Alex Membrillo, CEO of Cardinal Digital Marketing, based in Atlanta, Georgia, talks about how companies that want to grow have found that marketing comes first to “plant the seed” the sales force harvests. Alex started his agency as an SEO company in 2009, when he got out of Georgia State on the tail of the Great Recession of 2008. Today, his company provides search, paid social, and programmatic display services. The primary client focus is on restaurants (Cardinal excels in balancing the challenges of national brand awareness vs. the needs of local franchisees) and healthcare (Cardinal increases leads and conversions, cuts lead costs, and ameliorates reputation management issues related to Healthgrades ratings).
To track campaign value, Cardinal Digital Marketing develops powerful client tools:
- The imminently-to-be-launched software platform, “Jimoto,” allows SMB franchise restaurants to target campaigns to discrete geographic markets and track lead vs. spend at a local level.
- “Ladybug,” a visualization tool, enables multi-location companies to log on and see how each location is performing with spend and lead volume.
- A tool, currently under development, will enable medical practice and health systems to track the number of leads being driven into their systems, the number of patients from those leads, and the value of those patients?by linking CRM with Facebook or search campaigns.
Alex’s recently published book, The Anatomy of Medical Marketing: How to Increase Your Patient Volume by 5x, (available on Amazon https://www.amazon.com/Anatomy-Medical-Marketing-Alex-Membrillo/dp/1543907482) covers the unique challenges of marketing medical services. He can be reached through his website: cardinaldigitalmarketing.com.
ROB: Welcome to the Marketing Agency Leadership Podcast. I’m your host, Rob Kischuk, and I’m joined today by Alex Membrillo, CEO of Cardinal Digital Marketing, based in Atlanta, Georgia. Welcome, Alex.
ALEX: Hey, thanks, Rob. I appreciate you having me.
ROB: Great to have you on. Why don’t you start off by telling us a little bit about Cardinal and what you’re great at?
ALEX: Absolutely, thanks for asking. I started Cardinal with a business partner almost a decade ago, coming out of Georgia State University—which you also attended and know it is the best university in Georgia, and not that first one you went to.
Nonetheless, we started as an SEO company. We brought on a few small clients here and there from cold calling incessantly when we were 24 in the Great Recession. That led to getting a larger hotel group. We grew from there and have shifted over the years from being an SEO company working with SMBs to more of a boutique media agency, meaning we focus on search and paid social. We also run programmatic display for a number of clients.
Things have changed over the years. We’ve gone from volume to less volume and larger retainers and kind of a different need from our clients.
We’ve also found it really important over the last few years to get industry experience, so not only have we shifted the services we provide, but we’ve also focused on a couple of specific verticals—those being restaurants and healthcare. To that end, our clients have seen a lot of benefit and it also has helped us focus in terms of writing content and things like that.
We’re excited about where Cardinal is going. It’s been a really good couple of years for us.
ROB: That’s exciting. What is it about restaurants and healthcare, do you think, that resonates with you and the capabilities of your team?
ALEX: I think this happens very much the same for a lot of agencies and companies out there. I don’t think any of us set out saying, “We’re going to go into healthcare and restaurants.” I think you land one a couple years in and you’re like, “We’re good at this. Okay, I like this. Let’s go get more.”
We landed a big urgent care system. That led to a big dental care system, and then we also got Papa John’s which led to Taco Mac and Tropical Smoothie Café and all these great brands. So you land one, you learn the industry really well, and you don’t want to throw that away. You write content around it, and it just helps. You get more connections in those industries.
We’ve found it really useful. I actually just wrote a book called The Anatomy of Medical Marketing that’s on Amazon. That was a really cool experience, and I hope the healthcare marketers out there have gotten some value out of it. But yeah, that’s where we’ve been.
ROB: Fantastic. We’ll put that in the show notes to look on Amazon for that book. If you’re coming from the outside, what are the unexpected needs of these verticals that someone might not expect?
ALEX: For healthcare, one of the biggest unexpected needs for us was reputation management. To me, going into it, I thought all that would matter would be driving more leads and increasing patient volume for medical practice and health systems. But you forget that what’s driving patient acquisition is the reputation of the physicians within it.
