2024 Platform MASTERMIND: Tim Chermak: 10 Things I Learned From 10 Years At Platform Marketing

 What this presentation is is me sharing 10 observations I've made about our most successful clients as well as mistakes that Platform has made over the years because somehow we've reached a million dollars in annual revenue. At this point, we're on our way to getting to $10 million sooner than later. And we're not there yet, but I think we'll get there within the next year or two. And that puts us in a tiny, tiny, tiny minority of small businesses that have ever been started in the United States. 

But the cool thing is we're a small business. We also work with a bunch of small business owners. So I'm not just sharing what I've learned from Platform, I'm sharing what I've learned from hundreds and hundreds and hundreds of the clients that we worked with over the years. So I have a really unique vantage point to look and see what works and what doesn't work.  

This is The Platform Marketing Show, where we interview the most creative and ambitious real estate agents in the country, dissect their local marketing strategy, and get the behind the scenes scoop on how they're generating listing leads and warm referrals. We'll dive into the specifics of what marketing campaigns are working for them, how much they're spending on those campaigns, and figure out how they have perfected what we call the Platform Marketing strategy. This is your host, Tim Chermak. I'm the founder and CEO of Platform. I love marketing and I talk too much, so let's dive in.  

I'll actually get to this in my presentation this morning, but that's one of the coolest parts of building a team is when they do cooler stuff than you would have done on your own. Even when I showed up last night, it's a kind of the birthday party, welcome bash thing. I didn't set up anything. I didn't design anything. The reason we had the cake, the reason we had the little napkins, all the banners and all that, like our team did all of that. So I just get to show up and riff, and all the hard stuff, the difficult stuff, the logistics, like frankly, the real value of the environment of the event, the team handles.

And so I think there's a lesson there too, that if you're the entrepreneur and you're the visionary, your job is to focus on super big picture things and let your team handle everything that you're not good at because not-- I mean, if I was in charge of this event, none of this would be here. We'd probably be in a circle, sitting Indian-style and may or may not have microphones, AV. I don't know where Emily is, but shout out to Emily for organizing all this. 

Well, what I wanted to talk about this morning was the 10 things I've learned in the last 10 years, and some of these are going to be things I've learned about growing platforms or growing a larger professional services company and some of these things are just observations that I've made about all the realtors we've worked with over the years. We have just shy of 300 clients right now, but there's obviously hundreds of clients that we've worked with even before that are no longer with Platform that we learned all sorts of lessons with as well. 

So I tested it out ahead of time and I think I have six hours of content. Emily made me agree to cut it down to four hours. I wanted to get that out of the way, but I think Justin and Emily already handled that for everyone. So it's just important to start with this slide because as an attendee of a lot of events, this is always how I've-- it's always how I've felt. 

So when I look back at the last 10 years, it's crazy this company has survived because statistically, I got this from the book Scaling Up by Verne Harnish. If any of you have heard of that book, it's based on one of the biggest, most longitudinal studies ever done on small business in America. And of every small business that gets started, 0.003% ever make it to a million dollars in annual revenue. That's not profit. That's annual revenue. 

So that's three out of every thousand. So if you've ever made a million dollars in revenue, there's 997 small businesses who didn't. So that's the first big hurdle is getting to a million dollars in revenue. The vast, vast, vast majority of small businesses will never get there. But the interesting thing is, so again, we're talking about three out of 1,000 get to a million dollars in revenue. Not profit, but  revenue. Of those who do, 15% eventually reach $10 million. So that is a massive leap going from three out of 1,000 to 150 out of 1,000. That's a 50x increase. You are literally 50 times more likely to get to $10 million once you're at $1 million than from going to zero to one even though going from one to 10 is obviously more from zero to one. 

There's a lesson there. Once you get going, the hardest part is getting to that point. Like the early years, figuring out product market fit, making sure that what you're selling your customers, they actually want. You're 50 times more likely to 10x your business once you get that point than getting to $1 million in the first place. Of those who do, 50% reach $50 million a year in revenue. So the more you grow, there's like an anti-survivor bias going on where the more you grow, it becomes exponentially more likely that you get  to the next level because the hardest part is reaching escape velocity. Growth doesn't happen accidentally. 

