Secrets to Scaling an Advertising Agency: How Peter Tams Took Clever Digital to $10M/Year

Welcome to out-of-scale agency. I'm your host Jordan Ross, alongside my co-host, AJ Cassada. And on this podcast, we are going to help you scale your agencies to eight figures and beyond. Collectively, we've worked with thousands of businesses, helping them add hundreds of millions of dollars. I myself are an eight-figure portfolio and have built this podcast to help you learn the lessons faster so you can grow your business without all the headed. Thank you for tuning in. Now let's begin. Only 5% of all agency owners hit a million dollars. Only 4% of agency owners hit eight figures. Today, I have Peter, the founder of Clevver Digital Marketing Founder and co-founder and CEO. And I met Peter this year and I was really struck by his level of sophistication. And it was super clear this guy thinks and they'd figure level. Like when I meet someone that's doing six or seven figures and I meet someone doing 10 or 20 million, it is completely different. Like it is very obvious who's doing eight and who's not. And in this conversation, I wanted to bring him on because it took him five years to go from quitting to eight figures. It's an amazing timeline and I want to extrapolate so you guys can learn how you could also do the same. So Peter, first and foremost, thanks for coming on. And anyone that doesn't know you or has never heard of Clevver Digital Marketing, who's Peter, what's your agency do? Well, first of all, thanks for having me on. A little bit about me because I'm really not that public on LinkedIn or Instagram or any social medium. Best type of CEO, right? Yeah, that's right. That's right. I mean, you could see a few YouTube videos from like two and a half or years ago, but I advise you not to look at those videos because I look back at it. I'm like, those videos are a little bit cringe. But yeah, I'm the COO. We don't have an official CEO of the organization yet. It's me and my business partner. We started back in 2019. For the first two years, it was still working a full-time job. We went through COVID. So when we look at the growth of the company, we really start it when we quit our jobs and we're dedicated to the growth of the organization, which was the start of 2021. Unbelievable. And specific services you were offering to your clients, just so we know contextually for the people listening. So in 2021, if you could think of any industry or sector, we would work with that industry or sector. We were in T2C. We were in the retail space. We were working with cosmetic retail fronts that were across Canada. We were working with a pizza chain, beauty. You could really think of any industry and we were working with them. And beyond just paid media, which is what we specialize in right now, specifically meta and Google. We were doing video, videography. So we would have a video crew. We would send them out to our Constellations, take videos, edit it ourselves because our team was only four or five at the time. We would do website design. We were really just doing anything to showcase that we're resilient and that we are capable of doing something. It's always the same. That comes to mind as like, in the beginning we had the toothbrush. We were cleaning the toilets and the sink with the toothbrush. And now the washroom is fully taken care of. And so we were trying to put our worth to a very, very competitive landscape. And if you transition, you look at the current landscape for us now. We just specialize in the home improvement space, right? Just in the home improvement. So you must be servicing residential homes, not even commercial, not even industrial. And we're only on meta and we're on Google. So we went from width to depth in the last four to five years. Yeah, which is usually common, right? Like they say, one niche, one offer to get to a million. And ironically, not ironically, but serendipously. It's like the same thing to get for you guys to 10. So let's talk about, I want to talk about maybe the biggest lessons. Obviously one was niche, but when you think about you're a cent, I told you this when I met you, I was like, it is your sophistication. Your focus is very clear. Like, I don't see that often. We had John Giorso, he sold his company for multi-eight figures. His mark, his agency. And we spoke about how to go from one to five million. So if you guys have the list of that, check that out. So I don't want to double down on those lessons. But I really want to talk about what took you to 10. So when you think about your journey to 10, like what are like, you're looking in hindsight over the last five years, but maybe even the more recent years, like maybe from seven to eight figures, what are the biggest lessons and changes you made that actually started to compound into, we broke 10 million in our eight figures. Yeah. For the audience, it's important to preface that yes, we did start in 2019, but 2019, 2020 were knockoff years. And in 2021 is the one we actually really started taking things seriously. And it was our first year. So we're really like still in the process of opening up our corporation documents and stuff like that. And so to your point, Jordan, the majority of the growth did come from last three years. Three years ago this time, we were at about 200,000 MR. Last month, we closed that around one point, just under 1.1 million. Amazing. Congrats, girl. Thank you. Thank you so much. And so the way that I see this is answering it through main three main anchors. Number one is specialization and depth, right? You mentioned earlier that it's one offer or one platform. And we took that to the very extreme, right? When we knew that we had a cohort of home improvement clients back in 2021. And we looked into the numbers and we compared that against, you know, the biggest supplement retailer in Canada, we compared it to these beauty stores, these cosmetic fronts, and we're like, these, these guys are doing really well. We looked at just this independent cohort. We looked at the total adjustable market. How many