In this episode, Stacy sits down with CEO and founder of McLellan Marketing Group, Drew McLellan. The two discuss the many ways in which you can enhance your business and transform it from being good to great by addressing everyday issues that can occur and small changes that can make a huge difference.
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Stacy Jones: 00:01
Welcome to Marketing Mistakes and How to Avoid Them. I’m Stacy Jones, the founder of influencer marketing and branded content agency Hollywood Branded. This podcast provides brand marketers a learning platform for topics for us to share their insights and knowledge on topics which make a direct impact on your business today. While it is impossible to be well versed on every topic and strategy that can improve bottom line results, my goal is to help you avoid making costly mistakes of time, energy, or money, whether you are doing a DIY approach or hiring an expert to help. Let’s begin today’s discussion.
Speaker 2: 00:32
Welcome to Marketing Mistakes and How to Avoid Them. Here’s your host, Stacy Jones.
Stacy Jones: 00:37
Welcome to Marketing Mistakes and How to Avoid Them. I’m Stacy Jones. I’m so happy to be here with you all today, and I want to give a very warm welcome to Drew McLellan, CEO and founder of McLellan Marketing Group. With over 30 years in advertising, Drew is a true veteran in the advertising industry. He has spoken at conferences and appeared in publications like Entrepreneur Magazine, New York Times, Washington Post, Agency Post, Ad Age, CNN, Businessweek, and many others. The Wall Street Journal even calls him, “One of 10 bloggers every entrepreneur should read.” He also owns and runs Agency Management Institute, or AMI, which serves over 250 small to mid-size agencies of all types so that they can better learn how to increase their AGI, attract better clients and employees, and let the agency owner actually enjoy the perks of agency ownership.
Stacy Jones: 01:26
For both agency and other business owners listening, it sounds too good to be true, right? And this is why I wanted him to come chat with our listeners today, and I’m so excited to have him here to share his wisdom and experience. He truly does know what he’s talking about and his workshops absolutely work, as I’m happy to attest to having been part of AMI for the last few years. So today we’re going to talk about the common mistakes agency owners often make and learn some better ways to run your agency or business as it absolutely crosses over. We’ll learn what has worked from Drew’s experience, what could be avoided, and how some agencies are missing the mark. Drew, welcome.
Drew McLellan: 02:02
Thanks so much, glad to be here.
Stacy Jones: 02:04
Super happy to have you here, and you are the traveling crazy man who’s never in one place, so I’m so happy that I was able to get some of your time.
Drew McLellan: 02:13
Yes, and, well, and ask you know, I’m happy to do this from any hotel room anywhere on the planet, but it’s nice to be home and in my home office doing it.
Stacy Jones: 02:22
Well it’s a very nice looking home office indeed. What I’d love to start off is having you share a little bit more about your background and what got you into agency ownership, and also what got you into being this awesome power of leading hundreds of agency owners down this path of figuring out how to run their agencies better.
Drew McLellan: 02:45
Okay, so I’ve worked at agencies my whole professional career. I actually started freelancing for Gray Advertising in Minneapolis when I was still in college up at the University of Minnesota. And that’s really been my only employer ever since. So I’ve worked in super big agencies like Y&R, I’ve worked in small agencies, and when I was about 30 years old, I was working at a place that was not a very good fit. I was the perfect combination of arrogant and ignorant. I had no idea what it meant to run an agency, but I was very much a, “How hard could it be?” So stepped out, and then realized very quickly, “Oh, crap, this is hard.”
Drew McLellan: 03:26
And along the way, very early in the agency’s life and will be 25 years old in 2020, so knock on wood, it seems to be working. But anyway, early on in the agency and in my tenure as an agency owner, I found this organization that understood that agency owners are usually accidental business owners. They’re great at whatever they do for clients, but not so great at the business side of the business. And so I became an avid member, completely changed the way I ran my business, and fast forward 10 years, the guy who ran that organization said, “You know what Drew? I think you’re the guy.” And I said, “I don’t know what you’re talking about.” He said, “I think you’re the guy to buy my consultancy and take it to the next level.” And long story short, at first, I was like, “I don’t really need two risky businesses. I’m good.”
Drew McLellan: 04:22
But for a lot of reasons, we worked it out, we spent about a year negotiating the deal, and AMI was born out of what he had started. So now today, I get to help 250 or so agency owners figure out how to do it better. And the reason I’m able to do that is because if there’s been a mistake made in running an agency, I’ve done it, and I’ve seen my other peers do it. And I learned something new every day, and I just try and bring all of that to bear in our content and in our workshops and wherever I am, if I’m speaking from a stage, in a podcast. Anything we do, my whole goal is to help agency owners do it better.
Stacy Jones: 05:06
Well, and you’re here today to do that as well, so thank you.
Drew McLellan: 05:09
You bet, my pleasure.
