What is a disruptive business?
- What are the new disruptive trends in digital marketing?
- Why is cryptocurrency the biggest disruptor in the 21st century?
- How can a small business compete with giants like Amazon?
What is the Renegade Entrepreneurs of the Pacific Northwest?
This video covers all of these things and more!
Renegade Entrepreneurs of the Pacific Northwest, Episode#4: Disruption
Learn what are the disruptions in the marketplace and what it means to be a small disruptive business.
With Keith Eneix and Jesse Stoddard
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Jesse Stoddard: 00:06
Hi, I’m Jesse Stoddard. This is Keith Eneix and we’re here for another episode of our Renegade Entrepreneurs of the Pacific Northwest. How are you doing Keith? I’m doing great. Awesome, great. So we are we’re going to be talking today about disruption in the marketplace and what it means to be a disruptive small business. And we’ve got a lot of cool stuff yeah. Should I get it started here. Go ahead. I think what I’d like to begin with is just this concept and give me an example that everybody can relate to and that’s Amazon.
Jesse Stoddard: 00:38
So we all think of what is Amazon doing in the marketplace. It’s Amazon jungle fighting everything. And what they’re doing is you know they’re they’re buying up so much online presence but they are also buying brick and mortar businesses now which is quite interesting and real estate. There is even recently been skeptical speculation in the real estate market and investors are buying these warehouse spaces near affluent communities with knowing that they will potentially be turned into distribution centers for Amazon or other companies like that. Because the fact is that people want their goods and services cheaper, faster, and easier and they want it delivered. Yeah, and Amazon has such an influence on that to the point where they even have a new program where people can purchase specialized lockboxes that sync with mobile phones for Amazon deliveries. So then Amazon delivery can go into their home which then makes it so that that issue of boxes being stolen off the front porch no longer an issue. Right.
Jesse Stoddard: 01:46
Of course, that opens up a whole slew of other problems that I think we had a problem like that once with one of our cameras. Right. Right. So still yeah.
Jesse Stoddard: 01:56
And you know a lot of businesses should be afraid.
Jesse Stoddard: 01:58
You know they should be afraid. Right I mean Amazon is changing the way things are purchased. And it just makes it that much more important to differentiate it. Another example though that you’re seeing retail the collapse of retail, not all retail but certain retail Sears and J.C. Penney’s. But there’s other retail you know companies that are adapting. And an example I really like is Costco. If you observe I’m always fascinated by Costco you know when you go in there I’m just so crazy in here like how much money is cranking into this place. And if you think about it they have a big building that they have to pay for. And they have a lot of it’s retail although it used to be Costco Wholesale it’s essentially a place where people shop like retail. But what makes them successful and how can their company continues to survive and thrive while these other you know grocery stores are being put out of business and things are changing. And Costco manages to survive in one of the things is their membership base. So they have the membership model which people gladly pay for the idea of getting savings throughout the year that the savings have almost become a running joke because you can’t go in there buy one toilet paper you end up with a whole case of toilet paper that’s going to last you for three years and so there is another example . And they’ve raised the price per transaction because they force a larger transaction size on people by the way it’s designed. So that’s that’s something different so they have this membership which people pay for it’s a paid membership and they offer a discount with that or basically you can’t get in there without it and it’s forced. You have to have the membership and you have to renew the membership. So they can make a lot of the membership fee and then what they’ve got is a transaction in there is going to be larger than your typical transaction because they have the larger volume of product size. Another thing they do which is really interesting that the casinos do is that they have the idea of the treasure hunt and customers even surveyed and talk about how they enjoy it. You go in there to buy one thing and you explore and discover all these other things you didn’t intend on buying. And that’s why Costco tries to offer everything and when you’re on your way out you’re going to pass all these kiosks trying to sell your garage doors and sell automobiles and everything you can think of. They’ve got you in there and they’re going to maximize that customer transaction. And that has set them apart and they’re a growing thriving business in an industry you would think would be difficult. Where people can just order online.
Keith Eneix: 04:25
And they also sell online of course so that they’re adapting to all of those different things. So that was the first example I could think of. I think one of the things that you also consider when you’re going to Costco is you might not get the cheapest price but you’re probably going to get a really high-quality item. Right. As an example, I would usually buy apples from maybe WinCo. A good local grocery store that’s usually less expensive but I actually really like the Costco apples because they’re organic and they’re larger really come and bulk and there are actually about the same price. You just have to buy in bulk as just an example but what really think I’m going to go to Costco and buy some apples.
Jesse Stoddard: 05:04
Right. So you go there to buy something else and you end up to get it and it’s going to be high quality.
