091: The Lifetime Value of Online Tools with Theresa Baretta

On today’s episode I’m talking with Theresa Baretta.  Theresa is the CEO of Loop Link. Loop Link is an operations management coachsulting firm. Loop Link provides integration and implementation services to creative agencies.

Theresa and I met through a, now, mutual client where I was hired to do a tech implementation. Theresa had come up with the strategy of what we were going to do and needed to find someone who could actually implement it.  And my name percolated to the top of the list. The next thing she knew, I had implemented it. And I had a new “systems friend” in the process.

So let’s talk a little bit about what Theresa does for her clients, how that integrates technology in their businesses, and just makes their businesses run the way it needs to.

Theresa was excited about this subject.  Because oftentimes, it’s not something where it’s like, “Oh, you’re this and people connect with that.”   As we are growing in this online space, new things, new services, and new capabilities are being provided every single day. And so how Theresa likes to describe it is that she actually serves her clients through providing them with fractional leadership.

So she doesn’t come in as just a consultant or a service provider.

She comes in as a strategic partner with them, where she is working with them in the depth of their business. So she goes really deep with them in their business and understanding what their goals are.  She helps them understand their aspirations, the vision of the business, and really synthesize that into a project plan and a strategy where we can achieve them effectively and efficiently in the most profitable way.

Along that journey, they put out a lot of prayers and figure out how to make sure it doesn’t happen again, or minimize that cycle.  Because as we continue to grow, there’s always going to be new fires that we have to approach. And so that drives Theresa towards, “How does tech women do a lot of all of this?”  

Theresa likes to consider herself as a techie.

She does a lot of research on tech tools in her free time.  And she thinks that’s one of the attractive reasons why her clients hire her on is that she loves getting into the thick of understanding how specific tools function and whether or not it would be a really good match for her clients and their business models. She often finds that being the matchmaker of it all is fun!  It’s fun in that sense, because then they know, what would be the lifetime value of that tool that matches with their business.

I really like that term, the lifetime value of that tool. So let’s let’s bring that into practicality. Because I don’t like to keep things theoretical on the podcast, I want someone to be able to say, “Oh my goodness, Jamie and Theresa were talking about the lifetime value of a tool. I think that this tool or that tool might be reaching the expiration date in my own business.” 

So let’s dig into that. When you say the lifetime value of a tool, how do you classify, characterize, and utilize that in decision making?

Theresa shared that when they get started on this journey, they typically like to understand what are some of our biggest goals? So for example, if one of the biggest goals is to double your profits, how are you going to get there?  What kind of tech tools or software platforms methodologies will get you there?

She shared that they often can just  “ad hoc” a bunch of platforms together by building the bridge through, for example, Zapier. Or do we go with a platform where it does have the higher price tag, but it’s going to carry us through the storm into where we want to go?

So for example, let’s talk about like a bigger tool with a bigger price tag such as Salesforce or a more business management type of tool.

Now, with those types of tools, they often have a higher price tag on a monthly basis or even an annual basis. And sometimes we might get frightened of how much that tool really costs. But we take a look at how much that tool actually contributes to our efficiency, performance, or knowledge transfer.  And we look at our ability to react quickly or even be able to proactively plan. Those all add towards the lifetime value of that tool. 

So typically, I always like to put the benchmark of any tool that we take on at a three year plan.

Because in the first year, there’s going to be lots of waves. There’s lots of trials.  And there’s lots of kinks to work out before you really start optimizing on that tool.

Then you start seeing the major effect of that tool by year two where you’re running sufficiently with it.

You’re running efficiently. And it’s making you profit as well. It’s contributing to your bottom line. So in year two you start optimizing and really working in alignment with that tool,  You’re fine tuning and everyone is on board. And everyone is optimizing that tool so you’re going to see that reflected in your bottom line.

Now in year three, depending on how fast you have scaled your business, you may have found that you’re starting to outgrow that too.

Or maybe that you might need to go on to the enterprise level or that next level up for that tool. If not, you might have to start evaluating whether or not that tool will carry you through to the next three years or even five years.

