What Are Your Goals for 2024?
Introduction:
This week, Shawn Busse, Liz Picarazzi, and Jaci Russo discuss what they learned in 2023 and what they expect from 2024. After a tough year, Shawn is optimistic that his clients, having survived the turbulence of the past few years, are ready to spend money and try something different. Liz explains why she’s been willing to discount her products as much as 40 percent on Cyber Mondays and tells us about some new products she has in the works. Early in the year, Jaci, thinking she was going to have to staff up to handle two big new clients, dove into remodeling her offices—but those big clients have yet to sign on. “I might have jumped the gun a little bit,” says Jaci. Plus: Liz talks about her Midwestern mom, who can’t understand how Liz can charge so much for her trash enclosures. And Shawn raises the issue of how much money business owners should spend on marketing.
— Loren Feldman
Guests:
Shawn Busse is CEO of Kinesis.
Jaci Russo is CEO of BrandRusso.
Liz Picarazzi is CEO of Citibin.
Producer:
Jess Thoubboron is founder of Blank Word.
Full Episode Transcript:
Loren Feldman:
Welcome Shawn, Liz, and Jaci, it’s great to have you here. Before we get going today, I just wanted to note, in case you missed it in your 21 Hats Morning Report, we’ve got another 21 Hats Live event coming up. It’s going to be in Fort Worth at Laura Zander’s Madelinetosh factory. It’s going to run from Wednesday, March 6th to Friday, March 8th. And it’s gonna be your chance to meet Jaci, Shawn, Liz, and pretty much all of the 21 Hats podcast crew. If you want more info, you can just shoot me an email at loren@21hats.com.
All right, now that 2023 is just about in the books, I want to ask you, what was this year like for you? Did it go as well as you hoped? Did you learn anything? Jaci, suppose we start with you?
Jaci Russo:
I feel like it’s always a learning experience. And one of the big lessons that I learned this year: We had some huge-project, new clients lined up at the beginning of the year. It was going to require staffing up, and we started a remodel to make room for the new people. While we are completing the remodel tomorrow—we move our current team into that new space, and it’s gorgeous and exciting—the two huge global clients still haven’t signed, 10 months later.
And so I’ve learned a lesson about moving faster than my circumstances allow. And so that’s been a valuable lesson. It’s a good year for us. In our 23 year history, it’s going to be our third biggest. So I have no complaints there. But I’ve got big plans for ‘24.
Loren Feldman:
Well, we’ll get to those. Are you sorry you’re moving into the new space?
Jaci Russo:
No, not at all. We bought the whole building in ‘05, and we only occupied two thirds of it. And it was inevitable that we would take over the final third eventually. The tenant had moved out. We use part of it as a workshop rental space, but the other part of it was going unused. And so I am excited.
I think for the most part, our philosophy, which has held true for 23 years, it’s always cheaper to do it today than to do it tomorrow. And we got a great rate, so I can’t complain about that. I’m glad we have room to grow. And the new offices are so nice, and my creative team is so happy. It makes them want to come into the office—another reason that we have provided to create more internal collaboration and actually being in the same room together. So it’s good. I might have jumped the gun a little bit. But you know, I’m all gas. That’s sort of my speed.
Shawn Busse:
Hey, Jaci, tell us a little bit about the financing side of things. So you bought in ‘05 when rates were not particularly amazing, but I’m sure you refinanced since then. Where are things now?
Jaci Russo:
We did refinance. I want to say the building is at 2.6. And this remodel is a little bit more than that, but still sub-four. So that feels like free money.
Shawn Busse:
Yeah, especially today. How long does the term of that note last?
Jaci Russo:
Fifteen years.
Shawn Busse:
Oh, that’s fantastic.
Jaci Russo:
Yeah, so we’ll have the building and this remodel well paid off before I think about retiring.
Liz Picarazzi:
Wow.
Loren Feldman:
So Jaci, it was your third biggest year, but you had expected to do more when the year started. Is that correct?
Jaci Russo:
Correct. We expected it to be the biggest year. And I acted accordingly. So I’m very pleased that we have had the growth we’ve had. We have improved so many processes this year. We are doing so many things smarter. We’ve upped our game, from a technology perspective, even more. So I feel really good about it. I’m just, you know, never satisfied.
Loren Feldman:
Did going ahead with the remodel, while not getting those two big clients, have an impact on your profitability for the year?
Jaci Russo:
Oh, it did. It very much did. Those two clients single-handedly kept us from being the biggest year we’ve ever had, because that’s how big they are. And I think the lesson in that is, we’ve never tried to have any one client be that much bigger than the others. We’ve had that once, years ago. And when, after our four or five years together, it came to a natural conclusion, it was a huge impact on us.
