Episode 253:

Prior to the economic downturn in ‘07-’08, I worked with a lot of agency owners who were very adamant that they would never outsource any of their services. Then the recession hit. Agencies were forced to trim their payroll and job-out projects to 1099s and other partners. Today, 99% of the agencies I work with have a hybrid business model that incorporates some type of outsourcing. When done well, this is actually a benefit to your clients so the question becomes how can you make this work in your agency? Brian Gerstner joins us in this episode of Build a Better Agency to explain how we can build and maintain strong partnerships that work well for all concerned.

Brian Gerstner has over twenty years of experience working with agency owners across the globe. He currently serves as the Creative Services Director for Huebner Marketing and the presenting sponsor of this podcast, White Label IQ. Brian offers a unique perspective on working with freelancers and outsourced service providers because he understands the nuances that influence these working relationships as both an agency creative director and the guy who heads up an outsourced resource.

Like most relationships, making it a rewarding experience for everyone takes work, commitment, and consistent communication. Listen to Brian’s tips and learn how to incorporate outsourced labor into your business model in a way that serves everyone well.

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.

Agency Owners | Smart outsourcing for agencies

What You Will Learn in This Episode:

  • How agency owners can be a good partner to their outsourced partners and vice versa
  • How to pick the right outsource partner for your agency’s needs
  • What outsource partners should bring to the table to improve the workflow
  • How to manage communication with your partners under a compressed timeline
  • How White Lable IQ demonstrates technical expertise to people who aren’t technical
  • How to know when it’s time to pull the plug on a partnership
  • How to set clear expectations with your outsource partners
  • Why outsourcing is a great way to try before you buy
  • How to disclose your outsource partners to your clients

The Golden Nuggets:

“The outsource model allows us to bring the best solution to clients instead of picking a solution based on internal capacity.” Brian Gerstner Click To Tweet “One of the Truths about being a great partner to our outsourced partners is that it is still a collaborative effort.” Brian Gerstner Click To Tweet “Agency partners have core competencies that are unique to them. If you can provide the execution strategy, you will drastically improve the working relationship.” Brian Gerstner Click To Tweet “When I look for an outsource partner, I look for someone who can solve problems with me.” Brian Gerstner Click To Tweet “We expect an outsource partner to jump in and get it, but we would never expect an employee to understand everything about our agency on the first day. Sometimes that sets our partnerships up for failure.” Brian Gerstner Click To Tweet

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Ways to contact Brian Gerstner:

Speaker 1:

It doesn’t matter what kind of an agency you run. Traditional, digital, media buying, web dev, PR, whatever your focus, you still need to run a profitable business. The Build a Better Agency Podcast, presented by White Label IQ, will show you how to make more money and keep more of what you make. Let us help you build an agency that is sustainable, scalable, and if you want down the road, sellable. Bringing his 25-plus years of experience as both an agency owner and agency consultant, please welcome your host, Drew McLellan.

Drew McLellan:

Hey, everybody. Drew McLellan here with another episode of Build a Better Agency. Super glad you’re with us. Sending good health wishes to all of you. So I know this is a super stressful time, and I am really grateful that you are choosing to spend some of it with me, so thank you so much for that.

Couple things I want to remind you about before I tell you about the show. Number one is, if you are interested in using some of this time to really focus on who your best clients are as you come out of the gate and you start really thinking it’s time to start selling again, if you want to really define who your agency can delight over and over again, and as a result, who’s going to stick around and be a long-term client that’s super profitable for you, head over to agencymanagementinstitute.com/client-filter. So again, agencymanagementinstitute.com/client-filter. And there you will find a PDF with some exercises in it that we have created for you to help you really identify which client is great for you.

Every client is great for somebody, but they are not all great for us. And I think we’ve all experienced that when we had that weird spidey sense that maybe a prospect wasn’t quite the right fit, but either the money was good or our backs were against the wall or we just chose to ignore it. For whatever reason, we brought them on as a client, and then we paid a pretty significant price. And so I am a firm believer in knowing who your sweet spot clients are and going after them and really actually grading every prospect that walks in your door, whether it’s someone you’ve pursued or someone who just knocked on your door, to make sure that they are a good fit for you. And this tool will help you do that, so I hope you will take advantage of that.

All right, so let me tell you a little bit about our awesome guest today. So, today … and this was really a big shift after the ’07, ’08 recession. I had a lot of agency owners prior to ’07 who were very adamant that they were never, ever, ever going to outsource anything. They believed that part of their claim to fame was that all of the talent that it took to serve their clients was under their roof. And then a recession came, and for a lot of agencies, the only way they could survive that recession was to trim their payroll, because for most of you, that is without a doubt your largest cost center.

And so, agencies were forced to start using outsourced partners. Some of you have been doing this for a super long time and it’s just part of your business model, but today I would say that 99% of agencies that I know, that we work with, that I bump into at conferences, about 99% of you are some sort of a hybrid where you have this core team that is your employees, your W-2 employees, and then you’ve got a host of 1099 folks or other agencies or partners who support you and typically have an expertise in something that you don’t have enough demand for to have full-time staff. And that’s exactly my guest’s perspective today.

