"Why Can't My Agency Scale Past This Point?" — Transcript

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1. 0:00Hello. Hello.
2. 0:00>> Hey Liz, what's up?
3. 0:03>> I'm good. How are you?
4. 0:05>> Excellent. You're on Hermosi hotline.
5. 0:06So, you've got monthly revenue $600,000
6. 0:09a month. Congratulations. Badass.
7. 0:12>> Thank you.
8. 0:13>> You're welcome. Rich you got to buy me
9. 0:14some jewelry from from Junior. All
10. 0:16right.
11. 0:17Okay, ad spend is 150,000 a month. Okay,
12. 0:19a little high there. Got it. All right,
13. 0:22what are your margins right now? They
14. 0:23didn't ask that, but what are your
15. 0:24margins?
16. 0:27>> Well, before we started so I've been
17. 0:29preparing for a million a month for the
18. 0:31last 3 months.
19. 0:33I started building the
20. 0:35fulfillment team.
21. 0:37And in the last 3 months my margins have
22. 0:40been 25%. Okay. But before that
23. 0:44it was 45%.
24. 0:46>> Yeah, got it.
25. 0:46>> In the last 3 months I've been trying to
26. 0:48scale, build a team, try to spend more
27. 0:50on ads, haven't managed.
28. 0:52>> Got it.
29. 0:53>> That's it.
30. 0:54>> Okay, industry is marketing automation.
31. 0:56Okay. So, who's the who's the target?
32. 0:59>> funnels.
33. 1:00>> Of ManyChat funnels. Okay, got it. Thank
34. 1:02you.
35. 1:03Makes it easier for me. Okay. ManyChat
36. 1:05funnels. Okay, great. And then your
37. 1:08offer is
38. 1:09it's for e-commerce brands. Okay, cool.
39. 1:11And they got to be doing over 10,000
40. 1:13sorry, 25,000 dollars a month
41. 1:15in spend. That's their requirements.
42. 1:18Okay.
43. 1:19>> Yes.
44. 1:19>> 25K a month. Okay, what's your what's
45. 1:21your price?
46. 1:24>> 6K a month.
47. 1:25>> 6K a month. Okay.
48. 1:276K a month price. What's churn right
49. 1:29now?
50. 1:33>> Between 5 to 10%.
51. 1:35>> Mhm.
52. 1:36Okay.
53. 1:38Okay, so 5 to 10% churn. Let's just use
54. 1:4010% to keep it simple. So, 60K. What are
55. 1:43what's gross profit on the on the
56. 1:44service of 6K a month?
57. 1:49>> Well, we we're breaking even in month
58. 1:52one and then we're starting to profit in
59. 1:53month two.
60. 1:55>> No, but that that takes into cost of
61. 1:56acquisition. I'm saying what are gross
62. 1:58profits
63. 1:59on the service. So, how much does it
64. 2:00cost you to deliver for a $6,000 a month
65. 2:02customer?
66. 2:06>> About
67. 2:08two 2K. Two to 3K.
68. 2:10>> Okay. Two to 3K. Okay.
69. 2:13Okay. Little bit high, but that's fine.
70. 2:14Okay. Um
71. 2:16COGS. So, cost of goods sold. Okay,
72. 2:18great. So, uh what's the question? How
73. 2:20can I help now that I have context?
74. 2:23>> I've been struggling to double my ad
75. 2:25spend. So, our meta ads break when we
76. 2:28push from 5K a day to 10K a day.
77. 2:31>> Yeah.
78. 2:31>> So, the question is should we instead of
79. 2:35multiple 1K a day campaigns, which might
80. 2:38be competing against each other?
81. 2:40>> They're not. Don't worry about
82. 2:40>> Instead of consolidating everything into
83. 2:42a
84. 2:43>> They're not. Don't worry about that that
85. 2:44that media buying mumbo jumbo. Don't
86. 2:46worry about it. Doesn't matter. Okay.
87. 2:48Keep going. So, you want to scale your
88. 2:50ads and they're not scaling. Okay.
89. 2:53>> Correct.
90. 2:54>> Okay.
91. 2:54>> So, is a
92. 2:55one master campaign that's spending 7 to
93. 2:588K a day with a one single asset in part
94. 3:01of ads is better than multiple 1K a day
95. 3:04campaigns?
96. 3:06>> I have no idea. I actually don't think
97. 3:07it matters.
98. 3:12I I would be real. I don't think I in my
99. 3:13whole my whole life that has never been
100. 3:15the thing that has limited me.
101. 3:18Said differently, I don't think your
102. 3:19bidding strategy is the limitation for
103. 3:20why your business is not getting to a
104. 3:21million dollars a month.
105. 3:26>> Okay.
106. 3:26>> why it's valuable to have properly
107. 3:28identified constraints.
108. 3:29>> Is it is it creative then?
109. 3:30>> Yes. I think it's probably the creative.
110. 3:33Um where are you where are you How are
111. 3:35you thinking through the hooks that
112. 3:36you're choosing?
113. 3:40>> Well, I'm researching um using ChatGPT,
114. 3:43whatever ads I see online, what feels
115. 3:46good,
116. 3:47what what sounds interesting
117. 3:50I wrote those out.
118. 3:51>> Okay. So, I'll tell you I'm going to
119. 3:53guess right now that that's probably the
120. 3:54issue.
121. 3:55So, are you familiar with the five
122. 3:57levels of awareness from uh this is
123. 3:58Eugene Schwartz?
124. 4:02>> Yes, I am.
