Over the last couple of years, many agencies have started reaping the benefits of embedding an account executive in a client’s office. By that I mean someone from the agency team literally has a desk or office in a client’s business for a set amount of time every week. This trend was growing prior to the pandemic and actually held its own during the work from home period of 2020. Now that more agencies and clients have returned to the office, this becomes a very viable option again. In this episode, I want to talk about what this means, how to do it well, and both the risks and value of doing it.
As an agency owner, your brain might jump to several potential problems that make you leery of such an arrangement. Truth be told, there are several benefits for your shop and your client. If done well, this can be a huge win for you.
It takes a bit of a learning curve, as well as putting the ideal employee with the right client. But, when done correctly, you create a really great hook that makes it nearly impossible for a client to consider taking their business anywhere else. In the process, as the agency owner, you cultivate a better, stronger, more connected relationship with the client organization.
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:
- Why clients love embedded employees
- How embedded employees guarantee that business’s growth
- The dark side of embedding employees
- How to protect yourself from having the employee poached
- Ways to help your embedded employee stay loyal to the agency
- The ideal employee to embed in a client’s office
- The benefits to the agency of having an embedded employee
Ways to contact Drew McLellan:
- Email: [email protected]
- LinkedIn: www.linkedin.com/in/drewmclellan
- Website: https://agencymanagementinstitute.com/
Tools & Resources:
- My Future Self Mini-Course
- Sell with Authority (buy Drew’s book)
- Facebook Group for the Build a Better Agency Podcast
About the Author: Drew McLellan
For 30+ years, Drew McLellan has been in the advertising industry. He started his career at Y&R, worked in boutique-sized agencies, and then started his own (which he still owns and runs) agency in 1995. Additionally, Drew owns and leads the Agency Management Institute, which advises hundreds of small to mid-sized agencies on how to grow their agency and its profitability through agency owner peer groups, consulting, coaching, workshops, and more.
- Leading agency owner peer groups
- Offering workshops for agency owners and their leadership teams
- Offering AE Bootcamps
- Conducting individual agency owner coaching
- Doing on-site consulting
- Offering online courses in agency new business and account service
Because he works with over 250+ agencies every year, Drew has the unique opportunity to see the patterns and the habits (both good and bad) that happen over and over again. He has also written several books, including Sell With Authority (2020) and been featured in The New York Times, Forbes, Entrepreneur Magazine, and Fortune Small Business. The Wall Street Journal called his blog “One of 10 blogs every entrepreneur should read.”
It doesn’t matter what kind of an agency you run, traditional, digital, media buying, web dev, PR, whatever your focus, you still need to run a profitable business. The Build a Better Agency Podcast presented by White Label IQ, will show you how to make more money and keep more of what you make. Let us help you build an agency that is sustainable, scalable, and if you want down the road, sellable. Bringing his 25 plus years of experience as both an agency owner and agency consultant, please welcome your host, Drew McLellan.
Hey everybody, Drew McLellan here from Agency Management Institute. Welcome back to the Build a Better Agency Podcast, I’m super excited you’re here. I’m always grateful that you carve out the time to hang out with me. I know how busy you are, and so I am thrilled that we’re getting to hang out together today. Today is one of my solo casts, so as you know, if you’re a regular listener, that means I don’t have a guest with me, it’s just you and me talking about something that’s been on my radar screen for a while, that agency owners are asking me about, that I think you need to be thinking about, or at least know a little bit more about.
Before I tell you what we’re going to chat about, a couple of announcements as always. On every solo cast, we give away a seat at one of our live workshops. So all you have to do to get in the drawing is go to wherever you download your podcast episodes and leave us a rating and review. Then what I need you to do is I need you to take a screenshot of that rating and review because all of you have usernames, and so Packers Forever doesn’t tell me who you are or where your agency is. So I need a screenshot and then I just need you to email it to me. And then those emails go into a randomizer and right before every solo cast, so about every month we select a winner who gets a seat at one of our workshops. So this month’s winner is Abby Carey from Huebner Marketing. So Abby, I’ll be reaching out to you. Congratulations you or one of your compadres are welcome to join us at one of our workshops in 2021. So congratulations.
