Why we covered client ad spend and nearly broke ourselves

▶ 0:00Fantastic. Okay. So today I'm going to talk about why we covered our clients advertising spend for three or four months, how it nearly killed us and why it was actually so beneficial for us in the long run. So we did a presentation at solar and storage live. Hopefully I can get it on the screen at some point here in April, 2024. And we presented the concept that we would cover the advertising spend for the client and the client.

▶ 0:29would only pay on the leads that were generated based on their progression. So new lead, call made, survey booked, deal closed. Because we thought that was a pretty good measure for how much the lead was worth. Obviously, if you can't get them on the phone, then it's not worth very much. If you close them, then it's worth quite a lot.

▶ 0:45So we ran with that and we got so much interest that we signed six clients on it and I had a 87.5% close rate on that, which was kind of a sign that it probably wasn't for the best, that it was too good of an offer. But we did it anyway. And we launched. And the huge, huge benefit to that was that we were testing on our own budget. If we wanted to do something, we just did it.

▶ 1:11Obviously, as long as it was within the client's brand guidelines, how they want to be perceived online, we just did it. There was no asking about, you know, we considered that this might be the right strategy. Like, should we maybe allocate 25% of the budget to it? We just went and we went fast. And we learned fast and we failed fast. So we started sending traffic to lead forms. That was hopeless because the lead quality was crap. We started sending traffic to landing pages, 1% conversion rate, and the leads cost way too much.

▶ 1:39So we started doing, and then we moved to perspective. And that was all while we were covering ad spend. And we were constantly improving the creative process through that. We were doing instant quote ads, we were doing video ads, blah, blah, blah, blah, and figuring out very, very quickly what actually worked. Because if we didn't figure out what worked, then we were blowing thousands per month of our own money in our clients' ad accounts to basically facilitate their advertising, right?

▶ 2:05And it was becoming a problem because even though the clients were getting good results off the back of that, and some clients were in a really, really significant ROI from us covering the ad spend, we were running into a cash flow train wreck, basically, whereby we forecasted, at one point, I think it was about October, we forecasted that in the next month or so, we would be spending over 18,000 a month on our clients' advertising.

▶ 2:30And as a small business, especially at the time, we certainly didn't have that cash because all we'd done previously was sell ads engagements outside of solar renewables and sell websites to fund the advertising costs. So we were building a website or two websites a month just to plow into our clients' ad costs, which was rough.

▶ 2:51So it was a testing and trialling time. But we look back on it and we're like, wow, if we didn't do that, I don't think we'd ever got as good at delivering results as we have. Because we just, it was literally like do or die. And I don't think many agencies have actually put themselves in that position, whereby even the ones on like 100% commission, yeah, sure, you're going to lose a little bit of money because you've got to resource the project and resource actually getting the client leads.

▶ 3:24But you're not losing as much money as the client because the client's covering the ad spend, which is going to be far higher than your resource and cost in most scenarios. So I actually would advise that a lot of agencies give it a go and actually cover their client's ad spend because, I mean, while like from a business perspective, it makes zero sense in the short term.

▶ 3:41Trust me, it did not work. But from a long-term skill development perspective, it makes perfect sense. It was fantastic for us because we just got like, you know, birth by fire or whatever it is. I think it's a huge factor as to why we can deliver results that we do for our clients now, even though they're covering the ad spend.

▶ 4:02So yeah, if you want someone to put their money where their mouth is and in some instances still covers the ad spend for clients, mainly on trial basis and things like that, then you should get in touch with us because we love all that stuff and we love proving ourselves first. And we've done that as a business and we also do that with individual clients as well.

▶ 4:27So yeah, if you are interested in that, then definitely get in touch. But I thought that would be a good little breakdown for people that like followed me more recently because you wouldn't have seen all the stuff where we were covering the ad spend, which is quite critical for us and our business. So yeah, thought I'd just give a little breakdown on that.