Episode 23: Holiday cheer: revenue secrets from service businesses


All Xero Gravity episodes

Hosted by Elizabeth Ü and Gene Marks

Can you do two things at once? Can you keep services flying off the shelves during the biggest shopping season of the year, and still give yourself enough downtime so as not to burn out?

Tune in for answers on Xero Gravity #23, as Elizabeth and Gene welcome in Alex Gray, President and CEO of Skylight Global, and Tyler Jensen, CEO of The Startup Garage. Together, these two savvy entrepreneurs talk about how to strike a holiday balance with targeted sales and marketing, and still give yourself time a well-deserved break from the consumer shopping frenzy.

You’ll hear how shifting between spending on social media and online advertising, and curating content for your website can mean more customers, engagement and revenue. Not to mention the power of CRM, outreach and storytelling, and the vital role authenticity plays. Happy profitable holidays!

Episode transcript

Hosts:        Gene Marks [GM] & Elizabeth Ü [EÜ]

Guests:     Alex Grey [AG] and Tyler Jensen [TJ]


XG Opening

You’ve just tuned into Xero Gravity: a podcast for small business leaders and entrepreneurs across America. Now to your hosts, Gene Marks and Elizabeth Ü.


EÜ Welcome to Xero Gravity. I’m here with co-host Gene Marks. My name is Elizabeth Ü. I’m the Education Specialist here at Xero. And today we’re going to talk about gearing up for the holiday rush. So Gene, is there anything in your family that you do to gear up for the holiday rush?

GM We try to starve ourselves Elizabeth, for as long as possible, just to make sure that all the food that we are going eat during that is...I can’t believe that the holidays are so close around the corner. Wasn’t it just summer like a couple of weeks ago?

EÜ I know I just blinked and it’s already fall, and there is already all kinds of holiday things in the stores everywhere it’s kind of crazy.

Well, today we’re going to be talking about how service businesses can take advantage of this time of year. I think one of the things that’s really key about this topic is how to use this time wisely. I know that one of the common pitfalls, especially for service businesses, is inefficient use of social media and the marketing spend this time of year.


Guest Soundbites

AG “Always getting to know who you’re targeting is so, so important. And I found Facebook lately to be probably one of the very best ways to get that happening.”

TJ “We didn’t find a lot of success in that driving actual sales. I looked at it really closely, and we tried a lot of different things, and so we said no, we want to spend most of our time and effort and energy on things that actually lead to revenue coming in.”


GM I have a service business that’s my company right, so we sell B2B. We’re not on the retail side. The holidays has sort of a different meaning for service businesses like mine, and that’s what we’re going to discuss today — about some of the things we really should be paying attention to, and taking advantage of, while it’s the holiday season.

I mean number one is I kind of clean house a lot during the holidays, right? We make sure that your files are done, things are timed out; we make some plans and objectives for the next year, because December really does get slow enough that we can actually start thinking ahead. And then the other big thing we do, and I know this sounds corny and whatever, but we do give thanks. We send out gifts to customers. We send holiday cards. I give bonuses to employees. We have the holiday lunch.

I don’t know it’s that time of year, I don’t care what kind of business you’re in, service or retail or manufacturing, it is that time of year where you take a big breath and you say thanks for all the stuff that we have, and share the gratefulness with other people. And then move on into the next year; hopefully a profitable year.

EÜ Well I know that this is a really important topic — how to spend your time during the holiday season for a lot of our small business service customers. Because this is the time when you could be wasting a lot of your energy and resources chasing down leads, or or chasing down marketing channels that aren’t really going to be paying back a return on that investment.

GM Yeah I agree. I mean look, the big question is — I know it’s the holiday season — but is that a big deal for service businesses? And that’s the kind of thing we’re going to be talking about with our guests today. I want to find out what a service business should be doing to prepare for the holidays. And really, if it’s even a relevant thing for service businesses to be doing, if they should be looking forward into the next year or not.


