Research Insights from Agency Core with Susan Baier and Brian Gerstner

Drew McLellan:

Hey everybody, Drew Mclellan here with another episode of Build a Better Agency. And we have a doozy for you today. So good friends to ami people you are all very familiar with odds are Susan Byer from Audience Audit and Brian Gertzner from White Label IQ have come together to form a nonprofit called Agency Core. And the purpose of Agency Corps is to do an annual research study and then some midi studies that basically just talks to agency owners about what’s going on in their world, what’s going on with the business, what’s going on with any aspect of sort of their life. And trying to distill that down so that we as agency owners and leaders and for those of us who serve agencies, have even more data to guide and direct agencies to a very successful profitability path. And so they’ve just come out with their 2025 study and it is packed with information that I think you’re going to find insightful, I think you’re going to relate to it, I think you’re going to feel seen, I think you’re going to hopefully hang with us as we work through the data and then talk about some next steps on how to react to and act on the data. I think it’s going to be a very practical, useful episode for you, very applicable right away. And I’m super excited to welcome them to the show and dig into the research findings that they just came out of the field with in the last couple months. So let’s, let’s get right to it. Susan, Brian, welcome to the podcast. Thanks for joining us.

Susan Baier:

Thank you, Drew. Great to be here.

Brian Gertzner:

Pleasure.

Drew McLellan:

Okay, start by telling everybody what Agency Corps is and isn’t. And then we’re going to talk about the study that you’re just getting ready to release.

Susan Baier:

Agency Corps is a nonprofit initiative that Brian and I have started to get agency owners insights about how their colleagues and peers are feeling about things, how their agencies are doing, what they’re challenged with. And the core aspect of Agency Core is that even though Brian and I run agencies and we do sell to agencies, Agency Corps doesn’t Sell anything. It doesn’t gate anything. We’re here just to ask questions. We’re here to do research and provide it freely to agency leaders like ourselves to help us all keep our heads above water.

Brian Gertzner:

Yeah, I mean, as Susan and I were talking, we felt Agency Corp, being an independent nonprofit organization was the key to a success. And you know, in our hearts, you know, we’ve been in the agency space for so long, just such amazing people. You know what, how could we truly be helpful? And the independence of agency corps was one way we thought we could do it by just bringing so many people together to kind of be the voice of this research.

Drew McLellan:

So this is not the first year you’ve done the research. So let’s talk a little bit about the data that you found this year and maybe what trends you’re seeing over the last couple years and then we’ll, we’ll dig into what 2025 is looking like for agency folks.

Susan Baier:

You bet. So the reason I approached Brian about doing this again is because I think you remember, Drew, that in 2023 I released a study called the Agency Audit, which was know, surveying agency leaders. And I really wanted to do that again. And Brian was game. It’s been very helpful to have him and his team, they’re going to be helping us with all the marketing and the communities building and social media and everything like that. So we put basically the same survey in front of agency leaders that we had done before. We added some new things, as you’ll see. But what was so striking to me, we had over 700 agency leaders participate in this research and we saw the same attitudinal landscape that we saw two years ago. In 2023, we’ve got the same five segments, almost no attitudinal adjustments to them at all, in almost exactly the same proportions.

Drew McLellan:

What does that tell you, Susan?

Susan Baier:

I think it means that the issues, most of these segments and this year, quite frankly, all of them have challenges. And the challenges that we’re seeing, this is an entrenched problem. 2023 wasn’t just a, hey, things have been wild since the pandemic and now we’re dealing with stuff. Here we are two years later and we’re seeing the same things. And in some cases we’re seeing changes for the worse. And so for Brian and I, I think it just speaks to how needed it is to be talking about these challenges as agency leaders and sharing ideas about them. And for agency servants like you and Ami Drew to be aware of this and really actively thinking about how we can help? How can we contribute to making things better?

Drew McLellan:

Yeah. As I was saying to you guys, before we hit the record button, as I was looking at your data, I had sort of two reactions. One which was validating, like, the agencies that are doing well are actually following most of the core advice that we give at ami. And then there’s. Despair is too strong a word, perhaps. But it’s always heartbreaking to me when we know the path to profitability and success. We talk about it every freaking day. And yet there are some agency owners, a lot of agency owners, that just cannot get out of their own way to follow the advice, to make the time, to make the investment, to do the things that would solve some of their biggest burning issues. So, you know, to see all of this and to read, you know, the first half of your research is heartbreaking in terms of how people are stuck, how people are scared, how people are struggling. And there’s a part of me that wants to sort of bang on the computer screen and go, okay, there’s a path. There really is a path to getting out of this.

Brian Gertzner:

Yeah.

Drew McLellan:

And we and other people have been talking about it for a long time, but it’s hard, and I know it. I mean, it’s no different than stopping smoking or losing weight or taking care of other things. You know, rebuilding a marriage. I mean, these are things that take a lot of effort and focus. And I just think so many agency owners are so quagmired in doing client work and other things that they can’t lift their head up and do what they need to do to run their agency.

Brian Gertzner:

Well, it’s amazing to see it in the data. I mean, this gives it a whole different voice. It’s kind of like with my kids and just myself even growing up, when you hear it in a different way and see it in different contexts, it can have a different impact. And that’s what we’re really hoping for. And also, as you just said, there’s a lot of dramatic shifts in the data.

Drew McLellan:

Yeah.

Susan Baier:

Not for the better, unfortunately.

Drew McLellan:

Right. Let’s talk quickly about the five mindsets that you identified, the five segments and sort of where they’re each at.

