Episode 416

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With new client acquisition at an all-time low, it’s more important than ever to focus on growing your existing client base. In fact, 60 to 70 percent of your net new revenue should now come from existing clients to continue being profitable.

This means it’s time to teach your AE’s how crucial it is to know how to navigate agency math, foster agency growth, and sell new, innovative ideas to your existing clients. Many AEs don’t realize it’s their job to do these tasks, which means there’s room for improvement from agency owners to teach them these skills so your agency can continue to grow in a difficult economic time.

In this episode, we’ll cover topics like the roles AEs play in agency growth and growing existing clients, how to adjust your work scope over time to remain profitable, the importance of bringing innovative ideas to your clients, and many more actionable items for your team to learn and grow from.

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.

existing client base, AEs

What You Will Learn in This Episode:

  • How to get 60 to 70 percent of your net new revenue to come from existing clients
  • The cost of acquiring new clients over growing existing ones
  • How to adjust a growing work scope with a client over time
  • The importance of teaching AEs agency math and how we make money
  • Where AEs need to step up to help grow the existing client base
  • Allowing clients to talk about the problems they need to be solved
  • How we frustrate our clients by being too timid
  • Being a catalyst for bringing experts together to solve your client’s problems

“Acquiring a new client is anywhere from 5 to 25 times more expensive than growing an existing one.” - Mark Riggs Click To Tweet
“We work with these agencies over time to change muscle memory because with the way we've been trained is to bend over backward, give it away, and we end up over-servicing, which eats into AGI.” - Mark Riggs Click To Tweet
“You have to write defensible scopes of work, and you have to teach your people how to defend them.” - Mark Riggs Click To Tweet
“So if you highlight all the things that you're solving and you're immersed in the business, you should also be able to articulate all the problems you're not solving.”- Mark Riggs Click To Tweet
“We always talk about operational awareness. If I know how the business operates, operational awareness leads to observational excellence. And observational excellence will lead to growth.” - Mark Riggs Click To Tweet

Ways to contact Mark:


Hey, before we get to the show, I just wanna remind you that we have created a private Facebook group just for you, our podcast listeners. There are almost 1500 agencies, agency owners, inside that Facebook group every day talking about what’s going on inside their shop, asking for resources, gut checking decisions, talking about everything from pricing to hiring, to biz dev. All kinds of things are happening there. We’re starting conversations. You guys are starting conversations. What I love about it is the community’s coming together and sharing resources, encouraging each other, and just sort of having a safe place to talk about what it’s like to own an agency. So all you have to do is head over to Facebook, search for a Build, a Better, Agency Podcast Group, or Build, a Better, Agency Podcast.

And you’ll find the group. You have to answer three questions. If you don’t answer the questions, we can’t let you in. But they’re simple. It’s, do you own an agency or do you work at an agency? And if so, what’s the U R L? What are you trying to get out of the group? And will you behave, basically? So come join us. If you haven’t been there for a while, come on back. If you haven’t joined, join in to the conversation. I think you’re gonna find it really helpful. All right, let’s get to the show.

Welcome to the Agency Management Institute community, where you’ll learn how to grow and scale your business, attract and retain the best talent, make more money, and keep more of the money you make. The Build a Better Agency Podcast, presented by a White Label IQ is packed with insights on how small to midsize agencies are getting things done, bringing his 25 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. Thanks for coming back. Always great to spend some time with you. Today we’re gonna talk about a really important topic. We’re gonna talk about how to think about growing the clients that you already have, which, you know, 20 23, 20 22 and 2023 have been really tough from a growing, from new client acquisition. So many agencies are really focusing more and more attention on growing their existing book of business, which, as you know, you’ve heard me say before, and you’re gonna hear me say, I’m sure at some point in time in the conversation in a minute, that you know, 60 to 70% of your net new revenue.

So of all the new money that you have in 23 that you didn’t have in 22, or that you’re gonna have in 24 that you didn’t have in 23, 60 to 70% of that money should come from your existing clients. And for most of you, that is aspirational. You’re not there yet. And so we’re gonna talk today about how, how to focus your team and your agency on growing your existing book of business. How do you, how do you get more from the clients that you already have? And you know, that is a topic where that we cover extensively in our AE bootcamps. The truth is, most of your AEs don’t understand that it’s their job to sell to their clients. You know, a lot of them balk at the idea of the word sales.

