Or listen on:
In this episode of Confessions Of A B2B Marketer, I’m joined by LinkedIn legend, paid ads machine and agency owner: Justin Rowe of Impactable. We get Justin to break down his LinkedIn paid strategy… but then also learn how that can tie in with cold outreach and organic posting. We then go on th learn about how Justin built and sold Linknlearn (his LinkedIn marketing agency).
Thanks for listening and hit me up on Linkedin if you have any questions!
Episode transcript
The one thing I learned from the outreach is the quantity play still applies. Like the more people that you can get in front of for the first time, that does have a ton of value. And if you hit the right person with the right offer at the right time, like that actually will convert.
Justin. Hey, how’s it going? Very good. How are. Uh, it’s been a busy weekend and a busy week so far, and it’s only Tuesday, so good news, but bad news. Were you working on the weekend or was busy with other things? We had our second annual kind of team meet up so. It’s been, I guess we had one last year right after our acquisition and then we had, Cuz before that we were just our own remote, so we had our second one this weekend.
So I flew out to Texas this time when we met up as a team and had eight hours of meetings on Saturday. And then we relaxed a little bit. We had Dave and Busters one night, Pickle and Chicken another day, and then Sunday was kind of a half day of relaxing and fun. Nice. And we’re gonna talk about the acquisition later in the episode, but before I wanna talk about LinkedIn, but even before that, I wanna talk about sandwiches.
Poof. I could fill up your whole episode here about sandwiches. It’s kind of a life, it’s a passion lifetime. Uh, fascination. Yeah. I actually really love sandwiches. So right now, what’s your favorite by this very moment? I would still say the wreck from Pot Belly is one of my favorite sandwiches, but I’ll make a sandwich.
I of anything. So when I was a kid and we had like rolls and ham and stuff, like on the table at whatever I can do, I’d make a little sandwich out of it. What is the wreck? Like, what, what’s included in that we don’t have properly in the uk I don. Fail. Yeah, it’s probably, I think you might have one or two in there.
One might be London might be the closest. It’s kinda a mixture. It has like Swiss cheese, ham, roast beef, some salami. It’s been a actually been a while since I was in one of our own shops. Uh, so I should probably, if anyone sees this, they’re probably gonna be embarrassed that I can’t just like rattle off the ingredients.
Mm-hmm. , but then they, one of the things they do really good is the bread is really, really good and they have like fresh ingredients and hot peppers, like this jar air mixture of hot pepper. Really, really good. Makes me actually want go get one now. . All right. And so I also love sandwiches as well, and I, if I’m like eating a curry for example, I’ll take like the non bread and I’ll make like a little mini wrap.
You know what I mean? That healthy choice . Exactly. But for now, let’s talk. Because obviously I wanted to get into like the growth and the acquisition of the agency, but the thing that you do, I think both pre and now post acquisition and what you’re famous for on LinkedIn is using pay spend on LinkedIn to get customers in a slightly different, uh, holistic and I would say even healthier way than I think it has typically been done before.
So can we go back to the start, like this new way of paying to get customers on LinkedIn, When did you start doing this? And then we’ll jump into what it actually. Yeah, so originally we were a LinkedIn outreach company, so we were one of those people that you probably hated or saw. I mean, people didn’t really hate us, but people hate on the idea of like outbound in general.
And uh, but anyway, so we, we were a LinkedIn outreach company originally. A lot of our clients, we would get that way. We would get ’em to do freelance sites. And early on I became fascinated with paid spend in general because I wanted to scale my. I couldn’t afford to have these ad channels created and managed for me, so I would learn and uh, kind of grow it myself, and I actually fell in love with that.
So it really, it was probably about three or four years ago when I started dabbling with first Google search and then a little bit with Facebook, but I never found a ton of success. And then I started dabbling with LinkedIn ads, and so probably it’s been a good three years since LinkedIn ads has been a staple for us.
But it was on kind of a, a smaller scale, like Google Search was probably the number one paid acquisition channel for us until maybe about a year. And one of the big shift. That caused LinkedIn to become our number one acquisition was two things. Well, number one, early last year we pivoted, made a conscious decision to stop kind of investing in growing and aggressively pursuing the outreach side and pivot into ads as I felt stronger about it.
