Oguz Konar here, I’m the president and CEO of Local Marketing Stars. I want to take a couple of moments and talk about one of the biggest mistakes merchant cash advance companies make when it comes to figuring out how to do their marketing and lead generation. And no, I’m not here to sell you our services but talk about building an Asset or A Liability. And I’ll mention how that is so.
We chose to just only focus on merchant cash advance about two years ago
So, our company has been around for a while and we work with 47 different verticals before we started, we decided to work with merchant cash advance industry. So we serve verticals such as anywhere from restaurants to construction companies to dry cleaning companies, software companies, video programming companies, so many different industries and cash advance was one of them. And we chose to just only focus on merchant cash advance about two years ago. And there are reasons as to why that’s the case. As the owner of a marketing company, one of the things that I look at is, is there a demand for the service? Many people wake up with a dream that they’re going to have their own startup without really thinking about whether the market has a demand for the products or services. In merchant cash advance, that’s really not the case.
There’s a major demand, actually, we have hired a researcher and have had them do research on the future of merchant cash advance industry and now we’re seeing that the search volume on the search engines for people looking for a business loan has been going up consistently. Three years ago, that number was around 90,000 to a 100,000. People right now is over half a million and I think that number is going to get close to 700 800,000 people per month towards the end of 2018.
You have a couple of options
So when you are dealing with a product that has this much demand, then you have a couple of options. So either you tap into that demand and we’re seeing that everyday more and more merchant cash advance companies are starting. But unfortunately when they do start their company, they’re kind of modeling the wrong people. I on average talk to 15 to 20 merchant cash advance business owners every week and that allows me to see a pattern on their behavior and almost make a prediction, who is going to succeed better than the other one, who’s going to fail? Because unfortunately this industry has one of the biggest failure rates.
People start and within six months you don’t see them around or the ones who survive their first year do so, but they’re really not profitable. They soon find out that they just got themselves another full time job. That’s happening cause they’re modeling most of their competitors out there.
Doing the same thing over and over again
Most of the guys who are starting out, they might be in their business for a couple of years, but they’re doing the same thing over and over again. So if I were to summarize what they do, you can tell me. If you find things that aren’t aligned with what you’re doing right now. They do things such as, all right, so I’m starting my company, what is the most effective way for me to get leads, well, let me go and buy a list of UCC leads, let me hire an offshore center to do telemarketing, so let me, if I have a couple of 1000 dollars, let me start a direct mail campaign or let me start buying live transfers. So I just made a list of four or five things that most of the people do that.
You need, you need both inbound and outbound lead generation.
Now, I’m not saying that all of them are bad. What we do is good. You need, you need both inbound and outbound lead generation. I’m not saying that you should not be doing that, but where things get complicated and sour for a lot of these business owners is when they just keep doing that without really working on creating other streams of income and revenue and deals and leads for you.
If you’re stuck in that route of purchasing leads, either in the form of a UCC leads or telemarketing data or live transfers, you’re tapping into a world that 1000 other people are trying to get deals out of. Then you have this competition because you’re calling on the same person over and over again.
So my disagreement with that approach is that you have half a million or more people searching online for a business loan. Of course, that doesn’t mean they’re all qualified. They’re searching online, but there are new faces.
Build your value and differentiate yourself
They’re usually not a part of a telemarketing list. So every day people are searching. Instead of tapping into that, you’re going after a UCC list or a telemarketing list that’s been sold to maybe 20 other companies out there. Then when you’re, Oh, you can still close deals, but when you’re attempting to close a deal, you’re not closing on authority, you’re closing on the rates that you’re providing.
It’s really difficult to build your value and differentiate yourself from other people, and then your profits go slim, and then you kind of get used to that pattern. I think that, Oh yeah, merchant cash advance is super competitive. I hear that all day long. From business owners, are telling me, MCA is super competitive. Yes, MCA is competitive, so is so many other industries. So I’m not disagreeing that it’s not competitive, but the point is, it’s not competitive on the inbound lead generation part of that.
There is a massive flow of, flood of leads, but only 10-15 companies are claiming that, only the major guys. And then when I say that, the usual objection is well yeah, but they’re spending a quarter million dollars a month, of course they’re going to get organic leads. So how is that going to work out? I can take that small amount of money and buy a list of 10,000 people and pull a couple of deals out of that. And if you’re just beginning fresh, I suggest that you do whatever it takes to get a couple of deals under your belt and you start generating some income because sales are above all else, you definitely do need sales.
Buying leads
But once you establish yourself a little, if you’ve been around for a while now and you have a couple of people or you have the vision to grow this really fast, that you want to differentiate yourself from other people, then you have to invest in your business and the way to invest it is by creating your inbound lead generation system. What I mean by that is that you want people to be able to find your brand, your phone number, your story, if you’re sharing as an individual on your website, specifically about you and make a decision on your brand, whether they want to work with you specifically or not.
Whereas, you buying leads from other sources or buying leads from somebody else’s website or landing page, it doesn’t allow you to build that. You need to build your foundation and people need to make a decision whether I want to work with this company or not. Whereas, Hey, I got 10 phone calls, they’re all same so let me beat them up on price, to see who’s going to give me a better lead, but a better percentage, better rate. So that decision, is up to you. But the reason that’s important is that I don’t suggest you only think about today.