What this presentation is is me sharing 10 observations I've made about our most successful clients as well as mistakes that Platform has made over the years because somehow we've reached a million dollars in annual revenue. At this point, we're on our way to getting to $10 million sooner than later. And we're not there yet, but I think we'll get there within the next year or two. And that puts us in a tiny, tiny, tiny minority of small businesses that have ever been started in the United States. But the cool thing is we're a small business. We also work with a bunch of small business owners. So I'm not just sharing what I've learned from Platform, I'm sharing what I've learned from hundreds and hundreds and hundreds of the clients that we've worked with over the years. So I have a really unique vantage point to look and see what works and what doesn't work, so here's 10 lessons I want to share with you. 

By a show of hands, just to start off, who has ever heard this phrase before? You've seen it shared on social media, whatever. There's something to this. Whether you agree with this or not, there's something to the fact that in society, in culture, things happen cyclically. We often learn things and then we forget them and then we make mistakes because we forgot the lessons that got us there in the first place.

Who has ever grown their business, like your GCI increased and then at some point in the next two years, it actually receded from where it was at? Has that ever happened to anyone? Show of hands. It's a pretty good chunk of the room. What often happens is we go on this roller coaster where we're lead generating, we're getting referrals, we're prospecting, we're planting seeds, and then we stop for three or six months or a year. We stop filming videos. We stop following up with our leads. We stop investing in the money-making activities and we enjoy all the closings. And then we wake up one day and realize I have nothing in my pipeline because while I was enjoying all this business, I stopped doing the things that got me there. So that same phenomenon plays out at the level of national societies, civilizations, and the individual level. 

In sociology, there's actually a theory called the Strauss-Howe generational theory. They wrote a book about this called The Fourth Turning. Whether or not you agree with it is irrelevant. I find it fascinating and it's based on the idea, the thesis is that history happens in 80-year cycles. So every 80 years, there's like a cataclysmic event. And the researchers break down every 80-year cycle into four subsets of 20-year cycles and that's where we get the idea of generations. 

There's Gen Z, there's Millennials, there's Gen X, there's Baby Boomers, there's the Silent Generation, and there's the Greatest Generation. They're all in 20-year cycles. But  their insight was that there's macro cycles of 80 years, that big events happen in society every 80 years. So, if you start with the War for Independence back in 1776 and you add 80 years to that, is anyone really quick at math? What happened approximately 80 years after the War for Independence?  Civil War. Add 80 years after the Civil War, 1860s. What's going on in the United States, or frankly, in Europe? World War II. 

Okay, so every 80 years-- by the way, that puts us, we're exactly 80 years after World War II. And look what's going on in the world, right? There's tension in the Middle East. We have crazy things going on domestically. In our politics, the economy, I mean, all sorts of weird things are going on in the economy. It feels like we're not learning the lessons of prior generations. 

So the question then becomes, why 80 years? Does anyone has a guess at why it's every 80 years there's some big, big event? It's approximately one human lifespan. The average person lives 80 years. It's a very simple explanation. So if the average person lives 80 years, every 80 years, there's a huge event because all the people who were around the last time who learned the lessons of why we shouldn't repeat that are now dead. They're either dead or they're in a nursing home and they're so old, they're not contributing to society, they're not leading society, their voice isn't being heard. 

So it takes approximately 80 years for us to forget the lessons from the past. Now, this is interesting when you look at American history, but at a micro level, the same idea applies to sports, to business, to personal relationships. And so I find this idea fascinating that we forget the lessons that got us to where we are and then we end up going backward because we don't learn. 

