Do Core Values Matter?

[Music] hello everyone welcome to the 21 hats podcast I'm your host Lauren Feldman this week Sarah seagull tells Shan busy and Paul DS why she's never articulated a set of core values for her business and why she's thinking about doing it now but she's wondering whether establishing her values will really make a difference do employees care do clients care both Sean and Paul say they do in fact Paul says his core values have been extremely helpful when it comes to recruiting and Sean says he thinks sharing values can be the best competitive Advantage smaller businesses have plus we get an update on how Paul's Big Marketing initiative is going and we follow up on why Sarah feels compelled to participate in almost all of her firm's client calls even in Good Times owning and running a business can be a lonely Pursuit our hope is that these weekly conversations will let owners know they are not alone in facing challenges same thing with our daily newsletter the 21 hats Morning Report which Inc magazine ly named the best newsletter for business owners and which you can subscribe to at 21h hats.com where you can also find transcripts of our podcast episodes and lots of other articles and interviews joining me this week on the podcast are regulars Sean busy CEO of kesis which is based in Portland Oregon and works with small businesses on marketing culture and strategy Paul DS who is CEO of Paul Downs cabinet makers which is based outside of Philadelphia and makes custom conference tables and say Sarah seagull founder and CEO of seagull Communications a public relations firm based in San Francisco the episode is titled do core values matter welcome Sean Paul and Sarah it's great to have you all here thanks for coming back Sarah I'm glad we didn't scare you away Sarah you you sent us an email this week raising an interesting question you indicated that you're thinking about articulating a set of core values for your business uh for your employees but you have some questions specifically are they necessary do they work do people really care uh I'd love to dig into that a little bit but what prompted your thinking about this I think uh what prompted my thinking about it was really LinkedIn and just social media in general um because I've been seeing so many companies really start advertising their core values as a a benefit and asset of working with them and it just got me to thinking that you know we have core values from our parent company but we've I've never really established core values for my own brand um I do have three things I kind of look at when when potentially working with a client but um I wouldn't call them core values what would you call them well they're just kind of my the things that I've learned along the way about how I want to work with clients there really simple um the first one is you know whether or not the the client is interesting and has kind of natural newsworthiness the second thing is um can I explain it to my grandmother which is a hard question for some for some companies especially in the technology space and then the third one is um we we don't work with jerks so um I don't those are not really core values so I was like um maybe it's something that I should think about establishing just kind of as a road map but my question is is it is it beneficial to my team is it beneficial to our clients or our potential clients I mean do people really care about core values is my question I do and I have uh rolled out a pretty extensive set for use by my employees and myself and we've found it to be extremely useful and I think that the easiest way to character it would be to think of if you were playing a game would you want to know the rules and so I wrote rules and they guide us in a lot of different situations and they go beyond just the kind of three bullet point platitudes that a lot of organizations put out I tried to expand each of the main headings uh with some some guidance that's specific to how what kind of business we're in and the situation we encounter but I'll preface it by saying that we rolled these out I believe in 2018 so I had uh would that be 33 years without them and you already have core values whether you like it or not you mean they exist you just may not have articulated them yeah every every group of people is going to come to some kind of operating agreement spoken or unspoken and in a lot lot of cases in a lot of companies it's what the boss will tolerate is the acceptable range of behaviors and so if nothing's ever said uh then people start testing the boundaries and all kinds of bad things can happen so I tried to just sit down and Define what I wanted to have happen and how I wanted my people to work with each other and came up with how many do we have seven core values and then eventually added to that at a further set of statements about why our company exists and what employees would get out of it if the company is successful and we have those under two main headings which we call craftsmanship and prosperity now the people who go to work in wood shops are in general they're Craftsman oriented they want to do a nice job they like to make things so that makes it easier for us to come up with a set of values because we're not trying to put every single possible kind of person under 11 we have a fairly consistent type of Personality that enters the business in the in the first place but craftsmanship is what we deliver to our clients and then Prosperity is what our clients give back to us so we have ideas about how what craftsmanship means and what it looks like and and when we go all the way and make every effort and when we don't and then Prosperity is what the employees can expect the company to deliver to them in terms of a genial