How Depesh Mandalia Creates Offers, Avatars, Copy Hooks, and Business-Saving Cash Buffers.

Zach Johnson

Dylan Carpenter

Depesh Mandalia

Episode
34
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1

Depesh Mandalia

,

Founder and CEO

SM Commerce and ZASR Digital
Apple PodcastsGoogle PodcastsLive on SpotifyLive on Youtube

CEO and Founder of SM Commerce and ZASR Digital, Depesh Mandalia is known as the “Facebook Ads Chef”. He’s invested nearly $50M year in profitable ad spend over the past few years. During the past decade has been responsible for over $100M of revenue generated and over $20M of profitable Facebook ad spend. His agency helps 6-figure and 7-figure businesses scale beyond $10M while his training programs help entrepreneurs scale up faster, through Facebook ads and other channels by focusing on his Brand-driven, Performance Marketing (BPM) System. A graduate of the University of Hertfordshire where he earned a BS in Computer Science, he also has a Diploma in Project and Business Management from The Open University and a Master of Business Administration.

Episode Summary

Join SM Commerce and ZASR Digital Founder and CEO, Depesh Mandalia on his amazing  journey from being an affiliate marketer -- to managing $40M to $50M/year ad spends as an ad agency owner -- to finally becoming the master of his own killer brand of marketing education and training. 

We’ll dissect a ballsy “personal grooming” ad that drew in buyers with a powerful below the belt promise linked to an attention grabbing-image.  Then torpedo a terrible ad that highlights the horror of fat freezing treatments instead of the benefits.

How the addition of this powerful element transformed a $25 product into one someone would pay $50 for.  Why ad “hacks” are crap.  And the life and death  investment you must make in your business if you want to survive.

TAKEAWAYS

  • Discover the ADA principal why it is an essential formula for creating ads that convert.
  • What the two most important lines of ad copy are -- and the horrible thing that happens if you get them wrong.
  • The importance of creating avatars that marry an emotional hook to a functional benefit.
  • Find out how to identify the 4 elements of a great ad -- and why the second on absolutely has to be backed up by data.
  • Understand the totally unsexy spend of cash buffers and why you can’t afford to skimp on them.

RESOURCES/CONTACT:


Transcript

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Episode
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Transcript

Speaker 1 (00:00):

On this episode of the rich dad, poor dad podcast, we have an awesome guest Depeche Medallia who was responsible for spinning shoot upwards of four $50 million in ad spent every single year. We dive into his background where he starting affiliate marketing, how he's diving into the real estate scene and diving into the kind of rich ad segments in four ads of understanding your audience, your offers testing, um, to kind of really make sure you hit it right on the head to where, you know, it's not rocket science on the media buying side. We also kind of dive into the super juicy financial side of things to understand, and kind of cash buffers, how to kind of set up your agency or business for success in the kind of a long-term make sure to tune in. You will not want to miss this one.


Speaker 2 (00:41):

Yeah. We talked to this e-com store from 800 K to 26 million, 18 months. Dude. I've never heard of anyone doing that before. And I said, yeah, we did it like 2015. It was cool. And it was like blown away. But for me, I was right in the middle of it and I focused on how stressful it was and how intense it was. And he's like from the outside of you even listening to what you're saying, and I started to share some stuff online, people site following, and I figured, you know what? Maybe people can use this and can benefit from it.


Speaker 3 (01:16):

[inaudible]

Speaker 4 (01:16):

You're listening to the rich add poor ed podcast, where we break down the financial principles that rich advertisers are deploying today to turn advertising into profit and get tons of traffic to their websites without killing their cash. These advertisers agencies, affiliate brands are responsible for managing over a billion dollars a year in ad spend. You'll hear about what's working for them today. They're rich ads and we'll roast their Epic failures and crappy ads on the internet with core ads. Let's get into it. Welcome to another episode of the rich dad. Poor dad podcast is your host sack Johnson. I'm with a one and only Dylan Carpenter. How are you doing today, Dylan? Good, man.


Speaker 1 (01:53):

We got a legend of the game today.


