Morgan Friedman: Hello. Hello. Welcome to the latest episode of Client Horror Stories. Very excited to have with me the one and only Scott Gilbert from Ontario tonight. How are you doing?
Scott Gilbert: I am doing wonderful this evening. I am so excited to have a deep conversation with you and uncover some lovely facts about clients and consumers and dealing with difficult people, of course.
Morgan Friedman: Oh yeah, I’m excited to hear your story. First, the audience is clamoring to know what you’re drinking for this, how we start the episodes tonight, because it was part of the very detailed prerequisite list that you put forth on how to prepare for this episode.
Scott Gilbert: So I used to work for a Diageo company, which is a liquor company, and I like original cocktails. So this is old fashioned. It was prepared as correctly as the bourbon I can find up here in Canada allows, because there’s a bit of an issue getting it. But orange slice, and I made some simple syrup with demerara sugar cane, and I’ll be enjoying that with the orange zest that’s been put into it. Bourbon happens to be my favorite alcoholic drink.
Morgan Friedman: And I only have an Irish coffee today. So you win the gold star with alcohol in hand. Tell all of us about your most challenging client horror story.
Scott Gilbert: Yeah. Do I want to give a backstory, or where do we start?
Morgan Friedman: You know, I personally like what in Latin we call in medius res, jumping right into the middle of the action. So let’s go for it.
Scott Gilbert: So in this particular one, I am the client. It’s a bit of a, you know, this situation is, I cannot believe I’m in this situation. How did I find myself in this situation? No matter what I did to prevent the circumstances around me, I was left holding the bill and having to find a way out, and there was no other solution. As I said, no one is ever coming to save you. My particular situation was with the company that I have, and I was trying to do what I could to progress it forward. My business plan as a new entrepreneur was: I’ll do what I do best and outsource the rest. That philosophy and theory turned out to be a very poor decision on my part. As they say in business, experience gets the money and money gets the experience. Well, I’ve definitely learned my experience from that. What I was outsourcing, what I was too afraid to break into, was the marketing, advertising, and digital side. At that time, six-some-odd years ago, meta ads were pretty much taking off, Google, that type of thing. But even though I had some marketing experience, the interface between that and websites and coding was just enough friction. I knew just enough about it to not be confident, and so I kept outsourcing and kept running into mistakes.
Morgan Friedman: So you started a business with the philosophy do what you do best, outsource the rest, which, by the way, we’re going to circle back to at the end, because my instinct is that’s the right philosophy. So I’m excited to hear how this turns out. I like how you start at the end and build up to the counterintuitive conclusion.
Scott Gilbert: Yeah. So, to back up, that’s kind of the middle of it, or where I ended up, and then I had to find a way out with no rope in a hole, to go back to the beginning. What I was good at was business and sales, and in medicine. I spent ten years in the orthopedic industry working for some fairly prominent companies that taught me some very good skills. I bridged between medical, talking to surgeons, nurses, and hospital staff, and then the general public. That was actually my expertise: having one foot in both those realms. During that time I met my now-wife, who is a plastic surgeon, so I’ve got even more peri-medical experience. I had developed some skin issues, like pigmentation. I’m in my mid-30s and wearing a hat to hide it because I feel sheepish about the way my skin looks. So I went looking for solutions for pigmentation, and with all my medical expertise, meaning a little more than the average consumer off the street, and my network, I really struggled to find solutions. I even got fast-tracked in the Canadian system through my network to see a dermatologist, because this isn’t a life-or-limb situation for them, it’s not cancer or anything like that. I kind of got brushed through, and they just said, here’s a pamphlet, they’ll take care of you at the front door. I felt sold. I was like, I’ve been buying expensive skin care, it doesn’t do anything, I didn’t get any explanation. So out the door I went. That was me, knowing I probably had a bit of an edge to find these solutions, not finding it for myself. When my wife had graduated from her fellowship and opened up a practice, I, as her rep, said I’d help her out. She takes care of skin cancers. I said, I’ll talk to the reps, you’re going to have some sunscreen, you’ll have people with pigmentation issues who need support, I’ll bring in some support for you. It was during that, just talking to the standard medical skin care lines, which many people will know, I was given some samples, and two to three weeks later, lo and behold, my pigmentation fell off and went down the sink. I was like, okay, this really worked. It wasn’t that expensive. Why didn’t I know about it? Why couldn’t I find it? Why isn’t everybody selling this stuff? That was my epiphany, that there’s a gap here. There’s no reason why people go to a drugstore and spend money on something that doesn’t work when somewhere else down the street, probably not as heavily advertised on the market, there’s something that actually does work. It just works. My epiphany, going back to that dermatologist, is that they were literally handing me the information for the solution, but without the time to explain it, I didn’t even know I was being given a different option. That’s how I started. I thought, if there are more people like me who have issues with their skin, whether it’s acne, redness, rosacea, pigmentation, they all feel a little sheepish. Think of the makeup industry and how many billions of dollars it is. That’s how many people are looking for a solution. So I dove in headfirst and opened a med spa. I thought, I’m going to solve this business issue: why aren’t these people who have these solutions offering what clients actually require or understand as their problem or their solution? That’s when I dove in and decided I was going to solve this. I’d work on the business, the sales, I’ve got the medical background to navigate and drive the public through to the doctors or practitioners to get their services, and I figured I’d do it based on education, because that’s really the gap. Well, turns out people don’t really want to read educational material on their own. That’s where the marketing gap came in, so I decided to outsource my marketing.
That was kind of the beginning of it. I was a little short on the ability to interface with this new world of digital marketing, and I outsourced building a website, which went horribly wrong. I donated $7,000 and it went one way.
