New year insights for agency relationships with Lee McKnight

Speaker 1:

It doesn’t matter what kind of an agency you run. Traditional, digital, media-buying, web-dev, PR, whatever your focus you still need to run a profitable business. The Build a Better Agency podcast presented by Light Label IQ will show you how to make more money and keep more of what you make. Let us help you build an agency that is sustainable, scalable, and if you want down the road, sellable. Bringing his 25+ years of experience as both an agency owner and agency consultant, please welcome your host Drew McLellan.

Drew McLellan:

Hey everybody, Drew McLellan here from Agency Management Institute. Welcome back to another episode of Build a Better Agency. Glad to have you here. We’re back in our normal cycle now where we have some guests with us most of the episodes. Thanks for tolerating my January, I just want to talk to you all by myself, kind of wild hair. Hopefully that was helpful to you, but anyway let me tell you a little bit about what we’ve got going on today. Before I tell you about our guest I do want to remind you that the Build a Better Agency summit is coming up May 24th and 25th. If you are an AMI member, so you’re a gold associate member, a virtual peer group member, a live peer group member, you are eligible to attend the AMI family day on the 23rd. That is an afternoon of panel discussions and then we’re all going to go out for dinner together, but you’re all invited to Tuesday and Wednesday, which are the main days of the conference.

We’ve got amazing speakers who are going to talk about topics like how do you re-invigorate your agency in terms of the way we think, big ideas, innovation. How do you build a community around your agency to support and grow your shop? How do you overcome imposter syndrome? How do you build wealth outside of your business? What should you be thinking about in terms of building up your agency’s value in case you ever want to sell it? All kinds of different topics. We’re going to have keynote presentations, we’re going to have breakout sessions, and we’re going to be back with what was one of the most popular things we did last year which were the round table. Imagine you and 8-10 other agency owners sitting around the table with an expert on taxes or cash flow or media buying in 2022, or leadership development or succession planning. You get to pick the topics and there’s going to be a subject matter expert sitting at every one of those tables ready to answer all of your questions and connect with you.

We would love to have you. The conference is in Chicago. We’re super excited about it. We’re going to do some fun things too. On Tuesday night we’re going to go back to the Flight Club and we’re going to combine alcohol, appetizers, and darts. What could go wrong? We’re just going to have a great time learning from each other, connecting with one another, making new friends, making new connections, making new partnerships. While all of that bubbled up last year and I expect it to bubble up again this year too, so we would love to have you.

All right, so let me tell you a little bit about our guest. Lee McKnight is no stranger to most of you. He’s no stranger to the podcast. He is one of the leaders at RSU US. As you know, they work alongside small to mid-sized agencies to help them with their business development program, but they do a lot of research and they do a lot of thought leadership that is really, really good, and so if you’re not following them you need to. The reason I asked Lee to come back right now is one of the pieces of research they do every year is they go out and do a really extensive research project where they talk to both marketers, CMOs, business owners, people who are buying marketing services and agencies, and they ask them some really fascinating questions.

One of the things I love about this report is not only do you hear what the CMOs are thinking and you hear what the agencies are thinking and anticipating, but you can compare and contrast how they each see the world, which is really insightful. As soon as the report came out I knew I wanted to get Lee back on for us to dig through some of the data and insights that they had, and so that’s what we’re going to do today. Without further ado, let’s welcome Lee McKnight to the show and I have a lot of questions so I want to get right to it. Lee welcome back to the show, thanks for coming back.

Lee McKnight:

Yeah thanks for having me Drew. It’s great to be back.

Drew McLellan:

One of the things that you guys do is that you do a fair amount of research.

Lee McKnight:

Yeah.

Drew McLellan:

Your latest study just came out, and I thought the information and the insights for agencies were really fascinating, so hence you’re back again to share with us what you learned. Give everybody a sense of the magnitude of the actual study, who’d you talk to, when did you talk to them, and then I have a ton of questions.

Lee McKnight:

Sure, yeah, yeah, and again, thanks. We have been doing this report, and it is the 2022 New Year Outlook Report, that’s the official swanky title.

Drew McLellan:

Yeah, I love it.

Lee McKnight:

We’ve been doing it probably since, not probably but since 2010. We’ve got some nice historical data every year that we can put against the newer data, right. Why this report typically gets some good play, and ideally is helpful for agencies, especially small, mid-sized firms out there, is we are serving marketers and agencies for this one, and it’s the only one that we do that for, right. Of the agencies we went out to, I’d say 85% are small and mid-sized firms, and that’s typically who, because much like yourself, that’s who we work with typically. Marketers it was a little more all over the map but still come in with mid-tier type of companies, some larger ones as well, against both our databases. That’s some of that background. We fielded the survey in December of ’21, so that’s the back drop in terms of, and as you said, just realized it about three weeks ago, two and a half weeks ago.

Drew McLellan:

Yeah right, yeah, so because you have the historical data and because we have been through the craziest time, I think, in any of our personal or professional lives-

Lee McKnight:

Agreed.

Drew McLellan:

… what were the surprises?

Lee McKnight:

Yeah. There were several. I’m happy to report, and course we’ll see how it all plays out, so much of this is prediction-based. You know what? I’ll start with the maybe negative first, because all the rest is pretty optimistic.

Drew McLellan:

Okay, all right.

Lee McKnight:

Yeah, one that was interesting, and it could end up being a positive thing for agencies, but we asked, one of the questions was, of both agencies and marketers, okay for agencies, “What do you think your clients in terms of non-marketing spending, investments in the business, what do you think that’s going to look like?” Then asked marketers a question about themselves. Only 21% of marketers said they would somewhat or significantly increase spending on non-marketing activities as we’re rolling into the new year. When we say that non-marketing meaning things like personnel, tech, could be R&D, could be product development, but last year in this survey it was 49%, the year before it was 77%, so a huge drop. What does that mean? Well, for us we thought it could be a negative for agencies. If they are slowly down product development, for example, and things like that, does that mean we’re going to see things drop off, because-

Drew McLellan:

Right. What trickles down to us?

