Marketing Workshop: I Didn’t Know It Was Going to Work

[Music] hello everyone welcome to the 21 hats podcast I'm your host Lauren Feldman this week Sean busy and I talked to John Garrett about his contrarian approach to newspapers marketing and competition Garrett has built a Texas based chain of print newspapers that has managed to outcompete established news organizations and digital platforms for both Community engagement and local advertising not surprisingly when he first took out a $39,000 credit card Loan in 20 05 and started telling people that his business model would feature a monthly print publication that he would mail to everyone in his Target communities for free he didn't get a lot of congratulations and not everything he's tried has worked an expansion into Arizona Tennessee and Georgia for example failed early in the pandemic but almost 20 years after its debut a period during which most local Publications have been in Retreat Community impact is thriving from his seat as a publisher Garrett offers a persp itive on marketing that any business owner would be wise to consider even in Good Times owning and running at 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 will let owners know they are not alone in facing challenges same thing with our daily newsletter the 21 hats Morning Report which Chek 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 are Sean busy CEO of Kinesis which is based in Portland Oregon and works with small businesses on marketing culture and strategy and John Garrett CEO of community impact which publishes Community newspapers throughout Texas the episode is titled I didn't know it was going to work but before we get started I want to play a it of an interview I did with Kevin Walter who is one of the co-founders of tasty catering in Chicago this is one of a series of interviews I'm doing for our sponsor the great game of business with business owners who practice open book management when tasty opened its books Kevin was the point person and he later went on to become a full-time coach with the great game this audio segment starts with me asking Kevin about the impact of the pandemic on tasty catering how did uh tasty do during covid that seems like it would have been a very difficult time for a catering business oh of course we rely on groups of people to generate revenue and cash and there weren't many groups of people once the governor shut the state down we actually stopped doing our huddles forward looking forecasting huddles that we did weekly because it was just a wash and red numbers we were down 95% the first month off of where we were supposed to be uh our team came to us and said all right we're tired of looking at the red numbers what really matters is how much how much runway do we have before we have to start looking for jobs they wanted truth and honesty most other Caterers either closed their doors or laid off everyone but maybe one or two employees and mysteriously when PPP money became available what 2 3 4 months later they mysteriously reopened so they get their hands on the money uh we kept everybody employed they told us we need uh a minimum amount of hours a week we'll take a 10% pay cut the owners will take 30% um but we've got to keep this band together because this is going to end and when it does we got to be together and ready to seize more market share from caters that are slow to react or they can't get their people back was it the PPP money that allowed you to to do that to keep people on board yes in part um the other part was those reductions another part was pivoting um we I know it's an overused term nowadays but we move people around through the different companies so the the contract manufacturer baked goods uh they they had the capability to wrap things sing Single service so that business actually picked up a bit we rotated people around to make sure we made the minimum of hours no matter what company it was in you can read a text version of my entire interview with Kevin Walter including his explanation of why tasty caterine decided to open its books at 21 hats and now on to Today's Show welcome Sean and John it's great to have you both here John I still don't completely understand how you're doing what you're doing so I'd like to start could you just explain your basic business model to us in other words how are you making print work here in 2023 yeah thanks Lauren well the basic premise is is that even though we live in the information age no one knows what's really happening in their own backyard we put together all that information that matters to you that's news to you that you care about in your community and we send it to you and people love it and since people love it and they read it then advertisers you know want to be a part of it and that's how we generate our Revenue we're we're not a subscription based product we're we're a free highquality local journalism product that really connects people to their communities and local businesses are a big part of the community but what you just described could kind of describe local journalism for you know the last 100 or 200 years and yet Publications have been closing all over the country why is yours succeeding where others uh are failing well I mean there's probably several ingredients to that um but let's let's also not discount you know strategic decisions that a lot of those news organizations have made for a variety of ownership reasons and whatever reasons just bad strategy planning but the critical piece I think for us as a news organization that we are today is the circulation piece you know we mail 2.5 million newspapers every month to Residents All Over Texas that's by far more than any publication actually in the country and so when a lot of the local news organizations you know the Legacy I'm talking Legacy right now when when they they made their strategies on circulation costs like how much it costs to subscribe to your local paper they've ramped that up so much that their circulation has just plummeted and if circulation plummets then fewer advertisers are interested in that audience and so then you know their model is let's build a reader Revenue model so they're they're just trying to drive circulation dollars while Google and Facebook and Tik Tok and all those guys just say thank you we we'll take all the we'll take all the local ad dollars and uh their their product just isn't competitive any longer we we are competitive because we're we're local and for most local businesses geography is the number one filter do you live near my store do you live near my restaurant we do geography better than I would say even better than meta or better than a lot of these digital companies do and what do you mean by that uh