Download podcast transcript [PDF] here: Myles Anderson Reveals How BrightLocal Gets 100% of Their Leads via Inbound Marketing TRANSCRIPT PDF
Time-Stamped Show Notes:
- [00:36] Before we jump into today’s interview, please leave a review and rating and subscribe to the Growth Everywhere Podcast!
- [01:51] BrightLocal started as a search agency, providing search services to local businesses.
- [01:57] BrightLocal hit some early ceilings in terms of growth.
- [02:15] After trying a few different business styles, they settled on being a reporting platform, which worked the best.
- [02:26] They have succeeded without any outside investment.
- [02:40] They have a big offshore team in the Philippines, offices in other countries, and freelancers across the globe.
- [04:25] BrightLocal is a B2B solution. They offer a free trial. Paid plans are subscription-based.
- [04:41] There is no contract; customers pay on a month-to-month basis.
- [05:02] Typical customers are marketing agencies that serve local or regional businesses.
- [05:35] The typical customer will be charged about $100/month for the service.
- [06:07] BrightLocal has been profitable since 2012.
- [06:20] They now have 120 full-time staff across all locations.
- [06:30] They reinvest a lot of the profits back into the business.
- [06:47] They average about 30% growth per year.
- [07:25] They found that their ability to deliver new features didn’t develop in a linear fashion.
- [07:38] They add new teams, features, etc. cautiously.
- [08:39] The employees are distributed thusly: 20 people in Kiev, 15 in the UK, 3 in the US, and the rest are in the Philippines.
- [09:10] The employees were brought on steadily throughout the years. Growth was gradual, not abrupt.
- [09:42] They have three meetings a week with the team in the Philippines via Slack or Google Hangouts.
- [10:05] All hiring is done locally for each office.
- [10:30] They have also established relationships with three Universities.
- [11:10] All their sales are inbound, so they don’t really have salespeople.
- [11:24] However, they do have a customer success team that follows up on leads.
- [12:25] BrightLocal also does a webinar series and from that, they have gotten 2500 new clients.
- [12:39] They focused on building the brand in order to draw people in and from there, they focused on customer experience.
- [13:27] They try to look at how they can produce research and studies that can help their customers become more effective at what they do.
- [13:40] For instance, BrightLocal did a consumer review study about how consumers use consumer review sites to find local businesses. This data has proved helpful to their clients.
- [14:00] BrightLocal gives clients the data that allows them to improve their own businesses.
- [14:35] They don’t lock any of their content behind paywalls, email lists, etc. All of Bright Local’s content is freely accessible on their website.
- [15:20] Early on in 2008, Bright Local was a CRM system for SMB’s.
- [17:15] There were a lot of scary challenges growing a business, while growing a family.
- [17:45] You have to develop a lot of skills on the fly and quite quickly, as well.
- [18:20] In the early days of Bright Local, Myles still had a full-time job.
- [18:24] He would get his kids up and to school before heading to work at 8:30am. When he was out of work at 6:30, he would have dinner with his family and then work on his business until about 3am.
- [19:20] It took 3 years to get to 20K MRR>
- [21:05] Myles made sure to listen to customer feedback in order to make the business what it is.
- [22:44] 10-15% of site visitors have converted into customers throughout the history of the company.
- [23:15] They never had a huge number of customers and hit ceilings pretty quickly.
- [23:33] This is why they decided to pivot the business and make improvements that would draw in more customers.
- [25:48] A tool that has added value to Myles’ life is Slack, in terms of streamlining communication.
- [26:30] Myles recommends the book Rework. He also likes Disrupted and found it to be a real page-turner.
Resources From This Interview:
- [email protected]
- Bright Local on Twitter
- Google Hangouts
- Must-read books:
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Full Transcript of The Episode
Eric Siu: Love it. Okay. Well, tell us some more about the business. I mean, how do you guys make money? How do you guys charge, too?
Myles Anderson: Yeah, so we're essentially, we're a B2B solution, we're not enterprise, and we're targeting SNBs. And our platform is a subscription platform. So users come along, they get a free trial, they like it, they sort of sign up for the paying solution, and then they pay on a month-to-month basis. So, we're very flexible and open in terms of, we don't lock them into annual contracts. You pay upfront, but it's only for a month, and essentially our success, we live and die by how good we are. If we do a shoddy job, people don't like the platform, they leave. If we do a great job, they stay with us long-term.
