How to Create a Modern Content Driven Agency, with Paul Roetzer.

Announcer:

If you’re going to take the risk of running an agency, shouldn’t you get the benefits, too? Welcome to Build a Better Agency where we show you how to build an agency that can scale and grow with better clients, invested employees; and best of all, more money to the bottom line. Bringing his 25-plus years of expertise as both an agency owner and agency consultant to you, please welcome your host, Drew McLellan.

Drew McLellan:

Hey, everybody. Welcome back to another episode of Build a Better Agency. Today we are going to talk about a topic that I know is paramount on many of your minds, and that’s the whole issue of… a couple issues, actually… content marketing, creating content inside your agency, and knowing when to pivot with your agency. Today’s guest is not going to be a stranger to any of you, I suspect. Paul Roetze is the Founder and CEO of PR 20/20, a Cleveland-based inbound marketing agency, and HubSpot’s first agency partner. He’s written two really awesome books. In 2012, he wrote The Marketing Agency Blueprint; which if you have known me for any point in time, you have seen me recommend in workshops and conversations I’ve had with agency owners. He also just recently in 2014 came out with The Marketing Performance Blueprint, which is the perfect companion to his first book. He also has created the Marketing Agency Insider, which has lots of great content for agency owners and leaders, and Marketing Score. He is a regular contributor to leading marketing industry blogs, a frequent speaker on content marketing, inbound marketing, performance and strategy.

Paul, welcome to the podcast.

Paul Roetzer:

Thanks so much for having me.

Drew McLellan:

You have done what a lot of agencies really wrestle with is you have reinvented yourself a couple times. Take us back to before your agency was doing inbound. Were you a traditional ad agency as we think of it?

Paul Roetzer:

Yeah. The quick origin story for anybody who hasn’t heard of our background is I started at a traditional agency; mostly PR, some crisis communication, strategic planning, brand marketing. So I came right out of college into that agency… it was a small shop, about six people… and I spent about five-and-a-half years there. And the last year-and-a-half I was there, I started really asking a lot of questions about why the business model worked the way it did, why we used billable hours, how come we didn’t report on actual performance metrics, all of these things that I came to learn that’s how the agency world had been built, and so I started nights and weekends trying to build a different approach to it. And so what I ended up creating was PR 20/20, which the premise of it was standardized services and set pricing, and there was 19 service categories that were all very traditional in terms of their scope, so it was like PR and advertising and direct mail and events. I started that in November of ’05. I left the small firm I was at and started my own.

And then it was in fall of 2007 when I learned about HubSpot, and we contacted them, ended up signing up as a customer, and then I pretty quickly realized the potential that existed in inbound, which at that time was really big on SEO and social and email and analytics, and all the things that traditional agencies weren’t really doing. And so in early 2008, we started bundling, taking that standardized services set pricing model, and applying it to specific services that HubSpot customers needed. And so we built so service packages with set fees that were designed for people that were using HubSpot software, and that became the origin of HubSpot’s partner program today.

Drew McLellan:

When you were reinventing the agency model and you were coming up with this list of 19 or 20 standardized services, one of the things I hear agency owners talk about all the time is the struggle to standardize pricing because every project is different. How did you wrestle that one to the ground?

Paul Roetzer:

That was before I started the business, before I actually left and did my own thing. I spent I think at one point I calculated about 600 hours creating the standard service guide, and it had 19 categories, 105 services, and then three pricing levels for each service, so it was this monster spreadsheet. And my theory was if I could standardize the scope, then I could standardize the price.

Drew McLellan:

Right.

Paul Roetzer:

For example, if I’m going to do a sell sheet: one original copy, three rounds of revisions, and includes one interview. I would just build-out the scope of each thing, and so that became the foundation of everything we’ve done for 10-and-a-half years was take a project, take a service; if you can standardize the scope, you can apply a standard price to it, and that’s… It started in the early days as we used just a fixed fee, and then we evolved into word count, and we would still use hour blocks, and now today we’re on a point pricing model.

Drew McLellan:

Where did that fall down, or did it? Because again, I can hear agency owners in my head going, “Well, no one ever has… only wants one,” or they have more than three revisions. How did you handle all of the client-centric realities around that?

Paul Roetzer:

Yeah. That’s a huge challenge, and it’s probably still something we deal a little bit with today. But scope creep is a massive problem for agencies.

Drew McLellan:

Absolutely.

Paul Roetzer:

Yeah. And it’s exactly what you’re saying. Web is a huge [crosstalk 00:05:37].

Drew McLellan:

That’s right.

Paul Roetzer:

You get one version of the homepage, and two versions of the interior page, and next thing you know you’re doing seven interior pages. And so for us, because we were so transparent in how the pricing worked and what exactly you were getting, then when it exceeded that it was a pretty easy conversation to have. And what we found though was even when we had these fixed cost to it, so say $500 for a logo design, you would still get outside of the scope, and the biggest problem became… Because a lot of our services still had hours related to what we were charging, and that was the origin of the points was, “You get X-amount of points. And whatever gets done within those points, then that’s fine. If you want anything other than this, then we add to it.”

