We’ve talked to lots of marketers marketing to marketers in this series, but how can we as marketers build a beloved brand in an industry that isn’t our own? Today, we talk to the SVP of Marketing at Toast, Kevin Hamilton, to explore what it takes to earn trust in a new community, as they’ve done with restaurant owners. We touch on hiring, partnerships, events, and other approaches, and we reflect on how to grow an exceptional brand given these unique challenges.
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Jay Acunzo: Over the course of this exploration that we’ve been on together in Exceptions, we’ve talked about several different brands who have created a kind of platform for their audiences. They don’t just sell products, they don’t just help educate you about a specific set of tasks related to their products, they want to elevate your entire career. These companies range from InVision, which serves product designers, to Help Scout, which serves customer service teams, to First Round Capital, which helps tech entrepreneurs. But in all these cases, one thing was present in all those stories that isn’t always present at every company. Those teams are of the community. They don’t have to do much to understand their customers or really embed themselves in the community they came from and still are working in that same group.
InVision serves designers building software products. They’re a software company. Help Scout helps customer service teams. They both have a customer service team and believe in providing unbelievable customer service. First Round is famously staffed by former tech company founders who now help other founders with their educational opportunities, introductions, and yeah, their investment dollars. I’m in that camp too. I am a marketer helping other marketers on this show, and in a lot of the things that I do. In my organization, Marketing Showrunners, in everything I do, I’m a marketer helping other marketers. But in B to B, sometimes that first B, in other words, you, is really different than the second B, your customers. So how do you serve them well then? How do you prove yourself in a community that you’re not authentically from to earn trust and genuinely start to help people that might see you as a bit of an outsider? That’s what we explore today.
Welcome to Exceptions, the show about why brand matters more than ever in B to B. I’m your host, Jay Acunzo. I’m the author of the book, Break the Wheel, and the founder of Marketing Showrunners, which teaches marketers to make shows like this. To bring you this show, I’ve partnered with Drift across 20 different episodes. This 20-part series that we’re creating. Drift provides a platform of products to help your sales and marketing teams connect right away with potential customers who arrive on your site because right away, in other words now, is when your prospects actually want information. They don’t want to wait for you to get back to them after they fill out a big form on the website. They want to connect right now. So in that way, Drift believes in a better, more helpful way that businesses should buy from other businesses. In other words, they believe in experience and brand. So together, we’re making this show.
Today, we explore a company called Toast. The Boston based tech giant provides a restaurant management and point-of-sale system built on the Android operating system. Restaurant employees can use Toast tablets to clock in, enter orders to the bar or the kitchen, take online deliveries, and ring up bills at the end of a dining experience, among many other things. The Toast software tracks a lot of crucial things for restaurant owners, like trends and analytics and differences in shifts between servers and all kinds of things. One example that I personally love. Say a menu item is 86-ed as they say in the biz, in other words, it’s out, they don’t have it anymore. An employee, a server, can mark their last order of that item in Toast, and the rest of the staff instantly becomes aware. There’s no need for the next server to then place an order for an excited patron only to have them learn the truth, that they’re actually out of that item, and trudge back to the soon to be sad customer. Just one really small example of what a cohesive operating system for a restaurant allows for.
As a company, Toast has raised over $500 million in VC. They have over 14,000 employees globally, and you can find restaurants using Toast’s products in over 230 cities worldwide. Not surprisingly, Forbes recently ranked Toast 29th on their annual Cloud 100. For this episode, I talk to Kevin Hamilton, Toast’s SVP of Marketing, to dig into some of the challenges that they faced building their brand.
This is not a new place where people … it’s not total green field. You’re breaking into a space that’s been around for a little bit, so what did you learn as an entrant into this industry about just the legacy and what you have to grapple with, like, the market understanding as well?
Kevin Hamilton: Yeah. No, I think the thing that’s interesting about Toast, Toast was founded in 2011, and it’s kind of classic story of a pivot into a new space in that Toast was originally started as a consumer payments app. The idea was to make it easier for individuals going to a restaurant to split a check, and this was 2011, 2012. And what the team quickly learned was just how painful it was to integrate with legacy point-of-sale systems. The restaurant industry is probably 10 to 15 years behind other industries in terms of adopting cloud technology, and at the time, in 2011, the vast majority of point-of-sale systems were on Prim systems, couple of large players, MICROS and Aloha, and many of these systems relied on a server in the back office. They weren’t connected to the internet.