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EÜ And so for this episode of Xero Gravity we’ll be joined by Alexander Grey, who is President and CEO at Skylight Global, and also Tyler Jensen, CEO at The Startup Garage. All right, thank you so much for joining us.

AG Thanks for having us.

TJ Thanks for having us, appreciate being here.

EÜ Yes, so we’re going to be talking today about some of the things that service organizations can do to create a holiday rush. But before we get started on that topic let’s hear a little bit more about what got both of you into your businesses. I know both of you are working with very multifaceted businesses that serve other businesses in a variety of ways. So maybe Alex, let’s start with you. Tell us a little bit more about how you got started with Skylight Global.

AG Skylight Global actually was the emanation of many years of believe it or not, health and fitness industry and martial arts training. This was actually my background from way back. It was my first entrepreneurial business. I ran a health club here in Toronto for 13 years and after that I decided to continue to grow my understanding of business. The first niche that I got into was real estate investing, and as we’ll learn through this call, it got into more marketing related stuff.

EÜ Well I imagine that your background in martial arts was something that really helped you stay grounded and centered through the growth of this business, and is that something that’s still part of your lifestyle today?

TJ Yeah wait, and Alex are you a black belt here, because I’ve got to be careful what I say, Right?

AG 30 years man, 30 years, been doing this for a long time, since I was very young. So black belt yes, along the way, but you know eventually belts are just, you know like Bruce Lee said, they’re good to keep your pants up and they’re great. But you just get to the point where you train.

EÜ And so Tyler, I understand that stand-up paddle boarding is an important part of your life right now, and I’m wondering if there are any parts of that activity that come over into your work with the Startup Garage?

TJ Well you know, I work here right out of my home in Encinitas and I’ve got my office setup in my actual garage, which is about 300 yards from the ocean. And so I get out onto the beach and the water two to three times a day. So I think it’s definitely a big part of my life, and therefore a bit part of The Startup Garage here, as well.

GM I’ve got to ask so, you know Alex, let me like turn to you, so I mean we want to talk about marketing in this conversation. Alex, as we head into the holiday season, what should a small business owner be thinking? Or how would you give some advice to a business owner like myself, like some of my clients whether they’re non-retail type people, is there anything special you think people should be doing to prepare themselves for the holidays?

AG Well, simply knowing your audience. I mean it comes down to fundamentals. And you know over the years of running ads, before Christmas, after Christmas, knowing your audience. So for example. going into the holidays, doing a lot of Facebook page ads are very important. If you have a particular product that you really enjoy marketing, not necessarily just a brand, but some people build pages around a certain product.

I find that the page ads on Facebook are phenomenal because what you do is you get to know your audience so much more. You get to go in and dive into the demographics. Before you hit the ground spending money, too much money on marketing, always getting to know who you’re targeting is so, so important. I found Facebook to be probably one of the very best ways to get that happening.

EÜ So can you give us an example Alex of an organization or a company that you’ve worked with, that is more service oriented rather than like a hard product? A thing that people can buy? And how they’ve used Facebook page ads to support creating some sort of urgency around the holidays for that service?

AG One recently is one I call Real Deal Car Levers, and that one is actually very interesting because they wanted to focus in on keeping their products almost — I don’t know if you’re familiar with dark posts on Facebook — posts that are run as ads that don’t actually show up on the wall. And they wanted to have a specific part launched, and that was a protector for the back seat of cars when kids kick the back of the seat with their dirty boots in the wintertime. Of course it’s a great Christmas gift because where it snows it’s great to keep the car clean.

So that was a great way to gauge, and you know, they thought okay, we’re going to market to women and men and grandparents are going to love this. And we ran the ads and guess what we found. point one percent women, everyone else was male. Everyone who liked their page was between the ages of 18 and 34, nobody older, so literally a very small percentage. And they were able to take that data and turn it around and create more effective advertising.