And so I started putting more of my time into that, testing more, and using that side to grow us. So I would say probably about a year since I really dove into that deep and it became like the number one acquisition channel for us is around the same time that we started offering that to clients as like a primary.
It kind of makes sense that to shift the positioning of the agency towards just pay spend, cuz it seems like that for, I don’t know, it just seems like it’s a harder problem to solve than outreach. Would you? It is, and it’s a more legitimate problem to solve. I feel like , the outreach agency was like us really operating on the fringe of like what’s acceptable in the gray area of what’s allowed and not allowed in terms of service is where we lived.
Which is Dan a dangerous place to spend a lot of your time. Exactly. Having your whole business based on like the rules of one platform. Totally makes sense. So, and ever since you then started, like when, at what point in your LinkedIn ads experience did you go with this? Well, I don’t know. It’s more like a two layer education strategy, right?
Yeah. So actually before you jump into that, if you could just share like how you typically, the high level strategy for how you run LinkedIn. So the, and I guess I can answer both at the same time, cuz when I first started, I had a small amount of spend and I was getting in front of my target prospects and I was just, I guess the whole idea was I was just putting quality traffic on my website.
So my, my ad strategy overall was very like one dimensional. It was like Google Ads was putting traffic on our. I was trying to use Facebook to put traffic on my website, and then I was using LinkedIn to put traffic on my website and just comparing those like, uh, LinkedIn traffic is more expensive, but I believe the quality is better, so I’m not gonna worry about like cost per click, whatever.
And then I started getting into, I was fascinated by retargeting and I was stealing from like e-com kind of playbooks at first, and their whole idea was just, They really stay in front of you and they stay top of mind and, but they have a very simplistic approach. Like they just stay in front of you with the product.
So at first that’s what I was doing. Like I was just doing retargeting, well, like creating these little buckets, these segments, and staying in front of them for 90 days. And I didn’t really have a strategy about. What I was doing with that time, I just knew that if I could stay in front of my target prospects, the likelihood of conversions would increase and that that actually worked.
That was a good step in the right direction of focusing on that, having a dedicated budget. And then I started to realize that it kind of helped my other channels too, like I’m paying for these Google ad clicks. And then I’m able to retarget them on LinkedIn. And the thing that I loved about LinkedIn retargeting is I could set filters like all these.
I start being able to compare these other channels and I say, Facebook just lets me retarget all my website visitors. Google Display is kind of the same. These other platforms can work, but LinkedIn says they visited my website within 90 days and they’re a director level and above at one of these industries in the US from a company size and this range.
I was like, That’s pretty powerful because now. That became my go-to retargeting because I was able to like kind of qualify the traffic and retarget and then it kind of evolved from there where the more results I got, the more I could invest and kind of up my LinkedIn spend and the more I kind of like mad scientist.
Tried things and then I was like, so one thing I stole from the outreach was how, what objections are we overcoming? Like you could just pester people like nonstop for six months and just simply being persistent, like can get conversions. Like if you really are hitting the right person and timing is the only issue.
Sure you just persistent, you can get conversions. But I started doing deeper thought and I guess like I didn’t have like some external like resource that. Telling me or like guiding me on this. I was literally just kind of like starting from scratch and like trying to build something and I said, So what objections are we overcoming with ads then like maybe they don’t.
For with cold outreach, the biggest thing is they don’t know us. They don’t trust us. So we were trying to incorporate like little things like, Hey, we’ve worked with companies like A, B, and C and our typical clients C results like this, and I’d love for you to check out this, like trying to position ourself as experts.
That was our outreach strategy that worked really well. So I tried to steal that into our ads and I said maybe if I can stay in front of them and position us as the experts in our space, that would help. If timing’s the issue, I can put anything in front of them. It’ll overcome that. But if their main problem is they don’t know us, they don’t trust us, or they don’t view me as the expert yet, then I need to probably focus my attention on overcoming that.
So that’s kind of the basis of how we got into retargeting, why I love LinkedIn retargeting, and then I could go into more detail about that retargeting strategy. But that’s kind of like the premise of like switching to building trust and credibility as what’s now like the cornerstone of that. So you advocate two-step strategy.
Right. And we just dug into the really the power of LinkedIn on the retargeting layer because you can only retarget and spend money to put your ad in front of people. That could be buyers. Yeah. Do you, But then you still advocate the top layer when maybe there could be other ways of getting traffic to your site that you then retarget on LinkedIn.
