How Lori Taylor is building her company for an exit from day one

Andrew: Hey, everyone. My name is Andrew Warner. I’m the founder of Mixergy, where I interview entrepreneurs about how they built their businesses. And today I’ve got a former sales rep for RR Donnelley, a printing company, who created an ecommerce company that sells pet food and supplements and it’s doing really well.

So I invited her here to talk about how she built up her business, why we need another site that sells pet food when we’ve got Facebook and–not Facebook, when we’ve got Amazon and stuff I thought was already conquered by people, but no. She’s building a really growing business here, and I want to understand how she did it and why it’s growing and what you and I can learn from the way she’s building her business. Her name is Lori Taylor. She is the founder of TruDog. It’s a family owned pet and supplement company–pet food, excuse me, and supplement company.

And this interview is sponsored by the company that will help you sell more because they’re really going to supercharge your email marketing. It’s called ActiveCampaign. I’ll tell you more about them later. And by Toptal, my other sponsor, which will help you hire your next great developer or designer.

Lori, good to have you here.

Lori: Thank you for having me, Andrew. I’m grateful to be here.

Andrew: Dollars and cents, how much are you selling in pet food and supplements?

Lori: Last year, we cleared $6.5 million.

Andrew: $6.5 million in revenue?

Lori: Yes.

Andrew: And then how much of that is profit?

Lori: I’m not going to tell you about my profitability right now because it’s not where I need it to be, so I don’t really want to go into great detail about it.

Andrew: Are you profitable?

Lori: No, we’re not profitable yet.

Andrew: You’re not?

Lori: No. We’re an acquisition growth model.

Andrew: Okay. How long have you had the business?

Lori: That will be–we started in January, 2015 was when we went full on, got out of our beta and did a little quarterly launch that we did at the end of 2014. So this will be our third full year, 2017.

Andrew: I see. Okay. And when you say you’re losing money, are we talking about a big amount of money?

Lori: No. We’re not talking about a big amount of money. We try to keep our losses within 10% of our bottom line so we can continue the growth trajectory because we’re in a growth model. No one’s looking to buy our company, which is my end goal. We can talk about it in a few minutes.

But no one is looking to buy a company to do $20 million to make $1 million. The person that’s going to buy my company is going to be a big brand that’s buying the fact that I was able to build a bag that they can fill for an ultra, ultra-premium product that you can go direct to consumer with.

So, any time we go to get profitable, we’ve been working with an M&A firm that’s been guiding us and they’re really wanting us to go for the topline. Like, for example, the Dollar Shave Club sold for $1 billion. They were doing $200 million in revenue but they weren’t profitable. Who bought them, they’re buying them for the customers and their acquisition model because in today’s terms, these big companies like Procter & Gamble, a previous client of mine, they’re kind of big and slow.

So for them to launch a product, it almost costs them more to launch a product from scratch than to let these startups grow, create the model and then absorb it into their company, take out our operational costs. And when you take out our operational costs, we’ve got wonderful profitability for someone.

Andrew: What’s the M&A company that you’re working with?

Lori: Falls River Group out of Florida.

Andrew: I see. I’ve never thought of using an M&A company early on in the growth of a company to just start planning the sale right from the beginning.

Lori: From the very beginning. I went to them and showed them my deck and I said tell me how I take this vision–I know how to bring it to life. I know how to get to $20 million. I’ve done it several times. I know how to go from zero to $25 million. Tell me what I need to focus on in order to make a great exit, because my goal is really help dogs live longer, but I’m realistic about what I can do.

So I know I’m not a person that’s going to have 100 people underneath me or 200 people. So I wanted to get it, prove it. No one has ever done it in the dog space before, ever gone direct to consumer with their brand and been in wholesale. So we did that and then they could absorb us and then my goal is if they can take it out to the world and everyone can understand that it’s a choice. How long you want your dog to live is a freaking choice.

Andrew: We’re going to get into that in a moment. Let me just–you mentioned something about this is not the first company you’ve taken to over $20 million. What’s the other one?

Lori: So my agency, Rev Media Marketing, as a $20+ million boutique agency and then prior to that I built my book of business at RR Donnelley from scratch, from zero to $25 million. I went to $30 million one year, but I was about $25 million.

Andrew: What’s that agency? What’s the URL for the agency?

Lori: It just goes to LoriRTaylor.com.

Andrew: I went to LoriRTaylor.com. The posts on there are old and some of the links are broken.

Lori: Yeah. We’re not doing much with that site. I’m completely focused on–

Andrew: So you hit over $20 million and you decided not to do anything with that?

Lori: I still run it. I have someone that runs my company for me.

Andrew: But then why are they allowing like broken links on the homepage?

Lori: I’m all word of mouth. I don’t do anything on the web. I don’t do any advertising on the web. I’ve been in business for over 25 years. I’ve helped raised $4 billion $5 at a time.

Andrew: But this is a social media marketing buzz company and you’re not doing much on your site?

Lori: No, we’re not doing much on my site at all right now. I’m totally focused on TruDog. I’m not even taking new clients right now. I haven’t taken a new client–

Andrew: And you’re still doing over $20 million in sales a year?

Lori: Yes. I have–

Andrew: What are people paying you over $20 million to do?

Lori: Because I ran lots of direct mail and printing through my company because that’s where my expertise is at.

Andrew: I see. So it’s not so much–even though the website says social caffeine, optimizing the buzz of your life–

Lori: That’s just my fun stuff that I talk about.

Andrew: That’s not where the bulk of the money is coming from.

Lori: Yeah. You can’t buy anything from me.

Andrew: I see. This is the company where you were working as a sales rep for RR Donnelley, something happened and then you basically did the same thing with yourself with the clients that you had at RR Donnelley. Am I right?

Lori: That’s right.

Andrew: Let’s go back to RR Donnelley for a second here. You’re a person who started out your career selling cellphones. Did you do well selling cellphones?

Lori: Yeah, I did great selling cellphones. I actually started my career in Wichita, Kansas, working for Southwestern Bell.

Andrew: Okay. Doing what?

Lori: I was right out of college. They recruited me into this fast track management program to get minorities and women up into the upper ranks. It was in ’92. So that’s what I started out with. I was a manager in their customer service engineering type department and then quickly saw how much fun the sales reps were having and I said, “Why do they get to come and go and do all the things they want to do?” and they explained to me the whole process of the way the company worked, and then they moved me over into the sales side, manager of the sales team and then my fiancé got transferred to Ohio and so I ended up in Ohio.

Andrew: And in Ohio, in Cincinnati you were doing what?

Lori: The cellphones.

Andrew: The cellphone.

Lori: For Cellular One.

Andrew: How well were you doing–by the way, you are freaking hustler. I don’t think people can notice what I noticed before we started. You have the flu today. You weren’t expecting to be on camera. You were still going to show up. As soon as we went into the interview, your voice changed, your personality–not that your personality was bad before, but you’re like, “Dude, I’m on it. I’m in business.” I told you before we started you could do it another time. You said, “I’m going to figure it out. We’re going to be okay.” As soon as we got into it–wow.

Okay. What happened in the cellphone business. Were you a good cellphone salesman?

Lori: Loved the cellphone business. It was a pivotal point in my life. Like it was a huge decision for me because I went there. By the third month there, I’d made like $10,000 selling cellphones because no one had cellphones. It was shooting fish in a barrel to some degree, but also difficult because people weren’t quite there and it was early.

So you just kind of had to keep smiling and dialing. I realized that to do that, I was going to do this the rest of my life, meaning to stay there, unless I went into management, it was an acquisition. You’re always shaking the bushes trying to get that next customer. And it really wasn’t consumable. That’s not how they paid you.

So I knew that I wanted to have kids. I was married and wanted to have kids. I really made a career change and said I love sales, very good at it. I love the flexibility of sales, love that. So my friend worked for a printing company. Quite frankly, it was a crappy job out of college. It was $18,000 base.

Andrew: $18,000 base?

Lori: Yeah.

Andrew: Selling what?

Lori: Selling printing, like paper. I joked around, but I would go down to businesses and get business card orders, take catalogs, like a visible catalog. They would buy computer supplies. People had printers.

Andrew: But you just go door to door, literally, say, “Do you need business cards? I can print them for you?”

Lori: Yes.

Andrew: RR Donnelley is a giant company. That’s the way they were doing things?

Lori: Yeah. They are a $12 billion company now. But when I started, I worked for Wallace, who got bought by Moore who got bought by RR Donnelley. So those two companies don’t exist anymore. So it’s simpler to say I was with RR Donnelley the whole time.

Andrew: I see.

Lori: It was about a $485 million company when I started. It was pretty small. I was the only woman in the sales office, one of the only women in the country that worked for the company, very male dominated. It was crazy. And I remember working there and I worked my you know what off. I worked hard.

