How to Scale Your Agency and Prevent Scope Creep, with Ryan Meo

Speaker 1:

If you’re going to take the risk of running an agency, shouldn’t you get the benefits too? Welcome to Agency Management Institute’s Build A Better Agency Podcast, presented by HubSpot. We’ll 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 experience as both an agency owner and agency consultant to you, please welcome your host, Drew McLellan.

Drew McLellan:

Hey everybody, Drew McLellan here with another episode of Build A Better Agency. For many of you, the whole idea of scaling your business and the ebb and flow of keeping the right amount of staff when the work comes and goes as it does in agencies is a challenge. You’re trying to sort of find the balance between having enough people on the team to get all the work done, without having a lot of idle hands. But on the flip side, it’s really a pain point for many of you when all of a sudden a bunch of projects come in at once, which they always do. And you find yourself a hand or two short. Today’s guest I think is going to have some interesting ideas around how to handle that scalability.

Let me tell you a little bit about him and then we’ll jump right into the conversation. Ryan Meo has worked with hundreds of agencies and his company has built thousands of websites over the years. He originally started the company about 10 years ago and it was called [Siteology 00:01:30], which then turned into TheWebsiteProject.Org, and now has been rebranded to ScaleSquad.com. Basically they are a private label website service outsource solution for agencies. So, they help agencies ebb and flow all hands on deck when projects come in. Part of what I want to talk about is that service, but I also want to talk to Ryan about the fact that he had to figure out how to scale his own business and how to do that in a way that allowed him to have a life and to create profit. He talks about the fact that he too, like all of you, have read the Four Hour Work Week, and who doesn’t want that life? But he found a different kind of reality, obviously, like most of us have. But it’s still working out well for him. He is able to do the kind of work that he loves for clients that they love to serve. And that all is scaling and working for him. So, we’re going to dig into all of that. Ryan, welcome to the podcast.

Ryan Meo:

Thanks for having me.

Drew McLellan:

Tell us a little bit about the evolution of your company and how you got from I have an idea to something that’s working today, as well as it is for you?

Ryan Meo:

Absolutely. So, I actually started out in the fitness industry about-

Drew McLellan:

Of course you did, yeah.

Ryan Meo:

… 10 years ago. Not unusual. I was living overseas helping run some fitness facilities in Thailand and all good, great, traveling the world, exactly what I wanted to do. But the end of the day, my problem was that with fitness at the time, and my limited understanding of how to run a business at the time was I was just charging for hours, changing hours for money every day. So, if I wasn’t working, I wasn’t making money. And I absolutely hated that. I’m a philosophy major. So, I had some weird internal issues with that, that just drove me up the walls of trying to put some sort of value on my actual time in the day. And it’s just a terrible model in general for a business, in my general opinion. That’s where it started.

I ended up having some life changes. I switched it over, I moved back to the states. I probably spent four or five weeks trying to figure out how can I make recurring money? And that was my only thought and it was right after I read Four Hour Work Week, all that good stuff. How can I make recurring revenue? And what it came down to is my previous experience of running businesses and being a small business owner, one of my biggest headaches was websites. They were expensive, it was painful to get them updated and supported. So, what I decided was I was going to sell websites. I went out and I sold some websites and I did it a little different. Instead of charging some big setup fee, I said, “Hey, here’s a website, we’re just going to charge you a monthly fee for it and give you unlimited support.” And I only put the price at like $49 because I just wanted to see if it would work. I wanted to see if people would buy into it. Obviously I wasn’t making much money off of it. And people bought in. But then the problem was I didn’t actually know how to build websites. So, I-

Drew McLellan:

That does seem like a flaw in the plan. Yeah.

Ryan Meo:

It was, it was. So, I had a really long week after I sold some websites, watching YouTube tutorials on how to build WordPress websites. And I learned pretty fast, so fortunately knocked those out of the park. Some of those are actually still up to those day as customers, about nine years later surprisingly. With some rehashed work. So, ultimately that’s where we started. I brought on a partner about six months in. We started selling websites. One of my, probably the things I’m really good at, which was not web development at the time, one of the things I was really good at was managing people and building teams.

What we eventually started doing was building our teams and found that we had a really scalable solution for web design and dev. And about a year and half in, we were just killing it with this. We realized that we had a bigger opportunity and that was helping agencies scale their low end web dev and design work. So, small-

Drew McLellan:

I’m assuming that your price up at that point had raised from the $49 a month?

Ryan Meo:

Yes, we ended up charging a setup fee and still charged a monthly support fee to build that recurring. Basically, what we had always done is set up to always make 60% to 70% margin on anything we did, which was a big part of our success, was us really focusing on the financials from the beginning and not guessing, but creating … tracking everything to make sure we were being profitable, even when we were direct to the end customer. And that makes a big difference. And that’s a big thing we teach our agency partners, is you have to plan your finances out. Make sure that those margins are there, or you’re just going to be on a hamster wheel.

Drew McLellan:

Well, especially with web projects.

