Zach (02:07):

Yeah, man. I'm pumped. Oh yeah.

Dylan (02:09):

So today we got a special guest, a good friend of mine, Mr. JC hight, the founder of high digital. He's got some crazy cool stuff, cooking in the kitchen over there in agency land. And I mean, you know, KFC and McDonald's how those are franchises. We're going to be diving into the franchise model for agencies, but these guys shoot pride touch 24 plus million a year in ad spend across Google and Facebook. So they're heavy hitters and know what they're doing. So I mean, JC what's good, man. Thanks for jumping on the podcast,

JC (02:39):

Dylan bro. Thanks for having me, man. I'm super pumped to chat with you guys today. Hell yeah. And you've got a killer view over

Dylan (02:45):

There and Nicaragua man, that looks fricking flawless,

JC (02:48):

Bro. I don't like the cold man. It is about 90 degrees all year. That's about what I like. So we've got to stick it over here. That is cozy man. So give

Dylan (02:58):

Everybody a little of, kind of, you know, who you are kind of what you're getting into. So everybody has some context.

JC (03:03):

Yeah bro. I was uh, you know, I started off in like the tech ed world ended up, uh, parting ways with a company. He got it over to IBM actually when I exited and I got into the ad world, this was like six years ago. I actually haven't, I haven't been in very long. That's crazy. And um, six years ago I joined a, uh, an organization and uh, got some equity and we grew to about 1500 clients, give or take about 300, uh, team members. And about three years in, I exited I, uh, and it wasn't, wasn't a culture fit. It wasn't the right fit for me. And uh, decided to part ways and got rid of the non-compete got rid of everything. And uh, man, we started height. We started from scratch three years ago, I think three years ago and maybe two months and 87, excuse me, 88 team members later. And the new one started today. 18 minutes later. We're uh, dude, it's been, it's been an incredible journey. We've been growing and learning and scaling and uh, and ultimately, you know, trying to figure out how do we, how do we create a more dependable, scalable system for, for agencies throughout the, throughout the world and specifically in like north and south America, how do we create something that's very scalable, but at the same time, same time, very sustainable in the market, which is a, which is tough.

Dylan (04:18):

Oh yeah. I mean, even before talking with you before this, I mean churn's a huge issue and I know you popped out some super juicy numbers to where you're making an impact on some agencies already, even this year alone, man, dude,

JC (04:30):

You know, this is one thing, you know, a lot of, not a lot of people know about franchising and how it works. And even myself, like do you to know nothing about franchising is like a tradition, but do some of the interesting things there, when you, when you decide are inquiring, like, man, I, I think I want to buy into a franchise model. One of the things is they have to be very accurate. They can't be, yes. You know, you heard about these, like I'm going to get you to 10 K in 90 days or a hundred K in two weeks or a billion dollars in 22 minutes. Like, do we can't say any of that? We can only speak facts. We can only speak things that we can prove. Why is that? Because it's treated as an investment, right? Like Dylan's buying into a system that is supposed to work.

JC (05:07):

What is the proof that it's going to work? Right. And dude, we launched this model. I think we were one of the first ones. We launched it in November and did our training for the first group of five in December. We're three and a half month dude. It's, it's been insane. The numbers we've been getting, it's been crazy, dude. How many cities are you in so far? So we just sold our sixth city. Um, and, and we're, I mean, we're maxed out like our goal. We kind of have it, not a waiting line, but you know, we're, we're approving them very slowly because it's dude, we gotta, we gotta make sure we're partnering with the right people. Because again, I got to disclose everything, right. And so if we get, we bring in Dylan and Dylan sucks and Dylan's agency crashes in two months now I got to report to everyone else in the future. Like, dude, I sold 10 and three of them went bankrupt or two of them went bankrupt. Right. And so it's dude, it's so crucial to bring in the right people at the right time and uh, you know, to really be able to make it happen. And what's

Dylan (05:59):

A sweet spot for kind of who these, you know, qualified candidates are that are good quality in your eyes,

JC (06:04):

