#32 Advanced Facebook Advertising Strategies with Nicholas Kusmich

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nicholaskusmichshort-661x10241Biography:

Nicholas Kusmich is a Strategic Marketing Consultant and a leading Facebook Advertising Specialist. He has worked for the past seven years in the online advertising space and has worked with various notable clients such as Joe Polish and Jay Abraham.

Currently based in Toronto, Canada, he previously worked for IT and digital marketing firms such as Clarity and Knight Bishop & Queen. As a speaker, he has toured various parts of the country giving seminars and talks about effective tools and strategies used on the Internet marketing industry.

“Nicholas is an OUTSTANDING Speaker! He spoke to a captive capacity crowd at our last event with a powerful presentation that was first-rate, insightful, and very well delivered. All in attendance thoroughly enjoyed his talk. The feedback we received was all very positive. It was a true pleasure having Nicholas at our event, which turned out to be a HUGE success.” – Janelle Ryan, VP Sales and Marketing at The Polk Group.

Topics of Conversation:

[00:14] Introduction
[00:51] Company Background
[02:35] Client Processing Setup
[04:28] Industry Niche
[13:02] Business Strategy
[16:41] Facebook Marketing Methodology
[20:43] Custom Audience
[28:50] Number of Clients
[30:18] How Often is Price Increased?
[37:42] Ad Spend Process on Facebook
[41:17] Marketing Tools
[45:21] Wrap Up

Reach Out To Nicholas Kusmich:

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Transcription:

 

[00:14] Stephen: Hey Guys, Stephen Esketzis here from Marketing on the Move. And I’ve got a Facebook Ad Specialist, Nicholas Kusmich.

How are you going, Nick?

Nicholas: Very good. How are you, brother?

Stephen: Good, good. You’re from the other side of the world right now. Over here, it’s 9:30 in the morning. And it’s a Friday morning here, and it’s a Thursday night there, I believe.

Nicholas: Yeah. Who says time travel is not possible?

Stephen: That’s it. I can tell you the future, and it’s still going. But it’s as very busy future, I’ll tell you that much.

Nicholas: I hear you perfect. Thanks for the heads up.

Stephen: It’s good. Look, no media rights, nothing to keep us just yet, so I think we’ll be good.

Nicholas: Nice.

[00:51] Stephen: Yeah. So, give us a bit of an intro about what you do?

I know a bit about what you do, but give the audience a bit of a rundown on who you work with your Facebook ads.

And yeah, what are you doing on a day-to-day basis?

Nicholas: Yeah, absolutely. So about 80% of our business right now is running a boutique Facebook advertising agency. And we position ourselves to work primarily with anyone in the expert coach space.

So if someone is selling high ticket items, i.e. leverage coaching, masterminds, high-level events, things of that nature, that’s usually the ballpark that we like to play in. And we’ve been fortunate enough over the last couple of years to build out this boutique agency to the point that we’re getting some of the highest, well, in fact the highest ROIs in the industry for our space.

And it’s really positioned us really well. And we’ve got to work with some really, really cool people. Everyone from Robin Sharma to Billy McIntyre, to Taki Moore, to Ted McGrath, some of the bigger names in the coaching and information space.

And it’s been a total ride, so that’s about 80% of our business is running the Facebook advertising campaigns for our clients. And then, about 20% of it right now is more of a coaching or a training and information model.

So not everybody necessarily qualifies to have us do the work for them, and the ones who don’t, or are more of a done-for-you—sorry, not a done-for-you—kind of like a do-it-yourself-type model. We help them and consult them in implementing some of this stuff into their business.

Stephen: Yeah. Gotcha. So majority or I guess, 80% like you said, the revenue comes from working with your own clients?

Nicholas: Correct, yes.

Stephen: Gotcha. Now that you’re working with all these clients, tell us about what sort of work do you do with them?

Do you run their Facebook ads through their events or do you get people into their high-end mass models?

Do you work across all those different sections of their business?

[02:35] Nicholas: Yeah, that’s a great question. And the short answer is all of the above. So initially, we’ll look at someone’s business and seeing what their top goal priority is.

So is it to get people into the mastermind program?

Is it to get people into their live events?

Is it to get people into their information business or what not?

We look at it at a business. We come up with a strategy that made the most sense if they already didn’t have one that was well-executed in place.

And a type of a funnel model, if you will, that we feel that would help them up level people into the highest levels of their business. But in short, whatever their offer is or whatever their main offer is, whether it’s Joe Polish’s 25k Group, and that’s the only offer they bring to the table.

Or it’s someone who’s doing webinars to on-board people through strategy sessions; we take care of it all that way.

Stephen: Yeah, gotcha. So the whole funnel, I guess you have different from top to bottom.

Nicholas: Yeah, a lot of what we focus on is the traffic or the lead generation side of things. I like to leave the funnel design and the funnel development to people like you, and the really smart people who can take care of all the nitty-gritty nuances of executing the funnel.

So for the most part, one of our requirements is that when someone does come to us, they have a preset funnel in place. But just because we’ve been in the industry for so long and we’ve really understood this high ticket space, we usually come in there and make a few suggestions and work with their funnel team, in order to tweak some things out.

But our business is really lead generation, exposure, traffic generation and that sort of thing.

