Agency Management

Are agencies a dying breed?

I always find it fascinating when conferences bring together a panel of professionals and ask them to look into their proverbial crystal ball and tell us how the world will be different. A couple weeks ago, during AdvertisingWeek's conference, a panel that consisted of Jack Bamberger (SVP of Global Partnerships at Oath, Jeannine Falcone, the Managing Director of Digital Marketing for Accenture Interactive, Kelly Mooney, Co-lead of IBM iX Studios, Stephanie Anderson, CMO and Strategy Officer at AI Media Group, Andrew Bailey, Partner and CEO of The & Partnership and Tim Castree, Global CEO of WAVEMAKER) pretty much predicted that agencies will not exist. You can watch the entire panel discussion here. A takeaway quote that you might listen for -- "In 3-5 years, agencies have a 30% chance of  survival." Have no fear -- they're wrong. First note that they all work for companies that sell with the "if you don't want an typical agency" line.  They are positioned against agencies already.  So of course they don't want to suggest that agencies can or will flourish in the future. Which doesn't mean they are completely wrong. As I have said many times, agencies need to: Stop focusing on selling stuff and instead sell their smarts, counsel and insight Need to re-think their pricing strategies Need to teach their account people how to ask better questions/be a strategic thinker Need to invest in continued education for themselves (owners) and rising stars I do believe that agencies will have to continue to evolve (as we always have) to stay relevant.  We have to get back into the C-suite.  We have to understand that we can't exist if we only serve the CMO anymore.  Our job is [...]

How to Prevent Scope Creep when Scaling Your Business with Ryan Meo

If there’s one type of project that every agency struggles to do profitably – it’s websites. But what if it was possible to do web dev and not lose your shirt? My podcast guest Ryan Meo runs, a private label website services outsource solution for agencies. He and his team have web dev down to a science, making great revenue on the types of projects that many agencies struggle to deliver on time or anywhere near the budget. One of the secrets to their approach is to focus on what their clients aren’t getting instead of what they are. Ryan and I spill all of his secrets starting with: How Ryan started selling websites -- even though he didn’t know how to build them Taking a custom service like web design and making it scalable Why you have to prevent scope creep by being firm with clients on what their deliverables are (or by moving them up to a higher package) How Ryan is able to charge a low, flat rate for his websites and why he puts a lot of focus on what isn’t included in those packages How to prevent scope creep, especially as a web dev shop Why you shouldn’t turn away customers who can’t afford your bespoke services Why agencies make a big mistake by talking too much in the initial call with a prospect Building a strong relationship with an outsourced web-dev shop like Ryan’s Why your project manager makes or breaks your agency The importance of over-communication How to mitigate unrealistic expectations What the ideal agency looks like for Ryan Ryan Meo has worked with hundreds of agencies and built thousands of websites over the years. About 10 [...]

Attention CEOs: Accomplish more by doing less

Most CEOs are doers. They’ve built their businesses from the ground up and revel in the satisfaction their successes bring. But they can’t do everything themselves, and that’s OK. So, what should these doers actually do? When do CEOs delegate, and when do they take the lead? As a fellow CEO, I’ve contemplated this very question. I’ve found that involving myself in day-to-day tasks and issues can quickly consume my time and infringe on long-term goals. But CEOs need some level of involvement in every aspect of their business to make sure the company is on track to reach its long-term goals. The question isn’t deciding which areas to pay attention to but how you should interact with each aspect of the company. Resist the Urge to Do The balance between involvement and “doing” can be difficult to achieve because CEOs didn’t reach executive status by sitting back and delegating tasks to others. They got their hands dirty and took care of the nitty-gritty details. But once you’ve established processes and hired a dedicated staff, dissociating yourself from every decision can be difficult — and jumping into daily disputes can put your company at serious risk. For example, Chuck is the CEO of an advertising agency who used to head up the digital department. When his team is slammed and trying to meet a deadline, his first inclination is to dive in and help. However, spending a week writing code and testing a website isn’t the best use of his time because the areas that require his attention won’t get covered. As a company grows, it’s important that employees do their specific jobs so every aspect is taken care of. If Chuck loses sight of [...]

