Dear Reader,

What would Jesus say about pay-per-click leads?

He already told us — about houses, foundations, and sand.

Google is constantly changing how your home service business generates leads.

They promote these changes as if they’re for your benefit, but they mostly benefit Google and the pay-per-click marketers that resell their services.

Every quarter new rules appear.

They call it the “algorithm.”

The “algorithm” slips and slides under your business.

You’re gaslit into believing this is just how it works, and you need to sink more money into ad spend.

So, you do. You sink deeper, never getting a firm footing.

Your business is like your house. Marketing is its foundation. Google is sand.

You can build on sand, but only with very deep pylons.

Branding is the pylon that drives deep into the mind.

I think Jesus would say, “Don’t build your house on shifting sand.”

In this episode, you’ll learn how to build your business on solid ground.

Watch / listen above or read below

Todd Liles: Welcome to Todd Liles and the Wizard of Ads. Today is episode number 22, Why Your Ads Aren’t Converting. We’re gonna be talking about the major shift in Google, why it’s taking place, what to expect, and how to combat it. Roy.

Roy Williams: Hey.

Todd Liles: Welcome. Thank you for being here, my friend.

Roy Williams: Always good to be here.

Todd Liles: Before we jump into the episode, breakfast was tremendous this morning. So we had a chance to have breakfast. It was good. Got us all charged up for a great, tough topic. So you ready to jump into this?

Roy Williams: Absolutely.

Todd Liles: All right, beautiful. So, Roy, today we’re gonna be talking about one of the biggest frustrations that I know is going on in business right now, which is Google leads are not hitting the results that they used to get for the cost that they used to cost. They’re producing less.

Roy Williams: Right.

Todd Liles: In today’s show, I want to break down some of the reasons that I think it’s occurring, and I’m also gonna reference some resources here. Now, the real key to this is because we are in branding and relational marketing.

Roy Williams: Right.

Todd Liles: I want to give the listener some things that they can do to overcome the weakening power of Google.

Roy Williams: Right.

Todd Liles: Actually, maybe the strengthening power of Google, but the cost of Google. Now, Roy, I want to reference some back source material. I always love drawing from your sources, but today I’m also drawing from a few outside sources. So I’m just gonna let the listener know that if you want to reference this material, these are not just my opinions alone.

So here are some articles: Google Ads Cost Per Click Benchmark Reports from PPC Land 2025, Why Google Cost Per Click is Increasing from PPC Hero 2025, Click Inflation in ’25 from Pivot, Home Services Benchmarking. And of course, we’re drawing from the Monday Morning Memos, specifically Gross Point Ratings, Media Measurement Mistakes Chapter 1 and Chapter 2.

So, Roy, this is gonna be a heavy one. Are you ready?

Roy Williams: Oh, yeah, yeah, yeah.

Todd Liles: All right.

Roy Williams: I’ve got a lot of opinions.

Todd Liles: I…

Roy Williams: Some of them may actually be right.

Todd Liles: I’d be willing to bet several of them are. Section number one, we’re gonna talk about the end of the post-COVID surge because I think, Roy, this has a huge impact. The inflation and the economy were uncertain in the past, or more so today. It was uncertain during COVID and we found the opposite effect. It actually created easy money.

Here’s a quote I want to give you. This is from PPC Land 2025. Listen to these facts. Google Ads costs have increased 12.8% year over year since COVID, driven in part by inflationary pressure and tighter competition.

Roy Williams: Now, when you look at 12.8% compounded by three or four years, that’s a lot of money.

Todd Liles: It’s a lot of money.

Roy Williams: That much per year compounded is, wow, it’s 60% increase at least.

Todd Liles: It’s terrifying. I had a conversation last week with a small business owner, who said, “Todd, I’ve only got $2,000. How should I best spend it on Google?” And my answer was, “Don’t.” If you’ve only got $2,000 per month, we need to find other ways because spending it on Google isn’t gonna do it.

Roy Williams: I would have possibly offered a different answer.

Todd Liles: Well, go ahead, offer it.

Roy Williams: I would just tell ’em to buy their own name. And everybody assumes that if they type in my name, I show up number one organically, and I’m going, “No,” because paid search is always above organic search. And I believe everybody should have an unlimited budget to buy their own name. When somebody’s looking for you by name, that’s a high-conversion click with a high average sale and a high profit margin.