Ryan Meo:

Especially with web projects. We were trying to change the landscape of that. For us, now working with agencies, we’re able to flat fee everything. So, technically they can work out those numbers pretty well, as long as they are using their time appropriately. That’s where it can get tricky, a lot of people have trouble saying no to the million requests you get as an agency.

Drew McLellan:

Right. And everything is not considered scope creep or out of scope, that’s the problem.

Ryan Meo:

Right.

Drew McLellan:

“Of course we can add 10 pages and we won’t charge you anything more.”

Ryan Meo:

“Sure, no problem.”

Drew McLellan:

Right.

Ryan Meo:

We’re trying to solve that with agencies. And we realized we could. So, that’s about a year and a half in, we switched over to just white labeling only for agencies. We weren’t going direct to customer and doing white label on the side, which you see quite a bit these days. I find that a little bit problematic sometimes. And have just evolved from there to really focusing on helping agencies scale a piece of the market that I think is highly untouched, even to this day, which is small to medium sized business. It’s just, most people haven’t figured out a way how to make money off of that small to medium sized business, even though it’s 80% of the market. While a lot of the agency businesses agencies are going after 20% to 30% of the market that can afford much higher fees. There’s lots of opportunity, just not a lot of people have figured out how to do it consistently and consistently well.

Drew McLellan:

One of the things that I think is interesting about your model is that for many agencies one of the reasons why they lose their shirt on web dev is because everything is so custom. If you’re able to offer a flat fee and kind of crank these things out, it sounds like you’ve figured out a way to give someone something that looks and feels custom, but actually has some standardization under the hood. Is that true?

Ryan Meo:

Exactly. Exactly. We do two types of projects when it comes to web dev. We have a custom website project and then we have what’s called a semi-custom website project. With our custom, everything’s built on WordPress, that’s step one. Step two is we force everything to be built on two different theme types within WordPress. That immediately starts the consistency train all the way through. That means as we trained our team on those, we can create things faster because we’re used to how to build things. It doesn’t matter how custom they are really. And then at the end of the day, we can support it better because we’ve got about 8,000 websites under our belt now. There’s not too many issues that pop up that we can’t tackle really, really fast because we’re so used to the platforms we’re using.

That’s a big mistake we see with agencies is they’ll go out and buy themes from Theme Forest or they’re not really setting any rules as far as how they’re building things. And it doesn’t matter if it’s websites or SEO or Facebook ads. When you’re just trying to do everything ad hoc all the time, it becomes incredibly difficult to scale that, if not impossible at some point. You have to have some sort of strategic way to build things and some consistency and templated … Everything can be … You can have custom and still be some sort of templated version of it. Whether that’s your process or the actual theme doesn’t really matter. But that’s a big piece I think people miss out on, are those processes.

Drew McLellan:

I think one of the challenges with websites is obviously everyone wants one that’s unique and built specifically to their business. I think one of the things sometimes people don’t understand is just because you’re building it on a defined theme, doesn’t mean that it can’t look and feel the way you want it to. It’s really just about the bones of the website and elements under the hood work together, right?

Ryan Meo:

That’s exactly right. And what we’ve found … So, we used to only do custom work, which was fine. We basically set up a … our team basically looks like a car manufacturing. It’s an assembly line of websites. So, there’s about five different stages and we’ve got five different teams. So, five different teams touch one website every single time, which seems complicated. But at the end of the day, it makes it flow really effectively because we’re always moving forward, instead of forward, back, forward, back. But with websites, what we found was interesting is we do a lot of custom. To this day, we still do a lot of custom. But particularly with the small business, smaller medium sized market, is the minute we launched our semi-custom themes, our semi-custom sites, which is basically we’ve got a bunch of themes the agency can show their customer, the customer can choose from. And then we customize a theme.

That became a really big win on two levels. One, we cut the cost down. It was easier to deal with the customer. Because the problem with custom and a small business customer is they don’t have a marketing team in house. They aren’t marketers, they’re not designers. So, trying to get them involved in some sort of design project becomes really destructive at the end of the day.

Drew McLellan:

Yeah, painful.

Ryan Meo:

Yeah. Not only is it painful, but it actually starts hurting the end effect of the project for that type of customer particularly. Because they don’t know what works and what doesn’t work. So, they end up destroying … If you can say you can do whatever you want with this design, and then you do that, they’re most likely going to make it worse than when it started out. And that’s what we love about the semi-custom approach with small business. You can make really good money off of it as an agency, but you’ve already boxed them into something that works. And then everything outside of that, you can just say no. You paid this price, no you don’t get that.

Drew McLellan:

That’s hard for agencies. They’re not good at that.

Ryan Meo:

Yeah. It’s a really, really challenging issue for a lot of people. But one they have to get better … It’s the only way to scale a service-based business. You have to learn how to say no appropriately. Or say, I always like to say the positive no, which is, “Well, you didn’t buy that package, but yes, we can do that if you go to this package.”

Drew McLellan:

Right, “For a nominal fee.”

Ryan Meo:

Exactly. And move them up into another level of recurring revenue. You’ll get a lot of people saying yes and you’ll make more money.

