Episode 66

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Brent Weaver became obsessed with creating websites when he was 15 years old. He realized he could create and share information with anyone in the world with the click of a button. His first business was a web design agency turned marketing firm. That business was named in the top-five fastest growing businesses in Denver, Colorado two years running leading to a successful exit/sale to another Denver-based agency. In 2012, he formed uGurus, a business dedicated to helping other web professionals succeed at building profitable businesses without needing to go through twelve years of roller-coaster pains. uGurus has now graduated over 600 web professionals from their Bootcamp. Graduates consistently use words like “transformative” and “life changing” to describe the results they achieve from the program. When not focused on the business, Brent loves hanging out with his wife and two year old son. Other favorite activities: writing, swimming, and snowboarding.

 

 

What you’ll learn about in this episode:

  • Why agencies have a hard time making money creating websites for clients
  • Why bad discovery leads to scope creep
  • Why you should spread discovery over multiple meetings rather than one long meeting
  • Why you need to niche down to find the quality and quantity of clients that you need
  • Why you need to treat your website (and your clients’ websites) like a kid
  • Working with your clients to develop a web strategy that fits their budget
  • Establishing a communication pattern with your clients
  • Not letting clients delay because a website isn’t perfect
  • How to focus on the right platforms
  • How to know whether to bring web-dev in-house or use a partnership
  • What agencies need to know about the web to capitalize on the opportunities out there

 

The Golden Nugget:

“Scope creep and unprofitable projects are the result of bad discovery.” – @brentweaver Click To Tweet

 

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Speaker 1:

If you’re going to take the risk of running an agency, shouldn’t you get the benefits too? Welcome to Build a Better Agency, where we show you how to build an agency that can scale and grow with better clients, invested employees and best of all, more money to the bottom line. Bringing his 25 plus years of expertise as both an agency owner and agency consultant to you, please welcome your host, Drew McLellan.

Drew McLellan:

Hey everybody, Drew McLellan here with another episode of Build a Better Agency. So one of the challenges for many agencies, whether you do it inside your shop, or you have a strategic partner is figuring out how to make money creating websites for clients. So that’s why I’ve invited Brent Weaver to join us today because he’s going to talk all about better ways to do that. So let me tell you a little bit about him.

So Brent grew up creating websites when he was 15 years old. He realized that he could create and share information with anyone with a click of a button and he loved that. So his first business was a web design agency, which turned into a marketing firm, as many of them do. That business was named in the top five fastest growing businesses in Denver, Colorado for two years running, which led to him to sell it to another Denver-based agency.

And then in 2012, he formed a company called UGURUS, so it’s the letter U, and then the word GURUS, a business dedicated to helping other web professionals succeed at building profitable businesses without having to go through all of the headaches and hurdles that he went through when he built his first business. He has now graduated over 600 web professionals through his bootcamp, which he’s going to tell us a little more about and his graduates talk about the program and they use words like transformative and life changing.

When he’s not focused on business, Brent loves to hang out with his wife and his son. And because of course he lives in Denver, he snowboards, but he also likes to write and swim. So stick around with us through the podcast today and at the end of the podcast, Brent also has a special offer where you can get a free course and a free call from his folks. So stick around for that. But for now, Brent, welcome to the podcast.

Brent Weaver:

It’s really great to be here, Drew, and thank you for that wonderful introduction.

Drew McLellan:

You bet. So you and I were talking before I hit the record button that one of the places where agencies really bang their head against the wall, and it’s not that they don’t understand the importance of the web or web strategy, but man, they have a hard time making money building websites for clients. What do you think that’s all about?

Brent Weaver:

It could be a lot of things. I think a lot of how web fits into the picture for a lot of digital agencies is a requirement to doing business, not the main show. But when you really think about what a website is for a business, it’s their online business. In my perspective, it is the business. When somebody is sitting there at two o’clock in the morning and they decide to Google a company, because they saw it on TV or they heard it on the radio or they’re listening to a podcast and they go see that business online, that website pretty much is the representation of their entire brand, of their product line. It’s going to figure out whether that customer is going to be able to move to the next step in the interactions with that business. And so to me, I feel like that’s a really, really important asset for that business. It’s not just like a, oh, by the way, we should throw up five pages and throw-

Drew McLellan:

Yeah, it’s the workhorse, right?

