How To Be A Successful Entrepreneur - Interview With Jerome Katz Professor of Entrepreneurship - Saint Louis University
In this podcast we have the pleasure of interviewing Jerome Katz, Professor Of Entrepreneurship at Saint Louis University. In the interview, Professor Katz comments on what he believes are the keys to being a successful entrepreneur, trends in small business today, information on what marketing methods have the best ROI for entrepreneurs and tips on hiring your first employees. In the podcast, Professor Katz outlines what he has found in his research and personal experience to be the most important factors to entrepreneurial success. He outlines that it is not having a great idea, but instead having customers in hand that have a problem that you can solve for them. Listen to the podcast below to hear specifically what he means in more detail. If you would like a copy of the transcript of this podcast email us at This email address is being protected from spambots. You need JavaScript enabled to view it..
Executive Summary
- The single biggest determining factor of whether a business will be successful or not is if they have a lock on their customers
- Professor Katz lists word of mouth, website/search engine marketing and dealing directly with your customers as the 3 best marketing methods for small businesses
- The number one factor affecting businesses today is the increased usage of technology and the digital trend where more and more business is being conducted digitally
- Understanding and winning in the digital world is important for small businesses
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Sales & Marketing ROI Podcast: Episode #21
How To Be A Successful Entrepreneur - Interview With Jerome Katz Coleman, Professor of Entrepreneurship - Saint Louis University. Click the link below to listen to the podcast.
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Top 3 Things You Need To Be A Successful Entrepreneur
1. A Lock On Customers
Having a great idea before starting a business will give you a 10% chance of success, having customers with a problem you can solve before starting a business will give you a 90% chance of success.
2. Watch & Understand Your Numbers
Know what you need to charge to make a profit, and how much profit each customer means to you. Know the profit difference between all of your different products. If you don't understand these numbers it will be hard to make decisions and run your business successfully.
3. Have A Simple & Solid Business Plan
Have a small simple business plan that outlines what you sell, who you are selling to and what the value proposition is for what you are selling. This ensures you have a clear plan and that you can quickly and effectively communicate your business idea to prospective customers or potential financiers.
Top 3 Marketing Methods for Return On Investment From Jerome Katz's Experience & Research
1. Word Of Mouth
This method of face to face communication is always number one for small businesses. Nothing can beat real human interaction when it comes to building relationships. It is also very low cost, and therefore, makes it the method with the best return on investment.
2. Website Marketing & Search Engine Optimization
The rise of local digital media options (such as a website, search engine optimization, Google Adwords, online reviews, local online ads, etc.) has presented a great opportunity for small businesses. This is a relatively inexpensive marketing method that has been shown to deliver a great returns for small businesses.
3. Dealing Directly With Your Customers & Up-Selling Or Cross-Selling
Face to face time with the owner is irreplaceable. People really appreciate being able to talk directly to the owner of the business. If you talk directly with your customers just to see if there is anything you can do for them to make their service better, it goes a long way tp making them feel special and appreciated. In the podcast, there are many additional ideas for how to utilize this tactic to drive additional revenues for your business.
Jerry's Top Two Small Business Trends
1. Shift to Digital
More and more of business is happening online. With this change in how we use technology as well as the rise of hyper-local digital marketing avenues available to businesses that generate better results and returns than traditional media, Professor Katz sees the shift to digital as the number one factor affecting small businesses today.
2. Turn Over Of Small Business Ownership
With the aging population, there is a bubble of small business owners that want to sell or exit their business. The problem is that they think their businesses are worth much more than they are. Professor Katz recommends that this poses a great opportunity for the younger generation to offer to work at a business in exchange for slowly building ownership until they can fully take it over. This approach will allow business owners to get the amount of capital they want out of their business without the business being neglected or decreasing in value.
About Jerome A. Katz - Professor Of Entrepreneurship
As far back as 1995, Inc. Magazine recognized Professor Katz as one of the world's top entrepreneurship researchers. Today, Professor Katz is an internationally recognized expert on entrepreneurship and entrepreneurial education. In the late 1980’s, Jerome was Associate Director of the Missouri State Small Business Development Centers, and today is director of SLU’s Billiken Angel Network, as well as head of Saint Louis University’s nationally ranked entrepreneurship program.
