The Purple Accountant: The Secret Weapon Your Business Needs

Awesome. Well, I'm excited to get started with you all today. Oddly enough, though, I identify as a marketer. I do consider myself to be amongst my people here.

I am very much into understanding and living deeply inside of the finances of, of our customers. And I really think that. We are surrounded by a very unique environment today that really presents an opportunity for this group of people in particular. I think that you are in desperate need of being, driven further into the organizations that you participate in, and that the community of e commerce really needs more of your voice today than ever before. So we're going to talk a little bit about that, about what I believe to be a unique opportunity for you all. In what I'm calling Marketing in This Macro Moment, a. k. a. The Purple Accountant. That is the title for our talk today. And this is a reference back to a legendary marketer. Some of you may be familiar with Seth Godin. He wrote a book called The Purple Cow, and the idea of The Purple Cow is just that you may drive by a million black and white cows and never think twice about noticing them, but if you saw a purple cow, you would remember it.

And the metaphor is all set up for helping marketers or brand owners or service providers to think about how they can be remembered. What does it look like to stand out in a sea of black and white cows? And one of the things I've noticed about many service providers this is not just true of accountants.

It's true of marketers, but they tend to market to the the lowest common denominator. And that may include a connection to platforms. So like in our world, that could be something like I'm a meta agency, premier partner, I'm a Google partner. And these are badges that are shared by actually 50 to 100 to, in some cases, thousands of different providers and create no distinct differentiation for them relative to anybody else.

It may have to do with some basic tactic, like the level of accuracy that they produce in their reports or the case study of some sort of growth that may have occurred, but they all sound the same. And if you took the logo off of the agency provider website, you would be not be able to distinguish one from the other based on the messaging at all, because they're not usually even about themselves.

They may be about another brand in their own growth story or whatever it might be. So the question I want us to ask today. As service providers who are thinking about marketing ourselves to the world is how do we become this purple cow? What is it like to tell a story that gets remembered? And I'm gonna use a little bit about our own story at Common Thread Collective to tell you how we've done this.

Part of the reason I'm in this room as a marketer talking to accountants, I'm sure you all, my joke at camp was that I had infiltrated a community where I'm normally banned, right? You guys usually try and keep marketers as far away from your work as possible because we tend to be a little bit frivolous with the dollars occasionally.

But part of what allowed me an opportunity into that space was the creation of a series that I did on the internet last year called Bridges. And the idea was that I saw an opportunity to build a bridge between our worlds, between marketing and finance, and to think about what it would be like to try and unify what I saw as very disparate departments inside of companies that were often siloed and disconnected from one another.

In this series, I did 12 different episodes. It's what got me connected to Jeff and the A2X team initially. Was all about bridging the gap between marketing and finance. And one of the episodes market for this market was a message to brand owners. That's not too dissimilar from what we're going to talk about today.

But what I want to invite you in for the next 30 minutes is to consider coming across this bridge with me. And to think of you're over there on the finance side, and I'm standing over here on the marketing side, and I've come to you in many ways. I spend most of my life trying to walk across the other side to bridge the connection to finance.

But what I want to offer you. Is that just switch hats for a second to switch teams, if you will, and walk across this bridge and join me on the marketing side and think about what might be true in that world that you could get a deeper understanding of and leverage to make a significant impact for your business.

I want to take us back. For a little bit to COVID and I want to recognize something that happened in that era. This is an article that I wrote in May 1st of 2020, when I recognized that we were in a very unique moment for e commerce, it had become increasingly obvious to me that we were experiencing a tailwind that was probably a once in a lifetime moment.

And so I wrote this this article that I titled Dear Brand Owner Swing, an open letter to eat on e commerce uncertainty and action. And basically in over the course of that article, what I had asked, what I would have had it sort of given brand owners, was it imperative that something unique is happening right now?

And you have to go all in. You have to take advantage of it because you will may never receive another moment where your thing is so valuable in the world. Demand was through the roof. All of retail had shut down. You guys know the story. It's well worn. And the reality was for the next 18 months, there was a tailwind in support of e commerce business owners that.

Made that drove every business to some of their wildest success. Much of which they've had a hard time replicating till now. And it was truly a unique moment in time. And when I look back as a service provider, I actually missed that moment. I didn't push myself and the partners I had hard enough in it, despite having clarity of what was occurring.

And we missed the opportunity to create the best market product market for ourselves in that era. And I look back on that with regret and an opportunity passed. Some of my biggest competitors in the space did a much better job than I they all got larger and many of them created a lot of liquidity for their shareholders and did really well in that moment.

