Episode 31: We Kind of Live or Die by Google

In this week’s conversation, Karen Clark Cole, Paul Downs, and Laura Zander talk about their approaches to digital marketing. After years of relying on Google AdWords as his only form of marketing, Paul tells us, he stopped his $12,000-a-month spend a few years ago—relying instead on organic traffic. What happened when he stopped? His sales actually went up. But now, with fewer people looking to buy high-end boardroom tables because of the crisis, he’s considering shifting tactics again: “I'm wondering whether I should sort of go on the offensive,” he says, “and try to increase my marketing in the face of these declines in sales, or whether nothing I do would make any difference at this point.” Plus: Is it better to manage your own digital marketing or to hire a specialist? Our panelists disagree.

Episode 31: We Kind of Live or Die by Google

Guests:

Karen Clark Cole is co-founder and CEO of Blink.

Paul Downs is founder of Paul Downs Cabinetmakers.

Laura Zander is co-founder and CEO of Jimmy Beans Wool.

Producer:

Jess Thoubboron is founder of Blank Word Productions.

Episode Highlights:

Paul Downs: “I’m wondering whether I should sort of go on the offensive and try to increase my marketing in the face of these declines in sales—or whether nothing I do would make any difference at this point.”

Paul Downs: “I’ve spent more than a million dollars at Google, and the only unsolicited interaction I ever had with them was they sent me a travel mug once.”

Karen Clark Cole: “I’m the polar opposite to both Paul and Laura. I prefer to do nothing myself and to outsource everything.”

Full Episode Transcript:

Loren Feldman:
Karen, we haven’t talked to you in a while. Welcome back, what’s been going on?

Karen Clark Cole:
I’ve missed you guys. Let’s see, we’re looking at the numbers, and for me, I’m trying to get a bigger sense of how COVID has impacted us and how it will impact us. We’re largely trying to create crystal balls.

Loren Feldman:
Have you learned anything? Have you figured it out? Where are we going?

Karen Clark Cole:
My feeling is that, for us anyway, in the services business, we’re going to have a busy second half of the year. It’s becoming the new normal of how to adjust and how to deal with it and how to go on living our lives. Certainly, that’s the way it is where I live in Seattle. Now, everybody is out, and I’ve got 20 masks for each outfit, and we embrace it. You just wear them. Going into the office used to be, “Well, I’m gonna wait until we don’t have to wear masks.” That was the general feeling. But now it’s like, “Oh no, we’re dying to get back and see some other people. We’re gonna wear a mask. We don’t care. It’s normal now.”

Loren Feldman:
Have you fully opened up your office again?

Karen Clark Cole:
In Seattle, we are open. In our California offices, we’re still not allowed.

Loren Feldman:
Is everybody coming in?

Karen Clark Cole:
No. We’re still encouraging all employees across the country to work from home as much and whenever possible until further notice. We’re thinking that’s the end of the year at least. But we have some in-person research that needs to happen, and our clients want to get going on that. We opened the office in Seattle as soon as we were allowed to by the governor, which was the beginning of July, and so that’s still limited. There are only people in the office who really want to be there or who need to be there for their work.

Loren Feldman:
Do you have any thoughts, long-term, on how you might reconfigure things? Or are you still figuring it out?

Karen Clark Cole:
Yeah, we’re trying to be creative. It’s an incredible global experiment that we’ve been able to participate in, which is, “Can we get work done from anywhere?” And the answer is, for us, yes, absolutely. Is it what we want and like? Not necessarily, no.

We’re hearing over and over and over that our employees, they still want to come together. They miss each other. We’re looking at changing some of our office space to be more open-type meeting rooms, so having whiteboards as dividers instead of walls, so there still is free moving space if people feel more comfortable coming in there. And then we’re looking at other ways to use our space. We’re renting part of our space out to a client who needs it, which we wouldn’t normally have done.

Laura Zander:
I have an idea.

Karen Clark Cole:
Yeah, what?

Laura Zander:
I think you need some really nice boardroom tables.

Karen Clark Cole:
Laura, are you selling?

