The Rule of 7 Is Dead: Why You Need 28 Touches Now

Eric and Neil say the rule of 7 has grown toward the rule of 28, and that buyers touch a brand 8 times for a sub-$100 B2C buy and 23 times at $10K-plus. A gelato shop stranger who knew them from different places makes the case that you never know where people will find you. They cover why YouTube drives leads that nobody can attribute, then Meta's $14.9B deal for 49% of Scale AI and the 200-person AI team that Alexander Wang, the former Scale AI CEO, leads. Zuckerberg's line that talent density beats big teams for AI is tested against Meta's 70,000 staff. Neil explains his private equity mindset and his debt at SOFR plus 2%, and they close on the failures that come with big bets. Attention, talent and the cost of big bets. Key takeaways ◾Buyers touch a brand 8 times for a cheap B2C buy and 23 times at $10K-plus ◾Meta built a 200-person AI team out of 70,000 staff, which Zuckerberg calls talent density ◾Meta paid $14.9B for 49% of Scale AI, and Eric says the bet looks like it is paying off Chapters 00:00 Rule of 7 is now the rule of 28 00:44 Touches before buying: 8 cheap, 23 at $10K+ 01:34 A gelato shop stranger, and where people find you 03:53 YouTube drives leads you cannot attribute 04:27 Platforms stop sharing data 06:23 Meta's 200-person AI team, talent over size 07:36 Neil's private equity mindset 09:18 Zuckerberg asks peers what they would do 10:44 Neil's debt: SOFR plus 2% 13:14 Pain now for a bigger company later 14:17 Failures: rockets, timelines and the metaverse Growth Newsletter: https://levelingup.beehiiv.com/subscribe Need marketing help? Visit: https://www.singlegrain.com/ and https://npdigital.com/

• 0:00Speaker 00

  Finding customer information shouldn't mean digging through emails, call notes and spreadsheets. HubSpot Starter Plan brings all of those details together, so it's easier to track what's happening with every deal and what to do next. It pulls information from calls and emails. Then it gets to work, logging and summarizing them. Right after your call ends, HubSpot pulls next steps from your call notes and drafts suggested follow-ups. And it stays up to date for you, so you can build demand, win more deals and spend less time on repetitive work. Your records, insights and next steps are ready for you to act on. And you don't have to miss a beat searching for any of it. Try the Starter Plan for $10 a month. Learn more at hubspot.com. So, we've been saying this since the beginning of this podcast, the, the, the argument that you have to be on the channel. And we said, you know, the, the, in marketing, it used to be the rule of seven. People would have to see your brand seven times before taking an action.

• 0:44Speaker 00

  As this podcast went on, we're like, okay, maybe it's the rule of 14 now. And then maybe today, it's maybe a few years ago, it's like rule of 21. Today, maybe it's the rule of 28, right? So the whole idea is that you have to kind of be everywhere. Now, to Neil's point too, if the more time you spend doing, I don't care if it's a newsletter or a blog post, the more time you spend writing it, the more time you spend doing research, the more tender, loving care you put into it, the better it's going to be. And if you're known for that, then you're ultimately, people are going to open you a lot more, right? And people aren't going to want to read a summary because at the end of the day, the summary is just like a quick soundbite, just like a reel is, or like a short is.

• 1:19Speaker 01

  Yeah, and Eric has a spot on. We did a study, this is older though, I think this is like a year or two, no, yeah, two years. So December 2024, so roughly two years.

• 1:29Speaker 01

  How many times does someone interact with a brand before they buy? Both B to C and B to B. If you look, if it's less than a hundred dollars in B to C, roughly eight times, B to B, three times. But it starts moving up. It can go all the way up, Eric said 20 something. Look at this, for $10,000 plus price points, 23 times before they buy. The rule of seven no longer exists. I think the average here is what, like 14 or something like that? I don't know what the average number is if you just take all the data, but it's much larger than seven. That, that number doesn't exist, uh, um, much at all anymore. People just need to interact with brands.