Stacy Jones: 05:11
So when you’re working with agencies, and I know you work one on one as well as doing the AMI group settings. What are some of the most common mistakes that seem to pop up? And I’m pretty sure I’ve made every last one of them, so-
Drew McLellan: 05:25
You and me both.
Stacy Jones: 05:26
Yeah. And pretty much every other agency owner has also made them, even if they haven’t realize they’ve made them yet. But what are some of those mistakes?
Drew McLellan: 05:35
Well, I think first, understanding that if you’re an agency owner today, and especially if you survived the recession, what that means is you’re doing a lot of things write. And so often my work is not about wholesale change. It’s about adjustments and tweaking and going from a seven to a nine in terms of either effectiveness or profitability to whatever it is. So as we think about these mistakes, I don’t want your listeners to go, “Oh my God, I should just start selling shoes at Payless.” We’re doing a good job, but oftentimes where we shortchange the agency is when we shortchange ourselves. So a lot of times, we make these huge sacrifices to keep the agency alive. We will go without paychecks for months. We will lend money into the business. We will do all these things rather than run the business by the numbers.
Drew McLellan: 06:30
So that’s mistake number one. If you are an agency owner that is asking yourself and your family to do without to keep the agency afloat, then what that means is you’re not running the business by the numbers. You don’t understand agency math, which most agency owners don’t understand, because we didn’t go to college to learn that stuff. In fact, we went to college and got into agency business to avoid math. And then we found ourselves as owners and we’re like, “Crap, what is a P&L and why do I care?” So I think that’s the biggest mistake is that we don’t run our business by the numbers. We run it by the gut. And while that is great for building culture and that is great for building loyalty with our clients, what it is not great for is our bank account.
Stacy Jones: 07:17
No, and I know that from my own experience. It actually took getting married for me to take a hard look at our agency finances and realize that I couldn’t loan my own money back into the agency, because my husband was going to get really upset about that very quickly.
Drew McLellan: 07:30
Yeah, and I’m not saying that loaning money into the agency is always a bad idea, but there’s a right way and a wrong way to do that. And you don’t … I’ve had agency owners call me because they’ve drained their 401K and poured it back into their agency or things like that, and you just can’t put your family at risk. And whether you’re single or you have 27 offspring, whatever your definition of family is, you’ve taken this huge risk. You’re probably working 60 or 70 or 80 hours a week, and you deserve to get compensation from that.
Stacy Jones: 08:05
What are some of the first steps an agency owner can take to shore up their finances? Where should they be digging in and looking?
Drew McLellan: 08:13
So the first is just sort of understanding some basics. So when we read Ad Age or Adweek and they tell us the size of agencies, they’re always reporting gross billings. And the reality is, gross billings is just a vanity number. It’s irrelevant. So if I think about an agency’s finances and let’s just do the easy math. Let’s say that the agency is a … bills five million dollars. But three million dollars of it is media. Then the reality is, and they’ve got other costs of goods like contractors and other things that they spend money on to serve the client. Maybe they end up with a million dollars or a million five that they actually get to spend on agency expenses, which can be kind of bucketed as people, overhead, and hopefully profit.
Drew McLellan: 09:02
So the first mistake we make is that we care about gross billings, and we set our target goals around gross billings, and we manage our budget to gross billings. And really, we have to manage our budget and our targets to AGI, which is adjusted gross income. So gross billings minus all of our costs of goods including anybody who gets a 1099 from you. I don’t care if they work for you in your office, 40 hours a week. If they’re a 1099, they are a cost of goods. And what’s left is your adjusted gross income. And that’s how you run the finance of your business, and now you’ve got this pot of money that you actually get to spend. And so now it’s about making sure that you stay in ratio, which as you know, because it’s sort of a AMI anthem, it’s 55-25-20. So 55% of your AGI should be spent on loaded salaries, so people, benefits, all of that, W2 income, including your own as an owner. 25% should be spent on overhead, and that should leave you 20% for profit.
Drew McLellan: 10:02
And if you really run by those numbers, one of the very first things you’ll see is oftentimes, I have too many people on my staff, right?
Stacy Jones: 10:12
And so you made the comment, and you came back and you re-made the comment, that if someone’s 1099, they absolutely need to be a line item above your general agency costs. Why is that?
Drew McLellan: 10:27
Well, it’s interesting, because if you have a traditional accountant who doesn’t understand agencies, they are putting it down in your expenses. And the reality is, a contractor is someone you hire to do a specific task that you need done for a client. So if, and sort of the litmus test of this is, if I’m a copywriter that you’ve hired to do some work for one of your clients, and that client goes away, you don’t keep sending me checks. That makes me a cost of goods. That means you only employ me, and I use the word employ in air quotes, you only hire me to do work when you have work that you need done on behalf of a client. That’s why it’s a cost of goods.