Drew McLellan:

What’s interesting though is oftentimes, and I try and make this point with agency owners and when I’m teaching account service folks in our AE Boot camps is oftentimes when you have the courage to say, “We absolutely can do that, but it’s not included in what you’ve already purchased, but we can certainly add it on for this nominal fee.” Many cases, the client goes, “Oh, well then nevermind.” So, they weren’t really that invested in it in the first place. But when you teach them it’s an all you can eat buffet, and it doesn’t matter if they throw away half of the food on their plate, they just keep loading up their plate, which is painful for you as the provider to try and service and to make money.

When you say, “Yeah, you paid for the buffet, but that didn’t include dessert. But for $5 you absolutely can go over to the dessert table.” A lot of times they go, “Oh, never mind, I’m kind of full anyway.” Right?

Ryan Meo:

Right.

Drew McLellan:

But agencies, you never can find that reality in your pricing model or in your client service model if you don’t have the skills and the courage to say, which is all you’re doing is stating the truth, “You didn’t buy that.” It’s like, I don’t walk into Target and just get to put stuff in my pocket and walk out. Target would go, “I’m sorry, Mister McLellan, but you didn’t buy that. And by the way, put your hands on the wall, the police are coming.” We just have to be better about that.

Ryan Meo:

Yeah, absolutely. And I think another good way to approach it as well, we do that ourselves all the time. Something else that works really well, I think particularly with the end customer that the agency is dealing with is … For some reason I don’t see a lot of agencies asking this question, is when a customer comes with a request I always say, “Ask me as many questions as you want. You have ideas, let me know, I love that you are thinking outside the box.” But I always like to return whatever their suggestion is, if it’s not a big yes and I’m like, “Eh.” I always like to return with, “Well, why do you want to do that? What do you think this is going to do for you?” And once you start engaging in that conversation of what is the value of this extra thing you want? What is your expectations of it?

That can tend to break them down to saying, “I don’t know, I just saw someone post it on Facebook.” Which also ends up giving you other opportunities to upsell them to other things. But also can easily start knocking them down back to where they need to be, which is you don’t need this. You don’t need this right now. Which also can, instead of just saying no sometimes, can also set you up more as an expert in their eyes. That you’re actually bringing in some consulting of, “Why do you want to do this? Well, let me tell you why this is not right for you right now and your expectations aren’t going to meet reality.”

Drew McLellan:

I’m guessing that a lot of the listeners heard you say flat fee and they clutched at their chest a little bit because they’ve tried to do that with websites but for some reason websites seem to always grow extra arms and legs and heads. So, how do you manage setting a fee? And at what point do you actually set the fee? Walk us through a little bit of your process of how you figure out what it is you’re about to build and how you assign a value to it and then how you make sure that that value is protected so that you’re not upside down by the time you’re done building out the site.

Ryan Meo:

Yep. Yep, so what I’m going to do is I’m going to start first with what we offer, and then I’m going to knock back … remind me if I don’t, then I’m going to come right back to the very beginning of how to start the process with a customer. Because that’s a big piece of it as well. With our services when we’re helping agency organize their productized packages basically, with a flat fee it can become really attractive to an end customer to say, “Yeah, a flat fee is great instead of getting charged $150, $200 an hour for something we’re not sure of.” I always like to make sure people understand the buying, the people buying are also in that state of mind as well, of if it’s an hourly fee, they get really concerned of how much they’re going to end up paying at the end of the day and if they can afford it. So, it’s two parties in that same situation.

What we do with our packages, for example, we’ve got custom website project. It includes a home page design and one interior page design included in the price. And then there’s unlimited revisions on those. Once the design’s approved, then we build it into WordPress and then it goes through to getting the content added up to the 15 pages that we allow and then the launching. And then preferably putting them on the support package, which creates the recurring revenue as well. We charge $600 and then $19 a month for that. So, pretty low in general.

Drew McLellan:

Wow, right.

Ryan Meo:

Most of our agencies, and these are … When I say the price, you’re going to think really crappy websites.

Drew McLellan:

I promise, I didn’t think that.

Ryan Meo:

Everyone does. And it makes sense because our pricing is low. But for me to help agencies scale, I had to figure out how to make 70% margin off of those prices.

Drew McLellan:

Wow.

Ryan Meo:

So, for me this is an incredibly important subject of how to make this work. With our prices, we got agencies charging on average probably $2,000 to $3,000 for a small business website. But I’ve seen people sell these websites for $30,000. So, they’re not cheap, ugly looking websites. These are exactly what you would get from a local developer that knows what they’re doing. But what we do, everything is about putting things in a box. So, with our custom websites, like I started, is you get these types of designs. And then we put unlimited revisions in. If they want a third interior page design, we’ll do that and it’s an upsell, an extra $50 to do that. But as we go through the process, as we break it down, we just are really clear of what you don’t get. We spend more time focusing on what you don’t get than what you do get, which is a little counterintuitive for most agencies to think about.

