Agentic Shift

Alex Porter, CEO of Location3

Episode Summary

Alex Porter is CEO of Location3, an 80-person Denver-based agency that helps franchises with their online marketing. Alex tells us how he went from snowboarding bum to CEO, how he overcame digital advertising skepticism in the franchise space, why he wants to make sure his clients’ kids can go to summer camp, why he applies his company's core values to clients, what a TSS budget is and why it's so important, and why he takes tart cherry supplements

Episode Notes

Alex Porter LinkedIn

Location3 Website

Traction: Get A Grip On Your Business, a book by Gino Wickman

Simple Habits for Complex Times, a book by Jennifer Garvey Berger and Keith Johnston

Organizational Physics, a book by Lex Sisney

What Got You Here Won't Get You There, a book by Marshall Goldsmith

Episode Transcription

David Rodnitzky(David) (00:02): In this episode of Agentic Shift, we talked to Alex Porter, CEO of Location3, an 80-person Denver-based agency that helps franchises with their online marketing. Alex tells us how he went from snowboarding bum to CEO, how he overcame digital advertising skepticism in the franchise space, why he wants to make sure his clients’ kids can go to summer camp, why he applies his company's core values to clients, what a TSS budget is and why it's so important, and why he takes tart cherry supplements. Enjoy the show.

Alex, thanks for joining us today.

Alex Porter(Alex) (00:35): Thanks for having me.

David (00:36): Yeah. Great to have you. Let's start out by telling us the founding story of Location3 and how you got involved and how the business evolved.

Alex (00:45): Yeah, absolutely. So I'm not the founder. Our founder is Andrew Beckman. Andrew was the International Sales Manager for DoubleClick in the late ‘90s. So he went around and set up a number of offices, selling DoubleClick technology and services and decided to strike it out on his own, and also decided to move to Denver. In his wisdom, he thought it would be great for a bicoastal approach to what we were doing. And he picked the name Location3 because he thought that in the future of the internet, your location was going to be everything online. So location, location, location.

So a little bit of a real estate bent to it, which was very prescient for our current agency state, where we really focused on local marketing and actual physical locations. And I got involved. I was introduced to Andrew through a mutual friend at a concert of All Things in Denver. I was a snowboard bum at the time trying to decide if I wanted to go back for my PhD in sports psychology or get a job. And he said the internet was going to be big. And so the two of us started working together and have evolved over the last 19 years into what we are today.

David (01:56): I think it's a very cliche of you to be a snowboarding bum in Denver. I just want to point it out.

Alex (02:00): It's so cliche, even more cliche story is I moved out for a winter to snowboard for one season and never left. I’m in love with it. So that's the other super cliche.

David (02:11): And what was the concert? Was it Big Head Todd and the Monsters?

Alex (02:15): No. I think it was either Rebirth Brass Band or [Soli? 02:18] or some kind of funk soul awesome fun band.

David (02:22): Okay. Well, that's less cliche than I think. What's the size of Location3 today?

Alex (02:26): We're about 80 folks right now.

David (02:29): And you're based all in Denver?

Alex (02:30): Two years ago, we were 99% in Denver. And today we're about 60/40 Denver and remote. And that number is skewing non-Denver more and more.

David (02:40): So location, location, location doesn't matter as much anymore for hiring.

Alex (02:44): No, it really doesn't. And it's been a good thing and a bad thing. It's been a good thing because we can look for talent anywhere. It's a bad thing because other people can go after our talent anywhere. So that's been a bit of a challenge.

David (02:56): Yeah, absolutely. I think we've experienced that as well. We've had offices in college towns, and we used to be sort the only game in town. Now there's a million games in town. So it’s been 19 years since you’ve been working on this. Tell me about the early days of the business and what were the challenges that you guys experienced and how did you overcome them?

Alex (03:14): I think the biggest challenge that we've consistently faced is just really identifying what the needs are in the marketplace as it relates to digital marketing and finding our niche in that space. We started off really, it was a lot of email marketing. We did some early search aggregation across some of the Tier 2 engines that don't exist anymore. We moved into kind of a full-service agency model with creative and tried to do everything to everyone which really doesn't work. And it's really only been in the last four or five years where we really decided, okay, we are going to focus on the franchise space specifically. We're going to put a lot of efforts in development, time, and money behind technology to have a platform for franchisees.

