The video discusses the journey of the speaker as an entrepreneur in business and highlights three important lessons learned. The first lesson is to not take shortcuts and to take a long-term approach. The second lesson emphasizes the importance of brands in marketing and how they contribute to success. The third lesson focuses on the significance of focus and not trying to do too many things at once. The speaker also mentions various brands they have worked with, including ACS, Crazyegg, and Kissmetrics. They talk about a lawsuit they faced and the importance of settling rather than spending excessive legal fees. The video concludes with a discussion on NP Digital, the speaker's current focus as an ad agency with global operations.
- It's like Accenture, they do a ton of advertising.
Do you really think they're generating majority
of their revenue from having their logo placid
on the FedEx Cup golf tournament?
- No, definitely not.
So we, we got to go through the parts here.
So 2001 to now, obviously a lot has happened
as far as you being an entrepreneur in business.
So what are some of the cliff notes here,
some of the parts of that journey that are most important?
- I learned a few big valuable lessons.
One, don't try to take shortcuts.
I used to try to use like black hat techniques
and try to get rankings really fast
and just climb my way to the top.
Not the best approach.
Eventually you get whacked
and you should take the long-term approach.
'Cause if I took the long-term approach from day one,
I would've had a much bigger business.
The second thing I learned is,
and this one,
it took me a long time to learn.
Brands are super important.
If you look at the most popular search queries
on Google, majority of them are brands.
Great product, great service, does amazing
to your marketing
and you can't take it for granted.
The third thing that I really learned
and this one was the toughest one that took me
time to really focus and practice was focus.
You do too many things too soon,
nothing's really going to end up happening.
- Okay. what was the, oh, go ahead.
- And once I started focusing on my business career,
my marketing career, focusing on what matters,
not chasing the newest thing, things started to grow
and become much better for me.
- Right. So
what was the first brand that really took off for you?
- Crazyegg and,
well probably not first real brand.
Our first company that really took
off was an ad agency called ACS
back in the day, we no longer own it.
That started taking off and that did well
and we got that business
to a few million in revenue really quickly.
Didn't know how to scale
to 10, 20 million or anything like that.
The next business that did decently well
for us was a brand called Crazyegg.
We still have it today.
And over time, just being in a market
for 10, 12, 13, 14, 15 years, your brand really builds up.
People keep using your product and service, it adds up.
The next one that did all right was Kissmetrics.
That one failed due to FTC investigations,
class action lawsuit over data privacy.
We didn't really do anything, not even really,
we did not do anything
on data a privacy or
sell data or anything like that.
But we used this cookie approach that helped
reduce our server expenses about 30%.
And people frowned upon it.
And once we found out
that you're not supposed to end up into doing it,
But what we had the class action mainly
for wasn't just a cookie
but they said if we had Macy's as a client,
hypothetically we're selling the data to Nordstrom's.
And with the FTC investigation,
the government found that we weren't doing anything wrong.
So we passed with flying colours.
And then I learned if you're in a lawsuit,
whether you're doing something right or wrong,
you still got to pay "legal fees".
The government's actually easier to deal with.
And believe it or not, it was actually cheaper
to settle than it was to spend the legal fees.
And they knew that,
'cuz we had insurance.
- I remember the lawyers calling us like, "Look
you spend some money or your insurance will
spend the rest, settle.
It'll be cheaper and easier."
And I was like, "Why would I settle?
I'm actually right."
And then I quickly realized
you want to spend a half a million dollars
to a million dollars battling it out
or 50 grand of your own money
and 500 grand of the insurance company's money.
Like, huh, basic math, right?
You spend the 50 grand and settle.
At least 50 grand for that came from our pocket.
And then the latest brand is,
and this is my full focus
it's an Ad Agency called NPDigital.
We're 700 to 800 employees.
and the business is going well,
as good as it could be
in this market when people like cutting marketing budgets.
- Yeah. Yeah, we can definitely get into that.