Typical customers are marketing agencies that serve, either local businesses or multi-location local businesses, regional businesses. We opt to franchises and brands, three and a half thousand customers. The majority of those pay us every month on a standard plan, but we also serve some much larger, enterprise scale businesses, because the platform is quite flexible. We can put a lot more volume through it, if volume is something that our particular kind of customer needs. So, yeah, so it's a subscription SME B2B platform.
Eric Siu: So when you say, standard pricing, I mean, how much is the standard pricing, I guess, per customer?
Myles Anderson: A typical customer, we extract about $100 a month out of a typical customer, across a range of things they might buy from us.
Eric Siu: Got it, okay. So, I think, just being a little conservative here, you guys are probably, if I break out the numbers and add in enterprise, as well, it's probably close to 500k or so a month, at least.
Myles Anderson: Yeah, it's around that. It's around that mark.
Eric Siu: Got it, okay, great. So, I mean, what other numbers can you share around the business? Growth rates, anything like that, that you're proud to share?
Myles Anderson: Yeah, so I mean, we've been profitable since 2012, and the plan has always just been to reinvest that profit, so we reinvested heavily. Back in 2012, we had five full-time staff, and a lot of freelance part-time developers. We're now up to 120 full-time staff across all locations. We never had outside investments, so a lot of it is just basically reinvesting that profit, month after month, to grow the teams to allow us to scale. Scale at technology, as well as a sort of scale, that on the sort of people side, support, et cetera. Yeah. So I mean, profits at [inaudible 00:06:39]: last year, we added about, I think we grew revenue-wise around 60%, so it was a great year for us last year. I'd say we've grown 30%, on average, if you take it from 2012 to 2017.
Eric Siu: Wonderful. So, when you say, invest back in the business, are you literally just pouring all the profits back in, and just doubling down? I mean, and it sounds like you did it for three years, or maybe even longer than that?
Myles Anderson: Yeah, we always do it. Yeah, we won't necessarily spend it all. We're growing at, what I would say, a cautious rate. Because we've tried to invest in additional development teams. But without additional sort of firepower, there comes the need to have a lot more on the product management side, and the design side. And actually, we found that our ability to deliver new features didn't increase in a linear fashion. On the back end of '13, we couldn't send, deliver a lot more stuff. We actually found that it made it harder to manage it.
We're always cautiously adding new stuff, as in when we need. We've added a lot to our marketing team this year, a lot to our customer service. We've got a customer service team of 10 people now, which has probably doubled in the last year. So it's always looking at, where are the bottlenecks in the business, where are you going to make that investment?
As a sales platform, our biggest cost is people. People are the biggest cost center, by a long way, so it's always looking about where we're not either delivering the highest level of, kind of customer service that we can do, let's look to kind of increase the head count now. If we think, actually, we want to spin off the business into a different area, we want to bring online, a different sort of feature set, does that warrant bringing on a different sort of development team?
I think, head count, we grew by about 20 people last year, in head count, which is probably around 20%, in numbers.
Eric Siu: Wonderful. Okay. Well, I guess, another question is, so, how many people? You said 120 people. How many are in Kiev? How many are in the UK, and then, I guess, how are you distributed?
Myles Anderson: Yeah, so we've got about 20 in Kiev, about 15 in the UK, about three in the US, and the rest are over in our offshore operation in the Philippines.
Eric Siu: Got it, and so, how do you manage all of that? How do you keep the glue together? How do you keep the house together, I guess?
Myles Anderson: The lucky thing is, we've kind of grown with this sort of format. So we've had, we've developed in Kiev, since 2011, and we've had teams in the Philippines since, around, 2010. And so, we've just basically kind of grown that steadily each year. So it's not like we brought online a team of 20 in the Ukraine, and had to establish all our relationships and all our processes from scratch. We've essentially just built out those processes, as we've kind of built out the team.
So, we use inner hangouts a lot. We use Slack an awful lot to communicate. A lot of the teams are quite, sort of, self-managing, actually, so a lot of it is just, kind of, project updates. I mean, we do standard, kind of daily standups, with this sort of development team, and then, we do kind of weekly catchups, to get more of a kind of, top level project delivery, sort of overview.
