When there’s new client money on the table, it can be all too easy to ignore red flags and gut instincts. Our judgment can be temporarily clouded if it means account and wallet growth. However, I’ve seen how signing the wrong clients can cause agencies to lose money, reputation and even employees. Likely, you’ve experienced this kind of client before -- or perhaps you’re currently dealing with one -- but don’t worry. It’s a problem all agency owners, including myself, have dealt with at one time or another. To make things easier, consider a proactive "client filter" approach. To identify the ideal client for your agency, follow these simple steps: Organize your tangible needs: These can include a client’s industry size, marketing department size or company location as well as client budgets and potential future marketing goals. Create a list of intangible needs: These can include how collaborative a client is or whether a client has worked with an agency before. Keep in mind what kind of workplace culture your agency promotes—straightlaced, laidback, or something in the middle? Determine levels of sophistication: Sophistication meaning how established are your clients and how will that affect the amount of work they expect from you and what you can feasibly commit to completing. These scales will be unique to everyone, but try to find clients who are in a happy medium of sophistication in order to avoid problems from “big fish” and “minnow” clients. Draw your lines in the sand: Based on the needs and values you lined up in the first three steps, make sure you proceed forward by ranking every prospect according to that list. Will you accept clients who possess 50% of the traits on [...]
For many of you, the biggest pain point you are facing today is attracting and retaining talent. Agencies are really struggling to find strong prospects for their open positions and to keep their best players. I’ve even had agency owners tell me that they’re taking their foot off the new business gas pedal because they’re afraid they won’t be able to get the work done because of the staffing challenges. All of that means keeping the best players you already have on the team takes on an added importance. You can’t afford to lose a key teammate or be shorthanded. I spend a fair amount of time with agency employees and I think you might be surprised at what they want from you. They want: More mentorship from you (they want to learn from you because they admire your abilities) More training (this was their #1 criteria for job satisfaction) like digital certifications and our AE bootcamps More feedback when they’re trying something new More praise when they’re meeting or exceeding your expectations An opportunity to earn more (through defined, goal-centric bonus programs) when the agency does well A chance to stretch themselves with new challenges and by developing new skills As you can see, most of what they’re looking for won’t cost you a dime. But it will cost you some time and attention. I know what your days are like because my days are like that too. Don’t let your busyness cost you a key employee. Find ways to deliver on the list above to keep your team stable, happy and strong.
Most agencies struggle with sales. Honestly, I think one of the challenges of business development is that many agencies blur the lines between marketing and sales. Many agencies are getting better at marketing. Technology and social media, and all of that make it easier for you to create content or do an e-newsletter, or have a Facebook page. The challenge with that is — it’s not sales, it’s marketing. It feels like you have a new business program when really you have marketing activity. In some ways, the fact that agencies are better at marketing makes some even worse at sales. All of that marketing “stuff” makes them feel as though they can check the box of new business activity. But really that’s just erroneously putting two things in the same box that should be in separate boxes. Many agency owners say to me, “If we can get across the table from someone, we can make the sale.” And what that says to me is: A) they’re probably punching below their weight class because nobody wins all the time. B) they’re waiting for opportunities to present themselves as opposed to going out and creating an opportunity that really is the right kind of client, the right fit, the right industry, and the right size. Take a good look at your business development efforts. Do you really have a sales program or are all of your marketing activities blurring your vision? If you’re waiting for luck and referrals to completely fill your pipeline — is that helping you grow the agency you actually want to build?
No one buys homeowners insurance because they actually expect to have a fire at their house. But they know if they wait until there’s a fire, it’s too late. So, on the very first day of homeownership — they buy the insurance as well, hoping they never have to use it. For some reason, agency owners don’t always apply this same logic to their business. If you have any sort of partner (minority, silent, 50/50, etc.) you need to have insurance in case that partnership goes south. Hopefully, it will never happen but an illness, a divorce, a midlife crisis or a myriad of other things could put your business in harm’s way. Without the proper partnership documents that outline how you handle any threat to the agency — you can be left holding the bag. I’ve had many conversations with owners over the years who find themselves in a position they’d have sworn could not happen. And yet it did. A good partner will welcome this conversation and exercise. After all, they’re at risk if you’re the one who gets sick, goes off the deep end or has personal issues that trickle into the agency. If you’re a 50/50 partner, your documents should also outline how to settle disputes when the two of you are on opposite sides of an issue and neither is budging. Don’t be the person standing on their lawn, watching their house burn to the ground, all the while wishing they’d purchased the insurance. Protect your partnership now — when there are no issues, problems or worries. It’s a much easier conversation to have when you can’t imagine ever needing it.
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.