So as our founders discovered, it was really hard to scale a consumer payments app in 2011, 2012, but they also discovered that restaurateurs in general were highly dissatisfied with their point-of-sale systems. They had some of the lowest NPS of many products, so it really caused them to take a look at where they were, adjust course, and build a truly cloud-based point-of-sale platform that ran on newer mobile operating system.
Jay: So we, throughout the series, there’s a lot of marketers marketing to marketers, right? This is a show listened to by marketers, so it’s no surprise there, but you’re in a space where you have a team of marketers, and a growing team at that, which is not marketing to people who are themselves. And in addition, you’re also trying to reach people who are either not digitally savvy or they just so happen to spend most of their time off digital tools, so they’re not on all these social networks and all these channels where most of us in marketing today find it natural to do our work and reach other people. So talk to me about the differences between what most people think of as modern marketing and how you have to serve your audience.
Kevin: I think first and foremost, I think as marketers, sometimes we might find it as a constraint to focus on a single industry. What we talk about in our team is it’s actually super liberating to go super deep on an industry where you can really take existing ideas, existing technology, and just make it that much better.
Jay: Why liberating? Why did you use that word?
Kevin: Because you can just go and get in the persona of that customer and go and iterate on what might be existing solutions and push them forward. Not from a marketing perspective, really from a product and customer success perspective as well. The restaurant industry, it’s a massive industry. There are a million restaurants in the US, there’s about 700,000 that Toast actively markets to today.
Jay: Wait, 700,000? Not 7,000. 700,000.
Kevin: Yeah. If you think about the National Restaurant Association would tell you there’s about a million restaurants in the US. There are some massive enterprises there as well, like a McDonald’s or a Starbucks, but the vast majority are single to multi-location restaurants. They’re businesses started by entrepreneurs and creators who had a passion about food and experiences, and it’s a really invigorating industry to sell into. It’s also a major employer, right? There are about 15 million individuals who work in the restaurant industry today, and for a lot of us, I think the restaurant industry is central experience to our lives. You think about today, nearly 50% of every dollar spent on food is spent outside the home. Probably higher for millennials and Gen-Z’s. You look at third party delivery and the like. So it has a big impact on many of our lives. You think about some of the experiences. Maybe when you celebrated your engagement or when you found out you were having a boy or a girl, you probably went out and had a nice dinner around it. So it’s really marketing to the local community table of a lot of communities as well.
Jay: What’s something that you guys find successful for your marketers to do, marketing or sales, that at most software companies selling into large enterprises that are … everything’s online, that they don’t have to do or wouldn’t find so successful?
Kevin: You know, I think what’s fascinating about how marketing has evolved at Toast, and I think one of the things that kind of drives our strategy around our culture and our people as well, the industry is an industry that is very welcoming, especially to those who understand and can go deep on the challenges facing a restaurateur, and so from day one, we’ve actually always recruited for that, in that 65% of the employees at Toast have actually worked in the restaurant industry. I grew up in New Orleans, Louisiana, I worked as a bus boy, a waiter, a server, a bartender, and then I actually helped open a restaurant with Marriott in Washington DC early in my career.
Jay: Yeah, I think the world would be better if everybody had a stint, it was like mandatory, you had to work at a restaurant at some point. I think my second job out of school or in high school, I worked at a seafood restaurant, where the head chef and the owner, every guy they hired was either related to them, therefore was a waiter or a bartender, or not related to them and went into the kitchen to be a dishwasher. So I got to work with people of incredible diversity, lots of different backgrounds, I ate a lot of humble pie, because you’re washing dishes, and you leave at the end of the day as a high school boy trying to strut your stuff all the time, and then you go hang out with your friends and you’re sweaty and smell like fish. I had a line of cats following me around my neighborhood when I was a kid.