Stacy Jones: 11:10
And if that work, if that individual’s hired to actually do agency work, so marketing for the agency, anything that could be supporting the actual agency and sales, and today we all have virtual assistants that we work with as well. So is that something that still should be, that above line item, or something that’s baked back into employee costs?
Drew McLellan: 11:32
I think it depends on how sophisticated you want to be with your accounting. So for example, if you have a VA, technically if all they ever do is agency stuff, and they never help you do anything for a client, and you’re going to give them money no matter what, like when they’re on vacation or, right? So all of a sudden you go, “Well, that doesn’t pass the litmus test.” So in our world, what we recommend is anyone who gets a 1099, regardless of what they’re doing, that they are a cost of goods.
Drew McLellan: 12:03
They are … I would say the exception would be, for example, if you hired an outside accounting firm to do your regular books and all of that. You’re now paying … You’re not really sending them a 1099. You’re paying their company a fee. That’s a little different. That can go in your overhead. But if somebody’s getting a 1099 from you for whatever reason, I would just put them in cost of goods. And perhaps that means that your AGI is a little smaller. But it forces you to run your business in a leaner way, which is never a bad plan.
Stacy Jones: 12:41
Nope, that’s true. So what are other mistakes, even in the financial area, that you’re finding agency owners are making?
Drew McLellan: 12:50
So one of the biggest mistakes, and we have all been on the receiving end of this. People come into your office and go, “I can’t possibly put more on my plate. I’m freaking out. I’m having to work until 6:00. You need to hire someone.” And we-
Stacy Jones: 13:05
Drew McLellan: 13:06
Right, right, that, right. We, in a panicked state as agency owners, start looking for someone, because surely if everyone is … Everyone looks super busy. But what we don’t do is, we don’t actually do the math of whether or not we need a person. So there are a couple data points to look at. By the way, one of the biggest mistakes many agencies make is we don’t do time sheets every day. Without daily time sheets, that data is so foundational, has nothing to do with billing. I hope most of you are not billing by the hour there. You’re billing by the project or value billing. So this has nothing to do with how you bill a client or how you talk to a client about work. But it is about how you use the resource that is your people.
Drew McLellan: 13:51
So A, daily time sheets. So let’s assume that everyone is on board with that, which I’m sure they’re not. But let’s just make that assumption. So now what I want to do is, I want to look at my adjusted gross income, and I want to say, “I need about $150,000 of adjusted gross income per full time equivalent, or FTE.” That’s probably the most violated agency metric on the planet. Most of you do this. You’re going to be closer to $100,000 of AGI per FTE, or below. And that means that your profit I bet is in the 2%, 3%. When part of AMI is, everyone has to show their financials. So I see hundreds of agencies’ financials every year, and among our agencies, they’re at about $135,000 of AGI per FTE. And I of course am nagging them on a regular basis to get it up. But at least it’s better. So part of all of this is what you measure on a regular basis, you start to pay attention to.
Drew McLellan: 14:53
One of the other mistakes around people are, great, we’re super busy, but are we actually making money? So looking at profitability by client, and looking at profitability by project, which by the way, you can’t do if you don’t have time sheets. That allows you to go, “Oh, this really big client that we’re doing a ton of work for, we’re actually paying for the privilege of doing work for them.” Because at the end of the day, cash flow wise, it’s awesome. A lot of money in, but all that money’s going right back out.
Drew McLellan: 15:27
And because they require so many revisions and there are so many delays and fill in the blank here and there, and we have so much scope creep, we’re actually losing money every day we work for them. And without that visibility, you just think, “Oh my God, I’m billing them $20,000 a month. This is awesome.” But what you don’t realize is, $22,000 a month is going right back out the door.
Stacy Jones: 15:51
No, and if you’re not taking that siloed approach and look of it. You’re thinking just the overall massive amounts of dollars you’re getting in, or the realm that you have to get in just to keep that net going and going. So it’s very hard as an agency owner to even say goodbye to a big piece of business that you might be upside down on.
Drew McLellan: 16:11
Right. Yeah, again, it really all boils down to sort of crunching the numbers, and having a dashboard. So one of the things I talk about in some of our workshops is, I get that most agency owners are not CPAs and did not take a lot of accounting classes, and in fact avoided … I don’t know about you, but I took a lot of classes to avoid taking accounting classes.
Stacy Jones: 16:32
I was a theater major, Drew.
Drew McLellan: 16:34
Right, so there you go, right? So it was like, “I can take astronomy, or I … Yes, I do want to know about the stars,” right?
Stacy Jones: 16:42
Drew McLellan: 16:43
So I get that agency owners are not savvy with numbers. So you’ve got to build on a dashboard that is super simple for you to look at, that you can plug in a few numbers, and it sort of shows you at a glance how healthy your agency is. So as you know, we have this report card that is an Excel spreadsheet. And actually, we just updated it so there’s a visual dashboard. So I will … Actually, you haven’t even seen this yet. So I will shoot you an e-mail with it, and if you want to include it in the show notes for people to download. Super easy to fill out. There’s instructions on the sheet, and you just plug in some numbers, and it pulls out things like, “Okay, here is my cost per FTE.” Because you want to look at what my AGI per FTE is, but you also need to look at your salary per FTE. Because if those numbers are super close together, then what that means is your 55-25-20 is going to be completely out of whack.