Jerome is the lead author of Entrepreneurial Small Business (McGraw-Hill), one of the top three texts globally in entrepreneurship and small business, which melds his experience growing up in his family’s firms and his own business with the latest in his research-based entrepreneurial pedagogy. The text has US, international, Chinese, and Korean editions. He has been quoted in more than 150 articles in major magazines in the business and entrepreneurial fields, as well as in major American newspapers.
Jerome holds a doctorate in Organizational Psychology from the University of Michigan, and other degrees from Harvard, the University of Memphis and Rhodes College.
His awards include Babson College’s Appel Prize for Entrepreneurship Education and the Family Firm Institute's LeVan Award for Interdisciplinary Contributions to Business.
What is Marketing Return On Investment (ROI)
Return on investment is a measure of how profitable something is. It is a performance measure used to evaluate the efficiency of an investment or to compare the efficiency of a number of different investments. To calculate return on investment (ROI), the benefit or return (ie. profit) of an investment is divided by the cost of the investment; the result is expressed as a percentage or a ratio.
Marketing ROI = (Additional Profit From Marketing - Cost of Marketing)/Cost Of Marketing
What Is SEO (Search Engine Optimization)
SEO stands for Search Engine Optimization. SEO is the process of maximizing the number of visitors to a particular website by ensuring that the site appears high on the list of results returned by a search engine. To learn more about what SEO is, click here or to watch a video that explains it, click here.
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Podcast Transcript
Chris: Hello and welcome to episode number 21 of the Profit Work Sales and Marketing ROI Podcast. Today’s podcast is titled “How to be a successful entrepreneur.” And we have the pleasure in today’s Podcast, interviewing Professor Jerome Katz from Saint Luis University. At Saint Luis University, he is the professor of entrepreneurship. Professor Katz is also one of the world’s top entrepreneurship researchers. He is the lead author of Entrepreneurial Small Business by McGraw-Hill, one of the top three texts globally on entrepreneurship and small business. He's been quoted in more than a 150 articles in major magazines in regards to business and entrepreneurship as well as many major American newspapers. Professor Katz was and still is an entrepreneur himself growing up around family businesses, he started a consulting business while in college. He sold this business to his competitors went in graduate school before becoming a full-time entrepreneurship professor. He also recently founded and currently directs an angel funding Investment Company in the city of Saint Luis. I mean this to say, we're ecstatic to have him on the Podcast.
Jerome Katz: Chris?
Chris: Hey, Jerome?
Jerome Katz: Yeah. Sure, it's fine.
Chris: Yeah. Perfect, thanks Jerry. How's your day going?
Jerome Katz: Oh, real good.
Chris: The first questions Jerry, I'm hoping you could answer for our listeners would be what you have found to be the number one determining the factor to whether or not a new business will be successful?
Jerome Katz: Key factor into success is having a lot on customers. When we talk about the lean startup, business model canvas, you know, the discipline that that imposes on an entrepreneur to connect with customers is the greatest single factor in creating success. I tell my own students that having a great idea in advance of having customers basically gives you, like, a 10% chance of success having customers with problems in your hand gives you 90% chance to success.
Chris: Yeah.
Jerome Katz: So that's the single biggest factor.
Chris: Question number two, what research are you currently conducting?
Jerome Katz: Actually a lot of the work I've been doing lately has been focused on Cross Campus Entrepreneurship education because, to be honest, most entrepreneurs in the US and Canada are not from business schools, they occupations that had the number highest number of self-employed on either country are focused in areas like--well, actually, authors, musicians, graphic designers, we're talking about 40 to 50% of those people, at any moment, are self-employed.
Chris: Oh, wow.
Jerome Katz: You know, when you talk about MDs and health professions, you're talking a quarter to a third of people, you talk about engineers, you're talking about 20%, you talk librarians these days, I was shocked to discover about 25% of librarians are self-employed.
Chris: Wow.
Jerome Katz: So the fact is that most of people who come out of business schools are qualified to get hired by businesses. So the percentage of, you know, self-employed people coming out of business schools is kind of on the low side. So, what's kind of cool about this is that EU figured this out and they have--they actually stated a policy of life form entrepreneurship education and their focused of it is outside the business school.
Chris: Oh, okay. Yeah.
Jerome Katz: And so North America trails the EU on this but what we're trying to do is get entrepreneurship out of the business school and getting them to the schools where it really makes a difference. So, here on my campus, I got 25 professors outside the business school.