Susan Baier:

Sure. So as in 2023, we have five, and they’re all about a fifth of the audience, which is, you know, from doing a lot of this research with Agency Edge over the years. That’s not something we set up ahead of time, just how it hashed out. Right. So we have really two segments that overall are doing much better than everybody else. It doesn’t mean that they don’t have challenges. They do. But the thought leaders and the loyalty builders have really tapped into their reputation and are focused on things that are giving them resilience that other agencies are not seeing. So in the case of the thought leaders, they not only have a reputation, they not only are experts, but people talk about them as experts, and they prioritize marketing their agency just like they would a client. And they’re consistent. And we know that’s one path, one part of the path to success.

Drew McLellan:

Well, you know, Susan, I can remember in lots of the research we’ve done together and that you’ve done independently, one of the key things about being a thought leader is not that you think you’re a thought leader, but that other people talk about you as though you are a thought leader, that they share your content, they refer to you as an expert, you’re invited on other podcasts, write a blog post, guest articles, whatever, that you are perceived by your marketplace as a thought leader.

Susan Baier:

And that’s more persistent this year than ever, both. In the upcoming Agency Edge study we’ll be releasing at the Build a Better Agency Summit, we see that even further. And in this study, it’s not that we asked thought leaders what makes them successful, we asked them a bunch of things. But one of the things they consistently cite is that others recognize them as experts, and their reputation is built on what other people say.

Drew McLellan:

Yeah. And then the other segment, the loyalty builders, those are the folks that are able to grow their existing clients. And, you know, interesting, the statistic that we teach in a lot of our workshops is 60 to 70% of your net new revenue should come from existing clients. And when Danielle and I come in to audit an agency, they’re much closer to 15 or 20% at best. And none of them, to your point, none of them have a systematic process of growing clients. This is such a persistent problem in our. In our industry that we actually developed a workshop for it called Growing the Clients. You already have to teach the system and process that agencies need to deploy. So I’m not surprised to see either of these, and I’m grateful to see that these are the agencies that are doing well. But we also have 3/5 of the respondents who are struggling a little bit. What are they struggling with?

Susan Baier:

So staffing strugglers, just like two years ago, struggle to find the qualified people that they need. They’re really struggling with salaries. You know, I think that the staffing challenges that they had two years ago were a little different. Different, which we’re talking about, but they’re still having trouble keeping the people that they need to do the work and being able to pay them and find them. Change seekers are honestly ready to throw up their hands and say, I don’t even know if this is possible anymore. They are just completely overwhelmed and think the industry is changing to such an extent that they cannot adapt. And the cobbler’s kids, I will tell you, of which I am one. Gosh, they know what they need to do and they just don’t do it with respect to taking care of the work of marketing their agency and doing the work for their agency that they do for their clients.

Drew McLellan:

Yeah, if only they did for their clients, if they only did it for themselves, the great work they do for their clients, they would pop up into the thought leader.

Susan Baier:

They absolutely know what to do. They just struggle to do it. And you know, one good thing about this year is that loyalty builders, which really has a double whammy of being able to retain clients, get them to pay more year over year and are recognized thought leaders are the one group that is growing significantly. So I do see hope that people are learning. What am I and a lot of the other experts out there are trying to teach them about this successful way to navigate agency life.

Drew McLellan:

Was there any like the staffing strugglers? Are they smaller agencies than some of the other groups? Was there anything where size impacted where somebody was in these segments?

Susan Baier:

Nope. Just like before, it’s really across the board. You can be any of these and any of your colleagues could be any of these. So it’s not having, it’s not about having a big agency or big clients, even in the small to midsize agency world, or being less than five, you know. Yeah, it’s about how they face things.

Drew McLellan:

So, you know, I think it, you know, it’s 20, 25. Everybody is all we can think about and talk about is AI. So it’s interesting that the threat of AI was not the big headline. When you asked agency leaders what, what they were worried about that, you know, that was down what 21% thought of as a severe challenge where you had, you know, much higher percentages around pipeline and other things. So can you talk a little bit about, you know, Susan, especially because our audience edge research is all about how clients feel about agencies and how agencies are using AI, how clients are using AI, which I know you and I are scheduled to do a podcast on that in a few weeks after we release the data at the summit. So talk a little bit about the challenges and what surprised you about kind of the hierarchy of how the agencies saw these challenges?

Susan Baier:

So, Brian, let me just set up some numbers and then I’d love to sort of hear your thoughts on this. So we asked folks, like, what were the biggest challenges that they were having? 61%, as you said, said maintaining a robust pipeline of right fit clients prospects is the biggest challenge. And to your point, the impact of AI is at 21% and the risk of client defection is 18%. Even salary levels are only 35%. And the robust pipeline problem is pervasive. Single segment struggles with this problem. Another data point on this is we have an attitudinal statement in there saying finding new clients is harder than ever. And the percentage that strongly agreed with that in 2023 was 15%. This year it’s 43%.

Drew McLellan:

Three times. Huge jumps.

Susan Baier:

It’s a huge jump. So pipeline is overwhelmingly the big elephant in the room, Brian.

Brian Gertzner:

No, absolutely. And when I look at the statistic and see AI so far down the line and so much hype around it and how it’s changing everything, for me, it gives, it creates tons of questions. And I’m absolutely excited to start getting our agency partners in to provide that analysis. So we can hear from a lot of different people what, why they think that’s happening. You know, personally as an agency owner, I look at this and, you know, for me, AI is one of the reasons why the having a weak pipeline is such an issue. It feels like urgency versus importance. You know, AI is really disrupting the work that’s being done, the work that’s being done in house. But I think that what’s in front of people’s faces right now is the weak pipeline. And there’s just a lot of other reasons why that pipeline is weakening. AI is definitely one of those reasons, but it was shocking to me because I know particularly in our industry with design and development is having huge influence on how we work, our methodologies and retraining of our staff.