Sometimes you can stretch its lifetime value to year five before you need to switch over.

But typically, large organizations, that’s how they work.  In order to really maximize their investment into that tool. They want to be able to at least reach that five year mark with that tool before they consider another month or tool to carry them through to the next five years.

So I really like this concept of lifetime value of a tool and it goes into even when you’re deciding on a tool.

You can say, “Okay, I am going to commit to this tool for three years. I’m not going to commit to this on a month to month basis.”  Because you have to put your brain in the right mindset of how is this tool going to serve my business and help me toward whatever goal you have.  For example, if you’re trying to double your profits, and the tool costs 10% of what your profits are right now, you don’t have to double your profits.  You have to double plus that extra 10% that tool cost you. Why? Because you have to realize that you’re really only going to get to 90% in order when you’re implementing this tool.

Let’s think about a simple, relatively inexpensive tool like Zapier.

Zapier has three or five zaps that you can do for free. I can’t remember at the moment, but I think it’s five.  But it’s five linear tools. And you can do those zaps for free. The cost of that tool, the lifetime, that tool will last and it’ll do what it needs to.  But it’s not doing very much for your business. It’s not going to help you towards your massive goal. It’s more of a crutch.

So when you go and you say, “Okay, I’m moving to Zapier at the starter level.” All of a sudden you’re taking money out of your business on a month to month or annual basis. And you’re saying this is now a valuable asset. It’s no longer a crutch. It is a fundamental component of your business. You’re going to have this tool lift some weight in the business.

Then you get to figure out if that piece of technology, if Zapier or whatever other tool you might be looking at, is going to stand the test of time of those three years.

Year one might be making all your zaps and seeing which ones work and which ones don’t.  You may be turning this one on and turning that one off and all sorts of things like that. Or you may be tweaking them as they go through.  Then in year two, you might be saying, “Hey, this is smooth sailing.”

And then by the time you get to year three, you will keep bumping up against the upper limit of the number of zaps you can do.  You will then have the choice of, “Do I upgrade from the starter level to the next level and pay Zapier more so that I can increase my efficiency?  So I can increase the power of this tool or not?” Theresa shared that Zapier is definitely one of those prime examples. The point is to think about how far do you want to take something before you realize that it’s no longer serving you as well.

Another way to think of Zapier.

Let’s say that you’re using Zapier in the free version.  You could set up three different zaps that act on the same trigger to do three things. Or you could set up one zap on the paid version that does all three of those things nice and succinctly.  I think that for the growth of anyone’s business, that going into the paid model, where you have fewer processes and more efficiencies just make sense. That may be justification unto itself.

So I feel like that’s really the power of having this right hand gal or a director of operations in your business.

They can see how things work to make your business run,.  As opposed to, I want to do this as the business owner. Or this tool looks great or so-and- so is using this tool, maybe we should be using it to as well.

Theresa shared that one of the biggest powers that she always love doing and providing to her clients is the evaluation of those tools.  And really understanding if it does really match up with where the objectives are. And if profit is a huge matter to you and your organization, then you may not want to have a high subscription with the fancy tool.  You may instead like going with a tool that may not be as well known, but serves the same purpose.

Theresa shared that her work can fulfill in other ways as well. So for example, ThriveCart or SpamCart. That’s a great one.  WordPress or Thinkific or Teachable? Each of those have a unique functionality, but it just really depends on what is your unique functionality is.  And does it marry up together?

I was having this conversation with a new client recently.

He’s local here in the Seattle area. I was just having a conversation with him a few days ago. And we were talking about whether we get his WordPress site back to working in the way that it needs to or we move over to Thinkific.  And I did exactly that kind of analysis.

I said, “Okay. If we put X amount of money into getting whatever is working, working. And then we have these ongoing expenses of your Thinkific on a monthly or annual basis.  Your plugins or themes on WordPress on a monthly or annual basis or a one time fee.”

Basically, we listed them all out.

