"My Ad Returns Crashed. Am I Losing My Business?" — Transcript

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1. 0:00A little.
2. 0:02Go for it.
3. 0:03>> Hey, my name is Jason. I'm the technical
4. 0:05founder of Starter School.
5. 0:07We do online courses for tech education
6. 0:10for teenagers.
7. 0:11>> Cool.
8. 0:12>> And
9. 0:14we run a bunch of webinars. Basically,
10. 0:17we're 100% paid ads on Facebook. We have
11. 0:20a direct-to-cart model currently priced
12. 0:22at 297 for a batch of like seven
13. 0:24courses. We do a couple order bumps
14. 0:28and then we have a post-purchase upsell
15. 0:30for 189, which is like everything we
16. 0:32have basically and the thing.
17. 0:35We did about 700
18. 0:37top line in May.
19. 0:39>> Good for you, man.
20. 0:40>> Profit on that was
21. 0:43about two or 300,000 somewhere in there.
22. 0:45But the only reason that was possible
23. 0:46was because the ROAS that we were
24. 0:48getting was like between a two and a
25. 0:50three.
26. 0:50>> Yeah.
27. 0:50>> But since [snorts] then, the ROAS has
28. 0:53dropped a lot closer to a one.
29. 0:55>> Yeah.
30. 0:55>> And we've winded down to about 150k top
31. 0:58line is what we're going to close this
32. 0:59month as.
33. 1:00>> Okay.
34. 1:00>> So, [snorts]
35. 1:01we're on track to lose about 60 grand.
36. 1:03We've got 180 grand in the bank.
37. 1:05>> All right.
38. 1:05>> And one of the things that we've learned
39. 1:07from watching Jason Fladlien and your
40. 1:09videos and all kinds of research is that
41. 1:11we need a high ticket offer.
42. 1:13>> Mhm.
43. 1:13>> But the only thing we can come up with
44. 1:14high ticket is like this idea of hey,
45. 1:17well, you know, we'll do like a a white
46. 1:19glove like coaching service and maybe
47. 1:20actually really get some hands-on with
48. 1:22these kids.
49. 1:23>> Mhm.
50. 1:23>> Cuz we know that time spent with us is
51. 1:25pretty valuable.
52. 1:26>> Mhm.
53. 1:27>> And so, my question to you is
54. 1:30is that a different arrow? Cuz I know
55. 1:32you tell so many people, "Hey, don't go
56. 1:34off and do this totally different thing,
57. 1:35right? Stick to your main business." Is
58. 1:37that a different arrow? Or how would you
59. 1:40think about this? Should we be offering
60. 1:42something that can be automated as a
61. 1:43higher ticket to fix our problem? Or
62. 1:45should we be really considering this
63. 1:48other manual arrow?
64. 1:49>> Okay. So, first off, congrats. Second
65. 1:52off, sorry about the current situation.
66. 1:55Couple different ways to approach this.
67. 1:56So, one is like if you went from 3x ROAS
68. 1:59last month to 1x ROAS, I would bet that
69. 2:01it's a creative issue, right? We just
70. 2:02need to pump more good creative back out
71. 2:03and you'll be back up. It's not like the
72. 2:05in 30 days the algorithm changed, right?
73. 2:07The other thing, and this is again
74. 2:08technical, is that like we might have to
75. 2:10look at the pixel event because uh you
76. 2:11know, Meta might be optimizing around
77. 2:13something that's lower in the funnel or
78. 2:14not getting the ideal customer. And so,
79. 2:15they found a new pocket of people that
80. 2:16are less likely to purchase.
81. 2:18Um and so, the pixel's getting trained
82. 2:20on the wrong the wrong audience. So,
83. 2:21like that those would be my like first
84. 2:23two gut checks that I would do before
85. 2:24changing the business model, right? Now,
86. 2:27if I were to change the business model,
87. 2:29it really reverse engineers from what
88. 2:30the goal you have for the business is.
89. 2:32Like, there's nothing wrong with having
90. 2:33a business that is had has almost
91. 2:35entirely automated uh delivery.
92. 2:37Um you can add a lot of leverage to the
93. 2:40delivery by just keeping a group and
94. 2:42still selling high ticket, where you
95. 2:43will then uh encounter
96. 2:46uh kind of like an operational
97. 2:48bottleneck will be your sales team, but
98. 2:49it's still going to be pretty high
99. 2:50leverage. So, how many tickets are you
100. 2:51sell When I say tickets, like how many
101. 2:53um
102. 2:54How many how many widgets are you
103. 2:55selling uh per week?
