Why You’re Not Making Money From Your Marketing

This is one of our clients; for every dollar they spend on ads, they make $17.84 back.

The reason?

They've focused on just one channel.

Here's where I see most companies are going wrong in scaling:

"Here's all the channels we're doing:

• Threads

• Blogs

• Newsletters

• Podcasts

• FB Ads

• LinkedIn

• Bluesky”

The logic sounds good.

More channels mean greater exposure and more sales.

From what I've seen after being hired by these same people is that they are doing a half arsed job of all of them and miss out on the exponential returns of just nailing one channel.

Here is a rundown of launching just one channel - Meta Ads:

Research & Build:

• Conduct comprehensive market research

• Set up ad accounts with precise targeting and tracking

• Build effective campaign structures

• Write copy that is backed up by your research

• Make creative that fits the copy and target customer

• Create a high-converting lander

Testing Phase:

• Run at least $1,500/month to gather useful data

• Monitor performance daily

• Optimise ads and copy based on performance

Scaling Phase:

• Test different audience segments

• Continue to produce new ad variants

• Scale budgets strategically ($5k–$10k/month)

• Find out why performance issues come up and solve them

Now imagine doing this for 5 - 7 channels all at once.

I can't multitask at the best of times, and I bet most companies are the same.

Like anything, nailing one thing first, then moving to another, often yields the best results.

A focused effort allows people to apply learnings to one channel and scale faster.

Typical channel progression:

Week 1: Small losses as you learn
Week 2: Break-even point, refining targeting
Week 3: Find scale

AI has allowed people to do this exponentially faster, but from my experience, taking one month to nail a channel and move to the next will yield the greatest results the fastest.

Debt

Every year, twice a year, since we've started this newsletter I've written about controlling costs and avoiding debt.

Why? They're the two simplest but high leverage ways to keep a business alive.

And before anything else in business, the goal is to stay alive.

You've heard all the stats about how many businesses fail after two years. What you might not know is those numbers don't get much better after five and seven years. If 50% fail in the first two years, another 50% of the remaining bunch fail after five.

Most of us get into this game to first have freedom and secondly build wealth. You can't achieve either of those two if your business dies, and every business will face near death moments.

To get through them you need slack in your system.

Slack in your PnL to handle unexpected costs, slack in your balance sheet to handle unexpected losses.

Keeping costs under control and avoiding debt gives you slack.

Something that may help here is a rule of thumb I learned about debt from the rich dad, poor dad books.

There's good debt and bad debt.

Good debt is debt you take on to invest in to productive assets, that will produce more in return than the cost of the debt to own them.

Bad debt is debt you take on that doesn't produce a return.

Taking a loan to buy gym equipment that attracts more members is good debt. Debt to buy a vending machine that pays itself off twice a year is good debt.

Debt to cover bad receivables is bad debt. Debt to buy stock that you can't sell is bad debt. Debt to service other debt, is terrible debt.

That last scenario sounds silly, but read all the liquidation articles in the paper and you'll see that’s what’s happened. Eventually these businesses have found themselves in a death spiral of sorts and in desperation borrow to cover the costs of other borrowings, until eventually the house of cards falls over.

That's how a business doing $1 mil in revenue falls over somehow owing almost as much to its creditors.

I don't say these things with a clean slate either. I took on a mountain load of debt to keep my gym alive, at one point we owed as much as our revenue in debt. I was lucky to survive, most don't in that situation. And I'll never forget the pain and stress I had to go through to survive it.