And so I think, in a lot of ways, I’m spared from having my business be lopsided. And this has given us a chance to add on some regular-sized clients so that when the big ones do say “yes” next year—because it still looks like it’s happening—we will be more balanced.
Shawn Busse:
Just a quick question, Jaci. What’s a big client, say in terms of annual billings or revenue, to your firm?
Jaci Russo:
Our average size is about 250-300. And this would have been about 750-800.
Shawn Busse:
Wow. So a big, big difference.
Jaci Russo:
Yeah.
Loren Feldman:
Shawn, how are you thinking about this year? Was it what you hoped it would be?
Shawn Busse:
Looking backwards? I mean, I was very, very realistic at the start of the year. I knew it was going to be a really hard year for us. Our market sector—we work with owner-operated businesses. That’s it. We don’t work with large corporations or even mid-market corporations.
Within our market sector, there’s just a lot of uncertainty. The constant drumbeat of like, “Oh, are we in a recession yet? Are we in a recession yet?” That really gets to folks, and what it causes them to do is to tend to play defense and to not take action. You know, kind of like Jaci’s example, even at a larger firm size.
So growth for us this year, this has probably been our first year, where we’ve actually not had positive growth—in 13 years. So it’s been a real challenge. I feel very grateful that all the things we’ve done up until this moment have really positioned us to handle these kinds of situations. So we have a really great line of credit. We have really long tenure with our employees, with our customers. A lot of it’s been rebuilding our marketing. So that’s taken a lot of effort.
Loren Feldman:
You also are moving into remodeled space, a new office, having given up your previous one early in COVID. How’s that going?
Shawn Busse:
That’s been a real bright spot for two reasons. One is that the commercial office market right now is just in a lot of pain. So our ability to negotiate a really fantastic deal was unbelievable. It’s like nothing I’ve ever seen in 20 years. The willingness of the landlord to accept the terms that we had was just kind of amazing. So that’s great. And then, I think the more important part is just the opportunities that are being created by coming in and working in shared space.
You cannot replace that. I really believe that, both from a sense of camaraderie and collaboration and the ideation and creativity that are happening versus remote. And then also from a client perspective, just having prospects and clients into your space. It has a different impact than when you meet with them on Zoom. And I should have done this sooner, probably a year earlier. But I’m glad I did it, and it’s really been transformative for us.
Loren Feldman:
Did you get any pushback from employees who had gotten used to not commuting, not coming in?
Shawn Busse:
None at all. No. If anything, I’ve got a lot of folks expressing how grateful they were, especially folks who have kids at home. I think that the home office environment with kids in it, especially during the summer… We just had a teacher strike recently. Oh my God, the parents were miserable, because their kids weren’t in school. And they’re just really excited to be coming into the office.
I will say this, we’re not heavy-handing it. We’re not telling folks, “Hey, you’ve got to come in this many days a week.” There’s much more of an organic approach to when we work in the office. And I think that creative flexibility and freedom is really well received. I don’t know. Jaci, what’s kind of been your approach to that? I’m curious, because you run a creative shop, too.
Jaci Russo:
I do. We’re kind of half creative, half strategy. And so I run the strategic team, which includes the research team, and what I think of as the doers—PR, social media, account management—that’s all my group. And then Michael runs the creative team, which are the graphic designers, the copywriters, videographers—
Loren Feldman:
That’s your husband.
Jaci Russo:
Yeah, also known as husband and father of our four children. [Laughter] So that’s a whole podcast episode to itself, Loren. Like, that’s some marriage counseling we probably don’t want to get into on the air.
Loren Feldman:
We’ve hit on that a little bit in the past. But we’re gonna come back to it.
Jaci Russo:
Any time you want. Yeah, it’s one of my favorite topics. At our two-hour professional development that we do every month, we bring in a therapist who is a coach, who guides us through different exercises. And today’s session was on effective communication. And it did probably turn into the Russos marriage counseling session at one point. [Laughter] We managed to turn it around and make it very positive and professional.
But to answer Shawn’s question, eventually, over the 23 years we’ve been in business—we started the company when I was eight months pregnant with kid number two, number three was the next year, number four was the next year—we’ve always had a very flexible when-you-work and where-you work-approach.
We hire adults. It’s not about their age, it’s about their ability to self-manage. And we just expect the work to get done. And if it’s not working the way you need it to, or we need it to, let’s have a conversation and find a way to make it work better. But if you need to not work in the morning, because you’re going to your kid’s thing at school, then my expectation is you’re going to work faster, or smarter, or a little bit more at the end of the day to get it done. And as long as everybody gets it done, we’re fine.
