Episode 211

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Every year we partner with Audience Audit to conduct research that we know will benefit agency leaders. This year, we decided to re-visit some of the questions we initially asked in 2014 to see if there had been significant shifts. In some ways, the results showed a consistent trend and in some other areas, there’d been some pretty significant changes.

In the 2019 study we included clients from the US, Canada, Australia and the UK and there were over 1,000 respondents who participated.

In this episode we’ll walk you through some of the most significant ah ha moments in the study in terms of what clients value, how they view us, and the kinds of work they think we do best. We will also talk about some of the new questions around agency specialization and agency owner involvement in key accounts.

Listen in as Susan Baier, president of Audience Audit and I explore the insights and talk about the implications of this new research. We’d also like to invite you to join us on November 12th (if you’re listening to this in real time) as we walk folks through every single question and data point in a live webinar just for you!

A big thank you to our podcast’s presenting sponsor, White Label IQ. They’re an amazing resource for agencies who want to outsource their design, dev or PPC work at wholesale prices. Check out their special offer (10 free hours!) for podcast listeners here: https://www.whitelabeliq.com/ami/.

What You Will Learn in this Episode:

  • What remained steady and what shifts we saw from the 2014 study
  • The three distinct audience segments we uncovered and how each of them view agencies
  • Why over 50% of all respondents work with an agency who is 200+ miles away from them
  • How you can get the complete download during the webinar on November 12th

The Golden Nugget:

“I love the work we do for agencies because they’re my people. I want to help them win the game every time!” @susanbaier Click To Tweet

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Speaker 1:

It doesn’t matter what kind of an agency you run. Traditional, digital, media buying, web dev, PR, whatever your focus, you still need to run a profitable business. The Build a Better Agency podcast, presented by White Label IQ, will show you how to make more money and keep more of what you make. Let us help you build an agency that is sustainable, scalable, and if you want, down the road sellable. Bringing his 25 plus years of experience as both an agency owner and agency consultant, please welcome your host, Drew McLellan.

Drew McLellan:

Hey, everybody. Welcome to another episode of Build a Better Agency. Thank you for coming back if you are a regular, and welcome if you have just found us. Super happy to have you. I am super excited about our topic today. Before I get into that, just a reminder, I am super excited. Currently, I’m super everything today. I’m super excited to have launched the Build a Better Agency Summit. That is the very first conference that is specifically built for small to mid sized agencies. And when I say small to mid sized, I mean whether you have two people or 10 people or 100 people, maybe a couple hundred people, this is the conference for you. Unlike all the other agency conferences out there that define small as being 300 or 400 people, I know what a small and midsize agency looks like and we have built a conference just for you.

This is all about making your agency stronger, more scalable, more sustainable. And if you want to, more sellable down the road, but certainly more profitable. That’s all of the topics we’re going to be talking about are going to be about how do you actually build a stronger, better, more sustainable, more profitable agency. That event is in May of 2020, which is only a couple hundred days away. And right now, we are at early bird pricing. I would love to have you there. Because of the space we’ve reserved, we only have room for so many people. And we’re about 30% or 35% sold out right now. So please don’t wait too long. I know it feels like May as a long ways away. But you know what, in a blink, it will be the holidays, and then it will be New Year’s. And before you know it, I’ll be talking about spring showers. And hopefully, we will all be hanging out in Chicago together at the Build a Better Agency summit.

If you head over to the Agency Management Institute website, so agencymanagementinstitute.com, the very first button on the upper hav is BABA Summit for the Build a Better Agency Summit. And you can learn all about it there. You can see who the speakers are, some of the sponsors. We’re still adding folks for sponsorship so that will keep changing, and some amazing, amazing folks who are going to be sharing their expertise and knowledge with us. And of course, you’re going to be hanging out with other agency owners and other agency leaders. So you’re going to learn a lot from the speakers, absolutely. But you can also learn a lot from the people you sit next to at breakfast, at lunch.