I can’t stress it enough: you’ve got to know your audience, and even if you’ve done this like an old hat year after year, it doesn’t hurt to spend five bucks a day for three or four days, and run these page ads on Facebook. They’re fantastic!

EÜ And do you generally recommend that people really ramp up their ad spend prior to the holidays? Or what’s the timeline that you recommend in terms of building this holiday rush?

AG Yeah the holiday rush is interesting because I come at it from two different angles. I come at it from the point of view of an e-Commerce, trying to sell my own products. I’m helping my clients get their needed business, and then of course in real estate, the actual rush is after Christmas (not before Christmas), because people have a tough time paying their bills. And I help them, I buy their houses from them, or I help them with their short sales whatnot. But they tend to get their credit card statement after Christmas, and then money becomes a problem. And then that’s when they start phoning in on the hotline saying hey, can you help me? So the advertising for that is…

EÜ That makes sense.

AG ...after Christmas, that’s the timing on that one.

GM And so Tyler, I’ve got to ask you as well, we’re talking about building up for a holiday rush — is this a startup issue?

TJ Well I wouldn’t say the clients that I work with it’s an issue for them. I mean mostly a lot of them are even pre-revenue. And so they’re just using this time to get things done rather than, you know, taking a lot of action. From The Startup Garage standpoint though, we’re in the B2B service business— things really slow down for us.

And so we find from a marketing standpoint, I pull in the reins, I kind of pull in my spending. And either spend it before the holidays so that we can get a built-up clientele or spend it after the holidays to get things rock and rolling again when January comes along. It really just depends on the type of business you’re in, what marketing strategy is going to work.

GM Yeah it’s funny that you bring that up as well. When people ask me about marketing for Christmas — I mean I get it when you’re in the retail business — the holiday season is such a huge time of year, right? For some companies it’s 50% of their sales. But in the service businesses — we’re talking about non-retailers here — how important do you think the holidays really are for an ongoing business’ annual revenues? Do you think it’s really worth spending a lot of time focusing your marketing on the holiday season, or do you just leave it to retail?

TJ Yeah, I mean I have learned, I spent many years banging my head against the wall trying to generate revenue during those months and had no success. The best success I had was when I just like stopped spending money and took a little holiday myself.

You know I had a past company that I started called Vavi Sport and Social Club. I eventually sold that company. But we had the same issue where people of sports leagues, they didn’t want to sign up during the holidays, they were too busy. And so we came up with a unique strategy where we decided to throw a big New Years’ party.

So we came up with this one time a year product that worked. When we were slow it ended up being one of our profitable events, and so we generated all this extra cashflow. So it was a unique kind of one-off project where we could utilize our unused resourced during the holiday season, because both of these are service-based companies, and we just couldn’t get them to pay us when they didn’t want to. We found we were wasting our time.

EÜ So then Tyler, you must have a way to measure the ROI on your marketing spend. Clearly you found that this one-time-a-year party, this unique offering, was working really well during the holiday season. But pretty much nothing else was. But I’m sure that you must have some way to measure the success of these campaigns.

TJ Well yeah, I mean there’s a number of different ways that we measure. One of the simplest is just looking at overall marketing spend and reporting, and then tying in revenue that’s directly related to those leads that came in. And I get a cost per lead and a cost per customer for my marketing spend, and that gives me the information I need to make those choices about where and when to spend my dollar, marketing dollars.

EÜ Well I know that when you talk to small businesses, a lot of them are tearing their hair out trying to figure out exactly where their customers are coming from. And despite the fact that they’re spending marketing dollars on any number of channels, they’re not exactly sure what has brought that customer in the door. So do you have specific advice that you give to your startup clients, as far as how to measure those sorts of things?

TJ Well yeah, so we implement a CRM system for our clients (or they will). And then as each lead comes in, you know in-putting the lead source. And then I use Xero to manage my accounting and that brings in the other…

EÜ Excellent!

