Episode 451

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If you want to future-proof your agency’s success and stability, now is the time to become a fractional CMO.

For those unfamiliar with the term, fractional CMOs are hired for their strategy first and execution second. It’s a client-agency relationship built on trust that you know their industry deeply and can execute your strategy to provide a high ROI to your client.

The pandemic paved the way for having this hyperfocus on one specialization and highlighted the need for agencies to be trusted thought leaders in their niches. This week’s guest, John Jantsch, is teaching us how to become fractional CMOs and what it takes to build that deeper trust with clients.

Join us to learn the data behind John’s ideas and how to position your agency as a fractional CMO.

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.

What You Will Learn in This Episode:

  • How the pandemic shifted the need for strategy and consulting
  • Shifting to strategy over execution can help find right-fit clients
  • Fractional CMOs are up 60% as an add-on service
  • Clients want their agencies to have deep knowledge of their industry
  • The two distinct types of fractional CMO — and which one you should be
  • Showing up as part of your clients’ team to build trust
  • Building trust through strategic partnerships, referrals, and thought leadership
  • The growing emphasis on first-party data for agencies

“A lot of people realized they need to buy strategy, whatever that looks like. The demand for it has actually increased dramatically.” - John Jantsch Share on X
“One of the greatest sources of stress for business owners is they can’t keep up. They don't know who to trust or which way to go.” - John Jantsch Share on X
“Leading with strategy is a great differentiator. It attracts the right kind of client who realizes this is an investment and a long-term game.” - John Jantsch Share on X
“You can have people inside of your agency who are delivering strategy rather than just the owner.” - John Jantsch Share on X
“Trust is ingredient number one, and some of the ways you build trust is through strategic partnerships, referrals, and content that educates.” - John Jantsch Share on X

Ways to contact John:

Hey, everybody. Drew here. You know, we are always looking for more ways to be helpful and meet you wherever you’re at to help you grow your agency. It’s one of the reasons why we’ve produced this podcast for so long, and I’m super grateful that you listen as often as you do. However, there are some topics that are better suited for quick hyper-focused answers in under 10 minutes. That’s where our YouTube channel really comes in. For quick doses of inspiration, best practices, tips and tricks, head over to youtube.com/the at sign Agency Management institute. Again, that’s youtube.com/the at sign or symbol.

And then Agency Management Institute, all one word. Subscribe and search the existing video database for all sorts of actionable topics that you can implement in your shop today. Alright, let’s get to the show.

It doesn’t matter what kind of agency you run, traditional digital media buying, web dev, PRR brand, whatever your focus, you still need to run a profitable business. The Build, a Better, Agency Podcast, presented by a White Label IQ, will expose you to the best practices that drive growth, client and employee retention and profitability, bringing his 25 plus years of experience as both an agency owner and agency consultant. Please welcome your host, Drew McLellan.

Hey everybody. Drew McLellan here. And guess what? Another episode of Build a Better Agency. Super glad you’re back. We have a really interesting topic to talk about today. But before we get into that, I just wanna say thank you for coming back, or if this is your very first episode of the Build a Better. Agency. Podcast. Good news is we have 400 and some that we’ve already done that you can go back to almost all of them, maybe a few during covid, but almost all of them are quite evergreen, and hopefully you’ll find them super useful. I still refer people to episode 10 or episode five or 15 or 27 or whatever it is all the time. So don’t feel like you can’t go back and start from the beginning if you are so inclined.

If you’re trying to figure out maybe how to navigate going back if you didn’t, if you haven’t been with us for the whole eight years or however long we’ve been doing this. One thing to know about our podcast is every fifth episode. So starting with episode number 5, 5, 10, 15, et cetera, those are what we call solo casts. So those are me teaching something. The other episodes are all like this episode, me and a guest talking about a topic, both very education focused, but one is more conversational and we’re learning from a subject matter expert. And the second one, the solo cast, are really about me teaching you how to do something or talking about something that you should stop doing or a best practice.

So for some people, one of the ways that they go back and consume old podcasts is they go back and listen to the solo cast first, so 5, 10, 15, et cetera. And then they go back and they look at each of the interview episodes and the topic covered by that subject matter expert and then decide if that’s appropriate for their agency or not. So if that’s helpful, go ahead and do it that way. If not, feel free to bounce around randomly or do it in alphabetical order or numerical order, or whatever serves your purpose. We are happy that they’re all there for you and they’re a tool and grateful that they still are as useful today as when we recorded them for the most part. Like I said, a couple of the Covid season episodes are pretty specific to covid, like about the PPP loans and things like that, but for the most part, I’m proud to say the episodes hold up well over the years.