Andrew: You can say ass here.

Lori: Okay. I worked my ass off. I worked so hard. And I was all about numbers, like six calls a day, six calls a day, just make your calls and make your numbers.

Andrew: Six doesn’t sound like a lot in a day.

Lori: It is a lot because you only have eight, nine hours in a day.

Andrew: You mean physical sales calls?

Lori: Yes.

Andrew: Oh, I see, not pick up the phone. You’re walking into strangers’ offices six times a day and then telling them, “I need to print stuff for you?”

Lori: Yeah, coming in and saying, “Hey, what are you doing with your printing?” Back then it was a relationship business 100%. I mean, definitely money, price mattered, for sure, but it was a relationship business.

Andrew: What would you do to build a relationship with someone who you just walked in the door and met?

Lori: Solved their problems.

Andrew: How would you do that?

Lori: Like I do it now. I would just go in and ask them questions about their business and I just have a knack for it. I honestly just have a knack for seeing a problem and seeing a solution and paying together. So by the time I built my business, everyone else was doing what I call quoting and hoping and doing their best price. I never did that. I focused on I got really quickly figured out that direct mail was where they spent marketing. That’s where they spent the vast majority of their dollars and that’s where you could make the maximum impact for what you were asking from them.

Andrew: Okay.

Lori: So I would go and I would just take a look at their marketing. I never focused on the printing. I focused on how I could come up with a better marketing message to help them make more money for their company so that as long as my printing was reasonable, I didn’t have to be the cheapest. I couldn’t be three times more, but I didn’t have to be ten cents less either.

Andrew: I see. So they were paying printing pricing, but they were actually getting marketing too.

Lori: Yes. That’s what I did. I wrapped my marketing in there and did a value add. So, it’s very easy for me to maintain my customer base and keep them with me all those years because it was never about the price of the printing for them.

Andrew: And then RR Donnelley was acquired, right?

Lori: Wallace was acquired by a company called Moore and then Moore got bought out by RR Donnelley.

Andrew: I see. Okay. And then at that point, things changed for you.

Lori: Yes. Well, things changed for me when I worked for Wallace–do you mean when I left the company? I was there for 18 years.

Andrew: Which by the way, what the hell are you doing there for 18 years? I know what you’re like. Why 18 years?

Lori: You know, I’ll just give a little backstory, but I was adopted. I was given up for adoption. I know it sounds insane, but you have to believe in genetics over environment because I was raised by the quietest, most introverted safe, keep it safe, get your good job, do your thing.

And then I found my dad when I was 25. My dad is an amazing entrepreneur. He created a California Choice health exchange at California. He’s the largest general agent in the country. They wanted him to do the exchange for the entire country. We’re so glad he didn’t get that. We would have been the most hated family in America, Obamacare. So my dad is an amazing entrepreneur.

Andrew: How old were you when you reconnected with him?

Lori: 25.

Andrew: How’d you find your dad at 25?

Lori: My adopted mom died when I was 19, and after that happened, I was like, “I need to find my birth parents just because what if I decide one day it’s super important to me?” So I had a friend that knew someone at the State Department and she looked at a file folder and called my mom and said, “Does this date mean anything to you?” My mom said yes. She directed my mom to go on a website–

Andrew: Wait. She went to your adopted mom?

Lori: My biological mom.

Andrew: So how did you know your biological mom?

Lori: My friend that worked in the State Department–

Andrew: Found her?

Lori: Like looked in a file.

Andrew: So first you had to find your biological mom. You reconnected with her. What was that like?

Lori: That was good. It was interesting. It was good. She’s a very attractive woman. She’s married to a doctor on Camelback Mountain. She had a great life. It was all good from that perspective. It was an interesting reunion. We’re close. She had another daughter a year and a half later and gave her up for adoption, so that kind of made it a little tricky. I found my sister too. So we’re all reunited.

Andrew: What made that tricky?

Lori: Because I think–I didn’t really have a big chip on my shoulder being adopted. I grew up thinking–I was told that my parents were in love in college and they couldn’t take care of me, a good story. It turns out it was a one-night stand and my mom was so devastated by giving me up for adoption, she just couldn’t wait to do it a year and a half later. It was just kind of a tricky respect thing.

Andrew: I see. You had this idea she was in love, but in reality, she was like–

Lori: It was a one-night stand.

Andrew: Was the second child a one-night stand too?

Lori: No. She was more of a love child with someone she was a fiancée of.

Andrew: I see.

Lori: So it’s all good. My sister and I are close. But it changed my whole story in a minute. I was like, “Wow.” And you were so devastated by giving me up, you just couldn’t–it’s just one of those things–

Andrew: For anyone who’s listening, I promise we’re going to get to the business side of things here, but I cannot not talk about the personal part of the story here. Did you grow up telling yourself these stories of what your parents must have been like, the whole–

Lori: Yes.

Andrew: You did? The prince and princess. . .

Lori: Yes.

Andrew: I see. If they are prince and princess and they were in love, didn’t it bother you that they didn’t include you in the love, that they decided you weren’t going to factor in?

Lori: Somehow my mom did a good job. I don’t remember her telling me, but I remember always feeling super special, like my parents loved me but they couldn’t’ take care of me. They didn’t have any money. They were young and they wanted me to go to this family where my mom, who raised me, couldn’t have any more kids and really wanted a little girl. That’s the kind of story I got sold. It just comes down to what you’re told.

Andrew: Yeah.

Lori: Story is everything. Obviously I’ve known that story for how many years, 25? About an hour into it, that’s busted in the middle and I’ve shifted my perspective. So it just kind of goes to show you how easy what you think and how it impacts you, but then positive shifts can be made from that too, right? If you thought something negative all the time and someone gives you one piece of information, you start to realize how important your mindset is. It’s your mindset. Your mindset really controls your success, your love, your career, your relationships. It does.

Andrew: Because you had a mindset that your parents were in love, it allowed you to grow up in this really well-adjusted way. If you had this bitterness, it would have changed your whole experience even though it was the same experience, it would have changed your reaction to it.

Lori: My sister is bitter.

Andrew: Your sister in bitter?

Lori: Yes, because she knew when she was born she had an older sister that was given up for adoption. She knew that because she was born second. I didn’t know about her.

Andrew: I see. So she knew there was someone else out there and I can’t reconnect with that person.

Lori: Yeah. And she thought my mom was a bit of a–I don’t know if I can say that on here.

Andrew: You can say it.

Lori: A bit of a whore.

Andrew: A bit of a whore.

Lori: She wasn’t, but that’s what her perception was. So I grew up with my mom being a pretty princess to the pretty prince and they couldn’t keep their pretty baby and Jane grew up thinking she was thrown away like a piece of trash because her mom is a whore. And by the way, neither one of those stories are true, which is even more funny, really.

Andrew: Then your dad was harder to get ahold of because he’s such a successful–

Lori: He didn’t know about me.

Andrew: Oh, he didn’t even know?

Lori: No.

Andrew: Can you imagine if somebody came to me 25 years later and said, “I’m your son. I’m your daughter.” How did you get ahold of him, then?

Lori: This is all about networking. So people listening, think about how I got all these things done. There were people I knew that helped me out. So I’ve been a networker from the time I was a little baby. So my pledge mother from college happened to be from his small town. So my mom was able to tell me that he was from a small town in Missouri.

Andrew: And that was it?

Lori: That was it. That was the name of it and I called my pledge mom who called her hairdresser–her mom called the hairdresser, got my dad’s name out in Newport Beach, California. That’s where he lives. That’s literally how I found my dad.

Andrew: I guess she knew the name from the small town. Got it. I see. Wow. And then you from what I understand were making a lot of phone calls trying to get ahold of him.

Lori: Yeah. I tried to call him. It’s funny because I’m a sales rep. I sound like a sales rep. So, I’m calling him. He has a thousand employees. A lot of people are calling him. He’s not calling anybody back. So, finally, like to your point, I wasn’t looking to ruin anyone’s life.

So he didn’t know about me. I don’t know if he’s married. I don’t know how his kid situation is. I just wanted to have a private conversation with him. That’s it. I didn’t know anything about his success, nothing. When I called him, I do now, but I didn’t then. So, I got kind of mad when he wasn’t calling me back. So, I finally called him. I’m like, “Hey, this is Lori Taylor. I’m calling you. I need you to call me back.”

This is what’s really important for people listening. It’s about leverage to get people to call you back. Guilt and shame works a lot better than people think. I’m like, “You are the last person I can talk to. I’m looking for someone and if you don’t know where this person is, I’m lost. I can’t get this person and I really need to find them. It will take five minutes if you can get on the phone. I just need to ask you a couple questions and see if you can point me in the right direction.” And he called me that night.

Andrew: Why didn’t you say, “Hey, I think I’m your daughter. Give me a ring. Talk to you in two minutes?”