That has been very eye-opening. You can drive a hundred leads for a client in a week, but if one of those physicians gets a 1-star review on Healthgrades, they are banging down your door and threatening to fire you. Which is totally crazy, and it’s not our fault. [laughs] It’s your doctor’s fault. So that’s been eye-opening, but it’s been fine because we were doing a lot of reputation management for other companies before getting into healthcare. That was eye-opening in the healthcare space.
In restaurants, that one is less based on reputation and more based on brand awareness, which was not a strong suit of Cardinal maybe 6-7 years ago. We really had to learn paid social, brand awareness campaigns, and programmatic display. To that end, we were working with display partners and decided to bring it in-house to do the trafficking ourselves. We brought in a neuroscientist PhD from Georgia State University (the best school in Georgia), and he started doing all the trafficking himself in-house, in Cardinal’s office. Very cool stuff.
So both the reputation management in healthcare and the amount of brand awareness that restaurants need were eye-opening in those industries.
ROB: One thing that’s interesting in restaurants is you have this dynamic of the halo brand over the top of everything, but then the local business aspect. Perhaps drawing into some of your original SMB experience, how is that dynamic between the brand marketing and marketing at the location level, and how is that changing?
ALEX: It’s interesting. Different companies run different ways. Some will have a lot of national corporate branding and some will just run at the local level, but you have to have capabilities at all three levels. With Papa John’s, we will run national campaigns that blanket the country, but the franchisees also have needs around their store on Peachtree Street. You’ve still got to sell pizzas here in Buckhead.
We’ve developed solutions—we actually came out with a really innovative software platform about 4 years ago for Papa John’s because we found this need that franchisees have to make sure they can get appropriate marketing around their stores. We developed this tool called Jimoto, which we’re unveiling in the next few weeks—no one’s ever asked me about it, so this is the first time we’re talking about it.
ROB: You heard it here.
ALEX: You heard it here! So these franchisees of Papa John’s, we’ve been running a program for half a decade now and we’re opening it up. We just signed and launched a program for Tropical Smoothie Café, which is exciting.
The franchisees are able to go into our platform and say, “I want to run a brand-approved Facebook and programmatic display ad campaign within 1 mile of my store.” They select that 1, 2, 5 miles, they select the offer they want to run, and then we run all the ad campaigns on the back end and come back to them with reporting. “You spent this much, franchisee, and we drove this many store visits or sales.”
Through the Jimoto platform, we’re able to make sure franchisees are able to get the love and attention they need around their store, but of course you still have to run national and co-op regional campaigns.
If any marketers out there or agencies are looking to get into the franchise space, it is complicated, and only because we’ve been working it for 8 years have we learned through all of these mistakes.
ROB: There are a couple of platforms out there that have tried to target this multi-location space. What is it you think that they’re still missing? It is still, I think, fairly emergent and not entirely clear how this trend goes along, but what’s missing from what people are trying to do in multi-location marketing from a platform and tooling perspective?
ALEX: A big thing that our clients want in there that Google Analytics and such weren’t able to do is report on the individual location’s lead volume versus spend. So we developed our own platform, once again. It’s more of a visualization tool, but it’s called Ladybug. What our multi-local clients are able to do is log into our platform and see each location and how it’s performing with spend and lead volume.
We were just having a lot of trouble getting that to work in Google Analytics or anything like that because most clients just want reporting on the aggregate. They want to know across their system, how many leads and spend and calls. They don’t want to know by location. But multi-local clients do. That was one of the big struggles, so we developed our own visualization tool there to accomplish that. That’s one of the big things for multi-local.
And then there’s just all kinds of little tactics our team has learned over the years, like how to do search bidding, increasing by a closer proximity and then minimizing the bids as you get further out. There’s all kinds of these little tips and tricks which aren’t super innovative, but unless you’ve done it for 6-7 years, you wouldn’t know it.