So I’m very excited about it. I want you to be there, likely to share in this inaugural event. So head over, grab your ticket now while we’re at early bird pricing, and I will see you in Chicago.

All right, so for today’s topic, we are welcoming back Susan Baier from Audience Audit. As many of you know, Susan and I for the last five years have partnered on what we have defined as the Agency Edge Research Series. And so every year we go out into the field and we do primary research, talking to clients who hire agencies. So we only talk to people who are actively in relationships with agencies and we delve into some aspect of that agency relationship. In the past, we’ve talked about bizdev. In the past, we’ve talked about how they feel about AEs. Last year, we asked them about outsourcing and how they decided when to outsource and when to bring it in house.

And this year, we did a really interesting thing. We we went back to our original study in 2014, and we decided to revisit that same topic, which is how clients view their agency relationship, and what they’re looking for in an agency partner, what matters to them. So we repeated many of the same questions because what we wanted to see is in five years, what had changed and what had held true. And then we also added some new topics that we had not covered in the 2014 study. In addition, we expanded the audience, both in terms of budget size and also geography, and so we’ll get into all of that, but I’m super excited to tell you about it.

We are doing a webinar. If you’re listening to this real time, Susan and I will be doing a live webinar on November 12, 2019. So just in case you’re listening to this in 2020 or 2021. Anyway, we’re doing a live webinar where we will sort of dig through the data with you on a webinar so you can ask questions, and we can slice and dice the data based on your questions and show you different things like how did women respond to that or how did the over 40 crowd respond to that, whatever that may be. So you’re welcome to do that as well. And we’ll give you the details inside the podcast of how to get that. If you’re not listening to this real time, we will certainly post the webinar, so you can watch it after the fact. So do not fear. You are not going to be left out. So without further ado, let’s jump in and talk about this research because I think you’re going to find it fascinating. All right, Susan, welcome back to the podcast, always fun to have you on the show.

Susan Baier:

Thank you. It’s always fun to be here, for sure.

Drew McLellan:

So in the intro, as you know, I was telling our audience that we’ve been at this for five years now and how we decided to come back and and look at some of the same questions, but also augment the questions that we asked in 2014, with some different questions, and that we broaden the audience quite a bit. So can you talk a little bit about the differences between the 2014 study and the 2019 study?

Susan Baier:

Yeah, you bet. I mean I was really excited about this opportunity, because we don’t always get a chance to go back and look again, and see what’s happened in the intervening years. And I feel like we’ve learned a lot, you and I from talking with agency clients and hearing their feedback. And so there was some things that we wanted to add to this study that we didn’t know to have in the 2014 version. So I was excited about this from the get go. One of the advantages we had was that we talked to many more agency clients in the study that we did in 2014. We had 271 of them five years ago, and this study had 1,060. So a really strong group. We also had folks from outside the U.S. So while 62% of our agency clients were U.S. based, we also had clients in the UK and Canada and Australia, so we’ve got an opportunity to see with some statistical reliability the extent to which what we were seeing in the U.S. was consistent in terms of agency attitudes outside of the country, in places where we know clients are operating and working with U.S. based agencies or whatever. So that was really interesting.

The other thing that changed is that back in 2014, we were really focused on sort of the smaller client. So for that study, all of them had a marketing budget of $1 million or less. For this study, we went all the way over 10 million, I think we went up to 20 million or 25 million, and including that group of larger budgets really gave us some insight that we didn’t get in 2014, which I found particularly interesting, and we’ll talk about that as we go through. And then as you said, we had some additional attitudes that we wanted to explore that had come up over and over again in the intervening years, and some different things we wanted to check on. But really, we kept the core of the attitudinal questions that we were asking the same, because we really wanted to see if the segments that we saw five years ago in 2014 were still there. We don’t predetermine these buckets, so it wasn’t a question of, we’re assuming we have the same buckets as last time, let’s see what their size is. We really didn’t know if underlying attitudes might have changed, and we would see a different landscape five years later. So that was really interesting for me going into this project. And of course, we didn’t know what we were going to find. But I think there’s a lot to chew on.