Stephen: Yeah, nice. So do you think—because I know, Nick, you’re pretty niche down. Like you said, in some boutique agency.

When you went into it, did you think that it’s a good idea to niche down on a traffic source and an industry, or do you think it’s niching down to a traffic source on its own is niched enough, I guess?

How do you see that?

[04:28] Nicholas: Yeah, great question. One of the things we teach even when we’re teaching people how to do Facebook advertising for their own business.

I think the most important element before you’re running traffic, before you setup your funnels, before you think through your offers and your closing and all that, is really identifying who it is that you serve. And what we like to tell people is the more specific you can be about your niche the better.

And so the rule I like to have is everybody’s familiar with Pareto’s Principle, the 80-20 rule, where 20% of the efforts produce 80% of the results. 20% of your customers produce 80% of the revenue. And I would like to say in a wide market place, 20% of the market place is probably going to give you the 80% of the results that you’re looking for.

But what I like to do is I like to even take it a step further and go with what I call the 96-4 ratio. And the 96-4 ratio is who is the 20% of the 20%?

How niche can you go?

And when I say niche, I’m talking about the people you’re serving, who are the dream clients and what is the skill set that you could bring to the table that can match a solution to a problem?

So for me, it was a combination of things falling on my lap and simultaneously me being very intentional about who else I’m trying to serve. So in my case, I started as a general marketing consultant.

I was all things to all people. I was helping people in every element of online marketing, if you will. And that was cool.

And I had a nice, little small business and I was working with small guys and big guys, and start-ups, and people who were doing really well. I was just all over the place. It was funny.

Every time I went to these IM conferences or something, you ask, “What do you do?” and I’m like, “Oh, I’m a marketing consultant.” And they’re like, “Oh, well, so am I.”

And it seemed like everybody in the room was a marketing consultant. So I was like, “Wow, this is not good.” I’m not standing out.

I’m not really having the impact that I’d like. And I remember I was speaking at an event. And as I was giving my talk on marketing, I asked the simple question, I said,

“Who in this room is using Facebook advertising?”

This was probably about two and a half years ago. It was, “Who in this room is utilizing Facebook advertising in their business?”

And about 60% of the hands went up. And then, I said, “Who in the room who’s utilizing Facebook marketing or Facebook advertising is finding a positive ROI with it?”

And almost 80% of the hands went down. And right there on the spot as I’m speaking, I totally pivot my entire talk and I spent the rest of the talk talking about Facebook.

And it was almost like by the end of the event, I started getting labelled as the “Facebook guy.” Now, my impression was that everybody and their mother knew how to use Facebook ads and was getting great results.

But what the market was telling me was that was not in fact the case. That people who are actually losing money are struggling on Facebook. So I put one and one together.

People started labelling me as the “Facebook guy.” I said, “You know what, if this is the demand of the market place, then this is what we’re going to do and this is what we’re going to roll with, so I ran with it.

I said, “I’m now the Facebook guy.” And that’s where I started. And then, people started coming to me for Facebook.

And then, I have a principle that I teach when I talk about the 96-4 Rule, and that’s this: it’s when you’ve identified the 4% of your market place, there’s two things that have to be true about them. Number one, it needs to be an underserved segment of your market place.

In other words, there’s not massive competition there and not everybody is trying to serve this niche. It’s got to be an underserved segment of your market place, so that you are literally in a no-competition or competition-free zone, and you can become the authority in that space.

And then, the second side of it is that that segment that you’re going after that’s underserved, that 4%, also has to be affluent. And the reason being for that and Dan Kennedy and a lot of people talk about it is, if you’re going to charge premium fees for something, then you might as well go after a market place who can afford it.

Stephen: And that’s something I think a lot of people make a mistake with. Obviously, countless businesses go and miss that second step right there.

Nicholas: Yeah, absolutely. And it’s not for everybody, but for those who want to play in the high stakes game or the high ticket item realm, then you are not going to sell $100,000 coaching program to someone who’s just getting started in the expert space. It just doesn’t make sense. So for me, I was like,

“Okay, I got this Facebook thing down. I’m getting great results, better than most. Now, I have to identify, well, who’s my 4?”

And as I looked out into the market place, I identified that high-end coaches and consultants who are charging premium costs for their masterminds and their coaching programs was an underserved kind of space in the whole Facebook marketing arena. You had a million and one people teaching people how to use Facebook to sell T-shirts, yet a million and one people teaching people how to do physical and Shopify and Amazon, and all these other low-level, high-volume stuff, CPA stuff, affiliate stuff, and I’m like, “Well, I don’t want to play in that space.

I’m going to go after them.” And so I made a conscious decision at that point to say, “Well, my 4% is people in the highest level of the information marketing or the information product space. And I’m just going to go after them and I’m going to serve them with one traffic source only for now.

And that was Facebook. And again, part of that was just because I didn’t know any other traffic sources. I was too late to the Google game.

Didn’t want to play in that space. Twitter, Instagram, and some of these other social platforms had not yet fully developed to their advertising platforms. And so for me, I had a choice of Facebook or plenty of fish.

Plenty of fish didn’t have the group I was looking for, so we went with Facebook and we never looked back since.

Stephen: Yeah, Facebook’s been dominating. And the good thing about it is that they’re actually always adapting as well. They’re not a statement ad platform. They’re always moving around.