Chris: Yeah.
Jerome Katz And they are--they're in four different engineering departments, they--and in the nutrition and dietetics department, they created a degree for both grad and undergrad degrees to culinary entrepreneurship. And the English--the English department and philosophy department have a course teaching students about the basics of entrepreneurship because a lot of those people will have to go and start their own business. The fine arts department is teaching entrepreneurial thinking of how do you price and protect your work to the seniors of graphic design and the students of [inaudible 0:05:02] So, you know, all across the campus, I got people who recognized that a significant number of their students are going to be self-employed, if not right, some time in their career and they were preparing students for that.
Chris: Next question. It seems that often entrepreneurs have an incredible passion when initially start their business but it's--it can be difficult sometimes to maintain that. What advice would you have for entrepreneurs who are struggling to maintain that initial passion that they have for the companies when they started them?
Jerome Katz: These challenge in losing that passion is finding the space to regain it and this is sort of parallel situation, we find ourselves in relationships, you know, how--your current situation has absorbed so much of your energy, and your time, and thought that would be able to get away from it and look for something new and different is very tough. So one of the things I talk with folks about when they're hitting a dry cell is literally to give themselves and have to do it all for a weekend off and I really mean this, I mean, turn off your smartphone, you know, don't check your emails, don't check your messages, go off and do something fun, preferably do something fun in a place you've been before.
Chris: Yeah.
Jerome Katz: Because your best chance to see things in a new life to get a sense of--to get a sense of revitalization, a sense of novelty will come from doing something interesting. You know, if you're an outdoor person, go someplace you haven’t been before, you know, and climb a mountain, or go for a hike, or swim, or something. You know, if you're a singing person then go to, you know, all the cool things is you can check on Thursday and a lot of airlines will tell you, “Yeah, we've got cheap flights from here to someplace tomorrow coming back Sunday. You want it? And, you know, my family is wanting to do those 30 million dollar one way flight somewhere, you know, and then they open up trip advisers and say, “Okay, that's good, let me go explore.”
Chris: Yeah.
Jerome Katz: So, you know, that's kind of the ways--kind of the ways to do that. If you can't bring yourself to give yourself a weekend at all, then think about going someplace you--in your town and do networking there. You know, and if it's a professional association, if it's a trade show, whatever, but though among new people, who are new to you, preferably in a new place, and kind of stretch your wings.
Chris: Okay. Now what would you say Jerry is the primary mistake that entrepreneurs make?
Jerome Katz: They don’t get the numbers. There is actually was an article on Wall Street journal that the--over the past several days. From a person who’s been a mentor at the University of California, in San Diego, and he was shocked how much trouble the students and entrepreneurship there had understanding profit and loss. And the fact is that most entrepreneurs are afraid of the numbers and that means they don't spend enough time on the numbers, and the number of entrepreneurs who have a fundamentally losing business and they're unaware of it is staggered. So not knowing you're numbers is the most important thing. And I'm not worried about knowing the numbers in the sense of an accountant, like, the hardest--the biggest challenge of accounting is getting all the language right. The accounting is not fancy math, it's all addition and subtraction, that's all. But understanding where the money's coming from and how much you're spending to get that money coming is crucial.
Chris: Yeah. Okay. I think that's very true. If you don't know your numbers, it's going to be very hard to run a successful business. Now the next question, what would you say, in terms of advice that you could give to small businesses in regards to hiring employees? So, business has started, they've started to grow, and now they need some assistance, they're looking to hire employees, what advice would you have for an entrepreneur in that situation?
Jerome Katz: When people come to me and talk about starting to hire employees, I tell them--I ask them, what was they're experience like when they started dating and most of the people I know end up telling me that their dating--they only got good at dating, if they ever got good in dating, they only good at dating by trying on a mirror and looking space. So you're about to form a partnership with someone even if you're paying them, it's still type of partnership and you're going to, like, go in and get engaged from the very get-go. You know and I said, “Are you getting better at figuring out people now than when you started dating because we know we're older.” Most people kind of stop and say, “I don't think so.”
Chris: Yeah.