Susan Baier:

Yeah, I was actually kind of pleased to see AI so low. I hear so much, and I’m sure you do too. We kind of tend to chase shiny objects sometimes and blame the new thing for our problems. And I thought we might see AI cited much more commonly as like the bugaboo that’s affecting agencies right now. So I was glad that agency leaders don’t put it up there with the pipeline problem. I think that’s a good thing because what we’ll see in the agency edge research is that clients don’t put it up there either. So, yeah, I just thought it was fascinating for Brian and I, we looked at the data and went, this is it. This is the big problem that our agency guides. The folks who serve agencies that can help us do better and are thought leaders in our space need to help us with. And prioritizing agency marketing efforts was 42%. Getting clients to pay us what we’re worth, 39%. Competing for work, 37%. And to your point, as a student of AMI and an agency owner myself, I know that for me, those things have been tied together, those things around thought leadership, getting a reputation, having clients pay us what we’re worth, getting clients coming into the pipeline instead of us having to go scrabble for every piece of meat we could find. They’re all connected. I’m sad to see so many agencies struggling with this pipeline problem, but I think it gives us as an industry a tremendous opportunity to focus on what will really have a huge impact on our colleagues.

Brian Gertzner:

Yeah, just a lot of those foundational aspects, right?

Susan Baier:

Yep.

Drew McLellan:

Yeah, yeah. So it’s interesting, you know, through our peer groups and the work that we do, we sit with hundreds and hundreds of agencies, and one of the questions we’ve been asking them lately is, how are you deploying AI in your agency on behalf of your clients and on behalf of your own agency in terms of organizational and efficiencies and things like that? It’s fascinating. What I’m quickly seeing is this divergence where we have a subset of agencies and it is the minority, but we have a subset of agencies that have really embraced AI as a tool in all its facets and forms and are figuring out how AI helps them be faster, smarter, dig deeper, know more, provide better context, all of those things, and they’re not afraid of it at all. And they’re already way down the path like it’s a part of their business today, and they’re just maturing how they use it. And then the majority of agency owners are still sort of puttering around with using ChatGPT to write blog posts, if they’re playing with it at all. And it’s sort of have this arm’s length sort of disdain. Or it may be that much like their own thought leadership, they don’t have the time to actually spend to learn it and have a clear enough brain. You know, one of the things that I think a lot of agency owners struggle with is there’s so much on their shoulders, there’s so much in their head that it’s hard to step back and be a strategic thinker on your own business’s behalf. You’re so on the hamster wheel, and you’re so worried about staffing and payroll and new business and all the other things. It’s so tactical that it’s hard to step back and be really strategic. And so I’m curious, and I suspect your data didn’t drill deep enough to say this, but I wonder if one of the reasons why AI came in so low is because many agencies really have not devoted the time to. To really understand what AI could do for their business and their clients if they invested the time to understand it better.

Brian Gertzner:

No, absolutely. There’s. Initially, as AI started, even myself, I was sitting there going, well, what does AI not do? And trying to find strategic advantage in being in those spaces. But as we move forward, and as I talk to a lot of other people in our space, really, it’s a need to lean in and to understand what does AI do and how can we be more effective. And, Susan, you were even talking about, it’s not even efficiency. It’s about what are all the new kind of methodologies? What are the new things that have not been done yet that AI is going to help us do? I think that staying out of it’s kind of a strategy of fear. And it’s the difference between being AI enabled, where you’re working normally, and then using AI to help augment you, or being actually AI first and leaning in to gain that efficiency out the gate.

Susan Baier:

It’s a great point, Brian. And one of the things, Drew, that are interesting to me as a researcher is when I wrote this statement, we had a list of potential challenges that people could have. And that’s where this data came from, of course. And this item is literally the impact of AI on our relevance. So it’s not positive or negative. And I think I sort of assumed that people would see that as AI is going to make us irrelevant. Right.

Drew McLellan:

Yeah.

Susan Baier:

What we’re seeing, quite frankly, from the agency Ed research, is that we need to be thinking about that statement differently. AI can make us more relevant. And that data, I think, is going to blow people’s minds when we reveal that this month.

Brian Gertzner:

Yeah. One point in the data is when it says agencies will have to step up their game to prove the value to clients. 73% of the respondents said that, you know and you know about themselves.

Drew McLellan:

Right. About ourselves as an industry, we have to step up. Yeah.

Brian Gertzner:

And 51% of people said agencies will serve a different role in the marketing than they do now. Just Recognizing that just seismic shift that’s happening.

Drew McLellan:

Yeah.

Susan Baier:

And to see clients reflect that back to us too, in the edge research is going to be. It’s a, it’s a neat combo this year.

Drew McLellan:

Well, you know, it’s interesting. One of the, one of the things we’ve been talking about for a few years is, and it started with freelancers, even before AI was the hot topic, was that agencies historically have made money by making things, by producing stuff, intangible, often stuff, whether it’s commercials or scripts or whatever it may be. But for a long time, freelancers have been nibbling at our lunch on that because they can do it cheaper and faster and clients have started building in house departments to make the stuff. The one thing that agencies have always had the edge on is that outsider inside perspective, which is, I really understand your business, but I’m outside of it enough that I can offer you objective strategy and counsel. You had thought leadership to it, which is I’m an expert in your business and I’m an expert in marketing. And now I can really give you some insider views on what’s happening in the industry, what you should be doing to stand out and how you can be the market leader if you follow this path. So really everything that everyone’s saying, which is we’re going to have to be different, is, yeah, you are going to have to be different. We’ve been telling you that it’s harder and harder to make money making stuff, making blog posts, you know, and it’s hard to get a client who can throw something into chat GPT. And let’s face it, clients and quality are not always aligned. I mean, right, watch, watch television commercials on any given day, if you still get TV with television commercials and you can go, okay, clearly quality is not, you know, job one for a lot of these brands. So if they can just get it done.