working experience and pay and benefits and when you lay it all out there I found it to be extremely useful to derail and and head off conflict in the team and as a point of management the the situations that call for refreshment of these points happen all the time and then you've got them and it's super useful in recruiting Because we are extremely different from the average in our industry in terms of being managed well and having some actual ideas about how we want people to work so when I'm bringing new employees in and saying here's what we do and I talk about this a lot at interviews uh it's a real eye opener for people who are coming from other shops so all in all it's been very very useful for me can I ask a question why did you do them in 2018 after having not had them for so long I'm in a vistage group and it was sort of the one of the things that various people in the group were trying for themselves and I was not one of the early adopters because there's always a a feeling that oh you know I don't want to put my own views on my employees or that just a certain reticence to to do that to to preach because you end up preaching but I saw how effective it was for other companies manufacturing companies and just like yeah better try it I'm having trouble and managing a team as it gets bigger and you know you see something working and even if it's not your personal taste it it's often worth trying and then it worked out pretty well for me yours are quite extensive Paul they're you know you you have them under three different rubrics and each of them has a fairly substantial list with a a good bit of explanation I'm curious how did you disseminate it how do you know that uh your employees have actually journalized it uh how do you think about that I will say that in all the examples that I've that I've run across that worked well they were absolutely driven by the boss from the top with personal involvement in writing them and in making sure people conform to them and so I followed that model uh we had been introduced to the concept as my in my vistage group by a guy named David fredman and he had rolled out this idea for his accounting firm and one of the things he said was don't try to make it short because short doesn't actually help you you if it's just a couple of statements then it's just the usual mission statement nonsense you need to make it specific to your company and your business and then you can provide real guidance and do they do they buy in as far as I can tell they do we don't go as hard on preaching it as some other people I know but whenever something comes up I refer to them and I've heard my employees refer to these different points in conversations with each other so I would say that there has been buying I mean in my case a lot of them are just common sense and they're designed to make the workplace a nicer workplace that there's a promise that we'll treat each other well and that if people are causing trouble they'll be dealt with and uh and then there's the promise that if the company is doing well we're going to make sure that everybody who works there does as well as we can too and That explicit promise I think is quite unusual these days how about you Sean what have you done yeah um we got our start in this Arena back in 2000 when we were doing a lot of work with nonprofits and we were doing a lot of board facilitation and the work we were doing there was really about aligning organizations around a shared set of uh ideologies and that was really the beginning for us of sort of learning the power of this and help helping people to do the work so you know with about 20 22 years of you know leaning into organizations to help them articulate their mission and purpose and values I've just seen it over and over again have similar effects to what uh Paul has communicated it's it's just been my experience that it's transformative um that said there's a ton of pitfalls in this Arena and I think maybe some of your initial inquiries Sarah is around that you know if you look at the values that say Enron had in their shareholder reports you know things like integrity and communication you know uh you know I think that the the Peril is that a lot of organizations use them as platitudes and marketing as opposed to actually what what is lived in the organization and so to escape those challenges you actually have to do some hard work and you can't just pick words that sound good um it does absolutely have to come from the owner in an in an owner run business um I I believe that a th% I think it helps to get outside help of course that's my bias as we do that work you know I wrote a book called marketing from the inside out it's uh been out for about 5 years now and the first three chapters are about Mission and values it's not actually about marketing um so it's just been really powerful I think where Paul and I might diverge a little bit is I actually believe shorter is better um we have a we have a process called a one-word mission statement and we tend to try to get folks down to about four or five core values and the reason for that is that if people can't remember what the values are it's really hard to live them um same with the mission so I think where I meet Paul in the middle is that you know we start with brevity and then we expand from there to articulate what things actually mean so we may be arriving at the same place just through two different paths sure can I just jump in and comment on that that concept that if you can't remember them you're not going to live them yeah the efforts that I've seen that have been successful involve making sure that everybody has a copy and and in several cases it's actually a little pocket size fold out that employees are expected to carry around