And that’s worked pretty well for us. There are a couple of occasions where that’s fallen off. So in 2020, when everybody went home, we were like, “Okay, we’re already set up.” Everybody had server access from their houses. Everybody has high-speed internet at their houses. So that didn’t throw us for a loop. As we’ve come back to work, in the past two years, we’ve just done a better job of explaining we need to have some connection. So we have these professional developments. Everybody was responsible for an open or a close at some point during the week. So they at least touch base. They come into the building, we see their faces, we get to know they’re okay. But then otherwise, we work on Zoom.
Loren Feldman:
Shawn, are you trying to get people to come in on specific days? Or is it completely open?
Shawn Busse:
One of our team members did something really interesting, just spontaneously. He started doing a poll at the end of the week on Slack saying, “Okay, here’s Monday, Tuesday, Wednesday, Thursday, Friday of next week. Raise your hand: Who is going to be in on what days?” And so people would just start to put their little emoji next to the day of the week or multiple days of the week. And it was kind of interesting to sort of see that manifest, how certain folks would come in on certain days, and some folks would come in together at the same time. And that’s been pretty cool.
I think a really powerful lesson I’ve learned over the years, in terms of leadership, is that the best kind of engagement and buy-in is when folks kind of create their own path forward instead of it being imposed on them. And so watching this happen has been pretty exciting to see. We talked as a leadership team about, “Hey, should we have a dedicated day or certain times?” and then this kind of popped up. And then to also see things like we have a prospective client coming in next week. And the team raised their hand and said, “Hey, let’s make sure as many of us are in the office as possible, so they can get a sense of who we are and that we have heft and horsepower.” And I didn’t say that. That came from a graphic designer.
So you read these articles about corporations forcing their people in or not, or whatever. I think a lot of these problems are due to the fact that they don’t have very high employee engagement. The employees actually don’t really care that much about the businesses they work for. So you get a lot of that friction. So I don’t know. I didn’t expect it, but I’m really delighted by it, because I have a tendency to want to be like a benevolent dictator. [Laughter] I’m letting go of those impulses as I get older. And it’s pretty exciting to see what’s happening.
Loren Feldman:
Liz, how are you thinking about 2023?
Liz Picarazzi:
I feel really good about it—not as great as I would like to. But I think most people feel that way. So this was our biggest year yet, revenue-wise. Growth-wise, it was not. We didn’t grow as much as we wanted. And it’s interesting that Jaci says that part of her year was that she didn’t retain a couple of important clients. We really had that concentration as well with some of our municipal clients in particularly New York City. So while we were able to recover the revenue that we had in government contracts last year, it still was something that we were a little bit surprised by.
And I think really, the climate in New York City with trash is rapidly changing. If you look in The New York Times any other week, you’re going to see something about trash or rats. But the sanitation department is experimenting with a lot of different things, and Citibin was just one of them.
So we still are all over New York City. We’re in five boroughs. We continue to get business from Business Improvement Districts that have their own budgets. But in terms of getting a big city contract, it’s actually not even something I’m pursuing anymore. In terms of the finances from 2023, I’m feeling good, but not great about it. I am a grandiose entrepreneur. [Laughter] So every year, I’m gonna say, “I want to double. I’m gonna do it.”
Shawn Busse:
I remember that at the beginning of the year. And I’m like, “Wait a minute.”
Liz Picarazzi:
Yeah, well, you know.
Loren Feldman:
You have done it, right?
Liz Picarazzi:
Yeah, but last year, not this year. But that is about the concentration of clients in municipal. In terms of 2023 and our mission, we have kept thousands of trash bags out of sight and contained in New York City and many other cities, many other public spaces. Our work just looks incredible. When I look at photos of my own work, I have to say I’m very proud of the bins and how well they beautify a lot of neighborhoods, commercial corridors. So that’s been really gratifying. Also feeling good about some of the new products that we’ve developed, some of which we haven’t even rolled out yet. We just did the photography for some of the new products that we’re pushing out, and that’s in January. That’s going to be really exciting.
Loren Feldman:
Can you give us a hint of what’s to come?
Liz Picarazzi:
Sure, so we have a couple of different sizes, where we can either go vertically or horizontally with the bins. And we’re going to be marketing—a double-depth, is what we call it—a double-depth bin that will fit twice as many bins in it. And we’ve been using that a lot in New York City, of course, where there’s such a space constraint where especially many large buildings, they’re not using their space efficiently, unless they have this sort of a double-depth configuration. Because they don’t have the width to have enough trash cans in the area. We’ve done a couple of these over the years, but they’ve always been custom projects. And it’s actually something that we’re going to be fabricating on a mass production level.
