One of the challenges of agency life is that typically everything we sell is a custom job. It’s tough to build in efficiencies or systemize our production when we never make the same deliverable twice. But it doesn’t have to be that way.
Back in Episode 100, we discussed the idea of structuring your agency as a wonder bread factory vs. an artisanal bakery and there are different pros and cons for each.
WebsiteByTonight’s Jared Gold successfully transformed his agency from an artisanal bakery into a wonder bread factory for web development. And in this episode of Build A Better Agency, Jared joins us to share the lessons he learned throughout the process so you can apply them in your own agency.
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:
- Jared’s journey from artisanal bakery to wonder bread factory with WebsiteByTonight
- The benefits and drawbacks of productizing your agency’s service line
- The lessons and insights Jared learned while switching from custom to standardized
- How to determine what parts of your agency can actually be productized
- Creating firm boundaries around your productized offerings so that you can always
- How Jared’s target audience changed when he introduced the productized service line
The Golden Nugget:“A lot of agency owners want to be artisanal bakers, but there is a lot more cost in doing custom work than in cranking out the Wonder Bread.” Jared Gold Click To Tweet “Clients are more concerned with budget and timeframe than the level of customization.” Jared Gold Click To Tweet “A productized offering automates the sales process and makes selling much easier.” Jared Gold Click To Tweet “Agency owners love problem-solving; productizing is just another form of problem-solving.” Jared Gold Click To Tweet “One of the biggest complaints from agency owners is that they can’t get out of the day-to-day because what they are selling is so sophisticated.” Jared Gold Click To Tweet
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Ways to Contact Jared Gold:
- Website: https://websitebytonight.com/
- Free Productized Agencies Directory: turnkeyagencies.com
- LinkedIn: https://www.linkedin.com/in/jaredgold1/
- Agency Planning Tools: agencymanagementinstitute.com/herecomes2020
- Access Jared’s agency-to-agency project/partner referral Slack group: https://www.turnkeyagencies.com/agency-to-agency-referral-community
- Jared’s agency partner program: https://websitebytonight.com/partner
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 what you make. The Build a Better Agency podcast presented by White Label IQ is packed with insights on how small to mid size agencies survive and thrive in today’s market.
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. Welcome to another episode of Build a Better Agency. Happy to have you with us. If you’re listening to this in real time, happy 2020. Hope you have big plans for making it an amazing year. I’m hoping that you used our agency one page one plan, business plan and our owner’s life goals plan to map out what you’d like 2020 to look like. If you are not familiar with those tools, head over to agency managementinstitute.com/herecomes2020 and you can download both of those tools and listen to a little podcast about how to use them.
So welcome to have you do that. Today’s topic is a topic that’s sort of near and dear to my heart because many agency owners want to have this conversation. And it’s not an easy conversation to have. So way, way back in Episode 100, I did an episode called, Is Your Agency a Wonder Bread Factory, or an Artisanal bakery? And it’s probably the episode of the podcast that gets the most commentary when I meet people out in the real world, they will say that they enjoy the podcast and talk about it. And if they reference a specific episode, or if they quote me in a workshop or something like that, it is all around this idea of wonder break factory versus the artisanal bakery, which is my analogy for, do you want to be an agency that does everything custom and everything is unique to each client? Or do you want to be an agency that does a smaller sub set of deliverables, but does them in a very defined way.
And sort of has productized the agency offering to increase efficiency, profitability, all of those sort of things. And so today’s guest is going to talk to us about his experience in moving from more of that artisanal bakery into a wonder break factory. And how he went about experimenting with this idea of productizing his agency’s offerings.
Before we get into that, I want to remind all of you that we are happy to give away once a month, we do a drawing and we give away either a seat in one of our live workshops, or access to one of our on-demand workshops. Both of those retail for about a little shy of $2,000. And all you have to do to get in the drawing is to leave us a ratings or reviews, wherever it is that you listen to the podcast.
And so, super happy to offer you that opportunity. Just take a screenshot, send it to me and we will put you in the drawing. Also want to remind all of you that we have a limited number of seats at the Build a Better Agency Summit, which is the conference coming up in May. And I think it’s going to be a spectacular experience.
If you go and you don’t like it, as with everything that we do, whether it’s our workshops, or anything we do, where we charge money, if you feel like you didn’t get value out of attending that event or participating in that online course or whatever it is, we’re happy to cut you a cheque back. We are happy to refund your money. I’ve never had to do it, but I would be more than happy to do it if you really felt like you didn’t get your money’s worth. And that is certainly true of this conference. I think it’s going to be a killer conference and I think between the keynote speakers, the breakout speakers and all the stuff you’re going to learn from the other attendees, I think you’re going to walk away with a notebook full of ideas and things to do and things to stop doing. Resources.
