I’ve Always Been Afraid to Raise Prices

[Music] hello everyone welcome to the 21 hats podcast I'm your host Lauren Feldman this week Jay gos Dana White and Laura Xander have a wide- ranging conversation that starts with the challenge of pricing do you set prices based on what you think the market will bear or do you set prices based on your own Rising costs and what you need to charge to make a profit and how much profit should a business expect to make along the way the owners also discuss why Laura wants to keep buying businesses don't tell her husband Doug what Dana needs to do to get her new salon open at Fort Brag and why both Dana and Laura are going all in on influencer marketing Jay on the other hand isn't entirely convinced that social media marketing works for his picture framing business plus should a business owner know every employees name what if you have 130 employees even in Good Times owning and running a business can be a lonely Pursuit our hope is that these weekly conversations brought to you by our principal sponsor the great game of business we let owners know they are not alone in facing challenges same thing with our daily newsletter the 21 hats Morning Report when Jake magazine named the best newsletter for business owners and which you can subscribe to for free 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 our regulars Jay goz whose companies in Chicago include a picture frame business artist frame service and a home furnishing store Jason home Dana White who is CEO of paral Boyd a Dallas based chain of hair salons with a new location on the way at Fort Brag in North Carolina and Laura Xander who is CEO of Jimmy beans wo a digital yarn store based in Reno Nevada and mateline TSH a yarn supplier based in Fort Worth Texas the episode is titled I've always been afraid to raise prices welcome Jay Dana and Laura it's great to have you here on last week's episode we had a really good conversation about what sha Liz and William are doing differently with employee compensation and I thought maybe we'd kind of continue that thread by talking about various things maybe including compensation but other stuff too that you guys are doing differently this year uh it's been a pretty turbulent last few years and I'm I'm wondering where you guys have landed let's start with you Dana you picked up and moved to another state so I'm guessing you're doing a lot of things differently anything in particular come to mind absolutely so with per Boyd I've decided to take appointments in our Texas location I'm also paying higher per hour right yep and a higher hourly salary and I've also decided to charge more which has been amazing it's working it is working um and I cannot encourage anybody enough to raise your prices we talked about that a lot when you were in Detroit Dana and you and you were nervous about doing it how much did you raise your prices in Dallas $15 so that's a significant percentage and it's still low for down here I think our average ticket is uh around $88 to $90 even on a base price of $65 so i' I've always been afraid to raise prices I've been afraid to pay more um not because I don't think my staff is worth it I've been just thinking they won't pay it right and I'm afraid that if I have high compensation we just won't have the money you know and the whole thing has been I never want my staff to worry I don't want them to think oh small business I have to deal with this drama but you raise prices you have more money you can pay people more Dana did you raise the price when you opened initially in Dallas or did you open at $50 and then go to 65 I opened at 65 I was going to open at 70 which is similar to other salons around here but stylists are charging way more than I could have opened at $80 but I didn't want to open at that price point and because I'm such a believer in raising your prices I know when I will raise our price to $70 so here's the reality because being in the custom picture from your business I'm this is the perfect place to learn this because we don't have price is posted because everything's different and the fact is half the customers when you tell them the price they go oh my God that's a lot of money and they complain about it and they think that everyone complains about the price and the problem is no matter what business you're in somebody's going to complain about the price and that gets in your head like a worm and it gives you Paws and you start to think about that person and the part that you haven't figured out is if you're charging for in your case 10 uh $90 to do their here and you get 10 customers if you lost two because of the price you're still going to make more money than if you charge you know eight people uh $50 or 60 like you're going to make it up just you got to charge what you got to charge you got to charge what you got to charge and then with Fort Brag that was a huge price you know concern because on base they're used to paying below market and I was just trying to make the numbers work I was trying to you know everything was based on volume and I just didn't think that volume was realistic understanding that people didn't know the brand what is apparal boy I'm keeping it at 65 and those for those that see the value in it the beauty of it the consisten and the the care they will pay it on base Dana are you open at Fort Brag no I'm not we just finished the floors and so we're getting ready to move in so once we can find an electrician and a plumber and that is a challenge because you have to be able to get on base and unfortunately a lot of the service workers um have records and getting on base is an issue and then the other thing is my job is so small I don't need an electrician for a big electrical job I don't need a plumber for a big plumbing job is it worth their time to come on base so we're right now we're trying to sort through that so we can get going so the one question I have is so Lauren said to you so did it work paying people more and you said yes and my question is what do you mean work are you getting a better employee now because you're paying more are you getting more applicants now are the people more