111: Creating Social Media Ads for Your Interior Design Business
Michele 00:00
Hello, my name is Michele and you're listening to Profit is a Choice. Joining me today is Tracy Reuter of divine social. Her firm supports businesses and growing their brands through authentic meaningful social advertising. We're going to be discussing Facebook and Instagram ads and what is the difference between an organic post, a boosted post, then paid advertising. Listen in if you think your company is ready or might soon be ready for digital paid advertising. Every day empowered entrepreneurs are taking ownership of their company financial health and enjoying the rewards of reduced stress and more creativity. With my background as a financial software developer, owner of multiple businesses in the interior design, industry, educator, and speaker, I coach women in the interior design industry to increase their profits, regain ownership of their bottom line and to have fun again in their business. Well Come to Profit is a Choice. Hey, Tracy, welcome to the podcast.
Tracy Reuter 01:05
Thanks for having me. Michele, I'm excited to be here.
Michele 01:07
I'm so glad that you are. Some of the fun things that we're going to talk about today is how to potentially have ads in our business, maybe on Facebook, or Instagram and Pinterest, how to amplify the content that we already have with boosted posts, and all kinds of ways. I've had lots of different podcasts on why we should have a digital strategy and the digital content that we should put out there, but we don't talk so much about going to the next step by taking that information and almost reusing it in some ways. We talked about reuse of content, but now we are talking on how to really amplify it and to draw people in. What I would love to do before that is to have you introduce yourself, your company, what it is you do, and tell us how you started it.
Tracy Reuter 01:57
Yeah, I'd be happy to so like I said, my name is Tracy Reuter and my agency is called divine social and it is paid social advertising agency. We specialize in the main social platforms, Facebook, Instagram, Pinterest, Snapchat are the big ones right now. For the last five years we've been running paid social advertising for all sorts of different brands, coaches, consultants, ecommerce, and we've run millions and millions of dollars worth of advertising. It's something that I thought I would never do. I had a podcast for several years where we actually taught digital marketing for over 400 episodes, and out of that came this agency that was honestly very unexpected, but it's been incredibly gratifying. Part of the reason, Michele, is because I realized in teaching digital, that most business owners didn't have the bandwidth to effectively learn the skills and execute the skills and run a company. That's where the agency came out of from that desire to serve these amazing online entrepreneurs. My life was changed as a young girl. My uncle was one of those success stories came from Greece without two pennies in his pocket and became a multi-millionaire in New England while I watched the whole thing happen. I just have such an admiration for how business owners can change the world. Once I got over my initial of I don't want to build an agency, I realized that I could actually serve these amazing world changers with my skill set and my ability to see strategy. It was a no brainer and we've never looked back. It's been a lot of fun. As a virtual team, we've been working virtual from the beginning and my staff is all over the US. We serve clients in a bunch of different industries. A lot of our clients, though, are in the creative industry, whether it's in the interior design industry or not. We do a lot with some big brands that you would find it in Michaels, Hobby Lobby, and those types of things. It's just been really fun to be able to work with such amazing people with creativity.
Michele 03:57
You had mentioned to me in that we had prior to this and then some of our back and forth, about you had implemented Profit First in your own agency. Tell me a little bit about what things looked like prior to that implementation of Profit First, were you profitable? Were you trying to figure out where things go? Like what was it that was happening that made you think there needs to be a better money management system such as Profit First?
Tracy Reuter 04:26
It actually goes all the way back before my agency even existed. It's been I think, eight years ago, because it's not cleared for my credit yet, but I file bankruptcy in 2012. My husband has had Parkinson's for almost 20 years since we were 29 and 34. Through just all sorts of medical expenses, brain surgeries, all that, we ended up filing bankruptcy and it was very traumatic. I kept trying to tell myself that the average millionaire files bankruptcy two or three times but that's not comforting when you're going through all this. When I started the agency at first, it was just me. For the first time in a long time, my own business was really profitable. And when I say profitable, I mean like money was coming in, we can actually pay bills and live off of this. Then I started to get really nervous about not wanting to repeat the same mistakes. Some of the things that happened with the bankruptcy were mistakes, and some are out of our control. So how could I not repeat that? The common question, the biggest thing that led me to Profit First was, how do I know how much to put aside for taxes?
Michele 05:33
And the more money that's coming in, the more taxes, and so the bigger the burden, the more we have to save for it. That's an all day every day, all business owners call me because that's the thing that kind of bites them in the pants, "I got hit on taxes, or I owe 100,000 from last year or I've got this huge tax bill. I don't know what to do," and it's putting you in that position of instability instead of stability that the business is supposed to create.