Yeah. So the first ad agency you had, how similar is it
to what you're doing at Neil Patel Digital today?
- Very similar.
We're just doing it better and at scale.
- It was small, right.
Few million in revenue versus a nine figure revenue company.
There is a big difference.
- Okay. Yeah.
So this goes down to focus.
So I'm assuming your focus right now is
is on NP Digital and
you probably don't have a lot of other selling,
you're not selling courses, you're not doing masterminds,
you're just purely focused in on this right now.
- It's like focused on selling courses
or just sell one contract for 5 million bucks a year
or six or $10 million a year. Right?
I'll take the bigger contract.
- Yeah. Well let's talk logistically
about how you would execute that big of a contract.
What size team is required?
What systems are required to be able to do that?
I mean, that's a pretty big undertaking.
- It's just skill.
Typically bigger contracts just usually mean
either more divisions of a corporation
or more regions of a corporation.
think of what you would do on a smaller contract
for a hundred grand, 200 grand, 500 grand a year.
you don't have to add tons of more account managers
but you're going to have to add more SEO people,
more paper click people, more marketing people,
more conversion optimization,
whatever you're selling them on.
Typically, it's, when you're getting the bigger contracts,
you're selling them a little bit
of everything or quite a bit of everything.
And your goal is to just deliver on it.
But the bigger part is not actually
how to scale up to that
from a operational standpoint.
It's just more people.
The harder part is how do you get them?
And typically a lot of those kind
of contracts are built from reputation and relationships.
So if you look at a lot of our executive team,
C levels or presidents
or executives at larger corporations in our space.
So we hire a lot of people
who are executives from Dentsu, WPP,
We're taking people from the holding companies
because not only do they have the experience managing,
dealing with those clients,
scaling out the businesses on a global scale,
they also have the relationships
which helps you get more RFPs in business.
- Mm-hmm, interesting.
Yeah. So, you're not going to be able to get
these types of big fish
by just getting some little lead generation side
or some some traditional inbound technique
that we would use would not work.
- All right. So check this out.
I haven't checked my analytics in months.
Seriously, for neilpatel.com.
I get millions of visitors,
whether it's three, four, five, six, seven.
For enterprise contracts,
can you guess how many of them come from the website?
Take a guess - I would guess
- Close. A little bit more
than 77% come from referrals,
RFPs or employees.
- And it's going down - It's what I would expect.
- every year, right?
So that 77 will probably eventually become 90
- Yeah. Yeah.
'Cause I'm assuming the journey for them to
eventually become that type of lead is very long
because they probably maybe watch something from you
then they talk to someone who knows you
and it's this big long business development
process that takes, it's a very long journey.
- Yeah. But even if it's not a long journey,
people don't sign the large contracts usually
without going through RFP processes or procurements.
There's systems and procedures in places
for a company to sign big contracts.
A hundred grand contract, no problem.
You can generate a ton of them from inbound.
You want five, 10, 20 million contracts,
it's much, much harder to generate them
from inbound marketing or even paid advertising.
It's like Accenture, they do a ton of advertising.
Do you really think they're generating majority
of their revenue from having their logo placid
on the FedEx Cup golf tournament?
- No. Definitely not.
So let's just take an example client of that size,
what is the sales cycle?
How long does that sales cycle look from beginning to end?
- Quick end, if you're lucky.
(person sneezes) Bless you.
(person sneezes) Bless you.
A long end, six months to a year.
- Yeah, that's what I figured.
- Three Months would be really short.
Realistically, most of them are six months to a year.
- Yeah. And so
let's go on the low end of three months.
How many touchpoints are we talking to get
to a closed deal?
- I don't know.
And here's why I say don't know.
It's not that I'm not involved in the process,
it's because there's so many people involved in the process.
You're pulling people from different departments to help you
with pitches and phone calls and follow ups.
And then you're dealing
with not just one or two people on the other end.
And you may be dealing with,
six, seven, 10 people in marketing
and then they bring in people
from different countries or regions
or different divisions.