But if I’m sitting down with a customer and they only want to spend … If I have my package services and then I have my Bespoke services at the top here, my white glove services that I’m charging $10,000 for. And you should, as an agency you should have both. You should be … The agency game is really how many customers can I capture? And it always amazes me that agencies are shunning away the smaller ones because they can’t afford their Bespoke services. Don’t shun them away, just make better smaller packages for them that you can box them into. Because some of those customers are going to become Bespoke customers eventually and it’s going to be easier to resell to them as a smaller customer than someone you told no, that they couldn’t afford your services.

So, we focus on helping them package those and focus on really determining what’s not included in those packaged services. So, you can take our $600 project and you can sell it for $3,000, which is great margin. You’re sitting at that 60%, 70% margin right there. Even if you have to spend a little bit of time, so we average on … Agencies with us spend about one to seven hours per project with us, from start to completion. So, even with your hours in there, you’re still making good margin, not including the support that you might get on with them. So, number one is package up your services well. Be very clear of what’s included. And then be very clear of what you don’t get.

Drew McLellan:

Yeah, detailed scope documents would be critical, yeah.

Ryan Meo:

Absolutely. And I find it really helpful to sit down with a customer and say, “Hey, here’s all the great things you get. But let’s talk about what you don’t get in this package, just so we’re on the same page and everyone’s expectations are correct.” Is actually talk to the customer about what they’re not getting so their expectations are set. The minute you do that is the minute the project is off to an incredibly smooth start. And you don’t have customers calling, “Why isn’t it doing this for me? Why isn’t it doing this for me?” They might be saying, “You built me a website, why isn’t it getting ranked?” And it’s because you never talked to them in advance that, “Hey, this doesn’t include SEO, this is just a website.” But that happens all the time.

Drew McLellan:

“But we have SEO and you can buy it for this package,” right?

Ryan Meo:

Exactly. Exactly. Exactly. And you might have, and that might be part of your service packages, is hey, just a website. Or a website and SEO. Obviously you can ad hoc some of these services. But build up those packages so you can make it a gradual increase with the customer of that buying ladder. That helps a ton doing it that way. And it helps you maintain your margins and your time. Now, that flips back to the beginning of the conversation with the customer is sitting down with them and actually figuring out what they want and then making sure you explain what they get and don’t get, like I said. That’s the piece I find where agencies mess up most, is the first initial consulting call with the customer. Agencies love to talk. We’re all marketers, we’re sales people. We like to just sell stuff and talk. I find that to be very problematic when you’re particularly dealing with smaller customers.

If I’m sitting down with a customer, I will try to spend at least the first 30 minutes just asking them questions and listening. And asking them questions on, “Okay, great to meet you. Now, tell me what you’re looking for. What do you need?” They tell me, then I ask them, “Well, what do you expect this to do for you?” I basically have them break down to me what they want, what they’re expecting. And that gives me all the ammunition I need to say, “Well, here’s what we can do for you. Here’s what you should realistically be expecting.” I let them sell themselves and tell me all their problems. And then I can step in for 15 minutes and be the hero and tell them how I’m either going to solve those or their expectations are unrealistic.

Drew McLellan:

One of the things I think that’s interesting is that most agency owners think that they listen really well, and often. But when you do actually a study, you record an hour meeting or even a new business pitch or something like that and you actually time it, they’re sort of stunned and perhaps a little embarrassed by how often they’re talking.

Ryan Meo:

Yeah. Yeah, I believe that.

Drew McLellan:

Yeah.

Ryan Meo:

I’m a talker myself, so it was something I had to break down personally to get better at.

Drew McLellan:

I want to dig into how you work with agencies. Because a lot of agencies, especially a lot of agencies sort of in the AMI world who are a couple hundred employees or less, they often have decided that it is better to outsource web dev than for them to try and interview and hire and keep good web dev folks on staff. So, I want to talk more about how you work with agencies and how you recommend, whether it’s you or somebody else, how you recommend agencies come at that relationship to make that a win-win. But first, let’s take a break and then we’ll come back and dig into that.

One of my favorite parts of AMI are our live workshops. I love to teach, I love to spend two days immersed in a topic with either agency leaders, agency owners or AEs in our AE boot camps. But most of all, I love sharing what I’ve learned from other agencies from 30 years in the business and all the best practices that we teach. If you have some interest in those workshops, they range from everything from money matters, which is all about your financial health of your agency, to best management practices of agency owners, to new business, to AE boot camps, and a plethora of other topics. Go check out the list and the schedule at AgencyManagementInstitute.com/LiveTraining. Okay, let’s get back to the show.

All right, I am back with Ryan Meo from TheScaleSquad.Com, and we’re talking about, Ryan’s company is basically a white label web dev shop, and they do some other things, and we’ll get into that. But where they come alongside agencies and they are in essence their web dev team in a box. So, rather than you having a bunch of developers and programmers on staff, you as an agency would turn to somebody like Ryan and say, “Hey, I need you to help me with this.” So, lots of agencies, as I said before the break, lots of agencies have gotten to the point where they have decided that it’s A, too expensive, and B, quite honestly too hard. Because they don’t really know how to interview and tell if somebody’s blowing smoke up their skirt or not, of whether or not they’re really a great developer.