Lori: Because I don’t know who checks his voicemail. A lot of people have PAs and things like that. I was super not angry about any of it. Like, what if he’s married to this woman who would divorce him over it? People are crazy. I was like, “I’m not looking to be a homewrecker.”

Andrew: And frankly, for anyone who’s listening to me, there’s someone who listens to my voicemail and checks my email and that’s the life I live and yeah, you can’t get a secret past anybody. I get it.

Lori: Yeah, there are no secrets.

Andrew: All right. Is he at all like you? Is he someone who can recover from a fever in a second and still be up and talking?

Lori: My dad is a star. My dad is why–I love my dad. We are so close. He actually just had surgery yesterday on an aneurism. He’s already up and at them today. He’s 70, 7% body fat, swims a mile every day, super successful company, California Choice. He’s doing–he’s just an amazing human being. He’s so supportive of me and my dreams.

He’s so proud of me because I always joke around with my sister, who’s my best friend, his daughter–he has a son and a daughter and they’re my best friends–I tell my sister, “You might be the favorite, but I’m the trophy child because I grew up like dad.” We didn’t grow up with anything hardly at all. We grew up with very modest means and we both made our first seven figures–by the time he was 30, me by the time I was 25. So I’m his genes. I’m his proof that he’s got strong swimmers.

Andrew: Wow.

Lori: My sister and brother are awesome, like my kids are awesome, but of course they’re awesome. They went to private schools. I did all these wonderful things so that would help them be awesome. So you never know if you threw them in the deep end of the pool if they’d make it to the side and I think my dad, it like validates him as a human being that–

Andrew: I see. So then when the company for, this printing company, you’re with them for 18 years because you were raised to think that’s the way you’re supposed to live your life instead of recognizing you actually have something in you that’s fiery and you’re meant to do something bigger. This company finally cuts commissions. You say, “Wait a minute, cutting commissions on me after 18 years? I’m someone who’s ambitious.” You decide at that point to do what?

Lori: I was so angry. So I got recruited all the time, obviously, because I’m real wrapped in with my clients. I never left. I’m the most loyal person. They gave me the break. People who think that they did it all by themselves, they’re full of shit and I do not respect you and I will not listen to that, nothing.

Every person that’s successful had wind beneath their wings. Every person that’s successful climbed on the top of someone’s shoulders that paved the way and then maybe they went on with their own thing, but at the end of the day, I really respected the people who helped me get where I went, the people who protected me and the people who supported me.

Andrew: Okay. So what happened? They cut your commissions. What did you do at that point?

Lori: Well, I had a deal with them. I was straight commissions, just so you know. And I said, “If you ever cut my commissions, that’s the day I walk and that’s the day I start my own agency, but until then, we’re good.” My old president called me and said, “It’s coming. You have six months. They’re going to cut your commissions. You’re one of two people I’m telling.”

Andrew: Okay.

Lori: I called them up. I said, “I’m not mad. I’m not angry. I get it’s a $12 billion company. I’m frustrated. I’ve already gone to my clients. They said they will go. I know I have a two-year non-compete. I cannot win against you. I will sit out for two years, or we can be progressive. I can start my agency. I could write a contract with you guys, with RR Donnelley to put only you guys as an exclusive supplier to me.”

I was a wonderful copywriter. I’m an excellent copywriter, beyond. I’ve won tons of awards–DMA, National Echo Awards, golden, bronze and silver. And I said, “I’m going to take those skills out and I’m going to take my book of business, and then I’m going to branch out and do my own thing because instead of getting a small piece of a huge pie, I want a bigger piece of the pie,” not thinking how much the oven would cost, the pan, the baking ingredients, all the employees. It sounded good at the time.

Andrew: But you said, “I’m taking my own clients. I promise I’m going to use you guys as a printer. I’ll make a commission on it. The way I’m going to grow my business is I’m going to focus on this marketing I’ve been helping people with.”

Lori: Yes.

Andrew: “And not on the printing, which is kind of, let’s be honest, a commodity product anyway.”

Lori: Exactly.

Andrew: I see. That’s what you did and you realized, “They’re going to be a lot more expenses than I expected in this,” but that’s the backstory to the story we’re going to cover about TruDog. This is how you built up this business that was doing, what, $25 million in sales?

Lori: Yeah.

Andrew: That is why you’re able to lose money on TruDog, right?

Lori: Yeah. TruDog was never–it’s not like cash flow personally for me. It’s a dream. It’s a passion. It’s a purpose. It was something I could build and sell that didn’t have my name on it. Do you know what I mean? My agency is very difficult–

Andrew: What’s the profit on the agency?

Lori: Well, my profit on my agency I don’t really want to say.

Andrew: Are we talking more than $1 million?

Lori: Yes.

Andrew: Okay. All right. So there we go. All right. Let me take a moment here to talk about my first sponsor. It’s called Toptal.

Listen to my, guys–if you’re paying attention to Lori, you see that she’s got this sales person personality. It’s part of who she is, going maybe back biologically, definitely through every part of her experience. The reason I’m bringing this up in an ad for Toptal is the way that she gravitates to sales and business, there are people gravitate to development, to coding, to computers in a way that the rest of the world wouldn’t understand.

Those people don’t want to get on the phone and try to work out a payment structure with you. They don’t want to get on the phone to try to please you. They don’t care about that. What they want is to do good code, to come up with creative solutions to tough problems using code.

So Toptal’s realization was, “Lets’ go find all these people. Let’s not give them these jackass tests that a lot of companies like to put people through, which really are meaningless. Let’s give them a meaningful test. Let’s give them something they could actually be proud of having accomplished.

At the end of this test, they can be one of the top three percent developers out there and they could be in the Toptal network. And then when a company like yours if you’re listening to me, like mine because we did this, like so many others who I’ve interviewed, you could hire these developers.

What you do is you call up Toptal. You say what you’re working on. You tell them what you’re looking for–part-time, full-time, project, full-time team, whatever it is. They then go to this network of people who have coding in their blood. It’s who they are. And they match you up with the right person based on what you’re working on, based on what your timeline is, based on what your temperament is and what your company culture is. They have someone there called a matcher.

If you’re calling up Toptal, you talk to a matcher first and then they suggest someone for you. You can talk to that developer. If you like them, you can get started often within a matter of days. If you don’t, they’ll find someone else for you. That’s the idea behind Toptal. There’s no like going back and forth with them. Toptal has done all that work.

If you’re listening to me, you should know and you probably already do that Toptal was created by a long-time Mixergy fan, which is why he is giving Mixergy people something he’s not giving anyone else–80 hours of Toptal developer credit when you pay for your first 80 hours and that’s in addition to a no risk trial period of up to two weeks. If you want that, go to Toptal.com/Mixergy. That’s Toptal.com/Mixergy.

And if you’ve ever been to like–if you were at that very first live Mixergy event that I did at SXSW with Tim Ferriss, Gary Vaynerchuk and Ze Frank–the founder of Toptal, Taso, was there. He was a listener. He happened to be there. He was watching. That’s the kind of connection I have with him and I want to send him really good customers. So, if you’re into it, go check out Toptal.com/Mixergy.

Lori, as a salesperson, give me feedback on this ad. How do you think I did?

Lori: I loved that ad. I actually need that service. So I was actually listening very–I was very present. I’m like, “What? Oh. . .”

Andrew: I saw that.

Lori: See? They say you can’t con a conman. But that’s exactly who you can con.

Andrew: There is no con here because you know what?

Lori: No, I’m teasing.

Andrew: But you’re saying you can’t sale to a great salesperson because you can see my whole process.

Lori: That’s not true on that one. That’s the whole point I try to tell people. It was a story. It was relative and it made sense because it’s exactly what people are looking to do and I think the biggest problem a lot of entrepreneurs have is that. They lack the technical development team that actually can execute on their vision quickly and what they do is they hire people and then their business changes and then you’re stuck kind of with a team that can’t–oh, they’re really great at Limelight but they don’t know anything about Magento, as an example.

Andrew: Yes.

Lori: But when you do what you’re talking about, it allows you to have some flexibility and fluidity in your model. I think that’s the key to success is being fluid.

Andrew: Right. I believe that Toptal’s secret mission is not to get my audience. They just know I read the ads with the guests there. They think, “All these high end guests that Andrew has, they become clients of Toptal.” If nothing else, they don’t care about the audience. They’re the only sponsor that never says, “How big an audience do you have/” They just say, “Who are you interviewing Andrew?”

Lori: Oh my god, that is genius.

Andrew: Isn’t it brilliant?

Lori: Now I’m impressed because that’s genius.

Andrew: The founder of The Honest Company took down their contact information so that he could call them up. We’re talking about–

Lori: It’s happening. I’m going to call them. There’s no bullshit here. This is exactly what we need right now because our team is a little–we just need a little bit more help in certain areas than we have right now.