home improvement businesses are out there? And we were like, you know, what? We need to agree. It was near my business partner at the time in the office. We need to agree that we're going to hyper focus in one industry, given that the total addressable market proved that it was big enough to get us to 10, 15, 20, 25 million a year. That was always a goal. So I would say that is the first anchor. The second anchor is kind of like interlooted with, sorry, interconnected with specialization and depth. And that is, I would probably ask you or another agency owner, do you know where your business is going to be this time next year? Do you guys set annual goals by annual goals? Do you have a one, three, ten year vision? If the answer is no to that, you're moving in kind of blinded. You're working within the year blinded. So we have goals for the next 10 years for the organization. And when I'm hiring folks, you know, we're meeting with the team or having our town halls, they are just as bought in as the founders of the company because they have direction. They know where they're heading. They know how we're getting there. They know the intangibles that need to happen. We need to work with more urgency this time. We need to work a little bit more diligent. We need to enter this new segment into the home improvement space. And I need you guys to act as representatives of clever. We went to the client services team and were like, we're treating your role. No more client success manager. And we're going to reframe it as client consultants. And they did an incredible job last year with referrals. It was a record year of referrals from the client services team. And that's because they knew where we were going. But also the executive decisions to say, we're going to take this from account manager role. We're going to reframe what this world looks like. So it's sustainable to eight figures and beyond. And that helped us propel growth. Now, there's something Alex Ramosi talked about, which is goodwill, goodwill in the market. So when you're guys, when you have a really good product and then your guys, your client services team is selling for you every single day, Jordan, when we launched the meta on LinkedIn ads, it was extremely profitable. Not off the start. It took us a while to ramp up, but we had goodwill in the market before we started media spending. So that would be the second one. Welcome to How to Build an Eight Figure ABC. My name is Jordan Ross and I'm your host. And over the course of this journey, we're going to be interviewing eight figure agency owners and going through the systems that I've seen work. And we've been commented into our client's businesses that have helped our clients add a half a billion dollars in annual recurring revenue over the last handful of years. I myself have already hit the eight figures in annual recurring revenue. And when I got there, I wasn't happy. I was stressed. I was dissatisfied and I didn't like the people I was working with. So I clicked the restart button and went from 12 million in annual portfolio revenue back down to the mid-sem figure level to a climb back again. And on this journey, I'm going to be documenting my process on how I'm getting back to figures and bringing you expert industry leaders who will tell you everything they did to get there as well. Thanks for tuning in and enjoy the episode. Whenever I've had these conversations, I rarely heard as one of the earliest points where we changed our account managers to like client, like these cons, it's being called a consultant, but what it really is, it sounds like they're leading KPIs, can we get referrals for every client, can we get a referral? So that's the hermosy thing I'm also thinking through. How did you reverse engineer that? What behaviors or KPIs does that role do and what percentage of your maybe book of business comes from referrals from an existing client? Like how did that compound into like on the pie chart? Like it actually led to this percent. I don't know if you know that specifically, but you could ballpark me if you don't. I know a rough ballpark number. I wouldn't get you the exact percentage, but that's a really good question because you got it spot on with referrals is in fact a lead indicator, the lag indicator, and the metric that everyone is responsible for in the organization senior specialist and above is called NRR. Net revenue retention or net retained revenue. And the goal is above 100 percent retention of revenue, which means the target is growth every single quarter of the organization. So everyone is responsible for making sure that their targets are met at the account level. If we're looking at the cohort of managers, they're responsible for not hitting targets. They're in fact Jordan, responsible for going above targets. So then the client services or client consulting team, you can kind of frame in either way, they go to the clients every two months, three months and they look for new business, whether it's a referral, so they know someone else in the home improvement industry. If it's further expansion, vertical expansion, so a client may have two vendors, Jordan. We work with them on Facebook, but they also have another agency running Facebook ads. We'll be like, look, I just want to present to you our last three months. We've been outperforming this other vendor. We would like to take the 50, 60, 70,000 a month a budget that they're running with that partnership that you have. And we think we would actually be more effective and efficient with our advertising. So the client hears that and they're like, take my money. You guys have proven results. You guys are framing it as if you take more spend. You're going to see even better results. We capture more market share in that way. And growth becomes kind of like, you kind of expect proof if that's real. Yeah, that's what her most, this is exactly what her most he talks about. If I could get one client and one client turns to two clients, then we're good. So if you're comfortable with it because like, I actually think this one topic