Smart Agency Masterclass with Jason Swenk: Podcast for Digital Marketing Agencies

Michael Begg began as an Amazon seller and quickly saw an opportunity in e-commerce marketing. He figured how to successfully sell products online. That led to the idea of creating their own agency, AMZ Advisers, full-service, e-commerce, and digital marketing consultancy partnering with brands to evaluate and develop their e-commerce strategy. Today he joins us to talk about how he started scaling his agency, how he used third-party platforms to get his first clients, and how he stays on top of his niche. He also shares tips on how has had great success near shoring his team. 3 Golden Nuggets Play to your strengths. After establishing an agency and getting your first clients, you are probably thinking about scaling. Agency owners should always play to their strengths by figuring out the high-value and low-value tasks. Hire people that can start taking care of the low-value tasks. The importance of the first 100 days.  You got a new client, great! Celebrate, but also make sure to have a plan for the first 100 days to ensure retention. Joey Coleman speaks about the importance of the first 100 days when onboarding a client. In Michael’s case, his agency has set up an internal structure where the first 90 days are dedicated to the basics. That will give them enough information about the next steps and will give the client the first results to decide if they would like to continue the relationship.  Staying on top of your game. Platforms like Google, Facebook, and Amazon are constantly changing and if you take a step back from the implementation, you’ll fall behind, which will negatively affect your ability to train other people. Michael’s agency avoids this by selling products on Amazon themselves. This allows them to use their company as a guinea pig to learn things that they can apply to clients. Sponsors and Resources SweetProcess: Today's episode is sponsored by SweetProcess. If you're looking for a way to speed up processes in your agency, SweetProcess will provide the systemization you need to scale and grow your business. Check out sweetprocess.com/smartagency and get your productivity up. Subscribe Apple | Spotify | iHeart Radio | Stitcher | Radio FM How Near Shoring Your Agency Team Helps Scale Jason: [00:00:00] I have a great guest today and we talk about how he's grown his Amazon agency. And really he moved down to Mexico, created a team down there, and is really scaling it very fast. Really interesting episode. I hope you enjoy it. Are you frustrated with how long it takes you to get stuff done in your agency or tired of your team missing steps or falling through the cracks? You know, you may be looking for an easy way to capture SOPs to scale your agency faster and easier. Now, our partners at Sweet Process have created an amazing tool to help you overcome all these frustrations. Sweet Process really lets you create step-by-step instructions for every task in your agency. From writing proposals to executing client work and responding to client requests. So everything gets done more easily, no more mistakes or missed steps. Plus you'll have a central place where everyone employees, contractors, or even VAs can access your procedures anytime from anywhere, the best way to learn about how Sweet Process really can streamline your agency is to start using it. So exclusively for the Smart Agency masterclass listeners, you can try it out for 28 days free of charge. No strings attached. Just go to sweetprocess.com/smartagency to start your free 28-day free trial today. That's sweetprocess.com/smartagency to get your SOPs down and your productivity up. All right, welcome to the show. How are you doing? Michael: [00:01:42] I'm good, Jason. Thank you for having me here. Jason: [00:01:44] Yeah, I'm excited to have you on, so tell us who you are and what do you do? Michael: [00:01:48] Sure. My name is Mike Begg. I'm one of the co-founders of AMZ Advisers and we're an agency that specializes in the Amazon marketplaces. We help brands increase their sales, manage their advertising, and just maximize their visibility on the Amazon platform. Jason: [00:02:04] That's awesome. So how did you get started? And then tell me kind of the origin story about how did you transition to Amazon. Michael: [00:02:11] Yeah, so we actually started as, uh, myself and my two partners, we actually all started as Amazon sellers ourselves. Before that, I was actually working in retail. I was working at Sears in retail real estate development. And this was in like 2014, 2015. So it was a very interesting time for the business because a lot of things were, you know, the stores were really struggling, trying to figure out ways to make money. And at the same time, we kind of saw what was happening in e-commerce and saw an opportunity there. So originally we just started selling products for ourselves to make some money on the side. And we found out we were really good at doing that. And we realized that a lot of other companies, a lot of big brands, were really bad at it. So that kind of led to the idea of creating the agency, AMZ Advisers, and yeah, from there, we just went out and got our first clients. And it's been six years now and we just keep going forward. Jason: [00:03:03] So that's great. And so walk us through kind of, how did you start getting your first clients? Did you just go, hey, I see your position in Amazon. It sucks. Like, do you want our help or what? Michael: [00:03:15] Yeah. So the original way we started getting clients was, well, two different things. The first, I guess, sales meeting that we went on, uh, was with a distributor in Long Island. I'm originally from Connecticut. And I think we saw his, uh, job post on like Indeed for like an Amazon expert. And we just like reached out to him and we were like, look, you're not going to be able to hire anyone for this position. Uh, and then we kinda got the first meeting that way. But beyond that, platforms like Upwork, FreeUp, ODesk used to be, I think was part of, it was a part of Upwork, now freelancer.com. All of those, uh, we just started putting our profiles and our company on there and started taking jobs, even if they were low costs. Just to, to start moving up the ranks. And yeah, that's really how we started building and getting those initial clients. Jason: [00:04:04] You know, we had a mastermind member talk about how he generated like over a hundred thousand in monthly recurring revenue from Upwork. And I was like, there's no way, because I just always looked at it as like a platform like Fiverr, like find cheap labor. He's like, no, no, no. And he walked us through a strategy. I'm like, wow, that is really pretty clever. I was like, if that existed, I was like, I would have done that. Like, that was great. Michael: [00:04:29] Yeah, no, it was awesome. I mean, for growing a business, it was perfect to get started because we didn't really understand exactly what companies we were going after or what companies really needed this service. So it was kind of a way for us to learn and figure things out. And yeah, I mean that, it just kind of developed into building out a real sales and marketing strategy from there. Jason: [00:04:49] Yeah. Let's talk about a little bit about how have you been able to start scaling, you know, the agency, you know, I look at, you know, the first part. It's just really getting started, you know, going after the clients, knowing where you're going, getting that, you know, that direction. So as you're in that building phase, and then you get to that systems phase. So talk about a little bit about how have you guys been able to scale. Michael: [00:05:13] Yeah, I think you bring up a really good point there. And in that initial phase where you're kind of just getting those clients, it's really important to play to your strengths and what you're good at, what you're not good at. So the great thing about having partners in the agency business is that, you know, we each compliment each other. So like, I'm very good at marketing and advertising. I have a partner who was very good at sales. I have another partner that's very good at project management. So between all of that, that really helped us execute initially to get to the point where we could start figuring out the processes to go forward. So that's always important, I think when you're in that initial phase, and then when we're looking at that next level of building the processes, it's okay. Which way do we approach it. What are our high-value tasks? What are our low-value tasks? And can we start by getting rid of some of these low-value tasks to other people? So the way we started with that, at least from my perspective on the marketing side was, you know, blog writing. I started outsourcing blog writing instead of doing it myself, content marketing, coordination. So doing the outreach to other people, you know, I started outsourcing that to a VA. SEO link-building like started outsourcing that to a VA. So it started with those low-value tasks that really allowed me to focus on the higher value items. And then from there it's more of right now, how do I train someone to take over some of this higher value stuff? Because I mean, I think a VA is great for that low-value stuff, but getting them to execute on the high value is definitely harder. Jason: [00:06:43] Yeah. It's really challenging. So, you know, I like kind of the process that you went through of going like, hey, how do I get rid of a lot of the stuff? So what were some of, outside of just VA is like, let's talk about kind of the management level. What was kind of that first person like you guys are around 30 people now, so you got some structure in place. And a lot of times people look at it going, man, I would never want 30 people. Because there are kind of that process of like five employees and they're already maxed out and then they think all 30 are going to report to you. Which is, obviously that's a mistake. Like that's a bad, that's a bad structure to have with 30 people. So talk a little bit about the structure that you guys put in place and then how has it evolved? Michael: [00:07:26] Yeah, so I think originally the first people that we brought in that, you know, weren’t ourselves to help where, I guess I call them Amazon experts, the people that understood the platform and how to sell on it. And you know, that allowed us to start taking on more clients because now we can leverage their bandwidth to help with. Then we got to a certain point where we realized, well, we need someone to kind of oversee a lot of what they're doing to make sure it's consistent between what each of them are doing because everyone has different levels of knowledge within Amazon. And I mean, just with anything, you know, some people that are more experienced are going to have more knowledge than others. So we called them the Director of Account Management, uh, was the one that really helped oversee everything. That was our initial kind of manager position. And that handled the, the client-facing side of the business and it worked for a while. And then we figured out it didn't work. We had to kind of evolve a little bit more. And then on the back end of the business, you know, we obviously have a lot going on with, you know, coordinating marketing. I have a marketing manager that handles all of that for me. Content creation, that's a big part of our business is, you know, graphic design, SEO, copywriting. And we brought in a project manager to really help oversee that process. We promoted a designer to really lead the design and make sure designs were consistent across everything. And those are kind of the management positions we started, we started filling start helping us manage things better. Now that Director of Account Management role has kind of faded out to the point where now we have, you know, a real client success team and we have an advertising team. So now the account managers are responsible for managing the relationship. The client success manager is making sure that that's responsible for working. And then we have the advertising team making sure that they're actually getting the results. So, there's definitely an evolution there and I'm sure there's a lot more, that's going to come, but from failing a lot, that's kind of where we got to where we are now. Jason: [00:09:19] Awesome. And then, is there a framework that you've developed over the years for making sure that you deliver, you know, the value to your clients that are on Amazon? Because I always find with successful agencies, there's always kind of a methodology or a framework that they actually follow. Michael: [00:09:39] Yeah, I agree with that. I think there kind of needs to be, we call it a playbook or, you know, just something that you can implement. That's going to get consistent results across clients. I mean, you need to be organized in a way, especially if you're going have people working for you. So yeah, we have implemented like, something like that. I mean, we focus on, uh, an initial 90-day plan to get, make sure every client, we hit these things in the first 90 days from during that period, we're collecting a lot of data and that's going to help us formulate our strategy beyond there. But yeah, I think having an initial, uh, methodology to make sure that they're getting the right results in the beginning with all the setup and you know, all the fundamentals. And then from there seeing where the data is taking us and then implementing the strategy then. Jason: [00:10:21] So let's dive a little bit more into kind of the 90-day plan. So let's say someone goes, hey, um, I want to, you know, be a big dog on Amazon. This is what I want. Right. And, uh, like walk me through that process. Like, are you selling them a 90-day plan or are you selling them something different? Michael: [00:10:39] Yeah, we're selling them. I mean, we obviously want this to be a long-term partnership. We want it to last longer than 90 days, but in our opinion is that, and our view on it is that if you don't see the value within the first 90 days, then like what's the point of working with us. So, you know, initially, we just got to make sure that everything is set up in the account correctly. A lot of times within Amazon, people are doing things incorrectly there, you know, it's just costing them money or making them look not as good as it could. Uh, from there, you know, doing content, making sure everything is optimized. From there, starting advertising and like, yeah, moving down the line, but starting like really with the basics and the fundamentals. And then we think after, you know after we do those things within the first 90 days, you're already going to start seeing a pretty good return on the investment. And that's like what we call the window to show the value and beyond there it's just continuing to show value primarily through advertising and you know, other marketing strategies. But yeah, that's kind of the way that we approach it. We don't sell them on the idea of a 90-day plan. It's, you know, we just have that internally. Jason: [00:11:39] Yeah, I love that you do that the 90 days, you know, I had a guest on, uh, Joey Coleman who will link up in the, in the show notes. If you guys go there, as well as we had him speak at our Digital Agency Experience, and he talked about why the first one hundred days is so important when you're onboarding a client. Like we all think of, hey, we got a new client. Yeah. Celebrate, ring the gong, ring the bell. That's it, but it's all about like retention, you know, like when I'm chatting with agency owners and we talk about, you know, alright great you're good at attracting. You're good at converting, but are you really good at streamlining the operations where, which, you know, part of that is retention and upsells to other things. So it's yeah, you could be like, there's a lot of companies I know that will be nameless. I won't call out anybody that we're really good at sales and marketing, but they sucked at operations. And you have to kind of get all three of those together. This has all been great. Is there anything I didn't ask you that you think would benefit the audience? Michael: [00:12:37] Yeah, I mean, I think there's something interesting when we're talking about, you know, running a business and an agency in general, and I think this last year has made it more relevant than ever. It's just the ability for remote work and that's something that we really leveraged within our business. I mean, you know, virtual assistants are pretty common, but, uh, I actually moved, left the country. I live in Mexico now and, you know, what's helped us build our agency is by building a team down here. So, you know, now I'm leveraging not only the cost savings but the ability to scale faster by hiring more people. And, you know, I'm hiring. Like I talked, like I talked about the range of low value, high value, again, you know, the great opportunity is now that I'm here with them and I can train them on the high-value tasks. So, having the ability to hire a team like that, international, that's not virtual assistants that are on the other side of the world is definitely been very important for us. It's really allowed us to improve the product quality as well, because I think a lot of agencies generally go that independent contractor route where you definitely don't have as much control versus actually having an employee. Jason: [00:13:39] And let's talk about this a little bit, because we actually bought a company on our agency in Costa Rica that did the very easy development work. You know, it was only one time zone away. We were on the east coast at the time and in Atlanta and they were, you know, on central time. So it was really easy, but we always had a struggle with giving them more qualified or thinking tasks. And you just mentioned like you live in Mexico, which is great. I'm sure the weather's a lot better from Connecticut. I grew up in Long Island, so I know how bad the weather gets up there. So Mexico is like, yes. So if someone was hearing this and going, man, I'd love to get a lower-cost labor, but really good. Does it require them having to move there or what have you found is the musts? Michael: [00:14:31] I don't think it requires them having to move there. But I think a lot of times, and this is a big challenge where I think a lot of agencies struggle and I know we struggled with it, is transitioning from I'm hiring someone where I think I know what they're doing to transitioning to I'm hiring someone that I need to train to do what I want. And, you know, that can, all it can be done virtually. I mean, a lot of companies succeed like that one example, you know, we, I have another company down here that's a US-based company. And what they do is they have literally a live camera in the office. So it's like in a TV screen. So it's just like, two-way communication live. If someone has a question, they answer it there. It's almost like being in the physical office. So I think there's a lot of ways to tackle that problem. But if you don't, aren't in that position to really train them, if you don't have, I always say documentation, good SLPs build on how to do things, it's going to be that much harder for them. And I think that's really where a lot of people will probably fail with that. You know, for us being here in the office was great initially, because, you know, we were able to hire people. I mean, when it comes to thinking of people that can think critically. Yeah, we've hired some engineers. We've hired MBAs, uh, people that have really helped us scale in that sense because they have more business experience. But yeah, if we weren't there supporting them, we weren't training them. Like we were, we probably would've just set them up for failure. And then, you know, we wouldn't have seen the return on it. So, and now, again, being remote with COVID, I'm the only one in my office, out of all my employees. So it's definitely still possible to do it. You know, we, we've trained over the past year. We've trained another five people completely remotely up to the point where they're able to, you know, take clients. Uh, handle everything, you know, understand all the strategies. So it's doable, but obviously, that training piece is the key to it. Jason: [00:16:17] like what you said about the TV and the two-way. I just keep picturing the Wizard of Oz. Right? Like the guy, you know, the guy always watches me. Like, I'm watching you, like, you got a question? You're not working? That's pretty funny. That's when you mentioned that, I was like, oh my gosh. Michael: [00:16:35] It's definitely like strange in a sense that it's kind of like big brother watching you, but at the same time, it actually, I think it's really an interesting idea if you're collaborating between your team and a different country. So like for example, a good example of this is let's say you're the marketing head. You're the CMO. And you hire everyone down here. So you have your entire marketing team here, but you're based in the US so you hire a CMO to have a team down here. That's a great way to collaborate. I mean, yeah, I kind of, it still has that big brother vibe to it, but now you can literally direct them in the office and be like, all right, just have this call. This is what I figured out. This is what we need to do. Whatever it is in real-time, instead of dealing with time zone differences, you know, outsourcing stuff to Asia. I mean, you already know from Costa Rica, but yeah. Central time zone for us is huge too. Jason: [00:17:24] And let's talk about the people and then we'll wrap it up. Are you bringing on people that already have the experience or are you training them from the ground up? Michael: [00:17:36] It's very tough to find people that have Amazon experience. Luckily we have a mix of some that do some that don't, we've found some employees that are Amazon sellers themselves down here that sell primarily on Amazon Mexico, that we've been training to, uh, you know, do better. I mean, they understand how the platform works, but they're not massively successful on it. And that's kind of what we've been able to. That's a, that's a much shorter training timeline than it is for other people. We've also hired engineers. Uh, engineers have been very good mainly because their, their problem solving, you know, if there's an issue, they can kind of figure it out when it comes to learning how the platform works. That's something that's very interesting to them. And we've also hired, uh, people with digital marketing experience, even though if it's not, even though it might not be related to Amazon specifically. So, uh, we've hired a couple of employees that had backgrounds in, uh, SEM, uh, other paid ad types, social media, uh, and they've been able to understand the advertising concepts very well and pick that up very quickly. So yeah, I mean, it's very hard to find exactly what we're looking for in our niche, because Amazon is fairly new and there's not a lot of talent out there. And the people that do know what they're doing usually are creating their own agencies or. Or doing consulting themselves. So yeah, that training piece is just massive. Jason: [00:18:51] And then I guess I lied. I have one more question, especially with, you know, something rather new or, or just staying on top of your game. Like, I feel a lot of agencies, you know, they knew how to do something cool. They got into this by accident, but they're not able to stay on the top of their game and, and, and get it to a point where they can actually train others. So, what are some things that you guys have done to stay on top of your game that enables you to train someone that has no knowledge in it? Because I feel that if all the agencies could really understand that and then do that, their work would be so much better. Michael: [00:19:29] Yeah. It's definitely a tough one because once you take a step back from the actual implementation and doing things yourselves, you know, things are constantly changing, whatever, whether you're using Google, whether you're using Amazon or Facebook, whatever platform you are on, if you're not constantly doing it, I think that's going to definitely have a negative effect on your ability to train other people, or you need someone that is doing it to have that knowledge to train other people. So. The way that we've kind of, I guess, avoided that problem is that, you know, and we're still selling products ourselves. So we have an entire separate business that, uh, is selling our own brands online on the Amazon platform and on other platforms. So we're constantly testing and trying new things within that account first to see how it works. And then, you know, we're, we're the Guinea pig and then we're implementing it to all of our clients. So. I think that's one really good way that we're kind of staying on top of what's happening on the platform. I mean, it's definitely getting more and more competitive, but by continuing to do it ourselves we're making sure that we're not falling behind. Jason: [00:20:29] I love it. I see that all the time. And I love using the agency as kind of an incubator or having other, or other companies as an incubator to test out and to really kind of, because a lot of times clients don't want you to test out stuff, but some do like if you go after the right ones, they do. But I like that. So awesome. This has all been great. What's a, what's an agency website that people can go and check you guys out. Michael: [00:20:53] Yeah, sure. So, uh, the best place to check us out is our website, amzadvisors.com. If you or any of your clients are looking for help where we're always going to help, or if you just want to email me directly, you can get me at my email mike@amzadvisors.com. Jason: [00:21:08] Awesome. Well, thanks so much for coming on. And if you guys enjoyed this episode and you want to be surrounded by other amazing agency owners that can see the things that you might not be able to see and really work on attracting the ideal clients, work on converting them at a high rate and also work on streamlining your operations, where. You're constantly building that talent where not everything has to flow through you, which is pretty frustrating. I would like to invite all of you to go check out the digital agency elite. This is only for experienced agency owners that want to grow and scale fast. I mean like double in the next year, go there, go to digitalagencyelite.com. And until next time have a Swenk day.

