Agency Trends Report 2021 with Drew McLellan

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 McClellan.

Drew McClellan:           Hey everybody. This is Drew McClellan. Welcome to another episode of Build a Better Agency. Thank you for coming back if you are a regular. And if this is new to you, I hope this one in particular is helpful.

So at AMI of course, as many of you know, we have these live peer groups. So I get together and hang out with agency owners for two days, once in the spring and once in the fall. So every spring, I give a presentation where I look at the trends that I think are going to impact agencies for the next coming year. So what I always do in the summer after I’ve shared all of that with my folks, my inner circle if you will, I like to do a podcast on it to share it with all of you. And that is this podcast.

So before we get into the trends and what I think they mean for all of us, just a few reminders. As you no doubt know, because I’ve been talking about it for a while, the Build a Better Agency Summit, which is a conference that I have built especially for small to mid-sized agencies is finally going to happen. So I was scheduled for May of 2020, and then the world imploded. And we’ve moved it a couple of times, but now I know for sure we are going to gather in person August 11th and 12th. And we are going to spend two days learning how to build and scale our agencies, how to make more money, how to keep more of the money you make. We’re going to talk about everything from biz dev, to imposter syndrome, to growing a leadership team, to succession, to selling your agency. We got it covered. So I’m excited to do it, and I’m kind of excited. A little nervous. I will admit, but kind of excited because really, we’re that very first agency conference that’s going live after the pandemic.

So it’s in Chicago, August 11th and 12th. We are requiring all attendees to either demonstrate that they’ve been vaccinated or show us a negative COVID test. So we know everybody’s going to be healthy and ready to engage. So I’m super excited about it. We do have some tickets left if you are interested. Head over to agencymanagementinstitute.com. And right in the upper left corner of the nav bar, you will see the BABA Summit, BABA Summit. Click on that. You can read more about the speakers and register.

This is not just an owner’s only event. You certainly can bring leaders. I don’t think I would bring entry-level people, but anybody on your leadership team would be a good fit. And we’re going to be doing a lot of round tables and things like that. So if you bring more than one person, you can kind of divide and conquer, and cover more content. So that’s the Build a Better Agency Summit.

Couple other things I want to put on your calendar. Every year we teach a couple AE boot camps. We teach the advanced AE BootCamp. That’s for folks in account service who’ve been doing it for four years or more. People always ask me how senior is too senior. Honestly, we’ve had people with 20 or 25 years of experience attend and walk away feeling like they learned a ton of new things. So I don’t think you can be too experienced for this content, but I’d say you have to have at least four or five years of experience to get the most out of it. That event is also in Chicago, August 17th and 18th.

And then we have the AE BootCamp for folks in account service less than four years. So it might be a project manager, an account coordinator, a junior AEE, or an AE, but somebody who has not been doing it as long. That event is September 14th and 15th again in Chicago. And you can register for those on the website.

All right, let’s get into the trends topic. So I want to start out with money. Because of course, that’s what we all are interested in. So from a money perspective, most agencies, keep in mind that I see the full financials of a couple hundred agencies. And then of course I have anecdotal conversations with lots of other agency owners in the Build A Better Agency Facebook group, and other places through email and all of that. So I feel very confident in saying to you most agencies that I interact with at some level actually ended 2020 in the black, and that’s before PPP funds.

So that’s not them claiming the PPP funds as income. And in fact, many agencies reported that they had their best year ever. So I had a lot of agencies that actually had a breakthrough year in 2020, despite the fact that for pretty much everybody, the second quarter was horrifying and abysmal. A few agencies that was not the case. But for the most part, everybody took it on the chin in the second quarter. But a lot of you did a lot of smart things very early on, and you recovered pretty quickly. And you were able to get back up on your feet in the third and fourth quarter. And because the second quarter was so frightening, all of you sort of took off the governor and we’re all about biz dev in 2020, starting in mid March on. So that effort really paid off in the third and fourth quarter and is paying off in the first quarter of this year as well.

So one of the things I want to remind you about is you don’t need a pandemic pushing you on your rear end to keep the biz dev machine going. You have seen when you consistently pay attention to business development, how good that is for you. So I don’t want you to take your foot off the gas, just because you don’t have a pandemic against your back.

So another money trend that happened in 2021 is most agencies started 2021 with a lot more cash than usual. So many of you spend down your cash towards the end of the year. You might give out bonuses, you might buy stuff to avoid taxation, whatever it is. But you kind of limp into the new year with not a lot of cash in the bank. And, your clients are typically in what I call holiday hibernation for the first two or three weeks of January, which means you don’t have a lot of cashflow coming in. Yes, the work you did in December you start making money and you start getting paid. But there’s sort of this dearth of revenue. But in 2021, because of the PPP funds for those of you in the U.S., you actually started with a big bag of cash. So I saw a lot of agencies investing much more than they normally would in the first quarter in people, in infrastructure. Build outs of buildings, things like that. So you all started in a pretty good cash position for 2021.

