Helping Business Owners Reinvest Into Their Businesses | Ep 956

0:02I take all that profit and I just see that as this is my opportunity to reinvest in the business. When the business is small, reinvestment is you. You are the reinvestment. And so that's where I'm like, okay, I'm going to pay my current agency. I'm going to pay the next agency. And I'm going to tell both of them, I want them to teach me what they're doing. And I'm going to spend my own budget too.

0:21John, what's up, man? Tell me about the business. Yep. So we help people with Carding Back Payment in Statica. We have an online program. Okay. So online. Okay. Yep. And you help with back pay. Got it. That's right. What's revenue? And we're doing$95 ,000 a month. Okay, so you're doing a million bucks a year, roughly. Okay, so you're doing a million a year. Great. So I know you're online. Are you selling via checkout page or via sales call? We do DM to 3ish call to sales call. Okay, so sell. Okay, cool. You're doing online sales people. Okay. Yep. Okay, got it. And how are you getting leads? We have a million followers on Instagram.

0:56Okay, 1 million on IG. Anything else? Yeah, like 200 grand on TikTok. Okay, cool. Well, you've probably already seen the difference of the value of 200 ,000 on TikTok. versus 1 million on IG. Yeah. Want me to give you a quick hack to turn those TikTok people into more value? Please. Yeah, so we have found that the best call to action for TikTok, if you want to sell higher ticket stuff, is actually make the CTA DM me on Instagram and then put the link to your Instagram. Wow, okay. Yeah. So like on TikTok, you get people to DM on Instagram. I know. But you already have your whole DM team set up on Instagram anyway, so like it works great.

1:32Yeah, cool. All right, so that's thing one. Great. So what do you want to do? What's holding you back? It feels like leads consistency. So we have one sales rep and two setters. And I want to get more sales reps, but it's just like one week. We'll be filled out weeks in advance. And then another week, we barely get enough leads to fill up one. And then we just end up pitching on every single post. It just feels fatiguing for the clients. So I'm curious, do we start ads? Can we start retargeting? Or do we need to fix something first? How many posts a day are you putting out? We're putting out one post a day on Instagram.

2:00We tested two, but it's just like we really focused on, We edit this for eight hours. We make it great. So it's one a day. Okay. I think you can probably make more. I'll just put that out there. I would 100 % not believe in the mythology of like there's a platform limit. There totally isn't. And that's on, and I pretty much stand by that on every platform. Like Fox News puts out one, I just looked at this, we were calling up this morning, does one long per hour on YouTube. Oh, wow. Right. And they do like 300 views. Right. And there's a Bollywood account that gets a billion views a month on Instagram and puts out 100 posts a day on Instagram.

2:35Jeez, yeah. So you have to think about it like this. So I hear what you're saying with the fatiguing audience. I think more realistically, you're fatiguing your editor, not your audience. I think they're not making good enough stuff. No, I'm being real. I think they're not making good enough stuff. Your audience has an insatiable demand for value. Wouldn't you like believe that in your core? Your audience has an insatiable demand. It will literally never, it's an endless pit when it comes to value and has almost no appetite for fluff and waste. If we have, Let's imagine that this circle represents a million people.

3:04When you make a post, you're getting like 1 % to 2 % of your audience to actually see it. And so if you make more posts, you'll just have more 1 % to 2 % that see it. Now, where your issue comes up is that when you make your direct call-to-action posts, then it goes from that kind of thicker dot to just like an itty-bitty speck because your reach gets hammered. We actually do a call-to-action in every post, like at the end. Yeah, and that's okay. Well, it's not the end of the world. Again, all that matters is how long is the CTA relative to the post? So it's usually like, are you doing a mini chat integration?

3:40Yeah. Yeah. So how long is the CTA? Like six seconds. That's long. Is it pre-recorded or is it pre-recorded then stapled on? Or are you making them native every time? It's native, but it's the same every time almost. Yeah, so you want to swap out what the lead magnets are constantly. Oh, okay. Got it. Right now. Because why would they respond? they already got it. Yeah. Yeah, right? So, all right. So I'm going to write down little nuggets for you. So number one, we're going to go TikTok, TikTok, DMs to IG as CTA. Number two, we're going to make more lead magnets so that you can alternate through them.