The good news is it’s not really selling. It’s really about understanding your client’s business well enough to be super helpful to bring to them ideas that will help them grow their business, which also grows our business. So we talk about that quite a bit in the A bootcamps. We give them some great tools to do that. So I wanna give you the dates of those. So the Advanced AE Bootcamp is gonna be September 14th and 15th. And the regular AE Boot AE Bootcamp is October 19th and 20th. So the October workshop is best for brand new employees, people who’ve been in the business, I’d say less than three or four years that it’s new to them. So a lot of junior AEs, project managers, account coordinators, folks like that.

And then the advanced is for folks who have been doing account service for a while. So think four or five years of experience, maybe they’re managing other AEs. We have lots of folks who come to the Advanced, a bootcamp that have 20 years of experience, but you want them to have a little bit of experience on their belt before they come to the advanced workshop. It is not a prerequisite that they attend the AE Bootcamp before they attend the Advanced AE Bootcamp. It’s really more about where they are in their career at which one makes more sense for them. So again, those dates. September 14th and 15th is the Advanced AE Bootcamp. And October 19th and 20th is the entry level AE Bootcamp. Both are held in Denver.

And we would love to have you, and if you wanna register your folks, you can head over to the A M I website Agency management institute.com, and under the How We Help tab. And you’ll see workshops, and you’ll see both workshops there. We won’t teach them again until the spring. So if you wanna get that in in 2023, the September and October dates are your only opportunity to do that. You get a discount for sending more than one person. And of course, if you’re an A Mami member, you get an additional discount as well. All right. Lemme tell you a little bit about our guests. So Mark Riggs has spent a lot of time on the agency side of our work. He was an AE. He grew books of business for the agencies that he worked for.

And then, as I’m sure he will tell you, he decided to branch out on his own and work with agencies and help them teach their people how to grow their books of business. So he took what, he spent a lifetime, a career learning, and now he’s teaching that stuff. Super smart guy really has a great track record with helping agencies grow their existing clients. And so my job is to pick his brain and get as much out of him as we can in the hour. So let’s not waste any time. Let’s just jump right in. Mark, welcome to the podcast.

Thanks, Drew. Thanks for having me. Appreciate it.

Hey, tell everybody a little bit about your background and how you came to help agencies grow their existing books of business.

Yeah, well, a couple of fortuitous bounces. You know, I, I didn’t start out in the agency business. I started out like a lot of people in, in public relations. I started out as a reporter, but with the intention of getting an education in the newsroom to get into public relations. Right? So I did that for a few years, went to grad school, ended up getting involved in the Olympic movement, which led me to meeting my first agency boss, who was on a bid committee that I was a part of for the Pan-American Games way back in the nineties. But I went to work at French West Vaughn, that’s a agency here in the, in the southeast. And Rick French and his team, David Gwen, gave me an opportunity.

And that was my first agency. And I was there for I think, seven years. And then left there, went to Mullen Low, worked in an I P G agency, got a tremendous education on brand integrated marketing. Sure. You know, with an ad agency, with a PR function. Right. Got introduced to brand planning and strategy and those things. And I was just kind of like, you know, just eating it up. Right. You know, I was just like a sponge. And then, but I’ve always been really passionate about sport. Then I had an incredible opportunity to move over to it at the time was Alan Taylor Communications. But by the time I got hired and I, and I moved for the job, it was Taylor and was there for about 10 years.

And, you know, Taylor was the original sports PR shop. You know, Alan Taylor was Muhammad Ali’s publicist. That’s how they got started. Right, right, right. So, was there for about 10 years, learned a lot about what I do now in terms of how to grow business. I think I was always kind of cut that way, and I’ll tell you a little bit about how I ended up having that viewpoint. But it was really, really important because we went narrow and deep and the, the business model, there was 15 clients, right. Go narrow and deep, find incremental opportunities. And it’s where I DeVol, you know, developed this philosophy of, of solve don’t sell. Right. If I’m, if I’m out in front of the clients and I’m taking care of their issues or helping them along the way, you know, the business really should kind of take care of itself.

