Focusing On Your Existing Customers, Long-Term Growth, And Knowing Competitors with Caleb O’Dowd
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One of the common beliefs for any business owner or marketer is how business success is found in acquiring new customers. However, for the guest of this episode, this is not entirely true. Host Jake Randall sits down with one of the top direct response marketers in the world, Caleb O’Dowd, to reveal the truth behind this misconception. Caleb shares why there is very little money to be made in acquiring new customers. He also discusses why business owners who focus on long-term growth have a higher success rate, and why knowing your top competitors and how and why they succeed will give you the road map to your own success. Don’t miss out on this great conversation as Caleb imparts some of the business models and marketing tactics, concepts, and principles that he has used to adapt to any environment and succeed in business.
Listen to the podcast here:
Jake: Our guest is Caleb O’Dowd. He is one of the greatest sales copywriters living on the planet and I’m a huge fan of his. He’s always packed with good marketing ideas. I’m excited to have Caleb. Caleb, welcome to the show.
Caleb O’Dowd: Thank you so much, Jake. It’s a pleasure to be here.
Jake: A lot of our audience may already know who you are, but for those that don’t, why don’t you tell us a little bit about how you got started in business and where that puts you now?
Caleb O’Dowd: If you can’t tell already, I’m from Ireland. I was a high school dropout. I never finished high school. I never went to college. Instead, I had a very rare and amazing opportunity to move from Ireland to meet the greatest marketer and advertiser the world has ever known. His name was Gary Halbert. Unfortunately, he has since passed away. I ended up living with Gary Halbert in his home for three years. During that time, Gary taught me everything he knew about marketing, advertising and copywriting. He initially got my brother John and me into direct mail. We had a direct mail health supplement company. We launched that company and became one of the main competitors in our niche there for many years.
We got into the newspaper advertising. Probably for about five or six years there, we became the largest newspaper advertiser in America. We moved on to the internet and started a business on the internet that went on to generate about $3 million to $5 million a month. Ever since then we’ve moved from newspapers, direct mail online. These days, our primary business is on information, publishing, coaching and consulting business. Probably what I’m best known for these days would be webinars and Facebook group marketing and advertising.
Jake: It’s quite a resume there. You’ve done some amazing things. What do you think is your superpower in business? What has allowed you to be successful in your ventures? I’m going to follow that up with another question. What’s your biggest weakness as a business owner?
Caleb O’Dowd: My biggest strength is I have learned a set of principles and concepts that have allowed me to pretty much succeed in any niche that I want to get into, in any channel that I choose, those three or five. I do webinars, Facebook groups, pretty much general advertising on the internet as well as direct mail newspapers. I have done magazines a lot and did do radio, all that stuff. I’ve pretty much struck oil everywhere. We’ve dug for it. I attribute that to a set of principles, a set of concepts and a vast array of different business models, tactics and strategies that I’ve learned over the years. I don’t consider myself a copywriter at all. A lot of people do consider me a copywriter. I wouldn’t label myself as a copywriter even though I understand why people would call me a copywriter. I believe that what I learned very well from Gary Halbert was strategic thinking that I have been able to develop as a result of the concepts and principles. I’ve been able to apply those in ways that have led to the discovery of new business models, new marketing campaigns and new advertising ideas. That’s my strength. I’m a connoisseur of business models, marketing tactics, concepts and principles. I’ve been able to adapt myself to whatever environment I need to adapt to in order to succeed in business as a result of those things.
Jake: If I was a business owner, where would I go to earn those principles? Not everybody is blessed with the gift of marketing. A lot of our readers are looking to get new ideas and things like that. I know you have a fabulous website. Do you want to talk about your website and tell people where they can go to get some of these ideas?
