How exactly does a classically trained marketer transition from big-budget ad agencies to founding a consultancy that propels private equity portfolio companies to their revenue goals? Summer Craig, founder of Craig Group, joins Michael today to share her journey from corporate roles at HomeAway.com and Gulf States Toyota to building a 23-person growth advisory firm. Along the way, Summer uncovered a critical market gap: the challenge of attributing marketing spend to revenue, especially at the board level. Leveraging her experience and a key early client, she pivoted from media buying to strategic consulting, focusing on the underserved lower middle market. If you are struggling to connect with private equity firms, Summer’s insights into aligning marketing strategies with financial outcomes offer a roadmap for consultants aiming to make a significant impact in specialized markets.
In this episode, you’ll learn:
How Summer identified a critical market need while working with major brands and agencies.
The steps Summer took to transition from a corporate employee to a consultant, including securing her previous employer as her first client.
How Summer expanded her client base through strategic networking, and how adding a partner with private equity expertise proved pivotal.
The critical financial metrics Summer tracks to ensure sustainable growth, including customer acquisition cost and margin analysis.
How Summer adapted her firm’s messaging to resonate with private equity clients, moving away from marketing jargon to the language of value creation.
Why proactive outbound marketing and awareness building are essential, even in a referral-driven business model.
Welcome to the Consulting Success podcast. I’m your host Michael Zipursky, and in this podcast, we’re going to dive deep into the world of elite consultants where you’re going to learn the strategies, tactics and mindset to grow a highly profitable and successful consulting business.
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Summer Craig, founder of Craig Group, is a digital marketer with 20+ years of experience driving ROI. Her career spans from ad agencies like GSD&M to leadership at AOL, HomeAway.com (VRBO), and Publicis ZenithOptimedia. Craig Group, founded in 2019, focuses on data-first sales and marketing. Outside of work, Summer is an avid outdoorswoman and mother of three, known for her drive and commitment to achieving difficult goals. She is a strong partner for private equity-backed and family-owned businesses.
00:00 – What Craig Group Does: Growth for Portfolio Companies
Hey, Summer. Welcome.
Hi. Thanks, Michael.
Yeah, great to have you here. I’m looking forward to our conversation. So, today you are at 23 team members at the Craig Group. And I want to first take us back in time in terms of how you got to where you are and how you built the business to the point that it’s at today. But before we do that, just, just take a moment and if you could explain like in a sentence or two, what does Craig Group do? What are you known for?
Yeah, thanks. And thanks for having me on. I’m glad to have all your listeners here today as well. Big fan of the podcast. Our Craig Group is a growth advisory. Simply said, we help grow through sales and marketing levers and our clientele is specifically portfolio companies. So they have some sort of private equity or institutional capital behind them. So that’s our niche in terms of our clients but no vertical alignment. So at the end of the day we come in first hundred days and we help portfolio companies grow, meet their revenue goals.
Okay. So let’s go back in time. Hit that rewind button. How did you get into this line of work? What were you doing before that you feel really kind of put you into this trajectory?
01:16 – From Corporate to Consultant: Summer’s Journey
Well, I have never been an employed consultant before in my life and I opened a consulting firm, so there’s that. Classically trained, I mean it’s fine, you can do it, you can do it. But classically trained marketer, so undergrad, grad school in marketing, big agencies, GSD&M, Publicis Zenith. So really classical experience, huge brands, billion dollar type budgets was my kind of initial cutting my teeth which is, I would recommend to people that really want to get to know the nitty gritty of marketing, that’s one way to do it. Went from there and then had some in-house experience. Was so fortunate enough to have been in-house at HomeAway.com through their IPO. During that experience, really got introduced to Austin Ventures and what the world of VC and private equity looked like. And so that was really my first understanding of what that was. And then was working on the internal team there and then went on to also lead other internal teams. Most recently at a largest Toyota distributor in the US, Gulf States Toyota, which functions very much like an OEM working on their marketing, specifically their digital and their go-to market. So my background and I really scaled up with the Internet like most of us of a certain age, so I came up with the Internet and so really live breathe digital, operations, reporting, analytics. That’s my functional background.