Todd Liles: Yeah.

Roy Williams: Because they’re not shopping, they’ve already chosen you. And I say that in this digital age, everybody should always make sure that 24 hours a day, if somebody’s looking for you and they type your name into Google, be there.

Todd Liles: You’re exactly right about that. So thank you for that constant reminder. And you have said that many times. I want you to keep saying it because it’s something that people need to have in their head. That’s that repetition. In Advertising Oversimplified, one of your Monday Morning Memos, you said the following: “Used consistently, mass media will cause your company to be the one customers think of immediately and feel the best about when they finally need what you have to sell.”

So this brings me to another quote and to my first question. You’ve said many times, and I love this, “Advertising cannot, in fact, sell what no one wants.” So in this time of economic uncertainty, how should business owners adjust their expectations when it comes to Google? I think you started off good with buy your own name.

But to put it into perspective, I think the expectation of a lot of people today is that they still think that they can get a click and a lead for 25 – 50 bucks. I think they think that’s what they’re gonna pay today.

Roy Williams: Right. It’s an extremely efficient auction. And the fact that everybody is attracted to Google for one reason: it’s easily measured. And because you’ve got this data and you feel like you’re in control and you can tweak it and adjust it and move with the groove and go with the flow, it’s like, no, that doesn’t actually give you any power to keep you from overspending. It just makes you think you’re gonna out-clever Google and you’re gonna out-clever all of your competitors. And I’m going, it’s not usually the case, but everybody thinks it is.

So what happened during COVID, I want to put a little different perspective on that. It wasn’t so much a time of economic uncertainty. It was a time of unspent cash. People still had jobs, but they were not spending that money on trips or restaurants or socialization. And so whenever you have no way to spend money on fine dining and hanging out with friends and going places and doing things and vacations with the family, there was a window of years there when our world turned inward. And what happened is your house became your universe.

Todd Liles: Yep.

Roy Williams: And all of the money that you were making, I mean, you’re still employed, you’re still making this money, it began to pile up. “Wow, let’s remodel the kitchen. Let’s build an outdoor kitchen. Let’s repaint the house. Let’s install a new air conditioner. Let’s buy all new furniture.” And so anything that had to do with houses or home services got tons and tons and tons and tons of cash. Guess what else people spent an astounding, breathtaking amount of money on? It skyrocketed even more than home services.

Todd Liles: I don’t know.

Roy Williams: Jewelry.

Todd Liles: How about that?

Roy Williams: The people you love. “And now I’m gonna do something. I’m gonna get my wife this big diamond for our anniversary because I’ve always wanted her to have a really big diamond.” And so people that were already in relationships got engaged. Now, the weddings didn’t happen until after COVID was over because they got engaged, and then they’re obviously in each other’s lives. They’re in each other’s personal space, so they were not afraid of getting COVID from each other, but they didn’t want their families to have to get on airplanes and fly across the country and their friends to gather somewhere until COVID was over.

So there weren’t a lot of weddings. But then, I mean, the minute that people felt safe, this record number of weddings started happening because they had delayed that. So it was all about your personal space and your closest circle of people you love. And that’s where all the money went. And then the split second that we could go to Disney World or go see a play on Broadway or travel to Europe or all these things, we had cabin fever. We’d been cooped up.

So all of a sudden, all the money fled from jewelry stores and home services, and it went into hospitality, it went into restaurants, and all this kind of stuff. So I’m going, yeah, the money was always there. It wasn’t economic uncertainty. It was lack of things to do with the money.

Todd Liles: Yeah. And there’s something else that I’ve not thought about until just this exact moment, which is what are you doing with the money? I’m going back and I’m thinking about during that period of time, the first time that we had a block party with a neighbor. And when I say neighbor, I mean just one family.

Roy Williams: Wow.

Todd Liles: And we cleared it, like, “Hey, we’re all good. We’ve done our test. Are you guys healthy? Yeah, we’re healthy. We’re all healthy. How about we go sit on your porch and we’ll let the kids play and we’ll sit around and we’ll talk.” And we were like, “Oh, we’ll be safe, right? We’ll keep our distance.” And it wasn’t very long until, “Nah, nah, we’re just hanging out.” And that first thrill of social interaction, and this is what the thought brought me to, there’s this old saying that nobody wants to see a plumber, electrician, a roofer, an air conditioning guy.