with them or have access to at their at their bench or their desk and we have them post it up all over the shop so that wherever we happen to be having a meeting if something comes up I just jump up and you know double check what everything that's in there and say oh yeah this is an example of number 7B or whatever the value of having more detail is that it provides more specific guidance so just to give you a quick example one of our core values is about resolving conflict and you know you could just be like be nice to each other and be done with it but that may not work so filling in what resolving conflict and being nice to each other looks like and saying what's not okay has just been extremely useful whenever I've got people who are in a beef bring them into my office and I have them each read out loud those points before we start the discussion and then we've had fruitful discussions and so I think that there is value in detail particularly if you have a particular kind of business you know like a lot of what we do involves actually making things so some of the statements about our craftsmanship concepts are about the actual work we do and very specific to that and that's again helpful I I wouldn't expect to roll it out at a at a PR shop but there's going to be something that PR people encounter that's specific to their business that's going to be useful to have some detail on Paul have you have you um updated those core values since you originally drafted them do you see it as kind of a living document or do you see it as this is it and this is what we're going to live by and I'm not going to tell it again uh sort of a hybrid I have made some changes on occasion when something came up that made me think you know we need to expand on on a point but in general I try to figure out a good set of rules at the beginning and just lay it down there for people and there's a reason for that which is that that's actually how a lot of humans work they're comfortable with a set of rules just think of religions for instance where the rule rules aren't up for discussion the situation during which the rules are being applied is open to discussion but if you're constantly fiddling with the rules it just makes it harder to to actually get to the end point so if you have a reasonable set of rules and you put them in place after some thought and are open to the idea that they may need to be changed but I it's not my goal to change them ever so that's my reaction to it yeah I think one of the things that I push back here is that you know your work environment Paul you know it's people come together they work in the same space you know right now I have 13 people all distributed across you know desktops and home places and so forth It's probably an environment more like Sarah works in and for me I found it to be far more important that people first can understand the overarching concept and then we can get into the details we have those lengthy description attached to each of our values but as you start adding to it you know if you go from four to 5 and 5 to 6 and 6 to 7 if you ask somebody what are the seven and they can't look up and see a poster the chances of them being able to remember it diminish dramatically and I have found that the the path to creating shared agreements is actually through succinctness and brevity um and everybody be able to just be able to remember them you know at any time you know like I can ask any employee what are our four values and I promise you they can all remember them I can ask them what our mission is they can remember that it's transformation I think there's a lot of power in that and and I think where to your earlier Point Sarah about you know we're not going to work with jerks you know it sounds to me you probably have this value in terms of customers but I'm guessing that's also a value you have for your employees and where where I have seen values really really powerful is when you can actually align customers with internal uh Workforce so that then the customers actually you're starting to live the values that you expect out of your employees which then makes a more harmonious organization and customers and employees feel like they're in alignment as opposed to in an adversarial relationship do your customers care about your core values do you share those with them um when you're working with your with new folks like and how do you how does it benefit you it's huge it's huge I mean in our in our sales deck the very first slide that I show is the word transformation and that's our one-word mission statement and the reason I show that slide is that I want to gauge how intrigued the clients are by that idea of change because if they look at that word and they look uncomfortable or they look at that word and they maybe just don't even understand it then that's a that's like a first first red flag on the other hand if they see that word and they are like yeah we are here for change we are here because we want to we want to act different we want to think different we want to improve ourselves then I know we're going to have a really good relationship and for us and you know I'm not saying this is true for all businesses but for us we have absolutely focused on long-term uh win-win relationships with clients so for us it's all about lifetime customer relationship and when you're in the business of building long-term relationships with clients if you're out of alignment with values it will not go the distance and you've probably experienced this Sarah I mean you know you get that client you're like it's a struggle all the time those clients don't last years and years and years so I think the more uh relational the business the more being clear about what you stand for and who you are as