Agency Operations

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 [...]

Agency best practices — what to do when your client is stalled

Short of losing out on work, I'm not sure there's anything more frustrating then when a client is stalled on a project.  You know how it goes.  Client calls with their hair on fire.  You move heaven and earth to get the resources ready to help them solve their crisis and you're knee deep into the work when you get the call.  "We have to hold tight for a minute." Which of course, turned into 2 months. Or worse -- you don't get a call.  But you are waiting on something from the client (web content perhaps?) and you wait.  And wait.  But the client is stalled and not telling you. The worst part isn't the delay. It's that every day of the delay costs you money.  And it costs you even more money when they're ready to go again. You have to get your head back into the work, you have to go back and re-read the creative brief, and you often have to bring the team back together to get everyone back on track.  On top of all of that -- you need to shift work to accommodate the old project because when they come back -- they're always in a hurry to get it done. Ideally you can discourage clients from disrupting the flow of the work.  But even if you can't -- you shouldn't be penalized for a client not having their act together.  I get it.  Sometimes it's not your client but someone else inside their organization and sometimes, stuff just comes up.  But you know what -- you're running a business and it's tough to do that when clients behave in an unpredictable and unreasonable manner.  Which is what all [...]

Developing A Content Marketing Strategy that Actually Works with Joe Pulizzi

Strategy. Consistency. Focus. These are the key elements of content marketing strategy success in today’s content marketing world, according to my podcast guest, Joe Pulizzi. Joe is the founder of Content Marketing Institute and it’s cornerstone event Content Marketing World so he’s been teaching and living content for a long time. Today’s agencies have to figure out the content game. You need to know when your client needs to create content, how to make it sticky and relevant and how to do it profitably. The winning content formula of strategy + consistency + focus is what it takes to build an audience and that is where the value lies - in getting, keeping and maintaining an audience. Content for content’s sake is just more noise.   Joe and I help you to put this content strategy puzzle together by showing you: What agencies and clients need to do to develop a content marketing strategy that actually succeeds Why you need to focus on your email list more than people you are connected with on social media How agencies can leverage their own content better Why you need to focus on content in specific platforms over trying to be everywhere What differentiates the agencies that do content marketing extremely well Old school deliverables that still work today Why you need a content marketing mission statement Why the editing process is a crucial part of content marketing The ways smart agencies get smart enough to create valuable content Things agencies can do right now to get the content marketing techniques discussed in this episode rolling Joe’s events Joe Pulizzi is the founder of Content Marketing Institute, the leading education and training organization for content marketing, which includes [...]

Agency best practices — the new overtime law (2016)

The Department of Labor has finally decided how/when they’re going to roll out the new overtime law which is going to have a huge impact on agencies. And it’s not just agencies. It’s estimated that the preparation and management to stay compliance with this new law will cost US businesses $592.7 million and over there will be a $1.4 billion net transfer to employees. The 4As estimate that 25% of agency employees will now be eligible for overtime pay for every hour over 40 that they work. At AMI, we believe it’s closer to 40%, given that the agencies we work with are smaller (1-300 employees) and privately held. This is a complicated issue and there are no easy answers. As an agency owner, you’ve got to use the the time you have between now and December 1st to prepare for this huge change. Today, if an employee makes less than $23,660 and works over 40 hours, they are eligible for overtime pay. As of December 1st, the new salary threshold goes up to $47,476. Any employee who is not a manager/supervisor will now need to be paid overtime for anything over 40 hours. The $47,476 will increase every 3 years, so know this is going to be an ongoing problem for agencies. Given the way we work today, you can see how this is quickly going to be a problem. Your employees don’t work traditional work weeks or hours. Think about the time they spend in client meetings or traveling with clients at trade shows or other events. How about the time they spend traveling on behalf of the client. Even the plane time, if they’re working, need to be counted against the 40 hour threshold. [...]

Understanding Customer Value-Based Pricing as a Pricing Strategy with Ron Baker

Everyone in the agency business has a deep hatred for two aspects of your business. The billable hour and the timesheet. My podcast guest, Ron Baker, believes agencies should do away with both. (I disagree with him on the timesheet and you’ll hear why in our conversation). Ron’s philosophy is built around the concept of customer value-based pricing. He’s a huge value-based pricing advocate and a CPA but he’s no ordinary CPA. He and his team are committed to price certainty in all professions, including agencies.  He wants to help you have a conversation with your customer to determine the value of what you're creating, so that you're pricing the customer, not your services or the scope of work. Ron and I help you understand what your customers are trying to achieve and how to assign a value to the work you do to help them get there.  We answer many customer value-based pricing questions like:   Why Ron believes that the billable hour and the timesheet need to go Customer value-based pricing: the differences between different pricing plans Ways to add in additional value that isn’t more “stuff” How to start a value conversation The typical agency objections of value-based pricing and why they’re false How to succeed at the transition to value-based pricing Other kinds of mistakes agencies make when shifting towards value-based pricing The major benefits for focusing on value and the customer Action steps that agencies can take when deciding whether or not to utilize customer value-based pricing Ron Baker is the founder of VeraSage Institute, a leading think tank dedicated to educating professionals internationally, and a radio talk-show host called The Soul of Enterprise: Business in the Knowledge Economy. Ron [...]