Drew McLellan:

Yeah. So one point I want to make is, although the sample size was much bigger in 2019, even the 2014 study was statistically valid.

Susan Baier:

It was.

Drew McLellan:

Yeah, okay, I just want to make sure people go, “Oh well, maybe that 2014 study wasn’t as-”

Susan Baier:

Oh, no, it was good. No, it was fine. What we did in this study is really broadened that group that we were exposing to, bigger clients, clients outside the U.S. And so we basically got a wider lens, but yeah, no, the 2014 study was good and strong. And so the question was, was that still going to apply and is it going to apply in a broader context?

Drew McLellan:

So as we discovered, what was interesting is that the attitudinal segments stayed the same. So for listeners who perhaps are not familiar with that methodology of research, can you explain what attitudinal segments are all about and how that work is done? And then we can talk about the segments in 2014 versus what we found out in 2019.

Susan Baier:

Yeah, you bet. So, a lot of your listeners are probably familiar with segmentation of one kind or another. It’s basically just grouping respondents or customers or prospects or whatever, into sort of understandable groups that are defined by particular characteristics. And so what a lot of organizations are looking at is their customers or their prospects by age, income, gender generation, millennials, whatever, or are looking at them based on sort of the actions they’ve taken. These folks have purchased in the last three years, these folks have bought more than $500 worth of industry on the B2B side, et cetera.

Attitudinal segmentation is instead looking at how they feel about a category, how buyers and prospective buyers sort of look at walking into a purchase decision process, what place this particular product or service has for them, how important it is for them, how invested they are in this decision, how knowledgeable they feel about making a good choice for their organization.

So it’s really what’s behind the ears, as opposed to sort of how you can look at folks or companies on paper. And we do it, it’s online survey research. And we do it by putting in front of these respondents anywhere from 35 to 45 of these attitudinal statements, and everybody who takes the survey has to rate each one of these and say, “I disagree with that. I agree with that to a greater or lesser degree.”

And then while we ask them a lot of other information in the survey about what they’re doing and what they’ve done in the past, and what they think we’re going to do in the future, the segmentation itself is just based on the ratings on those attitudinal questions. And we don’t go into it assuming we know what the segments are going to be. A lot of times, clients or even agencies have a very specific idea about, “Oh, I already know what the customer base looks like, and how it kind of lays out.” And that doesn’t go into the decision process for the segments. The segmentation itself is just math. It’s purely mathematical. So we kind of don’t know, until we do that analysis. For me, it’s like Christmas, I get to open up the box and see what’s inside. So going into this process, we had a lot of the same attitudinal questions in that group of 35 to 45 statements, but we didn’t have the buckets pre determined. So that was an interesting process to go through.

Drew McLellan:

Yeah. So in my layman’s terms, when I explain to people this kind of research, what I say is you walk into a room. And because we’re used to doing everything by demographics, and that sort of psychographics, you walk into a room with 100 people, and they all look exactly the same. They’re all middle aged women of a certain socioeconomic status, blah, blah, blah. And you can’t really tell the difference between them. But what your work does is it’s like thought bubbles appear over their head, and you can hear what they’re thinking and what they believe. So now you can begin to group them based on things that you cannot see, just with the data that’s easy to access about the average Joe today.

Susan Baier:

Yeah. And as you know, I mean in most of our studies, the things that we would normally assume cluster people together, like age or income or company size, don’t end up being part of this story at all. So yeah, so I didn’t know what we were going to find, honestly. I was hopeful that we would have some echoes of what we saw in 2014. But what we saw, I think, was really fascinating. And that was, we saw the same segments at play in this population in 2019 as we saw in 2014. So five years ago, we found three very distinct sort of attitudinal groups within agency clients. We found this group that we call looking for love, which are people who really want that very close advisory partnership, a collaboration with an agency who becomes more than just a vendor, and even more than just a marketing partner in many cases is really sort of helping them figure out the path ahead, and that’s a very sort of closely held relationship, a longer term relationship, and that’s what that type of buyer is looking for.