Speaker 4 (01:56):

Legend. That's right, man. Yeah, I, uh, I think today's guests, uh, gosh, has managed tens of millions of dollars in media and is really been one of the, I think most generous, uh, Facebook ad experts in terms of just be willing to open up the kimono and share a ton of insights. Um, but I think he said before the show he's managing over 40 million may 50 million a year in annual ad spend. Um, which is, uh, that's, that's no, that's no small feat. So I feel like, um, we're going to learn a lot today. He's also the creator of the BPM method, which we're going to dive into and, um, and it's good stuff. So what do you think, should we, should we bring them on the show, Dylan, the hype is real,


Speaker 1 (02:40):

Man. Let's go ahead and welcome this guy in


Speaker 4 (02:44):

All right, Depeche. Welcome to the show. It was a little guy's side of the, have you here, man? I, uh, I, uh, I I'm a fan. I, I feel like, um, there's very few folks that are managing the level of scale that you you've, uh, been fortunate enough to manage, but also really peel back the onion, but I'm excited to get into what's working now. I'm excited to hear about a rich ad. I'm excited to hear about, uh, to know that you're not perfect. Um, I want to hear about a poor at that you've tanked on. So we all know you're, you've got a in your armor, but tell everybody a little bit about what you're up to, uh, uh, these days. W what do you, what's got you excited,


Speaker 3 (03:24):

Certainly. So right now, um, you spread between running an agency, um, trying to figure out a training program and how to kind of best educate people on getting better with their ads and, and kind of, um, getting better, better results for their business as well. Um, we do some e-com on the side, also on the side, have a large family as well, which I looked after as well. So lots of things to keep me busy at the moment.


Speaker 4 (03:46):

That is awesome, man. Yeah, I think there, you know, for the agencies listening to this show that they would love to hear your journey from, you know, really, uh, doing affiliate marketing to then jumping into the agency side, to now really doing, uh, quite a bit of, uh, coursework and education. And, you know, there's some agencies that, that talk every single month and year about like, I'm gonna stop doing client work this year. I'm going to come out with my aunt program and offer. And it's quite a, it requires a ton of discipline to really be able to make that jump from, uh, you know, uh, agency owner, um, you know, performance marketer, affiliate marketer. We're always working on other people's campaigns, uh, to where you're really, you know, owning the offer yourself. So how, how have you been able to stay so disciplined and what advice would you give to the agencies?


Speaker 3 (04:37):

So we, first of all, I've spent most of my time clients' side. So I've had a lot of experience of bad agencies and also learn a ton from good agencies. So by the time I started to transition away from consulting and kind of working one-to-one with different clients, into an agency world, I kind of knew what I wanted from the agency. It took us a while to get there. Um, you know, I'd say the first 12 months was a ton of learnings. There's a difference between seeing an agency from the outside and actually being right in the middle of it and seeing what it's about then it was a case of, so here's how we transitioned from agency to training was at that stage, back in 2017, I started to look for media buying training for my team. Now you'll know, even back in 2017, let alone right now, there are hundreds and hundreds of Facebook ads courses out there from people who are 18 years old, probably 12 years old, probably 30 and 50, who are all experts with their Lambos and stuff like that.


Speaker 3 (05:32):

And some of them are genuine. There are some really good people out there, but the majority is just disappointing. And I went through and I honestly liked to spend months and months going through lots and lots of these programs. I thought I can't, some programs had some good staff. A lot of them was just trashed. And how many of them were just taking stuff that Facebook gives you for free from blue blueprint and just recreating that with a, with a different veneer. So I started to just write my own training. It was just like, write an, uh, you know, do a short video loom video, show it with the team. And then I started to bolt that together. And I thought, right, how do I turn this into a bit more of a strategy, not just kind of one off videos. And then it was a conversation with a friend of mine in 2017. And he goes, um, have you considered sharing it with other people? And I'm like, who'd want to learn from me. Like, there's loads of other people out there. He goes, not your, your stuff,


Speaker 4 (06:21):

This lowly media buyer that only manages 40 million a year.


Speaker 3 (06:26):

And that kind of space you don't, sometimes you didn't realize how good the puppy is that you're doing and what you've done. So he goes like, what's the best case study you've got? And I said, you know, we talked to this e-comm store from 800 K to 26 million, 18 months. It's like, dude, I've never heard of anyone doing that before. And I said, yeah, we did it like 2015. It was cool. And he was like blown away. But for me, I was right in the middle of it. And I focused on how stressful it was and how intense it was. And he's like from the outside, are you even listening to what you're saying? And I started to share some stuff online, people started following and I figured, you know what, maybe people can use this and can benefit from it. And that's kind of where, where the whole thing came from. So now it's like a balancing act between trying to keep the agency, uh, following its path, as well as trying to do the education thing. And I love doing the teaching thing.