So feel free to go back into the archives and, and learn from those. Alright, so our guest today, we’re gonna talk about this, this idea of a, how agencies are bringing more and more strategy into the equation. And I’m relieved to say that some of you’re actually smart enough and starting to get paid for that strategy. The same strategy used to give away in proposals or to get the work, meaning the the making of the stuff. But as our world has changed and as it’s more and more difficult to be competitive on the making of the stuff, you’ve realized that one of the things that makes you very unique and valuable to your clients is that you understand their business, you understand marketing, and you can bring great marketing strategy to them.

You can bring them all kinds of ways for them to think about their existing customers, their products and services, pricing, packaging, distribution, finding new prospects and wooing them in to get that first trial or purchase that that’s your gift. And so many of you are leaning more heavily into the consulting side or the strategy side of the business. So my guest today is John Jansen. John owns a company called Duct Tape Marketing Marketing, and he’ll tell you a little bit about how that all started when we invite him into the show. But he’s doing a lot more work teaching solo consultants and smaller agencies how to build a strategy or consulting offering into the business, or how to position yourself as a fractional CMO.

And he’s done, he just did some research that I thought was really interesting about how people who sell CM Fractional CMO services view their work, and also how the people who buy fractional CMO services view the work and the relationship. So, without further ado, let’s welcome John to the show and talk a little bit about how all of you can make more revenue and EGI into your agency by thinking more about how you sell strategy and marketing expertise into the package. Alright, let’s do it. John. Welcome to the podcast or welcome back. Well,

Yeah, thanks for having me. It’s good to see you again.

You too. So, just for the three people who listen, who don’t already know who you are, just give everybody a little bit of background on, on the work you do and how you work with agencies and strategic consultants.

You bet. Yeah. So I started my own agency about 30 years ago. No, no plan. I could hustle work, right? Anybody heard that before? Yep. And kind of found that like a lot of people, I grew to a certain extent, but I was working harder and making less, you know, the more I grew. And so I, you know, decided that, you know, I I, that was a frustrating way to grow a business. So I was gonna try a new approach. And so one day I just walked into a prospect and said, look, here’s what I’m gonna do. Here’s what you’re gonna do. Here are the results we hope to get. Here’s what it costs, and we’re gonna start with strategy before tactics and install a marketing system. You want it or not? And you know, to my delight, you know, the first three people I think I said that to, I said yes. And so I, you know, took what at the time was I think a pretty innovative approach to mostly working with small to mid-size businesses.

I decided to productize that. And so I had to give it a brand name, and that was the genesis, frankly, of Duct Tape marketing. And that was actually kind of my productized approach. It seemed to resonate really with the, the folks that I was calling on. And so it became the name of my blog and my podcast and my business and my first book All Now Bear that name. And about 15 years into that, I, I started attracting agencies that were saying, Hey, I love what you’re doing, you know, teach us how to do it. And so I started licensing our approach, like I said, about 15 years ago. Today, we’ve run well over 400 people through our program and have a pretty robust community of, of what are now, you know, agencies, consultants, fractional CMOs that, that collaborate, you know, kind of around this idea of marketing as a system.

Yeah. And and your marketing as a system was always strategy first. I mean, you, you’ve always, you’ve always leaned into that. So as you look at, you know, 20, 24 and beyond, where, where do you think we’re at in terms of that? Is it, has it changed? You know, you can buy a tactic online Yeah. For $5. So where do you see the demand or need or shift around strategy from the client’s perspective? Well, I

Think, yeah, I think from the agency’s perspective, it’s, it’s amazingly still a huge differentiator to walk in. I mean, from, from our standpoint, if somebody says, I wanna work with you, great. You’re gonna go through something we call strategy first. That’s the only thing you can buy. You know, until we go through that, you know, then we’ll develop the plan, which I know a lot of people do that, but they do it kind of like as they’re doing the tactics, you know, in a lot of cases. Right? Right. And so for us, it’s a very formalized approach in terms of how it’s changed from the buyer’s perspective. I, I really think one of the benefits, if we can call it that yet, we’re far enough away from the pandemic, maybe we can call it a benefit Yeah. Is that I think a lot of people got caught without a strategy, without, you know, the, the market was good and they rode the wave, and then all of a sudden they looked around and, and people who had gotten close to their customers didn’t understand, you know, the value that they brought, you know, generally thrived, you know, through this.

And so I think a lot of people realized, we gotta go buy some strategy, you know, whatever that looks like. And so I think the demand for it’s actually increased dramatically.

Yeah. When you think about, you know, back when you started your agency 30 years ago, strategy and channels and tactics were finite. And today they’re, they, they are not. I mean, every time they’re, every day there’s a new tactics strategy channel being added into the mix. And I think for a lot of small business owners, that’s, it’s too much. They, they can’t, they can’t possibly keep up.

