Episode 243

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There are two questions plaguing agencies in the spring of 2020. The first is how are brands going to respond to covid when it comes to budgets, tackling new projects and their relationships with agencies. The second is how can the agency sensitively and successfully mine for new business while the world is trying to get back on its axis. Fortunately, RSW/US recently released a new study that answers both of these questions and is filled with more good news than you might expect.

The first piece of RSW/US’ research was conducted in March 2020 just as the pandemic was hitting the US. They went back into the field in mid-May to track how things had changed over the previous 45 days and as the US was beginning to re-open for business.

In this episode of Build a Better Agency, RSW/US’ Lee McKnight walks us through some of the key findings. He also shares how some of the responses have shifted over the two months in between the studies. There’s plenty of encouraging news in the data and there are also some danger signs. Listen so you can learn what the agencies and brands are thinking, feeling, and saying as the curve flattens out and business begins to pick up again.

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 Research

What You Will Learn in This Episode:

  • The findings from RSW/US’ research in both March and May of 2020
  • Why small to mid-sized agencies have a better shot at being “too small to fail”
  • Why most brands believe that their spending will be unchanged or increased as business gets going again
  • The surprisingly good news from RSW/US agency research project
  • What surprised Lee the most on the agency side of the data
  • How agencies can change their messaging to position themselves as leaders in the crisis
  • What we should be thinking about as we take a new approach to case studies
  • What agencies are doing right now to get conversations/meetings with prospects

The Golden Nuggets:

“Our industry has always been about risk. And while this is different from anything we’ve been through—this is what we do.” @LeeMcKnightJr Click To Tweet “Most of our respondents believe that spending will be unchanged or increased as business gets going again.” @LeeMcKnightJr Click To Tweet “Every day, I’m hearing from agencies that are either landing new projects with existing clients or winning new clients. There is activity out there and it’s happening.” @LeeMcKnightJr Click To Tweet “What’s happening right now should be proof to every agency that they’ve got to have a biz dev program in place.” @LeeMcKnightJr Click To Tweet “If your agency is 100 people or less, you have an advantage when it comes to growth. You are small and nimble enough to make your budget work.” @LeeMcKnightJr Click To Tweet

Ways to contact Lee McKnight:

Speaker 1:

Welcome to the Agency Management Institute Community, where you’ll learn how to grow and scale your business, attract and retain the best talent, make more money, and keep more of what you make. The Build A Better Agency Podcast presented by White Label IQ is packed with insights on how small to mid-sized agencies survive and thrive in today’s market.

Bringing his 25+ years of experience as both an agency owner and an agency consultant, please welcome your host, Drew McLellan.

Drew McLellan:

Hey, everybody. Drew McLellan here from Agency Management Institute. Welcome to another episode of Build a Better Agency. One of the topics that I have been chatting with agency owners a lot of lately, this is always in the top three topics, but lately, it has really been a hot and heavy. It’s a whole conversation around biz dev. So, I think you’re going to love our guest today and his insights around that.

Before I tell you about him and what we’re going to talk about today, I want to remind you of a couple of things. Number one, we have put together an assessment that you can take in about five minutes and it asks you a series of probably 30 questions or so around some key areas of operation inside your agency. After you complete the assessment, it will email you some thoughts about your results, and then you’re going to get a series of emails with recommendations.

So, basically, it’s going to say, “Boy, this is the area in your agency that maybe needs the most focus right now,” and then you’re going to get I think it’s three or four emails from me over a period of a few weeks with resources that will help you hone in on that specific area of growth for you. So, no selling, no pitching, nothing like that, just me trying to be helpful, but dripping the help on you because with every email, there’s going to be things you need to look at or read or review or listen to, and then think about how you want to implement them in your agency. So, I don’t want to overwhelm you with too much all at once. So, we’ve staggered it over a little bit of time.

So, to get to that assessment and to get that support after the assessment, head over to agencymanagementinstitute.com/assessment. Bet that’s not a big surprise to you that that’s how we did it, but that’s what it is, agencymanagementinstitute.com/assessment. Again, you’ll get a quick little report on what your answers told us and where you need to focus some attention in the near future, and then some support around doing that, okay?