And we were a little bit latent to some of it, but what I want to suggest to you all, as you sit here right now, and this is going to be a hard thing to defend just because COVID is such a black swan event. But I really do believe what I'm about to say. And that is that as a financial service professional.

If you're interested in building bridges, if you're interested in building these connections, that there's actually something happening right now that makes this your COVID moment, that actually the tail end of this black swan event is creating an environment where your skill set and knowledge is so desperately in need.

That you have an opportunity to experience the similar kind of tailwind that the marketers and demand creators did during the COVID era. I'm going to explain why. We get to work with some of the coolest brands in the world, many of which are in the eight and nine figure range, many of whom experienced this COVID birth where they watch their business explode during this era and got to be giant, enormous businesses driving lots of profitable growth, but many of them on the end of that are experiencing a very similar theme.

And that theme plays out in a story like this. 

Okay, this is some data from a specific brand partner of ours. And what you're looking at right now is what we would call a cohort specific margin by customer chart. So, what I mean by that. Acquisition month shows me the period in which a set of customers were acquired.

This column here shows me the amount of new customers that were acquired. Weighted CAC, or Customer Acquisition Cost, shows me the blended cost of acquisition for those customers. And then this COGS plus cost of delivery is like the all in variable expense to produce the gross margin profile. This shows me the first order profitability, so the actual margin dollars created in acquisition.

And then this is sort of the LTV over time. So you can see this from January, start with pulled in September. So that's like a nine month LTV. And what you'll notice is that all of these cohorts are creating massive negative contribution on first order and are not even paying back in nine months, 10 months, 11 months, 12 months, it's taking years for them to pay back and this visual and you can sort of play it out in a similar way if you look at it in total dollars.

Represents the cost of the most recent tranche of growth for brands in a post COVID era. So what has happened is that many of these brands got very large. The demand that they used to drive that acquisition in those in 21 and 22 and somewhat in 23 has dissipated. The competition has increased so massively that that next tranche of acquisition, they are out beyond their marginal frontier.

We call it meaning the next dollar they spend is actually to create a, to, to acquire a customer that's creating negative dollars in their business, but because there's still this expectation for top line growth, they're spending and spending and spending, and they're able to sustain it because they have this large base of existing customers.

That they're subsidizing this negative growth off of this existing base. And depending on how big they got for COVID, this game can last for a long time. But the reality is at some point it stops working. You cannot continue to negatively acquire customers over and over and over and over again and sustain.

But yet this is playing out inside of so many different e commerce businesses today, where they just, their next wave of growth is not profitable. And there's so many different dynamics that are competing for that. But the reality is this is prevalent and inside of this business, this specific one, while this was happening in this business is a mid eight figures, e commerce brand.

I went and had coffee once with the CFO. And this was his response to me about what had occurred. He said. Marketing just kept telling me it was the best we could do, and I don't know the difference. And I call this CFO and anti bridge builder because this language sort of illustrates for me what I see happen when these organizations exist on different sides of the bridge, where they just don't care to try and go understand the other side.

And from his perspective, he was saying this level of acquisition efficiency was the best that we could do. I took their word for it and the business just kept losing money and losing money and losing money until eventually they were almost dead. But because he didn't get curious and go find out, is there better?

He didn't draw boundaries around it. The end result was that the business was in real trouble. And in a text message conversation with the CEO, same brand this is what he said. He said, looking at this chart, it's amazing. We are still in business and have been profitable all but one year. I say, I agree.

It's because you have had so many customers to offset it. Never would have worked if you were smaller, says man, 2020 and 2021 were the golden era, wasn't it? And I, this is funny when people refer to this, I hear this language a lot is like the era of zero percent interest rates and COVID was the golden era.

But I'll often refer to it as it was fake. It was, it was artificial demand created by a set of circumstances that no longer exist. Retail literally shut down, he says, totally a black swan event that will probably never happen again. And so this realization that the business is coming to about the state that they're presently in and the changes that they have to make Are all deeply embedded in this connection between bringing to light the inefficiency of their new customer acquisition and marketing and its impact on the P& L, its impact on their profitability and ultimately their cash.

And while this business was lucky enough to encounter us and folks that helped them to stop the splitting and make adjustments, the reality is for our industry, many have not. And so we've seen over the last 18 months, a wave of different bankruptcies and shutdowns and layoffs. And it's been a very challenging past 12 months for our industry, because this whole construct that many of these businesses were built on no longer exists and the business model is broken.