Lee McKnight:

Exactly. We had talked about, just like before we came on, last year certainly a lot of what we saw with agencies coming out of that first year of COVID was, not for all, but a lot of organic growth from existing clients, fantastic. Going into this year, does this stat I just mentioned play into maybe some pull-back from those clients that you have now and some of that organic growth? On the flip side, and does that also mean well could they then be relying more on some of their in-house type agencies for example?

Drew McLellan:

Right.

Lee McKnight:

For us, we’ll take the glass half full where okay, maybe that’s a lot of opportunity for you though, right, because if they’re pulling back on some of these, is that another place for your agency to fill in because they’ve now pulled back on some of these different areas?

Drew McLellan:

Right, right, yeah. Well I think one of the pendulums that swings is, and we’re going to talk about in-house agencies in a second, but one of the pendulums that swings in our world of course is how big a department does a client have in house? Pre-COVID, boy everything was pushing towards in house. Agencies were reporting and we were seeing in our research how often agencies were losing work to in house agencies, or grabbing to co-exist. Then I think COVID hit and what we’re seeing is companies aren’t abandoning their in house shops, but they certainly have thinned the herd there, because that was an expense item on their ledger. I think agencies, the pendulum has swung now where the in house agencies are smaller, less robust, less able to handle the volume of work that they used to handle, which is a great opportunity for agencies but one of the things that I took away from your report was in house agencies are not going away and we need to learn how to play nice.

Lee McKnight:

Yeah. Since we went there, I was interested to hear from your own research, and I know all the agencies that you’re talking to on a consistent basis. When we got our report and we saw that in house agencies were actually on, were waning, and you’re right, they’re not going anywhere for sure, in December that same month AdWeek had put out, and I mentioned this in a post, that in house agencies were actually increasing. I thought, “Well that’s an interesting dichotomy,” and I pointed, and I think everyone watching, listening, excuse me, knows that those kind of stats are probably coming from the much larger firms, and the larger companies. I think the small and mid-sized firms, what we see and what our report also pointed out, it was 63% of marketers said that they expect the amount of work managed in house will decrease somewhat to significantly, it won’t change at all in ’22.

Last year the number was 36% in this survey. That’s a big decrease. That’s a positive for agencies, right, in that sense, more work coming your way, but you’re exactly right though. That’s not a new thing. Agencies have had to co-exist with these folks for awhile, but that was one of the optimistic, absolutely, that’s fantastic because we saw the same thing with that pendulum pre-COVID of, “Man there’s a lot of work sticking in house,” and that’s rough. It’ll be interesting to see how it plays out.

Drew McLellan:

It will be, but one of the things that I think sometimes we lose the optic of around the in house shop is a lot of times they’re hiring the outside agency for what we think of as the higher ticket items, the strategy, the ideation, all of that, and then the in house agency does a lot of the production work that honestly we have a hard time getting paid well for anyway.

Lee McKnight:

Good point.

Drew McLellan:

I think if you go into the in house agency relationship with that mindset of, “We are the outside counsel, and yeah you’re going to do the paperwork but we’re the ones who are going to help you set strategy, we’re the ones who are that outside perspective that you need to really create new ideas and new opportunities.” That’s where you can charge a better premium revenue, or rate, than the, “We’re resizing an ad 12 times.”

Lee McKnight:

Right? Yeah no, fair point. That’ll be one, and as I’m talking to agencies the same way you are, that is pointing out so far. Now we’re not super deep into the new year, but we’re getting some of that feedback, again from small to mid-sized agencies that, “Yeah we’re seeing some of that work leave in house.” We talked about this too, part of that is COVID, and part of that is just hiring. The hiring issue is rough all around. I think obviously both those factors are playing in to decrease that.

Drew McLellan:

Right, no doubt, yeah.

Lee McKnight:

Yeah. What else? Sorry, go ahead.

Drew McLellan:

No go ahead. What were some good surprises?

Lee McKnight:

Good surprise. Another one was just marketing spending was interesting because 73% of agencies and 68% of marketers, and by the way they are never this aligned, ever in the survey, not a shock to hear, right? The one time when they are, it’s probably the stat where we really want to see it, and that is they believe that marketing spending will increase somewhat to significantly this year. Now 68% of marketers in our survey this year, last year that was 41%, so talking about loving seeing that. Now again, we’ll see how it plays out, but those kind of predictions, and again in house plays into it too. That’s all good news as far as at least the stat in and of itself.

Drew McLellan:

Well and what I love about that is what it suggests, perhaps this is my own interpretation, but I think in 2021 we were still coming off of all of the, “I have no idea what’s going to happen next with COVID,” yada, yada, yada. Some people wore a little more cards to the vest, whereas now I think people are like, “Okay I sort of get how this is going to play out. We’re going to have some variations and blah, blah, blah, but business has to go on. Work has to go on. We’re getting back on planes, so it’s time for us to get back into marketing our products and services. We have to focus on sales this year.”

Lee McKnight:

Yeah, for sure. Yeah and I can’t imagine, knock on wood, my desk here, we’re not going to see that play out. There’s probably two other big stats that were optimistic and/or interesting, and this is one I really wanted to get your take on. Specialization, which I know is something that you consistently talk about, and I know we do too to an extent. I’ll get pushback sometimes, “Look we’re generalists and we’re doing fine. I’m tired of hearing about we need to be…” Hey-

Drew McLellan:

“And by the way, the only way I survived COVID was because I was a generalist. If I had been a travel agency, I’d be out of business.” That’s now the new nuance of that justification, yeah.

