Ryan:

We're just shy, just shy of a million right now.

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Chase:

And we said, we'd do it in a year and we did it in half.

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Dylan:

Ooh, Oh man. I bet she's a happy camper over there.

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Chase:

You would think, but stuff happens to your business when you sell twice as much as you think.

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Dylan:

Oh, I can only imagine. I mean, of course, when the ads are doing good, there are probably so many other factors, like inventory, shipping, to where once you scale it that quick, I imagine it's going to cause some dumpster fires along the road you got to put out there.

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Chase:

It's a question I always ask during kind of discovery or even prospecting with new clients. It's like, Hey, we double your sales overnight, can you do it? Are you going to have supply chain issues? Do you have enough inventory? People don't think about that sometimes when they're talking about scaling.

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Dylan:

Oh I know, I totally get that. And one thing I wanted to mention, that you kind of brought up, is the AOV. Is that something that you all work on? Hey, let's boost the AOV for your store. Do you all come up with the kind of deals there? Is that something you all kind of get into or do you leave it to the clients on that side of things?

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Chase:

Out of the box, we only work with Shopify stores. So out of the box, Shopify is garbage that upsells and most of our clients are into the plus space. So once you get to plus you get access to Shopify scripts and then it's a collaborative effort. You have to think about what their product is, what they're selling, how to approach upsells, cross sells, down sells, bundling. So there is no one size fits all there. It's think about it, build the strategy, and then build it on the front end and make it all work.

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Zach:

So Chase, how do you talk with your clients about this inventory supply, ship, scaling issue? The Rich Ad Poor Ad Podcast, we get to dive into a lot of the financial principles behind scaling, and growth eats cash for breakfast. Customer acquisition is going to get... The faster you're growing, the more money it needs to fuel the fire. So how do you go about that in whether it's your client selection, your vetting process, what does that look like? And then also, how is this particular client that you said you're going to do a million in 12 months, you're doing a million in six months, like what are they doing to just scramble here to keep up?

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Chase:

So answering the first question, setting expectations is the number one way to keep a client around for the long time and brushing through the hard conversations in the beginning is the quickest way to lose a client. No one says that this is going to be all fun all the time, you got to have some hard conversations. And one of those conversations is can you afford to grow as fast as you want to grow? And it isn't a bad thing to grow slower, in my opinion. Some people are all glitz and glory about these crazy ads and crazy numbers, even the ads we're going to talk about today, do some crazy numbers, but you got to be able to afford it.

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Chase:

Liz has been working on this brand for years and she's bootstrapped and she's got money in the bank to self-fund herself through doing this for a long time. Some people aren't there. Some people need to take on credit. Some people need to take on debt to achieve these goals. I'm not a CFO, I'm not a business manager for brands. That is something that I would never give anyone advice on this is how you should finance this. That's not my place to say. My question is, can you afford this and have you thought this through?

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Zach:

I'm going to put you back on that one, because I think we're talking about essentially the cashflow and capital conversation. Right? And I think that the classic kind of agency client relationship has been... That conversation, it's actually been completely ignored. And I think in today that conversation is starting to happen a little bit, like if you're just like rewind a couple of years, like even just a year and a half, two years ago, that wouldn't have been even a consideration in the discovery call. It wouldn't even have been a conversation. I think that the agencies that are going to really retain clients, like even longer, aren't going to take it to the next level over the next couple of years is have that conversation, but then also bring the solutions to the table because your client's set. Right.

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Zach:

And you kind of know like what their strategy is, and you didn't necessarily need to bring that solution for this client, but there are definitely brands out there that don't have the answers. Right. And it's kind of like, Hey, have you thought about this? And they're like, Oh no, this is a great point. What should I do? And I think that's an opportunity for agencies to really come in and become more of a trusted advisor. It doesn't mean you have to become like a CFO overnight. I just think that art of a CFO's job is setting budgets and is also part of really increasing those budgets and also like kind of being a cheerleader for that, like, Hey, you should spend more here. Like this is winning, or you should spend less here, but the ones that really think through how, right.

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Zach:

And whether they know the answer or they know someone that has the answer is the ones. I think the frustrated agency is the one that's like, Hey, you should do this, and then the client just stops working with the agency because they ran out of cash and there was no solution or conversation there. I don't know. What do you think?

