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Episode 61: Why paid search marketing is a lot like marriage

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All Xero Gravity episodes

Hosted by Elizabeth Ü

“Marketing is… understanding people. What makes them tick, what makes them click, what makes them buy.”

Introducing Fernando Gomez, CEO of SpargoConnect. A slayer in the paid search marketing arena, he experienced a moment of clarity when his first daughter asked him to play dragons and knights. It was then he realized that true growth happens only when you’re willing to be vulnerable and risk being uncomfortable.

On Xero Gravity #61, Fernando talks pay search marketing’s three-step process: awareness, consideration, conversion; how some social platforms are like hanging at a party and others are for finding out where the party’s happening and how much it is to get in, what all the fuss is about pay per click and more. Plus the lobster analogy, how marketing’s like marriage and a few thoughts on business ethics. Not necessarily in that order.

Small Business Resources:

Episode transcript

Host: Elizabeth Ü [EÜ]

Guest: Fernando Gomez [FG]

Intro: You’ve just tuned into Xero Gravity, a podcast for small business leaders and entrepreneurs across the world. Now to your host, Elizabeth Ü.

EÜ: Hi, everyone! I'm Elizabeth Ü, and this is Xero Gravity.

FG soundbite: “Marketing is a lot like relationships. You don’t go up to somebody and say, “Hey, we just met. Would you like to get married?” Right? That’s creepy. But that’s the same thing we do with our ads or our marketing. We say, “Hey, we’re the best plastic surgery in Miami. Come down and give us 10 grand. We’ll rejuvenate your entire body.”

EÜ: “Let’s get married.”

FG: “Exactly. Right. I don’t even know you. We haven’t went for coffee. And so we have to think of it like that.”

EÜ: Meet Fernando Gomez, CEO at SpargoConnect LLC. He’s a digital marketing expert with a passion for human psychology and getting to the bottom of what makes people tick. I was enchanted by Fernando’s stories. He channels his military experience and entrepreneurial drive into a really unique set of insights. Fernando tells us about his small business journey, the challenges he’s faced and the lessons he’s learned so far.

FG soundbite: “The only way that a lobster can grow is if it leaves its shell and goes and finds a new shell. But in order to do that, it has to be vulnerable and exposed. And all kinds of threats are going to be looking for this unshelled lobster and, you know, very similar in life, we have to go through a similar phase. In order for us to truly grow, we have to put ourselves in a vulnerable state.”

EÜ: So we have all of that and more, coming up on Xero Gravity, right after this.

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EÜ: Fernando, thanks for joining us on Xero Gravity.

FG: Thank you for having me, Elizabeth. It’s a pleasure.

EÜ: What were some major turning points in your life that got you to where you are today?

FG: All my life I’ve had an entrepreneurial itch and I was always kind of playing with it. But it wasn’t until, you know, one day, one weekend with my daughter. My daughter woke me that Saturday and at the time I was just so tired. I just came back from travelling and she wanted to play. She wanted to play dragons and knights, like, “Daddy, go in the back yard. Pretend you’re a dragon and, you know, I’ll beat you up and I’m a knight” and I was just so tired and I said, “You know what, honey? No, no, no” and then at that point I had a revelation and that revelation was that how can I tell my daughter, right, who has this vivid imagination, wants to be a princess and be a knight and dragon, that she can do all those things, be anything she wants to be when she grows up, yet every single day I’m going to my job, which I don’t like, that’s not fulfilling me and I’m killing my dreams every day. How am I supposed to lead by example when I’m doing the exact opposite of what I’m preaching and it was at that moment, I decided, “You know what? I want my daughter to know that she can do anything she wants to do, be anything she wants to be and I have to lead by example. So I put in my two weeks’ notice, started my own company and been doing good for about a year and, and eight months.

EÜ: So you say that you always had an entrepreneurial itch. Where do you think that came from?

FG: You know, so to kind of give it a little back story, I didn’t, you know, grow in the best of environments. I would say we grew up below middle class, almost borderline poverty, and I didn’t grow up in the best kind of neighborhoods either, you know. A lot of drugs and crimes and all of that. And the unfortunate thing is when you grow in that kind of environment, it’s almost like you’re living in a bubble, right, because the people around you just perpetuate that mentality and that kind of environment, if you will.