Is there a reason why you also say that people should spend to get cold traffic to the site? Yeah, I mean, it is kind of like when you just look at all the possible people who could use your. Most of them have never heard of you before. And if you have a relevant service and you have a good idea of who could help most, there is a lot of value in the one thing I learned from the outreach is the quantity play still applies.
Like the more people that you can get in front of for the first time, that does have a ton of value. And if you hit the right person with the right offer at the right time, like that actually will. Not at a, It’s hard to make that a profitable conversion, like consistently in that scale, but it, that will actually convert.
And what I realized is I can build these retargeting funnels where it’s working this data, it’s staying in front of them for 90 days. It’s shaking out the conversions, but then it, that part doesn’t actually take a ton of the spend. Like if I have a $10,000 a month budget, my retargeting layers might take $3,000.
And then the effectiveness or the power of the funnel is pouring the other seven grand into the top of the funnel to get circulated and be retargeted and kind of sort them out. So I realized, you know, and I went through different phases where we made mistakes, where we had, At first I made the classic mistake of like, Oh my gosh, all my conversions are coming from these retargeting campaigns.
My cold layer isn’t producing like really conversions. Let me like dial the spend down on that and dial the spend up on retargeting. And that. You can realize that that’s some faulty logic there. Hmm. So it became really important. It became really evident that you needed a to dump. A lot of you needed to put that top layer in to put traffic on your website, get in.
Quality people, but then the filtering and the nurturing and the positioning of the retargeting layer is what would get the most outta that traffic. So yeah, it kind of evolved from that and I, it wasn’t just a straight shot with no errors. I definitely made some mistakes too. If you think about it, the difference between cold LinkedIn AS and cold LinkedIn outreach.
Isn’t actually that significant. It’s essentially the same thing on the same platform. You’re putting a message in front of them, you’re just either paying someone to put their time in to do it. Yeah. Or you’re paying LinkedIn directly to show them the ad. And so your logic of just getting the right message in front of the right person at the right time is true for both of those strategies.
Right? Yeah. Correct. And one of the big things that we ran into when, So I do think running the outreach agency really helped me formulate some of this for ads because one of the big things that we ran into with outreach, If we didn’t hit them at the right time and then just sure you could pass them with endless messages.
But that kind of like annoys people if ideally our best clients found other ways to nurture those leads or prospects, either through like their own little email sequence or if they could get them to visit the website and then they started retargeting ’em. So then I realized, I kind of realized the importance.
Yeah, that first touch can be powerful and you shouldn’t hate on that, but it’s what you do with the other. You know, if only two or 3% of the people you reach out to are ready to buy right now, like it’s actually more important to spend time thinking about the other 90 something percent of people who are on the fence or it’s three months down the road kind of thing.
For sure. Now I wanna move on to the agency, et cetera, but before we leave your LinkedIn strategy, I am just a little bit more interested in the suggested creatives and their differences between the two layers, cold and retarding. If you could share more about that, that would be great. And this was a lot of trial and error and I still, to anyone listening, I would say, No one has it all figured out.
I still do a lot of testing. I have my theories, and then based on more evidence, sometimes my opinion will change back. But at first I feel like as marketers we’re looking for what can I, we’re obsessed with like cost per click and impressions a lot of times, and I think that can get us in a lot of trouble because I’ve had some really clever campaigns that would get really cheap clicks.
But then the more I think about it and the more I see the data play out, I realize. It’s probably usually better if they actually know what they’re clicking on, that it’s clear that you are offering this service to that specific person and that their click actually means something. So for example, if you posted a funny meme as an ad that resonated with that industry.
And you’ve got a bunch of clicks at $2 per click and they blame it on your website, like that actually would probably hurt your campaign because those people are then gonna get put and you’re retargeting, you’re gonna waste a lot of money and energy nurturing people that weren’t, didn’t mean to show intent and you’re taking it as intent.
So my cold ads are actually usually pretty straightforward for that reason and, and that logic of I want to denote a click. To kind of separate them from the hurt and say they know what I’m putting in front of them, they’re acknowledging that they have some kind of interest or curiosity in it. And because of my targeting, I know that they would be a good prospect.