Again, for 10-plus years, it’s been all about total transparency into what we charge and what they get. And because we’re so transparent, we can have conversations, when scope creep comes into play, a lot more easily because the client… There’s no mystery to what we’re doing. I think the problem a lot of firms run into with scope creep is they to go back to the client and say, “It’s going to be another three hours to do that.” The client’s immediate response, “Well, why didn’t you just work more efficiently, and then you wouldn’t need the three more hours?”

Drew McLellan:

Right.

Paul Roetzer:

“I just want the output I thought I was going to get, and this isn’t it yet.” That’s the problem is hours are so variable in terms of the value you get out of them, and it’s largely based on the person who’s doing the work, so the producer efficiency has a huge effect on the value you get.

Drew McLellan:

Tell the listeners a little bit about your points-based system.

Paul Roetzer:

Yeah. The concept… and this is something I’ve been working for years. The first book you had mentioned, The Marketing Agency Blueprint, the first chapter is, “Eliminate Bill Blowers,” so it’s no secret that I think there’s a better way to do pricing. The challenge was, when I wrote the first book, I didn’t have a better way. A lot of the first book was what I thought was theoretically possible, and so we focused on value-based pricing, and we gave seven factors to consider when determining your value pricing, but we did not present a, “Here is how you should price your services model.” It was after the book came out that I was really, really fixated on trying to find a more profitable solution for us that was also more value-based for the client.

We do a lot of work in B2B tech, and so we spend a lot of time around software developers, and I was at the time studying a lot around agile development. And I loved the idea of story points, but I thought story points were abstract, but I liked this idea of a fixed unit of value. It’s not a dollar because a dollar feels like an expense. When you tell someone it’s $50, it’s like, “Okay, I have to spend $50. This goes into that expense column.” But when you change the perception mentally of a point, a point feels like an incremental progress towards something. And so if we focus on, “Okay, you get 50 points for your $5000,” or whatever the numbers are, then they think more about those points going towards a goal, and the points…

What we do is every project has a point value. And so if you take a lead generation campaign and there’s an e-book, a landing page, a three-part email workflow, a Google AdWords program: each of those has a point value, and so then the client looks and says, “Okay, so I’m getting these seven things for 40 points. Great,” and then they come to you and say, “Hey, can we do a sell sheet in addition to it for our sales team? Yeah, great. That’s another five points. Okay, cool.” It’s all about the perception of value to them. And as each of those campaigns you’re running has a goal associated with it, then those points truly are leading you toward achievement of a goal, and you no longer think about what you’re doing as an expense.

Drew McLellan:

And for you, is a point a fixed value, so it’s not like a point for one… Because at some point in time you still have to figure out what your agency costs are to deliver a point of work, right?

Paul Roetzer:

Correct. Internally we still track every minute we spend on things. But my theory has always been the client shouldn’t pay for the agencies inefficiencies. We go in knowing what we think we would make per hour, so we still have a target hourly revenue, hourly revenue target, and we have a value of what we think we should make on every point. But let’s say we write five blog posts for five different clients, and there’s a different professional writing each of them, the client’s going to get charged three per points in every single instance. One client may have an associate consultant who takes seven hours to write the first draft. Another one may have a senior consultant who writes it in one hour. At the end of the day, the client’s still got the blog post that they wanted, and the quality is exactly the same once it leaves the agency’s walls, but why should one client pay $1000 and one client pay $200 for the same end product? So what the point value does is it fixes that point value for a blog post.

So we have a standard guide and every blog post for every client that’s under 600 words is three points. Doesn’t matter how long it takes. And so our job is to figure out, “How can we be efficient?” Now, if over time data tells us that three points is not enough, that we’re not hitting our hourly revenue target,” then we change the point value, we increase it so it goes to a five, or whatever it may be. We use data to inform evolution of the point values, but they are standardized across clients.

Drew McLellan:

And a point is worth a set dollar amount regardless of who the client is. Right? I’m going to buy a bucket of points from you at every quarter or month or however that works? Is that the way you do it with clients?

Paul Roetzer:

Yeah. Right now it’s set up where it’s tiered. A client spending $3000 a month pays, I don’t know, $160 a point, where a client spending $8000 or $13,000 a month may pay $140 or $150 a point. We’re in part of the iteration of the point model so we’re probably going to flatten that, like it may go to where everyone pays $150. But if you look at our pricing page, it’s structured like a SaaS model where the clients spending more money get more value-add as part of it.

Drew McLellan:

And what would make you change that model? Why are you considering an evolution of that?

Paul Roetzer:

Because we started it in January 2014, we started evolving it and putting new on it, and then we eventually rolled it out to every client in our portfolio. By the end of 2015, I think every single client in the agency was on the point model, and so now we have two years of data; and then, like anything else, you look at it and you learn. My biggest thing is… It’s hard because again, if you take a blog post and you say everyone pays three points: well, if you’re a small business and you have 1000 visitors a month to your website and you write a blog post, no one’s going to read it and no one’s going to find it. The value is like… It’s a long-term value, like you need to do it [inaudible 00:12:51]. Whereas if you have a client who has 100,000 visitors a month to the site and 50,000 subscribers to their blog, every blog post is a chance to move the needle, so the value to the client is actually based on their existing reach, in some cases.

