John Jantsch: This episode of the Duct Tape Marketing Podcast is brought to you by Gusto, modern, easy payroll benefits for small businesses across the country. And because you’re a listener, you get three months free when you run your first payroll. Find out at gusto.com/tape.
John Jantsch: Hello and welcome to another episode of the Duct Tape Marketing Podcast. This is John Jantsch. My guest today is Drew McLellan. He owns and runs Agency Management Institute. You might know them as AMI, which offers agency management training, consulting and facilitates agency owner peer groups, networks for small to midsize agencies. Drew, welcome back.
Drew McLellan: Thanks very much. Good to be here.
John Jantsch: Let’s start with the biggest problem that you solve. When you’re working with agencies, what is the biggest problem that you see over and over again? I know you’re getting a lot of little in the weeds and do a lot of training of their people and whatnot, but generally speaking, what’s the biggie?
Drew McLellan: The biggest problem we solve is actually not when we do a workshop for or anything like that. It’s that agency owners are inherently kind of feel like they’re on an island by themselves. They don’t have peers to talk to where it’s safe to have conversations around finance or people. They don’t know who to ask about best practices. So what we really have done, not unlike what you have done, is we’ve really built a community that helps agency owners run the business of their business and provide a safe place for them to ask questions that they go, you know what? I’ve owned my agency for 30 years. I should know the answer too. What’s the financial metric that says I can hire another person? Or whatever it is. But they just haven’t had a safe place to ask it. That’s, I think, the biggest problem we solve is that we give them a safety net and a safe set of advisors and counselors that help them run their business better.
John Jantsch: I’m curious as a marketer, because as you alluded to, I have a network of consultants as well, a community. I will tell you to a person, they all say that’s why they stay, but it’s not what attracts them because they don’t realize the value of that until they’re in it a bit. How do you find a way to communicate the value of community when all they think they’re looking for is a checklist?
Drew McLellan: Yeah. I have not found, other than testimonials and other things, I have not found a way to … It’s like telling someone you’re honest versus being honest. I just think it’s something that they have to experience. A lot of times they’ll listen to the podcast or they’ll come to a workshop and they will feel the comradery and they will feel the relief. I mean, that’s what I see on their faces. Like, “Oh my God, finally I have found a group of people who do what I do and it’s a safe place to not have all the answers.” And so they have to experience it.
John Jantsch: Yeah. That’s the tough thing. You and I have been doing this for a while. It seems like everybody is selling training on running and growing a digital agency now. I mean, that’s just everywhere. How do you position yourself? I know that you’re different and I know that our organization is vastly different, but to the person out there looking at a $10,000 price tag for this training that everybody’s selling, I’m going to show my cynical side here, even though half the people selling to them have never actually run a digital agency.
Drew McLellan: Or they’re 12.
John Jantsch: How do you cut through that clutter? Because that seems to be the opportunity of the decade.
Drew McLellan: Yeah. The podcast helps a lot. I mean, honestly I think it’s proof is in the pudding, right? I think when you consistently are helpful in a significant way, you demonstrate your knowledge. I think one of the ways that makes us very different is anyone in our organization that teaches or coaches, has owned their own agency for a minimum of 20 years and still today owns and runs their agents. These are people who not only have been through it all, seen it all, but are still walking the path. That to me is one of the ways that we differentiate ourselves. Then you know what? A lot of times we will get people who have tried other things and it just hasn’t been what they wanted. I think there’s plenty of great opportunity out there for agency owners, whether it’s you or it’s me or it’s one of the other organizations out there, they have to find their people and their path. I guess I’m a bad salesperson. I just sort of let them find their way to us.
John Jantsch: Well, and I think most organizations, I mean there are people in the Duct Tape Marketing Consultant Network that actually also belong to StoryBrand and to Digital Marketer. I think that sometimes, I mean what you have to realize is that you’re going to get something from all of those and there probably is no one Nirvana organization. But I think investing in yourself is a way to look at it as opposed to, “Oh, I’m only going down this path.” I think you need all of those things.
Drew McLellan: Well, and I think one of the ways we’re different is we only focus on the back of the house. We focus on the business of running your business better, more profitably. We’re not teaching anybody how to do branding or how to write a marketing plan or how to use story. I figure they’re pretty good at that already. What they really need to understand is how to read their P&L and make sure they actually make money at the end of the day.