Brent Weaver:

Right. It’s an essential part of the online strategy. So I think one of the reasons that people have a hard time making money with that asset is because they don’t really think of it as that central part of the online business and they’re not having that conversation with their client about how important that is and the potential there is in that asset for their business. And I think a lot of that comes down to how they’re positioning their agency and then the sales process they take their clients through. That’s going to determine a lot about how much value is in that website portion.

Drew McLellan:

So where do agencies or web professionals, digital design firms, whatever, where do they get sideways with a web project? So what are they not doing or what are they not doing well, that would help them not only build a better site for their client, but more to their goals, to do that in a profitable way so that they’re not bleeding by the time they’re done building the site.

Brent Weaver:

I think the most important thing to do is to figure out why your client or prospect is even thinking about their website. A lot of people would call our agency and say, “Hey, can you guys build me a website?” And so for years I’d say, “Oh yeah, of course. What do you need on your site?” And they would start rattling off like, “Oh, I think we need this and this and about this many pages.” And it was very much about the artifact, about what we were going to be delivering to their company.

And I really never spent much time asking them, why are you doing this, why do you need a website? I think a lot of people just assumed that everybody knew why everybody else needed websites. And it turns out after being in this industry for almost 20 years, there’s a lot of reasons to need a website and there’s also a lot of nuance to need a website.

So I think what happens is a lot of people rush into the project. Their client says, “Hey, we need a new website for our business.” Web agency says, “Great. It’s going to be X amount of dollars.” They get into the project, they kind of get married and then it turns out that there’s maybe some unexpected requirements that weren’t really communicated up front because of course in the client’s head, they’re trying to build a website for a very, very specific reason.

So in their head, the web agency should have read their mind and just known that they needed the website for a specific reason. And so of course, all these unexpected requirements come out during the project and then your scope explodes and, or wasn’t defined well enough. And so that’s where that slippery slope happens, where the client’s not happy with their design, where they’re not happy with the functionality because they didn’t disclose something or you didn’t dig it out.

So I always tell people that scope creep and unprofitable projects are pretty much 99% of the time the result of bad discovery. The issue happened in the sales process. People were just rushing, they were all agreeing with each other. Oh yes, of course we can do whatever you need. We’ll figure that stuff out later. And so then they sign on the dotted line, they commit to a project for 5,000 or 10,000 or whatever it is, some number, and it ends up costing-

Drew McLellan:

Five times that.

Brent Weaver:

Right. Five times if you’re lucky. I was just talking to an agency owner yesterday actually for our podcast and he had a project that he signed with a client, a $400,000 project. Sounds like, wow, that’s an amazing contract, right? Well, it ended up costing him about 700,000 to deliver. So we joked, we were like, “Well, it would’ve been better off to write that client a $100,000 check the day of contract signing and just never do any work for them than to actually take that project on.”

And I think a lot of people get caught in that situation where we look at this big contract amount or this big opportunity, we just get really excited about that and we just want to get to the deal and maybe we cut some corners in the process or we ignore some red flags that we should have been paying more attention to.

Drew McLellan:

So let’s talk about this discovery process, because I feel like that’s a place where agencies and clients they’re so anxious to get going, that they often don’t do that well or very deeply. And a lot of times I think, while I think the client may have an idea of why they need a website, a lot of times they don’t really think it through and they don’t really know all of the things the website could or should be doing for them in the discovery process and then you’re knee deep into the project and all of a sudden they go, “Oh, you know what? Now that I see it, I would also like it to be able to do X or Y.” So walk us through what a good discovery process looks like. And are there some tools or tricks that you have, or that you teach that make that a more complete discussion so that there aren’t as many surprises down the road?

Brent Weaver:

Yeah. And we spend hours and hours with people teaching them how to do discovery well, so I’ll try to take potentially hours or weeks of learning and condense that down into a really, really short, high potency way for you here today.

So one of the things that comes to mind that’s really important to uncover in the discovery process is to actually get into your prospect or client’s customer. So one of the steps that we have in our discovery process, which is a multi interaction process. And I recommend never to do the super discovery, the epic discovery meeting where you have this two hour, three hour session where you just dive into all this depth in a business, because there’s something magical that happens when you spread discovery out over multiple interactions. And that magic comes in the form of research and going to bed.

You go to sleep at night and your brain processes stuff. Your subconscious chews through things. And while that’s really important for you as the agency owner or the salesperson, it’s also super important for your prospect or for your client, because they might have told you something today in your discovery meeting and then when they went to bed that night, the last thing through their mind was, oh my God, I forgot to tell them about this.