because obviously they do it with Geo fencing and other digital techniques what are you able to do that they can't do yeah so I mean we know every address we're going to there's not there's no there's no digital ambiguity about you know the cell phone and you know exactly where it's at the other thing is is that you know if you if you continue to look at Round Rock news articles we know that you care about Round Rock so we have you know good first- party data so you know just naturally going to every single household in a geography is pretty impressive you know as opposed to buying you know Geo uh targeting which which I think is a great product you know so but when you're talking about competing right we're not we're not saying we're the only ones that can do geo targeting when you're talking about going to a business owner and saying hey like do you want to reach these people around you we need to be able to compete and we compete very well and so that's just unique I mean none of the large dailies in any of the cities that we compete with here in Texas um none of them can compete from a geographic standpoint like we can it's not even in the same conversation yeah I I could see that you know it's like when I go online and I say you know what is my IP address and you look at up and it it has me over in Hood River which is about 45 minutes east of Portland and if you're advertising to me thinking I'm in Hood River all of those ad dollars are wasted you know it's it's it's it's not even that close what people are realizing is that a lot of these digital media companies actually aren't quite that good at at targeting as they say they are and that's a whole another thing I don't know if you have any thoughts on that oh man I got lots of thoughts on that throw your competition under the bus go listen I mean it used to be cheap right it used to be inexpensive to go on Facebook do all these targeting tools and right and they know a lot about us you know obviously what Apple's done to meta is like crazy I've always felt like the data was wrong but now I mean like even if they are really good at it uh they're expensive they're not they're not inexpensive any longer and so we compete with them on dollars and the other thing is is that we are tangible and I think that that's really important I talk about this work called figal we live in a fital world we're physical beings in a digital world you know retail stores are coming back physical stores matter to us and you know in Roundrock Texas and in Austin Texas and and uh you know Frisco Texas we're a tangible product to the business owner and the decision maker so Facebook's not really just tangible right so like I think that gives us a little bit of an edge because we have people there in those cities but um also we're like we show up at the business owner's home address you know they kind of know who we are and I think that's I think that helps that gives us a little bit of an edge could you take us back uh when did you and your wife Start Community impact and what gave you the confidence back then that you know at a time when you know a lot of media companies were struggling what convinced you that this would work well I I always wanted to be an entrepreneur I had all these really stupid ideas that my wife would always turn down but I've been in the business long for my whole career at that point um and I was like I I don't know I just kind of Drew out this idea that my wife and I we had a two-year-old kid we didn't care about school sports that's that's a big thing a difference between us in other community papers we don't write about sports or courts or anything like that we write about business development local news government you know so our Focus area was always like hey what do people actually care about that don't have Johnny kicking the winning field goal that lives in their family right so we we really focused on things that we felt like people were interested in and curious about and so I don't know think any business owner I mean most business owners I know there's a lot of you know I I I did not know that it was going to work appreciate you admitting that I took a $39,000 credit card loan to start it and because you know it was hard to get loans and you're still personally liable for it so I took a and I had one of those it was like you know 1.9% financing for the life of the loan as long as you pay the minimum um and you know I just I did that and you know I was young enough in my career where I felt like I could make those mistakes and then still go get another job so I don't know I just I just felt like it was a good idea and you know I'd been in the business so that's the other thing like I'm I I grew up in the business so I knew a lot about the business I knew not only the business side but I'd learned some of the journalism side at the Business Journal here in Austin and so that gave me you know I think I was kind of ready for this for this move but I didn't know it was going to work I mean my first issue my costs were about 30,000 a month to to print mail and have had a couple of Staff members and we were really smart on the front end we did you know $116,000 of Revenue but it was 50% so we told everybody if you sign a 12mon contract we'll give you 50% in the first month you know which was really smart because that meant month two you know we had $3,000 but of Revenue and so we were pretty much cash flow positive month two wow which is really really helpful when you're spending you know $166,000 a month on Printing and mailing so uh I I didn't I was kind of stupid to be honest with you about like how fast would cash run out I think I was kind of blind to the reality of of how cash flow works but it worked and I did a lot of prepaid that you know my customers helped finance obviously the business because we we took the payment up front printer gave us terms uh but postage does it like you got to prepaid postage so but you know learning you know just being Scrappy at the beginning I think helps like oh if you prepay you know I'll give you a little discount that kind of thing when was it you started John we started in 2005 in round rockerville area it say Northern suburbs of Austin home of Dell computer Corporation it's not a sleepy town I know a lot of people around the country think we ride horses to work it's high-tech it's a high-tech town and um it's a it's a great place to start a newspaper how did you sell those first deals I mean you basically have an unproven thing you know you don't have any uh I don't know credibility in a lot of way right so you clearly people trusted you how did that happen yeah I mean I I had a graphic designer kind of put together like some mock boards and they're like giant poster