an organization is important in the sales process and the more transactional your business is then the less critical it is with your customers because they're going to buy something from you and move on all right and maybe it's not as important in that case but for for me as a service business who wants 5 10 year relationships I got to get that I got to get that squared away right away Paul I think I heard you say that your uh set of uh core values has been an advantage to you in terms of hiring can you talk about that well our our interview process consists of asking the people we're interviewing to take a a skills test so I have some idea of do I actually want this person or not and assuming that their everything looks good then I start talking about the core values because it is unusual in my industry and I have a big copy of them hanging on the wall right where I do the interviews so I start talking about if you join my company we have rules to get along with each other and then point to the rules and give people a copy of our employee manual which has policies but also all of these statements restated in them and really emphasize that this is going to be a place where when you come to work you can do your work and you won't be encountering all the various pathologies that are built into most wood shops and if you did there would be a mechanism to take care of it and so it's just about making a better place to work and think that my assumption when I see a desirable candidate that I'm interviewing is that I have to do some work to hire them that they've got options because they're good candidates and I'm not going to be shy about displaying all of the things that we do that are different and better than the ordinary choice they may have and so that again is tailored to my industry but um it has been very very helpful the last three hires that I've made uh one guy thanked me as soon as I as soon as as I um even brought them up and everybody has been favorably like wow you know I didn't realize that you did that you have a reputation as being a good place to work but we don't really use them for marketing it's more for internal stuff do you put them in the job description Paul I don't put them in the job description because then the job description would be nine miles long and no one would read it but what I do say is come work with us it's a no drama professional environment you you know it's a good place to work and then we follow up like I don't believe you need to sell everything in the first encounter with people we want them to come out and see us and see what we do and and I want to see them before I put on the full court press too how did you guys um develop them did you sit down by yourself and really think about things or did you involve your teens or key confidants like how did you put pen to paper I started with the sets of these guidelines that had been developed by other companies the original David fredman Set uh which was 27 points and then the set that had been developed by another member of my vitage group who ran a very similar manufacturing operation and he had taken the 27 and sort of tweaked him for his situation and I looked at both of those and started with with that and then went through and tweaked it for my situation and I do not I don't start by involving my employees in any kind of writing project because I may be full of myself but I think I'm a better writer than any of them and so uh so I'll do a draft and then and then roll it out for everybody for comment but as I said this has to come from the boss and I think that people take it a lot more seriously when it does come from the boss I think this says something about me as a person perhaps and certainly uh as a journalist I have never worked for a company where I took a pronouncement of core values seriously it always came across as problem to me as um something that somebody did because they felt they had to do it but it didn't actually it didn't feel authentic to the business at hand it didn't feel like something that I needed to pay attention to and thus I have never paid attention to the uh articulated core values of any place I've worked actually most of them didn't even try I totally hear you on that like I from a journal background like it just seemed like it seemed like a jazz hands like Hey we're so great and we do all these wonderful things but it just seems sometimes it just seems like a way to promote yourself as we're so great and we live by these values and that's why I struggle with it yeah you're spot on I mean we generally I won't even talk to a a corporation that wants us to do this kind of work like we're really really good at it and have been doing it for a long long time and it's just because that that environment it it just fails you're defining a corporation Sean as being a company that's not run by the owner or yeah definitely if you have you know external ownership versus internal operation it can be done but once you start to get above maybe 150 to 300 employees you start to get into these like dynamics of politics and picking things that sound good honestly I think it's the best competitive Advantage a small business has because you can really create a ton of Harmony in the organization as as Paul's described as I've experienced with ourselves as we've seen with with clients year and year out and large corporations they just can't do that right there's just too many competing interests there's a lack of authenticity often times so I I think you have two different universes here and and what works really well in one I have found like 80 90% of the time is just utter horseshit in the corporate space how about in a smaller environment Sean have you come up with a way to assess whether um the values