#512 WP-Tonic Show With Special Guest Jim Huffman of growthhi

Grown two startups from idea to $10M+ in sales. Spent over $4M on Facebook & Instagram ads. Author of The Growth Marketer’s Playbook, #1 new release on Amazon (Pushing Seth Godin off the #1 spot for 72 hours.) Startup mentor at Techstars, General Assembly, and Sephora Accelerator. Lead workshops at Fortune 500 brands like FedEx, Hot Wheels & Intuit. Wannabe coffee snob, aspiring NBA ball-boy, and a #girldad of two. Jim Huffman CEO of growthhit.


Johnathan: Welcome back folks to the WP tonic show its episode 512. We’ve got a great guest; we’ve got Jim Hoffman with us from GrowthHits. It’s a growth agency. It’s one of the leading agencies in that particular niche sector. So, Jim, would you like to quickly introduce yourself to our listeners and viewers?

Jim: Absolutely, yeah. I’m Jim Huffman. I’m the CEO of GrowthHit. We are a growth marketing consultancy focused on one thing that is converse rate optimization. And so, we like being kind of your outsourced head of growth, but yeah, I’m out here in Seattle, Washington, but yeah, excited to be here.

Johnathan: Oh, thank you. That’s great that you agreed to come on the show to Jim and I’ve got my great co-host, Adrian. Adrian, would you like to introduce yourself to the listeners and viewers?

Adrian: Hi everyone. My name is Adrian. I am the CEO and founder of Groundhogg. We help small businesses launch their sales funnel and grow their list and scale their business.

Johnathan: And before we go into the main part of the interview, folks, I just want to mention our great sponsors. Our main sponsor and they’ve been sponsoring the show for over a couple of years now is King Star. King Star only a WordPress hosting company. What do you get from King Star? Well, you get some of the best technology, you get a fantastic UX interface, you get Google cloud hosting, and best of all, you get 24/7 support from one of the best support teams in WordPress hosting. I can honestly say that they go above the norm when it comes to their support. And you know, you can waste a lot of time if you’ve got a technical question and you can’t solve it yourself, you can waste a lot of time with hosting companies that won’t happen with King Star. So, if you value your time, when you value your client’s time, I suggest you go over to King Star have a look at their products, and maybe buy one of their packages for yourself or for your clients.

And the main thing is telling them that you heard about King Star on the WP-Tonic Show. Our other sponsor is a real friend of the show. It’s WP Fusion. Now, if you’re looking to put Groundhog, any of the SaaS space CRMs like active campaign, drip, there’s a host of them or like I say, Groundhog, you really do need WP Fusion. It’s an amazing product if you or your clients, or into modern marketing and automatization, and you want your WordPress site to able to flawlessly communicate with these modern CRMs, you need WP Fujian. Go over to their site, look at their packages for what they can do, and the amazing power, they are amazing value. Go and buy them and like the same, go and tell them that you heard about WP fusion on WP tonic. So, into the main part of the interview. So, Jim, first of all, what would you say grow [inaudible 03:30] agency? Can you give us a quick synopsis of precisely what you do and why you got into that particular area?

Jim: Yeah, it’s really hard to manage expectations when you throw growth in front of your name right? So out of the gate, it’s a little difficult, but yeah, I think a growth agency, a growth marketing firm, they’re trying to kind of put a spin on traditional marketing where it could be doing full-funnel marketing, which is kind of how we look at it from top of funnel or the top of the funnel to bottom of the funnel. It can also be you’re integrated into the product, so your engineering growth into it. But the way I think about it is, you kind of function as an outsource head of growth, where your main KPIs are aligned with the business leaders where it’s about top-line sales, it’s about top-line customer acquisition. And so, that’s how we think about is really kind of being one on one with a CEO or CMO. And how I got into this, I mean, my career actually started in finance. I was at a small investment bank doing M&A deals, meaning I just looked at spreadsheets and would never talk in meetings. And it was really fun because I would see people selling these businesses, growing them and I was like, man, that is fascinating. I would love to be on that side of the table.