Nobody wants you to come to their house, except for a short period of time after COVID when it’s like, “Oh, wow, another human.” And I’ve never thought about that. Just another human in your house is exciting. And I was visiting with one of my friends, a good friend, and she was telling me about her business and how it was a little bit tougher this year. And I said to this friend, I said, “You know, I don’t think it’s tougher.” And she goes, “What do you mean it’s not tougher? I know it’s tougher.” I said, “No, I don’t think it’s actually tougher. I think we’ve had an adjustment. I think you got very accustomed to business actually being easy. I think you’re just back to normal. You’re just back to normal.”

Roy Williams: Correct.

Todd Liles: Now, we’re gonna go back to Google because she wasn’t talking about Google. She was talking about homeowners and them investing money. And I look at this period of time going, “No, no, it’s pretty normal. That’s what companies like ours are for.” But if we switch back to Google, the truth is, yeah, Google has gotten tougher. And I can remember people saying, “Hey, I can get those $50, those $75 leads,” and now they’re up to like $450. I had a young man send me a handwritten list, Roy, of his plan for advertisement. He had at the top how much revenue he wanted.

He had it figured out, like what he thought his call conversion would be, what he thought his close ratio would be, all of these things. And we got down to the bottom. He was labeling his number one lead source as to what he thought was gonna be Google, and he had put 10% there. And I wrote him back. I said, he’s a brand new guy in business, brand new, so he has no existing customer base, I said, “Hey, that 10% rule is for when you also have existing customers.”

Roy Williams: Who call you, repeat and referral customers. And when you don’t have repeat customers or referral customers, you have a long, tall mountain to climb and it’s slippery.

Todd Liles: Yeah. And he’s like, “What does that mean? What should this number be?” And I said, “That number’s gonna be anywhere between 18 to 25% for new client acquisition.”

Roy Williams: I would have guessed higher. I’m sure you’re right because you have the data, but I would have guessed higher.

Todd Liles: It’s high. And it just obliterated his world. He’s like, “I can’t afford to advertise.” I’m going, “Right. But what you can afford to do is you can afford to brand, relationship build, seek referrals, nurture the hell out of these people.” And I said, “Look, for the next two years, every customer you see is nurture, nurture, nurture. How can I help you? Who can I take care of that’s your family, that’s your friend?” I’m like, “You gotta become a relational guerrilla marketing genius because if you’re trying to do this on Google, you’re gonna go broke.”

Section number two that we’re gonna talk about today is Google and their revenue push and bid inflation. Essentially, if we take a look at what Google is doing right now, they are removing many of the old aspects that we used to depend on, search engine optimization. But with their AI-driven automation and bidding strategies, Google is driving cost per click up even more than ever. So lead volume isn’t increasing, although costs are. Roy, I’ve got this quote here from Pivot, and it says the following: “We’re witnessing click inflation. More money for fewer clicks. Automation is designed to maximize Google’s revenue, not yours.”

Now, you said something a long time ago, way before this bid inflation was going up, in your article Gross Rating Points. I really recommend that people read it. It is an in-depth dive in understanding the data behind mass media and radio and relational branding. But this is what you said. You said, “Good radio ads fail because they are stretched to reach too many people with too little repetition.” A classic: “Don’t reach 100% of the people 10% of the way. Reach 10% of the people 100% of the way.”

So Roy, you’ve also said this in this article, which is: “Don’t build your house on rented land.” Now, you said that, I think that article was written 12, 13 years ago, maybe even 15 years ago.

Roy Williams: Right

Todd Liles: And I want to talk about this rented land context specifically in the world of Google. So how do you see those two as connected?

Roy Williams: Oh wow. Google is a landlord. And when you don’t own the house, it’s up to the whim of the landlord whether or not you can afford to live there. And did you know who the… I’m gonna make this comparison because most people are unaware of this, we’ve all seen restaurants that were just booming and thriving and it’s always crowded and just stayed sold out and everybody loved this restaurant, and then they just disappeared and went out of business. And most of the time what happens is, and every restaurant owner knows this, when you don’t own the building, you don’t have a landlord, you have a business partner.

Todd Liles: Yep.