125. 4:03>> Okay. So, you have to translate those
126. 4:06levels awareness to the types of hooks
127. 4:07that you're that you're making. So, I'm
128. 4:09going to guess so if you have like a
129. 4:10hard ceiling on your advertising spend
130. 4:12like once you get over a certain level
131. 4:13like you can't spend more
132. 4:15is typically because the nature of the
133. 4:17hooks and the content that you're
134. 4:18talking about only really relates to the
135. 4:21bottom of the funnel.
136. 4:24>> Mhm.
137. 4:25>> So, you're talking about uh most aware
138. 4:28customers who already know about your
139. 4:30types of offer or you know solution or
140. 4:32product aware customers who know about
141. 4:33they know about ManyChat um or they know
142. 4:36about you or they know about your
143. 4:37offers, right? So, that's it's you're
144. 4:38talking to a very very warm audience and
145. 4:40so Facebook only has a very small amount
146. 4:44of people who are you know, doing
147. 4:46$25,000 a month and know about this
148. 4:48specific type of product offering and so
149. 4:50that's the only people they're showing
150. 4:51the ads to.
151. 4:54>> Okay.
152. 4:55>> And so, we have to start like at the at
153. 4:57the extreme, right?
154. 5:00You would have the unaware customer who
155. 5:03is purely you have to get them purely on
156. 5:04curiosity.
157. 5:08Like your your business is losing, you
158. 5:09know, thousands of dollars a day
159. 5:12because you don't have this one
160. 5:13integration.
161. 5:15That would be something that someone who
162. 5:17has no idea about anything to do with
163. 5:18ManyChat, anything to do with marketing
164. 5:20automation, they might take the next
165. 5:21step. Now, what happens is as you go up
166. 5:23funnel, right? You go to higher or is it
167. 5:26lower levels of awareness when there's
168. 5:27way more people, sometimes the funnel
169. 5:29has to change.
170. 5:31And so does the lead magnet. Are you
171. 5:32just making a straight offer in your
172. 5:34ads?
173. 5:35What's the funnel?
174. 5:37>> I'm make Yeah, I'm making an offer to
175. 5:38book a demo.
176. 5:39>> Yeah, too. You're like you're
177. 5:41you are you are so level on you're so
178. 5:44low on the on the on the awareness
179. 5:46thing. Like that's the issue.
180. 5:47You have to You have to make it easier
181. 5:49for someone to take a step. They don't
182. 5:50know who you are. Like people Like just
183. 5:51saying like, "Hey, book a sales call."
184. 5:53is a tough ask.
185. 5:59>> Okay.
186. 5:59>> Right? And so, this is why like lead
187. 6:01magnets and things like that make sense.
188. 6:03It's like you might not have need to
189. 6:04have a longer process of breaking even,
190. 6:07number one.
191. 6:08And a longer process of educating the
192. 6:10prospect, and you need to have wider
193. 6:12hooks. And so, one of the big things
194. 6:14that happens in like the whole marketing
195. 6:15world is some people are like, "Oh, lead
196. 6:16magnets don't work." or "They do work."
197. 6:17If you just say, "Hey, buy my shit." you
198. 6:19will get higher ROAS than have a lead
199. 6:21magnet. But you will be very quickly
200. 6:23capped by the amount of people who are
201. 6:24who are warm. And so, you've probably
202. 6:26heard the whole like 97% of the audience
203. 6:28isn't ready to buy right now and 3% is.
204. 6:31Have you heard that?
205. 6:33So, right now you're spending all your
206. 6:34time on that 3%. If you want to scale
207. 6:36this thing, you got to be able to go up.
208. 6:40>> Makes sense.
209. 6:41>> So, you might Right. And so, the the
210. 6:43hooks are going to be like, "How to
211. 6:45double AOV? How to decrease you know,
212. 6:47your CPAs?" or whatever the like types
213. 6:48of language that you can make there. And
214. 6:50it's like, "Here's six ways that you can
215. 6:51decrease CPAs." Now, all of them might
216. 6:53include using ManyChat to do it. And
217. 6:55they'll be like, "Oh, This is
218. 6:56really good good stuff." And if you're
219. 6:58super hands-on, which it sounds like you
220. 7:00are if you're charging $6,000 a month,
221. 7:02like you can give away all the secrets.
222. 7:04I promise you. Just give away all the
223. 7:05secrets. It will not matter. Give away
224. 7:07all the secrets, all the sexiest stuff.
225. 7:09Put it in your lead magnets, put in your
226. 7:10ads, put in your little video sales
227. 7:11letter that you have, right?
228. 7:13And people are going to be like, "I
229. 7:15don't want to do with that. I'll just
230. 7:15have them do it."
231. 7:19>> Yeah. Yeah, you're right.
232. 7:20>> Cool?
233. 7:22>> Okay.
234. 7:23>> All right. Rock and roll. Good stuff.
235. 7:24This was fun.
236. 7:25Let's do this again.
237. 7:27>> [laughter]
238. 7:28>> You bet, Liz. I just want to make sure
239. 7:29that you're not Like here's what's crazy
240. 7:30about this cuz I I think this is good
241. 7:32for for everyone who's watching, too.
242. 7:34People will stay stuck at this level for
243. 7:36like years because you keep thinking
244. 7:37it's like a media buying thing. It
245. 7:39doesn't matter. Like how you're doing
246. 7:40your bidding and campaigns is like we're
247. 7:42talking about like 5% differences. Like
248. 7:44the things that are going to get you
249. 7:45from, you know, 600,000 a month to a
250. 7:47million or multiple millions of dollars
251. 7:48a month, it's going to be strategic in
252. 7:49nature.
253. 7:52>> Yeah.
254. 7:54>> But do you feel like you can execute on
255. 7:55that?
256. 7:55>> Thank you.
257. 7:58Yeah, I'll look at
258. 7:59>> Okay. Rock and roll. Thanks, Liz.