And so, this was a time that startups were kind of really exciting and coming up, I was like, I just need to go jump on one that I’m excited about and learn everything I can. And as I did that, I am not super technical, I’m not a developer so that means you kind of get thrown into the marketing role. And so, I got very lucky in that I was on a couple of startups where it was like early employees knew nothing, they were growing and quickly like, oh, we need people to figure out eCommerce, figure out marketing SEO and I would just dive into that task. And from that, I was able to learn some skills and get connected with the few VC firms. They’re like, oh, we loved what you did here, would you talk to the CEO about what you did? And that led to some small one-off consulting gigs. And I eventually hit a crossroads where like in the mornings I was waking up before work, doing consulting work, nights and weekends, I’m doing consulting work. I’m like, I would like to have a life and maybe like some free time, I should probably make a decision what I want to do and so, about almost four years ago, I kind of made that decision to go from working for a startup to go all-in on kind of the consulting side of things.

Johnathan: Yeah. That’s great. Great. How about you Adrian?

Adrian: Love to know how big your team is and you mentioned you want to have a life. So, I imagine that you have some help. One of the biggest things about being an agency is they’re often stretched way too thin in terms of resources, time personnel, et cetera. So how do you manage to be the growth guy for so many companies?

Jim: Yeah, that’s a great question. It’s funny because starting out with an agency, I had the title of CEO, which was just a complete lie because it’s like I was doing everything. I was copywriter, I was ad optimizer, I’m project manager and just in the past year was I able to finally fire myself and get specialists that can do the job significantly better than me and focus on working on the business. But so, we are at seven people hiring two right now, looking for two kind of CRO analysts to come in. And so yeah, that was the biggest move for me because the really hard thing with consulting is like, as an employee, you want to go above and beyond do whatever it takes to get results and that’s pretty simple thinking. But as an agency, that idea of going above and beyond can actually hurt your business, hurt your margins, and hurt other clients.

So, for me, I really struggled with that because my default was, I’ll just work my tail off for every single client and get amazing results, but you have a cap. And so for us it meant being very clear on what we do and what we don’t do, so that way within what the client cares about and what their expectations are, we can over deliver and in things that we don’t do, we can just say, hey, we don’t do that, sorry that’s out of scope. So for me, like getting a team to do some of the things that I was doing so I could work on the business and then aligning with our scope, have been the biggest things to have a life and actually scale the business because it makes it much less custom whenever you’re able to have a fine SOW, statement of work, that’s pretty consistent across clients.

Adrian: I’d love to know a little bit about the way that your growth agency works because typically like I used to be in the agency business myself and my software specifically geared to digital marketing agencies and so I work a lot with this marketing agency. And they all have the exact same problems or they don’t charge enough, they don’t have enough time and et cetera, the list goes on and on and on and on and it seems like you’ve been able to solve a lot of those particular issues. What’s the way that you work in terms of monetary investment on behalf of the client? Because there are a thousand different ways to do it. Do it hourly milestone full project upfront half and half. What’s kind of like the sweet spot for all of this digital marketing work that you do?

Jim: Yeah. That’s a great load of questions. We could talk for 10 hours and then I’d have a million questions as well, I’ve learned all this the hard way. But one thing that I’ve found for us if we get the right client on the right tech stack at the right stage of life, projects can go extremely well. When you have the wrong client at the wrong phase, it is not going to work and what’s super counterintuitive is the more people will pay and the bigger they are, the actual less demanding they are. Some of the smallest clients with the smallest budgets can be the most demanding and for me, I didn’t really learn that until going through that. So, you have to understand what are your points of leverage to scale an agency when it’s people-based? So, one is always doing the same type of work or two always working with the same types of industries clients or tech stacks.

So, if you can do those things, you can productize some of your services while still making it custom for them. And whenever you’re able to do that, then you can make great SOPs to train people and do those things really well. So, for us right away, we need to know, is this a good client for us? And for us, our sweet spot is someone that’s just done like a B round of funding, ideally, their consumer base e-commerce and Shopify is ideal because their tech stacks are very easy to plug into. And also, for…

Johnathan: Jim, I must interrupt. You just swore there. You just, you just mentioned Shopify, it’s WordPress my friend we’ll call it.

Jim: Well, I will say wooCommerce is like our other go to and I will say we do some big commerce…

Johnathan: I’m only kidding, I teased Jim, I’m sorry.