Roy Williams: And they are good at calculating how much blood they can squeeze out of your wallet and leave you enough money to make a living and stay in business. And whenever they raise it so high that you say, “Screw it, I’m just not willing to do all of this and make that little money,” and so they don’t just move, they just do something else with their life.

I’ve seen this happen many times, and most people don’t realize. “I thought they were doing great. Why’d they go broke? Must have been back taxes.” It’s like, “Nope. It was a landlord.” Google, Todd, is a landlord. And you don’t own Google. They do. And their job, their goal, their only mission is to squeeze every last penny out of the American business public. Now, what happens is, as you know, they’re now beginning to take away even sending people to your website.

Todd Liles: Yep.

Roy Williams: They’re gonna say, “Well, no, no, no, no. We’ll sell you the lead.” We’ll get the lead, and then we’ll give it to you, and we’ll give it to you, and we’ll give it to you, and everybody that gives us enough money, we’ll give ’em that lead. But they don’t need to see your website because we’ve already stolen all of the information on your website through AI.

Todd Liles: Right.

Roy Williams: And so we’re gonna answer everyone’s questions using what you taught us, and then we will get control of the lead. And then everybody who wants to know this person’s name can pay us a bunch of money. But no, we don’t want to send ’em to your website because then it may be your customer, and we want it to always be our customer. And then they’re not even gonna sell you a customer. They’re gonna rent you a customer. And so I’m going, this is a bad deal. It always turns out one way.

Todd Liles: Yep.

Roy Williams: Now, when people understand there’s no turning back, these guys are overreaching right now.

Todd Liles: They’re very much overreaching.

Roy Williams: And there is no way to efficiently spend your ad budget on Google Ads. I’ve watched a lot of private equity companies come in and immediately discontinue doing what’s most effective to do in favor of what is most easily measured because they’re spreadsheet people. And very, very often, it takes ’em about two and a half years to get in deep, deep, deep trouble. It takes a couple years for the momentum to fade.

When you’ve been using mass media correctly for a long time, you can coast. “See, we canceled it and see nothing, no damage.” And 60, 90, 120 days after they cancel everything, they’re just going, “Great. That wasn’t working at all.” It’s like, nope. What you did is you had a train going down the track at 80 miles an hour. It’s a heavy train, has a lot of momentum, and you cut, you quit throwing fuel on the fire. You quit throwing coal in the little coal thing. I’m pretending it’s 100 years ago. Right? And so…

Todd Liles: We still get it though.

Roy Williams: Yeah. What happens is, if it’s a level track and it’s not climbing uphill, man, a mile-long train that’s loaded doing 80 miles an hour can coast a long time. Then it begins to slow down a little bit. But it wasn’t right after you canceled the advertising. It’s six, eight, nine months later, a year later, starts slowing down. “Well, I think the economy’s changed. I think maybe nobody’s listening to radio anymore. I think maybe people are watching streaming things instead of watching the news on television.”

And they start making up all this stuff, and everybody sits around, “Me and all my friends.” People go to the “me and all my friends” ratings way too often. “Well, here’s what I think, and here, everybody agrees with me.” And it’s like, okay, that isn’t how advertising works. I don’t watch the news, and I hate listening to the radio. I hadn’t listened to the radio in 30 years. So why do my partners and I spend hundreds and hundreds of millions of dollars a year buying television news and radio ads?

Todd Liles: Because there’s clearly people that are, and the bargain is so much better than…

Roy Williams: Because it works unbelievably well, and it produces unbelievably well. And I’m going, huh, everybody thinks there’s no value there, and that’s why they’re selling it way too cheap. Everybody thinks they can just turn business up and down with Google. And I’m going, nope, hadn’t been able to do that for a long time.

Todd Liles: Yeah. So I’ve thought about this a lot. You’ve got a famous quote, and we’re gonna reference it again many times, which is, in essence, direct response marketing is very much like cocaine. Now, here’s what’s interesting about this, is that in direct response marketing, that hit of cocaine is that you actually are getting someone to call you, and you’re getting business. You’re like, “Ooh, that worked. We did this 50% discount, and it worked.” So you made revenue. It’s become clear to me that the hit of it and the habit of it is a metric, not even necessarily the outcome.

Roy Williams: Right.