Why Agencies are Notoriously Bad at Wooing New Business

New business isn’t something most agencies worry about — until it’s too late. Unfortunately, “too late” is often the moment after you’ve lost your biggest client. Every agency owner dreads this moment. After receiving the call, he rallies the leadership team to bring in some money, and the creatives get to work sending out some direct-mail pieces. Meanwhile, the agency owner pours himself a drink and sits down to put together a list of who will be laid off if the agency can’t drum up some revenue. It’s a bleak cycle that only ends after the agency either lands a new account or suffers a round of layoffs. One reason many agencies struggle with new business is that the process often depends on just one person. If that person gets busy or distracted, new business efforts come to a grinding halt. Other times, it fails because the agency owner doesn’t enjoy the process or he’s too caught up in his day-to-day responsibilities. But most of the time, it’s because it’s inefficient and takes too long to engage in every day. When it’s not a priority, it only happens when work is slow or when a big client suddenly ends a relationship. And when the worst does happen, it triggers a temporary flurry of new business activity. As writer Rae Ann Fera put it, “Long lead times, long pitch lists, layers of consensus needed to select a partner, layers of meaningless paperwork for RFPs, requests for spec work, lack of access to decision makers…when it’s bad, it’s pretty terrible.” If and when the agency manages to replenish its roster, it gets busy very quickly, and new business falls by the wayside once again. Instead of a last-minute [...]

Why Your Agency (Not Your Clients) Should Come First

Anyone who’s ever worked in an agency knows how demanding clients can be. If you keep your clients happy, you’ll keep your agency happy, right? Wrong. As an agency owner, it’s all too easy to get sucked into the day-to-day tasks of client service. It actually much better for your agency when you do exactly the opposite. Spend the bulk of your time developing your agency’s processes, people, and future, rather than talking with clients. You'll see these benefits for your agency when you step out of the weeds and into big-picture planning. Maintain forward momentum. Employees throughout the agency see you as the visionary who sets the course. If you’re not tracking trends, keeping tabs on industry shifts, and anticipating new business needs and opportunities, no one else will. It’s your job to push the agency to evolve and to take your clients with you. Attract -- and retain -- great talent. Employees want to work somewhere with a purpose. As the owner, it’s important to identify and retain people seeking more than paychecks. The more you’re able to get out of the weeds, the more opportunities you provide for your best people to grow. Set the right precedents. Clients need to trust everyone on your team. If you’re too deep in day-to-day tasks, you’re communicating to clients that you don’t trust your people enough to let them handle things. Plus, it makes it hard for you to escape the office. Owners who operate at too granular a level can’t take real vacations, turn off their phones, or disconnect from work. It’s not healthy. Your 5 Most Important Daily Agency Tasks Rather than spending your time answering clients’ day-to-day questions, devote your time to things only you can do. These are the five most important tasks you, as an agency owner, should do on a daily basis: [...]

Here’s Why Your Agency Didn’t Get Hired

When a client chooses not to hire your agency, it's easy to start second-guessing yourself. Often, I hear from agencies that are curious to know why they were disqualified and what they can do to improve. In our 2015 report, Agency Hiring & Firing Insights, we got the scoop on what 500 marketers -- CMOs with budgets up to $10 million -- believe and how those beliefs influence whether they hire or fire an agency. The results surprised us. We found that a whopping 94% of respondents believe their search and selection process is effective in finding agencies that are good fits for their organizations. So if their processes are so effective, what's that "special sauce" that makes them hire an agency? We saw a range of answers -- everything from "gut" to "socializing with clients" to a "review by a variety of staff, not just the marketing department." But we also learned a number of surefire deal breakers. What's Getting You Kicked to the Curb? We asked clients why they would disqualify a firm. These reasons came up consistently: The agency is a generalist. In other words, it doesn't have experience in the client's industry. It's increasingly important for agencies to find their niches and stick to them. The agency personnel is arrogant. The employees are self-aggrandizing or imply that the client should be grateful just to work with them. The agency has poor testimonials. The potential client reaches out to the current clients (often on LinkedIn) and learns that it hasn't grown those clients' businesses. The agency brings a pitch team, not the people the client would be working with on a daily basis. Clients want to know exactly with whom they'll be [...]

Effective Team Building and How to Get Your Team to Work Well Together with Marcus Blankenship

For every agency the team you’ve assembled has a huge impact on your bottom line. You absolutely want to hire skilled, smart team members. You also want to have every player enhance the culture of your shop. But at the end of the day, you need them to work within your agency’s system and contribute to making the entire agency stronger and better. In my conversation with my podcast guest Marcus Blankenship we explore how to create the a dream team through better hiring, smarter accountability and the importance of regular feedback. Effective team building and keeping that team intact is what makes an agency money. Marcus and I show you how with: Why you must identify your high and low performers Why you shouldn’t be a passive-aggressive leader Why you can’t hire anyone you can’t fire Structured management: why you can’t set people free without management and why you need to set up strong management systems when your agency is small How to effectively build a team How to get your team to work well together Why consistent one-on-one meetings are so crucial What happens in your employee’s head when you cancel a one-on-one meeting How to create a safe environment where the people below you are willing to give you the feedback you need Why you shouldn’t let feedback sit more than a week Marcus’ one-on-one framework guide Marcus Blankenship is a management consultant, trainer and executive coach for software managers and leaders. He helps companies hire the right people, create the right culture, and set up the right process which achieves their goals. Managing a team isn’t something learned in college. In fact, his clients often tell him “I never prepared for [...]