When I started gaming on computers, I started being exposed to other communities, to other ways of thinking, to so many things. And it was that pursuit of education that got me to see the possibilities out there, right, like, “Oh wow. You know, you can do this with stock.” Or, you know, “Wow. Look how much you can learn about psychology.” And once I started to see all the possibilities and just this, you know, and this hunger for knowledge, I was like, “Why don’t I start my own business?”

Why does that guy have like a Lamborghini and a yacht and a huge beautiful company but I don’t, you know? What makes him any different than me? And honestly, that’s what got me into the military, because prior to this I was in the military, and it was that same exact thought process which was, I was washing dishes, I was like 17 washing dishes at some dead-end job and then I’m looking at the TV. At this time, this is when the Iraq invasion started and, and I see people in battle and, you know, you hear these stories of, you know, so-and-so passed away and they had a family, so-and-so passed away and they had a brother and I’m here washing dishes, you know.

I dropped out of high school, I had no family, I was just sitting at home playing video games and I thought to myself, “What makes so-and-so so much better than me that he can sacrifice his life for me but I can’t do the same for him?” Right? And so I went and I enlisted in the military and when I got out, that same mentality, “What makes so-and-so so much better than me that he can start a business and be successful but I can’t?” And the truth is nothing, it’s just willpower and what you want, making yourself uncomfortable, at the end of the day.

EÜ: This is an amazing story, and there’s so many diverse things that got you to where you are today. So how did you even get into marketing in the first place?

FG: Yeah, so [laughs], and it’s funny you say. I have a very unique story as far as I’m bringing everything. So when I joined the military, I actually decided to be an interrogator and, you know…

EÜ: Wow.

FG: So I started in the military doing interrogations. And as you’re going through the school, you’re learning a lot of lie detection and a lot of that is in human behavior and psychology. Why we do what we do, what makes us tick, etcetera. So I’ve always loved this subject and I’ve always been fascinated about it and so when I got out of the military, there wasn’t, there wasn’t a high demand for interrogators in the States.

EÜ: [Laughs]

FG: So I thought to myself, “How can I take, you know, my love of psychology, everything I’ve learned and apply it to help people to make a business to, to, you know, make a living for myself?” And so marketing seemed that perfect fit because marketing is a lot of, you know, understanding people, what makes them tick, what makes them click, what makes them buy, what makes them say yes and, you know, turning that into revenue for a business.

I sort of get this itch again and I had a friend at the same time who says, “Hey Fernando, I’m thinking about throwing a party. I never threw a party before.” I’m like, “Hey, I’ve you know, never done a full-blown marketing plan before. Let’s work together on this and let’s see what happens, see what we can make happen.”

I went and I secured a partnership with Über. We secured a beautiful spot in the mall for the party. We got other sponsors. I ran guerilla marketing ads via Twitter. I ran Facebook ads. I ran Google ads, just everything I could possibly, you know, think of doing and everything, you know, I’ve learned, I ran. And so he gave me, you know, anywhere from like two to four thousand dollars on just raw marketing budget and then that night he made over $20,000 and that’s when I knew I had like, I had something and I was like, “Wow. I have power in these fingers and this mind. I can actually turn these ideas into money”.

EÜ: Changing gears a little bit, tell us what you get up to when you’re not working.

FG: So actually I’m a big gamer. I’m a gamer and my wife’s a gamer. So we play video games and I’m always reading about video games and the newest thing, like right now Pokémon Go is the biggest thing. And I find it so fascinating because there’s a lot of things that the offline and marketing world can learn from the gaming world, for example. So that’s how I justify playing video games in my head.

EÜ: Right. It’s all market research. [Laughs]

FG: [Laughs] Yeah. So I do that. I also enjoy public speaking, Toastmasters. I don’t know if you’re familiar with that but it’s a public speaking group and I was active in that for about three or four years.

EÜ: What was the favorite topic that you have been able to speak on at Toastmasters?

FG: Favorite topic? [Laughs] So I actually competed in the International Speech Contest.

EÜ: Oh, wow!