Now on the client side of things, there were some interesting trends that we’re seeing too. So one of the things that happened I would say in the back half of 2020, and it’s really happening right now in 2021. And I expect it to happen for at least another year, is that smaller agencies are being invited to kind of punch above their weight. They’re getting shots at bigger brand clients than normally they would have been invited to participate in. And I think there’s a couple of reasons for that. One, I think you’ve done a good job of being very visible over the past year. Two, I think a lot of the big box, the holding company agencies are kind of a hot mess right now. They suffered much greater losses because so much of their revenue is from the media side of things. They suffered much greater losses in 2020. So they really had to shuttle a lot of their people. And many of them are the walking wounded right now.

So smaller agencies looking good, looking healthy, winning business, having some confidence and swagger. While the large holding company agencies look like they are still licking their wounds. So brands are saying, “Okay. You know what, maybe I don’t want to take the risk of working with a big agency. Maybe I want to be a big fish in a smaller pond.” So many of you, and this is happening whether you are working with national brands, regional brands, or local brands, everybody is getting a shot at a slightly larger client base than they normally would have gotten. So that’s great news for everybody.

Another thing from the client perspective is all of a sudden, location is absolutely irrelevant. So for those of you that are not in a major ad market, and you always felt like you had to justify explaining why you didn’t live in London, or New York, or Sydney, Toronto, wherever a major market is in your country. All of a sudden, that really doesn’t matter. We have learned to connect obviously digitally on Zoom and all of that. But also, I think we’ve proven that good work comes out of every different place. So clients are all of a sudden less concerned about your proximity. And we saw that in the last couple of years of research that Susan and I did as part of the agency edge research series, Susan Baier from Audience Audit. The last couple of years, what we’ve seen is that more and more clients are choosing agencies that are more than 200 miles away. Now this is pre-pandemic. And we asked them why. It was because the agency had a specialty or an area of expertise that the client was hungry to have. So they didn’t really care about location. So that combined with a year of everybody working from home has completely eroded the concern about where your agency is based. So that’s great news for those of you that are not in a major market.

Another thing that’s happening on the client front right now, and I expect that we will see this through the end of 2021, and maybe even longer, is more and more clients were bypassing the RFP process. Now, if they’re a state entity, or they’re a government entity, or they are a higher ed client, a lot of them are bound by their board or by law to issue RFPs every so many years. Those didn’t go away. I’m talking about the privately held or the publicly held brands that are not beholden to a rule or a law like that. So many of the clients who could opt out of doing an RFP did. And when we asked them why, there were a couple of reasons. Number one, RFPs take a long time. It takes a long time to get the RFI, and then read them all, and then narrow it down to the three people, and then schedule the presentations. That just is time-consuming. And right now, our clients are feeling very time pressed and really stressed about overcoming whatever deficits they experienced in 2020 if they couldn’t sell to their goals or their KPIs.

Another reason why is because clients feel like the chemistry checks, which is a lot of what RFPs are all about. After the RFI, the next phase is do I like them? Do I want to work with them? Do I like way they think? What they were finding is that those chemistry checks were really hard to do on Zoom. In a sort of group presentation way, that it was just hard to get a sense of people that way.

So what a lot of clients are doing is they are identifying two or three agencies that they think have the skills, specialty, knowledge base that they need to solve their problem. They’re doing a quick phone interview or a Zoom interview. They might ask them to do a little pro bono work or a project. Maybe they pay them a little. But they’re very quickly getting to awarding the work. So they are moving much quicker than normal in terms of selecting their agency.

One thing that I know that you are all seeing, this is a trend that is not going to be a surprise to any of you, is that clients are working with smaller budgets. Often frozen budgets and smaller staff. So as a result, they are squeezing as much as they can out of their budget. And they are expecting their agencies to help them hold down and justify costs.

I want to caution you that this does not mean you have to reduce your fees. What it does mean is that you need to demonstrate to your client that you’re being a good steward of their money, that you are sending projects out for multiple bids with third-party vendors, that you are holding vendors to their contracts, that you are negotiating favorable payment terms. Whatever it may be, that you’re helping your client manage their money, and that you are helping them get as much as they can out of it without minimizing or diminishing the value that you provide by lowering your prices. I want to remind you what happened for those of you that have been around for a while after The Great Recession.