Jesse Stoddard: 05:09
Right, so great example of the high quality. So there’s an example of a business that’s an old-fashioned business meaning it’s not strictly online. It’s not Amazon and yet they’re capitalizing on that. They get people in the door and then they buy other things which is what Amazon tries to do with people who bought this also like this.
Jesse Stoddard: 05:27
Right. Or you may also enjoy this similar concept but it’s a lot easier when it’s tangible and there will always be in my opinion people that still prefer to actually see the product and feel it and touch it and put it in a cart and then they’re more likely to actually buy it. So that’s one example I had That’s good. So that leads us to the disruption factor number one today which is yes it’s changing topics a little bit is artificial intelligence. So I think we need to talk about that. Yeah. So it’s affecting. There was a study recently. And actually, Google had a big event where they invited digital marketers I was telling Keith that this earlier but a lot of a lot of what Google is talking about is this implementation of more and more artificial intelligence and that it might put a lot of agencies out of business. It’s very possible and it’s going to they said it’s going to affect two people that are selling ads or selling you know digital marketing services and pay per click services. But it’s also going into effect for our listeners and viewers is ad buyers. Yeah because now it’s going to change the whole game. People buying ads which is pretty much every small business is going to have to be in this game.
Keith Eneix: 06:39
So what are your thoughts on that? Well it’s interesting because the field that’s adopting AI the biggest right now is the automobile industry which is pretty typical and it actually works well for the auto industry too because that the target market tends to be very sales focused kind of industry and so they’re looking for the best new thing that’s going to help increase sales for them but they’re looking for the least amount of cost and AI’s good implementation for that . And also just the nature of what auto is more of e-commerce type store feel. And so interestingly one of the largest AI companies for pay per click actually said that they’re having huge success on PPC campaigns that are about 500 dollars less using AI right now and it’s not all pure AI but there’s there’s a lot more elements AI of being used in a small amount of manual being used which reduces costs but they find that campaigns that are spending about 500 dollars and less if they use an AI component in conjunction with the manager that they will have about a 71 percent increase in success compared to just a manually managed campaign . So that’s that’s interesting And of course that most that were done across the automobile industry So a lot you know could be different depending on which industry you’re getting into. But definitely, huge disruption factor like you said you know Google saying hey in two years agencies you might not even be in 40 percent of you agencies who are at this meeting aren’t even going to be in business anymore. That could be a huge factor if you’re not making the change right.
Jesse Stoddard: 08:22
So you know it’s funny you mention Automotive.
Keith Eneix: 08:24
It was the next thing on my note. Oh yeah. So I think Automotive is when you think of just that category that like I said you’ve got huge focused sales teams who are you know if leads aren’t coming in right now they’re like well there’s got to be something wrong. So they’re really ready to hear about the next new thing.
Jesse Stoddard: 08:41
Yeah I I would add to what I’ve been reading about with the automotive industry. Maybe one of the factors. I mean they’re always on the cutting edge of advertising because they advertise the advertising as compared to a lot of other smaller businesses but they have.
Jesse Stoddard: 08:55
What’s what might be unique. One of the factors is they have a longer sales cycle. And that’s a bigger ticket item. It is. So what happens is people tend to be thinking about buying a car. They have a track record of buying cars at a certain interval kind of like people buy a new home or a new larger thing every now and then and then whatever it is four years or two years or whatever it is not. But they have that track record which allows AI to have better results with data so you can get more data because that’s a behavior you can study and you can notice when people start shopping online you can see it. And so there are more data points to draw from and therefore it’s a perfect candidate. It’s a highly likely to be adopted by AI. So what used to be in certain businesses where the local connection was so important. It’s going to be not as important now with the development of AI because of all this data. We know when someone is thinking of buying a car we know what kind of car they’re going to buy. We know about when they’re going to buy that car, we know where they’re getting the point in the sales cycle when they’re likely to make a phone call or email or whatever text message instant message and take action.
Jesse Stoddard: 10:01
Well, that’s the stuff that AI is prime for figuring out. Yes. Not every business has that problem. Or I guess it’s a good thing for them.
Keith Eneix: 10:08
Yeah that sounds a lot like just marketing automation companies kind of on the ground for that given the marketing automation software that you can preset to have targeted messages go out to your user base of current customers or potential new ones that are coming in who are reading your information but then setting up preset messages to try to take him down that buyers journey and get them to close more often with you., Buy more
Jesse Stoddard: 10:37
So so the summary is if you’re in an industry that is particularly conducive to that especially if you have a longer sales cycle and a larger ticket item you definitely need to understand AI if not use it.