Then they bring in procurement.
So there's a lot of different people
that you're talking to
and a lot of different touchpoints.
And sometimes actually not sometimes, a lot
of times not everyone is on the call at the same time.
- Mm-Hmm. Interesting.
So I would assume, therefore
- You're not talking about like five
or 10 touchpoints, right?
It's substantially more.
Yeah. It's a of moving process.
- You're putting in a lot of money to try to close
a deal too.
It's not like, oh you put in $5,000 worth of hours
to close a deal.
Some of these deals you're putting
in a hundred plus, two, $300,000 worth of hours
to try to close a deal.
Some of the really big ones.
- Yeah. And I'm assuming just to be able to even
develop the type of proposal
that you would need to even win a deal like that,
it's going to be some sort of custom build,
it's going to be pretty intense.
- Everything is.
- It is, analyzing a lot of numbers
and data and data rooms and all that kind of stuff.
And you may not be paying money to try to close
and win those deals, but you're paying
for a lot of people's time
and they're spending that time on closing a deal.
So if you don't close it,
they just spend all these hours
on something that produced no revenue.
That's how you get to the expensive number.
- So, is your sales division separate
from your account managers or are those blended together?
We keep it all separate
but account managers also have a book of business
and they got to upsell.
- Sales folks on new business account managers focus
on existing business.
Sales sometimes gets involved
in existing business, but rarely.
And funny enough,
a lot of our sales reps were previous account managers.
So they're experts themselves when
it comes to
whatever they're selling.
So, let's say we're selling, I'm making this up,
Ford on a whole digital performance marketing suite,
SEO paperclick, social media organic and paid,
emo marketing, conversion rate,
optimization data analytics.
The list goes on and on, right?
Our sales guys aren't a salesperson,
they're more so industry experts
that we have them handle sales.
They started their career doing the actual work,
maybe then eventually going into account management
and then we try to bring them over into sales.
- Interesting. So 'cuz it's probably better
for them to have the nuanced understanding
of these technical skills,
which then makes it easier
for them to be able to actually hold their way
if a client has technical questions.
- Yeah. Okay.
Now let me ask you
because you probably have a lot of experience with this.
So, I learned a while ago
that there's a big difference
between people that have hard skills
and people who have soft skills.
And something I learned when working
with clients was
it's not a great idea to use someone
as operating from the soft skills and the hard skills
and having one person try to do both of those things.
So like for example,
having an SEO also be an account manager.
I realized that that kind of needed to be divided out.
So can you explain why that is
and why you need to have that separated out?
- Sure. So SEO may be attention to detail,
really good at optimizing code
but they may struggle with client communication,
reporting, building up rapport.
While account manager may not be
in the weeds as much, but they may be amazing
at maintaining their relationship,
creating reporting, communicating with them,
figuring out overall strategy beyond
just SEO and where the business needs to go.
And understanding business sense,
versus just "SEO or marketing".
And understanding the roadmap
that that company needs to take
in order to achieve their goals. Right?
So you need different people in different roles
because without that,
you're not going to give a customer what they really want.
It's hard to do that with smaller accounts.
Like someone paying you three grand a month,
it's much easier when someone's paying you
a million dollars a year
or 5 million or whatever the number is.
- Right? Yeah.
So do you think that account managers
like the skills, the soft skills that are required
to be a good account manager.
Do you think that that can be trained
or you think that's pretty inherent in certain people?
- It can potentially be trained,
that I don't know if it can or can't.
We found that when we hire
most of them are naturally that way
and it's their personality type.
- Yeah. Yeah.
That's, definitely seen the same thing.
Okay. let's kind of shift gears.
So I want to talk more about your,
let's call your marketing strategy
that you use personally.
And I know most of your business does come
from more traditional means,
like we discussed
but you do produce a lot of content,
so we need to talk about that right?
So, let's talk about,
I want to know
what systems do you have in place
to produce that level of content
on a quantity and even a quality basis?
Obviously you must have really good infrastructure
to be able to do that.
