00;00;09;21 - 00;00;30;29

Unknown

Welcome to the Profit First for Real Estate Investing podcast. Every week we bring you top investors and experts sharing how they create clarity, cash flow and consistent profit. This episode is brought to you by simple CFO. Profit first. Profit always lets go. If you want to get better at marketing your real estate investing company and getting leads in the door.

00;00;31;00 - 00;00;51;12

Unknown

This is the episode for you. Brandon Bateman is a huge fan of Profit First. He also has an agency that he runs, but he gave actionable steps today. He gave the actual KPIs, key performance indicators, some of the numbers that you should be tracking in order to know if your marketing is working. And they weren't the ones that people normally talk about, so I thought it was great.

00;00;51;14 - 00;01;15;10

Unknown

He gave for actionable numbers to be able to make a difference in your business right from this episode. He also gave some of the biggest keys because he's done. He has spent over 100 million in marketing spend just for the real estate investing community since he started this business years ago, and this is an action packed episode for you to be able to take back and say, what do I need to do in order to make my marketing better?

00;01;15;10 - 00;01;35;25

Unknown

So that way I have more money so I can keep more of that money as well too. Once you've implemented profit first. So in this episode, take from it make sure you're somewhere where you can either pull over to take notes because there's actionable items from this podcast. Enjoy the episode with Brandon Bateman. Welcome back to the first Ray show.

00;01;35;26 - 00;01;57;17

Unknown

I am excited Brandon Bateman is here in the studio again. Brandon, thanks for being on. Yeah, I'm excited to be here, dude. And you're someone that I would have on here basically every quarter, I believe, because you cover an area of the market where you help people make money, where we help people keep money. You have to have that yin to that yang.

00;01;57;17 - 00;02;13;09

Unknown

And so I'm really excited about having you back here. We're just going to dive right into it. So I'm going to just start hitting you rapid fire with these questions and just see what your answers are and see what we could give the audience today. So hopefully you're ready to go and we'll just dive right into it.

00;02;13;13 - 00;02;36;08

Unknown

So you've overseen more than $100 million in digital ad spend for the real estate investing community up to this point, which is just that's a huge number. That's like a really big number. That's a lot of ads going out there. Do you see one of the biggest financial mistakes out there, like, what do you see as one of the biggest financial mistakes that most investors make, especially when they're putting their money into paid marketing?

00;02;36;11 - 00;03;00;13

Unknown

Yeah. Great. Great question. There's I guess I have a couple answers. So number one, yeah, the if we're just talking about things that the investor themselves can easily control, the probably the most common mistake that we see is just overextending on marketing compared to what you can do. And when I refer to overextending, what do I mean by that?

00;03;00;19 - 00;03;21;07

Unknown

I mean you have to be able to be sustainable with whatever it is that you're doing. So for like launching a new marketing channel for us, usually we're telling clients it depends on the marketing channel, like like PPC, for example, is a little more of like a midterm marketing channel. It's, you know, it's not like a vending machine, like the, like the people companies, but it's not.

00;03;21;08 - 00;03;40;26

Unknown

See where it takes a really long time. In that case, we like for our clients to have kind of six months of funds for that marketing channel set aside so that, you know, you're not going to have to have to cut it off after month one if things aren't working out the way that you hope. Because we know sometimes you have to be able to fund a couple pivots at the beginning to get it where you want it to be.

00;03;40;29 - 00;04;00;04

Unknown

SEO, on the other hand, that's more like you should probably be ready to fund 12 or 18 months of that upfront, or else you won't get to the end result. So. So when we're talking about financial mistakes, it happens all the time. Someone says, you know what, I want to invest in the long term, my business. I want to do so because they if everybody knows it's one of the best return on investment marketing channels over extended time horizon.

00;04;00;05 - 00;04;26;16

Unknown

But guess what? Not doing SEO, that's okay. Doing SEO and being consistent. Consistent with it. So you can arrive at that point where you're getting those ten returns that people talk about from SEO, which is actually average, believe it or not. Also, okay, spending money on SEO for three months and then running out of money and then not actually getting to the end destination of what you wanted from the CEO to get a return on investment, but also still having to spend three months of money on SEO.

00;04;26;19 - 00;04;43;01

Unknown

Worst possible outcome? Don't do that one right. But so many people end up doing that one because they, you know, at a cash rich part of their business. They say, you know what, I want to invest in this long term thing, but then they don't have the ability to stick it through. So PPC which is paperclip, you said mid-term.