So Brian Gerstner is the creative services director for both Huebner Marketing and the presenting sponsor of this podcast, White Label IQ. And what makes Brian a really interesting guest is that he has this very unique perspective on how to be a good outsourcing partner, both as the agency, like how do you be a good partner, but also, if you’re the one that’s being outsourced to, how do you be a good partner in that. Because honestly, like all relationships, when it doesn’t go well, there’s plenty of blame to go around at both sides of that equation. And for many of us, having partners that we can count on, we can rely on, that really get us and get our clients and care as much about our clients as we do is critical to our business success.

And so, I thought Brian being on the show and talking about how to do this well was perfect, because he has this very unique perspective. So he’s got more than 20 years of agency experience, and he’s just a great guy. I’ve known him for, gosh, more than a decade and he is generous with what he knows, he’s always quick to help people, so I know he’s going to be generous with his comments and information here today. And what I love about Brian is that he just calls a spade a spade. He’s just a straight shooter and he will help us navigate this. And I think for all of us, this is an important skillset, an important attitude for us to have in our agencies, and so I am anxious to pick his brain. So let’s get started.

All right, Brian, welcome to the podcast. Thanks for joining us.

Brian Gerstner:

Hey. Thank you, Drew. I’ve really been looking forward to this conversation.

Drew McLellan:

So the listeners here me talk about White Label all the time, obviously, because I’m talking about you guys as a presenting sponsor. But one of the reasons why I wanted to have you on the show today is because, more and more, agencies are moving to this hybrid model where they have some staff, but they’re also outsourcing a lot of their work to trusted partners, new partners, things like that. And you guys, because you’re an agency but you’re also somebody that agencies outsource to, you have a very interesting lens into this, I think, and I think can help agencies think about how they are an outsource partner and how they can get the most from their partner. But part of that is on them, right?

Brian Gerstner:

Absolutely. And I find it really intriguing because, as we work with our own clients, we have the tail-end of that experience all the time, so we’re constantly talking about how it’d be nice if we had a greater brief for the timelines or the timing that it takes to get to that. So, when we are working with our own outsources, and when we’re working with clients, we always try and look in the mirror and try and be that best client that we can be. Situationally, things always change a little bit and we need to be able to be responsive to our clients, and sometimes that causes fully condensed timelines and you have a plan and can’t be what we want it to be. But we have that unique perspective as agencies to see both sides of that relationship.

Drew McLellan:

Right. I think universal, I’m sure when cavemen opened agencies, they were complaining about bad briefs and timelines. I think that’s just Achilles’ heel for our industry, for sure. But I think the computer and the speed at which we work today has just escalated both of those pain points for agencies, don’t you?

Brian Gerstner:

No, absolutely, because not only are they condensed, but our audiences and our clients’ audiences, they expect things to happen much faster. Marketing, very timely process. You have to be there at the moment [inaudible 00:08:07] messages. So yeah, everybody’s expectations with 24-hour news cycle and just how quickly things move just accelerate it.

Drew McLellan:

One of the things I think that’s challenging if you are … And I think this is challenging for agencies. I think it’s also challenging for our outsourced partners, but when someone drops a bag of a problem at your feet and says, “Okay, solve it.” I think one of the truths about being a great partner to our outsource partners is that it still is a collaborative effort, and that it still requires that we work together as opposed to me just dumping and running, right?

Brian Gerstner:

Well, it does. And I think it goes back to an earlier podcast and a study that you’ve done recently where you talk about what clients are looking for, whether they’re looking for love, they’re playing the field, or they’re much more transactional. So, if you do need a situation where you could quickly take a project and just quickly throw it over the wall or jump it, you need to have done a lot of that legwork. You need to be looking for love in those situations. You can only be successful in that situation if you have trust and faith and you know that the communication with that partner is already in place. So when you are in a more playing the field or transactional type relationship, it’s going to be a lot more difficult and you will have a lot more communication and administrative time in that project.

So, back to the point, even with our own clients, when you are in the position to look for love and have that type of partnership, you do gain a lot of advantages down the line because you can throw things over. They already know your expectations, the quality of the processes that you go through, and you’re starting from a position in advantage.

Drew McLellan:

Yeah. And I think a lot of agencies do have trusted partners that they go back to over and over. And it’s like a dance partner. The more you dance together, the more you know how they’re going to move and when they’re going to move. And I think that’s true for us, too. So, how do you guys help your agency clients learn your dance moves? How do you as an outsource partner … And what should people be looking for in their outsource partner that shows that they are ready to help the agency do the dance?

Brian Gerstner:

Absolutely. So, as a partner, often you are a partner because you’re not part of that agency’s core competency. Agencies, what they do best will often keep that work in-house or at least make sure that they have people on staff that are authorities. So when they’re coming to you, you have to be able to provide as much strategy and just the really smart questions going into the project. Because one, you can define the scope or be part of that discovery process to define what the actual project will be, to educate your partner to tell them what it’s actually going to take, so that they can also communicate and relay that information with their own clients. Really helps that whole process from beginning to end.

So, when you ask about how we help people, whenever possible, we ask to be part of the early conversations, even if we’re just a fly on the wall during that discovery process, or some agencies who allow us to participate in the conversation with the clients. And then we come back with a lot of questions. We come back with feedback to help define how this process will be and try to help define a lot of those milestones that are going to come up through there.