Speaker 4 (07:14):

Oh, you're killing it, man. I love it. I it's so thorough. It's, uh, it's really, you know, it's detailed and you're not just kind of throwing up screenshots being like, look at me. I'm awesome. And, uh, yeah, so we appreciate that. Well, do you see, let's, let's dive into it, man. Let's, let's, uh, let's dive into this rich yet. [inaudible] so the patch,


Speaker 3 (07:40):

Which would you prefer first? That Marine one is pretty fire. I will say that. And so I sent you two ads, so we have a Slack channel where we just keep throwing in ads that we see that we like and hate because even the bad ads you learn from them as well. Right? So these aren't playing ads. These are just ads that we've seen from the newsfeed. Um, but I think they're really good examples of really good ads and really bad ads as well. So throw whichever one appeals to you the most we can go through it, I'd say that Murray and grooming.


Speaker 4 (08:07):

I mean, I feel like the copy kills it, the headline, it's just a really, it's like, Oh, let's see how far we can get away with this then.


Speaker 3 (08:14):

Absolutely. And like, you know, things like ed products or anything, that's a bit more personal. Um, you have to be a bit clever of how you kind of, um, communicate that with the, um, in the newsfeed and with your prospect and stuff. And I think that the hook on this particular ad is that that kind of comparison between you and the guy that, uh, or, you know, the guy that your girlfriend's not dating kind of thing. It's just so clever. And it, it reminds me of the old spice ads and, you know, the man that your man could be kind of thing, but he's just so just, it's just so instantaneous that it creates an image in your head of that new outcome. I think that's like when I break down ad like this, I'm looking at how quickly can you get your proposition across and create that aha moment. Some people really struggle to do that in their ad. They try and create clickbait, try and get you on the landing page. And by then, you've kind of lost the interest of the user. I'm figuring out how do you get that as fast as possible. And, and that had an absolute, does it,


Speaker 4 (09:12):

So let's just read through this. I mean, this is, this is mind blowing right now. So the image says basically on the left side, and you know, if you're listening to go to richdad pro.com/podcast, you got to see this episode and we'll screenshot this, put it up in the show notes, but the left side is your grouping, which is, I don't even know what this is. It's like, it's like furry, there's like two red fuzzy balls. And then versus on the right side, says, you know, the guy stealing your girlfriend. And it's like these like super clean, like two balls with like a razor. Yeah. That's basically, uh, you know, basically resembling the male genitalia here. And then the copy on the headlines, like confidence begins below the belt. I mean, just like I just, you know, it's like Coke comes up with this stuff. It's so good.


Speaker 3 (10:06):

It is. It's like, um, the hardest thing to get done in an ad is get the copy and the thumbnail or the thumbnail of the video or the static banner to get them all working together or get them complimented. Because the thing is, when you see the ad, you got to first be drawn to the image. That's the first thing that captures you. And what people fail to understand is that you don't just need an image that stands out in the newsfeed. I've seen, I've seen experts, Facebook experts, that show images of completely random things that are bright and cheerful and demonstrating how this has caught your attention in the newsfeed. If it doesn't match the copy that just people off, like there's no connection there, but this is just perfectly grabbed your attention. And in the first few lines hooked you in, and now you want to know more, um, you've probably heard of the ADA principle, attraction, interest, desire, and action. When it comes to copywriting, I look at that when it comes to an ad as well, the attractions there, the image absolutely does that. The first few lines does the interest and then the next few lines does the desire. And then the action is literally just click to find out more and you will want to do,


Speaker 4 (11:08):

I mean, just thinking about all the things that they could have done, you know, with this type of ad, right? Like they decided to talk to really highlight the guy, stealing your girlfriend. That's like, brilliant, because you could've said like, are you scratching your balls, right? Or like, is this discomfort, is this awkward in public? You could have gone like this whole, like, not even bring in the girlfriend aspect of it all. It's just like a totally different approach. Um, I think that they, they could have just focused all on the pain. Um, but in a single static image, it's just like, you know, it just, it's just a perfect AB you know, the way they've done it.


Speaker 3 (11:54):

It's just, it's so cool. When, when I look at building my avatar, I'm looking at two things I want from my avatar. One is the emotional hook and the other one is the functional benefit. What are those? The products or service. And that absolutely nailed an emotional here, which is pleasing the girlfriend and doing it in a way that makes you feel good as well. And the copy that has just come through on that image, and then the kind of the copy in the ad just hits the nail on the head. Oh my gosh. Now, now I'm reading the copy. Now I can't believe the quotes. This is hilarious. That's my favorite part of growing below the belt. I feel more confident when the bushes are trim, the tree looks clean down there. My partner does it for me, and I wonder how far they pressed it.


