Jeremy Weisz 20:28
Interesting. So they may put it in the waiting room where they actually may hang it up in the office. One of those two things. For some reason, I love the different. It gets my creative juices flying. What else have people sent?
Tim Zercher 20:43
So many things. Yeah, so many things we did. So we do for our clients. Along the same lines we do this, these little behavioral health marketing in the wild. So it’s a guide for marketing directors in the behavioral health space. It’s got, like, budget breakdown, percentages and benchmark reports and stuff like that, basically a little tiny book that can guide your whole marketing strategy. So we’ve done that before for, obviously, for our clients. We did another one for a group that was a mailer with kind of some standard information, but it had the company. The company’s brand had to do with sharks, and so it had the whole chunk, like, chomped out. And so, like, even, like, the picture of the CEO, like, half his face was chomped out. It was really cool.
Like, I’m not our printing genius, our graphic guy is, but he found a way to actually get so it looks like an actual postcard that then has, like, jagged edges, and I don’t know how they ripped off the corner, the same for a million copies, but that got a ton of engagement, because people are like, what it looks like, it’s already destroyed before it even opens up. And then you’re like, oh, and it flows into the design and stuff that was cool. We sent a lot of like, fidget spinners. When those were big. We did a whole fidget spinner campaign for a group that killed because even if the doctor doesn’t want it, they all have kids and their kids love it, and they then see it for the next six months.
Jeremy Weisz 22:06
I believe, like, I’m not sure if this is how accurate this is. I believe those started. Those were those started way before. Obviously they become very popular during COVID. But they started because of people with some issues, then they needed something to keep themselves occupied. So it actually has a direct relation to kind of behavioral health category.
Tim Zercher 22:28
Exactly, exactly, yeah, and, and it’s like fidget spinners are one that everyone knows, but there’s another, there’s another thing that we did one time for a group, because a big service that they treated was stress anxiety, and there was another symptom, I can’t remember the other piece, that this kind of toy really is helpful, right? And so what they did is, and we sent, like, 20 or 30 to each doctor’s office, not for them, for them to give out to patients, right? With our branding and our information and a little pamphlet to the doctor of like, hey, we’re the best place to send people if they’re suffering from these things. Yeah, and that did crazy. Well, they were, like, the, I don’t know if you’ve ever seen the little fidget blocks. They’ve got, like, on one side, it’s a switch on the other side, it’s a little spinny thing. They’re really cool. Yeah, they’re really cool.
Jeremy Weisz 23:14
My kids, I think, have every version of those things. So, yeah, I’ve definitely seen that before. Anything else in that. So like you target, which makes sense, you don’t want to target the I mean, that’s key, probably from not only a geographic area, but the type of practitioner, etc. And then you do the warming into engagement to long-term. In the warming, I’m sure there’s a lot that goes on. There’s something else to talk about that happens in that warming because I know that phase, like you’re getting people to raise their hand, right? And so there’s a lot of probably volume. What are the things that work in that warming phase?
Tim Zercher 23:53
I think it goes, there’s a couple of sides. I think there’s probably three pieces. One is just, yeah, like you said, volume, you have to hit them many, many, many, many times for the message to sink in, no matter what, no matter how you’re reaching them, right? And we also recommend hitting them from lots of sides, right? So get an email and a mailer and a digital ad and a Spotify ad and a Google ad, right? Like, so it’s all hitting them from every side. So that’s definitely one piece of it. There’s an interesting thing that we’ve seen works really well in the warming phase, and that’s not letting the primary message be the primary copy. And what that means, and it’s counterintuitive in some ways. If I’m new to the neighborhood, and I’m in an addiction treatment group, and I want doctors to come reach out to me, I could say, we want your referral. We do great addiction treatment groups, right? That’s fine, but it’s clearly just an ad. It’s clearly not interesting.
There’s no value add, right? Or I could say the same primary message with saying, we’re new to the neighborhood, and we want to meet the professionals around us come to a black party next week, right? I’m saying the same thing, but I’m saying it in a way that’s interesting, and actually kind of it’s presented almost more as news than it is as a pitch that works really, really well. And then the last piece is, at the end of the day, I want to inspire curiosity, and so we want to share enough where they’re interested, but not so much where they can, like, check it off in their mental list, right? You know how marketing is, it’s about starting a pattern and then not finishing it until you talk with us, right? Or until you finish the form. But you can’t see the end of the story until you’ve taken the first step, so that it gets people involved. There was a famous, I can’t remember, I think it was a Super Bowl commercial that cut off halfway through them, saying, so make sure you buy and it like, then the commercial cut on purpose, right? And everyone was like, what just happened?
