Advanced Digital Sales in the Middle of the Funnel

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Bob Afsari, CEO of Campaign Creators, a Platinum HubSpot Partner, started his career with “a love for business development and a love for sales.” Disillusioned after companies he worked for consistently failed to deliver the products he sold, Bob decided to start his own company so he could control the whole process.

Bob presented his story, “Shattered by Embezzlement: How We Rebuilt Our Agency to Become Happier, Healthier, and More Profitable,” at HubSpot’s Inbound 2018.

In this interview, Bob provides a brief overview of his presentation, describing how a trusted employee diverted $330,000 in payroll taxes to her personal account over a period of 5 years, how the theft was not discovered until his accountant called the IRS, and the actions Bob had to take to save his company and avoid personal financial ruin. He provides precautions to prevent such embezzlement—a hard lesson learned.

To save his company, Bob developed a laser focus on his company’s mission, slashed its services, learned to say “no” to clients who weren’t the right fit, and made a huge number of changes that had only before been “under consideration.” His strategy, born of fear and desperation, worked.

Bob notes that the wealth of information on the internet, the credit crisis of 2008, and “the millennials” have transformed the way that consumers make purchases—they no longer want to be “sold.”

Today, Campaign Creators helps companies craft and frame consumer communications in a way that is personal, relevant, meaningful, and, respectful of how 21st century consumers want to receive marketing communications. It implements sophisticated lead nurturing strategies, digitizes sales processes, and turns the typically-outbound middle-of-the-funnel (consideration stage) sales cycle and sales journey into an automated, custom, curated educational process. Middle-of-the-funnel marketing automation workflows and the wealth of information provided to potential clients empowers them to autonomously determine their fit with a company and its products.

Bob can be reached at his company’s website: https://www.campaigncreators.com/ or on LinkedIn at https://www.linkedin.com/in/bafsari/

ROB: Hello, this is Rob Kischuk. I am live at HubSpot’s Inbound Conference in Boston, Massachusetts, and I am joined today by Bob Afsari, CEO of Campaign Creators based in San Diego, California. Thanks for meeting up, Bob.

AFSARI: Thanks for having me.

ROB: Glad you’re here. How’s the show treated you so far?

AFSARI: So far, so good. Got in last night, and been here all day.

ROB: Very cool. Today was Partner Day, and we will get to that. But why don’t you start off by telling us a little bit about Campaign Creators and what makes Campaign Creators great?

AFSARI: At Campaign Creators we have a really particular focus. We specialize in the consideration stage of the buyer’s journey. It’s also known as the middle of the funnel. We call it the MOFU. We tend to think that we dominate the MOFU because that’s all we do, day in, day out, is focus on creating custom sales journeys digitally that’s more of an education and curated pathway for our clients.

ROB: What is a typical – if there is a typical client, who’s really diving into that middle of the funnel right now and understands clearly that’s what they need versus someone who might need a little bit more education around that?

AFSARI: It’s interesting. If you take a look at the way people and consumers in general are purchasing, nobody likes to be sold anything anymore. Right?

Imagine this. Go to a car dealership 20 years ago, and we relied on the car salesman to tell us all the information that we need to know about the car. We trusted that individual, right? These days if you go to a car lot to go buy your car, you probably have more information and knowledge about that car than the salesperson.

You can take this consideration stage on almost anything and you can apply it towards things that matter to you, whether it’s going to be a direct-to-consumer purchase or whether you’re looking at B-to-B (or business-to-business) related items like Software as a Service, etc.

The consideration stage in what we do is we take the sales cycle and the sales journey – that’s typically an outbound process – and we put it into an online curated format to give the consumer the power and the ability to make an autonomous decision if they are a good fit for the company that’s selling them that item.

ROB: Got it. So, you’re just helping people. You’re helping people through this process they want to go through anyhow.

So, if you’re not at the bottom of the funnel, how are you realizing – perhaps you really have to prove it to the client sometimes, or at least justify some metrics to them. “Hey, we’re getting you business.” Are you working with a car dealership? Who are you working with that is then able to understand that you helped them?

AFSARI: That’s a really good question. Our clients, in order for us to really perceive metrics and really have them understand what’s working and what’s not working, they have to provide us with certain access.

