*PS. Below you will find an auto-generated transcript of this episode.
Arek Dvornechuck: Hey, what's up branding experts? Arek Ebaqdesign and welcome to On Branding Podcast. And my guest today is Erik Huberman. Erik is the founder and CEO of Hawke Media which is the fastest growing marketing consultancy in the United States. The company has served over 3000 brands of all sizes, ranging from small startups to household names.
So Eric is a sought-after marketing expert and he wrote this book, The Hawke Method, in which he describes three basic fundamentals, principles of marketing that he believes that all marketing should be based on. Hello Eric. Thanks for taking the time to join us today.
Erik Huberman: Yeah, of course. Thanks for having me.
Arek Dvornechuck: Thank you. So first I wanted to say that the book is very easy to read. I like how you structure the content, and I like the analogy with the, with the tripod. So I think that's we should start off with this. So just to get us on the same page so our listeners can, I think this is just a great explanation, you know, of, of your approach.
You know, those three principles. So basically you have this as you guys can see. A tripod and a camera's on a tripod for you listening out there who are not watching this on YouTube. So basically the idea is that the camera is is the brand, right?
Erik Huberman: Mm-hmm.
Arek Dvornechuck: And each of those legs stand for each principle of marketing.
So your brand or your brand or your company won't worry. The, the, the camera, you know, it, it'll collapse if you are missing one of those. And, and those principles are awareness, nurturing, and trust. So the idea behind this is that, you know, you need to work simultaneously. On all, on all of those three principles.
Otherwise, it, it, it won't be, you know, effective. So I wanted to spend a few minutes you know, talking about if you could, could just talk to us about each of those principles shortly.
Erik Huberman: Mm-hmm.
What is Marketing?
Arek Dvornechuck: but before that I just wanted to I, I wanted to get your definition. What is marketing? Because you know, there are so many definitions out there and you know, some people understand marketing as advertising, you know, which is you're just running ads on social media, commercials on TV or YouTube or sponsorships and things like that. But you argue that it's much more than that, right?
Erik Huberman: Yeah, I would say marketing encompasses all the things you do to engage the customer relationship from the time someone first experiences your brand. So they're not a customer yet through their entire life cycle with your company and post. So their entire experience and how you leverage that, the proactivity of that.
But I wouldn't say it's just proactiveness. It's also. The consequences of your actions. I'd say marketing is just as much what you do consistently. That gets, that drives word of mouth good and bad as much as it is advertising or email marketing or all the other active things that you do.
Arek Dvornechuck: Right? So just some of my key takeaways. Marketing is a full experience you attached to a brand. Right. And that may include things like product development, sales, customer service, public relations, company culture, and, and more things. So it's not just advertising.
Arek Dvornechuck: Okay. So let's just dive into to, to the first and talk about the first principle, which is awareness. So can you talk to us about awareness and maybe you can give us some examples?
Erik Huberman: Yeah. So awareness is basically everything you do to introduce your company to a new potential customer. So it's things like advertising or word of mouth, PR just all the things that drive new people to become aware your product exists, and you have to keep building that awareness in order to fill that top of the funnel and drive new potential customers to your company.
Because on the other end, you're always losing customers. Like by nature, people are moving on. For other brands, they're changing lifestyles, location, they're passing away. There's all sorts of things that happen to people that make it, that they're not your customer anymore. And so in order to grow a business or even sustain a business, you have to be finding new ones always. So you have to be building that awareness, right?
Arek Dvornechuck: So just making people aware of your brand and, and could be done through advertising, through PR, through word of mouth, through, you know sponsoring event. And things like that. But you give us a lot of tips in the book actually, about, you know, how to go about you know, because advertising is, is, is, is bringing that awareness, right? That that's what it is advertising. So is, and this is the most expensive part of marketing, right?
Erik Huberman: Yep. Correct.
Arek Dvornechuck: So if we don't know what we are doing, if, or if we are not doing this correctly, we are not tracking the, you know, Those things and how it works and we are going to burn a lot of cash and yeah. So can you speak to that? Can you give us some examples? You know, what we should pay attention to? What, what are common mistakes that. Yeah.
Erik Huberman: Yeah. So a few mistakes. So first off, it's really about figuring out where the best place to reach your audience. Like the example I always use is Facebook versus Google, where Facebook is a great marketing channel.
Facebook and Instagram together are great marketing channels because you're basically reaching a potential customer at a time when they're doing nothing productive. They're bored. That's why people are on Facebook. And so you can reach 'em at a time when they're bored and reach them, reach to the exact potential customer, meaning you can target socioeconomic, psychographic data, like get really detailed on the type of person you wanna target at a time when you know they're bored and you can use different images and different copy and test, different advertisements to get really honed in on what's the exact copy and creative that'll attract your exact potential customer to your company at a time when they're bored.