That’s crazy, blah, blah. And I started this whole conversation, and it was clear, if you were paying attention, that the logo was in the bottom corner the whole time. But because it was pattern interrupted, people were Google searching, what was the end of that commercial? Because they want to know the story, like the end of the story. What’s the end? Right? That we as humans want to hear the end. And so sometimes we’ll do that. There’s a group, there’s a campaign we just now concepted for a big addiction group on the East Coast. And the primary thing is, I’m going to say the stat wrong, so nobody look it up. I’m sure it’s wrong. But 75% of addicts treated in our community relapse within three months. And then the message underneath it is, you can help reverse that trend. Send them to us. We do it differently. And then there’s a QR code, if you want to see how we do it differently.
What’s different about your process? Because as a doctor, I know how addiction treatment works in general, but I don’t know what’s different, right? And so it creates that curiosity that pushes them to the next step. And maybe that next step is just visiting the website and now they know more, or maybe it’s scheduling a call for a sales rep to visit whatever. But just creating that curiosity, does that make sense?
Jeremy Weisz 23:54
Yes. Tim, love it. Just to recap for a second, really, with the warming the overall arching philosophy is really delivering value, and that even actually goes into your long term partnership, because you’re like, okay, let’s deliver value. Let’s send a bunch of fidget spinners. They can give them out, because if you invite them to a party in the warming phase, that messaging is more of a give and value to them. And the second thing is, inspiring curiosity, you’re opening a loop, and they just need to close the loop. And you seem like a student of copywriting, direct response. I’m curious if there’s any books or people that you’ve learned from.
Tim Zercher 28:03
In copywriting, specifically, not so much I do what works right? And so I listen and I watch a lot of things, and our process, our theory, is just the weird homogenizing of all the information. I think one of my favorites, and it’s actually a sales book, but Marketing Is Sales, and Sales is Marketing, right, and to follow it, everything is sales at the end of the day, right? Is Brian Tracy’s The Psychology of Selling really, really good book, and I highly recommend any marketer or salesperson reads that. It talks about a lot of those pieces, opening loops, open ended questions, pulling people into a story, into a conversation, as opposed to just telling it to them, showing trust, not saying trust, right? Not saying I trust you, but actually giving you something that demonstrates that I trust you, and therefore you should trust me. Yeah.
Jeremy Weisz 29:06
I think I have that on audio cassette tape, Tim and one of my favorites with Brian Tracy is Eat That Frog. I don’t know if you listen to that one or.
Tim Zercher 29:14
Yeah, I love that one.
Jeremy Weisz 29:16
I mean, it’s pretty I love the book, but it’s like, get the most important things done first, and then the rest of the day is more of a break. And so yeah, he’s got a lot of great books. So thanks for the reminder. It’s been a while since I need to revisit though, absolutely. Thanks for going through that the four phases. Back to the niche for a second. Okay, so you know these people, how did the conversation, though, start when they, I mean, they could have got a broker put it on the market for some, how did it start with you to sell to you?
Tim Zercher 29:53
so I had a business coach that I still use. Is awesome guys bought and sold 15 different businesses, right? Really experienced guy, and I was part of his group. It’s called Tab. It’s, it’s similar to Vistage. If most listeners probably know about Vistage, it’s basically that it tends to be, it is sometimes smaller businesses, not always. And he had the Tab for, like, the franchise for basically all of Colorado. I think there were two counties outside of his ownership, and I was a member of his Tab in the southern Colorado group, and they were a member of his Tab in the northern Colorado group.
Jeremy Weisz 30:35
Just when I thought I’ve heard of every type of business group, I learned another one.
Tim Zercher 30:40
That never stops. There’s no end to them, right? They never, ever stop. Yeah, yeah, absolutely, yeah. It’s a good group, and I really like them, and I love in Colorado, it’s Dr Steve and Laura Drury. They’re both doctors, but of different things, if my memory serves. But they’re excellent facilitators for those things. So I highly recommend them. But so when they were getting ready to sell, they approached Steve, and I said, Hey, you know, help us get started. What’s the process look like? And the big — the big reason that they had to talk to me instead of just put it on the open market, was they were like, we want to sell and exit within the next six months.