Nicholas: Yeah, and that’s what people hate about it and that’s what I love about it. The beauty of it is all these so-called marketers came into the game, started trying to do Facebook stuff a few years ago, and then the “Facebook slap” happened, if you will, and it’s still happening now. Facebook is wiping people out.

Stephen: It’s getting real nasty out there. Look, it depends on what you’re doing. Obviously, if you’re doing wipe-out work, then you’re not going to have an issue.

Nicholas: Right. If you’re doing things above board, you shouldn’t have an issue. But obviously, there always will be people.

And I know there are a whole lot of people doing media buying and affiliate marketing and whatnot. And some of them absolutely hate it because they’re getting their accounts shut down every single day.

But other guys have just had no issues. And they’re doing fantastic.

Stephen: Yeah.

Nicholas: And I guess, it’s just that Internet marketing space. You can go into almost any Internet marketing group right now, and somebody’s bitching about why Facebook sucks and they just shut me down. I’m there laughing. I’m like, “Thank you, Facebook, for wiping out all these entitled and not-knowing-what-they’re-doing-type of marketers, and opening up this space for the real players to come play. So I like the fact that every week, they’re changing the rules because it keeps me relevant. And all my competition who don’t necessarily want to stay on top of the game, or they’re just lazy marketers, are moving on to other platforms, creating even more of a yellow brick road effect for me. So I’m not complaining. I’m totally happy with all the changes.

Stephen: Yeah, love it. It increases the barrier to entry as well for everyone else, because they hear things and say, “Oh yeah, my friend’s account got shut down and he’s not doing well.

And it’s tons of moves. And then, you just see the sheet move from traffic source to traffic source.”

Nicholas: Right.

Stephen: But not Facebook. I think like what you said, as long as they keep innovating and making it better for the advertiser, I think you shouldn’t have an issue.

Nicholas: Yeah, I know for sure. Will it be around forever?

Only God knows and I’m not going to make any predictions that way. But as long as they’re around, we’re going to be utilizing it as one of the main traffic sources for us and our clients.

Stephen: Well, that’s it. As long as they’re producing profit, that’s all that matters. As long as there’s an ROI and a source, I guess that’s the main point.

Nicholas: Right, exactly.

Stephen: Yeah, and now with Facebook ads, let’s dive a little deep into that because I know obviously you’ve got all your strategies and your steps.

One question I had is do you use the same steps and strategies?

Like would you use something for your high-end consultants?

And I know now that you’ve boutiqued into something more behind consultants and the expert space. Getting a room or getting people into that mastermind or an event, would you use the same strategy as you would to a lead generation website game and leads or is it something completely different altogether?

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[13:02] Nicholas: Yeah, that’s a great question. I think what I’ve come to realize, at least in the high-end space anyway, is that Facebook have to be utilized primarily as a lead generation tool.

Anyone who comes to the Facebook platform thinking that they’re going to make sales, I think you can make sales on Facebook under two conditions: one, it’s an impulse buy-type of product, and b), it’s very low-ticket.

And that’s why I think T-shirts did so well for so many people because if I love pit bulls and there’s a pit bull shirt out there, it’s less than a $20 purchase, it’s an impulse buy because I’m highly-emotional about it. But besides impulse buys and low-ticket items, I don’t think Facebook is nearly an effective mechanism for sales as it is lead generation.

I think that’s just understanding the actual type of platform it is. What I see happen all the time is these direct marketers who have all these direct marketing skill sets, who’ve been buying media and all these other platforms now bring those bad habits onto Facebook, which they forget is a social media platform.

It’s not a commerce platform. It’s not really natively an advertising platform. It’s a social media platform.

So very few people will wake up in the morning, log on to Facebook with credit card in hand and basically say, “I’m looking to buy something.” Instead, they’re going there to see what they’re friends are up to, some cool articles that are out, some great content, etc., etc.

And so I feel like, at least in the high-level space with the high-end space, is that the more you can be congruent or native to the platform and understand that Facebook is not designed to generate sales as much as it is to generate leads if you know what you’re doing, then the play, no matter what the offer is on the backend, the play should always be positioned from a perspective of how can I bring value to the platform? How can I serve my community on the platform, and then in exchange for that, maybe get a lead.

And then, take that lead off of the Facebook platform onto a platform that you control, so i.e. your auto-responder or CRM or your own blog, or whatever, and perform the action of the sale on that platform, because Facebook is not designed for sales. But it has no problem of pulling people off the platform onto a solution that’s more geared towards sales, and then allowing you to conduct your sales process there.

So the short answer is despite what anyone is trying to “sell,” whether that’s filling an event or a high-ticket mastermind, or a high-level coaching program, to me on the frontend, it’s usually 99% of the time, the same. And that’s how can we bring something of value to the Facebook community, specifically the target that we’re going for, in exchange for a name and an e-mail address?

Stephen: Yeah.

Nicholas: And at that point, we put them through a funnel sequence to either nurture them, warm them up or sell them into whatever it is that we’re trying to sell them into.

Stephen: Yeah. I hear of different funnels out there. and obviously, Facebook is an incredible source of traffic, so how do you distinguish which funnel works on Facebook?

So you’ve got things like a “free plus shipping” offer or if you drive into a webinar or a blog post, and then retarget them with a lead magnet, there’s a whole lot of things you can do, right?