The team in the Philippines is relatively self-managing, so we have three meetings a week with the management as a team over there, all over Slack, or Hangout.
Eric Siu: Got it, and so, how do you ... Let's say you're looking for people in the Philippines, or even in Kiev. I mean, how do you source this talent, and do you run them through any kind of assessments? I guess, what's your process for it? Especially people that you haven't met before?
Myles Anderson: Yeah, I mean, it's all done locally. So we bring on new developers, and they're interviewed by, two or three of the development managers, over in Ukraine. We recruit through various websites, and through agencies, depending on the skill set that we're looking to bring in. In the Philippines, again, it's recruitment locally, and everyone is kind of reviewed and vetted over there. More often than not, we've recruited through networks of people who know other people, kind of bring them in, or through universities that we've established relationships with.
Eric Siu: Got it, and when you say, various websites that you're using, is there anything that you can speak of, speak highly of?
Myles Anderson: Oh, I mean, I actually don't know the names. I didn't do the recruitment in ... That would be in the Ukraine. I mean, in the UK. We use a bunch of websites. There's a great one for the local area that we're based in, in Brighton, called, Why Sussex. There's a very big marketing tech community, down in Brighton, so we use that as a primary source, but in the Ukraine, we've got two or three agents that we use, as well as a couple of websites, but I couldn't tell you the names of them.
Eric Siu: Got it. Okay. Well, I mean, tell us. I mean, what's working for you? What's working really well for you, in terms of customer acquisition today?
Myles Anderson: Yeah, so a lot of our, I mean, all our acquisition is inbound. So, we don't have any salespeople in the organization. So, we're kind of, essentially marketing generated leads, bringing people into a funnel. A lot of it is self serves, if they will sign up for a free trial, and they'll convert. But we also look to lead nurture, people that we think are high value customers, or kind of best fit customers. And so, the customer success team will reach out to them, get them on a demo, get them on a 30-minute one-to-one call, and talk through the platform.
So everybody's brought in through our inner marketing activities. A lot of that is kind of content-based. So we've always produced a lot of thought leadership content. We do a lot of research pieces about what's going on, in this search industry. We do a big study into how consumers are interacting with online reviews, called The Local Consumer Review Study.
We've been doing that for probably six years in a row, and that gets a huge amount of traction, a huge amount of pickup, both within, industry press, but also, because it's on our reputation and reviews, and how that impacts purchasing decisions has a, certainly, kind of wider interest area. We get picked up by places like the Guardian newspaper, the BBC, CNN, so, the larger kind of mainstream news organizations have kind of picked that up, and we've just been kind of relying on thought about our content strategy, for a long time.
We do a webinar series, where we get experts to come on and talk with me about various topics. The last one of those, we had two and a half thousand registrations for that webinar. Over 1,200 people turned up, so, really good numbers.
But it's been, over time, it's been very much about building the brand through building authority content, proving to our customers that we are, we know a lot about digital marketing, and SEO, in particular, and also providing them with information they can use in their jobs. So, providing them with information that allows them to benchmark how they're doing as a business against their competitors.
We do an industry survey that looks at, everything from income, how people are charging, is it on a retainer, is it on a project basis? And then, also, how does that differ for small agencies, big agencies, and freelancers? That's quite useful for our customers, because they can definitely benchmark themselves, to see if they're earning the same amount of income per customer per month, as others in the industry.
And also allows them to identify, maybe, different strategy options, in terms of different solutions and products that others are selling, but maybe, they're not, that they might bring into their kind of product set. So we try to look at how we can produce research and studies that help our customers become more effective at what they do, or things that allow them to sell better.
So, our consumer review study, for example. Lots of great stats in there about how consumers are using online reviews to find local businesses, and also, determine which local businesses to end up using. They can then take that data onto their customers, and saying, "You really should be doing reputation management, and here are some great, great supporting stats, to kind of back that up."
And that's proved very popular, so, as well as providing a tool set that customers can use to, essentially, kind of local reports, and understand local performance, we're giving them data that allows them to improve their own businesses. That rubs off nicely on our brand. That gets shared a lot, a lot of word of mouth, and that brings, bring customers in.