With around three decades of experience running professional services firms, Don Scales understands first-hand how to make them successful. He is currently the Global CEO of Investis Digital, a global digital communications company that helps world-class businesses manage their corporate brands. Today this industry veteran joins us to talk about his experience in the business, the reasons behind failed mergers and acquisitions, and share some funny stories. 3 Golden Nuggets If you continue to have to do it all, you’ll never scale. So many agency owners are at the million-dollar mark and wanting to get to the eight-figure mark. Don’s advice is to learn to delegate. Find people who are great at what they do and then get out of their way. You may make some mistakes if you do, but you’ll move on from that. Building a team with staying power. Consistency is the key when it comes to leadership. Your employees won’t want to come to work every day if they don’t know which version of you they might encounter. Be consistent with your leadership style and make your decision-making process transparent, so they will learn to make decisions in that way as well. Why do some mergers fail? If you look at what people really examine when they look at potentially buying a company, you’ll find that they don't spend a whole lot of time looking at the value set of these companies that they're looking to buy. So many times when a merger or acquisition ends up failing you find out afterward that the cultures were off. You need to spend some time analyzing whether there is compatibility and if the values align. Sponsors and Resources Agency Dad: Today's episode is sponsored by Agency Dad. Agency Dad is an accounting solution focused on helping marketing agencies make better decisions based on their financials. Check out agencydad.money/freeaudit/ to get a phone call with Nate to assess your agency's financial needs and how he can help you. Subscribe Apple | Spotify | iHeart Radio | Stitcher | Radio FM Avoid a Failed Merger by Staying True to Your Agency's Values Jason: [00:00:00] What's up, agency owners, Jason Swenk here, and I'm excited to have an amazing guest. Now, this guest has been in the agency world for a very long time. He started when he was one and he's grown several agencies and the current agency that he's, a global CEO has over 500 employees. They're approaching $90 million in revenue and they've done over 40 acquisitions over the, his lifetime. And I'm really excited to get into it. So let's jump into the episode. Hey, Don. Welcome to the show. Don: [00:00:39] Hey, good to see you. Glad to be here. Jason: [00:00:42] Awesome. Well, I'm excited to chat with you and learn from you because you've been in it for a long time and you have a lot of experience. So for the ones that have not heard of you yet, tell us who you are and what do you do? Don: [00:00:54] My name's Don Scales. I am the global CEO of a company called Investis Digital, which is a UK-based company. It’s private equity-owned by Investcorp. Uh, we just recently exited from, uh, a six-year relationship with the company called ECI out of London. Uh, so we're very excited about our Invest Corp relation. Then prior to that, I was CEO of a company, I'm sure you heard of, called iCrossing, iCrossing, we managed to take that to, um, some $140 million, exited several years back. So I was there for a good eight years, nine years. And then prior to that, I was CEO of a company called Agency.com, which is a pioneer in the web development space. And it's one of the, if you will, one of the founding companies of web development. So that takes me back all the way to 1999 in the digital age, that's kind of like dog years. So I've been around a long time. Jason: [00:02:00] I started our agency in 99 and yeah, I used to love those days. It was kind of like no one knew what websites were, and I could literally go through the yellow pages and go, oh, you don't have a website here, so. Don: [00:02:10] And in fact you'll, you'll get a kick out of this. Back in the day, people would send us RFPs and we, we'd send them an invoice for 50 grand just to read their RFP. Jason: [00:02:25] I love it. Don: [00:24:10] And that was good business. Jason: [00:02:25] I love it  Well, I think we're going to get along well, because I always looked at RFP as, um, you know, stands for a couple of things, Request for Punishment as one of them. Other ones, I probably won't name on this show right now. I don't know if I can talk to you that way. But, uh, let's jump into that because that's interesting. Why would you send an invoice for 50 grand to respond to their RFP? Don: [00:02:47] Because, like you said, you could go to the yellow pages. It was just such a demand, and we had very limited resources of people who could do those kinds of work. And so we had to make sure that, uh, every, every minute of every day was, uh, paid for in some way, shape or form. And so if the market would take it, and they did, and they'd pay, it would, we'll invoice. Jason: [00:03:12] That's the biggest foot in the door I've ever seen. So I always believe in like, charging something as a slice off of your core offer, you know, in order to kind of see if they're serious and also kind of prove like the relationship back and forth, but you guys have the win right now of the highest foot in the door yet. And, and you guys said you converted too. That's awesome. Don: [00:03:34] Yeah, we did. And then, you know, then, then everything changed in 2000 and now it was like, it was. Just, the whole market would be evaporated on me. Jason: [00:03:47] Well, that’s what helped us little guys back then when the market crashed, I was like, all these big guys going down, here's our opportunity. You know, let's get on what I call the strategy line, where everybody else is kind of cringing and kind of like they're on that roller coaster. And that's what allowed us to really grow. Don: [00:04:05] You know, it was one of those times when there was so many bigger companies. Yeah. The biggest thing that hit people back down was when it got bigger, they all invested in real estate. And then after that, you had all these fixed commitments and real estate, then the market just evaporates and they're stuck there with all that office space. Jason: [00:04:23] So, what's the key…? You've seen so many agencies go from a certain size and just blow it up. And a lot of people listening, you know, they're in the million mark, they're trying to get to the eight-figure mark. Some of the eight-figure guys are trying to get to the nine-figure and tens and so on. And you've gone through many, many levels. So what are some things that if you're right in the middle of like, let's say a $5 million agency, what do you need to do in order to really kind of, to accelerate your growth that you've seen. Don: [00:05:00] Yeah. So I think there's an evolution. So when there, when you get to the $5 million mark, and then when you're a very small agency and you're a founder, the biggest thing you have to learn in order to get to the next level is you have to learn to delegate. And so if you can find the right people and if you have, if you continue to have to do it all yourself, then you'll never scale. But if you can find the right people and you, and you're willing to delegate and you may make some mistakes and, uh, if you do, but you, you can still move on from those mistakes and you'll have a chance to delegate. And then beyond that, as you continue on, you have to bring in more discipline in your organization's structure. They, you know, there's a lot of research that shows that most agencies sort of tap out either, one, right there where the owner has to start delegating, that's, that's one key point. And then there seems to be another flex point, right around 75 to a hundred employees. For some reason, that’s when the organization becomes, uh, not as flat and it gets a little bit more widespread. And so you have different players involved. And that seems to be a place where organizations have hard times as well. Once you get past a hundred employees, I think you can scale up for, you know, you can do a pretty good job of getting scaled. Cause you have the, if you manage to get the structure, you have the discipline and you have the management team in there and you've got a lot of the right parts. Jason: [00:06:31] I always look at, in our agency mastermind, especially with the guys that are close to that, we're always talking about recruiting and really, how can we make our leaders better leaders. Like, that's our major focus rather than how do we make ourselves better. Right. Because we're literally kind of replacing ourselves. So what have you seen working well, or what's worked for you in the past to make your leaders better? Like you brought them in at a certain level. How did you keep getting them up to the next? Don: [00:07:04] First of all, you have to be willing to let them grow with you. So, like you have to give them something that maybe, that you know is not necessarily in their sweet spot, but it's, it's a growth opportunity and you have to be willing to let people might make a mistake if they're going to make a mistake. If you're not the type who can deal with the issues of making a mistake or a client failure of some sort, then it's going to be difficult because then you have to take these people, dust them off, tell them what they did wrong, pat them on the rear end and send them off and go do it again. Eventually, they start building up a real good experience, basically, they can do this stuff on their own. And that's how, that's how you build a team. And then once you build that team, you stay with it. Now, I’ve found that the best way to build a team and hang onto the team is, I'm a firm believer that as an executive you have to be very consistent in your leadership style. And so if you go to work every day and one day, you're just, just a normal guy. And the next day you're ranting and raving and you want to shoot anybody that walks in the door, nobody's going to work for you. But if you're, if people can say I know, I know Don, he's always this way, you know, consistent and you're, and you're consistent in your thinking and you make decisions so that it's almost transparent to these people, how you're making your decisions. Then they're going to learn how to make decisions very much akin to how you make decisions. And that's how you get a team that sort of has staying power. Jason: [00:08:42] Yeah. I looked at it too of going, uh, someone shared with me many years ago, it's called the one, three, one method, or I think it's called that. But whenever your team would come to you and think about as you're building an agency, your team's always coming to you because, especially in the beginning, you're like the toll booth everything's flowing through you. Whenever they would say, you know, hey, here's the challenge? What do you think we need to do? Like they would ask me and I'm like, no, no, no. What are three options that you think we need to do? And then what's your recommendation. If they do that enough, then they're just going to stop coming to you for these things and they'll start solving it. And then they'll do that with their team. Because I looked at our whole goal was. My job is to coach and mentor my leadership team. And then they should, it should trickle down. I love that you said consistency too, because I was talking to an agency the other day. I'm like, man, you're all over the place. Like one day you're up here, another day you're a tyrant here and it's just. Don: [00:09:46] As an employee, you come to work and you don't know who you don't know which boss is going to show up today. That's not the kind of place you'd probably want to work at for the long run. Jason: [00:09:55] Yeah, exactly. Well, let's kind of switch focus a little bit and talk about why do you think, you’ve obviously you've gone through, you know, over 40 acquisitions. Why do you think a high percentage of mergers or acquisitions actually fail? Don: [00:10:13] Uh, it's a great question. And it's probably on page one or two of my new book coming out. I believe if you look at the diligence process that people go through and you start looking at what people really examine when they look at potentially buying a company. What you find is that they don't spend a whole lot of time looking at the value set of these companies that they're looking to buy. So you don't really have a good keen understanding of whether or not the value set of the people you're buying is in alignment with the value set that your company has. So I talk about in my, in the book, this whole thing called value compatibility profile. And what kind of alignments you see in these values, and then when these companies fail and if you go read in the press, you're reading the literature, the first thing people say, well, you know the values weren't in alignment, the cultures were off. Well, It shouldn't be a big surprise to anybody that, uh, these things failed. If you didn't spend enough time on the front end that if, when they do fail, these are the cause on the backend. So my belief is that we spend too much time on the hard stuff, like the financial stuff, and we don't spend enough time on the values, compatibility and the alignment of values, because that is going to dictate much of how these two companies come together. Jason: [00:11:36] Yeah, I always tell everybody, and I did this when we were acquired. I wanted to sit in their office for a couple of days, like a fly on the wall. And I wanted to see, you know, are these people happy? Do they joke around? Like, I'm obviously not a corporate type. So if we were going to be acquired by someone, very corporate. It would've just been a complete, utter disaster. Don: [00:11:59] Well, I had this good story I tell that back in the day, uh, when I was at iCrossing, there's this amazing agency, AKQA that, uh, and Tom Bedecarré who used, you know, it was a CEO there for years. And at one point GA, who own them, and then, we had gone with some other people that they had this idea that we were going to possibly merge the two and it would create this really powerhouse in the marketplace, a creative powerhouse, like AKQA, and then a performance media powerhouse like iCrossing, you could bring that together. And I think it would have reshaped some of the agency business. Well, so they were talking about merging it. And the first thing you have to do is you have to look at it and say, well, you know, can people get along and the CEOs even get along. So, uh, you know, uh, Tom and I get together and the board calls us up and says, look, we want to know if you guys can make this work. We want you guys to, uh, take a weekend and go to go to Sonoma County or Napa Valley for a weekend, have some wine, just sit around and talk. So that's what we did. We went up there and spent the entire weekend up there just to see if we even liked each other. I found out about his kids. He finds about my life. At the end of the day, you know, I found out what was important to him. He got to know what was important to me and we, and we figured out a way to stay to the word. Now, but the deal fell apart for other reasons. But that part of I would I think would have worked its way through. And that's just because we put in the time upfront. Jason: [00:13:32] Yeah. Yeah. I totally agree. Now, outside of values and matching the culture, what are the numbers like when you were acquiring agencies? What are the numbers that really matter to you to make sure or what's a good acquisition for you? Don: [00:13:50] Well, experience has shown me that if… you're going to get what you paid for, right? And, and so like, if you, if you're looking to get something on the cheap, then chances are, you're going to get something cheap, right. You're going to be spending a lot of time fixing it. And so if you’re into reclamation projects, that's a whole different world. If you really want to grow. You don't want to spend all your life fixing what you just bought. So I'm, you know, I'm a firm believer that you pay a fair price and you gotta be willing to walk away. So for me, it's understanding what, what the true… and, I'm not into, since we're talking about services businesses, it really has to be more EBITDA-based then it's going to be revenue-based as opposed to a lot of these technology businesses that we see, but, uh, so on that base, you know, I know what multiples are to be in play. So, you know, if, if people are willing, then what you, what you really find, and you know this because you've seen it, as many times as I have is that most of these owners think they're the unicorn out there and they have, they want the one-off multiple that nobody's ever seen before, and that's just not going to happen. So you have to get people to get, take a dose of reality, and come down to earth. And if they get real. Then you have the basis to starting at the discussion about getting something done. Jason: [00:15:29] As an agency owner, it's hard to know when you have to make those big decisions. And I remember needing advice for thinking like hiring or firing or reinvesting. And when can I take distributions without hurting the agency? You know, we're excellent marketers, but when it comes to agency finances like bookkeeping, forecasting, or really organizing our financial data, most of us are really kind of a little lost. And that's why my friend Nate created Agency Dad specifically to solve these exact problems. You know, at Agency Dad, they help agency owners handle the financial part of their agency so they can focus on what they're really good at. Nate has spent years learning the ins and outs of agency business. He understands everything from how to structure your books, to improving the billing process and really managing your financial efficiencies. Agency Dad will show you how to use your financial data to make the key decisions, from making your agency more successful and most importantly, more profitable. If you want to know how your agency finances stack up to the rest of the industry Agency Dad can tell you how to do that. A lot of my listeners have already gotten their free audit from Agency Dad. And if you haven't yet, go to agencydad.money/freeaudit before August 30th and get your free financial metrics audit. Also, just for smart agency listeners, find out how to get your first month of bookkeeping or dashboarding and consulting for free. It's time to clean up your agency finances and listen to dad, go to agencydad.money/free audit. Yeah, I'm glad you mentioned EBITDA because that's how we've always based it on. And I always used to love when people would say. Oh, we're a $10 million agency. We're a $20 million agency. And I'm like, well, what's the profit? And they're like, oh, we're like a 5% margin. I'm like, oh, that's horrible. And I also agree with you too. A lot of times when we actually we at Republics, we started buying agencies. Like we don't buy anybody under a million and EBITDA. There's the same amount of work. A lot of people are like, especially when the pandemic happened, they're like, oh, we're going to grab up all these people that are struggling. I'm like, I rather grab the people that are growing. Don: [00:17:52] Yeah, you know, I'll tell you a really, a really funny story was, uh, when I was at Agency.com and I was sitting in there talking to John Wren, who’s the head of Omnicom, and he's bought more companies than anybody I know. And he's, uh, so he was telling me one day he said, uh. He said: Scales, let me give you a piece of advice on how to deal with acquisitions. He says until a company gets over a million dollars in EBITDA, he says, you just fly over, fly over the top and you wave to the airplane. Don't ever go visit until get over a million dollars, then you'll stop. Jason: [00:18:36] That's awesome. Oh, definitely so. Right, because I feel that businesses can hit a couple of million by accident, but to get to a million in EBITDA, it's a little bit more challenging. Don: [00:18:47] and they can lose a couple million by accident too. They can go both ways by accident, too. Jason: [00:18:55] Exactly. What are the multiples that you're seeing for, let's say, one to about 3 million in EBITDA. Don: [00:19:01] Uh, you know, I wouldn't pay it from one to 3 million. I meant, like you said, some of that could be by accident. But I'd say probably it's, it's still single digits from me. Uh, you know, I'm not going to be paying at, I'd probably pay six to eight, maybe somewhere in there, but not much more. I can't see much more than that. Jason: [00:19:23] Yeah. When does it really start jumping up to the double digits? Don: [00:19:27] I think one, when you get a little bit of scale to it. So, you know, once you get to a point where there's not 50 other people that look just like you. So, I mean, if you get a, I can recall when we hit, uh, at iCrossing. And we actually merged with Proxycom and that got that, that took us over a hundred million dollars in revenue. We were at, I forget, like 20 some odd percent on EBITDA. That put us into some rarefied air in the agency business. First of all, you don't see that many agencies go over a hundred million and then you don't see that many agencies making that kind of EBITDA. That got us, you know, we ended up making in the high teens. And so it's really the scarcity factor that drives it. So if you are a three or $5 million agency, Then you better have a real unique proposition is going to be able to get something in the marketplace is going to be differentiable because there's, there's a lot of those out there. Jason: [00:20:34] Yeah. Do you look at specialization as something that separates agencies rather than saying know the typical we're a full service “me-too” agency. Don: [00:20:43] Well, there are two things that... One is, we're a full service and two is, yeah, we deserve it because we have such great people. We have unique people. Everybody says that. So when I hear that, I'm thinking they don’t even. Jason: [00:20:58] Or what is it? The three Ps: Process, Portfolio, and People. Don: [00:21:02] Okay. But so when you start hearing that, then you wonder what their strategy and what their story is. But if they cannot in a minute, if they have that 32nd elevator speech cold, and they can tell you exactly who their market is and what they're trying to accomplish, then you pay attention. Jason: [00:21:20] Yeah. So when you guys merged and you took. Your guys' revenue, you guys became a hundred million and 20 million in EBITDA, right? How long did you guys have to stay merged together before you exited? Because I found, and what we're finding too is like, just putting all these companies together, you have to make it work for some time for a buyer to treat you seriously. Don: [00:21:43] Yeah, I think what you, what you have is typically have, you know, right after something like that you're going to take at least a year to get all the kinks out. So you're going to have turnover. You're going to have this, you're going to have that. You're going to lose some clients. You've got all these kinds of issues you have to work your way through. And then you've probably got after that, you've probably got another year of sort of demonstrating that you can manage it and run it right. So you're looking at, probably at least two years, uh, before you can really do something with something like that. Jason: [00:22:16] Yeah. And let's talk about kind of margins. Because a lot of people, especially on, on the lower end, the people that you're flying over and waving to. I love that the flyover. Don: [00:22:30] I love it. That is a great story, and he said it was such a straight face too. Jason: [00:22:34] And he was a part of, uh, the CEO of Omnicom. Was that right? Don: [00:22:38] Omnicom, Omnicom is, he's probably done… He's probably done past some acquisitions. I don't even know. Jason: [00:22:47] That’s hilarious. I love it. So the people that were flying over a lot of times, you know, their margins are at 10, 15% and they're like, oh, that's good. Or even 20%. And I look at that going that's I feel that's below average. So what do you think average is for profit margins? Don: [00:23:06] Yeah. Since I, I spent enough time and Omnicom I'll quote John Wren one more time I met John Wren used to say, if you really want to be an exceptional agency, then your overhead’s 20%, your direct cost is at 60% of your margins are 20. He said, then that's what, it's a very simple business, Don. He said, you make 20% every year, he says, I'll never, you'll never hear from me. I'm happy and I will never bother you. So I mean, that’s kind of the way I looked at it, it was it's. Uh, and you have to, you have to take that, but there's so many CEOs that just don't have that kind of. That makeup to focus on that number and be focused on that 20% or better. And now, you know, over the years, because we've gone more from services and now it's sort of this mix of technology and services. And now when 20 years ago, we didn't hear about recurring revenue and now there's all this talk about how much your business is recurring versus repeat versus, all of this. It’s all the same, you know, now you have to be a little bit more focused and you do have the opportunity to get higher margins as a result of all this, but yeah, pure services business, you ought to be shooting for at least 20%. Jason: [00:24:27] Yeah, I love it. And you kind of alluded a little bit to, you know, the reoccurring model, because when I did the first agency, about 85% was just project-based. Like we would go into Lotus Cars and we'd go into Tochi and right. And just exactly, but we had a machine for our pipeline. Like it was predictable for us. Now going around it's kind of a little different. I actually kind of love reoccurring cause it's predictable, especially when we're buying someone. So what's your thoughts on that? Don: [00:24:59] Right, and that's where you're gonna get margin. That's where you're going to get margin. So nobody's going to pay you for project-based businesses. Now, even if you have, like you said, even if you have a machine that can crank out new opportunities. Nobody's going to pay you because they, they can't look forward. They can't see it beyond a certain amount of time. So what you're going to have, what your business is, no matter how… you could have five years of great project-based business results. But because they can't see more than three or four months in the future, they're not going to pay you the higher multiple, but as you get more recurring, and a word we call repeat, which is meaning that, you know, you're not necessarily going from contract to contract your own more or less 12 months kind of contracts. They may be on auto-renewals, those kinds of things, where you're not having to go out and renegotiate something every three months. Uh, then you can start, people are, you know, then people respect your business a little bit more than they value visible more highly. Jason: [00:26:00] Yeah. And you know what I've always seen, especially when we're going in and doing valuation of going well, you might get your valuation, but most of it's going to be tied into an earn-out because there's no predictability. Don: [00:26:13] Yeah, exactly. No, that's exactly right. And then depends on what the, if you're a fan of or not, but. Jason: [00:26:23] I was screwed by that one, I wish I read your book. Don: [00:26:27] I've been screwed on both sides of that one. Jason: [00:26:29] I know. I've been on both sides and, you know, especially what we're doing it now is like, we've always structured the earn-out now to make it fair. And we're like, we're not going to base it on time. We'll base it on when you hit this. So like, if an agency comes to us and says, well, I'll hold off, Jason. And you can buy us next year because I feel we're going to be double. And we’ll be like, okay, well, if you feel that, why don't we put an earn-out on that? So when you hit the double, we'll give it to you. There's no set time so we can screw you. Like it has to… like, it can be a win-win I'm tired of people taking advantage. Don: [00:27:07] And generally takes them twice as long to get to double, right? Jason: [00:27:13] Exactly. They're just, I think they're trying to buff up. And then they also where they tell us, they go, well, we want to stay on for long haul. I'm like, no, you probably be the worst employee. I know I was the worst employee ever. Don: [00:27:26] I man, especially it's really hard to you get a successful entrepreneur who started an agency, or started two or three agencies, uh, yeah, they make the, they're not the best employees and the guy, the guy I had the most respect for. Started with that iCrossing and he could work for anybody else. Jason: [00:27:46] Yeah, that's, that's me. Last question I have for you, Don is as a global CEO of one of the big agencies. What are your roles? Like, what do you look at as your role in the agency? Like if you had to pick like three or four roles. Don: [00:28:15] Uh, I think really my role is to provide two things. One is depending on what the, you know, you have to articulate what the strategy is, and in some cases that's a little easier than other cases. But I have to articulate what the strategy is and then I have to provide a culture and environment by which people can go accomplish, you know, accomplish those goals. But you have to get people, you have to show them the direction. You have to give them the tools by which they can go do it. And you got to get out of their way and let them do it. And, those, those are the keys. Jason: [00:28:41] Yeah. That's, that's kind of what I looked at when, when I started getting up in a little, the gray hair, as I started figuring out that part of like getting out of people's way. And it's more of… Don: [00:28:52] Uh, and the good ones, you know, I have some people who've been with me here Investis Digital I've had people who've been with me for 20 years. This is their third company we worked at together and they're, and they're some of the best people in the world. And that's the reason is because I'm smart enough to know when to get out of their way. Jason: [00:29:13] Yeah. I always said I wanted to be the dumbest person in the room, at the company, and that was not hard for me. Don: [00:29:22] I think Reagan said that too. One time. He said you want to be the dumbest guy in the room one time when it was, he said something like that. Jason: [00:29:30] Oh, that's funny. Well, Don, this has all been amazing. Is there anything I didn't ask you before we tell people where they can get the book? Don: [00:29:38] I think, uh, you know, I probably. You know, I thought maybe you might ask me, like, give me one funny story that came out of doing one of these acquisitions I had one before I was going to tell you. Yeah. So the first acquisition that I ever did at iCrossing was a company called NewGate Internet, it was in Sausalito, California. And we had spent all this time and effort getting this right. We had dotted all the I's and cross T's and we wanted to make sure that the board was really standing behind this and. So we got all excited. We got this deal done. So, uh, we went out there, uh, myself and the CEO of iCrossing at the time we went out there and went to Sausalito. And so we meet, we meet the CEO of NewGate Internet at the front door. We're talking to him and I said, okay, is everybody ready? Yeah. I got the whole team together and we're going to introduce you guys is going to be great. So we walk in and the. And the CEO stands up in front of his group, which is probably about 50 to 75 people. And he says, well, uh, he says, uh, I have some news for you guys. He said, you don't know this, but for the last six months I've been, uh, trying to sell the company and he says I've actually been successful at doing so. And so, uh, your new owners here, Jeff and Don they're from a company called iCrossing. They're going to be your new bosses. And today's my last day. Uh, I'll be leaving as soon as I finished speaking here, it's been great working with you for the last six years, and I hope to see you guys soon. And they literally picked up and walked out the fire escape and never came back. And Jeff and I are looking at each other like, holy cow, what are we going to do now? So we had to figure this out on the fly in front of 75 people who didn't even know they were being sold and we made it work this way through, but there was a, oh my God moment there where it was like, my gosh, what are we going to do next? Oh, wow. That was our first deals at iCrossing. Jason: [00:31:51] It's awesome. I mean, literally he got the mic, he dropped it and then just bounced and walked right out the fire escape too. Was he afraid that you guys would go to stop the elevator? Don: [00:32:05] I think he was, I think he was so embarrassed about just pulling a fast one there. He just didn't even want to wait to go out to the front door. He didn't want to say goodbye to anybody, he just left. Jason: [00:32:16] Wow. So was it a good acquisition or did you find a lot of skeletons? Don: [00:32:21] Yeah, it turned out really good. I mean, they, they were really, uh, experts in paid media. Uh, and they really set the tone for iCrossing for years in paid media. And we got some really fantastic people out of that, but it was, it has bumps in the early days, that’s for sure. Jason: [00:32:37] That's crazy. I mean, literally like. Don: [00:32:43] It was pretty funny. Jason: [00:32:43] I can only imagine, like, I'm picturing, I know what you're talking about a fire escape, but I, I see like the New York fire escapes, like him sliding down. With the ladder. Don: [00:32:53] With the ladder and everything. They don't have those in Sausalito. Jason: [00:32:58] I know, but that would be. You should embellish that a little bit. Like be like, yeah, he just slid down like was James Bond. Don: [00:33:08] I need to build this up a little bit more. Jason: [00:33:10] Yeah, definitely. Well, you got to sell it, like your, sell it a little bit more. Don: [00:33:14] Exactly. It is in the book though. You can read about it in the book. Jason: [00:33:19] Cool, what's the name of the book? And obviously, we probably can get it anywhere, right? Don: [00:33:23] It's from Forbes books. It’s out Amazon for pre-sale right now. It comes out June 6th and it's called the M&A Solution. Jason: [00:33:30] Awesome, well, everyone go check it out. And then, uh, what's the agency URL so people can go and check out the agency as well. Don: [00:33:38] The agency that I’m at right now. It’s called Investis Digital, and like I said it's London-based and we just got bought by Investcorp, so yeah, check us out. Jason: [00:33:50] Awesome. Well, Don, thanks so much for coming on the show. It was a lot of fun hearing some of the old stories. Make sure all of you go check out the book. Check out the agency as well. And if you guys enjoyed this episode and you guys want to be surrounded by amazing agency owners that are sharing what's working now, so you guys can scale faster and really know that you're doing it in the right way. I'd love to invite all of you to go to digitalagencyelite.com. Check it out, apply if you're right for us, we'll have a conversation. And until next time, have a Swenk day.