So, a lot of agencies have decided rather than keeping that skill in house, that they are going to find a strategic partner and work with someone like you to fulfill that. I’m curious, you’ve worked with hundreds of agencies, how do you make that relationship work well? And where are the places where agencies and companies like yours kind of trip over themselves a little bit and cause angst, either for themselves or for the end client?

Ryan Meo:

Right, right. I would start at saying agencies are absolutely their own worst enemy. They make their own problems, from expectations to beliefs to what they’re trying to accomplish. A lot of agencies say they want to scale, they want to go bigger, they want their margins better. But actually how they run their agency business as far as from a process side, doesn’t reflect that. Because they’re still just doing it piece, by piece, by piece, they don’t really have any process in place. So, when agencies come to us, the biggest thing that we see, the agencies that are most successful with somebody like us, are agencies, one, that trust our process. Because we have to have a good process. I can’t be as scalable as I am, unless I’ve already figured out how to be scalable with my processes. So, I’ve already figured that out.

But what we see a lot is agencies will come to us and want us to follow their systems that keep breaking for them. So, there has to be some willingness to be open and change how you’re doing things or you’re just going to be on that hamster wheel again. Your own problems are creating the problem. Your bad processes, your bad training of project managers, your bad workflow, your bad presentations. So, what we tend to find is agencies will come to us and they want to treat us like an employee instead of a partner. Which, we are not. We’re not your web dev employee. We’re a partner. We can tell you no as much as you can tell us no. So, I think it’s really important to understand that relationship coming in so there’s mutual respect.

There’s been plenty of agencies we’ve had to fire because they come in and treat us like garbage. One, it’s just disrespectful. Two, again we’re not an employee of yours, we’re a partner trying to help you grow as well. If you treat us like crap, we’re not going to be real amped to do that and probably not stick around with you.

Drew McLellan:

What’s interesting about that is agencies hate being thought of as a vendor or being treated like a vendor. And yet, sometimes they treat their business partners like vendors. So, you sort of do unto others what you don’t want done to you. Right?

Ryan Meo:

Right, right. And it happens a lot.

Drew McLellan:

Sure.

Ryan Meo:

A lot. So, we have to set those expectations. So, I think to start is coming in, whether it’s me or someone else, there’s other great fulfillment partners out there. The first thing agencies need to be thinking, because right now what they’ve been taught in the agency world, all over Facebook, is go find a freelancer. Go find this person. I always ask agencies why they did that, why did they go do that? And I ask them, “Why are freelancers any more scalable than your in house employees?” And they don’t have an answer to that. Because they’re not. And they also actually create more chaos because there’s no process behind freelancers. The freelancers are doing their own thing. And it’s ad hoc every single account, it’s a terrible business model.

So, I always challenge agencies is if you’re going to have someone become a fulfillment partner for you, not an outsourced firm, not a freelancer, not just a single web dev, someone that can actually scale with you. Make sure from the beginning they are scalable. So, if you go to someone and say, “Hey, I’ve got … How many projects can I send you a month?” And they say, “Three.” That’s a problem. They should be able to go and say, “Well, it doesn’t matter how many projects you have, we’re scalable. So, if you’re going to suddenly have 400 projects this month, just give us a little heads up so we can prepare that.”

Drew McLellan:

But bring it.

Ryan Meo:

Yeah, yeah. Exactly. Exactly. The problem in the agency world right now, because it’s fairly new, is there’s not actually a lot of fulfillment partners that can do that. I always compare it to maybe how lumber started out. At once, it was a fairly new industry and everyone was using freelancers. But nowadays, if you want to get a bunch of wood turned into boards, you’re not going to go to a guy down the street that can do one at a time. You’re going to go to somebody that can knock out 300 in a day. And that just makes sense to people. And that is where the agency world is going as well. You have to make sure, one, the partner you’re partnering with can actually handle the volume that you could potentially create. And it doesn’t mean you have to. But they should be able to handle it no matter if you can or not. So, I think that’s step one, is making sure whoever you decide to partner with on fulfillment actually has the capabilities to help you scale. The processes, the team, the management. Anything that is currently an agency bottleneck is already solved by that fulfillment company.

Drew McLellan:

Right. Otherwise you’re just compounding the problem that you have with employees.

Ryan Meo:

Exactly, or freelancers or Fiverr guys or something like that. And those are always a disaster. We take over websites and SEO projects from those types of people all the time and we get in and we ask the agency, “Well, what’s going on here?” And they’re like, “I don’t know.” And I’m like, “That’s a problem. You should know exactly every …” You don’t have to know exactly how it was done, but you should know this is the theme you’re building in, this is how we … These are the general basics of how we do things. But that’s not the case usually.

Drew McLellan:

Yep. How do you make that relationship successful? So, you come in and you treat your partner like a partner. You’re looking for somebody to partner with that can grow with you. Because as always, projects come in, you have no websites for a month and then you have seven. So, somebody who can ebb and flow with your work ebb and flowing.