Loren Feldman:
Paul is.

Paul Downs:
She volunteered.

Loren Feldman:
That’s a good segue, Laura. Paul, last week, you told us that you were seeing the initial signs of a collapse of your sales. Anything new this week?

Paul Downs:
Well, yeah, I started to actually trim costs. If you think about our whole company as a series of different functions and a job passes through these different functions, when the work starts to dry up from a drop in sales, then the project managers and engineers are sort of at the head of the snake and the shop floors can still be busy working on stuff we’ve already committed to. I spoke to my two project managers this morning about moving one to part-time and reducing the salary of the other.

Everybody has been warned for weeks and months now that, in our particular business, it’s unlikely to be thriving for a while. I’ve shown them the numbers and told them it was coming, and today was the day. It seemed it wasn’t a surprise to either of these people, and they took it very well. So what’s the lesson? I always try to give people a view of what I see on the horizon, and then keep them updated as it moves closer, so that if it’s good news or bad news, at least it’s not a surprise. I think that people appreciate that, maybe? Or maybe they go, and as soon as they leave my office, then they have a very different reaction. I don’t really know.

Karen Clark Cole:
Paul, do you find people worry more than they should, though? That’s what I found is, that balance is really delicate of giving people the right amount of information so they’re not too worried about it.

Paul Downs:
I don’t know the answer of exactly where the line is. My bias has always been to give people more information and try to be more transparent, and I think I’m probably one of the most transparent business owners you’ll ever meet. I haven’t experienced any downside of that with the people I’ve had working for me. I think that I would not recommend that everybody do this for every employee, because it’s a big world out there, and there are different businesses and different situations. Maybe it’s not the right choice, but it works for me and my company.

Loren Feldman:
You have any sense that what you did today is rippling through the office, that others are worried that more shoes are about to drop?

Paul Downs:
Probably, and we’re going to be having a meeting that we normally have on Friday afternoons with the project managers, the engineers, and the shop floor managers, and I’m going to tell them at that meeting. It’s going to be a topic of discussion, because it’s going to change how the team works. One of the team members is not going to be here as often and we’re going to reconfigure what she does, so that she’s doing a slightly different job.

You can’t hide it anyway, so why not just get it out there and talk about it? We’ll see how It goes. Everybody knows that there’s a problem in this world right now. It’s not our fault, but we do have to react to it. I’ve made clear to all of them that the company has to survive, and that’s the best chance for all of us. They’ll connect the dots.

Loren Feldman:
I want to move on to our main topic, which is a topic—Paul and Laura—you guys brought up last week, just as I closed the podcast, one of the worst things a human being can do. I don’t know why you did it to me.

Laura Zander:
Really, Loren? That’s the worst?

Loren Feldman:
But I’m gonna give you another chance!

Paul Downs:
I think Loren leads a very sheltered life.

Loren Feldman:
We all know that’s true. You guys started a really interesting conversation about digital marketing. Paul, I think you started by talking about some issues that you’re considering for your business.

Paul Downs:
Well, we kind of live or die by Google. I have had a long relationship with Google over the years. And I’m wondering whether I should sort of go on the offensive and try to increase my marketing in the face of these declines in sales, or whether nothing I do would make any difference at this point, and it’s just a question of waiting it out.

Loren Feldman:
Which way are you leaning?

Paul Downs:
I’m not leaning yet. I’m still in the looking phase. I spent some time just doing Google searches on various things over the last few days. I do know, or I’m noticing, that what appears on the screen is really, really different than it did in my memory a few years ago or, again in my memory, when we started off with Google in 2004.

What I saw in the search strings that matter to me, which revolve around boardroom tables and custom boardroom tables, is a lot more ad presence before you get to any organic results, and then also a cluttering of the page with shopping results, image results. I mean, it was literally a scroll down before you saw a single thing that was what you would call a traditional organic result. That makes me think, “Oh, what do I do here?” Because we have, over the years, both bought AdWords—I did that for a long time and spent a lot of money on it—and then shifted to a strategy that was mainly about maintaining organic presence and not heavy on AdWords for the last three years.