There’s all these variables that I knew when we built it, but I needed to see the data to help evolve it. But the main reason for the flattening is, right now the way it’s structured, is the clients with the least amount of money, and usually the least amount of existing traffic and reach, pay the most per point, so they get the least value out of each point. Whereas the clients who have tons of traffic and reach, who get the most value for each project we do, they pay the least. It’s rewarding people who spend more money, but in some ways it’s penalizing the people who don’t have the money to spend, if that makes sense.

Drew McLellan:

Yeah. No, it does.

Paul Roetzer:

So that’s something I want to change.

Drew McLellan:

Does your model… Is there a cap on the client size, or is there a certain kind of client that it does and doesn’t work for? Have you found, over the course of the last few years, “This is a great model for clients between this budget and this budget. But boy, if they’re over X, they don’t like this model”? Or have you found it a one size fits all for everybody?

Paul Roetzer:

Yeah. I’ve yet to find anyone who doesn’t like it. More often, we find people who love it because of the transparency in this simplicity. What I’ll say is when you get into enterprises, so in my world that would be billion-dollar-plus companies that have far more politics internally, far more procedures: to tell them we are not going to charge them on an hourly rate and you’re going to use points, there is an education process that needs to occur to calm them down and make them understand that it’s actually for the best, because everything in those organizations is so structured and has to go through procurement. And so when you try and explain your point system instead of hours it’s like, “Well, wait a second. That doesn’t make any sense. That’s not how we do it,” so that’s the only challenge, but we’ve broken through that barrier without any problems over time. But that was the only issue I originally saw was even though hours everyone seems to understand are inefficient for the client, and usually not the greatest value, it’s just what they’re used to paying, so anything different is that first hesitation, and then they realize the value of it.

Drew McLellan:

For you, your agency has changed dramatically over the last eight, nine, 10 years. One of the challenges I think for a lot of agencies, I think most agencies recognize that creating content, whatever that looks like for their clientele and for the deliverables and the industries they serve, creating content is now part of agency life, but a lot of agencies haven’t cracked the code on how to do that efficiently or well, so how did you learn? You went from a very traditional agency doing I’m sure custom everything, and now you’re creating a ton of content. How did you build that machine?

Paul Roetzer:

Yeah. And it’s funny because we’re in the process now of evolving our own editorial strategy and the kind of content we produce. Because when we started doing this in 2007-2008, if you rewind, the iPhone didn’t exist yet; so mobile, people reading things on mobile devices, wasn’t a huge thing. Facebook had only been publicly available for about a year-and-a-half to people outside of college campuses. Twitter was just being created. The strategies… And again, we’re only talking about eight, nine years ago.

Drew McLellan:

It’s like the Wild Wild West.

Paul Roetzer:

Yeah. And so just having a blog differentiated you back then. And now if you think about the agency markets, what are we going to write about? There’s only so many topics we can all write about, and we’re all writing about these same things. And so I think in the early days for us it was just write about the trends and what’s happening, and write about some thought leadership things for us, but we weren’t really tying it to our sales process, we weren’t thinking about bottom of the funnel when we were writing stuff. It was just all top of the funnel stuff: get people to the site, and now your pages are going up, and your subscriber count was going up. Great.

And I think in the last three to five years there’s been a little bit more focus. Now, a lot of these agencies have caught on, and everybody has a blog of some sort now. I think there just needs to be a more strategic focus to the kind of content you do talk about; and that’s where some organizations, some agencies that go with these vertical market focus, it can be great for them because they can write about specific areas, specific industries that other agencies aren’t really writing about, but they can take those broader lessons and best practices and apply them to a specific type of organization. In our case, we’re starting to think more about bottom of the funnel. When I have a sales call, someone reaches out to us, and I think through, “What are the challenges they’re going through? What are the technology issues they’re having? What are the issues they’re having with their talent? Why aren’t they meeting their performance goals?” and focusing our content more around that person versus the wider net you may cast for top-of-the-funnel content.

HubSpot is a great example. They do tons of just that top of the funnel, just get people in; and then they allow their machine, their nurturing machine, to really do its thing and bring people through the funnel. Most agencies don’t have the time to pump out that kind of content. You’re lucky to get one or two posts a week up. So for us it was, in the early days, it was me and a couple of the other people, and then over time I just shifted the responsibility. So we now have one of our senior consultants, one of the ladies here, is also now our Director of Marketing, and she has another consultant that works closely with her on the editorial strategy for the blog, the publishing, creating the editorial calendar, editing the content created by employees.

But the bigger thing we do is, within people’s performance reviews every year when they do an annual review, there’s three main things they’re graded on, and everything’s quantified, there’s literally ratings for these. There’s their client services performance, which is made up of their producer and manager skills and traits, like these three areas; but then we give them and we require them to meet thresholds or points for marketing and for professional development, and for marketing it’s, “How many blog posts did you write for the agency blog?” And so we have an expectation at each level of how many they should write, and their annual performances in part. Now, the [inaudible 00:19:18] is about 5% today, but about 5% of the total performance rating they get for the year is how well they contributed to the agency marketing.

Drew McLellan:

Inside of that, what kind of ongoing education are you doing internally so that they have the fodder, if you will, to create that kind of content that serves your prospects and your clients?