TJ …yes, brings in the other data points that I need, which is breaking up marketing spend by month. And so I have the number of leads, led by lead source, and then I have marketing spend and revenue (also found in Xero). I pull those altogether; I use an Executive Dashboard to pull all those together, and I’m able to look at my metrics on a real-time basis.

GM So Tyler, what CRM system do you use?

TJ So I use a company called Green Rope. They’re based here in San Diego as well - very affordable solution for small businesses. They offer a marketing automation platform, which for bigger companies they actually pay for two separate one, a CRM and Marketing Automation which can become thousands of dollars. But this one’s just, you know a few hundred bucks for both, a month.

GM How about you Alex? Do you guys use CRM System?

AG We do, we’re actually using Pipe Drive now because I like the way it integrates with Gmail and with Mail Chimp. They have very specific integrations with those two. So yeah Pipe — everyone, to each their own — and that’s just what I would say the flavor of the year is. You know I change serums very, very quickly. And like Tyler said, you know, one of the mainstays that we’ve got as well is Xero, that’s been with me for over three years now.

GM You know I have to ask, I mean the CRM system is a database, and it’s tracking anybody that comes in contact with your business. And Alex, you’ve been through a number of them over the years. I am curious as to the importance that a CRM system has in your marketing efforts? What you use it for throughout the year, and not just with the holidays — how do you leverage it?

AG Sure. Well one of the things you’ll notice in a lot of CRMs, and even established ones like Salesforce, they’re really implementing the pipeline view. They just love that pipeline view. I like being able to see the entire chain. To answer your question, for marketing yes, you just simply create the pipeline for what that step is, and then create the notifications around that. So for me, I found that to be a more effective way to do it.

EÜ Maybe Tyler, you have an answer for this: I’m wondering as far as your email marketing goes — given that both of you said you had a bit more of a rush after the holiday season — is there something you’re doing now to prepare for that post-season rush?

TJ Yeah, so, like I mentioned earlier, to prepare we’re reserving our cash, we’re tightening down on a few things, and kind of using this downtime to work on our brand a little bit. We’re working on our content and communication strategy so that when the New Year comes we’ve got some new products, new services, and new branding elements to let out — to create some excitement and buzz in the New Year.

EÜ Right, I imagine that your communication plan is quite robust, so you can start with a bang as soon as people are emerging from their holiday stupor.

TJ Yeah, all those New Year’s resolutions to start a new business, they need to come on over our way.

GM So Alex, let me actually jump in as well. Just for our listeners, do you have some no-nos or some advice for people that are marketing during the holidays? Like if you’re going to do a holiday campaign — anything in particular that you want to focus on?

AG Let’s keep it positive. So I’ll just say that, you know, you want to stay and Tyler was hitting on all of this beautifully: it’s the communications. You just want to stay in communication. But if you want to look at it from a deeper perspective, there are certain no-nos. I mean you obviously want to avoid over marketing yourself. You want to still stay in communication — I wish all your clients a happy holiday — and you want to be very courteous. But you need to also be authentic.

I think this comes down to a very positive change that’s happening in the blog sphere, and that is storytelling. I think that a good marketer is also a good storyteller. And I think what you need to do is share your authenticity, because people around that time of year are very sensitive. People are rushed. They don’t have time to deal with BS. They want to know that whoever is emailing them actually has something authentic to share with them. So mastering the art of storytelling, especially around the winter holidays, is essential.

GM So Alex, you talk about using Facebook for your business and being active on social media. How active is active? How do you define being active on Facebook? Is it a couple of posts a day, just a few a week? What do you recommend to your clients? What do you do as far as your activity on Facebook?

AG I try to focus on engagement. Engagement is when — if you’re talking about strictly from NWs perspective — somebody actually likes or comments on your post. Think of it like currency. A “like” would be like a penny, and a comment is a couple of dollars. The likes are great. You get lots of pennies and it’s great, the engagement money is made when you can get people to comment and grow that way.