Kevin: There’s no doubt we would all be a lot nicer to each other. I started … I remember waiting tables at Mulate’s on Convention Center Boulevard, a creole restaurant, where, as a server, you also had to teach the individuals at your table how to do a Cajun Two-Step with live music in the background. So you danced for your tips. But I think as a marketing team and also as a sales team, it’s such a hyper local industry, and the whole adage of nothing interesting happens in the office is super important in our industry. The channels are different, but not as different as you would expect. Restaurateurs, they’re not spending a ton of time checking email, but they’re actively on social platforms because of the way, the transition that’s happening in the consumer base in terms of how individuals think about and select where they’re going to dinner, right? You don’t need to go to a restaurant and see somebody taking a picture of their food to post it on Instagram to know that the restaurant community is going to spend a lot more time on Facebook, Instagram, other social channels.
They also have an insatiable appetite for content. Correctly structured in the right way. So as a marketing organization, we talk a lot about tools, templates, and insights that improve restaurateur performance, and then an interest in regionalization and breaking news, so a big area of focus for us is we think about the evolution of our content strategies around how do we not only bring restaurateurs together in local communities and activate those communities, but also help them stay abreast of what’s taking place, some of the challenges around minimum wage laws in California and how to navigate those.
Jay: How do you ingratiate yourself into a community and activate that as a community that Toast is a part of and helps shepherd and lead when your team maybe came out of that community, but a while ago, right? It’s not like people are on the marketing team and then moonlighting as a bartender or restaurateur, so I’m just going to go out on a limb here and say as a venture funded tech company, you have a lot of people who are young digital natives, and can appreciate and have worked in the restaurant industry, but don’t really identify themselves as restaurateurs. But you talked to me before the show about the importance of community, so how do you, I guess, add value and show them that, actually yeah, we’re sort of a different type of company, but we’re really of your world?
Kevin: As marketers, we have to be careful sometimes in not taking credit for things that others in the organization have done, and our product and customer success teams have done an incredible job of taking what may have been an acceptable solution and advancing that idea forward a generation or two. A couple of good examples. If you’ve spent time in Europe or even in Canada, if you’ve gone up to Toronto recently, pay at the table is a pretty common thing, right? They’ll come to you with a credit card brick and they’ll take your payment.
Toast took that a couple of steps forward, and it’s had a material impact on the restaurant community in that we took what was this legacy offering of paying with your credit card at the table and re-imagined it into not only pay at the table, but how could we create this experience, servers can spend more time at the table, less time in the kitchen, take an order on a handheld, fire it directly to the kitchen, receive a notification from the kitchen when that order is ready. You can pay at the table and also provide feedback that can be acted on almost instantly because if you provide negative feedback, a manager on duty would receive a text message. And as a marketer, it’s incumbent on us to help them unpack not only how the technology is changing, but how they can rethink their operations to really take advantage of the technology.
Jay: What’s the first foray into a single restaurateur’s relationship with Toast? I think there’s … when I worked in VC, we would invest in some companies who were selling into mainstream businesses, and one of their biggest challenges, and the thing I just grasp at, because I came out of all SAS companies selling to other SAS companies, and I was like, oh, just publish helpful content online, they will find you. Go on social media, have a presence, be human, care about the community, and those entrepreneurs would be like, “Yeah, it doesn’t work for us because all of our customers are spending time offline.” So how would one restaurateur initially discover Toast?
Kevin: I think a couple different ways. Content is the gateway for Toast. The Toast restaurant management blog has over 40,000 subscribers, a couple million unique views per year. They’re engaging with us there. But also restaurateurs eat at other restaurants, so oftentimes, they may experience Toast for the first time in a local restaurant that they go to. The other is they network with each other. So there’s a high instance of referral volume as our network grows and as we scale. Because we’ve got a great product and we also invest very heavily in customer success, we generate a lot of goodwill in the community that comes back to us in the form of referrals.
Jay: When there’s that trust through word of mouth, I think people often rely on word of mouth as an afterthought, it’s such a big driver of everything in business. B to B, B to C, doesn’t matter. And people think, “Okay, we’re just going to put out really great experiences, really great product, and word of mouth will just kind of happen.” And I think it’s kind of a mistake because you’re relying on happenstance for one of the biggest drivers of your business. Are there things that you do proactively from, I don’t know, I’m just going to make this up, could be swag, could be the way the product is designed and looks. How are you proactively building a great experience so that one restaurateur is actually like, “Oh yeah. Actually, Toast is a great experience.” To another restaurateur?