Well, there’s, there’s no question. I think that’s probably the, one of the greatest sources of stress, you know, for a lot of business owners is that not only they can not keep up, they just don’t know who to trust, which way to go. I mean, you know, they keep hearing that they need to be on, you know, everything. And, and so it’s, I I think one of the, I always kind of kiddingly, but not really. I tell a lot of business owners that one of my jobs is to tell you what not to do. For sure. You know, as, as you know, as a benefit.

Yeah, no doubt about it. So you recently did a survey. I did some research around this idea of fractional CMOs, and you and I were talking before we hit the record button, that for many agencies, they’re starting to position themselves in kind of an agency in a box, which is, look, you don’t need to have a marketing department. Yeah. We can, including at the c-suite, be your marketing partner. So talk a little bit about how you are seeing that develop in this current sort of environment.

Well, I, I think there’s no question tag, there’s a lot of pressure on, on pricing tactics, right. You know, because we can debate whether or not a hundred dollars website is a good website, but there’s somebody that can buy it That’s right. Today. So, so leading with your $10,000 website is a pretty tough sell today. In, in some cases. However, leading with strategy, to me is a great differentiator. It probably attracts, in my mind, the right kind of client, a client that realizes this is an investment, this is a long term game. And, and so, you know, I think that that aspect is, you know, is, is a reason to do it as well. But what we found is, is by starting there, we also develop such a high level of trust, such a great relationship with the client that oddly enough we could turn around now and sell that $10,000 website because we’re no longer, you know, in a price competition, we’re in a, deliver the value that I know you can deliver conversation.

And so it really, it works on so many levels for us in terms of kinda getting yourself out of the fray of, of tactics only.

Well, and I think too, I think, and more and more agencies are recognizing that as the, as the making of the stuff gets commoditized. Yeah. The one thing that somebody from Fiverr, or, you know, somebody with a year of experience who pops up a website or AI can’t do, is think strategically about the unique qualifications and situations that any business finds themselves in and apply 10, 20, 30 years of marketing experience to actually crafting a strategy that makes sense based on that business’s very specific needs, wants, limitations, goals, dollars, fill in the blank.

And so I think a lot of agencies have recognized that even, even if you are built as a tactical shop, so you know, you’re a specialty agency in PPC or SEO or a web dev shop or whatever, that the way to avoid being commoditized is to even inside that deliverable expertise, to go at it strategically and to really be your client’s thinking partner and advisor. And I think that’s been a shift over time since you and I certainly have been in the business long enough to, to remember that, you know, the Mad Men days where we just made pretty things. Right?

Yeah, yeah. Writing a a, a Yellow Pages headline was pretty much make it or break it for the year.

Right. So what prompted you to decide to do the research that you did? Well,

You know, there are many, many agency surveys, there’s many many CMO surveys out there. It is a, you know, quite frankly, it is probably a dual purpose I wanted to learn. We also surveyed buyers of fractional CMO services. And so I wanted to understand better from their point of view what they thought the benefit was, why they did it, you know, what they experienced. But then also to be able to have a roadmap. You know, we, we recruit and train folks to go through our certification program, so I wanted to have a roadmap for them to say, Hey, here’s, here’s who you should be, you know, if you’re going this way, here’s, you know, what’s out there in the market that you’re gonna have to be as good at, or you know, better than.

So we wanted to have as much, I don’t know if we’d call it scientific at this point, but as much kind of hands-on data from people telling us in their words what they thought about the industry. And its growth. I mean, there’s no question. It’s, it’s on the upswing, you know, chief Outsiders, which is a, a another group that does a lot of work around fractionals, you know, did a survey recently and, and just of the entire market and, and just the frac over the last five years, the, the idea of fractional CMO is up 60% Yeah. Of people that are either hanging their shingle out to call themselves that, or you know, even agencies that are saying, Hey, we’re, that’s gonna be a, a, an actual add-on service that we offer.

Yeah, yeah. Yeah. We’re certainly seeing it that some, some agencies are, whether they’re using the phrase fractional CMO, they’re certainly serving in that capacity. Yeah. So, so what surprised you about the survey data? So again, most of the respondents were people who are offering their services as a fractional CM o That’s

Right. That’s

Right. And then, then a SA much smaller percentage were people who hired fractional cmo. That’s

Right. That’s

Right. So what surprised you?