Caleb O’Dowd: You can go to ROITips.com. Obviously, that’s Return On Investment Tips. My goal for ROI Tips is to share everything I know about marketing and advertising. I need to update the website. I’ve probably generated in excess of about $150 million in sales and revenue for the companies I’ve owned and operated. I consult with an awful lot of business owners and companies as well. Agora Financial, which is a $350 million business, I consulted with them on several occasions. As of the time of this podcast, I’ve got about 45 of my best tips and secrets in there. I plan to keep going. I’ll ultimately stop at maybe 400, but pretty much that’s what I learned from Gary Halbert. I applied it over many years of professional marketing experience. I’ve learned and developed a lot of unique things and they’re all going to be in ROI Tips. Anybody who wants to get all of that stuff for free, you can go to that website.
Jake: It’s a great resource. I’m definitely a subscriber there and I read everything that comes out. It’s good stuff. When you go and consult with these businesses, what do you think is the biggest thing that they’re missing as far as their marketing to pay off base on and that you can see right away most of the time?
Caleb O’Dowd: A company like Agora Financial doesn’t reach $350 million a year. In general, it is a $2 billion company. They don’t miss too much. The business owners that are maybe starting out or anywhere doing $1 million to $10 million, I would say that it’s even more than that. I had a conversation with a business owner who had a $20 million business. What I see as the biggest hole in the bucket is monetizing existing customers. Everybody is focused on acquiring new customers, but there’s very little money in acquiring new customers. All of the money is made once you have acquired the customer. What’s sexy for people is acquiring the customer and what’s not so sexy for most business owners is effectively and efficiently milking the backend relationship with those customers.
When I first started out in business, I was a front-end guy. Everything I did was geared towards making front-end sales, making profits on the front-end. That’s not a business. One of my mentors and a friend of mine, John Carlton, always says, “A campaign is not a business. An advertisement is not a business. A funnel is not a business.” You don’t have a business until you have a reliable model or system in place that continues to provide tremendous value to existing customers. It’s moving them where they have an opportunity to purchase more and more products for you and get more and more ongoing support from you.
That’s where a lot of people miss out because the reality of business everywhere is the cost of acquiring a new customer is never going down. They never have gone down. They’ve only gone up and up. There’s no reason for anybody to believe that it’s ever going to be cheaper to acquire a new customer. The only logical thing you can conclude is that it’s going to be more expensive to acquire a customer this time next year than it is now. The people that are winning in the game of marketing and business are the people who understand that it is a fact and a reality to have a system in place on the back-end to serve existing customers.
The secret to succeeding in the modern environment and the secret to dominating your category and becoming the number one or one of the major players in your industry, your market and your niche is to position yourself in a way where you can spend the most quantity of money to acquire a new customer. Agora Financial, for example, they spend so much money to acquire in six months. I don’t recommend that. They’re a $2 billion business and they can afford to do that. I don’t recommend that for everybody, but it is an example of being able to pay more than everybody else in their industry. As a result, they’re the number one dominant player in their industry. The only reason that they’re able to do that is that they have what’s called LTV, which stands for Lifetime Value.
They know exactly how much a customer is worth to them over one year, two years, three years, five years. In a theoretical example, if you know that a customer is worth $2,000 to you, it makes a tremendous financial sense for you to set aside $500 as an example to be able to afford to acquire a new customer. If you can do that and everybody else in your niches, you will become the number one player. I think very few people put the level of emphasis on the back-end that is truly needed. Those that do and understand the power of that and make that the primary goal of what they’re doing in their business are the number one people in the industry. Those are the people that have a monopoly on the market.
Jake: I remember when I first heard that principle of, “He who spends the most money wins in the market.” I couldn’t wrap my head around it at first. As I got to study more from people like you, it started to open up this whole new concept. I totally changed the way I ran my business. Even for a local business, a realtor, it took a lot of time to get one client. It’s probably easier to keep that client for their next house than it is to find a new one.