And then the other big one is composting. So we have modified a bin that we’re going to be using for composting. We haven’t started marketing it, but we are piloting it in Boston now. And that’s gone really well. So those will be a really big focus next year. I think that we’re poised for a really great 2024.
Shawn Busse:
So from a composting perspective, are you seeing that growing in other cities? Because here in Portland, we’ve been doing it a long time. And it’s actually pretty cool, but there’s no good answers for… Like our new building. They have this composting situation. It’s not pretty. So I’m just very curious, you feel like that’s a growth area?
Liz Picarazzi:
I do. Not for residential, but for public or community composting. I mean, the bins that we have in Boston are for community composting, and I think it’s probably not a huge group. In New York, at least for residential, we do have our own composting bins. I just restarted composting a couple of months ago because the city restarted in Brooklyn. And I can attest to how gnarly the cans can get, even after a couple of weeks. If you don’t line them up, if you let rain get into them, the maggots—I’ll say the gross word—there are maggots. But you know, if you look in a lot of trash cans, you’re gonna see them, too. But it’s so important, and it’s really hard to get people to change their behavior.
Loren Feldman:
Liz, has your business moved more in the direction of municipal than residential in the past year or two?
Liz Picarazzi:
Definitely in the last two years. In the last year, I would say we’ve moved more to like 50/50, whereas before, it maybe was like 10 to 15 percent. So it definitely has shifted, and a lot of my priorities for next year are in the municipal realm.
Loren Feldman:
How does that change things for you?
Liz Picarazzi:
We really want to replicate the success that we’ve had in New York and other cities, and we’ve already done a good amount of that. But it is going to take kind of perpetual marketing to continue to be that the brand that we are known for is municipal containerization. So I want to keep that going.
We do have a couple of competitors in the space, and I know that I’ve beat them into some of these cities, but they’re probably better funded than me. And so for me, especially in the early part of the year, to be really hardcore on the marketing and the reach-outs to cities is going to be important.
Loren Feldman:
I assume that marketing is very different if you’re aiming for business districts, as opposed to residential.
Liz Picarazzi:
It very much is, and Loren, with you as a writer, you’ll probably appreciate that I wear many hats when I write copy for different audiences.
Loren Feldman:
I love it when people say that, Liz. Thank you.
Liz Picarazzi:
Yeah, well, I mean, sometimes I’m writing for the bear audience. Sometimes I’m writing for the city audience, sometimes for property managers of multifamily buildings, sometimes for single-family homes. And I do have a writer who’s helping with a lot of that, but I still do write a lot of the copy. And I’m happy I’ve gotten a lot better at it, but when I first started having new segments, I did struggle with it and would drag my feet. But now it’s pretty easy to sit down and know, “Okay, I’m sending this postcard to Aspen. What should it say?”
Shawn Busse:
Liz, we’ve got three marketers on this. This is kind of funny. So we have three folks who have marketing or marketing adjacency. So how much energy, time, money, do you think you put into marketing? Express it maybe as a percentage of revenue. Have you ever quantified your time and your cost?
Liz Picarazzi:
I’m not going to speak on the financials of it, because I am not close enough to know if it’s like 10 percent or 25 percent. It wouldn’t be that much. But I would like to be more accurate. In terms of my time on it, I would say if you bundle lead generation, business development, and marketing, that it’s probably over half of my time.
Shawn Busse:
Yeah, and then what other resources do you have to support you in it?
Liz Picarazzi:
So I have kind of an internal person and a half. And then I also have three external contractors. They’re not full time. Like, I have one person that literally just does renderings for our proposals. She’s amazing. We can take a picture of any corner of New York City, anywhere that has trash bags on the corner, and we superimpose the bins on them. And those go into our proposals that have been requested, but I’ve also been known to send unsolicited proposals to people. And that’s been a really great resource. You know, anytime we have a brochure—
Loren Feldman:
Has that worked?
Liz Picarazzi:
I think so. I can’t say for absolute sure, because with some of those business improvement districts, we had several touch points. But I think they do appreciate that we’ve taken the time to do that. And it’s really a super-effective way for us to show the difference. Because if you’re in charge of a commercial corridor, and there are trash bags on every corner, that’s actually a pretty big burden on you to solve a problem that can be solved with Citibin. So, yes.
Shawn Busse:
So you said one and a half, you’re at least half-time. So you’re talking at least two internal people plus a team of part-timers on the outside. So maybe three FTE equivalents. Something like that?