qualified that you're paying more I think what means that it worked is that I saw the Ripple effect across my competitor when I moved here my competitor was paying her people $12 an hour I advertised when I was hiring $15 an hour and then shortly thereafter she's paying $15 that's one way the other way is yeah we're getting young ladies who are coming out of school we're getting um stylists who aren't getting the volume of people on their own and they're like you know what I can get a steady paycheck we're not only just paying hourly we're also paying commission so once you see so many heads per hour you go from $15 an hour to $24 an hour you commission out not to mention Commission on upselling on services and selling product so having that $15 base has been really helpful as far as getting great candidates Dana you had a rare opportunity to raise your prices without any of your customers knowing it you opened in Dallas at the price you're at now you didn't tell your customers that they had to start paying more right will will you be able to do that next time it's time to raise prices yes because I'm still lower than the $95 $100 they're paying to go to somebody in a private Suite I'm still lower than the market are you going to come up with I mean you could train these new customers that every January or whatever pick a month um is when prices raise right and so then they just know they always know that it's going to go up 10% or 5% or whatever and they expect it yeah my dear friend has a really good when she raised prices for her Bakery she broke it down in a pie graph she literally showed it on a cake no pun intended no pun intended but no she did she had a graphic of a cake and she said this is how much goes to flour this is how much goes to Sugar this is how much goes to vanilla this is what's left and in order for us to stay open I need to open that percentage up and so that means the price of this cupcake now goes up to this and she didn't get any problem with people paying the price because they understood why so I believe that's the plan going forward is if and when or when not even if but when I raise my prices it'll be an understanding and it'll go towards compensation really yep really is what I see it going towards compensation Laura how about you you doing anything differently this year yeah um a lot actually in our industry so the yarn the fiber industry we're seeing a huge shift so a number of businesses are especially wholesale a number of wholesale businesses have gone under um and or are going under um we've got you know Legacy businesses businesses that were family started and familyowned being sold and the founders are stepping away and so you know the the entrepreneur I guess and me is just seeing this huge land of opportunity right now you know with all of this transition um and things changing so much so I actually tomorrow I'm spending the day with um I rehired you know a I guess a mentor a consultant um friend of ours who we're just going to sit down and strategy we've been strategy planning for the last couple weeks and just looking at where do we want to be in three years where do we want to be in five years what new businesses do we want to take on what do we want to open what do we want to double down in what do we want to invest so it's just a lot of again like there are just so many opportunities I mean I probably had well I had you know four legit large companies come to me last month looking to sell their businesses and so just figuring out what do you move forward with are these um yarn shops or suppliers or um suppliers mostly suppliers listen part of what you're seeing is it's what's Driven this economy for the last 50 years is the Baby Boomers and you're getting to the last third of the Baby Boomers Baby Boomers finished in 6 4 so the youngest baby boomer is now 59 years old and they're still cycling through that's why there's so many people moving to Florida in Arizona it's just a huge retirement thing going on so there's that and then you know with in our industry and I'm sure it's similar to others as well but the exhaustion you know the exhaustion of the last three years um you know it's the rocky thing uh so a lot of people are just sick of getting hit in the head you know and they're ready wait a second Rocky didn't get sick of getting hit in the head analogy no it's a good analogy don't argue with he said in Rocky 3 my favorite line he just went through a brutal round he looks up at Mickey and he goes I ain't going down no more no I know but it's the rocky I'm Rocky so I'm okay so not going down no more but a lot of people you know they've hit their limit laori you've told us that your favorite thing is checking out businesses to buy are are you going to buy any of these businesses probably I mean you know don't tell Doug but yeah realistically me I mean really no I don't do you not to you don't make enough money you're you you can't buy anything you want now you you you spend too much time with your kid you've got nothing to do you're not stressed out a lot of times really I will that's why I'm taking a step back where I have been doubling down so the last four months I've gained 10 PBS um I've been traveling I haven't been working out as much and I have been focused f focused focused on foundational work with the businesses that we have and training and training and training and getting processes in place and getting systems and scorecards and everything so that if we do when one of these opportunities comes up it's not me you know I can hand that off um and that sounds really fancy and blah blah blah and or that sounds very simple and I'm simplifying it but I'm trying to get us in a position and trying to build a good solid process and system and all that kind of stuff so that we can make good decisions that don't end up being like emotionally exhausting and you know resource exhausting and all that kind of stuff good luck with that yeah I know I think it can work let let me jump in here Laura I highlighted a piece in the morning report this week that I gather spoke to you because you emailed me about it it came from a book called leading the leaders and