Susan Baier:

Yeah.

Drew McLellan:

And it’s good enough, an AI or a freelancer or whoever is nibbling at your market share can do that. Then to your point, Brian, they’re right. We do have to step up. It’s harder to be strategic. It’s harder to be a thought leader. It’s harder to be somebody who can really guide a client with confidence because of your own knowledge and expertise. But that’s where the puck is moving. It’s where the puck has been moving for a long time. It was really where the puck was moving even before COVID Covid shoved it down the ice. And now we’re way on the other side of the ice and the agencies And I want to talk a little bit, Susan, about the. You mentioned the group where it’s like they’re sort of in despair because we’re certainly seeing that.

Susan Baier:

Yeah.

Drew McLellan:

If you’re not willing to do the harder work, I do think it’s going to be harder and harder for you to make money in the future as an agency because your relevance is being watered down by lots of other cheaper resources that are good enough. Are they as good as your work? Nope, probably not. Do the clients care? Nope, Nope.

Susan Baier:

Right. And what are the correlations we see between the folks who are doing well in this study and the folks who are really struggling is this idea of strategic versus tactical work. And you know, the folks who are incorporating strategy into every concept except they are resilient. They’re not losing clients the way other people are. But it’s also that reputation that they’ve got, et cetera, et cetera. And I look at the change seekers, that group you just referenced, who’s really having a hard time and you know, they not only say most of their work is tactical and they don’t get strategic work, but they also feel like clients don’t want to pay for strategic work, which we know from the data is not true because we have successful segments that are doing that. So I’m not. It’s a chicken and an egg situation. But I do think, and we certainly see it in the AI story that we’re getting from the agency Edge, that strategy is one of the ways to get more resilient, to get more clients, to get a reputation and to be competitive versus just having a bunch of tactical work. It’s really hard to get clients to move up their spending with you if it’s just tactic, tactic, tactic all the time.

Drew McLellan:

Yeah.

Brian Gertzner:

And you know, looking at, as you said, Drew, that, you know, looking at the ship from the outside of the bottle perspective, when we look at the other side of the coin and loyalty builders who are doing incredibly well, they are telling us that the work they do is better because of their relationship and they’re with the in house marketing department of their clients and they also talk about the highest value retention is building that relationship with the in house marketing department. So right there, that synergy and the ability for the agency to provide a strategic view that the client is not able to see seems to be working. I mean, it really is showing up from what I’m seeing with those who are doing well.

Drew McLellan:

Yeah. So, you know, it’s interesting. So I think it was podcast 100 where I talk about the artisanal bakery versus the wonder bread Factory still continues to be probably one of the most referenced podcasts I’ve ever done. And I think this is a great example of. This is a defining moment for agencies. You have to decide if you’re going to be that specialty bakery who does amazing work that other people cannot do because you know more, because you’ve, you’ve studied longer, because you’ve done deeper, or we do have agencies that are completely tactical. They are the Wonder Bread Factory. It’s like, look, we do white bread, we do wheat bread. They come in a loaf, there’s 50 slices in each loaf, and that’s all you get. But we do it fast, we do it efficient, we do it well. We do it for one niche. You know, we have an agency that all they do is lawn care clients all across the country, and they have it dialed in. They know when to drop the direct mail, they know what to do on social. So there is room. If you just want to be a tactical agency, there is room, but there are qualifiers. You can cannot be a generalist. You cannot be serve the butcher, baker and candlestick maker and be tactical and think you’re going to charge a premium price. That’s the other thing. When, when you are doing just tactical work, it’s a volume play as opposed to, you know, we often talk about the ideal, which no agency has. The ideal is that you would have 20 clients and each client is 5% of your AGI. That is the artisanal bakery. That is the crafting of deep strategy, drilling deep into those clients, having deep relationships with them. The Wonder Bread factories have a couple hundred clients and they just crank that work out and they do it so effectively and so efficiently and they’ve got so much data that helps them guide those clients where they need to go. So for listeners, we’re not saying you have to be a strategy first agency, but what we’re saying is you cannot straddle the fence and sort of be about strategy and sort of be about tactics and sort of be for everyone and survive today. You just, you just can’t. Again, we see the financials of hundreds of agencies, and the agencies that are struggling are the agencies that are the local generalist and they are competing against everybody. And it’s hard to prove your value proposition because honestly, you don’t have one, right? That you do good work, that you’re nice people, that you have good relationships. Everybody can say that. And so if you cannot prove to a prospect why you’re the better choice, I Mean, let’s think about it from the client’s perspective. You know, the average CMO or business owner or whatever, they sit in that seat for about three years before they get fired or their business goes out of business or whatever it is. So we are a huge risk to them. And so, you know, and you think about it, the loyalists and the thought leaders are proving to prospects why they’re a safe choice. The other three segments are struggling to be able to articulate why they’re the right choice for clients, which is why the pipeline is so thin right now.

Susan Baier:

Yeah. And in the agency edge over the years, Drew, we’ve always seen a segment of clients that are happy to work with tactical Wonder Bread agencies and, you know, get their expeditious work. But they’re also much more likely that same group to just switch out agencies because they want to. Even if agencies are doing well, they don’t stick around. And that’s a hard, that’s hard for an agency to be constantly churning clients so well.