Morgan Friedman: And in the end, you donated to the website designer?
Scott Gilbert: I mean, it was so bad that I asked for a refund from the CEO, and I said, look, it’s going to cost me like $500,000 minimum to fix this, not knowing better, and he just said, oh, here you go. Then I thought, wow, he agreed to that so quickly, he gave it to me so fast, that I realized I should have asked for the whole thing. Not knowing how badly it was, I couldn’t even ask for the right number. That was my own ignorance. So the next step was, we closed for COVID.
Morgan Friedman: Wait, actually, before we get to the COVID twist in the story, let me ask a question and give you a second to drink your old fashioned. We have about a hundred episodes of Client Horror Stories, and what’s interesting about this one so far is you’re kind of on the other side of the table. Usually it’s people like, I made a website for someone for $7,000 and it was such a disaster and I did everything wrong, and in the end I even gave him back $500 of the $7,000. Usually the format is learning from the other side, but what’s interesting here is you’re able to see both sides and understand the narrative of what happened in the website case. Before we move to what happened with COVID, what do you think you did wrong as the client to make it go so badly?
Scott Gilbert: Yeah, and it’s surely ignorance. It’s always an unknown unknown, which is going to be my reason why I say don’t outsource, because you can’t outsource unless you understand how to manage it. If you don’t know the KPIs, if you don’t know what the input and output expectations are, then you have no feedback loop. You just have a guess that something should be happening on the back side, and it’s not happening, and you have to figure it out. Then when something is ultimately pushed, usually financial, like I have to make more money, I need more clients, I’ve got to do something different, we’re going to shake it up, you don’t really know where you stand because you don’t have the knowledge.
Morgan Friedman: I see. So I want to translate that into my language. Let’s say, in the example of website design, if someone who truly knows nothing about a website other than I’ve seen you use websites, they’re cool, hires someone and says, make me a website for my plastic surgery practice, whatever, that person could very reasonably assume, of course the website includes scheduling, or of course when people contact it, it goes into some sort of tracking system. But from the professional’s side, they’re like, those are completely different things, you only asked for this one small technical thing. So it’s ripe for deep misunderstandings.
Scott Gilbert: Absolutely. I know, based on the number of people I talk to now, that I ask significantly more questions, knowing what a plausible outcome could be, and then asking, does this do this, does this do that. Most people aren’t going to ask those questions. Even with everything I dug into and all the research I was doing, I still wasn’t able to see the train wrecks that were about to happen. It had to happen, I had to own it, this was all on me. Just to give you an example of how bad the website was: there was a VSL on the page, and a header on the VSL.
Morgan Friedman: Wait, what is a VSL?
Scott Gilbert: A video sales letter. I had a video sales letter, a video of walking into the clinic and some general B-roll.
Morgan Friedman: I know what you mean by a video sales letter, I just didn’t know the VSL acronym.
Scott Gilbert: Oh, there we go, that’s the nomenclature used all the time. That’s the problem right there: I’m using an acronym, and I should never use an acronym, because it’s poor communication. That’s part of the problem, I had to learn all this stuff because I didn’t know. So, for example, this video that’s going across my screen on the banner, and there were some words that were supposed to be above the video, plus a couple more things above the video. What the editor did, I think it was someone newly hired, like, here’s a good client for you, was stack all of them on top of each other, so you couldn’t read any of the words, you couldn’t watch the video at all.
Scott Gilbert: You couldn’t. I was just like, yeah.
Morgan Friedman: So technically that is over.
Scott Gilbert: It could be over. These were the kinds of things, I didn’t expect this type of communication, and there was no language barrier whatsoever. The amount of corrections I was having to put forth, weeks at a time just to get one standard thing done, I had to move on. I think the clincher was when I talked to the actual owner of the company about my problems, and all my concerns were documented because they were all via email. He was very thankful to hit the eject button and give me the minimum amount, I think he was ready to write the full ticket, but I didn’t ask for much because I didn’t know enough. It was terrible. That was my first interlude into digital marketing and websites. The next step was COVID hit.
Scott Gilbert: So I went from a clinic that was, my wife’s surgical practice had, say, sixty to a hundred and twenty people of foot traffic minimum every week, and then COVID hit and everything went virtual, including medicine. So now I didn’t have a digital footprint, I wasn’t relying on it heavily based on my business model, and now I had to completely change everything and get a business going digitally.
Morgan Friedman: You needed it.
Scott Gilbert: So the first thing I did was jump on one of the first drag-and-drop editors I could find and build a website. I think the original one was WordPress-based, and I think I used a drag-and-drop platform, I believe it was Wix. I was able to create an actual website, something more functional than the one I paid $65,000 for. So I got it going. That was step one. And the funny thing is, if I went back in time, after building the website myself I would never have run into that earlier problem, I would have ejected that digital editor in week one, knowing what was possible and what should happen when I’m paying for it, brought in a new person, and it probably would have been fine. That just shows the lack of knowledge and the mismatch of expectations.
Morgan Friedman: I see. So what you’re also saying is that with web design, there are things that are so easy and trivial, you just go into an editor and change one word, but from the outside it feels a little magical, and therefore complex and expensive, like you need a whole team of editors to do it.