Ryan Meo:

Yeah. When they come in, we do a gigantic onboarding process with every agency. Of, “This is how we work, this is how you communicate with us, these are your expectations.” And the biggest thing I tell our agencies is take that onboarding process, turn it around and do it with your customers. And then immediately we’ve got a complete on track flow from start to finish through all three parties. And then on top of that, I usually tell agencies, “The best person in your company that’s going to help you scale is your project manager or project managers. They are the ones that can take you from $500,000 a year, to $5 million a year. So, your efforts should 100% be put into those people until they’re completely able and able to handle your projects without you present.”

I say that and it seems super easy, but we see the exact opposite all the time. We get, whether it’s 100 person company with 10 project managers or more, or it’s a single two person company with one project manager, the thing that breaks every single agency is their project manager’s communication. And the reason why is we’ll come in with an agency, talk to their project managers, and we’ll ask them, “What do you know? What do you know about websites? What do you know about onboarding? What questions are you asking your customers?” And it’s just big, big eyes of, “I don’t know.” Because what we find a lot of agencies is they bring in a project manager and they say, “Here’s what we do, go to town, figure it out.”

Drew McLellan:

Yeah, right. Very under-trained. It’s a lot of baptism by fire training.

Ryan Meo:

Yep, exactly. And it is the death of an agency. Because for me, I technically am still an agency, I just have a different customer base. My project managers, I spend at least six months with them personally, to make sure that they are doing exactly the processes that we’ve put in place. So, every communication, at the start I’m overseeing their emails to make sure they’re communicating in the way our company culture is, communicating with customers. Because a big thing for us is the minute the project manager starts getting frustrated, which is going to happen, it’s human nature. If that frustration starts coming out via email or phone calls, that’s a problem. Because that gets everyone else frustrated. And that’s something that happens a lot with agency project managers is people’s lives have twists and turns, so their attitudes change day in and day out. So, you’ve got to really rein that in. Because that is the person that’s talking to all your customers. And what I want, is I want my customers to come back and say, “Your project manager is amazing.” And they are-

Drew McLellan:

Yeah. Calm, cool, collected, nothing ruffles their feathers.

Ryan Meo:

Exactly, exactly. So, for example, what we’ve done, we’ve got one of our head project managers, they can handle, I think right now we just did an evaluation, she has about 350 projects in process right now under her.

Drew McLellan:

That’s crazy.

Ryan Meo:

Different elements of our team are handling every piece of that, but-

Drew McLellan:

Yeah, the fulfillment of it.

Ryan Meo:

Yeah. But she’s overseeing that, making sure communication is flowing, making sure people’s questions are getting answered. And what’s amazing is she still just works 40 hours a week. She still has her weekends. She’s not super stressed out or anything and she enjoys working with us. And it was all just process. When we find project managers that are super stressed out about five projects, I’m immediately wondering what went wrong? What went wrong in the training? What’s breaking down? Because if a project manager can only handle five projects, then you’re back to another bottleneck of scaling with a person that’s really the center stone of how your projects are flowing.

So, I find that that’s the second biggest hiccup that we work with agencies on. We’ll even offer our time up to get on the phone with the customer calls at the beginning, just so their project managers can listen in how our project managers will communicate with customers. Setting expectations, being clear on what we’re doing for them. And that makes a huge difference.

Drew McLellan:

When you’re working with an agency, are you helping them develop an onboarding for … So, ABC business wants a web project. Are you helping them develop an onboarding? Because they’re the ones talking to their clients, right? Or are you guys interfacing with their clients?

Ryan Meo:

They talk to their customers. We don’t talk to any customers or anything like that. We do offer up some time in the beginning to act as their employees, so we can help them with the onboarding. We don’t get too deep into that yet. That’s certainly on our roadmap to help create onboarding processes they can copy and just replicate.

Drew McLellan:

Because I would think that would make your life a whole lot easier.

Ryan Meo:

It does. So, our biggest thing we do is we take them through our onboarding process and then tell them to replicate it. Because it just works really, really well. Usually at that point, once they do that, they’ve got a pretty good flow. And the only two pieces are their project managers and then how they’re consulting their customer at the beginning. And that becomes a really big challenge if they’re not willing to change how they do that.

Drew McLellan:

So, once the project is in flow, I guess what I’m getting to is, are the trouble spots really on the front end and the back end, and the middle is sort of safe? Or are there danger spots in the middle as well?

Ryan Meo:

The troubles are always on the front end of the expectations being set. Sometimes things come up in the middle of the project, but it was always due to some sort of expectation not being set at the beginning. So, it was always something at the beginning that’s caused any part of the problem at the middle or end. Whether it’s the turnaround time or what they’re getting exactly. I mean, we’ve seen it too where customer will approve a design project and we’ll program the whole site out and we’ll get to launch and the customer says, “I don’t like that site at all.” Which is bewildering to me because they actually approved the site. So, there was some sort of miscommunication at the beginning with the customer. We don’t see that as much these days, as long as agencies are following what we teach them. But it’s always the beginning. Always. Every piece of it is the beginning of the problem. And anything that pops up in the middle or the end can always go back to the beginning of those expectations and communications.