Todd Liles: Because people are so clearly addicted to the lead that they almost aren’t even taking into account the fact that the lead is now costing them more by far than any of the profits that are coming out of there. And that is even beyond evidenced because a lot of times when I’m speaking to these people, I’m asking questions like, “What’s your club membership ratio?” Because if you’re paying $400 for a client, that’s very costly. But that cost could potentially be justified with replacement opportunities or if you really got someone who’s interested in a club membership and they’re gonna be with you for the next 10 years.

But, Roy, what I’m hearing is that they’re not focused on the club. If they don’t get the replacement, they’re moving on because their club membership closing ratios are like 7%, 6%. They don’t realize that they’re just repaying $400 every time. So they’ve become addicted to the click and the opportunity, not the actual outcome. And that’s tough, but we can get that switched if they are willing in time.

The next segment that we’re gonna talk about is the replacement cycle slump. Because right now, we are in a replacement cycle slump. There are reasons for it. We’re gonna unpack the reasons why and, more importantly, what you can do in this moment that’s probably gonna last for another three to five years. All right, Roy, we’re in a natural slump cycle right now.

And by the way, it’s natural. COVID, like you said, a lot of opportunity, people were doing big replacements. On top of COVID, if you look at the work from, like, Matt Michel, who tracks when the big replacement cycles come anyway, there was a double whammy that happened. A lot of contractors don’t know this. Whammy number one was COVID hit. People were home. They were getting their houses taken care of. Whammy number two, it was also right at the peak of the replacement cycle.

So you take the replacement cycle that was already occurring and then you supercharge it. What that means is that systems that might have had another two or three years of waiting, people just did it. So we spiked it. By the way, the evidence on this was abundantly clear when you look at manufacturer replacement data, not just in air conditioning, but in roofing.

I’ll give you one more example. One of our roofing companies here, when we looked at their replacement during the COVID period, natural replacement cycle, and they got a hail storm, they were doing three times the business. And not just them, but all of Austin.

Roy Williams: Yeah.

Todd Liles: And before we went into our new year and they did their budget, they had a budget that was bigger than last year. And I said, “Hang on, timeout. Have you checked with your manufacturers to see what total sales volume is?” They didn’t. I said, “Check with them.” They did. The market had been absorbed. They didn’t consider that.

Roy Williams: Right.

Todd Liles: And because they didn’t consider that, they created a budget, they spent money that wasn’t going to occur. It caused problems. So we’re in a replacement cycle slump. But that’s not a bad thing. It’s a normal thing. And I think you gotta know that cognitively.

So a couple quotes on this. This is from LocalIQ. They specifically talked about this quote related to home services, so I pulled it out. “Home services saw conversion rates drop by 15% while cost per clicks increased by as much as 10 or more. Advertisers are paying more for fewer qualified leads.” Now, this was one of the studies where other industries, their cost per click is going down, their leads are going up.

Home services in particular, when they’re evaluating the landscape, it’s dropping and it’s going up. Why? Replacement cycle slump. So let’s tie this back into a concept in one of your Monday Morning Memos. If I can get that out. Monday Morning Memos. Thank you. Advertising Oversimplified. It was from this one. “Used consistently, mass media will cause your company to be the one the customer thinks of immediately and feel the best about when they finally need what you sell.” Now, I like that “need what you sell.” Because if I’m interpreting this principle properly, that means “need what you sell” goes back to you can’t sell something they don’t want.

Roy Williams: Right.

Todd Liles: How does this principle protect businesses during a slow cycle slump like we’re in right now?

Roy Williams: This is whenever little companies leapfrog big companies.

Todd Liles: Okay.

Roy Williams: Now, what happens is anytime you are doing something that works in the short term… Everybody believes in direct response because you make a strong enough offer and a bunch of leads come in and you go, “Ooh, I cried wolf and the whole town came running.”

Todd Liles: Right.

Roy Williams: And then you cry wolf again and a pretty good crowd comes running. But the problem is the longer you do something that works immediately, the less and less well it works until it finally quits working at all. Because now everybody knows you’re lying. Now everybody understands this is false urgency. This isn’t a special thing. They do a special thing every freaking month, and only an idiot would call them when they’re not having a half-price sale. See what I mean?

Todd Liles: Exactly.