ROB: There’s lots of ways to do some of the pieces of local marketing. There have been call tracking platforms for a while, but call tracking platforms that can actually attribute a phone call back to the exact campaign that drove that phone call is a little bit more of a modern thing.
It sounds to me like Jimoto is coming from the mindset of performance marketing, whereas I think a lot of multi-location marketing tools have come in more as a brand marketing tool. It’s like, hey, you can push this content out and you can measure the content, but all you’re doing is measuring the content the way that, let’s say, Papa John’s corporate would think about getting 5 million views on a post on Facebook versus leads, phone calls, visits. Is that maybe a fair perspective?
ALEX: Yeah, we’re much more direct response, exactly. Yext and Vendasta and all of that—which are great platforms, and we use them—they’re more so just from a brand pushing down and making sure everybody’s covered from direct queries and search and all that stuff, whereas we are giving a voice to the little guy out there. That’s who matters most to me. That’s why I started this thing, to help SMBs.
ROB: That’s a good place to pick up the superhero origin story here. You mentioned that you started the business with a partner right out of school. What made you, coming out of school, decide, “Hey, let me go start a company” instead of going to get a job, perhaps?
ALEX: His name is Stephen Popov. We’re still really good friends; he’s gone off to pursue other things. We were at Georgia State when it started, and we were pledge brothers at Pike—don’t hold that against us. We’re not huge meatheads or anything.
But we came out, and it was like 2009. There were no jobs out there. We went and worked for my dad’s little startup. We got laid off when that thing went under. It really pissed me off how an SEO Company treated my dad while we were working there for those 6 months.
So I called my buddy Stephen up and I said, “Hey, Listen. I’m going to go to Billy, and if Billy says he wants marketing,”. . . Billy was my mechanic; he’s on Jimmy Carter. If you need a mechanic, Billy’s the man . . . I went to Billy and said, “Billy, if I start this company, will you get marketing from me?” He said, “Yeah, Alex, I will.”
I called Stephen on the way home and I was like, “Dude, Billy said he’d do it. We need to start Cardinal.” The day after my son was born, I would be holding him making a hundred cold calls a day while he was screaming, and I’d have to hang up on people.
Basically there weren’t really jobs. Students are coming out of college now with a lot of options. That was not the case in ’08. You came out and your best bet was to go into Enterprise and work in their management training program and wash cars all day, or go to Verizon and sell landlines to people coming in for cellphones. I literally did both of those trainings. It was such bullsh*t.
Those were your options. So it really wasn’t superheroes. Out of necessity. I was starting a family and just needed to make some money, and I had a real passion for marketing and helping small businesses, and so did Stephen. So we started with that, and by hook or by crook, we were actually pretty good at it and it went from there.
ROB: Starting from there, two people, what were some of the key hires along the way where you realized a type of person, a skill, a different perspective that you needed on the team that helped make a difference in your growth?
ALEX: The first key hire that we made—well, remember, this is ’08, so we got away with things that you couldn’t get away with now because the job market is so strong. We brought on a few salespeople with no base salary, purely commission. One of those brought on a big hotel group that we paid a lot out on the revenue.
But we had no costs because we were working out of a basement and Starbucks, so we were able to do that. Those were things we were able to do in a recession. So there are perks to a recession, all you people out there, if you’re in the next one. [laughs]
So that was one of the key hires. I would say the next couple key hires, one was my president, Jason, who’s very operationally sound. He keeps my feet on the ground, and all these crazy nice ideas I come up with, he makes sure to keep them in check.
Second key hire was Lauren Thomas. She’s our head of account services, and she brought on Papa John’s and has serviced them so well that they’ve stayed almost 6 or 8 years later. Incredibly sharp and puts the clients before her own wellbeing—sometimes to her own detriment. She wears herself thin, caring so much about the clients. But that was really important.
Then the last key hire was Rich Briddock, who’s our head of media. He’s the wizard that goes to all the clients and presents fancy ideas that really gets them excited, and then it’s up to Lauren to make sure we can actually do them.
I got lucky. I think the only really great decisions I ever made were hiring some of these great people, and then you kind of just give them the keys to the Corvette and let them go with it.