02:50 – Spotting the Gap: Marketing ROI Insights
And I had tons of success from a corporate world, but always had an entrepreneurial itch really about value creation, being able to create more value both for my team and for myself when you’re building something instead of working for a very large corporation. And I’m sure a lot of your listeners can relate to that being a bit of an origin story. But the core idea, and at the time I was working with an ad agency of a hundred people and all the resources in the world, and still really couldn’t attribute marketing to revenue. There was still gaps in being able to truly show ROI. There’s all million excuses for that. There’s all kinds of data issues on. It was a lot of excuses and I didn’t see a lot of either consultants or agencies or whatever you want to call it, even single shingle people that were really able to synthesize what do boards look for. When you’re sitting at the board table, you’re in a marketing and a sales position, what are they trying to see from you? What does success look like? How do you find that even if the attribution numbers are hard to get to? So I just felt like I had a passion for that specific question and I could build something out of it. So that was the day one idea, “Oh, I think I can do this.”
Let me ask you, because you’re answering– I mean, that was going to be my question. It is like you’re coming into this with a pretty broad set of experiences. You’ve worked with all these different brands, different industries. Like, the common theme so far seems to be kind of agency life, if you will, and digital Internet, that sort of thing. But then now you’ve explained like what you spotted was a potential opportunity where boards aren’t really able to attribute the connection between marketing and sales. They can’t really identify and clearly again articulate the ROI and you know, where they’re spending money and the ROI that they’re getting from that. So you saw that as an opportunity, is that correct?
04:56 – Landing the First Client as a Consultant
That’s absolutely correct. And in my roles, in my in-house roles, I was fortunate enough to be in those rooms. So I was the one that was on the hook for, “Hey, present that marketing slide to the board.” And so I’d been in the seat and I saw the problem that I thought, “I could solve this problem and I could I think I could build something with this problem.” And so that was initially the issue. And I was fortunate enough, the folks at Gulf States, they are the salt of the earth people. I would never work for another corporation again. They are my people. They were kind enough when I told them I was starting my firm and leaving, they said, “Okay. Well, great. Well, we’ll hire you.” So they hired my firm.
So they were your first client?
They’re my first client, yeah. So within a matter of two weeks, I was no longer an employee. I was a consultant. And I had my first client. And I was able to add value to what I saw as their problem while also scaling my business and looking and saying, “Okay, how can I solve other people’s problems?”
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So we see this very consistently. And listeners of the podcast will probably remember me mentioning this statistic before. But in some of the studies that we do at Consulting Success, we found that 50% of people say that their first client was a previous employer. Doesn’t mean it was the one they just left, but it was a previous one. So you definitely fall into that camp. Is there anything that you would advise in that process or from that transition of going from an employee to now starting a business and how you brought that employer to become your first client?
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07:32 – Transitioning from Employee to Consultant
Yeah, I think so. I mean, I think, obviously, we had already established a lot of trust. They knew that I had a skillset that was unique. And to be perfectly frank, I mean it was easier to hire me than go try to fill my position in the amount of time that we were together because it was a senior position. So it was a win-win. And so I think that if you can find a unique skill set you have and your employer sees and needs your skill set and it’s value add, that’s when to go after that. Oh well, I mean, if they can replace you easily and quickly, then there’s just probably not going to be a fit there. But we had a unique problem, they needed runway to figure their situation out. I needed some runway. So it was truly all boats rise and that’s the only reason why I think that could work. It can’t work if there’s not a real need.