Yeah. Right. It’s the same, same message that we teach at the bootcamps, the AE bootcamps is it’s your job to help your clients grow their business, which will inevitably grow your own. Right. Yeah.

No, no doubt. I mean, and that’s the beauty of what we do is a client’s challenges and problems are never completely solved. Right. There’s al there’s always more to solve, right? That’s right. Well,

So, or you solve one and that, that uncovers another. Right?

Yeah. So spent 10 years there, got some incredible brand experience, was a part of this transformation that’s now a Harvard business case study and, and lived it and saw this organizational shift and change, and just kind of soaked up as much as I possibly could and developed some really great, great relationships. And so after 10 years, you know, looking for new opportunities, I followed a former managing partner at Taylor over to m ww and worked at m ww for about 18 months. And somewhere along the way, you know, early 2018, you know, I had spent about 12 years basically, I live in Charlotte, North Carolina, but I had spent about 12 years on the road all the time.

Right, right. And was just kind of an absentee dad. And it kind of lost a passion for the, the business, quite honestly. But I always had this, this knack for growing business, and I, I, I will not lie and say I was the best when it came to new business. If you gave me an R F P, I could chew raw meat, but I, I wasn’t the guy who went out and, and beat the bushes. Right. So early 2018, I, I stepped away and wanted to spend more time at home and, and be a present father and that type of thing. And that summer I get a call from a, from a former colleague named Ann Mayer, who at this point was now the C F O of the Omnicom PR group. And she calls me up randomly and says, Hey, listen, you know, a lot of our agencies, great global agencies, but a lot of our young people don’t know how to grow business.

They’re just, they’re just really good at, you know, managing what they have, right? Yeah, yeah. Taking the order. Yeah. Could you come up and do kind of a lunch and learn type of thing? Right. And so I did. And so a few of their agency members were in the room, and fortuitous balance got introduced to Karen Van Bergen, who was president of Omnicom PR group at the time. And Brad McAfee, who’s now dear friend, but at the time was the global c e o of Portelli. And after I gave that little talk, he pulls me aside and was like, all right, how’d you really do that? Like, how’d you take small accounts and grow them into multimillion dollar accounts? And I said, oh, yeah, I just told you here’s, you know, here’s some of the philosophies. And he’s like, no, no, no. How’d you really do it?

And I said, man, listen, you know, my mom always said, you have two ears and one mouth. You should use ’em in proportion. You know, I think as professional communicators, we think people are paying for us to talk. Yeah. And for us to share ideas and constantly just, you know, and I said, you know, to me, if you’ll listen, you’ll hear opportunities. I said, but the trick is, can I quickly marry the tools I have in my toolbox with the opportunity and talk about it with a client in a natural way that feels like I’m solving a problem not selling them? Right. And so I got an opportunity with, with Porter, working with, with Brad and his team, and I started working with some very young executives.

So we, we worked for a quarter, uncovered quite a bit of organic revenue, working on eight accounts, signing me up for another quarter, and had similar success. And then I go to Brad and say, listen, you know what, it’s kind of just slapped me in the face that, you know, there’s such a power behind organic growth, you know, that, you know, it’s, it’s more profitable. It’s, it’s, you know, you’ve already done the hard part, you’ve already won the business. You know, all all those things. Right. There’s greater retention of your people and your, and your talent.

One of the metrics that we talk about a lot is that 60 per 60 to 70% of an agency’s net new income every year should come from existing clients. And very few agencies hit that mark. So, you’re right. A, it’s, it’s deeper, richer money. It’s easier to get, but for a lot of agencies, as you know, this is just a pain point where the AEs have not been trained to understand, well, first of all, a lot of times they’re overburdened, they don’t have the time to listen Yeah. And cultivate relationship with their pe with their clients. Number two, they’re so busy racing around just filling the order that they don’t, they don’t know how to invest their time in learning more about the client’s business.

And as a result, most agencies fall way short of that 60 to 70%.