Stacy Jones: 17:42
Yeah, and I think doing this … I think some of the biggest hesitancies that I’ve heard from other potential agency owners to join AMI is, they’re worried about revealing their finances. They’re worried about sharing this spreadsheet, the big look in. And I will tell you, from a personal experience, none of us really care what’s on anyone else’s. We’re caring about our own, and that’s where we’re micro-focused. And we’re more so interested to see how other people are doing it and where they’re doing it well. And so it’s less about looking at who’s not doing something well, and just trying to explore how that is.
Stacy Jones: 18:15
And when I sit down twice a year, because that’s what we do for AMI with the meetings, I go through and I ingest QuickBooks. I know, I don’t have my accountant do this for me or my bookkeeper. I actually do the sheets myself, and I know you say that anyone can do them. But it helps me actually get back in touch with my company and really have a pulse on what’s going on and dive in so deeply to the figures and have them speak in a different way with your worksheet, versus just looking at gross AGI and net.
Drew McLellan: 18:44
Yeah, absolutely. And I think everybody, especially their first meeting, is pretty intimidated. I mean, it’s like taking off your bathing suit. You feel like you’re out of shape and you’re by a bunch of supermodels. But the reality is, the learning that comes from that, the questions that people ask you … First of all, it’s a very safe environment. Everybody is very supportive and kind and all of that. But they do ask hard questions sometimes, and I’ve had agency owners go, “You know what? I don’t know the answer to that question, but man, I should.” So they make a note to ask their accountant or whatever. But I think you’re right. I think the learning comes from seeing how other people are doing things and saying, “How is it that your lawyer fees are a third of my lawyer fees?”, right? “Oh, well, because we have this great lawyer who specializes in agencies. Let me introduce you.” So there’s a lot of that that happens.
Drew McLellan: 19:38
And the other thing that I think is super valuable is, you don’t show these kind of documents to anyone. So it’s you and your accountant, pretty much, that see your P&L and all of these other things. And having other sets of eyes who understand them, looking at them and asking you questions, there’s no doubt you’re going to learn about your own agency and your agency’s finances. And over time, you’re going to continue to tweak those documents so that they serve you better. So once you get over that initial, “Oh my God, these guys are all super successful, and they’re making so much money, and I’m going to show them this, and they’re going to boot me out and they’re going to laugh.” Once you get over that discomfort, which of course never happens. Everybody’s finances are the same, and the most successful agencies in the world have down years. It’s just, there’s an ebb and flow.
Drew McLellan: 20:28
As you know, what I see, the pattern I see is that for most agencies, after the first five to 10 years, so many agencies in the first five or 10 years just grow every year. And the agency owners … And I remember being this way too, thinking, “This is like shooting fish in a barrel. This is easy,” right? And then you have your first, “Oh crap,” year. And after that, the pattern is up three or four, down one, maybe 18 months, and then up three or four, down one, 18 months. And so you sort of get used to and more comfortable with the ebb and flow that is running an agency. And when you see 12 other people who are living it and sharing their financials and you go, “Oh, I remember last meeting, you were eating ramen noodles because things were so …” And there was … Everyone was having to chip in a quarter to have a cup of coffee, and now you’re up a hundred thousand dollars or a million dollars or whatever it is.
Drew McLellan: 21:33
It also is comforting to see that ebb and flow in other people, because it makes yours feel less dire.
Stacy Jones: 21:41
Oh, I think if anything, being exposed to other agency owners’ financials and learning about them makes from … I came in from a very siloed world. I wasn’t talking to other agency owners.
Drew McLellan: 21:52
Stacy Jones: 21:52
I wasn’t sharing things. When I sat with them, I’m like, “Okay, everything is perfect in my world. I should probably not share that I did that, or that this is happening, or that we’re really scared about this, and at night, I’m awake at 3:00 in the morning wondering about this other thing.” And actually being in the group sessions, you find out that other people feel this way and that even the worst agency in the room, the one that has the worst financials that year, there are plenty of things that they’re doing absolutely right in other ways that you want to actually do. So it’s really cool because it is an absolute exchange of ideas and knowledge and learning, and you get a lot less scared and embarrassed about where you might be, and you actually identify that you’re having more successes than you previously might have understood.
Drew McLellan: 22:43
Yeah, I think there’s something, and I think this is true in any profession, but I think there’s something about being with peers who hold you as capable and accountable and ask you tough questions, but are also there to support and celebrate. So what I say to agency owners is, you will never be surrounded by a peer group who is more excited when you make a big sale, and who is better to commiserate with when a client screws you. These are people who walk the same walk every day, and in our groups anyway, you’re with the same people all the time. So you’re in a cohort that is sort of defined. And these people become confidants and friends and you grow to love them as human beings and people. And so it is awesome. And AMI isn’t the only one. There’s plenty of other networks out there, so.