Paul Roetzer:

It’s a mix. Tracy Lewis, who you’ve dealt with before for our Marketing Agency Insider site, she’s our Director of Talent, and she actually guides the pro dev system internally, and so employees have different requirements. We actually use the point system for professional development as well. For example, if you read a book and write a review, you get eight points. If you attend a conference it’s eight points. If you do a book club it’s three. Whatever it is, there’s point values associated with each of these things. And associate consultants, for example, have to meet 120 points a year, and so we track that. In Google Sheets, we built a dashboard that keeps track of how many professional development points employees have done, and we require specific things like Google Analytics certification, and inbound marketing certification, and so we put them through these learnings.

And then the other thing we do is we’ve gotten very good in the last year at client services workshops. Once a month, we have these morning huddles; and at the end, it’s the third Wednesday of every month, we spend about 45 minutes on a client workshop, and usually we’ll have three different account managers present a campaign that they ran recently, so it’s like, “Here’s what we did. Here’s why it mattered. Here’s how it worked. Here’s the challenges we ran into. Here’s the performance details.” We’re huge on knowledge sharing and really trying to develop, and then the Director of Marketing and her support person working closely with the team to try and guide them on topics that could be very valuable for the blog.

Drew McLellan:

Yeah. Sounds like you’re incredibly intentional about it, which I think a lot of agencies struggle with.

Paul Roetzer:

Yeah, for sure. And it’s really every agency knows this; we just all can’t do it. It’s what you teach the client. You would never tell the client, “Just have a blog and don’t have an editorial strategy or a content calendar.” And you would never let them, when you know there’s an agency to help them sell more product or service, you would never guide them to just write about top-of-the-funnel stuff. You would teach them, “Okay, we have to talk to your sales team and find out the biggest questions they get, and the challenges they hear from their prospects, and let’s create content around that stuff.” It’s what we know to teach people, but most agencies just don’t do it.

Drew McLellan:

Well, quite honestly I think it’s a lot harder work.

Paul Roetzer:

Yeah.

Drew McLellan:

It’s easy to do the lazy top-of-the-funnel stuff.

Paul Roetzer:

No doubt.

Drew McLellan:

And in an environment where you’re rewarded for taking care of clients, but you’re not necessarily held accountable. And by the way, oftentimes it’s the owner is not being held accountable for doing their fair share of it, of doing the agency marketing. If that’s the thing that often gets shoved off to the side, or you do it at the last minute, which again leads you to the lazy solution, I think.

Paul Roetzer:

Oh, yeah. If I’m not writing a book… I don’t even know how many blog posts I’ve written in the last year for our agency blog, but my guess is it’s less than five. I just don’t have time to write unless I’m like, “Okay, the next three months all I’m doing is writing,” and then I lock myself in an office and I write for three months. But other than that: yeah, I’m with it. Like I get it. It’s hard.

Drew McLellan:

Yeah. It’s really hard.

I’m going to take a quick break here, and then I want to talk about how you create content for clients, because that’s a challenge for a lot of agencies as well. But first, let’s take a quick pause.

Okay. We’re back with Paul and I want to dig right into… Many agencies really struggle with content creation: they struggle with doing it profitably; they struggle with doing it well. What are some best practices that you have discovered and implemented inside your shop to create as much content as you guys create for clients?

Paul Roetzer:

That’s a tricky one. And unfortunately there’s, no pun intended, there’s no blueprint really to doing this for every agency. For us right now, 99% of the content we create for clients is done in-house, so it’s our writers. It’s the people running the accounts, they’re also the ones writing it. We don’t use marketplaces. We rarely have used freelancers, although we’ve looked more at that recently. For us in that model, keeping in mind the goal is internal writing and make it as efficient as possible, first and foremost comes down to hiring and training. We hire largely out of journalism schools, we hire people who have some diversified backgrounds in terms of marketing and other areas, but for the most part they are writers by trade.

Because my experience has been get a good writer and make them a great writer. You cannot, at the age of 20, make an average writer a great writer. If they’re not at least a good writer by the time they get out of college, you don’t have the resources to make one. It’s too hard to train that, at that point. Our goal would [inaudible 00:24:28] to great writers, and then [inaudible 00:24:29] to hone that and teach them how to… And with marketing and storytelling in mind, take these good technical writers. Because, in my opinion, there’s creative and there’s technical. Most people come out of journalism school, writers, and they’ve often forgotten how to [inaudible 00:24:43], and we need to help blend those two back together.

Drew McLellan:

Yeah. Their emphasis has been on the other side for so long.

Paul Roetzer:

Yeah. It’s AP.

Drew McLellan:

Right.

Paul Roetzer:

It’s just news-style writing, and checking sources, and you need them to be storytellers while being technically sound. That’s one.

And then the other is that intentionality. Like you said earlier, it’s having professional development tracks internally to do it. And then we do use tools like Grammarly where we’re actually trying to become more efficient in our writing and editing by using new technologies that can help you do that.

Drew McLellan:

And so your writers, are they pure writers or are they… Back in the day, back when I was early in my career, I was a copy contact guy. I wrote, but I was also in essence the account manager. How do you do that inside your shop?