And it really, until we kind of put that stake in the ground and said, this is really who we are and had a real answer of what was the value that we were bringing in the specific market we were bringing it to, that it did feel a little bit like we were wandering in the wilderness and just trying to follow the recent trends. So I think that was a really big challenge for us that I feel like we've definitely done a good job overcoming

David (04:23): It's interesting because there's a tension that I hear from agency founders and owners all the time between focusing on what you're really, really good at and not focusing so much that you become a point solution and you risk being displaced by a large holding company or conglomerate. Or so it sounds like you maybe started out with the, someone wants me to do something for them. Oh, I'll do it. And now you've morphed into more of like the maybe 8 out of 10 people who contact you, you're just like, well, this is not our sweet spot. So find someone else. Is that fair to say?

Alex (04:56): Yeah, I think that definitely is fair to say. Ninety percent of our revenue comes with franchise brands that we work with, and of that, 90% of those franchise brands are a hundred locations and up. One of the things that we've realized over the last three or four years is that the emerging brands are great. They're fun to work with, but they really need a lot of help and their funds are not typically available. That's really a bit of a struggle.

We've done a pretty fun model over the last year where we've decided that we're going to pick out one or two, what we call emerging brands that we really feel have a ton of potential. And we really go all in with them and focus on helping them sell more franchises, get their local marketing platform set up with the idea that it will pay off for us in a couple years’ time.

So we're taking a couple small bets in some of the small franchises, but yeah, for the most part, we get people inbound a lot that want to do things that aren't franchise specific. And we have partners that we refer them to, and it's just important to us to really know what we're good at and focus on specifically that right now.

David (06:02): Yeah, that's great. One of my favorite books is The 22 Immutable Laws of Branding, and one of the rules is if you can't be number one in a category, create a category you can be number one in. It feel like you guys did that. I’m just curious about the emerging that you work with. I agree with you that sometimes working with startups and emerging brands is one of the most exciting parts of being at an agency. And it's always fun to work with a company that has three guys in a garage, and then five years later, see them getting listed on NASDAQ or whatever. How do you choose those one or two emerging brands that you're going to work with. What are the criteria that you look at that makes you decide you’re willing to take a risk on that company?

Alex (06:38): Yeah. So a few different factors. One, we really look at the category itself. And we can see when Google search trends or in social media, are people excited about this? Is it something that's growing? Are people really actively looking for it so we can see if there's customer demand for it. But probably the biggest factor typically at this point, it's with the founder. Is the founder trying to just check a box from a digital marketing perspective or they truly believe in it. Do they believe in activating their customer base locally through digital means?

One of the biggest factors is have they done the leg work in terms of setting up an actual ad fund? A lot of times with an emerging franchise, sometimes they will sweeten the deal for a new franchise to be sold by saying, Hey, we won't charge you a marketing fee for the first two years, five years, whatever it is, which basically then says we have no money to market, which is you might help close the deal on new franchise sales, but in two years’ time, we've talked with so many franchise companies that are like, oh, we don't have any money at all because we don't have an ad fund, but we need to do 17 different things.

So it's really about is the space in demand. Does the founder buy into this? And then do they have some of the proper things set up from an ad fund perspective would be really the three core keys for us. And then there's also a little bit of a, is it cool? Is it fun? Is exciting factor.

So we're working with a brand called Tutu Schools right now, which is about 50 locations. The founder is an ex-professional ballerina that saw a need in the market. She actually started one location. Everyone was asking her, it sold out and then started another one. And next thing you know, a few years later, there's 50 locations. There's still a lot of demand. It's also really easy to market because it sells itself, but it's a really fun brand and it's really fun working directly with the founder and seeing the impact you have on their whole business overall.

David (08:43): That's awesome. Great name for the company, too. You instantly know what they're selling.