Tracy Reuter 06:00
Exactly and the stress. It's ironic when I started the agency, I was in the middle of battling stage three, adrenal fatigue. It was 3.5. I was on the cusp of adrenal failure, so I could only work about 12 hours a week. That's all I had. My doctor looked me in the eye and said, "if you don't get your stress under control, you're gonna die," and my response was, "well, that's nothing I'm interested in. I'm fairly young still" What do I need to do to be able to get stress under control? How can I figure this out? I knew finances for me personally, is a big trigger of a lot of insecurity. I want to make sure that I have security, and we always want what we don't have. I think most of us want security. I started listening to the Profit First audio book and was like, "oh, my, oh my gosh, like where was this before?" And so started like running the numbers and looking at it and it felt it might be a little bit better and possible. Since our bankruptcy, I've been using the software called, You Need a Budget or NAB and I knew about like the envelope system, and that was working for me so. So I am one of the Profit First voters who does not use multiple bank accounts, but I think it's a really good idea for most people. But I started crunching the numbers and looking at it, "okay, I think I could do this." We started implementing it slowly at first, and at the same exact time I implemented it in our personal life. We're gonna burn through this right, we're..
Michele 07:37
committing all over.
Tracy Reuter 07:38
Yes, all over. And then I still had my podcasts at the time, which the show is on hiatus right now. It's been around for almost six years now. We had some finances coming through there. So I implemented it over there as well and just started slowly but surely doing that across the board. It's been absolutely life changing. It's allowed me to be able to really know especially our profit allocation. I'm getting a paycheck consistently and it's getting bigger, which is wonderful, because there is a time as the owner, where you don't take a paycheck and your staff gets a paycheck, but you don't. That's not healthy and not okay. It's allowed me to see how I can make decisions to grow the company, how I can comfortably add staff. It's just really given me such an incredible peace of mind. Now this year is the first year since we've been doing Profit First for about four and a half years, I'm actually building cash reserves. It is the first time we've been able to profit and we're doing cash reserves on top of that, especially with COVID with all the things that have happened. That was my biggest concern is how many months of cash flow would I have in order to keep my staff and Profit First is allowed me as of right now, I think I'm at three months. That's huge!
Michele 08:52
It is. Funny and not funny, but I will say interestingly, I coach people in Profit First of all the time and my conversation is usually start with we need three months. Some of my friends that I'm now telling they need six, because of what we're seeing and what's happening. Some of us got the PPP and that was eight weeks. It wasn't enough. I think our idea of what's enough in air quotes has shifted, but even having started gives you a little bit more breathing room to make a plan and to do what you need to do. I love hearing Profit First success stories and how they work just because I know that it works. He made a point about starting slowly and sometimes people will come to me and they're just like, "I'm gonna I opened up my bank accounts," and I'm like, Whoa, whoa, whoa, we got to work through this." If you don't have a good healthy habit, the five is going to overwhelm you immediately. There are some businesses that are structured well enough then we can do that. For others, I say start with a tax account for profit account, then let's move up to the next account. Because it is as if I were to go to somebody and change your eating plan, your water intake plan, workout plan, sleep schedule, and we're doing it all tomorrow. Sometimes we have to make one or two changes, see how they work, get into that good rhythm, then rinse and repeat.
Tracy Reuter 10:34
One of the really amazing things that's been such peace of mind over these few years doing Profit First is I have never fallen short when the tax bill comes. That feels really good. I still have that moment where like, I cannot believe I'm writing a check this big, but it feels so great to know that I had it.
Michele 10:51
It doesn't even feel like yours. I had a client the other day that wrote a $50,000 tax payment. She said to me, "didn't bother me now." In the past it would have made her feel like she's going to be sick. "It didn't bother me because I had already separated it. And I never looked at it as my money anyway, for it was so much easier to write a $50,000 tax payment, because it really wasn't mine." Just that mental separation and all of this is worth the weight and gold that the process is doing for us.
Tracy Reuter 11:22
As business owners, there's so many things that our mental drains for us, and if we can do anything to make it easier, take it. I remember, I was never taught money management. I know a lot of us weren't also. When I got married, I brought a lot of debt into the marriage and I used to have a sheet on the wall that had all of our bills. It make my husband sick. I know but I'm going to get this and I paid it down and then we got into trouble again. Finances used to just stressed me out especially right as we were getting close to bankruptcy. Is more of if I don't look at it, it's not there and we all know that's not true. It's gotten to the point now it's actually a joke. I've got a really good friend is a bookkeeper and she's so desperately wants to come to work for us, but I said, that's probably going to be the very last thing I give up. Because doing my books gives me so much peace. It's kind of my security lab. I feel so good about the control, I can forecast better. It's just it's so amazing. It's been hugely helpful for my stress level. And God knows we all have a lot of stress in our lives these days. If we can minimize it, all the better.
Michele 12:33
That's great. I love how Profit First has eased some event for you. Let's use that and segue into how your company now solves that similar problem for others. Relieves them of the stress of how do I promote myself in a digital marketplace? What do I put out there? How do I do that? Because I think, again, like you had to stop something else and create time to dig into Profit First. To your point, when we're the owner of the company, we need to think about the three main functions of a company, sales and marketing, finance, and operations. If we are the owner of the company and we're having to handle these three main functions at a 50,000 foot level was one thing, but trying to get down into the nitty gritty of writing an ad and going online and checking it, watching it and reviewing it and updating it is different. Because you've done it, that can be a company all in it's all and it's all by itself. There's one thing about the whole digital content strategy, but it's another thing about ads, boosted posts and that kind of thing. They're all different parts of that sales and marketing. Not to mention that if we're an interior designer or draper, or stager, we're in the operations like crazy because we're actually doing that creative work.