Paul Roetzer:

We do not have any pure copywriters. Anyone who’s writing copy is also an associate consultant, consultant, or senior consultant, and so they are account managers, they’re the strategists, they’re dealing day-to-day with clients, and they’re also writing and editing the content. We don’t break off, like a lot of agencies do, where you have a project manager, a copywriter, a designer, whatever, all other buckets there may be. We actually train, like I talked about in the first book, these hybrids, that it’s truly what we do. We teach people to do all aspects of it, and then that’s what they do on a daily basis.

Drew McLellan:

Other than looking for journalists, or people with a journalist background or education, are there other things in the interview process that you look for that seems to be proving that they are your more successful productive employees?

Paul Roetzer:

We have a professional score card, for lack of a better term, and every profession’s rated on what we break into three categories. There’s producer skills, and within that there’s 11 skills; there’s a strong copywriter, strong communicator, and they’re deeper than that, but these 11 things that tell us you’re going to be a really strong producer of content. And there’s manager skills, which is the same thing; it assesses different skills or requirements. And then there’s 11 traits: detailed, focused, things like that. And so those collectively make up what we believe to be A-players. We actually then rate a 1 to 5 scale, and we have the team rate each other, like 360 kind of ratings. Those sorts of ratings we bring to the interview process. We have 11 factors we rate. Every time we interview someone, we rate them across 11 factors; in essence, at that point, trying to project out how [inaudible 00:27:14] and how they would rate across the different areas that are really important to us.

Drew McLellan:

You’re based in Cleveland. Are all your employees under your roof or do you have virtual employees?

Paul Roetzer:

Everybody’s in Cleveland. We last year introduced a work from home variation, or work remotely variation, where people can work one or two days a week remotely if they choose. Because, as you know, if you’re going to write, some people can’t write sitting in an office staring at a wall, they write better sitting at a coffee shop, so my opinion is go sit in a coffee shop, wherever you’re going to be most productive and think best. I think best on an airplane. I don’t travel once a week just to think on a plane, but I know I have to get out of my regular environment and away from my two screens if I want to really think. We don’t have remote employees per se, like full-time remote, but we do let people work remotely, but they all are based out of Cleveland.

Drew McLellan:

I think one of the gifts that you have, or one of the reasons why your agency is successful, is because you’ve always been able to look a little far into the future and see what’s coming next. How do you stay plugged into the trends that are impacting agency life and client life, and help you decide how and when to pivot your shop?

Paul Roetzer:

That’s a really good question and appropriately timed, oddly enough. I don’t know. I read a lot of non-marketing books, honestly. Part of the reason we evolved into the kind of pricing and service model we have is because I read books like how Dell does it early in the development of the agency. And so I just looked at the efficiencies of the way Dell produced computers, and my mind immediately thinks, “Why can’t we apply that thinking to services? How do you achieve economies of scale in the delivery of services?”

Drew McLellan:

Right.

Paul Roetzer:

And so it’s probably I’ve just always had an interest in business, not specific in agency business, but great businesses and how they’re run, and how they think about efficiency and profitability and culture. And so I just naturally take those things in and then…

Like right now I’m really big on artificial intelligence, and the impact it’s going to have on the agency world, and broader picture on marketing and on the business world, and that largely came from a book I read in 2012 called, Automate This, and my mind hasn’t stopped since, processing the ways that everything we do is going to be disrupted in the next decade; and so I spend some time just researching it, and every once in a while write about it, and I think that’s it. My interests are far more than just running an agency, but everything I read I’m always trying to connect the dots back to, “What does it mean to us? What are the opportunities it presents?”

Drew McLellan:

When you pitch for business… Well, let’s back up. Talk to me a little bit about your new business process. Obviously, you’re an inbound agency, and so I would guess that a lot of your leads come to you. How do you screen a client to decide if they’re a good fit for your model?

Paul Roetzer:

Yeah. In 10-and-a-half years we’ve never gone looking for a piece of business, so we are truly an inbound agency in every sense of the word. It’s always been referrals or inbound leads through the website, and our process is… I actually lead that process now. I had given it up about four years ago. I’ve had a couple of different people internally run it. We’ve never had a dedicated salesperson. It’s always been a consultant or senior consultant who was running accounts and doing 100 hours of client work was moonlighting as the biz dev person and taking those inbound calls. So last August or September, I reassumed the lead role on it; and what happens is someone comes in, we use HubSpot, so I’ll check out their behaviors, I’ll look at what pages on the site they were on, and past history, and get a gauge of who they are and how interested they really are in us. From there, I’ll send out an email just to schedule a 15, 20 minute discovery call, and then we’ll have an initial call. If it seems like it’s worthwhile to continue the conversation…

One, I’m very direct with people if I don’t think we’re a fit, just so we don’t waste either their time or ours. There are definitely some cases, and probably 50% or more, where I’ll tell the person, “I don’t think we’re the right agency for you.” But if it’s a potential fit, then we send them to Marketing Score, which is the online assessment tool you mentioned earlier. That’s a free tool we built and launched in 2012, and we’ve had about 3000 companies use that, so we have all kinds of fascinating data on how organizations rate themselves. But for us, it was actually designed to make our business development process more scientific to where I can predict out whether or not we can help somebody. It looks at the strength of their foundations, assesses the probabilities of our ability to increase their performance and [inaudible 00:32:08] diversification.

