A good combination of luck, skill, and charisma is necessary for starting and growing your own business, all the more if you’re a college kid trying to make ends meet. Dubbed as the “Facebook Ads Advertiser,” and CEO of Convert ROI, David Schloss, shares how he got started in the Facebook advertising business. He talks about how he went from being a one-man team to a completely remote, yet competitive digital advertising agency, which focuses exclusively on Facebook and Instagram ads platform. David drops some tactics that he personally implements to keep the people he works with happy, satisfied, and invested in his business.
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My guest is David Schloss. David, how are you doing?
I’m doing great, how about yourself?
David, I’m doing great and I’m pumped to speak with you. For those who don’t know David is an online entrepreneur who began marketing in 2007 from its college apartment. Over the years, he has helped hundreds of businesses to improve their website traffic, customer acquisition and revenue using social media advertising. His business, Convert ROI, enables businesses to succeed by taking complicated social ad plans and seamlessly turning them into easy to follow revenue-producing campaigns.
He manages over $2.5 million per month and paid advertising via Facebook and Instagram. He has been rated as one of the top experts to watch by Forbes magazine as well as being featured an Entrepreneur.com, Business Insider, Huffington Post and many other shows including this one. David, we’re going to talk all about that but first I want to take a gigantic step back. What were you like growing up? Were you a rebel or were you a straight-A student? Did you always know you wanted to be an entrepreneur?
I didn’t know I wanted to be an entrepreneur. I wouldn’t say a straight-A student, I would say probably closer to more A’s and B’s type of thing, so not nearly perfect. I was very quiet for the most part and it wasn’t until around probably like middle school or so that I started talking way more, start being more social with people, started to integrate more with people. I found myself often feeling left out from things and then as it progressed into high school. It was non-stop. I was talking to everybody. It’s pretty much how I operate which is I’m a big believer in communicating with people on every level. I talked to probably five to seven people a day naturally whether it’s clients or new prospects or anything like that. That time of being young in and barely talking to anybody, it seemed to progress until like I talked to everybody.
Did you go to college? Did you graduate from college?
I went to the University of Florida, got a four-year degree in tourism and hospitality management. I went in initially for finance, messed up my first semester, completely partied out of control and didn’t focus and it took me off track. Within one semester, completely took me off track and the business school was like, “We’re going to have to take you out of the finance program,” which changed the entire trajectory of how I ended up developing this business because the business I have was created because of that situation. If it wasn’t for me flunking out that first semester and getting moved in a different track, I don’t even know if I’d have my business.
Talk to me about that first business and how that evolved? Let us know your story.
I started my business which is called Convert ROI. Back then it was working with David Schloss. I was a freelancer, I was doing paid blog posts and writing articles for people where any subject they wanted to know about in the marketing advertising space. I first was developing my strong suit in writing. I would write all these blog posts for people whether it was for individual blog sites or contributor sites or anything that people needed content for I would be writing.
I used that to develop some cashflow in my life because as a college student most people are broke, I was one of them and I didn’t have any online skills other than the fact that I knew how to write. I took that opportunity to write for quite a few people and while I was doing that I take that money and I was learning SEO and video marketing. I was buying courses and were downloading them for the ones I couldn’t afford, black hat style, and basically learned everything I could at that moment to where I then would have enough of know-how of being able to do some SEO or video SEO for local clients. This was several years ago.
During that time, SEO was all the rage. Facebook was very new, only college kids were on it or high school kids who got into college. The ad platform was still in its infancy and so running ads on that platform you pretty much had to be invited. For someone like me where I was still waiting on an invitation, I had connections to people who work for corporations who had an invitation. I was still doing SEO, video marketing, ranking videos on Google and YouTube, that’s how far back you were able to do this thing. It’s made a resurgence in the last couple of years and then I was ranking websites locally, nationally doing that thing all by myself from the comfort of my apartment at eighteen years old, trying to make some money to survive because I was running off of loans like most kids.
You need case studies and testimonials in order to sign bigger clients.