The attitude of eating what they kill today
So many merchant cash advance companies say the attitude of eating what they kill today. Then you got to plan for, that’s more primitive, right? You got a plan for tomorrow. If you want to be real serious business owner. By tomorrow, what I mean is, are you really seeing yourself running your company until you retire or until you die? Like what’s the plan? What is your exit strategy? So when I asked that question, many people telling me, Oh yeah, I’m not planning to do this forever. Obviously, I want to build this up, so either I can be acquired by someone or I can sell my portfolio, do something with it, right?
Build this as a business and turn it into a sellable asset
And whether that’s the first time they’re maybe thinking about it or they, it was already a part of the plan before I brought it up, I really have no idea. But if your goal is to build this as a business and turn it into a sellable asset, you’ve got to have assets sent.
Your asset cannot be your source where you buy the leads from. Your asset is if your website is getting 3000 people and you’re converting them at a certain percentage, or if you have a paid inbound system that brings you leads almost on demand, you’re putting X, you’re getting X plus, that’s on demand. If you can control how much you’re spending to purchase a customer, that’s the system.
Because once you know that you’re spending, let’s say $50 and you know that if you spend $50 four times, that’s going to give you a customer, that will put $3,000 in your pocket. Then you know that how many times you’re X-ing your investment. So once you have a predictable system like that, then your business has a more sellable asset than a liability. Because it will be a liability if you didn’t have any systems, that you’re solely relying on an offshore center or a bunch of telemarketers that you’re hired in house, you’re just having them generate leads for you. Then my question is, you don’t have a lead generation that’s running 24/seven.
Lead generation
Have you ever considered the fact that your lead generation stops the moment your employees leave the office or your offshore center closes down at the end of the day. That would make me feel really uncomfortable if I knew that I’m only relying on the couple people that hired and the moment they either do not show up or do not work, my leads generation is down to zero. So I’m not saying having those assets, offshore centers and telemarketing, UCC leads are bad, but if you’re talking about building a true asset, is having an automated system that brings you leads. I’m not talking about just search engine optimization.
I’m talking about combining search engine with your paid efforts and coming up with a hybrid solution where not only you’re building your presence moral line, also people are coming to you because trusting you as an authority and they want to work for you, work with you. So when that happens, when you’re in negotiations on either selling the company or bringing on more partners or bringing on revenue, that will play a big role.
Deciding on your marketing
That’s why when you’re deciding on your marketing, I suggest you do not think just about today and to what you’re going to be selling today. I also suggest that you think about what you’re building is a company, your company culture, your systems, and your automation in place, your CRM system, your followup system, your nurture campaigns or other email campaigns, your sales scripts, your closing percentages and revenue per deal. All of that will play a role into building a real company. Otherwise, you can call yourself just a sales organization because that’s all you might be doing.
You’re just getting leads and turning them and selling them. And looking for more data and more data. But I know companies that has data, the millions of people’s information they keep calling on that and their goal is to grow their floor more and more, have 30, 40, 50 more people.
To me that’s a scary scenario. Of course, you want to have more people but not for telemarketing because obviously that gives you more headaches because you’re managing salespeople higher payroll. Although, you’re paying them maybe only on commission. So what if you can, instead of adding 10 more people, you can add a system that does as much if not more than those people, you own it. So, you don’t owe it to your people hoping that they will stay as a longterm employee and they will stay with you and still perform at the level or better.
Am I really building this as a sellable asset or a liability?
So, I wanted to make a distinction between an asset or a liability in this video. That’s why I wanted to record this because I’m seeing this over and over again. And I think that’s important for business owners to notice when they’re starting this, the first couple of months it might be okay to do anything you can do to get leads, but at some point you got to make a decision and say, hey, what am I really doing with my business? Am I really building this as a sellable asset? Whether you sell it or not, it’s up to you.
But I think it’s important that when you decide to walk away and take a two month vacation, a month vacation, a week vacation, you don’t have to worry about your business. You don’t have to feel like you have 15 people to manage, because I hear that a lot. People almost feel proud that they’re hustling so hard. They haven’t taken a vacation in three, four years. To me, that’s not healthy, right? If your company is three years old and you’re still, you still have to show up every single day to motivate people so they can close better deals that’s the path, you’re creating a habit that’s difficult to break.
How we help our clients
And if you don’t change anything, you’ll find yourself in situations that you’ve been in business for 10 years, still grinding. Grinding is only fun when you’re doing it in the beginning when you’re building something. But if this is your daily routine, something is definitely wrong with that structure. So I’m known to be really blunt and I say it as it is. That’s how we grew our company quite a bit because that’s how we help our clients. We’re really upfront.
So, if what I say makes sense, leave a comment here or schedule an appointment, so we can talk more about your specific situation. But we’ve been helping our clients in merchant cash advance industry for a while now and we’re building systems for them so they can get predictable leads on demand. And now we’re not in the business of selling leads, we don’t sell leads, we don’t sell live transfers and all the things.
We’re in the business of building inbound lead generation system. So if you’re interested, you’ll see a link below. Click on that. You’ll have access to our calendars, so you can schedule a conversation, a strategy session for us to talk more about this. No obligation. So if this is for you, to be valid, if this is a good fit for you or not. All right, talk to you later. Thanks for listening.