Tracy Reuter 13:59
And delivery.
Michele 14:02
Yes. There's only so much brainspace and time space that we have. That knowledge and expertise by doing it and fine tuning it takes dedication, and it takes a lot of time and investment that we don't have. You were saying that your agency was formed out of seeing that need, so could you start by explaining the kind of the difference between a social media post on Instagram, Facebook and Pinterest. If you listeners are not familiar, there's plenty of other podcasts we can go back to, but what is the difference between general post, a boosted post and an ad for different platforms. And what is the audience that each of those might be reaching?
Tracy Reuter 15:08
That's a great question. So your general post is going to be the free stuff that you can do in your business page. You are putting out a piece of content, a video, an image, if you're on Instagram, your portfolio. A regular organic post is only going to be seen by a small select group of people who are already following you on that page. Let's just say you have 1000 people that follow your business then on average, actually right now, on average it's only about 2% of your audience is going to see that post. It can be very discouraging. Let's just be honest, but that's just how the platform works. Facebook and Instagram specifically are designed for the user experience, not for your business. We always have to kind of keep that in mind. We sometimes get really offended that you don't get the free reach. Your post isn't hitting all of your fans, but we just have to remember it's like going into somebody's home and thinking you can make the rules. We're in Facebook's home and we have to play by their rules or you're in Pinterest home, same thing too. That's an organic post which is just essentially your content that the your followers see. You have a better chance of more people seeing a boosted post. You don't really boost on Pinterest, but you can boost on Facebook and Instagram. That's been around for a very, very long time, but what most people don't realize that boosted posts is changing. I will say this is actually getting better. Facebook's making some improvements, but for the longest time the boosted posts was the lowest hurdle possible that you could do. You wouldn't have to know a whole lot. You just click this little button, tell them how much money you want to spend, cross your fingers and hope that it gets in front of the right people. That essentially you're putting dollars behind your post and asking Facebook to get you what's called engagement which are people commenting liking, sharing. It used to be you really had very, very little control over who saw that, it might be your fans, it might be people in a geographic area, but you had very little ability to fine tune that. For a lot of people a boosted post is a good way for them to dip their toe in the water. I do not recommend it, but that's where your comfort level is then do it, because this can be a little bit technical. Whenever you start talking about advertising, this becomes challenging because it's costing us something. As a coach Michele, you know this concept, which you lack in financial resources, you have to make up in elbow grease. When you lack time, make it up with finances. It's just one of those things.
Michele 17:45
I love that because people ask me all the time, what should my marketing budget be? And I asked them back, "do you have more time vs money or more money vs time, because that is going to impact how we look at your marketing budget." When we're starting, it's usually I have more time.
Tracy Reuter 18:00
And I know sometimes we're in a situation where it's like neither as well. The answer is time. So, it does get a little tricky. People get a little nervous. My co host of in my podcast, when I first started to really dig into paid social, it made her so nervous because she felt like I was going to Las Vegas and putting everything on black jack. She felt it was like gambling. I think sometimes if you don't really understand, it's not so much if you don't understand how to do it, it's actually if you don't have a strategy in what you're doing that scares people. But it is very, very much is like putting on black. So I'm a big believer in strategy trump tactics because tactics change like the weather. I tend to teach strategy because I'm not somebody you want to follow on the socials if you want to know the latest tactic. I can send you to some great places for that. Boosted posts is just kind of, hit a button and try to get in engagement. So if you want to get somebody to sign up for a lead magnet, are you trying to get an appointment? Then that is not the ideal way to do it. The third would be an actual ad. The difference between that and a boosted post is it really comes down to two things, advertising objective that's your number one. And number two is the ability to know who you're going to target with that advertising objective. Those are the two main things if I want to just keep it really simple for you. There are so many objectives on both Facebook and Instagram, Pinterest, and Snapchat. We have this methodology in our in our agency, which we call the three pillars to successful social ads. It is very, very simple. It's audience building, engagement, and conversions. Conversions is going to be where you get an appointment or a lead or you get to sell a project, that's the convergence. We all know and love conversions but when we focus solely on conversions, it's kind of like - I joked with a client yesterday - I met my husband at O'Hare Airport but I didn't marry him for two years. He didn't convert me on the first meeting. It took two years for that conversion to happen. So often when we're trying to market our business, we're expecting somebody to marry us on the very first exposure, and we have no strategy or plan to get them to for courtship, or for dating or for any of those things. That's really where the advertising strategy comes into play. Your organic posts or basic posts can help that process, but the problem is, if you try to make the pathway to conversion happen just on organic posts, going back to the fact that maybe 2% of your followers are going to see that, it's a very long and slow road and that's why if you don't have the money to start running, some type of advertising plan, you really do have to hustle on social. You have to be out there. You have to be posting constantly, you have to be in front of people and that can be really difficult to do that and run a business.