People are being driven to the top of the funnel through a lot of different awareness channels, like social media marketing, organic search, paid media, etc. Once they enter the funnel, they then go from awareness to consideration. We really focus on educating that individual as much as possible.

Let’s take two examples. One, if you’re business-to-business and you’re looking to purchase an expensive piece of software, six figures, seven figures, you’re going to have a really long journey – 6, 12, 18 months – before you make that decision to purchase. If you’re selling coffee online or a pen, maybe a coupon is going to get you to move in a matter of minutes.

So, there’s different sizes of funnels, different shapes of funnels. But no matter who we work with, if we’re going to be driving individuals through this process, we have to have a closed loop feedback mechanism so that the client can provide us with, “Here’s the sales that we generated this week or this month.” We know how to attribute the individuals entering the bottom of the funnel and we can also measure the metrics of them closing as well and say, “If you spent X number of dollars on this marketing activity, here’s exactly how much ROI you’re getting out of this.”

ROB: For example, in the example of the software company, part of what you’re doing gets them into CRM. When that deal closes, you know you touched that deal with Campaign Creators, right?

AFSARI: We either touched it, or we can also tag and track that individual through an entire funnel that we create, and then we’ll know how to attribute that to a potential sale.

ROB: In the coffee scenario, you mentioned coupons. If you’re in ecommerce, that’s –

AFSARI: Correct. Coupons or discount codes that are attributable to the campaigns that we’re providing for them.

ROB: I think that’s a neat thing to hear, because I think when people think about inbound, when they think about HubSpot, they think a lot about B2B. They think we’re all just sitting here selling each other software, and they don’t think as much about the consumer use cases.

If we look at this company that you’ve got, what led you to start it in the first place? How did you start on this journey of Campaign Creators?

AFSARI: That’s a good question. The irony of it is I wanted to start my own company because I came off of a really negative experience in 2008-2009. I think a lot of us did when we were working, but I particularly was working for a company that had folded. It was a private equity firm. It caused a lot of damage both personally, reputation-wise, professionally for myself.

I wasn’t quite sure if I wanted to go back into business. I was working for individuals that were making promises, but they were never delivering on the promises. I had worked in the capacity of sales for other companies after that, and for whatever reason the promises I was making – bestowed upon me by the company – the company would never really deliver it.

By starting my own company, I would be the promiser or the holder of the promises, and I would also be the holder of the services that we would deliver. I felt that if I did that, bad things wouldn’t happen. Come to show that bad things still do happen, but that was really my motivation to start my own business. I really wanted to be able to control the process myself.

ROB: Right, I can really identify with that. Coming from a sales background, what then was the draw towards marketing?

AFSARI: I really didn’t have a love for marketing when I started. I had a love for business development and a love for sales. Somehow sales came easy to me. Business development came easy for me.

It’s been the natural progression of how the consumer journey has changed radically. I gave a talk about this, where millennials have really played a big impact on the way we make our purchasing decisions – and the access to information on the internet, the credit crisis in 2008. It’s really transformed the way that consumers now purchase.

Our style of marketing is taking the sales process and digitizing it, and helping companies communicate with the consumers in the way that consumers want to be communicated to. If that makes sense, it’s kind of like we do marketing, but we’re really more of an advanced digital sales company as well.

ROB: Right, you’re just chewing up parts of the sales process that have modernized, and there’s parts that are still probably a little bit less modern.

AFSARI: That’s correct.

ROB: Part of what you’re doing here is you spoke today. You gave a talk called, “Shattered by Embezzlement: How We Rebuilt Our Agency to Become Happier, Healthier, and More Profitable.” It sounds like a lot of people would not want to share that story publicly. Tell us that story.

AFSARI: I’ll share it with you as quickly as I can.

ROB: Yeah, you had a whole hour.

AFSARI: I’ll go through it real quickly. As I told you before, I wanted to start a company where if I was controlling the processes, I didn’t think I’d get hurt.

But the very first employee that we brought on – I had two partners at the time, and we brought on an individual that was friends with one of the partners. She came on board to help us build infrastructure and do HR and build culture, and really all the stuff to build a company while we were building the company on the other side with revenue and service providing, etc.