FG: I won second place at the regional levels for Hawaii and the topic that got me there was a story about, you know, becoming confident in going through adulthood, and all the things that we run into on our journey to, you know, gain confidence. And the story I used was how I met my wife and how these moments in my life challenged me to be more confident and that’s the topic that, you know, got me second place and then a speech that I’ve worked on over and over again and it’s something that’s really close and dear to me obviously, because it’s about me.

EÜ: Wow. So if you were to encapsulate the top messages from that talk, what would you share with us?

FG: That you have to be willing to be uncomfortable in order to grow. Right? So there was a fantastic story I heard about the, I think it was a lobster, and the only way that a lobster can grow is if it leaves its shell and goes and finds a new shell. But in order to do that, it has to be vulnerable and exposed and all kinds of threats are going to be looking for this unshelled lobster. And you know, very similar in life we have to go through a similar phase. In order for us to truly grow, we have to put ourselves in a vulnerable state.

We have to move out of our comfort zone, and in doing so, when we finally get to the new destination, we would have grown and everything we learned along the way would have been, you know, shaped us to where we are today. And then you just repeat the process, you know, it’s a never-ending process. At the end of it you keep growing and growing.

EÜ: And what advice do you have for people who are maybe afraid to shed that protective shell that has kept them safe and go into that vulnerable, juicy growth phase?

FG: The biggest thing that prevents people from going into that vulnerable stage that inhibits growth is that they’re too comfortable. And what I mean by too comfortable is that they’ll say they want a Lamborghini but at the same time, they would rather sit at home and watch, you know, Netflix for six hours because that’s more comfortable. In reality, what they really want is to be comfortable.

I had platinum shackles, as I like to call it, a great paying job that gave me everything I needed. But I was comfortable and it wasn’t until I, you know, quit my job and had no other option, because I have a family and a wife and two daughters. When I quit my job, I was the sole provider. So for me, it was do or die because I knew that I was so comfortable in my current situation that I needed that extreme, in order to move towards my goal. Right?

I would not recommend that people do that because you should never put your family in jeopardy like that or, you know, go through that struggle.

EÜ: And what has been the biggest challenge for you in building your small business?

FG: The biggest learning point as well as a challenge is learning to say no. Right? Opportunity is like — and I read a great post about this— opportunity is like a big juicy burger with like four, five, six meat patties, and it’s greasy and the cheese is dripping and melting and you got the crisp lettuce on there and the nice, warm bun. You can just visualize this big, massive burger and it looks juicy and you want to eat it. You want to say yes to opportunity all the time but in reality, it’s better for you to say no because it will help you grow long term.

And a lesson I had to learn, is to say no to that juicy burger, because I would, I was spread so thin early on in my business, because I would say yes to everything, right? Everything was a good idea. I was working 12 hours a day, seven days a week and I felt so bad because I wasn’t seeing my kids grow and the biggest challenge — even now — even though I’ve been through all of that, is still saying no to opportunity. That’s how you set yourself up to scale for growth.

EÜ: I think that’s a great segue into this episode’s theme, which is of course paid search marketing. And I am so excited to hear your insights to help all of us understand what we need to say no to, but also a few opportunities where we can say yes. So let’s unpack the jargon a little bit. What exactly is paid search marketing?

FG: So paid search marketing is just paying a platform which controls an audience in order for them to see your ad. That’s pretty much it. And the major platforms that everybody is familiar with are Google, you know, Facebook and then now you have Instagram and you have LinkedIn, Snapchat, and there’s an ever-growing list of platforms. Basically it’s just, you give this platform money and this platform will show your ad to people whom you decide are in your demographic.

EÜ: What about SEM? Is paid search marketing different to SEM?

FG: Yeah. So SEM, Search Engine Marketing, includes PPC which is pay-per-click. Pay per click is the way you buy ads on Google AdWords, meaning that you pay every time somebody clicks. So that’s considered a paid, you know, digital marketing platform. Because you’re paying only for the click, you know, and going back to SEO where if somebody clicks on your website based off of just the organic and the content that you’re producing, you’re not paying anything for that.

EÜ: So as a small business person, I have to say that the whole pay-per-click thing sits a little bit strange with me. I mean, I don’t want to pay someone just to click onto my site. I want to pay someone or some platform to drive sales. So what’s the relationship between clicks and actual sales?