Alex (08:48): Exactly. And I don't think they have much competitors. Their competitors are more small and regional.

David (08:52): Yeah. I mean, we haven't done much work in franchise or I haven't done much, but we work for a company called YogaWorks, which subsequently scaled substantially. And it was really fun. And it's also a good mission to spread yoga in this tense world we live in. Yoga and dance schools are both positives, I think.

Alex (09:12): I’m going to say, maybe 10 years go, we had some franchise clients and we were having a lot of discussions about do we stay focused on the space or not because we had gone to a couple IFAs in a row, and that's our annual conference International Franchise Association. And we would be talking about digital marketing, and it was really falling on deaf years. People were not interested in it. I think the franchise space was a few years behind the rest of the world from a digital marketing perspective, but we were kind of like, do we even continue doing this? It's so hard to do. We didn't have any technology at the time to help us.

But there was a brand that approached us and said, Hey, we're at 15 locations. We've got a plan. We're going to grow fast. And we were just like, no, we're not into it. And it turned out to be Orange Theory. We missed that on that one a little bit. That's the one I’ve been kicking myself for. I was like, I don't get it. It's orange. I don't understand. Like, but so sometimes you miss.

David (10:01): Yeah. Well there's a venture capitalist, and I'm forgetting his name now, but he's at Customer Capital who has his anti-portfolio. Maybe I'll link to it, but it's all the companies he didn't invest in that he passed on. So it was like Google. If you had hindsight in any business, you'd be worth $50 billion. That's interesting. Well, it's interesting that you guys kept that in the face of resistance from the community. Why did you stick with it? Why didn't you go and transition to another category where people were already early adopters or jumping on the bandwagon?

Alex (10:31): It was a combination of a couple things. One, we had a couple of clients that were in the franchise space that were in our top three clients. They were really good. They were profitable for us. We had a really great strong relationship, and it just continued to just make sense. When we were looking at the landscape, we were doing a lot with local listings management at the time, we were building out that platform. We were actually in that game before [EX? 10:54] was and had a pretty market share of that.

When you look at the retail locations in the United States, about 50% of them are actually franchises. So half of the market is a franchise, and we really like this enterprise plus local combination. So we could bring the agency expertise at the enterprise level, focusing on data and analytics and strategy and planning and national media, but then bring that to life on the local level and have that support at each location.

And at the time, really, there was pretty much no one telling that story. So it really was, we had a foothold, we had some cache in the world of the franchise. Every year we go to the IFA and there's 10 new people that come in and say they're franchise marketing experts. And the next year they're gone because the franchise world is not one that you can just pop. You have to build some authority within that space. So I went through the CFE program, which is Certified Franchise Executive, which was pretty extensive understanding how FDDs are developed and the legal aspects of franchising and things about ad fund and operations.

So we'd already done a lot of the leg work and it was an area that we knew that if we kept with it, the franchise world would keep up, would start rising to the need of digital marketing. We were right. It was a safe bet. It was like when DraftKings tells you, is Cooper Kupp going to have one catch tomorrow. And you're like, yes, he will.

David (12:27): I just did a free contest on Fantasy Duel, which was an early client of ours actually right back when there were three people in a room before they got regulatory approval, unfortunately. But anyways, there were like 18,000 people who were in the contest, and I finished like 17,800. So I think the people who lost to me were the people who picked like deceased players basically. So I'm investing in other places.

Alex (12:51): It's almost hard to do that badly, isn’t it?

David (12:53): Yeah, I know, It's like a black swan. One of the things that's interesting about your business, I would imagine, is that you've got corporate franchise that's working with you, but then they also have a thousand sons and daughters who are the franchisees who all believe, perhaps rightfully so, that they're the most important franchise in the book. And I would imagine that many of those companies would love to just talk directly to you and develop customized strategies and have a weekly rapport with you. And I'm guessing that that's not how it works.