Andrew: That’s what that’s about. All right. So here’s how I know you must have been doing well because you were jumping horses. Jumping horses is not like even riding horses, which frankly is a pretty expensive hobby, right?

Lori: Yes.

Andrew: Jumping horses, you need special kinds of horses, you need spaces to–am I right about this?

Lori: Oh, yeah. Our horses, like my daughter’s stallion that she has, we bought him at five years old, he was $100,000 just as a baby and he was unproven. So just the horse itself is very expensive. I have good stories too where I bought a baby for $40,000 and we rode him and developed him and we had an offer–my dad’s funny–we had an offer for him for $500,000, but he’s the winner. It’s like selling Secretariat in my world. I’m like, “Oh my god, I can’t do that.” And my dad’s like, “I don’t know who’s dumber, the guy who made the offer or the girl who didn’t take it.”

Andrew: That’s fantastic.

Lori: So we found out real quickly that we have a great eye for buying horses that we can flip and sell but we’re not part at the selling part. We like to keep them all.

Andrew: You can buy and pet, not buy and sell.

Lori: Yes.

Andrew: Is a Great Dane–I thought Great Dane Truman, that’s a horse?

Lori: Great Dane is my dog.

Andrew: I thought so. Yeah. What’s the deal with the Great Dane Truman–oh, Truman is the name of the Great Dane. Oh, that’s why it’s called TruDog, Truman, like T-R-U. Got it.

Lori: Yeah.

Andrew: So Truman started limping.

Lori: Yeah. You know why I noticed it early, why got lucky? Because I ride horses and they’re expensive horses. So trust me, I know when one of those little–they have the little. . .

Andrew: I see. That’s why you know about nutrition. Got it. So, because you’re a person who jumps horses, takes care of horses, spends a lot of money of horses, you go, “I’m not feeding him the stuff at the supermarket. This is a $500,000 horse. I want to make sure he gets the perfect supplements and make sure that he’s healthy.” Got it. So then when your Great Dane named Truman starts limping, you say, “Wait a minute here? What’s the disconnect between the way we treat dogs and horses?” Am I right?

Lori: Yeah, but here’s the thing, Andrew. I’m just going to be really honest, I don’t have a problem saying, “Hey, I was a dummy.” I don’t have a problem. I knew a lot about human nutrition. My mom had died of leukemia. I’ve helped American Institute for Cancer Research, Juvenile Diabetes Research Foundation. I know so much about human nutrition. I have to tell you, I did–and I’m not different than other people–I just didn’t cross-pollinate that for my dogs.

This is not a pitch. This has nothing to do with my company. This is something I want to know if you know. I want to ask you one question. May I?

Andrew: Yeah. Actually, I’ll tell you what I do with the dogs. I’m a little bit guilty about this. There are two problems that I had. Actually, I had to move my dog out because he was getting aggressive with our baby when we had the baby. I spent so many thousands of dollars on behavioral therapists. I think we might have had a psychotherapist work with him.

Lori: Yeah.

Andrew: At that point, everyone comes out of the woodwork and you pay them money because you want the baby and the dog to do well. Here’s what I didn’t do though. I didn’t care that much about food. I said, “I’m a guy. He’s a guy. Let’s eat whatever we have.” And number two, I didn’t take care of his gums, which I didn’t realize–I’m not sitting there and brushing his teeth, but I didn’t realize you have to take him to have his teeth cleaned. You don’t connect it and then later on, you feel guilty and go, “What kind of a jerk am I?”

Lori: Well, some of the stuff is not even that complicated. Here’s the thing, dogs and humans’ DNA–this part is actually fascinating if you like dogs–84% share the same DNA strands. So we’re very similar. They’re even closer to a wolf. They talk about the dog and the wolf, etc. We’re genetically about the same because a lot of people talk about cancer being created by genetics. I agree there’s a lot of that.

Here’s the thing. Your dog is four times more likely to die of breast cancer than you are, eight times more likely to die of bone cancer than you are, and 35 times more likely to die of skin cancer than you are. That’s insane. Why? What are they doing? Are they smoking? Are they out drinking? This is what blew my mind. Even more than that–

Andrew: So what are they doing then?

Lori: It’s what you’re putting in their bowl. Here’s how it gets really simple. I don’t have to go into the crazy talk about the conspiracy theorists and all that even though some of it’s been proven true about the dead animals and stuff in your dog’s food. I don’t even need to go there, not going to go there. Here’s what I’m going to tell you–your food, it’s kibble. It’s cooked. It’s cooked at 280 degrees for almost six hours. There are no nutrients left in that food. It’s been cooked out.

Andrew: Oh, I see.

Lori: So, if you look at the label, they’re trying to do the right thing. They’re putting all these different vitamins back into the food, but it’s not absorbed by the dog, most of the time, just like humans, you can’t get as much absorption from a pill as you can from a natural source of vitamin C.

If you look at something like a dog, people don’t know this–I’m oversimplifying it, but I have to because it would be too boring. What there is, is a digestive enzyme that comes from the raw protein when they kill an animal in the wild and that enzyme goes and it’s a catalyst for the dog’s digestive system and that’s what makes it work and be able to digest their food.

So when their dog doesn’t get that live enzyme, it still can process the food just like you and I. We can process McDonald’s three times a day for the rest of our lives. That’s the fact, any fast food company, it doesn’t matter. But the bottom line is it doesn’t mean it doesn’t affect your system. It lowers your immune system. Your body does not perform as well. It’s not getting what it needs to make it work and that’s what’s happening with dogs.

Once you explain that to people, it’s not that complicated. I’m not going to tell you not to feed your dog kibble because I understand people have four or five dogs or they have big dogs. I get it. I’m saying now that you know, could you do something to supplement your dog?

Could you give them a probiotic? Probably. Could you give them a scoop of our boosters, which is basically raw dog food that’s been shaved down to a flake formula and you put it on your dog’s food? Absolutely because guess what? It helps them digest the kibble. Then you take a probiotic–I’m not going to go down the whole thing because that’s not really what this is about today. But do you see how there’s a story here and that’s what created this company was I wanted to solve a problem.

Andrew: By the way, how do you get to a point where you care that much about all the details and you know that much about all the details, but you can explain in a way that I could understand and not be bored? How much work does that take?

Lori: It takes a lot of work. Tony Robbins, we did some business together and he’s a really amazing person. He said, “You just can’t om and om people, like just tell them the water comes out of the faucet. Most people just want the solution. They won’t really want to know. You’re going to have the few analyzers that will ask you for more information and that’s great, but most people just want to connect with what you’re trying to communicate.”

So, for me, it was like, “How do I dial this down to something really simple?” I did not want to be–you know who I’m not going to be? I refuse to be the person that tells you how you’re doing everything wrong, but if you buy all of my products for $6 million a month, your dog will live forever. I’m not going to be that person. I’m going to expose there’s a problem out there. I have a solution. I think it works great for a certain type of person with a certain type of dog with a lot of expendable income.

But by the way, for everyone else who I grew up without very much and I would want to do the best by my dog, I develop supplements that allow you to continue to stay within your budget and just support your dog. Now that you know, you can’t not know. I tell people, to know and not do is the same as not knowing. It really is. Now that you do know this, just go out and do a little bit better.

Andrew: I want to understand how you explain all this in social media where you have very little space. I want to understand what you’re doing with–I’ll talk about it in a little bit, the stuff I saw on SimilarWeb. But you just threw out this Tony Robbins connection. I was on your LinkedIn profile.

Like a jerk, as soon as we met, I said, “How come this TruDog isn’t on your LinkedIn profile? Are you really the founder of TruDog or are you just lying to me or something?” I don’t know if you caught that, but there was a little bit of an edge in my voice because I want to make sure my guests are vetted. But the other thing I noticed when I was on your LinkedIn profile is Tony Robbins comes up as people who visited Lori Taylor’s page also visited Tony Robbins’ page, which I’ve never seen before. What’s the connection?

Lori: So the connection is in 2007–I broke my back in 2006 when I got divorced. 2007, I went to one of Tony’s events. I was not a personal development person to that point. Ten minutes in, I was sold. Onboard, I was like, “Love this man, follow him through the fire,” did the platinum partner, got to know him. My husband and I–who’s my husband now–had a tech company and Tony and I became friends and we did business together.

Andrew: What kind of business?

Lori: We were doing a tech company when he was put together My E-Life, which was a big community platform that he was doing, there was a lot of like the Real Billion Investor. There was a lot of commercial real estate investors in it. And 2008 and the bottom fell out. So, when the bottom fell out, his spending kind of fell apart, which I think probably was a blessing in the long run. In the short term it was not.

