Why do some agencies seem to “get” digital transformation and others struggle to cross that hurdle? Even more puzzling – among the ones who do get it – why are so many of them struggling to make money at it?
These are some of the daunting questions I’m exploring in this episode with my guest Chris Aarons. We all understand that digital transformation is happening. Few understand this as well as he does.
What does it mean for an agency to have digital-first DNA? Chris Aarons’ book Digital Helix explores this idea and I asked him about it when we spoke. Part of this concept is understanding that everything is connected, and a digital asset is never “done” or complete. When we approach our work with that understanding, what we do for and with clients becomes less about putting out emergency fires or checking off the boxes on the latest trend. It becomes about a consistent and constant state of evolution.
Chris believes the larger value we can all offer clients is helping them recognize and embrace that reality and then together, looking out over the horizon and planning for tomorrow’s opportunities rather than focusing on today’s fires.
That’s how we add incredible value and earn our seat at the client’s table. In this episode we talk about how to make that vision a reality for your agency.
What you’ll learn about in this episode:
- The importance of an exploration mindset in moving you and your clients forward
- What it means to operate with a digital-first DNA as an agency
- How to encourage digital-first DNA thinking in your clients
- How to develop ongoing conversations with clients rather than operating from a one-off proposal framework
- Why talking with a client’s customers is at least as important as talking with the clients themselves
- How sales are connective moments – not a journey
- Why identifying the current problem is not the agency’s primary job
- How to be relentless about getting better over time
- When and how organic influencer models can beat the pants off of paid reach
The Golden Nuggets:“When you can see ahead and solve problems for a client, you earn your seat at the client’s table” – @Chris_Aarons explains how agencies need to evolve their role on this episode of Build A Better Agency. Click To Tweet “I call it an EXPLORE mentality. What that means is you start with your eyes wide open, looking for what you might find, what you might hope to see, and what the client may have missed.” – @Chris_Aarons Click To Tweet “You can be like Netflix, taking a dying business model and upending it into a powerhouse. Or you can be like Sears, squandering a wealth of customer contacts into an ever-shrinking market share.” – @Chris_Aarons Click To Tweet “The client wanted me to talk to her team. I want to talk to their customers. I want to really find out what it’s going to take. When you offer that, you're going to be more valuable. The solutions are going to be better.” – @Chris_Aarons Click To Tweet “Sales are connective moments. The notion of ‘journey’ is cute, but people don’t buy because of a journey.” - @Chris_Aarons Click To Tweet “If the end goal for you is to check of a ‘did social media’ box, that's not my end goal. We're not going to be good agency partners for you.” - @Chris_Aarons Click To Tweet
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If you’re going to take the risk of running an agency, shouldn’t you get the benefits too? Welcome to Agency Management Institute’s Build A Better Agency podcast, presented by HubSpot. We’ll 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 experience as both an agency owner and agency consultant, please welcome your host, Drew McLellan.
Hey everybody, Drew McLellan here with another episode of Build A Better Agency. My guest today is a fascinating guy, and I think his trajectory and his career sort of reminds us how the business has changed. So one of the things that I admire about this guest is the idea of reinvention. And I’ll tell you a little bit about him in a second. But first, I want to talk a little bit about reinvention because I think a lot of you are struggling with this right now. So especially if you have been in the business for a while, especially if you are or were a very traditional agency, you bought a lot of traditional media, you did a lot of creative. And now, all of a sudden, in the last 10 years, you’re really being asked to change the game completely. And for some of you, that’s been exciting, and it’s been a challenge that you’ve enjoyed. And for others of you, it has been a challenge, but not one you’ve enjoyed so much. I have a lot of you hearkening back to kind of the good old days.
And I think one of the challenges for us, as agency owners, is the idea that the business is changing. And that quite honestly, we’ve got to either embrace the change or we need to get off the train, because the train is leaving the station and we’re either going to be on it or someone else is going to be driving our train. And quite honestly, for some agency owners, that’s not a bad plan, having someone else step in and help you with the innovation and sort of this shift in terms of the deliverables that you have for clients and the way you serve them, not an all bad strategy. So don’t think that you have to do it all by yourself.
