The panic around COVID lockdown is plateauing. The storm has certainly not passed, but we’ve navigated out of the panic stage and now everyone is realizing they need to get back to business. Whether you live someplace that is still sheltering in place or you are figuring out how to get back to the office — we have to sustain our business through this and come out on the other side. If we do it well, we can not only come out on the other side but we can come on stronger and better than ever.
In this episode of Build a Better Agency, we walk through the five mini plans that I’ve been talking about in our weekly newsletter. I want to help you build them out.
- Operational/financial plan (how will you get the work done on time and on budget? Then, determine the minimum acceptable profit margin for your agency and use agency math to manage your way to never dipping below it)
- Team plan (how will you keep them motivated, efficient, profitable, and striving to serve each other and your clients)
- Client plan (you need to proactively guide each client into a position of readiness so that when they can step back in — they’re ready and more prepared than their competitors)
- Prospect plan (what can you talk about that will be valuable — based on what your prospects are ready to hear at any given moment in time)
- Vision of the future plan (what parts of normal are worth rushing back to and what could/should be different?)
The danger to every agency right now is that we get stuck in place and don’t shake the panic phase. If you and your team work through these plans it will propel you past the paralysis and into a future with a solid foundation. Don’t wait – get working on these plans today!
A big thank you to our podcast’s presenting sponsor, White Label IQ. They’re an amazing resource for agencies who want to outsource their design, dev or PPC work at wholesale prices. Check out their special offer (10 free hours!) for podcast listeners here: https://www.whitelabeliq.com/ami/
What You Will Learn in This Episode:
- How to build out an operational plan that enables you to continue completing work on-time and under budget
- Financial metrics that agency leaders should be paying attention to
- How to keep your team motivated, efficient, and profitable moving forward
- How to proactively guide each client into a position of readiness so they are more prepared than their competitors
- How to create a solid biz dev plan for your agency’s resurgence
- How to make difficult staffing decisions in times of crisis
- Different ways that agencies are successfully managing their teams
- How agencies are landing new clients in these difficult times
The Golden Nuggets:“As we rush back to normal, I want you to think about what parts of normal are worth rushing back to.” @DrewMcLellan Click To Tweet “If we don’t talk about planning when things are calm, it is difficult to make decisions when we are in crisis.” @DrewMcLellan Click To Tweet “Agencies usually fail because they run out of cash, not because they are bad agencies. Having accurate cash flow metrics is critical right now.” @DrewMcLellan Click To Tweet “You should be hard to surprise at this point—that’s the kind of financial and operational plan I want you to have.” @DrewMcLellan Click To Tweet “The best agency leaders have not stopped investing in new learning and skills development.” @DrewMcLellan Click To Tweet “The more you serve others together, the healthier and stronger your team gets.” @DrewMcLellan Click To Tweet “With C-19 going on, you have to be the best version of a leader that you can possibly be. But on an equal level, you have to hold your employees accountable and to a very high standard.” @DrewMcLellan Click To Tweet “You have more access to your clients’ C-suite than ever before. How are you capitalizing on that?” @DrewMcLellan Click To Tweet “Don’t let what’s happening now make the decisions for you. Use what’s happening now to start asking the right questions.” @DrewMcLellan Click To Tweet
AMI works with agency owners by:
- Leading agency owner peer groups
- Offering workshops for agency owners and their leadership teams
- Offering AE Bootcamps
- Conducting individual agency owner coaching
- Doing on-site consulting
- Offering online courses in agency new business and account service
Because he works with over 250+ agencies every year, Drew has the unique opportunity to see the patterns and the habits (both good and bad) that happen over and over again. He has also written several books, including Sell With Authority (2020) and been featured in The New York Times, Forbes, Entrepreneur Magazine, and Fortune Small Business. The Wall Street Journal called his blog “One of 10 blogs every entrepreneur should read.”
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Ways to contact Drew McLellan:
- Email: [email protected]
- LinkedIn: www.linkedin.com/in/drewmclellan
- Website: https://agencymanagementinstitute.com/
- COVID Resource Page
- Brief video explaining the 55-25-20 ratio
- Blog post: Cover your agency in case your client pulls the plug
- Blog post: What to do when your client is stalled
- Sell with Authority
- Facebook Group for the Build a Better Agency Podcast
- Giving Your Brain and Your Body Your Best
Welcome to the Agency Management Institute community, where you’ll learn how to grow and scale your business, attract and retain the best talent, make more money and keep more of what you make. The Build A Better Agency Podcast presented by White Label IQ is packed with insights on how small to mid-size agencies survive and thrive in today’s market. Bringing his 25 plus years of experience as both an agency owner and agency consultant, please welcome your host, Drew McLellan.
Hey, everybody. Drew McLellan here from Agency Management Institute. Welcome to another episode of Build A Better Agency. This is one of my solo casts. So as you know, every fifth episode, no guests, just you and me talking about something that … Odds are I’ve been talking to a lot of agency owner about, or it’s something that I know I need to talk to a lot of agency owners about. And so I am gathering us together to have this conversation.
I am recording this on May 5th of 2020. For those of you who are listening to this real time, you know that we are in the midst of sort of the wind down of the COVID lockdown. Many states are starting to open up any other states are experimenting with the idea of opening up, and for many of us throughout North America, throughout Europe, throughout Australia, New Zealand, we are on the tail end of sort of what I think of as the panic phase, and we are moving into a more of a containment phase.
Not so much that we have contained the disease because certainly that issue is separate and still going on, but the containment of the sheer panic that business owners and leaders have been in for the last really two months, and now everybody is sort of saying, “Oh, shoot. I have to save my business. I have to get back to business, or I’m so busy, I don’t know what to do. I need to control the business and really manage it through this crisis.”
So regardless of where everyone is at in terms of businesses, so clients, prospects, even us as agency owners, wherever we are on the spectrum of how badly our business has been impacted by COVID, and we are now sort of waking up from the paralysis of panic and realizing that we got to get to work, that we have got to sustain our business through this and come out on the other side. As I have said all along, we’re in the middle of a storm, we have to get our ship to the other side back to calm waters. And that’s the situation that you’re in right now, is also the situation that your clients are in right now.
And so I think what I’d like to do today is I would like to talk about the five mini plans that I’ve been talking about in our weekly e-newsletter and how you can sort of start to build those out. But before that, I want to do a couple of quick announcements. Number one, many of you have heard me talk about it. We have created a Facebook group for podcasts listeners. We just had a really great conversation yesterday, last night with an agency owner who is struggling with a lot of demand in their agency right now, and they’re struggling with getting proposals out quickly enough. And so we had a very interesting conversation about how to manage that demand and how to not give away your thinking for free.
So those are the kinds of conversations I want to have there. I’m not particularly inclined to just throw topics out and have you guys chat at me about them. I really want it to be a place where we can answer your questions and we can help you triage what’s going on inside your shop. So A, do not hesitate to join us. You have to answer three simple questions. Do you actually own an agency? What do you want to talk about inside this group? And will you be nice? That’s it. If you don’t answer the questions, I cannot let you in. The way the group is set up is, without the questions being answered you cannot be admitted into the group.
So please answer the questions, please join us, and then please use it as a forum to share ideas with other agency owners, to bounce ideas off of us and AMI. we’re happy to participate in those conversations. All right. The second thing I want to tell you about is the Build A Better Agency summit is happening. As you know, I am not fan of launching your first conference ever during a pandemic I don’t recommend it, but we did it and we had to move it. So we were supposed to be meeting in mid-May, instead now we’re meeting November 11th and 12th, still in Chicago, same hotel, we are working with them.
As you might imagine, all the hotels are putting into practice social distancing and new cleanliness standards and things like that. So I promise you will be very safe. But by November you are going to be hungry to be around other agency owners and learning from them and sharing your war stories and celebrating the fact that we have survived the virus and that our businesses are intact and that we are moving forward, and we have a game plan for 2021, and we’d like to help you put together that game plan.