Caleb O’Dowd: A realtor is a great example. If someone bought a house, they already have a house and that’s it. They don’t need anything more from me. It’s not true. You’re in a box and you have to step outside the box in order to think about how you can build a back-end from that customer. Every last customer that you acquire can be a customer for life in a variety of different ways. Your job as a smart, savvy marketer and/or business owner is to determine what are the problems, the frustrations and the needs of your tribe, your people, your prospects or customers. It’s to determine what are their ongoing needs, wants and wishes. It’s up to you to serve them because if you are not serving those people, believe me, somebody else is.
You have to have long-term thinking. This is what I see in an awful lot of people having problems but especially business owners. They’re only focused on short-term profits. Any business that focuses on short-term profits or an immediate return usually is not in business for very long. They can go for three years, four years. It’s very rarely would they ever continue to succeed after a five-year period. They’re usually out of business after five years. The people who have a long-term strategy for what they’re doing and are putting a system in place for long-term growth and ever-increasing revenues and profits, those are the people that succeed. Those are the people with very significant businesses that provide long-term financial freedom and security.
Jake: Coming back to a question we didn’t quite finish earlier, what’s your biggest weakness as a business owner and how have you dealt with that?
Caleb O’Dowd: As it relates to business, my biggest weakness is I’m somewhat of a one-trick pony. I’m a marketing guy. I’m marketing and advertising. I’m not a good business owner. I’m not a good person to hire, fire, manage, motivate teams and deliver big projects on time and stuff like that. I’m not that guy. I’m not a suit and tie type of guy that turns up in a board room and has a whole ton of employees. That’s a huge weakness. What I’ve done to overcome that, I haven’t really done anything. My older brother, John and I had been partners since day one. He is that guy. He’s not a marketing guy. He doesn’t focus on marketing and advertising but he’s good at it.
What he specializes in is everything that I mentioned I’m terrible at. He used to work for Dell computers. He was the senior director for Dell. He was tasked with the development of about twelve of Dell’s laptop computers, which he would have been literally tasked with multibillion-dollar projects. Everything I’m weak at, he excels and exceeds that. My biggest weakness is what I mentioned there and how I’ve overcome that is I have partnered with my brother who is absolutely excellent at exactly that. What I see an awful lot of first-time entrepreneurs doing wrong is they partner with people for no reason or else for an emotional reason. They partner with friends and family. There isn’t a reason other than, “We’re buddies. Let’s start a business.” That’s destined for failure.
The only reason to be a partner with someone is that if the person you partner with is strong where you are weak. By the two of you being together, you’re stronger than what you would be if you were alone and individual. Both people need to bring a significant piece of the pie to the table so that you both can succeed together. A lot of people make that mistake, particularly new business owners. They tend to partner with people because, “I like that person and it would be cool to do so.” In more cases than not, those relationships fall apart because there’s no logical, intelligent business reason for those people to be together. That’s my big weakness and that’s what I’ve done to overcome it.
Jake: A lot of people reading probably have maybe the opposite problem. They’re doing X, Y, Z. They hate their bosses. They feel like a boss isn’t doing it right. They go start their own business. They should be partnering with people who understand the other side of the coin. They may not understand marketing. A huge lesson to be learned is if you’re not good at it, you need to find somebody who is because it won’t work. You can’t do everything. That’s a lesson I’ve had to learn.
Caleb O’Dowd: You need a rainmaker. You need someone that knows how to make it rain. While I mentioned that the back-end is where it’s all that, you can’t have a back-end if you don’t have a front-end. If you’re not acquiring customers on a frequent basis, you don’t have a pool of customers to go on and work with on the back-end. I don’t mean to diminish the power or the necessity for front-end marketing. When it comes to marketing and advertising, you absolutely need a rainmaker for sure. You think of the systems and the processes required to bring new customers to you in an automated manner on a daily, weekly and monthly basis.
Jake: What is the best advice you’ve ever received when it comes to growing your business?