board size but really nice you know of what it would look like because it was so new it was just a different concept so I needed our customers to visualize it so these two giant boards I'm walking around with one of those you know art portfolio big art portfolio cases and and I'm just it's local businesses I'm like hey don't you think you know Round Rock needs this and I mean listen I got told no a lot you know some of the most successful business owners in in the city that I had looked up to right were said things like you're going to mail 60,000 news you're crazy and I mean I got a lot of lot of NOS but the how I got yeses I mean there's a lot of luck involved like one one of the biggest healthc care companies uh here in in Austin this woman never answers her phone she told me this years later but like I called and she thought it was her you know her family and so she answered it and I got a meeting with her she she was a big support at the beginning so you know I got kind of Lucky but I think it also I had relationships you know I was in the Austin Market I knew local business owners I had a lot of people take chances on me I think about one of my my actually my invoice number one his name is Ken machas he owns a steam cleaning place here in Austin you know a lot of entrepreneurs want to help other entrepreneurs and I think just being vulnerable business owners like directly is a really good way to um to build trust and there were a lot of entrepreneurs that just helped me because they wanted to help me and that's something special yeah that's I think that's such great advice you know so often I'll talk to somebody who's trying to get something off the ground and they approach it from a how do I sell and convince as opposed to just asking for help right like in in a way that's what you're doing right exactly yeah you're going out there saying hey can you support this thing here's why it's different and sometimes people will say no but then they'll point you to somebody else who will say yes and that's a whole another thing too to think about is how do you turn a no into a yes that's exactly right saying I love what you said there like will you help me you know we would say that will you help us bring local news to Frisco Texas we had no credibility in those cities right but will you help us that that's really good and you're right they will redirect you to other other people that's really good advice even from early early point it was almost like a higher purpose right you know so it's like you you're saying like we need this will you help us as opposed to I'm running a business trying to make money and I'm trying to sell you so it's a very different way of approaching it yeah it resonates with everybody to say when I said the information age but no one knows what's happening in our backyard like that that just resonates to us all there's all this information and it's everywhere out it's out there where do I go to find the city council agenda where do I go to find out what they're building behind my house hey are they going to build something cool nearby when's this road get it done right like where do you go find that information it's out there we just you know curate it in a unique way and we send it to everybody and people are like thank you John you uh you told us that you know today it's a lot more expensive than it used to be to advertise digitally and today you have tremendous credibility you're sending your publication to every home and the advertisers that you reach out to know that and understand that and believe that that wasn't the case in 2005 back then who did you see as your competition and back then your digital competition was a lot less expensive how did you win that battle yeah um so we we did view like the local dailies and the local community papers as competition we won by circulation like it wasn't even close the Round Rock leader the local paper in Round Rock and a city of you know 50 60,000 people they might have been going to 3,000 you know we were going to all of them wow so for us we our selling pitch was kind of a cost per household so even though it was cheaper to buy in um and the Roundrock leader sure it's only $100 a week there and maybe it costs us $400 but we're going to 30 times as many households wow so we we sold it on a kind of a cost per household cost per thousand basis and that's how we competed but it didn't take long because listen one thing that we are serious about is design and our Pro it's 35b hybrite newsprint stitched and trimmed it's a beautiful product and so it stays on people's coffee tables all week long I mean all month long we're monthly and you know when they see it you know quality sells so you know we we never wanted to be the cheapest although on a cost per household we were incredible value we we are kind of more expensive even today you know today we're we're still we're really selling against you know digital I mean we still sell against like Billboards and you know there's some TV sell but mostly we're selling against Facebook and Digital Services and those kinds of things quality comment is really interesting John you know I think about when I was in a small town you know I grew up in southern Oregon and I was in a community of maybe 25,000 people and I remember that you know you go to the restaurant and there'd be a little like wire rack and there'd be this like very poorly designed very cheaply printed kind of like the local news sort of thing so it was free like yours it was free but it wasn't coming into my home and the quality was just terrible and then the other option was like you said was the paid circulation so that Ashlin daily Tidings which is now out of business so that was actually not very well done either so it's like it seems like you're you're doing something interesting here where you're giving something away of high quality we have like 38 additions and we have 30 something like 33 designers on staff whoa so most of our Publications in our in our industry would have like four right and and it shows in you know and how we curate the news and um yeah Design's a big part of our of of who we are can you give us a snapshot of how big the your your company is employees and yeah yeah so we'll we'll we'll hopefully you know the the budget says we'll do we'll do 35 million in sales this year we we've got about 200 employees including uh staff and we have a our own printing facility here in Austin and um we're all over the state so in Austin Houston Dallas and San Antonio you know we're focused on Texas that was a big that was a big change for us during the pandemic we had a lot of difficulty we were out we were out in Phoenix um which was profitable but what what happened with the supply