Scott Gilbert: Yeah, and they did do a good job, they had an awesome onboarding person, kind of like a receptionist but not quite, more like a team lead directing traffic, like an air traffic controller, and she was phenomenal. She handled the sale and calmed the waters and did everything. So the question becomes: if I did it again without the knowledge, would I have been able to vet them any better to avoid the situation? Until I built the website myself, no. So that’s where I was. Now we’re six months, then a year, into COVID. We have a website. I spent time, I got another digital marketer for the website, this was my second digital marketer. This one wasn’t for the website, it was for advertising, because we had to advertise. We’re on the second floor, we’re not street-front, we have to pull people in. Digital media was the way to go at that point. Again, I was just too afraid to take it on myself, it looked like too many numbers, too much code, something I was too afraid to do.
So I hired this marketer, a great company, except they were used to clients like Coca-Cola, Pepsi, Freightliner, huge companies, and I was a tiny small business. I remember having a consultation with them where they were talking about the thickness of the paper my invoices should be printed on to hand to clients. I was just thinking, I just want somebody to come through the door, I’d be happy with that. What was different from the last situation was that I didn’t end up doing marketing with them, I realized I wasn’t privy to the information that flowed through my own digital media account.
Morgan Friedman: Yes.
Scott Gilbert: As opposed to being behind a black wall where I’m just writing a big check every month with no idea where it goes, it goes through their agency account, the ads are placed through them, and I’m the third party at that point.
Morgan Friedman: I see.
Scott Gilbert: It started out fine, up until things needed to be improved, and I had no data, I hadn’t learned anything, I was on the outside looking in at my own stuff. Eventually I ended it.
Morgan Friedman: By the way, I want to make two comments on that. First, it’s really important, as you learned, to never outsource your own learning, because no matter how great the agency is, you’re the one who needs to learn, individually as the founder or CEO, but once you build a team, the team needs to learn and retain the knowledge, the documentation, the processes, and outside teams, by definition, you don’t get that.
Scott Gilbert: I completely agree. Fail first, fail fast, and once you’ve learned it, then you can outsource. But you can’t outsource the learning. You’re absolutely right, that’s the crux of it all.
Morgan Friedman: Another observation, I love that detail about them talking about the thickness of the paper while you’re thinking, I don’t care about that, I just want clients. What’s interesting is I often see advice given at the wrong level of scale. People are focused on figuring out digital ads while, on the other side, they’re obsessing over tiny little details that are of no interest to anyone outside, like the thickness of the paper, when you just want foot traffic.
Scott Gilbert: Yeah, and they also just talk too much, it goes over your head. You have to unpack information at the speed the person can actually absorb it.
Morgan Friedman: Yes, and that’s such an important thing. You can say, well, I told them that, but if they don’t remember it, if you tell five clients an SOP and none of the five remember the information, then it’s not on them, you’ve missed the appropriate way to communicate that step. You have to find a better way to do it.
Scott Gilbert: That’s an important thing even with my own clients, learning as a clinic. If I hand someone a sheet of everything they’re not supposed to do before a laser treatment, don’t go in the sun, don’t use retinol, don’t put on this cream, and three out of six people who come in do one of those things anyway, that’s a repeatable pattern. It’s not the client’s fault, it’s yours, you have to change your system.
Morgan Friedman: By the way, I want to get another mini lesson from that, I can’t get over them talking about the thickness of the paper. I’m an obsessive nerd myself, and to me, the thicker the paper, the more important it is, and I live by that, so I totally get those guys. But I also get your point, you’re paying them to think about that, and it’s such a level of tiny obsessive detail that you only find in big, expensive agencies with huge budgets who obsess over tiny optimizations nobody else even thought of. So it’s interesting, when you look for an agency, you have to find one that’s not just good, but good for you. Usually the smaller a client you are for an agency, the worse you’ll be treated, so it’s usually better to go with a small agency where you’re one of their biggest clients, rather than a huge agency where you’re one of their smallest clients.
Scott Gilbert: I completely agree. If I were a hundred-million-dollar business, say the Ritz-Carlton, the thickness of the paper on my invoice would matter, because it’s in line with how they want to deliver an above-and-beyond level of service. That attention to detail is actually what they’re known for, so that would be a fine match. For me, I needed the basics more than anything else, that type of information was just clutter for me. And I want to say, this wasn’t a bad relationship, we just weren’t appropriate for each other. I had too small a budget for them, and they were too hands-on for me, their clients probably weren’t asking about their budget or didn’t even care, but for me I was thinking, what is my $7,000 a month doing? How do I fix something when it goes wrong? I had no metrics whatsoever, I didn’t know how much went to advertising, how much to their creative team, how much to some monthly stipend or PR I had no idea about. Those were all lessons I was missing. In the end, that became the end of our relationship, I had to take something over and do it myself to make sure I was going to survive. Eighteen months later I was basically starting from where I’d been eighteen months earlier, because I now knew more than I did when I hired them, and it’s because they were so good, and a friend, and related, that I was just kind of like, okay, great, that works until it doesn’t.
Morgan Friedman: By the way, you actually made a really good point five minutes ago that just clicked for me, it’s late here, but it’s also a really good point for the listeners, that you didn’t realize you should own the data, and that’s a point that’s never come up before in an episode. We’re now at about episode one hundred, and I always try to get a new lesson in every episode, and that’s such a good point. The way I usually explain it to people, I know a lot of digital marketers and run a large community of them. There are two ways to pay for digital marketing services: either you’re paying for the service itself, or you’re paying just for results, like paying per lead. If it’s the first category, morally, ethically, and usually legally, you should own all the data. If it’s the second category, usually you don’t, like, pay us $5 per name and email address, cool, you get no data, you just get the lead, and they have their own websites and sources. But when you’re hiring a full-service digital marketing agency to manage your CRM, website, all the analytics, it’s really important that you not only have access, but that it’s under your own accounts, you want it under your Google Ads account, not theirs.