Tips for Creating, Sustaining and Building Your Agency with Mitch Joel

Throughout the entire process of building your agency, you have a lot on your plate. Depending on where you’re at in the life of your agency, you may be struggling to eat something other than ramen noodles or on the flip side of the spectrum, you’re spending all your time servicing your clients and trying to keep up with the demand. Ideally, you are working towards being able to step away from the day to day and focus on big picture of working on your agency. You may have aspirations to sell your agency some day and really reap the reward of all your hard work. No matter where you are at, my podcast guest Mitch Joel can probably relate.   He has taken his Toronto based agency from a small three-man shop to a global juggernaut by doing all the things that AMI preaches to agency owners every day. He quickly moved his agency to specializing in a niche, he focused on what it took to be acquired – growth and margin, he found his sweet spot client filter, and on top of it all, he kept on learning and growing and gave his team the time and space to do the same.   Try to keep up as Mitch and I take you through all of these phases of agency life by showing you: Mirum’s unique structure Generalists vs specialists: the philosophical and financial reasons agencies should specialize instead of generalizing Building your agency so that it is sustainably specialized How to figure out if a client is a good fit for your agency Mad Men vs. Math Men: how to blend creative and data Why it’s more important than ever to stay [...]

How to Develop a More Profitable New Business Process with Lee McKnight Jr.

“We're a full service integrated marketing agency.” Sound familiar? Trying to be everything to everybody is just one of the big mistakes that agencies today are making when it comes to attracting new business. Agencies hate to leave money on the table, even if it’s “bad money.” But we all know what happens when you chase after or work with clients who aren’t in your sweet spot. They clog your new business processes and cost you time and money. My podcast guest, Lee McKnight, Jr. helps agencies solve this conundrum and many more in the dreaded agency quest for new business. He helps agencies get out of their own way and identify what makes them a unique option and just what certain prospects need. We cover a lot of ground in this podcast including the following: How to prevent your agency from making the major mistakes that agencies make all the time Why agencies need to specialize instead of generalize New business: how to develop a better, simpler new business process How to use a delicately balanced process that uses all different kinds of marketing Why patience is so key in closing on new business The importance of having one person who is the leader on a project Why there needs to be a balance between showcasing the figurehead and the agency The tools you’re going to need to put into practice the objectives discussed in this episode Lee McKnight Jr. is the Director of Business Development for RSW/US in Cincinnati, Ohio. They are a new business development firm that works solely with agencies and marketing services firms. After graduating law school, he ran away as fast possible from that profession and worked for an [...]

Implementing Efficient Business Processes and Systems with Brian Shea

Business processes and systems. Most business owners flinch at these words but the truth is that your agency cannot grow/scale without both. Processes and systems actually increase the ability to be creative by freeing your team from re-inventing the wheel every time they’re trying to get something done. That’s exactly what my podcast guest, Brian Shea brings to the table.  Brian and his firm, Shea Consulting take process and systems to the next level by helping agencies customize them so they can grow and scale efficiently. Through the use of systems and processes, they minimize the stuff you don't want to do so you have more time and energy to do the stuff you want to do.    In this podcast, Brian covers: How implementing systems is vital to successfully scaling a business. How looking at a business’s current processes can help business owners structure the company in a way that allows them to focus on the creative and strategic work, and delegate more tasks to employees, thus developing the employee’s abilities. How to dig deep and get to the actual cause of why processes, systems and software fail. The consequences an agency may face if they do not implement processes and systems. Great, easy to implement ideas for helping agencies connect with their dream clients. Brian Shea is the founder of Shea Consulting, where he helps companies become more proficient with their business development systems so they can enjoy consistent, sustainable success. To listen – you can visit the Build A Better Agency site ( and grab either the iTunes or Stitcher files or just listen to it from the web. If you’d rather just read the conversation, the transcript is below: If you're [...]

The Power of Audience Segmentation Strategies with Susan Baier

In today’s world of clients needing more data/insights, ROI for their marketing spend and micro targeting to avoid waste, research is key. Clients want an agency that not only knows how to gather data, but how to work with it, how to interpret it and most importantly, how to use it to the client’s marketing advantage. That can be a tall order when it comes to quantitative attitudinal audience segmentation strategies and research but my podcast guest, Susan Baier and her team know the ins and outs of this kind of research and know how to make it relevant to what you do every day. This kind of research goes beyond demographics to really understand what's going on with people; what they think, what they believe and what they want.  And it’s done in such a way that it provides you with a large enough sample of respondents to make it well worth your while. In this podcast, Susan and I uncover the power of specific, segmented research.  Among other things, we cover: how to find the right audiences for your client’s money how to better sell the idea and value of research to a prospect or existing client how to use quantitative attitudinal audience segmented research to turned an upcoming event into a major win how to use research in an agency setting including common mistakes to avoid. Susan Baier began her career as a brand manager for companies like Dial and ConocoPhillips and then switched over to the agency side leading strategic marketing initiatives and market research. A few years ago, she launched Audience Audit ( where she conducts custom quantitative attitudinal audience segmentation research. She helps her agency clients develop marketing and [...]