ROB: I think that’s a great insight. I think one thing that’s interesting about agencies in general is when you’re independent, companies with investors will replace the person at the top. But in your chair, you’re the only person who can replace the person at the top, so to grow you have to build the right team around you. I think it’s a unique position of self-awareness that you have to figure it out.
ALEX: Yeah, you’ve really got to rely on them. And trust me, there have been times when they wanted to replace me and I wanted to replace myself. [laughs] We’ve been doing this for almost 10 years, and they have fired me on occasion. You just have to have self-awareness to realize you’re not doing a good enough job and you’re there to provide for them, and if you’re not doing good enough, you either need to find someone else or fix it.
There have been times through this decade that I’ve had to go back and spend a couple months thinking about how I can come back and do better for the team, because it’s been a wild ride at times.
ROB: Where do you find a lot of the useful feedback or learning that helped you come back and grow and improve and un-fire yourself?
ALEX: Un-fire myself, yeah. I got my job back like 2 years ago, it was pretty sweet.
The feedback and learning comes from the team. We’re really transparent. We joke around and there’s tons of F-bombs and craziness going around all the time at the Nest. They are like a family to me. I’m getting married in a few weeks, and many of them are coming to our wedding.
They feel thanks, so they feel Cardinal is as much a part of them as I do for me. We have profit sharing. They see the full financials. Every month they go through the P&L and they talk about things we should get rid of or debate whether we should bring on an FTE because it’s going to affect profit share, and how we are going to grow the business.
That level of transparency and accountability that the flock has enables them to give me really honest feedback. I listen to it, and if I’m not good enough I take it very seriously. I come back to them and say “Is this better?”, and they coach me and get me better.
ROB: I think you’ve already given us some good lessons here. What are some other things that you’ve learned from your experience building Cardinal that you might do differently next time if you were starting from scratch?
ALEX: Some big learning lessons I’ve had actually came beginning of 2016. Q1 of 2016, we had our biggest pickup. In late 2015, our two largest clients said they were going to increase spend with us by a good amount, and they both accounted for over 25% each of our business. I hired quite a few people expecting that growth to happen, going on their word, and Q1 of 2016 it didn’t happen. In fact, both of them cut their spend by 60-70% in 90 days. So you’re overstaffed already, and then you dropped your revenue by 30% agency-wide overnight.
We had to let go of some people, and that created a snowball where we had to dig ourselves out for about a year and a half. We are totally out of it now, and we’re setting records again of revenue profit every month and had our best year ever last year—but we went through a ton of hardship.
My main takeaway there was wait for the growth to happen and hire accordingly. In this agency model, you absolutely cannot hire ahead of it. I know it sounds really heroic, and it’d be great if we all could, but unless you have huge capital reserves, you cannot afford to hire on a whim like that and just hope that the growth happens. It really has to be measured growth. If I were to do it again, I certainly would not have been as aggressive in our hiring.
ROB: That’s a tough lesson but a good one. You survived it, clearly; you’re growing. I think it’s hard because people put these vanity metrics in front of us. I feel like the typical first couple of questions for any entrepreneur are: “How many employees do you have?” and “How much is your revenue?” I don’t know how often you get those questions, but it seems like a pretty common thing. It’s hard not to internalize that and to measure yourself that way.
ALEX: Yeah, Rob, that’s the tough part. Inc. 5000, Pacesetter, all of these great awards—it’s part of why I started Cardinal. I wanted to win these awards. I wanted to show that I was capable of growing a business.
That got into the ego and led to over-hiring because you’re measured, you think, on employees and revenue size whereas you should be measured on how much your clients love you, how much your employees love you, and how much profit you’re creating for all three of those constituents. That’s really what the measurements should be, but we’ve got these vanity metrics that get business owners chasing the wrong thing.
ROB: You mentioned you’ve got the book out, you’ve got the platform coming out. I think those are some good things coming up for Cardinal. What do you think is coming up for marketing that maybe your clients and other agency owners out there should be thinking about/planning for and separating the hype from the actual meat and potatoes of marketing?