But I think the reality is for all of us, moving in this direction, not really an option for us anymore, to avoid that or to dodge it. And when I look at the agencies, as you know, I see a lot of agencies’ financials, if they’re in the peer groups. And the ones that are really kicking it, the ones that are really making great money and building a culture and a team and attracting the right clients are the ones who have embraced the fact that the agency they were even a year ago, can’t be the agency they are today, and certainly is not going to be the agency that they’re going to be 12 or 24 months down the road. We are in a state of constant evolution and exploration. And that’s one of the topics that I want to talk to our guest, Chris Aarons, about.
So Chris, really kind of a Renaissance man in the agency business. So started his career as a PR guy, in a PR shop and then sort of moved along from PR guy, to in an ad agency guy, to an in-house guy, to a social media agency guy. And now, is sort of a digital consultant. And through all of that, has really pushed this idea of exploration, this idea that it is the agency who must be seeking new opportunities, new directions, because the clients simply don’t have the bandwidth to do it.
So Chris recently wrote a book, let me tell you a little bit about it. So it’s called The Digital Helix, and it’s transforming your organization’s DNA to thrive in a digital age. And he talks a lot about how to create a digital first DNA inside your organization, and also how you can do that for your clients. But one of the themes in the book that I really resonated with was this idea of exploration. I think we got into the business, most of us anyway, because we’re curious and we’d like to sort of figure out how things work and we like to make them work better. We also love this idea of marrying strategy and creative. So how do I understand where I need to get an audience to go? And then, how do I inspire them to go there, to want to go there? And all of that takes exploration and understanding of the audience.
And so, those are some of the topics that I want to explore with Chris as we delve into this episode. So let’s invite him to join us and get started.
I’m glad to be here. Thanks for having me.
Glad to have you. So give folks a little bit of background on you. You certainly have, as I had mentioned in the intro, have had an interesting and varied professional life up to this point, but give everybody sort of the highlights.
Well, I’m a PR person by degree and by training. I run about six agencies, both on my own and for other businesses. I was one of the youngest vice presidents of Shandwick, the PR firm, which we bought up by Weber back in the late ’90s. Now, of course, they give away VP titles to just about anybody, but I was pretty proud of that. And I have started one of the first social media agencies, and now I’m doing a digital consulting thing. So I’ve had kind of a different path than most agency people. And it’s kind of bouncing in and out between corporate agency work and it’s kind of kept me on my toes.
Well, you’ve certainly seen the evolution of agencies. So as we sort of enter into our conversation, talk a little bit about sort of how you’ve seen the evolution of agencies. And where do you think we’re headed next?
That’s a great question. I think that there’s really kind of two kind of agencies. There is the core agency, whether it’s a digital agency, a web agency, PR agency, advertising agency, that kind of does the same thing, maybe with some different technology, maybe with some different flavor. And then, there’s more of a consultative agency. And I think that’s where we’re moving. And you can see that a lot in some of the bigger consulting firms, McKinsey [crosstalk 00:06:23] and people like that.
Yeah, buying up the agencies.
Buying up and adding these things because they see that the agency model is a really great way to get some different fingers in the pie and there’s budget there. There’s problems to be solved there. And so, I really see that there’s these two types of agencies, these core traditional agencies, that’ll probably be around forever and a day, but does the same thing, just a slightly different way. And then, there’s this consultative model that looks at the problem, the challenges, the drivers for the client, and really tries to understand what they can do from a core foundational knowledge base or from a partner base, where they kind of come in and solve the problems for the client.
So I think that’s where we’re moving to, because digital has shifted things and we see that clients need more than just an ad or a website or something like that, because everything is connected. And when everything is connected, your one problem that you’re solving cannot solve the 32 that come after it unless you know where they’re going, where they need to go.
Right. So do you think that consultative agency also is the one that’s doing the actual work and making this stuff? Or do you think that there’s going to be this division between, in essence, agency consultants who build strategy and agency executioners who make this stuff?