So my husband and I had a deal going with Stanford. We were working with NBC on this technology my husband had developed at the time. And Tony was very interested in it. We had originally wanted to integrate it with his platform. Then when his platform wasn’t going to go, then he started looking at our technology and working with us. That’s right when he was doing that NBC TV show. That NBC TV show came up and they kind of locked him down on doing much of anything for about six months.

Andrew: I see. What was the NBC TV show? I didn’t know he had one.

Lori: What was that called? It only had like six or seven episodes. I can’t think what it was called.

Andrew: All right. We can always Google that later. I see how you found all this out. I heard from our producer that the very first thing you sold was not supplements but was it freeze dried food, is that what you want to do?

Lori: Yeah. That’s what I started with because to me that was the solution. That was totally the solution.

Andrew: I see. Stop cooking it out. Freeze dry it and ship people food.

Lori: Yes. We have it manufactured. It’s not refrigerated. It comes like a bag of chips. It lasts 18 months. Once you open the bag, it lasts 30 days, just like a bag of chips would go a little stale. It’s not going to make them sick. That’s where we started. That’s my real passion because the changes are phenomenal, like the thing I love about the food is in 30 days you notice a difference. You just do, especially if you haven’t fed raw before. You’ve just been feeding the kibble.

Andrew: I see.

Lori: It would be like you or someone you know–take Chris Voss. Do you know Chris Voss, the technology guy? I don’t know if you know him.

Andrew: No.

Lori: I don’t know if you know him, but Robert Scoble and him are friends. He’s a friend of mine. And he went on this raw diet basically, basically took out all kinds of carbs, everything like that. I never thought he would do this. This is a man that’s hilariously proud of his bad eating habits. He literally–it changed him. He could sleep better. It was a drastic–he lost 30 pounds. He was over 300 pounds. He lost 30 pounds in a month. That’s what the dogs experienced. The difference in your dog is amazing.

Andrew: When they did the freeze dried food?

Lori: Yes.

Andrew: Okay.

Lori: I love the instant result that the people saw. I love they did it. Try it for 30 days, tell me if you don’t see a difference in your dog. Everyone saw a difference.

Andrew: Okay. We asked you in the pre-interview what’s the first step you took to launch a business and you said, “Look, the first thing I had to figure out was not how to make this.” It’s, “How is the customer base for this? Who’s the audience?”

Lori: Yes.

Andrew: How did you know who out there had the money, the patience, etc. to understand and then buy this?

Lori: Remember I’m a direct response marketer by heart. In order to do direct response, you research the living you know what out of your customers. To me, they talk about list, offer and creative. This is important for people listening because I’ve always believed that your offer can be a little week if you’re talking to the right person.

The right person will buy what you’re selling if you’re being honest, authentic, have integrity and you’re in the right place at the right time, that will happen for you. And you can always improve your offer. You can always see that you have a hit, that you haven’t quite nailed it when you’re looking at your average order value, things like that. If they’re coming back quick enough for a second and third order, you can work into that.

I think too many people try to make it perfect. What got me there was I’m action over perfection. It’s my greatest strength. It’s probably my greatest challenge. But I’m action over perfection. So I was like–my dad and I kind of had an argument about it. I was like, “I can do this on Facebook.” I literally wrote a VSL in less than a week.

Andrew: What’s a VSL?

Lori: Sorry, a video sales letter.

Andrew: A video sales letter on Facebook, on your Facebook page?

Lori: No. I created one and creating a landing page and just drove ads to it. That’s what I did.

Andrew: And did you have the product at the time?

Lori: Yeah. We had the product. It was a 37-minute video but it was a way to prove how–we had 100. I get 100 of everything. You don’t have to get so committed to everything. I was terrified of inventory, terrified of it.

Andrew: Where’d you buy this inventory?

Lori: From my manufacturer in Wisconsin.

Andrew: You found someone who was already doing this and you said, “Make it for me with my label.”

Lori: Yes.

Andrew: I see. So the product already existed.

Lori: Yes. The product existed. They modified it somewhat so we’d have a unique formulation, but yes, it existed. They were going through wholesale. Wholesale is really slow. There are distributors involved. They take a lot of the margins. There aren’t a lot left over.

Andrew: How’d you find them?

Lori: A friend of mine–again, networking. I called someone who said, “You’ve got to talk to my friend Tom. He’s got some really good contract manufacturers. He’s a human supplement expert.” That’s what I wanted. I didn’t want a dog expert. I wanted a human expert because I say that we have these supplements that are tested on humans proven safe for pets.

That’s my idea. I think our dogs, the way that we love them, the way we care about them, they deserve as good a supplements as you and are taking. Why wouldn’t we want to give them to our dogs? So I knew if someone would create it, they would buy it.

The way was social media. If you didn’t have social media and I couldn’t tell the story and you could–the video was 37 minutes long and arguably wasn’t that great. It was long. It was really detailed. And then that’s where I figured out I was getting good conversion rates. I was getting over a two percent conversion rate. But it still wasn’t enough. The amount of people I could get to go there was limited because it’s not really a radio offer. Does that make sense?

Andrew: No. What’s a radio offer?

Lori: I call a radio offer something that can go to the masses. So “Fix My Credit,” well, anybody in their car probably has a credit problem or knows someone who has a credit problem. My dental spray is more of a radio offer. 80% of the dogs out there have gum disease and the number one sign of gum disease is bad breath. So a radio commercial that says, “If your dog’s breath stinks, call me. Buy my spray. We solve all your problems,” that’s a radio offer.

Andrew: I saw your YouTube channel and that video that starts off with a dog who has a butt for a face.

Lori: Yeah.

Andrew: “Does your dog’s breath smell? Then it’s an indication. . .” That was the one that had the most views. I’m assuming you also bought ads for that. I get how that would be easy to understand.

Lori: Yeah.

Andrew: You know what? Let me do a second spot here for a company called ActiveCampaign. Anyone who’s listening to me who’s really into marketing has got to check them out. ActiveCampaign is one of the heavyweights in automated marketing. These guys do like if somebody clicks a link five times in your message, they tag them so you know that this is someone who should be buying and if they’re not buying, maybe you want to check in with them or offer something special to get them to tip over because they’re clearly looking at it.

Automated marketing–do you guys do any of that?

Lori: Okay. So we’ve gotten really–this is interesting. I’m a big serendipity person. I’m sick. I have the flu. I never welsh. I say I’m going to do something, I’m going to do it, bottom line, period. So, I’m going to get my makeup and try and make this work, right, not understanding there was a video.

So, that being said, there are two challenges my business faces right now. One is a technology gap, which I think you might have helped close that gap for me. The second is when you start sending emails, like we have over 600,000 people on our email list and you start sending emails like we’re sending, it is very easy for AOL to decide you’re the devil, for Gmail to close up their doors.

Our open rates this summer, I hired someone that got our open rates–they were in the 20s and we’re back up in the 20s, but we were at 2.5%, almost took my business underground. It was horrible.

Andrew: What did you do to go from 2.5% to 20s?

Lori: So many things. If you want me to tell you, I can tell you a lot of the things that we do. But we need an ActiveCampaign for someone who’s really an expert because I know enough to be dangerous. I have a lot of friends in the space–Perry Belcher, Ryan Deiss. I’ve been in the war room since 2010, one of the top internet marketers, I can rely on any of those guys.

So what we did was actually got me connected with a top spammer, which is hilarious because who knows how–I’m like, “Put your white hat on.” The smartest guy with the white hat is the guy that goes pure black at a moment’s notice, okay?

Andrew: How do you find a black hat guy who could do that?

Lori: You become best friends with Perry Belcher.

Andrew: Okay. They said, “Here are the things that are working for me. Now if it’s working for me, a black hat, then it will work well for you.”

Lori: Actually, it’s the opposite. Here’s what he said. Here’s what a black hat spammer does and here’s what you’re doing that looks like a black hat spammer and you don’t know it.

Andrew: I see.

Lori: So there were certain things we were doing that we thought were crafty and great and they’re not. It was not so much about, “Run your email through a spam filter.” That’s kindergarten. Of course you do that. But it’s about looking at your actives, looking at your 30-day actives, your 60, your 90 day actives, understanding that you should put your AOL on its own dedicated IPs versus shared IPs.

Andrew: Why?

Lori: So everyone has as a different school of thought on that. So, for me with Maropost–we use Maropost, that’s who we use–they do a good job for us. People love them or don’t. Their user interface is not good. It’s very difficult. I will warm everyone. So, don’t get excited about Maropost if you don’t have a very good tech team.

But I will tell you they have a really good reputation for getting through the ISPs, but here’s the thing. When you look at what Maropost does and you go, “I want dedicated IPs,” well then why are you paying Maropost? That’s what Keith taught me. It’s like, “You’re paying them for the fact that they’ve got State Farm and a bunch of good neighbors around you in your neighborhood. You’ve got to think of your ISP, your email as a neighborhood.