And what happened to your compensation? So some people kind of think about there’s usually a bit of leverage or benefit for both parties, right? You get the client, so it’s an easy win because the relationship is already there. The employer, that client is generally getting access to you maybe at less money than they’re paying you as being a full time employee because you don’t have all the benefits and so on and so forth. What did your kind of situation look like and wondering how did you kind of position that?
Yeah, that’s exactly right. That’s exactly right. So I mean, I think we were both eyes wide open about it, which is, “This is clearly good for me. I’m starting a business and you’ve just now given me revenue. And so because of that, I am now giving up that, a part of a bonus. I’m giving up benefits. I’m giving up all of the extras that you get as an employee.” And we had a verbal conversation about it. So it was ‘I see you, you see me’ conversation. But we didn’t necessarily have it like super papered up because we had a lot of trust there. So we understood what was going to happen. And again, I think that that’s the only way it can be through that transition that it’s got to be about trust and friendship. And it worked, right? So, I mean, I’m eternally grateful that they gave me that opportunity to have a moment where I could continue to add value while building a business.
And the business I’ve ended up building was a pretty, pretty strong pivot away from that particular work. The core idea of revenue analytics and board reporting is still there. That is one of the core tenets of Craig Group. But we took a pretty, pretty significant turn and that was because of the people I had around me and some other insights I had. So, what an incredible blessing to have revenue coming in, people you trust around you while you can stay up at night after work with a pencil and start thinking, “What’s my opportunity?”
So Summer, I want to get into that transition because clearly you went from working with an auto dealership to working just with private equity funded companies or portfolio companies. Before we get to that, and maybe this is actually potentially already part of that kind of conversation, you mentioned how you got this first client, where did clients 2, 3, 4, 5 come from? Just for those wondering, what did you actually do as you launched? How did you actually start to build some of that pipeline and bring people in the door? Walk us through where those came from.
10:46 – Building the First Client Pipeline
Yeah, absolutely. I will say that Gulf States Toyota is wholly owned by the Friedkin family. And so they act very much like a family office. And so having been there from a long time, it is very much like working with an investor, like a family office investor. So that’s where I was coming from. I had this private equity in my head and I’ll tie this to my next client. So I think just like so many of us, it was an open door opportunity. So my network, I put myself out there to my network.
I’ll just pause you for a second. When you say that you put yourself out there, I want to get very clear on this. So what did you actually do when you say put yourself out?
Yeah, I’ll get super specific. So I went ahead and did, just because I had the skillset, I did build a super simple website. I also did a simple LinkedIn revamp, but I also sent a personal email and a phone call to people in my network. It was a curated list. So what I didn’t do is blast it out kind of, “I’m here, world. I’m open to work.” I knew that I needed to have a couple people that were more than just referrals, they were more like trusted advisors. So the people that hired me and the people that referred me into my first clients were people who I consider almost like they let me kind of crawl up on their shoulders and say, “Hey, here. Let me help you.”
12:07 – Strategic Networking for Referrals
How many people in the curated list were there?
Maybe like 20. Probably like 20 people that were people that I trusted that I could be very vulnerable with and give them my ‘from the heart’ spiel. And it turns out there was two in there that really transformed our business.
So you said you were very open and vulnerable. If we could go a little bit deeper into that was. If you remember the messaging was it, “Hey. This is what I’m doing. I’m so passionate about it. Here’s the problem I want- I’m going to be solving. Here’s kind of the, the value that I can bring.” Or was it more, “Hey, I’m really looking to get your feedback. I value your opinion.” Or a completely different direction. I’m just wondering how did you approach it to get the kind of result that you did?
I think one of the reasons why Craig Group is as successful as we are today is because it’s about the people around us and the people that we are. So everyone I have gone to and all of my employees today, even just today, I had a conversation and I said, “Thank you for teaching me that,” to an employee. And so that is how I went to this group of persons which was, “I’m starting a company. I’ve never been a consultant. I’ve never had to sell in this level of business before. You sell internally, but this is different. So I come from this different background, but I believe in myself and I think I could do this.”