John Jantsch: Exactly. What do you see as some of the biggest trends for agencies? I mean I know that it seems like every workshop I see right now is about AI, for example. What do you see as what I would call … I mean the AI is kind of like the sexy thing. What you see as the real trends for agencies that they better be paying attention to?
Drew McLellan: One of the more interesting trends that I’ve seen for about the last 18 months is as more and more clients are building up internal departments and as work that was normally being given to the agency is being held in house, many agencies have combated that in a really interesting way. They’re embedding employees into their client’s business. Whether it’s two days a week or four days a week, but they literally have an office and a desk and without exception, and I’ve got small agencies, let’s call them eight, 10 people and I have big agencies, a hundred people, both doing this with brands that are small and large. In every case, they have grown that piece of business because what they do is they develop relationships with multiple people in the organization. They’re walking around, they get pulled into meetings.
Drew McLellan: The trick is finding the right employee to embed because it’s pretty easy for them to all of a sudden feel more alignment with the client than it is with the agency. So you have to find the right person, but it’s a great way to combat and do business in house. That’s one of the trends I’m seeing.
John Jantsch: Well and it’s really interesting because there are a lot of organizations, pretty good sized organizations, that haven’t done a senior marketing hire because they’re afraid of it. They don’t know how to manage that person, what to tell them to do. The idea that you’re going to actually give them the workforce but you’re going to manage that person probably to a large extent as well, I think probably has a lot [inaudible 00:07:52].
Drew McLellan: Yeah, and agencies are charging a premium for it. So in a time when so much of our work is being commoditized and being down to the dollar because of all the freelancers and folks. You can get anybody to do anything on Fiverr regardless of quality but that’s a different discussion. But strategy and the smarts of how to navigate this constantly changing sea of marketing opportunities like AI. You know what? That’s always going to be sold at a premium.
John Jantsch: Yeah, absolutely. Where do you feel like social media has landed now? I mean obviously when it started it was like this new thing out here on an island that we needed to do. Where does that fit in your mind into the overall piece for marketing or certainly for agencies?
Drew McLellan: I think it’s interesting because when it started and there were six of us out there tweeting and Facebook and all of that, all the early adopters, it was about creating connection. Then marketing took over and it became about selling stuff. I think now what’s happening is, at least on the organic side, we’re sort of back to making connections again. I think that’s one of the reasons why Facebook groups have been so popular is because that’s a place where people are talking to people and no one’s selling stuff and no one’s promoting stuff. I think in some ways it’s oddly because it hasn’t been that long, but it’s sort of gone full circle. Now it’s wrapped around the pay-to-play side of it. But I think the organic connection side is actually getting to be a bigger deal again than it was a few years ago.
John Jantsch: Yeah, I think you see that in a resurgence of LinkedIn.
Drew McLellan: Yeah, absolutely.
John Jantsch: LinkedIn, there was a point where people were dismissing it as a wasteland. You certainly see, as people have gone back in there and said, “No, I’m going to hand craft some relationships here.” It’s like wow, this is really powerful. I think overall we’re coming back to a much more personalized approach. I think that one of the challenges with all these free new things that got us all … Facebook used to, when the organic reach was great, it was like easy. I think it made a lot of marketers lazy. I think some marketers are bemoaning the fact that, “Oh I’ve actually got to write one email at a time now instead of 10,000.” But I think the opportunity is there and I think the demand of the buyer. I can see it in my own email efforts and things.
John Jantsch: If you’re not personalizing, if you’re not making an effort, you’re just not even going to get open. You’re not going to be relevant anymore. I think it used to be that people would open everything. You’ve got all this great open rate, click through rate but now the buyer’s like, “Hey, I got a lot of options and you don’t have to be one.”
Drew McLellan: Well, and I think this is true regardless of the size of client, but certainly in sort of the small to mid size business range, I think it still boils down to, I want to know who I’m doing business with and I want to like them and I want to have a connection with them. Whether it’s like the depth of connection, like I can text them or call them and they respond, or at least there’s a place where I know I can actually have a real human to human conversation by email or whatever it may be. I think consumers are demanding that more and more. I also think with all the gotcha media and everything else, people want to know that they’re not going to be embarrassed by who they do business with. So they want to have a sense of who that person is.