Alex (13:21): Well, we'll put it at like the 95/5 rule. So every franchise system we work with, we do have a direct line with the franchisees. So if they want to pick up the phone and have a conversation with us or schedule a meeting, we have that available to them. Nine-five percent of the franchisees we work with are not marketers, and they want to understand that what we're doing is working, but they don't need to dive really deeply into the nuances of the marketing program. Five percent of these folks love marketing and they want to understand it. They want to customize it. And we understand that, and we provide some tools to allow them to do that in our Local Act platform or working with our people.

But for us, it's an ounce of prevention is worth a pound of cure. So we are all about proactive education webinars, emails with, Hey, here's what you did. Here's what you got. Here's what you could do more of, click this button, really make it trust is the most important word for us in this franchise marketing game. Because if they're spending $500, $1,000 a month with us in the platform to drive business, it's a big investment for them for these franchisees. And we need to make it very transparent, what we're doing for them and what they're getting for it.

And it's really a symbiotic relationship because if the franchisee knows it's successful. They invest more, they drive more revenue. The franchise corporate gets more revenue because their franchisee is getting more revenue. And it kind of all feeds back into the marketing machine. But it's all about building the trust with the franchisees and that trust can be broken so easily. And sometimes it's hard, too.

We had an incident recently where a franchisee I think had spent a $100 this month and hadn't gotten a lead, which, you know, there's an average lead for them because it was more of a V2B business, might be $150. So they hadn't, and they were losing their minds about this and sending emails to the CMO and the CEO and us and me and everybody. And it's a hard conversation to have to say, Hey, you need to be patient. Nothing's wrong. We're not trying to screw you over. That's the biggest thing that is hard sometimes to preach to the franchisees is we really are on your side. We are doing this for your benefit. So it's a constant opportunity for us to improve that relationship. And it's really about that education piece.

David (15:41): I think the franchise space in general, I'm sure there are good franchises and they're bad franchises, and the bad ones are the ones that, like you've said, overpromise and underdeliver. And when they're selling the franchisee, they talk of about their national marketing campaign and all the resources they're going to get and all this amazing success. And sometimes they have great marketing campaigns, but a lot of the legwork has to be done by the franchisee anyways. And it's not a turnkey solution. That must be a challenge for you as well. At the end of the day, sometimes it doesn't matter what the great work you're doing. If the franchise and the franchisee has a bad relationship, they're not going to trust the marketing.

Alex (16:13): Yeah, exactly. That's a great point you brought up because when we come into a new brand, we pitch our services. The corporate typically is the one that approves us and brings us on board. The best case scenario is if there's some kind of a franchisee board that's involved in that decision.

But a lot of times, sometimes the first thing we find out is that that relationship between corporate and the franchisee is strained. They don't like what they're doing. They don't trust what they're doing. Where is our ad fund going? There's not sometimes a lot of transparency. A lot of times the ad fund goes for salaries and operations and not actual advertising. So they don't see it. When that is the case, it's kind of tough because we want to say, Hey, corporate’s approved us. We're their choice, and then if they say that, then the franchisees, well, if corporate likes you, I don't like you. But for us, we have to have that relationship at the corporate level because we need their collaboration. We need their help marketing our services to the franchisees. So it's definitely a balance.

But then when we work with the individual franchisees, they really can feel that we are there for them. That comes through. One of our core values is to be stewards for our partners. We understand that their marketing dollars are coming out of their pocket. We have to treat that like it's our own money. If we're running a marketing program for a bakery down the corner, we can't waste that money. Our head of our local team really likes to say like, if this works, they're sending their kid to summer camp. If it doesn't, they're not. It's real.

David (17:40): That's a great way to think about it. How do you prove to clients, either the franchise or the franchisee that you are driving results? Obviously, if you're a subway franchise and you're running ads that have coupons for $6 off a sub, there's some level of measurement. I guess there could always be lead gen forms and whatnot. But is that generally how you measure things?

Alex (17:59): We will take advantage of any way possible for us to measure success in the program. So we have a platform that's called Local Act. The franchisees can log in and they can see everything. They can see what keywords we're buying, what position the keywords are in, what social assets we're running, what video assets we're running, anything and everything they want to see is in there. And that's coupled with the conversion. So if you're driving calls, we're measuring calls, we're recording the calls. You can listen to the calls. You can see how you're frontline staff is actually answering calls.