All right. So a couple other things I want to get on your radar screen before I talk to you about what the meat of the episode is, first by now, if you are a regular listener, you know that the Build a Better Agency Summit is something that I’ve been dreaming about doing for the last couple of years. There is no conference out there for small to mid-sized agencies. And I want AMI to put on that kind of conference, a conference where the content is geared towards agencies of five people or eight people or 25 people or 50 people, not 300, 500 a thousand people. So all of the speakers are people who work with small to mid-sized agencies. All of the learning is going to come in a variety of ways, we’re going to have keynote speakers and breakouts.
We’re also going to have these round tables which I’m super excited about. So imagine you and eight other agency owners sitting around and a table with a subject matter expert, who’s going to help you learn how to build your wealth outside the business, or grow your leadership team, or create an MSA that will protect you or how to leverage research in your thought leadership, all kinds of topics like that, cashflow, getting your agency ready to sell, all kinds of topics that are going to be geared just to and for you. And at those round tables, our goals there is for you both to learn, but also to talk about what you’ve already been doing. So you will be teaching and learning at the same time, super excited about it.
So the conference is, as you know, we’ve had to move it a couple of times because of COVID, but the conference is August 9th, 10th and 11th. The 9th is reserved for AMI members. I think it’s at the gold level and above and the 10th and 11th is open to everybody. So we are going to have two full days of amazing content, speakers, some that you’ll recognize their name immediately, others that may be new to you, but are subject matter experts. Many of them, you have met in some way here on the podcast, but you’ll get to interact with them, you’ll get to ask them questions. On Tuesday night, you’re going to get to go to a bar and hang out with them with free cocktails and appetizers and darts because who doesn’t want to combine alcohol and darts, right?
So it’s going to be a great event and we are selling tickets, now. Please come join us. If for some reason we have to move the event again, your ticket will get moved as some of you who have had their ticket since, gosh, I think we tried to start doing this in May of 2020. But anyway, we’re going to, I gathered together, we are going to share best practices, we are going to make new connections and I am super excited to hang out with you for a couple of days. So please head over to the Agency Management Institute website, and right at the top navigation, it says BABA Summit. So Build A Better Agency Summit and we would love to have you there. Okay?
The other thing I want to talk to you about is one of the conversations I’m having again with agency owners is that whole idea of what role do we play as agent owners in racial equity, in diversity inside the agency business, inclusion, all of those sorts of things. So just a reminder last summer, we put together a report card that will help you sort of assess how your own agency is doing on this regard. So you can go over to agencymanagementinstitute.com/racialequity, and you can download that report card. And obviously you can modify it to better suit your agency if it needs some modifications, but at least it’s a starter to get you going to thinking about how you would like to have your agency participate in the goal of having more diversity inside the marketing and agency world, and in your own shop, if that’s something that’s important to you. All right?
Okay. So here’s what I want to talk about today. So if you remember every summer, one of the podcast episodes, I talk you through the trends that I’m seeing over the course of the year, and in 2019 and in 2020, we talked about a trend of embedding employees. And what I mean by that is you putting one of your employees inside your client’s office. So basically them having a desk or an office at your client’s place of business.
And what I was saying to you even this summer was, this is a trend that is growing. Interestingly, there was a little bit of a lag physically about your employees being physically in your client’s office during COVID of course when nobody was in the office, but two things, one that didn’t mean the employee wasn’t embedded and two, now that more and more people are going back to work back to the office, I know we’ve all been at work, but back to the office to work, those embedded employees are going back in as well. I have some agencies that have had their employees back embedded in the client’s since late 2020.
So let’s talk about what this means and how to do it well, and the sort of the value of it. So the concept is basically that your client needs so much more help, participation in internal meetings, strategic thinking, just the kind of conversations that happen when you walk by somebody in the hallway that your client wants your employee to actually be onsite with them. This is becoming more and more kind of a norm. I have some agencies who their client is in a different market than the agency is located, the brick and mortar part of the agency, and so in that case, that person actually moved to the different city to live in that city, so they could go to work at the clients. The problem with that version is that that means that that employee is embedded five days a week. And we’ll talk about in a minute about why that’s not a great idea, but I do have agencies that have that, but most of you it’s when your client is local to you. And so your employee sort of splits their time between the agency and the client office.