have been articulated uh effectively and are are making a difference today most clients come to us needing either needing help with this or they've done it and they need to really see if it's authentic and so a couple of methodologies we use is we have confidential interviews with employees and we have confidential interviews with custom their customers and what we're looking for without asking leading questions is behavioral consistency so our our employees saying telling stories about activities that are going on in the organization that either reflect the already stated values or if we're trying to shape them we're looking for things that employ employees say uh consistently across employees and that if if we are then also talking to the owner we hear those things too so we have the benefit of kind of being Outsiders without bias I do agree 100% with Paul who is an amazing writer uh that you don't want to crowdsource this like that's a different activity that I see folks do that's a disaster so I don't think you go ask your employees what do you think we stand for and so forth I think you in a small company if like your company Sarah I don't know how many employees you have but it probably if you don't bring somebody in to help you with it then it probably just starts with you I I would say that are there questions that you think are valuable to kind of prompt your thinking like that you give to your you know any clients that you work with that are are working on that like ask yourself these things and it will help you kind of start that process I mean I really believe you got to start with the mission before the values I I think that that's a great path because like for us when we can identify what the mission is what the purpose is so let's say Paul's you know mission is craftsmanship and prosperity like so that's his kind of thing he's he's driving towards I think that the values which should be verbs you should be able to answer the question is this value in service of or we are in the business of and by doing these actions we will produce this outcome um so for example our mission of transformation one of the key values we have is to think big so the question is if you think big will you be producing transformation so there should be a relationship between those two so I think that's really really important yeah that's I mean that's one of many Lauren do you have a mission statement and core values I do have a mission statement I will say this in answer to your last question Sarah you asked about are there questions that are helpful in terms of coming up with what your statement is he's not here today but let me channel Jay for a moment he has said uh numerous times that his definition of culture is basically to ask three questions um one is how far will you go for a customer two is uh what do you expect from your employees um and I think by that he he means to suggest that he does not expect people to be working 60 hours a week the third is uh what are your standards for how people treat each other that's great but he left out what the employeers can expect from him I'm sorry he's not here to answer that question well I mean there's a lot a lot of these things are sort of a legacy of the opportunity comes from the company to the employee that that we're you're you're in a an environment where employees are assumed to need jobs and that's just the wrong attitude for today now maybe if we have a ripping recession and 6 months it'll all go back to where it was but at the moment uh I think that there has to be or I let's put it this way I have benefited from making clear to my employees what they can expect from me and then the other thing is getting back to this can you roll it out in a big organization I would say that the number of people involved is pretty critical that if you start with anything more than about 40 people I think you're going to have a very hard time doing it and and mostly because if you have a large organization there's bound to be quite a bit of behavior already within the organization that's be quite counter to whatever values you come up with unless you're willing to really you know go far a field and be like backstabbing is encouraged or something like that that's journalism that's journalism but if you roll out values and it's not immediately apparent how you would Implement them and every day you're confronted by people who are ignoring them it's going to be a failure whereas in in the small smaller owner-driven company you can the boss can roll them out and just enforce them and I've gotten rid of people who I did not think were were going to be able to do it and I've certainly used the values as for a warning with employees that I wanted to keep but that were starting to kind of drift into into misbehavior I would sit him down and say look these are the values if you don't start flying right I will fire you but I'll give you a chance you know it's pretty simple here's the rule you got to follow and that has worked on a number of occasions too but Paul just said you know it's like an effective value is something you can point to a behavior you can point to the value and then ask the employee do you think that was in alignment with our values and and it should be really clear to both parties so that then they know you know yeah I was off the Mark I was out of line um I'm curious Paul do you how do people respond when you say those when you kind of bring that to them nobody enjoys conversations I don't has anybody ever said I was off the Mark I I now realize yes they have I've I've had a lot of people who worked for me for very very long times and so for the first 10 years everything was great and then the marriage fell apart and trouble started to show up at work and I used