We said that, there is going to be an expense to get things working no matter what. Put that in your left column and put them in your right column. Then there’s the ongoing expenses. And if you look at that three year time frame of your ongoing expenses, and your initial startup and everything else, and you tally at the bottom, if the two products can work the same and deliver the same functionality to your end user, then the  bottom line is what you need to look at.

And we determined with this particular client that they own enough software licenses, that the WordPress solution even though it’s going to cost more upfront for me to get everything working, was a better financial decision for their business than to move everything over to Thinkific.  Why? Because the startup cost was just that much higher.

So it’s really kind of fun to be able to step out of the “I want to create” and “I want to deliver” and actually look at what is the best choice for the profitability of this business.  Theresa shared that there are tools that will contribute to that. And it’s just about, again, going back and slowing down this process. It’s about really evaluating, how much it will be contributing to the bottom line.  And it’s about knowing the tool’s own lifetime value.

I asked Theresa, “So when you have an initial conversation with a new client, and they’re thinking about bringing you into your into their business, what kind of decisions do you make about their business to say yes, I can really, truly help them?”

Theresa shared she thinks, oftentimes, one of the key connection points, apart from Tech, lies in the processes and systems that they have either existing or non existent in their business. She  thinks typically that is what will contribute to whether or not she finds that there’s a good fit for them to work together.

And one of the biggest drivers is the willingness to let go.

As we grow and scale our business baby, it’s really hard for us to let go or to fully trust in, in in your hire or someone who you’re going to be bringing on board.  Because no one else can do it as great as you can for sure because you’ve done it for so long. It’s about trusting and easing into the process, handing it off, and believing that it will still deliver upon what your expectations are.  And it’s about being able to get it done in that way.

That’s how you scale. You can’t do everything yourself forever. Unless you want to stay a baby business. And some people do. There’s no question that some people want to stay a busy, baby business.  And they want to stay in control of everything. That is completely fine. But if you’re ready to move up into to go to bigger things, it’s time to look at the systems and processes that you have in place or don’t have in place.

I asked Theresa, “Are you saying that if someone has absolutely no systems in place that you may still come in if they have the willingness? And also on that note, what kinds of systems would you hope to see when someone is reaching out to you?”

Theresa share that it depends if they came through as a referral. And if, as bad as it sounds, there’s a way to save them with systems.  Because obviously at the point when they get connected, they’re in massive overwhelm and everything is in their head. That is the biggest key!  It’s in their head! And whether or not they will have the time to sit together and really extract all that from their head.

Theresa said that if she sees that those those key parameters are in place, then she might be open to taking them on. But typically, she would like to see that in any organizations that she comes into, that they at least have some existing processes in place.

So for example, on the intake process, or a client fulfillment process, because she’s not here to make you sales.

Theresa shared that she’s here to be able to help you from the inside out. She said that they start with making sure that you’re able to holistically run in efficient operations, which in turn, will be able to support you with your sales. Though, as long as you have those components in place, and that you have a good sales process in place so that you can focus on your your sales process and she’ll focus on your operations process. That’s how they make a winning team.

I’m just thinking practicality as people are listening right now. And they’re saying, “Well, yeah, most of my systems are in my head because they’re just for me.”  Where do they start? Where do you start getting those systems out of your head?

If you are thinking, “Yeah, in like six months, I’m going to be ready.  I’m going to want a Director of Operations.” Where can you start now to make things easier when you’re ready to bring that person on?

Theresa said that she thinks the best thing to start is the plot.  The best place to start is actually in your fulfillment processes. Because anytime that you are bringing on a new team member, it typically wouldn’t be for sales, unless you have a really high sales initiative.

But typically, what you would want to do is make recordings and write down short step by step notes.  Record them in bullet points on what it is that you do on a day to day basis. And if you have already started feeling the growing pains, the best thing to do is just to start with the high level map, as well in understanding which components make up your business.

So for example, let’s talk about sales.

If you are in the coaching industry, then you would have a coaching structure in place.  Scheduling, calendars, and communications, are the components that make up the fulfillment process. So it’s just about understanding what efforts are being put into where.