One of the other things during the process is, of course communication as we’ve been talking about. You hit snafus in that process. And we find the best way to be helpful is to, if there is bad news or if there’s a change or a difficulty coming up, that we’re communicating that as quickly as possible so that they can speak to the clients and we can shift if necessary. One of my mentors told me, “Bad news does not get better with time.” So just being as absolutely upfront with people and candid, but also bringing out best game forward for our partners.

Drew McLellan:

I would guess that a lot of times when you get a new client, time is of the essence. So they’ve waited too long, they thought they could do it in-house, they had something happen internally that meant all of a sudden they had to outsource, or the client’s just putting a lot of pressure on them, and it took them a while to find you perhaps. So, while it’s awesome to have a lot of time, I think the reality for all of us in the agency space is it’s pretty rare today to actually get the amount of time you want to have to do the best work you can do. I think we are always working under a compressed timeline. And I think it’s more complicated when you’re playing a little bit of telephone where it’s like, “The client tells me something, and then I have to tell you something.” So how do you guys try and shore up that game of telephone in a compressed timeline? How do you help your clients manage the difficult timelines that I’m sure you’re handed all the time?

Brian Gerstner:

First of all, on our side, it’s being prepared. So when we structure our staff, because we work with a lot of different agencies, we’re able to support a lot of people with very specific skillsets. So as we look at our own staffing and being able to handle surges in large projects and opportunities as they come about, our goal is always to keep a bit of excess bandwidth. To keep one person in every department and skillset so that we’re not always operating at max and that we can jump, we can pivot, we can assign additional resources to get there.

But also, the key thing too is the people on our side on the US … And we do a lot of not only work inside of our office in Loveland, Colorado, but we do a lot of international outsourcing. And when we look at our core competencies, we always keep somebody who has authority over those specific skillsets, whether it be design or development and content. So we have someone who can pivot, who can plan immediately, who knows our team, and that we can quickly ask the questions. We have the bandwidth to pivot and reprioritize as needed.

But as I alluded a little bit earlier, just communication. A lot of talking. Trying to get in there, be part of that discovery. Because, when we’re moving really fast, we need to understand why, because we’re making a lot of decisions on our side in how to meet that scope, and trying to make sure that, when we come up and we start doing the initial presentations and rounds, that we’re on brief, that we’re there with what we need to be. So through the process, we elevate communication. We’ll have one, two, three meetings a week to check in. And because we’re working with agencies, we have this beautiful ability to incorporate them in, for lack of a better word, the sausage making, as it’s [crosstalk 00:15:49].

Drew McLellan:

Right. Yeah, it’s a little different than working directly with the client where you don’t want to talk about all the places that are problematic. With an agency partner, you can just have those candid conversations.

Brian Gerstner:

Absolutely, because on the client side, they’re coming to you for the solution, coming to you for the expertise. So, they don’t want to see it made. They want to be able to focus on what they’re doing, and they’re hiring you as an outsourcer also because they have other responsibilities, they have other priorities that they need to focus on.

Drew McLellan:

So your organization is this hybrid. You have an agency and then you have White Label, and your role on the agency side is you’re the creative director, and in charge of all creative services. So you’re also hiring, you’re also outsourcing. Looking at it from both of your perspectives, both as the creative director of … You’ve been at Huebner for how long?

Brian Gerstner:

About 10 years now.

Drew McLellan:

Yeah. So in that role and also in your role at White Label, what have you learned about how to identify good partners? Because I know you’re doing it for the agency, and I know it’s being done to you as an outsource partner, so what are best practices around identifying the right outsource partner?

Brian Gerstner:

Really a lot is reputation and responsibility. And I should say reputation and recommendations. So, I try to be, as much as possible, a social butterfly, to talk to peers. Just being able to participate in a lot of the interactions through agency management institution like the digital summit and just being able to talk to people. Always asking about, “How do you do this work? How do you get that done? Who do you work with?” And laying that groundwork.

And with Huebner, although I’ve only been with them for 10 years, it’s a 30-year agency. We’ve had a lot of time to get to know a lot of people. And as a fully integrated agency, just basically meaning that we are the agency of record a lot of time for our clients and we have to serve a large breadth of work, and we have a lot of friends.

So to your question, doing that groundwork, trying to build all those relationships, and even when we don’t have something for a particular partner of ours, just trying to stay in contact, send them a card, or call and see how they’re doing. Say hello. See how they’re doing. And keep that line of communication going.

When I’m looking for specifics, like how do I vet this particular outsource partner-

Drew McLellan:

Right, because in a lot of cases, you’re vetting someone who has a skill that you don’t know. So it would be like me deciding if somebody was a great auto mechanic. I don’t have any of that skillset.

Brian Gerstner:

So, in that regard, personally when I’m talking, I’m looking for someone who can take a concept and build upon it and talk to me as a person and try just to explain it in a way that I can understand, because I need that communication. So, in interviewing and talking, I’ll ask a question. I always look for people to keep going on, because I want people that are passionate about what they do. I want people who have a lot of experience and can bring up stories or tell me about something they’ve had and are honest about times it didn’t work, or how they came and solved problems. Because at the end of the day, we’re selling ideas and we’re trying to solve the problems to generate those, make those ideas real. So I need someone who can solve problems with me.