it talked about entrepreneurs who just can't resist taking on more challenges whether it's good for the business or not the the peacs sited Elon Musk and referred to these entrepreneurs as arsonists you know the idea being that that you just get used to succeeding at challenges and it's you you get a high from that or you just can't stop it and you emailed me yep I'm an e which is the term the author used and a pro- arsonist uh what do I do about it is that part of what's going on here yes and no yes absolutely the difference is you know now in my Elder years um I'm you know I'm catching myself and so I'm noticing that those Tendencies to just create chaos to jump on something new um and so I am not being as impulsive about it and I am really thinking through do we want to start this fire is it the right thing to do are we in the right spot um because as Jay said we're doing great you know we've got a good solid business I got a good solid team so there's no we don't have to do it we should only do it if we want to if it's interesting if we don't have any other opportunities already you know that we're working on so I'm trying to be very very um selective is the word you're looking for how about selective you're being much more selective that you're only going to do a deal if it's just just too good to to pass up yes here's an example so we there was a business that we really looked into buying um around Thanksgiving so it was like late November all through December they were going to go bankrupt they were going to go out of business we could pick it up for pennies on the dollar you know three weeks four weeks I'm like you know digging into it can we handle it can we do it blah blah blah we decided to say no and then what that turned into is we ended up buying some of the assets from the business that was going to go under that we will then turn around when we have time and when we have the capacity and we can re-engage kind of those assets and reactivate some of those things so instead of we just went ahead and let the business die um and then we will pick up some of the things from it so we bought the URLs you know we bought some of the pages we bought the vendor list I also think that Laura's situation like I've been to mine TSH like I've seen it and it's a well-oiled machine right like I was blown like Laura you really just don't give it any justice boo like was like when I was in shock and all when I walked through but she literally has this amazing business that operates on so many different levels she is deciding to control from the beginning of the process of sales to the end so how and where it's made and owning that um all the way to the website by which you you know purchase her stuff on so I'm not surprised that when you have a a a macro mindset of your business and I've been inspired by it right even in franchising having this okay wait a minute I could actually own the operations company that people will pay me to operate the franchise who better to operate a perly void than the operating company that I will put in place wait wait wait a second data are you back to franchising I thought you put that aside for a while so the uh representative from the mayor's office in Dallas has reached out to me um because of you know my story and whatever we're going to start looking back into it in um 2023 I was frustrated because I'm like I can't believe and he has been looking at minority owned franchise ores for a while and he made the case and said you're not delusional this is why this isn't happening and you're not alone like it's not like is the mayor's office in a position to help you with that absolutely absolutely because Dallas is uh if not the largest franchise city in the country they have more franchise ores and franchise corporate headquarters here than anywhere so I told them what I want um and we'll see you know but he's you're not when I said okay so I got into this this is what I'm seeing why is this the case and he has done he's a franchise attorney he doesn't want my business like he doesn't want to represent me he's just really passionate about minority franchise ores and considering that I've already gotten through the hurdle of now I am a franchisor he's like okay there's no reason like the reasons that you're encountering there's a reason why Ali webs took off and yours didn't and you're not imagining that but I'm here to help you and the mayor's office is here to help you to remove those barriers and so that's it but back to Laura and Jay and what I've heard with her buying other companies and I think it's brilliant I even with my product line it's like okay wait why am I paying somebody else to do this is it possible for me and is it you know cheaper or more efficient for me to do it so kudos to Lord you really should talk about like we should do a show from Laura's mine TSH what did you see there that so impressed you Dana man where do I start so you pull up you see the big mine TSH logo and you just like oh Laura yay but then you go in and specifically the rooms of wool and listening to Laura and the care and the deliberateness of how she picks the product then you go into another room and you see the workstations of all the people that work there so of the ders and you're that could be an awful sweat shop it could be an awful place to work but it's not I felt looking at each of those people stations I knew a little bit about them just by walking through and having this space that even though the work isn't easy right it's not oppressive I didn't get that I got oh okay wow and that was at everybody's work Stace on the front end and on the back end and they're there to work with Laura to build mine TSH it's something that was new when we took over is we gave everybody a little bit of money to decorate their Spa to personalize their spaces wow and they did it and it shows who they are and it shows the type of work environment then you they were having um like a I don't want to say a meet and greet but it was like a a like people were actually their I think it was retailers and some customers were coming to mine TSH like an open house it's like an open house and to overhear