Lee McKnight:

Oh yeah, for sure. With this report what was interesting is, and I’ll go back three years. We asked the question of, to marketers, “Are you more likely to look for a specialist agency than a full-service agency?” Three years ago 52% of marketers said, “Yeah, specialization.” 60% last year. This year it’s 68%. It’s continually going up, that they’re more likely to look for a specialist agency versus a full-service agency. I’m not surprised, and while there’s nothing I can say when I’m talking to an agency that is a generalist where, “Look we’re doing well.” I can’t argue with that if they are, but I’d say at the same time, I like to point out that specialist doesn’t mean that you are a farm agency, for example, or that’s all you do, but I still tell them, and I firmly believe, because we see it and hear it from prospects and marketers, that they do want to see that you’re an expert in that sense, and that you have a specialization of some kind. It doesn’t have to be laser-focused.

Drew McLellan:

They don’t believe that you can be an expert in everything, because you can’t.

Lee McKnight:

Exactly. Thank you.

Drew McLellan:

Yeah, yeah.

Lee McKnight:

Preach it.

Drew McLellan:

In our most recent survey what we saw was the exact same thing, an increase. It was interesting because the larger the client budget, the more specialization mattered to them. If you want smaller clients with smaller budgets, which I think does align with a lot of the generalists, they tend to serve the local butcher, baker, and candlestick maker, people within two or three hours geographically of where they are, because who’s going to drive by 12 generalists to get to another generalists? But what we saw in our research was A, the clients were more likely to work with an agency more than 200 miles away from them if they’re a specialist, and B, the bigger the budget, the more important specialization was for them.

Lee McKnight:

Okay.

Drew McLellan:

Yeah.

Lee McKnight:

Interesting, interesting. Yeah that’s a nice compliment to that stat.

Drew McLellan:

Mm-hmm (affirmative).

Lee McKnight:

Yeah and I think, I don’t want to make too much of that. I think agencies generally understand that, but I always think it’s interesting when we bring it up because it gets some hackles on some of those.

Drew McLellan:

Absolutely, absolutely. I get it. It’s a little counter intuitive.

Lee McKnight:

Yeah.

Drew McLellan:

Instead of talking to 20 people who all have big bags of money, now I’m only going to talk to two people who have big bags of money. I mean I understand the math.

Lee McKnight:

Sure.

Drew McLellan:

But what I’ve seen, and I know what you’ve seen too in your work, the sales cycle is shorter, the relationship is deeper, and the budgets are healthier when they’re specialists.

Lee McKnight:

Yeah, fair point.

Drew McLellan:

Again, your business, your agency, you get to do what you want and if being a generalist and serving a broader array of clients keeps things interesting for you, or you love being apart of your local community and that matters, more power to you. There’s nothing wrong with it. You get to decide. You just need to know the facts of what you’re deciding.

Lee McKnight:

Yeah, yeah I love that. There’s the quote for sure. Another one that was a little startling but I think at the end of the day agencies now, several years into this, I would like to think have adapted, but just in terms of the in-person conferences and trade shows, that a pretty steep drop with marketers year over year from the past two years. Last year we asked if they attended in person and what we saw was marketers last year, 65% saying they attended one to five of those.

Drew McLellan:

Of a live event?

Lee McKnight:

Yes, of a live event, a live event, in 2020. In ’21, dropping from 65% to 32%, which is not a huge shock, right? Let’s think about this. Yeah of course, because oh my god, we were back and forth-

Drew McLellan:

[crosstalk 00:18:17] getting on planes.

Lee McKnight:

Exactly. I think one of the things in the first year of COVID, you saw some of those agencies from a new business standpoint who were depending on the networking, the in person, the shows, and it was a pretty big slap to that face. That stat doesn’t, I’m not as concerned because I think agencies have adapted and I would be shocked if we didn’t see throughout the rest of this year, I hope, knock on wood, those kind of numbers increase, but I think that’s definitely agencies understanding that as far as business development goes, you’ve got to have strong in house selling folks, or we know the networking, we can’t depend on that like we used to. I think they generally, well they have to know that now, right?

Drew McLellan:

I want to dig into that. I want to take a break and I want to come back and I want to hear from you what you are seeing that is being successful for agencies who aren’t hopping on planes, and aren’t doing the in-person networking and door knocking that they did pre-COVID. Let’s take a quick break and then let’s talk about how you’re seeing agencies successfully pivot that. Then I want to get back to some data, but let’s take a quick break and we’ll be right back.

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All right, we are back with Lee and we’re talking about their most recent report. It’s an annual report. They’ve done it for gosh, 12 years now. I know a lot of you follow all of the content that RSU puts out and I’m sure you’ve seen the report, but we’re sort of drilling down into some of the things that agencies need to hear from that report. Right before the break Lee was saying that, no big shock, that the attendance both on the marketing side and on the agency of in-person events in 2021, obviously, was lower than it has been historically. I think we’re starting to see, anecdotally I know my agency folks, a lot of you listeners, you’re back on planes, you are back at trade shows and you’re really gearing back but I also think one of the silver linings, perhaps, of COVID, was that a lot of you had to learn how to sell when you couldn’t sell face to face. I would love to hear Lee, from you. It seems like just because COVID is waning doesn’t mean we shouldn’t keep some of these good sales practices going.

Lee McKnight:

Absolutely.

Drew McLellan:

What were you seeing that was successful, that agencies were doing well when they couldn’t hop on a plane and show up at a trade show, or get on a plane and go see a prospect in person, and what is working?

