Why Most E-Commerce Brands Are Measuring the Wrong Metrics (And Paying for It)

They're tracking our ways like it's a health metric. It's not. It's a signal. And if you're building a business off a signal, you're flying blind. My guest today spent 12 years in the trenches of digital marketing, built an agency that works predominantly in health and wellness,

earned a PhD in functional medicine, and then wrote a five book series to make sure e-commerce founders

never get burned by the wrong agency again.

He's got a framework he calls the Holy Trinity of metrics. And by the time this episode is done, you're going to look at your ad spend completely differently. Mark Young is the kind of operator who hands you the playbook before you even ask for it.

This is the vault. Let's unlock it. Well Mark, we're live here. Welcome to the show. I appreciate that. I appreciate the invite, right?

“Yeah, I think anyone that's listening right now,”

we are going to be deep diving into, I would say, all things e-commerce. So if you have an e-commerce brand, if your e-commerce business, this is going to be the episode for you.

I know Mark, we were just talking for the show, and you said that you came out with this new book called E-commerce Guide to the Galaxy, is that correct?

Yeah, it's actually five books, cave-on,

because I actually started writing it as one book, and literally I was like, okay, this is like a 600 page book. No one's going to read that. So I ended up breaking it up and doing this stuff. So it's actually a five book series.

And it really is about e-commerce, but here's my angle. I'm an agency owner. Like I'm just going to sell out and tell you, like I own an agency that deals with e-commerce

brands by and large. But one of the things that, if I can say pisses me off, is that every single time I'm talking to a potential new client, I end up having to judge through the baggage of what they've been through already.

And it's like, I end up having to take them through triage, and then through the ER before I can even get them into the hospital. And a lot of that is their misunderstanding of the metrics that move their business. And the agency did something,

and they thought it was wrong. And sometimes I'm like, no, actually, what they did was right. I'm sorry, you don't like it, but the agency wasn't wrong.

And sometimes if the agency just started using smoking mirrors to make it look like they were performing, and they weren't. There's the reality. Business owners, this is my thesis.

I'll wrap it up here. By thesis is the business owners get into businesses because they're really, really good at people. And as my friend Ben Hardy says, this is a who-not-how situation, right?

Like, so when it comes to marketing, find your who. Yeah.

The problem is, is that business owners,

they don't know how to do the marketing. And if they did, they wouldn't be running their business. They'd be running marketing companies. And my entire goal in all of this was, I want to write a book that literally becomes,

this is your travel guide. Never be taken advantage of by an agency again. And at the same time, this is my, if you're going to work with me,

“you need to understand all of these terms”

and all of these strategies, because now nothing I tell you is going to be a surprise. Like, I'm literally handing you the playbook. You want to run it by yourself, great. It costs you $12.95.

You want me to run the playbook for you? Cool. You know in advance what you're getting. Yeah, I love it. I could tell you the passion and the, the same thing that I deal with is just,

there's good agencies, there's bad agencies. And there's, there's good business operators, there's bad business operators. And when you may have them all mixed in, good things come out bad things come out,

ugly things come out. It's a nightmare. So I can understand the pain. I'm going to call it the pain. You probably have gone through from like just discovering

what was not working or what was working, but it wasn't working because of XYZ. And we're going to get in all of that. So let me, before we go into the power of the books and the power of what you do,

“I think it's going to be a service to tell us a little bit of”

how you got here, like what's the background, what's behind the vault that got you to where you are today, to have the power to be able to bring you to the power of what you do. So I'm a bit of an unusual animal,

as I think most entrepreneurs are. And I always say I love, love working with entrepreneurs. They're all crazy. They're absolutely all crazy.

And as much as I prefer sanity in my life, I also love a little crazy. I even lived downtown because as much as I

and I drive to the office,

I still choose to live downtown, for a waterdale because it's crazy. It's busy. It's traffic. It's all that.

So I do love it. And entrepreneurs are my passion.

“And I'll say entrepreneurship is my passion.”

They're all nuts. You know this. You work with this audience too, right? Yeah. And they all get defensive,

and then they all kind of chuckle and go, yeah, I guess we are. It's just kind of the way that goes. So I've been in an entrepreneurial family, and I laughingly say that entrepreneurship

is kind of like a nationality. Like you're just born into it. You can do nothing about it. And once you get the bug, you're just part of the part of the machine.

My father actually ran an advertising and marketing agency. He's owned his for 30 years.

I swore I would never be part of the family business

that is not what I wanted. I went to college a lot. And ended up becoming a college professor, worked in education, ran private colleges for ages.

“And what's really funny is I worked in private”

and public education. I love private education more than anything. And part of the reason was because it was entrepreneurial. It was very granular in the way we ran the business. It was, it was, it was education.

So I got the philanthropic high from actually helping students and seeing how it puts and people that had nothing go to people who had established careers. Like that was exciting to me. But I love the grid of the entrepreneurship.

How do we hit enrollment goals? The next start, like all this kind of stuff.

Well, I ended up getting out of that.

And what's funny is that I did end up going and working with my dad for a little bit after I got out of education. Because I was like, I don't know what I want to do when I grow up. And that's a weird question to ask yourself

when you're 39 years old. Yeah. Yeah. And my dad's like, well, look, I need some help right now. We're working with some giant clients right now.