And that I forgot to tell them about this, sometimes turns out to be a completely different market that the business serves that they just forgot to tell you about. It could be that the product that they told you they wanted to feature with their business actually isn’t a very profitable product and they have something completely else that drives the major revenue for the business. And that, oh, I forgot about this, sometimes turns out to be a really, really big gotcha later on in the project.

So one of the things we always teach people is that discovery should be spread out over multiple interactions. And sometimes it might feel like you got through everything today, but it never fails, that second discovery meeting, they always bring … They’re more comfortable. They’re more willing to share with you more information. They had time to digest what you told them and maybe educated them on a little bit in your previous meeting. So all that stuff’s really, really important. So we say, “Look, have multiple interactions.”

And getting into what those interactions look like, it takes a little bit of time, but one example is looking at their customer avatars. I always like to use this example, but a client that we worked with years ago was a nanny placement company. So in her mind, her website had basic brochureware, five pages, my company, my services, my about page, contact me. Well, we get into discovery and we realize that she serves actually two very, very different markets. She served nannies, so actually recruiting nannies and getting them to sign a letter of intent that they wanted to be placed with a family. And then she also served her revenue generating side, which was her families looking for nannies.

So once we uncovered that, you have to realize now there’s basically two websites. Now it’s our job to organize that information, to create the appropriate funnels, but there’s basically two websites because if I just click on services as a nanny, it’s not going to make any sense to me. I’m not going to have any idea what that page is for me. And also if I’m a parent looking for a nanny and I click on the nanny’s page or whatever, I might think I’m reading for information about nannies, but really I’m actually filling out an application to be a nanny.

And so that thing that we uncovered during discovery becomes this major aha that actually informs scope of work because instead of five pages, we now basically have two different websites, two different funnels, two different sets of email series, two different sets of opt-ins and the site goes from a five page basic brochureware site to probably a 25 page site, if you count all of the email, the automation and the things that we had to set up for essentially two different sales funnels, two different lead generation funnels for that business.

Drew McLellan:

Okay. And so in terms of it going on and being more than a one conversation process, do you have a structure around that? Is that two meetings, three meetings? How far apart do they happen? Because as you know, by the time the client is ready to pull the trigger, they’re champing at the bit, right?

Brent Weaver:

They are, but in a way discovery is-

Drew McLellan:

Is critical.

Brent Weaver:

… part of the process. So it’s like, yeah, you can rush it, but it’s like, what are you skipping over and what kind of pain and anguish is that going to cause you later? So everybody always asks me, it’s kind of like the client that wants to get to price, because people always say, “Well, how many meetings do I have to have? I have to have all these meetings. How many meetings do I have to have?” And the answer is always, as many discovery meetings as it takes.

So one of our graduates recently was telling me about a project that she won for her agency. It’s a $115,000 project. And she actually got paid for her discovery, which is something that we advocate as you get into these bigger interactions.

Drew McLellan:

Absolutely. Yeah, absolutely.

Brent Weaver:

She got paid $8,000 or $9,000 to go through discovery. Now, what did that process entail? There was six deep dive discovery meetings. Those were an hour to two hours long with the client, with enough time in between meetings to digest that information and to do additional research. She also did eight customer interviews. So actually going and interviewing customers of that organization and doing some research on that side to figure out where are they at, what do they need, what are they looking for on the website. Then from there, she did a solution presentation, which was a couple hours. The client loved it so much that they actually asked her to come back and give the same presentation with a couple of additional stakeholders in the room.

And then she had a proposal presentation after that. So once she actually walked them through everything that they learned in the discovery process, in their proposed solution, at that point she then went into the proposal presentation process and the client ended up signing a deal for $115,000 with probably a five figure monthly retainer expected to start after that project was complete.

So if you’re doing a website for $5,000 for the coffee shop up the street, you’re probably not going to engage in a six meeting discovery process with eight meetings of customer interaction. Coffee business, pretty simple, you probably know overall what they’re looking for. But what you should try to avoid is still just simplifying that into a single meeting. You might want to have two different meetings, give your potential client or existing client enough time to digest what you’re going through with them, give you time to digest who are they really serving, what’s their unique advantage, what is our solution supposed to be?

So in that situation, maybe it’s two 45 minute to an hour long meetings in discovery. You have enough information. You’ve given your customer enough time to catch up with you, to get up to speed and that might be enough to get you to that proposal place. But if you end that second discovery meeting and right before the meeting ends, they drop a bomb on you and that bomb could be, oh yeah, I forgot to mention, we actually have 12 locations and you’re like-

Drew McLellan:

Or it also has to be in another language or whatever.