Loren Feldman:
How did you do that? How did you go about maintaining an organic presence?

Paul Downs:
Well, we’ve always had an organic presence. That’s one of the main things that I think is an underappreciated lesson of digital marketing, is that the organic search results favor the incumbents heavily—the person who was No. 1 last week and last year in any given search string is likely to still be there unless they really screw it up. Because they got to be No. 1 probably through A) a combination of luck, but B) also being a pretty good search result. The concept that you can just knock that person out of position strikes me as being questionable, although many digital marketing firms will promise that you will move from whatever obscurity you’re in today up into a good position. I just don’t see that as being feasible in most cases.

Loren Feldman:
Are you saying that you pretty much just stopped buying AdWords and just started relying on the SEO that you’ve built up over the years?

Paul Downs:
I did. I believe it was the beginning of 2018. From 2004 until 2018, I had monthly AdWord budgets that would run between $10,000 and $12,000 a month. I gave Google a lot more money over those years than I ever made myself. I decided to just stop it and see what would happen. Because even though 12 grand a month sounds like a lot of money, to Google it’s literally nothing. They don’t have anything other than their robots managing my account. It’s not like there’s some person who I call, and we chat about my ad spend. No, that never happens. I know a couple of business owners who spend 10 times what I do every month, and they don’t have any personal interactions either.

Laura Zander:
Sorry, Paul, why is that? Why aren’t you talking to an account manager there on a monthly basis?

Paul Downs:
I’ve never met an account manager at Google, never heard from Google. I’ve spent more than a million dollars at Google, and the only unsolicited interaction I ever had with them was they sent me a travel mug once.

Laura Zander:
But you’ve never reached out to them either and just said, “Hey, I want somebody to talk to once a month to help me review my results”?

Paul Downs:
I did have one interaction in 2012 that was prompted by a column I wrote in The Times, and I signed an NDA about it, so I’m probably about to get sued or something. I went to Google headquarters, spent a day with their team, and came away with an impression of them that was pretty negative, to be frank—people who were focused on the sort of automatic aspects of Google and had no feeling whatsoever for the humans side of any kind of commercial interaction.

I could talk about this at length, but let’s just say that if I was spending that amount of money at an airline or casino or any other business, they would have assigned someone to me, and that person’s job would be to keep me happy. The fact that they never did that—and this may be naive—but I view Google as being sort of like the volcano god. They’re there, and you have to deal with them. You don’t have any rules for how to deal with them. You’ve just got to hope for the best and sacrifice in some way you hope is acceptable. Do things that you believe are going to work, but you don’t actually get any information about whether it’s working or not, other than whatever results you have.

Loren Feldman:
Well, Laura, tell us. Have you done what you just suggested? How has that worked for you?

Laura Zander:
That hasn’t been our experience at all.

Paul Downs:
Good, I’m about to learn something. This will be great.

Loren Feldman:
Tell us about it.

Laura Zander:
Well, I haven’t talked to an account manager directly in years, but our social media manager has a monthly call. My husband, who set up all the AdWords and stuff, he used to have a call constantly. I’m trying to think. We used to spend about $25,000 a month, and now we’re down to about $12,000, but we’re getting better results than we did at $25,000 because of the calls that we’re having.

The flip side to what you’re saying is, I understand the machine has no feelings and is a big robotic entity. But a lot of these account managers are trying to get promoted. They’re at the beginning of their careers, and they’re hungry, and they want to have really good results and be really helpful.

Paul Downs:
When did you start doing that?

Laura Zander:
2007.

Paul Downs:
And that’s when you were assigned an account manager?

Laura Zander:
I don’t remember exactly, I’m sure from the very beginning. I mean, it sounds like I have a different… I’m not eastern Pennsylvania. I’m Southern, which means that if I want something, I’m just going to go get it. I didn’t wait. We don’t wait for somebody to assign somebody. We call and say, “Hey, what do you got that I can have?” That’s kind of our whole approach.

Paul Downs:
Who did you call?

Laura Zander:
Google.

Paul Downs:
What phone number?