FG: A great question. At the end of the day, that’s what, you know, business runs on, the sales. When you’re doing pay-per-click advertising, there’s a lot of things you have to take into consideration.

The first is, you know, your demographics. Who’s your target persona? Who’s your buyer? Where do they hang out? Now, where they hang out is a big one as far as what kind of marketing you’re doing in your PPC, if you will.

For example, Facebook and Instagram, it’s like a party, if you will. Nobody’s going there to look for something specific. Everybody’s just there to kind of hang out and, you know, see what the neighbors are up to, see what their friends are up to and it’s just kind of a party. Whereas Google, it’s more of a “I need this now and I need it immediately because this is what I’m searching for.” So I don’t go on Google to see what my friends are doing, right? Because obviously the platform doesn’t allow it. I go on Google to search, you know, best Chinese food in Miami, right? Or in Oregon or wherever you are because I have an immediate need.

Now, when it comes time to, to market on these platforms, on Google, you would do your direct marketing which is basically, “Hey, are you looking for Chinese food? Guess what? We’re the best Chinese food. Here’s a $5.00 off coupon for clicking on our link,” and they click on the link and then you get that sale.

On other platforms like Facebook, you can’t do that. You can but you won’t be as successful as if you did it on Google because it’s kind of like if you’re at a party and some guy goes, “Hey, are you looking for Chinese food? Were you looking for Chinese food? $5.00 off Chinese food… .” And you’re like…

EÜ: [Laughs]

FG: “I’m just here to hang out. No, I don’t want Chinese food, okay?” “Like are you sure? Here’s $5.00.” “No.” But if you go to that same party and you say, “Hey, did you know that this Chinese food has fewer calories than, you know, a big burger and it’s even healthier for you?” “Oh wow, I didn’t know that.” And then now you’re educating your market, right? And that’s what you have to do on these engagement platforms, I like to call them, like Facebook and Instagram, is go to the party and educate your market and then retarget them with the $5.00 off.

You’re no longer annoying. You just purely educate them because we don’t want to come off as that creepy guy and so, okay, they’ve been educated. Now, what you then do is you retarget them. And what I mean by retargeting is on these platforms you can set up, set it up so anybody who has viewed or been educated on your ad would only see the next ad and so when you retarget them you say, “Hey, remember about that great Chinese place that has fewer calories than a burger and is a lot cheaper? Well, here’s $5.00 off so you can go try it and if you don’t like, then you know, we’ll give you your money back.”

Another thing you have to think of is how complicated is your product, right? Because if you have a complicated product, you’re going to have to explain it and what I mean by that is, I’m not going to go on Google and look up a plastic surgeon, and I click on the first ad and immediately go to the plastic surgeon based off of his ad, because it’s a complicated product. There’s a lot of thought process.

There’s going to be some consultation. They’re going to educate themselves, they’re going to look around, they’re going to look at my social media, they’re going to look at my reviews, etcetera. So the more complicated your product is, you’re going to have to build more steps in your marketing campaign in order to get to them to the end result, which is a sale.

EÜ: So what are the steps in taking customers along this journey and how do you go about building a paid search marketing campaign? What’s a good starting point?

FG: The first one is awareness, consideration and conversion. And so what I want to do is I want to make them aware of the problem because nobody can seek a solution if they don’t know the problem exists. So when I’m doing my paid marketing campaign, I want to highlight the problem. I’m going to run what’s called an awareness campaign and then I’ll go and I’ll cite some documents and, you know, I’ll provide nothing but value informational content.

Now you’re aware of the problem, that’s campaign number one. You then change that with campaign number two, which is consideration. “Now that I have made you aware of the problem, you need to know why my company is better than the rest and why we can solve your problem, right, and so at Fernando’s Plastic Surgery Company… .” I don’t have that company, but just as an example, “This is what makes us different.” Here’s where you highlight your USP, your unique selling proposition, what makes you unique, and so now I’ve been made aware of the problem.

Now I know why you’re the best solution, and then finally the third stage of the campaign is conversion. Conversion can mean many things. It does not mean a sale. Conversion just means somebody to make a micro-commitment in the form of a yes, in the form of a low-dollar ticket amount. I’m going to say, ‘Would you like to see if you’re a candidate and what we can do about you, free, no-obligation consultation?’”

