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Small Business Success Podcast 051—Marcus Lemonis, Secret Data Miner

Marcus Lemonis, star of The Profit, joins us to talk about how small businesses can use data to attract new customers, and maintain the ones you have.

He expands on the importance of focusing on the data that creates the highest return on investment, and finding the balance between betting the farm on data, and doing nothing.

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Transcript

Speaker 1: Do you have a question that you want us or an expert to answer? If you have questions about your small business, submit them at smallbusinesssuccess.com/questions.

Scott: Welcome to this episode of the Small Business Success Podcast, this is Scott Martineau.

Clate Mask: And this is Clate Mask, we're co-founders of Infusion Soft and we've got Marcus Lemonis, the profit with us for another in our series of Small Business Success Podcast, so Marcus How are you doing?

Marcus: I'm doing good, guys, how are you?

Scott: Fantastic, good to [00:00:30] talk to you again.

Clate Mask: Hey, when we were talking not too long ago, we were talking about what Infusion Soft does, actually. Although this isn't to talk specifically about that but in the conversation you said something that was, I think, really critical that maybe business owners don't think about all the time. And what you said was data levels the playing field for a small business so we want to talk about that. How does data level the playing field for a small business?

Marcus: Well, I think [00:01:00] we look at it a little differently than just small business. I have always really prided myself, secretly, as being a data miner and while I feel like I'm decent at marketing in general, I understand operations and things of that nature, I secretly pride myself as a data miner. It's a hidden little secret of mine that I make all of my decisions, particularly on customer strategy and marketing and product development [00:01:30] and store openings, all on understanding the data that is around the customer. And whether that's collecting the right consumer information or whether that's really tracking a particular product, it all is around data for me. But in this particular case, it really is about understanding how to control the customer in a way that is not intrusive to them, it is not invasive to their home and I mean that in the sincerest way, we don't want [00:02:00] to carpet bomb them with mail. But that we really collect the data from them that they are comfortable giving us, we store it in a manner that allows us to elegantly slice and dice it and to market to them in a way that speaks to their interests, not ours. And when you look at traditional marketing from years and years and years ago it was generally done in a, let's just have ground cover, lets just drop 25,000 pieces of mail, or [00:02:30] lets just buy a TV that would just cover up the whole market, or radio or newspaper.

Clate Mask: Yeah.

Marcus: And in most cases I felt like advertisers, in that regard were more driven by ego than they were driven by target. They were really thinking about how to get their brand out there. For me, the best business owners are ones that invest in the software, invest in the technology, invest in the infrastructure, that allows them to collect data, procure data, hold data, put [00:03:00] it in a cube, spin it around, look at it 27 different ways and then strategize how to do two things; attract new customers and put them in your database and retain the ones you have today and engage with them in a more profitable manner. We all know how expensive it is to obtain customers it also is very expensive to keep them and I always try to encourage people to look at a database because it allows them to lower both of those costs.

Clate Mask: [00:03:30] Awesome, that is great. When you talk about the spraying messages out there and kind of carpet bombing the market versus targeted, specific, relevant communications with the right individual, you are speaking our language. That's what we're all about and we completely understand that its easier said than done and especially when you're running a business you need a way to do that effectively and to get your message out in the right way. So, yeah than you for sharing that, Scott [00:04:00] was there something you wanted to say about that?

Scott: Well, no I'm imagining, you know I'm listening to this podcast and I hear the word data miner and maybe some people wouldn't even know what that means but in others you would just feel intimidated by that so I love that you're hitting it head on and..

Marcus: Well, let's talk about that for, I think its important to talk about that. You know, a data miner very simply stated, isn't a sophisticated concept. You don't have to be a Harvard graduate to know what that means. You take yourself to the very basic [00:04:30] place of what a miner is. They find a hole and they dig looking for gold, they dig looking for coal and

Scott: And curiosity, right, right

Marcus: And what we want people to do is to not sort of fly over thousands of acres. We want them to pick a spot, pick a topic, pick an area and really get in and understand the science of how customers behave, how they buy, how they travel, how they think and do that in a way that isn't compromising [00:05:00] their privacy, do that in a way that isn't making them want to opt out of engaging with us and do that in a way that allows us to get the highest rate of return on our cent.