As you can imagine, we were building this company over a matter of 4 or 5 years. The company went from three partners to five employees to 10 employees to 15 employees to 20+. We knew there was something wrong with our business model because our profit margins were not very exciting. The topline revenue was great.

The individual that we hired – let’s just call her Jane – Jane was always there for myself and for my partners. She was the most trusted individual. She helped us with our finances, she helped us with HR. She was the pit boss, but she was also the team mom. We got to know her personally. She was there the day after my daughter was born in the hospital. She would babysit my kids. I mean, she had access to everything. There was no reason not to trust this individual.

But come to find out in 2016, we identified that she actually was stealing and embezzling from our payroll tax account. Long story short, there was an event that occurred. She then started to change her behavior; she resigned from the company shortly thereafter. We were not quite sure what the issue was at the time. We brought in an entire team to come in and do an investigation.

The investigation then led to us identifying that she was not paying our 941s, which was our quarterly payroll taxes, to the tune of about $330,000.

ROB: Wow. If someone may have this going on in their business right now, what should they be looking for? Are there any signs or canaries in the coal mine, if you will?

AFSARI: There’s a lot of different ways that somebody can commit white collar crime or an economic crime, but I think that there are a few things that need to happen within businesses if they’re not already happening. They may seem very logical to a lot of people, but when you’re building a company and bringing in people to help leverage yourself, oftentimes you start trusting and you just let them go do their thing. You don’t really see it on the surface.

Never allow anyone but yourself, the owner, to have access to any of the bank accounts or be able to sign off on any wires, checks, or ACH’s. I would say bring in an outside bookkeeper that does monthly audits so that you can close out the books every month, not just have an internal staff do it.

I would also get in touch with your CPA or actually call the IRS to get your ledger, to make sure all your 941s and 1065s and all the things that you need to file are filed and paid. Just do those things regularly to make sure that you’re doing an internal audit of yourself. As long as things are matching up, things should be okay.

But I think growing apathetic towards your finances – which I think sometimes a lot of business owners do, because we get stuck in the weeds of being able to try to figure out how to grow things and we hire people that we put into place to do stuff – the second we grow apathetic toward our own finances is when bad things happen.

ROB: If you’d had a bookkeeper in place who was doing monthly financials and reporting on it, you think they might’ve seen something sooner?

AFSARI: It would’ve been tough the way that this individual was doing what she was doing. When she was handling our books, she would provide me with weekly and monthly reports. The bank statements matched up with the QuickBooks, they matched up with the payroll tax. She had done a really sophisticated job at absconding with the money.

So, I don’t know, other than going directly to the IRS like we did – and our new CPA at the time that we brought in made a phone call and then came back and said, “Hey, guess what? You haven’t filed 4 years’ worth of your 941s and you haven’t paid 2-½ years’ worth of them.” But if you look at the bank statements, the bank statements indicated that we were actually paying our payroll taxes as they should be. But they were going into a secret bank account that was owned and controlled by that individual.

ROB: This is, from an entrepreneurial perspective, one of the harshest cuts you can put against the owners. Not only are you not profiting off this money, you’re not taking it home to your family, you’re actually personally liable for unpaid payroll taxes, right?

AFSARI: Yeah, if the company’s unable to now pay back that, let’s say, $330,000, the IRS wants their money. If the company were to fold or if the company were not able to pay it, they’re coming after you personally to do it.

They also want their money, so a $330,000 payroll tax problem actually becomes a $660,000 payroll tax problem. Then you add in all the other expenses of hiring the right people in place, like tax attorneys and consultants and lawyers to come and help you with this matter, and the number gets close to a million dollars.

ROB: Wow. Dare I ask, how have you survived? That seems like a tremendously difficult situation to survive. Was it out of necessity because you had to figure out a way to pay this money back in the first place? Is that part of it too?

AFSARI: Precisely right. It’s not like I had the money to be like, “Oh, here’s 330,000 spare extra dollars for you.” At the time when we identified the theft, we had probably $20,000 left in the bank, which was not even close to covering 1 month of burn. We actually found out that there was around $90,000 worth of unpaid invoices that we could go after, which helped us. It was like a secret piggybank that got us through a month or two.