From there, it takes them about 15 minutes, takes us about 30 minutes to build a brief based on that data, so what they’ve told us. We’ll usually then schedule a briefing call where we’ll spend 30 to 45 minutes going through their Marketing Score report, and providing some initial recommendations of things we think they could do. At that point, I know for sure whether we can help them or not; and if we can’t, I will tell them at that point like, “Here’s some recommendations, here’s some things I would advise, but we’re not the right firm to do this for you.”

If I think they’re a fit for us, we would then develop a marketing audit that’s usually about 25 to 30 questions. We’d ask for access to Google Analytics, and whatever automation or analytics programs they have, we would dive a little deeper into what’s going on and looking at the potential, and that process will usually take one to three hours, and then we’ll build a proposal if we think we can do it. And so all said and done, most clients will sign on between $8000 and $15,000 a month, and we usually spend seven to 10 hours in the entire process.

Drew McLellan:

Yeah. I know a lot of agencies who would kill for that.

Paul Roetzer:

Yeah. It’s gotten pretty honed over time and it’s a really efficient process for us.

Drew McLellan:

As you’re going through this early evaluation, what are some of the red flags or things that you look for that would suggest these people may not be a great client for you?

Paul Roetzer:

Unrealistic expectations and financial instability; those are the two that immediately come top of mind for me. Unrealistic expectations, what I mean by that is we’ll ask them what their goals are, and in the initial discovery call say, “What is your business goal?” “Oh, we want to grow 40%. We need to get 500 more leads a quarter into the funnel. And if our conversion rates stays the same… ” It’s like, “Okay, cool.” So when we look then at the Marketing Score report, what we’re looking at is, “How did they rate their website traffic?” and it’s all on a 0 to 10 scale: how did they rate website traffic, social reach, and the size of their existing database. And if all of those are like one, two, three, what we would consider liabilities, then we have immediate red flags like, “Okay. You have these huge growth goals, but you’re telling us your traffic reach and databases are weak, and you only want to spend $5000 a month. And when we look at your marketing team ratings, you rated your team at a 20%.” You don’t have copywriters on staff, and you don’t have anybody who can do paid media management. Are you expecting us to do that for $5000 a month?”

Drew McLellan:

Right.

Paul Roetzer:

What we’re looking for is alignment of expectations and potential, and then to ensure that they’re actually going to put the resources needed to make sure. Because everyone wants to grow more than 20%, but no one wants to spend more than 5% of revenue.

Drew McLellan:

Isn’t that a crazy coincidence? Yeah. Tell the listeners a little bit more about Marketing Score.

Paul Roetzer:

It’s TheMarketingScore.com. And what it is, is we used to, when I built the agency, the first thing I did was, besides the service and pricing guide, was I used Survey Monkey to create… It was 50 or 60 questions, it was insane, this questionnaire that would be used in business development. And so we actually used that for the first seven years, variations of it, and so what I finally said is, “What if we took that and turned it into an online tool and we put ratings to it?” and I actually used net promoter score as a model in my mind of like, “But I want the simplicity of just this single rating,” and so Marketing Score came out of that. I want that single data point. And so when you take it, like you actually get it, your Marketing Score is 41%, and then it gives you a section-by-section score.

There’s 10 sections, and there are things like business cores, marketing cores, lead sources, marketing tech utilization, marketing team strength, so it’s trying to look at all the different areas that can affect the performance of an organization, and then it rates them on 0 to 10. And so what happens now, like when you used to do Survey Monkey, you would finish it after 30, 40 minutes, and you would get a thank-you page; and maybe we would use some of the information in a proposal, maybe we wouldn’t, so you may never even see the outputs from your survey. With Marketing Score, you get an immediate visualization of how you rated your organization, so it actually takes you to a report page and it shows you pie charts and graphs, and how you rated each area, and you can download a PDF, and there’s actually…

It’s not publicly talked about on the site yet, but there’s a beta tool where you can invite other people in your company to also rate the company, and we can then combine them into a company portal, and you can aggregate the scores and look at how different people in the company rated the different areas of the company. Like I said, it’s a free tool that’s just meant to help. And there is actually an agency partner program, which is pretty much, “If you want to send people through this, go ahead. Just fill out this Google form and let us know, and we won’t market to them.” It’s a free tool that has an agency component, there’s no cost for agencies, and we do have about 150 to 200 agencies that have used it to do assessments of their clients and prospects.

Drew McLellan:

Yeah. I’ll bet. It’s a great tool and it’s a great insight to open the conversation, and be able to very clearly say to a client, “Goals in one hand, budget in another, do you see how those two don’t balance?”

Paul Roetzer:

Yeah. And to the question you asked earlier, one of the reasons we can do the biz dev so successfully and so efficiently is all we then do is go to them and say, “Listen, I know you just wanted a lead gen strategy, and us to activate HubSpot license for you, but your ratings showed us you don’t have buyer personas, you have no social reach, your website was rated at a two. You don’t have this, this, and this. You can’t just spend the five a month. You have to put 50 up front to fix this foundation,” and they’ll look and be like… Nobody wants to spend the 50, but they’re not going to argue with their own ratings. So all we’re doing is showing you, “You said these suck. All we’re doing is telling you what it’s going to cost to fix it.”