GM You know I actually have to think as the next question, I mean when you’re talking about engagement and getting likes and having that kind of conversation going on. How does that turn into leads for you? I mean you’re having conversations with people online, but does it actually turn into sales?

AG Absolutely. You can create great conversations on Facebook. And the people who are passionate, the people who are engaged in your wall will respond. They do respond.

GM So Tyler, I hear Alex talking about all the great stuff that he can do on Facebook. You advise startups, which have no money and no resources and no time. How do you help a startup get involved on social media, and spend the amount of time that’s required to really generate the activity to turn into leads?

EÜ Well I guess I have a question as well. Even if you are pre-revenue, is that the time to be putting energy into a Facebook or social campaign? I imagine there’s other things that are more relevant or efficient at that moment in a business life cycle.

TJ Absolutely, and I think I can be of best value from offering this from two perspectives.

One for clients I work with and then one from the Startup Garage, which is a service-based company. So in terms of starters it really depends on their stage. I always advise that you go out and get all of the URLs from all those different social media channels, so that you can secure your brand. Even if you’re not going to use them, go out and just get them signed up — so that’s something that you want to start with. We advise startups to really limit their social media presence early on, until it’s something they can actually execute on.

Generally they have limited resources, limited time, and there’s nothing worse than, you know, having this company and this page and the last update was three months ago, because you just got busy. It’s almost better to have nothing or coming soon, than an update three months ago. It’s definitely limited on the startup side.

On the service-based side, which our company is, we found some interesting things. We limit our posting, in terms of Facebook and Twitter and things like that, we post a few times a week on things like that. We didn’t find a lot of success in that driving actual sales. I looked at it really closely and we tried a lot of different things, and so we said no, we want to spend most of our time and effort and energy on things that actually lead to revenue coming in.

We found that social outreach was the one that we could actually measure, that was making us money. That was going out and finding niche audiences, targeted audiences, both on the major social networks like Facebook and LinkedIn, and those types of things. Then also niche social media sites that are related to startups, like crowdfunding sites and investor sites and things like that. We’ve had great success doing social outreach to them.

GM That’s great! Doing that kind of niche social marketing and the outreach, do you recommend that startups use any outside consultants or firms, or hire part-timers? Any recommendation that you have for a startup that wants to build that type of social media outreach, particularly over the holidays?

AG Yeah I mean there’s a couple of different stages to your social media. Number one is coming up with the plan and strategy — so picking the channels. If you’re not familiar with it, it can be really helpful to hire a consultant to help you with that because it’s kind of a one-time thing, to pick the channels, pick your communication strategy.

Then the second step is really around what you call social media skinning. That’s really a design job, and typically startups don’t have designers in-house, so that’s another great thing to outsource. And the then the third part is ongoing management, and that really just depends on your budget, depends on your company. There’s so many variations of whether that’s best to be done internally or outsourced, which would be answered in the planning stage as well.

EÜ So Alex, I’m wondering if you can reiterate maybe your top three tips for non-retailers and what they can be doing in the lead up to this holiday season?

AG Okay well, like I was saying earlier, Facebook is a great way to get to know your audience. If you have a product to launch you’re trying to find out who is going to buy before you go spending any money — it’s a big part — go onto Facebook, get page “like” ads going, then use that to determine your budget. And use you that to save your budget on things that matter, for when you ramp up your advertising.

If you you’re talking about communications, then of course the third thing would be get your ducks in a row when it comes to email marketing and blogging. Get your audience knowing that you are authentic and that you are a storyteller, and that you will always, every time you send you an email, give them value that way. That way, even if you’re not trying to sell them something, an object or something like that, in a less material way, at least they will know to trust you. I think that’s extremely important when it comes to running a business — that the people you are engaged with trust you.

EÜ And then so Tyler, what about you? As far as closing, what are your top three tips for folks in service organizations, non-retail organizations, and how they can take greatest advantage of their resources over the holiday season?