00;04;43;01 - 00;05;03;16

Unknown

So how many months would you say to get up and running for PPC? Six to I think it's really smart to be ready for six six months. When I say that, a lot of people think it means like you won't get a return until six. Really, the reality is it probably will take till six to get it dialed in, but leads should come in in the first week.

00;05;03;18 - 00;05;18;23

Unknown

Yeah, it's not a channel that like, takes forever to get the leads. SEO, on the other hand, when I say it takes some time. Like you won't get leads for a really long time. PPC is more like, well, the leads will start coming in. It'll take you some time to to get the return dialed exactly the way you want it to, or even just to get the sample size right.

00;05;18;24 - 00;05;34;23

Unknown

So it's not like you get nothing until six months. It's more like six months. That's where you officially have enough data to say what you got. Yeah. And you really don't want to be forced to cut it off before you really give them it that full time period. And then people like you said. So that's pay per lead.

00;05;34;25 - 00;05;59;20

Unknown

That's where what do you see on that side. Do you see that being how many months like would you invest into something like that? Well the interesting thing is that we don't do pay per read. We just do like PPC and SEO. But of course many of our clients are doing paper read on the side, and many of them kind of view it as similar to PPC, although I think, you know, there are really different marketing channels, or at least they know more similar than pay per lead and direct mail for lead in TV or cold call.

00;05;59;20 - 00;06;18;07

Unknown

So the the thing that's different about paper lead compared to PPC as it relates to time frames is there's zero ramp up time. The paper lead company, they've already ramped everything up. You're just buying the product of what they're doing. So so you don't really have to worry about this idea of well did it take some time to dial it in?

00;06;18;07 - 00;06;35;19

Unknown

It's already dialed in to the extent that it's ever going to be. Dial did. Yeah. Now, the biggest concern about paper lead is that state of being dialed in to the extent that it's ever going to be dialed in, is usually a worse state than it is with PPC. That makes sense. So with PPC, maybe you're dealing with a little bit more of like ramping it up in the beginning.

00;06;35;19 - 00;07;06;25

Unknown

But the cool thing about PPC, compared to people with people, you get what you get. You buy the leads. The leads aren't good. It is what it is. PPC you're you're tracking your data. You're optimizing. You have the ability to spend more on these keywords, not on those keywords. You have the ability to launch a new landing page variant that gets you a better percentage of your clicks, turning into leads like there's so many optimizations you can make that it tends to happen that the return gets better over time, and you can make it more you know you can make it better, fit exactly what you need in your business versus pay per lead.

00;07;06;25 - 00;07;30;23

Unknown

You just kind of do it a little bit. If it works for you, you continue to do it. If it doesn't, then you know, you shut it off and try something different. So there's not much optimization on people. The paper lead versus paper click or even SEO. And on the paper click side and the C.O. side. We have to be able to invest so we can see the returns and see the data, at least to be able to see if we're getting those returns that we really want to.

00;07;30;24 - 00;07;52;13

Unknown

Because like you said, the worst thing is underfunding it and then running out of those funds and being like, what did I just do? You know, I didn't get enough of the return. I didn't get enough data. I didn't get enough to see if this is worth it. So a lot of times then it seems like they need to, as a real estate investor, be in business enough where they can spend on marketing on a consistent basis.

00;07;52;14 - 00;08;10;00

Unknown

This can't just be oh my gosh, this is my last check. I hope PPC works out because I'm just starting it or SEO even worse, right? It sounds like this is my, you know, my last check here. Hopefully that this one, you know, this SEO brings in a ten x return. So that's what it sounds like. You stressed out and that's.

00;08;10;02 - 00;08;24;17

Unknown

Yeah, I'd be stressed out in that situation. I mean, I just talked to a client the other day. They're like, yeah, I basically put like when I started with you guys, I put it on a credit card and crossed my fingers, and here they are like years later and it all turned out great. But like I that's not a strategy for your business.

00;08;24;18 - 00;08;41;05

Unknown

That's that's called luck. Yeah. They love them. I'll take it when it comes. Yeah. Exactly. Like, you know, there's someone who went to Vegas and they did great. Good for them. That's not my strategy, right? That's not my business. Let's go into the blackjack table and seeing if this. I'm hoping it just hits every single time for me, so.

00;08;41;12 - 00;09;06;06

Unknown

Okay, that makes a ridiculous. David, what you just said sound absolutely ridiculous. And that's what people are doing when they basically try a marketing channel for 30 days and they're like, I hope it works. Yes, exactly. And we see that a lot of the times, and that's why we're here, and that's why there's even companies like yours out there to help investors through that and become better business owners, because obviously you want to get them leads in marketing, but you're helping them from that marketing standpoint and that vision of marketing.