And then they knew me personally, which, side note, I had just had my third baby a month before I started the company. And so I was having a very, I still do, I’m a very lean in person. So instead of kind of going back, it was like, “Wait, how can I keep working hard but do it which creates more value to me and my family,” instead of like a ‘punching the clock’ kind of a ‘climb the ladder’ gig. So these are people that knew me, they believed in me, they had seen my work. So I didn’t have to really sell myself to them it was more, “Tell me what you think. What do you think about this? Who needs this? What am I missing? Tell me about product market fit.” These people had sold end products, they knew clients, they had done it. So they were able to really coach me into– And then amongst a lot of other people as well, had coached this firm into where we are today, into our really specific ICP that we have today.
What you’re mentioning right now, I think it’s a very powerful approach that not a lot of people use or not as many people use that could use it. And what I mean by that is you’re essentially selling but without coming across like you’re selling and that, I don’t mean that your intention necessarily trying to sell, but you’re kind of casting like a net out and saying, “Hey, do you know anyone, any suggestions that you have?” But to that buyer. Because we see this consistent with clients and we work kind of through a similar process. And when you put it out there, of course, the person you reach out to, you’re not saying, “Hey, do you need help directly?” But if they need help, they’re going to let you know because you’ve just told them who you’re looking to help. So it sounds like you went out to 20, you got two back, nice 10% response rate and that kind of got you off to the races. There we go.
So now let’s fast forward a little bit. Today, you’re very focused on working with private equity portfolio companies. Where do your clients come from today? What are you doing? What would you say are kind of the top one or two channels or methods that you’re using to bring in high value opportunities consistently.
15:42 – Scaling with Private Equity Clients
Those quick, those early wins and then subsequent wins came from private equity or family office backed PortCos. So we found quickly that that was going to be an avenue for us. My husband is in private equity, I have a little bit of experience in venture but I don’t have the street credibility, right, of that. So I needed to have somebody else on my team that did have that. So I brought on the brilliant Libby Covington and she came out of private equity, among other things, was also an internal in-house marketing leadership person. So I was lucky enough to persuade her to join the group. And honestly, the number one place that we have grown from has been from her referral network and then my referral network. So it has been, I don’t know the actual number, I’m going to throw it out there at over 90%. Almost all.
I was going to say, you’re the attribution person. Like, come on, you got to know where the number–
Right?Isn’t that the truth? But when people say, “Oh, I heard of you from so and so, from so and so and then I saw–” You’re like, “Okay. All right.” But you’re like, “Okay. So I should give partial attribution to a little bit of marketing that we’re doing. But I’ll give almost all attribution to, “Oh, I know Libby from– I used to work with her.” “Oh, Summer. Oh, that’s great. I knew. I talked to so and so who used to work–” And so we’ve been really fortunate to have a network.
But I think that the takeaway for your audience here is I didn’t have that on my own. And I felt like I had a skill set. I had a real functional skill set that I could bring and I had something to do. But when I go knock on a private equity door, they’re going to be like, “What are you doing? Why are you here?” Right. So that’s kind of where we were for- And I said, “Ah, yeah. I’ve got to supplement this because it’s a really good idea. I need a partner to do it.” So then I made that decision to bring Libby in. And it’s really been a game changer for focusing on our ICP, which we believe is an underserved part of the market. We specifically focus on lower middle market. These are smaller deals and they just can’t afford a big consulting agency and they don’t need to go hire an ad agency. That’s not the right fit either. So we’ve found that we’ve got this great pocket, but I never could have gotten there had I not think acknowledged that I am not all things. And I knew I didn’t want to be a single shingle, I wanted to build a firm. So those were things I knew early on.