This, I can’t say this surprised me, but this was, to me, the, the the point I love to really make to people many, many of the, so we asked people what they thought was the biggest benefit of, you know, offering this, and then we asked the others what was the, you know, what was the biggest benefit of seeking this, you know, this type of service. Yeah. The buyers appointed to the, the fact that they, they needed and wanted, you know, deep industry expertise. Right, right. Well, the agencies all said, you know, that was way down the list. And, and I think that that, you know, agencies probably encounter this all the time. You’re, you’re pitching a, I don’t know, a chain of chiropractic services and they wanna know how many chiropractors you’ve worked with.

Right, right. Right. And, and I think a lot of agencies believe, and I think this is the right approach. There’s certainly people that niche down into, you know, those kind of industries. But I think a lot of agencies also believe that their rich experience across industries is actually a benefit. And, and I think there is a little disconnect, or at least that’s a, that’s a message point or a benefit that I think we really have to drive home because the buyer is, you know, believes that they need somebody that has deep knowledge in their industry.

Well, I think it also depends on the size of your business and, and the geographical circle you wanna draw around your business. So I know a lot of your clients are working with small to mid-size businesses that they could drive to see Yeah. That they, they can have a personal relationship with. And, and, and, you know, in our world, as you know, for us, a lot of the agencies don’t wanna be bound by that geography. So they do wanna work with chiropractor, chiropractic clinics all over the country or world because they want to be able to have 20 clients that are scattered all over the US or whatever. And so, I think you’re right. I think if you, if you are, if you are of the mindset that, you know, I wanna work in my, in my town and I want to be of service to businesses that I am going to meet at the chamber meeting or networking events, or you know, that my kids’ little league team, then you’re right.

They absolutely have to be able to say, look, what I bring to the party is, regardless of what kind of business you have 30 years of marketing experience, I can apply to any business because that’s Right. There are some key best practices that are the same and some key metrics that we have to pay attention to. And it is less important that I understand the specifics of your business. I have to understand the specifics of my business.

Yeah, yeah. One you just mentioned the 30 years. You know, one of the other things that I’m not sure if this was surprising, I suspect this number will come down, frankly, but of the people we surveyed, close to 70% of them were over 10 years experience, you know, about 40% over 20 years. Yeah. E experience. And I, and I think that makes some sense. If you’re gonna set I’m a fractional CMO, you’re going to probably have to have some confidence. You, you’ve either done that before or, you know, you’re, you’re ready to move to the next level.

And a little gray hair perhaps, again, you know, if you’re, if you’re dealing with the C-suite Right. You know, they don’t want to deal with a 24-year-old who took a bunch of marketing classes. Yeah. Which honestly, I don’t know about you, but I find comfort in that actually, that it, that the idea of being a fractional CMO does require some years of experience. Some that you’ve, that you’ve worn a little bit of the tread of your shoe off doing this kind of work.

Yeah, a hundred percent. A hundred percent. And I, I do think that that nu that number may come down, you know, as more and more people hire fractional CMOs, you know, there’s just gonna be more demand for it. I mean, another statistic, I’m looking at the, the chart here, over 50%, you know, said they were either overwhelmed, busy, or had a balanced workload. I mean, there, there’s definitely some demand.

Demand Yeah.

You know, for it. And so I think that’s gonna drive more people. There’s no question that more people, you know, from a trend standpoint are calling themselves this title as, as more of the market understands what it is. You know, if, if I’d have gone to a five, $10 million business owner 10 years ago and said, I’m a fractional CMO, you know, they looked at me like, why would I want that? Right. You know, what is it even, right. But I think that other fractional cs, especially CFOs, I think probably is the most established, you know, have really kind of opened doors for people saying, yeah, I guess I can, can have that fractionally.

Well, and I think that trend was, was coming our way pre covid, but then I think Covid, you know, the whole, our whole understanding of working with somebody who wasn’t in town or wasn’t in the office with us completely changed. And so I think you’re right. I think that just opened the floodgate of possibilities for a role like this. For sure. Yeah.

I remember the first time I, I had a local client, I remember the first time I suggested we do a call like this, they were like, what? Like, that’s not, that’s not a meeting.

Right,

Right. But then the first time they experienced it, they were like, that’s awesome. Yeah.

This is convenient. Right. One of the things that I think is interesting about sort of positioning yourself either completely as a fractional CMO or that it’s part of the offering of your agency is for many agencies, they struggle because they wanna elevate who they’re dealing with inside the organization. Right. They’re, you know, they’re, they’re dealing with a middle marketing manager or the store, you know, the store to, you know, manager Yeah. As opposed to the business owner or the CEO depending on the size of the organization. And I, I would assume that one of the things you’re seeing is that when someone positions themselves as a fractional CMO, the CMO sort of intimates that we’re gonna be talking at, at the c-suite level.

Yeah. There’s no question. I mean, you know, now all of a sudden revenue and profit, you know, is part of the conversation, right. As opposed to clicks and traffic. And