Jerome Katz: So, given this experience , what I help them is if you're going to think about hiring people, start by, in the sec, doing practice dates and that means start hiring people for part time, you know, part time job before a project and see how good are you, an identifying a person who is good a fit to you and your organization, figure out how do you get the handle of organizing for someone else to be involved and how to give instructions and feedback before you make a commitment to hire someone and pay their salary every week or every two weeks.
Chris: Right.
Jerome Katz: So that, you know, I'm a believer in trial date and that's--these days, there are so many more options for hiring part-time help or hiring project help…
Chris: Yeah.
Jerome Katz: …posting it online, and even doing this online, by the way, is tremendously helpful.
Chris: Yeah.
Jerome Katz: If you're working with a company in India aren’t trying to get [inaudible 0:11:29] understanding--you’ll learn, by tremendous amount, on how to be clear in what you want, how to ask questions, and mostly you’ll get it right the first time, you know, that's--even though, you know Elance and Odesk those folks give you a lot of those folks give you a lot of advice on how to do it--do it the right way, you're still going to--still going to want to try on your own.
Chris: Yeah.
Jerome Katz: But that's useful.
Chris: Yeah. For sure. For sure, I definitely think that's some great advice for anyone in that situation. Okay, this is some great information, I definitely think that what our listeners would probably also like to know from you is what would you say are the most successful strategies that you see from the different business that you've worked with or the research that you've done?
Jerome Katz: Well, I'm trying to discuss that but that lesson, I believe, started up about hand your customers first and find a solution to their pain or gain…
Chris: Uh-hmm.
Jerome Katz: …is crucial to being successful and having a path to profitability and a path--a path to a target alliance. The other thing is going back to what we're saying, is watch your numbers, make sure that you understand what you're cost or--and you understand what--which--how much you need to charge to make a profit.
Chris: Right.
Jerome Katz: Those, you know, those are the, sort of, things that really make a difference.
Chris: Yeah.
Jerome Katz: I'm--I happen to be big on business plans but really what it is when you are looking for something from someone, figure out what it is they want to see from you first. There are folks who are--there are actually professors and entrepreneurship on both coasts who in the US who swear the business plan instead. Well, I'm here in the mid-west and I--if you were going to go to a banker for a loan for your business, you have to have a business plan.
Chris: Yeah.
Jerome Katz: There’s no way around that. If you are--if you have a business that's like biotech or a medical instrumentation business that you know it's going to be five years until your product is out, you have to have a business plan to present to people.
Chris: Yeah.
Jerome Katz: So, there are a lot of places and cases where you need a business plan but to be honest, there are more places--cases now where to pinch of that may be enough or a business model canvas may be enough, or a very short business plan might be enough, you know sir, that's okay but I think it really is a case of figuring out who are you--who are you asking for something from and what do they say they want? Most people in most institutions are pretty upfront about that.
Chris: Yeah. It's pretty simple. And I don't know if this is specific term you're referencing or just a wording you used, you said something like a past of profit or something like that. Is that a particular term or you're just talking about you have to have a plan and how you're going to make a profit?
Jerome Katz: Yeah.
Chris: Yeah? Okay. Now what would you say are the top three trends with small business marketing today?
Jerome Katz: One is making full use of the internet. And that's, I think one of the hardest things for people to do these days. It is, without a doubt the most cost affected but understanding how to leverage the blogospere is I think crucial because it's a great way to generate a free aide. Understanding things like search engine optimization and then how to--how to keyboard in list--organically time listings is crucial. And again, it's a skill that can be learned but it really takes some effort and I really think a part of this is getting used to the idea about the hyper local methods for advertising on the internet because I there are a lot more cost effect of than a doable mass media but it requires--it requires an entirely different kind of thinking and it may also often require going to a different kind of marketing organization. Marketing consultants to get folks that are up to speed on the local-hyper local marketing are giving opportunities.
Chris: Right. Okay. And so that was kind of trend number one, what would you say would be trend number two and three?
Jerome Katz: Well, the trend two is kind of entirely different, I mean, I'm 53 years old…
Chris: Okay.
Jerome Katz: …and an awful lot of my friends an entrepreneurs and an awful lot of my friends are my age. And in the US, if you're 63, the government is telling you you're eligible for Social Security at age 67. You know what that doing? It's causing an awful lot of people in their 50s and late 50s to start thinking about “What am I going to do with my business?”
Chris: Right.