The only other piece that I would say that agencies fail at between the middle and the end is just communication. So, while we might communicate to the agency left and right, we find a lot of agencies fail in that department of over … they’re not communicating at all to their customer throughout the process. And that’s a big red flag for the small business owner or the medium sized business owner as well. Because if they don’t hear anything from you for six weeks, as far as they’re concerned, the value of the project starts going down. Now, that’s not necessarily reality. But that’s how they feel. I think that’s something that agencies need to make sure they have a good process on, is how they’re keeping their customers in the loop, even if it’s, “Hey, project’s going well, things are looking really good. Just wanted to let you know that we’re still working.”

Drew McLellan:

Yeah, you know it’s interesting, so one of the things that I chat about at the AE boot camps is that when there is silence, we make up stories about what’s happening. That’s true in any sort of relationship. When we haven’t heard from someone in a long time, we worry that something’s wrong or broken or whatever. AEs typically think that they should communicate, or project managers, whatever you want to call them, think that they should communicate with their clients when they have something specific to tell them. And what I say to them all the time is, “You know what? You’ve got to build a cadence where you are just basically patting them on the hand and saying, ‘Everything’s going great. We’re on schedule, we’re on time, everything is good. Just wanted to let you know that everything is flowing as we expected it to.’”

And that provides such a sense of relief to the client. Because then they don’t have to worry. And by telling them that everything is going right, they know that if something is going wrong, they’re going to hear from you, as opposed to this silence.

Ryan Meo:

Absolutely, absolutely. And we’ve even seen, after a project, so for as long as they’re on support, we’ve done things where we’ll just send out an email to all our customers. Just an email that says, “Hey, how’s business going?” Just to check in on them and have someone ask them. And it’s amazing the response. People want to be involved. Being a business owner or a business in general can be really lonely. So, feeling connected to the people that you’re paying and working with makes a huge impact on the value they see of you.

Drew McLellan:

Absolutely. So, at the tail end of the project as clients are starting to look at sites that are … they’re looking at them on a test server or whatever, how are you managing expectations? Because a lot of times what I notice is that, especially around web projects, when you’re building it in their head and you’re showing them wire frames is one thing. But at a certain point in time they look at it and go, “Now that I’ve seen it, I need a this,” or, “I want a that.” Or, “Oh my gosh, I didn’t think it would be that, I thought we were talking about this.” So, how do you guys handle with your agency partners that sort of, “Now that I’ve seen it …”

We all have clients it’s like well, you have to show them something to react to. Because in a vacuum they’re not so hot. But when they have something to react to, they can immediately say, “I like it, I don’t like it,” whatever that is. So, how do you manage that in your process when your scope documents are so tight and your margins you’re trying to protect?

Ryan Meo:

Sure. Absolutely. So, for us, we’ve got unlimited revisions. So, we’re okay with those things on our side. I don’t necessarily think the agencies need to open up the door that wide. For us, it’s a little bit easier because of how much recurring revenue we have, we can keep those doors open. For an agency that’s scaling, they might need to scale that back a little bit. I think most of the time, as long as we have the door open enough, we can make those changes. I think that’s excellent. And I think it helps the customers’ happiness towards the end. I think what you have to be careful of is the unrealistic expectations are the things that should’ve been talked about at the beginning. And sometimes that’s the agency’s fault, sometimes that’s the customer’s fault.

But that comes back to two things. One is being able to say, “No, we can’t do that for you. When we did that big onboarding process at the beginning you should’ve let us know, but it’s a little too late for that at this point. So, let’s finish the project and then we’ll circle back around and talk about that.” For example, if a real estate agent wanted a website, but they didn’t mention they wanted the MLS integration until halfway through. That’s a decent sized add on to the project, pretty time consuming. So, at that point I would say, “Well no, we can’t do that now, until after the project’s finished, then we can circle back around.”

Drew McLellan:

Right. Yeah, let’s go live and then that becomes phase two.

Ryan Meo:

Yeah.

Drew McLellan:

Yeah.

Ryan Meo:

Exactly, exactly. And then charge-

Drew McLellan:

Appropriately.

Ryan Meo:

It’s that we can’t do it now, but yes we can do it and it’s going to cost more. So, no problem. That’s step one. Step two goes back to that consulting. It’s sometimes it’s they just get … Everyone has this syndrome of, “I want this, this, this and this.” But when you start asking why, there’s not any good reason. It’s just because they saw somebody else had it.

Drew McLellan:

Subjective, right?

Ryan Meo:

Right, very, very. It’s, “I saw this website and I want this.” And I’m like, “Why?” And they’re like, “I don’t know, it looks cool.” I’m like, “Well, that doesn’t mean it’s going to help your conversions on your website.

Drew McLellan:

Yeah. You’re not going to sell more widgets.