• 2:08Speaker 00

  We, we should share a story around this. So Neil and I were grabbing a gelato last week, right? And there's a guy that walked to us and it looks like, uh, I think his name's Casey, but he has like a tax company, I think in, in LA, right? And then the, here's, the most fascinating thing to me was he looked at Neil and I, I thought he knew us from marketing school. So he turns to me, he's like, I watch your AI content. He turns to Neil, he's like, you're an OG. That means he doesn't, he didn't even know about the marketing school podcast, right? And so when we do this podcast, we're like in many places, some people know us from the podcast. Some people know us from Neil being in the space for a while. Some people know me from the AI content or whatever. But it just goes to show you that you never know where people are going to find you from, or how people know you. And so you've just got to be out there. That's what marketing is.

• 2:48Speaker 01

  Yeah, and it was great. And I remember when we met him, he gave you feedback too on AI, uh, not your, not really AI.

• 2:55Speaker 00

  Onboarding for one of our things.

• 2:57Speaker 01

  Yeah, correct. So, and it was great because he was telling, he was just talking about like how he just wants to, I believe it was like, get it and just use it and it requires some work. The guy wasn't being negative. He was being helpful and giving Eric feedback that can improve his, uh, that can improve his revenue, uh, usage.

• 3:17Speaker 00

  It was one of our tools.

• 3:19Speaker 01

  Yeah, and, and I thought it was just really good. And that feedback was genuine. It wasn't like he was trying to hate. He actually gave way more compliments than anything else. The guy was really kind, but that's, you know, all these interactions add up and you don't know where you're going to get them. Just like someone could end up

• 3:37Speaker 01

  hiring you because they see you on a podcast and then they see you in, or they listen to your podcast, they see you in person, they watch some of your videos. It all adds up. It goes down to the rule of whatever it is, 11, 14 now, whatever the number may be. And on top of this, when we met him up, I forgot his name and I was curious what he did. I didn't even say anything to Eric. Eric sent me a screenshot of him and what he does and all this kind of stuff. And I was like, oh, cool. This guy's in finance.

• 4:04Speaker 00

  I didn't look into him, right? Somehow he popped up for me later and then I'm just like, oh, I guess he's just this, right? And I sent it to you, but his name's Casey and he has a, a tax advising company in LA. So, and he seems to me like he'd be really good at taxes, so.

• 4:17Speaker 01

  Uh huh. But it was cool. I'll check it out too now and, you know, see what his services are. But this is what happens when you just keep interacting with people and seeing them all over.

• 4:25Speaker 00

  Yeah. And by the way, like I'll call something else out too, like the, the YouTube channel for, for, and I've said this a couple of weeks ago, I'm sure the same thing for you, Neil. But it does drive leads for us because sometimes when people come to us, they, they might say that they come, they came through Google or they might came through, might have come through LLM. But when I talk to their sales team, it's like, well, no, it's, it's like a variety of things. Like they might've like, they've watched your YouTube video or they might've listened to the marketing school podcast and then they came through LLM. So you, you kind of, you kept figuring out attribution, like it, it goes back to the Ajo quote. It's like, you know, I know my marketing works, right? 50% of my marketing works, I just don't know which 50%. And that's more truer today, I think than ever.

• 5:01Speaker 01

  And it's not because of technology. It's not that we can't track everything. It's a, A, the platforms don't let you track everything and they don't want to release the data. And B, a lot of these reasons on why this is happening, isn't because the platforms choose to be like this. It's because there's much more strict, uh, data and privacy laws than there used to be, call it 10 years ago. Uh, that just makes it harder for the platforms to share everything and track everything. And then also the platforms now.

• 5:30Speaker 00

  Yeah, go ahead.

• 5:31Speaker 01

  I was saying, also now the platforms are competing, like which tech company doesn't have an AI offering or an LLM, right? So they now also don't want to share data with each other and they want to block each other off.