Lee McKnight:

Yeah absolutely, and just a final note on that though, I will say agencies in that stat were not near as much of a drop. Agencies have been ready to go. Here’s the plug for, yeah I know your conference is coming up and we’re excited for that. I know the agencies I’ve talked to are like, “Lets get to Chicago,” so yeah I think, yeah. That’s why I think that’s going to be a positive sign I hope in the future.

Drew McLellan:

Yeah, yeah, me too.

Lee McKnight:

I think what agencies had to adapt to, certainly, was okay now the networking piece, that’s all gone. I think what’s surprising to a lot of agencies, and where we found success, and this was not be a commercial for us but I will just point out that some of those tools that agencies fought, and I just had a conversation this week with one, that was thinking about coming on board with us. They’re like, “Look, the phone obviously doesn’t work anymore. If there’s any kind of mailing component that maybe we might have done in the past, that’s not working.” I had to say, “Well hold on actually, that’s 100% not true. A lot of the tools that we had in place in terms of inside sales absolutely are effective.” Now we had to adjust. For us as a company, and reaching out on behalf of our agency clients, the messaging, of course you had to be sensitive, and there was so, I mean you know-

Drew McLellan:

Right, all the nuances, yeah, right.

Lee McKnight:

We all went through it. Now it’s evening out a bit, right, but one of the things was, like they say, “Well the phone, how does that work anymore, because people are all working from home.” I’m like, “No, absolutely.” In fact, we had more people picking up the phone, believe it or not, over the last two years than in years previous. Now part of that, let’s just be transparent, part of that may have just been, “Okay I’m stuck inside here.”

Drew McLellan:

Yeah right, “I’m lonely. I’ll talk to anybody.”

Lee McKnight:

Hey look, not to take anything away from our sales people, but there probably was some of that, in all sincerity. What we realized was look, don’t discount any of these channels because these phones are getting, they’re being passed on to sales, and you have to be, part of our outreach, as it should be with any agency, you got to be respectful. You’ve got to alternate those platforms. Yeah it’s not just the phone, and I think one of the things that we saw success with, excuse me, was, especially with email which is still a valid tool but we all know how crowded that is, is just you’ve got to be as transparent as you can.

I hate to use the word authentic, because god it’s overused, but there is some truth to it where if you’re going in trying to be tricks-y, and there’s nothing wrong with experimenting with subject line, for example, but at the end of the day you’ve got to show them your value immediately out of the gate. “This is why I’m reaching out to you. You’re not a name on a list. Sincerely we are experts in this space.” Going back to that specialization, right. “Here’s why there’s value in initially talking to us.” You’ve got to have those multiple touches but for what never changed, and what I’d say to agencies now that are trying to do it internally, you’ve got to alternate those channels and you have to use them all.

Drew McLellan:

Agree.

Lee McKnight:

Yes phone, yes social. Yes the mailing component, which is part of what we do because it’s such an un-cluttered space.

Drew McLellan:

I was going to say I think so many agencies dismiss mail, and certainly with COVID they’re like, “Well they’re not in the office.” They’re still getting their mail.

Lee McKnight:

They are, they are. Absolutely they are.

Drew McLellan:

It’s just not piling up in a mail room for two years.

Lee McKnight:

They 100% are, and while that seems like an antiquated notion, to your point to a lot of agencies, look it’s one tool in the toolbox and I’m not just making this up for my own gain here, but we sincerely, a couple weeks ago, got an email that one of our clients, that the prospect sent to them saying, “Okay I got your mailing piece. I was really impressed. We do not get things like that anymore.” I’d totally point out to agencies listening that it’s one channel that’s underused. Yes, you’re right. Part of what we did have to change was we would typically send out a mailing piece first as a warmup and letting them know it’s coming. We would flip that and try to see if we could see where they were, but at the end of the day, to your point, regardless they’re going in and they’re getting their mail.

The other point was for agencies, it can be tough but if you’re getting all this organic growth and you are doing well, it is absolutely the time to invest in some of the tech that maybe is going to be helpful and not just sit there and gather dust like a lot of agency CRMs. We certainly rely on our tech stack to make our processes as efficient as possible, and you can get pretty excited about the shiny things. I know that you have talked about it and we have talked about it too. You’ve got to find your core, what’s really going to help you and what are you spending money on that maybe you should trim some of that fat. This is a great time now to make sure that you’re investing in some of those tools, the basic tools that are going to help you with email deliverability for example.

I think LinkedIn is another area that folks can use well but man it’s getting clobbered. I think we’ve talked about that in the past. With the cold selling and the junk, but I still think if you were more transparent… It’s interesting, we just did a challenge with a couple of agency folks this past week where we did six posts a day on LinkedIn for a week, and that was brutal. I even had a bank of content like you could do that, and I know you post fairly frequently, and it’s a lot of good value-added content. I don’t know how you do all the video you do, by the way, but for them it was a little bit tougher because they didn’t have that bank.

Even so, it was interesting the ones that were a little more personal. That’s not a shock but on LinkedIn I always feel a little bit, I don’t know, that’s not really the place to do that. The ones that were a little more personal got a lot more attention. Sorry, that was a long answer to your question.

Drew McLellan:

No, no, no but it’s interesting because A, you’re right LinkedIn is getting junked up and that’s disappointing because it was the one clean channel. B, at the end of the day it is relationship selling and so being a little bit more exposed, if you will, about who you are and what you’re about personally as it relates to the work you do and who you do the work for, I think actually is a way for people to go, “Oh I can connect with that. I can understand that.” It just feels, to me, like particularly post-COVID, people are looking for, agency clients are looking for a relationship that is not as transactional, and that… Maybe it is back to the, “Lonely, I’ve been sitting in my house for two years so I just want to talk to somebody,” but I think a lot of agency clients really do now recognize that their agency partner can be that thinking partner, can be that safe place for them to confide big ideas in that maybe it doesn’t feel safe inside the corporation to talk about, and they’re not going to do that if they don’t have any sense of who you are and what you’re about.