That's why Facebook's great. The problem with Facebook is timing. If it's a timing based product that actually solves a problem that they have time associated. The example would be, I need a lawyer because I'm going through a lawsuit or something. Facebook, I, how do I, like, let's say it's a DUI attorney.
What am I gonna target on Facebook to find people that need a DUI attorney? Like people that like Jack Daniels and Mercedes. Like, it doesn't, There's just not a way you can do that. And so that's where Google comes in, where Google, it's answering demand. It's, I need this. Do you have it? So if you have a product or service that can fulfill it.
That's where Google can be very powerful. And as you build a brand and people start to look for your product and like your brand, Google also becomes a great value. So we always look at Facebook answers or creates new demand. Google answers existing demand and that's one. Those are two channels. And we can talk about like, Twitter is really more used to look at people's specific tweets and communicate back and forth, which is why advertising on Twitter has never really been that powerful.
YouTube not a big fan of the pre-roll ads cause you're basically interrupting what someone is trying to. But I do like working with creators on YouTube because if you can integrate into the content people are wanting to watch, that's where you can get good advertising. So again, and then you mentioned tracking.
One of the, I'd say the biggest pain point we've seen in in marketing recently is tracking. And the, the biggest screw up is the idea of a purchase cycle, which is where the second principle comes in nurturing. Most consumers take time to buy. And it just takes time. There's no rushing it. So you know, what we see in e-commerce is for a $50 purchase, the average purchase cycle is about three weeks.
For a hundred dollars, it's about five weeks, $200 is about six weeks, and it goes up to two to three months before trailing off. That being said, if you're measuring your marketing on a daily or weekly basis, unless you have like a $10 product, you're missing out on most of the positive reporting and you're under reporting all your marketing.
And probably cutting off your nose despite your face cause you don't think it's working. The biggest issue here is when iOS changed Facebook's reporting, it went down to one week instead of 28 days, it went to seven days. And so now for most people, Facebook completely under reports your performance.
So everyone thinks Facebook has gotten terrible when it's actually just the tracking that's really shift. People didn't stop buying things off of Facebook ads because iOS changed their tracking ability. Like you have to think about this stuff logically. .
Arek Dvornechuck: Right, right. So that, that's a great point as well.
And so you basically jump already started talking about the second, which is the second nurturing principle, which is nurturing. But I just wanted to sum up for our listeners the first one. So I have some notes here from, from your book just to sum it up for them. So basically as, as I mentioned already, advertising is the most expensive part, so you need to know what you're doing.
And you gave us some examples, you know, for, you know, What you use Facebook for. So Facebook is more passive. We need to pay attention to the fact that people are bored there and they're not actively looking maybe for, for, for something versus Google. They're searching, they're using some phrases and keywords that we can target so they're actively searching for something, you know, solutions to, to their problem.
So that's on, on a higher level, that's the difference. And, there are also other channels, right? Word of mouth. Word of mouth is really important. And you give us some specific tips in the book for how to generate word. Word of mouth, right? Partnerships and other, you know, press releases to build shows and authority and things like that, right?
So so let's, let's talk about the second part now, the nurturing. So what's next? So once we run, let's say Facebook ads, or we run Google. For specific keywords, let's say I could give, gave us an example with a lawyer, right? Yeah. Maybe, you know I don't know. Corporate infringement lawyer NYC New York, right? Sure. Yeah. So what's next? So what's the next stage nurturing? What is, what is this all about?
Erik Huberman: Yeah, so this is a good example. Like if I google for a copyright infringement lawyer, I probably have a need for one. But it's not like, All right, cool. I go to their website, done, hired, like, I'm probably gonna talk to them.
I'm gonna maybe interview some other people. I'm gonna figure out where, you know, wanna see some success stories that they've had, whatever, get some re, you know, referral or references, things like that. And so it takes time, like it's gonna take a few weeks to convert that. Again, if I'm looking at my Google ad spend on a weekly basis and going, Well, I spent 10 grand this week on Google Ads.
I didn't get new clients this week. Screw it, that Google doesn't work. Meanwhile, you've got 30 people that you're talking to that are probably gonna become clients and you just cut off your advertising. That's, that's the problem. So during nurturing, it's understanding how long that period is on average, and during that period, doing things to keep people engaged.
The lawyer's a little, that's a very specific case, but let's take brands in general. So if you're talking about, like, you're selling sneakers, let's say they're $50 sneakers, so your average cycle could be three weeks. During those three weeks, you wanna follow up an email, you wanna follow up with SMS.