Drew McLellan:

Yeah. So I’m sure that you’ve had people kick your tires on the White Label side in a lot of different ways. Again, because a lot of people who are hiring you don’t know PPC or dev. They probably are more familiar on the design side, but certainly on the dev and the PPC side, that’s a foreign language to them. So how have you guys developed the ability to reassure … I mean, yes, when someone that someone trusts says, “Yes, you need to call White Label,” that’s obviously the white glove of opportunities to become a partner, and that’s the easiest way to do that. But assuming that that hasn’t happened or that the recommendation is softer, perhaps, than that, hod do you guys demonstrate that you have the technical expertise that you need to have to people who aren’t technical?

Brian Gerstner:

At first, we talk about our structure. People need to understand our values, how we hire, how we work, how we document, and talking about our process. And in that, we’re really trying to illustrate what they should expect during this process. And in those conversations, we start to find out if what we provide aligns with what they need. And that’s not always the case. So it’s really hard for agencies and even for us as White Label, but there’s a lot of times we do have to come to the table and just say, “Hey, we really want to be able to help them, but I just don’t think we’re a perfect fit, but let me point you over here.”

Drew McLellan:

Right. Which honestly, in my mind, is part of the credibility of … Anybody who says they can help everybody all the time, you feel like, “Okay, you’re blowing a little smoke up my skirt now.”

Brian Gerstner:

We find, even when we come to people who are looking for our help and we say, the majority of those people come back eventually. If they understand a little more of what our unique niche is, then they will come back to us just because, just as you said, there is credibility for not being overly ambitious.

Drew McLellan:

Right, and not promising things that maybe you can’t deliver.

Brian Gerstner:

Exactly.

Drew McLellan:

Yeah. Again, you wear this dual, interesting hat. There are also times when it just doesn’t work, and you are feeling like the partnership isn’t happening. And so, from your perspective, how do you know when you’ve invested enough time, enough energy to try and fix something, a partnership that’s not working? How do you know when it’s time to pull the plug and find a different partner?

Brian Gerstner:

Yeah. Well, just in general on our side, because we do use a lot of outsourcing people with Huebner Marketing particularly, there are situations where maybe there can be some quality issues, or the deliverables aren’t what you expected. And from my perspective, a lot of that can be solved. It’s typically not always that agency or that person’s fault. A lot of times it’s my fault because I’m busy. You’re juggling a lot of balls and you didn’t have time to develop the [inaudible 00:23:13]. You didn’t have time to maybe describe what that deliverable’s going to be or really think about the milestones properly.

So, I find communication’s the key thing. If in my gut I feel that I’m not able to communicate or this person’s not taking me seriously or I’m not getting their attention the way I need, that’s when I feel that you need to pull the plug quickly, because a lot of those other elements as far as quality control and timing and all that can be worked out. And it’s a two-way road there.

But there is a little bit of that because, as you’re working with an outsourcing person, it’s not just someone over here you’re throwing stuff to the wall with. We really try to think, “This is like an employee we’re bringing on.” We have to go through some degree of an onboarding process just as we would with someone bringing in-house. They have to fit culturally. They have to speak the language. There has to be mutual respect. And it’s really that gut feeling of whether they’re going to work well within our group to how we really finalize if it’s going to be a good relationship or not.

Drew McLellan:

Yeah, that’s such a great point that we expect an outsource partner to just jump in and get it, but we would never expect an employee to be able to walk in on their first day, sit down at their desk, and just start working without any input or onboarding from us. And so, we probably set some of those outsource relationships up for failure because we start with this fallacy idea that it’s going to be magically instantaneous.

Brian Gerstner:

That’s true. And when we look at what we’re outsourcing, those expectations are different. So, if what the agency is outsourcing is part of the core of what they do really well, and it’s just an issue of bandwidth or they’re outsourcing things that are really well-documented and just production work, there’s a lot of expectations in your mind as to what that should look like and what that should be, so you’re very critical of it.

And the other aspect of that is, if it’s something that’s completely out of your wheelhouse and you’re outsourcing it because it’s more of a distraction to your agency or it’s not a business line that you feel you want to create at this point, you are critical, but you’re not critical down into the weeds. But you need to, at that point, ensure that your partners has that expertise and you’re relying on them at that point. So when you come at it, there’s two different sets of expectations and understanding, with that person, where they sit.

Drew McLellan:

Right. And even having a conversation upfront about like, “Look, this is how we work. Here are our expectations, and let’s talk about how we can make sure this work process that we’re sharing in meets or exceeds those expectations.” Even just having that conversation I think sometimes doesn’t happen, and again, sets the relationship up at a greater risk to fail.

Brian Gerstner:

Mm-hmm (affirmative). Absolutely.

Drew McLellan:

So, I think there are also some amazing advantages to outsourcing and I want to talk more about those, but first let’s just take a quick break and then we’ll come back and we’ll talk about the upside of outsourcing.

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All right, let’s get back to the show.