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Chase:

Thanks for pushing it back on me and giving me a tough question. You're not doing your job if you're not doing that. So obviously my original answer was a lot more prepared. This answer is not, but it's essentially, I know what financial products exist in this market, very well. I know it from like what we're doing at our agency, how we're scaling our business, and I can give them insights as small business owner of how we're growing our agency. It not like a one for one on how you could grow a brand. There are a lot of parallels. I know how we accessed cheap money to grow. I can give recommendations, but there are goals, and we follow the attraction model at our agency. So we have set things we're working on each quarter.

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Chase:

So I don't get distracted by, for example, what's the best product to tell our clients to grow their business. That's not something that's on my radar because I don't care right now, because I got to have my true North for the agency and what I'm working on to grow my business. With that being said, there's like eight or nine quick funding solutions in this ecosystem. People can plug into your Shopify store and find where you're profitable and how much money they want to offer you and what terms it is. Getting money in this ecosystem is so easy. If you have a proven track record and you've got product market fit, finding money isn't hard.

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Dylan:

Oh, man. You're speaking Zach's language right now.

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Zach:

No, I love it. So let's talk about the other part, let's talk about budgets, and how do you go about helping even somebody that's maybe not at that phase of has traction, has a proven winning ad campaign, and it doesn't necessarily have access to that quick money. How would you recommend they think about funding it in terms of getting started, whether it's creative, or test budgets, or agency fees, what's that investment look like?

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Chase:

That's a great question. I think if you don't have product market fit, and I'm going to say product market fit comes down to, you're not making organic sales, you don't have stuff coming in. If you're not selling every month repeatedly, you don't have a business. So you shouldn't be advertising it. You should figure out what your offer is, you should figure out what your product is, it should start selling on its own, and then you can pour gas on that fire. That's marketing, that's advertising. If you don't even have a fire going yet, you're just wasting money.

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Chase:

So where should you start with things? Facebook is getting ridiculously expensive. Everyone reads these crazy case studies where people are getting 20 X or something just right off the rip and yeah, that's cool and all, but they're not talking about all the 20 iterations they did before it that were failing and the years that they've been learning how the Facebook ecosystem works. It's hard to make money these days and if it was so easy, why would We be on this podcast and not running our own brands? But to like set expectations, I'd say you get what you pay for when it comes to hiring an agency.

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Chase:

If you haven't done the work yourself, I think a lot of brands want to get started, they want to run before they walk. I think it's really worthwhile for brands to actually learn how Facebook ads work for themselves before they try to outsource it, because you're never going to know if the KPIs these people are talking about are realistic, or if, you might not even know what language they're talking at the end of the day with the KPIs they're parroting back to you. As far as budget goes, it's insane. Ryan, you're more in the weeds these days. If I had a brand and we were doing like 10 K a month with a $75 AOV, where would you budget things, in a strategy, if we were coming to the table like that?

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Ryan:

Yeah. I actually want to press pause on that for a quick second to go back to the original question and working with a brand and in the conversation of figuring out what their budget should be, and Chase kind of touched on this a little bit, but I've worked with some brands before, outside of working with Electric Eye, and it's understanding what the goal of getting into those ads is supposed to be. So if you're at a point where, or if you're not at a point, and you are getting into Facebook and Instagram advertising, if you're in it and you're like, Oh, the metrics that I care the most about are like my reach and impressions, and you're just like, I'm trying to just get a lot of people to see this thing, and you're not necessarily paying attention to the metrics that, I don't want to say matter the most, but in a sense do, when you're talking about spending money, like talking about conversions and talking about your CPA and talking about your return, like if you're not focusing on the right things, if you're going into setting budgets with not the right goal in mind, not the right intention, that's another thing that's just going to like really, really throw that entire process off because I've worked with people before that are like, we just want a lot of people to see this.

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Ryan:

And it's having a level set conversation with somebody to say, well, maybe this isn't the right time for you because you're not, like Chase said, driving. You don't have that product market fit yet. You're not driving this organic sales on your own. So at the beginning of this entire process, talking about budgets, talking about setting this, that's another thing that kind of factors in here.