Well, I think it depends. You look at McKinsey and some of the other big consulting firms, they have partners and divisions and everything. I mean, literally they can do everything from identifying the data, to figuring out where the data is going to go, to serving up the ad, to running the digital site and then taking that data back in and then putting it all through the machine one more time, under their purview with the client, hand-in-hand, kind of this partner model.
But with that said, one of the things that strikes me with this whole conversation is that you really got to understand where things are going with your client, where the drivers and challenges of your client take you. And if I can, I’ll give you a couple examples.
Yeah, that’d be great.
We were doing a messaging project for a client in northern California, high-tech company, very great technology, right? And they call us, said, “Hey, listen, we’re just having trouble describing what we do and getting people to get excited about it. Because it’s so leading edge, that we just can’t figure out a way to put it in a non-techie way to get the people to understand that we’re in this ballpark and not completely confuse them.” So most agencies would have come in there and said, “Okay, no problem. We’ll charge you X and we’ll do this branding project. And then, maybe can help you out with some other stuff.”
But the first thing we started with, is we starting interviewing their customers that really latched onto this technology and got it. And then, we had a knowledge base to start our branding project, first and foremost. But we learned so much from that, that we saw that there were 15 other things that were going to need to change. Otherwise, if we changed the messaging for this client, their sales motions weren’t going to be right. Their web delivery wasn’t going to be right. Their direct loans wasn’t going to be right. So we really started down a path with just one little hook in the client. And it was like, “Okay guys, we’ll do this, but you’ve got to look at these 15 other things. Otherwise, you’re not going to be any further, you’re just going to have a new headline on your website.”
And when they saw that and they realized how this was going to change. All of a sudden, we became a real trusted advisor to them and we were doing things on the web, with direct, and we’re not a direct agency. We weren’t doing direct. We weren’t doing a lot of web stuff, but we identified the problem, we saw what needed to be done. And then, we marshaled the forces to get it done and make sure the client was going to get where they wanted to go, because we understood their challenges better than they did. They saw it as a messaging problem. I hope that helps.
Yeah. So I’m sure a part of the listeners are going, “Okay, but how did you price it? How did you talk about it?” So when you walk into a project like that, when you really don’t know what you’re walking into, how did you frame that up for the client so that both of you… Because no client is going to just say, “Yeah, come on in. I don’t care what it costs.” And you don’t want to say it’s going to cost a buck when it might cost $15. So how did you frame that with them, so that they understood you were sort of walking into the room to do some discovery with talking to the customers and doing all of that, and from that was going to come something, but you weren’t sure what it was going to be?
So I’m going to turn that around just a little bit. So first of all, we went in just like any agency would, with our messaging project. But we started out with this kind of, what I call, and it’s in the book that we just published, it’s called an explorer mentality. And really what that is, you start with your eyes wide open, looking for what you might find, what you might never hope to see and what the other people may have missed.
So we just walked in and said, “Okay, we’re going to do our core project. But part of that is us talking to your customers, because we want to understand where they got to where they are, from your really busted up messaging.” Then we went back and said, “Okay guys, if we do this, you’re going to have to attach and fix these five, 10, 15 things,” I think is the number I was using. And I didn’t wound up being about 15 things. And then, “So let’s talk about what that requires. And then let’s talk about the budget for each and the pilot groups.” So it wasn’t really kind of going in with SOW.
It was an ongoing conversation. And when the client saw the onion peeling back, and if they saw, “Oh yeah, crap. You’re right. We will have to fix that. Well, we don’t have an internal team to do that.” We had a partner do that last year, but they didn’t really do what we want to, we kind of kicked them to the curb. We have a web team, they can do that. So then it became a conversation of what are we best to do? What is best to do internally? What do you have other partners do, that maybe we can kind of dive a little bit and get you to where you want and they want? And they’re going to get you there now.
And so, the pricing and the budgeting really wasn’t like it normally is, where you walk in and, in an RFP situation, where you’re constantly just like, “Hey, we can do X, Y, and Z.” It became a conversation with a partner. Not all 15 were natural, but I’d say about eight or nine were natural.