So amazing speakers on topics ranging anything from biz dev to how to have multiple streams of revenue coming into your business, which would be a beautiful thing right now during COVID, to how do you prepare your agency to get it ready to sell if that’s what you were inclined to do, or what to look for if you have cash in the bank and you’re lucky to acquire an agency. We’re going to have all kinds of conversations around legal issues, research, new tools, trip campaigns, how to build a sales funnel, all kinds of things, how to step out and be an authority and the expertise that you have. So I would love for you to join us. We have about 100 tickets left.
So head over to agencymanagementinstitute.com, click on the Build A Better Agency Summit navigation button in the upper corner of the navbar, and you can read more about the conference, you can register, and you can come join us in Chicago to celebrate that we have survived this. Okay. All right. So here’s what I want to talk to you about today. So a few weeks ago in our e-newsletter, I was talking about that everybody coming out of this sort of paralysis and this panic stage that we’ve all been in, needs to start thinking about some plan stuff. And so the first one is an operational or a financial plan. So how are you going to get the work done on time and on budget, because that still is critical for us? I don’t care if you’re working from home, working from the office, working from the [inaudible 00:06:53], it doesn’t really matter.
And then also what are you willing to settle for in terms of profits? So I absolutely believe a 100% that you should not go into the red because of COVID. You’ve got to manage your business by the numbers. But I also believe that perhaps this is the year that you don’t hold yourself to a 20% profit like we normally do in the AMI world. So I’m going to walk you through some financial metrics that I want you to be paying attention to, and we’re going to talk about how to put together that plan. Then you need to have a plan for your team. So how do you keep them motivated, efficient, profitable, striving to serve each other and your clients, but also, how do you look at your team critically? Because now is the time for you to decide, boy, when I get to the calm waters, who performed during the storm and who didn’t, who showed up and how did they show up, and are these the people that I want on my ship moving forward as we continue the journey?
The next plan I want you to think about is the team or the client plan. So how are you going to proactively guide each client into not only a position of readiness right now, how do they get back into the marketplace if they’ve paused, or how do they capitalize on the fact that they haven’t paused, but what do they do to make sure that they are ready and more prepared than their competitors, and how can you be a part of that with them? The next one is a prospecting plan or a biz dev plan. So right now the question is who should you be talking to, and what should you be talking to them about? And I’ll walk you through some of that.
And then the last plan, and maybe the most important plan is, when you close your eyes and you picture your agency a year from now, what does it look like? So a few … I don’t know, maybe I think it was my last solo cast. I quoted this line that really has struck with me which is, as we rush back to normal, what parts of normal are worth rushing back to? So I think it’s an opportunity for you to look at how you’ve been running the agency, the kind of clients you serve, the size of your team, how you work, how you work as the owner or leader, and really rejigger all of that. I think this is the global reset button, and we all get a chance to sort of really think about how we come to market with our business and how we want to do that in the future. So we’ll talk about all of that as well. All right.
So I’m the financials, I’m going to walk you through some key metrics, but you need to have a plan. And what I mean by that is, I want you to be watching these metrics very carefully, and I want you to have trigger points. So when metric A it’s X then Y happens. So for example, if our AGI projections dropped to $50,000 a month, we need to reduce our staff by one and that person is [Babbette 00:09:46]. If our cash reserves dip below a $100,000 and it’s a result of a slow pay, then we’re going to do A. If our cash reserve is stable at $100,000 for two months, then we have to do A and B.
So I want you to have a plan. So I’m going to walk you through the metrics, but you’re going to have to decide, you’re going to have to look at your own numbers and decide what are the sort of crisis plans, what are the growth plans, both of them. So, if our AGI grows to X or AGI projections grow to X, we need to hire someone and we need to hire someone in this position. So this is not all bad news or are hard things to do. It could be happy news and good things to do as well. But I’m going to tell you that if you don’t decide this in advance, and if you don’t communicate this with your leadership team or your number two, or if you’re the number two, communicate it and come to an agreement with the owner.
If you don’t talk about this when things are calm, it gets much harder to make these decisions when you’re in crisis. And so here’s what I’ve observed over and over and over again in the last couple of months, which by the way is exactly what I’ve observed over and over and over again, even when there is no COVID. You guys struggle to make hard decisions, especially hard decisions around your people. And you often will make decisions that put the agency at risk, because you don’t want to let Babbette go, or you don’t want to furlough so-and-so. You don’t have that luxury right now.
There’s there’s too much going on. We are in the middle of what, no doubt is going to be a recession. That’s going to stick around for a while. You don’t have the bandwidth and the wiggle room and the safety net that is big enough to allow you to not make the hard right decisions for the right reasons. So you’ve got to really sort of stiffen up your spine a little bit. And again, as I always will say, I am not suggesting you should do this without heart. I am not suggesting that this is not a difficult decision, because I know it is and it should be, or messing with somebody’s life, but you’re not their mom, you’re not their dad.
And I talked to an agency owner just this week who said, “Well, I know I need to let Babbette go, and I know she’s in some credit card debt, or I know that she’s busy taking care of her mom who has Alzheimer’s, or I know that she’s got three kids in college, or I know …” And all of that is true and I love how compassionate you are, but at the end of the day you cannot protect Babbette and put the entire agency at risk. And given the storm that is around us and everything that we’re going through, that’s what you do when you stay overstaffed. You absolutely. Right now, can I stay overstaffed? For most of you, your people are by far the most expensive thing on your P and L, and you’ve got to manage that number very, very carefully. Okay.
All right. So let me walk you through some of the financial things that I want you to be thinking about. First, I’m going to go through these kind of quickly, because for any of you in the AMI ecosystem these are going to sound familiar to you. It’s also why I will tell you that I believe that AMI agencies are faring through this better than the average agency owner I’m talking to. And the reason why is because AMI agency owners have been sort of trained to pay attention to some of these metrics. So when they come to their peer group meetings, they have to talk about these metrics. They are filling out reports that have these metrics in them, and they’re running their business based on these metrics.
So whether you’re inside AMI or not, I would highly recommend it. I am watching this experiment unfold. The agencies that really do run their agency by these numbers that I’m about to give you are the agencies that are thriving and doing better than just surviving with their head barely above water through this crisis. So, all right, let’s talk about that. So the first thing I think you need to understand is sort of where you’re at as an agency. So if you are an agency of two or three people, your decisions are going to be different than if you’re an agency of 50 people. And right now I think it’s actually more difficult to navigate the storm when you’re smaller, because you have less bandwidth to sort of slide down the scale. If you’re 50 people, you can go down to 40 people and still be a very viable agency. If you’re three people and you have to go down to just the owner, that’s a whole different ball game.
So as I’m going through these numbers with you to sort of be mindful of where you’re at in all of that, right? So the first thing I want to talk to you about is AGI, which I have talked to you about before, but let me again just give you the very quick overview of that. So gross billings are vanity number. So we see in Ad Age and AdWeek and all of that, all of the gross billings, but that includes all of the expenses that we take on, on behalf of a client that we just that money just goes right back out the door.
So the only real number that matters to an independent agency owner is AGI. So you take your gross billings, you subtract all of your cost of goods, including your 1099 employees, and what’s left is your AGI, and your AGI is them dollars that you use and you use those dollars to cover three big buckets. Loaded salaries, so salaries and benefits, your overhead and profit. That’s what comes out of AGI, those three things. And ideally you would follow this metric. 55% of your AGI would be for loaded salaries, salaries and benefits, 25%t is for overhead, and 20% is for profit.