00;09;06;06 - 00;09;31;09

Unknown

So that way we have conversations like this of how do I really think about this? What's my long term investment here? And not just, man, I'm rolling the dice. Hope this works out. So now let's talk about people's marketing budget. So if a real estate investor is listening to this obviously it's the first podcast. So I wanted you to give a little bit of what you think percentage wise they should be spending as part of their, you know, their gross profit or revenue, whatever.

00;09;31;09 - 00;09;49;02

Unknown

I want to know, what do you suggest people spend in their marketing? Quick pause from the episode. I have exciting news that's expanding the world of profit first for real estate investors. You may know that years ago I wrote the book Profit First for Real Estate Investing, endorsed by Mike, that has been read now by thousands of real estate investors.

00;09;49;02 - 00;10;16;22

Unknown

And now we're launching three workbooks, one for wholesalers, one for fixing flippers and one for rentals. These aren't just deal calculators. They're full implementation guides. They're dialed in for each type of business wholesalers you're getting assignment fee math, marketing, budgeting, planning, and how to beat the feast or famine cycle. If you're a flipper, you get ARV accuracy, rehab, budgeting and profit forecasting, and running multiple projects at once without going broke rentals.

00;10;16;22 - 00;10;37;26

Unknown

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00;10;37;28 - 00;11;03;02

Unknown

That's p f r e I workbook. Just like profit first for real estate investing. Free workbook. Grab whichever matches your business or you can grab all three free workbook. Com go get them make more profit. All right back to the episode. Yeah that's a good question. So it depends what it depends on in my opinion is your exit strategy.

00;11;03;03 - 00;11;20;06

Unknown

Yeah. So say a pixel flipper first and then maybe wholesale or some of the major ones that we cover. Yeah. Maybe you might have some opinions on how to structure some of this stuff. I have my own opinions, but they were just my own. You. You're deeper in this kind of thing than I am. What I can tell you is for a fixing flipper.

00;11;20;10 - 00;11;40;18

Unknown

I think what gets ignored sometimes is that they make some of their money on the by, and they also make some of their money on the value add. So that's true when I've seen many effects and flipper that we talked to and they're like, oh, you know what? I'm okay. Like my marketing campaigns, they're performing pretty well. We got A3X and I look at it like, well, three x if you're flipping is actually kind of low.

00;11;40;18 - 00;12;09;28

Unknown

And I've talked to people like that before where we look at it and we're like, if you were wholesaling, you'd be at like a point five x, meaning you might as well just go buy from wholesalers because they're making so much money on the value add and so little on the buy or like. So with this particular company I'm referring to now, what was actually the problem was because they flip, they, you know, they got a little bit lax on their prices that they were buying the homes at because it's like, well, we can make it work a little bit higher.

00;12;09;28 - 00;12;29;16

Unknown

And what he realized, he ended up actually revamping that whole team. And they were able to significantly increase their deal spreads because they just weren't buying as deep in acquisitions as they should have been. But if you flip right, it should be possible that you could run like a wholesale company within your flipping company, and that wholesale company within your flipping company generates its own profitability.

00;12;29;16 - 00;12;47;25

Unknown

And then the value add that you're doing on the flips generates its own profitability. On top of that, it's like you're running two different businesses. Yeah, sometimes they share a pal, but a lot of a lot of sophisticated flippers. They have separate panels for those two, for those two different businesses. So in that case, what should it be for flippers on average, we actually just do the survey of investors.

00;12;47;28 - 00;13;16;01

Unknown

And the average investor that was flipping was about 20% of if they exclusively flip 20% of their total, their total as they count it as like their their net revenue. After you've like what you're taking on the flips minus all the, you know, cash, carry costs and all that kind of stuff. The wholesalers, on the other hand, they were closer to about 30 to 35, actually, I'm sorry, 30, 35% was the average investor.

00;13;16;02 - 00;13;34;23

Unknown

The wholesalers themselves in our survey were about 40% of their revenue was spent on marketing. Now, do I think it should be that way? I think 40% is a little bit high personally. But if we're talking about that's 100 investors that reported all their numbers and that's where they're averaging. So it's important to recognize I think 40% is high.

00;13;34;24 - 00;13;53;00

Unknown

But I also think that's some of the faults of the wholesale only business model is that, you know, it tends to run a little thinner margin versus if you can get like even some whole tails in there or something where you get a significantly higher spread than you do from, from just wholesale, because, you know, when you're when you're wholesaling, you are a motivated seller, right?

