Nigel Thomas is the CEO of Alpha Inbound, a Direct To Consumer digital marketing agency with 7 and 8 figure clients. We go over paid social media strategy, the importance of transparency in working with people, and why Nigel doesn't believe in measuring success by Return On Ad Spend among other topics.
Becoming the CEO of Alpha Inbound
Nigel Thomas: A bit of a backstory. Josh, who's the founder of this company, was kind of deciding what he should do of his next step with this agency because he was running it on more of a consultation basis, not really a fully fledged marketing agency. And I was actually chewed up and spat out of another startup, and I had this opportunity 14 months ago, what am I gonna do next?
And I spoke to Josh. And I wanted to work with someone I could really trust and Josh is a little bit more behind the scenes getting incredible results. But he just cares so much about the brands he works for and he's amazing with media buying. So from my side, I'm more enjoying the business development, the leadership side of things.
So I thought we could build a good partnership there and that's what we decided to do 14 or so months ago. And from there, from pretty much with no reputation in the market, from all cold outbounds using my sales experience, you know, we brought on like 20 to 22 brands that we're working with, or seven, eight figure brands on the direct to consumer side.
And we work with them under the paid ads, but more going into content now, which you can get into in a little bit. But the reason why is just because of the leadership side of things. Because I came on as chief growth officer and look, it's a startup. We've got, you know, 10 to 15 people right now. But at the end of the day, we all work, we all wear several hats as your, I'm sure you're well aware of Bootstrap startup.
It was just more to tell the other people what my role is and it made sense to be the CEO because I'm more outward facing. I'm on podcast speaking to fantastic people like yourselves, and I'm out there and obviously it's more just so the team know. Like who the people are and what we do internally so we can galvanize them and get the right results. So hope that was a long-winded answer to your question, but it should give you a little bit of context to where things are at right now.
Paid social strategies for seven to eight figure brands
Alex Bond: So you mentioned earlier, prior to the interview that your client sheet includes essentially multiple, prestigious, seven to eight figure brands, right? So what are some of the paid social strategies that you implement with these brands that you're, that you're speaking of?
Nigel Thomas: Yeah, so the two platforms that we focus on right now, just cause they've got the most scalability is Facebook, which obviously is called meta these days, and TikTok, and that obviously includes Instagram as well.
Now, when we started out, it was all about media buying, just really inside the ad accounts. But we quite quickly realized and with the shift, iOS 14 and the privacy issues between Apple and Facebook that we needed to get more involved in these businesses. And the big feedback loop was with the content.
So that's the thing that moves the needle most now and really user generator content. So if you scroll through TikTok, you'll see all these different kind of videos. You know, you really need to understand the consumer, understand how they consume the content, and to do that at scale. You need to really bring the content in-house cause we were relying on that content for the brands that you are working with.
And since pulling that in-house, having created strategists, video editors, a production team, it gives us a massive advantage. Really tightens up that feedback loop between the content team and the media buying team. So we can just move so much faster. When you're spending hundreds of thousands a month on ads, you need that speed because speed kills in this industry.
So that's one of the things, and really like paid social and content. Then the other thing is just strategy because again, now there's issues with single channel attribution, which obviously most people on Facebook refer to it as ROAS, return on ad spend. We need to look at more of a blended approach.
So even if we need to look out into industry, like outside of the social media ecosystem, onto third party selling places like Amazon Wholesale, what we need to really do and educate the brands are working with is understand from a marketing efficiency ratio. The MER, which is the acronym that a lot of marketers are using these days, how many dollars are put in and how much revenue is coming out.
But more from a macro perspective, because here's the thing, someone might look and fi find your brand on Facebook or Meta as, again, I'm just gonna keep saying Facebook. It's just easier. But then they might only come and buy your product after being brought back in through a Google Play ads or a TikTok ads.
Now if you look at single channel attribution, you would then, the smart money will be to put the money back into the last click. But at the end of the day, you've also gotten taken to account the discovery and what's really scalable into new markets. So yes, it's strategy, obviously paid media still, and content.
They're the three real avenues that we're pushing into and that's why, you know, we're really a growth agency overall. And I've noticed one thing is that the big. They don't pay you for what button to click, they pay you for strategy and how to strategically place the resources of the company to get to a new destination 12, 24 months down the line.