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18:14 – Adding a Partner for Market Credibility
What was the thought process for you when you decide, “Okay, I need a partner. I need to bring somebody in who has that private equity kind of experience or more connections in that space,” than you. How did you think about that from a cost versus investment perspective? Especially if it’s you, you have three young kids, you’ve just gone on your own, you have some clients. But maybe if you could talk a little bit about kind of like what stage was the business at when you decided to bring Libby on and how did you think about that in terms of a cost versus investment?
Yeah, very early. I mean we were a year in when I decided to bring her in so very early. Back to those early clients, we had a very large second client, extremely large. So seven digit type client backed by private equity, massive private equity firm out of New York. So that client was great, but the work we were doing was not in our core wheelhouse. We were doing some work that was a slightly different work. It was really focused strictly on media buying, which is something we can do for clients, but that really isn’t the core offering. So I made maybe the hardest decision I’ve ever made for business, which ended up being the right decision. But I knew that we were going to use this revenue and reinvest it in our pivot. So I knew that I wasn’t going to take more salary, I wasn’t going to like try to pitch more of those clients like that. It was like, this is going to get us, this is a big, big cash flow. It’s really great. This is going to set us up for future success.
So I took the revenue from this super large client and was able to invest in Libby. I was able to invest in other staff members. We were able to start building a pipeline that was selling our core focus, which is strategic consulting and implementation, not just media buying. But if I hadn’t had that big client and hadn’t made that decision early on to say- we put every dollar back in the business that that big client afforded us. And that is like a platform. We had a platform at that point. And if I hadn’t had that, I mean, I don’t know if I would have been able to hire another expensive partner level person. It may not have been possible.
20:34 Revenue Goals: Deals Per Partner Per Quarter
You go through any kind of mental calculation around the forecasting of, “Okay, it’s going to cost me X amount to bring Libby on. That means I need to achieve Y amount by this date.” Anything from a financial perspective that you could share.
All the time. Yeah, all the time. And we still do. We still do. So now we have Libby plus two other partners at the firm. And it’s really expensive. It’s extremely expensive. Our math that I think I can, kind of share with the group is everybody, including myself, we have to bring in a deal every quarter. And again, our deals are pretty big. So a new client for us in a quarter will be $150,000. And so every single person has to bring one of those in every quarter. That’s how we pay for ourselves. So, super hard. And in some industries, think like SAS or any other kind of direct sales, that’s such low volume. But in what we do, we have a super specific niche and we’re a boutique firm. So we can’t, we couldn’t take, if we got 20 clients in a quarter, we couldn’t scale that quickly so the one a quarter, which is essentially four clients a quarter, that’s as fast as we can go. That’s the goal and that’s how we pay for ourselves and then have enough to reinvest. So that’s not necessarily a stretch goal. That’s where we need to be. And we don’t always get there. So we have not gotten there every quarter. So there’s been some times where it’s- we’re just not selling in what we need to sell in. And it’s tough to grow a business and I’m constantly really looking at lean operations and where can we be really smart? I think that we’ve already scaled in a very lean way. But you know, consulting, it’s just smart people. And smart people are expensive. So it’s not like you can say, “Oh, I’ll downgrade my smart people talent.” You can’t do that. So you have to downgrade other places or you have to charge more money and so that’s what we’ve been doing.
Yeah. How do you think about that metric? So each partner is responsible for bringing in one new deal. So it’s a six figure deal in in a quarter. So that’s each partner four deals per year times four people. One, did you have any pushback when you said, “Okay, here’s what we need to be doing, we all need to be bringing in one deal per quarter”? And if you did have any pushback, how did you deal with it? No pun intended. But yeah, I’m wondering- because that’s the first part of my question is how do you get everybody aligned and in agreement of this is the plan? And then the second part of my question is, as you mentioned you haven’t hit that target every single quarter, so how do you– because I think this would be very helpful for others – how do you kind of, not debrief, but I guess deconstruct that situation of “Okay, we set a goal, we’re not hitting that goal, what do we do now? How do we regroup? How do we make sure that going forward we’re going to increase our chances of hitting it?” What have you kind of specifically done? So I guess those two questions.