Jim: I apologize. Yes. But it’s like the eCommerce space in general, wooCommerce, Shopify, are ideal where you have kind of a nice plugin and app ecosystem cause with CRO e-commerce is very black and white, if you’re good or not. And so…

Adrian: So, they make money if you don’t make money.

Jim: Exactly. Like lead generation can be good because there’s high transaction volume, but it’s not as clear of a picture to a revenue ROI. And so for us, if we can one qualified the clients, make sure they fall into that sweet spot and in the back of our mind, we’re like, hey, we know we’re going knock this one out of the park because they have over a hundred thousand sessions, they have a good AOV and they’re an eCommerce site we believe that in nine months they’re going to be really happy. The other thing is, so it’s like qualifying the clients, knowing it’s the right tech stack, knowing that it’s the industry you want, the other thing is we’ll delay starting until we have everything going because the first 30 days will make or break the retention of your project. And most agencies, you do so much upfront your margins aren’t really good until three, six, nine, 12 months in, depending on what you do. And so, if we can start and we’re just getting a test live within the first week, we’re launching ads in the first week, we’re giving research in customer intelligence within the first two weeks, the client’s first impression is like, wow, this team gets it. So, if we can set all of that up, we’re going to have good clients that have a great lifetime value so those are some of the things we’re thinking through.

The other thing is like upselling with other services that you have, right? Because we anchor in being your outsourced head of growth, doing CRO, but really that’s customer intelligence. We get so many insights there that we can apply to our ads team because we also do social ads into our email automation team. So those are ways to also upsell because we’re already meeting with these people once a week if we can bake in other services and increase that average order value or monthly retainer then that’s helpful for margins.

Adrian: You mentioned that you work, you try to get companies that have funded with a B round. Now that might be lingo, not entirely familiar to some of our audience. So essentially for anyone who doesn’t know if you’re taking funding, you usually take a C round, which is you’ll get a million dollars from some VC or other, and then you’ll get taken A round which is probably multiple VCs with multiple millions of dollars and then if your company doesn’t implode after that, then you might be able to make it to a B round and all of this explained in a lovely show called Silicon Valley which is a great sitcom. If you haven’t watched it you should. But I’m curious since you’re kind of like operational at that echelon where big money is at stake, a lot of agencies are starting to consider the kind of like the work for shares or the work for ownership model and I’m curious if that’s ever something that you’ve explored where instead of taking a retainer or an upfront payment, you said, hey, listen, you know, we see this company going far, give us like 3% and we’ll just take care of it.

Jim: Yeah. It’s something that the branding agency, Red Antler and Paper Crane Factory had done pretty well and it’s very interesting. I’ve done it with two and for one it has worked out very well, for one it’s still to be determined. And so, the issue there is if you’re taking shares, who are you giving shares to? Is it to me, the owner? I’d like to share it with my team who’s actually like doing a lot of the work so you almost need to make a separate entity where they get ownership and then you have a vesting schedule there as well so it gets a little complicated. The other component that is difficult is breaking up, do you still get a retainer? Is it a discounted retainer? And how does that work? So, at first, I was really excited about it, but as I got into the nuance, I’ve struggled with that structure and also, it’s hard to put food on the table with equity shares. I can’t go to whole foods and buy bread with equity and so that’s the other component. But it is something that like we’re very interested in and we’ve done lightly. One other thing is, and this is going off on a tangent, but it’s this buy and build model. Like if we’re such a good growth agency, why can’t we grow our own things? Whether it’s incubating an idea that we grow or acquiring a plugin or a Shopify site or wooCommerce site that has…

Johnathan: There you go, thank you [inaudible 15:38]

Jim: That has some traction, but hasn’t done some of like the kind of table stakes things we believe should be done. But yeah, I think it’s a model that is very interesting, it’s a matter of how you can also compensate your team is one thing that I kind of struggle with, but yeah, it’s, it’s interesting.

Adrian: You quickly mentioned that the question, why haven’t you gone and kind of acquired to something and just done it. I know if you’re familiar with Ryan Deiss, he’s got his survival blog thing that he’s heavily invested in and his team does a lot of the work for, have you ever, is there a reason why you haven’t done that or is that something that you’re interested in?