Scott Gilbert: Exactly, exactly. Yeah. And again, ignorance is what cost me, because I didn’t know what to ask. It wasn’t until I sourced another person that they were like, what, you didn’t have your own pixel? What’s your information? Where’s your history? I said, I don’t know. So for almost eighteen months, I ended up with no information coming back. That was an eye-opener, the unknown unknown is always the hardest one to answer.
Morgan Friedman: Yeah. What’s great about this example is that a digital marketer happens to know a lot about it, but it’s a really subtle case, because no human being who isn’t deeply involved in the digital marketing industry would even think to ask whether a Google Analytics account is technically registered under them or under the agency. It feels like such a minor, unimportant technical detail, but that detail screws you over if you ever want to leave the agency.
Scott Gilbert: Yeah.
Morgan Friedman: Which gives them insane leverage over you.
Scott Gilbert: Yep. Now you’re stuck, or, when you find out, you’re really stuck, because now it’s, oh man, I’ve got to start all over, I’ve got to pay for all of that again. And I’ll say, these were all the good relationships I’d had along this journey with digital marketing, these were all one hundred percent my own ignorance. There wasn’t anything malicious in any of it, it was just the time it takes to learn, and you have to make the mistakes, and unfortunately these mistakes took more time and more money, but they weren’t malicious.
Morgan Friedman: By the way, I know a lot of digital marketers, I’m deep in the industry, and my take as an insider is: if they don’t give you the data and you’re paying per lead, that’s fine, they’re morally in the clear. But if you’re paying a monthly fee for digital marketing services and they’re not using your pixel and tracking through your own account, then they’re acting immorally according to the professional code of conduct of digital marketers. I think there’s something bad going on there,
Scott Gilbert: I’d say that’s stealing your proprietary client information. If the pixel is running through them and you’re paying for that traffic but not getting the benefit of it, I’d call that theft in a digital sense. And people don’t know that.
Morgan Friedman: By the way, to nerd out on it even more, often when you confront these people about this, they say, no, no, our pixel, because we have hundreds of millions of users, it gets aggregated, so we get cheaper prices for the remarketing ads. They have their justifications, with big words. My response to that is: technically it’s trivial to run two pixels, run your own, but also put one under the account under the other person’s name. They can have their own account fully intact, and technically it’s just one line of code to have one pixel go to your Facebook tracking pixel and one to theirs.
Scott Gilbert: It kind of reminds me of a credit score, if you have no credit, that’s actually worse than having bad credit. And so if everything running through your pixel was like a credit score, and then eighteen months later you wanted to take out another credit card and the bank says, sorry, you have no credit, no score whatsoever, because all your history went to somebody else, so they own it, that’s kind of the way it is. You want that historical evidence that you exist, that you have good and bad customers coming through that you can refine, so you can always get better.
Morgan Friedman: I had never thought of that metaphor before, but I love it, it’s very accurate.
Scott Gilbert: So, now we’re going to get into the good stuff, what was your epiphany? All right,
Morgan Friedman: I’m excited for the good stuff.
Scott Gilbert: It’s already been great. So now I’ve got to redo my website. COVID’s on the backside now, our government is starting to write checks everywhere, and I applied and got some money through a digital grant for Canadian businesses, for redoing a website. There were a lot of good local businesses that had started up to also take that money and do good work with it, helping small businesses. I found somebody, and I had so much fun working with these people, they were professional, they knew their stuff, they owned their mistakes. The CEO was a young woman on her way to probably a 40 Under 40 type of career. This was the best experience I’d had with outsourcing so far, especially on the media side. The relationship went really well, and they were doing some pretty good work on my website build. I still didn’t have the other side of the equation, the marketing side, to drive traffic to this brand-new website with all its bells and whistles. I asked if they knew anybody, and they said, actually, we can do that too. I thought, great, not only do I have a good relationship and one good outcome, but you also do the one thing I haven’t been able to find. So we started that, I think in the early fall, around September or October, about this time of year, actually, heading into our busiest season in aesthetics, because you can do lasers, tans are gone, running into Christmas, which is typically only about three weeks in December, and then it goes into a lull in January until people line their pockets again before spending money. So it was a great time for them to take over. We got the website going. It started out okay, at least the first month went pretty well, and then it really died off.
Scott Gilbert: I’m pretty small, so the number of times the phone rings is basically my feedback loop, is the phone ringing, what are we doing. One thing I did know was that the media was far better, they came in and did some photography, I knew they had a good media team, the scripting was far better, this was a better product overall. And yet after that first three weeks, everything started to peter off. I didn’t really know why, again, my ignorance is that I was now looking at the back end of Meta, I actually had some data, but I didn’t know how to interpret it. It seemed like the numbers were going down, but I knew what was being posted was far better, as a standard marketing measure. I did have a business degree, though digital marketing wasn’t quite what I studied back in school, but I could tell the nuts and bolts of these pieces were far better than what I’d been doing before, even with that full-service, thickness-of-the-paper level of attention, they were getting better results, even though I didn’t know what was going on. I was very confused, because certain things were great and yet the results were going down.
Scott Gilbert: So I’d call, and, again, when it’s your business, your money on the line, your house on the line, all the stresses that come with running a small business, the buck stops with you, you have to find answers, you don’t just let it be. I had a good relationship, so I gave them a bit of a longer leash. I started asking questions, and it wasn’t as if they weren’t trying, of course they’d try something, roll it out, we’d wait a week, it wouldn’t work, new change, roll it out, everything seemed to make logical sense from what I knew about marketing, but nothing was changing. Now we go through October into November, and we’re starting to run through our existing pipeline, so the phone is really going down, which is another sign. As a client in this situation, what I’d learn later is that even without marketing going wrong per se, the fact that I was still going down might have meant my product wasn’t good enough either, but I wouldn’t know that until later, that’s another lesson to pick up on.