And one of them happened to be in health and wellness space. And I'm like, well, I'm not doing anything like I'm just sitting on the beach and Florida. So sure, I'll come back to Michigan for a little while. Didn't take me very long to decide several things.

One, I didn't want to work for my father. Two, I didn't want to live in Michigan. And three, I not only fell in love with the marketing side of the business, which I had grown up around. But I also fell in love with the health and wellness side

of the business. And I have subsequently come to the point that I even went back to school and earned a PhD in functional medicine. And what I find is entrepreneurs and longevity are probably the most overlapping venn diagram I've laid eyes

on the really long time. Yeah. It's huge. Because, partially, we're all crazy. We love experimentation.

We understand the value of time. So sickness is not about health. Sickness is about time lost. And I'll overlap that to say that we all love looking at dashboards and figuring out how to make them better.

And that's all longevity is about whether I'm logging into an ororering stats in the morning or I'm looking at my labs. It's no different than me looking at a digital marketing dashboard and going, okay, if I make this one change, I can do this. I get my HRV to move like the same thing.

“It's gamified and I think entrepreneurs love gamified things.”

I get it. I love it. So, and now you, as a result of working with your father and then moving over, you really got into a sound like is the online game, the commerce game, and working with big brands.

And specifically in health and wellness, or have you kind of expanded? I would say that's probably 75% of our clientele falls in the house and wellness, CPG, direct to consumer marketing. Not everything we do is e-commerce, but everything we do is online.

So we do online support, as a matter of fact just before this, I was working on an analysis for an international brand, rebuilding their U.S. market, but it's not direct to consumer at all. So it's not necessarily direct to consumer, but it is very much e-commerce. And so much as it's online marketing.

So yeah, we redouble in other things. Like we certainly have expertise in other things, and where I thought you were going with that, was that for me, I focused in the digital world. My father's agency actually is the exact opposite.

Like it is such a compliment to what we do. They're television, they're radio, they're brick and mortar. Like they're the people who have all the buying relationships with Walmart and Target and so on. So it kind of is somewhat organically turned into this step one step two,

where what we're finding is sometimes he'll get leads that come into his agency. And he's like, you're not ready to go national TV. Like we need to get all your other stuff under control.

And then we nurture them and then pass them back.

Sometimes we're working with clients that expand to the point that they're ready to go national. They're ready to go into retail. They're ready now. They've hit that maturity in their business life cycle.

So it's a great partnership. And what's been fun about it, 12 years later, because it's been that long, which is crazy to imagine. But 12 years later, like, we're back together working to hand in hand, but working as partners, not as subordinates.

And it's a fun hand shake. So for anybody who listens to your podcast who works in the family business, you can tell you what actually can work. I love it. Yeah.

Well, it seems like you guys are running too adjacent, like kind of businesses, but in parallel with each other to so much other. So you're not underneath your dad or your. Under blue. Well, and I got to tell you, like, for a lot of people out there,

and I'll speak to the children of entrepreneurs. And I will say that if Mama Dad was successful in that world,

there is a shadow that that is always passed.

And again, I say this at 51 years old, but even at 39, 40, 41 years old, it was like, sorry, you got a 20 year head start on me. So you're of course going to be more accomplished than I am in that respect,

“but at the same time, there is an element of, I believe,”

and I'm speaking from, you know, any equals one, that there's a need to make sure that you're able to prove your own. Muster on your own. And as an example, like even in this partnership that we're working on between the rise agency and Jacqueline Hyde is even his team.

Like all of a sudden, the boss's kid is back around, you know, and it's like, there's a natural bent for people to, you know, to assume nepotism. And, you know, and the laugh for me, and as I get great, let's just follow your resume, pull out mine.

I have absolutely no problems with it. The point is, I'm, I mean, I'm a capitalist, so like when I hear about nepotism, yeah, like I have no problem with nepotism. Because you're the business owner. You started the thing.

You started it for legacy for your family to work into. Like, it to me, it just doesn't make sense. Hopefully, right, it's when it comes challenging is if the, the child or the young one is not good, and they're in the seat, and they're destroying the company.

That's, you know, that's a different story. But if they're pulling their way, I mean, why not? Why would you hire outside when you can hire within someone you know. Yeah, because there's, there's a trust factor that someone just inherent in that, and there is a legacy, as you said.

“But I think the game goes one way or deeper to that.”

That is, there are my chips. I can bet on whatever number I want. Well, that's the thing, right? But I guess, you know, as an entrepreneur and an owner, I mean, I see that.

I always think you have options in life, right?

So if you walk in, like, I'm in a business right now with mass nepotism, and I know what I'm dealing with. You know, I don't complain about it. I, there's not, you can't complain about it. You either deal with it or you move on.

Right? Do you know, Dan Sullivan? I know Dan Sullivan. Dan's a good friend. Strategic coach.

The whole deal. And Dan has a philosophy called guesses and vets. Sorry. And guesses and vets. Oh, guesses and vets.

Yeah. And his philosophy is that throughout your life, you've just made a lot of guesses. And all of those guesses had some kind of bet that you put on them. And however it turned out, you learned from it, you guessed the next time. But every guess you take has chips on the table.

“And I think in this particular one with entrepreneurial families, it's like,”

yeah, is your, is your kid the most qualified person to, you know, create legacy? Maybe. But that's up to the business owner to take that guess and take that bet. And if, and if the business owner loses everything because the kid was the wrong person to run the company,

this is money. That's exactly like you said, it's his chips. So let's circle back. So let's circle back to the, to the, to the series, the book series. Because I think this is very interesting.

