013: Grow a Membership by Focusing on Your Strengths & Outsourcing Your Weaknesses
🗓 September 15, 2019
Ward chats with Ken Moskowitz, founder of Ad Zombies about how helping people in your community can accidentally lead to a new business venture, determining your strengths and weaknesses to help make the correct decisions for your business, and having a deep understanding of your audience to determine the right pricing.
Ward: [00:00:00] Hi, I'm Ward Sandler the CEO and co-founder of member space. I'm here with Ken Moskowitz the founder of Ad Zombies. Hi Ken. How you doing?
Ken: [00:00:08] I am amazing. How are you?
Ward: [00:00:11] I'm good. I'm good. So let's start off with you know, what's your story? How did you get into this business? What is the business? What's your background?
Ken: [00:00:20] Well, my story is really simple. I was born in the backseat of a Greyhound bus. Oh wait. No, that's a song. Sorry my bad, you know I was. Go born and raised New York City boy I spent a lot of time listening to the radio and just fell in love with the with the radio as a kid and so I spend a lot of free time making commercials as a kid you know you remember how back in the day people made mixtapes because that's that was the cool thing to do and then they started making playlists right that's the new mixtape well I wasn't geeking out on mixtapes of music I was geeking out on mixtapes of commercials I started writing and producing my own radio commercials and I was like 12 years. Old in my bedroom in Queens New York. And so that's the really the foundation the origin of how I got into the creative business. Well, yeah, it's a really, you know, I knew from an early age. This is what I was meant to do. It was my destiny.
Ward: [00:01:17] That's amazing. So and then that I obviously you know, down down the line ad zombies was created but I assume this wasn't your kind of first Endeavor as an entrepreneur right?
Ken: [00:01:28] No I so my path to being an entrepreneur by the way you know in Tony Robbins called me out on it and I am he's absolutely right I am not an entrepreneur so I want to clarify this with everyone who's listening I am an artist with entrepreneurial Tendencies see because there are people who think that they're entrepreneurs but entrepreneurs are truly fully risk. Like they love the risk and reward. I don't have the stomach for that. I am more conservative. So but I love the craft. So I wanted to state that because a lot of you out there listening might be artists with entrepreneurial Tendencies and not truly self identify it as an artist like I am or as an entrepreneur so. Let me let me kind of take you back my career started in the path that I thought I was going to go radio. I always wanted to be a DJ I thought it would be the coolest thing ever to be the best DJ in New York City I learned from some of the best in the business growing up listening to WCBS FM and you know that for me was the path I was going to take and when I got into the radio business I realized very quickly that I enjoyed being in the. To Studio more than I enjoyed being on the air and so my career quickly evolved into the guy behind the scenes not on the air and I started working on production. I became a creative director and then slowly moved up the food chain of broadcast radio and became a corporate creative director production director and really found my my specialty and building Brands and brand Imaging and commercials and that's when I started getting in contact with all these big. It's because I got to work with ESPN Coca-Cola Budweiser all these Brands. I got to touch over my career fast forward to 2011 and I was feeling a little bit burnt out on the industry. And you know, I had spent my entire career in the industry and I thought it's time for a change and I wanted to be my own boss and so. I took the step the leap and started my creative production company and landed my first client fortunately with all my years in the creative space Eminem's was was at my doorstep there was an opportunity to do some rebranding for M&M's for a product that they had and the the ad that we produce the creative that we produced. One they wanted that and so my first client with my other company was M&M's the second one in was a Budweiser. And so I started off pretty pretty lucky. I got two big gets right from the start and but what happened was because it wasn't my ideal business over time. I started to. Fall out of love with my baby and and part of why that happened was is because instead of being true to who I was as a creative as a writer as a Storyteller I started to have to be involved in all of the production and. The pre-production of commercial shoots and I was involved in so many things that just suck the life out of me that I wasn't enjoying it and then a happy accident as Bob Ross used to say a happy accident occurred in that was Mark 6 2017 in a Facebook group. Somebody had written an ad for a plastic surgeon for breast augmentation and. And reconstruction and the ad wasn't performing. Well in in this Facebook group. He said Can somebody help me fix this ad it's not working. It's not getting any leads. And I knew inherently what was wrong with the ad it didn't speak to a woman from a woman's perspective. It was written by a guy and had the total wrong tone the total wrong approach and and wouldn't speak to a woman at her heart. And so I quickly rewrote the ad and told him here's what's wrong with it. And here's why I rewrote it this way which started a small group of people 10 15 people say wow. I wish I could write like that and all I did was offer to help anyone who needed help and by the end of that weekend, I had over a hundred requests for copywriting help and a business was born.