00;13;53;00 - 00;14;06;25

Unknown

Yourself too. So you still sell it at quite a discount. So I don't know if that gives you a range like 40% on the high end, 20% of the low end, kind of depending on what your exit strategies are. And of course we want to get that as we want. We want that number to be as low as it possibly can.

00;14;06;27 - 00;14;32;05

Unknown

That's what like not necessarily our clients but just investors in the industry. That's what we see they're dealing with now that makes sense. Do you work with people that are just buying for rentals, and do they look at that marketing percentage differently since they're not usually selling the property? So I personally yes, yes, we absolutely have. I think my favorite way to look at it when you're doing rentals is kind of the same way I would with flips, which is what would I have also held this property for?

00;14;32;07 - 00;14;54;00

Unknown

That's how you prove that your direct to seller arm is really proven its value. It should be true. Maybe I'm keeping this property because I'm keeping it. I've got 100 grand inequity, but I could have wholesale it and made 40. Well, in that case, the whole business model has to fit within the 40. But you know, I've got this extra 60 because I'm choosing to do the buy and hold them instead.

00;14;54;01 - 00;15;26;18

Unknown

That's that's a pretty common way that we count them. Okay, cool. So it's more of that than it is the percentage or whatnot that they have. It's so you've got the different buckets depending on what their exit strategy is. And that's why it's the depends question because it obviously the different strategies really dictate that. And I like what you said at the front of that question where you're like, well some flippers have you know they wholesale that you know, basically they're wholesaling it to themselves sometimes and then you're able to see, okay, how much percentage really was it if we're making the money that, you know, in both aspects, and then you even gave the

00;15;26;18 - 00;15;43;15

Unknown

breakdown of wholesale and flip and then rental and just the different aspects. So if you're listening to this, this is good stuff to write down and go back and look in your numbers to see, okay, where do I fall right now inside of my business with these percentages? Am I on the high end or am I way over the high end, or am I not anywhere near it?

00;15;43;15 - 00;16;00;10

Unknown

And I'm not spending enough? Because sometimes, Brandon, you probably see this people are not spending enough on their marketing. Do you see that a lot in this space, or do you see it more on the other end where they're just like, they're just spending too much? Do you ever see, like people on the lower end as well? You know, honestly, I don't know which one is more common.

00;16;00;10 - 00;16;22;26

Unknown

I feel like we really all so people understand for sure, because you get some of these people that just get in my opinion. Now this is we're moving into preference world here. Right? Right. Not facts right. Activity but subjectivity. Absolutely. So I do see a lot of people are just like they're like well yeah, I you know, I look at my great returns on investment in my marketing.

00;16;22;28 - 00;16;44;02

Unknown

Yeah. Look at this. I'm hitting ten x on these channels and stuff. And usually what's happening there is you're kind of just taking the cream of the crop of some particular marketing channel. And there's a few downsides to that. Number one, you're not diversified across channels generally. You're just really, really hard in one, which means when when that hurts you, it's going to hurt you big.

00;16;44;04 - 00;17;07;20

Unknown

You know, concentration sounds great until something happens. And then diversification sounds like it would have been a good idea all along. Right? But of course, concentration always beats diversification in the short term. Right. So diversification of the long term gain. So I do see people that are too concentrated in that circumstance. The other thing that we see is yeah just part of that concentration is, you know, they're not spending the whole amount that they could on that channel.

00;17;07;20 - 00;17;21;15

Unknown

And the totally depends on your preference, because some people just want to run a business with really not that much revenue but really high margins, which is, which is great to have that, which is great to have that preference. But I do see some people kind of locked in that mindset of like, I can't spend more in this.

00;17;21;15 - 00;17;38;24

Unknown

And because of that, they want like, if what you want is just to have that revenue level, fantastic, good for you. But what you want is a skill. You're going to have to spend more on marketing that we had a conversation with, with one of our clients at the start of the year, and we were kind of going over the whole like yearly plan.

00;17;38;25 - 00;17;53;27

Unknown

We're like, well, tell us, tell us about last year. You know, what was what was your business like compared to the year prior was like, well, I was actually 50% under my goal this past year. Oh, shoot. Well, where was it compared to the year prior? It was it was about the same as the year prior. So we wanted to double, but we didn't double.

00;17;53;28 - 00;18;14;13

Unknown

Okay, well let's look at your marketing spend. What did you spend last year? In his case it was like something like 300, 400 grand. Okay. Well what did you spend the year prior? 300, 400 grand. Okay. So we spent the same and we accomplished the same. Right. And we underperformed compared to our goal of doubling the business. What do you think we should do this year?