Drew McLellan:

Right. I mean, you both know as agency owners, the first year of a client relationship is not as profitable as the fifth year. And so, you know, longevity and retention have to be much more important to agencies than historically it has been. Yep. All right, we’re going to take a quick break. I’ll be right back. Hey everybody. I know you’re anxious to get back to the show and so am I, but I want to remind you about the premier event for agency owners and leaders that is coming up right around the corner. I am proud of many things we have done at Agency Management Institute, but I’m probably most proud of the Build a Better Agency Summit. I knew there was a need, a hunger for a conference for real small to mid sized agencies. I’m talking five people, 10 people, 100 people, 200 people. Where we can come together and we can learn together. We can share our own experiences. We can have killer keynote speakers, breakout speakers, over 30 different roundtables you can participate in where you’re with a subject matter expert and other agency owners who are challenged with or interested in the same topic. And we have knocked it out of the park. This is our fifth year. Over 75% of the people who attend one year come back again in a subsequent year. So I know we’re doing a lot right. We would love to have you join us. Head over to agencymanagementinstitute.com and in the upper left corner there’s a tab says Baba Summit. You can register now. It’s May 19th, 20th and 21st, we would love to have you join us. We would love to have you come learn with us. We would love to have you come teach what you’ve learned to other agency owners and leaders. This is an incredibly collaborative, cooperative community and you can be a part of it for three days. And I promise you, you have never gone to a conference like this one. So please join us. All right. Welcome back. So what surprised you the most? What, what data points surprised you each of you the most?

Brian Gertzner:

Well, I mean, as I said earlier, AI being so far down the line for me was one thing that really stood out just because of, you know, as an agency or in the design development, it’s really changing how we work the methodology from there. I know your question was changed the most, but there was a lot of validation in this also. Overall though, it’s just honestly the loss of optimism.

Susan Baier:

Yeah, that’s what I was going to say. In 2023, we had 74% of our respondents who were strongly optimistic about prospects for their agency in the next year. This year we have 47%. That is a huge difference. It is really hard to know that fewer than half of us feel really good about even this year. And I think it’s, you know, I’m sure because I talk to a lot of agency owners as you do as a provider. You know, there’s a lot of uncertainty out there in general, but it breaks my heart to know that so many of us are really just not sure things are going to be okay. That change seeker segment is sure things won’t be. We like to have good news to data, but you know, it’s like a box of chocolates. You don’t know what you’re going to get. And I think it’s a wake up call for me and for Brian and I’m sure it will be for other agency advisors. That optimism has dropped so dramatically in two years for agency leaders because I think it’s really hard as an agency owner to, to keep plugging along and doing the hard work. If you’re not optimistic about the possibilities for it having a positive impact on your agency, that’s hard. It’s hard work.

Drew McLellan:

When were you guys in the field for to gather this data?

Susan Baier:

December.

Drew McLellan:

Okay.

Susan Baier:

Right before the new administration took place. So post election. Yep.

Drew McLellan:

It would be interesting and probably horribly sad. It would be interesting to go back out and ask the same questions because I suspect that uncertainty is even higher. So the change seekers, the people who are really despondent about the future, you know, we’re seeing more and More m and a activity inside our space and outside of the work that we do where agency owners have just thrown up their hands and said, I don’t, I don’t know how to fix this anymore. I need to get out before I have nothing, before I’m holding an empty.

Susan Baier:

Bag or before it kills me or whatever.

Drew McLellan:

Right, right, right. And so you’re right. I think that is horribly disheartening. One thing I will say, though, is, and this does not have to be ami, everybody who but the agency owners that are in peer groups, that show up at conferences, that have colleagues, other agency owners, where they’re really sharing with each other, they’re supporting each other, they’re sharing ideas. I will say the optimism of those agency owners is very different than those who are going it alone.

Susan Baier:

Yeah, I would agree. We all need each other. And I think for Ryan and I, who are very involved in those kinds of things that you mentioned and have experienced the value of being with, commiserating, learning from other agency leaders, that’s one of the foundational reasons we started this initiative. Because I think about all those folks who don’t have optimism, and then I hope they see this research and see that there are agencies doing well, doing things that any agency can do. No matter how big you are or small you are, no matter what you’re focused on or what your niche is, there’s no magic here. So I do hope that data like this will give agency leaders hope and optimism that there is a better way and it is achievable. And then the opportunity to learn from experts, to talk to other agency owners, to learn about events and places and communities that can help them. Because I know for me, and I don’t think I’m speaking out of turn for Brian, that’s the reason our agencies are still here. Right. Is because we’ve had that.

Brian Gertzner:

Yeah. And even look, even with as we were coming off with optimism conversation here, with change comes opportunity. As the pendulum swings, the people who are engaged, who are finding out what’s going on, who are investing that time to be out there actually talking to people, to know what’s happening on the ground, there’s going to be huge opportunity as this comes around.

Susan Baier:

And one of the data points that I thought was great in this is that, yes, worried about the unknown, uncertainty, all of these challenges, this, this need to play a different role. But in the Midst of that, 87% of our respondents say they are actively changing processes and operations in their agency right now to adapt for what is coming. So you Know, I love this about agencies. I think that especially the small to mid size, we’re nimble, we can actually and stubborn shit.