Ward: [00:05:47] Wow, I mean, yeah, that's that's kind of like an ideal origin story, right? You lead by helping folks and offering advice for free and it nationally naturally will lead to sales assuming that you know, what you're providing is good which it sounds like it was so that's that's pretty impressive.
Ken: [00:06:04] Yeah. I always tell people it was an accident and I'm very honest about that because they say, oh you built this incredible business. I'm like, yeah. I didn't really build it it started by accident and so I'm very. I'm really humble humbled by that because when you do the right thing when you take care of people when you give what happens and can happen is remarkable.
Ward: [00:06:26] Yeah so I guess for that Facebook group in 2017 I assumed you'd been part of that or other similar groups before then right?
Ken: [00:06:37] I was I was a part of that group from oh when it was early on maybe 20,000 members today. It's over a hundred thousand members in that group and I would just go in there and help people out or help them with their copy. Try to correct this try to correct that but that particular ad really stood out and. What stood out to me wasn't the quality or the content of the ad it was the number of people that were dumping on this person. He asked for help. He said help me this ad isn't working. I need help and instead of helping people helping people just jumped in and said, yeah. This had really sucks. Well, duh. He knows that and so all I did was go in and do what I naturally do which is. Write the ad the way I would write it. And yeah, so it's started the business started that way and has continued to grow and evolve because of that and I continue to this day. I'm in Facebook groups daily helping people for free. I have no problem doing that.
Ward: [00:07:37] That's awesome. So give it for people listening who aren't you know familiar with AD zombies or haven't looked up the website yet. Give us a quick overview of what is the business and what does it do? Exactly?
Ken: [00:07:47] So ad zombies we write words that sell anything. It doesn't matter what your business is. If you run Facebook ads Google ads, you need emails landing pages, whatever it is if it needs words to help convey the message of what it is, you sell the product or service. We write the message. We don't do any design. We're not graphic artist. In fact, if you want our artwork, you're going to get stick figures because it's terrible. We are just not designers. We are writers we're storytellers. And so we help businesses around the world today. We serve 300 plus agencies and about 5,000 smbs globally helping them write their ads their stories. You name it?
Ward: [00:08:30] Awesome, and you do that on a on a recurring basis. It's not so much one-off ad copy?
Ken: [00:08:36] We have we have a model that does both so we have recurring recurring packages recurring services for agency clients. And then we have agency clients that are not on recurring that just, you know, come in for one off to service their clients needs and as they use us and they start to discover what we do and how easy it is to use us and just how much weight is taken off of their shoulders. Then they naturally want to migrate into a monthly plan with us and and that makes the most sense for them but yeah we have a lot of clients just come in you know for the first time and and they taste what we can do and from that point on they're hooked because we just take the stress of having to come up with creative and writing the story or coming up with the ad hook the headline we do it all and it's really easy for us because we have an amazing team of writers.
Ward: [00:09:28] So when you were starting a zombies at first, was it more just kind of one off work or recurring one offs, or did you have a recurring membership kind of model built in from the beginning?
Ken: [00:09:38] Oh my God. It was a nightmare when it started. It was first of all it started with me. And then it was me and Shawn our now head copywriter and it wasn't there was no structure to this mess. This was strictly just chaos. And so we didn't have monthly plans in the beginning. We had one off ad purchases. Meaning you need a copy for a Facebook ad and you would pay us for the Facebook ad and we would write it and get it back to you. But it was absolutely chaotic because we had zero systems in place. We like it was everything was manual. If you could imagine trying to do every bit of your business through email and Paper Chasing like did a payment go through did the order come in did the creative brief come in and having to match these up when it started we had maybe one or two orders a day then one or two orders every couple of hours and then it was 10 orders. An hour, and so suddenly you have exponential numbers of emails that you have to track down. So it quickly grew to chaotic and it really wasn't a membership. And and monthly subscriptions didn't really come into play until several months into the business when we realize that that was a smart play for us because number one we had clients who were using our services regularly number two, we could discount them have longer retention of the clients and and have a better, you know relationship with these clients understand their business understand their needs and really help them. At a much higher level for a long period of time.