Lee McKnight:

Yeah I agree. It’s interesting what ties nicely into this, just going back to the report for a minute, is we’ve asked the same question for years and years about, specifically to marketers, “Do you actually…” We don’t say, “Actually read,” but, “Do you read agency-created content in any form?” Every year it’s gone up. Last year it was 73%. This year it was 77%. That’s huge in my mind. For agencies, I know during COVID, especially in the beginning, a lot of them said, “Okay now we’re going to do this,” and so many did and a lot of them have fallen off a bit, some haven’t, but it’s worth it. I know you have to find your own rhythm and you can’t be putting out six posts a day, which I will not keep doing by the way, there’s no way that’s happening, but they’re reading it.

This year we asked a little bit differently. “What platform are you reading it on?” Not shockingly LinkedIn number one by just a huge percentage. It’s important, I think, if you’re creating content and you’re putting it on your site, agencies, you’ve got to build it and they will not come. They might, but they won’t.

Drew McLellan:

Right, right, no they don’t, yeah, yeah.

Lee McKnight:

Yeah. You’ve got to get it out there.

Drew McLellan:

At least they won’t in the beginning. After awhile I do think you build up a following and people will subscribe, or however they have to access it, but in the beginning I think you have to provide value, value, value, value in their space, which again is going to be rented space, LinkedIn, or Twitter, or wherever you want to do that, before they’re ever going to walk in your house. It’s sort of the equivalent of if you want to go on a first date with somebody odds are you don’t invite them to your house first. They’ll be like, “No thanks. That’s creepy. I’m not doing that. I’ll meet you in a coffee shop, but I am not coming to your house.”

Lee McKnight:

That’d be weird.

Drew McLellan:

Yeah, it would be weird. I think that’s sort of the equivalent for us is that we have to be really present and accessible, maybe that’s a better word than authentic, right, because you’re right I think we [bantee 00:30:06] those words around, or transparent, but I’ve always found that the agency owners and the agency’s content gets the most engagement, and actually gets people to raise their hand and say, “I’m interested in doing business with you,” is when the people feel accessible, they feel real. You’re like, “Okay I have a sense of who you are and I think we might be a good fit.”

Lee McKnight:

Yeah I 100% agree and I think we’re seeing more of that in the agencies that have managed to put a little more of that personal vent in themselves into either their content or the pitch. Actually just this morning a couple, an agency in New Jersey that was about to go into a pitch. It’s interesting as far as, I haven’t talked to a lot of firms about this recently. They haven’t done an in-person pitch, which is not a shock, in a year. I don’t know why it’s just Midwestern, but there’s a lot of those clients who have been pitching in person now for awhile.

Drew McLellan:

Are Midwesterners?

Lee McKnight:

Yeah. I don’t know why that’s any different. The ones in Jersey are like, “Oh my god we haven’t pitched in person in three years.” I have no idea what the correlation is there, or what I’m trying to say but it’s just interesting.

Drew McLellan:

Actually you’re right. Now that you say that, that’s right. My Midwest, and again we’re talking US-centric here, but my Midwest agencies were much quicker to get back on planes. I had some agencies, depending on the state they lived in, that never shut down during COVID. They just stayed in the office, right?

Lee McKnight:

Yep.

Drew McLellan:

They were just like, “This is business as usual.” My East and West coast agencies have been much more reticent about traveling, face time, all of that than the heart of the country for sure. I don’t know what that means about them personality-wise-

Lee McKnight:

I’m not either.

Drew McLellan:

… but it sort of fascinating.

Lee McKnight:

It really is, and the reason I brought it up besides the fact that it is kind of interesting is that this group in Jersey seems to have done a pretty good job even with that virtual pitching, of letting some of that personality come through. I’ve seen, they’ve shown me some of the things they’ve done that they’ve recorded. I know that’s a struggle man for some folks. It’s just weird. Again, we’ve all gotten used to it to a certain extent, but you can definitely see, and this is I think, “Wow Lee, really?” But, those ones who just take to it, and the other ones who are just like, “Man you probably should have someone else in the agency be doing this.”

Drew McLellan:

Right, right. I had an agency tell me the other day that they did a pitch and on the client side everybody had their video off, so they were literally talking to black boxes.

Lee McKnight:

Oh no way.

Drew McLellan:

I was like, “That is brutal.”

Lee McKnight:

That is. That’s rude also.

Drew McLellan:

Yeah right, I agree. I thought it was really rude.

Lee McKnight:

Yeah that’s-

Drew McLellan:

Because you know they’re answering email while you’re talking.

Lee McKnight:

Totally. They’re not paying attention. Yeah that definitely is… I get it, this is the world we live in now, but man that in person, I would think, it’s got to be the way that we can get back to hopefully. Having said that, not getting on a plane at 3AM is a wonderful thing, as you’re traveling your pants off.

Drew McLellan:

Right, yeah, yeah. I’m working on trying to reduce that a little bit but yeah we’ll see. I love the face time and I love all of that, but 200 planes is a lot of planes.

Lee McKnight:

Yeah no kidding. Bless you sir.

Drew McLellan:

For the folks that have mastered the virtual pitching, and making it more personal, what are some of the tactics or tricks that you’re seeing them do to have better engagement in this very weird, not natural environment that a lot of agencies are still trying to sell in?

Lee McKnight:

Yeah it’s interesting. I think part of that answer, and it’s where we play more too, so I can speak, is the lead-up to the pitch. This group has done a nice job of it that I’ve seen, and I’ve talked to others that it’s, because we’re not doing it in person, and for most of these agencies, it’s that lead-up and it is those touches once you’re getting to that pitch, as much as you can establish some rapport. Sometimes that does not happen or you don’t have the opportunity to make it happen.