MER vs ROAS
Alex Bond: I like how you approach things more from a macro perspective, MER versus, you know, I'll just get into your hot take that you had, you know, prior to the show which is essentially that you don't believe in return on ad spend.
So I want to now give you the opportunity to just tell me this was like a misunderstanding or more importantly to clarify exactly what that means. Cause I think a lot of people listening might be like, you know, that's backwards. That's a real hot take. So really, please tell us exactly what you mean, and your reasoning behind.
Nigel Thomas: Yeah, for sure. So just to clarify, I still think ROAS is an important metric. I just don't believe that you should base all of your KPIs off return on ad spend, because since iOS 14, if we take Facebook, we are seeing accounts under and overreporting by like 50%.
So do you really want to base your marketing budgets of something that's that inaccurate? I don't think it's a good idea. And actually what's interesting is even prior to iOS 14, Facebook ads was never accurate. Anyway. If you think about it, and I'll challenge the listeners out there, what do you think Facebook's primary objective is?
To get you to spend more money on their platform. They don't care about your store. They don't care about your brand. They just care about having a fantastic user experience to keep people into their ecosystem. So they'll spend more money on ads. So the ads platform is gear to make you spend more money.
So sometimes it's gonna be inaccurate. Look, I appreciate it was way more accurate back in the day, but also, of course, we had the golden rush of Facebook. You know, the demand and supply. The big companies weren't yet investing, so there was a massive arbitrage on the tension that's now resetting and going more back to baseline, which is why instead of looking at that row as, and taking into account what I just said about that discovery process.
We need to look at MER marketing efficiency ratio or blended ROAS across all your channels, which is pretty damn simple. Is how much you invest overall into your marketing and how much revenue you are bringing back. And look, I appreciate if you've got thin profit margins, you're a bootstrap startup, it might be more complicated.
You're trying to look and you should take into account the ROAS still. But don't base your entire KPIs off that, and especially if you are working with an external marketing agency. You should at least understand how it's impacting the other channel. Cause I'll say one more thing, which is Google drives a lot of revenue for the brands we work with and we don't touch Google ads.
You know, sometimes the brands we're working with have an external agency that does that. Sometimes they'll have it in-house. But one thing I can tell you across the 20 or 22 brands that we're managing, remember all of them are like seven, eight figure brands. The correlation between when we really scale up on Facebook that then has, and the impact on Google.
We always see a positive correlation between driving up the ads on Facebook, and then obviously there's more search results and money that's coming in through Google and Oppositely. When we scale things down, we also see that impact. So if you're not taking that into consideration, then you are, you know, you're leaving money on the table, but just overall, it's not an accurate representation of how that channels impact in your brand.
So that's why I say ROAS is dead and MER should be the leading metric. With ROAS still being considered as kind of more like a secondary KPI. Hopefully that makes sense.
Power of content with your marketing strategy
Alex Bond: I kind of wanna expound on that idea a little bit too, which is that, you know, you touched on it a little bit in such a competitive advertising market. What are some of those other strategies on how you cut through all the noise out there?
Nigel Thomas: Content. Content's the biggest driver, so again, I said this to someone the other day but content buying is the new media buying. Here's the thing, content, the backbone of all great content is copywriting and psychology. I remember and I posted about on LinkedIn today, David Ogilvy once said, the best copywriters, they spend 80% of their time researching and 20% of their time writing.
And the reason why I'm saying this is right now, the time recording obviously we're heading into recession. The director consumer boom is, you know, quote unquote over, the market's resetting to to norm. That's in my opinion, what's happening anyway. And now what it actually takes to have success on paid social, and these are the platforms, is understanding your customer inside out.
You know, I see all these things from these email companies talking about retention instead of acquisition these days. And whilst I agree, The other thing is that if you do your research properly and you understand the pain points of your customer, you understand the desires, you understand the group of people that you're gonna go after, and you really have that throughout your entire customer journey.
So the content, you know, it has the avatar of your customer, it has the copy of their pain points, the landing page. It then reflects that it has congruency, and then the welcome series of your email flows. It's all speaking to your customer, your specific customer, your one person, what keeps 'em up at night. If you do all of that, the customers will retain themselves.