Ryan Meo:

Right, right. So, I think that’s the biggest thing. That’s the probably number one way to shoot down all that little creeping scope stuff that comes in. Just start asking why and actually consult them out of it, if it’s not … And maybe they have a good idea and it’s like, “Yeah, let’s try that, it’s a great idea.” But most of the time, we know it’s probably a terrible idea. So, we just have to consult them on, “This is actually probably going to hurt you. You paid me, so I assume you trust me. Let me help you make decisions that are going to be in your best interest.” And I think that’s the best way to handle those things. But it’s so easy to say, it’s really challenging for a lot of people, particularly if personally that’s tough for you, it can be hard to say no or, “Let’s rethink this,” until you get used to it. You just have to practice it.

Drew McLellan:

Yep. So, as we wrap up, I want to make sure that I capture from you, if you could create the idea agency client, what do they look like, how do they show up, and how do they create a win-win so that you guys are always happy to get their call, always happy to help them with their clients, and are helping them knock it out of the park in terms of the deliverables, so that they can grow that client? What does that agency look like for you?

Ryan Meo:

Yep. Ideal clients, always the same, and they’re ones that are always the most successful that work with us and just in general. These are the seven-figure one to five million agencies making killer profit. They’re always doing the same stuff and killing it. One, they’re in some sort of niche. Typically an industry niche, opposed to a service niche. That’s number one. These guys are awesome to work for because then we can create programs with them from custom templates that they can tell, all over the board. Number two is they’ve got a killer project manager or multiple that know how to run a system and a process. And then three is they’ve got good sales chops. Most of our best agencies, they might have some good technical people on staff, but really what they’re good at is being marketers, breaking into an industry. For them, selling three projects a month, they could do that in their sleep. They’re looking to sell 10, 15, 20 or more. Because they’re actually trying to build a scalable business. Those are the agencies that I see that are winning.

And then ones that are focused on recurring revenue. Because that makes everyone more sustainable and be able to build and scale faster. Because that recurring starts setting your foundation of money that gets reinvested into your growth.

Drew McLellan:

Yeah, absolutely. Well, and I think agencies are so used to being everything is custom and you sell it once and then you have to go sell it again that the idea … And as agency of record relationships sort of fade away, it’s how do I replicate the recurring revenue that was the AOR model, but in different ways?

Ryan Meo:

Right. Yeah, absolutely. So, that’s where we see agencies are winning. These are one to five agencies with seven-figure revenues. And they’re beating out our agencies that are parts of radio stations and have hundreds of employees. They’re destroying them because they’ve created a much more simple model that’s easier for business to buy into, instead of all these, just like you mentioned all this custom projects that are hard for a small business to understand.

Drew McLellan:

Yep. Ryan, if folks want to track you down, if they want to learn more about ScaleSquad.com or they want to chat with you about how you have built a business that scales as well as you do, or just follow your thought leadership, where is the best place for them to find you?

Ryan Meo:

Definitely visit us on ScaleSquad.com, we’ve got some live chat on there. I actually man that a lot myself just because I enjoy it. They can also reach out to me, [email protected] as well, if they want to talk with me personally.

Drew McLellan:

Okay, awesome. Thank you so much for giving us a little sneak peak into how our partners are feeling about working with us, and specifically about how you are making great return and revenue on a type of project that many agencies are scratching their head and have sort of resigned themselves to that websites are a loss leader to get more business out of someone. And clearly, that doesn’t have to be that way. So, I appreciate you letting us take that sneak peek.

Ryan Meo:

My pleasure. Thanks for having me.

Drew McLellan:

You bet. Believe it or not, that wraps up another episode of Build A Better Agency. Man, the time goes by quick. Love sharing this content with you and I love spending the time with you. So, thanks so much for listening and sticking all the way to the very end. And for those of you that did stick around to the end, I’ve got a special new twist for you. So many of our podcast guests have books or other things that really expand upon the information and knowledge that they share with us during the podcast. So, we’ve reached out to them and we’ve asked them if they would like to give away some of their books or whatever classes, whatever it may be. And we’re going to throw some AMI things in there as well. We’re going to have some AMI swag and we’re going to actually give away some workshops.

All you have to do to be in all of the drawings, you only have to do this once, is go to AgencyManagementInstitute.com/PodcastGiveaway. Again, AgencyManagementInstitute.com/PodcastGiveaway. Give us your email address and your mailing address and every week you will be eligible for whatever drawing we’re doing. We’re going to change it up every week, so we’re going to have a lot of variety and we will pop an email to you if you are the lucky winner. You can also go back to that page and see who won last week and what they won. So, you can see what you’re in the run for. If you have any questions about that or anything agency-related, you know you can reach me at [email protected] I will talk to you next week, thanks.

Speaker 1:

That’s all for this episode of AMI’s Build A Better Agency, brought to you by HubSpot. Be sure to visit AgencyManagementInstitute.com to learn more about our workshops, online courses, and other ways we serve small to mid size agencies. Don’t miss an episode, as we help you build the agency you’ve always dreamed of owning.