It was too much stress and so I learned those skills applied it towards local businesses in the area. I ran ads for a realtor, a property management company, a lawyer, a bike shop, all the standard stuff you would expect. Except back then trying to tell people how to rank a site was incredibly stressful because they were like, “I could buy ads or I can put an ad in the Yellow Pages or whatever,” which is the same struggle people are having when they’re trying to talk about why you should buy Facebook ads or Instagram ads. It’s like they’re experiencing the same thing I was experiencing when I was trying to tell people why they need to do SEO, so that’s how I got my initial start at eighteen developing my business which in hindsight was an agency. I didn’t think of it that way. I was the only guy and yet I had five of the seven clients at any given time and I was doing all the work myself because I didn’t know how to hire at the time.
You weren’t even 21. What was that like pitching businesses at that age? Did you get pushback? Did people take you seriously? I was an entrepreneur and I was twenty so I know the answer to that question but I’d love to hear what you have to say about that.
I got tons of pushback. Being in college, it was very easy for them to know like, “This is a college kid,” because I was in a college town, the whole town is college kids. The lawyers, the shops, the restaurants and all that in the area know 90% of the people that come in are college students or grad students. There are not that many other people there who’ve been living there for ten to twenty years unless they love the town. I clearly didn’t look like someone from the town. I was eighteen, I looked super young and it was a matter of I had to ooze confidence to these people in order for them to trust me and it wasn’t that they wouldn’t trust me from the moment I would talk to them. It was more of like, “I don’t know if I should do this.”
It was a lot of me having to convince them and show them why they need to do this thing. At the time, I run a lot of my business off case studies. I got tons of results, I could showcase what we’ve done over the years or even in 2018 I can bring up a case study after case study and that’s easy when it comes to sales. Back then, I didn’t even have a case study so a lot of it was researched mentioning other websites that talked about someone else’s results and then establishing trust, giving it a time period, give me one to three months to showcase what I can do for you. I would lower my pricing not because I didn’t feel confident to charge more. I wanted them to establish trust with me. I can get them some results and then we’ll sign a long-term deal.
I wouldn’t say working for free but a lot of it was I wasn’t working for much. As an example, $1,000 a month deal, I was using $800 of that to make sure I get the results so that in month three when there’s a renewal they would renew for that same amount or more. Yet I would then cut back a little bit more and have more of a margin to keep for myself. That’s where a lot of stress in the beginning would come to fruition because I wasn’t making much from all these efforts but I needed the case studies. I needed the testimonials or else I wouldn’t be able to sign bigger clients or even have money to buy courses and learn more.
It was a struggle in the beginning but there’s something about me talking to these people where I never had pushback in a sense if they didn’t have trust in me. I seemed to have a way of talking to people where it’s like, “Let’s give this guy a chance.” Still to this day, I talk to massive corporations and they’re like, “You’re in your house in a jacket and shirt, probably sweatpants, and we’re giving you this amount of money to manage our stuff,” and yet they trust me. There’s something that I’m doing that feeds off of their energy and it is like, “I want to help you,” and clearly they want it too so they, “Here’s the money, do your thing.” Not much pushback there.
You mentioned case studies a bunch of times. We built case studies for FreeUp and it sounds like you’ve had a lot of success using those. For those who are reading who have never built a case study before, any tips, recommendations, anyway that you’re structuring them to build that trust right from the beginning?
Detail is key, as much detail as possible. Some of my case studies are as long as 3,000 to 5,000 words. They’re massively detailed and the reason for that is because I want people to see and understand my methodology and my thought process as to how we got to the end result. I developed a pattern of how I create a case study over the years. My first case study was written several years ago. I posted it on Facebook showing how I took a client from a brand new account to $20,000 a month. I broke down everything. The audiences we used. The ads we used. How we segmented things. How we would layer different types of creative, every little detail, and then I posted it. The only people who saw it were my friends but my friends were influential enough that when they shared it, commented on it and tagged other people they knew. I have 1,000 friends on my friends’ list to getting 400 friend requests. It’s getting shared everywhere and to this day, any time I post a case study, that same exact effect happens and it has been emailed to some people.