Speaker 3 (12:42):

Or if this was like the first version of one, or it's like, let's see if this gets approved because Aaron's 500 disapprovals before. But the thing is ad was running for some time as well. So I think it lasted a while. It's a good, fine man. Perfect ad to then take someone through an advertorial style Lander and expand on that story and then land them on your product page. Cause then it's just, you've got them interested. Now you need to close them. And more people than miss out is a great ad. Is there to get you into the shop. It doesn't get you to the till and cause it to buy it. That's your Lander. I think we don't use that word over here. We're in Austin, Texas. I love it. That's super cool.


Speaker 5 (13:32):

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Speaker 3 (14:48):

Check it [email protected] All right, let's look at this other one here, your granddad's wedding band and the engagement on this is just unreal. I wonder how long this was. The thing about this is, um, jewelry is such a, um, red ocean, like when it comes to selling jewelry, jewelry online and stuff like that. And people try, I think too hard sometimes to sell the copy, the image and stuff like that. Usually I try and get people not to focus on the product too much because often people are buying the outcome. So here I've got the aura ring. I can track my sleep and things like that. No one really cares about the ring. They want to know how you're improving your health. That's the thing they buy into. If you look at a product like this, um, usually I'd say don't focus on the ring cause they want to know what the benefit is.


Speaker 3 (15:34):

So it's styling is a great accessory, but what works so well here is the copy because they're talking about is not a grandad style ring. And then there's a bit of curiosity that they create that I, the, the style of the re the band is great, the colors and everything like that. And this is just an element of curiosity that will get you to click the challenge here is, does the land to get you to close? Does it get you to actually bind to the product? I think, I think the ad itself, it doesn't try too hard, but it does so much. Oh. And it just reiterate, it's the exact same copy on the headline and the body. So I just think it seems so simple and effective. Cause I mean, not engagement does not lie. Absolutely. Absolutely. I'm on their website right now. Buying a wedding band. Doesn't have to sound good tagline. That's good. All right, man, let's dive into it. So, uh, let's, let's hear about this poor. And is this one of your own Porres or is this one?


Speaker 3 (16:42):

So here's the thing. When you create an ad, you want to evoke an emotion, but that emotion has to nudge you towards buying something or signing up for something. The emotion I feel when I see this is extreme pain in my stomach, because of the image it's shown, I want to get rid of that ad. I want to report the ad. I want to tear it up in my newsfeed. It doesn't do me any good whatsoever. Now I'm, I'm, I'm not the target market. I still don't imagine any human wants to see what they go through. So for example, when you go, when someone goes for Botox or any kind of surgery around the body, no one wants to know really what happens. Cause it's gruesome. They want to know how I'm going to look in four weeks time. And I think that's where this ad kind of misses that trick. Yeah. The image is atrocious. It's like a pension, his belly initiates. Yeah. The other thing that drives me nuts is honestly the Billy link and no actual like headline link, like call to action down there. I don't know what it is, but that always arks me about it please. The, um, the company, the Holly clinic, um, I think it's Holly, Holly, something they're, um, quite well-known in, in London. And I imagine they've got good cash buffers to spend on ads. It's just shocking to come up with an ad like that


Speaker 4 (17:55):

Bat freeze treatment. I feel like they were, they definitely like missed the boat there in terms of, you know, what is the outcome? There is something to be said for highlighting the mechanism, you know, of like, there is like, have you tried all these other ways? And they, they, they basically like heard about this, this, this idea. And then they just like completely failed on execution. Right? It's like, okay, you know, maybe you could ha like, after you're really highlighting the fact that maybe this, this dude's gonna look better and his girlfriend's going to be happy to take a lesson out of the other chat here. Once that's been established, then you can kind of like jump a little bit further into, Hey, you know, fat freezing treatment. It's going to work better than lipo diets. Jim, it's faster, it's cheaper, blah, blah, blah, blah. But when you're just showing up like a picture of a dude and a fat phrase, it's just like, Oh man, that's a big jump to get to.