Liz Picarazzi:
No, I overstated it. Some of the people who are internal are not 100 percent. So one person is probably only like 30 percent. She deals with a lot of other things.
Shawn Busse:
So what do you think the FTE equivalent is, once you add all that up?
Liz Picarazzi:
I would probably say one and a half.
Shawn Busse:
And your company size, number of people?
Liz Picarazzi:
We have seven. Actually, if I include everybody, it’s nine.
Shawn Busse:
Nine, okay. So about 10 to 15 percent of your workforce?
Liz Picarazzi:
Probably, yeah.
Shawn Busse:
Jaci, what do you think? You might have more. You’re a little larger. Have you quantified this for yourself, how much time, money, effort you’re spending on marketing?
Jaci Russo:
Well, I mean, on the one hand, like you, Shawn, everything we do is marketing all day long, whether we’re doing it for our clients or doing it for ourselves. I think that, like most agencies, we probably have had patches where we didn’t spend nearly enough time on ourselves, because we were really busy with client work. And I didn’t like that peak and valley of it. And I am never fond of that cobbler’s-kids-have-no-shoes kind of philosophy, because you should be your own best client.
And so we got really serious about three years ago saying, “We’re going to practice what we preach. We’re going to test everything on ourselves. And we’re going to make sure that we have a real plan in place.” And I think, over time, we’ve gotten better and better. ‘23 was our best year yet, in terms of making sure we had a content strategy, and we stuck to it. We honored our own podcast. We made sure our blog posts were out on time. We did the things we’re supposed to do. And we’ve seen the benefits of it, so I’d be crazy not to.
We don’t have any one person 100 percent dedicated to the marketing for our agency. Our PR team treats Russo like a PR client. Our social media team treats Russo like a social media client. And so everybody—or every team, not every person—has Russo assigned to them. So we make sure that we get the amount of attention and quality of work that we need.
Shawn Busse:
You’re what, how many people? Are you 20 to 30?
Jaci Russo:
All in, about 24.
Shawn Busse:
You know, this is kind of a leading question. And part of it is, Loren, you’re asking to look backwards and then look forwards. And I was on a call the other day with my financial consultant, and he has what he calls his “100 company model.” And it’s 100 businesses, kind of in that $5 million to $10 million range, probably some on the smaller side of $2 million. But I really like their model, because it captures a lot of different industries and a realistic small business size. And he said the model has started to massively bifurcate, meaning about half of the companies in there are declining and about half of them are growing.
He said that the growing group is spending on average 8 percent or more on their marketing, and the shrinking group is spending 3 percent. It’s like, wow, that is such a tiny number. And it just kind of goes to my thesis that—and I know this is gonna sound self-serving—most companies massively either underspend or undervalue the amount of marketing they’re actually doing.
In Liz’s case, she is the most expensive, most talented person on the team, and she’s spending half of her time on marketing. And I think a lot of owners don’t recognize just how complex marketing has become. And as a result, how much energy you have to put into it. I think that’s an important lesson, as to thinking about the future. I’m thinking about that myself. Because like you, Jaci, we went through periods of time where we were like, “Oh, yeah, Kinesis is a client of Kinesis.” But also the lowest priority of clients.
Loren Feldman:
Liz, I get your company emails, and I saw that you did a big cyber Monday sale. Did that work for you?
Liz Picarazzi:
It did, and it actually does every year. We only do that big sale once a year and for only one day on Cyber Monday.
Loren Feldman:
It was like 10 to 20 percent off, wasn’t it?
Liz Picarazzi:
It was actually 20 to 40 percent off, but only one product was 40 percent off. And it should be no surprise that it was the package locker that Frank hates and is trying to get rid of. So he’s trying to fire-sale them and get us out of the package-locker business. But then, interestingly, we did get a lot of requests. We did get a lot of purchases of that. So what does that say? Did they buy it because it was 40 percent off? Or because they’ve wanted one for a long time because they think it’s great, and they would love for it to continue?
One thing that’s interesting with it is that we do use HubSpot for our email marketing. And when we send out a mass email like that—we do them twice a week during the regular year. We don’t often look at the specifics of who’s opening it and how many times, where they clicked. Did they get into the Shopify basket or not? But on the day of the sale, we basically have HubSpot open all day, and we see who’s clicking it the most, who got to the basket but didn’t finish checking out. And if there are people who we’ve already been working with, and we know, “Okay, this person’s opened 30 times in the last two hours,” which can happen and did happen, then we know to get in touch with them to do a one-on-one with them.