Roy Williams: Now, another company is just winning your heart. The little company is just talking about what they believe in and why they do things the way they do them and what it costs them to do it the right way. In other words, I’m seeing… I saw another thing. This conversion rate’s going down. There’s a lot of reasons for that, one of which is too many people, particularly in air conditioning, started… They finally raised their margins and it was kind of like, “I think we can raise them a little higher.” And then they did. And then, “I think we can get a little more. I think we can get a little more.”

And they just kept getting away with it until pretty soon the slow conversion… The reason people are clicking more and shopping more is they’re going, “Oh my God, I had no idea I was gonna have to get a second job to replace the air conditioner.” And they’re going, “This doesn’t sound right.” And so you keep calling around, you keep calling around, you keep calling around. So everybody’s getting the click and everybody is making a quote, but they finally find somebody that can do it for a price that they think, “Well, that makes sense, but these other numbers don’t.”

And I’m saying, so are there people that have been, many, many years, been undercharging? Without a doubt. People were charging way too little, weren’t making any real profit, and then they started raising it. And I’m going, there is a point at which now you’re doing fine and the customer can still afford you, but if you get above a certain point, now you’re just lying to yourself. Now you’re just delusional about the unlimited ability people have to pay infinitely high prices.

And I’m going, nope, there’s a place at which they just hit the brakes and go, “Whoa, wait. Alright. I need to get a second opinion, a third opinion, a 14th opinion.” So what happens? Everybody clicks more. And more clicks that you’re paying for with lower and lower conversions. And I’m saying that’s one of the things that people aren’t taking into consideration. And I’m saying, man, the little company gets to leapfrog the big companies by not digging around in your pocket all the time.

Todd Liles: Yep.

Roy Williams: We know the 60/40 rule. When you’re advertising in a healthy and sustainable way, 60% of your ads, I’m not talking digital. I’m talking about actual advertising. I’m not talking about Google Ads. Google Ads are today’s yellow pages. It is an information delivery vehicle for a customer that is currently, consciously in the market for what you sell.

Todd Liles: Right.

Roy Williams: The time has come for them to make this purchase. And if they do not have a preferred provider, if there is no name they think of first and feel the best about, then they just go to Google and they type in the category: hot water replacement, electrical repair, or air conditioning repair. Okay? And then all these names pop up, and since they’re all considered equal, they just click, click, click, click, click, click, click, click, click, click, get all these quotes, talk to all these people.

Whereas the leapfrog happens like this: the little company has become the company that some number of people think of first and feel the best about. They’ve already chosen that company. They type that company’s name into Google. The company gets the click, they make the sale, and nobody else even knew this business was out there. And by the way, 40% of the ads, when you’re doing it the right way, there is a call-to-action, but it’s not false urgency.

It is very often time-driven. Whenever a person says, “Hey, this season of the year, what you need to be thinking about right now is getting that air conditioner ready to go from sitting all winter to, bam, 10,000 rpm in a split second.” And maintenance happens in the shoulder seasons. And you can get people to let you do things like the safety check and getting the furnace pilot light lit and all the stuff checked and all the different sensors checked to make sure that the flame rollout sensor and the high-limit, high-temperature limiter switch, etcetera. Go ahead.

Todd Liles: Well, what you said has sparked something, and actually sparked something in the last episode that we did. So if you didn’t check out the last episode, check the last episode out. But I went and I did this. I went in and typed in category of repairs. And this is what I found on the Google searches, by the way. If you do this, you’re gonna find something similar. I did it a couple times.

When you go in and say air conditioning repair, roofing repair, plumbing repair, whatever your category of service is, this is what you’re gonna get: three sponsored ads at the top, always owned by private equity because they’re outbidding you, followed by an AI overview defining air conditioning repair or your repair by category that has a link to Angi’s list along with a recommendation to get bids.

So you’re already four down. Then you’re going to get four more sponsored ads. Now we’re eight down. Then you get a “people also ask” section about price, and each answer is priming the client to think cheaply. If you read it, you’ll find that that’s in Google’s favor. Because if you think it’s too expensive, you’re going to go back to Google and spend more money. Spend someone else’s money. Then there’s three do-it-yourself videos on YouTube, followed by Reddit recommendations. Then there are five SEO posts. You’re way at the bottom now. And of those five SEO posts, Roy, one is from Home Depot and one is from Yelp. Only three are from air conditioning companies.