Drew McLellan:

Right. Like I’ll be damned if I’m going down. I am going to figure out a way. I mean that’s one of the things that I think got everybody through. Covid. I think you’re right. It’s the willingness to be nimble, it is the willingness to evolve, it is the willingness to try new things, it is the willingness to stick your neck out a little bit. And it is also just the sheer stubbornness of I am not going to fail. And part of that I think is the commitment to the team. Like these people depend on me to pay their mortgage. I’m not going to let them down. It is a deep loyalty to the clients and it’s also just something baked in the owner personality that is, screw you, I am not going to be taken down. I swear to God. There is, there is that thread that runs through all of you.

Brian Gertzner:

When I started getting this, like just the moxie in the agency space is I just fell in love with.

Drew McLellan:

Yeah.

Brian Gertzner:

I would say it’s just because like no one goes into this thinking that they’re going to pump out widgets. You know, things are changing constantly. So you got to love that for some reason.

Susan Baier:

Yeah. You know, years ago I did a study for keeping around small business owners and why they do what they do and why they started.

Drew McLellan:

Remember that study?

Susan Baier:

You’ve seen that research. They, they shared it. But there was one segment in that group that was really struggling and have a had a really tough time. And when keep went out to their conference and said, hey, these are what we see in small business owners and they had these banners up where people were taking their pictures with their segment or whatever. But that one group, KEEP positioned that group not as failures but as fighters. And I saw so many people saying I’m here and I’m not giving up and this is me and feeling strength from that. And I hope that happens here even if you are having a tough time. We know that 87%, most of whom are not very optimistic about the situation, are working to adapt to this situation. And I hope that agencies see this as a challenge that they can overcome. And I hope that agency providers and guides are encouraging them to believe that and find the path for them because it is a rallying cry. I mean the lack of optimism and the lack of pipeline if left alone would kill the entire industry. But I don’t think that’s going to happen because I know agencies. So, yeah, nice to see people are working behind the scenes.

Drew McLellan:

So at the end of your research and we’ll include in the show notes a place for folks to download your report. But at the end of the research, you do identify based on the data what are the key traits of high performing agencies. And I will say, and I said this to you guys before we started was validating because it’s like, okay, this is the stuff that we’ve been preaching at AMI for as long as I’ve been around, you know, and so I just want to quickly go through the six of them and have you guys kind of comment on them. So I’m going to give you all six and then we’ll go back and comment on them. So it’s niche positioning. It’s having a reputation for your expertise. It’s formal retention systems for clients and probably employees as well. It’s pipeline focus, it’s proactive strategic thinking and it’s team loyalty initiatives around. So again, it is around the team. So that’s based on the data you had from almost 800 agencies. The agencies that are doing well, the agencies that are optimistic, the agencies that are reporting good success, full pipelines, all of those. They check those boxes. So they do. Let’s, let’s just quickly talk about each of those as we sort of wrap up because I, as you are listening to this episode, I’m hoping you’re like, you’re not thinking, oh my God, I should have been a bank teller. You’re in the right place, you’re doing the right things. And there is a path. That’s I think the message I want to keep sort of reminding everybody is, and guess what, the path isn’t any different than it’s been for the last decade. We just need to actually start doing it with excellence and with depth. Right. So let’s talk a little bit about niche positioning. Again, this is, we know an industry, we know an audience, or we deliver something very specific. Right?

Susan Baier:

It is. And we see niche in the research based on a whole bunch of different things and often multiple things. And you talk about this, Drew, and that’s evidenced in the research. So I know you speak to, and certainly I do. So many agencies that think that niche has to match their current client base or it has to be about picking one vertical. We know that’s not the case. So if you are struggling with niche, you need to get over it and you need to get help to figure out how to make that work better. Because that is one of the key things that will allow you to differentiate.

Drew McLellan:

Yeah. We’ll also include in the show notes we’ve created. Basically, it’s like a report card where you grade yourself against five different niches and with the things that make a niche good. And then you can sort of figure out based on your Susan to your point to your current client mix or the, you know, if I was niching my business today, it would be all around baseball. But I. It’s too late for that. But you can sort of look at where you as an agency already have a leg up in a niche or niches and sort of let that help define you. But again, this is about thought leadership. And I just want to remind you what we said earlier in the show, which is thought leadership is not you thinking you’re an expert, it’s the marketplace thinking you’re an expert.

Susan Baier:

That’s right. Yeah, that’s right. And one of the things that successful folks are doing with niche is they haven’t just decided a niche and are keeping it to themselves. They are consistently communicating their niche in their marketing efforts. So they are not afraid to fly their flag when it comes to niche. Doesn’t help if you’re the only ones who know it.

Drew McLellan:

Which gets to the second point, which is reputation for expertise. So this is that thought leadership piece. You have earned the reputation for being an expert in something. So the world sees you as the expert and therefore feels safer coming to you as a prospect, right?

Brian Gertzner:

Absolutely. I mean, with being so much uncertainty, that role of being an expert here is even more critical than ever before. You really have to stand out. I mean, not only with the uncertainty, but it’s getting noisier and noisier and noisier with just continuing amounts of where people are finding information and the ability for the. The baseline of information is accessible to everybody now. So that expertise is something that’s harder.

Susan Baier:

To have and trust is harder to gain. And I think this sort of having a reputation thing is something we’ve started to break apart in the last couple of years in our research and assess the impact. You’ll see it in the agency edge with clients of us saying we’re experts versus somebody else saying we’re experts. And we see significantly greater impact in the minds of clients of somebody else telling us we’re an expert. And what we see in this study is that the folks who are doing it recognize that difference and are working towards building that reputation for expertise.

Brian Gertzner:

Brian, as I was growing up, there’s the whole information age of information. But now, as I said earlier, that base level is there. So it’s really the age of intelligence. How do we use the information now? And we’ve just matured and evolved.