So you don't need to use smart retention strategies to hold them in and all these, you know, tactics and discounts. It's just more understanding your customer. And look, that takes a lot of hard work and dedication and that's where a lot of brands, they don't want to touch. That kind of thing.
I was on a call just yesterday doing a podcast with the CEO of Bellroy, a really fantastic brands.
Anyone should check them out. His name's Andy, one of the founders, and they started their brand in a recession and he told me that, you know, they don't rely on trends because they don't want to sure. like obviously they have the Facebook ad Gold Rush era, but at the end of the day, they're recession.
Because they built their company on great principles and they understand their communities and market better than all of their competitors. So for me, it's a thing of, its back to basics. Now, you know, we're going into a recession, people are only gonna open their wallets or purses when they see things that they actually need.
And that takes really good understanding of your customers. So whilst I can talk about how content's gonna help you out, the idea is, and when we're a marketing agency, if we come in, the brand understands our customer better than their competitors. We can make the best content and copy and tell the best stories but it all comes back to how well do you understand your customer, and obviously how good is your product at solving their problem.
How Alpha Inbound advocates transparency
Alex Bond: Well, that's great, and it's kind of a good segue into the fact that I have heard you on a couple podcasts, you've kind of mentioned it a bit here that you're a pretty big advocate for one transparent marketing, and two more long-term contracts with brands. To start off, how does your brand specifically practice transparency?
Nigel Thomas: Yeah, so it starts from the first interaction. You know, due diligence is a massive thing if you don't do the due diligence, because I mean, if we look at what it takes to run paid media at scale, there's only five things. Firstly, it's the content. Secondly, it's offer, which that is important. The third thing is landing pages. The fourth thing is retention, and then the fifth thing, probably most important is unit economics.
So in that discovery process, we're analyzing all those five areas. And if, for example, the landing page is totally awful, let's just say the unit economics, which is the main one, is totally off and there's no way that we can ever achieve scale with this brand because margins are just terrible and it's never gonna back out in the line of obviously rising guide costs.
Then we'll just be honest with them because sure, we could probably pull the wool over their eyes. Use, you know, sales strategists get a deal over the line. But do I really think as a CEO, my team who obviously we spent a long time recruiting, so we work with a players are gonna be motivated by a brand six months down the line where they literally have their hands tied because of razor thin profit margins.
No. And I take that responsibility very seriously, not only for the brand that we are working for, but also for our team members. Because if our team members aren't motivated to work for that brand and there isn't that, you know, long-term scalability. Then we might as well be honest upfront. And sure I understand, as a bootstrap startup, it's hard to say no to those opportunities, but in Q3 I must have turned down like 15, 20 brands just because it wasn't the right time.
And again, in an industry where everyone is telling them and blowing smoke up their ass. Actually, if you are honest with people, brutally honest, you stand out and you gain something that's way more important than anything else, which is trust and respect, and that's how I like to build my relationships.
Alex Bond: Has that advocacy been able to affect the marketing sector as a whole? You know, I mean because you are the CEO, you're going on podcasts, you're saying we should practice a little more transparency and altruism. Have you seen that affect kind of the marketing sector?
Nigel Thomas: To an extent. I mean, I'll be honest, I only started building my personal brand and getting out there this year, so probably not add enough time.
I know there's other people, it's not just me in the space, but I think the biggest problem is the fact that whilst the opportunity, the internet has been amazing for so many people, and you know, people who don't have necessarily like the Harvard qualifications who have built these incredible companies. It's also given rise to agencies, especially marketing agencies in the digital realm just they've had access to anything.
There's no barriers to entry. And then these brands who are coming from offline to online, especially like in the pandemic and whatever else, you know, there's no barriers to entry, there's, there's no certificates that are needed, and they're just promising these wild results. And often I think they actually believe it a lot of the time.
They don't understand how to run business. You need to understand financials, operations, and these, you know, marketers with not that much experience who are marketers. They're not business operators obviously come into the space. They've made it work for a few brands.But scale, that's a whole different ballgame, and I think that's where there's been a real breakdown in trust.
So it's not necessarily always their fault, it's just the education experience. Because obviously if you have success and you build a marketing agency to X amount, it's probably a lot easier to go and teach other people how to do. And, you know, sell them a digital course on how to do that. And whilst, you know, online education's a massive growing industry, there's a lot, like I said, there's a lot of sharks out there and that it's the education side of it.