Yeah. You know, and it’s, I read a stat a long time ago from Bain that, you know, acquiring a new client is, is anywhere from just like five to 25 times more expensive Right. Than growing an existing one. Right? Right. So that, that was the focus. And I, and I go to Brad and say, Hey, listen, this is not a competitive thing. I’m not, I’m not pitching you against Edelman or, you know, whoever. Right, right. I’m helping people grow what they already have. Would you help, would you mind if I pitched this service to other agencies? And he told me to go for it. Yeah. So that’s, that’s what I started doing. And pre pandemic we’re, we’re doing pretty well with it. I, it, it did dawn on me eventually that every agency owner or agency principal that I would speak to about the power of organic growth, it was Oh, yeah, yeah, yeah.

We do organic growth. You know, we, we, we grow organically. Right. And I finally learned to say, well, of course you do because you do great work somewhere along the way, you do great work. Right. And great work gets more work. Right. But what about those moments? You know, nobody bats a thousand.


You know, batting three into

Whole family. And and most agencies will say they do great or organic growth, but they don’t track it. So they can’t actually quantify it. And, and again, because we see the financials of all the agencies we serve, I am telling you it, they are not hitting the 60 to 70% mark.

Yeah. And then not only do they not track it, but they’re not intentional about it. Right,

Right, right.

And oftentimes, you know, for us, it’s, it’s the way you start with a client.


You know, it’s, you, you, you win a new piece of business. And what, what we generally do in the agency world, we jump right in. Yeah. The, the emails start flying the, Hey, let’s get ’em a couple placements to validate their decision to having hired us. But what we don’t do is sit down and discuss how are we gonna work together?


You know, hey, client, what gets you raises and promotions.

Right? Yeah. That, that actually, I think that’s like such a secret weapon. We talk about that in, in a lot of our workshops. That, that you should understand what motivates your client personally. Like, this is how I’m gonna get promoted. This is how, like, like I tell the story, we had a, we had an agency who finally said to one of their clients, okay, how do you get a bonus, a raise, a promotion? And he said, actually, one of the ways I get a bonus every year is if I do not spend my entire marketing budget. And they were like, you’re kidding. ’cause they’ve been pushing to spend all the money. Right. And so they said, okay, well, how much do you have to leave on the table to get your bonus?

And so whatever the number was, you told them. So they then built the budget intentionally to leave that amount of money so that he would always get his bonus, which made him the champion for that agency, right. All along the way. So he kept getting bigger budgets, he just, they just always knew to leave whatever, $10,000 or whatever it was in a slush fund at the end, so that he got his bonus.

Which is interesting because, you know, that’s counterintuitive what most right. Clients say, Hey, listen, I gotta spend it to the penny. That’s right. Or I won’t get, or I won’t get Right. And you’d have never known if you hadn’t asked that question.

That’s exact, that’s exactly right.

Right. But, you know, we also ask things like, Hey, how do you handle conflict? Because if you want me to be a consultant, if you want me to be a counselor, we’re gonna have reasonable conflict. And I don’t mean head banging conflict, but we’re gonna have differences, opinions. And that’s the beauty of an agency, right. You’re constantly smoothing, smoothing that, that, that stone trying to make a beautiful gym. Right. Right. So that’s along the way. I, I did realize though, that I was giving people a vitamin, not a pain bill. And so I, I sat in on this professional development thing. I was listening to this gentleman who had, had built his own consultancy and sold it. So it was all about how do you grow scale and exit? And he said, one of the top five competitors to a professional service firm is in action.


Not doing anything, standing pat not innovating. Right. Taking your clients for granted, et cetera, all this stuff. And I said, man, if I could calculate people’s in action, right? So I came up with this very simple formula that’s on our website now. People can play with it if they want, but we asked four simple questions. And what we can do is we can tell any agency how many pieces of net new business over that horizon. So we know all, a lot of these small mid-size agency owners, whether it’s two years or 10 years, they, they do want to exit at some point, get paid for their life’s work. Right. But we can tell you how many net new pieces of business you have to win to get there. Right. And it is an impossibility just about every time.

And so it really illustrates the point of that we’ve gotta teach our people how to expand revenue. And, and our joke is, you know, we’re a society of liberal arts majors. Nobody knows how to rub two nickels together until you’re pressed into duty. And if you’re really good at churning butter, eventually they put you in charge of all the butter churners. So that ad VP level, all of a sudden, you know, you’re given all these business acumen things you’re responsible for, right? Hey, now you need you to be in charge of, of margins and f t e and a g i and direct and indirect costs, and people’s heads explode. Right. So you see people either going up or going out. So our philosophy is let’s teach people the business of the agency. Right.