And so, I was like, “Okay, let’s get the budget for that.” And we were going to do some web development. “So we’ll just carve that out for you guys to work with our web team.” And so, it became an incremental growing of the original SOW, as opposed to proposal after proposal and then having it run up the food chain because the senior leadership team and marketing team saw the need. And once we kind of walked them through it, it was painfully obvious to them. And if they didn’t address it, they were going to be grossly negligent in their job.
Right. So this whole idea of being an Explorer is a fascinating one because on the one hand, it’s sort of why people got into the agency business in the first place. We’re naturally curious, we like to solve problems, we like to learn new things. We’re sort of wired that way, most of us anyway, in the agency business. But on the flip side of that, we have concerns like scope creep and efficiency. And so, we create these systems and processes to do parts of our work.
And sometimes, I think those systems and processes, while in theory are exactly what we need to have. They often squelch the explorer in us. So talk to us a little bit about how do you balance the business necessity of system and process and accountability in terms of budgets and scope work and scope creep and all of that. But how do we also, in our agencies, create this permission? Because I think sometimes our employees feel like they’re not allowed to explore because that might take two extra hours here or an hour here. So how do we create this spirit of exploration and yet still be profitable?
So, a great question. So first and foremost, I think that you can’t be a slave to your systems, period, full stop. So if you have these systems, and one of my favorite examples, because when we started talking about this podcast, it just popped in my head, I don’t know how many times that I’ve been on the client side or I’ve been on the agency side and they’ve had a digital advertising web agency come in and say, “We’re going to redo your website.” And they come up with three examples; the one they want you to choose, the one they think is kind of close to give you a couple of ideas, and the really ugly one to push you towards the original one. And I’ve seen that so many times and I’m not even a client that often, but I’ve seen it as another agency in the mix here.
And so, when you start down that road, I think you really have locked yourself into the non-explorer mentality. And the explorer mindset or mentality is we’re going to go in and figure out what really needs to be done. Again, I’m going to go back to it, it’s challenges and drivers. What are the challenges that the client has that are unique to them? In the book, we talk a lot about DNA and what it takes… Every one of us, every company has its own DNA. Every individual has their own DNA. And with companies, the DNA is marginally what they are. We’ve talked about and we’ve seen companies dramatically change their DNA, like with Netflix. But in general, the company’s DNA is kind of consistent. It’s going to evolve and maybe become revolutionary over time.
So you got to look at that and say, “Okay, what does this client really need? What does their customer really need? What can I do to push that envelope?” And I would say nine times out of 10, we get what we want. And then that 10th time, when the client pulls back and says, “That’s just not what we want.” I don’t think I want to work for that client.
And so, going back to your original question, which was how do we deal with scope creep, well, if you don’t have scope creep baked into everything you do, then you are just literally living on a razor’s edge and you can’t explore. You said it best, how can I donate two hours to this cause, to get something miraculous, if I’m line item then time sheeted to death, to the last 15 minutes or five minutes, whatever it is. So you have to have scope creep in there.
And so, what we tend to do is we build projects on what we think it’s going to cost, knowing the core value that we’re providing and the core amount of hours it’s going to take. We don’t do time sheets. No agency that I’ve owned has ever done time sheets, because I have seen from Shandwick days and from others, that 20%, 30% of the time, that just calculating that is a nightmare. And then, you have to go back for the AP people. So we really do a X price for a deliverable or for a project. And then, you go in, starting with a great mindset. “Okay, I understand what it is the client has asked me. Now, I want to talk to their internal teams. I want to talk to their customers. I want to really find out what needs to take. Yeah, it’s probably going to make me a little bit more expensive than the other guys who were pitching, who aren’t going to do that,” but you’re going to learn so much more, you’re going to be more valuable and your solution’s going to be better.
And also, if somebody’s willing to nickel and dime you for say $10,000, $20,000 or $30,000, then maybe your model should be just knocking stuff out because there’s still a market for that and there always will be a market for that. But the agencies I’ve worked at, have tried to deliver real value that transforms the business because of our partnership. And that’s what I can see agencies, yours, mine, all the people who are listening can really do, is if you have this great knowledge inside of you, think of all the clients that we’ve all worked for, think of all the solutions, think of all the amazing things we’ve done, that’s what we can do. And I think that’s how you get around the scope creep idea, or this lack of mindset.