When you get in the neighborhood, if you start doing weird things, they’re like, “Okay, fine, we’ll keep you on our platform, but we’re going to go put you over here in the ghetto with the other ghetto people doing ghetto things that. . .” oh my god, I’m probably not politically correct when I said ghetto. Anyway, whatever, I grew up in Joplin, Missouri, fine. Put me in Joplin, Missouri and be in a small town with a bunch of people not doing very good things.

Then all of a sudden your email, you get dinged quick. So, to get that back up, you’ve got to do craft things. I’m going to give you guys a tip. I love practice tips–mobile, people don’t think about this–guess what’s a really hard thing to do on a mobile phone besides buy something if you don’t have [inaudible 00:45:45]? It’s unsubscribe.

Andrew: Why?

Lori: Because it’s so small. People aren’t going to work that hard to unsubscribe. “I can’t do it later,” because they’re driving or in a line, they don’t have their glasses. So, what you do is send a really compelling subject line and a really compelling piece of content. Guess what happens? If you get all of your mobile people segmented into a mobile list, you can hit those people more than once a day and you can hit them more than once a week, multiple times a day.

Andrew: How can you tell if someone’s mobile?

Lori: With Maropost–now you’re going to get me in tech–there is a way to tell. I don’t know how they do it, but there is. Just so everyone knows, just ask your tech guy. There is a way to figure out if it’s mobile or not. Once you know that, most people don’t do this. You can send a lot of content to a mobile subscriber and they will not subscribe. They will open. AOL is like yay. They will click. Yeah. As long as it’s very content driven.

So, we don’t do a lot of promotions to our mobile people. We use our mobile people to keep our lists energized, to keep our open rates good and things like that. that’s something we’ve done that’s different.

Andrew: But they don’t buy. I see. You want them to be active but not to buy because you know that they’re not going to buy and they’re not going to unsubscribe. Got it. I see.

Lori: What they do is they make my open rates look good. They make my click through rates look good. AOL looks like, “Okay, this is a good person to do business with. We like her.” I mean, email marketing has become a really serious game, like you really need an ActiveCampaign, someone like that. If you’re emailing more than a million emails a month, to think you can do that on where you started, which was ground zero is delusional. You’re bleeding money on the table. I was.

Andrew: What else are you doing that works?

Lori: The other thing we’re doing that works really well for us is we do like a Slydial, like a broadcast system. So we basically call people and it will be my voice. It’s a ringless voicemail. We don’t have to worry about Grandma Joe answering and murdering me verbally. And we just say, “Hey, I appreciate your business.” We give them a thank you call after the first order, just a thank you call. You can’t call me. You can call me if you wanted to because we show the caller ID.

Andrew: But it just will show up in my voicemail?

Lori: Yeah. It will show up in your voicemail. You’ll have a voicemail and you’ll listen to it and it will be and I’ll say, “Hey, Andrew, it’s Lori Taylor. Thank you so much, founder of TruDog. Thank you so much for investing in your dog’s health. You’re a star. We’re so glad to have you. Tell your friends about us. We want to give you a referral.” We’re just like thank you.

We get so much feedback on Facebook for that one call, like that’s just like, “Thanks.” My demographics are 60+ which is what you started talking to me about earlier, I kind of got you in this rabbit hole–I’m guilty of doing that to people.

Andrew: No, it’s useful stuff, so I’m glad to hear it. Can you do marketing automation using Maropost?

Lori: Yes. By marketing automation, do you mean where they open and if they click? Not as good as ActiveCampaign. You need someone like–it can do it. But you have to be ActiveCampaign. Do you know what I mean? It requires your brains.

Andrew: You have to thank about it. why are you on Maropost. I feel like Maropost is for really big companies but it’s just not very user-friendly.

Lori: It’s horrible, but because that’s what Ryan and Perry had recommended me back in the day, that’s what I went with. That’s what they were using and that’s kind of what I do.

Andrew: I see. That’s the problem with email marketing. It’s so easy to get stuff with what you have. Even though new stuff comes out. It’s really hard to move away.

Lori: I just want to tell everyone that ActiveCampaign you’re talking about, I’ve heard of them. Babak Azad told me about them. We’ve been meaning to talk to them, so it’s like god wink, it’s happening thanks to you. But I just want people to understand.

Email is not–just because you can have a blog and get your little AWeber thing going, that’s great. There’s nothing wrong with that, okay? But when you go into the bigger time emailing, you have to have an expert on your team knowing what you’re doing. You don’t understand what it did to us. When someone came in and didn’t know what they were doing and I took my eye off the ball, I can’t even tell you. To take your open rates from 23% down to 2.5%–

Andrew: That’s huge.

Lori: It was devastating. In the summer–in the summer? It used to be in December when people are just frivolously buying, whatever.

Andrew: Why is the summer big for you?

Lori: Summer is slow for us.

Andrew: I see. Now it’s even slower because of this. Okay. I’ve got to tell you. So, here’s what I like about ActiveCampaign. A lot of us have known about ActiveCampaign. When they first asked to sponsor, I said, “You know what? I think it’s a little too basic.” I didn’t realize that ActiveCampaign had become one of these heavyweight marketing automation tools.

Lori: Yes.

Andrew: They just kept it super simple. So even when you now go on their website, they show you how they’ve now got the flow chart anyone can create that says, “If someone clicked on this, then show them this next message afterwards. Here’s the way to lay out your sequence of messages when someone comes in.” They’re really good about that.

They also have things like easy ways to collect email addresses, but they plug in to so many other tools, so if you want to use someone else’s landing page creator and then have the email addresses go to ActiveCampaign, you could do it. If you want to integrate with other software, you could totally do that too. They let you tag people based on what they’ve done on your site or based on what they’ve done in email.

Lori: It’s huge. It makes you relevant to people. That’s the thing.

Andrew: Yes.

Lori: It’s about being relevant to people. You have so little time to impress someone and to not have that campaign setup properly, to not understand who your hyper buyers are–if someone’s going to buy from you every time you email them, how many times are you going to email them? As many times as they’ll open it.

Andrew: Right.

Lori: We have about 500 customers that drive over a significant amount of revenue for us, like a significant amount, like seven figures in revenue, 500 customers.

Andrew: Right. And you need to be able to identify those so you can see them. You need to figure out what’s unique about them, like what other tags do they have.

Lori: Why not treat them different? We’re sending them a direct mail campaign that says, “Best dog mom ever,” it’s a certificate. I know that sounds hokey, but my avatar is 60+ it’s not hokey. We’re basically giving her a certificate of appreciation for caring about her dog’s health more than most people.

Andrew: All right. If you’re listening to me and you haven’t done any of this stuff, really, I challenge you–you’ve heard me talk about ActiveCampaign here on Mixergy. You’ve also heard me invite my guests to talk about competing products, I challenge you to compare ActiveCampaign to Maropost, to anyone else and see which one–yeah, you’re making that face–to see which is the best for you, but you’d have to at least consider ActiveCampaign.

If you do want ActiveCampaign, here’s what you’re going to get. You’re going to get all that automation. You’re going to get more features than I can tell you about here laid out so beautifully that the bulk of what I’m looking at here on their feature page is .gifs showing you how it works. So, they don’t just say, “We will help you segment.” They’re saying, “Here’s a .gif. In three seconds you can see how easy it is for you to segment.” They don’t tell you it integrates. They show you how easy it is to integrate.

All right. If you want to check them out, compare them to any other product out there and you will see they will make it easy for you to actually use all these marketing automation tools that you know you should you use, but actually maybe you don’t even know they exist.

You definitely need to use them. Because they want to help Mixergy listeners and because they’re sponsoring and we insist our sponsors give our audience something different, they’re giving you your second month free. They’re giving you two calls with consultants who will help you think through your marketing via email and they’re going to do free migration.

So, if you don’t like the system you’re with–this is especially, Lori, really good for someone who’s with some of the more amateur email providers you talked about. You’ve got to migrate away. Why waste time? Let them do it for you. ActiveCampaign will take care of it. Go check out ActiveCampaign.com/Mixergy.

Again, you guys have heard me talk about sponsors and say if you’re not happy–not if you’re not happy with them, definitely if you’re not happy with them, let me know, you’ll get taken care of. But if you find a shred of bullshit–I was going to hesitate–a shred of bullshit in my ads, call me out on it. Let me know. I want to know if this isn’t really working out for you. I want to know that my sponsors aren’t good.

What I’ve been hearing is people who are signing up to ActiveCampaign are really happy and that’s why I continue to get them as sponsors. If they’re not living up to my expectation for you, let me know, I want to know about it, Andrew@Mixergy.com. Really good company and I’m glad that they’re sponsoring.

