Subscribe
Share
Share
Embed
Gain firsthand insight into how auction professionals can overcome growth barriers and use technology built by auction people for auction people, without losing the personal touch.
Brandon Giella: Hello and welcome
back to the Innovate Podcast I have
with me as always, the illustrious.
Jody Amaya, thank you
for joining me today.
We have a special short episode
Today what we wanted to do was talk
about the ROI of brand independence.
And what we mean by that is we want to
provide a simple case study, or let's
say an RQ ROI calculation based on the
themes that we've been covering over
the last few episodes to make the point
clear what is the business value of
providing auctions where a lot of your
bidders are coming from the marketplace.
There are lots of ramifications
for this, but we wanted to make
a really simple case study.
And so Jody, you have created this lovely
graphic that we'll share in the show
notes, and I'll describe for our audio
listeners, but you'll see this on YouTube.
Please go follow us on YouTube.
It's a lovely show, um, where we have
a, a graphic here that outlines the
calculations that you make when you're
talking with customers and you're
trying to explain the value of your
solution, but generally the, the, the
solution or the marketplace problem.
For auction owners, if you, if you
call it that, we talked about there
are a lot of benefits that are coming
from the marketplace, but there
are some downsides, and that's kind
of what we're talking about today.
Now, to explain this graphic, what we
have here is an example auction where
you have a a million dollars sold
on this auction, and then there are
some fees that are related to this.
This auction of selling a million
dollars worth of inventory.
So, Jody, I'll let you walk us through
some of these lines to help explain how
you came up with these numbers and what
they might mean for auction owners who
are thinking about this issue in their
business and the change in the trajectory
of their business over time, if they
can understand this business value.
Jodi Amaya: Okay.
Um, thank you.
Um, so it's important, um, I think
to recognize cost in your business.
And one of the things, um,
one of the things that we can
measure is what you're spending.
At the marketplace.
Um, so you could look at, let's say that
you have an auction coming up this month
and, um, you, you think it's going to
be, uh, about a million dollars in sales.
And so you, uh, agree to pay your
marketplace provider or maybe
multiple marketplace providers, um,
an advertisement for that event.
Um, and then you've got outside
marketing agencies, you know,
maybe your email campaigns.
Uh, your social media, your digital, uh,
uh, uh, advertisements, your hand, uh,
brochures if you still mail in the mail.
Um, and let's just say that that cost
right now, the event advertisement
for the marketplace is $5,000.
The outside advertising is $20,000.
You plug in your own numbers here,
but then let's say you have that
event and it's a million dollars
in sales and 75% of those sales.
Uh, go, come from the marketplace.
Um, it because you don't have a white
label and you're solely dependent
upon that ma that, uh, marketplace.
So 75% of 1 million times 2%,
if that's what the marketplace
is charging you, is $15,000.
So what if, uh, well, we'll
get to the what if in a minute,
because I'm, I'm already excited.
I'm already going there.
But let's say 75% of winning bidders.
That total spend was $40,000
and that equals $533 per buyer.
But what if you were able to convert
those bidders to your white label?
And let's say even just 30%,
um, are repeat buyers, um,
with no, not a lot of work.
And InnovA can show you how to do it.
We'll even do a lot of it for you.
Um, just by making some simple changes.
Um, you can convert these
buyers and let's say.
If that was your 30%, $14,000 per
event, let's say you have a monthly
event, $144,000 a year, just for 30%.
I mean, I, that sounds like a
good number to me and a good ROI
I could take another $144,000,
Brandon Giella: That's
right, that's right.
Jodi Amaya: buy some, like a,
just a couple of little things.
Brandon Giella: that's right.
A couple of little changes.
And you're talking about over
a hundred thousand dollars in
savings per year, which adds up.
And we all
Jodi Amaya: And I, and I've been doing
it with my customers and that that's why
they're willing to speak on my behalf.
Brandon Giella: Yes, that's right.
This, these are real numbers.
This is not something you're making up.
These are real numbers.
These are case studies that you've
actually got where you could
point to legitimate customers that
have saved a tremendous amount
of money every year by thinking
differently about the way they run
Jodi Amaya: this is
actually, uh, a fraction of
what my customers did just because I
was rounding it out to a million dollars.
So that somebody else could take
it and go, okay, 3 million, okay,
5 million, you know, or half
a million that they could easily
see what their numbers would be.
Um, my customers had, have had
a significantly more savings,
um, and results than this.
Um, but I wanted to, to have
an easy shareable use case,
Brandon Giella: this is great.
This is great.
I think what's interesting, we were,
we were talking about, uh, before
we started recording that it's not
just this number annually in costs.
There are a lot of other
things to be considering when
you're running a business.
You're trying to attract buyers, you're
trying to build, you know, loyalty.
Build a brand, build a business long term
that are way more important than this.
ROI calculation.
This is where you know, where you get into
to things like customer acquisition costs.
If you build loyalty in your, your
audience that wants to keep coming back
year after year, auction after auction,
there's you, you extend the customer
lifetime value of that particular buyer
Jodi Amaya: and that 5 33 cost
goes down and down and down.
Brandon Giella: That's right.
That's right.
But also, you mentioned this, and
I, I wanted to hit on this really
quick, is you were talking about
how there's also like brand equity.
If people have a good or bad experience
with your brand, that starts to add
up, not only in network effects and
marketing, you know, and talking
to other people, but just that that
compounds over and over and over again.
Tell me more about
Jodi Amaya: sometimes those are
the dollars that we cannot track.