Jerome Katz: North America is going at the biggest turnover of business in the--in a hundred years, it is happening now and for the next 10 years as these people are trying to figure out what to do with their businesses. This is a trend but it also focus tremendous opportunity. Most of these entrepreneurs, most of these owners would love to see their businesses continue. To be honest, most of them would love to sell their business but they also, for the most part, have a really outrageous idea of what their business is worth.
Chris: Right.
Jerome: And what I tell me students is this, “If you know a business that the owner looks like he should or she should be getting close to retirement or thinking about it, this is a business you wanted frequent, and this is the business where you want to start talking to the owner just to hear what they think about things and how they do stuff, and just, like that.” You know, the more--the further they get--the closer they get to having to tell their employees if a good job opportunity opens up, take it. The closer they get to having to tell their favorite customers that, “You know, you might want to think about getting a backup supply of your--my product or service because I won’t be here all the time.” You will have to let go of that relationship. The value of their business is going to start dropping. It will drop faster and faster, and more and more, and in a certain point, my students who have no money might be able to talk, you know, I really like this because I like you. I'd like to take it over, I'd like to continue this, I like to keep your employees with paychecks, I'd like to take care of your customers. How about I come in and work, and you teach me the business and then I'll take over, and I will send you a check for $25,000 every year, and if I reach a half a million in sales, it will go up to 50,000 and I will take, you know, I'll keep paying you, or your wife, or your state until it's paid off.
Chris: Yeah.
Jerome Katz: You know, I think a lot of these entrepreneurs would rather have some money come in and know that their customers would take care of them, they're employees would taking care of and their community was taking care of, than just close it up and walk away.
Chris: Yeah.
Jerome Katz: Yeah. That's a trend, that's a basic trend and from my standpoint, keeping those businesses going, I mean, think of all the good will, think of all the assets that you're tied up there, and we can keep it profitable, we can keep it useable, we can, you know, help communities, continue to grow rather than place all these businesses closing around. So, you know, that's a tremendous opportunity.
Chris: Yeah. For sure.
Jerome Katz: You know, I think--actually, those are two that come to mind but--at the most so…
Chris: And I think you've covered--yeah. You've cover more than enough information in those two. So, I think those are very insightful in terms of major trends that are happening. So from your research and experience, what would you say seems to be the most successful marketing methods for entrepreneurs and small businesses today?
Jerome Katz: For everyone, the keyword is always word of mouth. Anything that you can do to build that network and to grow that network, you know, in face to face it's--in a real space, is tremendously important and the part of that is that it's mostly to get you to customers who are nearby, able to, you know, able to stand and coming to you for the right reasons. So, word of mouth is always number one, I have a tremendous leader in the--in the power of the internet and the power of the internet to help get your word out to a lot more people at a really, really, really good price but there, I think it's tougher in a way because you're kind of generating the message and you can only hope to get your customers to do that word of mouth, that word for you recommending your product, or service, or company to other people and that--when they do that, that's just--that's just totally awesome but being able to do that online I think is a tougher business for entrepreneurs than doing it face to face.
Chris: Yeah.
Jerome Katz: So those are, you know, I think those are the most powerful techniques that we have and the cool thing is they really are the least expensive.
Chris: Yeah.
Jerome Katz: And the third--there's a third one that's kind of worth thinking about which is there are an awful lot of people that take pleasure in dealing with the owner. You know, the person who can make the deal, who can do the discount, the person who, you know, if you're not satisfied of something can make the effort to make it right.
Chris: Uh-hmm.
Jerome Katz: And I think a lot of entrepreneurs take for granted the power that they have, that your customers like to be able to deal with you and being able to say, “I talked to the owner and the owner did this.” You know, think about, we've all been restaurants, practically old restaurants, you know, and the owner comes out here, the shop owner comes out to talk with you, you know, even if--everything's fine, you’ll just say, “It was a great meal. It's just--we just really like to come here.” You feel good at that moment with the owner.
Chris: Yeah. For sure.
Jerome Katz: That's, you know, that's what I tell my--that's what I tell the entrepreneurs, you know, “It doesn’t matter, you know, if you're--if you're the owner of the--of a mechanic shop, you know, you get off from under the car, you come over to a good customer and say, “Hey, you know, how’s everything going? We got your car fixed. If you have any problem, you just let--give me call first and I'll make sure we take care of it.” You know, that kind of--that kind of face to face time with the owners, it's really irreplaceable.