So yeah, hopefully these podcasts start to educate people, but I think the brands are becoming more and hopefully with more conversations like this, we educate the market and as a whole we move forward in the right direction.
How their agency determine which brands to work with
Alex Bond: For any business that's out there listening that's interested in working with Alpha Inbound. What's kinda like the preliminary vetting process? How do you determine, you know, what companies you work with and what companies you don't?
Nigel Thomas: Yeah, so a lot of the brands who work with are in the health and wellness space. Really, because their profit margins are usually better, you know, like in the 70 plus percent range. They also have better lifetime value because let's just say, for example, a supplement brand compared to a fashion brand, you're gonna be more likely to buy a supplement product on a monthly basis just because the habit and the lifestyle, and then stay for 12 months.
Obviously, if it is a good product versus a fashion brand where you know, you buy. Fancy pair of shoes, you're probably not gonna buy that again for another six to 12 months at least. So retention of that model is easier just because of, again, the community and the group. And we see that reflected in a lot of the numbers that we work with. So as you can imagine, it makes more sense from a business owner standpoint to pay more to acquire that one customer.
If they know over the course of the next six to 12 months, they're gonna be spending X amount. And obviously we can see that in the numbers. In terms of actual, like if you want to go into the details, usually brands that are at least spending 20,000 a month on ads, whether that be on meta TikTok, it's more 50 plus these days.
And then apart from that, in terms of the unit economics for Facebook, this is my, or meta. This is my advice, which is it's a discovery platform, and if you can't reverse engineer your unit economics to a place where you can get as close to break even, then you're gonna really struggle on that platform.
So most of the brands that we work with, either just want a one x return if we're talking about the, the single channel attribution ROAS. But overall, what I would recommend is having 30% MER or like, you know, three to five x MER blended, that's a good number to be at. So if we can reverse engineer the unit economics so we can be at that and we're scaling up to, you know, 500. 500K plus on ad spend, plus then that's kind of where we want to be.
Now, usually that also requires redoing their content, which we're seeing more and more of, especially for TikTok, because the big difference between TikTok and Facebook is the algorithms a lot less mature, so the algorithm finds it a lot harder to latch on to a specific audience within their data which means the content fatigues a lot faster, so you need a lot more content.
And whilst TikTok is a lot cheaper to actually bring eyeballs to your brand and Facebook, if you need to do twice as much content, a lot of people don't understand that trade off. And then they realize when they start doing TikTok, how much time and resource they gotta spend on content.
That's why I'd recommend to anyone, if you're gonna work with an agency for TikTok, they need to also have a content team. Otherwise it is not gonna work out. And so that should give you an idea of kind the brands we're working with.
Rebranding their agency from scratch
Alex Bond: So I wanna kind of remark on how, you know, we have been talking about Facebook and meta and correcting ourselves throughout this conversation about that because, Frankly, it is so difficult to rebrand. I mean, that's kind of the perfect example of the difficulty in you know, attempting to rebrand is I will never stop calling it Facebook in my head. And you guys had to rebrand your agency from scratch. Can you tell us about how you did that or the difficulties in doing that?
Nigel Thomas: Yeah, so when I came into work with. I'll be honest, I thought there was gonna be a little bit more there. He was really running the agency, like I said, most are consultant and the freelancers. So whether there were no systems, no CRM, not really a website, no marketing. So we built the entire thing from scratch.
And whilst I came in, actually, if I'm being transparent, my initial idea was to make some sales and help Josh out, get some commissions, and then go and start my own. I quite quickly realized a lot about my personality and that process is I find it really hard to just sell someone down the river. Not that I wanted to do that anyway, but the point is I didn't believe that we could get the results cause we didn't have the systems and operations there.
So I needed to do all of that first. Bearing in mind, I was only getting paid after commissions which was obviously hard at the start, but I needed to help build all the operations and bring some people on that I knew from different, you know, companies I've worked from the past. So we could have that foundation in place to then really scale upon.
So we started a podcast, we read on the website, I post on LinkedIn every single day. Built a bit of a community there. Obviously, like you said, going on podcasts we did mostly built through outbound. We sent probably 10,000 cold emails in the first year which brought on a lot of the brands we're working with, but then most importantly is finding gay players and finding a way to bring them on board and galvanize that team.