There are plenty of different funnels and things you can do with Facebook. You found one that works the best that you keep going back to or do you think, like you said, you got to provide value?

So maybe a blog post promoted and then you pixel the audience once they’ve clicked it or do you sell them primarily through the auto-responder, or is it over the phone? What’s the methodology behind that?

[16:41] Nicholas: Yeah, so that’s a great question. Essentially, how we see it is that you have to have some sort of—and the industry calls it different things—but you have to have something on the frontend, i.e. a lead magnet, a bait, whatever.

Stephen: Your value proposition of some sort.

Nicholas: Everyone has some sort of a different name for it. But essentially, you need to bring to the market some sort of a lead magnet. And then, the end goal typically for something that’s high-sale price.

So when I say high sales price, we’re probably talking about the $5,000 range or higher, something that requires human contact, in order for that transaction to happen. The end goal for that person in order to close that sale is typically a phone call.

I’ve never seen anyone able to close—and this is cold traffic, warm traffic is a little bit different—but in cold traffic, I’ve never seen someone able to close something that’s $5,000+ without some sort of an actual, physical touch point or a phone call. So my goal then in this space is to see what is the shortest, most effective distance between capturing that lead and getting someone on the phone?

Now, for different people, it’s different things. And what I like to say is you typically have a whole bunch of options. Option number one, it’s putting someone on a webinar.

A webinar is a great 60-minute tool to build authority and credibility, to provide some great content. The beauty of a live webinar is that you have some scarcity and urgency at the end of it, so you can make a very powerful offer.

Typically, the offer is not a sale. It’s a strategy session where people book a time to talk to a coach or one of the sub coaches in order to get closed into the business. There are pros and cons to the webinar, but that’s like one tool.

Another tool could be a video case study. So rather than putting someone on a scheduled time and date for a webinar, instead, after you’ve captured the lead, you’ve sent them towards a video that’s maybe 20 or 30 minutes long, it provides credibility.

It provides authority. It gives them some great content, and then makes the offer at the end of that. I’ve seen people do four-part video series that used to be popular back in the day.

Stephen: There’s a whole lot out there.

Nicholas: Yeah, there is a lot. So I say it really depends on the personality of the marketer or the coach, because I’ve seen people preach that webinars is the only way to go.

And then, the person who’s supposed to conduct a webinar sucks at doing webinars. There’s really no need to do a webinar if you’re terrible at it.

Just stay away from it and find another mechanism. If it’s a video, then do the video. So what I like to see is I think there’s a handful of things that I think are the shortest distance between the lead and a phone call, and you as a marketer or a coach, or an expert, literally have to select the one or maybe the two that suits your personality best, and then execute like gang busters.

I hate those guys out there who are really are preaching there’s only one way to do this. And this is the only way for high-ticket sales. I don’t think there is one. But I think there’s multiple ways.

And I don’t think there are better—well, maybe there are better ways over worse ways. But I believe that it’s really personality-centric. I know a lot of coaches who are really good live and in person.

So they will do a lead magnet, offer someone a free live event. They’ll bring you into a room for a day or two—

Stephen: And they’ll close you straight away.

Nicholas: Yeah, and they’re killer at it. Other people are scared spit less of going into a live event scenario.

Stephen: I think like you say, yeah, once it fits your personality, you’ll know that the closing rate just skyrockets. And you feel so much more natural in it.

Nicholas: Right, great point. Exactly.

Stephen: Yeah, so I’ve got two questions which I get asked a lot. And I know you’re going to be able to answer one of them because I saw you mentioned it in a video.

I did my homework. So hopefully, you could help me with this one.

So I watched the video of one of you speaking actually, and that was when you’re talking about you may use to target Gary V. in his newsfeed. So do you want to give us a quick rundown before I get to the question, because I know people love it?

Nicholas: So the rundown of what actually happened there?

Stephen: Yeah, so what actually happened? Give us the two-minute spill.

[20:43] Nicholas: So this is what’s like a couple of years ago when this whole custom audience thing just came out and people were really playing around with what custom audiences can do and how can you target a specific list of people. So I started experimenting as to what would be possible with this.

And so I got the idea of what if I can just target one person. I put a custom audience of one, upload it into Facebook and drive an ad specifically to them.

What could be done with this?

And so in this particular case, now I did it on another hand, trying to target one of the founders of TEDx Toronto, because I wanted to be a speaker on the TEDx stage. And I figured everyone is just submitting applications.

What if I can target this one guy put an ad in front of him and gets his attention?

That way and maybe strikes out a conversation that way. So I tried it with him and then I said, well, what if I can go a little more higher profile?

Someone that I really looked up to, like Gary V., for example?

So basically, what we did was I went on Gary Vaynerchuk’s personal profile and I grabbed his UID or his Facebook unique ID. And then, I grabbed his profile picture, and I basically took that profile picture and I turned that into an ad.

So that when Gary was going through his newsfeed, he would see his own picture in an ad with headliner copy that basically said, “Hey Gary, my name is Nick. I made a private video for you over here. Would love for you to take a look.”

It was something like that. The link was a YouTube video which was a private YouTube video that no one can see except him when he clicked on it.