Todd Taskey has over twenty years of experience as a founding investor, board member, and management team of several business ventures. Now, as M&A at Potomac Business Capital, he helps CEO's and entrepreneurs develop a successful exit strategy by understanding the mid-market investment banking process. Today he joins us to talk about roll-up strategy, the mergers and acquisitions red flags you should avoid, and what you should be offering as an agency if you're thinking of selling. 3 Golden Nuggets Thinking about selling? A lot of agency owners are thinking of selling at some point in the future. How can they be sure to get the most value? Our guest agrees that you should pay a lot of attention to your EBITDA. A lot of times, buyers won’t even consider you unless you have $1 million in EBITDA. Specialization is the key. If you own a small agency and are looking at roll-up mergers as a possible strategy for the future ask yourself “am I providing a really specific piece?” “Am I really, really good at providing that to folks?” There are lots of opportunities out there and, if you’re smaller, it’s easier if you can solve a specific issue. Red flags you should avoid. The most important aspect that sometimes determines the failure of a merger is culture fit. You should always have that in mind. Another mistake is to think of it not just as two identical companies coming together. If they're smaller, they should add certain capabilities. Sponsors and Resources SweetProcess: Today's episode is sponsored by SweetProcess. If you're looking for a way to speed up processes in your agency, SweetProcess will provide the systemization you need to scale and grow your business. Check out sweetprocess.com/smartagency and get your productivity up. Subscribe Apple | Spotify | iHeart Radio | Stitcher | Radio FM Secrets to Implementing a Successful Roll-Up Strategy for Your Agency Jason: [00:00:00] Hey, what's up everybody. Jason Swenk here and I have an amazing guest today. A repeat guest, Todd, where we're going to talk about a roll-up strategy because there's a lot of things out there right now that are going on and this market is growing very quickly with, uh, mergers and acquisitions and, Todd is going to provide a lot of value to you. So let's get into the episode. Are you frustrated with how long it takes you to get stuff done in your agency? Or tired of your team missing steps or falling through the cracks? You know, you may be looking for an easy way to capture SOPs, to scale your agency faster and easier. Now, our partners at SweetProcess have created an amazing tool to help you overcome all these frustrations. SweetProcess really lets you create a step-by-step instruction from every task in your agency. From writing proposals to executing client work and responding to client requests. So everything gets done more easily, no more mistakes or missed steps. Plus, you'll have a central place where everyone employees, contractors, or even VAs can access your procedures anytime from anywhere, the best way to learn about how Sweet Process really can streamline your agency is to start using it. So exclusively for the smart agency masterclass listeners, you can try it out for 28 days free of charge. No strings attached. Just go to sweetprocess.com/smartagency to start your free 28-day free trial today. That's sweetprocess.com/smartagency to get your SOP is down and your productivity up. Hey Todd, welcome to the show. Todd: [00:01:50] Happy to be here, Jason. Thanks for having me. Jason: [00:01:52] Yeah. So for the ones that have not checked out our other interview, which we'll actually link in the show notes, make sure you guys all check that out, but, uh, tell us who you are and what do you do? Todd: [00:02:04] Yes. My name is Todd Taskey, T-A-S-K-E-Y. You can find me on LinkedIn. I'm happy to connect Potomac Business Capital is our group and we do, uh, investment banking primarily in the digital marketing and digital transformation space. Jason: [00:02:18] Awesome. Well, let's kind of jump right into it. You know, there's a lot of crazy things going on at this moment with, you know, different deal structures. What are you guys seeing since you're in the mix of it with a lot of digital agencies? Todd: [00:02:32] Yeah. You know, it's interesting. We've got one client. I'll give you just a couple of anecdotal pieces. I've got a client right now that is small, you know, they're actually under a million dollars of EBITDA, which is usually an important cutoff, but these guys are very focused in terms of the work that they do. They provide email marketing in a very specific vertical. And that becomes a, a really good bite-size piece for an acquirer. And in fact, both of, we expect two LOIs this week for them, and both of those are very sizable companies, but I think they viewed this opportunity as, like I said, a bite-sized piece that they can build out a practice from and then cross sell across to their other brands. We've also got, you know, we closed the deal right at the end of the year where our client is about 2 million of EBITDA. They're a partner in the HubSpot space, has long time been there. And we were able to put them together with the business, very similar to theirs, probably about twice the size. And that now becomes one of the larger premier players in the HubSpot space. We've got another client now that’s in the video intelligence space, again, they're a little bit under a million dollars of EBITDA. But because they're so specific in their, in their offering, it becomes easier for us to find, uh, a very specific or curated fit for them really, you know, from the, almost from the network that we already have. Jason: [00:04:15] And so what should people know about the possible roll-up? Because there's a lot of people listening in that their intent is to have option to sell. And let's say they're to a point where they do want to sell, but they might not be over the certain threshold in order to see the real money that they really want. Like you and me. We always discuss kind of the million in EBITDA is kind of the, the starter, right? Like you got to get to that level in order to really start to entertain some healthy offers. And so talk a little bit about how can the people listen and get a little bit creative. Todd: [00:04:53] So, two things I would say. Don't think of it as a roll-up, think of it as an arc of services. And so when people put together, when larger buyers put things together, they don't want an SEO shop and another SEO and another SEO so that they can become a bigger shop. What they want to do is become a destination, a one-stop-shop if you will, for their clients. So what a lot of, for example, there was a lot of news. People want to check in Tinuiti, which was a, a Mountaingate Capital company that was acquired in January by new mountain capital. And it's very, very, uh, nice data point for the space, but they had spent the last four years building an arc of services. So for an example, they acquired a company four years ago called Elite SEM they added paid media, they added social, they added content, they added analytics, a delivery system and a platform and everything else, and had a wonderful exit from that. So, one question for your listeners is, am I providing a, a really specific piece? Right, to that arc of services. And am I really, really good at providing that to folks? So that would be one. And then I think, you know that the second thing, when you look to be acquired, private equity is driving a lot of the activity in our space today. And so for private equity to get the returns that their investors want, they always will have some debt in their structure. To be able to borrow from an institution they need $2 million of EBITDA. For most lenders, that is the minimum that they'll do. So from that standpoint, I'll give you an example, we've got a bunch of private equity relationships. The transaction that we did with HubSpot, I reached out to three of the groups that we work with and that we know pretty well. And I said, hey, you know, if you don't know about HubSpot, you should, it's a fragmented industry. There's a lot of smaller providers in that space. And it's a great software for inbound lead creation. So two of the groups said to me, Jesus, you know, if you can find me, uh, you know, an a million and a million or a million and a half. You know, any pieces that you can put two together so that we can become a diamond or an elite partner, and we can, we can lend against it. Then we would be excited to do that. So that's a project that we're working on now where I've got actually two kind of in the early stage companies that are both, uh, around a million that will get us to that amount that private equity can, you know, can sponsor. So there's lots of opportunity that's out there for, and it's a little bit easier if you're smaller to solve a very specific issue, if you will. Jason: [00:07:58] So if you're putting two kinds of agencies together, right? Like you're taking one plus one equals two. How long do they have to be together before you can kind of go to someone and be like, yeah, it's a proven model, right? Like, like what you were talking about is looking at like, all right, it's not just adding services to add services. It's adding services to come up with a full solution for getting the max results. So I just want everyone to be clear on, on that, but how long do you feel like if you do take, like, let's use an example in our mastermind, we have tons of agencies and some specialize in one particular service and that's it. And same thing with another one. Now, if they come together and they're like, Hey, we're both going after this industry, we put these two together. Wow. We'll make it over the threshold, but how long do they have to be together? Because I know with Republics we're putting, you know, last year we bought eight agencies and I still look at it going, look, we still need to make sure everything fits together before we talk about exit and all that. So what are your thoughts there? Todd: [00:09:08] So couple of great questions. The first is when you were putting agencies together. Here's what I find, that without cash, the deal oftentimes will break. So for example, Jason, you and I are roughly equals. We're going to put our business together. Let's say we have about a million bucks of EBITDA. A million bucks is, you know what it means. I have a very good life. You have a very good life. Now I'm going to give that up and I'm not going to be in control of my agency anymore. And, and who's going to be in charge. Who's going to make the decision to, you know, a whole bunch of questions that make it difficult. So, real-world example, when we did that transaction at the end of the year with two HubSpot agencies, we, one company had the larger company of three owners and my guy was a single owner. We put them together. Now they all have roughly 25% of the business. To make that work, my guy got roughly $3 million. The acquiring company wrote a check. They had it on their balance sheet and they wrote a check for that amount of cash. So now, that happened December 31st, our expectation is that we'll spend most of the year doing integration, picking up efficiencies. And then we will get credit for that. So the combined businesses, about 6 million, we would expect at the year-end, it would be about seven and a half million of EBITDA. And then beginning of next year, we'll take that to the marketplace, right? With the other project I mentioned where we're bringing those $2 million businesses together. That's going to work because we're going to bring a private equity group together at that time. So each of those owners will get cash at close. Probably somewhere in the two to $4 million each in cash. And then they'll also have somewhere between 20 and 35% equity in the new company, the larger company, and all of these things need to be worked out. The private equity group is going to get a little bit better value on that business because it's not as valuable because it's smaller and because they haven't harvested the efficiency yet. So in, in that deal, it, when we start, it will be agency one agency, two and private equity all coming together at the same time. Whereas the other deal that I mentioned, those guys are going to just do it themselves because they were strong enough and they had enough cash to be able to do that. So that we'll have a little bit of an impact on the answer from that standpoint. But I would think. You would want to be able to show a full financial year cycle to prove to somebody this is real. And it takes that long, right? For things to be humming along that everybody's familiar with the system and move on from there. Jason: [00:11:55] What are the things to look out for that you see as big mistakes when. Because there's a lot of people, you know, I see a lot of people go into my mastermind members and clients are like, hey, let's roll-up. Let's roll-up. Like, what are some of the gotchas to be like, or the red flags for people to avoid? Todd: [00:12:13] Yeah. You know, uh, giving an example, Mountaingate Capital has had tremendous exits so far with Olsen and Sierra and just recently with Tinuiti and, and the, the guys that drive that private equity group say that the number one most important criteria for them is culture fit. Secondly, is culture fit, and I think third is also culture fit. So they also established leadership because there was somebody who writes a check, right? Whoever writes a check is in charge and what I see oftentimes. Uh, in, in kind of failed combinations is that nobody writes a check nobody's really in charge. Everybody's kind of given up their autonomy and aren't completely comfortable and they do it almost without a lot of forethought. So that would be one. I think the second thing is the notion of two companies coming together. If they're smaller, they should add certain capabilities. So for example, in, in a transaction that we just closed at the beginning of the month, that hasn't announced yet. These guys both do digital marketing focused on the SMB space. My guys had really good technology, but not a lot of sales infrastructure. The buyer had great sales capability. They didn't have technology and to add the technology to their sales process should have a tremendous impact. And that will, that will cover both sides. So from that perspective, it shouldn't be just, you know, two companies that are identical and feel like they belong together. There should be something that you add to each other. Jason: [00:14:05] Love it. Well, this has all been amazing. Todd, is there anything I didn't ask you that you think would benefit the audience. Todd: [00:14:10] Um, no, not from a question standpoint. I just think it's interesting when I have conversations, which I do pretty regularly. People are surprised at the type of opportunity that's out there because oftentimes they think, well, I got to sell my business, I guess some cash, I get an earn-out and then I become an employee. And there are so many more exciting opportunities than something like that. That extent, that A gets liquidity, B hopefully a better upside and gives entrepreneurs an opportunity to focus on just the things that they are best at that they enjoy the most. So, so maybe it's just opening up their aperture a little bit to consider what they would like to do. Because I, I believe that we'll see a really strong next two or three or four years in this space where good companies will get strong valuations and have the opportunity to do, you know, what gets them excited. Jason: [00:15:12] For the ones that are interested in chatting with you. They're, they're over the million in EBITDA or close to it. They're wanting to really kind of exit or have a bigger opportunity to take some chips off the table. Where can they reach out to you? Todd: [00:15:26] Yeah. So find me on LinkedIn is the easiest way to do that and just reach out there. But one last thing that I would say, which I think is interesting. You see, I have lots of conversations with clients or prospects, that they do not want to go through this process of putting a deck together, getting their financials right, going out to the market and let's see if somebody will buy us. But I have a lot of them that say, listen, this is how I'm thinking about the future. Here's where I see our strengths and weaknesses. This would be a really great fit for me. And, and so for example, I've got two deals under LOI now. The video intelligence company was exactly like that. When I sold to my client, Arie, he said here's, this is what would help accelerate us and the people that would benefit most from our capability set. And he's been on my board here for a while. One day I had a conversation about a completely different opportunity. And turned out that potential buyer is a great fit for him. So I'm always interested to talk with people that are doing interesting work that want to explore what might be out there for them. Whether that's something that they want to do in the Spring of 2021, or just to be exposed to ideas that are interesting as they come along. So I'm always happy to do that. Uh, our website is potomacbusinesscapital.com and you can find me on LinkedIn. I'm pretty easy to get to. Jason: [00:16:55] Man this new software, I'm waiting for the little keyboard, but, uh, make sure you, uh, tell him, uh, you heard of, uh, him from the smart agency master class and they'll hook you up. And, uh, if you guys enjoyed this episode and you guys want to be around amazing agency yeah. Owners to really help you scale faster, create that predictability, that, that growth, and really achieve the money that you really want in your business. I want to invite all of you to go to digitalagencyelite.com and check out our exclusive masters. Todd: [00:17:26] I will tell you some of the, a few of the guys that I've spoken with have been thrilled, maybe a little bit surprised at how much they have ramped up their agency as being part of the mastermind group. Not just the stuff that they've learned from you, but being around other people is forcing you to think bigger and to do bigger and you know, all those exciting things. So keep up the good work. Jason: [00:17:46] Oh, yeah, we, we love it. You know, if we can, uh, speed up people's, uh, sales process and get them to where they want to go faster, that's our whole goal. So thanks Todd for coming on, everybody go reach out and, uh, until next time have a Swenk day.

As a Certified Management Accountant, a Certified Internal Auditor, and certified in Strategy and Competitive Analysis, Naten Jenson, co-founder of Agency Dad, is certainly the best person to help you establish a strong business and drive your agency's profitability. Today, he joins us to talk about scope creep, a topic that many agency owners struggle with but should definitely learn more about. Remember that if we can get a hold of scope creep, we're going to increase our profit. 3 Little Nuggets What gets measured gets managed. Many agency owners get so focused on that next client that they forget to measure and they are not managing the profitability of existing clients. First mistake, because you cannot identify a problem when you fail to measure. If you don’t have the data, there’s nothing to analyze. How to get those numbers. There are three numbers that you need to know. The first one is your bill rate. The second thing you need to know is your gross profit on a client, and finally, you need the number of hours that you spent on a client. The formula you will need is: gross profit ÷ bill rate. So let's say your gross profit on a client in a month is $1,200. If your bill rate is $120 an hour, you get an answer of 10. Now, what if we had 10 hours budgeted and we use 17 on a client? Well, we've now measured our scope creep. It was 7 hours, and 120 x 7 is $840 of revenue that you’ve lost. Is the problem coming from the client or the agency? Before doubling your rates, you could look at the origin of the problem. If you do this scope creep analysis over three months and clients are consistently using too many hours, then it’s time to look internally first and see if the problem is with the agency. Do I have an employee who actually doesn't know what they're doing? Do they need more training? Is it the wrong fit? Are some questions you can ask yourself before taking this to the client. Sponsors and Resources Agency Dad: Today's episode is sponsored by Agency Dad. Agency Dad is an accounting solution focused on helping marketing agencies make better decisions based on their financials. Check out agencydad.money/freeaudit/ to get a phone call with Nate to assess your agency's financial needs and how he can help you. Subscribe Apple | Spotify | iHeart Radio | Stitcher | Radio FM Understanding Scope Creep Will Help Drive Profitability Jason: [00:00:00] Hey, what's up agency owners, Jason Swenk here. And I'm excited, I have a repeat guest and a repeat guest where we're going to talk about scope creep. Right? You should hear that tun-tun-tun on scope creep, because a lot of us, we struggle with this and if we can get a hold of scope creep we're going to increase our profit. And we'll be able to afford those people to really come in and do the things we don't want to do anymore. So this is a really important episode and let's get into it. Hey, Nate. Welcome back. Nate: [00:00:34] Thanks Jason. Glad to be back with you again. Jason: [00:00:37] Awesome. Well, uh, for the people that have not checked out the first episode, tell us who you are and what do you do. Nate: [00:00:43] My name's Nate Jensen. Uh I'm with Agency Dad, our website is agencydad.money. And we are an outsource CFO firm, bookkeeping firm, accounting firm. And our focus is really helping agencies to drive their profitability. We do that by good accounting where we can actually measure profitability, measure what's going on and those metrics drive action, drive decision-making that leads to greater profitability. Jason: [00:01:08] Awesome. Well, let's go ahead and talk about scope creep and how to identify this, because I know there's a lot of agency owners. We're busy at bringing in new business and we really kind of take our eye off the ball a little bit. And there's a lot of, uh, what I call profit leaks in scope creep. So tell us how can we identify these? Nate: [00:01:33] Yeah, no, you're absolutely right. What I, what I see is when, when someone's in growth mode, they're, they're so focused on that next client, that next client. That they're not measuring and they're not managing the profitability of existing clients. Peter Drucker is famous for saying what gets measured, gets managed. So identifying scope creep, the first thing you've got to do is measure it, where's it happening with clients is that happening with? And, and how bad is the problem? And so I want to talk today a little bit about how do we measure it? What are the numbers that we need to know? And, uh, after we go through that, we'll get to, what can we then do about it? Jason: [00:02:09] Cool. So, yeah, let's get into how do we measure it? Nate: [00:02:12] Ok, First, how do you measure it? There's three numbers that you need to know. And most accounting systems you should be able to pull at least one of these numbers out of there. You need to know your bill rates, which is, hey, if we think we're going to spend 10 hours on a client project, we're going to bill them, let's say, $120 an hour. So we're billing $1,200. The $120, that's your bill rate. Second thing you need is your gross profit on a client. This is the one that you should be able to pull out of QuickBooks or whatever accounting software you're in. And your gross profit is what you build a client minus any direct costs. So if you're, if you're spending money on ads for your clients, it's going to be what you bill the client minus what you spent for those ads. That's your what's left is your gross profit. And then the last thing, the third number that you need is how many hours. In a given month, did you actually spend on that client? So the way you measure scope creep, I'm going to give you three formulas there. They're simple formulas. If you're driving don't, you know, don't stop and try and do the math. Jason: [00:02:09] We'll put them in the show notes for you guys. Nate: [00:02:12] But the first thing all you're going to do is you can take that gross profit by clients in whatever month you're looking at and divide it by your bill rate. So let's say your gross profit on a client in a month is $1,200. If your bill rates $120 an hour, you get an answer of 10, right. 1200 divided by your, your bill rates, 10 hours. And that 10 hours. That's how many hours you have available for that client. You've said based on my bill rate, you've got 10 hours. So one of those other numbers that you need is how many hours you actually used. So if you look at that client and you say, h, okay. Out of 10 hours, we only used, let's say six. Well, I have four extra hours, so there's no scope creep. I had 10 hours budgeted. I only use six. I have four leftover. Great. Now what if we had 10 hours and we use 17? Well, we've now measured our scope creep. We have in that month, we have seven hours scope creep, which is, you know, if you've only budgeted 10, that'd be pretty significant. And then the final thing you want to look at here is what did that cost you? Okay. So if we know we're seven hours over and our bill rate is $120. 7 hours x $120. We've actually lost out on $840 of revenue. Does that makes sense? I know it's a lot of math. It's a lot. Jason: [00:04:34] yeah, it definitely does. You know, what we always did and what I've always told everybody is, is you should be tracking all of your hours for everything that you do. And so how we had it in our software, we use a really cool project management software back in the day called My Intervals, but it works like ClickUp or Teamwork or any of those and what we would do after we had a baseline of projects or engagements. We'd be like, okay, well we know this normally takes a hundred hours to go do, and then we would break it up into segments or phases. And then we would actually get a visualization of each of the deliverables and each deliverable had allocated hours to it. So then, then on a weekly basis, our project manager, or on daily basis if they wanted, they could look at it and then it would show green. If they're under, you know, yellow, if we're getting close red, if we're over. And so then we could go, all right, well, why are we going over? Or why, why are we getting close? And then we can make our adjustments. Nate: [00:05:35] Yeah. Well, one of the things that I tell people and I, I've totally made this statistic up, but I use it anyways is I say 95% of your data analysis is new data entry. The number of clients that we work with when we start working with them, who don't actually track their time to clients, uh, it continues to surprise me. I'm like, if you're not tracking the data, if you don't have the data, there's nothing to analyze. And, well, it's no wonder you've, you've spent a year growing your business and you're working twice as hard and you're making just a little bit more money. Jason: [00:06:05] Actually. They're making less. That's what I see a lot of times. Nate: [00:06:09] They are making less, I was giving the benefit of the doubt. But, yeah, that's why you've got to track the data. You got to track the time. And so if you, if you have the numbers. And again, throw them into these simple formulas. It's really easy to see, Oh, I've got this client, this client, and this client, they're each using, you know, seven hours per month too many. And it's really easy to see where you, like, what you call the profit leaks, right. Where it’s easy to see where those leaks are. Jason: [00:06:35] I find scope creep actually starts before you even actually sign up the client. I find it happens in the sales conversation. It's about setting the expectation with the client and not trying to oversell them. I think a lot of, especially if you're an agency owner and you're doing the sales, which that should stop immediately, right? You should find a salesperson, but a lot of times you try to go like this is what we're going to do. And we're going to do this, this, this, and you're just piling all this stuff that, you think in order to close the deal, or if you have a really bad salesperson, you do that. And it really starts there. And, but I totally agree with you on data entry too. Nate: [00:07:15] Well, no, you're absolutely correct. Because whether you bid the job wrong, you know, in the beginning or whether the client has just taken a little more time, a little more time, a little more time, the problem ends up being the same. It is you're not, you're not billing for the amount of time you're spending on it. And so regardless of what caused it, you're still able to measure it and identify where is this happening? So it's amazing. Let's say, let's say you have 20 clients and you find that three of them are using seven hours per month too many. Well, that's only 21 hours per month, but what you bill, times your $120 hour bill rate, and you're losing $2,500 per month in revenue. You should be charging, somebody should be charging, whether it's this client or if they're not using it to pick up a new client, and then you have that bandwidth to take care of them. Jason: [00:08:04] Yeah. One of the things that we found that pointed it out to me, because yeah, like, like you said, you’re like, oh, it was only three hours here, or it's only an hour here, but if you do this one thing and I can promise you you'll change your idea about, because when the client comes to you and go, Oh, can you do this? And you always say yes. You should implement a $0 change order. I talk about this and the agency playbook all the time and we actually give you guys a template for it, but it's really when they come to you for something very small, I want you to print them out a change order. That shows the original price that you would actually charge for it. So if it's a hundred dollars an hour, let's just say easy math, put that down and then cross it out and have them sign it and send it back to you. So you're training them that this is additional. So when they actually come to you for the big items, then you can actually go, oh no, no, no. My digital agency can't do this. Again, we already gave you this free stuff over here. And then the client is programmed to go, oh yeah, it's it's additional. And when you start acting, like, I literally started adding up all the change orders and I was like, oh my gosh, like I gave away $10,000 last month. Nate: [00:09:19] Right. Yeah. It's great if you've taken the time to train your clients that way. And anybody that's not, they should get started. Right. But if you were to do this analysis and say, oh my heck, I'm giving away three grand a month in free services. We need to talk about, okay, what can I do right now? Okay. It's great. I'm going to start changing my process with my clients, but what can we do right now? The first thing I would say is I would not go to a client after one month of analysis and say, hey, we're going to charge more money because that month may be an outlier, right? That month. Maybe you're doing a lot of prep work that's going to