So instead of, obviously it just being Josh on the ads, he's now got a copywriter, you know, he's now got a content team behind him and we've got other media buyers from some top agencies who, again, with all that shared knowledge, is that's just the difference really.
And having a six, seven person professional team being put on every single account we work with, that's what we, we do to beat other agencies who are slower, more lethargic. And honestly, the biggest thing I've realized, because the first thing I did actually before I did anything was I jumped on calls with other agencies and I did that so I could understand their sales process and I could understand the holes in their process.
And from that I realized there was a hell of a lot of opportunity and I also understood that most agencies can't resource properly. So you probably know, you spoke about it yourself, where you had kind of junior people on the account. Often you'll get sold, you know, the dream with the guys at the top.
And then after you sign that deal, you make that big retainer payment, you'll get handed off to a junior who's learning on the job. And the reason that is because from an internal perspective, obviously me looking at the finances all the time, it's really hard to scale an agency and keep profitable margins.
And that's why a lot of these agencies, they just turn into sales machines and just churn through people because it's hard to keep that quality up. And honestly, the trade off for us of I'm being frank is we have fairly low margins, but we have great retention of the brands that we're bringing on. I think since we started, 90% after the initial 90 day contract, we have brands on, have signed on for a following 90 days, which I'm pretty proud.
And sure we could have made a lot more sales, but at the end of the day, our team are really happy and enjoy the brands that we work with. And for me, long-term, that's the most important thing. So yeah, they're the main things that I did to rebrand the agency started out more outbound. It's transitioned more to inbound now. And now I'm looking to build out the marketing team more our internal marketing team so we can really start scaling next year. So I'm excited for that.
How Nigel cultivates the culture as a CEO of their company
Alex Bond: I wanted to kind of backtrack to your role as the CEO of the company. Honestly. I think we're actually seeing right now the realtime impact that a CEO can have on a company with kind of like the turmoil going on at over at Twitter.
And you don't, have to comment on any of that. It just makes me think as kind of like an outsider looking in, you know, about the role that a CEO plays in cultivating a culture and setting the tone of a company. Yeah. So is that something that you consider an important part of your job? And if so, how do you set the tone at Alpha Inbound?
Nigel Thomas: Yeah, so for me, my first love was sports and obviously being from the UK is, you can hear from my accent, football or soccer as you guys call it, is the big sport there. And I got a lot of my lessons not from school and education, but actually from sports and a lot of that reverberates back into team culture.
And a big one, even though I'm a supporter of Manchester City, Manchester United with a team that were winning all the trophies back when I was a child, and Sir Alex Ferguson was our manager and a big, I know obviously Christian Ronaldo has done some viral stuff at the moment as well, but that's interesting timing.
But the big thing that those guys had is standards. Alex Ferguson used to have captains in the dressing room. He had his standards but then he'd almost have his lieutenants on the pitch, which maintain those standards at all times. And if you know, someone was late to training or someone wasn't pulling their weight, you know, instantly people would jump on it straight away.
So whilst I'm still learning and developing, I think having standards across the board, and I'm not really a fan of being a discipline, a disciplinarian, or you know, running a company like a dictatorship. You need to give people, especially a marketing creative freedom. But you also need to set standards.
And that's one of the main things for me. Otherwise, when you're not there, cause obviously you know, as a company scales, you're not gonna be able to be everywhere. You need to make sure you trust those people and the standards are kept and when you are not there, they maintain the standards and pass 'em onto the next people.
So, for me, that's the most important thing in the culture. And then the other thing is just awareness of numbers. So I was at some events recently and asking me the difference between agencies that do half a million a year to agencies that do anywhere between like 20 to 50 million a year. And the biggest thing is really awareness of the numbers and breaking that down into different departments, but not just the leaders of those departments knowing their numbers every single person in the company.
So after that, I've really tried to sit down our team, break down each of the numbers in line with our higher level company goals, and make sure that everyone is aware of them, and now doing more routine checks on a weekly, you know, breaking them down quarterly goals, obviously yearly goals, but quarterly goals monthly, and then even breaking them down into weekly to make sure that we're always, you know, going, we have that direction and we're always going towards our goals. And then we can course correct.