Loren Feldman:
Mr. Google.

Laura Zander:
Yeah, I called Sergey.

Paul Downs:
How did you find Sergey?

Laura Zander:
You can…

Karen Clark Cole:
The internet.

Laura Zander:
Google. I Googled him. I would have to dig in and look and see exactly, but we probably just called 10 different numbers until we got somebody.

Loren Feldman:
There’s an AdWords department. I’m sure they have a small business division. Laura, can you tell us a little about those conversations? What information were you looking for from them? What did they tell you? How did they help you refine your search? Did they really help you save money?

Laura Zander:
Totally. Absolutely. I’ll just say that it’s the same thing with Facebook, and I know that Facebook is not your audience, Paul, in terms of trying to sell, but they have the same thing. If you spend enough money, they invite you, like you said. They invite you to trainings. You have multiple account managers. You’ve got all kinds of stuff.

But you have to push for it. You have to pitch yourself—that you’re important, that you could grow, or whatever it is. From the Google standpoint—and again, I’ve only been on one or two of these calls myself—my team has been on them, but it’s just how to adjust the words and what—

Loren Feldman:
Picking keywords?

Laura Zander:
Yeah, it’s picking keywords, picking budgets, looking at the trends, looking at how to use the tools. They have so many tools so that it can be self-service. I spent a lot more time on the Facebook side of it, and Doug spent more time on the Google side of it. But they all have trainings. You can get certified in Google AdWords, and so you go through that process and become certified yourself, and then you’ve got somebody that you can ask.

I don’t have the super specifics about it, other than our manager, Alex, she reports every month. She’s just like, “Holy cow, our ROI this month was blah, blah, blah, which is just as much as it was the previous month.” I know that they have been very, very helpful in helping us trim our budget on the stuff that’s not working.

In our case, selling yarn, we’ve always been better off putting more budget toward very specific search terms vs. really general search terms. We don’t spend much money on “yarn” or “how to knit.” We spend money on “Madelinetosh vintage yarn,” because that’s a very specific thing. They’ve really helped us with the strategy of that—of when to be specific and when to be generic—and then help give you the data to support that and make those decisions.

Loren Feldman:
Why would you spend money on a brand name like that? Isn’t your client likely to find you—if they’re searching by “Madelinetosh,” aren’t they likely to find you anyway?

Laura Zander:
Sure, but I mean, aren’t they more likely to remember you if you show up a few times?

Loren Feldman:
I see.

Laura Zander:
You know, it’s just brand impressions.

Paul Downs:
Well, let me react to this. My own personality is that I always like to do everything myself. Like if you dropped me in the cockpit of a 747, I’d start pushing buttons and seeing if I could get the thing to fly. That might have just been a bad strategy for this world. But we’ve been doing Google for a long time, and I don’t recall ever having any approach. I mean, there were a few times we would get an email, and it’d be like, “Click to see this or that,” and it always struck me as being incredibly generic advice. I have been on the phone with Google people, because they would call. There was a period of time, probably about 2010, when they did some outreach, and they would have somebody call, and that person never knew as much about the interface as I did. I never got any sense… nothing about my interactions, which just clearly went down a different path than your interactions, ever led me to think that there was any point in asking for help.

Laura Zander:
Well, okay, so let me ask you—that totally makes sense, and when we were talking offline last week, you had asked, “Should I hire a digital strategist?” And I’m like, “No, Paul. You’re smart. You’re obviously very intelligent, in most ways, so I think you could learn it yourself.” There’s no point in paying somebody to figure this out.

However, what I mean by that is, learn it yourself, like you said, and then we use our Google person as a coach. And again, same thing with Facebook, we’ve definitely had some people who don’t have the highest IQs, and they don’t really get it. They haven’t been super helpful.

You just have to keep pushing and deal with it and maybe ask for somebody else. Or you have to suffer my experience, because with the Facebook side of it, which is what I know better than the Google side of it, as Loren will tell you, years ago, I spent nine months just studying, learning how to fly that 737. And so I got to a point where their CMO was like, “God, you know more than most heads of agencies.” That said, I still would talk to whoever my Facebook adviser was, and there was always just one little thing that they would bring up in our 30-minute conversation that I didn’t know, or that would change the way I thought about things, especially because stuff is changing so fast.