All right. So let’s talk first about why you would ever want to do this. All right? The biggest reason why you would want to do this is because it absolutely strengthens your relationship with the client, clients who love this. In most cases, it’s the agency that suggests it to the client, but in some cases, the client is requesting it. And what the client loves is they love that instant access, clients love believing that they are our favorite client, our only client. Well, this is the manifestation of that, this is you are literally in their office when they’re at work. And so they love this and they love the access to their agency person.
So from your perspective, A, it strengthens the relationship, it connotes a commitment that you have to the clients that they love. Number two, it is a premium product. So agencies are charging typically… Oh, they’re probably up-charging if you will, their hourly rate by 25 to 50% to put that embedded employee in the office. So because you know that that person is going to be solely dedicated on those days to that particular client. So it’s very profitable from the agency’s point of view. And by the way, I should say this, I guess I assumed that you were thinking the way I was, but you know what that leads to, the embedded employee is always an AE. I’ve never heard of anyone embedding a graphic designer or a writer or anyone else, it is always the person who owns the client relationship. So this AE on the days that they are embedded in the client’s office, obviously is 100% dedicated to that client. And so that comes with a premium price.
The other reason why you would want to do this is because without exception, and we have many AMI agencies that have embedded an employee or multiple employees into the client’s workplace, and without exception, they are able to grow that book of business. So the AGI that they have with that client grows pretty exponentially when the employee is embedded in the workplace. Why? Because they are privy to so many things that you’re not privy to when you’re sending emails back and forth, or you’re meeting once a week on Zoom or in their conference room. You just, as an embedded employee, you’re walking around and you are part of the ecosystem. And so all of a sudden you are meeting new people, department heads that perhaps you wouldn’t have met in a more traditional agency relationships. So it might be the department head, the HR department head, it might be the R&D department head. It might be, you might get to know salespeople better. It might be more time with the CEO, but all of those people have control over budgets. And all of those people have communications needs that they may not even think about asking the agency for help.
So what happens is all of a sudden this embedded employee gets so ingrained in the culture of the client and is attending staff meetings. And they’re hearing things like, “Oh, we’re one step away from getting FDA approval on this new drug. And then we’re going to want to launch it to the…” They’re hearing stuff that maybe they wouldn’t hear for another month or two months or six months, if they were in a more traditional relationship with the client.
And so a great AE, and we’ll talk in a minute about what kind of person you should send into the client, but a great AE will hear those opportunities and begin to cultivate relationships and start making suggestions, start offering their opinion about how the client should pursue whatever this new opportunity is. And next thing you know, they’re saying, “Oh, well, could you guys do that for us?” “Yes, we could.” Right? So you can see how that works. It is a very fruitful relationship for the agency for a lot of reasons.
Now, it does come with some risks and consequences. So I want to talk about those, but first let’s take a quick break and then I’ll come back and we’ll talk about the dark side of embedding employees.
When it comes to conducting a client satisfaction survey, your agency has three choices. The first one is adopted, don’t ask, don’t tell policy and just roll the dice. Your second option is to do the study in house. And the third option is to use a third party to conduct your client satisfaction survey. If you decide that you’re ready to invest in protecting your client relationships and improving your win and keep ratios, we believe there are some benefits of using AMI as your third-party research partner. Number one, we know emphatically that your clients will tell us things that they just won’t tell you. The reality is they’re going to speak more freely if they’re not talking to you directly, they don’t want to hurt your feelings, and they don’t want to get into a big conversation about it. So a third party is a safe place for them to share their real feedback.
The second is that at AMI, we don’t have a bias about any particular client. We don’t know if you like them, don’t like them, if they’re a pain, if they’re your favorite. And so, because we understand the agency business, but we don’t come into those conversations with any preconceived notions, we can absolutely give you unbiased and unfiltered information based on what your clients tell us.