4:18Number three, I think more content is a good idea. Okay. Number four is, I think you need to lower your time, your CTA time. So I would probably, I would shoot for like three seconds or less for your CTA. The thing is, it'll kill the view-through rate, right? And then that's killing the amount of reach you're getting. Yeah. Okay. And you're doing comment, like book, or comment, whatever, and then it DMs in the thing? No, we actually do a, like, for free static assessment, and then we just basically say comment for an assessment, and then we book a call. Yeah, I mean, that's also a really heavy ask.

4:49So it might be worth considering, like, a cheat sheet and then a triage question. Okay. Because, I mean, like, that's, like, the heaviest right hook you can do. Yeah. I'll give you guys a little insight also to my live streaming bros. On one hand, when we do ads that are direct-to-workshop, that's the heaviest ass, like, hey, come on to Vegas. That's pretty, you know, it's going to have a hurdle, et cetera. Now, when we have a scaling roadmap, which you may have seen ads for, the scaling roadmap has lower immediate ROAS, but over a 60 - or 90-day window has superior ROAS to direct-to-workshop.

5:22In addition to that, it also has 10 times the reach. Because getting somebody who's a little bit like, Somebody who's like, yep, I want to come to a workshop. Like they've already consumed, like that's almost like, it's almost like a warm audience retargeting more than it's like an ad and a process that like nurtures, you know, prospects and then, you know, warms them up, provides value, et cetera. And so I think if you want to broaden kind of like the net that you're going through, just make the ask that you have a little bit lighter. So I think one, you've got your direct, if you're doing one a day, I would do like maybe two a week of the direct one and then do the remainder of them as posts that are lead magnet-centered, like seven tips to fix this or whatever.

6:00And I'm sure you can spend 100 of those things. It's not that hard. And then the triage question is like, hey, are you here for free stuff or do you want to solve the problem for good? And they're going to say, I want to solve the problem. And you're like, great. And then you're into a sales conversation. That's great. And then at what point would you start retargeting ads? The thing is, okay, this will be great for everybody. So again, I don't know if you can see my thing. So if you think about your audience is this pyramid, right? The people who are buying from you right now are this like tiny little top 1 % here.

6:28And so there are some things that, there are some actions that could get you to convert just a higher percentage of that 1%, which means that like we could make the well or the pyramid larger, which we would do by posting more times and making better content, right? Or we can keep that pyramid the same size, right? And then we can move this line of what percentage we're converting and make that a little bit deeper. When you add a sales team, that converts a higher percentage of the audience. When you add ads, you're going to convert a higher percentage of the audience because you're just going to have your ads shown to a bigger percentage of people in that sphere.

7:06Right? And so it's almost like reaching into forward revenue and pulling it forward, which is fine as long as you're filling up the bucket. Right? So I would... Right, you get what I'm saying with that? So you will absolutely make more money if you have a sales team and run ads. No question. but then you will hit another plateau and you will still be limited by the growth of your organic unless you create a true cold traffic acquisition channel, which is a different monster and beyond the scope of right now. All right. And so my recommendation is I would want you to double your content. I don't want your business to go down.

7:37Keep one CTA as your direct to book a call and keep the other and make the second CTA for the lead magnet and just do two a day. Sounds good. Cool? Sounds great. All right. Rock and roll. Appreciate you, John. Awesome. Thank you. Yeah. Thanks for calling Hermosi Hotline. All right. So let's take a little, let me look at the chat. What's up, guys? Okay. So as I build a personal brand, is it better to become an authority in a certain skill and then start posting content? Or is it better to start posting content without being authority in that skill? Great question. So my perspective on this, and this probably will differ from other people's, but I can only explain what I do, right?

8:14And the kind of thinking process behind it. I never want someone to question whether I'm legit or not, right? And I think that way, and maybe it's because I just have like massive insecurity, who knows? But the reason that I tend to always start with proof, right? And so I would rather, like, and if you don't have external achievements, right, then you need the achievements to be effort-based rather than external, okay? So what does that mean? So instead of saying, hey, I did a$100 million launch, that's an external achievement. Everyone can see that. Great, lots of money, etc., right? I could say, I made 35 ,000 pieces of content.

8:43You can control that. Now, whether you did a good job or not is a separate thing. But when you do effort-based achievements, it's kind of like grind or pay, right? And so in the beginning, you don't have the money or the proof to do it, so you have to grind. And so grind-wise, it's like, I'm going to make 35 ,000 pieces of content and document what you're learning along the way. That's fine. Like, that's the game. And so that will be kind of phase one. Phase two is be willing to work with people for free. people spend way too, like, I'll say this differently. If you're getting started, every single business to this day, I still start with free stuff because I want to get feedback from people.