Dude. Like this is, this is what's interesting. You know, when we first started, I was like, dude, no one that's big is going to jump into this, right? Like why would someone that's already doing 40, 50,000 in revenue a month jump into a franchise model. We've actually seen half of our agencies that have joined are already doing 35, 40 K and above, which is crazy to me. Why is that? Well it's because what we've seen now, like really digging in and like pitching this model is that a lot of agencies, they hit this like plateau mark. So you mentioned churn a few minutes ago. Churn is so crucial, really good agencies. Normally they can get where they can sell like six, 7,000 in new services rendered per month. Let's just dream that number. And what a lot of us don't realize is that our average churn over time, like national average in the U S is like around 10 to 12%.

JC (06:52):

So this is great. You sell 7,000, you, you, you net six, but then the next month you sell 7,000 and you net like 5.5 and eventually get to this number. Maybe it's around 40 or 50, 60 grand where you're selling, let's say you're selling four grand, but you have 40,000 in clients. You turn 10% and you're just rotating. Right. You're rotating. And it's like, now you've got to pick up the sales. Right. So, you know, at the original agency I was at where I said, we have 1500 clients do, we were losing 125 clients a month. So we had to sell 125 just to break even. Right. And so like these there's these tiers and so do the right fit, dude. I'm trying to figure that out myself, about half of our franchises have come in, you know, in that 35 to 40 K or above, we had, half of them came in at zero nothing, you know, or maybe they had like a hosting plan already sold and about half, excuse me, about a third, a third and a third have come in. And about 10,000 to 12,000 in revenue, you know, they're getting started, but you know, four or five clients

Dylan (07:49):

That makes total sense. So let's dive into the good stuff now. So of course in the podcast, we live to kind of dive into the rich hat. AKA, what's working good for you at this kind of point in time. So, I mean, what's working good for you over there,

JC (08:02):

Dude. I'll tell you what man. So, you know, we, we really focus on ad, spend a lot, you know, with Google it's super important. The more you spend an ad spent, the, the better the relationships, the better the relationships can be with those different types of channels, especially with Google, even more so with Microsoft and Facebook, nobody cares about, um, and so it was so freaking crucial what we've found. So we focus a lot on our ad spend at the client level. And how do we gaining that? The most, I think is really important and crucial. And dude, that's, that's through partnerships, dude. One of the, we all know that referrals are by far the best Legion and there's coaches out there that tell you like referrals are not scalable, but I'm here to tell you they are in and they're called sponsorships. Like how do I get some of the biggest brands and names in the world to talk about me?

JC (08:49):

Well, you can pay them to is one way. Now you can have enough quality where they just want to talk to you about it or be pretty enough. So they want to talk about you, but you can also pay him too. And we do we've we have crushed it in that our latest, our latest one is Ramsey solutions, Dave Ramsey, over there, dude entree leadership podcast, uh, their event, everything, dude, they talk about us four or five times every single time. The podcast, a couple of times in every episode do that. It's ridiculous, bro. Like, are our numbers on Legion? Like for a Facebook ad campaign, if you're wanting to get new clients, you're looking to like maybe $150 per showed up appointment for Dave Ramsey, dude, we're like 75 bucks. When I say like, I mean we're at $75 cost per appointment. Those are referral leads. Not some cold lead where they were sitting on the commode and like, oh dude, this looks like a cool ad. You know, like this is like somebody sent them, you know what I mean?

Dylan (09:43):

Yeah. And this is all from fricking sponsorships, man. I imagine. W w was it an easy one to close or was it a pretty tedious process,

JC (09:51):

Dude? I mean, it's just like anything else, right? Like anything worth getting is, is tough. Right? So like, I mean we, and we're constantly reaching out to different sponsors and different opportunities and going, okay, how can we make this work? What can we do? Right. And we're, we're really, we're specifically looking for either a paper account methodology or a paper lead methodology. Right. We're trying not to do too many of those where it's like 10 K up front and then maybe you get leads, maybe you don't. Right. And there's a lot of dude, especially right now, especially these guys that, you know, that maybe the big organization, like digital marketer reached out to me the other day. Right. And they wanted us to sponsor one of their podcasts. Well, all of these guys, they had these huge events, they had these huge circuits, so they didn't need sponsorships, but now those events are not doing so hot. Right. And so they're all looking for other ways to sponsor and get revenue, uh, with our other platforms. Right. Do you think