I mean, we probably, we do, also do some BBC, as well. It's really the only kind of pay channel that we use, but we spend less than $5,000 a month on BBC.
Eric Siu: So, let's say I opt in to your industry report, and I am your ideal customer. What does that funnel look like? How does your team decide ... I guess, how does that sequence look? Just so people have an idea of how they might be able to work that out for themselves.
Myles Anderson: Yeah, all of our content is freely accessible on website. So we don't lock any content behind e-mail forms or contact forms. Our philosophy is, A, we want Google to have full access to that content, so that kind of benefits our organic ranking. Our organic traffic grew about 90% last year, so we saw a huge success in growing our organic traffic. And also, that we're here to serve our customers, we're here to be useful to them. By essentially forcing stuff to be behind log-ins, that goes against that, our mission to serve.
Eric Siu: Got it. Okay. Makes sense. So tell us about one big struggle you faced while growing this business.
Myles Anderson: Yeah, and I was, I was trying to think about this, as one of the questions that sort of might pop up. I mean, in the very early days, before we essentially stumbled upon, what is BrightLocal today, very nearly built a CRM system for SMBs. Which, at that time, this is back in 2008, there were obviously a few around, but we thought we could do it better. That was actually our, really, my first foray, having worked in-house with an organization, getting paid a salary. This is my sort of my first foray into entrepreneurship.
We went through a whole, kind of, very, very detailed sort of product specification, getting detailed designs down, and really kind of thinking about the usability, and then, we essentially handed that specification to a development house, somewhere in Russia, and they kind of came back and quoted, and it was basically going to use up all the capital that I'd saved, essentially, through my sort of savings to put into it.
Almost at the eleventh hour, we just pulled back from that thought: "Hang on, what are we doing? What happens if this goes wrong? How are we going to actually have any money to run this and support this, after the build phase is complete?" And so, having put all that work in, we just took a couple of steps back, and rethought things again, and ended up going with BrightLocal. Which, I think, was probably the biggest near miss that we had, because I think that would have, we would end up in a world of pain, having gone down that original sort of planned routine.
So I think that was a case solved, just being acutely ... We always could have stumbled into that, with our eyes shut, and luckily, I opened them at the last minute. I think, as people who, developing products from the ground up, that awareness and alertness to your situation is absolutely critical. You need to be kind of nimble and adaptive, and be prepared to make hard decisions. Having gone through that process of really thinking this product idea through, specifying it, we decided that we weren't going to through with it.
That was quite a hard decision to make, but absolutely, the best decision that I ever have made. In terms of other challenges, when I started the business, I had young family. I had two young kids, I've now get four, and there's a lot of personal challenges kind of thrown in, with trying to grow as a business, at the same time as growing a young family. Another big fear factor, in terms of that, is just going to be something that grows big enough to kind of support my family, and give them a lifestyle I'd like them to have.
So there's a little bit of personal challenges, on that side of things, but also, as the entrepreneur in a boot-strapped business, where you haven't got the ability to go and employ specialists in marketing, specialists in, on the product side of things. You've got to wear many hats. You need to be able to kind of do everything, and you've got to develop those skills on the job, and you got to develop them rapidly, while keeping the business moving forward. There isn't a lot of comfort time to create, learn these skills, try them out in a safe environment, before unleashing them onto your product.
It requires quick adaption, quick development of new skills, ability to turn your hand to almost everything, from accounts, to cutting wire frames, through to, being able to speak to customers on the phone. And a lot of energy kind of needed to it, so, you're not, I think, juggling that. Actually, when I first started the business, for the first three years, I had a full-time job.
My day used to go like this. I used to get up at 6:30 in the morning, get my kids up, give them breakfast, get them ready for school, and then I would go off to my day job at about 8:30. I would leave that at about 6:30, get home about 7:30, have supper with my wife, and then, I'd work from 9:00, till about 3:00 in the morning, and then, I'd sleep from 3:00, till 6:37, get up and go again. Rinse and repeat.
So I was probably getting about four to five hours' sleep maximum, a night, for about three years, until I got the business to an MMR, MRR level, that I could basically, kind of just ditch the day job, step into that, and ...
Eric Siu: What MRR was that?