Drew McLellan:

They’re not open to it, right.

Lee McKnight:

Or they’re not open to it. I think what we’ve seen is trying to, and this may seem self-evident, but trying to provide… I think what we always try to tell, let me put it this way, tell our clients, and I try to do this… My job is to bring agency clients on board. As much as we can, try to show them two things. One, just that we’re human beings here, in the way that when you’re reaching out leading up to that pitch, for example, is if your email or your voicemail reads like an ad, or like you’re a robot, it’s going to fall short. Really the other thing, and I really love saying this, is ultimately show them what it’s going to be like to work with you before you ever do work together. Those touches ongoing. Quite frankly just keeping up with them and not letting them go dark for example. When they do, and we do this for our own clients. That happens. I mean it’s usually because they’re busy. They’re not just-

Drew McLellan:

They’re swamped.

Lee McKnight:

They’re just swamped, right. Now sometimes it is because they’re rude or they’ve moved on and they didn’t tell you, and that stinks, but more often than not that’s not the case. I think for us, and how we help our clients leading up to that pitch to make that pitch, if it virtual, and so many are, as successful as you can be, even if you’ve established a form of a relationship up front with just one of those individuals because it’s not going to be all of them, right. God forbid, hopefully they won’t have their videos turned off.

Drew McLellan:

It was so awful.

Lee McKnight:

Yeah, establishing that upfront. Sometimes it’s as simple as just you might not have the research, for example, that Drew, you and I do, because it’s part of what we do, but you can take those stories, speaking to agencies, you can take some of that work you’ve done, and you don’t have to give super specifics that you wouldn’t share, like strict numbers maybe, but you can show them, yeah, show them the expertise. Even if it’s three sentences. I know that can be hard sometimes to think about, but what we try to tell clients is always go back to the work that you’re doing for clients now. If you’re struggling with how to show that value and what it’s going to be like to work with us, you’re doing it right now for your current clients, and you’ve got to put that in your mindset of, “How can we solve a challenge and how are we solving those challenges?” I think that’s one of the biggest things.

Drew McLellan:

Well and I think so often agencies make that so much more complicated than it needs to be.

Lee McKnight:

Yes.

Drew McLellan:

Honestly one of the easiest, best ways I see good agencies demonstrated their expertise and creating rapport is by the questions they ask. When you ask great questions and you can say, “You know what? Amongst our clients in the same genre or space that you are in, we’re seeing that they’re really struggling with this. Are you guys struggling with that? We had a couple ideas that were helpful and I would love to share those.”

Lee McKnight:

I think that’s the key, and I think the way you phrased it is so important. We’ve talked to our own clients and just other agencies that that question piece, what they tend to do is they go back to that default over the last several decades of, “What keeps you up at night?” That’s not-

Drew McLellan:

Oh my god, I hate that question. Right.

Lee McKnight:

That still happens. I still see agencies sometimes that maybe not phrased exactly that way-

Drew McLellan:

No I hear it come right out of their mouth.

Lee McKnight:

You do and it’s like, “No man, now you’re making the prospect do the work and they’re turning off,” but instead it’s exactly the way you phrased it Drew, and that is, “Here’s what we’re seeing.” When you frame it out that way, even if it’s not exactly what they’re seeing, you know their world so you probably hit, you’ve hit it there somewhere.

Drew McLellan:

Right, right.

Lee McKnight:

That’s absolutely the way to do it because if you do it that other way, however you phrase it, you’re dead in the water immediately.

Drew McLellan:

Well and I think now that phrase, or phrases that mimic that phrase, we all know that that’s a sales question.

Lee McKnight:

Right, exactly.

Drew McLellan:

You are about to try and sell me something. I don’t really want to tell you what keeps me up at night because I know where we’re going, as opposed to what we’re talking about, which is you’re sharing knowledge, you’re sharing insight first, and even if all they get… Even if you missed the mark, it’s probably going to be interesting enough to them they go, “Really, other people are struggling with that? We’re not struggling with that, but we are struggling with this.” At least it leads into a conversation that is a little more meat on the bone.

Lee McKnight:

Yeah. With our own sales people we see that, and that’s how I started out at RSW with my own agency clients, is not to get so ultra-specific that it goes right over their head and they’re like, “No that’s not a problem we’re having,” but if you can just speak to, you have a group of those challenges and you can always have that as your base as you’re reaching out. I try to tell agencies, even if they’re not working with us, you’re also going to feel more comfortable coming from that place because it’s true. I hate to sound all whatever, “It’s truth,” but it really is though, and you are going to feel so much more comfortable rather than, “Oh this is a sales call. I hate these.” Yeah it’s easy for me to say because I like sales but I do think the more comfortable you can make yourself feel as an agency, it’s just going to be easier to reach out, and your prospect is going to see that too.

Drew McLellan:

Well now you’re just having a conversation, and you’re being helpful and you are demonstrating that you have some knowledge, which is a much more comfortable place for most agency owners than hardcore sales, because people aren’t like you, when they hear the S word, they start to twitch a little.

Lee McKnight:

Understandable. I get it.

Drew McLellan:

Yeah, yeah, right. Back to the report for a second. What do you think are the three, because of the data in the report, agencies should, check, check, check? What should we be doing right now that the report suggest are important for us to be doing as we go into, as we approach the second quarter of 2022?

Lee McKnight:

Oh what would I say? First, I think number one, and you and I touched on this, is you need to make sure number one, if you saw some of that organic growth, if you’re one of the agencies, and I know a lot of them did, if we’re seeing some of these stats come to fruition that maybe in house is waning, maybe that they’re not, some of this non-marketing spending is happening coupled with the marketing spending, excuse me, that is possibly increasing. If all that comes true, it’s never been more important number one, that you are taking care of those current clients. By taking care though, and this is so easy for me to say, I know, but rather than being the order taker, which you do need to be, but then you’ve got to go a step further. You really have to because we see in these surveys of agencies, year after year, and I’m going to hear a collective groan, but that so many clients don’t understand how much you actually do, and that maybe you’re just taking a piece of this. Listen, I know how hard that can be. I know and I know Drew you personally know from running your own agency.