John Jantsch: Yeah.
John Jantsch: Everyone loves payday, but loving a payroll provider, that’s a little weird. Still, small businesses across the country love running payroll with Gusto. Gusto automatically files and pays your taxes. It’s super easy to use and you can add benefits and management tools to help take care of your team and keep your business safe. It’s loyal, it’s modern. You might fall in love yourself. As a listener, you get three months free when you run your first payroll. Try a demo and test it out at gusto.com/tape. That’s gusto.com/tape.
John Jantsch: Let’s talk about hiring and training. You do a lot of work on the back end with agencies. When times are good, like they seem to be right now getting talent, finding people you know to do even basic work gets a lot harder. What are you helping folks do to get over that idea of getting not only people with experience and talent, but people who want to be there and people who want to serve clients? That’s probably the biggest challenge, I would guess, with a lot of the businesses we work with.
Drew McLellan: I think right now it is absolutely the number one challenge that most agencies are facing. Clients are ready to spend money, clients are ready to do work. BizDev seems to be coming a little easier. I’ve had more than one agency say to me, “I have stuff sitting on my desk that I should be responding to and I don’t have enough bodies. I can’t take on more work.” I think the pendulum swings, right? During the recession ’07, ’08, everybody was letting people go and you could hire great people for a dime on the dollar. Well, the pendulum is on the far other end, right? The good news is it’ll come back to center.
Drew McLellan: But right now what agencies are having to do is are having to be much more thoughtful about things like what is a competitive benefits set? How can I be more flexible? One of the great things agencies could do that a lot of corporations are not willing to do yet is we can build a lot of flexibility into the work day into the workplace. So allowing people to have a life and work, I don’t believe in life work balance, I don’t think it exists, but I think a life-work blend where they support each other, I think we are uniquely qualified to do that. So agency owners have to get comfortable doing that because I remember in the last 10 years, I’ve had a lot of agents who are saying, “Everyone will be under my roof,” or fill in the blank. “Everyone will clock in by 8:00.”
John Jantsch: Yeah, yeah.
Drew McLellan: The world is changing. If you want to have great employees that are going to stick around and be invested in you, you’re going to have to find a way to help them have the life that they want to have while serving your clients well.
John Jantsch: Yeah. I think of course this workforce that’s coming up right now, that seems to be particularly, particularly important to the point where they will take 20% less money if they can ski on Friday because that’s the lifestyle they want.
Drew McLellan: That’s right. We did some research. We have this research survey called the Agency Edge. A few years ago we talked to over a thousand agency employees. Our goal in going into the research was to figure out these millennials in air quotes. What we found out is there is absolutely a millennial attitude in agencies, but it’s rarely the age group that you think. So that most people that we classify as millennials chronologically do not have that millennial mindset of I want to travel the world and a job is just a job and I don’t want to work past 5:02 and all of that. But if you treat them that way, they’ll turn into a millennial.
Drew McLellan: But what we found is there are a lot of older people in our workforces that actually have that attitude. So it’s not just the young people. I think everybody is struggling to manage it all and to find a workplace that helps you manage it all, that is a humane place to work. That says, “Look, I’m going to treat you like a grownup and I expect you to behave like a grownup in return. As long as we have that agreement, we can have a lot of flexibility here.” That’s one way to keep great employees for a long time.
John Jantsch: Yeah. Talk to me a little bit about account structure. One of the things that has become very common whether you’re an agency or an individual business owner is we’re delegating a whole bunch of stuff to a third party. I mean we can get the best copywriter for this specific thing, we can get the best designer for this specific thing. I’m sure a lot of your agencies are doing that because you can hire programmers, great talent for very specific things rather than having somebody sit there all day long and go, “Okay, we found another project for you.” How are you finding that the folks are managing that? Some of the work they’re doing is client facing or on behalf of a client? I’d love to hear what you think is the best approach for that.
John Jantsch: Let me preface this with the fact that over the years I’ve worked with lots of clients where I wanted somebody to actually manage that work, but of course I was the guy they hired. I was the rainmaker and then I immediately said, “Here’s Bob.” That didn’t go so well. So I’m curious how you’re finding people navigating that because we’re never going to grow a business until we as the owners can get out of that seat. But by the same token, how do we keep the fact that we need somebody client facing who then is probably also going to manage a whole bunch of third party folks? I think it’s a great opportunity but a tough dynamic.
