How Matt Shields Built A $400K/mo SMMA | Ep #673

Are you looking for motivation to get your agency off the ground? How has your client acquisition strategy evolved since you started? Have you tried building client communities to foster a competitive spirit that will lead to client wins? Today’s guest is a young entrepreneur who turned to marketing as a teen knowing college just wasn’t for him. He focused on learning and building a solid base and now has 400K/mo SMMA and has purchased another two agencies. He and his partner understand their strengths lie in getting businesses off the ground and recognizing potential for growth in partnerships. However, they’re still figuring out how to scale to eight figures. Tune in to learn from his inspiring journey and his tips for successful mergers and acquisitions.

Matt Shields is the founder of Estate AI, an agency that seeks to shift the paradigm for realtors who rely on referrals by teaching them how to run a business with consistent opportunity flow.  Matt is a young agency owner who has achieved impressive success in a short period. His determination and entrepreneurial spirit led him to purchase his first SMMA course at just 17 years old. Now, with over $425,000 in monthly recurring revenue, Matt shares his unique approach to acquiring agencies and achieving high profit margins.

In this episode, we’ll discuss:

• Matt’s client acquisition strategy.

• The $2,500 ad that got them a $1,000,000 win.

• Building communities for client success.

• Top tips for buying and selling your agency.

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Sponsors and Resources

E2M Solutions: Today's episode of the Smart Agency Masterclass is sponsored by E2M Solutions, a web design, and development agency that has provided white-label services for the past 10 years to agencies all over the world. Check out e2msolutions.com/smartagency and get 10% off for the first three months of service.

Outgrowing Self-Doubt to Catalyze Agency Success

At age 17, Matt felt school wasn't the right path for him and wanted to try a different entrepreneurial approach. He purchased a $597 marketing course that taught him key skills - sales, outreach, onboarding customers, and Facebook ads. However, as Matt took his first steps into entrepreneurship, the biggest hurdle had nothing to do with practical business tactics.

In that crucial first year, Matt was forced to face deep inner fears - the fear of failure, rejection, and not being good enough. He realized he needed to work extensively on his own psychology and overcome limiting beliefs about his young age and ability to successfully build a business. Confronting these mental roadblocks proved just as important as mastering the outward skills.

Although Matt eventually reached a good place and found success, in his view he never fully overcame self-doubt. Getting too comfortable would mean stagnation, which he wanted to avoid. While he conquered early fears around sales and now thrives in that area, he continues to face the challenge of overcoming fears of leadership and leveling up his mindset.

It's a constant process of self-improvement, because as a business grows, so too must the entrepreneur grow personally. Most recently, Matt has focused on becoming disciplined enough to consistently take action on the hard things, regardless of his passing feelings or mental resistance.

The Evolution of His Agency's Client Acquisition Strategy

Matt scaled his first agency through the strategic use of free trials. To attract initial clients, they leveraged LinkedIn automation, Facebook direct messages, and cold email outreach. This approach worked particularly well when they started emailing gym owners to offer free trial services. They completed around 70 free trials over 6 months - but only for prospects they knew could convert to paying customers. After that 6-month ramp-up period, they were generating $20,000 in recurring monthly revenue.

This early method provided valuable entrepreneurial experience. However, Matt's agency has since evolved its approach to client acquisition. They now rely on paid advertising and use the same systems they sell to run their own growth campaigns. This strategy rocketed them from $10,000 per month to $150,000 within just 3 months, hitting $350,000 in monthly revenue by their first year - all through paid ads.

To fuel this exponential growth, Matt and his partner reinvested all profits into paid media spending and building a robust sales team. They also recognized offering a compelling guarantee in their ads was crucial for conversion. Rather than innovate from scratch, they analyzed competitors' guarantees and modeled their own to be slightly better than existing market offerings. Matt believes that SMMAs don’t need to innovate, just pay attention to what works and do it better.

Their simple but realistic promise - "10 listing appointments in 6 months for realtors" - resonated powerfully with their target audience. This honed, benefit-driven guarantee helped attract a steady stream of new clients. However, Matt cautions that overused or unrealistic guarantees can become saturated and erode trust over time when not thoughtfully implemented.

A $1,000,000 Win from a $2,500 Paid Ad

According to Matt, the agency’s most successful ad was sparked by this philosophy of “paying attention to what works and do it better”. Imagine a fun, catchy music video that racked up millions of views and shares for them. For Matt's agency, that viral sensation was worth a cool $1 million in new business - all off the back of a single $2,500 ad spend!