Now, many of you as soon as you got a whiff that COVID was coming to the States or coming to your country, you very quickly started to manage your overhead costs. So you renegotiated rent, you cut down on other expenses. And so for most of you, your overhead is very managed right now. In fact, many of you are at a various steer level of your overhead expenses. But what you haven’t done or most of you have not done yet is adjust the 55 parts. So what I want you to do is I want you to go and I want you to look at your AGI by month, and I want you to track it every month, and I want you to be looking at where you’re at in relation to your staffing.
So right now I’m going to say that for some of you, this is going to be a banner year. And then absolutely, if your clients haven’t slowed down, if you’ve landed new business, you absolutely should be in the vein by the 55, 25, 20, and you should be pushing for 20% profit. But if you are like most agencies and your AGI has been impacted, typically for most of you is between 10 and 20%, then 20% may not be realistic. And it may be that you believe that you’re going to come back out of this, you’re going to be back in demand and you need to keep your team. And so you may be willing to carry the salary and benefits and the overhead expense at 85% and only have 15% profit or 90% and have 10% profit. That’s a decision that you have to make, but I do want you to make that decision.
And so what’s important to me is that you are managing to a number that is in the black. So if 5% for 2020 is comfortable for you, that’s fine. But I want you to know what that number is and I want you to manage your AGI to that number. Okay? So that’s number one. And then the employee metrics, here’s where you’re going to make it or break it. So typically when we’re not fighting a virus, you should have $150,000 of AGI for every FTE. But if you’re in a small market, that may not be the case. So the combination of two metrics is what will tell you if you’re healthy or not. The percentage of your AGI, that is for your staff, so again is your 55, 80 because that’s a problem, and your salary for FTE versus your AGI.
So if I say to you, I want you to have $150,000 of AGI for every FTE that is fitting into the 55, 25, 20. That leaves you at 20% profit. If you’re dropping down to $130,000 of AGI per FTE, then that probably is going to mean you’re going to be sitting at about 10% profit. So use those two metrics in concert with one another, the 55, 25, 20, or whatever you decide those numbers should be for your agency, and the $150,000 of AGI per FTE, those two metrics are going to tell you if you’re overstaffed, because the bottom line is, and this sounds ridiculously simple but a lot of people struggle with it, how much money you take in is what determines how many employees you can have on staff.
And so if your AGI has dropped significantly because of COVID, then you’ve got to match what’s happening on the salary side, on the staff side, and these two metrics will tell you if you have done that to the extent that you need to, or if you have more cutting that you need to do. Okay. And I will tell you that depending on the kind of agency you are, your FTE averages in a healthy, normal time vary anywhere from 110 or $120,000 of AGI per FTE. That’s sort of a typical media buying shop or a design shop to over $150,000 if you’re a digital shop. So there’s some range in the spectrum depending on the kind of agency that you are. All right.
One of the other metrics that’s super important for you to keep track of right now is your billable versus your non-billable staff. So again, during sort of normal, healthy times, the number is 20%. One out of five employees should be non-billable and non-billable is 50% or less not billable. So odds are you, the agency owner or leader are not billable. If you’ve got a CFO or a bookkeeper, odds are they’re not billable. For some of you the way you handle your project managers, they’re not billable. So you can see that agency right there if I listed those three people, they have to have 15 people to be able to afford those three non-billable people. I will tell you that in a time of crisis, it is often the non-billable people that have to go.
In some cases, you just do without, like maybe you don’t have someone answering the phone or at the front desk, because right now many of you aren’t at a front desk. For others, you may be reducing head count in your traffic department, or you may be ratcheting your CFO down to part-time. I will tell you that the last person that should go is the person who manages your money. You can absolutely outsource that. And I’m happy to make references to people who help you do that. But if you’ve got a good money person inside and you’re crunching all of these metrics on a regular basis right now, that may not be the place to cut. Okay?
The other thing that’s super important that you measure is billable time and utilize time. What do I mean by that? What I mean by that is, 75%, and and this is agency-wide. This includes billable and non-billable people. Why? Because the billable people have to be [inaudible 00:21:44] billable to cover the non-billable people. And so you need to look at the entire agency and say, all right, I’m going to take all of the hours I have available to me for every employee, including the owner. So anybody who draws a W2 from us, I need to look at the hours that we have available for the year, and 75% of that time has to be time spent doing things that you can bill.
60% of that time needs to be time you actually build to a client. So billable time, 75% utilized time, meaning it actually went on an invoice. Whether you bill by the hour or not, it doesn’t matter, but you recoup that expense, that hour on an invoice to a client. It has to be at 60%. This is a critical number for you. You cannot afford during a recession to have people who are ineffective and inefficient on the team. So this billability and this utilization number are critical for you to measure. And I want you to measure it not only by the whole team, but I also want you to be looking at profitability by clients and by work type.
So by client is because there’s no reason for you to be busting a help serving a client if they are not profitable. If they are basically, if you’re paying for the privilege of serving them, then it’s time to cut them loose, or it’s time to have a conversation with them about the way you’re billing. All right. And then by project, because for many of you there is a kind of project where you are crushing it and making a lot of money. There’s also odds are kind of project where you again, every time you do a website or a landing page or a PR campaign, whatever it is, every time you do it, you go in the red. So you need to watch that.
So let’s get back to the employee. So the way I want you to figure this out is I want you to take the number of employees who gather a W2 from you, and I want you to figure out what that full-time equivalent is. So let’s say you have 12 employees and two of them are half-time. So that would mean you had to have 11 full-time equivalents. Multiply that number by 1920, reason 1920 is because that’s 48 weeks a year at 40 hours a week. And that will give you your available number of hours. So for example, if I had 10 employees, a ten full-time equivalent, and I multiply it by 1,920, that means that my agency has 19,200 possible hours, and my goal is that 75% of that 19,200 hours was spent on billable tasks. So I’m going to be looking at time sheets and task codes to see where that time was spent.
And 60% of that 19,200 hours was actually billed to a client, and the poor man’s way to figure this out is just take your average billable rate multiply it by the hours and compare that to your gross billings, or … I’m sorry to your AGI, because this is just time. All right? And you’ll see very quickly where you’re at. For many of you, this is going to be a frightening number because the reality is it’s not going to match up and you’re not going to be at 75%. You’re not going to be at 60%. And right now you need to dig deep. You need to dig, dig deep, to figure out what is going on and why you are as un-billable or under-utilized as you are. That’s one of the key metrics right now for making sure that you stay afloat and that the ship isn’t carrying so much weight that you are going to sink. All right?
There are a couple of client metrics I also want you to think about. What is your client balance? For example, do you have a gorilla? Is there one client who is more than 25% of all of your AGI? Because as you know, when you have a client that’s 25, 30, 35% of your AGI, they sort of lead you around by the nose. And I want you during this time to really look at the client balance and have a plan for adjusting that balance. For many of you, one of the silver linings, it doesn’t feel like silver lining right now, but one of the silver linings for you is that your gorilla client has got back. And they’ve sort of turned themselves into a monkey rather than a gorilla, which means that you are not as beholden to them as possible. And it’s also great incentive to get out there and try and drive more business that surrounds them so that even if they come back stronger, they are not as powerful and as influential inside the agency as they were.
So I also want to talk a little bit about cash, and I know I’m going through this fast because I’ve got a lot more to talk to you about and I don’t want you to listen to me for four hours today. So I want to talk a little bit about cash. The truth is that agencies usually fail because they run out of cash. Not because they’re a bad agency. So having a cashflow metrics is super important. So you’ve got to keep track of a couple of things. Number one, how much cash do I have on hand? So cash on hand is what’s in your checking account, your savings account. If you have petty cash or you have investments in the agency’s name that you can cash out very quickly, how much money could you gather? If I said, put all your money on the table by tomorrow at noon, how much money could be on the table? That’s your cash on hand.