The other interesting thing with our sale this year is that each year, we’ve actually gone down on what the percentage promo is. So a couple of years ago, it was actually 40 percent. And we figured, “We’re going to do it really high, because it really is only once a year, and maybe we’re not going to be profitable on it, but we’re gonna get a lot of buyers that otherwise wouldn’t buy.” That was way overly generous, especially because it’s our biggest revenue day of the whole year. And then last year, we put it to 25 percent. And then this year, we decided to put it 20 percent, and we still feel that that’s a really generous discount. The only other people who get that discount is if it’s a property manager or contractor or city that’s buying in a large volume. That’s really our deepest discount with those groups.
Shawn Busse:
This is so interesting. I’m just suddenly realizing you’ve built a pretty significant B2C thing. Do you know what your breakdown is between B2C customers and B2B customers or B2G, in terms of government?
Liz Picarazzi:
I actually did that calculation probably a year ago, and I don’t even remember what it was then. But if I were to guess what it is now, I would say it’s probably probably 30 percent B2G, 30 percent B2B, and then the last 40 percent B2C. It sometimes moves around, and the other thing is: Do I classify a property manager, which is a business, as residential or as B2B? And sometimes I kind of conflate those, and it’s hard to disentangle, but I’m definitely going to put that down as something we should do.
Shawn Busse:
Yeah, that’s really interesting. I don’t know, it’s just been my experience that B2C takes a ton of money. It’s just like a really costly customer-acquisition process. Whereas B2B tends to be more strategic, and the wins tend to be bigger and take longer.
Liz Picarazzi:
Yeah, that’s true. And also, I did more online marketing B2C—not too much, but over a couple years, I spent probably like $10,000 or $20,000 on it, which was a lot. And I barely got any conversions. And then, finally, I realized: Online marketing is best if you’re selling a sweater. It’s not great if you’re selling a $4,000 aluminum trash enclosure. People are not going to make a spontaneous decision based on an Instagram ad.
So we just stopped it completely. We were doing AdWords. We did some Instagram. We did some Facebook. So for B2C, we’re just relying on people who come to the site and sign up for the newsletter, which is substantial, because they also get the discount for it. Definitely a lot of word of mouth. We do get a lot of PR.
Shawn Busse:
I mean, that’s your thing. That’s kind of your driver, right? I mean, because why would people visit your website? It’s probably because they saw an article about you.
Liz Picarazzi:
A lot of the time, yeah. Because we can see where they came in from, too.
Loren Feldman:
Jaci, aside from realizing that you were a little too generous with the discount, did you have any concerns about discounting at all, just in terms of the potential for it to cheapen the product in some way?
Jaci Russo:
You mean Liz?
Loren Feldman:
Yes, I did mean Liz, thank you.
Jaci Russo:
Because I was like, “We don’t discount our services, Loren. I am opposed to that morally.” [Laughter]
Liz Picarazzi:
And I’m sure Jaci would say that, “I wouldn’t be spending 50 percent of my time on marketing if I worked with someone like her.” [Laughter]
Jaci Russo:
Actually, no, you know, I really feel like there’s three ways everybody should be going with their marketing. And they have to evaluate what’s right for them for a lot of reasons. Obviously, on the one hand, hire an agency, but you’ve got to be the right size and have a real need for growth and be willing to invest. To Shawn’s point earlier, if you’re not looking at spending 8 percent, don’t spend it on an agency, because you’re not going to get enough return on that investment to have the growth you need.
The second are the people who need some help, but don’t need a full agency. And that’s why we built Brand State U, and we have a whole online education platform to teach people to be better marketers, because they have to do it themselves. And then there’s the group that’s just out there on their own trying to figure it out. And God bless y’all.
Shawn Busse:
I agree with Jaci on that one.
Loren Feldman:
Liz, let me ask you: Did you have any concerns, when you did the first Cyber Monday discount, about the impact that could have on the brand?
Liz Picarazzi:
I did. I did at the time, but then I experienced that it didn’t have an impact, because in terms of the communications, it’s really only several days of communications that go out. They’re pretty isolated. We also do a targeted list. We don’t do it to everybody. Now, I will say that there are several people who have the email blasts from three years ago that say 40 percent off who will still try to redeem it. [Laughter]
Jaci Russo:
You’re not Bed Bath and Beyond. That’s ridiculous.
Liz Picarazzi:
Right. And which is funny, because, no, the sale was literally only for one day, three years ago. [Laughter] So it’s isolated. It’s isolated to one day and to one year. And you know, it doesn’t happen too often. I guess if I were the consumer, I might try to do that too. But it’s funny when it happens.