Drew McLellan: 23:38
I just did a webinar yesterday and one of the things that we were looking at, we have a free assessment on our website where an owner can sort of grade themselves in five areas. And we’ve done it for about a year, so I did a webinar that was talking about sort of where people were thinking they were doing a great job and where they weren’t. And one of the data points we looked at were AMI members versus non-AMI members. And there was a delta of about 16% where the AMI members self-identified, so take it for what it is, that they were doing better in these five categories than the others. And what I said was, “This is not an endorsement of AMI, but what it is an endorsement of is surrounding yourself by peers that you can learn from.” And so whether that’s EO or Vistage or one of the other agency networks, I don’t really care where you go.
Drew McLellan: 24:27
But you don’t have to be a lighthouse keeper on an island in some remote part of the world where you are so isolated and removed from everybody that you have to learn it all yourself. There’s a better way to build your business, and I think that’s through a collaborative group like that.
Stacy Jones: 24:48
Yeah, and I was just talking to someone the other night, they invested in some auto facilities, like the Meineke, Maaco type of scenario. Totally not an agency, right? And I was sitting there and I was listening to their power pains that they’re going through as they’re building, and they’re new owners, and it’s everything the same as an agency. There’s not that much difference out there. But I was suggesting that they find some group like Vistage to talk with, and there’s so much reluctance by people to go into that, because they don’t understand the value. And it really … I’m here, I will happily give Drew a testimonial, but also a testimonial to any of these other groups I haven’t even belonged to. It helps. It’s a life changer. It’s a lifeline and a life changer.
Drew McLellan: 25:35
At the end of the day, one of the things that, when I put on my agency owner hat, one of the things that always amuses me about our agency clients is, no matter what industry they’re in, they think it’s so unique, like, “Well, you don’t know what it’s like to be …” Fill in the blank. A dentist, a plumber, a whatever it is, right? And the reality is, when you’re running a … Especially if you’re running a service business, they’re pretty much the same. You have people problems, you have process problems, and you have profit problems. You can pretty much put your problems into one of those buckets, right? And people problems can be clients or employees, process is about getting things done, it’s about being efficient, it’s about communication, and profit is about, are you making any money?
Drew McLellan: 26:21
And I don’t care if you are running a psychiatry service, which I think some agencies do on the side, or an agency or whatever, we do all have the same problems. But there’s great comfort in surrounding yourself by people who, when you use the jargon of your industry or you’re talking about going to a conference where you … I just came back from MAICON, which is the Marketing Artificial Intelligence Conference, which was spectacular. It’s going to be … They’ll do it again in July of next year, so I highly recommend it, for agencies or brands. But when you start talking about things like, “Well, how are agencies using AI?” and all of that, you also get subject matter coaching and learning from each other. And as you have experienced, people pick your brain about the things that you’re brilliant at. You get to pick their brain about other things. And so I guess the message is, don’t go it alone. Find a peer group that you trust, that you think you can learn from, wherever that may be, and the more you give in those groups, the more you get back.
Stacy Jones: 27:28
Yep. One other topic I wanted to talk to you about is content. You are a master at creating content. I’m pretty good at it myself as well, so-
Drew McLellan: 27:38
I was going to say, one of these days, I’m going to get as good as you are, but.
Stacy Jones: 27:41
Yeah, I’m pretty good at it. But what actually attracted me to you when I was looking at different agency resources was the content you were producing. And it wasn’t nearly as much content then as you are doing now. But one of the topics that you share and that you’re really building up with other agency owners, and I try to let people understand the importance of this, because our in-bound is where we get all of our calls and our e-mails. And it’s substantive from what we actually get from it because of our blogs and our podcasts and our e-books and our … It just keeps on going and going. But can you chat a little bit about how agencies need to maybe make themselves their own client, and spend some time focused on themselves?
Drew McLellan: 28:25
Yeah. So long before we called it content, I have been a believer of this. So long before I owned AMI when I was just running my own agency, I understood very early on that what I call selling with authority. So what that means is, I define an authority position or a thought leadership position that I can own, and I sell by giving away how smart I am about the world. And I share. And my whole goal is, I ask myself the question every … And this is true of both the agency world, my agency hat, and my AMI hat. I ask myself the same question. “Is this piece of content I’m about to share going to help my prospect be better at their job today?” Regardless of if they hire me ever, will this thing I’m sharing help them be better at their job? If the answer is yes, then I hit publish. And if the answer is no, it’s sales-y or it’s kind of fluff or whatever, then I don’t, right?