And then I want you to take your total, your annual total overhead expenses. So that salaries and overhead. So loaded salaries and overhead and divide that by 12. So that is your monthly … So your monthly nut. Even if you make no profit at all, which I am not advocating, you’ve got to have this much cash just to run the business. So your goal is always, COVID no COVID, your goal always is to have two or more months of cash on hand. If you have a gorilla client, a client that’s more than 25% of your AGI, then you probably have to have four months of cash on hand, because if they pull the rug out from under you, which for some of you has happened, all of a sudden you feel cash starved. So you’ve got to have more money in the bank.
And in another episode, I’ll talk more about how to gather that cash on hand and where to keep it so it makes sense and you don’t misspend it because many of you if you have too much money in the agency, you allow yourself to convince yourself to keep your staff when you really you should be cutting staff or cutting expenses. So we’ll talk about that in another episode, because again, I’m just trying to give you an overview of things. So you need to know what your cash on hand needed. So let’s say my monthly expenses are $50,000. It’s just because it’s easy math, and I have to have a minimum of $100,000 in the bank. One of the things we’re seeing already coming out of the crisis is that clients are slow paying, and this always happens in a recession, it always happens when people are in crisis or in a panic, and we’re starting to see it affect agencies.
So at the very minimum, you’ve got to make sure you keep enough cash on hand to manage through slow client slow paying. And a line of credit is a fine thing, but you really do need right now to have some cash on hand. So most of you don’t have a lot of cash on hand right now. This came out of left field, you got sort of blindsided, you probably didn’t make the cuts fast enough that you needed to, or you’re here in the States and you are relying on the PPP money right now, but you need to build up a reserve because as we go into sort of what I think of as the stretch of this. So we’ve kind of rounded the corner of panic, and now we’re in the stretch and we’re going to be in the stretch probably for the rest of 2020. In terms of rebuilding the business, solidifying the business is really important that you have enough cash on hand to run the business.
And the other thing you need to do obviously is you need to be doing cashflow projections, and this can be super simple. So it’s what milestones where you get paid if you get paid by milestones or complete projects, will you complete and bill in the next 30, 60, and 90 days? So you want to sort of map that out for 90 days. What work will you sell or start in that same 30, 60, 90 days, and will you be doing milestone billing? A lot of you build a certain percentage upfront, or you have milestone billings baked into projects, so you have to put that into the cashflow projection.
And then you have to note, normally for most of you, most agencies get paid within 45 days of sending the invoice in then normal time, and so you don’t necessarily have to break this out by client based on the quickness of their pay, but in this case, you probably do. So you probably need to note those dollars by client and which ones are going to slow pay you in which ones are going to stay on a regular schedule. So the fact that you’ve built someone for $30,000 is very different than that person writing you a cheque for $30,000. So you want to note on your cashflow projection when you think the money is actually going to be in your bank account.
And then you also obviously need to have your estimated expenses for that same 30, 60, 90 days, and then what’s the net of the income you’re projecting for 30, 60, 90 versus the expenses for that same 30, 60, 90. That’s the kind of data you need right now. You need to know that you are staying in the black in terms of cashflow, because otherwise you need to make different decisions. All right? It’s going to be super critical as we’re in this long stretch through the summer that you really, really manage cash. Many of you are going to feel kind of choked around cash, and I’ll tell you a warning sign is, if you say to yourself, you know what? I’m not going to take a paycheck. I’m going to not take my dividend. I’m not going to take my regular paycheck, my monthly or bi-monthly paycheck. That’s a warning sign to you that you have a cashflow problem.
You should not, not pay yourself. So that double negative means you should pay yourself. Is important that you run the business well, and that you run the business based on the metrics that we know keep an agency healthy. And one of the things that is not healthy when the signs of an unhealthy agency is when the owner is not getting paid. So make different decisions than not paying yourself, because that is telling you that you’re making the right decisions for the right reasons. So once you have your cashflow projections, then what I want you to look at is what was it prior to March 1st of 2020? So what did it look like coming into COVID? And then what do you think it is now sort of mid COVID as we go into the stretch? What do you think that that is now, and how much tighter is it?
And then what I want you to do is, and I know this is going to be painful, and I want you to reduce it by another 40%. So, do you still have cash on hand? Because what that’s going to tell you is whether or not you have enough cash in reserve to really weather this, even if all of your clients start to slow pay you. So what was my cashflow projection going into March, what is it now Mid may, and what does that mid May projection look like if I take another 40% hit on my AGI, what does that do to my cash position, and can I weather that deep of a store? And if the answer is no, then you’ve got to figure out how you’re going to free up some more cash. And again, unfortunately, odds are that [inaudible 00:33:37], a salary is going to have to come off the books.
So again, quick review. AGI 55, 25 20, you can decide what that 20 is, but it has to be a positive number. What is my AGI per FTE? How am I monitoring that? What is my billable staff members versus my non-billable staff members, and what is that ratio? In healthy times it’s five to one. For many of you now, it may be asked to go to seven to one or eight to one. What is our billability and our utilization? What is my client balance? So what percentage of my AGI does each client represent, and how do I get that more balanced? How do I use COVID to my advantage to balance that out if I have a gorilla that’s cut back?
How do I build up business around them so that they are not so influential inside my agency as we come back to whatever new normal is? What is our profit by both client and project type? And any client that is a habitually unprofitable needs to either have a talking to or needs to go away. Now is not the time for you to be given away your time and your service, not the time. And you’re better off spending it on developing biz dev materials or doing other things than it is working for somebody for free. So don’t do that. A, never do that, but during this crisis, absolutely don’t do that, and managing your cashflow.
All right. So that is the financial plan I want you to have. So I want you to look at those numbers on a monthly basis, and for some of you, some of you are doing cashflow projections right now on a weekly basis and that’s fine. I want you to look at them as often as you believe you need to, to make sure that you have a really good handle, that there are no surprises. You know exactly what your money situation is, you know exactly where your cash is, you know exactly what’s coming down the pike in 30, 60, 90 days. Ballpark, of course the second to be exact, but that you are hard to surprise at this point. That’s the financial and operational plan that I want you to have.
So let’s say, for example, speaking of operations. Let’s say for example, you’re not billable at 75%, you’re not utilized at 60%. What does that mean? Well, what that means is that you need to figure out why. What is inefficient? Where are people spending more time than they should? Are they over-servicing a certain client? Are they not recording their time properly? Which means you can’t bill it properly, but then you need to dig into those problems. If the numbers tell you, you have a problem … I hope it goes without saying, but if the numbers tell you that you have a problem, you need to dig into that problem and solve it.
All right. So, let’s talk about people for a second. I believe that in a crisis, people reveal themselves to you. And so by now you’ve been surprised and impressed by some of your team members, and you’ve been surprised and maybe a little disappointed by others. And I know that you will give everybody the benefit of the doubt and that you know that they’re working in hard conditions and they’re scared and all of that. But beyond that, do not lose track of those insights because I think that they are very valuable. So now is not the time to ease up on holding everyone accountable. I know it’s hard to work for all. I know it’s hard to work with if you’ve got homeschooling or your kids, or your puppy eating your door jam, whatever it is. I know that it’s difficult, but that doesn’t mean that we can’t rise to the occasion. In fact, you’re seeing some of your employees rise to the occasion and you were seeing some of your employees actively avoid rising to the occasion or not capable of rising to the occasion.
So when every penny counts, we have to make sure we’re as efficient and effective as possible, and for us as agency owners and leaders, that efficiency and effectiveness is our people. So a few weeks ago I had a podcast episode with Adam Carroll and he gave some great, easy to follow tips. He calls it his heat framework. And obviously he does an acronym and for each of those letters, he’s got sort of a methodology or something you need to do to make sure that your team is being held up as being capable and accountable. And it is critical right now that we do that with our team. It’s absolutely critical.