Shawn Busse:
It’s okay for Liz to be cheap, but her customers better not be.
Jaci Russo:
Yeah, correct. [Laughter]
Liz Picarazzi:
Well, you know, I should see if my mom’s listening to this. Because she’s a Midwesterner, like me. You do not spend that much money on anything, and definitely not on your trash. She’s always like, “Elizabeth, I don’t know how you can get so much money for those things.” You know, lovingly, yes, but it’s probably why I’m not spending anything marketing in Wisconsin.
Jaci Russo:
Can I provide some unsolicited feedback—which is usually criticism, I have learned. But this is not. This is to uplift what you just said. I think you need to do a whole ad campaign around Mom. I’m serious.
Loren Feldman:
I was thinking the same thing as you were doing the voice.
Jaci Russo:
Loren and I agree. I want Mom talking about how ridiculous it is and how expensive it is. And no one should waste their money like that. I mean, there’s a whole family dynamic there that may send you all to therapy, but it could also be hugely impactful, because you’re going to cut through the clutter. That’s the last thing I expect you to tell me. I want to see photos of Mom shaking her head disapprovingly. I want to see videos of mom tapping her finger and just like, “No.” It will drive sales.
Liz Picarazzi:
I will consider that. [Laughter] Although, Jaci, we haven’t known each other that long. But Loren and Shawn will tell you that I have like 300 ideas right now that are competing. I’ll add that as the 301st.
Jaci Russo:
I’m fine with that order of priority. I’m last to arrive. But I think there’s something here we should play with at some point.
Liz Picarazzi:
Yeah.
Loren Feldman:
Jaci, you told us before that you’re really excited about next year. I want to ask all of you this: Tell me, why are you excited about next year?
Jaci Russo:
I’m excited about next year for a lot of reasons, Loren. I don’t think that I’m ADHD. I feel like I’m kind of on a path, and so I’m not usually squirrel-chasing. But I’ve got a lot of irons in the fire right now. And they’re making me equally excited, and so that’s kind of fun. For the agency, every time we make a shift, a change, an improvement, I see the results of that. So I feel really good about some changes we’re making currently in elevating our content.
Loren Feldman:
Are you going to get those two clients?
Jaci Russo:
Well, yeah, they’re coming too, so that makes me excited. And there are two others who have pushed us to January, but they keep calling us. So we feel really good that January is the lock. So we should start with four new ones in the first two months, so that makes me happy.
Brand State U. that I referenced earlier, I believe firmly in collaboration. I don’t think there’s competition—that’s for the lower level. Big picture thinking should have big picture collaboration. And so I brought in four other trainers, for lack of a word—professional development; employee talent, retention, and recruitment; sales. People all in my world but don’t do what I do. And the five of us are putting on a conference—kind of similar to what you’ve done, Shawn, in my research, I realized. We’re calling it Growthx, and it’s for small businesses in the area. And we’ve got chambers of commerce from different towns who’ve lined up for us to take our little show on the road and bring it to their community.
Loren Feldman:
Shawn, how are you thinking about next year?
Shawn Busse:
I’m actually maybe a little more measured person, just in general, but I’m actually feeling better about it, and in a weird way, because I actually think it’ll be hard for a lot of businesses. It’s an election year. We’ve just seen a lot of chaos, right? War in Gaza, war in Ukraine keeps grinding on. But I was thinking about this the other day: We went through a period of time in 2011, 2012, through 2017, where we grew really fast—30 percent or 40 percent a year—and kept winning all these awards. Fast growth, fast growth. All of that growth, as I reflect back now, came out of the Great Recession.
In other words, hard times encourage people to think differently about their business and kind of shakes up this kind of status quo thinking. And that’s actually good for us. And so I’m optimistic about next year, in terms of people wanting to try something different. I think a lot of us have been in this defensive posture from the pandemic, like, “Hey, how do I survive this thing?” And I think the free money has run out. I think the recognition that you can’t just sit around is there. And I think I want to speak into that. So I’m optimistic in that respect. And I have such a great team. Best team we’ve ever had, hands down. No drama, long tenure, just a ton of talent. So I’m excited about that.
Loren Feldman:
How about you, Liz?
Liz Picarazzi:
So there are a couple of things that I’m really excited about and a couple things that I just need to do that I’m not like hyped up about, which are operational, of course. So, I mean, really, the top one is, as we expand nationwide, we need to set up great distribution channels. We need to have people to ship product who will install it. In Aspen and Vail, we have someone who’s going to be doing that, but if that’s successful, then we’re going to replicate it in other cities.
