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Sharing Agency Performance Goals—It Changes Everything

If you’re operating your agency with the goal of achieving the performance metrics of 55/25/20 recommended by the AMI, it’s easy to see in any given month just how well the agency is performing. Those three numbers should be the basis to guide your decisions on everything from personnel to pencils. Setting goals is great, sharing agency performance goals though, that has the power to change everything. One of the most important questions agency owners should be asking themselves is a simple one: How many of your agency staffers understand or are even aware of those numbers and how they drive a healthy, sustainable enterprise? Is it just a few—perhaps your finance person and your number one key executive? That’s the most common answer, and it’s also a big mistake. As an owner, if you’re hesitant to educate everyone in the agency about the numbers, you’re literally managing with one hand tied behind your back. Here’s how sharing agency performance goals changes everything, empowers your team, and sets an exciting path for the future. Sharing Agency Performance Goals—Financial Transparency Fuels a Growth Mindset In coaching sessions I have with agency owners, one of the first things I want to uncover is the owner’s comfort level with financial transparency. If the owner is new to AMI, I’ll take them though the metric; 55 percent of adjusted gross income (AGI) is the target for the agency’s fully loaded compensation, 25 percent utilized for overhead, and 20 percent profit. For those who already know the formula, I work to understand just how deep this foundational knowledge runs throughout the agency. As an agency owner for 30+ years, I get the hesitancy about “opening the kimono.” A common concern [...]

May 29th, 2018|

Niches Get You Riches: What Your Agency Marketing Strategy is Missing

There’s that word: niche. And you’re likely thinking: “One more consultant is telling me to eat my vegetables.” If you are an agency owner and have thus far resisted niching as part of your agency marketing strategy, think you don’t need it, or are tired of the topic, perhaps I can change your mind. Niching is perhaps the best form of marketing strategy that can help get your agency where you want it to be. Niching has helped me generate over $10,000,000 as an entrepreneur. It’s the same idea I’ve taught to over a thousand graduates of my agency accelerator. In one case, an agency owner attracted over 2,000 leads for her business in just a single year leveraging this strategy. My goal is to help our clients make their agencies more successful, work less, make more money, and create predictable business models so that their agencies are assets that could potentially be sold at some point in time. When Drew asked me to share my insights with his community at AMI, I was excited to be a part of what he’s created, and I hope that some of what I have to share proves beneficial to you. Hope Marketing Isn’t Good Enough Referrals and word of mouth are the number one strategy digital agency owners use to grow their businesses. I call this, “Hope marketing” and it really isn’t a strategy at all. It’s called: Not doing anything. Hope marketing is the reason so many digital agencies struggle with predictability and scale in their business. And it might be why you can’t get out of the marketing and sales seats. When I tell owners that word of mouth is "doing nothing," the response I [...]

May 9th, 2018|

How to Build Your Agency’s New Business Machine Without Over-hiring or Over-automating

When it comes to sales, marketing agencies are at least 20 years behind the most cutting-edge industries. According to a Hubspot survey, 44 percent of agencies don't use a CRM, 42 percent haven't defined their ideal client, and 90 percent describe referrals and word of mouth as their main source for new business. It’s understandable. Historically, agencies were helmed by creatives. In the agency of record era, a competent shop could forge relationships, win several lucrative accounts, and keep them for decades. Ambitious sales activity was often seen as unnecessary or even distasteful. But it’s not the 1980s anymore. Nowadays, with internet-induced competition, industry fragmentation, and low distribution costs, agencies have to hunt. Agencies would do well to heed Peter Thiel’s advice: "Look around. If you don't see any salespeople, you're the salesperson." Thiel was speaking to startup founders, but it’s just as applicable to agency owners, or anyone else in a sales position who might not know they are. Okay, so what are we supposed to do about it? Below are seven lessons that will help get you started. Think Like a Medici Not DaVinci  If you know your history, you might know that The House of Medici was an Italian banking family who rose to prominence in the 15th century and created a humanist environment that empowered numerous Renaissance artists and helped them flourish. There was a dash of skullduggery along the way, but if you can factor that out and build a culture that personifies being a patron to your artists, you’ll be in good shape. However, there’s a twist here. Instead of being a creative organization that’s supported by salespeople, focus on being a sales organization that supports creative work. With [...]