pay you over the next several months. But if you do this analysis over, let's say three months, and clients are consistently using too many hours. Then I would go and I'd look internally first and I would say is the problem with me? Okay. Do I have an employee who actually doesn't know what they're doing? Do they need more training? Is it the wrong fit? Etcetera. So what's, what's kind of generating it. If my employee who's done this work, if I asked them, what, what are they spending their time on? And they say, every time he put up their Facebook ads within two hours, there's a phone call. They want the copy change. They want the image changed. Then we know the problem is more with the client than with us. But even then, it's not necessarily that we go to the client and say, hey, look, we're changing the contract. You've got to pay us more money. It might just be a trust issue, right. It might be that they don't really believe that we're the experts. And if they don't put themselves into the process, we're not going to do it, right. So it might just be a conversation of helping them to actually trust that we can do the work. And so we're in, instead of charging them more money, we're helping them to take less of our time. And then again, that frees up our bandwidth and we can then. With those additional hours, we go pick up a new client and build that client instead of giving those hours away for free. Jason: [00:11:06] Yeah. I always, I like how you said kind of look back at your internal process first before you kind of blame the client. Because a lot of times the clients, they'll just, they don't know they're ignorant. They've never gone through this process and they don't know what's in scope or out of scope. When I would talk about scope creep, I would always kind of default back to when I was building my house. Like, I didn't know. The process of building a house. I was like, oh, can I make my room bigger after they do framing? And they're like, you could, but we have to kind of tear down these walls and like all this other stuff. And they were like, well, that would be additional. Or you want a waterfall? Okay. We can do like, like I was just like, it's not included? I thought you said you'd built my dream. Nate: [00:11:51] Yeah. And like, I think it's a good point you brought up earlier is. It is it maybe in the, in the bidding process. And if you're, if you're looking at this on a regular basis and you can… It's gonna, it's going to help you identify that problem, right? If, if you're saying, if you're seeing client after client, where simply their expectations were not in line with what the reality was going to be as an agency owner, that that may be on you and that's, that's fine, right? If you, if you learn that fantastic and let's fix it going forward, but if you're not measuring it and you're just saying, hey, new business, new revenue is going to make me profitable. It's not always going to do it. Jason: [00:12:28] Yeah, I can promise you all of you listening now, before I actually started tracking all of this and actually measuring our time and looking at scope creep, we were losing money on 60% of our engagements, 60%. That's probably what you, Nate, lot of times when you guys probably get an under the covers of a lot of agencies, you probably realize, wow, you're losing a ton of money on these clients. Like, why are you still doing this? Nate: [00:12:54] Right. And I would say sixty maybe high. 60% is, is a high percentage of clients to actually be losing money on. But, but almost guaranteed. There are very few agencies that I do this kind of analysis for that aren't losing money on at least a few clients. And keep in mind, it's not just about, is the client actually profitable or unprofitable, you know. One of the questions you should be asking is, is the client profitable enough? So we may have a profitable client, but because of the scope creep. We're spending so much time that they're, they're just barely profitable. When really if we're going to run a, a good, solid, profitable agency we need to have those boundaries. We need to be able to say, you know, our, our bill rate is 120 an hour that finds you this many hours. And if we're consistently spending too much time, we've got to change that. We've got to fix it. Jason: [00:13:42] That's another good point about like how profitable are they? We had a mastermind member not too long ago. Uh, had a bunch of legacy clients. We showed them a bunch of systems in the mastermind where they really kind of quadrupled their sales, but then they had all of these existing legacy clients and we started looking at it and they were, some of them, all of them were profitable. But just like you were saying, they were barely profitable. And we went to them and we're like, well, how can we get them up to par? And the only way we can actually get the mastermind member in order to do this was to have them calculate the opportunity cost. Like, what was the difference between the new clients coming in? Like how much money were they making there and the old ones. And that actually forced them, like, as they started looking at the data, he was like, holy cow. Well, like if I could just double the rates, and we're like double those rates, and even if half those clients go away, the other ones will make up the difference. But you want to know what happened, Nate? Every one of them said yes. And he made 60,000 extra every month. By not having to sell anything more or deliver anything more just by literally going, hey, we need to be more profitable. Nate: [00:14:56] I'm glad you brought up opportunity costs because some people would say, hey, let's take an example of we're spending seven extra hours on this client every month. And what I said earlier is you're losing $840. Cause it's those hours times your bill rate. And some people would argue, well, no, cause I'm really only losing what I'm paying my employees. I'm not losing the whole bill rate. I'm like, yes, you are because you should be invoicing that. Right. You're spending that whatever it is, 40 bucks or 30 bucks an hour on your employee, regardless of where it's spent or not being used on a client at all, you've got to look at the opportunity cost. It's that's really what, you're what you're losing. It's not just money out of pocket. So yeah. Perfect point. Jason: [00:15:36] Well, this has been awesome. Nate, is there anything I didn't ask you that you think would benefit the audience listening in? Before we go over to the, the cool thing I want to, I want you to tell everybody about right. Nate: [00:15:48] Really, it really comes down to just taking the time to measure this stuff is so easy. Like you said, if you are, if you're an agency owner and you're doing your own sales system, if you're an agency owner and you're doing your own bookkeeping, your own financial reporting, which means you're probably not doing any financial reporting. You should stop, right? You've got to look at this and you've got to look at it consistently. If you're not measuring it, it's going to get out of hand. There's, there's no question. So I don't think so. I think we've pretty much covered it and I'll make sure that you've got the formulas and you can disseminate those out to your listeners, however makes the most sense. Jason: [00:16:23] Great. Yeah. I mean, if, if you guys are not measuring and if you guys are doing this, then you're not doing the other things that only you could be doing, which, you know, it makes me very worrisome. If that's a word, I don't know. I mean, maybe making up words now. But, uh, Nate, tell us about kind of the special offer where you can, uh, you know, help identify this, you know, for them. Yeah. So we do, we do a free audit on some, some various metrics for agencies, just to, just to have a phone call, just to get to know you and see if there's maybe a fit for us to work together. And so we, we offer a free audit of, of your, your profitability and different metrics. And so for this summer, we're actually offering a free first month, if you do want to do some business with us. Nate: [00:17:06] So, there'll be a link. It's that fact, it's the agencydad.money/freeaudit. And there'll be a link there to have a phone call with me and we can, we can talk to see what your needs are. Jason: [00:17:16] Awesome. Uh, repeat the URL one more time for everybody. Nate: [00:17:20] That's agencydad.money/freeaudit. Awesome. All right, well, everyone, uh, go do that now. You know, I really do appreciate Nate coming back on the show. Make sure you guys go get your free audit, because if you can identify that scope creeps are happening, then you actually have an action plan of what you actually need to go do in order to fix it. So make sure you go there. They're incredible. We've said a lot of mastermind members and a lot of listeners over there. And they've all had amazing things to say about Nate and all their crew. So go do that now and until next time, have a Swenk day.

After deciding to leave the mean streets of LA, where he worked as a police officer for 13 years, Jason Smith started working at the leading Facebook and Instagram advertising agency Tier 11. He eventually moved to create his own company Spotlight Social Media Consulting in 2016. Today, he joins us to talk about the key factors that have helped him grow his team and making the decision to bring a VP of Operations. 3 Golden Nuggets Having a good foundation to grow your agency. For Jason, an integral part of growing an agency is having a great team that have your back and know what they’re doing and are team players. People you can trust with the tasks that you’re delegating and also, why not, people that you like. On hiring a VP of Operations. Many people are afraid of this step because of the cost it entails. But Jason has seen his agency really evolve since hiring his VP of Ops. Now his agency has SOPs, there are clear steps to bringing new employees and clients onboard, and a new project management system. Definitely worth it. The right Facebook ads agency will be a great partner. Make sure you ask the right questions when looking for a Facebook ads company because the right one will help you triple and quadruple your business and become a great asset to your brand. Sponsors and Resources Oribi: Today's episode of the Smart Agency Masterclass is sponsored by Oribi. Check out Oribi.io/smartagency for a free trial. Plus when you sign up for Oribi get 20% off the first three months with promo code: Smart Agency Subscribe Apple | Spotify | iHeart Radio | Stitcher | Radio FM How Hiring a VP of Operations can be the Best Call to Grow Your Agency Jason Swenk: [00:00:00] On this show. I talk with an agency owner who talks about how he has grown his team, how he's grown his agency. And when is the right time to bring in a VP of Operations and how did he do it? So let's sit back and check out the episode. Hey, Jason. Welcome to the show. Jason Smith: [00:00:24] Hey, how are you doing? Thanks for having me on. I appreciate it. Jason Swenk: [00:00:27] Yeah, man, I'm excited to have you on, I've gotten to know you over the past couple of years, but for the people that have not heard of you yet tell us who you are and what do you do? Jason Smith: [00:00:35] Yeah, my name is Jason Smith, owner and CEO of Spotlight Social Media Consulting. We're a, uh, Facebook and Instagram only, I say only because we're not an all-in-one, we're Facebook and Instagram only ad agency. So we do paid media for Facebook and Instagram. Jason Swenk: [00:00:52] Awesome. Now you have a quite interesting story of how you became an agency or really even what you were doing beforehand. So, yeah, I think it's interesting just to tell people kind of where you came from. Jason Smith: [00:01:05] Yeah, for sure. Yeah. Crazy story, actually. When I tell it, people take a 360-degree turn and they're like, wait, what? So I was a, a policeman for the Los Angeles Police Department for, gosh, just about 14 years before I became an agency owner. And the reason why it's kind of crazy is because I went from getting shot at, chasing gang members, getting into shootings, all this stuff, and the mean streets of LA. And literally, I mean that literally, I mean, we're talking about 250 homicides in six square miles in a year, and very violent places in, in Los Angeles. And, uh, went from that to, you know, the thing that kinda drove me to look for something else was number one, I was never home, was in court all the time. My days off were filled with court and overtime and it was just, you know, I never get to spend time with my family and I just, it was getting old, real fast. And it sounds cool when you're up on the stand testifying as a gang expert or weapons expert and all this stuff. But in hindsight, personally, it's not that fun. So, and you know, I've been involved in tons of, and literally tons of stressful situations. I've been in shootings and been shot at and all that stuff. And, man, for making $80,000 a year doing that. I just wanted to start looking for something else. And I stumbled across an opportunity where, you know, running Facebook ads was a core part of one of my friend's businesses originally, like with a supplement company. And he just kind of asked me buddy to buddy, like, hey dude, do you want to help me do these Facebook ads? I'm like, yeah, I don't, I'm a dumb policeman. I don't know how to do this, but let's try it out, you know. So I ended up getting some good results and then I did a little bit more research and ended up finding a certification course. And gosh, the rest is history. And next thing you know, I have, I had 10 clients, not even a year later and making, you know, 30,000 a month, which I never thought possible from home. And yeah, it was pretty cool. Jason Swenk: [00:03:05] So which is more stressful running an agency or getting shot at? Jason Smith: [00:03:09] Man, I don't know. I’m just kidding. Well, it's funny because people will. You know how clients are sometimes. They'll try to intimidate you or something or say something to you. I'm like, dude, relax. Okay. It's not that doesn't work on me, okay. So, and when I, when I shoot back stuff to them, they're like, Oh wow. This guy is not going to take my usual agency fluff here, right. You know, so it's pretty funny. Jason Swenk: [00:03:33] I interviewed an ex-Navy Seal and he was basically was like, look, we just went over so much of training when we get in situations. Like, we weren't stressed. And I was like, that's a great principle to apply, like in your agency, like go over this scenarios is over and over again. And it shouldn't be that stressful. Jason Smith: [00:03:52] Right. Yeah, absolutely. I mean, I don't get stressed too much. Even my wife tells me like, man, you don't stress over anything. And I'm like, well, you know, after being shot at and being all these stressful situations, not, not much more in life is going to stress me out, you know? So. Pretty funny. Even the guys on my team, stress out about stuff. I'm like, guys don't, don't stress out about that stuff. Just everything will work out, so. Jason Swenk: [00:04:16] How has your agency grown in the past couple years? Like, what are some things that have worked for you that you wish you knew back when you were just getting started messing around with Facebook? Jason Smith: [00:04:29] Yeah. Well, I mean, number one, I think having great people behind you and supporting you. That's probably the number one thing. I mean, you know, I'll never forget how I found you was through Ralph at Tier 11, but it was funny because the first time I applied to work with you, you denied me because I wasn't big enough, right? But that was great motivation. No, no. And Hey, I mean, that's, and that's why you have an elite mastermind that you do because you get to pick and choose the people in it. And that's very important. And, um, I mean, I think number one, support and people behind you, I mean, Ralph and Deacon, those guys at Tier 11 have, you know, and still helped me today. I mean, those guys have been an integral part of why I've grown and there's no, like, even though we're the same, we do the same thing. There's plenty of business to go around. They're just cool guys. They've helped me a ton. Um, I could call Ralph right now and say, hey, you know, what do you think about this? And he would, you know, he would tell me and we could talk about it. So, that's I think probably the number one thing that's helped me the most and then being a part of, you know, probably your mastermind and the group and the support there. I can go to you or anybody else. And I mean, gosh, I just went to you recently, right? About some stuff and was, and you helped me out. So that probably for me is the number one thing. And number two is having a great team, you know, having a great team of people who you can, you know, like, and trust. And not get bogged down with people you can't trust or waste your time or whatever. Those are probably the two things that helped me the most grow the agency and where I'm at today. And I mean, I literally started from nothing. Like I had no clients, you know, and I tell the story on my podcast and Deacon from Tier 11 is the one that gave me, like my first two clients. And then it just kind of went from there. So, having that support structure and those people in your life. And I say your life, because it's not just all about business and you know, you and I could go out and have a drink or something. And we're good friends. I think outside of the business world, you know, we also like the same things, right. You used to ride motocross, you're a big Jeep guy. So that's very important, so. Jason Swenk: [00:06:34] Yeah, we'll party this summer. Jason Smith: [00:06:37] Can't wait. Jason Swenk: [00:06:38] I know. Talk about your team because a lot of people listening, they may be trying to scale their team, trying to grow their team. Where did you find them? How did you find them? How'd you evaluate them? You know, because, you know, that's an integral part. Jason Smith: [00:06:53] Yeah, for sure. Yeah. I mean, most of my team came from recommendations from the mastermind, um, your mastermind and, um, Ralph actually helped me out. Ralph and Deacon over there at Tier 11 helped me on how to kind of screen people, give them a little bit of a test, have them record a loom video. You know, you can tell a lot about a person when they record a quick video. And of course, they're going to be nervous and I think I'm a pretty fair guy. Like I can kind of read through the bs and the nervousness and stuff like that. But when it comes down to the core values of who they are as a person, you can tell a lot by just a five-minute video and it's, we send them basically a little test and say, hey, I want, give me a five-minute overview of this test. And it's not so much of a test. It's really just like an aptitude test of how much they know about Facebook because I. We all do it on resumes. We all overcompensate for all this stuff, right. And, um, for them going through this competency test just shows me how much they know. And then what I do is send them over to my VP of operations. And actually my VP of operations came from a referral from a friend of mine. He used to be a professional skateboarder was, was in the upper ups of Ogio. You know, the company, Ogio, big company. He used to work for them because he was a pro skateboarder. And then when he hurt himself, he went to work for Ogio and loved the operation side. So I got to know him. And just a cool dude, you know, and that's really what comes down to it in my opinion. And yes, they have to have a good work ethic, but if they're going to be part of your team, like, you gotta like them, right? You really do, you know, and people say, oh, well, keep your personal side out of it. Well, I mean, I tend to think there has to be a personal side in it to make a team really solid, a good culture and a team that you can trust. So that's kind of how we evaluate stuff and really it's me talking to them or interviewing them. I have a pretty good, from my background and experience as a policeman, I have a pretty good idea of a person, right. When I talk to them. Jason Swenk: [00:08:50] When they're lying or not. Jason Smith: [00:08:52] Yeah. Just slap them around a little bit, you know? Jason Swenk: [00:08:55] So, are you the good guy or the bad cop or good cop? Who would you play? Jason Smith: [00:09:00] You know, it's funny. A couple of people that I've met, like clients have said, oh man, you're, you're such a nice guy, but then when I saw you in person, I was like, oh man, like this dude, could do some damage. I mean, I'm not the tallest guy, but I, you know, whatever it is, what it is, I'm all tatted down. And I don't, I definitely don't look like the normal marketer. And I do talk about that in my podcast, how I went into this Facebook ad agency world and I don't look like your normal agency owner, and it's pretty funny. But I try to be the good guy, unless the bad guy has to come rear its ugly head. And if it does, you better watch out cause you may get pistol-whipped or something, you know. Jason Swenk: [00:09:36] I love what you said about, yeah, you have to like them. I think it's… and you have to have that similar belief in the values that you share as an individual, because I used to hire the wrong way where I would try to hire my identical twin because I'm hiring someone to pick up the clack for the stuff I suck at. And then if I hire my twin. Well, now we're going to have two people that suck at this one thing. It makes it a really big challenge. So a lot of times you have to figure out what do we personally believe in. Like, do we believe in resourcefulness, do we believe in failure and success and all this kind of stuff. And then, and it's not just about quizzing them and saying. Jason Smith: [00:10:23] Right, right. Yeah, exactly. Jason Swenk: [00:10:25] Coming up with scenarios that you can have them describe that a little bit with that. Jason Smith: [00:10:32] Well, and too, I actually made the mistake one time of hiring somebody who is too entrepreneurial. If you know what I mean? Like when you're an owner of a company and you're trying to hire like exactly what you said, you can't hire your identical twin because that twin is then going to want to take over and be too entrepreneurial and almost do his own thing, you know. Which, you got to follow the systems, you got to follow the policies we have, right. And an entrepreneur will not follow that. They need to be out doing their own thing. Um, and so I look for that as well. Like especially being a team player. And that's one of the, my biggest red flags is they say anything about me, me, me, then I'm like, then I kind of, have to side-eye them a little bit and say, I don't think this is going to be the right fit. So. Jason Swenk: [00:11:19] If you're like many agency owners, it's very hard to show results and show value to your clients for the hard work that you've done. And up until now, you've probably been using Google Analytics, which is really kind of clunky and hard to use and just been around a long time. And there really hasn't been an alternative until now. And I want to tell you a little bit about Oribi. Now I've checked out this tool and it's really pretty cool. It doesn't require any code for you to track interactions and conversions. There's no more jumping from different platforms. You can track your social and paid media really all in one place. And it really allows you to build smart funnels and get tons of insights. I mean, literally, I've even set it up where I could say I want this visitor to get to this particular page and it will tell me what's the likely chance that they're actually get to this page and what pages are actually coming from. It's really pretty cool. So if you want to really kind of get away from Google analytics, I want you to check them out, go to Oribi. oribi.io/smartagency. And just for my listeners, you're going to get 20% off for the first three months using coupon code smart agency. Let's talk about your VP of Ops of when you were looking to bring them on. Like, walk me through that scenario because a lot of times people don't know when to bring on that person. So what was the scenario of like, what was lifelike like in the agency and then we'll talk about the next. Jason Smith: [00:12:58] Yeah, well, actually I had come to you about that probably what a year and a half ago, and was like, hey, I had a couple account managers that were managing accounts. And what I noticed really quickly was that there was all this information in my head and things that I was trying to disseminate to them and balls were being dropped. You know, client communication wasn't the best. And they were coming back to me often saying, hey, Jason, I don't really know what to do here. And I'm like, what do you mean you don't know what to do? But it was in my head. It wasn't on paper, in an SOP, in any operations was not in the agency. And that's what I needed at the time. And you're like, Jason, you're just going to have to drop the money because I was worried about, do we make enough as an agency? Like how much does one of these guys costs? I mean, all the things you don't really know about. And then when I finally found Eric and it was almost, it was a referral, I didn't really know he was good at operations. I kind of hired him to be a video editor because he's a high level video guy. And then he's like, oh, by the way, I'm also really good at operations. And I'm like, oh shoot, really? Awesome. And then he's like, hey, I've been looking at all this stuff at the company. And I could really come in and help out with SLPs. And, you know, we didn't have a project management system at the time. Like we didn't have Trello or. Uh, I mean, we had Slack, but Slack is not a project management system. It's a communication tool, right? And we kind of talked about it and he came in and all of a sudden, next thing, you know, six months later, we actually have things documented and hey, this is what you do to like reach out to Facebook and, and appealing an ad account that's been disabled and everything started coming down in writing, and it was really cool to see that process evolve. And it's still evolving today. But it makes it easier for when we bring on somebody new. Hey, okay, review these videos. This is the kind of first step here. And, uh, yeah, we've evolved a lot as an agency since then. It's been pretty cool. Jason Swenk: [00:14:50] And walk me through when you actually started onboarding him or when he started, did you just kind of give him like, here's what we need to do, go do, and then he'd just go execute. Or did he start coming up with all the, you know, hey, getting off Slack as a project management tool and that kind of stuff. Jason Smith: [00:15:05] Yeah, no, he was great. I mean, he, he had the experience from Ogio to be able to come in and say, okay, these are the top-level things that we need to integrate, which is SOPs and what happens in this scenario and, you know, Facebook's pretty complicated. So there was a lot of things and we kind of sat down one day for half the day and he just went through and picked my brain on everything and just kind of wrote it down. What are the most important things when we onboard a client, like we need to have a system for this stuff. So, you know, the account managers, when they onboard somebody, they can just check the boxes, which is really cool. And I mean, honestly, he's been probably one of my biggest assets in the, in the company and the growth right now. And he went in and went in lucid chart and like mapped out, okay, you guys, we're going to have 10 account managers by this date and we're going to be doing these things. And. It's really cool, you know, to have somebody like that. And, um, at first I thought, man, I gotta pay him all this money, but look how much money we're making now. It's pretty awesome. Jason Swenk: [00:16:03] Yeah. I mean a lot of people, they go, well, I don't know if I can fill up this person full time, because I think the holdup in their mind or their, their mindset is I need to come up with everything that they need to go do. Which I think is a mistake, and a lot of people don't really. Jason Smith: [00:16:18] Right. Well, not really, but yeah. Jason Swenk: [00:16:20] Yeah. It's just like, I have to detail everything I want you to go do, rather than just saying here's where the agency's going. Now you're the how person. I'm the where and why you're the how, right. And you just go execute it. And like you said, you hired the right person. It's going to be amazing. Jason Smith: [00:16:38] Yeah. And you may not hire the right person the first time, you know, I mean, and don't get me wrong. We've had our ups and downs and we've had our disagreements and, but that's just, I mean, that's life in general, you know, and you just gotta get through it. He's a great guy, great person, very organized. He's an operations dude. That's exactly what I needed. You know, cause I am not an operations guy and I do not know how to go into Trello and build boards and cards and all that. Like, I hate doing that stuff. So I'd rather be talking to somebody about our agency and how good we are at Facebook ads and, and running high-quality Facebook ads. That's what I'm good at. Jason Swenk: [00:17:14] Awesome. Well, this has all been amazing. Jason, is there anything I didn't ask you that you think would benefit the listeners? Jason Smith: [00:17:20] No, I just, uh, the only thing I do want to add is, is when you're ready to hire an agency for your Facebook ads, make sure you interview them. You have some great questions for them. If you have a resource that you can reach out to, to ask if, hey, if this agency is good or whatever, don't blame the current agency coming in for all the stuff that happened before, because chances are, you know, if you hire the right agency, they can be a good partner. And I want to stress the word partner because a lot of times. Business owners don't think a Facebook agency is necessarily a partner, but we're helping you grow your business triple and quadruple your business. And that's what we've done for companies. And that's why they'll never leave us is because we've grown them so much. And we're such an asset to their brand. They'll never, they'll never leave. So it's pretty cool. Jason Swenk: [00:18:06] That’s awesome. And where can people reach out to you if they want to chat more about Facebook and I highly recommend they do an amazing job. So where can they go and check it out? Jason Smith: [00:18:15] Yeah, they can go to, um, spotlightsocialadvertising.com or reach out to me. Jason at spotlightsocialllc.com. Jason Swenk: [00:18:23] Awesome. Everyone, go check them out. Reach out to Jason. They do an amazing job. And if you guys want to be surrounded by amazing agency owners, like Jason and many others, and just really be able to have that sounding board, that board of advisors to show you or see the things you might not be able to see and just have a lot of fun doing it. Make sure you guys go to digitalagencyelite.com. That's digitalagencyelite.com apply and maybe we'll have a conversation and then maybe you get to hang out with Jason and I and a bunch of other really cool people. All right. Till next time, have a Swenk day.