I’m excited about it and I really want you to experience it. So, grab a ticket while the tickets are still available, and come hang out with us. May, 19th and 20th in Chicago, Illinois. All right?
All right. So let me tell you a little bit about our guest. So Jared Gold now today, owns a company called Website By Tonight. He started out building out custom websites and then shifted over time to really having a more of a wonder bread factory kind of an agency and I wanted to explore with him how he took that journey and some lessons that he’s learned along the way.
Because I think it’ll be helpful for you as you think about are there a subset of products and services that you do inside your agency that you could productize or standardize, or do you want to do that to your entire agency. And there’s different schools of thought about that. And we’ll get into all of that in a minute. So let’s jump into the conversation.
So without further ado, Jared, welcome to the podcast. Thanks for joining us.
Thanks so much for having me.
So give everybody a little sense of your background. As I said in the introduction, what we’re really going to focus on in our conversation, is this idea of for a business or an industry that is all about creating custom everything for everyone, that sound agencies have found great success in productizing some of the things that they do. And I know that that’s an area of expertize that you have. So tell us a little bit about how you came to have that expertize.
Sure. I mean I guess I would have to unofficially plug Brian Castle, if you know of him.
Mm-hmm (affirmative). Yup.
So, I think I was aware of this concept. I didn’t necessarily know if it was called productizing, but I’ve read plenty of business books about creating repeatable systems. And I knew that I needed something like that. I was unsure of what that looked like, or how that was going to happen. And then I decided to take Brian’s Productize course and it was super helpful and he also paired us into a small master mind group. He does that for people that go through the course. And so I think that combination of both seeing step by step ways to actually productize things in different templates from the course, combined with having this master mind sort of accountability group, if you will, really lit the spark there.
And so I’ve just continued to implement it in my own business and read up on it and that’s how I’ve come to fully drink the Koolaid so to speak.
Well I know that you, through your business you work with a lot of agencies. Are you seeing agencies start to kick this idea around a little bit more perhaps than you have in the past?
Yeah, it’s slowly making its way into … you know Lexicon. I would say still the normal agency will have their areas of expertise, some will still say they’re a full service agency, which is very vague.
A full service integrated marketing agency. That’s what they say.
Right. And I don’t even know what that means. I think it sounds like you don’t know what that means either.
I hear it every day-
… but, right.
Doesn’t mean anything. But I am slowly seeing that shift from … even if they have custom services, they’re realizing that they either could have a productized off shoot, or they’re moving towards, “Hey listen, we’d love to work with you, but these are our areas of expertise and this is our specific process.” As opposed to just necessarily closing the deal because they can and then they’re like, “Oh crap, I don’t know how to consistently do this. We don’t have a specific process, we’re just going to fly by the seat of our pants.”
But slowly, but surely, agencies are catching on.
Yeah, I think for many agencies it’s a, “Yes, we absolutely can do that.” And then you go back to the office and go, “Crap, how do we do that?” Right?
Yeah, especially with things changing as quickly as they are now. I think back in the day, when I started in my career, it was easy to make commitments like that to clients because the deliverables weren’t that varied, the technology was much simpler. But in today’s world everything has gotten so much more complicated that promising a client that you can create something … a virtual reality to all, or do something with augmented reality for a trade ship, all of a sudden you’re like, “Oh crap, that’s a big commitment.”
Yeah. So when you think about, if people are listening and they’re saying, “You know what, you’re right, the …” … Part of the challenge I think with agency life is that financially there’s a lot of ebbs and flows that, especially as agencies become more project driven as opposed to agency of record where they have a consistent retainer, the work flows when it flows. You don’t always know where it’s coming from, who it’s coming from. And so there is this uneven and sometimes uncomfortable ebb and flow of money in and out of an agency.
And so I think one of the reason why productizing is so appealing, and you and I were talking about this before we hit the record button, is this idea of having a second stream of income that is more consistent and reliable and that you know you can deliver against morning, noon and night because you know exactly what it is, and excercise what it takes to make the client happy, is an appealing alternative for many agency owners.
Yeah, absolutely. Would you like me to dive into for example, why it’s easier sales wise?
Yeah. Let’s do that.
So previously for a while I was doing more customized Squarespace sites, and I got pretty good at doing that and selling that and everything because that’s a niche product. There’s a relative fair ceiling for what you can charge for a customized Squarespace site for the most part, and so that’s pretty boxed in.