And Steve said, well, that’s not happening. I can maybe get you a year if you sell to and brokers say that there’s three ways to sell it. Employee sold, it’s open market, or it’s friends and family. And he said, open market is a two year minimum, at least sometimes longer. If you want to get out within six months or maybe a year, you got to go friends and family. I happen to know a guy, and so he introduced and introduced.
Jeremy Weisz 31:26
Had you talked to that person and told him, you’re looking to buy a company at that point. Or why did he think of you?
Tim Zercher 32:02
No, he knew that I was overly ambitious, and moving very quickly, I built my business from literally zero to I think we were doing 50 grand a month within two years. And so we were like 100%. I think our average growth over the first eight years was 115% every single year. And so he knew that I was growing, and he knew that acquisitions was probably going to be next, yeah, and that was basically it. And so he just kind of said, so what have you ever thought of acquisitions? I was like, well, yeah, for sure, maybe. And goes, well, I have a conversation for us then.
Jeremy Weisz 32:38
Talk about the acquisition process. So you meet, and it was interesting because I’ve had John Warrillow on the podcast before. I don’t know if you’ve listened to his book or read his book Built to Sell. I just was re-listening to it the other week, and so it’s interesting to hear how this process went.
Tim Zercher 32:57
Yeah, it was interesting. It was interesting. Selling a business is no joke. Buying a business, especially right. Never goes as smoothly as you think it will, never right. So, I mean, the negotiating process was fairly reasonable and straightforward. I honestly think that’s where a lot of people think the complexity is in a business purchase. And sure, like, you know, the contract was long, right? And there was a lot of details, but it’s not like it was very complicated, right, especially when you’re negotiating directly, and there’s not a go betweens, I can just simply say, look, my bank won’t give me a loan for the total amount. You have to cover X percentage, and then we can do it. Yes, yes, no, okay, cool, we figured that piece out. Timeline of exit, I can’t do this. I can do this. Does that make sense? No, it doesn’t. Okay. How about this, right? So, like, that piece is actually pretty straightforward. The complexity, the difficulty really was in post purchase.
I did a lot of things, I would say very, very wrong looking back on it, I think I did. I thought I was planning perfectly right going in, but looking back on it I did a lot of things very wrong. For one, I didn’t merge the two agencies right away. I kept them going in parallel, which was not very smart, because then I figured out what one point I was spending 29 hours a month between me and my accounting team just to invoice myself. And I was like, this is ridiculous, right? I’m paying you guys an extra six grand just to tell me that I made four grand for myself. I don’t need that, right? And so there were a lot of complexities there that I didn’t anticipate. And also, old boss, he’s on our side. He’ll believe us when we say we did our best. It’s not our fault that XYZ went wrong. New boss, we got to impress your team’s doing it all wrong, right?
And so there’s lots of the back and forth because the teams weren’t one team, right? And so of course, they weren’t working very well, not by anybody trying to be petty or anything else. It just doesn’t work well, right? And so what we did is, eventually we merged both. And I said, okay, this is Nope, we’re done. We are now one company. Here’s the new org chart. Everybody get familiar with your new boss and be cool with it, because I’m not refereeing between myself anymore. This is done. It’s like that was one big element that I think was a surprise to me, and I think the other piece was I was caught flat footed in how disrupted the new sales, flow of like the of new business coming in would be by the purchase, um, partially because I just didn’t understand how a trains sales process went. It was very different than how Z3s process went. And partially because I think I underestimated the importance of the relationship in my agency now and Z3 Originally, the relationship was all under the account manager.
Our account managers are also the strategist, and they’re also the project manager, and they’re also the sales team that grows you. They’re everything right? And so once you sign the contract, basically you don’t hear from Tim unless something really big is changing and you need my strategic thought and you’re willing to pay for it right. A-Train was very different. They were involved in, like, every client, check-in every month.
Jeremy Weisz 36:35
When you say they, you mean the owners.
Tim Zercher 36:38
The previous owners, yeah, because there’s two owners, it was a husband and wife
Jeremy Weisz 36:42
Then that’s expectation with the clients now.
Tim Zercher 36:46
Exactly, exactly. So post purchase, new things changed. I say nothing’s going to change, and they immediately lose access to ownership and strategic brains in all the meetings. Big problems, right? For obvious reasons, but I think those two pieces were probably the biggest and that, yeah, it caused a lot of disruption. It caused a lot of lost revenue.
Jeremy Weisz 37:11
How long did the owners then stay on for after purchase?