the the people talk about the level of what they expect from this brand whereas most people work for it like okay we got to try to do this because they care about the quality of product they're putting out it just kind of comes naturally so people I don't want to say they take it for granted but it's like oh we expect that it's mine we expect that right and but it hasn't always been that way it's almost like oh I'm glad it's there now and it's just huge space um I really like seeing the wool I really took pride in watching my friend walk through her business um and and the pride she takes in in in how everything is unfolded in acquisition of mine TSH it's just really cool I was so proud of her I was skipping on the way out yeah you had me at it didn't seem oppressive yeah but it could have been it could have been oppressive no I'm going to tell you the intering perspective I've never been there and all I've heard about is the problems trying to get the air conditioning working and getting the man because that you know what we do and we she talked about all of her problems so I'm glad to hear that because she never talks about the good stuff she's talking about all the issues she was having which she worked through yeah cuz I'm moving on I got you know got but that's interesting because I this is all new information because all I when I think of it I think about the problem you had trying to get the place air conditioned for a long time that's right yeah I totally forgot about that and we had nobody quit this summer exactly but there's a reason why it we went on a hot day and nothing was nothing was being dyed I can only imagine how hot that room gets when it's up and running at 2 3 4 o'clock in the morning that's why I as I say what time are they here and she told me it's really early in the morning and they're done by a certain hour in early afternoon but still it's hot but you can tell the care that goes into making sure the people are I'm not surprised she has a weight list to work for her not at all not surprised Jay what are you doing differently this year well I'm spending a lot more time on just figuring out projections because things the my business model has changed a little bit my real estate taxes have just gone up dramatically I'm paying half a million dollars a year just for real estate taxes that's a lot of money and like where does that come from I mean and I got to relook at my pricing and my budgets and figure out and then slowly but surely and I'm not complaining about you mentioned your pricing before I'm still work yeah I'm going back to the gr you know from from Ground Zero which I have handwritten formulas from 30 years ago that we were working off of so I'm having to relook at the whole business model because you know the uh minimum wage in Chicago is going up to like 1580 and you know it's it's gone up a lot and like and I'm not complaining about it it's fine and now you you you get five sick days per year that's built in so my cost of Labor has gone up and the cost of the real estate tax has gone up and the cost of maintaining the buildings keeps going up and it's got to come out of somewhere but those real estate taxes are your responsibility personally right it's not the business just to be clear well it's the same no no it same difference if you if I was a third party you'd still end up paying the taxes someone's paying the taxes I'm not you know that's what they call a triple net lease so the tenant always ends up paying the taxes so you know I have to really look at at all of my pricing because stuff is just my just keeping my heating going in the building every time the guy comes out oh we had to replace the valve you know $2,300 it's you know it's expensive and then if for Jason home for shipping stuff around the country I'm paying out tens of thousands of dollars every month for White Glove delivery and you know I got to make sure that's covering it do you charge for shipping separately or do you build that into the price yeah yeah yeah no I do and then you got stuff shipping from all the the containers coming over from Europe I I so I really have to it crept up on me but I'm really spending a lot of time and then I got my kid in my head when I'm looking at the budgets and I I hear him going gee is that really enough money to make and it's not wrong I mean it comes down to the basic question of what should the bottom line of a company be and like I've been in lots of business groups over the years and like it's always a a nebulous number that's out there like how much should a company make and there's no quick and easy answer to that your CFO doesn't answer those questions for you my CFO has been here a year and she's got enough on her plate to just take over the the Antiquated computer system and work on getting no she's just got too much on her plate um and she doesn't understand the business she doesn't understand the business at all I mean she just been here for a year I'm the one that you know knows how to frame a picture and I I I need to be and this is so I yeah I'm working on it Jay I'm curious to what extent are you basing your pricing on what it costs to make your stuff or you know get your stuff and to what extent are you basing it on what you think the market will bear I put zero energy into what the market will bear because there's no way of knowing and this is an old thing of mine doing speeches at frame shows talking to framers so like oh I can't charge that much well if you're not making any money I what choice you got to charge what you got to charge end of the story you need to charge what you need to charge can't start oh well the customers won't pay that a you don't know that and B what are the other options charge don't charge enough and not make any money when we're done with this podcast I'm heading into the office because we're starting on a private label line brand of yarn um and this today is the day that we're going to work through pricing right so you know we're getting it manufactured right now and so now we're trying to figure out like what will the market bear like you know what's the top down what's the bottom up blah blah blah and