So when The Great Recession hit, a lot of you to survive, I’m not being critical. It just is what it was. A lot of you reduced your fees. All of a sudden, you were really skinning down your margin. You might not even make margin, but at least you were making enough to make payroll and keep your people employed. So you really lowered your own value proposition in the eyes of clients. So all of a sudden, you were less expensive.

And then when the recession passed and you wanted to get back to your normal pricing, that was not easy to do. A lot of your clients were like, “I’ve been paying this for the last year or two years. I don’t want to pay that.” So be really, really careful that you do not fall into that same trap again right now that you hold your pricing integrity solid, but that you do other things to demonstrate that you are being a good steward of your client’s money, which I know you are as a general rule. But merchandise it better. So I’m guessing you’re not going to do anything any different. But what I’m suggesting is that you talk to your client about what you’re doing to help manage their hard costs or vendor costs with more detail and being more explicit. Okay?

Another thing from a client perspective is in the fourth quarter, so second quarter, awful. Third quarter back up on your feet, or at least on your knees. Growing, having some good business conversations. Many of you landed some good clients in the third quarter. And even early fourth quarter.

But right around mid October, all of a sudden, everybody put on their brakes client-wise in terms of awarding new work. And what they were saying was, “I just want to wait and see.” And what they were saying is, “I’m nervous about how the pandemic is playing out.” In the U.S., there was a lot of concern about the election in November of 2020 and how that was going to go. And regardless of who won, how that was going to play out. And then even after the election, I don’t think that anybody sort of felt like things were ‘normal,’ or that there was a calm in the sea until after the January 6th event or the inauguration. Everyone was just sort of waiting for something to get locked in. Whether they were happy about the election or not, they just didn’t want the uncertainty on top of the pandemic uncertainty. So for a lot of you, you got a lot of, “No, let’s wait and see. No, let’s wait and see.” In the last six weeks, eight weeks of the fourth quarter.

And then interestingly in January, all of a sudden, much more than normal, you were getting a lot of green lights. You were getting clients to say, “Yep, I’m ready to sign that master services agreement. Let’s go.” In fact, pre-pandemic if you remember for many of you, the first quarter of 2020 was killer. Many of you were projecting that you were going to have your best year ever. You came out of the gate so strong in 2020. And then of course, the pandemic hit in mid-March and all of that sort of petered away for a while.

This January and February, and even March, 2021 felt a lot like the January of 2020, only the boost that we got in 2021 was the vaccine starting to be available. And I think spring hit at least here in the U.S., spring hit in March, April, because people were starting to get vaccine. So literally, winter was going away. But also, I think the malaise of the pandemic was feeling like it was beginning to ease up as we got into spring. So for many of you, your first quarter has been very, very strong from a biz dev point of view, both with existing clients and with brand new clients.

One of the challenges that 2021 brings for all of us is that as I said before, clients are super stressed. They’re working with smaller staff, frozen budgets. And yet they have this pressure to deliver results as fast as possible. They’re getting a lot of pressure from internal audiences, from a board if they have one of those. So as a result of that, the way that trickles down to us is our planning time gets shortened. And our production timelines get shortened. And they are even more complicated because every time we think we have a good direction, the client’s changing it. So the client is responding to real-time marketplace changes, internal pressures, whatever it is. And right when you think you have something nailed and you’re ready to go to production on it or to release it into the wild, the client calls and goes, “Wait a second, we have to change this or that, or add this, or subtract that.” So agencies are feeling like everything is kind of a rush job with uncertain outcomes.

So if you are experiencing that, know that you are not alone. That that is very much what a lot of agencies are experiencing right now. Because clients are just feeling like they’re in a noose and they have to quickly, quickly, quickly move because they know their window of opportunity to be successful is short. And a CMO position has never been a great longterm position. But right now even more so, CMOs are under a lot of pressure, which rolls down to their agencies.

So depending on where you sit, this can be a good trend or a bad trend. Another thing that I’m observing, and actually I’d already talked about it last year. So again, this is a trend that’s been coming for about three years, but is getting more and more magnified right now.

Clients are absolutely doing more with less, and they’re feeling stressed. So they’re trying to simplify their life. And one of the things we’ve seen over the last couple of years, and we really saw it in 2020, was clients narrowing the number of their agencies.