You wanna create, let's say they're running shoes. You wanna create content around being healthy and running and all these things that engage that person above and beyond a purchase decision. So you can get them to the site more, engage them with the brand, build some trust too, which we'll talk about as well.
And so that they, by nature, people engaging with your brand above and beyond that purchase decision, they're going to buy more. Also, people have a much higher propensity to share content. So content is super powerful cuz they'll probably share it with their friends a lot more likely than sharing your your product, your running shoes, so creating content, email marketing, sms, building a good website funnel, all those things that, So during that period between when they first learn you exist and when they wanna buy, you're continuing to stay in front of 'em and build that trust and build that nurturing and help accelerate that purchase cycle, as well as helping increase your conversion rate.
After that, after they purchase. Those things are all very important as well. Cause you wanna keep 'em coming back because the most important metric in your business is lifetime value of a customer, not first purchase. Roaz, to me is a dirty word. It actually is a section in that book. Roaz is bullshit. So I, and I wrote, you know, I wrote the book two years ago.
It published this year, but you know, I started working on it two years ago and it's like, we've watched that get, that was pre iOS 14 And we've actually get worse where the, this roaz number is just a terrible metric that is, you know, JV marketers use. You need to be looking at the lifetime value of a customer and how much it costs you to acquire a customer.
And when you're trying to calculate the cost to acquire a customer, you have to incorporate purchase cycle to actually get the number right, Because if I spend $10,000 a day today, It's gonna take a few weeks to see the returns on that, and I have to look at the whole window of that. And Facebook itself won't track this properly now, so you have to have other tracking methods like Glew and using Google Analytics and other first party data to try to track that purchase cycle so you can really get what your cap is.
And then back to the point. You're driving your lifetime value of a customer, meaning not just first purchase. So you wanna be staying in touch with them through email and SMS, continuing to create content and bring them back. And above all, something people miss. It's, I'd say tangentially associated with marketing, and you mentioned it too, is merchandising.
You have to have other products for people to buy. This is where Casper failed. Casper had mattresses. Their second launch was dog bed. Cool idea, but what amount of revenue increase did they get from dog beds after selling real beds? Like some small percentage of their customers probably bought them and they're cheaper than a mattress.
So like you didn't get much growth in your lifetime value. You have to really find ways to build out more revenue per customer and keep them coming back and buying cause it's really expensive to acquire customers and frankly it's just getting harder. It's, the past decade's been a lot easier and it's I think going to stay harder.
And to be competitive, you have to get as much share of wallet and money out of your customers as possible, which comes through staying in touch and having good merchandising and a good experience. They have to have a good customer experience.
Arek Dvornechuck: Right? So all those things matter, right? So so yeah.
Yeah. So just to sum up nurturing is about building that relationship with, with our clients with our customers, right? So in the first phase when we get their attention maybe they. Maybe we have like a lead generator or something. We collect their emails and then we follow up with them or a phone number or whatever it is, right?
That we follow up with them. We can send them more information about the product. We can share some content as you mentioned, right? Doesn't necessarily be need to be about the sneakers themselves, but maybe about running and things like that. So it's shareable as well. So provide more information, maybe address their objections.
Yep. And, and then ask for, for, for for sale. Right. So and, and sometimes as you mentioned, it's just about being the top of mind. So if you follow up with them, if you nurture those leads you know, you need to be patient. As you mentioned there, there is a purchase cycle and people ignore that.
Exactly. It doesn't happen right away. People don't make, make purchasing decision. Especially it's if it's an expensive product, right? I know it from my experience, like clients who call me for, you know, branding services, design services, I'm not the cheapest option of course. So they, they, they are going to look at other, you know, service providers and, and and they are going to, they not, they're not going to, they're very rarely make a decision right there on, on the call.
So So that's a purchase cycle. And you know, the, the most expo, the more expensive the product or services, the, the longer it's usually it takes for people to make a decision, right? Because they need to do the research, they need to compare products or services. We need to have time to others, their objections and stuff like that. And another, a very important thing is that you mentioned is about the metrics is the true ROI, right? Which is the actual return in. Yep. And you, you said in the book that we should aim for four times or higher. Yep. Right?
Erik Huberman: Obviously that's a very generalized statement, but basically what you wanna make sure is your cost required customer to your lifetime value of a customer is at least four times to know that you're sustainable. If it's less than that, you're gonna have a hard time sustaining a business. And now this also depends on your margins, depends on a lot of things, but that's the general rule of thumb where we start.
Arek Dvornechuck: So that's a, a very important metric, lifetime value, customer acquisition cost. We divide those to get it through ROI.