We had a client recently that was complaining that their leads weren't quality. We went through and noticed that out of 100 calls, 80 of them went to voicemail. And this is a service that is an immediate service. If you're calling, you want to talk to somebody, and they were like, oh my gosh, we missed out on 80 projects.

And they went and changed their operations based on our findings that no one was picking up the phone. We track instore visits. So Google or Facebook, whoever offers that data, you're using your Google Maps. You did a search. Within 20 hours, your phone showed up in that location. We're feeding that information back with some kind of measurement, like an average instore purchase is 50. And we'll put something like that on there or something.

If you have local inventory ads, we do a lot of local inventory ads. So you search for water bottle near me. And it shows that it's in store at the 7-Eleven down the street. You go in, you buy it. We're measuring that. So long story short, any metric that we can grab that aligns with their goals and they agree on it, too. So it's not like, Hey, this is what we're going to measure. That's also where we're working with that corporate marketing team to understand what matters. And it could still even be a simple lead form.

We work with a lot of early childhood education where people that they want to fill out a form so they can get back to them and things like that. So cost per lead, cost per call, return on ad spend, all those things we're measuring. And then we're using those metrics to feed into the optimization system. So we say, obviously we want to get as many leads as possible at the lowest cost per lead. And again, that's where we go back to the corporate and we say, look, you told us your cost per lead goal was $20. We could do that, but your volume's going to be nonexistent. What is it really? What is this really worth for you? And then they do a little digging and say, well actually, $50 a lead. We'd be very profitable at still. And they’ll be like, Okay, well that triples your volume. So we're having those conversations at the top and then filtering that down low. We can't have a franchisee by franchisee conversation about their lead quality and cost and things like that.

David (20:31): Yeah. Very metrics driven. I like that. It actually reminds me of talking to another agency leader who was saying that when he gets leads in the door, inbound leads, he tries to respond to them in five minutes, which actually in the lead gen space is a pretty common practice. If you're in the mortgage space, for example, if someone submits a form on lowermybills.com, you know that that form is going to four mortgage lenders. And if you can be the first person they talk to, you stand a pretty good chance of closing the lead. So your example, the guy letting 80 leads just never be contacted, that’s just burning money basically.

Alex (21:04): But then how the struggle with a franchise is, I mean, especially over the last year is them hiring. So who's in charge of answering that phone and do they care at all? So a lot of times they don't. So they try to use some automation and you sit there and listen to these calls and it rings for 20 seconds. Then it goes to a voicemail and somebody, and I'm listening to this whole thing. And this person's like I need somebody to call me back immediately, and I don't know if they did or not, but that's just, but you paid for that traffic. And it could be a $1,000 project that just goes out the door.

We actually have been running a lot of recruiting campaigns over the last year. We never did it before, but now for a franchisee, we're doing the B2C, trying to drive whatever that is. But we're also a hiring recruiting campaign directly with them because that's expensive for what they have to pay on, on an Indeed or somebody like that. They can spend a fraction of that online and drive them directly to their recruitment, which has been a pretty interesting channel for us.

David (22:02): Yeah. We're basically at a hundred percent employment right now. So if you want a job, you can get a job. So that makes it challenging for everyone. I'll just say one more thing about the person who didn't answer the leads or even does the automated response. I always use this analogy when I talk about conversion rate optimization and how important it is. And I say like, if you have a great ad campaign and you send someone to a terrible page, it's the equivalent of having the world's best Super Bowl ad and the next morning, having people show up at your store with locks on the door that can't get in. And it is amazing to me how people don't think about the entire engagement with customers from the ad to the initial form response to the sales to the post sales. I mean, it's all connected.

Alex (22:45): The conversion rate optimization is one that always is a head scratcher for me because we offer it, we preach it, but so few of our clients want to do it. I don't understand why not. McDonald's is one of the biggest franchise systems in the world. And I've been trying to go after them. For years, I created like a personalized video to send to the Chief Digital Officer while standing in front of a McDonald's and did a voice search for coffee near me and it showed up, you know, at Starbucks down the way.