As you might imagine, one of the topics in that assessment is your biz dev efforts, and that is absolutely the topic that we are going to cover today. so, many of you are familiar with Lee McKnight. Lee is the VP of sales at RSW/US, which is an outsource business development group that works solely with agencies. I’ve known Lee and Mark, the CEO, and RSW for quite a long time. They’re good, good people. They’re very committed to agencies and their success, and they’ve helped many agencies have greater success.

So, Lee and his team have been producing some amazing content as we have been navigating our way out of COVID. They always actually produce great content. If you don’t follow Lee on LinkedIn or you’re not connected with him or you don’t follow their LinkedIn page, you really should because the content is spot on. They’re all about the small to mid-sized agencies just like AMI is. So, we talk the same language to the same people, and I just find them to be really good, genuine people, but the reason why I asked Lee to be back on the show because this will be an encore episode for him is because they’ve been doing some research about how brands and agencies are fairing through COVID. They did their first piece of research in March, and they did the second one in mid May.

It’s interesting to see the comparison, but it’s also very interesting as in mid May we’re beginning to head back to the office, people are feeling like they can start to get back to work in a more concentrated way. It’s fascinating to see what both brands and agencies are thinking and saying and planning to do. So, I wanted Lee to come on the show and share all of that with us, and also there’s some other things that I want to ask him about in regards to agency and business. So, without any further ado, let’s welcome Lee to the podcast and dig in.

All right. Lee, welcome back to the podcast. Thanks for coming back.

Lee McKnight:

yeah. Thanks so much for having me again, Drew. Great to be back.

Drew McLellan:

So, the timeliness of this is twofold. Number one, we’re recording this on May 20th. So, we’re two months in here in the states in what is the COVID crisis. I’ve noticed in the last two weeks agencies are … There was the panic phase, and then there was the paralysis phase, and then there was the getting money from other government phase, right? Now, it feels like everybody is like, “Okay. I have to get actually back to work now. I need to hunker down.”

So, all of a sudden, I’m having agencies that I’m interacting with wanting to talk a lot more about biz dev than they have in the last four or six weeks. They are now very focused on if some of their clients hit the pause button or went away, they’ve got to replace that deficit, and even if they are one of the fortunate agencies, which about 20% or 25% of agencies I talk to are in the position that they are as busy or busier than they were pre-COVID, but nonetheless, everyone’s waiting for the boogeyman around the corner that we can identify. So, biz dev has become super important.

So, you guys did some research, and then you just in this last couple days released the followup piece of research. So, tell everybody a little bit about both of those pieces of research, and then I want to dig in to some of the findings that you just released earlier.

Lee McKnight:

Sure. Yeah. So, initially, I think it was about the last week of March. We released, surveyed, I should say, some agencies, marketers in one of the snapshot of where we are. I think it was open for maybe four days utmost, and we had a pretty good turnout even for that limited window.

What we wanted to do was, that was back in March, and let’s take a snapshot of where are we now. That was, I think, May 12th when we shot that down, so we just really set it a couple of days ago. So, we wanted to be able to ask some of the same questions around spend to marketers, to agencies around some new business and where they were, and be able to show folks, “Okay. We are moving,” as you mentioned, “into a new phase, if you will, where states gradually reopening, and now it’s always been the time.”

You talk about, and I get it, I mean, we talked with an agency yesterday. I did that and said, “We’ve been laser-focused on taking care of our clients,” some of them are opposing, all the things you just mentioned, and you’re exactly right, Drew. It’s, “We want to talk to you now. Can you help us? We got to get on this.”

So, we wanted to put this out as a snapshot to … It’s a path for agencies as much as we could understanding that the way things change. It’s the same as that March report. People that are still downloading I’m almost thinking, I was telling our President Mark that maybe we should take the first one down because I don’t know if any of it relates even though it wasn’t very long ago.

Drew McLellan:

Yeah, it’s crazy how quickly the landscape is changing.