Jesse Stoddard: 10:48
And I would say become an early adopter if you are a marketer or if you’re a small business don’t be afraid of it. The next thing also I want to mention is using chatbots.
Jesse Stoddard: 10:58
This is a big deal. It is this is a huge thing. Can you talk about those a little bit?
Keith Eneix: 11:02
Yeah well I mean right now a lot more businesses are doing it of course and it goes back again to this marketing automation thing where you-you are presenting messages to help people move further down the funnel, in fact, I just went through it myself. I was on a Web site. I was looking for more information. There was a chat box and what’s annoying in the chat box is when you go there and nobody responds at all. Well, I knew this was an automated chatbox but because when I message it said “Great, hey what are you looking for?’ And then I said you know what I was looking for and they said oh OK we’ll hey we can email you that information just give us your email. And I was like oh this is automated. But hey at least I’m getting my stuff answered I was looking for a pricing sheet. And so put in my e-mail and for some reason, I didn’t want to fill out the form. I wanted to go to the chat box and do it. It’s just an interesting thing happening in the buyer’s journey right now. It’s changing quite a bit because people are so used to using chat functions and I get to be honest when that first was introduced as a consumer it drove me nuts.
Jesse Stoddard: 12:08
I like the idea of the robot. You know this is twilight zone but it was.
Keith Eneix: 12:12
Yeah, I remember in the late 90s using chatbots and it was really bad.
Jesse Stoddard: 12:17
It was terrible. I know that’s a good point.
Jesse Stoddard: 12:19
The Late 90s my prediction is that even if we don’t like the way of the future because imagine as the AI gets better that communication will be harder and harder to tell if it is a person. If you get smarter and smarter and smarter fewer people will be complaining and pretty soon it’ll be the norm. So I still think that if you’re a marketer as well as a small business owner you need to be aware of it. You might even need to be using it now. Start collecting those leads that you would otherwise miss. At least in the middle of the night when normally no one would be able to pick up the phone right.
Jesse Stoddard: 12:48
That’s just a thought I had. Let’s do it let’s move on to something similar disruption big disruption number two I think is text messaging.
Jesse Stoddard: 12:55
Yeah and the great point and one thing that I think that you need to do is to have a multi-step approach to it and this would be my only recommendation if you’re going to use text messaging and your business is. You don’t want to just hey buy this thing. I get those text you get those so annoying “buy the Raybans, knockoff ray bans, 20 percent off ” whatever the. That’s not what I’m talking about but using it intelligently with a multistep someone that has responded to you. Once information and then hey is there anything we can help you with. Open-ended questions maybe. Or are you still interested in X Y Z and that open-ended thing could lead to? I don’t know if you guys have much experience with this or.
Keith Eneix: 13:35
Well, thoughts on how you see it. Just within an up-sell process. Again going back to if your service based company and you sell one main thing like say you’re a plumber and you just had somebody have an emergency plumbing situation you went in and fix it but then you got some information like Hey how old is your water heater. You know and then you find out the age of that. And you put them in your marketing automation system and you just have a simple set text reminder to them hey have you thought about the water heater. You know kind of thing that you know that could be helpful things if you’re if you’re looking to get will give more value to your customer because you will be left with a burst water heater and not being taken care of correctly is an annoyance for sure. I’ve had a flooded house that’s not much fun but you know also just increasing. Of course your average ticket average customer lifetime value.
Jesse Stoddard: 14:26
So yeah and I would add recommendation is to try to make it as personal as you can. So it’s difficult sometimes but you want to you want it to be. You don’t want to get too impersonal too corporate too salesy. You want to try to keep a personal if you’re going to use it. The other thing I would recommend is getting and I’m thinking about this now is getting a separate mobile number for your business rather than using your personal number which could create some problems and also always blurs the line between personal and business and it gives you no freedom.
Jesse Stoddard: 14:55
But you may need the possibility that you might want to consider getting a separate mobile number for your business that you’re using this for. And that would be a recommendation. Oh and if also needing help if you need help you need to ask for help. You know guys like us can help you with this stuff and with integrating that with your you know like HubSpot, Infusionsoft which are you know I’m a big fan of these types of software and they have plugins and they have ways to incorporate text and so that those are things that are available to any small business. Infusionsoft those very inexpensive, Hubspot’s a great option. You can integrate all the stuff in there into your business with the multistep. And it’s not doesn’t have to be you know that. Don’t be intimidated just because of the tech. Yeah right. I mean it can we can overcome that with here.