Sounds like you're giving away the keys, aka given some stuff behind the vault in these book series. Where did you, where did you get the idea of this or where was it that, you decided, hey, I need to get this information out there and or I want to protect, because I think it came from a place of also protection for younger startup businesses, not working with the wrong agencies and or going down the wrong rabbit holes.

Yeah, well, I'll tell you, as is most things in my life, they all come from moments of frustration.

And as I spend my life on zoom, but 45 out of every 60 minute meeting is spent having to fix a client or a would be client's world view mindset.

Whatever work you want to assign there, because and I'll give you a very tangible example. I had a client once upon a green correction once upon a night there, who set on a call 1.7 ROS. That is the number, if you can't achieve 1.7 ROS on every month, where we're done.

“And I'm like, well, that's a really interesting first 30 days conversation that, okay, and and of course, I'm an educator, remember that.”

And I'm like, but that's a terrible metric. And she's like, no, I said 1.7, but that's a terrible metric. And of course, I'm trying to be kind about it, because I don't like necessarily calling people's babies, ugly, or calling people's stupid, but I'm like, let me explain how ROS works. Like, this is a, this is a trailing metric, but you're measuring ROS at the account level, which means you're not measuring campaign level ROS or ad set level ROS or anything.

And I can be, and you're not at all measuring blended MER, which means each of your channels that you're using for marketing don't behave the same way. But they do behave together. And trying to explain this that I need a 1.7, and I said to her, I'm like, look, here's what I'm going to tell you. And looking to your data, the way your last agency always got you 1.7 ROS was that the remarketing that they are putting, your budget is all in remarketing campaigns.

“So, making your demand hurt you, because they're acquiring hardly any new customers.”

And the only reason they're not acquiring new customers is because you told them they have to hit a metric, so they went to the easier sales.

It's always easier to sell to somebody again than it is to sell to somebody the first time.

And you've said that standard for them. I'm like, I can manipulate all of your data to get you to a 1.7. I said, I would never do that, but I want to teach you how that shouldn't happen to begin with. And it really, it had me unpacking something that I call my holy Trinity a metric. And I'm like, ROS to me, it's a false metric, it's terrible metric, it is a trailing metric. And it's interesting. I hate it. I hate it. I hate it. I come from a world where all people look at as ROS on the market.

That is, that is most people in the world. And I will, I will debunk that for you right now. Okay. Let's do that. Now I've got, I told you the beginning. We're going to get somewhere. We're going round here. We've got it. For those of you that have been living your business off of ROS, let's go.

Now, I want to, I want to, just for me to calm my brain down. We're talking ROS, you said at the account level, but we can be talking about ROS at the campaign level and/or a product level. So ROS to me is a signal, it's not a health metric. So, if, I mean, and again, I also have a medical background, so I'm going to make some health metaphors and analogies here. Because that's the way my life was.

ROS to me is, you came into the doctor's office with a fever. Okay. The fever is not a diagnosis, it's a signal. The only reason you went there is because there was a signal that told you to look deeper into something else. ROS is a symptom.

So, you got, I agree. Okay. You have some ads, for instance, that are getting very few sales. ROS is telling you that the return on ads spend, that you spent $500 in this ad, this ad set, this campaign, whatever you want to call it. You spent $500 bucks, you've only gotten $200 bucks back. Here's the problem.

In some business models, to spend $500 and get $200 back, that's okay. Well, now, yes, I agree. You can actually lose money to get a customer if you have back.

“So, actually, a lot of companies do that because if you're on a subscription base or whatever it might be, I am, yeah, correct?”

Should we bump back that or does that make sense? I would love to unpack that and you are correct. But in part of that is based on ROS targets being correct because there is lifetime value to consider.

But outside of lifetime value, what I always talk about is that's a downstream metric because by the time ROS takes place, it's a trailing metric.

It is kind of like looking at last month's financial statements. And I can look at last month's financial statements. But if they don't teach me what to do with next month, it's just a history book.

I need to be looking out the windshield, not the rear view mirror.

There are three things that I can pay attention to and the three things that I always refer to as my holy Trinity of metrics.

“Is my lifetime value, as we just discussed, what are the actions I can take to make somebody purchase from me one more time?”

Because I'll use an example of a company called proactive. You're familiar with them, I'm sure. The skin, yeah. Proactive spends over $300 for every new customer acquisition. Well, if you're familiar with the brand, the whole product get only sells for $100 in some of my dollars. Why would a company do that? Well, two reasons.

One, they're very cash positive, which means they can afford to take a loss on a customer acquisition. And they also know that the average person who gets onto their subscription or repurchase, as you said, that person stays around for six to seven months. So if I spend $300 to get a customer, but I get $150 out of the customer every month for six months, spending $300 just got me $900 in lifetime value. And a three to one customer acquisition cost, the lifetime value ratio is perfect. That's a textbook.

I call that the scale button.

100% push the push it until you start to run. But that's not a business decision, which I always make a distinction.

You and I understand business decisions, not every company can make that cash flow decision.

“So it's interesting you said that, because there's I think there's two discussions there, right?”