Chris: For sure. Now for marketing, for small businesses, what would you say small business owners should expect to see in terms of a turn on investment on any marketing spending that they do decide to do?
Jerome Katz: For everyone, the keyword is always word of mouth. Anything that you can do to build that network and to grow that network, you know, in face to face it's--in a real space is tremendously important and the part of that is that it's mostly to get you to customers who are nearby, able to, you know, able to stand and coming to you for the right reasons. So, word of mouth is always number one, I have a tremendous leader in the--in the power of the internet and the power of the internet to help get your word out to a lot more people at a really, really, really good price but there, I think it's tougher in a way because you're kind of generating the message and you can only hope to get your customers to do that word of mouth, that word for you recommending your product, or service, or company to other people and that--when they do that, that's just--that's just totally awesome but being able to do that online I think is a tougher business for entrepreneurs than doing it face to face.
Chris: Yeah.
Jerome Katz: So those are, you know, I think those are the most powerful techniques that we have and the cool thing is they really are the least expensive.
Chris: Yeah.
Jerome Katz: And the third--there's a third one that's kind of worth thinking about which is there are an awful lot of people that take pleasure in dealing with the owner. You know, the person who can make the deal, who can do the discount, the person who, you know, if you're not satisfied of something can make the effort to make it right.
Chris: Uh-hmm.
Jerome Katz: And I think a lot of entrepreneurs take for granted the power that they have, that your customers like to be able to deal with you and being able to say, “I talked to the owner and the owner did this.” You know, think about, we've all been restaurants, practically old restaurants, you know, and the owner comes out here, the shop owner comes out to talk with you, you know, even if--everything's fine, you’ll just say, “It was a great meal. It's just--we just really like to come here.” You feel good at that moment with the owner.
Chris: Yeah. For sure.
Jerome Katz: That's, you know, that's what I tell my--that's what I tell the entrepreneurs, you know, “It doesn’t matter, you know, if you're--if you're the owner of the--of a mechanic shop, you know, you get off from under the car, you come over to a good customer and say, “Hey, you know, how’s everything going? We got your car fixed. If you have any problem, you just let--give me call first and I'll make sure we take care of it.” You know, that kind of--that kind of face to face time with the owners, it's really irreplaceable.
Chris: For sure.
Jerome Katz: With the internet, it's much easier to spend money and not get it returned.
Chris: Yeah.
Jerome Katz: But to be honest, what the internet does, much better and word of mouth is it does give you a way to check the matrix to who clicks, how do they fill out the form, you’re basically, your card abandonment, things like that, how much time are they spending. So you get more opportunity to understand how customers start seeing you and relating to your business online than you do in any other study, and I think that really helps spend your money in smart ways, I mean, and the other thing is that most entrepreneurs don't make enough use of AB type testing and doing what pilot, you know, a pilot website with a new idea to see how people would respond and how to--and how to please that, and I think you're ability to do that online really gives you a chance, when you do find like make an investment in a banner advertising and product placement, things like that to really have a much stronger return so that you can't get your money back from your advertising dollars.
Chris: Yeah. And in terms of the word of mouth and getting referrals from Customers, do you have any specific recommendations on things that they should be doing or is it just simply as easy as, you know, going to networking events and…
Jerome Katz: You know, the more passionate your customers are about your business product or service, the more likely they are to engage word of mouth marketing on your behalf. If you feel that it's hard for people to get real passion about what you're doing, that's when loyalty programs come in, here's the--you know, your customers know that if they can refer someone to you, they will get, you know, 50% off their next visit to your place or, you know, you’ll--actually, one of my students basically said, anytime there was a word of mouth referral, she literally did a hand-written note to the--to the customer and thank them instead. You know, “Please, next time you're--you come by, remind me about this note.” And when she did, she had boxes of a local chocolate that she always kept behind the register.
Chris: Yeah.
Jerome Katz: And someone said, “Oh, you know, remember I sell this? You remember I sent out and you sent such a sweet note and she runs over grabs like, you know, eight piece of good candy, boxes of candy and handed to them. It cost her, I think maybe four bucks that kind of bought on that. Three bucks something like that. You know, she gives that to someone but they're just--they're just tickle pink.
Chris: Yeah, for sure.