True to his gambler style when it comes to making business decisions, entrepreneur Eric Siu bought a failing marketing agency for $2 back in 2014. By refocusing the agency's vision from an SEO agency to a full-service digital marketing agency, Single Grain has grown into a full team of expert marketers who share Eric's vision and passion for constant growth. Now he joins us today to talk about how you can use a game mentality to grow your agency by constantly leveling up. 3 Golden Nuggets Lack of vision leads to making mistakes. Eric talks about the time when he almost lost everything. He says that, at the time, he had no notion of culture and no vision, and it almost cost him everything. Luckily, he was able to turn it around. The game of life. The philosophy he shares in his book and has implemented in his agency is to look at it as a game. You need to be constantly leveling up. There are always new challenges and, if you’re not where you wanted to be yet is because you haven’t beat the current level. It’s a game of resources, he says, you decide how you want to use your resources. Going back to the basics. Sometimes we need to go back to the basics. Some of the smartest agency owners are really good at SEO and use these tools to find websites in their niche that's ranking for all the keywords they want, buy it, and then have that advantage. And let’s not forget that these tools can also help grow your agency on a small budget.       Sponsors and Resources Wix: Today's episode is sponsored by the Wix Partner Program. Being a Wix Partner is ideal for freelancers and digital agencies that design and develop websites for their clients. Check out Wix.com/Partners to learn more and become a member of the community for free. Subscribe Apple | Spotify | iHeart Radio | Stitcher | Radio FM How to Grow Your Agency By Constantly Leveling Up Jason: [00:00:00] On this show, I bring on a past client where we talk about how he's grown his agency and he has a great book called “Leveling Up” and going through the stages and talks about e-sports, and we talk about sports and how you can use this in order to really grow your agency. We talked about Clubhouse, all kinds of stuff. It's a really cool episode. We jump all around and we talk about a $75,000 Pokemon card. Crazy stuff. So, you're going to love this episode. Let's get into it. Hey Eric. Welcome to the show. Eric: [00:00:36] Good to see you, Jason. It's been a while. Jason: [00:00:38] Yeah, man. It's been a while since we worked together. So tell us, uh, for the people that haven't heard of, you tell us who you are and what do you do? Eric: [00:00:45] Yeah, thanks. So my name's Eric Siu. I helped level up the world through marketing. I have a couple of marketing businesses. I have an agency called Single Grain, a software company called Click Flow. And then, uh, we got a whole, you know, marketing education stuff and marketing school and the events tied to it. So a bunch of stuff. And I also invest in different MarTech SAS companies, which is my background. And then, um, other than that, I have a podcast called Leveling Up. I have a book called Leveling Up right here, coming out, and then I have a podcast called Marketing School and that's basically it. Jason: [00:01:12] Very cool. And so how'd, you get started in all this? You haven't been in the agency world too long. And so how did you kind of jump into it? Eric: [00:01:21] Yeah, so it's pretty unconventional. So the agency that I took over and, you know, the story already, I bought the company for $2 out of pocket because it was a failing SEO agency at the time, because the Google algorithm updates basically made the business model invalid overnight. And I was brought in as a number two to help save the company. Because I'd previously had helped turn another company around, which is a startup. And so this was a different challenge, you know, different service, like the plane's going down, right? Like, can you put the plane back together while flying it? I was like, okay, this will be an interesting challenge. About six months into it, the four other co-founders said they wanted out. And Neil Patel was my podcast co-host he was like, hey Eric, you should get out as a friend. There's no brand equity. There's nothing here. And I was like, okay, why don't we do this? I'll give it a shot. I'll buy it. I'll pay $1 for 10% of your shares and another dollar for another 10% of another partner's shares. The rest through the profits of the company, with contingency that the company failed and owned nothing. So asymmetric bet, you know, I'd have unlimited upside with my downside would be it's basically an MBA, right? And so fortunately it worked out, but I almost lost everything. I'm happy to go in that direction, but that's how I got started. First year, had no idea what I was doing dropped all the way down to one employee. Jason: [00:02:28] And so, you know, a lot of people are listening. They're like, what was the point where you almost lost everything? Let's go to that story a little bit. Eric: [00:02:36] Yeah. So two thousand... what was it? Thirteen or so, something like that. New year, I'm like, okay, look at me. I'm the CEO. Now I own a hundred percent of the company. Look at me. And I ended up reading this book called “Let My People Go Surfing” from the Patagonia co-founder. And I was like, yeah, let my people go surfing. Nobody wants to be micromanaged, whatever, stop showing up to the office. So I'm like, you know, I hired some senior people I'm like, yeah, let them do their thing. Whole thing implodes. And then I have people calling me saying, you know, people are showing up to the office and like just wearing like, almost like pajamas and eating like chips while watching Family Guy. Whole thing is just blowing up in front of me. And then my outside accounting firm calls me and they're just like, hey, it might be time to shut it down. Basically I went from bad to worse just because I didn't build a rapport with anybody. I let them do their thing. I had no vision. I had no sense of what culture meant and the whole thing just fell apart. And I almost took another job. So I was at a crossroads. I had said yes. And then I basically, the next day I was like, I can't do it. And I continued on with Single Grain. Jason: [00:03:31] And so that's the all-time low and your accounting firm says, you know, let's throw in the towel, Eric, what did you do to turn it around? Eric: [00:03:40] Yeah, when I first started at Single Grain, because my background's in SEO, we were getting about 4,000 visits a month, which is okay for a blog. I had started to focus on a lot of guest blog posting, a lot of, um, you know, building more relationships. And we started publishing a lot more content. We had good domain authority on our website, which is just how strong our website is. And throughout that first year it started to increase rapidly. So we went from about 4,000 to about 50,000 visits a month. And then we got that number one ranking for the agency keyword that you know about digital marketing agency, right. I have nothing to hide. And so that's how we started getting all these leads, and unfortunately I couldn't fulfill the leads anymore. So what we started to do was we started to refer the leads out and I would take 25 to 30% commission for the lifetime of the customer. That kept us afloat. And then I realized that these other agencies were, they couldn't retain the client. And so from that point on, I was like, okay, let's take on some contractors. We have some more money to play with. We took on some contractors and then from there we're like, okay, the contractors are good, but they're not, they're mercenaries throughout fully embedded with the culture. So then we started hiring full-time people. It really started to take off again, once we hired that integrator and I'm sure people have talked about it on this podcast, visionary integrator concept, rocket fuel. And that's when things started to blow up. And my thesis has always been with the agency. If I were able to make it work, the services business is not super interesting to me, but the cash flows to be able to take that and go reinvest in more exponential or durable sources of income. That's more interesting. And fortunately, that worked out and then now, you know, combined with everything, we’re at about eight-figures. We’re over eight-figures. Yeah. Jason: [00:05:08] And so what's kind of the percentage that you would reinvest and did that number go down over time? Like, you know, in the very beginning sometimes, or did it go up over time, but everybody's probably listening are like, well, how much should I reinvest in the company? Or should I rate the company? Eric: [00:05:26] Yeah, that's a great question. I would put an asterisk by this because I come from a gambling background. So all in, you know, if I'm betting on myself, best investment ever, right? Warren Buffet. I don't recommend this for everyone because your mileage may vary. You might have a mortgage, you might have a family to take care of. Who knows? Like there's a lot of other commitments. I was fortunate enough where I didn't have any of that to worry about at the time. So I continued to press every single year. I put everything back into the business. I think it's fine to pay taxes. Absolutely. But if you have a good sense of what you can do with the business and you can create more jobs from it and you don't have a lot of other overhead to worry about, then, you know, for me, I kept pressing. And so for me, it was a hundred percent and I didn't necessarily want to raise money because, you know, I've seen that game before. Right. And there's nothing wrong with that. And in some cases I might raise money for other stuff and we have, but at the time I just wanted to bootstrap my way up to, to prove that I could do it before, you know, thinking about anything else. Jason: [00:06:17] So let's talk about, you know, Leveling Up. Why did you write it? Eric: [00:06:21] Yeah, that's a good question. Uh, I remember on another podcast, this guy, uh, Anthony Pompliano was asking me, why are you doing a book? Nobody reads books. And I'm like, well, I read books. So I started writing this book, and I don't recommend this, while I was trying to save the agency. Stupid. And people are like, yeah, it's going to take you probably five to six years to do it. It took me six years, probably seven drafts. I was like, it probably will probably take me two. Took me seven. And so, I come from an e-sports background. All I was really good at growing up was games. And you know, there's a stigma towards games, right? Parents always looked down on me, friends, maybe didn't respect it. And then it was just like, I wasn't seen, and now you see e-sports taking off, but you have 3 billion people in the world that are playing games and then feel like they have a stigma. They feel unseen, but in sports and I'm sure you've played sports. Right. But just understanding that look, sports foster teamwork, communication, resilience, all that, all that I got from games. And my point is, you know, I think business is the ultimate game. Life is a game and I wake up every day and it's the same feeling I've had growing up. It's fun. Right. I'm just going to keep playing until I die, which is why I have a fundamental kind of buy and hold model where I just want to go buy other businesses. And so. That's what it is. I just do this, have fun. I've treat life as a game there's level-ups, right? In the book I talk about, you know, one of the chapters is thievery. If you think about Apple, you know, Apple, as an example, by the way they stole this from Xerox, this mouse, they stole from Xerox, Steve Jobs himself said everything in life is a remix. And so if we think about Elon Musk, the rockets, they look fundamentally the same, you know, you just add on the 10 to 20%, that's unique. They come back to earth. And so I think encouraging people that like. That chapter talks about where I ethically learned to steal, right? And people have a there's cognitive dissonance there because we all like to think that we're original. And so the book is about treating life as a game and going out throughout life and collecting power-ups and from a business perspective, just understanding that there's levels to the game. Right? So, Jason used an example, you had the agency, you sold it and you started doing the training. And then now you're back in the agency game, but you're buying other businesses you're investing. And so you’re consistently leveling up and that's what it is. And you don't have to get to the next level. But if you want to get to it and you don't get to it, it's just because you didn't beat the current one. Jason: [00:08:23] Have you ever played the game Age Of Empires? Eric: [00:08:25] I haven't, but I played a lot of StarCraft and Warcraft. Jason: [00:08:29] Okay. So there was a game in college that I would play with a bunch of my buddies where the kind of start off in the stone age and you have to acquire wood, gold, and I think food, and as you acquire so much, you actually start moving up to the next stage and then your weapons get better. Your houses get better. Your technology gets better. And that's kind of how I have always looked at, and that's one of the reasons why we created the agency playbook and that framework of kind of like you're talking about you're going, all right, once you get to the next level, you have to kind of reset a lot of, you know, the gold, the water, the food, and you have to kind of almost start over. Is that kind of what you're talking about with leveling up? Eric: [00:09:10] It's exactly that. So StarCraft, Command and Conquer, you know, Warcraft and I'm not familiar with Age Of Empires. It's, it's a strategy game, right? We're all, what we're playing is it's a resource game, right? You decide how you want to use your resources and you can go get more resources than those that do the best job they get the most. Right. And that's not saying, we, you need to go get the most necessarily, but that's how you do it. That's how the game is played. Jason: [00:09:29] So, you talk about is the first level kind of a, I don't like to use steal. I like to kind of like reenergize it, like you were saying, you know, Apple wasn't the first that came out with MP3 player, they were the ones that made it better. Right? They kind of took something, you know, and the mouse you just showed me, I'm surprised he's still using a mouse. Like, who are you? Like he's still using them. But they made it out of like a soap thing if, uh, from the story that I heard, uh, which is kind of cool. So is that the first level of the 15 that you're talking about is kind of like. Eric: [00:10:04] No, it's not, I mean, you know, it starts out with, uh, you know, newbie mindset, right? So whether you want to call it newbie mindset or beginner mindset, understanding that let's say you, Jason, you're continually learning, you're getting better and you have an open mindset. I think, as you become more and more successful as you, you gain levels. Sometimes it's easy to get cocky and let your ego get in the way. And so, you know, there's just those types of concepts. And again, if you compare it to a game, if you get a sword, for example, you keep using it, you're gonna lose durability. Some, some you have to keep sharpening, right? So on the spot, just because you wrote yesterday, it doesn't mean you don't have to write again. It's to keep training your mind, you know, your physical body. All that stuff. And your life is like just going around, collecting power-ups to make you more efficient as a person. And, you know, it might be a very kind of, you know, neurotic way of looking at it. But at the end of the day, life is just a lot of, “if this, then that” statements. So we're, we're in essence robots. Jason: [00:10:57] When you're an agency partner with Wix, you wanna lock entire digital ecosystem for creating, managing, and growing your agency. Get the full coding and design freedom to create anything your clients need along with the tools to manage and collaborate with your team seamlessly from anywhere. And when it comes to growing your agency, you can get matched with new leads every day and earn revenue share for every website you guys create. They’re backed by the Wix industry, leading security and site performance. You'll also have a dedicated account manager on standby 24/7. So you can reach your goals and start setting new ones. See for yourself, head over to wix.com/partners. And re-imagine what your agency can accomplish. Yeah. I'd see a lot of people trying to over-complicate things, you know, like when I work with someone or when they come into the mastermind, they're trying to think so far ahead. And I'm like, you sometimes just got to go back to the basics. I grew up playing tennis and I played in college. I remember one time, and I tell this story I think a couple of times on the show, where I was getting crushed by this one kid that I was so much better. And my coaches yelled at me go back to the basic stupid like I was trying to overthink this complicated thing of going. I was like, ah, just, hit the ball over the net and wound up beating them. And I think we do a lot of that in business. We just overcomplicate it. And if we just went back to the basics. That's kind of why, you know, with technology and you see this all the time, it's a great responsibility and we have all this power. But you can really send people away. If you don't just kind of go back. And I think what Gary Vaynerchuk talks about, you know, the Jetsons going back to the Flintstones and then you can separate yourself from everybody else. Eric: [00:12:54] Totally. Yeah. That's well said. Jason: [00:12:56] What are some other levels in the book that you talk about? Eric: [00:12:59] Yeah. So one of them is about thinking long-term. So I'm just looking at this Pokemon card. You just mentioned Gary V. So one of the guys that used to work for me is now on his brand team. He actually just told me this Pokemon card over here. So it's like, okay, I'm looking at this piece of cardboard. I paid, there's like $75,000 Charizard cards. I paid like two grand for this one. Jason: [00:13:16] What? So wait, wait, wait. There's a $75,000 Pokemon card. Eric: [00:13:21] Yeah. So I'll tell you how this all relates. Right? So you're in business. I mean, you can definitely, you know, take a look at trends. What's trending, but also thinking about the long term. So when I, when I buy this thing, if I think about the markets a little bit, if I think about what's going on in the world.  Where should I be putting my money? Okay. I'm not trying to get a return on this immediately. I'm just going to store it. Right. You know, this thinking about art, think about collectibles, so A I'm looking at trends, but also I'm thinking long-term like, I'm totally okay with losing money on this. So. What type of long-term decisions can you make? Right? So for example, you mentioned profit a little earlier. Can I defer profits for as long as possible so I can build enterprise value in my company, right? And this applies directly to agencies as well. Can I think long term where, you know, maybe I want to work with people. Can I build the right culture? Cause a lot of agencies that you might talk to, maybe you don't wanna work with these people because they're too short term focused and there's a lot of ego and they just want to make money, right? That's not long-term thinking. So that applies directly into life, and in business in general, you want to work with long-term people and play long-term games with them. Jason: [00:14:19] Love it. What else? So I'm still blown away by, uh, you know, I look back at all the baseball cards I collected over the years. I mean, I have, Hank Aaron, Mark McGwire, all these amazing ones. I don't think there was anything close to that. Eric: [00:14:32] One just sold, that's the record, 5.2 million bucks baseball card. A couple, I think a couple of weeks ago. Jason: [00:14:37] Babe Ruth? Eric: [00:14:38] I don't think it was a Babe Ruth. I think there was a Mike Trout card that sold for like over a million. Jason: [00:14:42] Who's Mike Trout Eric: [00:14:44] You, you, Angels Slugger. Jason: [00:14:47] Oh, I've been out of the baseball card games since '91. Eric: [00:14:52] Yeah. Well, but let's see, like now it's like, okay. Maybe it makes sense to get that hooked. The Rock has a U of Miami card. It's worth 45 grand right now. When he, when he was playing in college, right. Jason: [00:15:02] It's crazy. Well, I'm Florida State. I would burn it even though I do like The Rock. I still like you, Dwayne, but I would burn anything with Miami on it. Yeah. I was listening to something with Gary Vaynerchuk and he was talking about collecting business cards as baseball cards. Of going, if you could get the original Steve Jobs business card or Jeff Bezos card, that would be interesting, right. And thinking about that. So we're totally off track. I just got so screwed up by the $75,000 Pokemon card, but that's my ADD, what are some other levels that you talk about in the book? Eric: [00:15:41] Yeah. So, you know, one thing I want to touch upon is the concept of the wealth ladder. And this actually comes from the CEO of ConvertKit, Nathan Barry. And so, you know, when you start out in life, you go to school and then you try to build great habits, right? Whether it's playing sports or games or whatever, and then it's like, you go get a job. And then the next level after that is maybe you start freelancing on the side, right? Maybe you kind of hold the job to kind of keep you safe a little bit. And then it starts going well, maybe you start the agency, right? Or you can start with dropshipping first. It's not the best e-commerce business model, but then it starts going while you start to hold inventory. So you're constantly leveling up in your career. And the next thing is maybe have productized services for your agency who knows, right? Or maybe you do go on a pay-for-performance model. You can do that too. It scales really well. Right. Revenue per employee, is super high. Then it's like, Oh, you know what? I got out all this extra cash now. Why don't I go build a network of X business, right? Or why don't I go build like a platform business? Or why don't I go build less space X? Or why don't I just become an investor. And not all of these are mutually exclusive, but you can see there's levels to everything. And so that's what we were talking about earlier about, that's the concept of the wealth ladder. So I think those that are listening right now that maybe might be starting out, or maybe doing a couple million bucks a year, just understanding that there's levels to everything. And, you know, I think Jason, I can both attest to this stuff takes a lot of time. So that's another concept. Jason: [00:16:54] When do you know you've reached the top of the level that you should be? Because I see sometimes people get to a certain level and then they go. Man, I liked it back in the day with like the typical situation with a lot of people, like they're an accidental agency owner. They got kind of thrown into this because they knew how to do something well. They were like a freelancer and then they were like, well, I don't want to do everything myself. So let me hire people. They hire people. And then they realized that the business is making more money, but they're making less. And they're like, I just want to go back to where it was. And so some people go back to freelancing, which is perfectly fine, and it's just, you've reached that level of where you want to be, or you go find a different level or some people implement the right systems and then they can kind of break through and figure out what's the next step. So how do you know when you're at the right level or. Should we move? Eric: [00:17:51] Totally. Yeah. So I think there's two things. There's contentment. And then there's congruency. I think when you're waking up in the morning consistently, maybe three days in a row, and then you're realizing that Holy crap, this agency behemoth that I built, that's maybe doing 20 to 30 million bucks a year. And maybe I'm not making as much as before. Maybe this is a pain in the butt and this is not congruent, but you still keep finding yourself doing it consistently. So there's no congruency there. Right. So asking yourself, okay, there's something off there. But then also asking yourself to like, am I content? Forget about the future. Forget about the past. Like, am I happy right now? Am I content with what I have right now? Right. So we're getting philosophical here, but ultimately that's what matters right? In life. Like your operating system up here. If it's not content, then why are you doing what you're doing? So I think taking the time to reflect, I used to just work the entire time, seven days a week. Now I block out my Fridays and those Fridays are typically just reserved for thinking. I might have conversations with a couple of friends or whatever, but. Block out that time, like, what should I start doing? Stop doing, keep doing what, what really pisses me off right now. And it's just constantly like, you know, kind of updating my operating system, my brain, you know, that's at least what so. Jason: [00:18:56] Very cool. Let's talk about what are some key strategies that every agency owner needs to know about? Eric: [00:19:03] You know, I, I think still, like we want to talk about mergers and acquisitions. I think unfair advantage agency owners have, you know, people are like, oh, SEO's dying, whatever, but like, okay, Google, YouTube, hello. Like, they're still one of the biggest companies in the world. As long as there’s search, there'll be SEO. And, um, the fact that some of the smartest founders I know are really, really good at SEO because it's the compounding effect is so strong. So, let's say you don't really understand SEO right now. That's fine. Can you go use a tool like Ubersuggest or Ahrefs these SEO tools, go find a website in your niche that's ranking for all the keywords you want. Go buy it, right? And then all of a sudden you have the advantage. You're going to collect all these leads and you can retarget all these people hitting your website. And you can buy these websites for, you know, I wouldn't say pennies on the dollar, maybe dimes on the dollar, but a lot of these websites are, are under-monetized, right?. So I just think it's people going back to long-term thinking again, if you start with SEO, it forces you into long-term thinking because all the short-term stuff I tried in the beginning, it gets torn up, but the hit, the long-term stuff, it just keeps compounding and it forces you to think like an investor. So how can you take the MMA mindset that maybe Jason's been talking about on this podcast or in his mastermind, and then using it from a marketing perspective? That's one thing. Jason: [00:20:13] Yeah. You know, I, I love that you brought that up cause, uh, a mastermind member we've been talking about that quite a bit about buying certain assets that rank really well, and he's been crushing it, you know, on it. So it's, uh, it's not necessarily just buying the whole company it's buying, you know, assets in order to fit into, you know, those things that you're missing out on, rather than just trying to build it up from scratch. Eric: [00:20:44] Well, by the way, like, I think that's what you and I are. We're kind of nerding out on before. It's not now it's just buy versus bill and there's a book called “Buy Then Build”, right. And there's another one called “Buying a Small Business”. It's a lot more complicated than it seems. And not saying it's easy, but it's, um. Look, I think if I can do it at least I think anybody can do it. So. Jason: [00:21:02] I agree with that. No, I'm just kidding. Eric: [00:21:05] But the other thing too, by the way, I don't know if you've been hanging out, hanging out in the Clubhouse. I've been spending quite a bit of time there. So I I'm investing 20 hours of my time a week in it, but like I'm meeting like two or three amazing people every single day. So I just think the organic reach on that is super strong. And, um, you know, obviously with these social channels, the bigger they get, the less organic reach there is. So. Jason: [00:21:26] On Clubhouse, I have been, I like it. You know, my thing is I'm at this stage of my life right now, where I don't have 20 hours a week to invest, or I don't want to invest 20 hours a week in it. And you don't have to invest that much, but like Eric's saying is you can get that much more back. So how are you utilizing it? Are you just utilizing it to build, you know, relationships? That's what I've been seeing on Clubhouse. What are some strategies around that? Eric: [00:21:56] So, for those that haven't tried it, I mean, you know, audio-based social network. So for me, it's networking at scale. It's building relationships at scale right now. We're not able to kind of, you know, meet in person as of this recording, but that's what it is. And so you see a lot of these people, like let's use Grant Cardone or Ty Lopez love them or hate them, they're spending a lot, a lot, probably more time than I am on these apps. Like there's one guy that I'm friends with, um, he was part of this rap group called Pretty Ricky. You know, he's on the app all the time, but it's some of these people, I were, I was just like acquaintances, what's in the past, but we've interacted quite a bit and we start interacting afterward. So it's reinforcing or building new relationships. Like I never interacted with Grant Cardone before the app, uh, Ty Lopez, same thing. Now I do, right? And then a lot of other influential people. But what I'll say is this too, what kind of came full circle for me was when I was about 24, 25 years old, I reached out to this guy, Dave Capernaum, he runs this agency called Likeable. And, um, yesterday he was in room. And he introduced himself and I just came. I tried to and I said, hey, like, you know, you actually got on the phone with me when I was 25 for 30 minutes. And you'd talked about this organization, entrepreneurs organization. And I, I owe that all to you because you brought it up and, you know, thank you for that, right?. And then all of a sudden he's like, oh, by the way, like with your upcoming book, I have 700,000 followers on LinkedIn. Let's do a Live. Okay. And let's also get you an article on ink as well. But that just came from me, like talking about him for like 15 seconds. So it's a lot of serendipity and it's a lot of relationships at scale. You get what you put in. Jason: [00:23:16] Totally agree. Yeah. I mean, I, uh, I love obviously the audio and I love that it's not recorded and you have to attend live. What I find working really well on Clubhouse is getting in a room with a bunch of people. I mean, if it's just two people talking, not good, might as well listen to a podcast. I mean, if you can get a ton of people and they're just having a conversation, it's kind of like it amplifies it where it's like you're listening in to someone's dinner conversation around something you're really interested in whether it be growing an agency or whatever it is. Eric: [00:23:51] Some these conversations like, you know, legit people would be paying 10 to 20, $30,000 for a mastermind to learn. And I hate using that word because it's become kind of this, not saying yours is, but it's dirty and in a lot of different ways, but, um, you know, it's. So let's say, peer group. Right. But being able to listen to this advice and some of the stuff I listen to, I'm like, oh crap. You know, I'm going to try it. So I have gotten some really good stuff on it, by the way, like the peer group that I do with, you know, Neil, my podcast co-host, we had a live event. And through Clubhouse, I learned about this thing called a shuttered venue type of grant coming out as part of the coronavirus relief. I didn't know about that. But some guy talked to about, he's like, yeah, you can get this. And like, yeah, we had a shut to our event last year. It's going to come back. But you know, that's what it is. So just little micro-moments like that. Jason: [00:24:31] Very cool. Awesome. Where can people go and get the book? Eric: [00:24:35] Yeah, you can go to levelingup.com or you can just go to your favorite online retailer. It's Leveling Up Eric Siu and you'll find it. And yeah, that's basically it. Jason: [00:24:43] Awesome. Well, everyone go check out the book. Uh, Eric's a really cool guy. And if you guys enjoyed this episode and you guys want to be surrounded by amazing agency owners on a consistent basis where. We have a ton of fun. We're able to see the shit that you're not able to see right in front of you. And a lot of times we'll talk about strategies that we don't talk about anywhere else. And it's pretty amazing. So if you want to scale your agency faster, be surrounded by amazing people and have a lot of fun doing it. Make sure you guys go to digitalagencyelite.com and until next time have a Swenk day.