Drew McLellan: Yeah. I think part of it depends on your size. I think the smaller you are, the harder it is because you don’t have … In a larger agency, let’s say 25 people, they’re going to probably have a traffic manager or a project manager who is shuffling the work to the producers and the producers are going to be a blend of in house and 1099 folks. But there’s one central person who sort of relegated that. In the smaller shops, you’re right, I think of the account service person often has to serve in that role.
Drew McLellan: What most agencies are doing, and again, a lot of our agencies are 10 people or less, they’re keeping the thinkers in house. So they’re keeping them on staff. So the owner is able to groom those account service people to help them become more strategic, less order taker, all of the things that keep the agency owner in the thick of the day to day, so the owner is able to grow up that talent so he or she can start stepping away and isn’t the woobie for every client. What they’re doing is they’ve got a core team of producers in a super small shop. They may be 1099s, but they probably have some contractual agreement with them where they’re buying 20 or 30 hours [inaudible 00:00:18:36]. So they know they’ve got them. In a larger shop, they might have a single producing team in house or a couple of teams and then everything else is [inaudible 00:18:48]. So it’s a very rare agency today of any size that is not a blend of W2 and 1099s.
John Jantsch: Yeah. Okay. Where do you fall on … There’s a lot of folks encouraging people to carve out a niche, go after a certain type of business and certain type of industry and just be the person for that. Where do you fall on that idea?
Drew McLellan: Well you don’t know it, but actually you just sent me up to tell you that I have a book coming out in about a month called Sell With Authority that is all about for agencies of some size, and I’m going to say 15 people or more, that it’s pretty difficult to break out of your local geography if you don’t have a specialty. A specialty can be an industry or a niche, as you said. It certainly can be a geography like where we know the Pacific Northwest better than anybody else. It can be an audience. But to not have any area of specialty pretty much means that you’re a generalist. No one’s going to drive by three general practitioners to get to a fourth general practitioner. They’ll all drive by a bunch of doctors to get to Mayo Clinic. I think for agencies that want, especially today, the way people find their agency or their marketing partner, the way they find them is they’re finding us.
Drew McLellan: In some of our research, what we found is that about 80% of clients found their agency. The agency did not find them. They went looking for them. So if you have no expertise, what are they looking for? It’s hard for them to find you unless you happen to be the local agency, which by the way is a choice. Then you’re going to work the rotaries and all the boards in your local community, which is a fine way to make a living. There’s nothing wrong with that. It’s just a choice you have to make.
John Jantsch: Yeah. I do think that you can … A lot of times people when they hear the word niche, they think immediately plumbers, contractors. I think you can get good at developing a niche around solving a specific problem to that business owner.
Drew McLellan: Absolutely.
John Jantsch: To me, the Duct Tape Marketing, you can say all you want about the brand. I mean, the biggest thing that we solve is we were the only ones talking about marketing as a system for the small business. That idea was enough to be very different because nobody else was talking about it. Now obviously you have to deliver, but I always tell people that you don’t have to pigeonhole yourself. You just have to find something where you can deliver more value than anybody else because the idea for me of working in one industry would drive me crazy because it has some efficiencies. It certainly can be very profitable, but to me it’d be terribly boring.
Drew McLellan: Well, and what we advocate actually is a three legged stool approach, which is I saw a lot of agencies in the last recession who only had one area of specialty, either shrink dramatically or go away. But I think there’s danger in being just about this one industry, but I think you can be in three industries that sort of have what I call connective tissue between them. So there’s common threads between them, but you can build up practices and almost referrals in between the legs of the stool. But I’d much rather sit on a three legged stool than a one legged stool.
John Jantsch: Yeah. Drew, where can people find out more about the Agency Management Institute, and gosh, I’d love to have you back talking about your book too.
Drew McLellan: Yeah, that would be great. They can just go to AgencyManagementInstitute.com. Everything that they want to know, access to the podcast, we produce a lot of content that has no firewall, no gate, anything. We’re just trying to be helpful. If people find their way to us and we can be helpful, then that’s a win for us.
John Jantsch: Awesome. Well, thanks for joining us and hopefully we’ll run into you soon out there on the road.
Drew McLellan: Sounds good. Thanks, John.