Scott Gilbert: But I kept pressing, so I shortened the time frame between communications, and it came down to having a meeting with myself and their team every couple of days. I was still positive, I was saying, look, the creative is good, the writing is good, the phone’s doing this, the emails are doing this, there’s a disconnect somewhere, like a circuit, I’m sure if we find the right switch, we’ll get it as a team, I was very positive and professional, and we’re going to knock this out of the park. I was very positive until the second week of December. I had one week left before we closed for the break, and then we’d open back up in January, typically one of our slowest months, maybe the second slowest of the year. December the year before, with our previous marketer, had been our busiest month of the year, even in three weeks it was still our busiest month, and we’d done some really good things. This year, in the second week, my staff could have played cards on the floor of our clinic and nobody would have been disturbed walking through, because we had nobody. The phones were dead, we were literally at a dead stop.
Scott Gilbert: So I called the CEO and said, look, we’ve got to talk. We had a video conference, and I said, there’s something wrong, I know there’s something wrong. I didn’t know my metrics well enough, so my feedback loop was very delayed. It’s just, if there are no phone calls, that means the ads didn’t work, or something in the communication or publication of the advertisements wasn’t effective. I knew the media was good, I knew the creative was good, I knew the writing was good, I didn’t know any of the other aspects of the data and the components. But I said, look, this has gone on long enough. I’d been doing weekly meetings with their staff, and actually the previous week’s meeting, they said, you know what, Google isn’t working, everyone’s over on Meta now, so we’re going to shift everything over. I said, okay, I’m happy something’s been identified as not working, you’re telling me, and we’ve got a whole different channel to go to, because I think they were mostly on the Google side. So now we’re moving to Meta, and the following week they showed me the Meta numbers, they’d spent $750 on an ad and gotten zero leads.
Scott Gilbert: Zero leads, not clients, not bookings, leads, exactly zero. I thought, okay, the good side of this is we know it’s not working, throw that one out, that’s a definitive test, but okay, chop it out, let’s keep funneling down. It was the following week after that that I called this meeting with the CEO, and she got on the line with a bit of a blank look. I said, you’re going to have to come clean with me, there’s something I’m missing and I’m the only one who doesn’t know. She paused for a while, was very reluctant to let go, and then, exasperated, said: we accidentally used the wrong credit card to pay for advertisements with Google on your account, and Google has flagged your website and your account as fraudulent.
Scott Gilbert: I said, oh, that doesn’t sound good. She said, no. I said, okay, so does that mean no advertisements were allowed to go from Google to my website? She said, no. I said, how long ago did this happen? She said, about three months ago.
Scott Gilbert: So my entire busiest season, up until that point, I’d actually been having meetings two to three times a week, up from once a week, with her staff, trying to problem-solve, pulling my hair out, working so hard side by side with them, and the entire reason the data was devoid of information was that the ads actually weren’t even being published. So now my pipeline was gone.
Morgan Friedman: Wow.
Scott Gilbert: I had a couple of days left before we shut down, only to open back up in the second-slowest month of the year. I thought, if I had to start over today with a marketing agency that could actually do what needed to be done, it would probably take me three months to build back up, probably costing hundreds of thousands of dollars in loss. We were down to nothing, no run rate, no cash flow, we were completely squeezed out, because we’d been slowly drained. I asked, why wasn’t I informed about this? This is my Google account, this is my website. And she looked right at me and said, we just wanted to keep it under our hats.
Morgan Friedman: Wow.
Scott Gilbert: She let it sit there. I realized they had bridged all the website clients they’d developed over to this brand-new revenue stream, digital marketing, which they were outsourcing to a third-party company, taking the arbitrage. It was that third-party company, outsourcing to cheap labor, that had used the wrong credit card on a number of accounts. As soon as one person found out, they were going to lose their whole division, so their own ad account as an agency was apparently also frozen and mixed up in this, and they were trying to unravel it without anyone knowing, so they wouldn’t lose their entire wing of the business. It almost cost me my business, I probably would have gone under if I didn’t have good support. I don’t know who else would have, at that time, this is also just post-COVID, the first breather year we’d had. There I was sitting, and she was just like, wow.
Scott Gilbert: There was no I’m sorry, it was just, so what do you want me to do now. She didn’t care whatsoever. She just said, —
Morgan Friedman: no, I’m sorry
Scott Gilbert: And it was like, well, I want my money back that I paid you, but that doesn’t even come close to the actual cost. The opportunity cost of all that lost pipeline doesn’t come close to the marketing spend. My revenue losses were probably in the tens of thousands of dollars, and that doesn’t even account for the future losses of building it back up. The marketing cost itself, on her side, was pretty small, I did get that back, but it was touch and go, and it all came down to my ignorance of not knowing the feedback loop, and again having a good relationship and just having blind faith that, you’re like me, we’re going to do good by each other, and going along with that. I don’t think in a million years I’d have expected somebody to bury something like this for three months and not let it be known. But yeah, it almost crushed my entire business, my staff, everything else, and all the stress that goes along with that.