Drew McLellan:

Right. And some of the other things we saw in that group is they want an agency to lead them, and they want an agency that offers a lot of a wide variety of products and services, because that agency is going to sit at the strategy table, at the decision making table, at the C suite table. They’re looking for that. So in agency language, we always talk about, we want to be a strategic partner to our clients. This segment is looking for that kind of partnership.

Susan Baier:

That’s right. That’s these folks. That’s what they want. So that was the first group. But then we found this other group, we call them playing the field. And they view the agency relationship very differently. These folks use agencies a great deal, and they outsource to agencies a lot. So I don’t want anybody thinking that they are anti agency. They are not at all. But they are less likely to see this kind of partnership as valuable. In fact, they sort of see agencies as kind of a necessary evil for doing the work that they need to do. And these folks honestly believe that their best work comes from changing agencies periodically. Even if an agency is doing a good job, they don’t want to get in a rut with a specific sort of path of thinking. So they like changing agencies out. They like working with multiple agencies. And so that relationship, and what they’re looking for is very different than what it was for the first group. What have you got going that’s going to help us today? And two or three years from now, even though we like you, and you’ve done a great job, we may go in a different direction.

Drew McLellan:

Yeah, and one of the things that was true of this group in 2014, was a couple of things that a lot of agency folks found a little disturbing, one which was small agencies were better because they could be a big fish in that little pond. And two, that when they looked at the agency roster of employees, what they were really looking for was sort of youth and enthusiasm, as opposed to age and experience. So all of the gray haired agency owners in the room, were not loving that stat five years ago.

Susan Baier:

No, yeah, that’s absolutely true. And it parallels what we see with these folks in some ways with respect to the age of the folks managing some of these big client accounts are not the gray hairs like you and I. They’re the younger folks.

Drew McLellan:

You speak for yourself. And then the third segment, we found, we named single and satisfied, and what was interesting about these guys is that they honestly, they kind of have their act together. So they are a group of clients who have a strong strategy, or they believe they have a strong strategy anyway. They already have a clear marketing plan by their own definition, and they want to place an order. And so they are often looking for agencies that have a very specialized skill set that they don’t have in house, and they’re looking for someone to help them execute on the client’s already developed marketing plan or strategy.

Susan Baier:

Yeah, and in 2014, this group in particular said that agencies could be a valuable source of new ideas, fresh thinking. But in a lot of cases, the company, the client could execute on those. So they were sort of, agencies were either filling a very specialized function for this group that was too complex or too specialized or whatever for the client to do themselves. Or they were generating ideas that the client could handle from a tactical standpoint and incorporate into what was already pretty robust strategic and marketing operation.

Drew McLellan:

Yeah. And so what was interesting though, too, was so five years later, fast forward now, while we, I don’t know about you, but I was kind of surprised that all three segments held true. But there were some changes in each of the segments.

Susan Baier:

There were some minor changes. So when we look at the attitudinal characteristics that group together for each one of these groups of clients, we did see some tweets. So in 2019, that looking for love group, that real like, I want a partner group, one of the things that popped up new for them on the attitudinal front was their belief that today’s marketing requires a lot of technical expertise. So whereas back in 2014, advice was really good, strategy was helpful, having a good sense of things in general. This is a new thing they’re looking for, which is this belief that whoever they’re working with can’t just have strategic chops. They really have to have it down in terms of technical execution, because that’s what today’s marketing requires.

Drew McLellan:

Given the changes that we’ve seen in marketing in the last five years, that makes perfect sense, right?

Susan Baier:

It absolutely does, yeah. And then the other thing is, it’s this group, it’s looking for love in 2019 that now says it’s the smaller agencies who are more focused on their needs. Where five years ago, that was that sort of playing the field kind of folks, now this group has really become the big fans of the smaller agencies, which I think is good for the smaller agencies that we’ve presented to already, that that’s a positive move for folks who want this kind of a client and are in a smaller agency, because they clearly believe that.