104. 3:00>> Uh it's probably at least between 10 and
105. 3:0450 a day, depending on how well our ads
106. 3:06are ripping.
107. 3:06>> Okay, got it. So, that's fine. So, if I
108. 3:09had like basically if you had call it
109. 3:12three-ish sales guys
110. 3:14that all they did was on the thank you
111. 3:16page after they uh buy buy the
112. 3:19the product, uh they get a complimentary
113. 3:21call it onboarding call, right? You
114. 3:24would be able to set them up for a call
115. 3:26it $5 to $10,000 purchase
116. 3:28um on the back end, and that would
117. 3:30materially change your metrics. The
118. 3:31question is who's making the purchases?
119. 3:33Is it teenagers? Is it Is it parents?
120. 3:37>> Yeah, that's I'm so glad you asked
121. 3:39because I I was dying to ask you this
122. 3:41question, too. So, like
123. 3:43parents, we're advertising mostly to
124. 3:45moms. That's our highest profit cohort.
125. 3:46>> Perfect, [snorts] yeah.
126. 3:47>> Uh between like 32 and 55.
127. 3:49>> Yeah.
128. 3:49>> But, when we sell to the moms, the moms
129. 3:52then go talk to their kids and they're
130. 3:54like, "Hey, I got this really cool
131. 3:56thing. I think you're going to like it."
132. 3:57And then the kids are like, "No, AI uses
133. 3:59too much water. No, AI is this. AI is
134. 4:01that."
135. 4:02So, there's like
136. 4:03>> that what the kids are saying these
137. 4:04days?
138. 4:05>> Yes. Yes.
139. 4:06>> Is it really? Bro, I'm on status right
140. 4:08now.
141. 4:09>> Yes, sir.
142. 4:10>> They're saying the water? Too much
143. 4:11water?
144. 4:13>> You are going to be stuck into the world
145. 4:15of AI whether you like it or not. Every
146. 4:17service you use is going to be using it.
147. 4:19You're going to participate unless you
148. 4:21want to become Amish.
149. 4:22So, like how do we get that across to
150. 4:23the kids, you know?
151. 4:25>> Okay.
152. 4:26Got it. Um
153. 4:28I would say this is that
154. 4:31the much simpler fix to the Okay, so if
155. 4:33I wanted to have the simplest fix
156. 4:35without creating a whole another monster
157. 4:36of a back end, right? In terms of
158. 4:38delivery and sales team and whatnot,
159. 4:39which to be fair, I I'm very good at
160. 4:41that, which is what I built a lot of
161. 4:42businesses around. So, like I can talk
162. 4:44to it at length, but if you've never
163. 4:45done it before, it probably wouldn't be
164. 4:46my first solution set. So, my first
165. 4:48solution set would be the the following
166. 4:50three things. So, number one is I would
167. 4:52make sure the creative is speaking to
168. 4:53the most high-quality avatar, number
169. 4:55one. Number two, look at um
170. 4:58I I don't know if you have this level of
171. 4:59attribution, but um you should be able
172. 5:02to see uh which ads specifically are
173. 5:04generating the highest LTV cohort. So,
174. 5:06the people who are taking the upsell at
175. 5:07$189.
176. 5:10I would want my pixel event not just to
177. 5:11be on the purchase, but ideally on the
178. 5:12purchase post upsell cuz then we can
179. 5:14train the pixel on the best quality
180. 5:15audience. And I um think that your
181. 5:18upsell is likely mispriced, that $189.
182. 5:21Um I think you probably get away with
183. 5:23something that's like $1,500.
184. 5:26Because even if a small percent Yeah,
185. 5:27even if a small percentage of people
186. 5:28take it, it's going to make a much
187. 5:29bigger difference, right? Cuz like
188. 5:30what's your take rate on the $189 right
189. 5:31now?
190. 5:34>> It's pretty good, like 30-40%.
191. 5:36>> Yeah.
192. 5:39Let's say it's Let's say it's a third.
193. 5:41So, it's like you get 70 on top of your
194. 5:43what? Two $297?
195. 5:46So, that's 370-ish average cart?
196. 5:49>> Yeah, the average order value is around
197. 5:52four three to $400.
198. 5:55>> Yeah.