Drew McLellan:

Well, I think, I think, Brian, it’s the age of intelligence and insight. Right. That’s what an expert does. They know the same facts that everybody else does, but they know what the facts mean. Yeah, right. That’s what an expert. Right. For sure.

Susan Baier:

And they have advice based on them.

Drew McLellan:

Right. And they’ve already proven that their advice works for other clients. Right?

Susan Baier:

That’s right.

Drew McLellan:

Okay, so formal retention systems around client loyalty programs and touch points.

Susan Baier:

So this is interesting to me because this is something we really see in the loyalty builders. And they do not lose clients like other folks do. The thought leaders don’t either. But even though they don’t have sort of formal retention systems, they have an informal one which is they’re the best at what they do and their clients know it.

Drew McLellan:

Right.

Susan Baier:

So this is just, you know, for the, for the thought leaders, this is about a understanding what makes clients leave. These folks focus on that, they learn it, they listen to clients and so they know what makes clients leave. And they’ve built a system to avoid that from happening. And a lot of it is about, as Brian said, really close and consistently. And then really having a process that says, look, we’re going to tell agencies not only what we’ve accomplished, but what our work looks like and how much we’re investing in them on a consistent basis and coming to them with new ideas, stuff like that. It makes a difference.

Drew McLellan:

Yeah, for sure. Yeah.

Brian Gertzner:

I have this theory. I don’t just personally that AI is the thing that’s going to make us human again. Because the loss of trust and just, you know, seeing all this information out there, it’s going to force us to get back in front of each other. We’re going to have to make those contacts, do those check ins much more aggressively than ever before. Just to be seen.

Drew McLellan:

Yeah. When we teach this new workshop, the growing the clients you already have, we’re mapping out what you should be doing at every staff, at every client touch base meeting, what you should be doing once a week, once you should be doing once a month, what should you be doing once a quarter, once. And agencies that we’ve only taught it once, we’re teaching again in September. But agencies that went through or like at first they were like, oh crap, that’s a lot. And then we did the math for them. We’re like, okay, here’s how many hours you have to invest and Honestly, it was less than 5 to 10% of the AGI of the average client. And then we compared what you invest to get a new client, and it was staggering. The difference. Right. So again, a little bit of consistency here. And a system, and that’s the word you use in your report. A process, a system, a methodology that wraps the whole agency. And it’s not just the account person, but it’s everybody doing this that is what makes us feel so valuable every time we talk to a client. Right. So it’s critical. All right, so pipeline, focus. This seems like a duh, but.

Susan Baier:

It seems like a duh, but the folks who are not challenged to the same extent as everybody else, everybody has challenges with this, but for them, it is not reactive. It is consistent. It is a daily practice of work to build the pipeline. And that’s a combination of marketing, thought leadership, sales activity. No matter how busy things get in the agency, this is always a top priority. So again, to your point, like systematizing some of this stuff, just having a regular practice of this and just honestly keeping it on top of the list is what people are doing.

Brian Gertzner:

It’s even as basic, just being intentional. I mean, Drew, you told me many times, like, you know, if you go fishing for salmon, you’re going to eat salmon.

Drew McLellan:

Right.

Brian Gertzner:

You know, if you’re not intentional about it, you’re just going to eat whatever flows down the river.

Drew McLellan:

And sometimes that’s a rubber boot. Right, Right. Well, and I. And I think one of the sentences in your report is even during the busy season. So again, when this is. So when this becomes mandatory as opposed to optional, you know, it’s like eating. We eat every day. It’s mandatory to our bodies. Doesn’t matter if we’re busy, doesn’t matter where we are. Doesn’t matter if the food is good or not. Doesn’t really matter. We still have to fuel ourselves. And the pipeline is the same thing. You got to keep fueling it. Right?

Susan Baier:

Yeah. Well, and I think it is longer. I mean, I’m hearing from the agencies that I work with that it’s taking clients longer to make a decision, especially now.

Drew McLellan:

Right? Especially in this moment.

Susan Baier:

Yes. Right. So you can’t wait till next month when you’re at risk of hitting payroll to go find new clients, or you’re going to have to take what you get, and you’re not going to get the people that you want, and they’re not going to pay you what they. What you want them to do. So it’s something that has to Go. It has to happen all the time to be there when you need it.

Drew McLellan:

Yeah. All right. So proactive strategic thinking. Yeah.

Susan Baier:

This was really interesting to me because, you know, the folks that are doing well are incorporating strategy across the board, even in projects that have a lot of tactical work and even when clients.

Drew McLellan:

Aren’T paying for it.

Susan Baier:

That’s right. And one of the things that they are doing, and we’ve seen this elsewhere, is they’re regularly bringing clients new ideas. They are showing how smart they are and how much they think about the client’s business day in and day out. And I was at a very interesting conference this year where I was at a roundtable and one of the speakers was talking about how for his agency, this is a specific practice they have that’s part of regular meetings where everybody has to show up with new ideas and then they distill them and then they bring them to the client on a regular basis. And everybody knows that they are going to have to show up every week with new ideas for this client. And so it becomes very ingrained. And that was inspiring to me as an agency owner. But that’s what we see these folks doing, really getting proactive around demonstrating the strategy that’s in the agency.

Drew McLellan:

Well, and when you do that regularly. So again, this is part of that workshop. When you do it every time you have a meeting, it’s part of the agenda. Right. And there’s ways to structure it. It doesn’t feel like you’re selling. It feels like you’re helping. It feels like you’re so full of ideas, you cannot help yourself but keep serving up new ideas. And when we think about the advisors that we trust and we lean into, they’re constantly giving us new ideas, even when we didn’t ask for them, because it’s like they’re just bursting with them. And when you as an agency can.