Dylan (10:44):

These sponsors, you kind of mentioned like, you know, these events are kind of, you know, just haven't been around, do you think these sponsorships are more valuable in the COVID era or after this COVID era, when there's going to be more in-person events essentially to where you're going to be sponsored for going everywhere and just kind of be on all these podcasts and names on billboards, that kind of style. If that makes sense. I

JC (11:01):

Think it's all about, I mean, it's, you know, the, the cost of events are really interesting. We're ad world is coming up here in a couple of weeks. I don't know what the podcast released. It might be after, before, but you know, ad world, our sponsorship there, I think it's like 30,000 bucks. Right. And we're like the keynote sponsor. So Seth Golden's on, on stage speaking, we're behind him. Right. And, uh, you know, we're, we're expecting some really high returns on, on that, but you know, it's a comp it's just like with anything else, right. Like it's going, okay, what is my cost per impression? So for us it's a stage, right. Or a podcast it's listeners downloads and of that, what is my cost per conversion to the site, right. Cost per click or whatever you want to call it. Uh, and then, and then you kind of going through that funnel and measuring it out, like, what is your, um, we treated no different than a Google campaign, right?

JC (11:49):

So we're looking at our cost per visitor on that specific landing page related to Dave, we're looking at our, the conversion rate of that landing page. We're looking at in the close rate of that. So what we found is like with Ramsey, dude, I mean, we have a 30, I think a 39% close rate on those leads hoof that's in month one. So that's not counting like, oh, maybe we close the next month. Right. That's stupid. Let's it's really, really good. Which means, yeah, even though I am paying less for that lead, I would be willing to pay much more for that lead. Right. Because it's such a strong lead for me. And so man events, sponsorships, those types of things, bro, we're going like deep into, and for us, it's all about getting, obviously expanding the business on the revenue side, but also expanding the partnership with these big channels. Right.

Dylan (12:32):

Oh, and you're hitting, you're hitting the jackpot over there. It's kind of funny. Cause I remember listening to Zach's, you know, pitches back in the data agencies and Hey, if your LTV is 50 K, you should be willing to put, you know, 10% of that to acquire that customers were looking at 5k right there to where, if you're getting leads for 75 bucks closing 39% in that first month, dude, that's like juicy

JC (12:52):

Dude. It's uh, don't tell too many people about it. So I got along contact with them. So there's nothing they could do. Nothing, I guess they would be. But dude, I mean, there's, there's so many opportunities like that out there. And I think podcasts are a big one. Dude. I think reaching out to podcasts. I mean, you can even get on the small podcast and say, dude, I want to sponsor it. And I'll pay you $75 per text in. And even if they're small, let's say they have a hundred visitors. I mean, if you get something, you get something. If you don't know doesn't matter, bro. And, and I think there's a lot of opportunities like that with smaller guys that are just trying to get the opportunity to make money on their podcast or their YouTube channel or their take talk or whatever. And you can build a model that makes sense for them and it keeps you in good shape.

Dylan (13:34):

Mm. I love this man. So that's pretty, let's go to the ugly now, man, let's dive into this poor ad segment with something I thought would just kill it. That absolutely flaw [inaudible]

Speaker 2 (13:49):

Oh bro.

JC (13:52):

So listen, I, uh, debating on saying this out loud, but, but I'm going to do it because most of your listeners honestly will, will disagree with me wholeheartedly. And especially the coaches listening will disagree with me bro, but I pushed, uh, published a video. Uh, I think it was in the, it was January, 2020 where I basically said that I thought Facebook ads within a couple of years would be gone, right? The way we know it today in terms of lead gen gone. And I think it's coming, man. I really think it's coming. Facebook is having a lot of issues and you have a lot of agencies and this is where w you know what Simon Sinek talks about. You know, the goal of success here is like just staying in business. You know, you can always scale. You can always grow, but the moment you go out of business, then you're dead.