Michele 18:00
It can be exhausting. exhausting. So we understand the difference between just an organic post that we put out there, boosted is really where we're really just trying to engage them. We're trying to get a like a click something we're not trying to sell them right there.
Tracy Reuter 21:31
That's just what Facebook's objective for boosting content. You might be trying to boost content themselves but Facebook is not going to necessarily put that content in front of people who are likely to buy from you. They're going to put that in front of people who are likely to engage with you and they are not one in the same all the time.
Michele 21:51
Good point. We really want to have a strategy. The ad gives us more flexibility to do that, who we want to see it? What is the demographic? What do we know about them? It's targeting.
Tracy Reuter 22:05
It is and also the objective,. This might be really helpful because a lot of people don't understand this. So when it comes to any social ad platform, the ads themselves have objectives. For example, when every time I say Facebook and Instagram, because they're exactly it's the same advertising platform but maybe your listeners will use Instagram because there where they
Michele 22:29
hang out a lot.
Tracy Reuter 22:30
Yes hang out a lot. So when you're going to run an ad, there are multiple ad advertising or campaign objectives. One might be reaches. This is when you say to Instagram, get this in front of as many people as possible, but since that's all you're asking, that's all you're going to get. Another one might be traffic. That's saying, "hey, Instagram, get as many people as possible to click this link and go to my website." One might be video views and you're saying, "instagram, I want you to put this ad in front of people who are highly likely to watch my video". Another one might be conversions, where Instagram will put this ad in front of people who are highly likely to convert. They're all very different and it is in each of the campaign objectives. You can't do this with boosted posts. Each of the campaign objectives are designed to meet people at different stages in the customer journey. This is kind of when we want to get into some old school marketing fundamentals. Key things from these are timeless, this is long before digital. Number one is the customer journey, the steps and stages in the customer journey from awareness to advocacy, and the steps they have to take to find out about you then become a raving fan. That's one thing we need to learn about. The second thing we need to learn about is the rule of seven. This rule is actually probably more like the rule of 500. So the rule of seven is it on average it takes someone seven exposures to your offer before they're going to make a decision. Now the reason I say it should be the rule of 500. Michele is the average adult right now in 2020 sees about 500 marketing messages a day. Seven is old school marketing principle that holds true but the numbers different because that was designed before digital existed. It was back in the 30s for early television, radio, those type of thing. In those two things, you've got the customer journey where people are at different stages. Not everybody's ready to buy from you right now. Not everybody's ready to redo their master bath right now. That doesn't mean you shouldn't be getting them introduced to your ecosystem. You want to have a deliberate process to move them one step closer so that when they are ready, you are the obvious choice. So using the different campaign objectives, you can actually strategically control someone's exposure to concepts to your work and your ideas. You can move them through that customer journey. When it is time for them to pick up the phone, you're the obvious choice.
Michele 25:11
I'd be like, okay, you're hired! I understand it all what we do anyway, even verbally, How to show up online plus a lot more to it. This is just one kind of layer of what we're looking at. Then you can move down and you're creating these profiles of who are these people that we want to see on the customer journey. If you're going down another layer then even in some places, when you do it, you're going to have to be willing and able, even in your own business, to create time. Because let's say that you're trying to get somebody to set up a strategy call or engage with your company for that very first call. You can see if they match. Let's say that you hit the lottery of ads and everybody starts calling, you've also got to know when to turn them on and when to turn them off. You can manage what might be coming in or what might be happening to be able to fulfill whatever it is that you are promoting.
Tracy Reuter 26:17
Then there's pros and cons with that too, because you haven't created what I like to call an evergreen sales machine for yourself. Now you have to start and stop and start and stop. So there's definitely a lot more into this and I want to make sure to be really cautious because we run very high level and very complex campaigns with clients that are spending, our biggest client spends $5 million a year on Facebook and Instagram. But we also have clients that spend, 1500 dollars a month, most of them spend more than that, but to keep it simple and not to intimidate anybody but it is really important that in order to grow your business and to have a stable business you always have to have new people being introduced into your ecosystem. Back in the day before I had a digital agency, when I was an Area Vice President at at&t. I used to run a division of sales division in the Windy City and we always used to say that people buy at 12 o'clock, what happens if they come into your ecosystem at three o'clock, or at 215, or at nine o'clock? You have to have something to keep them to stay in front of them, to keep moving them until when they are ready. You're always bringing new people in to have this healthy funnel of prospects so that when you get a job, you've got something coming by the time that one's done. That's ultimately when we talked about stress earlier with the finances, to also helps lower your stress. If you know that six months from now, you're booked out solid, you'll sleep good at night, but if you don't know you're booked tomorrow, like that is stressful. So I think paid social can really help build a machine for you so that you're always moving people through at different stages. That's really important for the long term health of the business.