Susan Baier:

Present yourself well, that’s great thought leadership, right?

Drew McLellan:

That’s right. When you as an agency can feel that way, then the clients and the team doesn’t feel like we’re selling. It’s just like, look, we’re just helping. We’re just. We just have some ideas we want to put out in front of you, and let’s chew on them a little bit together. Right. It’s a very different vibe.

Susan Baier:

Yeah. And it works great with clients, and it works great with those prospects who you don’t even know are looking at you. So it’s like thought leadership for clients. I think a lot of us who are doing thought leadership think about it for the broader community that we try to serve. And we forget that clients need that, too.

Drew McLellan:

Yep, for sure. And the last one is team loyalty initiatives. Yeah.

Brian Gertzner:

I mean, hands down, the mediocrity is getting beaten out of us and, you know, and professional services, we are our people. So making sure that we have the right people in the right seats and that we’re fostering and taking care of those people is critical because it takes a long time just to find those amazing people on staff. And when you have them there, what does it take to keep them? What does it take to fuel them? What does it take to keep them up to date? And just valuing that resource is critical. We did see in the study that hiring is less of an issue, but. But, you know, now I think having people who are just really experts at what they do and making sure that bench inside your agency is really strong is more important than ever.

Drew McLellan:

You know, I love the idea that mediocrity is being beaten out of us. It forces us to be better. It forces us to be what we want to be. Nobody, as you said earlier, Brian, nobody went into the agency business because we wanted to do the same thing every day and make widgets. We want to be significant to our clients. We want to be idea generators. And I will tell you some of the other things you’re talking about. The proactive strategic thinking, the formal retention, being a thought leader. That’s also how you retain employees. Employees want to be at an agency that matters. Employees want to work for something that’s. That believes in something that stands for something that has a reputation. And so some of these other things also feed into the growing and grooming and keeping of your best team members.

Susan Baier:

You bet. People want to work someplace where it’s great to work because business is always coming in and you have great clients and you get paid well and you learn things from your colleagues and you feel. You feel like you’re having an impact.

Drew McLellan:

Yeah, right. I mean, that’s what we all want, right?

Susan Baier:

Right, Exactly.

Drew McLellan:

This. This has been fascinating. I know that throughout the year, you guys are going to be drilling down into specific topics, and we’ll have you back on the show. So. So we can start drilling deeper into all of these. But this is a good overview and again, for the listeners, a reminder that there is plenty of reason to be optimistic. You just have to grab onto it. So, Brian, Susan, thank you, number one, for doing the research and sharing it with everybody and being as committed to the agency community as you both are. I know it’s Your community. So I know that matters to you because it impacts your worlds as well. This has been fascinating, and I know we have lots more to talk about, so we’ll have you back on the show soon. But thanks for. Thanks for being with us today.

Brian Gertzner:

Appreciate it. Thank you, Drew.

Susan Baier:

Awesome. Thanks for having us on, Drew.

Drew McLellan:

You bet. All right, you guys. So a couple of things. Some of this data is kind of horrifying and some of it is scary. And when you hear that nobody’s optimistic, not nobody, but 47% of us are optimistic, and the which means the other 53% are not so optimistic. You get to choose. One of the coolest things about owning your business is you get to choose. You get to choose if this data scares you or inspires you. You get to choose if you want to deal with this alone or you want to find a community to be a part of and share your knowledge and drink from the well of everybody else’s knowledge and sort of march through the challenges together. You get to decide if you want to be a generalist or a specialist. You get to decide this. It’s your business. This is a roadmap. This is a path forward that you can follow. Is it easy? Nope, it’s not. It’s why most of you haven’t done it yet. Is it doable, though? Absolutely. All three of us know agency owners and agencies who have plowed through this to get to the other side so that they are the optimistic ones, so that they do have a full pipeline, so that they do retain their employees. It is absolutely possible. It’s just a matter of where you put your focus. And frankly, too many of you are in the day to day of the work to focus on actually running your business. But this is the map. So hopefully what you took from this is I see the path and I’m going to start chipping away at it. By the way, this is not a one and done. This is not a. In two months, everything’s fixed. But you can make incremental progress every day towards being the kind of agency that is thriving today. Agencies are out there thriving. I see their financials. I know they are. AMI agencies on average took home over $300,000 plus a year. The agencies that we deal with that in the peer groups, because I see. I see the way they compensate themselves. So there is a path forward to have a great life for yourself, a great life for your team, and really serve your clients. And this data is helping you see that path forward. So learn from it, get inspired by it, and make some changes. That’s the bottom line of this. So, last two things, huge shout out to our friends at White Label, including Brian here who owns White Label. As you know, they’re the presenting sponsor of this podcast. Have been for a long time. They also sponsor the summit. What White Label does better than anybody else is they come alongside agencies who need some help with dev design and ppc. For some of you, you have, you have people on staff that do that work, but you need some extra hands. For others of you, you’re like, I don’t want it in house, I want a partner. So head over to whitelabeliq.comami to learn a little bit more more about them. And remember, if you’ve never worked with them before, they have a special offer just for you. And as we round the bend now, we just aired our 500th episodes and now I’m counting to a thousand. So as we march our way to a thousand. It’s only ten years away, it’s fine. As we march our way to a thousand. I am super grateful that you’re here with us every day and that you listen, that you comment, that you come together, that you share with each other, and that you are part of a community that wants to lift everybody up. I am super grateful for that. So thanks for listening. I’ll be back next week. Hope you will too. All right, see you then.