Drew McLellan:

Absolutely, yep.

Lee McKnight:

But I think that’s number one. Number two I think is in terms of reaching out to these agencies and understanding that trade shows, maybe they’re coming back, thinking about that content. I think really what agencies should take away from this is also there’s opportunities here to do it at your own pace, but to show that expertise even if it’s not, you don’t have a blog, that’s fine, but to do it on that rented space, like you said LinkedIn, that’s where these marketers say that they’re going, and it does take time, and you have to do that drip, and even if it’s one post a week is going to be better than nothing, but I think trying to find that rhythm and keeping that up if you started that during COVID is huge.

The last is going to be really self-serving but it is so true. It was tough enough for agencies to do any business before COVID. With organic growth coming in it got really hard, so I think understanding that new business needs to be a culture-wide, as best you can, I was going to say phenomenon, that’s not the right word, but having it be, as part of your culture throughout, understanding that everybody does touch it, because they do. I know it’s a little bit harder for some folks who aren’t directly attributed to it-

Drew McLellan:

Well everybody contributes in some way. Either I take something off your plate so you can do more of it, or I’m helping source a blog or video topics. You don’t have to be the one making the stuff or pushing out the stuff to be apart of it, for sure.

Lee McKnight:

Yeah. I think taking advantage of what could be the spend, and as you said and we started out in the beginning, that folks are, “Man okay, I’m ready. We’re ready to get back out there. We were kind of out there and now we went again,” and now hopefully, as you said, these marketers are going to be advertising, they’re going to have this work and you’ve got to be there to take advantage of it. Again, baby steps. Find your rhythm and do as much as you can. I know that’s easy to say but I think whether it’s, however you do it, you’re going to see the fruits of your labor, if you will.

Drew McLellan:

Yeah I think so too. You know it’s interesting, about every decade we get hit with something that economically sends everybody back on their heels. After the great recession, two or three years after the great recession we were sort of in that phase where it was like, “Oh this is the new normal and I have to be able to function in this new normal.” It feels like that’s where we’re at now in the post-COVID world of, okay COVID’s actually not ever going to go away, but we’re mitigating the damage and this is just going to become part of our new normal that we get COVID vaccinations like we get flu shots. We’re sort of getting to the point where it feels like everyone is like, “Okay we can’t keep waiting for the other shoe to drop. The other shoe has dropped. This is reality. I have to get back to business.” I think that’s great news for us as agencies.

Lee McKnight:

I agree.

Drew McLellan:

Clients are finally ready to go, “Okay whether we’re now a hybrid company, or we’re going to work from home forever,” or whatever new normal is, “This is new normal and we’ve got to go sell some stuff.”

Lee McKnight:

100%. Yeah and I do think the country is getting there and or will be there, because we have to.

Drew McLellan:

Yeah we can’t be stagnant for much longer.

Lee McKnight:

Agreed.

Drew McLellan:

Yeah. What’s up next for you guys? You guys always have interesting things going on, and then we’ll talk a little bit about you being at the summit.

Lee McKnight:

Yeah, yeah. Yeah right now we are doing our own virtual conference with kind of our own people, which has been great. Our goal is always to be actionable, but moving forward we generally have a pretty full plate of content, and we’re going to be releasing some interesting things this year. We’re going to put out what we’re calling so far, it’s an embryo, but kind of an agency scorecard to help… I think throughout this year our theme is to be as actionable as possible in our blog posts, and my three takeaway video series where it really is truly step one, two, three. I think sometimes, and it’s interesting that I, myself, will think about, because I’ve been doing this for so long, 14 years Drew.

Drew McLellan:

Yeah, I know.

Lee McKnight:

You’re talking to me, whatever buddy.

Drew McLellan:

Yeah I hear you.

Lee McKnight:

You forget about the basics sometimes, and agencies crave that and I-

Drew McLellan:

Well and you feel like everything you produce has to be where someone goes, “I have never heard or seen that before. It is the Mona Lisa of insights.” As opposed to just reminding them of something that they know but they still aren’t doing.

Lee McKnight:

Totally. That’s been my personal goal as we go out, but yeah. We just appreciate folks watching and reading and hoping that it helps.

Drew McLellan:

Yeah. I’m curious about the scorecard, as that gets developed. We probably should have this conversation not while we’re recording but we do a lot of scorecard-ing and metric measuring for agencies and we teach a lot of that so if I can be helpful helping you develop that, I’m happy to share with you what we do.

Lee McKnight:

That’s awesome. Absolutely.

Drew McLellan:

Okay so we’ll talk offline about that but if I can help, I’d be happy to do that.

Lee McKnight:

Love it, thank you.

Drew McLellan:

Yeah, and you guys will be back at the summit in May.

Lee McKnight:

Yes.

Drew McLellan:

Folks will see you there, and get to pick your… One of the things I love about this summit and the partners that show up is, and you and Mark were all about that last year and I know will be that way this year too is you just show up ready to help and have conversations. It’s like a free coaching session for two days. I’m excited for my folks to be able to get to spend more time with you guys and learn more from all of the things you know.

