About Drew McLellan

For almost 30 years, Drew McLellan has been in the advertising industry. He started his career at Y&R, worked in boutique-sized agencies and then started his own (which he still owns and run) agency in 1995. Additionally, Drew owns and leads Agency Management Institute, which advises hundreds of small to mid-sized agencies on how to grow their agency and its profitability through agency owner peer groups, consulting, coaching, workshops and more.

The #1 Reason Why Agencies Aren’t Making More Money

Agency owners constantly ask me why they are always busy but are not making more money. The answer?—we write off too much time and overservice our clients to the death of our agencies.  How do we figure out how badly we are writing time off? What is your billability, and what is your utilization? Billability is how many hours your employees are working doing billable tasks, tasks that can be billed directly to a client you already have. Utilization is “hours” you actually assign to an invoice to a client. You do not have to bill by the hour, but it still starts with figuring out how many hours a task will take and adjusting your flat fee you charge your clients accordingly. Billability should always be more than your utilization. Your goal should be 65% of all available hours are utilized, meaning your billability average should be 75%. Keep in mind you will almost always overservice your clients. Every billable hour will not actually be billed, and that is okay as long as you stick to the goals above. One problem could be that your agency has too many people and employees are taking more time than necessary to complete tasks. This is called Parkinson’s Law. Each task you assign with a due date or time will use the full amount of time available to complete it, even if it can be completed quicker. You might have too many people, and there is not enough work to keep each of them busy at a pace that is reasonable. Another problem is overservicing your clients. Be clear with your team about how many hours there is to work on a project. People go over because [...]

By |March 28th, 2020|

Should you stop talking dollars and cents with clients?

There are days (and we love them) when price isn’t a barrier and that prospect gladly signs on the dotted line and off we go. But, we’ve all had the experience of being in front of a prospect who is excited to work with our agency until the conversation circled around to dollars and cents. The minute we went from helping them slay their dragons to how much it was going to cost — something happens to the energy in the room. Those kinds of conversations are what have driven a small number of agencies to try to come up with a different pricing model that eliminated the connection to selling time by the hour. We have some AMI agencies that have created a subscription model. Others have created a points system where they, in essence, created their own points system. If you’ve read the book The Marketing Agency Blueprint by Paul Roetzer, you may be familiar with this idea. Paul and his team at PR 20/20 have been using their point pricing model for a few years now and through their agency education arm, offer a free download, Sample GamePlan that show you how their point pricing model works. Here are couple different articles on the idea of point pricing, if you’re interested in learning more. PR 20/20 article on eliminating hours from agency pricing Articulate’s explanation This was originally published in the AMI newsletter.  To subscribe, click here.

By |March 23rd, 2020|

Gratitude in action for agency leaders

I think agency leaders and owners are incredibly generous people. I’m always astonished at how you take care of your people, often to your own detriment. You give to them in ways that mean you get a little less. It’s just who you are. So as I thought about this week’s message, I decided I might be able to help you scratch your natural tendency to show your gratitude in this crazy season we find ourselves in. Odds are you’re pretty good at saying thank you directly to your people. But I’m going to suggest you try a different tactic. Identify one of your super stars and take a few minutes jotting down what they do that is so valuable to you. If you can, capture a story of something that really illustrates their talent and value to you. Now, take that story and write a letter of gratitude to their spouse, kids, parents or whoever you think would be most proud to hear it. Tell them how awesome your employee is and acknowledge the sacrifices (missed dinners, Mom out of town, etc.) the family has made to allow your employee to thrive. Thank them for their willingness to let your team mate give their best to the agency and your clients. If you want to — include a gift card so they can all celebrate how amazing your employee is to you and for them. Don’t tell your employee you’re going to send the letter. Let it be a surprise. I think you’ll be stunned at the impact your letter has — both short and long term. It’s a gift they will cherish for a long time, as will their family members. And honestly [...]

By |March 16th, 2020|

60% of Your New Rev Should Be Coming From Existing Clients

When business owners are brainstorming new ways to grow their revenue, they first jump to their prospective new client list. Prospective clients who become new clients of yours are great for building revenue, but I argue to look at your current clients instead. Most of your new revenue should come from your existing clients, approximately 60-70%. Here are a few reasons why: You’ve already earned their trust. They’re accustomed to sending you money every month or every quarter. You’ve already demonstrated how smart you are and how much value you are providing. You are embedded within business on some level, and you have an opportunity to show how you could grow their business. These four things will add up to become an easier and faster sale than seeking out new clients. One of your responsibilities as a business owner is to teach your Account Executives (AEs) how to grow their book of business. Think of every AE as a franchisee and yourself as the franchisor; this will help open their eyes to this growth process. AEs will start thinking of how to grow their book of business instead of just maintaining it so that all of your clients are happy and satisfied with your services as they currently are. Additionally, they will start to see that if they are growing your business with the clients they are currently managing, you will give that AE more accounts and clients to manage—which helps them in the long run. There will be some pushback at first, feeling overwhelmed with their current workload. Start by breaking down agency math for them, showing them how much of the agency’s revenue goes towards adjusted growth income (AGI)—the money the agency gets [...]