Drew McLellan:

Yeah, the playing the field folks also had some changes, which I think were interesting.

Susan Baier:

They did. So one of the interesting things about the playing the field folks was that they were outspoken this year about their own shortcomings, which we didn’t see to the same degree in 2014. So they say their organizations don’t always know what they’re doing with marketing. The respondents admit that even if they do, their organizations don’t really consider marketing a high priority, and this is the group and this is one of the new things we added based on some previous studies that we’ve done for the Agency Edge, we added this attitude about outside marketing help costing more than it should. And this is the group that believes that is true. So the fundamentals of this group haven’t really changed in terms of the kind of relationships that they want, but they are less likely to say they really know what they’re doing or are doing a good job at it. And they’re also really placing less of a value on marketing help in general, more likely to say, as they did before, it’s kind of a necessary evil. But now they’re also saying-

Drew McLellan:

It’s an expensive, necessary evil,

Susan Baier:

I feel like that’s costing more than I should have to pay for this kind of, so I think an additional sort of corrosion of the value perception in some ways for this group on what we as agency folks traditionally think of as agency value.

Drew McLellan:

Yeah, I wonder, and I know the data wouldn’t answer this question. But I wonder if you work for an organization that doesn’t value marketing, and you have to justify your budget all of the time, the constant fighting for money, and you’re sort of the conduit, and you’re stuck between the rock and a hard place of the agency and whoever controls the budget, over time, I can see how that would wear away your attitude of the costs of agency services, because you’re having to defend them all the time.

Susan Baier:

Yeah, absolutely. And I’ve been in that situation on the client side, and so that’s hard. And I think these folks really do sort of have that sense. Even if it’s not their personal opinion, it is clearly what their organization has come to believe that they are reflecting, because that’s their job in terms of making buying decisions. And then the single unsatisfied folks, the ones who were doing well, are still there. And they’re still saying the same kinds of things. This time, they’re even more confident in reflecting on the capabilities of their in house resources and their abilities. And they’re actually less likely now to say that agencies are that sort of font of creative new ideas. I mean, if anything, these folks have more confidence than they did five years ago in their organization’s own abilities to do things. They don’t bad mouth agencies. They just don’t feel the need to the same degree.

Drew McLellan:

Well, and when you think about the trend of people taking work in house and building up internal departments and all of that over the last five years, you can see the correlation between that reality in our marketplace. And it would make sense that folks who have a big robust internal team would absolutely have this attitude.

Susan Baier:

Yeah, absolutely. And I think it’s worth sort of reminding our listeners that all of these folks are agency clients. Many of them have more than one agency that they’re working with. So they’re not agency naysayers. They are just within the context of agency clients really feeling different about how that relationship needs to work for their organization, and what implications that has on who they’re looking for and when they’re looking for them.

Drew McLellan:

Yeah. So I think one of the most interesting shifts from 2014 to 2019 was the percentages. So in 2014, the looking for love was 29% of the respondents, and that dropped down to 25%. And on the other side of the spectrum, the single unsatisfied were at 33%. That also dropped down, it dropped down to 30, which means that the playing the field group is the group that showed the growth, and so 2014, it was 38%. And in 2019, almost half, at 45%. So that’s a huge shift.

Susan Baier:

It’s a huge shift. And I think it’s because of what we saw happening between that group that was included in both years, the budget of a million or less, versus this expanded budget size that we included in the 2019 study. When we look at the million or less folks, the good news for the agencies who really want that looking for love relationship is that that group has grown substantially among clients with a budget of a million or less. 29% in 2014, now up to 20, now up to 40%, in 2019. So the good news is for the folks who are targeting that size of client, and what that kind of long, tight, collaborative relationship, the numbers are only going in the right direction. Higher percentage, 40% of the cl