that principle of you you warn people hey you're now in you're now heading for trouble uh I've used that over the years and much more more successfully since the core values we just had a case of that two weeks ago an employee who's wonderful in many ways but he's got a bad temper and he sort of zeroed in on one other employee and really let it rip whenever she made a mistake and he wasn't quite as willing to bring forth his his pathology with any other employees and she complained and I brought him in I said listen you do anything more with this woman you are gone and he took it as a wakeup called and very next day his whole attitude has changed will it last forever I don't know he's kind of fighting the way he's wired but I don't care about that I just need him to perform the way the way I want him to and he's now had clear feedback and so far it's working I want to hit some other topics uh but before we go Sarah has this been helpful very helpful um I've been taking copious notes as we've been going there will be a transcript you know I know I know I just it's just I can't can't imagine that I'm the only you know small business owner that is daunted by this task because you're not you know I I just don't want to get them wrong but you know they're important and I want to I think that we do have core values um like I think we talked about last episode was transparency is one of them but I want to make sure that they really reflect you know the business that uh I've started um and so I'm just it's going to take me time to put these together and and maybe you're right having that outside backboard to to prompt you with questions and and ask you questions it might be might be helpful for me Sarah you were like partway there like I was listening to that last episode you talked about your transparent PR approach for the customer I was just like oh this is so good that's a really great example of of you have probably an internal value with your team about trans Arcy to one another but now you've produced an actual way of working with clients that aligns with probably a personal value of yours and and now you're like you're connecting the links in the chain between employees your operational like way of working and then the what the customer appreciates and so I'm really encouraged by I was super encouraged by hearing that from you on the last show because so much of PR is a black box and uh you know there's just a lot of uncertainty around it and like you're kind of tackling that head on with a with probably what is a core value of yours yeah let me let me just throw this out I would be very happy to share my statements and also the original David fredman ones with anybody who wants to contact me and maybe we do it through Lauren or maybe you just send me an email I'm not that hard to find Lauren I mean I'll make PDFs and we could just send them around definitely I think that seeing what other people have done is very very helpful so that sea would have the the very succinct version and I would have the very PRX version and everybody everybody who's trying to roll this out is just going to decide what they want to do yeah I mean Paul's document on Prosperity is I'm almost going to swear it's fantastic well thank you I and I'm not just like blowing smoke here I A lot of times I see stuff owners create and I'm just like oh God no I nobody believes this and and that was like one of those things I read and I was like man I believe this and and I just think about if I were a candidate for a job and I were to see that kind of thing I would be like yeah I want to be part of this yeah I'll also um while I'm going through this um um I'll share my process and kind of what I'm doing to kind of develop these um ideas and my thought process on my on my Twitter feed it's not a very popular Twitter feed yet um but I'll definitely tag Lauren and 21 hats through it just so um you know as I kind of break this down for for my own business maybe some of the things I'm going through might be helpful all right I want to hit some more topics uh before the time Runs Out Paul earlier this year you talked to us about a big marketing initiative that you're trying this year can you give us an update where you've gotten with that yes uh I have engaged a marketing firm that specializes in sort of a complete from identifying messaging to to producing messaging to Distributing it and then followup and uh this was this company is owned by a fellow vistage group member and I have in the past since which means that if it doesn't work he's going to have to explain why in front of your vistage group he will okay walk of shame how about the march of Triumph there you go yeah there you go even better yeah um I'm interested in in going through this process CU in all my other marketing effort have basically been me sitting down and writing an ad or a tweet or whatever and this is now uh subjecting myself to a process that's actually structured extensive and is designed to really tease out what we know and what we want to say and who we want to say it to so when we deal with our clients who come to us and don't really know anything about how how big conference table is made we put them through a process and it's an extensive process and we've worked it out and this is the first time I've really been subjected to that and I can see absolutely the value of hiring a professional and going through something way more disciplined than uh what I would have done on my own devices is the purpose of the process to figure out who exactly your target audience is for these no I I had a target audience for this effort you know we we do a lot of work with um Architects and interior designers and they are good for us because they have the potential to be repeat clients