Um, but when you have a customer
experience that you, you have
your inventory experience.
That's why your buyer shows
up from the beginning.
Your buyer.
Didn't come to you because they love you.
They didn't come to you because the
marketplace, uh, insisted that they did.
They came to you because they
were interested in something
that you have for sale.
Now, they may become a loyal buyer.
Once they have good service, they
won't just stay with you because
you have something for sale.
There's too many other people
out there that are selling
the same thing that you are.
So if you have a good.
Buyer experience from beginning to
end, which is hard for you to control
whenever you're utilizing a marketplace.
And I'm not saying leave the
marketplace, I'm just saying if, if
I made a purchase for, let's just say
this cute sweater, I bought it off
of Amazon, but I don't know from who.
I have no idea from who, but I
just bought it off of Amazon.
And if Amazon.
Was did me dirty and I for said
I never wanna see Amazon again.
Then I am.
That seller is impacted, but that
seller may be a really nice person.
So that is the cost that we can't
track.
But if you have those buyers
in house, in your white label.
And you know that, you,
that they have good
service and that, um, That your
descriptions are correct and, and
that you've communicated with them.
You're building that loyalty to your
customer and they will shop with you
instead of your neighbor who has the same
equipment for sale because of your, uh,
the way that you're running your business.
Brandon Giella: That's right.
You start to control.
You start to have a business
that say like, okay, I'm building
this thing that is independent.
It can leave a legacy.
It can start to drive real value to
people over and over and over again.
That is independent from other
Jodi Amaya: And that's where I
came up with brand independence.
It was just something I, it wasn't like
a creative marketing thing, it was just,
it's something that I, a word that kept
coming up was, um, to, to be independent,
you know, because I remember, um.
Using market.
I used Marketplace, uh,
many of them for 17 years.
But I felt and feared that I was
dependent and that if I pulled away from
them that I would lose all my buyers.
And I think a lot of
people still believe that.
But what I found is quite the
opposite is that, um, I, I
should have not flattered myself.
My buyers were not interested in.
Me, they weren't interested
so much in the marketplace.
Um, but they're interested in the
inventory and, and, and quality,
um, and consistent customer service.
So whenever, um, I started doing
these conversions, um, for myself,
but also for customers, it's, it's
been really painless and it was
something that I feared forever.
And then, and then it
hasn't been that hard.
Brandon Giella: Amazing.
Amazing.
But, and you get immediate
bottom line savings.
Uh,
Jodi Amaya: And gratification.
Yes.
I mean, you get that savings,
you can calculate it, you can
go, okay, I am on the right path.
Even if I did 10%, 20%, 30%.
Oh, okay.
Well now I, I know that I can do 75%
if I want, you know, I can get there.
Brandon Giella: You can get
there in one auction event, or
you can get there over years.
That adds up.
Either way.
You can do it once or a hundred times
and it, it starts to really add up.
Jodi Amaya: Depending upon how
much effort you wanna put into it.
But yes, the easy button, um, for
my customers has been around 30%,
uh, to where it's just the, the
users are self-serving, they're
just going and signing into the
white label, and the users love the,
uh, services of the white label.
Being able to see their own
invoices pay from there.
Um, so they're, and
it's helping the office.
Staff.
So all of those things are dollars that
we're not even adding into this equation.
It's, it's cutting down
number of phone calls.
It, there's a whole, um, thing that
is happening to be able to serve
your customers from beginning to end.
That, uh, really does save you more
than this $533 $533 but this is
something we can easily calculate.
Brandon Giella: E even including the
data associated with those customers,
the, the ability to remarket to them, the
ability to actually build an asset value.
That's another thing that we've
talked about in another episode.
The asset value of your customer list.
Yeah,
Jodi Amaya: if you're not doing it.
I don't know.
I don't know why, but I would
Brandon Giella: I don't
know what to tell you.
Jodi Amaya: Yeah.
I don't know what to tell you, but
Brandon Giella: Please write to
Jody if you're not doing this.
Write to Jody.
She wants to talk to you.
Okay.
So, so to sum up here in the
last minute or so, I love this
like, fast pace, uh, episode.
This has been so, okay, so a million
dollars sold on this auction.
75% of those, uh, bid winning
bidders came from the marketplace.
You send a 2% fee of those bidders,
$15,000 to the marketplace.
It's just a fee for doing business.
You have $5,000 of marketplace
event advertising, and then let's
say, uh, in general, on average for
something of this size, $20,000 or
so of additional advertising and
marketing around that totaling $40,000.
If you break that down to 75
winning bidders, it's a little
over $500 per buyer, and that's
for one event at a million dollars.
If you do many more events
and many larger events, that
number starts to add up a lot.
Jodi Amaya: It.
Brandon Giella: Is that a fair summary?
Anything else people
Jodi Amaya: I think no, that is it.
It's that, it's the math is that simple.
Um, you know, anybody can do this,
but if you want a partner that will
make sure that this happens for you,
I think that's in of a, uh, of course
I have to pitch for us, but, um, you
know, I have not trademarked this.
Maybe I should, but it, it is just,
you know, I, I really do believe in
the brand independence and, um, yeah,
I'm excited to help people do it.
Brandon Giella: Amazing, amazing.
Okay, I love this quick episode to,
to really illustrate this point.
Like I said, we've been talking about
a lot of these themes over time,
but for this episode number six, I
believe this is the calculation we
keep talking about and going back to.
So, uh, stay tuned for
more and future episodes.
Jody, thank you for joining me and
Jodi Amaya: Thank you, Brandon.
Okay, bye.