Morgan Friedman: Wow, incredible story. I have a couple of comments. First, as a digital marketer, it breaks my heart, and as someone who runs a digital marketing community, I’ve seen these sorts of stories from all sides before, unfortunately it’s too common. A surprising detail in that story is that the owner didn’t own the problem, given that when they made your website, they were top-notch, first-rate, and what I’ve found is that first-rate, top-notch firms tend to own their mistakes as well, so that was interesting. Related to that, I want to point out how weird business incentives can be, because they do this one thing very well, building websites, and want to make more money, so they think, we can upsell this other service and just hire two people to do it through a different firm, and earn arbitrage on the difference. That’s such a normal business model, you hear it all the time, arbitrage, business 101, that’s how you make money. But it actually fucks up people’s incentives in so many ways, because now you’re paying top dollar for something you think is top quality, when really it’s some guy making twenty-five cents an hour who’s naive and ignorant, likely without processes, protocols, or checks and balances, who makes a massive mistake that screws over your domain, effectively permanently.
Scott Gilbert: Yeah. I had to actually get it sourced out, and it was under review for a while. I was able to get it back eventually, but it took months. All of that was a black eye I had to deal with.
Morgan Friedman: Yes. So it’s often that business owners are in difficult positions, because you want to grow revenue, and building websites and hiring other people to do digital marketing feels like the most obvious thing, it’s just really, really hard to do well, in order to avoid these sorts of disasters.
Scott Gilbert: And if you think about it, they were doing it the hard way. Digital marketing at that point in time was probably pretty easy to bring in and had very high cash flow, so they were doing the hard work of building out these websites with very good technical ability, but their continuation product was probably pretty minimal, updating code on a WordPress site is a pretty low-touch service. So they wanted recurring revenue. That’s exactly right. So they had their core service, and then wanted to bridge into a recurring revenue stream.
Morgan Friedman: There’s another interesting point here, which is that because of how branding works, there’s a natural human instinct to think, company X is great at this thing, therefore they’re probably great at this other thing too, but just because Toyota is great at making cars doesn’t mean Toyota is great at making batteries, or whatever else.
Scott Gilbert: Yeah, absolutely right. And that’s exactly how trust and authority work, those are the influences described by Dr. Robert Cialdini, right? Trust and authority get built, and that becomes almost a blank check.
Morgan Friedman: Cialdini.
Scott Gilbert: Is it Chaldini or Cialdini?
Morgan Friedman: Correct, yes it is.
Scott Gilbert: You’re absolutely, yeah, it’s usually pronounced Chaldini, the ci in Italian, this is the pretentious streak in me.
No, that’s good. It’s funny, because I always say it with the hard G, I don’t know where I picked that up, because I’ve listened to all his books, so I always say it that way. He gets quoted so much, but those influences are so powerful you never think twice about them, and that’s why they’re so important to build into your marketing and sales processes.
Morgan Friedman: By the way, I also want to point out what’s interesting about the owner of the firm acting this way, saying, we didn’t tell you because we wanted to keep it under our hats. What did you think was going to happen? You’re being charged for all these months without providing the basic service and thought I wouldn’t get angry and demand all the money back?
It’s incredible to me how often I see this pattern, where when there’s a problem, people think it’s better to keep it under their hat for as long as possible, as opposed to dealing with it directly and strongly.
Scott Gilbert: If they had owned it, I would have been their biggest supporter until the day we died. Honestly, if they’d said, we messed up, this is a massive mistake, as a human, I’d understand that the outcome was still massive, but this was really just a small human error, somebody used the wrong credit card, wasn’t responsible enough or too far removed from the actual problem, and it was just a human error. But the fact that they didn’t own it, and it prolonged for three months, I probably wouldn’t have found out, I probably would have just closed the doors, if I hadn’t p ressed the way I did, if I wasn’t the kind of person who asks so many questions. I just wanted to problem-solve it, I was saying, I can get through this, even through your team, I will get your team to help me find the solution. I was not willing to let it go. That’s the only reason I think I broke through, that’s the only reason I got that call, otherwise I probably would have been buried along with my company.
Morgan Friedman: So there’s a lesson on the power of persistence as well.
Scott Gilbert: And I think that’s the underlying truth of all entrepreneurship, you just don’t stop. That’s what they say about pursuing your passions, and it’s not because you want to do something enjoyable, it’s because you want to do something where, when you no longer want to keep going, you keep going, and you have to appreciate that so much. I just refused to die, and I think that’s how I kept going. And the funny thing is, this is a three-and-a-half-year journey at this point, I still didn’t know how to market. I had a better business, that’s right, but I still had all these lessons to learn.
Scott Gilbert: So there’s the lesson right there, the reason I kept running into the same problem is because I was outsourcing my lessons, to your earlier point. When I say don’t outsource, it’s because you have to learn before you can manage. And I want everyone to fail, and the next phase of my business is where everything changed, where I took on all responsibility and the buck stopped with me for everything. I realized that outsourcing, and doing what I do best, staying within my comfort zone, was not going to get my company, my employees, and everything else where they needed to be. My entire goal was to solve the business problem for this industry that wasn’t presenting the right problems and solutions to clients, so they could think, oh, you can help me, that was my whole goal. And here I was, I still didn’t know how to talk to attract a client, I still hadn’t learned the one thing, actually, I’d reversed into the exact thing I’d set out to solve: short-term selling of a treatment, short-term marketing, even outsourcing to a marketing company that would take your menu and say, I’ll just optimize what your menu is, when the problem is nobody knows what the Clear and Brilliant or the Morpheus8 or whatever it may be even is, they don’t know what these things are, so they can’t fix the problem with pigmentation, redness, acne scars. I still hadn’t solved it, I don’t even think I’d cracked it at all.