Now I’m not seeing a lot of clients say, “We’re going to go with just one agency.” But they are saying, “Instead of five, let’s get down to three.” Or, “Instead of seven, let’s get down to two.” Whatever it is. So this is either awesome news for you because you are one of the winners in that narrowing, or this sucks for you because you’re one of the agencies that got narrowed out when they whittled down the number of agencies. But know that there will be fewer foxes in your henhouse, which is great. Doesn’t mean you still don’t have to play nice with the other agencies. It doesn’t mean that the agency that is the most collaborative and cooperative doesn’t still win, because I still think that’s true. I think clients don’t need the drama of agencies throwing other agencies under the bus. So whoever is the grownup, and recognizes, and actually values with the other agency in the hen house is delivering I think ends up being the winner. but the good news is fewer foxes to deal with. All right. I want to talk to you a little bit about some trends I’m seeing with you, the owners. But first, let’s take a quick break.

When it comes to conducting a client satisfaction survey, your agency has three choices. The first one is adopt a don’t ask don’t tell policy and just roll the dice. Your second option is to do the study in-house. And the third option is to use a third-party to conduct your client satisfaction survey. If you decide that you’re ready to invest in protecting your client relationships and improving your win and keep ratios, we believe there are some benefits of using AMI as your third-party research partner.

Number one, we know emphatically that your clients will tell us things that they just won’t tell you. The reality is they’re going to speak more freely if they’re not talking to you directly. They don’t want to hurt your feelings, and they don’t want to get into a big conversation about it. So a third-party is a safe place for them to share their real feedback.

The second is that at AMI, we don’t have a bias about any particular client. We don’t know if you like them, don’t like them, if they’re a pain, if they’re your favorite. So because we understand the agency business but we don’t come into those conversations with any preconceived notions, we can absolutely give you unbiased and unfiltered information based on what your clients tell us.

And you know what? We know agency clients. We can hear what they’re saying, and we know which threads to pull on as we’re talking to them, to get more information for you and more insight. Your clients will be comfortable talking to us because we speak their language. If you’re interested in having AMI do your customer satisfaction survey, head over to agencymanagementinstitute.com and look under the how we help section of the website to learn more. All right, let’s get back to the show.

Okay. Welcome back. If you just jumped in the middle of the show, which I can’t imagine how you would do that and find yourself right at the end of a break, but let’s just say you did. Just a reminder, I’m walking you through some of the trends that I see impacting you for 2021. And some of them are a reflection of what we’ve gone through in the past year and sort of the outcomes of that. And others are just some new things that I think are on the horizon.

So before the break, I told you that I wanted to talk next about some trends I’m seeing amongst the owners that we work with every day, or we interact with in the Facebook group, or by email, or however we are connected to you. This is a very common thing that I’m seeing. You people are wiped out. I mean, you are dead dog tired. And I talked earlier in the year I think it was January, February, I talked about this idea of adrenal fatigue. That right or wrong, accurate or not, all of you have been on high alert and in crisis mode for over a year now. When the pandemic hit, it was like you were being called to a five alarm fire, and you rushed to that fire. And you have been rushing to that fire ever since, without really giving yourself much of a break.

And what you have done literally and figuratively is, our adrenaline is what allows us, gives us the ability to rise to a challenging occasion. And we have literally emptied the bucket of adrenal fluid. We have nothing left in our tank. And I’m seeing this with all of you.

And here’s some of the ways I’m seeing it manifest itself. I’m seeing agency owners who prior to the pandemic had no interest in selling their agency thinking about hanging things up. I am seeing agency owners who normally could fire up their team, struggle to do that on yet another Zoom call if they’re not back in the office. I am seeing agency owners languish over their work. It’s harder to get the energy up to get it done. They know they have to do it, but it’s harder for them to rise to it.

I am seeing agency owners who are a little more quick tempered, or grumpy, or moody, or just having a hard time getting out of bed. And if you’re feeling any of those, I want you to know that you’re not alone. And I also want you to know that it’s not just mental, it’s physical. I mean, your bucket is empty. And you’ve got to refill that tank. And that’s going to take some time. And what it’s going to take is not being on alert for the five alarm fire. Recognizing that we are past the crisis part of the pandemic.

Do you have to rebuild? Maybe you do. Do you look different than you did a year and a half ago? Probably. But we are not in crisis mode. So you’ve got to find a way to turn off that crisis mode reaction and get back to a more thoughtful, planning, long range vision kind of a role, which is your role as the visionary of your agency.

So that might mean taking some time off. A lot of you have felt like you couldn’t leave the shop because everything was in flux. Well, you know what? Your team can survive without you for a couple of days. Unplugged, leave your phone at home. Don’t take your computer, don’t check, email, whatever it is. And whatever fuels you, if that’s long walks on the beach, great. That’s climbing up a mountain, great. That’s playing with your grandkids, awesome. If that is sitting on your deck and drinking a glass of wine, fantastic. If that’s getting your hands dirty in the garden, more power to you.