Okay. Tell me about how you got to your avatar. How do you do that?

Lori: So, the avatar is super simple. It’s going to make a lot of sense to you. So, I already did some industry research. I’m not a rocket scientist here. I just know how to use Google. I Googled a lot of reports. We bought a report that was made, $1,500, that really gave you some insights into the space.

This is in the beginning. This is before I owned the company. This is when I was trying to decide would I be able–I wanted to use direct mail in some parts of it because direct mail still works and I’m an expert at it, like one of the living breathing experts. I’ve done over $500 million worth of direct mail in my lifetime.

So I wanted to do that. This was perfect for me because when this unveiled itself, I had my dog, I’m passionate about helping this not happen to other people. Then I find out that the avatar is the person I’ve been talking to my whole life with disabled American veterans, my client that I support. They’re 60+, married, empty nesters and $75,000 or more in income. It’s pretty much that basic.

Andrew: How did you know this? How did you figure out they’re the avatar?

Lori: I went online and I searched like who was buying the natural–like the natural holistic products were exploding and they have a lot of research from Intel and things like that that kind of show you that.

Andrew: I see, who’s already buying this more expensive stuff. What you’re going to do is modernize it. The marketing will take all the stuff you know from direct marketing, you’ll bring it online. I see. Okay.

Lori: Tell the story. Tell the story like, “Hey, I don’t talk about the product as much as I talk about the result.” You know what I mean? At the end of the day, my solution is just better. I didn’t create the solution like it didn’t exist. No one was talking about it because the people who did it were manufacturers, not marketers. They’re just going through wholesale counting on PetSmart or whoever to drive their sales for them and do their marketing for them.

I was like, “Look, with social media, if I can get some traction and I can run some ads and I can tell people who love their dogs like I love my dog the truth and keep is simple. . .” People don’t know–Andrew, did you understand, I don’t get pushback. People don’t know the things I’m telling them. Then they go research them and they’re like me. They’re like, “How could I not know this?” Like it’s almost embarrassing when you find out and you realize you weren’t even thinking about it. These people love their dogs like they’re their children.

I know because I have five kids, one is in Vanderbilt, a sophomore at Vanderbilt, one is leaving for Loyola next year and then I have twins that are eight. I’m telling you this, when you have those empty nesters and the kids go, you’re kind of like, “Who can I boss around?” Well, I’ve got my twins, right? But when you have the dog, the dog loves you. The dog, you get to all these things for the dogs. The dogs like, “Thank you. Thank you. That’s great. Thank you. You’re amazing.” I was like, “I love you so much more than I love my own children.” But that’s my avatar.

Andrew: I get it.

Lori: And like you’re probably not my avatar. I’m joking around. I know you loved your dog, but you’re like, “I’m feeding him. I’m good.” When people would poo-poo my business plan in the beginning, they’d be like, “No one is going to pay that for dog food.” I’m like, “You’re not my customer.” I was so comfortable telling that to people. They’re like, “How do you know I’m not your customer?” I go, when you walk in the door and you’re hungry, do you feed yourself or your dog first? They’re like, “I feed myself.”

Andrew: Interesting.

Lori: I’m like, “Hello? Grandma Joe would never feed herself before she’d feed her dog because her dogs can’t feed themselves and it’s her fault they haven’t eaten yet.” That’s the psyche.

Andrew: All right. So now you figured out who the avatar was. You understood what you were going to sell them. You created this experiment, this video that was long. It gave you some positive feedback and you knew that you needed to expand. I’m guessing the next step was you launched TruDog.com?

Lori: Yeah. We launched TruDog.com. But the real next step was we were doing this whole food subscription. It was perfect.

Andrew: From the beginning you were doing food subscription?

Lori: Yeah, that’s how we started. That video was to drive food subscriptions.

Andrew: By the way, if you see me look away sometimes, I’m trying to hunt down old videos when you talk about it. I’m trying to see what the page looked like at the time. I don’t yet have that long video, but I have seen videos of you explaining it, explaining what the dental spray is, etc. So you created the website. From the beginning, you said, “I want this to be on a subscription basis. Why?”

Lori: Well, because I believe that’s what makes it work. So I believe direct to consumer, you have to buy at least $100 to $150 to make–people don’t talk about the numbers. But our cost of goods sold is high. Like it’s almost at 50%. Why is that? When you asked me about our margins, here’s the thing–when we were getting our money in a little bit at a time, like a little bit at a time, $250,000 at a time, it doesn’t allow me to buy–I ran out of inventory 17 times last year.

Why? So I’m not buying in scale. I’m not buying my bags in scale. I can drop my cost of goods sold by 15% when I get done with my fundraising I’m doing right now. Then I can buy–I have two years of historical data and I can buy on trends and I know it’s going to turn and I know what products you’re going to sell, so part of the problem is I can drop my bottle costs for my dental spray down to $0.10 a bottle when I can buy $100,000 bottles from China like I can now because we sold almost 300,000 bottles last year. Do you see?

Andrew: I see.

Lori: That’s why when I talk about profitability, the bottom line with profitability for everyone listening is if you can burn the cash, burn the cash to get the topline because the guy who can spend the most for the customer wins every time. However, you can’t sustain that.

Andrew: So you’re saying the subscription had to happen because my cost of goods sold was so high. I wasn’t making enough money on each sale to cover the cost of acquiring the sale. I had to spread it out over multiple months.

Lori: If you have a 50% cost of goods sold, even if you’re doing great, 30% media spend from Facebook because it’s gotten pretty pricey, we used to have that lower, but if it spikes to 40, that’s 90%. You have 10% left over for contribution margin. That’s not going to get you very far when you have to buy more inventory to support the people because you onboard the customer.

Here’s the other problem, Andrew. We sell face cream. We sell tea, all these other things you see for humans, 30-day supply, it’s easy. You’re one person. When I’m doing mine, like I’m trying to project my model out, I don’t know if you have two dogs. I don’t know if you have a big dog or small dog and there’s no way for me to predict it. There’s no way for me to predict it.

So people come to my page and maybe they didn’t buy. If they had one dog, they would have bought. So, being able to isolate that dog to a one-dog, 20-pound dog, like the ideal avatar is the dog. So, when we talk about avatars, what I figured out quickly–everyone listen to this, this is the most important thing I know I’ll say the whole interview for you that people miss–so, yes, avatar, you don’t really have to be rocket scientist to figure 60+, all the things I told you.

But let me tell you what you do have to know. In order to sell my products and market them and build a rapport. I’m not talking to a 60+ year old woman as much as I’m talking to a fat dog, an old dog, a sick dog, those are my avatars, the dog. When I’m talking in terms of a fat dog, Grandma Joe, that is her baby. So, she knows I’m talking to her. I don’t even go breed specific. I took my avatars and put them into buckets of types of dogs who would best most need my product. If that dog absolutely needs my product then its owner knows it. They’re embarrassed.

A sick dog, people are desperate. Your dog has cancer, raw dog food has been known–there’s a man that has a 15-year study with over 5,000 dogs called Long Living Pets, I believe. He’s an amazing man. He’s reversing cancer. I’m not saying I am. I’m just telling you that people are doing things with diet to help dogs’ cancer go away because it’s metabolic. So, if you think about it from that perspective, if you can just level set their nutrition, you can help their bodies heal. So, it’s very interesting. Humans, we have emotions around–there are things that play into cancer that are not just nutritional for us because of emotions and things like that.

Andrew: What’s this time where you lost $600,000 in 90 days?

Lori: That was fun.

Andrew: What happened there?

Lori: Well, that’s when I got really–right before the summer started, I got really committed. Vinny Fisher, good friend of mine, he really got me committed to building my team, getting my quarter back, not doing everything so much myself. That’s why I’m proud that sometimes you ask me a question like, “Oh, I don’t know,” and I feel that nerd come up that says–I’m used to knowing everything and I’m like, “No. You’re running a big company. You should not know that. You should be proud that you’re the CEO and you don’t know that answer.”

But it’s hard for me. I want to know all the answers because I’m a sales rep. But he wanted me to build my team. What we did is we hired a CFO. We spent a lot of money to hire a CFO, highly paid, $150,000 employees, a CFO and a CMO. We put them in charge. I believe that you let people do their jobs. That’s how I believe. You give them the parameters.

I took my eye off the ball. I did not do a good job training, handing off information because we were moving so fast. I’m not blaming this on other people because I’m ultimately responsible, but the team I put together just didn’t understand our business. He went in to calculate our gross margins incorrectly in the store, which ran our promotions past our profitability and then they took my open rates from 20% to–you have to understand how much money we generate from our emails. We have 600,000 people.

Andrew: Oh, that was part of that whole situation and then there was also a pixel issue, a Facebook pixel issue? What was that?