So this is some stats from the NFL two weeks into the season this year. There was the fewest touchdown passes since 2006. Shortest average depth of target, only seven yards. Highest amount of called run plays, where it's a designed run play, not an RPO. The fewest blitzes on record. By far the highest, sorry if I'm getting nerdy here with football, but the highest percentage by far of a two safety shell coverage. So in football, if you're on defense and you really want to stop the other team from passing, you put two safeties deep and you drop back into what's called a shell coverage. You can run manor zone, but the point is you're dropping more people back so that they can't pass deep on you. You're basically saying as a defense, it's okay if you run on us and you get five yards per carry or seven yards per carry because we think eventually, you'll have a bad play or maybe you'll fumble or we'll get a tackle for loss, but we just don't want you to get 40 yards on one pass play. So we're gonna sell out to stop the deep pass, dropping two safeties deep and we're going to let you run on us. 

Now, what's interesting is for the last 20 years in the NFL, it's been a passing league. In the early 2000's with Tio and Randy Moss and all these receivers who came about in that era, the NFL realized they made, because they actually did internal studies on this, they made way more money in games that had higher scores and thus, more passing yards. So they actually rigged the rules in favor of offenses, specifically passing. So they taught the refs, hey, be way more sensitive on calling pass interference on the defense because we want it to be easier to pass the ball. We want to make it harder for the defense, frankly, to play defense. This is better for ratings. Ratings means the league makes more money. It means players make more money. 

It's why 20 years ago, quarterbacks were still making, whatever, $10 million a year, and now they make $60 million a year. That far outpaces inflation because so much more money is coming into the NFL because there's more passing yards. So if you make a list of the top 10 quarterbacks of all time, probably nine of them played in the last 10 years because it's just easier to be a quarterback now. They call roughing the passer way more often. If you're a football fan, it drives you crazy, right? If you're the defense and someone breeds on the quarterback too hard and then they throw a flag, it's because they want to generate more passing yards.

The only quarterback I think who's great who maybe didn't play in the last 10, 15 years is Dan Marino. And I'm just inserting this as my personal opinion, it has nothing to do with what we're going to talk about, but Dan Marino is the greatest quarterback of all time and it's not even close. Okay, next slide. 

So, this year though, we're forgetting the lessons that got us here and I think offenses are forgetting. Defenses have adapted so much that this year, the pendulum has just completely corrected in the NFL and no one's talking about it. So, this season so far, and this is correct as of this last week in the season; fewest yards per catch ever, highest quarterback completion percentage ever. And you might ask yourself, okay, that doesn't make sense, Tim. Aren't you saying that offenses are slowing down? The reason it's the highest quarterback completion percentage ever is because they're throwing the shortest depth of target ever. Quarterbacks have learned teams are taking away everything intermediate and long so we're going to throw five yard passes. So you have a lot of quarterbacks this year that have a 70% completion rate because they're only throwing five yards downfield. 

Fewest fumbles ever, lower turnover percentage ever, most yards per rush ever. Not in the last 10 years ever in the 80-year history of the NFL, teams are running the ball more effectively this year than any other season in national football league history. So offenses have learned and defenses are adapting. This happens even at the level of sports. 

You might've thought in the last 20 years, oh, this is an offensive league and that's just the way it's going to be. Teams are going to pass, but people adapt. Now, teams are running the ball more effectively than they literally ever have in the history of the game of football. It was just a couple years ago that all the sports writers were talking about don't sign running backs to big contracts. It peaked when Ezekiel Elliott with the Cowboys got $18 million a year and then they ended up cutting him a couple years later. And after that, no team wants to exceed paying a running back $10 million a year because they thought that was, if you're a running back, you're expendable. It doesn't matter who it is. We want to spend that money on receivers and quarterbacks. That's starting to change because we're finally learning the lessons of the past. 

I think the same thing has happened in real estate marketing. There's eras that we've gone through, and most agents, not just in this room, but also in the industry, have not been in the industry long enough  to appreciate the cycles that we're going through. If you've been in the business for less than 10 years, you only know the current era that we're in. You're actually unaware that things were ever done differently and that different marketing used to work. 