You know what’s restorative for you. And you’ve got to bake that back in. That was one of the things that a lot of you sacrificed during the pandemic was the things that refueled you because you were on high alert and you eliminated anything that wasn’t necessary and valuable to the cause.

And what I’m telling you is it’s time to dial it back. It is time to recognize that you’ve survived. It. You did it. You got the ship. We talked about this more than a year ago, about this idea of the pandemic was a storm. And our job was to guide our ship back to calm waters. Through the storm and back to calm waters.

Now, the waters that you’re in may not be as fruitful with fish. It may not be as plentiful. But the waters are much calmer. You are there. You did it. So you need to sort of give yourself a break and some room to breathe, okay? Because for many of you, it’s starting to impact your team. They’re feeling it. They’re feeling your malaise, and it’s infectious. So you’ve got to cut it off.

And by the way, this is very much like coming out of a grieving process. For a lot of us, 2020 did not play out the way we wanted it to. It didn’t sort of live up to our dreams. Whether that was around the business, or family, or whatever it is. and we’re grieving the loss of whatever we lost during the pandemic.

So I just am going to remind you that when you are in a grief state, I think many of us still are a little in that state. Now is not the time to make huge decisions like fricking selling your agency.

So if you were already on that path before the pandemic, then you probably had already made a very clear, rational decision about that. But if this is pandemic related or triggered, I’m going to ask you to please slow down. Please give yourself some time to rejuvenate before you go down that path and then regret it. Okay?

So whatever big decision. I’m talking sell the building, buy a building, go virtual forever. Be careful of the word forever right now. Everything should be an experiment. A temporary 90 day, 120 day experiment. Okay?

All right. So another thing that is happening for you guys is this is actually a happy accident. So when the pandemic hit for many agencies, the things that their clients normally bought were no longer viable. Media, events stuff, things like that. So agencies went into this panic, and they started creating new products and services that would allow them to pivot with their client to help their client get through the pandemic. So you created a lot of new services and products in the last year that were pandemic inspired.

But a lot of those things that you created are still viable today as we’re coming out of the pandemic. So that panicked pivot really has now evolved into a very purposeful reinvention. And it has evolved into something that you can now merchandise and leverage going into 2021, ’22. Nothing to do with the pandemic. It’s just a new thing that you can do for clients that you have proven now is useful, valuable, and effective. So I think that’s an awesome thing that a lot of you have a different better offering than you used to before.

So I love working with agency owners and agency leaders. Love it, love it, love it. I love it. They’re my people. They’re me of course, because I’m one of them. But when I stand back and I observe agency owners and leaders, one of the things that is true about all of you as you are the most optimistic pessimists I have ever met in my life. This has nothing to do with the pandemic. You have always been this way. But the pandemic in 2020 accentuated that.

So when I say to an agency owner, “Hey, how’s 2021 going?” Here’s what I hear all the time. “It’s awesome. Team is better than ever. We’ve got some great new clients. Pipeline is full. But,” and then there’s this dot dot dot. So you’re super optimistic, but with an asterisks. And what’s interesting is there’s nothing that really comes after the dot dot dot. It’s just, “I’m feeling really good about the year. I’m feeling really good about what we did and survived. I feel like we’re as good if not better than ever before.” And when I say, “But what?” They’re like, “Well, I’m just waiting for the other shoe to drop.” “What do you think that other shoe might be?” “Well, I don’t know, but,” and then but dot dot dot again.

So if you are hearing yourself say that or hearing yourself in your head say that, know that you are not alone. That all of you are but dot dot dotting through the year. And part of that is because I think after the pandemic, everybody was cooking with gas in 2020, and we literally had the rug pulled out from under us. And we ended up on our rear ends.

So we’re stinging from that surprise. We’re stinging from the uncertainty of 2020. So even though everything looks lined up and looks good, we’re a little concerned that somebody is going to pull that rug out from under us again.

And you know what? That’s probably fine. Because it’s not that you’re not optimistic. It’s just you’re optimistic with a caveat. So again, if you are feeling that way, know that you are in good company with all your other agency brother and sisters.

So another thing that I think is important is from an agency owner perspective, right now, there is a wide range of reactions around the idea of working from home, going back to the office. Many of you are back in the office. Many of you are back in the office five days a week. This is very true in the U.S. I think it’s interestingly not as true in other parts of the world. But here in the U.S., a vast majority of agencies are back in the office. Many of them are back five days a week. If they’re not back five days a week, then what they are typically, and I’ve talked to you about this before in other solo casts. So I’m not going to spend a lot of time on it, but they might be back four days a week and one work from home day, or they’re in the office three days a week, and two work from home days. But they’ve coordinated it so that everybody is in the office on the same days. And everybody is working from home on the same days. So that when we are in the office, we are all in the office and can have those meetings and that collaboration time that we have been so hungry for, for the last year.