Arek Dvornechuck: Right? So, and then the, the last leg of, of a tripod, or the last third principle is trust. So can you talk to us about, about that? What is trust all about?
Erik Huberman: Yeah, trust is synonymous with brands. So in the beginning, when you first launch a brand, nobody knows who you are. So trust is built through third party validation, whether it's referrals, testimonials, reviews, PR, influencers, all these places that you can borrow trust from someone else.
And over time you, once you build consistency in the market and you know, some awareness. You will start to build trust just through consistency, just through showing what you stand for and people will start to trust. Frankly, longevity builds trust too, where it's just like you've been around a while, so I guess you're doing something right and people start to trust the brand.
And then also your reputation, like if you're known for delivering and people, word of mouth drives most of purchases at the end of the day. And so a lot of trust is built through early adopters that don't need word of mouth and are willing to take a chance then telling other people how great you are. And so all these things matter to build a brand and that trust is a big factor. 75% of people won't buy for a com from a company they don't inherently trust. Yeah.
Arek Dvornechuck: And I actually have this this quote from, from, from you. So 75% of customers won't purchase from a brand they don't automatically trust, so they're gonna do the research and so on.
Right? So we need to build that trust, how to build that trust. We can borrow that trust from someone else from an influencer. Who can endorse us, right? Give us a recommendation, testimonial, talk about our products and stuff like that. We can build trust ourselves by creating content. This is what I'm doing now. This is what you, you know, you wrote a book. Yeah. I'm doing the podcast, right?
Erik Huberman: Yep. Well, that's a good example. That's an example. The book. Oh, wow. You read the book, which got me on your podcast. Now your listeners know about Hawke Media and the Hawke Method also. We send this to every client because then they know how we work.
So there's a com bridge, the communication gap of like, this is what marketing is. So when you're wondering what the hell we're doing, here it is. We give it to every employee so we all speak the same language, regardless of whether they're skilled in marketing. Now they know how we think about it. Like this is something that has become a very powerful tool and a marketing tool.
Arek Dvornechuck: No, that, that's definitely on my list as someday in the future. So, and, and another thing, you can partner also with other brands, right? Your brand can partner with other brands, and we can see those col colabs all, all over the place, right? Big brands as well as small, smaller startups. And you can just request some reviews or testimonial. So let's say if you're a creative And you are looking to build trust and, you know, get bigger and better clients who pay you, you know, higher prices for your design work. One way to do that, you know, you need to build trust so they feel comfortable spending, you know higher amounts with you.
And you can do that through requesting reviews testimonial from your past clients, right? Yep. Yep. Okay. So maybe. As we are approaching the end of our interview, just, just, just to sum up, do you have any conclusions or tips you really wanted to share with our audience or maybe some mistakes that, you know, people often make and don't want to see people making these mistakes anymore?
Erik Huberman: Yeah, I mean, again, don't ignore what I'm saying about purchase cycle. Like I, it's amazing that I have these conversations and then a month later I'm circling back and they're like, Yeah, but our roaz is bad. Like you. It really is. I. I hate to be blunt, but get the book, the books out there on everywhere books are sold.
And the idea is, it's a, basically my favorite review I got the first day was a one star review that said, I don't get it. It's basically modern marketing 1 0 1. It's like, Yep, that's, that's exactly what it is. So that's the point. It's like if, if you want a great overview of how to manage your marketing, that was what I tried to put together here.
And it was something that I spent a decade of work putting into a, a strategy that now we've scaled it's, we're actually closer to 4,000 brands. That we've scaled and grown and had a lot of success in the market and we've grown our own business to 300 people and eight years bootstrapped and built a 50 million venture fund and, you know, a financing arm and software companies and all these other things that we built through this all, you know, all off this strategy.
So that was the idea. And again, it's very simple, straightforward. The idea is it's supposed to be easy to digest. It's not, you know, a textbook that you're gonna, you know, go into the weeds on how to pull levers on Facebook, but it's just like, this is how you should be thinking about the over. And I will tell you, 99% of marketers don't have those basics.
Once you have those basics, then you can start to figure out which tools make sense, what you should be driving down, which in platforms, and also you can avoid the shiny object problem of there's a new tool for marketing every day. Doesn't mean that you need to use it. So that, that's, I'd say the big thing I'd leave you with.
Arek Dvornechuck: No, no, definitely. These are the fundamentals we all need to master before we even go into, you know, the nitty gritty of, of marketing and choosing the channels and And things like that. Okay.
Arek Dvornechuck: Okay, so we are going to link to your book, of course but is there any other way you want people to reach out to you maybe on social media?
Erik Huberman: Yeah, Erik Huberman on any social channel. I'm pretty responsive, Pretty on top.