Because I didn’t get, I didn’t really find my groove until it dawned on me as a young AE that we were in business.

Yeah. Right, right,

Right. And I had a, I had a bumpy pass to, to that discussion, which we won’t go into here, but what it did lead me to is, you know, I was a young AE. I was just doing what I was told. I was pitching, I was writing, I was being creative, all the things. And at that agency, you know, I was offered a position on a different account team, and I had, and I, Drew I kept getting moved around, and I thought it was like, why, why do they keep moving me around? I don’t, I don’t understand. Right. And so I was offered a position, I thought it was like a new job offering on the biggest account, the agency. And I thought about, I said, can I think about it? I’m like, yeah, sure. So I went home, thought about it, came back to the next day.

I’m like, no, thanks, I’ll just stay where I am. And they was like, ah, no, it wasn’t, you know, then it was colored. It wasn’t really a, I wasn’t giving you the option. Right. I,

We, we, we positioned it in a nice way, but you’re moving. Yeah,

You’re moving. Right. And, you know, it kind of got played back to me like, Hey, you know, are you, are you a team player? I was like, well, I don’t, I don’t understand. Why do I keep getting moved around? Right. And it was explained to me, well, hey, we thought you were high potential, so we wanted to expose you to all the pieces of business. I’m like, why don’t you just tell me that? Right.


Supposed to be professional communicators. Right. So I go home that night, very upset, and I called my dad and I said, you know, tell him what’s going on. He said, you know what? I want you to go back tomorrow and ask him how they make money, because I had no idea. Yeah. Right. So I go back in the next day, I ask Rick French, how do we make money? And to his credit, he spent a couple hours with me on a whiteboard. It showed me everything from F t E and Billability and, you know, utilization, et cetera. He showed me how the business, and all of a sudden this light bulb went off in my head. I’m like, oh my God, we’re actually here to make money.

Yeah. Yeah. I’m, I’m always surprised we talk about this all the time. I’m always surprised at how few agencies talk about agency math with their employees. Unbelievable. I mean, our bonus program, everything we teach is all about your employees have to understand how every day your employees either make you money or cost you money. No ifs, ands, or buts about it. And if they don’t know any better, you can’t get frustrated with them when they cost you money. Right. You have to teach them how agencies make money. So let’s, I I want to dig into, so, so now let’s fast forward. Now you, what you do is you help agencies teach their account people how to grow their book of business.

Exactly. Right. In,

In the simplest term. That’s, that’s what you do. So you started to say, it starts with how you kick off the thing. So let’s talk about how do we begin with intentionality at the start of a relationship with a client to, to set ourselves up, to be able to help them grow their business as we continue to work together. What does that look like?

Yeah. So that, that is, is you having a, a principled and established approach to onboarding. And every agency thinks they have one, but, but they generally don’t. Right. And we’re not, we wanna be in collaboration. We wanna be in partnership. Right. We wanna be in business together. Right. But what, but what we end up doing is, you know, have this idea, it’s somewhere along the way, someone smart said this to me, I don’t remember who it was, but, you know, unexpressed expectations or plan resentments


Now, if you don’t talk about, Hey, this is how we do business, what you’re ultimately gonna end up doing is inheriting the negative equity from the previous agency. That’s

Right. Because

Clients just know that you’re an agency and you must be like everybody else and et cetera. And we, we’ve worked with so many agencies over the last five years that yeah, they might offer some similar products and services, but they are unique in the way they do business. So for us, it’s never, don’t introduce the way you do business with a document, with the M s a, with the scope. Right. Let’s talk about here’s how we make money, here’s how we work as an agency. And going back to your point a minute ago, what, what are your personal ambitions to that end? Right? Right. I know, I know the brand has, you know, a mission. We wanna accomplish these things, et cetera. But what, but what are your ambitions? And I want talk about that with them.