All right, we are back with Brian and we’re talking about how to be a good partner when we as an agency decide to outsource. And early in the show, we talked a little bit about how do you source a partner, how do you sort of kick the tires of the partner, and how do you know when it’s time to break up, when it just isn’t something that’s saveable. But now what I want to shift our attention to is some of the advantages of outsourcing. And many of you listening, most of you today, your agency is a hybrid, and so you have this core team in-house. And your core team may be 10 people. It may be 150 people. Whatever it is. But there are certain things that you outsource.

So when I started in my career, when I was at Y&R, we had everybody under the sun in the building. And so we had our own research department. We had our own videography department. And sometimes we would get emails that would say, “Hey, the videography department’s a little light, so push video.” And one of the things I love about the outsource model is that it allows you to bring exactly the right solution to clients without pressure of, “Hey, we have to keep somebody busy because they’re on staff.” So it allows you to really think strategically and tactically from what’s really best for the client, rather than, “I got to keep X number of people busy.”

I think the other thing for many of you is that it’s super advantageous because it’s a variable cost, so you’re not paying people when you don’t need them. And so that’s how many of you have managed your budget, certainly since the last recession, is that you’ve built this mix of critical skills in-house, and then auxiliary skills or skills that you don’t use every day to some sort of an outsource partner. But I know, Brian, for you guys, one of the things that you talk about is that outsourcing is also a great way to sort of try before you buy, right?

Brian Gerstner:

Absolutely, because it’s a huge commitment, particularly when you get into a lot of these digital services. Some of these complex projects, you can’t have one person who’s a Jack or Jill of all trades, like do it and be good at everything.

Drew McLellan:

Yeah. And maybe you could 50 years ago when we were working in three mediums and it was pretty much all paid advertising. But today, the sophistication level of the work agencies do requires such a different level of complexity in so many different places.

Brian Gerstner:

Mm-hmm (affirmative). Yeah. No, absolutely. And we do work with a lot of agencies who are, as you said, testing the waters. They don’t want to build that vertical in their agency yet and don’t know if they can support it or if they can maintain the workload and get enough demand coming in. So, we find a lot of time people will start working with us and then they’ll bring on like a digital project manager, and then we’ll start working with that digital project manager. And then maybe progressively, they’ll bring on a word press developer.

And we’re perfectly fine with that. We totally understand we’re filling that gap at that time. So yeah. No, we find that that’s a beautiful strategy, and we ourselves deployed that as we’ve been continuing to grow out internal team and our development team. We ourselves have outsourced partners for just very high skill, technical needs, like whether it’s Python development that we don’t have a consistent amount of work with, but we have some very close partners through all these years that we know and trust and rely on.

Drew McLellan:

Yeah. Well, I think it also speaks to the idea that, for most agencies, they’re going to have multiples partners, because again, I think it’s difficult to have a partner that’s an inch wide and a mile deep today. Now what you want is somebody who is a mile deep and an inch wide, where they have a depth of expertise and they really do show up in client calls or client meetings or even internal conversations as just having this wealth of knowledge that allows us to really deliver for clients.

Brian Gerstner:

Absolutely. And we’ve even seen that on our own client sides, to the point where … I mentioned earlier where we were the agency of record and responsible for so many different things. We see in the market now, even our clients are bringing on multiple people. They have an SEO. They have a web development person. They have a content … And they expect us all to play well together.

Drew McLellan:

Right. Yeah, I think that’s one of the challenges for agencies, is that we often are sharing our clients with lots of other people and we have to play nice.

Brian Gerstner:

And traditionally, that’s been scary. To be with a client and watch them bring additional partners on historically has been difficult to see. But then again, as we look at this a little bit differently, if you are able to play well in the sandbox and you’re able to just, as we said, say no to certain things and allow the clients to bring on that expertise where they need, you really develop an advantage than you would’ve if you had tried to do that yourself.

Drew McLellan:

And I think the advantage comes in a couple ways. So number one, as we saw in our research when we were talking to clients and they were saying, “Yeah, I’m going to have multiple agencies,” and nothing makes me madder than when one agency tries to throw the other agency under the bus. I expect them to play nice together. And the agency that plays the nicest in the sandbox is the agency that’s going to earn my loyalty because I know they’re doing what’s best for me rather than trying to do what’s best for them. So I think that’s number one.

Number two, I have a lot of agencies that have actually developed great partnerships with other agencies, and they end up referring business to each other and bringing each other into projects and things like that. So, when you are not the bully in the sandbox, there’s also opportunity amongst the other kids in the sandbox.

Brian Gerstner:

No, 100%. And we see that as our responsibility to be fiduciary, to be that trusted advisor. And for ourselves, it gives us even more opportunity, because when you have those partnerships that you just described, you’re more confident going to the table. You can capture more integrated wok into those campaigns. And at the end of the day, although there are going to be multiple players, you can be the bigger player in the sandbox.

Drew McLellan:

Right. And if you get booted out of the sandbox, you have no shot at getting invited to play at all.

Brian Gerstner:

Absolutely.

Drew McLellan:

So I know one of the big challenges for agencies when they outsource is whether or not they disclose to clients that they’ve brought a partner in. So I’m curious, first on the agency side of the business, how do you guys handle that? And then I want to talk about how you see agencies handling it when you’re the outsourced partner.