Scott Gilbert: So the next phase was: it’s on me. I did find somebody who was able to execute my plan and work with me until I was trained enough to take it over. The end result was not only did we scale, but I also agreed with my wife that at the end of five years, when our lease was up, if we wanted a different outcome, we’d do it, we were deciding that day and working toward that goal. At that point I’d taken over the reins of all my marketing, not just marketing, I took on a new CRM and built it all out from scratch personally. I created all the lead magnets personally and put all the messaging into the CRM. I was literally waking up at four in the morning, there with my dog in bed, working until my kids were up, building it all out, then going to work, putting the kids to bed, then working until ten or eleven at night, and repeating that for about three months. In December I took over and launched my own marketing as the last phase of the business, and the outcome was going from marketing treatments broadly to taking one package of treatments that solved the most common problem for the person who comes through our door, the person we treat best, that we get the best outcome for, and reverse-engineering how to bring that person in, get them a result, and blow their socks off so much that they’d send me a referral.
Scott Gilbert: So instead of marketing to everyone, I decided to market to one type of person, and become so good at bringing them in the door, converting the sale, treating them, and delivering communication in ways that hadn’t been done before, solving every frequently asked question before it even came up, so that by the time they finished, something that probably any other skin clinic could offer, they were blown away. My cost of acquisition, from doing the click-to-close process myself, went from almost $498 marketing cost per acquisition, not even including human resource costs, down to $19. In this industry, that’s almost unheard of, and that’s because I was getting a referral upfront and a referral on the back end, that was the dedication of marketing through sales, through fulfillment, back to referral, and it just kept cycling through. I was able to do that before we closed the doors, and we literally doubled our business in the five months that I ran marketing and sales myself. We doubled our business, and we exited at the end of our five years. That’s what I have now to help people, the system we created, so other clinics don’t keep running the same rat race the industry tends to run.
Morgan Friedman: Wow, I love the story on multiple levels. As a digital marketer, this is a particularly painful, possibly even emotional story for me, having seen variations of it from all sides. I love your lesson that no one is ever going to solve your problems as well as you do.
Scott Gilbert: Exactly,
Morgan Friedman: And you just need to dive into the problems wherever they are. There are lots of variations of that, when you hire professional services firms, no matter how expensive and good they are, they’ll never care as much as you do. You could hire the most amazing lawyer in the world, but even that lawyer, you get him for an hour a week or whatever, he’s never going to care and obsess the way you would, putting in the time, energy, and love.
Scott Gilbert: And I think the lessons I took were, could I hire out marketing right now and be successful? Yes, because I understand what they have to do, what they’re trying to accomplish, what information they need from me to do their job, but also the gaps that happen between the sales handoff and lead nurture, a common issue for clients who get blamed, it’s your fault you’re not bringing clients in, when half the problem was that my product wasn’t good enough. When I owned the communication from click to close, my feedback loop was my sales, whatever came up in my sales conversations was what I ended up using in my marketing, using my clients’ own words for their problems. But when I outsourced it from the beginning, none of that ever made it back to the marketing, they just took my menu and made it into a nice-looking menu, then marketed the menu. That was a huge epiphany, the congruency of, someone answers an ad for pigmentation, and then in the phone call afterward, we say, so, Jane Smith, you’re coming in for pigmentation, we’re really good at taking care of that, and then layering in all of Cialdini’s influences, purposely creating a sales process, so my confirmation text message also included the five-star reviews, not leaving that to chance: did they see our five-star reviews, do they know we have a plastic surgeon here, do they know we have this, force-feeding all those trust, authority, and social proof pieces all the way through. I’ll give a nod, he just launched his own new book, but you know, this is from his very first Gym Launch book, which most people don’t even know he wrote, I took the idea of walking into every single consult with a bottle of Pellegrino, and I’d crack it open and pour the glass and set it right beside them, because I wanted that reciprocity to be felt. My entire system was dedicated to just one type of person, and that’s really how the efficiencies went up so much once we stopped marketing to everyone and instead brought the right person through.
Scott Gilbert: But all of those efficiencies only happened by owning the entire pipeline. If I outsourced it now, I’d know exactly what to feed back and exactly what to ask for. But until I did it myself, I didn’t understand what Meta was trying to do, what Google was trying to do, what the email nurturing was supposed to provoke, or what options were even available, until I built out the CRM myself, I didn’t even know it had those options, that I could make those phone calls or create that content. It’s really about walking a mile in their shoes, that’s how I learned. I probably would have been one of the worst clients, because I asked so many people, but it’s because my ignorance was, how do I get around this without actually doing it myself? And you don’t, you’ve got to do it. Then you can work really well with people once you’ve actually jumped through the hoops yourself.
Morgan Friedman: Powerful lessons. Your marketing conclusions are amazing, and as an experienced and successful digital marketer, completely on point. My way of making that same point in a simplified way to my clients is that every little thing in the product is an opportunity for marketing, and you have to obsess over every little thing, you have no idea about the little things I’ve obsessed over, in the same vein as what you’re talking about. I hide Easter eggs everywhere, I hide Easter eggs in almost every terms and conditions, even the boring legalistic language. Yeah. I once had a company I was doing marketing for and growing, they had custom software, and part of how it worked was when a user was created, it would auto-generate them a password and email it to them, like, here’s your auto-generated password: aq9876. I came up with this idea, actually thought of it in the shower one night, what if, instead of the password just being random letters and numbers, we used the names of models, so it would be something like ChristineBrinkley8976, just making it funny. Oh my god, that’s hysterical, I can’t believe they did that, that literally the random password generation is an opportunity to charm your clients.
Scott Gilbert: That’s exactly it, there’s so much stuff that’s right there.