But it was completely out of necessity. Every single change that we wanted to make but we were too fearful of making while the business was actually trucking along well – we had a gun to our head, and it said either close the business down today, lick your wounds and deal with the IRS and pay it back later, or make every single change that you’ve wanted to make to see if those changes will make a significant impact on the business.

ROB: Talk about the other changes that you made and what information you had that was sitting in the back of your head and pulling at you to make those changes, but that you weren’t listening enough to act on before then.

AFSARI: I think the biggest problem is our profit margins were so low. We were working for a business that we owned, but we really weren’t business owners or benefiting from it for years and years and years and years.

So, we had an internal overhead issue that we had to solve. We had a talent problem. We were providing too many services. We had a small team, but we had like 30 different services that we could provide. We didn’t have processes in place to provide each one of those services profitably.

And I was a really bad leader because I was the head of BD and Sales for our company even though I was a CEO, and if a client came in and said, “Hey, can you build a website and do this and do this and do this?” and I knew they were things that we could do but we weren’t necessarily the best at them, if I said, “No, we won’t do those,” I would fear that we would lose that business.

So, the answers had always been, “Yes, we will do those things for you as well.” Even though the revenue was coming in and we could close that business, we weren’t actually servicing that in a profitable standpoint from the business.

We knew that we had to size down the services into specialized. Forget being full service, really do the things that we love to do, do the things that we’re really good at, and in addition to that, bring on individuals and personnel that can actually provide that type of work at the level and capacity that we need them to.

We had to completely revamp the way that we hire. We completely revamped the way that we sold. I started saying “no” to 90% of our leads, which was the hardest thing for me to do. But the “Just say no” attitude is the approach to my sales now. If a potential client comes to us and says, “Can you do this and this?”, the answer is no. If they’re not the perfect fit, we won’t work with them.

ROB: What I’ve seen, at least, from some of these conversations is sometimes that specialization also creates a better sense of identity and the sort of “share and share alike” option. A lot of those leads that you get that come in, you probably have people you send those to that you know, “This person does a good job at website design and development. This person does a good job at broad spectrum social media.” Fair?

AFSARI: That’s totally fair. We have really strong agency partners that we partner with now. We find ourselves to be relatively noncompetitive because the only thing we do is middle of the funnel marketing automation workflows to be able to drive a consumer through that pathway.

A lot of companies need help in that, and because it’s the only thing we do, we’re really efficient at it. We’re really good at it. So when somebody comes in and says, “Can you do that and the following?” (the story of “and,” right?), we then say, “We can do this, but XYZ partner can do the following.”

Oftentimes they’re open to that. If they’re not open to it and they say, “The agency down the road said they can do it all, and we’d rather just do it with one agency,” it’s like, “Okay. Go with the other agency.”

But you’re right, it gives us opportunity to really partner with other companies and agencies and freelancers that can provide those services.

ROB: I think there’s a very non-spiteful opportunity in the middle of that to say, “If you want more attention on this part of what you’re doing in this middle of funnel, you know where we are. You may be going full service, you may be going to this 100-person shop down the road that says yes to everything” – it’s like the Ryan’s Steakhouse of agencies. There’s plenty of those too. But they know where to find you when they know that that part of their marketing hurts a little bit, right?

AFSARI: Correct. And you never know, that Ryan’s Steakhouse agency may actually be working with us to provide that service for them. Which is what’s happening. [laughs]

ROB: That perpetual white label. Yes. We see that a lot. SEO as well, search marketing. Exactly. So how many times have you been to Inbound?

AFSARI: This is my first year. We’ve been coming as a company for the last 5 years. I was supposed to show up – I had tickets and I was coming in 2016, and it was literally the week before when we identified that theft was happening. So, I had to cancel the trip myself. I sent everyone else, but I stayed back to do my thing, to begin the process of filing a police report and going through those motions.

But last year we sent about five team members; this year we have seven people here. It’s a great opportunity for the team. This is my first time. So far, so good, but, unfortunately, I leave first thing tomorrow morning for another conference in Colorado. I’m kind of bouncing all over the place.

ROB: What have you learned so far? What are some key takeaways for you? Especially because today was a little bit cozier in some of the sessions.