TJ Yeah, so I think starts with what Alex led off with earlier, which is about understanding

your customer. Whether they’re buying or whichever stage they’re in during the holiday season, that you’re not really fighting against that kind of reality, would be my biggest tip here.

So if your customers aren’t buying and their just exploring or looking, or even just too busy, you know pull to back the reins. Don’t waste time or money, and spend some time and money on preparing for when they are buying. That would be my large tip here. I don’t know if that’s three tips, but I think I’ve built three in that one.

EÜ That’s great! Also I wanted to draw people’s attention to the fact that on Xero — and this is where we have all of our educational materials on Xero — is xero.com/us/training. Plus we have a really great webinar series.

Keith Whyte, one of our partners, recently gave two webinars which we recorded. They are available on Xero, about raising capital for your business. It really dives into the nuts and bolts and things you need to know about various financiers, before you go about raising capital. So great resources there. Thank you again so much, Tyler and Alex, for joining us today.

AG Thanks for having us.

TJ Yeah, thank you.


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GM If you have any questions you’d like answered on the show…

EÜ tweet us at Xero using the hashtag #XeroGravity. Or text us your questions to (415) 813-9878. We’ll answer them on next week’s show!


EÜ What a great conversation that was with Alex and Tyler today. I think one of the things that really struck home with me was this business about being really authentic in your storytelling. I think whether we’re talking about the holidays or not, that’s going to be really crucial for any small business that’s hoping to succeed, would you say, Gene?

GM Yeah, I mean it’s funny. I mean the holiday business for service businesses or non-retailers sometimes doesn’t really resonate that much with them, because they’re not offering deals in your store. But you know those guys are right. Telling stories is important. It’s a great opportunity to engage and start communicating with your community. I think they’re a little bit more interested in being more human during the holidays. So I think the points are right on. Telling stories and using the holidays as a starting point — I think it’s a great idea.

EÜ Alex in particular was really talking about knowing your audience. You could tell that he knows his audience very well. He knows exactly where they are. He is recommending Facebook, and in particular those page “like” ads. It sounds like he’s really done a lot of planning, and I would recommend this to everyone who is listening today: before you spend, you need to know who your audience is and what they’re buying. This is a really critical piece that we didn’t necessarily talk about, but knowing when…

GM I agree. It’s funny too, he was big on social media and it’s absolutely important and I agree with that. But I I know a lot of service businesses, their customers particularly, their B2B customers, they’re not necessarily on social media. I have one client — it’s a woman who runs an engineering firm outside of Dallas — who deals with a lot of construction management companies, and those guys are hard hats. I mean they’re not on Facebook, you know?

EÜ Right.

GM And her deal is: she sends out postcards once a month, which I know is crazy. But she uses a mailing service and, like Alex recommends, she tells stories. She’ll have a picture on one side and on the other side tell a story about the picture, about herself, her firm, something related, just to build up a little relationship. And over time people get to know her that way, and it’s really worked for her.

EÜ Right, well she’s still following Alex’s advice. She still knows her audience well, and she knows what channels are going to speak to them.

GM 100%, that’s exactly right. It doesn’t have to necessarily be social media. If your customers aren’t on social media, that’s okay. Follow his advice, tell stories, find out where your audience is and connect with them there.

EÜ Yeah, and I love how Tyler was saying, just use this time for whatever is going to be most the most efficient of your time. So if for him that means going on vacation, or throwing that once a year party to build rapport with his clients, excellent. Whatever that might be for your particular business, that’s something to pay attention to.

GM And the biggest advantage that I have being in the service business, is that my life is not insane during the holidays. Whereas if you’re in a retail, you are working, you don’t have time to stop and think. So if you’re in a service business, okay maybe you’re not making all the holiday revenues that your retail colleagues might be doing, but you know on the good side you’ve got some time to take a big deep breath, and start doing some planning and thinking for the next year. So use that time.

EÜ All right. Thank you again for joining us for Xero Gravity. We look forward to having you tune in with us next week.

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