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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.

Surviving COVID-19

I was recently a guest on B2B Growth’s podcast discussing how agencies can still prosper during COVID-19. I hope you take a few minutes to look at the overview of this podcast and listen to the full episode soon. I look forward to hearing what you think! Sweetfish Media — Surviving COVID-19 Working from home is changing how our industry functions every day. I have seen agencies gain more clients or working time as a result of COVID-19, but I have also talked to agency owners who have lost close to half of their clients because their specific market is no longer needed during this pandemic. There are also some agencies that fit right in the middle, who have not seen any loss or gain. In all of these scenarios, working from home during a pandemic is altering how our industry functions and who is coming out for the better. Right now, each agency is like a ship that is getting pummeled in a storm. For some of us, it’s the roughest storm you have sailed through; others have been through worse. Our goal is to make it to calm waters alive. To do that, we must remain calm, confident, and compassionate while surrounded by chaos. Unfortunately, we will have to make sacrifices in one way or another. Some clients will leave, and some employees might be unsatisfied with their amount of work right now. Remember that we are all going through challenges right now, and we must show up as strong leaders.  Let’s focus on metrics, specifically your Adjusted Gross Income (AGI). Fifty-five percent of that goes to loaded payroll, 25% is spent on overhead, and the last 20% should be profit. For those [...]

By |April 24th, 2020|

Give yourself room to grieve

We are living through what feels like a surreal moment in time. I don’t know about you, but there are times when I have to stop and think “Is this real? Am I really on house arrest, wearing a mask to the grocery store, and feeling offended when someone stands within three feet of me?” It happened to me today. The weather has finally warmed up and I was in the backyard, trying to exhaust the puppy so I could get some work done. I took in a deep breath of fresh air, laughed at the puppy pouncing on the ball I’d thrown, and thought, “today is a good day.” It felt perfectly normal. And then I remembered. It’s like my mind knew I needed the break and so, for a moment or two, it gave it to me. This past week was the first time since COVID-19 really hit the US that I was not on the run from 7 am - midnight, or later. Like all of you I’ve been busy, I haven’t had time to react to the crisis and what it’s doing to our world, our industry, our agencies, and our families. Many of you had to scramble to get your team set-up to work from home and then you were dealing with the client pauses and cancellations and from there, you went right into applying for financial aid in whatever country you’re from. We’ve been so busy trying to keep our head above water, we haven’t had a moment to step back and process what is going on. But I expect that for many of you — that pause will come this week or next. And in that pause you [...]

By |April 17th, 2020|

Documents that agencies are being asked for — Paycheck Protection Program

Many agencies in the US applied (or tried to apply) for the Paycheck Protection Program (PPP) on Friday or over the weekend. We've been getting reports on what kinds of documents they're being asked for and have compiled a complete list.  No one is being asked for ALL of these items but each application is requiring some combination of the items below...and in many cases, most of the items below. Completed Application Proof of ID and citizenship (driver’s license or passport) Articles of Incorporation/Organization of each borrowing entity Bylaws/Operating Agreement of each borrowing entity Copies of all owners’ Driver’s Licenses Payroll Expense Verification documents to include: IRS Form 940 and 941 Individual payroll reports for each employee for 2019 Payroll Summary Report with corresponding bank statement. If a Payroll Summary Report is not available, Employee Pay Stubs as of February 15, 2020 (or corresponding period) with corresponding bank statement, Breakdown of payroll benefits (vacation, allowance for dismissal, group healthcare benefits, retirement benefits, etc.) 1099s (for independent contractors) Report on healthcare premium payments for 2019 Report on retirement contributions for 2019 Bank records (to verify payroll figures) for 2019 Certification that all employees live within the United States. If any do not, provide a detailed list with corresponding salaries of all employees outside the United States Trailing 12-month Profit and Loss Statement (as of the date of application) for all applicants month by month Most recent Mortgage Statement or Rent Statement (Lease) Most recent utility bills (Electric, Gas, Telephone, Internet, Water) Signed good faith sheet or good faith letter  

By |April 6th, 2020|

Agency owners — rest your brain

I'm worried about you. I can feel the strain and stress when I talk to you or you ask a question in one of our open mic webinars or I get your text at 1 am because we're in different time zones and you can't sleep. The covid-19 crisis is a mother and there's not an agency on the planet that isn't feeling the effects. It's not all bad news. Many of you are busier than ever. Lots of agencies are hiring and every day, I get a text from an agency who landed a new account. On the opposite end of the spectrum, some of you have watched 50% or more of your AGI walk out the door and you're wrestling with managing the agency to the numbers -- knowing that may mean you have to lay some people off, despite the Paycheck Protection Program loan. Most of you are somewhere in the middle. I see this in my own interactions with all of you and we saw it in the poll we took of about 125 agency owners, asking about the impact of covid-19 on their agency. All of you are used to dealing with tough times -- when a key employee walked out the door or your gorilla client gave notice. You weathered those situations and got your team through whatever came next. But part of what make that more palatable for you is that you knew what to expect. One of the most disconcerting aspects of our current crisis is the unknown. Agency ownership already has an element of that baked into it, but not like this. I think most agency owners are in a constant state (even if they're crazy [...]

By |April 4th, 2020|

Coronavirus impact on agencies as the end of March 2020

Agency Management Institute partnered up with Orbit Media to do a quick poll of agency owners to find out what the initial impact of the coronavirus had been on their agency. Since everything seems to be changing hourly – it’s important for you to know the time frame that this data relates to. Most of us in the states started working from home between March 10 and March 16th. We launched this poll on March 25th and closed it a couple days later. Our goal was not to conduct proper research, obviously, but instead just to take a pulse on how things are going out there. I also wanted to compare how the general population of agencies were faring on comparison to the 250 or so AMI agencies that I’ve been communicating with on a daily basis. Our survey was completed by 122 agency owners or leaders.   There was an almost even split between agencies that were all B2B, all B2C and mixed and the agency offerings were equally mixed as you can see in the chart below.   One thing is certain – every agency’s work level is being affected by the coronavirus, but I think it’s important to point out that almost half (42.93%) are having either a net neutral or positive effect. I think it’s incredibly tempting and easy to only see the doom and gloom in all of the news stories, conversations and most dangerously – what we tell ourselves. Less than 20% of agencies reported a very negative or near disaster impact.  So far.  That perhaps that is the key phrase at this stage.  But, we have to control our lens on this situation or we'll be paralyzed.   [...]

By |March 31st, 2020|

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|