Brent Weaver:

Right. In that case you might say, “Well, okay, it’s not going to be in anybody’s service to just throw that in at the last minute. Let’s make sure we accommodate for that. Let’s have another session. And these don’t have to be in person meetings, but let’s talk on the phone for 30 or 45 minutes in a couple of days. And I’m going to have some questions about that. I got to think about that and I’m going to come back to you and we’ll be able to build that into our proposal after that.”

But let’s not rush to the proposal because again, all it’s going to do is get you into a contract that you’re not willing to, or not excited about delivering. And I always tell people, your proposal, your price should be the right amount that when you’ve been working on this project for 6 weeks, 8 weeks, 10 weeks, that you’re still excited about getting up in the morning, getting out of bed and working for this client. If the price is not going to get you there to keep your excitement for three months, then that’s a problem.

Drew McLellan:

Yeah, absolutely. So it sounds like you recommend what we recommend, which is that you have a discovery phase, price and then after the discovery phase, you price out the actual build of the site. Yes?

Brent Weaver:

Yeah. I think in general, if you can get yourself into a practice of paid discovery, you’re going to end up with much better overall projects, much happier clients, you’re going to be happier. Now, I haven’t always practiced that. I think there was some industries that we served where we knew the industry really, really well, and we knew how to identify great clients and we had a really tight sales process because the projects were very homogenous. Now, we were still doing a lot of discovery, but we knew with some certainty of somebody engaged in discovery with us, there was a really high chance they were going to sign on as a customer.

So we wouldn’t necessarily always engage in paid discovery, but I think that we definitely preferred that approach and I see that approach much more successful these days because it’s giving you a smaller transaction with the customer up front, helping them to lower their risk, giving them more certainty about what they’re ultimately going to get. Plus it gives you plenty of time to find all of the right problems and not really rush that part of the process.

Drew McLellan:

Yeah, absolutely. So when you watch agencies out there in the web business, what are the most common mistakes you see them making?

Brent Weaver:

Well, I guess the big one we just talked about is not having a good discovery process, or short cutting discovery. Probably the other one I would say, and I see tons of people really struggle with this, is really about how they’re positioned as a company. So they like to just serve small business. They like to serve the giant ocean of potential prospects out there and they don’t really stake a flag in the ground and say, this is the market, this is the problem, this is the vertical, this is the horizontal, this is the thing that we do better than anybody else. So too many folks are just out there saying, “Hey, I build websites,” or, “Hey, we’re a web agency and we help small business grow.” It’s like, oh congratulations, your market is 28 million different companies.

So that’s something that I see a lot and which I think tightly correlates to the number one problem that we hear at UGURUS about that web agencies struggle with, which is, I don’t have enough clients, I don’t have clients that are consistently coming to my doorstep that are the right types of budgets. It’s like that problem is a market and business positioning problem and how they’re approaching their marketing, whether the activities that they’re investing energy in are actually building momentum for themselves, or if they’re just completely disconnected, fragmented.

They’re going to a business meetup locally one day, they’re commenting on some random industry forum the next day, they’re speaking at a completely unrelated event the next day. They’re just surfing through all of this randomness versus having a really clear and coherent and tight strategy for their business and going after a market that could bring them really great projects consistently.

Drew McLellan:

Yeah. Yeah. So you mentioned when you were talking about the client you were talking to about the backend contract, she was telling you about a successful project that she had just sold, including a five figure backend retained ongoing contract. So is one of the things you teach … One of the things I watch agencies do sometimes is they’ll offer the client, look, we’ll do the discovery for X and then we’ll build the website for X, but that’s where they stop the conversation, as opposed to once the site is up, that’s not the end, it’s actually the beginning, and then here are all the things we’re going to do for you on an ongoing basis to actually make sure that that workhorse stays well fed and well exercised and is doing its job. So talk to us a little bit about how you teach that part of the web business to your students.

Brent Weaver:

There’s two sides of that conversation. One is just as your business, as the agency, it is so much harder to go out there and win new business every single day. This is just a fundamental business tenant that it’s easier to continue working with an existing customer. It’s easier to generate revenue with them over time, because there’s established trust and credibility, there’s some work history, assuming that through the web project, they don’t end up hating you because projects can sometimes be frustrating. So assuming that you’ve got a really tight and well oiled process for actually delivering and delighting, working with existing customers is always going to be an easier thing.