could be the entire conversation because I've heard her most talk about it. Everyone has, but I had someone ask me like, I spent 24,000 on his newest launch. I'm in the community. And one of my buddies is like, okay, what'd you implement from his last book? I'm like, I actually don't remember. But I remember that. I remember that topic. And I'm like, well, shit, like we're not. We're definitely not executing that because I guess it hasn't been a leading, it hasn't been a leading KPI. And I would bet 99.9% of everyone listening. It's not. So how did you outside delivery? Because I think delivery and for those listening, when I met Peter, it was super clear. He was telling me about we're going to build the best training vehicle in the world, which by the way, like if you build an amazing training vehicle and operations vehicle and onboarding vehicle for talent and you can continue to deliver. Peter was super clear on doing that. This is in Q2 of 2025. And I want to extrapolate though, like what did you change for your clients outside just delivering the results that actually led to referrals? Like is there a strategy outside of we're looking at their what they're doing on ad spend and saying we could do more like we would love to do more like to or is it just that simple and it's being tracked up? I would say, you know, you know, the same goes like keep the main thing, the main thing, right? And if every opportunity that I have to speak to the company, to speak to an individual, to speak to a group. And I'm saying, this is how we win business and this is how we grow and also really this is a caveat here, Jordan. You get incentivized when you when you drive new business. That drives a different level of motivation and energy for folks within the organization. So it's about keeping the main thing the main thing. NRR is our North Star metric across every department, every discipline in the organization. Then you have reward, right? So you reward good behavior. So if you're driving good performance, media buyers, client services, creative folks all have a quarterly bonus that is directly tied to the performance. So you have reward. And then in every conversation that I have, whether it's with an individual or group or I'm hosting a town hall in person with the entire company in two weeks, it's talking about the values that drive all these things, right? Results with speed, Kaizen, which in Japanese means continuous improvement. Continuous improvement, yeah. That was my first consulting firm, by the way, Kaizen Coaching, like 2018. It's called what Kaizen Coaching? I'm gonna have to look into that. It's really nice. No, this was like, that was the first one I was coaching four years ago. Oh, you're very nice. Yeah, Kaizen. I don't know if you heard of D-Dang before, but he's the one who really incorporated the idea of like lean management and this management style of continuous improvement. And it's being obsessed with either incremental 1% improvements or being obsessed with winning new business either or their efficiency and they both compound over time. And so when you instill these values in the organization, both the founders are aligned on that. And like they see it from their perspective, they see that the founders operate with this mindset and this level of urgency. The entire team is rallied up. So this is what happens beyond recruiting the right people because I think that's a really important aspect of growth is when you come in, assuming that you have an A player, they see the values, they see how it's lived by the founders and the managers and the entire team cost a board. They have clear metrics that incentivize growth and they're rewarded from it. You really have no other option but to grow and to do really well for your team and for your clients. And so it's really about the business model that will be put together. It's what we talk about for structure and I want to get back to what percent of your book of business do you think is actually coming from the referral, but that will be my second question. Staying on this topic, I tell everyone a specific timeline it takes to actually build structure because the biggest thing that stands out like the majority of the people we meet are doing one to three million. Usually by it granted, I've met so many dumpster fires and it hit thicker. So how long do you feel like it took to actually build all this infrastructure, the reporting, the values, the cadence, the management, the onboarding systems and granted, never stops but like the actual infrastructure that allowed you to hit eight figures implement how many years or months and granted, it's Kaizen continuous improvement. It is always going. It's fluid but like that the foundational framework. I would say we really started taking that seriously in 2023, mid 2023. That's when I hired my first coach. We were like 300,000 to 50 MR at the time and you can get to that point with no infrastructure. You know, you just need like, oh yeah, 16, 17 fold. A little bit, 12 power and people and paper clips. Absolutely. So I would say starting 2023, and the first thing that we prioritized was the learning and development. So we talked about this in the separate conversation. We're learning development as a key priority for us that we rolled out this year. But we already have that in place. We just want to Kaizen. You wanted to make it the best. Yes. Want to make it the best of the best, right? So the infrastructure we really started taking that seriously after we had product market fit is the best way it could explain it, right? Because we're at quarter million, 300,000 MR. We passed product market fit. We know that we have a good product and we have a good business model. And it was like, okay, if we want to get to, you know, one million, 1.5 this time this year, which we knew, by the way, because we were planning every year for the next 10 years, it would require a lot of infrastructure and a lot of stability. Because if your folks, if your employees are coming in and there's no learning and development, there's no culture, there's