And so I actually am okay paying a little more four clicks and having less because I now feel better about the quality of the traffic. And it’s the same with when you compare like Facebook clicks to LinkedIn clicks because the targeting is so precise on linked. You should expect to pay higher. And that’s one of those things where, yeah, it was never about getting the cheap cost per click.
It’s about getting quality prospects onto your website. And so my cold ads are usually pretty boring. Straightforward. They lack some creativity and it’s on purpose. And then once. The prospect checks out the website. I don’t intend for them to buy. They usually aren’t just dying to book a purchase or throw money at me, but I just wanted to show that they as like a digital hand raise.
They showed some level of interest. And then my creatives on the retargeting side can be clever, creative, funny. I mean, they could be whatever you want ’em to be. And the main purposes I’m trying to serve is stay in front of them. Show them that I’m the expert, build trust and credibility. So some of the things that I would traditionally put in front of them to do, that would be case studies.
You know, if you could show actual examples or quick stats of like, Client X had this problem, we did this, these were the results, or client testimonials, actual clients that worked with us had this experience, or this is what was important to them, that we helped them. Also just expert advice. Like I thought about, I’m probably gonna go back.
I’ve been doing it in video form, so I, I have my YouTube channel and that’s one of the reasons I’m really big about YouTube is because I can show my expertise and that’s one of the biggest things I can do to like, Drive inbound through video and actually just showing them step by step because my ideal client has no intention of doing it themselves.
They have money and they don’t have time. So telling them exactly how to do it like isn’t going to ruin my chances or it’s not gonna cost me anything. And then, yeah, sure, I’ll have some that are just like funny or that are just clever and witty and that just kind of creates like. Personal brand or feeling or how they view us as, like, I would even do like, you know, if you wanna show your team, like I would show, here’s our founder and his story, here’s our head of client success, our head of strategy, and if you get them to kind of feel or have a good idea of who you guys are, what you stand for, what your vibe is.
Those are all probably good things that you could use in the retargeting layer. Nice. There’s a couple of really interesting points you raised. The first is that of the Costco click is super funny, right? And if like marketing is not like involved up to the sale, then yeah, we may end up with these clicks that are like not actually adding value to the business and this is why it’s so important for marketing to be like tasked with revenue.
The second point I really loved with how you were saying about yeah, giving away like your ideal client is not gonna do this. And so if you, you’re showing exactly how you do it, then yeah, you’re gonna add value to some people but you’re not actually gonna cannibalize cuz. And I think a lot of agencies specifically are like scared of showing away, giving away their like magic.
But I really, that’s a really good way to like help us, for example, give away more cuz we know that Yeah. The people that we actually want to pay us. Won’t be doing it. Awesome. Okay. And so now I wanna transition into actually like your business journey. And so as we’ve covered, you guys started as the LinkedIn outreach agency and then you over the last year or so have transitioned into paid more and went through an acquisition.
And I also wanna cover your own like LinkedIn organic journey like you posting. So if you could like, I don’t know where you wanna start, maybe start by telling the story, but those are the points I wanna. Okay. And it kind of flows into each other. So I actually got my start posting organically on LinkedIn.
This was back when I actually worked in restaurants and I was like a job seeker. So I was posting organically. I was starting to get traction. This was like five, six years ago, so it was, it was even easier than ever before to get organic traction. I got 10, 20,000 follow. And I was doing it in a very specific way, though I was just looking for opportunities.
So I stumbled upon a kind of a lead gen approach. I was sending connection requests every day to people that I thought might have opportunities for me. So it was HR managers, district managers, small company owners, recruiters, like anyone who I thought might have opportunity. I was sending them connection requests, like 50 connection requests a day, growing my network in a very targeted way, and then posting content that now looking back, it positioned me as an expert in my space, which.
Restaurant management and team development and training and stuff like that, and it worked really well. I was getting job offers, I was getting, wow, tons of interview opportunities, like if you’re a job seeker, like if you have like a regular job and you just are open opportunities like that is an amazing, free way to just look for opportunities because then I stumbled upon, I didn’t just get dozens of opportunities to be.
An operator or a manager. I started getting investment opportunities. I had unintentionally made myself, and if I think back now, like it’s laughable cuz it’s so easy. I made myself the most visible restaurant operator in my city on LinkedIn, which I guarantee you there’s not three restaurant operators trying to dominate LinkedIn in any given city like in the world.