But essentially it was still kind of this, I’m sure a lot of agencies can relate, it’s kind of an arbitrary dance of what the … It’s like, “Oh, what do I think this person can pay? Maybe I would charge this client this amount and this client this amount for the exact same work, but I think I can get a little more money, et cetera.” Right? That’s the standard. So it’s kind of a weird dance and you’re kind of going on market rate and other people set that, et cetera. And you just continue have to work the sale because there’re more variables and it gets more complicated with charging for this, charging for that, what about this scope, et cetera.
And what I really noticed making the shift to a productized offering, is that this is a set scope, this is the rate, or rate options and this is exactly what you get and there’s no real wiggle room. There’s no negotiation. I don’t do discounts. I think discounts are a bad idea. And this is generally the time frame it takes, and here’s what expected of you and it’s more of a binary answers. It’s less of a dance, a balance of making things work and puling and pushing different levers and making you be a good sales person. And more so just like, “This is exactly the problem we solve, for whom we solve it and the cost and scope of solving it, would you like to move forward?”
So it just automates, it makes anyone being able to sell it, much easier. And also because you know the exact price and scope and everything, and who your exact market is, it just makes it so much easier to sell. Right? There’s not all these variable you have to think about in the back of your mind.
Well, I think the other part of that too is that, one of the things that kills agencies, is scope creep. So every time you’re creating a custom product, or offering for a client, you’re creating a custom scope of work or project authorization. And most agencies are bad at that. They don’t put enough detail in. They don’t have the right templates, and so they end up creating this vague document that allows clients to ask for a bunch of stuff that the agency doesn’t really have good footing to say no.
And I think one of the advantages of a productized side of the business is, as say, it’s a very clearly defined, here’s exactly what you get. And if you don’t get that document right the first time, if you’re going to sell it 10 more times, every time you sell that exact same thing, you’re improving the documents and so what you’re doing is you’re reducing the ability for a client to ask for things that are out of scope and for your AEs to give away things that are out of scope.
So that also, I suspect means, that the profit margin on productized services, is healthier because you have less margin for error.
Yeah, I would definitely say that and I think … so not only is it easier to sell, but it’s just so much more predictable. So like what you’re saying is, you eluded to it before was kind of the feast or famine mindset. You know you’re selling these great custom projects, you close a big deal and then you’re like, “Oh, I’m rich.” And then you realize, “Oh, I’m too busy to work on all these strange custom things and reinvent the wheel every time. I can’t go out and sell and work these complex deals.” So you’re kind of always in this feast or famine cycle.
And I think most people that have been in this industry are familiar with it. Myself included, I’m sure you’ve gone through it.
And so the thing about, not only is this easier to sell, but it’s so much easier to just deliver, passing it, teeing it up and passing it to your team to execute and you just maybe gently check in here and there. But you can keep actually growing the business. Working on the business as a unit instead being in the day to day.
And just in general, the profit margins are so much more predictable because you know, “Hey listen, I’m going to pay these people roughly …” you have the unit of economics figured out. So, “Hey, I know to deliver this scope, I have to pay out this amount.” And therefore, it just makes it so much easier to work backwards and to … hitting the numbers you need to hit. And just making it super transparent.
I think one of the challenges for agencies is … Well, I think a couple things. Number one, I think part of the reason why we got into the agency space is that we love doing the custom stuff. We love doing the creative stuff and so for some agencies, it’s difficult. I did a podcast, that I mentioned in the intro where I talk about, do you want to be a wonder bread factory, or do you want to be an artisanal bakery, right?
And I think a lot of agency people want to be the artisanal baker, but now you’re doing very custom things. There’s a lot more cost in making that as opposed to cranking out the wonder break. So part of it I think is a mental shift. But I think the other part of it is, and I’m curious how you got to this point, of what do I productize? What part of my business can I make in sort of this uniform factory way, as opposed to custom building it every time?
So what’s the thought process? So let’s say somebody listening says, “Yes, I would like a more reliable income stream. Yes, I am willing to figure out how to productize some aspects of my business so that I can have that consistency that my custom side of the business lacks.” What’s the step of figuring out what it is that you actually productize?
That’s a great question, I think the way I would start thinking is just, firstly I’m assuming most agency owners are always looking for additional revenue streams? Right? So they’re thinking, “Okay, I know I need an additional revenue stream to balance out this inevitable feast or famine [inaudible 00:16:13] of these big custom projects. So I know that. So I should probably offer a new service.” And then it goes to your point of, okay, well what service do I offer? What do I productize?
And so I think the way I would start looking at it, would be firstly, what are the leads that have been coming in, or that I’ve come across that are warm and I’ve turned away? And so that’s really where I got from, from my own experience, landing on Website by Tonight for my initial agency.