Lee McKnight:

Yeah, I am too. We’re super psyched, and this is not just, Drew is paying me very little to say this, but in all sincerity it was an awesome… I mean if folks are deliberating at all, it sincerely was fantastic, because I do think the vibe is that small to mid-sized agency, we’re all just talking here. It’s not a sell. When you are seeing these presentations, they are helpful. I think that is one thing that’s been missing. Nothing against anyone else that’s thrown any conferences, but if anyone’s on the fence, you will actually… Also, it’s just fun. You get to see each other now, and you get to communicate face to face, have a meal. It was great, so we really are looking forward to it.

Drew McLellan:

Yeah me too. I am also like, “Oh crap it’s only three months away. I have a lot of work to do,” but I am looking forward to it. There’s something magical about bringing people together who have common experiences and that they literally can be sitting next to somebody in a session room and go, “Oh, so you do that? We do that too.” Then all of the sudden there’s this information exchange. What I love about the community of agency owners is they really are incredibly generous, and they want to help each other and they’re not hiding their big secrets. They’re like, “Oh well we do this, or we do that.” It’s two days of that kind of conversation which are greatly enhanced by having folks like you guys there, and other people who have a depth of expertise in some aspect of running an agency, and that you can really augment those conversations with an insight that my people don’t normally get everyday. I’m excited you guys are going to be back too.

Lee McKnight:

Yeah I am too, and you can actually… I’ll finish it, but like at those round tables, you could actually see, to your point, these agencies never get to talk to each other unless you’re in a group like AMI for example. Even then, you’re so busy, but to see, at one of my round tables that kind of got away from me for about 10 minutes in a good way. These four agencies were just, “Oh my god, yes, that’s exactly what we’re…” You could see the tension on their face kind of release, because it felt so good to hear something else that they’re going through the same thing. I know that sounds so, “Yeah no kidding,” but man it really was very cool. You just don’t get that.

Drew McLellan:

You just don’t feel as alone.

Lee McKnight:

Exactly, thank you.

Drew McLellan:

I think sometimes running an agency is a lonely thing. That, for me, is a big part of the AMI community is just reminding everybody that there are other people are going through what you are going through and you could be helpful to each other.

Lee McKnight:

Totally.

Drew McLellan:

Yeah. All right so if folks want to start following your videos if they’re not already doing that, most of them probably are, but if they want to keep track so they get notified of when you have new reports released, when this scorecard comes out. What’s the best way for people to plug into your world?

Lee McKnight:

Yeah the best way really is just the main site, which is rsuus.com, because then you can find on our resources drop down, all the content right there and then we’ll post when things are coming out. That’s the best place to go, so we appreciate it.

Drew McLellan:

Yeah you guys have a ton of great content. Everybody needs to head over there and grab that because what’s awesome about RSU is that they live so deeply in our world, and all they do, just like me, all they do every day is talk to small to mid-sized agency owners and leaders, and so the content is laser-focused, just about your world and your life and your challenges. There’s never going to be a report or a video or something where you don’t get a nugget out of it that you can put into play. Just the depth of expertise, because of the narrow focused, back to our specialty conversation from earlier, makes all of their content super relevant for all of you, so make sure you head over and do that.

Lee McKnight:

Well that means a lot, especially coming from you Drew. I appreciate it.

Drew McLellan:

Yeah. Lee thanks again for coming back on the show.

Lee McKnight:

Yeah that’s for having me. It was awesome.

Drew McLellan:

I will see you in a few months, if not before.

Lee McKnight:

Yeah.

Drew McLellan:

The report was fascinating this year. I mean they’re always fascinating, but…

Lee McKnight:

Cool, thanks. Yeah hopefully it’s helpful to folks.

Drew McLellan:

And kind of reassuring. Last year’s was a little hard to read.

Lee McKnight:

It was.

Drew McLellan:

Yeah, it was tough.

Lee McKnight:

It kind of was.

Drew McLellan:

Yeah this was more fun to read, yeah.

Lee McKnight:

Right, I know. Yeah no it was. Yeah we were pleased with that.

Drew McLellan:

Yeah. Thank you again. Appreciated.

Lee McKnight:

Thanks Drew.

Drew McLellan:

As always, happy to have you on the show and I’m sure we’ll have you back.

Lee McKnight:

Awesome, yeah that’d be great. Thanks for having me.

Drew McLellan:

All right guys this wraps up another episode of Build a Better Agency. All through the conversation, but especially at the end, I mean we literally gave you a checklist of things you need to be thinking about and doing as you dust off your bis-dev shoes and you get back out there, however out there it means. Whether you’re staying at home or you’re getting on a plane, you now have some really solid action items that you can put into play to make sure that you are elevating the agency sales process and getting those opportunities, those at bats, and hopefully winning some of those opportunities as well. Take all of that to heart. This is not a listen passively episode. This is a go do something with this content episode. As always, I love bringing you actionable items and we delivered those to you in spades, so take those and put them into play and let me go how it goes.

In the meantime, as always, I want to pause and thank our friends at White Label IQ for being the presenting sponsor. They do White Label design dev at PPC. Lots of AMI agencies, my own agency relies on them on a regular basis to expand your team, or in some cases because you don’t want to have devs on a team, and you want an outsource partner, they’ve been an AMI member for 20 years so I can tell you these are people of great integrity and they get it. They are agency people so they understand your world. Go checkout whitelabeliq.com/ami for a special offer, and as always, I just want to thank you for listening.

I know how busy you are, and so that I get to hangout with you or walk the dog with you or be on the treadmill with you or be on the subway with you, wherever we are right now, just know that I am enjoying the ride and I’m grateful that you’re taking me along. I’ll be back next week with another guest. In the meantime, you know how to track me down. I’m just [email protected] or you can find me on all of the social channels. All right, we’ll see you next week. Thanks for listening.

Thanks for spending some time with us. Visit our website to learn about our workshops, owner peer groups, and download our salary and benefits survey. Be sure you also sign up for our free podcast giveaways at agencymanagementinstitute.com/podcast giveaway.