Drew McLellan: 29:25
So I think the statistic is 70 or 75% today for most agencies. By the time you know that there’s a prospect out there, by the time you get an RFP on your desk, by the time you get a phone call or an e-mail, that buyer is 70 to 75% through the buying process. And they have spent so much time already consuming whatever it is you put out. So if you’re putting Facebook posts about your company party, they’re getting a sense about your culture. If you’re putting out a podcast that demonstrates that you are a subject matter expert in marketing dental practices and everything you talk about is around that, then they understand very quickly that you have an expertise in that. And what happens when you produce that kind of content, and I know you see this all the time in your business. What it does is, it is like a lightning rod attracting people directly to you, and they can self select whether or not they’re a good fit.
Drew McLellan: 30:28
So what it does is a couple things. Number one, it puts people on your radar screen that you had no idea were out there, and it puts you on their radar screen. Number two, it pre-sells, because you’re demonstrating over and over again that you already know your stuff long before you know that you are basically being considered. And then what it does is it shortens the sales cycle, because … I got an e-mail last week from an agency owner, and she said, “We’re having some trouble and would love to make a phone call. I would like to schedule a phone call. I think we might want to hire you.” So two days later, we had a phone call. And long story short, she’d already told her leadership team that they were hiring us. I didn’t know that, right? So I’m talking to her and I’m asking questions and she’s like, “I don’t think I’m being really clear. I’ve already told my team we’re hiring you. I’ve already made the buying decision. I just want to know what we should do together.” Who doesn’t want that sales cycle, right?
Drew McLellan: 31:30
And we have that same experience on the agency side as well because we are producing this content. And the idea of, “I can’t give it away because my competitors will see it.” Stop it. “I can’t give it away because I’m the only one who knows this thing.” Seriously, stop it. Just be helpful and just … And I will have agency owners say, “Well if I tell them all this, they’ll do it themselves.” Yep, some people will, but odds are the ones who are going to do it themselves didn’t have the budget to hire you anyway. But understanding how it’s done and wanting to do it yourself are two completely different things. And having the … If that were true, all of us would cook at home every day, right? But we don’t. I can go and find the recipe for fill in the blank, but sometimes I just want to go to a restaurant and have someone else do it, because I think they’re better at it for whatever reason. Same is true for us.
Drew McLellan: 32:24
So I know that for you, when I’ve watched you build out your business, part of, even with all the content you share, and even all of the how to do it yourself stuff you share, there are still things that, as a brand or a generalist agency, I don’t have. I don’t have the contacts. I don’t have the years of experience. I don’t know how to negotiate the contract as well as you do. Oh, don’t get fooled into thinking that if you share what you know, that you are exhausting what makes you valuable. All you’re doing is actually demonstrating how valuable you would be if they hire you. And I see it. People say to me, “What agencies are killing it?” It’s agencies that have niched down, that understand they can’t be everything to everybody. And so they’ve really defined who they are and who they serve, and then start serving them through content, without any expectation.
Drew McLellan: 33:25
You were in a workshop about content, and we were talking about, “You know what? It could take a day or a decade, and you have no idea how long someone’s going to consume your content before they’re ready to buy.” It could literally be a day. They could listen to one podcast episode and go, “I have to hire that agency.” Or it could be 10 years. And what do you care? As long as there are enough of them in the funnel, then that means you always have sales activity.
Stacy Jones: 33:51
No, it’s true, and you have to just start. And we started writing our blog … I started writing our blog, it was not a team activity back then, in 2012. And I just kept going. And if I had never started, we would not have over 25,000 readers of our blog on a monthly basis. And we could have a lot more than that, I’m sure, but I’m pretty happy and content with what we have, and we’re striving and growing. But you have to just start somewhere, and that share of knowledge, the best way I go about it is, I’ll talk to a client or prospective client, and they just don’t get it. They just, there’s something that’s not making sense. So if I don’t already have one written, I’ll write a blog. And then I’ll post it, and then I’ll send it to them and say, “You know, I had written a blog that I think would really be helpful to you.”
Stacy Jones: 34:39
And now, you haven’t just wasted your time sending them an e-mail. You actually have created content that you can turn into so many other pieces, from infographics or e-books or collateral or parts of your newsletter. And you have to just start as an agency owner.
Drew McLellan: 34:55
Well, and I think a lot of agency owners go, “I don’t have time.” And it’s a couple things. Number one, you have to make the time. You have to get out of the day-to-day work and actually run your business, which is by the way another mistake many agency owners make is they are too engrossed in the day-to-day dealing with clients to actually step out and run their business. 50% of an agency owner’s time should be spent on biz dev, and content can be a part of that.
Drew McLellan: 35:20
But number two, and I think you do this perhaps more masterfully than anyone else I’ve ever seen, you can create one piece of content and then turn in into five or ten different things. And it really is just about having a process. As you said, I record a podcast. And out of that podcast, I’m going to get a blog post. I’m going to get three videos. I’m going to get two infographics. I’m going to get a quote card. I’m going to get a … fill in the blank. But once you have that defined and you sort of have articulated to your team, “I’m going to give you this audio file or this video file. Do these seven things with it,” it’s really not as time consuming as we think. We do it for clients all the time.