The way I think of it is, one, as long as I can get one little thing out of it that rounds out my knowledge, and two, in your world, this is sales, right? When you’re selling a table, just because the first person who you talk to at a company maybe doesn’t seem like they’re gonna want to buy it, it doesn’t mean you stop talking to them. You keep pushing. You keep pushing it until you find—if you know it’s a good idea—until you find that one person who is going to make a difference. That’s my experience. How I’ve had to approach it with these large companies is that eventually, you will find somebody. It’s just like hiring. It just takes a while. Sometimes you have to work through some duds.

Paul Downs:
That’s great advice. I’ll tell you what, Loren, here’s the project. Let’s see over the next few months whether I can actually make headway from where I am today and become Google’s pal and get some useful help. If it happens, that could change my life. Thank you, that could be one of the most valuable things I’ve heard in months.

Laura Zander:
Am I gonna get a boardroom table?

Loren Feldman:
I want to hear from Karen. Correct me if I’m wrong, but I think you’ve told us in the past that Google is your primary means of marketing Blink. Any thoughts on this back and forth, especially the idea of whether it’s best to do it yourself or to go out and hire a guru?

Karen Clark Cole:
I’m the polar opposite to both Paul and Laura. I prefer to do nothing myself and to outsource everything. I’ve always felt that way. I love to bring in the experts and have people who are very specific in one niche. We, over the years, had various people in house—my business partner in particular was our internal SEO guru, and he would be buying AdWords and constantly monitoring them and spending a pile of money. Then we sort of decided, “Okay, we’ve got to take marketing more seriously.” And we built up an internal marketing team, but the problem is, they never got the support that they needed within the company to be able to be really effective.

So in the last year, we changed our whole approach to the thing, and we just decided to outsource the whole department, minus really one person to coordinate everything that we’re doing externally. We farmed out everything, and so we have one firm for our SEO strategy, another one for our content creation—and all of this for us falls under sales and marketing, which is pretty standard.

And that, for us, it’s absolutely the way to go. Because now, all of a sudden, we don’t have a couple of people who are limited in budget and bandwidth and all the rest of it. Now we have these armies of people because they’re small consulting firms, and in some cases bigger, but they are so good at what they do that they come in, and it’s their job to be up to speed on how Google changes by the minute.

Loren Feldman:
Let me ask you about that, Karen, because I’ve heard so many nightmarish stories about people trying to hire the right firm. Everybody pretends or claims to be a guru. Everybody promises to get you to the top of the results. But I’ve heard one nightmare after another. It sounds like you found the right people. How’d you do it?

Karen Clark Cole:
Well, it’s like hiring, right? You don’t always get it right the first time, but you have to be very careful and do a lot of vetting, a lot of interviewing, and know what you want, and trust the people. It comes down to relationships, in the end.

Loren Feldman:
Did you figure out the right question to ask? How do you find out if somebody really is a guru?

Laura Zander:
Well, can I just say: it comes down to relationships, but it also comes down to money.

Karen Clark Cole:
But Laura, it’s way cheaper for us to do this than to hire internally. We know exactly how we looked at it. It’s like, okay, the salaries of the two people who we were paying, we take those salaries and that’s all of a sudden our budget for these external firms. We halved it, and yet we’re getting three or four times the value because these teams, they’re efficient, they’re optimized, they know it. They’re measured on these results, and if they’re no good, then we’ll fire them, for sure.

Paul Downs:
So, I have a question: what percentage of your revenues do you devote to this?

Karen Clark Cole:
Ten percent.

Paul Downs:
Ten percent, just on the marketing.

Karen Clark Cole:
Yeah, not very much.

Paul Downs:
Ten percent of your revenue is not very much to you?

Laura Zander:
Exactly.

Paul Downs:
How much is that?

Karen Clark Cole:
Sales and marketing combined, that’s what I’m talking about.