Ward: [00:11:24] Yeah that makes sense so as far as the initial audience to to for ad zombies it sounds like it all kind of began in 2017 with that Facebook group post right that's kind of the initial what the initial launch of customers?
Ken: [00:11:38] Yeah so if you call you know they say when a disease happens patient zero right so patient zero is day one for us was March 6 2017 when this started and that, that was the foundation that first ad from there by the end of week 1 we had, you know, a handful by the end of week six. We had at least one customer on every continent except Antarctica. We still to this day. I need a scientist in it. If you have a scientist listening to this podcast and your in Antarctica, I will give you a. Coupon code for a free ad I just got to write an ad for somebody there, but that's the only continent we don't have and so we just kept growing and growing and eventually, you know, we just became this this force in copywriting and and so it's just been it's been fun growing this this thing and it's like riding a bull it through it's insane and fun at the same time.
Ward: [00:12:38] Right. So from that initial post on Facebook that got the traction that got you those initial customers that post alone couldn't have been what kept driving traffic and new customers. Right? Was it more word-of-mouth or what was it?
Ken: [00:12:51] Yeah, so I realized very quickly that that giving and helping people was so valuable. So I started doing it at scale quickly created a website a version one website and I'm a big fan of the square space platform. So I built it on the platform. I'm that I knew at least well enough to get a version one up and running and so I built it on Squarespace and then started just having you know, put some Facebook ads out there and then I put an Instagram at out there and so slowly but surely I would dip my toe in the advertising space if testing my creative to drive sales, but also being in these groups and constantly giving value and helping people and. Coaching people in guiding them in their ads because I could tell them what's wrong with their ads that was easy for me and then I could tell them how to fix it. So it was a combination of advertising very lightly at the beginning. I didn't spend I mean today, you know, I've spent six figures on Facebook like that doesn't bother me but back then spending, you know, $10 in a day freaked me out, you know today that's nothing I can do that in five minutes.
Ward: [00:14:05] Right. So the combination of the compounding thing here was you were posting in multiple Facebook groups often. You had Word of Mouth happening from from Happy customers who sounds like they would return. Was there any other element to this where you blogging? You said there's some light advertising going on. But where you blogging or was there anything else going on that was driving traffic and customers?
Ken: [00:14:29] I really wasn't doing the best practices and that I should have but it was because I was I was really thinly stretched. And so I wasn't doing blogging at that point. I wasn't doing all of the things that our customers do and that we should be doing as a business back then we weren't doing all of those. So it was really a lot of word-of-mouth a lot of good Community positive feedback and people promoting and then what happened? People started leaving reviews on our Facebook page and the reviews were awesome and they were talking about the customer service and the turnaround and how much stress we've reduced from their lives. And so we just started to gain traction, but we gained traction at such an exponential rate. Like I look back at that time, even though it wasn't that long ago and it seems like an eternity ago because it was when I tell you how chaotic it was I was. During my days at about 5 a.m. And I would regularly get to bed after midnight. And so I was not seeing my family a lot at that point and there was a lot of strain and stress in my marriage and I'm very transparent about it because it was such a tough time, but I was so committed to Growing this because I loved it. It's my passion being able to help a business tell their story properly for whatever it is that they sell. Is for me, it's fun. It's I wake up and I eat breathe and sleep.
Ward: [00:15:59] Right. So during that initial time when you had all this influx of customers. What was it? Was it simply that there wasn't enough revenue or profit happening to hire somebody or did you just not think to do that in the beginning? You're just going off momentum or what was kinda block there?