chain and what happened with the world just made us kind of think what are we doing so we we focus we're focused on Texas which is you know pretty good place to be ninth largest economy in the world so we're going to hang out here for a bit you have a lot of room to grow here tell us about that though what what drove the decision to expand and if it was profitable can you tell us more about why you decided to stick with Texas yeah so the our DNA is hilarious like our DNA is like let's fight let's fight the incumbent so what happened with us is we were growing in Houston Austin and Dallas at the time hurricane Harvey hit Houston and hit it hard and you know we're local businesses so they were flooded like you know but we we we just had this like mentality okay giant you're going to face us let's take it on and we just felt like there's a phrase that says everything's bigger in Texas we we said the CI is bigger than Texas so we felt like what we did should be bigger than just the state and so yeah we went out to Phoenix and um you know listen I I don't I'm not counting out that we will ever go National again I think the what I'm saying is the world changed so we have this print facility here and pre pandemic it made a lot of sense we would print here ship a day out right to Phoenix and it cost us like $2,500 a trip we could make those economic work what happened with the pandemic you remember the truck short it went from $2500 to $10,000 wow we can make it and our paper by the way paper is still like gold uh our paper costs per ton went from like 650 to 1,200 and for us that's our circulation it's about $100,000 a month of cogs increase so we we just couldn't we couldn't justify the mission because we were growing we had I think I think we had five additions in Phoenix and uh what happened was there was another local locally owned Independent News organization that wanted to kind of go where we were and so we ended up selling the operation to those guys and just kind of put our tail between our legs and it was sad we really believe that well we put a lot into I lost a lot of money to be to be honest and um so it's kind of sad to suck that up but today knowing all that I know today all all that's happening in the world like I feel really good about that decision U even though it's as a as an owner and a as just somebody who likes to win it it hurt it hurt a little bit obviously to close that down so luckily all of our employees were offer jobs there um with the new company and you know we did the best we could as as an as an ownership group you know ownership group me me and my wife to take care of uh to take care of those folks so yeah we've we've won and we've lost uh Atlanta we launched in March of 2020 like really March of 2020 jeez good planning that was going to be six weeks right the pandemic was the last six weeks and that's what we thought back then right and so anyways we ended up closing that down as well and we had a little operation in Nashville that we had actually acquired another publication and we ended up uh closing that down too so we just said hey let's focus let's focus on Texas and have those supply chain issues and the heightened cost has that reverted to where things were before the pandemic or you still fighting that yeah Trucking is a little easier I don't really know how much it would cost to send a truck out there now um I'm sure it'll be double but probably not 10,000 you know paper is still high so so we just got our first reduction that we've seen in years um so we got a 15% reduction cost but you know we're up 100% so we got a little way ways to go I'm not a math expert but I think we need to get back to 50% we a 50% reduction I think that's right we'll be back to where we were before but I I don't see I don't see that ever happening I think there's a lot of stickiness to these cost increases tell us uh John you know I'm familiar with the Business Journal here in Portland I know they're a National Organization their model seems to be really built upon you know a paid subscription and then events they do a lot of that stuff and then advertising sales tell us a little bit about how you differ from from them and how you see your strategy when they're in a market you're in Sean I love that question because part of the reason why I start you know I was at the awesome Business Journal same company here was our sales pitch back in 2005 the reason why you want to advertise in the Business Journal is because you want to be around decision makers the reason decision makers read The Business Journal is because we tell people about things that are happening first and I just thought to myself why why is it only the Insiders like the smart developers and bankers and all those guys to why are they the ones that know first right shouldn't everybody like if you own the farm that the developer knows is a Road's going through it shouldn't you like know that you know he shows up at your door so you don't sell the farm you know for for an unfair price so that was our that's how we flipped it we said no just those subscribers everyone deserves to know this stuff first and so we flipped it on its head that way we don't do events I think that's a great business of theirs uh we we could get into events I think although I will tell you that most of our customers say please don't do events we're so sick of all these events so they're smart to do it I think it's a big Revenue driver for them and I I think most people in our industry are less concerned about ad sales than we are of print in particular um we really still believe in the power of print and it shows in our numbers but most news organizations are selling Digital Services you know how do I help this local business buy Facebook and and that kind of thing so more of an agency model um we're we're really more focused still on owned and operated so we did create a great uh email newsletter during the pandemic I think it's the best Community email newsletter in the country it's free and it's growing like crazy we're sitting out about 180,000 a day now so it's we be we've turned in from a monthly news organization to a daily news organization and and it's there's you know we're doing sponsored content Lauren so there's a real product mix Market fit for digital that I in my opinion hasn't been there in a long time for news organizations you know pop up banners and autoplay videos they don't get me too excited but sponsor content it's pretty fun and you can it's a it's a great product for some of our customers why do you think the newsletter succeeded what are you offering that people wanted well I think people just want to know what's happening in their own backyard every day there's news so we are geographically