Speaker 3 (18:59):

I can imagine the media buyer or the crazy. Person's like, what is the product we're actually selling? And someone said, here's the picture of what we're selling? And they're like, great. Let's put that in the ad and write some copy. That's not what you're selling, you're selling what happens four weeks later when the guy's looking at his flat stomach and thinking, wow, it's great to now be able to fit in my smaller trousers or jeans or whatever.


Speaker 4 (19:19):

How do you think this applies to, you know, what you're doing over at BPM method, right? Let's just, let's just talk about your own ads for a second. Right. You're selling to an advertiser, somebody that ultimately wants, you know, a better ROI, better, you know, more scale on their, on their advertising. And how do you, you know, how would you think about kind of showing that for more digitally native products that, uh, you know, it's easy to do and you know, it's easy, it's a physical product. It's like, I got this. Right. But how, how are you thinking about that, um, for your, for your own, for your own stuff right now?


Speaker 3 (19:57):

Really? So the first thing I think about, so I break down four elements of a great ad campaign into four parts. So you've got product, does the product clearly solve a problem or create a new opportunity? That's all it's all about. So, um, if you've heard of you dreams, Schultz, and his four stages of problem aware solution aware and everything in between, what is your product set? So for example, the first ad that you saw I'd argue the product isn't immediately obvious. Like if you presented that as an ad of a razor, who knows, is it for your face or is it for something else? But now that presented the ad in a different way, you know, immediately what that product's about. But the thing about product proposition, the second thing is the audience avatar, how well constructed is that I might have a call with someone yesterday and they were talking about their buy-in and is exactly what their client says their customer is.


Speaker 3 (20:50):

I said, how do you know that? Well, she said, you know, the founder of the business said, that's the case. I said, where's your data points? Have you surveyed existing customers? Have you looked at your ad campaigns to see where the clicks are coming from? If you've gone through your analytics and stuff like that. So it was building a real picture of who your customer is. The third and most important part is the offer. It's an offer is not discount promotion, anything like that, the offerings, the whole construct of your copy, your creative, your Lander, and everything that comes between that, which matches the product with your audience. So once you get the offer, right, I'd argue that media buying is easy. Then the final part is your funnel, the sales funnel, the booking funnel, wherever it is. And when you get those four parts together, that's when the magic happens, then we take it a layer down and say, right, who's the avatar.


Speaker 3 (21:37):

And as I mentioned before, what's the emotional trigger? What the functional benefits and how do we write ad angles that are going to hook people in on something that's emotional. I'll give you an example. Um, about three, four years ago in the affiliate space and CPA offers, led dog collars were a big thing and people were selling them as they're bright. They last long, all that of they're focusing on the functional benefits. Most people were selling it for about 25, $30 then came a different style of advertiser was selling it for $50. But the angle was this product could save your dog's life. Now, all of a sudden $50 doesn't sound like expensive. And, and that's the difference between finding an emotional hook. That actually means something to you. And it's something that's functional, which makes it easier for you to rationalize. Should I buy this? Should I not? It's $25. It's an led led dog collar. I don't think I need it right now.


Speaker 6 (22:30):

Now I got stuff becoming in here. You mentioned the offer coming in hot. Now, is this something y'all help come up with with the clients? Is it the clients they already kind of have something in mind? Do you kind of feed it off some of their top services? How do you approach the offer when it's just non-existent at that kind of point in time?


Speaker 3 (22:46):

Yeah. So that comes from the advertise building, um, the hook between the product, the audience, and kind of how that is communicated. That's essentially it. So, um, we would focus on writing different hooks for our ads, taking the newsfeed. For example, the first two lines of your copy are the most important, um, all of the whole copy blog. Cause if no one reads the first two lines, they're not reading any more than read more. So, you know, as we saw in the ad examples, you've got the first attraction point is your thumbnail or your static banner or whatever format you're using, but then you need to retain that interest. So we test multiple ad angles to find which of the strongest ones. So for example, um, you know, we were working with organic smoothies some years ago, we were working on right. What the benefits of the organic smooth, some of the weight loss is weight control is, is, um, bodybuilding.


Speaker 3 (23:37):

There's lots of different things then, right? What the, um, emotional triggers here. So talking about, you know, once you've got the weight off, how do you maintain it and how do you write a few hooks of copy to make that happen? How do we get an image or video to, um, amplify that pain or new opportunity, and then tie that into kind of, re-up creating that ad. That's really going to cut through. Um, and you know, one thing I would say is all the many, many ad accounts, I've audited, the amount of people that have great products and have written great offers, but have no clue really on what they're doing about media buying far outweighs those that are really good at media buying, but can't create great offers. Like this is just something where, when I speak to people and they're like, I want to be the best media buyer.