199. 5:56Like, if you have like a $1,500 upsell,
200. 5:58even if you had a 5% conversion on it,
201. 6:00right? Well, 5% would be equivalent, but
202. 6:02if you had a 10% conversion on it, you'd
203. 6:03get 150. It would be something that I
204. 6:05would look at.
205. 6:06Um, and I would just do it as a group
206. 6:08cohort. Like, if I like, you could
207. 6:11probably just test all my other courses
208. 6:13for 1,500 and see what happens. Um, as
209. 6:15option one. Option two is you do all my
210. 6:17other courses plus,
211. 6:19you know, a 12-week accelerated boot
212. 6:21camp on the back that's just purely
213. 6:22one-to-many, you know, one call a week
214. 6:24in a community. That's very light on the
215. 6:26delivery side. Um, and that wouldn't
216. 6:29require you to build a sales team.
217. 6:31Uh, and so, I said in sequence, number
218. 6:32one, more and better creative, ideally
219. 6:35targeted around the customers that have
220. 6:36the highest LTV. Number two, put the
221. 6:37pixel behind the optic rate so that it
222. 6:39still takes 14 days for the pixel to
223. 6:41reset, but that's like I would I would
224. 6:43look at that. Um, the third test I would
225. 6:45run or the third thing I would do is
226. 6:46that I would run
227. 6:47uh, a high-ticket
228. 6:49uh, OTO as my as my immediate thing cuz
229. 6:53that we don't have to build anything
230. 6:54else. And if one, two, and three do not
231. 6:56solve the problem, then I would consider
232. 6:58increasing lifetime gross profit by
233. 7:00adding kind of the heavy stuff, which is
234. 7:02let's add a sales team, let's call all
235. 7:04the customers, let's sell them a five or
236. 7:05$10,000 thing on the back.
237. 7:10>> Thank you so much, man. Appreciate your
238. 7:12insight.
239. 7:12>> No, I appreciate you, dude.
240. 7:14Congratulations on the business. Uh, I
241. 7:15think you had a bad month, man, and I
242. 7:17think that if you just like fix the [ __ ]
243. 7:18and actually make like instead of going
244. 7:20like I'm going to make pure AI ads,
245. 7:22here's a little ask for you. Here's
246. 7:23bonus number five.
247. 7:25Make five ads from scratch manually
248. 7:27yourself that you think are [ __ ]
249. 7:29bangers.
250. 7:33And then do all the other [ __ ] as AI.
251. 7:36But, I think there's there's been this
252. 7:37big loss of like the art of marketing
253. 7:39that's happened because everyone's
254. 7:40AI-ing [ __ ] and it's just
255. 7:42the the quality's still not there.
256. 7:47>> Yeah, cuz I'm like I'm the technical
257. 7:49founder, so I have another
258. 7:50founder. He's doing all the videos and
259. 7:53actual content that actually turns into
260. 7:54the ads.
261. 7:55>> Yeah.
262. 7:56>> But, you know, on my end, I'm like, all
263. 7:58right, I got to nail attribution. So, I
264. 8:00built my own pixel.
265. 8:01>> Yeah.
266. 8:01>> I'm like predicting refunds and upsells
267. 8:04and LTV reporting that back to Facebook.
268. 8:06Like, I'm doing all the things and I'm
269. 8:08pulling out everything I got to make
270. 8:10attribution good.
271. 8:11>> Yeah.
272. 8:11>> Um
273. 8:12so
274. 8:13>> So, I would I would encourage you to not
275. 8:15just throw a bunch of [ __ ] on the wall
276. 8:16and see what sticks, but make a handful
277. 8:18that you actually like, I really think
278. 8:20these will work.
279. 8:21And run those two. Because I'll bet you
280. 8:23if you go for broke on the ads on the
281. 8:25creative, it'll make a significant
282. 8:27difference for your next webinar.
283. 8:31>> All right, thank you so much.
284. 8:32>> Appreciate you, brother. If you like
285. 8:33this video and you're a business owner
286. 8:34who wants to break through your current
287. 8:35revenue ceiling, I distilled every
288. 8:37lesson from scaling 10 businesses past
289. 8:3910 million and three businesses past 100
290. 8:41million into a completely free scaling
291. 8:43road map that I've used to go from zero
292. 8:44to one, zero to 10, and zero to 100
293. 8:46plus. And so, you can click here and you
294. 8:48can check it out. Again, absolutely
295. 8:49free. And since you're a business owner,
296. 8:51I appreciate you and enjoy.