targeted the newsletter just like our papers so that we have a round rock newsletter and we tell people the same kinds of things we do in the paper but we do it through the digital email format and people like it so I mean it's it's really not rocket science we're giving people news that matters to them about about their area and people like it so they subscribe to it it's it's not hard are you competing with yourself though does that take away from interest in the print publication yeah Lauren I think we we learned that lesson right as an industry or some of us did in the late 90s that that's stupid like give people the news that they the way that they want it and what you what's really interesting is like we'll write a story about you know something the city hall does in the newsletter by the way what's really funny about that is we would do that anyways online but now we're actually pushing it out in an email but the reader reads it and then they get the paper and we we we may say the exact same thing but the way our brains work we need to see things and hear things multiple times for it to really resonate and to be truthful and factual in our brain so it's it's kind of reaffirming what what they may have already known and it hasn't impacted our business at all we hear the same things about our newsletter that we do the newspaper and in fact Lauren since you asked the city of Roundrock does this city survey I talk about this a few times but every two years they ask their citizens where do they get their news or information about the city it's a part of a large city survey they do they ask about police you know all the public sa all that stuff but anyways long story short in 2020 74% of residents said they get their news from Community impact by far number one like there's nothing even close like the Statesman the daily paper here has been here for 150 years is like 14% Facebook is like 40% I think it was 74% in 2020 we launched the newsletter guess what happens to to that number it goes up 77% in 2022 wow survey said that they get their news for impact so I feel like it's a flywheel like both the print and the digital create energy for each other and it I mean come on like any anybody can try to start an online news organization but we have we're in everybody's home and we're online like that feels like a good heavyweight fighter right there ready to win you know and help help local uh residents really know what's happening in their backyard I'm thinking of all these media sources that I've consumed over the years and it feels a little bit like the mistake that they made was that they they tried to do everything poorly you know they they tried to be original journalism but then they would cut their new staffs they tried to get it in they tried to get distribution but they would charge just enough to where people wouldn't really want to pay for it so they wouldn't pay for circulation so they'd have weak circulation they tried to make it work with advertising dollars but then the advertisers would look at circulation and go well you're not that valuable and then they tried to become digital agencies as you mentioned earlier and they kind of do that shittily they're just a middleman most of the time marking it up when you can just go DIY it or hire another agency so it's like they've tried to do everything but they've done nothing well and and I think that some some like the New York Times have figured out like some of this stuff is just a Fool's errand but the local the local Publications they've been on that train for a while now and it seems like they can never get off it and if I if I see this correctly what I think I'm hearing from you is like we've given up a few things like we're we're willing to say we're going to get no revenue from circulation dollars we're we're just not going to do that you know in exchange we're going to go to advertisers and say hey we touch a lot of households 3/4 of the population in the market you just talked about am I am I hearing that right is that is that a fair assessment or what am I missing yeah I mean I think the only thing you're missing I think there are a lot of Independent News organizations around the country that are usually you know family-owned uh that are doing it right there there are and they're just kind of not on the radar yeah obviously New York when you think about big like names everyone knows the New York Times And The Wall Street Journal are doing it the best The Washington Post is stting to show some real cracks uh B Bezos is maybe regretting some of that but I think from like your what we most people think about Metro newspapers there's a lot of like differences between the ones that are in the cities that around the country but the majority of them fit that to a te there was this philosophy around our industry that said you know if you look at a spreadsheet and you have a 100,000 subscribers and they're paying $300 a year you know that's that's uh less money than if you have 50,000 paying ,000 a year and so they were willing to lose 50,000 of the subscribers to get more circulation revenue and it was a total train wreck and that's where these private Equity companies a lot of them have bought these news organizations on on those kind of calculations in Excel spreadsheet and what have they left themselves with the idea you have a three puff cigar right so you pay you pay for two Puffs of it and you get that last puff for free and that's how view these news organizations there's only three Puffs left they they say things like there's a Runway left how much runway do we have left before print dies I mean that's what they say in our industry and I'm like guys you're just destroying your best asset was it the outside acquisition that that really was the Catalyst for this this decline you know so private Equity coming in or consolidation well I think they were disrupted for sure I mean Craig Craig Newman from Craigslist says it's not my fault I mean it totally was his fault but they just you know he's funding journalism now he's trying to be the nice guy but he destroyed so much of the institution you know the Legacy stuff and I think you know I'll say this you know it's it's starting to happen I think AI is going to be as disruptive to local news as the web was back in the 90s and I think it's going to be interesting to see I think AI actually gives these news organizations who have a lot of data and can provide a lot of context that Google kind of does now it gives them a chance to compete with Google you you know for for information if you really wanted to know what's happening in in Oregon and you went to the The Archives of all these newspapers and pretend like they were actually producing new content but some