You go into this, and we’re going to learn so much, and have a good idea of what the solution is probably going to be. And then, we’re going to just turn it to 11, turn it to 15, whatever it happens to be, because of this new knowledge we’re bringing in.
So for you, when you were going to the client and you were talking about this, and you knew you were going to come in at a higher budget point than perhaps… If you’re in a competitive situation, how did you tee that up for a client so that they understood that your $50,000 versus somebody else’s $35,000, that they understood the value difference between that so that they weren’t only making a decision based on price?
Well, it again goes back to that original proposal. I mean, we’re going to tell you that we’re going to talk to your clients. We’re going to identify other things that need to be done. We’re going to show you how you’re going to best… Using my messaging example, take you beyond just giving you a Word doc or PowerPoint doc and say we’re done. So that’s one way.
But secondly, is that if you do this consistently, you can show your clients and prospective clients what people just like them, because that’s the number one thing they want to see, have gotten from the work. I mean, either they bring a project for a company here in Austin, where I’m located, and it would have been real easy for us to do just the branding, right?
Just give them the messaging and all of that. But we did a website mock up. We did infographics. We did sample content. So we call it, incubating the content we know they’re going to need. And the executive team and the CEO saw this stuff. He was like, “This is amazing. This is exactly what I want because we’re a different company with a different value proposition that has technology that nobody else has. And I want to show it and communicate it in this way and get people internally and externally excited about it.” So we did all of that stuff in what would typically be a branding thing because it really didn’t take that much more time to do it, than just doing the standard. And he wanted it because he knew he needed it. And then the amazing thing, going back to the website and all that stuff, we mocked up a website for him. He’s like, “This is amazing. It looks different. I love the way you guys kind of envisioned showing my clients and my customers my products.”
He takes it to a very well-known web design firm in Northern California. And they come back with the same standard three website cookie-cutter, that has a logo plastered on the top. And he’s like, “Guys, I don’t want this.” So we got another consulting gig to work with them, to talk to them how they can take what’s in our mind, that he loved, and transform it into what he wanted. Because they just would not get around their non-explorer mentality, their whopping cookie-cutter approach. And I know it’s easy for them to do it, that they could have probably charged him a lot more upfront instead of giving that money to us, if they really just embraced what he had.
And so again, you go in eyes wide open, looking on how you’re going to transform the business, do something. I mean, I want every one of my projects to be worthy of winning an award, being showcased, be something that I’m so proud of. I want to put it on LinkedIn and everywhere else and have people share it because they’re so amazed by it. That’s why I go into every project doing it. It doesn’t always happen, sometimes you’re just a little more pedestrian. Sometimes the client gets in the way. Sometimes you don’t give them something that’s just all that great. But that’s the goal and I’m never going to stop pulling back from that goal.
Yeah. So I’m thinking about you talking about how every organization has its own DNA. And I know in the book you talk a lot about this idea that we have to really start thinking about sort of this digital first DNA and that a lot of organizations weren’t born in the digital age. They have traditional DNA and they’re trying desperately to sort of shift. So talk to us a little bit about sort of your vision of how that happens and how a business owner, an agency owner can accelerate that shift.
So let me just give you some statistics from the research to kind of bring the conversation that we did for the book. Virtually every organization of any size is going through some sort of digital transformation. Our research says about 88% and growing. Unfortunately, only about 16% or one in six are actually seeing true economic returns from all of this time and energy spent on this digital transformation. The really interesting thing is that about 40% of these organizations have slowed down or abandoned their digital transformations because they don’t see that result.
The thing that gets me really kind of, and this should hit the nail on the head for so many of the agency executives and others that listen this podcast, is that 32% do exactly the same thing as the one in six or 16% that are knocking it out of the ballpark, but get far less results. And if you think about that, that’s where the DNA model came from, in our mind is that one little chromosome here and there, one little change in the DNA between two different species or two different individuals makes a huge difference. So when you see 32% doing virtually the same thing as the 16% and getting really bad results, nothing close to the 16%, you see how you have to have everything work in concert, you see how everything has to flow and be part of a greater effort.