Myles Anderson: I think it was about 20 grand a month, 20-25 grand a month. It wasn't a lot, but we grew slow. We didn't have any money. People'd always say to me, "The success you've had, did you always know you were gonna have it?" I would say, no, I actually thought we were going to fail, when I started this.
Eric Siu: Got it. So you're saying it took three years to get to 20K MRR?
Myles Anderson: Yeah, it did. It did. But if you think about that time, we had no budget to spend ,really. We had no full-time developers. It was just myself, my business partner, just kind of slowly coming up with ideas and developing that writing content. I used to do a lot of stuff on the train, to and from the day job that I had, like, kind of getting stuff done.
But that time, also, I was plowing a lot of my end salary back into that point, as well, so there wasn't really a lot of money kind of trickling down into that sort of family.
Eric Siu: Yeah.
Myles Anderson: But when I started the business, the first time, I'd been working. I'd been employed in a relatively well-paid job, doing business development for various sort of, tech and media companies, and so, I had no experience of entrepreneurship, I had no money, and I actually had a pretty minimal sort of industry understanding.
So, I had all those things going, kind of stacked against me, and I kind of treated the experience as upscaling myself. Putting myself out, putting myself in a situation where I had to develop a whole lot of new skills, but should it all fail, and not succeed, I would be able to kind of change jobs, and be employable in an industry area that I wanted to kind of move into.
So, yeah, I always had that at the back of my mind for the first couple of years, until we proved, until we'd proven the concept.
Eric Siu: Okay. So you're working your business development job, and then, you said, in the beginning, it was an agency, right?
Myles Anderson: Yeah.
Eric Siu: Okay, it was an agency, and then, you have, maybe two or three more pivots, and then, you landed on BrightLocal, and then, that's how you eventually got to the 20K MRR> So, I guess my point is, for people listening, entrepreneurship, this thing's not very linear. I think even the people that have businesses, even sometimes, I need reminders, where it's just like, "Yeah, you're going to run into struggles, and you're going to zig and zag around." That's exactly what happened to you, right?
Myles Anderson: Yeah, yeah. Very much so. I think the thing that carried us through was just, being really alert to what feedback we were getting from customers. So, before we launched the main, sort of, write local, we got Local to sign up for beta. And I remember, I remember, the best thing about ... One day, I had a sort of, early smartphone back then, and I remember, one day, just getting, my phone going, bing, bing, bing, these little emails coming in.
It was people registering for our beta, and I remember, suddenly, we'd gone from no registrations, to 250 people who wanted to know more about it. I thought, "Oh, my God, that's amazing."
Eric Siu: Where did they come from?
Myles Anderson: I think we'd done some early kind of, word of mouth sort of marketing, and we do some communities, to kind of canvass opinion, and get it out there. Actually, we also launched a free little badge button you could put on your website, which would link you through to various sort of local directories. And that's what we just kind of put out there. That's kind of what got people interested in us in the first place.
But that made me feel a lot more, kind of a bit positive, there's demand out there, and then, we just really kind of listened to what people said about the platform, and said what they wanted. We read forums for our local comMunity. We also canvassed opinions with [inaudible 00:22:12] trying us out. And we were pretty nimble about, good at rolling out new features, cutting features that people weren't interested in, and that was great.
I mean, it's amazing, just essentially, just getting live paying users to give you feedback on your product that's going to make them pay more, pay for longer. It's great when you can get access to that feedback.
Eric Siu: I love it, and so, in the very beginning, the early days, what percentage of those free trials became paying customers?
Myles Anderson: I mean, I think, we've had kind of conversion somewhere between 10% and 15% throughout, pretty much.
Eric Siu: Right.
Myles Anderson: Yeah, so it's kind of in there. I can't remember that, back in that day, what the level was, but sort of between 10% and 15%.
Eric Siu: I've had a couple of people on this podcast, where they transform from agency, and they switch strictly to focus on their SAS product. So, let's say, Raven Tools, for example, right? So, for you guys, I'm curious. How did that transition go for you guys? Did you just quit cold turkey, was it a transition? What happened?
Myles Anderson: No, it was a transition. We never had a huge number of customers, I mean, basically, because they weren't my best of part of myself, and we hit some ceilings pretty quickly, in terms of our time and kind of resources. And so, and we also, we looked around, to see whether there were any tools to help us automate various activities, and there wasn't really anything, kind of fit the purpose. Hence, we decided to kind of go and build it, but build it only for ourselves, and then, look to kind of make it more generic, and it could prove that you access other customers, other people outside of us, and we want to kind of make use of it.
