Episode 3

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Peter Levitan builds successful brands, digital technologies, publishing and advertising environments, and highly effective marketing programs for Fortune 500 companies. He has 30 years of experience running Saatchi & Saatchi Advertising Worldwide, his own Portland Agency, and as the CEO of two Internet start-ups.

 

What you’ll learn about in this episode:

  • The major mistakes agencies make in regards to bringing on new business
  • How to create distinction using your website and the reason most agency websites aren’t attractive to clients
  • The ways agencies are doing sales wrong and what can be done about it
  • Specialization vs. generalization: how to specialize and still have fun
  • The kind of research Peter’s agency does that helps them look better than their competition
  • Why you should stop using the term “full-service” if you want to position your agency against your competition
  • They ways many agencies and agency owners are failing when it comes to their content

 

The Golden Nugget:

“Using the term ‘full-service’ doesn't allow you to be competitive.” – @PeterLevitan Click To Tweet

Click to tweet: Peter Levitan shares the inside knowledge needed to run an agency on Build a Better Agency!

 

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Recommended books and resources:

Websites (not his):

Books (not his):

Ways to Contact Peter:

 

We’re proud to announce that Hubspot is now the presenting sponsor of the Build A Better Agency podcast! Many thanks to them for their support!

Speaker 1:

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. Thanks for checking out this episode of Build a Better Agency. Drew McLellan here, and I am really excited about the topic today. This is a topic that I love to talk about, agency owners are obsessed in talking about, and our guest today is a huge expert in the area of new business and pitching and positioning your agency. So we’re going to dig into all of that. Build a Better Agency is all about helping agency owners just like you do it a little bit better, so you can make a little more and worry a little less. And so with that, I want to introduce to today’s guest, Peter Levitan.

Peter is a builder of successful brands, digital technologies, publishing and advertising environments, and highly effective marketing programs for Fortune 500 clients, ad agencies, tech companies, and publishers. He spent 16 years at Saatchi and Saatchi Advertising, running their business development and some major accounts. He owned his own agency, I believe, up in Portland and was CEO founder of two internet startups. Many of you are familiar with the Levitan pitch by this book, Win More Pitches, which was a great read. And we’re going to really dig into Peter’s expertise around how agencies can grow their business. So Peter, welcome to the podcast.

Peter Levitan:

Well, thank you very much. Thanks for the introduction. One thing you didn’t say was that I did all of that in two years.

Drew McLellan:

And you’re only 29, right?

Peter Levitan:

I’m actually 26. Thank you.

Drew McLellan:

That’s right. Sorry. I didn’t mean to overshoot. Peter, give us a little more background. Have you always been in the agency business for the most part? Is that the lion share of your professional career?

Peter Levitan:

Well, it’s interesting. I was thinking the other day, what is the string? What ties my having left college to where I am today? And I realize that to a certain extent I could call it creative selling. I started as a photographer in San Francisco, I had a commercial photography studio. Then I moved back to New York City where I grew up and went into advertising. Then I had two internet companies and then my own advertising agency and my own business today, which is helping agencies develop better, smarter business development programs. And across that entire lifespan, I realized that I have been selling. So whether I’m selling my photography to agencies or today selling my consulting practice to agencies, it’s all about selling. So I think I’ve really come down to the conclusion that I know how to sell stuff.

Drew McLellan:

Well. And when you think about it, isn’t that what agency’s job are too, is to help clients sell their stuff. So it makes sense that you hung out in that space for as long as you have then.

Peter Levitan:

Right. Well, it certainly helps.

Drew McLellan:

Yeah. I know one of the things that a lot of our listeners are thinking is, “Oh, Saatchi and Saatchi, and he did big brand, big new business.” So help them understand maybe a little bit about your own agency after you left Saatchi and just how some of this translates. Everything we’re going to talk about today, if I’m a 10 person agency in a second tier or third tier city, how do I scale this stuff down?

Peter Levitan:

Well, it’s really about fundamentals. And as I say that word, I’m thinking about the start of the NFL football season. To a certain extent while the NFL is different from high school football, essentially, they’re trying to get the ball from the, what is it called, wherever they start into the goal. And to a certain extent, that’s all that agencies do. And it’s consistent whether you are a thousand person agency or a 10 person agency. What it comes down to is understanding what your goal line is, understanding what your objectives are. And I don’t think frankly, that’s any different in my conversations with major agencies down to small shops, 2, 3, 10 people. It’s really understanding what the objective is and then focusing on it. And I think that’s in particular critical for small agencies that are time stressed, management is stressed. It’s really all about focusing and understanding what the objectives are and being realistic.

Drew McLellan:

Yeah. If anything, smaller agencies are trying to do the same job. They just have fewer resources to do it with, right?

