Episode 209

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Our agencies and the work we do will inevitably be impacted by artificial intelligence in the next 3-5 years. That’s just a fact. Odds are, it’s probably already changing the way you do business every day. There’s a lot of hype and buzz about jobs going away and most agencies are struggling to figure out how to keep up.

Questions of what data to use, how to analyze it, what tasks can be automated, and what AI can do for clients pop up all of the time. And it all shifts on what seems like a daily basis.

Fortunately, the agency space has a beacon to light the way into the uncharted territory of AI. His name is Chris Penn, and he is an authority on analytics, digital marketing, and marketing technology. A recognized thought leader, best-selling author, and keynote speaker, he has shaped four key fields in the marketing industry: Google Analytics adoption, data-driven marketing and PR, modern email marketing, and artificial intelligence/machine learning in marketing.

Chris is a generous guy who frequently shares his knowledge over his own podcast, Marketing Over Coffee, as well as through books like “AI for Marketers: A Primer and Introduction.” I was thrilled to welcome Chris as my guest for episode #208 of the Build a Better Agency podcast.

I barely scratched the surface of questions I had but we got a good start, talking about data analysis, keeping up with the flux of AI, and the tasks that agencies can automate to save time and money. The conversation was fascinating and I’m excited to share it with you.

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: https://www.whitelabeliq.com/ami/

What You Will Learn in this Episode:

  • What data actually looks like in the agency environment
  • The importance of hiring people with analytics and software skills to an agency
  • How to keep up with the ever-changing field of AI in an agency setting
  • Common mistakes agencies make around data and analytics
  • The most onerous tasks that can be automated using AI
  • The capabilities of machine learning and where humans come in during the process
  • What Chris does to keep current with technology in the agency space

The Golden Nuggets:

“The keyword here is repetitive. What are the things that are repetitive that you could make go faster or that you could deploy better technology for?” - @cspenn Click To Tweet “The number one way I keep current with AI is by trying to solve problems for either the company or for clients.” - @cspenn Click To Tweet “When agencies think about AI and data, they're always thinking about it through the lens of, “How can I help clients with this?” And they're probably not turning it around and saying, “Oh wait, I could use these tools for me.” - @cspenn Click To Tweet “No amount of data analysis and machine learning can dig around in somebody's head and explain to you why they did something. You have to ask them.” - @cspenn Click To Tweet “If you are truly net new, creating something from scratch from whole cloth, that is your value add as a human.” - @cspenn Click To Tweet

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Ways to Contact Chris Penn:

Speaker 1:

If you’re going to take the risk of running an agency, shouldn’t you get the benefits too? Welcome to Agency Management Institutes, Build a Better Agency Podcast presented by White Label IQ. Tune in every week for insights on how small to midsize agencies are surviving and thriving in today’s market. We’ll show you how to make more money and keep more of what you make. We want to help you build an agency that is sustainable, scalable, and if you want down the road, sellable. With 25 plus years of experience as both an agency owner and agency consultant, please welcome your host, Drew McLellan.

Drew McLellan:

Hey, everybody Drew McLellan here with another episode of Build a Better Agency. We are going to dig into technology today. We’re going to talk about math, and all kinds of things that on the surface you think you don’t want to talk about, but I think actually you’re going to find it fascinating. Before I tell you a little bit about our guests and we jump into the conversation, just a few reminders. First and foremost, if you have not already grabbed a ticket for the Build a Better Agency Summit, May 19th and 20th of 2020. I know it seems very far away, but honestly it really is not. And the tickets are going fast, which is good news for me. I want you to be there. So remember we only have room for about 220 agency owners or leaders. And at that point we have maxed out the space.

So if you think you want to attend, please go over to the Agency Management Institute website< and click on the NAB where it says BABA summit for Build a Better Agency Summit. And you can read all about the speakers and get registered. Another thing I want to remind you about is remember that every week, we’re giving away something from either a podcast guests, or a lot of them write books or have courses or we’re giving away something from AMI. Like a seat in one of our workshops. And so all you have to do to be eligible to win one of those is go over to agencymanagemeninstitute.com/podcastgiveaway. All we need is your name and email address, and you are in the drawing forever and ever.