The A, the cash flow meaning, can you have the cash flow to support it? Because it takes one, it's like two, three. Get that. You're running a good paper window. But then there's also the entrepreneur mindset challenge, the business owner who doesn't, like, they get it, but they, they don't get it. Like they, when it comes to like, and you could show them the money, you could literally show them the on paper.

But their brains just won't add up one plus one equal to because all they're seen is, well, it cost me $300, but I only make $100. No, I'm negative. That's not how you run a business. How do you get around that mindset? How do you actually train somebody and or get people to realize what is actually happened? Because as a smaller business, it could be scary.

“You are putting, you said, we're making guesses. We're putting chips on the table.”

Putting a lot of chips on the table. That you're exactly right. And then that literally becomes what I call a waterfall analysis. And that is, in this month, I'm dumping all the money in, and I'm going to be negative cash flow. But if I only have $15,000 in the bank, I can only buy $15,000 worth of leads, because that $15,000 is only going to give me $7,500 back using that proactive model as an example. I only put $7,500 back on. How am I going to get the $15,000 for next month's lead generation? And it really becomes a game of cash at that point,

because a lot of businesses can't support scale because of their, because of their cash position. And that's just an undercapitalized thing. Now, for a lot of businesses, they don't have the long-term takeaway. They don't have the long-term picture, and part of that is because I'm going to tell you, most business owners and entrepreneurs that I know, and maybe your audience can prove me wrong, look at the bank balance more often than they look at a financial statement. And because of that, I am the entrepreneur who looks at the bank account every morning.

I don't know what I'm trying to accomplish by looking at the bank account every morning. But every single entrepreneur I know knows exactly how much money is in the bank today. But if you ask them what their contribution margin was last month, most of them would have to go ask the account. Yeah, because that's just the nature of what we do. And using the cold B scores, like most entrepreneurs tend to be like 789 quick starts.

Like we're ready to fire in, and all of these financial things. I was going to say, I wasn't going to let you away from that. Yeah, but it all matters because lifetime value is something that I can help control. I can create experiences. I can create life cycle moments like emails and SMSes and all of the things that keep my customers engaged.

The second thing, I can control my average order value.

How do I get a bigger cart? If $150 in cart value for a $300 acquisition is too painful on my cash. Great, let's talk about how we get a bigger cart. Maybe I can get my $150 to a $200 cart, and then my payback window is only 70 days or whatever instead of 90. The third metric, this is my holy Trinity, is acquisition cost.

We talk in CAC, CAC exactly. And I'm talking in NCAC specifically, because we're talking new customer acquisition costs. This is the cost of a new customer, not just acquisition of a transaction. And that's also where this 1.7 row S is available. The AE, okay, hold on here. We just divided that up for a second.

So there's CAC, and then there's NCAC you said. So CAC is customer acquisition cost, which should refer specifically to the acquisition cost for a first time buyer.

Yes, the problem is, is that many businesses actually don't necessarily call that CAC.

They call that like CPL or CPA, which is cost per acquisition or cost per lead. Yeah, the cost per acquisition technically is referring. And this is where all these acronyms start to screw people up. If you're not an industry expert, cost per acquisition is literally the cost for the sale, not the cost for the customer. Yeah, so I may have spent 170 or $150 just to get a customer to buy a second time because all of it was in the remarketing funnel.

Well, that's a cost per acquisition, but if that's a customer who already bought from me before, I shouldn't be paying such a heavy penalty to bring them back on. My marketing cost for a second purchase should be significantly lower than then marketing cost for a first time acquisition, which is why I need to be looking at that lifetime value metric.

“What are you doing to off-channel keep that relationship?”

It goes back to, I just want to make sure a fever paying attention here goes back to ROAS, which is I can get a ROAS when I'm looking at re-targeting my customers. Can you get the ROAS when you're bringing in new customers? Can you hit your ROAS target if it's all in new customer acquisition? And that's where I'm telling you that ROAS is a bad metric because as an example, let's go back to that 1.7 crazy lady. 1.7 in that conversation is that you're fighting for a 1.7.

The problem is her average order value was $150.

Her lifetime value of a consumer was $1200. So, ask me, Cavan, what would you pay to acquire a $1200 lifetime value because the re-order rate is so high? I mean, I don't know the exact map, but what I would be paying $1200, I'd be paying $1000. I can go up to six, you can go up to seven. Well, truly mine are three to one.

Kacked to lifetime value ratio three to one for a $1200 lifetime value. If cash is not a problem, I'd pay up to $400 to buy it at customer. Well, that's what I'm, yeah, exactly. I'd pay up to $400, but using her model of a 1.7 ROAS, that means that a $150. For first-time order needed to be benchmarked against a 101.7 ROAS, meaning that we could only acquire a customer for $90 or less.

Which makes it so much worse. Well, it also makes $1200 a lifetime value for less than $90. Tell me if I'm right on this, because I'm not saying the expert. But when I heard that, the first thing I thought was like, and making the marketers jobs so much harder than it needs to be. And leaving so many opportunities on the table.

You're 100% potential, like, potential, like, whether you want to call them CPLs or even opt-ins on the table. It's exactly right.

“And the issue is it's a scale issue, because if you want to--”

You can't scale like that. So you're killed, but you're having your scale in slow and long. You're scaling some customers a month. Yeah, you can't-- With the kind of margins, and by the way, her margin-- Oh, I don't want to even want to know this.