you know Jay I always ask you I'm like what what is my job you know how involved should I be in this kind of stuff and I don't have a CFO and so I guess I just always assume that that CFO was your silver bullet and you could just say hey CFO tell me what we should be charging on all this stuff complicated no this is it's absolutely one of your jobs as far as I I don't you're well first of all you're given the heart and soul of the company to a third like this is this is like if that gets messed up you're out of business and and who knows it better than you do now here's an interesting part people should be thinking about which I'm thinking about you got two people in a business group they both have businesses that do whatever1 million a year and one says oh I've got a 10% bottom line wow that's great a million dollars and the other person says oh I only have an eight% bottom line well you really have to know how much money is invested in the business to decide who's in better shape because it's return on investment right if the person making 10% on the business has uh $3 million of inventory and the person who makes 8% has $200,000 worth of inventory their return on investment is dramatically better so you do have to factor that in how much and then the question is now this question i' say isn't that nebulous what your bottom line should be there's a lot of factors but what should your return on investment should be it certainly shouldn't be 10% you can almost make that in the stock market and not work so that's a great question right should it be 20 some percent yeah should it be 30 it certainly should be north of 20 20% or otherwise it's too much work you could buy real I know real estate I've learned that if you do real estate properly and you leverage it properly and you charge the right rents you can make 15 16% a year on real estate which is why people get rich with real estate because 15 16 is a lot more than eight or nine in the stock market now when you do what I did by accident and I did SBA Loans and you only put 10% down oh my God your return on investment could be 30% because it's you've got very little money in it of your own so you really need to understand the concept of return on Equity versus return on investment there's a difference between how much money do you have in the business and how much money is actually your money versus leveraging the bank money so there is a difference between return on investment and return on Equity what we can do it with your business when we're off the podcast take your bottom line and what is your business worth what is the inventory worth and that would be interesting what do you mean after the podcast okay well does she want to share her real numbers someone will come and knock well let's just say they're basically the same let's say that my inventory is about the same as what the bottom line is okay let's just say they're both a million dollars just for round numbers okay well that's phenomenal then you're making a 100% return on investment so and one of the questions I was going to ask was you know 20 years in I've burned off all the Sweat Equity you know I mean those first five years like I didn't make much money um you know I didn't pay myself anything so part of my investment obviously was Sweat Equity now at this point in the business I mean I think you know that is pretty much no this is listen the whole EA times a multiple that's really what the core of it is they're figuring out what's the cash flow and if someone put money in how much money they G to make on your money that's really where the whole concept of e ebaa times multiple comes from it's okay no one's going to go put money into a business and then think oh I can make a 12 per return why would you take the risk to do that that's a great Point okay so if let's say my inventory is worth a million and my bottom line is 500,000 so then I'm making 50% okay that's good I think so sure what else would you do with the money it's not you know you couldn't go and invest it somewhere and make that kind of money uh yeah so I think that's a good exercise for people because like I said just looking at what your bottom line is it really depends on how much money you have in the business I did a bus tour one time when I got into the home store and I had I was selling a lot of plants so I went on a a tour with people who own nurseries around the country and you know I got a big mouth so we're on the bus and I'm talking and and I said you know after seeing some of these places this is it's an unusual industry in that many of the people in it it's their grandparents bought it or great-grandparents you know they own the land and we're going through some really rich neighborhoods and then there's a plant store and I said you know do you actually make enough money on this business to justify tying up the land here and the answer was frequently no and I said in this kind of industry there's a lot of people who really aren't making any money but they think they're doing fine but they left off the fact that their great-grandfather bought the land for next to nothing and now it's worth $12 million and a guy got really mad at me and he goes we're doing God's work I said okay I'm not telling you not to do it it's Priceless I'm just suggesting perhaps you should factor in the cost of the land when you do your pricing so you're getting a return on your investment and I know for a fact that a lot of businesses they pay off their building they stop chargings rent and they make make their business worthless I want to go in a slightly different direction I'm I'm curious I asked you guys what you're doing differently and none of you mentioned marketing and I'm wondering if that means that you've all kind of got it figured out and you don't have to make any changes because you're in such good shape or how about you do you do you have it all figured out yeah have you met me do I ever have anything figured out what's working what's not working for you with marketing we're taking a slightly different approach um in that we have reached out I am starting to Outsource more of the marketing in some ways in that we're