That basically gave a 30-second pitch to say, “Hey Gary, I just want to say I appreciate you. I love what you’re doing with VaynerMedia.”

And this is maybe about eight months into him starting it. So it was really growing. It had become the beast it was today.

And I said, “Hey, you know what, I’m in the Facebook marketing space etc., etc. I just would love to connect with you at some point.”

Now, the long and short of it is a few hours passed, the ad went live and I guess, as soon as he thought he reached out to me, there was a phone number in the YouTube video that basically said, “Hey Gary, I’d love to chat. Here’s my phone number. Here’s my direct line to my home office.”

A few hours later, he gave me a call. Long story short, we had this chat. He’s like, “How the hell did you do that?

We’re looking to build out our paid media division here at VaynerMedia. Let’s get into some conversation.”

So he put me in touch with his VP of Operations, some of his core guys out there. And basically, long story short, they offered me a position to help run the paid media division at VaynerMedia.

Now, I ended up turning that down for one or two reasons, it doesn’t really matter. But it just goes to show you, we’re really experimenting with what could be done from a targeting perspective and you can’t do that anymore.

But back in the time when you could, it was great fun and there was a lot of potential of what you could do with it.

Stephen: I guess. So yeah, you sort of answered my next question which was can you do that currently?

Is there a trick where I can target someone I liked to interview for the podcast and say, look, now here’s my face, and do a similar sort of thing?

Or is that still possible or did Facebook cut that strategy down?

Nicholas: So here’s what Facebook realized. They said, you know what, there’s a lot of people trying to do this “fish your business.” So back then, you could upload a custom audience of one and that would be fine—

Stephen: Now, it’s 20. Is it 20 the minimum?

Nicholas: Yeah, they’ve bumped it into a hundred now.

Stephen: Is it really? Great.

Nicholas: Yeah, so you know, there are ways around it. Now let me tell you this and I haven’t done it in a while, so I can’t actually stand behind if it actually works, but here was what I did when that rule changed in order for me to still effectively perform that. And what I did was—

Stephen: I was about to say, I’ve tried some “fish your business” as well, but I wasn’t sure if it worked. I think, yeah, you go on and see if it’s the same with mine.

Nicholas: So basically, what I did was I knew the rule was a custom audience of a hundred of UIDs, so I got a 127 or so UIDs that were all women. Then, I took one UID who was a male who was obviously the person I’m trying to reach, I put that in there.

I uploaded it to Facebook and said, “Okay, well, I want you to show this ad to only males on this custom audience list.” I ran the ad, obviously, it was only going to show to the one person because the rest were female.

And that at the time, and keep in mind, this is still about a year and a half ago or so. That at the time worked.

So does it work?

It did back then. The reality is now, even back then, what was really popular was a lot of people were doing UID scraping-

Stephen: And that’s been cold now as well, I think.

Nicholas: Yeah, well. Once Facebook realized what was happening, they shut that down immediately. And if they even got a hint or a trace that you were scraping UIDs and uploading them as custom audiences, they would have, not only would they shut your account down, your ad account, they would actually cut you out from Facebook and shut you down completely.

So back in the day, it was fun when you had those opportunities, but now Facebook’s becoming a lot more smarter. And granted, there are a lot of people doing the stupid things with those scraped UIDs, so Facebook’s basically like, “You know what, no more. Let’s not do this.”

So is it still possible now?

I have no idea, but I’m not willing to risk my account to try. So if you happen to make it work, let me know.

Stephen: I’ll let you know for sure. Now, I’m a bit nervous to try. But at least now, we’ve got something to work with.

Nicholas: Yeah, exactly.

Stephen: So this question is a bit on Facebook, how you work with clients, your boutique agency, what’s your pricing model on something like this?

Do you price your clients the same way other agencies price it?

So do you have a retainer or do you charge a percentage of the ad spent?

How do you work?

Where do you find your pricing model from?

[26:25] Nicholas: Yeah, that’s a great question. And the reality is when we started, we tried everything. So basically with agency pricing models, we heard about people who were charging a percentage of ads spend.

And I think that would be great if I had a couple of whale clients, and by that, I mean someone like Walmart. If Walmart is spending a million dollars a month on advertising on Facebook, I’d gladly take 1% of that a month and just kind of run with it.

But what we found was that there were people who were spending a lot and little. And so that kind of model didn’t suit us so well.

Then, we moved into a flat retainer. So no matter what your ad was, no matter what you’re doing, all of that, we’ve moved into a flat retainer model.

And that’s a model that we managed to maintain for a very, very long time. And I’d still say that about 60% of our clients are still on this flat retainer model who just plays a flat fee every single month. And we just run their advertising for them.

And they win and we win because it’s a high enough fee to make us happy. They have enough profits in the results that we’re getting for them to make it a no-brainer for them and kind of everybody wins with that.

Stephen: Yeah.

Nicholas: And then, I’d say about 40% of our clients right now, we’ve entered into a revenue share or a profit-sharing model. So we actually take on all the risk, and we say, “Look, you don’t have to pay us anything until you get a result.

But when you do get a result, we want an X percentage of the profits that come as a result of anything that can be traced back to us.” And we moved into that model because we were realizing that with the flat model, we were literally creating hundreds of thousands of dollars in revenue for our clients, and we were getting what we were getting for it.