So here are some of the ways that agencies that are really performing well are managing their teams. They are doing daily Zoom or Google Meet huddles and sort of trafficking what work has to get done today, and who’s doing it. So they are very quickly huddling up and sort of managing the day-to-day work. They are still honoring their one-on-one meeting schedule. So supervisors are having good conversations with their employees and helping them keep their head on straight, checking in on them in terms of mental health, taking good care of them, and they’re doing a lot of leave no man behind sort of Zoom calls or texts or phone calls where it’s just a personal check-in to make sure your team members are doing okay.
And by the way, who’s doing that for you? Who’s checking in on you to make sure you’re doing okay? I think during this crisis, it is super important that you have a strong support system. So whether that’s reaching out to other agency owners who understand what you’re going through, whether that’s reaching out to a mentor or a coach, you also need to have personal check-ins to make sure that you are doing okay personally, and it’s okay to raise your hand with any of those people and say, “You know what? I’m having kind of a crisis day. I would like to just curl up in a corner and suck my thumb today.” and asking them to help you sort of work your way through it.
Sometimes just talking about it helps, but make sure that while you’re caring about everybody else’s mental health, you’re taking care of yourself as well. And as you know, many of you know I wrote a blog post on giving your brain and your body a rest and I highly recommend you go over to the Agency Management Institute website and find that, and make sure that you are taking good care of yourself because you, captain of the ship have got to stay healthy to get everybody through the storm.
So other things that agencies are doing, they’re doing a weekly agency updates with lots of transparency around money, job security, client activity, and biz dev. And the reason why they’re doing that is because your employees have vivid imaginations. And if you don’t tell them what’s really going on, they are going to make stuff up in their head and they’re going to panic. And that means they’re going to be less effective and efficient at work. It means their mental health is going to struggle. So you owe it to them right now to be as transparent and honest as you as you can be about what’s happening in the agency, the decisions that you’re considering, how you’re managing through this, and it’s also a great opportunity during those weekly calls to celebrate people, to thank them for what they’re doing and to acknowledge them.
Agencies of course are great at playing. So there’s virtual happy hours, they’re doing word games, they’re doing getting to know you questions, Zoom background, and competitions. You guys are all good at that. They’re also setting some goals for themselves as an agency and also individually and sharing those goals with each other and sort of keeping a whiteboard if you will, a virtual whiteboard of those goals so that they have things to look forward to. The best agencies have not stopped investing in new learning and skills development.
If your team is not fully deployed, this is a great way to help them get prepared for a re-entry and to be even better and stronger than before, so there’s lots of people taking classes, getting certifications, things like that, which is great. They’re recognizing each other, they’re thanking each other. They’re trying to live in an attitude of gratitude. Now is great time to dust off your company values and to reteach everyone how they look in action. I’ll tell you, I have been watching you guys and you are living by your core values. As hard as it is right now, you are living by those core values, and this is a great time for you to re-introduce them to your team and to reinvigorate how committed you all are to following those.
And then many agencies are serving other people together, whether it’s a community project, people helping a client through a sticky situation and celebrating that, supporting a team member who’s having a tough time, or somebody who’s had a baby and you’re having a virtual baby shower, but the more you serve others together, the healthier and stronger the team is. All right. So you know what? C19 is calling on us to be the best version of a leader that we can be, and for many of you, you have felt the pressure of this. You absolutely need to be kind and understanding, but at an equal level you also need to hold your employees accountable and to a very high standard.
So think of yourself as, as I sent in an e-newsletter a couple of weeks ago as a benevolent drill sergeant, and do all you can to not only get good work from your team, but more importantly, prepare and assess them for your future version of the agency. So absolutely take care of them, but make sure they are the ones that you want. Are they the people you want to go into battle with? And if so, do everything you can to make sure that they’re successful. But now is the time to really assess your team. Who are you grateful for? Who have you thought multiple times since this started? “Oh, I’m so glad that so-and-so works for me.” And who has you gritting or grinding your teeth, and every time you see them pop up on Zoom or you get a Slack from them Or whatever it is, you just know that it’s going to be angst? Pay attention to that, because COVID gives us a chance to also … It gives us cover to level up our team.
And so if you were in the US and you got the PBP funds, do not let the forgivability of that 1% loan change how you run your business. If there’s somebody on your team that doesn’t really deserve to be on your team, that is not living up to your core values, that is not rising to this occasion, and you don’t have the work for them, now is the time to get rid of the C players rather than keep them. So take the loan or give the money back rather than keeping a C player on the team. Right now more than ever, your employees are watching right now and saying, “I am busting a hump and they are letting [inaudible 00:44:12] bat, sit on the bench and do nothing but complain and deliver things late or whatever she’s doing. Why am I busting out? Why am I not spending more time with my family? Why am I doing whatever sacrifices I am doing for the team if they’re allowing that to happen?”
If you cannot keep a C player busy and you can’t imagine what you would trust them with post COVID, then now is the time to make that change, right? Again, you’ve got to keep your team lean, you’ve got to manage to your numbers, and this gives you a very reasonable time to trim your staff if you need to. Again, they’re going to be fine. An employment has never been easier to get, and you are not responsible for all their life choices as I said earlier, or the circumstances they’re in. I don’t want you to make this decision cavalierly. I don’t want you to do this without heart and compassion, but I also don’t want you putting the entire agency at risk because you can’t do the hard thing. So here’s the what I would ask yourself. Who is showing up like an owner? Which of my employees are showing up like an owner, and who is sitting around waiting for me to tell them what to do? Very, very telling.
All right. Let’s talk about clients. Are they the ones you want? Not only should you be assessing whether or not you want the employees that you have, but I also want you assessing the clients that you have and saying, are these the people that I want to bust on for every day, and are these the people that are grateful and show up as a great partner? I want clients who are appreciative and who communicate well, and who tried to be fair, even if they had to trim back their budget. People who cared about us as a business, and us as people as well as themselves.
I want to serve those kind of businesses. Did my gorilla become more of a monkey? And do I want them to go back to gorilla status? Odds are no. Have you felt stuck in a never spoken, a just, understood, non-compete, where you felt like you couldn’t go after other clients in their vertical, which is ridiculous because they’d be in another market, but you knew that their undies would get into a bunch and have a cow, and so you were like, “Nope, not going to do that.” What this is really about is this is about you really looking at your client mix and being able to assess who you want to serve and who you want to sort of curtail.
So of the businesses you’re like, you know what? These people have been amazing, they’ve been great communicators, they’ve been appreciative of everything we’ve done. Now my question is, and this would be a great leadership team conversation. How do we become an essential business to those kinds of clients? How do we become the kind of business that they can’t imagine stopping, whatever it is that we’re doing? How do we demonstrate what we’re doing? How do we dot the I’s and cross the T’s so they can see exactly the ROI that they’re getting from our work so that they can justify to anybody, a board of directors, a C-suite, why they have to keep working with us and having us do the work that we’re doing.
That’s a great question to gather around, how do we become an essential business? Because for many of you, what you’ve learned you weren’t as essential to some clients as you thought you were. And in other cases, you have been gratified to learn that your client values you and your opinions so much that they are not willing to cut their budget with you, or they’re going to trim it a little bit and they’re already telling you when they’re going to bring it back. You have more access to the C-suite than ever before. How are you capitalizing on that? What do those conversations look like? What questions are you asking? And what are you offering to do as you sit with the C-suite, which many of you have been hungry to do for so long?
What are those conversations look like? How are you adding value? How are you showing up as a partner? What are you saying to them? How are you proactively coaching them? How are you helping them? So, for example, I have an AMI agency owner who serves a vertical, who because of the shelter in place, basically the entire vertical is shut down. And so because this agency serves many businesses in this vertical, what his agency has done is he has produced a bunch of social media assets for that specific vertical, and because their clients are all in different locations around the US, they don’t bump up against each other.
And what they’re doing is they’re giving their clients, their dormant, stalled clients, they are giving them a packet of social media assets that they can use every month, quizzes, factoids, visuals that they can use so that their clients can stay engaged with their customers, because they know once the shelter in place is lifted, those customers are going to start coming back to that business, and the agency wants the client, their client, to be in good shape, to have been active in communicating with their dormant customers.