Caleb O’Dowd: The only thing I could do is give you the first thing that comes to mind. It is a principle of alchemy. I learned it from Gary Halbert. It’s deep and vast in its application, but it is a massive secret to success. That is, “Do what the best are doing, just do it better.” If you do what the best are doing and you do it better, you will be the best. If you fail, you’ll probably land in the top ten. I always teach my students, the number one thing that you should do is identify who your top ten competitors are. If you know who your top ten competitors are, you have a triangulated blueprint for success.
If you know who your top ten competitors are, you know exactly what you must do to barge into that little fraternity there. If you don’t want the top ten guys are doing, that’s your model. That’s exactly what you need to do as well. If you’re smart enough, experienced enough and savvy enough to do what they are doing, but do it better than you will become the number one guy in the game. That one principle will take you all the way to success. When I was working, the very first thing we did was identify who are the top players, who were the major players in this niche, market or category? What are they doing? Where are they doing it?
The minute we knew who they were, what they were selling, how they were selling it and where they were selling it, that was it. The case was solved. The nut was cracked and all we had to do from that point forward was replicate what they were doing but do it better. I don’t want anybody to get about stealing anything or knocking someone off or copying what they’re doing. That’s not the case at all. That’ll get you into trouble. That’s not what I’m saying. When you are able to see your top competitors and you’re able to see what they’re doing, where they’re doing it, what they’re selling, how they’re selling it, that’s the framework. You want to take that framework.
You want to take that business model, you want to take those strategies and you want to use that same framework, that same business model, those same strategies. Obviously, you need to be different. You need to position yourself differently. You need to position yourself more powerfully. That’s what I mean. We used to do this morning, noon and night every week of the year when I was working with Halbert. I took those same principles and that’s what allowed me to succeed in direct mail, in the newspapers, online, webinars, video sales letters, Facebook group marketing, email marketing, everything. I’ve done it so often that it’s in my DNA now and I don’t need to go and do that work. I’m not in a position where my business revolves around getting into a new niche all the time. These days, I’m firmly planted in a set number of niches and therefore I don’t need to do that anymore. That is probably one of the biggest secrets that you can learn. Do what the best are doing, just do it better.
Jake: I love the principle of the triangulated blueprint. That was insightful. Our audience is going to grab some serious value from this. We talked about making money and keeping the money. You’ve nailed both of them talking about bringing money in and the importance of the back-end. That is an important bottom line. Is there any other advice, a nugget of wisdom or anything that you would tell a business owner that’s maybe getting started and doesn’t quite know where to go for the marketing side? Do you have any advice on what they should do there?
Caleb O’Dowd: You need to be a student of the business model. You need to be a student of your competitors. A lot of people think the competitors are their enemy. They’re so not. Your competitors are your mentors. They’re your guides. They’re your partners in business. I had a client of mine who has a sales funnel. He was like, “I don’t know what my upsells should be. I don’t know what I should sell in my funnel.” As it relates to internet marketing and maybe digital publishing and stuff like that, the advice there is to buy everyone’s product. Buy your top ten competitors’ products, go through their funnels and reverse engineer everything that they’re doing. You’ll never be stuck for a winning idea again in your life.
You’ll never have a fuzzy gray area. You’ll never have something that’s unknown to you. All questions can be answered in terms of studying your competitors because they are the benchmark for success. It’s amazing that on the internet these days, you can absolutely identify who those top competitors are and practically reverse-engineer every last element of what makes them successful. That’s an astonishing thing for you to consider. If you want it to succeed at anything, the people who are successful, kicking ass and taking names, study those guys relentlessly because they’ve already solved all the problems that you’re going to encounter. That’s one of the best advices that I could give because especially a first-time entrepreneur, there’s a lot of confusion. There are a lot of questions and problems that arise. Most of those can be solved by literally studying and reverse-engineering your competitors. It’s been such a profound thing for me to have learned that. I don’t think I would be where I am if I didn’t learn that.
Jake: Everybody, you should definitely go check out ROITips.com if you want to get more marketing information from Caleb. I’m a subscriber. It’s valuable stuff. Caleb, thanks so much for joining us.
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