ALEX: A few years ago all of us were talking about data and analytics— “This is going to be the next big thing.” Well, it’s here, and we’re really excited about it. What I think the next few years hold is more data attribution for our clients.
What we’re really excited about . . . we’re building a healthcare tool—if you can’t tell, I’m shifting some of the agency resources from services to technology, because that’s where I feel things are going. That’s why I talk so much about software. What we’re building right now is a way for health systems to not only know how many leads are being driven into their system, but how many patients ended up coming from those leads and the value of those patients. In order to do that, you have to tie into CRM and then track back to the Facebook or search campaigns.
That’s what Cardinal is working on, and I think that’s going to be a big evolution for all of us marketers. We’re going to get off of this lead bandwagon and we’re going to get onto the ROI bandwagon. You’re going to go from having MQLs and SQLs to, really, your CMO is going to know exactly the value of those campaigns based on how many new customers it drove.
So that’s what we’re working on, that’s what I’m focused on. I’m sure there’s a lot of other cool stuff happening, but really I just want to be able to give our clients more accurate data.
ROB: That train is moving quickly. Originally any number you could give them that was measurable was interesting and good enough. Things have shifted very quickly, especially in B-to-B, to leads and to actually tying data together and going full funnel into revenue. I think there’s a very large risk of being left behind for some people if they don’t move fast enough on that.
ALEX: Yeah, they have to. Innovators, if you listen to my podcast and you hear from Matt Gove, how they’re bringing on Salesforce CRM and all of this stuff—he is incredibly brilliant. All of the best marketers will get on these developments and voice search and CRM and all of this stuff and get ahead of it before we all catch up and everybody else is left behind.
These are really exciting times, man. Really exciting. You know what I love seeing most? Now, when companies are looking to grow, they look for their VP of marketing before the VP of sales. I think that’s so freaking interesting. What we’re finding is marketing drives demand and salespeople turn the demand into dollars. Both of them are needed, but marketers are driving demand now. I just think it’s so neat how much more important marketing has become.
ROB: It’s interesting you mention healthcare looking directly to Salesforce. Healthcare seems like one of those vertical markets—automotive is one of these—where quite often there have been these sort of parochial solutions just for that vertical. Do you see a trend in healthcare pulling more towards best-of-breed general practice marketing and sales data platforms versus staying in something that’s more niche in their market?
ALEX: I hope not, because I’m developing a software tool for healthcare. [laughs] I think they’re going to go with whatever works best. What we’re trying to do is develop something that works the best for healthcare.
I think it would be hard for a platform to work best for all industries, or even three or four, because it takes understanding the nuances of how hospital systems work to tie into their CRM—but also you have to be buying the right audiences ahead of time, and how do you know that unless you know how the patient flow comes into the system? I don’t know anything about automotive; I couldn’t develop a tool that worked for all platforms. I think some things could work, like reporting could work, but for what we’re trying to do it has to be industry-specific.
So I don’t know. Total addressable market is important, I think, to software programs. I haven’t built a software company really by itself yet, so I don’t know. Get me back on in 5 years and I’ll tell you if you were right and I was totally wrong here.
ROB: [laughs] I think you’re actually getting to do something that a lot of agency owners wish they could do in terms of actually investing in and building a product. How do you decide when the right time to do that is, and how do you balance that tension of billable time for development resources versus bench time that gets invested into these products?
ALEX: It’s tough. It’s really tough. If you were a hyper-growth agency, I think it would be impossible to pull this off. At one point Cardinal was. You’re running on 5-10% profit margins, and there’s very little margin for error or time for your best people to be allocated elsewhere.
That’s not where Cardinal is at anymore. We’re growing steadily. We have a great book of clients that are benefiting a lot, and we’re very profitable, and because of that we’re able to spend time on the product side because we’re not chasing hyper-growth.
Looking at all that, we’re able to allocate resources to developers and marketing and allocate some of our best people’s time because we have bandwidth and profit to fall back on. If you’re in hyper-growth, I just don’t know. I don’t think it’s possible unless you go get outside money.