Morgan Friedman: Exactly, Every tiny little interaction, even the little things you aren’t thinking about.
Scott Gilbert: We had it in ours for sales too, one of the common things in medical is giving clients a sheet of medical jargon to take care of before their treatment, as I mentioned earlier. It was obvious that it was too much information at the wrong time, and they’d lose the piece of paper before they even got to the car. So I’d send a text-based version, and then a PDF with pictures, pictures of all the problems, someone who’s pregnant, someone with a sunburn, all these different scenarios, a completely different format. The next day they’d get a video with audio covering the same things, because some people learn by text, some by image, some by audio and video. Every piece of communication we sent from then on covered all three of those formats, and because of the CRM, you can do some fun things with that. Half the people we talked to had already purchased thousands of dollars in skincare and weren’t using it, because it was too complicated, they didn’t know what to do, and by the time they got home they’d forgotten what they’d been told.
Scott Gilbert: Because we streamlined the delivery of a certain package of products, I assigned a bare-minimum routine for each person, took pictures of the bottle, pictures of how much product to use in someone’s hand, and we programmed the CRM so that that night they’d get a text reminder: you’re only supposed to put this one on tonight, this is how much, this is what it looks like. The next morning they’d get the same thing, and for seven days it followed a certain pattern, and on day seven it switched over to their full skincare routine. We changed it by holding their hands through it, and when we talked to them the next time, they were just blown away that we’d done all this, and it cost nothing, it was a one-time setup expense, and it was such a different delivery of execution, and it’s just because we cared enough to make it different. We cared enough to listen and solve the problem we were facing, that we had to cancel treatments because people weren’t following instructions, and asked, how can we do this differently? These are the fun things you can do, and it’s kind of limitless once you realize what’s possible, you can create these nuanced ways of delivering information once you understand there’s a gap in the current average of your industry.
Morgan Friedman: I love it, 100 percent. And your last point, that it’s literally limitless in the ways you can charm your clients, I’ve never heard anyone other than me put funny names into passwords and things like that, which I’ve invented, there are endless opportunities for charming people. I love it.
Scott Gilbert: And relating to them, making it fun, making the boring stuff fun.
Morgan Friedman: Yeah.
Scott Gilbert: And there are lots of variations of that too, also listening to them, and as you point out, it gets endlessly complex, and it’s interesting because it’s not just listening to them, it’s listening to them and making them feel like they were listened to.
Morgan Friedman: Oh man, perception is everything, isn’t it? That’s really what it is, they have to understand that.
Scott Gilbert: Yeah.
Morgan Friedman: I’ve known too many companies that say, no, nko, we actually really incorporate feedback, we have analysis of all the feedback calls, and that goes into our system to create tickets for the software, which are then prioritized by how many people asked for it. I’m like, do the people know you’re doing that? No, automatic analysis, no. It’s not just about listening to them, it’s about them knowing you listened to them. There are all these variations of it, it’s fun to figure it out, that’s why I like being a marketer.
Scott Gilbert: Yeah, oh, I completely agree. And it’s funny, because an industry gets so ingrained with standardized processes that it’s easy to disrupt, it’s right there. You expect the same thing every time you walk into a restaurant, the same greeting, the same process. In my industry it was exactly the same, the consultation, the perceived value, it’s like, oh, it’s free, everyone offers a free consultation, but it has no inherent value if it’s always considered free. If you deliver it differently, say you sell them on the package and then say, here’s a $200 consultation with a doctor specialist included, now your price appears inflated, but it seems discounted, as opposed to just discounting from the standard price. You’re able to communicate the perception of all those value points, the personalized skin care, all of it. I work with doctors who just do these standard things and give it away, and if you give it away without them understanding what they got, you’re wasting your time. But inversely, you can still give something away for free if you’ve communicated the value of what you’re giving away, and it’s a completely different outcome and response from the client.
Morgan Friedman: 1000 percent. To wrap up, two things, first, as a fun example of every little thing being marketing, I’ll wrap it back to the very beginning of our call, when I asked you what you were drinking, and you made a comment along the lines of, oh yeah, your scheduling form made it clear that we needed to bring a drink. I want to point out that my scheduling form for the podcast, as you noticed, has these weird, fun questions, what kind of conversations you like to have, what drink you like, and so on, no other podcast in the universe is anything like that. Even the scheduling form, which for everyone else is just, what time are you available, what’s your email address, the boring stuff, is an opportunity, I wanted to market to you at that point that this was going to be a different sort of podcast, and I love that you noticed that and brought a drink. Most people ignore that and don’t bring a drink.
Scott Gilbert: I do bring a drink, but in Canada we don’t have bourbon right now because of the tariff crisis between our borders, so I had to go search out and find an appropriate one just so I could do this, because of that information you mentioned on the call, it was in the instructions, and I believe it was brought up again in the reminders for the call.
Morgan Friedman: Yeah, exactly.
Scott Gilbert: Congruency all the way through, delivered the message as to why I executed it the way I did, and people miss that obvious opportunity. You had my attention and delivered something important.
Morgan Friedman: Ten thousand percent, so it’s a great example of that. Scott, it’s been wonderful having you, so many interesting lessons, a different perspective on turning disasters around, I love it. Thank you for your time.
Scott Gilbert: I really appreciate the time, Morgan. I hope your audience gets something out of it that they can use to turn around their own nightmare clients, as I probably was. But I had this opportunity, and it’s been a real pleasure to chat with you, and I hope to do it again. I loved it.
Morgan Friedman: And everyone who’s watching, we hope you’ve made it to the end, and if so, we hope you’ve enjoyed it as much as we did. Until next time.