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Dylan:

Oh yeah. I mean, I love what Chase said about the marketing really comes into it for the fuel for the fire. I feel like a lot of people don't understand that and even running before walking and you're spot on, so where people just want to jump in and jump the gun is so fast to where it's going to cause a huge dumpster fire probably way quicker than you expect it. So I feel Like those are good expectations that kind of paints at the beginning to kind of really shape that relationship because I mean, shoot, I would imagine you all have had clients for a while, so you've got that expectation game all lock down.

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Zach:

[crosstalk 00:15:04] I remember the very first agency that I hired, and this was like when I was a marketing manager at a tech company, they came in and they were like, we need 15 grand media budget and we need a 5 K setup fee and it's 5 K a month, and we're going to blow through that test budget in 45-60 days. And I was like, wow, he's like what, 30 Gs to get the data that you need to know like what's working and what's not working. And at the time I didn't really understand it.

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Zach:

I was like if they just really need data, but now I'm like, you got some brands that'll be like, well, can I spend that like 30 K over several months and like learn over time and like use cash to figure that out. But if you want to go quickly and you want to learn fast, you got to spend that money fast.

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Dylan:

Do you guys have those kinds of similar conversations with brands where you just got to say, look, this is our initial test budget. You're rolling out a brand new campaign and this is going to give us the data that we need.

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Chase:

It really depends on where they are in their business life cycle. That's like the term I like to use. Like if you're a startup, you're one thing. You've got product market fit, that's another thing. You're past a million, you've got some things figured out and that's a whole other conversation. For startups, my expectations are setting the floor at garbage. It's like, Hey, if we break even after three months, we should be happy. Like, it's that crazy trying to start from zero if you don't have any data to back it up. Like, that's the floor, like that's where we're setting the expectation, and if we can destroy it, sweet. But I don't want someone to put all their eggs in a basket here with the startup and being like we're going to see five X off the rip. I'm going to quit my day job. It's like, no, that's terrible expectations. I'd rather under promise and over deliver.

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Dylan:

Oh yeah. I see that all the time in the industry, so where it's like, Hey, we're going to guarantee five X out of the gate, where it's like, man, you don't even know what their KPIs are. So it's never a one size fits all regardless of, Hey, I got 10 e-comm accounts but all the strategies and game plans are completely different. So I mean that's a great way, because shoot, it's those expectations, would you rather have a client for three months or shit, three years? So it really shapes that whole relationship there. I love that.

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Chase:

Yeah. I just...

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Zach:

Awesome. I want to skip here over into this next segment. I appreciate the perspective on kind of the agency's role in not only budgeting, but also the agency's role in making sure that the client can handle that growth.

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Zach:

I think it's good both from the brand's perspective in terms of providing value add, I also think, Chase, it's good for the agency and they should be doing it, because quite frankly, you don't want to work with the clients that aren't funding and they're going to have to cancel in a couple months time or in six months time when you blow up their business. So, but that's awesome. Let's dive into this Rich Ad Poor Ad segment. Which one should we kick off first, Dylan?

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Dylan:

Shoot, let's go ahead and dive into the rich ad first. I feel like we always bash a poor ad, but let's go ahead and start strong. You know, I like these, I mean, we're going to go with some context. I appreciate all the insights, you all put the audiences, the feedback, you all made it super juicy for us.

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Dylan:

So I'll go ahead and kind of read the copy out so people have some understanding, but shoot, as I mentioned, the brand is Pebby Forevee. Hey, beat the summer heat and get into that 4th of July spirit with our new summer collection. Use the code summer 15 to take 15% off your purchase, all proceeds to benefit the Columbus Urban League. So sweet, some super, compelling, looks like a nice little holiday sale. Go ahead. Let's break it down you all.

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Chase:

Cool. This was Ryan's mastermind. Honestly, this was less than a month ago. No, 11 days ago.

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Dylan:

Oh, wow. Yeah. I mean July 4th sale. Heck yeah. Well Ryan, let's hear the man behind it all.