The Super Bowl commercial reminds me of it. When they launched their big breakfast all day campaign, you did a search for breakfast all day. And the first thing that showed up was IHOP saying, we've been doing this forever, and McDonald's was nowhere to be found. So you spent $50 million on the TV ad campaign, and then when the payoff happened, you were basically driving business to IHOP. I was like, why isn't the left hand talking to the right hand here. It was, as Mike Tyson liked to say, mind bottling.

David (23:38): I will say that I met the Head of Starbucks Innovation at a conference once. And I said, “You guys don't have franchises.” He goes, “That's right.” I said, “Well, if I give you a brilliant category killer idea, would you let me open the first franchise?” And he said, “Okay, sure.” I said, “All right, here's the idea. Someone walks into Starbucks. They have three choices: small, medium, and large.” I didn't get the franchise. I guess one question to quickly ask you without giving away any secret sauce, how do you get clients? What's your approach there?

Alex (24:07): Well, we go on podcasts and then we hope that somebody listens to them now.

David (24:11): This is going to be worth a billion of dollars of sales for you.

Alex (24:14): We have a marketing team internally. We produce a fair amount of content that we put out there. We have a sales team that does the old emails and LinkedIn and referrals. We get a lot of referrals. I'm sure you're very aware that the CMO today is going to be the CMO somewhere else in 18 months. And if we do a good job, they'll probably bring us with them, hopefully. We have a really good relationship with the IFA. So every year at their annual conference, we come back with a couple new clients, which is fantastic. So it's a mixture of content marketing, very account-focused marketing. We have a list of 300 franchise systems or so that we want to work with and very focused outreach to them, kind of all the ways. No real secret sauce that I'm aware of.

David (25:00): Yeah. Makes sense. I hear that from a lot of folks. You mentioned something about core values and being a steward for your clients’ money and the summer camp, which I love. Can you expand more on your core values that you have at Location3?

Alex (25:13): Yeah, absolutely. So we actually recently went through a reimagining of what those core values are. And we went through a pre-detailed process of talking with everyone in the organization. We started with throw any word on the wall of something that you think embodies somebody at Location3 that we should all strive to be, and then drill that down, and got to really five core values. And they are a combination of a lot of things. So it's a little bit wordy, but the first one is critical big-picture thinking.

So what is that franchise that we're trying to accomplish and how can we help? And how does all the various mediums that exist in the digital marketing world fit into that?

And that leads right into our second one, which is innovation. So we're not going to follow every trend. We're not going to do every new thing, but we are going to understand how things might impact and how do we do things better? Google is constantly innovating on their end in just AdWords. It's a platform that's been around forever, but they're always tweaking it, always changing it. How do we make sure that we're thinking about that as well?

The stewards of our partners is probably my favorite one. We talked about that collaborative and adaptable, both within our teams and with our clients. We really want to have a seat at the table and be discussing how do we work together on things?

And then the last one is data-driven creative. So it's very much a left brain, right brain. We need to be able to be good at data, look at data, and understand what it means, but then take it and make it actionable and be creative about what we're doing.

So those are the five core values that really define Location3 and what we look for in new partners, whether they're working with us or for us. It's an important point that you mentioned earlier about what relationships we take on. We don't want to be, and in fact, we won't be a vendor for somebody. So we say, Hey, we want you to do this one specific thing and that's it. It's very likely that will be a pass for us because it's stimulating for us. A big part of my job is to make sure that Location3 team members are excited to come to work are not burned out and feel passion for what we do.

And in my opinion, you can't do that if you're a button pusher down the line. We need to be using our brains, be excited, get this feedback, Hey, we're going to do this new thing. And it worked, and Hey, we can do this better next time. And we're driving results and you talk to the franchisee and they're like, this is amazing. My business has never been better. And that's just this great cycle, and it's fulfilling. It's rewarding.

David (27:51): I totally get the, we don't want to be a button pusher doing one thing. That makes sense. But you mentioned innovation as an example, something that's important to you. How do you far it, that out with clients? How do you ferret that out with clients? How do you figure out that they are going to be interested in innovation and they're going to align to your core values?