Ken: [00:16:14] we were definitely going off momentum and at that point Sean who is now our head copywriter. He was working full-time position somewhere else was was coming home from that working in the evenings sometimes, you know, well into the night like I was working on very little sleep. It was finally at a point where we realize. Okay, there's enough Revenue here that we can do something. That Sean came over because for me as a as a business owner the scariest thing is being responsible for another human beings. Livelihood like that I take that really seriously and so I didn't want to make a mistake but we felt like we were at the right place and and it was the the time was right to do that. And then as the chaos continue to compound again, it started in March in September just a few months later. I had sent Gary vaynerchuk an email and I told him what was going on and he and I had had several touch points over the years casually and they told. What was going on and that I was really stressed out because I didn't know what to do next. And anyway, the short version of it is I wound up going to New York and having dinner with him at City Winery and during that dinner got the best advice I've ever received from anyone and at dinner. He said to me look he's as you are not an operations person. He says. You're creative and that's cool because we need creatives in this world, but you need an operations person someone who's built a seven eight nine figure business and can help you navigate the growth because and the right person will see the opportunity in front of them based on what you've built without them and jump on board. And so he suggested that I give up a 20% Equity position in the business. I said, okay, that's a great move. How do I find this person and he and his team had said, you know spend some time looking at my social profile and said look, you've got a bunch of them in your social graph, you know, all these people you just have to reach out to them and find the right fit. And so that was a Thursday night that dinner in October and by Tuesday. I had my first lunch meeting and by Tuesday afternoon I had a handshake and so that's where things really started to cook and when I say cook that's when we started to get our act together and figure out how to create a subscription model that made sense how to create recurring revenue streams how to put things in place like a real business because up until then we were bailing wire and Bubblegum.
Ward: [00:18:50] Right, right. Yeah. So for a lot of people that they'd ever even quite get to that point right where they can hire, you know, someone in operations, it's really just a lot of solo Founders out there. So I think one of the key takeaways at least I'm having from here is that in the beginning when you're first trying to get traction and get customers you found a channel Facebook specifically Facebook groups for your Niche that was resonating and that there was driving customers and then you kind of just doubled down and focused on that and then you know as more money came in the business progressed you hired operations, etc. Etc. But that beginning part I think is where a lot of people are and then that's kind of where they're struggling is, how do I even get people to care about my business how to how do I even get it? Give it an initial audience and from your perspective. It sounds like the key was help right just help people for free provide meaningful useful advice and that will naturally to people becoming interested in you would you would you agree with that?
Ken: [00:19:47] A hundred a hundred percent? And you know and I I wrote out of pressure. I wrote a book last fall and I talked about the Journey of building this company because I wanted to share the journey not because I needed to. Relive it through the written word. I shared it because I knew that it would have value to somebody else. I knew that that someone struggling someone in their 40s or 50s who felt like they were stuck in their job might get value from this and and figure out a way to grow their own business. And so I shared the journey from the beginning and I met every step. And what I did and why I did it this way and and why I think you can build a business from zero with $0 just using Facebook groups as the foundation to get the business started because if you go in with the intention of helping people if you go in with a servants mentality, right and you're not looking for anything on the back end you go with zero expectation of of financial benefit the outcome from that. Will be positive and so I say this Mantra all the time to people instead of focusing on the income focus on the outcome because if you focus on the outcome, the outcome will be.
Ward: [00:21:10] I like that and I think that that makes sense to me. So let's transition to talking drilling down a little bit into the actual pricing strategy that you have for ad zombies. I assume it's evolved over time. But what did you begin with back back in 2017 when you launch and how it sort of progressed from there?
