“Strategy requires thought, tactics require observation.” – Max Euwe
Spending money is like the game of chess, every move counts. When you see a good move, look for a better one.
Over the past 10 years we’ve spent a lot of money in the online marketing space. It reminds me of a bell point curve:
- In the beginning we were spending a little and losing a lot. Trial and error, slowly gaining contacts and finding our way.
- In the middle we were spending some and breaking even. The rolodex was growing, though we hadn’t found the best resources.
- In the present we’re spending a lot and making a notable return. The top resources are at our fingertips and momentum is on our side.
After talking to a lot of other direct response marketers, I realize that our paths to success in this industry are very similar.
Even though we spend a lot of money these days, we spend it very strategically. Before we’ll do business with a new company, they’re going to have to meet 2 of 3 criteria:
- A strong referral from another trusted partner.
- An inexpensive test of their services.
- Proof that their service is the best.
That’s our litmus test – and if they pass it’s on.
Some of the richest guys I know drive Toyotas and wear Fossils. These same guys spend $25 million a year on IP addresses, place $400k media buys, and retain the best lawyers in the world. Every move in their lives is calculated and everyone they do business with is carefully vetted.
Calculate every move in your life. The most difficult thing in the world to do is confront reality, especially when it comes to family and friends.
In the 4th quarter of last year we brought on a team member that was also a good friend, James Walker. We put James at a $55k salary plus bonuses. The bonuses were based on performance – and we structured the deal so he could cherry pick accounts from the beginning, earning upwards of $120k after bonuses. Within the month I realized that we had made a terrible mistake bringing James on. His role in the company was unneeded based upon our business model.
Everyday the idea that we’d keep James on started fucking with me. On the one hand we didn’t want to burn a bridge by leaving a friend high & dry. On the other we didn’t want to throw money away.
After much thought and consideration, I approached James in confidence. We sat down and discussed our business model, the direction forward, and my thoughts on his position. We knew of 3 other companies in the industry that were hiring and believed that James would add much more value there.
Instead of reacting in anger and disbelief (which he had every right to feel), James smiled and thanked me. He noted that he felt like he wasn’t adding much value to our team and didn’t want to mooch off of someone else’s success. James ended up getting a job a few weeks later with one of our competitors and from what I’m hearing he’s doing really well.
If you’re throwing your money into a ditch STOP! Confront the stone cold realities no matter how much they hurt.
Analyze your spending down to the penny. Donald Trump signs every check before it goes out. We all should too.