we've decided there's so much talent out there with all of these businesses going under this is part of the opportunity pie that I recognize or that you know that we see and that's there are a ton of talented creative analytical people across the country that want work and so we're starting to partition out some of the stuff that we're doing so like I mentioned the the private label line the private label brand that we're going to launch so we have a guy on Rhode Island who we paying you know a couple thousand bucks a month to take that on and to run with it how did you find this person how did you vet him uh It's a Small industry I mean you know it's somebody we've known forever and somebody knows somebody and you know it's somebody that we've worked with in different capacities over the years so all referral stuff you know it's not a searching for anybody it's people coming to us so right before the podcast I had a call with another woman she was a former engineer she was a designer she's worked for another brand for a while and blah blah blah and she's looking for some projects to take on so this is going to be a new approach it's something that we haven't done before so we're going to focus more on management of various contractors and resources to take on different projects are you leaving it to them to decide you know what platforms and what type you know what strategies um yeah yeah I mean they're more in the know and they're more um they understand the relevancy certainly more than I do you know I'm not even on social media you used to be I did you know couple once Co hit I just it didn't make my day better so I'll pop on every once in a while to look at you know my new football team certainly what you said is true there's a lot of those people out there would you agree there's also a lot of extremely untalented and un incompetent people that do marketing that manage make a living somehow and I I've hir some of them and you think absolutely and that's you know um I'm a little stuck up I guess probably or maybe a little arrogant no let's say you have high standards I have really high St yeah and I don't like low brow marketing you know I mean I'm and I don't like to do things the way everybody else does them or I mean I just I never have so instead of I'm not looking for marketing people I'm looking for good people who are or I'm interested in engaging with people who are smart driven relevant understand the landscape and then I mean marketing's easy you know that's the easy part it's more okay how do we get our brand in front of these people and let's not do it in traditional ways so I'm taking a slightly you know slightly non-traditional approach and that's what we've always done can you give us an example how are you getting your brand in front of people um well right yeah sure for an example so this brand this new brand that we're going to launch we've hired a guy who actually is a hand Dyer so he's got a company dying yarn um so he quit his day job he was working at a university he quit his day job to come work for us part-time wait wait wait he's working at a university and is a hand D which one is he he's hand dying he works both and that's very common you know that's very common that a lot of people that do hand dieye stuff and they sell on Etsy they have a full-time job and then on the side they have a creative job but he's a personal you know he he knows everybody so what he's doing is he's going and reaching out to various influencers various designers you know people who can move the needle no pun intended um with this brand so he's exposing them to the brand because people trust him and value because he's a respected member of our community so he's an influencer among influencers I guess um in some way so he's going around and he's spreading the word he's getting people to work with this yarn of ours he's getting people to design so that's kind of the big picture strategy that you're talking about then the people you're reaching out to around the country are influencers who know other influencers and you're using okay yeah exactly you nailed it wow you can just edit all that other stuff out and just just keep what you said I find that influencer marketing is the way to go that's something I've done differently Lauren you struggled with it at first when you got to Dallas you you told the STA how's it going now so um it's very important that when you put on an influencer event the people that are organizing understand your market and so there was a young lady there who realized that the event wasn't going well um and she said you know I just I'm not confident you I know how much you need this um because I know how much I need this to be here and I know how important it is that this gets out because what you're what you're offering is needed in Dallas so I will put on another event for you for free um and it will be well attended and you will see you will be able to get ambassadors from it and man it went Gang Busters and that's where most of our customers right now are coming from Tik Tock and we don't even have a Tik Tock account that's something that we're going to be working on in the New Year you're just reaching out to people who do have Tik Tock accounts and are you paying them to promote you so what we're doing is they we gave them a bag of our line of products all five and we offered them free services they came they tried they they uh video their experience they did like these Vlogs and like reviews it was amazing and how their before and afters how the salon looked you know pictures of me videos of me and they just put out all this content and everybody loved it and so now without even doing any other marketing that is we're seeing our numbers have gone up not to you know where I thought we would be in March we're there now um and so I'm like okay this is great um and so now I have to get ready to put myself into it everybody I've met ever since I've owned this business has said the business is Dana the business is Dana and the only way I've had it be me is by being there in the salon talking to customers well you can talk to customers and you don't have to be in the salon