May 1st, 2018|

You Must Treat Your Agency Like A Client To Truly Define It

In a saturated market of lookalikes, potential clients don’t want to hire the same agency everyone else is hiring; they want something different. To stand out and provide that experience to its clientele, an agency's leaders must identify what makes their point of view special and then use that differentiator to win new business. When our agency first began this process, we looked back to past experiences with clients and the common threads of those interactions. We discovered that we often helped clients optimize their marketing spend and focus on a different target audience than they thought they needed. The more we realized how effective this approach had become, the more we learned to match our clients’ return on investment to it. Eventually, that unique point of view led to our new tagline, "Create a love affair with your customer," which tells clients exactly how we can help in ways no one else can. Dare to be different. Agencies might provide similar services, but no two agencies are interchangeable. Consider this: If your agency exchanged logos with another, would anyone notice the difference? If not, you probably haven’t established the right point of view, which could be costing your new business clients -- as well as preventing your agency from owning its niche. None of us want to compete on price alone, however. “The cheap agency” is not a differentiator anyone covets. To provide the best service for a fair price, agencies must take a stand on what they do well and what they believe in. Sometimes, that means placing clients’ needs ahead of yours. No agency can serve every client equally well. By developing a standout point of view, agencies will naturally put off [...]

April 25th, 2018|

How To Level Up Your Agency And Gear Up For Growth

Doubling your agency’s size from roughly 35 employees to 65 employees serves as the leveling-up stage where you take on bigger and better clients (and often better employees to serve them). As an owner, you’re no longer in the weeds like you might have been with 12 to 35 employees. Instead, your main focuses are business development and finance. In my experience, business development is about making the C-level connections that drive business. It might occasionally require “roughing it” on the golf course or riding waves with an eclectic client, but keep an eye on the big picture: According to the U.S. Small Business Administration, small businesses created two-thirds of the jobs added in the last five years. You’re doing important work out there on the ninth hole. Sharing The Leadership Load When your agency reaches the 35-to-65-person stage, owners must be OK with being removed from the day-to-day decision-making loop. Your former department heads will probably become vice presidents to make room for more skilled and senior employees underneath them. While client satisfaction and retention remain important, a variety of metrics and key performance indicators (KPIs) will move into the spotlight. A team with diverse backgrounds and expertise will be especially driven by numbers, and you’ll often see incentive pay (likely in the form of a bonus program) directly tied to KPIs. Along with more rigid compensation structures, scaling up to the 35-to-65 stage requires structured responsibilities, and the agency becomes almost like a factory in terms of how jobs are brought in and where they’re assigned to from there. This doesn’t mean saying goodbye to creativity; it means, instead, that onboarding work and accomplishing it on time (and on budget) must now become [...]

April 18th, 2018|

The Ultimate Guide to Agency Partnerships

Strategic agency partnerships are one of the top lead generation methods. If you’re an agency owner then it is easier to get into partnerships with other agencies than it is to acquire new clients. Reach out to companies that are similar to your agency and ask them to send over their overflow work. It is the easiest way to build a base of clients. Let’s look at how to break down your strategy for agency partnerships into the steps mentioned below for the sake of easier implementation. Define a Goal for Outreach. Let’s say for instance you run a small dev-shop. You do a little bit of direct client work, but you want to get almost all of your deals through partnerships. That’s your new outreach goal. You will want to define what you are looking for and find a company that matches your goal. Define a Client Profile. What company would be the perfect client for your agency? Rank companies based on their hourly rates. If it is not possible to find the hourly rate because of the company size, then there are two places where you can look for this information. One is super specific to agencies, like clutch.co, and the second one is LinkedIn.   Go to LinkedIn. Define the search criteria as mobile app development agencies in the United States with hundred or two hundred employees. LinkedIn allows you to search for specific criteria, for example mobile app or even further specific searches like IOS. Filter your search results by specifying company expertise, number of employees, or other specifics. You can change the target to get more results. Once you’ve found a company that matches your search criteria, you have found a good pool [...]

March 23rd, 2018|

How To Stay In The Sweet Spot Of Agency Size

From an anthropological perspective, the evolution of agencies follows a predictable path, regardless of geographical location or market focus. Consequently, all five-person agencies tend to have key similarities; the same holds true for agencies boasting 200 or more team members. For someone starting or running an agency, the foreknowledge of an agency’s expected growth provides the opportunity to make wise planning decisions. After all, it’s always easier to prepare for changes and trade-offs than to have them suddenly thrust at your agency’s door. Whether your agency is in its infancy or you’ve already built somewhat of a legacy, you need all the information you can get to pivot correctly. Today, according to research, we are seeing a 38% reduction in average agency client revenue, so any chance to play Nostradamus is a significant opportunity. Analyzing The Metamorphosis Of A Standard Agency The top types of agency players include the brand-new agency with up to five employees, the mid-size agency of six to 12 employees and the more robust agency of 13 to 25 employees. Each agency arrangement has its own pros and cons, not to mention its possibilities for growth. In the smallest of agencies, everyone wears many hats, including the owner. Not only is the agency founder at the helm, but she’s also directing everyone’s decisions. Rather than a flat hierarchy, all personnel get their marching orders from one boss. Although this might seem chaotic, it’s necessary; money is tight and resources are stretched thin. A young agency of five or fewer people develops a desire to take any client, no matter the client’s needs, size, vision, etc. How else can it build a portfolio other than by saying “yes” without constraints? Anyone with marketing [...]