Lori: Yeah, then we had a Facebook–oh, okay, someday I’ll meet Mark Zuckerberg, I will someday and he’ll be sorry. You’ll be sorry, Mark. There’s a long line for that. I appreciate what he’s doing to protect his users and everything. It’s not fun to be told what you can and can’t say in marketing.

Andrew: What happened?

Lori: So nothing that was really big. My friend has a technology called Syphon. Everyone should check it out. He’s like, “Hey, I’ve got this in beta. I want you to put it on your site. It will help you detect bot traffic.” So I said, “Sure, let’s put it on there.” Well, my guy that put it on there didn’t understand I didn’t say don’t put it on the Facebook funnel, which we’re driving $3 million worth of traffic too. I was going to put it on my website where the traffic is lower and see how it did.

Well, what happened was we were crushing it. Our CPAs were so good, $18 a customer. It was amazing. We were printing money. We’re like, “This is it. We’re going to be able to really grow.” All of a sudden, I get an error page when we’re testing the QA. It pops up this error. It turns out that plugin was working and it was catching bot traffic from Facebook.

We get a phone call from Facebook, our account gets shut down on Monday. All this happens on Wednesday and on Friday it gets shut down for no reason. They’re like terms of service violation. I’m like, “We’ve been running the same ad. We haven’t done anything.” We have a rep. We’re like, “What are you talking about?” She’s like, “I don’t know what’s going on.” Same time, I find out that they’re sending me almost 18% bot traffic coming from Facebook, which just by the way, when you can prove that that’s happening, you can get a credit, just so everyone knows that.

So Facebook on Monday, this happens on a Friday and on Monday, I get an email out of the blue. I have not alerted Facebook, my head is spinning about like potentially losing my Facebook account and my account is shut down. I’m closed for business. They send me an email and say, “We sent you some bot traffic, our mistake. They credited us our account for about 15% of our spend over the last week or so.

Then miraculously, my account got turned back on. Then I promise you, there’s a sandbox on Facebook. I can’t prove it, but I know there is. We have another account where we’ll run the same exact ads but get a much better result, but in our TruDog account, remember I was showing you how we merged the pages?

Andrew: Yes, we were talking before we started.

Lori: Part of that. . .

Andrew: I see. You were saying you used this pixel–what was it called, Syphon?

Lori: Syphon. It basically identifies bot traffic.

Andrew: Bot. So Facebook ended up actually sending you bot traffic, which means that you were paying for automated hits to your site to Facebook, Facebook cut you off when you were watching for it and that’s what freaked you guys out and then you came back–you suddenly came back up and Facebook said, “Hey, by the way, we accidentally sent you traffic we shouldn’t have been charging you for. It’s automated traffic. We’re going to give you a refund.” I see. Ultimately that part did work out for the best.

Lori: It did work out. But it still hurt us because after that, our CPA spiked from 20s all the way up to 40s. We’re in the 40s right now and that’s a huge hit for us because that’s a lot to pay for a customer that pays–our average order is $60 and our lifetime value of a customer is like $180 something, $189 now, I think. It’s just a huge chunk to be giving up on the front end for us.

Andrew: What’s this–everyone knows I use SimilarWeb to see where traffic is coming to my guest.

Lori: Yes.

Andrew: MaxBounty.com is sending you a bunch of traffic. That’s an affiliate network where anyone can setup an affiliate account with them. You guys pay $24 per sale for the dental spray for dogs there. Is that driving a significant portion of your business?

Lori: Our affiliate traffic is tiny and that’s what’s a really big hopeful thing for us this year is we hardly have any affiliate traffic because we do affiliates that are more like paid solo drops. So, like we’ll pay someone to drop for us, but as far as traditional affiliates, we don’t do a ton of it, people don’t know this at Facebook, but when you start sending traffic to just your main TruDog.com/whatever, Facebook does not like affiliate marketing and their algorithm is super sophisticated. If you start sending a lot of traffic to the pages you’re also sending your own traffic to, it actually hurts your CPAs.

The other thing that people don’t know about Facebook–I think a lot of people talking about Facebook don’t spend that much about advertising and the people are spending a lot on advertising don’t want to tell anyone what’s working so it can be their secret. But I don’t believe like that. I don’t come from a scarcity place. So, I’m just like, “Go for it.” Most of the people won’t do what you tell them anyway.

At the end of the day, when you look at it from that perspective, those are the types of things we focus on are the CPAs and we have to drive those down or we get in trouble.

Andrew: All right. Let me close out with this question now that we’ve got some rapport. Why are you doing this interview? I love it. I think it’s fun. I think this is a solid interview. We got a lot accomplished here. I’m wondering what’s in it for you. It’s not like you’re going to sell dog food. I don’t have grandmoms who are going to buy dog food for their fat dogs. Why do this?

Lori: Yeah. You know, it’s interesting, like I told you, we have fun things that we’re doing with Zoiq, my company, my event-based business. I do a big event once a year. We’re doing that in May. So, that’s exposure for that, for people out there talking about it. We’ll promote this to those people so you’ll say, “You’re going to learn this and more form Laurie in this event,” so that’s one reason. The other reason is I have a spiritual belief which I’m pretty comfortable talking about is you just have to put it out there.

Like all your listeners, 50% of them have dogs. I’m just telling you, that’s what’s great about this topic. Fifty percent of them have dogs and of those people, half of them are freak shows that love their dogs more than they love their wives or their kids or their husbands because that’s their best friend. So, at the end of the day, I made a commitment to my dog and it might sound cheesy, but it’s true. I might even tear up, but I kind of fucked him over. I don’t know if I can say it on this show. I should have done better by my dog. He was like the love of my life.

Andrew: Truman.

Lori: He was the one thing I fought for in my divorce. I gave my husband everything, all my stuff. I didn’t mind. I loved him. It all worked out. But that dog meant a lot to me. He was counting on me and he didn’t have to die when he was five years old and painful. We had to remove his leg.

I thought just because I didn’t know or just because I didn’t pay attention and I thought, “This is stupid.” I’m really big into veterans work where animal therapy is real. You wait and see. You watch. You pay attention. This is getting done in universities. Animal therapy is real for kids with Asperger’s, for kids with autism, for people with PTSD.

Andrew: I see it.

Lori: Our animals are a precious commodity. While it’s not sexy–it’s not sexy like saving whales and dolphins and eagles, being the steward of the domesticated dog, which are relatively protected animals, it’s important to me because these people love their dogs and I don’t like when people don’t’ tell the truth. I don’t like when a message doesn’t get out there because it’s not popular and the people who control the message with all the money don’t want to talk about it because they actually do sell kibble and it’s a necessity.

There’s not enough cows on the planet to feed humans, much less all the dogs, but there is a better way to treat our dogs and there’s a better way to elevate them. Also, my hope is that people realize how much nutrition affects their dogs and start doing better for themselves and their kids and we have a healthier planet in the long run.

So, for me, coming on this show with you keeps me sharp. Right now I’m going to kill a bunch of people about Lori R. Taylor and you watch, in a week, it will be beautiful. I’ll ping you. I took my eye off that ball because I’d been so focused on–

Andrew: I’d love to hear what you end up doing with that, LoriRTaylor.com. All right. If someone wants to check out Zoinks–I don’t even know the event. What’s the URL for that?

Lori: It’s cool. You should come speak. It’s Zoiq.com. It’s on May 18th.

Andrew: Zoiq.com?

Lori: Yeah. It’s a four-letter thing. We’re crowdsourcing intelligence life. We’re not selling stuff at the event. We’re not doing any DVDs. We basically bring people together with one promise that says when you come in my room–go watch all my testimonials. It’s the real deal. I’m like you come in my room, be prepared for me to talk about god and say fuck in the same sentence somehow and then be prepared that when you come in my room, you come with everything you have to offer and you have the goal of at least helping one person.

I don’t mean give them money. I don’t mean give them business. I mean you know someone who can change their business. They know someone who can change their business Don’t horse trade. Give and you will get and that was my promise and I delivered to every single person there and it was amazing.

Andrew: All right.

Lori: This is my opportunity because my agency–I miss my client work. I love doing it. So this is my opportunity to get in a room and solve a bunch of people’s problems and feel really good about myself that I contributed back to the economy and not just for myself.

Andrew: All right. Zoiq and of course, TruDog is T-R-U. . .

Lori: D-O-G.

Andrew: Yes. Thank you so much for doing this. By the way, if you’re listening and you want to get better email marketing, you should check out ActiveCampaign. The special URL they have for us at Mixergy is ActiveCampaign.com/Mixergy. And if you need a great developer like Lori and so many other people who I’ve interviewed have done, you should check out Toptal.com/Mixergy.

Thank you all for being a part of Mixergy. Bye, everyone. Bye, Lori. Thanks.

Lori: Bye. Thanks, Andrew.