And you know what, we know agency clients. We can hear what they’re saying, and we know which threads to pull on as we’re talking to them, to get more information for you and more insight. Your clients will be comfortable talking us because we speak their language. If you’re interested in having AMI, do your customer satisfaction survey, head over to agencymanagementinstitute.com and look under the, How We Help section of the website to learn more. All right, let’s get back to the show.
All right, welcome back. We are talking today about embedding an employee inside a client’s office and the pros and cons of that. And we talked before the break about some of the pros that are to the benefit of the agency, but I want to talk a little bit about some of the cons. And then I want to talk about the kind of employee that you want to put into this role, if you have the opportunity.
So some of the cons are, as you might imagine, and I’m sure as soon as I said, embedded employee, some of you, some part of your brain went, “Nope, because they’re going to poach my employee.” Prior to COVID, prior to the economic downturn, for the last two or three years, you guys have been battling, battling to find great employees. And every time you get a great employee and you get them trained and ready to roll, they get poached by somebody, either a bigger agency or in many cases by your own clients. So I get that you are gun shy of giving your clients an even bigger reason, an even more access to your people because you’re afraid they’re going to poach them. And it’s a real fear. It certainly is something that you need to guard against.
So one of the things you need to do is you need to work with your attorney to make sure that you have an agreement about how this embedded employee is going to be handled. So it’s an agreement that gets to how you’re going to be compensated, what your employee can and can’t do, the fact that all of the employees benefits and all of that still come from the agency, that they are your employee still. But one of the key clauses in that agreement has to be a no solicitation clause. So basically that’s going to be a reciprocal clause that says, “We’re going to be in your hen house. And you probably want to know that we’re not going to try and poach somebody from your internal marketing department or whatever it is. So we give you our word that we’re not going to do that. And you need to give us your word that you are not going to try and hire our embedded employee to become an employee of your company.”
Many agencies will put in that cause, or that section of the contract, some language around, if one of us chooses to violate this agreement, then we agree to pay the other a finder’s fee as though they were acting as a recruiter. And you can make that finder’s fee pretty steep, because the odds are, you’re not going to poach one of their employees. The more likely risk of course is that they’re going to poach your embedded employees. So you might want to put a $25,000 price tag on that or whatever you want to do, but you’re going to want to protect yourself. So that’s concern number one.
The other thing that sometimes happens is that the embedded employee, especially if they’re embedded five days a week. So remember I told you, I have an agency where the brick and mortar facility of the agency was in a different state than this particular client. And so they literally had one of their employees move to another state so that they could be the embedded employee. Well, that was a bad deal for a plethora of reasons.
Number one, that employee was working on the client site five days a week. That is not a good idea. No more than three days a week. You want the employee to stay connected to and loyal to the agency. So in this case obviously, that employee had no agency to go back to. Yes, he could Zoom or he could sort of reach out by phone, but he was not going back. He was not a part of the culture of the agency. He was not chatting with people in the break room or things like that. So he became very ingrained in the client’s business and really was for all intents and purposes behaving like they were paying his paycheck. And so you don’t want an employee to get that embedded. So embedded as good, that embedded is not good.
So you want an employee who is onsite with the client, maybe three days a week, max, but is coming back to the agency and reconnecting with their coworkers, spending time with the agency, participating in whatever social activities you have. You want that employee to remember where they work and where their loyalties lie, right? So again, you need to have a clause for no poaching and you need to make sure that that employee is not there five days a week.
You need to also make sure that the employee is incented in a way that they are reminded that they work for the agency. So what a lot of agencies will do is they’ll say, “Okay, well, the book of business is, I’m just going to make up a number $250,000, anything above and beyond $250,000 that you can get the client to bite off on because you are there as an embedded employee. There’s a spiff in that for you.” So you want to reward the employee for bringing work back to the agency.
Now, you also are going to obviously tell the employee that sometimes they’re just there to offer their opinion or give some counsel or be a good listener. And other than being paid for their time on site, maybe a project is not going to be born out of that conversation. So they also have to be mature enough that they don’t constantly go looking for projects where projects don’t exist, but you definitely want to anchor them back to the agency. So with money, with connections, with time spent at the agency, so they remember where their loyalties are. All right?