With just a little over two years as the CEO and co-founder of The Influencer Marketing Factory, Alessandro Bogliari and his team have built an amazing global influencer marketing agency. They help brands and companies launch influencer marketing campaigns on TikTok, Instagram, and Youtube. Alessandro joins us today to talk about how to identify trends and what to do in order to really separate your agency from everybody else. 3 Golden Nuggets 1. Starting on a budget. Growing his company from just two workers to 20 in a short amount of time, Alessandro highlights the importance of being able to grow your agency on a budget. You can still get amazing results on a budget rather than spending money you don’t have. 2. Don’t just hop on a trend. Every time you create content for social media you should always take into account the specific medium, demographics, and type of user experience. Don’t just hop on the new hot thing before you understand it.    3. Be curious. Dedicate some time to research, listen, and read about what’s trending right now. Engage with the new generations and given let them show you how they use social media. You have to keep up. Don’t just read about the new thing in the newspaper, because by the time it gets there, it’s already been happening for a month and it's old news. YOUTUBE VIDEO AUDIO LINK Sponsors and Resources Oribi: Today's episode of the Smart Agency Masterclass is sponsored by Oribi. Check out Oribi.io/smartagency for a free trial. Plus when you sign up for Oribi get 20% off the first three months with promo code: Smart Agency Subscribe Apple | Spotify | iHeart Radio | Stitcher | Radio FM HEADLINE Jason: [00:00:00] On this episode, I talk with an amazing agency owner who's grown his agency to really big and in a very short time for really looking at the trends. And so we go through, how can you identify the trends and what do you actually need to do in order to do that major land grab and really separate your agency from everybody else? It's a really cool story. I hope enjoy it. Hey Alessandro, how are you doing? Welcome to the show. Alessandro: [00:00:30] Yeah. Thank you so much for having me, Jason. Jason: [00:00:32] Yes. I'm excited to have you on and tell your story. So tell us who you are and what do you do? Alessandro: [00:00:39] Sure I am the CEO and co-founder of The Influencer Marketing Factory. We are a global influencer marketing agency. We specialize mostly in TikTok, YouTube, and Instagram. Um, we are based in the States, but we also have people in Europe I'm from Italy originally. So I understand the importance of having people both in the US and Europe. And we mostly help the brands and companies from Fortune 100 up to, you know, direct to consumer stuff of companies, get in front and engage with gen Z and millennials on like major social media. So that's what we do. We help them from the beginning of the like, understanding the KPIs up to reporting and digital analysis. Jason: [00:01:17] That's awesome. Now, how did you get started? Alessandro: [00:01:20] Uh, I started a couple of years ago. So the agency is like, you know, fairly new. Uh, started no funding, no VC, just a couple of people. Uh, both Italian and because we started that as a new journey and we understood before I'd say anyone else I think is like, you know, one of the few agencies that understood the potential of TikTok, back in late 2020, early 2019. Although other agencies and companies were still thinking that like, you know, TikToK was a kids app. It was just something for lip-sync and dancing, but I was a big fan of Vine and it was discontinued, but I was so love with it. When I saw TikTok and I was watching so many videos on YouTube about TikTok compilations, it was a different environment. It was a little bit more cringy, let's say that, you know, with furries and gamers and everything, but I saw the potential. I was seeing Instagram going down in terms of organic creation. And TikTok was giving the opportunity in a really democratic way to give like in a meritocratic way for everyone to get the spotlight that they did deserve. And so we said, let's really focus on that and invest on that. And we, we, we have done that. We started growing, we started getting amazing clients on like Sony Music, Universal, Warner Music Group. And then we got Google and some others. And these friends. And yeah, from two people now we're 20. Again, between Europe and the States. And, uh, so again, it started like, you know, uh, just totally like organic and we're actually growing in that way. And I'm so proud of what we have achieved so far. Jason: [00:02:51] Tell me a lot of people listening want to understand, because there's always new shiny red objects out there. Okay. And so kind of what you described is going after the shiny red object and it actually working, which is amazing. And there's always, you know, new apps coming out like clubhouse is out and everyone's talking about it and you know, saying, oh, that's the next big thing and all that kind of stuff. So tell me the, kind of the, the story about. How did you go, all right, let's go all in on this and not just get distracted by all those other things. And then how did that turn into landing the Fortune 100 companies that you're talking about. Cause a lot of people are going well, how do you land some of these big brands? Like I remember that's how, you know, my agency brain worked many years ago going, man, how does this one company get, you know, to work with Coke and how does this one company get to work with Home Depot and that kind of stuff. And then, so tell that story a little bit. Alessandro: [00:03:51] Yeah, of course. I have to say that I have to mention that I've done many years as a growth hacker and a growth marketer, as you want to call it. So it's a lot of like out of the box marketing ideas, it's a lot of like data scraping, SEO, both like white and black and gray, you know. It's understanding how you can be on a budget. And still get amazing results also without adding maybe millions in your pockets. Because when we started, you know, we, we started at zero in terms of investments. So you have to think about like, okay, what is the typical way we don't have the money to do that. How can you start in a little way? And so, to be honest, like I spent a lot time doing SEO since day one and, um, thanks to that, we got the majority, like we get 95% of our clients, maybe now 90 because of a lot of it it's retention and word of mouth. But we've got those thanks to SEO, good positioning, referrals, the position we’re on listed. I mean, now just today we are fourth on Google for in terms of marketing agency. And, again, we started two years ago. If you look for TikTok, like, marketing agency, we are second in the US. So what we have done is that, while we saw for that opportunity especially for TikTok, we created a landing page. And we started doing some backlinking and the competition was zero, right? Like no one had anything about TikToK. And we went all in. We had nothing to lose. We were not like in, in this for two-three years, we were starting from a few weeks. So we said, you know, why go, yeah I mean, we were doing Instagram and YouTube of course, but it was so competitive. So we said how we can get like an advantage on that and getting in on SEO where no one is dealing there. That was TikTok, we thought. We did that, we did our landing page, easy one. We created some really good backlinks. I've been also working a lot with journalist that we'd did a lot of for free. That's why we have been featured on a lot of publications. Writers, Wallstreet Journal. I personally write on Forbes and many others. We got on ID week and so on. So, you know, those really good backlinks at Google understands that they are valuable and you start getting the right positioning. And what happened is that managers at these big companies, they, what did they do, they, our people hopped on a ride, so they go on Google and they look for a solution and they find you. And then after that to start creating case studies, you build up your credibility, your awareness of your branding, your positioning, and after that. If Sony is doing something, Universal Music and Warner Music Group, are going to look at that and say, hey, they are doing this, can we do that? They do some digging and then they found out about the company or the agency behind that, and we start growing. So it's, step-by-step, it's super long. It's super like, you know, sometimes probably it takes a lot of energy, but again, you can start for some action. I think the SEO is an amazing way to start, especially if you think about budget. Jason: [00:06:54] If you're like many agency owners, it's very hard to show results and show value to your clients for the hard work that you've done. And up until now, you've probably been using Google Analytics, which is really kind of clunky and hard to use and just been around a long time. And there really hasn't been an alternative until now. And I want to tell you a little bit about, Oribi now I've checked out this tool and it's really pretty cool. It doesn't require any code for you to track interactions and conversions. There's no more jumping from different platforms. You can track your social and paid media really all in one place. And it really allows you to build smart funnels and get tons of insights. I mean, literally I've even set it up where I could say, I want this visitor to get to this particular page and it will tell me what's the likely chance that they actually get to this page and what pages are actually coming from. It's really pretty cool. So, if you want to really kind of get away from Google analytics, I want you to check them out, go to Oribi oribi.io/smartagency. And just for my listeners, you're going to get 20% off the, for the first three months using coupon code smart agency. I think it's really, really smart. Like you said, there's nothing for you to lose. Like let's just go after TikTok, there's no one doing it. And especially if a big company comes to you for TikTok, they're going to want Instagram and all the other ones out there. So it's just a really smart strategy. And I like how you systematically went through it. Let's kind of switch focus a little bit, and let's talk about Instagram Reels and TikToK, and let's have some fun about how agencies could use it, because I see a lot of agencies using it very poorly. So let's talk, what's working, you know, when it comes to developing that kind of content or content strategy around it. Alessandro: [00:09:01] Definitely. Yeah. Good question. I can see a lot of companies that are trying to understand the differences. We just released one week ago, uh, an infographic about basically Reels versus TikTok. We have scrapped and analyzed the 60 active influencers on both platforms that, that, you know, like uploaded at least many videos. And what we noticed is that in terms of the average views it's pretty the same, like the same in terms of like, you know, of course, like, you know, there are some people getting 50 million, others are getting less, but on average we saw the same. Instagram Reels, Instagram is definitely pushing a lot Instagram Reels, but just because they want to be like, you know, still they're the cool kids, right? They want still to be in a way understanding, especially gen Z. But what we noticed is that this is that, this is what I say all the time. Instagram Reels is still, in my opinion, even if it's pushing, Instagram, it is still network-oriented, you know? So you follow your, your friends and friends of friends, but at the end of the day, it's mostly about like the people that you start following. While on TikTok, it's a sort of an inverse funnel. No matter what we're following, you're going to see all the time, new content, amazing content from people that you do not follow. Based on the content that you liked. So it's more content-oriented. That means that, um, what we see is that we can see on TikToK, a better engagement into sub-community. Whenever you go to a TikTok video and there is a trend, or there is a meme on that video, you're going to find tons of people commenting on that and making references to maybe a sub-Reddit that they saw like, you know, some time ago. Or they are talking about now, like, you know, the Game Stop, everything that happened there. While, um, Instagram it's, a bit more still on the likes, but the comments are more like, you know, I  want to say didascalic, but, um, they have less engagement and community, like no type of things. So again, they are pushing a lot on that. But TikTok, the big difference is the strong community. So brands, I think that they should understand that, that difference. What I say all the time is that you, if you're a brand, you cannot expect to take it on YouTube video, cut it, putting it vertical and put it on TikTok. It's a different medium, different demographics, different type of user experience. You should shoot all the time a video thinking about the type of medium is going to go. The same also goes for Instagram reels and TikTok. Just one week ago Instagram said, if you're going to put videos with TikTok watermark on it, we're going to show it to less people, right? They want to have original content on that. So I think that a lot of brands sometimes fail it because they make cringey media started to jump on trends, but they have the opposite effect. They try to be cool, but actually they don't understand what happens. That's why I think that only few brands, whenever they give the opportunity to gen Z employees in the company to jump on that and actually really like make content, in that way they kill it because it's not trying to recreate something that is cool, but actually it's sending someone that understands their own generation and make that type of content. So long story short, make a content all the time for the right type of audience, the right type of medium, and try not to repurpose the same on different social media, because the majority of times it's just not going to work. Jason: [00:12:17] Yeah, it's kind of like doing a commercial for CNN and then running that same commercial on the Cartoon Network. Alessandro: [00:12:23] Yeah. Exactly. Jason: [00:12:24] Or Nickelodeon, I would be like, people are going to be like, what, what is this? Alessandro: [00:12:29] Yeah, exactly. Jason: [00:12:31] Awesome. Well, this has all been great, Alessandro. Is there anything I did not ask you that you think would benefit the agency owners listening in? Alessandro: [00:12:40] I'd say, try all the time to understand what is trending. Like not only of course reading the different newspapers out there. Whenever you read the news, it means that it's already been happening for a month, you know, in the communities. Go on, uh, different apps go on the app store, like, and see what apps are trending. What is going to be the future of things. Whenever possible, talk with gen Z and millennials to understand what is really happening in the background, you know, behind the scenes, because they're gonna go and look for the next app. Right now it's TikTok, what is it going to be next. Personally, I'm watching a lot closely what is happening in China for such a commerce. And I'm pretty sure that we all know what is happening there. Uh, like, it started already two years ago. It's going to be now in the US and after in the, in Europe and then after Latin America. So instead of just watching what is happening on, in the US and only closely, like, reading the newspaper, try to get like really in the work in progress. Talk with people that are creating the next trends. And if you jump on those and you're going to be, as we have done in the past, that the agencies that are going to not just understanding those. But understand a blue ocean market getting there before the others and you're going to have a super competitive advantage. So yeah, listen, read a lot that talk with people, do surveys, getting the game there because at the time that you see that in the newspaper, it's already old. Jason: [00:14:03] I love it. I love it, man. And, uh, what's the website people can go and check you guys out. Alessandro: [00:14:08] Sure, uh, they can check on influencermarketingfactory.com. It's our website. They're going to find, find the case studies. We also trying to keep up like it with different blog posts about of course, like, you know, TikTok, but also now more and more on social commerce, we're going to also work now in our reports. So yes, that is the best way to do that. And I need to want also just to connect with me. Uh, you know, they can find me on Instagram with @alexeidos, that is my username, if they want to. And I'm always open to like, you know, get, if they have any questions super epic to like, you know, help anyone that wants maybe to start agency or some young people that want to understand more about what does it mean to be an entrepreneur. Jason: [00:14:44] Awesome man. Well, thanks so much to go check out those resources. And if you want to be surrounded by amazing people that can see the things you might not be able to see that understand the agency world, and you want to be in the know and really see those trends. I would like to invite all of you to go check out the Digital Agency Elite. This is our exclusive agency owner mastermind, where we're constantly scaling faster. We're growing and having a lot of fun. So make sure you guys go to digitalagencyelite.com and until next time have a Swenk day.