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Ryan:

Yeah. So, Pebby, she is a rock star, and just like Chase mentioned, she ripped out content like crazy and we obviously center a lot of these things around holiday and being able to work, and you sort of add into some sort of like gifting holiday, and I say gifting like both self gifting as well. And so for her, we wanted to one, highlight that she had new stuff that had come in for summer, and we hadn't really talked about it at large yet. So wanted to highlight the new stuff that was coming in. We wanted to kind of hit on its summertime, it's 4th of July, there's a certain kind of energy and a vibe that comes around that, and I hate to like talk in these kind of airy, fairy terms, but get a little bit of that when you're writing, particularly when you're writing copy, and then with Liz and with Pebby here, we have seen some success over time with this 15% off deal that she runs. And so we were doing that.

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Ryan:

And kind of highlighting all of that in as quick as possible, the copy is long enough, it's not just shorthanded, but it's short enough that it fits into this space. And then you read the headline too, about proceeds to benefit, the club is Urban League. So she was giving some of her profits from the last month and a half, I believe, to the Columbus Urban League. She's based out of Columbus, Ohio. So in the ad front of things, we wanted to highlight the holiday, wanted to highlight the sale, and wanted to highlight something that she was doing as a business.

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Dylan:

Now With the actual ad itself, being a static image, it's a shirt that says, just take it easy, did you all kind of test this with others, because from being this type of ad, regardless of it being a sale, I'm surprised to kind of an image like this would kind of be that top performer. Can you all kind of give some more insights on that?

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Ryan:

Yeah. It's an interesting model here and Pebby's really known for, she does these t-shirts, they're side slit t-shirts, so there's just like a big crease up the side, and that's her like core product. We know that, we've seen that, and they're all kind of a different take on like a graphic tee, essentially. And they perform incredibly well, book just in like raw sales, like through her site. But you know, we've tested that against, and we'll talk a little bit about this when we get into the poor ad as well, against some of her other products and her clientele and the people that buy, they just want to see it.

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Ryan:

They're not as drawn in and they care a little bit less about, I think, lifestyle imagery is a big thing that's brought up when you talk about ad creative. Her core customer is like, I want to see it, and I want to... Liz does almost all the modeling herself. She takes most of these photos too. So they want to see her product, they want to see what it says and that's it. And it does really, really well with all of her side slit tees, that I said are also graphic tees in a sense.

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Dylan:

Yeah. That makes total sense there. Heck yeah. Now when it comes to the kind of numbers behind the scenes on this, was this an ad that was getting a 3 X, a 10 X, a 30 X, a 100 X, what's the kind of go to? Being a sale, I would imagine the numbers were pretty hot there.

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Ryan:

Yeah. So this ad by itself was hitting above a 15 X. I won't say how much above a 15 X, but it smashed it pretty much.

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Zach:

Now was that blended or is that just bottom of the funnel?

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Ryan:

So that's just actually, that's not even blended, that is this ad in this ad set. I pulled specifically from one ad set on Facebook for this timeframe. So no, not blended. That's raw just for this ad in this ad set.

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Dylan:

And this is prospecting only, correct?

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Ryan:

Correct.

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Dylan:

Man. Heck yeah. That's super solid there. And how long were you all kind of running the sale for? Was it like a week, a month?

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Ryan:

So this sale, I ended up running close to 21 days, not quite a full three weeks, but we got it started well in advance of 4th of July, and then ran it through the 4th of July weekend, and then turned it off. So actually think it ended up running, if I'm looking at this correctly for about 16 days.

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Dylan:

Okay. Shoot. Heck yeah. Well, I mean, Hey, for being a sale and getting in that 15 X range, I mean, that is what we call a rich ad. Let's go ahead and dive into this poor ad, because you know, I think it's time to roast something up a little bit.

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Dylan:

All right. So just so everybody kind of has some context, we have some leggings, of course, spring is the perfect time to treat yourself to a little style update and this collection is everything you ever wanted. Shop now. Look short, sweet, simple. It pops on the Instagram side. What made this a poor ad? I'm kind of curious now.

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Ryan:

Like I mentioned here, her core product, her core customer, is really into the side slit tee, so there's a piece of this puzzle here that we run into and that we're showing a pair of pants and her core customer is all about tops. The other thing about this too, is the copy here is... We talk a little bit about a new collection, kind of, we don't explicitly state, Hey, this is new, even though at the time she had brought in new product for spring, it's more self oriented and sometimes buying behavior and shopping behavior, I don't want to get too much into psychology behind all of those things, but sometimes there's a little like weirdness about people being like, Oh, I'm buying something for myself versus kind of framing it up in a different type of way where it's more a gifting type of messaging.