So by shifting and saying, “Well, how can we without taking on more clients–because that’s not something we wanted to do—how can we, with a limited number of clients, still increase our revenue?

And the only way to do that for us was to take a profit share as opposed to just a flat revenue model. And so again, a percentage of our clients are in that space right now. And it’s worked out really, really well for us because people who aren’t averaging 20k, 30k, 50k, 75k or 100k a month in additional profits based on the work that we do with them, we get a nice little chunk of that and everybody wins because nobody’s at risk.

Stephen: Yeah, I like that. And how many clients do you work with in total in the boutique agency?

[28:50] Nicholas: Yeah, so we cap it at 15 clients at any given time, and that’s because we have a very small team. And one of our value propositions is the fact that unlike other agencies, when you work with us, you work with me.

I know a lot of agencies where they’ll on-board you and the name and the face of the agency is someone who’s really well-known in our space. And in all honesty, they’re very brilliant at what they do.

The reality is they have nothing to do with your account. Once they on-board you, they hand you off to an account manager.

The account manager hands you off to a VA, and you really have no idea who’s in your account. And you don’t really have the brains or the strategy of the lead guy in that space.

So one of our value propositions is, look, hey if you work with us, you work with me. And I have my hands on every single campaign that we put out.

And so as a result of that, obviously, there’s a limit to the number of people we can work with. And we really want to be kind of premium white glove for our clients.

And so the only way to do that was obviously to cap who we ended up working with.

Stephen: Yeah, and I think that’s a great way of doing it. Obviously, you’ve created that scarcity as well.

How often do you increase your prices?

Because obviously, as more people come through, then more people are going to want to work with you. Do you increase your prices every year-to-year?

Or is it do you just start to see a month-to-month increasing it or are you trending more towards someone where you can really see higher revenue share and make more money that way?

How do you keep price?

[30:18] Nicholas: Yeah, that’s a great question. So we recently, within the last years, when we moved into this revenue or profit-sharing model. And so, we actually haven’t thought about increasing pricing because again, we’re moving slightly away depending on the client of course.

It depends on what their needs are. But we tend to now only on-board people who we know can have very, very large profits from the work that we do and move straight into a revenue share model.

And because of that, we have our percentage that we started with. It’s serving everybody well. We haven’t actually considered moving up that percentage.

I don’t  know if we’d be fair to increase that percentage. But there may be a need for that. But again, at this point, one thing I’d like to reiterate is I talk to a lot of my agency buddies or have a conversation with someone like Gary V. who has like 400 employees and has this mega agency in Downton Manhattan.

And people look at me and they’re like, “Oh dude, you just have like a lifestyle business. You don’t have a real business.” And I’m like, “Yeah. That’s exactly why I got into this space.

I didn’t get into this space to be the next Mark Zuckerberg or the next Richard Branson.” I think there’s this mentality amongst entrepreneurs.

That you have to be an overachiever and you have to get VC funding, and you have to turn into the next hundred million dollar company. My company will never make $100 million, the way that we have it now.

And the reality is I’m okay with that. I don’t want $100 million headaches. We have a nice boutique business. It serves our clients extremely well. It serves me and my wife and our small team very well.

And at the end of the day, everybody’s happy. So yeah, we haven’t really given too much though about the growth and the expansion even from a revenue standpoint of price increase.

But now that we’re having this conversation, maybe that’s something I need to consider. And I’m sure my clients wouldn’t be too happy knowing about that.

But we haven’t given some thought to it in the recent year past.

Stephen: Well, if you’re doing creative prices, I’m expecting a revenue share and some of that coming to me, giving you the idea. So I don’t know, maybe sort of 50%, but I’m flexible.

Nicholas: Alright, we’ll pay a royalty for you just for the idea, absolutely.

Stephen: That’s it. Since we’re doing revenue share, let’s start doing a revenue share podcast, you’re influencing me.

Nicholas: Yeah, that’s perfect. I have no problem paying that too.

Stephen: No, that’s great. So well, two more questions and then we’ll start wrapping up.

One of them is you’ve gone into Facebook ads, how come this boutique agency model?

Like, you just mentioned you want to work with that client who is serving you real well, it’s a lifestyle business. Have you looked into things like affiliate marketing or media buying and other things which sort of open that lifestyle business as well, but don’t have that contact with the clients or are that something you’ve never sort of focused on yet?

Nicholas: Yeah, it’s a great question. And again, I think the key to what has happened specifically in my life, in my business, has just been really having the ability to roll with the punches and being agile and pivot according to what the market is dictating in my life. So for me, I never really gone to the affiliate space, I never got into the traditional IM space for that matter.

It started where I was a consultant, the story as I already told you there, I went into a Facebook strategist, and then the Facebook strategist went into working with these high-level clients. And it’s just really served me well.

So I never actually even considered. I mean, unlike most entrepreneurs, I would say I’m more of a “onetrepreneur,” I don’t have that squirrel mentality of “Oh, I’ve got to build a million different systems and make it work, and then I get really bored when I’ve mastered one, and I want to move on to the other. And then, I want to develop this and I want to try that. And do all this.”

Unlike that, I’m like, “Hey man, if I have something that’s working and working really well, I’m going to see if I can optimize it maybe and do my best with it. But what I also found is a lot of people in my space complain about the client model and working with clients, because it’s a bitch and everyone complains and it’s hard to serve them well.”