And so, that’s what it looked like to us. And that’s why we came up with the term digital helix, because everything works in concert. If you see things and connect things and there are no silos. Again, going back to my messaging, where we started doing websites and branding and direct and all this other stuff, you see how you have to help some of the clients get over themselves and get over their own internal inertia.
I, one time, had a client say to me, and it was kind of a snotty comment at the time, but he said, “Do you think you’ll ever know my business as well as I do?” And this is a question I think that has probably either been posed to most agency leads or has been subtly kind of insinuated, right?
And so, he said that, and I thought for a second, I said, “No, there’s no way I’m going to know your business as well as you do because you live there day in and day out. And in some cases, 18 hours a day. You’re taking emails and phone calls and looking at websites and data from internal. There’s no way I can keep up with that. But I can know your industry better. I can certainly know your customers better. I can do the third party perspectives that can help you get around being bogged down in the day-to-day, to elevate you to where you need to go, not to where you’re just going to naturally kind of find yourself.” And that can really… Lighthouse moment, where it’s like, “Okay, it’s not about knowing the business. It’s about getting the message out there.” And that’s one of the things we talk about in the book.
It’s about your signal to noise ratio. If you live internal in an organization, your noise ratio is incredible because you’re digesting everything. If you’re on the agency side, you can balance that by having a much better signal ratio. And lowering the noise by just focusing on, okay, here’s what your customers are telling you. Choose what your internal sales team is telling you. I’ve taken all the stuff together, and now I see a picture where I can start morphing your DNA to where you can take advantage of this stuff, as opposed to just doing what somebody asks for or the next logical thing, which may not be logical at all. It just seems to be the next logical thing to you. Does that make sense?
It does. So I want to take a quick break, but when we come back… So I’m going to give you a second to think about this. When we come back, I’m hoping that you have an example where you can sort of walk us through a sort of pre-digital DNA and the evolution. So we can see what that looks like. And walk us through sort of the steps or the thought process or the danger zones of doing that.
Because a lot of the listeners, their agency is 50 years old or 30 years old. And their clients, obviously, are demanding all of this digital prowess and expertise. And so, there are some agencies that are really struggling with how to make this transformation to, rather than sort of cobbling together digital resources or tools or whatever. It’s not baked into who they are and they know that it needs to be. So I would love an example of that, when we come back from this quick break.
If you’ve been enjoying the podcasts and you find that you’re nodding your head and taking some notes and maybe even taking some action based on some of the things we talk about, you might be interested in doing a deeper dive. One of the options you have is the AMI remote coaching. So that’s a monthly phone call with homework in between. We start off by setting some goals and prioritizing those goals. And we just work together to get through them. It’s a little bit of coaching. It’s a little bit of best practice, teaching and sharing. It’s a little bit of cheerleading sometimes. On occasion, you’re going to feel our boot on your rear end. Whatever it takes to help you make sure that you hit the goals that you set. If you would like more information about that, check out agencymanagementinstitute.com/coaching.
Okay, let’s get back to the show. All right, we are back with Chris Aarons. And we are talking about digital DNA of our agencies and by extension, the digital DNA of our clients. Because I think if we can wrap our head around this, and especially if, depending on where you are on the spectrum now, if we can sort of master it in our own shop, it becomes something as we sort of put on more of that consultant hat that Chris was talking about earlier in the conversation. It’s something that we can talk to our clients about and be helpful in that space as well.
So Chris, before the break I had said to you, it’d be great if you could give us an example of an organization that has made the transformation so we can sort of see it and you can sort of point out some of the hot spots or places to think about, that would be great.
Okay. So I think the best way to look at this is that first of all, digital transformation is not a technology problem, okay? I know that’s going to shock a few people who may be listening, that the technology is ubiquitous. It’s largely very reasonable. Nine times out of 10, your clients have so much of it. They don’t know what