But I think it’s interesting that many agency owners are on this spectrum. And honestly, the agencies that are back in the office are back in the office because the owner wanted to go back. So I’m not talking about that you couldn’t go back because you weren’t allowed to go back yet by law. I’m talking about once you could go back, if you went back, it’s because you felt it was important to be back in the office. And you did not survey the team and then let everybody tell you what they wanted, and then be sort of wishy-washy about going back. If you’re back in the office, it’s because the agency owner said, “As of this date, we are all going back into the office. And here’s what that’s going to look like.” And if you’re not back in the office, I believe that in many cases, it’s because you aren’t ready to go back to the office.

So I want you to reflect on that and recognize that while it’s fine for you as the agency owner to give into your own personal feelings, I do want you to stop and ask yourself if this is what is best for the agency. And if it’s not, what are you going to do about it? So anyway, wide range of emotions, but most agencies are back in the office, at least here in the states.

All right. So let’s talk about some trends around your employees. So in 2020, your employees loved you. I mean, when the pandemic hit and you kept their job, and you kept them with health insurance. Even if you did a pay cut, or a salary freeze, or whatever you did, maybe you even furloughed them and then brought them back. They were so grateful for you that you took care of them, and you got love notes. You got Slack attaboys, you got verbal thank yous on Zoom. Some of you got handwritten notes of gratitude. And that was lovely. Because let’s face it. Being an agency owner is sort of being an unsung hero. You don’t a lot of pats on the back from your team as a general rule. But in the second and third quarter of 2021, they were pouring them on you. And it felt good if we want to be honest with ourselves. It felt pretty good.

And then around November, all of a sudden it occurred to your employees that for the most part, the crisis was over, and that your agency was still standing on its feet, and that they too had made sacrifices to help you survive the pandemic. And it was time for them to get their reward.

So I have no idea why the timing of November, December. But for many of you, I got a lot of texts from agency owners in November and December, which basically was like what in the world changed? What switch got flipped? All of a sudden, there’s this line outside of my office, literal or figurative, with everybody asking for bonuses, and raises, and special dispensations. And, “By the way, I want to move to Montana but still work for you.” And all of a sudden, the gratitude was gone. And we were sort of back to, “Hey, I want my due.” So know that you are not alone if you experience that and are still experiencing it. In fact, many agencies are having a great year as I said. And they are scrambling to try and hire, and are struggling to find good people. So not only are your current employees looking for a little more. But the prospective employees are looking for more as well, maybe more than you want to pay or more concessions than you want to give.

Another trend that I think you can end it in 2021 if you want to, but it’s going to require clarity of language and decision. But I believe this is a trend that is short term, unless we allow it to carry on. But in many cases, what was a temporary shift, working from home, living in another state and working for the agency, working weird hours, taking a mental health day without very much notice. Lots of temporary shifts that we made to help our employees survive COVID and working during COVID with their kids in school and all of that, all of those temporary shifts, which in our mind as owners and leaders was very temporary. This is a moment in time, and we’re going to allow these special things to happen. But from the employee’s perspective, they’ve now become an entitlement.

So you need to be very, very, very, let me add one more, very clear about the rules of the game now that we are coming out of the pandemic. And I think language like, “In 2020 and during the pandemic, we allowed this to help everyone cope with the challenges of working from home, and juggling their family, and work, and clients, and all of that. However, as of this date, new rule.” Whatever that new rule is. So, “As of this date, we’re back in the office.” Or, “As of the date, we’re all available from this time to this time.” Or, “As of this date, you have to ask for time off at least a week in advance.”

Whatever the entitlement, whatever people are taking advantage of now, whatever is starting to build a little bit of resentment in your head and heart, you need to make it very clear that that was a special situation, one that we all hope we never have to live through again. But here is the new post-pandemic rule. Doesn’t always mean you’re going back to the pre-pandemic rule. So many agencies are changing their work from home policy, or are they are doing a four day at the office, one day at home, which they would have never done prior to the pandemic.

So there’s three moments in time. There’s pre-pandemic, there’s during the pandemic, and now there’s post-pandemic. And you need to be very precise in your language around what post-pandemic life looks like in your agency. And do not feel bad, and do not feel guilty if it’s not exactly what everyone wants. First of all, everyone wants something different. So just know off the bat you’re going to disappoint somebody. And you just have to live with it. That’s part of your job. Part of your job is doing what’s right for the business. Certainly doing it with kindness, and respect, and taking into consideration all of the people and their concerns. But at the end of the day, your job is to protect and guard the agency. So you do what’s right for the agency, and people will fall into place. And they will fall into place either by embracing the new rule, or they will fall into place by deciding that it’s not the place for them to work anymore. And they’ll move on. Do not let a rockstar employee hold you hostage. Because if you do it for one, you have to do it for everyone.