no events, there's no meetups, there's no training, there's no reward. That's why you see 10 years of six months, eight months, one year, right? I literally have one of our client success managers. He's in the office right beside me. He's been with us for three and a half years. And if I ask him, do you have any like plans of leaving? How no is his answer. Why would he leave? So that really leans into the topic of reward to enhance culture and really just building a really, really, really good culture overall, which is its own topic. But I do want to ask your question because I keep avoiding it. The percentage of referrals, I would estimate this year, call it 60 to 65% of our business. We snapshot right now going into Q4 2025, 60 to percent of the business is from a referral. That's freaking, that is the biggest thing from this conversation to outside of infrastructure, guys and everything. Yes. Okay. And the other 40% just to be clear because that could actually be dangerous Jordan. We recognize 60% is, first of all, we don't know if that is sustainable for the next few years. And second of all, say, for example, we want to sell in five or 10 years. And just overall looking at mitigating risk, you do need outbound sources. So we just launched with our LinkedIn partners four and a half, five months ago, we're relaunching meta, relaunching email outreach, because we want to further expand our target for next year's 1.8 to 1.9 million MR. I'll tell you what I've seen. Add funnel to the lead magnet to the retargeting and newsletter, as I think right now, the best long-term plight because the algos are changing on these platforms. And if you're doing outreach to your warm audience that you know is reading every week or every month, it's, it's a game changer. So, okay, I want to make sure we could tie about the biggest lesson I'm hearing is tracking the data, incentivizing, having the leaders drive the culture, but we're able to grow and we hit eight figures due to infrastructure, proper incentivizing and incentivizing of employees. But it's really we're, we're having them north star be a metric and everything is reverse engineered. So it sounds like you're super meticulous. You actually remind me of I was listening to one of the co-founders of ramp and they had reverse engineer 10 years. So it sounds like your strategy is super meticulous and dialed in. If we were to finish on one point for the audience that's listening. So they could take away because I don't want to give them too much to work. I want to give them one or two things. What's the final send off send off point? Maybe about the things you were a cover. Like what's the action that they could start to implement because I could tell you I've had a lot of I've had hundreds of people on this podcast over the last five years. I've never had someone make this point about the referral engine, the data they incentive. Like what's the super clear point? So there's two two things I want everyone to really understand is number one, you will fall short, you will suffer, you will question if the goals that you are setting are realistic, you will question going back to your nine of five, you will question everything. And persistence and courage is incredibly important for any of this to happen. If I always say it the last year, 2024 was the hardest year of my life, right? And that's because we took everything start to amplify new business, referrals, infrastructure needs, talent team, our data team was growing. So the courage you cannot forget that being an entrepreneur requires a next level of courage and always putting yourself out of your comfort zone. So I want to talk about the intangible first. I think that's really important to preface. Yeah, the mindset. Thanks. Yeah, the second thing I would say really had everyone leave off with a good note, try to keep two steps ahead all the time. I was going to say plan like annual plans, but when you're getting on a one-on-one call with the director, know what their next two steps are. When you're talking to a client, know what their next two steps are, know what things are going to be in the next few months and work towards those goals and what you're forecasting, whether again, it's a conversation, it's a company goal, it's a disciplinary or department goal, try to know what's next so you could steer in the right direction. I want to steer in the right direction from my conversations, from my group meetings, from my new vendors, from my annual planning. You know, today we had an SVP come from Pittsburgh. He just signed a contract. We're hiring a senior vice president of client services. He's actually still in office right now, right? And we were all just the whole, I would say for good 30 minutes, we were talking about the level of courage and passion you need to steer a company or group of people in the right direction. So all in all, stick it out and work hard, work hard, play hard. Peter, thank you. And for those of the listeners I want to find you socially online, where could they go? LinkedIn, you do obviously just type in PeterTams. Instagram is PeterTams_. And if you want to check out the Courngy YouTube videos from two and a half three years ago, our YouTube channel is clever digital marketing. I do plan to re-upload and talk a lot more about business growth. So those videos will be upcoming next year at Q1. Unbelievable. Thank you so much, man. Cheers. Thank you for listening to this episode of How to Scale an Agency. It would mean the world if you could like, subscribe, and comment on this podcast so more people can find it organically or share it with a friend. If you're looking to scale your agency and you need help, you're looking for a true partner. Go to 8figureagency.co/call. My business has been built on becoming fiduciaries for other companies. We are going to be your partner where I will bring in my eight-figure talent to help you grow working side by side. If you need help with that, go to 8figureagency.co/call or like, share, subscribe to the pod. Thank you so much. I'll catch you in the next episode.