9:21I want to know what they like, what they didn't like, what their pain points are. I want to figure out how to smooth out the process. I want to figure out all these different things. And me trying to guess at that on my first shot and ask people to pay me, I'm like, I don't want to do that. I'm going to have a bad reputation. I don't want it. Right? And so it's going to take you so much more time. Think about this. For you to get 10 customers who pay you with never giving anything away for free is going to take a long time. You getting 10 people to start working with you for free and then using the 10 testimonials you get there to then get your 11th, 12th, 13th, 14th, 15th, 16th, 17th, 18th, 19th, 20th customer is going to take you less time to get that 10 paying customers if you do 10 for free first of whatever it is that you sell.

10:01So that's my two cents. More people doing all your stuff is not going to make you less money. I do think, though, that big, big, big picture, it also kind of depends what you're going to get into. If you want to be, it's like, I want to be a business coach. It's like, well, dude, just look at the people who have the most credibility in business. They have some big, giant thing behind them, right? I would not try and compete there. I would try and compete on a much smaller pond that I can be king of. Not even a pond, like a puddle. Just be king of this itty-bitty puddle. And create proof around that little itty-bitty puddle, and you will find people who are willing to pay you because you are a specialist and because they have access to you.

10:41And I'll give you one more tidbit for those of you guys who are starting out, and then I'll take the next call. So when you're starting out, you always have an advantage. Every position has an advantage on the board of the game. So if you're a super baller, you're a G or whatever you want to say, right? My position is to say, don't go with Weenie McGee over here. He's in his mom's basement and doesn't know what he's talking about, right? I have been doing this for however many years and look at all this credibility and look at all this proof, right? Cool. Weenie McGee, right, isn't going to be in his mom's basement and he's going to be like, don't hang out with Alex.

11:13You're never going to talk to Alex. There's no chance, right? You're going to be talking to someone three levels down from him and you're just going to be a number to them. I mean, that's what I would say. Of course, we don't operate that way, but like, that's what you would say, right? And so So if that's your position, then you say, dude, you're going to get my phone number. And so it's not, am I better than Alex? Of course I'm not better than Alex. Like, own that. Of course I'm not better than Alex. But I am better than the third rung down on his company, and you're going to get my phone number, and I care about my reputation, and that person doesn't.

11:43That's where you compete. And so that's how you can start getting a foothold, which is why there will always be room in the market for people who are new, because people who are established are going to have their position to play. Cool, cool, cool. Classic is going to say we're the classic. We've been doing this forever. And the people who are new and upstart is like, hey, I'm a young founder. Just try my soda out. If you like it, tell me, give me feedback. I'll try and fix it. That's the position. Both can win. And for anyone who's like, I don't think this will work or something like that, it's like, dude, like I was in the same position.

12:10It's not like I'm 50. You know what I mean? Like I started at zero too and you just have to outwork, right? And you got to say like, I'm willing to do more than those guys are. In the beginning, people don't want to say it. I'll do it for less until eventually you have proof. And then we have proof. It becomes a virtuous cycle of charging more. Okay. Caller two. Steven, let's rock and roll. Nice to meet you too, Ben. Because the team collected your numbers. So monthly revenue right now is 54K, right? Yeah. All right. And then ad spend is 3K. That's monthly. Yeah, per month. I got you. Ads is 3K.

12:41Great. Per month? Yes, sir. Per month? Industries or medical? What do you do? Custom insoles? Yes. I'm a podiatrist. Oh, cool. Yeah. A buddy of mine's dad was a podiatrist back in Baltimore. Okay. Okay, the offer is insoles for 300, so this is your AOV, call it, right? It's 325. I know that you're in pounds, but I'm just using writing dollars, so it doesn't really matter. Okay, constraint is Google Ads are underspent. Okay, so you can't spend more than the 3 ,000 a month. Is that correct? Yeah. Okay, are you local? Yeah, I do. I have a Google Ads specialist that is running my Google Ads, so that's something I never learned.