And finally, there are four more sponsored ads. You know what you don’t see? Anything about your business. Now, you take your same example and you search your company name, specifically your company name. This is what you get: you get your business page, your Google Business page dominating the entire right-hand side. The whole thing linked to your website, phone number, map, details about you, photos. It’s dominating the right-hand side. You have one sponsored ad above you, and it’s not yours because this person didn’t pay for their name. If they would have paid for their name, it would have been yours.

Roy Williams: Right.

Todd Liles: An organic post from your website, a Yelp review link to your company, and two Facebook posts linking to your page. I think that that goes to the testament and to the power of what you’re saying. Now, here’s the thing. We can help companies of lots of different sizes, but there is a fundamental truth, which is you gotta be big enough to ride the ride. You gotta have a budget in your marketplace, and your marketplace budget’s going to be different if you’re in Los Angeles. That’s going to be a very competitive market. We always like to go back to the proverbial Hattiesburg, Mississippi, 55,000, 70,000 people. You can own that for a very limited budget, right?

So whatever the size of the listener is, don’t assume that this can’t help you because chances are it probably can. But now if we talk to the Ethans of the world, if we talk to the Calebs of the world, your business isn’t even doing a million bucks.

Roy Williams: Right.

Todd Liles: And we know that. What we want them to do is to search for you by name. I think about the only way you’re going to do that in the beginning is to do an amazing job, ask for referrals. And by the way, when I say amazing job, do such a good job of overwhelming added value they can’t help but brag on you to their friends.

But I want to ask you because you always have some insights that surprise me. If we’re dealing with these ultra-small companies who they gotta save some money so that they can get their name out there in a mass media way, right now the only mass media they’ve got is word-of-mouth media. Give me one or two things that the Ethans of the world, the Calebs of the world can start doing today.

Roy Williams: Dream big and take small actions. Think big, take very, very, very small actions. If I’m starting a business and I’m bringing in payroll and a little tiny bit of marketing budget, and this all comes down to the same thing I’ve said many, many times. It was actually my wife Pennie that taught me this. She said time and money are always interchangeable. You can save one by spending more of the other. Now, there are people and there are companies who have more money than time. There are people and companies who have more time than money.

Todd Liles: Yes.

Roy Williams: So if you’re Ethan or Caleb and you have time and your staff has time and you’re not staying busy all the time, you know what you need to be doing? Meeting people, shaking their hands, giving them a business card, giving them about 60 seconds about your company. Thank them for giving you those 60 seconds and saying, “Please know, we’re really good at what we do, but very few people have heard of us. We’re a really small little company, and if you call us, we will not let you down.”

You look them right square in the eye and you say, “Thank you. I hope you’ll keep that card.” It would mean the world to me. And you know what’s gonna happen about one time out of ten? You know what?

“We got something probably need to look at right now. We’ve been thinking about having this, the thermostat’s acting weird, and do you have some time right now? Could you do that?” And all of a sudden, when you… And I’m saying business cards are cheap. You leave a nice tip on the table at the cafeteria with your business card and a note: “Okay, we are looking for customers. Thank you for being good at your job.”

And a person goes, “Huh, they left me a nice tip.” And so maybe they throw it away. Maybe seven out of eight people throw it away. But one of them goes, “Now, I kind of met a guy in the air conditioning business, and I have a guy now.” You know what I mean? He was pleasant. And I’m saying there’s no such thing as a person that isn’t worth giving a business card to and a little short speech and look ’em in the face and tell ’em how much it would mean to you. You know why? Because America loves the little guy.

Todd Liles: I love it.

Roy Williams: Little guys are so easy to build if they have passion and energy. And if you’ve got time, there’s… I would put doorknob hangers on doors in neighborhoods that looked like they were old enough to have air conditioners that need to be repaired or water heaters that needed to be replaced, or they had enough money to put a bunch of custom lighting in the house, indirect lighting and stuff.

And it’s like, dude, you can accomplish more with time and energy than you can accomplish with money. There’s nothing more dangerous than a nimble, hungry little guy. I will bet the farm on that guy. I adore those guys. We search for them because the partners and I are all paid according to how much the company grows.

Todd Liles: Yeah. Roy, the first year we were in business here at Service Excellence, we had a newborn baby. I was working out of my house. I painted a wall green in my garage and went and bought shop lights at Home Depot so I could at least try to shoot some videos, doing all the editing on my own. I think I was doing probably 16-hour days.