ROB: Right. It’s not just the tension of hyper-growth but also giving yourself credit for creating an environment of profitability where you have that option. Some people are not growing fast and also not very profitable, and that also limits optionality and isn’t much fun.
ALEX: If your agency’s been doing that for over 16-18 months, then you’ve got to consider becoming a sole practitioner. You’ll make more money that way. But if you can get to the point where it’s growing steadily and profitable and your clients are really happy, employees are really happy, you can start investing in products that can give you a 10x revenue multiple.
ROB: It sounds like there’s even a strategy—how much are you looking to sell those as part of the benefits of being a Cardinal client? Or how much would you partner even with other agencies to provide these tools?
ALEX: Essentially, as it starts, it’ll be a benefit of working with Cardinal. It’s going to help us sell agency services, to have these best-in-breed products. But if they work out well enough, then they’ll become their own standalone LLCs and products and things like that that we could sell to agencies. So we start small by offering it to clients, making sure it works for clients, selling it under Cardinal, and then we go from there.
ROB: I think you’ve got some good experience there that people can learn from. Alex, when someone wants to get in touch with you and with Cardinal, how should they find you and where?
ALEX: We’re at cardinaldigitalmarketing.com. If you forget that, just type “Atlanta digital marketing agency” into Google. We’re usually pretty high up there, #1 in Maps and organic. I care about SEO, so those kind of nerdy things matter to me. [laughs] Hey man, that’s how we started, that’s what matters most to me.
ROB: True to your roots.
ALEX: Also on LinkedIn, look for me, Alex Membrillo. Rob, can I talk about a really cool initiative we have going on? I don’t know if I mentioned this to you. Would you mind me taking 90 seconds?
ROB: Go for it.
ALEX: To everyone listening, something I’m very passionate about is Atlanta’s growth, because it has given me so much when I had so little. In order to give back, I’d really love to get 50,000 jobs here into the city. As everybody knows, we’re pitching Amazon to come here and build their HQ2 here. We have billboards up on Peachtree Street, we’re getting one on 85 14th Street. We’re running tons of digital campaigns here in Atlanta and Seattle, lots of media chasing this. It’s called Prime Up ATL.
I’d love for all of you listening, go to primeupatl.com or type in #primeupATL. Please go there, sign the petition. We’ve had several hundred people sign the petition to have Amazon come here to ATL just in 1 week of promotion. We’re really excited. We’re taking it to Bezos now and making sure he’s aware of these campaigns, and hopefully we will make an impact and get some jobs here.
ROB: That’s an awesome countermeasure. There’s been some stuff that’s been featured on the downside, graffiti and whatnot. It only takes a couple people to do that, but it sounds like with Prime Up you’re showing what the groundswell of support is, not just what somebody with some spray paint and some time does.
ALEX: That’s what got me riled up. I was really upset when we saw the Delta thing and the NRA and all of that. I couldn’t believe our government was doing that. I wanted Amazon, I wanted Bezos to know that that is not reflective of how Atlanta feels. We want them here. Our government makes mistakes occasionally, but we want them to know that the people of Atlanta want them here. And not a couple graffitiers or anything like that—the majority of the city very much wants their jobs and the growth.
Yes, it’s like bringing on a big client. It’s like bringing on a whale of a client, and you’ve got to service them in 90 days, and it’s going to break everything but then you grow into the growth. And that’s what’s going to happen. Anybody that’s against that—and trust me, I’ve gotten a lot of pessimistic comments on Facebook to our ad campaign; we have people harassing our PR agency, telling them to stop.
We’re not stopping just because a couple trolls want this to stop, because the majority of people I talk to very much want this for our city. We deserve this. They deserve us.
ROB: Thank you for doing that as well. Alex Membrillo from Cardinal Digital Marketing, thank you for your time. Thank you especially to CallRail for the introduction today. We couldn’t have done it without them as well. Thank you for your time and wisdom, Alex.
ALEX: Thank you, Rob. Anytime, brother.
ROB: Take care.
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