So even if you’ve already won, you are still in the drawing and you might win again. So take advantage of that because we really do give away some pretty cool stuff, and we are giving away some workshops in the coming weeks. So now would be a great time to head over there to do it. Also, I just want to put on your radar screen some of the conferences or workshops that we have coming up. Money Matters, where we spend two days talking about financial metrics, why you aren’t making money even though you’re busy, billing practices, how to know when you actually can afford to hire another person, tax strategies, all that kind of stuff for two days.

We’re going to do that on October 16th and 17th in Orlando, Florida. And then we’ve got two workshops in January that I want to make sure you know about. First one is building and nurturing your sales funnels. So that’s going to be all about how do you get someone’s attention and then keep their attention for as long as it takes for them to be ready to buy. As and you’ve heard me say it could be a day or it could be a decade. What are you doing to make sure that you stay relevant and interesting to them for that entire time so that on the day they’re ready to buy, you are top of mind. That’s going to be January 23rd and 24th.

That’s a Thursday, Friday, and then Monday, Tuesday of the week right after, Mercer Island Group is coming back and they’re doing a brand new workshop, brand new content. They have been studying the buyer’s journey that a prospect goes through, and the whole workshop is going to be, what are the milestones in that buyer’s journey and how can we win their attention and their affection and their interest at each of those stages? So it’s going to be fascinating and I’m super excited about it. That’s January 27th and 28th. So you could come to the workshop Thursday and Friday, play at Disney World Saturday and Sunday, and then do the workshop Monday and Tuesday. That doesn’t sound awesome, does it? I think it does.

So join us if you can for Money Matters, build a nurture your sales funnel or the prospect’s buying journey. We would love to have you there for any of those or all of those, and you can register for all of them on the Agency Management Institute website. All right, let me tell you a little bit about our guest. Although I suspect most of you know Chris Penn. So Chris Penn is probably one of the leading authorities on analytics, digital marketing, and marketing technology. He is a very respected thought leader. He’s a best-selling author, and keynote speaker. I just recently saw him speak, and he was just brilliant at the recent MAICON conference in Cleveland, but he is known as being a person who has literally shaped four key areas in the marketing industry. Google Analytics, adoption, and usage, data-driven marketing and PR, modern email marketing and AI and machine learning in marketing.

So he has this depth of knowledge around how we can take advantage of some of the technology that’s out there to actually improve the results we deliver for clients, and our own bottom line. I’m super excited to have him on the show. You also probably know him from he founded Pod Camp Conference. He is the co-host of a great podcast called Marketing Over Coffee. So I’m guessing that you have bumped into Chris at some point in time, read one of his books. I highly recommend AI For Marketers: a Primer and Introduction, and all of his other books like The Marketing Belt books are spectacular.

So I can’t say enough good things about him other than I know that I’m going to run out of time. There’s so many questions I want to ask him on my behalf and for you that I want to jump right into the conversation. So let’s do that. So without any further ado, Chris, welcome to the podcast. Thanks so much for-

Chris Penn:

Thank you for having me.

Drew McLellan:

So I’m guessing most of my listeners are very familiar with your work and are probably already fans, but just for the few that are not familiar, because you have an interesting background. And you are very much in alignment with many of the listeners in terms of having an agency life. Give everybody a little background on sort of how you came to be in the position you’re in today.

Chris Penn:

Sure. My background is originally in IT. I started as IT director at a bunch of companies. Early two thousands, went to a FinTech startup, and that’s when marketing became marketing technology. And as an IT person, I moved into marketing technology. Then end of that decade. I started really getting heavy into analytics. Analytics became data science became machine learning, became AI. Around 2012, I went to an agency, a PR firm for five years and change building a marketing technology practice in there. Then towards the end of that, I realized that that agency was going one way and I wanted to really focus in on AI and machine learning. And my account director split off and we became our own company. We founded Trust Insights, which is a data science consulting firm for marketers. And so that’s how we ended up here today is focusing on. We’re building an agency essentially for data science for marketers.

Drew McLellan:

I’m assuming that a lot of your clients, or at least some of your clients today are agencies, yes?