13:18No, are you local? He told me that the... Local in the Netherlands, you mean. Like, are you running ads for a local business? Are you running this ad spend nationally? Oh, sorry, for a local business, yes. Okay, you're local. So people do that, they come in, they get measured or whatever, and then they get insults, correct? Exactly, yes. Okay, got it. So they're saying they just can't spend more money? Yes. Okay. I don't know if I believe that. How big of a city are you in? Like, what's your 10 mile radius? I thought he said around 10 kilometers, something like that. But I was also thinking from, yeah, maybe isn't did doesn't have the skills just to to to to scale the campaign so to say so i am already in touch with in general our marketing agency that is already checking in with another google ad specialist to see from if they can duplicate certain campaigns and get better results yeah so i'll say this man so i mean congrats you're doing you know 600 a year i would strongly recommend you learning this stuff because it's not that hard like it's really not that hard okay Because then you're not going to, like, right now, you're saying the constraint of the business is under someone else's control, right?

14:25That's a tough position to be in. So I would want to own this myself. And I'll tell you a story that, like, really changed my perspective. I haven't told this story in a really long time, so this will be a good one. So I went to this meetup where everybody was doing, you know, eight figures or more. And at the time, I wasn't. And so I, like, snuck in. They were like, no, we think you're going to be, you know, a big baller. Because whatever. They recognized the magic in me. But anyway, so they let me come. And what was really interesting is one of the guys who was making the most money in the room when he went up and presented, he said this really interesting thing.

14:55He said, I would encourage everyone here, because someone would ask him, like, hey, so what are you doing to reinvest in your education right now? He said, well, at the level that I'm at, and he was making, I think,$30 or$35 million a year. I remember thinking, I was like, oh, my God, this person is God when I heard that. But he said he was making$35 million a year. And he said, I would encourage you to write down a percentage of your income, whatever percentage you're comfortable with, and put that as your learning budget. All right? And that learning budget, he said, you should spend that every month and expect to have zero ROI on nine out of 10 things.

15:23And then the 110 thing will make you 10 times the money. It's almost like doing a venture bet on yourself from an education perspective. And so I took that to heart. And then I started spending, saying, okay, you've got your$3 ,000 a month. I want you, Stephen, to do$3 ,000 a month that you control. And you say, like, I'm going to spend$100 a day. And I'm going to see if I can beat this guy. Because I promise you, when it's your business, you'll beat him. like you'll suck in the beginning but you'll quickly learn like PPC for Google Ads is like really not hard like they make trillions of dollars to try and make it easy for you sorry go ahead that's great advice man thank you definitely go start with it yeah and the nice thing is that no matter what if you spend more money on ads you're going to make more money so even if you're inefficient you'll still increase top line but I think that if you just try and get good and good and good at that and then I would also reach out to whatever these other agencies are I don't mind spending more on this because again, the big picture is like, you have bigger goals than this, right?

16:18100%. Right. So just don't let your ego get wrapped up in your one month or two month profit. Like that profit will be there if you choose not to spend money. It's always there, right? So I would want to take as much of that profit as seemingly possible. And I'm just, I'm telling you how I do things. I take all that profit and I just see that as like, this is my opportunity to reinvest in the business. When the business is small, reinvestment is you. You're the reinvestment. And so that's where I'm like, okay, I'm going to pay my current agency. I'm I'm gonna tell both of them, I want them to teach me what they're doing.

16:45And I'm gonna spend my own budget too. Yeah. Yeah, so that was originally already my plan. So I had Justin call this afternoon with the new agency. And I told him from, look, if we go in for with a Google ad specialist, I want to have weekly calls to at least know what he's doing in the ad account. So I just can follow the guy. And that ever may ever have new ideas that I can just try out, but that I understand what he's doing. Let me tweak it for you. Let me tweak it for you. Let me tweak it for you. You're going to ask, how often are they going to be really doing work on the campaign? Let's just guess it's twice a week.

17:20I'm going to do something even better for you. I'm going to ask that you don't even work on my account. I'm still going to pay you. And I want to have two calls a week, and all of the work is going to be done on those two calls. That's it. They don't have to do any other work for my account. But I want to be the one who controls the mouse, and I want them to tell me what to do and why they're doing it. That's a very good idea. Okay? This is how I learned how to run national-level Facebook ads. This is how I learned how to do it. I powered an agency and I said, I'll do whatever. I'll show up whatever hours you want.

17:46I was like, but I control the mouse. And you tell me what to do and I'll do it. And I recorded my screen and I would ask questions along the way and they would tell me. I'd be like, okay, so why are we doing this? And then within six weeks, I was like, I get it. I don't need this guy anymore. That's genius. Cool? Yeah, sounds good. Sounds good. Definitely going to start there. Rock and roll. Congrats on the business, Steven. Yes, thank you, Alex. You bet, man. Thank you so much. Rock and roll. Okay. Rock and roll. Bye-bye. Yeah. All right. What type of lead magnets or funnels do you make for them?