Kevin: I think we’re doing it in a couple areas. One is definitely product. Last year, we introduced a new mobile point-of-sale called Toast Go that’s a handheld built specifically for the restaurant industry, and restaurateurs are going to other restaurants, they’re engaging with this, especially when they check out at the restaurant, they go through the payment process and have an opportunity to provide feedback to that restaurateur about their experience. So that’s one instance that’s very product heavy. Another is we often talk about, in terms of our brand, this idea of creating a movement around this, what is a very stayed and old industry.
We joked earlier, NCR stands for National Cash Register, that was a company founded in 1884, so for us, when we think about brand and brand awareness, it’s how can we create a movement beyond just the technology? So there’s a lot of … we invest pretty heavily in the field marketing and trade show side of Toast, creating experiences we call … we introduced the new regional road show last year called Food for Thought that was all about connecting and engaging the restaurant community. It was initially designed and conceived as an event for community activation, getting Toast customers together to share best practices and talk about challenges, and what we found was about 40% of the attendees were customers, 60% were prospects, and over the course of eight events in eight cities, registration was in the thousands, attendance was around a thousand, so it really created an opportunity for us to personalize and humanize Toast as a brand for restaurateurs.
Jay: I think one of the things that I’ve uncovered from our chat so far, that it kind of applies across the board, when people think about providing a great brand experience, whether that’s the content, the product, the community feel, marketers, especially because of the digital tools we have access to today have a tendency to ask, and sometimes it’s the leaders, sometimes it’s the limiting behavior from the teams, but what’s the ROI of this thing? And when they ask that, they’re not thinking longer term, they’re thinking, “So, we did this thing. How many leads or maybe customers did that yield this month or this quarter?” It’s like every channel, every tactic, every approach has to be, for some reason, direct response.
And my analogy is always like, a healthy basketball team doesn’t have shooters across the roster. Some people set up the shooter. Some people set up the person who sets up the shooter. So having a well-rounded winning team is to have all these complementary pieces that fit together, but what’s difficult is you can’t really measure some of those complementary brand pieces A to B. There’s more nuance to that. And I feel like with Toast and your team, maybe that’s more compounded because you’re doing a lot of offline stuff, so perhaps somebody encounters you online and then agrees to come to an event offline, or perhaps they’ve encountered you offline through maybe another restaurateur or what have you, somebody who walked into their restaurant, and then they go online and find you through search. And it can be really difficult to track all this stuff, so how do you … what would you say to other marketing leaders or teams who struggle with this, and what do you guys to do reconcile that? Like, “You know what? Sometimes you can’t just tie it to a direct response goal.”?
Kevin: I would go back a step further first. We talked very early on about the idea that a thing that can be liberating as a marketer is going super deep on an industry, like Toast has, right? We are technology built specifically for restaurants, and implicit in that is really understanding the entire community that you support and engage. Restaurateurs are a key component of that, employees of restaurants are a key component of that. We talked about around a million restaurants in the US, about 15 million employees. Guests are a component of that, and then finally, the ecosystem or community that supports that and really embracing that ecosystem.
Jay: Hey, it’s me again, narrator Jay, and one of the things that I just wanted to call out that I found so interesting about talking to Kevin was how important partnerships were for the growth of the Toast brand and platform. Not only is it a tactic for them, it’s sort of a philosophy. They want to be true partners not only to their customers, but to everybody in the industry, a kind of connecting force among all these organizations and the entire industry, kind of like-
Kevin: NATO for the restaurant industry, right? And when your partners, be they technology partners, could be local consultants, it could be food service distributor, when they know that your intent and your focus is on pushing the industry forward and making it better, and that could be through product, through an agile process that pushes new features every month, which is something restaurateurs aren’t accustomed to from some of the legacy providers. It could also be the content, tools, templates, insights to improve restaurant performance, but it can also be how you activate that community at a personal face to face level through field events. And I think as marketers, sometimes you can get distracted with a framework, right? Like, the serious decisions campaign framework can go overweight in a specific area, like demand generation, and really focus on MQLs, but just as important, and you can’t lose sight of, is that reputation component of what you’re doing and thinking about how you’re engaging the different stakeholders within your community. And then measuring it. To a certain extent, it’s a little softer, right? You think about brand awareness and sentiment as opposed to MQLs, demos, ops, deals.
Jay: Is there a way that you’re trying to encourage your team to be data informed when they do those kinds of things? Is it surveys, or?
Kevin: It’s surveys.