Alex (28:05): A lot of times in the early stages of discovery, we ask if they're open to a TSS budget, which we call a test some shit budget. You have a concept of 1% of your budget, 2% of your budget, 5% of your budget, testing something out that you've never done before. And maybe we don't even really fully understand the value of it. Should we be doing TikTok? And TikTok is probably a year old. I'm probably behind the times, probably something else now.

David (28:33): Eighty percent of my children's time is on TikTok. So yes, if you're under 16, it's very popular.

Alex (28:38): My kids are all about Snapchat right now. They tell me that TikTok is not for them. They're Snapchat. So maybe it's a geographical thing.

David (28:46): It could be a time zone thing.

Alex (28:47): Exactly. But for years, obviously, everything's like, this is the year of smart TV and digital video. And if you're constantly bringing that to the table for the client, and you're saying, Hey, people are using it. It's actually really cheap right now, and they just say, no, we don't get it, it's a little bit disheartening. It decreases your enthusiasm to try to help them grow. So how do we get that out in the beginning. There is some conversations around where do you see the future of digital marketing? Do you have an appetite to try some things out that aren't dedicated and earmarked for? You're going to spend a $1 get $5 back. We guarantee it.

David (29:22): Yeah. I think your point about like, am I guaranteed $5 for the $1 I invest. I actually, as much as I love Google for all the great things they did for digital marketing, I blame them for educating people on this notion that if you can't measure it within 15 minutes after paying for the click, you shouldn't be buying it. And I think they did that early on because they were going up against ad budgets that were being spent entirely on newspapers and TV and radio. And they were like, here's our angle. But now they've sort of trapped a lot of people in the sense of like, I'm not going to spend money on a radio ad. I can't see if that's going to work for me. And it’s become a challenge.

Alex (29:56): Well, we even see it at the franchisee level. So our first foray in any program is Google AdWords. It's very easy to understand and explain. Searching for a plumber near you. You're a plumber. You want to show up. And eventually, we'll introduce social or programmatic. And the metrics are so wildly different. Your cost per lead, if you're looking at it from those three areas, might be 5x social to AdWords and then programmatic might be 10x. And the franchisee looks at that and says, well, why am I doing this?

And then you try to get into this explanation of attribution and media mix modeling and impact and awareness. And it becomes very challenging to get them to understand that. And again, some just do it and they trust us and some challenge everything, but that's kind of the next step for us is to be able to tell that local attribution story better and better because over the next year, we want to integrate the YouTube TV buys on the local level. Hulu, you can buy locally now.

I have YouTube TV, and it still baffles me how many times they have no commercials. It just, Hey, we're taking a break. And I'm like, wow, that just means that there's inventory, and that's got to be cheap. So anything that can be bought locally and digitally, we want to have in this platform, which increases orders of magnitude, the complexity of the campaigns. And then also the explaining to the franchisee of how all these campaign works. Like if they have a $1,000 and it's 50% in search and 30% in social and 20% in retargeting and 10% in video and 5% in radio, I think I'm way over a hundred at this point, but how do you explain to them how all that works together to get to your increase in revenue? So that's an ongoing challenge, but it's going to be a fun one.

David (31:41): For sure. Are you trying to build your own technology? Is that your plan here or is this just a challenge you've identified and you're just like, I'm going to solve this somehow?

Alex (31:49): We have our own technology. The platform that we have, LOCALACT, it manages and optimizes all these campaigns, but right now it manages each one in a silo. So our opportunity, our plan for this year is to layer on a attribution model at the local level. So we've got to aggregate all these campaigns together, look at it up here, and then apply it down here. But then as more and more things come in, we'll just continue to fine tune that.

David (32:14): That's great. That's exciting. We're almost out of time. I want to ask you a couple more questions real quick. The first question, just going back to your culture, if I put one of your team members in a room and ask to describe your management style, what would they say?