Brian Gerstner:

Absolutely. So, it is personal for every agency and there is a lot of understanding in that relationship. But from what we see is, we find the most advantage in just being really transparent, letting people know that we have these really strong partnerships and, just as you said, “We’d be lying if we told you we could do everything under the sun.” So we find the most success there because, number one, we’re being honest, but number two, at that point, we can bring those partners into the discovery meetings, and they can hear directly what’s happening, what are the expectations. They understand the strategy. They’re closer to the actual request. And for us, that advantage comes from the fact that we then had less project time into that. We have less admin time into that because we’re closer. When you create just multiple layers of separation, it’s that game where you whisper something into each person’s ear down the line.

Drew McLellan:

Yeah, a little bit of Telephone.

Brian Gerstner:

Yeah. So that’s not always the case, though. So when you come to that, you have to be really good at documenting. You have to put those briefs together really well. Because if there’s multiple lines of separation, expectations have to be presented very, very clearly at that regard.

So, there’s advantages and disadvantages, and I think every agency is going to make that decision based upon their relationship with their client. As you go and you can be more open and you develop that love partnership with your outsourcing partners and you do trust to bring them in and you know they’re going to make you sound smart, then I would say, as much as possible, try to achieve that goal. And it is only possible over time. You’ve established that trust. You’ve gone through a couple projects. You know the person [inaudible 00:36:36].

Drew McLellan:

Yeah. And I think part of the other fear of that from an agency owner’s perspective is that, when we introduce an outsource partner to our client, we worry that the client is just going to do an end run around us and go right to the outsource partner. So I think it’s also about having clear language, and probably contractual language, between the outsource partner and the agency that says, “Yeah, you can’t do that. You can’t work directly for the client. And if they approach you, then A, you have to disclose it, and there’s a financial trigger hat happens.”

Because here’s the problem, if a client goes to an outsource partner and says, “I just want to hire you directly. I don’t want to work with the agency anymore,” the agency’s in a no-win situation. If they say to the client, “Yeah, sorry. We have a deal with them and you can’t work with them directly,” the client’s going to say, “Well, screw you both then. You’re all fired. I’ll go find somebody else, because I want to work directly with a web dev team,” or whatever that is.

So I think that’s part of the nuance of the relationship, too, is having the candor for both the agency and the outsource partner to say, “Look, our goal is for this to never happen. But if it does happen, let’s agree now, while we’re still in the honeymoon phase, let’s agree now how everyone gets compensated in that situation.” So, “Hey, agency, if your client comes to us and asks to hire us directly, the first thing we’re going to do is talk to you about it. And we will do whatever you ask us to do. We’ll either say yes or no. If you believe it’s in the best interest of our long-term relationship with that client, both of our long-term relationship with that client for us to do that, then here’s the commission or kickback or whatever that we will give you based on that new arrangement.”

Because most agencies are marking up the outsource partner, and so I think the client thinks, “This is awesome. I’m going to just call Brian directly and I’m going to shave 20% off.” But if everybody agrees and is transparent on the front-end, so you, the outsource partner Brian, already know what I, the agency owner, am charging the client, then if we agree that you’re going to work with them directly, then you can still charge them the same thing, I still make the same markup that I would’ve made otherwise, and the work gets done.

But if that conversation doesn’t happen and it’s not recorded in a document on the front-end, that’s why I think a lot of agencies don’t want to disclose the outsource part. That’s why they print up business cards and all that crazy stuff. Which in today’s world, if I printed up a business car with my agency’s name on it for you, all somebody has to do is go to LinkedIn and we’re busted.

Brian Gerstner:

Truth. No, I think that’s totally accurate. For people who are outsourcing, though, it’s very short-sighted to want to jump straight in with end-client anyways, because the nature of an agency is you have a lot of work from a lot of different clients. You really need to cherish that relationship, make it go long. Clients come and go. It’s not a lifelong, till death do us part relationship, typically. And so you need to nurture that and do the relationships. And if you make a good partner relationship, you can jump from opportunity to opportunity, and it becomes endless if it works out well and you’re really driving each other’s growth.

Drew McLellan:

Right. I think you’re right. I think it works out much better for both the outsource partner and the agency if that relationship stays healthy. As clients come and go, they both benefit from that.

Brian Gerstner:

No, 100%. The beauty, too, in our position when we’re working with directing these agencies is just the types of conversations we have. It’s so refreshing to be able to talk to so many different agencies and be able to have such candid conversations about how things work and how they’re going to. It’s really helpful, not only that, because I’ve been blessed with the opportunity in this position to not be in a bubble. Because as you’re working with an agency, a lot of those fears develop you’re just in that bubble, operating, working with your clients. But as you start to talk to all these other agencies, you realize that we all have so many shared experiences.

Drew McLellan:

Absolutely. Yep. So from your perspective, one of the challenges I think, especially with web dev and PPC, is that those people are expensive. And if agencies don’t have a lot of work for those people, they can’t keep them busy full-time. That’s an expensive investment. And the other risk I see agencies make on the PPC and web dev side is that they have one person. So they don’t have enough work to have a whole department, but they have one person in-house that’s doing all the dev or all the PPC. And God forbid that person gets hit by a bus, gets cherry-picked by a client, which is happening all the time now, or by another agency. All of that intellectual knowledge walks right out the door.