Jay: Yeah. I feel like that’s such an underutilized tactic. My trade is making shows, and I say shows strategically because I’ve both made and now I’m teaching both audio and video, it just became such a big thing that brands are doing, which I think aligns with this shift that marketing has become more about the people who stay. Not just the people who arrive. Just like software companies think about user retention and all the great stuff that does to the business. My thesis here is that we’re entering this era where if you can increase the lifetime value of your audience by keeping them around, by engendering trust, by activating the community as you keep saying, you increase the lifetime value of the audience, and then you lower your customer acquisition cost because word of mouth starts to kick in, right? And-
Jay: So when I talk about making shows as a great vehicle to do those things, to hold attention, et cetera, et cetera, the question of measurement always comes up, and it’s like, “Okay, do we look at views or shares or downloads? Do we look at email subscribers?” And one of the things that I think the most successful brands who make shows do is they, surprise, surprise, talk to their audience. And you can do that one to one, you can do that one to many, those are calls and events and stuff like that, but you can also send surveys, which I think is this wildly underused tactic to gain firsthand insights and benchmarks and all these things. Is that something you’re doing? Are you like, “Okay, these people have attended an event, have read some content, have done all these things that aren’t direct response, and because they hit this tripwire of eight interactions with us, all of a sudden, they’re more likely to buy.”? How granular are you getting with surveys and audience insights?
Kevin: I think what you’re getting at is something we talk about a lot is this idea of the long tail demand?
Kevin: And one of the things that we hear a lot at our event series is we’ll actually bump into restaurateurs who, the reason they’re with Toast is two or three years ago, they had an idea that they wanted to start a restaurant, they probably bumped into some of our content through SEO around restaurant business plan template, food cost calculator, how to optimize menu costs, and they started engaging with us at such an early day, long before we would even talk to them from a sales and marketing perspective, but we were nurturing them along that journey that they’re now showing up as an MQL or a customer.
Jay: Isn’t it funny how that works? It’s like logically of course that would work. Logically that would happen, and we get too smart for ourselves sometimes. I don’t know.
Kevin: It’s funny. I think back very early in my career, I started at a company called Corporate Executive Board, where we actually didn’t have a marketing organization, but what we produced was content, and how you would schedule a meeting was sending content to an executive about a specific topic and finally getting them to have a conversation with you after two to three touches. And really all we’re doing on a large scale from a marketing perspective is figuring out ways to create those journeys, nurture those buyers along a path, working very closely with R&D and customer success around the customer experience.
Jay: When you think about the challenges that marketers face, and I feel like coming out of tech, as I have, I remember distinctly talking to a few software developers about types of companies that they were looking to join. Again, this was back in my VC days, where talent would go to a VC and be like, “I’m looking for my next adventure.” One of the through lines of developers looking for their next jobs would be to say, “I’m interested in really interesting and complex technical challenges.” And then I reflect on my experience in marketing, where a lot of marketers try to boil down what we do to a simple list of tips and tricks, or the one simple secret, or the hack, but I actually think really great marketers who lead fulfilling careers, just like software developers, they pursue interesting marketing challenges because they want to feel invigorated and invested in a career. So I’m curious, at your company and in your specific sector, we’ve talked a lot about the community and reaching those restaurateurs, what are some of the interesting marketing challenges that make it a fulfilling place to work?
Kevin: I think one is going back to the theme around community, is really putting yourself in the shoes of a restaurateur and understanding just what a dynamic and complex environment they’re working in. If you think about a restaurant, it really is a retail storefront and a manufacturing facility combined and put in a high rent district. It’s a challenging industry. Profit margins are around five percent, staff turnover is around 73%. It’s an industry that’s eager for engagement and support. I think the other thing I think about that makes life exciting at Toast regardless of what team you’re on, increasingly we spend a lot of time at restaurants, just if you look at the amount of money spent inside the home versus outside the home on food, it’s more than 50% is spent outside the home today, and being able to see your product in action and engage with the community using it on a random Friday night when you go out to dinner is a pretty cool experience for a marketer. It’s rare that you get to get that close to the community and the customer on a consistent basis.