And I agree, I think if I was working with—and I know this is going to sound wrong, so I hope no one takes offense to this—I think if I was working with lower-level clients, that would be a reality. If I had people bitching at me and sending me e-mails all the time and saying, “Hey, what about this and what about that?”

Which at some points, I did early on in the business and I just immediately fired them and I got very clear about what I do and what I don’t. I’m clear about my clients about how you can reach me and how you can’t reach me.

I’m very clear about what days you can reach me and what days you can’t reach me. And basically, I tell my clients as soon as on-board them, I’m like, “Look, I’m like a referee of a soccer game, if everything is going well, you probably won’t even notice me, and we probably never need to talk.

It’s only when something’s going wrong that you’ll need to notice me and we’ll need to have a conversation. And because of that, fortunately because 80% of the time I’d say things are going really well, there are clients, in all honesty, that I haven’t talked to except for an infrequent phone call saying,

“Hey, how are you doing, man?

I hope all is well.” I haven’t talked to some of my clients for quite a while now just because we got our stuff dialed in. It’s working. They’ve got their stuff out and it’s working. And everybody’s happy that way.

So that was a really long answer. But again, I guess I never really even discovered or was made aware of affiliate models or CPA or media buying, or anything like that.

And to be honest with you, I’m scared to try something new. I like when I know something’s working.

Stephen: You want to retain—

Nicholas: Yeah, and I’ll just stay there as comfortable as working, why rock the boat and do something crazy that could cost me my business?

Stephen: Exactly. I definitely agree. And what’s the highest ad spend project you ever worked on? I’m sure you get this question a fair bit.

Nicholas: Yeah, so the highest ad spent now, there’s the highest ad spend and then there’s the highest consistent ad spent. So in a recent-

Stephen: You can break them up.

Nicholas: yeah, so in a recent campaign, someone—one of our clients was in the middle of launch, and so we had a nine-day window. And in that nine-day window, we were given the green light to spend up to $80,000 a day in ad spend, just because it was a launch, it was mega.

We need to push massive, massive volume in a short period of time. and so that’s what we had to work with. Now, could that level of spend be maintained of $80,000 a day for three months.

I don’t think so. I don’t know. I’ve never done it. More realistically, what we’re looking it as is spends between 30k and 50k a month. Some may go a little bit higher than that.

But yeah, I think like massive, massive ad spend are difficult to maintain over time. And it’s just something you can do in like a really short burst, if you’re running a launch for somebody or something like that.

Stephen: Yeah, and definitely, you just want to get those results quickly. And I think Facebook also uses up your ad spend real quick.

And you want to spend some time targeting it, like optimizing it, playing it around, tweaking. So it’s definitely a process.

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[37:42] Nicholas: Yeah, and you do got to be careful because one of the reasons why Facebook is shutting a lot of these CPA/affiliate guys down is because they don’t understand the principles that Facebook values in scale. So before we were about to spend that much money, we literally had to get on the phone with Facebook and say, “Look, we’re about to spend close to a million bucks over the next nine days.

We just want to give you a heads up. So please remove all the throttles off our account and let everybody know that this spend is going to be normal. We’re planning it.”

And once we got the sign-off from Facebook that that was okay, and then we spent it. If we tried to do that blind without letting Facebook know, and this is again what happens often in the affiliate space or the CPA space, is they try to come out of the gates with one ad set at $1,000, $1,500 or $3,000 a day.

And they put that all across their campaign. And what Facebook says is like, “Look, if you’re coming out the gates at those numbers without having optimized anything first. All that says is “Red flag.

Red flag. Red flag. Red flag. We got a spammer here.” And they’ll shut down your account right away.

So I think it’s important for people who are doing advertising and looking to get to a point where they’re willing to scale, that you have to play within the scaling rules of Facebook. And I think the safest way to do this, unless you have someone on the inside of Facebook that you can literally call and say, “Hey, we’re going to spend a lot of money this week.”

My rule of thumb is you start low and you have 15% increases daily until you hit your actual max spend. And then, you can do that safely without Facebook going all nuts and saying, “Well, what the hell does this guy think he’s trying to do?”

Stephen: Yeah, I know. That’s great. And I think you and I, we probably both know a few people that spend—a lot of people out there—that spend $40,k, $50,k even up to $100,k a day, whether they’re only affiliate marketing or Facebook.

And there are some big plays out there. So you definitely got to have to be inside to be able to reach out to Facebook and say, “Alright, is this okay?” Because they’ll definitely just jump on you and start shutting down accounts left, right and center.

Nicholas: There are different rules that apply. I don’t think people realize that. When I first, before we were able to build out our agency to where it is today, I’d have friends who are in that space of spending $100,k a day and they’d show me inside their account, and it was magical. Their accounts didn’t look like mine.

They had all these beta features that weren’t available to the public. They had all these special things going on. They had extended lines of credit from Facebook.

There are things in our accounts now that the average marketer who’s spending up to $50,k a day—sorry, not $50,k a day, like $50,k or $100,k a month—we’ll never see. So it is not a fair play rule. Facebook does favor certain people over others. The more history you have with them and the more money you spend with them, the more potential you can have, having these new toys and type of thing.