Michele 27:59
Alright, so now that we have a little bit more money than time, how do we make a decision on how much budget we should put towards? Let's just talk about ads. We're going to spend the money so let's just go ahead and go for the big boy here. How much money do how do we determine how much to put towards it?
Tracy Reuter 28:20
That's a difficult question to answer. Honestly, I get asked this constantly.
Michele 28:23
I can promise you that number of 5 million for the year scares people. "Oh, God, it would shut me down." How can I make 5 million a year so there's no way I could put it out. Many independent micro businesses because even the word small business is for 5 million and under. So let's say micro businesses 1K, 2k ,or even 500,000 for total revenue, those are still really nice, great businesses. How can they even engage in all of this? Because the idea of spending multiple thousands a month means I better have a killer ROI on that because if I'm throwing not only the ad portion, but many of them are paying somebody to create, it starts to mount up really, really quickly, then you're also paying somebody else to implement your organic strategy.
Tracy Reuter 29:27
For sure, you probably have someone on staff or you're outsourcing it, there's no question. Let's kind of talk about how a lot of our clients started. So just for perspective, the client that spent 5 million a year and we took them over, they were spending 1500 a month. That's how much they've grown over the years by having a intentional strategy. The key for the biggest challenges that I see with boosted posts is people do that with no actual strategy. It's kind of that familiar throw as much stuff up against the wall and I'm going to hope and pray that something something sticks but that's frustrating then you're feeling like you're losing money. There should be an actual intentional strategy with good method. I'll try to come back to the budget question in a minute because I think that's very unique to the business. First of all, number one is you really need to have a long term mindset for this. Let's just say you're using Profit First. well, let's hope that you are if you're not sure. One of the things when I do our budget is having a line item for advertising. I try to use 10% of our net income, I put aside of that not from a top line, but from net income. After I take out like contractors and all that stuff, that's just a rule of thumb we use. So that might work for you but for you might be 5%. You've got to start where you can start and the biggest thing is, as I would suggest, make a mental commitment for six months, or at least six months. Then you start to do the math, put aside $1,000 a month for six months which gives you a $6,000 budget for six months to use. There's a concept in all advertising, billboard, radio, newspaper, digital, you name it. This is from my perspective, as an agency owner working with clients, right around the third invoice or 90 day mark of us working with a client or anybody, this isn't unique to my company, we call it the chickening out period. It's right around the time where all the seeds that we've planted, all of the work that we've been doing, and the ads are getting ready to sprout, but they hadn't sprouted yet. Typically, this is when we get stressed out. We chickened out then we cut the cord. I cannot tell you how many times I've seen it personally, my peers have told me about it too. My mentors have talked about this. It is a common thing when it comes to advertising. In our agency, we have a minimum commitment of four months, and it's purposely to get them past that 90 days. I know if I can keep you calm for 90 days, we're going to have fruit from all of the efforts that we put out there. So whether you're doing it yourself, you're hiring somebody commit to six months, figure out what you can comfortably spend if you don't make a single dime, Michele, that's the key.
Michele 29:58
Feels like Vegas,
Tracy Reuter 32:12
Exactly. It feels like Vegas. The answer might be only be $100 a month, and that's okay because you have to start somewhere. There's a saying that you don't despise small beginnings. If it's $100. It's okay. That's why I never answer the question with you should spend this much.
Michele 32:29
And I do know that it does vary, but I love that there is a strategy behind it. You use the term net profit, but I'm thinking that if we were looking at the full on p&l and gross profit, because total income minus cost of goods, for example, you're not taking out all of your cell phone expenses. So if we were to look at that gross profit or real revenue, that number is the number that we start to allocate to all the 500 ways. If we look at that number, I think I would be willing to give this a try for six months with 10%. Maybe we go down to eight, or even go down to five. Let's say 5% and $6,000 as the starting point. I am willing to give this a shot for the full six months. We do that and working with somebody who knows what they're doing so we're not out there putting out junk ads that are just chewing our money because that can happen. Then we could expect if it's done well, although the results will not be the same for everybody, what we should be looking forward to see if it is a good investment and if our ad is is really getting, what we want to be getting? Is it reaching who we want to be reaching? How do you know that the ad was done correctly?
Tracy Reuter 32:38
I'm gonna step back one more time. Let's come back to that because I think that's an amazing and important question. Let's say we allocate this budget. You're comfortable with it, commit to it, you're not gonna lose sleep at night, you're willing to gather data and to test it, then you have to think about it as doing market research on what people are responding to. What content people are responding to messaging. There's a lot of testing that happens in marketing. Secondly, what you want to do is that money that you're comfortable putting out there is to split it about 80/20. 80% of your budget should be just in the audience building and engagement. So when I talked about the three pillars, I have a free little mini course that listeners can download mode in my website, www.divinesocial.com/profit, I have a download that they can go through. It's really with a worksheet and everything.
Michele 35:12
That's in the show notes too.