Chris Penn:

Yes, that’s right. We have brands and agencies. Pretty much anybody who has data and wants to make more money with it.

Drew McLellan:

Okay. So let’s just start there. We talk about data and big data. I don’t know if I’ve ever heard anyone talk about little data, but we use that word like everyone knows what it means. So for the non-techies listening, define that for us in the framework of our agencies and our clients?

Chris Penn:

Data is information. That’s the easiest way to frame it, right? And there’s all these different kinds. You mentioned big data and the running joke in the data science community is big data is that anything that doesn’t fit in an Excel spreadsheet. So if it’s in Excel it’s data, if it’s bigger than Excel it’s big data. And that’s actually not a bad way to look at it, because when you look at the way agencies use data right now, for the most part, the most sophisticated they get is typically an Excel spreadsheet. In that comes someone’s terrible pie chart in a PowerPoint.

So, companies have data and you’re surrounded by it. Every time you have a client call, you have data. If you are recording with permission, a client calls, you can take that audio, load it to a an automated transcription service, turn it into text, and then you can analyze, for example, your client calls. If you had say a year’s worth of client calls from all your different clients, and at the end of the year, you had a list of the clients that you’re retaining, and the clients that turned over. You could then run an analysis for example, and say, “Okay, what do all the calls, if you analyze the content of those calls, what are the calls have in common for clients we kept? What do they have in common for clients we didn’t keep?” And you have all this other data.

Who’s on the team? Is there an account manager? There’s certain account managers who keep clients like crazy or their account managers where there’s a lot of churn. You’re looking for patterns in your data to help you make better decisions. To say, “Yes, this team, and this topic is a winning combination for client retention, client upsells, things like that.” This combination over here, we’ve got to change some of them because clearly there’s a lot of churn, lower margins, unhappy team. That’s the way agency owners, and executives should be thinking about data, is not only the clients stand and what to do with it to help the clients be more successful. But what data are you analyzing internally?

One of the things I thought was most broken about the agency world when I was in a more traditional agency, was that so much is done on gut instinct, or feelings or the phrase I hate most of all, “This is the way we’ve always done it.”

Drew McLellan:

Right. Of course.

Chris Penn:

And not based on information you have that you could be using to make better decisions. I’m hoping even just the thought of, “Well, gosh, if we even just analyzed almost every team in the PR firm I worked in had like the account coordinator or the intern taking notes on every call.” Does anyone analyze those notes over time to see, “Hey, these are the things that keep coming up on client calls over and over again.” Maybe there’s even a new practice here that we could make some extra money on.

Drew McLellan:

Right. Yeah. I’m guessing you’re right. I’m guessing when agencies think about AI and data, they’re always thinking about it through the lens of how can I help clients with this. They’re probably not turning it around and saying, “Oh, wait, you can use these tools for me.”

Chris Penn:

What’s the joke that we always talk about with clients, with our agencies. It is the cobblers [crosstalk 00:11:35].

Drew McLellan:

Oh, I hate that phrase. Hate it, hate it, hate it.

Chris Penn:

But it’s a hundred percent accurate.

Drew McLellan:

Absolutely.

Chris Penn:

Exactly. So from a data perspective, what are you doing to grow your business?

Drew McLellan:

And for the agencies out there who are most of them, by the way, who are still scratching their heads saying, “I know I need to learn this, but I don’t even know where to start.” It does make sense that they would start experimenting on themselves, right?

Chris Penn:

Exactly. All of the innovations that we’ve come up with for our clients, originally the problems that we had. So I have this thing called the digital customer journey map. We had come up with some fancy name for it. But it’s just a chart. It’s a chart that shows you what digital channels contribute most to conversions, and in what order, because I needed to know that. I needed to know that for our company. Like how important is organic search? How important is social media? How important is speaking? And if I didn’t know that I couldn’t make decisions, but by charting it out with some custom built software, now I can go, “Oh, I should be doing more of this, and I shouldn’t bother with Instagram because it’s not working here.”

Drew McLellan:

How did you gather the… Like what were the data points that you use to build that out?