When Ben Childs founded Digital Reach in 2011, his mission was to create an agency that operated with integrity, honesty, and skill. Over the years, he has grown to become a leader in the B2B digital marketing space throughout the country, leading a team of 38 people. Today he's here to talk about the things he wishes he knew in order to scale his agency faster. 3 Golden Nuggets Raising prices is terrifying, but necessary. Ben recalls a time when he thought that raising prices was a risky move. But when a new Director of Sales doubled the company's prices, he found that clients would take them more seriously and expected a higher value service. A little outside perspective makes all the difference. Having a network of other agency owners, like the mastermind, can help you get some perspective. Sometimes the answer you're looking for is right in front of you but you're too close to see it. Sometimes you did not do your due diligence and need to be held accountable.  Competition and differentiating yourself. Ben has never considered himself to have competitors. If he's going against others that are too similar to him, then he tries to be different. He asks himself if they are doing what he's doing, how are they different? YOUTUBE VIDEO AUDIO LINK Sponsors and Resources Wix: Today's episode is sponsored by the Wix Partner Program. Being a Wix Partner is ideal for freelancers and digital agencies that design and develop websites for their clients. Check out Wix.com/Partners to learn more and become a member of the community for free. Subscribe Apple | Spotify | iHeart Radio | Stitcher | Radio FM   How Does Ben Solve Big Agency Problems? Jason: [00:00:00] On this episode, I chat with one of my mastermind members that has grown a really nice size agency. And we talk about culture. We talk about some of the things that he wished he knew about in order to scale his agency, to close to 40 people, and really still enjoy it and create that freedom that he wants, rather than that prison. So. Let's get into the episode. I think you'll enjoy. Hey Ben, welcome to the show. Ben: [00:00:32] Good to be here, Jason. Jason: [00:00:33] I'm excited to have you on. We've known each other a while, you've been in the mastermind. So tell us who you are and how did you get into this crazy agency life? Ben: [00:00:42] Yeah. So my name is Ben Childs. I'm the president of Digital Reach Agency. We're a revenue-focused B2B digital marketing agency focused on SAS, tech, startups and enterprise, search, marketing automation, design development, and Account-based Marketing. How I got into it is not too dissimilar than I think most people. I had a job at an agency that was pretty crappy. I kind of woke up one day and realized they were pretty churn and burn. So I moved up to San Francisco with a lot of my buddies and I got a job, this is dating myself, at a Daily Deal startup back when those were a thing and they ran out of money and didn't have a lot of prospects. So I took the, uh, computer. That was my severance package from that job, went to RadioShack next door and got a Magic Jack. And just started calling people from my grandma's dresser that I used as a standing desk saying that I could do their digital marketing. I had sold it before, but I had never done it, so just, I knew the holes in the market and just said, "Hey, I'll be doing the work. I'm going to undercut everybody on price. And you can trust me because I need the money for rent." Sold my first few people without a website, cause they were like, yeah, I love it. Let's do it. And that was nine and a half years ago. And now we're 38 people and. Doing bigger stuff than that. Jason: [00:02:00] I love it. I always tell everybody when they come to me about starting an agency and they're like, what do we need? I'm like, you need to know how to do something really well. Ben: [00:02:09] Yeah. One of the things I like about the podcast is there's no real like service kind of education, because if you're not good at what you do, there's not a lot that you can learn from an operations or client management standpoint. And so I think that's something that, you know, when I talk to people about starting businesses, I'm like, well, are you like good at it? And they're like, yeah, I guess it's like, well, maybe you should. Look, I learned on the fly and I was up at 12:00 AM, blowing up Adwords accounts, learning on the fly. And I, you know, I wished I had known better, but the fact is, is you're going to learn some hard lessons along the way, either way. Jason: [00:02:44] Yeah. Well, yeah, I mean, you never do it perfect. And especially too, when we look back and we go, oh man, I wish I knew this before I hit the million mark or before I hit the 2 million mark. So, what did you wish you knew back then that you know now. Ben: [00:03:02] I wish I knew that I can raise my prices. Raising prices still is terrifying, but I hired a Director of Sales from a bigger agency. Gosh, like five years ago. And the first thing he did is just like doubled my prices. And I was like, that's scary. You can't do that. And he just goes, just shut up, Ben, just watch this. And honestly, people took us more seriously. We started getting more kind of rarefied clients and got taken seriously at the table. And we've just found that raising our prices, you don't want to make it too necessary due to expense creep, but just kind of the more we charge, the more seriously people take us. And you get to the clients who expect that and expect to get longer contracts and expect to have a more gentlemanly relationship than, um, a lot of the riffraff that you're going to get undercutting everyone's prices. Jason: [00:03:54] Well, yeah, I mean, I was kinda like you in the very beginning. It's like I was on a race that I didn't want to win, a race to the bottom. I'll be like, oh, I'll like he said, I'll undercut anybody just to make rent. But I feel that a lot of times you have to do that in the very beginning in order to really kind of cut your teeth to figure out. It's kind of like, I always use it as like a buffet. Like you got to try out all this stuff, but it's almost like figuring out which buffet to try. Like, you remember when you're in college or really young, you go to like the $5, all you can eat buffet and then like you would leave feeling really, really bad. Ben: [00:04:34] Yeah. It's, um, but you don't know how to do it. And I know you had someone on a while ago who I think they were doing PR. I remember that person who like. Bought a warehouse to like ship a bunch of stuff and it was insane and she knew what she was doing. And she was like, I started off boutique and I started off charging huge prices because we are good. And I started off like many people kind of owning a job being like, I guess I'm doing this now. And I was 23, 24, whatever it was. So it's been a ride. It's amazing. Looking back. Jason: [00:05:06] Yeah. And now with a team of almost 40 people, you know, a lot of times probably looking back too, and some people listening are like, man, that just seems like. A lot of headaches. And I remember kind of thinking back because I looked at it in phases. Right. And you probably look at it in phases as well. Like, you have five people and they're all reporting to you, you know, it's overwhelming. And then you start getting up to 10 and they're still all reporting to you. And you're like, how do people do it with more people than this? So, did you go through that situation? Ben: [00:05:38] You know, what happened was, is about a year and a half on, I brought on a couple buddies who were just kind of looking for either. One of them had gotten cut from minor league baseball. One of them, uh, was a professional poker player looking for an additional revenue stream. They're both geniuses and we've been friends since we were kids. They're geniuses. And I brought them on and, um, we ended up kind of doing it together. And so I had a pretty good team from day one in terms of people that could handle stuff. So I would say that the issue for me is they do still handle stuff, and this gets into culture, but talking to the 37th or 38th person here, I just can't handle their problems. And I'm such a people person, and I just radically validate people, which I think comes across to clients and it comes across to employees too. But you get to 38 people and you kind of have to focus what your time is on and be okay delegating to other people. And I know there was a person who was afraid of us hiring someone over him. And normally I would have been on like a two-hour call with them, you know, saying it's all going to be okay. But you know, you're at 38 people and I told you earlier, our biggest client raised their spend to a lot of money with us. And I can't spend two hours on the phone with this person talking about their job. They're either going to leave or they're not. And that seems cold, but it's not because I have people that deal with that and I need to delegate to them. And they're very good at their job and they're better at that than I am. But choosing where to spend your time just becomes more and more imperative because I just love talking to everybody. It just makes me feel good and doesn't make me any money. Jason: [00:07:15] Yeah. There's like a mind shift that I feel you go through when you really truly start scaling where you go. Well, I could do it this way. And I could do it myself and save money, but then you're like, well, all my time is in this. Versus just outsourcing it or bringing on someone to go do that where you might make a little less profit, but you know, at the end of the day, you're trapped. Ben: [00:07:40] Yeah. I think of the book "Built to Sell." Where he talks about owning a job. And he talks about almost like a cause that's about the difference between an entrepreneur and someone who has an entrepreneurial seizure. A lot of people that start agencies have an entrepreneurial seizure where they're just like, I'm going to do my own thing. And then you end up owning a job. And the fact is, is he says, it's better if you don't know how to do the thing you're doing. I have that benefit. This world passed me by, I'm a caged lion who forgot how to hunt. My partner, who's a genius, is deep in a lot of this stuff with clients. And that's something that I've worked on because he needs to work on other stuff, but he keeps getting pulled back in because as our clients go up and he just gets better and better at this, you know, we need to take a step back and work on processing and scaling. And it can be difficult because it's always easier to just say, I'll do more myself. Great. I'll do it. And it's a tough mindset. And also you just have to make that decision over and over again. It doesn't just happen once. Jason: [00:08:44] So when did you start realizing the role that you needed to kind of transform into in order to really scale the agency? Ben: [00:08:53] Probably, uh, just recently it took me a very long time to get out of, um. Well, I'm still very involved in sales, but it took me a very long time to get out of every fine detail of sales. And that was a process. I think you remember you posted to the group, Marty chiding me in his legendary. Jason: [00:09:14] Oh, I remember that day. I was like, oh wow. Ben: [00:08:53] I, um, Again, I just love to love if you're listening to this. So, I interviewed a salesperson who I just loved and we had a great time at like an arcade in Seattle and it was great. And I was telling the group, I was so excited and, I just did not do my due diligence. And Marty from Bad Rhino just, just gave a 15 minute. Just tongue lashing. And I just sat there and took it because he was right.   Jason: [00:09:44] It was out of love too. Ben: [00:09:46] It was, it was honestly, he was like apologizing. I was like, no, this is great. This is why I'm talking to others. Jason: [00:09:48] He called me, like, after he was like, man, I kind of feel bad. I was like, no, no, no. I was like, that's why we're all in the mastermind to hear the honest truth. It's not all sunshine and rainbows. Ben: [00:09:58] Well, and Jason, I think, you know, I'm super transparent and super honest. So I'm not there defending myself saying that what I did is amazing. Cause I have an ego. It was very educational. But to that point, I ended up, uh, having another Sales Director come in, that was at a different agency. I actually think it's valuable that they weren't sales-focused before. I like to see my sales team as almost more like project managers, kind of, that are just like very consultative and then getting our subject matter experts involved. That can end up being a little bit more expensive, but you just show people that you're the real deal. And so that's only recently happened. And so if you're talking about what role I fill, I'm kind of learning that every day. Being an entrepreneur, you can wake up in the morning and just stare into the abyss and you could do anything, which is kind of awesome, but kind of terrifying. So I'm learning more about culture. I'm learning more about process. I'm learning more about integrating the 39th and 40th person. I'm learning more about finances. You could be at a premium and lose money. You can be dirt cheap and make money. What happens on the backend matters. So I'm learning more about that. I'm trying to shed my kind of fun character that I play when I'm just ignorant of the day-to-day business and just here for fun. Because, you know, if you're down 10% at a million. Yeah, it's a little bit. If you're down 10% at 4 million, that's a lot. And if you're up 10% at a million, it's a little bit. And if you're up 30% at 4 million a heck of a lot. Jason: [00:11:36] When you're an agency partner with Wix, you wanna lock entire digital ecosystem for creating, managing, and growing your agency. Get the full coding and design freedom to create anything your clients need along with the tools to manage and collaborate with your team seamlessly from anywhere. And when it comes to growing your agency, you can get matched with new leads every day and earn revenue share for every website you guys create. They're backed by the Wix industry, leading security and cyber performance. You'll also have a dedicated account manager on standby 24 seven. So you can reach your goals and start setting new ones. See for yourself, head over to wix.com/partners. And re-imagine what your agency can accomplish. Love it. Well, let's talk about the benefits of niching down and not niching down. Because we see this a lot and I always chat about it. What are your thoughts on this? Ben: [00:12:38] It's easier at the beginning to not niche and it's, you just need the money. You take everything, all money is good money, and you just kind of need to learn your lessons along the way. If you start niched, that's great, but it can be difficult to find the right opportunities. For us, we went hard B2B like five years ago, but like, if an e-commerce company wanted to pay us money, like, okay, super top secretly, I'll take it and not tell anybody. So we niche down to a persona. Really. There's usually niching verticals and there's niching services. We've just decided to niche down to a persona. So, in our industry, B2B SAS in tech, the director of demand gen and the CMO, we just want to like wake up in the morning and know what they're thinking. And any service we provide, we need it to be, you know, we, we do a great job at marketing automation and it's in direct response to enough of our clients saying, we will pay you for marketing automation, because no one does it good. Just being like, okay, let's do it good. And then we can here with them. They tell us what's wrong, what needs to happen. And we build and build, and now like you present it to someone and they're like, holy crap. Like, I didn't know, an agency could do that for me. That has its own downsides. You know, the Chris from Rankings.io, we always joke that he does SEO for personal injury lawyers that are 40, that have two kids that live in this specific zip code, and he charges a heck of a lot of money. And he probably doesn't have to worry about the utilization rate of different people and stuff like that. But there's benefits to some niching. As we've seen, it's a differentiator. So we're not entirely a me-too agency. And there's benefits to doing a lot because you can fulfill needs. And, you know, I mentioned the client that's spending a lot of money. I can pivot a lot of different ways to make sure that they're getting value. So last year our churn rate was positive just because of upsells and various people getting involved. But. You have to, this is one of the reasons why I'm trying to get a better handle on the backend and the finances. It's you run a little thinner, you know, we're awesome at chat, but it's like, okay, do I capitalize that department to basically get ready to go out of the gate? Do I make it run on its own revenue? All of a sudden you have several little digital agencies that you need to be an entrepreneur on. Jason: [00:14:58] Yeah. It's, I always tell everybody in the very beginning, you got to kind of try out everything. Unless you really know what you're meant to do. And then even as you do it for years and years, and you see a lot of the bigger agencies doing this, they become the masters for that vertical or that horizontal niche. And then they start creating other practice areas. Ben: [00:15:20] Yeah. Yeah. Jason: [00:15:21] And they can actually grow. And I always tell everybody too is like, look, when you pick a niche, you still can take on work outside of it as long as it fits it. It's just, you're just marketing to that. And it's weird. When you market to a particular niche like a lot of us have seen, we'll have people from outside that they were like, we've heard your stuff. We want you to help with this. And we're like, you came off the website? Like most of this. So I just want to kind of get rid of a lot of people's worry because so many people fight it for so long. Or don't fight it. Like just keep going after all of them, but it just, when you can get a little focused, it makes things a little bit easier in order to, uh, to grow. Ben: [00:16:03] Yeah. And it makes sales easier. I mean, if you're doing one service on one vertical teaching someone to sell it and be able to speak words that the other person just jumps at is real easy. You know, for what we do, I need someone to come in with a little bit more experience who's done it. And that costs money. But, you know, the idea is that makes money, but things get a little simpler when you niche down and we're continually niching down on who we work with and what we do. Jason: [00:16:32] That's awesome. And tell us some of the benefits, because I always joke that when I ran the first agency, I was in search to kill mode. Like I would have never talked to any other agency owners. I would have just like searched and destroyed. And I always joke, like I would have never let myself into my own mastermind, which is the wrong mentality. And I've learned that over the years. And I want everybody regardless if it's our best run or whoever's mastermind, or you guys create your own, what's the benefit that you get from chatting with other owners? Ben: [00:17:04] Yeah. I've never considered myself to have competitors. Even people that we go up with. If I do, like, I should just be more different. I should just look at what I'm doing and make it different than they are, because if they're doing what I'm doing. Like from the prospect, why are we different? I think there's a major benefit because it just frees you up. And this is just from an entrepreneurial perspective, it helps justify some of your decisions and make you more confident. I was giving the example, like we were having trouble getting paid from a client and I brought it up to the mastermind and you gave a great, great answer, which was like, yeah, you can do whatever you want. Why don't you like send them flowers? And I was like, I didn't know. I could do whatever I want. And that seems like a silly thing to say, but you get into your routine of day-to-day. And honestly, like, that's a lot of my job now, now that you mentioned it, as president, is I talk to people on the team and they have this problem. And I say, well, why don't you just stop doing that? And they're like, I can? And it's like, yeah. And I don't expect them to wake up in the morning and stop working on a client just because they want to, but I have the opportunity to say, why don't you just not work on them and let's fire them. And that's the benefit of talking to a mastermind group is they're able to just be like, Hey, why don't you just not do that? I'm like I thought I had to. Jason: [00:18:28] Yeah, I know. It's just getting that outside perspective. You're so close to it. And I think a lot of times we're so emotional. Mostly connected to it where we just can't see the solution that's really apparent. Like you talk about something and like literally the other 10 people are looking at you going, you know exactly what to do, and then you hear it and you're like, Oh duh, that's so easy. Ben: [00:18:52] And, and that gets to the other benefit for me is I just realized I had something to offer. There's just been several questions where I go, oh, I absolutely know this answer. I did it. The prospect said this, it went great. Or just people have different personalities. So I can open up someone to be a little bit more direct, a little bit more transparent or something like that. But to your point, yeah, I mean, we're talking and someone in the group was like that wasn't the first time I blew 30 grand. And I was like, oh, that guy has his stuff together. And he makes mistakes too. Jason: [00:19:24] A lot of times what I've found too. Uh, even when I'm leading it or been in other masterminds myself, I'll give someone advice and then I'll have to ask the question. Do I do that? Ben: [00:19:38] Yeah. You almost like put on a brave face and you're like, why don't you tell the client this? And then it's like, you get on a call and it's like, whatever you want, Mrs. Client. How high? Jason: [00:19:48] Exactly. Yeah, exactly. Well, awesome. Well, Ben, this has been amazing. Thanks so much for coming on. Is there anything I did not ask you that you think would benefit the audience? Ben: [00:19:57] Yeah. I just want to say, as you scale culture becomes more and more important, and that is like such an amorphous word. I'm a big football fan and culture is just being used over and over again to where it's overused, but really it's, if you're listening to this podcast, you probably started an agency and the agency is really you. And the goal of culture is to just scale that out to where people make decisions you would make. They act in ways that are congruent with how you would act, even if it's not exactly how it's to where, you know, the 39th and 40th person can come into a, oh, this is how this works. And it's different than my previous agency. And it gets to everything in your agency from employee experience perspective that clients can tell that you have a great culture and your client wants to be there. So, that's something that I'm really working on and I've just found it more and more important because when you do that, all of a sudden employees give you the benefit of the doubt. All of a sudden employees buy in and want to help you throw out a goal and people use their creativity to help you. And it's not an adversarial relationship. They're part of something. So that's, um, it's something that I'm working on and I've seen the value of. And, maybe next time we talk, I'll give you an answer as to how I found it. Jason: [00:21:14] That's awesome. Well, I mean, it's always accidental and I always tell everybody, as, as you're building your culture, it's what you believe in. And you have to figure out and let everyone on the team know, you know, where you're going and why. And that gives them the power in order to make those decisions. And it's, it's great to see you figuring that out. And that's why you've come so far along. It's like, you know what to focus on now and you've been focusing on it and that's great. Ben: [00:21:40] You also have to pay attention to your habits, you know, how you live your days it's how you live your life. And so for me, I've had to really guard because scaling, you can just like, oh, just work more. Or, oh, sorry, you're going to have to work the weekend. And then you start building those habits and that just quickly becomes how things are done. And expectations. And so you really have to be on guard for getting in front of the right habits and taking a stand and be willing to lose a client or be willing to give someone a break for screwing up. And you learn it when you learn it. Jason: [00:22:15] Exactly. Well, awesome, well, thanks so much Ben for coming on. And if you guys enjoyed this episode and you want to be surrounded by amazing agency owners on a consistent basis where we can see the sh*t that you can't see. And we can, uh, help you along. And so you can scale a little bit faster and have a lot of fun doing it. I want to invite all of you to go check out digitalagencyelite.com. This is our exclusive mastermind where it's only for experienced agency owners. So go to digitalagencyelite.com. And until next time have a Swenk day.

Chris Dreyer is the founder and CEO of Rankings.io which is an agency specializing in SEO for personal injury law firms. Chris believes in being super niched in order to be successful for his clients. He says it takes extreme focus to deliver great SEO results and therefore his agency does not offer any other services or work with clients outside the legal industry. Chris is on the show to talk about how he's grown his agency beyond the first million and is now looking at an 8-figure revenue. 3 Golden Nuggets What got you to 7-figures won't get you to 8-figures. Referrals aren't scalable. Realizing this, Chris focuseds on marketing and has an employee dedicated to marketing for the agency, rather than just relying on referrals. Revenue doesn't mean anything if you're not profitable. As the agency revenue grew, so did expenses netting the same profit. Chris implemented the principles of Profit First and the agency's profitability has improved because of it. Get and keep the right people in the right seats. Whatever work is being done in-house, constantly evaluate whether those team members are actually contributing to the bottom line or causing a financial leakage. Sponsors and Resources Oribi: Today's episode of the Smart Agency Masterclass is sponsored by Oribi. Check out Oribi.io/smartagency for a free trial. Plus when you sign up for Oribi get 20% off the first three months with promo code: Smart Agency Subscribe Apple | Spotify | iHeart Radio | Stitcher | Radio FM How Did One Digital Agency Grow to 8-Figures? Jason: [00:00:00] On this episode, I bring back a repeat guest, friend, member, client on the Masterclass, and we're going to talk about how he went from a million in revenue all the way up to eight figures in the past couple of years. And we go over all kinds of really amazing stuff. So I think you're really going to love this episode and let's get into it. Hey Chris, welcome back on the show. Chris: [00:00:30] Yeah, thanks for having me, Jason. Jason: [00:00:31] Yeah. I'm excited to have you back on. It's been a while since you've been on the podcast. Obviously, we chat all the time in the mastermind and back and forth about Star Wars and all goofy stuff. But for the people that haven't listened to the first episode, tell us who you are and what do you do? Chris: [00:00:49] Yeah, my name's Chris Dreyer. I am the CEO of Rankings.io. We own a personal injury law firm SEO agency. So very hyper niche, both horizontally and vertically, and yeah, just excited to be here and happy to discuss it. Jason: [00:01:05] Yeah. So last time you were on, you were just kind of cresting the million in revenue, and now you're a much further, so kind of take us through that journey a little bit about where you're at now and what are some key things that kind of looking back of going I wish I knew this time and I could have even gotten to your level now faster. Chris: [00:01:30] That's a great question. That's also a really loaded question. Jason, still try to talk about all the areas. I feel like I had my white belt and then I put on, I don't know the jujitsu levels, but I felt like I had my white belt and then you kind of get your brown or whatever the next level is at a million. And I think, you know, we're, we're approaching that. I don't even know that I would say black belt, but. Yeah, we're probably on target for our goal. This year is $9 million, stretch 10. And so it's, it's been a huge change across the entire company. I feel like we have a real business now. I think the difference is when you go to that million mark. The owner can wear a whole bunch of hats and really hustle and get to that million mark and just fill, you know, use their, their sphere of influence and kind of depend upon referrals and get there. But I think that you actually have to do marketing, have to generate your own brand, your own inbound leads to really transition towards that, that eight-figure mark. There are, if you think about the main components of a business, so you've got finance, you've got marketing, you've got sales and you've got operations. Finance wise. We implemented Profit First because I found out the hard way. I took my licks. The first three or four years of my business, we kept growing a hundred percent, but my revenue wasn't increasing now, it was investing back in the business. But for me, it was becoming more stressful in those times. I'm like, well, why do I need a $2 million business when I'm making the exact same? So I had to learn how to be financially healthy. And as we grew, also, our profitability would grow. That was a big one. It took some time. Anyone that's read the book Profit First, it's this lean mentality of working off of less and considering profit. And when you're don't have any profit to create those percentages, it takes a lot of work. So I would say that was a big learning lesson. The second on marketing again, we were depending upon referrals, our entire staff. I think I had one marketing individual and. Which is funny. We still have one marketing individual, but our marketing spend's way higher because we used strategic partners, but everyone was centered around operations and doing great work. And that helped us get referrals from our clients and helped us build to that seven-figure mark. But continuing off of that, it's feast or famine on referrals, which I know you've talked about. Jason: [00:04:02] But I like the way that you do referrals. And I love that, you know, at the experience you were like, I want to call you out, Jason, about referrals. Cause you know, I always joke with people. And I'm serious about referrals aren't scalable if you're waiting for them. But the way that you do referrals is you're not waiting for them. You're giving ammo and you're building strategic partnerships where that is scalable and you've built an amazing business from that. Chris: [00:04:31] Right, right. But yeah, we kind of joke back and forth. You and I, and. Basically is anytime you put attention towards something and you're intentional, it can create something and activates it. So we, after reading Chet Holmes book, the Ultimate Sales Machine, where he talks about his dream 100 clientele list. I'm like, well, what if we did our dream 100 referral partners and were because we were so niched that there were a lot of services that our clients needed though, that we didn't provide. So I went and sought out individuals that we were trying to find and identify the best Facebook ads individual, the best pay-per-click the best, everything, video production, the services that our clients needed and really develop those intentional relationships. So that, that really was very powerful. I think a lot of people have a scarcity mindset when it comes to competition in air quotes. When in reality, there's a lot of abundances. There's a lot of opportunity and you can actually have this rising tide type of effect, where we refer a PPC company, PPC leads, and maybe they don't do SEO and they can refer us SEO leads. So it's, there's some mutual benefits there. Jason: [00:05:43] Yeah, I love that. I mean, yeah, that's something I wish I did better at the first agency because I was just trying to murder everyone. If you had agency in your title, like, you know, you were my enemy and I felt like you were trying to take from me. But I liked how, you know, after I sold, I realized seeing a lot of what you do and what other members do and all that. About how that's has helped you and just also seeing how much work is actually out there and only taking on that perfect work that you look for is really big. In switching focus a little bit. I think too, one of the main things that really changed a lot for you. I remember lots of conversations around this, was pricing, figuring out charging the right amount. Because I feel a lot of people are way undercharging and you've kind of take it up a notch even above that. Chris: [00:06:41] Yeah. It's a great question about pricing and. I think one of the benefits of niching, particularly as niche as we are with just personal injury firms, you can really understand the market and understand the levels of competition. I know the SEO specialists with giant egos listening are probably thinking, Oh, I can just go to  Moz or SEMrush and do a competition analysis and know exactly what I should charge. No, that's probably not the case. There are, there are intangibles that play into competition, and really understanding those intangibles and what it takes to create leverage to rank a particular industry is different. And that's the thing that we started understanding is, by working with just personal injury law firms, we could model the individuals that were successful and apply that to the other firms. Because the legal vertical is a very fractured environment. They're geography, they're there in all different places around the country, around the world. They have different practice areas. It's a very fractured type of environment. So the competition in Los Angeles is entirely different than St. Louis. And in some cases, Atlanta and the, uh, Orlando could be more competitive than a Los Angeles or Chicago, it's because of who's there. And who's investing in their marketing. Several years ago, Louisiana from a digital standpoint, had no competition. Now you've got Morris Bart. You have Gordon McKernan, and you've got these individuals Labrador Earl's investing a lot in their marketing. So the dynamic has shifted, but that was a very long-winded way of saying it really helps to understand your market. But we started, I think in our first conversation, we talked about that foot in the door, the audit. It basically allows us to set strategic targets and really understand who our client is, what their assets are, what their unique selling proposition is and what their competition truly is on a deeper level. And a lot of our competitors, they kind of try to play that against us. They'll say, Oh, well, we do an audit for free and other people charge $5,000 - $7,500 bucks. Well, guess what? Your audit sucks because if it's free, you're not putting a lot of staff and time, and effort into that audit. It's automated by some tool. And it's garbage. So that's the difference. And the discoveries really helped us determine what we needed to do to get results from clients. Jason: [00:09:16] Yeah, I love it. And the last thing I want to chat about, that I, I feel that you've done really well is kind of the structure and the different levels that you've created within the agency. Because a lot of people are like at the million, I feel that anybody can get to the million mark and a lot of people can maintain the million mark, but getting to the next level like you are, it's very challenging. And a lot of times we go, well, who do we need to hire in order to get further along and really scale the agency rather than just kind of hit that glass ceiling? So what were some of the roles or what was the mindset that you had a couple of years ago in order to make that transition and really start scaling? Chris: [00:10:05] It's a great question. And I obsess about operations and the right people in the right seats, more than any other thing. I think it's the most important aspect of running a business, particularly in having the ability to scale and scale with quality. The things that we've done is we've created, there's this big controversy, right? You've had the pod people on and let's do the nomenclature really quick. So a pod is a cross-functional unit. That is cohesive. They're self-governing. Each individual has their own function in the pod that contributes towards a goal. And then you have, what's more traditional; the traditional hierarchy and the teams where a team has individuals all in one function. So you have all the developers together, all the account managers together. And there are pros and cons to each. The pros of a pod is communication, collaboration. It's, they're self-governing, they can operate in their own P&L. That's kind of the pro. The con is they're harder to start up. You have individuals who don't have soft skills. It's harder to, uh there are a lot of challenges and those situations, um, then with the team. The pro and I'm kind of getting long-winded here, but the team is you have a deeper level of expertise, but there's challenges in those communication silos. So, we really embraced after a lot of time and energy and reading about the biggest organizations, whether it's GE or a Ford motor company or Toyota, or  Apple, we really embraced teams. Functional teams. Because even though there's the downside of communication silos, you have extreme levels of expertise, deep level of expertise. Which by the way,  Apple who is gigantic, that's how they operate is, they have teams, not pods and they have this deep level of expertise and they talk about their challenges. There's a great article on Harvard business review that talks about their organizational structure that I really encourage individuals to read. Jason: [00:12:16] Love it. Well, this has all been amazing, Chris, and I appreciate you taking the time for coming on the podcast and everything you do to help out the mastermind. Is there anything I didn't ask you that you think would benefit the audience listening in? Chris: [00:12:29] Geez, I think the most important thing is to, you know, think about your operations. Right people, right seats. And then also one thing that's not talked about as much as to eliminate waste, where are you leaking money? What tools should you not be using? What individuals aren't truly driving an impact for your organization? You need to evaluate those situations too. Jason: [00:12:50] What, uh, I guess the last question, since I lied. In figuring out how to eliminate the waste, what's the best way to figure out where you're wasting money? Chris: [00:13:00] Yeah on the tool and software aspect as an owner, or if you have a CFO or Director of Finances to do consistent reviews of your P&L and your vendor expenses. That's a big one that you can bring your leadership team. Uh, from a utilization standpoint, it depends on if you're using vendors or if you have in-house labor. If you have in-house labor and you're doing almost everything in-house, you need to track it to see if individuals are really contributing for utilization. If you're using vendors, you're paying for a unit. So it's a little bit easier to track that. And, um, it's having a scorecard or jumbotron, whatever you want to call it, to have this top-level view of your metrics, to understand where there are leakages because you can see on the scorecard where they exist. Jason: [00:13:46] Awesome. Well, thanks so much, Chris, for coming on, everybody, go check out Rankings.io and follow Chris and what they're doing, they do an amazing job. And it's been an honor to see how far you've progressed year over year. That's why we do what we do. And if you guys want to be surrounded by amazing owners like Chris, and figure out the things that you might not be able to see in front of you because you're just too close to it I want you guys to go to DigitalAgencyElite.com. This is our exclusive mastermind for really experienced agency owners wanting to scale faster, do really cool things, and be surrounded by even more amazing people. So go to DigitalAgencyElite.com and until next time have a Swenk day.