so what I'm working on right now is a way for me to talk to the staff a way for me to talk to the customers through video through our social media um through a Facebook live group a lot of our customers have a lot of questions about hair care about what truly is you know um healthy hair care and there's a lot of myth so I'm going to dispel all that because what we do Works um so my marketing is not only going to be geared to getting bus and seats but it's also educating my market as to what is healthy hair what do you need to do to make your hair grow and thicken just because you're 70 doesn't mean you have to have thin hair there's ways in which you can take care of your hair today that will pay off benefits in your future and then there are also things that you're doing today that are going to cost your hair Health in the future and they don't know what those things are um and so that's our marketing is going to gear more towards Dana talking to the customer well here's an interesting question it's really in the olden days if you put an ad in a magazine and it cost you five grand you'd have to say how many customers do we want to get back that we spent the 5,000 in this case what's the cost of doing Tik Tock what's the cost of doing some of these things and that's all relevant to what it's back to the same old thing return on investment the question is what do you need to generate from this to say yeah that was a success period yeah and the opportunity cost I mean I'm a big fan of talking through what else could you have done with that time right Jay forgive me but I got to ask both Laura and Dana have just told us that their their marketing is basically top to bottom influencer marketing do you have a good feel for what influencer marketing is sure oh my God are you asking him that because of his what year he was born no no J has been antisocial media J is like social what not anti but he's like it's not his lamee I certainly am not personally involved though we're doing it you have to factor into this that I'm a retailer I as I just told you I spend half a million dollars a year in real estate taxes there's a reason for that I'm on some major streets with major Frontage with major signage so that's a an important piece of getting new customers and then I've got a website and that's a major piece and we do we do the social media but I can tell you from just tracking it I said D Social Med media I would tell you that I I have the number and I can tell you that's not that's not the big number on my my uh we asked customers oh where did oh you're a new customer where did you hear about us I can tell you for a fact that's that's certainly not outshining um driveby business and website business you also have a very highend right I mean as far as Jason home like Jason home I'm less familiar with because we can't ask every customer where did you hear about us it's a different you know framing we have their name and number we know if they're in our computer it's a it's it's it's harder here's the big word for the day attribution it's much harder for attribution for Jason home that it is for framing so but Jay you just said you know for a fact that social media isn't driving a lot of business your way for framing for framing for framing I don't think you know for a fact what you're doing on social media for framing we're doing stuff that's what I mean stuff on the social media yeah I totally I totally follow you and Jason Jason home is different Jason home you have a fabulous Instagram um beautiful Instagram yeah you know I I know you're not in I got to go I gotta go my bus is coming I'll talk to you later Laura or Dana do you guys think there is an uh influencer play for Jay and picture framing listen when I hear them saying this I'm thinking I'm not arguing with any of it I'm sure and when I finish the podcast I will go and find out and and I'm not arguing with that that the world's changed and that's an I'm I'm absolutely not arguing that I'm just saying in my case there's other ways of getting business that are simpler that I'm doing every day with doing nothing just having a storefront you know whereas Laura doesn't have a storefront selling yarn that's driving most of business it's different I have a storefront I have a storefront driving business and to me getting the word out now I'm a word of mouth business and so I need to put the words in the mouth and the only way to do do it is to go to the people that they're listening to I think by following you on you know on Instagram if you ever decided to do influencer marketing your your people are artists and I don't mean like our we are doing influence we are doing it in Jason I know for a fact um interior designers and there's a huge difference between what I do and what you do everybody that you're going after has their hair done I'm going to guess two to 3% of the population has ever been into a frame shop period okay yeah but that might be a reason to do influencer marketing not to not do it listen I'm not arguing I said we're doing it I just not I can't do everything and I not that's not my Hands-On thing I'm the pricing guy this month I'm with Jay I it's not my thing social media is not my thing I don't like it no no no but I'm just I'm saying I I like I I'm leg I don't like it it doesn't make me feel good I needed somebody to come to me and say hey I will help you with this Lauren's just trying to be hip and cool and show us you've had an influencer in your store one of the reasons why I followed you was because somebody here query from the straight guy came on and was like exactly and so they there are people that you know that J cuz I told you Lauren told you that and people went and bought that lamp people went and bought that lamp because he bought it and so that's to me that's more valuable than driveby traffic okay you wait wait you can't you can't make a statement like that that it's more valuable than driveby traffic for God's I think in time it can be okay I'm sure it's valuable but you can't you can't ultimately go it's more valuable than driveby traffic if that's the case why am I why do I have a store why not just work out of a