Speaker 3 (24:20):

I'm like, no, you don't need to be the best media, buy it. Like, don't worry about learning. Facebook ads learn marketing. One thing I think is pretty cool is that the founder of mind value I was talking about, if you go back a hundred years, 500 years, the way you would sell to humans, it has actually changed the triggers, the emotions, the reactions and stuff like that. What's changed is the medium. So even a hundred years ago, the internet, obviously wasn't around 10 years ago, Facebook really wasn't as big a platform as it is for advertising. Now the medium keeps adapting and it will keep adapting, but humans change at a slower rate. So all the strategies and tactics and stuff that you're using right now, if you rely heavily on the platform and you'll know this Dillon from all the different Facebook groups of duplicating and budgets and this kind of stuff that is so like short term thinking, get your offer, right. Get your avatar, right. Get your land is right. Fit your product. That's where the money's made.


Speaker 4 (25:15):

Yeah. We had a Mike Filsaime on here the other week and, um, you know, he went into it and he's like, Oh, we're spending 15 K a day, you know, in B2B, which is not easy to do. And in SAS, which is not easy to do. And he's just like only came on and talked about the offer the entire time. Right. And he's just like, we basically looked at the market, we're doing like this freemium page builder, whichever he knows click funnels. And we just like slashed it and made it free and changed our monetization model. Like we priced out LT like LTV. Like he knows his Mark he's been in the market for like 20, 20 years. Right. So like, uh, and, um, just rolled it out, you know, in the last 60, 90 days. And they've already got like 200,000 users on it.


Speaker 4 (26:00):

It's, it's, it's a great story, uh, in a market that's really, um, difficult, but I love the principles that you're sharing to pass. It's it's, it's it's killer stuff. I want to switch gears here and talk about some of the financial principles, uh, that you could share with, with this market, you know, before the show we were talking about, um, really how you think about, you know, funding, the business, how you think about managing cash in your different businesses. Now, both from, you know, on the agency side, which is, there's a lot of agencies that are on that, you know, second, a client leaves, they've got to do some layoffs and, and they're, um, they're always chased, you know, one client away from profitability. It's, it's a difficult business to really be managing cash on. I'd love for you to talk about that. Uh, and then also how you think about investing into a growth into a business. When I think as a culture here in the U S we're like obsessed with venture, we're obsessed with like debt and like, and, uh, speed. So talk, talk to talk to the audience a little bit about, um, how you're taking some of these principles and putting them into your different businesses.


Speaker 3 (27:10):

Since 2012, I've been exclusively working with startups, uh, consulting, contracting, et cetera. And I've seen every side of VC, all the kinds of different equities and, and, and deals that go on and the amount of failures. This is the thing about, um, the whole world of VC is, um, you know, for every success is probably 50 failures or whatever the number is. And I've seen that the pressure that comes with as well, and, you know, I've seen businesses that have been really run with it really well, have great product, great service, et cetera, all of a sudden, you know, they got 10, 20 mil of, um, private investment, all these kinds of funds coming in, and now you've got these new kinds of directors telling you to do X, Y, Z, and everything changes. Um, I was at a company that grew from 30 to a hundred people in a couple of months.

Speaker 3 (28:00):

Uh, they had $40 million invested. The whole culture changed, and it just changed the dynamics of what was a really successful business. And they started to struggle. Now, when, when I started off the agency, we decided to just go all in, you know, bootstrap and kind of get things started without putting money invested in to help it grow itself. So we started off with, um, clients, and then we started to hire at the base level, start to build our cash buffers. And one thing we wanted to do was after that 12 month Mark, and this is the thing is like, if you want to build security in your business, it doesn't necessarily have to coming day one day, one 80 or whatever it is we decided by that 12 month Mark, we needed enough buffer to cover three months of zero clients. And then we grew that to six months and you know, now we're at 12 months plus, but that means that we can make better strategic decisions because when you know that if you make a move right now, if it goes really bad and you lose a set of clients, we're okay, we can, we can cope with it.