• 5:43Speaker 00

  Yeah. Yeah, it's a competitive thing, right? So it's competitive mode. So like, but by the way, 10, 15 years ago, probably 15 years ago, Neil, when you can open up your Google Analytics and you see every single keyword that will convert for you, those were the golden days. You just don't have that anymore, right? So.

• 5:57Speaker 01

  Yeah. They're like, you can now see the data in Google Search Console. It's just not as good because it doesn't have conversion data in there.

• 6:03Speaker 00

  Nope, it gets worse and worse. But, um, by the way, I was watching the Meta interview. So it was, uh, Mark Zuckerberg, Alexander Wang, and then he was on the, with the Stripe co-founder, Cheeky Pint, right? I was, I was, I was listening to that one.

• 6:13Speaker 01

  Stripe co-founder?

• 6:15Speaker 00

  Yeah, Stripe co-founder, uh, it's, there's Patrick Collison and it's, um, there's, uh, it wasn't Patrick, it's the other Collison brother. Uh, maybe it's Jonathan, John Collison.

• 6:23Speaker 01

  Oh, I thought you were saying the Stripe co-founder's name is Cheeky Pint. I'm like, what the heck?

• 6:27Speaker 00

  Oh, no, that's, that's the, so it's, it's funny because on that podcast, I'm sure you saw this on, on Instagram where Mark Zuckerberg drinks like the Guinness and he's like, uh, it's like, so it's, you know what I mean? That one, right? That's the podcast. So I was, I was listening to it.

• 6:38Speaker 01

  That's the name of the podcast.

• 6:40Speaker 00

  Yeah, yeah, yeah, yeah, yeah. So guys, just keep in mind, Meta bought Scale AI for 14.9 billion or something like that. 49% of the company did the deal, right? Initially, everyone's like, oh my God, if it's a good workout or not, it seems like the bet is paying off now. But what I want to call out is when they built that super AI team, super intelligence team, they were very methodical about how they did it. Cause Meta has many employees, right? Tens of thousands. So, um, Alexander, the former CEO of Scale AI was like, look, you know, we're going to do like 200 people. So he manages like 200, his team's 200 people right now. And Mark Zuckerberg was just saying that, you know, what matters ultimately is that talent density big beats big teams for AI.

• 7:19Speaker 00

  So they had to make a lot of adjustments, but in such a big organization, the thing that had, that is capturing the most, uh, mind share right now is that 200 person organization. And I think we're seeing more and more of that. Frictionless Growth Marketing hosted by Sonia Thompson is brought to you by the HubSpot Podcast Network, the audio destination for business professionals. Frictionless Growth Marketing hosted by Sonia Thompson shows how modern brands grow by removing the friction in their marketing and customer experience that pushes customers away every single day, often without leaders even realizing it. Each episode delivers practical insights, real brand examples and conversations with marketing leaders, showing brands how to win with the new rules of growth, identity-driven marketing, cultural relevance and frictionless customer experiences. Listen to Frictionless Growth Marketing wherever you get your podcasts.

• 8:04Speaker 00

  That today. Real quick, if you want to acquire customers faster and more efficiently this year with the latest strategies and tactics, then check out singlegrain.com. That is my ad agency, again, www dot singlegrain.com. Check it out. And if it seems like a fit, we'll get in touch and help you with a free marketing plan.

• 8:22Speaker 01

  Yeah. Dude, every time I think about that acquisition that he ended up doing, I, if it was me, and I, I know we've talked about this on the podcast, I would just would never do it. You, I believe would do it, right? Like if I just look at your personality.

• 8:35Speaker 00

  I think you would, Neil, because here's the thing, it's, if it's 1% of your market cap, why would you not at least put a 1% bet? I know you to make these bets and that's not even a big bet for you.