00;18;14;14 - 00;18;31;10

Unknown

I should probably plan to double my marketing spend if I want to double my revenue this year. Yeah, that's probably what you should do in hindsight. It's like obvious, so obvious. But when you're in it. It feels like it's never the right time to scale it, or you got this other stuff that you got to figure out first or whatever the case is.

00;18;31;10 - 00;18;43;03

Unknown

So there's definitely it kind of depends. Like I think different people have different mindsets. Some are way too liberal to spend, and they just blow the budget out of the water. When they don't have the team to support it. They're going to be like drowning in the leads. I'm not going to make the most money from them that they could.

00;18;43;05 - 00;18;58;23

Unknown

They don't have dialog and dispositions before they start doing more acquisitions. Like all those things are problems. And then for everybody, every person you have like that, you have another person who's just afraid to spread, to spend the money that they need to to grow their business. And neither of those paths is the right path. Like, you have to kind of find that balance.

00;18;58;25 - 00;19;22;09

Unknown

Yeah, that's really good because that's probably just all business. I think that's just the life summed up right there. Right. Like, this is the secret to life. From Brandon Bateman on The Profit. First I just find that balance between everything because yeah, we see that too. You know, people just going crazy on the marketing spend, but then people, they're just like, we're not spending what you need to if you want to get to where you want to go.

00;19;22;09 - 00;19;36;15

Unknown

And like you said, it's usually they're just in the thick of it. Whether it's on either extreme, they're just like, well, just throw more money at it or they're like, no, stop throwing money at it. And, you know, shut it down. You know, for a while it's like, well, wait a second. That's not going to help you get to where you want to go.

00;19;36;15 - 00;19;58;14

Unknown

So that was very, very helpful because a lot of people, I think, need that kick in the pants, you know, from time to time, just to be able to know what they need to be able to spend. I did want to ask about KPIs. So key performance indicators are there some because you have a component of getting on actual calls with people like you and your team and going over their marketing and helping them with that vision?

00;19;58;15 - 00;20;19;22

Unknown

Are there any KPIs that you help them measure around the marketing and translating that into that profit that they want to get to? Or, I mean, you already gave a great example there, like you wanted to double, you didn't spend as much, you know, you spent the same thing. So are there other like actual KPIs that you help people identify that will help them make decisions in their business?

00;20;19;24 - 00;20;36;22

Unknown

Yeah, I would say some of the biggest things that we do, we're comparing marketing channels against each other. And in my opinion, there's four KPIs that really matter when you're comparing one channel to the next. The first one everybody knows about ROI. ROI is a huge one for how many dollars you put in, how many dollars do you get out?

00;20;36;22 - 00;20;58;04

Unknown

And it's a obviously, it's an important metric. Where I think it gets overplayed is it's treated as if it's the only metric for marketing. Okay, sure. That's not true. There's there's more than just ROI. And in fact, we have many clients that have actually worked with us to lower their ROI and improve the profitability of their business. How does that happen?

00;20;58;04 - 00;21;22;16

Unknown

Because of all the other things that actually matter in the channel. So ROI, I would say though, it's the most important one. I just think it's people forget about the other ones too. The second one is the quality of the lead that is generated from the marketing channel. So one thing that we saw in the survey that we did with all investors, where we basically collected their NLS from them, is investors that have a high number of leads per contract in their business.

00;21;22;16 - 00;21;42;27

Unknown

They have a lot of operational expense. So do the revenue that they do. Right. If you can achieve the same revenue with a significantly smaller number of leads, then it turns out your operational expense is a lot lower. And why is that? Well, less leads means less salespeople, less lead managers. That means less leadership over all those people and operations people to support them.

00;21;42;27 - 00;22;07;13

Unknown

And like the entire company, kind of scales down according to that. I just interviewed a client on our podcast a couple of weeks ago. The guys one marketing channel, just PPC, great lead quality, solid strategies, solo operators, zero employees, seven figures in revenue. How is that possible? Because he's got the right lead quality that supports that type of business.

00;22;07;18 - 00;22;23;21

Unknown

If he was, you know, surviving on much lower lead quality, then he wouldn't be able to do seven figures in revenue with essentially a single acquisition and dispositions person, which is he would have to have like lots of people to work through those things. So so lead quality is another one that's important. We like to measure that in terms of leads per contract.