I make my posts public so anyone can see it and I’ll get someone who’s come off Google, landed on my profile somehow and they’re like, “I read your case study.” It’s all about the detail. The more you can break down the knowledge behind why you did what you did and why you would do things a certain way or what you would do to change it so the results would be more in your favor. You want to establish a trust to show your wisdom. People see that you’ve been practicing and being very patient within getting these results, it shows off how you are a business person. Are you someone who’s super eager and you need to get results or are you establishing something with your client where it’s like, “No, this took us nine months, this took us six months and we took our time in developing the process and getting to this point.” Because the more they can understand how you got there, one, it’ll attract the clients you want because they’ll want the same exact process and two, you won’t attract anyone who’s like, “I want results now,“ which is super stressful to begin with.
In the paid ads world, everyone assumes the moment you put in $1, you should get $3 back within three days. To some people that happens. Those are the home runs. Most people don’t have any home runs. You want to make sure you’re putting out there what you want to get back. If you want someone who’s willing to go in for the long haul, get results over time, build a well-structured business to build a legacy. You got to put out a case study that’s going to exude that in how you talk and how you present yourself.
Do you work from home? I’m assuming it’s not you doing all the work, you have a team around you. Are they all remote? Do you have an office anywhere?
It’s all remote, a home office. I have a big enough office that I could have seven or eight people here but I don’t. I’ve built this culture in my company to where I want everyone to be comfortable in their own setting because all we are here to do is get results for our clients. My clients don’t care where we’re at. I could be in Bali, I could be in the UK, I could be in the state of California and it doesn’t matter. They want to know that whomever they’re paying is getting the job done and that we’re building the ideal business of our dreams. If that ideal business is that this company is making $5 million a year and they got their team of ten and they got an office, that’s cool.
My whole thing is I got my team of seven plus myself. We all work from home. We work during set hours and we get the job done. It’s been that way for years. I’ve had a team for a few years. A lot of it was done by myself in the very beginning from 18 to 25 years old. For the most part, I did everything myself. After that once I learned how to hire and quiz people in the process and develop a foundation and fundamentals behind my process, I was able to hire more people. Things are a lot more fluid. Things are more structured but took about seven years for me to get to that point.
As a marketing agency, what type of people are you hiring? How are you hiring them? Are they all full-time or some part-time or some project-based? Talk to the readers about that.
Everyone starts out part-time and it’s not because of a money thing. It’s more of you can be very inundated with agency work the moment you start. If I hire you full-time and I let you know that we have 30-plus clients on board. It’s very easy for me to assign you to ten clients, have you analyze and audit all these accounts and get you moving. I can have you do 40, 50 hours of work a week but I’m not trying to establish a culture of people who coast all day. I establish a culture of you have twenty hours to complete this work and you can do those twenty hours however you want. You want to do ten hours in two days, great. You want to do five hours a day, four days a week, that’s fine but you have twenty hours and here are the people we have to take care of.
In the beginning, I establish pretty much not speed but understanding, like I know how long it takes to manage an account. I know how long it takes to develop campaigns. If it takes you four hours when it takes my junior ad manager an hour, there’s a disconnect there. We need to work on that so I’m not going to assign you to more stuff. I’m going to have you assigned to less until we get you to the point where you’re executing things at the same speed as everyone else and so everyone starts out part-time around 20 to 25 hours.
Most people start at twenty and then over time as we are assigning more projects and looking at the scope of work for most people. They’ll get moved up. The funny thing is that out of my team of seven, four of these people have been on consistent 25 hours a week of work for almost a couple of years. They get everything done because, fun fact, I hire a lot of stay-at-home moms. They’re on a fixed schedule. Their kids are at school, I have this much time, I got to do it all in this time and then after that it’s a family time the rest of the day.
If they have five hours, they are going to be the fastest executors of your stuff in those five hours because they know that our five-minute one, the kid comes home, it’s game over. There’s nothing else they can do and so I hire a lot of people who are single moms, stay-at-home moms with large families. It’s people like that. Some have been with me for a couple of years and they like the fixed time.