of them are but so you can imagine what a great data set that is so my my my thinking is is that will the news organizations what we learned in the 90s have we failed had Craigslist destroyed classifies will we learn from that and in you know 2023 will we take this new technology that truly will if you study it it could disrupt Google and if if it does disrupt Google News organizations that have data can they compete in a new way there's a lot of that happening in our industry people are looking at that right now and that's I mean I see that as a huge opportunity so I I don't I don't think it was just one thing to answer your question Sean I think there's a variety of factors but you kind of nailed it on they destroyed their own product with pricing they didn't invest in the thing that made them money and now they're like what does the market want the market wants Facebook so let me go sell Facebook as a third party reseller I mean you're exactly right John do you see AI as an opportunity for you as something to use yeah but it's different than what you think it's different what you think so I mean what people what people are scared of is like it's going to replace reporters I think that's I think companies will do that I think that is a that's a mistake I think AI in the news business will be the companies that do three things really well can do some fun things and those three things are number one you have to have the dat data the data's got to be yours like and it's got to be new and it's going to be fresh you got to be completely updating the data and it's got to be old right for context you can do some great things with context and new data that means you got to have reporters finding that stuff out the second thing is you got uh you got to have great circulation like how are you going to get that information out if it's just you know a database somewhere and there's no real traffic to the side or something like you got to have circulation but the third thing I think is going to be the most vital is going to be trust brand if I trust the news organization that is using AI to give me context to what I'm looking for Home Run and I think that there's going to be a lot of organizations out there that are using Ai and they already are that aren't trustworthy so if the local news organizations have a good brand they can use it and I think that it could be a valuable tool to how we gather news how we answer questions and how we help local businesses succeed right the the revenue side so I think it's yeah I think it's going to be a big opportunity for people what about the the design side do you see I mean you talked about having 33 or so graphic designers who are putting these things together do you see them worried about that there's a lot of question about design in terms of copyrights and how how the machine doesn't really understand art um like we do but but I mean if it gets better I could see it being being a useful tool um much like could help a designer you know think creatively yeah I think it could help I don't know what the future looks like for you know our um you know ratio of designers to paper but I don't I don't know I I honestly I haven't done enough work on the design AI side I've been mostly focused on uh how it takes content summarizes it I've been playing around with crazy stuff like took a CNN.com video plugged it into chat gbt 4 said hey tell me the five things that I need to know about this video so I don't have to watch the video man it spit it right out this is what the guy said on the video all I did was inputed a link that's pretty valuable you know um so that's what I've been playing around with and I think that that's got some really cool implications not from a cost cutting standpoint but from a product quality standpoint that could be a game changer for our industry it sounds like a good reporters tool exactly right Lauren and let me flip that on its head right like say a reporter's using it and it gets all the context and all the data I think the one media company I really admire the most right now is Bloomberg you know the bloom terminal right they you call it that's really what this is now you flip it on its head and let's just say that we built a reporters tool that's really amazing has all this context helps them write the stories better flip it on its head and give that to the reader like what what could a reader do with the same tools that a reporter has I mean I just think that's amazing so I you know it really would help a business leader for example understand a community that they're going to for the first time I just think there's some really cool stuff that it could do and um I'm I'm very curious about it John how do you Market your business do you reach out to subscribers or do you just mail your product to them and how do you reach out to businesses and um Market your your opportunity to them yeah I mean Direct Mail is a great product yeah we we Direct Mail you know 2.5 million pieces every month about cou Community impact is it's crazy like most news organizations don't believe this but like we get something like 80 call-in leads a week that are like interesting in advertising it's wild so yeah our product is so good it's kind of but in terms of like brand we we really have stepped up our brand game a lot it's funny you know they always say that like what you're really good at you're not really good at for yourself and so we we we've been investing a lot more time in in our brand we used to be Community impact newspaper now we're just Community impact our tagline used to be local useful everyone gets it now it's just news everyone gets we're kind of developing as well our own brand and uh you know we're using HubSpot uh to do you know some email targeting to our clients you know we're doing some things but we're still growing in that area I think and it's it is funny we sell it but we we don't really focus on it enough ourselves so um we we have work to do there how do you see your role in the the new marketing landscape you know I think a lot about how let's say I wanted to send something to somebody I don't even know if they're in the office anymore like you know like if I wanted to reach out and you know send somebody a really I don't know thoughtful gift or a letter or something you know as a prospect I don't you know they may or may not even be at their office but they have a house somewhere I'm curious if you're thinking about that at all man that's good one I'm G have to put that one in the parking lot somewhere yeah I I I like that idea yeah especially because from a from a circulation standpoint distribution standpoint we're already doing a lot there yeah no I mean I no I I think for us our growth strategy right