Paul Downs:
Okay, that’s different. I’m asking just the marketing piece, just what you’re talking about here. I’m just curious because I know how much I’m spending on it.

Karen Clark Cole:
What I’m talking about here though is, it’s mixed in, because we have some sales training, that’s part of it. We see it as really connected.

Paul Downs:
But this does not include the salaries you pay or whatever you pay to your actual salespeople?

Karen Clark Cole:
Correct.

Paul Downs:
Ten percent.

Karen Clark Cole:
Well, yeah. Now you’re making me question that, but it’s roughly in that order of magnitude.

Paul Downs:
Okay, how many people do you have?

Karen Clark Cole:
About 140.

Paul Downs:
One hundred forty people. You’re a $15 million a year company and you’re spending 10 percent on that.

Karen Clark Cole:
We’re at 30 million.

Paul Downs:
Okay, you’re spending 3 million bucks a year on that, which is fine. But you’re not in the regular world with the rest of us here.

Loren Feldman:
Why is that, Paul?

Laura Zander:
That’s my point, yeah.

Paul Downs:
Why is that? She’s spending 78 percent of my revenue on that. So, you know, I’m in a world where—

Karen Clark Cole:
But we’re talking percentages. We’re not talking dollars here, right? We’re talking about percentages.

Paul Downs:
What’s the difference?

Karen Clark Cole:
The difference is, it’s a percentage of how you run the company, and you can hire individuals. You don’t have to hire firms. We’re hiring bigger firms because we have bigger things, more stuff that we need them to do. The volume is higher, and so as we were smaller, we would hire individuals to do this very same thing.

Laura Zander:
I’m not knocking on you, we’re just having two different conversations because Paul and I live in a different world. Paul and Jay and Dana and I live in a different world than Karen does.

Karen Clark Cole:
Right, but I’ve been there. We were a 10-person company for a long time, and how we did it then also is, we tried everything. We tried doing it ourselves, we tried creating a small internal team, we tried outsourcing to companies, to firms, to individuals. We’ve tried it all.

Laura Zander:
Sure, I just mean that you have a scale, you have a scale that we don’t. First of all, we can’t spend 10 percent, because we have cost of goods sold. Our gross margin is only 48 percent or 42 percent of our revenue, or whatever that is. Because you’re a services company, right? So you’re gonna spend more money on services and on creating those services. And then the other point is that, for us, even if it was 10 percent, my 10 percent is just simply not going to buy as much as your 10 percent. I can’t get three quarters of a person. I can’t get half a person. I kinda can, but I can’t get the same quality.

Karen Clark Cole:
Sure you can. You can hire a consultant for 10 hours a month.

Laura Zander:
Yeah, I have.

Karen Clark Cole:
That’s way better than having a person work 10 hours a month, right? Because they’re actually gonna be really focused, and they’re ready to go and they’re more efficient.

Laura Zander:
Yeah, but do you understand, if I hire a consultant for 10 hours a month and they suck after six months, the risk for me is significantly higher than the risk is for you? It’s just a scale thing. Every investment is a riskier investment when you’re small like we are.

Paul Downs:
I agree with that. I’m operating on a 40 percent margin. 60 percent goes into COGS, and so we just don’t have that much money left over.

Laura Zander:
No, and you have to just be so careful. Obviously, Karen’s doing something right. We’re the ones who are suffering, and she’s the one who’s driving a Bentley.

Paul Downs:
She also has—I presume you have repeat clients, too—and that’s a different ballgame. And so do you, Laura, and we don’t. I mean, we do somewhat. It’s about 20 percent of our business, but we have to go find new people every day, and so it’s a different business model.

Loren Feldman:
Paul, have you ever tried going outside, outsourcing it?

Paul Downs:
I have outsourced aspects of it, but I mean, we have SEO efforts through my website designer. They do SEO too. They actually, I think, have done a reasonably good job. I’ve separated out the AdWords, because I’ve never really heard of anybody who had someone who could do SEO and AdWords and website design and be affordable for someone like me. I was approached by someone, an AdWords consultant, a couple of years ago, and I can’t remember why he found me. But he had some recommendations about how to get better results, in terms of just ROI, that were very good.