Absolutely. So our audience, our ICP, we sell into private equity firms. So the private equity firm knows us, we build trust with them. Then they introduce us to the CEO of the portfolio company, typically right after a deal closes or when there’s some type of a need, usually somebody’s leaving, there’s turnover or there’s some other kind of issue. That is a tough sales cycle, very long. It’s extremely trust based. This is not something that- private equity guys do not bring firms into the fold that are not really the real deal. So we are pressure tested. And so our cycle in terms of our deal cycle, it’s long. We’re talking nine months, if not more sometimes, between first contact to actually getting a deal. So that’s a problem. So I got a lot of pushback because that’s sort of the state of the state and that kind of is. And so my answer to that and what we’ve been talking about with our team is that means we have to have more pipeline. It’s going to be slow. We know it. That is just the way it is. So that means that we just have to have more volume, we have to. And that’s the only way we grow. And it’s super challenging.
But we’ve done our TAM analysis for our market and there are 3,000 or so private equity firms that invest in lower middle market deals in the US. We probably have talked to and touched 300 legitimately. So I don’t have a ton of, I don’t know what the word is, not compassion, but like we need to do more. And so part of that has been on us, which has been an investment in more awareness marketing, more outbound. And so that’s happening. So there’s a major investment in outbound, and that needs to happen. Not that anybody closes a deal that way, we all know that. But it definitely supports this trust that we have to build. As if somebody has seen us and then they heard us speak at a conference and they saw our newsletter, they’re a little bit more likely to take our call. So there’s been more outbound, there’s been more marketing. But the fact of the matter is, is when you have a slow sales cycle, my team, we all know we have to be talking to multiple PE firms every day, and we have to meet people that we don’t know, that we don’t already know. And that’s the only way really that Craig Group grows and gets to the next level.
What I’m hearing you say, if I just kind of summarize it, is historically, it was, you got to where you are based on doing great work and referrals and your network. But now to get to that next level, you can’t rely on that anymore. You need to be more proactive in terms of reaching new people, getting in front of a lot of new private equity firms, which then in turn put you into the different CEOs or their portfolio companies. Yeah, that’s interesting. Okay.
I’m wondering about your positioning. So, you described very early on in our conversation a very succinct message of here’s what we do and here’s who we do it for. Is there anything in the positioning and the messaging that you’ve developed that maybe didn’t work over time? Like you tried this, and it just didn’t seem to land or resonate, and that’s why we adjusted to this. Any lessons from that process that you could share?
26:50 – Adjusting Messaging to Match the Audience
Yeah, there is. Because I’m a classical marketer, sometimes I have a tendency to use marketing words, marketing language. And so most of what we do truly is digital transformation and digital operations. It’s really what we do from a marketing standpoint. Private equity investors don’t totally understand what I’m talking about when I say things like that. They think I’m talking about like taking their files from the office to the cloud. That’s not what I’m talking about. And so I would say things and I realized that my sales message was missing because I was using marketing words. And so we actually used to have a subhead on our logo. And it was like a strategic digital advisory. And we had to totally rethink that because we act- That is absolutely what we do. There’s no doubt. But that doesn’t make sense to who we were selling to. And so I had to back off and take that feedback and learn that my person I’m speaking to, speaks a different language. So let’s use the words that they use. And so another word that we use instead now is talking about value creation and enterprise value and what that means and how we can pull levers and enterprise value. Part of that is digital assets, go-to market, so they understand that if you put it in kind of a financial construct. But I had to be coached on that because I came at it from a marketing standpoint.
How did you realize that? What were you doing?
I feel like Libby probably was like, “Hey, you ought to quit saying that because no one understands what you’re saying.”
Right, okay.