Roy Williams: Wow.

Todd Liles: Training in the morning, writing content at night, reaching out to people. We did $89,000 our first year. That’s on top of fighting a lawsuit, right? And having a sick baby and just ridiculousness. The following year, we did $225,000. And in the first year, I didn’t even pay myself. And in the following year, I look over at Shannon and I can remember clearly, I’m like, “Hey, this thing’s gonna work. Let’s go celebrate.”

And we took Shannon and her parents out to Garcia’s, and we bought a meal at a Mexican restaurant. I said, “We’re celebrating.” They’re like, “What are you celebrating?” I said, “We’re celebrating the fact that we can now pay ourself a paycheck,” because we’ve been living on our savings for a year trying to launch the thing.

But I’m gonna tell you, those times were fun.

Roy Williams: Yes.

Todd Liles: They were a lot of fun. And I wanna think… This is what I would say to the small guy: on the payroll was myself and my wife by the second year, right? And because Shannon was all bought in and we were committed, we got over being scared. Like, “Okay, we’re not gonna be scared. We’re just gonna go to work.” And it was a freaking blast.

And I think a lot of people take on things when they’re too small that they shouldn’t have taken on because they took big actions. They didn’t take the little actions because they lost patience. And they weren’t dreaming big. I was dreaming bigger than $200,000, but I was okay with waiting for a minute or two. And so I think that’s great advice.

Roy Williams: The thing that you said about the times when you’re struggling and fighting with everything you’ve got to try to keep your head above water, it doesn’t seem fun at the time, but you always look back on it with deep, deep, deep fondness. And whenever you were talking about that, it was over 20 years ago, but in the archives at mondaymorningmemo.com, you can search “Wieners and Beans.” And if I remember correctly, and I haven’t read this thing, it’s in one of the Wizard of Ads trilogy, which the third book in the trilogy came out in 2001.

So this has gotta be… It’s at least 24 years old, 25, 26-year-old story. I think it was Tom and Shane. Seemed like it was Rathco. But these two brothers started this little business and literally were living on wieners and beans.

Todd Liles: Yep.

Roy Williams: Wieners and beans. That’s all they had money for was wieners and beans. And they were sleeping on the sofa and they were just barely keeping their head above water. And then it was an early, early, early server farm or tech company or some, I don’t know, it was something that had to do with the internet. And then they sold it for like this staggering, staggering, staggering amount of money.

And they still remember the days, and the greatest days of their lives, when they’re sleeping on the sofa and getting up and eating wieners and beans for every meal and just trying to survive. And I’m going, the struggle is full of energy and purpose. And whenever you have just infinite amounts of cash laying around, you have nothing to do. Everybody thinks they’re gonna be able to recreate for the rest of their life. And I’m going, I’ve never seen anybody do it.

Todd Liles: Nope.

Roy Williams: They usually wind up after a couple of years getting back into business in some way at some level because they need that adventure.

Todd Liles: Well, I think that’s super, super wise. And to put this all in the nutshell of Google right now, right? If you are of a certain size and have momentum, you absolutely should own your house. Don’t be renting it. Own your name. You own your name through mass media. You do that. If you are smaller, you still 100% own your name.

And what you do when you are smaller are gonna be the same things you do when you’re big. You do amazing, over-the-top, exceptional service worthy of being bragged about. You ask for referrals. You get club memberships. Those things should never change just because now you have money to mass media your name. But it should be about your name, your brand. That’s the thing that you should build your foundation on. That’s your solid rock.

And I want to thank you for sharing that. Roy, what’s the one thing that you want the listener to take away from today’s episode?

Roy Williams: Don’t believe that Google is gonna get better. It’s gonna get worse. Don’t believe that you’re gonna figure out a way to do things more efficiently because they’re not gonna let you do that. They’re too smart and too big and there is no way for you to win. Prices are gonna continue to go up and your ability to build equity in the minds of the public cannot be done on Google.

Google is for harvest time. You need seed time. You need time to grow the reputation. You need the time to build a position in the mind of the future customer. And if you’re waiting until the last minute thinking you’re gonna snag them at the finish line, that is literally, literally not sustainable.

Todd Liles: Okay, listener, here is your final thought. Google is gonna keep raising their prices. You can’t outspend their algorithm, but you can outsmart it by building a brand people search for by name.

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