Brent Weaver is the CEO and founder of uGurus. He leads the vision for the company and creates educational programs that help agency owners work on their business to drive additional revenues, increase profits, and create freedom in their life. Brent is here to share his insight on referrals and the importance of choosing a niche for your agency. 3 Golden Nuggets Niching helps you fish in the right pond. Figuring out a niche where you can be profitable and deliver the best results is "fishing in the right pond" according to Brent. The key is testing out different ponds in order to find the best fit for your agency. Pareto Principle: 80% of outcomes are from 20% of input. Is worthwhile and valuable to determine if you're spinning your wheels on small clients that aren't helping contribute to your revenue. Going through this exercise is key to being more profitable. There are 3 marketing engines agencies need. These are:  content, partnerships, and paid ads. Relying on referrals is not scalable. It's like sitting on a one-legged stool. You must add these 3 marketing engines into the mix.   Sponsors and Resources Wix: Today's episode is sponsored by the Wix Partner Program. Being a Wix Partner is ideal for freelancers and digital agencies that design and develop websites for their clients. Check out Wix.com/Partners to learn more and become a member of the community for free. Subscribe Apple | Spotify | iHeart Radio | Stitcher | Radio FM Is Your Digital Agency Fishing in the Right Pond? Jason: [00:00:00] On this episode, I talk with Brent Weaver about why referrals just aren't scalable and why it's so important to pick a niche. I hope you enjoy this episode. Hey, Brent, welcome to the show. Brent: [00:00:13] Good to be here. Yeah, I'm excited to have you on, so tell us who you are and, uh, a little bit about the agency that you're in and what you do now. Yeah. So, uh, my name is Brent Weaver, CEO, and founder of uGurus. We are a business school for digital agency owners. We primarily work with agencies that are kind of 1 to 10 person range, really helping them to track more leads, win more deals, delivering delight for their clients. They can profitably scale their agency and achieve some freedom in their business in life. Before, uh, we're coming on into the ninth year doing this business. But before that I ran HotPress Web, which is a digital agency based in Denver, Colorado for about, I guess, about 13 years. And, uh, grew that from, uh, my business partner and I from, uh, us in our bedrooms and high school to a 14 person thriving agency in downtown Denver, uh, serving over 300 clients. And, uh, we had clients like Dish Network and Anheuser Busch Inbev and all sorts of, uh, smaller and medium-sized businesses across the board. Jason: [00:01:17] Awesome!. Did you sell the agency? Did you were like, Oh, we don't want to do this anymore? What's the what'd you do? Brent: [00:01:23] Yeah. So we did the business did get acquired by another shop in Denver. We had probably about two years before we sold the business. I started to blog and build some training programs for agency owners, and we had done some deals with Adobe. And so we, um, Kind of started kind of riding two horses at the same time we had the agency business, which was growing really well. And then we had this thing that, uh, myself and my business partner would do, you know, a day or two a week. We'd go and, you know, create videos, we'd go do our own thing. And, uh, and so we kind of felt like we were starting to run two businesses at the same time, but also I think just as I'm sure, you know, right. The impact that we had on. Other agency owners that were like following our processes and our methods, like we were getting all of these, thank you letters in all the time for people that we'd really helped them transform their life and their income and their freedom. And after a while, it was kinda like, Hey, we really enjoyed doing this. And we wanted our agency to go and be in a good place. So we had some really great opportunities to get that business acquired. And so we pursued one of them and it turned out really well. Jason: [00:02:24] Awesome. Let's talk about after high school, um, and do an agency, right? Because I think I know how, how it goes in high school. It's like, dude, I can, I can get some money for a year. Brent: [00:02:37] I was basically working uh minimum wage $6.25 I think an hour, at the time, at a fabric store and somebody paid me $500 to build them an order form for a candy store out of Michigan. And it took me about a day and I was like, cool. When I went to my boss at the fabric store and said, I'm going to go ahead and do this other thing. Cause I basically made like, you know, two months wages in a day. So, so that was that. Jason: [00:03:03] That's awesome. And so if you could go back to when you were starting, what would you have done differently? How would you grow the business? Brent: [00:03:14] I think for me, it's, you know, finding that audience, a high-value audience that you can leverage your skills to get really great results. For, as I mentioned, our first project was a candy store in Michigan. The only reason we got that client was because my business partner's dad would go hunting in Michigan and, you know, he'd go buy at this candy store and he'd pick up, you know, they'd order stuff. But then they'd grab these order forms, uh, to order stuff. When they came back to Dallas and they would have to fax the order form in, and Shernis, uh, the woman that owned the store would always, you know, have to call it. Well, I can't read your handwriting, you know, there's this like whole thing, a community that supported this business. And we just happened to kind of be a solution for that business. Right. But this tiny little candy store in Michigan, right. I mean, she wasn't making massive money. And so yeah, we built this thing, but the value of it right. Was great for her, but like, you know, it wasn't like it was worth $50,000 or $500,000, right. Or something like that. But I think that we could've, our same skills could have easily fetched us a lot more money sooner, but because we were fishing from this pond, that was kind of like the local neighborhood pond. Right. Like we only had the network that we had access to. I was making a lot more money than I would at the fabric store. Uh, I think there were other high-value ponds out there. And I think that's the thing that. Um, when we eventually figured that out, right, let's go hang around businesses that are, you know, making millions of dollars or tens of millions of dollars or like Dish, you know, billions of dollars. And it's just a totally different way to do business. Right. I mean, I remember when we got Dish Network as a client, I mean, they'd come in with these like last-minute deadlines, but they'd basically give us a blank check. They'd be like, Hey, as much as you guys can work over the next two weeks like we'll take all of your team's hours for the two weeks, and we'll pay you a premium on that time because, you know, we have some big deadline or whatever, right. And so it was just fundamentally a different type of client to work with versus where your, your skills might not be as valued. So I think that the audience component is something that we eventually learned. And once we started hanging out with businesses who, you know, in the millions of revenue, like budget became not like inconsequential, but it became a much less deciding factor in terms of like who you were, you know, what kind of work you were doing. Jason: [00:05:36] Yeah. I always found that when you first start out and I started out doing websites for 500 bucks too, I don't know why it's always, you know, 500 bucks, but you always think, well, that's the max someone will pay. Or if I charge them twice the amount, I have to do twice the amount of work versus figuring out that audience, like, you know, Dish Network. Like our first one, I think our first big client was like Wter.com. And they were a billion-dollar water brand, like Crystal Springs, Hinckley Springs, Belmont Springs, all these different Springs. And it kind of changed our mindset of going, Oh, there are these bigger companies that will pay for value rather than pay you for the amount of hours that you actually work. Brent: [00:06:20] Like a lot of people, I got convinced that your prospects sometimes start to dictate your mindset a little bit. And when we first opened our office in Denver, we were trying to, you know, we're in a conference room, we were thinking about, hey, where should we get new clients? And we thought, hey, maybe the chamber of commerce, right. Or something like that. And they were running these classes for brand new businesses. We thought that was a prime audience, right? People are like, ah, you know, all these new businesses, they all need websites. Right. But the problem was, they weren't established. They were $0 revenue. They were sole proprietorships. You know, these businesses that maybe had 10, 20, $50,000 a year in annual revenue, which is, there's a lot of businesses out there. There's like, almost 20 million businesses in the United States that are making $50,000 or less per year. So there's a lot of them out there, which is why Wix and Squarespace and GoDaddy and all these major brands are going on volume. Like they focus on that market, but for us as a small services shop, not a huge market like that. And so I was going and teaching these classes and I'd have all these people come up to me and say, oh yeah, maybe you can help me build a website. And so we'd go through the proposal process or I'd go through even qualifying and they'd say, well, yeah, well, we only have $500. We only have $1,000 dollars. And while we had done some projects for $20 or $30K, I started to convince myself that that was the market now for websites that like getting $1,500 for a website was like becoming really, really difficult. And, and I started thinking, okay, well, we should build our business based on volume or this or that. Like we were trying to solve the problem. And the only issue at the time really was. I was fishing in the wrong pond, right? Like, no matter how many cool sales methodologies I could use, no matter how much, you know, value-based language, right? Like if the pond that I'm fishing from literally has businesses that are, you know, $50K a year in revenue, like, you know, selling a $10,000, $20,000 website to them, it doesn't really make sense. Jason: [00:08:13] Very cool. And so how did you figure out the pond that you wanted to the fish after? And like, how would you do that over again? Cause I find that a lot of people struggle with that. And like you were saying, you kind of go to the chamber of commerce, you get a couple of clients and then those referrals actually dictate how your next couple of years are going to go because it's always the same or lower. Brent: [00:08:35] So I think once we sat down in a room and said, okay, this is not working. Right. So we looked at, you know, where was all of our money coming from, which I think is a really good exercise. There's this concept of the pareto principle where 80% of your yield or revenue comes from 20% of your inputs or originally it was like somebody looking at, uh, land ownership. Right. But this concept is, has played really well in business. So somebody had kind of taught us that we looked at our client base and we looked at who you're making the most money from. And yes, we did have a lot of clients that were small potatoes and they were taking up all of our time, but they weren't really getting us the results. So we looked at all of our clients instead of, hey, who's actually driving results for us. And it was, by and large, it was organizations that had, you know, had been established for five or more years. Had over a million dollars in revenue. Uh, for the most part, they had dozens of employees, whether it was a nonprofit or whether it was a business, you know, some of our clients had tons of employees. So we started looking at this and saying, look, let's just at least start saying no to anybody that hasn't been established for more than five years, it's less than a million dollars in revenue. And, um, you know, that has less than, let's say, 30 employees. So that was step one was at least identifying, Hey, here are some qualities, some constraints that this audience has that is actually driving revenue for us. And let's start saying no to all those other things. So which created some capacity for us to look at other types of businesses. The second question to that though is we started asking ourselves well, okay. So these are the clients that are driving all of our money. We know who is helping us make more money. We want more of those clients. So the second question is where do they hang out? Where do million-dollar businesses hang out? Right at that time, I really wasn't super educated on like verticals or really this idea of niching. To me, it was like a foreign concept. And if anything, it evoked a little bit of like resentment or disgust like, Oh, I could never niche. Right? Um, but we at least started asking ourselves that basic question, right? Where do these million-dollar businesses hangouts? And we start identifying organizations, there's organizations like EO. YPO in the Denver area, there were organizations like it was called Diner. It was like Denver Independent Network of Restaurant, uh, something. Right. And we started identifying these groups that these businesses hung out. And so for example, I went and gave a talk at the Diner Organization, which was basically this group of about a hundred Denver-based restaurants that were all roughly over a million dollars a year in revenue, right. There were the most successful restaurants in Denver that were independent. So I wouldn't give a talk at this group about how to leverage their website and social media to get more butts in seats. And there was like the same number of people that were in my old Chamber of Commerce classes. You know, there's about 15 restaurants, right? Except in this instance, I gave this talk, and then, you know, half a dozen restaurant owners came up to me and said, Hey, I love what you're doing. We don't have anybody that can do this. It's great that you're teaching me this, but can you just come in and do it for us? And every single one of those clients turned into a 10 to $20,000 initial project with ongoing, you know, 10, 15, 20K a year in work. So like one talk in the right audience. And it was a fundamentally different conversation afterward. And so that was where a real light bulb I think happened for us, was like, Oh wow. We can go in. Share do the same thing, right? The dynamics are the same, go teach stuff, share stuff, give tons of value. And if the pond is just a fundamentally better pond than, you know, we're going to have different results. Jason: [00:12:02] Yeah. I love to teach how to do it because there are so many agencies that think if they do that well, you're giving away the secret sauce. And at the end of the day, there's no secret sauce, but people will actually decide to work with you if they actually understand the plan. Like, I always tell everybody when I used to race cars and I would teach people how to go through a corner at a hundred miles per hour, like a 90-degree turn. And they'd be like, there's no way. But if I could actually communicate and show them, there is a plan for them not to die and then actually demonstrate it to them. Then they're going to always. Be able to like, Oh, I can do that. And then like, I'd always laugh with my other buddies and be like, oh, now they're faster than me. I was like, crap. I need to tell him, be like, hit the brakes harder there. Brent: [00:12:54] Well, I think that the fundamental, like, I mean the classic agency business model of staff augmentation, where at the time we had, let's say a dozen people working at our agency for a company, even an established company to go up there and hire a team full-time to be a part of their organization is a lot of money, right? I mean, if you're going to go hire three people to be part of a digital department, I mean, that's $50K in salaries a month, plus all the other stuff that comes with having a team. Right. Whereas you can pay an agency, you know, maybe even, it sounds like $50,000 is a lot of money, but when you put it in the context of the alternative for most businesses, or maybe they hire a, a jack-of-all-trades person that has 19 responsibilities within the business, and one of them happens to be maintain a website. Right. And they don't have the experience to, you know, really do like hardcore SEO or pay-per-click or build funnels. Right. Uh, so I think at the core, right, like agencies. Want to showcase their skills, uh, almost like a job interview, right? I mean, it doesn't make sense for most businesses to go out there and hire an entire team. Right. That's why agencies exist. Cause you can snap in those skillsets for a fraction of the cost. I think going out there and teaching what you do showing the results, uh, also is a big part of that showing your potential clients, Hey, this is what you can get with this kind of, to your point, right? Demo-ing, I think is a big part of that pre-sales process. Jason: [00:14:14] When you actually start doing this and you're, you're growing your agency, what's the mistake that you see a lot of agency owners make, or a mistake that you guys made with, you know, in terms of referrals. Brent: [00:14:27] I mean, look, referrals are, referrals are great. I mean, who doesn't love a referral, right? Uh, when, when somebody sends you an email and says, Hey, you got me great results. And here's my friend. You know, Joe and Joe need your results and you should, you guys should talk. Right? Cause then you get that a little bit of that credibility passes on. Right. And so referrals are, are great. Uh, the problem is they're not really predictable. Uh, they're not really scalable. Now I've published content. We've published blueprints about how to create systems around referrals, but even that right is kind of dictated based on the size of your network. Right? How many clients do you have? If you have 10 clients, you probably can't go to all 10 of them every day and be like, Hey. Can you give me another referral, right? Whereas, you know, with something like Facebook ads, right. I can go to Facebook every day and they will take my money and they will put my ads and in front of audiences. Right. So I think that referrals as a strategy, I call it kind of a non-strategy. Uh, it's hope marketing. It's, you know, referrals are table stakes. You should be out there doing good work and that should create referrals for you. And that will be like one leg of marketing, you know, game plan. Right. But you're, you can't really sit on a one-legged stool, right. It's not super comfortable. So we need to have a couple of other legs on that stool. And so I call those marketing engines, right. We want to have a couple of additional marketing engines outside of referrals. To help, uh, your business get those consistent leads that are predictable, repeatable, and scalable. Those are kind of three qualities that we want to see out of them. When I, when I say marketing engine, we should be able to put in a fixed amount of money, money, or time and get a predictable result on the backend of that. So the biggest mistake kind of back to your original question is that I think agencies, a lot of times they're so busy doing the work. And building stuff with their clients that they forgot to go out there and build awareness for themselves because they're so comfortable. With referrals because referrals are so easy. Like it's like the difficulty from relying on referrals, actually building marketing engines, uh, for the first time is actually a pretty big jump because referrals require you just to focus on your clients, which is what a lot of people are used to. Right. But going out there and proactively building a marketing engine feels like a lot of work. And so they don't do it. And I think that that was the biggest shift for us, right. Where we went from being passive, passively engaged in our marketing to going, Hey, you know what we need to actually. Really invest in this. We need to put somebody in the business. That's in charge of this, of the marketing component of the business. A lot of agencies out there treat themselves as they're, you know, they try to treat themselves as their own best client, uh, which is just, I mean, it's a recipe for disaster, right? I mean, we know that, that just doesn't work typically. And so we started this to shift resources, right? Both hiring internal staff members, dedicated to marketing the agency and then also hiring other agencies. To help us market our agency. Jason: [00:17:14] Very cool. And so what's one example of a marketing engine that you see really working well. Brent: [00:17:21] So I think there are three kinds of categories of engines. One is content. I mean, you're definitely awesome at this, right? You publish a ton of content. You're super consistent. You've got the great frequency of it. Another engine kind of category is partnerships. So finding other people that have your ideal client, either as their own clients or on a list. And then the final one is a paid advertising. So I kind of focus mostly on a track-based strategy where we're putting out. You know, the information we're putting out messaging and then the right people are coming to us. I'm not a huge fan personally of operating outbound and no, it's a great strategy out there. But I think for, if you're trying to get into a position of authority with your clients, I think that publishing becoming an influencer in your niche is the way you create raving fans. Right? It's really hard to create a raving fan through, uh, through outbound connection where somebody has never heard of you before. So in those three categories, I mean, one example of a content-based strategy. One of my clients does is they, um, they speak on stages. So it's pretty simple calculus day. Every time they go and speak on a stage where they're virtual or physical. Right now, right now, the physical is not really happening. So they've moved a lot of their stuff to virtual. They get anywhere between five and 15 qualified leads. These are longer sales cycles. But they have found that if they get about 20 to 30 qualified leads a month, that gives them enough energy to like to keep their sales pipeline like over full, right. They always have plenty of opportunities for them. Their marketing engine is really simple. Get on two stages a month and that's a solved problem for them. So their only marketing activities are really. Booking out those stages. So at any given time, they might have four to six months of stages booked sometimes even more now, before COVID hit, I think they were up to like 12 months of stages. And then all of a sudden, a lot of it evaporated and they did have to kind of rebuild that in the virtual space, but you know, that's a marketing engine, right. They know that if they go put their hour or two hours a week into outreach to, you know, other associations or organizations in their niche, that they're going to get that next stage book. Right. And they just keep kind of putting some time into that engine. No, they're not out there doing Facebook ads. They're not out there trying to publish blog posts. They're not out there on social media. Like their whole engine is just getting those stages, uh, booked onto their calendars. And then they're, they're just done. Right? So that's an example of content, right? Where you're out there, gigging in your market. Jason: [00:19:50] Awesome. Very cool. Well, this has all been great. Brent, is there anything I didn't ask you that you think would benefit the audience? Brent: [00:19:58] You know, I think that I mean, just on that last point of gigging, I think that this is kind of back to that. The core of what agencies can be doing for them. It's probably one of the one areas that I spend the most time coaching, which is. Helping people get out there into their market and building that confidence to share their content, share their expertise, start running ads, those types of things. And, um, I think that's probably one of the areas that I think people could always spend more time on or, or spend more money. Right. I've got clients who, before they came to us were like a Facebook ads agency. That's not spending any of their own money on Facebook ads. Right. And so, so trying to figure out how to fuel your engines and being confident that if you do that, You know, you're going to get results. I once had a client that before we started working together, you know, they're trying to attract $50,000 clients and they were scared to spend $500 in advertising. And that's one thing that I think. You have to think about it in the context of your client's value is like, if you're going out there trying to attract $50,000 clients or a hundred thousand dollar clients, right. The amount of effort that you need to put into that engine is probably at least somewhat proportional to, uh, to the output. So that's something to think about as you're starting to build your marketing engines Awesome. And, uh, you have a book out that everybody can go check out on Amazon. Or tell us a little bit about the book. Jason: [00:21:16] Yeah. So the book is called, Get Rich in the Deep End. And, uh, the basic premise is how to overcome that dependency on referrals and word of mouth as a digital agency owner, uh, how to identify your audience, build those awareness channels, attract the right clients, establish yourself as an authority in your niche, and then build systems and processes to acquire. Those prospects and leads. So we walk you through basically those five A's of audience awareness, attract authority and acquire. And the book is a little bit different in that we follow an agency on our story. This is kind of an amalgamation of a bunch of different clients that we kind of created a narrative in the story. So it makes it really easy to read.  It's a pretty simple concept. And, um, yeah, we'd love for you guys to support that it's called get rich in the deep end. I think your viewers would love to read that book. Awesome. Well, everybody go check it out. And if you guys enjoyed this episode and you want, and to be surrounded by amazing agency owners that can, you know, really see the stuff that you might not be able to see, and really know what it's like in order to grow above the eight-figure Mark or beyond. I want you all to go to a DigitalAgencyElite.com. This is our exclusive mastermind where we're always looking for the right. Agency owner that can have fun that can share that'd be transparent. And that really wants to scale very quickly. So go to a DigitalAgencyElite.com, and until next time have a Swenk day.