Chris Penn:

The first and most important one, and the one that every agency owner and operators should be doing, is what business problem do I have? In my case, the business question I had was what’s working. We’re a small startup, we’re three people. We have combined 120 hours a week, right? How do we allocate those? Figure if only 25% of that’s going to be allocated to growing the agency. The other 75% goes to clients. So, what do we do with that 25%? Well, that was our question. And so then the next step after you do the business requirements, the problem you’re trying to solve is what’s the analytic approach? How are we going to try and model this? And then you get to data requirements.

What do you have access to? For a lot of agencies they are fortunate in that they pay for a lot of tools on behalf of clients that they could be using for themselves. There’s a ton that’s free. So Google Analytics, totally free. If your agency is not using web analytics of some kind, Google Analytics is the gold standard. You’re doing it wrong because it’s huge amount of insight. You have email, you have social media data, you have news data. You have video data, you have all the stuff that your doing or should be doing. That’s your starting point. Then you explore it, you model it, and you make decisions on it.

Drew McLellan:

So the modeling part, you have a technology background. You are a data scientist. So for you, this is like me saying, “Hey, Chris, how do you make a bowl of cereal?” And you’re saying, “Well, Drew, you put the cereal in the bowl, you pour the milk over it and you’re done. Move on.” But for a lot of people who came up through the agency ranks in their account people or their creatives, they went into the agency business to avoid math and data, right? Now the realization on all of us is, “Oh, crap, I have to learn this stuff.” So when you talk about the modeling, are there resources or places that we could go to look at examples and go, “Oh, I can see how I could plug my data into this example and wallah, I’m going to get some answers.”

Chris Penn:

It depends on how you define the word model. In the context I’m using it, I’m using it in terms of machine learning. And there is a way to take a pre-trained model and tune it, but that’s pretty far down a technical rabbit hole. The number one thing that as an agency owner, especially if you don’t have a quantitative background should be doing is all your new hires should have a balance of creative and the quantitative. Every new hire or at least a substantial number should be able to do basic statistics. If someone doesn’t know how to use R or Python or SPSS or SAS or Tableau might not be as good a hire. Once you have that talent on staff, then you can start asking for their help to say like, “Hey, here’s a question I want to answer too, what impact does Instagram have on my agency? What impact does LinkedIn have on my agency?” That person should be able to help you with, or if you can’t have the head count, then you find a partner, a vendor to help you do it with.

There aren’t a ton of agency specific pre-made models, because everyone’s is going to be different. Even your own models change over time as you do different things and you just try different things. But there are clearly defined best practices and software that can make the task easier. I would compare the software, the solutions out there to kitchen appliances. A Kitchen aid stand mixer is going to make whipping eggs, and kneading dough a heck of a lot easier than doing it by hand, but you still need to know how to cook. If you pour dough in there, your not going to have a good time.

Drew McLellan:

And this is part of what you do with your clients, right? So there was a case study on your website about a tracking recruiting firm. Because I think that was a great example of like, “Here’s part of the problem. I think when people hear machine learning and AI, agencies are wrestling with, how do I apply that to actual things we do for clients?” I thought that, that case study that very brief case study you got on your website, was a great example of like, “Oh, here’s how we thought through this problems.” Can you just walk us through that?

Chris Penn:

So this is one, I assume the one we’re talking is the recruiting one. This agency, it’s a truck driving agency actually. It was recruiting drivers, and one of the things that they said is we don’t know why are our applications are down? We’re not getting as much conversion as we thought. What we did was we took all the job postings that they were recruiting for, and analyze the words and phrases and language that they used in those job postings. Then we looked at the calls from their call center. No, 17,000 audio recordings. We had machine learning transcribe those calls to written texts that could be analyzed the same techniques that we did for the job listings.

Then we put the two side by side and said, “Look at the words and phrases that are in your job listings.” CDL, class this, class license, this decoration, this whatever. And then look at the conversations that the drivers are having with the recruiters. Starting pay, pay per mile, weekends, vacation, what type of loads are you carrying? What drivers were saying, and what was in the job ads, weren’t even dining at the same restaurant. So of course, if you’re a driver,