Jim: Yeah, I think that’s a fascinating approach. It’s, it’s kind of on the long-term roadmap. I think like a lot of business owners, I get shiny object syndrome where it’s like, oh, we should do that, we should do that, we should do that and my CEO and partners are really good at this they kind of reigning in like we need to focus. And so, we have some pretty aggressive goals with the consultancy. It’s like, let’s focus on that, let’s get that and get that machine going and then we can kind of go on to the next thing. And so yeah, I love that approach. Why I haven’t done it is not enough hours in the day I guess you could say, I keep trying to [cross-talk 16:57].

Adrian: Typical agency problems.

Jim: Right?

Adrian: Not enough people, not enough time.

Jim: Yup, exactly.

Adrian: Yeah. And it’s a lot more difficult to say no when you’re the customer yourself, right?

Jim: Yes, exactly. And it’s like, how do you as an agency, what is your risk appetite like as you’re making money and building up your cash reserves, how much burn do you want in the bank to pay for your team for three, six, nine months versus investing in projects and what not? So that’s something we’re always kind of working on. Because cause growth sucks cash. As we’re looking to hire more people, our burn rates are going go up even more, right? So, it’s a constant balance.

Johnathan: Well, my own agency, I don’t actually directly employ anybody there. My call team is all on retainers, monthly retainers…

Jim: Nice.

Johnathan: And my call team has been with me for about six years and then I have a project manager and then I have two to three other developers and a designer. The designer is on a retainer as well, but I don’t directly employ anybody in my team, but most of them have been with me between three and six years, Jim.

Jim: Yeah.

Johnathan: So, I think that’s something because it really does help with the cash flow problem. And also, my team is half is offshore and half is based in America so it’s a distributed company. We’re going to go for our break and we’re coming back and I think it’s been a great discussion so far, but I’m going to be asking Jim when we come back basically is the mindset of a freelancer because when you become an agency, I think you’ve got to be much more focused about how you get the right type of clients than when you’re a freelancer. When you’re a freelancer it’s very important but I think there is differences. I’m going to be putting that question to Jim when we come back, we’ll be back in a few moments. Thanks.

We’ve had a great discussion who Jim we’ve been talking all things agency. So, as I saying in the first half of the show, when you’re a freelancer I think you could be working for an agency and you’re doing some sideline projects, that’s if the agency will allow you to do that. You might be working for a university or a medium to large company and you’re doing side projects, right? Or you could be a freelancer and you’re based on your reputational, the niche and then you get to this stage and you think, oh, I want an agency. But I think one of the big differences between freelance and agency and I might be wrong here is that when you become an agency, you’ve got to be a lot more aggressive about getting clientele and processes that can reliably fill the funnel of new prospects than when you’re a freelancer because you’re going to have people on retainers or you’d be paying people’s salaries. So, you’ve got to have a much larger flow of potential prospects. First of all, would you agree with that? And how do you build those mechanisms that fuel the beast by basically Jim?

Jim: I totally agree if you’re trying to actually build an agency or business where you remove yourself from having to do every job and be a true business owner, then you absolutely need to focus on that. Whereas like I think the freelancer yeah, it’s more of just managing your time in your own rate and in your own kind of workflow. And so I don’t know for me, like one thing that I’ve kind of worked on, is as I’m like building the business, trying to figure out what are those points of leverage to actually scale and grow? So, like having SOPs knowing exactly where your workflow is huge. And I think early on, you are kind of nervous, you’ll take any business. Like that’s how I was at least I was always paranoid that I’d be fired by everybody so I had the yes syndrome where I’d say yes to everybody, but the truth is you need to understand your margins for every single client and you’ll start to realize, wow, we’re actually not making money here, we’re losing here.

Wow, when we take on this type of client and just do this offering, we have great margins and by the way, the client is extremely happy. You have to go through with a fine-tooth comb on those things because once you understand your margins and your unit economics, then you know how you can scale and grow the business. So, we do a monthly [inaudible 22:43] or weekly update where we’re looking at, especially our developers and designers, how much time they’re spending and where it’s going. Because especially when you’re doing development work for these CRO tasks, they’re very time consuming and expensive. And so, we kind of have a limit with clients that they know about just to make sure we have a healthy and sustainable business.

Johnathan: That’s great. Over to you Adrian.