So, what’s been your experience in terms of working with agencies, in terms of A, the money that they can save, but B, the continuity of having an entire other company be your partner rather than a single person being your go-to?

Brian Gerstner:

Throughout our time, we’ve worked in a lot of different capacities before we came to this core flex strategy, as you’ve expressed. And we have developers of PPC, people in house, or just paid media, and there would be a bottleneck that would occur, because we’d always try to grow and grow and grow, and it’s not like you can walk up and go, “Oh, this is great. I’m glad. Let’s get started. Okay, we’re going to begin this project in three and a half months.” Just doesn’t happen.

So we would bottleneck constantly. So then, in our history, we would go out and start working with a lot of individual freelancers. And the benefit to an individual contractor freelancer is the price point. The price point became one-third of what it takes to work with another agency. But we ran into that same situation where we had Jack and Jills of all trades, but no one really had every single specialized skillset. So as we started to grow and the demands started increasing, that’s where we felt that we needed an actual group of people with multiple specialties, and that was the point to where we went international with our outsourcing.

Drew McLellan:

So let’s talk about that, because a lot of people, the minute they hear international, they’re like, “Nope. I’m out. I don’t want to deal with the timezone. I don’t want to deal with the language barrier. If they drop the ball, I have no opportunity to sue them or to get made whole.” So how have you resolved all of that?

Brian Gerstner:

Well, back to earlier, there is a lot of reputation and recommendations, as much as possible. Knowing that there’s someone who has worked with them in the past is greatly helpful, but you don’t always have that. So over the years, my personal strategy has always been to just start talking to them, and in a little project here, and just start to grow that project and grow that trust, but definitely not jumping in with both feet right away or throwing things over the fence.

Drew McLellan:

But you guys have solved that problem for your clients. I mean, you’re not sourcing new resources in India. You’ve partnered with a company there that you’ve worked with for, gosh, a long time now, and all of the reasons why someone doesn’t want to work with someone overseas, the timezone, the language, you guys have resolved all of that, right?

Brian Gerstner:

A lot of it. There are unique challenges to it. And the beauty is, we’re not outsourcing. We’re actually offshoring now. We’ve gotten to that point where the companies [inaudible 00:45:04], we’ve merged together, which is great advantages as far as systems and processes and everything.

Drew McLellan:

Right. They’re not an outsource partner now. They are part and parcel employees of White Label.

Brian Gerstner:

100%. And I won’t lie to the fact that I do lose a lot of sleep because I am up late at night. They are literally on the other side of the world. So, that’s one of the benefits we provide, is we allow people to outsource on their own schedule. We’ve solved a lot of that through just our nonverbal documentation, the tools that we use, the integrations to get everybody on.

But to your earlier point, going over into other countries is a little frightening, because you’re taking a client relationship with something they’re depending upon, which is oftentimes sensitive because you never have enough time for everything, and you’re working with somebody who you’ve never physically met. Even when you do stay up late to make sure that you’re overlapping, you have limited windows of conversation that you can have.

Drew McLellan:

Right. But for you guys, and I know this because, as I have said to listeners before, my agency has partnered with White Label to do work for our clients, I never talk to anybody in India. I always talk to you guys. And I talk to you during normal business hours, and you talk to them late at night. So I didn’t have to be up late at night, right? Yeah, right. That’s not my problem.

Brian Gerstner:

That’s the beauty of it. That helps a lot of the people out. But in going overseas, though, you do need to really plan what you’re doing. You do need to look at experience. You don’t want to go in too fast. It does take time and it does take patience, and it takes that level of onboarding over many years and many projects to really get comfortable. And at some point, if you are looking for love in that relationship, you have to go over, you have to break bread with them, you have to see them face-to-face, make sure, as we’re saying, that they fit your culture. Because at the end of the day, although it sounds frightening, it’s really all about communication. This is people working with people.

There’s a tendency and a stereotype where, when you’re outsourcing to other countries, it’s just a thing, you’re just doing it over there, and there’s a little bit of humanity lost in the sense, because communication is much more difficult. But if you can get past that and just understand everybody has great ideas, that honestly, across the seas, English is spoken so well, and start with the work that is well-documented. Start with the work that is very process-oriented, and then progressively work to see if that partner you have there has strategic skills, is hungry to work with you, and has that kind of innovation built into them as a person.

True entrepreneurs who want to do the best. They’re in love with the work. They’re no different than everybody here. [AHP 00:48:21] and all these specialized skillsets are not isolated to one country. It’s a worldwide thing. And honestly, some of those other countries are much more advanced in the training that they do in these skillsets, because it’s such a huge opportunity. India is a powerhouse for IT outsourcing. And so is eastern Europe and a lot of Asia.

Drew McLellan:

Yeah. So I think you’re right. I think if somebody wants to do this on their own, it’s sort of a go slow and go steady, or find a partner like you that’s already done all that work and take advantage of the skillsets without all of the disadvantages of having to cultivate that relationship and find the right partners, right?

Brian Gerstner:

Mm-hmm (affirmative).

Drew McLellan:

Yeah. So, when you think about the work that you’re doing with agencies, are there some common things that agencies can do better? When we get ready to go to an outsource partner, are there some common things that we could be … We’ve talked about the creative brief. We’ve talked about enough time, which I don’t think actually ever exists. Are there other things that we could be doing to be better partners to out outsource partners?

