This is a topic that many agency owners have with clients but rarely have with themselves or their team when it comes to the agency itself. Do you have a value ladder and how easy is it to access?
For more information about Drew McLellan or Agency Management Institute – visit http://www.agencymanagementinstitute.com or check out the podcast – Build A Better Agency available at all the usual podcast host locations.
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Hey everybody, Drew McLellan here from Agency Management Institute. This week, I am coming to you from the Brown Palace Hotel in Denver, Colorado. And as you can see, there’s an odd accoutrement to my room—a working jukebox. Apparently the Beatles stayed here in the mid 60’s when they did a concert at Red Rocks Amphitheatre, and they actually stayed in this room, or some of them did anyway. And as a commemoration of that event, this is now the Beatles suite, and it’s got all kinds a cool Beatles memorabilia around it, including a jukebox that works and only plays Beatles music. So pretty cool place, check it out. Quick thank you to Pam from Asheville for sending me the cool Tourists Minor League Ball Team T-shirt. Thanks Pam for that. So this week, I want to talk to you about heights. I hate heights. I’m afraid of them. I don’t even like being on the second floor of a mall and looking down over like the railing. It makes me a little queasy. So for me it’s not really about the height, like I don’t mind flying, but the sense of falling. So when I have to get on a ladder which I really try and avoid doing, I want the rungs to be super low to the ground, the first one, and I want them to be pretty close together so that I feel secure. And I was thinking about my own business, my own agency, and your agencies, and I was realizing that for many agencies, we haven’t really thought about the value ladder that we have built for our own shop. Oftentimes ,we’re consulting with clients and helping them build out a better value ladder, which is, “Okay, let’s figure out an entry-level price that someone can sort of try, do a sampling, get a taste of what your like before they go in for a bigger ticket purchase.” But a lot of times we don’t think about that when it comes to our agency. So I have a challenge for you. I want you to map out the value letter of your agency. So from, I don’t know you from Adam, to, maybe I downloaded something free off of your website, maybe an eBook or something like that. For many agencies, the next step is, that first rung is $20,000 or $50,000 or $100,000. That is a big first step. And as somebody who’s afraid of heights, just like our clients or our prospects are afraid of making a mistake and spending money with the wrong partner, that high of a rung that would make me really anxious. So what could you create? What could you offer that had great value that was a lower first step on your ladder? And what I recommend you do is, I recommend that you look at your agency’s sort of average gross billings for the year for a client. So let’s say, on average, your clients bill between a $100,000 and $200,000. Then I want the first rung of your ladder to be about 10% of that. So what could you offer that’s maybe a $10,000 first step trial, to sort of see what it’s like to work with you before you go in and sell the full package? Some clients aren’t going to require that. Some clients are going to have the faith and the confidence, or you’ve got a great referral, so they’re gonna jump right up to that $100,000 rung of your ladder. But others may want something that’s a little lower to the ground to give it a try and to feel more stable as they climb up the ladder and start working with you. So build out your value ladder and be thinking about, “Are there ways create a rung of the ladder that’s a little lower?” Alright, I’ll talk to you next week.