I give great bonuses to people because they get so much done in that such a small window of time. I’m going to pay you like you’re working 40 hours a week even though you’re only working 25. We’re getting results, the clients love it, they don’t care who’s doing the work, they want to make sure that if someone needs to be communicated with they can communicate with them and it doesn’t necessarily have to be the ad manager. They want to make sure someone’s listening and so if the work is getting done at a speed that’s great for everyone. I don’t care if they work 20 hours, 25 hours, I’ll compensate you like you’re working 40 because you’re doing exactly what we need. The clients love it, we’re hitting our KPIs, we’re getting bonuses, everyone’s taken care of and that’s why people don’t leave.
That’s why my team has been so well structured. The people who have left it’s not because I fired them or anything. Some people get better opportunities and then some people are like I had to go get a more full-time gig in my hometown. It’s more internal stuff for them but when I am teaching these people how to manage your time and have more freedom, I want them to work 25 hours. Go and enjoy the rest of your time with your family make sure we get the work done. That’s all I ever ask and it seems to work.
You are hiring anyone that has skills that are bringing the table revenue-producing or do you have your system, your processes and they need to follow?
Up until a few months ago, all the people I hired were brand new. There was no pre-existing knowledge, they worked for another agency, none of that. That’s always surprising when I tell people that. They’re like, “Why would you hire someone who has zero idea what they’re doing?” Because I believe in my education enough to where someone brand new can come in and within a few months be as good or close to as good as me at running ads. That’s how well-structured we are with teaching people Facebook or Instagram. If someone comes in, they’re completely green, they have zero idea of how to do this stuff. By the end of a few months, they’re trained enough to have complete creative control over an account without me being over their shoulders. That’s how we do things. The reason why we hired someone with pre-existing agency experience a few months ago because we took on an account that was spending $350,000 a month.
Don’t hire entrepreneurs. Hire people who want to be a part of a team for the long term.
My entire team was completely scared of taking on account of that magnitude because with those accounts typically it’s myself, my most experienced ads manager, someone who’s been with me for a few years. I was like, “We need one more person,” and the rest of my ad managers already had enough work and so I was like “I’m going to bring on someone a little more experienced but they have to still go through my own foundational training because I don’t want someone else’s foundation. I want you to use mine and that was the main thing that we had to find.
We went through a large interview process of people who were like, “I learned from this person, I learned from that person,” and I was like, “Cool, you’re still going to have to go through my stuff.” There’s no short-cutting that and we had some pushback on that surprisingly. Once we found the person who was willing to learn, it was quite easy. For big projects, we usually assign three ad managers to it because there needs to be more dedication to the account. That was the first time we decided to let’s get someone a little more experienced, someone who’s willing to play our game. They understand this is a process, we know what works for us and if they’re willing to go through it then, they’ll be paid well and at the same time they can take over a big account from day one.
A question I get asked a lot is about bonuses and I understand it’s different if someone’s in the US, the Philippines, part-time, full-time, project-based. How did you create your bonus structure? If there’s an agency reading out there, how do you recommend that they structure theirs?
We have a call like a hybrid bonus structure, so here’s what I mean by that. I get a lot of referral business and my team, I’ve indoctrinated them to my process of networking with people, constantly networking whether it’s events locally online, events groups, things of that nature because there’s always some thread on Facebook or Instagram where someone says who do you know can run ads? For example, I was already tagged in four different threads pertaining to running Facebook ads. It’s constant. One of the things that I taught my team was I don’t want you to go out there and be like, “David’s the best.” I don’t need that and I don’t want you to do that. It looks like scamming and spamming people, I don’t want that. I want you to create natural conversations with people who are wanting to learn ads, talk about ads, maybe there’s some value you can bring to the table for them. If they ask you like, “How can I work with you on running some ads?” Bring them to me, we’ll get the deal done and they get a large piece of that deal.
For example, we give about 25% of the management fee per month to the person who brings in that client. Let’s say contractor A brings in a person who ends up signing a $3,000 a month deal. We’ll give them 25% of that management fee, the $3,000 a month until that client cancels. If the client stays on board for a year, that contractor is getting paid for a year of that person. Most of our clients end up staying for on the low end of six months. We’ve had clients who’ve been with us for as long as seven years.