• 8:45Speaker 01

  That, that's true. I'm looking at 14 billion as a lot of money, but if you want to look at it from a perspective, I still don't know if I would have spent 14 billion just being quite upfront. I am, my mind works more like private equity when it comes to business and entrepreneurship than it does like a traditional entrepreneur who wants to innovate. And

• 9:09Speaker 01

  I, I don't think my mind, the way it works, is the best for people who want to innovate. Cause if you look at what I've done as a company, I've never really built anything that innovates, right? Just being very transparent.

• 9:23Speaker 00

  I would say back in the day, Kiss metrics and Kiss insights and all that. I would say that was like, it wasn't that innovative, but it was like, it was considered ahead of its time, kind of a little bit.

• 9:33Speaker 01

  But that was my co-founder. He was always the one who liked, that was always Heathen. Heathen likes innovating. Even when he sold his last company to Dropbox, he was trying to do something that was really innovative. He likes doing things that people haven't done before. If I look at all the business decisions I made in my life, even when I was partners with him, I tend to stick with things that are more like a person who's in private equity. My mind just works that way. And I'm not saying private equity is good or bad. I do believe innovation dies with private equity. Uh, that's just my personal two cents. Others may disagree with me.

• 10:11Speaker 00

  But it makes money.

• 10:12Speaker 01

  It makes money, but that's the way my brain works as an entrepreneur.

• 10:17Speaker 00

  So what Neil's saying, by the way, I just want to reinforce this. There's no right or wrong way to entrepreneur. And I think we've learned that as we're a little older now, now that we're both in our 40s. There's like Mark Zuckerberg might do it this way. And so here's the thing, I, I learned this listening to him, right? Mark Zuckerberg on this podcast. So his whole thing is like, I'm just going to keep playing the long game because I'm not going to sell this thing, right? And so, um, one thing is he does go around asking his peers. So this is how he got the deal done. He went to Alexander, he's like, he just started talking to him more and more, said, hey, do you just want to have a chat? And he's like, hey, what would you do with this company, right? And so Alexander sent you like pages and pages of stuff and like, uh, tells him what you do. And, and then Mark is like, dude, we just need to like figure out how to work together. But Mark goes around to all his peers and like, you wouldn't see this, Neil, I don't think you would do this, right?

• 11:00Speaker 00

  I don't think you go around to your friends, you, you've never, certainly you don't go to me and like, what would you do with my company, right? But Mark Zuckerberg goes around doing that quite a bit. Yeah, exactly, right? Like just different personalities, but that's how he got this deal done. And everyone's different, like, you know, our, our president, love him or hate him, from what we've seen, like he does go around asking people like what they would do. I think, and, and then he like figures out what he wants to do from there, whether it's a right or wrong decision, so.

• 11:26Speaker 01

  Yeah, I do think you and I do go asking our peers for advice, right?

• 11:31Speaker 00

  Yeah.

• 11:32Speaker 01

  Yaniv is a perfect example of this. When we were refinancing our debt, one way corporations grow is they have corporate debt and you can use it to just go buy and gobble up more companies. Private equity does this, you know, Apple has debt, Google has debt, they all do. And the bigger you are, the better your terms are. Like, uh, my debt is 2% plus sulfur at this point. It's more, it's interest only too, so it's, which is very financially favorable, right? And when you're looking at the overall cost, I think sulfur, when I looked it up yesterday, was 3.88. So call it 5.88 interest only on corporate money, that is really cheap. The lowest I know I can get is 1.75 plus sulfur.

• 12:18Speaker 01

  Um, cause we're, we're not going to be rated grade AAA like Google or something like that. So their debt is always going to be cheaper because they probably spin off about 140, 160 ish billion a year in, uh, uh, net or profit a year. And I head up Yaniv and I got feedback on him because I know who he was talking to when he was doing debt. So Eric and I do go to other entrepreneurs and get feedback on specific instances within our organization. Like, what do you think about this company that I'm looking to buy or I'm looking to go in this direction? What do you think about that? But it's very rare, uh, at least for me, that I go to someone being like, if you own my company, what would you do? Like, I don't go that broad.