Then that’s a conversion and from there your sales process takes over the rest of the campaign, and so as a small business, you need to think, “What is my product? What solution does it solve? What makes me unique? Why would people go to my business to solve that problem when there’s three other businesses in the same area?”

EÜ: I love all these examples of micro-commitments and getting people to say yes to something soon rather than, you know, saving up the request for the big ask.

FG: Yeah, and the truth is that marketing is a lot like relationships. You don’t go up to somebody and say, “Hey, we just met. Would you like to get married?” Right? That’s creepy. That’s, “Whoa, who are you? I’m going to call the cops.” Right? Now, if you do that a hundred times, one person might say yes but I don’t know if they’re the ideal person. But it can work, right, and that’s the same thing we do with our ads or our marketing is we say, “Hey, we’re the best plastic surgery in Miami. Come down and give us 10 grand we’ll rejuvenate your entire body.”

EÜ: “Let’s get married.”

FG: Exactly, right? “I don’t even know you. We haven’t went for coffee. Who are you? Are you even licensed? Whoa, slow down.” And so we have to think of it like that.

EÜ: Can you give some examples of some really great paid search marketing campaigns that you’ve seen that have taken into account all of these things, like the story arcs that you mentioned and retargeting based on who’s seen which message or which image previously? Or making sure that you’re catering your message to how complicated your product is and going through this awareness and consideration and conversion phase?

FG: So I did work for a kitchen renovation company. This was when I was in Hawaii. And in Hawaii they have, they have like weird housing, you know, laws and whatnot as far as like kitchens and bathrooms, and so at the time they had just released this law where it’s okay to have another kitchen but not pay more on your mortgage or your taxes or whatever. And so the first thing we did was we brought awareness to this, this problem which was, before I guess people wanted to have a separate kitchen, so they can have an extra unit to rent out, but they couldn’t. But now that this law was passed, they could.

So we brought awareness to the problem like, “Hey, did you want to have a kitchen before, but you couldn’t? Well, did you know that Hawaii passed this law and now you can have a kitchen and it’s not going to cost any more on your mortgage? And you can now rent out that room you’ve been finally waiting to rent out?” And so then we ran that educational campaign and we offered, you know, lead magnets or content offers such as, “Hey, download the report and give us your lead information.”

But the whole point of this campaign was just purely educate, be seen as the authority and the expert in that field and just purely educate on the problem and so once we educated them on the problem, “That’s great. Now that you know that you want a kitchen done, you’re going to need to hire a company that does it. Now, who better to choose than a company that’s been in Hawaii for over, you know, a hundred years, founded by family who cares and has worked in your neighborhood?” And then we list all the neighborhoods that we worked in, kind of the social proof of it. “Call us now and we’ll set up a free no-obligation kitchen design consultation.”

EÜ: Were there other people who were running ads on the same search terms?

FG: Yes. Yes. There would be other people running ads on the same search terms. Because this was a niche, you know, market. Their ads weren’t as relevant as ours.

What I mean by that... so when people search for law so and so, our ad said, “Are you looking for law so and so? Here’s more information you need.” The other competitors that would be in our bracket would be law firms saying, “Are you just looking for somebody to help you with law?”

On Facebook, what we then do is we target homeowners who meet the customer persona. And so we targeted, you know, people in their 30s to 60s-plus who had a home of half a million or more, had a net worth of a quarter million combined, and who liked the do-it-yourself shows. And then when we ran the ad, it was just, “Hey, have you heard about this new law? Hawaii says you can now do this with kitchens. Click here to learn more and see how your home might be affected.” And so we ran both ads on both platforms purely to create education.

Now, the most important thing to do next is, on both platforms they have something called retargeting or remarketing, dependent on which platform. All that is, is essentially think of it as a bucket. Anybody who clicks on your ad and shows interest gets put in this bucket and you now have them tagged as interested in, you know, the educational series about the mortgages or the kitchen.

