I’ve interviewed about 50 ISOs and brokers over the last two months and there is one thing that those who are struggling with generating high-quality deal flow have in common. Randomness in their marketing.
Randomness Makes Business Harder Than It Should Be
Business is a system for generating profits. And like most systems, business functions better when there is a predictable set of variables.
In my conversations with ISOs and brokers what I learned was that many in the industry are relying too heavily on cold calls, which are inherently random by nature, and marketing programs that are akin to throwing spaghetti at the wall to see what sticks. Unfortunately, the only thing that is predictable for the professionals using those approaches to their business are the frustrating results they are experiencing.
ISOs Without a Predictable Marketing System Work Harder To Fund Deals
Think back to a time in your life when you played a sport where you were the newbie and your teammates and opponents were much more experienced. How lost and confused did you feel? How bad did you get your clock cleaned? How hard was that first game? If you scored at all, chances are it was attributed to beginner’s luck.
If you stuck with the sport however, you likely got some coaching, learned the rules, developed strategies, techniques, and skills that allowed you to become a much better player. And even if you didn’t become a superstar in the sport you were at least consistently good at it.
Note: If sports wasn’t your thing the same concept applies to Chess, Dungeons & Dragons, Madden, Call of Duty, Poker, dance, rap battles, or any other competitive endeavor.
A system is like a playbook with rules, strategies, and techniques designed for a specific outcome in mind. Without a well defined system you are playing a game at a huge disadvantage. And that’s where many of the ISOs I talked to are at the moment. Without a system. As a result, they often find themselves alternating between running a million miles an hour trying to score a deal and sitting on the sidelines with their head in their hands trying to figure out why things aren’t working.
What’s Your Formula?
One question I asked each ISO I talked to was “Tell me about your marketing process. How are you finding merchants who need funding?” Logically, there was a broader discussion about what’s working for them and what isn’t but the general line of exploration was consistent.
If I asked you to describe the formula for the marketing system you use and give me its expected outcome could you do it? If the answer is no, that’s okay you aren’t alone. If the answer is “I can describe the formula but I don’t think I can predict the outcome”, that’s okay too you just need to start measuring things a little better.
So, what do I recommend to reduce the randomness of your ISO business and start producing consistent results?
Be A Scientist With Your Marketing Efforts
The key to developing a predictably profitable ISO business is to approach your lead generation process like a scientist or an inventor might approach things. Your goal isn’t to rely on luck or randomness or even brute force tactics (robo calls and email spam) to generate leads. Your goal is to discover an efficient system that produces leads that turn into funded deals consistently and in direct proportion to the input (marketing spend or activity) you feed it.
Note: The “direct proportion” concept is key here. You should have a high level of confidence that you can spend money on ads or run an email campaign or give a presentation and it will produce leads in direct proportion to the spend or size of your audience.
Identify Your Subject
If you have attended one of the webinars I’ve hosted for Pearl Capital or read anything I’ve written chances are you know where I’m going with this…define your target market. Decide who your target merchant is and dedicate yourself to studying them. You should know what makes your target market tick, what are their problems, what are their goals, and so on. Successful marketers don’t try to sell to everyone at once. They pick very specific groups and get laser focused on them.
Develop a Hypothesis
Based on what you know about your target market, what are the one or two things that you believe (or hypothesize) are likely to move them from suspect to prospect? Remember, scientists only test one or two variables at a time. Your goal is to discover what works or eliminate what doesn’t work. Over time, you will find what works best or is most cost effective but for the early stages you are looking to simply get a working process in place for your business.
Design Your Experiment
Next you need to design an experiment that you will use to test your hypothesis on what will attract merchants to your marketing funnel and get them to take the next step. It’s important to design your marketing experiment to test this “next step” concept. Many ISOs are struggling because they have a “Buy now!” approach with their cold calls and their email marketing. That swing for the fences, ask the girl to marry you on the first date, approach will work every once in awhile (randomly) but it’s not the ideal approach.
NOTE: A crucial variable in any experiment is sample size. Make sure you have a reasonably large audience of your target merchants before your launch your experiment.
Test Your Hypothesis
In a recent webinar I hosted titled “Social Media Ads for ISOs: How To Craft Effective Social Media Ad Campaigns For Your ISO Business.” one of the key points I made was to test campaigns with a small budget before going big. And that’s what you should do here. Run your test with 500 or so merchants if it’s an email test or phone campaign. If you are going to run a social media campaign try a couple of days at $20/day spend.
The goal of the test is to help you make a decision about what to do next.
-If the test was inconclusive, run it again to see if more data helps.
-If the test was a hit, pour gas on the fire and blow it up.
-If the test was a flop, try to figure out why? Was it your headline? Did you target the wrong audience? Whatever the problem, make an adjustment and then test it again.
Document and Implement
Once you have successfully tested a marketing system that should produce a predictable stream of leads to the next step in your funnel it’s time to roll it out. But first, make sure you have it documented in writing. I know…I hate writing stuff down too. But don’t worry, I’m not suggesting you write a doctoral thesis. Just jot down the process in a series of bullets points or a single-page note.
You are going to be spending money, time, and effort on this new marketing system and you want to make sure you have it working like a well-oiled machine. To do that you are going to want to document the initial process, make note of changes over time, and record results. That way, when you have a great week or a bad week you can examine the activity to see what worked or what didn’t.
Remember, things change with time. Your campaign will lose its effectiveness as it ages. Your target market will evolve. You will develop new hypotheses, test them, and implement them as you learn more.
By approaching your ISO business like a scientist you will develop a marketing system that is no longer random but one that is predictable and reliable. Most importantly, you will have a profitable and stable business for years to come.
As always, if you have questions please feel free to reach out to me or the team at Pearl Capital. We are here to help you succeed.