00;22;23;21 - 00;22;42;29

Unknown

If you're if you're killing it on leads per contract, overall ten is usually about as good as you can get. On if you're doing really poorly with some channels like Cold Call, you can get as bad as like 100l per contract. So we're talking about a differential layer of ten x, the number of leads to make a deal happen.

00;22;43;01 - 00;23;01;23

Unknown

The next one is the total volume the scale of the marketing channel. Like what's more exciting David. Like you give me a you give me a dollar, I'll give you ten, or you give me $100, I'll give you 200. Probably you give me 100, I'll give you 200. It's a lower on investment, but you're able to do it at a higher level of scale.

00;23;01;24 - 00;23;20;00

Unknown

Exactly. Yeah. So that's that's the that's the third one that's really important is we want to want to see it's the standard path of scale for real estate investor is you lower your ROI and you increase the scale. And you do it in your margin out a little bit. And but now you're producing a lot more revenue. You should become more profitable if you do it right.

00;23;20;01 - 00;23;39;10

Unknown

Of course. I'm I'm sure you've seen this the first on the back end. So that's that's right. I'm sure you and I, you and I are seeing that go wrong a hundred times. Yeah. And we've also seen to go right a bunch of times too, right. So that's that's the game if you can figure it out. And then the final thing is cash conversion cycle, which I'm sure is a big metric that you guys focus on.

00;23;39;11 - 00;23;57;25

Unknown

Two firms out the cash and conversion cycle for different marketing channels is different. I like to compare this to, let's just say I'm a hard money lender, and I give a loan on a $500,000 house. Next quarter comes back to me, and then I do that three more times this year. So every quarter I've done one more loan.

00;23;57;26 - 00;24;16;29

Unknown

How much money did I lend out this year? On one hand, you could say I lent out $500,000 four times. On the other hand, you could say I lent out a total of $2 million that year. Well, it turns out the way that we measure marketing, we usually would say, you spent 200 and you spent $2 million that year.

00;24;16;29 - 00;24;35;14

Unknown

But the way we measure finance is often we would say, you let $500,000 four times. But that's the difference in the cash conversion cycle is if the marketing channel brings it back faster, your money was out for a shorter period of time, and then the new money that you're spending is just the money that came back from the first time when you spent money on that marketing channel.

00;24;35;15 - 00;24;53;08

Unknown

So it effectively, if you have a marketing channel with a fast cash conversion cycle, you're effectively not needing to float quite as much cash to keep it out, which as far as business profitability, it all starts to equalize and makes sense once you get past your cash conversion cycle. But as far as cash flow makes a massive difference in the business.

00;24;53;08 - 00;25;15;16

Unknown

So that's like one. For example, if we're comparing a couple of channels, we manage, PPC is a fast cash conversion cycle marketing channel for 1.4 days, medium between when the lead comes in and when. So so we actually pay after the lead came in, and we're 1.4 days from when the lead comes in to when it goes under contract.

00;25;15;16 - 00;25;32;13

Unknown

So practically the only part of the cash conversion cycle for PPC for your typical lead, of course, is that long tail of the one that closed three years later or something. But for the medium lead, it's basically just the time between when you get that under contract and when it closes, that's your cash conversion cycle versus something like SEO.

00;25;32;15 - 00;25;52;09

Unknown

You spend, you spend less each month on it than you do on PPC, typically. But, you know, you might be 12 or 18 months down the road before the first money actually starts to come back. So that's, you know, those are the four essentially that we think about when we're comparing marketing channels to one another. And if you I think a lot of people look at ROI only.

00;25;52;11 - 00;26;09;10

Unknown

Yeah. But if you look at, well, what happened, if you have a high ROI marketing channel versus a slightly lower ROI marketing channel, but the cash comes back fast and it happens through very few leads. So the quality is really high. So you don't need as much staff to support it. And you can produce a lot of volume with that marketing channel.

00;26;09;14 - 00;26;27;01

Unknown

Which one is going to produce the better business? The second one, as long as the ROI is acceptable. All those other factors matter a lot to awesome. Those some of those are different than I might. I thought you might have said, which I really like that because sometimes people, when they're talking about marketing, all they focus on is ROI number one.

00;26;27;01 - 00;26;45;27

Unknown

But then like cost per lead, cost per contract, which those are important. But I really like yours. It takes a couple steps deeper than just the surface level cost per contract, cost per liter. You know, looking at these quality of leads per channel, the volume, the cash conversion cycle, things that matter with the business as a whole versus just that lead.