By |March 14th, 2020|

The trailblazing benefit agency owners need to know about

Remember the “good old days” right after the recession when incredibly talented employees were easy to find, quick to hire and grateful to have a steady paycheck? The upside to that story is that in 2020 the economy is stronger, the job market is much more stable and everyone is making more money. The downside is — the days of just having a job being enough are over. Today, agencies are in a battle to recruit and retain talent and I don’t see that changing any time soon. Some agencies have adopted a blended staffing strategy (a mix of employees and a consistent contract labor pool) to combat this challenge. Other agencies are investing heavily in professional development and growth opportunities for their team (The #1 reason why an agency employee chooses to take a job/stay at an agency according to our 2016 research) to keep their top talent. But there’s a new benefit that is emerging as a deal clincher. Many of our employees (at every age) are strapped with student loans so a Student Loan Reimbursement perk is music to their ears and bank accounts. I wrote a story about this for Forbes, including some best practices for getting the most out of offering the benefit. I’m curious — if you’ve cracked the recruiting and retention code — what do you believe makes the difference? This was originally published in the AMI newsletter.  To subscribe, click here.

By |March 9th, 2020|

How to Give a Presentation Like a Pro

Public speaking is something many people fear — even visionary CEOs. Tesla’s Elon Musk, for example, has publicly chastised himself for his lackluster performances. Even if you’re not Musk-level famous, public speaking is an essential skill. It could be argued that every time you speak, you’re doing so to influence opinion, inspire action or stir up a certain feeling. You’d better know how to present like a pro. If you’re a business owner, speaking might arguably be one of the most powerful tools in your arsenal. I realized this recently when I interviewed Michael Port, a best-selling author on the subject. He reminded me that great speeches have changed the world many times over—like Martin Luther King Jr.’s “I Have a Dream” speech. What most successful speakers like Port will tell you is that natural talent only takes you so far. The key is practice. Many of the best public speakers approach public speaking as a craft that can be honed through dedicated persistence. Use the following tactics to improve your skills, whether you’re giving a big presentation, pitching to a potential client or even having one-on-one conversations with your employees. Home in on your goal — Figure out why you are speaking and why your audience wants to listen. Are you educating, persuading, or simply connecting with them? Your goal will help you decide which tactics you will use to engage your audience. Rehearse, but wisely — Steve Jobs practiced his speeches thoroughly, and it paid off. His keynote addresses were legendary, even praised by rival Bill Gates. Rehearsing will make you feel more comfortable and more likely to achieve your objective. A good rule of thumb is to spend less time on low-stakes [...]

By |March 7th, 2020|

A must read book for every agency leader

In our owner peer group meetings, one of the things we always do is share a recommended app, tool or book. It’s a really easy way to discover some new ideas and tools for getting better without lots of trial and error. One must-read book has surfaced to the top over and over again and it’s become an instant classic among my agency owners. I hear them referencing the author’s terminology and more important — I hear them changing their communication patterns for the better. Radical Candor by Kim Scott is a framework that shows us how to be both a better boss and a better colleague. The book is packed with eye-opening truths and practical suggestions that will make you feel like she’s been spying on your office. You’re going to recognize yourself in many of her stories and examples and best of all — you’ll see the way to significantly improving how you work with others, give feedback and get the best from your team, your business partners, clients and yourself. Couple reading this book with starting the one on one employee meetings I keep harping about (because they are that important!) and you can have a great 2020! This was originally published in the weekly AMI newsletter.  To subscribe, click here.

By |March 2nd, 2020|

Your Best Salesperson Called. She’s Inside Your Agency.

I repeatedly hear other agency owners lament their inability to find that mythical salesperson who can sell to prospects so owners don’t have to. My response is always the same: Are you sure that person isn’t already inside your agency? From my experience, successful salespeople have typically grown up in the agency (or at least in the agency world). Rather than a sales background, however, these potential sales stars often come from account services. These potential salespeople might not be perfect in all areas at first. Some might struggle with closing deals, for example. What they should have, however, are all the other qualifications of a great salesperson: excellent at building relationships, encourages long-term partnerships and upsells existing clients on your services. If you’re ready to look within your agency for the next dream salesperson, take your time. Put a lot of thought into why this person would flourish in a sales role, and ensure this person has the following qualifications: Knowledge of your agency and the industry it serves—This person must be fluent in your agency, its services and how it has helped clients reach new levels of success. The salesperson’s expertise should also extend to clients’ industries and verticals; otherwise, she won’t have productive conversations about how your agency can solve prospects’ pain points. Confidence—A successful salesperson must be able to naturally speak with authority. She should be comfortable reaching out and speaking to a wide range of people—from marketing associates at networking events to CMOs to business owners she targets with specific outbound marketing efforts. Sales Skills—The ability to create and maintain relationships is the foundation of any good salesperson. She must also know how to ask strong questions while also boasting [...]

By |February 29th, 2020|

What if you got paid to be a thought leader?

We’re all blogging, writing newsletters, trying to speak at conferences, etc. We’ve got content coming out of our ears but content does not equal thought leadership. If you and 1,000 other agencies all blogged about the new Pantone color of the year — that’s content, not thought leadership. No one is going to pay you to create that. But genuine thought leadership that makes me better at my job? Now that you can get paid for! Think about how much more motivated you and your team would be if your content actually made you money and helped your clients as well. Check out an article I wrote about thought leadership and the fine line we walk to get it right.  As always, I'd love to hear your thoughts. This was originally published in the AMI weekly newsletter.  To subscribe, click here.

By |February 24th, 2020|