How Tommy Mello Spends $5 Million A Month On Marketing And Tracks Every Dollar | Sara Nay

Tommy Mello (0:00)

Why is it dangerous to only be referrals and word of mouth?

Sara Nay (0:04)

A lot of clients have come to us, like they've grown to let's say a million based on good service, word of mouth, referrals, connections, but they're stuck, and they can't get to that next growth path because they've only been reliant on that.

Tommy Mello (0:17)

Yeah, but you're tiny, and you're still doing the work yourself. Why are you so proud of that? They got the really shitty rap on their truck, and they're like, I don't need a good rap to get business. I do it through word of mouth. Welcome back to The Home Service Expert. Today, I got Sara Nay with me.

Sara Nay grilled watching her father build Duct Tape Marketing, one of the most trusted names for small business marketing for over 30 years. She started as an intern, rose through every role, and became the CEO.

Her new book, Unchained, endorsed by Seth Godin, makes the case that the way most small businesses do marketing is fundamentally broken, and she had a system to fix it. Today, she breaks down why paying a marketing agency isn't the same as having a marketing strategy. What every contractor should know, should own instead of rent, and why referrals alone will never get you to 10 million. I cannot read today. I'm sorry. I butchered that, Sara, but it's a pleasure to have you on.

Sara Nay (1:12)

Thank you for having me on. I think people like authenticity in the age of AI, so they can tell that you're human there in that intro.

Tommy Mello (1:21)

Tell us about you, Sara. Tell us about how you started, what you're excited about, what you're looking forward to.

Sara Nay (1:27)

Yeah. So I started at Duct Tape Marketing, as my intro said, about 16 years ago as an intern. At that point, I was after college, I had done some traveling around the world and I was like, okay, I need to get serious about a career path. So I started part-time as an intern. I didn't know anything about business or marketing at that point. But I've, as you said, had all the different roles in our company over the years, and I absolutely fell in love with solving problems and learning new things. That's what a lot of is included in marketing. Things are changing very quickly right now in the age of AI.

So it's allowed me to just constantly be learning and growing. But if you had asked me a couple of years ago, what do we do for a living? I would have said, we're a marketing agency or a fractional CMO firm. But of late, I've been saying more of, we help small businesses stop wasting money on marketing. Because I believe there's so many people out there that are just throwing money out there and trying to get results when it comes to marketing. But they're not doing it in a way that makes sense. So standing up against wasting money on marketing and helping people spend effectively.

Tommy Mello (2:34)

I love it. Yeah, I mean, we go through over $5 million to spend a month on marketing. And I think what most small business owners lack is any knowledge of how marketing works, of attribution, of understanding the customer cycle, booking the call, reducing cancellations, capacity planning, conversion rates. I don't mind what the cost for lead is. It could be $10,000 if I get $50,000, who cares? But they don't follow it through the cycle, so they don't even know if it's good. And everybody wants cheap leads. And they wonder, well, why are my leads so much? Well, do you look at the outcome of the leads? Because I can get the, I, I have a garage door company for us.

And I don't want a bunch of battery replacements to light bulb changes. You know, I want demand driven calls that turn into conversions with, you know, decent tickets.

What do you think the biggest problem is for small businesses?

Sara Nay (3:29)

Yeah, I mean, I feel like I have similar conversations every day with small business owners. It's like, I just need more leads. I need more leads, I need more leads. And I'm like, do you need more leads?

Or are you taking care of the leads that are already coming in? Are you tracking things effectively? Are you seeing where your customer journey drops? Are you getting reoccurring revenue? If it makes sense, are you turning your clients into referral sources? So more leads is always the thing that people start to think about when it comes to marketing. But I always argue, oftentimes, if you don't have the rest of your customer journey buttoned up, you're just going to waste money on these more leads. And so I absolutely agree with you saying, what you're saying is looking through the whole entire customer journey. And so we have our framework that we call the Marketing Hourglass. It's how are people getting to know, like, trust, try, buy, repeat, and refer a business. And so you need to be thinking through, like, are you nurturing and taking care of people in each of those stages? But to your point on tracking, also, how are you tracking that people are effectively moving through these stages? Because when you have those things set up, you're able to say, OK, maybe more leads isn't what we need. We have people coming in, but they're not converting, and they're not turning into clients, and they're not retaining the long term, so we need to button up all of those things before we can go back to saying, OK, now we're ready for more leads.