Hey agency owner — measure what matters

Want more money in your pocket -- measure what matters. Many agency owners want their agency to be more stable, more profitable and more predictable.  The truth is -- you can have all of that but it doesn't happen by accident.  You've heard the expression "if you want it to matter, measure it" and that's absolutely true. Here are some metrics you should consider tracking on a consistent basis as you grow your agency. Weekly: Timesheets completed (all time, billable and non-billable): Your goal should be 95% or better.  This means yours too, agency owner. Monthly: Gross billings: No specific metric but measure it against your annual goals. AGI: No specific metric but measure it against your annual goals. AGI ratios: Your AGI should be spent in this approximate ratio 55-60% People (all expenses tied to your staff. Salaries, benefits, payroll taxes etc.) 20-25% Overhead (Day to day operating expenses like rent, travel, professional fees, etc.) 20% Profit (EBITA) Profitability by client (It’s reasonable to shoot for a 10% minimum) AGI/FTE (your goal is $150K in AGI for every FTE) Write up/offs (are you adding profit to jobs or writing off time. Track both) Billable % (Overall staff billability should be 75% or higher) Utilization – what you actually billed (Overall staff utilization should be 60% or higher) Quarterly: Employee Satisfaction (On a scale of 1-10, how likely are you to recommend working at the agency to a friend?) New revenue ratios (70% of new revenue should come from current clients) New clients/sales: No specific metric but measure it against your annual goals. Average spend per client (you should set a minimum acceptable quarterly spend) Annually: Client retention (Goal should be 80% or higher) Employee [...]

How to Work with and Manage a Network of Freelancers with Bram Warshafsky

If you were going to build an agency from the ground up today, what would it look like?  For my guest Bram Warshafsky, it was an agency with a lot of technology and a workforce that was almost all contract labor. Bram and his team at 5Crowd don’t concern themselves too much with driving big brand strategy. They use their team of freelancers to take the brand strategy that already exists and find the best way to execute it. Most agencies have augmented their team with some freelancers but many struggle with managing those resources and vetting the potential partners to find the right ones. In this podcast episode, Bram shares his experiences, the trial and errors and his eventual successes and insights that makes it work so well today. Find the best freelance fit for you as Bram and I discuss: Why Bram started his agency, and why he went with the freelancer model What Bram’s internal team is like and how to work with freelancers to offset those positions Why 5Crowd focuses on production rather than strategy What a strong freelancer vetting process looks like Why 5Crowd needed to build their own software How being a production based agency has led to high client retention for 5Crowd What good marketing looks like Why you need to tell the story of how you save your clients money The three questions 5Crowd asks to figure out if they will take on a project Why 5Crowd has freelancers set the price How 5Crowd picks what freelancer to use for the right project Why you need to fully embrace technology to succeed How to get started with freelancers Recently named one of the Top 30 Under 30 [...]

How to Streamline Business Processes and Improve Workflow Efficiency with Chris Wilson

A lot of agencies want to grow and scale but it really gets to be a problem when they lack the proper workflow and systems and are unsure how to streamline business processes. Many agency owners bristle when they hear these words but without a shared workflow process, it is impossible to deliver quality or consistency throughout your entire agency.   This often shows up as: A constant cash flow crunch and you don't know why Not knowing if a project is profitable or worse, if a client is profitable A stressed staff who keeps re-inventing the wheel Everyone has their own way of getting work through the agency These can all be warning signs that perhaps your workflow could use some improvement. Chris Wilson helps agencies of all sizes address their workflow issues so they can move forward, scale and grow. He has an extensive understanding of the operation, management and workflow processes of agencies.   Chris joins me on Build A Better Agency and we talk systems and workflow.  I promise, it’s better than it sounds! We cover: The typical reasons that agencies decide they need to get better systems in place What Chris’ company Function Point does Mistakes that agencies make when it comes to starting to think about workflow and using a tool like Function Point How to figure out if your workflow process needs improving How to streamline business processes and workflow within your agency Why workflow allows people to put their brain flow in the right place Why systems have to be easy to use Why timesheets are absolutely necessary and why agency owners can’t be exempt from them Warning signs that your workflow needs improvement Making sure you [...]