Drew McLellan: 36:02
There’s no one on the planet who is better suited to be someone who sells with authority than an agency. We have all of the equipment, we have all of the people, we have all of the skills, we have all of the tools. If a dentist or an insurance agent or a mechanic can do it, oh my God. We can do it. And yet, we just don’t very often, which is a huge advantage to the agencies that do. But it drives me insane when I hear agencies cold calling prospects or walking an exhibit floor without having … if I today, now, and I’m sure for you too because I’ve been doing this for a while. If I go to a conference and I introduce myself, people will go, “Oh, Build a Better Agency podcast,” right? There’s … They may not know very much about me, they may not know very much about AMI, but there’s some connective tissue that they understand that I’m someone in the space that maybe has something to teach them or share.
Stacy Jones: 37:07
Yeah, we get on most of our in-bound calls and even our out-bound now, we get people who comment on, “Oh yeah, I get your blog.” I’m like, “You too? You also get our blog? I didn’t …” Because I don’t go into our CRMS really and figure it out. But it’s amazing that if you create this collateral, people that you would never expect get it, and they share it. So it’s something that’s really powerful.
Drew McLellan: 37:31
And at the end of the day, if you really think about why you do the work you do, I genuinely want agencies to be more successful. And whether they ever give me a dime or not, I don’t care. I just want to help them be better and make more money and be happier in their world. And some subset of them will give me a dime. And there are others who will consume my free content forever and ever and use every ounce of it and make a ton of money, and you know what? That makes me happy.
Drew McLellan: 38:09
So if you go at it with that attitude of … I’ll have someone say, “Well somebody’s been on my e-mail list for two years and they’ve never hired us, so I’m going to take them off.” I’m like, “Why the hell would you do that? They might be a day or a year away from giving you the biggest contract that you’ve ever had in your agency’s history. What do you care if they’re on your e-mail list?” If they will re-opt in, if you’re going to do that every so often, shut up and send them your newsletter.
Stacy Jones: 38:38
No, it’s true, and we’ll have our newsletter that goes out every Monday, and there will be people I haven’t heard from in literally years, and I’ll get an e-mail back by way of the newsletter. They’ll respond to it, and they’ll say, “You know, an opportunity just came across my desk, and I think we should talk.” It’s amazing, because I don’t have the bandwidth to talk to everyone I’ve ever talked to in the last decade and try to hustle and follow them and chase them down, nor do I have interest in doing that. So it really is a lovely approach to doing brand marketing.
Drew McLellan: 39:09
Well, and I also think it’s sort of like investing, right? The idea of day trading, knowing what day the stocks are going to go up or down or whatever, I’d rather just put a dollar in every day and know that the dollar cost averaging sort of rule will take care of me. And I think of content marketing in the same way. You have no idea what day this prospect is going to get annoyed with their agency, or they’re going to get fired and get a new job, or whatever it … You have no idea when they’re going to need you. But if you are always present, and you are always being helpful, then on the day, you’re going to be top of mind. So just be helpful all the time.
Stacy Jones: 39:57
Helpful Honda people.
Drew McLellan: 39:59
Yeah, right. Right.
Stacy Jones: 40:01
Yeah. So in your endeavors to be helpful, you have created an upcoming conference series that is … I will say, I was actually surprised at how excited I was by your speakers that you have in place. I mean, they’re really top experts within the space. So I signed up right away. I think I signed up, probably the first person to sign up. But can you share with our listeners a little bit more about it?
Drew McLellan: 40:25
Yeah, so there really is no conference, no national conference for what I call small to mid-sized agencies. So there are other conferences that say they are for small agencies, but their definition of small is 300 employees. That is not small. Three employees is a small agency. And so I’ve felt for years that was kind of a gaping hole. And to be really honest, it’s a huge commitment and a huge risk to … I mean, when I signed [inaudible 00:40:55], it’s sort of like when you sign a mortgage and you don’t show me the page where they say, “And when you’re done paying for this, here’s what you paid …” I was like, “I don’t want to know.” But I just felt this need that we really do need to have a national conference that talks about issues that are relevant to true small to mid-sized agencies.
Drew McLellan: 41:14
And so in May of 2020, the very first Build a Better Agency Summit will happen in Chicago. So it’s May 19th and 20th. And you’re right, I’m so excited about the speaker line-up. So fortunately, in both my marketing world and my agency consultant world, I have made some really great friends, people like Joe Pulizzi and Jay Baer and other folks like that. And so I went to them hat in hand and said, “I need this first one to be amazing. And I know what you normally charge for a speaking fee, and I know how crazy your schedule is. Is there any way we can figure out a way to do this together?” And every one of them was incredibly generous, not just with doing it at a reasonable rate, but also just with their time and offering to help.
