When I talk to agency owners about their employees, one of the common frustrations I hear is that they’re not strategic enough. Many owners feel like they have to stay in the day to day mix with clients because they’re the only ones who can develop fresh strategies and direction. In our AE Bootcamps, I teach the attendees to be nosy. We make so many assumptions about our clients’ businesses. But if we had to prove our assumptions, we’d be in trouble. The best and most strategic thinkers I know are the ones who ask the most (and most interesting) questions. I think agency people need to be good at sticking their noses into our clients’ operations. We should care about, wonder about and ask about everything from how billing is handled to packaging to who answers the phone. It’s all marketing. A great and easy exercise to do is to pull together your team (by accounts they work on) and make an extensive list of what you really don’t know about that specific client. Go into every aspect of their business from sales to production to distribution and operations and dig deep. Then, share them with your client and work on ways you can learn the answers. You’ll be amazed at how appreciative your client is, the things you’ll uncover and how much smarter your work will be. Teach your employees how to be nosy. Encourage them to go way beyond the questions on the creative brief. Celebrate when they start asking questions you hadn’t thought of. And best of all — watch how strategic they get.
When I started my own agency is 1995 I was about 30 and the perfect combination of arrogant and ignorant. “How hard could running an agency be? If you knocked it out of the park for your clients and delivered results, everything fell into place, right?” As you might imagine, that blissfully ignorant attitude got a very fast course correction. I learned very quickly that being an agency person and running an agency were two very different things and I’d better learn how to run a business if I wanted to survive. One of the truths that quickly became apparent was that whether you are a one-man-band or have 500 employees, the numbers matter. Most of you are probably tracking the basics like gross billings and hopefully AGI. I’ve previously talked about the AGI ratios and how that money should be divided amongst your people expenses, overhead and profit. If you’re not monitoring those — get on it and get on it now. But those metrics are not enough. There are some other indicators that will tell you very quickly how healthy your agency is/isn’t and what you need to do to get back on track. An article I wrote on this topic for Hubspot’s blog back in 2016 is as relevant today as it was three years ago. In that article, I identified 5 overlooked metrics that every agency owner should be monitoring. By the way, you shouldn’t be the only one watching these metrics. Your Account Execs should play a role too. At our AE boot camps, we help your AEs understand how they can help the agency get stronger, more profitable and understand what you need from them every day. We’ve got [...]
Let’s face it, having a nice client who doesn’t complain and just chugs along is a relief, now and then. But what if that nice client is simply non-confrontational and is actually unhappy? Where are they venting that frustration and will their silence precede you being surprised to learn that you’ve lost the business? It’s important that your account people (and you) understand how to get those clients talking, draw out the feedback that you need and actually build more honest rapport in the relationship. Chief Marketer asked me to explore how to recognize a Nice Guy client and how to get them to open up so you really know where you stand and how you can strengthen the relationship. Check it out and let me know what you think. Our September workshops, AE Bootcamp and our Advanced AE Bootcamp are getting close to maxing out. If you want to grab a spot — do it quick!
Most agencies use the the accrual basis method of accounting because it aligns more closely with how our businesses actually run and gives the agency owner more realistic numbers and metrics, so their decisions are better informed throughout the year. In the cash method of accounting – the day a business gets a check or cash from the client, it recognizes the revenue. This works well in a retail world. I walk into the grocery store. I pick up milk and bread and give the cashier some money. At that point, they have actually earned that money. Our transaction is complete. But in our world – in many cases, when a client gives us money, we haven’t actually earned that money. If the client asked for the retainer or the media pre-payment back, we have to return the money because it’s not ours yet. We haven’t done the work. But in the accrual model of accounting, transactions are accounted for when the transaction occurs or is earned, regardless of when the cash is paid or received. (Note: most agencies convert to cash for tax purposes.) Let’s play this out. You send a client an invoice for $30,000 which is 50% of a project’s fee, after they sign the scope of work. They send you a check. Your bookkeeper should book that $30,000 as a liability. Again – if they ask for the money back the next day, you owe them the $30,000. If your bookkeeper books that as a sale or revenue (like they would in the cash method) it would tell a lie. It would say that you did $30,000 worth of work in that month and you can spend that money without risk [...]
One of the first areas that many ad agency owners look to delegate is sales. Maybe they started their own firm because they liked the creativity and not the business side. Maybe they enjoy sales but it just takes up too much of their time. Or maybe they just aren't very good at it. The secret to success for agencies is the sales playbook. Why the sales playbook? Let’s take a look. It's common for owners to want to pass on the sales activities (and headaches) to someone else. Having a robust sales team—whether it's one person or ten—can be a key ingredient for successful agencies, and a sales playbook is an integral part of the process. Why? There are two things you have to keep in mind: As the head of your organization, you will always have some sales responsibilities—and that's the way it should be. You care more than anyone else, and you likely have the reputation, conviction, and authority that no one else in your organization does. If you just hire a salesperson, point them at a list of potential clients, and say, "Go get 'em!"... there’s a good chance they will fail, and an equally good chance your organization will struggle. Without a sales playbook, you are sending them out blind, expecting them to just figure things out on their own, which is rarely a recipe for success. Why Agencies Struggle to Develop Sales Systems When expanding to bring on salespeople, most agency owners think that when they hire a salesperson, he or she will ride in like a knight on a white horse and save the day—and they don’t really want to be involved in the process. They want to [...]