So for example, I would get all these leads, they were warm leads, they were probably going to be easy clients to work with. And they were all these really small websites. They were usually solo practitioners, they perhaps had a budget of like $1,000 or $1,500. And usually at that time … I was really looking for projects in maybe the three to 7k range, and so I think a lot people, a lot of agencies, kind of in the back of their head are like, “I’m too good for this lead. Whatever.” Right? And say, “I’m sorry I can’t help you.”
I can’t make money, I’m going to lose money on a project that small, or … again, because of scope creep and other things, right?
Yeah. Like you want to sell someone this … You want to use your full creative and technical abilities, and it’s just overkill for this small lead. Right? Like you know you could help them, but yeah, you would just lose money on it.
And so before I would turn them away, and then I actually had a friend of mine, and I’m sure you’ve had a lot of friends come to you when they know that you’re in this industry and say, “Oh, you do websites, I need a website.” And it’s too annoying to have that conversation [inaudible 00:17:46],” but anyway, I’m just like, “Sure, I’ll tell you what, why don’t you answer some of these questions here.” I just whipped up a Google doc, say, “Hey, fill this out, answers some of these questions, add your content, I’ll just come over, we’ll do it person.” Right?
And it was really easy for me to help this guy and launch his website in a few hours. I didn’t think it was hard at all. This is really elementary, but to him, it was a huge problem I was solving. And so I realized that … you know a light bulb went off in my head, where I was thinking, perhaps I could charge for this as another revenue stream to even out these bigger projects.
And so, when I would come across these smaller leads, that were already … they would not be a fit for my normal offering of the three to 7k, multiple rounds, revisions, all of that, that’s just not good for them. Right? And so I just would say, “Hey, you know what? I actually have this new offering I’m piloting, here’s the layout, do you want to give it a shot?” And they would be ecstatic. That they had this offering because they were a previously underserved market.
Solo practitioners, independent consultant, they don’t really have places to go to get a nice website done. It’s more like DIY or roll the dice on the Upwork. And neither that great unless you’re tech savvy and you can build it yourself, then that’s great.
So essentially I … and then it just went from there. So I realized these are these leads that I’m turning away. They just need a simplified version of my expertize. I know that they’re motivated and they’re ready to buy now. They’re not going to be a pain, and because they’re motivated, they’re already going to do some of this legwork up front because they know that they’re getting and expert at a really reasonable rate compared to what other people are quoting them.
So I think that’s the way I would approach it. Just, what leads are you already getting? And what legwork could they do upfront so that you and your team can just execute and not have to deal with the white glove, hand holding what have you that a lot of the agencies have to go through. Which is really exhausting. No one like to do that. Ushering along that process. So it’s really about making sure the … getting the clients to get their ducks in a row and just sending it right off to you to T it up to make it easy.
Well, and I think the other part that made that successful for you, is that you had very defined boundaries of what they could and could not have. So part of that exploration is, where are all the places this could go off the rails and how do I build a firm wall around that so that they understand, “Look, you can strawberry, vanilla or chocolate. We don’t do Oreo, we don’t do mudslide, we don’t …” it’s like, those are your three choices. If you don’t want one of those three, then, no.
So you had to go through the process I’m sure of defining the flavors that they could have. And what they weren’t allow to have for your defined price, right?
Exactly. And to be honest these people were underserved so they were extremely grateful to even have the strawberry, vanilla or chocolate. They didn’t need the mudslide. That would just be overkill or not even appealing to them. I think a lot of agencies just think, “Oh, I can do this, so of course the client must want it. They must want the most custom, fancy solution.” But a lot of clients prefer to value, “Hey, is this a good use of my budget?” And then also, “Is this effective for my time?” They may not want the super custom thing because it takes so much involvement on their part that it’s just not worth it.
So I think that’s another to think about, is just because you can throw in the kitchen sink, doesn’t mean the client actually wants that. And that could actually just screw up the deal for you anyway, or the engagement. So definitely the boundaries are extremely important. And I think the thing to note is that those … for agencies that are scared that, “Oh, won’t this smaller offering carbolize my business? Why wouldn’t someone buy the bigger package?”
The thing is, is those are two entirely different customer segments. The type of client that would want the bespoke, white glove, bells and whistle service, is not going to be interested in your super simple budget, still good, but it’s not the super hand holding they’re looking for in customization. Those are two entirely different customer sets. So it’s not going to cheapen your brand to offer one or the other. You can offer the cheaper one … You can pick and choose to whom you offer what.
But those are two entirely different customers segments. So you’re not going to carbolize your business. It’s not a real fear. I just wanted to throw that in as well because I think that comes up a lot.
Yeah, you’re absolutely right. So we have an agency in one of our networks that does a lot of web dev work, kind of like you do. And what they did, was they in essence, built a couple templates and then they did exactly what you did, which was … until we have all of this infor