But new projects are exciting and it’s easier to lose track of that. I know for myself, when we had our agency, one day I looked at our revenue for the entire year and we were making about 85% or so of our revenue from new projects. Those were clients we met that year and we were doing our first project with them. So only 15% of our revenue was coming from past clients or existing clients. And out of all that revenue, out of our total revenue, only 3% of our revenue was coming from a recurring basis, like a hosting, maintenance, management, marketing. 3% of our revenue was coming from recurring.

So you can imagine at this time I had pretty much no peace of mind in our business, everything depended on always going out and finding new business and new customers and convincing them, spending all of that time and energy convincing them to sign on the dotted line. And of course those upfront projects were sometimes breakeven, or in some cases unprofitable because we weren’t charging enough for that work and so we had no opportunity to make it up on the back end. So if we lost money on the upfront project, we were already putting our business in a crunch because we had no nurturing system, no system to go and continuously manage that account and bring new ideas, improvements and strategies to the table.

So from the agency owner’s side of the table, you need to figure out how to build that into your business model. So it took us several years to work on that, but eventually we moved to more of a 40-60 model where 40% of our revenue was coming from new projects and 60% of our revenue was coming from existing accounts. And we were able to more or less farm over 200 accounts that were under our management, which was either through better positioned hosting and maintenance fees, improvements, small projects, support. And then ultimately, we started getting into more marketing, inbound, SEO, email marketing management. That kind of stuff was really where we started getting into some really juicy retainers.

Now for the client, a website is kind of like having a kid, and for most people, they don’t view their website like that. They almost view it as if you were to have a kid and then just abandon it and just be like, “Okay, great, you’re here. So let’s just leave you over there in the corner.” And of course, that’s not how that works. You have this kid, which is a ton of work, conception, which is maybe a lot of fun, nine months of carrying this thing around, going to doctor’s appointments, Lamaze, all that kind of stuff and then a ton of work. And then you have it and that’s when the real work begins. I think any parent knows when you have anybody that’s pregnant or thinking about having kids is so far from the actual real work.

So a website is the exact same. It’s like, okay, great, it arrived, it’s here, now the really interesting work begins, because now you have access to the over three billion people that are connected to the internet, over 1.7 billion active monthly users on Facebook. So you have this website, you have this online presence, now you get to play the fun game of trying to attract customers week in, week out, 24/7, on the internet.

And you get the opportunity to scale your business, to become one of those success stories that you read about in Inc. Magazine, where these companies go from tens of thousands of dollars to tens of millions of dollars in a very, very short period of time. And why is that possible today? It’s possible because you’ve got over three billion people connected to the internet. Back in the dot com boom, this huge peak of the stock market, there was only 300 million people connected to the web, I think it was like 280 million. That has more than 10 X’d today.

Drew McLellan:

It’s crazy.

Brent Weaver:

So the amount of value that these businesses and organizations have access to is literally limitless. So I think as a web agency or any kind of digital agency owner, you go, you spend all this time building this project and you have to always be positioning this as we’re going to do a lot of exciting work together, it’s going to take us months to get there. When we’re done with it, we’re going to have this really, really nice thing that is now an asset, but it’s at that moment we have to start putting this thing to work and that takes constant nourishment.

We need to be blogging. We need to be guest blogging on other sites. We need to be publishing all sorts of different types of content. We need to be getting people to link to us. We need to be getting other major publishers to do joint ventures or joint launches with us. We need to be building our email list. We need to be constantly nurturing that email list over time. We need to be building landing pages to grow that email list. All of those things, you just can’t set it and forget. You can’t just put the kid in the corner and be like, “Okay, I want you to go to Harvard and I’m not going to do anything between now and the next 20 years to get you there.” That journey starts once the website arrives.

Drew McLellan:

So do you propose that people build their proposal? So if I’m chatting with you and you’re considering hiring my agency to do a web project for you, am I saying to you, the proposal’s going to come in three phases, it’s going to be the discovery phase, the building the site phase, and then the maintaining the site phase? Or do you wait and talk to them about the maintaining the site phase once you’re in build mode?

Brent Weaver:

I definitely would recommend painting the broad strokes in your earliest conversations with somebody. The worst thing that you could do for a company is January you sign a contract with a budget for an upfront build, that is the company’s marketing and advertising budget for the entire year and you finish their website in March and then you’re like, “Okay, it’s time to start marketing and advertising.” And they go, “I thought that’s what the website was supposed to do for us.” And you’re like, “Oh no, we don’t just build it and they will come. We’ve got to … ” And the company’s going, “Well yeah, it’s great, we had 50 gra