And so they’re producing all of these things. It’s not hard for them. They produce it once, they allow each entity to customize it or personalize it, they are being a good partner. So just like you remember, who’s being a good partner. So what are your clients? Now I am not suggesting you do a ton of free work for everybody, but I think there is something you can do that doesn’t take a huge amount of time, that doesn’t take a huge amount of bandwidth for all of your clients and helping them get over this hump.
Another question to ask yourself is, are you in the right verticals? So I’ve got a lot of agency owners say to me in the last two months, “I picked this vertical, or I picked this industry, or I picked this audience, and now because of COVID, I’m questioning whether I’ve done that.” Well, you know what? A once in a decade event, like a recession, should not dictate how you do business. So I said to them, “Okay, let’s look at how much money you’ve made in that vertical in the last decade.” And it was a staggering amount of money. Great. So you’re going to go through a six month or a 12 month dry spell, but do you believe that industry is going to come back? Absolutely. Do you believe they’re going to need an agency? Absolutely. Then why in the world would you shift your position?
So don’t let this moment in time drive a decision around who you serve. It’s a fine question to ask, but don’t let what’s happening now make the decision for you. Let what’s happening now get you to ask the question, but your answer should take into account in much broader range of time than just this COVID crisis time. Okay. And then again, have you defined who your sweet spot clients are? You hear me talk about that all the time, and were you right? Were the sweet spot clients, the people that you thought you wanted to serve, did they show up for you in the same way? Did they show up as good partners? Do you need to go back and do that again? For some of you, you may need to do that.
You know what? At the end of the day, what this boils down to for both our clients and our prospects is, how are we giving them confidence that we know how to lead them through this? And how are we sharing with them content and information, and a plan that earns their trust. That’s absolutely the end of the day. Everybody is afraid about stepping back out into the fray. Everybody is afraid about a consumer reaction. Everyone is afraid about whether or not people will spend money again, how you give them confidence, how you show them that you can confidently lead them through this and that you have all kinds of data points.
So on the AMI website, agencymanagementinstitute.com/covid, there is all kinds of data and samples of how businesses fare during a recession if they keep marketing. There are examples out of Hong Kong that show you all the different phases of COVID and how businesses and brands did well during each of those phases. So there’s a ton of information there for you that you should be repurposing and you should be sharing with your client in your prospects. And also don’t assume that if you put it out once, if you write a blog post, or you do a podcast, or you do a webinar, that they saw it there. You need to be repurposing that content.
So if they missed your webinar, how are you making sure they see that information? How are you getting it to them directly? How are you calling their attention to it? How are you slicing and dicing it in a way that they can consume it quickly and easily? Be thinking about how do I give them confidence? How do I give them a sense of call. That’s your job right now is to give your clients confidence and a sense of calm. How do you do that? By you being able to lead them out of this, and you need to demonstrate that you can do that.
So a lot of agencies are taking all of that data, all of that information that we’ve got on the COVID page, and they’re putting it into e-books or PowerPoint decks, or they’re creating visual assets, sort of little factoids about marketing through a recession, for example, and they are positioning themselves as the safe choice because they’re in the know. And let me say that again. I want you to position yourself as the safe choice, because you are knowledgeable about what your clients should do coming out of this crisis, and there’s tons of data that you can repurpose and reuse, and obviously attribute appropriately. But there’s no reason why you can’t be using all of that to earn your clients confidence and trust.
All right. So what I’m saying to you is, what I’ve said to you for a long time, which is you have to sell through helping. You have to have a position of authority and you need to show them that you understand their problems, can help them solve their problems. The more you can do that, the more likely they are to listen, because that’s what they’re worried about right now. They’re worried about making a mistake. And so the more you can help them, or you can give them data, the more you can give them case studies, the more you can show them how the rest of the world is behaving, then they are going to believe that you are able to lead them out of this.
This applies to prospects too, but even more so why? Because they don’t already know, like and trust you, and so they are going to be even much more skiddish than usual. But I will tell you this, there are people buying and I’ve said this in some of our open mic webinars, I have said this in other places, but every day I have agency telling me that they landed a new client. And I’ll tell you in a minute sort of what that looks like, what they look like, the ones that are landing these new clients, but everybody is more skiddish and it’s understandable. And what we cannot do well, we absolutely cannot do is rush them.
We’ve got to be helpful, we’ve got to be nurturing, we’ve got to be an educator, we’ve got to be a coach. So when I was a kid we had horses. My dad and I each had a horse, and I had to work to pay for my horses room and board. So I did everything from mucking stalls to being a camp counselor, and one of the jobs that actually I thought was the most fun was I got to help horses who had never had a human on their back before get used to a saddle and then a human being on their back. But that took almost sometimes in some cases, it took a good part of the summer, because you had to very slowly earn the horse’s trust.
So there were super skiddish. They didn’t want to be around you and you had to push them very slowly. So, you would start with holding a carrot out for them or something else that they would need to sugar cube., and they of course would not come any [inaudible 00:56:22] your hand at the beginning. So you would sort of show it to them and then you would put it down somewhere and then you would slowly back away and they would eat it. And over time, the distance between you and the horse got smaller, and pretty soon eventually, they were actually eating out of your hand and would let you sort of pet their neck and eventually pet their nose and all that sort of stuff. But it took a while to get to that trust, and honestly, that’s what’s happening right now with prospects too. They are super skiddish, and as I said, they don’t already know, like and trust you.
And so they really have to have a lot of confidence. They are in a season where they’re not going to get in trouble if they don’t do anything. There’s little fault to be had right now. Down the road when they’ve lost market share, there’s going to be plenty of fault, but right now there’s not. So for them to trust you enough to let you in, if they don’t already have a relationship with you, this is different if they’ve been in your sales and your sales funnel for a while, and they’ve been in your pipeline and you’ve had conversations with them, but brand new people are going to be a little more skiddish.
So you really need to, in essence, leave a carrot trail. You need to let them come to you. You need to let them learn more about you, and you can do that through content and other things. So one of the things one of my agencies is doing right now is they work in a very … Their vertical is high end, independently owned resorts. So as you can imagine, they’re not doing a lot of marketing right now, and they have no customers, they have no sales. And so there’s not a lot of happy news there. So this agency could have absolutely said, “You know what? We’re going to pivot into a different vertical, or we’re going to lean on some of the other clients that are outside of our core vertical.”
But what they really looked at was this has been a great vertical for us for a long time. We have decades of experience in this vertical. We love this work, and we know that people are going to come back and stay in resorts again once we get through all of this. So we don’t want to walk away from it. So how can we be a value now? And how can we prospect now given that we know they’re not going to spend any money. So what they did was they in essence created a COVID mastermind group. So they reached out to their clients, to people that they had had conversations with, prospects, people that they just knew in the industry and they said, “You know what? Once a week, we’re going to get on a Zoom call. And we’re all just going to talk about what’s happening in each of our properties, what we’re doing, how are we handling layoffs? How are we handling the PR, how are we handling security in our facility? Anything you want to talk about, we’re going to talk about.”
And so the first meeting they had, they had about 20 people show up. And then the next meeting they had, they had about 35 people. And now they typically have 50 people in this mastermind group. And without saying a word about their expertise, they just facilitated the conversation, but it was so helpful. People were so grateful that they were able to talk to their peers, and several of them had said to the agency, we would have never done this on our own. We think of each other as competitors, but the reality is there’s enough geographical distance between all of us that we really aren’t. And this has been some of the most valuable information that I have gleaned out of COVID has been in this mastermind group talking to my peers so that we can share our best practices of what we’re doing.