Another downside of this for you is that that person is pretty much dedicated to that client 24/7. Even when they come back to the office, they are going to be opening jobs and meeting with the creatives and doing all the things that they would normally do. But now they can do it in a very compressed timeframe. So they are not going to, in most cases, have a lot of room on their plate for multiple clients. So this is not something that you want to do for a little client, this is not something you want to do for a client that maybe takes up 10 hours or 15 hours a week of an employee’s time, or you need to modify how many days your employee is onsite.
So let’s say this is a client that is a smaller client, but they would occupy maybe 20 hours a week of your AE’s time as a general rule. So maybe you embed them for two days and you know they’re going to spend those other four hours or more back in the office, keeping the work moving. But in that case, maybe they could take on one more client because they could deal with them on the other three days. And it’s not like they can’t take a call from another client while they’re onsite. But the reality is they’re going to be… Remember what your client’s life is like. Your client’s life is meeting, meeting, meeting, meeting, meeting, and then a break and then more meetings.
And so well, that’s going to be what your employees life is like too, they’re going to be sucked into all kinds of internal meetings. So they’re not going to get a lot of work work done on the days they’re embedded, they’re going to get their work work done, opening, doing creative briefs and meeting with the rest of the team and moving projects through the agency and uploading stuff into your project management system. They’re going to get most of that done on the days that they’re back in the shop. So know that they’re going to be kind of inaccessible to you because they’re going to be in meetings all the time, much like your clients are inaccessible to you a lot of times, and they’re going to get the lion’s share of their work done either in off hours or on the days that they’re back in the office. So you have to sort of know that they’re going to be pretty inaccessible to you as well.
All right. So let’s talk a little bit about what kind of an employee do you want to have as an embedded employee. And this may be where you have success, or you don’t have success, right here. And embedded employees should be somebody who believes the agency colors. They have to be somebody who is super loyal to the agency, who is very focused on growing that client’s business for the agency, who culturally has some strong ties to the agency. So maybe some of their closest friends are at the agency or they’re on the social committee or something that they should be people who have been with you for a while, you know them and you trust them implicitly. They should be somebody who has the agency’s best interest at heart. You have to be really rock solid about their loyalty to the agency. Okay?
Then the next thing they have to be, is they have to be somebody who is really good on their feet, because they are flying without a net when they are on the client side and they are embedded in that office. They are in meetings, they’re being asked their opinion, so it can’t be somebody who always looks at you to see what you want to say first, or somebody who takes forever to formulate an idea. They have to be pretty good off the cuff on the fly, kind of a good spit ball, if you will, because that’s the role they’re going to be put in all of the time, over at the client’s place. So you want them to be able to improvise and to be a great brainstorm partner, to be a great idea generator, to ask really, really good questions. Because they’re alone out there, they’re flying solo. And so they need to be able to be the very best of what your agency is supposed to be for a client. They need to be able to embody that when they are onsite at the client’s.
Another thing you want for this AE is this person has to be super detailed because they are running back and forth between two workplaces. And they have to make sure that the balls keep moving on your side while they are inside the client’s office. They have to be able to capture all the details out of meetings and transfer those to the rest of the team. This is somebody who’s pretty buttoned up. So in many cases, when you think of your AE troop, if you will, this is probably your best AE. So again, this is not an opportunity you want to waste on a small client or an unprofitable clients, this should be an opportunity to grow a really great profitable client with a really great and successful AE. So you want to marry those two together.
Another couple of things that you want with this employee is that you, the agency owner need to stay very connected to this employee. You need to make sure that they know that they have your ear, that if they run into something weird on the client’s side, that they immediately are going to talk to you about it. And that they are going to run into things that they’re not sure what to do or what to say, and they need access to you. You don’t want them to feel like they are completely disconnected from the agency’s leadership and the opportunity to get some support. Yes, they are flying without a net, but you need to make them feel like they are still safe and they’re supported.
This is also somebody who you need to have confidence is if something weird happens, like they get approached about a job or something else like that, that they are going to come and talk to you about it immediately. So again, this boils down to not only their loyalty to the agency, but their maturity, their professional maturity, don’t put a kid in this role. This is a role that needs somebody who’s been around the block for a little bit, who can hold their own, and who is going to have your back.