And another thing is that with expansion nationwide, when I’m in other cities, I’m spending more time looking at their trash and looking at their trash problems. And I know it sounds funny, but the thing is, from an anthropology perspective, I see that in most cities, they have alleys. And I don’t really have a product for alleys. People aren’t going to want to spend a lot of money on a trash enclosure, which is a big cabinet. If they’re trying to hide dumpsters or trash cans, there might be an opportunity for something less expensive and less like an enclosure.
So when I was in Aspen recently, I was walking through these alleys, and all the dumpsters, they’re such an eyesore in the back of really, really expensive homes. So you guys will be like, “Oh, there she goes on another tangent,” but the word alleys is always at the top of my head. What am I going to do about alleys? Because I know there’s something to do there.
And then a couple things that are less sexy, but are important. As we’ve expanded our products, we haven’t been thinking a lot about product architecture. They’ve kind of been on the fly. What do we call this thing? And now we have three different sizes of trash enclosures that don’t make sense, from a nomenclature perspective. So our smallest one is called a standard. We have a new midsize that was being called the 2.0 for a long time, and I hated it. And then we have the size extra large, we call it. So those three are a) confusing to customers, but also are confusing, I think, for anyone trying to sell Citibin. Because if you’ve got three sizes, why not just have small, medium, large?
So that’s what we’re doing. We’re shifting, as of January 1st. But that does create a huge project, because every touchpoint, or every area where we have the product label—from on the website, to our email communications, to even the boxes with the bins in them with the factory—there are so many places where we need to change that. And so that sort of product architecture is going to be a pretty important thing. And I’m kind of excited for it. It’s long overdue, but it’s just become more important.
And then the other unsexy thing that I’m doing is we’re really trying to get more buttoned up on processes, making sure everybody has a job description. We don’t have an employee manual, I’m kind of ashamed to say, after 12 years in business. We’re finally going to be doing that.
And really getting buttoned up on the financials is also going to help with another goal I have in 2024, and that’s to get a valuation. And I want to be prepped for that. I want to have everything in order. We’ve never had a valuation done before. It’s not because we imminently want to sell the company. It’s that we just really want to know what its value is right now. Because Frank and I derive all of our income from the business, and we’re really planning on being able to sell it, at some point, to have a great retirement.
Shawn Busse:
Hey, Liz, I’m happy to give you our employee handbook, and you can just cut it apart and use it however you want. I mean, I’ve spent a fair bit of money on it over the years, but I do this all the time. There’s no reason to start from scratch.
Liz Picarazzi:
Yeah, I will totally take that. It would be great. I’m sure you have many, many more benefits than me. So it’ll be a shorter handbook.
Shawn Busse:
I don’t know. It’s less about the benefits and more just about how to kind of act within the company and values. So I found that that’s really helpful to articulate that early and often. I’m sure you share that value.
Liz Picarazzi:
Definitely.
Jaci Russo:
Shawn, have you taken the values and also started to work on elicited behaviors to live through the values?
Shawn Busse:
Yeah, so we’re really big into the idea of how you operationalize. A lot of folks pick values because they sound good, and then they put them on the kitchen wall in their break room. And then, in the worst case, the employees kind of roll their eyes and laugh at them. I mean, that’s the worst case. But I think most people are in the middle ground, which is they pick things that sound good. Unfortunately, they pick integrity, excellence, and quality, or some variant of those, that aren’t actually that remarkable or unique to the business.
And so that’s phase one: Pick something that’s meaningful. And then build an operationalization of those values and define: What do you mean when you say, integrity? I would encourage people not to use that one because everybody uses it. And it’s a cliche. But pick something that’s actually really good. Pick a value that’s like, “Care about what you’re working on.” Or, “Think big.” That’s one of our values.
I prefer values as verbs, instead of nouns. So make them action-oriented, define what they mean, write a paragraph that talks about: What does this value mean? And you can include behaviors in that, too. I think the more blue-collar your business, the more you want to spend energy on the really specific and talk about those behaviors that align with those values. I think if you have a highly-educated workforce, you can be a little bit more broad there. You can probably be a little bit more broad there. I think that’s a great question. What about you?
Jaci Russo:
We did. I like the way you just phrased that. I’m gonna take notes and totally credit you later when I tell my team I had this great idea.
Loren Feldman:
Unfortunately, we are out of time. If you want to hear more from these guys, come to Fort Worth in March. My thanks to Shawn Busse, Liz Picarazzi, and Jaci Russo—and to our sponsor the Great Game of Business, which helps businesses use an open-book management system to build healthier companies. You can learn more at greatgame.com. Thanks, everybody.