• 12:59Speaker 01

  I go to specific people that have expertise for something specific that I'm trying to do. And I already usually know what direction I want to go in before I start getting feedback around that area. And I may learn that I shouldn't do it or it's bad for me. Uh, Eric's giving me feedback as well. Like, I've had offers from people to be, uh, majority owners in my company. And Eric's like, you won't do well with this. You're wasting your time. And then I still go down the road and I talk to people. And then eventually, when I get on the phone with them, and I remember one person telling me, I think they're based out of Colorado or Denver or something like that, and they were trying to give us some money. And I was asking him, if I want to expand into 10 more countries tomorrow, how would this work?

• 13:43Speaker 01

  And they were just like, well, we need to look at the financials and make sure we can afford it. And I'm like, but we can't afford it based off our cash. Well, if we add debt to the business for us buying a portion of your company, we just have to make sure we're in line with the ratios and the bank approvals. And that was the moment where I knew I'm like, oh, this won't.

• 14:04Speaker 00

  They're gonna slow me down. Yeah, it's gonna slow me down. That's your reaction. Yeah.

• 14:08Speaker 01

  Yeah, I'm like, uh, because anytime like a bank or someone tells me I can't do something, I'll figure it out. I'll use my own money or I'll pop, put in money or you know what I mean, right? Or like on.

• 14:18Speaker 00

  And you'd rather do that to grow a little slower and it would be more enjoyable.

• 14:23Speaker 01

  Well, in my case, I believe I would grow faster, but I would have less profit if I didn't. Right? So I would have less cash flow, but I would have a bigger company in the long run and I'm okay with that. Like, you and I are very similar.

• 14:38Speaker 00

  My point is you, you, you're okay with the trade off. That's my point.

• 14:41Speaker 01

  Yes, Eric and I are really okay with suffering in the short run. So short, uh, short-term pain for long-term gain.

• 14:49Speaker 00

  Yep. And that's exactly what, what Zuckerberg was doing. And he's like, he's willing to suffer, right? And like, by the way, when they made the bet, he wasn't sure it was going to work out. Like, while they were kind of figuring out muse and all that. Excuse me. He's like, dude, we're putting a lot of compute into this. We're putting a lot of investments and then magically it worked out. So good for him.

• 15:07Speaker 01

  Yeah, but, but the, uh, not everything works out. It doesn't matter if you're Elon Musk or Mark Zuckerberg. I can list so many failures. You know, how many failures that Elon Musk have of rockets not going up there or sadly exploding? Hopefully lives weren't lost in any of this stuff. I know Musk doesn't want any lives lost. Uh, or like, you know, hey, we're going to release a roadster. It's going to come out in a few years or a truck within a few years and the timelines are just off. I remember them talking about SpaceX and how you're not going to have to fly on airplanes. I'm still waiting for that. And that was a long time ago when they told us that. And Zuckerberg with, uh, uh, what is it? What was it called? The metaverse, right? That's why he changed it.

• 15:44Speaker 00

  Oh, yeah, yeah, yeah, yeah, yeah, the meta.

• 15:46Speaker 01

  Yeah, like we interact. I'm like, who the heck wants to wear these goggles and interact with their friends in some virtual? Maybe the new younger generation wants to, but I think us older generation people, which I would classify you and I in, we actually like seeing our friends in person and hanging out. We don't want to do it virtually. We actually want to see them in person. But all these people have had failures. What does Meta talk about the metaverse anymore? To me, it's a dead project, whether they say it's dead or not.

• 16:14Speaker 00

  You know what? I mean, look, even Jeff Bezos, right? The Kindle, when they had the TV, I think the Fire TV or whatever, or when they launched the phone, that didn't work out for them, right? There's always things that don't work out and it's the failures that make you into the, that forged the greatness, right? Anyway, all right, guys. So that is it for today. Uh, we hope you have a great day and we will see you tomorrow.