One of the other things that happened was, a couple years ago, working with my website guys, we were able to build coding into our site that allowed us to really pinpoint who was calling us from what kinds of sources so we could, for the first time, see, “Okay, you got this call from organic and you got this one from this email.” We started to see what these campaigns were actually producing, and then we set up our own internal tracking to look at the people who came from organic and the people who came from AdWords and see how many of them actually bought something.

It turned out that a huge percentage of something like 90 percent of our traffic of our actual calls was coming from organic. Of the AdWords, the total effort and spend produced only one job in the year we examined. So it’s like, “Well, AdWords just isn’t really doing anything for us.” This was prior to cutting the budget, too. We cut the budget from $12,000 a month to $500 a month, and then started looking to see what happened. One other thing about digital marketing—I could be wrong about this, I’m learning a lot today—but I’m very wary of making a lot of changes to an AdWords campaign because there are so many buttons in that cockpit that if you start pressing them all all the time, and then you look at the results, you don’t have any idea which thing you did changed the needle. You have to sort of do things one at a time and then wait and see for a little while to see whether that thing made any difference. At least that’s my perception of how you would go about trying to evaluate your efforts.

We found that cutting the budget by 98 percent had no immediate effect. It did start to cause a decline, or it was correlated with a decline in the traffic of about 3 percent a year over the next two years. But that period was also a period immediately after I stopped writing for The New York Times. So it was like: which one was it that’s causing this decline in traffic? Who knows? There’s really no way to figure that out.

Loren Feldman:
When you cut your budget 98 percent, did you put that money into another form of marketing?

Paul Downs:
I put it into my pocket, because I hadn’t been making any money. I was better off because the company wasn’t profitable. And then we stopped doing that, and I started doing some other things, and suddenly I’ve got money.

Loren Feldman:
That’s a happy outcome.

Paul Downs:
Yeah, and sales did not go down. They went up. We actually invested in internal processes to make a better use of the calls that were coming in, a bunch of different internal things, and the company became much more profitable. It wasn’t all because of me cutting the AdWords budget. It was a packet of things. But at the end of the day, my income tripled. That’s good for me. I like that.

Having seen this slow decline in the organic, I went to my web guys, and I said, “Well, what can we do about this?” And they said, “Well, let’s do 10 things.” They were all little adjustments to the website and tags and file names and all kinds of little tiny things to make the whole thing stickier to organic, and it worked. We turned that decline around at the beginning of last year, and we were starting to grow it again, about 5 percent a year, and it was going fine until COVID hit us. So make of that story what you will, but that’s been my experience.

Laura Zander:
I just wanted to pop in and say one last thing. Karen, with the way that you guys spend money, I totally get that, so I’m not criticizing. I want to be really clear about that. It’s really important to me, as I have watched too many small business owners in our industry making—let’s say grossing a million even—get really burned by outsourcing and finding some person who says that they’re an SEO expert or that they’re a digital expert. You spend thousands of dollars. If you are making a million bucks a year, and even you are able to put 5 percent in, that’s 50 grand for your entire advertising and marketing budget. You can easily eat that up with a consultant.

My experience has been—and we have outsourced—but most consultants who are willing to do work for a small business, they’re not the same consultants who are going to be willing and interested in working for somebody like Karen’s company. They just don’t have the same strategic mindset and they don’t provide the same value. Because if they did, they would go work for somebody like Karen’s company, where they would work for a firm that’s going to be charging 300 bucks an hour, 500 bucks an hour, whatever it is.

Karen Clark Cole:
I actually totally disagree. That’s not my experience.

Laura Zander:
Well, it’s mine.

Karen Clark Cole:
Yes, right. But you and I are two people, and the world is big, and so I don’t think it’s fair to generalize about all consultants.

Laura Zander:
I’m not generalizing about all consultants.

Karen Clark Cole:
Well, you have generalized about all consultants.

Laura Zander:
The ones who I have worked with.