And the reality is it's not getting easier. It's actually continuing to get harder. The primary cost center for most of these businesses is related to their cost of goods. Or their marketing dollars and both are under margin pressure. We know that there are pressures coming in to many of these businesses related to their cost of goods in the form of tariffs, marketing efficiencies continue to be under pressure.

And unlike some industries where AI may create this massive boon on the leverage of of labor, e commerce is a pretty labor light business. It doesn't have a lot to be gained from gaining a ton of efficiencies there. But the reality is that there is just a pending greater pressure. So what this all means is that absent the availability of capital, so there's no more venture dollars in our space, there's still an incredibly high cost of debt and the financing we've seen.

Not only have we seen the brands experience this this bankruptcy and shutdown, we've seen this from some of the key lenders in the space. The access to capital has basically dried up entirely for these brands. And what that means is that they now have to self fund growth. They have to drive their own operating income into cash flow that allows them to buy the next tranche of inventory to go out and purchase more product and to fund their own growth.

This changes the operating principle of businesses. And this is where really you guys can is that when we started this business over a decade ago at CTC for the first, let's say eight years leading up through the middle of COVID. The operate, the modus operandi, the business objective that we were hired to achieve that the business measured itself in was revenue.

Then suddenly in the middle of 2022, it began to shift. All of a sudden there was this immense focus on profit and EBITDA and operating income and moving down the P and L from the top line to the bottom. But now we've actually gone further. Now, as we look out into 2025, the ability to actually generate cash, free cash flow, operating cash that you can go out and use to grow the business has become more and more the topic du jour with our customers.

More often than ever before, the conversation about revenue has been let go of. Many brands are realizing that they're going to have to take a step back in their top line revenue growth. They've even moved from just the consideration of profit to actually now considering how does my balance sheet play into my paid media strategy.

Right? Because one of the other dynamics that played out during this time was that inventory purchasing was done on the basis of an expectation of growth that never showed up. And so all of a sudden you had all this excess inventory on your balance sheet. You had to figure out how to turn that back into cash.

How does that relate to the P and L and this connection between all three financial documents that you all are so well aware of now began to inform media strategy and marketing. And what we know about cashflow generation is it's more than anything else. It's an exercise in financial excellence is that in a moment.

Where you have to generate free cash flow, you have to deeply and intimately understand every part of your business financially and what are the impositions on that cash. What is actually preventing you from making your bank account grow? And there are a lot of complexities to this that most brand owners and operators are not clear on.

The level of financial education in our space is what I call necessarily low. What do I mean by that? I mean that for 10 years it didn't need to be high. Is that you could get away with focusing on revenue because revenue was actually a proxy for bank account growth. If you grew revenue, it was mostly profitable and you could grow that, or there was an availability of capital from either equity financing that you had done or debt.

And so you didn't have to build this level of sophistication beyond that. But now all of a sudden that's changed is that the expectation for education is really high. What that means is that there's a gap between the present state of understanding in the market and you all. And that gap that gap between your level of sophistication and the market's level of sophistication is the opportunity for service provider.

People ask me all the time if I get worried about technological innovation being a threat to us as service providers. And I always say no, no, no, no, not at all. Technology. Innovation actually widens the gap between an expert's knowledge. And the market's knowledge because the new tool becomes harder to learn.

It becomes another step. And so right now, this gap is your opportunity, and this is a unique opportunity in particular for a specific kind of finance firm. And I want to, I want to make this point, which is that I think that this creates a unique opportunity for marketing firms like me who understand finance and for finance firms who understand marketing.

And while I'm going to concede that there are a lot of ways to become a purple cow, that you could come up with all sorts of ways to differentiate yourself as accountants. In e commerce, the bulk of people's revenue, the single largest line item. It's right up there. It's either product costs or it's marketing.

And in most cases for a lot of e commerce brands in the eight figure range, marketing is the single largest line item on their P and L. It's the largest cost center in the entirety of the business. And rightfully so, because it is the growth engine for the brand. And so to understand intimately the efficacy of that line item is so critical to your success in an easy way to differentiate yourself from your peers.

The same thing I, I chose. Which was that if I, as a marketing firm can move out of talking about proxy metrics that my industry loves, ROAS and CTR and impressions and CPM and all the things that most of my peers were talking about, and I could change my language to be more like yours. And I could talk to brand owners about what they actually cared about, about cash, about.

The op EBITDA about understanding the actual financial outcomes of a business, shareholder value, the kinds of things that me as a business owner who owns my own business care about, I could meet them in that language. I could differentiate myself from my peer. So bring that unique perspective gained from years of providing accurate financial commerce clients to your audience.