Lee McKnight:

Yes. Yeah, it really is. So, that’s where we were. There were some interesting, some things that people may not be a surprise some that gave some hope and some that I hope will light a fire under some agencies to say exactly what you mentioned. If you haven’t been, you got to get going on the new business side or however you do it.

Drew McLellan:

Right. So, I think one of the data points that was repeated in a couple of different questions was this idea that from … So, interestingly, your survey talked to clients and client-side folks and also agency and agency-side folks. So, on the client-side folk, one of the things that as you said, probably gives folks hope, is this idea that for the majority of your respondents, they have no intention of not marketing in the back half of the year and, in fact, most of them think that the spending is going to be either unchanged or increased as business gets back going, right? Can you talk a little bit about that?

Lee McKnight:

Yeah. So, I mean, that was my favorite stat, but I mentioned we have this video series and the one we put out this week. I mentioned this stat. It was what I think a total of 68% of marketers expect the second half of 2020, marketing and advertising spending to remain unchanged or increased. Let’s all hope that’s true relative to where we are now. It is absolutely a snapshot. So, that’s the first thing I pointed out is let’s celebrate with caution when we read that stat because I’m sure you see, I know you do, everyday we’re reading something from MediaPost to Adweek to you name it, where they will refute those numbers and say, “No, it’s just the opposite, actually.”

So, I know we have to be careful and, certainly, what we are not going to be doing is pushing this out to say, “Whew! We’re back, baby,” but I think absolutely given that stat, it is a snapshot, it should, if nothing else, give agencies hope, and I don’t mean to be a Pollyanna when I say that, but I think at the end of the day, these are real marketers telling us that this is their intent and all we can do right now, and I’m not going to throw out the word uncertain, because it’s, oh, my gosh, it’s overused. I think we can get a tattoo of it by now.

Drew McLellan:

Right. Let’s avoid uncertain and challenging times. Those are the phrases that just make me great now.

Lee McKnight:

Oh, my gosh! I think if I also see the word grim one more time, I’m going to lose it. We get it. Yes, stark and grim. So, if nothing else there, I think that is important. The other just important piece of it is, and now this is going to be somewhat anecdotally, although we have hard numbers from our own company with our own agency clients, so we’re reaching out trying to get them new business. The first couple of weeks, of course, we saw some slow down, and hat we’re doing is going to get qualified meetings for our clients and trying to help them get closer to close. Sure.

The first couple of weeks, to your point, shock across the board. Thankfully since then, the numbers have stayed pretty solid comparatively to where we were this time last year, for example, and I know you’ve mentioned it on several of your videos and you talking to agencies. We’re seeing closes.

Drew McLellan:

Absolutely.

Lee McKnight:

So, it’s there. I think that’s what agencies with that stat should hold on to to say, “All right. You shouldn’t need it, but read that and realize that it’s going to happen.” I think what I love about one of the videos that you put out a little while back was our industry, it’s always been about risk. While this is different than what we’ve ever been through, this is what we do. I glommed on to that because I thought that was, yeah, you got to remind yourself of that.

Drew McLellan:

Yeah. I think one of the challenges as we are on this information hunt for what just I think everybody is looking for help me understand what’s happening and what’s going to happen next. I was on the phone the other day with somebody who does what I do, so runs a network for agencies, but their agencies are much larger than the agencies that I tend to work with. So, they have multiple hundred employees for the most part. He was saying that they’re really struggling, that the larger agencies are struggling.

So, I think when we read adage or any of the other industry pubs, we have to also remember that they typically are talking to and about agencies much larger than your audience or my audience. So, I actually think this is good news, and I think your data reflects that for agencies who are 100 people or less, who are going after that mid-range client, they are small enough and nimble enough to have budget to keep growing and spending, where I think some of the large clients that the large big box agencies serve, I think they are at a different struggle point than we are. I think it’s helpful in this circumstance to be a smaller fish in a smaller pond.

Lee McKnight:

I think that’s an excellent point because it was astounding to me. There’s been two or three very large agencies that I’ve had conversations with as of late that, quite frankly, we don’t normally because, to your point, we work our sweet spot as a small to mid-sized agency. It was astounding to me, again, to your point, where they were from a new business standpoint and how out to see they were.