March 21st, 2018|

Are You Tracking These Essential KPIs in Your Agency?

Do you know which employees are most profitable? Which marketing campaigns are most successful? Where your most qualified leads are coming from? How many sales you will get next month? And perhaps most importantly, why? Essential KPIs (key performance indicators) are the path to understanding. Key performance indicators, or KPIs, can give you the necessary insight you need to answer all these questions and more. They can track and measure how well -and how poorly- every aspect of your agency is performing. If you want to grow, sell, or simply maximize your profits then essential KPIs are non-negotiable. But the thing about essential KPI’s is that they often times come with a pesky problem called analysis paralysis. This is being so caught up in tracking and analyzing that the original task never gets accomplished. So how do you track all of the essentials without getting caught up in the numbers? It starts by monitoring only what matters because while you can track just about everything you really don’t need to. There are also certain KPIs that are more important to digital agencies than they are to other industries. Below you’ll find the most KPIs that your agency needs to be tracking. Expenses Knowing exactly where your money is going will allow you to cut back on unnecessary expenses. Sometimes the simplest thing, like a software subscription you forgot to cancel, can cost your hundreds of dollars. You should break down your expenses into individual line items, then they should be categorized so you can see which areas are costing you the most. If you’re not strictly monitoring where every penny is going you’re probably throwing away a lot more money than you realize. One of [...]

March 19th, 2018|

The latest agency evolution with Robert Rose

[easy-social-share buttons=”facebook,twitter,google,linkedin,mail” counters=1 counter_pos=”topm” total_counter_pos=”leftbig” style=”icon_hover”] The truth is that our world as agency owners is in constant flux. Think back to the Mad Men days when we didn’t charge clients anything for creative or strategy. We lived and died off media commissions. That wasn’t hundreds of years ago, that was just a few decades ago. So it’s no big shock that our industry is, yet again, undergoing a transformation. We’ve seen it coming for a while and for many of you, this may be something you’ve already been thinking about or experimenting with inside your shop. Most agencies have been playing footsie with content. Your shop may be the exception but for most agencies, they’re good at creating content in volume but we’ve been too focused on getting done and not the true strategy underneath. It’s time for us (for both ourselves and our clients) to get serious about what thought leadership means, owning a distinct point of view/position and leveraging that point of view to generate revenue. That’s why I was excited to have Robert Rose on the podcast. Robert’s most recent book that he published in September with colleague Joe Pulizzi from Content Marketing Institute is called “Killing Marketing” and it’s going to really stretch your mind in terms of what is possible and what’s coming next for us as agency folks. Robert Rose is the Founder and Chief Strategy Officer of the Content Advisory which is a consulting and advisory group of the Content Marketing Institute. As a strategist, Robert has worked with over 500 companies including global brands like Capital One, Dell, Ernst & Young, HP, and the Bill and Melinda Gates Foundation. He’s the author of three books including [...]

March 19th, 2018|

How to Calculate Advertising Agency Commission Rates

I have been teaching the AE Bootcamp and Advanced AE Bootcamp for over a decade, and one of the things that always surprises me is how few AEs understand how to calculate advertising agency commission rates on media buys. When the rate calculation is incorrect, it can cost your agency a good chunk of the very thin margin of profit you can earn when you plan and buy media. Media commission rates aren’t some random markup. It’s fair and reasonable compensation for all of the work your agency does to plan and properly buy a client’s media.  And after the buy, the agency has to reconcile every single spot or ad to make sure the client got what they paid for. It’s very labor intensive, and without the proper oversight — many agencies can lose their shirts by missing out on the commission. Back in the good old days, it was simpler because there were fewer channels, but today, it’s a very sophisticated and complicated skill, and every agency should be properly paid for doing that work. This is why it is critical that everyone in your agency understands how to calculate the commission properly using the correct rate. When (since the very first ad was placed back in 1920) an agency says they get a 15% commission, what that means is 15% of the gross buy. To calculate that, you take the net cost of the media and multiply it by 17.65%. That grosses up the media 15%. While it doesn’t sound like a lot, it adds up quickly. Let’s say your agency places $1 million in media in a year.  If you mistakenly multiply that $1 million by a rate of 15% (meaning [...]

March 7th, 2018|

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