So what happened with the agency is they have landed two new clients from this mastermind group. Now again, these people are not advertising yet for new customers or new stays because nobody can travel again. But what they are helping these new clients do is communicate with their employees and their most frequent guests, reminding them and sort of enticing them to want to come back when the doors reopen. And all of that came from sort of laying this carrot trail, sort of being slow and steady about just being helpful and demonstrating their expertise in the industry that they understood the jargon that they could pull together a bunch of these people.
And so you have to get a little creative, but there’s absolutely ways for you to earn the trust of your prospects. And now is the time to pull out the list of prospects that maybe you had been talking to for the last year, folks that you met at trade shows, whatever that is, but people that you have some sort of arm’s length relationship with and start talking to them for those of you that follow the AMI macro, micro nano model. If you’re not familiar with that, take a listen to episode 50 where we break that out for you. But the nano list if you remember, are the list of 25 businesses that you would kill to have as a client, and these are people that you are willing to pursue for a day or a decade, however long it takes to get them on your client roster.
And as you’ve heard me say many times, your job is to pursue them until one of two things happens. They either hire you or they file a restraining order. And so what I want you to do with that list is I want you to look around and I want you to start creating some assets, things that would be helpful for them. So it might be a checklist or an ebook, anything, something. Something around communicating with the employees while they’re working from home, something about connecting with their best customers. But I want you to create tools and resources that are specific for them and their industry or their vertical, their audience, whatever that may be, and then as soon as you have a couple of those tools, I want you to pick up the phone and I want you to call them and say, “Hey, I know that you’re not ready to hire an agency right now, but we’ve produced this tool for our clients or for our social media channel. I just want to make sure that you saw it and that you had it because I think it might be helpful for you.”
And if you keep doing that time and time again, they’re going to look forward to hearing from you. They’re actually going to be eager to chat with you, because every time they do, you’re either giving them some insight into what’s happening in the industry, or you’re giving them a new tool for your being uber-helpful, you are being an authority position and authority in your role, and you are helping them because that’s what subject matter experts do. They help to teach. So you can be doing that. So I’ve been telling you for a long time that unless you have a full-time biz dev person who’s delivering three or four times their salary in new AGI than guess what agency, owner, or leader, then it’s your job to sell.
And if you’re 25 people or less, odds are it’s all on you. So if you have these tools, then you can start prospecting. You can start prospecting by helping and by teaching and by coaching. So part of what you need to be asking yourself right now is what are the tools that I need? What case studies do I need? Again, checklists or eBooks or webinars, what can I do that is actually going to be a value? And that has to be the leading question. What can I do that absolutely will derive value for my prospects and my customers. But we’re right now we’re talking about prospects. What can I do that will be valuable to them so that I earn the right to be in front of them throughout this crisis and I become someone that they trust enough that they start saying, “Hey, what are you seeing other people do?” “Hey, what do you think about this?” And all of a sudden, I’m becoming their coach, I’m becoming a trusted resource, and from there, when they’re ready to hire an agency, what could be they think about?
So what tools do I need to be helpful and to be reassuring right now to show them that we’re the safe choice, we get this, we understand what a business should be doing coming out of COVID. We know this. And the reason we know this is because we’ve studied it. We have these eBooks, we have these documents that show how other parts of the world have done this already. We are looking back at the recession of ’07, ’08, and we were referencing that. So we’re doing all of these things to demonstrate that we really are somebody that they can trust and we are safe. It’s safe for you to come out on the limb a little bit with us, because we’re going to make sure that you stay in a safe zone. We’re not going to ask you to do something that’s going to put you at risk, either your job at risk or the company at risk.
So for many of you, things are a little slow right now. So prioritize getting those case studies and those other tools done, and then get them out too, and here’s a great place to start. Get them onto your past clients, people that you used to work with and then for one reason or another, you’re not working with anymore. Maybe they’ve moved onto another job, maybe the CMO got replaced and you didn’t have a relationship with the new CMO, but they had another agency. Whoever and however that is, your job now is to get back in front of them and it’d be helpful. So again, past clients, your prospects, anybody that is in your sales funnel, certainly get it on your social channels, but understand that what we’re talking about now which is sales, isn’t a broadcast solution. It’s a one-to-one solution. It’s hand to hand combat.
So absolutely share some of these tools on your website, on your social channels, invite people to your webinar. Absolutely do all of that, but do not sit and wait for somebody to pick up the phone or shoot you an email. You’ve got to be aggressive enough to reach out to them and make sure that they got whatever it is that you were sending out. And by the way, keep in mind as I said before, that just because you did a webinar, doesn’t mean that, that’s the only way that content should get out into the world. Maybe they hate webinars. Maybe they don’t have time to sit and watch a webinar, but they would read an ebook or they would read a one-page fact sheet, or they would listen to a podcast.
So again, just like with your clients, you need to be repurposing the content you create so that no matter how they want to consume it, it’s accessible to them. And really ask yourself, what do we know that they would find useful? How can I be helpful? How can I be reassuring? And then reach out to them and be useful, helpful, and reassuring. Now is a great time for you to think about, does your website needs a refresh? How is your SEO doing? What’s your AdWord campaign doing? And if there’s nothing distinctive about you, that would allow you to have web copy that would attract people to you or an SEO strategy or AdWords that would bring your ideal customer to you, then now is a perfect time to ask yourself, what are you going to do about that?
If a pandemic doesn’t force you to differentiate yourself, so prospects who are looking for an agency can differentiate you from everybody else. If the pandemic has forced you to identify how you’re different than everyone else, then what will? And by the way, this does not have to be that. You have to choose a niche or a vertical. That’s a fine choice if you want to do that. But you certainly could look at your agency and say, you know what? We don’t have a vertical niche, but man, we know how to talk to millennial moms, or we know how to talk to the Hispanic community, or we know how to talk to church communities or whatever it may be.
So maybe an audience focus, or it may be, boy, you know what? We’re great with startups. We love to work with young, fresh entrepreneurs who have a new idea, who’re super excited about it, or, you know what? We love to help clients do lead gens. That’s all we like to do is just drive leads into their funnel and then help them score those leads and then actually land those leads and make a sale. So you can differentiate yourself in a lot of ways. But I think one of the things that I am certainly seeing, and I’ve seen this for years but the pandemic is really shining a hot spotlight on is, if you look like everybody else, it is pretty tough to survive a difficult time. And so many of my agencies that are specialists are thriving through this better than agencies who are more generalists.
So all of that leads me to what I think is the most important mini plan of all, which is the fifth mini plan, your vision for the future. And in an earlier podcast, I quoted … The quote was in the rush to return to normal, use this time to consider which parts of normal are worth rushing back to. And I love that. I love the challenge in that. I love the fact that, that says to us, “You know what? There are things that this pandemic is teaching us.” Granted, some of the lessons have been painful, but there are things that this pandemic are teaching us or inviting us to re-examine. And I think now is the time to do that.
So as you think about what you want your agency to look like a year from now, ask yourself questions like, what has the pandemic taught me about my work life, about how much I work, about the kinds of things I do at work, about my own talents and deficits? How do I sort of shore things up around my deficits? How do I attract other employees or invite them, or train them to maybe make up for where I’m not as strong? How do I feel about now work from home policies? Has the pandemic changed my opinion about the work we do and how we do it? Do we all have to be in the office every day, all day?
How do have I learned in the pandemic the danger of giving away the farm to clients because they barked the loudest? And am I going to tolerate that in this new normal version of my agency? What did I learn about the metrics that I should have been tracking? And did I track them enough? Did I get it early morning signs? And then am I fine now, because I very quickly reacted to whatever those numbers told me, or did I get caught a little off guard because I wasn’t really tracking the right metrics that I talked about earlier in the podcast? Have we lived with a gorilla for the last few years, and has that guerrilla hit the pause button, and how has that changed the tenor and the culture of the agency? Do we really want to guerrilla again?