So it’s super easy to do. But in doing so, when investors came to LinkedIn and were looking for operating partner, They look for operating partners in my city. I was the number one option that they came across, and you could do that in any niche, in any service offering. You could establish yourself as the go-to expert in your small city at first and expand from there.
So I started getting investment opportunities. I took one of them up on it and became part owner of a small sandwich shop, uh, franchise Pot Valley Sandwich. We built one and then I convinced them to buy three existing ones in Louisville, Kentucky, and I moved there and the best part about it was that 80% of their business was lunch and I had nights, weekends to kind of do my own thing.
And so I started a side hustle, helping people on LinkedIn do pretty much what I did. That little system that I stumbled upon Growing your network. Messaging people, putting out content, positioning yourself as an expert, except I was helping business owners do it to generate leads and so I really hit a a gold mine of the perfect time.
Perfect kind of like background that I had. I learned automation really quick and it was kind of like a, a really hot market. It took off. We want from, I had a handful of clients. I think I had 20 clients. My son was born and I LLC the company like right when he was born and then it took off. We had a $500 initial website build that a college kid built for me.
It was very functional. It wasn’t the prettiest. But we grew from an agency all the way up to having 210 active outreach clients at one point before we kind of started to downgrade that side, but it felt a bit like we were building a, a really big sandcastle. It wasn’t, it was constantly shifting regulations.
They could pull it out from anytime they wanted. It was, I knew that we were striking while the iron was hot, but it was something that we couldn’t build a whole lifetime of business on. So I started thinking about other ways that we could shift the company. I started dabbling in more and more paid ads myself to grow, but then also as potential service offerings.
LinkedIn ads made the most sense for us, cuz we already had established ourselves as kind of LinkedIn experts and so another LinkedIn type product would make a lot of sense and I really believed in LinkedIn ads for us as well. So I took on I think 2023 clients myself while the rest of the team was doing outreach.
And then we started to make the pivot and it was perfect timing because right when we started to make, decided that’s the direction we were gonna go. LinkedIn rolled out the biggest restriction ever and limited people to a hundred invites a week. Previously you could send a hundred per day, and it was around that time also that I got hit with a Facebook ad that offered to give me a free valuation of my business.
So I was pretty curious. I actually like submitted the little lead gen form and someone immediately called me, which I ignored it because I don’t really like talking on the phone to random. And so he texted and said, Hey, you just filled out the form from our Facebook ad you looking for any evaluation?
And I said, You know, what’s it gonna cost me? And, uh, he said, Nothing. It, it’s absolutely free, No strings attached. Of course, we’d love to, like, if it makes sense to help you sell and list your company, but that’s, there’s no obligation. We’ll just get, we’ll evaluate it for free and go from there. I said, Sounds like a pretty cool idea.
I had no intention of selling at the time in my restaurant career. I, I wasn’t making six figures, so I was making six figures for the first time in my life. Wasn’t worried about like the pivot, so I wasn’t eager to sell or anything, but I was really curious. Yeah. So just before we, sorry, just before we get onto the acquisition.
So you were just starting to transition and you were personally running LinkedIn ads for a selection of the clients to like build up the capability there? Yeah, I had like 23 that I was running, but I hadn’t actually unloaded any to the team. This was probably January of last year. Cool. And those 23, you just said, We were doing ours for you, but I think we should do this instead.
And they were happy. We actually had a decent amount of people who would ask us if we did LinkedIn ads. So yeah, it was like current clients or some prospects who would ask us if we did it. So I told the team to just start saying yes, and I would personally like. Do their LinkedIn ads, which the clients also thought was really cool and we weren’t charging that much, but it was, I really wanted to prove out the systems that I was confident that I could deliver that, and that it would be something that was wanted.
So yeah, I was really just trying to validate the A. It was, it was a need. B, that it was something that we could consistently deliver and I could roll out systems around it and then see it was a nice extra way of having another revenue stream for us. Cause I didn’t know outreach was gonna die. I thought this was maybe gonna be the next wing that eventually could overtake outreach, but could stabilize the business more just in case.
Yeah. So that’s kind of how it started. I did, yeah. I didn’t even have a, a landing page yet. It wasn’t official offering, but we sold like 23 clients on it before it ever became like on the website. Got it. And at this point you had around 200 clients? Yeah. 200 outreach clients and now, Yeah, 20 something ads clients.