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Dylan:

So it's just completely different than kind of what you all's initial game plan and kind of what those hero products are essentially.

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Ryan:

Exactly.

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Dylan:

That makes total sense. So how bad did this one kind of flop here? Did you all have a nice test budget behind it? You kind of let it run and how bad this one do? Just serve up some context.

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Ryan:

Yeah, we didn't put too much budget behind it, but it definitely, it was not good. There was a few hundred dollars here that were lost. And thank God that her good ads are really good.

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Dylan:

Yeah. So, with it only being a couple hundred bucks loss, was this kind of more of a test that let's try these kinds of products out? Was it kind of a little small test bird or was it something saying, Hey, let's go ahead, come up with a campaign or a strategy for the legging side of things, or it's just kind of like, Hey, let's test this out and see what happens?

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Ryan:

So this was kind of a test in a multitude of ways and I don't want to go too deep into the strategy side of things, but this was a test in some of our creative in showing product that wasn't exactly her core product that we knew did really, really well.

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Ryan:

This was also a test in that we serve this ad up to a slightly different demographic and a slightly different audience than what is necessarily her core audience previously. So yeah, there wasn't a huge amount of budget thrown this way because we knew it was testing. We knew we're kind of moving outside of core demo, core product, core copy, all of those things, and obviously kind of proved out where our bread and butter continues to be.

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Dylan:

Yeah. I mean, that makes total sense. And I mean, to kind of recap, I mean, once you get those wheels spinning on her kind of hero products, there's no reason to kind of reinvent that wheel. So I mean, controlled testing is the best way to kind of do it, and it sounds like you all had that kind of button on lock to say, Hey, this is not working, let's stop losing that money. Let's go back to what was working and kind of scale that up. Does that sound about right?

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Ryan:

Yeah, absolutely. I mean, the context of it was we, exactly what you said, we know what's working, let's see if there's an opportunity if we kind of veer off this path a little bit to really expand out that audience and expand out the funnel at the top and bring some more people in and this was not the avenue to do so. Not to say that there are not avenues that can't do that, but this particular one just didn't work for us.

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Dylan:

Well snap. I mean, that makes total sense there. Well, Hey, that's quite a rich ad, quite a poor ad, some different strategies there. Thanks for kind of diving into that, Ryan. I mean, shoot, that was super juicy.

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Zach:

I kind of wanted to touch on something. You can't have a rich ad without testing a bunch of poor ads. It's literally impossible to do these days. No one's going to get started and just only get rich ads. I don't know.

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Ryan:

Not if you're Dylan Carpenter. [crosstalk 00:29:14]

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Dylan:

No, I mean, I think you're spot on. I mean, shit. I feel like when you're testing shoot, maybe 20, 30 ads a week, or even a month, I feel like you're really going to have one or two or three that maybe hit. And I mean, let's be real, those are going to bring in, shoot, 50, 60% of the overall ad revenue. That's a great thing to bring up because you're never going to have one ad it's a home run, so you really got to test, but I mean control testing models the way to kind of go about it. So, I mean, shoot, Chase, that's a killer little plug in there and Hey, shouts out to that one.

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Dylan:

But man, that was super killer you all. I mean, how can everybody find you, what's the website, the best way to kind of get in touch with you all? We'd love to kind of give you a little plug just in case somebody's kind of interested in working with you all.

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Chase:

Yeah. Sounds good. So the agency is Electric Eye. You can visit us @electriceye.io. We got a bunch of case studies on there and we can... You just hop on the phone with me, we can kind of talk some strategy and see if we're a good fit. And then if you like what I'm talking about and what Ryan's insights are, we've got a podcast, Honest Ecommerce. You can check that out on where podcasts are, whatever you're listening to us now, we're probably on it. And more information for that is found at honestecommerce.co.

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Dylan:

Well snap. We'll go ahead and wrap this up, but, hey, once again everybody thanks to tune into another episode of Rich Ad, Poor Ad. And man, we had a killer. Well, Hey Chase, Ryan, thanks for coming out, man. Everybody have a good rest of it.

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Chase:

Thank you.

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Ryan:

Thanks.