The margin was like a 12x. So cost of goods was like nothing. Yeah. So for that $150, that $150 average order value, the cost of goods in it was less than $10. Oh, my--

Wow. So those are the things.

“So the original question you asked me was, what caused me to write a book like this?”

And the reality is, is what caused me to write this book was trying to get a level set conversation.

That when someone comes to me and says, but then I'm like, page 46. I want you to go to page 46. Yeah, it was great. So I understand me, go to page 2 or go to book 2, chapter 3, go read this section so that when we get to a conversation, there's a common denominator.

cac versus cost for acquisition. Those aren't the same metric. And yet they are used interchangeably, and I'll say two things. One, ignorantly by entrepreneurs sometimes, and I mean ignorant in a just lack of knowledge, not as a negative. But manipulatively by agencies.

Because if an agency clearly explained to you that it was a cost for a new customer acquisition, those numbers are never going to be as good as a cost for acquisition,

meaning just the attributable marketing towards total sales. And then the other side of that is channel acquisition is an entirely different issue, because first of all, not all sales are attributable to a specific channel. And maybe I saw you on meta, so I went and googled you. Who gets the win?

Well, it is now you just open up another game.

“We are open up Pandora's box, and we're staying here because it's so important, because I've been in so many businesses where that becomes,”

especially online businesses, higher ticket. I usually come from more of the services size of 5, 10, 15, 20, $50,000 ticket. And the marketing is arguing with each other of where or the channels. And the channels are arguing, that was my lead. And I'm on a point where I say there's, you can't track it all.

Like there's no way you can track it. You can track, you can try to track the first point of entry. But there is no way to possibly track what you said is I saw an ad on YouTube. I went to Google, who searched you up, I got busy with the kids. I went back on Instagram, you targeted me.

I watched the VSL or I watched whatever I went read the sales page. Then the other kid pulled my leg. And then I just went straight to the website. I was like, you know what, I'm going to the website. Well, it's an organic sale.

Your marketing efforts did nothing. Yeah. Or you do something. Yeah. It's sarcastically.

I'm saying it. Yeah, exactly.

“The owner who looks at it and says, well, they came straight to our website.”

That had nothing to do with marketing. Or social. So I mean, I guess, yeah, you can't. You cannot take somebody because unless they do an action, you can't take them. What we find is there's more that the bigger problem that we have in cross platform attribution is double attribution.

Because there's, you know, again, in your scenario, let's assume that all of that happened within a seven day or a 30 day window. The issue is as your example was I saw you on YouTube. You took out an impression. Well, then you Google the person. Google just pixel your machine.

Now, Google and YouTube are on to the same story. But Google pixel Jew went to Instagram and got remarketed too because Google's pixel shared with meta, meta just pixel Jew. Then you ended up getting an email because you watched the VSL. So, Claudio just pixel Jew.

Then you ended up going to the website and converting. But we just counted three pixels and all three of them claimed to win. How do you deal with that? You deal with what's, I mean, and again, I'm going to arguably say it's just the rules of engagement because some businesses count first click attribution.

Who introduced us? Last click attribution. Who closed the sale or what we go weighted attribution, which is, let's assume.

And I always say this is, I'm from hockey town.

I'm from Detroit originally. So, I always look this as, we don't just count the goals. We also count the assists.

“Yeah. And because of that, I mean, nobody in basketball ever got an assist, right?”

You got the basketball or you didn't. hockey, we count the assists too. So, when we're looking at attribution, it's who got the goal, who got the assist, who was the person that stole the base versus who actually got home in baseball. So, there's every sport measures it differently.

It just depends on what are the rules of the game and what are we counting. The goal for a business is not that any one of those are better than another. The goal is to just consistently count them month after month so that you're not looking at apples and oranges type time data. I was going to say, yeah, there's not one decision you make.

You track all and then the decision comes from what is the most important metric for that business.

Correct, the fall. And in your world of a $15,000 ticket item, for instance, it's probably a very different metric than a client that this is so funny. I used this client as an example and I love him dearly.

The company excluded, but he's just a nice guy. And he sells socks that have like Bible verses and stuff on them. And it's company called Bible socks and it's just the funniest thing to me because they sell.

“And I think it's amazing and they're great quality socks and everything.”

But he's selling a $18 pair of socks or a $15 pair of socks. You're selling a $15,000 item. Like it's such a difference. So the way that his business tracks. Like there is no middle funnel. Like there is no education sequence.

No one needed to go through an education sequence or a VSL before they bought a pair of socks. They're impulse buys. It's the convenience store crowd that I didn't buy the gum because I was searching all over the place.

I've never bought gum online.

It's a gas station. It's whatever. So consumer behavior on those types of things are just very different. So what measures them should also be very different. Absolutely. But at the end of the day, we do even in my world.

They do a lot of row as measurement. That's a big one in ours, but cost a book call is a big one. And then I run a sales agency. So mine is more the sales metric, which is what we call average appointment value. Meaning how money dollars does my sales guys make on every call or every booking that lands on their calendar.

Regardless if they show up, good fit, bad fit, whatever it is. Because it costs the company $150, $200 just to get a booking. 100% back when I used to run sales teams.

It was we always used to talk about lead to appointment appointment to show.

Show to interview and interview to start. And that's the education funnel. That's a lead came in, how many of the leads that came in actually turned into the person on a telephone setting an appointment. Of the appointments that you set, how many of them actually showed up for their meeting. Of the people that showed up, how many of them actually signed paperwork and enrolled.