Speaker 3 (29:04):

So for right now, for example, where we are investing for the next six to 12 months in our next moves as the agency. So, um, the different, so we're looking at acquisitions, we're looking at hiring and other things like that, or we're able to do that because we've now built those buffers up. Even if we pull in and it goes from like 12, 14 months into six months, buffer, we can make those decisions. And what we've done is to try and make sure every month, some of that money goes aside for taxes. Some of that money goes aside as just, um, uh, reserves. And then some of that money is just pulled out for other ventures as well. But we've got that, that process going on to make sure it doesn't sit there and doesn't get utilized. So, you know, even if there is access, um, you know, as I mentioned to you guys earlier, and I'll mentioned now, I also have real estate as well.


Speaker 3 (29:50):

That for me is the long-term game for me to be able to build a portfolio, um, that I can pass on to my kids. I can comfortably retire on and stuff like that. That's, that's the game for me, but the agency and, and also the training, which by the way, digital products are more profitable than kind of the gold service. Um, that's the kind of thing that we're kind of balancing out. So when we now start an e-commerce venture, we're looking at giving it a boost. So we might put three, four, five K in to get it started, but then that has to turn profitability to help it continue on its own path and grow at the rate that profitability comes in as well.


Speaker 4 (30:26):

I love that it's so boring, but right. You know what I mean? There's no fancy footwork here, right? We're not, we're not a posting up cat pictures of unicorns and babies here to hack.


Speaker 3 (30:39):

The thing is like, I'm not, uh, so I have a co-founder in my business and she is all about bottom line profitability and cashflow. All I focus on is revenue and growth and stuff like that. And I think this is where a lot of people struggle that if I was a single founder right now to manage all those variables of growth and profit and bottom line, it's really hard. And I've seen so many single founders fail, whether it's co-founder or, uh, coaches, mentors, whatever it is, you have to surround yourself with the people that have walked that path. I I've relied on mentors, you know, for the last six, seven, eight years looking at two, three steps ahead of where I am right now, what do I need to be considering? What am I missing here?


Speaker 4 (31:22):

Yeah, Dave, uh, well, there's a couple of people that come to mind. Um, grant Cardone's quote says cash is King cashflow is King, which I love. And, uh, Dave Ramsey has a funny video on Facebook where he just totally beats up on like chase and all the, all the points. And he's like, if you think you're gaming chase, and you're trying to squeeze out three percentage points, four percentage points, he's like, you're focused on the wrong thing. Right. And he's like, chase is winning in that, in that game. And I, uh, I love your simplistic approach to it. I also think that being in the UK, um, is, is, uh, people look at just, you know, cards and bank accounts and kind of their financial stack differently. Um, it's much more boring and traditional over there. I think everybody in the U S is like, uh, you know, I got to get my airline miles.


Speaker 4 (32:21):

I don't care if I'm in a pandemic. Like I got to get, you know, 2% cash back three or four, and I've really, um, you don't get caught up in that. Right. And, and especially like media buyers that are spending, you know, 40 million a year, like we've seen a lot of them hyper-focused on, Hey, if I could put all this spend like on my card, or if I could kind of build a client's up front, I could double my profit, or I could increase my profit by 50% by just getting an extra one or two points,


Speaker 3 (32:52):

I think, to be fair. I think it depends where you are in your life cycle. So if you're transitioning from working nine to five and you've just launched your e-com store and you're struggling for cash flow and those margins matter, then I think it absolutely makes sense. And people will go for the, uh, those tiny margins help them. I think, as you become more established, it just, you don't feel it as much. And, and yeah, you're probably leaving money on the table by not using certain cards in the UK. We don't even have that much choice. I've seen, um, even my, in my Facebook group, when I, when people are posting and saying, what cards do you use? And I'm looking at the award you get in the U S and Canada. We don't have that here.


Speaker 4 (33:30):

No, it's awful. It's awful. But I, you know, I love it. I it's, it's one of those things, you know, a big part of my, my native advertisement here for, for ad card is like, the way that we are looking at our cards is like an opportunity to give value, to help the businesses grow, which is the thing that you wake up and you think about, you know, uh, every single day is like, how do I grow the top line? Nobody's waking up every single day of like, how do I get one, two, three, 4% back. It's something you check in like every six months in your business, but it's like way back there. And I just, I think that there's an opportunity in the space to say why, why can't a financial company exists to just help you grow the top line? The thing that I think we all just care about.


Speaker 4 (34:20):

Uh, and so I always, um, want to highlight the people that don't get caught up into that most of the time is people overseas that are just like, Hey man, that's not the, that's not the needle mover here. So I like how you set it up. Tell everybody I feel like I'm kind of recapping a conversation you and I had, but to celebrate a little bit about your perspective on how you think about, um, you know, cards, points, things like that. Obviously UK is limited, but I think your perspective is also, uh, helpful here too.