What has the pandemic taught me about my niche or our position of authority or the lack thereof, and do I want to pursue that? I think this is the time to say to yourself, “You know what? If I was building a new agency and I was going to launch it in the fall, what would it look like? Or if I was going to launch it in 2021, what would it look like? And how different would it be for my current agency?” Now, for some of you, I’m guessing a small minority, the agency you would create would look completely different, and you would literally to build that agency have to shut your agency down and start a new.
But for most of you, I suspect it’s more about adjustments tweaks than it is a wholesale change. But why not think about making those adjustments and tweaks now? Why wouldn’t you ask yourself those questions and then be really thoughtful about how you come back from this and how you decide to run the business, how you decide who’s on the team, and what team members have really earned their spot. Team members have just shown up like an owner and have proven to you that there’s somebody that you want to go to battle with every single day. You want them at your side.
On the flip side of that, what clients have earned your attention on loyalty? Who amongst your clients has treated you well, has been respectful, has been worried about you as much as themselves? Even if they’ve cut back their budget, how did they do that? Did they do that respectfully to give you a little bit of warning and a window of time? So I think it’s a time for us to look at our team and our clients and ask ourselves, are these the people I want to surround myself with? Is my biz dev program working? Did I have a full sales funnel? And have we been landing clients during the pandemic? And if not, if we didn’t have a sales funnel or we haven’t landed one client in a more than a couple months, what does that tell me about the importance of that work? And am I willing to go back to put myself in the same position again? Or is it time for us to really invest the effort in building out a biz dev program that I have confidence will work?
These are the kinds of questions that I want you to be asking yourself. So I know a lot of you have been asking me, “So, okay. This is great. I’ve got the five plans, I’m going to work on them, but what agencies are doing well through all of this?” And I will tell you, it’s the agencies that either by design or just by fluke had in essence these five plans in place. So the agencies that are thriving in this pandemic, and I will tell you there’s a good probably, I don’t know, 15, 20% of all of the agencies we serve at AMI that are actually super busy that are making more money than they made in 2019 are actually hiring and they’re landing ideal clients right now.
So right now they are enjoying great success. And some of the common elements of them are for the most part, they all have niched down and they have defined who they serve and who they don’t and what kind of work they do, and what kind of work they don’t do, and they really have established themselves as an authority in whatever that specialty is. And so they were already a known entity in that space. And if you go to their website, their website screams this area of specialty. And again, it could be a vertical niche, it could be an audience, it could be solving the same problem for clients, it could be a deliverable and that’s all they do, like they’re an SEO shop or a PR shop, but their website really screams what it is they do and not hiding it under a bushel.
All the case studies align with that specialty or niche, and they’ve also invested in themselves in terms of marketing in some cases dollars. So AdWords, retargeting, things like that, and in another cases, sweat equity. So again, they built up beautiful case studies. Their website looks fresh and changes on a regular basis. They’ve been producing content for a while around their expertise. And even through the crisis, maybe they’ve produced a little bit of less content because they’d been dampening fires like all of you have, because even if they’re doing well, they still have probably had a client or two that’s paused or something.
No one is unscathed in this, but some are having more success in it than others but that’s kind of what the agencies that are doing well look like. They already had a decent sales funnel, for example. So they had prospects they could keep talking to. So their sales cycle is shorter because they were already halfway through the sales cycle. But I will tell you, even my agencies they got slammed hard. So a lot of the media planning and buying agencies, as you might imagine, had a huge part of their AGI pulled out from under them because nobody’s buying media right now, or they’re not buying traditional media anyway.
But even those agencies, if they were managing by the numbers, and this is the number one I think indicator for me of who is surviving and thriving is if they were managing by the numbers, whether they had minor issues or major issues, they saw the issues right away and they acted quickly. So a lot of you listening may be monitoring and managing by the numbers, but you hesitated and you didn’t make the decisions that you needed to make, whether that was a layoff or a furlough or a pay cut across the board, whatever that may have been, or shoring up some cash or whatever the solution was for the problems you saw. If you saw it right away and you acted right away, then you are on much more solid foundation from ground. And what that means is now you can put together the other mini plans and you can execute on those mini plans.
If an agency is still struggling, they’re still sort of teetering around and they are dipping into their reserves, they’re getting close to going in the red, it’s hard to focus on these other mini plans. It’s hard to be proactive because you’re busy being reactive. And so what I’m hoping for all of you is that even if right now you are in reactive mode, if you can focus on getting these mini plans done, you can focus on the financials and operations. You can focus on the team, you can focus on the clients, you can focus on your prospects, and you can also be thinking about, okay, what in the world did I learn from all of this, and how do I want my agency to be different on the other side?
If you can do those things, and I’m not suggesting this is easy. I’m not suggesting this is quick, but I’m also not suggesting that this needs to be the Mona Lisa. I’m calling them mini plans on purpose. These are down and dirty. Let’s take action plans. And it shouldn’t take you more than a meeting or two with your leadership team to pound these out. And by the way, you sort of have to be repairing the plane while you’re flying it. So don’t be sitting around doing nothing while you’re figuring these plans out. Skeleton out the plans, start executing on the plans, and then adjust the plans as you go. Because right now, just like for your clients, the biggest risk to you is that you are dormant, that you are out of the marketplace, that someone else is eating market share that is yours to be taken.
And so I want you to get up and I want you to get out there, and I want you to start really driving towards sales from clients, driving for sales, from prospects, and really thinking about how you want your agency to look on the other side. That’s one of the silver linings of this is that we get to reinvent a little bit. So take advantage of all of this and put it into play for yourself so that you can come out as strong and solid on the other side of this as possible. That’s my hope for you is that you can land on your feet and that you can have some money in the bank and you can stay in the black, so you can find another day. I know that’s your hope, and it’s certainly my goal for you and it’s certainly why we’re working our tail off to try and help you do that.
So, just a couple of little housekeeping things before I let you go. Number one, as you know, every month during a solo cast or every solo cast, every five weeks, we give away a seat to one of our live workshops or our on-demand workshops. And all you have to do to get that is to leave us a rating and review, send it to me so we can put you in the drawing. And so this month’s winner is Paul Evans from Toro Digital. So Paul I’ll be reaching out to you to connect with you and see which course that you would like to take, either one of our live courses. Our hope is that we’re going to be back with live courses in August. We’ll see how that goes, but that’s our plan right now, and then of course we have more workshops in December or January planned as well.
So, Paul, I’ll be in touch with that, congratulations. Also, I just want to remind all of you that you too can be in the drawing. So, if you haven’t entered yet, just leave a rating and review, wherever it is you download your podcast and send me a screenshot of that rating and review, and we will put you in the drawing. Thanks for listening. I know this is a really long episode. I’m sorry. I tried to be concise, but I also wanted to be complete. So, I appreciate you sticking with me to the very end and I hope that it was really worth your time and I’m super grateful that you’ve listened.
And our thanks of course to our friends at White Label IQ. They are the presenting sponsor of Build A Better Agency Podcast. They help us come to you every single week. And so head over to whitelabeliq.com/ami, because they have some free hours for you to take advantage of, of their services. And remember, they are a White Label service that they do PPC dev and design, and many AMI agencies swear by them, my agency has used them several times and we are always grateful for their assistance. So I encourage you to check them out and have a conversation with them.
All right. I will be back next week. In the meantime, if you need anything, you know how to find me. I’m at agencymanagementinstitute.com. You can leave me a message there. You can shoot me an email at [email protected] I really wish I had thought about that email address many years ago, but there you have it, and I’ll be back next week. Thanks for listening. Hang in there. You’ve got this. You can do this. Just follow the plan. Okay? Talk to you soon.
That’s a wrap for this week’s episode of Build A Better Agency. Visit agencymanagementinstitute.com to check out our workshops, coaching packages, and all the other ways we serve agencies just like yours. Thanks for listening.