But most importantly, and like I said earlier, which most agencies don't understand who are struggling, understand how we can resource to hit those goals, and then we can get that feedback from the different team members. So I think that's the biggest thing and the biggest thing that I'm trying to implement right now.
Biggest challenges CEOs face
Alex Bond: What do you consider the hardest part of the CEO job?
Nigel Thomas: Well, for an agency, I mean CEO, I'd still say for myself, I'm pretty young as a CEO because I spoke to, we talk about levels, right? In business. I spoke to a guy I'm not sure of, you know him, called Drew Green the other day, who's the CEO and you know, he was, I think, offered a role at one of Amazon's highest divisions, could have had anything he wanted.
He turned that down, went to work for who were in a real, real bad financial place, and within five to six years, completely turned the company around. They're now the second fastest growing company in the entirety of Canada, and they're doing over like 150 million in revenue a year plus, and they've got a massive valuation and he's got loads of experience.
And when I spoke to him just within 30 minutes, I was just like, wow. Like I need to step up my game. And some of the stuff he was saying, So I think almost, yeah, I'm a CEO of a startup, but I almost don't consider myself as a full-fledged CEO, like that guy, a big company.
So I also want to point that out there, but I think one of the biggest things from an agency's perspective is the fact that we don't just have to manage people internally. We have to manage people externally. Obviously if it's a SaaS, product's gonna be slightly different. But for an agency, it's a people business. It's a lot on how you manage those relationships when I'm not around, because obviously I'm the front facing persons.
So I've had a lot of initial conversations with the brands we've worked with, maintaining that relationship, and obviously what I've spoken to them about what we were talking about earlier in terms of making sure they don't feel, you know, I've sold them the dream and then it isn't maintained. That's been one of the hardest things.
And making sure that feedback loop between those different departments stays consistent whilst you scale. And obviously we've been going through some, you know, pretty decent growth recently and making sure that's, that's kept there and we've got that, those partnerships that we're building with the companies we've working with.
So I'd say that and the operations on the content side of things making sure that operation really working at scale, which is complicated. And obviously as everyone else, all other CEOs have, recruiting the right talent is always hard, but you find a way.
Future of Alpha Inbound
Alex Bond: What are some of the goals that you have set for, maybe it's yourself or for your company, cause you know, a number like 150 million seem to really impress and jump out at you. What would be that number for you where you're at?
Nigel Thomas: Yeah, sure. So, you know, next year we should be able to really progress into the multi seven figure range as an agency. Bearing in mind we're bootstrapped, we've only been going like this our first four year of growth. So that's really where we wanna be. How far into that multi seven figures we'll be able to get will really depend on what happens in Black Friday and also how we look on the sales team side of things and content side of things.
And then outside of that, really progressing more into the content side. So we're looking to build out an entire like content studio next year. We've already got access to like a hundred UGC creators. But developing those relationships more and maybe going slightly outside of the Shopify ecosystem and into, for example, the Amazon ecosystem, cause all of these kind of brands need content. So that's a huge area of opportunity for us. And you know, these brands, like obviously there's some massive deals there potentially for us where we can really help these companies out. And maybe more on the strategic side of things.
From a personal side of things, I'm looking to keep extending my network, talk to people like yourself, drew Green, as I mentioned, these kind of guys. Just really learned, you know, I quit my corporate role at 26 years old, and I think I said I want to be a millionaire by 30. I'm now 31 years old, and I have a much longer term outlook on life. You know, I want to really just learn from the best people. Understand that there's a lot of time here and whilst obviously the Internet's given rise to these multimillionaires in their twenties.
You've gotta understand that statistically, and I think Drew Green might even have mentioned that to me on the podcast, the average age of a successful founder who like, you know, we're a high growth startup. We're talking about, I think it's actually like 56. So experience counts. And I'm ready to take my time and learn from the best people.
And the last thing I'll say on that is, anyone who hasn't started or they are starting a marketing agency, it's a fantastic apprenticeship to give you, really put you like in the fire. And great cashflow business too, but to understand all the different roles, sales, marketing, logistics, understanding how to work with people, you know, big business owners and how to control their expectations.
And for me, it's just a great learning experience all around. So I'm privileged to be in this position, privileged to work with the people that I work with, privileged to be on podcasts with great people like yourself. And that's the outlook really for the next 12 to 24 months that answers your question.