JC (14:35):

You're done. And I think the security there of the channels is so important. If you're building an agency and 80% of your revenue is built on a product, a channel like Facebook, number one, their support is terrible. It's really hard. Number two, like it's, it's really unclear why an ad might be disapproved or an account got banned or whatever. Like, it's really having a lot of struggles there, right? And this is my 80% of my revenue, 70, 60, whatever. But if it's above 40%, I think you really have to look at those things. Not only that, dude, if you look, we did a, uh, I did a case study with, uh, WordStream put couple of years ago. And with WordStream we found, we stepped down on average with Facebook w with people running Facebook ads, the average turn is about 25% across the board. Now you can make any excuse up in the world.

JC (15:24):

Maybe the ads didn't work, maybe the account, maybe the objections weren't clear, maybe the expectations weren't set. It doesn't matter. 25% turnover month over month with Facebook, PVC was around 12 SEO was around 5%, but changes the game dramatically. And then you look at just their whole entire bidding platform for Facebook, dude. I mean, if you think about it, like discrimination is illegal in this country. And so if you think about Facebook ads, I'm going to show you an ad based on your sex, based on your location. I E revenue, right? This zip code versus that sip code, this side of the bridge versus that one, right. I'm going to show you based on your engine, like all these things are like inherently kind of against a policy at scale, right? And, and you're starting to see that, right? Like with real estate, you can no longer age discriminate on real estate.

JC (16:10):

You have to show your ads in real estate from 14 year olds all the way up. Right. And so I think you're going to start seeing that more and more and more, and it's not about Facebook inherently bad. It's about understanding our numbers, understanding our data as we're scaling our agencies and understanding and looking and going, where is my churn? Why are clients really leaving me at what are the correlations there and how can I pivot? Right. And so, um, I mean, I think in terms of ads, I'm going to, I'm going to speak much, much more holistically. I think that individuals, agencies that are focusing a majority of their revenue of their business in supporting Facebook ads, I think you're in for some rough months and years ahead.

Dylan (16:49):

Oh yeah. And I mean, you can even see it in Facebook groups of people struggling in the special ed categories. So, I mean, it's going to get trickier and trickier without a doubt, especially with all the regulations and all the apple changes. So, I mean, it's one of those wild rides you've got to buckle up for and, you know, but Hey, when it comes down to it, for those who kind of thrive in that environment, I mean, it's an, a kill off Darwinism at its finest. It's going to kill off the low advertising agencies and Hey, the other ones are going to thrive. So it's definitely interesting perspective out there,

JC (17:16):

Any with any pocalypse or problem, there's a ton of people who win, like even COVID dude, there was a, there was a ton of people who lost in COVID, but there was also people that made a ton of money off of that. Right? And so with every shift in economics, like it creates a ton of opportunities. So you're a hundred percent on point they're

Dylan (17:36):

Loving this,

Speaker 5 (17:37):

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Dylan (18:38):

Ad card@funneldash.com. Um, and the final piece of the pie, the last puzzle piece, you know, with the name of the podcast, we'd love to kind of meet in the crossroads and marketing and some sort of, you know, financial principles or tips there. So kind of financial tip of principle. Can you kind of share with the audience based off your expertise and background?

JC (18:56):

You know, it's interesting. So I, I don't know if you know this Dylan, but I was, uh, I was a financial advisor. Uh, I like 20, I was a financial advisor. I was in, I started banking when I was 17. I was the courier cause I couldn't legally be a teller and ended up being a teller then right after college became a financial advisor. And you know, one of the things I am most proud of at height, like my biggest accomplishment so far was 2020. We didn't fire one person and we didn't cut one salary. Right? Like we, we, I mean, we held, held true and we have, I mean, it wasn't, it was actually a really good year for us overall. We had some bad months, of course, March, April, may. And the thing a lot of that has to do with some of our principals on finance.