now is is pretty simple you know we want to we want to build uh we want to we're calling it CI simple we're going to do a redesign of our p that's a little more simple great design is still simple simple is still a great design but it's it's going to we're going to do some things because we think people are learning a little differently so we're going to try to innovate that we're going to continue to build up our newsletter we think that's a huge upside for us and you know we're going to grow in some new markets we have a new approach to growing into markets that we call CI light and that's kind of a double on Tandra you like that Lauren right it's we want to be a light to the Comm the community but we also um we want to go in there little lier you know we we go in heavy with the print product it's very expensive and maybe we could go digital first with a really high quality newsletter product um so our focus is market share like continue to grow in Texas and then and then uh some of those side projects like you talked about you know could come in handy I do think we need to grow we our digital products are getting really good you when I say digital products I mean owned and operated like our own so I think one of the things I'm thinking about is we've always sold advertising like per month so so we've always been kind of a 12month contract kind of company I really want to go to like kind of advertising as a service type model where instead of charging somebody you know $673 for a quarter page ad and $350 for a newsletter ad or whatever then we know we we charge $1,500 a month and we do all of these things for you um and I think that that's kind of a cool way to build the you know the the news organization of the future so that's what I'm thinking about John if you go into a new community where you're not established and you go newsletter first how do you spread the word and get people to notice it I I'm I'm asking for a friend yeah listen well friend you're doing some really smart things you know I think events uh are a really smart way to to connect you know you know people to your your digital brand um you know I I I think there's some interesting tools out there that companies are creating you know for referral tools most of our leads come from Hub spots pop up on our website like cuz it knows you're in round so says hey do you want to get you know the Round Rock morning newsletter um pops up because it knows if you are a subscriber or not a subscriber so that's where most of our organic growth comes from I mean we don't we're not doing a lot of marketing for it or the smart things that people are doing but we're we're growing almost 800 a week so just organically so it's pretty good are there things you know about the digital advertising world because you're competing with them yeah I today I think the Forward Thinking companies that are looking to do digital marketing are understanding that this whole like idea of Storytelling is really good and everything that you're doing brand image like Billboards or or insta ads or um content marketing whatever you're doing the the message needs to be the same so if you're a business owner the best thing you can actually yourself and be honest with yourself is what are you trying to accomplish number one are you trying to build your brand are you have a new product you want to tell a story about or whatever that's number one number two are you trying to actually generate you know leads like fill out this form right or are you trying to generate foot traffic like couponing or that kind of thing you really need to decide what you're trying to do and then whatever that is this is where business owner is get in a lot of troubl they have all these different vendors that are selling them all these different ways to do all those three different things decide really what you're trying to do what is the number one thing you're trying to do and go all in on your marketing efforts to do that one thing really well we do a lot of Design Services for free for our clients we're like hey take this to the other magazine that you're advertising or take this to your your digital provider and make sure that the artwork is similar make sure that the goal if you have a QR code in there or you have a click to form or whatever make sure in every marketing that you're doing whether you're buying Banners at a little league baseball game or buying flyers or your whatever you're buying decide which of those three you're trying to accomplish don't mix it up don't put a bunch of different objectives in there make sure all the mediums that you're doing are going after that one thing and go after that hard for you know at least six months and then make adjustments and but but stay consistent and uh find out what works for your formula you might have to up your offer a little bit you might have to choose a different uh piece of artwork your call of action might not be big enough whatever tweak around with it but don't spray 14 different messages all over the world and and try to you know guess which one's going to work um that would be my best advice and I think that the what's interesting about you know the next generation of people really Millennials and gen zers they're expecting that like the idea that we're not going to share ideas or Thoughts with our competitors anymore is so my generation like if we're doing if we're doing design work for a local business and we don't let them use it in another magazine because that's what I was taught you know at the Houston Chronicle when I started there that is so uncool and it's just not going to work so I think we need to share more ideas with our competition that could have been a lawsuit in the old days right right we need to be so generous to our customers and help them and work together with our competitors to help them and it's more money for all of us and the customer wins and that's what's really the most important thing I I think that's so smart that you see that it in doing this work for them for free but encourage them to use it elsewhere you're not just helping them that it pays off for you as well yeah that's right and that's a new way of thinking Lauren that is for sure that is the next Generation teaching this teaching us older people you know some things now listen the Next Generation needs to listen to us about a few things but we can learn from each other all right Sean that was really interesting now that John's not here tell me what do you make of all that well I I mean first what a what an incredible business mind you know I to build a business that's I don't remember what he said 35 million or something you know clearly he's like tapped into something really really smart and it just kind of