What you then want to do is when you run your next campaign of consideration, run that campaign only to the people in that bucket because the people in that bucket have already been exposed to your brand once and they’ve already been educated. And then when you do that and you take them through your consideration, all the people who go through your consideration now enter a new bucket. And then when it comes time to run the conversion campaign, you only run the conversion campaign to the people in that new bucket.

EÜ: Tell us also about competitor marketing campaigns. What’s a good way to ethically leverage what your competitors are spending on paid marketing?

FG: Honestly, your competitors waste, you know, thousands, not waste but they spend tens of thousands, hundreds of thousands of dollars on these marketing campaigns and when you start a marketing campaign, you’d be a fool not to leverage that, their money, as far as what works best and what doesn’t.

EÜ: Wait, so how do you do that?

FG: It depends on your platform. So the simplest way you can do it is you can use a keyword competitor tool such as like SpyFu, which is free. So we’ll just say real quick that we’re a kitchen renovation company, we want to enter the PPC game. You go on a tool like SpyFu or like SEMrush.com or SpyFu.com, and then you type in your competitor’s website, ‘So-and-So Kitchen Remodelers’. What these tools do is basically archive and save the campaign of all your competitors for as long as possible. So now we’re in SpyFu, we look at So-and-So Kitchen Remodelers, and we see that he’s ran ads for the past 12 months.

On month June, he ran, you know, $10,000 more than he did in July but the number one thing that we see is that the first three months, he tried this ad set and so he changed it. The next three months, he tried this ad set and so he changed it. But for the last six months, he had this ad set stay constant and what you’ll see as you look through the ad sets is, you know, different copy. And so what we can assume from that is that the first six months, they were experimenting on ads and the last six months, this is what works for them best because it’s been running for the longest amount, and they’ve spent, you know, over $40,000 on this, where it was only spent $10,000 on the first six.

So if I were to go, start my own kitchen remodeling PPC campaign, I am going to look at that six months, $40,000 spent, and see what they’re doing in there and what they did in the previous one, and then start my campaign from that. Now, I don’t mean copy or steal because that’s unethical but I mean, you know, use best practices.

EÜ: I was going ask about the ethics of this.

FG: No, don’t copy and steal ads. That’s unethical and then you can never beat somebody at their own game.

EÜ: We’re going to finish up with our question countdown which is five quick questions and five quick answers. Are you ready?

FG: Yes, I’m ready. Let’s go.

EÜ: What business book or idea made the biggest impact on your life and why?

FG: How to Win Friends and Influence People, by Dale Carnegie. It’s a classic. It just goes to show that if you do good and you be good, then, you know, it’ll come back to you.

EÜ: I can tell that you’re living your life that way.

FG: I appreciate it. Thank you.

EÜ: And what’s the one thing you can’t live without?

FG: Video games. And when I say video games, I mean competitive video games because whenever I get into a competitive video game, it just challenges me and then I kind of separate myself from everything else and I’m, “Okay, this is my world now.”

EÜ: What’s the most useful app on your phone right now?

FG: You know what? My Todoist. My Todoist list on my phone, it keeps me in check. It keeps me in line and it makes sure that I don’t forget to buy milk from the grocery store when my wife calls me in the middle of work.

EÜ: [Laughs] Right. In one sentence, what’s the greatest lesson you’ve learned throughout your small business journey?

FG: Opportunity is a big, fat, delicious, juicy burger that you have to say no to for long-term growth.

EÜ: And finally, what skill do you want to enhance this year?

FG: Work-life balance. I don’t know if that’s a skill but it’s something I want to enhance. It’s easy to get so consumed by your work that you forget to give yourself time off. So I, I guess that’s a skill.

EÜ: Thank you, and that was such a fun conversation, Fernando. Thanks so much for joining us on the show.

FG: Thank you so much for having me.

Promo: Are you a fan of Xero Gravity? Because we’d love to hear from you. Subscribe to the show in iTunes or SoundCloud and leave a review, sharing your favorite moment from the show so far.

EÜ: That was Fernando Gomez, CEO at SpargoConnect LLC. Thank you for listening to Xero Gravity. Make sure you join us next week for a really engaging chat with Matt Rissell from TSheets. Matt will talk about how the cloud is changing the way we work, and how to grow a productive team and office culture that people will want to be a part of. So don’t miss that one and we’ll catch you then.

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