You think, “What?” It’s like, “Why are you talking?” not that you shouldn’t be talking to us.

So, I do agree with you that that certainly speaks to folks that you and I deal with most often. I do think because they’re more nimble, one example yesterday was talking to a firm that wanted to come onboard and they were talking about a brand new client they just got. This is a good lesson to get new clients. If you have current clients, you got to stay on top of this because of the financial.

They couldn’t understand why this new campaign that they had, I think a Google Ads campaign, where they were driving folks to their mortgage calculator page. That was the headline. You get there, there was no mortgage calculator.

Drew McLellan:

Uh-oh.

Lee McKnight:

This agency is like, “Can you imagine?” Us coming on, they hired us and we pointed a few things out, that being the main one, and they did not know. So, it was little things like that, and this is that sweet spot. Anyway, not to get off topic there, but I just thought there are opportunities out there right now. This is about a 25-person firm I was talking to.

Drew McLellan:

I think part of the good news for small to mid-sized agencies is the kind of clients that we pursue are quicker to make decisions. You’re not going through agency search firm to get to Coca-Cola, to get on their shortlist, to get on their preferred vendor list, whatever. This is somebody who’s going to 50 or 100K or quarter of a million dollars to spend, and they’re talking to three people and they’re going to award it next week.

Every day, I’m hearing from the agencies that we serve that they’re either landing new projects with existing clients or they’re landing new clients. So, there is activity out there, and it’s happening, right?

Lee McKnight:

Yeah, yeah. You’re exactly right. They’re not going through procurement for the most cases. Yeah. That’s exactly right.

Drew McLellan:

Honestly, I think part of this is when someone is not being nagged along and urged along with a partner like you, agencies, as a general rule, suck and do business. We all do the feast and famine thing and all of that. So, part of why a lot of agencies are having success in their biz dev efforts right now is because they’re actually doing some.

Lee McKnight:

Well, good point.

Drew McLellan:

Yeah, right?

Lee McKnight:

Yeah. I think that’s exactly right. It’s interesting because I thought one of the things recently, and this is not new, but I think because the pressure is, I guess, more immense than it’s ever been, I have had several new business directors, whatever the title is, at agencies calling me and saying, “Leadership right now is going nuts. They have lost the concept of nurturing and they want it now.” I’ve had several agency owners say, “All right. This new business person, this is when we need it.”

I think now is certainly that time where those two need to come together and there is a middle ground that I think plans need to … It’s how to get there and talk about expectations right now and I think on both sides because … So, that’s been interesting. It’s always been there.

Drew McLellan:

Well, and the reality is the agencies in my world that are landing new clients and all of that, it’s not because they started biz dev on March 15th. These are seeds that they’ve planted a year and a half ago that they’re just finally coming to fruition. So, again, not that, I mean, I know this is a drum that you beat and that I beat everyday, but I think what’s happening right now should be proof to every agency that they’ve got to have a biz dev program, that something is happening every single stinking day, so that when you get to this moment, and God willing, we’re not going to have another pandemic in our lifetime, but you will have your biggest client walk out the door. You will have a key employee walk out and take two clients and two employees with them.

I mean, again, this is back to that we’re always at risk. This is what we do for living, right? So, you’ve got to have something that protects you and is constantly back filling and creating opportunity. I think that’s one of the things agencies are really, to your point, that you can’t just flip on the switch and prospects come walking in the door. This is because of the price point of the work we do and because of the risk on the client side. If they do this wrong, they hire the wrong agency, the agency doesn’t perform, that CMO loses their job.

We are absolutely a considered purchase, and there is no coupon or buy one get one free deal that we can offer to get somebody to open up their wallet faster than they’re ready to open it, right?

Lee McKnight:

Yeah. Absolutely. Although I will point out, too, just because some more than anecdotal evidence slightly, but one of the stats we pointed out in this companion report, we looked at and we asked marketers where have they been spending. It lines up with of all the closes that our clients have gotten in the last six weeks, I’d say roughly 60% have been where it was something maybe you got paused or to your point, we had been helping them drive better. They’ve been driving it for a time, but about that 40% were ones that actually did come fairly quickly.