Drew McLellan: 42:05
But, what I’m really excited about … So even more than there being no conference for small agencies, there’s no conference where for two days, all we talk about is how to run the business of your agency better. So you can go to a conference like I did, MAICON, or you can go to INBOUND, or you can go to Content Marketing World, and you can learn how to serve clients and do that sort of thing. But there is no conference that just talks about how to actually build a more sustainable, scalable, sellable agency, how to make more money and keep more of what you make. No one’s going to talk to you about tax strategies and profit strategies. So that’s really, that’s the focus as you know of AMI in general. We’re all back of the house stuff, how do you run the business better? So that’s what I wanted the conference to be too.
Drew McLellan: 42:52
So I went to these folks and I said, “I know normally,” like I said to Jay Baer, “I know normally you talk about hug your haters or whatever the new book is.” And I love his stuff and his company’s stuff. I said, “But what I want you to talk about is, I want you to talk about all the different revenue streams that you’ve built coming into your company and how you’ve done that. And I know you’ve never talked about that publicly before, but would you do that on my stage?” And he was like, “Yeah.” And so all of these people are not only showing up, which is a bloody miracle unto itself. But, they are all sort of peeling back the curtain and letting us see operationally how they’ve build what they’ve built.
Drew McLellan: 43:35
So I’m super excited about that. The list of speakers is remarkable. And we’re going to have a lot of different ways of learning. So we’re going to have the keynote speakers and breakout speakers. But we’re also going to have these things called round tables where we have subject matter experts, and everybody who registers will be invited to pick which round tables they want to go to. So for example, if you’re worried about succession planning, there’s going to be an expert there who … And you’re going to be sitting with other agency owners discussing. Not them talking at you, but all of you discussing and learning from each other about what you’re thinking about when it comes to succession planning. Which is really what the core of AMI is is, it’s not me the subject matter expert preaching the word and everyone else is just quiet. It’s me facilitating all of these smart agency owners to share what they’ve learned with each other. And so I wanted a big part of the conference to be that.
Drew McLellan: 44:28
So not only will you learn from the speakers, but you will also learn from other agency owners and I’m expecting you to show up ready to teach too. So super excited about it, and folks can learn more about it at the AMI website. So if they just go to agencymanagementinstitute.com, right on the main nav, it says BABA Summit for Build a Better Agency Summit, and they can check it out. We do … We only have room for 200 people, so if you want to go, A, it’s cheaper now than ever before, and it just keeps getting more expensive because conferences are … But I do, knock on wood, hope that it’ll sell out, so don’t wait too long if you think it’s something you want to do.
Stacy Jones: 45:12
And we’ll include that information on the podcast notes as well.
Drew McLellan: 45:15
Yeah, awesome. Thanks.
Stacy Jones: 45:17
Well, is there any last words of advice that you would share?
Drew McLellan: 45:22
Yeah, so it’s interesting. So I was just at this conference, and I was talking to a friend of mine named Mitch Joel. And Mitch started a tiny little agency in Canada, grew it to be a regional powerhouse, sold it to WPP, stayed on as president. Then it got sold to Mirum, stayed on as president of his division. So he’s literally owned a five person agency up to multiple hundred people agency, and been a part of a big holding company. And he recently retired from the agency, sold his shares, and is now doing other stuff.
Drew McLellan: 46:00
But I said to him, “Okay, you’ve been out of it for a couple months. Looking back, what do you see now that you didn’t see when you were in it?” And I think what he said was really profound. He said, “You know what?” He said, “I wish I had enjoyed it more when I was doing it. I was always so worried about everything. We’d get a new client, and I’d worry about how to staff it. We’d lose a client, and I’d worry about money.” He said, “There was never a day that I didn’t make something up in my head to worry about. What I often didn’t do was just revel in the fun and the creativity and the energy that I got to be a part of every single day, and I didn’t really enjoy the journey as much as I should’ve.”
Drew McLellan: 46:53
And I think that’s a great reminder to all of us. I don’t care how tough things are right now. It’s a pretty good gig. And we get to be around smart, funny people. When we do our work well, we actually get to help other people achieve their goals, which is very rewarding. And you know what? The work we do is interesting and challenging and creative, and we don’t often celebrate that. And we don’t often slow down enough to appreciate it. So I guess that’s my parting thought is, don’t be looking back after you’ve retired or sold your agency and go, “You know what? Should’ve, could’ve, would’ve. I could’ve enjoyed that more. I could’ve reveled in the fun of it more.” Do it now while you have the chance.
Stacy Jones: 47:42
Now that is awesome advice, Drew. Thank you.
Drew McLellan: 47:44
Stacy Jones: 47:45
So thank you again for joining us today, and for all our listeners, thank you for tuning in, and we will chat next week on Marketing Mistakes and How to Avoid Them.
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