By a show of hands, who was an agent before the year 2000? Raise them higher. Not a lot, right? Not a lot of people have been an agent longer than 20 some years. So that means, the majority of the room, and by the way, I think that's representative of realtors as a whole. This room is a pretty good sample size. The vast majority of agents have been licensed fewer than 10 years. Like a fish isn't aware it's in water, you're unaware that different things used to work, and I think we're about to have a pendulum swing where we're kind of going back to the future. 

So before the year 2000, there wasn't the internet. You couldn't track ads. You couldn't retarget. It was all about relationships. Yeah, you could run print ads, newspaper, billboards, sponsor the grocery carts and the park benches, bus stops, things like that, but it was about relationships. If you were good at sales, you were a successful real estate agent. If you were good at sales and you were good at networking and people liked you, you were a successful agent. You didn't have to know anything about marketing, websites, lead generation, anything like that. If you were just one of those Type A personalities that people got along with, you're probably going to crush it as an agent.

And then the year 2000 happened and the internet arrived and search engine optimization and Google came on, and I think my Aunt Ruth Ann's in the back of the room there. I remember visiting their house in 1999 when you lived in Asheville, North Carolina and your husband Bob, I was in  third grade, and your husband Bob was like, "Check this out. It's called Google. Pretty cool, huh?" And I was like, this is weird. It can type in anything. And even then, I was realizing  everything we do in school is irrelevant now, like outdated. Why do I have to learn how to use a thesaurus and encyclopedia and all this stuff? I'm like, he showed me Google in 1999. And even as a kid, you're like, this is crazy. That defined the next 10 to 12 years of SEO. 

I call this the era of SEO because all you had to do was have beginner, intermediate-level search engine optimization. Just have a website with some keywords on there, like best realtor in Naples, neighborhoods in Naples, just have the word real estate agent, homes for sale Naples and you would rank first because probably no one else in your market even had a website or if they did, it was terrible. So for about 10, 12 years, just having a website with any keywords at all meant that you were going to make a lot of money as a realtor. Notice what shifted from era one to era two, being a good agent and being a people person did not matter. What defined how much money you made was how good you were at marketing. That was a massive philosophical shift that happened from era one to era two. 

The reason I end this in 2012 is that's when Facebook introduced newsfeed ads. Facebook existed several years before that, but it really took off when they introduced mobile newsfeed ads, which is what we still use to this day. And all of a sudden having a good website didn't matter because people were going to go on Zillow anyways. Websites just really don't matter as much as they did five, seven, 10 years ago. People are going to use the Realtor.com app or Zillow, just doesn't matter. So SEO doesn't matter as much because you're competing against billion-dollar companies who have more money to spend on SEO than you do. 

I call this the era of lead generation because it also coincided with you can get leads off Facebook for 25 cents, 50 cents. I remember early in Platform, we had clients who just regularly get leads for 50 cents. Their conversion rate could be absolute dog shit. But if you were getting leads for 50 cents a piece, the math worked in your favor, right? You could convert one out of every 500 leads and you were printing money if leads were coming in at 50 cents a piece. 

I think this era ended two years ago. I put 2022 because that's when the market shifted. Obviously, it's when the Fed started hiking rates, things started slowing down and we just realized collectively that what used to work no longer works. If your business model was about just generating more leads than competitors and you just had a bigger lead generation budget, that stopped being as much of an advantage as it used to be about two years ago. Because if your business model was built on converting a bunch of leads that were coming in at $1 a piece or $2 a piece, what happens to that business model when leads are $10 a piece? No amount of conversion strategies or hiring ISAs or autoresponder emails or slide dial voicemail drops, none of that can cancel out the fact of your cost per acquisition quadruples or quintuples. It just changes the way that the marketing math works. 

So I feel like we're no longer in the era of lead generation as the dominant activity. Instead, we're in this new era of relationships where agents that people actually like and are going to refer are going to earn the majority of the business. And so notice that this is the same as era number one, just with all the new internet marketing tools. So being a good agent and being a likable person matters again. And I know that's kind of controversial to say, but I will make it even more clear. I think you could be an asshole and be a bad agent and in the prior 10 years, you could still make really good money if you knew how to generate leads.

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