- Not as much as you think.
So, there's Pascal.
Pascali who films my content
for my long form.
There's AJ who films my short form.
They're Saulo and some of the team help
come up with ideas
and that's really it.
We have Saulo manages a contractor who comes
out with my YouTube outlines.
My YouTube outlines are: title of idea.
He'll type out an intro
and he'll create like six points
with some stats and that's it.
I got to literally
freestyle it and pretty much create a video.
Same with my social media content.
They just tell me a topic and I just riff.
- And then the team worries about posting it,
optimizing it, all that kind of stuff.
As for SEO,
I mean blog content, text based content.
I write a post roughly once a week,
post it on a Tuesday.
I have a team that goes
and updates all my old content.
We spend way more time updating old content
than writing new content.
- Right. Okay.
Yeah, that's interesting.
So you're pretty much
hyper focused on just the actual creation then you're
handing it off to your team
to tackle all that?
- Yeah. Okay.
Good to know.
All right, now let's talk about a couple quick things here.
Which obviously in the SEO industry
people are going to know about this a lot more than others,
so you acquired themsuggest
and then you recently acquired AnswerThePublic.
Okay, so let's start with themsuggest
how much has that benefited the brand?
How has that side
of the business doing on the software side?
- So it's hard to put it one to one,
but roughly 40% of our agency customers
So did they find us and then use themsuggest
or did they use themsuggest and then they find us?
It's probably a mixture of both,
but it's actually drove quite
a bit of revenue from that aspect.
- Was that the intentional?
- It wasn't intentional at the beginning
but that's why we bought Answer the Public
to replicate the same thing.
- Has it happened yet with Answer the Public?
Will we hope it happens within the next year or two.
Is it guaranteed?
So it's a $8.6 million bet.
- It's a pretty big bet. (laughs)
- Time will tell.
- Yeah, yeah.
'Cause it's probably hard to quantify in the short term.
You're going to need a lot of time
to be able to see how that unfolds.
- Yeah, we also overpaid for it, right?
So it wasn't doing more than
1.2 million a year when we bought it.
- So it's not like we got a great deal when we bought it.
But more so we believed
that we can generate way more revenue
from consulting than we can from software.
- Interesting. Okay.
- And we think we can get it more into more EBITA.
Yeah, we think it was mismanaged,
no one was focused on it.
It should be at least three, four times bigger
in EBITDA than it is.
And that we'll work on fixing in the next year
and we'll see if we get it there.
But the bigger thing is we weren't really worried
about the EBITDA or the revenue,
we were more so focusing on the consulting end.
'Cause when we were looking at the users that use it,
it's a lot of big companies yet they don't close any revenue
from those big companies.
- Hmm. So untapped potential then
that you're trying to get into.
- Bingo. That's why we bought it.
- Yeah, very interesting.
- We didn't buy it for a SaaS to be super specific.
you weren't just trying to get another revenue stream.
- Yeah, we weren't trying to get
another SaaS revenue stream.
We were more so looking for something
to help feed the agency more on a global basis.
when we look at Answer the public,
we'll run a similar playbook to Ubersuggest.
Like we start improving the design,
we'll start playing with pricing in the next week or two.
We'll start giving people search volume
and CPC data for all the terms.
We'll make it where they can click a button eventually
and automatically generate content using
any one of those software solutions.
So that way people can have a blog post started for them.
So we'll start doing all those kind
of things to make the product better.
We're also starting to store search data
not that it's Nathan searching, but just search data.
Here's what the term marketing looked like six months ago
and here's what terms were popular.
So you can compare over time
and see what terms are becoming more popular or less popular
et cetera, and trending and all that kind of stuff.
- Very nice, very nice.
So when you do this acquisition,
are you inheriting the existing team from that tool?
Or are you starting from scratch?
- No team.
That was the biggest problem with it.
They didn't focus on it, they're were like
oh it does like a hundred plus grand a month in profit.