Tracy Reuter 35:15
Yes, 80% of your budget devoted to audience building and engagement. This is where you're going to get all these new people into your ecosystem so let's talk about what that ad should look like. Video tends to be the best. Michele, have you talked to top, middle, and bottom of funnel? 80% of your budget should really be a top of funnel ad, introducing people to concepts, ideas, some of your work, what you do, or something very benefit driven. Then 20% of your budget is for retargeting all those people that you did in that with it. 80% of your budget moving them closer to purchase or to an appointment or to a lead or whatever the case might be. That's the simplest structure I could recommend. Once you have that, what you want to be looking for in the beginning, the top of funnel ad, is it getting people engaged with you. Are people watching your video or commenting? Are people stepping into your ecosystem? Let's say we're running a video, are they watching it more than 10 seconds, or they didn't stay to watch it. Start looking for some clues that people are actually consuming your content. That is the first key performance indicator, what type and how many new people have you gotten to actually consume your content. You want to make sure that number is growing and ballooning because that is critical to get them to the next step which is how we're gonna get the return on that adspend. Get the people who have self identified as potential people to move to the next level with you and the only way we're going to get them to convert is if they kind of move themselves through that. Let's face it, most website traffic converts at 2 to 3%. The first time someone visits your site, people aren't ready to buy on that first visit, they're not. You might run an ad and website visitation is the only conversions, or you might convert a couple, then it stalls out, because you just got all your low hanging fruit but you have no strategy to get the higher up fruit and move them into the low hanging fruit. That's what this 80/20 does. A great example is we just bought a house in Florida, and for the first time in my life to live in the south. My first time having a pool. I feel that I'm adulting for the first time and we have a pool cage in Florida, you have to have the pool cages, otherwise you you don't enjoy your pool. When I need my pool cage rescreened, I've got stuff everywhere and I happen to get served up an ad. It was perfect timing, like they had me bugged in the house, they knew what was happening. I was an example of somebody who was ready now. Actually, that's not entirely true. The first time I saw the ad was about six weeks before I was ready. Then I remember thinking, "gosh, I wish I could have saved that because now I can't remember that company's name and now I'm ready." Well, it popped back up in my newsfeed again, thank goodness, the guy had turned it off, then he turned it back on and I was able to connect with him. If he hadn't done that, he would have missed me because I wasn't ready then. He went away and there was no communication. I didn't get put in this funnel. Nothing happened for him to recontact me but because he turned his back on, I was able to be writing now, but most people aren't ready now when they see your ad.
Michele 38:50
Bad timing then, it may be that we do have a strategy where we turn ads on for a while and then we turn them off then back on. Or we change the ad up, or we move them through the funnel, not that we just leave them hanging if they could tell that you had consumed it.
Tracy Reuter 39:10
Maybe he needed the 80% strategy and not just the 20%. He didn't have the good ad strategy when you're turning off turning on because you're losing the power of the algorithm and the power of what the Facebook and Instagram have.
Michele 39:28
You really got in his funnel. He made an offer before you really knew who he was and identified the need that you had for his product. It should be when it was identified and then be ready be there when they're ready to purchase.
Tracy Reuter 39:44
His ad is an ad that was an image only. One of the reasons I'm such a big fan of a super small budget using some kind of a video ad to warm people up is because you can then create an audience of people who have watched your video and you can retarget them at a later date. That's a big thing. If I've got a video that is a walkthrough. I'll use an example, there's an amazing family owned furniture store here where I live in Sarasota, Florida that have four locations. This furniture store is not your traditional furniture store. They don't have furniture salespeople, they're designers on the floor. I had no idea that this company existed, except I stumbled into it, and now I'm a big fan, but if I were consulting with them, one of the things I would be doing is I would have a video ad running, targeting homeowners or people at a certain income level. I probably would have a video on their showroom floor talking about how they are not furniture salespeople. They are actual designers. What you can expect then I would essentially create a video audience and if they got sucked in and watching this amazing video with these beautiful pieces that are unique and not cookie cutter, they could then retarget me with their next sale. I know that's a little bit different than your average designer, but that's just an example because it's different. By me watching that video, I would then be pulled into their funnel. Even though I'm not hitting their website, and I'm not a lead, I'm in their video viewer audience and can now they can serve up an ad to people who watch their video and move them through the process. This is what I mean by having an intentional strategic plan and not just, "oh, let me hit the boosted post and hope and pray that this converts."
Michele 41:28
Let's say that we're business owners. We have our organic social media happening. We have a team internal external support. However, how do we know that we are poised, positioned, and ready to take the next step into looking at ad spend for Instagram, Facebook or Pinterest?