Jay: When we think about brand on the show, we’ve defined it … we’ve hunted for a definition, I think we’ve landed in a good place, which is brand is how others feel about the collective behavior of your people. So let me just unpack that quick, both for you and also the people listening who haven’t caught that before, and then I have a quick question about Toast’s brand. How others feel. That could be the prospects, the customers, current or future employees, investors, partners, it’s how others, and we use others importantly, specifically, feel because it’s how they experience you. It’s their opinion of you, it’s the emotions they get. And so obviously that goes way beyond just, it’s the logo. The classic misconception about brand.
And then the collective behavior of your people. What we’ve realized in talking to all these executives and leaders in marketing who are working for companies that care about brand is company and brand, these are just terms that are like empty containers until you fill them with a team doing the work, and that team creates the experience and the feeling in the brand. So when you think about what you are trying to accomplish and build at Toast, how does proactively building a brand that people feel a certain way towards, how does that make all the different minutia of the day to day marketing easier or better?
Kevin: One thing that’s been powerful that I’ve enjoyed in my time at Toast, we make a conscious decision each year to bring together the team from all over the country to Boston for an event called Kick-Off, where it’s two and a half to three days of going super deep on the restaurant industry, our customer community, and also how our product is evolving, but also classes on wellness and things like that. But the thing that’s most powerful about it is some of the insights you take away from your customer community as they’re on stage speaking to your employee base and activating our community is definitely showing up in the efficiency of other channels, we’ve got really bright people working on these channels, but the performance of paid advertising, the performance of organic, just the growth in website visitors, on page conversion rates, a lot of it is we’ve optimized the website, but I think an additional piece of it is we spent time in eight large communities last year pulling them together, sharing best practices, and sending them out to speak with their peers.
The other piece that is super valuable for us is it’s really easy for a restaurateur to engage with our brand at a restaurant that’s using Toast. So it’s the combination of, I think, humanizing the brand, when you get to a spot where you’re seeing members of your community rep one of our Toast trucker hats on Instagram, on their restaurant feed, talking about their experience at an event, or when you’re seeing servers talk about your product and the impact it’s had on their take home pay through higher tips, that’s when you know your brand investment is paying off.
Jay: Any final little urges to other people to care about customer experience? You clearly seem to be someone who’s on board with that idea, and it’s not just … our job as marketers is not just to transact the world. You’re playing the long game here. For people that are struggling to stay inspired and convince their boss of that or who are on the fence, any little last urges to care about this stuff and why?
Kevin: If your brand at the end of the day is the way you make people feel, going deep on the community you serve and looking for opportunities to optimize that experience, and then really transform the individuals engaging with your brand into megaphones on your behalf. We do a thing every year called The Toasty Awards that is an opportunity for restaurateurs to recognize their teams, and it is incredible the amount of content that they generate to really just go above and beyond and recognize the hard work of the individuals on their teams and the impact they’re having on their restaurants. So I think there’s one component.
Kevin: The other piece around customer experience is it starts with the team outside of marketing. Having passionate leaders and product and founders that are passionate about the customer experience is critically important.
Jay: It’s a simple question to ask, really, if only we would stop and actually think about it. Do you want to serve up the same damn menu as every competitor on the market? Or do you want to serve something refreshing, something others love ordering? In other words, do you want to build a commodity company or will your brand become the exception?
Big thanks to everyone who listens to the show, including you, my friend. As a reminder, we’re kind of going on a bit of a victory lap right now. We’re winding the series down as we head towards 20 episodes. We have two more lined up for you, both of which will dive deep into something we’ve really yet to explore in detail that I think has massive effects on building a brand that customers love. You can explore more of Drift’s podcasts, that’s right, they have a whole network called the Seeking Wisdom Podcast Network, in your podcast feed. Just search for Drift or search for Seeking Wisdom, which is the name of their flagship show. Or maybe you’re interested in the meta stuff about making shows. In other words, how a B to B brand like yours can create a great series for your marketing. If that’s you, I’m publishing everything I’ve learned making Exceptions and about a dozen other shows for brands over on the website MarketingShowrunners.com. Click blog when you arrive. That’s MarketingShowrunners.com/blog. You can join marketers from LinkedIn Shopify, ZenDesk, Red Bull and others who subscribe.
I’m back in two weeks with our penultimate episode. We’re like Game of Thrones here, just hopefully not as disappointing towards the end, and unfortunately, with far fewer dragons. Yeah. Anyways, thanks for listening, and I’ll talk to you next time. Bye-bye.