I'm like, it doesn't really do
a hundred grand a month in profit.
You have no one on that company.
So if you actually had to add people, which you usually
do 'cuz there's support requests, et cetera,
the profit goes way down.
That's why I said we really overpaid for it.
We paid at least eight times multiple
on a company that churns quite a bit
- Right. Yeah.
Well that's, so what would be the reason to pay?
Yeah, so you must
really see potential then to pay a premium
like that, you must really see some long term potential.
- As I mentioned, Ubersuggests generates 40%
of our clients that pay us, 40% use Ubersuggest.
We're a nine figure revenue company.
You can do the math
on how much consulting revenue that it
can potentially drive.
Answer the public had 70% of the traffic as Ubersuggest.
It was just a math equation.
- Yeah, very interesting.
Throughout his entrepreneurial journey, Neil Patel has learned several valuable lessons. One of the key lessons he emphasizes is the importance of taking the long-term approach and avoiding shortcuts. Trying to use unethical techniques or getting quick results may initially seem beneficial, but they ultimately lead to negative consequences. By adopting a long-term perspective from the beginning, entrepreneurs can build a stronger and more successful business.
Another crucial lesson Neil learned is the significance of building a strong brand. Brands play a vital role in attracting customers and driving success in marketing. Many of the most popular search queries on Google are for well-known brands. Therefore, entrepreneurs should focus on providing great products and services that leave a lasting impact on customers.
Additionally, Neil stresses the importance of focus in achieving business growth. Diluting efforts by trying to do too many things simultaneously leads to little progress. By focusing on what truly matters and avoiding distractions, entrepreneurs can make substantial strides in their business and marketing careers.
Neil emphasizes that brands are critical in capturing customers' attention and retaining their loyalty. Building a strong brand can have a significant impact on marketing efforts and contribute to the overall success of a business. Brands are powerful assets that can differentiate a company from its competitors and influence customers' purchasing decisions.
Neil Patel's current focus is on NP Digital, an advertising agency where he serves as the CEO. NP Digital boasts a team of 700 to 800 employees and operates globally. Despite the challenging market conditions, NP Digital continues to thrive. Neil's expertise, combined with his team's reputation and relationships, enables them to secure lucrative contracts and deliver exceptional results for their clients.
When it comes to securing large contracts, Neil relies heavily on reputation and relationships. Referrals, requests for proposals (RFPs), and personal connections contribute significantly to NP Digital's success. In fact, over 77% of their enterprise contracts come from these sources rather than from traditional inbound or paid advertising methods.
While smaller contracts can be obtained through inbound marketing and traditional advertising, securing multi-million dollar contracts requires additional efforts. Companies looking to sign large contracts typically follow comprehensive procurement and RFP processes. Building a strong reputation and establishing meaningful relationships are therefore crucial for success in this realm.
The sales cycle for big contracts can vary, but on average, it can take anywhere from three months to a year to close a deal. While some rare cases may result in a quick three-month sale, most often, it takes six months to a year to complete the sales cycle. Due to the complexity and magnitude of these contracts, multiple touchpoints and interactions are necessary to build trust and secure the deal.
AI innovations and digital marketing strategies are crucial for business growth. The future will bring shifts from businesses to platforms, transactions to experiences, and data to insights. Investing in digital capabilities is vital for successful digital transformation.
Implement marketing attribution strategy to understand which channels drive leads and sales. Use lead scoring to prioritize prospects. Improve social media engagement through quality content, authenticity, and user engagement. Master product marketing to establish a go-to-market strategy for SaaS companies. Use various communication channels with LiveAgent.
Learn how to build your personal brand and drive website traffic with strategic marketing tactics. Collaborate with influencers, optimize your website for SEO, use email marketing, and provide exceptional customer support. These 10 hacks can boost your online presence and establish you as an industry authority.
KPIs are essential for measuring progress and informing decision-making in business. Good KPIs are objective, track performance changes over time, and align with strategic goals. Organizations should ask the right questions to create effective KPIs.
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