The toughest jobs are those that put people between two equally strong and demanding forces. Waitresses, for example, are at the mercy of their customers and cooks, yet their tips and livelihoods often depend on their abilities to provide high-quality service. Account executives are in similarly demanding positions. They have to serve their clients and their agencies equally. A great account executive functions as more than a mere liaison between client and agency, though. She is the client’s thinking partner, tasked with serving as both advocate and devil’s advocate. Account executives strive to understand the client’s entire business and to appreciate how marketing will influence every aspect of it. On the agency side, a great account executive is always working to make the company look good and, ultimately, improve its bottom line. He’s a student of business who knows how to build accurate estimates and then hold his team to those estimates so they come in on time and within budget. Above all, the great ones understand the job is all about balance and that losing balance means everyone involved takes a plunge. That’s why finding a genuinely talented account executive should be among all agencies’ top priorities. Asking the Right Questions When interviewing potential account executives, ask them to explain why they want the job. Ideally, they’ll tell you that their goals involve a love of driving business growth, both for you and for your clients. Ask about a time when the candidate had to explain to a client that a project was about to go out of scope. You’ll want to know how he handled objections and hear about the outcome. Similarly, ask about his systems for managing clients’ budgets and timelines. Great account executives have [...]
I was co-teaching a workshop on managing a multi-generational agency this week and one of the topics we covered was "interview questions for millennials" but I'm here to tell you -- these are killer questions for candidates of any agency or potential position. Remember to be a better interviewer, you need to be a better listener, which means talk less and listen harder/deeper. The problem is, you need to ask better interview questions to get better answers. So here are a bunch to get you started on the path of becoming a better interviewer: What are the two or three criteria you’re using in selecting your next company or position? What’s important to you at this point in your career? What would the ideal opportunity look like in terms of the industry, company, or title that you’re pursuing? What are your career goals? What do you think this job requires? What do you expect or hope to get out of your next job? How do you like to learn? What’s the coolest thing you’ve learned lately? Tell me about a time you failed. How did you react to the failure? What’s the one thing you’d change about your last job and why? Would you rather be an inventor or a leader? Would you rather have a small team, a shoestring budget and a lot of autonomy or a big team, big budget and multi-layered decision making processes? Tell me about a time when you felt helpless but you knew you would pull through Tell me about a time when you worked with a diverse group of people with different opinions Tell me about the volunteer or charity work you do. How do you like to [...]
You’ve heard me say it time and time again and my podcast guest John Fricks is singing the same tune about client business. “I think the CEO of an agency today really has two primary functions. One is to head up new business development. And the other one is to foster relationships internally that allow you to grow your existing clients.” This is just one of the priceless nuggets that John offers up from his vast experience on both the agency and client sides of the fence as well as his life today as a consultant. Join John and I as we talk about agency life, agency growth and how critical your team is to the agency’s success: How John managed to get huge accounts at his small agency (Fricks/Firestone) How to appeal to a CEO’s insecurities What John does at his new agency AntonWest Why agencies need to get involved in all areas of their clients’ business, not just the advertising Staying up to date on new technology and ideas Having great relationships with vendors that make them feel part of the business How to recruit and retain top talent What a culture must have to be truly collaborative How to position your agency in the marketplace How account people can gain the trust of their creatives Why it’s important to allow your employees to fail (when trying) What agency CEOs need to be focusing on today A leader of such national accounts as the Home Shopping Network, The Disney Channel, CitiFinancial, and Papa John’s Pizza as the founder and sole principal of $110 million Atlanta-based Fricks/Firestone agency, John Fricks is focused on the same kind of growth at AntonWest. In the seven-year transition [...]
One of the questions I get from agency owners all the time is "how many clients can an account executive manage?" On smaller accounts or where you don’t have multiple levels of AEs working on the same client, it’s pretty easy. There are two different ways of looking at it. The first one is an AE should be able to manage 5 – 7 times their annual salary. So if someone is making 50K, they should be able to manage between 250 – 350K. That means they can handle the account/s AND have time to work ON their book of business to grow the book of business by at least 10% annually. The other way to look at it is — it is a very rare AE or client type/style that would allow an AE to effective manage and have time to grow more than 500K in AGI annually. But when you start thinking about having an account coordinator and other folks on the same account, now it gets a little muddier. In theory, a client that requires that much attention is more layered, complicated etc. And there’s some inefficiency/duplication in the hand offs between the AE team. For example…two of them in a meeting, rather than just one. So when you have two account people of different levels on the same account, It’s more than likely they can’t handle much more than 5 times their combined salary. I’d say the same is true of three account folks. Depending on their maturity level and how much else they’re juggling — that should hold. In most cases, AEs who can't manage that much business are struggling in one or more of these areas: They can't [...]
Every agency wants to be their client’s go to partner. It’s not enough to deliver top notch creative or marketing strategy. Today’s clients (as we learned in our CMO research study) want an agency who can think beyond marketing and help them with solving wicked problems. My podcast guest, Gareth Kay, and his company Chapter, does just that. Tightly defining the fundamental problems that need to be addressed is what his creative business does best. They weave this “solve wicked problems” attitude into every aspects of their business and if that’s not what a client wants them to do – they actually offer to help them find a better fit. The result? They don’t just change their clients’ messaging or marketing campaigns. They change their business by solving wicked problems. Gareth comes from a traditional agency background but when he and his partners broke off to start Chapter, they knew they wanted to do something different. They’ve successfully made this transition and you can too. Gareth and I cover the following: Gareth’s decision to venture off and start Chapter What makes Chapter truly unique How to build a business model and hire employees when the work you do is very diverse Becoming a client’s partner through absolute transparency How to generate new business when you’re in the project based business Creating ideas and solutions vs creating “stuff” How Chapter develops and retains its staff The importance of transparency with your employees How Gareth’s perspective has changed since making the jump into ownership Things agencies can do to move away from widget sales to selling ideas and problem solving Gareth Kay is a strategist by trade. He’s co-founder of Chapter, a creative business partner dedicated [...]