So just whatever entitlements that you are seeing your employees assume are permanent, you need to make it clear what is and isn’t permanent. And I’m not suggesting that you can’t or shouldn’t make some of them permanent. If they work for you and you feel good about it, I don’t know what it would be. But let’s say you decided you were going to close at noon on Fridays during the pandemic so people had a little longer of a weekend and to recuperate. If that worked for you and you want to try it while you’re back in the office, more power to you. But again, don’t use the words ever or never.

So what I would say is, “Hey, we’re going to experiment. Now that we’re back in the office, we’re going to experiment with this close at noon on Fridays for the next 90 days. And we’re going to see if clients have a concern about it, or we don’t get our work done, or we miss deadlines. And as long as none of those things happen, maybe we’ll continue it. But this is the experiment for the next 90 days.” So anyway, you need to define which of those entitlements are actually going to stay and which ones are not.

Another trend that I’m seeing amongst your employee base is that I think a lot of what happened in 2020 was not just the pandemic. But we had a lot of social issues rush and rise to the surface. It was Black Lives Matter or whatever it may be. The violence against Asian Americans. There’s a lot of crappy stuff that’s happening in our world today.

And our employees are expecting us as an agency inclusiveness, diversity in the workplace. All of those things, they’re expecting us to address these issues in a meaningful way. For the agency to take a stand and to have a policy or be working towards contributing to the societal challenges in a way. So even if they’re not expressing it to you, they are watching you. And it matters to them that they work someplace that aligns with their core values.

So whether you choose a less politicized charitable issue like homelessness, or underprivileged kids not having school supplies, or you take on diversity or whatever it may be, they are expecting you to have an opinion and for the agency to take a stand.

And a lot of agencies are doing some really interesting things around diversity, and inclusion, and trying to create a really safe workplace for people of all races, creeds, religions, sexual preferences, all of those things. So my guess is again, this is sort of like what I was talking about with the client budget. My guess is you do have an opinion about this. And you are doing some things about it, but maybe you’re not merchandising it through the agency the way you want to, or the way you should anyway. And I’m asking you to put more of a spotlight on it because your employees are wondering where you stand.

All right. So now, let’s talk a little bit about some of this as sort of the last segment of these trends. I know this has been a long solo cast, so I appreciate your sticking with me this long, if you’re still with me. And if you’ve already left, then to you.

Okay, last section of the tactics, of the trends rather is tactics. What are agencies selling and making great money selling to clients? So last year’s trends if you remember it from last summer’s solo cast, I talked about this idea of clients recognizing, beginning to recognize they wanted to have a tighter relationship with their existing customers. So they were starting to ask their agency partners to help them build out private community. So whether it’s a private Facebook group or it’s on a proprietary piece of software, this idea of exclusivity and bringing your customers together so they can talk to each other about how they use your products or services, or the topic that sort of surrounds what you do. This has been a great profit center. It’s high in AGI. It’s great client satisfaction. It allows their best customers to talk to each other, and in essence, sell them more stuff. So there’s nothing about this that’s not awesome for agencies and clients. So I think you’re going to see more and more of that.

Another thing, the whole idea of societal issues is not just an internal issue. Our clients need our help to navigate the social and political landmines and positions that are out there. Study, after study, after study, the Edelman Trust Barometer pops into my head, but many, many studies tell us over and over again that consumers expect brands to have an activist mindset. They want to align with a brand who shares their values and beliefs. And our clients are lousy at this. They don’t know how to do it. They don’t know how to do it genuinely. They don’t know how to do it with depth. They don’t know how to do it in a way that connects to the products and services they sell. They don’t know how to be a world citizen but staying in the lane of who they are and what they’re all about. So they need our help. And again, this is high consulting level work. This is going to get you into the C-suite conversations. And it’s great AGI. So keep thinking about that. Another thing that a lot of agencies sold during 2020, and I am seeing a ton of it in 2021, is high impact mail.

So there was some early discussion early on in 2020 after the pandemic hit that all B2B direct mail was going to stop because no one was in the office. Well let’s be honest, everybody still needed to get their mail from work. So they figured out how to do that. So whether it was B2B or B2C, high impact mail was really effective last year. And a lot of my agencies are just selling the snot out of this in 2021 and have big plans for it moving forward through the end of the year and into 2022.