Peter Levitan:

Exactly. I mean, it’s interesting, the Saatchi bit. I haven’t worked there in about 20 years, but it becomes the way people position me. So I’m positioned as a Saatchi guy and I certainly use those words because frankly let’s face it, it helps me position myself.

Drew McLellan:

Absolutely. Great cache.

Peter Levitan:

Exactly. But the reality is, I probably learned more running two internet companies and running my very own agency, which fluctuated between about 25 and 35 people over the course of seven years. So I learned more running an agency than I ever did actually working at Saatchi and this is in respect business development.

Drew McLellan:

Give us an example of something that alluded you when you were at Saatchi, but you learned, you got punched with it square in the forehead at either your own shop or one of the startups.

Peter Levitan:

Well, I had an interesting point in time near the end of my career at Saatchi. I was running business development in Europe, and we were at the same time, we were a very successful London agency but we were having trouble in our New York office. In fact, things were falling apart. It was the last year that Morris and Charles actually owned and ran the agency and New York itself was having problems. So I moved from London back to New York to run business development.

I started to ask around to see what the plan looked like, P-L-A-N. And people said, “Well, we don’t have a business development plan.” I realized something, well, two things, one, you need a plan. And when I started to talk to management about having a marketing plan for the agency, they couldn’t wrap their head around that. I think that they were so used to doing things the old way and the idea of actually having a plan with objectives and strategies and target audiences was something that was alien, strangely enough, to an advertising agency. So, that was my big lesson. It’s important to have a plan.

Drew McLellan:

Yeah. Absolutely. And yet, most agencies that are listening to this podcast and most agencies that you and I interact with on a regular basis, don’t have a plan. When I talk to agencies and I say, “Well, tell me about your new business plan.” I get the, “Oh, well.” First, I get the cobbles children excuse and then I get the, “Most of our businesses is word of mouth referral.” So in essence, I translate that to, we sit around and wait for opportunity.

Peter Levitan:

Well, I agree completely. I think the problem with the word referral, unfortunately, is on one hand it works. There are a couple of agencies in Portland that have been around 30 years and they are very well known and they get incoming calls. That’s nice. The other problem with referral, which is really a problem is it becomes the default. So if you don’t do anything else and I ask an agency, “How do you win business?” And they don’t do anything. They say, “Well, referrals.” Well, of course it’s referrals. But if you were to turn it into a dating situation, it’s like sitting by the phone, waiting for the phone to ring. It’s not a particularly robust technique in terms of growing your agency. So referrals, I think, are good. It’s nice to be referred to, because I think your reputation is the most important thing you have. On the other hand, you’ve lost control of the process at that point.

Drew McLellan:

Well, my perception of that is, is you don’t have the volume that you need and they’re choosing you versus you choosing who you should be working for. So you’re taking whatever comes through the door, as opposed to saying, “Here’s who we should or shouldn’t work for.”

Peter Levitan:

Exactly. I’m sure you’re, even though you said it, I’m sure you’re tired of the analogy of the cobbler’s children. It’s absurd. It doesn’t make sense. And frankly, if I was a client looking at agencies, one of the things I would look at and I’m not everybody, is how do they promote themselves? I’ll go to the website. The first thing many clients look at as an agency website.

Drew McLellan:

Absolutely.

Peter Levitan:

It’s mind blowing to me how similar they are. And they’ve gotten even more similar as a lot of agencies use similar WordPress themes. It’s just bizarre. I don’t understand it, but it’s such an easy fix.

Drew McLellan:

Well, and even worse than the themes are the language they use to describe themselves. I was poking around on your website and your blog, and you had a great blog post where you basically showed how different agencies refer to themselves and they use, every agency it seems like use the same 10 words to describe themselves.

Peter Levitan:

Well, I’ll be kind to agencies. It’s very difficult to find new words to express what you do when what you do is very, very similar to the guy down the street. So I get it.

Drew McLellan:

Absolutely.

Peter Levitan:

But I’ll point your audience to two websites that I think are interesting. A friend of mine in London has an agency, great name for the agency, London Advertising. It’s essentially a one page scrolling website. They have a video, which is something I always recommend agencies to do. Just figure out a way to get a short video on your website to introduce yourself. I suggest people look at London because these are very strategic guys. And I found a website the other day that I thought was, just the way it was drawn, and I used actually drawn as an illustrated, is a website for a public relations agency, international agency called Frank PR. And right off the bat, you’ll see that these do not look like all other agencies. And you don’t have to build a website that is wacky. You just have to find an angle. And both of these companies have done that.