Karen Clark Cole:
Okay, you can say that, but you said all consultants, and I don’t think that’s fair. Because I think you have to vet them very carefully. And of course, there are ones who are bad, and you’ve got to, just like hiring, fire fast, and expect great results. If you don’t get them, then you know, you’ve got to leave them. We’ve had over the years lots of great independent consultants who are happy. They don’t have to work for my company. We were not always how we are now. I keep saying that over and over. We were tiny.

Laura Zander:
I know Karen, but you have a sexy tech company. Paul and I, and even Jay—nobody who is aspirational and ambitious and blah, blah, blah—very few of those people want to help sell yarn online. They don’t want to help sell a boardroom table. They want the sexy startup tech company. They want to interface and do stuff with Google, and blah, blah, blah. They don’t want to do this stuff, the pedestrian stuff, the mom and pop businesses. That’s my experience. I’m sure there are some people.

Paul Downs:
I want to throw in one more data point. There’s a member of my business group who went on a digital strategy of hiring consultants and did grow his company from $4 million a year, and he just sold it at $26 million. He did it by hiring consultants and sort of just like, “I’m gonna hire you. What do you want to do? Here are the resources. Did it work? Yes. Do you continue to work? No. You’re fired. Where’s the next guy?” He was very brutal about it, but he got the results. But a big part of that was that he was able to get his manufacturing operation to the point where it was producing 60 percent gross margins, so that he had money to pump into this. He didn’t take much money out of the company himself, and he had a single-minded focus on growth that played out in a lot of ways. But it’s not something that personally I would want to replicate. but it could be done. It’s not a sexy industry—he makes custom spiral staircases.

I think that there’s truth in both sides. But one is that, if you’re stuck at a million a year, and you’re counting on hiring a consultant to get you out of that, it’s a very long-shot proposition just because almost everything is stacked against you. I would be very curious to hear whether, Karen, whether you think—you’re at 10 people, which I gather would be about $2 million a year. Now you’re at $30 million. Was it just hiring a Google consultant that got you out of that fix, or what else did you do?

Karen Clark Cole:
No, of course not. It’s a piece of the puzzle. Absolutely.

Laura Zander:
Again, I want to make sure that, like the people who are listening, some of them are smaller, independent, don’t have that 60 percent gross margin, and can’t—not throw the money—but they can’t reinvest those large amounts of money, and I’ve just witnessed too many people throwing it away.

Loren Feldman:
What should they do, Laura? A lot of them don’t have the skills themselves, either. What is the right course for that size business in your opinion?

Laura Zander:
That’s a great question.

Paul Downs:
Loren, I don’t think that there’s any guaranteed path to success, particularly on that road. And the reality is that the vast majority of businesses who are stuck there are going to stay stuck there forever. That’s just the way the world is, and it’s tough.

Karen Clark Cole:
Yeah, and the way that I looked at it, then and now—you talk about having the knowledge, Loren—it’s that my time is way better spent focusing on the deliverables that we’re producing as a company, the actual consulting work that we’re doing. And for me, the marketing side of it is it’s not a good use of me to try to figure that out because there are people who are way better and way smarter at it, which is why we would bring in individuals back then, and why we bring in small firms now. And by the way, while I’m on here, I just want to clarify, I did get clarification that that 10 percent includes our salaries for the BD team that I wasn’t sure if it did or not, so it does.

Loren Feldman:
We are out of time. This was a really interesting conversation. Best of all, I got it on tape this time, so thank you all for that. I think we’re going to come back to this.

Paul Downs:
Our pleasure, and I’m going to try to call Google, and I’m gonna see if someone will answer the phone there. That’s going to be my project next week.

Laura Zander:
If they don’t, you call back every hour on the hour.

Karen Clark Cole:
Exactly.

Laura Zander:
And tell him that you won’t stop until they give you what you need.

Paul Downs:
Okay, we’ll see how that works.

Karen Clark Cole:
I’m with Laura. You’ve got to ask for what you want—over and over and over.

Laura Zander:
Over and over and over again. Yep.

Loren Feldman:
All right, guys. Thank you very much.