00;26;45;27 - 00;27;01;24

Unknown

And like that one thing at one time. So and you know, all that other stuff, we love it. We measure it. Here's here's where it fits into that puzzle. All that other stuff only matters to the extent that it influences ROI, right? Why do I care about my cost per lead? Because it changes the ROI. Why do I care about my leads for contract?

00;27;01;24 - 00;27;27;21

Unknown

Because it influences the ROI. So like the way I view it is all those metrics are like our standard funnel metrics and they sit on the funnel versus down. Yes, exactly. And they're so important because they help us know if we're on track for a certain ROI or we're not. And once those get us to a certain ROI, the other thing is better to and as a business owner, I think like a lot of that stuff is important as it, you know, situational, important.

00;27;27;21 - 00;27;40;23

Unknown

But of course we got to zoom out, but we're looking at the forest right now. Those are some of the trees. Of course, when you're running these things, you're gonna have to look at the trees to. And if you have a good partner that knows what the trees are supposed to look like, that makes a big difference. Yes, it does for sure.

00;27;40;24 - 00;27;59;22

Unknown

So no, this is good, good stuff. And I like how you said that this is downstream marketing. So marketing KPIs. So that way you can see okay how do those upstream things affect the end. But these are the things that matter the most when you're getting on the call with the clients. And if you're listening to this, this is good to add to your so to your KPI list.

00;27;59;22 - 00;28;25;05

Unknown

So if you're listening to this go back, write those down. Just start to track one. If you're not tracking ROI at all, like track ROI from here to something if you're not doing anything. So I guess I gave them one step. But I wanted to ask you as well too, as we're winding down here for an investor who's never run paid ads before, what's the simplest first step to test the waters without overspending or under spending?

00;28;25;08 - 00;28;43;17

Unknown

The most simple first step is typically that you're going to you're going to want to work with an agency. There are some people who try to do it themselves. I'd say it's not the standard, and it takes a bit of a special person to be successful with it. So most of the time what you're doing is you're going to work with an agency.

00;28;43;24 - 00;29;02;06

Unknown

So that's the good news about that though, is when you when you work with an agency, they're going to help you through these steps. They're going to know what it's supposed to look like. They're going to help set expectations and all that kind of stuff. So we're going to see the things that you're going to have to figure out with that agency basically comes down to an initial timeline for a campaign.

00;29;02;07 - 00;29;20;21

Unknown

The goal for the campaign, the budget for the campaign. Those are going to be just the initial things that are agreed upon. And usually what that's going to look like is something like six months. The budget is going to it's going to range a little bit. Not a lot of people are pulling off these kinds of channels successfully with less than, say, five grand a month.

00;29;20;24 - 00;29;44;00

Unknown

And anywhere from 5 to 10, we find is pretty normal to start unless you're in some type of unusual situation. And of course, higher than that is is okay as long as your markets not one where that's not okay. So that's where you got to talk with the agency that like knows knows what they're talking about. But for us like 5 to 20,000 a month is really normal starting place depending on the size of the business, how much marketing budget you have, all that kind of stuff.

00;29;44;00 - 00;29;59;11

Unknown

So that's the key thing that you have to think before you're deciding. Do I go like start exploring this? I think, well, 5 or 10 grand a month multiplied by six months. Is that a number that you feel you can set aside for a marketing channel like this? And if the answer is yes, then then you might be ready.

00;29;59;12 - 00;30;33;08

Unknown

The other criteria I would look for is do I feel like I'm ready as a business to be able to make the most out of these leads? Because if you if you jump towards a channel like PPC, the leads are going to be better quality and they are going to be more expensive. So if you're going to be making a lot of mistakes like lead slipping through the cracks, or you're not calling them quickly, or you just blow it on the phone because it's your second seller you ever talk to because you don't know how to do sales yet, because everybody sucks at first, and then we get good at it over time.

00;30;33;09 - 00;30;53;29

Unknown

Like if any of those things are true, might not be ready yet, because when you blow it on that call with a $400 PPC lead, it's a different experience than when you blow it on the call with a $40 cold call lead. So, you know, maybe, maybe, maybe get your being bad at sales out of the way with cheaper marketing channels first, and then you kind of step it up in the league quality.

00;30;53;29 - 00;31;13;21

Unknown

But if you can fit those criteria, you feel like you can make the most out of these leads and you can be consistent with funding the campaign, then. Yeah, then work with an agency and they'll help you figure out all the rest. If you want to work with us, we yeah. We're happy to to like reverse engineer your end outcome that you want, which typically is in terms of return on investment over some type of time period.