Tracy Reuter 41:50
How do you know as a company you're ready for that? I think there's a couple things. Number one, you need to make sure to have some infrastructure in place. Make sure that you have something where you can, whether it's capturing the lead, or a web property that you can drive people to. You have the ability or the capacity to create the content. Yhe content should be very specific. I'm a big fan of Stephen Covey's book, The Seven Habits of Highly Effective People. One of the habits is we begin with the end in mind. What you need to be able to do is think about what's the ultimate outcome you want, in your business from these prospects, then work your way backwards and start thinking about, "okay, what do I need to do? What type of content I need to create that able to amplify and would naturally move them to the next step." You need to be able to create that kind of content and put that together. I usually recommend have some kind of a landing page of some sort. You want to be able to have something that drives people to the next step. Once you move past i.e. a video view, it's really important that you have the right mindset to just make that commitment. Even if you're doing it yourself, the worst thing you can do is start stop and start stop. It's just like what you're saying with the Profit First with taxes, your client wrote that check, because it wasn't even hers. If you think of your advertising budget, it's not yours. We want to always get a return on our advertising. But if you were to run a radio ad, you have less control over who hears it, you don't know what's going to come of it. I don't want to say necessary evil, but in a way, it's a necessary evil, to advertise our business. If you look back prior to digital, everybody advertised their business. Nobody thought twice about it. It was either word of mouth or they put a newspaper ad. We have a generation of entrepreneurs that grew up digitally, but they have no concept of actually investing in their marketing. What do you mean? Invest? It's free. I'm just gonna get on Instagramand so we sort of have to start thinking like businesses, especially large businesses, who have an advertising budget. Look in the mirror and do a gut check. When you can say confidently, "I'm willing to make that commitment, I'm willing to learn, I'm willing to take some risks, knowing that I'm not putting it all on black and going to Vegas, because I'm going to actually try to have a strategy here." I think even if someone listened to this podcast and implemented a few things, they would have more of a strategy than if they hadn't listened to it at all.
Michele 44:32
Right. I think one of the things if we were to really step back and look at just kind of the evolution of the gig economy or the ability to just start a business from your home and do all the things that we do, many of us do, look at all of the income and think it's ours, versus, "yes, income for the company. And now what is the company budget look like?" Because Instagram, Facebook, and all of that started off in a way that we could almost word of mouth and have success from that. Then they took a step back and started putting barriers up and making it now a little more pay to play. We have kind of been inoculated to not have to pay. In some instances, there's been so much ease of entry into business. When the rules change, like you said earlier, we're walking into Facebook's house, so when they change the rules, and we don't go back or haven't built out a strategy in the business, we don't know how to move forward. This is just a really good time to think about how much am I willing to pay on advertising spend, then how much am I willing to pay for the marketing materials? How much am I willing to pay for a strategist to help me do it? Because sometimes we go, "okay, I could do the 6000 ad spin," but you also have to be able to pay a strategist or develop your strategy yourself. You got to pay somebody to build content or you got to build it yourself. There's a lot more to it. Even with me, I have online educational content. I probably spent $100,000 over the years trying to not only build it but have automation put in place. Do you have a ead magnets that lead to all of the things you offer? Do you know that you don't have to do it all at once? Backtracking, we can start somewhere and start small. I would rather somebody start small with a strategy then start large without it
Tracy Reuter 46:40
That is so so smart. Maybe this will resonate because you're you know your audience are designers. So this furniture store I'm talking about, I wanted to be an interior designer as a child, I wish but I don't have the eye for it at all, but I want to make this house beautiful. I've been struggling with that, because I want to replace everything! Right now I want to replace all the furniture, I really want to do everything. I want to rip this out now so I went into the store and met this amazing woman. I think her name was Barbra Jean or just Barbara and she's incredible. She says to me, "look, one thing at a time, let's focus on one big piece, and then build your room off of that." Then I said, "Well, I found the piece." However, it was kind of like, she gave me permission to slow down and think it through. Not to rush and do all that so I could overtime make my house into everything I've always wanted it to be because it's not realistic for me to do it all at one time. It's just isn't. It's the same thing with ads. Same thing with marketing your business. That's why, shame on me, I ask your listeners to forgive me to even have brought up the $5 million client because it's true. That shuts people down, but in order to get there you have to start somewhere and it's okay to start small. Don't despise the day of small beginnings, but make sure you can make that commitment and do it with some intention. The reason I say six months and be okay that you don't make anything is because it's just a really important mindset. If you run an ad, and you think you're going to be a millionaire by tomorrow just because you believe, it won't work and you're going to give up too soon. You're going to be impatient and put a lot of pressure on yourself and on whoever you're working with. It's not pleasant for anybody. So that's why if you have a long term vision, then take the short term action, you're gonna have success in any kind of paid social.
Michele 46:40
I love that. It's the same kind of thing when we used to think, "oh, I'll just put a print ad out," and you put it out one time and you wonder why everybody's not calling and coming in. You have to stay in front of them. It's the same with concept seven. If for some reason we act like we should be able to do it for free. We shouldn't have to do it.