You understand all three financial statements. Now, if you can connect to how those affect the decision makings on the marketing side and be able to actually have a point of view on something like marketing measurement or efficiency of ad dollars or things like that, or new customer CAC, if you could understand the language of marketing similar in the way that I have, you could differentiate yourself.

And I want to show you practically how we've done this and what the impact has been for us. So, we do this primarily through content. So one of the things that we try to do is we've adopted this principle of developing original series. So as if we were creating shows for Netflix. And when I say original series, I want to be clear that these are not like crazy big budget productions.

This is me with a PowerPoint and loom doing 30 minute videos on various topics. You can see this series Bridges was sort of the kickoff of this. And what I want to call out, like, these videos don't have millions of views, right? That's not the game we're in. We're not actually in the business of trying to get broad distribution.

We're trying to get the right distribution to a few people. In my business, my customers are worth hundreds of thousands of dollars. I don't need a million customers. I need 10. I need 15. I need 20. And then my business can grow exponentially. So we do this through content. We also do this through social.

So you'll see that this identity that we started to adopt for ourselves, this idea that we were going to be the marketing firm that understands finance better than everybody else. You'll notice my Twitter profile here says your CFO's favorite agency. So we've sort of gone all in on this idea that the distinction of CTC versus the rest of the world is that we take.

Turn marketing tactics into financial outcomes. Oddly enough, we take over responsibility for FP& A for every one of my customers. We are literally responsible for their financial planning and budgeting which is a very odd expectation for agencies to provide on the marketing side. But the reality is the whole business function is, comes, flows out of the financial objectives of the organization.

And if those are set unrealistically, the whole thing kind of falls apart. And so we would take these ideas and I started to interview CFOs and build relationships between and do these sit downs between a head of marketing and a head of finance and talking about, hey, what does it look like to work together?

What is the common language? What are the things that you guys create conflict over? Do you think you're spending too much or too little in advertising and host these dialogues about this? And then we would get out there and we'd talk about this all the time in our, my social content, to what we're posting on LinkedIn, to what we're developing a web series about.

We're all around this idea that we were going to differentiate ourselves around the unification of these two ideas. And we do this also by collaborating with partners, right? So why am I here with A2X? Well, it's because A2X represents authority on this topic. And so if I can offer something into their community, which is to say that if accountants Can find our material and content valuable.

Well, you, you all have a lot of voice and authority into your customers that if you see the marketing running wild, well, who might come to mind, right? And if we're able to trade on the equity and the value of what A2X has created as being somebody who has authority and financial topics and see our name next to theirs, we can begin to gain credibility around this topic.

And so we do this in all sorts of different ways. And again, creating consistent new content series where we find partnership and sponsorship, where they pair with distribution. We pair with events and we go out and we build around this message. Here's another example. We partner with Zamp as an example of a partner who's a sales tax firm.

And we bring together the operations and finance manager for HexCloud with their head of growth. And we have these dialogues and ongoing conversations. All the time. And again, this is scrappy and consistent. Our budget for this is very minimal. We're not a huge business. We're a small service provider.

And so what we don't actually depend on the idea is having to be always published or polished in this way, but I would give you all freedom to do is just to begin to publish just to talk about topics and to move beyond just thinking about topics related to accounting, but to move and understand that the experience of the brand owners, it relates to their biggest concern.

In finance are in in marketing. So again, you can see this is me drawing on a whiteboard, taking a picture, talking about it. I set up a camera and I just verbally go. And a lot of this is just getting comfortable with the repetitions of just speaking in these areas and again, as much as you can to come across and sit with the marketers to build reputation as somebody who understands this core line item on the P and L.

So not only are you going to present accurate financials, that is the baseline expectation of your industry, no accountant. And the other thing I'll tell you about, like this idea of accuracy, one of the problems with accuracy is that there's a ceiling to it. You can only be 100 percent accurate in terms of the pace of what you do, your financials, the speed at which you're able to deliver it.

There are only so many days after the close of the month that you can deliver deliver accurate financial statements. And the timing between the close of the month and the fourth day of the fifth day of the seventh day, it's a marginal value gain at best to the provider. But to actually be able to provide insight and impact to the actual business and the relationship between how all of these three financial statements exist and to understand that in this market moment, cash itself is the driving lever for most of these brands is critical.

And to understand how cash conversion cycle impacts that and how their media dollars play into that is so, so important. And so all of this is back laid by the reality that the customers that we serve are struggling. This is the average revenue per store. So we have a data partnership. We do call the D.