So, those are out there, too. What we saw and where they’re spending probably, this probably doesn’t surprise no one, it was social media, 57%, digital advertising, email, and PR. That’s where those agencies now if you’re not, I mean, not like a dog after a bone, but if this is where you play, now is your time and, thankfully, not a blanket statement that every firm out there has, at least one of those, but most have integrated over these last decades. You can capitalize on the fact that now that digital piece is so important or partner with someone. I know that’s easy to say out of the gate, but I think that was interesting to me, and that is where we’ve seen, and I’m sure probably you as well, a lot of that activity right now.

Drew McLellan:

Yeah. It would be really interesting to ask those people who it was not something that had been in play for a while. So, the 40% that were just like, “Yes, I need it now,” it would be interesting to know how long they’d known the agency they hired. Was it like, “I need it today and I’m just going to look around for a store to go buy it,” or “I need it today and this agency has been courting me for a while, so they’ll be one of the three I’d talk to”?

Lee McKnight:

Well, you’re very right about that because part of our value to clients is getting in those doors, but I would say almost equally it is that ongoing awareness, to your point, driving it with value. I mean, I think one of the things that’s really interested me lately and I save all these emails is you would have thought that the really bad generic salesmanship would have lessened. It’s gotten worse, and I’m taking us a little bit off topic here, but I got one yesterday where he said, “We guarantee 20, no, dozens to hundreds of leads and they are red hot.”

Drew McLellan:

Wow.

Lee McKnight:

It’s like, “Wait a minute, man.” I go, “First of all, that’s a very odd disparity. So, it could be dozens or hundreds. So, we get to choose.”

Drew McLellan:

I would like the hundreds, please.

Lee McKnight:

I know. I’d have the hundreds and please qualify red hot because I like it. It’s like, “Come on, man. You can’t …” This wasn’t an agency, although I’ve seen a few lately that I’m like, “You’re pushing it, and you got to be careful here.”

So, yeah, that’s a really good point. I think I would say almost those 40% most of them I think one I know for a fact was newer, and they just hit the timing just right, but, yeah. It’s been the ongoing awareness that, yeah, which is important. It’s a good point you bring up.

Drew McLellan:

Yeah. Well, agency biz dev has always been about dollar cost averaging, right? We have no idea when they’re going to be ready to hire an agency, so we got to be present all the time, right? That’s our thing.

Lee McKnight:

Which makes it hard, but, yes.

Drew McLellan:

Yup, yup. So, on the agency side of the data for you, what surprised you the most on this companion piece?

Lee McKnight:

Well, what wasn’t good, and I think most of the report was positive for firms, and by the way, you can download that at our site, not trying to make it a commercial, but we’ve been talking about it.

Drew McLellan:

We’ll include the link at the show notes, for sure.

Lee McKnight:

Yeah, and that’s a free download. I mean, we want folks to be able to capitalize on it and plan on it if they can. The one I didn’t love was 67% of firms saying they are somewhat prepared or unprepared to find and when new business and states begin to reopen. That’s not a great stat. I was very surprised at the self-awareness because they usually flip it. Most agencies say, “Oh, we got it.” Usually, it’s the inverse. So, that’s good that they realize that, but, man, if-

Drew McLellan:

That’s a big number.

Lee McKnight:

Yeah. To be fair that we combine the stat, we’re somewhere and very unprepared. So, if you break it out, it’s not quite a stark, but that specifically is what I mentioned when I talked about that what I hope is a wake up call for agencies to start something. I mean, baby steps is key. All these agencies fail typically because they bite off more than they can chew right out of the gate, and think we have to do everything right now and have everything right.

Drew McLellan:

Right. We must paint the Mona Lisa by Friday.

Lee McKnight:

Yeah, exactly, exactly, right? So, that was surprising to me that it was that big a number, but I think then as a companion to that stat, you saw one