You might be wondering if love really adds value to a business.” Warren Buffett sure thinks it does. You’ve probably heard of him. He’s done pretty well financially by making a few wise investments in companies. Indeed, he’s generally regarded the best ever at making savvy investments. One day I came across a video interview with him on The Motley Fool website. They asked him a question I’m sure he’s heard a million times about how he determines whether a company is worth buying. And he gave the answer you’d expect. He talked about analyzing the numbers (for which he has a legendary, uncanny ability) and reviewing the competitive landscape and doing his due diligence on the management team. But if all of that comes up good, he still has one more step. He sits down with the CEO and looks for the love. “I look into their eyes, and I try to figure out whether they love the money or they love the business,” Buffett said. “Everybody likes money. If they don’t love the business, I can’t put that into them.” If they do love it, he said, then he buys the company and it becomes his job “to make sure that I don’t do anything that in effect kills that love of the business.” It’s not hard science, I know, but if you analyze Buffett’s 15-second answer, he uses the word love four times. Buffett knows love matters, because we, as human beings, do all we can to nurture and grow the things we love. If he sees dollar signs in the CEO’s eyes instead of love, then Buffett knows that the only thing this person is interested in is his exit strategy. [...]
I believe that one of the most challenging aspects of our work is the forced creativity. We have no time to wait around for a muse or to stand in the shower all day, hoping that inspiration will strike. Every day we need to be creative. Now. And I mean that in every sense of the word. The word creative no longer belongs to the creative department, if you even have one. Whether it is a strategy, a media channel decision, a messaging hierarchy or finding the right combination of words to get an uptick in Google Adwords — every single person in your agency needs to push past the mundane and expected ideas and find that diamond in the rough. Oh yeah — and they need to do it in 60 minutes. Or by tomorrow. Or in between meetings. I had an interesting conversation with Jason Keath, founder of the Social Fresh Conference about this struggle and from that, I captured 4 strategies to spark on-demand creativity in an article for Hubspot. Give one or more of them a try and let me know what you think.
The world was supposed to end in 1954. It didn't, obviously. But that didn't seem to matter much to the people who believed it would. Remember that. It's important, especially if you want to change people's opinions or behavior. Looking back at 1954, though, you might not be surprised that some folks thought we were facing our end here on Planet Earth. While the year began with the happy news of Marilyn Monroe marrying Joe DiMaggio, there were plenty of not-so-happy things that followed. The Hydrogen bomb test in the Bikini Atoll. The McCarthy hearings, which inflamed the Communist "Red Scare." The introduction of the "domino theory" that suggested that any Communism we let pass would lead to Communists taking over (and the end of the Capitalist world as we knew it). The seeds of the Vietnam War. There were even appearances from outer space, in the form of a meteor crashing through a house. But Dorothy Martin of Oak Park, Illinois, got something else from outer space. Her outer space-based sources told her in no uncertain terms that the world was going to end on December 21, 1954. Before the world flooded that night, a flying saucer was going to come and pick them up from Martin's home altar (also known as her sun porch). She believed. So did her followers. They sold their homes and gave away their possessions. That night, the minutes ticked by. The saucer didn't come. The world didn't end. What did Martin and her believers do? The rational answer would be that they realized they were wrong, and in varying levels of sheepishness, admitted it and went on to rebuild their lives. Right? I mean, that's what rational people [...]
I have yet to meet an agency owner who did not have a generous spirit. Whether your clients live in your community or not, every agency I know does a ton of pro bono work for the non-profits in their area. My agency has always been that way too. But I have to admit, I got tired of always being asked and feeling like a jerk when I had to say no. On top of that, I felt that in most cases, we were just slapping a bandaid on the non-profit’s issue. A run logo here or a golf tournament t-shirt design there or even a simple website now and then. But I never felt like we were leaving a true mark — I couldn’t see how we were deeply improving the non-profit in the long run. So I created a completely different way of approaching pro bono work. A way that allowed us to create events that attracted hundreds of thousands of dollars to some of the charities — year after year. Long after we were done working with them, they were still reaping the benefits. And we got a little publicity for our efforts as well. I described the pro bono transformation we experienced in an article for Hubspot and I’d love to hear what you think. I believe we can do good, make it really last, and benefit from it as well. I love that combination!
When digital was a novel offering, we saw agencies with that narrow focus receive extravagant valuations. Today, digital expertise has become a given rather than a point of differentiation. I heard the comment at an AMI event that basic online digital services are part of the “table stakes” that every agency must put up in order to be seriously considered by a prospective new client, or by a current client for some types of projects. That is consistent with my experience. Most agencies have it in-house and the others outsource it. But it’s a very rare agency today that just doesn’t offer digital services. Agency values continue to be simply defined as a semi-subjective combination of profitability, size, the client list and the services the agency routinely provides. There are plenty of other factors that influence the final number but we always start with these. So, what about the seller’s goals? Many agency owners begin down the path of selling their agency only to quickly retreat once they are shown the valuation and what they can hope to get as a purchase price/package A very important aspect of the transaction is the actual structure of the deal. How, how much, and when are you going to get paid? In many cases, the sales price doesn’t matter as much as when are you going to get paid. First of all, how much cash are you going to receive at closing? What can you expect? And, how negotiable is it? Let’s assume that your agency is profitable, with a respectable margin. Say that the net margin is 15%. (Note: net margin is the percentage of revenue remaining , after all, operating expenses, interest, taxes and preferred stock [...]