Speaker 3 (34:51):

Yeah. I think the angle I come from is I'm, I've got family, I've got five kids and, and kind of how I would be able to use those points differs as well. So, you know, for, for people who are single or in a couple relationship, or maybe even have one kid, you got a lot more flexibility. So if you're using flights, you can kind of be a little more flexible with that as well. Um, let me tell you flying seven kids, seven people is truly expensive. Um, we, we did a big trip to Alaska last year and it was, that was fun. But the thing is, it was like, um, you know, I don't really have the time as well. So my, my, my business partner, she looks at things like, how can we squeeze this and squeeze that? I think the way I look at it is every single day, you have a hundred percent of capacity for your same reason. I wear a black t-shirt everyday light. I want you to think about that. And it's the same with, um, the bottom line of, I find out we're profitable. If I know we've got cash flow, then I don't want to worry about that. I'll just continue focusing on growth. Totally.


Speaker 4 (35:50):

I love it. I love it. Okay. The past you've been amazing, man. Um, you just deliver every time, tell everybody a little bit about, you know, how, what you're up to next, how they can get in touch, where they should go.


Speaker 3 (36:03):

Absolutely. So, I mean, my big push is to make sure people really know what the BPM method is, because the thing is, what I'm trying to do is get people to understand that advertising is far easier. It doesn't matter which platform you're on. You're on Facebook, you're on Snapchat, the same principles apply, which I've talked about. So that's my big thing right now is getting that message out to more and more people. So the BPM method is my main focus right now. Um, but you know, looking into next year, um, you know, we've got an event that's, we were just about to publish and go live with. I love, I love in-person events now, obviously this year is not quite possible. The next best thing is to try and do that online as well. So events, um, and kind of just trying to get as many of the positive messages out there to help people get better performance for their business.


Speaker 4 (36:47):

I love it. So is that BPM method.com that's that's where they can check it out. Awesome, dude. Awesome. Well, Depeche, it's been awesome having you on the show. Thank you so much for sharing some of the principles and how you look at finances, breakdown, rich ads and poor ads. Uh, you, you you've been awesome.


Speaker 7 (37:05):

Thank you so much. Appreciate it guys.


Speaker 4 (37:12):

Thanks so much for listening to another episode of the rich ad or at podcasts. If you're like me and listen to podcasts on the go, go ahead and subscribe on Apple podcasts, Spotify, YouTube, and Richard [inaudible] dot com slash podcast. And if you absolutely love the show, go ahead and leave a review and a comment share with a friend. If you do take a copy screenshot of it, email me [email protected] Show me you left a review. I'll give you a free copy of the rich add or add book. Learn more about the book, go to rich ed for a.com to leave a review that a rich ed or at.com/review. Thanks again.

 



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About The Podcast

Jason Hornung is the founder and Creative Director at JH Media LLC, the world’s #1 direct response advertising agency focusing exclusively on the Facebook ads platform. Jason’s proprietary methods for ad creation, audience selection and scaling are responsible for producing $20 million + of profitable sales for his clients EVERY YEAR

Zach Johnson

Zach Johnson is Founder of FunnelDash, the Agency Growth and Finance Company, with their legendary Clients Like Clockwork solutions. Under Zach’s leadership, FunnelDash has grown to over 5,000+ agency customers managing over $1 Billion in ad spend across 41,000 ad accounts on. Zach’s private clients have included influencers such as Dr. Axe, Marie Forleo, Dan Kennedy, Dean Graziozi to name a few. Zach is also a noted keynote speaker and industry leader who’s now on a mission to partner with agencies to fund $1 Billion in ad spend over the next 5 years.

Dylan Carpenter

Dylan Carpenter

Dylan Carpenter will be diving into what he and his team are seeing in 200+ accounts on Google and Facebook when it comes to trends, new offerings, and new opportunities. With over $10 million in Facebook/Instagram ad spend, Dylan Carpenter had the pleasure to work with Fortune 500 companies, high investment start-ups, non-profits, and local businesses advertising everything from local services to physical and digital products. Having worked at Facebook as an Account Manager and now with 5+ years of additional Facebook Advertising under my belt, I’ve worked alongside 60+ agencies and over 500+ businesses. I work with a team of Facebook, Google, and LinkedIn experts to continue to help companies and small businesses leverage the power of digital marketing.

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