Got it. And roughly how many people in the team I think we had about. About 15, 20 of us who were parked to full-time. And then we were really good at using like contractors in different capacities. So I’d say probably, probably about 20 of us. And then there was another five or 10 who would do maybe super part-time stuff or transactional stuff for us.
Got it. Awesome. So not a massive team for how many clients we were serving. And one of the things we did really well to. Like with a smaller team was we really, really, really dug into automating anything that could be automated. Like our whole, almost our whole sales to onboarding process was very, very automated, which is probably whole another subject.
Got it. Yeah, so just the, an example, like, so a new client would sign and that might like automatically create the core for the kickoff, and then they might automatically create the card in project management for the copywriters to start writing the outreach messages that kind of. Yeah, to the point where I, I used pay kickstart for a sales page, so if they clicked, if it went to our website, they clicked by now they could, they had different options of like month to month, two month, three months, six month, they purchase and automatically send them an email and an intake form.
They fill out the intake form. It automatically creates the card on our, our workflow. And assigns a task to the writer and strategist to get started when they finish that they simply to the card and moved it over one and it had this automated flow that would send the strategy to the client for approval with the attached documents and giving them the next steps to book a call to get connected to their account.
They would book that. And so yeah, it was like very, very automated flow from. Purchase to launch almost with only a couple actual steps from us manually reaching out to them before they get launched. Did you, would it all like go to website, sign up and buy, or were you jump jumping on sales call with clients?
They would jump on a call, but it was one call closes and it was all inbound. I mean, we, we were doing LinkedIn outreach, I guess, for ourselves at the time, but yeah, they would go to the website, they would book a call and it would be like a one call close. We didn’t have any kind of like follow up or CRM or.
Anything like that. The one thing I think we did really good early on is we made videos like demo video explainers, which was basically just me on a loom showing you what you’re getting. And I feel like people that we learned, and it was, they were always like way too long, like it was 10 minute video explainer.
But we realized like anyone who watched that video and then booked a call with us, like they were probably gonna buy, they had a couple of questions first. So that was like something we did really well early on. Very. Okay, cool. So back to the story. We had around 200 clients, about 23 on LinkedIn paid that you were running.
You see the Facebook ad get the valuation. Yeah. So yeah, I took the guy up on the offer. He evaluated the business. He threw a number out. Well, it was like a legit process too. They asked for financial statements, They asked for some SOPs that we had. They actually got like, yeah, the, They really dug into like the last two years of financial records and tax.
And current revenue and client list and what data we had on hand and turn rate and all this. And they gave me like a value of what they thought they could sell the business for. And it was higher than I thought. I wasn’t looking to sell, but I kind of realized like if someone offered me that in cash today, I couldn’t automatically say no.
Like I would have to think about it and talk to my wife. And so at that point I took a, I kind of paused because I was like, well, I mean, if that’s possible that someone would like buy it and for ma in the top of that range, like I would have to consider it. So the next question, and they have a really good flow of doing that, like the free audit or free evaluations, a really good entry level free offer.
And then their next thing, We have a list of buyers, a network of buyers. We have a whole website that we can list it and an email list of who knows how many tens of thousands we can blast it to, and we can promote it in these, like these six places. And he’s like, Do you want me, Would you like me to list and promote your business for sale?
And I said, Again, what’s that gonna cost me? And he said, Absolutely nothing. The only time you would have to pay anything is if you get an actual buyer who offers you and you. You’ll pay out this percent. And I said, That’s a pretty good deal. They got a really good deal going. And I said to my wife too, like at that point I told her that, Hey, I really don’t think anything’s gonna come of this.
This guy says our business is worth X and he’s gonna promote it for free. I can’t imagine like we’re gonna get a ton of bites, like maybe two people might show some interest in the next six months. So it’s not something we need to worry about. But I did tell him I, I’d let him list it. So he went to town.
They were pretty good at what they do. They had a, a legitimate website with good traffic, a good email list, and I think within the first two weeks I had a first offer. It was really, it was on the low end and it was like all cash. I remember telling my wife, I was like, Yeah, someone made this offer. I mean, I wouldn’t take that offer because I see so much more value in the business and I’d rather just run it than like have that.