And of the ones that enrolled, how many of them actually started classes when the semester began. And literally looking at those five numbers. And this is a lot of what I did in my early days in education was fly all over the country and train teams on this. Because it was like, no, your lead to appointment is down and like we have a script problem. Like you're not following the script on a telephone call.

And nine and a ten times I could listen to recorded calls and be like, there you go. You ended up talking about the about the students dog. Well, the student was talking about his dog because the dog was barking in the background. Then you let the prospect control the call. We're getting something absolutely, yeah.

“And all of that training that, why did the person not show up for their appointment?”

Well, I can listen to the phone call and tell you why they didn't show up. Because you started, you used the phrase, well, when works best for you. Yeah. Or you set the appointment two days from now or three days from now. We'll see you tell next week.

Like, no, here's the answer. I have an appointment available at 515 today or one at 930 tomorrow morning. Which one of those works better for you? Yeah. I think this is basic stuff.

And that's exactly it. And if you understand your funnel, you understand the break points. And exactly how to fix the funnel. The reverse. Totally AOV, CAC, LTV.

I can move the levers. Those are all break points in my funnel, if you will. That will pan out in my row S. My row S will change, because those are my upstreams. The Trinity, LTV, AOV and CAC.

Or CAC. There you go. That's exactly right, buddy. That's my story. I'm sticking to it.

And for those that want to learn more, I mean, you basically put this into a full book series. Yeah. Go take my knowledge. Do what you got to do. So where do you see marketing and all of this?

Like even LTV, AOV, all of these metrics. How are you seeing these going to be changing the way consumers are buying the way AI is being. Obviously implemented in all of this. Where we are in the world today with everything that's going on.

“Are we going to be tracking the same metrics in the next five, ten years?”

Or are we going to be tracking different metrics? That's interesting. So yes, AI, we could go on for another hour because that's probably my next favorite topic.

The reality is, as an agency, we're super heavy in AI.

I would say that we are probably more advanced in AI than most companies I know. Because I had a meltdown about a year and a half ago. But it was not anything too dramatic and most people didn't notice.

But at watching the way AI was starting to revolutionize the marketing world.

Pushed me into a place of having to say, "Do I have a business two years from now?" Like is my skill set even valuable?

“And the truth is, I think every smart person in the world is asking that exact same question across discipline.”

But it doesn't matter. I mean, if you're a doctor, you're asking yourself that question because AI is able to diagnose better than most physicians. So the crazy thing is the physicians don't want to believe that. It's even the crazy. That's definitely the reason.

Because we're going to go down a rabbit hole here because I'll tell you, I'm all ready. I love it. But it's sad because I'll just take a whole step back for right now. It's like the 30-step view of the 30-cave view of this. Everyone's saying, "Oh, AI is going to take over humans."

No, we're in a world right now where humans who are adopting utilizing AI. Being AI, implementing AI will 1,000 percent take over the humans that are breaks around. What's this AI?

I actually, my wife always puts her hand on my hand.

Like, you know, the wife tells you to shut up, like, quietly. On a daily basis, if we're out in public. Because the first thing I'll ask, you know, "Are you an AI?" And when someone says, "No, I don't do AI." "They bought it." I can't be in that conversation because I'm now in speaking to somebody in history.

Like, I'm not going to be speaking to you in the future because you're not going to have a life in the future. And you don't even want to accept that. So we're going to have a life in the future. So we're going to have a life in the future. So I had the same panic at that in the same thoughts.

And I was running away, I was so scared because I wasn't. I'm not a technical founder, right? Like, I'm your high-d, high-high on the sales guy. But when I made that commitment, wow. I would just say, wow.

It was so pretty. It was so pretty. It was so pretty. Now, ancestry. Let me say this and you got it.

“I believe we are now in the first time in history.”

Where the only limitation we have is the one we have in our mind. It's a meditation. I just did a group interview yesterday for a bunch of interns. I love this. I love this.

And literally I started the meeting with, okay, I'm talking to you all like your college grads, so on. So they're all just like super eager. They just finished school last month or whatever. And I'm just like, look, I'm going to sell out until you.

I'm so sorry you spent all this money on your way. And they're like, like, somebody was just like, you don't like college. And I'm like, well, I'm going to say this. Like, I've got a bachelor's degree for master's degrees in two doctrines. It's not about not liking college, okay.

I love college. Like, I'm here to tell you right now that nothing you learned is in any way

“comparison with what you could learn if you just have the intellectual”

curiosity to want to learn it. Like, I'm doing 12 13 people's jobs on a daily basis. And one of the jobs I'm doing is building robots to do other people's jobs. And here's my philosophy here. And this is how I explain to them.

And I'm like, if you have an above average IQ and an intellectual curiosity, you can do anything you want in the world right now. There are zero limitations on what you can do other than time and imagination. Yeah, but it is a wide open field. And I intend to lead not follow when it gets into that space.

And literally, that's our hiring criteria right now because the fact that I had a call with a recruiter who's recruiting a COO for me right now. And that's clearly a pivotal position. And she's like, I need to know everything about you, the way you think, the way you behave.

Like, I need all of this. Like, what are your likes, your dislikes, what are your cold B-scores,

your mightors, brains, and I'm like, first of all, I can be an ass.