You know. And then I’m pretty sure I probably asked people, like, “Is this confusing?” And somebody probably told me, yes, but I got some feedback. And so we were like, “Okay. Yeah, this is not landing. This is not right.” So, yeah, but I think it was just feedback. But we literally changed the tagline of our company because of that confusion.
Well, no. I appreciate you sharing that because I think a lot of people will resonate with that. They’re used to using the terminology, the language that is just used kind of in the industry broadly. But when you are solving a very specific problem or delivering a result in a very specific area, it almost always pays to be more specific with your choice of words and language. So I think that’s a really great example of it.
So you introduced and talked a little bit about one of the metrics that you’re using in the business, which is number of deals to close by each partner in the business. What other metrics do you use or do you as a CEO and leader look at on either a daily, weekly, or monthly basis? Oftentimes, people think vanity metrics, “How many people came to our website?” or things of that nature. And maybe that’s something that you look at, I don’t know. But what are the ones that you feel are actually the most important for a boutique consulting firm?
29:42 – Key Metrics for Boutique Consulting Firms
Yeah, absolutely. I think it’s funny you mentioned that. If I see website spikes, I have an alert set up, it’s a problem. If we see it, that means something is wrong. We have a bot. Something has happened. So we should have very light web traffic because again, there’s 3,000 people here that could buy our services. So I joked to my team, like, if you talk to me about web traffic, that is not it. It actually could be a sign of an issue.
I look at really two things that kind of keep me up at night are my metrics. I look at them probably weekly. The first one is margin. So I look at gross margin and net margin. Our gross margins are okay. They’re not bad. We’re approaching 70%. I wish we could get closer to 80%. So the gross margins, not terrible. Net margins are tough because, again, we hire expensive people. So net margins are tough. It’s something that we’ve got to get there. I think we’re not quite there. I’m not there yet. We’re not to where I feel like we’ve hit a net margin sweet spot. So that’s something that we’re constantly saying, “Okay. Well, what if we do this? What if we staff this level person? What if we switch this talent model?” So, we’re definitely evolving, and the challenge there is every client is a little bit different, so we don’t have the ability to just rinse and repeat like some consultancies do. We’re truly doing bespoke work, which is awesome. Huge value to our clients, but it’s expensive. So net margins are a challenge. So I’m constantly watching it. I watch it by client, by team. But I say we cut that data every way we can.
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And then the other one that I look at is customer acquisition cost or CAC. So it’s what is it costing us to acquire clients? And again, I’ve got a big BD team, I’ve got a lot of partners. We have, in my opinion, very conservative overhead. But there’s overhead. So I’m always trying to watch that. I believe right now that it’s too high. I think that as we grow, that’s the metric that I’m needing to come down because if you look at lifetime value, I have a customer and the customer acquisition costs, I really need that ratio to be better than it is today. So that’s something that I look at a lot.
And sorry to interrupt, what would that look like? So from a best practice perspective for you, what are you, as a target, what are you aiming for? What would you like to see the cost to acquire a customer be as a percentage or a dollar?
Yeah, sure. Right now, our CAC, and again, it’s too high. So right now our CAC is in the- it’s about 30% and it’s just way too high. We just can’t sustain it. Again, we have an expensive staff. So having to have very high talent people on the team like so many of our consultancies do, that’s something that is going to be a factor in CAC. And so I don’t just count headcount, I also count, we do sponsorships, investments, marketing, advertising, all of it. And so I really need to get that ratio down substantially. I’d like to see it cut in half. That is really what I’d like to see. And again, that I think comes with ability to just have more- I think we’re kind of right at a growth precipice where you can start kind of spinning and be able to scale without hiring another super expensive person. And that’s something that I look at and think about every day which is how expensive is this to acquire and then how expensive is it going to be to service them?
Got it. So just for those who might be wondering, how you actually arrive at that percentage or at that number, could you just, at a high level explain what are the different components that you add up and then divide by the number of clients, or how do you actually go about arriving at your CAC number?