Drew McLellan:

I think we’re in agreement that a lot of agencies struggle with new business and where they struggle is they don’t apply the resource to it in a thoughtful, planned way. I’m curious your take on how that comes to be. When I look at the situation, I think every agency owner will tell you without hesitation that new business and cash flow and having enough work to keep their good people busy is the heart of what makes their agency thrive. In theory, they’re saying it’s their oxygen, and yet they don’t do anything to make sure they get more oxygen. So from your perspective, what gets in the way of agencies having a robust new business plan or marketing plan, and actually doing all of the things that they tell their clients to do to help grow their business?

Peter Levitan:

Well, I think one of the issues and believe me, there are many, so it’s hard to completely generalize, but I think one of the issues is that many agencies actually do not understand sales. I often find and laugh at the idea that we call sales in the agency business, business development, and it becomes a euphemism. The bottom line is it’s sales. I just don’t think a lot of agency CEOs or leaders actually understand the sales process. Frankly, I think that they should read sales books. And I have to say, I know many of them do that, but they need to read them. They need to look at videos online. They need to go to conferences where people are talking about sales to both be conscious and be stimulated to do it right.

I’m going to say that since easily 60% to 70% of agencies don’t have business development plans as in a plan, even a one pager, frankly, guys, one page. They also don’t really understand sales. I invented three words today. I’m sure they’re somewhere out there, but smart sales pressure. I thought, gee, okay, that’s really what it’s about it. It’s being very smart about who your potential customer is, or in this case client, what their needs are, how you’ve positioned your agency to meet those needs. And then you got to apply little pressure to it. And it’s not cold calls. It’s more like warm calls. And it’s very much about thought leadership, something that you’ve just mentioned. It’s not that hard, but I just don’t think a lot of people, because you own an agency, you actually understand how to sell.

Drew McLellan:

Well. And again, if the way you’ve built your agency is the friends and family model, which turns into the referral model, you haven’t had to sell aggressively, certainly, because you’ve had opportunities present themselves. And in often cases in that situation, there is no shootout or pitch or whatever. It’s yours to lose, if anything at all.

Peter Levitan:

Well, I did some math recently and I use it in a presentation I give on pitching. I try to find an average agency, 10 RFPs a year, six pitches a year plus business development can cost an agency $500,000. Somebody might say, “Well, how is that possible?” Well, how much does it cost to do 10 RFPs? How much to do six pitches? And either you’re paying yourself or you’re paying a business development director some money, it’s not the out hard to get to $500,000. Some of that might be soft costs. But it’s imperative that agencies figure this out.

As a side note, another agency I point people to is an agency that just got purchased called G5. The letter G, the numeral five, based in Bend, Oregon, which was one of the two cities I had my agency in Oregon. And they’re worth looking at simply because they picked a niche and they stayed with it. And it’s a niche that has not only a business development plan, but more importantly, a business model to it that will make money. So it can be done, but it requires a great deal of focus and an understanding that this is an expensive business and you better get it right. I think it’s about staying hungry, frankly.

Drew McLellan:

Yeah. Well, I think it’s about recognizing that you’ve got to keep the pipeline full because at any moment you’re at huge risk of the big one walking away. I think when we went through the recession and talent was cheap, it was easier to let people go and hire new people and all of that. I don’t think it was easier emotionally, but it was easier just from a supply and demand point of view. But as agencies are facing a real crunch in finding and keeping great employees, the ebb and flow of business that requires agencies to lay off and hire, layoff and hire gets to be a very expensive proposition.

Peter Levitan:

Yes. I live in Portland, Oregon where, and it’s famously known as the city where the young move to retire. And one of the reasons we say the at is that people come here looking for jobs and even in a city which is very desirable and has a relatively low cost of living, the agencies here are really hungry for talent. A key reason for that, unfortunately, are the somewhat lower margins in the agency business. So it’s not only incumbent that you are active in seeking clients, but it’s certainly seeking the right clients. It’s really understanding what kind of clients you should have, what are the ones that are going to be higher margin. And again, I mean, it’s just really all about focus.

Drew McLellan:

So, a lot of experts out there are talking about agency new business, and some believe that a good strategy for small to mid-size agencies is to, as you describe the agency in Bend, to niche themselves in a category or an industry and ride that industry or category. And others suggest that it’s dangerous to just pick one niche and that you should have multiple legs on the stool, if you will. So I’m curious, what’s your take on that?

Peter Levitan:

Well, we’re in the agency business for different reasons. One is to make a good living and another is to have fun. So when I point people to G5 sometimes, and they look at them and they go, “Well, wait a minute. They’ve really only concentrated on four or five categories. One of which, for example, is storage units. Another are apartment rentals.” And they say, “Well, that just doesn’t look like a lot of fun.” Well, okay, I get that. So it is a balance between fun and making money, but the bottom line is you got to make money first.