speaks to having a good strategy and and maybe in some ways swimming in the opposite direction than the rest of the market what stood out to you um well looks at the same thing especially the uh the notion of kind of running against the crowd it's kind of interesting how these things can go in in in Cycles but it's almost like you know you hear now that there's kind of a movement toward people doing handwritten notes again I'm never going to do that my handwriting's too bad for one thing but but they feel special now uh in a way because so few people do them same thing with print I think you know print looks different today than it did 10 years ago when it seemed to be going OB solete now there no popup ads it kind of feels a little bit upscale does that make sense yeah it does I mean I I I feel like a lot of these print Publications have sort of rised to digital but yet they've created a digital experience it's not really that enticing I mean I I don't know about you but I don't need another popup ad um so uh so they all sort of seem to be doing that same thing and then I yeah I can't remember the last time I bought a business magazine you know a print business magazine and yet you know I still get the bus the local we have a Business Journal here and still read that in you know in print form so I think that combination of Highly relevant to your local community with the layer of quality and circulation I think that's a that's a pretty powerful formula for him and and I think a lot of us are maybe a little bit tired of devices the other thing is it's just you know for for me I mean I started my journalism career before the internet so I've endured some of these shifts um at various Publications and they've been really painful at some of the places where I've been and to see him come up with an entirely different business model is really kind of inspiring to me and you know I think it it's so countered to what the conventional wisdom has kind of been you know in the old days it used to be you know everybody relied on cheap subscriptions and getting as many advertis advertising dollars as possible the New York Times was kind of at the Forefront of flipping that and you know they put up a pay wall and made their subscribers pay real money and managed to hang on to a good bit of advertising dollars and created a much more successful model not everybody's been able to do that I work for a bunch of magazines that really struggled uh with the switch to to digital and in some cases still haven't figured it out they're stuck with long-term cost subscriptions and that forces them to try to get generate as many eyeballs as possible to throw at their advertising and that means they're much more focused on clicks than they are on quality and it's it's just kind of a losing formula he's gone entirely the different direction it's not just uh cheap subscriptions it's you know free subscriptions give it to everybody and obviously it's got to be of value you can't doesn't help to give it away if people are just going to throw it out but as he pointed out to us people are actually getting their news from it in very large numbers that means he's you know he's got a much larger market then than most local Publications and I think that's how he's made it work yeah that's a really good point you know I feel like the the Trap so many businesses fall into is that they try to be a little bit of something to everything and so when he does something he goes all in on it so whether it's design right he's like we're going to go all in and make this thing look really really good not just like a little bit better but like really good different paper more expensive paper higher professional designers and the same like to your point on circulation he didn't say well we're going to make it a lot less costly than something else we're going to go all in and like give it away to everybody in the in the region to everybody yes that's another Allin right the Allin of the entire region not just some how do you think about it from the perspective of local businesses in his areas of of the regions that he serves why is this working for local businesses I mean some of it I think is a simple choice right you know I think as as Google Rose and Rose in power and reach and influence a lot of a lot of channels just get kind of wiped out and then that kind of became your one choice as a business well you better be especially if you're a local let's say a businesses to Consumer organization you know it's sort of like well Google that was your choice you know and if somebody's searching you better be there um much in the same way like back in the day like you had to be in the Yellow Pages remember that like I do like you would be a fool to not have a listing in the Yellow Pages now you have to explain what the Yellow Pages are well we'll get Jay on for that the time machine but I think John is coming with an alternative and when you have an alternative then it can start to to highlight for you what are the failings of the Monopoly right so you know in Google it it kind of dumbs everything down to a listing and it lumps you in with all of your competitors uh with with a print publication right now you can be creative you can have different types of advertising you can try different headlines you can experiment with imagery and design you can have special offers like it just gives you a lot more flexibility and creativity that it kind of gets taken away from you in the Google world because Google wants to reduce you down to a commodity purchase of advertising and then they want to jack up the rates on everybody over time so I think I think having an alternative is a big deal again though I guess it it really only works because he's sending it to everybody um uhhuh yeah which is something that as he told us um a lot of people thought was nuts um the idea that you would print that many copies and just send it to people whether they want wanted it or not turns out they did want it yeah yeah I mean and I props to him I never would have thought that would be the way to go all right well that's why we do these marketing workshops I think I know I learned a lot from this my thanks to John Garrett and Shan busy and of course to our sponsor the great game of business which helps businesses use an open book management system to build healthier companies you can learn more at Great game.com thanks Sean [Music] 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 n at21 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 podcast follow us on Twitter subscribe to the morning report at 21h hats.com this episode was produced by Jess dubron founder of blank word Productions okay now you can leave thanks for listening everyone [Music]