Drew McLellan:

Yeah. “And we agree with you, they do suck, and here’s how we can fix it.”

Paul Roetzer:

Right.

Drew McLellan:

Yeah. Right.

Paul Roetzer:

“We’re glad you realized they suck and… ”

Drew McLellan:

Yeah. It’s a great psychology in terms of getting them to identify their own problems, rather than you telling them what’s broken and then how much it’s going to cost to fix it.

Paul Roetzer:

And they think you’re just trying to sell them something.

Drew McLellan:

Right. Yeah. As you are reading all these diverse books and you are looking across the landscape, beyond the robotics that you mentioned, what are other things that are on your radar screen that you think are going to disrupt agencies over the next few years?

Paul Roetzer:

Artificial intelligence is where the vast majority of my focus is right now; it’s touches so many areas. For example, one of the areas agencies really struggle with is analytics.

Drew McLellan:

Right.

Paul Roetzer:

It’s getting the employees to understand what the data means, and draw insights from it, and then turn that into actions or strategies for the client. We use a tool called Automated Insights. It is an artificial intelligence tool that connects to Google Analytics, and it actually creates complete human narrative around what’s happening on the site, and to a degree what it means. To give some perspective, the Associated Press used to do 300 earnings reports a quarter. Publicly traded companies release their data, financial data. The Associated Press had humans write earnings reports saying, “Here’s what happened.” They now are 100% written by machines. So the Associated Press writes 3000 earnings reports a quarter now instead of 300, with zero human interaction.

Basically, if you think about what can be disrupted, you can start with analytics, but now you can extrapolate that out to content marketing as a whole. A talk I’m giving at Content Marketing World this year is called, “Content Marketing in the Machine Age,” and so what it’s looking at is… And I’ve said this on stage before so this isn’t new. But if the story is based on data, a machine can tell it faster and better than a human every time already, and the AI technology isn’t even that advanced yet. If you think about fantasy sports. If you watch your baseball game tonight, and three minutes later there’s a 400-word story about what happened in that game, there’s a pretty good chance a machine wrote that story, and the reason it’s up so fast is because it was written in three seconds by a machine, so that’s a massive disruption on its own.

And some of the tech that is out there now, that’s getting massive amounts of venture capital funding, I would consider elementary artificial intelligence. Facebook and Google are way, way, way farther along than anyone could fathom with artificial intelligence. An example for people is you upload a photo to Facebook. How do they know who the 10 other people in that photo are instantaneously and recommend who to tag? Well, they’re using deep learning, they’re using advanced forms of artificial intelligence that use facial recognition to know that stuff. And so if you just look at what’s going on within these innovators, and you start thinking about what will happen when that technology becomes somewhat commoditized and available at large, the implications to agencies are massive.

Drew McLellan:

Yeah. It’s a fascinating and interesting and frightening and exciting time to be in the business.

Paul Roetzer:

Yeah. Totally.

Drew McLellan:

Yeah, absolutely. I have enough questions that we could talk for another couple hours, but I want to be respectful of your time; and I know the listeners probably are about to get off the treadmill, so I want to wrap this up. But if the listeners have been focusing on the things you’ve been saying, and they are still a more traditional model, and they need to evolve, they’re struggling with creating content… So the demand is there, but they’re struggling with doing it, and for a lot of them they’re doing this hodgepodge of traditional copywriters are doing it, they’re hiring out to outsourced resources, and they really don’t have a program or a platform in place to really build-out content for their clients that move the needle, that are tied to ROI. Think back to when you made the evolution. What are some baby steps they can take to get themselves pointed in the right direction?

Paul Roetzer:

It’s a really good question. I mean so much of it just comes down to the vision for where you want to take the agency. Because when you’re one to five or one to 10 people, it’s just hard. You can’t afford to have your staff spending 20% or 30% of their time creating content for the agency, and you really can’t even… When you think about, “How do we then do it for clients?” it’s hard to invest the research and development time needed to figure that stuff out. You’re just trying to bring enough revenue in to make payroll next month.

Drew McLellan:

Right.

Paul Roetzer:

So part of it is having a vision for where you want to go, but then being methodical in how you build it. You can’t just flip a switch and create content at scale profitably. What you probably need is a stop gap. It might be using the marketplaces that exist and finding some reliable freelancers, or just reaching out to your network and finding one or two freelancers who can work at really solid rates, but respectable rate for them. Because a lot of the marketplaces, what they did is they drove the price per word down so low it almost became unsustainable. But you think about your options are create content in-house, use/select freelancers from your own network, use content marketplace. You may need a blend of all three of those, but to do that you need people on the team that can figure it out and then can manage that process.

In the early days of agencies, or even when the they’re smaller and still growing, it really all just comes back to talent. It’s having the right people. For me, the one thing I will say I did extremely well in the building of this agency is put incredible people in place, and then developed and train them to where I was able to… it took a while, but within the last two years… really step out of a lot of the day-to-day leadership of the different areas of the organization. So I truly function as the CEO a lot of the time now versus the Head of Marketing and the Head of Talent, and the head of this, and the head of that. We have directors in each of those areas of the company; and I give them guidance, but I give them a lot of autonomy. It’s, “You guide this. I can’t be all of these things anymore.” And it took us getting to probably about 13, 14, 15 employees before we could get to a point like that, but it was also people who had been here four, five, six, nine years who understood the agency.