Alex (32:26): That's a great question. It's sad because we've been remote for so long that there's so many new people at the company that I've met, but I don't interact with on a day to day. So unfortunately, if it's somebody that's come on board in the last six months, they'd probably like, I have no idea. I see them a couple times a month on a meeting. But if it's somebody I interact with every day, I would hope that they would say that I am very much a collaborator. I am not a dictator by any sense of the imagination. I view my job as to find really smart people and let them do their jobs. And if I have to do very little with them, that means I've done a good job.

I think collaborative would be a word that I hope comes up a lot. I also would like to say that I'm empathetic. We're really trying to create a culture of understanding in this kind of new world order. A little bit of fun mixed in there, but also demanding. I expect we have conversations. We have a lot of accountability. This needs to happen, maybe some of those words.

David (33:29): It's great to emphasize empathy. And as you said, I think it's challenging with so much of the workforce being remote that they've never even had a chance to have a coffee with you. So that's got to be challenging.

Alex (33:39): Yeah, it is. I miss it. I miss it a lot. We have an office in downtown Denver. We were going to try to really promote people coming back into the office before this new wave. We're going to still do that. I think what we're going to do is just say, Hey, this one day a week is people are going to be in the office and we're going to get pizzas. And if you want to see people and shake their hands, come on in. We've got the keg tap, we got the wine tap, we've got the espresso ready. Come in and see people, please.

David (34:06): Yeah, hopefully soon.

Alex (34:07): Yeah.

David (34:08): Do you have any favorite marketing or leadership books that you hold as your business Bibles?

Alex (34:13): The one that I keep just referencing over and over and over again over last year is this book. It's actually on my desk right now: Traction, an entrepreneurs operating system. I've been doing a lot around time management and productivity recently as we are remote and people are left to their own devices. Like how do we set them up for success? So reading a lot about, I read Harvard business review constantly and just all their great articles. And then I use Twitter a lot for a lot of my business information. I have a lot of people on there that I follow, and I have lists whether that's marketing or business that are often linking out to other articles or threads. And then of course, with all of that, I use Google Now. And so Google knows all the things that I'm reading. So they're always pushing me. It's either like productivity or best beaches in the world. Those are the two things Google, which is not too far off.

David (35:04): You have to go to a beach to take a break, to become productive.

Alex (35:07): Yeah. I think what’s the other one? Simple Habits for Complex Times is a really good one. It was referenced at a Google conference. Organizational Physics is another one that I really like.

David (35:18): That sounds the exact opposite of Simple Habits.

Alex (35:21): And then personally, I'm really big into the concept of flow. I got my masters in sports psychology, and there's a lot of that is basically what you're trying to accomplish in sports and excellence in sports is getting the state of flow and how to get into the state of flow in the business world. So I've been taking a class online about that specifically. And a lot of it is around the neurochemistry of how the brain works and what happens when you are in this state of flow. It led me to start taking tart cherry supplements at night, which has really improved my sleep. So if you have any troubles- I was waking up at like 3:00 every night for like an hour. And I started taking these tart cherry supplements, and it has natural melatonin in it. And I've been sleeping through the night for the last two months, which is great mental state during the day. So I'm a little bit all over the place, but I'm really fascinated with how the brain works and how peak performance works and how that translates to the business world.

David (36:14): I may have to try those tart cherries, and I love Traction: Get a Grip. We at 3Q we use the EOS methodology and a lot of agencies use it. It's a great methodology. Last question for you. What advice would you give to someone starting an agency today?

Alex (36:29): Choose your leadership team very carefully. I think that is the most critical thing. Don't be afraid that as you grow understanding that those people might not be the same people that need to get you to the next level. I think that that's a lesson that I've learned. People are your most important asset. The people that you surround yourself with is going to be whether you enjoy your work and you're successful at it.

David (36:53): Yeah. There's another book there, I think it's Marshall Goldsmith, What Got You Here Won't Get You There.

Alex (36:58): Yep, absolutely. It's a tough lesson to learn, but I think we all have to learn it on our own.

David (37:03): For sure. That's a whole topic we could talk about for hours. Well Alex, thank you for joining us. I really appreciate it, and a continued success with Location3.

Alex (37:13): I appreciate it. Thanks so much.