Adrian: Let’s talk about since you’re a Shopify and wooCommerce and eCommerce growth expert. I’d love to know where do you start? So, let’s say an eCommerce comes to you and they just built this store and it’s very pretty and they come to you. It’s like, but we’re not making any money for whatever reason. I’d love to know kind of like one of your go-to strategies, like, well, obviously, you don’t have this on your site as soon as we deploy this, you’re going to see X amount growth just immediately because we’ve done this so many times. Is there a strategy like that, that exists? And can you tell us a little bit about it?

Jim: Yeah, I wish there was like a one size fits all solution for that. I do have some best practices as everybody does, but so what we do is we do two things very quickly and one of them, most people always ignore. So, we do quantitative analysis, which everybody does. We’re mapping the funnel, like okay, homepage collection, page, product detail, page checkout, where are the drop-offs? That starts to expose some things and then we segment that based on traffic source, mobile desktop, whatnot. So right away you have questions like okay, well, they’re great at getting traffic from paid on mobile, but wow, everyone’s abandoning.

And then here’s the thing that I think everybody ignores is doing the qualitative analysis. They know what’s happening on the site, but they don’t know why they’re not actually being proactive and talking to their customers. So, we’re doing eMaps, we’re doing scroll maps, we’re being session recordings, all to get at a very simple question of the people that are abandoning, why are they abandoning? So, we started doing voice of customer research, like, okay, what did you not find today? What were you looking for that you didn’t get? And right away, you start to understand what that pain point is that is not being addressed.

And usually, we can break it up until like three or seven categories. And those insights that you get are gold because it’s like, wow, they have issues with pricing or sizing or fit, or they’re still not educated on the product when or how to use it. And once you understand that those insights are gold to apply to a landing page, to an email campaign, to an ad campaign. So those are things that we want to get at whenever we’re first starting. I mean, beyond that, we’re definitely looking at like some usability tasks or looking at image quality reviews, social proof, but the quantitative and qualitative stuff, that’s usually where we can get big wins.

Adrian: I want to know about the discount code. I want to know because you go to every single big eCommerce site and the first thing that pops up is, 10% email sent. I’d love to know your insight from working with larger stores and most people are familiar with…

Jim: Yeah, that you go to its site, it’s like click here. You’re like batting away every pop-up with discounts and cookies [inaudible 26:10] yeah, it’s a problem. So especially if you’re like a premium brand, well, first it’s like right away, you’re educating people to look for discounts, which is that the right way to get people excited about your product? For me, that’s a little worrisome because then you’re like in this price penetration mode and you’re playing, it’s a race to the bottom if you’re doing that so that’s definitely an option. I mean, other things that I want to do is like, if I can, I want to sell people on the aspiration on the problem we’re solving, our point of differentiation, if you have a good email nurturing campaign, popups, as annoying as they are and easy to hate on, they are very good.

But usually, I would like to do that in the form of, you know, a content upgrade, give them some value. It’s really annoying, but giveaways over $500 really work. I want them to lose every single time, but it’s the best way to get high email conversion rates. But discount codes, if you can build it into your margin are good But I actually like doing them more as an exit-intent at a high intent page, like a checkout or a product detail page, as opposed to just doing a spray and pray approach, right when people come to the site.

Adrian: Is there any… you have any measurable…

Johnathan: Hi Jim, I just want to slightly interrupt because I actually like to expand that what you just said about bonus content, I’ve just seen in the last five minutes of the show I like to keep on the agency subject. We will be coming back to about the eCommerce because I think it’s a fascinating subject, but what I was going ask you is we’ve got the freelancer, so we’ve got the agency, but you mentioned at the beginning of the show that finding a niche, finding area. So, you’d like with my own agency, we build learning management systems for universities, internal training and we build membership websites, that’s what WP-Tonic does. So, all the things you pointed out that helps with margins, repetitively, you know what you’re taking on because you’ve done it a few times before. So, I think in 2020, this is really important. Can you expand on that a little bit?