Right. And I always like to start off with three questions. Are you, do you want me to be a counselor or do you want me to be an order taker? I, I’m fine with either. I just want clarity on which one it is. Right. Right. Nine times outta 10 you hear, oh, of course I want you to be a counselor. Right. But the smart ones say, I want you to be both. Sure. Right. Okay. Well, great. Do you know how you want the story to end? Let’s talk about that. Let’s not talk about objectives necessarily and that type of thing in the beginning, but do you know how you want the story to end? Yes. I, I do know I want the story to end. Okay, great. Are you gonna hold me accountable, me and my agency accountable to that outcome? Well, of course I am. I’m paying you. Okay, great.

Right. Well then let me tell you how this goes. Right? So it, we, we, we try to do it in a very affable way, but, but yeah. We work with these agencies over time to change muscle memory because with the way we’ve been trained and brought up is to bend over backwards, give it away, and we end up over-servicing, which eats into a g i, which eats into anything that you multiple, you may want to get later on. Right. So what we’re teaching is you have to write defensible scopes of work, very definitive fo scopes of work. And you’re te you have to teach your people how to defend them. And going back to your point about understanding the business, what happens to a dollar when it walks through the door?

How far am I willing to go? Right. Or when or when do I walk into the CFO’s office or whoever handles finance at a small agency and says, Hey, how far can I go in this negotiation? Right. How, how far can I go with the pricing? So we’re, we’re wanting to teach people who are really good at the art of advertising or public relations or sponsorship or whatever it is to be in business, to, to make, to make money. And so we collaborate with them over time. We have a process we call dig, which stands for discovery, immersion Growth. Right. But we work that process to change that muscle memory, and we’re holding them accountable. So over time, it’s not just a nice to have, we’re actually holding them accountable.

And we, we call it the rule of three Drew. So in the first three months in working with an agency, you should have found at least 3% revenue growth, have introduced three new products and services to the client, or have met three new people on the client side who could change your business. Right. More, more relationships, more conversations, more opportunity. Yep. And lots of times, we’ll say to these small mid-size agencies, 3%, they’re like, that’s not a lot. I’m like, yeah, you’re right. It is, it’s not a lot. Right. You can find 3%, and if you can find three, you can find seven, you can find seven, you can find 10. Now I’m changing the muscle memory, I’m changing the approach. We’re actually here to generate revenue. And it’s, it’s being, I know we’re in account service, I know we’re in account management, and we want to be affable, and we wanna be easy to work with, but it’s important for your people to understand the business dynamics and the repercussions of what we do or don’t do, how that’s gonna affect our p and l.

Right. Right.

Because we pay taxes just like the clients pay taxes. Right.

Well, and I think it also, you know, I, I think it’s the part of the work that isn’t necessarily trained unless somebody gets some outside help. So, you know, at our a e bootcamps, one of the things we talk about is, here’s a, here’s an uncomfortable reality that you probably don’t know. Your agency owner carries a list in their head every day of, if I get a phone call from a client and they leave, here’s in order who I have to let go. ’cause the only thing they have to write the ship is to have fewer people. That’s our biggest expense. So your job as an AE is to be at the bottom of the list. And that to be at the bottom of the list means that you are retaining your clients and you’re growing your clients.

That’s your job. Yeah. Ultimately, that is your job. And, and, you know, we talk about the scope documents. So one of the things you talked about is sort of in that kickoff meeting, tell me those things. Part of the problem in an agency is that kickoff meeting is held by somebody different than the day-to-day AE as a general rule. Right. Bingo. So, so either I might be in the room, but I, I’m maybe taking notes or I haven’t said a word because my boss is in the room. My boss is having that conversation, and then I am obligated to now fulfill the promises of that organization of what we’ve said to that client. And scope is a, scope is a great example. I tell agency owners all the time, the reason why you have so much scope creep is ’cause your documents are horrible and your employees cannot defend them.

And so when push comes to shove and the client says, well, I want the fifth revision, and your document doesn’t say how many revisions they get, guess what your a is gonna say? Okay. Because they don’t have a leg to stand on. And so it, it really does start with, as you say, how we kick things off and the way we document our promises and the way we hold clients accountable and ourselves accountable to measurable metrics.

You know what else that does is it sets you up to also go back once a quarter Right. Or once every half a year and say, how am I doing against what you and I agreed to the way we were gonna work together? Yeah. Where am I winning? Where am I losing? What would you like to see more