For any firm, it just always comes back to the talent, and how you’ve developed them, and then letting them figure this stuff out. It moves so fast. The tech changes, the services that are needed change.

Drew McLellan:

It’s crazy.

Paul Roetzer:

You can’t do it as an individual owner. You really have to have people in place you trust, whether it’s outside consultants, or people you hire to be a part of the team.

Drew McLellan:

Yeah. I think that’s so true. In today’s age where people are being headhunted away from agencies and corporations and media companies, everybody’s in the mix of the business, and stealing great employees, or competing for great employees, how do you keep your employees enthusiastic about the work they do? How do you keep them for a long time? What’s your secret sauce for that?

Paul Roetzer:

Oh, man. It’s very intentional again. When I started the agency, I wanted to build a great company full of great people that I wanted to spend every day with. We have lives outside of this obviously, but a good portion of our lives are spent with the people we build these agencies around.

Drew McLellan:

Absolutely.

Paul Roetzer:

It sounds cliché, but there was always the road trip test like, “Do I want to spend six hours in the car with this person?” And so every hire we make, we truly ask those kinds of questions of ourselves like, “Yeah, they’re really talented. But man, I can’t stand this person. They got on my nerves in the interview. I can’t hire this person.” And I’ve even interviewed some people and I’ll leave the room like, “That person is going so far in this industry. They will be a VP of Marketing by the age of 32,” and I would never hire them in a million years. They’re just not a fit for our culture, and they would do more harm than good.

Part of it is the type of employees that we sought to hire from day one; and then the other part is the true focus on culture. And for me, my job in large part is the vision. It’s giving people a belief that we’re working towards something greater than making a profit for the agency and help the client grow, like it has to be something more than that. The [inaudible 00:47:37], the why talk he did for Ted, it’s like there has to be a “Why? What is the reason we do all this?” and that really falls on the leaders of the agency, that there needs to be a story there as to what are people sticking around for? Why are they building their careers there? And then part of that, the tricky part is, there has to be a growth story associated with it like, “No one’s sticking around.”

I had to leave the agency I was at because it wasn’t growing. I wanted to stay there. I never intended to start my own. So when you’re really to talented and you’re an A-player… and you’re 25, 26, 27, and you know you could go get a job anywhere… why are you going to stay where you are? So the vision is great, but I also need to know the agency’s growing enough to compensate me for what I’m worth, or at least close to it. Because all these other things are nice, but at the end of the day I have a family to raise. So it’s all that. Again, it’s not a, “Do the A, B and C, and you’re good.” It’s hard, hard work, and it’s a lot of decisions made with the long-term in mind.

Drew McLellan:

Yeah. As I listened to you in our whole conversation, the whole theme of being very intentional seems to be woven through it. That all throughout your career, creating and building your agency, you have known where you wanted to go and you’ve very intentionally put together a path to get there; and then measured along the way, and continue to measure, to make sure that you are meeting or exceeding your own expectations, which I think are all great lessons and reminders for agency owners.

Paul Roetzer:

Yeah. That’s accurate and it’s hard, but it’s…

Drew McLellan:

Yeah. It is. It is a tough business, that’s for sure.

Paul Roetzer:

Yeah.

Drew McLellan:

Any final thoughts for our listeners before I let you go?

Paul Roetzer:

No, I think investing in culture and team is one of the big themes.

And the other thing is, the point you just made, is knowing what to measure. If you don’t have a CEO dashboard, if you don’t know the five or six or seven metrics that truly drive the health of your agency, figure them out. It is a therapeutic process to go through. And sometimes it can be a little painful to look at the reality of what those numbers are, but you have to know. We’re overwhelmed with a sea of data and metrics, and it’s not as simple as a profit-and-loss number or an income number. There are other signals that tell the true health of the agency, and there’s some universal ones, but you really need to figure out what those are for your agency, and that’ll help you figure out the direction.

Drew McLellan:

Yeah. Great advice.

Paul, if folks want to track you down, if they want to read a bit more of your writing, if they want to find your books, if they want to check out the Marketing Score, what’s the best central spot for them to go to, to find all things Paul?

Paul Roetzer:

PR2020.com would be the best. In the main navigation there’s a link to books, and so the two books are there, and then you can find information about Marketing Score there as well. That would be the best place to go.

Drew McLellan:

Awesome. Thank you so much for your time; I appreciate it. It will be fun for everybody to continue to watch where you take your agency because you certainly seem to have your finger on the pulse of where the industry is going, and I think everybody is grateful that you’re also reaching out and helping agencies as well. It’s one thing to run a business of an agency, but it’s also a completely different thing to do that and serve your brethren, so thank you for that.

Paul Roetzer:

Well, you as well. Thanks for telling the story so people can learn. It means a lot to the industry.

Drew McLellan:

Appreciate it.

Listeners, this wraps up another episode of Build a Better Agency. Come on back next week where I will have another great guest. And until then, you know how to reach me: [email protected] Talk to you soon.

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