But I think it’ll just be crazy for someone who’s marketing, who’s all of a sudden going to say, “Hey, well I want to spend ridiculous amounts of money.” And expect Facebook just to say, “Yeah, no problem.

Go at it.” They just got to realize what level they’re playing at, and then slowly build up to the level that they want to play at.

Stephen: Yeah, I agree. And one of the last questions I’ve got for is give some tools that you use on a regular basis that some of our audience could use.

They’ve got Facebook or just any marketing tools. What do you use on a day-to-day basis that helps you run the agency or run your business or optimize Facebook campaigns, anything?

[41:17] Nicholas: Geez, okay. Well, our team lives on Asana, for example. So we all have our projects and everything up in Asana. That manages the projects. It lets people know what’s going on. We’re able to assign tasks, etc. in that space.

We’re big fans of Slack, so if we need to get instant communication to anybody, we have everyone on Slack network. So we’re able to do instant messages that way.

God, what else is there?

Now, in all honesty, there’s like tracking softwares that we use, like Improvely is something that we really like.

Stephen: Improvely is really cool, yeah.

Nicholas: Yeah. We like it. Now, also the beauty of the type of clients that we work with is that a lot of this people are already seasoned in Internet marketing, and so a lot of them come with their own tools and suites already pre-programmed.

So you have the Infusion lovers, and then you have the ONTRAPORT folks, and then you have other people who use ten levels of tracking. And you’ve got these people who use only one level of tracking. So fortunately, we’ve been able to kind of run things really slim and lean because a lot of our clients have their own tools and we can just adapt to it, or let them take care of some of those tools on their end. But yeah—

Stephen: Because you guys wouldn’t handle all the Infusionsoft side, you’d just be doing Facebook ads, wouldn’t you?

Nicholas: Yeah, exactly. So we wouldn’t dive in there. So how we kind of position it is literally, we’ll take care of your ads, done for you, you don’t even have to think about it. We got it all taken care of.

Anything that happens is what we call “after the click” or “after the lead is captured.” We move more into a consultative role.

And then, we’ll kind of just walk people through. Look, we’re not going to write your copy for you and we’re not going to dive into your Infusion account, and create all these strings and tags.

But this is what we would do and you can hand this off to your Infusion person and have them do that for you.

Stephen: Yeah, and that’s the best way of doing it. Now, you put a line in the sand, so you don’t have people coming and say,

“Will you do this in my Facebook?

Will you do this in my Infusionsoft account?

Are you going to write my e-mail copy and send a sequence for me?”

Just give them a disclaimer.

Nicholas: Yeah, that’s an excellent point because I have some buddies who are playing in the advertising space as well. They have some small agencies.

And when they tell me what they do for their client, it’s just crazy. They’re writing copy. They’re building funnels.

They’re running ads. They’re doing this. They’re taking their clients’ dog for a walk.

That’s a bit of an exaggeration, but literally they’re doing so many things. And I’m not against that. But I think you just need to be really clear on what it is, what’s your unique ability.

What is it that you bring to the table, and realize that you’re probably going to be part of a much bigger team? A lot of the clients that we work with have a whole suite of VAs, and they have a whole suite of Infusion folks. And they have their funnel guys.

And then, they have their copywriters. And they have their graphics folks. And we’re just part of a team that takes care of the frontend of it.

We drive traffic and generate leads. Once that lead is generated, we hand it off and let the rest of their team take care of it.

And I think that’s just a much easier place to be in than feeling like you have to be every member of that team.

Stephen: Yeah. And something I learned from Taki Moore actually, which I’m sure you’ve heard before as to working your genius. Right. And that’s exactly what you guys are doing.

Working that genius at the frontend and actually creating the leads, managing the ad spend, and then letting them handle everyone else working their own genius to make the team work.

Nicholas: Yeah, absolutely. And you know what, sometimes that doesn’t work out for us because, I mean, we have clients who say “We want to work with you, but we need your help on all this stuff.”

And we just have to say, “You know what, we’d love to help you, but we can’t. These are areas that we’re just not going to touch, although we probably could.

It’s just not something that we’re going to go down.” We’ve had to turn a lot of business away for that, but the headache-free that comes with that is worth every penny that we’ve lost from a potential client.

Stephen: Yeah, 100%. Well, look, Nick, I really appreciate you jumping on today with the podcast. It’s been phenomenal.

And some of the points that we’ve covered I think are going to be extremely beneficial to our listeners.

Nicholas: Yeah. I know. I totally appreciate it. I can’t believe time flew and we’re already done here. But I totally appreciate it. It was great fun.

[45:21] Stephen: Awesome. Well, I’m sure we’ll keep in touch. We’ll definitely have the links to what you’ve been talking about on the show notes. But yeah, look, take care.

Keep up the good work with all the agency work. Hopefully, we’ll start seeing some of your ads around and I’ll just take a few screenshots, if I can pick out through your ad during the ad sponsor into mobile.

Nicholas: You’ve probably seen some already.

Stephen: There you go. I’m sure I have, yeah, definitely. Well, take care, Nick. And I’ll speak to you soon.

Nicholas: Thanks, absolutely. Have a great night.

FEATURED DOWNLOAD: Read and download the full transcription of Episode 32 with Nicholas Kusmich. Time to get serious and do what others are doing on Facebook.
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