Tim Zercher 37:18
Yeah, so they stayed on for, I believe, three months in kind of a silent phase of it sold, but now we’re trying to figure out everything before we announce anything, right? And then I believe they stayed on another three and a half months after that. So it was about a six, seven-month exit process. Again, looking back on it, if I was going to do it again, that would have either been much longer, like a full year, or it would have been instant. This is done. Shot moving on the halfway point, as most half measures, work wasn’t ideal.
Jeremy Weisz 37:59
How’d you remedy Tim you know now what you realize is, okay, these clients are expecting me to be on all these meetings. How did you end up remedying that at the time?
Tim Zercher 38:13
Well, again, probably would have done it differently if looking back on it, but I did it, and I think two different ways. I think on one side, I said, look, guys, it’s not possible. When you have two owners and 35 clients, it’s doable. When you have 55 clients and one owner, I can’t be in 55 meetings a month like you can’t even schedule it. Like it won’t even schedule. Even if I wanted to just sit there all day long, I wouldn’t fit in the schedules, right? Because no one wants to meet on Fridays and no wants to meet on Mondays, and no one’s gonna want so that’s like, the time constraints just become impossible. And so how I handled it was, I said, look, account managers, you need to be the strategist in the room. They were very experienced. They totally had the ability. They had never been given the authority to do it. So I said, look, I’m empowering you.
This is your account. It is your job to keep them happy and satisfied and paying. Period. We will support you. Leadership will support you. I will step into meetings. Donna, who’s my COO, will step into meetings when you need us. But that’s not every meeting. It’s upon request, and it’s going to get built to the client. So you got to figure out how to do that other project an hour faster, because you got to build my time right? And it sort of kind of worked. I think some clients were happy with that approach. Some clients, frankly, didn’t really want the previous owners in there anyway. So they were like, awesome. I get to save two hours of my billable hours, and I can put it towards other stuff. Others were less happy, right? And said, well, if I can’t have the actual like experience in the room, I’m out, which did cost us a lot, but at the end of the day, I mean, it’s not sustainable to have ownership in every meeting, right? That’s just not practical.
Jeremy Weisz 40:10
So I can see the journey, how it started, and then you kind of figure out what makes sense, as far as the terms, and also from them staying in the financial piece and the transition. How did you come up with the original valuation, or, how did they?
Tim Zercher 40:31
Yeah, so we went pretty simple, and we said it was, I think 1.5 of EBITDA. I think they originally asked for three times EBITDA, I’m glad I did not say yes, because it was not, it was not worth. It wouldn’t have been worth three times that we paid for sure, just because of all the disruptions, which they didn’t know were gonna happen either, right? No one knew that those disruptions were gonna hit. So I think that was how we went with it, just because we didn’t have a much better way.
Jeremy Weisz 41:04
Was there an outside counsel that came up with that?
Tim Zercher 41:10
Yeah, yeah, yeah, yeah. So my business coach, Steve, we’re both clients, right? So he had kind of a double-sided interest in making it a success. He helped us kind of come up with some of the basic numbers. And he was like, look, here’s generally how it can work. Boom, boom, boom, right? He kind of, he laid out the general framework. And then from there, we went down our routes, yeah, because I think, for instance, they just had a number in mind, and it’s like, well, what’s that based on why? And so Steve was like, well, it’s a certain number of EBITDA. I’m like, Okay, well, then we think it’s worth three. And I’m like, Well, I think it’s worth one. So where are we gonna end up, right? And I think also going back on that, what I would have done very differently is I would have based it on EBITDA, based on recurring revenue only, right? Because I think that’s a big…
Jeremy Weisz 42:07
Because there was some one-time, one-time sales there that was incorporated into it, even though it wasn’t recurring.
Tim Zercher 42:14
Yeah, yeah. Well, when I purchased a train, they were 60% onetime projects in terms of revenue, which is a lot, right? And again, not a big deal if you have two salespeople, both owners, going full time. A big problem if you have point five of a salesperson going full time, because I was still also selling on the Z3 side. And so that was definitely an issue as well.
Jeremy Weisz 42:44
Thanks for sharing that. It’s really helpful. Talk about, with A-Train marketing so people can understand a little bit more about what you do. I love kind of the referral campaigns in the four phases, yeah, what did you do with, there’s a you’ve had, obviously have a lot of clients all over the over 30 states, but Jefferson center in particular. What did you do with them?