1. Index. It's a partnership from three different providers ourself. There is which is a large data aggregator and no commerce. Where we track performance of about there's over like 12 billion of GMV in this data set, and we've been looking at revenue growth by year and to further highlight the market, the macro moment that we're in, you can see that COVID was this explosive top line revenue growth where the last three years have seen retracement of that growth rate.

There's still growth. It's just much smaller. And here's the dirty little secret at 10 percent revenue growth on the top line. These brands have about a median EBITDA of about 8%. That means they're barely able to grow cash at this level. And so this is the environment that we serve. But yet, despite that, and this is why I say this is our macro moment, is that if this was the growth rate for brands during COVID, and this is their growth rate now, where, how do we as service providers not get stuck on the same retracement?

And the answer is that we have to actually figure out how to create product market fit for customers to gain share in this moment. And that's exactly what this did for CTC, is that we turned our new customer revenue by month to be explosive in the last two years. So we have outpaced our growth of COVID by almost three X in every category.

You can see our new customer revenue by month for 2024 in red, 2023 in blue. And we have grown immensely during this period. And not only have we done this in growth, we've actually done it by, well, also simultaneously driving our marketing department net costs down because this content that I talk about creating, we have sponsors.

I have a podcast where we have sponsors for those podcasts. When we go out and do those original series, we find partners like A2X and others. To cope, sponsor that content with us, and we've been able to offset the entirety of our marketing department costs, which functionally create means that the cost to acquire a customer for us is actually negative.

We actually make money in the process of acquiring customers. So we've driven more demand. At less net marketing costs at a negative cost per acquisition and the overall operating income of the business. So the efficiency of the entire service business, we've had 50 percent top line revenue growth while expanding our net income from 15 to 30%.

And it's been all about one thing, product market fit. What is the status of the market that we serve from 2023 to 2024? It was all about financial diligence, generating profit, being able to produce free cash and how marketing relates to that. And creating our message to meet that moment, to distinguish ourselves from our peers and be able to deliver that message in the mediums that people care about, Twitter and LinkedIn and YouTube to small targeted audiences, not caring about broad distribution and generalizing the content, getting really boring and deep.

If you go watch bridges, this is 30 minutes of me pulling up spreadsheets. This is not vertical videos, Tik TOK dancing, snap cuts. This is long form, deep content. That meets the market and the moment of where people are at. And it's transformed our business. We've had way more growth in the last two years than we ever did during COVID despite the fact that the market is substantially worse for the customers that we serve.

And that's why I say that this moment for us as financial service providers, I'm going to lump myself in with you is distinct. Is that right now you are needed more than ever before you what you offer the level of intelligence relative to the market's understanding that gap. I want to illustrate again is your opportunity.

And you have a unique perspective to share with your audience and an ability to differentiate from your competitors. Now I recognize we're sitting in a room with 30 of you, which means that if you all picked it up and ran with it, it wouldn't be too distinct, but you won't. Most of the people here will do nothing.

They will do no different thing than they're doing today. But for some of you, some of you are going to decide to come across that bridge. You're going to recognize that if you're going to help an e commerce brand with their finances, you have to have a point of view on marketing. You cannot simply report back to them a growing percentage of marketing, a balance sheet, that's upside down cash.

That's just being financed out at worse and worse rates. And to understand how the efficacy of their advertising works and to find commonalities amongst the businesses that you do, like so much of our work as a, as a service provider in our industry, my, my opinion is that like our aggregate knowledge, our ability to see across so many different things and recognize the traits of what is true, what is possible for the brands that are successful for where they are, the outliers, who are they and how are they accomplishing it?

And to bring that knowledge to bear on behalf of your customers is where you have so much value. And so I would just encourage you to think about what are little ways that you could do this. What are ways that you could step across the aisle to step across the bridge and to think about how you could speak with authority.

How could you become the purple accountant? How do you help yourself to stand out in this moment and to recognize that despite the surrounding negativity that we hear about what's occurring is that this moment for us The experts are here to guide people through hardship are more valuable than ever before, and that this is our tailwind.

When things are great. Everyone's an expert when things are hard to expertise creates opportunity. And so I would just encourage you to use this moment to consider yourself to go look, go right now, look at your website, look at the websites of the other 30 people next to you and say, if I took the name off of it, could I tell who is who, but I'd be able to recognize based on the language, the words, the message, the unique value proposition, who was who.

Your linked in profile. How do you position yourself? What is the distinction that's going to make you memorable? And is it possibly the idea that maybe you understand attribution? Maybe you understand incrementality. Maybe you understand the best channels to allocate ad dollars so that balance sheets get better, so that cash flow forecasts get better, so that income statements get better.

Is that possible? Something to consider.