warehouse so no no but listen but listen because in time he had that influencer had over aund and something thousand followers those people there are people on Instagram who are going to look at that lamp and say because he had it I'm going to buy it and and over time valuable not arguing with that it's valuable Jay the potential number of people who could find you through influencer marketing versus the potential number of people who drive by your store okay okay but I'm going to say Jay has the most successful business out of all of us so he must be doing something right well no one's arguing that no aru defensive I'm not arguing with the thing you're saying I'm really not I you're right I it I'm just arguing with any on any conclusions that it's it's for sure going to be better than dry it's going to be valuable uh for sure it's just this is all very complicated and when you started off you said have you figured it out I'm continuing to try to figure it out I'll do that for the rest of my life anyone who says they've got it all figured out I think is uh uh I didn't ask you if you had it figured out I asked you if you knew what it was yeah I know what it is all right we're almost out of time real quickly I got a listener question I'd like you all to answer what are you planning to do this year that you always say you're going to do but but never get around to I've got one first I just's no doubt in my mind every year especially now I used to go to to my you know Warehouse every week for a production meeting and because of Co I have't I go there now I don't know half the people walking around there and don't know meaning you haven't met them or you don't know their name I haven't met well maybe I met them for a minute so every year I say I gotta get a directory with their picture their name and when I go over there I can look at it and I can walk into the Matt department and know her name and this year I told my HR person I'm telling you I want a directory printed out you got our HR go take a picture of everyone and I'm doing that this year because I feel like it's the least I can do I'm not saying I'm gonna memorize them but at least before I walk into the you know wood Department I can look at their names and go hi whatever their name is and I think that's valuable and I I think that's the least I can do for God's sakes I'm not suggesting I'm going to go and say how's the kids what are they up to where they going to school I but I certainly should know their name so this is the year Laura is there anything you're planning to do this year that you always say you're going to do but you never get around to I want to have budgets fully distributed to each department throughout all of the companies and all of the brands and that's something that I have not quite done yet but that is going to happen this year because what what's the what's the goal um the goal is to have people not ask me if they can by paper clips wow yeah so I don't know do you have enough budget left I mean you decide if the paper clip if if you want the colored paper clips and that's really important to you great good for you is that really about budgeting or is that simply about empowering them to know if it's less than $50 don't ask me just do what you want to do um It's a combination of the two but I think it is about budgeting and the people that do have because about half of the team has budgets and it's really nice cuz they know I've got 100 Grand to spend this year you know you know what you could fall into the big company problem with they've got the money therefore they're just going to spend it whether they need to or not I don't necessarily buy into that like either you need it or you don't need it I'm suggesting I'd rather train my people if you need it buy it if you don't need it don't buy it to start to go okay you got $5,000 what is that maybe they didn't need to spend 5,000 or maybe 5,000 wasn't enough and this is why it's taken me so long to do this because I haven't done it is 20 years of data of how much do we organ Al spend so if every year we end up spending $5,000 then that's what they're going to get and then the message is if you need more than this because I want you to buy it if you need it then let's talk this is a guideline this is a starting point sure and it's not this is not some big bureaucratic if you don't spend it it's going to go down or anything like that and we start slim you know and the messaging is you buy something if it's going to you know make somebody's life easier if it's going to increase efficiency if it's going to increase Community within within the office Dana how about you anything you're planning to do this year that you always say you're going to do but never get around to I've already started and I'm actually kind of proud of myself but I need help with um numbers numbers numbers numbers numbers numbers understanding the numbers as if it's like a ball in 3D and you're just rotating around the ball you know numbers from top to bottom front to back side to side um also getting my head out of the sand about the hard stuff realizing that because I stick my head in the sand makes it harder when I do come up for air what's the hard stuff what are you referring to the hard stuff is having hard conversation about you know looking at the numbers it's always the numbers for me it's like oh you know and only feeling better about the numbers when the numbers say something positive back if the numbers don't then oh I don't want to look at it don't want to talk about it don't want to do it oh interesting I bet that's common yeah absolutely my thanks to Jay goz Dana White and Laura Xander and of course to our sponsor the great game of business which helps businesses Implement open book management and employee ownership you can learn more atre game.com thanks for sharing everybody as always much appreciated 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 o r n at21 hats.com do it now before you forget and don't be afraid to tell Jay what you really think he 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 blank word Productions okay now you can leave thanks for listening everyone hey