All right. So let’s talk a little bit more about the kinds of things that can happen when you embed an employee. So one of the best things that happens is if your employee can get on planning committees or special interest projects, or can be a part of a strategic planning. So all of the times that we talk about, “Man, we want to be with the C-suite. We want to sit at the table while they’re making plans, while they’re figuring out what they’re going to do.” That’s what this role is all about, is getting that person a seat at that table. And so you want that person to be volunteering, to serve in those sorts of roles as often as possible.
And again, part of having sort of that initial conversation with the client is being really clear about what they want this person to do and what you need that person to do. And having a clear expectations across the board so that your employee isn’t getting pulled into things. For example, your employee should not be on the social committee at the client’s, that is not going to generate you revenue. And although it may be fun for him or her, that is not where you want them spending their time. But in a CEO briefing, absolutely, they should be there.
So part of this, this is not going to go perfectly from the get-go. So you’re going to have to keep tweaking and massaging this to make sure that it is working for you and working for the client. This is also another opportunity for you as the owner of the agency or somebody in a leadership level to cultivate a better, stronger, more connected relationship with the business owner or CEO of the client organization. Because to make this work, there’s going to have to be a fair amount of communication back and forth between you about, “How’s it going? Is he or she doing something that you’d rather they not do? Are there other opportunities that you would like him or her to be in the place of?” Like you’re going to be probing for how’s it working? How can we make it better? And hopefully the client is going to be coming and going, “You know what? It would be really great if the embedded AE could sit in this role.” Or, “Here’s where we’re going to put that embedded AE’s office or desk, because we want them to overhear this or the other thing, or be able to participate on the fly in this, that, or the other thing.”
So this is going to be a work in progress. I would say that most agencies and clients have it dialed in after a couple of months, two, three months, none is feeling like it is really cooking them. And both the client and the agency are feeling an immense relief and value from the new setup and the relationship.
A couple of other caveats, you are going to want to make sure that you give this employee some breaks. What we forget sometimes are that client’s places of work are often much more political and much more sort of backbitty than agencies are. One of the things people who come from the client side over to agencies will often say is, “Oh my gosh, this is such a fresh breath of relief that I don’t have to worry about, speaking my mind or suggesting an idea that might be not a great idea. And then being shot down and mocked by my coworkers. I feel much more free here in the agency environment than I could on the client side.”
So your employee, especially if they’ve worked in agencies all life, that’s going to be a culture shock. So A, you want to talk to them about it. You want to warn them about what that environment is going to be like, but B, you want to make sure you’re checking in with them to see how they’re surviving in the shark cesspool that is oftentimes corporate America or corporate wherever your country is.
So remember that that’s a pretty big culture shift. And so your AE is going to need to be able to reach back out and kind of have the touchdown of the agency and you to sort of remind them why they are doing this, the value of it. They need to feel the value. So again, we’ve talked already about compensation packs, but they need to know that they actually belong at the agency. And that this is sort of combat duty for them for a couple of days a week. So be mindful of watch for fatigue, watch for stress, watch for them getting sucked up into the politics.
Another thing you have to be very careful of is when an employee has been embedded for a while, if you haven’t brought them back to the agency enough, or they haven’t participated in the cultural activities, and they don’t feel as connected to the agency, their allegiance can shift. So if you start noticing things like the AE coming back and demanding tighter timelines or arguing about pricing. All of a sudden it’s feeling like your AE is acting like the client and is advocating against the agency for the client.
Now, an AE, on any given day, not embedded, they play the role of having to serve many masters. And so I’m always advocating in the AE bootcamps, that AEs understand that it is their job to advocate for the client, but it’s also their job to advocate for the agency. And they’ve got to find that happy middle. So sometimes that happy middle gets squished when an embedded employee has been over there for too long, and all of a sudden starts really taking it on sort of the sense that they are a spokesperson for the clients, not a spokesperson for the agency. So watch for signs of that. And that may mean that it’s time for the embedded employee to go on a