Tracy Reuter 48:41
If you can fast forward and six months from now, the words are going to come out of your mouth is, "I spent $500 but I didn't get a thing," that's going to make you feel awful because you still don't have the right mindset. The other thing we haven't talked about Michele, that we didn't even bring up at all is a lot of times the price or the cost of your offer should dictate what your budget is. If your offer is a $14,000, to for example, remodel, and you think that you're going to get leads for $1, you have the wrong expectation of how that should look, because that is a high value lead that you're trying to get in order to close that deal. We could probably talk for six weeks on all of this because there's so many things I can keep talking about, but mindset is more important than anything. As a business owner, we have to be really e good stewards of our finances and really like you said, "this isn't your money, this is your company's money and in order for the company to grow, what strategic risks do you need to take in order to make that happen. Advertising should be one of them. But you have to be able to have the intestinal fortitude to do it, especially if you're brand new.
Michele 49:18
Right, and again, it's got to be the strategy and it's got to be done well with a lot of forethought—that's one of the big things that I teach in my business. As we're scaling, I teach my Aim with Intent methodology, which is align your team, ignite your process, manage money, and do it all with intention. So we have to have the strategy for every area of the company and marketing and advertising is absolutely a part of that.
Tracy Reuter 50:47
Yep. For sure.
Michele 50:49
Tracy, thank you so much for sharing so much today. And you know what, I'm not bothered by the 5 million client. I think it's awesome to know the possibilities. It may not be the possibility for me based on the type of business I have, but even knowing that it is a possibility from $100 to 5 million and the thought that they came in spending $1500 a month, but then were able to move up to 5 million a year tells me that there's such a huge growth opportunity. It must have been working for him, or they wouldn't have kept putting more money towards it. When you look at it from that, ours might be $100 a month to $1500 a month, that might be our equivalent. That means that we can trust that it is working, or we wouldn't keep moving up the budget.
Tracy Reuter 51:34
Correct. If you just look at social ads in general, if they didn't work, there wouldn't be so many people putting money into it. I think it's Gary Vee that talks about this a lot. Typically, it's not that the ads don't work, it's that it's usually either you didn't give it long enough or, you didn't get the right help or whatever the case might be. There's very, very few industries that social ads don't work for, the design industry is beautiful because of things like Instagram and Pinterest and Pinterest ads, which we didn't really get into today. Pinterest ads tend to be much more of a longer play. It's a much, much longer process than Facebook or Instagram would be but still it is a thing to consider, as well as at some point. What kind of presence do you want to have over there? That's another story for another day. It's just really important to be thinking how can you steward the money of your company so that your future growth is happening. You have a plan today for future growth, what you're gonna do six months to a year from now?
Michele 52:38
That's exactly right. It is the future growth in the Fixed This Next hierarchy of needs. We look at that bottom level for comparing it to Maslow's. That bottom level is sales, and if we don't have sales which is the lifeblood of the company, we've got to constantly be working on it. The we can be profitable, you can't be profitable with no sales. We have to put money towards that endeavor to make sure for many of us is the three to six month game. From the time we meet them, to the time they're ready and courting them through or as we are getting our contractors ready. There's a whole courting process and that's why when we turn off all of our marketing, even word of mouth, or we say that we're too busy and we're not responding, when we turn it back on, we got a three to six month lag before we can start to get business back in the door. So whether it's digital or it's word of mouth, that on and off on and off is damaging to a company.
Tracy Reuter 53:34
That's very dear to me. Think about driving a car if you gas brake gas brake it is bad for the car.
Michele 53:41
Well, Tracy, you've given us lots to think about and lots to dig into. Tell everybody your website. I know you mentioned it earlier, we'll have it in the show notes, but tell them where they can find you hanging out?
Tracy Reuter 53:51
So you can find me pretty much in most of the social channels. lately. We've been a little quiet because we've been so busy with an agency but our website divine social comm, and if you go to divine social comm forward slash profit, I've got the free mini course of our three pillars to successful social ads. If you are a listener that you've been listening to this and you're thinking I'm already running traffic, one of the things that I'll do, Michele is if if you're running traffic and you're spending because you've got a budget of at least $3000 a month. You're on the higher end, then I will do a 15 minute complimentary audit of your account to give you some feedback. The only reason I can't do it to lower budget is because there's not enough stuff for me to dig into, but if you If that's you, and you want to pick my brain, I'll give you 15 minutes. I'll pick through some of your things to tell you where you might be able to shift from that, to that 80/20. You can just email me direct at Tracy@divinesocial.com, and I'm happy, happy to do that.
Michele 54:44
So that sounds fantastic. Thank you for that and I'll make sure all of that is in the show notes. Again, thank you for your time today.
Tracy Reuter 54:52
It's my pleasure. Thanks for having me. It was so great, great chat.
Michele 54:55
Creating a marketing and advertising budget is definitely something we need to consider. As we grow our businesses, along with identifying the social channels where our ideal clients are hanging out, take some time to be intentional with a strategy for your company. If you need assistance because you feel like the business is outgrowing you and maybe you're running to catch up, reach out and set up a discovery call with me. I'd love to help you. You can do that on my website as Scarlet Thread Consulting com, be strategic and intentional because profit doesn't happen by accident.