18:13Partnered with my wife on her business. We sell jewelry with purposes. Partnered with my wife on her business. We sell jewelry with purpose, natural stones. What would be the best content to post for advertising? We use TikTok. All right. Done. Bro, what are we talking about here? This is super visual. All right. What are we talking about? All right. So number one, I mean, TikTok, TikTok shop for sure. Like if you're not doing that, you should be doing that. Number two, I'll bet you with jewelry, you probably have very good margins with it. And you can probably pay really aggressive affiliate commissions to any other TikTokers who will repost your stuff.

18:48And so I would look at, are there small things that I can give out for free? I know that's heavy, but people will be willing to do it. I don't know what revenue is right now, by the way, Junior. But I would also double this on Instagram. And I would want to do like as many collab posts as I can with other influencers with them trying on different things. And I think the big thing that I would want to do is I want to tell the narrative. I want to tell the story behind the jewelry. So I'll give you an example. So if you think about selling merch, right? Everyone has t-shirts. There's nothing sexy about a t-shirt.

19:17And if a t-shirt just has a logo on it, again, it doesn't really matter. But if you say, let me tell you the story behind why this logo or why this saying is meaningful. And so what we have to do is basically pair this commodity of jewelry with the meaning that you then ascribe to it or the narrative or the story that you put on top of it. And so two years ago, I did my book launch for the Leeds book. And some of you guys might have been there. And I sold like millions of dollars of hats. All right. And people were willing to pay$100, essentially, for a hat. Now, obviously, they got two other books and the hat was free.

19:49But like fundamentally, that was what happened. Right. And so what's really interesting about that specific event is that I then spent like four or five minutes just saying like, let me tell you about why I wear this hat, what this hat means to me. And so after explaining the meaning behind the hat, then way more people were willing to buy it versus like, hey, do you guys just want to buy a hat? And so I think to the same degree, you need to do that within your content. And you're like, well, what kind of content should I do? Like show the jewelry, show people unboxing the jewelry, show people picking out between different kinds of jewelry, and then you telling the narrative behind each of them in terms of where was the stone sourced?

20:17Why did you design it that way? What does this chain do versus this chain? What do these metals do? Like there's so much to talk about with your content and don't be afraid to repeat stuff. Just don't be afraid to repeat stuff. And one of the really interesting things with content is that I'm gonna give a Dave Ramsey example, but you need significantly less variety in your content than you think you do. So think about what Dave Ramsey has done for the last 35, 40 years, however many years it's been. He has told people to spend less than they make. That has been his core message. Don't go into debt, spend less than you make, cut off your credit cards, pay off your loans.

20:49That's more or less. Obviously, he's the seven baby steps, and that's awesome. But my point is this, is that people still tune in every day when they know what the message is because they're like, I wonder how this will apply to a stripper. I wonder how this will apply to somebody who won the lottery. I wonder how this will apply to somebody who's got a kid who's going to college now, and it's a good college or it's a bad college, right? And so the thing is that you can have a single framework or single core product or concept, and the variety will just come from the examples that you use. Cool?

21:18All right. Third caller is Liz. Hello. Hey, Liz. What's up? I'm good. How are you? Excellent. You're on Hermosi Hotline. So you've got monthly revenue,$600 ,000 a month. Congratulations. Badass. Badass. Thank you. Welcome. Rich, you gotta buy me some jewelry from Junior. All right. Okay, ad spend is 150 ,000 a month. Okay, a little high there, got it. All right, what are your margins right now? They didn't ask that, but what are your margins? Well, before we started, so I've been preparing for a million a month for the last three months. And so I started building the fulfillment team. And in the last few months, my margins have been 25%.

21:55But before that, it was 45%. Yeah, got it. So in the last few months, I've been trying to scale. Build a theme, try to spend more on ads, have a manager. Got it. So that's it. Okay, industry is marketing automation. Okay, so who's the target? Many chat funnels. Oh, many chat funnels. Okay, got it. Thank you. Makes it easier for me. Okay. Many chat funnels. Okay, great. And then your offer is, it's for e-commerce brands. Okay, cool. And they got to be doing over$10 ,000, sorry,$25 ,000 a month in spend. That's their requirements. Okay. Yes. 25k a month. Okay, what's your price? 6k a month. 6k a month.