Keith Eneix: 15:41
All right. On your coat on you’re just changing your number. There is some great software out there for your business. One of them is call rail. I would highly recommend call rail. They allow you to use tracking numbers. Track where referrals come from. If somebody has come from Google or somebody who’s just called you directly you can set up different tracking numbers easily and say if you have a billboard or you if you have a piece going out you can track those sources and such. And I think one of the big disruptive things that businesses are going to be doing more and more of as opposed to the old school method of will people need people. Remember my phone number so we have to keep the number the same. No, they don’t do a quick google search for your business right now on your phone. And notice local maps what pops up it just says call your numbers and your numbers, not even their name.
Jesse Stoddard: 16:34
Remember the number is now. Oh, I don’t know my own wife’s number it’s on my phone. That’s my phone now.
Keith Eneix: 16:43
Get the Jesse button anybody who I met like pre-2003 I think I memorized their numbers. And you know but yeah everybody after that you just you just don’t people don’t care about numbers anymore and Google doesn’t serve that up it’s not something they remember if somebody wants to get a hold of you. What do they do? They take their phone and they search it and then they call. That’s. That’s the buyers’ journey and you can track that and if you can track that you can get more information about where people are coming from. And it can help you better know what channel to optimize. That’s a huge tip right there. That’s like a thousand dollar tip you just got for free.
Keith Eneix: 17:20
Well, that will cost a little, yeah but it’s not that expensive.
Jesse Stoddard: 17:24
So let’s move on to the next one. This is the third disrupter I want to talk about which is cryptocurrencies. A totally different subject that people are hearing about it. I’ve got some stories I know you do too. There are pros and cons of accepting it.
Jesse Stoddard: 17:37
I would say the pro is there’s less fraud involved. The con is volatile. Yeah right. So this cryptocurrency this idea of this new currency where people can pay for products and services without actually exchanging real money. I think of it as monopoly money now have a negative perception. I have to admit because I look at it is it because it’s so volatile. I look at it as a not really an investment but more like art and collectibles. Yeah. Where the price is subject to high volatile swings. Now that may change that change my opinion of it is not really hot but the fact is even with my opinion as a small business owner as a marketer you have to be aware that it might be a way to get customers you otherwise wouldn’t get.
Jesse Stoddard: 18:22
As you can. You can accept as payment. Right. What are your what’s your experience? I know you had a cool story.
Keith Eneix: 18:27
Well you know I definitely I’ve done some research, not I’m not an expert at it by any means but I’ve just done some research so if you haven’t done any maybe I could hopefully help a little bit. But there’s a nice documentary on Netflix about bitcoin. I’d highly suggest just learning more about the blockchain technology and such. And you know this there’s an article I’ve recently posted on my Facebook that basically said you know right now. Well, bitcoin is at about 500 billion. You know it was almost half a trillion but it’s half in market value right now. So
Keith Eneix: 19:07
but it’s expected to be a potential 10 trillion dollar industry. Wow. So it’s expected to be a pretty big industry and the reason why it’s expected to grow is that of the blockchain technology. So to put it really simple out know if you’re out there and if you maybe remember a company Napster back in the late 90s they came out with this new thing called P2P sharing of music. Person to person sharing the music basically what it was was. You could have a music file say an artist that you liked and you could stick it on Napster and tons of people could tap in and download that file all at once and you could share the files everywhere. Now the bad thing about Napster was you know people were basically just sharing music that should have been paid for. And Napster, of course, is big news you know back in the day. Well actually at the time these guys were taking the P2P file sharing idea in the late 90s and they were actually already talking about cryptocurrency. So the guy who started cryptocurrency or was kind of the brainchild of the whole thing was this Japanese guy. I can’t say his first name but his last name Satoshi. And they don’t know who he is and all that kind of stuff is speculation. But basically he put together the algorithm for this and his idea was that this would become the new gold standard. And the way he would do that is through creating an algorithm so an algorithm is you know basically like you have a program a piece of software that you use on your computer and there’s an algorithm that’s on the back end that’s put together and make that thing work. Well, he put together was the most complex algorithm for a basic accounting ledger ever put together. And the only way that this accounting ledger could be put together was through technology and servers and computers and such. So he put this thing together. It is a brand new thing that nobody ever thought about. And it’s it’s what’s called decentralized. Basically what that means is right now all of our money is centralized in things. They have servers and it’s potentially hackable in those banks because it’s centralized and there’s lots of possibilities of money missing and all that kind of stuff within the banking system. But decentralized means that the accounting ledger can never be hacked and never can be messed with nobody could steal that. The only way somebody could steal bitcoin are currency and you’ve probably heard some of this in the news is through the exchanges that are up there and the exchanges aren’t like Coinbase. All the biggest changes out there. Sometimes those can be hacked and people can steal out of those. But the actual Ledger cannot be hacked. So it’s it’s a very interesting technology for businesses. I think in America we don’t really understand because we have the U.S. dollar and we’re in a country that’s really stable financially we don’t have the government you know just printing money like crazy and our dollars worth nothing. And you know a trillion dollars is nothing on the Internet. But there are countries out there that are like that. And so hopefully we’re not going hopefully we’re not.
