about making mistakes, running experiments and getting things wrong. ’cause, again, I think that’s a huge thing that will separate the winners from the losers over time.
Ritu: Absolutely. Fantastic. Thank you so much, David. This was such a wonderful experience to hear from you because you’re in the trenches. You’re doing the work, not just for yourself. You’re doing it for multiple companies, and this kind of experience is absolutely invaluable. What we will do in the podcast is, of course, include links to your site. Uh, we would also love it if you could share the link to the video collateral or the asset that you had created for your business, which got you such fabulous returns. I think it’d be very helpful for marketers to see that and get a sense of what you actually did. Um, obviously, they can’t copy it, but I’m sure they’ll be inspired by it. So we’ll definitely include all of that in the podcast links. And, of course, the team, uh, people will know where to find you either on Kanga or on LinkedIn or on B2B. But thank you again for spending time with us. It was absolutely lovely to have you on Heureka, and we hope this message reaches as many people because I know there are a lot of founders who need this help, who I hope are gonna be listening in.
David: Thanks. It was really good to be here.
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