and only about 20% of our businesses repeat and if we can get a couple of firms that are just used to calling us whenever they run into a need for a boardroom table that would be a good thing for us so I have a very defined uh target audience and they are a very particular set of people so a lot of the process that we've undergone so far is just about I have my beliefs about these people uh having dealt with them for 38 years and I wanted to use the opportunity of this marketing firm to double check that so they asked me a lot of questions about what I think these people think and then they're going out and actually talking to as many as they can get to answer the phone to uh double check what I think is true and then from that is we're going to be crafting targeted messaging and then there will be a a Content production phase so we're about a quarter of the way through the whole process at at this point but I'm happy with the way it's going so far how many customers do you have to attract through this well we we have one relationship right now with a local firm that is kind of the model for what we want to achieve and those people send us about a half million bucks a year in business so I'm thinking if I can get five or six other firms located around the country then it's a it's a home run for me and so I don't need I don't need it you know I don't need thousands of of people I just need to get a few home runs that seems very doable I'd hope yeah can you tell us what you're spending on this the entire thing is budgeted about 60 Grand and which is a pretty good piece of change but I have not put much money into marketing and advertising in the last few years and I feel like we suffer in our industry from not having any kind of brand reputation mostly because my clients generally come to us through Google searches and they have no idea who we are when they contact us and they don't care that much as long as we perform to satisfaction but with the Architects and interior designers branding is going to be much more important we need to kind of establish ourselves as hey we're the experts in this field we're the ones you want to call as soon as you do that your problems are over yeah what that is is a real shift from an end buyer strategy to a center of influence strategy so the Architects being that that kind of gatekeeper to multiple customers and honestly I think it's the best way you can spend your money uh on marketing yeah and 60 Grand is a lot of money but but uh Uncle Sam put it in my pocket thanks to PPP loans and ertc credits so uh it's just spreading the money that was given to me sort of spreading it around which I think is the intent of those programs well the the other side of that Paul is that if you only need to get five or six customers out of this the cost of acquisition would be10 or $12,000 per customer and they're lifetime value to you is going to be oh my gosh yeah much higher yeah I mean it's if it works at all the ROI should be pretty good have you done a CC on the ROI using like say gross profit no I'm not that smart okay one thing you can do is like look at your gross profit on a you could do it on an annual or lifetime basis and then divide it by the investment to to achieve that and you'll get some number 5 10 2 3 something like that um you know in a remarkable a remarkable Roi would like be 10x um pretty average to successful is four to five would be great so I don't know I don't know if you want to do that math we have a I have a different way of thinking about it which is that tend to spend 5% on of my revenues on marketing or a little less so if you did 60,000 divided by 05 that would tell me how much I would need to sell let do the math here 1.2 million we should easily exceed that if this works at all all right Sarah I wanted to follow up with you about uh something you told us last week which is you told us that you are on 99% of your firm's client calls because you think it's important to be there to help them figure out uh what story they have to tell and I'm wondering how concerned are you that this is limiting your potential growth by requiring you to be the person who handles each and every client well I don't handle each and every client I am there uh the team runs the call um but I am there to listen in and basically use my years of experience to say wait a minute did you think about this did you think about that um and be that kind of just the overseer to make sure that that we're not um forgetting to look under certain rocks for opportunities but with the way we've I think I may have mentioned this last week but to keep things clean um and give us time to really focus on other things we do client calls only once every two weeks so every other week and we have what we call um meetings week which is this week and then we have non- meetings week so next week we have zero client calls and that really is an opportunity for um us to kind of focus on on those other non-agenda items can you tell tell us more a little bit about that because that's a super attention with lots of service-based businesses is you know weaving in customer needs with doing the work and can you tell us how you arrived at that and what your experience has been well first of all I think everybody's a little bit tired of calls for the last couple of years for for covid um it just everything's online and you know having to turn your camera on and smile for half an hour to an hour um because nobody wants your resting face on your call um and so when I I went to kind of our some of our long-term clients and I said hey you know I would like to have our calls not be weekly which was kind of the tradition for every agency I've ever worked in and uh because there's a lot of stuff that goes into preparing for