AFSARI: Yeah. There are a lot of really smart agencies out there, and I think there’s a little bit of a shift happening. I think in 2012, ’13, ’14, everyone wanted to be full service. People are realizing that full service is not as glamorous as it sounds.

Profit margins were a big point of discussion today, not just with my talk, but just in general. People are talking about how they’re trying to figure out how to reach that certain level of profit margin. Everyone seems to be stuck bumbling along in that 10%, 15%, 20% profit margin, usually, at best. How do you break through from that?

I think that’s what a lot of people are looking for, because owning a marketing agency and being a part of a marketing agency can be unforgiving most of the time. It’s very difficult to earn a dollar in this industry. I think that’s the discussion that I’ve been hearing. Tons of new tech that’s out there to help us do what we do, and a lot of companies starting to specialize in different niches. And then also, how do we increase our profitability?

It’s interesting, because what I started seeing about a year or two years ago, a lot of the products or services that we’ve provided have become commoditized. Like blog writing, social media management, all those activities. Everyone’s a blogger. Everyone does social media management.

It’s difficult to compete when this commoditization effect is happening, so agencies are leaning more towards the strategic aspect of what they provide so they can keep their ability to charge.

ROB: Are you all-in on HubSpot? Do you have eggs in different baskets when it comes to the marketing automation stack?

AFSARI: Yeah, there’s like, what, 6,000 MAS’s out there? It’s crazy.

ROB: Did you see Scott Brinker today?

AFSARI: I didn’t see him, but I know that slide very well. You can’t even read the logos, right? But the majority of our clients are on HubSpot. I would say about 80%. The other 20% are on a variety of other MAS’s based on the industries they’re in.

I’ll give you an example. An ecommerce or consumer packaged goods, a company that’s going after direct-to-consumer, there are other platforms that might be more suitable them other than HubSpot. HubSpot fits a lot of our clients’ needs, but the larger your database – and I think HubSpot’s doing a lot to change this, but they realized they were having a hard time competing. Because if I brought them a client that had 5 million records in the database, the price per month would just be exorbitant.

But then there are other MAS’s out there that realize that the value of a contact in an ecommerce database is very low compared to the value of a contact in let’s say a SaaS-based database.

ROB: There are certain industries I’ve seen where there is an entire separate marketing stack for that industry. I’ve seen it in automotive, car dealerships – just entirely different CRMs and entirely different tools that sit on top of the CRMs. The agencies are kind of shrugging, reaching for tools that can connect into these rogue CRMs that are out there that scratch some itch for them. Is that part of what’s going on there?

AFSARI: Kind of. Using car dealerships as an example is interesting, because I’ve actually met with a few car dealerships and I know a few people that own them. There are products that are geared specifically for car dealerships, and it’s not to say that HubSpot or other all-in-one service MAS’s don’t work. Car dealerships just are stuck in the ways that they know how to do things. You have Autotrader, you’ve got other platforms that they can market on.

You’re right, they seem to be working in more disparate solutions and systems than they need to be. But I think if there was education for a car dealership to say “hey, you can run the majority of what you’re looking to do under this one platform,” there would be a shift in that marketplace.

ROB: Today, first of all, you’ve laid your heart on the table with the embezzlement issue and the crime that you went through there. You shared a lot of what you’ve learned about specialization. Are there any other lessons you would bring to the forefront, if someone else is listening and they’re trying to figure out running an agency or even a small business, a growing business?

AFSARI: One of the things that I’ve come to acknowledge is when I started this company, I think I was operating in fear all the time. Fear of not being able to bring in enough money to make payroll for either my employees or for myself or pay the rent.

I think building a company with that fear mentality is very deleterious and very unhealthy. It took a huge event like this embezzlement that almost eradicated us and for us to rebound from it – and not only rebound, but grow so much stronger and become such a better company out of it.

We have workload-life balance. None of my employees handle more than five to seven clients at a time. I was hearing some agencies have their account managers work on 30 or 40 clients at a time, which is insane. There’s no workload-life balance.

ROB: Hard to serve that client well.

AFSARI: It’s really hard to serve the client well. It’s really hard to be happy in your job. I would say don’t work out of fear, and put together a process that’s scalable. Put together a process that you know you can build almost like Legos, block by block by block – and you can confine it too. If the business has to scale back, you can scale back, block by block by block, instead of having it rock the entire system.