Ken: [00:21:29] Sure pricing strategy was, you know, look as a business owner and I'm speaking to every business owner out there who's starting out? The honest thing is sometimes you just put your finger in the air and you feel the wind and you go mmm that feels right and and I knew that there was very little competition in the copywriting space. So I didn't have like a model to go after I didn't have pricing points that made sense. I also didn't know what profit and and margin look like right. I was just I was spitting in the dark and and so I so I literally said, all right. What would somebody pay to have us write a Facebook ad what is that worth to someone? Well, what's it worth to someone if that ad converts 10 times, right? If they're selling a hundred dollar product and they make $1,000. What is that worth to them how much they have to spend so I spent a lot of time and put thought into it, but ultimately had to settle it like. At a at a $29 price point for a Facebook ad well, I quickly saw the the traction from that $29 price point based on the Good Vibes. We were getting out there all the positive feedback the positive reviews and I thought okay way underpriced way underpriced. I've got a correct this because I was drowning and so I realized that my price point was too low. So I took a bold leap of faith because I knew that and I'd heard from other podcasts and books. You never want to be in the middle because they call that the deadly middle you either want to be at the top, you know, a high-end price. You want to be at the bottom a bargain price but being in the middle is kind of a dangerous spot to be so I bumped it up and I said, all right, how do I take this from $29 to something that I can can I make money on on $49 ad copy? Well, let's try. And so I immediately bumped it up to $49.99 so 50 bucks and I'm like hmm it didn't change the volume people were still buying but I felt that that was the right place to be now it's funny I did that based on gut and I do a lot of things based on my gut here we are a couple of years later and I still feel that that was the right move and still is the right price for one off then we had to create. Plans subscription plans. Well, you want to reward your subscribers, right? You want to give them a discount? So we started to have to figure out what a model looks like for discount if we have monthly plans that are that are you know, a Tad's 15 adds 25 ads unlimited. What does that look like? And so we had to start figuring out what the value propositions are. Do they do they get a discount and some additional fees off of other things, you know, so it evolved over time. At $49 came so quickly it was in the over the course of a few weeks that we went from nothing to $29 to $49 and that price point has stayed for individual add purchases.
Ward: [00:24:37] Gotcha and so for for the monthly recurring purchases where did that price point start and where is it at today?
Ken: [00:24:43] So what we did is we had to start with a foundation. We knew that an ad cost $49. Well, if somebody needed 10 ads that would be 499 dollars and so 500 dollars. What type of discount would we need to apply to that to make it make sense and so we back to town to a Tad's and then we started just chopping the numbers until it made sense financially so that we weren't losing money we were making money and so we came up with our $299 a month price point for the eight ads and but we knew that not everybody needed a dad's we knew that some people needed more so then we created our next tier our basic plan and we did some calculations there. We went through the same process multiple times. And each time. We were trying to figure out how to shave a little bit more how to add a little more value and then the Magic The Magic occurred. In all of the plans because of customers clients made the request and they said hey, I'm on the 8th adds a month plan and I love the plan, but I'm not using all of my ad credits every month. Is there a way that I can roll those over and we I had no idea how we were going to do that. That's like, you know unicorn dust and fairy things. I don't know how to make technology do things like this. But operationally Brandon did and so we started experimenting with rollover credits. And so now anyone that's on a plan has 30-day roll over credits. So if they don't use all their credits in any given month, it rolls over into the next month and every 30 days they drop off so it's it's the plans have gotten better and better and and today we're going to be adding a new plan. And so we're always modifying them based on client to me. And we let our clients dictate what the plans look like based on their needs.
Ward: [00:26:41] Right, so it doesn't sound like you've done some deep statistical analysis or survey. It's been more on kind of gut feel and feedback from from your actual customers.
Ken: [00:26:51] It's been on gut feel and feedback and it always is and here's why, not and this is my belief too many business owners. Don't listen to their gut they listen to the noise in their head and they listen to the noise of the people around them. Now don't get me wrong statistical data is critical knowing your margins knowing if you're profitable knowing if you're charging enough for something or not charging enough for something is important, but your gut. Is so valuable and telling you you're doing it the right way or the wrong way trust your gut more because when you trust your gut more very seldom with your gut let you down the distraction the noise the the voices in your head the conversation will let you down every time because that's the doubt. That's the stuff that Creeps in and messes up what your gut is trying to tell you to do.
Ward: [00:27:44] Yeah, I like that. I think let's leave it there can could you let folks know where they can learn more about you?
Ken: [00:27:50] Oh sure. It's ad zombies 80s the OMB IES add zombies.com. And if you want to follow us facebook.com slash add zombies same on Instagram LinkedIn you name it and I'm pretty much all over the brand because I started it and I love it, and it's my passion.
Ward: [00:28:07] Awesome. Well, thanks again for taking the time Ken.
Ken: [00:28:10] Thank you.