Jerome Katz: You know, so--you know, so is it really, I mean, in terms of the customer acquisition cost, $4 for a customer who may come in and spend 50, you know, that's just wonderful.
Chris: Tats pretty good, yeah. For sure.
Jerome Katz: Yeah.
Chris: And then in terms of, let's say, somebody is building a website or they're looking to have their website, have some search engine atomization done on it, what type of a return should a business be able to expect from building a website and the cost for doing that versus the additional sales that it would bring in?
Jerome Katz: You know, I kind of go out at a different way because I think the difficulty of figuring the likelihood of sales is complicated by how much competition you've got and, really, how much have you done before? So, one of the things I tell people is the beauty of things these days is you can go in, set up a website on your own, you know, you send me a link, you can go--you can get a ecommerce website from any of the big providers one on one, GoDaddy whatever, you know, you can set up an information website, whatever you want to do, and you put in, you know, make it, put it out there, and give it a week, and then see how you're doing in Elapsa, Elipsa, or Google Search, or something like that, okay? And then look, see where you end up, what page, you know, you're on the 22nd page on Google…
Chris: Yeah.
Jerome Katz: …and then you basically say, you know, what you do is you've been started talking to advertising firms and marketing firms and say, “Okay, what can you do for me?” And most of these firms these days will tell you, “We can get you on the first page, we can send you on the second page.” But then, that depends on your industry. How competitive it is. How would you understand…
Chris: Yeah.
Jerome Katz: …we can go for sideburn things like that but, you know, having to look at that, and try it yourself, and understand how complex it is, and then figuring out what will I give to get on the first page or the second page. You know, at that point, if it gets--if it becomes a lot more sensible…
Chris: Right.
Jerome Katz: …for the entrepreneurs to spend. And when they also understand at that point is they are spending--they're paying for extra piece, until you understand how far your own expertise can get you, you can't appreciate what these folks who are specializing in web marketing can do for you.
Chris: Yeah. For sure.
Jerome Katz: Yeah. So, you know, at that point, and most the folks I know will tell you, you know, given--you know, what kind of budget can you give us? You know, can we do pay--can we do pay placement? Are we strict, you know, for the banner? Are we going to test you on Facebook campaign? You know, and they’ll come back and tell you pretty quickly, “Okay, here's what we can do, here's what we could promise, and here's what it's going to cost.” You know, at that point, having trying to consults it begins--they could begin to understand the value of what these folks could do.
Chris: Yeah. For sure. And then final question, I think I already know the answer to this question based on some the stuff we've discussed but what would be the number one piece of advice you'd give to small business owners?
Jerome Katz: Find customers who can love you.
Chris: Yeah. For sure. Yeah, if you--if you got that solid, it's not really much you can do to get it on.
Jerome Katz: Well my father was an entrepreneur and his point to me was there was--as long as you got customers, there's always money.
Chris: Yeah.
Jerome Katz: And he also made a appoint to make sure I understood when the money start again, I got to--I have something to profit at the end of the deal. He's a good dad, you know, he was a good entrepreneurs.
Chris: Yeah.
Jerome Katz: So that's the--but the fact is if you don't have customers, you don't have money.
Chris: Yeah.
Jerome Katz: So the customers will make the whole thing happen.
Chris: Yeah, for sure. Okay. Well thank you very much for taking your time out of your schedule Jerome to do this Podcast and I'm sure that the listeners have found this very informative, I have found it very informative and giving me some things to think about as well and, yeah, I just--I want to thank you for your time.
Jerome Katze: I'm glad to do it Chris. Take care.
Chris: All right. Have a good night.
Jerome Katz: Bye-bye. You too.
Chris: To our listeners, thanks again for tuning in. This has been a Sales and Marketing ROI Podcast brought to you by Profitworks Small Business Services Inc. Profitworks provides search engine optimization and conversion optimization services for websites for small businesses. If you're looking to get more sales from your website, give us a call at 226-241-7827. Get a free review from one of our website experts on how you can increase the sales from your website. Go to www.profitworks.ca. Just fill out the form there and within 24 hours, you’ll have a customized report from one of our website experts on what you can do today to increase the sales from your website. Be sure to also check out our blog for other blog posts and Podcasts at www.profitworks.ca\blog. Have a great day and thanks again for listening.
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