Yeah, so our customer acquisition costs, and actually for those of you listening, I gave a free CRO Dashboard download away on my LinkedIn page and it links to this very calculation. So if you go to my LinkedIn at Summer Craig or craiggroup.io, you can find me, there is a free downloadable dashboard. And so it’s already out there. I did it about a month ago and it helps you calculate CAC and LTV in a really easy way. So we just did it in a quick dashboard so people could quickly do it. So there’s that.
But our CAC, we’re going to be looking at headcount. So I look at BD. I reduce that cost by any type of operations support. So it’s not 100% of their salary. So I look at what part of their hours and their job is internal facing versus what is purely BD. So it’s only that BD portion that we count in CAC. And then I count any type of sponsorship, sales activity, any type of spend. So, that’s going to be your core cost number. And then the other side is how many clients did we get? So what was divided by the total number of clients that were acquired? So that’s the math. And again, it’s out there for all to have in a spreadsheet.
Yeah. If you can actually maybe just send that over, Summer, we’ll link that in the show notes as well. And that way people have an easy way to find it.
Well, listen, there’s so much more I know that we could dive into. I want to respect the time that we have in the calendar here today. Before we wrap up, I’m wondering when you look at where your business is today and maybe some of the challenges or struggles that you’ve gone through, or maybe there’s been recently an unlock, something that you just like you realized or a light bulb went off, what’s one big thing that you feel has changed, shifted, you’ve learned from in the last six to 12 months that you feel has really kind of given you the sense or the direction that you’re getting to that next level? If you know what I mean. Any kind of unlock or realization that you could share.
35:33 – Unlocking Growth with Outbound Strategies
Yeah. We talked about it a little bit already, but I can give you some validation about it. But we talked about this idea of outbound. And again, we do it for a living. We do it for our clients. But there’s always this skepticism,I think, because PE especially really despised from people they trust. But I had to redefine what I was considering trust. And so I think even if you see somebody on LinkedIn over time, that is still a way to build trust even if you haven’t met them yet. So, it’s this concept of really having to touch people so many more times and I think I was very close minded before. I was really looking for warm referrals. That’s what you want and of course we always want that. But there’s another way to do it. And I think for me I really had to get all in there. I had to just own it and say, “Okay, this is what we’re going to have to do. We’re really going to have to go beyond our network.” And so we’ve been doing that and I will say I am getting people at conferences saying, “Oh, I’ve heard of you guys.” “Oh, where have you heard of us?” “I don’t know, I’ve just heard of you.” So we’re getting some of that. It’s happening to me frequently. So, I’m getting some feedback kind of from our network of like– So there’s a little bit of a rise – that’s very non scientific which I hate. And we’re certainly not going to do an awareness measurement study at this stage in our growth. But I am feeling that next levelness of okay, we’re beyond our network which is- that is an unlock for us, getting out of our own network. We have to get beyond that.
Yeah. Well, that’s fantastic that you’re taking that step to change things up a little bit. And you know, oftentimes we see those who rely strictly on their network or referrals. It can usually take you to a pretty good level depending– For some people it lasts a few months. For some people it can last many years. But generally you’ll get to that point where it’s like, “To get to that next level, we can’t just keep doing the same things we’ve always been doing.” Then you have maybe people you know who you’ve gotten referrals from but now they’ve been laid off or they’ve retired or things change. So being able to have a way to really attract ideal clients consistently you have more control over I think is a really powerful move well on that.
Summer, you mentioned the website. But just to make sure that people have it again if they want to connect with you or learn more, where should they go?
We will link all that up in the show notes. We’ll also have the customer acquisition cost calculator. Is that kind of what you called it?
Yeah, I called it a dashboard. It’s a CRO dashboard, but it has it in there.
All right. So we’ll grab that as well from Summer and we’ll link it up in the show notes so everyone here, you guys, can get access to it. Thanks again so much for coming on.
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