Like, let's be honest about that. And like, but here's part of my problem. And I spell all this out and like, I, because she's thinking, well, you need a person who's this and this and this and who's you've done. And I'm like, I don't need a person who's ever worked in an ad agency.

I don't need a person who's got 30 years experience. I don't need a person who, you know, wears a suit to work every day. I don't care. I want someone who is smart and intellectually curious, because there is zero limit to what anybody can do today.

And there is just an entire culture of people who are still baffled. And they're like, oh, you're so smart. And I'm like, nope, I just know how to use the machine. I love the intellectually curious. You have to, and the key word is there is the curious.

And I, and I with you because an intellectually curious smart person. Guess what they will do. Take over the world.

“Well, I was going to say, they'll figure it out.”

Yes. They'll research if they don't know. They will go research deeper and harder than you. And I ever will research and because it's in it in faster time than you. And I will ever become fat experts in it.

You've lived your career. I guarantee the same way I have. That is, you say yes and figure it out. Yes. Every opportunity I had was something I didn't know how to do.

Right? You hire me to do something. I can, can you do it? Sure. Like, and as long as I figure it out before you figure me out,

we're good. And by the way, you got what you paid for. Yep. As long as I figured it out and got the job done, it's irrelevant to you if I knew how to do it when I said yes.

And right now, I've lived my life that way.

You know, and always figured it out, which again, praise Lord,

I just got a good brain. I'm very happy about that and I do whatever I can to keep it in good shape. But here's the truth. That opportunity is available, not just to the super smart people nowadays. It is available to anybody with the intellectual curiosity,

even people with lower IQs. But here's the point of all of that. AI is not taking away humanity.

“I believe that AI is giving humanity permission to be humans again.”

Because we have spent decades behaving like robots in the workplace. And we're actually required to be humans in the workplace now, because the only reason to have humans is because they do something that robot can't do. And too many people, particularly college graduates,

because they've been trained to, I mean, people who get A's in school are not out taking over the world. I would argue this a most of your audience didn't get straight A's in school because straight A students are conformists. Yeah.

I couldn't agree more. Well, what's the big saying they say, which is really true. This straight A students work for the C and D students. Absolutely. Because the straight A students learned how to follow a system.

That the C and D students learned how to survive.

And the reality is that the A students aren't the people I necessarily even want.

That's the rub in all of this. It's trying to figure out that I don't need the people that everybody thinks I would need. But when I say the humanity, I'll say this that is any interview I have. I'm like, "Ground here, everybody knows what I mean when I say 1080 10." And I kind of stole some of that from my canning, but the 1080 10 logic is that a backtrack 10 years.

10 years ago, I came to work. My boss had done 10% of the work before I got there because the KPI was determined. The leads were generated. All of that stuff existed on my desk. My job was to do 80% of the work throughout my eight-hour day and give the work to somebody else to review to decide if that work was appropriate or not.

If it was, it got shipped. If it wasn't, I did it again tomorrow. The problem is, I'm not hiring that 80% anymore because now I need you to understand what the 10% is. And people call that prompting. I look at it as I need to actually have a clear scope of the work I'm looking for.

AI is going to do the 80%. My job picks back up at the end of the AI's work because now I need to decide if what the AI did actually make sense. It's applicable to the situation.

“What's the most appropriate way to human to human deliver it to a client?”

Like, I get to be more human. I get to strategize. I get to have a relationship. I get to have meetings. I get to think and marketing not about a row-ass per se.

I get to think about human behavior and purchasing behavior. I get to spend my time doing the things that only humans can do like use imagination. AI is leaning on history. I get to spend my time in the future now where AI can't be. Because it can't imagine it data aggregates.

I could go out in this whole day. Sorry, Caitlin, I'm just going nuts here. I knew we were going to attack a tile and I love it because even I just got a moment where I realized what you were saying. And it's so many, well, employees of these A students, these employees, they come in and they're working in the system. Get all day long, they're working in the system.

And the business owner, when you're starting out of a business, you're always working in it.

And you're always here. Are you working on your business or in it? Now we're living in a world where every employee can actually work on the business.

Now it's not just the entrepreneur working on the business.

“Every employee can actually have the strategic thinking, the intellectual curiosity as the mundane work that you should take forever in waste eight hours a day.”

It's now done in 10 minutes. And here's the deal with fewer people, but the same top line. Those fewer people can be rewarded with the same pool of money that the larger group of people used to have to share. I couldn't agree more and I hope business owners hear that. It isn't about trying to cut the cause, make more money for yourself.

It is how can you get instead of having 200 people? How do you have 20 rock stars that are working 10 different jobs using AI and being handsomely rewarded for that? Handsomely rewarded. Yeah. Well, I won't hire anybody unless they use AI.

So I tell them, if you don't use AI, I had a developer that I would draw it on. And I said, "Are you using AI?" They're like, "How do you think we've been communicating?" That's great. How do you get your attention?

I said, "Two Shay, you're hired." I write half my emails. Right?

“You know, it does most of my research work.”

I just spend my entire day. I just weekend, because on that guy, I fell behind. I had a bunch of travels and stuff and just, just, you know, the day-to-day stuff fell behind. And it's like this weekend. And like that's it.

Saturday Sunday, I'm committing myself to being in the office early morning to late night all weekend by myself. And at the end of my time, I actually, I estimated that the amount of work that I was able to do, that I was able to complete from non-interrupted focus time got about a month's worth of work done. And I just said that, like, I can't, well, like, my team came in on Monday morning. It was like, "What in the hell?"