Imagine you bring someone in even if you’re not working for me anymore, I still pay you out of integrity. We established a good referral system there. Another thing is a lot of our higher-end clients, the ones that spend over $50,000 a month. We have these packages where it’s like a base fee plus a commission either it’s a commission of the backend sales, maybe it’s like profits from a certain promotion, a launch, percentage of spend, all sorts of different hybrids that we have for bigger accounts.
Outside of the referral part because I closed many of those deals by myself. I’ll say, “We want to spend correctly for this client. We want to optimize things the right way.” If we end up not only getting towards $75,000 a month an ad budget but then they decide to extend our contract, give us a higher management fee or adjust our percentage and give us a higher management fee on that ideal. I’ll give a percentage of that to the entire team. Let’s say all of a sudden, we get a $10,000 a month deal. Management-wise, typically our base is $5,000 on that side. We’ll take the extra $5,000 and we’ll give 50% of that to the team, divide it up monthly as long as we’re still hitting that number. You can imagine that some of my people only working 25 hours a week sometimes, making as much as some people who are working 40 hours a week and more than some people at the senior level, we’re talking to my junior people, are sometimes making more than people senior-level. I compensate for a lot of the extra stuff they do because I want them to be happy.
The happier they are, the more loyal they become, they don’t leave. They understand that I give them a lot of creative freedom. I give them a lot of freedom with their schedule because at the end of the day I don’t want them to be like, “We’re doing everything and we want David to do nothing.” I’m still involved in the process. I want them to feel like they’re a part of a family. They’re a part of the entire growth process. They see how when my company grows, they grow too and at the same time we’re impacting our clients because when I go into these calls with my clients, I won’t say how much more money do you want to make. I oftentimes will ask them like, “What’s the thing that you’ve been dreaming about what we want to help you achieve?”
For example, a coach might say, “I want to buy a new house.” What’s the number we have to achieve so you can get that house and when we help you get that house? How do we compensate my team? Maybe this person wants to go into a cruise or this one wants to buy a new MacBook, Like, how do we create a giant compensation for everybody and so some of our deals are like everyone’s benefiting from it simultaneously and that’s how we come up for our compensation plans. It’s unique and customized based on circumstances.
Let’s talk a little bit about those high-end clients. The ones that are over $50,000 a month. What strategies are you using that you can share with the readers? Maybe someone who doesn’t know marketing, doesn’t know Facebook as much as you do?
The funny thing is that a lot of what you do at the $10,000, $20,000, $ 30,000-month ad budget levels are very similar to what you would do at the $50,000. You’re doing it higher and on times testing a lot faster. What I mean by that is you will start ad budgets at let’s say on an audience level, $100 a day per audience, maybe you’re testing ten audiences simultaneously so it’s $1,000 a day. When you are getting to the point where you’re scaling beyond that, you are testing every possible audience configuration you could think of and you could still start at $100 a day. You might have look-alike audiences from 1% to 10%, you can have look-alikes with the range gaps or it’s like 1% to 2%, 2% to 3%. There are all sorts of look-alikes there and you got retargeting, you got different forms of retargeting.
If you conceptualize all the different campaign structures you can create for a client, you can end up having 20 to 30 campaigns running simultaneously and within those campaigns have 10 or 20 audiences each. if you look at how much that is in terms of amounts spent per day. Imagine if each one of those had $100 per audience apiece per campaign. If one campaign is ten audiences at $100, that’s $1,000 per campaign and if you have 30 campaigns it can get quite expensive quickly. They’re not all going to work at the same time. Some of them need to be deployed over time, some of them only run certain days of the week but you could see that’s $100 a day in the audience. There are some accounts where we have to do a lot of manual bidding so a lot of the ad sets will say, “$5,000 a day but they might only spend $500 or $700 a day.”
There are all different types of configurations but it’s the same exact system or process you’re using for smaller accounts at a larger scale. You’re taking more of your ideas and executing them simultaneously versus spreading them out because oftentimes with smaller accounts. Let’s say 10k a month, you might have seven ideas you want to execute but you’re only going to do two at a time because if you deployed all seven you’d spend 10k in a week.