a call and I would like to give my team you know a longer Runway to work on delivering projects for you that said um even though we're going to go by weekly every client we have we share a slack Channel with them and we really establish our as an extension of their team so we're talking to them constantly all throughout um the day and throughout the weeks and the months um but we're not necessarily sitting down and having those agenda calls where we're reviewing our work um um every week just every two weeks in fact we have some of our smaller clients um we only talk to them once a month but we're talking them constantly on slack so I've had zero people complain and anytime I talk to a client and I say hey we generally do our uh client calls um every two weeks to give the team more time to work on deliverables nobody says boo and it's been fantastic needless to say my team is like exhausted by the end of of meetings week um and we're all ready for that cocktail on Friday afternoon but we all know that the following week is going to be this awesome time where we can literally be heads down focused on getting our work done and and delivering good results so back to my original question you haven't found the time that it takes you to sit in on those calls to be uh an issue for you well that's when I when I said I do 99% it's it's there are calls where I'm like you know what my my team is I have to pick and choose right and there are sometimes where I miss a call um because I've got to prioritize and work on a proposal or something else but there are a lot the clients that they hired us because they wanted to hire me and I know that so if I were to disappear then they're not getting what they paid for I think one of the largest complaints I've heard in the pr industry in general is that um a client will get this great you know dog and pony show um uh to get them on board and then as soon as they are are assigned as a client and they paid their first month retainer all of those higher level executives it would disappear and I don't want to do that to our clients um it's probably not sustainable um completely as we grow but I also have a high level talent that are kind of taking over that role for me where I'm not really needed on the call anymore um and one of those clients is a a donut shop um with several locations in the Bay Area they don't really need me on the call um and my my team will ping me if there's an opport there's something that bigger that needs to be discussed but I kind of float in and out of those calls because I'm just um extra screen time for for those Sean has this been an issue for you in dealing with clients yeah I think I have a slightly different situation from Sarah because like Sarah is clearly a subject matter expert and has you know this tremendous track record I had a business partner for gosh 17 years give or take and somewhere around 2010 we started I would say sort of professionalizing the organization and and delineating roles and so she became kind of the Sarah uh for our company so I would go find clients I would introduce them and then she would run run the account but then over time she and I sort of decided we were parting ways that's a nice way to put it um and so I had to actually find a way to build the org to not require me to be that uh SM subject matter expert and so I'm maybe and maybe where Sarah is headed you know in terms of the team that's servicing the clients there's folks in there that have actually far more experience than me in some areas um so yeah I'm not I'm not on the I'm not on the calls you know pretty much at all except for one client have you ever been in a situation though where you've had a client um ask you about a specific thing that you're just not looped into like that's my I never want to be in that situation and that's kind of why I do it I I hate not knowing what's going on and then all of a sudden being cornered by a client to say what's happening and if I don't know then to me that's like I'm just I get tight in my chest and it it provides me anxiety yeah you know we had an era where that was a real problem um and you know we had some folks on the team that were very they weren't doing a really good job of sharing those kinds of uh pieces of information and that's a different problem I can talk about sometime but uh essentially that motivated me to start what was what was now become a ritual which is the client Health meeting and so it's I think it's about weekly or every other week where everybody who's working on client accounts and some folks from the leadership team get together and we review all the clients and we talk about is there anything going on that's a that's a challenge that we're concerned about you know what do you forecast for the next coming few months so then there's an accountability to the folks working with the clients um and that's been transformational it really it's taken our client turnover rate and just like dropped it to the floor it's been great all right my thanks to Shan busy Pauls and Sarah seagull as always thanks for sharing guys that was great wait wait don't leave yet if you have a question or a comment that you'd like the 21 hats owners to address send it to me by replying to your Morning Report or by email at Lauren 21h hats.com that's l r n21 hats.com do it now before you forget and don't be afraid to tell Jay what you really think you can take it and if you got something out of this conversation help us reach more business owners tell a friend subscribe and review us wherever you get your podcasts follow us on Twitter subscribe to the morning report at 21h hats.com this episode was produced by Jess Theron founder of of blank word Productions okay now you can leave thanks for listening everyone [Music]