Brian Gerstner:

Yeah. As far as, when you go into a project, a lot of the faults that we see is you come in and, we talk about the brief not being fully built out, but a lot of times, if you don’t have that depth of skillsets in there, we don’t really know what’s required for what we’re asking. So, because of that, a lot of times the budget doesn’t match the scope. If you’re moving too fast into a project, you’re like, “Well, let me see what I can get done.” And everybody’s just trying to get it there, but the end result isn’t what you want it to be because the scope of work and the budget don’t match. So it’s back to that point where bad news does not get better with time, so have just those very candid conversations upfront so that you can discuss that right off the bat.

Drew McLellan:

But that also leads to what you said earlier, which is the earlier you can bring the partner in to say, “Hey, our clients want this thing. We think it’s going to cost this. What do you think it’s going to cost?” So that you’re not handing your partner a budget that guarantees they’re going to under-deliver.

Brian Gerstner:

Mm-hmm (affirmative). Correct. And the other aspect, too, is outsourcing doesn’t mean that all of a sudden that project is off your plate. We ourselves internally, we try to shoot for maybe like 10 to 15% of project management into an account project, but that’s a stretch goal a lot of ties. When you get into especially more complex projects, project management can occupy like 20 to 25% of a project easily. And you got to know that a lot of that time is still yours to do the planning. Proper planning prevents poor results. Getting that over there and being available, having the weekly meetings, and the truth is, hold your outsourcing partner accountable. Say, “We’re going to meet on this schedule,” if they’re not bringing that type of meetings to the table. Make sure that you’re talking to them regularly, that you’re checking in, that you’re reviewing the project and expectations are very clear. Those are the two things that often really cause issues when you’re looking for [inaudible 00:52:02], trying to throw things over the wall and just not understanding the full scope of the project.

But to your point in how to connect it better, is work with somebody, develop that communication so that they can be very frank and very upfront with you. And that’s one of the fears in outsourcing is, are that people that you’re outsourcing, are they candid with you? Do they push back? Do they say no? When you talk about, “Who should I choose?” I think those are things you should expect from your partner. Not just authority, but just that whole honesty.

Drew McLellan:

Yeah, absolutely. Well, as we’ve said, there are so many advantages to outsourcing. And it’s a very rare agency today, even some of the biggest agencies we work with, two, three hundred people, it’s almost impossible to have all of the skillsets under the roof anymore. And so, figuring out how to be a good partner and how to find the right outsource partner is really a critical part of running and managing an agency today, I think. So, I think we’ve got to get good at it.

Brian Gerstner:

Drew, like the Agency Management Institute and just those peer relationships [inaudible 00:53:15]. We keep going back to a reputation of recommendations. You have to be talking to other agencies. You have to be sharing experiences. And for you to move fast, you have to move into that trust quickly, and that is really the only way to do it.

Drew McLellan:

Yeah, that’s a great point. This has been great. Thank you very much for spending some time with us. Thank you for helping us think about how we can be a better partner to our outsource partners. If folks want to learn more about White Label, the work you guys do, where should they head? And if people want to contact you directly, what’s the best way for them to do that?

Brian Gerstner:

On our website, whitelabeliq.com. And Drew, as you know, for AMI agencies and people listening to this, we do have special offers available too.

Drew McLellan:

Right. So that means it’s whitelabeliq.com/ami if you want to get to goodies. And Brian, if people want to reach you, can they do that through the website as well?

Brian Gerstner:

Absolutely.

Drew McLellan:

Okay, awesome. Thanks for being with us today. Appreciate you sharing your insight. You sit in a very interesting cat bird seat, spending part of your time inside the agency and part of your time as an outsource partner to agencies, so I appreciate your sharing your unique perspective. Thank you.

Brian Gerstner:

It’s been great, Drew. Thank you.

Drew McLellan:

You bet.

All right, guys, this wraps up another episode of Build a Better Agency. Many thanks to our friends Brian and the rest of the team at White Label for being the presenting sponsor of Build a Better Agency. They make it possible for us to come to you every week. And again, as Brian and I have said, head over to whitelabeliq.com/ami to see the special offer that they have for you.

Just also want to remind all of you that every month we give away a free seat at either one of our live workshops or our on-demand workshops, and all you need to do to be in the drawing for that is leave us a rating and review on the podcast. So wherever you go to get your podcasts, if they will let you leave a rating and/or a review, do that. Take a screenshot because tiggerlover07 does not tell me who you actually are or what agency you work at, so I can’t translate your user ID, in many cases, to who you are. So take a screenshot, shoot me an email with it, and we will put you in the drawing. And once you’ve done it once, you’re all set. You’re in the drawing until one of these days you win and we get to meet in person. So that would be awesome.

I will be back next week with another guest to help you think a little differently about your shop, and to continue to build an agency that is more sustainable, more scalable, and if you want to down the road, more sellable. In the mean time, you could reach me at [email protected] I’ll talk to you soon. Thanks for listening.

Thanks for spending some time with us. Visit our website to learn about our workshops, owner peer groups, and download our salary and benefits survey. Be sure you also sign up for our free podcast giveaways at agencymanagementinstitute.com/podcastgiveaway.