And I think that makes really good sense. And then of course, we’re going to come back to the tech.  Because everybody is using tech in some way. Whether they’re using tech and resisting it or using tech and embracing it. It’s still a big, big, big component of things. So when I’m talking to a business about the tech that they’re using, and all of a sudden, I come up with six or eight different tech tools that they didn’t even think about on the forefront of their mind. In order to get a punch list of all the different things you touch, I usually ask things like:

  • What tabs are open in your Google browser or in your browser?
  • Where do you store this?
  • What are you using on your computer? And what applications are being used?
  • Where do you store that?

And some people talk about creating ideal weeks/months and tracking all of your business related productivity.

That’s not what this podcast is about. This podcast is about the nuts and bolts. And so by doing those exercises that are for other purposes, but just tracking.  So you will say, “Okay, I touched Thinkific from 9am to 4pm every single day.” Well, that is a tool that you need to make sure that anybody that you bring on, and that your Director of Operations that you bring on, can feel confident and comfortable with.

Or you might have documented 18 tools that you touch in a single day and say, “Oh my goodness, I think the first thing that my Director of Operations needs to do is help me reduce the number of tools.”  So just because some of those systems and processes come from other sources doesn’t mean that they’re still not practical for bringing on a Director of Operations or streamlining and systematizing your tools.

I don’t even know where I was going with that. But I know Theresa and I are both here nodding yes, yes, yes.

Theresa shared that in her discovery calls, as well as her deep dive sessions, they will go through and list out the tech tools that makes up their business operations. And about 80 to 90% of the time, they uncover other tools that they unknowingly or subconsciously use that they don’t even know that they use.  For example, Calendly or even Outlook. Some of the hidden tools that she’s seen is both Dropbox and Google Drive. They just say, “I just store it.” But if you’re touching it, if it’s holding a component of your business like documents or any business related items, it is a part of your toolbox.

So everybody’s toolbox is really, really big.

And we don’t even realize how big it is. It’s just one of those things. And it’s okay. There’s no shame in that. If someone were to ask me or challenge me to tell them every single tool that I use on a daily or weekly basis, I think they’d get tired before they finish the end of the list. It’s completely okay as long as you’re not using three different tools for the same functionality. That’s where you can have efficiency improvements.  And that’s where we go back to that lifetime value of a tool.

It might go a little something like this.  “Okay, well, I always use Dropbox, but now I have to pay for Dropbox.  But I have GSuite. Why don’t I leverage GSuite and the file structure and file systems in there?”  Do not pay for Dropbox and GSuite.

Those are efficiencies that I’m sure Theresa finds ways to make those things work all the time.

She shared that she thinks one of the conditions that she always has with her clients, and it’s a transparent conversation, is that any recommendations that she makes, there’s always a 360 view to it. And there’s a reason why that recommendation is being made.  Hopefully, as a knowledgeable business owner, you’re going to be able to make those decisions.

And sometimes, as hard as it is, because we have those overlapping tools because there’s a function or a feature of it that we really enjoy.  Sometimes it’s about sacrificing that for the efficiency of your business and for the profitability at the end of the day.

I think that is so, so relevant.

And everybody can kind of take away from this episode, something that they can go and look at and see if they can improve and systematized a little bit more or reduce redundancies just a little bit more. I could have probably sat there and talk with Theresa  forever, but I want to respect the audience’s time and make sure that they keep this podcast episode actionable for them. Below you will find ways that you can connect with Theresa and her team.  Theresa does have a free package to help you with your journey to systematization with her SOP bundle that you can download and start your journey today if you are looking to actually hire six months down the road.

I want to thank Theresa for coming on the Tech of Business podcast.  Thank you for listening to the Tech of Business podcast. If you enjoyed the show, please subscribe, share, rate, and review on Apple podcasts, Stitcher Radio, Overcast, or wherever you download your favorite shows. You can also learn more about me at techofbusiness.com.

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