JC (19:37):

I mentioned Dave Ramsey was one of our sponsors. And so obviously we, we kind of halfway like the guy, not that I agree with everything he says, uh, like at all, but there's some really sound principles. And I think agency owners, because of our industry that we're in, it's constantly shifting, like even within how you do Google today three or four years ago is different. SEO is so different. Facebook is different there because there's so much shift there. The more, uh, the more stable we are, the more we have in terms of leverage of being able to shift time, to shift time to think, I think the easier things are going to be. And so at height, again, specific my real estate company, we have tons of debt, right. But with the marketing company with zero debt in the company, and we have a lot of liquid cash savings, I mean a lot.

JC (20:22):

And so for me, I think in terms of like financial advice here, I would definitely say if you're growing a scaling agency, even if you're a bigger one, right. We're doing several hundred thousand a month in revenue, I would still be going, okay, how much money do I have in the bank? And when I, when I count money in the bank, I don't count cash. I count months. Right. And so at height, if we have 200,000 in the bank that can serve, it means we get to survive four weeks, right? Like that's not a lot of money, right. If you have 300,000, the bank in your expenses are only 10,000. Okay, cool. You got a ton of money in the bank. Right. And so how many months of savings do you have because that correlates your ability to make decisions when you have to shift.

JC (20:58):

So I'll give you an example in March date of last year, bro, when everybody was like at this pickle, because clients were just leaving well, you're in a pickle because your employees, your staff cost a certain amount. Right. And so, so there's only so much, you can discount your product before you're like just losing money. Right. And so you, you discount a certain amount if they leave. So be it. And you're just gonna have to let go people, what height do we took? Like we were doing SEO for like 50 bucks a month, right? Like stupid, cheap. Why? Because we had savings. We knew we could last for a really long time, even if we had 30 or 40,000 in revenue. Well, what did that do for us that made us be able to bounce back that much quicker because our clients were still our clients, they were still getting marketing services, which means my clients were selling quicker than any of my competitors clients.

JC (21:44):

Right. And so they were bouncing back quicker and I can lift dude, August was our most profitable month in company history, basically four or five months, whatever, after the pandemic kit. Right. And so, so I think for us, you know, the biggest things that we do from a financial pillar standpoint, we save as much money as we can. Our goal is, uh, maybe by the end of 2023, but 2022. Our goal is to have a full four months of liquid cash savings. Right. Which is, which is a lot it's tough. Uh, and then not have any debt man, because it's, uh, it, when, when those tough times happen or when the shift happens, you can get caught. And, uh, and it's tough. It's really tough. So you're in, it's not that guy at all. Then I, I, I think there's good debt. So this is where I would disagree with Ramsey on a little bit. But I think that there's also bad debt, you know? And, uh, and if you're not sure what it is, then it's probably bad debt. Um,

Dylan (22:40):

Right. Oh yeah. This has been fricking enticing. So what's the best way we can kind of support you, you know, how can, you know, you kind of listened up to the audiences here and you know, how can they kind of reach out to you?

JC (22:52):

Yeah, bro. I mean, you can find me on Instagram. I think that the marketing department even has me on Tik TOK, doing stuff. You can find me anywhere. Right, bro. Like I'm, I'm uh, depending on if you're 12 or 30 out there listening, uh, dude, if you're interested in the franchise model or just learning more, just having a conversation, franchise dot hight, digital.com is a good place to connect with us. And uh, I'm pretty open man, which just all about having conversations. If we're an awesome fit. Awesome. If not, well, if you find the right fit, we don't care. So you may come back later. So, um, yeah. Anywhere.

Dylan (23:24):

Oh yeah man. Well, JC man, thanks for jumping on. We're going to have to have you come back on in six months to kind of gauge how it's been going, man. Well, let's

JC (23:31):

Do it bro. We'll put it in the calendar and hope you'll have a goal

Dylan (23:34):

Yet. Whoop. Well, thanks for buddy. Thanks you guys.

Speaker 5 (23:44):

Thanks so much for listening to another episode of the rich, add more at podcasts. If you're like me and listen to podcasts on the go, go ahead and subscribe on apple podcasts, Spotify, YouTube and rich dad, poor dad.com/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 zach@funneldash.com. Show me you left a review. I'll give you a free copy of the rich add or ed book to 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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