You’re slowly deploying different types of ideas over time. Couple of them a week and then you find the ones that are winning, you keep them on, maybe you increase budgets for those. For the ones that aren’t working you turn them off and then you leave that budget for the next test. Larger accounts, there is no waiting. You do it, all of it. Get it all about there, deploy everything and maybe you schedule out a couple so there’s not a lot of overlap. If it’s $300,000 accounts, there is no waiting, it’s go, go, go, deploy that, deploy this, make sure this audience get this ad, like it’s go, there’s no waiting.
That’s why you’ll often see like the people who understand ad accounts, they look at something and go, “I don’t understand how this is working compared to this one.” It’s like, “This one has a faster testing period.” We can make decisions in 24 hours whereas in this count you might have to wait three days or four days before we can make another decision and then deploy the next set. I know most people would say like where’s the actual strategy there? It’s the same stuff, you’re doing it at a faster pace, that’s all it is.
Anything that we missed?
Honestly, from a hiring standpoint, I’ll say this. The compensation part, the bonuses are important. Some people will get paid $10 an hour, 15 dollars an hour, $20 an hour depending on where you are it could even be $5 an hour. A lot of my people on the low-end will start at like $15 or even $20 and it’s because I want them to be feeling like they are valued in this process. I go through the internal thought process for a lot of my contractors before they start with me because I want to understand how they’re thinking. Is this a job to collect the paycheck and leave because if it is you’re gone. That’s not what you’re here for. I want to impact people. I want to help you achieve your goal.
I’m not hiring people who are trying to be entrepreneurs. I’m hiring people who want to be a part of a team for the long-term. If I was hiring entrepreneurs, which I did in the beginning, most of them leave within three to six months and oftentimes steal my process and go try to do it themselves. I’m looking to create a culture and I’m sure a lot of people have heard that before. I want to create a culture and loyalty and honesty out of wisdom. We share with each other what we find because I feel that if you compensate those people, they will grow with you, they owned up becoming your superstars and if they end up doing their own thing bless them. It’s all good, it’s okay but at the end of the day they’re the ones who make you look good so appreciate them. Give them what they deserve and you should be all good.
David, this has been great. Where could people find out more about you? What are you most excited about?
You can connect with me through my website, you can email me at David@ConvertRoi.com or you can go to ConvertROI.com for any info you want to know about my agency and how we work. If you want to connect me further, there’s also a Facebook. I’m the one with a little blue check. You can find me there, official. Other than that, what I’m excited about? Quite honestly, the Facebook world is evolving, everything’s more Instagram these days and I’m getting a lot of business pertaining to this strictly Instagram. I’m excited to see where that whole world evolves. What they’re going to do with Oculus? What they’re going to do with different types of ad placements whether or not it’s going to get too convoluted with the number of advertisers that want to jump on. If it’s going to be Google 2.0 where there might be a slow period, where advertisers leave and then come back.
I’m excited about it either way because this is the first time where I’m a part of a network for several years and I’m still on it. I’ve already established my foothold on the space so for me it’s like I’m watching people leave, people come in. It’s great to be more of the observer this time versus being on the outside going, “I wish I was in there.” I’m experiencing the good stuff being someone who’s been in the space for so long. I’m excited to see how everything unfolds over the next few years.
Thanks so much for joining us, I appreciate it.
No problem. I appreciate the opportunity.
David Schloss is an online entrepreneur who began marketing in 2007 from his college apartment. Over the years, he has helped hundreds of businesses improve their website traffic, customer acquisition, and revenue using social advertising.
His business, Convert ROI, enables businesses to succeed by taking complicated social ad plans and seamlessly turning them into easy-to-follow revenue-producing campaigns. He manages over $2.5mil per month in paid advertising via Facebook and Instagram.
He was been rated as one of the top “Experts to Watch” by Forbes Magazine, has been featured on Entrepreneur.com, Business Insider, The Huffington Post, and been interviewed on various podcasts and web shows around the topic of social advertising.
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