Jim: Yeah. It’s funny. I think I don’t know; I made the mistake like first launching an agency where I try to be everything to everybody like, oh, we’re a growth marketing agency, yes, we’ll do that. And you quickly realize that’s not a good way to go. And it’s funny, I heard the advice all the time, but until I put it into practice that I truly understand that like the phrase, what like the riches are in the niches, as far as, yes, you’re going to be saying no to a lot of things and that can be really hard. But when you say yes to a few things and you find a client that fits into that sweet spot, your confidence goes up significantly. You feel much better about selling them or closing them because you know you’re going to do good work and your rates can go up, your lifetime value goes up because of that.

And the thing is like, there are so many talented people coming on as freelancers and agencies and unless you can capture all that talent and really be this full-service agency, it’s going to be hard to be everything to everybody. So, I really think it is about like niching down and going all-in because as you start to understand the total addressable market that you’re probably going after with your niche, it’s much bigger than you realize. And depending on what your goals are, you don’t need to capture even 10% of it to hit your revenue goals. And so, if you can be very clear on like what your business goals are from revenue perspective and you start to do the math, it’s like, wow, actually, like this is very obtainable by niching down and hitting X percent of our market like we can do this. And so, I think that’s an exercise every agency needs to go through when they’re really trying to figure out what are we here for and who are we trying to serve?

Johnathan: Yeah, just to wrap up before we wrap up the podcast show and hopefully Jim can agree to have a bit more of a discussion in our bonus content, just to wrap up is obviously this is a WordPress very focused show, but its digital agency WordPress. So how important is WordPress on for your team and in your consciousness or is it just one of many tools? How would you place WordPress connected to your agency?

Jim: Yeah, well my, my personal blog GrowthHit and GrowthHit are both built on WordPress. For me, it was kind of my entry point into getting somewhat technical as, like a finance person and marketer kind of banging around on building my own WordPress site, like playing with plugins, trying to code stuff myself. For me, I think anyone that’s in the world of digital marketing, technical being technical has to be a component of that, whether it’s frontend, backend, or getting into design and UX. But you’ve got to figure out what is the platform that’s going to help you kind of practice them. And for me, it’s been WordPress and I really enjoy the kind of ecosystem around it because there are so many thought leaders, there are so many tutorials, there are so many plugins that allow you to do whatever you want. And so, I like our tech stack to build like this seven-figure agency is like very simple, but the core of it is WordPress.

Johnathan: Great to hear that, Jim, you have to come back on the show. I think the half-hour you could always tell when it’s a good interview and a good you’ve got a great guest because the time you’ve got so many more questions you want to ask, I’ve got some questions I’m going to be asking Jim, I’m sure Adrian is ready with some questions. So, you can watch that on the WP-Tonic website and YouTube channel, the bonus content, and the whole interview. But for now, we’re going to wrap up the podcast part of the show. Jim, how can people find out more about you and your agency?

Jim: Yeah, absolutely. It’s just growthhit.com. My email is jim@growhhitt.com and then I’m on Twitter at jimwhoffman. I post some interesting articles that I find and the occasional baby pics. So yeah, I’m around.

Johnathan: That’s great. And Adrian, can people find out more about you and your great product GroundHogg?

Adrian: So, if you’re an agency and you are looking to help a business with their digital marketing sales and marketing automation, then you can go to Groundhogg with two Gs .io. We have lots of proven digital marketing and sales products there that will help you do just that.

Johnathan: And I just want to announce we’ve got another webinar in August. It’s going to be the first Tuesday of August, which I think is the fourth at 9:00 AM. We got Chris Bogar of LiterLMS who’s going to be our guest. We’re going to be talking about all things LifterLMS. We’re going to be talking about LifterLMS 4.0, one of the biggest updates that they have done recently, we’re going to be talking about LifterLMS groups. We’re going to be talking about the best practice of building a course using LifterLMS. It’s Going to be a great webinar with Chris, but I can say going to be totally free.

And you’re going to have the ability at the end to ask Chris any question about LifterLMS, it’s going to be a blast. Chris is a friend of mine. So basically, you can go to the WP-Tonic website and right in the top menu, there’d be a free webinar button and you can register on there like I say that’s going to be on the first Tuesday of August, which is the fourth at 9:00 AM Pacific Standard Time. Hopefully, you’ve enjoyed the interview. Go over to the bonus content, I think it’s going to be a great conversation that we’re continuing. We’ll be back next week folks. Bye.


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