Keith Eneix: 22:42
No no no no. And so we don’t really feel the problem of that.
Keith Eneix: 22:46
And these are these third world countries who do who say oh wow I can I can just transfer bitcoin instantly you know was the idea. But I can transfer cryptocurrency instantly would make it a lot easier too. It would make it a whole lot easier to make sure my money’s safe and that can be transferred easily across the world. So it could potentially be a big disrupter to businesses it’s still early stages right now but I’m just encouraging people to go check it out. Learn about the technology.
Jesse Stoddard: 23:19
That’s good advice. Yeah, my quick story is on the other end of it is meet with some guys. And you know they get together to eat pizza drink beer whatever and just kind of talk about business. Small business owners. And one of the guys says Well I got a buddy and he used to be a firefighter or something like that, some job, shouldn’t go into more detail now. I don’t know about that. But you know I did. And he just he discovered this. You met some guy in a back alley to get this special box. I mean this is an exaggeration. Yeah. Now, this is not the mining. I know they have that. This is something else where it’s it’s a piece of hardware that’s needed for it to clear the transactions. OK. Now I don’t know anything more about it so I’d make myself potentially looking like an idiot here because I don’t know the technology. Yeah but he got this box and he’s he paid maybe 25 grand or something for, no, I think like 50 grand it was an expensive piece of hardware that sucks up a massive amount of power he has to set up in his garage. But the thing clears him a ridiculous amount of money every month like 10 times as an investment in a month. So now he’s got a whole building full or a whole house full of like 20 of these boxes and the guys making hundreds and hundreds of thousands dollars a month. Yeah. But it’s a fulltime thing. He’s got to make sure nothing shuts down. And they’re setting up all over the country all over the world as independent little businesses. And he has to move to Texas because in Washington State that the Puget Sound Energy or whoever or Seattle City Light or wherever rest came in shutting down is sucking too much power off. And he has to go to where he can get where he where it’s OK to have an agreement with local government because it sucks up so much power with this thing.
Jesse Stoddard: 24:56
And so this is the future. This guy retired from a fire department and making millions of dollars a year with the black boxes in his garage. So the fact is things are changing. Yeah, and if you’re a small business owner you might want to consider accepting it.
Jesse Stoddard: 25:10
Yeah, so I’ll wrap this up. Disruptor number 5 or 4 and 5 is basically the failure to adopt this kind of stuff.
Jesse Stoddard: 25:18
And some points I had about it is first of all put automation in place. We talked about that you’ve got. You can’t deny it. Automation is coming. The other one is to evaluate and review your plan for automation and marketing quarterly. And I talked about this more in the past but it has to do with the SWOT analysis of their strengths your internal strengths and your internal weaknesses what are going on there. What are your external opportunities and what are your external threats and doing an analysis of that and that goes back to our planning discussions you’ve got to be looking at that stuff because your business will change whether you like it or not embrace the incoming technologies and then be joining forces with other small businesses? There’s just kind of what we’re talking about with all this. And I would say this disruptor number 5. The last one 5 is emotional engagement identify it understand the emotional makeup of your customer and your and the unique voice that you have. This is a disrupter. I was giving you this example earlier used to be Facebook. Really it was really all about shares. Yeah. And then it became really more about likes and really emphasizing likes and then they changed it to where we don’t just like something you can have an emotional response you’d hard at love it. You can L.O.L you can be angry at it. You can be wowed or whatever. And so that’s that’s just Facebook but it’s kind of happening everywhere where there’s an emotional response so if you don’t want to have the Amazon effect happened your business. One of the best things you can do is have an emotional connection with your customer . You can’t be a commodity differentiator die. You become a commodity or are dead because you’re going to have a big company like Amazon put you out of business. But if you have an emotional connection and you focus on that and that engagement and then also speaking that voice that your message to market has to match goes back to the fundamental that we’ve been talking about. But it relates to disruption. So those are my last thoughts on any other final things.
Keith Eneix: 27:05
That’s it. Yeah, it’s good. It’s good, Be disruptive. Yeah. All right thank you guys, see you again next time.
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