Because the amount of assignments and tasks and outputs, and this is what I need and data dives and just, because I literally, like, I've got not only my claw that've got my, my chat, GPT, because I use them for different things. I've got an army of clawed bots that are autonomously doing a hundred different things. And I'm literally just having 16 conversations. I mean, I laugh and say, "You can see the big glass wall behind me.

I'm going to get a grease pen and it's going to look like the beautiful mind.

I'm going to, like, rustle crow this thing in a second."

But they literally just, the amount of human output. And none of those things would happen if I weren't human. And it's me understanding buying behaviors. It's me understanding the creative process. It's me understanding that when AI gives me an output and says, "Well, on this landing page,

it needs to dot dot dot and, like, no, I'm a human and that doesn't speak to me." Like, we need to do that again. And again, and it's not that I pushed a button and a bunch of output came out. It's that AI, everyone refers to AI as a tool. And my team knows it's hand smack if you say tool when you refer into AI.

AI is a collaborator, a collaborator. Like, this is a collaboration. It gives me input. I give it input back. It gives me more.

I give it more. A tool is an input output. And it's like, this isn't an input output moment. This is a shared analysis and shared synthesis. And it's opinion versus opinion versus opinion.

Until we get to a point that we both agree. And I'm collaborating.

It's like a group project where everybody's participating for the first time.

And it's like, this needs to be a collaboration because you have the world's greatest collaborator with 135 IQ and a PhD and everything. Yeah, it's, it's, I guess, say we could keep going. Because that was the other thing too. I was just talking to somebody.

“I think I heard it on the diary of the CEO, great podcast, by the way.”

And he was saying he there was like, there was an expert there going. Like, I, if you are hiring someone who's out of grad school, you might as well hire, and this is where we get to that whole, you know, AI taking over. You might as well hire an AI agent because an AI agent is as good as somebody with four or five years of experience.

So now it's about how, you know, that's the biggest issue that's happening. Is how are these kids that have no experience? How are they going to be able to get the five year experience that they need? That I'm looking for now before I hire anybody. And the way you do it, this is why I said, don't block is,

go become an experienced AI prompt engineer and watch how your life will change. I might cheat the staff. I say that I've often said that if anybody was like me when I was for age, it's hard.

Like, and I don't say because I was always into what you're curious.

It didn't matter. Like, I was disassembling just to see how it was built.

But she's one of those people where it's like, I will pass a project along and she'll be like, okay.

And then go about doing it.

“The next thing I know she's running the world from a, from a Mac mini.”

What in the world is going on? And it's like, I've got a full time AI innovation manager who's like, that team just spends their day developing things. Now at our office, I'll give this away. I'm going to be jealous if everyone else does it. Like, we're using a lot of, like, clawed butt type stuff. So we've got security guardrails, I'll do that kind of stuff.

But they're all on Mac mini. So one of our things that we laugh about is like, every Mac mini, we've personified all of our robots. Yeah. So every Mac mini has a name. Every Mac mini has a personality.

We build the personality into it.

So when you get an email from a coworker, coworker has a name. And all of the names actually have Mac in the name. Okay. So it's kind of funny because like, like, our meta media, you know, our, our meta manager. His name is Connor McGregor.

“But he always emails with an Irish accent.”

Yeah. Like, an English McGyver does Google research and Leonard McCoy writes medical blogs. And like, just because we use this whole army. And it's like, I'll say that we used to do the work work in the business. But our business now is it's a smaller group of people with the top that are playing puppet master.

Like, we're just helping steer them. They're there.

The subject matter experts, we're reviewing their work.

We're watching them. We're pointed out anomalies that they may have missed because you know this. Like, if you edit your own work, you do a terrible job. But I'm really good at it. Another people's work.

Yep. Yeah.

“I mean, I love it because this stuff used to scare me.”

But now I like, I spent six months just all in attitude. And everything you're saying is like, yep. Yep. Great doing that. Everything like that set up in the business that I'm running right now. And you have to.

So for those of those that are still here listening. They want to learn more how they can maybe work with you. If you have any commerce brand, buy out any commerce brand. I know where I'm going. But for those that may not know where they're going or working with maybe an agency.

They're not so happy with how do they find you? Yeah. So I will tell you the easiest way to find me is through my own website, which is thebarkeong.com. Easiest way to find my books.

Everything about me, themarkong.com social man handles Instagram. I'm just themarkong. And then the only reason I have that is because I bought it before my dad did. Because he's got the same name. So that's even more confusing.

My agency's name as I mentioned is rise agency. RYZe agency.com. You're welcome to take a look at it. But reach out to me. I mean, go to themarkong.

All my social handles and everything are there. Reach out, love to talk to people. I just love to chat about this stuff. And we are actually waiting for this literally this book series. What's supposed to launch two, three months ago.

And this is going to be terrible. But we did the entire audio book recording. Because we're going to be giving away free audio books. The audio book, all of by did the entire recording. The editor mailed all of the notes.

And U.S.P. has lost the edits. Yeah, damn host of us. So the audio book added is taking longer than expected. But here we are. Well, Mark, thanks so much for being here.

Appreciate the wisdom and all the knowledge that you brought. I appreciate it, but you're great, connected. Thank you. [MUSIC]