00;31;13;21 - 00;31;27;16

Unknown

And we'll help figure out all those lady metrics, what they have to look like, what what cost per click. Are we going to need to make that possible and is it feasible to be there? Same with cost per league. What about the rate that leads to opportunities? Once our leads per contract going to be we'll map all that out.

00;31;27;16 - 00;31;43;10

Unknown

And then you should be working closely with your agency month over month or sometimes a couple of weeks or a couple of weeks. Kind of depends on the budget, but you should work closely with them to make sure we're on track and fix it if we're off track. And the reality is you're always a little off track. That's how everything goes.

00;31;43;10 - 00;32;09;22

Unknown

So it's just this constant, it's this constant process of just making more and more adjustments to just dial this thing in, to get it to the point that you want it to be at. Awesome. So simplest way is working with an agency. And because for multiple reasons, they have people, staff, they have people across different channels, different things, and they're making sure that you know what you're getting into before you get into it.

00;32;09;22 - 00;32;27;14

Unknown

So whether it's your area, because even like what Brandon said before, you don't know if you have never done this before. Is 20,000 too much in your area? Is 5000 not enough in your area? So like and on those different aspects where an agency can help and guide you, but then also just your area in general, like what should I be looking for?

00;32;27;14 - 00;32;43;09

Unknown

How should I answer these calls? Like what should typical numbers look like? Have you worked with someone in this area? Obviously you need to work with someone in the real estate investing space, so don't go out there to any old agency that's just touting themselves. It needs to be someone that understands the real estate investing world as well.

00;32;43;12 - 00;33;02;10

Unknown

So yes, I 100% agree with all of that. So Brandon, if they want to get a hold of you, what's the best website to go to if you want to, if you want us to maybe be that agency, go to Bateman Collective. I'm sure we get throw it in the show notes to what you'll find in the real estate investment space.

00;33;02;10 - 00;33;26;11

Unknown

We've managed more PPC in SEO than any other company. It's because we've been doing it the longest. We've worked with the best clients. We keep clients longer than the other agencies, so we just have these these more long term relationships, and there's all kinds of stuff, and we all have time to get into all of it here. But there's a number of things we do in this space that we find are really successful for our clients, that our competition just does not do.

00;33;26;11 - 00;33;49;02

Unknown

So encourage you to reach out to us and we're happy. We I mean, the way we look at it is, is we're, you know, we're here to to help and to educate people so we can point you in the direction of some content where you can learn more about this make, make these channels a little bit less of a black box and really understand the difference between someone world class managing your campaigns and just the average marketer.

00;33;49;05 - 00;34;08;05

Unknown

Awesome. Now I love that so simplest way. Reach out to him if you want to get paid ads, or if you have a paid ads agency right now and they're not performing well. I highly encourage you to check out Brandon at Bateman Collective. Also, if you're thinking, okay, some of those things that he was telling me about, like what I need to spend over six months, I don't have that cash.

00;34;08;06 - 00;34;23;12

Unknown

I'm feeling a little cash strapped. It's a cash flow rollercoaster. If you need help on the financial end, getting good financial systems in place, we work on the back end, so making sure you're keeping that money. So that way when you do spend money on paid ads that you're not spending yourself out the door. So go to simple CFO.

00;34;23;12 - 00;34;42;18

Unknown

Com that's where we can help you that simple CFO. Com we'll have a brief conversation. See where you are right now, diagnose your needs and make sure you're keeping that money. And that way you can get into the position to be able to add these channels as you see fit. Or if you're running them right now and you're not good at managing the money on the back, and that's what we're doing to help you.

00;34;42;18 - 00;35;06;20

Unknown

So, Brandon, thank you so much. This was very actionable. I believe people can take from here. I loved how you went over those four KPIs that they can go into the ROI, the quality of the lead, the volume of the marketing channel, and then the the CC, the cash conversion cycle per channel. So I absolutely love that. And then at the beginning as well too, if you're on here, he said, don't overextend yourself.

00;35;06;21 - 00;35;26;03

Unknown

Be sustainable. Think about what channel you need to get into and can you get into it for the long term, or do you need to go a different route right now to so you have enough cash to go there eventually? So that's another great thing as well. He's just giving you a great business advice on this podcast. So Brandon, thank you so much for all the wisdom you provided here today.

00;35;26;06 - 00;35;45;24

Unknown

Yeah yeah thank you David. Appreciate it. Yeah. And if you're listening, remember to make profit a habit not just an event. That's it for today's show. Be sure to subscribe, review and share this episode. If you're serious about financial systems and keeping more of your profit, visit simple CFO to take your free discovery call today.