And the broker was really funny too cuz he said, Yeah, we did get an offer. I told him that I wasn’t gonna let him talk to you cuz that offer was insulting and not worth your time. And I was like, I mean, it’s more money than I’ve ever seen in my, in my bank account, but I appreciate I appreci. In my mind, I’m thinking like, that’s probably the only offer we’re gonna get.
But it was kind of validating that anyone would offer anything because you never know, Like you don’t know how these things work or what it’s worth. And so he kept going and he was like, Well, the real thing will be like when we put this email blast out. So after that, we had three or four offers back to back or people that were interested.
So the next step was, They would jump on the call with you and they would dig in, like talk, ask you que like hard questions about your team and your operation and your challenges or what you would do if you had more resources to grow or what your team is weak at that you think you could. They’re really trying to like visualize like what it would be like to have the business and what steps they would need to take.
What’s your day to day role like if you exit. And you do something else, like, what are we gonna have to like replace, or are we have to pay someone to do those duties? So that was, and the due diligence process was a nightmare. So the main things I learned through that was that there’s lots of different offers.
Like people wanna buy your company for different reasons. One of them was like, he’s leaving a major company and he wants to start his own, but he doesn’t wanna start from scratch. He wants to buy. A small agency that’s already a couple years in and then he wants to grow up from there so that he already has like some base, some income and then grow from there.
And yeah, I thought that was pretty reasonable. He seemed like really nice guy and his capabilities were like cold calling and emailing, which would be probably great bolt-ons to like help scale and offerings for the company too. Uh, a couple of ’em were large marketing agencies who wanted to. Basically they wanted our client list, our past customer data, our email list and our team and systems and roll up into, They wanna be able to offer LinkedIn ads, but they just wanna, they don’t wanna build it out, They just wanna buy like a, or yeah, a LinkedIn outreach and ads agency and bolt it onto theirs.
And then I got one offer that really made me think, and it’s the one I ended up taking. This guy offered. He only wanted, he wanted a majority of it, but he wanted me to have a, am I enough that I would still care about the business? He wanted to ensure that I actually, he only wanted it if I agreed to stay on and continue to run it.
So we also, he an employment agreement of some sort and incentive plan and an earn out period, like he structured it. He wanted to structure it in such a way that I would at least stay for a couple of. And after a couple of years of working that I’d have good incentive then to also stay more years because there was like percentage back of growth.
So like the amount of different ways they could slice it was definitely not something that I had ever heard. That you could sell 60, 70, 80% of it and you could stay on and take a salary and that if you paired with the right investor and he invested in it and it grew five or. That you selling your 20 or 30% five years from now could actually sell for more than your 60, 70, or 80%.
Like that was never a thought I had, Like when they talked about your second exit, I thought it would just be, I just assumed it would be a smaller piece of the pie. Like, okay, if you sell for this and then they sell it again in five years, you’ll, you’ll get another little chunk. Like it never seemed like a possibility that your second exit of a small percent would actually be worth more than the big percent you originally sold for.
And then it started asking questions. Well, I guess it does matter who’s buying, what they’re offering, what their connections are, what their resources are. Mm-hmm. , because he was coming to the table with like, I own, I founded this 10,000 person company. I sit on the board. I own these six other companies. I could plug you into like this network of companies that could use your service.
I could fund these kind of investments into your company and build these capabilities that you could sell and license that would improve the value. At that point, it became like a deal that I just hadn’t thought was something. It just, it wasn’t even like something that I had considered or knew was like a possibility, and it became like something I just couldn’t say no to.
So that’s the deal I ended up taking. I, I sold the majority of it to this guy who’s well funded, well connected, and was willing to invest further into the business who wanted me to work in it, who wanted to keep our team in. And that ended up being the best deal for me and for our team because now their futures, I think, are, are much more stable than when payroll is coming outta my personal, uh, bank account, or not my personal bank account, but you know, my wallet pretty much.
Cause that’s, that can be dicey. Got it. Awesome. And just to understand how they came up with the buying price. Well, with even like a multiple of revenue or multiple of some kind of like profit. So apparently, and this was something I had to learn too, like for SAS products, it’s usually a multiple of revenue, but for service companies, which we were considered, it’s more of a multiple of bottom line.
And then one of the things I hadn’t considered was what would be the cost to replace me? Cause I was pretty much just taking, I was paying my bills and anything I didn’t need, I was rolling back into marketing and back into the company. So, you know, I wasn’t really worried at the time about like trying to show like a ton of bottom line profit.