I think that it’s imperative for agencies to figure out what is it they want. Let me give you an example. I talk to a lot of agencies and I say, “Well, what do you specialize in?” And I would say, half of them say healthcare. Now, why healthcare? One, it’s obviously it’s a huge industry. Two, it’s very local. It works for smaller agencies. And I ask them, “Well, how are you getting healthcare business?” And the great majority have not employed a very smart thought leadership process to sounding and looking different and looking like an expert in that category. So, I think that you have to specialize a bit in categories. It doesn’t necessarily, you have to be a healthcare only agency, but if you’re going to say, “I want a healthcare account,” you better walk the talk.

Drew McLellan:

Absolutely. And I think oftentimes too, they jump into a broad category like healthcare, as opposed to sort of carving that down even deeper and saying, “You know what, we’re in the pharma side of healthcare.” Or one of the agencies in one of my networks, they work with small and regional hospitals so they’ve narrowed their niche to a more definable category that allows them to have a deep expertise in that.

Peter Levitan:

Right. Well, you have to look desirable. I mean, it’s kind of like going out to the bar, assuming most people still go to the bar and they don’t just use Tinder to find dates these days, but you have to look good. I’m just not sure that just saying I’m a healthcare agency is enough these days, there’s too much competition out there. How do you look and act different?

One of the things my agency did, and this is a few years ago, and actually it’s still a relevant strategy, was we studied the major healthcare brands in our region and nationally on the basis of how they were doing in social media. We created a thought leadership program that was very compelling to marketing directors. They wanted to see not only how larger organizations were using social media, this was very quantitative, but how their competitors were. And we wound up winning two fairly major accounts based on that alone, because we look like experts and we were giving them exactly the kind of information they wanted. Did it cost us a lot of money? No, but it cost some time, but it was very focused. So there are lots of interesting ways to get this job done. One of them, isn’t just saying we’re a healthcare agency.

Drew McLellan:

Yeah. So, in that example, how did you package that data? Did you hold an event? Did you create a white paper? Did you do a webinar? How did you, A, let them know you had the data and then B, how did you deliver it?

Peter Levitan:

Well, we did two things. We created a digital document and we created a physical document that we sent. So we knew who the, let’s say the top 20 marketing directors we wanted to talk to. If people go on SlideShare, look up my name, Peter Levitan on SlideShare, that document exists. So at this point it might even be, man, seven or eight years ago, but you’ll see how we created some charts and created a very compelling look at a category.

Now, let me tell you that we borrowed that idea from a company in New York called L2, which did the same thing for the luxury market. So I urge your audience again, to take a look at L2 in New York and see how they did it. And really what it’s about is educating your market and by educating them, they realize that you’re smart. Of course you have to follow it up, frankly, with some phone calls. I mean, you still have to nurture them. As we all know, marketers don’t necessarily put two and two together and then make the call. You’ve got to call them, but you’ve warmed them up at that point.

Drew McLellan:

Yeah. You actually have to try and sell.

Peter Levitan:

You have to sell. Correct. Smart sales pressure.

Drew McLellan:

I like it. You better patent that right away. Get a trademark on it.

Peter Levitan:

Warm calling. I should have patented it that way too, but, okay.

Drew McLellan:

Hey, what about the idea of every agency that presents itself refers to itself as a full service agency regardless of if they have three employees or 300 employees, what’s your take on that?

Peter Levitan:

Well, there are a few things going on now. Most agencies were full service once upon a time. Then we started to see a move into direct marketing which has been happening for years. But I’d say about 10 or 15 years ago, direct marketing started to look really attractive as digital marketing started to happen because analytics, all of a sudden we could really track everything. So there was a move into that. In fact, at one point I renamed my agency, Ralston 360 from Ralston Group. The 360 moniker, which I think became overused, was really about understanding the full spectrum of marketing. The problem, unfortunately, today with full service while most clients need it, it just doesn’t provide enough of a niche basis for them to be able to position you differently than the other guys.

The reality today is most of the digital agencies I know are being asked to do full service work, but they’re at least being able to position themselves in a niche. I like full service. The problem, unfortunately, is while the clients probably want that, what they don’t get out of that is any differentiation between you and the next guy. I don’t like those words full service.

Drew McLellan:

Well, we go into the field and do some research with CMOs and different attitudes they have about agencies and how they work with agencies and everything every year. And last year, we explored the idea of the words full service. And what we heard from the folks who participated in the research was, they don’t believe it. When they look at an agency of 20 people and they know how complicated marketing has gotten, especially on the digital side, they say, “I don’t think so.”

Peter Levitan:

Yeah. To an intelligent marketer, I agree completely. I mean, really, nobody’s figured out mobile marketing yet. So how could you conceivably say that you understand the full spectrum, because there are elements that are changing so fast today that very few agencies that actually lay claim. Now that said, I’ve seen agencies that just say we’re a mobile agency and they’re doing very, very well. So I avoid the full service. There might be other ways to express that. The one thing going for full service is that clients are a lit