Really, it’s an economic exercise that a business owner should go through in figuring out what is your entire cost structure in servicing clients, and then how are you going to be able to scale that. And never be fearful, because even in the worst situation, there are ways to get through it.

ROB: It seems like some of that – number one, not being fearful, number two, work-life balance – a lot of those things come from plenty, from having resources, from having higher margins that you mentioned. There’s a lot more room to have a work-life balance when you’re not worried about going from 15% to 20% margins on a client.

AFSARI: Yeah. When we were running our full service agency, at the best we were at 5%, 10%, maybe 15% on some months, profit margin. It’s really difficult to pay your employees the fair wage that they deserve. It’s hard to keep good talent.

It’s also tough just to be excited about the business and, as you’re talking about, doing the things you need to do where you don’t fear. You don’t really have savings in the bank or multiple months’ worth of burn rate waiting for you in case something bad happens.

But if you change your model – we eliminated middle management. We created pods. We have our strategists that connect directly with the client. The strategist manages the workforce as well. We were able to eliminate a lot of our overhead. We were able to increase our profitability. We’ve seen 50%, 60%, 70% profit margins month over month.

And you’re right – being able to have months like that give us an opportunity to provide fair wages, to put certain boundaries with work, to make the clients happier, to make the employees happier, to give people a sense of opportunity and career rather than “I’m just a part of this agency.” If you talk to someone, they may say “I’ve been a part of like 10 agencies.” That’s not the type of company that I want to build. I want to build a long-term career for myself and for the people that I love coming to work with every day.

ROB: As you’re in the middle of this literally huge conference, meeting many of these smart agencies, and you talk about how some of the things that you used to do have become a little bit more commodity – it seems to loom in the background. There are things that are here today that are special that may become commodities.

As you look ahead, what are you excited about that’s coming up, either for Campaign Creators or for this middle funnel where you specialize right now?

AFSARI: I think the whole process of converting and modernizing the sales process of businesses is beginning to see that shift. I think we were early adopters 3 or 4 years ago when we started this process. A lot of companies now are recognizing the fact that cold calling is dead. Outbound mailers in a lot of industries are more costly than anything.

There are a lot of things that are shifting and changing, and I think that we’re on the forefront of being able to provide really high-end, sophisticated workflows to be able to directly communicate with consumers in a more exact fashion than they’ve ever been discussed with before.

Imagine you as a consumer, you only want to be given certain information that you would consider valuable, not spammy. If we can get you that information at the right time in your sales cycle with something that you’re looking to purchase, you might be more interested in making that purchase from that company versus doing it on your own or getting spammed or not learning anything about them.

So I get excited about the fact that we’re building more and more advancements on how we build out our workflows. I think the middle of the funnel is something that is important both in outbound sales and inbound. Right now people that are doing outbound are doing it manually, but we’re automating the whole process.

Utilizing technology like HubSpot just gives you such an advantage at being able to understand who’s doing what on the website and what information needs to be delivered to that person depending on their journey. If you have a funnel that’s 12 steps long, you don’t want the email that’s intended for Step 2 to be going to the person that’s at Step 12.

ROB: It’s interesting. I think one of the lessons I’ll pull out and think about and take away from this is just to think about the stages of a sales process that people are engaging in right now with people, and that a lot of those have become digital. That’s what you’re talking about and that’s what you’re doing every day. And a lot of those are still yet to be transformed, like so many other industries that are going online in different ways.

AFSARI: Right, and that’s the exciting part. I think that we have a big opportunity in the future to help those companies transform their sales process.

ROB: Very cool. Bob, thank you for taking time out of your short time at Inbound to talk. It’s a pleasure to learn from you, and thank you for being brave enough to share some of the hard lessons of your business.

AFSARI: Thanks for the opportunity, Rob. I appreciate it.

ROB: It’s a pleasure. Thank you.

AFSARI: Thank you.

ROB: Thank you for listening. The Marketing Agency Leadership Podcast is presented by Converge. Converge helps digital marketing agencies and brands automate their reporting so they can be more profitable, accurate, and responsive. To learn more about how Converge can automate your marketing reporting, email info@convergehq.com, or visit us on the web at convergehq.com.

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