Basically my income statement was like the company’s profit. . And so it became a conversation of, well, if you stay or if we replace you, what would be the cost of that? And then if, if we’re paying this amount for someone else to take over, then the company’s profit is actually this. So it was, And there’s also like a lot of other details of like, Well, I’m investing X amount into marketing.
I don’t need to, I’m investing my extra, like whatever. If I really wanted to sit back for 12 months and run efficiently, like we could show this. So there was like, it was negotiable, like everything was. These are the financials. So this is, we think the multiple should be. And then there’s, this is also your growth rate.
Like, so if you just showed, I think one of the other things that I hadn’t thought about was it’s not just like what your current run rate is. Like, oh man, we hit, we hit a hundred thousand dollars in a month, and so now our multiple is this, like, it’s your trailing 12 months and then also like your full last calendar year, like are more important than what you did like this month or last month.
Unless you can show. A very consistent growth where it’s year over year, quarter over quarter, like that growth. Then you can make a really good case of saying, we can expect, Cause it’s basically like a lot of these is what’s the cash flow going to be like over the next five years. And it’s based on what you did the last 12 years to a lesser degree, what you did last quarter, and then what the expected growth rate should continue to be to that point, like within reason.
And you could make a really good case for like that multiple of three or five x of, I think three is the low end and five x of like bottom line profit would be the higher end. I guess it could be three to seven of what, Uh, I think ours was like five x, but yeah, I guess it could be three to seven depending on your growth rate and some of those and assets that you have, like you could get on the, the top end of that.
Multiple. Makes total sense. It’s a lot. Awesome. Well, I mean, thank you. For being so open with that whole process. By the way, you literally shared everything, even the stuff that you weren’t expecting. Yeah. I’m a very transparent person and I come from like the Midwest, Ohio, Indiana background like, and the fact that I’m in tech and marketing now, like.
They don’t teach you this in school, and I feel like anytime I get entrepreneurs who were curious about this, I tell them anything they want to know because I didn’t know any of this. And , I don’t know where you’re supposed to learn this stuff. So yeah, I’m, I’m more than happy to share whatever I can.
Amazing. And also thank you for being so open about your, your, the LinkedIn pay strategy. That’s like the goal that I think the listeners are gonna take away. But also your, the journey is pretty amazing. I love how organic the transition was from you doing that stuff on LinkedIn to get yourself a job and then ending up Yeah, building the skills to build the agency, which is just, just an amazing story.
So the, I’m gonna not you the LinkedIn master, I’m gonna call this the LinkedIn master class with Justin Rowe. Obviously people need to search Justin Rowe, so if Justin, f r o w e on LinkedIn to follow you there. Is there anywhere else we should send people? Yeah, I’m really big on my YouTube channel, so you probably have to search for Impactable.
It’s probably the easier thing to find on YouTube. Of course, we have the website i impactable.com if you actually do need LinkedIn ad services. But the YouTube channel specifically, like I have a whole playlist. That should probably, and at some point probably will be a packaged like e-learning course of like, here’s the basics, but I just have a free playlist of like 23 videos.
I actually made it first for our team internally to try to get people up to speed from like not knowing LinkedIn ads to becoming competent like account managers. So I’m creating that, but I’m, I just give it away for free on the YouTube channel. And then there’s intermediate and advanced stuff, but for.
Looking to learn or curious or currently running, looking for tips. That’s a really, really great resource. Amazing. So everybody searched for, It’s a channel called Impactable on YouTube? Yeah. Yeah. Awesome. Yeah, I think it’s just called impactable LinkedIn Ads Agency. Got it. But if you search I impactable, it should be the only one.
And also, yeah, anybody who one LinkedIn paid services impact water com. Just thank you so much for. Awesome. I appreciate it man.
And there we go. Just in. That was awesome. Thank you so much for breaking down like the full LinkedIn paid two layer paid strategy and then going through the whole process of building and selling link and learn. That is awesome. I wanna thank you so much Justin. I wanna thank you so much for listening.
If you have any feedback, Go to Apple Podcast, Garth. Leave a rating and review. Send me a screenshot on LinkedIn and I’ll try and get it read out for you in a future intro or outro on the show. Thank you so much for listening.