What I mean high impact mail is it’s sort of an analog digital combination. So it is often mailing someone something to drive them to a landing page to interact with them, and then following them with some retargeting. But it’s a much more holistic look at direct mail. And oftentimes, it’s what I would call lumpy mail or three-dimensional mail. But some really, really cool stuff, and very profitable stuff for agencies.

Another thing that agencies of course rose to very quickly in 2020 was this whole idea of virtual events. One thing that we are seeing, and I think it’s a trend that’s going to continue, it’s two-fold. One, people are really virtual event fatigued. They are tired of sitting in front of their computer. They’re tired of being in long Zoom sessions. I talked to a lot of people who had virtual events in the second and third quarter that thought they went really well. And I talked to a lot of people who had virtual events in the fourth quarter or late in the third quarter. And by then already, people were sort of fatiguing. So the speakers didn’t enjoy it because they didn’t get to interact with the audience. The sponsors hated it because they didn’t really feel like they got the same value out of it. And I heard a lot of disgruntled sponsors talking about that they are not going to sponsor virtual events anymore.

And honestly, the attendees didn’t get as much out of it. Because while they might’ve had it on the screen, they also had something on the other screen, and on this screen, and they were multitasking. And they weren’t engaging as much, and they were popping in and out. And they were scheduling meetings in the middle of an event, which they wouldn’t have done if they were there in person. So that’s number one. I just think people are worn and weary of virtual events.

And on top of that, people are hungry to be back together. Now they may not be ready to get back together today, but they are hungry for that when they are ready, they are hungry for it. So I think we have to be very careful about how we sell virtual events.

I think for a while, a year or two, I think for a while, we’re going to see a lot of combos where it is a live event, but there’s also a virtual component. In some ways, not unlike before the pandemic. There’s the live event, but you can buy a package of the presentations or something like that. So I don’t think virtual events are going away, but I think they’re going to be an augmentation to a live event as opposed to the main attraction.

Another thing that a lot of agencies sold into clients well in 2020, and this should not be a surprise to you given that we were all sitting around at home, are Shoppable posts and live streaming events. I think both of those are going to continue to grow in 2021 and 2022. So if this is not something your agency is offering to your clients, you may not have clients that are retail enough in nature to do the Shoppable posts. But certainly live streaming is something that all of us can be doing for our clients and has been super well received. Different than virtual, because it feels more intimate.

Another thing that clients are asking for and that agencies are selling a lot into for clients is loyalty programs and anything that’s tied to client retention. So part of what happened in the pandemic is everyone’s sales went down the tubes. Clients became very aware of how important it was that they hang onto and create a stronger connection with their existing client base. So they have been asking agencies to come up with all kinds of ways for them to connect and strengthen the relationship. It might be a loyalty card or program. It might be a points thing, or special gifts to their best customers, or special pricing. Whatever it may be, it’s reward programs. Again, it’s the private communities. But anything to set the hook if you will tighter with those existing clients has been a very good thing.

And then last but certainly not least, agencies are still building programs that help their clients attract ratings and reviews. So in many cases, it’s about soliciting the ratings and reviews. In some cases, it’s about monitoring and responding to ratings and reviews. But this is my recurring theme. A lot of the things that are being sold right now are high AGI items, which is awesome for you and everybody. Because more of the money that you make, you get to keep. So that’s a beautiful thing. But these rating and review programs.

Normally, they’re packaged up in some way. And it’s a great retainer. Even if you have a client that is a project by project client, a rating and review program is a to get some retainer money out of them and get some consistent activity so that you can have consistent conversations with them. So many agencies are selling that.

So that wraps it up. That was a lot of trends. I apologize that this was a little lengthy. But I’m hoping that it was so valuable that you were okay and maybe even a little happy to spend that much time with me. So thank you for doing that. A couple of quick things before I let you go. As always, a huge shout out and thank you to our friends at White Label. As they are a white label PPC design and dev shop that serves many, many agencies. And helps agencies either add extra hands. Or in some cases, they are the dev department or the PPC department for a smaller agency that doesn’t want to hire that in-house. So head over to whitelabeliq.com/ami to learn more about them.

And I will be back next week. Next week, I promise I’ll have a guest who’s going to get us thinking differently about our work, and our leadership, and our agency. But always focused on helping you scale and grow, make more money, keep more of the money you make. I promise, we are always going to stay focused on those things. I am super grateful for you. And as we approach the summit, and as we approach live workshops, and as we approach the 300th episode of this podcast, I am very conscious of how awesome it is that you’re a part of this community and that you allow me into your world, and you allow me to try and be as helpful as I can be. So thanks for listening today. Thanks for always listening, and for being around, and being a part of the AMI family. I’m grateful for you, and I’ll be back next week. I promise. All right. Talk to you soon.

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