So, yeah, so we transitioned a few clients on to other agencies, and we ... At a certain point in time, we only had a few agencies that were onto ... A few customers also had small retainers. We said, "You know what? In two months' time, your time's up. You can either transition now, or you can, the time stops then," but we'd moved most of the customers on, by that point. But, frankly, most of our revenue was already coming from BrightLocal, by that point.
But I think that having those other customers on the agency side is that our customers are now agencies. It just kind of kept, meant, that we, it kept our hand in with the issues and the needs that agencies had, as we built our product for agencies, which was good.
Eric Siu: Right. Got it. That's so funny. That's exactly what's happening right now. It's like, there's kind of a disconnect, because there's ... I have an agency, but then, the product, like, a lot of agencies want to use it. So it's like, it's a good problem to have, I guess.
So, in terms of pricing, I'm curious. So you had the standard pricing. That's for each user, right? So how do you go about pricing for people that want to buy in bulk? Because pricing is always a hairy, a tricky problem.
Myles Anderson: Yeah. I mean, we have a very flexible platform, that has various modules of what you can use it for. So, if you sign up for a Standard Plan, there's three Standard Plans. They range from $30 a month, up to $80 a month, and then, if your needs, which generally is around volume greater than that, then we just have a negotiation.
We try to be priced pretty fairly. We try to be flexible, to accommodate the way different partners work. They have to be setups. They have different projects, different scale clients. And so, we actually entered each negotiation with a kind of clean slate, knowing what our range is, but also, need to understand what the customer's objectives are. And so, we try to be as transparent around that kind of pricing, and we also try and be flexible, so that we're not making you pay for things they don't need, and that they're paying a fair price.
Eric Siu: Got it. Makes sense. Okay, working towards wrapping up here. So, what's one new tool that you've added in the last year, that's added a lot of value to your life? Like Evernote, for example.
Myles Anderson: In terms of tools that I use personally?
Eric Siu: Could be personally, could be for the business.
Myles Anderson: Oh, I see, okay. Not something on our own platform. What if I had it in, I mean, Slack has been a Haven send for us, in terms of, kind of streamlining communication, and unifying the history of communication into one area. We used to use Skype, and that had all, sort of, it kind of set off problems, in terms of looking at historic information, I think. We use a lot of vocal on marketing tools, but generally, sort of used by our marketing teams.
Eric Siu: If you had to pick one book, and it could be any book. Could be business, or anything, or fiction, right? What's one book you'd recommend to everyone?
Myles Anderson: I always enjoy reading Rework, which is by the guys from 37 Signals. That was a book. I mean, it's very old now, but that always helped me kind of, sort of, shape our development philosophy. It's also incredibly easy to read. I really enjoyed reading that. I read a very amusing book the other day, called Disrupted, which is a kind of insider's view of HubSpot, which I thought was hilarious, and I wrote a page turner. You read that?
Eric Siu: No.
Myles Anderson: Yeah, it's, I mean, it doesn't tell you anything about how to run a business. It's not a self-help business book, but it's about the inside of a tech business, and if you work in tech, there's no tech business, how sometimes blinded you can be, to some of the stuff that you think is best practice, but ... which, when you take away that kind of, sort of Tech World lens, just seems a bit silly.
Yeah, it's interesting, it's quite, I don't know how much of it is about HubSpot, but I certainly laughed a lot reading it, and it was a good antidote to some of those more heavy, heavy sort of business books.
Eric Siu: I love it. Well, Myles, this has been fantastic. What's the best way for people to find you online?
Myles Anderson: Well, you can obviously find us through BrightLocal. If you want to e-mail me personally, it's myles#gbrightlocal com. Miles is spelt, sorry, out as M-Y-L-E-S. Or obviously, you can find us on Twitter or Facebook. Hopefully, by now, we've built up a big enough brand profile, that a quick search of BrightLocal, you'll get through to the right place.
Eric Siu: Wonderful. Myles, thanks so much for doing this.
Myles Anderson: Great. Thanks a lot, Eric. All the best.
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