Clate Mask: Yeah, that is awesome. You know, when you're in a big business you invest a lot of money in the software and the technology and sometimes the people, you have a big sophisticated CIM system and you find the holes and you dive into that. How do you see [00:05:30] people doing that in small business, effectively?

Marcus: Well, you know look, we want to make sure that people aren't just going out and spending the farm on data mining.

Clate Mask: Yeah.

Marcus: And the way to do that is, I've always been looking for a company that understands that a small business has a much smaller budget, you know. When I look at the data mining that I do across my hundred businesses I use bigger platforms for companies like Camping World that have 9,000 employees and 140 locations and [00:06:00] 4 billion in revenue. But that

Clate Mask: Sure

Marcus: But that has the depth and the wealth to do it.

Clate Mask: Yeah

Marcus: When I look at business like every other business that I own, whether it's a fashion retail business with 16 stores and all these brands or my candy business or my manufacturing business, I know what I need. I need a simpler software system that is affordable because I already am trying to rub two nickels together to make a dollar and so I don't want to see people betting the [00:06:30] farm on it but I also don't want to see people doing nothing.

Clate Mask: Yeah

Scott: Right

Marcus: That's my biggest concern.

Clate Mask: That is great, well said. Well, we know a little about about that. Our customers who are listening certainly know that as well and we appreciate your perspective on that.

Marcus: Well and more importantly guys, and I know you're uncomfortable, you know, asking this but I think it important to know that I use the products that you guys sell and so that's really where our relationship is growing, I wouldn't be involved with you guys or the company or coming to the [00:07:00] event if I didn't fell like the products and services you were offering added value to my business first and allows me to really talk about it intelligently.

Clate Mask: Well, thank you, there you have it. We didn't intend for it to be a commercial but we appreciate the endorsement.

Marcus: It's not a commercial and endorsement, its just facts,

Clate Mask: Thanks, well said, thank so much. Scott anything else you want to add before we wrap up this episode?

Scott: Well, I just think, on one thing that I love about this concept of find a hole and dig is that the essence of all [00:07:30] of this is we are trying to understand the customer better and I don't think any small business owner can over-understand their customers if that makes sense. Everything that you can do to understand them more about what drive them, what they do before they interact with you, the problems that they're trying to solve, it helps you to create better products, helps you market to them better.

Marcus: And one thing guys, that we want to make sure that everybody understands, there's a balance between digging for data and over analyzing [inaudible 00:07:58] [00:08:00] And you know data is one thing but what matters is that you use it and use it effectively and you don't allow it to freeze you and the data has to be dynamic and so when you put in tools like yours it, you gotta do something with it. Because you're never really going to see the value in it and you're going to start questioning it and when time get tough you're going to look for the things that you want, the expenses you want to cut first and I will tell you that anybody that thinks [00:08:30] that data and technology are the first things to cut, they're going to go out of business. Now, maybe what people should be cutting is their lunches and their travel and some of the other nonsense that people have and they should not be doing anything that compromises the customer or has a negative effect on revenue.

Clate Mask: Awesome, well said. Well, thank you for your thoughts about that on how to level the playing field with data and without a doubt [00:09:00] you've got to put that data into action so for our listeners that use Infusion Soft that means launch campaigns, followup with your prospects and customers and send them the right message at the right time using that automation.

Scott: Marcus, thank so much for spending time. We know you're busy and we appreciate the time you've given to us and our listeners and were excited to see you at ICON and appreciate everything you do for us.

Marcus: Absolutely, and I look forward to doing more episodes with you guys in the future.

Scott: Fantastic

Clate Mask: Sounds great, thanks Marcus! That's a wrap for this episode of the Small Business Success Podcast. [00:09:30] And if you're looking for more ways to grow your business check out our knowledge center at learn.infusionsoft.com.