Tim Zercher 43:09
Yeah. So they’re a cool case study, cool example, because it’s for one thing, the campaign is still in process. But for two they followed a very intelligent plan. It’s the plan that we always recommend to clients, but very, very rarely can leadership and the marketing team and the finances all agree to follow that plan. And in their case, what we did was a digital ad campaign focused on their Medicaid base, because they are a community service group. So they provide a whole plethora of services, from primary medical to behavioral health to addiction treatment, family counseling, all sorts of different verticals, a large group, I think, 20 locations, something like that. They’re a large team and a lot of moving pieces. And so instead of targeting ads for a specific service, which is how they had been going previously, they said, look, most of our revenue, it’s like 80% of their revenue, is Medicaid.
Why don’t we just target people specifically for Medicaid and say, look, we are the best solution for all of your behavioral health challenges, needs, services, therapies, whatever. If you’re in Medicaid, here’s how it works. Here’s how easy we make it. So that was kind of the original concept. What I like about their campaign is they followed the full — we call an iterative process, and that’s going to be the only time I say that word because I can’t say it right, no matter what I do. So phase one, we generated multiple initial concepts. They then tested those concepts with their internal team to determine what would fit best with their actual audience. They then ran the ad campaign for that audience. We then did a next round of iteration based on the actual performance from the first round, right? And not just I saw a funny meme earlier today with AB testing. Marketers are like, is, do you like this guy or this guy is the exact same guy?
The difference is a tiny bow tie, right? Like, not just the exact same thing in five different ways, but totally different pieces, totally different color schemes, totally different expressions on the actors face, different primary messaging, etc. And then we said, okay, now with the knowledge we have, what actually is performing better, let’s build out a whole new ad campaign built on that. And then the plan is eventually we’ll do a third round and a fourth round, kind of on a quarterly, staggered basis. And that works really, really well, and it worked well for digital, you can’t do that if you’re doing billboards. I can’t reprint the billboard every single month, but you can do that on digital ads really cleanly and really effectively, and it really dials in on what performs best.
Jeremy Weisz 43:30
Tim, thanks for walking through that. I have one last question, before I ask it, I just want to point out people can check out atrainmarketing.com to learn more and more episodes of the podcast. Last question is, you mentioned the Brian Tracy book. I’m just curious any other favorite books or resources that you like, that you’ve learned from.
Tim Zercher 46:26
Let’s see, there’s a whole list. I’ll give you two though that popped to my mind, and maybe they’re not the best, but one is How to Make Friends and Influence People, and probably what every guest on your whole show says, because it’s such a classic. I read that back in college, and it really, really helped me kind of start my career.
Jeremy Weisz 46:55
I’m trying to bribe my kids to read it, because I think it’s just valuable if you look at it from the other person’s perspective and really pay attention to others, right?
Tim Zercher 47:10
Exactly, well, and it’s human nature. Human nature, right? It’s the same now as it was 50, 60, years ago. We’re not selling typewriters anymore, which is a lot of his examples, right? But beyond that, it’s the same stuff. People still behave the same. And so I think that really helped me. Not most people could launch a whole business straight out of college and do very well. The reason I did well is because of the relationships I built using things that were in that book. Not because of me. I’m not some smart person, really. I built good connections, and they helped me build these things, right?
And I think the second book is The Little Red Book of Selling, and I can’t remember the author. You’ve got Google Open. I’ll let you search it out. But really good. Again, very basic, but really good, basic psychology, basic human behavior. And also just really applicable, really applicable to kind of everyday life, some of the stuff, some of his recommended strategies are maybe not what I would recommend.
Jeremy Weisz 48:15
Jeffrey Gittimore.
Tim Zercher 48:21
Yeah, The Little Red Book of Selling, yeah, he has some strategies that would be construed as, like, unethical selling strategies that I might not recommend, but like at least, is really good.
Jeremy Weisz 48:35
The Little Red Book of Selling: 12 and a Half Principles of Sales Greatness, How to Make Sales Forever, is what the subtitle is.
Tim Zercher 48:43
Yep, there you go. There you go. See, I’d say at least 80-85% of it was dead on, really smart stuff. Again, old book, nothing that new, but great principles.
Jeremy Weisz 48:56
Love it. Yeah, Tim, I want to be the first one to thank you, everyone check out atrainmarketing.com, and we’ll see everyone next time. Tim, thanks again.
Tim Zercher 49:06
Thank you so much. I really appreciate it.