It was a stroke of brilliance sparked by a clever HVAC ad Matt discovered. He immediately contacted that production company with a request: "Can you take this same awesome concept and adapt it to the real estate niche?"

One week and $2,500 later, the magic arrived - a fresh, industry-tailored spin on the original video that immediately resonated and took off like wildfire.

By keenly observing what's crushing it, repurposing ideas executed extremely well, and layering on innovation for further gains, he unlocked exponential success, which underscores the importance of truly understanding your audience, leveraging existing momentum cleverly, and constantly elevating your approach to stay ahead of the pack

Building Communities for Client Success

Scaling so fast, it’s fair to assume that Matt’s agency had a hard time combating churn. He does admit in the beginning the agency was not securing many deals for their clients. Despite this, clients were still happy and satisfied, a trend he also observed in his first agency acquisition. This did change a bit after the expansion of the sales team, which meant the agency’s founders stepped away from sales. To address this new low, Matt and his partner created a client community modeled after Alex Hormozi’s client mastermind concept. By bringing clients together, providing coaching, and inviting experts, they aimed to foster a competitive environment that motivated them to excel and achieve success.

The implementation of the client community proved to be a game-changer for the agency. The competitive nature of realtors within the community sparked a desire to outperform each other, leading to increased effort, dedication, and ultimately, success.

Furthermore, Matt emphasizes the role of a free Facebook group in building this community. He and his partner purchased an existing Facebook group within their niche, which had 8,000 realtors. This acquisition proved to be a valuable resource, as it provided a platform for interaction, engagement, and the opportunity to showcase their expertise. The free group served as a stepping stone for potential members to become part of the main paid community, as they were already familiar with the agency's values and offerings.

Most recently, Matt has improved by leveraging industry expert coaches. Recognizing his own limitations, he pays experts to advise clients directly. This provides high-quality guidance while ensuring his team gains deep real estate knowledge, significantly improving account management.

Lessons Learned from Early Mistakes in Community Building

In the very beginning, Matt and his team would keep their community members engaged doing eight calls per week to talk about strategy and progress. However, he now sees they were overdoing it. It was one of those early mistakes he now takes as a lesson learned. Rather than only giving people the best, the calls started becoming diluted.

Bumping up the number of calls offered resulted in a decline of their show rate. Clients didn’t have the time to show up for so many calls per week and didn’t know which ones to prioritize. Instead, make sure the quality is solid and you’ll keep people coming back.

Another early mistake he’s learned from was not establishing clear core values from the get go. He now sees the importance of being firm and upfront about the community's values, and giving potential members the option to opt out if they do not align with those values. This approach not only filters out individuals who may not be a good fit for the community but also attracts like-minded individuals who are eager to be part of a group that shares the same values.

The Top Tip for Buying and Selling Your Agency

Matt and his partner have acquired two agencies by leveraging their expertise and reputation and recognizing their limitations. With a respected reputation within a specific group of people and his partner’s coaching company adding to their perceived value, they’ve managed to draw people and sell their vision for the partnership.

For their first acquisition, it was difficult to come up with a valuation since the agency had been around for less than a year. They relied on a multiple of one-time EBITDA, although Matt admits lacked knowledge in the area and trusted his partner to make the decisions. Nowadays he would just bring in a broker to provide a legitimate valuation.

He’s since also learned the importance of legal agreements and the role of lawyers in creating these documents. In their initial partnership, they created their own agreements. However, Matt now recognizes the need to involve a mergers and acquisitions lawyer to ensure that the agreements are legitimate and protect all parties involved.

For the second acquisition, Matt met an agency owner who had a lot of potential but seemed stuck in his growth, making only around 10k a month. That owner wanted Matt to be his coach, but he would only consider getting involved with his agency as a partner. They eventually cut a deal and the partnership began with a revenue-sharing agreement and phantom equity, which eventually evolved into a flat retainer and phantom equity. This partnership proved to be successful, with the agency's revenue increasing significantly under the speaker's guidance.

Pro tip: When it comes to taking phantom stock in a partnership deal, remember that sometimes small business owners change their minds when the business starts to grow and claim less access for you under the guise of it “just being a phantom stock”. To protect yourself, make sure to always get a lawyer. It's going to cost you more in the very beginning, but it will protect you later on.

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